LABOR LAW NOTES The congress passed a law requiring all

businesses to set aside 10% of its revenues for the

govt’s program for the indigents. Is it consistent
PART I: LABOR STANDARDS with social justice?

Labor Standards - No. May business na malakas, may hindi,

and may nalulugi
- Minimum standards of employment
- Part and parcel of labor laws; other is labor
relations
Social Justice
- ‘what’
- Equalization of opportunities
- Equality among equals – equal protection of
Labor Relations law

- Mechanism for negotiation, adjusting

benefits, grievances
Equal Protection
- Involves processes governing terms and
conditions affecting labor standards 1. Same class with substantial distinction
- ‘how’ 2. Germane to the purpose of law
3. Must apply to future conditions
4. Must apply to those in the same class
Employer (Er) and Union had a CBA. Can the
terms and conditions of such be below the
minimum standards of employment, assuming Int’l School vs Quisumbing
they agree thereto?
- Conflict between foreign hired teacher and
- No, because it contravenes the law although local hired teachers
there was already meeting of the minds - Foreign teachers are paid 25% higher than
- It is contrary to law. Law has already the locally hired teachers so the latter
provided for standards so you should adhere questioned it; foreigners have higher base
to it pay, benefits, allowances
- Rule: Violation of equal protection clause
because there is no substantial distinction.
Social Legislation They are both competent and have the same
work.
- Piece of legislation intended to benefit
certain sector of the society; broader in
scope than labor law Is it possible that a new joiner come in with
- Labor law is a social legislation; but social terms and conditions better than those already
legislation does not necessarily pertain to employe
labor laws
- Ex of social legislation is the SSS Act d for 5 or 10 years?
- Yes it is part of mgmt. prerogative
- If you want to hire, offer something
Aim of Labor Laws competitive. Pay market level or even higher
- Social justice (equalization)

Job Evaluation
 - Evaluation of different job levels References to a Labor Question
- How? Criteria that mgmt. deemed it
proper (point rating) 1. Constitution
- Example of criteria: education, years of 2. Labor code
3. Civil code
experience, responsibility for people,
4. Jurisprudence (Art.8)
responsibility for funds, responsibility for 5. Special laws (ex: magna carta…)
company property, exposure to elements of 6. Revised penal code
environment 7. CBA
- Job evaluation is based on the nature of the 8. Employment contract
job 9. Employer practice
- Look at the job itself, regardless of the 10. Intl Agreements (ILO)
person and in relation to other jobs in the
company
- Point rating then to be tallied Labor Code
- General law
Performance Evaluation - All labor laws are codified here
- Took effect November 1, 1974
- how people perform their work
- Job evaluation is different from performance
evaluation CBA
- Contract as long as it does not contravene
Management Prerogative any law, moral, customs, and public policy.

- To be valid the following must concur:

1. Legitimate business reason ILO
2. Exercise in good faith
3. Must be communicated amply to the - Phils is a signatory
employees - Doctrine of incorporation

Basis of Labor Laws Employer Practice

- Police power of the state - Rule of thumb in the length of practice is

- Requisites for valid exercise of police power based on the INTENT of the employer
1. There must be lawful subject (interest of - Intent is determine based on the
the public which warrants the exercise of contemporaneous act of the er prior or after
police power) certain measure
2. Lawful means (the means employed
must be proportionate)
Construction of Labor Law

PASEI vs Drilon - Rule: Leaning towards labor in case of

doubt.
- Petitioners challenged the validity of the law - Rationale: there is inherent inequality in
regarding deployment ban terms of economic aspect and to level the
- SC upheld the validity of D.O. No. 1 playing field
because it is a valid exercise of police power - If law is clear or there is no doubt, apply the
rule as it is; apply in its plain sense
Sosito vs Aguinaldo Devt Corp REMEDY/RECOURSE:
- You are not to resolve the case in favor of 1. Terms and Conditions Fixed by Law –
Sosito just bcoz he is the employee (ee) lobby to the Congress; non-negotiable;
accdg to the SC. Not always in favor of not subject of CBA; needs congressional
labor. It must be ruled on the merits act; Salary Standardization Law
- Here, the program apply only on the ees on 2. Terms and Conditions Not Fixed by
active duties; Sosito is on indefinite leave’ Law – can negotiate with govt agency;
that’s why he is not qualified to the CBA
retrenchment program

c. Right to Strike
Rules and Regulations o SSS Case
o They are prohibited.
- Details of law that congress has no line of o Recourse (EO No. 180): go to Public
sight
Sector Labor Management Council
- Does the sec of labor has the power to
(PSLMC) to raise their grievances
promulgate rules and regulations in
implementation of labor laws? Is it not an
undue delegation of power?
o Yes. Sec of Labor has such power. Principle of Tripartism
The rule making authority of the sec 1. Government
of labor is explicitly provided in the 2. Er Sector for policy formulation
labor code 3. Ee Sector and adjudication

Application of Labor Code to Govt Employees Jurisdiction over Labor Dispute

- Govt agencies that existed by virtue of: - NLRC

1. Corporation Code
o covered by the Labor Code and all of On the part of adjudication, where do you find it
its provisions in the principle of tripartism
2. GOCC w/ Original Charter or formed
under the General Corporation Law - Bcoz there are representatives of NLRC in
o covered by the Civil Service Law Er and Ee sector

Government Employees Rights of Labor Rights of Mgmt

a. Right to organize Due process Hire/Select
o Yes, they can. Freedom of
Prescribe rules
b. Right to Collective Bargaining Association/Org
o Yes they can but those terms and Right against
conditions which are legislated involuntary Return on Investment
cannot be the subject of bargain; but servitude/slavery
all those terms and conditions which Right to collective
Dismiss/Terminate
are not legislated can be the subject bargaining and nego
Right to peaceful
of CBA Expansion and growth
concerted activities
 Living wage - As to how the work is done: the
Humane conditions of independent contractor determines it
Transfer ees - As to the result of work: the principal has
work
Security of tenure hand on it
- Independent contractor has substantial
capital and carries work according to his
Sec. 1 of the Bill of Rights own means and methods
- Parties in Independent Contractor:
- Right to life, liberty and property 1. Independent contractor
- These rights are inherent 2. Principal
- The constitution merely recognizes, 3. Workforce of the independent contractor
guarantees and ensures these rights. The
constitution does not grant these
Tabas vs NLRC

Among these rights, which is the basis of the - Livi supplied manpower to do promo merch
rights of labor and mgmt? - Workers performed work under supervision
and control of CMC
- Right to Property bcoz rights of labor and - There was termination
mgmt. as property rights can be used in - Accdg to CMC, there is no eer as provided
whatever way they want under the agreement
- SC held that CMC is the er of the promo
merch. It involves labor only contracting.
Social Equilibrium Livi has no substantial capital + the work is
directly related to the business of the
- Balance between exercise of rights of labor principal. More importantly, CMC exercises
and rights of mgmt. power of control.
- But we actually have constant clash that’s
why we have labor laws
Four Fold Test

Benefits of Harmonious Labor – Mgmt Relations 1. Selection and engagement of ee

2. Payment of wages
- From macro perspective – economic devt 3. Power of dismissal
4. Power of control (most impt)

Basic Principles
- Employer (er): who employs the services of DO 18-A
other for a fee - You can outsource regular jobs by a
- Employee (ee): person who renders services contractor. If you do so, the er is the
to another for a fee contractor

Independent Contractor DO 1 series of 2017

- Not under the control of principal - BPO is outside the coverage of Art. 106
- Separate and distinct from principal -109 pero kahit ipasok sila under 106-109,
- Performed work (work contracted by they will still be held as legitimate job
principal) according to his own means and contracting
methods
 - Situation: A foreign company will tap on a Doctrines affecting Insurance (Case of Insular,
BPO (Accenture/Convergys), then the latter Grepalife, and Tongko)
will employ workers. The contract is
- 2 KINDS OF INSURANCE AGENT
between Accenture and the workers. Power
1. Salaried Insurance Agent
of control is exercised by the Accenture not 2. Registered Representative Insurance
the foreign company. Accenture bills the Agent
foreign company for the services they
rendered. Foreign company only has hand
on the result of the services. If there are
Tongko Case
mistakes on the work, foreign company will
go to Accenture. - Insurance agent like Tongko is an ee of
Manulife
- SC reversed its first decision
Employee - There are memorandum written by Pres to
Tongko bearing his performance as
- Hired by er and who renders services for insurance agent (memo indicated power of
compensation [under the supervision and control)
control of the er not only as to the result of - 1st decision: There is control
the work but also the methods by which the - 2nd decision upon MR: highly regulated
work is to be accomplished business ang insurance companies. Hindi
porket may power of control may EER na.

Employer
Two Tiered Test/ Economic Dependence Test
- Who hires an ee for compensation and
(Case of Sevilla and Francisco)
exercises supervision and control over the ee
not only as to the result of the work but also 1. Putative power of control
the methods by which the work is to be 2. Underlying economic realities
accomplished

Two Tiered Test

Note: use four fold test to define er and ee
- Entered into the picture bcoz power of
control is not a conclusive test to determine
EER
P C
- “The benefit or damnification you suffered
by the avails of the business”

Francisco Case

E - There is EER applying the two tiered test;

has been in the company for considerable
period of time; no work other than the work
Concern of Principal in said company

- Result of the work to be done

Concern of Contractor Power of Control over Means and Methods

- Means and method - Control contemplated under four fold test

DO 18-A Labor law does not only apply to EER. It may also
apply to illegal recruitment, mishandling of POEA
- Regular jobs may be outsourced to be done
license, liability of contractor, among others.
by 3rd party

Consequence of Labor Only Contracting

Is classification of employees (project, seasonal,
regular, etc) useful to determine EER? - As if the labor only contractor is the agent
of the principal
- No. It should not be used to determine EER.
Use only the four fold test or the two tiered
test as yardstick to determine EER.
Consequence of Job Contracting
- Job contractor has control on how work is to
Who has the burden to prove that there is no be done
illegal dismissal? - Extent of liability of principal to the
employees:
- Employer o SOLIDARY LIABILITY with the
contractor in so far as payment of
wages is concerned (limited to the
Who has the burden of proof to establish EER? work for which the contractor is
- Employee engaged and limited to the time that
the contractor rendered his services)
o Outside wages = principal has no
Maraguinot vs NLRC liability

- They are ees of viva films not of the

associate producers Sonza vs ABSCBN
- They have become regular ees; they are
continuously hired for the same undertaking; - SC: not ee of ABSCBN. Sonza is an
they are exclusively hired by viva independent talent. There is no power of
control

Alcatel vs Relos
Dumpit-Murillo Case, Fuji TV vs Espiritu, and
- Not continuous hiring Behino vs ABSCBN
- If they are not hired, pwede sila mahire sa
iba or mag-side line - They are ees of their respective ers. There is
- They are hired for project (there must be a power of control. There is EER
beginning and an end date for the
undertaking that is not necessarily part of
the business; the undertaking must be How relevant is mode of compensation
identifiable and segregable.) (boundary-hulog, piece rate, etc) in determining
- SC ruled that this is a legitimate project EER?
based employment
- Irrelevant; not determinative of EER.

Labor Organization
- Can be an er if they hire ee
Right to Hire Graceful exit from employment is a management
prerogative
- This is not absolute. There are limitations
under the law
Philippine Aids Prevention Control
Stipulation against Marriage - No discrimination for those afflicted with
AIDS or HIV
- You cannot establish as condition for - Prescription of law on AIDS Confidentiality:
employment the results of the HIV test should not be
divulged
- May an er require an ee to submit herself
Minimum Age to HIV test?
- Secure permit o No, it is prohibited by law. It cannot
- Working hours require.
o Below 15 – 4 hrs a day/ 20 hrs in a - May an ee voluntarily test for HIV?
week o Yes
o 15 to less than 18 – 8hrs a day/ 40hrs - Drug test may be required but not the HIV
in a week testing.
- Income: all for the needs of the child; 20%
to the family
- Trust fund: 30% or at least 200,000; Magna Carta for Disabled Person
however, if it is below 200k, there must be - G.R. there should be no discrimination for
an account disabled persons; meaning, it cannot be a
- Not for hazardous works; not for alcoholic
ground to deny employment
beverages - XPN: if it impairs the business

Anti-Sexual Harassment Law General Banking Law

- Applies both for men and women; if used - Bcoz of Bank Secrecy, cannot hire casual
for favorable terms and conditions of ees or too lengthy probationary ees
employment or for promotion - Limitation: You can hire them but not to
- Protect dignity of an individual assign them at length; for temporary period
- Moral ascendency and influence over
of time only
another; there must be sexual favor
- Note:
o Domingo vs Ayala
o Aquino vs Acosta Prescription on Equality of Age
- RA 10911
- Not to discriminate based on age. If age is
All Offices must have this: not relevant, don’t discriminate
1. Sexual harassment guidelines/policy – to
tackle issue on sexual harassment
2. Sexual harassment committee – they will RA 9547
hear the case in the said organization - Employ out of school youth
- SPES but not mandatory
Visitorial and Enforcement Power (VEP)
 - Enforce compliance to labor standards matters outside VEP = take out the
pursuant to Art. 128 jurisdiction from SOLE and vest jurisdiction
- Situation contemplated in VEP: there may to NLRC
be complaint. SOLE and his reps will go to
the establishment to inspect to determine if Article 128
there is violation. If meron, SOLE will - Visit > findings > order of compliance
direct them to comply. If there is - If there is compliance
compliance, okay na. If there is no o It will benefit all ees covered na
compliance, there is liability. dapat nakaenjoy ng benefit
- If there is no compliance
o Writ of execution may be ordered or
How does Art. 128 differ from Art. 129 pag wala parin compliance, suspend
the operation of the company or
Article 128 Article 129 Double Indemnity Rule (pay twice
Any violation Money claims the amount of unpaid benefit aside
With or without There must be
from imprisonment and fine)
complaint complaint
- Compromise may be entered by the er and
ee as long as not contrary to law, morals
Rationale: It must be
done as a matter of and public policy
duty. It is an integral
function of DOLE to
determine na What if there is partial compliance, may writ of
nagcocomply sa labor execution be issued?
standards. It is the
primary function of - Yes and the amount of liability is double the
DOLE indemnity of the unpaid balance
There is no There is jurisdictional
jurisdictional limit limit of 5,000
EER must exists EER may or may not Article 129
exist
Appeal to SOLE then Appeal to NLRC then - Covers also claims of domestic helper not
to CA to CA exceeding 5,000 and without claim for
There may be There is no claim for reinstatement
challenged on EER reinstatement

SOLE may rule on If there is a claim for Form or Mode of Compliance/ Mechanisms to
issue of EER. If there is reinstatement, NLRC Ensure Compliance with Minimum Standards of
EER, jurisdiction is na hindi na Regional Employment
retained with SOLE. If Director
none, jurisdiction 1. Joint assessment (joint effort of DOLE and
should be with the the establishment)
NLRC. (Ruling in 2. Inspection (wait for the inspection)
Bombo overturned in 3. Occupational Health and Safety Standards
Jethro)

Bay Haven vs Abuan Certificate of Compliance

- If 1) issue not to be resolved in the course of - Has lifetime (yearly)

- It is given is upon compliance
inspection; or 2) there are evidentiary
Wage Gaa vs CA
- Remuneration for manual labor - Bldg. administrator; there’s judgment debt
and there is order of garnishment
- Accdg to Gaa, her salary cannot be attached
Salary - SC: wages and salary are different. Here,
Gaa is not performing manual labor. Her
- Remuneration for higher position salaries are subject to execution. Not under
art.1708

Pedro availed of company loan. Pedro resigned.

May the company automatically recover from Milan vs NLRC
Pedro upon resignation? Can it deduct? Pwede
ba ihold whatever Pedro is entitled to get? - Solid Mills gave Milan et al housing. Solid
Mills bumagsak negosyo. Sabi nila
- Milan vs NLRC babayaran nila ees provided they will settle
their acct with the company. Milan et al
ayaw umalis sa pabahay. Solid Mills then
Training bond given to ee. Ee left the company. hold their claims and benefits. SC ruled in
- Er can deduct from the claims the expenses favor of Solid Mills. They can withhold the
of the training because training is an claims of Milan et all pending yung
investment. pagbalik ng bahay. Pwede ideduct yung
debt.
- What if walang agreement?
o er can make demand bcoz debt
Asawa ng isang executive sumakabilang bahay.
becomes due and demandable upon
Pumunta asawa kay Pres ng company sabi wala
demand. Para kapag di binigay ni
na siyang nakukuhang financial support.
ees, pwede niya mahold claims
Hinihingi na ibawas sa sahod ni executive yung o withholding of wages cannot be done
support. What if sabihin ni wife may petition for
by er except debt due
support na sila. Tinanong ni wife sahod ni
husband.
- You cannot yield to the request of the wife. Art. 1708
Don’t disclose it UNLESS there is COURT
- G.R: wage cannot be withheld or executed
ORDER to disclose or allocate it
or garnished
- XPN: when there’s a debt due (it becomes
due upon demand)
There is overpayment of salary. Nagkamali
payroll ng pagcompute ng salary. Nakaaffect sa
ibang ees. 50 ees are overpaid.
Facilities
- Payment by mistake – unjust enrichment
- Wage deductible
- Debt becomes due upon demand
- For laborers and their families
- Make first a demand. Give chance to ee to
existence/subsistence
return the amount. If the ee did not pay,
deduct in the next payroll
Supplements RA 6727 created RTWPB and NWPC
- Extra remuneration - Minimum wage: REGIONALIZED
o because living conditions are
different
Requisites for Facilities o bawal fit-size fits all
o it also takes into acct policy
1. Customarily given directions of the govt through NEDA
2. Consent of ee in writing
3. Reasonable value
Issue Wage Order
Funeral parlor business. You must have people - Wage Board
to pick up the cadaver. They live in quarters - Need not be approved by WC pero dapat
provided by business para pag anytime na magconfirm sa guidelines ng WC
kailangan - Can there be an appeal?
o Yes to the WC
- QUARTERS = supplement; granted for the
benefit of the er; this is not deductible
There is wage order issued by the Board.

Restaurant business. Waiters. One of them live - IRR = issued by WB subject to review by
as one group. Some of them requested the er to WC and approval by SOLE
live sa tabi ng restaurant para on time lagi. The - Review by WC = to determine if in
er granted it pinagbabayad sila 500. accordance with the guidelines

- QUARTERS = facilities; for the benefit of

ee If not contented with appeal in WC
- Appeal to CA via petition for certiorari
May the equivalent amount of the quarters be - Not to SOLE, bcoz SOLE is already part of
taken in order to be compliant with minimum WC. SOLE is the head
wage requirement?
- Yes. May WB do a review even in the absence of
- Minimum wage + amount of facility will be petition? Motu proprio review?
the wage of such person.
- Yes, but usually with petition

Minimum wage
Frequency
- Agencies:
1. RTWPB – Wage Board - 12 months no wage order
2. NWPC – Wage Commission - XPN: supervening conditions/event in case
a. SOLE of extraordinary inflation
b. NEDA – to take policy directions of
the govt
3. Congress – created Board & XPN to Minimum Wage Order
Commission by virtue of RA 6727
- Board subject to review by Commission
Before Wage Order is release 2. Non-unionized
- Mandatory to have public hearings and NCMB SENA NLRC
consultations
In Wage Distortion, which levels are affected?
- Rank and file perhaps upto supervisors bcoz
RULE: It is not necessarily required to restore
they are usually receiving minimum wage
historical gap. Significant gap is sufficient. Ensure
that there will still be sufficient distinction between
two levels
3Ps (Sound Management Compensation
Principle)
1. Pay for position Non-Compliance with Wage Order
2. Pay for performance
3. Pay for person - Liability:
1. Double Indemnity
2. Imprisonment and/or fine aside from
double indemnity
What if there is increase by virtue of
performance in managerial level or in
supervisory level?
Case of Prubankers
- There is no wage distortion.
- Wage distortion is attendant upon - Regionalized; consider the living conditions
implementation of WAGE ORDER only

If contraction is by reason other than wage order,

What if because of wage order dumikit rank and it is not wage distortion
file sa supervisors, when do you consider wage
distortion as correctible?
- No pay of higher rank
- Case of Metrobank: only significant gap
shall be restored. There must be significant
contraction

How to Correct Wage Distortion

1. Unionized (with CBA)
Grievance machinery Voluntary Arbitration
(mandatory provision (may also be provided
In the CBA. If none, in the CBA.
the CBA will not be Independent 3rd
registered by the DOLE) person)