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LABOR LAW AND

SOCIAL LEGISLATION

2013 GOLDEN NOTES


UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
MANILA
The UST GOLDEN NOTES is the annual student-edited bar review
material of the University of Santo Tomas, Faculty of Civil Law.
Communications regarding the NOTES should be addressed to
the Academics Committee of the Team: Bar-Ops.

ADDRESS: Academics Committee


Team Bar-Ops
Faculty of Civil Law
University of Santo Tomas
España, Manila 1008

TEL. NO.: (02) 731-4027


(02) 4061611 loc. 8578

Academics Committee
Faculty of Civil Law
University of Santo Tomas
España, Manila 1008

All Rights Reserved by the Academics Committee of the Faculty of Civil Law of
the Pontifical and Royal University of Santo Tomas, the Catholic University of the
Philippines.

2013 Edition

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No. 01

Printed in the Philippines, April 2013.


ACADEMIC YEAR 2013-2014

CIVIL LAW STUDENT COUNCIL


VICTOR LORENZO L. VILLANUEVA PRESIDENT
MARIANE TINGCHUY VICE PRESIDENT INTERNAL
RONN ROBBY ROSALES VICE PRESIDENT EXTERNAL
MARIE SYBIL TROPICALES SECRETARY
RAFAEL LORENZ SANTOS TREASURER
LUIS ALFONSO E. ARTAIZ AUDITOR
GLORIA ANASTHASIA LASAM PUBLIC RELATIONS OFFICER

TEAM: BAR-OPS
BIENVENIDO L. MABULAC II CHAIRPERSON
VICENTE JAN PLATON III VICE-CHAIRPERSON
APRIL V. ENRILE SECRETARY
ERIKA PINEDA ASST. SECRETARY
CARLO ARTEMUS V. DIAZ HEAD, FINANCE COMMITTEE
WILFREDO P. SUDIO JR. ASST. HEAD, FINANCE COMMITTEE
MHAE ANN V. RIVERA ASST. HEAD, FINANCE COMMITTEE
CLARABEL ANNE R. LACSINA HEAD, HOTEL ACCOMMODATIONS COMMITTEE
VANNESSA ANNE VIRAY ASST. HEAD, HOTEL ACCOMMODATIONS COMMITTEE
HAZEL M. NAVAREZ ASST. HEAD, HOTEL ACCOMMODATIONS COMMITTEE
ARWIN V. CABANTING HEAD, LOGISTICS COMMITTEE
NATHANIEL LIBERATO ASST. HEAD, LOGISTICS COMMITTEE

ATTY. AL CONRAD B. ESPALDON


ADVISER
ACADEMICS COMMITTEE
ALJON D. DE GUZMAN CHAIRPERSON
MARK KEVIN U. DELLOSA VICE-CHAIR FOR ACADEMICS
ANTHONY M. ROBLES VICE-CHAIR FOR LAYOUT AND DESIGN
CLARABEL ANNE R. LACSINA MEMBER, LAYOUT AND DESIGN TEAM
RAFAEL LORENZ SANTOS MEMBER, LAYOUT AND DESIGN TEAM
JAMES BRYAN V. ESTELEYDES VICE-CHAIR FOR RESEARCH
MARIA JAMYKA S. FAMA MEMBER, RESEARCH TEAM
PAULINE BREISSEE GAYLE D. ALCARAZ MEMBER, RESEARCH TEAM
ROBBIE BAÑAGA MEMBER, RESEARCH TEAM
MONICA S. CAJUCOM MEMBER, RESEARCH TEAM
DOMINIC VICTOR C. DE ALBAN MEMBER, RESEARCH TEAM
OMAR DELOSO MEMBER, RESEARCH TEAM
ANNABELLA HERNANDEZ MEMBER, RESEARCH TEAM
MA. CRISTINA MANZO-DAGUDAG MEMBER, RESEARCH TEAM
WILLIAM RUSSELL MALANG MEMBER, RESEARCH TEAM
CHARMAINE PANLAQUE MEMBER, RESEARCH TEAM

LABOR LAW AND SOCIAL LEGISLATION COMMITTEE


LABOR LAW AND SOCIAL LEGISLATION COMMITTEE
MARK KEVIN U. DELLOSA
HEAD
ASST. LABOR LAW AND SOCIAL LEGISLATION
LARRA MARIZ C. DOMINGO
COMMITTEE HEAD
ASST. LABOR LAW AND SOCIAL LEGISLATION
LV JO T. ESCARTIN
COMMITTEE HEAD
KEVIN AMPUAN MEMBER
KRISTINA DABALOS MEMBER
MA. MORENI D. SALANDANAN MEMBER
LEANDRO SANTOS III MEMBER
JINTANA YANTAKOSOL MEMBER

ATTY. JOEVEN D. DELLOSA


ADVISER
FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS

ACADEMIC OFFICIALS

ATTY. NILO T. DIVINA REV. FR. ISIDRO C. ABAÑO, O.P.


DEAN REGENT

ATTY. ARTHUR B. CAPILI


FACULTY SECRETARY

ATTY. ELGIN MICHAEL C. PEREZ


LEGAL COUNSEL
UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC

ATTY. AMADO E. TAYAG


SWDB COORDINATOR

LENY G. GADANIA, R.G.C.


GUIDANCE COUNSELOR
OUR DEEPEST APPRECIATION TO OUR
MENTORS & INSPIRATION

DEAN ANTONIO H. ABAD, JR.

ATTY. JOEVEN D. DELLOSA

ATTY. SAMSON S. ALCANTARA

ATTY. ARNOLD E. CACHO

USEC. JOSEPHUS JIMENEZ

ATTY. MARLON J. MANUEL

For being our guideposts in understanding the intricate


sphere of Labor Law and Social Legislation.
- Academics Committee 2013
DISCLAIMER

THE RISK OF USE, MISUSE OR NON-


USE OF THIS BAR REVIEW MATERIAL
SHALL BE BORNE BY THE USER/
NON-USER.
Labor Law and Social Legislation

LEGEND 2. Labor disputes arising from collective bargaining


BFOQ - Bona Fide Occupational Qualification or other concerted activity respecting such terms
BLR - Bureau of Labor Relations and conditions.
CB - Collective Bargaining
CBA - Collective Bargaining Agreement Q: What matters may properly fall under the term
CE - Certification Election “labor law”?
DOLE - Department of Labor and
Employment A: The term “labor law” covers the following:
Ee - Employee 1. Statutes passed by the State to promote the
Er - Employer welfare of the workers and Ees and regulate their
LA - Labor Arbiter relations with their Ers.
LC - Labor Code 2. Judicial decisions applying and interpreting the
LLO - Legitimate Labor Organization aforesaid statutes.
LOA - Leave of Absence 3. Rules and regulations issued by administrative
NCMB - National Conciliation and Mediation agencies, within their legal competence, to
Board implement labor statutes.
NLRC - National Labor Relations Commission
NSD - Night Shift Differential Q: What is the purpose of labor legislation? (2006
OFW - Overseas Filipino Worker Bar Question)
OT - Overtime
PCE - Petition for Certification Election A: The purpose of labor legislation is to afford
POEA - Philippine Overseas Employment protection to labor, promote full employment, ensure
Administration equal work opportunities regardless of sex, race or
RAB - Regional Arbitration Branch creed and regulate the relations between workers
RD - Regional Director and Ers. The State shall assure the rights of workers
RH - Regular Holiday to self-organization, collective bargaining (CB),
RTWPB - Regional Tripartite Wages and security of tenure and just and humane conditions of
Productivity Boards work.
RW - Regular Wage
RWD - Regular Working Days Q: What are the classifications of labor laws?
SIL - Service Incentive Leave
SLE - Secretary of Labor and Employment A:
ULP - Unfair Labor Practice 1. Labor Standards – That which sets out the
UT - Undertime minimum terms, conditions and benefits of
VA - Voluntary Arbitrator employment that Ers must provide or comply
VR - Voluntary Recognition with and to which Ees are entitled as a matter of
WD - Wage Distortion legal right.
WRD - Weekly Rest Day th
e.g. 13 month pay

LABOR LAW 2. Labor Relations – Defines and regulates the


status, rights and duties, and the institutional
Q: What is labor? mechanisms, that govern the individual and
collective interactions of Ers, Ees or their
A: It is the exertion by human beings of physical or representatives. It is concerned with the
mental efforts, or both, towards the production of stabilization of relations of Ers and Ees and seeks
goods and services. to forestall and adjust the differences between
them by the encouragement of CB and the
Q: What is labor Law? settlement of labor disputes through conciliation,
mediation and arbitration.
A: The law that defines State policies on labor and
employment and governs the rights and duties of the e.g. Collective Bargaining Negotiations
employer (Er) and employees (Ee) with respect to:
1. The terms and conditions of employment, and 3. Social Legislation – All laws passed by the State
to promote public welfare. It includes statutes

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 8
FUNDAMENTAL PRINCIPLES AND POLICIES

intended to enhance the welfare of the people Secretary of Labor and Employment, G.R. No. 85867,
even where there is no Er-Ee relationship. (1993)].

e.g. GSIS Law, SSS Law, Philhealth benefits, Q: What are the requisites before past practices
Agrarian Laws would be considered as a source of labor law?

Q: How do the provisions of the law on labor A: There must be:


relations interrelate, if at all, with the provisions 1. Voluntarily institution by Er without any legal
pertaining to labor standards? (2003 Bar Question) compulsion
2. A passage of time- should have been done over a
A: The law on Labor Relations provides for rights and long period of time, and must be shown to have
procedures by which workers may obtain from their been consistent and deliberate [American Wire
Er benefits which are over and above the minimum and Cable Daily Rated Employees Union vs.
terms and conditions of employment set by labor American Wire and Cable Co., Inc., G.R. No.
standards law. Labor Standards law alone does not 155059, (2005)].
guarantee lasting industrial peace. It is assured
through Labor Relations law which enables workers Note: No passage of time is required for a company policy
to obtain better benefits guaranteed by labor to become a source of labor law.
standards laws and by providing for a mechanism to
settle disputes between the Er and his Ees. Q: What is a contract of labor?

Q: Is there any distinction between Labor Legislation A: It is a consensual, nominate, principal, and
and Social Legislation? Explain. commutative contract whereby one person, called
the Er, compensates another, called the laborer,
A: Labor Legislation is sometimes distinguished from worker or Ee, for the latter’s service. It is relationship
social legislation by the former referring to labor impressed with public interest in keeping with our
statutes, like Labor Relations Law and Labor constitutional policy of social justice.
Standards, and the latter to Social Security Laws.
Labor legislation focuses on the rights of the worker Q: What are the essential characteristics of a
in the workplace. contract of labor?

Social Legislation are those laws that provide A:


particular kinds of protection or benefits to society or 1. Er freely enters into a contract with the Ee;
segments thereof in furtherance of social justice. 2. Er can select who his Ee will be;
3. Er can dismiss the Ee; the Ee in turn can quit his
Note: All Labor laws are social legislations, but not all social job;
legislations are labor laws. 4. Er must give remuneration; and
5. Er can control and supervise the conduct of the
Q: What are the sources of labor laws? Ee.

A:
1. Labor Code (LC) and other related special
legislation [including their respective
Implementing Rules and Regulations (IRR)]
2. Contracts
3. Collective Bargaining Agreement (CBA)
4. Company practice
5. Company policies

Q: How does the CBA operate as a source of law?

A: The CBA is the norm of conduct between Er and


Ees and compliance therewith is mandated by the
express policy of the law [DOLE Philippines, Inc.,
vs. Pawis ng Makabayang Obrero (PAMAO-NFL), G.R.
No. 146650, (2003) in citing E. Razon, Inc. vs.

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9 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

FUNDAMENTAL PRINCIPLES AND POLICIES nationalism, and encourage their involvement in


public and civic affairs.
CONSTITUTIONAL PROVISIONS
6. Sec. 14, Art. II - The State recognizes the role of
Q: What are the constitutional mandates on Labor women in nation-building, and shall ensure the
Law? fundamental equality before the law of women
and men.
A:
1. Sec. 3, Art. XIII – The State shall afford full 7. Sec. 18, Art. II – The State affirms labor as a
protection to labor, local and overseas, organized primary social economic force. It shall protect the
and unorganized, and promote full employment rights of workers and promote their welfare.
and equality of employment opportunities for all.
8. Sec. 20, Art. II – The State recognizes the
It shall guarantee the rights of all workers to self- indispensable role of the private sector,
organization, collective bargaining and encourages private enterprise and provide
negotiations, and peaceful concerted activities, incentives to needed investments.
including the right to strike in accordance with
law. They shall be entitled to security of tenure, 9. Sec. 1, Art. III - No person shall be deprived of
humane conditions of work, and a living wage. life, liberty, or property without due process of
They shall also participate in policy and decision- law, nor shall any person be denied the equal
making processes affecting their rights and protection of the laws.
benefits as may be provided by law.
10. Sec. 4, Art. III - No law shall be passed abridging
The State shall promote the principle of shared the freedom of speech, of expression, or of the
responsibility between workers and employers press, or the right of the people peaceably to
and the preferential use of voluntary modes in assemble and petition the government for
settling disputes, including conciliation, and shall redress of grievances.
enforce their mutual compliance therewith to
foster industrial peace. 11. Sec. 8, Art. III – The right of the people, including
those employed in the public and private sectors,
The State shall regulate the relations between to form unions, associations, or societies for
workers and employers, recognizing the right of purposes not contrary to law shall not be
labor to its just share in the fruits of production abridged.
and the right of enterprises to reasonable returns
to investments, and to expansion and growth. 12. Sec. 10, Art. III – No law impairing the obligation
of contracts shall be passed.
2. Sec. 9, Art. II – The State shall promote a just and
dynamic social order that will ensure the 13. Sec. 16, Art. III – All persons shall have the right
prosperity and independence of the nation and to a speedy disposition of their cases before all
free the people from poverty through policies judicial, quasi-judicial or administrative bodies.
that provide adequate social services, promote
full employment, a rising standard of living, and 14. Sec. 18 (2), Art. III – No involuntary servitude in
an improved quality of life for all. any form shall exist except as a punishment for a
crime whereof the party shall have been duly
3. Sec. 10, Art II - The State shall promote social convicted.
justice in all phases of national development.
15. Sec. 1, Art. XIII - The Congress shall give highest
4. Sec. 11, Art II - The State values the dignity of priority to the enactment of measures that
every human person and guarantees full respect protect and enhance the right of all the people to
for human rights. human dignity, reduce social, economic, and
political inequalities, and remove cultural
5. Sec. 13, Art. II - The State recognizes the vital role inequities by equitably diffusing wealth and
of the youth in nation-building and shall promote political power for the common good.
and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 10
FUNDAMENTAL PRINCIPLES AND POLICIES

To this end, the State shall regulate the and convenience of the public. The protection to
acquisition, ownership, use, and disposition of labor clause in the Constitution is not designed to
property and its increments. oppress or destroy capital [Capili vs. NLRC, G.R. No.
117378, (1997)].
16. Sec. 2, Art. XIII - The promotion of social justice
shall include the commitment to create The law in protecting the rights of the Ees authorizes
economic opportunities based on freedom of neither oppression nor self-destruction of the Er
initiative and self-reliance. [Pacific Mills Inc. vs. Alonzo, G.R. No. 78090, (1991)].
It should be made clear that when the law tilts the
17. Sec. 13, Art. XIII – The State shall establish a scale of justice in favor of labor, it is but a recognition
special agency for disabled persons for their of the inherent economic inequality between labor
rehabilitation, self-development and self-reliance and management. The intent is to balance the scale
and their integration into the mainstream of of justice; to put the two parties on relatively equal
society. positions. There may be cases where the
circumstances warrant favoring labor over the
18. Sec. 14, Art. XIII – The State shall protect working interests of management but never should the scale
women by providing safe and healthful working be so tilted if the result is an injustice to the
conditions, taking into account their maternal employer. Justitia nemini neganda est (Justice is to be
functions, and such facilities and opportunities denied to none) [Philippine Geothermal, Inc. vs. NLRC
that will enhance their welfare and enable them and Edilberto M. Alvarez, G.R. No. 106370, (1994)].
to realize their full potential in the service of the
nation. NEW CIVIL CODE AND OTHER LAWS

Q: What is the State policy on labor as found in the Q: What are other related laws to labor?
Constitution (Sec. 3, Art. XIII)?
A:
A: 1. New Civil Code (NCC)
1. Afford full protection to labor a. Art. 19 – Every person must, in the exercise
2. Promote full employment of his rights and in the performance of his
3. Ensure equal work opportunities regardless of duties, act with justice, give everyone his
sex, race, or creed due, and observe honesty and good faith.
4. Assure the rights of workers to self-organization, b. Art. 1700 - The relations between capital
security of tenure, just and humane conditions of and labor are not merely contractual. They
work, participate in policy and decision-making are so impressed with public interest that
processes affecting their right and benefits labor contracts must yield to the common
5. Regulate the relations between Ers and workers good. Therefore, such contracts are subject
to the special laws on labor unions,
Q: What are the basic rights of workers guaranteed collective bargaining, strikes and lockouts,
by the Constitution (Sec. 3, Art. XIII)? closed shop, wages, working conditions,
hours of labor and similar subjects.
A: The Right to: c. Art. 1701 - Neither capital nor labor shall
1. Security of tenure act oppressively against the other, or
2. Living wage impair the interest or convenience of the
3. Humane working conditions public.
4. Share in the fruits of production d. Art. 1702 - In case of doubt, all labor
5. Self-organization legislation and all labor contracts shall be
6. Collective bargaining and negotiation construed in favor of the safety and decent
7. Engage in peaceful concerted activities, including living for the laborer.
the right to strike e. Art. 1703 - No contract which practically
8. Participate in policy and decision making amounts to involuntary servitude, under
processes any guise whatsoever, shall be valid.
f. Art. 1704 - In collective bargaining, the
Q: What is the principle of non-oppression? labor union or members of the board or
committee signing the contract shall be
A: The principle mandates capital and labor not to act liable for non-fulfillment thereof.
oppressively against each other or impair the interest

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11 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

g. Art. 1705 - The laborer's wages shall be n. Home Development Mutual Fund Law of
paid in legal currency. 2009
h. Art. 1706 - Withholding of the wages, o. The Magna Carta of Women
except for a debt due, shall not be made by p. Comprehensive Agrarian Reform Law as
the employer. amended by R.A. 9700
i. Art. 1707 - The laborer's wages shall be a
lien on the goods manufactured or the LABOR CODE
work done.
j. Art. 1708 - The laborer's wages shall not be Q: What is the aim of labor law?
subject to execution or attachment, except
for debts incurred for food, shelter, A: The aim of labor law is social justice.
clothing and medical attendance.
k. Art. 1709 - The employer shall neither seize Q: What is social justice?
nor retain any tool or other articles
belonging to the laborer. A: Social Justice is “neither communism, nor
l. Art. 1710 - Dismissal of laborers shall be despotism, nor atomism, nor anarchy,” but the
subject to the supervision of the humanization of laws and the equalization of social
Government, under special laws. and economic force by the State so that justice in its
rational and objectively secular conception may at
2. Revised Penal Code (RPC) least be approximated. Social Justice means the
Art. 289 – Formation, maintenance and promotion of the welfare of all the people, the
prohibition of combination of capital or labor adoption by the government of measures calculated
through violence or threats. – Any person to insure economic stability of all the competent
who, for the purpose of organizing, elements of society, through the maintenance of a
maintaining or preventing coalitions or proper economic and social equilibrium in the
capital or labor, strike of laborers or lock-out interrelations of the members of the community,
of employees, shall employ violence or constitutionally, through the adoption of measures
threats in such a degree as to compel or legally justifiable, or extra-constitutionally, through
force the laborers or employers in the free the exercise of powers underlying the existence of all
and legal exercise of their industry or work, governments on the time-honored principle of salus
if the act shall not constitute a more serious populi est suprema lex [Calalang vs. Williams, G.R.
offense in accordance with the provisions of No. 47800, (1940)].
the RPC.
Q: What are the limitations in invoking the principle
3. Special Laws of social justice?
a. E.O. 180 - Providing guidelines for the
exercise of the Right to Organize of A:
Government Employees, creating a 1. Not to undermine property rights resulting in
Public Sector Labor-Management confiscation [Guido vs.Rural Progress Adm, L-
Council, and for other purposes 2089, (1949)]
b. R.A. 8291 - Government Service 2. May only protect the laborers who come to court
Insurance Act of 1997 with clean hands [Phil.Long Distance Telephone
th
c. 13 Month Pay Law Co. vs. NLRC, G.R. 80609, (1988)]
d. Retirement Pay Law 3. Never result to an injustice or oppression of the
e. SSS Law Er [Phil.Geothermal Inc. vs. NLRC, G.R. No.
f. Paternity Leave Act 106370, (1994)]
g. Anti – Child Labor Act
h. Anti – Sexual Harassment Act Q: May social justice as a guiding principle in labor
i. Magna Carta for Public Health Workers law be so used by the courts in sympathy with the
j. Solo Parents Welfare Act of 2000 working man if it collides with the Equal protection
k. National Health Insurance Act as clause of the Constitution? (2003 Bar Question)
amended by R.A. 9241
A: Yes. The State is bound under the Constitution to
l. Migrant Workers and Overseas Filipinos
afford full protection to Labor and when conflicting
Act of 1995 as amended by RA 10022
interests collide and they are to be weighed on the
m. PERA Act of 2008
scales of social justice, the law should accord more

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 12
FUNDAMENTAL PRINCIPLES AND POLICIES

sympathy and compassion to the less privileged created by special (original) charter from Congress
workingman [Fuentes v. NLRC, 266 SCRA 24, (1997)]. are subject to Civil Service rules.

However it should be borne in mind that social justice Art. 3, Declaration of Basic Policy
ceases to be an effective instrument for the
“equalization of the social and economic forces” by Q: What is the policy of the State on labor as found
the State when it is used to shield wrongdoing in the LC?
[Corazon Jamer v. NLRC, 278 SCRA 632 (1997)].
A: It is the policy of the State to:
Q: What agency exercises the “rule-making power” 1. Afford full protection to labor
granted in the Labor Code? 2. Promote full employment
3. Ensure equal work opportunities regardless of sex,
A: The Department of Labor and Employment (DOLE) race, or creed
thru the Secretary of Labor and Employment (SLE) 4. Assure the rights of workers to self organization,
and other Government agencies charged with the security of tenure, just and humane conditions of
administration and enforcement of the LC or any of work, participate in policy and decision-making
its parts shall promulgate the necessary IRRs. processes affecting their right and benefits
5. Regulate the relations between Ers and workers.
Note: Such rules and regulations shall become effective 15
days after announcement of their adoption in newspapers
of general circulation. Art. 4, Construction in favor of Labor

Q: What are the limitations to the “rule-making Q: What is “Compassionate Justice”?


power” given to the Secretary of Labor and
The social justice policy mandates a compassionate
Employment and other Government agencies?
attitude toward the working class in its relation to
management. In calling for protection to labor, the
A: It must:
Constitution does not condone wrong doing by the
1. Be issued under the authority of law
Ee. However, it urges a moderation of the sanctions
2. Not be contrary to law and the Constitution
that maybe applied to him in the light of the many
disadvantages that weigh heavily on him like an
Q: To whom shall all rights and benefits under the
albatross on his neck.
Labor Code apply?
It is disregarding rigid rules and giving due weight to
A: GR: All rights and benefits granted to workers all equities of the case [Gandara Mill Supply and
under the LC shall apply alike to all workers, Milagros Sy vs. NLRC and Silvestre Germano, G.R.
whether agricultural or non-agricultural. 126703, (1998)].

XPNs: e.g. An Ee who was validly dismissed may still be


1. Government Ees given severance pay.
2. Ees of government corporations created by
special or original charter Q: What is the concept of liberal approach in
3. Foreign governments interpreting the Labor Code and its IRR?
4. International agencies
5. Corporate officers/ intra-corporate disputes A: The LC and its IRR, being remedial in character
which fall under P.D. 902-A and now fall must be accorded the broadest scope and most
under the jurisdiction of the regular courts beneficial interpretation. It is only in this way that
pursuant to the Securities Regulation Code. their purpose, which is to remedy evils of
6. Local water district except where NLRC’s exploitation, manipulation and oppression, may be
jurisdiction is invoked. achieved. Strict adherence to the letter of labor law is
7. As may otherwise be provided by the LC. not allowed; the spirit thereof prevails and must be
given effect. Under Art. 4 of the LC, all doubts in the
Q: What is the test in determining whether a GOCC implementation and interpretation of the provisions
is subject to the provisions of the LC? thereof, including its IRR, are to be resolved in favor
of labor.
A: It is determined by the manner of their creation.
Q: Are all labor disputes resolved in favor of labor?
Government corporations incorporated under the
Corporation Code are covered by the LC while those

UNIVERSITY OF SANTO TOMAS


13 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

A: No. The law also recognizes that management has terms and conditions of employment, except
rights which are also entitled to respect and as otherwise provided under the LC.
enforcement in the interest of fair play [St. Luke’s
Medical Center Ees Ass’n vs. NLRC, G.R. No. 162053, Art. 212, Definitions
(2007)].
Q: Who is an employer?
Art. 166, Policy
A: Any person acting in the interest of an Er, directly
Q: What is the policy of the State in relation to or indirectly. The term does not include a labor
Employees’ Compensation and State Insurance organization or any of its officers and agents, except
Fund? when acting as an Er. (Art. 212[e], LC)

A: The State shall promote and develop a tax-exempt An Er is defined as any person or entity that employs
Ees’ compensation program whereby Ees and their the services of others; one for whom work is done
dependents, in the event of work-connected and who pays their wages of salaries; any person
disability or death, may promptly secure adequate acting in the interest of an Er; refers to the enterprise
income benefits and medical related benefits. [Art. where the labor organization operates or seeks to
166, LC] operate. (Sec.1[s], Rule I, Book V, IRR)

Q: What is the purpose of a Workmen’s Note: The term “employer” is not restricted to business
Compensation Act? owners alone because it includes any person as long as he
acts in the interest of the Er.
A: The primary purpose of a Workmen’s
Compensation Act is to provide compensation for Q: When is a labor organization deemed an
disability or death resulting from occupational employer?
injuries or diseases, or accidental injury to, or death
of Ees. A: When it is acting as such in relation to persons
rendering services under hire, particularly in
Art. 211, Declaration of Policy connection with its activities for profit or gain.

Q: What are the policy objectives of our Labor Note: The mere fact that respondent is a labor union does
Relations law? not mean that it cannot be considered an Er for persons
who work for it. Much less should it be exempted from
labor laws [Bautista vs. Inciong, G.R. No. L-52824, (1988)].
A: The state aims to promote:
1. Free CB and negotiations, including
Q: Who is an employee?
voluntary arbitration, mediation and
conciliation as modes of settling labor or
A: The term “employee” covers:
industrial disputes;
1. Any person in the employ of the Er
2. Free trade unionism;
2. Any individual whose work has ceased as a result
3. Free and voluntary organization of a strong
of or in connection with any current labor
and united labor movement;
dispute or because of any unfair labor practice if
4. Enlightenment of workers concerning their
he has not obtained any other substantially
rights and obligations as union members and
equivalent and regular employment
as Ees;
3. One who has been dismissed from work but the
5. Adequate administrative machinery for the
legality of dismissal is being contested in a forum
expeditious settlement of labor or industrial
of appropriate jurisdiction. (D.O. No. 40-03)
disputes;
6. Stable but dynamic and just industrial peace; Note: The term shall not be limited to the Ees of a
7. Participation of workers in the decision- particular Er unless the LC explicitly states.
making processes affecting their rights,
duties and welfare; Any Ee, whether employed for a definite period or not,
8. Truly democratic method of regulating the shall, beginning on the first day of service, be considered an
relations between the Ers and Ees by means Ee for purposes of membership in any labor union. (Art.
of agreements freely entered into through 277[c], LC)
CB, no court or administrative agency or
official shall have the power to set or fix Q: What is a labor dispute?
wages, rates of pay, hours of work or other

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FUNDAMENTAL PRINCIPLES AND POLICIES

A: A labor dispute includes any controversy or matter d. Contract administration or personnel policy
concerning: disputes – E.g. Non-compliance with CBA
1. Terms and conditions of employment, or provision (ULP if gross non-compliance with
2. The association or representation of persons in economic provisions); disregard of grievance
negotiating, fixing, maintaining, changing or machinery; non observance of unwarranted
arranging the terms and conditions of use of union security clause; illegal or
employment unreasonable personnel management policies;
3. Regardless of whether the disputants stand in violation of no-strike/no-lockout agreement
the proximate relation of Er and Ee. (Art. 212[l],
LC) e. Employment tenure disputes – E.g. Non-
regularization of Ees; non-absorption of labor-
Q: What are the tests on whether a controversy is a only contracting staff; illegal termination; non-
labor dispute? issuance of employment contract

A: Q: Who are the parties to a labor dispute?


1. As to nature – It depends on whether the dispute
arises from Er-Ee relationship, although A:
disputants need not be proximately Er or Ee of 1. Primary parties are the Er, Ees and the union.
another. 2. Secondary parties are the voluntary arbitrator,
2. As to subject matter – The test depends on agencies of DOLE, NLRC, SLE and the Office of the
whether it concerns terms or conditions of President.
employment or association or representation of
persons in negotiating, fixing, maintaining or Q: What is an inter-union dispute?
changing terms or conditions of employment.
A: Any conflict between and among legitimate labor
Q: What are the kinds of labor disputes? unions involving representation questions for the
purposes of CB or to any other conflict or dispute
A: between legitimate labor unions.
1. Labor standard disputes
a. Compensation – E.g. Underpayment of Q: What is an intra-union dispute?
minimum wage; stringent output quota; illegal
pay deductions A: Any conflict between and among union members,
b. Benefits – E.g. Non-payment of holiday pay, OT grievances arising from any violation of the rights and
pay or other benefits conditions of membership, violation of or
c. Working Conditions – E.g. Unrectified work disagreement over any provision of the union’s
hazards constitution and by-laws, or disputes from chartering
or affiliation of union.
2. Labor relations disputes
a. Organizational right disputes/ Unfair Labor Q: What are rights disputes?
Practice (ULP) – E.g. Coercion, restraint or
interference in unionization efforts; reprisal or A: They are claims for violations of a specific right
discrimination due to union activities; arising from a contract, i.e. CBA or company policies.
company unionism; ULP, strike or lockout;
union members’ complaint against union Q: What are interest disputes?
officers
A: They involve questions on “what should be
b. Representation disputes – E.g. Uncertainty as included in the CBA.” Strictly speaking, the parties
to which is the majority union; determination may choose a voluntary arbitrator to decide on the
of appropriate CB unit; contests for recognition terms and conditions of employment, but this is
by different sets of officers in the same union impracticable because it will be a value judgment of
the arbitrators and not of the parties.
c. Bargaining disputes – E.g. Refusal to bargain;
bargaining in bad faith; bargaining deadlock; Q: What are “contract–negotiation disputes”?
economic strike or lockout
A: These are disputes as to the terms of the CBA.

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15 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

Q: What are “contract–interpretation disputes”? A: Yes. The Code of Discipline involves security of
tenure and loss of employment — a property right. It
A: These are disputes arising under an existing CBA, is time that management realizes that to attain
involving such matters as the interpretation and effectiveness in its conduct rules, there should be
application of the contract, or alleged violation of its candidness and openness by Management and
provisions. participation by the union, representing its members.
In fact, our Constitution has recognized the principle
Art. 255, Exclusive Bargaining Representation and of shared responsibility between Ers and workers and
Worker’s Participation in Policy and Decision- has likewise recognized the right of workers to
Making participate in policy and decision-making process
affecting their rights [PAL vs. NLRC, G.R. No. 85985,
Q: Who shall be the bargaining representative of (1993)].
the employees for purposes of collective bargaining?
Q: What is the principle of codetermination? (2007
A: The labor organization designated or selected by Bar Question)
the majority of the Ees in an appropriate collective
bargaining unit shall be the exclusive representative A: It refers to the right of workers to participate in
of the Ees in such unit for the purpose of CB. policy and decision-making process affecting their
However, an individual Ee or group of Ees shall have rights and benefits [PAL vs. NLRC, G.R. No. 85985
the right at any time to present grievances to their Er. (1993); Art. XIII, Sec. 3, 1987 Constitution].
(Art. 255, LC, as amended by Sec. 22 of R.A. No. 6715,
1989) Q: May an employer solicit questions, suggestions
and complaints from employees who are
Q: What is the extent of the worker’s right to represented by a union?
participate in policy and decision-making processes
in a company? A: No, unless:
1. The CB representative executes an agreement
A: Such right refers not only to formulation of waiving the right to be present on any occasion
corporate programs and policies but also to when Ee grievances are being adjusted by the Er;
participation in grievance procedures and voluntary and
modes of settling disputes. 2. Er acts strictly within the terms of his waiver
agreement.
Q: Explain the extent of the workers’ right to
participate in policy and decision-making process as Q: The hotel union filed a Notice of Strike with the
provided under Art. XIII, Sec. 13 of the 1987 National Conciliation and Mediation Board (NCMB)
Constitution. Does it include membership in the due to an unfair labor practice against the Diamond
Board of Directors of a corporation? (2008 Bar Hotel who refused to bargain with it. The hotel
Question) advised the union that since it was not certified by
the DOLE as the exclusive bargaining agent, it could
A: No. The Supreme Court recognized the right of the not be recognized as such. The union sought to
union to participate in policy formulation and bargain for members only. May the Union bargain
decision-making process on matters affecting the collectively?
union members’ rights, duties and welfare. However,
such participation of the union in committees of the A: No. Art. 255 of the LC declares that only the labor
Er is not in the nature of a co-management control of organization designated or selected by the majority
the business. Impliedly, therefore, workers’ of the Ees in an appropriate CB unit is the exclusive
participatory right in policy and decision-making representative of the Ees in such unit for the purpose
processes does not include the right to put a union of CB. The union is admittedly not the exclusive
member in a corporation’s Board of Directors. representative of the majority of the Ees of the hotel,
[Manila Electric Company vs. Quisumbing, G.R. No. hence, it could not demand from the hotel the right
127598, (1999)]. to bargain collectively in their behalf [Manila
Diamond Hotel vs. Manila Diamond Hotel Ees Union,
Q: May the management be compelled to share with G.R. No. 158075, (2006)].
the union or its employees its prerogative of
formulating a Code of Discipline? Q: Who is a managerial employee?

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FUNDAMENTAL PRINCIPLES AND POLICIES

A: The person who is vested with the powers or Mills, Inc., et al. v. NLRC, et al. G.R. No. 77859, May
prerogatives to lay down and execute management 25, 1988].
policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline Ees. Q: May the employer be allowed to dismiss an
employee and let him explain later? Why?
Q: Who is a supervisory employee?
A: No. While the procedure laid down by the law for
A: The person who effectively recommends such the dismissal of an Ee need not be observed to the
managerial actions if the exercise of such authority is letter of the law, at least it must be done in the
not merely routinary or clerical in nature but requires natural sequence of notice, hearing and judgment.
the use of independent judgement. Dismissing the Ee and let him explain later is not in
accord with the requirement of due process
Q: Who are rank-and-file employees? [Batangas Laguna Tayabas Bus Co. v. NLRC, et al. G.R.
No. 94429, May 29, 1992].
A: Those persons who are neither Managerial nor
Supervisory Ees are considered rank-and file. Q: Under what circumstances may the termination
of employees be suspended by the SLE?
Art. 277, Miscellaneous Provisions
A: The SLE may suspend the effects of the
Q: What is the right to security of tenure? termination in the event of a prima facie finding by
the appropriate official of the DOLE before whom
A: The right to security of tenure connotes that no such dispute is pending that the termination may
worker shall be dismissed upon employment without cause a serious labor dispute or is in implementation
cause and without due process. of a mass lay-off. (Art. 277(b), as amended by Sec. 33,
R.A 6715)
Q: What is the worker’s right to notice and hearing
prior to dismissal? Q: Who has the burden of proving the existence of a
valid or authorized cause of termination?
A: Art. 277 (b) of the LC provides that:
1. The Er shall furnish the Ee whose employment is A: The Er has the burden of proof in proving that the
sought to be terminated a written notice termination was for a valid or authorized cause. The
containing a statement of the causes for existence of a just or authorized cause for dismissal
termination; and cannot be presumed. A contrary rule would
2. Afford the Ee ample opportunity to be heard and contravene the constitutional policy of affording
to defend himself protection to the worker. (Art. 277, LC)

Note: In connection with dismissals for authorized causes, Q: Is a labor organization responsible for the
the Er must serve a written notice upon the worker and the preservation of industrial peace?
DOLE at least 1 month before the intended date of
termination. (Art. 283, LC) A: Yes. The Ministry shall help promote and gradually
develop, with the agreement of labor organizations
Q: Why is notice and hearing necessary in cases of and Ers, labor-management cooperation programs at
employee dismissal? appropriate levels of the enterprise based on the
shared responsibility and mutual respect in order to
A: The twin requirement of notice and hearing ensure industrial peace and improvement in
constitutes essential elements of due process in cases productivity, working conditions and the quality of
of Ee dismissal. The requirement of notice is intended working life. [Art. 277(g), LC, incorporated by B.P Blg.
to inform the Ee concerned of the Er’s intent to 130]
dismiss and the reason for the proposed dismissal,
upon the other hand, the requirement of hearing Q: How about in establishments where no legitimate
affords the Ee opportunity to answer his Er’s charges labor organization exists?
against him and accordingly to defend himself
therefrom before dismissal is effected. Neither of A: Labor management committees may be formed
these two requirements can be dispensed with voluntarily by workers and Ers for the purpose of
without running afoul of the due process promoting industrial peace. [Art. 277(h), LC, as
requirement of the 1987 Constitution [Century Textile amended by Sec. 33, R.A. 6715]

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17 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

RECRUITMENT AND PLACEMENT 8. Shipping or manning agents or


representatives
RECRUITMENT OF LOCAL AND MIGRANT WORKERS 9. Name hires (Sec. 1(i) of Rule II, Omnibus
Rules and Regulations implementing the
Q: Who is a worker? Migrant Workers and Overseas Filipinos Act
of 1995 as amended by R.A. 10022)
A: Any member of the labor force, whether employed
or unemployed. (Art. 13 [a], LC) Q: Who are name hires?

Q: What is recruitment and placement? A: They are individual workers who are able to secure
contracts for overseas employment opportunities
A: with Ers without the assistance or participation of any
1. Any act of canvassing, enlisting, contracting, agency. [Rule II, Omnibus Rules and Regulations
transporting, utilizing, hiring or procuring implementing the Migrant Workers and Overseas
workers; and Filipinos Act of 1995 as amended by R.A. 10022]
2. Includes referrals, contact services, promising or
advertising for employment, locally or abroad, Q: Is recruitment and placement constituted even if
whether for profit or not. (Art. 13 [b] ,LC) employment is offered only to one person?

Q: What are the essential elements in determining A: Yes, the number of persons dealt with is not an
whether one is engaged in recruitment and essential ingredient of the act of recruitment and
placement? placement of workers. The proviso merely lays down
a rule of evidence that where a fee is collected in
A: It must be shown that: consideration of a promise or offer of employment to
1. The accused gave the complainant the distinct 2 or more prospective workers, the individual or
impression that she had the power or ability to entity dealing with them shall be deemed to be
send the complainant for work, engaged in the act of recruitment and placement. The
2. Such that the latter was convinced to part with words "shall be deemed" create that presumption
his money in order to be so employed [People vs. [People vs. Panis, G.R. L-58674-77, (1986)].
Goce, G.R. No. 113161, (1995)].
Q: What is a private employment agency?
Q: Who is deemed engaged in recruitment and
placement? A: Any person or entity engaged in the recruitment
and placement of workers for a fee which is charged,
A: Any person or entity which, in any manner, offers directly or indirectly, from the workers or Ers or both.
or promises for a fee employment to 2 or more (Art. 13, LC)
persons. (Art. 13[b], LC)
Q: What is a private recruitment agency?
Q: Who may engage in recruitment and placement?
A: It is any person or association engaged in the
A: GR: No person or entity other than the public recruitment and placement of workers without
employment offices, shall engage in the charging any fee, directly or indirectly, from the
Recruitment and Placement of workers. workers or Ers.

XPNs: Q: Who is a seafarer?


1. Construction contractors if authorized by the
DOLE and Construction Industry Authority A: It refers to any person who is employed or
2. Other persons or entities as may be engaged in overseas employment in any capacity on
authorized by the SLE board a ship other than a government ship used for
3. Members of the diplomatic corps (but hiring military or non-commercial purposes. The definition
must go through POEA) shall include fishermen, cruise ship personnel and
4. Public employment offices those serving on mobile offshore and drilling units in
5. Private recruitment offices the high seas. [Sec. 1(ss), Rule II, Omnibus Rules and
6. Private employment agencies Regulations Implementing Migrant Workers Act as
7. POEA amended by R.A. 10022 (2010)]

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RECRUITMENT AND PLACEMENT

Q: What is overseas employment? requested that it be allowed to employ Cone as full-


fledged coach. The DOLE Regional Director granted
A: It is the employment of a worker outside the the request. The Basketball Association of the Phils.
Philippines. appealed the issuance of said permit to the
Secretary of Labor who cancelled Cone’s
Q: Who is an Overseas Filipino Worker (OFW)? employment permit because GMC failed to show
that there is no person in the Philippines who is
A: A person who is to be engaged, is engaged or has competent and willing to do the services nor that
been engaged in a remunerated activity in a State of the hiring of Cone would redound to the national
which he or she is not a citizen or on board a vessel interest. Is the act of the Secretary of Labor valid?
navigating the foreign seas other than a government
ship used for military or non-commercial purposes or A: Yes. GMC’s claim that hiring of a foreign coach is
on an installation located offshore or on the high an Er’s prerogative has no legal basis. Under Art. 40
seas. [Sec.(jj), Rule II, Omnibus Rules and Regulations of the LC, an Er seeking employment of an alien must
Implementing Migrant Workers Act as amended by first obtain an employment permit from the DOLE.
R.A. 10022 (2010)] GMC’s right to choose who to employ is limited by
the statutory requirement of an employment permit.
Note: The term “OFW” is to be used interchangeably with [GMC vs. Torres, G.R. No. 9366, (1991)]
“migrant worker” as provided in R.A. 10022.
PROHIBITION AGAINST TRANSFER OF EMPLOYMENT
Q: Who is an Emigrant?
Q: Who are required to obtain employment permit?
A: Any person, worker or otherwise, who emigrates
to a foreign country by virtue of an immigrant visa or A: GR: Only non-resident aliens;
resident permit or its equivalent in the country of
destination. (Art. 13, LC) XPNs:
1. Diplomatic services and foreign government
EMPLOYMENT OF NON-RESIDENT ALIENS officials;
2. Officers and staff of international
Q: What are the requirements in employment of organizations and their legitimate spouses;
non-resident aliens? 3. Members of governing board who has voting
rights only;
A: Any alien seeking admission to the Philippines for 4. Those exempted by special laws;
employment purposes and any domestic or foreign Er 5. Owners and representatives of foreign
who desires to engage an alien for employment in the principals who interview Filipino applicants
Philippines: for employment abroad;
1. Shall obtain an employment permit from the 6. Aliens whose purpose is to teach, present
DOLE and/or conduct research studies;
2. The permit may be issued to a non-resident alien 7. Resident aliens. (D.O. 75-06)
or to the applicant Er after a determination of
the non-availability of a person in the Philippines Q: May the non-resident alien transfer employment
who is competent, able and willing at the time of after issuance of the employment permit?
application to perform the services for which the
alien is desired A: After the issuance of an employment permit, the
3. For an enterprise registered in preferred areas of alien shall not transfer to another job or change his Er
investments, said permit may be issued upon without prior approval of the SLE.
recommendation of the Government agency
charged with the supervision of said registered Q: What is required for immigrants and resident
enterprise aliens?

Q: The DOLE issued an alien employment permit for A: An Alien Employment Registration Certificate.
Earl Cone, a U.S. citizen, as sports consultant and
assistant coach for GMC. Later, the Board of Special Q: What is the duration of the employment permit?
Inquiry of the Commission on Immigration and
Deportation approved Cone’s application for a A: GR: Minimum of 1 year
change of admission status from temporary visitor
to pre-arranged employee. A month later, GMC

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19 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

XPN: Unless the employment contract, -A minimum capitalization of P2 million


consultancy services, or other modes of b. Corporation
engagement provides otherwise, which in no -A minimum paid-up capital of P2 million
case shall exceed 5 years. [DOLE Department Provided, that those with existing licenses shall,
Order 97-09, Revised Rules for the Issuance of within 4 yrs. from the affectivity hereof, increase
Employment Permits to Foreign Nationals their capitalization or paid up capital, as the case
(2009)] may be, to P2 million at the rate of Php
250,000.00 every year. (Art. 28, LC)
Q: May aliens be employed in entities engaged in 3. Not otherwise disqualified by law or other
nationalized activities? government regulations to engage in the
recruitment and placement of workers for
A: GR: No. overseas employment. (Rule I, Part II, POEA
Rules)
XPNs: 4. Payment of registration fees
1. Secretary of Justice specifically authorizes the 5. Posting of surety/cash bonds
employment of technical personnel;
2. Aliens are elected members of the board of Q: How will POEA regulate private sector
directors or governing body of corporations participation in the recruitment and overseas
or associations engaging in partially placement of workers?
nationalized activities shall be allowed in
proportion to their allowable participation or A: By setting up a licensing and registration system.
share in the capital of such entities [Section 2- (Sec. 14, R.A. 10022)
A of Anti-Dummy Law, as amended by P.D.
715]; or Q: Is a corporation, 70% of the authorized and
3. Enterprises registered under the Omnibus voting capital of which is owned and controlled by
Investment Code in case of technical, Filipino citizens, allowed to engage in the
supervisory or advisory positions, but for a recruitment and placement of workers, locally or
limited period. overseas? Explain briefly. (2002 Bar Question)

PRIVATE SECTOR PARTICIPATION IN THE A: No. It is because Art. 27 of the LC requires at least
RECRUITMENT AND PLACEMENT OF WORKERS 75%.

Q: What are the entities in the private sectors that Q: Who are disqualified to engage in the business of
can participate in recruitment and placement of recruitment and placement of workers?
workers?
A:
A: 1. Travel agencies and sales agencies of airline
1. Shipping or manning agents or representatives companies; (Art. 26, LC)
2. Private recruitment offices 2. Officers or members of the board of any
3. Public employment offices corporation or members in a partnership
4. Construction contractors if authorized by the engaged in the business of a travel agency;
DOLE and Construction Industry Authority. 3. Corporations and partnerships, when any of its
5. Persons that may be authorized by the SLE officers, members of the board or partners, is
6. Private employment agencies. (Sec. 1, Rule VII, also an officer, member of the board or partner
Book I, IRR of the LC) of a corporation or partnership engaged in the
business of a travel agency;
Q: What are the qualifications for participation in 4. Persons, partnerships or corporations which have
recruitment and placement of workers? derogatory records, such as but not limited to
those:
A: a. Certified to have derogatory record or
1. Filipino citizens, or partnerships or corporations information by the NBI or by the Anti-Illegal
with at least 75% of the authorized capital stock Recruitment Branch of the POEA;
is owned and controlled by Filipino citizens; (Art. b. Against whom probable cause or prima facie
27, LC) finding of guilt for illegal recruitment or
2. Capitalization other related cases exists;
a. Single proprietorship or partnership

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RECRUITMENT AND PLACEMENT

c. Convicted for illegal recruitment or other


related cases and/or crimes involving A: Only when:
moral turpitude; and 1. He has obtained work through recruiter’s efforts,
d. Agencies whose licenses have been and
previously revoked or cancelled by the 2. The worker has actually commenced working
POEA for violation of R.A. 8042, P.D. 442
as amended and their IRRs as well as these Note: A land-based agency may charge and collect from its
rules and regulations. hired workers a placement fee in an amount equivalent to 1
5. Any official or Ee of the DOLE, POEA, OWWA, month salary, exclusive of documentation costs. (Sec. 3,
Rule V, POEA Rules and Regulations)
DFA and other government agencies directly
involved in the implementation of R.A. 8042
th
and/or any of his/her relatives within the 4 civil Q: What are the only authorized payments that may
degree of consanguinity or affinity; and be collected from a hired worker?
6. Persons or partners, officers and directors of
corporations whose licenses have been A:
previously cancelled or revoked for violation of 1. Placement fee in an amount equivalent to one
recruitment laws. (Sec. 2, Rule I, 2002 Rules and month’s salary of the worker, and
Regulations on the Recruitment and Employment 2. Documentation costs (Sec. 3, Rule V, POEA Rules
of Land-Based Workers) and Regulations)

TRAVEL AGENCIES PROHIBITED FROM ILLEGAL RECRUITMENT, ART. 38 (LOCAL), SEC. 6,


RECRUITMENT AND PLACEMENT MIGRANT WORKERS ACT, R.A. 8042

Q: What is the rule on recruitment of travel agencies Q: What are prohibited practices in recruitment or
and sales agencies of airline companies? placement?

A: They are prohibited from engaging in the business A:


of recruitment and placement of workers for 1. Furnishing or publishing any falsie
overseas employment whether for profit or not. notice/information/document related to
recruitment/employment
Q: WTTA is a well-known travel agency and an 2. Failure to file reports required by SLE
authorized sales agent of the PAL. Since majority of 3. Inducing or attempting to induce a worker
its passengers are overseas workers, WTTA applied already employed to quit his employment in
for a license for recruitment and placement order to offer him another unless the transfer is
activities. It stated in its application that its purpose designed to liberate a worker from oppressive
is not for profit but to help Filipinos find terms and conditions
employment abroad. Should the application be 4. Recruitment/placement of workers in jobs
approved? (2006 Bar Question) harmful to public health or morality or to the
dignity of the country
A: The application should be disapproved, as it is 5. Engaging directly or indirectly in the
prohibited by Art. 26 of the LC, to wit: "Art. 26. Travel management of a travel agency
agencies and sales agencies of airline companies are 6. Substituting or altering employment contracts
prohibited from engaging in the business of without approval of DOLE
recruitment and placement of workers for overseas 7. Charging or accepting any amount greater than
employment whether for profit or not." Rule I, Part II that specified b DOLE or make a worker pay any
POEA Rules and Regulations Governing the amount greater than actually received by him
Recruitment and Employment of Land-Based Workers 8. Committing any act of misrepresentation to
(2002) disqualifies any entity having common director secure a license or authority
or owner of travel agencies and sales agencies of 9. Influencing or attempting to influence a
airlines, including any business entity from the person/entity not to employ any woker who has
recruitment and placement of Filipino workers not applied employment through his agency
overseas, whether they derive profit or not. 10. Obstructing or attempting to obstruct
inspection by SLE or by his representatives
FEES TO BE PAID BY WORKERS 11. Withholding or denying travel documents from
applicant workers before departure for
Q: When may a worker be charged any fee? monetary considerations other than authorized
by law

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21 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

12. Granting a loan to an overseas Filipino worker holders of 1. Failure to actually deploy
with interest exceeding eight percent (8%) per authority. without valid reason;
annum, which will be used for payment of legal 2. Failure to reimburse
and allowable placement fees and make the expenses incurred by the
migrant worker issue, either personally or worker in connection
through a guarantor or accommodation party, with his/her
postdated checks in relation to the said loan documentation and
13. Refusing to condone or renegotiate a loan processing for purposes
incurred by an OFW after his employment of deployment;
contract has been prematurely terminated 3. To allow a non-Filipino
through no fault of his or her own citizen to head or
14. For a suspended recruitment/manning agency manage a licensed
to engage in any kind of recruitment activity recruitment/ manning
including the processing of pending worker’s agency.
applications; and
15. For recruitment/manning agency or a foreign Q: Who are the persons prohibited from engaging
principal/Er to pass on the OFW or deduct from the business of recruiting migrant workers?
his or her salary the payment of the cause of
fees, premium or other insurance related A:
charges, as provided under the compulsory 1. Unlawful for any official or Ee of the:
worker’s insurance coverage a. DOLE
16. Imposing a compulsory and exclusive b. POEA
arrangement whereby an OFW is required to: c. Overseas Workers Welfare Administration
a. Avail a loan only from specifically designated (OWWA)
institutions, or entities or persons d. DFA
b. To undergo health examinations only from e. Other Government agencies involved in the
specifically designated medical, entities or implementation of this Act
persons, except seafarers whose medical
th
examination cost is shouldered by the ship 2. Their relatives within the 4 civil degree of
owne consanguinity or affinity, to engage, directly or
c. To undergo training of any kind only from indirectly in the business of recruiting migrant
designated institutions, entities or persons, workers. (Sec. 8, R.A. 8042)
except for recommendatory trainings
mandated by principals/shipowners (Sec. 6, LICENSE vs. AUTHORITY
R.A. 8042, Migrant Workers and Overseas
Filipino Act, as amended by R.A. 10022) Q: How does the law regulate the business or
recruitment and replacement?
Q: What are the differences between the prohibited
acts under the Labor Code and R.A. 8042 or the A: By requiring license and authority.
Overseas Filipinos and Overseas Migrant Workers
Act, as amended by R.A. 10022? Q: What is a license?

A: A: It is issued by DOLE authorizing a person or entity


Labor Code R.A. 8042, as amended by RA to operate a private employment agency.
(Art. 38) 10022
Applies to recruitment for Q: What is an authority?
Local recruitment
overseas employment
Illegal recruitment Illegal recruitment under Sec. A: It is a document issued by the DOLE authorizing a
under Art. 38 6 means any recruitment person or association to engage in recruitment and
means any activity committed by non- placement activities as a private recruitment entity.
recruitment licensees/ non-holders of
activity including authority or prohibited acts Q: Who may be issued license and authority?
prohibited acts (same as Art. 34, LC)
under Art. 34 A:
committed by non- Added to the following in the 1. Natural persons – Filipino (citizenship requirement)
licensees or non- list of prohibited acts:

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2013 GOLDEN NOTES 22
RECRUITMENT AND PLACEMENT

2. Artificial persons – question of owners of capital not, when undertaken by non-licensee or


and voting stock (75% Filipino). non-holder of authority [Art. 13(f), as
amended by R.A. 10022] ; or
Q: Who is a non-licensee / non-holder of authority? b. Any of prohibited practices under Art. 34 of
the LC.
A: Any person, corporation or entity:
1. Which has not been issued a valid license or 3. For complex illegal recruitment, an additional
authority to engage in recruitment and element is the offender commits the act against
placement by the SLE, or three or more persons, individually, or as a group
2. Whose license or authority has been suspended, [People vs. Baytic, (2003)] or there are three or
revoked or cancelled by the POEA or the SLE more offenders.

Q: Is the license or authority transferable? Q: Larry Domingo was accused of the crime of illegal
recruitment. He argued that he issued no receipt or
A: No, they are non-transferable (Art. 29, LC). License document in which he acknowledged as having
or authority is granted on the basis of personal received any money for the promised jobs. Hence,
qualifications of the grantee. Thus, it is beyond the he should be free him from liability. Was Larry
commerce of man. The law prohibits alienation of engaged in recruitment activities?
license or authority.
A: Yes. Even if at the time Larry was promising
Q: A recruitment and placement agency declared employment no cash was given to him, he is still
voluntary bankruptcy. Among its assets is its license considered as having been engaged in recruitment
to engage in business. Is the license of the bankrupt activities, since Art. 13(b) of the LC states that the act
agency an asset which can be sold in public auction of recruitment may be for profit or not. It suffices
by the liquidator? (1998 Bar Question) that Larry promised or offered employment for a fee
to the complaining witnesses to warrant his
A: No, because of the non-transferability of the conviction for illegal recruitment [People vs.
license to engage in recruitment and placement. The Domingo, G.R. No. 181475, (2009)].
LC (Art. 29) provides that no license to engage in
recruitment and placement shall be used directly or Q: How does one prove illegal recruitment? `
indirectly by any person other than the one in whose
favor it was issued nor may such license be A: It must be shown that the accused gave the
transferred, conveyed or assigned to any other distinct impression that he had the power or ability to
person or entity. It may be noted that the grant of a send complainants abroad for work such that the
license is a governmental act by the DOLE based on latter were convinced to part with their money in
personal qualifications, and citizenship and order to be deployed [People vs. Fortuna, 395 SCRA
capitalization requirements. (Arts.27-28, LC). 353 (2003)].

Note: Change of ownership or relationship of a single Q: May a licensee or holder of authority be held
proprietorship licensed to engage in overseas employment liable for illegal recruitment?
shall cause the automatic revocation of the license.
A: Yes, any person (whether non-licensee, non-holder
ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT of authority, licensee or holder of authority) who
commits any of the prohibited acts, shall be liable for
Q: What are the elements of illegal recruitment? Illegal recruitment. (R.A. 8042, as amended by R.A.
10022)
A:
1. Offender is a non-licensee or non-holder of Q: What are the kinds of illegal recruitment?
authority to lawfully engage in the
recruitment/placement of workers. A: 1. Simple Illegal Recruitment
2. Complex Illegal Recruitment
2. Offender undertakes:
a. Any act of canvassing, enlisting, contracting, SIMPLE ILLEGAL RECRUITMENT
transporting, utilizing, hiring, or procuring
workers and includes referring, contract Q: What is simple illegal recruitment?
services, promising or advertising for
employment abroad, whether for profit or

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23 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

A: It is the violation of Arts. 13(b) and 34 of the LC A: Illegal recruitment is defined by law as any
involving less than three recruiters or victims. recruitment activities undertaken by non-licenses or
non-holders of authority [People vs. Senoron, G.R. No.
Q: What is complex illegal recruitment? 119160, (1997)]. It is large scale illegal recruitment
when the offense is committed against 3 or more
A: It is the violation of Arts. 13(b) and 34 of the LC persons, individually or as a group (Art. 38[b], LC). In
involving at least three recruiters or victims. It may view of the above, Maryrose is guilty of large scale
either be: illegal recruitment. Her defense of good faith and the
1. committed by a syndicate; Affidavit of Desistance as well as the refund given will
2. in large Scale not save her because R.A. 8042 is a special law, and
illegal recruitment is malum prohibitum [People vs.
ILLEGAL RECRUITMENT IN LARGE SCALE (SEC. 6, R.A. Saulo, G.R. No. 125903, (2000)].
10022)
ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE
Q: When is illegal recruitment committed in large
scale? Q: When is illegal recruitment considered as
economic sabotage?
A: When it is committed against three or more
persons individually or as a group. A: When complex illegal recruitment is committed,
such that it is syndicated or done in a large scale.
Q: When is illegal recruitment considered to be
committed by a syndicate? ILLEGAL RECRUITMENT vs. ESTAFA

A: It is committed by a syndicate if Illegal Recruitment ILLEGAL RECRUITMENT ESTAFA


was carried out by a group of three or more persons Malum in se,
Malum prohibitum, thus:
conspiring or confederating with one another. thus:
1. Criminal intent is NOT
1.criminal intent is
Note: Illegal Recruitment in Large Scale pertains to the necessary
necessary
number of victims while Syndicated Illegal Recruitment 2. it is a crime which involves
2.Same
pertains to the number of recruiters. moral turpitude
It is not required that it be Accused defrauded
Q: While her application for renewal of her license
shown that the recruiter another by abuse of
to recruit workers for overseas employment was
wrongfully represented confidence, or by
still pending Maryrose Ganda recruited Alma and
himself as a licensed means of deceit
her 3 sisters, Ana, Joan, and Mavic, for employment
recruiter
as housemates in Saudi Arabia. Maryrose Note: It is essential that
represented to the sisters that she had a license to Note: It is enough that the the false statement or
recruit workers for overseas employment and victims were deceived as they fraudulent
demanded and received P30,000.00 from each of relied on the misrepresentation representation
them for her services. However, her application for and scheme that caused them constitutes the very
the renewal of her license was denied, and to entrust their money in cause or the only motive
consequently failed to employ the four sisters in exchange of what they later which induces the
Saudi Arabia. The sisters charged Maryrose with discovered was a vain hope of complainant to part
obtaining employment abroad with the thing of value.
large scale illegal recruitment. Testifying in her
defense, she declared that she acted in good faith
Illegal recruitment and estafa cases may be filed
because she believed that her application for the
simultaneously or separately. The filing of charges for
renewal of her license would be approved. She
illegal recruitment does not bar the filing of estafa,
adduced in evidence the Affidavits of Desistance
and vice versa.
which the four private complainants had executed
after the prosecution rested its case. In the said Double jeopardy will not set
affidavits, they acknowledge receipt of the refund
by Maryrose of the total amount of Php 120,000.00 Q: Bugo, by means of false pretenses and fraudulent
and indicated that they were no longer interested to representation, convinced Dado to give the amount
pursue the case against her. Resolve the case with of Php 120,000.00 for processing the latter’s papers
reasons. (2005 Bar Question) so that he can be deployed to Japan. Dado later on
found out that Bugo had misappropriated,
misapplied and converted the money to her own

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RECRUITMENT AND PLACEMENT

personal use and benefit. Can Dado file the cases of


illegal recruitment and estafa simultaneously? Province or city:
1. Where the offense was committed or
A: Yes, illegal recruitment and estafa cases may be 2. Where the offended party actually resides at the
filed simultaneously or separately. The filing of same time of the commission of the offense
charges for illegal recruitment does not bar the filing
of estafa, and vice versa. Bugo’s acquittal in the illegal MONEY CLAIMS
recruitment case does not prove that she is not guilty
NLRC
of estafa. Illegal recruitment and estafa are entirely
Original and exclusive jurisdiction to hear and decide
different offenses and neither one necessarily
claims arising out of an Er-Ee relationship or by virtue
includes or is necessarily included in the other. A
of any law or contract involving Filipino workers for
person who is convicted of illegal recruitment may, in
overseas deployment including claims for actual,
addition, be convicted of estafa under Art. 315, par.
moral, exemplary and other forms of damages.
2(a) of the RPC. In the same manner, a person
 The liability of the principal/ Er and the
acquitted of illegal recruitment may be held liable for
recruitment/ placement agency for any and all
estafa. Double jeopardy will not set in because illegal
claims shall be joint and several.
recruitment is malum prohibitum, in which there is no
 The performance bond to be filed by the
necessity to prove criminal intent, whereas estafa is
recruitment/ placement agency shall be answerable
malum in se, in the prosecution of which, proof of
for all money claims or damages that may be
criminal intent is necessary [Sy vs. People, G.R. No.
awarded to the workers.
183879, (2010)].
 If the recruitment/placement agency is a juridical
LIABILITIES being, the corporate officers and directors and
partners as the case may be, shall themselves be
LOCAL RECRUITMENT AGENCY jointly and solidarily liable with the corporation or
partnership for the claims and damages.
Q. What is the liability of the Local Recruitment
Agency? ADMINISTRATIVE ACTIONS
POEA
A. A Local Recruitment Angency shall be jointly and Original and exclusive jurisdiction to hear and decide:
solidarily liable with its principal or foreign-based Er 1. All cases which are administrative in character,
for any violation of the recruitment agreement and involving or arising out of violations of rules and
violation of contracts of employment. [Sec. 10(a)(2) regulations relating to licensing and registration of
Rule V, Book I, IRR] recruitment and employment agencies or entities
and
Q. What is the liability of corporate officers, 2. Disciplinary action cases and other special cases
directors or partners if the recruitment/ placement which are administrative in character, involving Ers,
agency is a juridical being? principals, contracting partners and Filipino migrant
workers.
A. If the recruitment/placement agency is a juridical a. It may be filed with the POEA Adjudication
being, the corporate officers, directors or partners as Office or the DOLE/POEA regional office of the
the case may be, shall themselves be jointly and place where the complaint applied or was
solidarily liable with the corporation or partnership recruited at the option of the complainant. The
for the claims and damages [Becmen Service Exporter office with which the complaint was first filed
and Promotion vs. Cuaresma, G.R. Nos. 182978-79, shall take cognizance of the case.
(2009)]. b. DA cases and other special cases, as mentioned
in the preceding Section, shall be filed with
Q: What are the remedies under the Migrant POEA Adjudication Office.
Workers Act and how may they be enforced?
Q: Is compromise agreement on money claims
A: allowed?
CRIMINAL ACTIONS
A: Yes. Consistent with the policy encouraging
RTC
amicable settlement of labor disputes, Sec. 10 of R.A.
8042 allows resolution by compromise of cases filed
with the NLRC.

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25 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

worked for her Taiwanese employer under the


Q: When shall compromise agreements on money theory of imputed knowledge?
claims be paid?
A: No, the theory of imputed knowledge ascribes the
A: Any compromise/amicable settlement or voluntary knowledge of the agent, Sunace, to the principal
agreement on money claims inclusive of damages Taiwanese Er, not the other way around. The
shall be paid within four months from the approval of knowledge of the principal-foreign Er cannot,
the settlement by the appropriate authority. therefore, be imputed to its agent Sunace.

Q: Are overtime and leave pay included in the terms There being no substantial proof that Sunace knew of
which is the basis in the computation of the and consented to be bound under the 2-year
monetary award? employment contract extension, it cannot be said to
be privy thereto. As such, it and its owner cannot be
A: No. The word “salaries” in Sec. 10(5) of the LC does held solidarily liable for and of Montehermozo’s
not include OT and leave pay. For seafarers, DO No. claims arising from the 2-year employment extension
33, series of 1996, provides a Standard Employment [Sunace vs. NLRC, G.R. No. 161757, (2006)].
Contract of Seafarers, in which salary is understood
as the basic wage, exclusive of OT, leave pay and SOLIDARY LIABILITY
other bonuses; whereas OT pay is compensation for
all work “performed” in excess of the regular 8 hours, Q: What is the liability of the private employment
and holiday pay is compensation for any work agency and the principal or foreign-based employer?
“performed” on designated rest days and holidays
[Serrano vs. Gallant Maritime Services & Marlow A: They are jointly and solidarily liable for any
Navigation Co., Inc., G.R. No. 167614, (2009)]. violation of the recruitment agreement and the
contracts of employment.
FOREIGN EMPLOYER
Note: This joint and solidary liability imposed by law against
THEORY OF IMPUTED KNOWLEDGE recruitment agencies and foreign Ers is meant to assure the
aggrieved worker of immediate and sufficient payment of
what is due him [Becmen Service Exporter and Promotion
Q: What is the theory of imputed knowledge?
vs. Cuaresma, G.R. Nos. 182978-79, (2009)].

A: A rule in insurance law that any information


Q. May the absence of employment contract, special
material to the transaction, either possessed by the
power of attorney and affidavit of responsibility, as
agent at the time of the transaction or acquired by
required by the POEA Rules and Regulations,
him before its completion, is deemed to be the
absolve the private employment agency and the
knowledge of the principal, at least so far as the
principal from liability?
transaction is concerned, even though in fact the
knowledge is not communicated to the principal at all
A. No. Non-compliance with POEA Rules and
[Leonor vs. Filipinas Compania, 48 OG 243].
Regulations cannot be utilized to relieve the agency
and its principal from liabitliy. In fact, such non-
Q: Sunace International Management Services
compliance is a ground for the cancellation or
(Sunace), deployed to Taiwan Montehermozo as a
suspension of their license [Hornales vs. NLRC, et al.,
domestic helper under a 12-month contract
G.R. No. 118934 (2001)].
effective Feb. 1, 1997. The deployment was with the
assistance of a Taiwanese broker, Edmund Wang,
PRETERMINATION OF CONTRACT OF MIGRANT
President of Jet Crown International Co., Ltd. After
WORKER
her 12-month contract expired on Feb. 1, 1998,
Montehermozo continued working for her
Q: Serrano, a seafarer, was hired by Gallant
Taiwanese employer for two more years, after
Maritime and Marlow Navigation Co. for 12 months
which she returned to the Philippines on Feb. 4,
as Chief Officer. On the date of his departure, he
2000. Shortly after her return she file before the
was constrained to accept a downgraded
NLRC against Sunace, one Perez, the Taiwanese
employment contract for the position of Second
broker, and the employer-foreign principal alleging
Officer, upon the assurance that he would be made
that she was jailed for three months and that she
Chief Officer after a month. It was not done; hence,
was underpaid. Should Sunace be held liable for the
he refused to stay on as Second Officer and was
underpayment for the additional two years that she
repatriated to the Phils. He had served only 2

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2013 GOLDEN NOTES 26
RECRUITMENT AND PLACEMENT

months & 7 days of his contract, leaving an


unexpired portion of 9 months & 23 days. Q: What is the basis in computing an employee’s
compensation in case of premature termination of
Serrano filed with the LA a Complaint against contract?
Gallant Maritime and Marlow for constructive
dismissal and for payment of his money claims. The A: A worker dismissed from overseas employment
LA rendered a favorable decision to Serrano without just, valid or authorized cause as defined by
awarding him $8,770.00, representing his salary for law or contract is entitled to full reimbursement of
3 months of the unexpired portion of his contract of his placement fee with interest at 12% per annum,
employment applying R.A. 8042, Sec 10, par. 5: plus his salary for the unexpired portion of his
employment contract or for three months for every
Money Claims. - In case of termination of year of the unexpired term, whichever is less. (Sec. 7,
overseas employment without just, valid R.A. 10020, 2010)
or authorized cause as defined by law or
contract, the workers shall be entitled to Q: What is the basis in computing an employee’s
the full reimbursement of his placement compensation in case of premature termination of
fee with interest of 12% per annum, plus contract?
his salaries for the unexpired portion of
his employment contract or for 3 months A: The Migrant Workers Act provides that salaries for
for every year of the unexpired term,
the unexpired portion of the employent contract or
whichever is less.
three months for every year of the unexpired term,
Is the subject clause constitutional? whichever is less, shall be awarded to the overseas
Filipino worker, in cases of illegal dismissal. However
A: No. The subject clause contains a suspect in Serrano v. Gallant Maritime Services (G.R. No.
classification in that, in the computation of the 167614, 2009), the clause “or for three months for
monetary benefits of fixed-term Ees who are illegally every year of the unexpired term, whichever is less”
discharged, it imposes a 3-month cap on the claim of
is declared unconstitutional and awarded the entire
OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other unexpired portion of the employment contract to the
OFWs or local workers with fixed-term employment. overseas Filipino worker.
The subject clause singles out one classification of
OFWs and burdens it with a peculiar disadvantage. Nonetheless, Sec. 7 of R.A. 10022 amended Sec. 10 of
the Migrant Workers Act, and once again reiterated
The clause is a violation of the right of Serrano and the provision of awarding the unexpired portion of
other OFWs to equal protection and right to the employent contract or three months for every
substantive due process, for it deprives him of year of the unexpired term, whichever is less
property, consisting of monetary benefits, without
[Skippers United Pacific, Inc. vs. Doza, et. al, G.R. No.
any existing valid governmental purpose.
175558 (2012)].
Furthermore, prior to R.A. 8042, all OFWs, regardless
of contract periods or the unexpired portions thereof, The declaration in March 2009 of the
were treated alike in terms of the computation of unconstitutionality of the clause “or for three months
their monetary benefits in case of illegal dismissal. for every year of the unexpired term, whichever is
Their claims were subjected to a uniform rule of less” in RA 8042 shall be given retroactive effect to
computation: their basic salaries multiplied by the the termination that occurred in January 1999
entire unexpired portion of their employment because an unconstitutional clause in the law confers
contracts. The same applies local workers with fixed-
no rights, imposes no duties and affords no
term employment.
protection. The unconstitutional provision is
Thus, Serrano is entitled to his salaries for the entire inoperative, as if it was not passed into law at all [Yap
unexpired period of nine months and 23 days of his v. Thenamaris Ship’s Management and Intermare
employment contract, pursuant to law and Maritime Agencies, Inc., G.R. No. 179532, (2011)].
jurisprudence prior to the enactment of RA 8042
[Serrano vs. Gallant Maritime Services & Marlow PENALTIES FOR ILLEGAL RECRUITMENT
Navigation Co., Inc., G.R. No. 167614, (2009)].

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27 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

Q: What is the consequence of conviction for illegal from the termination of date of receipt of the
recruitment? the investigation records of the case. (Sec.
11)
A: Prescriptive Period for Illegal Recruitment Cases
PENALTIES (Under R.A. 10022) Simple Illegal
Offender / Offense Penalty Economic Sabotage
Recruitment
Illegal recruitment as Life imprisonment + Within 20 yrs. from the
Within 5 yrs. from the
economic sabotage fine of P2M-P5M time illegal recruitment
time illegal recruitment
has happened. (Sec.
has happened
Provided: 12,R.A. 8042)
1. If person illegally
recruited is below 18 DIRECT HIRING
years of age or Maximum penalty
2. Illegal recruitment is shall be imposed Q: What is direct hiring?
committed by a non-
licensee/non-holder A: It is when an Er hires a Filipino worker for
12 yrs. and 1 day - 20 yrs. overseas employment without going through the
Any person found guilty
imprisonment; or POEA or entities authorized by the SLE.
of illegal recruitment
Fine: P1M-P2M
6 yrs. and 1 day - 12 yrs. Q: What is the ban on direct hiring?
Any person found guilty
imprisonment; or
of the prohibited acts
Fine of P500K - P1M A: GR: An Er may only hire Filipino worker for
Licensee/holder of 2-5 yrs. imprisonment; or overseas employment through POEA or entities
authority violates Fine: P10K - P50K; authorized by DOLE.
provisions or both
Non-licensee/non- 4-8 yrs. imprisonment; or XPNs: Direct hiring by:
holder of authority Fine: P20K - P100K 1. International organizations
violates provisions or both 2. Name hires
Corporation, Penalty imposed upon 3. Members of the diplomatic organizations
partnership, officer/s responsible for 4. Other Ers as may be allowed by DOLE
association, or entity violation
Penalties prescribed under Q: Why is direct hiring prohibited?
RA 10022,
Alien + A:
Deportation without 1. To ensure the best possible terms and conditions of
further proceedings employment for the worker.
Automatic revocation of 2. To assure the foreign Er that he hires only qualified
license or authority and all Filipino workers.
permits and privileges of 3. To ensure full regulation of employment in order to
In every case avoid exploitation.
the recruitment or
manning agency, lending
institutions, training REGULATION AND ENFORCEMENT
school or medical clinic
PERIODS SUSPENSION OR CANCELLATION OF LICENSE OR
AUTHORITY
Mandatory Period for Resolution of Illegal
Recruitment Cases Q. Who has the power to suspend or cancel any
The preliminary investigations of cases under R.A. license or authority to recruit employees for
10022 shall be terminated within a period of 30 overseas employment?
calendar days from the date of their filing.
If the PI is conducted by If the PI is conducted by A. The Secretary of Labor and Employment
a prosecution officer and a judge and a prima
a prima facie case is facie case is found to Q: What are the grounds for revocation of License?
established exist
Information shall be filed Prosecution officer A:
in court within 24 hours within 48 hours from the

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2013 GOLDEN NOTES 28
RECRUITMENT AND PLACEMENT

1. Incurring an accumulated 3 counts of suspension ongoing war against terrorism. Should the DOLE
by an agency based on final and executory orders orders be upheld or set aside? (2004 Bar Question)
within the period of validity of its license
2. Violations of the conditions of license A:
3. Engaging in acts of misrepresentation for the 1. The DOLE order cancelling the licenses of XYZ is
purpose of securing a license or renewal void because a report that an agency is covertly
4. Engaging in the recruitment or placement of transporting extremists is not a valid ground for
workers to jobs harmful to the public health or cancellation of a Certificate of Registration (Art.
morality or to the dignity of the country. (Sec. 3, 239, LC) and there is failure of due process as no
Rule I, Book VI, Rules and Regulations Governing hearing was conducted prior to the cancellation
Overseas Employment) (Art. 238, LC).
2. The DOLE order imposing the travel ban is valid
Q: What are the grounds for suspension or because it is a valid exercise of police power to
cancellation of license? protect the national interest (Sec. 3, Art. XIII,
Constitution on full protection to labor safety of
A: workers) and on the rule making authority of the
1. Commission of prohibited acts under Art. 34 SLE [Art. 5, LC; Phil. Ass’n. of Service Exporters vs.
2. Publishing job announcements w/o POEA’s Drilon, G.R. No. 81958, (1988)].
approval
3. Charging a fee which may be in excess of the REGULATORY AND VISITORIAL POWERS OF THE
authorized amount before a worker is employed DOLE SECRETARY
4. Deploying workers w/o processing through POEA
5. Recruitment in places outside its authorized area. Q: What are the regulatory powers of the Secretary
(Sec. 4, Rule II, Book IV, POEA Rules) of Labor and Employment?
6. If the employment agency fails to provide the
ticket or PTA within 48 hours from receipt of the A:
notice [R.A. 10022] 1. Restrict and regulate the recruitment and
placement activities of all agencies
Q. What is the degree of proof required for 2. Issue orders and promulgate rules and
suspension of license or authority? regulations

A: Administrative determinations require only Q: What constitute visitorial power?


substantial proof and not clear and convincing
evidence. In proceedings for cancellation or A:
suspension of license or authority, no rule requires 1. Access to Er’s records and premises at any time
that testimonies or complaints be corroborated by of the day or night, whenever work is being
documentary evidence, if the charge of unlawful undertaken
exaction is substantially proven. 2. To copy from said records
3. Question any Ee and investigate any fact,
Q: Concerned Filipino contract workers in the condition or matter which may be necessary to
Middle East reported to the DFA that XYZ, a private determine violations or which may aid in the
recruitment and placement agency, is covertly enforcement of the LC and of any labor law,
transporting extremists to terrorist training camps wage order, or rules and regulation issued
abroad. Intelligence agencies of the Government pursuant thereto.
allegedly confirmed the report. Upon being alerted
by the DFA, the DOLE issued orders cancelling the Q: What are the 4 instances where the visitorial
licenses of XYZ, and imposing an immediate travel power of the Secretary of Labor and Employment
ban on its recruits for the Middle East. XYZ appealed may be exercised under the LC?
to the Office of the President to reverse and set
aside the DOLE orders, citing damages from loss of A: Power to:
employment of its recruits, and violations of due
process including lack of notice and hearing by the 1. Inspect books of accounts and records of any
DOLE. The DOLE in its answer claimed the existence person or entity engaged in recruitment and
of an emergency in the Middle East which required placement; require it to submit reports regularly
prompt measures to protect the life and limb of on prescribed forms and act in violations of any
OFWs from a clear and present danger posed by the

UNIVERSITY OF SANTO TOMAS


29 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

provisions of the LC on recruitment and 2. Employers – Will be excluded from the overseas
placement. (Art. 37, LC) employment program. Private employment
2. Have access to Er’s records and premises to agencies shall face cancellation or revocation of
determine violations of any provisions of the LC their licenses or authority to recruit. (Sec. 9, E.O.
on recruitment and placement. (Art. 128, LC) 857)
3. Conduct industrial safety inspections of
establishments. (Art. 165, LC) PROHIBITED ACTIVITIES
4. Inquire into the financial activities of legitimate
labor organizations (LLO) and examine their Q: What are the prohibited practices in recruitment/
books of accounts upon the filing of the placement?
complaint under oath and duly supported by the
written consent of at least 20% of the total A:
membership of the labor organization 1. Furnishing or publishing any false
concerned. notice/information/document related to
recruitment/employment
Q: Can the Secretary of Labor and Employment issue 2. Failure to file reports required by SLE
search warrants or warrants of arrest? 3. Inducing or attempting to induce a worker
already employed to quit his employment in
A: No. Under the 1987 Constitution, only a judge may order to offer him another unless the transfer is
issue search warrants or warrants of arrest. Hence, designed to liberate a worker from oppressive
Art. 38(c) of the LC is unconstitutional inasmuch as it terms and conditions
gives the SLE the power to issue search warrants and 4. Recruitment/placement of workers in jobs
warrants of arrest. The labor authorities must go harmful to public health or morality or to the
through the judicial process [Salazar v. Achacoso, G.R. dignity of the country
No. 81510, (1990)]. 5. Engaging directly or indirectly in the
management of a travel agency
REMITTANCE OF FOREIGN EXCHANGE EARNINGS 6. Substituting or altering employment contracts
without approval of DOLE
Q: What is the rule on remittance of foreign 7. Charging or accepting any amount greater than
exchange earnings? that specified by DOLE or make a worker pay any
amount greater than actually received by him
A: GR: It shall be mandatory for all OFWs to remit a 8. Committing any act of misrepresentation to
portion of their foreign exchange earnings to their secure a license or authority
families, dependents, and/or beneficiaries ranging 9. Influencing or attempting to influence any
from 50% - 80% depending on the worker’s kind of person/entity not to employ any worker who has
job. (Rule VIII, Book III, POEA Rules) not applied of employment through his agency
10. Obstructing or attempting to obstruct inspection
XPNs: by SLE or by his representatives
1. The worker’s immediate family members, 11. Withholding or denying travel documents from
beneficiaries and dependents are residing with applicant workers before departure for monetary
him abroad considerations other than authorized by law
2. Immigrants and Filipino professionals and Ees 12. Granting a loan to an OFW which will be used for
working with the UN agencies or specialized payment of legal and allowable placement fees
bodies 13. Refusing to condone or renegotiate a loan
3. Filipino servicemen working in U.S. military incurred by an OFW after his employment
installations. (Resolution No. 1-83, Inter- contract has been prematurely terminated
Agency Committee for Implementation of E.O. through no fault of his or her own
857) 14. For a suspended recruitment/manning agency to
engage in any kind of recruitment activity
Q: What is the effect of failure to remit? including the processing of pending workers'
applications; and
A: 15. For a recruitment/manning agency or a foreign
1. Workers – Shall be suspended or removed from principal/ Er to pass on the OFW or deduct from
the list of eligible workers for overseas his or her salary the payment of the cost of
employment. insurance fees, premium or other insurance

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 30
RECRUITMENT AND PLACEMENT

related charges, as provided under the


compulsory worker's insurance coverage A:
16. Imposing a compulsory and exclusive 1. Guaranteed wages for regular hours and OT, not
arrangement whereby an OFW is required to: lower than the minimum wage prescribed in all
a. Avail a loan only from specifically designated of the following:
institutions, entities or persons a. The host country
b. To undergo health examinations only from b. Bilateral agreements or international
specifically designated medical, entities or conventions ratified by the host country
persons, except seafarers whose medical and the Philippines
examination cost is shouldered by the c. The Philippines
shipowner 2. Free transportation to and from the worksite or
c. To undergo training of any kind only from offsetting benefit
designated institutions, entities or persons, 3. Free food and accommodation or offsetting
except for recommendatory trainings benefit
mandated by principals/shipowners. (Sec. 6, 4. Just/ authorized causes of termination of the
R.A. 10022) contract or services of the worker

PHILIPPINE OVERSEAS EMPLOYMENT Note: An agreement that diminishes the Ees pay and
ADMINISTRATION (POEA) benefits as contained in a POEA-approved contract is void,
unless such subsequent agreement is approved by the
POEA.
Q: What are the principal functions of the POEA?

A: Q: What is the rule on deployment of OFWs?


1. Protection of the right of Filipino workers to fair
and equitable employment practices A: The State shall allow the deployment of OFWs:
2. Regulation of private sector participation in the 1. Only in countries where the rights of Filipino
recruitment and overseas placement of workers migrant workers are protected.
by setting up a licensing and registration system 2. To vessels navigating the foreign seas or to
3. Deployment of Filipino workers through installations located offshore or on high seas
Government to Government hiring whose owners/Ers are compliant with
4. Formulation, implementation, and monitoring international laws and standards that protect the
of overseas employment of Filipino workers rights of migrant workers.
taking into consideration their welfare and 3. To companies and contractors with international
domestic manpower requirements operations: Provided, That they are compliant
5. Shall inform migrant workers not only of their with standards, conditions and requirements, as
rights as workers but also of their rights as embodied in the employment contracts
human beings, instruct and guide the workers prescribed by the POEA and in accordance with
how to assert their rights and provide the internationally-accepted standards. (Sec. 3, R.A.
available mechanism to redress violation of 10022 amending R.A. 8042)
their rights. (Sec. 14, R.A. 10022)
6. Implementation, in partnership with other law- Q: What are the guarantees of the receiving country
enforcement agencies, of an intensified for the protection of the rights of OFWs?
program against illegal recruitment activities.
(Sec. 14, R.A. 10022) A:
1. It has existing labor and social laws protecting
Q: May the POEA, at any time terminate or impose a the rights of workers, including migrant workers;
ban on employment of migrant workers? 2. It is a signatory to and/or a ratifier of multilateral
conventions, declarations or resolutions relating
A: Yes, in consultation with the DFA based on the ff. to the protection of workers, including migrant
grounds: workers; and
1. In pursuit of the national interest; or 3. It has concluded a bilateral agreement or
2. When public welfare so requires. (Sec. 4 R.A. arrangement with the government on the
10022) protection of the rights of OFWs. (Sec. 3, R.A.
10022 amending R.A. 8042)
Q: What are the minimum conditions/ provisions of
overseas employment contracts?

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31 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

Provided, that the receiving country is taking positive, 1. Regulatory – It regulates the private sector
concrete measures to protect the rights of migrant participation in the recruitment and overseas
workers in furtherance of any of the guarantees. placement of workers through its licensing and
registration system.
Note: In the absence of a clear showing that any of the 2. Adjudicatory
guarantees exists in the country of destination of the a. Administrative cases involving violations of
migrant workers, no permit for deployment shall be issued licensing rules and regulations and
by the POEA.
registration of recruitment and employment
agencies or entities
Q: What is the general rule on repatriation of a b. Disciplinary action cases and other special
worker? cases which are administrative in character
involving employers, principals, contracting
A: GR: The repatriation of the: partners and Filipino migrants.
1. Worker and the transport of his personal
belongings - shall be the primary responsibility of Q: What are the grounds for disciplinary action of
the agency which recruited or deployed the OFWs?
worker overseas.
2. Remains and transport of the personal A: Under R.A. 8042, these are:
belongings of a deceased worker and all costs 1. Prostitution
attendant thereto - shall be borne by the 2. Unjust refusal to depart for the worksite
principal and/or the local agency. 3. Gunrunning or possession of deadly weapons
4. Vandalism or destroying company property
XPNs: 5. Violation of the laws and sacred practices of the
1. If the termination of employment is due host country and unjustified breach of
solely to the fault of the worker, the employment contract
principal/ Er or agency shall not be 6. Embezzlement of funds of the company or fellow
responsible for the repatriation of the former worker entrusted for delivery to relatives in the
and/or his belongings. Phils.
2. In cases of war, epidemic, disaster or 7. Creating trouble at the worksite or in the vessel
calamities, natural or man-made, and other 8. Gambling
similar event, and where the principal or 9. Initiating or joining a strike or work stoppage
recruitment agency cannot be identified, the where the laws of the host country prohibits
Overseas Workers Welfare Administration, in strikes or similar actions
coordination with appropriate international 10. Commission of felony punishable by Philippine
agencies, shall take charge of the repatriation. laws or by the host country
(Sec.15, R.A. 8042) 11. Theft or robbery
12. Drunkenness
Q: What is the rule on mandatory repatriation of 13. Drug addiction or possession or trafficking of
underage migrant workers? prohibited drugs
14. Desertion or abandonment
A: Upon discovery or being informed of the presence
of migrant workers whose ages fall below the Q: What is the distinction between the jurisdiction
minimum age requirement for overseas deployment, of the LA and POEA?
the responsible officers in the foreign service shall
without delay repatriate said workers and advise the A:
DFA through the fastest means of communication
JURISDICTION
available of such discovery and other relevant
Labor Arbiter POEA
information. The license of a recruitment/manning
Original and Original and exclusive
agency which recruited or deployed an underage
exclusive jurisdiction over:
migrant worker shall be automatically revoked and
jurisdiction over all
shall be imposed a fine of not less than P500,000 but
claims arising out of 1. All cases which are
not more than P1,000,000. (Sec. 9, R.A. 10022)
Er-Ee relationship administrative in character
or by virtue of any relating to licensing and
Q: What are the regulatory and adjudicatory
law or contract registration of recruitment
functions of the POEA?
involving OFWs and employment agencies
including claims for:
A:

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2013 GOLDEN NOTES 32
RECRUITMENT AND PLACEMENT

2. Disciplinary Action cases


1. Actual and other special cases,
2. Moral which are administrative
3. Exemplary in character, involving Ees,
4. Other forms of principals, contracting
damages. (Sec. partners and Filipino
10, R.A. 8042) migrant workers. (Rule VII,
Book VII, POEA Rules)

Q: A seafarer was prevented from leaving the port


of Manila and refused deployment without valid
reason. His POEA-approved employment contract
provides that the employer-employee relationship
shall commence only upon the seafarer’s actual
departure from the port in the point of hire. Is the
seafarer entitled to relief under the Migrant
Workers’ Act, in the absence of an employer-
employee relationship?

A: Yes. Despite the absence of an Er-Ee relationship,


the NLRC has jurisdiction over the seafarer’s
complaint. The jurisdiction of LAs is not limited to
claims arising from Er-Ee relationships. Sec. 10 of the
Migrant Workers Act provides that the LAs shall have
jurisdiction over claims arising out of an Er-Ee
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. Since the present case
involves the employment contract entered into by
petitioner for overseas employment, his claims are
cognizable by the LAs of the NLRC [Santiago vs. CF
Sharp Crew Management,G.R. No. 162419, (2007)].

Q: What matters fall outside the jurisdiction of the


POEA?

A:
1. Foreign judgments – such claim must be
brought before regular courts. POEA is not a
court; it is an administrative agency, exercising
adjudicatory or quasi-judicial functions.
2. Torts – falls under the provisions of the Civil
Code.

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33 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

LABOR STANDARDS as to the promotion or any change of status of


other Ees are given particular weight.
HOURS OF WORK 4. Execute under general supervision work along
specialized or technical lines requiring special
COVERAGE/ EXCLUSIONS training, experience, or knowledge
5. Execute under general supervision special
Q: Who are the employees covered by the assignment and tasks; and
conditions of employment under the Labor Code? 6. Do not devote more than 20% of their hours
worked to activities which are not directly and
A: GR: The conditions of employment under the LC closely related to the performance of the work
apply to Ees in all establishments and undertakings described.
whether for profit or not.
Q: Why are managerial employees not covered by
XPNs: the conditions of employment under the Labor
1. Government Ees Code?
2. Managerial Ees
3. Field personnel A: They are employed by reason of their special
4. The Er’s family members who depend on him training, expertise or knowledge and for positions
for support requiring the exercise of discretion and independent
5. Domestic helpers and persons in the personal judgment. Value of work cannot be measured in
service of another, and terms of hours.
6. Workers who are paid by results as
determined under DOLE regulations. [Art. 82. Q: Who are field personnel?
LC]
A: They are:
Q: Who are government employees? 1. non-agricultural Ees
2. who regularly perform their duties
A: They are Ees of the: 3. away from the principal place of business or
1. National Government branch office of the Er; and
2. Any of its political subdivisions 4. whose actual hours of work in the field cannot be
3. Including those employed in GOCCs with original determined with reasonable certainty.
charters
Q: Who are domestic helpers and persons in the
Q: What law governs government employees? personal service of another?

A: The Civil Service Law, rules and regulations. A: Those who:


1. perform services in the Er’s home which are
Q: Who are managerial employees? usually necessary or desirable for the
maintenance or enjoyment thereof; or
A: Those whose primary duty consists of the 2. minister to the personal comfort, convenience or
management of the establishment in which they are safety of the Er as well as the members of his Er’s
employed or a department or subdivision thereof, household.
and other officers or members of the managerial
staff. [Art. 82(2), LC] Q: A house personnel was hired by a ranking
company official to maintain a staff house provided
They must meet all of the ff. conditions, namely: for the official. The personnel is being paid by the
company itself. Is the house personnel a domestic
1. Primary duty: management of the establishment servant of the company official?
in which they are employed or of a department
or sub-division thereof; A: No, the personnel is not a domestic helper but a
2. Customarily or regularly direct the work of 2 or regular Ee of the company [Apex Mining vs. NLRC,
more Ees G.R. No. 9366, (1991); Remington Industrial Sales
3. Has the authority to hire or fire other Ees of Corporation, G.R. Nos. 169295-96, (2006)].
lower rank; or their suggestions and
recommendations as to the hiring and firing and Q: When do the conditions of employment under
the Labor Code apply?

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 34
LABOR STANDARDS
an Er-Ee relationship, noting that "[the] supervisor,
A: Only if an Er-Ee relationship exists. although compensated on a commission basis, [is] exempt
from the observance of normal hours of work for his
compensation is measured by the number of sales he
Q: Who determines working conditions?
makes" [Lazaro vs. SSS, 435 SCRA 472].

A: Generally, they are determined by the Er, as he is


Q: What is the rationale behind the law on eight-
usually free to regulate, according to his discretion,
hour labor?
all aspects of employment.
A: It is enacted not only to safeguard the health and
Q: What is the limitation on the employer’s power
welfare of the Ee or laborer, but also in a way to
to regulate working conditions?
minimize unemployment by forcing Ers, in cases
where more than 8-hour operation is necessary, to
A: It must be done in good faith and not for the
utilize different shifts of laborers or Ees working only
purpose of defeating or circumventing the rights of
for 8 hours each.
the Ees. Such are not always absolute and must be
exercised with due regard to the rights of labor.
Q: What are considered hours worked?
Note: One’s employment, profession, trade or calling is a
property right and the wrongful interference therewith is A:
an actionable wrong. 1. All time during which an Ee is required to be:
a. On duty, or
Q: What are the 3 groups of employees under the b. At the Ers premises, or
LC? c. At a prescribed workplace
2. All time during which an Ee is suffered or
A: permitted to work. (Sec. 3, Rule I, Book III, IRR)
1. Managerial Ee - One who is vested with the
powers or prerogatives to lay down and execute Q: What are the principles in determining hours
management policies and/or to hire, transfer, worked?
suspend, lay-off, recall, discharge, assign or
discipline Ees. A:
2. Supervisory Ee - those who in the interest of the 1. All hours which the Ee is required to give to his Er
Er, effectively recommend such managerial regardless of whether or not such hours are
actions if the exercise of such authority is not spent in productive labor or involve physical or
merely routinary or clerical in nature but requires mental exertion.
the use of independent judgment. 2. Rest period is excluded from hours worked, even
3. Rank-and-file Ee - all Ees not falling within any of if Ee does not leave his workplace, it being
the above definitions. (Art. 212[m], LC) enough that:
a. He stops working
NORMAL HOURS OF WORK b. May rest completely
c. May leave his workplace, to go elsewhere,
Q: What are the normal hours of work of an whether within or outside the premises of
employee? the workplace
3. All time spent for work is considered hours worked
A: GR: The normal hours of work of any Ee shall not if:
exceed 8 hours a day. (Art. 83, LC) a. The work performed was necessary
b. If it benefited the Er
XPNs: c. Or the Ee could not abandon his work at the
1. Health Personnel end of his normal working hours because he
2. Compressed Workweek had no replacement
d. Provided, the work was with the knowledge
Note: Normal hours of work may be shortened or of his Er or immediate supervisor
compressed. Neither does it follow that a person who does 4. The time during which an Ee is inactive by reason
not observe normal hours of work cannot be deemed an of interruptions in his work beyond his control shall
employee. In Cosmopolitan Funeral Homes, Inc. vs. Maalat, be considered working time:
the employer similarly denied the existence of an Er-Ee a. If the imminence of the resumption of the
relationship, as the claimant according to it, was a
work requires the Ees presence at the place of
"supervisor on commission basis" who did not observe
work; or
normal hours of work. This Court declared that there was

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35 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

b. If the interval is too brief to be utilized i. Emergency call outside his regular
effectively and gainfully in the Ees own working hours where he is required to
interest. (Sec. 4, Rule I, Book III, IRR) travel to his regular place of business or
some other work site.
Q: What are the hours of work of health personnel? ii. Done through a conveyance provided by
the Er.
A: GR: 8 hours for 5 days (40-hour workweek), iii. Done under the supervision and control
exclusive of time for meals. of the Er.
iv. Done under vexing and dangerous
XPN: Where the exigencies of the service require circumstance.
that such personnel work for 6 days or 48 hours,
they shall be entitled to an additional b. Travel that is all in a day’s work – time spent
compensation of at least 30% of their regular in travel as part of the Ees principal activity
th
wage for work on the 6 day. (Art. 83, LC)
E.g. travel from job site to job site during the
Q: Can hospitals require resident physicians to be on work day, must be counted as working
duty beyond the 40-hour workweek limitation? hours.

A: GR: The customary practice of requiring resident c. Travel away from home
physicians beyond the 40 hrs. of work per week is not GR:
permissible and violates the limitation under Art. 83. a. Travel that requires an overnight stay on
the part of the Ee when it cuts across
XPN: If there is a training agreement between the the Ees workday is clearly working time.
resident physician and the hospital and the training b. The time is not only hours worked on
program is duly accredited or approved by regular workdays but also during
appropriate government agency. corresponding working hours on non-
working days. Outside of these regular
Q: Who are the health personnel covered by the 40- working hours, travel away from home
hour workweek? is not considered working time.

A: XPN: During meal period or when Ee is


1. Those in cities and municipalities with a permitted to sleep in adequate facilities
population of at least 1 million; or furnished by the Er.
2. Those in hospitals and clinics with a bed capacity
of at least 100 Q: When are hours not counted to be compensable?

Note: Art. 83(2) of the LC does not require hospitals to pay A:


the Ees a full weekly salary with paid 2 days off [San Juan de 1. Ee ceases to work
Dios Ees Assoc.-AFW et al. vs. NLRC, G.R. No. 126383, 2. Ee may rest completely
(1997)].
3. Ee may leave at his will the spot where he
actually stays while working to go somewhere
Q: When are hours worked compensable? else (Luzon Stevedoring vs. Luzon Marine)
4. When work is broken/not continuous (NDC vs.
A: When: CIR)
1. Ee is required to be on duty 5. Assembly time, routinary practice of employees,
2. Ee is suffered or permitted to work proceedings not infected with complexities so as
3. Rest periods of short duration during working to deprive employees time to attend to their
hours personal pursuits (Arica vs. NLRC)
4. Travel time, when beneficial to the Er (Rada vs. 6. Meal time (60 mins.), unless predominantly
NLRC): spent for the Er’s benefit
a. Travel from home to work Note: Activities before work and after work are deemed
GR: Normal travel from home to work is not performed during work hours, where such activities are
working time. controlled or required by the Er and are pursued
necessarily and primarily for the Er’s benefit.
XPNs:
COMPRESSED WORKWEEK

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2013 GOLDEN NOTES 36
LABOR STANDARDS

have ceased to be working days because of the


Q: What is a Compressed Workweek? compressed work week schedule.
5. No strenuous physical exertion or that they are
A: The normal workweek is reduced to less than 6 given adequate rest periods.
days but the total number of work-hours of 48 hours 6. It must be for a temporary duration as
per week shall remain. The normal workday is determined by the DOLE.
increased to more than 8 hours but not to exceed 12
hours, without corresponding overtime premium. The Q: What are the requisites for adoption of
concept can be adjusted accordingly depending on compressed workweek?
the normal workweek of the company. (Department
Advisory Order No. 2, Series of 2009) A:
1. The Er shall notify the DOLE through the Regional
Q: When is the implementation of a compressed Office which has jurisdiction over the workplace,
workweek valid? of the adoption of compressed workweek.
2. The notice shall be in Report Form attached to
A: The validity of the reduction of working hours can the advisory.
be upheld when the arrangement is: 3. The Regional Office shall conduct an ocular visit
1. Temporary to validate whether the adoption of the flexible
2. It is a more humane solution instead of a work arrangements is in accordance with this
retrenchment of personnel issuance. (Department Advisory Order No. 2,
3. There is notice and consultations with the Series of 2009)
workers and supervisors
4. A consensus is reached on how to deal with MEAL BREAK
deteriorating economic conditions; and
5. It is sufficiently proven that the company was Q: What is the duration of the meal period?
suffering from losses.
A: Every Er shall give his Ees not less than 60 minutes
Under the Bureau of Working Conditions’ bulletin, a or 1 hour time-off for regular meals.
reduction of the number of regular working days
(RWD) is valid where the arrangement is resorted to Q: Is the meal period compensable?
by the Er to prevent serious losses due to causes
beyond his control, such as when there is a A: Being a time-off, it is not compensable. Ee must be
substantial slump in the demand for his goods or completely relieved from duty.
services or when there is a lack of raw materials.
There is one main consideration in determining the Q: When is the meal period considered
validity of reduction of working hours – that the compensable?
company was suffering from losses. A year of
financial losses would not justify a reduced workweek A: It is compensable where the lunch period or meal
[Linton Commercial vs. Hellera, G.R. No. 163147, time:
(2007)]. 1. Is predominantly spent for the Er’s benefit; or
2. Where it is less than 20 mins.
Q: Under what conditions may a "compressed
workweek" schedule be legally authorized as an Note: Where during a meal period, the laborers are
exception to the "8-hour a day" requirement under required to stand by for emergency work, or where the
the LC? (2005 Bar Question) meal hour is not one of complete rest, such is considered
OT. [Pan Am vs. Pan Am Ees Association, G.R. No. L-16275,
(1961)] Rest periods or coffee breaks running from 5 to 20
A:
mins. shall be considered as compensable working time.
1. The Ee voluntarily agrees to it (Sec. 7, Rule I, Book III, IRR)
2. There is no diminution in their weekly or monthly
take home pay or fringe benefits Q: Are meal periods provided during overtime work
3. The benefits are more than or at least compensable?
commensurate or equal to what is due to the Ees
without the compressed work week A: Yes, since the 1 hour meal period (non-
4. OT pay will be due and demandable when they compensable) is not given during OT work because
are required to work on those days which should the latter is usually for a short period and to deduct
from the same would reduce to nothing the Ees’ OT

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37 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

work. Thus, the 1 hour break for meals during OT 1. If waiting is an integral part of his work, or
should be treated as compensable. 2. The Ee is required or engaged by the Er to wait
(engaged to wait)
Q: What are the instances where meal periods
shortened to not less than 20 minutes is Note: The controlling factor is whether waiting time spent
compensable or not compensable? in idleness is so spent predominantly for the Er’s benefit or
for the Ee.
A:
1. Compensable – At the instance of Er, when: Q: When is waiting time not considered working
a. Work is non-manual in nature or does not time?
involve strenuous physical exertion;
b. Establishment regularly operates less than A: When the Ee is waiting to be engaged: idle time is
16 hours a day; not working time; it is not compensable.
c. Work is necessary to prevent serious loss of
Note: Under the law, the idle time that an Ee may spend for
perishable goods.
resting and during which he may leave the spot or place of
d. Actual or impending emergency or there is
work though not the premises of his Er, is not counted as
urgent work to be performed on working time only where the work is broken or is not
machineries and equipment to avoid serious continuous [National Development Co. vs. CIR, 6 SCRA 763
loss which the Er would otherwise suffer. (1962)].
(Sec. 7, Rule I, Book III, IRR)
Q: When is idle time considered working time?
2. Not Compensable – Ee requested for the shorter
meal time so that he can leave work earlier than A: When the Ee is idle or inactive by reason of
the previously established schedule. Requisites: interruptions beyond his control shall be considered
a. Ees voluntarily agree in writing and are working time.
willing to waive OT pay for the shortened
meal period; Q: What are the conditions in order for lectures,
b. No diminution in the salary and other fringe meetings and training programs to be NOT
benefits of the Ees which are existing before considered as working time?
the effectivity of the shortened meal period;
c. Work of the Ees does not involve strenuous A: All of the ff. conditions must be present:
physical exertion and they are provided with 1. Attendance is outside of the Er’s regular working
adequate coffee breaks in the morning and hours
afternoon; 2. Attendance is in fact voluntary and
d. Value of the benefits derived by the Ees 3. The Ee does not perform any productive work
from the proposed work arrangements is during such attendance.
equal to or commensurate with the
compensation due them for the shortened OVERTIME WORK, OVERTIME PAY
meal period as well as the OT pay for 30
mins. as determined by the Ees concerned; Q: What is overtime work?
e. OT pay will become due and demandable
after the new time schedule A: Work performed beyond 8 hours within the
f. Arrangement is of temporary duration. worker’s 24-hour workday.

WAITING TIME Note: Express instruction from the Er to the Ee to render


OT work is not required for the Ee to be entitled to OT pay;
Q: When is an employee considered working while it is sufficient that the Ee is permitted or suffered to work.
on call? However, written authority after office hours during rest
days and holidays are required for entitlement to
compensation.
A: When Ee is required to remain on call in the Er’s
premises or so close thereto that he cannot use the
Q: What is a work day?
time effectively and gainfully for his own purpose.
A: The 24-hour period which commences from the
Q: When is waiting time considered working time?
time the Ee regularly starts to work
A:

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 38
LABOR STANDARDS

Illustration: If the worker starts to work 8 am Q: What is the basis of computing the overtime pay
today, the workday is from 8 am today up to and additional remuneration?
8 am tomorrow.
A: Regular wage which includes the cash wage only,
Note: Minimum normal working hours fixed by law need without deduction on account of the facilities
not be continuous to constitute the legal working day. provided by the Er. (Art. 90, LC)

Q: What is the rationale behind the overtime pay? Q: In lieu of overtime pay, the employee was given
permission to go on leave on some other day, is that
A: Ee is made to work longer than what is valid?
commensurate with his agreed compensation for the
statutory fixed or voluntarily agreed hours of labor he A: No. Permission given to the Ee to go on leave on
is supposed to do [PNB vs. PEMA and CIR, G.R. No. L- some other day of the week shall NOT exempt the Er
30279, (1982)]. It discourages the Er from requiring from paying the additional compensation required
such work thus protecting the health and well-being because it would prejudice the Ee, for he will be
of the worker, and also tend to remedy deprived of the additional pay for the OT work he has
unemployment by encouraging Ers to employ others rendered and which is utilized to offset the
workers to do what cannot be accomplished during undertime he may have incurred. Undertime could be
the normal hours of work. charged against the Ees accrued leave.

Q: Distinguish overtime pay from premium pay. Q: Socorro is a clerk-typist in Hospicio de San Jose, a
charitable institution dependent for its existence on
A: contributions and donations from well wishers. She
OVERTIME PAY PREMIUM PAY renders work 11 hours a day but has not been given
Additional compensation for OT pay since her place of work is a charitable
Additional work performed within 8 hours institution. Is Socorro entitled to overtime pay?
compensation for on days when normally he should Explain briefly. (2002 Bar Question)
work performed not be working (on non-working
beyond 8 hours days, such as rest days and A: Yes. Socorro is entitled to OT compensation. She
on ordinary days special days.) does not fall under any of the exceptions to the
(within the But additional compensation for coverage of Art. 82, under the provisions of hours of
worker’s 24-hour work rendered in excess of 8 work. The LC is equally applicable to non-profit
workday) hours during these days is also institutions. A covered Ee who works beyond 8 hours
considered OT pay. is entitled to OT compensation.

Q: What are the overtime pay rates? Q: Flores applied for the position of driver in the
motor-pool of Gold Company, a multinational
A: corporation. Danilo was informed that he would
PAY RATES frequently be working overtime as he would have to
OT during a regular working day drive for the company's executives even beyond the
ordinary 8-hour work day. He was provided with a
Additional compensation of 25% of the regular wage contract of employment wherein he would be paid a
monthly rate equivalent to 35 times his daily wage,
OT during a holiday or rest day
regular sick and vacation leaves, 5 day-leave with
Rate of the first 8 hours worked on
pay every month and time off with pay when the
plus at least 30% of the regular wage (RW):
company's executives using the cars do not need
Danilo's service for more than eight hours a day, in
If done on a special holiday OR rest day:
lieu of overtime. Are the above provisions of the
30% of 130% of RW
contract of employment in conformity with, or
violative of, the law?
If done on a special holiday AND rest day:
30% of 150% of RW
A: Except for the provision that Danilo shall have time
off with pay when the company's executives using the
If done on a regular holiday:
cars do not need Danilo's service for more than 8
30% of 200% of RW
hours a day, in lieu of OT, the provisions of the
contract of employment of Danilo are not violative of

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any labor law because they instead improve upon the A: Where a worker incurs undertime hours during his
present provisions of pertinent labor laws. regular daily work, said undertime hours should not
be offset against the overtime hours on the same day
Q: May an employee be compelled to render or on any other day. It is both prohibited by the
overtime work? statute and by jurisprudence.

A: GR: No. An Ee may not be compelled to render OT


Q: Can the right to overtime pay be waived?
work; it is voluntary.
A: GR: The right to OT pay cannot be waived as it is
XPNs: Compulsory OT work in any of the following
governed by law and not merely by the agreement of
situations:
the parties.
1. Urgent work to be performed on machines
and installations in order to avoid serious
XPNs:
loss or damage to the Er or some other
1. If the waiver is made in exchange for certain
cause of similar nature
valuable benefits and privileges, which may
2. Work is necessary to prevent loss or damage
even exceed the OT Pay, waiver may be
to perishable goods
permitted.
3. In case of imminent danger to the public
2. Compressed workweek
safety due to an actual or impending
emergency in the locality caused by serious
Q: May the overtime rate be subject to stipulation
accidents, fire, flood, typhoon, earthquake,
of the employer and employee?
epidemic or other disaster or calamity
4. Country is at war
A: Generally, the premium for work performed on
5. Completion or continuation of the work
the Ee’s rest days or on special days or regular
started before the 8th hour is necessary to
holidays are included as part of the regular rate of the
prevent serious obstruction or prejudice to
Ee in the computation of OT pay for any OT work
the business operations of the Er
rendered on said days especially if the Er pays only
6. Any other national or local emergency has
the minimum OT rates prescribed by law. The Ees
been declared
and Er, however, may stipulate in their collective
7. Necessary to prevent loss of life or property.
agreement the payment of OT rates higher than
those provided by law and exclude the premium rates
Note: There should be payment of additional
compensation. Ees refusal to obey the order of the Er in the computation of OT pay. Such agreement may
constitutes insubordination for which he may be subjected be considered valid only if the stipulated OT pay rates
to disciplinary action. will yield to the Ees not less than the minimum
prescribed by law.
Q: The employment contract requires work for more
than 8 hours a day with a fixed wage inclusive of Q: Can there be overtime pay in a compressed
overtime pay. Is that valid? workweek scheme?

A: It depends. A: Any work performed beyond 12 hours a day or 48


1. When the contract of employment requires work hours a week shall be subject to overtime premium.
for more than 8 hours at specific wages per day, (Department Advisory No. 02, s. of 2004)
without providing for a fixed hourly rate or that
the daily wages include OT pay, said wages NIGHT WORK (R.A. 10151), NIGHT SHIFT
cannot be considered as including OT DIFFERENTIAL
compensation [Manila Terminal Co. vs. CIR, et al.,
91 Phil., 625]. Q: What is night work?
2. However, the employment contract may provide
for a “built-in” OT pay. Because of this, non- A: Any and all work rendered between 6 pm and 6
payment of OT pay by the employer is valid am [National Rice & Corn Corp. vs. NARIC, 105 Phil
[Engineering Equipment vs. Minister of Labor, 891].
G.R. No. L-64967, (1985)].
Q: Who is a night worker?
Q: Can undertime (UT) offset overtime?
A: Any employed person whose work requires
performance of a substantial number of hours of

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LABOR STANDARDS

night work which exceeds a specified limit. This limit be taken to ensure that an alternative to night work is
shall be fixed by the SLE after consulting the workers’ available to women workers who would otherwise be
representatives/labor organizations and Ers. (Art. called upon to perform such work:
154, Chapter V, LC, as amended by R.A. 10151)
1. Before and after childbirth, for a period of at
Q: Who are covered by the provisions on night work least 16 weeks, which shall be divided between
under R.A. 10151? the time before and after childbirth;
2. For additional periods, in respect of which a
A: GR: All persons, who shall be employed or medical certificate is produced stating that said
permitted or suffered to work at night. additional periods are necessary for the health of
the mother or child:
XPN: Those employed in agriculture, stock a. During pregnancy;
raising, fishing, maritime transport and inland b. During a specified time beyond the period,
navigation, during a period of not less than 7 after childbirth is fixed pursuant to
consecutive hours, including the interval from paragraph 1, the length of which shall be
midnight to 5 in the morning, to be determined determined by the DOLE after consulting the
by the SLE after consulting the workers’ labor organizations and Ers.
representatives/ labor organizations and Ers.
Note: During the periods referred to in this article:
Q: What is night shift differential (NSD)? 1. A woman worker shall not be dismissed or given notice
of dismissal, except for just or authorized causes
provided for in the Code that are not connected with
A: It is additional compensation of not less than 10%
pregnancy, childbirth and childcare responsibilities.
of an Ee’s regular wage for every hour worked
2. A woman worker shall not lose the benefits regarding her
between 10 pm to 6 am, whether or not such period status, seniority, and access to promotion which may
is part of the worker’s regular shift. attach to her regular night work position.

Q: Do workers have the right to undergo health Q: May a pregnant women and nursing mothers be
assessment to avoid health problems associated allowed to work at night?
with night work?
A: Yes, but only if a competent physician, other than
A: At their request, workers shall have the right to the company physician, shall certify their fitness to
undergo health assessment without charge and to render night work, and specify, in the case of
receive advice on how to reduce or avoid health pregnant Ees, the period of the pregnancy that they
problems associated with their work: can safely work.
1. Before taking up an assignment as a night
worker; Q: What are the facilities required from Ers under
2. At regular intervals during such an R.A. 10151?
assignment; and
3. If they experience health problems during A:
such an assignment which are not caused by 1. Suitable first-aid facilities, including arrangements
factors other than the performance of night where such workers, where necessary, can be
work. taken immediately to a place for appropriate
treatment.
Note: Night workers who are certified as unfit for night 2. Safe and healthful working conditions and
work, due to health reasons, shall be transferred, whenever
adequate or reasonable facilities, i.e. sleeping or
practicable, to a similar job for which they are fit to work. If
resting quarters in the establishment, and
such transfer to a similar job is not practicable, these
workers shall be granted the same benefits as other transportation from the work premises to the
workers who are unable to work, or to secure employment nearest point of their residence subject to
during such period. exceptions and guidelines to be provided by the
DOLE.
Q: Are women allowed to be employed for night
work? Q: May an Ee waive his right to night shift
differential?
A: Yes, under R.A. 10151 which repealed Arts. 130
and 131 of the LC on Night Work prohibition with
regard to women workers. However, measures shall

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A: GR: No, such waiver is against public policy Q: What is the test to determine if one is an Ee or an
[Mercury Drug Co., Inc. vs. Dayao, et al., G.R. No. independent contractor?
L-30452, (1982)].
A: The “right of control” test is used. If the person for
XPN: Higher/better benefits whom services are to be performed controls only the
end to be achieved, the worker is a contractor; if the
PART-TIME WORK former controls not only the end but also the manner
and means to be used, the latter is an employee.
Q: Is part-time work prohibited under Philippine
laws? Q: What can the contractor furnish?

A: No, it is not prohibited. The LC merely provides for A: The contractor may furnish:
the maximum number of hours and not the 1. Both material and labor, or
minimum. Under Art. 124, as amended by R.A. 6727, 2. Only labor
wage proportionate to part-time work is recognized.
Q: What are the duties of a contractor who furnishes
Note: The wage and benefits of a part-time worker are in both work and the material?
proportion to the number of hours worked. For example, if
an Ee earns P300.00 for an 8-hour work, he shall then get A: This is equivalent to sale; therefore, these are the
P150.00 for work done in 4 hours.
duties:
1. To deliver
CONTRACT FOR A PIECE OF WORK 2. To transfer ownership
3. To warrant against eviction and hidden defects
Q: Define contract for a piece of work.
Q: What are the remedies of the Er in case of
A: It is a contract whereby the contractor binds defects?
himself to execute a piece of work for the Er, in price
or consideration of a certain compensation. The A:
contractor may employ his labor, skill or also furnish 1. Ask the contractor to remove the defect or to
the material. execute another work.
2. If the contractor fails or refuses, the Er can ask
Note: All workers paid on piece-work shall be entitled to
another at the contractor’s expense. If a building
receive not less than the prescribed daily minimum wage or
is involved, expenses for correction and
a proportion thereof for working less than 8 hours.
completion may be recovered.
Q: Distinguish contract for piece of work from lease
of services. Q: What is the rule on agreements waiving or
limiting the contractor’s liability?
A:
A:
CONTRACT FOR PIECE OF
LEASE OF SERVICES 1. In the absence of fraud, the agreement would
WORK
ordinarily be valid.
The object is the 2. In the absence of prohibitory statute, the validity
The object is services.
resultant work or object. of a limitation is generally upheld, with a view of
The risk is generally obtaining compensation commensurate to the
borne by the Er, not by risk assumed.
The risk is borne by the
the worker unless the
worker before delivery.
latter is guilty of fault or Q: A asked B to make a radio cabinet. B bound
negligence. himself to furnish the material. Before the radio
cabinet could be delivered, it was destroyed by a
Q: Who is a contractor? fortuitous event. a) Who suffers the loss? b) Is the
contract extinguished?
A: The worker is also called a contractor. He in turn
may obtain the services of others, who will work A:
under him. 1. B suffers the loss of both the materials and the
work, unless there was mora accipiendi. If there

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LABOR STANDARDS

was mora accipiendi, it is evident that A suffers


the loss. Q: What is the “No Work, No Pay” Principle (fair
2. No, and therefore B may be required to do the day’s wage for a fair day’s labor)?
work all over again, unless there had been a prior
stipulation to the contrary or unless a re-making A: GR: If there is no work performed by the Ee,
is possible. (Art. 1717, NCC) without the fault of the Er, there can be no wage or
pay.
Note: The law merely refers to the burden of the loss, and
not to the extinguishment of the contract. XPNs: The laborer was able, willing and ready to
work but was:
Q: What is the effect when the employer accepts the 1. Prevented by management;
work? 2. Illegally locked out;
3. Illegally suspended;
A: 4. Illegally dismissed
1. The contractor is generally relieved of liability. 5. Otherwise illegally prevented from working
2. If the acceptance is made without objection, the [Aklan Electric Coop. vs. NLRC, G.R. No.
Er may still sue for hidden defects. 129246, (2000)].

Q: Where is the place of payment? Q: To whom does the title on Wages apply?

A: A: GR: It applies to all Ees.


1. Where stipulated
2. If no stipulation, then at the time and place of XPNs:
delivery. 1. Farm tenancy or leasehold;
2. Household or domestic helpers, including
Q: What is mechanic’s lien? family drivers and persons working in the
personal service of another;
A: One who executed a work on a movable property 3. Home workers engaged in needlework or in
has a right to retain it by way of pledge until he is any cottage industry duly registered in
paid. accordance with law;
4. Workers in duly registered cooperatives when
WAGES so recommended by the Bureau of
Cooperative Development and upon approval
Q: What is a wage? of the SLE.
5. Workers of a barangay micro business
A: It is the remuneration or earnings, however enterprise (R.A. 9178)
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, WAGE vs. SALARY
piece, or commission basis, or other method of
calculating the same, payable by an Er to an Ee under Q: Distinguish between wage and salary?
a written or unwritten contract of employment:
A:
1. For work done or to be done, or for services WAGE SALARY
rendered or to be rendered; and includes (Gaa vs.CA, G.R. No. 44169, Dec. 3, 1985)
2. Fair and reasonable value of board, lodging, or Compensation for Paid to “white collared
other facilities customarily furnished by the Er to manual labor (skilled or workers” and denotes a
the Ee as determined by SLE. unskilled) also known as higher degree of
“blue collared workers,” employment or a
Q: What is meant by “customary”? paid at stated times and superior grade of
measured by the day, services and implies a
A: It is founded on long-established and constant week, month or season. position in the office.
practice connoting regularity. Considerable pay for a
Out gesture of a larger
lower and less
Q: What is meant by “fair and reasonable value”? and more important
responsible character of
service
employment.
A: It shall not include any profit to the Er or to any GR: Not subject to Subject to execution.
person affiliated with the Er.

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43 FACULTY OF CIVIL LAW
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execution
Q: What are the standards or criteria for minimum
XPN: Debts incurred for wage setting?
food, shelter, clothing
and medical attendance. A: In the determination of such regional minimum
wages, the Regional Board shall, among other
MINIMUM WAGE DEFINED, MINIMUM WAGE relevant factors consider the following:
SETTING
1. The demand for living wages
Q: What is minimum wage? 2. Wage adjustment vis-a-vis the consumer price
index
A: Statutory minimum wage is the lowest wage rate 3. The cost of living and changes or increases
fixed by law that an Er can pay his workers. therein
4. The needs of workers and their families
Q: What is the rationale for fixing a minimum wage? 5. The need to induce industries to invest in the
countryside
A: The legislature was entitled to adopt measures to 6. Improvements in standards of living
reduce the evils of the “sweating system,” the 7. The prevailing wage levels
exploiting of workers at wages so low as to be 8. Fair return on the capital invested and capacity
insufficient to meet the bare cost of living, thus to pay by Ers
making their very helplessness the occasion of a most 9. Effects on employment generation and family
injurious competition. The legislature had the right to income
consider that its minimum wage requirements would 10. The equitable distribution of income and wealth
be an important aid in carrying out its policy of along the imperatives of economic and social
protection. development

There is also an additional and compelling Q: What is salary ceiling method?


consideration which recent economic experience has
brought into a strong light. The exploitation of a class A: A method of minimum wage adjustment whereby
of workers who are in an unequal position with the wage adjustment is applied to Ees receiving a
respect to bargaining power and are thus relatively certain denominated ceiling. In other words, workers
defenceless against the denial of a living wage is not already being paid more than the existing minimum
only detrimental to their health and well-being but wage are also to be given a wage increase [ECOP vs.
casts a direct burden of their support upon the NWCP, G.R. No. 96169, (1991)].
community. What these workers lose in wages the
taxpayers are called upon to pay. The bare cost of Q: What is a floor wage method?
living must be met [West Coast Hotel v. Parrish, 300
US 79]. A: It involves the fixing of a determinate amount to
be added to the prevailing statutory minimum wage
Q: Who are exempted from the coverage of fixing a rates.
minimum wage?
Q: The Regional Wage Board of Region II issued a
A: Wage Order granting all Ees in the private sector
1. Household or domestic helpers, including family throughout the region an across-the-board increase
drivers and persons in the personal service of of P15.00 daily. Is this Wage Order valid?
another;
2. Homeworkers engaged in needle-work; A: The Wage Order is valid insofar as the mandated
3. Workers employed in any establishment duly increase applies to Ees earning the prevailing
registered with the National Cottage Industries minimum wage rate at the time of the passage of the
and Development Authority, provided that such Wage Order and void with respect to its application
workers perform the work in their respective to Ees receiving more than the prevailing minimum
homes; wage rate at the time of the passage of the Wage
4. Workers in a duly registered cooperative when Order. The Regional Wage granted an across-the-
so recommended by the Bureau of Cooperative board wage increase of P15.00 to all Ees in the
Development and upon approval of the SLE. (Sec. region. It did not set a wage level nor a range to
2, Rule VII, Book III, IRR of LC) which a wage adjustment or increase shall be added.

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LABOR STANDARDS

In doing so, the Regional Wage Board exceeded its the DOLE – the number of pieces produced is
authority by extending the coverage of the Wage multiplied by the rate per piece as determined by
Order to wage earners receiving more than the the Er.
prevailing minimum wage rate, without a a. If resulting amount is equivalent to or more
denominated salary ceiling. The Wage Order granted than the applicable statutory minimum rate
additional benefits not contemplated by R.A. No. in relation to the number of hours worked –
6727. [MBTC vs. NWPC Commission, G.R. No. 144322, worker will receive such amount
(2007)] b. If the amount is less than the applicable legal
rate – Er is required by law to pay the
Q: Since the Wage Order was declared void with difference between the resulting amount
respect to its application to employees receiving and the applicable legal minimum rate.
more than the prevailing minimum wage rate at the
time of the passage of the Wage Order, should these APPRENTICES/LEARNERS/PERSONS WITH DISABILITY
Ees refund the wage increase received by them?
Q: What is the minimum wage rate for
A: No. The Es should not refund the wage increase apprentices/learners and persons with disability?
since they received it in good faith, in the honest
belief that they are entitled to such wage increase A: The wage or salary rate shall not be less than 75%
and without any knowledge that there was no legal of the applicable minimum wage.
basis for the same [MBTC vs. NWPC Commission, G.R.
NO. 144322, (2007)]. COMMISSION

MINIMUM WAGE OF WORKERS PAID BY RESULTS Q: What is a commission?

Q: Who are workers paid by results? A: A fee paid based on a percentage of the sale made
by an Ee or agent, as distinguished from regular
A: They are: payments of wages or salary.
1. paid based on the work completed; and
2. not on the time spent in working Q: Are commissions included in the computation of
3. Including those who are paid on piecework, the basic salary?
“takay”, “pakiaw”, or task basis if their output
rates are in accordance with the standards A:
prescribed. 1. If the commission is comprised of a pre-
determined percentage of the selling price of the
WORKERS PAID BY RESULTS goods – included in the basic salary
2. If the commission were paid as productivity
Q: What is the application of wage orders to bonuses or closely resemble profit-sharing, or
workers paid by results? when it has no clear, direct or necessary relation
to the amount of work actually done by each
A: All workers paid by result, including those who are individual employee – excluded from basic salary
paid on piece work, “takay” or task basis, shall be
entitled to receive not less than the prescribed daily DEDUCTIONS FROM WAGES
minimum wage or a proportion thereof for working
less than 8 hours. Q: What is the rule on wage deductions?

Q: What is the minimum wage of workers paid by A: GR: Deductions from wages are strictly prohibited
results?
XPNs:
A: 1. Deductions under Art. 113 of the LC for
1. Those who are paid piece rates which are insurance premiums
prescribed in Piece Rate orders issued by DOLE – 2. Union dues in cases where the right of the
wages or earnings are determined by simply worker or his union to check off has been
multiplying the number of pieces produced by recognized by the Er or authorized in writing
the rate per piece. by the individual worker concerned (Art.
2. Those who are paid output rates which are 113, LC). Art. 241(o) of the LC provides that
prescribed by the Er and are not yet approved by special assessments may be validly checked-

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45 FACULTY OF CIVIL LAW
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off provided that there is an individual 1. Is based on an express policy of the law; or
written authorization duly signed by every 2. Has ripened into practice over a long period of
Ee. time and the practice is consistent and deliberate
3. Deductions for SSS, Medicare and Pag-ibig and is not due to an error in the construction/
premiums application of a doubtful or difficult question of
4. Taxes withheld pursuant to the Tax Code law.
5. Deductions under Art. 114 of the LC for loss
or damage to tools, materials or equipment FACILITIES vs. SUPPLEMENTS
6. Deductions made with the written
authorization of the Ee for payment to a Q: Distinguish between facilities and supplement
third person. (Sec 13, Rule VIII, Book III of the
IRR) A:
7. Deductions as disciplinary measures for FACILITIES SUPPLEMENT
habitual tardiness (Opinion dated March 10, Extra remuneration or
1975 of the Labor Secretary) Items of expenses special privileges or
8. Agency fees under Art. 248(e)of the LC necessary for the laborer’s benefits given to or
9. Deductions for value of meals and facilities and his family’s existence received by the laborers
freely agreed upon and subsistence over and above their
10. In case where the Ee is indebted to the Er ordinary earnings or
where such indebtedness has become due Note: Does not include tools wages [Atok Big Wedge
and demandable. (Art. 1706, NCC) of trade or articles / services
Mining Co. vs. Atok Big
primarily for the benefit of
11. In court awards, wages may be subject of Wedge Mutual Benefit
the Er or necessary to the
execution or attachment, but only for debts conduct of the Er’s business. Assoc., G.R. No. L-7349,
incurred for food, shelter, clothing, and (1955)].
medical attendance. (Art. 1703, NCC) Forms part of the wage Independent of wage
12. Salary deduction of a member of a legally Deductible from wage Not wage deductible
established cooperative. (R.A. 6938, Art. 59, For the benefit of the Granted for the
LC) worker and his family. convenience of the Er.

Q: Are deductions for absences allowed? Q: What is the criterion in determining whether an
item is a supplement or facility?
A: Yes. Deductions for unpaid absences are allowed.
If the Ee is monthly paid, the equivalent daily rate A: The criterion is not so much with the kind of the
should be determined first before making the benefit or item (food, lodging, bonus or sick leave)
deduction. given, but its purpose [State Marine vs. Cebu
Seamen’s Ass’n., G.R. No. L-12444, (1963)].
NON-DIMINUTION OF BENEFITS
Q: When can the cost of facilities furnished by the
Q: What is the concept of non-diminution of employer be charged against an employee?
benefits?
A: In order that the cost be charged against the Ee,
A: GR: Benefits being given to Ees cannot be taken the latter’s acceptance of such facilities must be
back or reduced unilaterally by the Er because the voluntary.
benefit has become part of the employment contract,
whether written or unwritten. Q: What are the requirements for deducting values
for facilities?
XPN: When diminution of benefits is done to
correct an error. A:
1. Proof must be shown that such facilities are
Note: If the error is not corrected in a reasonable time, it customarily furnished by the trade
ripens into a company policy and Ees can demand it as a
2. The provision of deductible Facilities must be
matter of right.
voluntarily accepted in writing
3. The Facilities must be charged at fair and
Q: When is non-diminution of benefits applicable?
reasonable value [Mabeza vs. NLRC, G.R. No.
118506, (1997)]
A: It is applicable if it is shown that the grant of
benefit:

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LABOR STANDARDS

Q: Are food and lodging, or the electricity and water 2. Often results from Government decreed
consumed by a hotel worker, considered facilities? increases in minimum wages.
3. Should a WD exist, there is no legal requirement
A: No. These are supplements. Considering, that, in the rectification of that distortion by a re-
therefore, that hotel workers are required to work adjustment of the wage rates of the differing
different shifts and are expected to be available at classes of Ees, the gap which had previously or
various odd hours, their ready availability is a historically existed be restored in precisely the
necessary matter in the operations of a small hotel. same amount. In other words, correction of a
Furthermore, granting that meals and lodging were WD may be done by re-establishing a substantial
provided and indeed constituted facilities, such or significant gap (as distinguished from the
facilities could not be deducted without the Er historical gap) between the wage rates of the
complying first with certain legal requirements. differing classes of Ees.
[Mabeza vs. NLRC, G.R. No. 118506, (1997)] 4. The re-establishment of a significant difference in
wage rates may be the result of the resort to
WAGE DISTORTION/RECTIFICATION grievance procedures or CB negotiations. [Metro
Transit Org., Inc. vs. NLRC, G.R. No. 116008,
Q: What is Wage Distortion (WD)? (1995)]

A: A situation where an increase in wage results in Q: Distinguish the process for correction of wage
the elimination or severe contraction of intentional distortion of organized establishments and
quantitative differences in wage or salary rates unorganized establishments?
between and among the Ee-groups in an
establishment as to effectively obliterate the A:
distinctions embodied in such wage structure based Organized Unorganized
on skills, length of service or other logical bases of Establishment Establishment
differentiation. (with union) (without union)
The Er and the union The Er and the workers
Q: What are the elements of wage distortion? shall negotiate to shall endeavor to correct
correct distortion. the distortion.
A: Any dispute shall be
1. An existing hierarchy of positions with Any dispute shall be
resolved through a
corresponding salary rates. settled through the
grievance procedure
2. A significant change or increase in the salary rate NCMB.
under the CBA.
of a lower pay class without a corresponding If it remains unresolved,
increase in the salary rate of a higher one; If it remains unresolved
it shall be dealt with
3. The elimination of the distinction between the 2 within 10 days it shall be
through voluntary
groups or classes; and referred to the NLRC.
arbitration.
4. The WD exists in the same region of the country The dispute will be The NLRC shall conduct
[Alliance Trade Unions vs. NLRC, G.R. No. 140689, resolved within 10 days continuous hearings and
(2004)]. from the time the decide the dispute within
dispute was referred to 20 days from the time the
Q: Is the employer legally obliged to correct wage voluntary arbitration. same was referred.
distortion?
Q: Can the issue of wage distortion be raised in a
A: The Er and the union shall negotiate to correct the notice of strike?
distortions. If there is no union, the Er and the
workers shall endeavor to correct such distinctions. A: No. WD is non-strikeable [Ilaw at Buklod ng
Manggagawavs. NLRC, G.R. No. 91980, (1991)]. WD is
Q: What are the basic principles in wage distortion? neither a deadlock in collective bargaining nor ULP.

A: DIVISOR TO DETERMINE DAILY RATE


1. The concept of WD assumes an existing group or
classification of Ees which establishes distinctions Q: How is the estimated equivalent monthly rate
among such Ees on some relevant or legitimate (EEMR) of daily-paid employees computed?
basis. This classification is reflected in a differing A:
wage rate for each of the classes of Ees.

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Labor Law and Social Legislation

1. For those who are required to work every day


including Sundays or rest days, special days and Q: Who determines the weekly rest day?
regular holidays.
A: GR: Er shall determine and schedule the WRD of
EEMR = (Applicable daily rate x 393.50 his Ee.
days)/12
XPNs:
Where 393.50:
1. CBA
= 298 ordinary working days 2. Rules and regulations as the SLE provides
3. Preference of Ee based on religious grounds
= 24 for 12 regular holidays x 200%
– Ee shall make known his preference in
= 67.60 for 52 rest days x 130%; and writing at least 7 DAYS before the desired
effectivity of the initial rest day so preferred.
= 3.90 for 3 special days x 130%
[Sec. 4(1), Rule III, Book III, IRR]

XPNs to XPN no. 3: Er may schedule the


2. For those who do not work and are not
WRD of his choice for at least 2 days in a
considered paid on Sundays or rest days.
month if the preference of the Ee will
inevitably result in:
EEMR = (Applicable daily rate x 313 days)/12 a. serious prejudice to the operations of
the undertaking and
Where 313:
b. the Er cannot normally be expected to
= 298 ordinary working days resort to other remedial measures. [Sec.
= 12 regular holidays; and 4(2) , Rule III, Book III, IRR]

= 3 special holidays Q: When should employees be informed of the


schedule of their weekly rest days?

3. For those who do not work and are not A: Er shall make known rest period by means of:
considered paid on Saturdays and Sundays or 1. Written notice
rest days 2. Posted conspicuously in the workplace
3. At least 1 week before it becomes effective.
EEMR = (Applicable daily rate x 261 days)/12 (Sec. 5, Rule III, Book III, IRR)

Where 261: EMERGENCY REST DAY WORK


= 246 ordinary working days
Q: Can an employee be compelled to work on his
= 12 regular holidays; and rest day?
= 3 special holidays
A: GR: No.

REST PERIODS XPNs:


1. Urgent work to be performed on the
WEEKLY REST DAY machinery, equipment or installation, to
avoid serious loss which the Er would
Q: What is the right to weekly rest day (WRD)? otherwise suffer;
2. Nature of work requires continuous
A: Every Er shall give his Ees a rest period of not less operations for 7 days in a week or more and
than 24 consecutive hours after every 6 consecutive stoppage of the work may result in
normal work days. (Sec. 3, Rule III, Book III, IRR) irreparable injury or loss to the Er;
3. Abnormal pressure of work due to special
Q: What is the scope of weekly rest day? circumstances, where the Er cannot be
ordinarily expected to resort to other
A: It shall apply to all Ers whether operating for profit measures;
or not, including public utilities operated by private
persons. (Sec. 1, Rule III, Book III, IRR)

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LABOR STANDARDS

4. Actual or impending emergencies (serious 1st 8 hrs: + 30% PP of


accident, fire, flood, typhoon, earthquake, 100% RW
etc.)
5. Prevent loss or damage to perishable goods; Work performed on any
Excess of 8 hrs: + 30% of
6. Analogous or similar circumstances as Special Holiday
determined by the SLE; hourly rate on said date.
7. Work is necessary to avail of favorable (M.C. No. 10, Series of
weather or environmental conditions where 2004)
performance or quality of work is dependent 1st 8 hrs: + 50% PP of
thereon. 100% RW
Work performed on a
Q. What is the rule when an employee volunteers Special Holiday and
Excess of 8 hrs:+ 30% of
to work on his rest day under other circumstances? same day is the
hourly rate on said date.
scheduled rest day
A: He shall express it in writing subject to additional (M.C. No. 10, Series of
compensation. (Sec. 6[2], Rule III, Book III, IRR) 2004)
Ee is only entitled to his
Q: What is premium pay? basic rate. No PP is
required.
A: It is the additional compensation for work
rendered by the Ee on days when normally he should Work performed on a
not be working such as special holidays and WRDs. Reason: Work performed
Special Working Holiday
is considered work on
Q: Can the employer and employee agree on the ordinary working days.
rate of premium pay other than that provided by (Sec. 7, Rule III, Book III,
law?
IRR)
A: Yes. Nothing shall prevent the Er and his Ee or their
representatives from entering into any agreement Note: Holiday work provided under Art. 93 pertains to
special holidays or special days.
with terms more favorable to the Ees; Provided, it
shall not be used to diminish any benefit granted to
Q: Jose applied with Mercure Drug Company for the
the Ees under existing laws, agreements and
position of Sales Clerk. Mercure Drug Company
voluntary Er practices. (Sec. 9, Rule III, Book III, IRR)
maintains a chain of drug stores that are open every
day till late at night. Jose was informed that he had
Q: What are the rates of compensation for rest day,
to work on Sundays and holidays at night as part of
Sunday or holiday work?
the regular course of employment. He was
presented with a contract of employment setting
A:
forth his compensation on an annual basis with an
RATES OF ADDITIONAL
INSTANCES express waiver of extra compensation for work on
COMPENSATION Sundays and holidays, which Jose signed. Is such a
Work on a scheduled waiver binding on Jose? Explain. (1996 Bar Question)
+ 30% premium pay of
rest day
100% RW (Sec. 7, Rule III,
A: No, the waiver is not binding on Jose. Rights may
Book III, IRR) be waived, unless the waiver is contrary to law, public
order, public policy, morals and customs. The waiver
Work performed on
in this case is void.
Sundays and Holidays by + 30% premium pay of
an Ee who has no 100% RW (Sec. 7, Rule III, HOLIDAY PAY/PREMIUM PAY
regular workdays and Book III, IRR)
rest days Q: What is holiday pay?
Work on a Sunday + 30% premium pay of
A: It is a premium given to Ees pursuant to the law
(If Ee’s scheduled rest 100% RW (Sec. 7, Rule III,
even if he has not been suffered to work on a regular
day) Book III, IRR) holiday. It is limited to the 12 regular holidays, also
called legal holidays listed by law. The Ee should not

UNIVERSITY OF SANTO TOMAS


49 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

have been absent without pay on the working day LOCAL SPECIAL DAYS
preceding the regular holiday. Those declared by:
e.g. Manila day (in
1. Law, or
Manila only)
Q: What are the classes of special days? 2. Ordinance
(R.A. 9849, 2009)
A:
1. National Special Public Holiday Q: What are regular holidays (RH)?
GR: Non-working days
A: They are compensable whether worked or
XPN: Otherwise declared by the President unworked subject to certain conditions. They are also
called legal holidays. The following are considered
2. Local Special Public Holiday – Regular working regular holidays:
day
REGULAR HOLIDAYS DATE
NATIONAL SPECIAL DAYS DATE New Year’s Day January 1
All Saints Day November 1
Maundy Thursday According to their
Last Day of the Year December 31
respective dates in
Ninoy Aquino Day August 21 Good Friday the calendar
According to its After the
Chinese New Year respective date in the determination of
calendar Eid’l Fitr approximate dates
Other days declared by of the Islamic
law holidays in
1. Special Non-working November 2 accordance with the
days Islamic calendar
2. Special Public Eid’l Adha (Hijra) or the lunar
Holidays calendar, or upon
3. Special National Islamic astronomical
Holiday calculations
4. Special Holiday ( for Araw ng Kagitingan April 9
all schools) Labor Day May 1
a. Edsa Revolution February 25
Independence Day June 12
Anniversary
Last Monday of
LOCAL SPECIAL DAYS National Heroes Day
Those declared by: August
e.g. Manila day (in Bonifacio Day November 30
1. Law, or
Manila only)
2. Ordinance Christmas Day December 25
(Proclamation 295, s. of 2011 of President Benigno Rizal Day December 30
Aquino III)
Q: What are Muslim holidays?
NATIONAL SPECIAL DAYS DATE
All Saints Day November 1 A: Muslim holidays are those observed in specified
Last Day of the Year December 31 Muslim areas. All private corporations, offices,
Ninoy Aquino Day August 21 agencies and entities or establishments operating
Other days declared by within the designated Muslim provinces and cities are
law required to observe Muslim holidays.
1. Special Non-working November 2
days December 24 Q: When shall Eid’l Fitr and/or Eid’l Adha be
2. Special Public Holidays declared a national holiday?
3. Special National
Holiday A: The proclamation declaring a national holiday for
4. Special Holiday ( for all the observance of Eid’l Fitr and/or Eid’l Adha shall be
schools) issued:
a. Edsa Revolution February 25 1. After the approximate date of the Islamic holiday
Anniversary has been determined in accordance with the:

UNIVERSITY OF SANTO TOMAS


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LABOR STANDARDS

a. Islamic Calendar (Hijra) or A: They are engaged in the sale of services to


b. Lunar Calendar or individuals for their own or household use. (e.g. TV
c. Upon astronomical calculations repair shop)
d. Whichever is possible or convenient
2. The Office of Muslim Affairs shall inform the Q: Is an exercise of profession retail or service?
Office of the President on which day the holiday
shall fall. (Proclamation 295, s. of 2011 of A: It is neither retail nor service.
President Benigno Aquino III)
Q: May an employer require an employee to work
Q: Can a Christian employee working within the on Regular holidays?
Muslim area be compelled to work during Muslim
holiday? A: Yes. But Ee shall be compensated twice his regular
rate.
A: No. All workers, Muslims and Christians, working
within the Muslim area are entitled to holiday pay on Q: What are the rates of compensation for regular
Muslim holidays [SMC vs. CA, G.R. 146775, (2002)]. holidays on employee’s regular workday and rest
day?
Q: Can a Muslim Ee working outside the Muslim
area be compelled to work during the observance of A:
the MH? FORMULAS TO COMPUTE WAGES ON
REGULAR HOLIDAYS
A: GR: No. Muslim Ees shall be excused from work (M.C.No.10, Series of 2004)
during Mulsim holidays without diminution of salary
RH on Ee’s regular
or wages. RH on Ee’s rest day
workday
XPN: Those who are permitted or suffered to If unworked
work on Muslim holidays are entitled to at least 100% 100%
100% basic pay + 100% as premium of their basic
pay [SMC vs. CA, G.R. 146775, (2002)]. e.g. Php 300 RW e.g. Php 300 RW
Note: RH falling within temporary or periodic shutdown
If worked (1st 8 hrs)
and temporary cessation of work are compensable. 200% 200% + 30% of 200%
However, if the temporary or periodic shutdown and
cessation of work is due to business reverses, the Er may
e.g. 300(RW) e.g 600 (200% of RW)
not pay the Regular holidays during such period.
+ 300 X 0.3
Q: Distinguish regular holiday from special holiday. 600 = Total Wage (TW) 180

A: 600 + 180 = 780 (TW)


REGULAR HOLIDAY SPECIAL HOLIDAY
If worked (OT)(excess of 8 hrs)
If Unworked
230%
Regular pay
(subject to certain 230% + 30% of hourly
No Pay 200% + 30% of hourly rate rate on said date
conditions for daily paid
Ee’s) on said date
If worked
+ 30% premium pay of Q: What is an important condition that should be
2x regular pay (200%)
100% RW met in order to avail/receive the single holiday pay?

Q: What are retail establishments? A: The Ee should not have been absent without pay
on the working day preceding the RH.
A: They are engaged in the sale of goods to end users
for personal or household use. (e.g. Grocery) Q: Distinguish between monthly paid and daily paid
employees.
Q: What are service establishments?
A:
Monthly Paid Ees Daily Paid Ees

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51 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

One whose wage or salary is One whose wage or cleaning of machineries compensated.
being paid everyday of the salary is being paid is undertaken
month, including rest days, only on those days Due to business reverses
Sundays, regular or special he actually worked, RH may not be paid
(cessation as authorized by
days, although he does not except in cases of by the Er
regularly work on these days. regular or special the SLE)
days, although he
Not excluded from benefit of does not regularly COVERAGE, EXCLUSIONS
holiday pay. work on these days.
Q: Who are entitled to holiday pay?
Q: What is the effect if a legal holiday falls on a
Sunday? A: GR: All Ees are entitled. (Sec.1, Rule IV, Book III,
IRR)
A: A legal holiday falling on a Sunday creates no legal
obligation for the Er to pay extra to the Ee who does XPNs:
not work on that day, aside from the usual holiday 1. Government Ees and any of its political
pay to its monthly paid Ee [Wellington vs.Trajano, subdivisions, including GOCCs (with original
G.R. 114698, (1995)]. charter)
2. Retail and service establishments regularly
Q: Discuss the concept of absences. employing less than 10 workers
3. Domestic helpers and persons in the personal
A: service of another
ABSENCES 4. Ee engaged on task or contract basis or purely
commission basis
LOA with pay on the day LOA without pay on the
5. Members of the Family of the Er who are
immediately preceding day immediately dependent on him for support
RH. preceding a RH. 6. Managerial Ee and other members of the
GR: An Ee may not be managerial staff
paid the required HP 7. Field personnel and other Ee whose time and
if he has not worked performance are unsupervised by the Er
on such Regular 8. Ee paid fixed amount for performing work
irrespective of the time consumed in the
holiday.
performance thereof. (Sec. 1, Rule IV, Book III,
IRR)
GR: All covered Ees are XPNs: Where the day
entitled to HP. immediately TEACHERS, PIECE WORKERS, TAKAY, SEAFARERS,
preceding the holiday SEASONAL WORKERS
is a:
Q: What are the holiday pays of certain employees?
1. Non-working day in
the establishment or
A:
2. The scheduled rest EMPLOYEES RULE
day of the Ee. 1. RH during semestral
Private school
vacations
teachers (Faculty
Q: What is the effect in case there is a temporary or - Not entitled to holiday pay
members of
periodic shutdown and temporary cessation of 2. RH during Christmas
colleges and
work? vacation
universities)
- Entitled to holiday pay
A: Holiday pay shall not be less
TEMPORARY OR PERIODIC SHUTDOWN and Ee paid by: than his average daily earnings
TEMPORARY CESSATION OF WORK 1. results or for the last 7 actual work days
(Sec. 7, Rule IV, Book III, IRR) 2. output preceding the Regular holiday.
(Piece work Provided: Holiday pay shall not
Instances Rule:
payment) be less than the statutory
1. Yearly inventory, or RH falling within minimum wage rate.
2. when the repair or the period shall be Seasonal Workers May not be paid the required

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2013 GOLDEN NOTES 52
LABOR STANDARDS

Holiday pay during off-season Q: What is the concept of double holiday pay?
where they are not at work.
Workers having no A: There are 2 RHs falling on the same day.
Shall be entitled to holiday pay
regular work days
Seafarers Shall be entitled to holiday pay MAUNDY
WED THURSDAY & ARAW RATE
Q: Are the school faculty who according to their NG KAGITINGAN
contracts are paid per lecture hour entitled to Present unworked 200%
unworked holiday pay? LOA w/pay unworked 200%
300%
LOA w/ pay worked
A: (at least)
1. If during RH – No. Art. 94 of the LC is silent with Authorized 300%
worked
respect to faculty members paid by the hour who absence (at least)
because of their teaching contracts are obliged to 390%
work and consent to be paid only for work actually Worked and day is (+30% of
Same
done (except when an emergency or a fortuitous Rest Day each 3
event or a national need calls for the declaration 100%)
of special holidays). Regular holiday specified as
such by law are known to both school and faculty Q: What is the concept of successive Regular
members as "no class days" certainly the latter do holidays?
not expect payment for said unworked days, and
this was clearly in their minds when they entered A:
into the teaching contracts [Jose Rizal College vs. ENTITLED TO
NLRC, G.R. No. 65482, (1987)]. MAUNDY GOOD
WED HOLIDAY
THURS FRIDAY
PAY
2. If during special public holidays – Yes. The law and
the IRR governing holiday pay are silent as to Worked RH RH Yes. Both
payment on Special Public Holidays. It is readily LOA
RH RH Yes. Both
apparent that the declared purpose of the holiday w/pay
pay which is the prevention of diminution of the LOA w/o
monthly income of the Ees on account of work RH RH No. Both
pay
interruptions is defeated when a regular class day
Yes. Only to
is cancelled on account of a special public holiday LOA w/o
and class hours are held on another working day Worked RH holiday pay
pay
to make up for time lost in the school calendar. on Friday
Otherwise stated, the faculty member, although
forced to take a rest, does not earn what he Q: What are the conditions so that an employee may
should earn for that day. Be it noted that when a be entitled to 2 successive holiday pays?
special public holiday is declared, the faculty
st
member paid by the hour is deprived of expected A: On the day immediately preceding the 1 RH, he
income, and it does not matter that the school must be:
calendar is extended in view of the days or hours 1. Present (worked), or
lost, for their income that could be earned from 2. On LOA with pay. (Sec. 10, Rule IV, Book III, IRR)
other sources is lost during the extended days.
Similarly, when classes are called off or shortened Q: What if the conditions are not met?
on account of typhoons, floods, rallies, and the
st
like, these faculty members must likewise be paid, A: He must work on the 1 regular holiday to be
nd
whether or not extensions are ordered [Jose Rizal entitled to holiday pay on the 2 regular holiday.
College vs. NLRC, G.R. No. 65482, (1987)]. (Sec. 10, Rule IV, Book III, IRR)

UNIVERSITY OF SANTO TOMAS


53 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

LEAVES personnel cannot be deemed as field personnel


which refers "to non-agricultural Ees who regularly
SERVICE INCENTIVE LEAVE perform their duties away from the principal place of
business or branch office of the Er and whose actual
Q: What is Service Incentive Leave (SIL)? hours of work in the field cannot be determined with
reasonable certainty” (Par. 3, Art. 82, LC); [CIT vs.
A: It is 5-days leave with pay for every Ee who has Ople, G.R. No. 70203, (1987)].
rendered at least 1 year of service. It is commutable
to its money equivalent if not used or exhausted at Q: Are part-time workers entitled to the full benefit
the end of the year. of the yearly 5-day Service Incentive Leave?

Q: What is meant by “at least 1 year of service”? A: Yes. Art. 95 of the LC speaks of the number of
months in a year for entitlement to said benefit
A: Service for not less than 12 months, whether (Bureau of Working Conditions Advisory Opinion to
continuous or broken reckoned from the date the Ee Phil. Integrated Exporter’s, Inc.).
started working, including authorized absences and
paid regular holidays unless the working days in the Q: Are piece-rate workers entitled to the full benefit
establishment as a matter of practice or policy, or of the yearly 5 day Service Incentive Leave?
that provided in the employment contract is less than
12 months, in which case said period shall be A: Yes. Under P.D. 851 or the SIL Law, the exclusion
considered as one year. (Sec. 3, Rule V, Book III, IRR) from its coverage of workers who are paid on a
purely commission basis is only with respect to field
Q: Who are entitled to Service Incentive Leave? personnel. Ees engaged on task or contract basis
or paid on purely commission basis are not
A: GR: Applies to every Ee who has rendered at least automatically exempted from the grant of SIL, unless,
1 year of service. (Art. 95[a]) they fall under the classification of field personnel
[Serrano vs. Severino Santos, G.R. No. 187698,
XPNs: (2010)].
1. Government Ees and any of its political
subdivisions including GOCCs Note: “Field personnel” shall refer to non-agricultural Ees
2. Those already enjoying the benefit who regularly perform their duties away from the principal
3. Domestic helpers and persons in the personal place of business or branch office of the employer and
services of another whose actual hours of work in the field cannot be
4. Those already enjoying vacation leave with determined with reasonable certainty (Ibid.)
pay of at least 5 days
5. Managerial Ees Q: Do employees with salaries above minimum
6. Field personnel and other Ees whose wage entitled to Service Incentive Leave?
performance is unsupervised by the Er
7. Employed in establishments regularly A: Yes. The difference between the minimum wage
employing less than 10 workers and the actual salary received by the Ees cannot be
th
8. Exempt establishments deemed as their 13 month pay and SIL pay as such
9. Engaged with a task or contract basis, purely difference is not equivalent to or of the same import
commission basis, or those who are paid in a as the said benefits contemplated by law [JPL
fixed amount of performing work irrespective Marketing Promotions vs. CA, G.R. No. 151966,
of the time consumed in the performance (2005)].
thereof. (Art. 95[b], LC)
Q: Explain the entitlement of terminated Ees to
Q: Are teachers of private schools on contract basis Service Incentive Leave.
entitled to Service Incentive Leave?
A:
A: Yes. The phrase "those who are engaged on task or 1. Illegally dismissed Ees - entitled to SIL until actual
contract basis" should, however, be related to "field reinstatement [Integrated Contractor and
personnel" applying the rule on ejusdem generis that Plumbing Works, Inc. vs. NLRC, G.R.No. (2005)]
those general and unlimited terms are restrained and 2. Legally dismissed Ees – The Ee who had not been
limited by the particular terms that they follow. paid of SIL from the outset of employment is
Clearly, Cebu Institute of Technology teaching entitled only of such pay after a year from
commencement of service until termination of

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 54
LABOR STANDARDS

employment or contract [JPL Marketing bar to the recovery of sickness benefits for the
Promotions vs. CA, G.R. No. 151966, (2005)]. same compensable period of 60 days for the
same childbirth, abortion, or miscarriage;
Q: Is Service Incentive Leave commutable to its
monetary equivalent if not used or exhausted at the 5. The maternity benefits provided under Sec. 14-A
end of the year? shall be paid only for the first four deliveries;

A: Yes. It is aimed primarily at encouraging workers to 6. The SSS shall immediately reimburse the Er of
work continuously and with dedication to the 100% of the amount of maternity benefits
company. advanced to the Ee by the Er upon receipt of
satisfactory proof of such payment and legality
Q: What is the basis for cash conversion? thereof; and

A: The basis shall be the salary rate at the date of 7. If an Ee should give birth or suffer abortion or
commutation. The availment and commutation of the miscarriage without the required contributions
SIL may be on a pro-rata basis (No. VI(c), DOLE having been remitted for her by her Er to the SSS,
Handbook on Worker’s Statutory Monetary Benefit). or without the latter having been previously
notified by the Er of the time of the pregnancy,
Q. What is the exemption to the application of the Er shall pay to the SSS damages equivalent to
Service Incentive Leave to employees? the benefits which said Ee would otherwise have
been entitled to, and the SSS shall in turn pay
A. Establishments employing less than 10 Ees are such amount to the Ee concerned.
exempted by the LC and the Implementing Rules from
paying SIL. The clear policy of the LC is to include all Q: What are the requirements in order that
establishments, except a few classes, under the maternity benefits may be claimed?
coverage of the provision granting SIL to
workers [Murillo vs. Sun Valley Realty, Inc., G.R. No. L- A:
67272 (1988)]. 1. There is childbirth, abortion or miscarriage
2. She has paid at least three monthly contributions
MATERNITY LEAVE
PATERNITY LEAVE
Q: What is maternity leave benefit?
Q: What is the concept of paternity leave benefits?
A: A covered female Ee is entitled to a daily maternity
benefit equivalent to 100% of her present basic A: Every married male Ee in the private and public
salary, allowances and other benefits or the cash sectors shall be entitled to a paternity leave of 7 days
equivalent of such benefits for 60 days or 78 days in with full pay for the first 4 deliveries of the legitimate
case of caesarian delivery. spouse with whom he is cohabiting.

Q: What are the conditions for availment of Q: What is paternity leave?


maternity leave benefit?
A: It refers to the benefits granted to a married male
A: Ee allowing him not to report for work for 7 days but
1. The Ee shall have notified her Er of her continues to earn the compensation therefore, on
pregnancy and the probable date of her the condition that his spouse has delivered a child or
childbirth which notice shall be transmitted to suffered a miscarriage for purposes of enabling him
the SSS; to effectively lend support to his wife in her period of
recovery and/or in the nursing of the newly-born
2. The payment shall be advanced by the Er in 2 child.
equal installments within 30 days from the filing
of the maternity leave application; Q: What are the conditions for entitlement to
paternity leave?
3. In case of caesarian delivery, the Ee shall be paid
the daily maternity benefit for 78 days; A: The male Ee is
1. Legally married to, and is cohabiting with the
4. Payment of daily maternity benefits shall be a woman who delivers the baby;

UNIVERSITY OF SANTO TOMAS


55 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

2. Ee of private or public sector; A: Any individual who falls under any of the ff.
3. Maybe availed of only for the first 4 deliveries of categories:
the legitimate spouse with whom he is
cohabiting; and 1. A woman who gives birth as a result of rape and
4. Notify his Er of the pregnancy of his legitimate other crimes against chastity even without a final
spouse and the expected date of such delivery conviction of the offender; Provided, That the
mother keeps and raises the child;
Note: Delivery shall include childbirth or any miscarriage.
2. Parent left solo or alone with the responsibility of
Q: Ron is a bank employee of BPI. He is cohabiting parenthood due to:
with Michelle for straight five years with whom he a. Death of spouse;
has four children. In the fifth year of their b. Detention or service of sentence of
cohabitation, Michelle had her miscarriage. Ron is spouse for a criminal conviction for at
availing himself of his paternity leave. Is he entitled least 1 yr;
to paternity leave? c. Physical and/or mental incapacity of
spouse
A: No. Ron is not entitled to paternity leave because d. Legal separation or de facto separation
the facts of the case only show that he is only from spouse for at least 1 year as long as
cohabiting with Michelle. The law expressly provides he/she is entrusted with the custody of
that the male must be legally married to the woman the children;
with whom he is cohabiting as a condition for e. Nullity or annulment of marriage as
entitlement of paternity leave. Even assuming that decreed by a court or by a church as long
Ron is legally married to Michelle, he cannot avail as he/she is entrusted with the custody
also of the paternity leave because the law limits the of the children;
deliveries only to four which include childbirth or f. Abandonment of spouse for at least 1 yr;
th
miscarriage. Based on the facts, it is already the 5
delivery of the woman. 3. Unmarried mother/father who has preferred to
keep and rear his or her child/children instead of:
PARENTAL LEAVE a. having others care for them or
b. give them up to a welfare institution;
Q: What is parental leave?
4. Any other person who solely provides:
A: Leave benefits granted to a solo parent to enable a. parental care and
him/her to perform parental duties and b. support to a child or children;
responsibilities - where physical presence is required.
5. Any family member who assumes the responsibility
In addition to leave privileges under existing laws, of head of family as a result of the:
parental leave of not more than 7 working days every a. death,
year shall be granted to any solo parent Ee who has b. abandonment,
rendered service of at least 1 year. (Sec. 8) c. disappearance or
d. prolonged absence of the parents or solo
Q: What are the conditions for entitlement of parent.
parental leave?
Note: A change in the status or circumstance of the parent
A: claiming benefits under this Act, such that he/she is no
1. He or she must fall among those referred to as a longer left alone with the responsibility of parenthood, shall
solo parent terminate his/her eligibility for these benefits. (Sec.3)
2. Must have the actual and physical custody of the
child or children LEAVES FOR VICTIMS OF VIOLENCE AGAINST
3. Must have at least rendered service of one year to WOMEN CHILDREN (R.A. 9262)
his or her employer
4. He or she must remain a solo parent Q: What is the leave for victims of violence against
women or otherwise known as battered woman
Q: Who are considered a solo parent entitled to leave?
parental leave?
A: A female Ee who is a victim of violence (physical,
sexual, or psychological) is entitled to a paid leave of

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 56
LABOR STANDARDS

10 days in addition to other paid leaves. (R.A. 9262, Note: Service charges form part of the award in illegal
Anti- VAWC Act) dismissal cases.

th
SPECIAL LEAVE BENEFIT FOR WOMEN 13 MONTH PAY
th
Q: What is the special leave benefit for women? Q: What is 13 month pay or its equivalent?

A: A woman Ee having rendered continuous A: Additional income based on wage required by P.D.
th
aggregate employment service of at least 6 months 851 Requiring all Ers to pay their Ees a 13 month pay
for the last 12 months shall be entitled to a special which is equivalent to 1/12 of the total basic salary
leave benefit of 2 months with full pay based on her earned by an Ee within a calendar year.
gross monthly compensation following surgery
caused by gynaecological disorders. (Sec. 18, R.A. Note: The absence of an express provision in the CBA
th
obligating the Er to pay the members of a union 13 month
9710, Magna Carta of Women)
pay is immaterial. Notwithstanding therefore the absence
th
of any contractual agreement, the payment of a 13 month
SERVICE CHARGES pay being a statutory grant, compliance with the same is
mandatory and is deemed incorporated in the CBA.
Q: What are service charges?
th
Q: Is 13 month pay legally demandable?
A: These are charges collected by hotels, restaurants
and similar establishments at the rate of 85% for A: Yes. It is a statutory obligation, granted to covered
covered Ees equally distributed among them, and Ees, hence, demandable as a matter of right. (Sec 1,
15% for the management to answer for losses and P.D. 851)
breakages.
Q: Who are covered by P.D. 851?
Q: Who are covered employees?
A: All rank-and-file Ees regardless of the amount of
A: GR: All Ees are covered, regardless of their basic salary that they receive in a month, if their Ers
position, designation, and employment status, are not otherwise exempted from paying the 13
th

irrespective of the method by which their wages are th


month pay. Such Ees are entitled to the 13 month
paid. pay regardless of said designation of employment
status, and irrespective of the method by which their
Note: Applies only to hotels, restaurants and similar wages are paid.
establishment collecting service charges.
Provided, that they have worked for at least 1 month,
XPN: Managerial Ees (Sec. 2, Rule VI, Book III, IRR) during a calendar year. (Revised Guidelines on the
th
Implementation of the 13 Month Pay Law)
Q: When is the share of employee distributed and
paid to them? Q: Who are NOT covered by P.D. 851?
A: Not less than once every 2 weeks or twice a month A:
at intervals not exceeding 16 days. 1. Government Ees
2. Household helpers
Q: Distinguish between service charge and tips? 3. Ees paid purely on commission basis
th
4. Ees already receiving 13 month pay
A: Service charges are collected by the management
from the customers. Tips are voluntary payments
Q: What would be your advice to your client, a
made by the customers to the Ees for excellent
manufacturing company, who asks for your legal
service.
opinion on whether or not the 13th Month Pay Law
covers a casual Ee who is paid a daily wage? (1998
Q: What happens if the service charge is abolished?
Bar Question)
A: The share of the covered Ees shall be considered
A: I will advise the manufacturing company to pay the
integrated in their wages on the basis of the average
casual Ee 13th Month Pay if such casual Ee has
monthly share of each Ees for the past 12 months
worked for at least 1 month during a calendar year.
immediately preceding the abolition.
The law on the 13th Month Pay provides that Ees are

UNIVERSITY OF SANTO TOMAS


57 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

entitled to the benefit of said law regardless of their et al., G.R. No. 85073, (1993)]. After the 1981 SMC
designation or employment status. ruling, the High Court decided the case of Philippine
Duplicators Inc. vs. NLRC, GR 110068, (1993).
The SC ruled in Jackson Building-Condominium Corp. Accordingly, management may undertake to exclude
vs. NLRC (G.R. No. 112546, 1996), interpreting sick leave, vacation leave, maternity leave, premium
th
P.D.851, as follows: Ees are entitled to the 13 month pay for regular holiday, night differential pay and cost
pay benefits regardless of their designation and of living allowance. Sales commissions, however,
irrespective of the method by which their wages are should be included based on the settled rule as
paid. earlier enunciated in Songco vs. NLRC (G.R. No. L-
50999, 1990).
th
Note: An Er may give to his Ees ½ of the required 13
Month pay before the opening of the regular school year th
Q: Are all employers required to pay 13 month pay
and the other half on or before Dec. 24. under P.D. 851?
th
Q: In what form is the 13 month pay given? A: GR: Yes. It applies to all Ers,

A: It is given in the form of: XPNs:


1. Christmas Bonus 1. Distressed Ers:
2. Midyear Bonus a. Currently incurring substantial losses or
3. Profit Sharing Scheme b. In the case of non-profit institutions and
4. Other Cash bonuses amounting to not less than organizations, where their income,
1/12 of its basic salary whether from donations, contributions,
grants and other earnings from any
Note: It must always be in the form of a legal tender.
source, has consistently declined by more
th than 40% of their normal income for the
Q: What are not proper substitutes for 13 month
last 2 years, subject to the provision of
pay?
Sec. 7 of P.D. 851;
A:
2. The Government and any of its political
1. Free rice
subdivisions, including GOCCs, except those
2. Electricity
corporations operating essentially as private
3. Cash and stock dividends
subsidiaries of the Government;
4. Cost-of-living Allowance (Sec. 3)
th
3. Ers already paying their Ees 13 month pay or
Q: Concepcion Textile Co. included the OT pay,
more in a calendar year of its equivalent at the
night-shift differential pay, and the like in the
th time of this issuance:
computation of its Ees’ 13 month pay.
Subsequently, with the promulgation of the decision
Its equivalent shall include:
of the SC in the case of SMC vs. Inciong (103 SCRA
a. Christmas bonus
139) holding that these other monetary claims
b. Mid-year bonus
should not be included in the computation of the
th c. Profit-sharing payments and
13 Month Pay, Concepcion Textile Co. sought to
d. Other cash bonuses amounting to not less
recover under the principle of solutio indebiti the
th than 1/12th of the basic salary
overpayment of the Ees’ 13 month pay, by debiting
th
against future 13 month payments whatever
It shall not include:
excess amounts it had previously made.
a. cash and stock dividends,
b. COLA
(1) Is the Company's action tenable?
th c. all other allowances regularly enjoyed by
(2) With respect to the payment of the 13 month
the Ee, as well as non-monetary benefits.
pay after the SMC ruling, what arrangement, if any,
must the Company make in order to exclude from
th 4. Ers of household helpers and persons in the
the 13 month pay all earnings and remunerations
personal service of another in relation to such
other than the basic pay? (1994 Bar Question)
workers; and
A: The Company's action is not tenable. The principle
5. Ers of those who are paid on a purely
of solutio indebiti which is a civil law concept is not
commission, boundary, or task basis, and those
applicable in labor law. [Davao Fruits Corp. vs. NLRC,

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 58
LABOR STANDARDS

who are paid a fixed amount for performing a 4. Resigned or Separated Ees - If resigned or
specific work, irrespective of the time separated from work before the time of payment
th
consumed in the performance thereof, except of 13 month pay, entitled to monetary benefits
where the workers are paid on a piece-rate in proportion to the length of time he started
basis in which case the Er shall be covered by working during the calendar year up to the time
this issuance insofar as such workers are of resignation or termination of service. (Pro-
th
concerned. (Sec 3, P.D. 851) rated 13 month pay)
th
Q: What are the options of covered employers? Q: When does pro-ration of 13 month pay apply?

A: A: GR: Pro-ration of this benefit applies only in cases


th
1. Pay 1/2 of the 13 month pay required before of resignation or separation from work; computation
the opening of the regular school year and the should be based on length of service and not on the
other half on or before the 24th day of actual wage earned by the worker [Honda Phils. vs.
December of every year. Samahan ng Manggagawasa Honda, G.R. No.
2. In any establishment where a union has been 145561, (2005)].
recognized or certified as the CB agent of the Ee,
the periodicity or frequency of payment of the XPN: Ees who are paid a guaranteed minimum
th th
13 month pay may be the subject of agreement. wage or commissions earned are entitled to 13
Month Pay based on total earnings [Philippine
Q: How are claims adjudicated? Agricultural Commercial and Industrial Workers
Union vs. NLRC, G.R. No. 107994, (1995)].
th
A: Non-payment of the 13 month pay provided by
th
P.D. 851 and the rules of NLRC shall be treated as Q: Is 14 month pay legally demandable?
money claims cases.
th
A: No. The granting of 14 month pay is a
th
Q: Are the following employees entitled to 13 management prerogative and is not legally
Month Pay? demandable. It is basically a bonus and is gratuitous
a. Employees who are paid by results in nature [Kamaya Point Hotel vs. NLRC, G.R. No.
b. Employees with multiple Employers 75289, (1989)].
c. Private school teachers
th
d. Resigned or separated Employees Q: What is Commission in relation to 13 Month
Pay?
A:
th
1. Ee paid by results – entitled to 13 month pay. A:
1. The salesman’s commissions, comprising a pre-
Note: Ees paid a fixed or guaranteed wage plus determined percent of the selling price of the
th
commission are also entitled to the mandated 13 goods sold by each salesman, were properly
month pay, based on their total earnings during the included in the term basic salary for purposes of
calendar year, i.e. on both their fixed or guaranteed th
computing their 13 month pay.
wage and commission

2. The so-called commission paid to or received by


2. Those with Multiple Ers – Government Ees
medical representatives of BoieTakeda Chemicals
working part time in a private enterprise,
or by the rank-and-file Ees of Phil. Fuji Xerox
including private educational institutions, as well
were excluded from the term basic salary
as Ees working in 2 or more private firms,
because these were paid as productivity bonuses.
whether full or part time basis, are entitled to
th Such bonuses closely resemble profit sharing,
the required 13 month pay from all their private
payments and have no clear, direct, necessary
Ers regardless of their total earnings from each or
relation to the amount of work actually done by
all their Ers.
each individual Ee.
3. Private School Teachers, including faculty
members of universities and colleges – entitled
regardless of the number of months they teach
or are paid within a year, if they have rendered
service for at least 1 month within a year.

UNIVERSITY OF SANTO TOMAS


59 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

SEPARATION PAY Q: Who are covered by the LC provisions on


retirement?
Q: What is the meaning of separation pay?
A: All Ees in the private sector:
A: Separation pay refers to the amount due to the Ee 1. Regardless of their position, designation or
who has been terminated from service for causes status; and
authorized by law such as the installation of labor- 2. Irrespective of the method by which their
saving losses or the closing or cessation of operation wages are paid. (Sec.1, Rule II, Book VI, IRR)
of the establishment or undertaking.
Q: Who are NOT covered by the LC provisions on
Q: What is the purpose for providing separation retirement?
pay?
A:
A: Separation pay is intended to provide the Ee with 1. Ees of the National Government and its political
the wherewithal during the period he is looking for subdivisions, including GOCCs (if they are
another employment [Gabuay v. Oversea Paper covered by the Civil Service Law)
Supply, G.R. No. 148837, (2004)]. 2. Domestic helpers and persons in the personal
service of another
Q: When is an employee entitled to separation pay? 3. Ees of retail, service, and agricultural
establishments or operations employing not
A:
more than 10 Ees (Sec.2, Rule II, Book VI, IRR)
1. When the termination of employment is due to
causes authorized by law (Art. 284, LC)
Q: What are the kinds of retirement schemes?
2. When the severance of employment is caused by
a disease, particularly when the Ee is found to be A:
suffering from any disease and whose continued
1. Compulsory and contributory in nature;
employment is prohibited by law or is prejudicial
2. One set up by the agreement between the Er and
to his health and of his co-Ees. (Art. 284, LC)
Ees in the CBA or other agreements between
3. When the termination from service has been
them (other applicable employment contract);
declared illegal, but his reinstatement to his
3. One that is voluntarily given by the Er, expressly
former position is no longer feasible for some
as announced company policy or impliedly as in
valid reason [Gabuay v. Oversea Paper Supply,
the failure to contest the Ee’s claim for
G.R. No. 148837, (2004)].
retirement benefits [Marilyn Odchimar Gertach
4. In case of pre-termination of employment
v. Reuters Limited, Phils., G.R. No. 148542
contract in job-contracting arrangement [D.O 18-
(2005)].
02, Rules Implementing Art. 106 – 109, LC]
5. Where separation pay is awarded as a measure
Q: Can Art. 287 of the LC (on retirement) as
of social or compassionate justice [PLDT v. NLRC,
amended by R.A. 7641 be applied retroactively?
G.R. No. L-80609, (1988)].
A: Yes, provided:
RETIREMENT PAY
1. the claimant for retirement benefits was still the
Ee of the Er at the time the statute took effect;
Q: What is retirement?
and
2. the claimant was in compliance with the
A: It is the result of a bilateral act of the parties, a requirements for eligibility under the statute for
voluntary agreement between the Er and the Ee such retirement benefits [PSVSIA vs. NLRC, G.R.
whereby the latter after reaching a certain age agrees No. 115019, (1997)].
and/or consents to sever his employment with the
former [Soberano v. Secretary of Labor, G.R. No. L- Q: Are the provisions of the retirement plan binding
43753-56 and G.R. No. L-50991, (1980); Ariola v. as part of the employment contract?
Philex Mining Corp, 446 SCRA 152 (2005)].
A: Yes. The retirement plan forms part of the
employment contract since it is made known to the
Ees and accepted by them, and such plan has an
express provision that the company has the choice to
retire an Ee regardless of age, with 20 years of

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 60
LABOR STANDARDS

service, said policy is within the bounds contemplated Q: In the absence of a retirement plan or other
by the LC. Moreover, the manner of computation of applicable agreement, what is the retirement age?
retirement benefits depends on the stipulation
provided in the company retirement plan [Progressive A:
Dev’t Corporation vs. NLRC, G.R. No. 138826, (2000)]. 1. Optional – Upon reaching 60 years old provided
that Ee has rendered 5 years of service.
Note: Although retirement plan forms part of the
employment contract, before a right to retirement benefits Note: The option to retire upon reaching the age of 60
or pension vests in an Ee, he must have met the stated years or more but not beyond 65 is the exclusive
conditions of eligibility with respect to the nature of prerogative of the Ee if there is no provision on
employment, age, and length of service. This is a condition retirement in a CBA or any other agreement or if the
precedent to his acquisition of rights thereunder. SC ruled Er has no retirement plan [R.A. 7641; Capili vs. NLRC,
that the conditions of eligibility for retirement must be met G.R. No. 117378, (1997)].
at the time of retirement at which juncture the right to
retirement benefits or pension, if the Ee is eligible, vests in 2. Compulsory – 65 years old, regardless of years of
him.
service (Sec. 4, Rule II, Book VI, IRR)
Again, it has been held that "pension and retirement plans
Note: Retirement benefits, where not mandated by
create a contractual obligation in which the promise to pay
law, may be granted by agreement of the Ees and their
benefits is made in consideration of the continued faithful
Er or as a voluntary act on the part of the Er.
service of the Ee for the requisite period [Brion vs. South
Retirement benefits are intended to help the Ee enjoy
Phil. Union Mission of the Seventh Day Adventist Church,
the remaining years of his life, lessening the burden of
307 SCRA 497, (1999)].
worrying for his financial support, and are a form of
reward for his loyalty and service to the Er [Aquino vs.
Q: ALPAP, the exclusive bargaining representative of NLRC, G.R. No. 87653, (1992)].
all commercial airline pilots of PAL, assailed that
PAL's act of unilaterally retiring an airline pilot under Q: Is compulsory retirement age below 60 allowed?
a special retirement plan is an act of illegal dismissal
or union busting. Is a special retirement plan A: Yes. Art. 287 permits Er and Ee to fix the applicable
different from those contemplated under the LC as retirement age at below 60. The same is legal and
agreed upon by the parties valid? enforceable so long as the parties agree to be
governed by such CBA [Pantranco North Express vs.
A: Yes. A pilot who retires after 20 years of service or NLRC, G.R. No. 95940, (1996)].
after flying 20,000 hours would still be in the prime of
his life and at the peak of his career, compared to one Q: What is the rule for extension of service of retiree
who retires at the age of 60 years old. Based on this upon his reaching the compulsory retirement age?
peculiar circumstance that PAL pilots are in, the
parties provided for a special scheme of retirement A: Upon the compulsory retirement of an Ee or
different from that contemplated in the LC. official in the public or private service, his
Conversely, the provisions of Art. 287 of the LC could employment is deemed terminated. The matter of
not have contemplated the situation of PAL's pilots. extension of service of such Ee or official is addressed
Rather, it was intended for those who have no more to the sound discretion of the Er [UST Faculty Union
plans of employment after retirement, and are thus vs. NLRC, G.R. No. 89885, (1990)].
in need of financial assistance and reward for the
years that they have rendered service [PAL vs. Airline AMOUNT
Pilots Ass’n of the Phils., G.R. No. 143686, (2002)].
Q: In the absence of an applicable agreement or
ELIGIBILITY retirement plan, how are retirement benefits
computed?
Q: What is retirement age?
A: A retiree is entitled to a retirement pay equivalent
A: It is the age of retirement that is specified in the: to at least ½ month salary for every year of service, a
fraction of at least 6 months being considered as 1
1. CBA; whole year. (R.A. 7641)
2. Employment contract;
3. Retirement plan [Sec. 3, Rule II, Book VI, IRR]; OR
4. Optional retirement age for underground mining
Ees

UNIVERSITY OF SANTO TOMAS


61 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

Q: What comprises “½ month salary” or retirement giver or grantor. It is not support, and are a form
pay? intended to pay a worker of reward for his loyalty
for actual services to the Er [(Sta. Catalina
A: Unless parties provide for broader inclusions, rendered or for actual College and Sr. Loreta
retirement pay is comprised of: performance. It is a Oranza, vs. NLRC and
1. 15 days salary based on latest salary rate; money benefit or bounty Hilaria Tercera, G.R. No.
2. Cash equivalent of not more than 5 days of given to the worker, the 144483, (2003)].
service incentive leaves (22.5/year of service) purpose of which is to
th
3. 1/12 of the 13 month pay reward Ee’s who have
4. All other benefits as may be agreed upon by the rendered satisfactory
Er and Ee. (Sec.5.2, Rule II, Book VI, IRR) service to the company.

Note: Under Sec. 26 of R.A. No. 4670, otherwise known as RETIREMENT PAY UNDER RA 7641 VIS-À-VIS
“Magna Carta for Public School Teachers”, public school RETIREMENT BENEFITS UNDER SSS AND GSIS LAWS
teachers having fulfilled the age and service requirements
of the applicable retirement laws shall be given one range
Q: What is retirement pay under the LC in relation to
salary raise upon the retirement, which shall be the basis of
the computation of the lump sum of the retirement pay retirement benefits under SSS and GSIS laws? (1997
and monthly benefit thereafter. Bar Question)

Q: In 1955, Hilaria was hired as a grade school A:


teacher at the Sta. Catalina College. In 1970, she Revised
Employees’
applied for and was granted a 1 year leave of Social Government
Compensation
absence (LOA) without pay due to the illness of her Security Law Service
Act
mother. After the expiration in 1971 of her LOA, she Insurance Act
had not been heard from by Sta. Catalina. In the Compulsory Compulsory for Compulsory upon
meantime, she was employed as a teacher at the upon all E e s all permanent all Ers and their
San Pedro Parochial School during SY ‘80-‘81 and at not over 60 Ees below 60 Ees not over 60
the Liceo de San Pedro, during SY 1981-1982. In years of age years of age years of age;
1982, she applied anew at Sta. Catalina which hired and their Ers. upon Provided, that an
st
her. On Mar 22, 1997, during the 51 appointment to Ee who is over 60
Commencement Exercises of Sta. Catalina, Hilaria 1. Filipinos permanent years of age and
was awarded a Plaque of Appreciation for 30 yrs. of recruited in status, and for paying
service and Php 12,000 as gratuity pay. On May 31, the Philippines all elective contributions to
1997, Hilaria reached the compulsory retirement age by foreign- officials for the qualify for the
of 65. Sta. Catalina pegged her retirement benefits based Ers for duration of their retirement or life
at Php 59,038.35. However, amount of Php 12,000 employment tenure. insurance benefit
representing the gratuity pay, which was given to abroad may be administered by
her, was deducted from her retirement benefits. covered by the Note: Any person, the System shall
SSS on whether elected
a be subject to
Should the gratuity pay be deducted from the voluntary or appointed, in compulsory
retirement benefits? basis. the service of an
coverage.
Er is a covered Ee
A: No. Gratuity pay is separate and distinct from if he receives
2. Compulsory compensation for
retirement benefits. It is paid purely out of upon all self- such service.
generosity. employed
persons
Q: What is the difference between gratuity pay and earning Php 1,
retirement benefits? 800 or more
per annum.
A:
GRATUITY PAY RETIREMENT BENEFITS
It is paid to the Are intended to help the
beneficiary for the past Ee enjoy the remaining
services or favor years of his life, releasing
rendered purely out of him from the burden of
the generosity of the worrying for his financial

UNIVERSITY OF SANTO TOMAS


2013 GOLDEN NOTES 62
LABOR STANDARDS

RETIREMENT BENEFITS OF WORKERS PAID BY c. Favoring a male applicant with respect to


RESULTS/ RETIREMENT BENEFITS OF PART-TIME hiring where the particular job can equally
WORKERS be handled by a woman
d. Favoring a male Ee over a female Ee with
Q: How shall we determine the amount of
respect to the dismissal of personnel.
retirement benefits of workers paid by results and
part-time workers?
2. Stipulating, whether as a condition for
A: The 15-day salary of workers paid by results and employment or continuation of employment:
part-time workers shall be determined from their a. That a woman Ee shall not get married, or
average daily salary which is the average daily salary b. That upon marriage, such woman Ee shall be
for the last 12 months reckoned from the date of deemed resigned or separated. (Art. 136, LC)
their retirement, divided by the number of actual
working days in that particular period. [Sec. 5.2 and Q: May a woman worker be dismissed on the ground
5.3 of the Rules Implementing the New Retirement of dishonesty for having written ‘’single” on the
Law] space for civil status on the application sheet,
contrary to the fact that she was married ?
TAXABILITY
A: Art. 136 of the LC, explicitly prohibits
discrimination merely by reason of marriage of a
Q: Are retirement benefits under R.A 7641 taxable?
female Ee. The policy of not accepting or disqualifying
from work any woman worker who contracts
A: No. Retirement benefits under R.A 7641 are tax
marriage is afoul of the right against discrimination
exempt provided that such benefits provided by the
provided to all women workers by our labor laws and
retirement plan be equal or less than the minimum
by our Constitution [PT&T Co. vs. NLRC, G.R. No.
requirement provided by law.
118978, (1997)].
Q: What are the requirements for tax exemption
under R.A. 7641? 3. Dismissing, discriminating or otherwise prejudice
A: a woman Ee by reason of her being married. (Art.
1. That there be no CBA or other applicable 136, LC)
employment contract providing for retirement
benefits for an Ee; or 4. Art. 137 of the LC
2. Even if there is a CBA or other applicable
employment contract providing for retirement Note: Discrimination in any form from pre-
employment to post employment, including hiring,
benefits for an Ee, that the same is below the
promotion or assignment, based on the actual,
requirements set forth by law. perceived or suspected HIV status of an individual is
unlawful. (Philippine AIDS Prevention and Control Act
WOMEN WORKERS of 1998, [R.A. 8504])

PROVISIONS AGAINST DISCRIMINATION Q: What is the state policy on non-discrimination


against women?
Q: What are the discriminatory acts against women
Ee? A: The State condemns discrimination against women in all
its forms and pursues by all appropriate means and without
A: delay the policy of eliminating discrimination against
1. Discrimination with respect to the terms and women in keeping with the Convention on the Elimination
of All Forms of Discrimination Against Women (CEDAW)
conditions of employment solely on account of
and other international instruments consistent with
sex Philippine law. The State shall accord women the rights,
a. Payment of lesser compensation to a female protection, and opportunities available to every member of
Ee as against a male Ee for work of equal society. (Sec. 2, R.A. 9710 or the Magna Carta of Women)
value
b. Favoring a male Ee with respect to The State shall take steps to review and, when necessary,
promotion, training opportunities, study and amend and/or repeal existing laws that are discriminatory
scholarship grants on account of gender. to women within 3 years from the effectivity of this Act.
(Art. 135, LC) (Sec. 12, R.A. 9710)

UNIVERSITY OF SANTO TOMAS


63 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

Q: Can an individual, the sole proprietor of a perform the duties of the job [Star Paper
business enterprise, be said to have violated the vs.Simbol, G.R. No. 164774, (2006)].
Anti-Sexual Harassment Act of 1995 if he clearly
discriminates against women in the adoption of Q: What is the importance of the bona fide
policy standards for employment and promotions in occupational qualification Rule?
the enterprise? Explain. (2003 Bar Question)
A:
A: When an Er discriminates against women in the 1. To ensure that the Ee can effectively
adoption of policy standards for employment and perform his work
promotion in his enterprise, he is not guilty of Sexual 2. So that the no-spouse employment rule will
Harassment. Instead, the Er is guilty of discrimination not impose any danger to business.
against women Ees which is declared to be unlawful
by the LC. Q: Glaxo, a company which has a policy against
employees having relationships with the employees
For an Er to commit Sexual Harassment, he – as a of its competitors, employed Tecson as a medical
person of authority, influence or moral ascendancy – representative. Tecson married Bettsy, a Branch
should have demanded, requested or otherwise coordinator in one of Glaxo’s competitors. Tecson
required a sexual favor from his Ee whether the was then transferred to another area but he did not
demand, request or requirement for submission is accept such transfer.
accepted by the object of said act.
Is the policy of Glaxo valid and reasonable so as to
STIPULATION AGAINST MARRIAGE constitute the act of Tecson as willful disobedience?
(ART. 136, LC)
A: The prohibition against personal or marital
Q: What is the “no-spouse employment” policy? relationships with Ees of competitor companies upon
Glaxo’s Ees is reasonable under the circumstances
A: Policy banning spouses from working in the same because relationships of that nature might
company. compromise the interest of the company. Glaxo does
not impose an absolute prohibition against
Q: Does it violate provisions of the LC? relationships between its Ees and those of competitor
companies. Its Ees are free to cultivate relationships
A: GR: It may not facially violate Art. 136 of the LC but with and marry persons of their own choosing. What
it creates a disproportionate effect and the only way the company merely seeks to avoid is a conflict of
it could pass judicial scrutiny is by showing that it is interest between the Ee and the company that may
reasonable despite the discriminatory and arise out of such relationships. Furthermore, the
disproportionate effect. prohibition forms part of the employment contract
and Tecson was aware of such restrictions when he
XPN: Bona fide occupational qualification rule entered into a relationship with Bettsy [Duncan
(BFOQ) Assoc. of Detailman-PTGWO vs.GlaxoWellcome Phil.
Inc., G.R. No. 162994, (2004)].
Q: What is the bona fide occupational qualification
rule? PROHIBITED ACTS (ART. 137, Labor Code)

A: There must be a finding of any BFOQ to justify an Q: What are the prohibited acts under Art. 137 of
Er’s no spouse employment rule. There must be a the LC?
compelling business necessity for which no
alternative exists other than the discriminating A: It shall be unlawful for any Er to:
practice. To justify a BFOQ, the Er must prove two 1. Deny any woman Ee benefits provided by law.
factors: 2. Discharge any woman for the purpose of
preventing her from enjoying any of the benefits
1. That the employment qualification is reasonably provided by law.
related to the essential operation of the job 3. Discharge such woman on account of her
involved; and pregnancy, or while on leave or in confinement
2. That there is a factual basis for believing that all due to her pregnancy.
or substantially all persons meeting the
qualification would be unable to properly

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LABOR STANDARDS

4. Discharge or refuse the admission of such 1. Er


woman upon returning to her work for fear that 2. Manager
she may again be pregnant. 3. Supervisor
4. Agent of the Er
Q: At any given time, approximately 90% of the 5. Teacher, instructor, professor
production workforce of a semiconductor company 6. Coach, trainer, or
are females. 75% of the female workers are married 7. Any other person who, having authority,
and of child-bearing years. It is imperative that the influence or moral ascendancy over another in a
Company must operate with a minimum number of work or training or education environment:
absences to meet strict delivery schedules. In view a. Demands
of the very high number of lost working hours due b. Requests or
to absences for family reasons and maternity leaves, c. Requires
the company adopted a policy that it will employ -any sexual favor from the other, regardless of
married women as production workers only if they whether the demand, request or requirement for
are at least 35 years old. Is the policy in violation of submission is accepted by the object of R.A.
any law? (1998 Bar Question) 7877.(Sec. 3, R.A. 7877)

A: Yes, it violates Art. 140 of the LC which provides Q: How is Sexual Harassment committed?
that no Er shall discriminate against any person in
respect to the terms and conditions of employment A: Generally, Sexual Harrasment is committed when
on account of his age. a person demands, requests, or otherwise requires
any sexual favor from another, regardless of whether
Q: Who are covered under this Title? the demand, request or requirement for submission
is accepted by the latter.
A: Any women who is permitted or suffered to work:
1. With or without compensation Q: Under the Sexual Harassment Act, does the
2. In any night club, cocktail lounge, massage clinic, definition of Sexual Harassment require a
bar or similar establishment categorical demand or request for sexual favor?
3. Under the effective control or supervision of the
Er for a substantial period of time A: No. While the provision states that there must be a
4. Shall be considered as an Ee of such “demand, request or requirement of a sexual favor.”
establishment for purposes of labor and social It is not necessary that the demand, request or
legislation. requirement of a sexual favor be articulated in a
categorical manner. It may be discerned, with equal
ANTI-SEXUAL HARASSMENT ACT certitude, from the acts of the offender.
(R.A. 7877)
Likewise, it is not essential that the demand, request
Q: What is the policy of the State in enacting the or requirement be made as a condition for continued
Anti-Sexual Harassment law? employment or for promotion to a higher position. It
is enough that the respondent’s acts result in creating
A: The State shall: an intimidating, hostile or offensive environment for
1. Value the dignity of every individual the employee [Domingo vs.Rayala, G.R. No. 155831,
2. Enhance the development of its human (2008)].
resources
3. Guarantee full respect for human rights, and Q: When is Sexual Harassment committed?
4. Uphold the dignity of workers, Ees, applicants for
employment, students or those undergoing A: Specifically:
training, instruction or education. (Sec. 2, R.A.
7877) 1. In a work-related or employment environment:
a. The sexual favor is made as a condition in
Q: Who may be held liable for Sexual Harassment? the hiring or in the employment, re-
employment or continued employment of
A: In a work, education or training-related said individual, or in granting said individual
environment Sexual Harassment may be committed favorable compensation, terms, conditions,
by an: promotions, or privileges; or the refusal to
grant the sexual favor results in limiting,

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segregating or classifying the Ee which in a 2. Create a committee on decorum and


way would discriminate, deprive or diminish investigation of cases on Sexual Harassment.
employment opportunities or otherwise
adversely affect said Ee; 3. The Er or head of office, education or training
b. The above acts would impair the Ees’ rights institution shall disseminate or post a copy of this
or privileges under existing labor laws; or R.A. 7877 for the information of all concerned
c. The above acts would result in an
intimidating, hostile, or offensive Q: What is the liability of the employer, head of
environment for the Ee. office, educational or training institution?

2. In an education or training environment sexual A: Er shall be solidarily liable for damages arising from
harassment is employed: the acts of Sexual Harassment committed in the
a. Against one who is under the care, custody employment, education or training environment
or supervision of the offender; provided:
b. Against one whose education, training,
apprenticeship or tutorship is entrusted to 1. The Er or head of office, educational or
the offender; training institution is informed of such acts
c. When sexual favor is made a condition to by the offended party; and
the giving of a passing grade, or the granting 2. No immediate action is taken thereon. (Sec.
of honors and scholarships, or the payment 5, R.A. 7877)
of a stipend, allowance or other benefits,
privileges, or considerations; or Q: Can an independent action for damages be filed?
d. When sexual advances result in an
intimidating, hostile or offensive A: Yes. Nothing under R.A. 7877 shall preclude the
environment for the student, trainee or victim of work, education or training-related Sexual
apprentice. Harassment from instituting a separate and
independent action for damages and other
Q: What are the duties of the employer or head of affirmative relief. (Sec. 6)
office in a work-related, education or training
environment? Q: What is the three-fold liability rule in Sexual
Harassment cases?
A:
1. Prevent or deter the commission of acts of A: An act of Sexual Harassment may give rise to civil,
Sexual Harassment, and criminal and administrative liability on the part of the
2. Provide the procedures for the resolution, offender, each proceeding independently of the
settlement or prosecution of acts of Sexual others.
Harassment.
Q: When does the action prescribe?
Towards this end, the Er or head of office shall:
A: Any action shall prescribe in 3 years.
1. Promulgate appropriate rules and regulations in
consultation with the jointly approved by the Ees Q: A Personnel Manager, while interviewing an
or students or trainees, through their duly attractive female applicant for employment, stared
designated representatives, prescribing the directly at her for prolonged periods, albeit in a
procedure for the investigation or Sexual friendly manner. After the interview, the manager
Harassment cases and the administrative accompanied the applicant to the door, shook her
sanctions therefore. (Sec. 4, R.A. 7877) hand and patted her on the shoulder. He also asked
the applicant if he could invite her for dinner and
Note: Administrative sanctions shall not be a bar to dancing at some future time. Did the Personnel
prosecution in the proper courts for unlawful acts of Manager, by the above acts, commit Sexual
Sexual Harassment. Harassment? Reason. (2000 Bar Question)
The said rules and regulations issued shall include,
A: Yes, because the Personnel Manager, is in a
among others, guidelines on proper decorum in the
position to grant or not to grant a favor (a job) to the
workplace and educational or training institutions.
applicant. Under the circumstances, inviting the
applicant for dinner or dancing creates a situation

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hostile or unfriendly to the applicant's chances for a It is not impossible for a male, who is a homosexual,
job if she turns down the invitation. [Sec. 3(a)(3), R.A. to ask for a sexual favor from another male.
No. 7877, Anti-Sexual Harassment Act]
EMPLOYMENT OF MINOR WORKERS
Q: In the course of an interview, another female
applicant inquired from the same Personnel Q: What are the rules on employment of minor
Manager if she had the physical attributes required workers?
for the position she applied for. The Personnel
Manager replied: "You will be more attractive if you A: GR:
will wear micro-mini dresses without the 1. No person under 18 years of age will be allowed
undergarments that ladies normally wear." Did the to be employed in an undertaking which is
Personnel Manager, by the above reply, commit an hazardous or deleterious in nature.
act of sexual harassment? Reason. 2. No Er shall discriminate against any person in
respect to terms and conditions of employment
A: Yes. The remarks would result in an offensive or on account of his age.
hostile environment for the Ee. Moreover, the
remarks did not give due regard to the applicant’s XPN:
feelings and it is a chauvinistic disdain of her honor, A. Below 15 yrs. Old
justifying the finding of Sexual Harassment 1. The child works directly under the sole
[Villaramavs. NLRC, G.R. No. 106341 (1994)]. responsibility of his parents or legal guardian
and where only members of the family are
Q: Pedrito Masculado, a college graduate from the employed, subject to the following
province, tried his luck in the city and landed a job conditions:
as a utility/maintenance man at the warehouse of a
big shopping mall. After working as a casual a. Employment does not endanger the
employee for 6 months, he signed a contract for child’s safety, health and morals
probationary employment for 6 months. Being well- b. Employment does not impair the child’s
built and physically attractive, his supervisor, Mr. normal development
Hercules Barak, took special interest to befriend c. Er-parent or legal guardian provides the
him. When his probationary period was about to child with the primary and/or secondary
expire, he was surprised when one afternoon after education prescribed by the
working hours, Mr. Barak followed him to the men’s Department of Education
comfort room. After seeing that no one else was 2. The child’s employment or participation in
around, Mr. Barak placed his arm over Pedrito’s public entertainment or information through
shoulder and softly said: “You have great potential cinema, theater, radio or television is
to become a regular Ee and I think I can give you a essential provided:
favorable recommendation. Can you come over to a. Employment contract is concluded by
my condo unit on Saturday evening so we can have the child’s parents or legal guardian,
a little drink? I’m alone, and I’m sure you want to b. With the express agreement of the child
stay longer with the company.” concerned, if possible, and
c. The approval of DOLE, the following
Is Mr. Barak liable for Sexual Harassment committed must be complied with:
in a work-related or employment environment? i. The employment does not involve
(2000 Bar Question) advertisement or commercials
promoting alcoholic beverages,
A: Yes, the elements of Sexual Harassment are all intoxicating drinks, tobacco and its by-
present. The act of Mr. Barak was committed in a products or exhibiting violence
workplace. Mr. Barak, as supervisor of Pedrito ii. there is a written contract approved
Masculado, has authority, influence and moral by DOLE
ascendancy over Masculado. iii. the conditions provided in the first
instance are met.
Given the specific circumstances mentioned in the B. Above 15 but below 18 – may be employed in
question like Mr. Barak following Masculado to the any non-hazardous work
comfort room, etc. Mr. Barak was requesting a sexual C. Above 18 – no prohibition
favor from Masculado for a favorable
recommendation regarding the latter's employment.

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Q: What is the duty of the employer before engaging or deleterious in nature as determined by the SLE.
minor into work? Paint manufacturing has been classified by the SLE as
a hazardous work.
A: The Er shall first secure a work permit from the
DOLE which shall ensure observance of the Q: What are the prohibitions on the employment of
requirements. (Sec. 12, R.A. 7160) children in certain advertisements?

Q: Is there a rule regarding the issuance of work A: Employment of child models in all commercial
certificates/ permits to children at least 15 but advertisements promoting the following shall be
below 18 years of age? prohibited:
1. Alcoholic beverage
A: The issuance of a DOLE Certificate to youth aged 2. Intoxicating drinks
15 to below 18 years of age is not required by law. No 3. Tobacco and its by products
employer shall deny opportunity to any such youth 4. Gambling
applying for employment merely on the basis of lack 5. Violence
of work permit or certificate of eligibility for 6. Pornography
employment. Any young person aged 15 to below 18
years of age may present copy of this DOLE advisory Q: A spinster school teacher took pity on one of her
to any employer, job provider, government authority, pupils, a robust and precocious 12-year old boy
or his/her representative when seeking employment whose poor family could barely afford the cost of his
or anytime during employment. (DOLE Department schooling. She lives alone at her house near the
Advisory No. 01-08) school after her housemaid left. In the afternoon,
she lets the boy do various chores as cleaning,
Q: What is a non-hazardous work? fetching water and all kinds of errands after school
hours. She gives him rice and Php 30.00 before the
A: It is any work or activity in which the Ee is not boy goes home at 7 every night. The school principal
exposed to any risk which constitutes an imminent learned about it and charged her with violating the
danger to his safety and health. law which prohibits the employment of children
below 15 years of age. In her defense, the teacher
Q: What are hazardous workplaces? stated that the work performed by her pupil is not
hazardous, and she invoked the exception provided
A: in the Department Order of DOLE for the
1. Nature of work exposes the workers to engagement of persons in domestic and household
dangerous environmental elements, service. Is her defense tenable? (2004 Bar Question)
contaminants or work conditions
2. Workers are engaged in construction work, A: No, her defense is not tenable. Under Art. 139 of
logging, fire-fighting, mining, quarrying, blasting, the LC on “minimum employable age,” no child below
stevedoring, dock work, deep-sea fishing, and 15 years of age shall be employed except when he
mechanized farming works directly under the sole responsibility of his
3. Workers are engaged in the manufacture or parents or guardian, the provisions of the alleged DO
handling of explosives and other pyrotechnic of DOLE to the contrary notwithstanding. A mere DO
products cannot prevail over the express prohibitory provisions
4. Workers use or are exposed to heavy or power- of the LC.
driven tools
Q: Determine whether the following minors should
Q: You were asked by a paint manufacturing be prohibited from being hired and from performing
company regarding the possible employment as a their respective duties indicated hereunder: (2006
mixer of a person aged 17, who shall be directly Bar Question)
under the care of the section supervisor. What
advice would you give? Explain briefly. (2002 Bar 1. A 17-year old boy working as miner at the
Question) Walwadi Mining Corporation.

A: The paint manufacturing company cannot hire a A: Yes, he should be prohibited from being hired and
person who is aged 17. Art. 139(c) of the LC provides from performing the duties of a miner because such
that a person below 18 years of age shall not be constitutes hazardous work under D.O. No. 04 Series
allowed to work in an undertaking which is hazardous of 1999. Art. 139(c) of LC expressly prohibits the

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LABOR STANDARDS

employment of persons below 18 years of age in an


undertaking which is hazardous or deleterious in A: Yes, he should be prohibited from working as a
nature as determined by the SLE. dealer in casino, because Art. 140 of the LC prohibits
the employment of persons below 18 years of age in
2. An 11-year old boy who is an accomplished singer an undertaking which is hazardous or deleterious in
and performer in different parts of the country. nature identified in the guidelines issued by the SLE.
Working as a dealer in a casino is classified as
A: No, he should not be prohibited from being hired hazardous under D.O. No. 04 Series of 1999 as it
and from performing as a singer. Under Art. VIII Sec. exposes children to physical, psychological or sexual
12(2) of R.A. 7619 as amended by R.A. 7658, this abuses.
constitutes an exception to the general prohibition
against the employment of children below 15 years of ACT AGAINST CHILD LABOR (R.A. 9231) AND
age, provided that the following requirements are CHILD ABUSE LAW (R.A. 7610)
strictly complied with:
Q: What is child labor?
1. The Er shall ensure the protection, health safety
and morals of the child A: Any work or economic activity performed by a
2. The Er shall institute measures to prevent the child that subjects him or her to any form of
child’s exploitation or discrimination taking into exploitation or is harmful to his or her health and
account the system and level of remuneration, safety or physical, mental or psychosocial
and the duration and arrangement of working development.
time; and
3. The Er shall formulate and implement, subject to Q: Who is a working child?
the approval and supervision of competent
authorities, a continuing program for training A: Any child engaged as follows:
and skill acquisition of the child. Moreover, the
child must be directly under the sole 1. When the child is below 18 years of age in a work
responsibility of his parents or guardian and his or economic activity that is not child labor; or
employment should not in any way interfere with 2. When the child is below 15 years of age:
his schooling. a. In work where he/she is directly under the
responsibility of his/her parents or legal
3. A 15-year old girl working as a library assistant in guardian and where only members of the
a girls' high school. child’s family are employed; or
b. In public entertainment or information
A: No, she should not be prohibited from working as
a library assistant because the prohibition in the LC Q: When may the State intervene in behalf of the
against employment of persons below 18 years of age child?
merely pertains to employment in an undertaking
which is hazardous or deleterious in nature as A:
identified in the guidelines issued by the SLE. Working 1. When the parent, guardian, teacher or person
as a library assistant is not one of undertakings having care or custody of the child fails or is
identified to be hazardous under D.O. No 04 Series of unable to protect the child against abuse,
1999. exploitation and discrimination; or
2. When such acts are committed against the child
4. A 16-year old girl working as model promoting by the said parent, guardian, teacher or person
alcoholic beverages. having care and custody over the child.

A: Yes, she should be prohibited from working as a Q: What is the limitation on the hours of work of a
model promoting alcoholic beverages. R.A. 7610 working child?
categorically prohibits the employment of child
models in all commercials or advertisements A: If the child is:
promoting alcoholic beverages and intoxicating
drinks, among other things. 1. Below 15 years of age – not more than 20 hours
a week and not more than 4 hours a day
5. A 17-year old boy working as a dealer in a casino. - Not allowed to work between 8:00 pm –
(2006 Bar Question) 6:00 am

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EMPLOYMENT OF HOUSEHELPERS
2. At least 15 years of age but below 18 years of
age – will not exceed 8 hours a day or 40 hours a Q: Who are the kasambahay covered by R.A. 10361,
week otherwise known as the “Domestic Workers Act” or
- Not allowed to work between 10:00 pm – “Batas Kasambahay”?
6:00 am
A: All kasambahay engaged in domestic work,
Q: What are the worst forms of labor? whether on a live-in or live-out arrangement, such as,
but not limited to, the following:
1. All forms of slavery (Anti-Trafficking of Persons
Act of 2003) or practices similar to slavery such 1. General househelp
as sale and trafficking of children, debt bondage 2. Nursemaid or Yaya
and serfdom and forced or compulsory labor, 3. Cook
including recruitment of children for use in 4. Gardener
armed conflict; 5. Laundry person
2. The use, procuring, offering or exposing of a child 6. Working children or domestic workers 15 years
pornography or for pornographic performances; and above but below 18 years of age; or
3. The use, procuring, offering or exposing of a child 7. Any person who regularly performs domestic
for illegal or illicit activities, including the work in one household on an occupational basis
production and trafficking of dangerous drugs (live-out arrangement). [Sec. 3(d), R.A. 10361]
and volatile substances prohibited under existing
laws; Q: Who are not covered by the Batas Kasambahay?
4. Employing child models in all commercials or
advertisements promoting alcoholic beverages, A: The following are not covered:
intoxicating drinks, tobacco and its byproducts
and violence; and 1. Service providers
5. Work which, by its nature or circumstances in 2. Family drivers
which it is carried out, is hazardous or likely to be 3. Children under foster family arrangement; and
harmful to the health, safety or morals of 4. Any other person who performs work
children. occasionally or sporadically and not on an
occupational and regular basis.
Q: Who can file a complaint for unlawful acts
committed against children? Q: Who are children under foster family
arrangement?
A:
1. Offended party A: Children under foster family arrangement are
2. Parents or guardians those who are living with a family or household of
3. Ascendants or collateral relatives within the relative/s and are provided access to education and
rd
3 degree of consanguinity given an allowance incidental to education, i.e.,
4. Officer, social worker or representative of a “baon,” transportation, school projects, and school
licensed child-caring institution activities; provided, that the foster family and foster
5. Officer or social worker of DSWD care arrangements are in compliance with the
6. Barangay chairman of the place where the procedures and requirements as prescribed by R.A.
violation occurred, where the child is 10165 or Foster Care Act of 2012.
residing or employed
7. At least 3 concerned, responsible citizens Q: What are the examples of persons performing
where the violation occurred work occasionally or sporadically and not on an
occupational basis?
Q: Which courts have jurisdiction over offenses
punishable under R.A. 9231? A:
1. A janitress doing irregular laundry work for a
A: The Family Courts shall have original jurisdiction household during rest day;
over all cases involving offenses punishable under 2. A construction worker doing casual gardening job
this Act. for a household; or
3. A hospital nurse or a student doing baby-sitting
job.

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Q: What is the employable age for a kasambahay? 1. Medical certificate or health certificate issued by
a local government health officer;
A: 15 years old and above. 2. Barangay and police clearance;
3. NBI clearance; and
Note: The employment of children 15 but below 18 years of 4. Duly authenticated birth certificate or, if not
age may be made under the following conditions: available, voter’s identification card, baptismal
record, or passport showing the kasambahay’s
1. They shall not be allowed to work for more than 8
age.
hours a day, and in no case beyond 40 hours a week;
2. They shall not be allowed to work between 10 p.m. to
Note: Requirements are mandatory when the employment
6 a.m. of the following day;
of the kasambahay is facilitated through a private
3. They shall not be allowed to do hazardous work; and
employment agency.
4. They shall not be denied access to education and
training.
It is not a requirement for a kasambahay to be trained and
The consent of the parent/guardian of working children is certified by TESDA prior to employment. However, the
required in the employment contract. kasambahay is encouraged to undergo competency
assessment and be certified by TESDA. Training is not a
requirement for competency assessment.
Q: Who is the employer of a kasambahay?
Q: Is a contract necessary before entering into an
A: An Er is any person who engages and controls the
employment for domestic work?
services of a kasambahay and is party to the
employment contract.
A: Yes. The Er and the kasambahay shall enter into a
contract of employment written in a language or
Q: Under the law, who are included in the
dialect understood by them.
employer’s household to be provided direct service
by the kasambahay?
Note: The contract need not be notarized. The Punong
Barangay or his/her designated officer may attest to the
A: Immediate family members or other occupants of contract and serve as witness to its execution.
the house who are directly and regularly provided
services by the kasambahay. Q: What should be the contents of the employment
contract?
Q: How can an employer hire a kasambahay?
A:
A: An Er can hire directly or through private 1. Duties and responsibilities of the kasambahay;
employment agencies registered with the DOLE 2. Period of employment;
regional offices. The Er, whether the kasambahay is 3. Compensation;
hired directly or through POEA, shall shoulder the 4. Authorized deductions;
expenses for hiring. The kasambahay shall not be 5. Hours of work and proportionate additional
charged of any cost of the recruitment, placement, or payment;
finder’s fee. 6. Rest days and allowable leaves;
7. Board, lodging and medical attention;
Note: The Er shall pay the expenses that are directly used 8. Agreements on deployment expenses, if any;
for the transfer of the kasambahay from place of origin to
9. Loan agreement;
the place of work. An Er can be reimbursed of the
10. Termination of employment; and
deployment expenses when the kasambahay unreasonably
leaves the Er within 6 months from the time he/she started 11. Any other lawful condition agreed upon by both
work. parties.

If a kasambahay is hired thru a Private Employment Q: Is the employer required to register the
Agency, the agency is allowed to collect Service Fee from kasambahay?
the Er.
A: Yes. The Er is required to register the kasambahay
Q: Are there pre-employment requirements? in the Registry of Domestic Workers in the barangay
where the Er resides. For this purpose, the DILG, in
A: Yes. Before entering into an employment contract, coordination with the DOLE, shall formulate a
the Er has the option to require the following from a registration system.
kasambahay:

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71 FACULTY OF CIVIL LAW
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Note: The registration of the kasambahay is free of charge.
Note: The law provides a mechanism for increasing the
Q: What are the mandatory benefits of the minimum wage of the kasambahay. Initially, one year from
kasambahay? 4 June 2013, the Regional Tripartite Wages and Productivity
Boards (RTWPB) may review, and if proper, determine and
adjust the minimum wage (Sec. 24, R.A. 10361). The RTWPB
A:
shall coordinate with TESDA on the wage review and
1. Monthly minimum wage;
adjustment based on the kasambahay’s competency level,
2. Daily rest period of 8 (total) hours; in line with the thrust to professionalize the domestic
3. Weekly rest period of 24 (uninterrupted) hours service sector.
4. 5 days annual service incentive leave with pay;
5. 13th month pay; Q: In what form and when will the wage of a
6. SSS benefit; kasambahay be paid?
7. PhilHealth benefit; and
8. Pag-IBIG benefit A: In cash, at least once a month.

Q: What are the other rights and privileges of the Note: The Er shall at all times provide the kasambahay
kasambahay? with a copy of the pay slip every pay day containing the
amount paid and all deductions made, if any. The copies of
A: the pay slip shall be kept by the Er for a period of 3 years.
1. Freedom from Er’s interference in wage (Sec. 26, R.A. 10361)
disposal;
Payment of wages by means of promissory note, voucher,
2. Standard of treatment;
coupon, token, ticket, chit, or anything other than the cash
3. Board, lodging, and medical attendance; wage is prohibited.
4. Right to privacy;
5. Access to outside communication; Q: Is the kasambahay entitled to daily rest period?
6. Access to education and training;
7. Right to be provided a copy of the employment A: Yes. He/she is entitled to a total daily rest period
contract; of at least 8 hours.
8. Right to Certificate of Employment;
9. Right to form, join, or assist labor organization; Q: Can the employer require the kasambahay to
10. Right to terminate employment based on just work beyond 16 hours at any given workday in
cause; and return for an equivalent hourly rate?
11. Right to exercise religious beliefs and cultural
practices. A: No. The eight-hour rest period must be observed.

Q: What are the basic necessities of the Note: Kasambahays are also entitled to at least 24
kasambahay? consecutive hours of rest in a week. The Er and the
kasambahay may determine the schedule of the weekly
A: rest period. The Er shall respect the preferred weekly rest
1. At least 3 adequate meals a day, taking into day of the kasambahay on religious grounds. (Sec. 21, R.A.
10361)
consideration the kasambahay’s religious beliefs
and cultural practices;
2. Humane sleeping condition; and Q: When can the kasambahay avail of the five-day
3. Appropriate rest and basic medical assistance. annual Service Incentive Leave?

Note: Though not part of the “basic necessities” required A: After 1 year of service.
to be provided by the Er to the kasambahay, shampoo,
soap, toothpaste etc. may be provided gratuitously. Note: If the kasambahay fails to avail of any of his/her
annual SIL, it shall be forfeited and cannot be converted to
cash.
Q: How much is the monthly minimum wage of a
kasambahay?

A: For those employed in:


1. National Capital Region – Php 2,500.00
2. Cities and 1st class municipalities – Php 2,000.00
3. Other municipalities – Php 1,500.00 (Sec. 24,
R.A. 10361)

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Q: What other agreements may the employer and A: GR: The Er.
the kasambahay enter into relative to the
kasambahay’s weekly rest day and Service Incentive XPN: If the wage of the kasambahay is Php
Leave? 5,000.00 or more, the kasambahay will pay
his/her share in the premiums/contributions.
A:
1. Offsetting a day of absence with a particular rest Q: Does the law have provisions protecting
day; employers of kasambahay?
2. Waiving a particular rest day in return for an
equivalent daily rate of pay; A: Yes. They include:
3. Accumulating rest days not exceeding 5 days;
4. Adding the accumulated rest days (maximum of 5 1. Prohibition against privileged information;
days) to the five-day SIL; and 2. Er may require certain pre-employment
5. Waiving a particular SIL in return for an documents prior to engagement;
equivalent daily rate of pay. 3. Ers are assured of quality services through DOLE-
TESDA training, assessment, and certification of
th
Q: When will a kasambahay be entitled to the 13 kasambahay;
month pay? 4. Forfeiture of 15-day unpaid salary should the
kasambahay leave the residence of the Er
A: After 1 month of service. without any justifiable reason; and
5. Right to terminate the employment on justifiable
th
Q: How is the 13 month pay computed and when is grounds.
it paid?
Q: Can the kasambahay terminate the contract at
th
A: In computing the 13 month pay, the total basic any time?
wage received in a given calendar year shall be
divided by 12. The amount derived shall be paid not A: Yes, on the following grounds:
later than December 24.
1. Verbal or emotional abuse of the kasambahay by
Q: When will a kasambahay be covered by SSS, the Er or any member of the household;
PhilHealth, and Pag-IBIG? 2. Inhuman treatment including physical abuse of
the kasambahay by the Er or any member of the
A: After 1 month of service. household;
3. Commission of a crime or offense against the
Q: Is the employer liable under the SSS, PhilHealth, kasambahay by the Er or any member of the
and Pag-IBIG laws in case the kasambahay refuses household;
membership with those agencies? 4. Violation by the Er of the terms and conditions of
the employment contract and other standards
A: Membership under the SSS, PhilHealth, and Pag- set forth under the law;
IBIG is mandatory and non-negotiable. 5. Any disease prejudicial to the health of the
kasambahay, the Er, or member/s of the
Q: Supposing that in exchange for non-membership, household; and
the kasambahay agrees with the employer to receive 6. Other causes analogous to the foregoing. (Sec.
the premiums and contributions in addition to 33, R.A. 10361)
his/her salary, is this allowed?
Q: Can the employer also terminate the contract at
A: No. Under the SSS, PhilHealth, and Pag-IBIG laws, any time?
the Er has the obligation to register the kasambahay
and deduct and remit the required premiums and A: Yes, on the following grounds:
contributions. The Er shall incur certain liabilities,
including criminal prosecution, if he fails or refuses to 1. Misconduct or willful disobedience by the
comply with his/her obligations. kasambahay of the lawful order of the Er in
connection with the former’s work;
Q: Who will pay the SSS premium, and PhilHealth 2. Gross or habitual neglect or inefficiency by the
and Pag-IBIG contributions of the kasambahay? kasambahay in the performance of duties;

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73 FACULTY OF CIVIL LAW
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3. Fraud or willful breach of the trust reposed by inspection can be made before he/she leaves the
the Er on the kasambahay; household.
4. Commission of a crime or offense by the
kasambahay against the person of the Er or any Q: If there is non-payment or underpayment of
immediate member of the Er’s family; wage and other labor-related concerns, where can
5. Violation by the kasambahay of the terms and the kasambahay seek assistance?
conditions of the employment contract and
other standards set forth under the law; A: The kasambahay can go to a Kasambahay Desk
6. Any disease prejudicial to the health of the Officer situated in their respective barangays or the
kasambahay, the Er, or member/s of the nearest DOLE field/provincial/regional office.
household; and
7. Other causes analogous to the foregoing. (Sec. Q: Can the employer demand from a private
34, R.A. 10361) employment agency the replacement of a
kasambahay?
Note: Neither the domestic worker nor the Er may
terminate the contract before the expiration of the term A: Yes, within 1 month from the day the kasambahay
except for grounds provided for in Secs. 33 and 34 of the reported for work, the Er may demand a
Batas Kasambahay.
replacement based on the following cases:
The domestic worker and the Er may mutually agree upon
1. The kasambahay is found to be suffering from
written notice to pre-terminate the contract of
employment to end the employment relationship. (Sec. 32, an incurable or contagious disease, or mental
R.A. 10361) illness as certified by a competent or
government physician;
Q: If the duration of the domestic service is not 2. The kasambahay abandons the job without
determined in the contract, can a kasambahay or justifiable cause, voluntarily resigns, commits
the employer terminate the contract anytime? theft or any other analogous acts prejudicial to
the Er or his/her family; or
A: Yes. Either the Er or the kasambahay may give 3. The kasambahay is physically or mentally
notice to end the working relationship 5 days before incapable of discharging the minimum
the intended date of the termination of service. requirements of the job, as specified in the
employment contract.
Q: What are the entitlements of a kasambahay
unjustly dismissed by the employer? Q: What will happen in case the private
employment agency fails to provide a qualified
A: replacement after one month from receipt of the
1. Outright payment of earned wage; and employer’s request?
2. Indemnity benefit in the form of wage
equivalent to 15 days work. A: The Er shall be entitled to a refund of 75% of the
fees paid to the private employment agency.
Q: What are the liabilities of a kasambahay who
leaves his/her employer without justifiable reason? Q: What are the declared responsibilities of the
private employment agency under the law?
A:
1. Forfeiture of wage equivalent to 15 days work; A:
and 1. Ensure that the kasambahay is qualified as
2. Reimbursement of the deployment expenses, if required by the Er;
the employment contract is terminated within 6 2. Secure the best terms and conditions of
months from employment. employment for the kasambahay;
3. Ensure that the employment agreement
Q: Can the employer inspect the belongings of the between the kasambahay and the employer
kasambahay before he/she leaves the household in stipulates the terms and conditions of
case of termination of employment? employment and all the benefits in accordance
with the IRR;
A: No. However, the Er and the kasambahay can 4. Provide a pre-employment orientation briefing
agree in their employment contract that an to the kasambahay and the Er about their rights
and responsibilities in accordance with this IRR;

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LABOR STANDARDS

5. Ensure that the kasambahay is not changed or Corp. She worked at the premises of the company.
required to pay any recruitment or placement When Erlinda filed an illegal dismissal case, Mr. Tan,
fees; the managing director of Remington Corp., claimed
6. Keep copies of employment contracts and that Erlinda was a domestic helper and not a regular
agreements pertaining to recruited kasambahay Ee of the corporation. Mr. Tan argued that it is only
which shall be made availabe during inspections when the househelper or domestic servant is
or whenever required by the DOLE or local assigned to certain aspects of the business of the Er
government officials; that such househelper or domestic servant may be
7. Assist the kasambahay in filing his/her considered as such an Ee. Is Erlinda a domestic or
complaints or grievances against the Ers; househelper?
8. Cooperate with government agencies in rescue
operations involving abused or exploited A: No, Erlinda is clearly not a househelper. A
kasambahay; and “househelper” or “domestic servant” under the IRR of
9. Assume joint and solidary liability with the Er for the LC is one who is employed in the Er’s home to
payment of wages, wage-related and other minister exclusively to the personal comfort and
benefits, including monthly contribution for SSS, enjoyment of the Er’s family. A househelper,
PhilHealth, and Pag-IBIG membership. domestic servant or laundrywoman in a home or in a
company staffhouse is different in the sense that in a
Q: What are the specific acts declared “unlawful” corporation or a single proprietorship engaged in
under the law? business or industry or any agricultural or similar
pursuit, service is being rendered in the staffhouses
A: or within the premises of the business of the Er. In
1. Employment of children below 15 years of age; such instance, they are Ees of the company or Er in
2. Withholding of the kasambahay’s wages; the business concerned, entitled to the privileges of a
3. Interference in the disposal of the kasambahay’s regular Ee. The mere fact that the househelper or
wages; domestic servant is working within the premises of
4. Requiring kasambahay to make deposits for loss the business of the employer and in relation to or in
or damage; connection with its business, as in its staffhouses for
5. Placing the kasambahay under debt bondage; its guest or even for its officers and Ees, warrants the
and conclusion that such househelper or domestic servant
6. Charging another household for temporarily is and should be considered a regular Ee and not a
performed tasks. househelper. (Remington Industrial vs. Castaneda,
G.R. Nos. 169295-96, Nov.20, 2006)
Note: Unlawful acts are punishable with an administrative
fine ranging from Php 10,000 to Php 40,000 to be imposed Q: NBC has a rest house and recreational facility in
by the DOLE Regional Offices. the highlands of Tagaytay City for the use of its top
executives and corporate clients. The rest house
Q: What other remedies for unlawful acts are staff includes a caretaker, two cooks and a
available under the law? laundrywoman. All of them are reported to the SSS
as domestic or household Ees of the resthouse and
A: The aggrieved party may file the appropriate civil recreational facility and not of NBC. Can NBC legally
or criminal action before the regular courts. consider the caretaker, cooks and laundrywoman as
domestic Ees of the rest house and not of NBC?
Q: Does the law afford remedy for abused or (2000 Bar Question)
exploited kasambahay?
A: No, they are not domestic Ees. They are the Ees of
A: The law mandates the conduct of immediate NBC because the rest house and recreational facility
rescue of abused or exploited kasambahay by the are business facilities which are for use of NBC’s top
municipal or city social welfare officer or a social executives and clients [Traders Royal Bank vs. NLRC,
welfare officer from DSWD, in coordination with the G.R. No. 127864, (1999)].
concerned barangay officials. The law sets out that
crimes or offenses committed under the Penal Code
and other criminal laws shall be filed with the regular
courts.

Q: Erlinda worked as a cook, preparing the lunch and


merienda of the Ees of Remington Industrial Sales

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75 FACULTY OF CIVIL LAW
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EMPLOYMENT OF HOMEWORKERS Q: What are the prohibitions against homework?

Q: Who are homeworkers? A: No homework shall be performed on:


1. Explosives, fireworks and similar articles;
A: They are those who perform in or about his own 2. Drugs and poisons; and
home any processing or fabrication of goods or 3. Other articles, the processing of which
materials, in whole or in part, which have been requires exposure to toxic substances. (Sec.
furnished directly or indirectly, by an Er and sold 13, Rule XIV, Book III, IRR)
thereafter to the latter.
Q: Can the Er make deductions on homeworker’s
Q: Who is the employer of a homeworker? earnings?

A: Includes any person, natural or artificial who, for A: GR: No Er, contractor or subcontractor shall make
his account or benefit, or on behalf of any person any deduction from the homeworker’s earnings
residing outside the country, directly or indirectly, or for the value of materials which have been lost,
through an Ee, agent contractor, subcontractor or any destroyed, soiled or otherwise damage.
other person:
XPNs: Unless the ff. conditions are met:
1. Delivers or causes to be delivered, any goods, 1. The homeworker is clearly shown to be
articles or materials to be processed or responsible for the loss or damage;
fabricated in or about a home and thereafter to 2. The Ee is given reasonable opportunity to
be returned or to be disposed of or distributed in show cause why deductions should not be
accordance with his directions. made;
2. Sells any goods, articles or materials to be 3. The amount of such deduction is fair and
processed or fabricated in or abut a home and reasonable and shall not exceed the actual
then rebuys them after such processing or loss or damages; and
fabrication, either by himself or through some 4. The deduction is made at such rate that the
other person. amount deducted does not exceed 20% of
the homeworker’s earnings in a week.
Q: What is the duty of the employer in case he
contracts with another the performance of his Q: Distinguish househelpers from homeworkers.
work?
A:
A: It shall be the duty of the Er to provide in such HOUSEHELPERS HOMEWORKERS
contract that the Ees or homeworkers of the Performs in or about his
contractor and the latter’s subcontractor shall be paid own home any processing
in accordance with the LC. or fabrication of goods or
Minister to the personal materials, in whole or in
Q: What is the liability of the employer if the needs and comfort of his part, which have been
contractor or subcontractor fails to pay the wages or Er in the latter’s home furnished directly or
earnings of his Ees? indirectly, by an Er and
sold thereafter to the
A: Er shall be jointly and severally liable with the latter.
contractor or sub-contractor to the workers of the
latter to the extent that such work is performed Q: Josie is the confidential secretary of the Chairman
under such contract, in the same manner as if the Ees of the Board of the bank. She is presently on
or homeworkers were directly engaged by the Er. maternity leave. In an arrangement where the
Chairman of the Board can still have access to her
Q: Can homeworkers form labor organizations? services, the bank allows her to work in her
residence during her leave. For this purpose, the
A: Yes. DO No. 5, replacing Rule XIV of the IRR Book 3 bank installed a fax machine in her residence, and
of the LC, authorizes the formation and registration gave her a cellphone and a beeper. Is Josie a
of labor organization of industrial homeworkers. It homeworker under the law? Explain. (2000 Bar
also makes explicit the Ers duty to pay and remit SSS, Question)
Philhealth and ECC premiums.

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LABOR STANDARDS

A: No, she is actually an office worker. She is not an 2. Physically fit for the occupation
industrial homeworker who accepts work to be 3. Possess vocational aptitude and capacity
fabricated or processed at home for a contractor, 4. Possess:
which work, when finished, will be returned to or a. The ability to comprehend, and
repurchased by said contractor. (Art. 155, LC) b. Follow oral and written instructions
5. The company must have an apprenticeship
APPRENTICES AND LEARNERS program duly approved by the DOLE.

Q: Who is an apprentice? Note: Trade and industry associations may recommend to


the SLE appropriate educational requirements for different
A: Any worker who is covered by a written occupations.
apprenticeship agreement with an individual Er or
any of the entities recognized under the LC. Q: When is an occupation deemed hazardous?

Q: What is apprenticeship? A:
1. Nature of work exposes worker to dangerous
A: It is practical training on the job supplemented by environmental elemental contaminants or work
related theoretical instruction involving a contract conditions
between an apprentice and an Er on an approved 2. Workers are engaged in construction work,
apprenticeable occupation. logging, fire fighting, mining, quarrying, blasting,
stevedoring, deep-sea fishing, and mechanized
Q: What is an apprenticeable occupation? farming
3. Workers are engaged in the manufacture or
A: A highly technical occupation which requires more handling of explosives and other pyrotechnic
than 3 months of practical training with theoretical products
instruction officially endorsed by a tripartite body and 4. Workers use, or are exposed to heavy or power-
approved for apprenticeship by the Authority. driven machinery or equipment.

Q: What is on the job training (OJT)? Q: Who may employ apprentices?

A: It is practical work experience through actual A:


participation in productive activities given to or 1. Only Ers in highly technical industries and
acquired by an apprentice. 2. Only in apprenticeable occupations approved by
SLE
Q: What are highly technical industries?
Q: What is the employment status of apprentices?
A: Those which are engaged in the application of
advanced technology. A: They are contractual workers whose length of
service depends on the term provided for in the
Q: What are related theoretical instructions? apprenticeship agreement. Thus, the employer is not
obliged to employ the apprentice after the
A: Technical information based on apprenticeship completion of his training.
standards approved by the Bureau.
Q: What are the conditions for employment of an
Note: Prior approval by TESDA (formerly DOLE) of the apprentice?
proposed apprenticeship program is a condition sine qua
non. Otherwise, an apprentice becomes a regular Ee. [Nitto A:
Enterprises vs. NLRC, G.R. No. 114337, (1995)]. 1. Should be an apprenticeable trade as determined
by TESDA
Q: What are the qualifications of an apprentice? 2. Prior approval by the DOLE of the proposed
apprenticeship program is a condition sine qua
A: non before an apprenticeship agreement can be
1. At least 15 years of age validly entered into. [Nitto Enterprises vs. NLRC
248 SCRA 654 (1995)]
Note: Those below 18 years of age shall not work in
hazardous occupations Note: One of the objectives of Title II (Training and
Employment of Special Workers) of the Labor Code is to

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77 FACULTY OF CIVIL LAW
Labor Law and Social Legislation
establish apprenticeship standards for the protection of 3. Apprenticeship agreements providing for
apprentices. An apprenticeship program should first be wage rates below the legal minimum wage,
approved by the Department of Labor and Employment which in no case shall start below 75% of the
(DOLE) before an apprentice may be hired, otherwise a
applicable minimum wage, may be entered
person hired will be considered a regular employee.
into only in accordance with Apprenticeship
[Century Canning Corp. vs. CA, 530 SCRA 501 (2007)]
programs duly approved by the SLE.
Q: What is the period of apprenticeship? 4. The DOLE shall develop standard model
programs of Apprenticeship. (Sec. 18, Rule
A: Must not exceed 6 months: VI, Book II, IRR)

1. 2 months/400 hours: Trades or occupations which Q: Who signs the apprenticeship agreement?
normally require 1 year or more for proficiency
2. 1 month/200 hours: Occupations and jobs which A: Every apprenticeship agreement shall be signed
require more than 3 months but less than 1 year by:
for proficiency. (Sec. 19, Rule VI, Book II, IRR) 1. The Er or his agent, or
2. An authorized representative of any of the
Q: What is the status of an apprentice hired after such recognized organizations, associations or
term? groups, and
3. The apprentice.
A: He is deemed a regular Ee. He cannot be hired as a
probationary Ee since the apprenticeship is deemed the Q: Who will sign if the apprentice is a minor?
probationary period.
A: An apprenticeship agreement with a minor shall be
Q: How much is the compensation of an apprentice? signed in his behalf by:
1. His parent or guardian, or if the latter is not
A: GR: It starts at not less than 75% of the statutory available,
st
minimum wage for the 1 6 months (except OJT); 2. An authorized representative of the DOLE.
thereafter, shall be paid in full minimum wage,
including the full COLA. Q: What are the rules on working scholars?

XPN: Art. 72 of the LC provides that the SLE may A: There is no Er-Ee relationship between students on
authorize the hiring of apprentices without one hand, and schools, where there is written
compensation whose training on the job is agreement between them under which the former
required: agree to work for the latter in exchange for the
1. by the school or; privilege to study free of charge. The student is not
2. by a training program curriculum or; considered an Ee. (Sec. 14, Rule IX, Book III, IRR)
3. as requisite for graduation or
4. as requisite for board examination. Q: Padilla entered into a written agreement with
Gomburza College to work for the latter in exchange
Note: GR: Apprenticeship programs shall be primarily for the privilege of studying in said institution. His
voluntary work was confined to keeping clean the lavatory
facilities of the school. One school day, he got into a
XPNs: Compulsory Apprenticeship: fist fight with a classmate, Monteverde, as a result
1. National security or economic development of which the latter sustained a fractured arm. Victor
so demand, the President may require filed a civil case for damages against him,
compulsory training impleading Gomburza College due to the latter's
2. Services of foreign technicians are utilized by
alleged liability as his employer. Under the
private companies in apprenticeable trades.
circumstances, could Gomburza College be held
liable by Victor Monteverde as Padilla’s employer?
Q: What are the rules regarding apprenticeship
(1997 Bar Question)
agreements?
A: Gomburza College is not liable for the acts of
A: Apprenticeship agreements, including the wage
Padilla because there is no Er-Ee relationship
rates of apprentices, shall:
between them. As provided in the IRR of the LC,
1. Conform to the rules issued by SLE.
"there is no Er-Ee relationship between students on
2. The period of Apprenticeship shall not
one hand, and schools, colleges, or universities on the
exceed 6 months.

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2013 GOLDEN NOTES 78
LABOR STANDARDS

other, where students work with the latter in Q: Who are learners?
exchange for the privilege to study free of charge,
provided the students are given real opportunity, A:
including such facilities as may be reasonable and 1. They are persons hired as trainees in semi-skilled
necessary to finish their chosen courses under such and other industrial occupations
arrangement." 2. Which are non-apprenticeable and
3. Which may be learned through practical training
Q: Who may terminate an Apprenticeship on the job in a relatively short period of time
agreement? 4. Which shall not exceed 3 months
5. Whether or not such practical training is
A: supplemented by theoretical instructions. (Sec.
1. Either party may terminate an agreement after 1a, Rule VII, Book II, IRR)
the probationary period but only for a valid
cause. Q: When may learners be employed?
2. It may be initiated by either party upon filing a
complaint or upon DOLE’s own initiative. A:
1. When no experienced worker is available
Q: Who may appeal the decision of the authorized 2. It is necessary to prevent curtailment of
agency of the DOLE? What is the period of appeal? employment opportunities; and
3. Employment does not create unfair competition
A: It may be appealed by any aggrieved person to the in terms of labor costs or impair or lower working
SLE within 5 days from receipt of the decision. standards.

Note: The decision of the SLE shall be final and executory. Q: What are the contents of a learnership
agreement?
Q: What is Exhaustion of Administrative Remedies
(EAR)? A: Any Er desiring to employ learners shall enter into
a learnership agreement with them, which
A: It is a condition precedent to the institution of agreement shall include:
action. (Sec. 32b, Rule VI, Book II, IRR) 1. The names and addresses of the learners;
2. The duration of the learnership period,
Q: How is the principle of Exhaustion of which shall not exceed 3 months;
Administrative Remedies applied in case of breach 3. The wages or salary rates of the learners
of apprenticeship agreement? which shall begin at not less than 75% of the
applicable minimum wage; and
A: Exhaustion of Administrative Remedies is a 4. A commitment to employ the learners if they
condition precedent to the institution of an action for so desire, as regular Ees upon completion of
enforcing application of agreement. the Learnership.

Q: Who shall settle differences arising out of Q: What is the qualification of a learner?
apprenticeship agreement?
A: Must be at least 15 years of age.
A: The plant apprenticeship committee shall have the
initial responsibility for settling differences arising out Note: Those below 18 years of age shall not work in
of Apprenticeship agreement. (Sec. 32b, Rule VI, Book hazardous occupations.
II, IRR)
Q: Who may employ learners?
Q: What is the procedure for the termination of
apprenticeship? A: Only Ers in semi-skilled and other industrial
occupations which are non-apprenticeable.
A: The party terminating shall:
1. Serve a written notice on the other at least 5 Q: What is the status of learners who have been
days before actual termination, allowed or suffered work during the first 2 months,
2. Stating the reason for such decision; and if training is terminated by the Er before the end of
3. A copy of said notice shall be furnished the the stipulated period through no fault of the
Apprenticeship Division concerned. Learner?

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79 FACULTY OF CIVIL LAW
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A: They are deemed regular Ees. (Sec. 4, Rule VII, 3. Injury


Book II, IRR) 4. Disease
5. Mental deficiency
6. Illness
DISTINCTIONS BETWEEN LEARNERSHIP AND
APPRENTICESHIP Q: What is the duration of the employment period
of persons with disability?
Q: Distinguish learnership from apprenticeship.
A: A: There is no minimum or maximum duration. It
Learnership Apprenticeship depends on the agreement but it is necessary that
Nature there is a specific duration stated.
Training on the job in
semi-skilled and other Training in trades which Q: May persons with disability be hired as
industrial occupation or are apprenticeable, that apprentices or learners?
trades which are non- is, practical training on
apprenticeable and which the job supplemented A: Yes, if their disability is not such as to effectively
may be learned thru by related theoretical impede the performance of job operations in the
practical training on the instruction for more particular occupations for which they are hired. (Art.
job in a relatively short than 3 months. 81, LC)
period of time.
Duration of training Q: Can persons with disability acquire the status of a
Min: 3 months regular Ee?
Max: 3 months
Max: 6 months
Commitment to employ A: Yes, if work is usually or necessarily desirable to
With commitment to the business. [Bernardo vs. NLRC, G.R No. 122917,
employ the learner as a (1999)]
regular Ee if he desires No commitment to hire
upon completion of Q: Who may employ persons with disability?
learnership
A: Ers in all industries: Provided, the disability is not
In case of pretermination of contract
such as to effectively impede the performance of job
Considered a regular Ee if
operations in the particular occupations for which
pre-termination occurs
they are hired.
after 2 months of training Worker not considered
and the dismissal is as regular Ee.
Q: When can persons with disability be employed?
without fault of the
Learner.
A:
Coverage
1. When their employment is necessary to prevent
Highly technical
Semi-skilled/Indus-trial curtailment of employment opportunities; and
industries and only in
occupations 2. When it will not create unfair competition in
industrial occupation
labor costs or lower working standards. (Art. 79,
There is a list of learnable LC)
No list
trades by TESDA
Written agreement Q: Does the mere fact that a worker has a disability,
Requires learnership Requires apprenticeship make him a disabled worker?
agreement agreement
A: No, because his disability may not impair his
PERSONS WITH DISABILITY (R.A. 7277 as amended efficiency or the quality of his work. If despite his
by R.A. 9442) disability he can still efficiently perform his work, he
would be considered a qualified disabled worker
DEFINITION entitled to the same treatment as qualified able-bodied
workers. [Bernardo v. NLRC, G.R. No. 122917, (1999)].
Q: Who are persons with disability?

A: Those whose earning capacity is impaired by:


1. Physical deficiency
2. Age

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2013 GOLDEN NOTES 80
LABOR STANDARDS

RIGHTS OF PERSONS WITH DISABILITY entitled to an additional deduction from their net
taxable income, equivalent to 50% of the direct costs
Q: What are the rights and privileges of disabled of the improvements or modifications. (Sec. 8, R.A.
workers? 7277)

A: Disabled workers shall have the following rights: Q: Distinguish persons with disability from differently
1. Equal opportunity for employment abled?
2. Sheltered employment (the Government shall
endeavour to provide them work if suitable A:
employment for disabled persons cannot be found Persons with disability Differently Abled
through open employment) Refers to all suffering from
3. Apprenticeship restriction of different
4. Vocational rehabilitation (means to develop the Earning capacity is abilities as a result of mental,
skills and potentials of disabled workers and enable impaired by age, or physical or sensory
them to compete in the labor market) physical or mental impairment to perform an
5. Vocational guidance and counselling deficiency or injury. activity in the manner or
within range considered
PROHIBITIONS ON DISCRIMINATION AGAINST normal for a human being.
PERSONS WITH DISABILITY Covers all activities or
Covers only workers.
endeavors.
Q: What is the prohibition on discrimination against
disabled workers? Basis: loss/impairment Basis: range of activity which
of earning capacity. is normal for a human being.
A: No disabled person shall be denied access to Restriction due to
opportunities for suitable employment. A qualified Loss due to injury or
impairment of
disabled employee shall be subject to the same terms physical or mental
mental/physical/ sensory
and conditions of employment and the same defect or age.
defect.
compensation, privileges, benefits, fringe benefits, If hired, entitled to
incentives or allowances as a qualified able-bodied 75% of minimum
person. wage. If qualified, entitled to all
terms and conditions as
Note: 5% of all casual emergency and contractual positions Subject to definite qualified able-bodied person.
in the Departments of Social Welfare and Development; periods of
Health; Education, Culture and Sports; and other
employment.
government agencies, offices or corporations engaged in
social development shall be reserved for disabled persons. Employable only when No restrictions on
(R.A. 7277) necessary to prevent employment.
curtailment of
INCENTIVES FOR EMPLOYERS employment Must get equal opportunity
opportunity. and no unfair competition.
Q: What are the incentives provided to employers
who are employing disabled workers?

A:
1. Entitled to an additional deduction, from their
gross income, equivalent to 25% of the total amount
paid as salaries and wages to disabled persons:
Provided, however, That such entities present proof
as certified by the DOLE that disabled persons are
under their employ: Provided further, That the
disabled Ee is accredited with the DOLE and the
Department of Health as to his disability, skills and
qualifications.

2. Private entities that improve or modify their


physical facilities in order to provide reasonable
accommodation for disabled persons shall also be

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TERMINATION OF EMPLOYMENT security guards to safeguard the persons and


belongings of hotel guests, among others. The
EMPLOYER-EMPLOYEE RELATIONSHIP security guards filled up Baron application form and
submitted the executed forms directly to the
Q: What determines the existence of an Security Department of Baron. The pay slips of the
employment relationship? security guards bore Baron's logo and showed that
Baron deducted the amounts for SSS premiums,
A: It is determined by law and not by contract [Insular medicare contributions and withholding taxes from
Life Assurance Co. Ltd. vs. NLRC, G.R. No. 119930, the wages of the secutiry guards. The assignments of
(1998)]. security guards, who should be on duty or on call,
promotions, suspensions, dismissals and award
Note: Taxi or jeepney drivers under the “boundary” system citations for meritorious services were all done upon
are Ee’s of the taxi or jeepney owners/operators; so also approval by Baron's chief security officer. After the
the passenger bus drivers and conductors [Jardin vs. NLRC
expiration of the contract with ASIA, Baron did not
and Goodman Taxi, G.R. No. 119268, (2000)].
renew the same and instead executed another
contract for security services with another agency.
Q: The employment contract stipulates that there is
ASIA placed the affected security guards on "floating
no employer-employee relationship between the
status" on "no work no pay" basis. Having been
parties. Is that valid?
displaced from work, the ASIA security guards filed a
case against the Baron for illegal dismissal, OT pay,
A: No.The existence of an Er-Ee relation is a question
minimum wage differentials, vacation leave and sick
of law and being such, it cannot be made the subject th
leave benefits, and 13 month pay. Baron denied
of agreement [Tabas vs. California Manufacturing
liability alleging that ASIA is the employer of the
Co., G.R. No. L-80680, (1989)].
security guards and therefore, their complaint for
illegal dismissal and payment of money claims
Q: Banco de Manila and the Ang Husay Janitorial
should be directed against ASIA. Nevertheless,
and Pest Control Agency entered into an
Baron filed a Third Party Complaint against ASIA.
Independent Contractor Agreement with the usual
stipulations specifically, the absence of employer-
Is there an employer-employee relationship
employee relationship, and the relief from liability
between the Baron, on one hand, and the ASIA
clauses. Can the bank, as a client, and the agency, as
security guards, on the other hand? Explain briefly.
an independent contractor, stipulate that no
(1999 Bar Question)
employer-employee relationship exists between the
bank and the employees of the Agency who may be
A: As a general rule, the security guards of a private
assigned to work in the Bank? Reason.
security guard agency are the Ees of the latter and
not of the establishment that has entered into a
A: Yes, they can stipulate provided that the
contract with the private security guard agency for
relationship is job contracting. However the
security services. But under the facts in the question,
stipulation cannot prevail over the facts and the laws.
Baron Hotel appear to have hired the security guards,
The existence of Er-Ee relationship is determined by
to have paid their wages, to have the power to
facts and law and not by stipulation of the parties.
promote, suspend or dismiss the security guards and
the power of control over them, namely, the security
It is axiomatic that the existence of an Er-Ee
guards were under orders of Baron Hotel as regard
relationship cannot be negated by expressly
their employment. Because of the above-mentioned
repudiating it in the management contract and
circumstances, Baron Hotel is the Er of the security
providing therein that the Ee is an independent
guards.
contractor when the terms of the agreement clearly
show otherwise. For, the employment status of a
Q: Assuming that ASIA is the employer, is the act of
person is defined and prescribed by law and not by
ASIA in placing the security guards on "floating
what the parties say it should be. In determining the
status" lawful? Why?
status of the management contract, the "four-fold
test" on employment has to be applied [Insular Life
A: It is lawful for a private security guard agency to
Assurance Co.. Ltd. vs. NLRC, G.R. No. 119930,
place its security guard on a "floating status" if it has
(1998)].
no assignment to give to said security guards. But if
the security guards are placed on a "floating status"
Q: ASIA executed a 1-year contract with the Baron
Hotel for the former to provide the latter with 20

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for more than 6 months, the security guards may FOUR- FOLD TEST
consider themselves as having been dismissed.
Q: What factors determine the existence of an
Q: Lacson was one of more than 100 employees who employer-employee relationship?
were terminated from employment due to the
closure of LBM Construction Corporation. LBM was a A: The “four–fold test”:
sister company of Lastimoso Construction, Inc. and 1. Selection and engagement of the employee;
RL Realty & Dev’t Corp. All three entities formed 2. Payment of wages;
what came to be known as the Lastimoso Group of 3. Power of dismissal; and
Companies. The three corporations were owned and 4. Power of control (Azucena, Vol. I, p.158)
controlled by members of the Lastimoso family;
their incorporators and directors all belonged to the Q: What is control test?
Lastimoso family. The three corporations were
engaged in the same line of business, under one A: Under the control test, there is an Er-Ee
management, and used the same equipment relationship when the person for whom the services
including manpower services. Lacson and his co-Ees are performed reserves the right to control not only
filed a complaint with the Labor Arbiter against the end achieved but also the manner and means
LBM, RL Realty and Lastimoso Construction to hold used to achieve that end [Television and Production
them jointly and severally liable for back wages and Exponents Inc. vs.Servana (542 SCRA 578)].
separation pay. Lastimoso Construction, Inc. RL
Realty & Development Corporation interposed a Q: What kind of control should be exercised by the
Motion to Dismiss contending that they are juridical employer?
entitles with distinct and separate personalities
from LBM Construction Corporation and therefore, A: Not all forms of control are indicative of Er-Ee
they cannot be held jointly and severally liable for relationship. Where the degree of control is both the
the money claims of workers who are not their result and the means, there is an employer-employee
employees. Rule on the motion to dismiss. Should it relationship. Where the control is merely to results,
be granted or denied? Why? (1999 Bar Question) there is only an independent contractor relationship.
If there is a degree of control for compliance with a
A: It is very clear that even if LBM Construction government regulation – that is not the control
company, Lastimoso Construction Company, Inc. and referred to. (Insular life vs. NLRC)
RL Realty & Dev’t Corp. all belong to the Lastimoso
family and are engaged in the same line of business Note: However, in certain cases the control test is not
under one management and used the same sufficient to give a complete picture of the relationship
equipment including manpower services, these between the parties, owing to the complexity of such a
relationship where several positions have been held by the
corporations were separate juridical entities. Thus,
worker. The better approach is to adopt the two-tiered test
only the LBM Construction Corporation is the Er of
[Francisco vs. NLRC, G.R. No. 170087, (2006)].
Teofilo Lacson. The other corporation do not have
any Er-Ee relations with Lacson. The case in question This two-tiered test would provide us with a framework of
does not include any fact that would justify piercing analysis, which would take into consideration the totality of
the veil of corporate fiction of the other corporations circumstances surrounding the true nature of the
in order to protect the rights of workers. In a case relationship between the parties. This is especially
[Concept Builders, Inc. vs. NLRC, G.R. No. 108734, appropriate in this case where there is no written
(1996)] the SC ruled that it is a fundamental principle agreement or terms of reference to base the relationship
on and due to the complexity of the relationship based on
of corporation law that a corporation is an entity
the various positions and responsibilities given to the
separate and distinct from its stockholders and from
worker over the period of the latter’s employment
other corporations to which it may be connected. But [Francisco vs. NLRC, G.R. No. 170087, (2006)].
this separate and distinct personality of a corporation
is merely a fiction created by law for convenience and Q: Genesis entered into a Career’s Agent Agreement
to promote justice. So, when the notion of separate with EmoLife Insurance Company, a domestic
juridical personality is used to defeat public corporation engaged in insurance business. In the
convenience, justify wrong, protect fraud or defend Agreement, it provides that the agent is an
crime, or is used as a device to defeat the labor laws, independent contractor and nothing therein shall be
this separate personality of the corporation maybe construed or interpreted as creating an employer-
disregarded or the veil of corporate fiction pierced. employee relationship. It further provides that the
agent must comply with three requirements: (1)

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compliance with the regulations and requirements Q: What is the proper standard for economic
of the company; (2) maintenance of a level of dependence?
knowledge of the company's products that is
satisfactory to the company; and (3) compliance A: The proper standard is whether the worker is
with a quota of new businesses. However, EmoLife dependent on the alleged Er for his continued
insurance company terminated Genesis’ services. employment in that line of business.
Genesis filed an illegal dismissal complaint alleging
therein that an employer-employee relationship The determination of the relationship between Er and
exists and that he was illegally dismissed. Is he an Ee depends upon the circumstances of the whole
employee of the Insurance Company? economic activity, such as:
1. The extent to which the services performed
A: Genesis is not an Ee of EmoLife Insurance are an integral part of the Er’s business
Company. Generally, the determinative element is 2. The extent of the worker’s investment in
the control exercised over the one rendering the equipment and facilities;
service. The concept of “control” in LC has to be 3. The nature and degree of control exercised
compared and distinguished with “control” that must by the Er;
necessarily exist in a principal-agent relationship. The 4. The worker’s opportunity for profit and loss;
Er controls the Ee both in the results and in the 5. The amount of initiative, skill, judgment, or
means and manner of achieving this result. The foresight required for the success of the
principal in an agency relationship, e.g. insurance claimed independent enterprise;
agent, on the other hand, also has the prerogative to 6. The permanency and duration of the
exercise control over the agent in undertaking the relationship between the worker and Er; and
assigned task based on the parameters outlined in 7. The degree of dependency of the worker
the pertinent laws. In the present case, the upon the Er for his continued employment in
Agreement fully serves as grant of authority to that line of business. [Francisco vs. NLRC,
Genesis as EmoLife’s insurance agent. This agreement G.R. No. 170087, (2006)]
is supplemented by the company’s agency practices
and usages, duly accepted by the agent in carrying Q: When should the four-fold test and the two-
out the agency. Foremost among these are the tiered test be properly applied?
directives that the principal may impose on the agent
to achieve the assigned tasks, to the extent that they A: Present Phililippine law recognizes a two-tiered
do not involve the means and manner of undertaking test. The first tier of the test is the four-fold test. The
these tasks. The law likewise obligates the agent to second tier is the economics of the relationship test.
render an account; in this sense, the principal may But the latter test is used if and only if there is going
impose on the agent specific instructions on how an to be harshness in the results because of the strict
account shall be made, particularly on the matter of application of the four-fold test [Francisco vs. NLRC,
expenses and reimbursements. To these extents, G.R. No. 170087, (2006)].
control can be imposed through rules and regulations
without intruding into the labor law concept of KINDS OF EMPLOYMENT
control for purposes of employment [Gregorio
Tongko vs. ManuLife Insurance Company, G.R. No. PROBATIONARY EMPLOYMENT
167622, (2010)].
Q: What is probationary employment?
Q: What is the two-tiered test?
A: Employment where the Ee, upon his engagement:
A: 1. Is made to undergo a trial period
1. The putative Er’s power to control the Ee with 2. During which the Er determines his fitness to
respect to the means and methods by which the qualify for regular employment,
work is to be accomplished; and 3. Based on reasonable standards made known
2. The underlying economic realities of the activity to the Ee at the time of engagement. (Sec 6,
or relationship. Rule I, Book VI, IRR)

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Q: What are the characteristics of probationary IRR) probationary Ees may be dismissed for cause before
employment? end of the probationary period.

After the lapse of the probationary period (6 months), Ee


A:
becomes regular.
1. It is an employment for a trial period;
2. It is a temporary employment status prior to
Q: May the employer and employee validly agree to
regular employment;
extend the probationary period beyond six months?
3. It arises through a contract with the following
elements: A: Yes. Such an extension may be lawfully agreed
a. The Ee must learn and work at a particular upon, despite the restrictive language of Art. 281. A
type of work voluntary agreement extending the original
b. Such work calls for certain qualifications probationary period to give the Ee a second chance to
c. The probation is fixed pass the probation standards constitutes a lawful
d. The Er reserves the power to terminate exception to the statutory limit [Mariwasa
during or at the end of the trial period Manufacturing, Inc. vs. Leogardo, Jr., G.R. No. 74246,
e. And if the Ee has learned the job to the (1989)].
satisfaction of the Er, he becomes a regular
Ee. Note: By voluntarily agreeing to such an extension, the Ee
waived any benefit attaching to the completion of the
Q: What are the rules on probationary employment? period if he still failed to make the grade during the period
of extension [Mariwasa Mfg. Inc. vs. Hon. Leogardo, G.R.
No. 74246, (1989)].
A:
1. Er shall make known to the Ee at the time he is
Q: When is the extension of probationary period
hired, the standards by which he will qualify as a
allowed?
regular Ee;
2. An Ee allowed to continue work after the
A: Extension is allowed only when:
probationary period shall be considered a regular
1. Nature of the job requires a longer period, or
Ee;
2. If it is a company policy that the period of
3. During the probationary period, the Ee enjoys
probationary employment should be an extended
security of tenure; his services can only be
period
terminated for just or authorized causes.
Note: The extension of period should always be reasonable;
Q: What is the period of probationary employment? Such that, the nature of the work so requires and that it is
the amount of time required for an ordinary worker to
A: GR: It shall not exceed 6 months. learn the job.

XPNs: Q: Is double or successive probation allowed?


1. Covered by an Apprenticeship or Learnership
agreement stipulating a different period A: No. The evil sought to be prevented is to
2. Voluntary agreement of parties (especially discourage scheming Ers from using the system of
when the nature of work requires a longer double or successive probation to circumvent the
period) mandate of the law on regularization and make it
3. The Er gives the Ee a second chance to pass easier for them to dismiss their Ees [Holiday Inn
the standards set. [Mariwasa Manila vs. NLRC, G.R. No. 109114, (2003)].
Manufacturing, Inc. vs. Leogardo, Jr., G.R.
No. 74246, (1989)]. Q: Michelle Miclat was employed on a probationary
4. When the same is required by the nature of basis as marketing assistant by Clarion Printing
the work, e.g. the probationary period set House but during her employment she was not
for professors, instructors and teachers is 3 informed of the standards that would qualify her as
consecutive years of satisfactory service a regular employee. 30 days after, Clarion informed
pursuant to DOLE Manual of Regulations for Miclat that her employment contract had been
Private Schools. terminated without any reason. Miclat was
5. When the same is established by company informed that her termination was part of Clarion’s
policy. cost-cutting measures. Is Miclat considered as a
regular employee and hence entitled to its benefits?
Note: Period of probation shall be reckoned from the date
the Ee actually started working. (Sec.6 [b], Rule I, Book VI,

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A: Yes. In all cases of probationary employment, the


Er shall make known to the Ee the standards under How to resolve the conflict between the Alcira and
which he will qualify as a regular Ee at the time of his Mitsubishi Motors case:
engagement. Where no standards are made known
to the Ee at that time, he shall be deemed a regular 1. Statutory Construction – The latter case prevails
Ee. In the case at bar, she was deemed to have been (Mitsubishi Motors); or
hired from day one as a regular Ee [Clarion Printing 2. Rule more favorable to the Ee – use the
House Inc., vs. NLRC, G.R. No. 148372, (2005)]. computation which would amount to granting
the subject Ee regular employment status (based
Q: What is the obligation of the employer to his on Constitutional and statutory provisions for the
probationary employees? liberal interpretation of labor laws)

A: There is obligation on the part of Er to inform Q: What is the purpose of the probation period?
standards for regularization at the time of
engagement. The failure to inform has the effect that A: To afford the Er an opportunity to observe the
upon the expiry of the probationary employment, fitness of a probationary Ee at work.
with or without the period provided for in the
contract, the worker is deemed to be regular. Q: In what instances is a probationary employee
deemed a regular employee?
Q: Middleby Phils. Corp. hired Alcira as engineering
support services supervisor on a probationary basis A:
for six months. Apparently unhappy with Alcira’s 1. If he is allowed to work after a probationary
performance, Middleby terminated his services. period. (Art. 281, LC)
Alcira contends that he was already a regular 2. If no standards, under which he will qualify as a
employee when he was terminated. According to regular Ee, are made known to him at the time of
Alcira’s computation, since Art. 13 of the NCC his engagement. (Sec. 6 [d], Rule I, Book VI, IRR)
provides that 1 month is composed of 30 days, 6
th
months totaling 180 days, then his 180 day would Q: What are the grounds for terminating
fall on Nov. 16, 1996 making him a regular Ee before probationary employment?
his termination. Is the contention of the petitioner
in the computation of six months correct? A:
1. Just/authorized causes
A: No, the computation of the 6-month probationary 2. When he fails to qualify as a regular Ee in
period is reckoned from the date of appointment up accordance with reasonable standards made
th
to the same calendar date of the 6 month following. known by the Er to the Ee at the time of his
In short, since the number of days in each particular engagement [ICMC vs. NLRC, G.R. No. 72222,
month was irrelevant, Alcira was still a probationary (1989)] (see Art. 281, LC)
Ee when Middleby opted not to “regularize” him on
Nov. 20, 1996 [Alcira vs. NLRC, G.R. No. 149859, Note: If Pre-termination of probationary contract is due to
(2004)]. the valid causes, the employer is not liable to pay the
monetary value of the unexpired portion of the
Note: In Mitsubishi Motors vs. Chrysler Phils. Labor Union, employment.
G.R. No. 148738, June 29, 2004, the SC ruled in this wise:
While probationary Ees do not enjoy permanent status,
“Applying Art. 13 of the NCC, the probationary they are afforded the security of tenure protection of the
period of 6-months consists of 180 days. This is in Constitution. Consequently, they cannot be removed from
conformity with Art. 13(1) of the NCC. The number their positions unless for cause. Such constitutional
of months in the probationary period, 6, should protection, however, ends upon the expiration of the
then be multiplied by the number of days within a period stated in their probationary contract of
month, 30; hence, the period of 180 days. As employment. Thereafter, the parties are free to renew the
clearly provided for the in last par. of Art. 13, in contract or not [CSA vs. NLRC, G.R. No. 87333, (1991)].
computing a period, the first day shall be excluded
and the last day included. Thus, the 180 days
commenced on May 27, 1996, and ended on Nov.
23, 1996. The termination letter dated Nov. 25,
1996 was served on Paras only on Nov. 26, 1996.
He was, by then already a regular Ee of the
company under Art. 281 of the LC.”

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Q: What are the limitations on the employer’s of satisfactory service, as the case may be. (Sec. 117 of
power to terminate a probationary employment the Manual of Regulations for Provate Higher Education)
contract?
Note: An academic teaching personnel, who does not
possess the minimum academic qualifications under Secs.
A:
35 and 36 of the Manual of Regulations for Provate Higher
1. The power must be exercised in accordance with
Education shall be considered as a part-time Ee, and
the specific requirements of the contract; therefore can not avail of the status and privileges of a
2. If a particular time is prescribed, the termination probationary employment. A part-time Ee can not acquire a
must be within such time and if formal notice is regular permanent status, and hence, may be terminanted
required, then that form must be used; when a qualified etacher becomes available. (Manual of
3. The Er’s dissatisfaction must be real and in good Regulations for Provate Higher Education)
faith, not feigned so as to circumvent the
contract or the law; and Q: Colegio de San Agustin (CSA) hired the Gela Jose
4. There must be no unlawful discrimination in the as a grade school classroom teacher on a
dismissal. probationary basis for SY ‘84 – ‘85. Her contract was
renewed for SY’s ‘85-‘86 and ‘86-‘87. On Mar. 24,
Note: The probationary Ee is entitled to procedural due ‘87, the CSA wrote the Gela that "it would be in the
process prior to dismissal from service. best interest of the students and their families that
she seek employment in another school or business
Q: Ron Cruz was employed as gardener by Manila concern for next school year." Notwithstanding the
Hotel on “probation status” effective Sept. 22, 1976. said notice, the CSA still paid Gela her salary for
The appointment signed by Cruz provided for a 6 April 15 to May 15, 1987. On April 6, ‘87, Gela wrote
month probationary period. On Mar. 20, 1977, or a the CSA and sought reconsideration but she received
day before the expiration of the probationary no reply. Thereafter, she filed a complaint for illegal
period, Cruz was promoted to lead gardener dismissal. Was Gela illegally dismissed?
position. On the same day, Cruz’ position was
“abolished” by Manila Hotel allegedly due to A: No. The Faculty Manual of CSA underscores the
economic reverses or business recession, and to completion of three years of continuous service at
salvage the enterprise from imminent danger of CSA before a probationary teacher acquires tenure.
collapse. Was Cruz illegally dismissed? Hence, the Gela cannot claim any vested right to a
permanent appointment since she had not yet
A: Yes, there is no dispute that as a probationary Ee, achieved the prerequisite 3-year period under the
Cruz had but limited tenure. Although on Manual of Regulation for Private Schools and the
probationary basis, however, Cruz still enjoys the Faculty Manual of CSA.
constitutional protection on security of tenure.
During his tenure of employment, therefore, or In the instant case where the CSA did not wish to
before his contract expires, Cruz cannot be removed renew the contract of employment for the next
except for cause as provided for by law. school year, Gela has no ground to protest. She was
not illegally dismissed. Her contract merely expired
What makes Cruz’ dismissal highly suspicious is that it [CSA vs. NLRC, G.R No. 87333, (1991)].
took place at a time when he needs only but a day to
be eligible as a regular Ee. That he is competent finds Q: During their probationary employment, eight
support in his being promoted to a lead gardener in employees were berated and insulted by their
so short span of less than 6 months. By terminating supervisor. In protest, they walked out. The
his employment or abolishing his position with but supervisor shouted at them to go home and never
only one day remaining in his probationary to report back to work. Later, the personnel
appointment, the hotel deprived Cruz of qualifying as manager required them to explain why they should
a regular Ee with its concomitant rights and not be dismissed from employment for
privileges. [Manila Hotel Corp. vs. NLRC, G.R. No. L- abandonment and failure to qualify for the
53453, (1986)] positions applied for. They filed a complaint for
illegal dismissal against their employer. As the
Q: What are the requirements for probationary Labor Arbiter, how will you resolve the case? (2006
employment of private school teachers? Bar Question)

A: The probationary employement of academic A: As the LA, I will resolve the case in favor of the 8
teching personnel shall not be more than a period of probationary Ees due to the following:
6 consecutive semesters or 9 consecutive trimesters 1. Probationary Ees also enjoy security of

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tenure [ Bibosovs.VictoriaMilling,G.R.No.L- Q: What is the test to determine Regular


44360, (1977)]. Employment?
2. In all cases involving Ees on probationary
status, the Er shall make known to the Ee at A:
the time he is hired, the standards by which 1. The primary standard of determining regular
he will qualify for the positions applied for. employment is the reasonable connection
3. The filing of the complaint for illegal between the particular activity performed by the
dismissal effectively negates the Er’s theory Ee to the usual trade or business of the Er. The
of abandonment [Rizada vs. NLRC, G.R. No. test is whether the former is usually necessary or
96982, (1999)]. desirable in the usual business or trade of the Er.
4. The order to go home and not to return to [(De Leon vs. NLRC, G.R. No. 70705, ( 1989)]
work constitutes dismissal from
employment. Note: The connection can be determined by
5. The 8 probationary Ees were terminated considering the nature of the work performed and its
without just cause and without due process. relation to the scheme of the particular business or
trade in its entirety. [Highway Copra Traders vs. NLRC,
G.R. No. 108889, (1998)]
In view of the foregoing, I will order reinstatement to
their former positions without loss of seniority rights
2. Also, the performance of a job for at least a year
with full back wages, plus damages and attorney’s
is sufficient evidence of the job’s necessity if not
fees.
indispensability to the business. This is the rule
even if its performance is not continuous and
REGULAR EMPLOYMENT
merely intermittent. The employment is
considered regular, but only with respect to such
Q: What is regular employment?
activity and while such activity exists [Universal
Robina Corp. vs. Catapang, G.R. No. 164736,
A:
(2005)].
1. An employment shall be deemed to be regular
where the Ee has been engaged to perform
Note: The status of regular employment attaches to the
activities which are usually necessary or desirable casual Ee on the day immediately after the end of his first
in the usual business or trade of the Er, year of service. The law does not provide the qualification
theprovisions of written agreements to the that the Ee must first be issued a regular appointment or
contrary notwithstanding and regardless of the must first be formally declared as such before he can
oral agreements of the parties. (Sec. 5 [a], Rule I, acquire a regular status [Aurora Land Projects Corp. vs.
Book VI, IRR) NLRC, G.R. No. 114733,(1997)].
2. Any Ee who has rendered at least one year of
service, whether such service is continuous or Q: Is the mode of compensation determinative of
broken, shall be considered a regular Ee with regular employment?
respect to the activity in which he is employed
and his employment shall continue while such A: No, while the Ees mode of compensation was on a
activity exists. (Sec. 5 [b], Rule I, Book VI, IRR) “per piece basis” the status and nature of their
employment was that of regular Ees [Labor Congress
Note: Regularization is not a management prerogative; of the Phils vs. NLRC, G.R. No. 123938, (1998)].
rather, it is the nature of employment that determines it. It
is a mandate of the law. [PAL vs. Pascua,G.R. No. 143258, Q: When does Art. 280 not apply?
(2003)]
A: It does not apply in case of OFWs.
Regular employment does not mean permanent
employment. A probationary Ee becomes a regular Ee after
Note: Seafarers cannot be considered as regular Ees. Their
6 months. A regular Ee may only be terminated for
employment is governed by the contracts they sign every
just/authorized causes.
time they are hired and their employment terminated
when the contract expires. Their employment is fixed for a
The practice of entering into employment contracts which
certain period of time [Ravago vs. Esso Eastern Maritime
would prevent the workers from becoming regular should
Ltd., G.R. No. 158324, (2005)].
be struck down as contrary to public policy and morals.
[Universal Robina Corp. vs. Catapang, G.R. No. 164736,
(2005)] Q: Moises was employed by La Tondeña at the
maintenance section of its Engineering Department
paid on a daily basis through petty cash vouchers.

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His work consisted mainly of painting company operation of law, one year after he was employed in
building and equipment and other odd jobs relating 1953 and subsequently in 1982 [Aurora Land Projects
to maintenance. After a service of more than 1 year, Corp. vs. NLRC, G.R. No. 114733, (1997)].
Moises requested that he be included in the payroll
of regular workers, instead of being paid through Q: A total of 43 employees who are deaf-mutes
petty cash vouchers. Instead, La Tondeña dismissed were hired and re-hired on various periods by Far
Moises and claimed that Moises was contracted on East Bank and Trust Co. as money sorters and
a casual basis specifically to paint certain company counters through a uniformly worded agreement
buildings and that its completion terminated called “Employment Contract for Handicapped
Moises’ employment. Can Moises be considered as a Workers.” The company disclaimed that these
regular employee? employes were regular employees and maintained
among others that they are a special class of
A: Yes, the law demands that the nature and entirety workers, who were hired temporarily under a
of the activities performed by the Ee be considered. special employment arrangement which was a result
Here, the painting and maintenance work given to of overtures made by some civic and political
Moises manifests a treatment consistent with a personalities to the Bank. Should the deaf-mute
maintenance man and not just a painter, for if his job employees be considered as regular employees?
was only to paint a building there would be no basis
for giving him other work assignments in-between A: Yes. The renewal of the contracts of the
painting activities. handicapped workers and the hiring of others leads
to the conclusion that their tasks were beneficial and
It is not tenable to argue that the painting and necessary to the bank. It also shows that they were
maintenance work of Moises are not necessary in La qualified to perform the responsibilities of their
Tondeña’s business of manufacturing liquors; positions; their disability did not render them
otherwise, there would be no need for the regular unqualified or unfit for the tasks assigned to them.
maintenance section of the company’s engineering
department [De Leon vs. NLRC, G.R. No. 70705, The Magna Carta for Disabled Persons mandates that
(1989)]. a qualified disabled Ee should be given the same
terms and conditions of employment as a qualified
Q: Honorio Dagui was hired by Doña Aurora Suntay able-bodied person. The fact that the Ees were
Tanjangco in 1953 to take charge of the qualified disabled persons necessarily removes the
maintenance and repair of the Tanjangco employment contracts from the ambit of Art. 80.
apartments and residential bldgs. He was to perform Since the Magna Carta accords them the rights of
carpentry, plumbing, electrical and masonry work. qualified able-bodied persons, they are thus covered
Upon the death of Doña Aurora Tanjangco in 1982, by Art. 280 of the LC [Bernardo vs. NLRC, G.R. No.
her daughter, Teresita Tanjangco Quazon, took over 122917, (1999)].
the administration of all the Tanjangco properties,
and dismissed Dagui. Is Honorio Dagui a regular Q: Coca-Cola Bottlers Phils, Inc., (CCBPI) engaged the
employee? services of the workers as “sales route helpers” for a
period of 5 months. After 5 months, the workers
A: Yes. The jobs assigned to Dagui as maintenance were employed by the company on a day-to-day
man, carpenter, plumber, electrician and mason were basis. According to the company, the workers were
directly related to the business of the Tanjangco’s as hired to substitute for regular route helpers
lessors of residential and apartment bldgs. whenever the latter would be unavailable or when
Moreover, such a continuing need for his services by there would be an unexpected shortage of
the Tanjangcos is sufficient evidence of the necessity manpower in any of its work places or an unusually
and indispensability of his services to their business high volume of work. The practice was for the
or trade. workers to wait every morning outside the gates of
the sales office of the company, if thus hired, the
Dagui should likewise be considered a regular Ee by workers would then be paid their wages at the end
the mere fact that he rendered service for the of the day. Should the workers be considered as
Tanjangcos for more than one year, that is, beginning regular Ees of CCBPI?
1953 until 1982, under Doña Aurora; and then from
1982 up to June 8, 1991 under the daughter, for a A: Yes, the repeated rehiring of the workers and the
total of 29 and 9 years respectively. Owing to Dagui's continuing need for their services clearly attest to the
length of service, he became a regular Ee, by necessity or desirability of their services in the regular

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conduct of the business or trade of the company. The Note: Where the employment of a project Ee is extended
fact that the workers have agreed to be employed on long after the supposed project has been finished, the Ees
such basis and to forego the protection given to them are removed from the scope of project Ees and considered
as regular Ees.
on their security of tenure, demonstrate nothing
more than the serious problem of impoverishment of
Repeated hiring on a project-to-project basis is considered
so many of our people and the resulting unevenness
necessary and desirable to the business of the Er. The Ee is
between labor and capital [Magsalin & Coca-Cola vs. regular [Maraguinot vs. NLRC, G.R. No. 120969, (1998)].
N.O.W.M., G.R. No. 148492, (2003)].
Q: What are the indicators of project employment?
Q: Metromedia Times Corp. entered, for the fifth
time, into an agreement with Efren Paguio, A: Either one or more of the following circumstances,
appointing him to be an account executive of the among others, may be considered as indicators that
firm. He was to solicit advertisements for “The an Ee is a project Ee. [Hanjin vs. Ibañez, G.R. No.
Manila Times.” The written contract between the 170181, (2008)]
parties provided that, “You are not an employee of
the Metromedia Times Corp. nor does the company a. The duration of the specific/identified
have neither any obligations towards anyone you undertaking for which the worker is engaged is
may employ, nor any responsibility for your reasonably determinable;
operating expenses or for any liability you may b. Such duration, as well as the specific
incur. The only rights and obligations between us work/service to be performed, is defined in an
are those set forth in this agreement. This employment agreement and is made clear to the
agreement cannot be amended or modified in any Ee at the time of hiring;
way except with the duly authorized consent in
writing of both parties.” Is Efren Paguio a regular Note: Absent any other proof that the project Ees
employee of Metromedia Times Corporation? were informed of their status as such, it will be
presumed that they are regular Ees.
A: Yes, he performed activities which were necessary
and desirable to the business of the Er, and that the c. The work/service performed by the Ee is in
same went on for more than a year. He was an connection with the particular project/
account executive in soliciting advertisements, clearly undertaking for which he is engaged;
necessary and desirable, for the survival and d. The Ee, while not employed and awaiting
continued operation of the business of the corp. engagement, is free to offer his services to any
other Er;
The corporation cannot seek refuge under the terms e. The termination of his employment in the
of the agreement it has entered into with Efren particular project/undertaking is reported to the
Paguio. The law, in defining their contractual DOLE Regional Office having jurisdiction over the
relationship, does so, not necessarily or exclusively workplace within 30 days following the date of
upon the terms of their written or oral contract, but his separation from work, using the prescribed
also on the basis of the nature of the work of Efren form on Ee’s termination, dismissal or
has been called upon to perform. A stipulation in an suspensions;
agreement can be ignored as and when it is utilized f. An undertaking in the employment contract by
to deprive the Ee of his security of tenure [Paguio vs. the Er to pay completion bonus to the project Ee
NLRC, G.R. No. 147816, (2003)]. as practiced by most construction companies

PROJECT EMPLOYMENT Q: What are the requisites in determining whether


an employee is a project employee?
Q: What is project employment?
A:
A: Employment that has been fixed for a specific 1. The project Ee was assigned to carry out a
project or undertaking the completion for which has specific project or undertaking, and
been determined at the time of engagement of the 2. The duration and scope of which were specified
Ee (Sec. 5[a], Rule I, Book VI, IRR). The period is not at the time the Ee was engaged for that project.
the determining factor, so that even if the period is [Imbuido vs. NLRC, G.R. No. 114734, (2000)]
more than 1 year, the Ee does not necessarily 3. The Ee must have been dismissed every after
become regular. completion of his project or phase

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4. Report to the DOLE of Ee’s dismissal on account


of completion of contract [Policy Inst. No. 20; A work pool may exist although the workers in the pool do
D.O. 19 (1997)] 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
Q: The employer hires the employees whereby their
project. Although primarily applicable to regular seasonal
employment would automatically expire upon the workers, this set-up can likewise be applied to project
completion of a project. When the employer workers insofar as the effect of temporary cessation of
proceeded to serve notices of termination of work is concerned. This is beneficial to both the Er and Ee
employment when the project was about to be for it prevents the unjust situation of “coddling labor at the
completed, the employees filed a notice of strike for expense of capital” and at the same time enables the
mass termination. Is the action of the employees workers to attain the status of regular Ees [Maraguinot vs.
correct? NLRC, G.R. No. 120969, (1998)].

A: No. The litmus test to determine whether an Q: What is the “day certain” rule?
individual is a project Ee lies in setting a fixed period
of employment involving a specific undertaking which A: It states that a project employment that ends on a
completion or termination has been determined at certain date does not end on an exact date but upon
the time of the particular Ee’s engagement. In this the completion of the project.
case, as previously adverted to, the officers and the
members of the Union were specifically hired as Q: Are project Ees entitled to separation pay?
project Ees for Leyte Geothermal Power Project.
Consequently, upon the completion of the project or A: GR: Project Ees are not entitled to separation pay
substantial phase thereof, the officers and the if they are terminated as a result of the completion
members of the Union could be validly terminated. project.
[Leyte Geothermal Power Progressive Employees
Union v. Philippine National Oil Company, G.R. No. XPN: If the projects they are working on have not
170351, (2011)]. yet been completed when their services are
terminated; project Ees also enjoy security of
Q: What is a project? tenure during the limited time of their
employment [De Ocampo vs. NLRC, G.R. No.
A: A "project" has reference to a particular job or 81077, (1990)].
undertaking that may or may not be within the
regular or usual business of the Er. In either case, the Q: Roger Puente was hired by Filsystems, Inc.,
project must be distinct, separate and identifiable initially as an installer and eventually promoted to
from the main business of the Er, and its duration mobile crane operator, and was stationed at the
must be determined or determinable [PAL vs. NLRC, company’s premises. Puente claimed in his
G.R. No. 125792, (1998)]. complaint for illegal dismissal, that his work was
continuous and without interruption for 10 years,
Q: Can a project employee or a member of a work and that he was dismissed from his employment
pool acquire the status of a regular employee? without any cause. Filsystems on its part averred
that Puente was a project employee in the
A: Yes, when the following concur: company’s various projects, and that after the
completion of each project, his employment was
1. There is a continuous rehiring of project Ee’s terminated, and such was reported to the DOLE. Is
even after cessation of a project; and Roger Puente a regular employee?
2. The tasks performed by the alleged “project Ee”
are vital, necessary and indispensable to the A: No, Puente is a project Ee. The contracts of
usual business or trade of the Er [D.M. Consunji, employment of Puente attest to the fact that he was
Inc. v. JAMIN, G.R. No. 192514, (2012)]. hired for specific projects. His employment was
coterminous with the completion of the projects for
Note: The length of time during which the Ee was which he had been hired. Those contracts expressly
continuously re-hired is not controlling, but merely serves provided that his tenure of employment depended on
as a badge of regular employment. Enero and Maraguinot the duration of any phase of the project or on the
have been employed for a period of not less than 2 years completion of the construction projects.
and have been involved in at least 18 projects. These facts Furthermore, the company regularly submitted to the
are the basis in considering them as regular Ees of the labor dep’t reports of the termination of services of
company. project workers. Such compliance with the

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reportorial requirement confirms that Puente was a Q: Can seasonal employees be considered as regular
project Ee. employees?

The mere rehiring of Puente on a project-to-project A: Yes. The fact that Seasonal Ees do not work
basis did not confer upon him regular employment continuously for one whole year but only for the
status. “The practice was dictated by the practical duration of the season does not detract from
consideration that experienced construction workers considering them in regular employment. Seasonal
are more preferred.” It did not change his status as a workers who are called to work from time to time
project Ee. [Filipinas Pre-Fabricated Building Systems and are temporarily laid off during off-season are not
(FILSYSTEMS), Inc. vs. Puente, G.R. No. 153832, separated from service in that period, but merely
(2005)] considered on leave until re-employed.

SEASONAL EMPLOYMENT If the Ee has been performing the job for at least a
year, even if the performance is not continuous and
Q: What is seasonal employment? merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
A: Employment where the job, work or service to be evidence of the necessity if not indispensability of
performed is seasonal in nature and the employment that activity to the business. Hence, the employment
is for the duration of the season. (Sec.5 [a], Rule I, is considered regular, but only with respect to such
Book VI, IRR) activity and while such activity exists [Benares vs.
Pancho, G.R. No. 151827, (2005)].
An employment arrangement where an Ee is engaged
to work during a particular season on an activity that But one year duration on the job is pertinent in
is usually necessary or desirable in the usual business deciding whether a casual Ee has become regular or
or trade of the Er. not, but it is not pertinent to a Seasonal or Project Ee.
Passage of time does not make a seasonal worker
Note: For Seasonal Ees, their employment legally ends regular or permanent [Mercado vs. NLRC, G.R. No.
upon completion of the project or the season. The 78969, (1991)].
termination of their employment cannot and should not
constitute an illegal dismissal [Mercado vs. NLRC, G.R. No.
Q: Carlito Codilan and Maximo Docena had been
79869, (1991)].
working for the rice mill for 25 years, while Eugenio
One year duration on the job is pertinent in deciding Go, Teofilo Trangria and Reynaldo Tulin have been
whether a casual Ee has become regular or not, but it is not working for 22, 15, and 6 years respectively. The
pertinent to a Seasonal or Project Ee. Passage of time does operations of the rice mill continue to operate and
not make a seasonal worker regular or permanent do business throughout the year even if there are
[Mercado vs. NLRC, G.R. No. 78969, (1991)]. only two or three harvest seasons within the year.
This seasonal harvesting is the reason why the
During off-season, the relationship of Er-Ee is not severed; company considers the workers as seasonal
the Seasonal Ee is merely considered on LOA without pay.
employees. Is the company correct in considering
Seasonal workers who are repeatedly engaged from season
the employees as seasonal employees?
to season performing the same tasks are deemed to have
acquired regular employment [Hacienda Fatima vs.
National Federation of Sugarcane Workers-Food and A: No, the fact is that big rice mills such as the one
General Trade, G.R. No. 149440, (2003)]. owned by the company continue to operate and do
business throughout the year even if there are only
Q: Are seasonal employees entitled to separation two or three harvest seasons within the year. It is a
pay? common practice among farmers and rice dealers to
store their palay and to have the same milled as the
A: When the business establishment is sold which need arises. Thus, the milling operations are not
effectively terminates the employment of the seasonal. Finally, considering the number of years
Seasonal Ees, the latter would be entitled to that they have worked, the lowest being 6 years, the
separation pay. workers have long attained the status of regular Ees
as defined under Art. 280 [Tacloban Sagkahan Rice
Mill vs. NLRC, G.R. No. 73806, (1990)].

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CASUAL EMPLOYMENT
The workers are casual Ees. Nevertheless, they may
Q: What is casual employment? be considered regular Ees if they have rendered
services for at least 1 year. When, as in this case,
A: they were dismissed from their employment before
1. It is an employment where the Ee is engaged in an the expiration of the 1-year period they cannot
activity which is not usually necessary or desirable in lawfully claim that their dismissal was illegal [Capule,
the usual business or trade of the Er, provided: such et al. vs. NLRC, G.R. No. 90653, (1990)].
employment is neither Project nor Seasonal (Art. 281,
LC). Q: How is the project worker different from a casual
or contractual worker? Briefly explain your
But despite the distinction between regular and answers.
casual employment, every Ee shall be entitled to the
same rights and privileges, and shall be subject to the A:
same duties as may be granted by law to regular Ees PROJECT EMPLOYEE CASUAL EMPLOYEE
during the period of their actual employment. Employed for a specific Engaged to perform a
project or undertaking job, work or service
2. An Ee is engaged to perform a job, work or service the completion or which is incidental to the
which is merely incidental to the business of the Er, termination of which is business of the Er and
and such job, work or service is for a definite period determined at the time the definite period of his
made known to the Ee at the time of engagement of his engagement. employment is made
(Sec. 5 [b], Rule I, Book VI, IRR) known to him at the
time of his engagement.
Q: Can casual employee become a regular His work need not be His continued
employee? incidental to the employment after the
business of the Er and lapse one year makes
A: If he has rendered at least 1 year of service, his employment may him a regular Ee.
whether such service is continuous or broken, he is exceed one year without
considered as regular Ee with respect to the activity necessarily making him a
in which he is employed and his employment shall regular Ee.
continue while such activity exists. Job is coterminous with No termination report
a specific project or required.
A casual Ee is only casual for 1 year, and it is the phase thereof. It is
passage of time that gives him a regular status. required that a
[KASAMMA-CCO vs. CA, G.R. No. 159828, (2006)] termination report be
submitted at the nearest
The purpose is to give meaning to the constitutional employment office upon
guarantee of security of tenure and right to self- completion of the
organization [Mercado vs. NLRC, G.R. No. 79868, project or phase.
(1991)].
FIXED TERM EMPLOYMENT
Q: Yakult Phils. is engaged in the manufacture of
cultured milk. The workers were hired to cut cogon Q: What is the nature of term employment?
grass and weeds at the back of the factory building
used by Yakult. They were not required to work on A: A contract of employment for a definite period
fixed schedule and they worked on any day of the terminates by its own terms at the end of such period
week on their own discretion and convenience. The [Brent School vs. Zamora, G.R. No. L-48494, (1990)].
services of the workers were terminated by Yakult
on less than 1-year after. May casual or temporary
Q: What is the decisive determinant in term
Ees be dismissed by the employer before the employment?
expiration of the 1-year period of employment?
A: It is the day certain agreed upon by the parties for
A: Yes, the usual business or trade of Yakult Phils. is
the commencement and the termination of their
the manufacture of cultured milk. The cutting of the employment relation.
cogon grasses in the premises of its factory is hardly
necessary or desirable in the usual business of the
Yakult.

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Q: What is a fixed term employment? Q: In the abovementioned facts, will Rene


automatically become a regular employee if he is
A: It is an employment where a fixed period of rehired by the school for another definite period of
employment was agreed upon: employment?

1. Knowingly and voluntarily by the parties, A: No. The decisive determinant in term employment
2. Without any force, duress or improper is the day certain agreed upon by the parties for the
pressure being brought to bear upon the Ee commencement and termination of their
and employment relationship, a day certain being
3. Absent any other circumstances vitiating his understood to be that which must necessarily come,
consent, or although it may not be known when and not whether
4. Where it satisfactorily appears that the Er the work is usually necessary and desirable to the
and Ee dealt with each other on more or less business of the Er.
equal terms with no moral dominance
whatever being exercised by the former over Q: Does the “Reasonable Connection Rule” applies
the latter [Brent School, Inc. vs. Zamora, G.R. in fixed term employment for a fixed- term
No. 48494, (1990)]. employee be eventually classified as regular
employee?
Note: A fixed-period Ee does not become a regular Ee
because his employment is coterminous with a specific A: No. It should be apparent that this settled and
period of time. familiar notion of a period, in the context of a
contract of employment, takes no account at all of
Ee hired on a fixed-term is regular if job is necessary and
the nature of the duties of the Ee; it has absolutely no
desirable to the business of Er [Philips Semiconductor vs.
Fadriquela, G.R. No. 141717, (2004)]. relevance to the character of his duties as being
usually necessary and desirable to the usual business
Q: Is “term employment” a circumvention of the law of the Er, or not.
on security of tenure?
Q: Dean Jose and other employees are holding
A: No, it is not a circumvention of the law if it follows administrative positions as dean, dep’t heads and
the requisites laid down by the Brent ruling [Romares institute secretaries. In the implementation of the
vs. NLRC, G.R. No. 122327, (1998)]. Reorganization, Retrenchment and Restructuring
program effective Jan. 1, 1984, Dean Jose and other
Q: Darrell was hired as an athletic director in employees were retired but subsequently rehired.
Amorita School for a period of five years. As such, he Their appointment to their administrative positions
oversees the work of coaches and related staff as dean, dep’t heads and institute secretaries had
involved in intercollegiate or interscholastic athletic been extended by the company from time to time
programs. However, he was not rehired upon the until the expiration of their last appointment on
expiration of said period. Darrell questions his May 31, 1988. Were Dean Jose and other employees
termination alleging that he was a regular employee illegally dismissed?
and could not be dismissed without valid cause. Is
he a regular employee? A: No. Petitioners were dismissed by reason of the
expiration of their contracts of employment.
A: No. Darrell was not a regular Ee but an Ee under a Petitioners' appointments as dean, dep’t heads and
fixed- term contract. While it can be said that the institute secretaries were for fixed terms of definite
services he rendered were usually necessary and periods as shown by their respective contracts of
desirable to the business of the school, it cannot also employment, which all expired on the same date,
be denied that his employment was for a fixed term May 31, 1988. The validity of employment for a fixed
of five years. The decisive determinant in fixed- term period has been acknowledged and affirmed by the
employment should not be the activities that the SC [Blancaflor vs. NLRC, G.R. No. 101013, (1993)].
employee is called upon to perform, but the day
certain agreed upon by the parties for the
commencement and termination of their
employment relation [Brent School Inc. vs. Zamora,
G.R. No. 48494, (1990)].

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JOB CONTRACTING Q: What are the factors to consider in determining


whether contractor is carrying on an independent
ARTS. 106 – 109, LABOR CODE business?

Q: What is “job contracting” (independent A:


contracting/ subcontracting)? 1. Nature and extent of work
2. Skill required
A: "Contracting" or "subcontracting" is an 3. Term and duration of the relationship
arrangement whereby a principal agrees to put out or 4. Right to assign the performance of specified
farm out with a contractor the performance or pieces of work
completion of a specific job, work or service within a 5. Control and supervision of worker
definite or predetermined period, regardless of 6. Power of Er to hire, fire and pay wages
whether such job, work or service is to be performed 7. Control of the premises
or completed within or outside the premises of the 8. Duty to supply premises, tools, appliances,
principal. (DO 18-A) materials and labor
9. Mode, manner and terms of payment [Vinoya vs.
Q: What are the conditions that must be met in NLRC, G.R. No. 126286, (2000)].
order to be considered as legitimate job contracting
or subcontracting? Note: Individuals with special skills, expertise or talent
enjoy the freedom to offer their services as independent
A: The following conditions must be met: contractors. An individual like an artist or talent has a right
to render his services without any one controlling the
means and methods by which he performs his art or craft
1. The contractor must be registered in accordance
[Sonza vs. ABS-CBN, G.R. No. 138051, (2004)].
with these Rules and carries a distinct and
independent business and undertakes to perform Q: SMC and Sunflower Cooperative entered into a 1-
the job, work or service on its own responsibility, yr Contract of Services, to be renewed on a month
according to its own manner and method, and to month basis until terminated by either party.
free from control and direction of the principal in Pursuant to the contract, Sunflower engaged private
all matters connected with the performance of respondents to render services at SMC’s Bacolod
the work except as to the results thereof; Shrimp Processing Plant. The contract was deemed
2. The contractor has substantial capital and/or renewed by the parties every month after its
investment; and expiration on Jan. 1, ‘94 and respondents continued
3. The Service Agreement ensures compliance with to perform their tasks until Sep. 11, ‘95. In July ‘95,
all the rights and benefits under Labor Laws. (Sec. private respondents filed a complaint before the
4, DO 18-A) NLRC, praying to be declared as regular employees
of SMC, with claims for recovery of all benefits and
Q: When is there “labor-only contracting”? privileges enjoyed by SMC rank and file employees.
Respondents subsequently filed an Amended
A: There is labor-only contracting when: Complaint to include illegal dismissal as additional
cause of action following SMC’s closure of its
1. The contractor does not have substantial capital Bacolod Shrimp Processing Plant on which resulted
or investments in the form of tools, equipment, in the termination of their services. SMC filed a
machineries, work premises, among others, and Motion for Leave to File Attached Third Party
the Ees recruited and placed are performing Complaint to implead Sunflower as 3 -Party
rd
activities which are usually necessary or desirable Defendant. Are private respondents employees of
to the operation of the company, or directly the independent cooperative contractor (Sunflower)
related to the main business of the principal or of the SMC?
within a definite or predetermined period,
regardless of whether such job, work or service is A: The contention of SMC holds no basis. Using the
to be performed or completed within or outside “substantial capital” doctrine and the “right of control
the premises of the principal; or test,” the Court found that the Sunflower had no
2. The contractor does not exercise the right to substantial capital in the form of tools, equipment,
control over the performance of the work of the machineries, work premises and other materials to
Ee. (Sec. 6, DO 18-A) qualify itself as an independent contractor. The lot,
building, machineries and all other working tools
utilized by private respondents in carrying out their

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tasks were owned and provided by SMC. In addition, DEPARTMENT ORDER NO. 18-A
the shrimp processing company was found to have
control of the manner and method on how the work Q: What are the rights of a contractual employee?
was done. Thus, the complainants were deemed Ees
not of the cooperative but of the shrimp processing A: They shall be entitled to all the rights and
company. Since respondents who were engaged in privileges as provided for in the LC, as amended, to
shrimp processing performed tasks usually necessary include the following:
or desirable in the aquaculture business of SMC, they 1. Safe and healthful working conditions;
should be deemed regular Ees of the latter and as 2. Service Incentive Leave, rest days, OT pay,
th
such are entitled to all the benefits and rights holiday pay, 13 month pay and separation pay;
appurtenant to regular employment [SMC vs. 3. Retirement benefits under SSS or retirement
Prospero Aballa, et al., G.R. No. 149011, (2005)]. plans of the contractor;
4. Social security and welfare benefits;
Q: What are the conditions of permissible job 5. Self-organization, CBA and peaceful concerted
contracting? actions; and
6. Security of tenure (Sec. 8, DO 18-A)
A:
1. The labor contractor must be duly licensed by Q: What are the effects of termination of
the appropriate Regional Office of the DOLE contractual employee to separation pay and other
2. There should be a written contract between the benefits?
labor contractor and his client-Er that will assure
the Ees at least the minimum labor standards A:
and benefits provided by existing laws. 1. If caused by the pre-termination of the Service
Agreement not due to authorized causes under
Note: The Ees of the contractor or subcontractor shall be Art. 283 of LC – The right of Ee to unpaid wages
paid in accordance with the provisions of the LC. (Art. 106, and other unpaid benefits including unremitted
LC) legal mandatory contributions shall be borne by
the party at fault, without prejudice to the
Q: Who are the parties in contracting and solidary liability of the parties to the Service
subcontracting? Agreement.

A: 2. If the termination results from the expiration of


1. Contractor/subcontractor –any person or entity, the service agreement or completion of the phase
including a cooperative, engaged in a legitimate of the job – The Ee may opt for payment of
contracting or subcontracting arrangement. separation benefits as may be provided by law or
the Service Agreement, without prejudice to
2. Contractual Ee– One who is employed by a his/her entitlement to the completion bonuses
contractor or subcontractor to perform or or other emoluments, including retirement
complete a job, work, or service pursuant to a benefits whenever applicable.
service agreement with a principal. (D.O. 18-A)
Q: When is the principal deemed the employer of
3. Principal– Any Er who puts out or farms out a job, the contractual employee?
service, or work to a contractor or subcontractor.
A: When:
Q: Describe the relationship arising from contractual 1. There is labor-only contracting
arrangements. 2. The contracting arrangement falls within the
prohibited acts
A: There is a trilateral relationship between the
principal, contractor and Ee. There exists a
contractual relationship between the principal and
the contractor or subcontractor to its Ees.

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Q: May the employer or indirect employer require as to unpaid wages and


the contractor or subcontractor to furnish a bond other labor standards
equal to the cost of labor under contract to answer violations)
for the wages due to employees in case the Permissible, subject only
Prohibited by Law
contractor or subcontractor fails to pay the same? to certain conditions
The contractor has
A: Yes. The Er or indirect Er may require the Has no substantial capital
substantial capital or
contractor or subcontractor to furnish a bond that or investment
investment
will answer for the wages due to the Ees.
Q: SMPC entered into a contract with Arnold for the
Q: What is the liability of the principal? milling of lumber as well as the hauling of waste
wood products. The company provided the
A: The principal shall be solidarily liable with the equipment and tools because Arnold had neither
contractor in the event of any violation of any tools and equipment nor capital for the job. Arnold,
provision of the LC, including the failure to pay on the other hand, hired his friends, relatives and
wages. This will not prevent the principal from neighbors for the job. Their wages were paid by
claiming reimbursement from the contractor. SMPC to Arnold, based on their production or the
number of workers and the time used in certain
Q: Why is labor-only contracting prohibited? areas of work. All work activities and schedules
were fixed by the company.
A: It gives rise to confusion as to who is the real Er of
the workers and who is liable to their claims. It also 1. Is Arnold a job contractor? Explain briefly.
deprives workers of the opportunity to become 2. Who is liable for the claims of the workers hired
regular Ees. by Arnold? Explain briefly. (2002 Bar Question)

Q: What are the bases of the State in prohibiting A:


labor-only contracting? 1. No. In the problem given, Arnold did not have
sufficient capital or investment for one. For
A: another, Arnold was not free from the control
1. The Constitution, which provides that the State and direction of SMPC because all work activities
shall protect labor and promote its welfare, and and schedules were fixed by the company.
shall guarantee basic labor rights including just Therefore, Arnold is not a job contractor. He is
and humane terms and conditions of engaged in labor-only contracting.
employment and the right to self-organization. 2. SMPC is liable for the claims of the workers hired
2. Art. 106 of the LC, which allows the SLE to by Arnold. A finding that Arnold is a labor-only
distinguish between labor-only contracting and contractor is equivalent to declaring that there
job contracting to prevent any violation or exist an Er-Ee relationship between SMPC and
circumvention of the LC. workers hired by Arnold. This is so because
Arnold is considered a mere agent of SMPC [Lim
Q: Distinguish between labor-only contracting job vs. NLRC, G.R. No. 124630,(1999)].
contracting.
Q: What are the grounds for cancellation of
A: registration of contractors or subcontractors?
LABOR-ONLY
JOB CONTRACTING
CONTRACTING A:
No Er-Ee relationship 1. Misrepresentation of facts in the application;
exist between the Er and 2. Submission of a falsified or tampered application
Er is treated as direct Er of the contractor's Ees or supporting documents to the application for
the person recruited in all except when the registration;
instances contractor or 3. Non-submission of Service Agreement between
subcontractor fails to the principal and the contractor when required
pay the wages of the Ees to do so;
Liability is limited (shall be 4. Non-submission of the required semi-annual
Liability extends to all
solidarily liable with Er report;
those provided under
only when the Er fails to
the Labor Standards law
comply with requirements

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5. Findings through arbitration that the contractor Note: The principal is considered the “direct” Er of the
has engaged in labor-only contracting and/or the contractual Ees for purposes of enforcing the provisions of
prohibited activities; the LC and other social legislations.
6. Non-compliance with labor standards and
The contractor/subcontractor is deemed only to be the
working conditions;
agent of the principal.
7. Findings of violation of Sec. 8 (Rights of
Contractor's Employees) or Sec. 9 (Required The principal is solidarily liable with the contractor/
Contracts); subcontractor in the event of any violation of any provision
8. Non-compliance with SSS, the HDMF, Pag-ibig, of the LC, including failure to pay wages.
Philhealth, and ECC laws; and
9. Collecting any fees not authorized by law and TRILATERAL RELATIONSHIP IN JOB CONTRACTING
other applicable rules and regulations (Sec. 23,
DO 18-A). Q: What is trilateral relationship?

DEPARTMENT CIRCULAR NO. 01-12 A: In legitimate contracting or subcontracting


arrangement there exists:
Q: Are the rules provided under D.O. No. 18-A 1. Er-Ee relationship between the contractor and the
applicable to companies or firms in: Ees it engaged to perform the specific job, work or
1. Business Process Outsourcing (BPO) or service being contracted; and
Knowledge Process Outsourcing (KPO); and 2. Contractual relationship between the principal and
2. Construction Industries the contractor. (Sec. 5, DO 18-A)

A: Q: How do you determine the relationship of the


1. No. D.O. 18-A contemplates generic or focused parties if it is independent contracting or labor-only
singular activity in one contract between the contracting?
principal and the contractor and does not
contemplate information-technology enabled A: Thru the use of the Factor Test. This considers the
services involving entire business processes. nature of the business, substantial capital and the
These companies engaged in business processes control exercised.
may hire Ees in accordance with the applicable
laws and maintain these employees based on FACTOR TEST Independent Labor-only
businesses requirements, which may or may not Contractor contractor
be for different clients of the BPO’s at different
periods of the Ee’s employment. [3.2, No separate
Department Circular No. 01-12] business
2. No. Licensing and the exercise of the regulatory The business of
independent
powers over the construction industry is lodged an independent
with the Philippine Contractors Accreditation and distinct
contractor is
Board (PCAB) under the Construction Industry from the
Nature of entirely
Authority of the Philippines (CIAP) pursuant to principal. May
business separate and
P.D. 1746 and not with the DOLE or any of its be a “cabo” or
regional offices. [4.1, Department Circular No. distinct from the
an in-house
01-12] business of the
agency
principal
prohibited
EFFECTS OF LABOR-ONLY CONTRACTING
under DO 18-02
Q: What are the effects of finding that there is labor-
only contracting? The only
Substantial Has substantial investment is
A: A finding that a contractor is a “labor-only” capital OR capital or bringing
contractor is equivalent to declaring that there is an investment investment. individuals to
Er-Ee relationship between the principal and the Ees work
of the “labor-only” contractor [Assoc. Anglo-American
Tobacco Corp. vs. Clave, G.R. No. 50915, (1990)]. Control as to
Control Control as to
only RESULTS
BOTH results
but not the

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means and means


Q: What are the Just causes for termination (Art.
VALID in VOID in 282, LC)?
EFFECT:
Philippine law Philippine law
A:
1. Serious misconduct or willful disobedience by the
Note: DO 18-A prohibits job contracting of functions Ee of the lawful orders of his Er or representative
performed by regular Ees. in connection with his work;
2. Gross and habitual neglect by the Ee of his duties;
Q: What does substantial capital or investment 3. Fraud or willful breach by the Ee of the trust
mean? reposed in him by his Er or duly organized
representative;
A: It refers to paid-up capital stocks/shares of at least 4. Commission of a crime or offense by the Ee
Three Million Pesos (Php 3,000,000.00) in the case of against the person of his Er or any immediate
corporations, partnerships and cooperatives; in the member of his family or his duly authorized
case of single proprietorship, a net worth of at least representative;
Three Million Pesos (Php 3,000,000.00). (D.O. 18-A) 5. Other causes analogous to the foregoing.

Note: The law does not require both substantial capital and Note: The burden of proving that the termination was for a
investment in the form of tools, equipment, machineries, valid or authorized cause shall rest on the Er. (Art. 277[b],
etc. This is clear from the use of conjunction “or”. If the LC)
contention was to require the contractor to prove that he
has both capital and requisite investment, then the Q: What is Serious Misconduct?
conjunction “and” should have been used [Virginia Neri vs.
NLRC, G.R. No. 97008, (1993)]. A: It is an improper or wrong conduct; the
transgression of some established and definite rule of
Q: What does the right to control mean? action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere
A: It refers to the right reserved to the person for error in judgment. To be serious within the meaning
whom the services of the contractual workers are and intendment of the law, the misconduct must be
performed, to determine not only the end to be of such grave and aggravated character and not
achieved, but also the manner and means to be used merely trivial or unimportant [Villamor Golf Club vs.
in reaching that end. (D.O. 18-A) Pehid, G.R. No. 166152, (2005)].
DISMISSAL FROM EMPLOYMENT Q: What are the elements of serious misconduct?
Q: What is substantive due process (Security of A:
Tenure)? 1. It must be serious or of such a grave and
aggravated character;
A: In cases of regular employment, the Er shall not 2. Must relate to the performance of the Ees’
terminate the services of an Ee except for a just cause duties;
or when authorized by the LC on Termination of 3. Ee has become unfit to continue working for the
Employment. (Art. 279, LC) Er [Philippine Aeolus Automotive United Corp. vs.
NLRC, G.R. No. 124617, (2000)].
No worker shall be dismissed except for a just or
authorized cause provided by law and after due Q: Give some examples of serious misconduct.
process.
A:
1. Sexual Harassment
2. Fighting within the company premises
3. Uttering obscene, insulting or offensive words
against a superior
4. Falsification of time records
5. Gross immorality

Q: Escando, upset at his transfer to the washer


JUST CAUSES section, repeatedly uttered “gago ka” and

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99 FACULTY OF CIVIL LAW
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threatened bodily harm to his superior Mr. Andres. A. There is no law that compels an Ee to accept a
Is the utterance of the obscene words and threats of promotion for the reason that a promotion is in the
bodily harm gross and willful misconduct? nature of a gift or reward, which a person has the
right to refuse. The exercise of the Ee of the right to
A: Yes. The repeated utterances by Escando of refuse a promotion cannot be considered in law as
obscene, insulting or offensive words against a insubordination or willful disobedience [PT&T Corp.
superior were not only destructive of the morals of vs. CA, G.R. No. 152057, (2003)].
his co-Ees and a violation of the company rules and
regulations, but also constitute gross misconduct Q: A company vehicle was brought twice out of the
which is one of the grounds provided by law to company premises without authorization. In the first
terminate the services of an Ee [Autobus Workers instance the company opted not to implement any
Union vs. NLRC, G.R. No. 11753, (1998)]. action against Homer and instead issued a
memorandum reminding Homer as well as the
Q: Samson made insulting and obscene utterances security guards of the proper procedure. However,
towards the General Manager saying “Si EDT bullshit in the second instance the vehicle met an accident.
yan, sabihin mo kay EDT yan” among others during Is Homer guilty of willful disobedience even though
the Christmas party. Are the utterances towards the he was not the one who personally brought the
General Manager gross misconduct? company vehicle out of the company premises and
was merely a passenger in the second incident?
A: The alleged misconduct of Samson when viewed in
its context is not of such serious and grave character A: Yes. A rule prohibiting Ees from using company
as to warrant his dismissal. Samson made the vehicles for private purpose without authority from
utterances and obscene gestures at an informal management is a reasonable one. When Homer rode
Christmas gathering and it is to be expected during the company vehicle, he was undoubtedly aware of
this kind of gatherings, where tongues are more often the possible consequences of his act and taking into
than not loosened by liquor of other alcoholic consideration his moral ascendancy over the security
beverages, that Ees freely express their grievances guards it was incumbent upon him not only to
and gripes against their Ers. Ees should be allowed admonish them but also to refrain from using the
wider latitude to freely express their grievances and company car himself. Homer is responsible for the
gripes against their Er. Ees should be allowed wider unauthorized release of the vehicle of the company
latitude to freely express their sentiments during which is a violation of the rules and regulations of the
these kinds of occasions which are beyond the company. Homer was already reminded of the proper
disciplinary authority of the Er [Samson vs. NLRC, G.R. procedure of the company. [Family Planning Org. of
No. 121035, (2000)]. the Phil. vs. NLRC, G.R. No. 75907, (1992)]

Q: When is willful disobedience of the employer’s Q: Escobin’s group were security guards based in
lawful orders a just cause for termination? Basilan. They were placed in floating status and
were asked to report for reassignment in Metro
A: Two requisites must concur: Manila by PISI. Upon failure to report or respond to
1. The Ees assailed conduct must have been such directives they were ordered dismissed from
willful or intentional, the willfulness being employment by PISI for willful disobedience. Did the
characterized by a wrongful and perverse failure to report to Manila amount to willful
attitude. disobedience?
2. The disobeyed orders, regulations or
instructions of the Er must be: A: The reasonableness of the rule pertains to the kind
a. Reasonable and lawful of character of directives and commands and to the
b. Sufficiently known to the Ee manner in which they are made. In this case, the
c. In connection with the duties which the order to report to the Manila office fails to meet this
Ee has been engaged to discharge standard. The order to report to Manila was
[Cosep vs. NLRC, G.R. No. 124966, inconvenient, unreasonable, and prejudicial to
(1998)]. Escobin’s group since they are heads of families
residing in Basilan and they were not given
transportation money or assurance of availability of
Q. Is refusal to a promotion by an employee an act work in Manila [Escobin vs. NLRC, G.R. No. 118159.
of insubordination or willful disobedience? (1998)].

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Q: When is negligence a just cause for termination? complete the same within the allotted reasonable
period, or by producing unsatisfactory results. [Buiser
A: When it is gross and habitual. vs. Leogardo, G.R. No. L-63316, (1984)] This ground is
considered analogous to those enumerated under
Q: When is there Gross Negligence? Art. 282. [Skippers United Pacific vs. Magud, G.R. No.
166363, (2006)]
A: Gross negligence implies a want or absence of or
failure to exercise slight care of diligence of the entire Q: Gamido was a quality control inspector of VH
absence of care it evinces thoughtless disregard of Manufacturing. Gamido was allegedly caught by the
consequences without exerting any effort to avoid company Pres. Dy Juanco of sleeping and was
them. However, such neglect must not only be gross dismissed from employment. Did Gamido’s act of
but habitual in character [Judy Phils. vs. NLRC, G.R. sleeping on the job constitute a valid cause of
No. 111934, (1998)]. dismissal?

Q: When is there habitual neglect of duties? A: Sleeping on the job as a valid ground for dismissal
only applies to security guards whose duty
A: Habitual Neglect implies repeated failure to necessitates that they be awake and watchful at all
perform one’s duties over a period of time, times. Gamido’s single act of sleeping further shows
depending upon the circumstance [JGB and that the alleged negligence or neglect of duty was
Associates vs. NLRC, GR No. 10939, (1996)]. neither gross nor habitual [VH Manufacturing vs.
NLRC, G.R. No. 130957,(2000)].
Q: Antiola, as assorter of baby infant dress for Judy
Phils., erroneously assorted and packaged 2,680 Q: Give some forms of neglect of duty.
dozens of infant wear. Antiola was dismissed from
employment for this infraction. Does the single act A:
of misassortment constitute gross negligence? 1. Habitual tardiness and absenteeism
2. Abandonment:
A: No. Such neglect must not only be gross but also a. Failure to report for work or absence
habitual in character. Hence, the penalty of dismissal without justifiable reason
is quite severe considering that Antiola committed b. Clear intention to sever Er-Ee relationship
the infraction for the first time [Judy Phils. vs. NLRC, manifested by some overt acts [Labor et. al
G.R. No. 111934, (1998)]. vs. NLRC, GR No. 110388, (1995)].

Q: Does the failure in performance evaluations Q: When is loss of trust and confidence a Just cause
amount to gross and habitual neglect of duties? for termination?

A: As a general concept “poor performance” is A:


equivalent to inefficiency and incompetence in the 1. It applies only to cases involving:
performance of official duties. The fact that an a. Ees occupying positions of trust and
employee’s performance is found to be poor or confidence (confidential and managerial
unsatisfactory does not necessarily mean that the Ee Ee’s) – to this class belong managerial Ees,
is grossly and habitually negligent of his duties. Gross i.e., those vested with the powers or
negligence implies a want or absence of or failure to prerogatives to lay down management
exercise slight care of diligence or the entire absence policies and/or to hire, transfer, suspend,
or care. He evinces a thoughtless disregard of lay-off, recall, discharge, assign or discipline
consequences without exerting any effort to avoid Ees or effectively recommend such
them. [Eastern Overseas Employment Center Inc. vs. managerial actions
Bea, G.R. 143023, (2005)] b. Ees routinely charged with the care and
custody of the employer’s money or property –
Q: Is inefficiency a Just cause for dismissal? to this class belong cashiers, auditors, property
custodians, etc., or those who, in the normal
A: Yes, failure to observe prescribed standards of and routine exercise of their functions,
work or to fulfill reasonable work assignments due to regularly handle significant amounts of money
inefficiency may constitute Just cause for dismissal. or property [Mabeza vs. NLRC, G.R. No.
Such inefficiency is understood to mean failure to 118506, (1997)].
attain work goals or work quotas, either by failing to

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2. The loss of trust and confidence must be based established by substantial evidence [Dela Cruz vs. NLRC,
on willful breach. G.R. No. 119536, (1997)].

Note: A breach is willful if it is done intentionally, Q: Mabeza, a chambermaid at Hotel Supreme was
knowingly, and purposely without justifiable excuse, as terminated from employment because of her refusal
distinguished from an act done carelessly, to sign an affidavit attesting to their employer’s
thoughtlessly, heedlessly, or inadvertently [De la Cruz (Er’s) compliance with minimum wage and other
vs. NLRC, G.R. No. 119536, (1997)]. labor standards. Mabeza filed a complaint for illegal
dismissal against Hotel Supreme. As a defense, Hotel
3. The act constituting the breach must be “work- Supreme claimed that she abandoned her work and
related” such as would show the Ee concerned to belatedly claimed loss of confidence as the ground
be unfit to continue working for the Er [Gonzales for the dismissal of Mabeza because she stole some
vs. NLRC, G.R. No. 131653, (2001)]. of the properties of her Er. Is loss of confidence a
valid ground for dismissal of a hotel chambermaid?
4. It must be substantial and founded on clearly
established facts sufficient to warrant the Ee’s A: No. Loss of confidence as a just cause for dismissal
separation from employment [Sulpicio Lines Inc. was never intended to provide Ers with a blank check
vs. Gulde, G.R. No. 149930, (2002)]. for terminating their Ees. Evidently, an ordinary
chambermaid who has to sign out for linen and other
5. Fraud must be committed against the Er or his hotel property from the property custodian each day
representatives, e.g.: and who has to account for each and every towel or
a. Falsification of time cards bed sheet utilized by the hotel's guests at the end of
b. Theft of company property her shift would not fall under any of these two classes
c. Unauthorized use of company vehicle of Ees for which loss of confidence, if ably supported
by evidence, would normally apply [Mabeza vs. NLRC,
Note: The treatment of rank and file personnel and
G.R. No. 118506, (1997)].
managerial Ees in so far as the application of the doctrine of
loss of trust and confidence is concerned is different. As
regards managerial Ees, such as Caoile, mere existence of a Q: Abelardo Abel was first hired by Philex Mining
basis for believing that such Ee has breached the trust of his Corp. in January 1988. He was later assigned to the
Er would suffice for his dismissal [Caoile vs. NLRC, G.R. No. company’s Legal Department as a Contract Claims
115491, (1998)]. Asst., and held the position for 5 yrs. prior to his
transfer to the Mine Engineering and Draw Control
Q: What are the guidelines for the doctrine of loss of Department wherein he was appointed Unit Head.
confidence to apply? In 2002, he was implicated in an irregularity
occurring in the subsidence area of the company’s
A: mine site at Benguet. His co-worker Lupega,
1. Loss of confidence should not be simulated executed an affidavit known as the “Subsidence
(reasonable basis for loss of trust and Area Anomaly.” The incidents in Lupega’s affidavit
confidence); supposedly took place when Abel was still a
2. Not used for subterfuge for causes which are Contract Claims Asst. at the company’s legal dep’t.
improper and/or illegal and unjustified; An investigation was promptly launched by the
3. Not arbitrarily asserted in the face of company’s officers. Abel attended the meetings but
overwhelming evidence to the contrary; claimed that he was neither asked if he needed the
4. Must be genuine, not a mere afterthought to assistance of counsel nor allowed to properly
justify earlier action taken in bad faith; and present his side. By memo, the company found Abel
5. The Ee involved holds a position of trust and guilty of (1) fraud resulting in loss of trust and
confidence. confidence and (2) gross neglect of duty, and was
meted out the penalty of dismissal from
Note: The breach of trust must rest on substantial grounds employment. Was Abel validly dismissed for any of
and not on the Er’s arbitrariness, whims, caprices, or the causes provided for in Art. 282 of the LC?
suspicion; otherwise, the Ee would eternally remain at the
mercy of the Er. It should be genuine and not simulated,
A: No. The 1st requisite for dismissal on the ground of
nor should it appear as a mere afterthought to justify
loss of trust and confidence is that the Ee concerned
earlier action taken in bad faith of a subterfuge for causes
which are improper, illegal, or unjustified. It has never been must be holding a position of trust and confidence.
intended to afford and occasion for abuse because of its Abel was a contract claims assistant at the time he
subjective nature. There must, therefore, be an actual allegedly committed the acts which led to its loss of
breach of dully committed by the employee which must be trust and confidence. It is not the job title but the

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actual work that the Ee performs. It was part of Abel’s 1. The failure to report for work, or absence
responsibilities to monitor the performance of the without valid or justifiable reason; and
company’s contractors in relation to the scope of 2. A clear intention to sever Er-Ee relationship, with
work contracted out to them. the 2nd element as the more determinative
factor, being manifested by some overt acts [Sta.
nd
The 2 requisite is that there must be an act that Catalina College s. NLRC, G.R. No. 144483,
would justify the loss of trust and confidence. Loss of (2003)].
trust and confidence, to be a valid cause for dismissal,
must be based on a willful breach of trust and Q: How is abandonment proven?
founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly established A: To prove abandonment, the Er must show that the
but proof beyond reasonable doubt is not necessary. Ee deliberately and unjustifiably refused to resume
The company’s evidence against Abel fails to meet his employment without any intention of returning.
this standard. Its lone witness, Lupega, did not There must be a concurrence of the intention to
support his affidavit and testimony during the abandon and some overt acts from which an Ee may
company investigation with any piece of evidence at be deduced as having no more intention to work. The
all. It could hardly be considered substantial evidence law, however, does not enumerate what specific
[Abel vs. Philex Mining Corp., G.R. No. 178976, overt acts can be considered as strong evidence of
(2009)]. the intention to sever the Ee-Er relationship [Sta.
Catalina College s. NLRC, G.R. No. 144483, (2003)].
Q: Is failure to reach the monthly sales quota a valid
ground for dismissal based on loss of trust and Q: Mejila, a barber at Windfield Barber Shop, had an
confidence? altercation with a fellow barber which resulted in his
subsequent turning over the duplicate keys of the
A: No. It is stated in Art. 282 of the LC that loss of shop to the cashier and took away all his belongings
trust and confidence is a ground for termination of an there from and worked at different barbershop.
employee. However, it requires that such breach of Mejila then filed an illegal dismissal case but did not
trust be willful – whether it be done intentionally, seek reinstatement as a relief. Did Mejila commit
knowingly, and purposely, without justifiable excuse. abandonment?
The court finds that failure to reach the monthly sales
quota is not valid ground for loss of trust and A: Mejila’s acts such as surrendering the shop’s keys,
confidence as this is not what has been contemplated not reporting to the shop anymore without any
in Art. 282(c) of the LC. justifiable reason, his employment in another barber
shop, and the filing of a complaint for illegal dismissal
Several factors can be attributed to the low sales without praying for reinstatement clearly show that
performance, which may not be compelled by the there was a concurrence of the intention to abandon
respondent. It being involuntary on his part the and some overt acts from which it may be inferred
factors cannot be taken as a valid ground as they are that the Ee concerned has no more interest in
not to be considered willful breach of trust, for they working [Jo vs. NLRC, G.R. No. 121605, (2000)].
were not done intentionally, knowingly and
purposely, without justifiable excuse [Norkis Q: The employees averred that they were underpaid
Distributors, Inc and Alex D. Buat v. Delfin S. and filed a complaint for money claims against the
Descallar, G.R. No. 185255, (2012)]. employer before the LA. As a result of their
complaint, they were relieved from their posts and
Q: What is abandonment as a just cause for were not given new assignments despite the lapse
termination? of six months. On the other hand, the Er maintains
that the employees were not dismissed but were
A: It means the deliberate, unjustified refusal of an merely transferred to a new post and voluntarily
employee to resume his employment. abandoned their jobs when they failed to report for
duty in the new location. Upon termination, the
employee moved to file a joint complaint for illegal
Q: What are the requirements for a valid finding of dismissal. Is there a valid indication of abandonment
abandonment? from work?

A: For a valid finding of abandonment, two (2) factors A. No. For abandonment of work to fall under Art.
must be present: 282 of the LC, as amended, as gross and habitual

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neglect of duties there must be the occurrence of two 1. Violation of company rules and regulations
elements: first, there should be a failure of the 2. Drunkenness
employee to report for works without a valid or 3. Gross inefficiency
justifiable reason and second, there should be a 4. Illegally diverting employer’s products
showing that the Ee intended to sever the Er-Ee 5. Failure to heed an order not to join an illegal
relationship, the second element being the more picket
determinative factor as manifested by overt acts. 6. Violation of safety rules and code of
discipline
The Er cannot simply conclude knowledge that an
employee is ipso facto notified of a transfer when Note: To fall within the ambit of “analogous cases” the act
there is no evidence to indicate that the Ee had or omission must have an element similar to those found in
knowledge of the transfer order. Hence, the failure of the specific Just cause enumerated under Art. 282.
an employee to report for work at the new location [International Rice Research Institute vs. NLRC, G.R. No.
cannot be taken against him as an element of 97239, (1993)]
abandonment.
Past offenses
In addition to these tests for valid transfer, there
Stellar Industrial Service Inc. vs. NLRC: Previous offenses
should be proper and effective notice to the Ee
may be so used as a valid justification for dismissal from
concerned. It is the Er’s burden to show that the Ee work ONLY if the infractions are related to the
was duly notified of the transfer. Verily, an Er cannot subsequent offense upon which the basis the
reasonably expect an Ee to report for work in a new termination of employment is decreed.
location without first informing said Ee of the
transfer. Alert security’s insistence on the sufficiency Chua-Qua vs. Clave: The school failed to show that Chua
of mere issuance of the transfer order is indicative of took advantage of her position to court her student
bad faith on their part [Alert Security and Qua. If the two eventually fell in love, despite the
disparity in their ages and academic levels, this only
Investigation Agency, Inc. et al v. Saidali Pasawilan, et
lends substance to the truism that the heart has
al., G.R. No. 182397, (2011)].
reasons of its own which reason does not know. But,
yielding to this gentle and universal emotion is not to be
Q: What are the guidelines to determine the validity so casually equated with immorality. The deviation of
of termination? the circumstances of their marriage from the usual
social pattern cannot be considered as a defiance of
A: Validity of termination per se is determined by contemporary social mores.
compliance with two-notice rule, hearing, just or
authorized cause. This is more or propriety of Q: What is the doctrine of incompatibility?
dismissal as penalty as oppose to reprimand,
suspension, etc. A: Where the Ee has done something that is contrary
or incompatible with the faithful performance of his
Q: When is "commission of a crime or offense" a just duties, his Er has a just cause for terminating his
cause for termination of an employee? employment [Manila Chauffeur’s League vs. Bachrach
Motor Co., G.R. No. L-47071, (1940)].
A: It refers to an offense by the Ee against the person
of his employer or any immediate member of his AUTHORIZED CAUSES
family or his duly authorized representative and thus,
conviction of a crime involving moral turpitude is not Q: What are the authorized causes of termination by
analogous thereto as the element of relation to his the employer?
work or to his Er is lacking.
A:
Note: A criminal case need not be actually filed. 1. Installation of labor-saving devices
Commission of acts constituting a crime itself is sufficient. (automation/robotics)

2. Redundancy (superfluity in the performance of a


Q: What is required for an act to be included in particular work) – exists where the services of an
analogous cases of just causes of termination? Ee are in excess of what is reasonably demanded
by the actual requirements of the enterprise
A: Must be due to the voluntary and/or willful act or [Wiltshire File Co., Inc. vs. NLRC, G.R. No. 82249,
omission of the Ee [Nadura vs. Benguet Consolidated, (1991)].
G.R. No. L-17780, (1962)], e.g.:

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Note: The redundancy should not have been created Q: What are the procedural steps required in
by the Er. termination of an employee for authorized causes?

3. Reorganization A:
1. Written Notice to DOLE 30 days prior to the
Note: An Er is not precluded from adopting a new intended day of termination.
policy conducive to a more economical and effective
Purpose: To enable it to ascertain the verity of
management, and the law does not require that the Er
the cause of termination.
should be suffering financial losses before he can
terminate the services of the employee on the ground
of redundancy [DOLE Phil., Inc. vs. NLRC, G.R. No. L- 2. Written notice to Ee concerned 30 days prior the
55413, (1983)]. intended date of termination.

4. Retrenchment–cutting of expenses and includes 3. Payment of separation pay - Serious business


the reduction of personnel; It is a management losses do not excuse the Er from complying with
prerogative, a means to protect and preserve the the clearance or report required in Art. 283 of
Er’s viability and ensure his survival. To be an the LC and its IRR before terminating the
authorized cause it must be effected in good employment of its workers. In the absence of
faith and for the retrenchment, which is after all justifying circumstances, the failure of the Er to
a drastic recourse with serious consequences for observe the procedural requirements under Art.
the livelihood of the Ee’s or otherwise laid-off. 284 of the LC taints their actuations with bad
faith if the lay-off was temporary but then
Note: The phrase “to prevent losses” means that serious business losses prevented the
retrenchment or termination from the service of some reinstatement of respondents, the Er’s should
Ees is authorized to be undertaken by the Er sometime have complied with the requirements of written
before the anticipated losses are actually sustained or notice.
realized. Evidently, actual losses need not set in prior
to retrenchment [Cajucom VII vs. TP Phils Cement
Q: What are the requisites of a valid Redundancy?
Corp., et al, G.R. No. 149090, (2005)].

5. Closing or cessation of operation of the A:


establishment or undertaking – must be done in 1. Written notice served on both the Ees and the
good faith and not for the purpose of DOLE at least 1 month prior to separation from
circumventing pertinent labor laws. work
2. Payment of separation pay equivalent to at least
6. Disease –must be incurable within 6 months and 1 month pay or at least 1 month pay for every
the continued employment is prohibited by law year of service, whichever is higher
or prejudicial to his health as well as to the 3. Good faith in abolishing redundant position
health of his co-Ees with a certification from the 4. Fair and reasonable criteria in ascertaining what
public health officer that the disease is incurable positions are to be declared redundant:
within 6 months despite due to medication and a. Less preferred status, e.g. temporary Ee
treatment b. Efficiency and
c. Seniority
Q: What are other authorized causes?
Q: Ong, a Sales Manager of Wiltshire File Co., Inc.,
A: was informed of the termination of his employment
1. Total and permanent disability of Ee due to redundancy upon returning from a trip
2. Valid application of union security clause abroad. Ong maintains that there can be no
3. Expiration of period in term of employment redundancy since he was the only person occupying
4. Completion of project in project his position in the company.
employment
5. Failure in probation Is there redundancy even though Ong was the only
6. Relocation of business to a distant place one occupying his position?
7. Defiance of return-to work-order
8. Commission of Illegal acts in strike A: Redundancy in an Er’s personnel does not
9. Violation of contractual agreement necessarily or even ordinarily refer to duplication of
10. Retirement work. The characterization of Ong’s services as no
longer necessary or sustainable and therefore

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properly terminable, was an exercise of business retrenchment program, the last one employed will
judgment on the part of Wiltshire. Furthermore, a necessarily be the first one to go [Maya Farms Ees’
position is redundant where it is superfluous, and Organization vs. NLRC, G.R. No. 106256, (1994)].
superfluity of a position or positions may be the
outcome of a number of factors, such as over hiring Q: Is the seniority rule or "last in first out" policy to
of workers, decreased volume of business, or be strictly followed in effecting a retrenchment or
dropping of a particular product line or service redundancy program? (2001 Bar Question)
activity previously manufactured or undertaken by
the enterprise. The Er has no legal obligation to keep A: In Asian Alcohol Corp., the SC stated that with
in its payroll more employees that are necessary for regard the policy of "first in,last out" in choosing
the operation of its business [Wiltshire File Co., Inc. which positions to declare as redundantor whom to
vs. NLRC, G.R. No. 82249, (1991)]. retrench to prevent further business losses, there is
no law that mandates such a policy. The reason is
Note: The losses which the company may suffer or is simple enough. A host of relevant factors come into
suffering may be proved by financial statements audited by play in determining cost efficient measures and in
independent auditors [Asian Alcohol Corporation vs. NLRC, choosing the Ees who will be retained or separated
G.R. No. 131108, (1999)].
to save the company from closing shop. In
determining these issues, management plays a pre-
Retrenchment is a means of last resort because in the
normal course of business losses are expected. Employer eminent role. The characterization of positions as
must have taken all measures necessary to prevent losses redundant is an exercise of business judgment on the
and it is the last measure when you touch the work force. part of the Er. It will be upheld as long as it passes
the test of arbitrariness.
Q: What are the requisites of a valid retrenchment?
Q: Philippine Tuberculosis Society, Inc. retrenched
A: 116 employees after incurring deficits amounting to
1. Written notice served on both the Ee and the 9.1 million pesos. Aside from retrenching its
DOLE at least 1 month prior to the intended date employees, the company also implemented cost
of retrenchment cutting measures to prevent such losses for
2. Payment of separation pay equivalent to at least increasing and minimizing it. The NLRC ruled that
one month pay or at least 1/2 month pay for the retrenchment was not valid on the ground that
every year of service, whichever is higher the Society did not take the seniority rule into
3. Good faith account in the selection of the retrenchment. Was
4. Proof of expected or actual losses the retrenchment done by the Society not valid for
5. The employer used fair and reasonable criteria in its failure to follow the criteria laid down by law?
ascertaining who would be retained among the
Ees, such as status, efficiency, seniority, physical A: No. The Society terminated the employment of
fitness, age, and financial hardship of certain several workers who have worked with the Society
workers [FASAP v. PAL, G.R. No. 178083, (2009)]. for great number of years without consideration for
the number of years of service and their seniority
Q: What are the criteria in selecting employees to be indicates that they had been retained for such a long
retrenched? time because of loyal and efficient service. The
burden of proving the contrary rests on the Society
A: There must be fair and reasonable criteria to be [Phil. Tuberculosis Society, Inc. vs. National Labor
used in selecting Ees to be dismissed such as: Union, G.R. No. 115414, (1998)].
1. Less preferred status;
2. Efficiency rating; Q: Due to mounting losses the former owners of
3. Seniority. [Phil. Tuberculosis Society, Inc. vs. Asian Alcohol Corporation sold its stake in the
National Labor Union, G.R. No. 115414, company to Prior Holdings. Upon taking control of
(1998)] the company and to prevent losses, Prior Holdings
implemented a reorganization plan and other cost-
Q: What is the “last in first out” (LIFO) rule? saving measures including the retrenchment of 117
employees some of which are members of the union
A: It applies inthe termination of employment in the and the majority held by non-union members. Some
line of work. What is contemplated in the LIFO rule is retrenched workers filed a complaint for illegal
that when there are two or more Ees occupying the dismissal alleging that the retrenchment was a
same position in the company affected by the subterfuge for union busting activities.

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Note: Closure contemplated is a unilateral and voluntary
Was the retrenchment made by Asian Alcohol valid act on the part of the Er to close the business
and justified? establishment.
 When the closure of the business is due to serious
business loss- there is no obligation to pay separation
A: Yes. Even though the bulk of the losses were
pay.
suffered under the old management and continued  Where closure of business is by compulsion of law
only under the new management, ultimately the new (e.g.: the land where the building is situated was
management of Prior Holdings will absorb such declared covered by the Comprehensive Agrarian
losses. The law gives the new management every Reform Law) - closure of business is NOT attributed to
right to undertake measures to save the company Er’s will thus, no obligation to pay.
from bankruptcy [Asian Alcohol Corp. vs. NLRC, G.R.
No. 131108, (1999)]. Q: Galaxie Steel Corp. decided to close down
because of serious business loses. It filed a written
Q: Differentiate redundancy from retrenchment notice with the DOLE informing its intended closure
and the termination of its employees. It posted the
A: Redundancy does not involve losses or the closing notice of closure on the corporate bulletin board.
or cessation of operations of the establishment.
Does the written notice posted by Galaxie on the
On the other hand, retrenchment involves losses, bulletin board sufficiently comply with the notice
closures or cessation of operations of establishment requirement under Art. 283 of the LC?
or undertaking not due to serious business losses or
financial reverses. A: No. In order to meet the purpose, service of the
written notice must be made individually upon each
Q: What are the requisites of a valid closure? and every Ee of the company. However, the Court
held that where the dismissal is for an authorized
A: cause, non-compliance with statutory due process
1. Written notice served on both the Ees and the should not nullify the dismissal, or render it illegal, or
DOLE at least 1 month prior to the intended date ineffectual. Still, the employer should indemnify the
of closure Ee, in the form of nominal damages, for the violation
2. Payment of separation pay equivalent to at least of his right to statutory due process [Galaxie Steel
one month pay or at least 1/2 month pay for Workers Union vs. NLRC, G.R. No. 165757, (2006)].
every year of service, whichever is higher, except
when closure is due to serious business losses Are Galaxie employees entitled to separation pay?
3. Good faith
4. No circumvention of the law A: No. Galaxie had been experiencing serious
5. No other option available to the Er financial losses at the time it closed business
operations. Art. 283 of the LC governs the grant of
Q: What is the test for the validity of closure or separation benefits "in case of closures or cessation
cessation of establishment or undertaking? of operation" of business establishments "not due to
serious business losses or financial reverses." Where,
A: The ultimate test of the validity of closure or the closure then is due to serious business losses, the
cessation of establishment or undertaking is that it LC does not impose any obligation upon the employer
must be bona fide in character. And the burden of to pay separation benefits [Galaxie Steel Workers
proving such falls upon the Er [Capitol Medical Union vs. NLRC, G.R. No. 165757, (2006)].
Center, Inc. vs. Dr. Meris, G.R. No. 155098, (2005)].
Q: Rank-and-file workers of SIMEX filed a petition
Q: When is separation pay required in case of for direct certification and affiliated with Union of
closure? Filipino Workers (UFW). Subsequently, 36 workers
of the company’s “lumpia” department and 16 other
A: Only where closure is neither due to serious workers from other departments were effectively
business losses nor due to an act of Government locked out when their working areas were cleaned
[North Davao Mining Corp vs. NLRC, G.R. No. 112546, out. The workers through UFW filed a complaint for
Mar. 13, 1996; NFL vs. NLRC, G.R. No. 127718, unfair labor practices against the company. SIMEX
(2000)]. then filed a notice of permanent shutdown/total
closure of all units of operation in the establishment
with the DOLE allegedly due to business reverses

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brought about by the enormous rejection of their employ the Ee’s of the latter except when the
products for export to the United States. transaction between the parties is colored or clothed
with bad faith. [Sundowner Dev’t Corp. vs. Drilon, G.R.
Was the closure warranted by the alleged business No. 82341, (1989)]
reverses?
XPNs:
A: The closure of a business establishment is a ground 1. Where the transferee was found to be
for the termination of the services of any Ee unless merely an alter ego of the different merging
the closing is for the purpose of circumventing the firms [Filipinas Port Services, Inc. vs. NLRC,
provisions of the law. But, while business reverses G.R. No. 97237, (1991)].
can be a just cause for terminating Ees, they must be 2. Where the transferee voluntarily agrees to
sufficiently proved. In this case, the audited financial do so [Marina Port Services, Inc. vs. Iniego,
statement of SIMEX clearly indicates that they G.R. No. 77853, (1990)].
actually derived earnings. Although the rejections
may have reduced their earnings they were not Q: Marikina Dairy Industries, Inc. decided to sell its
suffering losses. There is no question that an assets and close operations on the ground of heavy
employer may reduce its work force to prevent losses losses. The unions alleged that the financial losses
but it must be serious, actual and real otherwise this were imaginary and the dissolution was a scheme
ground for termination would be susceptible to abuse maliciously designed to evade its legal and social
by scheming Ers who might be merely feigning obligations to its employees. The unions want the
business losses or reverses in their business ventures buyers of the corporations assets restrained to
to ease out Ees [Union of Filipino Workers vs. NLRC, operate unless the members of the unions are hired
G.R. No. 90519, (1992)]. to operate the plant under the terms and conditions
specified in the collective bargaining agreements.
Q: Carmelcraft Corporation closed its business
operations allegedly due to losses of Php 1, 603.88 Is the buyer of a company’s assets required to
after the Carmelcraft Employees Union filed a absorb the employees of the seller?
petition for certification election. Carmelcraft Union
filed a complaint for illegal lockout and ULP with A: There is no law requiring that the purchaser of a
damages and claim for employment benefits. Were company’s assets should absorb its Ees and the most
the losses incurred by the company enough to justify that can be done for reasons of public policy and
closure of its operations? social justice was to direct that buyers of such assets
to give preference to the qualified separated Ees in
A: The determination to cease operations is a the filling up of vacancies in the facilities of the buyer
prerogative of management that is usually not [MDII Supervisors & Confidential Ees Ass’n (FFW) vs.
interfered with by the State as no business can be residential Assistant on Legal Affairs, G.R. Nos. L-
required to continue operating at a loss simply to 45421-23, (1977)].
maintain the workers in employment. That would be
a taking of property without due process of law which Q: What is the difference between closure and
the Er has a right to resist. But where it is manifest retrenchment?
that the closure is motivated not by a desire to avoid
further losses but to discourage the workers from A:
organizing themselves into a union for more effective CLOSURE RETRENCHMENT
negotiations with management, the State is bound to It is the reversal of Is the reduction of
intervene. The losses of less than Php 2,000 for a fortune of the Er personnel for the
corporation capitalized at Php 3 million cannot be whereby there is a purpose of cutting down
considered serious enough to call for the closure of complete cessation of on costs of operations in
the company [Carmelcraft Corp. vs. NLRC, G.R. No. business operations to terms of salaries and
90634-35, (1990)]. prevent further wages resorted to by an
financial drain upon Er because of losses in
Q: Is the transferee of the closed corporation an Er who cannot pay operation of a business
required to absorb the employees of the old anymore his Ees since occasioned by lack of
corporation? business has already work and considerable
stopped. reduction in the volume
A: GR: There is no law requiring a bona fide purchaser of business.
of assets of an on-going concern to absorb in its One of the In the case of

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prerogatives of retrenchment, however, A:


management is the for the closure of a 1. The Er shall not terminate his employment
decision to close the business or a unless:
entire establishment department due to a. There is a certification by a competent public
or to close or abolish serious business losses health authority
a department or to be regarded as an b. That the disease is of such nature or at such
section thereof for authorized cause for a stage that it cannot be cured within a
economic reasons, terminating Ees, it must period of 6 months even with proper
such as to minimize be proven that the medical treatment.
expenses and reduce losses incurred are
capitalization. substantial and actual or 2. If the disease or ailment can be cured within the
reasonably imminent; period, the Er shall not terminate the Ee but shall
that the same increased ask the Ee to take a leave. The Er shall reinstate
through a period of such Ee to his former position immediately upon
time; and that the the restoration of his normal health. (Sec. 8, Rule
condition of the I, Book VI, IRR)
company is not likely to
improve in the near Q: Is an employee suffering from a disease entitled
future. to reinstatement?
LC provides for the
Does not obligate the
payment of separation A: Yes, provided he presents a certification by a
Er for the payment of
package in case of competent public health authority that he is fit to
separation package if
retrenchment to return to work [Cebu Royal Plant vs. Deputy Minister,
there is closure of
prevent losses. G.R. No. L-58639, (1987)].
business due to
serious losses.
Q: Is the requirements of a medical certificate
mandatory?
Q: When is disease a ground for dismissal?
A: Yes, it is only where there is a prior certification
A: Where the Ee suffers from a disease, and: from a competent public authority that the disease
1. His continued employment is prohibited by law afflicting the Ee sought to be dismissed is of such
or prejudicial to his health or to the health of his nature or at such stage that it cannot be cured within
co-Ees. (Sec.8, Rule I, Book VI, IRR) 6 months even with proper medical treatment that
2. With a certification by competent public health the latter could be validly terminated from his job
authority that the disease is incurable within 6 [Tan vs. NLRC, G. R. No. 116807, (1997)].
months despite due medication and treatment
[Solis vs. NLRC, GR No. 116175, (1996)]. Note: Termination from work on the sole basis of actual
perceived or suspected HIV status is deemed unlawful. (Sec.
Note: The requirement for a medical certification cannot be 35, R.A. 8504 HIV/AIDS Law)
dispensed with; otherwise, it would sanction the unilateral
and arbitrary determination by the Er of the gravity or Q: Anna Ferrer has been working as a book keeper
extent of the Ee’s illness and thus defeat the public policy at Great Foods, Inc., which operates a chain of high-
on the protection of labor [Manly Express vs.Payong, G.R. end restaurants throughout the country, since 1970
No. 167462, (2005)]. when it was still a small eatery at Binondo. In the
early part of the year 2003, Anna, who was already
Termination of services for health reasons must be 50 years old, reported for work after a week-long
effected only upon compliance with the above
vacation in her province. It was the height of the
requisites. The requirement for a medical certificate
under Art. 284 of the LC cannot be dispensed with; SARS scare, and management learned that the first
otherwise, it would sanction the unilateral and confirmed SARS death case in the Phils, a
arbitrary determination by the Er of the gravity or “balikbayan” nurse from Canada, is a townmate of
extent of the Ee’s illness and thus defeat the public Anna. Immediately, a memorandum was issued by
policy on the protection of labor [Sy et. al vs. CA, G.R. management terminating the services of Anna on
No. 142293, (2003)]. the ground that she is a probable carrier of SARS
virus and that her continued employment is
Q: What is the procedure in terminating an prejudicial to the health of her co-Ees. Is the action
employee on the ground of disease? taken by the employer justified? (2004 Bar
Question)

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corresponding income, look for other


A: The Er’s act of terminating the employment of employment and ease the impact of the loss of
Anna is not justified. There is no showing that said Ee their jobs.
is sick with SARS, or that she associated or had contact 2. To give the DOLE the opportunity to ascertain the
with the deceased nurse. They are merely town verity of the alleged cause of termination [Phil.
mates. Furthermore, there is no certification by a Telegraph & Telephone Corp. vs. NLRC, G.R. No.
competent public health authority that the disease is 147002, (2005)].
of such a nature or such a stage that it cannot be
cured within a period of 6 months even with proper Note: Notice to both the Ees concerned and the DOLE are
medical treatment. (Implementing Rules, Book VI, Rule mandatory and must be written and given at least 1 month
1, Sec. 8, LC) before the intended date of retrenchment – and the fact
that the Ees were already on temporary lay-off at the time
notice should have been given to them is not an excuse to
Q: Discuss the rules on separation pay with regard to
forego the 1-month written notice [Sebuguero vs. NLRC,
each cause of termination. G.R. No.115394, (1995)].

A: Q: DAP Corp. ceased its operation due to the


CAUSE OF termination of its distribution agreement with Int’l
SEPARATION PAY
TERMINATION Distributors Corp. which resulted in its need to cease
Equivalent to at least 1 its business operations and to terminate the
month pay or at least 1 employment of its employees. Marcial et al. filed a
Automation
month pay for every year of complaint for illegal dismissal and for failure to give
service, whichever is higher the employees written notices regarding the
Equivalent to at least 1 termination of their employment. On the other
month pay or at least 1 hand, DAP claims that their employees actually
Redundancy
month pay for every year of knew of the termination therefore the written
service, whichever is higher notices were no longer required. Are written notices
Equivalent to 1 month pay dispensed with when the employees have actual
Retrenchment or at least ½ month pay for knowledge of the redundancy?
every year or service
Closures or A: The Ees’ actual knowledge of the termination of a
Equivalent to at least 1
cessation of company’s distributorship agreement with another
month pay or at least 1
operation not due company is not sufficient to replace the formal and
month pay for every year of
to serious written notice required by law. In the written notice,
service (if due to severe
business the Ees are informed of the specific date of the
financial losses, no
losses/financial termination, at least a month prior to the date of
separation pay
reverses effectivity, to give them sufficient time to make
Equivalent to at least 1 necessary arrangements. In this case,
month pay or at least ½ notwithstanding the Ees knowledge of the
Disease cancellation of the distributorship agreement, they
month pay for every year of
service, whichever is higher remained uncertain about the status of their
employment when DAP failed to formally inform
Note: A fraction of at least 6 months shall be considered 1 them about the redundancy [DAP Corp. vs. CA, G.R.
whole year. No. 165811, (2005)].

There is no separation pay when the closure is due to an act


of the Government.

Q: What is the purpose of the two notices served to DUE PROCESS


the Ee and the DOLE 1 month prior to termination? TWIN NOTICE REQUIREMENT

A: Q: What are the two-fold requirements of a valid


1. To give the Ees some time to prepare for the dismissal for a just cause?
eventual loss of their jobs and their

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TERMINATION OF EMPLOYMENT

A: Expounding on this provision, the SC held that “ample


1. Substantive – it must be for a just cause opportunity” connotes every kind of assistance that
2. Procedural – there must be notice and hearing management must accord the Ee to enable him to
prepare adequately for his defense including legal
Q: What are the twin requirements of procedural representation [U-BIX Corp. vs. Bravo, G.R. No.
due process [Art. 277(b), LC]? 177647, (2008)].

A: Q: What is the procedure to be observed by the


1. Notice – “Twin-notice rule” employer for the termination of employment based
a. First notice – Necessity of first notice to inform on any of the just causes for termination?
the worker of the violation and preparation for
the defense A:
b. Last notice – to give the worker a notice of the 1. A written notice should be served to the Ee
Er’s final decision specifying the ground/s for termination and giving
the said Ee reasonable opportunity to explain.
2. Hearing – two fundamental rules:
a. Hearing means ample opportunity to be heard Note: This first written notice must apprise the Ee that his
b. What the law prohibits is TOTAL ABSENCE of termination is being considered due to the acts stated in
opportunity to be heard the notice [Phil. Pizza Inc. vs. Bungabong, G.R. No. 154315,
(2005)].
 If ample opportunity to be heard is given,
there is NO violation.
2. A Hearing or conference should be held during
 Position paper – a position paper is a valid
which the Ee concerned, with the assistance of
alternative because not all cases are of
counsel, if the Ee so desires, is given the
litigation concerns. It should suffice in
opportunity to respond to the charge, provide for
matters that only involve a question of law.
his evidence and present the evidence offered
against him.
Q: What is the purpose of notice and hearing?
3. A written notice of termination – If termination is
A:
the decision of the Er, it should be served on the Ee
1. The requirement of notice is intended to inform
indicating that upon due consideration of all the
the Ee concerned of the Er’s intent to dismiss him
circumstance, grounds have been established to
and the reason for the proposed dismissal.
justify his termination.
2. On the other hand the requirement of Hearing
affords the Ee the opportunity to answer his Er’s
Note: Single notice of termination does not comply with
charges against him and accordingly to defend the requirements of the law [Aldeguer & Co., Inc. vs.
himself there from before dismissal is effected Honeyline Tomboc, G.R. No. 147633, (2008)].
[Salaw vs. NLRC, G.R. No. 90786, (1991)].
Q: To whom should notice be given?
Note: Failure to comply with the requirement of the 2
notices makes the dismissal illegal. The procedure is
A: When termination is based on just cause, notice
mandatory [Loadstar Shipping Co. Inc. vs. Mesano, G.R.
No. 138956, (2003)]. And for non-compliance with the
should be given to the Ee applying the “twin notice
due process requirements in the termination of a rule.” If the termination is based on all of the
person’s employment, a company is sanctioned to pay authorized causes, notices should be given to all Ees
a certain amount as damages [King of Kings affected and the DOLE at least one month before the
vs. Mamac, G.R. No. 166208, (2007)]. intended date of termination.

Q: Romeo has been an employee of AAA company


from 1993 to 1999 but was unable to report to work
Q: Should there exist a valid and just cause, may the due to some illness. Romeo claimed that he was
employer depart from giving the employee the right offered by AAA of Php 15,000 separation pay, on the
to be heard? contrary AAA claimed Romeo was never terminated
and even told the latter that Romeo could go back
A: No. Art. 277(b) of the LC mandates that an Er who to work anytime but Romeo clearly manifested that
seeks to dismiss an Ee must “afford the latter ample he was no longer interested in returning to work and
opportunity to be heard and to defend himself with instead asked for separation pay. Is Romeo
the assistance of his representative if he so desires.”

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terminated or considered resigned? Is Romeo their side of the controversy at hand [Caong vs.
entitled to separation pay? Regualos, G.R. No. 179428, (2011)].

A: Romeo is considered resigned. Romeo’s various HEARING; MEANING OF OPPORTUNITY TO BE


pleadings support his intention of not returning to HEARD
work on the ground that his health is failing.
Moreover, Romeo did not ask for reinstatement and Q: What is included in the opportunity to be heard?
rejected AAA Company’s offer for him to return to
work. This is tantamount to resignation. Resignation A: The first written notice to be served on the Ees
is defined as the voluntary act of an Ee who finds should contain the specific causes or grounds for
himself in a situation where he believes that personal termination against them, and a directive that the Ees
reasons cannot be sacrificed in favor of the exigency are given the opportunity to submit their written
of the service and he has no other choice but to explanation within a reasonable period. Under the
disassociate himself from his employment. Omnibus Rules, reasonable opportunity means every
kind of assistance that management must accord to
Romeo is not entitled to separation pay. There is no the Ees to enable them to prepare adequately for
provision in the LC which grants separation pay to their defense. This should be construed as a period of
voluntarily resigning Ees. In fact, the rule is that an Ee at least five (5) calendar days from receipt of the
who voluntarily resigns from employment is not notice to give the Ees an opportunity to study the
entitled to separation pay, except when it is accusation against them, consult a union official or
stipulated in the employment contract or CBA, or it is lawyer, gather data and evidence, and decide on the
sanctioned by established Er practice or policy. defenses they will raise against the complaint. To
Hence, Romeo is not entitled to separation pay in the enable the Ees to intelligently prepare their
absence of a Labor provision and a stipulation in his explanation and defenses, the notice should contain a
employment contract or CBA [Romeo Villaruel vs. Yeo detailed narration of the facts and circumstances that
Han Guan, G.R. No. 169191, (2011)]. will serve as basis for the charge against the Ees. A
general description of the charge will not suffice.
Q: Caong, Tresquio and Daluyon were employed by Lastly, the notice should specifically mention which
Regualos under a boundary agreement, as drivers of company rules, if any, are violated and/or which
his jeepneys. Later on, the three were barred by among the grounds under Art. 282 is being charged
Regualos from driving the vehicles due to against the Ees.
deficiencies in their boundary payments. Is the
policy of suspending jeepney drivers pending After serving the first notice, the Ers should schedule
payment of arrears in their boundary obligations and conduct a hearing or conference wherein the Ees
reasonable? will be given the opportunity to: (1) explain and
clarify their defenses to the charge against them; (2)
A: Yes. The policy of suspending drivers who fail to
present evidence in support of their defenses; and (3)
remit the full amount of the boundary was fair and
rebut the evidence presented against them by the
reasonable under the circumstances. Notice was
management. During the hearing or conference, the
given to the drivers who were getting lax in remitting
Ees are given the chance to defend themselves
their boundary payments. In fact, Regualos incurred a
personally, with the assistance of a representative or
considerable amount of arrears. He had to put a stop
counsel of their choice. Moreover, this conference or
to it as he also relied on these boundary payments to
hearing could be used by the parties as an
raise the full amount of his monthly amortizations on
opportunity to come to an amicable settlement [King
the jeepneys.
of Kings vs. Mamac, G.R. No. 166208, (2007)].
Caong, Tresquio and Daluyon were not denied due
process. Due process is not a matter of strict, rigid or Q: The illegal dismissal case was referred to the
formulaic process. The essence of due process is Labor Arbiter. Is a formal hearing or trial required to
simply the opportunity to be heard, or as applied to satisfy the requirement of due process?
administrative proceedings, an opportunity to explain
one’s side or an opportunity to seek a A: No. Trial-type hearings are not required in labor
reconsideration of the action or ruling complained of. cases and these may be decided on verified position
A formal or trial-type hearing is not at all times and in papers, with supporting documents and their
all instances essential, as the due process affidavits.
requirements are satisfied where the parties are
afforded fair and reasonable opportunity to explain The holding of a formal hearing or trial is
discretionary with the labor arbiter and is something

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that the parties cannot demand as a matter of right. reversed the LA’s decision, it ruled that Perez and
It is entirely within his authority to decide a labor Doria were dismissed for just cause, that they were
case before him, based on the position papers and accorded due process and that they were illegally
supporting documents of the parties, without a trial suspended for only 15 days (without stating the
or formal hearing. The requirements of due process reason for the reduction of the period of petitioners’
are satisfied when the parties are given the illegal suspension). On appeal, CA held that they
opportunity to submit position papers wherein they were dismissed without due process. Were
are supposed to attach all the documents that would petitioners illegally dismissed?
prove their claim in case it be decided that no hearing
should be conducted or was necessary [Shoppes A: Yes. The Er must establish that the dismissal is for
Manila vs. NLRC, 419 SCRA 354, (2004)]. cause in view of the security of tenure that Ees enjoy
under the Constitution and the LC. PT&T failed to
Note: It is not necessary for the affiants to appear and discharge this burden. PT&T’s illegal act of dismissing
testify and be cross-examined by the counsel for the Perez and Doria was aggravated by their failure to
adverse party. It is sufficient that the documents submitted observe due process. To meet the requirements of
by the parties have a bearing on the issue at hand and
due process in the dismissal of an Ee, an Er must
support the positions taken by them [C.F. Sharp & Co. vs.
furnish the worker with 2 written notices: (1) a
Zialcita, 495 SCRA 387, (2006)].
written notice specifying the grounds for termination
The essence of due process is simply an opportunity to be and giving to said Ee a reasonable opportunity to
heard, or as applied to administrative proceedings, an explain his side and (2) another written notice
opportunity to explain one’s side or an opportunity to seek indicating that, upon due consideration of all
a reconsideration of the action or ruling complained of circumstances, grounds have been established to
[PLDT vs. Bolso, 530 SCRA 550, (2007)]. justify the Er's decision to dismiss the Ee [Perez. vs.
Phil. Telegraph and Telephone Company, G.R. No.
Q: Who has the burden of proof in termination 152048, (2009)].
cases?
Q: What are the guidelines in determining whether
A: The burden of proof rests upon the Er to show the penalty imposed on employee is proper?
that the dismissal of the Ee is for a just cause, and
failure to do so would necessarily mean that the A:
dismissal is not justified, consonant with the 1. Gravity of the offense
constitutional guarantee of security of tenure. 2. Position occupied by the Ee
3. Degree of damage to the Er
Note: Due process refers to the process to be followed; 4. Previous infractions of the same offense
burden of proof refers to the amount of proof to be
5. Length of service [ALU-TUCP vs. NLRC, G.R. No.
adduced. In money claims, the burden of proof as to the
120450, (1999); PAL vs. PALEA, G.R. No.L-24626,
amount to be paid the Ees rests upon the Er since he is in
custody of documents that would be able to prove the (1974)]
amount due, such as the payroll.
Q: Felizardo was dismissed from Republic Flour
Q: What is the degree of proof required? Mills-Selecta ice cream Corporation for dishonesty
and theft of company property for bringing out a
A: In administrative or quasi-judicial proceedings, pair of boots, 1 piece aluminum container and 15
substantial evidence is considered sufficient in pieces of hamburger patties. Is the penalty of
determining the legality of an Er’s dismissal of an Ee dismissal commensurate with the offense
[Pangasinan III Electric Cooperative, Inc. vs. NLRC, committed?
G.R. No. 89878, (1992)].
A: There is no question that the Er has the inherent
Q: Perez and Doria were employed by PT&T. After right to discipline its Ees which includes the right to
investigation, Perez and Doria were placed on dismiss. However this right is subject to the police
preventive suspension for 30 days for their alleged power of the State. As such, the Court finds that the
involvement in anomalous transactions in the penalty imposed upon Felizardo was not
shipping section. PT&T dismissed Perez and Doria commensurate with the offense committed
from service for falsifying documents. They filed a considering the value of the articles he pilfered and
complaint for illegal suspension and illegal dismissal. the fact that he had no previous derogatory record
The LA found that the suspension and the during his 2 years of employment in the company.
subsequent dismissal were both illegal. The NLRC Moreover, Felizardo was not a managerial or

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confidential Ee in whom greater trust is reposed by opportunity to


management and from whom greater fidelity to duty be heard, a
is correspondingly expected [ALU-TUCP vs. NLRC, G.R. notice of the
No. 120450, (1999)]. decision to
dismiss.
Q: Is hearing an indispensible part of due process? The Worker is an There is no
requirement inactive party hearing
A: No. Art. 277(b) of the LC provides that, in cases of under Art. 277 in the cause for requirement in
termination for a just cause, an Ee must be given (b) of notice termination. diseases but
“ample opportunity to be heard and to defend AND hearing ONLY notice there is notice
himself.” Thus, the opportunity to be heard afforded applies only in with DOLE AND requirement to
by law to the Ee is qualified by the word “ample” Art. 282 notice to worker, but NO
which ordinarily means “considerably more than because the Er worker is notice to DOLE
adequate or sufficient.” In this regard, the phrase is accusing the required. No
“ample opportunity to be heard” can be reasonably worker that the need for a
interpreted as extensive enough to cover actual latter hearing
hearing or conference. To this extent, Sec. 2(d), Rule I committed an because due
of the IRR of Book VI of the LC requiring a hearing and act or omission process is
conference during which the Ee concerned is given constituting a found in LC
the opportunity to respond to the charge is in cause for (Art. 283) not in
conformity with Art. 277(b). termination of Constitution
his according to
Significantly, Sec. 2(d), Rule I of the IRR of Book VI of
employment. Agabon.
the LC itself provides that the so-called standards of
due process outlined therein shall be observed Note: in Art. 277
“substantially,” not strictly. This is a recognition that (b) in relation
while a formal hearing or conference is ideal, it is not to Art. 283, if the
an absolute, mandatory or exclusive avenue of due closure of
process [Perez vs. PT&T, G.R. No. 152048, (2009)]. business will
result in a mass
Q: If the dismissal is for just or authorized cause but layoff and serious
the requirement of due process of notice and labor
hearing were not complied with, should the dispute, the SLE
dismissal be held illegal? can
enjoin the Er as
regards
A: No, in Agabon vs. NLRC (G.R. No. 158693, 2004), it mass termination
was held that when dismissal is for just or authorized
cause but due process was not observed, the Possible
dismissal should be upheld. Effect Liability of ER
Situations
a.) With Just NO Liability
The Er, however, should be held liable for non-
or Authorized
compliance with the procedural requirements of due Termination
Cause Note: Separation
process in the form of damages. VALID Pay if for
b.) With Due
Process Authorized Cause
Procedural Due Process under Art. 282-284 of the LC
a.) Without Reinstatement +
as applied in the Agabon Case
Just or Full
Art. 282 Art. 283 Art. 284 Backwages
The Er must give The Er must Er may Authorized Termination
the Ee a notice give the Ee and terminate the Cause INVALID
Note: If
specifying the the DOLE services of his b.) With Due
Reinstatement not
grounds for written notices Ee. Process
possible—
which dismissal 30 days prior to Separation Pay
is sought a the effectivity a.) Without Reinstatement +
hearing or an of his Just or Termination Full
opportunity to separation. Authorized INVALID Backwages
be heard and Cause
after hearing or b.) Without Note: If

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Due Process Reinstatement not rendered less than 5 years of service in the
possible— company. PAL acknowledged receipt of said letters
Separation Pay and among the pilots whose “protest resignation or
Liable for retirement” was accepted by PAL were Enriquez and
a.) With Just noncompliance Ecarma.
or Authorized With procedural
Termination
Cause requirements Before their readmission, PAL required Enriquez and
VALID
b.) Without Ecarma to accept 2 conditions, namely: that they
Due Process Note: Separation sign conformity to PAL’s letter of acceptance of their
Pay if for
retirement and or resignation and that they submit
Authorized Cause
an application for employment as new employees
without protest or reservation. As a result of this
Note: The Agabon ruling was modified by JAKA Food
Processing vs. Pacot [G.R. No. 515378, (2005)] where it was their seniority rights were lost.
held that:
Are the pilots entitled to the restoration of their
1. If based on just cause (Art. 282, LC) but the Er failed to seniority rights?
comply with the notice requirement, the sanction to
be imposed upon him should be tempered because A: No, an Ee has no inherent right to seniority. He has
the dismissal process was, in effect, initiated by an act only such rights as may be based on a contract,
imputable to the Ee; and statute, or an administrative regulation relative
2. If based on authorized causes (Art. 283, LC) but the Er
thereto. Seniority rights which are acquired by an Ee
failed to comply with the notice requirement, the
sanction should be stiffer because the dismissal through long-time employment are contractual and
process was initiated by Er’s exercise of his not constitutional. The discharge of an Ee thereby
management prerogative. terminating such rights would not violate the
Constitution. When the pilots tendered their
RELIEFS FOR ILLEGAL DISMISSAL respective retirement or resignation and PAL
immediately accepted them, both parties mutually
Q: What is the “Twin Remedies Rule”? terminated the contractual employment relationship
between them thereby curtailing whatever seniority
A: In case where the worker is illegally terminated, his rights and privileges the pilots had earned through
remedies are: the years.

1. Reinstatement without loss of seniority Q: What does the term “full backwages” mean?
rights
2. Full backwages A: The LC as amended by R.A. 6715 points to "full
backwages" as meaning exactly that, i.e., without
Note: Full backwages means no deduction deducting from backwages the earnings derived
elsewhere by the concerned Ee during the period of
3. Separation pay in lieu of reinstatement his illegal dismissal [Buenviaje vs. CA, G.R. 147806,
4. Damages, including Attorney’s fees (2002)].

Q: Does the offer to reinstate the illegally dismissed Q: When can “separation in lieu of reinstatement”
employee affect the liability of the erring employer? be awarded?

A: No. At any rate, sincere or not, the offer of A:


reinstatement could not correct the earlier illegal 1. Doctrine of Strained Relations (applies to
dismissal of the Ee. The Er incurred liability under the confidential and managerial Ees only)
LC from the moment an Ee was illegally dismissed, 2. In case of position has been abolished (applies to
and the liability did not abate as a result of the Er's both managerial and rank and file Ees)
repentance [Ranara vs.NLRC, 212 SCRA 631 (1992)].
Note: Moral and exemplary damages may also be awarded.
Q: PAL dismissed strike leader Capt. Gaston as a
result of which the Union resolved to undertake the Q: What is the prescriptive period for filing an action
grounding of all PAL planes and the filing of for illegal dismissal?
applications for “protest retirement” of members
who had completed 5 years of continuous service, A: An action for reinstatement by reason of illegal
and “protest resignation” for those who had dismissal is one based on an injury which may be

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brought within 4 years from the time of dismissal


pursuant to Art. 1146 of the NCC [Azcor Note: In such cases, it would be more prudent to order
Manufacturing vs. NLRC, 303 SCRA 26 (1999)]. payment of separation pay instead of reinstatement
[Quijano vs. Mercury Drug Corporation, G.R. No. 126561,
(1998)].
REINSTATEMENT
PENDING APPEAL (ART. 223, LC)
Q: What is an order of reinstatement?
Q: What is reinstatement?
A: Reinstatement means restoration to a state or
condition from which one had been removed or
A: It is the restoration of the Ee to the state from
separated. The person reinstated assumes the
which he has been unjustly removed or separated
position he had occupied prior to his dismissal.
without loss of seniority rights and other privileges.
Reinstatement presupposes that the previous
position from which one had been removed still
Q: What are the forms of reinstatement?
exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the
A:
one previously occupied by the Ee.
1. Actual or physical – the Ee is admitted back to
work
An order for reinstatement entitles an employee to
2. Payroll – the Ee is merely reinstated in the
receive his accrued backwages from the moment the
payroll
reinstatement order was issued up to the date when
the same was reversed by a higher court without fear
Note: An order of reinstatement by the LA is not the same
as actual reinstatement of a dismissed or separated Ee, of refunding what he had received [Pfizer vs. Velasco,
however it is immediately executory even pending appeal. G.R. 177467, (2011)].
Thus, until the Er continuously fails to actually implement
the reinstatement aspect of the decision of the LA, their Q: Distinguish Arts. 223 from 279 of the LC.
obligation to the illegally dismissed Ee, insofar as accrued
backwages and other benefits are concerned, continues to A:
accumulate. It is only when the illegally dismissed Ee Art. 223 Art. 279
receives the separation pay (in case of strained relations)
May be availed of as
that it could be claimed with certainty that the Er-Ee Presupposes that the
relationship has formally ceased thereby precluding the soon as the LA renders a
judgment has already
possibility of reinstatement [Triad Security & Allied Services, judgment declaring that
become final and
Inc. et al vs. Ortega, G.R. No. 160871, (2006)]. the dismissal of the Ee is
executory. Consequently,
illegal and ordering said
there is nothing left to be
Q: Is an illegally dismissed employee entitled to reinstatement. It may be
done except the
reinstatement as a matter of right? availed of even pending
execution thereof.
appeal
A: GR: Yes.
Note: An award or order for reinstatement is self-
XPNs: Proceeds from an illegal dismissal wherein executory. It does not require the issuance of a writ of
reinstatement is ordered but cannot be carried execution [Pioneer Texturizing Corp. vs. NLRC, G.R. No.
out as in the following cases: 118651, (1997)].
1. Reinstatement cannot be effected in view of
the long passage of time or because of the Q: What is the rule on wages during reinstatement
realities of the situation. pendency of appeal?
2. It would be inimical to the Ers’ interest.
3. When reinstatement is no longer feasible. A: Dismissed Ee whose case was favorably decided
4. When it will not serve the best interest of the by the LA is entitled to receive wages pending appeal
parties involved. upon reinstatement, which is immediately executory.
5. Company will be prejudiced by reinstatement. Unless there is a restraining order, it is ministerial
6. When it will not serve a prudent purpose. upon the LA to implement the order of reinstatement
7. When there is resultant strained relation and it is mandatory on the Er to comply therewith.
(applies to both confidential and managerial
Ees only). After the LA’s decision is reversed by a higher
8. When the position has been abolished (applies tribunal, the Ee may be barred from collecting the
to managerial, supervisory and rank-and-file accrued wages, if it is shown that the delay in
Ees).

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enforcing the reinstatement pending appeal was prejudice the Ee, because technicalities of law and
without fault on the part of the Er. procedure are frowned upon in labor proceedings
[Pheschem Industrial Corp. vs. Moldez, G.R. No.
The test is two-fold: (1) there must be actual delay or 1161158, (2005)].
the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) In any case, Sec. 2(c), Rule 7 of the Rules of Court
the delay must not be due to the Er’s unjustified act provides that a pleading shall specify the relief
or omission. If the delay is due to the Er’s unjustified sought, but may add a general prayer for such further
refusal, the Er may still be required to pay the salaries or other reliefs as may be deemed just and equitable.
notwithstanding the reversal of the LA’s decision Under this rule, a court can grant the relief warranted
[Garcia vs. PAL, G.R. No. 164856, (2009)]. by the allegation and the proof even if it is not
specifically sought by the injured party; the inclusion
Q: PAL dismissed Garcia, for violating PAL’s Code of of a general prayer may justify the grant of a remedy
Discipline for allegedly sniffing shabu in PAL’s different from or together with the specific remedy
Technical Center Tool Room Section. Garcia then sought, if the facts alleged in the complaint and the
filed for illegal dismissal and damages where the LA evidence introduced so warrant. The prayer in the
ordered PAL to immediately reinstate Garcia. On complaint for other reliefs equitable and just in the
appeal, the NLRC reversed the decision and premises justifies the grant of a relief not otherwise
dismissed Garcia’s complaint for lack of merit. specifically prayed for [Prince Transport, Inc. vs.
Garcia’s motion for reconsideration was denied by Garcia et. al, G.R. No. 167291, (2011)].
the NLRC. It affirmed the validity of the writ and the
notice issued by the LA but suspended and referred Q: A complaining employee obtained a favourable
the action to the Rehabilitation Receiver for decision in an illegal dismissal case. The Labor
appropriate action. May Garcia collect wages during Arbiter ordered her immediate reinstatement. The
the period between the LA’s order of reinstatement employer opted payroll reinstatement pending
pending appeal and the NLRC decision overturning appeal. The NLRC reversed the decision of the LA
that of the LA? ruled that the dismissal was valid. The employer
stopped the payroll reinstatement. The employee
A: Art. 223(3) of the LC provides that the decision of elevated the case to the CA, and eventually to the
the LA reinstating a dismissed or separated Ee, SC. The SC upheld the dismissal. Is the employee
insofar as the reinstatement aspect is concerned, entitled to continued payroll reinstatement after the
shall immediately be executory, pending appeal. NLRC decision?

Even if the order of reinstatement of the LA is A: No. The Ee is not entitled to continued payroll
reversed on appeal, it is obligatory on the part of the reinstatement. The decision of the NLRC on appeals
Er to reinstate and pay the wages of the dismissed Ee from decisions of the LA shall become final and
during the period of appeal until reversal by the executory after 10 calendar days from receipt thereof
higher court. On the other hand, if the Ee has been by the parties. That the CA may take cognizance of
reinstated during the appeal period and such and resolve a petition for certiorari for the
reinstatement order is reversed with finality, the Ee is nullification of the decisions of the NLRC on
not required to reimburse whatever salary he jurisdictional and due process considerations does
received for he is entitled to such, more so if he not affect the statutory finality of the NLRC decision.
actually rendered services during the period. Since the NLRC decision which upheld the dismissal
became final, the Er was correct in stopping the
Q: May the Court order the reinstatement of a payroll reinstatement of the Ee [Bago v. NLRC, G.R.
dismissed employee even if the prayer of the No. 170001, (2007)].
complaint did not include such relief?
Q: Can the employer demand that the employee
A: Yes. So long as there is a finding that the Ee was reimburse the amount that had been paid under the
illegally dismissed, the court can order the period of payroll reinstatement?
reinstatement of an Ee even if the complaint does not
include a prayer for reinstatement, unless, of course A: No. Even if the order of reinstatement of the LA is
the Ee has waived his right to reinstatement. By law, reversed on appeal, it is obligatory on the part of the
an Ee who is unjustly dismissed is entitled to Er to reinstate and pay the wages of the dismissed Ee
reinstatement among others. The mere fact that the during the period of appeal until reversal by the
complaint did not pray for reinstatement will not higher court.

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engendered between the parties as a result of


If the Ee has been reinstated during the appeal period litigation. That is human nature [Anscor Transport vs.
and such reinstatement order is reversed with NLRC, G.R. No. 85894, (1990)].
finality, the Ee is not required to reimburse whatever
salary he received for he is entitled to such, more so Besides, no strained relations should arise from a
if he actually rendered services during the period valid and legal act of asserting one's right; otherwise
[Garcia v. PAL, G.R. No. 164856, (2009)]. an Ee who shall assert his right could be easily
separated from the service, by merely paying his
Q: What happens if there is an Order of separation pay on the pretext that his relationship
Reinstatement but the position is no longer with his Er had already become strained [Globe
available? Mackay Cable & Wire Corp. vs. NLRC, G.R. No. 82511,
(1992)].
A: The Ee should be given a substantially equivalent
position. If no substantially equivalent position is SEPARATION PAY IN LIEU OF REINSTATEMENT
available, reinstatement should not be ordered
because that would in effect compel the Er to do the Q: How can separation pay be viewed?
impossible. In such a situation, the Ee should merely
be given a separation pay consisting of 1-month A: Under present laws and jurisprudence, separation
salary for every year of service [Grolier Int’l Inc. vs. pay may be viewed in 4 ways:
ELA, G.R. No. 83523, (1989)]. 1. In lieu of reinstatement in illegal dismissal cases,
where Ee is ordered reinstated but
Q: What is the “strained relations” rule? reinstatement is not feasible.
2. As Er’s statutory obligation in cases of legal
A: When the Er can no longer trust the Ee and vice termination due to authorized causes under Arts.
versa or there were imputations of bad faith to each 283 and 284 of the LC.
other, reinstatement could not effectively serve as a 3. As financial assistance, as an act of social justice
remedy. This rule applies only to positions which and even in case of legal dismissal under Art. 282
require trust and confidence [Globe Mackay vs. NLRC, of the LC.
G.R. No. 82511, (1992)]. 4. As employment benefit granted in CBA or
company policy. (Poquiz, 2005)
Note: Under the circumstances where the employment
relationship has become so strained to preclude a Q: Respondents are licensed drivers of public utility
harmonious working relationship and that all hopes at jeepneys owned by Moises Capili. When Capili
reconciliation are naught after reinstatement, it would be
assumed ownership and operation of the jeepneys,
more beneficial to accord the Ee backwages and separation
the drivers were required to sign individual
pay.
contracts of lease of the jeepneys. The drivers
Q: What must be proven before the strained gathered the impression that signing the contract
relations rule can be applied to a particular case? was a condition precedent before they could
continue driving. The drivers stopped plying their
A: assigned routes and a week later filed with the
1. The Ee concerned occupies a position where he Labor Arbiter a complaint for illegal dismissal
enjoys the trust and confidence of his Er; and praying not for reinstatement but for separation
2. That it is likely if the Ee is reinstated, an pay. Are the respondents entitled to separation
atmosphere of antipathy and antagonism may pay?
be generated as to adversely affect the
efficiency and productivity of the Ee concerned A: No. When the drivers voluntarily chose not to
[Globe Mackay Cable & Wire Corp. vs. NLRC G.R. return to work anymore, they must be considered as
No. 82511, (1992)]. having resigned from their employment. The
common denominator of those instances where
Q: Does the strained relations rule always bar payment of separation pay is warranted is that the
reinstatement in all cases? employee was dismissed by the Er [Capili vs. NLRC,
G.R. 117378, (1997)].
A: No. The rule should be applied on a case to case
basis, based on each case’s peculiar conditions and Q: Two groups of seasonal workers claimed
not universally. Otherwise, reinstatement can never separation benefits after the closure of Phil. Tobacco
be possible simply because some hostility is invariably processing plant in Balintawak and the transfer of its

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tobacco operations to Candon, Ilocos Sur. Phil. of his actual reinstatement [Lansangan vs. Amkor
Tobacco refused to grant separation pay to the Technology Philippines, Inc., G.R. No. 177026, (2009)].
workers belonging to the first batch, because they
had not been given work during the preceding year BACKWAGES
and, hence, were no longer in its employ at the time
it closed its Balintawak plant. Likewise, it claims Q: What are backwages?
exemption from awarding separation pay to the
second batch, because the closure of its plant was A: It is the relief given to an Ee to compensate him for
the lost earnings during the period of his dismissal. It
due to "serious business losses," as defined in Art.
presupposes illegal termination.
283 of the LC. Both labor agencies held that the two
groups were entitled to separation pay equivalent to
Note: Entitlement to backwages of the illegally dismissed
1/2 month salary for every year of service, provided
Ee flows from law. Even if he does not ask for it, it may be
that the employee worked at least 1 month in a given. The failure to claim backwages in the complaint for
given year. Is the separation pay granted to an illegal dismissal is a mere procedural lapse which cannot
illegally dismissed employee the same as that defeat a right granted under substantive law [St. Michael’s
provided under Art. 283 of the LC in case of Institute vs. Santos, G.R. No. 145280, (2001)].
retrenchment to prevent losses?
Q: What is the basis of awarding backwages to an
A: No. The separation pay awarded to Ees due to illegally dismissed employee?
illegal dismissal is different from the amount of
separation pay provided for in Art. 283 of the LC. A: The payment of backwages is generally granted on
Prescinding from the above, Phil. Tobacco is liable for the ground of equity. It is a form of relief that
illegal dismissal and should be responsible for the restores the income that was lost by reason of the
reinstatement of the first group and the payment of unlawful dismissal; the grant thereof is intended to
their backwages. However, since reinstatement is no restore the earnings that would have accrued to the
longer possible as Phil. Tobacco have already closed dismissed Ee during the period of dismissal until it is
its Balintawak plant, members of the said group determined that the termination of employment is
should instead be awarded normal separation pay (in for a just cause. It is not private compensation or
lieu of reinstatement) equivalent to at least one damages but is awarded in furtherance and
month pay, or one month pay for every year of effectuation of the public objective of the LC. Nor is it
service, whichever is higher. It must be stressed that a redress of a private right but rather in the nature of
the separation pay being awarded to the first group is a command to the Er to make public reparation for
due to illegal dismissal; hence, it is different from the dismissing an Ee either due to the former’s unlawful
amount of separation pay provided for in Art. 283 in act or bad faith [Tomas Claudio Memorial College
case of retrenchment to prevent losses or in case of Inc., vs. CA, G.R. No. 152568, (2004)].
closure or cessation of the Er’s business, in either of
which the separation pay is equivalent to at least one Q: What is the period covered by the payment of
(1) month or one-half (1/2) month pay for every year backwages?
of service, whichever is higher [Phil. Tobacco Flue-
Curing & Redrying Corp. vs. NLRC, G.R. No. 127395, A: The backwages shall, from the time that wages are
(1998)]. unlawfully withheld until the time of actual
reinstatement or, if reinstatement is no longer
Q: Does separation pay apply in cases of legal feasible, until the finality of judgment awarding
dismissal? backwages, cover the period from the date of
dismissal of the employee up to the date of:
A: No. Art. 223 of the LC concerns itself with an 1. Actual reinstatement, or if reinstatement is no
interim relief, granted to a dismissed or separated Ee longer feasible
while the case for illegal dismissal is pending appeal. 2. Finality of judgment awarding backwages
It does not apply where there is no finding of illegal [Buhain vs. CA, G.R. 143709, (2002)]
dismissal. On the other hand, an Ee who is unjustly
dismissed from work shall be entitled to Note: The backwages to be awarded should not be
reinstatement without loss of seniority rights and diminished or reduced by earnings elsewhere during the
other privileges and to his full backwages, inclusive of period of his illegal dismissal. The reason is that the Ee
while litigating the illegality of his dismissal must earn a
allowances, and to his other benefits or their
living to support himself and his family [Bustamante vs.
monetary equivalent computed from the time his
NLRC, G.R. No. 111651, Mar. 15, 1996; Buenviaje vs. CA,
compensation was withheld from him up to the time G.R. No. 147806, (2002)].

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2. Death, physical or mental incapacity of the


COMPUTATION employee
3. Business reverses
Q: What is included in the computation of 4. Detention in prison
backwages?
LIMITED BACKWAGES
A: They cover the following:
1. Transportation and emergency allowances Q: What is the rule on backwages for dismissed
2. Vacation or SIL and sick leave employees?
th
3. 13 month pay
A: GR: In the case of Osmalik Bustamante, et al. v.
Note: Facilities such as uniforms, shoes, helmets and NLRC and Evergreen Farms, Inc., the SC held that the
ponchos should not be included in the computation of passing of R.A. 6715, particularly Sec. 34, which took
backwages because said items are given for free, to be use effect on March 21, 1989, amended Art. 279 of the
only during official tour of duty not for private or personal
LC, which now states in part:
use.

The award of backwages is computed on the basis of 30-day ART. 279. Security of Tenure. - An Ee who is
month [JAM Trans Co. vs. Flores, G.R. No. L-63555, (1993)]. unjustly dismissed from work shall be
entitled to reinstatement without loss of
Q: How are the backwages of a probationary seniority rights and other privileges and to
employee who fails to qualify as a regular employee his full backwages, inclusive of allowances,
computed? and to his other benefits or their monetary
equivalent computed from the time his
A: The backwages that should be awarded to compensation was withheld from him up to
respondent shall be reckoned from the time of her the time of his actual reinstatement.
constructive dismissal until the date of the
termination of her employment. The computation Verily, the evident legislative intent as expressed in
should not cover the entire period from the time her R.A. 6715, is that the backwages to be awarded to an
compensation was withheld up to the time of her illegally dismissed Ee, should not, as a general rule, be
actual reinstatement. This is because as a diminished or reduced by the earnings derived by him
probationary Ee, the lapse of probationary elsewhere during the period of his illegal dismissal.
employment without appointment as a regular Ee of The underlying reason for this ruling is that the Ee,
effectively severed the Er-Ee relationship between while litigating the legality (illegality) of his dismissal,
the parties [Robinsons Galleria vs. Ranchez, G.R. No. must still earn a living to support himself and his
177937, (2011)]. family. Corollary thereto, full backwages have to be
paid by the Er as part of the price or penalty he has to
Q: Is an employee entitled to backwages even after pay for illegally dismissing his Ee. Thus, the provision
the closure of the business? calling for “full backwages” to illegally dismissed
employees is clear, plain and free from ambiguity
A: No. The closure of the business rendered the and, therefore, must be applied without attempted
reinstatement of complainant to an Ees previous or strained interpretation.
position impossible but she is still entitled to the
payment of backwages up to the date of dissolution XPN: Award of backwages to a separated Ee
or closure. An Er found guilty of ULP in dismissing his may be limited for a certain number of years
Ee may not be ordered to pay backwages beyond the considering good faith on the part of the Er
date of closure of business where such closure was in terminating the employee, which period
due to legitimate business reasons and not merely an shall depend on the attending circumstances
attempt to defeat the order of reinstatement [Pizza of the case. [Victory Liner, Inc. v. Race, G.R.
Inn vs. NLRC, G.R. No. 74531, (1988)]. No. 164820 (2008)].

Q: What are the circumstances that prevent award Note: The rule providing for the entitlement of an illegally
dismissed Ee to only three years backwages “without
of backwages?
deduction or qualification” to obviate the need for further
proceedings in the course of execution, otherwise known as
A: the “Mercury Drug Rule,” has long been abandoned since
1. Dismissal for cause March 21, 1989 [BPI Employees Union & Uy v. BPI, et al.,
G.R. No. 137863, (2005)].

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rendered impossible, unreasonable, or unlikely as


PREVENTIVE SUSPENSION when there is a demotion in rank or diminution in pay
or when a clear discrimination, insensibility, or
Q: What is preventive suspension? disdain by an employer becomes unbearable to the
employee leaving the latter with no other option but
A: During the pendency of the investigation, the Er to quit [The University of Immaculate Conception vs.
may place the Ee under preventive suspension NLRC, G.R. No. 181146, (2011)].
leading to termination when there is an imminent
threat or a reasonable possibility of a threat to the Q: What are the reliefs entitled to illegally or
lives and properties of the Er, his family and constructively dismissed employees?
representatives as well as the offender’s co-workers
by the continued service of the Ee. A: An an illegally or constructively dismissed Ee is
entitled to: (1) either reinstatement, if viable, or
Q: What is the duration of preventive suspension? separation pay, if reinstatement is no longer viable;
and (2) backwages. These two reliefs are separate
A: It should not last for more than 30 days. The Ee and distinct from each other and are awarded
should be made to resume his work after 30 days. It conjunctively [Robinsons Galleria vs. Ranchez, G.R.
can be extended provided the Ee’s wages are paid No. 177937, (2011)].
after the 30-day period.
Q: Reynaldo was hired by Geminilou Trucking
This period is intended only for the purpose of Service (GTS) as a truck driver to haul and deliver
investigating the offense to determine whether he is products of San Miguel Pure Foods Company, Inc. He
to be dismissed or not. It is not a penalty. was paid Php 400 per trip and made 4 trips a day. He
claimed that he was requested by GTS to sign a
Note: The Er may continue the period of preventive contract entitled “Kasunduan Sa Pag-upa ng
suspension provided that he pays the salary of the Ee. If Serbisyo” which he refused as he found it to alter his
more than 1 month, the Ee must actually be reinstated or status as a regular employee to merely contractual.
reinstated in the payroll. Officers are liable only for the He averred that on account of his refusal to sign the
offense committed if done with malice.
Kasunduan, his services were terminated prompting
him to file a complaint before the NLRC for
Q: Cantor and Pepito were preventively suspended constructive dismissal against the GTS. Would
pending application for their dismissal by Manila Reynaldo’s refusal to sign the Kasunduan adequately
Doctor’s Hospital after being implicated by one support his allegation of constructive dismissal?
Macatubal when they refused to help him when he
was caught stealing x-ray films from the hospital. A: No. The test of constructive dismissal is whether a
Was the preventive suspension of Cantor and Pepito reasonable person in the Ee’s position would have
proper? felt compelled to give up his job under the
circumstances. In the present case, the records show
A: No. Where the continued employment of an Ee that the lone piece of evidence submitted by
poses a serious and imminent threat to the life and Reynaldo to substantiate his claim of constructive
property of the Er or on his co-Ees, the Ees’ dismissal is an unsigned copy of the Kasunduan. This
preventive suspension is proper. In this case, no such falls way short of the required quantum of proof
threat to the life and property of the Er or of their co- which is substantial evidence, or such relevant
Ee’s is present and they were merely implicated by evidence as a reasonable mind might accept as
the Macatubal [Manila Doctors Hospital vs. NLRC, adequate to support a conclusion. Reynaldo was not
G.R. No 64897, (1985)]. dismissed, but that he simply failed to report for work
after an altercation with a fellow driver [Madrigalejos
vs. Geminilou Trucking Service, G.R. No. 179174,
(2008)].

Q: Flores, a conductor of JAM Transportation Co.,


CONSTRUCTIVE DISMISSAL Inc., had an accident where he had to be
hospitalized for a number of days. Upon reporting
Q: What is constructive dismissal? back to the company he was told to wait. For several
days this continued and he was promised a route
A: Constructive dismissal occurs when there is assignment which did not materialize. Upon
cessation of work because continued employment is speaking to Personnel Manager Medrano, he was

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121 FACULTY OF CIVIL LAW
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told that he will be accepted back to work but as a Q: Does the validity of suspending operation excuse
new employee. Flores rejected the offer because it the employer from paying separation pay?
would mean forfeiture of his 18 years of service to
the company. Is the offer for reinstatement as a new A: No. The validity of its act of suspending its
employee a constructive dismissal? operations does not excuse it from paying separation
pay. Art. 283 of the LC is emphatic that an Ee, who
A: Yes. Flores’ re-employment as a new Ee would be was dismissed due to cessation of business operation,
very prejudicial to him as it would mean a demotion is entitled to the separation pay equivalent to one
in rank and privileges and the retirement benefits for month pay or at least 1/2 month pay for every year of
his previous 18 years of service with the company service, whichever is higher. And it is jurisprudential
would simply be considered as non-existent. It that separation pay should also be paid to Ees even if
amounts to constructive dismissal. [JAM the closure or cessation of operations is not due to
Transportation Co., Inc. vs. Flores, G.R. No. 82829, losses [Manila Minings Corp. Employees Assn. vs.
(1993)] Manila Mining Corp., G.R. Nos. 178222-23, (2010)].

Q: Quinanola was transferred from the position of Q: Under what circumstances is the award of
Executive Secretary to the Executive Vice President financial assistance proper?
and General Manager to the Production Dep’t as
Production Secretary. Quinanola rejected the A: The general rule is that financial assistance is
assignment and filed a complaint for illegal dismissal allowed only in instances where the Ee is validly
due to constructive dismissal. Did the transfer of dismissed for causes other than serious misconduct
Quinanola amount to constructive dismissal? or those reflecting on his moral character.
Nonetheless, financial assistance may be allowed as a
A: No. Quinanola’s transfer was not unreasonable measure of social justice and exceptional
since it did not involve a demotion in rank or a circumstances, and as an equitable concession for
change in her place of work nor a diminution in pay, balancing the interests of the Er with those of the
benefits and privileges. It did not constitute worker. Where there is neither a dismissal nor
constructive dismissal. Furthermore, an employee’s abandonment, it has been previously held that
security of tenure does not give him a vested right in separation pay may be awarded under appropriate
his position as would deprive the company of its circumstances. Also, in cases where there is no
prerogative to change his assignment or transfer him dismissal, the status quo between the Ee and Er
where he will be most useful. [Philippine Japan Active should be maintained; and in lieu of reinstatement
Carbon Corp. vs. NLRC, G.R. No. 83239, (1989)] the grant of separation pay to Ee is proper. [Luna vs.
Allado Construction Co., Inc., G.R. No. 175251,
Q: Sangil was a utility man/assistant steward of the (2011)]
passenger cruise vessel Crown odyssey under a one-
year contract. Sangil suffered head injuries after an Q: What is a floating status? When is an employee in
altercation with a Greek member of the crew. He a floating status considered to be constructively
informed the captain that he no longer intends to dismissed?
return aboard the vessel for fear that further trouble
may erupt between him and the other Greek A: Pursuant to Art. 286 of the LC, the bona fide
crewmembers of the ship. Was Sangil constructively suspension of the operation of a business
dismissed? undertaking for a period not exceeding 6 months, or
the fulfillment by the Ee of a civic duty shall not
A: Yes. There is constructive dismissal where the act terminate employment. In all such cases the
of a seaman in leaving ship was not voluntary but was employer shall reinstate the employee to his former
impelled by a legitimate desire for self-preservation position without loss of seniority rights if he indicates
or because of fear for his life Constructive dismissal his desire to resume his work not later than one
does not always involve diminution in pay or rank but month from the resumption of operations of his Er or
may be inferred from an act of clear discrimination, from his relief from the military or civic duty. Only
insensibility or disdain by an Er may become when such a "floating status" lasts for more than 6
unbearable on the part of the Ee that it could months that the Ee may be considered to have been
foreclose any choice by him except to forego his constructively dismissed [Nippon Housing Phil. Inc.,
continued employment. [Sunga Ship Management vs. Leynes, G.R. No. 177816, (2011)
Phil., Inc. vs. NLRC, G.R. No. 119080, (1998)]

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MANAGEMENT PREROGATIVE bound by law or contract to grant it, it just the same
granted the benefit.
Q: What is Management Prerogative?
Q: Is the exercise of management prerogative
A: GR: It is the right of an Er to regulate, according to unlimited?
his own discretion and judgment, all aspects of
employment, including: A: No. It is circumscribed by limitations found in:
1. Hiring 1. Law,
2. Work assignments 2. CBA, or
3. Working methods 3. General principles of fair play and justice
4. Time, place and manner of work
5. Tools to be used Furthermore, a line must be drawn between
6. Processes to be followed management prerogatives regarding business
7. Supervision of workers operations per se and those which affect the rights of
8. Working regulations Ees. In treating the latter, management should see to
9. Transfer of Ees it that its Ees are at least properly informed of its
10. Work supervision decisions and modes of actions. Such management
11. Lay-off of workers prerogative may be availed of without fear of any
12. Discipline liability so long as it is exercised in good faith for the
13. Dismissal advancement of the Er’s interest and not for the
14. Recall of workers purpose of defeating or circumventing the rights of
employees under special laws or valid agreement and
XPNs: Otherwise limited by law, contract, and are not exercised in a malicious, harsh, oppressive,
principles of fair play and justice. vindictive or wanton manner or out of malice or spite
[PAL vs. NLRC, G.R. No. 85985, (1993); San Miguel
Note: So long as a company’s prerogatives are exercised in Brewery Sales vs. Ople, G.R. No. 53515, (1989); Punzal
good faith for the advancement of the Er’s interest and not vs.ETSI Technologies Inc (518 SCRA 66)].
for the purpose of defeating or circumventing the rights of
the Ees under special laws or under valid agreements, the Note: It must be established that the prerogative being
Supreme Court will uphold them. invoked is clearly a managerial one.

Q: Little Hands Garment Company, an unorganized Q: Is withholding an employee’s salary a valid


manufacturer of children's apparel with around exercise of management prerogative?
1,000 workers, suffered losses for the 1st first time
in history when its US and European customers A: No. Any withholding of an Ee’s wages by an Er
shifted their huge orders to China and Bangladesh. may only be allowed in the form of wage deductions
The management informed its employees that it under the circumstances provided in Art. 113 of the
could no longer afford to provide transportation LC: 1) the worker is insured; 2) for union dues; 3) in
shuttle services. Consequently, it announced that a cases authorized by law or regulation issued by the
normal fare would be charged depending on the SLE. In the absence of the following circumstances,
distance traveled by the workers availing of the withholding thereof is thus unlawful [SHS Perforated
service. Materials, Inc. vs. Diaz, G.R. 185814, (2010)].

Was the Little Hands Garments Company within its Q: May a MERALCO employee invoke the remedy of
rights to withdraw this benefit which it had writ of habeas data available where his employer
unilaterally been providing its employees? (2005 Bar decides to transfer her workplace on the basis of
Question) copies of an anonymous letter posted therein,
imputing to her disloyalty to the company and
A: Yes, because this is a management prerogative calling for her to leave, which imputation it
which is not due any legal or contractual obligation. – investigated but fails to inform her of the details
The facts of the case do not state the circumstances thereof?
through which the shuttle service may be considered
as a benefit that ripened into a demandable right. A: No. The writs of amparo and habeas data will not
There is no showing that the benefit has been issue to protect purely property or commercial
deliberately and consistently granted, i.e. with the concerns nor when the grounds invoked in support of
Er’s full consciousness that despite its not being the petitions therefor are vague or doubtful.
Employment constitutes a property right under the

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MANAGEMENT PREROGATIVE

context of the due process clause of the Constitution. is not motivated by discrimination, bad faith, or
The writ of habeas data directs the issuance of the effected as a form of punishment or demotion
writ only against public officials or employees, or without sufficient cause. This privilege is inherent in
private individuals or entities engaged in the the right of Ers to control and manage their
gathering, collecting or storing of data or information enterprises effectively.
regarding an aggrieved party’s person, family or
home; and that MERALCO (or its officers) is clearly Note: The right of Ees to security of tenure does not give
not engaged in such activities [MERALCO vs. Lim, G.R. them vested rights to their positions to the extent of
No. 184769, (2010)]. depriving management of its prerogative to change their
assignments or to transfer them [Endico vs. Quantum Foods
Distribution Center, G.R. No. 161615, (2009)].
DISCIPLINE
Q: May the employer exercise his right to transfer an
Q: Discuss briefly the employer's right to discipline
employee and compel the latter to accept the same
his employees.
if said transfer is coupled with or is in the nature of
promotion?
A: The Er has the prerogative to instill discipline in his
Ees and to impose reasonable penalties, including
A: No. There is no law that compels an Ee to accept
dismissal, on erring Ees pursuant to company rules
promotion. Promotion is in the nature of a gift or a
and regulations [San Miguel Corporation vs. NLRC,
reward which a person has a right to refuse. When an
G.R. No. 87277, (1989)].
Ee refused to accept his promotion, he was exercising
his right and cannot be punished for it. While it may
An Er has the prerogative to prescribe reasonable
be true that the right to transfer or reassign an Ee is
rules and regulations necessary for the proper
an Er’s exclusive right and the prerogative of
conduct of its business, to provide certain disciplinary
management, such right is not absolute [Dosch vs.
measures in order to implement said rules and to
NLRC and Northwest Airlines, G.R. No. 51182, (1983)].
assure that the same would be complied with. An
employer enjoys a wide latitude of discretion in the
Q: Who has the burden of proving that the transfer
promulgation of policies, rules and regulations on
was reasonable?
work-related activities of the Ees. This is inherent in
its right to control and manage its business effectively
A: The Er must be able to show that the transfer is
[San Miguel Corp. vs.NLRC, 551 SCRA 410].
not unreasonable, inconvenient or prejudicial to the
Ee; nor does it involve a demotion in rank or a
Q: Is the power of the employer to discipline his
diminution of his salaries, privileges and other
employees absolute?
benefits. Should the Er fail to overcome this burden
of proof, the Ee’s transfer shall be tantamount to
A: No. While management has the prerogative to
constructive dismissal. [Blue Dairy Corporation vs.
discipline its Ees and to impose appropriate penalties
NLRC, 314 SCRA 401 (1999)]
on erring workers, pursuant to company rules and
regulations, however, such management prerogative
Q: What are the limitations on management
must be exercised in good faith for the advancement
prerogatives?
of the Er’s interest and not for the purpose of
defeating or circumventing the rights of the Ees
A:
under special laws and valid agreements. [PLDT vs.
1. Such that the Er must be motivated by good faith
Teves, G.R. No. 143511, (2010)].
2. The contracting out should not be resorted to
circumvent the law or must not have been the
TRANSFER OF EMPLOYEES
result of malicious or arbitrary actions [MERALCO
v. Quisumbing, G.R. no. 127598. (2000)].
Q: Discuss briefly the employer’s right to transfer
and reassign Ees. PRODUCTIVITY STANDARD

A: In the pursuit of its legitimate business interests, Q: May an employer impose productivity standards
especially during adverse business conditions, for its workers?
management has the prerogative to transfer or assign
Ees from one office or area of operation to another A: Yes. An Er is entitled to impose productivity
provided there is no demotion in rank or diminution standards for its workers. In fact, non-compliance
of salary, benefits and other privileges and the action may be visited with a penalty even more severe than

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demotion. The practice of a company in laying off ordinarily received by or strictly due the recipient. An
workers because they failed to make the work quota Er cannot be forced to distribute bonuses when it can
has been recognized in this jurisdiction. Failure to no longer afford to pay. To hold otherwise would be
meet the sales quota assigned to each of them to penalize the Er for his past generosity [Producers
constitute a just cause of their dismissal, regardless of Bank of the Phil. vs.NLRC, G.R. No. 100701, (2001)].
the permanent or probationary status of their
employment. Likewise, failure to observe prescribed CHANGE OF WORKING HOURS
standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just Q: Discuss briefly the employer’s right to change
cause for dismissal. Such inefficiency is understood to working hours.
mean failure to attain work goals or work quotas,
either by failing to complete the same within the A: Well-settled is the rule that management retains
allotted reasonable period, or by producing the prerogative, whenever exigencies of the service
unsatisfactory results. This management prerogative so require, to change the working hours of its Ees.
of requiring standards may be availed of so long as
they are exercised in good faith for the advancement Q: May the normal hours fixed in Art. 83 of the LC be
of the Er’s interest [Leonardo vs. NLRC, G.R. No. reduced by the employer? Explain.
125303, (2000)].
A: Art. 83 provides that the normal hours of work of
GRANT OF BONUS an Ee shall not exceed 8 hours a day. This implies that
the Er, in the exercise of its management
Q: What is a bonus? prerogatives, may schedule a work shift consisting of
less than 8 hours. And following the principle of “a
A: It is an amount granted and paid to an Ee for his fair day’s wage for a fair day’s labor,” the Er is not
industry and loyalty which contributed to the success obliged to pay an Ee, working for less than 8 hours a
of the Er’s business and made possible the realization day, the wages due for 8 hours. Nonetheless, if by
of profits. voluntary practice or policy, the Ee for a considerable
period of time has been paying his Ees’ wages due for
Q: Can bonus be demanded? 8 hours work although the work shift less than 8
hours (e.g. seven) it cannot later on increase the
A: GR: Bonus is not demandable as a matter of right. working hours without an increase in the pay of the
It is a management prerogative given in addition to employees affected. An Er is not allowed to withdraw
what is ordinarily received by or strictly due to a benefit which he has voluntarily given.
recipient [Producers Bank of the Phil. vs. NLRC, G.R.
No. 100701, (2001)]. RULE ON MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYEES
XPNs: Given for a long period of time, provided
that: Q: Is the stipulation in the employment contract
1. Consistent and deliberate – Er continued prohibiting an employee from marrying another
giving benefit without any condition employee of a competitor company a valid exercise
imposed for its payment; of management prerogative?
2. Er knew he was not required to give benefit;
3. Nature of benefit is not dependent on profit; A: Yes. The policy is not aimed at restricting a
4. Made part of the wage or compensation personal prerogative that belongs only to the
agreed and stated in the employment individual. However, an employee’s personal decision
contract. does not detract the employer from exercising
management prerogatives to ensure maximum profit
Q: The projected bonus for the employees of Suerte and business success. It does not impose an absolute
Co. was 50% of their monthly compensation. prohibition against relationships between its
Unfortunately, due to the slump in the business, the employees and those of competitor companies. Its
president reduced the bonus to 5% of their employees are free to cultivate relationships with and
compensation. Can the company unilaterally reduce marry persons of their own choosing. What the
the amount of bonus? (2002 Bar Question) company merely seeks to avoid is a conflict of
interest between the employee and the company
A: Yes. The granting of a bonus is a management that may arise out of such relationships. It is also not
prerogative, something given in addition to what is violative of the equal protection clause because it is a

UNIVERSITY OF SANTO TOMAS


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MANAGEMENT PREROGATIVE

settled principle that the commands of the equal


protection clause are addressed only to the State or
those acting under color of its authority. Corollarily, it
has been held in a long array of U.S. Supreme Court
decisions that the equal protection clause erects no
shield against merely private conduct, however,
discriminatory or wrongful. The only exception occurs
when the State in any of its manifestations or actions
has been found to have become entwined or involved
in the wrongful private conduct. (Duncan Association
of Detailman-PTGWO and Pedro A. Tecson v. Glaxo
Wellcome Philippines, Inc., G.R. No. 162994,
September 17, 2004)

POST-EMPLOYMENT BAN

Q: Genesis Fulgencio had been working for


Solidbank Corporation since 1977. He later on
applied for retirement. Solidbank required Genesis
to sign an undated Undertaking where he promised
that "[he] will not seek employment with a
competitor bank or financial institution within one
(1) year from February 28, 1995, and that any breach
of the Undertaking or the provisions of the Release,
Waiver and Quitclaim would entitle Solidbank to a
cause of action against him before the appropriate
courts of law.” Equitable Banking Corporation
(Equitable) employed Genesis. Is the post-
retirement employment ban incorporated in the
Undertaking which Genesis executed upon his
retirement is unreasonable, oppressive, hence,
contrary to public policy?

A: No. There is a distinction between restrictive


covenants barring an Ee to accept a post-employment
competitive employment or restraint on trade in
employment contracts and restraints on post-
retirement competitive employment in pension and
retirement plans either incorporated in employment
contracts or in CBAs between the Er and the union of
Ees, or separate from said contracts or CBAs which
provide that an Ee who accepts post retirement
competitive employment will forfeit retirement and
other benefits or will be obliged to restitute the same
to the Er. The strong weight of authority is that
forfeitures for engaging in subsequent competitive
employment included in pension and retirement
plans are valid even though unrestricted in time or
geography. A post-retirement competitive
employment restriction is designed to protect the Er
against competition by former Ee who may retire and
obtain retirement or pension benefits and, at the
same time, engage in competitive employment
[Rivera vs. Solidbank, G.R. No. 163269, April 19,
2006)].

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127 FACULTY OF CIVIL LAW
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SOCIAL AND WELFARE LEGISLATION (P.D. 629) his orders as regards the employment, except the
Government and any of its political subdivisions,
Q: What is Social Legislation? branches or instrumentalities, including corporations
owned or controlled by the Government: Provided,
A: It consists of statutes, regulations and That a self-employed person shall be both Ee and Er
jurisprudence that afford protection to labor, at the same time. (Sec 8[c], R.A. 8282)
especially to working women and minors, and is in
full accord with the constitutional provisions on the Q: Who is an employee?
promotion of social justice to insure the well-being
and economic security of all the people. A: Any person who performs services for an Er in
which either or both mental and physical efforts are
SOCIAL SECURITY SYSTEM LAW (R.A. 8282) used and who receives compensation for such
services, where there is an Er-Ee relationship:
Q: What is the policy objective in the enactment of Provided, That a self-employed person shall be both
the Social Security System Law? Ee and Er at the same time. (Sec. 8[d], R.A. 8282)

A: To establish, develop, promote and perfect a Q: What is employment?


sound and viable tax-exempt social security service
suitable to the needs of the people throughout the A: GR: Any service performed by an Ee for his Er.
Philippines, which shall promote social justice and
provide meaningful protection to members and their XPNs:
beneficiaries against the hazards of disability, 1. Employment purely casual and not for the
sickness, maternity, old age, death, and other purpose of occupation or business of the Er;
contingencies resulting in loss of income or financial 2. Service performed on or in connection with
burden. (Sec. 2, R.A. 8282) an alien vessel by an Ee if he is employed
when such vessel is outside the Phils;
Note: The enactment of SSS law is a legitimate exercise of 3. Service performed in the employ of the Phil.
the police power. It affords protection to labor and is in full Government or instrumentality or agency
accord with the constitutional mandate on the promotion thereof;
of social justice [Roman Catholic Archbishop of Manila vs.
4. Service performed in the employ of a foreign
SSS, G.R. No. 15045, (1961)].
government or international organization, or
their wholly-owned instrumentality:
Q: Are the SSS premiums considered as taxes?
5. Such other services performed by temporary
and other Ees which may be excluded by
A: No. The funds contributed to the System belong to
regulation of the SSC. Ees of bona fide
the members who will receive benefits, as a matter of
independent contractors shall not be deemed
right, whenever the hazards provided by the law
Ees of the Er engaging the services of said
occur [CMS Estate, Inc., vs. SSS, G.R. No. 26298,
contractors. (Sec. 8[j], R.A. 8282)
(1984)].
Q: What is a contingency?
Q: Are benefits received under SSS Law part of the
estate of a member?
A: The retirement, death, disability, injury or sickness
and maternity of the member.
A: No. Benefits receivable under the SSS Law are in
the nature of a special privilege or an arrangement
COVERAGE
secured by the law pursuant to the policy of the State
to provide social security to the workingman. The
Q: Who are covered by SSS?
benefits are specifically declared not transferable and
exempt from tax, legal processes and liens [SSS vs.
A:
Davac, et. al., G.R. No.21642, (1966)].
1. Compulsory Coverage
a. All Ees not over 60 years of age and their Ers;
Q: Who is an employer?
b. Domestic helpers whose income is not less
than P 1000/month and not over 60 years of
A: Any person, natural or juridical, domestic or
age and their Ers;
foreign, who carries into the Phils. any trade,
business, industry, undertaking or activity of any kind
Limitations:
and uses the services of another person who is under

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2013 GOLDEN NOTES 128
SOCIAL AND WELFARE LEGISLATION

i. Any benefit earned by the Ees Any foreign government, international


under private benefit plans organization, or their wholly-owned
existing at the time of the approval instrumentality employing workers in the
of the Act shall not be Philippines, may enter into an agreement with
discontinued, reduced or the Philippine government for the inclusion of
otherwise impaired; such Ees in the SSS except those already covered
ii. Existing private plans shall be by their respective civil service retirement
integrated with the SSS but if the systems.
Er under such plan is contributing
more than what is required by this Q: Are seafarers covered by the SSS Law?
Act, he shall pay to the SSS the
amount required to him, and he A: Yes. The result of the Memorandum of Agreement
shall continue with his entered by SSS and DOLE approved by the Social
contributions less the amount paid Security Commission per the Commission's
to SSS; Resolution No. 437, dated July 14, 1988 was that the
iii. Any changes, adjustments, Standard Contract of Employment to be entered into
modifications, eliminations or between foreign shipowners and Filipino seafarers is
improvements in the benefits of the instrument by which the former express their
the remaining private plan after assent to the inclusion of the latter in the coverage of
the integration shall be subject to the Social Security Act. In other words, the extension
agreements between the Ers and of the coverage of the SSS to Filipino seafarers arises
the Ees concerned; and by virtue of the assent given in the contract of
iv. The private benefit plan which the employment signed by Er and seafarer [Ben Sta. Rita
Er shall continue for his Ees shall v. Court of Appeals, G.R. No. 119891, (1995)].
remain under the Ers management
and control unless there is an Note: By extending the benefits of the Social Security Act to
existing agreement to the contrary Filipino seafarers on board foreign vessels, the individual
c. All self-employed – considered both an Er employment agreements entered into with the stipulation
for such coverage contemplated in the DOLE-SSS
and Ee
Memorandum of Agreement, merely gives effect to the
d. Professionals;
constitutional mandate to the State to afford protection to
e. Partners and single proprietors of business; labor whether "local or overseas." (Ibid.)
f. Actors and actresses, directors, scriptwriters
and news correspondents who do not fall Q: When is the compulsory coverage deemed
within the definition of the term “Ee”; effective?
g. Professional athletes, coaches, trainers and
jockeys; AND A:
h. Individual farmers and fisherman. (Sec. 9, 1. Employer – on the first day of operation
R.A. 8282) 2. Employee – on the day of his employment
3. Compulsory coverage of self-employed – upon
2. Voluntary his registration with the SSS
a. Spouses who devote full time to managing
the household and family affairs, unless they Q: What is the effect of separation of an employee
are also engaged in other vocation or from his employment under compulsory coverage?
employment which is subject to mandatory
coverage ; (Sec. 9[b], R.A. 8282) A:
b. Filipinos recruited by foreign-based Ers for 1. His Er’s obligation to contribute arising from that
employment abroad may be covered by the employment shall cease at the end of the month
SSS on a voluntary basis; (Sec. 9[c], R.A. of separation,
8282) 2. But said Ee shall be credited with all
c. Ee separated from employment to maintain contributions paid on his behalf and entitled to
his right to full benefits benefits according to the provisions of R.A. 9282.
d. Self-employed who realizes no income for a 3. He may, however, continue to pay the total
certain month contributions to maintain his right to full benefit.
(Sec. 11, R.A. 8282)
3. By agreement

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129 FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Note: The above provision recognizes the “once a member, A: The contribution shall be determined in
always a member” rule. accordance with Sec. 18 of the SSS Law, provided
that:
Q: What is the effect of interruption of business or
professional income? 1. The monthly earnings declared as the time of
registration shall be considered as his monthly
A: If the self-employed member realizes no income in compensation and he shall pay for both Er and Ee
any given month: contributions
2. The monthly earnings declared at the time of
1. He shall not be required to pay contributions for registration shall remain the basis of his monthly
that month. salary credit, unless another declaration of his
2. He may, however, be allowed to continue paying monthly earnings was made, the latter becomes
contributions under the same rules and the new basis of his monthly salary credits. [Sec.
regulations applicable to a separated Ee member: 19-A, R.A. No. 8282]
3. Provided, that no retroactive payment of
contributions shall be allowed other than as Q: How much is the monthly pension?
prescribed under Sec.22-A. (Sec. 11-A, R.A. 8282)
A:
Q: What is a self-employed individual? 1. The monthly pension shall be the highest of the
following amounts:
A: A self-employed person is one whose income is not a. The sum of the following:
derived from employment as well as those i. Php 300.00; plus
mentioned in Sec. 9-A of the law, including: ii. 20% of the average monthly salary credit;
1. All self-employed professionals; plus
2. Partners and single proprietors of business; iii. 2% of the average monthly salary credit
3. Actors and actresses, directors, scriptwriters for each credited year of service in excess
and news correspondents who do not fall of 10 years; or
within the definition of the term Ee in Sec. 8 b. 40% of the average monthly salary credit; or
of this Act; c. Php 1,000.00, provided that the Monthly
4. Professional athletes, coaches, trainers and Pension shall in no case be paid for an
jockeys; and aggregate amount of less than sixty (60)
5. Individual farmers and fishermen. [Sec. 8(s), months (Sec. 12 [a], R.A. 8282)
RA 8282] 2. Minimum Pension
a. Php 1,200.00 - members with at least 10
Q: On her way home from work, Mikaela, a machine credited years of service
operator in a sash factory, decided to watch a movie b. Php 2, 400.00 for those with 20 credited
in a movie house. However, she is stabbed by an years of service. (Sec. [b], R.A. 8282)
unknown assailant. When she filed a claim for
benefits under the SSS Law, it was denied on the Q: What is an average monthly credit?
ground that her injury is not work-connected. Is the
denial legal? Why? A: An average monthly credit is the result obtained
by:
A: No. It is not necessary, for the enjoyment of 1. Dividing the sum of the last 60 monthly salary
benefits under the SSS Law that the injury is work- credits immediately preceding the semester of
connected. What is important is membership in the contingency by 60; or
SSS and not the causal connection of the work of the 2. Dividing the sum of all the monthly salary credits
Ee to his injury or sickness. paid prior to the semester of contingency by the
number of monthly contributions paid in the
Note: Claims based on work-connected injuries or same period, whichever is greater.
occupational diseases are covered by the State Insurance
Fund.
Provided, that the injury or sickness which caused the
disability shall be deemed as the permanent disability
Q: How are contributions of the self-employed to
for the purpose of computing the average monthly
the SSS determined?
salary credit.

Q: What is an average daily salary credit?

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2013 GOLDEN NOTES 130
SOCIAL AND WELFARE LEGISLATION

A: An average salary credit is the result obtained by 5. Such other services performed by temporary and
dividing the sum of the 6 highest monthly salary other Ees which may be excluded by regulation
credits in the 12-month period immediately of the Commission. Ees of bona fide independent
preceding the semester of contingency by 180. contractors shall not be deemed Ees of the Er
engaging the service of said contractors.
Q: May the monthly pension be suspended?
Q: A textile company hires 10 carpenters to repair
A: Yes. The monthly pension and dependents’ the roof of its factory which was destroyed by
pension shall be suspended: typhoon “Bening.” Are the carpenters subject to
compulsory coverage under the SSS Law? Why?
1. Upon the reemployment or resumption of self-
employment; A: No. the employment is purely casual and not for
2. Recovery of the disabled member from his the purpose of the occupation or business of the Er.
permanent total disability Their engagement is occasioned by the passage of the
3. Failure to present himself for examination at typhoon; they are not hired on a regular basis.
least once a year upon notice by the SSS. [Sec.
13-A (b), RA 8282] BENEFITS

EXCLUSIONS FROM COVERAGE Q: What are the Benefits under the SSS Act?

Q: Enumerate the kinds of employment which are A:


excluded from compulsory coverage under the SSS 1. Sickness Benefits
Law. 2. Permanent Disability Benefits
3. Maternity Leave Benefit
A: Under Section 8(j) of R.A. 1161, as amended, the 4. Retirement Benefit
following services or employments are excluded from 5. Death and funeral Benefits
coverage:
Q: Are the Benefits provided for in the SSS Law
1. Employment purely casual and not for the transferable?
purpose of occupation or business of the Er;
2. Service performed on or in connection with an A: Benefits provided for in the SSS Law are not
alien vessel by an employee if he is employed transferable and no power of attorney or other
when such vessel is outside the Philippines; document executed by those entitled thereto in favor
3. Service performed in the employ of the of any agent, attorney or any other person for the
Philippine Government or instrumentality or collection thereof on their behalf shall be recognized,
agency thereof; except when they are physically unable to collect
4. Service performed in the employ of a foreign personally such benefits. (Sec.15, R.A. 1161, as
government or international organization, or amended)
their wholly-owned instrumentality:
Q: What are the reportorial requirements of the
Provided, however, That this exemption employer and self-employed?
notwithstanding, any foreign government,
international organization or their wholly-owned A:
instrumentality employing workers in the 1. Er - Report immediately to SSS the names, ages,
Philippines or employing Filipinos outside of the civil status, occupations, salaries and dependents
Philippines, may enter into an agreement with of all his covered Ees
the Philippine Government for the inclusion of
such Ees in the SSS except those already covered 2. Self-employed - Report to SSS within 30 days from
by their respective civil service retirement the first day of his operation, his name, age, civil
systems: Provided, further, That the terms of status, occupation, average monthly net income
such agreement shall conform with the and his dependents
provisions of this Act on coverage and amount of
payment of contributions and benefits: Provided, SICKNESS BENEFITS
finally, That the provisions of this Act shall be
supplementary to any such agreement; and
Q: What is sickness benefit?

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131 FACULTY OF CIVIL LAW
Labor Law and Social Legislation

b. Not paid for more than 240 days on account of


A: It is a daily allowance paid to a covered Ee who the same confinement; and
becomes sick and is confined in a hospital for more c. Ee member shall notify his Er of the fact of his
than 3 days or elsewhere with the Commission’s sickness or injury within 5 calendar days after the
approval. start of his confinement unless such
confinement:
Q: What are the requirements to be entitled for i. is in a hospital
sickness benefit? ii. the Ee became sick or was injured while
working or within the premises of the Er
A: Under Sec. 14 of the Social Security Law, the (notification to the Er not necessary);
following are the requisites for the enjoyment by a
covered individual of the sickness benefits: Note: If the member is unemployed or self-employed, he
shall directly notify the SSS of his confinement within 5
1. Payment of at least 3 monthly contributions in calendar days after the start thereof unless such
confinement is in a hospital in which case notification is
the 12-month period immediately preceding the
also not necessary;
semester of sickness;
2. Sickness or injury and confinement for more than Where notification is necessary, confinement shall be
3 days in a hospital or elsewhere with the deemed to have started not earlier than the 5th day
Commission’s approval; immediately preceding the date of notification. (Sec.14
3. Notice of the fact of sickness by the Ee to the Er [b], R.A. 8282)
(or to the SSS in case the member is
unemployed) within 5 calendar days after the Note: The law does not require that sickness must be
start of his confinement; and related to the duties of the beneficiaries.
4. Exhaustion of sick leaves of absence with full pay
to the credit of the Ee. Q: When will compensable confinement commence?

Q: May the requirement of notification be dispensed A:


with? 1. Begins on the 1st day of sickness
2. Payment of such allowances shall be promptly
A: Yes. Notification is not necessary when: made by the Er:
th
1. Confinement is in a hospital; or a. every regular payday or on the 15 and last
2. The employee became sick or was injured day of each month,
while working or within the premises of the b. in case of direct payment by the SSS - as long
employer. as such allowances are due and payable.
(Sec. 14[b], R.A. 8282)
Q: Who will pay the sickness benefits and how much
is the benefit? Q: What are the requirements in order that Er may
claim reimbursement of the sickness benefit?
A:
1. The Er shall pay the Ee for each compensable A:
confinement or fraction thereof 1. 100% of daily benefits shall be reimbursed by SSS
if the following requirements are satisfied:
2. The SSS shall pay the member who is unemployed, a. Receipt of SSS of satisfactory proof of such
self-employed or voluntary members with a daily payment and legality thereof;
sickness benefit equivalent to 90% of his average b. The Er has notified the SSS of the
daily salary credit. confinement within 5 calendar days after
receipt of the notification from the Ee
The following requisites must be complied with in member.
order to avail of sickness benefits:
2. Er shall be reimbursed only for each day of
th
a. In no case shall the daily sickness benefit be paid confinement starting from the 10 calendar day
longer than 120 days in 1 calendar year, nor shall immediately preceding the date of notification to
any unused portion of the 120 days of sickness the SSS if the notification to the SSS is made
benefit granted be carried forward and added to beyond 5 calendar days after receipt of the
the total number of compensable days allowable notification from the Ee member. (Sec. 14 [c],
in the subsequent year; R.A. 8282)

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SOCIAL AND WELFARE LEGISLATION

Q: When will reimbursement be made by SSS? b. Not gainfully employed and has not
reached the age of 21 years of age;
A: GR: SSS shall reimburse the Er or pay the or
unemployed member only for confinement within 1 c. If over 21 years of age, he is
year immediately preceding the date the claim for congenitally or while still a minor
benefit or reimbursement is received by the SSS. has been permanently
incapacitated and incapable of self-
XPN: Confinement in a hospital in which case the support, physically or mentally; and
claim for benefit or reimbursement must be filed 3. The parent who is receiving regular support
within 1 year from the last day of confinement. from the member. [Sec. 8 (e), RA 8282]
(Sec. 14[c], R.A. 8282)
Q: Compare death benefits with permanent total
Q: When is the employer or the unemployed disability benefits
member not entitled to reimbursement?
A:
A: Death Benefits PTD Benefits
1. Where the Er failed to notify the SSS of the Requisite
confinement; at least 36 monthly contributions
2. In the case of the unemployed; where he failed
Benefits payable to whom
to send the notice directly to the SSS except
when the confinement is in a hospital; and Primary Beneficiaries Member
3. Where the claim for reimbursement is made Failure to make 36 monthly payments
after 1 year from the date of confinement. Benefits shall be in lump sum equivalent to the
monthly pension times the number of monthly
PERMANENT DISABILITY BENEFITS contributions paid to SSS or 12 times the monthly
pension, whichever is higher.
Q: What is a permanent disability benefit?
Q: What is the effect of the death of the PTD
A: It is a cash benefit paid to a member who pensioner?
becomes permanently disabled, either partially or
totally. A:
1. Primary beneficiaries are entitled to receive
Q: What disabilities are deemed permanent total monthly pension as of the date of disability.
disability? 2. No primary beneficiaries and he dies within 60
months from the start of his monthly pension -
A: Under Sec. 13-A (d) of the SSS Law, the following secondary beneficiaries shall be entitled to a lump
disabilities are deemed permanent total: sum benefit equivalent to the total monthly
1. Complete loss of sight of both eyes; pensions corresponding to the balance of the 5-
2. Loss of two limbs at or above the ankle or year guaranteed period excluding the dependents’
wrists; pension. (Sec. 13-A [c], R.A. 8282)
3. Permanent complete paralysis of two limbs;
4. Brain injury resulting to incurable imbecility or Q: What is the effect of retirement or death to
insanity; and partial disability pension?
5. Such cases as determined and approved by the
SSS. A: Disability pension shall cease upon his retirement
or death. (Sec 13-A [j], R.A. 8282)
Q: Among the persons entitled to permanent
disability benefits are the dependents of the Q: What is the difference of compensability under
covered employee. Who are these dependent? the Labor Law and the Social Security Law?

A: The dependents shall be the following: A: The claims are different as to their nature and
1. The legal spouse entitled by law to receive purpose [Ortega vs. Social Security Commission, G.R.
support from the member; No. 176150, (2008)].
2. The legitimate, legitimated or legally
adopted and illegitimate child who is: LABOR LAW SOCIAL SECURITY LAW
a. Unmarried Purpose

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133 FACULTY OF CIVIL LAW
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Governs compensability Benefits are intended to A: It is a cash benefit paid to a member who can no
of : provide insurance or longer work due to old age.
1. work-related protection against the
disabilities hazards or risks of Q: What are the types of retirement benefits?
2. when there is loss disability, sickness, old
of income due to age or death, inter alia, A:
work-connected irrespective of whether 1. Monthly Pension - Lifetime cash benefit paid to a
or work- they arose from or in the retiree who has paid at least 120 monthly
aggravated injury course of the contributions to the SSS prior to the semester of
or illness. employment. retirement.
Nature 2. Lump Sum Amount - Granted to a retiree who
A disability is total and Disability may be has not paid the required 120 monthly
permanent if as a result permanent total or contributions.
of the injury or sickness permanent partial.
the Ee is unable to Q: Who are entitled to retirement benefits?
perform any gainful
occupation for a A:
continuous period 1. A member who
exceeding 120 days a. is at least 60 years old
regardless of whether he b. has paid at least 120 monthly
loses the use of any of contributions prior to the semester of
his body parts. retirement; and
c. already separated from employment or
MATERNITY LEAVE BENEFIT has ceased to be self-employed,

Q: What is the maternity benefit? 2. A member who is at least 65 years old, shall
be entitled for as long as he lives to the
A: The maternity benefit is a daily cash allowance monthly pension; (Sec 12-B [a], R.A. 8282)
granted to a female member who was unable to work
due to childbirth or miscarriage. 3. A member
a. At least 60 years old at retirement; and
Q: What are the qualifications for entitlement to the b. Does not qualify for pension benefits
maternity benefit? under paragraph (a) above - entitled to
a lump sum benefit equal to the total
A: contributions paid by him and on his
1. She has paid at least three monthly contributions behalf;
within the 12-month period immediately c. Must be separated from employment
preceding the semester of her childbirth or and is not continuing payment of
miscarriage. contributions to the SSS on his own.
2. She has given the required notification of her (Sec. 12-B [b], R.A. 8282)
pregnancy through her Er if employed, or to the
SSS if separated, voluntary or self-employed Q: What happens when the retirement pensioner is
member. re-employed or resumes self-employment?

Q: Is the voluntary or self-employed member also A: The monthly pension of a retirement pensioner
entitled to the maternity benefit? who resumes employment and is less than 65 years
old will be suspended. He and his Er will again be
A: Yes, A voluntary or a self-employed member is subject to compulsory coverage. (Sec. 12-B [c], R.A.
entitled to the maternity benefit provided that she 8282)
meets the qualifying conditions as mentioned in the
preceding question. Q: Are the children of a retiree member entitled to
the dependent's pension?
RETIREMENT BENEFIT
A: Yes (Sec. 12[A], R.A. 8282). However, only 5 minor
Q: What is a retirement benefit? children, beginning from the youngest, are entitled to
the dependent’s pension. No substitution is allowed.

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Where there are more than 5 legitimate and 2. In the absence of the foregoing, any other person
illegitimate children, the legitimate ones will be designated by the covered employee as
preferred. secondary beneficiary. [Sec. 8(k), R.A. 8282]

Q: For how long will the dependent child receive Q: Who are considered dependents?
the pension?
A:
A: Until the child reaches 21 years of age, gets 1. The legal spouse entitled by law to receive
married, gets employed and earns Php 300 a month support from the member;
or more, or dies. 2. The legitimate, legitimated, or legally
adopted, and illegitimate child who:
However, the dependent's pension is granted for life a. Is unmarried,
to children who are over 21 years old, provided they b. Not gainfully employed, and
are incapacitated and incapable of self-support due c. Has not reached 21 years of age, or if
to physical or mental defect which is congenital or over 21 years of age, he is congenitally
acquired during minority. or while still a minor has been
permanently incapacitated and
DEATH AND FUNERAL BENEFITS incapable of self-support, physically or
mentally.
Q: When is a beneficiary entitled to death benefits? 3. The parent who is receiving regular support
from the member.
A:
1. Upon death of a member, if he has paid at Q: How long shall the primary beneficiaries be
least 36 monthly contributions prior to the entitled to the death benefits consisting of monthly
semester of death: pension and dependent’s pension?
a. primary beneficiaries shall be entitled to
the monthly pension; or A:
b. If there are no primary beneficiaries, 1. Dependent spouse – entitled until he/she
secondary beneficiaries shall be entitled remarries
to a lump sum benefit equivalent to 36 2. Dependent children – entitled until:
times the monthly pension. a) They get married;
2. Upon death of a member If he has not paid b) Find gainful employment;
the required 36 monthly contributions prior c) Reach the age of 21 years; or
to the semester of death: d) Recover from mental or physical incapacity
a. Primary or secondary beneficiaries shall and can now support themselves.
be entitled to a lump sum benefit
equivalent to the monthly pension Q: What is the funeral benefit?
multiplied by the number of monthly
contributions paid to the SSS: or A: A funeral grant equivalent to Php 12, 000.00 shall
b. 12 times the monthly pension, be paid, in cash or in kind, to help defray the cost of
whichever is higher. (Sec. 13, R.A. 8282) expenses upon the death of a member or retiree.
(Sec. 13-B, R.A. 8282)
Q: Who are primary beneficiaries?
BENEFICIARIES
A:
1. The dependent spouse until he or she remarries Q: What is meant by “dependent for support”?
2. The dependent legitimate, legitimated or legally
adopted, and illegitimate children: Provided, that A: The entitlement to benefits as a primary
the dependent illegitimate children shall be beneficiary requires not only legitimacy but also
entitled to 50% of the share of the legitimate, dependence upon the member Ee [Gil v. SSC CA- GR
legitimated or legally adopted children. SP. 37150, (1996)].

Q: Who are secondary beneficiaries? If a wife who is already separated de facto from her
husband cannot be said to be "dependent for
A: support" upon the husband, absent any showing to
1. Dependent parents the contrary. Conversely, if it is proved that the

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husband and wife were still living together at the these 50 people is not in connection with the purpose
time of his death, it would be safe to presume that of the business of the factory. Hence, the employment
she was dependent on the husband for support, of these 50 persons is purely casual. They are,
unless it is shown that she is capable of providing for therefore, excepted from the compulsory coverage of
herself [SSS vs. Aguas, G.R. No. 165546, (2006)]. the SSS law.

Q: A, an SSS member was survived by his legal wife, Q: How are disputes settled?
who is not dependent upon him. He was also
survived by two common-law wives with whom he A:
had illegitimate minor children. Who among them is DISPUTE SETTLEMENT
entitled to the benefits? Disputes involving:
1. Coverage
A: The illegitimate minor children shall be entitled to 2. Benefits
the death benefits as primary beneficiaries because 3. Contributions
the legal wife is not dependent upon the member. 4. Penalties
The SSS Law is clear that for a minor child to qualify Social 5. Any other matter related
as a “dependent” the only requirements are that Security thereto.
he/she must be below 21 yrs. of age, not married nor Commission
gainfully employed [Signey vs. SSS, G.R. No. 173582, (SSC) Note: Disputes within the mandatory
(2008)]. period of 20 days after the submission of
evidence. (Sec. 5a, R.A. 8282)
Q: What is compensation?
Decision, in the absence of appeal, shall be
final and executory 15 days after date of
A: All actual remuneration for employment, including notification. (Sec. 5b, R.A. 8282)
the mandated cost of living allowance, as well as the
Decisions of SSC shall be appealable
cash value of any remuneration paid in any medium
to:
other than cash except that part of the remuneration
1. CA – questions of law and fact (Sec.
received during the month in excess of the maximum CA / SC
5c, R.A. 8282)
salary.
2. SC – questions of law. (Sec. 5c,
R.A. 8282)
Q: The owners of FALCON Factory, a company
SSC may, motu proprio or on motion
engaged in the assembling of automotive
of any interested party, issue a writ of
components, decided to have their building
Execution execution to enforce any of its
renovated. (50) persons, composed of
of decision decisions or awards, after it has
engineers, architects and other construction
become final and executory. (Sec. 5d¸
workers, were hired by the company for this
R.A. 8282)
purpose. The work was estimated to be completed
in 3 years. The workers contended that since the
Q: Can the SSC validly re-evaluate the findings of the
work would be completed after more than 1 year,
RTC, and on its own, declare the latter’s decision to
they should be subject to compulsory coverage
be bereft of any basis?
under the Social Security Law. Do you agree with
their contention? Explain your answer fully. (2000
A: No. It cannot review, much less reverse, decisions
Bar Question)
rendered by courts of law as it did in the case at bar
when it declared that the CFI Order was obtained
A: No. Under Sec. 8 (j) of R.A. 1161, as amended,
through fraud and subsequently disregarded the
employment of purely casual and not for the purpose
same, making its own findings with respect to the
of the occupation or business of the Er is excepted
validity of Bailon and Alice’s marriage on the one
from compulsory coverage. An employment is purely
hand and the invalidity of Bailon and Teresita’s
casual if it is not for the purpose of occupation or
marriage on the other. In interfering with and passing
business of the Er.
upon the CFI Order, the SSC virtually acted as an
appellate court. The law does not give the SSC
In the problem given, Falcon Factory is a company
unfettered discretion to trifle with orders of regular
engaged in the assembly of automotive components.
courts in the exercise of its authority to determine
The 50 persons (engineers, architects and
the beneficiaries of the SSS [SSS vs. Teresita Jarque
construction workers) were hired by Falcon Factory to
Vda. De Bailon, G.R. No. 165545, (2006)].
renovate its building. The work to be performed by

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Q: Due to the delinquency incurred by ABC Co. 2. Its political subdivisions, branches, agencies,
incurred on its premium and loan amortizations, SSS instrumentalities
suggested settling its obligation either through 3. GOCCs, and financial institutions with original
instalment or through dacion en pago. ABC chose charters
dacion en pago and offered its property situated in 4. Constitutional Commissions and the Judiciary
Baguio City. It was approved by the SSS. However, (Sec. 2[c], R.A. 8291)
SSS refused to accept the payment unless the
interest and charges will be paid. ABC then filed suit Q: Who is an employee or member?
in court. SSS moved for dismissal contending that
the SSC, and not regular courts, has the jurisdiction A: Any person, receiving compensation while in the
to entertain a controversy arising from the non- service of an Er, whether by election or appointment,
implementation of a dacion en pago agreed upon by irrespective of status of appointment, including
the parties as a means of settlement of ABC’s barangay and sanggunian officials. (Sec. 2[d], R.A.
liabilities. Resolve. 8291)

A: The law clearly vests upon the Commission Q: What is compensation?


jurisdiction over “disputes arising under this Act with
respect to coverage, benefits, contributions and A: The basic pay or salary received by an Ee,
penalties thereon or any matter related pursuant to his or her election or appointment,
thereto...” Dispute is defined as “a conflict or excluding per diems, bonuses, OT pay, honoraria,
controversy.”From the allegations of the complaint, it allowances and any other emoluments received in
readily appears that there is no longer any dispute addition to the basic pay which are not integrated
with respect to ABC’s accountability to the SSS. It had, into the basic pay under existing laws. (Sec. 2[i], R.A.
in fact, admitted their delinquency and offered to 8291)
settle them by way of dacion en pago subsequently
approved by the SSS in Resolution No. 270-s. 2001. Q: Baradero is a member of the Sangguniang Bayan
The controversy, instead, lies in the non- of the Municipality of La Castellana, Negros Occ. and
implementation of the approved and agreed dacion is paid on a per diem basis. On the other hand, Belo
en pago on the part of the SSS. As such, ABC filed a a Vice-Governor of Capiz is in a hold over capacity
suit to obtain its enforcement which is, doubtless, a and is paid on a per diem basis. Are the services
suit for specific performance and one incapable of rendered by Baradero and Belo on a per diem basis
pecuniary estimation beyond the competence of the creditable in computing the length of service for
Commission [SSS vs. Atlantic Gulf and Pacific retirement purposes?
Company of Manila, Inc. and Semirara Coal Corp.,
G.R. No. 175952, (2008)]. A: Yes. The traditional meaning of per diem is a
reimbursement for extra expenses incurred by the
GSIS LAW (R.A. 8291) public official in the performance of his duties. Under
this definition the per diem is intended to cover the
Q: What are the purposes behind the enactment of cost of lodging and subsistence of officers and
the GSIS Law? employees when the latter are on a duty outside of
their permanent station. On the other hand, a per
A: To provide and administer the following social diem could rightfully be considered a compensation
security benefits for government Ees: or remuneration attached to an office.

1. Compulsory life insurance The per diems paid to Baradero and Belo were in the
2. Optional life insurance nature of compensation or remuneration for their
3. Retirement benefits services as Sangguniang Bayan and Vice-Governor,
4. Disability benefits to work-related contingencies; respectively, rather than a reimbursement for
and incidental expenses incurred while away from their
5. Death benefits home base.

Q: Who are considered employers under the GSIS If the remuneration received by a public official in the
Act? performance of his duties does not constitute a mere
“allowance for expenses” but appears to be his actual
A: base pay, then no amount of categorizing the salary
1. National Government as a “per diem” would take the allowances received

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from the term service with compensation for the


purpose of computing the number of years of service Q: Who are excluded from the coverage of the GSIS
in government [GSIS v. CSC, G. R. Nos. 98395 and Law?
102449, (1995)].
A:
Q: What is the penalty in case of delayed remittance 1. Ees who have separate retirement schemes
or non-remittance of contributions? (members of the Judiciary, Constitutional
Commissions and others similarly situated)
A: The unremitted contributions shall be charged 2. Contractual Ees who have no Er-Ee with the
interests as prescribed by the GSIS Board of Trustees agencies they serve
but shall not be less than 2% simple interest per 3. Uniformed members of the AFP, BJMP, whose
month from due date to the date of payment by the coverage by the GSIS has ceased effective June
employers concerned (Sec. 7, R.A. 8291). 24, 1997
4. Uniformed members of the PNP whose coverage
COVERAGE by the GSIS has ceased effective February 1,
1996. (Sec. 2.4, Rule II, IRR, R.A. 8291)
Q: State briefly the compulsory coverage of the
GSIS. (2009 Bar Question) Q: For the purpose of benefit entitlement, how are
the members classified?
A: The following are compulsorily covered by the GSIS
pursuant to Sec. 3 of RA 8291: A:
1. All Ees receiving compensation who have not 1. Active members
reached the compulsory retirement age, a. Still in the service and are paying
irrespective of employment status. integrated premiums.
2. Members of the judiciary and constitutional b. Covered for the entire package benefits
commissions for life insurance policy. and privileges being extended by GSIS.

Q: Who are the government Ees subject to coverage 2. Policyholders


under the GSIS? a. Covered for life insurance only
b. Can avail of policy loan privilege only
A: GR: All Ees receiving compensation who have not c. May also apply for housing loans
reached the compulsory retirement age, irrespective d. Judiciary and Constitutional
of employment status. Commissions

XPNs: 3. Retired Members


1. Uniformed members of the: a. Former active members who have
a. AFP; and retired from the service and are already
b. PNP. enjoying the corresponding retirement
2. Contractuals who have no Er and Ee benefits applied for
relationship with the agencies they serve. b. Not entitled to any loan privilege,
except stock purchase loan (Sec. 2.2,
Q: Who are covered by life insurance, retirement Rules II, IRR, R.A. 8291)
and other social security protection?
BENEFITS
A: GR: All members of the GSIS shall have life
insurance, retirement, and all other social security Q: What are the Benefits provided under the GSIS
protections such as disability, survivorship, Act?
separation, and unemployment benefits. (Sec. 3, R.A.
8291) A:
1. Separation
XPNs: Members of: 2. Unemployment or involuntary separation
1. The judiciary; and 3. Retirement
2. Constitutional commissions 4. Permanent disability
5. Temporary disability
Note: They shall have life insurance only. 6. Survivorship
7. Funeral
EXCLUSIONS FROM COVERAGE

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2013 GOLDEN NOTES 138
SOCIAL AND WELFARE LEGISLATION

8. Life Insurance Note: A member separated for a valid cause shall


9. Such other benefits and protection as may be automatically forfeit his benefits, unless the terms of
extended to them by the GSIS such as loans. resignation or separation provide otherwise.

In the case of forfeiture, the separated employee shall be


Q: Who shall be compulsorily covered with life
entitled to receive only ½ of the cash surrender value of his
insurance? insurance.

A: G.R.: All Ees UNEMPLOYMENT BENEFITS

XPN: All members of the Armed Forces of the Q: What are the conditions for entitlement to
Philippines and the Philippine National Police unemployment benefits?
(PNP)
A:
Q: What are the reportorial requirements of the Er? 1. The recipient must be a permanent Ee at the
time of separation;
A: Er must report to GSIS the names, employment 2. His separation was involuntary due to the
status, positions, salaries of the employee and such abolition of his office or position resulting from
other matter as determined by the GSIS. reorganization; and
3. He has been paying the contribution for at least 1
SEPARATION BENEFITS year prior to separation.

Q: When will a member be entitled to separation Q: What will consist of an unemployment benefit?
benefits?
A: It will consists of cash payment equivalent to 50%
A: A member who has rendered a minimum of 3 of the average monthly compensation
years creditable service shall be entitled to separation
benefit upon resignation or separation under the Note: A member who has rendered at least 15 years of
following terms: service will be entitled to separation benefits instead of
unemployment benefits.
1. A member with at least 3 years but less than
15 years: Cash payment equivalent to 100% RETIREMENT BENEFITS
of the AMC for every year of service the
member has paid contributions: Q: What are the conditions in order to be entitled to
a. not less than Php 12,000.00 Retirement Benefits?
b. Payable upon reaching 60 years of age
or upon separation, whichever comes A:
later. 1. A member has rendered at least 15 years of
service;
2. A member with less than 15 years of service 2. He is at least 60 years of age at the time of
and less than 60 years of age at the time of retirement; and
resignation or separation: 3. He is not receiving a monthly pension benefit
a. Cash payment equivalent to 18 times from permanent total disability. (Sec. 13-A, R.A.
the basic monthly pension (BMP), 8291)
payable at the time of resignation or
separation Q: What is the rule in case of extension of service in
b. An old-age pension benefit equal to the order to be entitled for Retirement Benefit?
basic monthly pension, payable monthly
for life upon reaching the age of 60. A: Rabor v. CSC (G.R. No. 111812, May 1995), held
that the head of the government agency concerned is
Q: What are the effects of separation from service vested with discretionary authority to allow or
with regard to membership? disallow extension of the service of an official or Ee
who has reached 65 years old without completing the
A: A member separated from the service shall 15 years of government service. However, this
continue to be a member and shall be entitled to discretion is to be exercise conformably with the
whatever benefits he has qualified to. provisions of Civil Service Memorandum Circular No.

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27, series of 1990 which provides that the extension


shall not exceed 1 year. 1. Grave misconduct
2. Notorious negligence
Q: What is the reason for compulsory retirement? 3. Habitual intoxication
4. Willful intention to kill himself or another
A: The compulsory retirement of government officials
and Ees upon their reaching the age of 65 years is Q: What are the two types of permanent disability?
founded on public policy which aims by it to maintain
efficiency in the government service and at the same A:
time give to the retiring public servants the 1. Permanent Total Disability (PTD) - accrues or
opportunity to enjoy during the remainder of their arises when recovery from any loss or
lives the recompense, for their long service and impairment of the normal functions of the
devotion to the government , in the form of a physical and/or mental faculty of a member
comparatively easier life, freed from the rigors of civil which reduces or eliminates his capacity to
service discipline and the exacting demands that the continue with his current gainful occupation or
nature of their work and their relations with their engage in any other gainful occupation is
superiors as well as the public would impose upon medically remote. [Section 2 (q) and (s) R.A.
them [Beronilla vs. GSIS, G.R. No. 21723, (1970)]. 8291]
2. Permanent Partial Disability (PPD) - accrues or
Q: What are the options of the retiree with regard arises upon the irrevocable loss or impairment of
to his or her retirement benefits? certain portion/s of the physical faculties, despite