LABOR LAW

AND
SOCIAL LEGISLATION

Labor Standards
Labor Relations
Social Legislation
 TABLE OF CONTENTS

OVERVIEW OF THE LABOR CODE

PRELIMINARY TITLE
BOOK ONE: PRE-EMPLOYMENT
TITLE I. RECRUITMENT AND PLACEMENT OF WORKERS
TITLE II. EMPLOYMENT OF NON RESIDENT ALIENS
BOOK TWO. HUMAN RESOURCES DEVELOPMENT PROGRAM
TITLE I. NATIONAL MANPOWER DEVELOPMENT PROGRAM
TITLE II. TRAINING AND EMPLOYMENT OF SPECIAL WORKERS
BOOK THREE. CONDITIONS OF EMPLOYMENT
TITLE I. WORKING CONDITIONS AND REST PERIODS
TITLEII. WAGES
TITLE III. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES
BOOK FOUR. HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS
TITLE I. MEDICAL, DENTAL AND OCCUPATIONAL SAFETY
TITLE II. EMPLOYEE’S COMPENSATION AND STATE INSURANCE FUND
BOOK FIVE. LABOR RELATIONS
TITLE I. POLICY AND DEFINITIONS
TITLE II. NATIONAL LABOR RELATIONS COMMISSION
TITLE III. BUREAU OF LABOR RELATIONS
TITLE IV. LABOR ORGANIZATIONS
TITLE V. COVERAGE.
TITLE VI. UNFAIR LABOR PRACTICE
TITLE VII. COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS
TITLE VII-A. GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION
TITLE VIII. STRIKES AND LOCKOUTS AND FOREIGN INVOLVMENT IN TRADE UNION ACTIVITIES
BOOK SIX. POST-EMPLOYMENT
TITLE I. TERMINATION OF EMPLOYMENT
TITLE II. RETIREMENT FROM THE SERVICE
BOOK SEVEN. FINAL AND TRANSITORY PROVISIONS
TITLE I. PENAL PROVISIONS AND LIABILITIES
TITLE II. PRESCRIPTION OF OFFENSES AND CLAIMS
SOCIAL LEGISLATION
SOCIAL SECURITY SYSTEM (RA 1161 AS AMENDED BY RA 8282)
GOVERNMENT SERVICE INSURANCE SYSTEM (RA 8291)
PATERNITY LEAVE ACT OF 1996 (RA 8187)
RETIREMENT PAY LAW (RA 7641 AMENDING ART. 287 OF LC)
ANTI SEXUAL HARASSMENT ACT (RA 7877)
ACT AGAINST CHILD LABOR (RA 9231)
13TH MONTH PAY LAW (PD 851)
MIGRANT WORKERS AND OVERSEAS FILIPINO ACT OF 1995 (RA 8042)
BIBILIOGRAPHY
 OVERVIEW

BOOK ONE: PRE-EMPLOYMENT –sets the period and groundwork to attain a state
of full employment by making the full possible use of its manpower

BOOK TWO: HUMAN RESOURCES DEVELOPMENT PROGRAM – emphasizes

the need of developing human resources.

BOOK THREE: CONDITIONS OF EMPLOYMENT – deals with the mechanism to

protect or secure the workers which may be employed especially after appropriate
qualification and training.

BOOK FOUR: HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS – deals with
protection and promotion of the health and safety of the worker.

BOOK FIVE: LABOR RELATIONS – spells out the terms and conditions of
employment.

BOOK SIX: POST EMPLOYMENT – provides for security of tenure and conditions
under which a worker may be dismissed.

BOOK SEVEN: TRANSITORY AND FINAL PROVISIONS – provides for sanctions

for violation or non-compliance with the Code; it also provides for procedure and
prescription for the enforcement of rights under the code.
 Labor Standards
Labor Law
PRELIMINARY TITLE Labor Relations Law – that which defines the status,
rights, and duties and the institutional mechanisms that
CHAPTER 1: GENERAL PROVISIONS govern the individual and collective interactions of
employers, employees.
Article 1: Name of the Decree
Labor Code of the Philippines - that which requires payment of benefits by
government agencies to the worker of his family when
Article 2: Date of affectivity and while he cannot work, by reason of sickness,
The Labor Code took effect on November 1, 1974 disability, old age, death and similar hazards.
(six months after its promulgation on May 1, 1974).
Note: Social legislation is broader in scope that labor
Labor Legislation – consists of statutes, regulations legislation because all labor laws are social legislations
and jurisprudence governing the relations between but not all social legislations are labor laws.
capital and labor, by providing for certain employment
standards and a legal framework for negotiating, LABOR SOCIAL
adjusting and administering those standards and other LEGISLATION LEGISLATION
or their representatives (Azucena, 2007). 1. Directly affects 1. Governs the
employment (e.g. effects of
-that which seeks to stabilize the relation between wages) employment (e.g.
employers and employees, to forestall and thresh out compensation for
their differences through the encouragement of injuries
collective bargaining and the settlement of labor 2. Designed to meet 2. Involves long
disputes through conciliation, mediation, and voluntary the daily needs of range benefits
and compulsory arbitration. workers
3. Covers 3. Covers
Note: Labor standards laws and labor relations laws are employment for profit employment for profit
NOT mutually exclusive; they complement each other. or gain and non-profit
4. Affects work of 4. Affects life of
Social Legislation – those laws that provide particular employee employee
kinds of protection or benefit to society or segments 5. Benefits are paid 5. Benefits are paid
thereof in furtherance of social justice (Azucena, 2007). by the workers by government
employer agencies (e.g.
employees
- indicents of employment (Azucena, 2007). compensation
commission)
Labor Standards Law – the minimum requirements
prescribed by existing laws, rules and regulations Labor – exertion by human beings or physical or mental
relating to: efforts, or both, towards the production of goods and
1. wages; services.
2. hours of work;
3. cost-of-living allowance; and - also mean that sector or group in a society, which
4. other monetary and welfare benefits, including derives its livelihood chiefly from rendition of work or
occupational safety, and health standards services in exchange for compensation under
(Batong Buhay Gold Mines, Inc. v. Dela Serna, managerial direction (Mendoza, 2001).
312 SCRA 22 [1991]).
Basic Rights of Workers as Guaranteed by the
Constitution: (Art. XIII, Sec. 3,2nd par.).
A. Under Labor Standards (TReSH)
1. Right to security of Tenure
2. Right to Receive a living wage
3. Right to Share in the fruits of production
4. Right to work under Humane conditions
B. Under Labor Relations (OCEP)
1. Right to Organize themselves
2. Right to Conduct collective bargaining or
negotiation with management
3. Right to Engage in peaceful concerted activities
including strike
4. Right to Participate in policy and decision-
making process.
Constitutional Mandates
1. Art. XIII, Sec. 3
The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities
for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security
tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making
process affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers
and employer, recognizing the right of labor to its just
share in the fruits of production and the right of
enterprise to reasonable returns of investments and to
expansion and growth.
2. Art. II, Sec. 9
The State shall promote a just and dynamic social order
that will ensure the prosperity and independence of the
nation and free the people from poverty through policies
that provide adequate social services, promote full
employment, a rising standard of living and improved
quality of life for all.
3. Art. II, Sec 18
The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote
their welfare.
4. Art III, Sec. 8
The right of the people, including those employed in the
public and private sectors, to form unions, associations,
or societies for purposes not contrary to law, shall not be
abridged.
5. Art. III, Sec 18(2)
No voluntary servitude in any form shall exist except as
a punishment for a crime whereof the party shall have
been duly convicted.
6. Art. XII, Sec. 12
The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods
and adopt measures that held make them competitive.
7. Art. XIII, Sec. 14
The State shall protect working women by providing safe
and healthful working conditions, taking into account
their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable
them to realize their full potential in the service of the
nation.
8. Art. XVI, Sec.8
The State shall, from time to time, review to upgrade the
pensions and other benefits due to retirees of both the
government and the private sectors.
Related Laws
1. Civil Code
Art. 1700. The relation between capital and labor are not
merely contractual. They are so impressed with public
interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1701. Neither capital nor labor shall act oppressively
against the other, or impair the interest or convenience
of the public.
Art. 1702. In case of doubt, all labor legislations and all
labor contracts shall be construed in favor of the safety
and decent living for the laborer.
Art. 1703. No contract which practically amounts to
involuntary servitude, under any guise whatsoever, shall
be valid.
2. Revised Penal Code
Art. 289. Formation, maintenance and prohibition of
combination of capital or labor through violence or
threats. – The penalty of arresto mayor and a fine not
exceeding 300 pesos shall be imposed upon any person
who, for the purpose of organizing, maintaining or
preventing coalitions of capital or labor, strike of laborers
of lock-out of employees, shall employ violence or
threats in such a degree as to compel or force the
laborers or employers in the free and legal exercises of
their industry or work, if the act shall not constitute a
more serious offense in accordance with the provisions
of this Code.
3. Special Laws
 SSS Law
 GSIS Law
 National Health Insurance Act
 Paternity Leave Act
 Retirement Pay Law
 Home Mutual Development Fund Law
 Anti-Sexual Harassment Act
 Anti-Child Labor Act
 13th Month Pay Law
 Migrant Workers and Overseas Filipinos Act of
1995 (R.A. No. 8042)
 Comprehensive Agrarian Reform Law
 Magna Carta for Public Health Workers
Social Justice as the Aim: Social Justice is neither
communism, nor despotism, nor atomism not anarchy,
but the humanization or laws and the equalization of
social and economic forces by the State so that justice in
its rational and objectively secular conception may at
least be approximated. Social justice means the
promotion of the welfare of all people, the adoption by
the government of measure calculated to ensure
economic stability of all the component elements of the
society through the maintenance of proper economic
and social equilibrium in the interrelations of the
members of the community, constitutionally, through the
adoption of measure legally justifiable, or extra-
constitutionally, through the exercise of powers
underlying the existence of all governments, on the time
honored principle of salu populi est suprema lex
(Calalang v. Williams, No. 47800, December 2, 1940).
Police Power as the basis: it is the power of the
Government to enact laws, within constitutional limits, to
promote the order, safety, health, morals and general
welfare of society (People v. Vera, No. 45748, April 5,
1939).
Article 3: Declaration of Basic Policy
The State shall: (APERA)
1. Afford protection to labor
2. Promote full employment
3. Ensure equal work opportunities regardless of
sex, age or creed
4. Regulate the relations between workers and
employers
5. Assure the right of workers to: (JSSC)
 Just and humane conditions of work
 Self-organization
 Security of tenure
 Collective bargaining
Article 4: Construction in Favor of Labor
 Construed in favor of labor if there is a doubt as
to the meaning of the legal and contractual
provision. If the provision is clear and
unambiguous, it must be applied in accordance
with its express terms (Meralco v. NLRC, GR
No. 78763, July 12, 1989).
 However, not all labor disputes should be
resolved in favor of labor. The law also
recognizes that management has rights which
are also entitled to respect and enforcement in
the interest of fair play (St. Luke’s Medical
Center Employees Assoc. v. NLRC, GR No.
162053 March 7, 2007).
Reasons for Affording Greater Protection to
Employees
1. There is greater supply than demand for labor;
and
2. The need for employment by labor comes from
vital, and even desperate necessity (Sanchez v.
Harry Lyons Construction Inc., GR No. L-2779,
October 18, 1850).
Extent of Protection to Labor: to an employee who
is abused either by the employer or by the union
leadership or their respective representatives.
 Management Rights
 Under the doctrine of management prerogative,
every employer has the inherent right to regulate,
according to his own discretion and judgment, all
aspects of employment, including hiring, work
assignments, working methods, the time, place and
manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline,
dismissal and recall of employees (Rural Bank of
Cantilan v. Julve, FR No. 169750, February 27,
2007).
The employer has the right to: (CPSTR)
 Management prerogatives, however are subject to
limitations provided by (1) law, (2) contract or
collective bargaining agreements and (3) general
principles of fair play and justice (Mendoza v. Rural
Bank of Lucban, GR No. 155421, July 7, 2004).
Article 5: Rules and Regulations
 The rules and regulations issued by the
Department of Labor and Employment (DOLE)
shall become effective 15 DAYS AFTER
announcement of their adoption in newspapers
of general circulation. Sec. 3[1] and Sec. 4 of
the Revised Administrative Code of 1987 also
require the filing of three (3) certified copies of
the administrative rules and regulations with the
UP Law Center.
 Administrative rules and regulations must be
published if their purpose is to enforce or
implement existing law pursuant to a valid
delegation (Tañada v. Tuvera, GR No. L63915,
April 14, 1985; Philsa Int’l. Placement v. Sec. of
Labor, GR No. 103144, April 4, 2001).
Delegated Legislative Power: The Labor Code itself
vests the DOLE with rule-making powers in the
enforcement whereof (PASEI v. Drilon, GR No. 81958,
June 30, 1988).
However, a rule or regulation promulgated by an
administrative body in excess of its rule-making authority
is void. An administrative interpretation, which takes
away benefits granted in the law, is ultra vires (CBTC
Employees union v. Clave GR No. L-49582, January 7,
1986).
Article 6: Applicability
General Rule: The Code applies to all workers, whether
agricultural or non-agricultural, including employees in a
government corporation incorporated under the
Corporation Code (See discussion under Art. 244).
Exceptions:
1. Government employees
2. Employees of government corporations
created by special or original charter (Juco v.
NLRC, GR No. 98107, August 18, 1997)
3. Foreign governments (JUSMAG-
Philippines v. NLRC, GR No. 108813, December
15, 1994)
4. International agencies (Lasco v.
UNRFNRE, GR Nos. 109095-109107, February
23, 1995), employees of intergovernmental or
international organizations ( SEAFDEC-AQD v.
NLRC, GR No. 86773, February 14, 1992)
5. Corporate officers/ intra-corporate
disputes which fall under PD 902-A and now fall
under the jurisdiction of the Regular Courts
pursuant to the New Securities Regulation Code
(Nacpil v. IBC, GR No. 144767, March 21, 2002
6. Local water district (Tanjay Water
District v. Gabaton, GR Nos. 63742 and 84300, 17
April 1989) except where NLRC Jurisdiction is
invoked (Zamboanga City Water District v. Buat,
GR No. 104389, May 27, 1994).
Agricultural or Farm Worker – one employed in
an agricultural or farm enterprise and assigned to
perform tasks which are directly related to the
agricultural activities of the employer such as
cultivation and tillage of the soil, dairying, growing
and harvesting of any agricultural and horticultural
commodities, the raising of livestock or poultry and
any activity performed by a farmer as an incident to
or in conjunction with such farming operations.
There may be, in one employer, both agricultural as
well as industrial workers.
Note: The Labor Code applies with or without
employment relationship between the disputants,
depending on the kind of issue involved. The
presence or absence of employer-employee
relationship is itself a labor law question (Azucena,
2007).
CHAPTER 2. EMANCIPATION OF TENANTS (P.D.
27 AS AMENDED BY R.A. 6657,
COMPREHENSIVE AGRARIAN REFORM LAW
A.K.A CARL)
1. Art. II, Sec. 21 such area or be awarded
The State shall promote comprehensive rural will now to each child
development and agrarian reform. cultivate it. of the
landowner if
he is (1) at
2. Art. XIII, Sec. 4
least 15 years
The State shall, by law, undertake an agrarian of age and (2)
reform program founded on the right of farmers actually tilling
and regular farm workers, who are landless, to the land or
own directly or collectively the lands they till or, directly
in the case of other farm workers, to receive a managing the
just share of the fruits thereof. To this end, the farm.
State shall encourage and undertake the just Equivalent to The Land
distribution of all agricultural lands, subject to 2 ½ times bank of the
the average Philippines
such priorities and reasonable retention limits
harvest of 3 (LBP) shall
as the Congress may prescribe, taking into normal crop compensate
account ecological, developmental, or equity years the
considerations, and subject to the payment of immediately landowner in
just compensation. In determining retention preceding such amount
limits, the State shall respect the rights of small the as may be
landowners. The state shall further provide promulgatio agreed upon
incentives for voluntary land-sharing. n of P.D. 27 by the
Valuation landowner
and the DAR
Note: Share tenancy has been abolished by
and LBP or
R.A. 3844, as amended by R.A. 6389, for being as may be
contrary to public policy, placing in its stead a finally
leasehold system. It marked the movement determined
towards the eventual ownership of land by its by the court
tillers. Under Art. 8, the land covered by as just
operation land transfer must be: compensation
for the land.
1. Private agricultural land
2. Tenanted Transferab No title to Land
ility of Title the land acquired by
3. Primarily devoted to rice and/or corn;
owned by beneficiaries
4. more than seven hectares in area. tenant under CARL
P.D. 27 CARL (R.A. 6657) farmers may not be
P.D. 27 CARL under P.D. sold,
Private All public and 27 shall be transferred or
agricultural private actually conveyed for
lands agricultural issued to a a period of 10
primarily lands tenant years except
devoted to including farmer through
rice and corn other lands of unless and hereditary
under a the public until the succession or
Lands system of domain tenant when sold,
Covered sharecrop or suitable for farmer has transferred or
lease- agriculture become a conveyed to
tenancy, (see full-fledged the
whether discussion member of a Government,
classified as under CARL duly or to the LBP,
landed for recognized or to other
estate or not exclusions). farmer’s qualified
cooperative. beneficiaries
Retention Landowner In no case Title to the for a period of
Limits may retain shall the land is not 10 years.
an area not retention by transferable
more than 7 the except by
hectares if landowner hereditary
such exceed 5 succession
landowner is hectares. 3 or to the
cultivating hectares may Government
 in
accordance
with P.D. 27
Emancipation Patent – the title issued to the
tenant upon compliance with all the requirements
of the government. It represents the full
emancipation of the tenant from the bondage of
the soil.
Purpose of Prohibition Against Alienation
1. Preserve the landholding in the hands of the
owner-tiller and his heirs
2. Minimize land speculation
3. Prevent a return to the regime of land
ownership by a few
Lands Not Covered
1. Lands obtained through homestead patent
2. Residential subdivisions
3. Livestock, poultry and swine raising lands
1.
2. The complainant was convinced to part with his
BOOK ONE: PRE-EMPLOYMENT
Article 12: Policy of the State
1.To promote and maintain a state of full
employment through improved manpower
training, allocation and utilization
2.To protect every citizen by securing for him the
best possible terms and condition of
employment
3.To facilitate a free choice of available
employment by person seeking work in
conformity with the national interest
4.To facilitate and regulate the movement of
workers in conformity with the national interest
5.To regulate the employment of aliens including
the establishment of a registration and/or permit
system
6.To strengthen the network of public
employment offices and rationalize the
participation of the private sector in the
recruitment and placement of workers, locally
and overseas to serve national development
objectives
7.To insure careful selection of Filipino workers
for overseas employment in order to protect the
good name of the Philippines abroad.
TITLE ONE: RECRUITMENT AND PLACEMENT OF
WORKERS
Chapter 1: General Provisions
Article 13: Definitions
Worker – any member of the labor force, whether
employed or unemployed
Recruitment and Placement – any act of (CETCHUP)
canvassing, enlisting, transporting, contracting, hiring,
utilizing or procuring workers and includes (CRAP)
contract services, referrals, advertising or promising for
employment locally or abroad, whether for profit or not,
provided, that any person or entity which in any manner,
offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and
placement.
Note: The number of persons dealt with is not an
essential ingredient of the act of recruitment and
placement of workers. The proviso merely creates a
presumption (People v. Panis, GR. No. L-58674, July
11, 1986).
Elements of engaging in recruitment and placement
activities:
The complainant had a distinct
impression that the accused had the power to send
complainant abroad for work
money in order to be so employed (People v. Goce,
GR No. 113161, August 29, 1995).
Private Recruitment Entity – any person or entity
engaged in the recruitment and placement of
workers for a fee which is charged, directly or
indirectly, from the workers or employers or both.
License – a document issued by the DOLE
authorizing a person or entity to operate a private
employment agency.
Private Recruitment Entity – any person or
association engaged in the recruitment and
placement of workers, locally or overseas, without
charging, directly or indirectly, any fee from the
workers or employers.
Authority- document issued b DOLE authorizing a
person or association to engage in recruitment and
placement activities as a private recruitment entity.
Seaman – any person employed in a vessel
engaged in maritime navigation.
Overseas Employment – employment of a worker
outside the Philippines.
Migrant Worker – refers to a person who is to be
engaged, is engaged, or has been engaged in a
remunerated activity in a state of which he or she is
not a legal resident.
Note: A person to be engaged in a remunerated
activity refers to an applicant worker who has been
promised or assured of employment overseas and
acting on such promise or assurance sustains
damage and/or injury.
Emigrant – any person, worker or otherwise, who
emigrates to a foreign country by virtue of an
immigrant visa or resident permit or its equivalent in
the country of destination.
Article 14: Employment Promotion
Allocation of manpower resources is assigned to:
1.Bureau of Local Employment (BLE)
2.Philippine Overseas Employment Administration
(POEA) for overseas employment.
 R.A. 8759 (approved on 2000) requires the
establishment of a Public Employment Service
Office (PESO) in capital towns, cities and other
strategic areas.
Article 16: Private Recruitment
General Rule: No person or entity shall engage in
the recruitment and placement of workers, locally
and overseas.
Exceptions:
1. Public employment offices
2. Private recruitment entities
3. Private employment agencies
4. Shipping or manning agents or representatives
5. POEA
6. Construction contractors if authorized by the
DOLE and the Construction Industry Authority
7. Members of the diplomatic corps (but hiring must
also go through POEA)
8. Other persons or entities as may be authorized
by the DOLE Secretary
9. Name hirees.
2. Protection of their rights to fair an equitable
employment practices
3. Deployment of Filipino workers through
government-to-government hiring.
Regulatory Functions (Republic Act. No. 9422)
The POEA shall:
1. regulate private sector participation in the
recruitment and overseas placement of workers
through its licensing and registration system
2. formulate and implement in coordination with
appropriate entities concerned, when
necessary, a system for promoting and
monitoring the overseas employment of Filipino
workers taking into consideration their welfare
and the domestic manpower requirements.
3. inform migrant workers not only of their rights
as workers but also of their rights as human
beings
4. instruct and guide the workers how to assert
their rights and provide the available
mechanism to redress violation of their rights
5. in the recruitment and placement of workers
to service the requirements for trained and
competent Filipino workers of foreign
governments and their instrumentalities, and
such other employers as public interests may
require, deploy only to countries: (BOG)
a. where the Philippines has concluded
Bilateral labor agreements of arrangements
b. Observing and/or complying with the
international laws and standards for migrant
workers
c. Guaranteeing to protect the rights of
Filipino migrant workers.
Adjudicatory Functions (AD)
1. Administrative cases involving violations of
licensing rules and regulations and registration of
recruitment and employment agencies or entities
2. Disciplinary action cases and other special
cases which are administrative in character
involving employers, principals, contracting
partners and Filipino migrant workers.

Disciplinary Action Cases (Rule VII of Book VII of

Article 17: POEA the POEA Rules)
 File with the Adjudication Office or Regional
The POEA has taken over the functions of the Office of the POEA, as the case may be.
Overseas Employment Development Board - The POEA may motu propio undertake
(OEDB) and National Seamen Board (NSB). disciplinary action against a worker.
- It shall establish a system of watching and
Principal Functions (FPD) blacklisting.
1. Formulation, implementation and
monitoring of overseas employment of Grounds for disciplinary action (Under R.A. 8042)
Filipino workers (PUG is VVEC’s GIFT to DAD)
1. Prostitution
 2. Unjust refusal to depart for the worksite
3. Gunrunning or possession of deadly weapons
4. Vandalism or destroying company property
5. Violation of the laws and sacred practices of the
host country and unjustified breach of
employment contract
6. Embezzlement of funds of the company or
fellow worker entrusted for delivery to relatives in
the Philippines
7. Creating trouble at the worksite or in the vessel
8. Gambling
9. Initiating or joining a strike or work stoppage
where the laws of the host country prohibit strikes
or similar actions
10. Commission of Felony punishable by
Philippines Laws or by the host country
11. Theft or robbery
12. Drunkenness
13. Drug Addiction or possession or trafficking of
prohibited drugs
14. Desertion or abandonment
Jurisdiction Transferred to the Labor Arbiters of
the National Labor Relations Commission (NLRC)
(Sec. 10, R.A. 8042)
 Claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and
other forms of damages.
 Venue: Money claims or claims for damages
should be filed before the Regional Arbitration
branch of the NLRC where the complainant resides
of where the prinicipal office of the
respondent/employer is situated at the option of the
complainant (2005 NLRC Rules of Procedure).
Compromise Agreement
 Sec 10. R.A. 8042 allows resolution by compromise
of cases filed with the NLRC.
 Any compromise/amicable settlement, or voluntary
agreement on money claims inclusive of damages
shall be paid within 4 months from the approval of
the settlement by the appropriate authority.
Rule on Premature Termination of Contract
1. If terminated on grounds other than those that
are lawful and valid before the agreed
termination date, the employer will pay the
workers their salaries corresponding to the
unexpired portion of the employment contract
(Vinta Maritime Co. v. NLRC, GR No. 113911,
January 23, 1998)
2. If the date of employment termination occurred
on or after July 15, 1995, the law to apply is
R.A. 8042. Under Sec. 10, a worker dismissed
from overseas employment without just, valid or
authorized cause is entitled to full
reimbursement of his placement fee with
interest at 12% per annum, and
a. If the contract of employment is
BELOW one year, the salaries for the
entire unexpired portions of the
contract shall be paid; and
b. If the contract of employment is ONE
YEAR OR MORE, the salaries for the
entire unexpired portion of the contract
OR three (3) months pay for every year
of the unexpired portion, WHICHEVER
IS LESSER, shall be paid (Marsaman
Manning Agency, Inc. v. NLRC, GR No.
127195, August 25, 1999).
Note: The clause “or for three months for every year of
the unexpired term, whichever is less” in the 5 th par. Of
Sec. 10 of RA No. 8042 is declared unconstitutional by
the SC for violating Sec. 1, Art. III of the Constitution,
Sec. 18, Art. II and Sec. 3, Art. XIII, which accord all
members of the labor sector, without distinction as to
place of deployment, full protection of their rights and
welfare. (Serrano v. Galiant Maritime Services Inc. and
Marlow Navigation Co. Inc. GR No. 167614, March 24,
2009)
Outside of POEA Jurisdiction
1. Foreign Judgment – POEA has no jurisdiction
to hear and decide a claim for enforcement of a
foreign judgment. Such claim must be brought
before regular courts (Pacific Asia Overseas
Shipping Corp. v. NLRC, GR No. 76595, may 6,
1988).
2. Torts- fall under the provision of the Civil Code.
Invalid Agreements
1. Signing satisfaction receipt is not a waiver. Any
agreement to receive less compensation than
what the worker is entitled to recover is invalid
(MR Yard Crew Union v. PNR, GR No. L-33621,
July 26, 1976).
2. An agreement that diminishes the employee’s
pay and benefits as contained in a POEA-
approved contract is void, unless such
subsequent agreement is approved by POEA
(Chaves v. Bonto-Perez, GR No. 109808,
march 1, 1995).
Minimum Employment Conditions of Overseas
Employment (GFF-JW-RAF)
1. Guaranteed wages for regular working hours
and overtime pay.
2. Free transportation from point of hire to site of
employment and return
 3. Free emergency medical and dental treatment
facilities
4. Just causes for termination of the services of
the workers
5. Workmen’s compensation benefits and war
hazard protection
6. Repatriation of worker’s remains and properties
in case of death
7. Assistance on remittance of worker’s salaries
and allowances
8. Free and adequate board and lodging facilities
or compensatory food allowance.
Agencies Given the Duty to promote the welfare
and rights of migrant workers
1. Department of Foreign Affairs (DFA)
2. DOLE
3. POEA
4. Overseas Workers Welfare Administration
(OWWA) – provides social and welfare services
including insurance coverage, legal assistance,
placement assistance and remittance services to
Filipino overseas workers; Under RA. 8042, it
shall provide the Filipino migrant worker and his
family assistance in the enforcement of
contractual obligations by agencies, entities
and/or their principals;
5. Re-Placement and Monitoring Center (RPM)-
Develops livelihood programs for the returning
workers to reintegrate the returning migrant
workers to the Philippine society
6. NLRC – tasked with the settlement or
adjudication of labor disputes.
processing purposes (Part III, Rule III of POEA Rules
Governing Overseas Employment as amended in
2002).
Rationale of the Prohibition
1. To assure the best possible terms and conditions
of work to the employee
2. To assure the foreign employer the he hires only
qualified Filipino workers.
Article 19: CFO
The Commission of Filipino Overseas (CFO) replaced
the Office of Emigrant affairs. It assists in the
formulation of policies affecting Filipinos overseas,
and formulates an integrated program that promotes
the welfare of Filipino overseas.
Article 22: Mandatory Remittance of Foreign
Exchange Earnings
Requirement: All overseas Filipino workers are
required to remit a portion of their foreign exchange
earnings ranging from 50% to 80% depending on the
worker’s kind of job, to their families, dependents
and/or beneficiaries (Rule VIII, Book III, POEA Rules).

Classification of OFWs NATURE OF JOB FOREIGN

1. Sea-Based or Seamen – those employed in a EXCHANGE
vessel engaged in maritime navigation. REMITTANCE
2. Land Based - contract workers other than a (% of Basic Salary
seaman including workers engaged in offshore Seamen or Mariners
activities whose occupation requires that majority 80%
of his working or gainful hours are spent on land. Workers for Filipino
Contractors and
Article 18: Ban on Direct Hiring 70%
Construction Companies

General Rule: Direct hiring of Filipino workers for Professionals whose

overseas employment is not allowed. employment contract
provide for lodging 70%
Exceptions Direct hiring by: facilities
1. Members of the diplomatic corps
2. International organizations Professionals without
3. Other employers as may allowed by DOLE board and lodging 50%
4. Name hirees
Domestic and other
Name Hirees – individual workers who are able to service workers 50%
secure contracts for overseas employment on their
own efforts and representations without the
assistance or participation of any agency. Their hiring, Exceptions to Mandatory Remittance
nonetheless, shall pass through the POEA for
 1. Where the worker’s immediate family
members, dependents, or beneficiaries are
residing with him abroad
2. Filipino servicement working in U.S. military
installations
3. Immigrants and Filipino professionals and
employees working with United Nations
agencies or specialized bodies (Resolution No.
1-83, Inter-agency Committee or
Implementation of E.O. 857)
Effects of Failure to Remit
1. Workers who fail to comply with the mandatory
remittance requirement shall be suspended or
excluded from the list of eligible workers for
overseas employment. Subsequent violations
shall warrant his repatriation
2. Employers who fail to comply shall be excluded
from the overseas employment program.
Private employment agencies or entities shall
face cancellation or revocation of their licenses
or authority to recruit, without prejudice to other
liabilities under existing laws and regulations
(Sec. 9, E.O. 857, December 13, 1982
Chapter 2: Regulation of Recruitment and
Placement Activities
Article 25: Private Sector Participation in the
Recruitment and Placement of Workers
Private Sectors that can participate
1. Private employment agencies
2. Private recruitment entities
3. Shipping or manning agencies
4. Such other persons as may be authorized by
the Secretary of Labor and Employment
5. Construction contractors with a duly issued
authority to operate private recruitment entities
(Sec. 1, Rule VII, Book I, Implementing Rules of
LC)
Qualifications for Participation
1. Citizenship requirement (Art. 27, LC)
a. Filipino citizens; or
b. Corporations, partnerships or entities at
least 75% of the authorized and voting
capital stock of which is owned and
controlled by Filipino citizens.
2. Capitalization (Art. 28, I_C)
a. For single proprietorship or partnership-
minimum capitalization of two (2) million
pesos.
b. For corporations – a minimum paid up
capital of two (2) million pesos; Provided
that those with existing licenses shall,
within 4 years from effectivity hereof,
increase their capitalization of paid-up
capital, as the case may be, to two(2)
million pesos at the rate of two hundred fifty
thousand pesos (P 250,000) every year.
3. Those not otherwise disqualified by law or other
government regulations to engage in the
recruitment and placement of workers for
overseas employment.
Disqualified from Recruitment and Placement of
Workers for Overseas employment whether for
profit or not
1. Travel agencies and sales agencies of airline
companies (Art. 26, LC)
2. Officers or members of the board of any
corporation or members in a partnership
engaged in the business of a travel agency
3. Corporations and partnerships, when any of its
officers, members of the board or partners, is
also an officer, member of the board or partner
of a corporation or partnership engaged in the
business of a travel agency (interlocking
officers)
4. Persons, partnerships or corporations which
have derogatory records, such as but not
limited to:
a. Those certified to have derogatory
record or information by the National
Bureau of Investigation (NBI) or by the
Anti-illegal recruitment Branch of the
POEA
b. Those against whom probable cause of
prima facie finding of guilt for illegal
recruitment or other related cases
and/or crimes involving moral turpitude;
and
c. Those agencies whose licenses have
been previously cancelled or revoked
by POEA for violation of R.A. 8042,
P.D. 442 as amended and their
implementing rules and regulations as
well as the Labor Code’s Implementing
Rules and Regulations.
4. Officials or employees of the DOLE or other
government agencies directly involved in
overseas employment program and their
relatives within the 4th degree of consanguinity
of affinity
5. Those whose license have been previously
cancelled or revoked (Sec. 2, Rule I, 2002
Rules and Regulations on the Recruitment and
Employment of Land-based Workers).
 Article 29: Non-Transferability of License or
Authority
1. It may be used only by the one in whose favor it
was issued, hence it cannot be assigned,
conveyed or transferred to any other person or
entity
2. It must be used only in the place stated in the
license.
3. The recruitment and placement activities must
be undertaken at their authorized official
addresses.
4. Provincial recruitment and/or job fairs may be
allowed only when authorized by POEA in
writing
Note: Change of ownership or relationship of single
proprietorship licensed to engage in overseas
employment shall cause the automatic revocation
of the license.
Article 31: Bonds
All applicants for license or authority shall pots such
cash and surety bonds as determined by the
Secretary of Labor, including escrow deposits.
Purposes:
1. To guarantee compliance with prescribed
recruitment procedures, rules and regulations,
and terms and conditions of employment; and
2. To ensure prompt and effective recourse
against such companies when held liable for
applicants or workers claim (Finman General
Assurance v. Innocencio, GR No. 90273-75,
November 15, 1989).
Exemption from Garnishment
 Cash bond filed by applicants for
license or authority is not subject to garnishment
by a judgments creditor of the agency.
 Should the bond/deposit in escrow
or any part thereof be garnished, the same
should be replenished by the agency within 15
days from notice from the POEA. Failure to
replenish the same within the said period shall
cause the suspension of the license (Sec. 22,
Rule II, Book II, Rules and Regulations on the
Recruitment and Employment of Land-based
Workers).
Note: POEA has the power to enforce liability under
cash or surety bonds.
Article 32: Fees to be Paid by Workers
 The applicant can be charged with fees
only after he has obtained employment or has
actually commenced employment.
 Fees paid shall always be covered with the
appropriate receipt clearly showing the amount
paid.
POEA has the power to:
1. Suspend or cancel license; and
2. Order the refund or reimbursement of such
illegally collected fees (Eastern Assurance and
Surety Corp. v. Sec. of Labor, GR Nos. 79436-
50, January 17, 1990).
Prohibition on Charging Fees
1.Placement fees cannot be collected from a
hired worker until he has signed the
employment contract and shall be covered by
receipts clearly showing the amount paid
(Sec. 2[a], Rule V, Book II, Rules and
Regulations Governing Overseas
Employment).
2. Manning agencies shall not charge any fee
from seafarer-applicants for its recruitment
and placement services.
3. No other fees or charges including
processing fess shall be imposed against any
worker.
Article 34 and Section 6, RA 8042: Prohibited
Practices (IFFPI- HOFAT-W)
It shall be unlawful for any individual, entity Licensee, or
holder of authority:
1. To charge greater amount than that specified in
the schedule of allowable fees (lllegal
exaction)
2. To furnish any false information in relation to
recruitment or employment (False information)
3. To give any false notice, testimony etc or
commit any act of misrepresentation to secure
a license or authority (False statements)
4. To induce or attempt to induce a worker to quilt
his job in lieu of another offer unless it is
designed to liberate the worker from oppressive
terms of employment (Pirating)
5. To influence or attempt to influence any person
or entity not to employ any worker who has not
applied for employment through his agency
(Influencing not to employ)
6. To engage in the recruitment or placement of
jobs harmful to public health, morality or to the
dignity of the Philippines (Harmful jobs)
7. To obstruct or attempt to obstruct inspection by
the Labor Secretary or his authorized
representatives (Obstruct inspection)
8. To fail to file reports on the status of
employment, placement etc and such other
matters as may be required by the Secretary of
 Labor (Failure to comply with rules and
regulations)
9. To substitute or alter employment contracts
without the approval of the Secretary of Labor
(Alteration of Contracts)
10. To become an officer or member of the Board
of any corporation engaged in the management
of a travel agency (Travel agency officers
recruiting).
11. To withhold travel documents from
applicant workers before departure for
unauthorized monetary consideration
(Withholding travel documents).
Article 35: Suspension and/or Cancellation of
License or Authority
Non License or Non-holder of Authority- any
person, corporation or entity which has not been
issued a valid license or authority to engage in
recruitment and placement by the Secretary of
Labor, or whose license or authority has been
suspended, revoked, or cancelled by the POEA and
the Secretary.
Grounds for Revocation of License (IVEE)
1. Incurring an accumulated three counts of
suspension by an agency based in final and
executory orders within the validity period of its
license
2. Violation/s of the conditions of license
3. Engaging in act/s of misrepresentation for
the purpose of securing a license or renewal
thereof
4. Engaging in the recruitment or placement of
workers to jobs harmful to the public health or
morality or to the dignity of the Republic of the
Philippines (Sec. 3, Rule I, Book VI, Rules and
Regulations Governing Overseas Employment).
Grounds for Suspension/ Cancellation of
License (AC-DDP)
1. The acts prohibited under Art. 34
2. Charging a fee before the worker is
employed or in excess of the authorized
amount
3. Doing recruitment in places outside its
authorized area
4. Deploying workers without processing
through the POEA
5. Publishing job announcement without the
POEA’s prior approval (Sec 4. Rule II, Book IV,
POEA Rules).
Jurisdiction
The DOLE Secretary (Art. 35) and the POEA
Administrator (Sec. 1, Rule II, Book VI, New Rules
on Overseas Employment) have CONCURRENT
JURISDICTION to suspend or cancel a license
(Trans Action Overseas Corp. v. Sec. of Labor, GR
No. 109583, September 5, 1997).
Liability of recruitment agency
 The recruitment agency is SOLIDARILY
LIABLE with the foreign principal for unpaid salaries
of a worker it recruited. Before recruiting, the
agency is required to submit a document containing
its power to sue and be sued jointly and solidarily
with the principal or foreign-based employer for any
of the violations of the recruitment agreement, and
the contracts of employment (Sec. 10, Rule V, Book
I, Implementing Regulations of LC)
Note: The recruitment agency may still be sued even if
agency agreement between recruitment agency and
principal is already severed if no notice of the
termination was given to the employee based on Art.
1921 of the New Civil Code (Catan v. NLRC, GR No.
77297, April 15m 1988).
Contract by Principal
 Even if it was the principal of the manning
agency who entered into contract with the
employee, the manning agent in the Philippines
is jointly and solidarily liable with the principal
(Seagull Maritime Corp. v. Balatongan, GR
Nos. 83635-53, February 28, 1989).
Suability of Foreign Corporations
 A foreign corporation that, through unlicensed
agents recruits workers in the country may be
sued in and found liable by Philippine courts
(Facilities Management Corp. v. De La Osa, GR
No. L-38649, March 26, 1979).
Chapter 3: Miscellaneous Provisions
Article 38: Illegal Recruitment (as amended by R.A.
8042)
Illegal Recruitment – any act of (CETCHUP)
canvassing, enlisting, transporting, contracting, hiring,
utilizing or procuring workers and includes (CRAP)
contract services, referrals or advertising, promising for
employment abroad, whether for profit or non-holder of
authority; provided that any such non-licensee or non-
holder of authority who in any manner, offers or
promises for a free employment abroad to two or more
persons shall be deemed so engaged.
 It shall likewise include the commission of the
following prohibited acts whether committed by
a non-licensee or non-holder of authority or a
license or holder of authority (Sec. 6, R.A.
8042):
1. Those prohibited practices enumerated under
Art. 34
2. Failure to actually deploy without valid reason
as determined by DOLE
3. Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment
does not actually take place without the
worker’s fault
4. Recruitment and placement activities of agents
or representatives appointed by a licensee,
whose appointments were not previously
authorized by the POEA shall likewise
constitute illegal recruitment.
Elements of Illegal Recruitment
1. The offender is a licensee/non-licensee or
holder/non-holder of authority engaged in the
recruitment and placement of workers, and
2. The offender undertakes either any recruitment
activities defined under Article 13 (b), or any
prohibited practices enumerated under Art. 34
(People v. Sadiosa, GR No. 107084, May 15,
1998, Sec. 10, R.A. 8042)
Qualifying Circumstances that would make
illegal recruitment as an offense involving
economic sabotage:
1. When illegal recruitment is committed by a
SYNDICATE, i.e., if its carried out by three (3)
or more persons conspiring and/ or
confederating with one another, or
2. When illegal recruitment is committed in a
LARGE SCALE, i.e., if it is committed against
three (3) or more persons individually or as a
group.
Consequences of Conviction (AFC)
1. Automatic revocation of the license or authority
(Art. 39 [e], LC);
2. Forfeiture of the cash and surety bond (Art. 39
[e], LC); and
3. Conviction for the crime of estafa, if found guilty
therefore (People v. Calonzo, GR Nos. 115150-
55, September 27, 1996.
Act Constituting Estafa: The accused
represented themselves to complainants to have
the capacity to send workers abroad, although they
did not have any authority or license, it is by this
representation that they induced complainant to pay
a placement fee. Such a constitute estafa under Art.
315, par.2 of the Revised Penal Code (People v.
Hernandez, GR Nos. 141221-36, March 7, 2002).
Venue of Criminal Action Arising from Illegal
Recruitment
The complainant may, at his option, file at the RTC
of the province or city:
1. Where the offense was committed; OR
2. Where the offended party resides at the time of
the commission of the offense.
Summary of Rules on Prescriptive period and
penalty (Secs. 7 and 12, R.A. 8042)
SIMPLE ECONOMIC
SABOTAGE
Prescriptive 5 years 20 years
Period
Imprisonment Prision mayor Life
imprisonment
Fine P 200T- 500T P 500T-1M
Note: MAXIMUM PENALTY shall be imposed if the
person illegally recruited is less than 18 years of
age or committed by a non-licensee or non-holder
of authority.
Absence of Receipts Evidencing Payment, Not
Fatal to Prosecution’s Case For Illegal
Recruitment
 As ling as the witnesses can positively show
through their respective testimonies that the
accused is the one involved in prohibited
recruitment, she may be convicted of the
offense despite the absence of receipts (People
v. Sagaydo, GR Nos. 124671-75, September
29, 2000).
Liability of Employee of Company Engaged in
illegal Recruitment
 An employee of a company or corporation
engaged in illegal recruitment may be held as
PRINCIPAL, together with his employer, if it is
shown that he actively and consciously
participated in illegal recruitment (People v.
Cabais, GR No. 129070, march 16, 2001).
Issuance of Search Warrant or Warrant of Arrest
 Art. 38 is UNCONSTITUTIONAL in as much as
it gives the Secretary of Labor the power to
issue search or arrest warrants (the Secretary
not being a judge, the authorities must go
through the judicial process).
 The EXCEPTION is in cases of deportation of
illegal and undesirable aliens whom the
President or the Commissioner of Immigration
may order arrested, following a final order of
deportation. (Salazar v. Achacoso, GR No.
81510, March 14, 1990).
Note: The Secretary of Labor may order closure of
illegal recruitment establishments because it is only
administrative and regulatory in nature.
See RA 8042 under social legislation for further
discussion.
TITLE TWO: EMPLOYMENT OF NON-RESIDENT
ALIENS
Article 40: Employment Permit of Non-Resident
Aliens
Alien Employment Permit (AEP) – is required for
entry into the country for employment purposes and
is issued after determination of the non-availability
of a person in the Philippines who is competent,
able and willing at the time of application to perform
the services for which the alien is desired.
Employment Permit Required
1. All foreign nationals seeking admission to the
Philippines for the purpose of employment;
2. All non-resident foreign nationals already
working in the Philippines;
3. Non-resident foreign nationals admitted to the
Philippines on non-working visas and who wish
to seek employment; and
4. Missionaries or religious workers who intend to
engage in gainful employment.
Note: Employment permit should be secured
regardless of the source of compensation and
duration of the employment, whether the
employment is part-time or temporary (Secs. 2 and
3, Revised Guidelines for Issuance of Alien
Employment Permit).
An AEP is issued based on the following:
1. Compliance by the applicant employer or the
foreign national with substantive and
documentary requirements;
2. Determination of the DOLE Secretary that there
is no available Filipino national who is
competent, able and willing to do the job for the
employer; and
3. Assessment of the DOLE Secretary that the
employment of the foreign national will redound
to national benefit.
Note: D.O. No. 12 and the accompanying DOLE
Primer sate that the Understudy Training
Program is no longer a requirement in the
issuance of AEP and the employer has now the
option to implement transfer of technology.
Requisite for Employment of Resident Aliens:
 Immigrants and resident aliens are not
required to secure a working permit. They
are required to secure their Alien
Employment Registration Certificate
(AERC) (Almodiel v. NLRC, GR No.
100641, June 14, 1993).
Exemption from Permit
The following categories of aliens are exempt from
securing employment permit in order to work in the
Philippines:
1. All members of the diplomatic service and
foreign government officials accredited by and
with reciprocity arrangement with the Philippine
government;
2. Officers and staff of international organizations
of which the Philippines is a member, and their
legitimate spouses desiring to work in the
Philippines;
3. Foreign nationals elected as members of the
other position, but have only voting rights in the
corporation
4. All foreign nationals granted exemption by law
5. Owners and representatives of foreign
nationals whose companies are accredited for a
limited period and solely for the purpose of
interviewing Filipino applicants for employment
abroad;
6. Foreign nationals who come to the Philippines
to teach, present and/ or conduct research
studies in universities and colleges as visiting ,
exchange or adjunct professors under formal
agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign government;
provided that the exemption is on a reciprocal
basis; and
7. Resident foreign nationals (Dept. Order No.
75-06, May 31, 2006)
Grounds for suspension of Employment Permit
1. The continued stay of the foreign national may
result in damage to the interest of the industry
or the country, and
2. The employment of the foreign national is
suspended by the employer or by the order of
the Court (Ibid.).
Grounds for Revocation of Employment Permit
1. Non-compliance with any of the requirements
or conditions for which the employment permit
was issued;
2. Misrepresentation of facts in the application
3. Submission of falsified or tampered documents
4. Meritorious objection or information against the
employment of foreign national as determined
by the Regional Director
 5. Foreign national has a derogatory record; and
6. Employer has terminated the employment of
the foreign national (Ibid.).
Validity of Employment Permit
 ONE (1) YEAR, unless the employment
contract, consultancy services or other modes
of engagement provides otherwise, which shall
in no case exceed 5 YEARS (Ibid.).
 FINE for working without or with an
expired AEP: P10,000 every year or a fraction
thereof (Ibid.)
Rule on Nationalized Business
 General Rule: Foreigners may NOT be
employed in certain nationalized business.
 Section 2-A of the Anti-Dummy Law
prohibits the employment of aliens in
entities engaged in business whose
exercise or enjoyment is reserved only to
Filipinos or to corporations or associations
whose capital should be at least 60%
Filipino-owned.
Exceptions:
1. Where the Secretary of Justice specifically
authorizes the employment of technical
personnel;
2. Aliens who are members of the board of
directors of corporations in proportion to their
allowable participation in the capital of such
entities (DOJ Opinion No. 143, s. 1976); and
3. Enterprise registered under the Omnibus
Investment Code in case of technical, supervisory
or advisory positions, but for a limited period.
Article 41: Prohibition Against Transfer of
Employment
1. Aliens shall not transfer to another job or
change his employer without prior approcal of
the Secretary of Labor.
2. Non-resident alien shall not take up
employment in violation of the provisions of the
Code.
Note: Violations of the abovementioned acts will
subject the alien to the punishment provided in Arts.
289 and 290 and to deportation after service of
sentence.
BOOK TWO: HUMAN RESOURCES
DEVELOPMENT
TITLE ONE: NATIONAL MANPPOWER
DEVELOPMENT PROGRAM
Chapter 1: National Policies and Administrative
Machinery for their Implementation
Article 43-45: (TESDA)
The National Manpower and Youth Council (NMYC)
has been replaced by Technical Education and
Skills Development Authority (TESDA) created
under R.A. No. 7796 or the TESDA Act of 1994.
Statement of Goals and Objectives
1. To attain international competitiveness
2. To meet demands for quality middle-level
manpower
3. To disseminate scientific and technical
knowledge base
4. To recognize and encourage the
complementary roles of public and private
institutions; and
5. To inculcate desirable values.
Middle-Level Manpower refers to those:
1. Who have acquired practical skills and
knowledge through formal or non-formal
education and training equivalent to at least a
secondary education but preferably a post-
secondary education with a corresponding
degree or diploma; or
2. Skilled workers who have become highly
competent in their trade or craft as attested by
industry.
TITLE TWO: TRAINING AND EMPLOYMENT OF
SPECIAL WORKERS
Chapter 1: Types of Special Workers
1. Apprentice
2. Learner
3. Handicapped
Article 57: Statement of Objectives for the
Training and Employment of Special Workers
1. To help meet the demand of the economy for
trained manpower
2. To establish a national apprenticeship program
3. To establish apprenticeship standards for the
protection of apprentices.
Article 58: Definition of Terms
Apprenticeship – practical training on the job
supplemented by related theoretical instruction, for a
highly skilled or technical occupation for a period of not
less than three (3) months but not more than six (6)
months.
Apprentice - a worker who is covered by a written
apprenticeship agreement with an individual employer
or any of the entities recognized under this chapter, with
an apprenticeship program duly approved by the DOLE
Apprenticeable Occupation – any trade, form of
employment or occupation, which requires more than 3
months of practical training on the job supplemented by
related theoretical instruction.
Apprenticeship Agreement – an employment contract
wherein the employer binds himself to train the
apprentice and the apprentice in turn accepts the terms
of training.
On-the-job-training – practical work experience
through actual participation in productive activities given
to or acquired by an apprentice.
Highly Technical Industries – a trade, business,
enterprise, industry or other activity, which is engaged
in the application of advanced technology.
Article 59: Qualifications of Apprentices
1. At least 15 years of age (as amended by R.A.
7610), provided that if below 18 years, he shall
not be eligible for hazardous occupation;
2. Physically fit for the occupation in which he
desired to be trained.
3. Possess vocational aptitude and capacity for
the particular occupation as established
through appropriate tests; and
4. Possess the ability to comprehend and follow
oral and written instructions.
Note: Trade and industry associations may
recommend to the Secretary of Labor appropriate
educational qualifications for apprentices in certain
occupations, which, if approved, shall be the
educational requirements for apprenticeship in such
occupations, unless waived by an employer in favor
of an applicant who has demonstrated exceptional
ability. A certification explaining briefly the ground
for such waiver, and signed by the person in charge
of the program, shall be attached to the
apprenticeship agreement of the applicant
concerned. (Sec. 11, Rule VI, Book II, Rules
Implementing the Labor Code).
Article 60: Employment of Apprentices
Qualifications to be met by employer:
1. Only employers in highly technical industries
may employ apprentices; and
2. Only in apprenticeable occupations as
determined by the Secretary of Labor.
Requisites for a Valid Apprenticeship
1. Qualifications of apprentice are met
2. Apprentice earns not less than 75% of the
prescribed minimum salary;
3. Apprenticeship agreement duly executed and
signed;
4. Apprenticeship program must be approved by
the Secretary of Labor, otherwise the
apprentice shall be deemed a regular employee
(Nitto Enterprise v. NLRC, GR No. 114337,
September 29, 1995); and
5. Period of apprenticeship shall not exceed six
(6) months (Sec. 19, Rule VI, Book II, Rules
Implementing the Labor Code).
Note: At the termination of the apprenticeship, the
employer is not required to continue the
employment.
Article 61: Contents of Apprenticeship
Agreement
Agreement shall include:
1. Full name and address of the contracting
parties;
2. Date of birth of the apprentice;
3. Name of trade, occupation or job in which the
apprentice shall be trained and the dates on
which such training will begin and will
proximately end;
4. Approximate number of hours of on-the-job-
training with compulsory theoretical instructions
which the apprentice shall undergo during his
training;
5. Schedule of the work processes of the
trade/occupation in which the apprentice shall
be trained and the approximate time to be
spent on the job in each process;
6. Graduated scale of wages to be paid to the
apprentice;
7. Probationary period of the apprentice during
which either party may summarily terminate
their agreement; and
8. A clause that if the employer is unable to fulfill
his training obligation, he may transfer the
agreement, with the consent of the apprentice,
to any other employer who is willing to assume
such obligation (Sec. 18,. Rule VI, Book II,
Rules Implementing the Labor Code).
Article 62: Signing of Apprenticeship
Agreement
Who Signs:
1. Apprentice, if of age, otherwise, by his parent or
guardian, or in the latter’s absence, by an
authorized representative of the DOLE; and
2. Employer of his duly authorized representative.
 Article 63: Venue of Apprenticeship Program
1. Within the sponsoring firm, establishment or
entity; OR
2. Within a DOLE training center or other public
training institution; OR
3. Initial training in trade fundamentals in a training
center or other institutions with subsequent actual
work participation within the sponsoring firm or
entity during the final stage of training.
Article 64: Sponsoring of Apprenticeship
Programs
Apprenticeship Programs can be undertaken or
sponsored by:
1. The plant shop or premises of the employer or
firm concerned if the apprenticeship program is
organized by an individual employer or firm;
2. The premises of one or several firms designated
for the purpose by the organizer of the program if
such organizer is an association of employers,
civic group and the like; and
3. DOLE Training Center or other public training
institutions with which the TESDA has made
appropriate arrangements. (Sec. 4, Rule VI, Book
II, Rules Implementing the Labor Code).
Article 65-67: Violation of Apprenticeship
Agreement
Investigation of Violation of Apprenticeship
Agreement (Art. 65)
1. Either party to an agreement may terminate the
same after the probationary period only for a valid
cause.
2. Action may be initiated upon complaint of any
interested person or upon DOLE’s own initiative.
Appeal (Art. 66)
 The decision of an authorized agency of
the Department of Labor may be appealed to the
Secretary of Labor within 5 days from receipt of the
adverse decision.
 The decision of the Secretary of Labor
shall be final and executory.
Exhaustion of Administrative Remedies (Art. 67)
1. The exhaustion of administrative remedies is a
condition precedent to the institution of action.
2. The plant apprenticeship committee shall have
initial responsibility for settling differences arising
out of apprenticeship agreements (Sec. 32b, Rule
VI, Book II, Rules Implementing the Labor Code).
Article 68: Aptitude Tests
 An employer who has a recognized
apprenticeship program shall provide aptitude tests
to apprentice-applicants.
Note: However, if the employer does not have
adequate facilities, the DOLE may provide the
service free of charge (Sec. 12, Rule VI, Book II,
Rules Implementing the Labor Code).
Article 69: Responsibility for Theoretical Instruction
 Related theoretical instructions to apprentices
may be undertaken by the employer himself if he
has adequate facilities and qualified instructors for
the purpose. He shall indicate his intention to
assume such responsibility in the apprenticeship
standard of his program. (Sec. 27, Rule VI, Book II,
Rules Implementing the Labor Code)
Article 70: Voluntary Organization of
Apprenticeship Programs
General Rule: The organization of apprenticeship
program shall be primarily a voluntary undertaking of
employers.
Exception: Instances when organization of program is
compulsory:
1. When national security or particular
requirements of economic development so
demand; and
2. Where services of foreign technicians are
utilized by private companies in apprenticeable
trades.
Article 71: Deductibility of Training Costs
 An additional deduction from taxable income of
½ of the value of labor training expenses
incurred for developing the productivity and
efficiency of apprentices are granted to the
person or enterprise organizing an
apprenticeship program.
Requisites (DNP)
1. Apprenticeship program must be duly
recognized by the Department of Labor;
2. Deduction shall not exceed 10% of direct labor
wage; and
3. Employer must pay his apprentices the
minimum wage.

Article 72: Apprentices Without Compensation
Apprentices may be hired without compensation
where on-the-job training is:
1. Required by school
2. Required by the training program curriculum
3. A requisite for graduation; or
4. A requisite for board examination (Sec. 40,
Rule VI, Book II, Rules Implementing the Labor
Code)
Rules on Working Scholar
1. There is NO employer-employee relationship
between students on one hand, and schools,
colleges or universities on the other hand,
where there is agreement between them under
which the former agree to work for the latter in
exchange for the privilege to study free of
charge, provided the students are given real
opportunities, including such facilities as may
be reasonable and necessary to finish their
chosen courses under such agreement (Sec
14, Rule X, Book III, Implementing Rules).
2. Under this Article, the student is not considered
an employee. But if he causes injury or damage
to a third person the school may be held liable
under Art. 2180 of the Civil Code (Filamer
Christian Institute v. IAC, GR No. 75112, August
17, 1992)
3. The employment will neither create unfair
competition in terms of labor costs nor impair
working standards.
Article 75: Learnership Agreement
It shall include:
1. The names and addresses of the employer and
the learner
2. The occupation to be learned and the duration
of the training period which shall not exceed
three (3) months
3. The wage of learner which shall be at least
75% of the applicable minimum wage; and
4. A commitment to employ the learner, if he so
desires, as a regular employee upon
completion of training.
Note: A learner who has worked during the first two
months shall be deemed a regular employee if
training is terminated by the employer before the
end of the stipulated period through no fault of the
learner (Sec. 4, Rule VII, Book II, Rules
Implementing the Labor Code).
Article 76: Learners in Piecework
 Learners in piecework or incentive-rate jobs are
to be paid in full for the work done during the
training period.

Chapter 2: Learners

Article 73: Learners Defined

Learners – persona hired as trainees in semi-

skilled and other industrial occupations which are
non-apprenticeable and which may be learned
through practical training on the job in a relatively
short period of time which shall not exceed 3 APPRENTICESHIP LEARNERSHIP
months. DURATION
Learnership Agreement – employment and Not less than 3 months Practical training on
training contract entered into between the employer practical training on the job not to exceed
and the learner. the job but not more 3 months
than 6 months
Note: On-the-job or practical training of a learner CONCEPT
need not be supplemented by theoretical instruction Practical training on Hiring of persons as
(Sec. 1[a], Rule VII, Book II, Rules Implementing the job supplemented trainees in semi-
the Labor Code). by related theoretical skilled and other
instruction industrial occupations
Article 74: When Learners May be Hired which are non-
apprenticeable and
1. No experienced workers are available which may be learned
2. The employment of learners being necessary to through practical
prevent curtailment of employment training on the job in a
opportunities; and relatively short period
of time.
 capacity is impaired by restriction or different
ER’s COMMITMENT TO HIRE age of physical or disabilities, as a result of
No commitment to hire With a commitment to mental deficiency or a mental, physical or
employ the learner as injury. sensory impairment, to
regular employee if perform an activity in the
he desires upon manner or within the
completion of range considered
Learnership normal for a human
EFFECT OF PRETERMINATION being.
Worker is not Leaner is considered
considered and regular employee Article 79: When Employable
employee after two (2) months 1. Their employment is necessary to prevent
of training and curtailment of employment opportunities; and
dismissal is without 2. It does not create unfair competition in labor costs
fault of learner or impair or lower working standards.
FOCUS OF TRAINING
Highly skilled or Semi-skilled/ Handicapped Workers May become Regular
technical industries industrial occupation Employees
and in industrial (non-apprenticeable)  Subject to the provisions of the Code,
occupation handicapped workers may be hired as regular
APPROVAL workers; apprentices or learners IF their handicap
Require DOLE Not required is not such as to effectively impede the
approval for validity performance of job operations in the particular
EXHAUSTION OF ADM REMEDIES IN CASE occupations for which they were hired. (Sec. 5,
OF BREACH OF CONTRACT Rule VIII, Book II, Rules Implementing the Labor
Precondition for filing Not required Code).
action
 The noble objective of the Magna Carta
for Disabled Persons are not based merely on
charity or accommodation, but on justice and
equal treatment of qualified employees, disabled
or not. After the disable employees has shown
their fitness for the work assigned to them, they
should be treated and granted the same rights
like any other regular employees. (Bernardo v.
NLRC, GR No. 122917, July 12, 1999)
Chapter 3: Handicapped Workers
Equal Opportunity for Employment (Sec. 5, R.A.
Article 78: Definition 7277)
 No disabled person shall be denied access to
Handicapped Workers – those whose EARNING opportunities for suitable employment. Qualified
CAPACITY is impaired by age or physical or mental disabled employees shall be subject to the same
deficiency or injury, disease of illness. terms and conditions of employment and the
same compensation, privileges, benefits, fringe
Note: There must be a link between the deficiency benefits, incentives or allowances as a qualified
and the work, which entitles the employer to lessen able-bodied person.
the worker’s wage. If the disability of the person is not
in any way related to the work for which he was hired, Sheltered Employment (Sec 6, R.A. 7277)
he should not be so considered as handicapped  The State shall provide sheltered employment if
worker. suitable employment cannot be found.

HANDICAPPED HANDICAPPED Duration of Employment

WORKER PERSON  No minimum, no maximum duration. Dependent
Art. 78, LC R.A. 7277 on agreement but it is necessary that there is a
(Magna Carta for specific duration.
Disabled Persons)
Those whose earning Those suffering from Incentive for Employment (Sec. 8, R.A. 7277)
1. Private entities that employ disabled persons who
meet the required skills of qualifications either as
regular employee, apprentice or learner, shall be
entitled to an additional deduction from their
gross income, equivalent to 25% of the total
amount paid as salaries and wages to disable
persons; Provided, that the following are
complied with:
a. Presentation of proof certified by DOLE
that disabled persons are under their employ;
and
b. Disabled employee is accredited with
DOLE and DOH as to his disability skills and
qualifications.
2. Private entities that improve or modify their
physical facilities to provide reasonable
accommodation for disabled persons shall also
be entitled to an additional deduction from their
taxable income equivalent to 50% of the direct
costs of the improvements or modifications. This
does not apply to improvements required under
B.P. Blg. 344.
Article 80: Employment Agreement
Contents
1. The names and addresses of the employer and
the handicapped worker;
2. The rate of pay of the handicapped worker which
shall not be less than 75% of the legal minimum
wage;
3. The nature of work to be performed by the
handicapped worker; and
4. The duration of the employment (Sec. 3, Rule
VIII, Book II, Rules Implementing the Labor Code)
Article 81: Eligibility for Apprenticeship
 Handicapped workers are eligible for employment
as apprentices or learners if their handicap is
such that it does not impede the performance of
job operations in the particular trade or
occupation which is the subject of the
apprenticeship or learnership program.
BOOK THREE: CONDITIONS OF EMPLOYMENT
Benefits Granted in the Title One Book III
1. Right to regular working hours
2. Right to regular working days
3. Right to overtime work
4. Right to regular meal periods
5. Right to night-shift differential pay
6. Right to weekly rest periods
7. Right to additional compensation on scheduled
rest day, Sunday or special holiday work
8. Right to compensation for holiday work
9. Right to service incentive leave
10. Right to a share in the collected service charges
Employer – one who employs the services of others
or who acts for and in behalf of an employer; one for
whom employees work and who pays their wages or
salaries.
Employee – one who works for an employer for a
fee; a person working for salary or wages.
Note: not limited to the employees of a particular
employer, it shall include any individual whose work
has ceased as a result of or in connection with any
current labor dispute or because of unfair labor
practice if he has not obtained any other:
1. Substantially equivalent; and
2. Regular employment
TITLE ONE: WORKING CONDITIONS AND REST
PERIODS
Chapter 1: Hours of Work
Article 82: Coverage
General Rule: Title I, Book III of the Labor Code
dealing with hours of work, weekly rest periods,
holidays, service incentive leaves and service
charges, covers all employees in ALL establishments,
whether for profit or not.
Exceptions: (GoMaFiFaDoR)
1. Government employees
2. Managerial employees including members of the
managerial staff
3. Field personnel
4. Members of the Family of the employer who are
dependent on him for support.
5. Domestic helpers or persons in the personal
service of another; and
6. Workers paid by Result.
Government Employees
a) Refer only to employees of government
agencies, instrumentalities, or political
subdivisions and of government corporations
that are NOT incorporated under the
Corporation Code, i.e., those which have
original characters.
b) Not covered under this Title because the
terms and conditions of their employment are
governed by Civil Service Law rules and
regulations.
 1. That his primary duty consists of the performance
Managerial Employees of work directly related to management policies;
a) Alter-egos of their employers who meet 2. That he customarily and regularly exercises
the following conditions: discretion and independent judgment in the
I. Their primary duty consists performance of his functions;
of the management of the establishment in 3. That he regularly and directly assists in the
which they are employed or of a management of the establishment
department or subdivision thereof; 4. That he execute, under general supervision, work
II. They customarily and along specialized or technical lines requiring
regularly direct the work of two or more special training, experience or knowledge
employees therein; and 5. That he execute, under general supervision,
III. They have the authority to special assignments and tasks; and
hire or fire other employees of lower rank; 6. That he does not devote more than 20% of his
or their suggestions and recommendations time to work other than those described above
as to the hiring and firing and as to the (Sec. 2[c], Rule I, Book III, Implementing Rules
promotion or any other change of status of of the Labor Code).
other employees are given particular
weight. (Sec.2[b], Rule I, Book III, Rules Note: An employee whose job is to supervise the
Implementing the Labor Code) laborers in the construction project falls squarely
under the category of officers or members of a
b) Not covered under this title because they managerial staff and is exempted from payment of
are employed by reason of their special overtime pay, premium pay for holidays and rest
training, experience, or knowledge; value days and service incentive leave pay. (Salazar v.
of their work cannot be measured in NLRC, GR No. 109210, April 17, 1996).
terms of hours.
Test of Supervisory or Managerial Status
MANAGERIAL MANAGERIAL  Depends on whether a person possesses
EMPLOYEES EMPLOYEES authority that is not merely routinary or
(LABOR STANDARDS) (LABOR RELATIONS) clerical in nature but one that requires USE
ART. 82 ART. 212[m] OF INDEPENDENTJUDGEMENT (Villuga v.
Used only for purposes Used only for purposes NLRC, GR No. 75038, August 23, 1993).
of Book III (i.e. working of Book V (i.e. forming
conditions, rest periods, and joining unions, Field Personnel
entitlement to benefits) certification elections, Non-agricultural employees:
collective bargaining) a. Who regularly perform their
duties away from the principal place of
One whose primary duty One who is vested with business of branch office of the employer;
consists of the powers or prerogatives and
management of the to lay down and execute b. Whose actual hours of work in
establishment in which management policies the field cannot be determined with
they are employed or of and/or to hire, transfer, reasonable certainty. (Sec. 27, Rule II,
a department or suspend, lay-off, recall, Book III, Rules Implementing the Labor
subdivision thereof and discharge, assign or Code)
to other members of the discipline employees
managerial staff Note: The Eight-Hour Labor Law has no
application to the outside service force or field
Supervisors are deemed Supervisors are not sales personnel and they are not entitled to
members of the members of the overtime compensation since their employer
managerial staff managerial staff. has no way of knowing the number of hours
(National Sugar he works per day. (San Miguel Brewery v.
Refineries Corp. v. Democratic Labor Union, GR No. L-18353,
NLRC, March 24, 1993). July 31, 1963)

Rule in case of Fishermen. In Mercidar

Fishing Corp. v. NLRC GR No. 112574,
Elements to be considered a member of the October 8, 1998, fishermen are not field
Managerial Staff (PCREED) personnel, although they perform non-
agricultural work away from petitioner’s
 business offices, the fact remains that
throughout the duration of their work they
are under the effective control and
supervision of employer. HOWEVER, under
the Philippine Fisheries Code of 1998,
fishermen are considered field personnel.
Rule in case of Drivers/ Bus Conductors: It
is of judicial notice that along the routes
that are plied by bus companies, there are
inspectors assigned in strategic places,
mandatory once a week car barn or shop
day, drivers/conductors must be at specific
place at specified time, as they generally
observe prompt departure and arrival from
their point of origin to their point of
destination. They are, therefore, under
constant supervision while in the
performance of this work and hence cannot
be considered a field personnel. (Autobus
Transport Systems, Inc. v Bautista, GR No.
156367, May 16, 2005)
Members of the Family of the Employer
 Not covered by this Title because the
amounts given by the employer by way of
support may far exceed the benefits to which
the employee is entitled under the provisions
of law.
Domestic Helpers/ Persons rendering personal
services
a. Those who:
i. Perform services in the employer’s home which
are usually necessary and desirable for the
maintenance or enjoyment thereof; or
ii. Minister to the personal comfort, convenience or
safety of the employer, as well as the members of
the employer’s household. 9Sec. 2[d], Rule I,
Book III, Rules Implementing the Labor Code)
iii. Not covered by this Title because the terms and
conditions of employment are governed by the
provisions of Chapter III, Title III of the present
Book.
Workers Paid by Result
a. Such as on piece rates or task basis who are not
covered under this Title because their compensation is
based on the work completed and not on the time spent
in working.
Importance of Determining Existence of Employer-
Employee Relationship
b. Generally, labor standards and conditions apply
only if there is Er-Ee relationship. But in some
instances, even if there is no Er-Ee relationship, the
LC may still be invoked (e.g. indirect employer’s
liability, illegal recruitment and misuse of POEA
license).
c. Employer-employee relationship is determined by
law, and not by contract between the parties
(Paguio v. NLRC, GR No. 147816, May 9, 2003).
Elements of Employer-Employee Relationship of
Four-Fold Test (SePaDisCo)
(Pacific Consultants International Asia, Inc. v.
Schonfeld, GR No. 166920, February 19, 2007)
1. Selection and engagement of the employee
2. Payment of wages
3. Power of Dismissal
4. Power to Control.
Control Test – refers to the employer’s power to
control or right to control the employee not only as to
the result of the work to be done by also as to the
means and methods by which the same is to be
accomplished.
 The control test is the most important test our
courts apply in distinguished an employee
from an independent contractor. This test is
based on the extent of control the hirer
exercises over a worker. The greater the
supervision and control the hirer exercises,
the more likely the worker is deemed an
employee. The converse holds true as well,
the less control the hirer exercises, the more
likely the worker is considered an
independent contractor (Sonza v. ABS CBN
Broadcasting Corp. GR No. 128051, June 10,
2004).
 The control test merely calls for the existence
if the right to control the manner of doing the
work, not the actual exercise of the right
(Zanotic shoes v. NLRC, GR No. 1006655,
February 13, 1995)
Note: The issuance by the principal of guidelines does
not establish control by principal (Coca Cola Bottlers
Phil., Inc. v Climaco, GR No. 146881, February 5,
2007).
 Not every form of control will have the effect of
establishing the Er-Ee relationship. The line
should be drawn between rules that merely
serve as guidelines towards the achievement of
mutually desired results without dictating the
means or methods to be employed in attaining
it, and those that control or fix the methodology
 and bind or restrict the party hired to the use of
such means. The first, which aim only to
promote the result, create no employer-
employee relationship unlike the second, which
address both the result and the means used to
achieve it and hence, employer-employee
relationship exists (Insurance Life Assurance
Co., Ltd. V. NLRC, GR No. 84484, November
15, 1989).
Cases Where Employer-Employee Relationship
Exists
 Jeepney drivers on boundary basis (Villamaria
v. CA, GR No. 165881, April 19, 2006)
 Drivers or helpers of salesmen are employees
of the company (Alhambra Industries v. CIR,
GR No. L-15984, October 30, 1970)
 Employees of unregistered association
(Orlando Farm Growers v. NLRC, GR No.
129076, November 25, 1998)
 Street-hired cargadors (Caurdaneraan Piece
Workers Union v. Laguesma, GR No.113542,
February 24, 1998)
 Workers in movie projects (Maraguinot v.
NLRC, GR No. 120969, January 22, 1998)
 Salaried insurance agent as distinguished from
registered agents on commission basis (Great
Pacific Life Assurance Corp. v. Judico, GR No.
73887, December 21, 1989)
 Tailors, seamstress, servers, basters,
plantsadoras paid on piece-rate basis (Makati
Haberdashery v. NLRC, GR Nos. 83380-83,
November 15, 1989)
 In-house lawyer as distinguished from an
outside retainer (Hydro Resources Contractors
Corp. v. Pagalilauan, GR No. L-62909, April 18,
1989)
 University proferssors and instructors (FEU v.
CIR, GR No. L-17620, August 31, 1962)
 Taxi driver, barber (Citizens League of Free
Workers v. Abbas, GR No. L-21212, September
23, 1966)
Cases Where There is No Employer-Employee
Relationship
 Farm workers are not employees of the sugar
central (victories Milling Co., Inc. v. NLRC, GR
No. 116347, October 3, 1996)
 Working scholars are not employees of the
schools (Filamer Christian Institute v. IAC, GR
No. 75112, August 17, 1992)
 Company vs. collecting agents on commission
basis (Singer Sewing Machine Company v.
Drilon, GR No. 91116, January 24, 1991)
 Shoe shine boys (Besa v. Trajano, GR No.
72409, December 29, 1986)
 Softdrinks company vs. independent
contractors selling softdrinks (Mafinco Trading
Corp. v. Ople, GR No. L-37790, March 25,
1976).
Article 83: Normal Hours of Work
 The normal hours of work of an employee shall
NOT exceed 8 hours a day.
Rationale
1. To safeguard the health and welfare of the
laborer; and
2. To minimize unemployment by utilizing different
shifts.
Part-Time Work
 8-hour labor law prescribes the maximum but
not the minimum. Therefore, part-time work, or
a day’s work of less than 8 hours is not
prohibited.
Compressed Work Week (CWW)
 CWW is resorted to by the employer to prevent
serious losses due to causes beyond his
control, such as when there is substantial
slump in demand for his goods or services or
when there is lack of raw materials. To be an
exception to the “eight-hour a day” requirement,
the workers must agree to the temporary
change of work schedule and they do not suffer
any loss of overtime pay, fringe benefits of their
weekly or monthly take home pay (DOLE
Explanatory Bulletin, July 23, 1985).
 This scheme is an altenative arrangement
whereby the normal workweek is reduced to
less than 6 days but the total number of normal
hours per week remains at 48 hours. The
normal workday is increase to more than 8
hours without corresponding overtime premium.
This applies as well to 40 or 44-hour workweek
firms.
Conditions of a Valid CWW Scheme (DOLE
Advisory No. 02, Series of 2004)
1. It is expressly and voluntarily supported by
majority of the employees affected.
2. If work is hazardous, a certification is needed
from an accredited safety organization or the
firm’s safety committee that work beyond 8
hours is within the limits or levels of exposure
set by DOLE’s occupational safety and health
standards.
3. The DOLE is duly notified.
Normal Hours of Work of Health Personnel
  For health personnel in cities and 2. An employee need not leave the premises of the
municipalities with a population of at least 1M workplace in order that his rest period shall be
OR in hospitals and clinics with a bed capacity counted, it being enough that he stops working,
of at least 100: may rest completely and may leave his workplace,
1. Regular office hours shall be 8 hours a day for to go elsewhere whether within or outside the
5 days a week, or 40 hours a week, exclusive premises of his workplace.
of time for meals. 3. If the work performed was necessary, or it
2. In case of exigencies, they may work for 6 days benefited the employer, or the employee could not
or for 48 hours, but they shall be entitled to an abandon his work at the end of his normal working
additional compensation of at least 30% of their hours because he had no replacement, all time
regular wage for work performed on the 6th day. spend for such work shall be considered as hours
worked if the work is with the knowledge of his
Note: There is nothing in the law which supports the employer or immediate supervisor.
contention that personnel in hospitals and clinics 4. The time during which an employee is inactive by
are entitled to a full weekly wage for 7 days if they reason of interruption in his work beyond his control
have completed the 40-hour/5-day workweek in any shall be considered time worked either if he
given workweek (San Juan De Dios Hospital imminence of the resumption of work requires the
Employees Assoc. – AFW v. BLRC, GR No. 12683, employee’s presence at the place or work or if the
November 28, 1997). interval is too brief to be utilized effectively and
gainfully in the employee’s own interest.
 Health personnel in government service are
excluded from the coverage of Arts. 82-96.
Their employment benefits are governed by Rules on Hours Worked
R.A. 7305. A. Waiting Time
Considered as hours worked IF waiting:
Work Day vs. Calendar Day 1. Is an integral part of his work
2. The employee is required or engaged by the
Work Day- 24-hour period commencing from the time employer to wait; or
an employee regularly starts to work regardless of 3. When employee is required to remain on call in
whether the work is broken or continuous. It may not the employer’s premises or so close thereto
coincide with a calendar day. that he cannot use the time effectively and
gainfully for his own purpose.
Calendar Day-24-hour period commencing at 12
midnight and ending at 11:59pm. It is possible for an ENGAGED TO WAIT WAITING TO BE
employee to work for 2 calendar days (e.g. If X’s work (Employee is required ENGAGED
schedule is from 10pm of Monday up to 6 am of to wait) (Employee is not
Tuesday, his work day covers 2 calendar days). required to wait)
Waiting is an integral Idle time is not working
Article 84: Hours Worked part of the job, the time time, it is not
spent waiting is compensable
Hours Worked Include: compensable
1. All time during which an employee is required to e.g. X works as a driver. e.g. Y works as a Partas
be on duty or to be at a prescribed workplace His task is to drive a trans bus driver. His
2. All time during which an employee is suffered or truck to Naga to load route is from Vigan to
permitted to work gravel. While gravel is Baguio, leaving at 6am
3. Rest periods of short duration during working being loaded, he played and arriving at 12nn. He
hours which shall not be more than twenty (20) mahjong and then slept. is completely relieved
minutes; and The time he spent from duty until 6pm,
4. Meal periods of less than twenty (20) minutes are playing and sleeping is when he again goes on
only a rest period of short duration and are thus compensable because duty for the return trip to
considered as hours worked. he is engaged to wait for Vigan. His idle time is
waiting is an integral not compensable
Principles in Determining Hours Worked part of his job. because he is
(Sec. 4, Rule I, Book II, Implementing Rules) specifically relieved from
1. All hours are hours worked which the employee is all duty. He is merely
required to give to his employer, regardless of waiting to be engaged.
whether or not such hours are spent in productive
labor or involve physical or mental exertion. B. Working While on Call
  When employee is required to remain on call in
the employer’s premises or so close thereto
that he cannot use the time effectively and
gainfully for his own purpose.

 However, if he is not required to remain on the

employer’s premises but is merely required to
leave work at his home or with company
officials where he may be reached, he is not
considered working while on call.

C. Preliminary and Postliminary Activities

Preliminary – before work (e.g. preparation for

business presentations)

Postliminary –after actual work (e.g. OT)

 Compensable When:
1. Controlled or required by employer;
and GENERALLY: not Compensable Considered as
2. Are pursued necessarily and primarily compensable and must be work time
for the employer’s benefit. because it is a counted as when it cuts
normal incident of hours worked. across an
Note: The 30-minute assembly time practiced by the employment employee’s
employees of the company cannot be considered EXCEPTIONS: workday
“waiting time” since they are not subject to the absolute 1. Where because it
control of the company during this period, otherwise, the worker is substitutes for
their failure to report in the assembly time would justify made to work the hours that
the company to impose disciplinary measures. (Arica v. on an the employee
NLRC, GR No. 78210, February 28, 1989) emergency call should have
and travel is been in the
D. Travel Time necessary in office.
TRAVEL TRAVEL IS TRAVEL proceeding to
FROM HOME ALL IN DAYS AWAY FROM the workplace;
TO WORK WORK HOME 2. Travel is
done through a
Normal travel The time spent Travel that
conveyance
from home to by an keeps an
provided by the
work which is employee in employee
employer;
not work time travel as part away from
3. Travel is
of his principal home
done under the
activity, like overnight
supervision and
travel from
control of the
jobsite during
employer; and
the workday
4. Travel is
done under
vexing and
dangerous
circumstance.

E. Power Interruption
1. 1st 20 minutes is compensable.
2. Succeeding minutes not compensable.
3. If despite the lapse of the 1 st 20 minutes, the
employees are required to stay in their
workplaces, such time is compensable.
F. Semestral break of Teachers
 Compensable hours worked for. It is a
form of interruption beyond their control.
 Only for regular full-time teachers (Univ.
of Pangasinan Faculty Union v. Univ. of
Pangasinan, GR No. L-63122, February 20, 1984).
G. Lectures, Meetings, Trainings, Programs
Not counted as working time if all the following
conditions are met:
1. Attendance is outside of the employee’s regular
working hours;
2. Attendance is in fact voluntary; and
3. Employee does not perform any productive
work during such attendance. (Sec. 6, Rule I,
Book III, Rules Implementing the Labor Code)
H. Attendance in Labor Relations Activities
1. CBA Negotiations – generally, not
compensable, EXCEPT if:
a. There is an agreement for
compensability in the parties Ground Rules;
b. There is an established practice or
policy allowing compensability; and
c. When it is done during regular work
hours.
2. Grievance Meeting – generally compensable,
except when there is a CBA, policy or practice to
the contrary.
3. Hearing, Arbitration, Conciliation – not
compensable.
4. Strikes – not compensable, except if there is an
agreement to allow, “Strike duration pay”. Non-
compensability is more compelling in case of
illegal strike.
I. Work Hours of Seamen
Presence on board for more than 8 hours a day is
required by the nature of their service.
Article 85: Meal Periods
Rules on Meal Periods
1. Should not be less than sixty (60) minutes. It is
non-compensable except: Where during the so-
called meal period, the laborers are required to
standby for emergency work, or said hour is not
one of complete rest, such period is considered
overtime (hours worked). (Pan American World
Airways System v. Pan American Employees
Association, GR No. L-16275 February 24,
1961)
2. May be less than sixty (60) minutes, but should
not be less than twenty (20) minutes and the
shortened mealtime must be with full pay under
the following instances:
a. Where the work is non-manual work in
nature or does not involve strenuous physical
exertion.
b. Where the establishment regularly
operates not less than 16 hours a day;
c. In cases of actual or impending
emergencies or there is urgent work to be
performed on machineries, equipment or
installations to avoid serious loss which the
employer would otherwise suffer;
d. Where the work is necessary to prevent
serious loss of perishable goods (Sec. 7, Rule I,
Book III of the Rules Implementing the Labor
Code).
3. if less than twenty (20) minutes, it becomes
only a rest period and is thus considered as
work time.
Note: Meal periods during overtime work is not
given to workers performing overtime for the reason
that OT work is usually for a short period ranging
from one to three hours and to deduct from the
same one full hour as meal period would reduce to
nothing the employee’s OT work.
Shortened Meal Break Upon Employees’
Request
Employees may request that their meal period be
shortened so that they can leave work earlier than
the previously established schedule. Such
shortened mealtime is not compensable.
Requisites
1. Employees voluntarily agree in writing and
waive the overtime pay;
2. No diminution in the salary and other fringe
benefits of the employees already existing;
3. Work is not physically strenuous and they are
provided with adequate coffee breaks in the
morning and afternoon;
4. Value of benefits is equal to the compensation
due them;
5. Overtime pay will become due and demandable
if ever they are permitted or made to work
beyond 4:30 pm; and
6. The arrangement is of temporary duration.
Note: The eight-hour period does not include the
meal break. Nowhere in the law may it be inferred
that employees must take their meals within the
company premises. Employees are not prohibited
from going out of the premises as long as they
return to their posts on tome (Philippine Airlines,
inc. v. NLRC, GR No. 132805, February 2, 1999).
Article 86: Night Shift Differential
Concept of NSD
  Additional compensation of not less tha
10% of an employee’s regular wage for Daily Wage: 800
every hour of work done between 10:00 pm Work schedule: 8:00 am – 5:00 pm
and 6:00 am, whether or not such period is Overtime: 5:00 pm – 12:00 mn
part of the worker’s regular shift.
Step 1: Get hourly wage rate.
Note: If work done between 10 PM and 6 AM is Daily wage divided by number of hours worked
overtime work. Then the 10% night shift differential e.g. P800 / 8 hours = P 100
should be based on the overtime rate.
Step 2: Compute wage between 8:00 am –5:00 pm
Rationale e.g. 8 hours x P 100 = P 800
NSD pay is given as a premium for working at a
time when the employee is supposed to sleep and Step 3. Compute OT Premium pay between 5:00 pm –
rest in accordance with the law of nature. 12:00 mn.
[(25% x wage per hour) + wage per hour] x no. of OT
NSD Not Waivable hours] e.g.
Additional compensation for nighttime work is
founded on public policy (Mercury Drug v. Dayao. (25% x P 100) + P 100 125
GR No. L-30452, September 30, 1982). NSD is not X no. of OT hours (5 pm – 12 mn) X 7 hrs
waivable except for higher and bigger benefits. 875

Sample Illustration Step 4: Compute NSD

[(10% of OT wage per hour) x no. of hours of work
1. Without Overtime performed between 10 pm – 6am]
[(10% x regular wage per hour) x no. of hours of e.g. (10% x P 125) x 2 hrs = P 24
work performed between 10pm-6am]
Computation
Daily Wage: 800 8am – 5pm (8 hours) X P100 = 800
Work schedule: 6:00 pm – 2:00 am 5pm-12mn (7 hours) X P125= 875
NSD Pay (2 hours) X P12.50 = + P25
Step 1: Get hourly wage rate Total Wage Earned 1700
Daily wage divided by number of hours worked
e.g. P 800 / 8 hours = P 100
Night Shift Differential vs. Overtime Pay
Step 2: Compute wage between 6:00 pm – 2:00 am NSD OVERTIME PAY
e.g. 8 hours x P 100 = P 800 Payment for work done Payment for the excess
during the night (10:00 of the regular 8-hour
Step 3: Compute NSD pm – 6:00 am) work
(10% of regular wage per hour x no. of hours of 10% of basic wage 25% or 30% of basic
work performed between 10pm – 6 am) wage
e.g. (10% x P 100) x 4 hours = P 40
Note: the receipt of overtime pay will not preclude
Computation payment of night shift differential pay (NARIC c. NARIC
6pm-10pm (4 hours) X P100 = 400 workers union. GR No. L-12075, May 29, 1959).
10pm-2am (4 hours) X P100= 400
NSD Pay (4 hours) X P10 = + P40 Article 86: Overtime Work
Total Wage Earned 840
Overtime Pay – additional compensation for work
performed beyond eight (8) hours within the worker’s
24-hour workday regardless whether the work covers 2
calendar days.
Rationale
The employee is given OT pay because he is made to
work longer that what is commensurate with his agreed
compensation for the statutorily fixed or voluntarily
2. With Overtime
agreed hours of labor he is supposed to do (PNB v.
[(10% of OT wage per hour) x no. of hours of work
PEMA, GR no. L-30279, July 30, 1982).
performed between 10pm – 6am]
Basis for Computation of Overtime Pay
 Regular Basic Wage: Includes cash wage only,
without any deduction on account of facilities
provided by the employer (Art 90. LC)
 Rates
A. Overtime Work on Regular Work Day
The employee is paid for the overtime work on
additional compensation equivalent to his regular
wage plus at least 25% thereof.
B. Overtime Work on Holiday or Rest Day
Overtime work performed on a holiday or rest day
shall be paid an additional compensation
equivalent to the rate of the first 8 hours on a
holiday or rest day plus at least 30% thereof.
Conditions to be entitled to overtime pay
1. Entitlement to overtime pay must first be
established by sufficient proof
2. Said overtime work was actually performed
(Cagampan v. NLRC, GR Nos. 85122-24,
March 28, 1991)
Factual and Legal Basis for Claim
General Rule: An express instruction from the
employer is not required. It is sufficient that the
employee is permitted or suffered to work.
Exception: On rest days and holidays, written
authority after office hours is required for
entitlement to compensation.
Note: A verbal instruction to render overtime work
prevails over a memorandum prohibiting such
work (A.L. Ammen Transportation Co. v. Borja, No
L-17750, Aug. 31, 1962).
Overtime Pay Integrate in the Basic Salary
(“Built In” Overtime Pay)
The stipulation between employer and employee
that the latter’s regular or basic salary already
includes the overtime pay is not per se illegal. This
is also called composite or package pay or all-
inclusive salary.
Requisites
1. Clear written agreement knowingly and freely
entered into by employee; and
2. Mathematical result shows that agreed legal
wage rate and the overtime pay, computed
separately, are equal to or higher than the
separate amounts legally due.
Waiver of Overtime Pay
General Rule: Overtime pay cannot be waived
expressly or impliedly. Any contrary stipulation is
null and void, as it is intended to benefit laborers
and employees.
Exceptions:
1. When the waiver is made in consideration of
benefits and privileges which may be more than
what will accrue to them in overtime pay; and
2. Compressed workweek.
Note: Employees whose positions are reclassified
from rank-and-file to supervisory lose overtime pay
and other benefits under Arts. 83-96. Promotion
produces the same effect. But the promotion and
position reclassification must be done in good faith.
The personnel movement should not be intended to
circumvent the law to deprive employees of the
benefits they used to receive. (Productivity
Incentives Act of 1990, R.A. 6971).
Quitclaim in Relation to Overtime Pay
A quitclaim whereby laborers agree to forego their
benefits due from their employer is NULL AND
VOID in its entirety since it runs counter with article
22 of the Civil Code which provides against unjust
enrichment and is contrary to public policy.
(Pampanga Sugar Development Co. Inc. v. CIR,
GR No. L-39387, June 29, 1982)
Sample Illustrations
A. Regular Workdays
[Regular basic wage + 25% of regular basic wage]
Daily Wage 800
Work Schedule: 8:00 am – 5:00 pm
(inclusive of 1 hour
meal break)
OT: 5:00 pm – 10:00 pm
Step 1: Get hourly wage rate.
Daily basic wage divided by number of hours
worked.
e.g. P800/ 8 hours = P100
Step 2: Compute wage between 8:00 am – 5:00 pm
e.g. 8 hrs x P 100 = P 800
 OT: June 24
Step 3: Compute OT premium pay between 5:00 (Q.C. day- special
pm –10:00 pm holiday)
[(25% x wage per hour) + wage per hour] x no. of 5:00 pm – 10:00 pm
OT hours] e.g. Step 1: Get hourly wage rate
Daily Basic Wage divided by number of hours
(25% x P 100) + P 100 125 worked multiplied by special holiday wage rate.
X no. of OT hours (5pm – X 5 hrs. e.g. (P800 / 8 hrs) x 130% = P 130
10pm) Step 2: Compute wage between 8:00 am – 5:00 pm
625 using special holiday wage rate.
e.g 8 hrs x P 130 = P 1,040
Computation Step 3: Compute OT premium pay between 5:00
8am – 5pm (8 hours) X P 100 = 800 pm – 10:00 pm
X P 125 = +P 625 [(30% x HWage per hour) + Hwage per hour] x no.
Total wage earned P 1,425 of OT hours e.g.

B. Legal or Regular Holidays (30% x P130) + P130 169

[Holiday wage rate + 30% of holiday rate (200%)] X no. of OT hours (5 pm – 10 pm) X 5 hrs.
845
Daily Wage 800
Work Schedule: 8:00 am – 5:00 pm Computation:
(Inclusive of 1 hour 8am – 5pm (8 hours) X P 130 = P 1,040
meal break) 5pm – 10 pm (5 hours) X P169 = + P845
OT: June 12 Total wage earned P 1,885
(Independence day)
5:00 pm – 10:00 pm) D. Scheduled Rest Day which is Also a Holiday
Step 1. Get hourly wage rate [ Rest day & special holiday wage rate + 30% of
Daily basic wage divided by number of hours rest day & special holiday wage rate (150%)]
worked multiplied by regular holiday wage rate
e.g (P800 / 8 hours) x 200% = P200 Daily wage 800
Step 2: Compute wage between 8:00 am – 5:00 pm Work Schedule: 8:00 am – 5:00 pm
using holiday wage rate (Inclusive of 1 hour meal
e.g. 8 hrs. x P200 = P1,600 break)
Step 3: Compute OT premium pay between 5:00 OT: June 6
pm – 10:00 pm. (Araw ng Caloocan-
[(30% x wage per hour) + wage per hour] x no. of special holiday coinciding
OT hours e.g. with employee’s scheduled
(30% x P 200) + P200 260 rest day)
X no. of OT hours (5pm-10pm) X 5 hrs. 5:00 pm – 10:00 pm
P 1, 300 Step 1: Get hourly wage rate
Daily Basic Wage divided by number of hours
Computation: worked multiplied by rest day & special holiday
8am – 5pm X P200 = P 1,600 wage rate.
(8 hours) e.g. (P800 / 8 hrs) x 150% = P 150
5pm – 10pm X P260 = + P 1,300 Step 2: Compute wage between 8:00 am – 5:00 pm
(5 hours) using special holiday wage rate.
Total wage earned P 2,900 e.g. 8 hrs. x P 150 = P 1,200
Step 3: Compute OT Premium Pay between 5:00
pm – 10:00 pm
C. Rest Days or Special Holidays
[(30% x Hwage per hour) + Hwage per hour ] x no.
[Rest day or special holiday wage rate + 30% of
of OT hours
rest day or special holiday wage rate (130%)]
(30% x P150) + P 150 195
Daily Wage 800
X no. of OT hours (5 pm – 10 pm) X 5 hrs
Work Schedule 8:00 am – 5:00 pm
(Inclusive of 1 hour meal 975
break)
Computation:
8am – 5pm (8 hours) X P 150 = P 1,200 (Araw ng Kagitingan &
5pm – 10pm (5 hours) X P 195 = + P 975 at the same time
Total wage earned P 2,175 Good Friday)
5:00 pm – 10:00 pm
F. Scheduled Rest Day which is also a Legal or
Regular Holiday Step 1: Get hourly wage rate
[Rest day & legal holiday wage rate & 30% of rest Daily Basic Wage divided by number of hours
day & legal holiday wage rate (260%)] worked multiplied by rest day and legal holiday
wage rate
Daily Wage 800 e.g. (P 800 / 8 hrs) x 300% = P300
Work Schedule: 8:00 am – 5:00 pm Step 2: Compute wage between 8:00am – 5:00 pm
(inclusive of 1 hour using special holiday wage rate
meal break) e.g 8 hrs x P 300 = P 2,400
OT: May 1 Step 3: Compute OT Premium pay between 5:00
Labor Day – legal pm – 10:00pm
holiday coinciding [(30% x Hwage per hour) + Hwage per hour] x no.
with emplpoyee’s of OT hours e.g.
scheduled rest
day) (30% x P300) + P300 390
5:00 pm – 10:00 X no. of OT hours (5pm – 10pm) X 5 hrs
pm P 1,950

Computation:
8am – 5pm X P 300 = P 2,400
(8 hours)
Step 1: Get hourly wage rate. 5pm –10pm X P 390 = + P 1,950
Daily Basic Wage divided by number of hours (5 hours)
worked multiplied by rest day and legal holiday Total wage earned P 4,350
wage rate.
e.g. (P800 / 8 hrs) x 260% = P 260 Article 88: Undertime Not Offset by Overtime
Step 2: Compute wage between 8:00 am – 5:00 pm
using holiday wage rate.  Offsetting of Undertime work by overtime work
e.g. 8 hrs. x P 260 = P 2,080 whether on the same or any other day is
Step 3: Compute OT Premium pay between 5:00 prohibited by law.
pm – 10:00pm  Permission given to the employee to go on
[(30% x Hwage per hour) + Hwage per hour] x no. leave on some other day of the week shall not
of OT hours e.g. exempt the employer from paying the additional
compensation.
(30% x P 260) + P 260 338
X no. of OT hours (5pm-10pm) X 5 hrs Rationale
P 1,690 The undertime hours represent only the employee’s
hourly rate of pay while the overtime hours reflect
Computation: both the employee’s hourly rate of pay and the
8am – 5pm (8 hours) X P 260 = P 2,080 appropriate overtime premium such that, not being
5pm – 10pm (5 hours) X P 338 = + P 1,690 of equal value, offsetting the undertime hours
Total wage earned P 3,770 against the overtime hours would result in undue
deprivation of the employee’s overtime premium
F. Double Holiday (NWSA v. NWSA Consolidated Unions, GR Nos. L-
[Double holiday wage rate + 30% of double holiday 26894-96, February 28, 1969).
wage rate (300%)]
Article 89: Emergency Overtime Work
Daily Wage 800
Work Schedule: 8:00 am – 5:00 pm General Rule: Employees cannot be compelled to
(inclusive of 1 hour render overtime work against their will.
meal break)
OT: April 9 Exceptions:
 1. In time of war or any national or local
emergency declared by the Congress of the
Chief Executive;
2. To prevent loss or damage to life or property
due to emergencies and force majeure;
3. When there is urgent work needed on
machines and equipment;
4. When work is necessary to preserve perishable
goods;
5. To prevent serious obstruction or prejudice to
the business or operations of the employer; and
6. When it is necessary to avail of favorable
weather or environmental conditions where
performance or quality of work is dependent
thereon (Sec 10, Rule I, Book III, Rules
Implementing the Labor Code).
Article 90: Computation of Additional
Compensation
Regular Wage shall include cash wage only, without
deduction on account of facilities provided by the
employer, for purpose of computing OT and other
additional remunerations in Chapter I.
Chapter 2: Weekly Rest Period
Article 91: Right to a Weekly Rest Day
Duration: NOT less than twenty-four (24)
consecutive hours after every six (6) consecutive
normal workdays.
Note: All establishments and enterprises may operate
or open for business on Sundays and holidays
provided that the employees are given the weekly rest
day and the benefits provided under the law (Sec. 2,
Rule III, Book III, IRR of LC).
Who Determines:
The employer determines and schedules the weekly
rest period subject to the following:
1. Collective bargaining agreement;
2. Rules and regulations issued by the Secretary
of Labor; and
3. Employee’s preference based on religious
grounds.
Note: When such preference will prejudice the
business operations of the employer and no other
remedial measure are available, the weekly rest
period may be scheduled to meet the employee’s
choice for at least two days a month (Sec. 4, Rule III,
Book III, IRR of LC)
Article 92: When Employer May Require Work on
Rest Day
General Rule: The employer may not require the
employees to work on a rest day.
Exceptions: (UPANAC)
1. In cases of Urgent work to be performed on the
machinery, equipment, or installation;
2. To Prevent loss or damage to perishable goods;
3. In case of Actual or impending emergencies
caused by force majeure to prevent loss of life and
property, or imminent danger to public safety;
4. Where the Nature of the work requires continuous
operations and the stoppage of work may result in
irreparable injury or loss to the employer;
5. In the event of Abnormal pressure of work due to
special circumstances, where the employer cannot
ordinarily be expected to resort to other measure; and
6. Under other Circumstances analogous to the
foregoing as determined by the Secretary of Labor.
Note: The failure to work during an employee’s rest
day does not justify the disciplinary sanction of
outright dismissal from employment as such is so
severe a consequence, more so when justifiable
grounds exist for the said failure. (Remerco Garments
Manufacturing v. Minister of Labor & Employment, GR
No. L-56176-77. February 27, 1985)
 When an employee volunteers to work on hir rest day
under other circumstances, he may be allowed to do
so, provided he expresses such desire in writing and
he is paid the additional compensation for working on
his rest day.
Article 93: Compensation for Rest Day, Sunday,
or Holiday Work
Premium Pay or Differential Compensation –
additional compensation for work rendered by the
employee on days when normally he should not be
working such as special holidays and weekly rest days.
Note: This article does not prohibit a stipulation on the
CBA for higher benefits.
Formula to Compute Wages on Holidays
(Memorandum Circular No. 1, Series of 2004)
1. For REGULAR HOLIDAYS, the following rules
shall apply:
a. If it is an employee’s regular workday
i. if unworked – 100%
ii. if worked –
 1st 8 hours – 200%
 Excess of 8 hours – plus
30% of hourly rate on said day
b. if it is an employee’s rest day
i. if unworked – 100%
 ii. if worked certain conditions
 1st 8 hrs – plus 30% of 100% Limited to the 11 Not exclusive since a
 Excess of 8 hrs – plus 30% enumerated by the law or ordinance may
of hourly rate on said day Labor Code provide for other
special holidays
2. For declared SPECIAL DAYS such as Special Rate is 200% of the Rate is 130% of the
Non-working Day, Special Public Holiday, regular rate if worked. regular wage if worked
Special National Holiday, and nationwide
special days, the following rules shall apply: Rate of Additional Compensation for Work on a
a.If unworked – No pay, unless there is a Rest Day, Sunday or Holiday
favorable company policy, practice or
collective bargaining agreement (CBA) DAY RATE OF
granting payment of wages on special ADDITIONAL
days even if unworked. COMPENSATION
b.If worked Work on a scheduled 30% of regular wage
i. 1st 8 hrs.- plus 30% of the daily rate rest day
of 100% No regular workdays
ii. Excess of 8 hrs. – plus 30% of hourly and no specific rest
rate on said day days
c. Falling on the employee’s rest day and if Work on Sunday when 30% of regular wage
worked it is his established
i. 1st 8 hrs. – plus 50% of the daily rate of rest day
100% Work on special 50% of regular wage
ii. Excess of 8 hrs. – plus 30% of hourly holiday falling on
rate on said day scheduled rest day
Work on regular 230% of regular wage
3. For those declared as SPECIAL WORKING holiday falling on
HOLIDAYS, the following rules shall apply: scheduled rest day

 For work performed, an employee is

entitled only to his basic rate. No premium
pay is required since work performed on
said days is considered work on ordinary
working days.
List of Special Days
A. National
1. All Saint’s Day – November 1
2. Last Day of the Year – December 31
3. Ninoy Aquino Day – Monday nearest August
21 (R.A. 9492, July 25, 2007)
4. Other days declared by law
B. Local
Those declared by law or ordinance (e.g. Makati Day
for Makati City only)
Chapter 3: Holidays, Service Incentive Leaves and
Service Charges
Article 94: Right to Holiday Pay
Holiday Pay –a day’s pay given by law to an
employee even if he does not work on a regular
holiday. It is limited to the eleven (11) regular, also
called legal, holidays listed by law. The employee
should not have been absent without pay on the
working day, preceding the regular holiday.
Note: In addition to the exceptions provided in Art. 82,
Holiday pay does not apply to employees of retail and
service establishments regularly employing not more
than 10 workers (Sec. 1, Rule IV, Book III, IRR of LC).

Note: In the event the holiday falls on a Wednesday,

the holiday will be observed on the Monday of the List of Regular Holidays (NM_GALIN-CREB) as
week. If the holiday falls on a Sunday, the holiday will amended by RA 9492, July 25, 2007
be observed on the Monday that follows (R.A. 9492). 1. New Year’s Day – January 1
2. Maundy Thursday – Movable date
3. Good Friday – Movable date
REGULAR HOLIDAY SPECIAL DAY 4. Araw ng Kagitingan – Monday nearest April 9
Compensable even if Not compensable if 5. Labor Day – Monday nearest April 9
unworked subject to unworked 6. Independence Day – Monday nearest June 12
 7. National Heroes Day – Last Monday of August b. to give employee only 100% would reduce the
8. Bonifacio Day – Monday nearest November 30 number of holidays under D.O No. 3 (Asian
9. Christmas Day – December 25 Transmission Corporation, V. CA, GR No.
10. Rizal Day – Monday nearest December 3 144664, March 15, 2004.)
11. Eid’l Fitr – movable date 2. 300% if he worked on 2 regular holidays falling
on the same day
Note: There must be no distinction between 3. 390% of the basic wage of he worked on 2
Muslims and non-Muslims as regards payment of regular holidays falling on the same day and at the
benefits for Muslim Holidays; wages and other same time, falling on scheduled rest day.
emoluments are laid down by law and not based on
faith or religion (San Miguel Corp. v. CA, GR No. Single Holiday Rule
146775, January 30, 2002). Provided that the employee:
1. Worked;
Rule on Compensability: compensable whether 2. Was on leave with pay; or
worked or unworked subject to certain conditions 3. Was on authorized absence on the day prior to the
regular holiday
 Legal Holiday falling on a Sunday does not
create an additional workday nor create a Successive Regular Holidays
legal obligation for the employer to pay extra, To be entitled to two (2) successive holidays, the
aside from the usual holiday pay to its employee must:
monthly paid employees. 1. Be present on the day immediately preceding the
first holiday, OR
Holiday Pay of Monthly Paid Employees 2. Be on leave with pay.
 The use of 314 as a divisor in the
computation of a monthly paid employee’s  Otherwise, he must work on the first holiday
salary leads to the inevitable conclusion that to be entitled to holiday pay on the second
the ten legal holidays are already included regular holiday (Sec. 10, Rule IV, Book III,
therein. The divisor is arrived at by IRR of LC)
subtracting all Sundays from the total number
of calendar days in a year (Producers Bank Wed Thurs Fri Entitled
of the Philippines v. NLRC, GR No. 100701, to be
March 28, 2001) paid?
Present Rest Day Regular Yes
Rule on Holiday Pay of Teaching Personnel Paid Holiday
Per Lecture Hour Absent Rest Day Regular Yes
Faculty members paid by the hour by virtue of their with pay Holiday
teaching contracts: Absent Rest Day Regular No
1. They are NOT entitled to payment of holiday pay without Holiday
because they are paid only for work actually done. pay
Since regular holidays are known to both school Present Special Regular Yes
and faculty members as “no class days”, certainly Day Holiday
the latter do not expect payment for said unworked Absent Special Regular Yes
days, and this was clearly in their minds when they with pay Day Holiday
entered into the teaching contracts. Absent Special Regular No
2. They are however entitled to their regular hourly without Day Holiday
rate on days declared as special holidays or when Pay
classes are called of or shortened on account of
typhoons, floods, rallies, and the like because the
Successive Holiday Rule
faculty member, although forced to take a rest,
WED MAUNDY GOOD ENTITLED
does not earn what he should earn on that day.
THURS FRIDAY TO BE
(Jose Rizal College v. NLRC, GR No. L-65482
PAID?
December 1, 1987)
Present Regular Regular Yes –
Double Holiday Pay Holiday Holiday Both
(i.e. Araw ng Kagitingan and Good Friday falls on same Absent Regular Regular Yes –
day) with Pay Holiday Holiday Both
1. 200% of the basic wage Absent Regular Regular No –
a. entitled even if said holiday is unworked without Holiday Holiday Both
pay
Absent Worked Regular YES –
without Holiday But only to
pay the holiday
pay on
Friday
Effects of Business Closure on Holiday Pay
1. In case of temporary or periodic shutdown and
temporary cessation of work of an
establishment, the regular holidays falling within
the period shall be compensated.
2. The regular holiday during the cessation of
operation of an enterprise due to business
reverses as authorized by the Secretary of
Labor may not be paid by the employer (Sec. 7,
Rule IV, Book III, IRR of LC).
Article 95: Right to Service Incentive Leave
Concept of SIL
Five (50 days leave with pay for every employee who
has rendered at least one (1) year of service.
One (1) Year of Service – service within 12 months,
whether continuous or broken, reckoned from the date
the employees started working including authorized
absences and paid regular holidays unless the number
of working days in the establishment, as a matter of
practice or policy or as provided in the employment
contract, is less than 12 months.
SIL Does NOT apply to the following:
1. Already enjoying the said benefits;
2. Already enjoying vacation leave with pay for at
least 5 days; and
3. Employed in establishments regularly
employing less than 10 employees; (Sec. 1,
Rule V, Book III, Rules Implementing the Labor
Code)
Note: Employees engaged on task or contract basis
or paid on purely commission basis are not
automatically exempted from the grant of service
incentive leave unless they fall under the
classification of field personnel. The phrase “other
employees whose performance is unsupervised by
the employer”, in Section 1(D), Rule V, Book III of
the Implementing Rules and Regulations of the
Labor Code, serves as an amplification of the
definition of field personnel under the Labor Code.
(Auto Bus Transport Systems, Inc. v. Bautista, GR
No. 156367, May 16, 2005)
Conversion to Monetary Equivalent
 SIL is COMMUTABLE, i.e., convertible to cash
if not used or exhausted at the end of the year.
The cash equivalent is aimed primarily at
encouraging workers to work continuously and
with dedication to the company.
Note: Basis of conversion shall be the salary rate at
the date of commutation. The availment and
commutation of the service incentive leave benefit
may be on a pro-rata basis )No. VI [C]. DOLE
Handbook on Workers’ statutory Monetary benefit).
 An employee, who is illegally dismissed, is
entitled to service incentive leave benefits
computed one year from the date she started
working until the date of her actual reinstatement.
(Imbuido v. NLRC, GR No. 114734 March 31,
2000)
 Article 291 of the Labor Code is not a prescription
of a period of time for the computation of money
claims but is a prescription of filing an option
upon monetary claims from the time the cause of
action accrued. The employee may use his
service incentive leave benefits as leave days of
he may collect its monetary value. To limit the
award to three years is to unduly restrict such
right. (Fernandez v. NLRC, GR No. 105892,
January 28, 1998)
 PART-TIME WORKERS are entitled to the full
benefit of the yearly 5-day SIL. The reason is that
the provisions of Art. 95 speak of the number of
months in a year for entitlement to said benefits
(Bureau of Working Conditions Advisory Opinion
to Phil. Integrated Exporters, Inc.)
 As to PIECE-RATE WORKERS, they are divided
into two:
1. Piece-rate workers working inside the
premises of the employer and thus are
under the direct supervision of the
employer are entitled to SIL;
2. Piece-rate workers working outside the
premises of the employer whose hours
spent in the performance of their work
cannot be ascertained with reasonable
certainty and thus are not under the
direct supervision of the employer are not
entitled to SIL (Labor Congress of the
Philippines v. NLRC).
Employees with Salaries Above Minimum Wage
The difference between the minimum wage and the actual
salary received by the employees cannot be deemed as
their 13th month pay and service incentive leave pay as
such difference is not equivalent to or of the same import
as the said benefits contemplated by law. (JPL Marketing
Promotions v. Court of Appeals, GR No. 151966, July 8,
2005)
 Note: Unutilized parental leave is not convertible to
Vacation and Sick Leave cash unless otherwise agreed. Non-compliance
Not statutorily required, matter of MANAGEMENT with the law may make the employer liable for
DISCRETION or a product of collective bargaining damages (Azucena, 2007).
agreement.
Battered Woman Leave (R.A. No. 9262 – Anti
General Rule: Benefits are non-cumulative and non- Violence Against Women and Their Children Act
commutative; must be enjoyed by the employee within 1 of 2004)
year, otherwise, they are considered waived or forfeited.
A female employee who is a victim of violence
Exception: when the labor contract of the established (physical, sexual or psychological) is entitled to a
practice of the employer provides otherwise. paid leave of TEN DAYS in addition to other paid
leave. The leave is extensible when the necessity
arises. The employee has to submit a certification
from the punong barangay, kagawad, prosecutor or
clerk of court that an action under R.A. No. 9262
has been filed and is pending.
SIL VACATION/ SICK LEAVE
Mandatory: legally Voluntary grant results Maternity and Paternity Leave (See discussion
required under Art. 95, LC from: employer’s under SSS, Paternity Leave Act and Art. 133).
discretionary policy or from
CBA Article 96: Service Charges
Intended to alleviate the Intended to afford a laborer
economic condition of the a chance to get a much Concept
workers for it acts as needed rest to replenish All service charges collected by hotels, restaurants
replacement for regular his worn out energies and and similar establishment shall be distributed as
income that would not be acquire new vitality to follows:
earned during such enable him to efficiently 1. 85% for all covered employees to be equally
instance perform his duties and not distributed among them
merely to give him 2. 15% for disposition by management to answer
additional salary for losses and breakages and distribution to
Can not be waived Must be demanded in its employees receiving more than P 2,000 a
opportune time, otherwise, month at the discretion of the management in
silence would equate to the latter case.
waiver, same being a mere
concession or act of grace Coverage
of employer  Apply only to hotels, restaurants similar
Commutable Not commutable establishment collecting service charges.
 All employees are covered, regardless
of their position, designation, employment
Parental (Solo Parent) Leave status, irrespective of the method by which their
 Not more than SEVEN (7) WORKING DAYS wages are paid EXCEPT managerial
EVERY YEAR is granted to any solo parent employees (Secs. 1& 2, Rule VI, Book III, IRR
employee who has rendered service of at least one of LC).
(1) year.
Distribution
 No employer shall discriminate against any solo The shares referred to herein shall be distributed
parent employee with respect to terms and and paid to employees not less than once every 2
conditions of employment on account of his/her weeks or twice a month at intervals not exceeding
status. 16 days. (Sec. 4)

 A change in the status of circumstance of the Rule in case of Abolition

parent claiming benefits under this Act, such that
he/she is no longer left alone with the responsibility
of parenthood, shall terminate his/her eligibility for
these benefits (Solo Parents Welfare Act of 2000)
 In case the service charge is abolished, he
share of the covered employees shall be
considered integrated in their wages.
 The basis of the amount to be integrated
shall be the average share of each
employee for the past 12 months
 immediately preceding the abolition or equal pay for equal work applies whether the
withdrawal of such charges. (Sec 5) employee is hired locally or abroad (Int’l. School
Alliance of Educators v. Hon. Quisumbing, GR No.
Pooled Tips 128845, June 1, 2000).
Where an establishment does not collect service
charges but has a practice or policy of pooling tips WAGE SALARY
given voluntarily by its customers, the pooled tips Compensation for Paid to white collar
should be monitored, accounted for and distributed skilled or unskilled workers and denote a
in the same manner as the service charges (DOLE manual labor higher grade of
Handbook on Workers; Statutory Monetary employment
Benefits, 2006 Ed.) Under Article 1708 of It is not exempt from
the Civil Code, it is not execution, garnishment
TITLE TWO: WAGES subject to execution, or attachment (Gaa v.
garnishment or CA, GR No. L-44169,
Chapter 1: Preliminary Matters attachment except for December 3, 1985).
debts related to food,
Article 97: Definitions clothing, shelter and
medicines.
Agriculture - includes farming in all its branches, and
among other things, includes the cultivation and Wage or Salary includes:
tillage of soil, dairying, the production, cultivation, 1. Commission
growing and harvesting of any agricultural and 2. Facilities
horticultural commodities, the raising of livestock or 3. Commodities/ Supplements
poultry, and any practices performed by a farmer on a
farm as an incident to or in conjunction with such Commission – direct remuneration received by an
farming operations, but does not include the agent, salesman, executor, broker, or trustee
manufacturing or processing of sugar, coconuts, calculated as a percentage on the amount of his
abaca, tobacco, pineapples or other farm products. transactions or on the profit to the principal.

Wage – the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task,
piece or commission basis or other method or
calculating the same, which is payable by an
employer to an employee under a written or unwritten
contract of employment for work done or to be done
or for services rendered or to be rendered and
includes the fair and reasonable value, as determined
by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the
employee.
Fair and Reasonable Value – shall not include any
profit to the employer or to any person affiliated with
the employer.
Fair Day’s Wage for a Fair Day’s Labor (“No work,
No Pay Principle”)
If there is no work performed by the employee, there
can be no wage or pay unless the laborer was able,
willing, and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally
prevented from working (Aklan Electric Coop. V.
NLRC GR No. 129246, January 25, 2000).
Facilities – shall include all articles or services for
the benefit of the employee or his family but shall
not include tools of the trade or articles or services
primarily for the benefit of the employer or
necessary to the conduct of the employer’s
business.
Requirements for Deducting Amount of
Facilities
1. Proof must be shown that such facilities are
customarily furnished by the trade;
2. The provision of deductible facilities must be
voluntarily accepted in writing by the employee;
and
3. The facilities must be charged at fair and
reasonable value (Mabeza v. NLRC, GR No,
118506, April 18, 1997).
Supplements – constitute extra remuneration or
special privileges or benefits given to or received by
the laborers over and above their ordinary earnings
or wages.

Equal Pay for Equal Work

Employees holding the same position and rank are FACILITIES SUPPLEMENTS
presumed to be performing equal work. The rule
 Items of expense Constitute extra
necessary for the remuneration or special Minimum Wage – lowest basic wage rate fixed by law
laborer’s and his family privileges or benefits that an employer can pay his employees.
existence and given to or received by
Ability to Pay Immaterial
subsistence the laborers over and
The employer cannot exempt himself from liability to
above their ordinary
pay minimum wages because of poor financial condition
earnings and wages
of the company; the payment of minimum wages is not
Part of the wage Independent of the
dependent on the employer’s ability to pay (De Racho v.
wage
Municipality of Iligan, GR No. L-23542, January 2,
Deductible from the Not wage deductible
1968).
wage
Estoppel Not Applicable
 Foods or snacks or other convenience The acceptance by an employee of the wages paid him
provided by the employer are deemed without objection does not give rise to estoppel
supplements if they are granted for the precluding him from suing for the difference between
convenience of the employer. The criterion is the amount he should have received pursuant to a valid
making a distinction between a supplement minimum wage law where it does not appear that the
and a facility is its purpose. (Mayon hotel & employer changed his position to his own prejudice.
Restaurant v. Adana, GR No. 157634, May
16, 2005) DAILY MINIMUM WAGE RATES
National Capital Region (NCR) a/ Per Wage Order
Gratuity – something given freely or without No. NCR –14 Effective 14 June 2008
recompense to reward employees who have rendered Sector/ Minimu Basic Cost of New
satisfactory and efficient service to the company. It Industry m Wage Wage Living Minimu
does not form part of the wage. under Increase Allowan m Wage
Wage Under ce under Rates
Allowances – amounts of money, which are not part Order W.O. W.O.
of wages, but are given in consideration of certain No. No. NCR 14
expenses like transportation and representation. NCR 13 NCR 14
Non- P 362 P 15 P5 P 382
Article 98: Application Title Agriculture
Agriculture P 325 P 15 P5 P 345
General Rules: Title on Wages applies to all (Plantation
employees and Non
Exceptions: Plantation
1. Farm tenancy or leasehold; Private P 325 P 15 P5 P 345
2. Household or domestic helpers; Hospitals
3. Homeworkers engaged in needle-work with bed
4. Workers engaged in any establishment duly capacity of
registered with the National Cottage Industry 100 or less
Development Authority (NACIDA), and Retail/Service P 325 P 15 P5 P 345
5. Workers in duly registered cooperatives when so Establishment
recommended by the Bureau of Cooperative s employing
Development upon approval by the Sec. of Labor 15 workers or
6. Workers of a Barangay, Micro Business less
enterprise (R.A. 9178, November 13, 2002) Manufacturin P 325 P 15 P5 P 345
g
Note: For a retail/service establishment to be exempted establishment
from the coverage of the minimum wage law, it must be s regularly
shown that the establishment is regularly employing not employing
more than ten (10) workers and had applied for less than 10
exemptions with and as determined by the appropriate workers
Regional Board. (C. Planas Commercial v. NLRC, GR
No. 144619, November 11, 2005) Note: To be integrated into the basic wage on 28 August
Chapter 2: Minimum Wage Rates 2008 (www.dole.gov.ph).

Article 99: Minimum Wage Rates

  The employer is under no obligation to
implement a Wage Order across the board.
Only to those employees receiving salaries
below the prescribed minimum wage are
entitled to the wage increase provided
therein. (Pag-Asa Steel Works, Inc. v. Court
of Appeals, GR. No. 166647, March 31,
2006)
Article 100: Prohibition Against Elimination or
Diminution of Benefits
The Non-Diminution
General Rule: Nothing in the Labor Code shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed
at the time of promulgation of this Code.
 Benefits being given to employees cannot
be taken back or reduced unilaterally by the
employer because the benefit has become
part of the employment contract, written or
unwritten.
Exception: To correct an error, otherwise, if the error is
left uncorrected for a reasonable period of time, it ripens
into a company policy and employees can demand for it
as a matter of right.
When Applicable
The rule is applicable if is shown that the grant of the
benefit is:
1. based on an express policy, or
2. has ripened into practice over a long period of
time, and the practice is consistent and
deliberate, and is not due to an error in the
construction/application of a doubtful or difficult
question of law.
Bonus – amount granted and paid to an employee
for his industry and loyalty which contributed to the
success of the employer’s business and made
possible the realization of profits.
General Rule: Bonus is not demandable as a
matter of right. It is a management prerogative,
given in addition to what is ordinarily received by or
strictly due to the recipient (Producers Bank v.
NLRC, GR No. 100701, March 28, 2001).
Exceptions:
1. When it was promised to be given without any
conditions imposed for its payment in which
case it is deemed part of the wage;
2. When it has ripened into practice (Marcos v.
NLRC, GR No. 111744, September 8, 1995).
13th Month Pay or Its Equivalent (See discussion
under 13th Month Pay Law)
 Additional income based on wage
required by P.D. 851 which is
Note: For employees receiving regular wage, the term
“basic salary” does not mean the amount actually
received by an employee, but 1/12 of their standard
monthly wage multiplied by the length of their service
within a given calendar year. The payments for sick,
vacation, and maternity leaves, night differentials,
holiday pay, and premiums for work done on rest
days and special holidays are excluded from the
computation of “basic salary”. (Honda Phils., Inc. v.
Samahan ng Malayang Manggagawa sa Honda, GR
No. 145561, June 15, 2005)
 Every employee receiving a commission
in addition to a fixed or guaranteed wage or
salary is entitled to a thirteenth month pay, which
must be 1/12 of their total earnings during the
calendar year. (Philippine Agricultural Commercial
and Industrial Workers Union v. NLRC, GR No.
107994, August 14, 1995)
 May be given anytime but not
later than December 24
 “Its equivalent”: Mid-year
bonus and Christmas bonus.
 A statutory obligation, granted
to covered employees, hence, demandable
as a matter of right
 ONLY rank and file employees
are entitled to the payment of thirteenth
month pay as a matter of right. (House of
Sara Lee v. Rey, GR No. 149013, August 31,
2006).
Rationale
To protect the level of real wages from the ravages of
worldwide inflation; it was enacted on December 16,
1975 after it was noted that there had been no
increase in the minimum wage since 1970 and the
Christmas season was an opportune time for society
to show its concern for the plight of the working
masses. (PD 851)
Pro-Rated 13th Month Pay
An employee who has resigned or whose services
were terminated at any time before the payment of
the 13th month pay is entitled to this monetary benefit
in proportion to the length of the time he worked
during the year reckoned from the time of resignation
or termination from service.
Commissions in Relation to 13th Month Pay
1. The salesmen’s commissions, comprising a pre-
determined percent of the selling price of the
goods sold by each salesman, were properly
INCLUDED in the term “basic salary” for
 purposes of computing their 13 th month pay.
(Philippine Duplicators, Inc. v NLRC, GR No.
110068, February 15, 1995)
2. The so-called commissions “paid to or received
by medical representatives of Boie-Takeda
Chemicals or by the rank and file employees of
Philippine Fuji Xerox were excluded from the term
“basic salary” because these were paid as
“PRODUCTIVITY BONUSES”. Such bonuses
closely resemble profit-sharing payments and
have no clear, direct, necessary relation to the
amount of work actually done by each individual
employee. (Boie-Takeda Chemicals, Inc. v De La
Serna, GR No. 92147, December 10, 1993).
Productivity Incentives
1. Kind of bonus that comes from productivity gain
2. Aims to institute productivity at company level
and the sharing of productivity gain between
employers and employees; and
3. Nature of salary bonus is proportionate to
increases in current productivity (Productivity
Incentives Act of 1990, RA 6974)
Article 101: Payment By Results
Workers Paid in Piece-Rate Basis
Those who are paid a standard amount for every
piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent
in producing the same.
Categories of Piece-Rate Workers
A. As to Presence of Control
1. Piece rate worker – works directly under the
supervision of their employer.
2. Pakiaw or Takay – works away from the
employer’s work premises and are not directly
supervised by the employer.
B. As to Rate of Payment
1. Those paid piece rates as prescribed in Piece
Rate Orders by the DOLE.
2. Those paid output rates which are prescribed by
the employer and are not yet approved by the
DOLE.
Benefits Payable to Piece-Rate Workers Whose
Work is Directly Supervised by the Employer
1. Applicable statutory minimum daily rate
2. Yearly service incentive leave of five days with
pay
3. Night shift differential
4. Holiday pay
5. Meal and rest periods
6. Overtime pay (conditional)
7. Premium pay (conditional)
8. 13th month pay; and
9. other benefits granted by law, individual or
collective bargaining agreements or company
policy or practice
Note: The rules implementing the Labor Code on
NSD and SIL DO NOT apply to employees whose
time and performance is unsupervised by the
employers, including those who are engaged on task
or contract basis, purely commission or those who are
paid a fix amount for performing work irrespective of
the time consumed in the performance thereof.
Chapter 3: Payment of Wages
Article 102: Forms of Payment
Employer CANNOT Pay His Workers by means of:
1. Promissory notes;
2. Vouchers
3. Coupons
4. Tokens
5. Tickets
6. Chits; or
7. Any object other than legal tender.
Note: Even when expressly requested by the
employee
General Rule: Payment by legal tender
Exceptions: Payment by check or money order may
be allowed if the same is:
1. Customary on the date of effectivity of the LC;
2. Necessary because of special circumstances as
determined by the Secretary of Labor;
3. Stipulated in the CBA; or
4. Where the following conditions are met:
a. There is a bank or other facility for
encashment within a radius of 1 kilometer from
the workplace;
b. The employer or any of his agents or
representatives does not receive any pecuniary
benefit directly or indirectly from the
arrangement.
c. The employees are given reasonable
time during banking hours to withdraw their
wages from the bank which time shall be
considered as compensable hours worked if
done during working hours; and
d. The payment by check is with the written
consent of the employees concerned if there is
no CBA authorizing the payment of wages by
bank checks (National Federation of Labor v.
CA, October 19,2004)
Article 103: Time of Payment
 General Rule: if done during working hours, shall be considered
1. At least once every two weeks; or as compensable hours worked;
2. Twice a month at intervals not exceeding 16 3. The system shall allow the employee to receive
days. their wage within the period and in the amount
prescribed under the labor code;
Exceptions: 4. There is a bank or ATM facility within a radius of 1
1. In case of force majeure or other circumstances km. From the workplace;
beyond the employer’s control, payment must be 5. Upon the request
made immediately after such occurrence has
ceased.
2. if engaged to perform a task which cannot be
completed in 2 weeks and in the absence of CBA
a. Payment shall be made at intervals not
exceeding 16 days in proportion to the
amount of work completed.
b. That final settlement is made upon
completion of the work.

Article 104: Place of Payment

General Rule: At or near the place of undertaking.

Exceptions: (DFA)
1. When payment cannot be effected at or near the
place of work by reason of deterioration of peace
and order conditions, or by reason of actual or
impending emergencies caused by fire, flood or
other calamity rendering payment thereat
impossible;
2. When the employer provides for free
transportation to the employees back and forth;
and
3. Under any other analogous circumstances.

Absolute Prohibition: No employer shall pay his

employees in any bar, night or day club, drinking
establishment, massage clinic, dance hall, or other similar
places or in places where games are played with stakes
of money or things representing money except in the case
of persons employed in said places. (Sec. 4, Rule VIII,
Book III, Rules Implementing the Labor Code)

Requisites for Payment Thru Banks

1. There must be written permission of the majority
of the employees concerned in an establishment;
2. The establishment must have 25 or more
employees; and
3. The establishment must be located within one
kilometer radius to the bank (Sec. 7, Wage
Rationalization Act)

Note: Payment through an ATM is allowed, provided the

following conditions are met:
1. The ATM system of payment is with the written
consent of the employee concerned;
2. The employees are given reasonable time to
withdraw their wages from the bank facility which,

Test of Compensability
 For increased risk theory to apply in
compensation cases, the claimant must adduce
reasonable proof of connection between his
work and the risk of contracting the disease, or
that the risk of contracting the disease was
increased by the claimant’s working conditions.
 What the law requires is reasonable work
connection and not a direct causal relation. It is
sufficient that the hypothesis on which the
workmen’s claim is based is probable since
probability, not certainty, is the touchstone
(Castor-Garupa v. Employees’ Compensation
Commission, GR No. 158268, April 12, 2006).
Note: Where the cause of the disease is unknown,
the theory of increased risk becomes applicable
(Panotes v. ECC, GR No. L-64802, September 23,
1985).
Death – loss of life resulting from injury or sickness.
Disability – loss or impairment of a physical or
mental function resulting from injury or sickness.
Exceptions:
1. Ingress-Egress/ Proximity Rule – when the
injury is sustained when the employee is
proceeding to or from his work in the premises
of the employer, the injury is compensable;
2. Going to or coming from work – when the injury
is sustained when the employee is proceeding
to or from his work in the premises of the
employer, the injury is compensable;
a. The act of the employee of going to, or
coming from, the workplace, must have
been a continuing act, that is, he had not
been diverted therefrom by any other
activity, and he had departed from his usual
route to, or from, his workplace;
b. An employee on a special errand that must
have been official and in connection with his
work;
Extra Premises Rule (the Shuttle Bus Rule) – the
company which provides the means of
transportation in going to or coming from the place
of work is liable to the injury sustained by the
employees while on board said means of
transportation;
Special Errand Rule – injury sustained outside the
company premises is compensable if his being out
is covered by an office order or a locator slip or a
pass for official business;
Dual Purpose Doctrine – allows compensation
where a special trip would have to be made for the
employer if the employee had not combined the
service for the employer with his going or coming
trip;
Special Engagement Rule – covers field trips,
outings, intramurals and picnics when initiated and
sanctioned by the employer; and
Positional and Local Risks Doctrine – if an
employee by reason of his duties is exposed to a
special or peculiar danger from the elements, that
is, one greater than that to which other persons in
the community are exposed and an unexpected
injury occurs, the injury is compensable.
Chapter 2: Coverage and Liability
Article 168: Compulsory Coverage
 Employees’ Compensation Law (ECL) applies
to all employers, public or private, and to all
employees, public or private including casual,
emergency, temporary or substitute employees.
 An employee who is not over 60 years of age
and paying contributions to qualify for the
retirement or life insurance benefit administered
by the system shall be subject to compulsory
coverage.
Article 170: Effective Date of Coverage
The employer is covered compulsorily from the first
day of operation and the employee from the first
day of employment.
Article 172 Limitations of Liability
No Compensation if the Injury, Death or
Disability is the Result of the Employee’s
1. Intoxication
2. Willful intention to injure or kill himself or
another
3. Notorious negligence or
4. Otherwise provided by the Labor Code.
Intoxication
Intoxication alone is not sufficient to defeat the
recovery of compensation, when intoxication does
not incapacitate the employee from performing his
functions and duties and from following his
occupation. (Yohanon v. WCC, GR No. L-43641,
August 26, 1977).
Self-Inflicted Injuries and Suicides
General Rule: NO compensation for disability and
death.
Exceptions:
1. By agreement of the parties; and
2. If the suicide/death is caused by work-related or
compensable illness or disease (NAESS
Shipping Phil. V NLRC, GR No. 73441,
September 4, 1987).
Injury or Death in the Course of Assault
Rules:
1. When the injured was the unlawful aggressor,
NOT compensable (Mabuhay Shipping
Services, Inc., et. al v NLRC, et. al., GR No.
94167, January 21, 1991); and
2. When the injured was the victim of the assault
and it occurred in the course of performance of
official functions, compensable (Lentejas v.
ECC, GR No. 89168, May 14, 1991).
Notorious Negligence – deliberate act of the
employee to disregard his own personal safety.
Article 173: Extent of Liability
Rules on Simultaneous Recovery
1. Simultaneous recovery under the Labor Code
and Civil Code cannot be made. The action is
selective and the employee may choose to file
the claim under either. But once the election is
made, the claimant cannot opt for the other
remedy.
2. Simultaneous recovery under the Labor Code
and the SSS can be made (DOJ Opinion No. 8,
Jan. 12, 1990) since P.D. 1921 has lifted the
ban on simultaneous recovery.
State Insurance Fund
All covered employees are required to remit to a
common fund a monthly contribution equivalent to
1% of the monthly salary credit of every covered
employee. The employee pays no contribution to
the fund. Any agreement to the contrary is
prohibited.
Article 174: Liability of Third Parties
Third Party – one upon whom no liability could
entail under the law; one who is not an employer of
the injured employee or stranger to the employment
relationship and who may be held liable at common
law for his negligence which results in an injury to
the employee.
Legal Subrogation
When the disability or death is caused by
circumstances creating a legal liability against a
third party, the disabled employee or the
dependents in case of his death shall be paid by
the System (GSIS or SSS, as the case may be). In
case the benefit is paid, the system shall be
subrogated to the rights of the disabled employee
or the dependents, in case of his death, in
accordance with the general law.
Excessive Recovery
Where the system (GSIS or SSS, as the case may
be) recovers from such third party damages in
excess of those paid or allowed under the law, such
excess shall be delivered to the disabled employee
or other persons entitled thereto, after deducting
the cost of proceedings and expenses of the
System.
Double Recovery
The injured employee cannot claim payment twice
for the same injury from both the third party and the
GSIS and SSS, as the case may be (Alba v.
Bulaong, GR Nos. L-10308 and L-10385-8, April Chapter 5: Medical Benefits
30, 1957). 1. Services
a. Medical services, appliances and supplies
Chapter 3: Administration (Art. 185 and Rule VIII, ECC Rules);
b. Rehabilitation services (Art. 190 and Rule
Article 176: Employee’s Compensation IX, ECC Rules);
Commission 2. Cash Income Benefit or Pension due to:
a. Temporary total disability (Art. 191 and Rule
Composition X, ECC Rules);
1. Secretary of DOLE b. Permanent total disability (Art. 192 and Rule
2. SSS Administrator XI, ECC Rules);
3. GSIS President and General Manager c. Permanent partial disability (Art 193 and
4. ECC Executive Director Rule XII, ECC Rules);
5. Medicare Chairman d. Death (Art 194 and Rule XIII, ECC Rules);
6. Representative of Employers 3. Funeral Benefit (Art. 194[d] and Rule XIV, ECC
7. Representative of Employees Rules).

Function
ECC is the policymaking and appeal body of the Chapter 6: Disability Benefits
Employee’s Compensation Program.
Disability Categories
1. Temporary Total – if a result of the injury or
Thrusts of the ECC sickness, the employee is unable to perform any
1. Preventive – to minimize and control hazards in gainful occupation for a continuous period not
the working environment exceeding 120 days.
2. Compensative – through GSIS or SSS, it pays
benefits to government and private sector  The period covered by any relapse he suffers,
workers who suffer work-connected or recurrence of his illness which results in
contingencies disability and is determined to be
3. Curative – it takes responsibility for the compensable shall be considered
treatment of sickness or injury that a worker independent of, and separate from, the period
may suffer in line of duty and the rehabilitation covered by the original disability in the
of those who are disabled. computation of his income benefit for
temporary and total disability (Sec 2[b]. Rule
Chapter 4: Contributions X, Amended Rules on Employees’
Compensation).
Article 183: Employer’s Contribution

Beginning as of the last day of the month when an Period of Entitlement

employee’s compulsory coverage takes effect and
every month thereafter during his employment, his
employer shall prepare to remit to the system a
contribution equivalent to 1% of his monthly salary
credit.
Article 184: Government Guarantee
The government guarantees the benefits
prescribed under Title II, and accepts general
responsibility for the solvency of the State
Insurance Fund.
 The income benefit shall be paid beginning on
the first day of such disability. If caused by an
injury or sickness it shall not be paid longer
than 120 consecutive days except where such
injury or sickness still requires medical
attendance beyond 120 days but not to
exceed 240 days from onset of disability, in
which case benefit for temporary total
disability shall be paid. However, the system
may declare the total and permanent status at
any time after 120 days of continuous
temporary total disability (Azucena, 2007).
Relapse
 After an employee has fully recovered as duly
certified, the period covered by any relapse,
which results in disability and is determined to
be compensable, shall be considered seprate
from the period covered by the original
disability (ICC Resolution No. 1029, Aug. 10,
1978).
2. Permanent Total – if as a result of the injury or
sickness the employee is unable to perform any
gainful occupation for a continuous period
exceeding 120 days.
 The following disabilities shall be considered
permanent total.
1. Temporary total disability for more thatn 120
days except as may otherwise be provided.
2. Complete loss of sight of both eyes
3. Loss of two limbs at or above the ankle or
wrist.
4. Permanent complete paralysis of two limbs
5. Brain injury resulting in incurable imbecility or
insanity; and
6. Cases as determined by GSIS or SSS, as the
case may be, and approved by the
Commission.
Period of Entitlement
 The full monthly income benefit shall be paid
for all compensable months of disability.
Suspension of Income Benefits
 Monthly income benefits can be suspended
under ANY of the following conditions:
1. Failure of the employee to present himself for
examination at least once a year upon notice
by the system;
2. Failure to submit a quarterly medical report
certified by the attending physician;
3. Complete or full recovery from his permanent
recovery; or
4. Upon being gainfully employed (Sec. 2, Rule
XI, Amended Rules on Employee’s
Compensation).
3. Permanent Partial – if as a result of the injury
or sickness, the employee suffers a permanent
partial loss of the use of any part of his body
(Abaya v. ECC, GR No. 64255, August 1989)
Effect of Gainful Employment
For purpose of entitlement to income benefits for
permanent partial disability, a covered employee
shall continue to receive the benefits provided
thereunder even if he is gainfully employed and
receiving his wages or salary (Sec 1[b], Rule XII,
Amended Rules on Employees’ Compensation).
Note: Benefits due to an employee due to work-
related sickness shall be provided until he
becomes gainfully employed, or until his recovery,
or death (Manioso v. GSIS, GR No. 148323, April
29, 2005).
Distinguished from Permanent Total
The test of whether an employee suffers from
“permanent total disability” is a showing of the
capacity of the employee to continue performing
his work notwithstanding the disability he incurred
(Vicente v. ECC, GR No. 85024, January 23,
1991).
Earning Capacity May Still Be “Impaired”
even if earning is Higher After the Injury.
Employee who receives higher wages after an
injury than what he earned before may still have
suffered an impairment of earning capacity (149
A.L.R. 438).
Chapter 7: Death Benefits
Death benefits
The System shall pay to the primary beneficiaries
upon the death of the covered employee an
amount equal to his monthly income benefit, plus
ten percent (10%) thereof for each dependent
child, but not exceeding five (5), beginning with
the youngest and without substitution. The
income benefit shall be guaranteed for five (5)
years.
Dependency – does not mean absolute
dependency for the necessities of life, but rather,
that the plaintiff looked up to and relied on the
contribution of the decedent in whole or in part as
a means of supporting and maintaining herself in
accordance with her station in life. A person may
be dependent although able to maintain herself
without any assistance from the decedent
 (Castillo v. Cadwallader, GR No. 41261,
September 26, 1934).
Dependents
1. Legitimate, legitimated, and legally adopted or
acknowledged natural child who is unmarried,
not gainfully employed and not over 21 years
of age or over 21 years of age provided that
he is incapable of self-support due to a
physical or mental defect which is congenital
or acquired during minority.
2. Legitimate spouse living with the employee;
and
3. Parents of said employee wholly dependent
upon him for regular support.
Benefits
1. For life to the primary beneficiaries,
guaranteed for five years.
2. For not more than 60 months to the
secondary beneficiaries; and
3. In no case shall the total benefit be less than
P 15,000.
Beneficiaries
Beneficiaries shall be determined at the time of the
employee’s death (Sec. 1[a], Rule XV, Amended
Rules on Employees’ Compensation)
A. Primary Beneficiaries
1. Dependent spouse until he or she
remarries; and
2. Dependent children (legitimate, legitimated,
natural born or legally adopted).
B. Secondary Beneficiaries
1. Illegitimate children and legitimate
descendents; and
2. Parents, grandparents and grand and
grandchildren.
 Primary beneficiaries shall have priority claim to
death benefits over secondary beneficiaries.
Whenever there are primary beneficiaries, no
death benefit shall be paid to secondary
beneficiaries.
 If there are no primary beneficiaries at the time
of death, the death benefit shall be paid to his
secondary beneficiaries.
 If the deceased employee has no beneficiaries
at the time of his death, the death benefit shall
accrue to the Employees’ Compensation Fund
(Sec. 2, Rule XV, Amended Rules on
Employees’ Compensation).
Persons Entitled to Funeral Benefits
1. Surviving spouse
2. Legitimate child who spent for funeral
services; or
3. Any other person who can show
inconvertible proof of having borne the
funeral expenses (Rule XI, Amended Rules
on Employees’ Compensation).
Chapter 8: Provisions Common to Income
Benefits
Article 201: Prescriptive Period
 Despite the three-year prescriptive period
expressly provided in Art. 201, a compensation
claim may be filed beyond this but before the
lapse of the tenth year from accrual of the
cause of action, applying Art. 1144 of the Civil
Code (Manila Railroad Co. v. Perez, GR No. L-
21071, June 29, 1965).
 The three years have to be counted from the
time the employee lost his earning capacity not
from the time the illness was discovered (ECC
v. Sanico GR No. 134028, December 17, 1999).
Chapter 9: Records, Reports and Penal
Provisions
Article 206: Notice of Sickness, Injury or Death
General Rule: Notice of sickness, injury or death
shall be given to the employer by the employee or
by his dependents or anybody on his behalf within
5 days from the occurrence of the contingency.
Exceptions:
No Notice shall be required if:
1. The contingency is known to the employer
of his agents or representatives; or
2. The employer suffered no damage by
reason of such delay or lack of notice
(Central Azucarrera Don Pedro v. WCC, GR
No. 29670, October 9, 1987).
TITLE THREE: MEDICARE
Article 209: PHIC
The Philippines Health Insurance Corporation
created by R.A. 7875 has taken over the functions
of the Philippine Medical Care Commission.
TITLE FOUR: ADULT EDUCATION
Article 210: Adult Education
Employers shall render assistance in the adult
education programs for their employees as
prescribed by the DOLE.
LABOR RELATIONS
Labor
BOOK FIVE. LABOR RELATIONS
TITLE ONE: POLICY AND DEFINITIONS
Chapter 1: General Provisions
Article 211:Declaration of Policy
Labor Relations – the interactions between the
employer and employees and their
representatives and the mechanism by which the
standards and other terms and conditions of
employment are negotiated, adjusted and
enforced. (The Labor Code with Comments and
Cases 2004, Azucena, vol. II, p.8
Labor Relations Law – define the status, rights,
and duties and the institutional mechanisms that
govern the individual and collective interactions of
employers, employees or their representatives.
(Everyone’s Labor Code, Azucena, 2007, p. 4)
Note: Absent an employer-employee relation,
there is no labor relation to speak of. If there is no
Er-Ee relationship between the parties, there is
no basis for organizing for purposes of collective
bargaining.
 Collective bargaining process if possible only
when there is a labor organization, i.e.
1. labor union; or
2. employee association
 Labor relations policy under the Labor Code is
embodied in Section 3, Article XIII of the 1987
Constitution which guarantees to all workers
their right, among others, to:
1. Self-organization;
2. Collective bargaining and negotiations;
3. Peaceful and concerted activities including
the right to strike in accordance with law; and
4. Participate in policy and decision-making
processes affecting their rights and benefits
as may be provided by law.
Parties to Labor Relations Cases
1. Employee’s organization
2. Management; and
3. The public – always to be considered in
Law dispute between labor and capital, and it has
been held that the rights of the general public
are paramount.
4. The state
Note: Employer and employees are ACTIVE
parties while the public and the state are
PASSIVE parties. (Poquiz, 2006, p. 3)
Principle of Non-Oppression – mandates
capital and labor not to act oppressively against
each other or impair the interest and convenience
of the public. The protection to labor clause in the
Constitution is not designed to oppress or destroy
capital (Capili v. NLRC, GR No. 117378, March
26, 1997).
 Article 211 mentioned Conciliation, Mediation
and Voluntary Arbitration which are
considered the alternative modes of
settlement of labor dispute, alternative to the
more adversarial strikes, lock outs or any
mass concerted actions.
Conciliation – process where a disinterested
third party meets with management and labor, at
their request or otherwise, during a labor dispute
or in collective bargaining conferences, and, by
cooling tempers, aids in reaching an agreement.
Mediation – a third party studies each side of the
dispute them makes proposals for the disputants to
consider. But a member cannot make an award or
render a decision.
Arbitration - the submission of a dispute to an
impartial person for determination on the basis of
evidence and arguments of the parties. The arbiter’s
decision or awards is enforceable upon the disputants.
It may voluntary or compulsory.
 For Art. 211 (g), see Art 255 for more discussions.
Chapter 2: Definitions
Article 212: Definitions
Employer – one who employs the service of others,
one for whom employees work and who pays their
wages or salaries (Feati University v. Bautista, GR No.
L-21278 December 27, 1966)
- any person acting in the interest of an employer,
directly or indirectly. The term does not include a labor
organization or any of its officers and agents, EXCEPT
when acting as an employer. The mere fact that
respondent is a labor union does not mean it cannot
be considered an employer for persons who work for
it. Much less should it be exempted from labor laws.
(Bautista v. Inciong, GR No. L-52824, March 16, 1988)
Employee includes:
1.any person in the employ of an employer
2.any individual whose work has ceased as a result of
or in connection with any current labor dispute or
because of any unfair labor practice if he has not
obtained any other substantially equivalent and regular
employment
3.one who has been dismissed from work but the
legality of the dismissal is being contested in a forum
of appropriate jurisdiction (D.O. No. 40-03, March 15,
2003).
 The term shall not be limited to the employees of a
particular employer unless the code explicitly states.
Types of Employees under the Labor Code
1.Managerial
2.Supervisory
3.Rank-and-file
Note: the distinction of term “managerial employee”
under Labor Standards Laws and Labor Relations
Laws. See Art. 245.
Labor Organization – any union or association of
employees which exists in whole or in part for the
purpose of collective bargaining with employers
concerning terms and conditions of employment.
Legitimate Labor Organization – any labor
organization which is duly registered with DOLE; the
term includes a local/chapter of the Bureau of Labor
Relations directly chartered by a legitimate federation
or national union which has been duly reported to the
Department in accordance with Section 2, Rule VI,
Book V, IRR of LC of the Rules Implementing the LC
(See notes under Arts. 234 and 242, LC).
Company Union – any labor organization whose
formation, function or administration has been assisted
by any act defined as ULP under the Labor Code.
Bargaining Representative – means a legitimate
labor organization whether or not employed by the
employer.
Labor Dispute – includes any controversy or matter
concerning:
1. terms or conditions of employment; OR
2. association or representation of persons in
negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment.
 Regardless of whether the disputants stand in the
proximate relation of employer and employee.
Test: depends on whether it involves or concerns
terms, conditions of employment, or representation
(SMC Employees Union –PTGWO v. Bersamira, GR
No. 87700. June 13, 1990).
 Even the question of employer-employee (E-E)
relationship can be considered a “labor dispute”
Types of Labor Disputes
1. Labor Standard Disputes (ComBeWo)
a. Compensation (e.g. underpayment of
minimum wage, stringent output quota;
illegal pay deductions);
b. Benefits (e.g. nonpayment of holiday pay,
overtime pay or other benefits); and
c. Working conditions (e.g. unrectified work
hazards
2. Labor Relations Disputes (ORB-CE)
a. Organizational right dispute/unfair labor
practice (e.g. coercion restraint or
interference in unionization efforts; reprisal
or discrimination due to union activities;
company unionism);
b. Representation disputes (e.g.
determination of the collective bargaining
unit; ULP strike; uncertainty as to
determination of the sole and exclusive
bargaining agent of the employees in an
appropriate bargaining unit which is the
majority union);
c. Bargaining disputes (e.g. refusal to
bargain (ULP); bargaining deadlock;
economic strike or lockout);
d. Contract administration or personnel
policy disputes (e.g. noncompliance with
CBA provisions (ULP, if gross non-
compliance with economic provisions);
disregard of grievance machinery;
violation of no strike/ no lockout
agreement); and
e. Employment tenure disputes (e.g. non-
regularization of employees; illegal
termination; non-issuance of employment
contract).
Parties to a Dispute
1. Primary Parties
a. Employer
b. Employees
c. Union
2. Secondary Parties
a. Voluntary Arbitrator
b. Agencies of Dole (BLR, VAC)
c. NLRC
d. Secretary of Labor
e. Office of the President
Managerial Employee - one who is vested with powers
or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees.
Supervisory Employee – those who, in the interest of
the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely
routinary or clerical in nature but requires independent
judgment.
 All employees not falling within any of the above
definitions are rank-and-file employees.
Voluntary Arbitrator
1. any person accredited by the Board as such; or
2. any person named or designated in the CBA by
the parties to act as their Voluntary Arbitrator; or
3. one chosen with or without the assistance of the
National Conciliation and Mediation Board
pursuant to a selection procedure agreed upon
in the CBA; or
4. any official that may be authorized by the
Secretary of Labor to act as Voluntary Arbitrator
upon the written request and agreement of the
parties to a labor dispute.
Unfair Labor Dispute - any unfair labor practice as
expressly defined by the Code.
 Any act intended or directed to weaken or defeat
the worker’s right to self-organize or to engage
in lawful concerted activities (Azucena, 2004)
TITLE TWO: NATIONAL LABOR RELATIONS
COMMISSION
Chapter 1: Creation and Composition
Article 213: National Labor Relations
Commission (as am by R.A. 9347, July 27, 2006)
NLRC – an administrative body with quasi-judicial
functions and the principal government agency that
hears and decides labor-management disputes;
attached to the DOLE for program and policy
coordination only.
Composition
1. One (1) Chairman; and
2. 23 Members
 Eight (8) members each, shall be chosen
only from among the nominees of the
workers and employers organizations,
respectively.
 The Chairman and the Seven (7) remaining
members shall come from the public sector,
with the latter to be chosen PREFERABLY
from among the incumbent labor arbiters.
  Upon assumption into office, the members
nominated by the workers and employers
organization shall divest themselves of any
affiliation with or interest in the federation or
association to which they belong.
Note: The composition of the NLRC is trisectoral.
Tripartism is representation of the three-sectors-
public or government, employers and the workers-in
policy-making bodies of the government. Tripartism
is observed in numerous government agencies or
instrumentalities among them, the NLRC.
Note: There is no need for the Commission on
Appointments to confirm the positions in the NLRC.
Such requirements has no constitutional basis.
(Calderon v. Carale, GR No. 91636, April 23, 1992).
Allocation of Powers and Functions of NLRC
1. En Banc
a. Promulgating rules and regulations and
governing the hearing and disposition of
cases before any of its divisions and
regional branches;
b. Formulating policies affecting its
administration and operations; and
c. On temporary or emergency basis, to
allow cases within the jurisdiction of any
division whose docket allows the
additional workload and such transfer
will not expose litigants to unnecessary
additional expense.
2. Division (eight divisions each with 3
members)
a. Adjudicatory;
b. All other powers, functions and duties;
and
c. Exclusive appellate jurisdiction over
cases within their respective territorial
jurisdiction. See table of jurisdiction.
Adjudication of Cases (triple C)
1. The NLRC adjudicates cases by division. A
concurrence of 2 votes is needed for a valid
judgment.
 (Whenever the required membership in
a division is not complete and the
concurrence of the commissioners to
arrive at a judgment or resolution cannot
be obtained, the Chairman shall
designate such number of additional
commissioners from the other divisions
as may be necessary.)
2. It shall be mandatory for the division to meet for
purposes of consultation.
 The conclusion of a division on any case
submitted to it for decision should be
reached in consultation before the case is
assigned to a member for the writing of the
opinion.
3. A certification to this effect signed by the
presiding commissioner of the division shall be
issued (copy attached to the record of the case
and served upon the parties).
Qualifications of the Chairman and the
Commissioners
1. must be a member of the Philippine Bar;
2. must have been engaged in the practice of law
in the Philippines for at least 15 years;
3. must have experience or exposure in handling
labor management relations for at least 5 years;
and
4. preferably a resident of the region where he is to
hold office.
Qualifications of Executive Labor Arbiters/ Labor
Arbiters
1. Must be members of the Philippine Bar;
2. Must have been engaged in the practice of law
in the Philippines for at least 10 years; and
3. Must have experience or exposure in handling
labor management relations for at least 5 years.
Term of Office of the Chairman, Commissioners,
and Labor Arbiters
They shall hold office during good behavior until they
reach the AGE of 65 unless removed for causes as
provided by law or become incapacitated to
discharge the function of his office.
 PROVDED, HOWEVER, That the President of
the Republic of the Philippines may extend the
services of the commissioners and labor arbiters
up to the maximum age of 70 years upon the
recommendation of the commission en banc.
Jurisdiction
A. Exclusive and Original
1. Certified cases – cases certified to it for
compulsory arbitration by the Secretary of Labor
under Art. 263 or the President under Art 264;
2. Injunction cases under Arts. 218 and 264; and
3. Contempt cases.

B. Exclusive Appellate
1. Cases DECIDED BY LABOR ARBITER under
Art. 217 [b] of the labor Code and Sec. 10 R.A.
8042 (Migrant Workers Act); and
2. Cases DECIDED BY THE REGIONAL OFFICES
OF DOLE IN THE EXERCISE OF
ADJUDICATORY FUNCTIONS under Art 129 of
the Labor Code over monetary claims of workers
amounting to not more than P5,000.
Judicial Review
 Findings of facts of a labor tribunal are
accorded the utmost respect by the courts
and are well nigh conclusive if supported by
substantial evidence.
 PETITIONS FOR CERTIORAR (RULE 65)
against decisions of the NLRC should
henceforth be initially filed with the court of
Appeals in strict observance of the doctrine
on the hierarchy of courts as the appropriate
forum for the relief desired The Court of
Appeals is procedurally equipped to resolve
unclear or ambiguous factual finding, aside
from the increased number of its component
divisions (St. Martin’s Funeral Homes v.
NLRC, GR No. 1308666, September 16,
1998).
Barangay Conciliation Not Applicable
Labor cases are not subject to Barangay Conciliation
since ordinary rules of procedure are merely suppletory
in character vis-à-vis labor disputes which are primarily
governed by labor laws (Montoya v. Escayo, GR Nos.
82211, March 21, 1989).
Chapter 2: Powers and Duties
Article 217: Jurisdiction of Labor Arbiters and the
Commission
Exclusive and Original Jurisdiction of Labor Arbiters
EXCEPT as otherwise provided under this Code, the
labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, WITHIN 30 CALENDAR
DAYS after the submission of the case by the parties for
decision without extension, even in the absence of
stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
1. ULP cases
2. Termination disputes
3. If accompanied with a claim for reinstatement,
those that workers file involving wages, rates of
pay, hours of work and other terms and conditions
of employment
4. Claims for actual, moral, exemplary and other
forms of damages arising from E-E relations;
5. Cases arising from any violations of Art 264
including questions involving the legality of strikes
and lockouts;
6. Except claims for Employment Compensation,
Social Security, Philhealth and maternity benefits,
all other claims arising from E-E relations,
including those of persons in domestic or
household service, involving an amount exceeding
P5,000 regardless of whether accompanied with a
claim for reinstatement;
7. Monetary claims of overseas contract workers
arising from Er-Ee relations under Migrant
Workers Act of 1995;
8. Wage distortion disputes in unorganized
establishments not voluntarily settled by the
parties pursuant to RA 6727;
9. Enforcement of compromise, agreements when
there is non-compliance by any of the parties
pursuant to Article 227 of the Labor Code, as
amended; and
10. Other cases as may be provided by law.
Note: Although the provision speaks of
EXCLUSIVE AND ORIGINAL JURISDICTION of
Labor Arbiters, the cases enumerated may instead
be submitted to a voluntary arbitrator by
agreement of the parties under Art. 262.
 The law prefers voluntary over compulsory
arbitration
 The cases that a Labor Arbiter can hear and
decide are employment related. Where no Er-
Ee relationship exists between the parties and
no issue is involved which may be resolved by
reference to the Labor Code, other labor
statutes, or any collective bargaining
agreement, it is the Regional Trial Court that
has jurisdiction (Lapanday Agricultural Dev’t.
Corp. v. CA, GR No. 112139, January 31,
2000).
 The Labor Arbiter has jurisdiction over
controversies involving employers and
employees only if there is a reasonable causal
connection between the claim asserted and
the employer-employee relations. Absent such
a link, the complaint is cognizable by the
regular court (EVIOTA v. CA, July 29, 2003).
Concurrent with NLRC
Contempt Cases

Cases Referred to Grievance Machinery and
Voluntary Arbitration
The following are cases which must be disposed of
by Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration:
1.disputes on the interpretation or implementation
of CBA; and
2.disputes on the interpretation of enforcement of
company personnel policies.
 The original and exclusive jurisdiction of the
Labor Arbiter under Art 217 [c] for money
claims is limited only to those arising from
statutes or contracts other than the CBA (San
Jose v. NLRC, GR No. 121117, August 17,
1998)
No Jurisdiction over the Following
1.Foreign governments (JUSMAG Philippines v.
NLRC, GR No. 108813, December 15, 1994)
2.International agencies (Lasco v. UNRFNRE, GR
No. 109095-109107, February 23, 1995)
3.Intra-corporate disputes which fall under P.D.
902-A and now fall under the jurisdiction of the
regular courts pursuant to the new Securities
Regulation Code (Nacpil v. IBC GR 144767,
March 21, 2002);
4. Executing Money claims against government
(DAR v. NLRC, GR No. 104269, November 11,
1993);
5. Cases involving GOCCs with original charters
which are governed by civil service law, rules or
regulations (Art. IX-B, Sec. 2, No. 1, 1987
Const.);
6. Local water district (Tanjay Water district v.
Gabaton, GR Nos. 63742 and 84300, April 17,
1989) except where NLRC jurisdiction is invoked
(Zamboanga City Water District v. Buat, GR No.
104389, May 27, 1994);
7. The aggregate money claim does not exceed
5,000 pesos and without claim for reinstatement
(Rajah Humabon Hotel, Inc. v. Trajano, GR No.
100455 September 17, 1993);
8. Claim of employee for cash prize under the
innovation program of the company, although
arising from employer-employee relationship, is
one requiring application of general civil law on
contracts which is within the jurisdiction of the
regular courts (San Miguel Corp. v. NLRC, GR
No. L-80774, May 31, 1988);
9. Cause of action is based on quasi-direct or tort
which has no reasonable connection with any of
the claims enumerated in Art. 217 of the Code
(Ocheda v. CA, GR No. 85517, October 16,
1992)
10. Complaint arising from violation of a training
agreement (Singapore Airlines v. Pano, GR No.
L-47739, June 22, 1983); and
11. The Labor Arbiter is without jurisdiction over the
case once his judgment has assumed the
character of finality (Cayena v. NLRC, GR. No.
7613, February 18, 1991).
2005 NLRC Rules of Procedure on Venue of
Filing Cases
1. All cases which Labor Arbiters have authority to
decide may be filed in the Regional Arbitration
Branch (RAB) having jurisdiction over the
workplace of the complainant/ petitioner.
Note: Workplace is understood to be the place or
locality where the employee is regularly assigned
when the cause of action arose. It shall include the
place where the employee is supposed to report
back after a temporary detail, assignment, or travel.
 In case of field employees, as well as ambulant
or itinerant workers, their workplace is:
a. where they are regularly assigned;
b. where they are supposed to regularly
receive their salaries and wages
c. where they receive their work
instructions from, and
d. report the results of their assignment to
their employers.
2. Where 2 or more RABs have jurisdiction over
the workplace, the first to acquire jurisdiction
shall exclude others.
3. Improper venue when not objected to before
filing of position papers shall be deemed waived.
4. Venue may be changed by written agreement of
the parties or when the commission or the Labor
Arbiter so orders, upon motion by the proper
party in meritorious cases.
5. For overseas Contract Workers, where the
complainant resides or where the principal office
of the respondent employer is located, at the
option of the complainant.
 The Rules of Procedure on Venue was
merely permissive, allowing a different
venue when the interest of substantial
justice demands a different one. (Dayag v.
Canizers, GR No. 124193, March 6, 1998)
Service of Summons
In the absence of service of summons or a valid
waiver, thereof the hearings and judgment rendered
by the labor arbiter are null and void.
Compulsory Arbitration
The process of settlement of labor disputes by a
government agency which has the authority to
investigate and make award binding on all the
parties. Labor arbiter has the authority to conduct
compulsory arbitration (PAL v. NLRC, GR No. 55159,
December 22, 1989).
Note: The NLRC may conduct compulsory arbitration
ONLY in national interest cases referred to it by the
DOLE Secretary.
Article 218: Powers of the Commission
Powers of the NLRC (RCI-COI)
1. Rule-making power – promulgation of rules and
regulations
a. Governing disposition of cases before
any of its divisions/ regional offices;
b. Pertaining to its internal functions
c. As may be necessary to carry out the
purposes of this Code
2. Power to issue Compulsory processes
(administer oaths, summon parties, issue
subpoenas)
3. Power to Investigate matters and hear disputes
within its jurisdiction (adjudicatory power, original
and appellate jurisdiction over cases);
4. Contempt power;
5. Ocular inspection (art 219); and
6. Power to issue Injunctions and restraining
orders.
Injunction or TRO
Orders which may require, forbid, or stop the doing
of an act. The power of the NLRC to enjoin or
restrain the commission of any or all prohibited or
unlawful acts under Article 218 of the Labor Code
can only be exercised in a labor dispute.
Note: A restraining order is not an injunction at all but
a writ to compel parties to maintain the matters in
controversy in status quo until the question of
whether or not a temporary or preliminary injunction
ought to be issued may be determined. (BF Homes
v. Reyes, March 16, 1971)
Who May Issue
1. President (Art 263[g]);
2. Secretary of Labor (Art. 263[g]); and
3. NLRC
Note: Art 218 limits the grant of injunctive power to
the “Commission”. The labor arbiter is EXCLUDED
STATUORILY hence no NLRC Rules can grant him
that power.
Procedure for the issuance of Restraining Order/
Injunction:
1. Filing of a verified petition
2. Hearing after due and personal notice has been
served in such manner as the Commission shall
direct to
a. all known persons against whom the
relief is sought; and
b. also to the Chief Executive or other
public officials of the province or city
within which the unlawful acts have
been threatened or committed charged
with the duty to protect the
complainant’s property.
3. Reception at the hearing of the testimonies of
witnesses with opportunity for cross-
examination, in support of the allegations of the
complaint made under oath as well as testimony
in opposition thereto.
4. Finding of fact of the Commission to the effect
that:
a. Prohibited or unlawful acts have been
threatened and will be committed, or
have been committed and will be
continued unless restrained, but no
injunction or temporary restraining order
shall be issued on account of any threat,
prohibited or unlawful act, except
against the persons, association or
organization making the threat or
committing the prohibited or unlawful act
or actually authorizing or ratifying the
same after actual knowledge thereof;
b. that substantial and irreparable injury to
the complainant’s property will follow;
Note: Irreparable Injury – an injury which cannot
be adequately compensated in damages due to
the nature of the injury itself or the nature of the
right or property injured or when there exists no
pecuniary standard for the measurement of
damages.
c. that as to each item of relief to be
granted, greater injury will be inflicted
upon complainant by the denial of the
relief than will be inflicted upon the
defendants by the granting of the relief;
d. that complainant has no adequate
remedy at law; and
Note: Adequate Remedy – one that affords relief
with reference to the matter in controversy and
which is appropriate to the particular
circumstances of the case. If the remedy is
specifically provided by law, it is presumed to be
adequate (PAL v. NLRC, GR No. 120567, March
20, 1998)
e. that public officers charged with the duty
to protect complainant’s property are to
 protect or unwilling to furnish adequate
protection.
5. Posting of a bond.
Injunction from NLRC is NOT the Proper Remedy
Against Employee’s Dismissal
It is an essential requirement that there must first be
a labor dispute between the contending parties
before the labor arbiter. In the present case, there is
no labor dispute between the petitioner and private
respondent as there has yet been no complaint for
illegal dismissal field with the labor arbiter. (ibid.)
Requisites Before TRO may be issued Ex Parte
1. The complainant shall allege that, unless a
TRO is issued without notice, a substantial
and irreparable injury to complainant’s
property will be unavoidable;
2. Testimony under oath is sufficient, if
sustained, to justify the Commission in
issuing a temporary injunction upon hearing
after notice (Affidavit of Merit); and
3.The complainant shall first file an undertaking
with adequate security/bond in an amount to
be fixed by the Commission sufficient to
recompense those enjoined for any loss,
expenses or damage caused by the
improvident or erroneous issuance of such
order or injunction, including all reasonable
cost, together with a reasonable attorney’s fee,
and expense of defense against the granting
of any injunctive relief sought in the same
proceeding and subsequently denied by the
Commission.
Note: The TRO shall be effective for NO LONGER
THAN 20 DAYS and shall become void at the
expiration of said 20 days counted from the date of the
posting of the bond.
 It may be lifted or it may be upgraded to a
permanent injunction.
 The TRO takes effect upon its issuance and not
upon receipt of the parties. (A.M. No. RTJ-98-
1405, April 12, 2000)
 The procedural and substantial requirements of
Art. 218[e] must be strictly complied with before
an injunction may issue in a labor dispute.
Article 219: Ocular Inspection
The Chairman, any Commissioner, Labor Arbiter or
their duly authorized representatives may, at anytime
during working hours:
1. Conduct an ocular inspection on any
establishment, building, ship, place or premises,
including any work, material, implement,
machinery, appliance or any object therein; and
2. ask any employee, laborer, or any person as the
case may be for any information or date
concerning any matter or question relative to the
object of the investigation.
Article 221: Technical Rules NOT Binding and
Prior Resort to Amicable Settlement
Technical Rules NOT Binding
Administrative and quasi-judicial bodies like the NLRC
are not bound by technical rules of procedure in the
adjudication of cases (Ford Phils. Salaried Employees
Assoc. v. NLRC, GR No. 75347, December 11, 1987).
 Rules of evidence are not strictly observed in the
proceedings before the NLRC (Bantolino, et al.
v. Coca Cola Bottlers Phils., Inc. GR No.
153660, June 10, 2003).
 A formal or trial-type hearing is not at all times
and in all instances essential to due process, the
requirements of which are satisfied where
parties are afforded reasonable opportunity to
explain their side of the controversy at hand
(Llora Motors Inc. v. Drilon, GR No. 82895,
November 7, 1989)
Res Judicata applies only to judicial or quasi-judicial
proceedings and NOT to the exercise of administrative
powers.
Prohibited Pleadings and Motions under 2005
NLRC Rules of Procedure
1. Motion to dismiss the complaint except on the
ground of lack of jurisdiction over the subject
matter, improper venue, res judicata, prescription
and forum shopping;
2. Motion for Bill of Particulars
3. Motion for New Trial
4. Petition for Relief from Judgment when filed with
the labor arbiter;
5. Petition for certiorari, prohibition and Mandamus
6. Motion to declare respondent in default; and
7. Motion for reconsideration or appeal from any
interlocutory order of the labor arbiter.
Amicable Settlement
The Labor Arbiter shall exert all efforts to arrive at an
amicable settlement of a labor dispute within its
jurisdiction on or before its first hearing or during the
mandatory conferences set for the purpose (The rules
of mandatory Conciliation/Mediation Conference are effected through forced contributions
provided for under Rule V of the 2005 NLRC Rules). from the workers from their own funds
as distinguished from union funds.
Approval of a Compromise Agreement by a Labor c. Neither the lawyer nor the union itself
Arbiter may require the individual workers to
The compromise agreement shall be approved by the assume the obligation to pay the
Labor Arbiter, if: attorney’s fees from their own pockets.
1. after explaining to the parties, particularly to the Any agreement to the contrary shall be
complainants, the terms and conditions and null and void.
consequences thereof;
2. he is satisfied that they understand the agreement; Article 111 Article 222
3. that the same was entered into freely and Prohibits the award of Prohibits the payment of
voluntarily by them; attorney’s fees, which attorney’s fees only
4. and that it is not contrary to law, morals and public exceeds 10% of the when it is effected
policy (ibid). amount of wages through forced
recovered. contribution from the
Article 222: Appearances and Fees workers from their own
funds as distinguished
Appearance of Non-Lawyers Before the from union funds
Commission PURPOSE: to fix the Purpose: to prevent the
limit on the amount of imposition on the
General Rule: ONLY lawyers can appear before the attorneys fees. The workers of the duty to
NLRC or a Labor Arbiter. victorious party may individually contribute
recover in any their respective shares in
Exceptions: Non-Lawyers can appear ONLY in the administrative or judicial the fee to be paid to the
following instances: proceeding. attorney for his services
1. He represents himself as party to the case; to the union.
2. He represents a legitimate labor organization
which is a party to the case provided that he
shall be made to present a verified certification
from said organization that he is properly
authorized.
3. He represents a member or members of a Chapter 3: Appeal
legitimate labor organization existing in
employer’s establishment; Article 223: Appeal
4. He is duly accredited member of any legal aid Grounds for Appeal (FLEP)
office duly recognized by the DOJ or IBP; 1. If the decision order or award was secured
5. He is the owner or president of a corporation or through Fraud or coercion, including graft and
establishment which is a party to the case. (Sec. corruption.
8, 2005 NLRC Rules) 2. If made purely on questions of Law
3. If serious Errors in the findings of facts are
Attorney’s Fees raised which would cause grave or irreparable
1. Art. 111 (simple monetary claim) damage or injury to the appellant; and
a. The maximum amount to be given a 4. If there is Prima facie evidence of abuse of
lawyer for his legal assistance rendered discretion on the part of the Labor Arbiter.
is 10% of the total monetary award
adjudged the employees excluding the Periods within which to Appeal
award for moral and exemplary 1. Decisions of the Regional Director – within 5
damages. To demand more than this is calendar days from receipt of the order (Art. 129,
unlawful. LC – Recovery of wages and simple money
2. Art. 222 claims of an amount not exceeding P5,000)
a. Attorney’s fees for CBA negotiations and 2. Decisions of the Labor Arbiter – within 10
conclusion shall be in the amount calendar days from the receipt of the decision.
agreed upon by the parties to be taken
from the union funds and not from Note: The Code states calendar, not working days.
individual union members. Hence, in counting the 10-day period, Saturday, Sunday,
b. This Article prohibits the payment of and Legal Holidays are not excluded (Vir-Jen Shipping
attorney’s fees only where the same is
and Marine Services v. NLRC GR L-58011-12, July 20,
1982).
 If the 10th day, as the case may be, falls on a
Saturday, Sunday or holiday, the last day to
perfect the appeal shall be the first working
day following such Saturday, Sunday, or
holiday.
 No Motion for Reconsideration is available in
questioning the Labor Arbiter’s decision
(2005 NLRC Rules).
Period Not Extendible
The perfection of an appeal within the statutory/
reglementary period is not only MANDATORY but also
JURISDICTIONAL and failure to do so renders the
questioned decision final and executory as to deprive the
appellate court of jurisdiction to alter the final judgment
of the Regional Directors and Labor Arbiters (ACDA v.
NLRC GR No. L-39686 June 28, 1980, Aboitiz Shipping
Employees Association v. Trajano, GR No. 112955
September 1, 1997).
Period for the Perfection of an Appeal to the NLRC
1. filing of a verified memorandum of appeal
containing the grounds, issues raised and
arguments propounded and reliefs sought within
the required period of appeal and with a
statement of the date appellant received the
appealed decision, order or resolution;
2. in three legibly typewritten or printed copies
3. proof of payment of the required appeal fee
4. in case of monetary award, an appeal by the
employer may be perfected only by the posting
of a bond (cash deposit or surety bond)
equivalent in amount to the monetary award
exclusive of damages and attorney’s fees
5. proof of service upon the other parties; and
6. certificate of non-forum shopping.
Note: Where the employer failed to post a bond to
perfect its appeal, the remedy of the employee is a
motion to dismiss the appeal, NOT a petition for
mandamus.
Note: The bond is sine qua non to the perfection of
appeal from the labor arbiter’s monetary decision
(Catubay, et al. v. NLRC, GR No. 119289, April 12,
2000) property bond acceptable (UERM-Memorial
Medical Center v. NLRC, GR No. 110419, March 3,
1997).
Note: No motion to reduce bond shall be entertained
except on meritorious grounds and only upon the
posting of a bond in a reasonable amount in relation to
the monetary award.
Note: Failure to give a copy of the appeal to the
appellee within 10 days is not fatal IF the latter was not
prejudiced by the delay in the service of said copy of
the appeal- technical rules must yield to the broader
interest of substantial justice. (Modern Fishing Gear
Labor Union v. Noriel, GR No. 53907, May 6, 1988).
Notice of Appeal
A mere notice of appeal does not stop the running of
the reglementary period of appeal.
Execution Pending Appeal
 The decision of the labor arbiter ordering the
reinstatement of a dismissed or separated
employee shall be immediately executory insofar
as the reinstatement aspect is concerned and
the posting of an appeal bond by the employer
shall not stay such execution.
 There is no need for a motion for the issuance of
writ of execution on the reinstatement order as it
is self-executory (Pioneer Texturizing Corp. v.
NLRC, GR No. 118651, October 16, 1997)
Options of The Employer In Complying With An
Order of Reinstatement Which is Immediate and
Self-Executory
1. He can admit the dismissed employee back to
work under the same terms and conditions
prevailing prior to his dismissal or separation or
to a substantially equivalent position if the former
position is already filled up; OR
2. He can reinstate the employee merely in the
payroll with payment of the accrued salaries.
Note: The exercise of one of the foregoing options
may be compelled under pain of contempt and the
employer may be made to pay the salary of the
employee instead.
Payroll Reinstatement
One where an employee is paid his monthly salary
without making perform actual work. It applies in
termination cases where the labor court declares the
dismissal illegal and orders reinstatement of the
employee, but the employer does not want to
actually or physically reinstate him and instead, at
the employer’s option, merely reinstates the
employee in the payroll pending appeal.
Judicial Review
Rules
 No law allows an appeal from a decision of the
Secretary of Labor, or the NLRC, or of a voluntary
arbitrator.
Note: Decisions of Voluntary Arbitrators are
appealable to the CA under Rule 43 of the Rules of
Court in relation to Sec 9 of BP Blg. 129. Voluntary
Arbitrators are to be considered as quasi-judicial
agencies whose decisions are appealable to the CA
(Luzon Dev’t Bank v. Association of Luzon Dev’t
Bank, GR No. 120319, October 6, 1995).
1. The way to review NLRC decisions is by special
civil action of certiorari, prohibition or mandamus
under Rule 65 of the Rules of Court
Note: A petition of certiorari shall NOT stay (or
suspend) the execution of the assailed decision of
the NLRC UNLESS a TRO is issued by CA or SC
(Sec 10, Rule XI, NLRC Rules, 2005)
2. Jurisdiction belongs to SC and CA but in line
with the doctrine on hierarchy of courts, the
petition should be initially presented to the CA
(St. Martin’s Funeral Home v. NLRC, GR No.
130866, September 16, 1988)
3. No motion for Reconsideration is allowed for any
order decision or award of a Labor Arbiter.
However, a Motion for Reconsideration of a
Labor Arbiters decision award or order which
has all the elements of an appeal may be treated
as appeal.
4. Only one Motion for Reconsideration of the
decision, award or order of the commission in
cases appealed before it is allowed.
Procedure on Cases Originally Filed With The Labor
Arbiter
Labor Arbiter
(no MR)
 October 27, 1986).
Appeal to the NLRC Division appeal from NLRC to the
Sec of Labor abolished under P.D. 1391)
 1. File a third-party claim with the sheriff of the
Court of Appeals (Certiorari under Rule 65)
OR
Supreme Court (Petition for Review under Rule 45)
Article 224: Execution of Decisions, Order, or
Awards
When Decision Becomes Final And Executory
The decision of the Secretary of Labor, the Commission,
the Bureau or regional director, the Labor Arbiter, the
Med-Arbiter or the Voluntary Arbitrator shall be final and
executory after 10 calendar days from receipt thereof by
the parties and shall be executory within ten (10) years.
Who May Issue Writ of Execution
1. Secretary of Labor
2. Regional Director
3. Commission
4. Labor Arbiter
5. Med-Arbiter
6. Voluntary Arbitrator or Panel of Arbitrator
When Writ of Execution May be Issued
 The foregoing may, upon its own initiative or on
motion of any interested party, issue a writ of
execution on a judgment within 5 years from the
date it becomes final and executory.
 An independent action which is an action to
revive judgment is required for the execution of
the final judgment within the next 5 years (Phil.
National Railways v. NLRC, GR No. 81231,
September 19, 1989).
Manner of Execution May be Appealed
 Finality of judgment becomes a fact upon the
lapse of the reglementary period of appeal and if
no appeal is perfected. In such a situation, the
prevailing party is entitled as a matter of right to
a writ of execution.
 There is a big difference if, what is sought to be
reviewed is not the decision itself but the manner
of its execution. While it is true that the decision
has become final and executory and so can no
longer be challenged, there is no question either
that is must be enforced in accordance with its
terms and conditions. The correctness of the
execution of the decision and to consider
supervening events that may affect such
execution (Abbot v. NLRC, GR No. L-65173,
Remedies of a Third Party Whose Property Has
been wrongfully levied to enforce a decision
(Cumulative)
Labor Arbiter, and
2. Action for damages
Independent reivindicatory action (Section 16,
Rule 37 of the Rules of Court)
RTC injunction against NLRC
Generally, not available. However, the general rule
that no court has the power to interfere by injunction
with judgments of another court with
concurrent/coordinate jurisdiction applies ONLY
when no third party complaint is involved (Ibid.).
Therefore, if the property under levy does not belong
to the judgment debtor in the NLRC case, it could
bot be validly levied upon by the sheriff for the
satisfaction of the judgment therein. If the third party
claimant does not involve nor grows out of a labor
dispute, a separate action for injunctive relief against
such levy may be maintained in court (Co Tuan et.
al. v. NLRC and CLUP, GR No. 117232, April 22,
1998).
TITLE THREE: BUREAU OF LABOR RELATIONS
Article 226: Bureau of Labor Relations
Absorption by NCMB
 Pursuant to E.O. 126, the National Conciliation
and Medication Board (NCMB) has absorbed the
conciliation, mediation and voluntary arbitration
functions of the BLR.
 THE BLR functions, as it now stands, are
confined largely for union matters, collective
bargaining and labor education.
 Jurisdiction over labor-management problems or
disputes is also exercised by other offices such
as the DOLE regional offices, the Office of the
Secretary of Labor, NLRC, POEA, OWWA, SSS-
ECC, the regional wage and productivity boards,
NWPC, and even the regular courts over intra-
corporate disputes.
Med-Arbiter – an officer in the regional office or
bureau authorized to hear, conciliate and decide
representation cases or assist in the disposition of
intra or inter-union disputes.
Exclusive and Original Jurisdiction of The BLR
To act at its own initiative or upon the request of
either or both parties on all:
1. INTRA-union conflicts;
2. INTER-union conflicts; and
3. Other related labor relations disputes.
Note: E.O. 251 OF 1987 removed from the
jurisdiction of the BLR “all” labor-management
disputes. The effect of E.O. 251 is to transfer to the
NCMB the mediation, conciliation, and arbitration
functions of the BLR.
 The parties may, by agreement, settle their
differences by submitting their case to a
voluntary arbitrator rather than taking the case to
the BLR
E.O. 292 or the 1987 Administrative Code
provides for the current functions and authority of the
BLR:
Sec. 16. Bureau of Labor Relations THE BLR shall:
1. set policies, standards, and procedures on the
registration and supervision of legitimate labor
union activities including denial cancellation and
revocation of labor union permits.
2. set policies, standards and procedures relating
to collective bargaining agreements and the
examination of financial records of accounts of
labor organizations to determine compliance
with relevant laws
3. provide proper orientation to workers on their
schemes and projects for improvement of the
standards of living of workers and their families.
Intra-Union Disputes – refers to any conflict
between and among union members, including
grievances arising from any violation of the rights
and conditions of membership, violation of or
disagreement over any provision of the union’s
constitution and by-laws , or disputes arising from
chartering or affiliation.
Inter-Union Disputes – refers to any conflict
between and among legitimate labor organizations
involving representation questions for purposes of
collective bargaining or to any other conflict or
dispute between legitimate labor organizations
based on any violations of their rights as labor
organizations.
Coverage of Inter/Intra- Union Disputes (Sec. 1,
Rule XI, D.O. 40-03)
1. Cancellation of registration of a labor
organization filed by its members or by any other
labor organization;
2. Conduct of election of union and worker’s
association officers/nullification of election of
union and worker’s association officers;
3. Audit/accounts examination of union or worker’s
association funds
4. De-registration of CBA
5. Validity/invalidity of union affiliation or
disaffiliation
6. Validity/ invalidity of acceptance/non-acceptance
for union membership
7. Validity/ invalidity of impeachment/ expulsion of
union and worker’s association officers
8. Validity/invalidity of voluntary recognition
 9. Opposition to application for union and CBA
registration
10. Violations of or disagreements over any
provision in a union or worker’s association
constitution and by-laws;
11. Disagreements over chartering or registration of
labor organizations and CBAs;
12. Violations of the rights and conditions of union or
worker’s association membership
13. Violations of the rights of legitimate labor
organizations, except interpretation of CBAs;
and
14. Such other disputes or conflicts involving the
rights to self-organization, union membership
and collective bargaining
a. between and among legitimate labor
organization; and
b. between and among members of a
union or worker’s association.
Other Related Labor Relations Disputes (Sec. 2, Rule
XI D.O. 40-03)
Shall include any conflict between a labor organization
and the employer or any individual, entity or group that is
not a labor organization or worker’s association. This
includes;
1. cancellation of registration of unions and
worker’s association and
2. a petition for interpleader.
Special Requirements as to the filing of cases
A. Involving Entire membership
1. The complaint must be signed by at least 30% of
the entire membership of the union and
2. It must also show exhaustion of administrative
remedies.
Note: Imposition of fees by the union affects the entire
membership; therefore, it requires that the complaint
should be signed by at least 30% of the membership of
the union.
B. Involving a Member only
In such case, only the affected member may file the
complaint. Redress must first be sought within the union
itself in accordance with its constitution and by laws
EXCEPT under any of the following circumstances:
1. Futility of intra-union remedies;
2. improper expulsion procedure;
3. undue delay in appeal as to constitute
substantial injustice;
4. the action is for damages
5. lack of jurisdiction of the investigating body
6. action of the administrative agency is patently
illegal, arbitrary and oppressive
7. issue is purely a question of law;
8. where the administrative agency had already
prejudged the case; and
9. where the administrative agency was practically
given the opportunity to act on the case but it did
not.
Effects of Filing or Pendency of Inter/intra-union
Dispute and other Labor Relations Disputes (Sec 3,
Rule XI, DO 40-03)
1. The rights, relationships and obligations of the
party-litigants against each other and other
parties-in-interest prior to the institution of the
petition shall continue to remain during the
pendency of the petition and until the date of
finality of the decision rendered therein.
Thereafter, the rights, relationships and
obligations of the party-litigants against each
other and other parties-in-interest shall be
governed by the decision so ordered.
2. The filing or pendency of any inter/intra-union
disputes is not a prejudicial question to any
petition for certification election and shall not be
a ground for the dismissal of a petition for
certification election or suspension of
proceedings for certification election.
Modes of Appeal in Intra/Inter-Union Disputes (Rule
XI, D.O. 40-03)
HOW (formal 1. Under oath
requirements) 2. Consist of a
memorandum of
appeal
3. Based on either of the
following grounds:
a. Grave abuse of
discretion
b. Gross violation of the
Rules
4. With supporting
arguments and
evidence
 Within 10 days from receipt Appeal to BLR (or to the Sec. of Labor if originated from
Period the Bureau)
of decision
Bureau of Labor Relations
– if the case originated (within 10 days from receipt of the decision)
from the Med-
To whom appealable
Arbiter/Regional Director
Sec. of Labor – if the case Appeal to the Secretary of Labor
originated from the Bureau
Regional office or to the
BLR, where the complaint
originated (records are
WHERE filed transmitted to the BLR or
Sec. within 24 hours from
receipt of the
memorandum of appeal)

Flowchart or Appeal from Decisions of Med-Arbiters

Med-Arbiter/Regional Director Summary of Rules on Intra/Inter-Union Disputes

 For grounds under Sec 1: any legitimate labor organization
(LLO)
Who Member(s) thereof specially concerned

For grounds under Sec. 2: any party-in-interest

Regional Office that issued its certificate of registration or
certificate of creation of chartered local: if it involves labor
unions with independent registrations, chartered locals,
Where Filed worker’s association, its officers or members.

Directly with the Bureau – if it involves a Federation/ National

Unions/ Industry Unions, its officers or members
1. in writing
2. verified under oath
3. contains the following averments:
a. name, address, and other personal
circumstances of the complainant(s) or
petitioner(s);
b. name, address and other personal
circumstances of the respondent(s) or
person(s) charged;
c. nature of the complaint or petition;
d. facts and circumstances surrounding the
complaint or petition;
e. causes of action or specific violations
Formal Requirements committed;
f. a statement that the administrative remedies
provided for in the constitution and by-laws
have been exhausted;
g. or such remedies are not readily available to
the complainant(s) or petitioner(s) through
no fault of his/their own.
h. Compliance with such administrative
remedies does not apply to complainant(s)
or petitioner(s)
4. relief(s) prayed for
5. certificate of non-forum shopping and
6. other relevant matters

Administrative Functions of the BLR 1. regulation of registration of the labor unions;

 2. keeping of a registry of labor unions DOLE
3. maintenance of a file of CBAs; and
4. maintenance of a file of all settlements of final Repudiation
decisions of the Supreme Court, Court of
Appeals, NLRC and other agencies on labor Can be repudiated by the Can no longer be
disputes. parties by going to the repudiated – becomes final
Commission and binding upon the
Cases Where the BLR has No Jurisdiction parties upon execution
Those arising from the implementation or interpretation of NOTE: ULP cases are not EXCEPT:
collective bargaining agreements which shall be subject subject to compromise. In case of non-compliance
of grievance procedure and/or voluntary arbitration. with the compromise
agreement; or if there is
Article 227: Compromise Agreements prima facie evidence that
the settlement was
Compromise Agreements – contract whereby the obtained through fraud,
parties, by making reciprocal concessions, avoid litigation misrepresentation, or
or put an end to one already commenced. coercion.

Substantial Requirements
1. must be freely entered into
2. must be contrary to law, morals or public policy;
3. must be reasonable; and
4. must be approved by the authority before whom
the case is pending (see discussion on Article
221 – approval of Labor Arbiter of an amicable
settlement in a case before him)
Formal Requirements
1. in writing; and
2. signed in the present of the regional director or
his duly authorized representative. (Sec. 8, Rule
II of the Rules on Disposition of Labor Standards
Cases in the Regional Offices)
Options when compromise agreement is violated.
1. enforce compromise by writ of execution; or
2. regard it as rescinded and insist upon original
demand.
Requirements of a Valid Quitclaim
1. The quitclaim must be voluntary arrived at by the
parties;
2. It must be with the assistance of the Bureau of
Labor Standards, Bureau of Labor Relations or
any representative of the DOLE; and
3. The consideration must be reasonable (required
only when entered without the assistance of
DOLE).

When May Compromise Agreements be Effected
 It may be effected at any stage of the
proceedings and even when there is already a
final executory judgment (Art. 2040, NCC).
 It cannot be entered into when the final judgment
is already in the process of execution (Jesalva, et
al. v. Bautista, GR No. L-11928-L-19330, March
24, 1959).
Compromise Agreements with v. withour Assistance
of DOLE
Without Assistance of
With Assistance of DOLE
DOLE
Note: Dire necessity is not an acceptable ground for
annulling the releases, especially in the absence of proof
that the employees were forced to execute them (Veloso
v. DOLE, GR No. 87297, August 5, 1991).
Waiver of Reinstatement
Like waivers of money claims, a waiver of right which
must be exercised personally by the workers
themselves (Jag and Haggar Jeans and Sportswear
Corp. v. NLRC, GR No. 105710, February 23, 1995).
Article 231: Registry of Unions and File of Collective
Agreement

Validity/ Binding Effect  The CBA is more than a contract, it is highly

impressed with public interest for it is an essential
Valid and binding upon the Valid and binding upon the instrument to promote industrial pease (TUP v.
parties parties Leguesma, GR No. 95013, September 21, 1994).

Without Assistance of With Assistance of DOLE

 An UNREGISTERED CBA does not bar
certification election (Contract-Bar Rule will not
apply in the absence of registration). (See notes
under Arts. 253, 253-A and 256).
Procedure for Registration
1. Submission of copies of the CBA to the Bureau of
Labor Relations or the regional offices of DOLE
within 30 days from execution, accompanied by
the following:
a. Verified proof of posting in two
conspicuous places in the place of work;
and
b. Verified proof of ratification by the
majority of all the workers in the
bargaining unit.
2. Action upon the application for registration within
five (5) calendar days from receipt thereof
3. The regional office shall furnish the BLR with a
copy of the CBA within five (5) days from its
submission
4. The BLR or regional office shall assess the
employer for every CBA, a registration fee of not
less than P1,000.00 or any amount deemed
appropriate by the Secretary of Labor
5. Issuance of Certificate of Registration.
Note: Registration of the CBA is not a requisite for its
validity.
 The certification of the CBA by the BLR is not
required to put a stamp of validity to such
contract. Once it is duly entered into and signed
by the parties, a CBA becomes effective as
between the parties regardless of whether or not
the same has been certifies by the BLR (Liberty
Flour Mills Employees v. LFM Inc., GR Nos.
58768-70, December 29, 1989).
Article 232: Prohibition on Certification Election
Contract-Bar Rule: While a valid registered CBA is
subsisting for a fixed period of 5 years, the Bureau is
not allowed to hold an election contesting the majority
status of the incumbent union EXCEPT during the
sixty (60) day-period immediately prior to its
expiration, which period is called the freedom period.
Note: In the absence of such timely notice or filing of
petition, the contract executed during the automatic
renewal period is a bar to certification election.
 There shall be no amendment, alteration, or
termination of any of the provisions of the CBA
except to give notice of one party’s intention to
amend, alter and terminate the provisions within
the freedom period.
 Economic provisions of the CBA shall be
renegotiated not later than three (3) years. The
economic provisions with specific termination
dates when renegotiated and signed within six (6)
months from their termination or expiration
become retroactively effective the day after their
expiration if beyond six (6) months, the effectivity
will depend upon the agreement of the parties
(See discussion under Art. 256).
Requisites for Contract-Bar Rule
1. The agreement is existing, i.e, the parties
have duly executed it in conformity with the
necessary formalities;
2. It was ratified by the union membership
3. It is adequate for it contains substantial
terms and conditions of employment
4. It encompasses the employees in the
appropriate bargaining unit
5. It was not prematurely extended, the CBA
was not hastily entered into (doctrine of
premature extension does not bar a
certification election);
6. It is for a definite period
7. No schism or mass disaffiliation affects the
contracting union during the lifetime of the
agreement
8. The contracting union is not defunct
9. The contracting union is not company-
dominated (see discussion in Aets. 256-259
Petition for Certification Election).
Article 223: Privileged Communication
Privilege Communication – any statement of such
privacy that the law exempts the person receiving
the information from the duty to disclose it.
Not Available as Evidence
 Information and statements made at
conciliation proceedings shall be treated as
privileged communication and shall not be used
as evidence in the Commission.
 Conciliators and similar officials may not testify
in an y court or body regarding any matters
taken up at conciliation proceedings conducted
by them.
TITLE FOUR: LABOR ORGANIZATIONS
Chapter 1: Registration and Cancellation
Article 234: Requirements of Registration
Principle of Agency Applied
1. Principal employees
2. Agent local/chapter
3. Agent of agent federation
Purpose of Formation of Labor Unions: for
securing fair and just wages and good working
conditions for the laborers; and for the protection of
labor against the unjust exactions of capital.

Modes of Acquiring Legitimacy for Labor

Organizations (RC)
1. Registration with the BLR (independent union).
2. Chartering or issuance of a federation or national
union of a charter certificate.
 Labor Organizations
Labor Organization
Union
Legitimate Labor Organization or Labor Union
Independent Union
Exclusive Bargaining Representative
Worker’s Association
Legitimate Worker’s ASsociation
Classification of Labor Organization
Definition
Any union or association of employees in the private
sector which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers
concerning terms and conditions of employment (D.O. 40-
03)
Any labor organization in the private sector organized for
collective bargaining and for other legitimate purposes.
Note: Not every legitimate labor organization can act as
bargaining representative and be certified as such. This is
true ONLY of a union that has won in certification election
or has been voluntarily recognized by the employer (see
exclusive bargaining representative below).
Legitimate labor union duly recognized or certified as the
sole and exclusive bargaining representative or agent of
all the employees in a bargaining unit
Association of workers organized for the mutual legitimate
purpose other than collective bargaining
Association of workers organized for mutual aid and
protection of its members or for any legitimate purpose
other than collective bargaining registered with the DOLE
1. National Union/Federation – any labor organization
with at least 10 locals/chapters each of which must
be a duly certified or recognized collective
bargaining agent.
2. Industry Union – group of legitimate labor
organizations within an identified industry,
organized for collective bargaining or for dealing
with employers concerning terms and conditions of
employment with an industry or for participating in
the formulation of social and employment policies,
standards and programs in such industry registered
with DOLE.
3. Trade Union Center – group of registered national
unions or federations organized for the mutual aid
and protections of its members and for assisting
such members in collective bargaining or for
participating in the formulation of social and
employment policies, standards, and programs duly
registered with the Department.
4. Alliance – aggregation of unions existing in one line
of industry or in a conglomerate, a group of
franchisees, a geographical area, or an industrial
center.
5. Company union – a labor organization which in
whole or in part, is employee-controlled or
employer-dominated.
Requirements for the Issuance of the Certificate of
Registration of a National Federation, National
Union or Industry of Trade Union Center or an
Independent Union (as amended by R.A. 9481, June
15, 2007)
1. P 50 registration fee
2. Names of its officers, their addresses, the principal
address of the labor organization, the minutes of
the organizational meetings and the list of the
workers who participated in such meetings;
3. Inc case the applicant is an independent union, the
names of all its members comprising at least 20%
of all the employees in the bargaining unit where it
seeks to operate (see Art. 255 for definition or
bargaining unit);
4. If the applicant union has been in existence for one
or more years, copies of its annual financial reports;
and
5. 4 copies of the constitution and by laws of the
applicant union, minutes of it adoption or
ratification, and the list of the members who
participated in it.
Note: Creation of a LOCAL CHAPTER does not need
subscription of at least 20% of the members. Minimum
number of members applicable only to registration of
independent union.
Article 234-A: Chartering and Creation of a Local
Chapter (new provision inserted by R.A. 9481)
A duly registered federation or national union may
directly create a local chapter by issuing a charter
certificate indicating the establishment of the local
chapter. The chapter shall acquire legal personality
ONLY for the purposes of filing a petition for certification
elections from the date it was issued a charter
certificate.
Note: The chapter shall be entitled to all other rights
and privileges of a legitimate labor organization ONLY
UPON THE SUBMISSION OF THE FOLLOWING
DOCUMENTS IN ADDITION TO ITS CHARTER
CERTIFICATE:
1. Names of the chapter’s officers, their addresses,
and the principal office of the chapter;
2. Chapter’s constitution and by laws
3. PROVIDED, that where the chapter’s constitution
and by-laws are the same as that of the federation
or the national union, this fact shall be indicated
accordingly.
Note: The additional requirements shall be certified
under oath by the secretary or treasurer of the chapter
and attested by its president.
Exception: A supervisors’ union is not allowed to
affiliate with the same federation as that of the rank-
and-file union when two conditions are present:
1. The rank-and-file employees are directly under the
authority of the supervisory employees;
2. The national federation is actively involved in union
activities in the company (De La Salle University
Medical Center and College of Medicine v.
Laguesma, GR No. 102084, August 12, 1998).
Where to File Application For Registration
1.For registration of independent labor unions,
chartered locals, worker’s associations shall be
filed with the Regional Office where the
applicant principally operates. It shall be
processed by the Labor Relations Division at
the Regional Office.
2.Applications for registration of federations, national
unions or workers’ associations operating in
more than one region shall be filed with the
bureau or the regional offices, but shall be
processed by the bureau.
Ministerial Duty of the BLR Compellable By
Mandamus
 To review the application for registration and
not the issuance of a Certificate of Registration
 After a labor organization had filed the
necessary papers and documents for
registration, it becomes mandatory for the BLR
to check if the requirements under Article 234
have been sedulously complied with. If its
application for registration is vitiated by
falsification and serious irregularities, especially
those appearing on the face of the application
and the supporting documents, a labor
organization should be denied recognition as a
legitimate labor organization (Progressive
Development Corporation-Pizza Hut v.
Laguesma, et.al, GR No. 115077, April 18,
1997).
collective bargaining agent of the employer they
represent.
Requirements Before a Federation can be issued a
certificate of Registration
Aside from the applicant, which must be accompanied
with the requirements for registration of labor
registration, the application should also be
accompanied by the following:
1. Proof of affiliation of at least 10 locals or chapters,
each of which must be a duly recognized sole and
exclusive collective bargaining agent in the
establishment or industry in which it operates,
supporting the registration of such applicant
federation or national union;
2. Resolution of affiliation of at least ten (10) legitimate
labor organization, whether independent unions or
chartered locals each of which must be duly
certified or a recognized bargaining agent in the
establishment where it seeks to operate; and
3. Names and addresses of the companies where the
affiliates operate and the list of all the members in
each company involved.
Unions at Enterprise Level
A labor union at enterprise level may be created either
by:
1. independent registration
2. chartering

Purpose of Registration
Registration with the BLR is the operative act that gives
rights to a labor organization.
1.It is the fact of being registered with the DOLE that
makes a labor organization legitimate in the
sense that it is clothed with legal personality to
claim representational and bargaining rights
enumerated in Article 242 or to strike or picket
under Article 263.
2.The requirement of registration is NOT a
curtailment of the right to association. It is
merely a condition sine qua non for the
acquisition of legal personality by labor
organizations, associations or unions and the
possession of the rights and privileges granted
by law to labor organizations.
3.It is a valid exercise of police power sine the
activities in which labor organizations,
associations, or unions of workers are engaged
affect public interest, which should be protected
(PAFLU v. Sec. of Labor, GR L-2228, February
27, 1969).

Federation – any labor organization with at least 10

locals/chapters or affiliates each of which must be duly
certified or recognized as the sole and exclusive
 Independent Chartering Requirement of Affiliation (As amended by D.O. 40-
Registration 03)
How Obtained by a A duly registered 1. Report of affiliation of independently registered
union organizers federation/ labor union;
in an enterprise national union 2. Attachments:
through their issues a charter a. resolution of the labor union’s board of
own accord to a union in an directors approving the affiliation;
enterprise and b. of the general membership meeting
registers the approving the affiliation
charter with the c. the total number of members comprising
regional office or the labor union and the names of members
the BLR who approved the affiliation.
Result Independent Chapter/local d. The certificate of affiliation issued by the
union federation in favor of the independently
Legal With legal No legal registered labor union; and
Personality personality personality of its e. Written notice to the employer concerned if
own once it the affiliating union is the incumbent
disaffiliates with bargaining agent.
the legitimate
labor federation Note: Supervisor’s union and the rank and file
because it is union operating within the same establishment
only legitimized may join the same federation or national union.
by affiliation (Art 245 amended by R.A. 9481).
Where Application for Charter
Filed registration is certificate issued Disaffiliation
filed with and will by federation or Once affiliated, a local union may disaffiliate from the
be acted upon national union is federation.
by the DOLE filed with the
Regional Office Regional Office When to Disaffiliate
where the or BLR within 30 General Rule: A labor union may disaffiliate from the
applicant’s days after the monitor union to form an independent union only during
principal’s office issuance of the the 60-day freedom period immediately preceding the
is located. charter expiration of the CBA.
certificate.
Exception: DISAFFILIATION BY MAJORITY
Affiliate – an independently registered union that
entered into an agreement of affiliation with a federation  Even before the onset of the freedom period
or national union. It also refers to a chartered local, disaffiliation may still be carried out, but such
which applied for and was granted an independent disaffiliation must be effected by a majority of
registration but did not disaffiliate from its mother the union members in the bargaining unit.
federation or national union.  This happens when there is a substantial shift
in allegiance on the part of the majority of the
Affiliation of Local Union with a Federation members of the union. In such a case,
The procedure of affiliation would depend on whether however, the CBA continues to bind the
the union is independently registered or not. members of the new disaffiliated and
independent union up to the CBA’s expiration
date. A consent election to determine the union
which shall administer the CAB maybe
conducted.

Limitation

 Disaffiliation should be in accordance with the

rules and procedures stated in the constitution
and by laws of the federation.
 A prohibition to disaffiliate in the Federation’s Decision of Secretary of Labor appealable to Court of
constitution or by-laws us valid-intended for its Appeals.
own protection.

Registration of Independent Labor Union Filed

Chartered Local – created by a federation or
national union through issuance of a charter.
Revocation of Charter by the Federation – by
serving the local/chapter a verified notice of
revocation, copy furnished the Bureau on the
ground of disloyalty or such other grounds as may
be specified in its constitution or by-laws.
with
REGIONAL OFFICE where union operates:
(processed by Labor Relations Division)
Bureau of Labor Relations (if denied by Regional
Director)

 The revocation shall divest the local chapter of

its legal personality upon receipt of the notice Decision of BLR appealable to COURT of APPEALS
by the Bureau, unless in the meantime the local
chapter has acquired independent registration Registration of Federation or National Union Filed
(Sec. 5, Rule VIII of the IRR of LC). with

Note: The cancellation of registration of a federation

or national union shall operate to divest its BUREAU OF LABOR RELATIONS or REGIONAL
locals/chapters of their status as legitimate labor OFFICE (but processed by Bureau)
organization UNLESS the locals/chapters are
covered by a duly registered.
Secretary of Labor (if BLR director denies)
Collective Bargaining Agreement
In the latter case, the locals/ chapters shall be
allowed to register as independent unions, failing Decision of Secretary appealable to CPOURT of
which they shall lose their legitimate status upon APPEALS
the EXPIRATION OF THE CBA. (Implementing
Rules: Book V, Rule VIII, Sec. 6)

Article 236: Denial of Registration

Decision
Decision of the Regional Office or the Bureau
denying the application for registration shall be:
1. in writing
2. stating in clear terms the reason for the
decision; and
3. applicant union must be furnished a copy of
said decision

Appeal
 Decisions of the Regional Office shall be
appealable to the BLR and CA. The BLR’s
decisions on cases appealed from Regional
Director are final and not appealable to the
Secretary of Labor.
 Decisions of the BLR denying the registration of
a labor organization (federation or national
union) is appealable to the Secretary of Labor
within 10 calendar days from receipt of the
decision, on grounds of:
1. Grave abuse of discretion; or
2. Gross incompetence
 Independently Registered
By signing a contract of affiliation
How to Affiliate
Would not affect its being a legitimate
labor organization and therefore it
would continue to have legal
personality and to possess all the rights
and privileges of a legitimate labor
Effect of Disaffiliation to the Union
organization.
(local)
An existing CBA would continue to be
valid as the labor organization can
continue administering the CBA.
Effect of Disaffiliation to the CBA
Labor organization is entitled to the
union dues and not the federation from
which the labor organization
disaffiliated.
Entitlement to Union Dues After
Disaffiliation
Unregistered
By application of the union with the
federation for the issuance of a charter
certificate to be submitted to the
Bureau accompanied by the following:
1. Copies of its constitution and
by-laws
2. Statement of the set of officers
and books of accounts, all of
which must be certified by the
Secretary/ Treasurer and
attested to by the President. In
such case, the union becomes
a local chapter of the
Federation.
Upon severance, it would cease to be a
legitimate labor organization and would
no longer have legal personality and
the rights and privileges granted by law
to legitimate organization, unless the
local chapter is covered by a duly
registered collective bargaining
agreement. In the latter case. The local
chapter expires it will lose its legal
personality unless it registers as an
independent union.
The CBA would continue to be valid.
The local chapter will not lose its
personality until the expiration of the
CBA. After the CBA expires, the local
union loses its personality, unless it
registers anew.
Union dues may no longer be collected
as there would no longer be any labor
union that is allowed to collect such
union dues from the employees.
Note: Follow the principle of agency
between federation and local
Principal – employees
Agent – local/ chapter
Agent of agent - federation
Modes of Appeal
Denial or Cancellation by:
A. REGIONAL OFFICE
1. Transmit records within 24 hours from receipt of
Memo of Appeal
2. BUREAU decides within 20 days from receipt of
records.
3. COURT OF APPEALS – Rule 65
B. BUREAU
1. Transmit records within 24 hours from receipt of
Memo of appeal
2. SEC. OF DOLE decides within 20 days from receipt
of records
3. COURT OF APPEALS – Rule 65
Note: Appeal by memo of appeal within 10 days from
receipt of notice.
Grounds
1. Grave abuse of discretion
2. Violation of rules as amended
Article 238: Cancellation of Registration
The certificate of registration of any legitimate labor
organization, whether national or local, may be cancelled
by the Bureau, after due hearing, only the grounds
specified in Article 239. (as amended by R.A. 9481)
Article 238-A: Effect of a Petition for Cancellation of
Registration (new provision inserted by R.A. 9481)
1. A petition for cancellation of union registration
shall not suspend the proceedings for certification
election nor shall it prevent the filing of a petition
for certification election.
2. In case of cancellation, nothing herein shall
restrict the right of the union to seek just and
equitable remedies in the appropriate courts.
For:
1. Legitimate individual labor union
2. Chartered local
3. Worker’s association
 Where to File
Regional Director who has jurisdiction over
the place where respondent principally
operates (30 days to decide).
 Who May File
Any party-in-interest, if ground is:
1. Failure to comply with any of the
requirements under Arts. 234, 237 and
238, LC.
2. Violation of any provision under Art. 239,
LC.
Note: Take note of the cancellation proceedings if
violation is [d] and [j] of Art. 239, LC.
For:
1. Federations
2. National or Industry unions
3. Trade union center
 Where to File
Bureau Director (30 days to decide)
 Who May File
Only the members of the labor organization
concerned if grounds are actions involving
violations of Art. 241, subject to the 30% rule.
Effect of Cancellation of Registration in the Course of
Proceedings
Where a labor union is a party in a proceeding and later it
loses its registrations permit in the course or during the
pendency of the case, such union may continue as a
party without need of substitution of parties, subject
however to the understanding that whatever decision may
be rendered therein will be binding only upon those
members of the union who have not signified their desire
to withdraw from the case before its trial and decision on
the merits (Principle of Agency applied-the employees are
the principals, and the labor organization is merely an
agent of the former, consequently, the cancellation of the
union’s registration would not deprive the consenting
member employees of their right to continue the case as
they are the considered as the principals).
Article 239: Grounds for Cancellation of Union
Registration (as amended by R.A. 9481)
Grounds
1. Misrepresentation false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto,
the minutes of ratification and the list of members
who took part in the ratification;
2. Misrepresentation, falise statement or fraud in
connection with the election of officers, minutes
of the election of officers and the list of voters,
and
3. Voluntary dissolution by the members.
Note: A pronouncement as to the illegality of the strike is
not within the meaning of Art. 239 of the Code, which
provides for the grounds for cancellation of union
registration.
Article 239-A: Voluntary Cancellation of Registration
(new provision inserted by R.A. 9481)
The registration of a legitimate labor organization may be
cancelled by the organization itself PROVIDED:
1. At least 2/3 of its general membership votes, in a
meeting duly called for that purpose to dissolve
the organization;
2. An application to cancel registration is submitted
by the board of the organization, attested to by
the president thereof.
Note: Failure to submit a reportorial requirements is no
longer a ground for cancellation but shall subject the
erring officers or members to suspension, expulsion from
membership, or any appropriate penalty. (Art. 242-A, new
provision inserted by R.A. 9481)
Chapter 2: Rights and Conditions of Membership in a
Labor Organization
Article 241: Rights and Conditions of Membership on
a Labor Organization
General Groupings of the Rights of the Union
Members (DIMP)
1. Deliberative and Decision-making Right- the right
to participate in deliberations on major policy
questions and decide by secret ballot.
2. Right to Information- the right to be informed
about:
a. the organization’s constitution and by-
laws;
b. the collective bargaining agreement, and
labor laws.
3. Rights Over Money Matters – the rights of the
members:
a. against imposition of excessive fees;
b. right against unauthorized collection of
contributions or unauthorized
disbursements;
c. to require adequate records of income
and expenses;
d. to access financial records;
e. to vote on officer’s compensation
f. to vote on special assessment;
g. to be deducted a special assessment
only with the member’s written
authorization.
4. Political right – the right to vote and be voted for,
subject to lawful provisions on qualifications and
disqualifications.
Note: Any violation of the above rights and conditions of
membership shall be a gorund for cancellation of uinion
registration or expulsion of an officer from office,
whichever is appropriate. At least 30% of all the members
of the union or any member or members specifically
concerned may report such violation to the Bureau.
Union Membership
Any employee, whether employed for a definite period or
not, shall, beginning on his first day of service, be
considered an employee for purpose of union
membership (Art 277).
Note: The relationship of the union and members is
governed by their mutual agreement, the terms and
conditions of which are set forth in the union constitution
and by laws and binding on the members as weel as the
organization itself. (Poquiz, 2006, quoting Ang Malayang
Manggagawa ng Ang Tibay Enterprises, et al. v. Ang
Tibay, et al., GR No. L-8259, December 23, 1957).
Who are prohibited from becoming members/officers
of a labor organization (see noted under Art 243 on
persons who are not granted the right to self-
organization)
1. Non-employees (Art. 241[c]);
2. Subversives or those engaged in subversive
activities (Art. 241 [e]); and
3. Persons who have been convicted of a crime
involving moral turpitude shall not be eligible for
election as union officer or for appointment to any
position in the union (Art. 241 [f]).
Note: In general, a union is free to select its own
members, and no persons has an absolute right to
membership in a union.
Limitation (See notes on union security
arrangements under Art. 248)
1. The labor organization cannot compel employees
to become members of their labor organization if
they are already member of rival union.
2. The persons mentioned in Art. 241[e]
(subversives) of the Labor Code are prohibited
from becoming a member of a labor organization.
3. The members of religious organization whose
religion forbids membership in labor organization
could not be compelled into union membership.
Levy of Special Assessments or Extraordinary Fees
(art. 241[n])
Requirements (RAMM)
1. There must be a written resolution
2. The resolution must have been approved by a
majority of all the members; and
3. The approval must be at a general membership
meeting duly called for that purpose.
 4. The Secretary of the organization shall record the
minutes of the meeting, which shall be attested to Special Check- off
by the President. The minutes include: Assessment
a. the list of all members present How Approved By written (Union Dues)
b. the votes cast; and resolution By obtaining the
c. the purpose of the assessment or fees. approved by individual written
majority of all authorization duly
Substantial compliance with the aforementioned the members at signed by the
procedure is not enough- the requirements must be a meeting duly employee which
strictly complied with. (Palacol et al. v. Ferrer-Calleja, et called for that must specify:
al., GR No. 85333, February 26, 1990). purpose 1. amount
2. purpose
Check- Off – a method of deducting from an employee’s 3. beneficiary
pay at prescribed period, the amounts due to the union for Exception to No Exception (Agency Fees)
fees, fines or assessments. Such written Not necessary:
Requirement resolution is 1. for mandatory
Nature and Purpose of Check-Off mandatory at all activities
Union dues are the lifeblood of the union. All unions are instances provided under
authorized to collect reasonable membership fees, union the code;and
dues, assessments and fines and other contributions for 2. when non-
labor education and research, mutual death and members of
hospitalization benefits, welfare fund, strike fund and the union avail
credit and cooperative undertakings (Art. 277 [a]). of the benefits
of the CBA.
Requirements with Regard to Check Offs (Art. 241 Said non-
[o]) members may
General Rule: NO special assessment, attorney’s fees, be assessed
registration fees or any other extraordinary fees may be agency fees
checked off from any amount due an employee without an equivalent to
individual written authorization duly signed by the that paod by
employee. The authorization should specifically state the: members only
1. Amount; and by a Board
2. Purpose and the beneficiary of the deduction. Resolution
approved by a
Exceptions majority of the
1. For mandatory activities provided under the members in a
Code; and general
2. When non-members of the union avail of the meeting called
benefits of the CBA: for the
a. said non-members may be assessed purpose.
union dues equivalent to that paid by
members;
b. only by a Board Resolution approved by Union Dues – regular monthly contributions paid by the
majority of the members in a general members to the union in exchange for the benefits given
meeting called for the purpose. to them by the CBA and to finance the activities of the
union in representation.
Note: The individual written authorization duly signed by
the employee is an additional requirement (to RAM) in Agency Fees – dues equivalent to union dues, charged
order that a special assessment may be validly checked- from the non-union members who or benefited by or
off (ibid.) under the CBA.

Jurisdiction over Check-Off Disputes Requisites (PNB)

Being an intra-union conflict, the Regional Director of 1. The employee is part of the bargaining unit
DOLE has jurisdiction over check off disputes 2. He is not a member of the union; and
3. He partook of the benefits of the CBA.
Note: Individual written authorization is not necessary for Article 242-A: Reportorial Requirements (new
the collection of agency fees. provisions inserted by R.A 9481)

Union Dues Agency Fee Reportorial requirements to be submitted by the legitimate

Deducted From labor organization:
Members of a union Non-members of the 1. Constitution and by laws, or amendments,
for the payment of bargaining agent thereot, minutes of ratification, and the list of
union dues (union) for the members who took part in the ratification of the
enjoyment of the constitution and by laws within 30 days from
benefits under the CBA adoption or ratification of the constitution and by
Consent laws within 30 days from adoption or ratification
May not be deducted May be deducted from of the constitution and by-laws or amendments
from the salaries of the salary of thereto;
the union members employees without 2. List of officers, minutes of the election of officers,
without the written their written consent. and list of voters within 30 days from election;
consent of the 3. Annual financial report within 30 days after the
workers affected. close of every fiscal year, and
4. List of members at least once a year or whenever
Note: Agency fee cannot be imposed on employees required by the Bureau.
already in the service and are members of another union.
If a closed shop agreement cannot be applied to them, Note: Failure to comply with the above-mentioned
neither may an agency fee, as a lesser form of union requirements shall not be a ground for cancellation of
security, be imposed to them. Payment by non-union union registration but shall subject the erring officers or
members of agency fees does not amount to an unjust members to suspension, expulsion from membership, or
enrichment basically because the purpose of such dues is any appropriate penalty.
to avoid discrimination between union and non-union
members (NABAILU v. San Miguel Brewery Inc., GR No. TITLE FIVE: COVERAGE
18170, August 31, 1963).
Article 243: Coverage and Employees’ Rights to Self-
Employee-Members of another union Not considered organization
Free Riders
When the union bids to be the bargaining agent, it Extent of Right to Self-Organization
voluntarily assumes the responsibility of representing all 1. To form, join and assist labor organizations for the
employees in the appropriate bargaining unit. purpose of collective bargaining through
representatives of their own choosing, and
Chapter 3: Rights of another Union NOT considered 2. To engage in lawful concerted activities for the
Free Riders same purpose or for their mutual aid and
protection. (Art. 246)
Article 242: Rights of Legitimate Labor Organizations
Right to Organize Cannot Be Bargained Away
Rights of a Legitimate Labor Organization The right to self-organization must be upheld in the
(USERFOE) absence of express provision of law to the contrary. It
1. Undertake activities for benefit of members cannot be curtailed by a CBA (SPLL v. Calleja, GR No.
2. Sue and be sued 80882, April 24, 1989).
3. Exclusive representative of all employees
4. Represent union members Persons/Employees Eligible to Join a Labor
5. Furnished by employers of audited financial Organization for purposes of collective bargaining
statements 1. All persons employed in commercial, industrial
6. Own properties; and and agricultural (CIA) enterprises, and
7. Exempted from taxes. 2. In religious charitable, medical or educational
(ROME) institutions whether operating for profit or
not.
Persons/ Employees Eligible to Join a Labor Religious Objectors
Organization for mutual aid and protection:  The rights of the members of the
(AIRSIW) Iglesia ni Kristo sect not to join a labor union for
1. Ambulant being contrary to their religious beliefs does not bar
2. Intermittent members of that sect from forming their own union.
3. Rural The recognition of the tenets of that sect should not
4. Self-employed people infringe on the basic right ot self organization
5. Itinerant workers; and granted by the Constitution ot workers regardless of
6. Workers without any definite employers. religious affiliation (Kapatiran v. Calleja, GR No.
82914, June 20, 1988)
Persons/Employees who are not granted the Right to  In fact, they can vote for “No Union’
Self-Organization: (HEMACENGA) in a certification election in the exercise of their right
1. High-level or managerial government employees to self-organization (Reyes v. Trajano, GR No.
(Sec. 3, E.O. 180) 84433, June 2, 1992)
2. Employees of international organizations with
immunities (ICMC v. Calleja, GR No. 85750, Article 244: Rights of Employees in the Public
September 28, 1990); Service
3. Managerial Employees GOCC with Original GOCC without original
a. whose functions are normally considered Charter Charter
as policy-making or managerial; Right to Strike
b. whose duties are of a highly confidential
Employees cannot stage The GOCC is created
or highly technical in nature (Art. 212,
strikes since they are under the corporation
LC);
governed by Civil Service Code, the employees are
4. Members of the Armed Forces of the Philippines,
Law. They are enjoined by covered by the Labor
including police officers, policemen, firemen and
Civil Service Memorandum Code. Therefore the
jail guards (Sec. 4, E.O. 180);
Circular No. 6, under pain employees have the same
5. Confidential Employees (Metrolab Industries Inc.
of administrative sanctions rights as those as
v. Confesor, GR No. 108855, February 28, 1996);
from staging strikes, employees of private
6. Employees of Cooperatives who are its members
demonstrations, mass corporations, one of which
(Benguet Elec. Coop. V. Ferrer-Calleja, GR No.
leaves, walkouts and other is the right to strike.
79025, December 29, 1989). However, they may
concerted activities.
form a worker’s association (NEECO Employees’
Bargaining Rights
Assoc. v. NLRC, GR No. 116066, January 24,
Corporations with original The GOCC created under
2000)
charter cannot bargain the Corporation Code
7. Non-employees (Rosario bros. V. Ople, GR No.
with the government being governed by the
L-53590, July 31, 1984)
concerning the conditions Labor Code can bargain
8. Government Employees, including Government
of their employment. with the government
owned and controlled corporations with original
However, they can concerning the terms and
charter (Arizala v. CA, 189 SCRA 584)
negotiate through conditions of employment.
9. Aliens without valid working permits; or Aliens
collective negotiation Thus, they have limited
with valid working permits but are nationals of a
agreements or MOA with bargaining rights.
country which do not grant Filipinos to exercise
the government on those
the right of self-organization and to join or assist
terms and conditions of
labor organizations (Article 269, Labor Code;
employment, which are not
Department Order No. 9 [1997], Rule II, Sec. 2)
fixed by law. Thus, they
have limited bargaining
Eligibility of Foreigners to Form Labor Organization
rights
Aliens working in the country with valid permits issued by
DOLE, may exercise the right to self-organization and join Purpose of Organization
or assist labor organizations of their own choosing for Can only from, join, or Can form, join, or assist
purposes of collective bargaining; provided, further, that assist labor organization labor organization for
said aliens are nationals of a country which grants the for purposes not contrary purposes of CBA, etc.
same or similar rights to Filipino workers (Art. 269) This to law.
embodies the principle of reciprocity.

Forming, Joining, or Assisting Employees’
Organization
General Rule: All government employees can form, join
or assist employees’ organizations of their own choosing
for the furtherance and protection of their interests. They
can also form labor-management committees, work
councils and other forms of workers’ participation
schemes to achieve the same objectives (Sec. 1, E.O.
180)
Exceptions
1. High-level employees whose functions are
normally considered as policy-making or
managerial or whose duties are of a highly
confidential nature (Sec. 3, E.O. 180); and
2. Members of the Armed Forces of the Philippines
including police officers, policemen, firemen, and
jail guards (Sec 4, E.O. 180)
Note: employees of government corporations
incorporated under the Corporation Code and registered
with SEC are governed by the Labor Code not by E.O.
180. they are allowed to organize for:
1. they are not involved in public service; and
2. terms of employment are not fixed by law.
Protection of the Right to Organize
1. Government employees shall not be
discriminated against by reason of their
membership in employees’ organizations or
participation in the normal activities of their
organization (Sec. 5, E.O 180)
2. Their employment shall not be subject to the
condition that they shall not join or shall relinquish
their membership in the employees’ organizations
(Ibid).
3. Government authorities shall not interfere in the
establishment, functioning or administration of
government employees’ organizations through
acts designed to place such organizations under
the control of government authority (Sec. 6, E.O.
180).
Terms and Conditions of Employment in Government
Services
General Rule: The terms and conditions of employment
or improvement in government services may be the
subject of negotiations between duly recognized
employee’s organizations and appropriate government
authorities (Sec. 13, E.O. 180)
Exception: Those terms and conditions of employment
that are fixed by law (Ibid.)
Negotiable Terms and Conditions of Employment in
GOCCs with Original Charter
1. Schedule of vacation and other leaves;
2. Work assignment of pregnant women;
3. Personnel growth and development
4. Communication system – lateral and vertical
5. Provision for protection and safety
6. Provision for facilities for handicapped personnel;
7. Provision for first-aid medical services for married
women;
8. Annual medical/ physical examination; and
9. Recreational, social, athletic and cultural activities
and facilities (Rules Implementing E.O. 180).
The following are considered NOT negotiable
1. Those which require appropriation of funds; such
as:
a. increase in salary emoluments and
b. other allowance not presently provided
for by law;
c. facilities requiring capital outlays
d. car plan
e. provident fund
f. special hospitalization, medical and
dental services;
g. rice/ sugar/ other subsidies;
h. travel expenses; and
i. increase in retirement benefits
2. Those that involve the exercise of management
prerogatives, such as:
a. appointments
b. promotion
c. assignment/ details
d. reclassification/ upgrading of position
e. revision of compensation structure
f. penalties imposed as a result of
disciplinary actions;
g. selection of personnel to attend seminar,
trainings, study grants
h. distribution of work load
i. external communication linkages
To sum up government employees covered by E.O. No.
180 may organize, even unionize, and negotiate
employment condition, not fixed by law but they cannot
strike. (Azucena, 2007).
Registration of Employees’ Organization

Where to Register
 Government employees’ organizations shall
register with the Civil Service Commission and
DOLE.
 The application shall be files with Bureau of Labor
Relations (BLR), which shall process the same in
accordance with the provisions of LC.
 Applications may also be filed with the Regional
Offices of DOLE, which shall immediately
transmit the said applications to the Bureau of
Labor Relations within 3 days from receipt
thereof. (Sec. 7, E.O. 180)

Issuance of Registration Certificate

 Upon approval of the application, a registration
certificate shall be issued to the organization
recognizing it as a legitimate employees’
organization with the right to represent its
members and undertake activities to further and
defend interest.
 The certificates of registration shall be jointly
approved by the Chairman of the Civil Service
Commission and Secretary of Labor (Sec. 8, E.O.
180)

Voluntary Recognition
A duly registered employees organization shall be
accorded voluntary recognition:
1. Upon a showing that no other employees
organization is registered or is seeking
registration, based on records of the Bureau of
Labor Relations, and
2. The said organization has the majority support of
the rank-and-file employees in said organization
unit (Sec 12, E.O. 180).

Jurisdiction
 Any dispute which remains unresolved after
exhausting all available remedies under existing
laws and procedures may be jointly referred by
the parties to the Public Sector Labor-
Management Council for appropriate action.
 Likewise, the PSLMC has jurisdiction to hear
charges of ULP filed by government employees
against their employer.
 It is composed of the following:
 1. Chairman – Civil Service Commissioner
2. Vice-Chairman – secretary of Labor and
3. Members:
a. Secretary of Finance
b. Secretary of Justice
c. Secretary of Budget (Sec 15, E.O 180)

Article 245: Ineligibility of Managerial Employees to the presence of managerial employees in union
Join in Any Labor Organization: Right of Supervisory membership (Bulletin Publishing Co. Inc. v. Hon.
Employees Sanchez, GR No. 74425, October 7, 1986).

A. Managerial Employees – Note: Art. 245 does not absolutely disqualify managerial
those who are vested with powers of prerogatives to employees from exercising their right of association.
lay down and execute management policies and/or to What it prohibits is merely the right to join labor
hire, transfer, suspend, lay-off, recall, discharge, organizations.
assign or discipline employees.
B. Supervisory Employees – those who, in the interest
Managerial employees Managerial employees of the employer, effectively recommend such managerial
under labor standards under labor relations actions if the exercise of such authority is not merely
Primary duty consists of the Lay down and execute routinary or clerical in nature but requires the use of
management of the management policies independent judgement.
establishment on which and/or to hire, transfer,
they are employed or of a suspend, lay-off, recall, Supervisory Employees May Form, Assist, Join a Labor
department or subdivision. discharge, assign or Organization
discipline employees On their own and NOT with the rank-and-file employees
(R.A. 9481)
Includes the officers and Does not include the
members of the managerial managerial staff since they  Test: Do they exercise independent judgment
staff are classified as supervisor which is not subject to evaluation of other
employees (who may/may department heads/other superiors? If in the
not be eligible to join a affirmative, then they may/must form a labor
labor union with the rank organization of their own (separate from the rank-
and file employees) and-file employees).
 If their responsibilities do not inherently require
To determine whether or To determine an the exercise of discretion and independent
not certain employees are employee’s eligibility in judgment, (or merely routinary/clerical in nature)
covered by Book III of the joining/ forming a labor then they may join the union composed of the
LC on Conditions of union. rank-and-file employees.
employment
Note: It is the nature of the employee’s functions and not
the nomenclature or title given to his job which
Reason for ineligibility determines whether he has a rank and file or managerial
 Managerial employees are the alter ego of the status (Engineering Equipment, Inc. v. NLRC, GR No. L-
employers and thus they are supposed to be on 59221, December 26, 1984).
the side of the employer to act as its
representatives and to see to it that its interests Note: The rank and file union and the supervisors’ union
are well protected. The employer is not assured operating within the same establishment may join the
of such protection if these employees are union same federation or national union (as amended by R.A.
members. 9481).
 In the same manner, the labor union might not be
assured of their loyalty to the union in view of the C. Confidential Employees – A confidential employee is
evident conflict of interest. The union can also one entrusted with confidence on delicate matters, or with
become company-dominated with the custody, handling, or care and protection of the
employer’s property.

 By the very nature of their functions, they (1)

assist and act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate
 management policies in the field of labor
relations. The two criteria are cumulative, and
both must
be met if an employee is to be considered a
confidential employee – e.g., the confidential
relationship must exist between the employee
and his supervisor, and the supervisor must
handle the prescribed responsibilities relating to
labor relations. As such, the rationale behind the
ineligibity of managerial employees to form, assist
or join a labor union equally applies to them.
(PIDI v NLRC, GR No. 88957, June 25, 1992)
Under the doctrine of necessary implication,
confidential employees are similarly disqualified.
(NATU-Republic Planters Bank v. Torres, GR No.
93468, December 29, 1994).
Note: The phrase “in the field of labor relations” is
important. It stresses labor nexus, i.e. confidentiality of
the position is related or linked to labor relations matters.
 Access to information which is regarded by the
employer to be confidential from the business
standpoint, such as financial information or
technical trade secrets, WILL NOT render an
employee a confidential employee (SMC
Supervisors and Exempt Union v. Hon.
Laguesma, et.al, GR No. 110399, August 15,
1997).
 Every managerial position is confidential because
one does not become a manager without having
gained the confidence of the appointing authority.
But not every confidential employee is
managerial, he may be a supervisory or even a
rank-and-file employee.
Article 245-A: Effect of Inclusion as Members of
Employees outside the Bargaining Unit (new
provision inserted by R.A. 9481)
The inclusion as union members of employees outside
the bargaining unit shall NOT be a ground for the
cancellation of the registration of the union. Said
employees are automatically deemed removed from the
list of membership of said union.
Article 246: Non-Abridgment of the Right to Self
Organization
It shall be Unlawful for Any Person to (RCDI)
1. Restrain
2. Coerce
3. Discriminate against, or
4. Unduly interfere with employees and
workers in their exercise of the right to
self-organization
Note: Any act intended to weaken or defeat the right is
regarded by law as an offense, which is technically called
“unfair labor practice.”
TITLE SIX: UNFAIR LABOR PRACTICES
Chapter 1: Concept
Article 247: Unfair Labor Practices
1. Criminal offenses against the State;
2. Violations of civil rights of both labor and
management;
3. Violate the constitutional right of workers and
employees to self-organization;
4. Are inimical to the legitimate interests of both
labor and management, including their right to
bargain collectively and otherwise deal with each
other in an atmosphere of freedom and mutual
respect;
5. Disrupt industrial peace; and
6. Hinder the promotion of healthy and stable
labor-management relations and mutual respect
(unstable labor-management relations).
Elements of Unfair Labor Practice
1. employer-employee relationship between the
offender and the offended; and
2. act done is expressly defined in the Code as an
act of unfair labor practice.
Note: Prohibited acts are all related to the workers’ self-
organizational right and the observance of a CBA,
except Art. 248 (f), dismissing or prejudicing an
employee for giving testimony under the Code.
 1st element of ULP does not apply to yellow dog
condition
 ULP has a technical meaning.
 It is a practice unfair to labor, although the
offender may either be an employer or a labor
organization.
 It refers to acts opposed to workers’ right to
organize (Anti-unionism acts). Without this, the
act, no matter how unfair, is not ULP.
 It commonly connotes anti-unionism
 It also refers to gross violation of CBA provisions.
Gross means the act is malicious and flagrant.

 ULP cases are not, in view of the public interest

involved, subject to compromise.

Aspects of Unfair Labor Practice

Civil Case Criminal Case
Persons Liable

1. Officers and 1. Agents and officers who participated or authorize or

agents of ratifies the act; and
employer; or 2. Agents, representatives, members of the government
2. Labor board, including ordinary members. (Art. 289 & Art.
organization, 249)
officers and agents

Jurisdiction
Labor Arbiters of MTC/RTC, as the case may be (Art. 288)
the NLRC
Quantum of Proof Needed
Substantial Beyond reasonable doubt (subject to prosecution and
evidence punishment)
Prescriptive Period
One year from the One year from the accrual of the ULP act (Art. 290), however,
accrual of the ULP it will be suspended once the administrative case has been
act (Art. 290) filed and would only continue running once the administrative
case has attained finality.
Final judgment in the administrative proceeding finding that
ULP has been committed is a prerequisite in filing a criminal
case for ULP.

Note: Final judgment in the administrative proceedings shall

not be binding in the criminal case nor shall be considered as
an evidence of guilt but merely as a proof of compliance of the
requirements prescribed by the Code.
Chapter 2: Unfair Labor Practices of Employers

Article 248: ULP that May be Committed by an Employer

1. Interference
To interfere with, restrain or coerce employees in the
exercise of their right to self organization.

Test: whether the employer has engaged in conduct

which, it may reasonably be said, tends to interfere with
the free exercise of the employees’ right and it is not
necessary that there be direct evidence that any
employee was in fact intimidated or coerced by the
statements of threats or the employer if there is a
reasonable interference that the anti-union conduct of the
employer does have an adverse effect of self-organization
and collective bargaining (The Insular Life Assurance-
NATU v. The Insular Live Assurance Co., Ltd, No. L-
25291, January 30, 1971)

Totality of Conduct Doctrine

The culpability of employer’s remarks is to be evaluated
not only on the basis of their implications, but against the
background of and in conjuction with collateral
circumstances. (lbid.)

Examples
1. outright and unconcealed intimidation
2. in order that interrogation would not be deemed
coercive:
a. the employer must communicate to the
employee the purpose of questioning
b. assure him that no reprisal would take
place
c. obtain employee participation voluntarily
3. must be free from employer hostility to union
organization
4. must not be coercive in nature
5. intimidating expressions of opinion by employer

Note: An employer who interfered with the right to self-

organization before a union is registered can be held
guilty of ULP (Samahan ng Manggagawa sa Bandolino-
LMCL v NLRC, GR No. 125195, July 17,. 1997.)

Note: it is the prerogative of the company to promote,

transfer, or even demote its employees to other positions
when the interests of the company reasonably demand it.
Unless there are circumstances which directly point to
interference by the company with the employees’ right to
self organization, the transfer of an employee should be
considered as within the bounds allowed by law (e.g.
despite transfer to a lower position, his
original rank and salary remained undiminished)
Rubberworld Phils., v. NLRC, GR No. 75704, July 19,
1989.
2. Yellow Dog Condition
To require as a condition for employment that a person or
an employee shall not join a labor organization or shall
withdraw from one to which he belongs.
Yellow Dog Contract – a promise exacted from workers
as a condition of employment that they are not to belong
to, or attempts to foster, a union during their period of
employment. It is null and void because:
1. It is contrary to public policy for it is tantamount to
involuntary servitude.
2. It is entered into without consideration for
employees in waiving their right to self-
organization.
3. Employees are coerced to sign contracts
disadvantageous to their family.
Note: one of the cases of ULP that may be
committed in the absence of an E-E relationship
3. Contracting Out
To contract out services or functions being performed by
union members when such will interfere with, restrain or
coerce employees in the exercise of their right to self-
organization.
Does Art. 248© mean that an employer cannot
contract out work? NO. Contracting out services
is not ULP per se. It is ULP only when the
following conditions exist:
1. the service contracted out are being
performed by union members; and
2. such contracting out interferes with
restrains, or coerce employees in the
exercise of their right to self organization.
HOWEVER, when the contracting out is being
done for business reasons such as decline—in—
business, inadequacy of equipment or to reduce
cost, then it is a valid exercise of management
prerogative.
Runway Shop – an industrial plan moved by its owners
from one location to another to escape labor regulations
or state laws or to discriminate against employees at the
old plant because of their union activities.
4. Company Domination of Union
To initiate dominate, assist or otherwise interfere with the
formation or administration of any labor organization,
including the giving of financial or other support to it or its
organizers or officers
Company Unionism/Captive Unionism
Considered as a ULP because the officers will be
beholden to the employers and they will not look after the
interest of whom they represent.
Forms
a. Initiation of the Company Union idea by:
1. Outright formation by employer or his
representatives;
2. Employee formation on outright demand or
influence by employer; and
3. Managerially motivated formation by employees.
b. Financial Support to the Union by:
1. Employer defrays union expenses;
2. Pays attorney’s fees to the attorney who drafted
the Constitution or by laws of the union;
c. Employer Encouragement and Assistance
Immediately granting of exclusive recognition as
bargaining agent without determining whether the
union represents majority of the employees.
d. Supervisory Assistance
Soliciting membership, permitting union activities
during work time or coercing employees to join
the union by threats of dismissal or demotion.
5. Discrimination
To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to
encourage membership in any labor organization.
Test: whenever benefits or privileges given to one is not
given to the other under similar or identical conditions
when directed to encourage or discourage union
membership.
Three Components of Discrimination
a. It prohibits discrimination in terms and conditions of
employment in order to encourage or discourage
membership in the union;
b. It gives validity to union security agreements; and
c. It allows an agency shop arrangement whereby
agency fees may be collected from non-union members.
6. Discrimination because of Testimony
To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given or
being about to give testimony under this Code (the only
ULP act which is not anti-unionism).
Subject Matter of Testimony can be anything under the
Code.

 What is ULP is the employer’s retaliatory act
regardless of the subject of employee’s complaint
or testimony. In effect, if a retaliatory act is done
under Art. 118, the consequence is ULP under
Art. 248 (f) Mabeza v. NLRC, GR No. 118506,
April 18, 1997).
7. Violation of Duty to Bargain
To violate the duty to bargain collectively as prescribed by
this Code.
The following acts are held to constitute refusal to
bargain:
1. Alleging that the union is irresponsible;
2. Transferring operation to elude the union; (run-
away shop);
Run-Away Shop – is an unfair labor practice of
management which usually takes place by effecting the
transfer of ownership, the plant itself, or its equipment, or
by temporarily closing its business purposely to bust the
union or to evade the payment of legitimate obligations.
1. Delaying negotiations by discussing unrelated
matters;
2. Refusal to accept requests to bargain;
3. Rejecting a union’s offer to prove it’s majority
claim;
4. Shutdown to avoid bargaining; and
5. Engaging in surface bargaining.
Surface Bargaining – going through the motions of
negotiating without any legal intent to reach an
agreement. It involves the question of whether or not the
employer’s conduct demonstrates an unwillingness to
bargain in good faith or is merely hard bargaining
(Standard Chartered Bank v. Hon. Confesor, GR No.
114974, June 2004).
8. Paid Negotiation
To pay negotiation or attorney’s fees to the union or its
officers or agents as part of the settlement of any issue in
collective bargaining or any other disputes.
9. Violation of CBA
The violation must be gross flagrant and/or malicious
refusal to comply with the economic provision of the CBA
(Art. 261).
Note: “Grossly violate” phrase is an amendment by R.A.
6715. Hence, if the violation is not gross, it is not ULP but
a grievance under the CBA.
Note: All the aforementioned acts (Nos. 1-9) must have a
relation to the employees exercise of their right to self-
organization. Anti-union or anti-
Organization motive must be proved because it is a
definitional element of ULP.
Discrimination For or Against Union Membership
Test of Discrimination: that the discharge of an
employee was motivated by his union activity. Such
inference must be based on evidence, direct or
circumstantial, not upon mere suspicion.
Constructive Discharge – ULP where employer
prohibits employees from exercising their rights under the
Code, on pain of discharge, and the employee quits as a
result of the prohibition.
Principles of Union Security Clauses/Arrangements
1. Protection – to shield union members from whimsical
and abusive exercise of management prerogatives.
2. Benefits – an additional membership will insure
additional source of income to the union in the form of
union dues and special assessment.
3. Self-preservation – it strengthens the union through
selective acceptance of new members on the basis of
commitment and loyalty.
Different Kinds of Union Security Arrangements
(Exceptions to ULP on Interference on the
Employees' right to self organizations)
1. Closed-Shop Agreement
The employer undertakes not to employ any individual
who is not a member of the contracting union and the
said individual once employed must, for the duration
of the agreement, remain a member of the union in
good standing as a condition for continued
employment.
Does not have any retroactivity.
Applies only to new hires.
Exceptions
a. Employees belonging to any religious sect which
prohibit affiliation of their members with any labor
organization are not covered by such agreement.
The free exercise of religious belief if superior to
contract rights (Victoriano v. Elizalde Rope Workers,
No. L-25246, September 12, 1974).
b. Members of the rival union are not covered by such
arrangement.
c. Confidential Employees excluded from rank and file
bargaining unit.
d. Employees excluded by express term of the
agreement.

Semi-Closed Shop Agreement – the
prospective employee must be a member of the
union as a condition of employment and has no
requirement for the employee to remain as
member of the contracting union in good standing
as a condition for continued employment.
2. Union Shop Agreement
Stipulation whereby any person can be employed by
the employer but once employed such employee
must, within a specific period, become a member of
the contracting union and remain as such in good
standing for continued employment for the duration of
the CBA. (Take note of the exceptions in the
preceding number.)
3. Maintenance of Membership Shop Agreement
The agreement DOES NOT require non-
members to join the contracting union BUT
provides that those who are members thereof at
the time of the execution of the CBA and those
who may thereafter, on their own volition, become
members must for the duration of the agreement
maintain their membership in good standing as a
condition for continued employment in the
company for the duration of the CBA.
4. Preferential Shop Agreement
An agreement whereby the employer merely agrees
to give preference to the members of the bargaining
union in hiring, promotion or filing vacancies and
retention in case of lay-off. The employer has the
right to hire from the open market if union members
are not available.
5. Agency Shop Agreement
An agreement whereby employees must either join
the union or pay to the union as exclusive bargaining
agent a sum equal to that paid by the members.
Note: This is directed against “FREE RIDER”
employees who benefit from union activities without
contributing support to the union, to prevent a
situation of non-union members enriching themselves
at the expense of union members.
 Employee members of another rival union are not
considered free riders since when the union
(agent) bids to be the bargaining agent, it
voluntarily assumed the responsibility of
representing all the employees in the appropriate
bargaining unit.
Requirement for a valid Termination by the Employer of
the Services of an Employee Pursuant to a Union or
Closed-Shop Agreement
1. The agreement must be expressed in a clear and
unequivocal way so as not to leave room for
interpretation because it is a limitation to the
exercise of the right to self-organization.
2. Any doubt must be resolved against the
existence of a closed-shop agreement.
3. The agreement can only have prospective
application and cannot be applied retroactively.
4. It can only be exercised by giving the employee
his right to due process
a. The employer has the right to satisfy
himself that there are sufficient bases for
the request of the union
b. The termination of the services of the
employee is not automatic upon the
request of the union
5. It cannot be applied to employees who are
already members of the rival union or to the
employees based on their religious beliefs.
Chapter 3: Unfair Labor Practices of Labor
Organizations
Article 249: Unfair Labor Practices of Labor
Organizations
1. To restrain or coerce employees in the exercise
of their right to self-organization. However, a
labor organization shall have the right to
prescribe its own rules with respect to the
acquisition or retention of membership;
Note: INTERFERENCE by labor organization is not
ULP as long as the interference does not amount to
restraint or coercion.
2. To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect
to whom membership in such organization has
been denied or to terminate an employee on any
ground other than the usual terms and conditions
under which membership or continuation of
membership is made available to other members;
Note: A union member may not be expelled from the
union, and consequently from his job, for personal or
impetuous reasons or for causes foreign to the
closed-shop agreement. (Manila Mandarin
Employees Union v. NLRC, No. L-76989, September
29, 1987)
3. To violate the duty or refuse to bargain
collectively with the employer provided that it is
the representative of the employees;
4. To cause or attempt to cause an employer to pay
or deliver or agree to pay or deliver any money or
other things of value, in the nature of an exaction,
for services which are not performed or not to be
performed, including the demand for a fee for
union negotiations.
Featherbedding (make-work activities) – refers to the
practice of the union or its agents in causing or
attempting to cause an employer to pay or deliver or
agree to pay or deliver money or other things of
value, in the nature of exaction, for services which are
not performed or not to be performed, as when a
union demands that the employer maintain personnel
in excess of the latter’s requirements.
Note: It is not featherbedding if the work is performed
no matter how unnecessary or useless it may be.
5. To ask for or accept negotiation or attorney’s fees
from employers as part of the settlement of any
issue in collective bargaining or any other
dispute; or
6. To grossly violate a collective bargaining
agreement.
Persons Civilly Liable for ULP:
1. Officers and agents of employer;
2. Labor organization, officers and agents; and
3. Agents and officers who participated or
authorized or ratified the act.
Sweetheart Doctrine – considers it ULP for a labor
organization to ask for or accept negotiation or
attorney’s fees from the employer in settling a
bargaining issue or dispute.
Resulting CBA is considered a “sweetheart
contract”, a CBA that does not substantially improve
the employees’ wages and benefits and whose
benefits are far below those that are provided by law.
Blue-sky Bargaining is defined as making
exaggerated or unreasonable proposals. Whether or
not the union is engaged in blue sky bargaining is
determined by the evidence presented by the union
as to its economic demands. Thus, if the union
requires exaggerated or unreasonable economic
demands it is guilty of ULP (Standard
Chartered Bank v. Hon. Confessor, GR No. 114974,
June 16 2004).
TITLE SEVEN: COLLECTIVE BARGAINING AND
ADMINISTRATION OF AGREEMENTS
Article 250: Procedure in Collective Bargaining
Agreement
Collective Bargaining – obligation to meet and
convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect
to wages, hours of work and all other terms and
conditions of employment including proposals for
adjusting any grievances or questions arising under
such agreement and executing a contract
incorporating such agreements if requested by either
party but such duty does not compel any party to
agree to a proposal or to make any concession. (Art.
252)
General Rule: No court or administrative agency or
official shall have the power to set or fix wages, rates
of pay, hours of work or other terms and conditions of
employment EXCEPT as otherwise provided under
the Labor Code.
Purpose: to encourage a truly democratic method of
regulating the relations between the employers and
employees by means of agreements freely entered
into through collective bargaining.
Exceptions:
1. National Wages and Productivity Commission
and Regional Tripartie Wages and Productivity
Board – as to wage fixing (Arts. 99 and 122)
2. National Conciliation and Mediation Board and
the National Labor Relations Commission-as to
wage distortions (Art. 124)
3. Secretary of Labor and Employment and
President of the Philippines-as to certification and
assumption powers over labor disputes (Art. 263
(g))
Jurisdictional Preconditions
1. possession of the status of majority
representation by the employees’ representative
in accordance with any of the means of selection
or designation provided for by the Labor Code;
 2. proof of majority representation (Certification of Note: During the conciliation proceeding in the Board the
the BLR that the representative of the employees parties are prohibited from doing any act which may
is the sole and exclusive bargaining agent having disrupt or impede the early settlement of the disputes (Art.
won in a certification election); and 250 (d) LC).

3. demand to bargain under Article 25(a) of the

Labor Code (Kiok Loy v. NLRC, No. L-54334, Stages in the Negotiation for a Collective Bargaining
January 22, 1986). Agreement (PreNEP-RRAI)
1. PRELIMINARY Process – written notice for
Note: Where a majority representative has been negotiation which must be clear and
designated, it is an ULP for the employer, as a refusal unequivocal.
of collective bargaining, to deal and negotiate with the 2. NEGOTIATION Process
minority representative to the exclusion of the 3. EXECUTION Process – signing of the
majority representative. agreement
4. PUBLICATION for at least 5 days before
Collective Bargaining Agreement (CBA) – a ratification.
contract executed upon request of either the 5. RATIFICATION by the majority of all the
employer or the exclusive bargaining representative workers in the bargaining unit represented in
of the employees, incorporating the agreement, the negotiation (not necessary in case of
reached after negotiations with respect to: arbitral award)
1. wages; 6. REGISTRATION Process
2. hours of work; and a. requisites for registration;
3. all other terms and conditions of employment b. mandatory provisions;
in a bargaining unit, including proposals for c. payment of P1,000;
adjusting any grievance or question under d. 5 copies of CBA; and
such agreement. (Davao Integrated Port e. proof of ratification
Stevedoring Services v. Abarquez, GR no. 7. ADMINISTRATION Process – the CBA shall be
102132, March 19, 1993) (i.e. mandatory jointly administered by the management and
provisions for grievances and arbitration the bargaining agent for a period of 5 years.
machineries) 8. INTERPRETATION AND APPLICATION
Process
Zipper Clause – a stipulation in a CBA indicating that
issues that could have been negotiated upon but not Mandatory Provisions of the CBA
contained in the CBA cannot be raised for negotiation 1. wages;
when the CBA is already in effect. 2. hours of work;
3. grievance machinery;
Procedure in Collective Bargaining 4. voluntary arbitration;
1. When a party desires to negotiate an agreement, 5. family planning;
it shall serve a Written Notice upon the other 6. rates of pay; and
party with a statement of proposals; 7. mutual observance clause
2. Reply by the other party within 10 calendar days
with counter proposals; In addition, the Bureau requires that the CBA should
3. In case of differences, either party may request include a clear statement of the terms of the CBA.
for a conference which must be held within 10
calendar days from receipt of request; Note: Employer’s duty to bargain is limited to
4. If not settled, NCMB may intervene and mandatory bargaining subjects; as to other matters,
encourage the parties to submit the dispute to a he is free to bargain or not to bargain.
voluntary arbitrator;
5. If not resolved the parties may go to where they Article 252: Meaning of Duty to Bargain
want and resort to any other lawful means (either Collectively
to settle the dispute or submit it to a voluntary
arbitrator). Duty to Bargain Collectively
A. Where NO CBA Exists
The performance of a mutual obligation:
 1. to meet and convene promptly, and expeditiously
in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work
and all other terms and conditions of employment
including proposals for adjusting any grievances
or questions arising under such agreement; and
2. to execute a contract incorporating such
agreements if requested by either party.
Limitations
1. The duty to bargain collectively does not compel any
party to:
a. agree to a proposal;
b. make a concession; or
c. make room for “Take it or Leave it” posture.
2. The parties cannot stipulate terms and conditions of
employment which are below the minimum requirements
prescribed by law.
B. Where CBA Exists (See Notes Under Art. 253)
Note: Collective bargaining does not end with the
execution of the agreement. It is a continuous process.
The duty to bargain imposes on the parties during the
term of their agreement the mutual obligation to meet and
confer promptly and expeditiously and in good faith for the
purpose of adjusting any grievances or question arising
under such agreement (Republic Savings Bank v. CIR,
No. L-20303, Sept. 27, 1967).
Four Forms of ULP in Bargaining:
1. failure or refusal to meet and convene;
2. evading the mandatory subjects of bargaining;
3. bad faith in bargaining (boulwarism), including failure
or refusal to execute the CBA, if requested; and
4. gross violation of the CBA.
Note: Violations of the collective bargaining agreement,
expect those which are gross in character, shall no longer
be treated as an unfair labor practice but as a grievance
under the Collective Bargaining Agreement. (Art. 261,
Labor Code; Silva v. NLRC, 274 SCRA 159).
Economic Exigencies Do NOT Justify Refusal to Bargain
An employer has been held not guilty of refusal to bargain
by adamantly rejecting the union’s econothic demands
where he is OPERATING at a loss on a low profit margin,
or in a depressed industry as long as he continues to
negotiate. But financial hardship constitutes no excuse
for refusing to bargain collectively.
Acts NOT Deemed Refusal to Bargain
1. adoption of an adamant bargaining position in
good faith;
2. refusal to bargain over demands for
commission of ULP;
3. refusal to bargain during period of illegal
strike;
4. there is no request for bargaining;
5. union seeks recognition for an inappropriately
large unit;
6. union seeks to represent some persons who
are excluded from the Code;
7. the rank-and-file unit includes supervisors or
inappropriate otherwise;
8. the demand for recognition and bargaining is
made within the year following a certification
election in which the clear choice was “no
union” and no ad interim significant change
has taken place in the unit; and
9. the union makes unlawful bargaining
demands.
Bargaining to the Point of Deadlock or Impasse
1. Over a mandatory subject – insist on bargaining
and will not be construed as bargaining in bad
faith.
Reason: duty to bargain requires meeting and
convening on the terms and conditions of
employment but does not require assent to the
other party’s proposals.
2. Over a non-mandatory subject – party may not
insist on bargaining to the point of impasse,
otherwise, he will be construed as bargaining in
bad faith.
Example: The employer’s insistence that the
union should change its negotiator before
bargaining can proceed to the employees’ wage
and benefits is an instance of bad faith bargaining
because the composition of the negotiating panel
is not a mandatory subject of bargaining.
Hence, if Party A insists on first setting a non-
mandatory subject before tackling a mandatory
subject, Party B may complain that Party A’s
posture is just an excuse to avoid bargaining on
the mandatory, essential subjects of bargaining;
thus, Party B can charge that Party A is
bargaining in bad faith or is evading bargaining
on terms and conditions of employment – in
short, Party A is committing ULP.
Note: What the rule forbids is the posture of
making settlement of a non-mandatory subject a
 pre-condition to the discussion or settlement of a
mandatory subject.
Deadlock – synonymous with impasse or a
standstill which presupposes reasonable effort at
good faith bargaining but despite noble intentions
does not conclude an agreement between the
parties.
In Case of a Deadlock in the Renegotiation of the
CBA, the parties may exercise the following:
1. Call upon the National Conciliation and
Mediation Board (NCMB) to intervene for the
purpose of conducting conciliation preventive
mediation;
2. Refer the matter for voluntary arbitration or
compulsory arbitration;
3. Declare a strike or lockout upon compliance
of the legal requirements. This is the remedy
of last resort.
Article 253: Duty to Bargain Collectively When there
exists a Collective Bargaining Agreement
General Rule: When there is an existing CBA, the duty
bargain collectively shall also mean that neither party
shall TERMINATE nor MODIFY such agreement during its
lifetime. It is the duty of both parties to:
1. keep the status quo; and
2. to continue in the full force and effect the
terms and conditions of the existing CBA.
Exception:
During the 60-day period prior to its expiration, upon
service of a written notice of a party’s intention to
terminate or modify the same, a party may choose to
terminate or modify the non-representational aspect of the
CBA only after the expiration of CBA of fixed duration.
Automatic Renewal Clause
Art. 253 provides that the CBA shall remain effective and
enforceable even after the expiration of the period fixed
by the parties as long as no new agreement is reached by
them.
What May be Done During the 60-Day Freedom
Period
1. A labor union may disaffiliate from the mother
union to form a local or independent union
only during the 60-day freedom period
immediately preceding the expiration of the
CBA. (Take note of the limitation – see
discussions registration of labor unions.)
2. either party can serve a written notice to
terminate or modify the agreement at least 60
days prior to its expiration period (on re-
negotiable/non-representational aspect of the
CBA – see discussion on Art. 253)
3. a petition for certification election may be
filed.
Article 253-A: Terms of a Collective Bargaining
Agreement (Contract-Bar Rule)
Duration of the CBA
With respect to the representation aspect, the same
lasts for 5 years.
With respect to other provisions (economic and non-
economic), the same may last for a maximum period
of 3 years after the execution of the CBA.
Economics Provisions May Include:
1. Wages
2. Family planning
3. Effectivity of the agreement
4. Other terms and conditions of employment
Non-Economic Provisions May Include:
1. Coverage of the bargaining unit
2. Union Security clauses
3. Management prerogatives and/or
rights/responsibilities of employees
4. Grievance machinery and voluntary arbitration
5. No strike no lock-out provision
Effectivity of Retroactivity of Other Economic
Provisions of the CBA
1. If CBA is the very first for the bargaining unit, the
parties have to decide the CBA’s effectivity date.
2. Those made within 6 months after the date of
expiry of the CBA are subject to AUTOMATIC
RETROACTION to the day immediately following
such date of expiry.
3. Example: CBA expired on December 31. New
CBA concluded on March 31. The effectivity date
is January 1.
4. Those not made within 6 months, the parties may
agree to the date of retroaction.
 This rule applies ONLY if there is an
existing agreement. If there is no
existing agreement, there is no
retroactive effect because the date
agreed upon shall be the start of the
period of agreement.
 Note: Article 253-A on retroaction does not apply
if the provisions were imposed by the secretary of General Rule: NO temporary or permanent injunction or
Labor by virtue of arbitration. It applies only if the restraining order in any case involving or growing out of
agreement was voluntarily made by the parties. labor disputes shall be issued by any court or other entity.

Exception: As otherwise provided in Articles 218

(Powers of the Commission/NLRC) and 264 (Prohibited
Activities) of this Code.

Rationale: Injunction contradicts the constitutional

preference for voluntary modes of dispute settlement.

Article 253 Articles 253-A/256 The Following are Authorized to Issue Injunctions or
Freedom Period Restraining Orders
 The notice of Representation aspect of
intention to the CBA shall be for a term 1. NLRC or any division. (Art. 218)
terminate, amend, of five (5). A petition for 2. President. In case of labor dispute in industries
or alter the certification election may which are indispensable to national interest. (Art.
provisions of the be entertained and a 263)
CBA shall be filed certification election may 3. Secretary. In case of labor dispute in industries
within the 60-day be conducted within the 60- which are indispensable to national interest, the
period, immediately day period immediately Secretary may assume jurisdiction over the
prior to the prior to the expiration of the dispute or certify the same to the Commission for
expiration of the CBA. compulsory arbitration. Such assumption or
CBA. certification shall have the effect of automatically
 The economic enjoining the intended or impending strike. If one
provisions, has already taken place, all striking or locked out
however, may be employees shall immediately return to work and
renegotiated not the employer shall immediately re-admit
later than three (3) employees and resume operations.
years. Those
economic Jurisdiction to Issue Injunctions
provisions entered General Rule: Regular courts are without authority to
within 6 months issue injunction orders in cases involving or originating
from the expiry of from labor disputes even if the complaint was filed by
their term as fixed non-striking employees and the employer was made a
in the CBA shall respondent.
retroact to the day
immediately Exception: A regular court may issue injunction to
following such protect the interest of neutral employers in common situs
date, if beyond 6 picketing.
months the
effectivity is by Note: In cases of strikes/picketing, third parties or
agreement of the innocent bystanders may secure a court (regular court)
parties. injunction to protect their rights (PAFLU v. Cloribel GR No.
What May be Changed During the 60-Day L-25171, August 17, 1967). (See notes under Arts. 263
Freedom Period and 264).
Re-negotiable provisions of Representation aspect may
the CBA particularly the be resolved by holding Article 255: Exclusive Bargaining Representation
non-representation aspect certification election. and Worker’s Participation in Policy and Decision-
(Economic Provisions may making
be renegotiated not later
than three years). Extent of the Worker’s Right to Participate in Policy
and Decision-Making Processes
Such right refers ONLY to participation in grievance
Article 254: No Injunction Rule procedures and voluntary modes of settling disputes and
NOT to formulation of corporate programs and policies.
Note: An employer may solicit questions, suggestions
and complaints from employees even though the
employees are represented by a union, provided:
1. the collective bargaining representative executes
an agreement waiving the right to be present on
any occasion when employee grievances are
being adjusted by the employer; and
2. employer acts strictly within the terms of this
waiver agreement

One-Union, One-Company Policy Bargaining Union

This is the proliferation of unions in an employer unit is Unit
discouraged as a matter of policy unless there are The voters are
compelling reasons which would deny a certain class of the CBU,
employees the right to self-organization for purposes of Certification whether union or
collective bargaining. Election non-union
members (Arts.
Exceptions: 255 and 256.)
1. Supervisory employees who are allowed to form The voters are
their own unions apart from the rank-and-file the members of
employees; and Strike Voting the union, not. All
2. The policy should yield to the right of employees of the CBU. (Art.
to form unions for purposes not contrary to law, 263 (f)).
self-organization and to enter into collective The voters are
bargaining negotiations. CBA the CBU, not just
a. Two companies cannot be treated into a Ratification the union
single bargaining unit even if their members. (Art.
businesses are related. 231)
b. Subsidiaries or corporations formed out
of former divisions of a mother company Certification Year – refers to the period wherein
following a reorganization may constitute collective bargaining should begin, which is within 12
a separate bargaining unit. months following the determination and certification of
employees’ exclusive bargaining representative.
Labor Management Council
It deals with the employer on matters affecting the Four Factors in Determining the Appropriate
employee’s rights, benefits and welfare. Bargaining Unit (G-CHE)

 Purposes: 1. Globe Doctrine – the express will or desire of the

1. Promote gainful employment; employees.
2. Improve working conditions; and 2. Community of Interest Doctrine – the substantial
3. Achieve increased productivity (R.A. 6971). and mutuality interest factor.
3. Prior collective bargaining history.
Articles 256-259: Petition for Certification of Election 4. Employment Status, such as:
 Temporary
Bargaining Unit – a group of employees of a given  Seasonal and
employer, comprised of all or less than all the entire body  Probationary employee
of the employees, which, consistent with equity to the
employer, indicate to be best suited to serve the Things to Consider in Determining the Community of
reciprocal rights and duties of the parties under the Interest Doctrine
collective bargaining provision of the law. 1. similarity in the scale and manner of determining
earnings;
2. similarity in employment benefits, hours of work
and other terms and conditions of employment;
3. similarity in the kinds of work performed;
 4. similarity in the qualifications, skills and training Direct Certification – the process whereby the Med-
of the employees; Arbiter directly certifies a labor organization of an
5. frequency of contract or interchange among the appropriate bargaining unit of a company after a showing
employees; that such petition is supported by at least a majority of the
6. common supervision and determination of labor- employees in the bargaining unit. It is no longer allowed
relations policy; by virtue of EO No. 111 which became effective on March
7. history of previous collective bargaining; 4, 1987.
8. desires of the affected employees; and
9. extent of union organization.

Methods to Determine Bargaining Unit

A. Certification Election – the process of
determining by secret ballot the sole and
exclusive bargaining agent of the employees in an Grounds for Dismissal of the Petition for Certification
appropriate bargaining unit, for purposes of collective Election (D.O. 40-03)
bargaining (employees in the 3 payroll period prior to the 1. Petitioner is not listed in the Department’s
certification election may vote). registry of legitimate labor unions or that its
legal personality has been revoked or
 Certification Election NOT Necessary When: cancelled with finality.
2. Petition was filed before or after the freedom
1. employer voluntarily recognizes the said union; period of a duly registered CBA; provided that
and the 60-day period based on the original CBA
2. employees designate the union as the bargaining shall NOT be affected by any amendment,
representative. extension, or renewal of the CBA.
3. Petition was filed within 1 year from entry of
 Nature voluntary recognition or a valid certification,
A Certification is NOT a litigation but merely an consent, or run-off election and no appeal on
investigation of a non-adversarial fact-finding character in the results thereof is pending.
which the Bureau of Labor Relations plays the part of a 4. A duly certified union has commenced and
disinterested investigator seeking merely to ascertain the sustained negotiations with the employer or
investigator seeking merely to ascertain the desire of the there exists a bargaining deadlock which had
employees as to the matter of their representation. been submitted to conciliation or arbitration or
(Airline Pilots Assn. Of the Philippines v. CIR, 76 SCRA had become the subject of a valid notice of
274) strike or lockout to which an incumbent or
certified bargaining agent is a party.
B. Consent Election – voluntarily agreed upon by the 5. In case of an organized establishment, failure
parties with or without the intervention of DOLE. to submit the 25% support requirement for
the filling of the petition for certification
Note: Certification election and consent election are election.
separate and distinct from each other.
C. Voluntary Recognition – the process whereby
Certification Consent Election the employer recognizes a labor organization as the
Election exclusive bargaining representative of the employees
To determine the issue of in the appropriate bargaining unit after a showing that
majority representation of the labor organization is supported by at a la majority
all the workers in the of the employees in the bargaining unit.
appropriate collective
To determine the sole and bargaining unit mainly for Note: Voluntary recognition is ONLY available for
exclusive bargaining agent the purpose of determining unorganized establishments.
of all the employees in an the administrator of the
appropriate bargaining unit CBA when the contracting Summary of the Procedure in Voluntary
for the purpose of collective union suffered massive Recognition (D.O. 40-03)
bargaining disaffiliation but not for the 1. When and Where to file: 30 days from such
purpose of determining the recognition, employer and union shall submit a
bargaining agent for notice of voluntary recognition with the Regional
purposes of collective Office which issued the recognized labor union’s
bargaining. certificate of registration or certificate of creation
of a chartered local.
 2. Requirements: Original and 2 duplicate copies
of:
a. joint statement under oath of voluntary
recognition;
b. certificate of posting of joint statement for
15 consecutive days in at least 2
conspicuous places in the establishment
of the bargaining unit;
c. approximate number of employees in the
bargaining unit and the names of those
who supported the recognition; and

d. statement that the labor union is the only

legitimate labor Certification Election in
organization operating an Organized
within the v. Unorganized Establishment
bargaining unit.
Organized Unorganized
 All accompanying documents of the notice for When Mandatory on the Part of the BLR
Upon the filing of
voluntary recognition shall be certified under oath a verified petition by Upon:
a legitimate
by the employer representative labor organization
and president of a. the filing of a verified petition by a
the recognized labor union.including a national union or legitimate labor organization including
federation which has already issued a a national union or federation which
charter certificate
3. Action on the notice by the Regional to its local chapter
Office, through has already issued a charter certificate
the Labor Relations Division,participating
within 10 in the certification
days from to its local chapter participating in the
election
receipt of the notice of voluntary or a local
recognition. If chapter
there which has certification election or a local chapter
been
is insufficiency of requirements, issued
it must bea complied
charter certificate by which has been issued a charter
the national union
with within 10 days from notice, otherwise, it shall be or federation, certificate by the national union or
questioning
dismissed without prejudice to its resubmission. the majority status of the federation; or
incumbent bargaining
4. Effect: bars the filing of a petition for certification agent within the b. upon the filing of a petition, by the
60-dayforfreedom
election by any labor organization a period period
of 1before the employees to bargain collectively.
expiration
year from date of entry of voluntary of a CBA.
recognition.
NOTE: In cases where the petition
Effect of Voluntary Recognition by Thethe petition must be supported by the was filed by a national union or
Employer
Through voluntary recognition by thewritten consentthe
employer, of at least 25% of all
labor federation, it shall not be required to
organization is recognized by the employees
employer as thein the appropriate disclose the names of the local
bargaining unit.
exclusive bargaining agent which may collectively bargain chapter’s officers and members.
with such employer.
The employer cannot file a petition for The 25% consent signature
certification election: only a legitimate requirement is not applicable in this
labor organization, national union or instance.
federation which has already issued a
charter certificate to its local chapter
participating in the certification
election or a local chapter which has
been issued a charter certificate by
the national union or federation can
file such petition.
Period For Filing the Petition
a. when there is a CBA, the labor any time, subject however to the ONE-
organization can file a petition for ELECTION-PER-YEAR RULE
certification election within the 60-day
freedom period (CONTRACT-BAR
RULE)
b. when there is no CBA, then the
labor organization can file a petition
for certification election at any time,
subject to the DEADLOCK BAR
RULE,
Requisites before a Labor Union can be Declared a
Winner (Double Majority Rule)
1. Majority of the eligible voters cast their votes;
and
2. Majority of the valid votes cast is for such union.

How to Determine the Double Majority Rule

1. In determining the eligible votes cast (FIRST
MAJORITY), include spoiled ballots.
2. In determining valid votes (SECOND
MAJORITY), eliminate spoiled ballots but include
challenged votes.

Run-Off Election
A. run-off election is proper if the following
conditions exist namely:
1. valid election took place because majority of
voted (FIRST MAJORITY);
2. the said election presented at least three choices
(e.g., Union One, Union Two, and No Union);

Note: “No Union” shall not be a choice in the run-off

election.

3. not one of the choices obtained the majority (50%

+1-SECOND MAJORITY) of the valid votes cast;

4. the total votes for the unions is at least 50% of

the votes cast;

5. there is no unresolved challenged votes or

election protest which if sustained can materially
alter the results; and

6. the two choices which garnered the highest votes

will be voted and the one which garners the
highest number of votes will be declared the
winner provided they get the majority votes of the
total votes cast.

Who Participates in the Run-Off Election

The unions receiving the highest and second highest
number of votes cast.
 Distinctions Among Certification Election, Consent Election,
Direct Certification, Run-Off and Re-Run Elections
Purpose Participation of Med-Arbiter
Certification Purpose is to determine the sole Requires a petition for certification
Election and exclusive bargaining agent of election filed by a union or
all the employees in an employer. A Med-Arbiter grants the
appropriate bargaining unit for petition and an election officer is
the purpose of collective designated by the Regional
bargaining Director to supervise the election

NOTE: Med-Arbiter may

determine if there is employer-
employee relationship and if the
voters are eligible
Consent Election Purpose is to determine the issue Held by agreement of the unions
of majority representation of all with or without the participation of
the workers in the appropriate the Med-Arbiter
collective bargaining unit mainly
for the purpose of determining
the administrator of the CBA
when the contracting union
suffered massive disaffiliation
and NOT for the purpose of
determining the bargaining agent
for purposes of collective
bargaining
Direct A labor organization is directly Med-Arbiter certifies that a labor
Certification certified as an appropriate union is the exclusive collective
bargainingunit of a company bargaining representative of the
upon showing that petition is employees of an appropriate
supported b at least a majority of bargaining unit without holding a
the employees in the bargaining certification election, but merely
unit. Direct certification is no on the basis of evidence in
longer allowed. support of the union’s claim that it
is the choice of the majority of the
employees.
Run-Off Election Takes place between theunions
who received the two highest
number of votes in a certification
election with three(3) or more
choices, where not one of the
unions obtained the majority of
the valid votes cast, provided that
the total union votes is at least
50% of the votes cast.
Re-Run Election Takes place in two instances:
a. if one choice receives a
plurality of vote and the
remaining choices results
in a tie; or
b. If all choices received the
same number of votes
In both instances, the NO
UNION is also a choice

Note: Petition for cancellation of registration is not a bar to a Petition for Certification Election. NO
PREJUDICIAL QUESTION shall be entertained in a Petition for Certification Election (D.O. 40-03).
Article 258-A: Employer as Bystander (new provision
inserted by R.A. 9481)
 In all cases, whether the petition for certification
election is filed by a employer or a legitimate labor
organization , the employer shall not be considered a
party thereto with a concomitant right to oppose a
petition for certification election.
 The employer’s participation in such proceedings
shall be limited to:
1. being notified or informed of petitions of such
nature; and
2. submitting the list of employees during the pre-
election conference should the Med-Arbiter act
favorably on the petition
Rules Which Prevent the Holding of a Certification
Election
A. Contract Bar Rule
 While a valid and registered CBA of a fixed
duration is subsisting, the BLR is not allowed to
hold an election contesting the majority status of
the incumbent union during the five year term of
the CBA except during the 60-day period
immediately prior to the expiration of the CBA.
 Requirements in order to invoke Contract-Bar
Rule:
1. Agreement is in writing and signed by all
contracting parties;
2. it must contain the terms and conditions of
employment;
3. covered employees in an appropriate
bargaining unit;
4. it is for a reasonable period or duration;
5. it must be ratified;
6. it must be registered with the Bureau; and
7. the violation of the contract-bar rule or the
existence of a duly registered CBA must be
specifically impleaded as a defense.
Effect of an Invalid and Unregistered CBA
There is no bar and therefore a certification election may
be held.
Note: Registration of CBA only puts into effect the
Contract-Bar Rule but the CBA itself is valid and binding
even if unregistered.

Exception to the Contract-Bar Rule
The existence of a collective bargaining agreement will
not bar certification election in the following instances:
1. The CBA is unregistered, i.e. not certified by the BLR
or not registered by the Regional Office.
2. The CBA is inadequate or incomplete, i.e., it does not
contain all the substantial demands on terms and
conditions and leaves out matters which should have
been stipulated where the stipulation becomes
sweetheart contract.
3. DOCTRIN OF PREMATURE EXTENSION- the CBA
was hastily entered into, i.e., the renewal or extension
of the agreement was premature, frustrating the right
of the employees to petition for a certification election
at the proper time.
4. Withdrawal of affiliation from the contracting union
brought about by schism or mass disaffiliation
5. Contract where the identity of the representative is in
doubt (ALU v. Ferrer-Calleja, Gr No. 85085,
November 6, 1989)
6. CBA entered into between the employer and the
union during the pendency for certification election
(Vassar Industries Employees Union v. Estrella, GR
No. 46562, March 31, 1979).
7. CBA concluded between the employer and the union
(incumbent bargaining agent) is not a bar to a
certification election filed by another union and said
CBA can be renegotiated at the option of the new
bargaining agent (ATU v. Hon. Noriel, No. L- 48367,
January 16, 1979).
8. A CBA registered with falsified supporting documents
(Sec. 5[b], Rule XVI, Book V, Rules implementing the
Labor Code).
9. CBA was concluded in violation of an order enjoining
the parties from entering into a CBA until the issue of
representation is resolved; and
10. Petition is filed during the 60-day freedom period.
Successor-In-Interest Doctrine
When an employer with an existing CBA is succeeded by
another employer, the successor-in-interest who is a
buyer in good faith has no liability to the employees in
continuing employment and the collective bargaining
agreement because these contracts are in personam.
Except:
1. when the successor-in-interest expressly assumes
the obligation;
2. the sale is a device to circumvent the obligation; or
3. the sale or transfer is made in bad faith.
Substitutionary Doctrine
 It is where there occurs a shift in the employees’
union allegiance after the execution of a collective
bargaining contract with the employer, the employees
can change their agent (the labor union) but the
collective bargaining contract which is still subsisting
continues to bind the employees up to is expiration
date. They may, however, bargain for the shortening
of said expiration date.
 The employees cannot revoke the validly executed
collective bargaining contract with their employer by
the simple expedient of changing their bargaining
agent. The new agent must respect the contract
(Benguet Consolidated, Inc. V. Employees’ and
Workers’ Union-PAFLU, No. L-24711, April 30, 1968).
Limitations as to its Application
It cannot be invoked to support the contention that a
newly certified collective bargaining agent automatically
assumes all the personal undertakings of the former
agent – like the “no strike clause” in the CBA executed by
the latter (ibid).
B. Deadlock Bar Rule
 A petition for certification election cannot be
entertained if, before the filing of the petition for
certification election, a bargaining deadlock to
which an incumbent or certified bargaining agent
is a party, had been submitted to conciliation or
abitration or had become the subject of a valid
notice or strike or lockout.
Deadlock – arises when there is an impasse, which
presupposes reasonable effort at good faith bargaining
which, despite noble intentions, did not conclude in an
agreement between the parties.
Indications of a Genuine Deadlock
1. The submission of the deadlock to a third party
conciliator or arbitrator; and
2. The deadlock is the subject of a valid notice of strike
or lockout.
C. Negotiation Bar Rule
 A petition for certification election cannot be
entertained if, before the filing of the petition for
certification election, the duly recognized or
certified union has commenced negotiations with
the employer in accordance with Art. 250 of the
Labor Code.
D. Certification Year Rule
 No petition for certification election may be filed
within one year form the date of a valid
certification, consent, or run-off election or from
the date of voluntary recognition.
Examples of Bad Faith Bargaining
1. Surface Bargaining – occurs when employer
constantly changes its positions over the agreement.
2. Boulwarism – occurs:
a. When the employer directly bargains with the
employee disregarding the union.
  The aim was to deal with the Union
through the employees, rather than with
the employees through the union.
b. Employer submits its proposals and adopts a
“take it or leave it” stand. This is not
negotiation because the “take it or leave it”
stand implies threat
TITLE SEVEN-A: GRIEVANCE MACHINERY AND
VOLUNTARY ARBITRATION (AS INCORPORATED BY
R.A. 6715)
Article 260: Grievance Machinery and Voluntary
Arbitration
Grievance Machinery – a mechanism for the adjustment
of controversies or disputes arising from the interpretation
or implementation of the CBA and the interpretation or
enforcement of company personnel policies.
Grievance – arises when a dispute or controversy arises
over the implementation or interpretation of a CBA or
from the implementation or enforcement of company
personnel policies, and either the union or the employer
invokes the grievance machinery provision for the
adjustment or resolution of such dispute or controversy.
Nature of Grievance Procedure:
 It is a “must” provision in any CBA and no collective
agreement can be registered in the absence of such
procedure.
 It is a part of the continuous process of collective
bargaining intended to promote a friendly dialogue
between labor and management as a means of
maintaining industrial peace.
Note: Waiver of grievance machinery procedure does not
amount to a relinquishment of employee’s right to avail of
voluntary arbitration (Apalisok v. RPN, May 29, 2003)
Voluntary Arbitration – contractual proceedings where
parties to a dispute select a judge of their own choice and
by consent submit their controversy to him for
determination.
Note: All grievances not settled within 7 days from the
date of its submission to the grievance machinery shall
automatically be referred to voluntary arbitration
prescribed in the CBA.
 Although the provision mentions “parties to a
collective bargaining agreement,” it does not mean
that a grievance machinery cannot be set up in a
CBA-less enterprise. In any work place where
grievance can arise, a grievance machinery
(regardless of name) can be established.
 In a unionized company, Art. 255 allows an employee
whether union member or not, to raise a grievance
directly to the employer.
Arbitration May be Initiated By:
1. Submission Agreement – where the parties define the
disputes to be resolved; or
2. Demand or notice invoking a collective agreement
arbitration clause.
Distinguished from Mediation
A mediator is a disinterested 3rd party who helps settle
disputes involving terms and conditions of a CBA. He is
assigned and paid by the State and is not selected by the
parties. He renders no final and binding decision, but
merely suggests solutions.
Effect of Merger and Consolidation
 Wiley Doctrine – It states that, a duty to arbitrate
arising from a collective bargaining agreement
survives the employer’s ceasing to do business as a
separate entity after its merger with a substantially
large corporation, so as to be binding on the larger
corporation, so as to be binding on the larger
corporation, where relevant similarity and continuity
of operations across the change in ownership is
evidenced by the wholesale transfer of smaller
corporation’s employees to the larger corporation’s
plant.
Article 261: Jurisdiction of Voluntary Arbitrators or
Panel of Voluntary Arbitrators
Arbitrable Disputes
1. Contract-negotiation disputes – disputes as to terms
of CBA
2. Contract-interpretation disputes – disputes arising
under an existing CBA, involving such matters as the
interpretation and application of the contract, or
alleged violation of its provisions.
Jurisdiction of Voluntary Arbitrators
 Exclusive Original Jurisdiction Conferred By Law
1. All grievances arising from the interpretation of
the CBA;
2. those arising from the interpretation or
enforcement of company personnel policies;
3. hear and decide wage distortion issued arising
from the application of any wage orders in
organized establishments; and
4. unresolved grievances arising from the
interpretation and implementation of the
productivity incentive programs under R.A. 6071.
Note: it is the Labor Arbiter and not the grievance
machinery which has jurisdiction over dismissals pursuant
to the union security clause. Violations of the CBA, except
those which are gross in character, shall no longer be arbitrations in
treated as ULP and be resolved as grievance. similar cases.
Appeal is to the Appeal is to a
Gross Violation – flagrant and/or malicious refusal to CA under Rule higher court
comply with the economic provisions of the CBA. 43 of the Rules under the Rules
of Court of Court and B.P.
 Jurisdiction by Agreement of the Parties (Art. 129.
262)
The disputes the parties may submit to a Voluntary Judicial Review Grounds (JADES)
Arbitrator can include any or all the disputes 1. Lack of Jurisdiction;
mentioned in Art. 217 which otherwise fall under the 2. Grave Abuse of discretion;
exclusive jurisdiction of a Labor Arbiter. 3. Violation of Due process;
4. Erroneous interpretation of the law; and
Distinctions among a Voluntary Arbitrator, Mediator 5. Denial of Substantial Justice.
and a Court of Law
Certiorari Applicable
Arbitrator Mediator Court A Voluntary Arbitrator is a “quasi-judicial” instrumentality
(Sec. 9, B.P. 129, as amended by R.A. 7902). Its
A person A disinterested Regular Courts.
decisions are therefore appealable to CA under Rule 43
accredited by the party, usually a
of the Rules of Court. Hence, a petition for certiorari
Board as such or government
under Rule 65 of the Rules of Court will lie ONLY where a
a person named employee who
grave abuse of discretion or an act without or in excess of
or designated in helps in settling
jurisdiction of the voluntary arbitrator is shown, which may
the CBA by the disputes
be filed with the Court of Appeals.
parties to act as involving terms
their Voluntary and conditions of
(See Chart after Book V For Comparative Chart on Areas
Arbitrator or one a CBA and is
of Jurisdiction and Remedies)
chosen with or NOT selected by
without the the parties, but is
TITLE EIGHT: STRIKES AND LOCKOUTS AND
assistance of the usually assigned
FOREIGN INVOLVEMENT IN TRADE AND UNION
NCMB, pursuant and paid by the
ACTIVITIES
to a selection State
procedure
Chapter 1: Strikes and Lockouts
agreed upon in
the CBA, or any
Article 263: Strikes, Picketing and Lockouts
official authorized
by the Sec. Of
Concerted Activity – one undertaken by two or more
labor to act as
employees or by one on behalf of the others.
Voluntary
Arbitrator upon
Strike – any temporary stoppage of work by the
written request
concerted action of employees as a result of an industrial
and agreement
or labor dispute.
of parties to a
labor dispute.
Land Dispute – includes any controversy or matter
Informal A mediator Formal
concerning terms or conditions of employment or the
proceedings; renders no final proceedings,
association or representation of persons in negotiations,
Arbitrator and binding Rules of Court
fixing, maintaining, changing or arranging the terms and
determines what decision and and the Rules on
conditions of employment, regardless of whether or not
is admissible merely suggests Evidence apply
the disputants stand in the proximate relation of
evidence. solutions. He
employers and employees. (Gold City Integrated Port
usually suggests
Service, Inc. v. NLRC, 245 SCRA, 627).
that parties
submit the issue
Importance: It is the most effective weapon of labor in
to an arbitrator
protecting the rights of employees to improve the terms
Arbitrators are Judges are and conditions of their employment.
not obliged to required to 1. Government employees may form labor unions but
follow precedents observe stare are not allowed to strike.
set by other decisis.
2. Only legitimate labor organizations are given the right
to strike.
3. Unionized workers may hold a protest action but not a
strike.
4. Not all concerted activities are strikes; they may only
be protest actions. And they do not necessarily cause
work stoppage by the protesters. A strike, in contrast,
is always a group action accompanied by work
stoppage.
Lockout – means the temporary refusal of an employer
to furnish work as a result of an industrial or labor dispute.
Note: Strike and lockout are similar in the sense that they
connote temporary stoppage of work. The difference is
that strike is done by employees or labor union while
lockout is done by the employer.
Boycott – an attempt, by arousing a fear of loss, to
coerce others, against their will to withhold from one
denominated “unfriendly to labor” their beneficial business
intercourse.
Slowdown – a method by which one’s employees,
without seeking a complete stoppage of work, retard
production and distribution in an effort to compel
compliance by the employer with the labor demands
made upon him.
Picketing – act of marching to and from the employer’s
premises, usually accompanied by the display of placards
and other signs making known the facts involved in a
labor dispute. This is an exercise of one’s freedom of
speech.
Strike-Breaker – any person who obstructs, impedes or
interferes by force, violence, coercion, threats or
intimidation with any peaceful picketing by employees
during any labor controversy affecting wages, hour or
conditions of work or in the exercise of the right to self
organization or collective bargaining.
Strike Area – the establishment, warehouse, depots,
plants or offices, including the sites or premises used as
runaway shops of the employer struck against, as well as
the immediate vicinity actually used by picketing strikers
in moving to and fro before all points of entrance to and
exit from said establishment.
Types of Strikes
1. Economic strikes – used to secure the economic
demands such as higher wages and better working
conditions for the workers.
2. ULP strike – protest against ULP of management.
Forms of Strikes and Their Validity
A. Sit-Down Strike – characterized by a temporary work
stoppage of workers who there upon seize or occupy
property of the employer or refuse to vacate the
premises of the employer.
ILLEGAL: amounts to a criminal act because the
employees trespass on the premises of the employer.
B. Wildcat Strike – work stoppage that violates the labor
contract and is not authorized and is disowned by the
union.
ILLEGAL: fails to comply with certain requirements of
the law, to wit: notice of strike, vote and report on
strike vote.
C. Sympathetic strikes – work stoppages of workers of
one company to make common cause with other
strikers of other companies, without demands or
grievances of their own against the employer.
ILLEGAL: because there is no labor dispute between
the workers who are joining the strikers and the
latter’s employer.
D. Secondary Strikes – are work stoppages of workers
of one company to exert pressure on their employer
so that the latter will in turn bring pressure upon the
employer of another company with whom another
union has a labor dispute.
ILLEGAL: because there is no labor dispute involved.
Note: A strike can validly take place only in the
presence of and in relation to a labor dispute between
employer and employee.
E. Cause Oriented Strikes – to make a stand on certain
national issues.
“Welga ng Bayan” ILLEGAL: a welga ng bayan is
illegal because it is a political strike and therefore
there is neither a bargaining deadlock nor any ULP, it
is a political rally.
F. Quickie Strikes – brief and unannounced temporary
work stoppage.
Grounds for the Declaration of Strike
1. Deadlock in collective bargaining (ECONOMIC);
and/or
2. Unfair Labor Practices (POLITICAL).
Economic vs. Political Strike
Economic Strike ULP Strike (Political)
Nature
A voluntary strike because An involuntary strike; the
the employee will declare a labor organization is forced 5. The work stoppage is done through the concerted
strike to compel to go on strike because of action of the employees; and
management to grant its the ULP committed against 6. The striking group is a legitimate labor organization
demands. them by the employer. It is and in case of bargaining deadlock, is the employees
an act of self defense since sole bargaining representative.
the employees are being
pushed to the wall and their Non-Strikeable Issues (NILA) (Article 263 (b); Dept.
only remedy is to stage a Order no. 9, Rule 12 Sec. 2)
strike. 1. Violations of CBA which are not gross in character
shall be resolved via the Grievance Machinery;
Initiated by 2. Inter-union or intra-union disputes;
The collective bargaining Either: 3. Labor standards cases such as wage orders
agent of the appropriate a. Collective bargaining (Guidelines governing Labor Relations [19 Oct. 1987]
bargaining unit can declare agent; or issued by Sc. Drilon; see also Article 261, LC;
an economic strike b. The legitimate labor 4. those issues which had already been brought to
organization in behalf voluntary or compulsory arbitration.
of its members.
Tests in Determining the Legality of a Strike
Cooling Off Period A. Purpose Test – the strike must be due to either:
30 days from the filing of 15 days from the filing of 1. Bargaining Deadlock;
the notice of strike before the notice of strike 2. Unfair Labor Practice
the intended date of actual B. Compliance with Procedural and Substantive
strike subject to the 7-day Requirements of Law:
strike ban. 1. Notice of Strike – must be filed prior to the
Exception to the Colling-Off Period intended date of strike, taking into consideration
No exception mandatory Cooling-Off period may be the cooling-off period.
dispensed with, and the Note: the failure of the union to serve the company a
union may take immediate copy of the notice of strike is a clear violation of
action in case of dismissal Section 3, Rule XXII, Book V of the Rules
from employment of their Implementing the Labor Code. The Constitutional
officers duly elected in precepts of due process mandate that the other part
accordance with the union’s be notified of the adverse action of the opposing party
constitution and by-laws, (Filipino Pipe and Foundry Corporation v. NLRC, 318
which may constitute union SCRA 68).
busting where the
existence of the union is 2. Cooling-Off Period before the intended date of
threatened actual strike subject to the 7-day strike ban.
Strike Duration Pay in Case of A Legal Strike a. Bargaining deadlock – 30 days
Not entitled to said pay Said pay may be awarded b. ULP – 15 days
based on the principle that in the discretion of the c. Union Busting – cooling-off period need not
a “fair day’s wage accrues authority deciding the case. be observed and the union may take action
only for a fair day’s labor”. immediately after the strike vote is conducted
and results submitted to regional branch.
Characteristics of Strikes:
Cooling-Off Period – that period of time given the
1. There must be an established E-E relationship
NCMB to mediate and conciliate the parties. It is that
between the strikers and the person/s against whom
span of time allotted by law for the parties to settle
the strike is called;
their disputes in a peaceful manner, before staging a
2. The existence of a dispute between the parties and
strike or lockout
the utilization by labor of the weapon of concerted
refusal to work as a means of persuading or coercing
3. Strike Vote – a requirement wherein the decision
compliance with the working men’s demands;
do declare a strike must be:
3. The contention advanced by the workers that
a. Approved by a majority of the total union
although the work ceases, the employment relation is
membership in the bargaining unit concerned
deemed to continue albeit in a state of belligerent
(not of the whole bargaining unit); and
suspension;
b. Obtained by secret ballot in meeting or
4. There is work stoppage, which stoppage is
referenda called for the purpose.
temporary;
 Purpose: to ensure that the intended strike is a
majority decision.
4. 7-Day Strike Ban – the 7-day waiting period
before the date of the purported strike (within
which the union intending to conduct a strike
must at least submit a report to the Department
as to the result of the strike vote) intended to give
the Department an opportunity to verify whether
the projected strike really carries the imprimatur
of the majority of the union members in addition
to the cooling-off period before actual strike.
 Should the strike vote be taken within or
outside the cooling-off period?
The law does not specify but NCMB’s Primer
on Strike, Picketing and Lockout states that if
the strike vote is filed within the cooling-off
period, the 7-day requirement “shall be
counted from the day following the expiration
of the cooling-off period”
C. Means Employed Test – a strike may be legal at is
inception but eventually be declared illegal if the
strike is accompanied by violence which is
widespread, pervasive and adopted as a matter of
policy and not merely violence which is sporadic
which normally occurs in a strike area. (See
prohibited activities under Art. 264)
Note: The 3 tests MUST concur. Non compliance with any
of the aforementioned requisites renders the strike illegal
Good Faith Strike Doctrine – a strike may be
considered legal where the union believed that the
company committed ULP and the circumstances
warranted such belief in good faith, although
subsequently such allegations of ULP are found out as
not true (Bacus v. Ople, GR No. L- 56856, October 23,
1984)
Doctrine of means and Purposes – a strike is legal
when lawful means concur with lawful purpose (GOP-
CCP Workers v. CIR, GR No. L-33015 September 10,
1979)
When Strike is ILLEGAL
1. contrary to specific prohibition of law, such as strike
by employees performing governmental functions;
2. violates a specific requirements of law;
3. declared for an unlawful purpose, such as inducing
the employer to commit ULP against non-union
employees;
4. employs unlawful means in the pursuit of its objective,
such as widespread terrorism of non-strikers;
5. declared in violation of an existing injunction;
6. contrary to an existing agreement, such as a no strike
clause or conclusive arbitration clause
When can the Secretary of Labor Assume
Jurisdiction Over a Strike
 There exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the
national interest.
 The Secretary of Labor may:
1. assume jurisdiction and decide it, or
2. certify the same to the NLRC for compulsory
arbitration.
Note: What constitutes “indispensable industry” is based
solely upon the discretion of the Secretary of Labor.
Effects of the Assumption of Jurisdiction of the
Secretary
1. automatically enjoins the intended or impending strike
or lockout as specified in the assumption or
certification order;
2. if one has already taken place at the time of
assumption or certification, all striking or locked-out
employees shall immediately return to work; and
3. the employer shall immediately resume operations
and re-admit all workers under the same terms and
conditions prevailing before the strike or lockout.
Note: A motion for reconsideration does not suspend the
effects as the assumption order is immediately executory.
Issues that the Secretary of Labor Can Resolve When
He Assumes Jurisdiction over a Labor Dispute
1. Only issues submitted to the Secretary may be
resolved by him (PAL v. Sec. Of Labor, GR No.
January 23, 1991, January 23, 1991)
2. Issues submitted to the Secretary for resolution and
such issues involved in the labor dispute itself (St.
Scholastica’s Collage v. Torres, GR No. 100158,
June 29, 1992).
3. Secretary of Labor may subsume pending labor
cases before Labor Arbiters which are involved in the
dispute and decide even issues falling under the
exclusive and original jurisdiction of Labor Arbiters
such as the declaration of legality or illegality of strike
(Int’l Pharmaceuticals v. Sec. Of Labor, GR. No.
92981-8, 3 January 9, 1992).
4. Power of Secretary of Labor is plenary and
discretionary (St. Luke’s Medical Center v. Torres,
GR No. 99395, June 29, 1993).
Entitlement to Strike Duration Pay
General Rule: Strikers are not entitled to their wages
during the period of a strike, even if the strike is legal.
Exceptions:
1. In case of a ULP strike, in the discretion of the
authority deciding the case (see table for more
distinction between Economic and ULP strike.)
2. Where the strikers voluntarily and unconditionally
offered to return to work, but the employer refused to
accept the offer (e.g. “we will return tomorrow” and
NOT “willing to return provided”).
Note: They are entitled to backwages from the date the
offer was made.
3. Where there is RETURN-TO-WORK ORDER and the
employees are discriminated against
Rules on Reinstatement of Striking Workers
General Rule: Striking employees are entitled to
reinstatement, regardless of whether or not the strike was
the consequence of the employer’s ULP.
Reason: Because while out on strike, the strikers are not
considered to have abandoned their employment, but
rather have only ceases from their labor.
 The declaration of a strike is NOT a renunciation of
employment relation.
Exceptions:
The following are NOT entitled to reinstatement:
1. union officers who knowingly participate in an illegal
strike; and
2. any striker/union member who knowingly participates
in the commission of illegal acts during the strike.
Note: Those union members who joined an illegal strike
but have not committed any illegal act shall be reinstated
but without any backwages.
Rules in Strike in Hospitals
1. It shall be the duty of striking employees or locking
out employer to provide and maintain an effective
skeletal workforce of medical and other health
personnel for the duration of the strike or lockout
2. Secretary of Labor may immediately assume
jurisdiction within 24 hours from knowledge of the
occurrence of such strike or lock-out or certify it to the
Commission for compulsory arbitration.
Article 264: Prohibited Activities
A. Labor Organizations
NO labor organization or employer shall declare a
strike or lockout:
1. without first having bargained collectively in
accordance with Title VII of this Book;
2. without first having filed the notice required in Art.
263; or
3. without the necessary strike or lockout vote first
having been obtained and reported to DOLE.
B. No strike or Lockout shall be declared:
1. AFTER assumption of jurisdiction by the
President of the Secretary of Labor; or
2. AFTER certification or submission of the dispute
to compulsory or voluntary arbitration; or
3. DURING the pendency of cases involving the
same grounds for the strike or lockout.
 Third Persons
NO person (3rd persons) shall obstruct, impede or
interfere with by force, violence, coercion, threats
or intimidation:
1. any peaceful picketing by employees during
any labor controversy or in the exercise of the
right of self-organization or collective
bargaining; or
2. shall aid or abet such obstruction or
interference.
C. Employers
NO employer shall use or employ any STRIKE-
BEARER nor shall any person be employed as a
strikebreaker
D. Public Official or Employee
NO public official or employee, including officers and
personnel of the New Armed Forces of the Philippines
or the Integrated National Police, or armed persons:
1. shall bring in, introduce or escort in any manner,
any individual who seeks to replace strikes in
entering or leaving the premises or a strike area,
or work in place of the strikers,
2. The police force shall keep out of the picket lines
unless actual violence or other criminal acts
occur therein:
Provided, that nothing herein shall be interpreted to
prevent any public officers from taking any measure
necessary to:
1. maintain peace and order;
2. protect life and property; and/or
3. enforce the law and legal order.
E. Persons Engaged in Picketing
NO person engaged in picketing shall:
1. commit any act of violence, coercion or
intimidation; or
2. obstruct the free ingress to or egress from the
employer’s premises for lawful purposes; or
3. obstruct public thoroughfares
Article 265: Improved Offer Balloting
Improved Offer Balloting – a referendum conducted by
the NCMB on or before the 30 th day of the strike, for the
purpose of determining whether or not the improved offer
of the employer is acceptable to the union members
Reduced Offer Balloting – a referendum conducted by
the NCMB for the purpose of determining whether or not
the reduced offer of the union is acceptable to the board also intended to shield workers from unwarranted and
of directors, trustees or partners. unconsented DEMOTION and TRANSFER.

Improved Offer Balloting Reduced Offer Balloting Reliefs Available to an Illegally Dismissed Employee
1. Reinstatement; and/or
Purpose 2. Payment of backwages
1. To determine whether 1. To determine whether
or not the improved or not the improved Reinstatement – restoration of the employee to the state
offer of the offer of the UNION is from which he ahs been unjustly removed or separated
EMPLOYER is acceptable to board, without loss of seniority rights and other privileges.
acceptable to the union trustees and partners.
members 2. To ascertain the real Forms of Reinstatement
2. To ascertain the real sentiment of the silent 1. Actual or Physical Reinstatement – the employee
sentiment of the silent majority of the union shall be admitted back to work.
majority of the union members on strike. 2. Payroll Reinstatement – the employee is merely
members on strike. reinstated in the payroll.
Period of Filing
On or before the 30th day of On or before he 30th day of What is the Effect of the Reversal of Labor Arbiter’s
the strike the lockout Decision to the Reinstated Employee?

Article 266: Arrest and Detention
General Rule: A police officer cannot arrest or detain a
union member for union activities without previous
consultations with the Secretary of Labor
Except on the ground of:
1. National security;
2. public peace; and
3. commission of a crime.
 An arrest can be lawfully made in the following cases:
1. Any person who obstructs the free and lawful
ingress and egress from the employer’s premises
or who obstructs public thoroughfares.
2. Any person who shall have in his possession
deadly weapons in violation of B.P Bldg. 6 and
firearms and explosives (Guidelines for the
conduct of PNP/AFP Personnel in Labor
Disputes)
BOOK SIX: POST-EMPLOYMENT
TITLE ONE: TERMINATION OF EMPLOYMENT
Article 279: Security of Tenure
Security of Tenure- the constitutional right granted the
employee, that the employer shall not terminate the
services of an employee except for just cause or when
authorized by law. It extends to regular (permanent) as
well as non-regular (temporary) employment (Kiamco v.
NLRC, GR No. 129449, June 29, 1999)
Note: Security of tenure clause is not confined to cases of
termination of employer-employee relationship alone. It is
If the decision of the labor arbiter is later reversed on
appeal upon the finding that the ground for dismissal is
valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund
the salaries s/he received while the case was pending
appeal, or it can be deducted from the accrued benefits
that the dismissed employee was entitled to receive from
his/her employer under existing laws, collective
bargaining agreement provisions, and company practices.
However, if the employee was reinstated to work during
the pendency of the appeal, then the employee is entitled
to the compensation received for actual services
rendered without need of refund (Citibank v. NLRC, G.R.
Nos. 142732-33, December 4, 2007)
May a Court order the Reinstatement of a Dismissed
Employee Even if the Prayer of the Complaint did
NOT include such relief?
YES. So long as there is a finding that the employee was
illegally dismissed, the court can order the reinstatement
of an employee even if the complaint does not include a
prayer of r reinstatement, unless, of course, the employee
has waived his right to reinstatement. By law, an
employee who is unjustly dismissed is entitled to
reinstatement, among others. The mere fact that the
complaint did not pray for reinstatement will not prejudice
the employee, because technicalities of law and
procedure are frowned upon in labor proceedings
(Pheschem Industrial Corp. v. Morldez, GR No. 1161158,
May 9, 2005)
What happens if there is an Order of Reinstatement
but the position is NO longer available?
The employee should be given a substantially equivalent
position. If NO substantially equivalent position is
available, reinstatement should not be ordered because
that would in effect compel the employer to do the
impossible. In such a situation, the employee should
merely be given separation pay consisting of one month
salary for every year of service (1:1). (Grolier Int’l Inc. v.
ELA, GR No. 83523, August 31, 1989)
Doctrine of Strained Relations
 When the employer can no longer trust the employee
and vice-versa, or there were imputations of bad faith
to each other, reinstatement could not effectively
serve as a remedy. This doctrine applies only to
positions which require trust and confidence. (Globe
Mackay v. NLRC, GR No. 82511, March 3, 1992)
 Under the circumstances where the employment
relationship has become to strained to preclude a
harmonious working relationship, and that all hopes
at reconciliation are after reinstatement, it would be
more beneficial to accord the employee backwages
and separation pay.
Separation Pay in Lieu of Reinstatement
Proceeds from al illegal dismissal wherein reinstatement
is ordered but cannot be carried out as in the following
cases:
1. Reinstatement cannot be effected in view of the long
passage of time or because of the realities of the
situation;
2. That it would be inimical to the employer’s interest;
3. Reinstatement may no longer be feasible;
4. It will not serve the best interest of the parties
involved;
5. Company will be prejudiced by the reinstatement;
6. It will not serve a prudent purpose; and
7. That there is a resultant strained relations
Note: Under present laws and jurisprudence, separation
pay may be viewed in four ways:
1. in lieu of reinstatement in illegal dismissal cases,
where the ee is ordered reinstated but reinstatement
is not feasible
2. as employer’s statutory obligation in cases of legal
termination due to authorized causes under Art. 283
and 284;
3. as financial assistance, as an act of social justice and
even in case of legal dismissal under Art. 282;
4. as employment benefit granted in CBA or company
policy (Poquiz, 2006)
Backwages – the relief given to an employee to
compensate him for lost earnings during the period of his
dismissal. It presupposes illegal termination.
Note: Entitlement to backwages of the illegally dismissed
employee flows from law. Even if he does not ask for it, it
may be given. The failure to claim backwages in the
complaint for illegal dismissal is a mere procedural lapse
which cannot defeat a right granted under substantive
law. (St. Michael’s Institute v. Santos, GR No. 145280,
December 4, 2001)
How it is Computed
Under existing law, backwages is computed from the time
of the illegal dismissal up to time of actual reinstatement
Rule on Backwages
The backwages to be awarded should not be diminished
or reduced by earnings elsewhere during the period of his
illegal dismissal. The reason is that the employee while
litigating the illegality of his dismissal must still earn a
living to support himself and his family (Bustamante vs.
NLRC, G.R. No. 111651, March 15, 1996; Buenviaje v.
CA. GR No. 147806, November 2002)
Included in the Computation of Backwages
1. transportation and emergency allowances;
2. vacation or service incentive leave and sick leave;
and
3. 13th month pay.
Note: Facilities such as uniforms, shoes, helmets and
ponchos should NOT be included in the computation of
backwages.
Reason: said items are given free, to be used only during
official tour of duty not for private of personal use.
Note: The award of backwages is computed on the basis
of a 30-day month (JAM Trans Co. v. Flores, GR No. L-
68555, March 19, 1993).
Circumstances that Prevent Award of Backwages
1. Dismissal for cause;
2. Death, physical or mental incapacity of the employee;
3. Business reverses;
4. Act of State; and
5. Detention in prison.
Which Takes Precedence in Conflicts Arising
Between Employer’s Management Prerogative and
the Employee’s Right to Security of Tenure?
The employee’s right to security of tenure. Thus. An
employer’s management prerogative includes the right to
terminate the services of the employee but this
management prerogative is limited by the Labor Code
which provides that the employer can terminate an
employee only for a just cause or when authorized by
law. This limitation is because no less than the
constitution recognizes and guarantees employee’s right
to security of tenure (Art. 279, Labor Code, Art. XIII, Sec.
3, Constitution)
Article 280: Regular and Casual Employment
1. Regular Employment
 Employment arrangement where the employee:
a. has been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer; or
b. has rendered al least one (1) year of service,
whether such service is continuous or broken,
with respect to the activity in which he is
employed.
Test of Regularity: reasonable connection between
the particular activity performed by the employee in
relation to the usual business or trade of the
employer.
Note: Whether the work undertaken by the employee
is necessary or desirable can be determined by
looking at the services rendered and its relation to the
general scheme under which the business or trade is
pursued in the usual course.
2. Casual Employment
Employment arrangement where an employee is
engaged to perform activities which are not
necessary or desirable in the usual trade or business
of the employer.
a. the status of regular employment attaches to the
casual employee who has rendered at least one
(1) year of service whether such service is
continuous or broken, with respect to the activity
in which he is employed and his employment
shall continue while such activity exists.
b. A casual employee is only casual for one year,
and it is the passage of time that gives him a
regular status (KASAMMA-CCO v. CA GR No.
159828, April 19, 2006)
Purpose: to give meaning to the constitutional
guarantees of security of tenure and right to self
organization (Mercado v. NLRC, GR No. 79869,
September 5, 1991).
3. Project Employment
 Employment has been fixed for a specific project
or undertaking, the completion or termination of
which has been determined at the time of
engagement of the employee.
 Where the employment of project employees is
extended long after the supposed project has
been finished, the employees are removed from
the scope of project employees and considered
regular employees.
Note: Members of a work pool from which a
construction company draws its project employees, if
considered employees of the construction company
while in the work pool, are non-project employees or
employees for an indefinite period. If they are
employed in a particular project, the completion of the
project or any phase thereof will not mean severance
of E-E relationship. UNLESS, the workers in the work
pool are free to leave any time and offer their services
t other employers. (L.T. Datu & Co. Inc. v. NRLR, GR
No. 113162, February 9, 1996)
Requirements: (Policy Instruction No. 20 and DO.
No. 19, Series of 1997)
a. Specific project phase thereof stated in the
employment contract;
b. Estimated date of completion of project or phase
thereof likewise stated in the contract;
c. Employee must have been dismissed every after
completion of his project or phase (gaps must be
shown in his length of service); and
d. There must be a report to the DOLE of his
dismissal on account of completion of contract.
Entitlement to Separation Pay
General Rule: Project employees are NOT entitled to
separation pay if they are terminated as a result of
the completion of the project or any phase thereof in
which they have been employed.
Exception: if the projects they are working on have
not yet been completed when their services are
terminated; project employees also enjoy security of
tenure during the limited time of their employment.
(De Ocampo v. NLRC, GR. No. 81077, June 6, 1990)
4. Seasonal Employment
 Employment arrangement where an employee is
engaged to work during a particular season on an
activity that is usually necessary or desirable in
the usual business or trade of the employer.
 During off-season, the relationship of employer
and employee is not severed; the seasonal
employee is merely considered on leave of
absence without pay.
 Seasonal workers who are repeatedly engaged
from season to season performing the same
tasks are deemed to have acquired regular
employment.
Note: One-year duration on the job is pertinent to
deciding whether a casual employee has become
regular or not; but it is NOT pertinent to a seasonal or
project employee. Passage of time does not make a
seasonal worker regular or permanent (Mercado v.
NLRC, GR No. 79869, September 5, 1991)
 When the business establishment is sold which
effectively terminates the employment of the
seasonal employees, the latter would be entitled
to separation pay.
5. Temporary or Fixed-Period Employment
  Employment arrangement where an employee is
engaged to work on a specific project or
undertaking which is usually necessary or
desirable in the usual business or trade of the
employer, the completion of which has been
determined at the time of the engagement of the
employee.
 A fixed-period employee does not become a
regular employee because his employment is co-
terminous with a specific period of time.
Criteria under which Fixed-Period Employment May
be Valid
a. the fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to
bear upon the employee and absent any other
circumstances vitiating his consent; or
b. it satisfactorily appears that the employer and the
employee dealth with each other on more or less
equal terms with no moral dominance exercised by
the former or the latter (Brent School v. Zamora, GR
No. L-48494, February 5, 1990).
Note: Seafarers cannot be considered as regular
employees. Their employment is governed by the
contracts they sign everytime they are rehired and their
employment is terminated when the contract expires.
Their employment is fixed for a certain period of time.
(Ravago v. Esso Eastern Maritime Ltd., GR No. 158324,
March 14, 2005).
Article 281: Probationary Employment
Probationary Employment – Exists where the
employee, upon his engagement is made to undergo a
trial period during which the employer determines his
fitness to qualify for regular employment based on
reasonable standards made known to him at the time of
his engagement.
Characteristics of Probationary Employment
1. it is an employment for a trial period;
2. it is a temporary employment status prior to regular
employment;
3. it arises through a contract with the following
elements:
a. the employee must learn and work at a particular
type of work;
b. such work calls for a certain qualifications;
c. the probation is fixed
d. the employer reserves the power to terminate
during or at the end of the trial period; and
e. and if the employee has learned the job to the
satisfaction of the employer, he becomes a
regular employee.
Duration
General Rule: Probationary employment shall not exceed
six (6) months from the date the employee started
working.
Exceptions:
1. when it is covered by an apprenticeship agreement
stipulating a longer period;
2. when the parties to an employment contract agree
otherwise;
3. when the same is established by company policy; and
4. when the same is required by the nature of the work
performed by the employee.
Example: The probationary period set for professors,
instructors and teachers is three (3) consecutive years of
satisfactory service pursuant to DOLE Manual of
Regulations for Private Schools.
Extension of Probation
The employer and employee may extend by agreement
the probationary period of employment beyond six (6)
months.
Note: By voluntarily agreeing to such an extension, the
employee waived any benefit attaching to the completion
of the period if he still failed to make the grade during the
period of extension (Mariwasa Mfg., Inc. v. Hon.
Leogardo, GR No. 74246, January 26, 1989)
Double or Successive Probation NOT Allowed
The evil sought to be prevented is to discourage
scheming employers from using the system of double or
successive probation to circumvent the mandate of the
law on regularization and make it easier for them to
dismiss their employees (Holiday Inn Manila v. NLRC, GR
No. 109114, September 14, 1993).
Termination of Probationary Employment
Probationary employees are protected by the security of
tenure provision of the Constitution. HOWEVER, a
probationary employee may be terminated at any time
before the expiration of the probationary period on two (2)
grounds
1. just cause; and
2. failure to meet the standards for qualifications for a
regular employment.
Note: The probationary employee is entitled to procedural
due process prior to dismissal from the service.
Limitations to Termination of Probation
1. The employer’s power to terminate a probationary
employment contract must be exercised in
accordance with the specific requirements of the
contract;
2. If a particular time is prescribed, the termination must
be within such time and if formal notice is required,
then that form must be used;
3. The employer’s dissatisfaction must be real and in
good faith, not feigned so as to circumvent the
contract or the law; and
4. There must be no unlawful discrimination in the
dismissal.
Regular Status After Probationary Period
If the probationary employee is allowed to work beyond
the period of 6 months or the agreed probationary period,
said employee becomes a regular employee by operation
of law
Article 282: Termination by Employer
Guidelines to Determine the Validity of Termination:
1. Gravity of the offense;
2. Position occupied by the employee;
3. Degree of damage to the employer;
4. Previous infractions of the same offense; and
5. Length of service.
Totality of Infractions Doctrine
It is the totality, not the compartmentalization of company
infractions that the employee had consistently committed,
which justifies the penalty of dismissal (e.g. number of
violations committed during the period of employment).
(Manila Electric Company v. NLRC, GR No. 114129,
October 24, 1996)
Just Causes
A. Serious Misconduct
 Misconduct has been defined as the
transgression of some established and definite
rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful
intent and not mere error in judgment. (Dept. of
Labor Manual, Sec. 4343.01)
 The misconduct to be serious must be:
1. of such a grave and aggravated character;
and
2. in connection with the employee’s work
Examples:
1. Sexual harassment
2. Fighting within company premises
3. Uttering obscene, insulting or offensive words
against a superior
4. Falsification of time records
5. Gross immorality
B. Willful Disobedience or Insubordination
1. The employee’s assailed conduct has been willful
or intentional, the willfulness being characterized
by a “wrongful and perverse attitude”; and
2. The order violated must have been:
a. reasonable and lawful;
b. made known to the employee; and
c. in connection to the duties which he had
been engaged to discharge (Acesite
Corporation, et. al v. NLRC, GR No. 152308,
January 26, 2005)
Note: There is no law that compels an employee to
accept a promotion for the reason that a promotion is in
the nature of a gift or reward, which a person has the right
to refuse. Hence, the exercise by the employee of the
right to refuse a promotion cannot be considered in law
as insubordination, or willful disobedience of a lawful
order of the employer (PT&T Corp. v. CA, September 29,
2003).
C. Gross and Habitual Neglect of Duties
 In order to constitute a just cause for the
employee’s dismissal, the neglect of duties must
not only be gross but also habitual.
 Gross neglect means an absence of that
diligence that an ordinarily prudent man would
use in his own affairs (Department of Labor
Manual. Sec. 4343 01[27]).
 Habitual neglect implies repeated failure to
perform one’s duties over a period of time,
depending upon the circumstances (JGB and
Associates, Inc. v. NLRC, GR No. 10939, March
7, 1996).
Forms of Neglect of Duty
1. Habitual tardiness and absenteeism
2. Abandonment
a. Failure to report for work or absence without
valid or justifiable reason;
b. Clear intention to sever Er-Ee relationship
being manifested by some overt acts. (Labor
et., al. v. NLRC, GR No. 10388, September
11, 1995)
Note: The filing of the complaint for illegal
dismissal (with a prayer for reinstatement) is
consistent with the charge of abandonment
(Kams Int’l, Inc. v. NLRC, GR No. 128806,
September 28, 1999). HOWEVER, the rule has
no application where the complainant does not
pray for reinstatement and asks for separation
pay instead. (Jo, et. al v. NLRC, GR No. 121605,
February 2, 2000).
D. Fraud or Will Breach of Trust
To constitute a just cause for terminating the
employee’s services,
1. fraud must be committed against the employer or
his representative; and
2. in connection with the employee’s work
(Department of Labor Manual, Sec. 4353.01[3]).
Examples:
1. falsification of time cards
2. theft of company property
 3. unauthorized use of vehicle
Guideline for the Doctrine of Loss of Confidence to
Apply
1. loss of confidence should not be simulated
(reasonable basis for loss of trust and
confidence);
2. not used as a subterfuge for causes which are
improper, illegal or unjustified;
3. not arbitrarily asserted in the face of
overwhelming evidence to the contrary;
4. must be genuine, not a mere afterthought to
justify earlier action taken in bad faith; and
5. the employee involved holds a position of trust
and confidence.
Note: generally, employers are allowed wider latitude
of discretion in terminating the employment of
managerial personnel or those who, while not of
similar rank, perform functions which by their nature
require the employer’s full trust and confidence.
(Coca-Cola Bottlers v. NLRC, GR No. 82580, April
25, 1989)
E. Commission of a Crime or Offense
Refers to an offense by the employee against the
person of his employer or any immediate member of
his family or his duly authorized representative and
thus, the conviction of a crime involving moral
turpitude is not analogous thereto as the element of
relation to his work or to his employer is lacking.
Note: The conviction of an employee in a criminal
case is NOT necessary to warrant his dismissal by
his employer.
F. Analogous Cases
Must be due to the voluntary and/or willful act or
omission of the employee (Nadura v. Benguet
Consolidated, GR No. L-17780, August 24, 1962).
Examples:
1. violation of company rules and regulations
2. drunkenness
3. gross inefficiency
4. illegally diverting employer/s product
Doctrine of Incompatibility
Where the employee has done something that is contrary
or incompatible with the faithful performance of his duties,
his employer has a just case for terminating his
employment (Manila Chauffer’s League v. Bachrach
Motor Co., 40 O.G. 159).
Due Process to be observed by the Employer
The following standards of due process shall be
substantially observed for termination of employment
based on just causes:
1. Notice (Twin Notice Rule) – the employer is
required to furnish an employee who is tot be
dismissed with two (2) written notices before such
termination:
a. Pre-Notice – a written notice served on the
employee specifying the ground or grounds for
termination, and giving to said employee
reasonable opportunity within which to explain his
side;
b. Post-Notice – a written notice of termination
served on the employee indicating that upon due
consideration of all the circumstances, grounds
have been established to justify his termination.
(which comes only after the employee is given
reasonable period from receipt of the first notice
to answer the charge, see requirement 2 below)
(Pepsi Cola v. NLRC, GR No. 90964, February
10, 1992).
2. Hearing or Conference – a hearing or conference
should be held during which the employee concerned
with the assistance of counsel, if the employee so
desires, is given the opportunity to respond to the
charge, present his evidence or reput the evidence
presented against him (Lavador v. “J” Marketing
Corporation and Soyao, GR No. 157757, June 28,
2005).
Burden of Proof
The burden of proof rests upon the employer to show that
the dismissal of the employee is for a just cause, and
failure to do so would necessarily mean that the dismissal
is not justified, consonant with the constitutional
guarantee of security of tenure as implemented by law.
Degree of Proof
 In administrative or quasi-judicial proceedings, proof
beyond reasonable doubt is not required in
determining the legality of an employer’s dismissal of
an employee, and not even a preponderance of
evidence is considered sufficient (Pangasinan III,
Electric Cooperative, Inc. v. NLRC, GR No. 89876,
November 13, 1992).
Note: In Agabon v. NLRC. GR NO. 158693, November
17, 2004, when dismissal is for just or authorized cause
but due process was not observed, the dismissal should
be upheld. However, the employer should be held liable
for non-compliance with the procedural requirements of
due process (i.e. damages).
 The above ruling was modified by JAKA Food
Processing v. Pacot, GR No. 151378, March 28,
2005:
1. if based on a just cause (Art. 282) but the
employer failed to comply with the notice
requirement, the sanction to be imposed upon
 him should be tempered because the dismissal
process was, in effect, initiated by an act
imputable to the employee; and
2. if based on an authorized cause (Art. 283) but the
employer failed to comply with the notice
requirement, the sanction should be stiffer
because the dismissal process was initiated by
the employer’s exercise of his management
prerogative.
Preventive Suspension
During the pendency of the investigation, the employer
may place the employee under preventive suspension if
his continued employment poses a serious and imminent
threat to life and property of the employer or of his co-
employees.
1. Preventive suspension should not last for more
than thirty (30) days. The employee should be
made ot resume his work after 30 days.
2. However, the same can be extended provided the
employer pays the suspended employee his
wages and other benefits.
Article 283-284: Authorized Causes of Termination by
the Employer
A. Automation/ Robotics – installation of labor-saving
devices
B. Redundancy – exists where the services of an
employee are in excess of what is reasonable
demanded by the actual requirements of the
enterprise (Wiltshire File Co., Inc. v. NLRC, GR No.
82249, February 7, 1991).
Note: Reorganization as a cost-saving device is
acknowledged by jurisprudence. An employer is not
precluded from adopting a new policy conducive to a
more economical and effective management, and the
law does not require that the employer should be
suffering financial losses before he can terminate the
services of the employee on the ground of
redundancy (Dole Philippines, Inc., et. al v. NLRC, et.
al).
C. Retrenchment (Downsizing) – reduction of
personnel usually due to poor financial returns so a to
cut down on costs of operations in terms of salaries
and wages to prevent bankruptcy of the company.
This is linked with losses and is resorted to as it is a
cost-cutting measure made immediately necessary by
business reduction of reverses.
Note: The phrase “to prevent losses” means that
retrenchment or termination from the service of some
employees is authorized to be undertaken by the
employer sometime before the losses anticipated are
actually sustained or realized. Evidently, actual losses
need not set in prior to retrenchment (Cajucom VII v.
TPI Philippines Cement Corporation, et. al, GR No.
149090, February 11, 2005).
General Standards of Retrenchment (SINS)
1. the losses expected are Substantial and not
merely de minimis in extent
2. the apprehended substantial loss are reasonably
Imminent, can be perceived objectively and in
good faith by the employer
3. retrenchment must be reasonable Necessary to
prevent the expected losses; and
4. expected or actual losses must be proved by
Sufficient and convincing evidence (Central
Azucarrera dela v. NLRC, GR No. 100092,
December 29, 1995)
Requirement for a Valid Retrenchment
1. retrenchment is reasonable necessary and likely
to prevent business losses, hence, if already
incurred, are not merely de minimis, but
substantial, serious, ---, and real, or if only
expected, are reasonably imminent as perceived
effectively and in good faith by the employer;
2. the employer served written notice both to the
employees and to the DOLE at least one (1)
month prior the intended date of retrenchment;
3. the employer pays the retrenched employees
separation pay equivalent to one moth pay or at
least one-half month pay for every year of
service;
4. the employer exercises its prerogative to retrench
employees in good faith for the advancement of
its interest and not to defeat or circumvent the
employees’ right in security of tenure; and
5. the employer used fair and reasonable --- in
ascertaining who would be 000 and who would
be retained among the employees, such as
status, efficiency, seniority, physical fitness, age
and financial hardship for certain workers (Asian
Alcohol Corp. v. NLRC, GR Mp/ 131105, March
25, 1999).
Last In, First Out (LFO)
It applies to termination of employment in the line of
work. What is contemplated in the LIFO rule is that
when there are two or more employees occupying the
same position in the company affected by the
retrenchment program, the last one employed will ---
be the first to go (Maya Farms Employees
Organization v. NLRC, GR No. ---, December 28,
1994)
D. Closure or Cessation of Operation of the
Establishment or Undertaking
Must be bona fide or in god faith
Rules:
 1. Where closure is due to serious business losses,
no separation pay is required; (North Davao
Mining Corp. v. NLRC, GR No. ---, March 13,
1996)
2. Where closure is NOT due to serious business
losses, workers are entitled to separation pay;
3. Where closure was due to an act of the
government, the workers are not entitled to
separation pay (National Federation of Labor v.
NLRC, GR No. 127718, March 2, 2000).
Note: Article 283 includes both the complete
cessation of all business operation of an
establishment and the cessation of only part of a
company’s business (Cheniver Deco Print Technics
Corp. v. NLRC, GR No. 122876, February 17, 2000).
E. Disease
Requisites:
1. the continued employment of the employee is
prohibited by law or prejudicial to his health as
well as to the health of his co-employees; and
2. with a certification from a competent authority
(such as a public health officer ) that the disease
is incurable within 6 months despite due
mediation and treatment (Solis v. NLRC, GR No.
116175, October 28, 1996).
10. Retirement.
Totality of Infractions Doctrine
Where the employee has been found to have repeatedly
incurred several suspensions or warnings on account of
violations of company rules and regulations, the law
warrants their dismissal as it is akin to “habitual
delinquency” (Villeno v. NLRC, 251 SCRA 494)
Procedural Steps Required
1. Written notice to DOLE 30 days prior to the intended
date of termination;
Purpose: to enable it to ascertain the verity of the cause
of termination
2. Written notice to employee concerned 30 days prior
to the intended date of termination;
Note: When termination of employment is brought by the
failure of an employee to meet the standards of the
employer in case of probationary employment, it shall be
sufficient that a written notice is served the employee
within a reasonable time from the effective date of
termination.
 When termination is brought about by the
completion of the contract or phase thereof, no
prior notice is required.

 Termination of services for health reasons must 3. Payment of separation pay.

be effected only upon compliance with the above
requisites. The requirement for a medical Rules on Payment of Separation Pay
certificate under Art. 284 of the Labor Code
cannot be dispensed with; otherwise, it would Cause of Termination Separation Pay
sanction the unilateral and arbitrary determination Equivalent to at least one
by the employer of the gravity or extent of the month pay or at least one
employee’s illness and this defeat the public month pay for every year of
Automation/ Robotics and
policy in the protection of labor (SY et. al v. CA, service, whichever is
Redundancy
GR No. 142293, February 27, 2003) higher, a fraction of six (6)
months is considered as
Note: Discrimination in any form from pre- one (1) whole year
employment to post-employment, including hiring, Equivalent to one month
promotion or assignment, based on the actual, pay or at least one-half
perceived or suspected HIV status of an individual is month pay for every year of
prohibited. Termination from work on the sole basis of Retrenchment service, whichever is
actual perceived or suspected HIV status is deemed higher, a fraction of six(6)
unlawful (Sec. 35, R.A. 8504, HIV.AIDS LAW). months is considered as
one(1) whole year
F. Other Authorized Causes Closures or cessation of Equivalent to one month
1. Total and permanent disability of employee; operations not due to pay or at least one-half
2. Valid application of union security clause; serious business losses or month pay for every year of
3. Expiration of period in term of employment; financial reverses service, whichever is
4. Completion of project in project employment; higher, a fraction of six (6)
5. Failure in probation; months is considered as
6. Relocation of business to a distant place; one(1) whole year.
7. Defiance of return-to-work order; If due to severe business
8. Commission of illegal acts in a strike; losses or financial
9. Violation of contractual commitment and; reverses, no separation
 pay due (North Davao
Mining & Development
Corporation v. NLRC, 254
SCRA 721).
Equivalent to at least one-
month salary or to ½ month
salary for every year of
Disease service, whichever is
greater, a fraction of at
least 6 months shall be
considered one (1) year
Closure due to an act of No separation pay
government
Article 285: Termination by Employee
A. Without Just Cause – by serving a written notice on
the employer at least one month in advance. The
employer upon whom no such notice was served may
hold the employee liable for damages.
B. With Just Cause – an employee may put an end to
his employment without serving any notice on the
employer for any of the following just causes (SUCA)
1. Serious Insult by the employer or his
representative on the honor and person of the
employee
2. Inhuman Unbearable Treatment accorded the
employee by the employer or his representative;
3. Commission of a Crime or Offense by the
Employer or his representative against the
person of the employee or any of the immediate
members of his family; and
4. Other causes Analogous to any of the foregoing.
Voluntary Resignation
 Defined as the act of an employee, who finds himself
in a situation in which he believes that personal
reasons cannot be sacrificed in favor of the exigency
of the service; thus, he has no other choice but to
disassociate himself from his employment (Alfaro v.
CA, GR No. 140812, August 28, 2001).
 The employee must serve a written notice on the
employer at least one month in advance. Once
accepter, cannot be withdrawn without the consent of
the employer (intertrod maritime Inc. v. NLRC, GR
No. 81087, June 19, 1991)
 An employee who voluntarily resigns is NOT entitled
to separation pay unless stipulated in an employment
contract or CBA or sanctioned by established
employer practice or policy (Ibid.)
Note: If resignation is not voluntary, the same can be
deemed to be a constructive dismissal.
 Voluntary resignation and illegal dismissals are
adversely opposed modes of terminating employment
relations, in that the presence of one precludes that
one of the other (Alfaro v. CA, Ibid).
Intention to Resign
From his position, and such “resignation” may be
accepted and made effective by the management,
although the employee did not mention the word “resign”
and/ or “resignation”. This happened to the chief
investigative reporter of the Philippine Star. He sent a
“Memorandum for File” to the Chairman-CEO expressing
his frustrations and disappointment in the office.
(Philippines Today Inc., et al v. NLRC GR No. 112965,
January 30, 1997)
Constructive Dismissal
Defined as quitting because continued employment is
rendered impossible, unreasonable or unlikely, as an offer
involving demotion in rank and a diminution in pay (JO
Cinema Corporation v. Abellana, GR NO. 132837, June
28, 2001).
Note: There may be constructive dismissal if an act of
clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the
employee that is could foreclose any choice by him
except to forego his continued employment (Hyatt Taxi
Services, Inc. v Catinoy, GR NO. 143204, June 26,
2001).
 After the 30-day period of preventive suspension, the
employee must be reinstated to his former position
because suspension beyond this maximum period
amounts to constructive dismissal. (Hyatt Taxi
Services, Inc. v. Catinoy, GR NO. 143204, June 26,
2001)
Note: The employer may continue the period of
preventive suspension provided that he pays the salary of
the employee.
Temporary Lay-Off
 There is no specific provision of law which treats of a
temporary retrenchment or lay-off and provides for
the requisites in effecting it or a period of duration
therefore. These employees cannot however be
forever “temporarily” laid –off.
 To remedy this situation, Article 286 may be applied
but only by analogy to set a specific period that
employees may remain temporarily laid-off or in a
floating status (while business operations are
suspended) for only a period of six months.
Article 286: When Employment NOT deemed
Terminated
When Employment NOT Terminated:
1. Bona fide suspension of the operation of a business
or undertaking for a period not exceeding six (6)
months; or
2. Fulfillment by the employee of a military or civic duty.
Floating Status
The “floating status” of an employee should last only for a
legally prescribed period of time. When the floating status
of an employee lasts for more than six months, he may
be considered to have been constructively dismissed
from service. Thus, he is entitled to the corresponding
benefits for separation (Agro Commercial Security
Services Agency, Inc. v. NLRC, GR Nos. 82823-24, July
31, 1989).
Notice Required
Serious business losses do not excuse the employer form
complying with the clearance or report required under
Article 283 of the Labor Code and its implementing rules
before terminating the employment of its workers. In the
absence of justifying circumstances, the failure of the
employer to observe the procedural requirements set out
under Article 284 taints their actuations with bad faith if
the lay-off was temporary but then serious business
losses prevented the reinstatement of respondents, the
employer should have complied with the requirement of
written notice.
TITLE TWO: RETIREMENT FROM THE SERVICE
Article 287: Retirement
Concept of Retirement
It is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employees
whereby the latter , after reaching a certain age, agrees
and/or consents to sever his employment with the former
(Brion v. SPUM of the Seventh Day Adventist Church, GR
No. 135136< May 19, 1999)
Kinds of Retirement Schemes:
1. compulsory and contributory in nature;
2. one set up by agreement between the employer and
the employees in CBA or other agreements between
them (other applicable employment contract);
3. one that is voluntarily given by the employer,
expressly as in an announced company policy or
impliedly as in failure to contest the employee’s claim
for retirement benefits (Marilyn Odchimar Gerlach v.
Reuters Limited, Phils. GR No. 148542, January 17,
2005).
Retirement Age – the age of retirement is that specified
in the CBA or in the employment contract.
Age Retirement
60-less than Optional but the employee must have
65 served at least 5 years
65 Compulsory
Rule on Mining Employees
The rule is different with respect to underground mining
employees whose optional retirement age is 50-60
provided they have at least served for a period of 5 years
(Art. 287 as amended by R.A. 8558).
Compulsory Retirement Age Below 60 is Allowed
Art. 287 permits employer and employee to fix the
applicable retirement age at below 60 years. The same is
legal and enforceable so long as the parties agree to be
governed by such CBA (Pantranco North Express v.
NLRC, GR No. 95940, July 24, 1996).
Extension of Service of Retiree
Upon the compulsory retirement of an employee or official
in the public or private service, his employment is
deemed terminated. The matter of extension of service of
such employee or official is addressed to the sound
discretion of the employer (UST Faculty Union v. NLRC,
GR NO. 89885, August 6, 1990).
Benefits
A retiree is entitled to a retirement pay equivalent to at
least ½ month salary for every year of service, a fraction
of at least six (6) months being considered as one whole
year. Unless the parties provide for broader inclusions,
the term “one half (1/2) month salary” shall mean:
1. 15 days plus 1/12 of the 13th month pay; and
2. the cash equivalent of NOT more than 5 days of
service incentive leaves. (22.5 days per year of
service)
 Under Section 26, RA No. 4670, otherwise known as
the Magna Carta for Public School Teachers, public
school teachers having fulfilled the age and service
requirements of the applicable retirement laws shall
be given ONE RANGE SALARY RAISE upon
retirement, which shall be the basis of the
computation of the lump sum of the retirement pay
and the monthly benefit thereafter.
Note: Exempted from the payment of retirement pay are:
1. retail, service and agricultural establishments or
business operations employing NOT more than ten
(10) employees or workers;
2. government employees; and domestic helpers and
those in the personal service of another.
3. domestic helpers and those in the personal service of
another.
(See RA 7641: Retirement Pay Law).
BOOK SEVEN: TRANSITORY AND FINAL
PROVISIONS
TITLE ONE: PENAL PROVISIONS AND LIABILITIES
Article 288: Penalties

Violations of the Labor Code that are declared to by

unlawful or penal in nature shall be punished accordingly:
1. a fine of not less than P 1,000 nor more than P10,000
2. imprisonment of not less than 3 months nor more
than 3 years; or
3. both such fine and imprisonment at the discretion of
the court.

 In addition to such penalty, and alien found guilty

thereof shall be summarily deported upon completion
of service of sentence.
 Criminal offense under the LC are also cognizable by
the regular courts.

Article 289: Who are Liable When Committed by

Other Natural Person

A judicial entity cannot be held criminally liable for

offenses committed under the LC. Criminal penalties shall
be imposed only upon the guilty officer or officers of such
entity.

TITLE TWO: PRESCRIPTION OF OFFENSES AND

CLAIMS

Article 291: Money Claims

Periods of Prescription

Cause Period of Prescription

3 years from the accrual of
Money Claims
the causes of action
1 year from the accrual of
ULP
the cause of action
4 years from the accrual of
Illegal Dismissal
the cause of action
Reinstatement 4 years

Note: The period of prescription mentioned under Article

292 of the Labor Code refers to and is limited to money
claims, all other cases of injury to rights of a working man
being governed by the Civil Code. Hence,
REINSTATEMENT prescribes in 4 years.

Venue: The Regional Arbitration Branch where the

workplace is located (NLRC Rules of Procedure)
Table of Jurisdiction
JURISDICTION GROUNDS FOR APPEAL WHERE TO FILE THE APPEAL
EXCLUSIVE AND ORIGINAL 1. Prima facie evidence of abuse of Decisions of Labor Arbiters are
1. ULP; discretion; appealable to the NLRC within 10
2. Termination disputes; 2. If the decision, order or award calendar days from receipt of the
3. If accompanied with a claim for was secured through fraud or decision.
reinstatement, those that workers coercion, including graft and No motion for Reconsideration is
file involving wages, rates of pay, corruption; allowed, but if the MR has all the
hours of work and other terms and 3. If made purely on questions of requisites of an appeal, the same
conditions of employment; law; and shall be treated as an appeal.
4. Claims for actual, moral, 4. If Serious errors in the findings
exemplary and other forms of of facts are raised which would
damages arising from Er-Ee cause grave or irreparable
relations; damage or injury to the
5. Cases arising from any violation of appellant.
Art. 264, including questions
involving the legality of strikes and
lockouts;
6. Except claims for EC, Social
Security, Philhealth and maternity
benefits, all other claims arising
from Er-Ee relations, including
those of persons in domestic or
household service, involving an
amount exceeding P5,000
regardless of whether
accompanied with a claim for
reinstatement;
LABOR 7. Monetary claims of overseas
ARBITER contract workers arising from Er-
Ee relations under Migrant
Workers Act of 1995;
8. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties
pursuant to RA 6727;
9. Enforcement of compromise
agreements when there is non-
compliance by any of the parties
pursuant to Article 227 of the Labor
Code, as amended; and
10. Other cases as may be provided
by law.

CONCURRENT WITH NLRC

Contempt cases

NOTE: Although the provision speaks

of Exclusive and Original Jurisdiction of
Labor Arbiters, the cases enumerated
may instead be submitted to a
Voluntary Arbitrator by agreement of
the parties under Art. 262. The law
prefers voluntary over compulsory
arbitration

JURISDICTION GROUNDS FOR APPEAL WHERE TO FILE THE APPEAL

EXCLUSIVE AND ORIGINAL
Cases certified to the NLRC for
compulsory arbitration by the Sec.
NLRC
Of Labor under Art. 263;
Injunction cases under Arts. 128 and
264; and
Lack of jurisdiction;
Grave abuse of discretion
MOTION FOR
RECONSIDERAITON
Filed with the NLRC within 10
calendar days from receipt of the
order, resolution or decision on the
ground of palpable or patent errors
 Contempt cases. by the Commission. Only one (1)
MR is allowed.
APPELLATE APPEAL
Cases decided by Labor Arbiters under Decisions of the NLRC may be
Art. 217[b] of the Labor Code and Sec. elevated for REVIEW to the Court
10 of Migrant Workers Act; and of Appeals by a Petition for Certiorari
Cases decided by the Regional under Rule 65 of the 1997 Rules of
Officers of the DOLE in the Court within 60 days from notice of
exercise of their adjudicatory judgment, order or resolution sought
functions under Art. 129 over to be assailed (As amended)
monetary claims of workers not
exceeding P5,000.
Interpretation and implementation of
CBA provisions; and
Interpretation and enforcement of
company personnel policies.
GRIEVANCE NOTE: Grievance machinery is
MACHINERY resorted to for purposes of
settlement. Unresolved
grievances are brought to the
Voluntary Arbitrator.

JURISDICTION GROUNDS FOR APPEAL WHERE TO FILE THE APPEAL

Unresolved grievances arising from the
interpretation or implementation of the
CBA;
Those arising from the interpretation or
enforcement of company personnel
policies; and Upon agreement of the
parties, other labor disputes including
ULP and bargaining deadlocks.
1. Lack of jurisdiction; Decisions of Voluntary Arbitrators
2. Grave abuse of discretion; may be elevated for REVIEW to the
3. Violation of due process; Court of Appeals under Rule 43 of
4. Erroneous interpretation of the the 1997 Rules of Court within 15
law; and days from notice of the award,
5. Denial of substantial judgment final order or resolution or
of the denial of the motion for new
trial or reconsideration.

NOTE: “All other disputes” under Art.

VOLUNTARY
262 may include termination disputes,
ARBITRATION
provided that the agreement between
the parties states in unequivocal
language that the conform to the
submission of termination disputes and
ULP to voluntary arbitration. This is so
because termination disputes are
generally within the exclusive and
original jurisdiction of Labor Arbiters by
express provision of law (Vivero v. CA,
344 SCRA 268, 2000).
EXCLUSIVE AND ORIGINAL In petitions for cancellation of union
1. Inter-union dispute; registration, if filed with the Regional
2. Intra-union dispute; and Office, the appeal is with the BLR
3. Other related labor relations Director whose decision shall be
disputes final and executory.
NOTE: E.O 251 OF 1987 removed If the petition for cancellation is filed
form the jurisdiction of the BLR “all” directly with the BLR, the appeal is
labor-management disputes. The with the Secretary of Labor whose
effect of E.O. 251 is to transfer to decision shall be final and executor
BUREAU OF
the NCMB the mediation,
LABOR
conciliation, and arbitration
RELATIONS
functions of the BLR.
NOTE: However, the parties may
by agreement, settle their
differences by submitting their case
to a Voluntary Arbitrator instead of
taking the case to the BLR.
Petitions for cancellation of union
registration may be filed with the
Regional Office or directly with the
 BLR.
JURISDICTION GROUNDS FOR APPEAL WHERE TO FILE THE APPEAL
Cases involving recovery of wages and 1. Prima facie evidence of abuse of Decisions of the Regional Director
other monetary claims and benefits, discretion; are appealable to the Secretary of
including legal interest provided that 2. if the decision, order or award Labor within 5 days from receipt of
the claim is presented by an employee was secured through fraud or the order upon posting of cash or
or person employed in domestic or coercion, including graft and surety bond in amount equivalent to
household service, or house helper, the corruption; the monetary award in the order
claim arises from Er-Ee relations, the 3. if made purely on questions of appealed from (RA 7730 in relation
claimant does not seek reinstatement law; and to Art. 129)
and the aggregate money claim of each 4. if serious errors in the findings of Decisions on money claims without
employee or house helper does not facts are raised which would claim for reinstatement and
REGIONAL
excee P5,000 cause grave or irreparable househelps cases P 5,000 and
DIRECTOR OF
damage or injury to the appellant below are appealable to the NLRC
DOLE
NOTE: The jurisdictional limitation within 5 days from receipt of the
imposed by Art. 129 on the visitorial appealed decision.
and enforcement powers of the
Regional Director under Art. 128[b] of
the LC has been repealed by RA No.
7730. in other words, the P 5,000 limit
in Art. 129 does not apply to the
exercise of power under Art. 128 [b]
(Guico v. Sec. Of Labor, GR NO.
131750, November 16, 1998)
Power to inspect employer’s
premises and records, issue
compliance orders, stoppage of
work (Art. 128)

EXCLUSIVE AND ORIGINAL

If there exists a labor dispute causing
or likely to cause a strike or lockout in
an industry indispensable to the
national interest.

THE SECRETARY OF LABOR MAY

Assume jurisdiction and decide it, or
SECRETARY
certify the same to the NLRC for
OF LABOR
compulsory arbitration.

APPELLATE
Cancellation of registration of
federation or National union by the
BLR;
Denial of application of registration of
federation or national union by the
BLR;
Decision of BLR in Inter/Intra Union
dispute; and
Decision of Med-Arbiter in Petition for
Certification election.

Social Legislation
Labor Law

SOCIAL SECURITY SYSTEM
(R.A. 1161 AS AMENDED BY R.A. 8282)
Definition of Terms
Employer – any person, natural, juridical, domestic or
foreign, who carries on in the Philippines, any trade,
business, industry, undertaking or activity of any kind and
uses the services of another person who is under his
orders as regards the employment except Government
and any of its political subdivisions, branches or
instrumentalities, including corporations owned or
controlled by the Government.
Employee – any person who performs services for an
employer in which whether or not mental and physical
efforts are used and who receives compensation for such
services, where there is an employer-employee
relationship.
Self-employed – any person whose income is not
derived from employment; shall be both the employer and
employee at the same time
Dependents:
1. The legal spouse entitled by law to receive support
from the member;
2. The legitimate, legitimated or legally adopted and
illegitimate child who is unmarried, not gainfully
employed and has not reached twenty-one (21) years
of age, he is congenitally incapacitated or while still a
minor has been permanently incapacitated and
incapable of self-support, physically and mentally;
and
3. The parent who is receiving regular support from the
member.
Compensation – All actual remuneration for
employment, including the mandated cost-of living
allowance, as well as the cash value of any remuneration
paid in any medium other than cash except that part of
the remuneration in excess of the maximum salary credit.
Employment – Any service performed by an employee
for his employer.
Beneficiaries – The dependent spouse until he or she
remarries, the dependent legitimate, legitimated or legally
adopted and illegitimate children who shall be the primary
beneficiaries of the member;
1. provided that the dependent illegitimate children shall
be entitled to 50% of the share of the legitimate,
legitimated or legally adopted children;
2. provided further, in the absence of the legitimated,
legally adopted or legitimate children, illegitimate
children shall be entitled to 100% of the benefits;
3. in their absence, the dependent parents who shall be
the secondary beneficiaries; and
4. in the absence of all the foregoing, any person
designated by the covered employee as secondary
beneficiary.
Contingency – The retirement, death, disability, injury r
sickness and maternity of the member
Coverage
A. Compulsory (Sec. 9)
1. All employees not over sixty (60) years of age
and their employers; and
2. Domestic helpers with monthly income of not less
than one thousand pesos (1,000) a month
Limitations:
a. Any benefit earned by the employees under private
benefit plans existing at the time of the approval of
the Act shall not be discontinued, reduces or
otherwise impaired;
b. Existing private plans shall be integrated with the
SSS but if the employer under such plan is
contributing more than what is required by this Act, he
shall pay to the SSS the amount required to him, and
he shall continue with his contributions les the
amount paid to SSS;
c. Any changes, adjustments, modifications,
eliminations or improvements in the benefits of the
remaining private plan after the integration shall be
subject to agreements between the employers and
the employees concerned; and
d. The private benefit plan which the employer shall
continue for his employees shall remain under the
employer’s management and control unless there is
an existing agreement to the contrary.
3. Upon such self-employed persons as may be
determined by the Commission including but not
limited to the following (Sec. 9-A): (P2A2F)
a. All self-employed Professionals;
b. Partners and single proprietors;
c. Actors and actresses, directors, scriptwriters
and news correspondents who do not fall
within the definition of the terms employee in
Section 8[d] of this Act;
 d. Professional Athletes, coaches, trainers, and
jockeys; and
e. Individual Farmers and fishermen.
B. Voluntary
1. Spouses who devote full time to managing the
household and family affairs (Sec. 9(b);
2. Filipinos employed abroad recruited by foreign-
based employers (Sec. 9 (c) );
3. Persons separate from employment to maintain
his right to full benefits (Sec. 11); and
4. Self-employed, who realizes no income for a
certain month (Sec. 11-A)
C. By Agreement
Any foreign government, international organization, or
their wholly-owned instrumentality employing workers
in the Philippines, may enter into an agreement with
the Philippine government for the inclusion of such
employees in the SSS except those already covered
by their respective civil service retirement systems.
Effective Date of Coverage (Sec. 10)
1. Employer – on first day of his operation
2. Employee – on the day of his employment
3. Self-employed – upon his registration with SSS
Effects of Separation from Employment (Sec. 11)
1. Employer’s contribution on his account ceases;
2. Employee’s obligation to contribute also ceases at the
end of the month of separation; and
3. Employee shall be credited with all contribution paid
on his behalf and entitled to benefit according to the
provisions of this Act.
Effects of Interruption of Business or Professional
Income of Self-Employed Individual
1. He shall not be required to pay contributions for that
month.
2. However, he may be allowed to continue paying
contributions under the same rules applicable to a
separated covered employee member.
Excluded Employment (Sec. 8(j))
1. Employment purely casual and not for the purpose of
occupation or business of the employer;
2. Services performed on or in connection with an alien
vessel by an employee if he is employed when such
vessel is outside the Philippines;
3. Service performed in the employ of the Philippine
government, instrumentality or agency thereof;
4. Service performed in the employ of a foreign
government, international organization or their wholly-
owned instrumentality; and
5. Services performed by temporary employees which
may be excluded by regulation of the Commission.
Note: Employees of bona fide independent contractors
shall not be deemed employees of the employer
engaging the service of said contractors.
Benefits:
A. Monthly Pension (Sec. 12)
1. Monthly pension shall be the highest of the
following:
a. P300 plus 20% of average monthly salary
credit plus 2% of average monthly salary
credit for each credited year of service in
excess of 10 years;
b. 40% monthly salary credit; and
c. P1,000 provided that the monthly pension
shall in no case be paid for an aggregate
amount of less than 60 months.
2. For members with at least 10 years credited
service, the minimum pension shall be P1,200;
and
3. For members with at least 20 years credited
service, the minimum pension shall be P2,400.
A-I. Dependent’s Pension (Sec. 12-A)
1. Equivalent to 10% of monthly pension or P250,
whichever is higher;
2. Payable on account of death, permanent total
disability or retirement; and
3. Payable to each conceived child on or before the
date of contingency but not exceeding five (5)
dependents beginning from the youngest with
preference on legitimate children.
A-II. Retirement Benefits (Sec. 12-B)
1. A member who has paid at least 120 monthly
contributions prior to the semester of retirement
shall be entitle to monthly pension as long as he
lives, provided that:
a. He has reached the age of sixty (60)
years and is already separated from
employment or has ceased to be self-
employed; or
b. He has reached the age of sixty-five (65)
years.
Note: Member has the option to receive his 1 st eighteen
(18) monthly pension in lump sum at a preferential rate of
interest as determined by the SSS.
2. A covered member who is sixty (60) years old but
was not able to contribute at least 120 monthly
contribution prior to the semester of his
retirement shall still be entitled to a lump sum
benefit equal to the total contribution paid by him
and on his behalf, PROVIDED, he is separated
from employment and is not continuing payment
of contributions to the SSS on his own.
Upon Death of Retired Member (Sec. 12-B(d))
1. His primary beneficiaries as of the date of his
retirement shall be entitles to receive the monthly
pension; and
2. If he has no primary beneficiaries and he dies within
sixty (60) months from the start of his monthly
pension, secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to the total monthly
pensions corresponding to the balance of the five-
year guaranteed period, excluding the dependent’s
pension.
Suspension of Monthly Pension
Upon the re-employment or resumption of self-
employment of a retired employee who is less than sixty-
five (65) years old.
B. Death Benefits and Permanent Disability Benefits
(Sec. 13 and Sec. 13-A)
Permanent Total
Death Benefits
Disability Benefits
Death Permanent total
Cause
disability
Member has paid at least 36 monthly
Requisite
contributions
Benefits Monthly pension
Payable to Primary Member
whom Beneficiaries
Benefits shall be lump sum equivalent to
Failure to
the monthly pension times the number of
make 36
monthly contributions pair to SSS or 12
monthly
times the monthly pension, whichever is
payments
higher.
In case the deceased has no primary beneficiaries, his
secondary beneficiaries shall be entitled to lump sum
benefit equivalent to 36 monthly pensions.
Death of Permanent Total Disability
1. His primary beneficiaries shall be entitled to the
monthly pension; or
2. If he has no primary beneficiaries and he dies within
sixty (60) months from the start of his monthly
pension his secondary beneficiaries shall be entitled
to a lump sum benefit equivalent to the total monthly
pensions corresponding to the balance of the five
year guaranteed period, excluding the dependents’
pension.
The following are deemed Permanent Total Disability
1. Complete loss of sight of both eyes;
2. Loss of two limbs at or above the ankle or wrists;
3. Permanent complete paralysis of two limbs;
4. Brain injury resulting to incurable imbecility or
insanity; and
5. Such cases as determined and approved by the SSS.
C. Funeral Benefits (Sec. 13-B)
In case of death of any member, a funeral grant
equivalent to P12,000 shall be paid in cash or in kind
to help defray the cost of funeral expenses.
D. Sickness Benefits (Sec. 14)
A daily sickness benefit equivalent to ninety percent
(90%) of his average daily salary credit shall be paid
by his employer or by the SSS, if unemployed or self-
employed.
Requirements
1. A member must have paid at least 3 monthly
contributions in the 12-month period immediately
preceding the semester of sickness or injury;
2. Confined for more than three days in a hospital or
elsewhere with the approval of the SSS; and
3. All sick leaves of absence with full pay to the
credit of the employee member shall have been
exhausted.
Conditions
1. In no case shall the daily sickness benefit be paid
longer than 120 days in one (1) calendar year;
2. Nor shall any unused portion of the 120 days of
sickness benefit be carried forward and added to
the total number of compensable days allowable
in the subsequent year;
3. The daily sickness benefit shall not be paid for
more than 240 days on account of the same
confinement; and
4. The employee member shall notify his employer,
or the SSS if unemployed or self-employed, of
the fact of his sickness or injury within five (5)
calendar days after the start of his confinement.
Note: The following are exceptions to the requirement
of notification:
 Confinement is in the hospital; and
 Became sick or was injured while working or
within the premises of the employer.
E. Maternity Leave Benefits (as amended by RA.
7322)
Covered female employee is entitled to a daily
maternity benefit equivalent to one hundred percent
(100%) of her present basic salary, allowances and
other benefits or the cash equivalent of such benefits
for 60 days or 78 days in case of caesarian delivery.
Requirements:
1. There is childbirth, abortion or miscarriage; and
2. She has paid at least 3 monthly contributions.
Conditions:
 1. Employee shall --- her employer of her pregnancy
and the probable date of her childbirth, which
notice shall be transmitted to the SSS.
2. The payment shall be advanced by the employer
in two equal installments within thirty (30) days
from the filing of the maternity leave application;
3. The payment of daily maternity benefits shall be a
bar to the recovery of sickness benefits for the
same compensable period of sixty (60) days for
the same childbirth, abortion or miscarriage, or
seventy-eight (78) days in case of caesarian
delivery.
4. That the maternity benefits provided under this
Section shall be paid only for the first four (4)
deliveries after March 13, 1973;
5. That the SSS shall immediately reimburse the
employer of 100% of the amount of maternity
benefits advanced to the employee by the
employer upon receipt of satisfactory proof of
such payment and legality thereof; and
6. If an employee should give birth or suffer abortion
or miscarriage without the required contributions
having been remitted for her by her employer to
the SSS, or without the latter having been
previously notified by the employer of the time of
the pregnancy, the employer shall pay to the SSS
damages equivalent to the benefits which said
employee would otherwise have been entitled to,
and the SSS shall in turn pay such amount to the
employee concerned
F. Loan
Salary loan, educational loan, housing loan, and
community hospital loan.
Reserved Fund – all revenues of SSS accumulated
in a fund not needed to meet the current
administrative an operations expenses incidental to
the carrying out of this Act.
Investment Reserve Fund – such portions of the
Reserve Fund as, are not needed to meet the current
benefit obligations thereof.
The Commission through such funds May:
1. Finance housing loans of members;
2. Long-term direct individual or group housing
loans giving priority to the low-income groups, up
to a maximum of 90% of the appraised value of
the properties to be mortgaged by the borrowers;
and
3. In short and medium-term loans to members
such as salary, educational, livelihood, marital,
calamity and emergency loans.
Non-transferability of Benefits )Sec. 15)
Such benefits are not transferable and no power of
attorney or other document executed by those
entitled thereto, in favor of any agent, attorney or any
other person for the collection thereof on their behalf
shall be recognized, except when they are physically
unable to collect personally such benefits.
Exemptions from Tax, Legal Processes and Lien
1. The SSS and all its assets and properties, all
contributions collected and all accruals thereto
and income or investment earnings therefrom as
well as all supplies, equipment, papers or
documents shall be exempt from any tax,
assessment, fee, charge, or customs or import
duty; and
2. All benefits payments made by the SS shall
likewise be exempt from all kinds of taxes, fees or
charges, and shall not be liable to attachments,
garnishments, levy or seizure by or under any
legal or equitable process whatsoever, either
before or after receipt by the person or persons
entitled thereto.
Remittance of Contributions
 The contributions imposed under this Act shall be
remitted to the SSS within the first 10 days of
each calendar month following the month for
which they are applicable or within such time as
the Commission may prescribe.
 Self-employed members shall remit their monthly
contributions quarterly on such dates and
schedules as the Commission may prescribe.
Remedies for Failure to Pay Required
Contribution (CAW)
1. It shall be Collected by the SSS in the same
manner as taxes are made collectible under the
National Internal Revenue Code.
2. By an Action in court, which shall hear and
dispose of the case in preference to any other
civil action; and
3. By issuing a Warrant to the Sheriff of any
province or city commanding him to levy upon
and sell any real and personal property of the
debtor. The Sheriff’s sale by virtue of said warrant
shall be governed by the same procedure
prescribed for executions against property upon
judgments by a court of record.
Duties of the Employer
1. To pay employer’s contribution in accordance
with the schedule provided in this Act
2. To deduct and to remit employees’ contributions;
3. To immediately report to the SSS the names,
ages, civil status, occupations, salaries and
dependents of all his employees who are subject
to compulsory coverage;
4. To keep true and accurate work records for such
period and containing such information as the
Commission may prescribe;
5. To require, as a condition to employment, the
presentation of a registration number secured by
the prospective employee form the SSS in
accordance with such procedure as the SSS may
adopt;
6. To notify the SSS of the confinement within five
(5) calendar days after receipt of the notification
from the employee member; and
7. To advance in two equal monthly installments the
maternity leave benefits within thirty (30) days
from the filing of the maternity leave application.
Liabilities of the Employer:
1. The employer shall pay to the SSS damages
equivalent to the benefits, which said employee
member would otherwise have been entitled to,
for his failure to remit the required contributions;
2. To pay, besides the contribution, a penalty
thereon of 3% per month from the date the
contribution falls due until paid, for his failure to
deduct and remit contributions;
3. To pay to the SSS damages equivalent to the
benefits which said employee member would
have been entitled to had his name been
reported on time by the employer to the SS, for
his failure to report matters required upon him;
and
4. To pay to the SSS damages equivalent to the
difference between the amount of benefits, to
which the employee member or his beneficiary
would have been entitled to had the proper
contributions been remitted to the SS and the
amount payable on the basis of contributions
actually remitted, for his misrepresentation of the
true date of employment of the employee
member or for remittance to the SSS
contributions less than those required in this Act
or for failure to remit any contributions due prior
to the date of contingency.
Note: The right of the employee to institute the
necessary action against the employer who refuses
or neglects to remit contributions may be commenced
within twenty (20) years from the time the
delinquency is known or the assessment is made by
the SSS, or from the time the benefit accrues, as the
case may be. The prescriptive period does not
commence when the obligation to pay the premiums
accrues (Lo v. CA, [1999]).
Settlement of Disputes (Sec. 5)
Jurisdiction: Social Security Commission
Cases Covered: Any dispute arising under this Act
with respect to:
1. coverage;
2. benefits;
3. contributions;
4. penalty; and
5. any matters related thereto.
Procedure:
1. Filing, determination and settlement of disputes
shall be governed by the rules and regulations
promulgated by the Commission;
2. Shall be heard by:
a. The Commission
b. Any of its members; or
c. Hearing officers duly authorized by the
Commission;
3. Shall be decided within twenty (20) days after the
submission of evidence; and
4. Shall be final and executory if no appeal within
fifteen (15) days from notice of judgment.
Judicial Review
1. Permitted only when all administrative remedies
have been exhausted;
2. Court of Appeals has jurisdiction to review
decisions both on questions of facts and law but if
only questions of law are involved, Supreme
Court has the jurisdiction;
3. Commission is deemed to be a party;
4. Heard in summary manner;
5. Take precedence over any cases except criminal
case where life imprisonment or death penalty is
imposed;
6. No appeal bond shall be required; and
7. No appeal shall act as a supersede as or a stay
of the order of the Commission unless the
Commission itself, or the Court of Appeals or the
Supreme Court, shall so order.
GOVERNMENT SERVICE INSURANCE SYSTEM
(R.A. 8291)
Coverage
Compulsory upon all employees receiving compensation
who have not reached the compulsory retirement age
irrespective of employment status.
Exceptions to the Compulsory Coverage
1. Members of the Armed Forces of the Philippines
(AFP);
2. Members of the Philippine National Police (PNP); and
3. Contractuals who have no employer and employee
relationship with the agencies they serve.
4. Purely casual employees.
Note: All members of the GSIS shall have life insurance,
retirement, and all other social security protections such
as disability, survivorship, separation, and unemployment
benefits.
Exception: Members of the judiciary and constitutional
commissions shall have life insurance only.

Computation of Service
 Computed from the date of original
appointment/election including period of service at
different times under one or more employer, those
performed overseas under the authority of the
Republic of the Philippines, and those that may be
prescribed by the GSIS.
 All service credited for retirement, resignation or
separation for which corresponding benefits have
been awarded shall be excluded in the computation
of service in case of reinstatement in the service of an
employer and subsequent retirement or separation
which is compensable under this Act.
Definition of Terms
Employer – The national government, its political
subdivisions, ranches, agencies or instrumentalities
including GOCCs and financial institutions with original
charters, the Constitutional Commissions and the
Judiciary.
Employee/ Member – Any person receiving
compensation while in the service of an employer,
whether by election or appointment irrespective of the
status of appointment.
Dependents
1. The legitimate spouse dependent for support upon
the member or pensioner;
2. The legitimate, legitimated legally adopted child,
including the illegitimate child who is:
a. Unmarried;
b. Not gainfully employed;
c. Not over the age of majority; or
d. Is over the age of majority but incapacitated and
incapable of self-support due to a mental or
physical defect acquired prior to age of majority;
3. Parents dependent upon the member for support.
Primary Beneficiary – The legal dependent spouse until
h/she remarries and the dependent children.
Secondary Beneficiary – The dependent parents and ,
subject to the restrictions on dependent children, the
legitimate descendants.
Compensation – The basic pay or salary received by an
employee, pursuant to his election/ appointment,
excluding per diems, bonuses, overtime pay, honoraria,
allowances and any other emoluments received in
addition to the basic pay.
Disability – Any loss or impairment of the normal
functions of the physical and/or mental faculty of a
member, which reduces or eliminates his/her capacity to
continue with his/her current gainful occupation or engage
in any other gainful occupation.
Total Disability – Complete incapacity to continue with
present employment or engage in any gainful occupation
due to the loss or impairment of the normal functions of
the physical and/or mental faculties of the member.
Permanent Total Disability – Accrues or arises when
recovery from impairment mentioned in Section 2[q]
(defining disability) is medically remote.
Temporary Total Disability – Accrues or arises when
impaired physical and/or mental faculties can be
rehabilitated and/or restored to their normal functions.
Permanent Partial Disability – Accrues or arises upon
the irrevocable loss or impairment of certain portion/s of
the physical faculties, despite which the member is able
to pursue a gainful occupation.
Benefits
General Rule: All members of the GSIS shall have life
insurance, retirement, and all other social security
protections such as disability, survivorship, separation,
and unemployment benefits.
Exception: Members of the judiciary and the
Constitutional Commissions shall be entitled only to life
insurance benefits.
A. Monthly Pensions (Sec. 9)
1. 37.5% of the re-valued average monthly
compensation; plus
2. 2.5% of said re-valued average monthly
compensation for each year of service in excess
of fifteen (15) years PROVIDED that the basic
monthly pension shall not exceed 90% of the
average monthly compensation.
3. The basic monthly pension may be adjusted upon
the recommendation of the President and
General Manager of the GSIS and approved by
the President of the Philippines in accordance
with the rules and regulations prescribed by the
GSIS; PROVIDED:
a. The basic monthly pension shall not be less
than one thousand and three hundred pesos
(1,300); and
b. The basic monthly pension for those who
have rendered at least twenty years (20) of
services after the effectivity of this Act shall
not be less than two tho7usand four hundred
pesos (2,400) a month.
B. Separation Benefits (Sec. 11)
1. Cash payment equivalent to 100% of the average
monthly compensation for each year of service
he paid contributions but not less than P12,000;

Conditions
a. Payable upon reaching the age of sixty (60)
years;
b. He has resigned or separated from service;
and
c. Has rendered at least three (3) years but less
than fifteen (15) years of service.
2. Cash payment equivalent to eighteen (18) times
his basic monthly pension at the time of
resignation or separation, plus an old age
pension benefit equal to the basic monthly
pension
Conditions:
a. Payable monthly upon reaching the age of
sixty (60) years;
b. He has resigned or separated form service;
and
c. Has rendered at least fifteen (15) years of
service.
Note: A member separated form the service shall
continue to be a member, and shall be entitled to
whatever benefits he has qualifies to in the event of any
contingency compensable under this Act.
C. Unemployment or Involuntary Separation
Benefits (Sec. 12)
Monthly cash payments of equivalent to 50% of the
average monthly compensation.
Conditions
1. Employee is separated from service due to the
abolition of his office or position; and
2. He has been paying integrated contributions for
at least one (1) year prior to separation.
D. Retirement Benefits (Sec. 13)
1. Lump sum payment, payable upon retirement
plus an old-age pension benefit payable monthly
for life, upon expiration of the five-year
guaranteed period covered by the lump sum; or
2. Cash payment equivalent to eighteen (18)
months of his basic monthly pension plus monthly
pension for life payable immediately
Conditions
a. He has rendered at least fifteen (15) years of
service;
b. He is at least sixty (60) years of age at the
time of retirement; and
c. He is not receiving a monthly pension benefit
from permanent total disability.
Note: Retirement is compulsory upon reaching sixty-five
(65) years of age with at least fifteen (15) years of
service. BUT if he has rendered less than fifteen (15)
years of service, he may be allowed to complete the said
period.
E. Permanent Total Disability Benefits (Sec. 15-16)
General Conditions: Employee suffers disability not
due to his: (MisNIK)
 Grave MISconduct;
 Notorious Negligence;
 Habitual Intoxication; and
 Willful intention to Kill himself or another.
1. Monthly income benefit for life equal to the basic
monthly pension.
Conditions:
a. Effective from the date of disability;
b. He is in service at the time of disability;
c. If he is separated from service, he has paid at
least 36 monthly contributions within the five-
year period immediately preceding disability,
or has paid a total of at least 180 monthly
contributions prior to the disability;
d. If he is in service and has paid a total of at
least 180 monthly contributions, he shall
receive an additional cash payment of
eighteen (18) times his basic monthly
pension; and
e. Member cannot enjoy monthly income benefit
and the old-age retirement simultaneously
2. Cash payment equivalent to 100% of his average
monthly compensation for each year of service
but not less than P12,000.
Conditions:
a. Member does not satisfy the conditions under
the preceding number; and
b. Has rendered at least three (3) years of
service at the time of disability.
 Suspension of Disability Benefits
1. He is re-employed;
2. He recovers form disability; or
3. He failed to present himself for medical
examination when required by the GSIS
F. Permanent Partial Disability (Sec. 17
Cash payment in accordance with the schedule
prescribed by the GSIS
Condition: Employee satisfies either [1.b.] or [1.c.d.e]
under permanent total disability.
G. Temporary Total Disability (Sec. 18)
 75% of the current daily compensation for each day
or fraction thereof of temporary disability
Conditions:
1. Such benefit shall not exceed 120 days in one
calendar year;
2. Employee has exhausted all his sick leave credits
and collective bargaining agreement sick leave
benefits;
3. He is in service at the time of his disability;
4. If separated, he has rendered at least three(3)
years of service and paid at least six (6) monthly
contributions in the 12-month period immediately
preceding the disability;
5. Member cannot enjoy temporary total disability
benefit and sick leave pay simultaneously;
6. If the disability requires more extensive treatment
that lasts beyond 120 days, the payment of the
temporary total disability benefit may be extended
by the GSIS but not to exceed a total of 240
days; and
7. Such benefit shall not be less than seventy pesos
(P70) a day.
H. Survivorship Benefits (Sec. 20)
1. Basic survivorship pension which is 50% of the
basic monthly pension; and
2. Dependent children’s pension not exceeding 50%
of the basic monthly pension.
Death of a Member (Sec. 21)
Upon death of a member, the primary beneficiaries
shall be entitled to:
1. Survivorship Pension
Conditions:
a. The deceased was in the service at the time
of his death;
b. If separated from the service, he has
rendered at least three(3) years of service at
the time of his death and paid 36 monthly
contributions within the five-year period
immediately preceding his death; or
c. If separated from service, he has paid a total
of at least 180 monthly contributions prior to
his death.
2. Survivorship Pension plus cash payment
equivalent to 100% of his average monthly
compensation for every year of service.
Conditions:
a. Employee was in service at the time of death;
and
b. Has rendered at least three (3) years of
service.
3. Cash payment equivalent to 100% of his average
monthly compensation for each year of service
he paid contributions, but not less than P12,000.
Conditions:
a. Employee has rendered at least three (3)
years of service prior to his death; and
b. He failed to qualify under the 1 and 2
mentioned above.
Note: If there are no primary beneficiaries, secondary
beneficiaries are entitled to :
 Cash payment equivalent to 100% of his average
monthly compensation for each year of service
he paid contributions, but not less than P12,000
PROVICED that the member was in service at
the time of his death and has rendered at least
three (3) years of service; and
 In the absence of secondary beneficiaries, such
benefits shall be paid to his legal heirs.
I. Funeral Benefits (Sec. 23)
In the amount fixed by the GSIS rules and regulations
but should not be less than P12,000, to be increased
to at least 18,000 after five (5) years, payable upon
the death of :
1. An active member;
2. A member who has been separated from the
service, but who may be entitled to future benefit;
3. A pensioner; or
4. A retiree who at the time of his retirement was of
pensionable age.
J. Life Insurance Benefits (Sec. 24)
Compulsory upon all employees except members of
the AFP and the PNP
K. Loan Grant (Sec. 36)
1. In direct housing loans to members and group
housing projects secured by first mortgage, giving
priority to the low income groups; and
2. In short and medium-term loans to members
such as salary, policy, educational, emergency
stock purchase plan and other similar loans.
Adjudication of Claims and Disputes
A. Prescription of Claims (Sec. 28)
Four years from date of contingency except lifetime
and retirement benefits.
B. Jurisdiction (Sec. 30)
GSIS has original and exclusive jurisdiction.
C. Appeal (Sec. 31)
1. Under Rule 43 and 45 of the Rules of Court of
1997;
2. Cases pending before the effectivity of the 1997
Rules of Court shall be governed by the rules in
force at that time.
 3. Appeal shall take precedence over any case
except criminal case where life imprisonment or
death or reclusion perpetua is imposed;
4. Appeal shall not stay the execution of the order or
award or unless ordered by the Board, by the
Court of Appeals or by the Supreme Court; and
5. Appeal shall be without prejudice to the special
civil action of certiorari when proper.

D. Execution (Sec. 32)

Any decision or award shall be executed in the same
manner as decisions of RTC.

Exemption from Tax, Legal Process and Lien

The GSIS, its assets, revenues and benefits paid shall be
exempt from all taxes, assessments, fees, charges or
duties of all kinds.
 SSS GSIS
1. EMPLOYER – Any person, who carries on in 1. EMPLOYER – National government, its
the Philippines any trade, business, industry, political subdivisions, branches, agencies or
undertaking, and uses the services of another instrumentalities, including government-
person who is under his orders as regard the owned or controlled corporations with original
employment, EXCEPT THOSE UNDER THE charters.
Covered by the GSIS. 2. EMPLOYEE – any person receiving
Act 2. EMPLOYEE – Any person who performs compensation while in the service of an
services for an employer who receives employer as defined herein whether by
compensation for such services, where there election or appointment.
is an employer-employee relationship.
3. SELF-EMPLOYED – considered as both
employer and employee
1. Legal spouse entitled for support;
2. Child, whether legitimate, legitimated, legally
Dependents
adopted or illegitimate; and
3. Parents dependent for support
1. Unmarried;
2. Not gainfully employed
Conditions for a
Has not reached twenty-one (21) years of age; or Not over age of majority; or
Child to be
Incapable of supporting himself either physically COMPULSORY
considered
or mentally prior to twenty-one (21) years of age All employees receiving compensation who have
Dependent
or majority age, as the case may be. not reached the compulsory retirement age,
irrespective of employment status.
1. Employment purely casual and not for the 1. Members of AFP and PNP;
purpose of occupation or business of the 2. Contractual employees, who have no
employer; employer-employee relationship with the
2. Services performed on or in connection with agency they serve; and
an alien vessel by an employee if he is 3. Members of Judiciary and Constitutional
employed when such vessel is outside the Commission, who shall be covered only by
Philippines; life insurance coverage.
Exception from 3. Service performed in the employ of the 4. Purely casual employees.
Coverage Philippine government, instrumentality or
agency thereof;
4. Service performed in the employ of a foreign
government, international organization, or
their wholly-owned instrumentality; and
5. Services performed by temporary employees,
which may be excluded by regulation of the
Commission.
All actual remuneration for employment, including The basis pay or salary received by an employee,
the mandated cost-of-living allowance, as well as pursuant to his election/appointment, excluding
the cash value of any remuneration paid in any per diems, bonuses, overtime pay, honoraria,
Compensation
medium other than cash except that part of the allowances and any other emoluments received
remuneration in excess of the maximum salary in addition to the basic pay.
credit.
1. Employer’s contribution on his account A member separated from the service shall
ceases; continue to be a member, and shall be entitled to
2. Employee’s obligation to contribute also whatever benefits he has qualified to in the event
Effects of ceases at the end of the month of separation; of any contingency compensable under this Act.
Separation from and
Employment 3. Employee shall be credited with all
contributions paid on his behalf and entitled to
benefits according to the provisions of this
Act.
 EMPLOYER EMPLOYER
Report immediately to SSS the following Report to GSIS the following information on all
information on all his covered employees: his covered
Names; Employees;
Ages; Names;
Civil status; Employment status;
Occupations; Positions;
Salaries; and Salaries; and
Dependents. Such other matter as determined by the GSIS
Reporting
Requirements
SELF-EMPLOYED
Report to SSS within thirty (30) days from the first
day of his operation the following:
Name;
Age;
Civil status;
Occupation;
Average monthly net income; and
Dependents.
Employer’s contributions; and
Funding
Employee’s/Member’s benefits
Monthly pensions;
Retirement benefits;
Permanent disability benefits;
Death benefits;
Funeral benefits;
Loan grant;
Benefits
1. Sickness benefits; 1. Temporary disability benefits;
2. Maternity leave benefits; and 2. Separation benefits
3. Dependents’ pension. 3. Unemployment /involuntary separation
benefits;
4. Survivorship benefits; and
5. Life insurance benefits.
Exemption from Property, assets, and revenues of the GSIS and SSS are all exempt from taxes, and all benefits paid
Tax, Legal by SSS or GSIS shall likewise be exempt from taxes, assessments, fees, charges and duties of all
Process. Lien kind.
DISPUTE ARISING FROM: DISPUTE ARISING FROM:
1. Coverage; Any dispute arising under this Act and other laws
2. Benefits; administered by the GSIS
3. Contributions;
4. Penalties; and JURISDICTION
5. Any matters related thereto GSIS

JURISDICTION WHEN TO DECIDE

Dispute Social Security Commission Thirty (30) days from the receipt of the hearing
Settlement officer’s findings and recommendations or thirty
WHEN TO DECIDE (30) days after submission for decision.
Mandatory period of twenty (20) days from the
submission of evidence APPEAL
CA – Rule 43
APPEAL SC – Rule 45
CA – Questions of law and facts
SC – Questions of law only

Prescriptive 10 YEARS from the time the right of action 4 YEARS from the date of contingency.
Period accrues.

PATERNITY LEAVE ACT OF 1996 (R.A. 8187)
Paternity Leave Benefit
Paternity leave for seven days with full payment of daily
compensation
Conditions:
1. Legally married to, and is cohabiting with, the woman
who delivers the baby;
2. Employee of private or public sector;
3. Only for the first four deliveries of legitimate spouse
with whom he is cohabiting; and
4. Notify his employer of the pregnancy of his legitimate
spouse and the expected date of such delivery.
Note: Delivery shall include childbirth or any miscarriage.
Note: Paternity leave benefits shall not be convertible to
cash in case it is not availed of.
RETIRMENT PAY LAW (R.A. 7644 AMENDING ART. 287
OF LC)
Coverage
1. All employees in the private sector;
2. Part-time employees;
3. Employees of service and other job contractors; and
4. Domestic helpers or persons in the personal service
of another.
Note: The law does not cover employees of :
1. Retail, service and agricultural establishments or
operations regularly employing not more than 10
employees; and
2. Government and its political subdivisions, including
GOCC’s, if they are covered by the Civil Service Law
and its regulations.
When to Retire
1. Upon reaching the retirement age established in the
CBA or any other employment contract.
Retirement Benefits – as he may have earned under
existing laws and any CBA and other agreements
provided that:
a. it shall not be less than those prescribed by the
Retirement Pay Law; and
b. if such benefits are less, the employer shall pay
the difference between the amount due under the
Retirement Pay Law and that provided under the
CBA or retirement plan.
2. In the absence of retirement plan or CBA regarding
retirement employee upon reaching the age of 60
years or more and has served at least 5 years in the
said establishment (optional retirement)
Retirement Benefits – equivalent to at least 1-/month
salary for every year of service, a fraction of at least
six months as one whole year.
Note: Unless the parties provide for broader
inclusions, the term “1/2 month salary” shall mean 15
days + 2.5 days representing 1/12 of the 13 th month
pay and the cash equivalent of not more than 5 days
of service incentive leaves or a total of 22.5 days for
every year of service.
Note: 65 years was declared as the compulsory
retirement age.
Retirement Plan vis-à-vis Retirement Pay Law
A retirement plan in a company partakes the nature of
a contract, with the employer and the employee as
the contracting parties. R.A. No. 7641 only applies in
a situation where:
1. There is no CBA or other applicable employment
contract providing for retirement benefits for an
employee; or
2. There is a CBA or other applicable employment
contract providing for retirement benefits for an
employee, but it is below the requirements set for
by law.
Even if the company does not include 13 th month pay and
service incentive leave as part of the salary base, R.A.
No. 7641 does not apply where the employee receives a
lump sum of 1 ½ month’s pay per year of service. The
company already grants to its retiring employee more
than what the law gives which is ½ month salary for every
year of service. (Oxales v. United laboratories, Inc., GR
No. 152991, July 21, 2008)
ANTI-SEXUAL HARRASMENT (R.A. 7877)
Complete Title
An Act Declaring Sexual Harassment Unlawful in the
Employment Education or Training Environment and for
Other Purposes.
Declaration of Policy
The State shall:
1. Value the dignity of every individual;
2. Enhance the development of its human resources;
3. Guarantee full respect for human rights; and
4. Uphold the dignity of workers, employees, applicants
for employment, students or those undergoing
training, instruction or education.
 All forms of sexual harassment in the employment,
education or training environment are hereby
declared unlawful.
When Sexual Harassment Punishable : (WET)
1. Work-related;
2. Education-related; and
3. Training-related.
Work, Education or Training-Related Sexual
Harassment Defined Who May Commit
1. employer;
2. employee;
3. manager;
4. supervisor;
5. agent of the employer;
6. teacher;
7. instructor;
8. professor;
9. coach;
10. trainor; and
11. any other person who, having Authority, Influence or
Moral (AIM) ascendancy over another.
Where Committed
In a work or training or education environment.
How Committed
Generally: Demands, requests, or otherwise requires any
sexual favor from the other regardless of whether the
demand, request or requirement for submission is
accepted by the object of the said act.
Specifically
A. In a work-related or employment environment,
sexual harassment is committed when:
1. The sexual favor is made as a condition:
a. in the hiring or in the employment
b. Re-employment or continued employment of
said individual; or
c. In granting said individual favorable
compensation, terms, conditions, promotions
or privileges.
2. The refusal to grant the sexual favor results in
limiting, segregating or classifying the employee
which in any way would discriminate, deprive or
diminish, employment opportunities or otherwise
adversely affect said employee;
3. The above acts would impair the employee’s right
and privileges under existing labor laws; and
4. The above acts would result in an intimidating,
hostile or offensive environment for the employee
B. In an education or training environment, sexual
harassment is committed:
1. Against one who is under the care, custody or
supervision of the offender;
2. Against one whose education, training,
apprenticeship or tutorship is entrusted to the
offender.
3. When the sexual favor is made a condition to the
giving of a passing grade, or the granting of
honors and scholarships, or the payment of a
stipend, allowance or other benefits, privileges or
considerations; and
4. When the sexual advances results in an
intimidating, hostile, or offensive environment for
the result, trainee or apprentice (IHO)
Note: Any person who directs or induces another to
commit any act of sexual harassment as herein defined,
or who cooperates in the commission thereof by another,
without which it would not have been committed, shall
also be held liable under this Act.
Duty of the Employer or Head of Office in a Work-
Related, Education or Training Environment
It is the duty of the employer or head of office in a work-
related, education or training environment:
1. To prevent or deter the commission of acts of sexual
harassment;
2. To provide the procedures for the resolution,
settlement or prosecution of acts of sexual
harassment;
3. Promulgate appropriate rules and regulations in
consultation with and jointly approved by the
employees or students or trainees, through their duly
designated representatives, prescribing the
procedure for the investigation of sexual harassment
cases and the administrative sanctions therefore;
4. Create a committee on decorum and investigation of
cases on sexual harassment to increase
understanding and prevent incidents of sexual
harassment; and
5. The employer or head of office, education or training
institution shall disseminate or post a copy of this Act
for the information of all concerned.
Note: Administrative sanctions shall not be a bar to
prosecution in the proper courts for unlawful acts of
sexual harassment.
Liability of the Employer or Head of Office, Education
or Training Institution
Shall be solidarily liable for damages arising from the acts
of sexual harassment committed in the employment,
education or training environment if the employer or head
of office, educational or training institution is informed of
such acts by the offended party and no immediate action
is taken thereon.
Independent Action for Damages
Nothing in this Act shall preclude the victim of work,
education or training-related sexual harassment form
instituting a separate and independent action for
damages and other affirmative relief.
Penalties
Any person who violates the provisions of this Act shall,
upon conviction, be penalized by imprisonment of not less
than one (1) month nor more than six (6) months, or a
fine of not less than ten thousand pesos (P10,000) nor
more than twenty thousand pesos (P20,000), or both
such fine and imprisonment at the discretion of the court.
Prescription
Any action arising form the violation of the provisions of
this Act shall prescribe in three (3) years.
ACT AGAINST CHILD LABOR (R.A. NO. 9231)
Complete Title
An Act Providing for the Elimination of the Worst Forms of
Child Labor and Affording Stronger Protection for the
Working Child, Amending for this Purpose Republic Act
No. 7610, as Amended, Known as the “Special Protection
of Children Against Child Abuse, Exploitation and
Discrimination Act.”
Policy
It is hereby declared to the policy of the State to:
1. Provide special protection to children form all forms of
abuse, neglect, cruelty, exploitation and
discrimination and other conditions prejudicial to their
development including child labor and its worst forms;
2. Provide sanctions for their commission and carry out
a program for prevention and deterrence of and crisis
intervention in situations of child abuse, exploitation
and discrimination; and
3. Protect and rehabilitate children gravely threatened or
endangered by circumstances which affect or will
affect their survival and normal development and over
which they have no control.
Definition of Terms (D.O. 65-04)
Child: Any person under 18 years of age.
Child Labor – Any work or economic activity performed
by a child that subjects him/her to any form of exploitation
or is harmful to his/her health and safety or physical,
mental or psychosocial development.
Working Child – Any child engaged as follows:
1. when the child is below eighteen (18) years of age, in
work or economic activity that is not child labor as
defined in the immediately preceding sub-paragraph;
and
2. when the child below fifteen (15) years of age, (i) in
work where he/she is directly under the responsibility
of his/her parents or legal guardian and where only
members of the child’s family are employed; or (ii) in
public entertainment or information.
Collective Needs of the Family – Such basic needs as
food, shelter, light and water, clothing, education, medical
transportation and other expenditure items necessary for
the survival of the family of the child.
Work Permit – The permit secured by the employer,
parent or guardian from the DOLE for any child below 5
years of age in any work allowed under R.A. 19231.
Alternative Learning System – A parallel and
comparable learning system which provides a viable
alternative to the existing formal education system.
Forced Labor and Slavery – The extraction of work or
services from any person by means of enticement,
violence, intimidation or threat, use of force or coercion,
including deprivation of freedom, abuse of authority or
moral ascendancy, debt bondage or deception.
Normal Development of the Child – The physical,
emotional, mental, and spiritual growth of a child within a
safe and nurturing environment where he/she is given
adequate nourishment, care and protection and the
opportunity to perform tasks appropriate at each stage of
development.
When State May Intervene in Behalf of the child
1. The parent, guardian, teacher or person having care
or custody of the child fails or is unable to protect the
child against abuse, exploitation and discrimination;
or
2. Such acts against the child are committed by the said
parent, guardian, teacher or person having care and
custody of the same.
Employment of Children
General Rule: Children below 15 years of age shall not
be employed.
Exceptions:
1. When a child works directly under the sole
responsibility of his/her parents or legal guardian and
where only members of his/her family are employed.
Conditions:
a. That his/her employment neither endangers his
life, safety, health and morals, nor impairs his
normal development; and
b. That the parent or legal guardian shall provide
the said minor child with the prescribed primary
and/or secondary education.
2. Where the child’s employment or participation in
public entertainment or information through cinema,
theater, radio, television or other forms of media is
essential.
Conditions:
a. That the employment contract is concluded by
the child’s parents or legal guardian with the
express agreement of the child concerned, if
possible, and the approval of DOLE;
b. That the following requirements in all instances
are strictly complied with:
i. The employer shall ensure the protection,
health, safety, morals and normal
development of the child;
ii. The employer shall institute measure to
prevent the child’s exploitation or
discrimination taking into account the system
and level of remuneration and the duration
and arrangement of working time; and
iii. The employer shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program
for training and skills acquisition of the child.
iv. The child is provided with at least the
mandatory elementary or secondary
education.
Note: In the above-exceptional cases, the employer shall
first secure before engaging such child, a WORK
PERMIT from DOLE which shall ensure observance of
the above requirements.
 For purposes of this Article, the term CHILD shall
apply to al persons under 18 years of age;
Hours of Work of a Working Child
1. A child below fifteen (15) years of age may be
allowed to work for not more than twenty (20) hours a
week;
Condition: that the work shall not be more than four
(4) hours at any given day.
2. A child fifteen (15) years of age but below eighteen
(18 shall not be allowed to work for more than eight
(8) hours a day, and in no case beyond forty (40)
hours a week; and
3. No child below fifteen (15) years of age shall be
allowed to work between eight o’clock in the evening
and six o’clock in the morning of the following day
and no child fifteen (15) years of age but below
eighteen (18) shall be allowed to work between ten
o’clock in the evening and six o’clock in the morning
of the following day.
Ownership, Usage and Administration of the Working
Child’s Income
1. The wages, salaries, earnings and other income of
the working child shall belong to him/her in ownership
and shall be set aside primarily for his/her support,
education or skills acquisition and secondarily to the
collective needs of the family.
Condition: That not more than 20% of the child’s
income may be used for the collective needs of the
family
2. The income of the working child and/or the property
acquired through the work of the child shall be
administered by both parents. In the absence or
incapacity of either parents, the other parent shall
administer the same. In case both parents ar absent
or incapacitated, the order of preference on parental
authority, as provided for under the Family Code shall
apply.
Trust Fund to Preserve the Part of the Working
Child’s Income
The parent or legal guardian of a working child below
eighteen (18) years of age shall set up a trust fund for at
least 30% of the earnings of the child whose wages and
salaries from work and other income amount to at least
P200,000 annually, or which he/she shall render a semi-
annual accounting for the fund to DOLE. The child shall
have full control of the trust fund upon reaching the age of
majority.
Prohibition against Worst Forms of Child Labor
“Worst forms of child labor” shall refer to any of the
following: (Sec. 3 )
1. All forms of slavery, as defined under the “Anti-
Trafficking of Persons Act of 2003” or practices similar
to slavery such as sale and trafficking of children,
debt bondage and serfdom and forced or compulsory
labor, including recruitment of children for use in
armed conflict; OR
2. The use, procuring, offering or exposing of child for
prostitution, for the production of pornography or for
pornographic performances; OR
3. The use, procuring, offering or exposing of a child for
illegal or illicit activities, including the production and
trafficking of dangerous drugs and volatile substances
prohibited under existing laws; OR
4. Work which, by its nature or the circumstances in
which it is carried out, is hazardous or likely to be
harmful to the health, safety or morals of children,
such that it:
a. Debases, degrades or demeans the intrinsic
worth and dignity of a child as a human being;
OR
b. Exposes the child to physical, emotional or
sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; OR
c. Is performed underground, underwater, or at
dangerous heights; OR
 d. Involves the use of dangerous machinery,
equipment and tools such as power-driven or
explosive power-actuated tools; OR
e. Exposes the child to physical danger such as but
not limited to the dangerous feat of balancing,
physical strength or contortion or which requires
the manual transport of heavy loads; OR
f. Is performed in an unhealthy environment
exposing the child to hazardous working
conditions, elements, substances co-agents or
processes involving ionizing, radiation, fire,
flammable substances, noxious components and
the like, or to extreme temperatures, noise levels,
or vibrations; OR
g. Is performed under particularly difficult condition;
OR
h. Exposes the child to biological agents such as
bacteria, fungi, viruses, protozoans, nematodes
and other parasites; OR
i. Involves the manufacture or handling of
explosives and other pyrotechnic products.
Access to Education and Training for Working
Children
No child shall be deprived of formal or non-formal
education. In all cases of employment allowed in this Act,
the employer shall provide a working child with access to
at least primary and secondary education.
Prohibition on the Employment of Children in Certain
Advertisements
No child shall be employed as a model in any
advertisement, directly or indirectly, promoting alcoholic
beverages, intoxicating drinks, tobacco and its by-
products, gambling or any form of violence or
pornography
Trust Fund form Fines and Penalties
The fine imposed by the court shall be treated as a Trust
Fund, administered by DOLE and disbursed exclusively
for the needs, including the cost of rehabilitation and
reintegration into the mainstream of society of the working
children ho are victims of violations of this Act, and or the
programs and projects that will prevent acts of child labor.
Who May File a Complaint on Cases of Unlawful Acts
committed against children (Sec. 8)
1. Offended party;
2. Parents or guardians;
3. Ascendants or collateral relatives within the third (3 rd)
degree of consanguinity;
4. Officer, social worker or representative of a licensed
child –caring institution;
5. Officer or social worker of DSWD;
6. Barangay chairman of the place where the violation
occurred, where the child is residing or employed; or
7. At least three (3) concerned, responsible citizens
where the violation occurred.
Jurisdiction (Sec. 9)
The Family Courts shall have original jurisdiction over all
cases involving offenses punishable under this Act.
Note: In cities or provinces where there are no family
courts yet, the RTCs and the MTCs shall have
CONCURRENT JURISDICTION depending on the
penalties prescribed for the the offense charged.
Preliminary Investigation
Terminated within a period of thirty (30) days from the
date of filing. If the preliminary investigation establishes a
prima facie case, then the corresponding information shall
be filed in court within 48 hours form the termination of
the investigation.
Trial
Terminated by the court not later than ninety (90) days
from the date of filing of information. Decision on said
case shall be rendered within a period of fifteen (15) days
from the date of submission of the case.
Exemption from Filing Fees
When the victim of child labor institutes a separate civil
action for the recovery of civil damages, he/she shall be
exempt from payment of filing fees.
Access to Immediate Legal, Medical and Psycho-
Social Services.
The working child shall have the right to free legal,
medical and psycho-social services to be provided by the
State.
13th MONTH PAY LAW (P.D. 851)
Definition of Terms
13th Month Pay – Not less than 1/12 of the basic salary of
an employee within a calendar year.
Basic Salary – All remunerations or earnings paid by an
employer to an employee for services rendered by may
not include:
1. Cost-of-living allowances;
2. Profit-sharing payments;
3. All allowances and monetary benefits which are not
considered or integrated as part of the regular or
basic salary of the employee at the time of the
promulgation of the Decree on December 16, 1975
(San Miguel Corporation v. Inciong, [1981]).
4. Commissions, if it is not an integral part of the basic
salary (Philippine Duplicators, Inc. v NLRC, [1995])
Note: However, these salary-related benefits (i.e. cash
equivalent of unused vacation and sick leave credits,
overtime premium, night differential and holiday pay)
should be included in the computation of the 13 th month
pay if by individual or collective agreement, company
practice or policy, the same are treated as part of the
basic salary of the employees.
Note: Salesmen’s commission comprising a pre-
determined percent of the selling price of the goods by
each salesmen are included in the term “basic salary” for
purposes of computing the 13th month pay (Philippine
Duplicators, Inc. v. NLRC, [1995]). HOWEVER,
Commissions of medical representatives do not form part
of “basic salary” and are not included in the computation
of the 13th month pay. Medical representatives are not
salesmen because they did not effect any sale of article
at all; additional payments receive partook of the nature
of profit-sharing bonuses (Boie-Takeda Chemicals, Inc. v.
Dela Serna, [1993])
Coverage
A. Employers (Sec. 3)
General Rule: ALL employers are covered by this Act
Except: (DG-E-HP)
1. Distressed employers such as:
a. Those which are currently incurring
substantial losses; or
b. In the case of non-profit institutions and
organizations, where their income has
consistently declined by more than 40% of
their normal income for the last two years.
2. The Government and any of its political
subdivisions, including GOCCs except those
corporations operating essentially as private
subsidiaries of the Government;
3. Employers already paying their employees 13 th
month pay or more in a calendar year or its
Equivalent at the time of this issuance.
Note: Its equivalent includes:
a. Christmas bonus;
b. Midyear bonus;
c. Profit sharing payments; and
d. Other cash bonuses not less than 1/12 of the
basic salary.
4. Employers of Household helpers and persons in
the personal service of another in relation to such
workers; and
5. Employers of those who are Paid on:
a. Purely commission basis;
b. Boundary basis; or
c. Task basis; or
d. A fixed amount for performing a specific work,
except where the workers are paid on piece-
rate basis in which case the employer shall
be covered by this issuance insofar as such
workers are concerned.
Note: Workers paid on piece-rate basis refer to
those who are paid a standard amount for every
piece or unit of work produced that is more or
less regularly replicated, without regard to the
time spent in producing the same.
Piece-rate workers are classified into:
1. Piece-rate workers working inside the work
premises of the employer and are under the
direct supervision of the employer, thus
entitled to 13th month pay; and
2. Piece-rate workers who work outside the
work premises of the employer whose hours
spent in the performance of their work cannot
be ascertained with reasonable certainty and
are not under the direct supervision of the
employer, thus NOT entitled to 13 th month
pay (Labor congress of the Philippines v.
NLRC).
B. Employees
General Rule: all rank-and-file employees regardless
of the amount of basic salary that they receive in a
month, if their employers are not otherwise exempted
from paying the 13th month pay. Such employees are
entitled to the 13th month pay regardless of their
designation or employment status, and irrespective of
the method by which their wages are paid,
PROVIDED that they have worked for at least (1) one
month during a calendar year (Revised Guidelines on
the Implementation of the 13th-Month Pay Law)
Except: (H-CR-G)
1. Household helpers
2. Employees paid purely on Commission basis
3. Employees already Receiving 13th Month pay
4. Government employees
Note: Part-time employees are entitled to 13 th month
pay.
Note: Managerial employees may receive 13 th month
pay if such payment has been a company practice
Time of Payment
Shall be paid not later than December 24 of each year. An
employer however may give to his employees one half
(1/2) of the required 13th month pay before the opening of
the regular school year and the other half on or before
December 24 of every year. The frequency of payment
may be subject on agreement between employer and the
collective bargaining agent of the employees.
Non-Inclusion in Regular Wage
The benefits granted under this issuance shall not be
credited as part of the regular wage of the employees for
purposes of determining overtime and premium pay,
fringe benefits, as well as premium contributions to the
State Insurance Fund, social security, medicare and
private welfare and retirement plans.
Rule on certain types of Employees
1. Employees Paid by Results
 Employees paid on piece work basis are by law
entitled to the 13th month pay.
 Employees paid a fixed or guaranteed wage plus
commission are also entitled to the mandated 13 th
month pay, based on their total earnings during
the calendar year, i.e., on both their fixed or
guaranteed wage and commission.
2. Those with Multiple Employers
 Government employees working part time in a
private enterprise, including private educational
institutions, as well as employees working in two
or more private firms, whether on full or part time
basis, are entitled to the required 13 th month pay
from all their private employers regardless of their
total earnings from each or all their employers.
Private School Teachers
Private school teacher, including faculty members of
universities and colleges, are entitled to the required
13th month pay, regardless of the number of months
they teach or are paid within a year, if they have
rendered service for at least one (1) month within a
year.
Resigned or Separated Employees
 If resigned or separated from work before the
time for payment of the 13th month pay, entitled to
this monetary benefit in proportion to the length of
time he worked during the year, reckoned from
the time he started working during the calendar
year up to the time of his resignation or
termination from the service.
Pro-Rated 13th Month Pay
General Rule: Pro-ration of this benefit applies only in
cases of resignation or separation form work;
computation should be based on length of service and not
on the actual wage earned by the worker (Honda Phils,
Inc. v. Samahan ng Manggagawa sa Honda, 460 SCRA
186, [2005]).
Exception: Employees who are paid a guaranteed
minimum wag or commissions earned are entitled to 13 th
month pay based on total earnings. (Philippine
Agricultural Commercial and Industrial Workers Union v.
NLRC, 247 SCRA 256 {1995})
Adjudication of Claims
Non-payment of 13th month pay shall be treated as
money claims cases.
Note: Difference of opinion on how to compute the 13th
Month pay is non-strikeable and a strike held on that
ground is illegal (Isalama Machine Works Corp. v. NLRC,
{1995])
14th Month Pay
the granting of 14th month pay is a management
prerogative and is not legally demandable. It is basically a
bonus and is gratuitous in nature (Kamaya Point Hotel
v. NLRC, [1989])
MIGRANT WORKERS AND OVERSEAS FILIPINOS
ACT OF 1995 (R.A. 8042)
Definition of Terms
Migrant Workers – Person who is to be engaged, is
engaged or has been engaged in a remunerated activity
in a state of which he/she is not a legal resident; to be
used interchangeable with overseas Filipino worker.
Overseas Filipinos – Dependents of migrant workers
and other Filipino nationals who are in distress.
Deployment of Migrant Workers
The State shall deploy overseas Filipino workers only in
countries where the rights of Filipino migrant workers are
protected. The following are recognized as a guarantee
on the part of the receiving country for the protection of
overseas Filipino Workers:
1. it has existing labor and social laws protecting the
rights of migrant workers;
2. It is a signatory to multilateral conventions,
declarations or resolutions relating to the protection of
migrant workers;
3. it has concluded a bilateral agreement or
arrangement with the government protecting the
rights of overseas Filipino workers; and
4. It is taking positive, concrete measures to protect the
rights of migrant workers.
Termination of Ban on Deployment
The government, in pursuit of the national interest or
when public welfare so requires, may, at any time,
terminated or impose a ban on the deployment of migrant
workers.
Illegal Recruitment (See Art. 38)
Country Team Approach
All officers, representatives and personnel of the
Philippine government posted abroad regardless of their
mother agencies shall; on a per country basis, act as one
country-team with a mission under the leadership of the
ambassador. The ambassador may recommend to the
Sec of DFA the recall of officers, representatives and
personnel of the Philippine government posted abroad for
acts inimical to the national interest such as, but not
limited to, failure to provide the necessary services to
protect the rights of overseas Filipinos.

Jurisdiction
A. NLRC (Sec. 10)
 Original and exclusive jurisdiction over money
claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
 Cases to be decided within ninety (90) calendar
days after the filing of the complaint.
Liability: Principal/employer and the
recruitment/placement agency for any and all claims
under this section shall be joint and several. The
performance bond to be filed by the
recruitment/placement agency, as provided by law,
shall be answerable for all money claims or damages
that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the
corporate officers, directors or partners shall be jointly
and solidarily liable with the agency.
B. POEA
Retains original and exclusive jurisdiction to hear and
decide:
1 All cases which are administrative in character,
involving or arising out of violations of rules and
regulations relating to licensing and registration of
recruitment and employment agencies or entities;
and
2 Disciplinary action cases and other special cases,
which are administrative in character, involving
employers, principals, contracting partners and
Filipino migrant workers.
Venue: POEA Adjudication Office of DOLE or POEA
Regional Office of the place where the complainant
applied or was recruited, at the option of the
complainant.
C. RTC
Criminal action arising from illegal recruitment shall
be filed with the RTC of the province or city where the
offense was committed or where the offended party
actually resides at the time of the commission of the
offense. The court where the criminal action is first
filed shall acquire jurisdiction to the exclusion of other
courts.
Effects of Termination Overseas Employment without
Just, Valid or Authorized Cause
In the case of Marsman manning Agency v. NLRC,
August 25, 1999, the following rules were observed:
1. if the contract of employment is BELOW ONE (1)
YEAR, the salaries for the entire unexpired portion of
the contract shall be paid;
2. If the contract of the employment is ONE (1) YEAR
AND ABOVE, then the salaries for the entire
unexpired portion of the contract OR three (3) months
pay for every year of the unexpired portion,
whichever is lesser, shall be paid.
Note: The date when the termination of employment
occurred is material. If the termination occurred on or
after July 15, 1995, apply provisions of R.A. 8042.
Mandatory Periods for Resolution
 The preliminary investigations of cases under this Act
shall be terminated within a period of thirty (30)
calendar days from the date of their filing.
 Where the preliminary investigation is conducted by a
prosecution officer and a prima facie case is
established, the corresponding information shall be
filed in court within 24 hours from the termination of
the investigation.
 If the preliminary investigation is conducted by a
judge and a prima facie case is found to exist, the
corresponding information shall be filed by the proper
prosecution officer within 48 hours form the date of
receipt of the records of the case.
Repatriation
General Rule : (Sec. 15)
Repatriation of the worker and the transport of his
personal belongings shall be the primary responsibility of
the agency which recruited of deployed the worker
overseas. The repatriation of remains and transport of the
personal belongings of a deceased worker and all costs
attendant thereto shall be borned by the principal and/or
the local agency.
Exceptions:
1. If the termination of employment is due solely to the
fault of the worker, the principal/employer or agency
shall not in any manner be responsible for the
repatriation of the former and/or his belongings; and
2. In case of war, epidemic, disaster of calamities,
natural or man-made, and other similar events, and
where the principal or recruitment agency cannot be
identified, the Overseas Workers Welfare
Administration (OWWA), in coordination with
appropriate international agencies, shall take charge
of the repatriation