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EMPLOYER-EMPLOYEE RELATIONSHIP
1. Four-Fold Test
What is the 4-fold test of existence of employer-employee
relationship?
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee’s conduct.
2. KINDS OF EMPLOYMENT
a. PROBATIONARY EMPLOYMENT
b. REGULAR EMPLOYMENT
How does one become a regular employee?
Under the Labor Code, regular employment may be attained in either of
three (3) ways, namely:
1. By nature of work. - The employment is deemed regular when the
employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.
c. PROJECT EMPLOYMENT
What is the litmus test of project employment?
The litmus test of project employment, as distinguished from regular
employment, 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.
A true project employee should be assigned to a project which begins and
ends at determined or determinable times and be informed thereof at the
time of hiring.
d. SEASONAL EMPLOYMENT
Can a seasonal employee become a regular seasonal employee?
e. CASUAL EMPLOYMENT
What is the most important distinguishing feature of casual
employment?
The most important distinction is that the work or job for which he was
hired is merely incidental to the principal business of the employer and
such work or job is for a definite period made known to the employee at
the time of engagement.
f. FIXED-TERM EMPLOYMENT
What are the requisites in order for fixed-term employment to
be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of
employment are as follows:
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
3. JOB CONTRACTING
Is job contracting valid if the contractor-supplied employees
are engaged to perform not merely peripheral but core
jobs with the principal?
Yes, per the 2012 case of Digital Telecommunications Philippines,
Inc. v. Digitel Employees Union (DEU), where the Court recognized
the management prerogative to farm out any of its activities, regardless of
whether such activity is
peripheral or core in nature.
LABOR-ONLY CONTRACTING.
When is there labor-only contracting?
(a) The contractor does not have substantial capital or investments in the
form of tools, equipment, machineries, work premises, among others, and
the employees recruited and placed are performing activities
which are usually necessary or desirable to the operation of the
company, or directly related to the main business of the
principal within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or
outside the premises of the principal; OR
(b) The contractor does not exercise the right of control over the
performance of the work of the employee.
NOTE: Even if only one of the two (2) elements above is present, there is
labor-only contracting.
MANAGEMENT PREROGATIVES
What are management prerogatives?
Management prerogatives are granted to the employer to regulate every
aspect of their business, generally without restraint in accordance with
their own discretion and judgment. This privilege is inherent in the
right of employers to control and manage their enterprise
effectively. Such aspects of employment include 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, lay-off of workers and the discipline, dismissal and
recall of workers.
4. It should be done in good faith and with due regard to the rights of labor.
A. DISCIPLINE
What are the components of the right to discipline?
B. TRANSFER OF EMPLOYEES
C. PRODUCTIVITY STANDARD
D. GRANT OF BONUS
See discussion on this under Topic III (Labor Standards) above.
G. POST-EMPLOYMENT BAN
Is a non-compete clause valid?
Yes. The employer and the employee are free to stipulate in an employment
contract prohibiting the employee within a certain period from and after
the termination of his employment, from:
(1) starting a similar business, profession or trade; or
(2) working in an entity that is engaged in a similar business that might
compete with the employer.
The non-compete clause is agreed upon to prevent the possibility that upon
an employee’s termination or resignation, he might start a business or work
for a competitor with the full competitive advantage of knowing and
exploiting confidential and sensitive information, trade secrets, marketing
plans, customer/client lists, business practices, upcoming products, etc.,
which he acquired and gained from his employment with the former
employer. Contracts which prohibit an employee from engaging in business
in competition with the employer are not necessarily void for being in
restraint of trade.
HOURS OF WORK
A. COVERAGE/EXCLUSIONS
(Article 82, Labor Code)
D. MEAL BREAK
(Article 85, Labor Code)
What is the rule on time-off for regular meal?
Every employer is required to give his employees, regardless of sex, not less
than one (1) hour (or 60 minutes) time-off for regular meals.
E. WAITING TIME
(Article 84, Labor Code)
• What is covered by compensable working hours?
The following shall be considered as compensable hours worked:
a. All time during which an employee is required to be on duty or to be at
the employer’s premises or to be at a prescribed workplace; and
WAGES
COMMISSIONS
What is “commission”?
“Commission” is the recompense, compensation or reward of an
employee, agent, salesman, executor, trustee, receiver, factor, broker or
bailee, when the same is calculated as a percentage on the amount of
his transactions or on the profit of the principal.
Yes.
(a) In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid by
him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by
the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations
issued by the DOLE Secretary.
(d) Deductions for loss or damage under Article 114 of the Labor Code;
(e) Deductions made for agency fees from non-union members who
accept the benefits under the CBA negotiated
by the bargaining union. This form of deduction does not require the
written authorization of the non-bargaining union member concerned;
(f) Deductions for value of meal and other facilities;
(g) Deductions for premiums for SSS, PhilHealth, employees’
compensation and Pag-IBIG;
(h) Withholding tax mandated under the National Internal Revenue
Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer
which is already due;
(j) Deductions made pursuant to a court judgment against the worker
under circumstances where the wages may be the subject of attachment or
execution but only for debts incurred for food, clothing, shelter and medical
NON-DIMINUTION OF BENEFITS
Since there is no hard and fast rule which may be used and applied in
determining whether a certain act of the employer may be considered as
having ripened into a practice, the following criteria may be used to
determine whether an act has ripened into a company practice:
(1) The act of the employer has been done for a considerable period of time;
Example:
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC,4
where the act of the employer in granting separation pay to resigning
employees, despite the fact that the Labor Code does not grant it, was
considered an established employer practice.
BONUS
1 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
2 G.R. No. 74156, June 29, 1988, 163 SCRA 71.
3 G.R. No. 163419, Feb. 13, 2008.
4 G.R. No. 117394, Feb. 21, 1997.
WAGE DISTORTION/RECTIFICATION
REST PERIODS
1. COVERAGE, EXCLUSIONS
Who are covered by the law on holiday pay?
Generally, all employees are entitled to and covered by the law on holiday
pay.
Who are excluded from its coverage?
The following are excluded:
a. Those of the government and any of the political subdivisions, including
A. Regular Holidays
New Year’s Day - 1 January
Araw ng Kagitingan - 9 April
Maundy Thursday
Good Friday
Labor Day - 1 May
Independence Day - 12 June
National Heroes Day - 25 August (Last Monday of
August)
Bonifacio Day - 30 November
Christmas Day - 25 December
Rizal Day - 30 December
1. Regular Holidays
• If the employee did not work, he/she shall be paid 100 % of his/her
salary for that day. Computation: (Daily rate + Cost of Living Allowance) x
100%. The COLA is included in the computation of holiday pay.
• If the employee worked, he/she shall be paid 200 % of his/her regular
salary for that day for the first eight hours. Computation: (Daily rate +
(1) Those whose time and performance are supervised by the employer.
Here, there is an element of control and supervision over the manner as to
how the work is to be performed. A piece-rate worker belongs to this
category especially if he performs his work in the company premises; and
LEAVES
B. MATERNITY LEAVE
C. PATERNITY LEAVE
D. PARENTAL LEAVE
(R.A. No. 8972)
• What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo
parent to enable him/her to perform parental duties and responsibilities
where physical presence is required.
SERVICE CHARGE
Illustrative cases.
Yrasuegui v. Philippine Airlines, Inc., where the dismissal of
petitioner (an international flight attendant) due to his obesity was held
valid as an analogous cause under Article 282(e) of the Labor Code. The
Supreme Court, however, as an act of
social justice and for reason of equity, awarded him separation pay
equivalent to one-half (1/2) month’s pay for every year of service, including
his regular allowances. The Court observed that his dismissal occasioned by
his failure to meet the weight standards of his employer was not for serious
misconduct and does not reflect on his moral character.
RETIREMENT PAY
A. ELIGIBILITY
Who are covered under the retirement pay law?
The following employees are eligible to avail of retirement benefits under
Article 287 of the Labor Code:
1. All employees in the private sector, regardless of their position,
designation or status and irrespective of the method by which their wages
are paid;
2. Part-time employees;
3. Employees of service and other job contractors;
4. Domestic helpers or persons in the personal service of
another;
3. Underground mine workers;
4. Employees of government-owned and/or controlled corporations
organized under the Corporation Code (without original charters).
WOMEN WORKERS
c. PROHIBITED ACTS
• What are the prohibited acts against women under the Labor
Code?
Article 137 of the Labor Code and its implementing rule consider unlawful
the followings acts of the employer:
1. To discharge any woman employed by him for the purpose of
preventing such woman from enjoying maternity leave, facilities
and other benefits provided under the Labor Code;
2. To discharge such woman on account of her pregnancy, or while on
leave or in confinement due to her pregnancy;
3. To discharge or refuse the admission of such woman upon returning to
her work for fear that she may again be pregnant;
4. To discharge any woman or any other employee for having filed a
complaint or having testified or being about to testify under the
Labor Code; or
5. To require as a condition for or continuation of employment that a
woman employee shall not get married or to stipulate expressly or tacitly
that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely
by reason of marriage.
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
3 G.R. No. 162994, Sept. 17, 2004.
• Who are the persons who may be held liable for sexual
harassment?
Work, education or training-related sexual harassment is committed by any
employer, employee, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or training
or education environment, demands, requests or otherwise requires any
sexual favor from another, regardless of whether the demand, request or
requirement for submission is accepted by the object of said act.
Further, any person who directs or induces another to commit any act of
sexual harassment as defined in the law, or who cooperates in the
commission thereof by another without which it would not have been
committed, shall also be held liable under the law.
EMPLOYMENT OF MINORS
HOUSEHELPERS
Payment of wages:
1. To whom paid. - It should be made on time directly to the Kasambahay
to whom they are due in cash at least once a month.
2. Deductions, prohibition; when allowed. - The employer, unless
allowed by the Kasambahay through a written consent, shall make no
deductions from the wages other than that which is mandated by law such
as
for SSS, Philhealth or Pag-IBIG contributions.
3. Mode of payment. - It should be paid in cash and not by means of
promissory notes, vouchers, coupons, tokens, tickets, chits, or any object
other than the cash wage as provided for under this Act.
4. Pay slip. – The employer shall at all times provide the Kasambahay with
a copy of the pay slip containing the amount paid in cash every pay day, and
indicating all deductions made, if any. The copies of the pay slip shall be
If the Kasambahay leaves without cause, any unpaid salary due, not
exceeding the equivalent of 15 days work, shall be forfeited. In addition, the
employer may recover from the Kasambahay deployment expenses, if any,
if the services have been terminated within six (6) months from
employment.
c. Termination of employment initiated by the employer. - An
M. EMPLOYMENT OF HOMEWORKERS
• What is impairment?
“Impairment” refers to any loss, diminution or aberration of
psychological, physiological, or anatomical structure or function.
• What is disability?
“Disability” means (1) a physical or mental impairment that substantially
limits one or more psychological, physiological or anatomical functions of
an individual or activities of such individual; (2) a record of such an
impairment; or (3) being regarded as having such an impairment.
• What is handicap?
“Handicap” refers to a disadvantage for a given individual, resulting from
an impairment or a disability that limits or prevents the function or activity
that is considered normal given the age and sex of the individual.
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1. JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
DOLE SECRETARY