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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 4. Art III, Sec. 8
Constitution: (Art. XIII, Sec. 3,2nd par.). The right of the people, including those employed in the
A. Under Labor Standards (TReSH) public and private sectors, to form unions, associations,
1. Right to security of Tenure or societies for purposes not contrary to law, shall not be
2. Right to Receive a living wage abridged.
3. Right to Share in the fruits of production
4. Right to work under Humane conditions 5. Art. III, Sec 18(2)
No voluntary servitude in any form shall exist except as
B. Under Labor Relations (OCEP) a punishment for a crime whereof the party shall have
1. Right to Organize themselves been duly convicted.
2. Right to Conduct collective bargaining or
negotiation with management 6. Art. XII, Sec. 12
3. Right to Engage in peaceful concerted activities The State shall promote the preferential use of Filipino
including strike labor, domestic materials and locally produced goods
4. Right to Participate in policy and decision- and adopt measures that held make them competitive.
making process.
7. Art. XIII, Sec. 14
Constitutional Mandates The State shall protect working women by providing safe
1. Art. XIII, Sec. 3 and healthful working conditions, taking into account
The State shall afford full protection to labor, local and their maternal functions, and such facilities and
overseas, organized and unorganized, and promote full opportunities that will enhance their welfare and enable
employment and equality of employment opportunities them to realize their full potential in the service of the
for all. nation.

It shall guarantee the rights of all workers to self- 8. Art. XVI, Sec.8
organization, collective bargaining and negotiations, and The State shall, from time to time, review to upgrade the
peaceful concerted activities, including the right to strike pensions and other benefits due to retirees of both the
in accordance with law. They shall be entitled to security government and the private sectors.
tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making Related Laws
process affecting their rights and benefits as may be 1. Civil Code
provided by law. Art. 1700. The relation between capital and labor are not
merely contractual. They are so impressed with public
The State shall promote the principle of shared interest that labor contracts must yield to the common
responsibility between workers and employers and the good. Therefore, such contracts are subject to the
preferential use of voluntary modes in settling disputes, special laws on labor unions, collective bargaining,
including conciliation, and shall enforce their mutual strikes and lockouts, closed shop, wages, working
compliance therewith to foster industrial peace. conditions, hours of labor and similar subjects.

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.
Art. 1701. Neither capital nor labor shall act oppressively honored principle of salu populi est suprema lex
against the other, or impair the interest or convenience (Calalang v. Williams, No. 47800, December 2, 1940).
of the public.
Police Power as the basis: it is the power of the
Art. 1702. In case of doubt, all labor legislations and all Government to enact laws, within constitutional limits, to
labor contracts shall be construed in favor of the safety promote the order, safety, health, morals and general
and decent living for the laborer. welfare of society (People v. Vera, No. 45748, April 5,
1939).
Art. 1703. No contract which practically amounts to
involuntary servitude, under any guise whatsoever, shall Article 3: Declaration of Basic Policy
be valid.
The State shall: (APERA)
2. Revised Penal Code 1. Afford protection to labor
Art. 289. Formation, maintenance and prohibition of 2. Promote full employment
combination of capital or labor through violence or 3. Ensure equal work opportunities regardless of
threats. – The penalty of arresto mayor and a fine not sex, age or creed
exceeding 300 pesos shall be imposed upon any person 4. Regulate the relations between workers and
who, for the purpose of organizing, maintaining or employers
preventing coalitions of capital or labor, strike of laborers 5. Assure the right of workers to: (JSSC)
of lock-out of employees, shall employ violence or  Just and humane conditions of work
threats in such a degree as to compel or force the  Self-organization
laborers or employers in the free and legal exercises of  Security of tenure
their industry or work, if the act shall not constitute a  Collective bargaining
more serious offense in accordance with the provisions
of this Code. Article 4: Construction in Favor of Labor

3. Special Laws  Construed in favor of labor if there is a doubt as


 SSS Law to the meaning of the legal and contractual
 GSIS Law provision. If the provision is clear and
 National Health Insurance Act unambiguous, it must be applied in accordance
 Paternity Leave Act with its express terms (Meralco v. NLRC, GR
 Retirement Pay Law No. 78763, July 12, 1989).
 Home Mutual Development Fund Law
 Anti-Sexual Harassment Act  However, not all labor disputes should be
 Anti-Child Labor Act resolved in favor of labor. The law also
 13th Month Pay Law recognizes that management has rights which
 Migrant Workers and Overseas Filipinos Act of are also entitled to respect and enforcement in
1995 (R.A. No. 8042) the interest of fair play (St. Luke’s Medical
 Comprehensive Agrarian Reform Law Center Employees Assoc. v. NLRC, GR No.
 Magna Carta for Public Health Workers 162053 March 7, 2007).

Social Justice as the Aim: Social Justice is neither


communism, nor despotism, nor atomism not anarchy, Reasons for Affording Greater Protection to
but the humanization or laws and the equalization of Employees
social and economic forces by the State so that justice in 1. There is greater supply than demand for labor;
its rational and objectively secular conception may at and
least be approximated. Social justice means the 2. The need for employment by labor comes from
promotion of the welfare of all people, the adoption by vital, and even desperate necessity (Sanchez v.
the government of measure calculated to ensure Harry Lyons Construction Inc., GR No. L-2779,
economic stability of all the component elements of the October 18, 1850).
society through the maintenance of proper economic
and social equilibrium in the interrelations of the Extent of Protection to Labor: to an employee who
members of the community, constitutionally, through the is abused either by the employer or by the union
adoption of measure legally justifiable, or extra- leadership or their respective representatives.
constitutionally, through the exercise of powers
underlying the existence of all governments, on the time
Management Rights Article 6: Applicability
 Under the doctrine of management prerogative,
every employer has the inherent right to regulate, General Rule: The Code applies to all workers, whether
according to his own discretion and judgment, all agricultural or non-agricultural, including employees in a
aspects of employment, including hiring, work government corporation incorporated under the
assignments, working methods, the time, place and Corporation Code (See discussion under Art. 244).
manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline,
dismissal and recall of employees (Rural Bank of Exceptions:
Cantilan v. Julve, FR No. 169750, February 27, 1. Government employees
2007). 2. Employees of government corporations
created by special or original charter (Juco v.
The employer has the right to: (CPSTR) NLRC, GR No. 98107, August 18, 1997)
3. Foreign governments (JUSMAG-
 Management prerogatives, however are subject to Philippines v. NLRC, GR No. 108813, December
limitations provided by (1) law, (2) contract or 15, 1994)
collective bargaining agreements and (3) general 4. International agencies (Lasco v.
principles of fair play and justice (Mendoza v. Rural UNRFNRE, GR Nos. 109095-109107, February
Bank of Lucban, GR No. 155421, July 7, 2004). 23, 1995), employees of intergovernmental or
international organizations ( SEAFDEC-AQD v.
NLRC, GR No. 86773, February 14, 1992)
Article 5: Rules and Regulations 5. Corporate officers/ intra-corporate
disputes which fall under PD 902-A and now fall
 The rules and regulations issued by the under the jurisdiction of the Regular Courts
Department of Labor and Employment (DOLE) pursuant to the New Securities Regulation Code
shall become effective 15 DAYS AFTER (Nacpil v. IBC, GR No. 144767, March 21, 2002
announcement of their adoption in newspapers 6. Local water district (Tanjay Water
of general circulation. Sec. 3[1] and Sec. 4 of District v. Gabaton, GR Nos. 63742 and 84300, 17
the Revised Administrative Code of 1987 also April 1989) except where NLRC Jurisdiction is
require the filing of three (3) certified copies of invoked (Zamboanga City Water District v. Buat,
the administrative rules and regulations with the GR No. 104389, May 27, 1994).
UP Law Center.

 Administrative rules and regulations must be Agricultural or Farm Worker – one employed in
published if their purpose is to enforce or an agricultural or farm enterprise and assigned to
implement existing law pursuant to a valid perform tasks which are directly related to the
delegation (Tañada v. Tuvera, GR No. L63915, agricultural activities of the employer such as
April 14, 1985; Philsa Int’l. Placement v. Sec. of cultivation and tillage of the soil, dairying, growing
Labor, GR No. 103144, April 4, 2001). 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.
Delegated Legislative Power: The Labor Code itself
vests the DOLE with rule-making powers in the Note: The Labor Code applies with or without
enforcement whereof (PASEI v. Drilon, GR No. 81958, employment relationship between the disputants,
June 30, 1988). depending on the kind of issue involved. The
presence or absence of employer-employee
However, a rule or regulation promulgated by an relationship is itself a labor law question (Azucena,
administrative body in excess of its rule-making authority 2007).
is void. An administrative interpretation, which takes
away benefits granted in the law, is ultra vires (CBTC CHAPTER 2. EMANCIPATION OF TENANTS (P.D.
Employees union v. Clave GR No. L-49582, January 7, 27 AS AMENDED BY R.A. 6657,
1986). 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 Chapter 1: General Provisions
accordance
with P.D. 27 Article 13: Definitions

Emancipation Patent – the title issued to the Worker – any member of the labor force, whether
tenant upon compliance with all the requirements employed or unemployed
of the government. It represents the full
emancipation of the tenant from the bondage of Recruitment and Placement – any act of (CETCHUP)
the soil. canvassing, enlisting, transporting, contracting, hiring,
utilizing or procuring workers and includes (CRAP)
Purpose of Prohibition Against Alienation contract services, referrals, advertising or promising for
1. Preserve the landholding in the hands of the employment locally or abroad, whether for profit or not,
owner-tiller and his heirs provided, that any person or entity which in any manner,
2. Minimize land speculation offers or promises for a fee employment to two or more
3. Prevent a return to the regime of land persons shall be deemed engaged in recruitment and
ownership by a few placement.

Lands Not Covered Note: The number of persons dealt with is not an
1. Lands obtained through homestead patent essential ingredient of the act of recruitment and
2. Residential subdivisions placement of workers. The proviso merely creates a
3. Livestock, poultry and swine raising lands presumption (People v. Panis, GR. No. L-58674, July
11, 1986).
Elements of engaging in recruitment and placement
activities:
1. The complainant had a distinct
impression that the accused had the power to send
complainant abroad for work
2. The complainant was convinced to part with his
BOOK ONE: PRE-EMPLOYMENT money in order to be so employed (People v. Goce,
Article 12: Policy of the State GR No. 113161, August 29, 1995).

1.To promote and maintain a state of full Private Recruitment Entity – any person or entity
employment through improved manpower engaged in the recruitment and placement of
training, allocation and utilization workers for a fee which is charged, directly or
2.To protect every citizen by securing for him the indirectly, from the workers or employers or both.
best possible terms and condition of
employment License – a document issued by the DOLE
3.To facilitate a free choice of available authorizing a person or entity to operate a private
employment by person seeking work in employment agency.
conformity with the national interest
4.To facilitate and regulate the movement of Private Recruitment Entity – any person or
workers in conformity with the national interest association engaged in the recruitment and
5.To regulate the employment of aliens including placement of workers, locally or overseas, without
the establishment of a registration and/or permit charging, directly or indirectly, any fee from the
system workers or employers.
6.To strengthen the network of public
employment offices and rationalize the Authority- document issued b DOLE authorizing a
participation of the private sector in the person or association to engage in recruitment and
recruitment and placement of workers, locally placement activities as a private recruitment entity.
and overseas to serve national development
objectives Seaman – any person employed in a vessel
7.To insure careful selection of Filipino workers engaged in maritime navigation.
for overseas employment in order to protect the
good name of the Philippines abroad. Overseas Employment – employment of a worker
outside the Philippines.
TITLE ONE: RECRUITMENT AND PLACEMENT OF
WORKERS 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 2. Protection of their rights to fair an equitable
not a legal resident. employment practices
3. Deployment of Filipino workers through
Note: A person to be engaged in a remunerated government-to-government hiring.
activity refers to an applicant worker who has been
promised or assured of employment overseas and
acting on such promise or assurance sustains Regulatory Functions (Republic Act. No. 9422)
damage and/or injury. The POEA shall:
1. regulate private sector participation in the
Emigrant – any person, worker or otherwise, who recruitment and overseas placement of workers
emigrates to a foreign country by virtue of an through its licensing and registration system
immigrant visa or resident permit or its equivalent in 2. formulate and implement in coordination with
the country of destination. appropriate entities concerned, when
necessary, a system for promoting and
Article 14: Employment Promotion monitoring the overseas employment of Filipino
workers taking into consideration their welfare
Allocation of manpower resources is assigned to: and the domestic manpower requirements.
1.Bureau of Local Employment (BLE) 3. inform migrant workers not only of their rights
2.Philippine Overseas Employment Administration as workers but also of their rights as human
(POEA) for overseas employment. beings
4. instruct and guide the workers how to assert
 R.A. 8759 (approved on 2000) requires the their rights and provide the available
establishment of a Public Employment Service mechanism to redress violation of their rights
Office (PESO) in capital towns, cities and other 5. in the recruitment and placement of workers
strategic areas. to service the requirements for trained and
competent Filipino workers of foreign
Article 16: Private Recruitment governments and their instrumentalities, and
such other employers as public interests may
General Rule: No person or entity shall engage in require, deploy only to countries: (BOG)
the recruitment and placement of workers, locally a. where the Philippines has concluded
and overseas. Bilateral labor agreements of arrangements
b. Observing and/or complying with the
Exceptions: international laws and standards for migrant
1. Public employment offices workers
2. Private recruitment entities c. Guaranteeing to protect the rights of
3. Private employment agencies Filipino migrant workers.
4. Shipping or manning agents or representatives
5. POEA Adjudicatory Functions (AD)
6. Construction contractors if authorized by the 1. Administrative cases involving violations of
DOLE and the Construction Industry Authority licensing rules and regulations and registration of
7. Members of the diplomatic corps (but hiring must recruitment and employment agencies or entities
also go through POEA) 2. Disciplinary action cases and other special
8. Other persons or entities as may be authorized cases which are administrative in character
by the DOLE Secretary involving employers, principals, contracting
9. Name hirees. 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 R.A. 8042. Under Sec. 10, a worker dismissed
3. Gunrunning or possession of deadly weapons from overseas employment without just, valid or
4. Vandalism or destroying company property authorized cause is entitled to full
5. Violation of the laws and sacred practices of the reimbursement of his placement fee with
host country and unjustified breach of interest at 12% per annum, and
employment contract a. If the contract of employment is
6. Embezzlement of funds of the company or BELOW one year, the salaries for the
fellow worker entrusted for delivery to relatives in entire unexpired portions of the
the Philippines contract shall be paid; and
7. Creating trouble at the worksite or in the vessel b. If the contract of employment is ONE
8. Gambling YEAR OR MORE, the salaries for the
9. Initiating or joining a strike or work stoppage entire unexpired portion of the contract
where the laws of the host country prohibit strikes OR three (3) months pay for every year
or similar actions of the unexpired portion, WHICHEVER
10. Commission of Felony punishable by IS LESSER, shall be paid (Marsaman
Philippines Laws or by the host country Manning Agency, Inc. v. NLRC, GR No.
11. Theft or robbery 127195, August 25, 1999).
12. Drunkenness
13. Drug Addiction or possession or trafficking of Note: The clause “or for three months for every year of
prohibited drugs the unexpired term, whichever is less” in the 5 th par. Of
14. Desertion or abandonment Sec. 10 of RA No. 8042 is declared unconstitutional by
the SC for violating Sec. 1, Art. III of the Constitution,
Jurisdiction Transferred to the Labor Arbiters of Sec. 18, Art. II and Sec. 3, Art. XIII, which accord all
the National Labor Relations Commission (NLRC) members of the labor sector, without distinction as to
(Sec. 10, R.A. 8042) place of deployment, full protection of their rights and
 Claims arising out of an employer-employee welfare. (Serrano v. Galiant Maritime Services Inc. and
relationship or by virtue of any law or contract Marlow Navigation Co. Inc. GR No. 167614, March 24,
involving Filipino workers for overseas deployment 2009)
including claims for actual, moral, exemplary and
other forms of damages. Outside of POEA Jurisdiction
 Venue: Money claims or claims for damages 1. Foreign Judgment – POEA has no jurisdiction
should be filed before the Regional Arbitration to hear and decide a claim for enforcement of a
branch of the NLRC where the complainant resides foreign judgment. Such claim must be brought
of where the prinicipal office of the before regular courts (Pacific Asia Overseas
respondent/employer is situated at the option of the Shipping Corp. v. NLRC, GR No. 76595, may 6,
complainant (2005 NLRC Rules of Procedure). 1988).
2. Torts- fall under the provision of the Civil Code.
Compromise Agreement
Invalid Agreements
 Sec 10. R.A. 8042 allows resolution by compromise 1. Signing satisfaction receipt is not a waiver. Any
of cases filed with the NLRC. agreement to receive less compensation than
what the worker is entitled to recover is invalid
 Any compromise/amicable settlement, or voluntary
(MR Yard Crew Union v. PNR, GR No. L-33621,
agreement on money claims inclusive of damages
July 26, 1976).
shall be paid within 4 months from the approval of
2. An agreement that diminishes the employee’s
the settlement by the appropriate authority.
pay and benefits as contained in a POEA-
approved contract is void, unless such
Rule on Premature Termination of Contract
subsequent agreement is approved by POEA
(Chaves v. Bonto-Perez, GR No. 109808,
1. If terminated on grounds other than those that
march 1, 1995).
are lawful and valid before the agreed
termination date, the employer will pay the
Minimum Employment Conditions of Overseas
workers their salaries corresponding to the
Employment (GFF-JW-RAF)
unexpired portion of the employment contract
1. Guaranteed wages for regular working hours
(Vinta Maritime Co. v. NLRC, GR No. 113911,
and overtime pay.
January 23, 1998)
2. Free transportation from point of hire to site of
2. If the date of employment termination occurred
employment and return
on or after July 15, 1995, the law to apply is
3. Free emergency medical and dental treatment processing purposes (Part III, Rule III of POEA Rules
facilities Governing Overseas Employment as amended in
4. Just causes for termination of the services of 2002).
the workers
5. Workmen’s compensation benefits and war Rationale of the Prohibition
hazard protection 1. To assure the best possible terms and conditions
6. Repatriation of worker’s remains and properties of work to the employee
in case of death 2. To assure the foreign employer the he hires only
7. Assistance on remittance of worker’s salaries qualified Filipino workers.
and allowances
8. Free and adequate board and lodging facilities Article 19: CFO
or compensatory food allowance.
The Commission of Filipino Overseas (CFO) replaced
Agencies Given the Duty to promote the welfare the Office of Emigrant affairs. It assists in the
and rights of migrant workers formulation of policies affecting Filipinos overseas,
1. Department of Foreign Affairs (DFA) and formulates an integrated program that promotes
2. DOLE the welfare of Filipino overseas.
3. POEA
4. Overseas Workers Welfare Administration Article 22: Mandatory Remittance of Foreign
(OWWA) – provides social and welfare services Exchange Earnings
including insurance coverage, legal assistance,
placement assistance and remittance services to Requirement: All overseas Filipino workers are
Filipino overseas workers; Under RA. 8042, it required to remit a portion of their foreign exchange
shall provide the Filipino migrant worker and his earnings ranging from 50% to 80% depending on the
family assistance in the enforcement of worker’s kind of job, to their families, dependents
contractual obligations by agencies, entities and/or beneficiaries (Rule VIII, Book III, POEA Rules).
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.

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 b. For corporations – a minimum paid up
members, dependents, or beneficiaries are capital of two (2) million pesos; Provided
residing with him abroad that those with existing licenses shall,
2. Filipino servicement working in U.S. military within 4 years from effectivity hereof,
installations increase their capitalization of paid-up
3. Immigrants and Filipino professionals and capital, as the case may be, to two(2)
employees working with United Nations million pesos at the rate of two hundred fifty
agencies or specialized bodies (Resolution No. thousand pesos (P 250,000) every year.
1-83, Inter-agency Committee or 3. Those not otherwise disqualified by law or other
Implementation of E.O. 857) government regulations to engage in the
recruitment and placement of workers for
Effects of Failure to Remit overseas employment.
1. Workers who fail to comply with the mandatory
remittance requirement shall be suspended or Disqualified from Recruitment and Placement of
excluded from the list of eligible workers for Workers for Overseas employment whether for
overseas employment. Subsequent violations profit or not
shall warrant his repatriation 1. Travel agencies and sales agencies of airline
2. Employers who fail to comply shall be excluded companies (Art. 26, LC)
from the overseas employment program. 2. Officers or members of the board of any
Private employment agencies or entities shall corporation or members in a partnership
face cancellation or revocation of their licenses engaged in the business of a travel agency
or authority to recruit, without prejudice to other 3. Corporations and partnerships, when any of its
liabilities under existing laws and regulations officers, members of the board or partners, is
(Sec. 9, E.O. 857, December 13, 1982 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
Chapter 2: Regulation of Recruitment and limited to:
Placement Activities a. Those certified to have derogatory
record or information by the National
Article 25: Private Sector Participation in the Bureau of Investigation (NBI) or by the
Recruitment and Placement of Workers Anti-illegal recruitment Branch of the
POEA
Private Sectors that can participate b. Those against whom probable cause of
1. Private employment agencies prima facie finding of guilt for illegal
2. Private recruitment entities recruitment or other related cases
3. Shipping or manning agencies and/or crimes involving moral turpitude;
4. Such other persons as may be authorized by and
the Secretary of Labor and Employment c. Those agencies whose licenses have
5. Construction contractors with a duly issued been previously cancelled or revoked
authority to operate private recruitment entities by POEA for violation of R.A. 8042,
(Sec. 1, Rule VII, Book I, Implementing Rules of P.D. 442 as amended and their
LC) implementing rules and regulations as
well as the Labor Code’s Implementing
Qualifications for Participation Rules and Regulations.
1. Citizenship requirement (Art. 27, LC) 4. Officials or employees of the DOLE or other
a. Filipino citizens; or government agencies directly involved in
b. Corporations, partnerships or entities at overseas employment program and their
least 75% of the authorized and voting relatives within the 4th degree of consanguinity
capital stock of which is owned and of affinity
controlled by Filipino citizens. 5. Those whose license have been previously
2. Capitalization (Art. 28, I_C) cancelled or revoked (Sec. 2, Rule I, 2002
a. For single proprietorship or partnership- Rules and Regulations on the Recruitment and
minimum capitalization of two (2) million Employment of Land-based Workers).
pesos.
Article 29: Non-Transferability of License or  Fees paid shall always be covered with the
Authority appropriate receipt clearly showing the amount
paid.
1. It may be used only by the one in whose favor it
was issued, hence it cannot be assigned, POEA has the power to:
conveyed or transferred to any other person or 1. Suspend or cancel license; and
entity 2. Order the refund or reimbursement of such
2. It must be used only in the place stated in the illegally collected fees (Eastern Assurance and
license. Surety Corp. v. Sec. of Labor, GR Nos. 79436-
3. The recruitment and placement activities must 50, January 17, 1990).
be undertaken at their authorized official
addresses. Prohibition on Charging Fees
4. Provincial recruitment and/or job fairs may be 1.Placement fees cannot be collected from a
allowed only when authorized by POEA in hired worker until he has signed the
writing employment contract and shall be covered by
receipts clearly showing the amount paid
Note: Change of ownership or relationship of single (Sec. 2[a], Rule V, Book II, Rules and
proprietorship licensed to engage in overseas Regulations Governing Overseas
employment shall cause the automatic revocation Employment).
of the license. 2. Manning agencies shall not charge any fee
from seafarer-applicants for its recruitment
Article 31: Bonds and placement services.
3. No other fees or charges including
All applicants for license or authority shall pots such processing fess shall be imposed against any
cash and surety bonds as determined by the worker.
Secretary of Labor, including escrow deposits.

Purposes: Article 34 and Section 6, RA 8042: Prohibited


1. To guarantee compliance with prescribed Practices (IFFPI- HOFAT-W)
recruitment procedures, rules and regulations,
and terms and conditions of employment; and It shall be unlawful for any individual, entity Licensee, or
2. To ensure prompt and effective recourse holder of authority:
against such companies when held liable for 1. To charge greater amount than that specified in
applicants or workers claim (Finman General the schedule of allowable fees (lllegal
Assurance v. Innocencio, GR No. 90273-75, exaction)
November 15, 1989). 2. To furnish any false information in relation to
recruitment or employment (False information)
Exemption from Garnishment 3. To give any false notice, testimony etc or
 Cash bond filed by applicants for commit any act of misrepresentation to secure
license or authority is not subject to garnishment a license or authority (False statements)
by a judgments creditor of the agency. 4. To induce or attempt to induce a worker to quilt
 Should the bond/deposit in escrow his job in lieu of another offer unless it is
or any part thereof be garnished, the same designed to liberate the worker from oppressive
should be replenished by the agency within 15 terms of employment (Pirating)
days from notice from the POEA. Failure to 5. To influence or attempt to influence any person
replenish the same within the said period shall or entity not to employ any worker who has not
cause the suspension of the license (Sec. 22, applied for employment through his agency
Rule II, Book II, Rules and Regulations on the (Influencing not to employ)
Recruitment and Employment of Land-based 6. To engage in the recruitment or placement of
Workers). jobs harmful to public health, morality or to the
dignity of the Philippines (Harmful jobs)
Note: POEA has the power to enforce liability under 7. To obstruct or attempt to obstruct inspection by
cash or surety bonds. the Labor Secretary or his authorized
representatives (Obstruct inspection)
Article 32: Fees to be Paid by Workers 8. To fail to file reports on the status of
 The applicant can be charged with fees employment, placement etc and such other
only after he has obtained employment or has matters as may be required by the Secretary of
actually commenced employment.
Labor (Failure to comply with rules and JURISDICTION to suspend or cancel a license
regulations) (Trans Action Overseas Corp. v. Sec. of Labor, GR
9. To substitute or alter employment contracts No. 109583, September 5, 1997).
without the approval of the Secretary of Labor Liability of recruitment agency
(Alteration of Contracts)  The recruitment agency is SOLIDARILY
10. To become an officer or member of the Board LIABLE with the foreign principal for unpaid salaries
of any corporation engaged in the management of a worker it recruited. Before recruiting, the
of a travel agency (Travel agency officers agency is required to submit a document containing
recruiting). its power to sue and be sued jointly and solidarily
11. To withhold travel documents from with the principal or foreign-based employer for any
applicant workers before departure for of the violations of the recruitment agreement, and
unauthorized monetary consideration the contracts of employment (Sec. 10, Rule V, Book
(Withholding travel documents). I, Implementing Regulations of LC)

Article 35: Suspension and/or Cancellation of Note: The recruitment agency may still be sued even if
License or Authority agency agreement between recruitment agency and
principal is already severed if no notice of the
Non License or Non-holder of Authority- any termination was given to the employee based on Art.
person, corporation or entity which has not been 1921 of the New Civil Code (Catan v. NLRC, GR No.
issued a valid license or authority to engage in 77297, April 15m 1988).
recruitment and placement by the Secretary of
Labor, or whose license or authority has been Contract by Principal
suspended, revoked, or cancelled by the POEA and  Even if it was the principal of the manning
the Secretary. agency who entered into contract with the
employee, the manning agent in the Philippines
Grounds for Revocation of License (IVEE) is jointly and solidarily liable with the principal
1. Incurring an accumulated three counts of (Seagull Maritime Corp. v. Balatongan, GR
suspension by an agency based in final and Nos. 83635-53, February 28, 1989).
executory orders within the validity period of its Suability of Foreign Corporations
license  A foreign corporation that, through unlicensed
2. Violation/s of the conditions of license agents recruits workers in the country may be
3. Engaging in act/s of misrepresentation for sued in and found liable by Philippine courts
the purpose of securing a license or renewal (Facilities Management Corp. v. De La Osa, GR
thereof No. L-38649, March 26, 1979).
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 Chapter 3: Miscellaneous Provisions
Philippines (Sec. 3, Rule I, Book VI, Rules and
Regulations Governing Overseas Employment). Article 38: Illegal Recruitment (as amended by R.A.
8042)
Grounds for Suspension/ Cancellation of
License (AC-DDP) Illegal Recruitment – any act of (CETCHUP)
1. The acts prohibited under Art. 34 canvassing, enlisting, transporting, contracting, hiring,
2. Charging a fee before the worker is utilizing or procuring workers and includes (CRAP)
employed or in excess of the authorized contract services, referrals or advertising, promising for
amount employment abroad, whether for profit or non-holder of
3. Doing recruitment in places outside its authority; provided that any such non-licensee or non-
authorized area holder of authority who in any manner, offers or
4. Deploying workers without processing promises for a free employment abroad to two or more
through the POEA persons shall be deemed so engaged.
5. Publishing job announcement without the
POEA’s prior approval (Sec 4. Rule II, Book IV,  It shall likewise include the commission of the
POEA Rules). following prohibited acts whether committed by
a non-licensee or non-holder of authority or a
Jurisdiction license or holder of authority (Sec. 6, R.A.
The DOLE Secretary (Art. 35) and the POEA 8042):
Administrator (Sec. 1, Rule II, Book VI, New Rules 1. Those prohibited practices enumerated under
on Overseas Employment) have CONCURRENT Art. 34
2. Failure to actually deploy without valid reason 2. Where the offended party resides at the time of
as determined by DOLE the commission of the offense.
3. Failure to reimburse expenses incurred by the
worker in connection with his documentation Summary of Rules on Prescriptive period and
and processing for purposes of deployment penalty (Secs. 7 and 12, R.A. 8042)
does not actually take place without the
worker’s fault SIMPLE ECONOMIC
4. Recruitment and placement activities of agents SABOTAGE
or representatives appointed by a licensee, Prescriptive 5 years 20 years
whose appointments were not previously Period
authorized by the POEA shall likewise Imprisonment Prision mayor Life
constitute illegal recruitment. imprisonment
Fine P 200T- 500T P 500T-1M
Elements of Illegal Recruitment
1. The offender is a licensee/non-licensee or Note: MAXIMUM PENALTY shall be imposed if the
holder/non-holder of authority engaged in the person illegally recruited is less than 18 years of
recruitment and placement of workers, and age or committed by a non-licensee or non-holder
2. The offender undertakes either any recruitment of authority.
activities defined under Article 13 (b), or any
prohibited practices enumerated under Art. 34 Absence of Receipts Evidencing Payment, Not
(People v. Sadiosa, GR No. 107084, May 15, Fatal to Prosecution’s Case For Illegal
1998, Sec. 10, R.A. 8042) Recruitment
 As ling as the witnesses can positively show
Qualifying Circumstances that would make through their respective testimonies that the
illegal recruitment as an offense involving accused is the one involved in prohibited
economic sabotage: recruitment, she may be convicted of the
1. When illegal recruitment is committed by a offense despite the absence of receipts (People
SYNDICATE, i.e., if its carried out by three (3) v. Sagaydo, GR Nos. 124671-75, September
or more persons conspiring and/ or 29, 2000).
confederating with one another, or
2. When illegal recruitment is committed in a Liability of Employee of Company Engaged in
LARGE SCALE, i.e., if it is committed against illegal Recruitment
three (3) or more persons individually or as a  An employee of a company or corporation
group. engaged in illegal recruitment may be held as
PRINCIPAL, together with his employer, if it is
Consequences of Conviction (AFC) shown that he actively and consciously
1. Automatic revocation of the license or authority participated in illegal recruitment (People v.
(Art. 39 [e], LC); Cabais, GR No. 129070, march 16, 2001).
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. Issuance of Search Warrant or Warrant of Arrest
 Art. 38 is UNCONSTITUTIONAL in as much as
Act Constituting Estafa: The accused it gives the Secretary of Labor the power to
represented themselves to complainants to have issue search or arrest warrants (the Secretary
the capacity to send workers abroad, although they not being a judge, the authorities must go
did not have any authority or license, it is by this through the judicial process).
representation that they induced complainant to pay
 The EXCEPTION is in cases of deportation of
a placement fee. Such a constitute estafa under Art.
illegal and undesirable aliens whom the
315, par.2 of the Revised Penal Code (People v.
President or the Commissioner of Immigration
Hernandez, GR Nos. 141221-36, March 7, 2002).
may order arrested, following a final order of
deportation. (Salazar v. Achacoso, GR No.
Venue of Criminal Action Arising from Illegal
81510, March 14, 1990).
Recruitment
The complainant may, at his option, file at the RTC
of the province or city:
1. Where the offense was committed; OR
Note: The Secretary of Labor may order closure of  Immigrants and resident aliens are not
illegal recruitment establishments because it is only required to secure a working permit. They
administrative and regulatory in nature. are required to secure their Alien
Employment Registration Certificate
See RA 8042 under social legislation for further (AERC) (Almodiel v. NLRC, GR No.
discussion. 100641, June 14, 1993).
TITLE TWO: EMPLOYMENT OF NON-RESIDENT Exemption from Permit
ALIENS The following categories of aliens are exempt from
securing employment permit in order to work in the
Article 40: Employment Permit of Non-Resident Philippines:
Aliens 1. All members of the diplomatic service and
foreign government officials accredited by and
Alien Employment Permit (AEP) – is required for with reciprocity arrangement with the Philippine
entry into the country for employment purposes and government;
is issued after determination of the non-availability 2. Officers and staff of international organizations
of a person in the Philippines who is competent, of which the Philippines is a member, and their
able and willing at the time of application to perform legitimate spouses desiring to work in the
the services for which the alien is desired. Philippines;
3. Foreign nationals elected as members of the
Employment Permit Required other position, but have only voting rights in the
1. All foreign nationals seeking admission to the corporation
Philippines for the purpose of employment; 4. All foreign nationals granted exemption by law
2. All non-resident foreign nationals already 5. Owners and representatives of foreign
working in the Philippines; nationals whose companies are accredited for a
3. Non-resident foreign nationals admitted to the limited period and solely for the purpose of
Philippines on non-working visas and who wish interviewing Filipino applicants for employment
to seek employment; and abroad;
4. Missionaries or religious workers who intend to 6. Foreign nationals who come to the Philippines
engage in gainful employment. to teach, present and/ or conduct research
studies in universities and colleges as visiting ,
Note: Employment permit should be secured exchange or adjunct professors under formal
regardless of the source of compensation and agreements between the universities or
duration of the employment, whether the colleges in the Philippines and foreign
employment is part-time or temporary (Secs. 2 and universities or colleges; or between the
3, Revised Guidelines for Issuance of Alien Philippine government and foreign government;
Employment Permit). provided that the exemption is on a reciprocal
basis; and
An AEP is issued based on the following: 7. Resident foreign nationals (Dept. Order No.
1. Compliance by the applicant employer or the 75-06, May 31, 2006)
foreign national with substantive and
documentary requirements; Grounds for suspension of Employment Permit
2. Determination of the DOLE Secretary that there 1. The continued stay of the foreign national may
is no available Filipino national who is result in damage to the interest of the industry
competent, able and willing to do the job for the or the country, and
employer; and 2. The employment of the foreign national is
3. Assessment of the DOLE Secretary that the suspended by the employer or by the order of
employment of the foreign national will redound the Court (Ibid.).
to national benefit.
Grounds for Revocation of Employment Permit
Note: D.O. No. 12 and the accompanying DOLE 1. Non-compliance with any of the requirements
Primer sate that the Understudy Training or conditions for which the employment permit
Program is no longer a requirement in the was issued;
issuance of AEP and the employer has now the 2. Misrepresentation of facts in the application
option to implement transfer of technology. 3. Submission of falsified or tampered documents
4. Meritorious objection or information against the
Requisite for Employment of Resident Aliens: employment of foreign national as determined
by the Regional Director
5. Foreign national has a derogatory record; and Chapter 1: National Policies and Administrative
6. Employer has terminated the employment of Machinery for their Implementation
the foreign national (Ibid.).
Article 43-45: (TESDA)
Validity of Employment Permit
 ONE (1) YEAR, unless the employment The National Manpower and Youth Council (NMYC)
contract, consultancy services or other modes has been replaced by Technical Education and
of engagement provides otherwise, which shall Skills Development Authority (TESDA) created
in no case exceed 5 YEARS (Ibid.). under R.A. No. 7796 or the TESDA Act of 1994.

 FINE for working without or with an Statement of Goals and Objectives


expired AEP: P10,000 every year or a fraction 1. To attain international competitiveness
thereof (Ibid.) 2. To meet demands for quality middle-level
manpower
Rule on Nationalized Business 3. To disseminate scientific and technical
 General Rule: Foreigners may NOT be knowledge base
employed in certain nationalized business. 4. To recognize and encourage the
complementary roles of public and private
 Section 2-A of the Anti-Dummy Law institutions; and
prohibits the employment of aliens in 5. To inculcate desirable values.
entities engaged in business whose
exercise or enjoyment is reserved only to Middle-Level Manpower refers to those:
Filipinos or to corporations or associations 1. Who have acquired practical skills and
whose capital should be at least 60% knowledge through formal or non-formal
Filipino-owned. education and training equivalent to at least a
Exceptions: secondary education but preferably a post-
1. Where the Secretary of Justice specifically secondary education with a corresponding
authorizes the employment of technical degree or diploma; or
personnel; 2. Skilled workers who have become highly
2. Aliens who are members of the board of competent in their trade or craft as attested by
directors of corporations in proportion to their industry.
allowable participation in the capital of such
entities (DOJ Opinion No. 143, s. 1976); and TITLE TWO: TRAINING AND EMPLOYMENT OF
3. Enterprise registered under the Omnibus SPECIAL WORKERS
Investment Code in case of technical, supervisory
or advisory positions, but for a limited period. Chapter 1: Types of Special Workers
1. Apprentice
Article 41: Prohibition Against Transfer of 2. Learner
Employment 3. Handicapped
1. Aliens shall not transfer to another job or
change his employer without prior approcal of Article 57: Statement of Objectives for the
the Secretary of Labor. Training and Employment of Special Workers
2. Non-resident alien shall not take up
employment in violation of the provisions of the 1. To help meet the demand of the economy for
Code. trained manpower
2. To establish a national apprenticeship program
Note: Violations of the abovementioned acts will 3. To establish apprenticeship standards for the
subject the alien to the punishment provided in Arts. protection of apprentices.
289 and 290 and to deportation after service of
sentence. Article 58: Definition of Terms

BOOK TWO: HUMAN RESOURCES Apprenticeship – practical training on the job


DEVELOPMENT supplemented by related theoretical instruction, for a
highly skilled or technical occupation for a period of not
TITLE ONE: NATIONAL MANPPOWER less than three (3) months but not more than six (6)
DEVELOPMENT PROGRAM months.
Apprentice - a worker who is covered by a written 2. Apprentice earns not less than 75% of the
apprenticeship agreement with an individual employer prescribed minimum salary;
or any of the entities recognized under this chapter, with 3. Apprenticeship agreement duly executed and
an apprenticeship program duly approved by the DOLE signed;
4. Apprenticeship program must be approved by
Apprenticeable Occupation – any trade, form of the Secretary of Labor, otherwise the
employment or occupation, which requires more than 3 apprentice shall be deemed a regular employee
months of practical training on the job supplemented by (Nitto Enterprise v. NLRC, GR No. 114337,
related theoretical instruction. September 29, 1995); and
5. Period of apprenticeship shall not exceed six
Apprenticeship Agreement – an employment contract (6) months (Sec. 19, Rule VI, Book II, Rules
wherein the employer binds himself to train the Implementing the Labor Code).
apprentice and the apprentice in turn accepts the terms
of training. Note: At the termination of the apprenticeship, the
On-the-job-training – practical work experience employer is not required to continue the
through actual participation in productive activities given employment.
to or acquired by an apprentice.
Article 61: Contents of Apprenticeship
Highly Technical Industries – a trade, business, Agreement
enterprise, industry or other activity, which is engaged
in the application of advanced technology. Agreement shall include:
1. Full name and address of the contracting
Article 59: Qualifications of Apprentices parties;
1. At least 15 years of age (as amended by R.A. 2. Date of birth of the apprentice;
7610), provided that if below 18 years, he shall 3. Name of trade, occupation or job in which the
not be eligible for hazardous occupation; apprentice shall be trained and the dates on
2. Physically fit for the occupation in which he which such training will begin and will
desired to be trained. proximately end;
3. Possess vocational aptitude and capacity for 4. Approximate number of hours of on-the-job-
the particular occupation as established training with compulsory theoretical instructions
through appropriate tests; and which the apprentice shall undergo during his
4. Possess the ability to comprehend and follow training;
oral and written instructions. 5. Schedule of the work processes of the
trade/occupation in which the apprentice shall
Note: Trade and industry associations may be trained and the approximate time to be
recommend to the Secretary of Labor appropriate spent on the job in each process;
educational qualifications for apprentices in certain 6. Graduated scale of wages to be paid to the
occupations, which, if approved, shall be the apprentice;
educational requirements for apprenticeship in such 7. Probationary period of the apprentice during
occupations, unless waived by an employer in favor which either party may summarily terminate
of an applicant who has demonstrated exceptional their agreement; and
ability. A certification explaining briefly the ground 8. A clause that if the employer is unable to fulfill
for such waiver, and signed by the person in charge his training obligation, he may transfer the
of the program, shall be attached to the agreement, with the consent of the apprentice,
apprenticeship agreement of the applicant to any other employer who is willing to assume
concerned. (Sec. 11, Rule VI, Book II, Rules such obligation (Sec. 18,. Rule VI, Book II,
Implementing the Labor Code). Rules Implementing the Labor Code).

Article 60: Employment of Apprentices Article 62: Signing of Apprenticeship


Agreement
Qualifications to be met by employer:
1. Only employers in highly technical industries Who Signs:
may employ apprentices; and 1. Apprentice, if of age, otherwise, by his parent or
2. Only in apprenticeable occupations as guardian, or in the latter’s absence, by an
determined by the Secretary of Labor. authorized representative of the DOLE; and
2. Employer of his duly authorized representative.
Requisites for a Valid Apprenticeship
1. Qualifications of apprentice are met
Article 63: Venue of Apprenticeship Program out of apprenticeship agreements (Sec. 32b, Rule
VI, Book II, Rules Implementing the Labor Code).
1. Within the sponsoring firm, establishment or
entity; OR Article 68: Aptitude Tests
2. Within a DOLE training center or other public
training institution; OR  An employer who has a recognized
3. Initial training in trade fundamentals in a training apprenticeship program shall provide aptitude tests
center or other institutions with subsequent actual to apprentice-applicants.
work participation within the sponsoring firm or
entity during the final stage of training. Note: However, if the employer does not have
adequate facilities, the DOLE may provide the
Article 64: Sponsoring of Apprenticeship service free of charge (Sec. 12, Rule VI, Book II,
Programs Rules Implementing the Labor Code).

Apprenticeship Programs can be undertaken or Article 69: Responsibility for Theoretical Instruction
sponsored by:
1. The plant shop or premises of the employer or  Related theoretical instructions to apprentices
firm concerned if the apprenticeship program is may be undertaken by the employer himself if he
organized by an individual employer or firm; has adequate facilities and qualified instructors for
2. The premises of one or several firms designated the purpose. He shall indicate his intention to
for the purpose by the organizer of the program if assume such responsibility in the apprenticeship
such organizer is an association of employers, standard of his program. (Sec. 27, Rule VI, Book II,
civic group and the like; and Rules Implementing the Labor Code)
3. DOLE Training Center or other public training
institutions with which the TESDA has made
appropriate arrangements. (Sec. 4, Rule VI, Book Article 70: Voluntary Organization of
II, Rules Implementing the Labor Code). Apprenticeship Programs

Article 65-67: Violation of Apprenticeship


Agreement General Rule: The organization of apprenticeship
program shall be primarily a voluntary undertaking of
Investigation of Violation of Apprenticeship employers.
Agreement (Art. 65)
1. Either party to an agreement may terminate the Exception: Instances when organization of program is
same after the probationary period only for a valid compulsory:
cause. 1. When national security or particular
2. Action may be initiated upon complaint of any requirements of economic development so
interested person or upon DOLE’s own initiative. demand; and
2. Where services of foreign technicians are
Appeal (Art. 66) utilized by private companies in apprenticeable
 The decision of an authorized agency of trades.
the Department of Labor may be appealed to the
Secretary of Labor within 5 days from receipt of the Article 71: Deductibility of Training Costs
adverse decision.
 An additional deduction from taxable income of
 The decision of the Secretary of Labor ½ of the value of labor training expenses
shall be final and executory. incurred for developing the productivity and
efficiency of apprentices are granted to the
person or enterprise organizing an
apprenticeship program.

Requisites (DNP)
Exhaustion of Administrative Remedies (Art. 67) 1. Apprenticeship program must be duly
1. The exhaustion of administrative remedies is a recognized by the Department of Labor;
condition precedent to the institution of action. 2. Deduction shall not exceed 10% of direct labor
2. The plant apprenticeship committee shall have wage; and
initial responsibility for settling differences arising 3. Employer must pay his apprentices the
minimum wage.
3. The employment will neither create unfair
Article 72: Apprentices Without Compensation competition in terms of labor costs nor impair
working standards.
Apprentices may be hired without compensation
where on-the-job training is: Article 75: Learnership Agreement
1. Required by school
2. Required by the training program curriculum It shall include:
3. A requisite for graduation; or 1. The names and addresses of the employer and
4. A requisite for board examination (Sec. 40, the learner
Rule VI, Book II, Rules Implementing the Labor 2. The occupation to be learned and the duration
Code) of the training period which shall not exceed
three (3) months
Rules on Working Scholar 3. The wage of learner which shall be at least
1. There is NO employer-employee relationship 75% of the applicable minimum wage; and
between students on one hand, and schools, 4. A commitment to employ the learner, if he so
colleges or universities on the other hand, desires, as a regular employee upon
where there is agreement between them under completion of training.
which the former agree to work for the latter in
exchange for the privilege to study free of Note: A learner who has worked during the first two
charge, provided the students are given real months shall be deemed a regular employee if
opportunities, including such facilities as may training is terminated by the employer before the
be reasonable and necessary to finish their end of the stipulated period through no fault of the
chosen courses under such agreement (Sec learner (Sec. 4, Rule VII, Book II, Rules
14, Rule X, Book III, Implementing Rules). Implementing the Labor Code).
2. Under this Article, the student is not considered
an employee. But if he causes injury or damage Article 76: Learners in Piecework
to a third person the school may be held liable
under Art. 2180 of the Civil Code (Filamer  Learners in piecework or incentive-rate jobs are
Christian Institute v. IAC, GR No. 75112, August to be paid in full for the work done during the
17, 1992) 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 6. Right to weekly rest periods
meet the required skills of qualifications either as 7. Right to additional compensation on scheduled
regular employee, apprentice or learner, shall be rest day, Sunday or special holiday work
entitled to an additional deduction from their 8. Right to compensation for holiday work
gross income, equivalent to 25% of the total 9. Right to service incentive leave
amount paid as salaries and wages to disable 10. Right to a share in the collected service charges
persons; Provided, that the following are
complied with: Employer – one who employs the services of others
a. Presentation of proof certified by DOLE or who acts for and in behalf of an employer; one for
that disabled persons are under their employ; whom employees work and who pays their wages or
and salaries.
b. Disabled employee is accredited with
DOLE and DOH as to his disability skills and Employee – one who works for an employer for a
qualifications. fee; a person working for salary or wages.

2. Private entities that improve or modify their Note: not limited to the employees of a particular
physical facilities to provide reasonable employer, it shall include any individual whose work
accommodation for disabled persons shall also has ceased as a result of or in connection with any
be entitled to an additional deduction from their current labor dispute or because of unfair labor
taxable income equivalent to 50% of the direct practice if he has not obtained any other:
costs of the improvements or modifications. This 1. Substantially equivalent; and
does not apply to improvements required under 2. Regular employment
B.P. Blg. 344.
TITLE ONE: WORKING CONDITIONS AND REST
PERIODS

Chapter 1: Hours of Work

Article 80: Employment Agreement Article 82: Coverage

Contents General Rule: Title I, Book III of the Labor Code


1. The names and addresses of the employer and dealing with hours of work, weekly rest periods,
the handicapped worker; holidays, service incentive leaves and service
2. The rate of pay of the handicapped worker which charges, covers all employees in ALL establishments,
shall not be less than 75% of the legal minimum whether for profit or not.
wage;
3. The nature of work to be performed by the Exceptions: (GoMaFiFaDoR)
handicapped worker; and 1. Government employees
4. The duration of the employment (Sec. 3, Rule 2. Managerial employees including members of the
VIII, Book II, Rules Implementing the Labor Code) managerial staff
3. Field personnel
Article 81: Eligibility for Apprenticeship 4. Members of the Family of the employer who are
dependent on him for support.
 Handicapped workers are eligible for employment 5. Domestic helpers or persons in the personal
as apprentices or learners if their handicap is service of another; and
such that it does not impede the performance of 6. Workers paid by Result.
job operations in the particular trade or
occupation which is the subject of the Government Employees
apprenticeship or learnership program. a) Refer only to employees of government
agencies, instrumentalities, or political
BOOK THREE: CONDITIONS OF EMPLOYMENT subdivisions and of government corporations
that are NOT incorporated under the
Benefits Granted in the Title One Book III Corporation Code, i.e., those which have
1. Right to regular working hours original characters.
2. Right to regular working days b) Not covered under this Title because the
3. Right to overtime work terms and conditions of their employment are
4. Right to regular meal periods governed by Civil Service Law rules and
5. Right to night-shift differential pay 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 b. Generally, labor standards and conditions apply
throughout the duration of their work they only if there is Er-Ee relationship. But in some
are under the effective control and instances, even if there is no Er-Ee relationship, the
supervision of employer. HOWEVER, under LC may still be invoked (e.g. indirect employer’s
the Philippine Fisheries Code of 1998, liability, illegal recruitment and misuse of POEA
fishermen are considered field personnel. license).

Rule in case of Drivers/ Bus Conductors: It c. Employer-employee relationship is determined by


is of judicial notice that along the routes law, and not by contract between the parties
that are plied by bus companies, there are (Paguio v. NLRC, GR No. 147816, May 9, 2003).
inspectors assigned in strategic places,
mandatory once a week car barn or shop Elements of Employer-Employee Relationship of
day, drivers/conductors must be at specific Four-Fold Test (SePaDisCo)
place at specified time, as they generally (Pacific Consultants International Asia, Inc. v.
observe prompt departure and arrival from Schonfeld, GR No. 166920, February 19, 2007)
their point of origin to their point of 1. Selection and engagement of the employee
destination. They are, therefore, under 2. Payment of wages
constant supervision while in the 3. Power of Dismissal
performance of this work and hence cannot 4. Power to Control.
be considered a field personnel. (Autobus
Transport Systems, Inc. v Bautista, GR No. Control Test – refers to the employer’s power to
156367, May 16, 2005) control or right to control the employee not only as to
the result of the work to be done by also as to the
Members of the Family of the Employer means and methods by which the same is to be
 Not covered by this Title because the accomplished.
amounts given by the employer by way of
support may far exceed the benefits to which  The control test is the most important test our
the employee is entitled under the provisions courts apply in distinguished an employee
of law. from an independent contractor. This test is
based on the extent of control the hirer
Domestic Helpers/ Persons rendering personal exercises over a worker. The greater the
services supervision and control the hirer exercises,
a. Those who: the more likely the worker is deemed an
i. Perform services in the employer’s home which employee. The converse holds true as well,
are usually necessary and desirable for the the less control the hirer exercises, the more
maintenance or enjoyment thereof; or likely the worker is considered an
ii. Minister to the personal comfort, convenience or independent contractor (Sonza v. ABS CBN
safety of the employer, as well as the members of Broadcasting Corp. GR No. 128051, June 10,
the employer’s household. 9Sec. 2[d], Rule I, 2004).
Book III, Rules Implementing the Labor Code)  The control test merely calls for the existence
iii. Not covered by this Title because the terms and if the right to control the manner of doing the
conditions of employment are governed by the work, not the actual exercise of the right
provisions of Chapter III, Title III of the present (Zanotic shoes v. NLRC, GR No. 1006655,
Book. February 13, 1995)

Note: The issuance by the principal of guidelines does


Workers Paid by Result not establish control by principal (Coca Cola Bottlers
a. Such as on piece rates or task basis who are not Phil., Inc. v Climaco, GR No. 146881, February 5,
covered under this Title because their compensation is 2007).
based on the work completed and not on the time spent
in working.
 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
Importance of Determining Existence of Employer- mutually desired results without dictating the
Employee Relationship 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  Softdrinks company vs. independent
such means. The first, which aim only to contractors selling softdrinks (Mafinco Trading
promote the result, create no employer- Corp. v. Ople, GR No. L-37790, March 25,
employee relationship unlike the second, which 1976).
address both the result and the means used to
achieve it and hence, employer-employee Article 83: Normal Hours of Work
relationship exists (Insurance Life Assurance
Co., Ltd. V. NLRC, GR No. 84484, November  The normal hours of work of an employee shall
15, 1989). NOT exceed 8 hours a day.

Rationale
Cases Where Employer-Employee Relationship 1. To safeguard the health and welfare of the
Exists laborer; and
 Jeepney drivers on boundary basis (Villamaria 2. To minimize unemployment by utilizing different
v. CA, GR No. 165881, April 19, 2006) shifts.
 Drivers or helpers of salesmen are employees
of the company (Alhambra Industries v. CIR, Part-Time Work
GR No. L-15984, October 30, 1970)  8-hour labor law prescribes the maximum but
 Employees of unregistered association not the minimum. Therefore, part-time work, or
(Orlando Farm Growers v. NLRC, GR No. a day’s work of less than 8 hours is not
129076, November 25, 1998) prohibited.
 Street-hired cargadors (Caurdaneraan Piece
Workers Union v. Laguesma, GR No.113542, Compressed Work Week (CWW)
February 24, 1998)  CWW is resorted to by the employer to prevent
 Workers in movie projects (Maraguinot v. serious losses due to causes beyond his
NLRC, GR No. 120969, January 22, 1998) control, such as when there is substantial
 Salaried insurance agent as distinguished from slump in demand for his goods or services or
registered agents on commission basis (Great when there is lack of raw materials. To be an
Pacific Life Assurance Corp. v. Judico, GR No. exception to the “eight-hour a day” requirement,
73887, December 21, 1989) the workers must agree to the temporary
 Tailors, seamstress, servers, basters, change of work schedule and they do not suffer
plantsadoras paid on piece-rate basis (Makati any loss of overtime pay, fringe benefits of their
Haberdashery v. NLRC, GR Nos. 83380-83, weekly or monthly take home pay (DOLE
November 15, 1989) Explanatory Bulletin, July 23, 1985).
 In-house lawyer as distinguished from an  This scheme is an altenative arrangement
outside retainer (Hydro Resources Contractors whereby the normal workweek is reduced to
Corp. v. Pagalilauan, GR No. L-62909, April 18, less than 6 days but the total number of normal
1989) hours per week remains at 48 hours. The
 University proferssors and instructors (FEU v. normal workday is increase to more than 8
CIR, GR No. L-17620, August 31, 1962) hours without corresponding overtime premium.
 Taxi driver, barber (Citizens League of Free This applies as well to 40 or 44-hour workweek
Workers v. Abbas, GR No. L-21212, September firms.
23, 1966)
Conditions of a Valid CWW Scheme (DOLE
Cases Where There is No Employer-Employee Advisory No. 02, Series of 2004)
Relationship 1. It is expressly and voluntarily supported by
 Farm workers are not employees of the sugar majority of the employees affected.
central (victories Milling Co., Inc. v. NLRC, GR 2. If work is hazardous, a certification is needed
No. 116347, October 3, 1996) from an accredited safety organization or the
firm’s safety committee that work beyond 8
 Working scholars are not employees of the
hours is within the limits or levels of exposure
schools (Filamer Christian Institute v. IAC, GR
set by DOLE’s occupational safety and health
No. 75112, August 17, 1992)
standards.
 Company vs. collecting agents on commission
3. The DOLE is duly notified.
basis (Singer Sewing Machine Company v.
Drilon, GR No. 91116, January 24, 1991)
Normal Hours of Work of Health Personnel
 Shoe shine boys (Besa v. Trajano, GR No.
72409, December 29, 1986)
 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 a. Where the work is non-manual work in
 Compensable hours worked for. It is a nature or does not involve strenuous physical
form of interruption beyond their control. exertion.
b. Where the establishment regularly
 Only for regular full-time teachers (Univ. operates not less than 16 hours a day;
of Pangasinan Faculty Union v. Univ. of c. In cases of actual or impending
Pangasinan, GR No. L-63122, February 20, 1984). emergencies or there is urgent work to be
performed on machineries, equipment or
G. Lectures, Meetings, Trainings, Programs installations to avoid serious loss which the
Not counted as working time if all the following employer would otherwise suffer;
conditions are met: d. Where the work is necessary to prevent
1. Attendance is outside of the employee’s regular serious loss of perishable goods (Sec. 7, Rule I,
working hours; Book III of the Rules Implementing the Labor
2. Attendance is in fact voluntary; and Code).
3. Employee does not perform any productive 3. if less than twenty (20) minutes, it becomes
work during such attendance. (Sec. 6, Rule I, only a rest period and is thus considered as
Book III, Rules Implementing the Labor Code) work time.

H. Attendance in Labor Relations Activities Note: Meal periods during overtime work is not
1. CBA Negotiations – generally, not given to workers performing overtime for the reason
compensable, EXCEPT if: that OT work is usually for a short period ranging
a. There is an agreement for from one to three hours and to deduct from the
compensability in the parties Ground Rules; same one full hour as meal period would reduce to
b. There is an established practice or nothing the employee’s OT work.
policy allowing compensability; and
c. When it is done during regular work Shortened Meal Break Upon Employees’
hours. Request
Employees may request that their meal period be
2. Grievance Meeting – generally compensable, shortened so that they can leave work earlier than
except when there is a CBA, policy or practice to the previously established schedule. Such
the contrary. shortened mealtime is not compensable.
3. Hearing, Arbitration, Conciliation – not
compensable. Requisites
4. Strikes – not compensable, except if there is an 1. Employees voluntarily agree in writing and
agreement to allow, “Strike duration pay”. Non- waive the overtime pay;
compensability is more compelling in case of 2. No diminution in the salary and other fringe
illegal strike. benefits of the employees already existing;
3. Work is not physically strenuous and they are
I. Work Hours of Seamen provided with adequate coffee breaks in the
Presence on board for more than 8 hours a day is morning and afternoon;
required by the nature of their service. 4. Value of benefits is equal to the compensation
due them;
Article 85: Meal Periods 5. Overtime pay will become due and demandable
if ever they are permitted or made to work
Rules on Meal Periods beyond 4:30 pm; and
1. Should not be less than sixty (60) minutes. It is 6. The arrangement is of temporary duration.
non-compensable except: Where during the so-
called meal period, the laborers are required to Note: The eight-hour period does not include the
standby for emergency work, or said hour is not meal break. Nowhere in the law may it be inferred
one of complete rest, such period is considered that employees must take their meals within the
overtime (hours worked). (Pan American World company premises. Employees are not prohibited
Airways System v. Pan American Employees from going out of the premises as long as they
Association, GR No. L-16275 February 24, return to their posts on tome (Philippine Airlines,
1961) inc. v. NLRC, GR No. 132805, February 2, 1999).
2. May be less than sixty (60) minutes, but should
not be less than twenty (20) minutes and the Article 86: Night Shift Differential
shortened mealtime must be with full pay under
the following instances: 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 2. Mathematical result shows that agreed legal
wage rate and the overtime pay, computed
 Regular Basic Wage: Includes cash wage only, separately, are equal to or higher than the
without any deduction on account of facilities separate amounts legally due.
provided by the employer (Art 90. LC)
Waiver of Overtime Pay
 Rates General Rule: Overtime pay cannot be waived
expressly or impliedly. Any contrary stipulation is
A. Overtime Work on Regular Work Day null and void, as it is intended to benefit laborers
The employee is paid for the overtime work on and employees.
additional compensation equivalent to his regular
wage plus at least 25% thereof. Exceptions:
1. When the waiver is made in consideration of
B. Overtime Work on Holiday or Rest Day benefits and privileges which may be more than
Overtime work performed on a holiday or rest day what will accrue to them in overtime pay; and
shall be paid an additional compensation 2. Compressed workweek.
equivalent to the rate of the first 8 hours on a
holiday or rest day plus at least 30% thereof. Note: Employees whose positions are reclassified
from rank-and-file to supervisory lose overtime pay
Conditions to be entitled to overtime pay and other benefits under Arts. 83-96. Promotion
1. Entitlement to overtime pay must first be produces the same effect. But the promotion and
established by sufficient proof position reclassification must be done in good faith.
2. Said overtime work was actually performed The personnel movement should not be intended to
(Cagampan v. NLRC, GR Nos. 85122-24, circumvent the law to deprive employees of the
March 28, 1991) benefits they used to receive. (Productivity
Incentives Act of 1990, R.A. 6971).
Factual and Legal Basis for Claim
General Rule: An express instruction from the Quitclaim in Relation to Overtime Pay
employer is not required. It is sufficient that the A quitclaim whereby laborers agree to forego their
employee is permitted or suffered to work. benefits due from their employer is NULL AND
VOID in its entirety since it runs counter with article
Exception: On rest days and holidays, written 22 of the Civil Code which provides against unjust
authority after office hours is required for enrichment and is contrary to public policy.
entitlement to compensation. (Pampanga Sugar Development Co. Inc. v. CIR,
GR No. L-39387, June 29, 1982)
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).

Sample Illustrations
A. Regular Workdays
[Regular basic wage + 25% of regular basic wage]

Daily Wage 800


Work Schedule: 8:00 am – 5:00 pm
Overtime Pay Integrate in the Basic Salary (inclusive of 1 hour
(“Built In” Overtime Pay) meal break)
The stipulation between employer and employee OT: 5:00 pm – 10:00 pm
that the latter’s regular or basic salary already
includes the overtime pay is not per se illegal. This Step 1: Get hourly wage rate.
is also called composite or package pay or all- Daily basic wage divided by number of hours
inclusive salary. worked.
e.g. P800/ 8 hours = P100
Requisites
1. Clear written agreement knowingly and freely Step 2: Compute wage between 8:00 am – 5:00 pm
entered into by employee; and 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 General Rule: The employer may not require the
Chief Executive; employees to work on a rest day.
2. To prevent loss or damage to life or property
due to emergencies and force majeure; Exceptions: (UPANAC)
3. When there is urgent work needed on 1. In cases of Urgent work to be performed on the
machines and equipment; machinery, equipment, or installation;
4. When work is necessary to preserve perishable 2. To Prevent loss or damage to perishable goods;
goods; 3. In case of Actual or impending emergencies
5. To prevent serious obstruction or prejudice to caused by force majeure to prevent loss of life and
the business or operations of the employer; and property, or imminent danger to public safety;
6. When it is necessary to avail of favorable 4. Where the Nature of the work requires continuous
weather or environmental conditions where operations and the stoppage of work may result in
performance or quality of work is dependent irreparable injury or loss to the employer;
thereon (Sec 10, Rule I, Book III, Rules 5. In the event of Abnormal pressure of work due to
Implementing the Labor Code). special circumstances, where the employer cannot
ordinarily be expected to resort to other measure; and
6. Under other Circumstances analogous to the
Article 90: Computation of Additional foregoing as determined by the Secretary of Labor.
Compensation
Note: The failure to work during an employee’s rest
Regular Wage shall include cash wage only, without day does not justify the disciplinary sanction of
deduction on account of facilities provided by the outright dismissal from employment as such is so
employer, for purpose of computing OT and other severe a consequence, more so when justifiable
additional remunerations in Chapter I. grounds exist for the said failure. (Remerco Garments
Manufacturing v. Minister of Labor & Employment, GR
Chapter 2: Weekly Rest Period No. L-56176-77. February 27, 1985)

Article 91: Right to a Weekly Rest Day  When an employee volunteers to work on hir rest day
under other circumstances, he may be allowed to do
Duration: NOT less than twenty-four (24) so, provided he expresses such desire in writing and
consecutive hours after every six (6) consecutive he is paid the additional compensation for working on
normal workdays. his rest day.

Note: All establishments and enterprises may operate Article 93: Compensation for Rest Day, Sunday,
or open for business on Sundays and holidays or Holiday Work
provided that the employees are given the weekly rest
day and the benefits provided under the law (Sec. 2, Premium Pay or Differential Compensation –
Rule III, Book III, IRR of LC). additional compensation for work rendered by the
employee on days when normally he should not be
Who Determines: working such as special holidays and weekly rest days.
The employer determines and schedules the weekly
rest period subject to the following: Note: This article does not prohibit a stipulation on the
1. Collective bargaining agreement; CBA for higher benefits.
2. Rules and regulations issued by the Secretary
of Labor; and Formula to Compute Wages on Holidays
3. Employee’s preference based on religious (Memorandum Circular No. 1, Series of 2004)
grounds.
1. For REGULAR HOLIDAYS, the following rules
Note: When such preference will prejudice the shall apply:
business operations of the employer and no other a. If it is an employee’s regular workday
remedial measure are available, the weekly rest i. if unworked – 100%
period may be scheduled to meet the employee’s ii. if worked –
choice for at least two days a month (Sec. 4, Rule III,  1st 8 hours – 200%
Book III, IRR of LC)  Excess of 8 hours – plus
30% of hourly rate on said day
Article 92: When Employer May Require Work on b. if it is an employee’s rest day
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 Chapter 3: Holidays, Service Incentive Leaves and
pay is required since work performed on Service Charges
said days is considered work on ordinary
working days. Article 94: Right to Holiday Pay
List of Special Days Holiday Pay –a day’s pay given by law to an
employee even if he does not work on a regular
A. National holiday. It is limited to the eleven (11) regular, also
1. All Saint’s Day – November 1 called legal, holidays listed by law. The employee
2. Last Day of the Year – December 31 should not have been absent without pay on the
3. Ninoy Aquino Day – Monday nearest August working day, preceding the regular holiday.
21 (R.A. 9492, July 25, 2007)
4. Other days declared by law Note: In addition to the exceptions provided in Art. 82,
Holiday pay does not apply to employees of retail and
B. Local service establishments regularly employing not more
Those declared by law or ordinance (e.g. Makati Day than 10 workers (Sec. 1, Rule IV, Book III, IRR of LC).
for Makati City only)

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 The cash equivalent is aimed primarily at
Absent Worked Regular YES – encouraging workers to work continuously and
without Holiday But only to with dedication to the company.
pay the holiday
pay on Note: Basis of conversion shall be the salary rate at
Friday the date of commutation. The availment and
commutation of the service incentive leave benefit
Effects of Business Closure on Holiday Pay may be on a pro-rata basis )No. VI [C]. DOLE
1. In case of temporary or periodic shutdown and Handbook on Workers’ statutory Monetary benefit).
temporary cessation of work of an
establishment, the regular holidays falling within  An employee, who is illegally dismissed, is
the period shall be compensated. entitled to service incentive leave benefits
2. The regular holiday during the cessation of computed one year from the date she started
operation of an enterprise due to business working until the date of her actual reinstatement.
reverses as authorized by the Secretary of (Imbuido v. NLRC, GR No. 114734 March 31,
Labor may not be paid by the employer (Sec. 7, 2000)
Rule IV, Book III, IRR of LC).
 Article 291 of the Labor Code is not a prescription
Article 95: Right to Service Incentive Leave of a period of time for the computation of money
claims but is a prescription of filing an option
Concept of SIL upon monetary claims from the time the cause of
Five (50 days leave with pay for every employee who action accrued. The employee may use his
has rendered at least one (1) year of service. service incentive leave benefits as leave days of
he may collect its monetary value. To limit the
One (1) Year of Service – service within 12 months, award to three years is to unduly restrict such
whether continuous or broken, reckoned from the date right. (Fernandez v. NLRC, GR No. 105892,
the employees started working including authorized January 28, 1998)
absences and paid regular holidays unless the number
of working days in the establishment, as a matter of  PART-TIME WORKERS are entitled to the full
practice or policy or as provided in the employment benefit of the yearly 5-day SIL. The reason is that
contract, is less than 12 months. the provisions of Art. 95 speak of the number of
SIL Does NOT apply to the following: months in a year for entitlement to said benefits
(Bureau of Working Conditions Advisory Opinion
1. Already enjoying the said benefits; to Phil. Integrated Exporters, Inc.)
2. Already enjoying vacation leave with pay for at
least 5 days; and  As to PIECE-RATE WORKERS, they are divided
3. Employed in establishments regularly into two:
employing less than 10 employees; (Sec. 1, 1. Piece-rate workers working inside the
Rule V, Book III, Rules Implementing the Labor premises of the employer and thus are
Code) under the direct supervision of the
employer are entitled to SIL;
Note: Employees engaged on task or contract basis 2. Piece-rate workers working outside the
or paid on purely commission basis are not premises of the employer whose hours
automatically exempted from the grant of service spent in the performance of their work
incentive leave unless they fall under the cannot be ascertained with reasonable
classification of field personnel. The phrase “other certainty and thus are not under the
employees whose performance is unsupervised by direct supervision of the employer are not
the employer”, in Section 1(D), Rule V, Book III of entitled to SIL (Labor Congress of the
the Implementing Rules and Regulations of the Philippines v. NLRC).
Labor Code, serves as an amplification of the
definition of field personnel under the Labor Code. Employees with Salaries Above Minimum Wage
(Auto Bus Transport Systems, Inc. v. Bautista, GR The difference between the minimum wage and the actual
No. 156367, May 16, 2005) salary received by the employees cannot be deemed as
their 13th month pay and service incentive leave pay as
Conversion to Monetary Equivalent such difference is not equivalent to or of the same import
as the said benefits contemplated by law. (JPL Marketing
 SIL is COMMUTABLE, i.e., convertible to cash Promotions v. Court of Appeals, GR No. 151966, July 8,
if not used or exhausted at the end of the year. 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  In case the service charge is abolished, he
he/she is no longer left alone with the responsibility share of the covered employees shall be
of parenthood, shall terminate his/her eligibility for considered integrated in their wages.
these benefits (Solo Parents Welfare Act of 2000)  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 Facilities – shall include all articles or services for
designated, capable of being expressed in terms of the benefit of the employee or his family but shall
money, whether fixed or ascertained on a time, task, not include tools of the trade or articles or services
piece or commission basis or other method or primarily for the benefit of the employer or
calculating the same, which is payable by an necessary to the conduct of the employer’s
employer to an employee under a written or unwritten business.
contract of employment for work done or to be done
or for services rendered or to be rendered and Requirements for Deducting Amount of
includes the fair and reasonable value, as determined Facilities
by the Secretary of Labor, of board, lodging, or other 1. Proof must be shown that such facilities are
facilities customarily furnished by the employer to the customarily furnished by the trade;
employee. 2. The provision of deductible facilities must be
voluntarily accepted in writing by the employee;
Fair and Reasonable Value – shall not include any and
profit to the employer or to any person affiliated with 3. The facilities must be charged at fair and
the employer. reasonable value (Mabeza v. NLRC, GR No,
118506, April 18, 1997).
Fair Day’s Wage for a Fair Day’s Labor (“No work,
No Pay Principle”) Supplements – constitute extra remuneration or
If there is no work performed by the employee, there special privileges or benefits given to or received by
can be no wage or pay unless the laborer was able, the laborers over and above their ordinary earnings
willing, and ready to work but was illegally locked out, or wages.
suspended or dismissed or otherwise illegally
prevented from working (Aklan Electric Coop. V.
NLRC GR No. 129246, January 25, 2000).

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 13th Month Pay or Its Equivalent (See discussion
implement a Wage Order across the board. under 13th Month Pay Law)
Only to those employees receiving salaries  Additional income based on wage
below the prescribed minimum wage are required by P.D. 851 which is
entitled to the wage increase provided
therein. (Pag-Asa Steel Works, Inc. v. Court Note: For employees receiving regular wage, the term
of Appeals, GR. No. 166647, March 31, “basic salary” does not mean the amount actually
2006) received by an employee, but 1/12 of their standard
monthly wage multiplied by the length of their service
Article 100: Prohibition Against Elimination or within a given calendar year. The payments for sick,
Diminution of Benefits vacation, and maternity leaves, night differentials,
holiday pay, and premiums for work done on rest
The Non-Diminution days and special holidays are excluded from the
General Rule: Nothing in the Labor Code shall be computation of “basic salary”. (Honda Phils., Inc. v.
construed to eliminate or in any way diminish Samahan ng Malayang Manggagawa sa Honda, GR
supplements, or other employee benefits being enjoyed No. 145561, June 15, 2005)
at the time of promulgation of this Code.
 Every employee receiving a commission
 Benefits being given to employees cannot in addition to a fixed or guaranteed wage or
be taken back or reduced unilaterally by the salary is entitled to a thirteenth month pay, which
employer because the benefit has become must be 1/12 of their total earnings during the
part of the employment contract, written or calendar year. (Philippine Agricultural Commercial
unwritten. and Industrial Workers Union v. NLRC, GR No.
107994, August 14, 1995)
Exception: To correct an error, otherwise, if the error is  May be given anytime but not
left uncorrected for a reasonable period of time, it ripens later than December 24
into a company policy and employees can demand for it  “Its equivalent”: Mid-year
as a matter of right. bonus and Christmas bonus.
 A statutory obligation, granted
When Applicable to covered employees, hence, demandable
The rule is applicable if is shown that the grant of the as a matter of right
benefit is:  ONLY rank and file employees
1. based on an express policy, or are entitled to the payment of thirteenth
2. has ripened into practice over a long period of month pay as a matter of right. (House of
time, and the practice is consistent and Sara Lee v. Rey, GR No. 149013, August 31,
deliberate, and is not due to an error in the 2006).
construction/application of a doubtful or difficult Rationale
question of law. To protect the level of real wages from the ravages of
worldwide inflation; it was enacted on December 16,
Bonus – amount granted and paid to an employee 1975 after it was noted that there had been no
for his industry and loyalty which contributed to the increase in the minimum wage since 1970 and the
success of the employer’s business and made Christmas season was an opportune time for society
possible the realization of profits. to show its concern for the plight of the working
masses. (PD 851)
General Rule: Bonus is not demandable as a
matter of right. It is a management prerogative, Pro-Rated 13th Month Pay
given in addition to what is ordinarily received by or An employee who has resigned or whose services
strictly due to the recipient (Producers Bank v. were terminated at any time before the payment of
NLRC, GR No. 100701, March 28, 2001). the 13th month pay is entitled to this monetary benefit
in proportion to the length of the time he worked
Exceptions: during the year reckoned from the time of resignation
1. When it was promised to be given without any or termination from service.
conditions imposed for its payment in which
case it is deemed part of the wage; Commissions in Relation to 13th Month Pay
2. When it has ripened into practice (Marcos v. 1. The salesmen’s commissions, comprising a pre-
NLRC, GR No. 111744, September 8, 1995). 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. 9. other benefits granted by law, individual or
(Philippine Duplicators, Inc. v NLRC, GR No. collective bargaining agreements or company
110068, February 15, 1995) policy or practice
2. The so-called commissions “paid to or received
by medical representatives of Boie-Takeda Note: The rules implementing the Labor Code on
Chemicals or by the rank and file employees of NSD and SIL DO NOT apply to employees whose
Philippine Fuji Xerox were excluded from the term time and performance is unsupervised by the
“basic salary” because these were paid as employers, including those who are engaged on task
“PRODUCTIVITY BONUSES”. Such bonuses or contract basis, purely commission or those who are
closely resemble profit-sharing payments and paid a fix amount for performing work irrespective of
have no clear, direct, necessary relation to the the time consumed in the performance thereof.
amount of work actually done by each individual
employee. (Boie-Takeda Chemicals, Inc. v De La Chapter 3: Payment of Wages
Serna, GR No. 92147, December 10, 1993).
Article 102: Forms of Payment
Productivity Incentives
1. Kind of bonus that comes from productivity gain Employer CANNOT Pay His Workers by means of:
2. Aims to institute productivity at company level 1. Promissory notes;
and the sharing of productivity gain between 2. Vouchers
employers and employees; and 3. Coupons
3. Nature of salary bonus is proportionate to 4. Tokens
increases in current productivity (Productivity 5. Tickets
Incentives Act of 1990, RA 6974) 6. Chits; or
7. Any object other than legal tender.
Article 101: Payment By Results
Note: Even when expressly requested by the
Workers Paid in Piece-Rate Basis employee
Those who are paid a standard amount for every
piece or unit of work produced that is more or less General Rule: Payment by legal tender
regularly replicated, without regard to the time spent
in producing the same. Exceptions: Payment by check or money order may
be allowed if the same is:
Categories of Piece-Rate Workers 1. Customary on the date of effectivity of the LC;
A. As to Presence of Control 2. Necessary because of special circumstances as
1. Piece rate worker – works directly under the determined by the Secretary of Labor;
supervision of their employer. 3. Stipulated in the CBA; or
2. Pakiaw or Takay – works away from the 4. Where the following conditions are met:
employer’s work premises and are not directly a. There is a bank or other facility for
supervised by the employer. encashment within a radius of 1 kilometer from
the workplace;
B. As to Rate of Payment b. The employer or any of his agents or
1. Those paid piece rates as prescribed in Piece representatives does not receive any pecuniary
Rate Orders by the DOLE. benefit directly or indirectly from the
2. Those paid output rates which are prescribed by arrangement.
the employer and are not yet approved by the c. The employees are given reasonable
DOLE. time during banking hours to withdraw their
wages from the bank which time shall be
Benefits Payable to Piece-Rate Workers Whose considered as compensable hours worked if
Work is Directly Supervised by the Employer done during working hours; and
1. Applicable statutory minimum daily rate d. The payment by check is with the written
2. Yearly service incentive leave of five days with consent of the employees concerned if there is
pay no CBA authorizing the payment of wages by
3. Night shift differential bank checks (National Federation of Labor v.
4. Holiday pay CA, October 19,2004)
5. Meal and rest periods
6. Overtime pay (conditional)
7. Premium pay (conditional) Article 103: Time of Payment
8. 13th month pay; and
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,
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
Test of Compensability is covered by an office order or a locator slip or a
 For increased risk theory to apply in pass for official business;
compensation cases, the claimant must adduce
reasonable proof of connection between his Dual Purpose Doctrine – allows compensation
work and the risk of contracting the disease, or where a special trip would have to be made for the
that the risk of contracting the disease was employer if the employee had not combined the
increased by the claimant’s working conditions. service for the employer with his going or coming
 What the law requires is reasonable work trip;
connection and not a direct causal relation. It is
sufficient that the hypothesis on which the Special Engagement Rule – covers field trips,
workmen’s claim is based is probable since outings, intramurals and picnics when initiated and
probability, not certainty, is the touchstone sanctioned by the employer; and
(Castor-Garupa v. Employees’ Compensation
Commission, GR No. 158268, April 12, 2006). Positional and Local Risks Doctrine – if an
employee by reason of his duties is exposed to a
Note: Where the cause of the disease is unknown, special or peculiar danger from the elements, that
the theory of increased risk becomes applicable is, one greater than that to which other persons in
(Panotes v. ECC, GR No. L-64802, September 23, the community are exposed and an unexpected
1985). injury occurs, the injury is compensable.

Death – loss of life resulting from injury or sickness. Chapter 2: Coverage and Liability

Disability – loss or impairment of a physical or Article 168: Compulsory Coverage


mental function resulting from injury or sickness.
 Employees’ Compensation Law (ECL) applies
Exceptions: to all employers, public or private, and to all
1. Ingress-Egress/ Proximity Rule – when the employees, public or private including casual,
injury is sustained when the employee is emergency, temporary or substitute employees.
proceeding to or from his work in the premises  An employee who is not over 60 years of age
of the employer, the injury is compensable; and paying contributions to qualify for the
2. Going to or coming from work – when the injury retirement or life insurance benefit administered
is sustained when the employee is proceeding by the system shall be subject to compulsory
to or from his work in the premises of the coverage.
employer, the injury is compensable;
a. The act of the employee of going to, or Article 170: Effective Date of Coverage
coming from, the workplace, must have
been a continuing act, that is, he had not
been diverted therefrom by any other
The employer is covered compulsorily from the first Rules on Simultaneous Recovery
day of operation and the employee from the first 1. Simultaneous recovery under the Labor Code
day of employment. and Civil Code cannot be made. The action is
selective and the employee may choose to file
Article 172 Limitations of Liability the claim under either. But once the election is
made, the claimant cannot opt for the other
No Compensation if the Injury, Death or remedy.
Disability is the Result of the Employee’s 2. Simultaneous recovery under the Labor Code
1. Intoxication and the SSS can be made (DOJ Opinion No. 8,
2. Willful intention to injure or kill himself or Jan. 12, 1990) since P.D. 1921 has lifted the
another ban on simultaneous recovery.
3. Notorious negligence or
4. Otherwise provided by the Labor Code. 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
Intoxication the fund. Any agreement to the contrary is
Intoxication alone is not sufficient to defeat the prohibited.
recovery of compensation, when intoxication does Article 174: Liability of Third Parties
not incapacitate the employee from performing his
functions and duties and from following his Third Party – one upon whom no liability could
occupation. (Yohanon v. WCC, GR No. L-43641, entail under the law; one who is not an employer of
August 26, 1977). the injured employee or stranger to the employment
relationship and who may be held liable at common
Self-Inflicted Injuries and Suicides law for his negligence which results in an injury to
General Rule: NO compensation for disability and the employee.
death.
Legal Subrogation
Exceptions: When the disability or death is caused by
1. By agreement of the parties; and circumstances creating a legal liability against a
2. If the suicide/death is caused by work-related or third party, the disabled employee or the
compensable illness or disease (NAESS dependents in case of his death shall be paid by
Shipping Phil. V NLRC, GR No. 73441, the System (GSIS or SSS, as the case may be). In
September 4, 1987). case the benefit is paid, the system shall be
subrogated to the rights of the disabled employee
Injury or Death in the Course of Assault or the dependents, in case of his death, in
Rules: accordance with the general law.
1. When the injured was the unlawful aggressor,
NOT compensable (Mabuhay Shipping Excessive Recovery
Services, Inc., et. al v NLRC, et. al., GR No. Where the system (GSIS or SSS, as the case may
94167, January 21, 1991); and be) recovers from such third party damages in
2. When the injured was the victim of the assault excess of those paid or allowed under the law, such
and it occurred in the course of performance of excess shall be delivered to the disabled employee
official functions, compensable (Lentejas v. or other persons entitled thereto, after deducting
ECC, GR No. 89168, May 14, 1991). the cost of proceedings and expenses of the
System.
Notorious Negligence – deliberate act of the
employee to disregard his own personal safety. Double Recovery
The injured employee cannot claim payment twice
Article 173: Extent of Liability 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  The income benefit shall be paid beginning on
every month thereafter during his employment, his the first day of such disability. If caused by an
employer shall prepare to remit to the system a injury or sickness it shall not be paid longer
contribution equivalent to 1% of his monthly salary than 120 consecutive days except where such
credit. injury or sickness still requires medical
attendance beyond 120 days but not to
Article 184: Government Guarantee exceed 240 days from onset of disability, in
which case benefit for temporary total
The government guarantees the benefits disability shall be paid. However, the system
prescribed under Title II, and accepts general may declare the total and permanent status at
responsibility for the solvency of the State any time after 120 days of continuous
Insurance Fund. temporary total disability (Azucena, 2007).
Relapse partial loss of the use of any part of his body
 After an employee has fully recovered as duly (Abaya v. ECC, GR No. 64255, August 1989)
certified, the period covered by any relapse,
which results in disability and is determined to Effect of Gainful Employment
be compensable, shall be considered seprate For purpose of entitlement to income benefits for
from the period covered by the original permanent partial disability, a covered employee
disability (ICC Resolution No. 1029, Aug. 10, shall continue to receive the benefits provided
1978). thereunder even if he is gainfully employed and
receiving his wages or salary (Sec 1[b], Rule XII,
2. Permanent Total – if as a result of the injury or Amended Rules on Employees’ Compensation).
sickness the employee is unable to perform any
gainful occupation for a continuous period Note: Benefits due to an employee due to work-
exceeding 120 days. related sickness shall be provided until he
becomes gainfully employed, or until his recovery,
 The following disabilities shall be considered or death (Manioso v. GSIS, GR No. 148323, April
permanent total. 29, 2005).

1. Temporary total disability for more thatn 120 Distinguished from Permanent Total
days except as may otherwise be provided. The test of whether an employee suffers from
2. Complete loss of sight of both eyes “permanent total disability” is a showing of the
3. Loss of two limbs at or above the ankle or capacity of the employee to continue performing
wrist. his work notwithstanding the disability he incurred
(Vicente v. ECC, GR No. 85024, January 23,
1991).

4. Permanent complete paralysis of two limbs Earning Capacity May Still Be “Impaired”
5. Brain injury resulting in incurable imbecility or even if earning is Higher After the Injury.
insanity; and Employee who receives higher wages after an
6. Cases as determined by GSIS or SSS, as the injury than what he earned before may still have
case may be, and approved by the suffered an impairment of earning capacity (149
Commission. A.L.R. 438).

Period of Entitlement Chapter 7: Death Benefits


 The full monthly income benefit shall be paid
for all compensable months of disability. Death benefits
The System shall pay to the primary beneficiaries
Suspension of Income Benefits upon the death of the covered employee an
 Monthly income benefits can be suspended amount equal to his monthly income benefit, plus
under ANY of the following conditions: ten percent (10%) thereof for each dependent
1. Failure of the employee to present himself for child, but not exceeding five (5), beginning with
examination at least once a year upon notice the youngest and without substitution. The
by the system; income benefit shall be guaranteed for five (5)
2. Failure to submit a quarterly medical report years.
certified by the attending physician;
3. Complete or full recovery from his permanent Dependency – does not mean absolute
recovery; or dependency for the necessities of life, but rather,
4. Upon being gainfully employed (Sec. 2, Rule that the plaintiff looked up to and relied on the
XI, Amended Rules on Employee’s contribution of the decedent in whole or in part as
Compensation). a means of supporting and maintaining herself in
accordance with her station in life. A person may
3. Permanent Partial – if as a result of the injury be dependent although able to maintain herself
or sickness, the employee suffers a permanent without any assistance from the decedent
(Castillo v. Cadwallader, GR No. 41261,  If the deceased employee has no beneficiaries
September 26, 1934). at the time of his death, the death benefit shall
accrue to the Employees’ Compensation Fund
Dependents (Sec. 2, Rule XV, Amended Rules on
1. Legitimate, legitimated, and legally adopted or Employees’ Compensation).
acknowledged natural child who is unmarried,
not gainfully employed and not over 21 years Persons Entitled to Funeral Benefits
of age or over 21 years of age provided that 1. Surviving spouse
he is incapable of self-support due to a 2. Legitimate child who spent for funeral
physical or mental defect which is congenital services; or
or acquired during minority. 3. Any other person who can show
2. Legitimate spouse living with the employee; inconvertible proof of having borne the
and funeral expenses (Rule XI, Amended Rules
3. Parents of said employee wholly dependent on Employees’ Compensation).
upon him for regular support.
Chapter 8: Provisions Common to Income
Benefits Benefits
1. For life to the primary beneficiaries,
guaranteed for five years. Article 201: Prescriptive Period
2. For not more than 60 months to the  Despite the three-year prescriptive period
secondary beneficiaries; and expressly provided in Art. 201, a compensation
3. In no case shall the total benefit be less than claim may be filed beyond this but before the
P 15,000. 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
Beneficiaries time the employee lost his earning capacity not
Beneficiaries shall be determined at the time of the from the time the illness was discovered (ECC
employee’s death (Sec. 1[a], Rule XV, Amended v. Sanico GR No. 134028, December 17, 1999).
Rules on Employees’ Compensation)
Chapter 9: Records, Reports and Penal
A. Primary Beneficiaries Provisions
1. Dependent spouse until he or she
remarries; and Article 206: Notice of Sickness, Injury or Death
2. Dependent children (legitimate, legitimated,
natural born or legally adopted). General Rule: Notice of sickness, injury or death
shall be given to the employer by the employee or
B. Secondary Beneficiaries by his dependents or anybody on his behalf within
1. Illegitimate children and legitimate 5 days from the occurrence of the contingency.
descendents; and
2. Parents, grandparents and grand and Exceptions:
grandchildren. No Notice shall be required if:
1. The contingency is known to the employer
 Primary beneficiaries shall have priority claim to of his agents or representatives; or
death benefits over secondary beneficiaries. 2. The employer suffered no damage by
Whenever there are primary beneficiaries, no reason of such delay or lack of notice
death benefit shall be paid to secondary (Central Azucarrera Don Pedro v. WCC, GR
beneficiaries. No. 29670, October 9, 1987).
 If there are no primary beneficiaries at the time
of death, the death benefit shall be paid to his TITLE THREE: MEDICARE
secondary beneficiaries.
Article 209: PHIC Note: Absent an employer-employee relation,
The Philippines Health Insurance Corporation there is no labor relation to speak of. If there is no
created by R.A. 7875 has taken over the functions Er-Ee relationship between the parties, there is
of the Philippine Medical Care Commission. no basis for organizing for purposes of collective
bargaining.
TITLE FOUR: ADULT EDUCATION
 Collective bargaining process if possible only
Article 210: Adult Education when there is a labor organization, i.e.
Employers shall render assistance in the adult 1. labor union; or
education programs for their employees as 2. employee association
prescribed by the DOLE.
 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
LABOR RELATIONS 3. The public – always to be considered in
Labor Law dispute between labor and capital, and it has
been held that the rights of the general public
are paramount.
BOOK FIVE. LABOR RELATIONS 4. The state

TITLE ONE: POLICY AND DEFINITIONS Note: Employer and employees are ACTIVE
parties while the public and the state are
Chapter 1: General Provisions PASSIVE parties. (Poquiz, 2006, p. 3)

Article 211:Declaration of Policy Principle of Non-Oppression – mandates


capital and labor not to act oppressively against
Labor Relations – the interactions between the each other or impair the interest and convenience
employer and employees and their of the public. The protection to labor clause in the
representatives and the mechanism by which the Constitution is not designed to oppress or destroy
standards and other terms and conditions of capital (Capili v. NLRC, GR No. 117378, March
employment are negotiated, adjusted and 26, 1997).
enforced. (The Labor Code with Comments and
Cases 2004, Azucena, vol. II, p.8  Article 211 mentioned Conciliation, Mediation
and Voluntary Arbitration which are
Labor Relations Law – define the status, rights, considered the alternative modes of
and duties and the institutional mechanisms that settlement of labor dispute, alternative to the
govern the individual and collective interactions of more adversarial strikes, lock outs or any
employers, employees or their representatives. mass concerted actions.
(Everyone’s Labor Code, Azucena, 2007, p. 4)
Conciliation – process where a disinterested obtained any other substantially equivalent and regular
third party meets with management and labor, at employment
their request or otherwise, during a labor dispute 3.one who has been dismissed from work but the
or in collective bargaining conferences, and, by legality of the dismissal is being contested in a forum
of appropriate jurisdiction (D.O. No. 40-03, March 15,
cooling tempers, aids in reaching an agreement.
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


Mediation – a third party studies each side of the employees which exists in whole or in part for the
dispute them makes proposals for the disputants to purpose of collective bargaining with employers
consider. But a member cannot make an award or concerning terms and conditions of employment.
render a decision.
Legitimate Labor Organization – any labor
Arbitration - the submission of a dispute to an organization which is duly registered with DOLE; the
impartial person for determination on the basis of term includes a local/chapter of the Bureau of Labor
evidence and arguments of the parties. The arbiter’s Relations directly chartered by a legitimate federation
decision or awards is enforceable upon the disputants. or national union which has been duly reported to the
It may voluntary or compulsory. Department in accordance with Section 2, Rule VI,
Book V, IRR of LC of the Rules Implementing the LC
 For Art. 211 (g), see Art 255 for more discussions. (See notes under Arts. 234 and 242, LC).

Chapter 2: Definitions Company Union – any labor organization whose


formation, function or administration has been assisted
Article 212: Definitions by any act defined as ULP under the Labor Code.

Employer – one who employs the service of others, Bargaining Representative – means a legitimate
one for whom employees work and who pays their labor organization whether or not employed by the
wages or salaries (Feati University v. Bautista, GR No. employer.
L-21278 December 27, 1966)
Labor Dispute – includes any controversy or matter
- any person acting in the interest of an employer, concerning:
directly or indirectly. The term does not include a labor 1. terms or conditions of employment; OR
organization or any of its officers and agents, EXCEPT 2. association or representation of persons in
when acting as an employer. The mere fact that negotiating, fixing, maintaining, changing or
respondent is a labor union does not mean it cannot arranging the terms and conditions of employment.
be considered an employer for persons who work for
it. Much less should it be exempted from labor laws.  Regardless of whether the disputants stand in the
(Bautista v. Inciong, GR No. L-52824, March 16, 1988) proximate relation of employer and employee.

Employee includes: Test: depends on whether it involves or concerns


1.any person in the employ of an employer terms, conditions of employment, or representation
2.any individual whose work has ceased as a result of (SMC Employees Union –PTGWO v. Bersamira, GR
or in connection with any current labor dispute or No. 87700. June 13, 1990).
because of any unfair labor practice if he has not
Even the question of employer-employee (E-E) policies and/or to hire, transfer, suspend, lay off, recall,
relationship can be considered a “labor dispute” discharge, assign or discipline employees.

Supervisory Employee – those who, in the interest of


Types of Labor Disputes the employer, effectively recommend such managerial
1. Labor Standard Disputes (ComBeWo) actions if the exercise of such authority is not merely
a. Compensation (e.g. underpayment of routinary or clerical in nature but requires independent
minimum wage, stringent output quota; judgment.
illegal pay deductions);
b. Benefits (e.g. nonpayment of holiday pay,  All employees not falling within any of the above
overtime pay or other benefits); and definitions are rank-and-file employees.
c. Working conditions (e.g. unrectified work
hazards Voluntary Arbitrator
1. any person accredited by the Board as such; or
2. Labor Relations Disputes (ORB-CE) 2. any person named or designated in the CBA by
a. Organizational right dispute/unfair labor the parties to act as their Voluntary Arbitrator; or
practice (e.g. coercion restraint or 3. one chosen with or without the assistance of the
interference in unionization efforts; reprisal National Conciliation and Mediation Board
or discrimination due to union activities; pursuant to a selection procedure agreed upon
company unionism); in the CBA; or
4. any official that may be authorized by the
Secretary of Labor to act as Voluntary Arbitrator
b. Representation disputes (e.g. upon the written request and agreement of the
determination of the collective bargaining parties to a labor dispute.
unit; ULP strike; uncertainty as to
determination of the sole and exclusive Unfair Labor Dispute - any unfair labor practice as
bargaining agent of the employees in an expressly defined by the Code.
appropriate bargaining unit which is the
majority union);  Any act intended or directed to weaken or defeat
c. Bargaining disputes (e.g. refusal to the worker’s right to self-organize or to engage
bargain (ULP); bargaining deadlock; in lawful concerted activities (Azucena, 2004)
economic strike or lockout);
d. Contract administration or personnel TITLE TWO: NATIONAL LABOR RELATIONS
policy disputes (e.g. noncompliance with COMMISSION
CBA provisions (ULP, if gross non-
compliance with economic provisions); Chapter 1: Creation and Composition
disregard of grievance machinery;
violation of no strike/ no lockout Article 213: National Labor Relations
agreement); and Commission (as am by R.A. 9347, July 27, 2006)
e. Employment tenure disputes (e.g. non-
regularization of employees; illegal NLRC – an administrative body with quasi-judicial
termination; non-issuance of employment functions and the principal government agency that
contract). hears and decides labor-management disputes;
attached to the DOLE for program and policy
Parties to a Dispute coordination only.
1. Primary Parties
a. Employer Composition
b. Employees 1. One (1) Chairman; and
c. Union 2. 23 Members
2. Secondary Parties  Eight (8) members each, shall be chosen
a. Voluntary Arbitrator only from among the nominees of the
b. Agencies of Dole (BLR, VAC) workers and employers organizations,
c. NLRC respectively.
d. Secretary of Labor  The Chairman and the Seven (7) remaining
e. Office of the President members shall come from the public sector,
with the latter to be chosen PREFERABLY
Managerial Employee - one who is vested with powers from among the incumbent labor arbiters.
or prerogatives to lay down and execute management
 Upon assumption into office, the members commissioners from the other divisions
nominated by the workers and employers as may be necessary.)
organization shall divest themselves of any 2. It shall be mandatory for the division to meet for
affiliation with or interest in the federation or purposes of consultation.
association to which they belong.  The conclusion of a division on any case
submitted to it for decision should be
Note: The composition of the NLRC is trisectoral. reached in consultation before the case is
Tripartism is representation of the three-sectors- assigned to a member for the writing of the
public or government, employers and the workers-in opinion.
policy-making bodies of the government. Tripartism
is observed in numerous government agencies or 3. A certification to this effect signed by the
instrumentalities among them, the NLRC. presiding commissioner of the division shall be
issued (copy attached to the record of the case
Note: There is no need for the Commission on and served upon the parties).
Appointments to confirm the positions in the NLRC.
Such requirements has no constitutional basis. Qualifications of the Chairman and the
(Calderon v. Carale, GR No. 91636, April 23, 1992). 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
Allocation of Powers and Functions of NLRC 4. preferably a resident of the region where he is to
1. En Banc hold office.
a. Promulgating rules and regulations and Qualifications of Executive Labor Arbiters/ Labor
governing the hearing and disposition of Arbiters
cases before any of its divisions and 1. Must be members of the Philippine Bar;
regional branches; 2. Must have been engaged in the practice of law
b. Formulating policies affecting its in the Philippines for at least 10 years; and
administration and operations; and 3. Must have experience or exposure in handling
c. On temporary or emergency basis, to labor management relations for at least 5 years.
allow cases within the jurisdiction of any
division whose docket allows the
additional workload and such transfer Term of Office of the Chairman, Commissioners,
will not expose litigants to unnecessary and Labor Arbiters
additional expense.
They shall hold office during good behavior until they
2. Division (eight divisions each with 3 reach the AGE of 65 unless removed for causes as
members) provided by law or become incapacitated to
a. Adjudicatory; discharge the function of his office.
b. All other powers, functions and duties;
and  PROVDED, HOWEVER, That the President of
c. Exclusive appellate jurisdiction over the Republic of the Philippines may extend the
cases within their respective territorial services of the commissioners and labor arbiters
jurisdiction. See table of jurisdiction. up to the maximum age of 70 years upon the
recommendation of the commission en banc.
Adjudication of Cases (triple C)
1. The NLRC adjudicates cases by division. A Jurisdiction
concurrence of 2 votes is needed for a valid
judgment. A. Exclusive and Original
 (Whenever the required membership in
a division is not complete and the 1. Certified cases – cases certified to it for
concurrence of the commissioners to compulsory arbitration by the Secretary of Labor
arrive at a judgment or resolution cannot under Art. 263 or the President under Art 264;
be obtained, the Chairman shall 2. Injunction cases under Arts. 218 and 264; and
designate such number of additional 3. Contempt cases.
3. If accompanied with a claim for reinstatement,
B. Exclusive Appellate those that workers file involving wages, rates of
pay, hours of work and other terms and conditions
1. Cases DECIDED BY LABOR ARBITER under of employment
Art. 217 [b] of the labor Code and Sec. 10 R.A. 4. Claims for actual, moral, exemplary and other
8042 (Migrant Workers Act); and forms of damages arising from E-E relations;
2. Cases DECIDED BY THE REGIONAL OFFICES 5. Cases arising from any violations of Art 264
OF DOLE IN THE EXERCISE OF including questions involving the legality of strikes
ADJUDICATORY FUNCTIONS under Art 129 of and lockouts;
the Labor Code over monetary claims of workers 6. Except claims for Employment Compensation,
amounting to not more than P5,000. Social Security, Philhealth and maternity benefits,
all other claims arising from E-E relations,
including those of persons in domestic or
Judicial Review household service, involving an amount exceeding
P5,000 regardless of whether accompanied with a
 Findings of facts of a labor tribunal are claim for reinstatement;
accorded the utmost respect by the courts 7. Monetary claims of overseas contract workers
and are well nigh conclusive if supported by arising from Er-Ee relations under Migrant
substantial evidence. Workers Act of 1995;
 PETITIONS FOR CERTIORAR (RULE 65) 8. Wage distortion disputes in unorganized
against decisions of the NLRC should establishments not voluntarily settled by the
henceforth be initially filed with the court of parties pursuant to RA 6727;
Appeals in strict observance of the doctrine 9. Enforcement of compromise, agreements when
on the hierarchy of courts as the appropriate there is non-compliance by any of the parties
forum for the relief desired The Court of pursuant to Article 227 of the Labor Code, as
Appeals is procedurally equipped to resolve amended; and
unclear or ambiguous factual finding, aside 10. Other cases as may be provided by law.
from the increased number of its component
divisions (St. Martin’s Funeral Homes v. Note: Although the provision speaks of
NLRC, GR No. 1308666, September 16, EXCLUSIVE AND ORIGINAL JURISDICTION of
1998). Labor Arbiters, the cases enumerated may instead
be submitted to a voluntary arbitrator by
Barangay Conciliation Not Applicable agreement of the parties under Art. 262.
Labor cases are not subject to Barangay Conciliation
since ordinary rules of procedure are merely suppletory  The law prefers voluntary over compulsory
in character vis-à-vis labor disputes which are primarily arbitration
governed by labor laws (Montoya v. Escayo, GR Nos.  The cases that a Labor Arbiter can hear and
82211, March 21, 1989). decide are employment related. Where no Er-
Ee relationship exists between the parties and
no issue is involved which may be resolved by
Chapter 2: Powers and Duties reference to the Labor Code, other labor
statutes, or any collective bargaining
Article 217: Jurisdiction of Labor Arbiters and the agreement, it is the Regional Trial Court that
Commission has jurisdiction (Lapanday Agricultural Dev’t.
Corp. v. CA, GR No. 112139, January 31,
Exclusive and Original Jurisdiction of Labor Arbiters 2000).
EXCEPT as otherwise provided under this Code, the
labor Arbiters shall have original and exclusive  The Labor Arbiter has jurisdiction over
jurisdiction to hear and decide, WITHIN 30 CALENDAR controversies involving employers and
DAYS after the submission of the case by the parties for employees only if there is a reasonable causal
decision without extension, even in the absence of connection between the claim asserted and
stenographic notes, the following cases involving all the employer-employee relations. Absent such
workers, whether agricultural or non-agricultural: a link, the complaint is cognizable by the
regular court (EVIOTA v. CA, July 29, 2003).

1. ULP cases
2. Termination disputes Concurrent with NLRC
Contempt Cases
10. Complaint arising from violation of a training
Cases Referred to Grievance Machinery and agreement (Singapore Airlines v. Pano, GR No.
Voluntary Arbitration L-47739, June 22, 1983); and
11. The Labor Arbiter is without jurisdiction over the
The following are cases which must be disposed of case once his judgment has assumed the
by Labor Arbiter by referring the same to the character of finality (Cayena v. NLRC, GR. No.
grievance machinery and voluntary arbitration: 7613, February 18, 1991).
1.disputes on the interpretation or implementation
of CBA; and 2005 NLRC Rules of Procedure on Venue of
2.disputes on the interpretation of enforcement of Filing Cases
company personnel policies. 1. All cases which Labor Arbiters have authority to
decide may be filed in the Regional Arbitration
 The original and exclusive jurisdiction of the Branch (RAB) having jurisdiction over the
Labor Arbiter under Art 217 [c] for money workplace of the complainant/ petitioner.
claims is limited only to those arising from
statutes or contracts other than the CBA (San Note: Workplace is understood to be the place or
Jose v. NLRC, GR No. 121117, August 17, locality where the employee is regularly assigned
1998) when the cause of action arose. It shall include the
place where the employee is supposed to report
No Jurisdiction over the Following back after a temporary detail, assignment, or travel.
1.Foreign governments (JUSMAG Philippines v.
NLRC, GR No. 108813, December 15, 1994)  In case of field employees, as well as ambulant
2.International agencies (Lasco v. UNRFNRE, GR or itinerant workers, their workplace is:
No. 109095-109107, February 23, 1995) a. where they are regularly assigned;
3.Intra-corporate disputes which fall under P.D. b. where they are supposed to regularly
902-A and now fall under the jurisdiction of the receive their salaries and wages
regular courts pursuant to the new Securities c. where they receive their work
Regulation Code (Nacpil v. IBC GR 144767, instructions from, and
March 21, 2002); d. report the results of their assignment to
4. Executing Money claims against government their employers.
(DAR v. NLRC, GR No. 104269, November 11,
1993); 2. Where 2 or more RABs have jurisdiction over
5. Cases involving GOCCs with original charters the workplace, the first to acquire jurisdiction
which are governed by civil service law, rules or shall exclude others.
regulations (Art. IX-B, Sec. 2, No. 1, 1987 3. Improper venue when not objected to before
Const.); filing of position papers shall be deemed waived.
6. Local water district (Tanjay Water district v. 4. Venue may be changed by written agreement of
Gabaton, GR Nos. 63742 and 84300, April 17, the parties or when the commission or the Labor
1989) except where NLRC jurisdiction is invoked Arbiter so orders, upon motion by the proper
(Zamboanga City Water District v. Buat, GR No. party in meritorious cases.
104389, May 27, 1994); 5. For overseas Contract Workers, where the
7. The aggregate money claim does not exceed complainant resides or where the principal office
5,000 pesos and without claim for reinstatement of the respondent employer is located, at the
(Rajah Humabon Hotel, Inc. v. Trajano, GR No. option of the complainant.
100455 September 17, 1993);  The Rules of Procedure on Venue was
8. Claim of employee for cash prize under the merely permissive, allowing a different
innovation program of the company, although venue when the interest of substantial
arising from employer-employee relationship, is justice demands a different one. (Dayag v.
one requiring application of general civil law on Canizers, GR No. 124193, March 6, 1998)
contracts which is within the jurisdiction of the
regular courts (San Miguel Corp. v. NLRC, GR Service of Summons
No. L-80774, May 31, 1988); In the absence of service of summons or a valid
9. Cause of action is based on quasi-direct or tort waiver, thereof the hearings and judgment rendered
which has no reasonable connection with any of by the labor arbiter are null and void.
the claims enumerated in Art. 217 of the Code
(Ocheda v. CA, GR No. 85517, October 16, Compulsory Arbitration
1992) The process of settlement of labor disputes by a
government agency which has the authority to
investigate and make award binding on all the 2. Hearing after due and personal notice has been
parties. Labor arbiter has the authority to conduct served in such manner as the Commission shall
compulsory arbitration (PAL v. NLRC, GR No. 55159, direct to
December 22, 1989). a. all known persons against whom the
Note: The NLRC may conduct compulsory arbitration relief is sought; and
ONLY in national interest cases referred to it by the b. also to the Chief Executive or other
DOLE Secretary. public officials of the province or city
within which the unlawful acts have
Article 218: Powers of the Commission been threatened or committed charged
with the duty to protect the
Powers of the NLRC (RCI-COI) complainant’s property.
1. Rule-making power – promulgation of rules and 3. Reception at the hearing of the testimonies of
regulations witnesses with opportunity for cross-
a. Governing disposition of cases before examination, in support of the allegations of the
any of its divisions/ regional offices; complaint made under oath as well as testimony
b. Pertaining to its internal functions in opposition thereto.
c. As may be necessary to carry out the 4. Finding of fact of the Commission to the effect
purposes of this Code that:
2. Power to issue Compulsory processes a. Prohibited or unlawful acts have been
(administer oaths, summon parties, issue threatened and will be committed, or
subpoenas) have been committed and will be
3. Power to Investigate matters and hear disputes continued unless restrained, but no
within its jurisdiction (adjudicatory power, original injunction or temporary restraining order
and appellate jurisdiction over cases); shall be issued on account of any threat,
4. Contempt power; prohibited or unlawful act, except
against the persons, association or
5. Ocular inspection (art 219); and organization making the threat or
6. Power to issue Injunctions and restraining committing the prohibited or unlawful act
orders. or actually authorizing or ratifying the
same after actual knowledge thereof;
Injunction or TRO b. that substantial and irreparable injury to
Orders which may require, forbid, or stop the doing the complainant’s property will follow;
of an act. The power of the NLRC to enjoin or
restrain the commission of any or all prohibited or Note: Irreparable Injury – an injury which cannot
unlawful acts under Article 218 of the Labor Code be adequately compensated in damages due to
can only be exercised in a labor dispute. the nature of the injury itself or the nature of the
right or property injured or when there exists no
Note: A restraining order is not an injunction at all but pecuniary standard for the measurement of
a writ to compel parties to maintain the matters in damages.
controversy in status quo until the question of
whether or not a temporary or preliminary injunction c. that as to each item of relief to be
ought to be issued may be determined. (BF Homes granted, greater injury will be inflicted
v. Reyes, March 16, 1971) upon complainant by the denial of the
relief than will be inflicted upon the
Who May Issue defendants by the granting of the relief;
1. President (Art 263[g]); d. that complainant has no adequate
2. Secretary of Labor (Art. 263[g]); and remedy at law; and
3. NLRC
Note: Adequate Remedy – one that affords relief
Note: Art 218 limits the grant of injunctive power to with reference to the matter in controversy and
the “Commission”. The labor arbiter is EXCLUDED which is appropriate to the particular
STATUORILY hence no NLRC Rules can grant him circumstances of the case. If the remedy is
that power. specifically provided by law, it is presumed to be
adequate (PAL v. NLRC, GR No. 120567, March
Procedure for the issuance of Restraining Order/ 20, 1998)
Injunction:
1. Filing of a verified petition e. that public officers charged with the duty
to protect complainant’s property are to
protect or unwilling to furnish adequate The Chairman, any Commissioner, Labor Arbiter or
protection. their duly authorized representatives may, at anytime
during working hours:
5. Posting of a bond. 1. Conduct an ocular inspection on any
establishment, building, ship, place or premises,
Injunction from NLRC is NOT the Proper Remedy including any work, material, implement,
Against Employee’s Dismissal machinery, appliance or any object therein; and
It is an essential requirement that there must first be 2. ask any employee, laborer, or any person as the
a labor dispute between the contending parties case may be for any information or date
before the labor arbiter. In the present case, there is concerning any matter or question relative to the
no labor dispute between the petitioner and private object of the investigation.
respondent as there has yet been no complaint for
illegal dismissal field with the labor arbiter. (ibid.) Article 221: Technical Rules NOT Binding and
Prior Resort to Amicable Settlement
Requisites Before TRO may be issued Ex Parte
Technical Rules NOT Binding
1. The complainant shall allege that, unless a Administrative and quasi-judicial bodies like the NLRC
TRO is issued without notice, a substantial are not bound by technical rules of procedure in the
and irreparable injury to complainant’s adjudication of cases (Ford Phils. Salaried Employees
property will be unavoidable; Assoc. v. NLRC, GR No. 75347, December 11, 1987).
2. Testimony under oath is sufficient, if
sustained, to justify the Commission in  Rules of evidence are not strictly observed in the
issuing a temporary injunction upon hearing proceedings before the NLRC (Bantolino, et al.
after notice (Affidavit of Merit); and v. Coca Cola Bottlers Phils., Inc. GR No.
3.The complainant shall first file an undertaking 153660, June 10, 2003).
with adequate security/bond in an amount to  A formal or trial-type hearing is not at all times
be fixed by the Commission sufficient to and in all instances essential to due process, the
recompense those enjoined for any loss, requirements of which are satisfied where
expenses or damage caused by the parties are afforded reasonable opportunity to
improvident or erroneous issuance of such explain their side of the controversy at hand
order or injunction, including all reasonable (Llora Motors Inc. v. Drilon, GR No. 82895,
cost, together with a reasonable attorney’s fee, November 7, 1989)
and expense of defense against the granting
of any injunctive relief sought in the same Res Judicata applies only to judicial or quasi-judicial
proceeding and subsequently denied by the proceedings and NOT to the exercise of administrative
Commission. powers.

Note: The TRO shall be effective for NO LONGER Prohibited Pleadings and Motions under 2005
THAN 20 DAYS and shall become void at the NLRC Rules of Procedure
expiration of said 20 days counted from the date of the 1. Motion to dismiss the complaint except on the
posting of the bond. ground of lack of jurisdiction over the subject
matter, improper venue, res judicata, prescription
 It may be lifted or it may be upgraded to a and forum shopping;
permanent injunction. 2. Motion for Bill of Particulars
3. Motion for New Trial
 The TRO takes effect upon its issuance and not 4. Petition for Relief from Judgment when filed with
upon receipt of the parties. (A.M. No. RTJ-98- the labor arbiter;
1405, April 12, 2000) 5. Petition for certiorari, prohibition and Mandamus
6. Motion to declare respondent in default; and
 The procedural and substantial requirements of 7. Motion for reconsideration or appeal from any
Art. 218[e] must be strictly complied with before interlocutory order of the labor arbiter.
an injunction may issue in a labor dispute.
Amicable Settlement
The Labor Arbiter shall exert all efforts to arrive at an
Article 219: Ocular Inspection 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, posting of a bond in a reasonable amount in relation to
1982). the monetary award.
 If the 10th day, as the case may be, falls on a
Saturday, Sunday or holiday, the last day to Note: Failure to give a copy of the appeal to the
perfect the appeal shall be the first working appellee within 10 days is not fatal IF the latter was not
day following such Saturday, Sunday, or prejudiced by the delay in the service of said copy of
holiday. the appeal- technical rules must yield to the broader
 No Motion for Reconsideration is available in interest of substantial justice. (Modern Fishing Gear
questioning the Labor Arbiter’s decision Labor Union v. Noriel, GR No. 53907, May 6, 1988).
(2005 NLRC Rules).
Notice of Appeal
Period Not Extendible A mere notice of appeal does not stop the running of
The perfection of an appeal within the statutory/ the reglementary period of appeal.
reglementary period is not only MANDATORY but also
JURISDICTIONAL and failure to do so renders the Execution Pending Appeal
questioned decision final and executory as to deprive the  The decision of the labor arbiter ordering the
appellate court of jurisdiction to alter the final judgment reinstatement of a dismissed or separated
of the Regional Directors and Labor Arbiters (ACDA v. employee shall be immediately executory insofar
NLRC GR No. L-39686 June 28, 1980, Aboitiz Shipping as the reinstatement aspect is concerned and
Employees Association v. Trajano, GR No. 112955 the posting of an appeal bond by the employer
September 1, 1997). shall not stay such execution.

Period for the Perfection of an Appeal to the NLRC  There is no need for a motion for the issuance of
1. filing of a verified memorandum of appeal writ of execution on the reinstatement order as it
containing the grounds, issues raised and is self-executory (Pioneer Texturizing Corp. v.
arguments propounded and reliefs sought within NLRC, GR No. 118651, October 16, 1997)
the required period of appeal and with a
statement of the date appellant received the
appealed decision, order or resolution; 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
2. in three legibly typewritten or printed copies prevailing prior to his dismissal or separation or
3. proof of payment of the required appeal fee to a substantially equivalent position if the former
4. in case of monetary award, an appeal by the position is already filled up; OR
employer may be perfected only by the posting 2. He can reinstate the employee merely in the
of a bond (cash deposit or surety bond) payroll with payment of the accrued salaries.
equivalent in amount to the monetary award
exclusive of damages and attorney’s fees Note: The exercise of one of the foregoing options
5. proof of service upon the other parties; and may be compelled under pain of contempt and the
6. certificate of non-forum shopping. employer may be made to pay the salary of the
employee instead.

Note: Where the employer failed to post a bond to Payroll Reinstatement


perfect its appeal, the remedy of the employee is a One where an employee is paid his monthly salary
motion to dismiss the appeal, NOT a petition for without making perform actual work. It applies in
mandamus. termination cases where the labor court declares the
dismissal illegal and orders reinstatement of the
Note: The bond is sine qua non to the perfection of employee, but the employer does not want to
appeal from the labor arbiter’s monetary decision actually or physically reinstate him and instead, at
(Catubay, et al. v. NLRC, GR No. 119289, April 12, the employer’s option, merely reinstates the
2000) property bond acceptable (UERM-Memorial employee in the payroll pending appeal.
Medical Center v. NLRC, GR No. 110419, March 3,
1997). Judicial Review
Rules
Note: No motion to reduce bond shall be entertained
except on meritorious grounds and only upon the
No law allows an appeal from a decision of the Article 224: Execution of Decisions, Order, or
Secretary of Labor, or the NLRC, or of a voluntary Awards
arbitrator.
When Decision Becomes Final And Executory
Note: Decisions of Voluntary Arbitrators are The decision of the Secretary of Labor, the Commission,
appealable to the CA under Rule 43 of the Rules of the Bureau or regional director, the Labor Arbiter, the
Court in relation to Sec 9 of BP Blg. 129. Voluntary Med-Arbiter or the Voluntary Arbitrator shall be final and
Arbitrators are to be considered as quasi-judicial executory after 10 calendar days from receipt thereof by
agencies whose decisions are appealable to the CA the parties and shall be executory within ten (10) years.
(Luzon Dev’t Bank v. Association of Luzon Dev’t
Bank, GR No. 120319, October 6, 1995). Who May Issue Writ of Execution
1. Secretary of Labor
1. The way to review NLRC decisions is by special 2. Regional Director
civil action of certiorari, prohibition or mandamus 3. Commission
under Rule 65 of the Rules of Court 4. Labor Arbiter
5. Med-Arbiter
Note: A petition of certiorari shall NOT stay (or 6. Voluntary Arbitrator or Panel of Arbitrator
suspend) the execution of the assailed decision of
the NLRC UNLESS a TRO is issued by CA or SC When Writ of Execution May be Issued
(Sec 10, Rule XI, NLRC Rules, 2005)  The foregoing may, upon its own initiative or on
motion of any interested party, issue a writ of
2. Jurisdiction belongs to SC and CA but in line execution on a judgment within 5 years from the
with the doctrine on hierarchy of courts, the date it becomes final and executory.
petition should be initially presented to the CA
(St. Martin’s Funeral Home v. NLRC, GR No.  An independent action which is an action to
130866, September 16, 1988) revive judgment is required for the execution of
the final judgment within the next 5 years (Phil.
3. No motion for Reconsideration is allowed for any National Railways v. NLRC, GR No. 81231,
order decision or award of a Labor Arbiter. September 19, 1989).
However, a Motion for Reconsideration of a
Labor Arbiters decision award or order which Manner of Execution May be Appealed
has all the elements of an appeal may be treated  Finality of judgment becomes a fact upon the
as appeal. 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
4. Only one Motion for Reconsideration of the a writ of execution.
decision, award or order of the commission in  There is a big difference if, what is sought to be
cases appealed before it is allowed. 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
Procedure on Cases Originally Filed With The Labor longer be challenged, there is no question either
Arbiter that is must be enforced in accordance with its
terms and conditions. The correctness of the
Labor Arbiter execution of the decision and to consider
(no MR) supervening events that may affect such
execution (Abbot v. NLRC, GR No. L-65173,
 October 27, 1986).

Appeal to the NLRC Division appeal from NLRC to the Remedies of a Third Party Whose Property Has
Sec of Labor abolished under P.D. 1391) been wrongfully levied to enforce a decision
(Cumulative)
 1. File a third-party claim with the sheriff of the
Labor Arbiter, and
Court of Appeals (Certiorari under Rule 65) 2. Action for damages
OR
Supreme Court (Petition for Review under Rule 45) Independent reivindicatory action (Section 16,
Rule 37 of the Rules of Court)
RTC injunction against NLRC  The parties may, by agreement, settle their
Generally, not available. However, the general rule differences by submitting their case to a
that no court has the power to interfere by injunction voluntary arbitrator rather than taking the case to
with judgments of another court with the BLR
concurrent/coordinate jurisdiction applies ONLY
when no third party complaint is involved (Ibid.). E.O. 292 or the 1987 Administrative Code
Therefore, if the property under levy does not belong provides for the current functions and authority of the
to the judgment debtor in the NLRC case, it could BLR:
bot be validly levied upon by the sheriff for the
satisfaction of the judgment therein. If the third party Sec. 16. Bureau of Labor Relations THE BLR shall:
claimant does not involve nor grows out of a labor 1. set policies, standards, and procedures on the
dispute, a separate action for injunctive relief against registration and supervision of legitimate labor
such levy may be maintained in court (Co Tuan et. union activities including denial cancellation and
al. v. NLRC and CLUP, GR No. 117232, April 22, revocation of labor union permits.
1998). 2. set policies, standards and procedures relating
to collective bargaining agreements and the
TITLE THREE: BUREAU OF LABOR RELATIONS examination of financial records of accounts of
labor organizations to determine compliance
Article 226: Bureau of Labor Relations with relevant laws
3. provide proper orientation to workers on their
Absorption by NCMB schemes and projects for improvement of the
standards of living of workers and their families.
 Pursuant to E.O. 126, the National Conciliation
and Medication Board (NCMB) has absorbed the Intra-Union Disputes – refers to any conflict
conciliation, mediation and voluntary arbitration between and among union members, including
functions of the BLR. grievances arising from any violation of the rights
and conditions of membership, violation of or
 THE BLR functions, as it now stands, are disagreement over any provision of the union’s
confined largely for union matters, collective constitution and by-laws , or disputes arising from
bargaining and labor education. chartering or affiliation.

 Jurisdiction over labor-management problems or Inter-Union Disputes – refers to any conflict


disputes is also exercised by other offices such between and among legitimate labor organizations
as the DOLE regional offices, the Office of the involving representation questions for purposes of
Secretary of Labor, NLRC, POEA, OWWA, SSS- collective bargaining or to any other conflict or
ECC, the regional wage and productivity boards, dispute between legitimate labor organizations
NWPC, and even the regular courts over intra- based on any violations of their rights as labor
corporate disputes. organizations.

Med-Arbiter – an officer in the regional office or Coverage of Inter/Intra- Union Disputes (Sec. 1,
bureau authorized to hear, conciliate and decide Rule XI, D.O. 40-03)
representation cases or assist in the disposition of 1. Cancellation of registration of a labor
intra or inter-union disputes. organization filed by its members or by any other
labor organization;
Exclusive and Original Jurisdiction of The BLR 2. Conduct of election of union and worker’s
To act at its own initiative or upon the request of association officers/nullification of election of
either or both parties on all: union and worker’s association officers;
1. INTRA-union conflicts; 3. Audit/accounts examination of union or worker’s
2. INTER-union conflicts; and association funds
3. Other related labor relations disputes. 4. De-registration of CBA
5. Validity/invalidity of union affiliation or
Note: E.O. 251 OF 1987 removed from the disaffiliation
jurisdiction of the BLR “all” labor-management 6. Validity/ invalidity of acceptance/non-acceptance
disputes. The effect of E.O. 251 is to transfer to the for union membership
NCMB the mediation, conciliation, and arbitration 7. Validity/ invalidity of impeachment/ expulsion of
functions of the BLR. union and worker’s association officers
8. Validity/invalidity of voluntary recognition
9. Opposition to application for union and CBA 6. action of the administrative agency is patently
registration illegal, arbitrary and oppressive
10. Violations of or disagreements over any 7. issue is purely a question of law;
provision in a union or worker’s association 8. where the administrative agency had already
constitution and by-laws; prejudged the case; and
11. Disagreements over chartering or registration of 9. where the administrative agency was practically
labor organizations and CBAs; given the opportunity to act on the case but it did
12. Violations of the rights and conditions of union or not.
worker’s association membership
13. Violations of the rights of legitimate labor Effects of Filing or Pendency of Inter/intra-union
organizations, except interpretation of CBAs; Dispute and other Labor Relations Disputes (Sec 3,
and Rule XI, DO 40-03)
14. Such other disputes or conflicts involving the 1. The rights, relationships and obligations of the
rights to self-organization, union membership party-litigants against each other and other
and collective bargaining parties-in-interest prior to the institution of the
a. between and among legitimate labor petition shall continue to remain during the
organization; and pendency of the petition and until the date of
b. between and among members of a finality of the decision rendered therein.
union or worker’s association. Thereafter, the rights, relationships and
obligations of the party-litigants against each
Other Related Labor Relations Disputes (Sec. 2, Rule other and other parties-in-interest shall be
XI D.O. 40-03) governed by the decision so ordered.
Shall include any conflict between a labor organization 2. The filing or pendency of any inter/intra-union
and the employer or any individual, entity or group that is disputes is not a prejudicial question to any
not a labor organization or worker’s association. This petition for certification election and shall not be
includes; a ground for the dismissal of a petition for
1. cancellation of registration of unions and certification election or suspension of
worker’s association and proceedings for certification election.
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 Modes of Appeal in Intra/Inter-Union Disputes (Rule
should be signed by at least 30% of the membership of XI, D.O. 40-03)
the union.
HOW (formal 1. Under oath
B. Involving a Member only requirements) 2. Consist of a
In such case, only the affected member may file the memorandum of
complaint. Redress must first be sought within the union appeal
itself in accordance with its constitution and by laws 3. Based on either of the
EXCEPT under any of the following circumstances: following grounds:
1. Futility of intra-union remedies; a. Grave abuse of
2. improper expulsion procedure; discretion
3. undue delay in appeal as to constitute b. Gross violation of the
substantial injustice; Rules
4. the action is for damages 4. With supporting
5. lack of jurisdiction of the investigating body 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 Options when compromise agreement is violated.
2. must be contrary to law, morals or public policy; 1. enforce compromise by writ of execution; or
3. must be reasonable; and 2. regard it as rescinded and insist upon original
4. must be approved by the authority before whom demand.
the case is pending (see discussion on Article
221 – approval of Labor Arbiter of an amicable Requirements of a Valid Quitclaim
settlement in a case before him) 1. The quitclaim must be voluntary arrived at by the
parties;
Formal Requirements 2. It must be with the assistance of the Bureau of
1. in writing; and Labor Standards, Bureau of Labor Relations or
2. signed in the present of the regional director or any representative of the DOLE; and
his duly authorized representative. (Sec. 8, Rule 3. The consideration must be reasonable (required
II of the Rules on Disposition of Labor Standards only when entered without the assistance of
Cases in the Regional Offices) DOLE).

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

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 economic provisions with specific termination
certification election (Contract-Bar Rule will not dates when renegotiated and signed within six (6)
apply in the absence of registration). (See notes months from their termination or expiration
under Arts. 253, 253-A and 256). become retroactively effective the day after their
expiration if beyond six (6) months, the effectivity
Procedure for Registration will depend upon the agreement of the parties
1. Submission of copies of the CBA to the Bureau of (See discussion under Art. 256).
Labor Relations or the regional offices of DOLE
within 30 days from execution, accompanied by Requisites for Contract-Bar Rule
the following: 1. The agreement is existing, i.e, the parties
a. Verified proof of posting in two have duly executed it in conformity with the
conspicuous places in the place of work; necessary formalities;
and 2. It was ratified by the union membership
b. Verified proof of ratification by the 3. It is adequate for it contains substantial
majority of all the workers in the terms and conditions of employment
bargaining unit. 4. It encompasses the employees in the
appropriate bargaining unit
2. Action upon the application for registration within 5. It was not prematurely extended, the CBA
five (5) calendar days from receipt thereof was not hastily entered into (doctrine of
3. The regional office shall furnish the BLR with a premature extension does not bar a
copy of the CBA within five (5) days from its certification election);
submission 6. It is for a definite period
4. The BLR or regional office shall assess the 7. No schism or mass disaffiliation affects the
employer for every CBA, a registration fee of not contracting union during the lifetime of the
less than P1,000.00 or any amount deemed agreement
appropriate by the Secretary of Labor 8. The contracting union is not defunct
5. Issuance of Certificate of Registration. 9. The contracting union is not company-
dominated (see discussion in Aets. 256-259
Note: Registration of the CBA is not a requisite for its Petition for Certification Election).
validity.
Article 223: Privileged Communication
 The certification of the CBA by the BLR is not
required to put a stamp of validity to such Privilege Communication – any statement of such
contract. Once it is duly entered into and signed privacy that the law exempts the person receiving
by the parties, a CBA becomes effective as the information from the duty to disclose it.
between the parties regardless of whether or not
the same has been certifies by the BLR (Liberty Not Available as Evidence
Flour Mills Employees v. LFM Inc., GR Nos.  Information and statements made at
58768-70, December 29, 1989). conciliation proceedings shall be treated as
privileged communication and shall not be used
Article 232: Prohibition on Certification Election as evidence in the Commission.
 Conciliators and similar officials may not testify
Contract-Bar Rule: While a valid registered CBA is in an y court or body regarding any matters
subsisting for a fixed period of 5 years, the Bureau is taken up at conciliation proceedings conducted
not allowed to hold an election contesting the majority by them.
status of the incumbent union EXCEPT during the
sixty (60) day-period immediately prior to its TITLE FOUR: LABOR ORGANIZATIONS
expiration, which period is called the freedom period.
Note: In the absence of such timely notice or filing of Chapter 1: Registration and Cancellation
petition, the contract executed during the automatic
renewal period is a bar to certification election. Article 234: Requirements of Registration
 There shall be no amendment, alteration, or
termination of any of the provisions of the CBA Principle of Agency Applied
except to give notice of one party’s intention to 1. Principal employees
amend, alter and terminate the provisions within 2. Agent local/chapter
the freedom period. 3. Agent of agent federation
 Economic provisions of the CBA shall be Purpose of Formation of Labor Unions: for
renegotiated not later than three (3) years. The 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 Definition
Any union or association of employees in the private
sector which exists in whole or in part for the purpose of
Labor Organization collective bargaining or of dealing with employers
concerning terms and conditions of employment (D.O. 40-
03)

Union 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
Legitimate Labor Organization or Labor Union
true ONLY of a union that has won in certification election
or has been voluntarily recognized by the employer (see
exclusive bargaining representative below).

Independent Union

Legitimate labor union duly recognized or certified as the


Exclusive Bargaining Representative
sole and exclusive bargaining representative or agent of
all the employees in a bargaining unit

Worker’s Association Association of workers organized for the mutual legitimate


purpose other than collective bargaining

Association of workers organized for mutual aid and


Legitimate Worker’s ASsociation
protection of its members or for any legitimate purpose
other than collective bargaining registered with the DOLE

Classification of Labor Organization


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

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 with
national union through issuance of a charter.
REGIONAL OFFICE where union operates:
Revocation of Charter by the Federation – by (processed by Labor Relations Division)
serving the local/chapter a verified notice of
revocation, copy furnished the Bureau on the
ground of disloyalty or such other grounds as may Bureau of Labor Relations (if denied by Regional
be specified in its constitution or by-laws. 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 Unregistered
By signing a contract of affiliation 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
How to Affiliate
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.
Would not affect its being a legitimate Upon severance, it would cease to be a
labor organization and therefore it legitimate labor organization and would
would continue to have legal no longer have legal personality and
personality and to possess all the rights the rights and privileges granted by law
and privileges of a legitimate labor to legitimate organization, unless the
Effect of Disaffiliation to the Union
organization. local chapter is covered by a duly
(local)
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.
An existing CBA would continue to be The CBA would continue to be valid.
valid as the labor organization can The local chapter will not lose its
continue administering the CBA. personality until the expiration of the
Effect of Disaffiliation to the CBA
CBA. After the CBA expires, the local
union loses its personality, unless it
registers anew.
Labor organization is entitled to the Union dues may no longer be collected
union dues and not the federation from as there would no longer be any labor
which the labor organization union that is allowed to collect such
disaffiliated. union dues from the employees.
Entitlement to Union Dues After
Disaffiliation Note: Follow the principle of agency
between federation and local
Principal – employees
Agent – local/ chapter
Agent of agent - federation
Modes of Appeal Note: Take note of the cancellation proceedings if
Denial or Cancellation by: violation is [d] and [j] of Art. 239, LC.
A. REGIONAL OFFICE
1. Transmit records within 24 hours from receipt of For:
Memo of Appeal 1. Federations
2. BUREAU decides within 20 days from receipt of 2. National or Industry unions
records. 3. Trade union center
3. COURT OF APPEALS – Rule 65
B. BUREAU  Where to File
1. Transmit records within 24 hours from receipt of Bureau Director (30 days to decide)
Memo of appeal
2. SEC. OF DOLE decides within 20 days from receipt  Who May File
of records Only the members of the labor organization
3. COURT OF APPEALS – Rule 65 concerned if grounds are actions involving
violations of Art. 241, subject to the 30% rule.
Note: Appeal by memo of appeal within 10 days from
receipt of notice. Effect of Cancellation of Registration in the Course of
Proceedings
Grounds Where a labor union is a party in a proceeding and later it
1. Grave abuse of discretion loses its registrations permit in the course or during the
2. Violation of rules as amended pendency of the case, such union may continue as a
party without need of substitution of parties, subject
Article 238: Cancellation of Registration however to the understanding that whatever decision may
be rendered therein will be binding only upon those
The certificate of registration of any legitimate labor members of the union who have not signified their desire
organization, whether national or local, may be cancelled to withdraw from the case before its trial and decision on
by the Bureau, after due hearing, only the grounds the merits (Principle of Agency applied-the employees are
specified in Article 239. (as amended by R.A. 9481) the principals, and the labor organization is merely an
agent of the former, consequently, the cancellation of the
Article 238-A: Effect of a Petition for Cancellation of union’s registration would not deprive the consenting
Registration (new provision inserted by R.A. 9481) member employees of their right to continue the case as
1. A petition for cancellation of union registration they are the considered as the principals).
shall not suspend the proceedings for certification
election nor shall it prevent the filing of a petition Article 239: Grounds for Cancellation of Union
for certification election. Registration (as amended by R.A. 9481)
2. In case of cancellation, nothing herein shall
restrict the right of the union to seek just and Grounds
equitable remedies in the appropriate courts. 1. Misrepresentation false statement or fraud in
connection with the adoption or ratification of the
For: constitution and by-laws or amendments thereto,
1. Legitimate individual labor union the minutes of ratification and the list of members
2. Chartered local who took part in the ratification;
3. Worker’s association 2. Misrepresentation, falise statement or fraud in
connection with the election of officers, minutes
 Where to File of the election of officers and the list of voters,
Regional Director who has jurisdiction over and
the place where respondent principally 3. Voluntary dissolution by the members.
operates (30 days to decide).
Note: A pronouncement as to the illegality of the strike is
 Who May File not within the meaning of Art. 239 of the Code, which
Any party-in-interest, if ground is: provides for the grounds for cancellation of union
1. Failure to comply with any of the registration.
requirements under Arts. 234, 237 and
238, LC.
2. Violation of any provision under Art. 239,
LC.
Article 239-A: Voluntary Cancellation of Registration of the union or any member or members specifically
(new provision inserted by R.A. 9481) concerned may report such violation to the Bureau.

The registration of a legitimate labor organization may be Union Membership


cancelled by the organization itself PROVIDED: Any employee, whether employed for a definite period or
1. At least 2/3 of its general membership votes, in a not, shall, beginning on his first day of service, be
meeting duly called for that purpose to dissolve considered an employee for purpose of union
the organization; membership (Art 277).
2. An application to cancel registration is submitted
by the board of the organization, attested to by Note: The relationship of the union and members is
the president thereof. governed by their mutual agreement, the terms and
conditions of which are set forth in the union constitution
Note: Failure to submit a reportorial requirements is no and by laws and binding on the members as weel as the
longer a ground for cancellation but shall subject the organization itself. (Poquiz, 2006, quoting Ang Malayang
erring officers or members to suspension, expulsion from Manggagawa ng Ang Tibay Enterprises, et al. v. Ang
membership, or any appropriate penalty. (Art. 242-A, new Tibay, et al., GR No. L-8259, December 23, 1957).
provision inserted by R.A. 9481)
Who are prohibited from becoming members/officers
Chapter 2: Rights and Conditions of Membership in a of a labor organization (see noted under Art 243 on
Labor Organization persons who are not granted the right to self-
organization)
Article 241: Rights and Conditions of Membership on 1. Non-employees (Art. 241[c]);
a Labor Organization 2. Subversives or those engaged in subversive
activities (Art. 241 [e]); and
General Groupings of the Rights of the Union 3. Persons who have been convicted of a crime
Members (DIMP) involving moral turpitude shall not be eligible for
1. Deliberative and Decision-making Right- the right election as union officer or for appointment to any
to participate in deliberations on major policy position in the union (Art. 241 [f]).
questions and decide by secret ballot.
2. Right to Information- the right to be informed Note: In general, a union is free to select its own
about: members, and no persons has an absolute right to
a. the organization’s constitution and by- membership in a union.
laws;
b. the collective bargaining agreement, and
labor laws. Limitation (See notes on union security
3. Rights Over Money Matters – the rights of the arrangements under Art. 248)
members:
a. against imposition of excessive fees; 1. The labor organization cannot compel employees
b. right against unauthorized collection of to become members of their labor organization if
contributions or unauthorized they are already member of rival union.
disbursements; 2. The persons mentioned in Art. 241[e]
c. to require adequate records of income (subversives) of the Labor Code are prohibited
and expenses; from becoming a member of a labor organization.
d. to access financial records; 3. The members of religious organization whose
e. to vote on officer’s compensation religion forbids membership in labor organization
f. to vote on special assessment; could not be compelled into union membership.
g. to be deducted a special assessment
only with the member’s written
authorization. Levy of Special Assessments or Extraordinary Fees
4. Political right – the right to vote and be voted for, (art. 241[n])
subject to lawful provisions on qualifications and Requirements (RAMM)
disqualifications.
1. There must be a written resolution
Note: Any violation of the above rights and conditions of 2. The resolution must have been approved by a
membership shall be a gorund for cancellation of uinion majority of all the members; and
registration or expulsion of an officer from office, 3. The approval must be at a general membership
whichever is appropriate. At least 30% of all the members 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.
1. Schedule of vacation and other leaves;
Forming, Joining, or Assisting Employees’ 2. Work assignment of pregnant women;
Organization 3. Personnel growth and development
General Rule: All government employees can form, join 4. Communication system – lateral and vertical
or assist employees’ organizations of their own choosing 5. Provision for protection and safety
for the furtherance and protection of their interests. They 6. Provision for facilities for handicapped personnel;
can also form labor-management committees, work 7. Provision for first-aid medical services for married
councils and other forms of workers’ participation women;
schemes to achieve the same objectives (Sec. 1, E.O. 8. Annual medical/ physical examination; and
180) 9. Recreational, social, athletic and cultural activities
and facilities (Rules Implementing E.O. 180).
Exceptions
1. High-level employees whose functions are The following are considered NOT negotiable
normally considered as policy-making or 1. Those which require appropriation of funds; such
managerial or whose duties are of a highly as:
confidential nature (Sec. 3, E.O. 180); and a. increase in salary emoluments and
2. Members of the Armed Forces of the Philippines b. other allowance not presently provided
including police officers, policemen, firemen, and for by law;
jail guards (Sec 4, E.O. 180) c. facilities requiring capital outlays
d. car plan
e. provident fund
Note: employees of government corporations f. special hospitalization, medical and
incorporated under the Corporation Code and registered dental services;
with SEC are governed by the Labor Code not by E.O. g. rice/ sugar/ other subsidies;
180. they are allowed to organize for: h. travel expenses; and
1. they are not involved in public service; and i. increase in retirement benefits
2. terms of employment are not fixed by law. 2. Those that involve the exercise of management
prerogatives, such as:
Protection of the Right to Organize a. appointments
1. Government employees shall not be b. promotion
discriminated against by reason of their c. assignment/ details
membership in employees’ organizations or d. reclassification/ upgrading of position
participation in the normal activities of their e. revision of compensation structure
organization (Sec. 5, E.O 180) f. penalties imposed as a result of
2. Their employment shall not be subject to the disciplinary actions;
condition that they shall not join or shall relinquish g. selection of personnel to attend seminar,
their membership in the employees’ organizations trainings, study grants
(Ibid). h. distribution of work load
3. Government authorities shall not interfere in the i. external communication linkages
establishment, functioning or administration of
government employees’ organizations through To sum up government employees covered by E.O. No.
acts designed to place such organizations under 180 may organize, even unionize, and negotiate
the control of government authority (Sec. 6, E.O. employment condition, not fixed by law but they cannot
180). strike. (Azucena, 2007).

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
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 3. Discriminate against, or
relations. The two criteria are cumulative, and 4. Unduly interfere with employees and
both must workers in their exercise of the right to
self-organization

Note: Any act intended to weaken or defeat the right is


be met if an employee is to be considered a regarded by law as an offense, which is technically called
confidential employee – e.g., the confidential “unfair labor practice.”
relationship must exist between the employee
and his supervisor, and the supervisor must TITLE SIX: UNFAIR LABOR PRACTICES
handle the prescribed responsibilities relating to
labor relations. As such, the rationale behind the Chapter 1: Concept
ineligibity of managerial employees to form, assist
or join a labor union equally applies to them. Article 247: Unfair Labor Practices
(PIDI v NLRC, GR No. 88957, June 25, 1992)
Under the doctrine of necessary implication, 1. Criminal offenses against the State;
confidential employees are similarly disqualified. 2. Violations of civil rights of both labor and
(NATU-Republic Planters Bank v. Torres, GR No. management;
93468, December 29, 1994). 3. Violate the constitutional right of workers and
employees to self-organization;
Note: The phrase “in the field of labor relations” is 4. Are inimical to the legitimate interests of both
important. It stresses labor nexus, i.e. confidentiality of labor and management, including their right to
the position is related or linked to labor relations matters. bargain collectively and otherwise deal with each
other in an atmosphere of freedom and mutual
 Access to information which is regarded by the respect;
employer to be confidential from the business 5. Disrupt industrial peace; and
standpoint, such as financial information or 6. Hinder the promotion of healthy and stable
technical trade secrets, WILL NOT render an labor-management relations and mutual respect
employee a confidential employee (SMC (unstable labor-management relations).
Supervisors and Exempt Union v. Hon.
Laguesma, et.al, GR No. 110399, August 15, Elements of Unfair Labor Practice
1997). 1. employer-employee relationship between the
offender and the offended; and
 Every managerial position is confidential because 2. act done is expressly defined in the Code as an
one does not become a manager without having act of unfair labor practice.
gained the confidence of the appointing authority.
But not every confidential employee is Note: Prohibited acts are all related to the workers’ self-
managerial, he may be a supervisory or even a organizational right and the observance of a CBA,
rank-and-file employee. except Art. 248 (f), dismissing or prejudicing an
employee for giving testimony under the Code.
Article 245-A: Effect of Inclusion as Members of
Employees outside the Bargaining Unit (new  1st element of ULP does not apply to yellow dog
provision inserted by R.A. 9481) condition

The inclusion as union members of employees outside  ULP has a technical meaning.
the bargaining unit shall NOT be a ground for the
cancellation of the registration of the union. Said  It is a practice unfair to labor, although the
employees are automatically deemed removed from the offender may either be an employer or a labor
list of membership of said union. organization.

Article 246: Non-Abridgment of the Right to Self  It refers to acts opposed to workers’ right to
Organization organize (Anti-unionism acts). Without this, the
act, no matter how unfair, is not ULP.
It shall be Unlawful for Any Person to (RCDI)
1. Restrain  It commonly connotes anti-unionism
2. Coerce
 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 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

original rank and salary remained undiminished) Company Unionism/Captive Unionism


Rubberworld Phils., v. NLRC, GR No. 75704, July 19, Considered as a ULP because the officers will be
1989. beholden to the employers and they will not look after the
interest of whom they represent.
2. Yellow Dog Condition
Forms
To require as a condition for employment that a person or a. Initiation of the Company Union idea by:
an employee shall not join a labor organization or shall 1. Outright formation by employer or his
withdraw from one to which he belongs. representatives;
2. Employee formation on outright demand or
Yellow Dog Contract – a promise exacted from workers influence by employer; and
as a condition of employment that they are not to belong 3. Managerially motivated formation by employees.
to, or attempts to foster, a union during their period of b. Financial Support to the Union by:
employment. It is null and void because: 1. Employer defrays union expenses;
2. Pays attorney’s fees to the attorney who drafted
1. It is contrary to public policy for it is tantamount to the Constitution or by laws of the union;
involuntary servitude. c. Employer Encouragement and Assistance
2. It is entered into without consideration for Immediately granting of exclusive recognition as
employees in waiving their right to self- bargaining agent without determining whether the
organization. union represents majority of the employees.
3. Employees are coerced to sign contracts d. Supervisory Assistance
disadvantageous to their family. Soliciting membership, permitting union activities
during work time or coercing employees to join
Note: one of the cases of ULP that may be the union by threats of dismissal or demotion.
committed in the absence of an E-E relationship
5. Discrimination
3. Contracting Out To discriminate in regard to wages, hours of work, and
To contract out services or functions being performed by other terms and conditions of employment in order to
union members when such will interfere with, restrain or encourage membership in any labor organization.
coerce employees in the exercise of their right to self-
organization. Test: whenever benefits or privileges given to one is not
given to the other under similar or identical conditions
Does Art. 248© mean that an employer cannot when directed to encourage or discourage union
contract out work? NO. Contracting out services membership.
is not ULP per se. It is ULP only when the
following conditions exist: Three Components of Discrimination
1. the service contracted out are being a. It prohibits discrimination in terms and conditions of
performed by union members; and employment in order to encourage or discourage
2. such contracting out interferes with membership in the union;
restrains, or coerce employees in the b. It gives validity to union security agreements; and
exercise of their right to self organization. c. It allows an agency shop arrangement whereby
HOWEVER, when the contracting out is being agency fees may be collected from non-union members.
done for business reasons such as decline—in—
business, inadequacy of equipment or to reduce 6. Discrimination because of Testimony
cost, then it is a valid exercise of management To dismiss, discharge or otherwise prejudice or
prerogative. discriminate against an employee for having given or
being about to give testimony under this Code (the only
Runway Shop – an industrial plan moved by its owners ULP act which is not anti-unionism).
from one location to another to escape labor regulations
or state laws or to discriminate against employees at the Subject Matter of Testimony can be anything under the
old plant because of their union activities. Code.
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-

 What is ULP is the employer’s retaliatory act Organization motive must be proved because it is a
regardless of the subject of employee’s complaint definitional element of ULP.
or testimony. In effect, if a retaliatory act is done
under Art. 118, the consequence is ULP under Discrimination For or Against Union Membership
Art. 248 (f) Mabeza v. NLRC, GR No. 118506, Test of Discrimination: that the discharge of an
April 18, 1997). employee was motivated by his union activity. Such
inference must be based on evidence, direct or
7. Violation of Duty to Bargain circumstantial, not upon mere suspicion.
To violate the duty to bargain collectively as prescribed by
this Code. Constructive Discharge – ULP where employer
prohibits employees from exercising their rights under the
The following acts are held to constitute refusal to Code, on pain of discharge, and the employee quits as a
bargain: result of the prohibition.
1. Alleging that the union is irresponsible;
2. Transferring operation to elude the union; (run- Principles of Union Security Clauses/Arrangements
away shop); 1. Protection – to shield union members from whimsical
and abusive exercise of management prerogatives.
Run-Away Shop – is an unfair labor practice of 2. Benefits – an additional membership will insure
management which usually takes place by effecting the additional source of income to the union in the form of
transfer of ownership, the plant itself, or its equipment, or union dues and special assessment.
by temporarily closing its business purposely to bust the 3. Self-preservation – it strengthens the union through
union or to evade the payment of legitimate obligations. selective acceptance of new members on the basis of
1. Delaying negotiations by discussing unrelated commitment and loyalty.
matters;
2. Refusal to accept requests to bargain; Different Kinds of Union Security Arrangements
3. Rejecting a union’s offer to prove it’s majority (Exceptions to ULP on Interference on the
claim; Employees' right to self organizations)
4. Shutdown to avoid bargaining; and 1. Closed-Shop Agreement
5. Engaging in surface bargaining. The employer undertakes not to employ any individual
who is not a member of the contracting union and the
Surface Bargaining – going through the motions of said individual once employed must, for the duration
negotiating without any legal intent to reach an of the agreement, remain a member of the union in
agreement. It involves the question of whether or not the good standing as a condition for continued
employer’s conduct demonstrates an unwillingness to employment.
bargain in good faith or is merely hard bargaining Does not have any retroactivity.
(Standard Chartered Bank v. Hon. Confesor, GR No. Applies only to new hires.
114974, June 2004).
Exceptions
8. Paid Negotiation a. Employees belonging to any religious sect which
To pay negotiation or attorney’s fees to the union or its prohibit affiliation of their members with any labor
officers or agents as part of the settlement of any issue in organization are not covered by such agreement.
collective bargaining or any other disputes. The free exercise of religious belief if superior to
contract rights (Victoriano v. Elizalde Rope Workers,
9. Violation of CBA No. L-25246, September 12, 1974).
The violation must be gross flagrant and/or malicious b. Members of the rival union are not covered by such
refusal to comply with the economic provision of the CBA arrangement.
(Art. 261). c. Confidential Employees excluded from rank and file
bargaining unit.
Note: “Grossly violate” phrase is an amendment by R.A. d. Employees excluded by express term of the
6715. Hence, if the violation is not gross, it is not ULP but agreement.
a grievance under the CBA.
representing all the employees in the appropriate
bargaining unit.

Semi-Closed Shop Agreement – the


prospective employee must be a member of the Requirement for a valid Termination by the Employer of
union as a condition of employment and has no the Services of an Employee Pursuant to a Union or
requirement for the employee to remain as Closed-Shop Agreement
member of the contracting union in good standing 1. The agreement must be expressed in a clear and
as a condition for continued employment. unequivocal way so as not to leave room for
interpretation because it is a limitation to the
2. Union Shop Agreement exercise of the right to self-organization.
Stipulation whereby any person can be employed by 2. Any doubt must be resolved against the
the employer but once employed such employee existence of a closed-shop agreement.
must, within a specific period, become a member of 3. The agreement can only have prospective
the contracting union and remain as such in good application and cannot be applied retroactively.
standing for continued employment for the duration of 4. It can only be exercised by giving the employee
the CBA. (Take note of the exceptions in the his right to due process
preceding number.) a. The employer has the right to satisfy
himself that there are sufficient bases for
3. Maintenance of Membership Shop Agreement the request of the union
The agreement DOES NOT require non- b. The termination of the services of the
members to join the contracting union BUT employee is not automatic upon the
provides that those who are members thereof at request of the union
the time of the execution of the CBA and those 5. It cannot be applied to employees who are
who may thereafter, on their own volition, become already members of the rival union or to the
members must for the duration of the agreement employees based on their religious beliefs.
maintain their membership in good standing as a
condition for continued employment in the Chapter 3: Unfair Labor Practices of Labor
company for the duration of the CBA. Organizations

4. Preferential Shop Agreement Article 249: Unfair Labor Practices of Labor


An agreement whereby the employer merely agrees Organizations
to give preference to the members of the bargaining
union in hiring, promotion or filing vacancies and 1. To restrain or coerce employees in the exercise
retention in case of lay-off. The employer has the of their right to self-organization. However, a
right to hire from the open market if union members labor organization shall have the right to
are not available. prescribe its own rules with respect to the
acquisition or retention of membership;
5. Agency Shop Agreement
An agreement whereby employees must either join Note: INTERFERENCE by labor organization is not
the union or pay to the union as exclusive bargaining ULP as long as the interference does not amount to
agent a sum equal to that paid by the members. restraint or coercion.

Note: This is directed against “FREE RIDER” 2. To cause or attempt to cause an employer to
employees who benefit from union activities without discriminate against an employee, including
contributing support to the union, to prevent a discrimination against an employee with respect
situation of non-union members enriching themselves to whom membership in such organization has
at the expense of union members. been denied or to terminate an employee on any
ground other than the usual terms and conditions
 Employee members of another rival union are not under which membership or continuation of
considered free riders since when the union membership is made available to other members;
(agent) bids to be the bargaining agent, it
voluntarily assumed the responsibility of 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 determined by the evidence presented by the union
closed-shop agreement. (Manila Mandarin as to its economic demands. Thus, if the union
Employees Union v. NLRC, No. L-76989, September requires exaggerated or unreasonable economic
29, 1987) demands it is guilty of ULP (Standard

3. To violate the duty or refuse to bargain Chartered Bank v. Hon. Confessor, GR No. 114974,
collectively with the employer provided that it is June 16 2004).
the representative of the employees;
TITLE SEVEN: COLLECTIVE BARGAINING AND
4. To cause or attempt to cause an employer to pay ADMINISTRATION OF AGREEMENTS
or deliver or agree to pay or deliver any money or
other things of value, in the nature of an exaction, Article 250: Procedure in Collective Bargaining
for services which are not performed or not to be Agreement
performed, including the demand for a fee for
union negotiations. Collective Bargaining – obligation to meet and
convene promptly and expeditiously in good faith for
Featherbedding (make-work activities) – refers to the the purpose of negotiating an agreement with respect
practice of the union or its agents in causing or to wages, hours of work and all other terms and
attempting to cause an employer to pay or deliver or conditions of employment including proposals for
agree to pay or deliver money or other things of adjusting any grievances or questions arising under
value, in the nature of exaction, for services which are such agreement and executing a contract
not performed or not to be performed, as when a incorporating such agreements if requested by either
union demands that the employer maintain personnel party but such duty does not compel any party to
in excess of the latter’s requirements. agree to a proposal or to make any concession. (Art.
252)
Note: It is not featherbedding if the work is performed
no matter how unnecessary or useless it may be. General Rule: No court or administrative agency or
official shall have the power to set or fix wages, rates
5. To ask for or accept negotiation or attorney’s fees of pay, hours of work or other terms and conditions of
from employers as part of the settlement of any employment EXCEPT as otherwise provided under
issue in collective bargaining or any other the Labor Code.
dispute; or
Purpose: to encourage a truly democratic method of
6. To grossly violate a collective bargaining regulating the relations between the employers and
agreement. employees by means of agreements freely entered
into through collective bargaining.
Persons Civilly Liable for ULP:
1. Officers and agents of employer; Exceptions:
2. Labor organization, officers and agents; and 1. National Wages and Productivity Commission
3. Agents and officers who participated or and Regional Tripartie Wages and Productivity
authorized or ratified the act. Board – as to wage fixing (Arts. 99 and 122)
2. National Conciliation and Mediation Board and
Sweetheart Doctrine – considers it ULP for a labor the National Labor Relations Commission-as to
organization to ask for or accept negotiation or wage distortions (Art. 124)
attorney’s fees from the employer in settling a 3. Secretary of Labor and Employment and
bargaining issue or dispute. President of the Philippines-as to certification and
assumption powers over labor disputes (Art. 263
Resulting CBA is considered a “sweetheart (g))
contract”, a CBA that does not substantially improve
the employees’ wages and benefits and whose Jurisdictional Preconditions
benefits are far below those that are provided by law. 1. possession of the status of majority
representation by the employees’ representative
Blue-sky Bargaining is defined as making in accordance with any of the means of selection
exaggerated or unreasonable proposals. Whether or or designation provided for by the Labor Code;
not the union is engaged in blue sky bargaining is
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 4. there is no request for bargaining;
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 5. union seeks recognition for an inappropriately


1. The duty to bargain collectively does not compel any large unit;
party to: 6. union seeks to represent some persons who
a. agree to a proposal; are excluded from the Code;
b. make a concession; or 7. the rank-and-file unit includes supervisors or
c. make room for “Take it or Leave it” posture. inappropriate otherwise;
2. The parties cannot stipulate terms and conditions of 8. the demand for recognition and bargaining is
employment which are below the minimum requirements made within the year following a certification
prescribed by law. election in which the clear choice was “no
union” and no ad interim significant change
B. Where CBA Exists (See Notes Under Art. 253) has taken place in the unit; and
9. the union makes unlawful bargaining
Note: Collective bargaining does not end with the demands.
execution of the agreement. It is a continuous process.
The duty to bargain imposes on the parties during the Bargaining to the Point of Deadlock or Impasse
term of their agreement the mutual obligation to meet and 1. Over a mandatory subject – insist on bargaining
confer promptly and expeditiously and in good faith for the and will not be construed as bargaining in bad
purpose of adjusting any grievances or question arising faith.
under such agreement (Republic Savings Bank v. CIR,
No. L-20303, Sept. 27, 1967). Reason: duty to bargain requires meeting and
convening on the terms and conditions of
Four Forms of ULP in Bargaining: employment but does not require assent to the
1. failure or refusal to meet and convene; other party’s proposals.
2. evading the mandatory subjects of bargaining;
3. bad faith in bargaining (boulwarism), including failure 2. Over a non-mandatory subject – party may not
or refusal to execute the CBA, if requested; and insist on bargaining to the point of impasse,
4. gross violation of the CBA. otherwise, he will be construed as bargaining in
bad faith.
Note: Violations of the collective bargaining agreement,
expect those which are gross in character, shall no longer Example: The employer’s insistence that the
be treated as an unfair labor practice but as a grievance union should change its negotiator before
under the Collective Bargaining Agreement. (Art. 261, bargaining can proceed to the employees’ wage
Labor Code; Silva v. NLRC, 274 SCRA 159). and benefits is an instance of bad faith bargaining
because the composition of the negotiating panel
Economic Exigencies Do NOT Justify Refusal to Bargain is not a mandatory subject of bargaining.
An employer has been held not guilty of refusal to bargain
by adamantly rejecting the union’s econothic demands Hence, if Party A insists on first setting a non-
where he is OPERATING at a loss on a low profit margin, mandatory subject before tackling a mandatory
or in a depressed industry as long as he continues to subject, Party B may complain that Party A’s
negotiate. But financial hardship constitutes no excuse posture is just an excuse to avoid bargaining on
for refusing to bargain collectively. the mandatory, essential subjects of bargaining;
thus, Party B can charge that Party A is
Acts NOT Deemed Refusal to Bargain bargaining in bad faith or is evading bargaining
1. adoption of an adamant bargaining position in on terms and conditions of employment – in
good faith; short, Party A is committing ULP.
2. refusal to bargain over demands for
commission of ULP; Note: What the rule forbids is the posture of
3. refusal to bargain during period of illegal making settlement of a non-mandatory subject a
strike;
pre-condition to the discussion or settlement of a negotiable/non-representational aspect of the
mandatory subject. CBA – see discussion on Art. 253)
3. a petition for certification election may be
Deadlock – synonymous with impasse or a filed.
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 Article 253-A: Terms of a Collective Bargaining
Mediation Board (NCMB) to intervene for the Agreement (Contract-Bar Rule)
purpose of conducting conciliation preventive
mediation; Duration of the CBA
2. Refer the matter for voluntary arbitration or With respect to the representation aspect, the same
compulsory arbitration; lasts for 5 years.
3. Declare a strike or lockout upon compliance With respect to other provisions (economic and non-
of the legal requirements. This is the remedy economic), the same may last for a maximum period
of last resort. of 3 years after the execution of the CBA.

Article 253: Duty to Bargain Collectively When there Economics Provisions May Include:
exists a Collective Bargaining Agreement 1. Wages
2. Family planning
General Rule: When there is an existing CBA, the duty 3. Effectivity of the agreement
bargain collectively shall also mean that neither party 4. Other terms and conditions of employment
shall TERMINATE nor MODIFY such agreement during its
lifetime. It is the duty of both parties to: Non-Economic Provisions May Include:
1. keep the status quo; and 1. Coverage of the bargaining unit
2. to continue in the full force and effect the 2. Union Security clauses
terms and conditions of the existing CBA. 3. Management prerogatives and/or
rights/responsibilities of employees
Exception: 4. Grievance machinery and voluntary arbitration
During the 60-day period prior to its expiration, upon 5. No strike no lock-out provision
service of a written notice of a party’s intention to
terminate or modify the same, a party may choose to Effectivity of Retroactivity of Other Economic
terminate or modify the non-representational aspect of the Provisions of the CBA
CBA only after the expiration of CBA of fixed duration. 1. If CBA is the very first for the bargaining unit, the
parties have to decide the CBA’s effectivity date.
Automatic Renewal Clause 2. Those made within 6 months after the date of
Art. 253 provides that the CBA shall remain effective and expiry of the CBA are subject to AUTOMATIC
enforceable even after the expiration of the period fixed RETROACTION to the day immediately following
by the parties as long as no new agreement is reached by such date of expiry.
them. 3. Example: CBA expired on December 31. New
CBA concluded on March 31. The effectivity date
What May be Done During the 60-Day Freedom is January 1.
Period 4. Those not made within 6 months, the parties may
1. A labor union may disaffiliate from the mother agree to the date of retroaction.
union to form a local or independent union
only during the 60-day freedom period  This rule applies ONLY if there is an
immediately preceding the expiration of the existing agreement. If there is no
CBA. (Take note of the limitation – see existing agreement, there is no
discussions registration of labor unions.) retroactive effect because the date
2. either party can serve a written notice to agreed upon shall be the start of the
terminate or modify the agreement at least 60 period of agreement.
days prior to its expiration period (on re-
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 the CBA except during the 60-day period
inserted by R.A. 9481) immediately prior to the expiration of the CBA.
 Requirements in order to invoke Contract-Bar
 In all cases, whether the petition for certification Rule:
election is filed by a employer or a legitimate labor 1. Agreement is in writing and signed by all
organization , the employer shall not be considered a contracting parties;
party thereto with a concomitant right to oppose a 2. it must contain the terms and conditions of
petition for certification election. employment;
 The employer’s participation in such proceedings 3. covered employees in an appropriate
shall be limited to: bargaining unit;
1. being notified or informed of petitions of such 4. it is for a reasonable period or duration;
nature; and 5. it must be ratified;
2. submitting the list of employees during the pre- 6. it must be registered with the Bureau; and
election conference should the Med-Arbiter act 7. the violation of the contract-bar rule or the
favorably on the petition existence of a duly registered CBA must be
specifically impleaded as a defense.
Rules Which Prevent the Holding of a Certification
Election Effect of an Invalid and Unregistered CBA
A. Contract Bar Rule There is no bar and therefore a certification election may
 While a valid and registered CBA of a fixed be held.
duration is subsisting, the BLR is not allowed to
hold an election contesting the majority status of Note: Registration of CBA only puts into effect the
the incumbent union during the five year term of Contract-Bar Rule but the CBA itself is valid and binding
even if unregistered.
continues to bind the employees up to is expiration
Exception to the Contract-Bar Rule date. They may, however, bargain for the shortening
The existence of a collective bargaining agreement will of said expiration date.
not bar certification election in the following instances:  The employees cannot revoke the validly executed
1. The CBA is unregistered, i.e. not certified by the BLR collective bargaining contract with their employer by
or not registered by the Regional Office. the simple expedient of changing their bargaining
2. The CBA is inadequate or incomplete, i.e., it does not agent. The new agent must respect the contract
contain all the substantial demands on terms and (Benguet Consolidated, Inc. V. Employees’ and
conditions and leaves out matters which should have Workers’ Union-PAFLU, No. L-24711, April 30, 1968).
been stipulated where the stipulation becomes
sweetheart contract. Limitations as to its Application
3. DOCTRIN OF PREMATURE EXTENSION- the CBA It cannot be invoked to support the contention that a
was hastily entered into, i.e., the renewal or extension newly certified collective bargaining agent automatically
of the agreement was premature, frustrating the right assumes all the personal undertakings of the former
of the employees to petition for a certification election agent – like the “no strike clause” in the CBA executed by
at the proper time. the latter (ibid).
4. Withdrawal of affiliation from the contracting union
brought about by schism or mass disaffiliation B. Deadlock Bar Rule
5. Contract where the identity of the representative is in  A petition for certification election cannot be
doubt (ALU v. Ferrer-Calleja, Gr No. 85085, entertained if, before the filing of the petition for
November 6, 1989) certification election, a bargaining deadlock to
6. CBA entered into between the employer and the which an incumbent or certified bargaining agent
union during the pendency for certification election is a party, had been submitted to conciliation or
(Vassar Industries Employees Union v. Estrella, GR abitration or had become the subject of a valid
No. 46562, March 31, 1979). notice or strike or lockout.
7. CBA concluded between the employer and the union
(incumbent bargaining agent) is not a bar to a Deadlock – arises when there is an impasse, which
certification election filed by another union and said presupposes reasonable effort at good faith bargaining
CBA can be renegotiated at the option of the new which, despite noble intentions, did not conclude in an
bargaining agent (ATU v. Hon. Noriel, No. L- 48367, agreement between the parties.
January 16, 1979).
8. A CBA registered with falsified supporting documents Indications of a Genuine Deadlock
(Sec. 5[b], Rule XVI, Book V, Rules implementing the 1. The submission of the deadlock to a third party
Labor Code). conciliator or arbitrator; and
9. CBA was concluded in violation of an order enjoining 2. The deadlock is the subject of a valid notice of strike
the parties from entering into a CBA until the issue of or lockout.
representation is resolved; and
10. Petition is filed during the 60-day freedom period. C. Negotiation Bar Rule
 A petition for certification election cannot be
Successor-In-Interest Doctrine entertained if, before the filing of the petition for
When an employer with an existing CBA is succeeded by certification election, the duly recognized or
another employer, the successor-in-interest who is a certified union has commenced negotiations with
buyer in good faith has no liability to the employees in the employer in accordance with Art. 250 of the
continuing employment and the collective bargaining Labor Code.
agreement because these contracts are in personam.
D. Certification Year Rule
Except:  No petition for certification election may be filed
1. when the successor-in-interest expressly assumes within one year form the date of a valid
the obligation; certification, consent, or run-off election or from
2. the sale is a device to circumvent the obligation; or the date of voluntary recognition.
3. the sale or transfer is made in bad faith.
Examples of Bad Faith Bargaining
Substitutionary Doctrine 1. Surface Bargaining – occurs when employer
 It is where there occurs a shift in the employees’ constantly changes its positions over the agreement.
union allegiance after the execution of a collective 2. Boulwarism – occurs:
bargaining contract with the employer, the employees a. When the employer directly bargains with the
can change their agent (the labor union) but the employee disregarding the union.
collective bargaining contract which is still subsisting
 The aim was to deal with the Union  In a unionized company, Art. 255 allows an employee
through the employees, rather than with whether union member or not, to raise a grievance
the employees through the union. directly to the employer.
b. Employer submits its proposals and adopts a
“take it or leave it” stand. This is not Arbitration May be Initiated By:
negotiation because the “take it or leave it” 1. Submission Agreement – where the parties define the
stand implies threat disputes to be resolved; or
2. Demand or notice invoking a collective agreement
TITLE SEVEN-A: GRIEVANCE MACHINERY AND arbitration clause.
VOLUNTARY ARBITRATION (AS INCORPORATED BY
R.A. 6715) Distinguished from Mediation
A mediator is a disinterested 3rd party who helps settle
Article 260: Grievance Machinery and Voluntary disputes involving terms and conditions of a CBA. He is
Arbitration assigned and paid by the State and is not selected by the
parties. He renders no final and binding decision, but
Grievance Machinery – a mechanism for the adjustment merely suggests solutions.
of controversies or disputes arising from the interpretation
or implementation of the CBA and the interpretation or Effect of Merger and Consolidation
enforcement of company personnel policies.  Wiley Doctrine – It states that, a duty to arbitrate
arising from a collective bargaining agreement
Grievance – arises when a dispute or controversy arises survives the employer’s ceasing to do business as a
over the implementation or interpretation of a CBA or separate entity after its merger with a substantially
from the implementation or enforcement of company large corporation, so as to be binding on the larger
personnel policies, and either the union or the employer corporation, so as to be binding on the larger
invokes the grievance machinery provision for the corporation, where relevant similarity and continuity
adjustment or resolution of such dispute or controversy. of operations across the change in ownership is
evidenced by the wholesale transfer of smaller
Nature of Grievance Procedure: corporation’s employees to the larger corporation’s
 It is a “must” provision in any CBA and no collective plant.
agreement can be registered in the absence of such
procedure. Article 261: Jurisdiction of Voluntary Arbitrators or
 It is a part of the continuous process of collective Panel of Voluntary Arbitrators
bargaining intended to promote a friendly dialogue
between labor and management as a means of Arbitrable Disputes
maintaining industrial peace. 1. Contract-negotiation disputes – disputes as to terms
of CBA
Note: Waiver of grievance machinery procedure does not 2. Contract-interpretation disputes – disputes arising
amount to a relinquishment of employee’s right to avail of under an existing CBA, involving such matters as the
voluntary arbitration (Apalisok v. RPN, May 29, 2003) interpretation and application of the contract, or
alleged violation of its provisions.
Voluntary Arbitration – contractual proceedings where
parties to a dispute select a judge of their own choice and Jurisdiction of Voluntary Arbitrators
by consent submit their controversy to him for  Exclusive Original Jurisdiction Conferred By Law
determination. 1. All grievances arising from the interpretation of
the CBA;
Note: All grievances not settled within 7 days from the 2. those arising from the interpretation or
date of its submission to the grievance machinery shall enforcement of company personnel policies;
automatically be referred to voluntary arbitration 3. hear and decide wage distortion issued arising
prescribed in the CBA. from the application of any wage orders in
organized establishments; and
 Although the provision mentions “parties to a 4. unresolved grievances arising from the
collective bargaining agreement,” it does not mean interpretation and implementation of the
that a grievance machinery cannot be set up in a productivity incentive programs under R.A. 6071.
CBA-less enterprise. In any work place where
grievance can arise, a grievance machinery Note: it is the Labor Arbiter and not the grievance
(regardless of name) can be established. 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 property of the employer or refuse to vacate the
to strike. premises of the employer.
3. Unionized workers may hold a protest action but not a
strike. ILLEGAL: amounts to a criminal act because the
4. Not all concerted activities are strikes; they may only employees trespass on the premises of the employer.
be protest actions. And they do not necessarily cause
work stoppage by the protesters. A strike, in contrast, B. Wildcat Strike – work stoppage that violates the labor
is always a group action accompanied by work contract and is not authorized and is disowned by the
stoppage. union.

Lockout – means the temporary refusal of an employer ILLEGAL: fails to comply with certain requirements of
to furnish work as a result of an industrial or labor dispute. the law, to wit: notice of strike, vote and report on
strike vote.
Note: Strike and lockout are similar in the sense that they
connote temporary stoppage of work. The difference is C. Sympathetic strikes – work stoppages of workers of
that strike is done by employees or labor union while one company to make common cause with other
lockout is done by the employer. strikers of other companies, without demands or
grievances of their own against the employer.
Boycott – an attempt, by arousing a fear of loss, to
coerce others, against their will to withhold from one ILLEGAL: because there is no labor dispute between
denominated “unfriendly to labor” their beneficial business the workers who are joining the strikers and the
intercourse. latter’s employer.

Slowdown – a method by which one’s employees, D. Secondary Strikes – are work stoppages of workers
without seeking a complete stoppage of work, retard of one company to exert pressure on their employer
production and distribution in an effort to compel so that the latter will in turn bring pressure upon the
compliance by the employer with the labor demands employer of another company with whom another
made upon him. union has a labor dispute.

Picketing – act of marching to and from the employer’s ILLEGAL: because there is no labor dispute involved.
premises, usually accompanied by the display of placards
and other signs making known the facts involved in a Note: A strike can validly take place only in the
labor dispute. This is an exercise of one’s freedom of presence of and in relation to a labor dispute between
speech. employer and employee.

Strike-Breaker – any person who obstructs, impedes or E. Cause Oriented Strikes – to make a stand on certain
interferes by force, violence, coercion, threats or national issues.
intimidation with any peaceful picketing by employees
during any labor controversy affecting wages, hour or “Welga ng Bayan” ILLEGAL: a welga ng bayan is
conditions of work or in the exercise of the right to self illegal because it is a political strike and therefore
organization or collective bargaining. there is neither a bargaining deadlock nor any ULP, it
is a political rally.
Strike Area – the establishment, warehouse, depots,
plants or offices, including the sites or premises used as F. Quickie Strikes – brief and unannounced temporary
runaway shops of the employer struck against, as well as work stoppage.
the immediate vicinity actually used by picketing strikers
in moving to and fro before all points of entrance to and Grounds for the Declaration of Strike
exit from said establishment. 1. Deadlock in collective bargaining (ECONOMIC);
and/or
Types of Strikes 2. Unfair Labor Practices (POLITICAL).
1. Economic strikes – used to secure the economic
demands such as higher wages and better working
conditions for the workers. Economic vs. Political Strike
2. ULP strike – protest against ULP of management.
Economic Strike ULP Strike (Political)
Forms of Strikes and Their Validity
A. Sit-Down Strike – characterized by a temporary work Nature
stoppage of workers who there upon seize or occupy 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. When can the Secretary of Labor Assume
Jurisdiction Over a Strike
4. 7-Day Strike Ban – the 7-day waiting period  There exists a labor dispute causing or likely to cause
before the date of the purported strike (within a strike or lockout in an industry indispensable to the
which the union intending to conduct a strike national interest.
must at least submit a report to the Department  The Secretary of Labor may:
as to the result of the strike vote) intended to give 1. assume jurisdiction and decide it, or
the Department an opportunity to verify whether 2. certify the same to the NLRC for compulsory
the projected strike really carries the imprimatur arbitration.
of the majority of the union members in addition
to the cooling-off period before actual strike. Note: What constitutes “indispensable industry” is based
solely upon the discretion of the Secretary of Labor.
 Should the strike vote be taken within or
outside the cooling-off period? Effects of the Assumption of Jurisdiction of the
The law does not specify but NCMB’s Primer Secretary
on Strike, Picketing and Lockout states that if 1. automatically enjoins the intended or impending strike
the strike vote is filed within the cooling-off or lockout as specified in the assumption or
period, the 7-day requirement “shall be certification order;
counted from the day following the expiration 2. if one has already taken place at the time of
of the cooling-off period” assumption or certification, all striking or locked-out
employees shall immediately return to work; and
C. Means Employed Test – a strike may be legal at is 3. the employer shall immediately resume operations
inception but eventually be declared illegal if the and re-admit all workers under the same terms and
strike is accompanied by violence which is conditions prevailing before the strike or lockout.
widespread, pervasive and adopted as a matter of
policy and not merely violence which is sporadic Note: A motion for reconsideration does not suspend the
which normally occurs in a strike area. (See effects as the assumption order is immediately executory.
prohibited activities under Art. 264)
Issues that the Secretary of Labor Can Resolve When
Note: The 3 tests MUST concur. Non compliance with any He Assumes Jurisdiction over a Labor Dispute
of the aforementioned requisites renders the strike illegal 1. Only issues submitted to the Secretary may be
resolved by him (PAL v. Sec. Of Labor, GR No.
Good Faith Strike Doctrine – a strike may be January 23, 1991, January 23, 1991)
considered legal where the union believed that the 2. Issues submitted to the Secretary for resolution and
company committed ULP and the circumstances such issues involved in the labor dispute itself (St.
warranted such belief in good faith, although Scholastica’s Collage v. Torres, GR No. 100158,
subsequently such allegations of ULP are found out as June 29, 1992).
not true (Bacus v. Ople, GR No. L- 56856, October 23, 3. Secretary of Labor may subsume pending labor
1984) cases before Labor Arbiters which are involved in the
dispute and decide even issues falling under the
Doctrine of means and Purposes – a strike is legal exclusive and original jurisdiction of Labor Arbiters
when lawful means concur with lawful purpose (GOP- such as the declaration of legality or illegality of strike
CCP Workers v. CIR, GR No. L-33015 September 10, (Int’l Pharmaceuticals v. Sec. Of Labor, GR. No.
1979) 92981-8, 3 January 9, 1992).
4. Power of Secretary of Labor is plenary and
When Strike is ILLEGAL discretionary (St. Luke’s Medical Center v. Torres,
1. contrary to specific prohibition of law, such as strike GR No. 99395, June 29, 1993).
by employees performing governmental functions;
2. violates a specific requirements of law; Entitlement to Strike Duration Pay
3. declared for an unlawful purpose, such as inducing General Rule: Strikers are not entitled to their wages
the employer to commit ULP against non-union during the period of a strike, even if the strike is legal.
employees;
4. employs unlawful means in the pursuit of its objective, Exceptions:
such as widespread terrorism of non-strikers; 1. In case of a ULP strike, in the discretion of the
5. declared in violation of an existing injunction; authority deciding the case (see table for more
6. contrary to an existing agreement, such as a no strike distinction between Economic and ULP strike.)
clause or conclusive arbitration clause
2. Where the strikers voluntarily and unconditionally 2. AFTER certification or submission of the dispute
offered to return to work, but the employer refused to to compulsory or voluntary arbitration; or
accept the offer (e.g. “we will return tomorrow” and 3. DURING the pendency of cases involving the
NOT “willing to return provided”). same grounds for the strike or lockout.

Note: They are entitled to backwages from the date the  Third Persons
offer was made. NO person (3rd persons) shall obstruct, impede or
3. Where there is RETURN-TO-WORK ORDER and the interfere with by force, violence, coercion, threats
employees are discriminated against or intimidation:
1. any peaceful picketing by employees during
Rules on Reinstatement of Striking Workers any labor controversy or in the exercise of the
General Rule: Striking employees are entitled to right of self-organization or collective
reinstatement, regardless of whether or not the strike was bargaining; or
the consequence of the employer’s ULP. 2. shall aid or abet such obstruction or
interference.
Reason: Because while out on strike, the strikers are not
considered to have abandoned their employment, but C. Employers
rather have only ceases from their labor. NO employer shall use or employ any STRIKE-
BEARER nor shall any person be employed as a
 The declaration of a strike is NOT a renunciation of strikebreaker
employment relation.
D. Public Official or Employee
Exceptions: NO public official or employee, including officers and
The following are NOT entitled to reinstatement: personnel of the New Armed Forces of the Philippines
1. union officers who knowingly participate in an illegal or the Integrated National Police, or armed persons:
strike; and 1. shall bring in, introduce or escort in any manner,
2. any striker/union member who knowingly participates any individual who seeks to replace strikes in
in the commission of illegal acts during the strike. entering or leaving the premises or a strike area,
or work in place of the strikers,
Note: Those union members who joined an illegal strike 2. The police force shall keep out of the picket lines
but have not committed any illegal act shall be reinstated unless actual violence or other criminal acts
but without any backwages. occur therein:

Rules in Strike in Hospitals Provided, that nothing herein shall be interpreted to


1. It shall be the duty of striking employees or locking prevent any public officers from taking any measure
out employer to provide and maintain an effective necessary to:
skeletal workforce of medical and other health 1. maintain peace and order;
personnel for the duration of the strike or lockout 2. protect life and property; and/or
2. Secretary of Labor may immediately assume 3. enforce the law and legal order.
jurisdiction within 24 hours from knowledge of the
occurrence of such strike or lock-out or certify it to the E. Persons Engaged in Picketing
Commission for compulsory arbitration. NO person engaged in picketing shall:
1. commit any act of violence, coercion or
Article 264: Prohibited Activities intimidation; or
2. obstruct the free ingress to or egress from the
A. Labor Organizations employer’s premises for lawful purposes; or
NO labor organization or employer shall declare a 3. obstruct public thoroughfares
strike or lockout:
1. without first having bargained collectively in Article 265: Improved Offer Balloting
accordance with Title VII of this Book;
2. without first having filed the notice required in Art. Improved Offer Balloting – a referendum conducted by
263; or the NCMB on or before the 30 th day of the strike, for the
3. without the necessary strike or lockout vote first purpose of determining whether or not the improved offer
having been obtained and reported to DOLE. of the employer is acceptable to the union members

B. No strike or Lockout shall be declared: Reduced Offer Balloting – a referendum conducted by


1. AFTER assumption of jurisdiction by the the NCMB for the purpose of determining whether or not
President of the Secretary of Labor; or
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 If the decision of the labor arbiter is later reversed on
appeal upon the finding that the ground for dismissal is
General Rule: A police officer cannot arrest or detain a valid, then the employer has the right to require the
union member for union activities without previous dismissed employee on payroll reinstatement to refund
consultations with the Secretary of Labor the salaries s/he received while the case was pending
appeal, or it can be deducted from the accrued benefits
Except on the ground of: that the dismissed employee was entitled to receive from
1. National security; his/her employer under existing laws, collective
2. public peace; and bargaining agreement provisions, and company practices.
3. commission of a crime. However, if the employee was reinstated to work during
the pendency of the appeal, then the employee is entitled
 An arrest can be lawfully made in the following cases: to the compensation received for actual services
1. Any person who obstructs the free and lawful rendered without need of refund (Citibank v. NLRC, G.R.
ingress and egress from the employer’s premises Nos. 142732-33, December 4, 2007)
or who obstructs public thoroughfares.
2. Any person who shall have in his possession May a Court order the Reinstatement of a Dismissed
deadly weapons in violation of B.P Bldg. 6 and Employee Even if the Prayer of the Complaint did
firearms and explosives (Guidelines for the NOT include such relief?
conduct of PNP/AFP Personnel in Labor
Disputes) YES. So long as there is a finding that the employee was
illegally dismissed, the court can order the reinstatement
BOOK SIX: POST-EMPLOYMENT 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
TITLE ONE: TERMINATION OF EMPLOYMENT employee who is unjustly dismissed is entitled to
reinstatement, among others. The mere fact that the
Article 279: Security of Tenure complaint did not pray for reinstatement will not prejudice
the employee, because technicalities of law and
Security of Tenure- the constitutional right granted the procedure are frowned upon in labor proceedings
employee, that the employer shall not terminate the (Pheschem Industrial Corp. v. Morldez, GR No. 1161158,
services of an employee except for just cause or when May 9, 2005)
authorized by law. It extends to regular (permanent) as
well as non-regular (temporary) employment (Kiamco v. What happens if there is an Order of Reinstatement
NLRC, GR No. 129449, June 29, 1999) but the position is NO longer available?
Note: Security of tenure clause is not confined to cases of The employee should be given a substantially equivalent
termination of employer-employee relationship alone. It is position. If NO substantially equivalent position is
available, reinstatement should not be ordered because
that would in effect compel the employer to do the law. (St. Michael’s Institute v. Santos, GR No. 145280,
impossible. In such a situation, the employee should December 4, 2001)
merely be given separation pay consisting of one month
salary for every year of service (1:1). (Grolier Int’l Inc. v. How it is Computed
ELA, GR No. 83523, August 31, 1989) Under existing law, backwages is computed from the time
of the illegal dismissal up to time of actual reinstatement
Doctrine of Strained Relations
 When the employer can no longer trust the employee Rule on Backwages
and vice-versa, or there were imputations of bad faith The backwages to be awarded should not be diminished
to each other, reinstatement could not effectively or reduced by earnings elsewhere during the period of his
serve as a remedy. This doctrine applies only to illegal dismissal. The reason is that the employee while
positions which require trust and confidence. (Globe litigating the illegality of his dismissal must still earn a
Mackay v. NLRC, GR No. 82511, March 3, 1992) living to support himself and his family (Bustamante vs.
 Under the circumstances where the employment NLRC, G.R. No. 111651, March 15, 1996; Buenviaje v.
relationship has become to strained to preclude a CA. GR No. 147806, November 2002)
harmonious working relationship, and that all hopes
at reconciliation are after reinstatement, it would be Included in the Computation of Backwages
more beneficial to accord the employee backwages 1. transportation and emergency allowances;
and separation pay. 2. vacation or service incentive leave and sick leave;
and
Separation Pay in Lieu of Reinstatement 3. 13th month pay.
Proceeds from al illegal dismissal wherein reinstatement
is ordered but cannot be carried out as in the following Note: Facilities such as uniforms, shoes, helmets and
cases: ponchos should NOT be included in the computation of
1. Reinstatement cannot be effected in view of the long backwages.
passage of time or because of the realities of the
situation; Reason: said items are given free, to be used only during
2. That it would be inimical to the employer’s interest; official tour of duty not for private of personal use.
3. Reinstatement may no longer be feasible;
4. It will not serve the best interest of the parties Note: The award of backwages is computed on the basis
involved; of a 30-day month (JAM Trans Co. v. Flores, GR No. L-
5. Company will be prejudiced by the reinstatement; 68555, March 19, 1993).
6. It will not serve a prudent purpose; and
7. That there is a resultant strained relations Circumstances that Prevent Award of Backwages
1. Dismissal for cause;
Note: Under present laws and jurisprudence, separation 2. Death, physical or mental incapacity of the employee;
pay may be viewed in four ways: 3. Business reverses;
1. in lieu of reinstatement in illegal dismissal cases, 4. Act of State; and
where the ee is ordered reinstated but reinstatement 5. Detention in prison.
is not feasible
2. as employer’s statutory obligation in cases of legal Which Takes Precedence in Conflicts Arising
termination due to authorized causes under Art. 283 Between Employer’s Management Prerogative and
and 284; the Employee’s Right to Security of Tenure?
3. as financial assistance, as an act of social justice and
even in case of legal dismissal under Art. 282; The employee’s right to security of tenure. Thus. An
4. as employment benefit granted in CBA or company employer’s management prerogative includes the right to
policy (Poquiz, 2006) terminate the services of the employee but this
management prerogative is limited by the Labor Code
Backwages – the relief given to an employee to which provides that the employer can terminate an
compensate him for lost earnings during the period of his employee only for a just cause or when authorized by
dismissal. It presupposes illegal termination. law. This limitation is because no less than the
constitution recognizes and guarantees employee’s right
Note: Entitlement to backwages of the illegally dismissed to security of tenure (Art. 279, Labor Code, Art. XIII, Sec.
employee flows from law. Even if he does not ask for it, it 3, Constitution)
may be given. The failure to claim backwages in the
complaint for illegal dismissal is a mere procedural lapse Article 280: Regular and Casual Employment
which cannot defeat a right granted under substantive
1. Regular Employment
Employment arrangement where the employee: project or any phase thereof will not mean severance
a. has been engaged to perform activities which are of E-E relationship. UNLESS, the workers in the work
usually necessary or desirable in the usual pool are free to leave any time and offer their services
business or trade of the employer; or t other employers. (L.T. Datu & Co. Inc. v. NRLR, GR
b. has rendered al least one (1) year of service, No. 113162, February 9, 1996)
whether such service is continuous or broken,
with respect to the activity in which he is Requirements: (Policy Instruction No. 20 and DO.
employed. No. 19, Series of 1997)
a. Specific project phase thereof stated in the
Test of Regularity: reasonable connection between employment contract;
the particular activity performed by the employee in b. Estimated date of completion of project or phase
relation to the usual business or trade of the thereof likewise stated in the contract;
employer. c. Employee must have been dismissed every after
completion of his project or phase (gaps must be
Note: Whether the work undertaken by the employee shown in his length of service); and
is necessary or desirable can be determined by d. There must be a report to the DOLE of his
looking at the services rendered and its relation to the dismissal on account of completion of contract.
general scheme under which the business or trade is
pursued in the usual course. Entitlement to Separation Pay
General Rule: Project employees are NOT entitled to
2. Casual Employment separation pay if they are terminated as a result of
Employment arrangement where an employee is the completion of the project or any phase thereof in
engaged to perform activities which are not which they have been employed.
necessary or desirable in the usual trade or business
of the employer. Exception: if the projects they are working on have
a. the status of regular employment attaches to the not yet been completed when their services are
casual employee who has rendered at least one terminated; project employees also enjoy security of
(1) year of service whether such service is tenure during the limited time of their employment.
continuous or broken, with respect to the activity (De Ocampo v. NLRC, GR. No. 81077, June 6, 1990)
in which he is employed and his employment
shall continue while such activity exists. 4. Seasonal Employment
b. A casual employee is only casual for one year,  Employment arrangement where an employee is
and it is the passage of time that gives him a engaged to work during a particular season on an
regular status (KASAMMA-CCO v. CA GR No. activity that is usually necessary or desirable in
159828, April 19, 2006) the usual business or trade of the employer.
 During off-season, the relationship of employer
Purpose: to give meaning to the constitutional and employee is not severed; the seasonal
guarantees of security of tenure and right to self employee is merely considered on leave of
organization (Mercado v. NLRC, GR No. 79869, absence without pay.
September 5, 1991).  Seasonal workers who are repeatedly engaged
from season to season performing the same
3. Project Employment tasks are deemed to have acquired regular
 Employment has been fixed for a specific project employment.
or undertaking, the completion or termination of
which has been determined at the time of Note: One-year duration on the job is pertinent to
engagement of the employee. deciding whether a casual employee has become
 Where the employment of project employees is regular or not; but it is NOT pertinent to a seasonal or
extended long after the supposed project has project employee. Passage of time does not make a
been finished, the employees are removed from seasonal worker regular or permanent (Mercado v.
the scope of project employees and considered NLRC, GR No. 79869, September 5, 1991)
regular employees.
 When the business establishment is sold which
Note: Members of a work pool from which a effectively terminates the employment of the
construction company draws its project employees, if seasonal employees, the latter would be entitled
considered employees of the construction company to separation pay.
while in the work pool, are non-project employees or
employees for an indefinite period. If they are 5. Temporary or Fixed-Period Employment
employed in a particular project, the completion of the
 Employment arrangement where an employee is General Rule: Probationary employment shall not exceed
engaged to work on a specific project or six (6) months from the date the employee started
undertaking which is usually necessary or working.
desirable in the usual business or trade of the
employer, the completion of which has been Exceptions:
determined at the time of the engagement of the 1. when it is covered by an apprenticeship agreement
employee. stipulating a longer period;
 A fixed-period employee does not become a 2. when the parties to an employment contract agree
regular employee because his employment is co- otherwise;
terminous with a specific period of time. 3. when the same is established by company policy; and
4. when the same is required by the nature of the work
Criteria under which Fixed-Period Employment May performed by the employee.
be Valid
a. the fixed period of employment was knowingly and Example: The probationary period set for professors,
voluntarily agreed upon by the parties without any instructors and teachers is three (3) consecutive years of
force, duress, or improper pressure being brought to satisfactory service pursuant to DOLE Manual of
bear upon the employee and absent any other Regulations for Private Schools.
circumstances vitiating his consent; or
b. it satisfactorily appears that the employer and the Extension of Probation
employee dealth with each other on more or less The employer and employee may extend by agreement
equal terms with no moral dominance exercised by the probationary period of employment beyond six (6)
the former or the latter (Brent School v. Zamora, GR months.
No. L-48494, February 5, 1990).
Note: By voluntarily agreeing to such an extension, the
Note: Seafarers cannot be considered as regular employee waived any benefit attaching to the completion
employees. Their employment is governed by the of the period if he still failed to make the grade during the
contracts they sign everytime they are rehired and their period of extension (Mariwasa Mfg., Inc. v. Hon.
employment is terminated when the contract expires. Leogardo, GR No. 74246, January 26, 1989)
Their employment is fixed for a certain period of time.
(Ravago v. Esso Eastern Maritime Ltd., GR No. 158324, Double or Successive Probation NOT Allowed
March 14, 2005). The evil sought to be prevented is to discourage
scheming employers from using the system of double or
Article 281: Probationary Employment successive probation to circumvent the mandate of the
law on regularization and make it easier for them to
Probationary Employment – Exists where the dismiss their employees (Holiday Inn Manila v. NLRC, GR
employee, upon his engagement is made to undergo a No. 109114, September 14, 1993).
trial period during which the employer determines his
fitness to qualify for regular employment based on Termination of Probationary Employment
reasonable standards made known to him at the time of Probationary employees are protected by the security of
his engagement. tenure provision of the Constitution. HOWEVER, a
probationary employee may be terminated at any time
Characteristics of Probationary Employment before the expiration of the probationary period on two (2)
1. it is an employment for a trial period; grounds
2. it is a temporary employment status prior to regular 1. just cause; and
employment; 2. failure to meet the standards for qualifications for a
3. it arises through a contract with the following regular employment.
elements:
a. the employee must learn and work at a particular Note: The probationary employee is entitled to procedural
type of work; due process prior to dismissal from the service.
b. such work calls for a certain qualifications;
c. the probation is fixed Limitations to Termination of Probation
d. the employer reserves the power to terminate 1. The employer’s power to terminate a probationary
during or at the end of the trial period; and employment contract must be exercised in
e. and if the employee has learned the job to the accordance with the specific requirements of the
satisfaction of the employer, he becomes a contract;
regular employee. 2. If a particular time is prescribed, the termination must
be within such time and if formal notice is required,
Duration then that form must be used;
3. The employer’s dissatisfaction must be real and in c. in connection to the duties which he had
good faith, not feigned so as to circumvent the been engaged to discharge (Acesite
contract or the law; and Corporation, et. al v. NLRC, GR No. 152308,
4. There must be no unlawful discrimination in the January 26, 2005)
dismissal.
Note: There is no law that compels an employee to
Regular Status After Probationary Period accept a promotion for the reason that a promotion is in
If the probationary employee is allowed to work beyond the nature of a gift or reward, which a person has the right
the period of 6 months or the agreed probationary period, to refuse. Hence, the exercise by the employee of the
said employee becomes a regular employee by operation right to refuse a promotion cannot be considered in law
of law as insubordination, or willful disobedience of a lawful
order of the employer (PT&T Corp. v. CA, September 29,
Article 282: Termination by Employer 2003).

Guidelines to Determine the Validity of Termination: C. Gross and Habitual Neglect of Duties
1. Gravity of the offense;  In order to constitute a just cause for the
2. Position occupied by the employee; employee’s dismissal, the neglect of duties must
3. Degree of damage to the employer; not only be gross but also habitual.
4. Previous infractions of the same offense; and  Gross neglect means an absence of that
5. Length of service. diligence that an ordinarily prudent man would
use in his own affairs (Department of Labor
Totality of Infractions Doctrine Manual. Sec. 4343 01[27]).
It is the totality, not the compartmentalization of company  Habitual neglect implies repeated failure to
infractions that the employee had consistently committed, perform one’s duties over a period of time,
which justifies the penalty of dismissal (e.g. number of depending upon the circumstances (JGB and
violations committed during the period of employment). Associates, Inc. v. NLRC, GR No. 10939, March
(Manila Electric Company v. NLRC, GR No. 114129, 7, 1996).
October 24, 1996)
Forms of Neglect of Duty
Just Causes 1. Habitual tardiness and absenteeism
A. Serious Misconduct 2. Abandonment
 Misconduct has been defined as the a. Failure to report for work or absence without
transgression of some established and definite valid or justifiable reason;
rule of action, a forbidden act, a dereliction of b. Clear intention to sever Er-Ee relationship
duty, willful in character, and implies wrongful being manifested by some overt acts. (Labor
intent and not mere error in judgment. (Dept. of et., al. v. NLRC, GR No. 10388, September
Labor Manual, Sec. 4343.01) 11, 1995)
 The misconduct to be serious must be: Note: The filing of the complaint for illegal
1. of such a grave and aggravated character; dismissal (with a prayer for reinstatement) is
and consistent with the charge of abandonment
2. in connection with the employee’s work (Kams Int’l, Inc. v. NLRC, GR No. 128806,
September 28, 1999). HOWEVER, the rule has
Examples: no application where the complainant does not
1. Sexual harassment pray for reinstatement and asks for separation
2. Fighting within company premises pay instead. (Jo, et. al v. NLRC, GR No. 121605,
3. Uttering obscene, insulting or offensive words February 2, 2000).
against a superior
4. Falsification of time records D. Fraud or Will Breach of Trust
5. Gross immorality To constitute a just cause for terminating the
employee’s services,
B. Willful Disobedience or Insubordination 1. fraud must be committed against the employer or
1. The employee’s assailed conduct has been willful his representative; and
or intentional, the willfulness being characterized 2. in connection with the employee’s work
by a “wrongful and perverse attitude”; and (Department of Labor Manual, Sec. 4353.01[3]).
2. The order violated must have been:
a. reasonable and lawful; Examples:
b. made known to the employee; and 1. falsification of time cards
2. theft of company property
3. unauthorized use of vehicle
1. Notice (Twin Notice Rule) – the employer is
Guideline for the Doctrine of Loss of Confidence to required to furnish an employee who is tot be
Apply dismissed with two (2) written notices before such
1. loss of confidence should not be simulated termination:
(reasonable basis for loss of trust and a. Pre-Notice – a written notice served on the
confidence); employee specifying the ground or grounds for
2. not used as a subterfuge for causes which are termination, and giving to said employee
improper, illegal or unjustified; reasonable opportunity within which to explain his
3. not arbitrarily asserted in the face of side;
overwhelming evidence to the contrary; b. Post-Notice – a written notice of termination
4. must be genuine, not a mere afterthought to served on the employee indicating that upon due
justify earlier action taken in bad faith; and consideration of all the circumstances, grounds
5. the employee involved holds a position of trust have been established to justify his termination.
and confidence. (which comes only after the employee is given
reasonable period from receipt of the first notice
Note: generally, employers are allowed wider latitude to answer the charge, see requirement 2 below)
of discretion in terminating the employment of (Pepsi Cola v. NLRC, GR No. 90964, February
managerial personnel or those who, while not of 10, 1992).
similar rank, perform functions which by their nature
require the employer’s full trust and confidence. 2. Hearing or Conference – a hearing or conference
(Coca-Cola Bottlers v. NLRC, GR No. 82580, April should be held during which the employee concerned
25, 1989) with the assistance of counsel, if the employee so
desires, is given the opportunity to respond to the
E. Commission of a Crime or Offense charge, present his evidence or reput the evidence
Refers to an offense by the employee against the presented against him (Lavador v. “J” Marketing
person of his employer or any immediate member of Corporation and Soyao, GR No. 157757, June 28,
his family or his duly authorized representative and 2005).
thus, the conviction of a crime involving moral
turpitude is not analogous thereto as the element of Burden of Proof
relation to his work or to his employer is lacking. The burden of proof rests upon the employer to show that
the dismissal of the employee is for a just cause, and
Note: The conviction of an employee in a criminal failure to do so would necessarily mean that the dismissal
case is NOT necessary to warrant his dismissal by is not justified, consonant with the constitutional
his employer. guarantee of security of tenure as implemented by law.

F. Analogous Cases Degree of Proof


Must be due to the voluntary and/or willful act or  In administrative or quasi-judicial proceedings, proof
omission of the employee (Nadura v. Benguet beyond reasonable doubt is not required in
Consolidated, GR No. L-17780, August 24, 1962). determining the legality of an employer’s dismissal of
an employee, and not even a preponderance of
Examples: evidence is considered sufficient (Pangasinan III,
1. violation of company rules and regulations Electric Cooperative, Inc. v. NLRC, GR No. 89876,
2. drunkenness November 13, 1992).
3. gross inefficiency
4. illegally diverting employer/s product Note: In Agabon v. NLRC. GR NO. 158693, November
17, 2004, when dismissal is for just or authorized cause
Doctrine of Incompatibility but due process was not observed, the dismissal should
Where the employee has done something that is contrary be upheld. However, the employer should be held liable
or incompatible with the faithful performance of his duties, for non-compliance with the procedural requirements of
his employer has a just case for terminating his due process (i.e. damages).
employment (Manila Chauffer’s League v. Bachrach
Motor Co., 40 O.G. 159).  The above ruling was modified by JAKA Food
Processing v. Pacot, GR No. 151378, March 28,
Due Process to be observed by the Employer 2005:
The following standards of due process shall be 1. if based on a just cause (Art. 282) but the
substantially observed for termination of employment employer failed to comply with the notice
based on just causes: requirement, the sanction to be imposed upon
him should be tempered because the dismissal need not set in prior to retrenchment (Cajucom VII v.
process was, in effect, initiated by an act TPI Philippines Cement Corporation, et. al, GR No.
imputable to the employee; and 149090, February 11, 2005).
2. if based on an authorized cause (Art. 283) but the
employer failed to comply with the notice General Standards of Retrenchment (SINS)
requirement, the sanction should be stiffer 1. the losses expected are Substantial and not
because the dismissal process was initiated by merely de minimis in extent
the employer’s exercise of his management 2. the apprehended substantial loss are reasonably
prerogative. Imminent, can be perceived objectively and in
good faith by the employer
Preventive Suspension 3. retrenchment must be reasonable Necessary to
During the pendency of the investigation, the employer prevent the expected losses; and
may place the employee under preventive suspension if 4. expected or actual losses must be proved by
his continued employment poses a serious and imminent Sufficient and convincing evidence (Central
threat to life and property of the employer or of his co- Azucarrera dela v. NLRC, GR No. 100092,
employees. December 29, 1995)
1. Preventive suspension should not last for more
than thirty (30) days. The employee should be Requirement for a Valid Retrenchment
made ot resume his work after 30 days. 1. retrenchment is reasonable necessary and likely
2. However, the same can be extended provided the to prevent business losses, hence, if already
employer pays the suspended employee his incurred, are not merely de minimis, but
wages and other benefits. substantial, serious, ---, and real, or if only
expected, are reasonably imminent as perceived
Article 283-284: Authorized Causes of Termination by effectively and in good faith by the employer;
the Employer 2. the employer served written notice both to the
employees and to the DOLE at least one (1)
A. Automation/ Robotics – installation of labor-saving month prior the intended date of retrenchment;
devices 3. the employer pays the retrenched employees
separation pay equivalent to one moth pay or at
B. Redundancy – exists where the services of an least one-half month pay for every year of
employee are in excess of what is reasonable service;
demanded by the actual requirements of the 4. the employer exercises its prerogative to retrench
enterprise (Wiltshire File Co., Inc. v. NLRC, GR No. employees in good faith for the advancement of
82249, February 7, 1991). its interest and not to defeat or circumvent the
employees’ right in security of tenure; and
Note: Reorganization as a cost-saving device is 5. the employer used fair and reasonable --- in
acknowledged by jurisprudence. An employer is not ascertaining who would be 000 and who would
precluded from adopting a new policy conducive to a be retained among the employees, such as
more economical and effective management, and the status, efficiency, seniority, physical fitness, age
law does not require that the employer should be and financial hardship for certain workers (Asian
suffering financial losses before he can terminate the Alcohol Corp. v. NLRC, GR Mp/ 131105, March
services of the employee on the ground of 25, 1999).
redundancy (Dole Philippines, Inc., et. al v. NLRC, et.
al). Last In, First Out (LFO)
It applies to termination of employment in the line of
C. Retrenchment (Downsizing) – reduction of work. What is contemplated in the LIFO rule is that
personnel usually due to poor financial returns so a to when there are two or more employees occupying the
cut down on costs of operations in terms of salaries same position in the company affected by the
and wages to prevent bankruptcy of the company. retrenchment program, the last one employed will ---
This is linked with losses and is resorted to as it is a be the first to go (Maya Farms Employees
cost-cutting measure made immediately necessary by Organization v. NLRC, GR No. ---, December 28,
business reduction of reverses. 1994)

Note: The phrase “to prevent losses” means that D. Closure or Cessation of Operation of the
retrenchment or termination from the service of some Establishment or Undertaking
employees is authorized to be undertaken by the Must be bona fide or in god faith
employer sometime before the losses anticipated are
actually sustained or realized. Evidently, actual losses Rules:
1. Where closure is due to serious business losses, 10. Retirement.
no separation pay is required; (North Davao
Mining Corp. v. NLRC, GR No. ---, March 13, Totality of Infractions Doctrine
1996) Where the employee has been found to have repeatedly
2. Where closure is NOT due to serious business incurred several suspensions or warnings on account of
losses, workers are entitled to separation pay; violations of company rules and regulations, the law
3. Where closure was due to an act of the warrants their dismissal as it is akin to “habitual
government, the workers are not entitled to delinquency” (Villeno v. NLRC, 251 SCRA 494)
separation pay (National Federation of Labor v.
NLRC, GR No. 127718, March 2, 2000). Procedural Steps Required
1. Written notice to DOLE 30 days prior to the intended
Note: Article 283 includes both the complete date of termination;
cessation of all business operation of an
establishment and the cessation of only part of a Purpose: to enable it to ascertain the verity of the cause
company’s business (Cheniver Deco Print Technics of termination
Corp. v. NLRC, GR No. 122876, February 17, 2000).
2. Written notice to employee concerned 30 days prior
to the intended date of termination;
E. Disease
Requisites: Note: When termination of employment is brought by the
1. the continued employment of the employee is failure of an employee to meet the standards of the
prohibited by law or prejudicial to his health as employer in case of probationary employment, it shall be
well as to the health of his co-employees; and sufficient that a written notice is served the employee
2. with a certification from a competent authority within a reasonable time from the effective date of
(such as a public health officer ) that the disease termination.
is incurable within 6 months despite due  When termination is brought about by the
mediation and treatment (Solis v. NLRC, GR No. completion of the contract or phase thereof, no
116175, October 28, 1996). 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 relations, in that the presence of one precludes that
Mining & Development one of the other (Alfaro v. CA, Ibid).
Corporation v. NLRC, 254
SCRA 721). Intention to Resign
Equivalent to at least one- From his position, and such “resignation” may be
month salary or to ½ month accepted and made effective by the management,
salary for every year of although the employee did not mention the word “resign”
Disease service, whichever is and/ or “resignation”. This happened to the chief
greater, a fraction of at investigative reporter of the Philippine Star. He sent a
least 6 months shall be “Memorandum for File” to the Chairman-CEO expressing
considered one (1) year his frustrations and disappointment in the office.
Closure due to an act of No separation pay (Philippines Today Inc., et al v. NLRC GR No. 112965,
government January 30, 1997)

Article 285: Termination by Employee Constructive Dismissal


Defined as quitting because continued employment is
A. Without Just Cause – by serving a written notice on rendered impossible, unreasonable or unlikely, as an offer
the employer at least one month in advance. The involving demotion in rank and a diminution in pay (JO
employer upon whom no such notice was served may Cinema Corporation v. Abellana, GR NO. 132837, June
hold the employee liable for damages. 28, 2001).
B. With Just Cause – an employee may put an end to
his employment without serving any notice on the Note: There may be constructive dismissal if an act of
employer for any of the following just causes (SUCA) clear discrimination, insensibility, or disdain by an
1. Serious Insult by the employer or his employer becomes so unbearable on the part of the
representative on the honor and person of the employee that is could foreclose any choice by him
employee except to forego his continued employment (Hyatt Taxi
2. Inhuman Unbearable Treatment accorded the Services, Inc. v Catinoy, GR NO. 143204, June 26,
employee by the employer or his representative; 2001).
3. Commission of a Crime or Offense by the
Employer or his representative against the  After the 30-day period of preventive suspension, the
person of the employee or any of the immediate employee must be reinstated to his former position
members of his family; and because suspension beyond this maximum period
4. Other causes Analogous to any of the foregoing. amounts to constructive dismissal. (Hyatt Taxi
Services, Inc. v. Catinoy, GR NO. 143204, June 26,
Voluntary Resignation 2001)
 Defined as the act of an employee, who finds himself
in a situation in which he believes that personal Note: The employer may continue the period of
reasons cannot be sacrificed in favor of the exigency preventive suspension provided that he pays the salary of
of the service; thus, he has no other choice but to the employee.
disassociate himself from his employment (Alfaro v.
CA, GR No. 140812, August 28, 2001). Temporary Lay-Off
 The employee must serve a written notice on the  There is no specific provision of law which treats of a
employer at least one month in advance. Once temporary retrenchment or lay-off and provides for
accepter, cannot be withdrawn without the consent of the requisites in effecting it or a period of duration
the employer (intertrod maritime Inc. v. NLRC, GR therefore. These employees cannot however be
No. 81087, June 19, 1991) forever “temporarily” laid –off.
 An employee who voluntarily resigns is NOT entitled  To remedy this situation, Article 286 may be applied
to separation pay unless stipulated in an employment but only by analogy to set a specific period that
contract or CBA or sanctioned by established employees may remain temporarily laid-off or in a
employer practice or policy (Ibid.) floating status (while business operations are
suspended) for only a period of six months.
Note: If resignation is not voluntary, the same can be
deemed to be a constructive dismissal. Article 286: When Employment NOT deemed
Terminated
 Voluntary resignation and illegal dismissals are
adversely opposed modes of terminating employment When Employment NOT Terminated:
1. Bona fide suspension of the operation of a business 65 Compulsory
or undertaking for a period not exceeding six (6)
months; or Rule on Mining Employees
2. Fulfillment by the employee of a military or civic duty. The rule is different with respect to underground mining
employees whose optional retirement age is 50-60
Floating Status provided they have at least served for a period of 5 years
The “floating status” of an employee should last only for a (Art. 287 as amended by R.A. 8558).
legally prescribed period of time. When the floating status
of an employee lasts for more than six months, he may Compulsory Retirement Age Below 60 is Allowed
be considered to have been constructively dismissed Art. 287 permits employer and employee to fix the
from service. Thus, he is entitled to the corresponding applicable retirement age at below 60 years. The same is
benefits for separation (Agro Commercial Security legal and enforceable so long as the parties agree to be
Services Agency, Inc. v. NLRC, GR Nos. 82823-24, July governed by such CBA (Pantranco North Express v.
31, 1989). NLRC, GR No. 95940, July 24, 1996).

Notice Required Extension of Service of Retiree


Serious business losses do not excuse the employer form Upon the compulsory retirement of an employee or official
complying with the clearance or report required under in the public or private service, his employment is
Article 283 of the Labor Code and its implementing rules deemed terminated. The matter of extension of service of
before terminating the employment of its workers. In the such employee or official is addressed to the sound
absence of justifying circumstances, the failure of the discretion of the employer (UST Faculty Union v. NLRC,
employer to observe the procedural requirements set out GR NO. 89885, August 6, 1990).
under Article 284 taints their actuations with bad faith if
the lay-off was temporary but then serious business Benefits
losses prevented the reinstatement of respondents, the A retiree is entitled to a retirement pay equivalent to at
employer should have complied with the requirement of least ½ month salary for every year of service, a fraction
written notice. of at least six (6) months being considered as one whole
year. Unless the parties provide for broader inclusions,
TITLE TWO: RETIREMENT FROM THE SERVICE the term “one half (1/2) month salary” shall mean:
1. 15 days plus 1/12 of the 13th month pay; and
Article 287: Retirement 2. the cash equivalent of NOT more than 5 days of
service incentive leaves. (22.5 days per year of
Concept of Retirement service)
It is the result of a bilateral act of the parties, a voluntary  Under Section 26, RA No. 4670, otherwise known as
agreement between the employer and the employees the Magna Carta for Public School Teachers, public
whereby the latter , after reaching a certain age, agrees school teachers having fulfilled the age and service
and/or consents to sever his employment with the former requirements of the applicable retirement laws shall
(Brion v. SPUM of the Seventh Day Adventist Church, GR be given ONE RANGE SALARY RAISE upon
No. 135136< May 19, 1999) retirement, which shall be the basis of the
computation of the lump sum of the retirement pay
Kinds of Retirement Schemes: and the monthly benefit thereafter.
1. compulsory and contributory in nature;
2. one set up by agreement between the employer and Note: Exempted from the payment of retirement pay are:
the employees in CBA or other agreements between 1. retail, service and agricultural establishments or
them (other applicable employment contract); business operations employing NOT more than ten
3. one that is voluntarily given by the employer, (10) employees or workers;
expressly as in an announced company policy or 2. government employees; and domestic helpers and
impliedly as in failure to contest the employee’s claim those in the personal service of another.
for retirement benefits (Marilyn Odchimar Gerlach v. 3. domestic helpers and those in the personal service of
Reuters Limited, Phils. GR No. 148542, January 17, another.
2005).
(See RA 7641: Retirement Pay Law).
Retirement Age – the age of retirement is that specified
in the CBA or in the employment contract.
BOOK SEVEN: TRANSITORY AND FINAL
PROVISIONS
Age Retirement
60-less than Optional but the employee must have
65 served at least 5 years 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 Lack of jurisdiction; MOTION FOR
Cases certified to the NLRC for Grave abuse of discretion RECONSIDERAITON
compulsory arbitration by the Sec. Filed with the NLRC within 10
NLRC
Of Labor under Art. 263; calendar days from receipt of the
Injunction cases under Arts. 128 and order, resolution or decision on the
264; and 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 1. Lack of jurisdiction; Decisions of Voluntary Arbitrators
interpretation or implementation of the 2. Grave abuse of discretion; may be elevated for REVIEW to the
CBA; 3. Violation of due process; Court of Appeals under Rule 43 of
Those arising from the interpretation or 4. Erroneous interpretation of the the 1997 Rules of Court within 15
enforcement of company personnel law; and days from notice of the award,
policies; and Upon agreement of the 5. Denial of substantial judgment final order or resolution or
parties, other labor disputes including of the denial of the motion for new
ULP and bargaining deadlocks. 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
1. provided that the dependent illegitimate children shall
SOCIAL SECURITY SYSTEM
be entitled to 50% of the share of the legitimate,
(R.A. 1161 AS AMENDED BY R.A. 8282)
legitimated or legally adopted children;
2. provided further, in the absence of the legitimated,
Definition of Terms legally adopted or legitimate children, illegitimate
children shall be entitled to 100% of the benefits;
Employer – any person, natural, juridical, domestic or 3. in their absence, the dependent parents who shall be
foreign, who carries on in the Philippines, any trade, the secondary beneficiaries; and
business, industry, undertaking or activity of any kind and 4. in the absence of all the foregoing, any person
uses the services of another person who is under his designated by the covered employee as secondary
orders as regards the employment except Government beneficiary.
and any of its political subdivisions, branches or
instrumentalities, including corporations owned or Contingency – The retirement, death, disability, injury r
controlled by the Government. sickness and maternity of the member

Employee – any person who performs services for an Coverage


employer in which whether or not mental and physical
efforts are used and who receives compensation for such A. Compulsory (Sec. 9)
services, where there is an employer-employee 1. All employees not over sixty (60) years of age
relationship. and their employers; and
2. Domestic helpers with monthly income of not less
Self-employed – any person whose income is not than one thousand pesos (1,000) a month
derived from employment; shall be both the employer and
employee at the same time Limitations:
a. Any benefit earned by the employees under private
Dependents: benefit plans existing at the time of the approval of
1. The legal spouse entitled by law to receive support the Act shall not be discontinued, reduces or
from the member; otherwise impaired;
2. The legitimate, legitimated or legally adopted and b. Existing private plans shall be integrated with the
illegitimate child who is unmarried, not gainfully SSS but if the employer under such plan is
employed and has not reached twenty-one (21) years contributing more than what is required by this Act, he
of age, he is congenitally incapacitated or while still a shall pay to the SSS the amount required to him, and
minor has been permanently incapacitated and he shall continue with his contributions les the
incapable of self-support, physically and mentally; amount paid to SSS;
and c. Any changes, adjustments, modifications,
3. The parent who is receiving regular support from the eliminations or improvements in the benefits of the
member. remaining private plan after the integration shall be
subject to agreements between the employers and
Compensation – All actual remuneration for the employees concerned; and
employment, including the mandated cost-of living d. The private benefit plan which the employer shall
allowance, as well as the cash value of any remuneration continue for his employees shall remain under the
paid in any medium other than cash except that part of employer’s management and control unless there is
the remuneration in excess of the maximum salary credit. an existing agreement to the contrary.

Employment – Any service performed by an employee 3. Upon such self-employed persons as may be
for his employer. determined by the Commission including but not
limited to the following (Sec. 9-A): (P2A2F)
Beneficiaries – The dependent spouse until he or she a. All self-employed Professionals;
remarries, the dependent legitimate, legitimated or legally b. Partners and single proprietors;
adopted and illegitimate children who shall be the primary c. Actors and actresses, directors, scriptwriters
beneficiaries of the member; 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 Note: Employees of bona fide independent contractors
jockeys; and shall not be deemed employees of the employer
e. Individual Farmers and fishermen. engaging the service of said contractors.

B. Voluntary Benefits:
1. Spouses who devote full time to managing the
household and family affairs (Sec. 9(b); A. Monthly Pension (Sec. 12)
2. Filipinos employed abroad recruited by foreign- 1. Monthly pension shall be the highest of the
based employers (Sec. 9 (c) ); following:
3. Persons separate from employment to maintain a. P300 plus 20% of average monthly salary
his right to full benefits (Sec. 11); and credit plus 2% of average monthly salary
4. Self-employed, who realizes no income for a credit for each credited year of service in
certain month (Sec. 11-A) excess of 10 years;
b. 40% monthly salary credit; and
C. By Agreement c. P1,000 provided that the monthly pension
Any foreign government, international organization, or shall in no case be paid for an aggregate
their wholly-owned instrumentality employing workers amount of less than 60 months.
in the Philippines, may enter into an agreement with 2. For members with at least 10 years credited
the Philippine government for the inclusion of such service, the minimum pension shall be P1,200;
employees in the SSS except those already covered and
by their respective civil service retirement systems. 3. For members with at least 20 years credited
service, the minimum pension shall be P2,400.
Effective Date of Coverage (Sec. 10)
1. Employer – on first day of his operation A-I. Dependent’s Pension (Sec. 12-A)
2. Employee – on the day of his employment 1. Equivalent to 10% of monthly pension or P250,
3. Self-employed – upon his registration with SSS whichever is higher;
2. Payable on account of death, permanent total
Effects of Separation from Employment (Sec. 11) disability or retirement; and
1. Employer’s contribution on his account ceases; 3. Payable to each conceived child on or before the
2. Employee’s obligation to contribute also ceases at the date of contingency but not exceeding five (5)
end of the month of separation; and dependents beginning from the youngest with
3. Employee shall be credited with all contribution paid preference on legitimate children.
on his behalf and entitled to benefit according to the
provisions of this Act. A-II. Retirement Benefits (Sec. 12-B)
1. A member who has paid at least 120 monthly
Effects of Interruption of Business or Professional contributions prior to the semester of retirement
Income of Self-Employed Individual shall be entitle to monthly pension as long as he
1. He shall not be required to pay contributions for that lives, provided that:
month. a. He has reached the age of sixty (60)
2. However, he may be allowed to continue paying years and is already separated from
contributions under the same rules applicable to a employment or has ceased to be self-
separated covered employee member. employed; or
b. He has reached the age of sixty-five (65)
Excluded Employment (Sec. 8(j)) years.
1. Employment purely casual and not for the purpose of
occupation or business of the employer; Note: Member has the option to receive his 1 st eighteen
2. Services performed on or in connection with an alien (18) monthly pension in lump sum at a preferential rate of
vessel by an employee if he is employed when such interest as determined by the SSS.
vessel is outside the Philippines;
3. Service performed in the employ of the Philippine 2. A covered member who is sixty (60) years old but
government, instrumentality or agency thereof; was not able to contribute at least 120 monthly
4. Service performed in the employ of a foreign contribution prior to the semester of his
government, international organization or their wholly- retirement shall still be entitled to a lump sum
owned instrumentality; and benefit equal to the total contribution paid by him
5. Services performed by temporary employees which and on his behalf, PROVIDED, he is separated
may be excluded by regulation of the Commission. 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 C. Funeral Benefits (Sec. 13-B)
retirement shall be entitles to receive the monthly In case of death of any member, a funeral grant
pension; and equivalent to P12,000 shall be paid in cash or in kind
2. If he has no primary beneficiaries and he dies within to help defray the cost of funeral expenses.
sixty (60) months from the start of his monthly
pension, secondary beneficiaries shall be entitled to a D. Sickness Benefits (Sec. 14)
lump sum benefit equivalent to the total monthly A daily sickness benefit equivalent to ninety percent
pensions corresponding to the balance of the five- (90%) of his average daily salary credit shall be paid
year guaranteed period, excluding the dependent’s by his employer or by the SSS, if unemployed or self-
pension. employed.

Suspension of Monthly Pension Requirements


Upon the re-employment or resumption of self- 1. A member must have paid at least 3 monthly
employment of a retired employee who is less than sixty- contributions in the 12-month period immediately
five (65) years old. preceding the semester of sickness or injury;
2. Confined for more than three days in a hospital or
B. Death Benefits and Permanent Disability Benefits elsewhere with the approval of the SSS; and
(Sec. 13 and Sec. 13-A) 3. All sick leaves of absence with full pay to the
credit of the employee member shall have been
Permanent Total exhausted.
Death Benefits
Disability Benefits
Death Permanent total Conditions
Cause 1. In no case shall the daily sickness benefit be paid
disability
Member has paid at least 36 monthly longer than 120 days in one (1) calendar year;
Requisite 2. Nor shall any unused portion of the 120 days of
contributions
Benefits Monthly pension sickness benefit be carried forward and added to
Payable to Primary Member the total number of compensable days allowable
whom Beneficiaries in the subsequent year;
Benefits shall be lump sum equivalent to 3. The daily sickness benefit shall not be paid for
Failure to more than 240 days on account of the same
the monthly pension times the number of
make 36 confinement; and
monthly contributions pair to SSS or 12
monthly 4. The employee member shall notify his employer,
times the monthly pension, whichever is
payments or the SSS if unemployed or self-employed, of
higher.
the fact of his sickness or injury within five (5)
In case the deceased has no primary beneficiaries, his calendar days after the start of his confinement.
secondary beneficiaries shall be entitled to lump sum
benefit equivalent to 36 monthly pensions. Note: The following are exceptions to the requirement
of notification:
Death of Permanent Total Disability  Confinement is in the hospital; and
1. His primary beneficiaries shall be entitled to the  Became sick or was injured while working or
monthly pension; or within the premises of the employer.
2. If he has no primary beneficiaries and he dies within
sixty (60) months from the start of his monthly E. Maternity Leave Benefits (as amended by RA.
pension his secondary beneficiaries shall be entitled 7322)
to a lump sum benefit equivalent to the total monthly Covered female employee is entitled to a daily
pensions corresponding to the balance of the five maternity benefit equivalent to one hundred percent
year guaranteed period, excluding the dependents’ (100%) of her present basic salary, allowances and
pension. other benefits or the cash equivalent of such benefits
for 60 days or 78 days in case of caesarian delivery.
The following are deemed Permanent Total Disability
1. Complete loss of sight of both eyes; Requirements:
2. Loss of two limbs at or above the ankle or wrists; 1. There is childbirth, abortion or miscarriage; and
3. Permanent complete paralysis of two limbs; 2. She has paid at least 3 monthly contributions.
4. Brain injury resulting to incurable imbecility or
insanity; and Conditions:
5. Such cases as determined and approved by the SSS.
1. Employee shall --- her employer of her pregnancy entitled thereto, in favor of any agent, attorney or any
and the probable date of her childbirth, which other person for the collection thereof on their behalf
notice shall be transmitted to the SSS. shall be recognized, except when they are physically
2. The payment shall be advanced by the employer unable to collect personally such benefits.
in two equal installments within thirty (30) days
from the filing of the maternity leave application; Exemptions from Tax, Legal Processes and Lien
3. The payment of daily maternity benefits shall be a 1. The SSS and all its assets and properties, all
bar to the recovery of sickness benefits for the contributions collected and all accruals thereto
same compensable period of sixty (60) days for and income or investment earnings therefrom as
the same childbirth, abortion or miscarriage, or well as all supplies, equipment, papers or
seventy-eight (78) days in case of caesarian documents shall be exempt from any tax,
delivery. assessment, fee, charge, or customs or import
4. That the maternity benefits provided under this duty; and
Section shall be paid only for the first four (4) 2. All benefits payments made by the SS shall
deliveries after March 13, 1973; likewise be exempt from all kinds of taxes, fees or
5. That the SSS shall immediately reimburse the charges, and shall not be liable to attachments,
employer of 100% of the amount of maternity garnishments, levy or seizure by or under any
benefits advanced to the employee by the legal or equitable process whatsoever, either
employer upon receipt of satisfactory proof of before or after receipt by the person or persons
such payment and legality thereof; and entitled thereto.
6. If an employee should give birth or suffer abortion
or miscarriage without the required contributions Remittance of Contributions
having been remitted for her by her employer to  The contributions imposed under this Act shall be
the SSS, or without the latter having been remitted to the SSS within the first 10 days of
previously notified by the employer of the time of each calendar month following the month for
the pregnancy, the employer shall pay to the SSS which they are applicable or within such time as
damages equivalent to the benefits which said the Commission may prescribe.
employee would otherwise have been entitled to,  Self-employed members shall remit their monthly
and the SSS shall in turn pay such amount to the contributions quarterly on such dates and
employee concerned schedules as the Commission may prescribe.

F. Loan Remedies for Failure to Pay Required


Salary loan, educational loan, housing loan, and Contribution (CAW)
community hospital loan. 1. It shall be Collected by the SSS in the same
manner as taxes are made collectible under the
Reserved Fund – all revenues of SSS accumulated National Internal Revenue Code.
in a fund not needed to meet the current 2. By an Action in court, which shall hear and
administrative an operations expenses incidental to dispose of the case in preference to any other
the carrying out of this Act. civil action; and
3. By issuing a Warrant to the Sheriff of any
Investment Reserve Fund – such portions of the province or city commanding him to levy upon
Reserve Fund as, are not needed to meet the current and sell any real and personal property of the
benefit obligations thereof. debtor. The Sheriff’s sale by virtue of said warrant
shall be governed by the same procedure
The Commission through such funds May: prescribed for executions against property upon
1. Finance housing loans of members; judgments by a court of record.
2. Long-term direct individual or group housing
loans giving priority to the low-income groups, up Duties of the Employer
to a maximum of 90% of the appraised value of 1. To pay employer’s contribution in accordance
the properties to be mortgaged by the borrowers; with the schedule provided in this Act
and 2. To deduct and to remit employees’ contributions;
3. In short and medium-term loans to members 3. To immediately report to the SSS the names,
such as salary, educational, livelihood, marital, ages, civil status, occupations, salaries and
calamity and emergency loans. dependents of all his employees who are subject
to compulsory coverage;
Non-transferability of Benefits )Sec. 15) 4. To keep true and accurate work records for such
Such benefits are not transferable and no power of period and containing such information as the
attorney or other document executed by those Commission may prescribe;
5. To require, as a condition to employment, the 5. any matters related thereto.
presentation of a registration number secured by
the prospective employee form the SSS in Procedure:
accordance with such procedure as the SSS may 1. Filing, determination and settlement of disputes
adopt; shall be governed by the rules and regulations
6. To notify the SSS of the confinement within five promulgated by the Commission;
(5) calendar days after receipt of the notification 2. Shall be heard by:
from the employee member; and a. The Commission
7. To advance in two equal monthly installments the b. Any of its members; or
maternity leave benefits within thirty (30) days c. Hearing officers duly authorized by the
from the filing of the maternity leave application. Commission;
3. Shall be decided within twenty (20) days after the
Liabilities of the Employer: submission of evidence; and
1. The employer shall pay to the SSS damages 4. Shall be final and executory if no appeal within
equivalent to the benefits, which said employee fifteen (15) days from notice of judgment.
member would otherwise have been entitled to,
for his failure to remit the required contributions; Judicial Review
2. To pay, besides the contribution, a penalty 1. Permitted only when all administrative remedies
thereon of 3% per month from the date the have been exhausted;
contribution falls due until paid, for his failure to 2. Court of Appeals has jurisdiction to review
deduct and remit contributions; decisions both on questions of facts and law but if
3. To pay to the SSS damages equivalent to the only questions of law are involved, Supreme
benefits which said employee member would Court has the jurisdiction;
have been entitled to had his name been 3. Commission is deemed to be a party;
reported on time by the employer to the SS, for 4. Heard in summary manner;
his failure to report matters required upon him; 5. Take precedence over any cases except criminal
and case where life imprisonment or death penalty is
4. To pay to the SSS damages equivalent to the imposed;
difference between the amount of benefits, to 6. No appeal bond shall be required; and
which the employee member or his beneficiary 7. No appeal shall act as a supersede as or a stay
would have been entitled to had the proper of the order of the Commission unless the
contributions been remitted to the SS and the Commission itself, or the Court of Appeals or the
amount payable on the basis of contributions Supreme Court, shall so order.
actually remitted, for his misrepresentation of the
true date of employment of the employee
GOVERNMENT SERVICE INSURANCE SYSTEM
member or for remittance to the SSS
(R.A. 8291)
contributions less than those required in this Act
or for failure to remit any contributions due prior
to the date of contingency. Coverage
Compulsory upon all employees receiving compensation
Note: The right of the employee to institute the who have not reached the compulsory retirement age
necessary action against the employer who refuses irrespective of employment status.
or neglects to remit contributions may be commenced
within twenty (20) years from the time the Exceptions to the Compulsory Coverage
delinquency is known or the assessment is made by 1. Members of the Armed Forces of the Philippines
the SSS, or from the time the benefit accrues, as the (AFP);
case may be. The prescriptive period does not 2. Members of the Philippine National Police (PNP); and
commence when the obligation to pay the premiums 3. Contractuals who have no employer and employee
accrues (Lo v. CA, [1999]). relationship with the agencies they serve.
4. Purely casual employees.
Settlement of Disputes (Sec. 5)
Jurisdiction: Social Security Commission Note: All members of the GSIS shall have life insurance,
Cases Covered: Any dispute arising under this Act retirement, and all other social security protections such
with respect to: as disability, survivorship, separation, and unemployment
1. coverage; benefits.
2. benefits;
3. contributions; Exception: Members of the judiciary and constitutional
4. penalty; and commissions shall have life insurance only.
continue with his/her current gainful occupation or engage
Computation of Service in any other gainful occupation.
 Computed from the date of original
appointment/election including period of service at Total Disability – Complete incapacity to continue with
different times under one or more employer, those present employment or engage in any gainful occupation
performed overseas under the authority of the due to the loss or impairment of the normal functions of
Republic of the Philippines, and those that may be the physical and/or mental faculties of the member.
prescribed by the GSIS.
 All service credited for retirement, resignation or Permanent Total Disability – Accrues or arises when
separation for which corresponding benefits have recovery from impairment mentioned in Section 2[q]
been awarded shall be excluded in the computation (defining disability) is medically remote.
of service in case of reinstatement in the service of an
employer and subsequent retirement or separation Temporary Total Disability – Accrues or arises when
which is compensable under this Act. impaired physical and/or mental faculties can be
rehabilitated and/or restored to their normal functions.
Definition of Terms
Permanent Partial Disability – Accrues or arises upon
Employer – The national government, its political the irrevocable loss or impairment of certain portion/s of
subdivisions, ranches, agencies or instrumentalities the physical faculties, despite which the member is able
including GOCCs and financial institutions with original to pursue a gainful occupation.
charters, the Constitutional Commissions and the
Judiciary. Benefits
General Rule: All members of the GSIS shall have life
Employee/ Member – Any person receiving insurance, retirement, and all other social security
compensation while in the service of an employer, protections such as disability, survivorship, separation,
whether by election or appointment irrespective of the and unemployment benefits.
status of appointment.
Exception: Members of the judiciary and the
Dependents Constitutional Commissions shall be entitled only to life
1. The legitimate spouse dependent for support upon insurance benefits.
the member or pensioner;
2. The legitimate, legitimated legally adopted child, A. Monthly Pensions (Sec. 9)
including the illegitimate child who is: 1. 37.5% of the re-valued average monthly
a. Unmarried; compensation; plus
b. Not gainfully employed; 2. 2.5% of said re-valued average monthly
c. Not over the age of majority; or compensation for each year of service in excess
d. Is over the age of majority but incapacitated and of fifteen (15) years PROVIDED that the basic
incapable of self-support due to a mental or monthly pension shall not exceed 90% of the
physical defect acquired prior to age of majority; average monthly compensation.
3. Parents dependent upon the member for support. 3. The basic monthly pension may be adjusted upon
the recommendation of the President and
Primary Beneficiary – The legal dependent spouse until General Manager of the GSIS and approved by
h/she remarries and the dependent children. the President of the Philippines in accordance
with the rules and regulations prescribed by the
Secondary Beneficiary – The dependent parents and , GSIS; PROVIDED:
subject to the restrictions on dependent children, the a. The basic monthly pension shall not be less
legitimate descendants. than one thousand and three hundred pesos
(1,300); and
Compensation – The basic pay or salary received by an b. The basic monthly pension for those who
employee, pursuant to his election/ appointment, have rendered at least twenty years (20) of
excluding per diems, bonuses, overtime pay, honoraria, services after the effectivity of this Act shall
allowances and any other emoluments received in not be less than two tho7usand four hundred
addition to the basic pay. pesos (2,400) a month.

Disability – Any loss or impairment of the normal B. Separation Benefits (Sec. 11)
functions of the physical and/or mental faculty of a 1. Cash payment equivalent to 100% of the average
member, which reduces or eliminates his/her capacity to monthly compensation for each year of service
he paid contributions but not less than P12,000;
years of service, he may be allowed to complete the said
Conditions period.
a. Payable upon reaching the age of sixty (60)
years; E. Permanent Total Disability Benefits (Sec. 15-16)
b. He has resigned or separated from service;
and General Conditions: Employee suffers disability not
c. Has rendered at least three (3) years but less due to his: (MisNIK)
than fifteen (15) years of service.  Grave MISconduct;
 Notorious Negligence;
2. Cash payment equivalent to eighteen (18) times  Habitual Intoxication; and
his basic monthly pension at the time of  Willful intention to Kill himself or another.
resignation or separation, plus an old age
pension benefit equal to the basic monthly 1. Monthly income benefit for life equal to the basic
pension monthly pension.

Conditions: Conditions:
a. Payable monthly upon reaching the age of a. Effective from the date of disability;
sixty (60) years; b. He is in service at the time of disability;
b. He has resigned or separated form service; c. If he is separated from service, he has paid at
and least 36 monthly contributions within the five-
c. Has rendered at least fifteen (15) years of year period immediately preceding disability,
service. or has paid a total of at least 180 monthly
contributions prior to the disability;
Note: A member separated form the service shall d. If he is in service and has paid a total of at
continue to be a member, and shall be entitled to least 180 monthly contributions, he shall
whatever benefits he has qualifies to in the event of any receive an additional cash payment of
contingency compensable under this Act. eighteen (18) times his basic monthly
pension; and
C. Unemployment or Involuntary Separation e. Member cannot enjoy monthly income benefit
Benefits (Sec. 12) and the old-age retirement simultaneously
Monthly cash payments of equivalent to 50% of the
average monthly compensation. 2. Cash payment equivalent to 100% of his average
monthly compensation for each year of service
Conditions but not less than P12,000.
1. Employee is separated from service due to the
abolition of his office or position; and Conditions:
2. He has been paying integrated contributions for a. Member does not satisfy the conditions under
at least one (1) year prior to separation. the preceding number; and
b. Has rendered at least three (3) years of
D. Retirement Benefits (Sec. 13) service at the time of disability.
1. Lump sum payment, payable upon retirement
plus an old-age pension benefit payable monthly  Suspension of Disability Benefits
for life, upon expiration of the five-year 1. He is re-employed;
guaranteed period covered by the lump sum; or 2. He recovers form disability; or
2. Cash payment equivalent to eighteen (18) 3. He failed to present himself for medical
months of his basic monthly pension plus monthly examination when required by the GSIS
pension for life payable immediately
F. Permanent Partial Disability (Sec. 17
Conditions Cash payment in accordance with the schedule
a. He has rendered at least fifteen (15) years of prescribed by the GSIS
service;
b. He is at least sixty (60) years of age at the Condition: Employee satisfies either [1.b.] or [1.c.d.e]
time of retirement; and under permanent total disability.
c. He is not receiving a monthly pension benefit
from permanent total disability.
Note: Retirement is compulsory upon reaching sixty-five G. Temporary Total Disability (Sec. 18)
(65) years of age with at least fifteen (15) years of
service. BUT if he has rendered less than fifteen (15)
75% of the current daily compensation for each day
or fraction thereof of temporary disability Conditions:
a. Employee has rendered at least three (3)
Conditions: years of service prior to his death; and
1. Such benefit shall not exceed 120 days in one b. He failed to qualify under the 1 and 2
calendar year; mentioned above.
2. Employee has exhausted all his sick leave credits
and collective bargaining agreement sick leave Note: If there are no primary beneficiaries, secondary
benefits; beneficiaries are entitled to :
3. He is in service at the time of his disability;  Cash payment equivalent to 100% of his average
4. If separated, he has rendered at least three(3) monthly compensation for each year of service
years of service and paid at least six (6) monthly he paid contributions, but not less than P12,000
contributions in the 12-month period immediately PROVICED that the member was in service at
preceding the disability; the time of his death and has rendered at least
5. Member cannot enjoy temporary total disability three (3) years of service; and
benefit and sick leave pay simultaneously;  In the absence of secondary beneficiaries, such
6. If the disability requires more extensive treatment benefits shall be paid to his legal heirs.
that lasts beyond 120 days, the payment of the
temporary total disability benefit may be extended I. Funeral Benefits (Sec. 23)
by the GSIS but not to exceed a total of 240 In the amount fixed by the GSIS rules and regulations
days; and but should not be less than P12,000, to be increased
7. Such benefit shall not be less than seventy pesos to at least 18,000 after five (5) years, payable upon
(P70) a day. the death of :
1. An active member;
H. Survivorship Benefits (Sec. 20) 2. A member who has been separated from the
1. Basic survivorship pension which is 50% of the service, but who may be entitled to future benefit;
basic monthly pension; and 3. A pensioner; or
2. Dependent children’s pension not exceeding 50% 4. A retiree who at the time of his retirement was of
of the basic monthly pension. pensionable age.

Death of a Member (Sec. 21) J. Life Insurance Benefits (Sec. 24)


Upon death of a member, the primary beneficiaries Compulsory upon all employees except members of
shall be entitled to: the AFP and the PNP
1. Survivorship Pension
K. Loan Grant (Sec. 36)
Conditions: 1. In direct housing loans to members and group
a. The deceased was in the service at the time housing projects secured by first mortgage, giving
of his death; priority to the low income groups; and
b. If separated from the service, he has 2. In short and medium-term loans to members
rendered at least three(3) years of service at such as salary, policy, educational, emergency
the time of his death and paid 36 monthly stock purchase plan and other similar loans.
contributions within the five-year period
immediately preceding his death; or Adjudication of Claims and Disputes
c. If separated from service, he has paid a total
of at least 180 monthly contributions prior to A. Prescription of Claims (Sec. 28)
his death. Four years from date of contingency except lifetime
2. Survivorship Pension plus cash payment and retirement benefits.
equivalent to 100% of his average monthly
compensation for every year of service. B. Jurisdiction (Sec. 30)
GSIS has original and exclusive jurisdiction.
Conditions:
a. Employee was in service at the time of death; C. Appeal (Sec. 31)
and 1. Under Rule 43 and 45 of the Rules of Court of
b. Has rendered at least three (3) years of 1997;
service. 2. Cases pending before the effectivity of the 1997
3. Cash payment equivalent to 100% of his average Rules of Court shall be governed by the rules in
monthly compensation for each year of service force at that time.
he paid contributions, but not less than P12,000.
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.
years or more and has served at least 5 years in the
PATERNITY LEAVE ACT OF 1996 (R.A. 8187) said establishment (optional retirement)

Retirement Benefits – equivalent to at least 1-/month


Paternity Leave Benefit salary for every year of service, a fraction of at least
Paternity leave for seven days with full payment of daily six months as one whole year.
compensation
Note: Unless the parties provide for broader
Conditions: inclusions, the term “1/2 month salary” shall mean 15
1. Legally married to, and is cohabiting with, the woman days + 2.5 days representing 1/12 of the 13 th month
who delivers the baby; pay and the cash equivalent of not more than 5 days
2. Employee of private or public sector; of service incentive leaves or a total of 22.5 days for
3. Only for the first four deliveries of legitimate spouse every year of service.
with whom he is cohabiting; and
4. Notify his employer of the pregnancy of his legitimate Note: 65 years was declared as the compulsory
spouse and the expected date of such delivery. retirement age.

Note: Delivery shall include childbirth or any miscarriage. Retirement Plan vis-à-vis Retirement Pay Law
A retirement plan in a company partakes the nature of
Note: Paternity leave benefits shall not be convertible to a contract, with the employer and the employee as
cash in case it is not availed of. the contracting parties. R.A. No. 7641 only applies in
a situation where:
RETIRMENT PAY LAW (R.A. 7644 AMENDING ART. 287 1. There is no CBA or other applicable employment
OF LC) contract providing for retirement benefits for an
employee; or
2. There is a CBA or other applicable employment
Coverage contract providing for retirement benefits for an
1. All employees in the private sector; employee, but it is below the requirements set for
2. Part-time employees; by law.
3. Employees of service and other job contractors; and
4. Domestic helpers or persons in the personal service Even if the company does not include 13 th month pay and
of another. service incentive leave as part of the salary base, R.A.
No. 7641 does not apply where the employee receives a
Note: The law does not cover employees of : lump sum of 1 ½ month’s pay per year of service. The
1. Retail, service and agricultural establishments or company already grants to its retiring employee more
operations regularly employing not more than 10 than what the law gives which is ½ month salary for every
employees; and year of service. (Oxales v. United laboratories, Inc., GR
2. Government and its political subdivisions, including No. 152991, July 21, 2008)
GOCC’s, if they are covered by the Civil Service Law
and its regulations.
ANTI-SEXUAL HARRASMENT (R.A. 7877)
When to Retire
1. Upon reaching the retirement age established in the
CBA or any other employment contract. Complete Title
An Act Declaring Sexual Harassment Unlawful in the
Retirement Benefits – as he may have earned under Employment Education or Training Environment and for
existing laws and any CBA and other agreements Other Purposes.
provided that:
a. it shall not be less than those prescribed by the Declaration of Policy
Retirement Pay Law; and The State shall:
b. if such benefits are less, the employer shall pay 1. Value the dignity of every individual;
the difference between the amount due under the 2. Enhance the development of its human resources;
Retirement Pay Law and that provided under the 3. Guarantee full respect for human rights; and
CBA or retirement plan. 4. Uphold the dignity of workers, employees, applicants
for employment, students or those undergoing
2. In the absence of retirement plan or CBA regarding training, instruction or education.
retirement employee upon reaching the age of 60
All forms of sexual harassment in the employment, 2. Against one whose education, training,
education or training environment are hereby apprenticeship or tutorship is entrusted to the
declared unlawful. offender.
3. When the sexual favor is made a condition to the
When Sexual Harassment Punishable : (WET) giving of a passing grade, or the granting of
1. Work-related; honors and scholarships, or the payment of a
2. Education-related; and stipend, allowance or other benefits, privileges or
3. Training-related. considerations; and
4. When the sexual advances results in an
Work, Education or Training-Related Sexual intimidating, hostile, or offensive environment for
Harassment Defined Who May Commit the result, trainee or apprentice (IHO)
1. employer;
2. employee; Note: Any person who directs or induces another to
3. manager; commit any act of sexual harassment as herein defined,
4. supervisor; or who cooperates in the commission thereof by another,
5. agent of the employer; without which it would not have been committed, shall
6. teacher; also be held liable under this Act.
7. instructor;
8. professor; Duty of the Employer or Head of Office in a Work-
9. coach; Related, Education or Training Environment
10. trainor; and It is the duty of the employer or head of office in a work-
11. any other person who, having Authority, Influence or related, education or training environment:
Moral (AIM) ascendancy over another. 1. To prevent or deter the commission of acts of sexual
harassment;
Where Committed 2. To provide the procedures for the resolution,
In a work or training or education environment. settlement or prosecution of acts of sexual
harassment;
How Committed 3. Promulgate appropriate rules and regulations in
Generally: Demands, requests, or otherwise requires any consultation with and jointly approved by the
sexual favor from the other regardless of whether the employees or students or trainees, through their duly
demand, request or requirement for submission is designated representatives, prescribing the
accepted by the object of the said act. procedure for the investigation of sexual harassment
cases and the administrative sanctions therefore;
Specifically 4. Create a committee on decorum and investigation of
A. In a work-related or employment environment, cases on sexual harassment to increase
sexual harassment is committed when: understanding and prevent incidents of sexual
1. The sexual favor is made as a condition: harassment; and
a. in the hiring or in the employment 5. The employer or head of office, education or training
b. Re-employment or continued employment of institution shall disseminate or post a copy of this Act
said individual; or for the information of all concerned.
c. In granting said individual favorable
compensation, terms, conditions, promotions Note: Administrative sanctions shall not be a bar to
or privileges. prosecution in the proper courts for unlawful acts of
2. The refusal to grant the sexual favor results in sexual harassment.
limiting, segregating or classifying the employee
which in any way would discriminate, deprive or Liability of the Employer or Head of Office, Education
diminish, employment opportunities or otherwise or Training Institution
adversely affect said employee; Shall be solidarily liable for damages arising from the acts
3. The above acts would impair the employee’s right of sexual harassment committed in the employment,
and privileges under existing labor laws; and education or training environment if the employer or head
4. The above acts would result in an intimidating, of office, educational or training institution is informed of
hostile or offensive environment for the employee such acts by the offended party and no immediate action
is taken thereon.
B. In an education or training environment, sexual
harassment is committed: Independent Action for Damages
1. Against one who is under the care, custody or Nothing in this Act shall preclude the victim of work,
supervision of the offender; education or training-related sexual harassment form
instituting a separate and independent action for 2. when the child below fifteen (15) years of age, (i) in
damages and other affirmative relief. work where he/she is directly under the responsibility
of his/her parents or legal guardian and where only
Penalties members of the child’s family are employed; or (ii) in
Any person who violates the provisions of this Act shall, public entertainment or information.
upon conviction, be penalized by imprisonment of not less
than one (1) month nor more than six (6) months, or a Collective Needs of the Family – Such basic needs as
fine of not less than ten thousand pesos (P10,000) nor food, shelter, light and water, clothing, education, medical
more than twenty thousand pesos (P20,000), or both transportation and other expenditure items necessary for
such fine and imprisonment at the discretion of the court. the survival of the family of the child.

Prescription Work Permit – The permit secured by the employer,


Any action arising form the violation of the provisions of parent or guardian from the DOLE for any child below 5
this Act shall prescribe in three (3) years. years of age in any work allowed under R.A. 19231.

Alternative Learning System – A parallel and


comparable learning system which provides a viable
ACT AGAINST CHILD LABOR (R.A. NO. 9231) alternative to the existing formal education system.

Forced Labor and Slavery – The extraction of work or


Complete Title services from any person by means of enticement,
An Act Providing for the Elimination of the Worst Forms of violence, intimidation or threat, use of force or coercion,
Child Labor and Affording Stronger Protection for the including deprivation of freedom, abuse of authority or
Working Child, Amending for this Purpose Republic Act moral ascendancy, debt bondage or deception.
No. 7610, as Amended, Known as the “Special Protection
of Children Against Child Abuse, Exploitation and Normal Development of the Child – The physical,
Discrimination Act.” emotional, mental, and spiritual growth of a child within a
safe and nurturing environment where he/she is given
Policy adequate nourishment, care and protection and the
It is hereby declared to the policy of the State to: opportunity to perform tasks appropriate at each stage of
1. Provide special protection to children form all forms of development.
abuse, neglect, cruelty, exploitation and
discrimination and other conditions prejudicial to their When State May Intervene in Behalf of the child
development including child labor and its worst forms; 1. The parent, guardian, teacher or person having care
2. Provide sanctions for their commission and carry out or custody of the child fails or is unable to protect the
a program for prevention and deterrence of and crisis child against abuse, exploitation and discrimination;
intervention in situations of child abuse, exploitation or
and discrimination; and 2. Such acts against the child are committed by the said
3. Protect and rehabilitate children gravely threatened or parent, guardian, teacher or person having care and
endangered by circumstances which affect or will custody of the same.
affect their survival and normal development and over
which they have no control. Employment of Children
General Rule: Children below 15 years of age shall not
Definition of Terms (D.O. 65-04) be employed.

Child: Any person under 18 years of age. Exceptions:


1. When a child works directly under the sole
Child Labor – Any work or economic activity performed responsibility of his/her parents or legal guardian and
by a child that subjects him/her to any form of exploitation where only members of his/her family are employed.
or is harmful to his/her health and safety or physical,
mental or psychosocial development. Conditions:
a. That his/her employment neither endangers his
Working Child – Any child engaged as follows: life, safety, health and morals, nor impairs his
1. when the child is below eighteen (18) years of age, in normal development; and
work or economic activity that is not child labor as b. That the parent or legal guardian shall provide
defined in the immediately preceding sub-paragraph; the said minor child with the prescribed primary
and and/or secondary education.
2. Where the child’s employment or participation in 1. The wages, salaries, earnings and other income of
public entertainment or information through cinema, the working child shall belong to him/her in ownership
theater, radio, television or other forms of media is and shall be set aside primarily for his/her support,
essential. education or skills acquisition and secondarily to the
collective needs of the family.
Conditions:
a. That the employment contract is concluded by Condition: That not more than 20% of the child’s
the child’s parents or legal guardian with the income may be used for the collective needs of the
express agreement of the child concerned, if family
possible, and the approval of DOLE;
b. That the following requirements in all instances 2. The income of the working child and/or the property
are strictly complied with: acquired through the work of the child shall be
i. The employer shall ensure the protection, administered by both parents. In the absence or
health, safety, morals and normal incapacity of either parents, the other parent shall
development of the child; administer the same. In case both parents ar absent
ii. The employer shall institute measure to or incapacitated, the order of preference on parental
prevent the child’s exploitation or authority, as provided for under the Family Code shall
discrimination taking into account the system apply.
and level of remuneration and the duration
and arrangement of working time; and Trust Fund to Preserve the Part of the Working
iii. The employer shall formulate and implement, Child’s Income
subject to the approval and supervision of The parent or legal guardian of a working child below
competent authorities, a continuing program eighteen (18) years of age shall set up a trust fund for at
for training and skills acquisition of the child. least 30% of the earnings of the child whose wages and
iv. The child is provided with at least the salaries from work and other income amount to at least
mandatory elementary or secondary P200,000 annually, or which he/she shall render a semi-
education. annual accounting for the fund to DOLE. The child shall
have full control of the trust fund upon reaching the age of
Note: In the above-exceptional cases, the employer shall majority.
first secure before engaging such child, a WORK
PERMIT from DOLE which shall ensure observance of Prohibition against Worst Forms of Child Labor
the above requirements. “Worst forms of child labor” shall refer to any of the
following: (Sec. 3 )
 For purposes of this Article, the term CHILD shall 1. All forms of slavery, as defined under the “Anti-
apply to al persons under 18 years of age; Trafficking of Persons Act of 2003” or practices similar
to slavery such as sale and trafficking of children,
Hours of Work of a Working Child debt bondage and serfdom and forced or compulsory
1. A child below fifteen (15) years of age may be labor, including recruitment of children for use in
allowed to work for not more than twenty (20) hours a armed conflict; OR
week; 2. The use, procuring, offering or exposing of child for
prostitution, for the production of pornography or for
Condition: that the work shall not be more than four pornographic performances; OR
(4) hours at any given day. 3. The use, procuring, offering or exposing of a child for
illegal or illicit activities, including the production and
2. A child fifteen (15) years of age but below eighteen trafficking of dangerous drugs and volatile substances
(18 shall not be allowed to work for more than eight prohibited under existing laws; OR
(8) hours a day, and in no case beyond forty (40) 4. Work which, by its nature or the circumstances in
hours a week; and which it is carried out, is hazardous or likely to be
3. No child below fifteen (15) years of age shall be harmful to the health, safety or morals of children,
allowed to work between eight o’clock in the evening such that it:
and six o’clock in the morning of the following day a. Debases, degrades or demeans the intrinsic
and no child fifteen (15) years of age but below worth and dignity of a child as a human being;
eighteen (18) shall be allowed to work between ten OR
o’clock in the evening and six o’clock in the morning b. Exposes the child to physical, emotional or
of the following day. sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; OR
Ownership, Usage and Administration of the Working c. Is performed underground, underwater, or at
Child’s Income dangerous heights; OR
d. Involves the use of dangerous machinery,
equipment and tools such as power-driven or Jurisdiction (Sec. 9)
explosive power-actuated tools; OR The Family Courts shall have original jurisdiction over all
e. Exposes the child to physical danger such as but cases involving offenses punishable under this Act.
not limited to the dangerous feat of balancing,
physical strength or contortion or which requires Note: In cities or provinces where there are no family
the manual transport of heavy loads; OR courts yet, the RTCs and the MTCs shall have
f. Is performed in an unhealthy environment CONCURRENT JURISDICTION depending on the
exposing the child to hazardous working penalties prescribed for the the offense charged.
conditions, elements, substances co-agents or
processes involving ionizing, radiation, fire, Preliminary Investigation
flammable substances, noxious components and Terminated within a period of thirty (30) days from the
the like, or to extreme temperatures, noise levels, date of filing. If the preliminary investigation establishes a
or vibrations; OR prima facie case, then the corresponding information shall
g. Is performed under particularly difficult condition; be filed in court within 48 hours form the termination of
OR the investigation.
h. Exposes the child to biological agents such as
bacteria, fungi, viruses, protozoans, nematodes Trial
and other parasites; OR Terminated by the court not later than ninety (90) days
i. Involves the manufacture or handling of from the date of filing of information. Decision on said
explosives and other pyrotechnic products. case shall be rendered within a period of fifteen (15) days
from the date of submission of the case.
Access to Education and Training for Working
Children Exemption from Filing Fees
No child shall be deprived of formal or non-formal When the victim of child labor institutes a separate civil
education. In all cases of employment allowed in this Act, action for the recovery of civil damages, he/she shall be
the employer shall provide a working child with access to exempt from payment of filing fees.
at least primary and secondary education.
Access to Immediate Legal, Medical and Psycho-
Prohibition on the Employment of Children in Certain Social Services.
Advertisements The working child shall have the right to free legal,
No child shall be employed as a model in any medical and psycho-social services to be provided by the
advertisement, directly or indirectly, promoting alcoholic State.
beverages, intoxicating drinks, tobacco and its by-
products, gambling or any form of violence or
pornography 13th MONTH PAY LAW (P.D. 851)

Trust Fund form Fines and Penalties


The fine imposed by the court shall be treated as a Trust Definition of Terms
Fund, administered by DOLE and disbursed exclusively
for the needs, including the cost of rehabilitation and 13th Month Pay – Not less than 1/12 of the basic salary of
reintegration into the mainstream of society of the working an employee within a calendar year.
children ho are victims of violations of this Act, and or the
programs and projects that will prevent acts of child labor. Basic Salary – All remunerations or earnings paid by an
employer to an employee for services rendered by may
Who May File a Complaint on Cases of Unlawful Acts not include:
committed against children (Sec. 8) 1. Cost-of-living allowances;
1. Offended party; 2. Profit-sharing payments;
2. Parents or guardians; 3. All allowances and monetary benefits which are not
3. Ascendants or collateral relatives within the third (3 rd) considered or integrated as part of the regular or
degree of consanguinity; basic salary of the employee at the time of the
4. Officer, social worker or representative of a licensed promulgation of the Decree on December 16, 1975
child –caring institution; (San Miguel Corporation v. Inciong, [1981]).
5. Officer or social worker of DSWD; 4. Commissions, if it is not an integral part of the basic
6. Barangay chairman of the place where the violation salary (Philippine Duplicators, Inc. v NLRC, [1995])
occurred, where the child is residing or employed; or
7. At least three (3) concerned, responsible citizens Note: However, these salary-related benefits (i.e. cash
where the violation occurred. 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 Note: Workers paid on piece-rate basis refer to
pay if by individual or collective agreement, company those who are paid a standard amount for every
practice or policy, the same are treated as part of the piece or unit of work produced that is more or
basic salary of the employees. less regularly replicated, without regard to the
time spent in producing the same.
Note: Salesmen’s commission comprising a pre-
determined percent of the selling price of the goods by Piece-rate workers are classified into:
each salesmen are included in the term “basic salary” for 1. Piece-rate workers working inside the work
purposes of computing the 13th month pay (Philippine premises of the employer and are under the
Duplicators, Inc. v. NLRC, [1995]). HOWEVER, direct supervision of the employer, thus
Commissions of medical representatives do not form part entitled to 13th month pay; and
of “basic salary” and are not included in the computation 2. Piece-rate workers who work outside the
of the 13th month pay. Medical representatives are not work premises of the employer whose hours
salesmen because they did not effect any sale of article spent in the performance of their work cannot
at all; additional payments receive partook of the nature be ascertained with reasonable certainty and
of profit-sharing bonuses (Boie-Takeda Chemicals, Inc. v. are not under the direct supervision of the
Dela Serna, [1993]) employer, thus NOT entitled to 13 th month
pay (Labor congress of the Philippines v.
Coverage NLRC).
A. Employers (Sec. 3)
General Rule: ALL employers are covered by this Act B. Employees
General Rule: all rank-and-file employees regardless
Except: (DG-E-HP) of the amount of basic salary that they receive in a
1. Distressed employers such as: month, if their employers are not otherwise exempted
a. Those which are currently incurring from paying the 13th month pay. Such employees are
substantial losses; or entitled to the 13th month pay regardless of their
b. In the case of non-profit institutions and designation or employment status, and irrespective of
organizations, where their income has the method by which their wages are paid,
consistently declined by more than 40% of PROVIDED that they have worked for at least (1) one
their normal income for the last two years. month during a calendar year (Revised Guidelines on
2. The Government and any of its political the Implementation of the 13th-Month Pay Law)
subdivisions, including GOCCs except those
corporations operating essentially as private Except: (H-CR-G)
subsidiaries of the Government; 1. Household helpers
3. Employers already paying their employees 13 th 2. Employees paid purely on Commission basis
month pay or more in a calendar year or its 3. Employees already Receiving 13th Month pay
Equivalent at the time of this issuance. 4. Government employees

Note: Its equivalent includes: Note: Part-time employees are entitled to 13 th month
a. Christmas bonus; pay.
b. Midyear bonus;
c. Profit sharing payments; and Note: Managerial employees may receive 13 th month
d. Other cash bonuses not less than 1/12 of the pay if such payment has been a company practice
basic salary.
Time of Payment
4. Employers of Household helpers and persons in Shall be paid not later than December 24 of each year. An
the personal service of another in relation to such employer however may give to his employees one half
workers; and (1/2) of the required 13th month pay before the opening of
5. Employers of those who are Paid on: the regular school year and the other half on or before
a. Purely commission basis; December 24 of every year. The frequency of payment
b. Boundary basis; or may be subject on agreement between employer and the
c. Task basis; or collective bargaining agent of the employees.
d. A fixed amount for performing a specific work,
except where the workers are paid on piece- Non-Inclusion in Regular Wage
rate basis in which case the employer shall The benefits granted under this issuance shall not be
be covered by this issuance insofar as such credited as part of the regular wage of the employees for
workers are concerned. purposes of determining overtime and premium pay,
fringe benefits, as well as premium contributions to the ground is illegal (Isalama Machine Works Corp. v. NLRC,
State Insurance Fund, social security, medicare and {1995])
private welfare and retirement plans.
14th Month Pay
Rule on certain types of Employees the granting of 14th month pay is a management
1. Employees Paid by Results prerogative and is not legally demandable. It is basically a
 Employees paid on piece work basis are by law bonus and is gratuitous in nature (Kamaya Point Hotel
entitled to the 13th month pay. v. NLRC, [1989])
 Employees paid a fixed or guaranteed wage plus
commission are also entitled to the mandated 13 th MIGRANT WORKERS AND OVERSEAS FILIPINOS
month pay, based on their total earnings during ACT OF 1995 (R.A. 8042)
the calendar year, i.e., on both their fixed or
guaranteed wage and commission.
2. Those with Multiple Employers Definition of Terms
 Government employees working part time in a
private enterprise, including private educational Migrant Workers – Person who is to be engaged, is
institutions, as well as employees working in two engaged or has been engaged in a remunerated activity
or more private firms, whether on full or part time in a state of which he/she is not a legal resident; to be
basis, are entitled to the required 13 th month pay used interchangeable with overseas Filipino worker.
from all their private employers regardless of their
total earnings from each or all their employers. Overseas Filipinos – Dependents of migrant workers
Private School Teachers and other Filipino nationals who are in distress.
Private school teacher, including faculty members of
universities and colleges, are entitled to the required Deployment of Migrant Workers
13th month pay, regardless of the number of months The State shall deploy overseas Filipino workers only in
they teach or are paid within a year, if they have countries where the rights of Filipino migrant workers are
rendered service for at least one (1) month within a protected. The following are recognized as a guarantee
year. on the part of the receiving country for the protection of
Resigned or Separated Employees overseas Filipino Workers:
 If resigned or separated from work before the 1. it has existing labor and social laws protecting the
time for payment of the 13th month pay, entitled to rights of migrant workers;
this monetary benefit in proportion to the length of 2. It is a signatory to multilateral conventions,
time he worked during the year, reckoned from declarations or resolutions relating to the protection of
the time he started working during the calendar migrant workers;
year up to the time of his resignation or 3. it has concluded a bilateral agreement or
termination from the service. arrangement with the government protecting the
rights of overseas Filipino workers; and
Pro-Rated 13th Month Pay 4. It is taking positive, concrete measures to protect the
General Rule: Pro-ration of this benefit applies only in rights of migrant workers.
cases of resignation or separation form work;
computation should be based on length of service and not Termination of Ban on Deployment
on the actual wage earned by the worker (Honda Phils, The government, in pursuit of the national interest or
Inc. v. Samahan ng Manggagawa sa Honda, 460 SCRA when public welfare so requires, may, at any time,
186, [2005]). terminated or impose a ban on the deployment of migrant
workers.
Exception: Employees who are paid a guaranteed
minimum wag or commissions earned are entitled to 13 th Illegal Recruitment (See Art. 38)
month pay based on total earnings. (Philippine Country Team Approach
Agricultural Commercial and Industrial Workers Union v. All officers, representatives and personnel of the
NLRC, 247 SCRA 256 {1995}) Philippine government posted abroad regardless of their
mother agencies shall; on a per country basis, act as one
Adjudication of Claims country-team with a mission under the leadership of the
Non-payment of 13th month pay shall be treated as ambassador. The ambassador may recommend to the
money claims cases. Sec of DFA the recall of officers, representatives and
personnel of the Philippine government posted abroad for
Note: Difference of opinion on how to compute the 13th acts inimical to the national interest such as, but not
Month pay is non-strikeable and a strike held on that limited to, failure to provide the necessary services to
protect the rights of overseas Filipinos.
2. If the contract of the employment is ONE (1) YEAR
Jurisdiction AND ABOVE, then the salaries for the entire
A. NLRC (Sec. 10) unexpired portion of the contract OR three (3) months
 Original and exclusive jurisdiction over money pay for every year of the unexpired portion,
claims arising out of an employer-employee whichever is lesser, shall be paid.
relationship or by virtue of any law or contract
involving Filipino workers for overseas Note: The date when the termination of employment
deployment including claims for actual, moral, occurred is material. If the termination occurred on or
exemplary and other forms of damages. after July 15, 1995, apply provisions of R.A. 8042.
 Cases to be decided within ninety (90) calendar
days after the filing of the complaint. Mandatory Periods for Resolution
 The preliminary investigations of cases under this Act
Liability: Principal/employer and the shall be terminated within a period of thirty (30)
recruitment/placement agency for any and all claims calendar days from the date of their filing.
under this section shall be joint and several. The  Where the preliminary investigation is conducted by a
performance bond to be filed by the prosecution officer and a prima facie case is
recruitment/placement agency, as provided by law, established, the corresponding information shall be
shall be answerable for all money claims or damages filed in court within 24 hours from the termination of
that may be awarded to the workers. If the the investigation.
recruitment/placement agency is a juridical being, the  If the preliminary investigation is conducted by a
corporate officers, directors or partners shall be jointly judge and a prima facie case is found to exist, the
and solidarily liable with the agency. corresponding information shall be filed by the proper
prosecution officer within 48 hours form the date of
B. POEA receipt of the records of the case.
Retains original and exclusive jurisdiction to hear and
decide: Repatriation
1 All cases which are administrative in character, General Rule : (Sec. 15)
involving or arising out of violations of rules and Repatriation of the worker and the transport of his
regulations relating to licensing and registration of personal belongings shall be the primary responsibility of
recruitment and employment agencies or entities; the agency which recruited of deployed the worker
and overseas. The repatriation of remains and transport of the
2 Disciplinary action cases and other special cases, personal belongings of a deceased worker and all costs
which are administrative in character, involving attendant thereto shall be borned by the principal and/or
employers, principals, contracting partners and the local agency.
Filipino migrant workers.
Exceptions:
Venue: POEA Adjudication Office of DOLE or POEA 1. If the termination of employment is due solely to the
Regional Office of the place where the complainant fault of the worker, the principal/employer or agency
applied or was recruited, at the option of the shall not in any manner be responsible for the
complainant. repatriation of the former and/or his belongings; and
2. In case of war, epidemic, disaster of calamities,
C. RTC natural or man-made, and other similar events, and
Criminal action arising from illegal recruitment shall where the principal or recruitment agency cannot be
be filed with the RTC of the province or city where the identified, the Overseas Workers Welfare
offense was committed or where the offended party Administration (OWWA), in coordination with
actually resides at the time of the commission of the appropriate international agencies, shall take charge
offense. The court where the criminal action is first of the repatriation
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;