2018 Pointers

In Labor Law
DEAN ALIZEDNEY M. DITUCALAN

I. INTERPRETATION IN FAVOR OF LABOR.

Memorize Art. 4 of the Labor Code:

“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.”

Remember: “The employment status of a person is defined and prescribed by

law and not by what the parties say it should be. Equally important to consider
is that a contract of employment is impressed with public interest such that the
labor contract must yield to the common good. Thus, provisions of applicable
statutes are deemed written into the contract, and the parties are not at liberty
to insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other.” [Cherry J. Price, et al. v.
Innodata Phils. Inc., G.R. No. 178505, 30 September 2008]

II. Memorize FOUR-FOLD EMPLOYMENT TEST

1. The selection and engagement of the employees;

2. The payment of wages;
3. The power of dismissal;
4. The power to control the employees’ conduct.

But remember: Of these four tests or factors, the most important test is the
element of control, which has been defined as “one where the employer has
reserved the right to control not only the work to be achieved, but the manner
and method by which such work is to be achieved.”

Remember too: The power to control refers to the existence of the power and
not necessarily to the actual exercise thereof. It is not essential for the
employer to actually supervise the performance of duties of the employee; it is
enough that the employer has the right to wield that power.

III. EFFECT OF LABOR-ONLY CONTRACTING AND JOB CONTRACTING ARRANGEMENTS

LABOR-ONLY: The arrangement is illegal. Thus, the employer shall be deemed

liable as direct employer for the wages, monetary claims, and all other benefits in
the Labor Code, including SSS, Pag-ibig, etc.. In other words, the liability is for a
comprehensive purpose.

JOB-CONTRACTING: The arrangement is legal. Thus, the employer is viewed by law

only as indirect employer. But he is jointly and severally liable with the contactor
with respect to money claims (unpaid wages). In other words, the liability is for a
limited purpose.

IV. TRANSFER OF EMPLOYEE VIS-À-VIS MANAGEMENT PREROGATIVE

 GENERAL RULE: In the exercise of management prerogative, the employer has the
inherent right to transfer or assign an employee in the pursuance of its legitimate
business interest subject only to the condition that it be not motivated by
discrimination or bad faith.

When constitute constructive dismissal: when the transfer indicates to be an act

of discrimination, insensibility, or disdain by an employer which may become so
unbearable on the part of the employee that it could foreclose any choice by him
except to forego his continued employment.

Remember too: Transfer, even if due to promotion cannot be done without the
employee’s consent.

V. REGULAR EMPLOYEE

Memorize ART. 280 OF THE LABOR CODE:

“ART. 280. Regular and Casual Employment. - The provisions of written

agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.”

Remember: Two types of regular employees:

1) Those engaged to perform activities which are usually necessary or

desirable in the usual business or trade of the employer; and

2) Those who have rendered at least one year of service whether such
service is continuous or broken.

VI. LEARNER VS. APPRENTICE

Important Principles:
1. Both wage rates are below 75% of the statutory minimum wage
2. Unlike an apprentice, a learner automatically becomes an employee.
3. Apprentices become regular employees if program is not approved by DOLE.
4. A learner is a person hired as a trainee in industrial occupations which are non-
apprenticeable.
5. An apprentice is a worker covered by a written apprentice agreement with an
employer.

VII. WORKING CONDITIONS

 Take note of the following Articles.

ARTICLE 83 – Normal hours of work

ARTICLE 84 – Hours worked
ARTICLE 85 – Meal periods
ARTICLE 86 – Night shift differentials
ARTICLE 87 – Overtime work
ARTICLE 88 – Undertime not offset by overtime
ARTICLE 89 – Emergency overtime work
ARTICLE 91 – Right to weekly rest day
Article 94 – Right to a holiday pay
ARTICLE 95 – Right to service incentive

VIII. REGULAR HOLIDAYS VS. SPECIAL HOLIDAYS (SPECIAL DAYS)

1. If employee doesn’t work

a. During regular holidays, an employee is paid 100% of his regular daily
wage.
b. During special days, an employee receives no compensation at all
under the principle of “no work, no pay.”
2. If employee does work
a. During regular holiday, an employee is paid 200% of his regular wage
b. During special days, an employee is paid an additional compensation
of not less than 30% of his regular wage. If falls on his rest day, he will
be paid an additional compensation of not less than 50%.

IX. RULE ON SERVICE CHARGES

The rule on service charges under Article 96 applies only to establishments

collecting service charges, such as hotels, restaurants, lodging houses, night
clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and
similar enterprises.

X. LEGAL REQUIREMENTS FOR THE DEDUCTIBILITY OF FACILITIES

1. Proof that such facilities are customarily furnished by the trade;

2. The provision of the deductible facilities is voluntarily accepted in writing by the
employee; and
3. The facilities are charged at fair and reasonable value.

XI. RULE ON BONUS

Generally, bonus is not demandable or enforceable as a matter of right. But on

the basis of equitable considerations, long practice, agreement (e.g., CBA) and
other peculiar circumstances, bonus may become demandable and enforceable.

XII. RULES AND LEGAL CONSEQUENCES OF TERMINATION

 1. If termination is for a just cause, authorized cause, or for health reason PLUS
due process, the dismissal is legal.

2. If termination is WITHOUT just cause, authorized cause, or for health reason

PLUS due process, the dismissal is illegal.

3. If termination is WITHOUT just cause, authorized cause, or for health reason

WITHOUT due process, the dismissal is illegal.

4. If termination is for a just cause, authorized cause, or for health reason

WITHOUT due process, the dismissal is legal, but the employer is liable to pay
indemnity in the form of nominal damages.

Remember too: On the one hand, for dismissal under authorized cause,
the fine or sanction is “stiffer”; On the other hand, for dismissal under
just cause, the fine or sanction is “milder”.

5. If termination is for a cause, which later on proven to be non-existent, the

dismissal is not effective. Hence, employee should be reinstated and the
employer is not liable to pay any back wages or damages.

6. If the fact of termination is not substantiated, there is no dismissal to speak of.

XIII. RELIEFS AVAILABLE TO AN ILLEGALLY DISMISSED EMPLOYEE

1. Reinstatement without loss of seniority rights and other privileges;

2. Payment of full back wages, inclusive of allowances;
3. Payment of other benefits or their monetary equivalence;
4. Payment of damages
5. Attorney’s fees

Remember: payment of back wages are computed from the time the
compensation was withheld up to the time of actual reinstatement, except in
the case of payroll reinstatement. If reinstatement is not possible, computation
shall be up to the time of the finality of the decision PLUS payment of
separation pay in lieu of actual reinstatement.

XIV. SOME RULES ON REINSTATEMENT

1. The failure to allege reinstatement as one of the reliefs in the complaint for
illegal dismissal is not fatal.
2. When employee prayed for separation pay in lieu of reinstatement, he
forecloses reinstatement as a relief.
3. When supervening events rendered reinstatement moot and academic,
employee is entitled to separation pay. [.eg. declaration of insolvency by the
court, destruction of the establishment, closure of business, non-existence of
position at the time of reinstatement, old age, take-over by another company
without assumption of liability by the acquiring company]
 But remember the Doctrine of Strained Relations. The existence of strained
relations is a factual issue which must be raised before the Labor Arbiter f0r
the proper reception of evidence. The filing of the complaint per se for illegal
dismissal does not by itself justify the invocation of this doctrine. Take note that
in the Supreme Court’s rulings applying this doctrine, the common
denominator is the nature of the position of the employee. But refusal to be
reinstated indicates strained relations.

XV. INSTANCES FOR PAYMENT OF SEPARATION PAY

1. When ordered as payment in lieu of reinstatement.

2. When termination is due to closure of establishment or reduction of personnel.
3. When termination is due to disease.
4. When resignation pay or separation pay is a contractual obligation.
5. When employment is deemed terminated after the lapse of six (6) months in
cases involving bona-fide suspension of the operation of business or
undertaking.

Remember the San Miguel Test. As an established rule, the question of

whether separation pay should be awarded depends on the cause of the
dismissal and the circumstances. Under the San Miguel test, separation pay
may “exceptionally” be awarded as a “measure of social justice,” provided the
dismissal is not on serious misconduct and does not reflect the employees
moral character.

XVI. Memorize JURISDICTION OF LABOR ARBITER

1. Unfair labor practices cases;

2. Termination disputes.
3. Cases that workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment.
4. Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations.
5. Cases arising from any violation of Article 264 [renumbered as Art. 279] of the
Labor Code, including questions involving the legality of strikes and lockouts;
and
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (PhP5,000) regardless of whether
accompanied with a claim for reinstatement.

Remember:

Labor Arbiters have jurisdiction over wage distortion cases only in unorganized
establishment. In organized establishment, jurisdiction is vested with Voluntary
Arbitrators.

Labor Arbiters have jurisdiction over the issue of legality of strikes and
lockouts, except in strikes and lockouts in industries indispensable to the
national interest, in which cases, either with NLRC or DOLE Secretary.

XVII. Concept of Unfair Labor Practice

 Memorize this. An unfair labor practice act violates the right of workers to self-
organization, is inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in
an atmosphere of freedom and mutual respect, disrupts industrial peace and
hinders the promotion of healthy and stable labor-management relations.

Remember the following:

1. “Yellow Dog Contract” – An agreement which exacts from the workers as a

condition of employment, that they shall not join or belong to a labor
organization, or attempt to organize one, during their period of employment or
that they shall withdraw therefrom, in case they are already members of a labor
organization.

2. “Totality of Conduct Doctrine” – That expression of opinion by an employer,

though innocent in themselves, may be held to be constitutive of unfair labor
practice because of the circumstances under which they were uttered, the
history of the particular employer’s labor relations or anti-union bias or because
of their connection with an established collateral plan of coercion or
interference. An expression which might be permissibly uttered by one
employer, might, in the mouth of a more hostile employer, be deemed improper
and consequently actionable as an unfair labor practice.

3. “Surface bargaining” – defined as going through the motions of negotiating,

without any legal intent to reach an agreement.

4. “Blue-sky bargaining” – making exaggerated or unreasonable proposals.

XVIII. LABOR ORGANIZATIONS. CHARTERING AND CREATION OF A LOCAL CHAPTER.

Remember this. A duly registered federation or national union may directly create
local chapter by issuing a charter certificate indicating the establishment of the
local chapter. But the chapter only acquires legal personality for the purposes of
filing petition for certification election from the date it was issued a charter
certificate.

To become a full-fledge legitimate labor organization, the chapter must comply to

submit the following documents:

1. The names of the chapter’s officers, their addresses, and the principal
office of the chapter; and

2. The chapter’s constitution and by-laws: Provided, That where the chapter’s
constitution and by-laws are the same as that of the federation or the
national union, this fact shall be indicated accordingly.

XIX. LABOR ORGANIZATIONS.

CANCELLATION OF REGISTRATION.

Grounds:
 (1) Misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, minutes of
ratification, and the list of members who took part in the ratification;

(2) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers and the list of voters.

(3) Voluntary dissolution by the members.

But remember this. A petition for cancellation of union registration shall not
suspend the proceedings for certification election nor shall it prevent the filing of
a petition for certification election.

XX. COLLECTIVE BARGAINING

Remember:

1. The duty to bargain collectively means the performance of a mutual

obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment
including proposals for adjusting any grievances or questions arising
under such agreement and executing a contact incorporating such
agreements if requested by either party but such duty does not compel
any party to agree to a proposal or to make any concession.

2. Employer as Bystander. In all cases, whether the petition for

certification election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party thereto with
a concomitant right to oppose a petition for certification election. The
employer’s participation in such proceedings shall be limited to: (1)
being notified or informed of petitions of such nature; and (2) submitting
the list of employees during the pre-election conference should the
Med-Arbiter act favorably on the petition.