Social justice

The general rule is that an employee who has been dismissed for any of the just causes
enumerated under 
 Art. 282 of the Labor Code is not entitled to separation pay. Only
unjustly dismissed employees are entitled to retirement benefits and other privileges including
reinstatement and backwages. An exception, however, is that separation pay or other financial
assistance may be allowed to an employee dismissed for just causes on the basis of equity. This
shall be allowed as a measure of social justice only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting on his moral
character. Petitioner is not entitled to the award of separation pay for violating the trust and
confidence reposed in her by her employer when she arrogantly demanded from respondent
the exorbitant amount of Php 2M in damages with a threat of a lawsuit if the money was not
paid within five days. She also continually refused to cooperate with PET’s investigation of
her case. [Tirazona v. PET Inc., 2009]

The constitutional policy of providing full protection to labor is not intended to

oppress or destroy management. While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be supposed that every labor
dispute will be automatically decided in favor of labor. Management also has its rights which
are entitled to respect and enforcement in the interest of simple fair play. Thus, where
management prerogative to transfer employees is validly exercised, as in this case, courts will
decline to interfere. [Best Wear Garments v. de Lemos, 2012]

The law, in protecting the rights of the employees, authorizes neither oppression nor
self- destruction of the employer. Social justice ceases to be an effective instrument for the
“equalization of the social and economic forces” by the State when it is used to shield
wrongdoing. The benefits accorded to labor do not include compelling an employer to retain
the services of an employee who has been shown to be a gross liability to the employer. It
should be made clear that when the law tilts the scale of justice in favor of labor, it is but a
recognition of the inherent economic inequality between labor and management. The intent
is to balance the scale of justice; to put the two parties on relatively equal positions. There may
be cases where the circumstances warrant favoring labor over the interests of management but
never should the scale be so tilted if the result is an injustice to the employer. [Jamer v. NLRC,
1997]

From February 6-11, 1995, Germano did not report for work because his wife was
about to give birth. 2 weeks after, Germano returned to duty. Sy told him that someone had
been hired to take his place… Granting arguendo that private respondent’s absence engendered
undue difficulty to the smooth operations of petitioners’ business, considering the
predicament of private respondent, his dismissal is unwarranted. The doctrine of
compassionate justice is applicable under the premises, private respondent being the
breadwinner of his family. The Social Justice policy mandates a compassionate attitude toward
the working class in its relation to management. In calling for the protection to labor, the
Constitution does not condone wrongdoing by the employee, it nevertheless urges a
moderation of the sanctions that may be applied to him in the light of the many disadvantages
that weigh heavily on him like an albatross on his neck. [Gandara Mill Supply v. NLRC, 1998]

Concept of shared responsibility

The Constitution has recognized the principle of “shared responsibility” between

employers and workers and has likewise recognized the right of workers to participate in policy
and decision-making process affecting their rights. A line must be drawn between management
prerogatives regarding business operations per se and those which affect the rights of the
employees. In treating the latter, management should see to it that its employees are at least
properly informed of its decisions or modes of action. Both the LA and NLRC found that
PAL did not furnish all its employees of copies of the Code. Industrial peace cannot be
achieved if the employees are denied their just participation in the discussion of matters
affecting their rights. Thus, even before Art. 211 of the Labor Code (P.D. 442) was amended
by RA 6715, it was already declared a policy of the State: (d) To promote the enlightenment
of workers concerning their rights and obligations as employees. This was amplified by RA
6715 when it decreed the “participation of workers in decision and policy making processes
affecting their rights, duties and welfare. While such “obligation” was not yet founded in law
when the Code was formulated, the attainment of a harmonious labor-management
relationship and the then already existing state policy of enlightening workers concerning their
rights as employees demand no less than the observance of transparency in managerial moves
affecting employees’ rights. [Philippine Airlines v. NLRC, 1993]

Preference for labor; liberal interpretation

[ER did not fully comply with the requirements for retrenchment.] Respondent NLRC
committed grave abuse of discretion in reversing the findings of the Labor Arbiter and ruling
that there was substantial compliance with the law. This Court firmly holds that measures
should be strictly implemented to ensure that such constitutional mandate on protection to
labor is not rendered meaningless by an erroneous interpretation of applicable laws. The State
is bound under the Constitution to afford full protection to labor and when conflicting
interests of labor and capital are to be weighed on the scales of social justice the heavier
influence of the latter should be counterbalanced with the sympathy and compassion the law
accords the less privileged workingman. This is only fair if the worker is to be given the
opportunity and the right to assert and defend his cause not as a subordinate but as part of
management with which he can negotiate on even plane. Thus labor is not a mere employee
of capital but its active and equal partner. [Fuentes v. NLRC, 1997]

This Court will not sanction a dismissal premised on mere conjectures and suspicions.
To be a valid ground for respondent’s dismissal, the evidence must be substantial and not
arbitrary and must be founded on clearly established facts sufficient to warrant his separation
from work. In carrying out and interpreting the Labor Codes provisions and its implementing
regulations, the working man’s welfare should be the primordial and paramount consideration.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit
of the law as provided for in Article 4 of the Labor Code, as amended, which states that all
doubts in the implementation and interpretation of the provisions of the Labor Code including
its implementing rules and regulations shall be resolved in favor of labor, as well as the
Constitutional mandate that the State shall afford full protection to labor and promote full
employment opportunities for all. Likewise, it shall guarantee the rights of all workers to
security of tenure. Such constitutional right should not be denied on mere speculation of any
unclear and nebulous basis. [PLDT v. NLRC, 1997]

Application of technical rules

The application of technical rules of procedure in labor cases may be relaxed to serve
the demands of substantial justice. It is in the spirit and intention of labor legislation that the
NLRC and the labor arbiter use every reasonable means to ascertain the facts in each case
speedily and objectively, without regard to technicalities of law or procedure, provided due
process is duly observed. [MERALCO v. Jan Carlo Gala, 2012]

Where a contract of employment, being a contract of adhesion, is ambiguous, any

ambiguity therein should be construed strictly against the party who prepared it. The Court is,
thus, compelled to conclude that petitioners’ contracts of employment became effective on
February 16, 1999, and that they were already working continuously for respondent Innodata
for a year. [Price v. Innodata Phil., 2008]

While the terms and conditions of the CBA constitute the law between the parties, it
is not, however, an ordinary contract to which is applied the principles of law governing
ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of
the Civil Code of the Philippines which governs the relations between labor and capital, is not
merely contractual in nature but impressed with public interest, thus, it must yield to the
common good. As such, it must be construed liberally rather than narrowly and technically,
and the courts must place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose which it is intended to serve.
[Marcopper Mining v. NLRC, 1996]

It is the employer who has the burden of proving that the dismissal was with just or
authorized cause. The failure of the employer to discharge this burden means that the dismissal
is not justified and that the employee is entitled to reinstatement and backwages. In the case
at bar, both the handwritten listing and computer print-outs being unsigned, the authenticity
thereof is highly suspect and devoid of any rational probative value especially in the light of
the existence of the official record book of the petitioners alleged absences and tardiness in
the possession of the employer company. [Asuncion v. NLRC, 2001]

In termination cases, the employer has the burden of proving by substantial evidence
that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the
dismissal is deemed illegal. [Gurango vs Best Chemicals, 2010]
 While in cases of illegal dismissal, the employer bears the burden of proving that the
dismissal is for a valid or authorized cause, the employee must first establish by substantial
evidence the fact of dismissal. [Labadan v. Forest Hills, 2008]

While the letter states that Peñaflor’s resignation was irrevocable, it does not necessarily
signify that it was also voluntarily executed. Precisely because of the attendant hostile and
discriminatory working environment, Peñaflor decided to permanently sever his ties with
Outdoor Clothing. This falls squarely within the concept of constructive dismissal that
jurisprudence defines, among others, as involuntarily resignation due to the harsh, hostile, and
unfavorable conditions set by the employer. It arises when a clear discrimination, insensibility,
or disdain by an employer exists and has become unbearable to the employee. The gauge for
constructive dismissal is whether a reasonable person in the employee’s position would feel
compelled to give up his employment under the prevailing circumstances. With the
appointment of Buenaobra to the position he then still occupied, Peñaflor felt that he was
being eased out and this perception made him decide to leave the company. The fact of filing
a resignation letter alone does not shift the burden of proving that the employee’s dismissal
was for a just and valid cause from the employer to the employee. In Mora v. Avesco, we ruled
that should the employer interpose the defense of resignation, it is still incumbent upon the
employer to prove that the employee voluntarily resigned. [Penaflor v. Outdoor Clothing, 2010]

In termination cases, burden of proof rests upon the employer to show that the
dismissal is for a just and valid cause and failure to do so would necessarily mean that the
dismissal was illegal. But should an employer interpose the defense of resignation, it is still
incumbent upon the company to prove that the employee voluntarily resigned. Here,
Cinderella has sufficiently discharged its burden to prove that Vicente’s resignation was
voluntary. In voluntary resignation, the employee is compelled by personal reasons to
disassociate from employment. It is done with the intention of relinquishing an office,
accompanied by the act of abandonment. To determine the intent, the act of the employee
before and after the alleged resignation must be considered. Vicente relinquished her position
when she submitted letters of resignation, which contained words of gratitude which can
hardly come from an employee forced to resign. A careful scrutiny of the letter shows that it
bears the signature of Vicente. Moreover, the latter admitted having submitted the latter, albeit,
due to an alleged intimidation. [Vicente v. CA and Cinderella Marketing, 2007]

There is nothing in the records which could substantially support Pigcaulan’s

contention that he had rendered service beyond 8 hours to entitle him to overtime pay and
during Sundays to entitle him to rest day pay. In the absence of any concrete proof of such
additional service, overtime pay cannot be granted.

Even when the plaintiff alleges non-payment, still the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment.
Since SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan
should be paid his holiday pay, service incentive leave benefits and proportionate 13th month
pay for the year 2000. [Pigcaulan v. Security and Credit Investigation, Inc., 2012]

No work no pay

A “fair day’s wage for a fair day’s labor” remains as the basic factor in determining
employees’ wages. If there is no work performed by the employee there can be no wage or
pay unless, of course, the laborer was able, willing and ready to work but was illegally locked
out, suspended or dismissed, or otherwise illegally prevented from working. [Aklan Electric
Cooperative v. NLRC, 2000]

For work pool employees, cessation of construction activities at the end of every
project is a foreseeable suspension of work, thus it is natural during temporary layoff of
laborers to seek other employment. The period where there is cessation of work should not
mean starvation for employees and their families. During this period, the employee is not
severed and is merely on leave of absence without pay until they are reemployed. [Lao
Construction v. NLRC, 1997]

The import of this decision is not to impose a positive and sweeping obligation upon
the employer to re-hire project employees. What this decision merely accomplishes is a judicial
recognition of the employment status of a project or work pool employee in accordance with
what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool
employees who perform tasks necessary or desirable to the employer's usual business or trade.
Let it not be said that this decision “coddles” labor, for as Lao has ruled, project or work pool
employees who have gained the status of regular employees are subject to the “no work-no
pay” principle, to repeat:
 ”A work pool may exist although the workers in the pool do not
receive salaries and are free to seek other employment during temporary breaks in the business,
provided that the worker shall be available when called to report for a project. Although
primarily applicable to regular seasonal workers, this set-up can likewise be applied to project
workers insofar as the effect of temporary cessation of work is concerned. This is beneficial
to both the employer and employee for it prevents the unjust situation of “coddling labor at
the expense of capital” and at the same time enables the workers to attain the status of regular
employees.

The Court's ruling is meant precisely to give life to the constitutional policy of strengthening
the labor sector, but not at the expense of management. This ruling does not mean that
simply
 because an employee is a project or work pool employee even outside the
construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is
that once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2)
these tasks are vital, necessary and indispensable to the usual business or trade of the employer,
then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor
Code and jurisprudence. To rule otherwise would allow circumvention of labor laws in
industries not falling within the ambit of Policy Instruction No. 20/Department Order No.
19, hence allowing the prevention of acquisition of tenurial security by project or work pool
employees who have already gained the status of regular employees by the employer's conduct.

However, complying w/ the principles of “suspension of work” and “no work, no pay”
between the end of one project and the start of a new one, in computing the backwages, the
amounts corresponding to what could’ve been earned during the periods from the date she
was dismissed until her reinstatement when respondent wasn’t undertaking any project, should
be deducted. [Imbuido v. NLRC, 2000]

Equal pay for equal work

Thus, “equal pay for equal work” is institutionalized in this jurisdiction. Persons who
work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. [International School v. Quisumbing, 2000]

LIFO

Section 2, Article III of their CBA: LIFO RULE. – In all cases of lay-off or
retrenchment resulting in termination of employment in the line of work, the Last-In-First-
Out (LIFO) Rule must always be strictly observed. The LIFO rule under the CBA is explicit.
It is ordained that in cases of retrenchment resulting in termination of employment in line of
work. The employee who was employed on the latest date must be the first one to go. The
provision speaks of termination in the line of work. This contemplates a situation where
employees occupying the same position in the company are to be affected by the retrenchment
program. [Maya Farms Employees v. NLRC, 1994]

One company, one union

Managerial employee is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign
or discipline employees, or to effectively recommend such managerial actions. Managers by
any name may not join the rank and file union. On the other hand, those who are rank and
file workers may join the existing bargaining unit instead of organizing another bargaining unit
and compelling the employer to deal with it. 


The Court disallowed the formation of another union given the fact that there exists a labor
union in the company, the NAMAWU-MIF. The qualified members of the KASAMA KO
may join the NAMAWU-MIF if they want to be union members, and to be consistent with
the one-union, one-company policy of the Department of Labor and Employment, and the
laws it enforces. 


The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the

employees bargaining power with the management. To do otherwise, would be contrary,
inimical and repugnant to the objectives of a strong and dynamic unionism. Let there be a
unified whole rather than a divisive one, let them speak as one in a clear resonant voice
unmarred by dissension towards progressive unionism. [Philtranco Services Enterprises v.
BLR, 1989]

Management prerogative

A valid exercise of management prerogative is one which, among others, covers: work
assignment, working methods, time, supervision of workers, transfer of employees, work
supervision, and the discipline, dismissal and recall of workers. Except as provided for, or
limited by special laws, an employer is free to regulate, according to his own discretion and
judgment, all aspects of employment. [De la Salle University v. De la Salle University
Employees Association, 2000]

Except as limited by special laws, an employer is free to regulate, according to his own
discretion and judgment, all aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision, lay-off
of workers and the discipline, dismissal and recall of work. So long as a company's
management prerogatives are exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, this Court will uphold them. [San Miguel
Brewery Sales Force Union (PTGWO) v. Ople, 1989]

Employees may object to, negotiate and seek redress against employers for rules or
orders that they regard as unjust or illegal. However, until and unless these rules or orders are
declared illegal or improper by competent authority, the employees ignore or disobey them at
their peril. Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a
presumption of the validity of that order. [Manila Pavillion v. Delada, 2012]

It is the prerogative of management to transfer an employee from one office to another

within the business establishment based on its assessment and perception of the employees’
qualifications, aptitudes and competence, and in order to ascertain where he can function with
maximum benefit to the company. The managerial prerogative to transfer personnel was
exercised with grave abuse of discretion, without bearing in mind the basic elements of justice
and fair play. Having the right should not be confused with the manner in which that right is
exercised. The right cannot be used as a subterfuge by the employer to rid himself of an
undesirable worker – the employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Should the employer fail to overcome
this burden of proof, the employees transfer shall be tantamount to constructive dismissal (a
quitting because continued employment is rendered impossible, unreasonable or unlikely; as
an offer involving a demotion in rank and diminution in pay). [Blue Dairy Corporation v.
NLRC, 1999]

Labor laws do not authorize interference with the employer’s judgment in the conduct
of his business. The determination of the qualification and fitness of workers for hiring and
firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code
and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of
the NLRC (nor in the courts) managerial authority. The employer is free to determine, using
his own discretion and business judgment, all elements of employment, from hiring to firing
except in cases of unlawful discrimination or those which may be provided by law. [Almodiel
v. NLRC, 1993]

Illegal recruitment

Illegal recruitment is committed when two (2) elements concur: (1) that the offender
has no valid license or authority required by law to enable one to lawfully engage in recruitment
and placement of workers; and (2) that the offender undertakes either any activity within the
meaning of recruitment and placement defined under Article 13(b), or any prohibited practices
enumerated under Article 34.

To prove illegal recruitment, it must be shown that the accused-appellant gave complainants
the distinct impression that he had the power or ability to send complainants abroad for work
such that the latter were convinced to part with their money in order to be employed. To be
engaged in the practice of recruitment and placement, it is plain that there must at least be a
promise or offer of an employment from the person posing as a recruiter whether locally or
abroad.

Contrary to the allegations, the evidence shows that all four complainants were consistent in
saying that their relatives abroad were the ones who contacted them and urged them to meet
Angeles who would assist them in processing their travel documents. Angeles did not have to
make promises of employment abroad as these were already done by complainants’ relatives.
[People v. Angeles, 2002]

Illegal recruitment is considered an offense involving economic sabotage if any of these

qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate,
i.e., if it is carried out by a group of three or more persons conspiring and/or confederating
with one another; or, (b) when illegal recruitment is committed in large scale, i.e., if it is
committed against three or more persons individually or as a group.

A person who is convicted of illegal recruitment may, in addition, be convicted of estafa under
Art. 315(2)(a) of the Revised Penal Code. There is no problem of double jeopardy because
illegal recruitment is malum prohibitum, in which the criminal intent is not necessary, whereas
estafa is malum in se in which the criminal intent of the accused is necessary. [People v. Ong,
2000]

As regards the conviction of Calonzo for estafa on five counts, SC ruled in People v.
Turda that recruitment of persons for overseas employment without the necessary recruiting
permit or authority from the POEA constitutes illegal recruitment; however, where some
other crimes or felonies are committed in the process, conviction under the Labor Code does
not preclude punishment under other statutes.

People v. Romero: Elements of estafa: (a) that the accused defrauded another by abuse of
confidence or by means of deceit, and (b) that damage or prejudice capable of pecuniary
estimation is caused to the offended party or third person. Art. 315(b) of the RPC provides
for its penalty. In the instant case, SC is convinced that Calonzo defrauded complainants
through deceit. They were obviously misled into believing that he could provide them
employment in Italy. As a result, the 5 complainants who desperately wanted to augment their
income and improve their lot parted with their hard-earned money. [People v. Calonzo, 1996]

Contractual nature of overseas employment

The perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the cause, as well
as the rest of the terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the point of
hire. Therefore, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth of certain
rights and obligations, the breach of which may give rise to a cause of action against the erring
party.

The jurisdiction of labor arbiters is not limited to claims arising from employer- employee
relationships. R.A. No. 8042 (Migrant Workers Act): Sec. 10. Money Claims. Notwithstanding
any provision of law to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.

Seafarers are considered contractual employees and cannot be considered as regular employees
under the Labor Code. Their employment is governed by the contracts they sign every time
they are rehired and their employment is terminated when the contract expires. The exigencies
of their work necessitates that they be employed on a contractual basis. [Santiago v. CF Sharp,
2007]

Repatriation

While Republic Act No. 8042 does not expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the remains of the deceased Razon,
nevertheless, such duty is imposed upon him as the statute clearly dictates that “the
repatriation of remains and transport of the personal belongings of a deceased worker and all
costs attendant thereto shall be borne by the principal and/or the local agency.”

The mandatory nature of said obligation is characterized by the legislature's use of the word
“shall.” That the concerned government agencies opted to demand the performance of said
responsibility solely upon petitioner does not make said directives invalid as the law plainly
obliges a local placement agency such as herein petitioner to bear the burden of repatriating
the remains of a deceased OFW with or without recourse to the principal abroad.

Nor do we see any reason to stamp Section 53 of the Omnibus Rules as invalid for allegedly
contravening Section 15 of the law which states that a placement agency shall not be
responsible for a worker's repatriation should the termination of the employer-employee
relationship be due to the fault of the OFW. To our mind, the statute merely states the general
principle that in case the severance of the employment was because of the OFW's own
undoing, it is only fair that he or she should shoulder the costs of his or her homecoming.

Section 15 of Republic Act No. 8042, however, certainly does not preclude a placement agency
from establishing the circumstances surrounding an OFW's dismissal from service in an
appropriate proceeding. As such determination would most likely take some time, it is only
proper that an OFW be brought back here in our country at the soonest possible time lest he
remains stranded in a foreign land during the whole time that recruitment agency contests its
liability for repatriation. [Equi Asia Placement Inc v. DFA and DOLE, 2006]

Four-fold test

The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer’s power to control the employee’s conduct. The most
important element is the employer’s control of the employee’s conduct, not only as to the
result of the work to be done, but also as to the means and methods to accomplish it. Power
of control refers merely to the existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee, as it is sufficient that the former
has a right to wield the power. [Cesar Lirio (Celkor Ad Sonicmix) v. Wilmer Genovia, 2011]

The question on the existence of an employer-employee relationship for the purpose

of determining the coverage of the Social Security System is explicitly excluded from the
jurisdiction of the NLRC and falls within the jurisdiction of the SSC, which is primarily
charged with the duty of settling disputes arising under the Social Security Law of 1997.

Despite the Service contracts expressly providing that there shall be no ER-EE relationship
between the cooperative and its owner-members, it cannot be denied that the four elements
were satisfied. The existence of an employer-employee relationship cannot be negated by
expressly repudiating it in a contract, when the terms and surrounding circumstances show
otherwise. The employment status of a person is defined and prescribed by law and not by
what the parties say it should be. 


Also, the court is mindful of its ruing in Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja
wherein it held that: “An employee therefore of such a cooperative who is a member and co-
owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot
bargain with himself or his co-owners.” But the situation is different from the case at bar.
There is no issue here regarding an owner-members right to bargain collectively with the
cooperative. [Republic v. Asiapro, 2007]

Independent contractor

(1) Rules that merely serve as guidelines towards the achievement of the mutually
desired result without dictating the means or methods to be employed in attaining it aims only
to promote the result, creates no employer-employee relationship. (2) Rules that control or fix
the methodology and bind or restrict the party hired to the use of such means addresses both
the result and the means used to achieve it. The distinction acquires particular relevance in the
case of an enterprise affected with public interest, as is the business of insurance, and is on
that account subject to regulation by the State with respect, not only to the relations between
insurer and insured but also to the internal affairs of the insurance company. Rules and
regulations governing the conduct of the business are provided for in the Insurance Code and
enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance
company to promulgate a set of rules to guide its commission agents in selling its policies that
they may not run afoul of the law and what it requires or prohibits. Of such a character are
the rules which prescribe the qualifications of persons who may be insured, subject insurance
applications to processing and approval by the Company, and also reserve to the Company
the determination of the premiums to be paid and the schedules of payment. None of these
really invades the agent's contractual prerogative to adopt his own selling methods or to sell
insurance at his own time and convenience, hence cannot justifiably be said to establish an
employer-employee relationship between him and the company. [Insular Life Assurance Co
Ltd v. NLRC, 1989]

The Agreement confirms the status of the collecting agent in this case as an
independent contractor not only because he is explicitly described as such but also because
the provisions permit him to perform collection services for the company without being
subject to the control of the latter except only as to the result of his work. The requirement
that collection agents utilize only receipt forms and report forms issued by the Company and
that reports shall be submitted at least once a week is not necessarily an indication of control
over the means by which the job of collection is to be performed. Even if the report
requirements are to be called control measures, any control is only with respect to the end
result of the collection since the requirements regulate the things to be done after the
performance of the collection job or the rendition of the service. The monthly collection quota
is a normal requirement found in similar contractual agreements and is so stipulated to
encourage a collecting agent to report at least the minimum amount of proceeds. The
Company and each collecting agent intended that the former take control only over the amount
of collection, which is a result of the job performed. [Singer Sewing Machine v. Drilon, 1991]

In an earlier case decided by the CIR, the said court held that shoe shiners are not
employees but are instead partners of Besa. The shoes shiner does not receive wages from
Besa but are paid directly by the customer. The proceeds derived from the trade are divided
share and share alike with Besa. Besa does not exercise any degree of control and supervision
over their person and work. [Besa v. Trajano, 1986]

The specific selection and hiring of SONZA, because of his unique skills, talent and
celebrity status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship.

If SONZA were ABS-CBN’s employee, there would be no need for the parties to stipulate on
benefits such as “SSS, Medicare, and 13th month pay” which the law automatically
incorporates into every employer- employee contract. Whatever benefits SONZA enjoyed
arose from contract and not because of an employer-employee relationship.

SONZA’s talent fees, amounting to P317,000 monthly in the second and third year, are so
huge and out of the ordinary that they indicate more an independent contractual relationship
rather than an employer-employee relationship. The power to bargain talent fees way above
the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an
independent contractual relationship.

ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his lines, appeared on television, and
sounded on radio were outside ABS-CBN’s control. SONZA did not have to render eight
hours of work per day. The Agreement required SONZA to attend only rehearsals and tapings
of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate
the contents of SONZA’s script.

ABS-CBN could not terminate or discipline SONZA even if the means and methods of
performance of his work – how he delivered his lines and appeared on television - did not
meet ABS-CBN’s approval. This proves that ABS-CBN’s control was limited only to the result
of SONZA’s work, whether to broadcast the final product or not. In either case, ABS-CBN
must still pay SONZA’s talent fees in full until the expiry of the Agreement.

Even though ABS-CBN provided SONZA with the place of work and the necessary
equipment, SONZA was still an independent contractor since ABS- CBN did not supervise
and control his work. A radio broadcast specialist who works under minimal supervision is an
independent contractor. SONZA’s work as television and radio program host required special
skills and talent, which SONZA admittedly possesses. The records do not show that ABS-
CBN exercised any supervision and control over how SONZA utilized his skills and talent in
his shows. [Sonza v. ABS CBN, 2004]

Regular employment

Contrary agreements notwithstanding, an employment is deemed regular when the

activities performed by the employee are usually necessary or desirable in the usual business
or trade of the employer. However, any employee who has rendered at least one year of service,
whether continuous or intermittent, is deemed regular with respect to the activity he
performed and while such activity actually exists.

The primary standard of determining a regular employment is the reasonable connection

between the particular activity performed by the employee in relation to the usual business or
trade of the employer. This can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety.

Also, if the employee has been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that activity to
the business. Hence, the employment is also considered regular, but only with respect to such
activity and while such activity exists.

What determines whether a certain employment is regular or casual is not the will and word
of the employer, to which the desperate worker often accedes, much less the procedure of
hiring the employee or the manner of paying his salary. It is the nature of the activities
performed in relation to the particular business or trade considering all circumstances, and in
some cases the length of time of its performance and its continued existence. [De Leon v.
NLRC, 1989]

Casual employment

While the actual regularization of these employees entails the mechanical act of issuing
regular appointment papers and compliance with such other operating procedures as may be
adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that
the status of regular employment attaches to the casual worker on the day immediately after
the end of his first year of service. To rule otherwise, and to instead make their regularization
dependent on the happening of some contingency or the fulfillment of certain requirements,
is to impose a burden on the employee which is not sanctioned by law. The law is explicit. As
long as the employee has rendered at least one year of service, he becomes a regular employee
with respect to the activity in which he is employed. The law does not provide the qualification
that the employee must first be issued a regular appointment or must first be formally declared
as such before he can acquire a regular status. Obviously, where the law does not distinguish,
no distinction should be drawn. [Kimberly Independent Labor Union v. Drilon, 1990]

The usual business or trade of private respondent is the manufacture of cultured milk.
The cutting of the cogon grasses in the premises of its factory is hardly necessary or desirable
in the usual business of the private respondent. Indeed, it is alien thereto. Thus, petitioners
are casual employees who cannot be considered regular employees under the aforestated
provision of the Labor Code. [Capule vs. NLRC, 1990]

Seasonal employees

Under Art. 280 of LC, for respondents to be excluded from those classified as regular
employees, it is not enough that they perform work or services that are seasonal in nature.
They must have also been employed only for the duration of one season. The fact that
respondents do not work continuously for one whole year but only for the duration of the
season does not detract from considering them in regular employment since in a litany of cases
this Court has already settled that seasonal workers who are called to work from time to time
and are temporarily laid off during off-season are not separated from service in said period,
but merely considered on leave until re-employed. [Hacienda Fatima Inc. vs. National
Federation of Sugar Cane Workers, 2003]

Private respondent Aurora Cruz in her answer to petitioners' complaint denied that
said petitioners were her regular employees and instead averred that she engaged their services,
through Spouses Fortunato Mercado, Sr. and Rosa Mercado, their “mandarols”, that is,
persons who take charge in supplying the number of workers needed by owners of various
farms, but only to do a particular phase of agricultural work necessary in rice production
and/or sugar cane production, after which they would be free to render services to other farm
owners who need their services. [Mercado v. NLRC, 1991]

We have consistently held that seasonal employees may be considered as regular

employees. Regular seasonal employees are those called to work from time to time. The nature
of their relationship with the employer is such that during the off season, they are temporarily
laid off; but reemployed during the summer season or when their services may be needed.
They are in regular employment because of the nature of their job, and not because of the
length of time they have worked. This is not an absolute rule. It was held in Hacienda Fatima v.
National Federation of Sugarcane Workers-Food & General Trade that seasonal workers who have
worked for one season only may not be considered regular employees. [Gapayao vs. Fulo &
SSS, 2013]

Project employees

The principal test for determining whether particular employees are properly
characterized as “project employees” as distinguished from “regular employees,” is whether
or not the “project employees” were assigned to carry out a “specific project or undertaking,”
the duration (and scope) of which were specified at the time the employees were engaged for
that project. In the realm of business and industry, we note that “project” could refer to one
or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer
to a particular job or undertaking that is within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable as such, from the other
undertakings of the company. The term “project” could also refer to, secondly, a particular job
or undertaking that is not within the regular business of the corporation. Such a job or
undertaking must also be identifiably separate and distinct from the ordinary or regular
business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times. Whichever type of project employment is found in a
particular case, a common basic requisite is that the designation of named employees as
“project employees” and their assignment to a specific project, are effected and implemented
in good faith, and not merely as a means of evading otherwise applicable requirements of labor
laws.

The simple fact that the employment of petitioners as project employees had gone beyond
one (1) year, does not detract from, or legally dissolve, their status as project employees. The
second paragraph of Article 280 of the Labor Code, quoted above, providing that an employee
who has served for at least one (1) year, shall be considered a regular employee, relates to
casual employees, not to project employees. [ALU–TUCP v. NLRC, 1994]

The company presented material evidence to show that there were gaps between the
hiring of petitioners in the numerous projects wherein he was assigned. It can be concluded
that petitioners had not continuously worked with private respondent but only intermittently
as he was hired solely for specific projects.Moreover, long years of service in the construction
industry does not automatically render an employment as regular employment. There should
be evidence that even when the project has ceased, such worker is still considered an employee
of the company.

Under Policy Instruction No. 20, to be considered as part of a work pool, the worker must
still be considered an employee of the construction company while in the work pool. In other
words, there must be proof to the effect that petitioner was under an obligation to be always
available on call of private respondent and that he was not free to offer his services to other
employees. Here, there was no evidence that petitioner was considered an employee of the
company during the times when there were no project. Moreover, it is important to note that
the company has complied with the requirement of Policy Instruction No. 20 of submitting
lay-off reports and termination reports to the Ministry of Labor and Employment everytime
that a project was completed. [Fernandez vs. NLRC, 1994]

Jamin was repeatedly re-hired for 31 years, for a total of 38 times as shown by the
schedule of projects submitted by DMCI. There was an almost unbroken string of re-hiring
of Jamin up to his 1999 termination. The 4-year gap between 1980 and 1984 was caused by
DMCI’s omission of the three projects which Jamin mentioned. Once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer… then the employee must be
deemed a regular employee. While length of time is not the controlling test for project
employment, it is vital in determining if the employee was hired for a specific undertaking or
tasked to perform functions vital, necessary and indispensable to the usual business or trade
of the employer. [DM Consunji v. Jamin, 2012]

If truly, Dagui was employed as a “project employee,” petitioners should have

submitted a report of termination to the nearest public employment office every time his
employment is terminated due to completion of each project, as required by Policy Instruction
No. 20. Failure of the petitioners to comply with this simple, but compulsory, requirement is
proof that Dagui is not a project employee. [Aurora Land Projects Corp v. NLRC, 1997]
 The record shows that although the contracts of the project workers had indeed
expired, the project itself was still on-going and so continued to require the workers’ services
for its completion. There is no showing that such services were unsatisfactory to justify their
termination. Policy Instruction No. 20 of the DOLE provides that project employees are not
entitled to separation pay if they are terminated as a result of the completion of the project or
any phase thereof in which they are employed. This rule would entitle project employees to
separation pay if the projects they are working on have not yet been completed when their
services are terminated. This should be true even if their contracts have expired, on the theory
that such contracts would have been renewed anyway because their services were still needed.
[De Ocampo Jr. v. NLRC, 1990]

Fixed-term employment

Logically, the decisive determinant in term employment should not be the activities
that the employee is called upon to perform, but the day certain agreed upon by the parties
for the commencement and termination of their employment relationship, a day certain being
understood to be “that which must necessarily come, although it may not be known when.”
It should be apparent that this settled and familiar notion of a period, in the context of a
contract of employment, takes no account at all of the nature of the duties of the employee; it
has absolutely no relevance to the character of his duties as being “usually necessary or
desirable to the usual business of the employer,” or not.

Some familiar examples may be cited of employment contracts which may be neither for
seasonal work nor for specific projects, but to which a fixed term is an essential and natural
appurtenance: overseas employment contracts, for one, to which, whatever the nature of the
engagement, the concept of regular employment will all that it implies does not appear ever to
have been applied, Article 280 of the Labor Code not withstanding; also appointments to the
positions of dean, assistant dean, college secretary, principal, and other administrative offices
in educational institutions, which are by practice or tradition rotated among the faculty
members, and where fixed terms are a necessity, without which no reasonable rotation would
be possible. Similarly, despite the provisions of Article 280, Policy, Instructions No. 8 of the
Minister of Labor implicitly recognize that certain company officials may be elected for what
would amount to fixed periods, at the expiration of which they would have to stand down, in
providing that these officials,” . . . may lose their jobs as president, executive vice-president or
vice-president, etc. because the stockholders or the board of directors for one reason or
another did not re-elect them.”

There can of course be no quarrel with the proposition that where from the circumstances it
is apparent that periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy, morals, etc.

Accordingly, and since the entire purpose behind the development of legislation culminating
in the present Article 280 of the Labor Code clearly appears to have been, as already observed,
to prevent circumvention of the employee's right to be secure in his tenure, the clause in said
article indiscriminately and completely ruling out all written or oral agreements conflicting with
the concept of regular employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on more
or less equal terms with no moral dominance whatever being exercised by the former
over the latter. Unless thus limited in its purview, the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust
in its effects and apt to lead to absurd and unintended consequences. [Brent Schoo v. Zamora,
1990]

Inasmuch as private respondents' contracts of employment categorically provided a

fixed period and their termination had already been agreed upon at the time of their
engagement, their employment was one with a specific period or day certain agreed upon by
the parties. Philippine National Oil Company-Energy Development Corporation vs. NLRC: “The two
guidelines by which fixed contracts of employments can be said NOT to circumvent security
of tenure, are either:
 1. The fixed period of employment was knowingly and voluntarily
agreed upon 
 by the parties, without any force, duress or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating his consent; or 2. It
satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former on the latter.”
[Phil. Village Hotel v. NLRC, 1994]

Probationary employees

A probationary employee, as understood under Article 282 (now Article 281) of the
Labor Code, is one who is on trial by an employer during which the employer determines
whether or not he is qualified for permanent employment. A probationary appointment is
made to afford the employer an opportunity to observe the fitness of a probationer while at
work, and to ascertain whether he will become a proper and efficient employee. The word
“probationary”, as used to describe the period of employment, implies the purpose of the term
or period, but not its length. Being in the nature of a “trial period” the essence of a
probationary period of employment fundamentally lies in the purpose or objective sought to
be attained by both the employer and the employee during said period. The length of time is
immaterial in determining the correlative rights of both in dealing with each other during said
period. Failure to qualify as a regular employee in accordance with the reasonable standards
of the employer is a just cause for terminating a probationary employee specifically recognized
under Article 282 (now Article 281) of the Labor Code. [International Catholic Migration
Commission v. NLRC, 1989)

Generally, the probationary period of employment is limited to 6 months. The exception to

this general rule is when the parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the same is required by the nature
of work to be performed by the employee. By voluntarily agreeing to an extension of the
probationary period, Dequila in effect waived any benefit attaching to the completion of said
period if he still failed to make the grade during the period of extension. [Mariwasa v. Leogardo,
1989]

Honasan was placed by Holiday Inn on probation twice, first during her on-the-job
training, and next during another period of six months, ostensibly in accordance with Art. 281.
Her probation clearly exceeded the period of six months. [Holiday Inn Manila v. NLRC, 1993)

Moreover, Art. 281 of the Labor Code on probationary employment states that the
employer shall make known to the employee at the time he is hired, the standards by which
he will qualify as a regular employee. Nowhere in the employment contract has Grulla been
appraised of his probationary status and the requirements which he should comply in order to
be considered a regular employee. In the absence of requisites, there is justification in
concluding that respondent Grulla was a regular employee at the time he was dismissed by
petitioner. As such, he is entitled to security of tenure during his period of employment. [Euro.
Linea Phil v. NLRC & Cruz, 1987]

Within the limited legal 6-month probationary period, probationary employees are still
entitled to security of tenure. A probationary employee may be terminated only on two
grounds: (a) for just cause, or (b) when he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to the employee at the time of his
engagement. Unlike under the 1st ground for the valid termination of probationary
employment which is for just cause, the 2nd ground does not require notice and hearing. Due
process of law for this 2nd ground consists of making the reasonable standards expected of the
employee during his probationary period known to him at the time of his probationary
employment. By the very nature of a probationary employment, the employee knows from the
very start that he will be under close observation and his performance of his assigned duties
and functions would be under continuous scrutiny by his superiors. It is in apprising him of the
standards against which his performance shall be continuously assessed where due process
regarding the second ground lies, and not in notice and hearing as in the case of the first
ground. [Phil Daily Inquirer v. Magtibay, 2007]

Where the school year is divided into trimesters, the school apparently utilizes its fixed-
term contracts as a convenient arrangement dictated by the trimestral system and not because
the workplace parties really intended to limit the period of their relationship to any fixed term
and to finish this relationship at the end of that term. In a situation where the probationary
status overlaps with a fixed-term contract not specifically used for the fixed term it offers,
Article 281(probationary employment) should assume primacy and the fixed-period character of the
contract must give way.

If the school were to apply the probationary standards (as in fact it says it did in the present
case), these standards must not only be reasonable but must have also been communicated to
the teachers at the start of the probationary period, or at the very least, at the start of the period
when they were to be applied. These terms, in addition to those expressly provided by the Labor Code,
would serve as the just cause for the termination of the probationary contract. As explained
above, the details of this finding of just cause must be communicated to the affected teachers
as a matter of due process. [Mercado v. AMA Computer College, 2010]

Apprentice/Learner

Section 14, Rule X of Book III reads: “Working scholars. – There is no employer-
employee relationship between students on the one hand, and schools, colleges or universities
on the other, where students work for the latter in exchange for the privilege to study free of
charge; provided the students are given real opportunity, including such facilities as may be
reasonable, necessary to finish their chosen court under such arrangement.” The provisions
of Section 14, Rule X, Book III of the Labor Code IRR was only meant to provide guidelines
as compliance with labor provisions on working conditions, rest periods, and wages is
concerned. This does not in any way affect the provisions of any other laws like the civil code.
The IRR cannot defeat the provisions of the Civil Code. [Filamer Christian Institute v. Court
of Appeals, 1990]

Handicapped workers

The Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied
person. The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code.
[Bernardo vs. Far East Bank, 1999]
 RA 7277

TITLE III
PROHIBITION ON DISCRIMINATION AGAINST DISABLED PERSONS

CHAPTER I DISCRIMINATION ON EMPLOYMENT

Sec. 32. Discrimination on Employment. — No entity, whether public or private, shall discriminate
against a qualified disabled person by reason of disability in regard to job application
procedures, the hiring, promotion, or discharge of employees, employee compensation, job
training, and other terms, conditions, and privileges of employment. The following constitute
acts of discrimination:

(a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely
affects his work opportunities;

(b) Using qualification standards, employment tests or other selection criteria that screen out
or tend to screen out a disabled person unless such standards, tests or other selection criteria
are shown to be job-related for the position in question and are consistent with business
necessity;

(c) Utilizing standards, criteria, or methods of administration that:

(1) have the effect of discrimination on the basis of disability; or

(2) perpetuate the discrimination of others who are subject to common administrative
control.

(d) Providing less compensation, such as salary, wage or other forms of remuneration and
fringe benefits, to a qualified disabled employee, by reason of his disability, than the amount
to which a non-disabled person performing the same work is entitled;

(e) Favoring a non-disabled employee over a qualified disabled employee with respect to
promotion, training opportunities, study and scholarship grants, solely on account of the
latter's disability;

(f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by

reason of his disability;

(g) Dismissing or terminating the services of a disabled employee by reason of his disability
unless the employer can prove that he impairs the satisfactory performance of the work
involved to the prejudice of the business entity: Provided, however, That the employer first
sought to provide reasonable accommodations for disabled persons;
(h) Failing to select or administer in the most effective manner employment tests which
accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that
such tests purports to measure, rather than the impaired sensory, manual or speaking skills of
such applicant or employee, if any; and

(i) Excluding disabled persons from membership in labor unions or similar organizations.

Sec. 33. Employment Entrance Examination. — Upon an offer of employment, a disabled

applicant may be subjected to medical examination, on the following occasions:

(a) all entering employees are subjected to such an examination regardless of disability;

(b) information obtained during the medical condition or history of the applicant is collected
and maintained on separate forms and in separate medical files and is treated as a confidential
medical record; Provided, however, That:

(1) supervisors and managers may be informed regarding necessary restrictions on the
work or duties of the employees and necessary accommodations;

(2) first aid and safety personnel may be informed, when appropriate, if the disability
may require emergency treatment;

(3) government officials investigating compliance with this Act shall be provided
relevant information on request; and

(4) the results of such examination are used only in accordance with this Act.
 RA 8042, AS AMENDED BY RA 10022

MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad, whether
for profit or not, when undertaken by non-licensee or non-holder of authority contemplated
under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any
manner, offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged. It shall likewise include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified in
the schedule of allowable fees prescribed by the Secretary of Labor and Employment,
or to make a worker pay or acknowledge any amount greater than that actually received
by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to

recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor
Code, or for the purpose of documenting hired workers with the POEA, which include
the act of reprocessing workers through a job order that pertains to nonexistent work,
work different from the actual overseas work, or work with a different employer
whether registered or not with the POEA;

(d) To include or attempt to induce a worker already employed to quit his employment
in order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency or who has formed, joined or
supported, or has contacted or is supported by any union or workers' organization;

(f) To engage in the recruitment or placement of workers in jobs harmful to public

health or morality or to the dignity of the Republic of the Philippines;

(h) To fail to submit reports on the status of employment, placement vacancies,

remittance of foreign exchange earnings, separation from jobs, departures and such
other matters or information as may be required by the Secretary of Labor and
Employment;
 (i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including the period of the expiration of
the same without the approval of the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer

or member of the Board of any corporation engaged in travel agency or to be engaged
directly or indirectly in the management of travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing rules and regulations;

(l) Failure to actually deploy a contracted worker without valid reason as determined
by the Department of Labor and Employment;

(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault; and

(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning

agency.

Illegal recruitment when committed by a syndicate or in large scale shall be considered an

offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate
if carried out by a group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to
commit the following prohibited acts:

(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent
(8%) per annum, which will be used for payment of legal and allowable placement fees
and make the migrant worker issue, either personally or through a guarantor or
accommodation party, postdated checks in relation to the said loan;

(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino

worker is required to avail of a loan only from specifically designated institutions,
entities or persons;

(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker

after the latter's employment contract has been prematurely terminated through no
fault of his or her own;
 (4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino
worker is required to undergo health examinations only from specifically designated
medical clinics, institutions, entities or persons, except in the case of a seafarer whose
medical examination cost is shouldered by the principal/shipowner;

(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino

worker is required to undergo training, seminar, instruction or schooling of any kind
only from specifically designated institutions, entities or persons, except for
recommendatory trainings mandated by principals/shipowners where the latter
shoulder the cost of such trainings;

(6) For a suspended recruitment/manning agency to engage in any kind of recruitment

activity including the processing of pending workers' applications; and

(7) For a recruitment/manning agency or a foreign principal/employer to pass on the

overseas Filipino worker or deduct from his or her salary the payment of the cost of
insurance fees, premium or other insurance related charges, as provided under the
compulsory worker's insurance coverage.

The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having ownership, control, management
or direction of their business who are responsible for the commission of the offense and the
responsible employees/agents thereof shall be liable.

In the filing of cases for illegal recruitment or any of the prohibited acts under this section,
the Secretary of Labor and Employment, the POEA Administrator or their duly authorized
representatives, or any aggrieved person may initiate the corresponding criminal action with
the appropriate office. For this purpose, the affidavits and testimonies of operatives or
personnel from the Department of Labor and Employment, POEA and other law
enforcement agencies who witnessed the acts constituting the offense shall be sufficient to
prosecute the accused.

In the prosecution of offenses punishable under this section, the public prosecutors of the
Department of Justice shall collaborate with the anti-illegal recruitment branch of the POEA
and, in certain cases, allow the POEA lawyers to take the lead in the prosecution. The POEA
lawyers who act as prosecutors in such cases shall be entitled to receive additional allowances
as may be determined by the POEA Administrator.

The filing of an offense punishable under this Act shall be without prejudice to the filing of
cases punishable under other existing laws, rules or regulations.