Labor Law Review

TABLE OF CONTENTS
I.GENERAL PROVISIONS 1
A. BASIC POLICY ON LABOR 1
B. CONSTRUCTION IN FAVOR OF LABOR 1
C. CONSTITUTIONAL AND CIVIL CODE PROVISIONS RELATING TO LABOR LAW 1
II. PRE-EMPLOYMENT 4
A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS (LABOR
CODE AND RA 8042, AS AMENDED BY RA 10022) 5
1.ILLEGAL RECRUITMENT 5
a. Elements 9
b. Types of Illegal Recruitment 13
c. Illegal recruitment versus estafa 13
2. Liability of Local Recruitment Agency and Foreign Employer 14
a. Solidary Liability 14
b. Theory of Imputed Knowledge 15
3. Termination of Contract of Migrant Worker Without Just or Valid Cause 15
4. Ban on Direct hiring 16
B. EMPLOYMENT OF NON-RESIDENT ALIENS 17
III. LABOR STANDARDS 19
A. CONDITIONS OF EMPLOYMENT 20
1. Coverage 20
2. Hours of Work 21
a. Normal Hours of Work 21
b. Meal Periods 23
c. Night Shift Differential 25
d. Overtime Work 26
e. Computation of additional compensation (rates only); facilities vs. supplements 29
3. Weekly Rest Periods 30
4. Holidays 31
5. Service incentive leaves 34
6. Service Charges 35
7. 13th Month Pay 36
B. WAGES 38
1. Payment of Wages 41
2. Prohibitions regarding wages 43
3. Wage Order; Wage Distortion, concept 44
4. Non-diminution of benefits 46
C. LEAVES 47
1. Service Incentive Leave (SIL) (supra) 47
2. Maternity Leave 47
3. Paternity Leave (R.A. No. 8187) 48
4. Solo Parent Leave 49
5. Leaves Benefits for Women Workers Under RA 9710 and RA 9262 49
D. SPECIAL GROUPS OF EMPLOYEES 51
1. Women 51
a. Discrimination 51
b. Stipulation Against Marriage 51
c. Prohibited Acts 52
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BAR OPERATIONS 2019 LABOR LAW
d. Sexual Harassment (RA 7877) 52

2. Minors (R.A. No. 7610, as' amended by R.A. No. 9231) 54
3. Kasambahay (R.A. No. 10361) 55
4. Homeworkers 57
5. Night Workers 58
6. Apprentices and Learners 60
7. Persons with Disabilities 61
a. Discrimination 62
b. Incentives for Employers (Sec. 8) 63
IV. SOCIAL WELFARE LEGISLATION 64
A. SOCIAL SECURITY ACT OF 1997 (R.A. No. 8282) 64
B. GOVERNMENT SERVICE INSURANCE ACT OF 1997 (R.A. No. 8291) 64
C. DISABILITY AND DEATH BENEFITS 73
V. LABOR RELATIONS 78
A. RIGHT TO SELF-ORGANIZATION 79
1. COVERAGE - WHO MAY/MAY NOT EXERCISE THE RIGHT 80
2. INELIGIBILITY OF MANAGERIAL EMPLOYEES; RIGHT OF SUPERVISORY
EMPLOYEES 84
4. NON-ABRIDGMENT OF THE RIGHT TO SELF-ORGANIZATION 85
B. BARGAINING UNIT 93
C. BARGAINING REPRESENTATIVE 95
D. RIGHTS OF LABOR ORGANIZATIONS 114
1. CHECK OFF, ASSESSMENT FEES, AGENCY FEES 115
2. COLLECTIVE BARGAINING 116
E. UNFAIR LABOR PRACTICE 124
1. NATURE AND ASPECTS 124
2. ULP BY EMPLOYERS 125
3. ULP BY LABOR ORGANIZATIONS 138
F. PEACEFUL CONCERTED ACTIVITIES 142
1. STRIKE 142
2. PICKETING 149
3. LOCKOUTS 150
3. ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY 154
5. INJUNCTIONS 160
A. EMPLOYER - EMPLOYEE RELATIONSHIP 162
1. TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP 163
2. KINDS OF EMPLOYMENT 166
a. REGULAR EMPLOYMENT 166
b. CASUAL EMPLOYMENT 167
c. PROBATIONARY EMPLOYMENT 167
d. PROJECT EMPLOYMENT 169
e. SEASONAL EMPLOYMENT 171
f. FIXED-TERM EMPLOYMENT 171
g. SECURITY GUARDS 172
3. LEGITIMATE SUBCONTRACTING vs. LABOR-ONLY CONTRACTING 175
a. ELEMENTS 176
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b. TRILATERAL RELATIONSHIP 178

c. SOLIDARY LIABILITY 181
B. TERMINATION BY EMPLOYER 188
. JUST CAUSES 188
. AUTHORIZED CAUSES 194
. DUE PROCESS 200
. TWIN-NOTICE REQUIREMENT 200
. HEARING; AMPLE OPPORTUNITY TO BE HEARD 201
D TERMINATION BY EMPLOYEE 203
. RESIGNATION VERSUS
CONSTRUCTIVE DISMISSAL 203
F. PREVENTIVE SUSPENSION 205
E. RELIEFS FROM ILLEGAL DISMISSAL 206
G. RETIREMENT 211
VII. MANAGEMENT PREROGATIVE 214
A. DISCIPLINE 216
B. TRANSFER OF EMPLOYEE 216
C.,PRODUCTIVITY STANDARD 216
D. BONUS 217
E. CHANGE OF WORKING HOURS 217
F. Bona Fide Occupational Qualifications 217
G.'POST-EMPLOYMENT BAN 218
VIII. JURISDICTION AND RELIEFS 219
A. LABOR ARBITER 220
B. NATIONAL LABOR RELATIONS COMMISSION (NLRC) 226
C. JUDICIAL REVIEW OF LABOR RULINGS 227
D. BUREAU OF LABOR RELATIONS 228
E. NATIONAL CONCILIATION AND MEDIATION BOARD 230
F. DOLE REGIONAL DIRECTORS 230
G. DOLE SECRETARY 231
H. GRIEVANCE MACHINERY 234
I. VOLUNTARY ARBITRATORS 234
J. PRESCRIPTION OF ACTIONS 236
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I. GENERAL PROVISIONS Welfare state based on social justice

The welfare state concept is found in the
TOPIC OUTLINE UNDER THE SYLLABUS constitutional clause on the promotion of social
justice to ensure the well-being and economic
A. Basic policy on labor security of all the people, and in the pledge of
B. Construction in favor of labor protection to labor with specific authority to
C. Constitutional and Civil Code provisions regulate the relations between landowners and
relating to Labor Law tenants and between labor and capital. (Alalayan
v. National Power Corp., G.R. No. L-24396, 1968)
A. BASIC POLICY ON LABOR
Limitations of Social Justice
B. CONSTRUCTION IN FAVOR OF LABOR Social justice should be used only to correct an
injustice. It must be founded on the recognition of
C. CONSTITUTIONAL AND CIVIL CODE the necessity of interdependence among diverse
PROVISIONS RELATING TO LABOR LAW units of a society, and of the protection that should
be equally and evenly extended to all groups as a
A. Legal Basis combined force in our social and economic life.
(Agabon v. NLRC, G.R. No. 158693, 2004)
B. 1987 Constitution
Social justice is not intended to countenance
1. Article II: State Policies wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty
Sec. 9. The State shall promote a just and but it certainly will not condone the offense.
dynamic social order that will ensure the prosperity Compassion for the poor is an imperative of every
and independence of the nation and free the humane society but only when the recipient is not
people from poverty through policies that provide a rascal claiming an undeserved privilege. Social
adequate social services, promote full justice cannot be permitted to be a refuge of
employment, a rising standard of living, and an scoundrels any more than can equity be an
improved quality of life for all. impediment to the punishment of the guilty.
(Tirazona v. Philippine EDS Techno-Service, G.R.
Sec. 10. The State shall promote social justice in No. 169712, 2009)
all phases of national development.
Laissez-Faire not fully embraced by the
Sec. 18. The State affirms labor as a primary Constitution
social economic force. It shall protect the rights of The Constitution is primarily a document of social
workers and promote their welfare. justice, and although it has recognized the
importance of the private sector, it has not
Sec. 20. The State recognizes the indispensable embraced fully the concept of laissez-faire or
role of the private sector, encourages private relied on pure market forces to govern the
enterprise, and provides incentives to needed economy. (Employers Confederation v. NWPC,
investments. G.R. No. 96169, 1991)
Social Justice Balancing of interests

Social justice is neither communism, nor It is high time that employer and employee cease
despotism, nor atomism, nor anarchy, but the to view each other as adversaries and instead
humanization of laws and the equalization of social recognize that theirs is a symbiotic relationship,
and economic forces by the State so that justice in wherein they must rely on each other to ensure the
its rational and objectively secular conception may success of the business. When they consider only
at least be approximated. (Calalang v. Williams, their own self-interests, and when they act only
G.R. No. 47800, 1940) with their own benefit in mind, both parties suffer
from short-sightedness, failing to realize that they
both have a stake in the business.
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2. Article Ill: Bill Of Rights

The employer wants the business to succeed,
considering the investment that has been made. Sec. 1. No person shall be deprived of life, liberty,
The employee in turn, also wants the business to or property without due process of law, nor shall
succeed, as continued employment means a any person be denied the equal protection of the
living, and the chance to better one's lot in life. It is laws.
clear then that they both have the same goal, even
if the benefit that results may be greater for one Due process
party than the other. If this becomes a source of Under the Labor Code, the requirements for the
conflict, there are various, more amicable means lawful dismissal of an employee by his employer
of settling disputes and of balancing interests that are two-fold: the substantive and the procedural.
do not add fuel to the fire, and instead open Not only must the dismissal be for a valid or
avenues for understanding and cooperation authorized cause as provided by law, but the
between the employer and the employee. (Toyota rudimentary requirements of due process, basic to
Motor Phi/s. Corp Workers Ass'n. v. NLRC, G.R. which are that an opportunity to be heard and to
No. 158786, 2007) defend oneself must be observed before an
employee may be dismissed. (Metro Eye Security
v. Salsona, G.R. No. 167367, 2007)
To constitute valid dismissal from employment,

two requisites must concur: (1) the dismissal must
be for a just or authorized cause; and (2) the
employee must be afforded an opportunity to be
heard and to defend himself. (Nacague v. Sulpicio
Lines, G.R. No. 172589, 2010)
Labor as Property Right

One's employment is a property right, and the
wrongful interference therewith is an actionable
wrong. The right is considered to be property
within the protection of the constitutional
guarantee of due process of law. (Texon Mfg. v.
Millena, G.R. No. 141380, 2004)
Sec. 4. No law shall be passed abridging the

freedom of speech, of expression, or of the press,
or the right of the people peaceably to assemble
and petition the government for redress of
grievances.
Wearing armbands and putting up placards to

express one's views without violating the rights of
3rd parties are legal per se and even
constitutionally protected. (Bascon v. CA, G.R. No.
144899, 2004)
Sec. 8. The right of the people, including those

employed in the public and private sectors, to form
unions, associations, or societies for purposes not
contrary to law shall not be abridged.
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Sec. 16. All persons shall have the right to a such facilities and opportunities that will enhance
speedy disposition of their cases before all judicial, their welfare and enable them to realize their full
quasi-judicial, or administrative bodies. potential in the service of the nation.
Sec. 18(2). No involuntary servitude in any form Management prerogative

shall exist except as a punishment for a crime See discussion in Part V.
whereof the party shall have been duly convicted.
Seven basic rights of workers guaranteed by
3. Article XIII: Social Justice And Human the Constitution: (WHOSE-CD)
Rights 1. To participate in policy and Decision-making
processes affecting their rights and benefits as
Sec. 2. The promotion of social justice shall may be provided by law
include the commitment to create economic 2. To receive a living Wage
opportunities based on freedom of initiative and 3. To conduct Collective bargaining or
self-reliance. negotiation with management
4. To work under Humane conditions
Sec. 3. The State shall afford full protection to 5. Right to Organize
labor, local and overseas, organized and 6. To enjoy Security of tenure
unorganized, and promote full employment and 7. To Engage in peaceful concerted activities,
equality of employment opportunities for all. including strike in accordance with law
It shall guarantee the rights of all workers to self- Rights Guaranteed by the Labor Code
organization, collective bargaining and The State shall afford protection to labor, promote
negotiations, and peaceful concerted activities, full employment, ensure equal work opportunities
including the right to strike in accordance with law. regardless of sex, race or creed and regulate the
They shall be entitled to security of tenure, relations between workers and employers. The
humane conditions of work, and a living wage. State shall assure the right of workers to self-
They shall also participate in policy and decision- organization, collective bargaining, security of
making processes affecting their rights and tenure, and just and humane conditions of work.
benefits as may be provided by law. (Labor Code, Art. 3)
The State shall promote the principle of shared The constitutional policy to provide full protection
responsibility between workers and employers to labor is not meant to be a sword to oppress
and the preferential use of voluntary modes in employers. The commitment of this Court to the
settling disputes, including conciliation, and shall cause of labor does not prevent us from sustaining
enforce their mutual compliance therewith to foster the employer when it is in the right. (Sarocam v.
industrial peace. Interorient Marine, G.R. No. 167813, 2006)
The State shall regulate the relations between Principle of Co-Determination

workers and employers, recognizing the right of Refers to the right of workers to participate in the
labor to its just share in the fruits of production and policy and decision making processes directly
the right of enterprises to reasonable returns to affecting their rights and benefits, without intruding
investments, and to expansion and growth. into matters pertaining to management
prerogative. (PAL v. NLRC, G.R. No. 85985, 1993)
Sec 13. The State shall establish a special agency
for disabled person for their rehabilitation, self- C. Articles 1700 to 1703, Civil Code
development, and self-reliance, and their
integration into the mainstream of society. Art. 1700. The relations between capital and labor
are not merely contractual. They are so impressed
Sec. 14. The State shall protect working women with public interest that labor contracts must yield
by providing safe and healthful working conditions, to the common good. Therefore, such contracts
taking into account their maternal functions, and are subject to the special laws on labor unions,
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collective bargaining, strikes and lockouts, closed

shop, wages, working conditions, hours of labor 11. PRE-EMPLOYMENT
and similar subjects.
TOPIC OUTLINE UNDER THE SYLLABUS
Article 1701. Neither capital nor labor shall act
oppressively against the other, or impair the
A. Recruitment and placement of local and
interest or convenience of the public.
migrant workers (Labor Code and RA
8042, as amended by RA 10022)
Art. 1702. In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the
1. Illegal recruitment and other
safety and decent living for the laborer. prohibited activities
a. Elements
Article 1703. No contract which practically b. Types of illegal recruitment
amounts to involuntary servitude, under any guise c. Illegal recruitment vs. estafa
whatsoever, shall be valid.
2. Liability of local recruitment agency
Construction in favor of labor; limitations and foreign employer
All doubts in the implementation and interpretation a. Solidary liability
of the provisions of this Code, including its b. Theory of imputed knowledge
implementing rules and regulations, shall be
resolved in favor of labor. (Labor Code, Art. 4) 3. Termination of contract of migrant
worker without just or valid cause
It is construed in favor of labor if there is a doubt 4. Ban on direct hiring
as to the meaning of the legal and contractual
provision. If the provision is clear and B. Employment of non-resident aliens
unambiguous, it must be applied in accordance
with its express terms. (MERALCO v. NLRC, G.R.
No. 78763, 1989)
The law also recognizes that management has

rights, which are also entitled to respect and
enforcement in the interest of fair play. (St. Luke's
v. NLRC, G.R. No. 162053, 2007)
While labor laws should be construed liberally in

favor of labor, we must be able to balance this with
the equally important right of the [employer] to due
process. (Gagui v. Dejero, G.R. No. 196036, 2013)
If doubts exist between the evidence presented by

the employer and the employee, the scale of
justice must be tilted in favor of the latter.
(Dreamland Hotel Resort v. Johnson, G.R. No.
191455, 2014).
-- end of topic
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A. RECRUITMENT AND PLACEMENT OF LOCAL Private Employment Agency v. Private

AND MIGRANT WORKERS (LABOR CODE AND Recruitment Entity
RA 8042, AS AMENDED BY RA 10022) PRIVATE - PRIVATE
EMPLOYMENT RECRUITMENT
1. ILLEGAL RECRUITMENT - AGENCY ENTITY
"Private employment "Private recruitment
Worker — refers to any member of the labor force, agency" means any entity" means any
whether employed or unemployed. (Labor Code, person/ entity engaged person/association
Art. 13[a]). in the recruitment and engaged in the
placement of workers recruitment and
Overseas Filipino — Dependents of migrant for a fee which is placement of workers,
workers and other Filipino nationals abroad who charged, directly or locally or overseas,
are in distress as mentioned in Sections 24 and 26 indirectly, from the without charging,
of the Migrant Workers Act. (R.A. No. 8042, Sec. workers, employers, or directly or indirectly,
3[c]) both. any fee from the
workers or
Overseas Filipino Worker— is a person who is to employers.
be engaged, is engaged or has been engaged in Requires a license. Requires an
a remunerated activity in a state of which he or she authority.
is not a citizen or on board a vessel navigating the (Labor Code, Art. 13)
foreign seas other than a government ship used
for military or non-commercial purposes or on an Recruitment and Placement is any act of:
installation located offshore or on the high seas; to (CETCHUP-CRAP)
be used interchangeably with migrant worker. • Canvassing
(R.A. No. 8042, Sec. 2[4) • Enlisting
• Transporting
Private Employment Agency — means any • Contracting
person or entity engaged in recruitment and • Hiring
placement of workers for a fee which is charged,
• Utilizing, or
directly or indirectly, from the workers or
• Procuring workers
employers or both. (Labor Code, Art. 13[0
• and includes:
Contract of services
Private Recruitment Entity — means any person
or association engaged in the recruitment and Referrals
placement of workers, locally or overseas, without Advertising for employment
charging, directly or indirectly, any fee from the Promising for employment locally or
workers or employees. (Labor Code, Art. 13[e]) abroad, whether for profit or not.
(Labor Code, Art. 13)
License v. Authority
Any person or entity which, in any manner, offers
LICENSE AUTHORITY
or promises for a fee, employment to two or more
License — means a Authority — means a
persons shall be deemed engaged in recruitment
document issued by document issued by
and placement. (Labor Code, Art. 13[b])
the DOLE authorizing the DOLE authorizing
a person/entity to a person/association
The number of persons dealt with is not the basis
operate a private fee- to engage in
in determining whether or not an act constitutes
charging recruitment and recruitment and placement.
employment agency. placement activities
as a private
recruitment entity.
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The proviso about "two or more persons" merely ILLEGAL RECRUITMENT UNDER THE LABOR
lays down a rule of evidence: where fee is CODE (Art. 38) vs. MIGRANT WORKERS ACT
collected because of a promise or offer of (Sec. 6)
employment to two or more prospective workers,
the individual or entity dealing with them shall be
Any recruitment activities, including the prohibited
deemed to be engaged in the act of recruitment
practices enumerated under Art. 34 of the Labor
and placement. The words "shall be deemed"
create that presumption. Also, profit is not Code, to be undertaken by non-licensees or
necessary to constitute recruitment. (People v. non-holders of authority, shall be deemed illegal
Penis, G.R. No. L-58674-77, 1986) and punishable under Art. 39. (Labor Code, Art.
38)
Acts of referral
The act of referral, which is included in The Department of Labor and Employment or any
recruitment, is "the act of passing along or law enforcement officer may initiate complaints.
forwarding of an applicant for employment after an (Labor Code, Art. 38)
initial interview of a selected applicant for
employment to a selected employer, placement Any act of canvassing, enlisting, contracting,
officer or bureau." (Rodolfo vs. People, G.R. No. transporting, utilizing, hiring, or procuring workers
146964, 2006) and includes referring, contract services,
promising or advertising for employment abroad,
Promising employment whether for profit or not, when undertaken by
Promising employment as factory workers and non-licensee or non-holder of authority
receiving money allegedly for processing papers contemplated under the Labor Code. (R.A. No.
without authorization or license is engaging in 8042, Sec. 6)
unlawful recruitment and placement activities. The
absence of the necessary license or authority Policy of Selective Deployment
renders all of accused-appellant's recruitment The State shall allow the deployment of overseas
activities criminal. (Labor Code, Art. 13114) (People Filipino workers onliin countries where the rights
vs. Saulo, G.R. No. 125903, 2000) of Filipino migrant workers are protected.
Perfection of employment contract gives rise The government recognizes any of the following
to Illegal recruitment as a guarantee on the part of the receiving country
The commencement of the employment for the protection of the rights of overseas Filipino
relationship must be treated separately from the workers:
perfection of an employment contract. a. It has existing labor and social laws protecting
the rights of workers, including migrant
The perfection of the contract, which (as a general workers;
rule) coincides with the date of execution, occurred b. It is a signatory to and/or a ratifier of
when the parties agreed on the object and the multilateral conventions, declarations or
cause, and the terms and conditions. Despite the resolutions relating to the protection of
non-deployment (which caused the non- workers, including migrant workers; and
commencement of the employment relationship), c. It has concluded a bilateral agreement or
rights have arisen based on the perfected contract. arrangement with the government on the
(C.F. Sharp v. Pioneer Insurance, G.R. No. protection of the rights of overseas Filipino
179469, 2012) Workers: Provided, That the receiving country
, is taking positive, concrete measures to
protect the rights of migrant workers in
furtherance of any of the guarantees under
subparagraphs (a), (b) and (c) hereof. (R.A.
No. 8042, Sec. 3)
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LABOR CODE R.A. No. 8042 — MIGRANT WORKERS ACT, AS AMENDED

-rLocal reCrAirnentiPit'eritfirO.YrrieM Applics to recruittrant for oversgs ployment
Illegal Recruitment (Art. 38) Illegal Recruitment (Sec. 6):
Any recruitment activity including 1. Any recruitment activity committed by non-licensees /
Prohibited Acts under Art. 34 non-holders of authority; OR
committed by non-licensees or Prohibited Acts (same as Art. 34 of LC) committed by any
non-holders of authority. person, whether a non-licensee, non-holder, licensee
or holder of authority.
Elements: 3. Added the following in the list of Prohibited Acts
1. That the offender has no valid (DEMIL-RETSI):
license or authority required by a. Fail to actually Deploy Without valid reason;
law to enable one to lawfully b. Fail to reimburse Expenses incurred by the worker in
engage in recruitment and connection with his/her documentation and
placement of workers; and, processing for purposes of deployment, in cases
2. That the offender undertakes where the deployment does not actually take place
either any activity within the without the worker's fault
meaning of recruitment and c. To allow a non-Filipino citizen to head or Manage a
placement defined under Article licensed recruitment/manning agency.
13(b), or any of the prohibited d. Grant a loan to an OFW with Interest exceeding 8%
practices enumerated under per annum, to be used for payment of legal and
Article 34. allowable placement fees and make the OFW issue
postdated checks in relation to the said loan;
e. Impose a compulsory and exclusive arrangement
whereby an OFW is required to avail of a Loan only
from 'specifically designated institutions, entities or
persons;
f. Refuse to condone or renegotiate a loan incurred by
an OFW after the latter's employment contract has
been prematurely terminated through no fault of his or
her own;
g- Impose a compulsory and Exclusive arrangement
whereby an OFW is required to undergo health
examinations only from specifically designated
medical clinics, institutions, entities or persons,
(except in the case of a seafarer whose medical exam
cost is shouldered by the principal/ ship-owner);
h. Impose a compulsory and exclusive arrangement
whereby an OFW is required to undergo Training,
seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or
persons, except for recommendatory trainings
mandated by principals/ ship owners where the latter,
shoulder the cost of such trainings;
i. For a Suspended recruitment/manning agency to
engage in any kind of recruitment activity including the
processing of pending workers' applications;
For a recruitment/ manning agency or a foreign
principal/ employer to pass on the OFW or deduct
from his or her salary the payment of the cost of
Insurance fees, premium or other insurance related
charges, as provided under the compulsory worker's
insurance coverage.
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A Non-Licensee / Non-Holder of
authority is any person, corporation
or entity which has not been issued a
The offender may be a non-licensee or a non-holder of
valid license or authority to engage in
authority and commits any of the acts of recruitment; OR
recruitment and placement by the
A licensee or holder of authority commits any of the
Secretary of Labor, or whose license
prohibited acts under section 6, RA 8042, as amended.
or authority has been suspended,
revoked or cancelled by the POEA or
the Secretary.
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a. Elements Illegal recruitment shall mean any act of

canvassing, enlisting, contracting, transporting,
The essential elements of illegal recruitment vary utilizing, hiring, or procuring workers and includes
in accordance with the following classifications: referring, contract services, promising or
1. Simple illegal recruitment advertising for employment abroad, whether for
• Local workers profit or not, when undertaken by non-licensee or
• Migrant workers non-holder of authority contemplated under Article
2. When committed by a syndicate; or 13(f) of the Labor Code;
3. When committed in large scale.
Provided, That any such non-licensee or non-
Simple Illegal Recruitment for Local Workers holder who, in any manner, offers or promises for
(Labor Code) a fee employment abroad to two or more persons
1. The person charged with the crime must have shall be deemed so engaged. (R.A. No. 8042, Sec.
undertaken recruitment activities: 6)
a. Defined under Art. 13 (b) or
b. Prohibited activities defined under Art. Illegal recruitment by a syndicate
34; and 1. The offender undertakes either any activity
2. The said person does not have a license or within the meaning of "recruitment and
authority to do so. (Labor Code, Art. 38) placement" defined under Art. 13(b), or any of
the prohibited practices enumerated under
Profit or Lack Thereof - Immaterial Art. 34 of the Labor Code;
It is the lack of the necessary license or authority, 2. He has no valid license or authority required
not the fact of payment that renders the by law to enable one to lawfully engage in
recruitment activity of the agency unlawful. (C.F. recruitment and placement of workers; and
Sharp vs. Espanol, G.R. No. 155903, 2007) 3. The illegal recruitment is committed by a
group of three (3) or more persons
Accused must give the impression of ability to conspiring or confederating with one another.
send complainant abroad (People v. Gallo, G.R. No. 187730, 2010)
It must be shown that the accused gave
complainants the distinct impression that she had Illegal recruitment in large scale
the power or ability to send complainants abroad 1. The accused engages in acts of recruitment
for work such that the latter were convinced to part and placement of workers defined under Art.
with their money in order to be employed. (People 13(b) of the Labor Code or in any prohibited
v. Ochoa, G.R. No. 173792, 2011) activities under Art. 34 of the Labor Code;
2. The accused has not complied with the
Simple Illegal Recruitment for Migrant Workers guidelines issued by the Secretary of Labor
(R.A. No. 8042, as amended by R.A. No. 10022) and Employment, particularly with respect to
the securing of license or an authority to recruit
First type of Illegal Recruitment: and deploy workers, either locally or overseas;
1 Person charged undertakes any recruitment and
activity as defined in Art.13 (b) of the Labor 3. The accused commits the unlawful acts
Code; and against three or more persons individually
2. Said person does not have a license or or as a group.
authority to do so.
Note:
Second type of Illegal Recruitment: Syndicate - count the conspirators
1. Person charged commits any of the Large scale - count the victims
enumerated acts under Sec. 6 of R.A. 8042,
as amended by, R.A. No. 10022.
2. It is immaterial whether he is a holder or not of
any license or authority.
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Doctrines: Illegal Recruitment expiration does not constitute illegal recruitment.

Where illegal recruitment is proved but the Recruitment refers to the offering of inducements
elements of "large scale" or "syndicate" are to qualified personnel to enter a particular job or
absent, the accused can be convicted only of employment. The advertising, the promise of
"simple illegal recruitment". (People v. Balagan future employment and other come-ons took place
and Avila, G.R. No. 183099, 2010) while the recruiter was still licensed. The payments
are necessary in order to defray the expenses
These categories are separate or independent entailed in any overseas contract of employment.
categories. If there is only one complainant in They are intended for administrative and business
several complaints, there is no illegal recruitment expenses and for the traveling expenses of the
in large scale. But where there are three applicants once cleared for overseas travel.
conspiring recruiters, there is illegal recruitment by (Aquino v. CA, G.R. No. 91896, 1991)
a syndicate. (People v. Fernandez, et. al., G.R.
No. 141221-36, 2002) It is not the issuance or signing of receipts for the
placement fees that makes a case for illegal
Appellant's acts, which were clearly described in recruitment, but rather the undertaking of
the lucid testimonies of the three victims, such as recruitment activities without the necessary
collecting from each of the complainants payment license or authority. (People v. Senoron, G.R. No.
for passport, medical tests, placement fee, plane 119160, 1997)
tickets and other sundry expenses, promising
them employment abroad, contracting and By themselves, procuring a passport, airline
advertising for employment, constitute acts of tickets and foreign visa for another individual,
large scale illegal recruitment. (People v. Diaz, without more, can hardly qualify as recruitment
G.R. No. 112175, 1996) activities. IR must be proved beyond reasonable
doubt. (Darvin v. CA, G.R. No. 125044, 1998)
Receipt of payments, after the expiration of the
license, for services rendered before said
b. Prohibited Activities
RA 8042 — OVERSEAS FILIPINOS AND

LABOR CODE
MIGRANT WORKERS ACT, AS AMENDED
It shall be unlawful for any individual, entity, Illegal recruitment shall likewise include the
licensee, or holder of authority: following acts, whether committed by any person,
1. To charge or accept, directly or indirectly, any whether a non-licensee, non-holder, licensee or
amount greater than that specified in the holder of authority (SHOW-FROG-IN-DISC)
schedule of allowable fees prescribed by the 1. Substituting or altering DOLE-approved
Secretary of Labor, or to make a worker pay employment contracts
any amount greater than that actually received 2. Recruiting workers in jobs that are Harmful to
by him as a loan or advance; public health or morality of the Philippines
2. To furnish or publish any false notice or 3. Becoming an Officer or member of the Board
information or document in relation to of a travel agency or to be engaged directly or
recruitment or employment; indirectly in the management of a travel agency
3. To give any false notice, testimony, information 4. Withholding or denying travel documents from
or document or commit any act of applicant workers before departure for
misrepresentation for the purpose of securing unauthorized monetary or financial
a license or authority under this Code. considerations
4. To induce or attempt to induce a worker 5. Furnishing or publishing any false notice or
already employed to quit his employment in information or document in relation to
order to offer him to another unless the transfer recruitment or employment
is designed to liberate the worker from 6. In case of non-deployment, failing to
Reimburse expenses incurred by the worker in
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oppressive terms and conditions • of connection with his documentation and

employment; processing for purposes of deployment
5. To influence or to attempt to influence any 7. Obstructing or attempting to obstruct
person or entity not to employ any worker who inspection by the Secretary of Labor or by his
has not applied for employment through his duly authorized representatives
agency; 8. Giving any false notice, testimony, information
6. To engage in the recruitment or placement of or document or commit any act of
workers in jobs harmful to public health or misrepresentation for the purpose of securing
morality or to the dignity of the Republic of the a license or authority under this Code
Philippines; 9. Inducing or attempting to induce a worker to
7. To obstruct or attempt to obstruct inspection by quit his employment in place of another
the Secretary of Labor or by his duly authorized UNLESS the transfer is designed to liberate the
representatives; worker from oppressive terms and conditions
8. To fail to file reports on the status of of employment
employment, placement vacancies, remittance 10. Allowing a Non-Filipino citizen to head or
of foreign exchange earnings, separation from manage a licensed recruitment/manning
jobs, departures and such other matters or agency
information as may be required by the 11. Failing to actually Deploy without valid reason
Secretary of Labor. as determined by DOLE.
9. To substitute or alter employment contracts 12. Influencing or attempting to influence any
approved and verified by the Department of person or entity not to employ any worker who
Labor from the time of actual signing thereof by has not applied for employment through his
the parties up to and including the periods of agency
expiration of the same without the approval of 13. Failing to file reports on the Status of
the Secretary of Labor; employment, placement vacancies, remittance,
10. To become an officer or member of the Board of foreign exchange earnings, separation from
of any corporation engaged in travel agency or jobs, departures and such other matters or
to be engaged directly or indirectly in the information as may be required by the
management of a travel agency; and Secretary of Labor
11 To withhold or deny travel documents from 14. Charging or accepting, directly or indirectly,
applicant workers before departure for any amount greater than that specified in the
monetary or financial considerations other than schedule of allowable fees prescribed by the
those authorized under this Code and its Secretary of Labor, or to make a worker pay
implementing rules and regulations. (Labor any amount greater than that actually received
Code, Art. 34; PERT/CPM Manpower v. by him as a loan or advance
Vinuya, G.R. No. 197528, 2012)
In addition to the acts enumerated above, it shall
also be unlawful for any person or entity to commit
the following prohibited acts: (8-LR2A21)
• Grant a loan to an overseas Filipino worker with
interest exceeding eight percent (8%) per
annum, which will be used for payment of legal
and allowable placement fees and make the
migrant worker issue, either personally or
through a guarantor or accommodation party,
postdated checks in relation to the said loan;
• Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to avail of a Loan only from
persons;
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• Refuse to condone or renegotiate a loan

incurred by an overseas Filipino worker after
the latter's employment contract has been
prematurely terminated through no fault of his
or her own;
• For a suspended recruitment/manning agency
to engage in any kind of Recruitment activity
including the processing of pending workers'
applications
Arrangement whereby an overseas Filipino
worker is required to undergo health
examinations only from specifically designated
medical clinics, institutions, entities or persons,
except in the case of a seafarer whose medical
examination cost is shouldered by the
principal/shipowner;
Arrangement whereby an overseas Filipino
worker is required to undergo training, seminar,
instruction or schooling of any kind only from
persons, except for recommendatory trainings
mandated by principals/shipowners where the
latter shoulder the cost of such trainings; and
For a recruitment/manning agency or a foreign

principal/employer to pass on the overseas Filipino
worker or deduct from his or her salary the payment
of the cost of Insurance fees, premium or other
insurance related charges, as provided under the
compulsory worker's insurance coverage.
Differences Between Prohibited Acts: Labor Code, Art. 34 vs. Migrant Workers Act, Sec. 6
LABOR CODE MIGRANT WORKERS ACT
Illegal recruitment may only be committed by a Committed by either licensee or non-licensee (R.A.
non-licensee (Labor Code, Art. 34) No. 8042, Sec. 6)
If the recruiter is licensed, it may commit a
prohibited activity (Labor Code, Art. 38)
11 enumerated acts 14 enumerated acts considered as illegal
recruitment, including their:
• Failure to actually deploy a contracted worker
without valid reason;
• Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment, in
case of non-deployment;
• To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning
agency.
Plus, 7 additional prohibited acts.
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b. Types of Illegal Recruitment c. Illegal recruitment versus estafa
Two Kinds of Illegal Recruiters ILLEGAL

ESTAFA
RECRUITMENT
(1) Non-Licensee or Non-Holder of Authority It is ma/urn prohibitum It is ma/urn in se
The offender commits:
The criminal intent of The criminal intent is
• Any of the acts defined in Art. 13(b) of the;
the accused is not imperative
Labor Code as recruitment and
necessary
placement;
Penalized under the Penalized under the
• Illegal recruitment as defined in if 1 Sec.
Labor Code Revised Penal Code
6 of R.A. No. 8042, or amended; or
Limited in scope Wider in scope and
• Any of the 14 acts enumerated in Sec. 6
covers deceits
of R.A. No. 8042, as amended
whether related or not
related to recruitment
(2) Licensed Recruiter or Holder of Authority
activities
The offender commits any of the 14 wrongful acts
enumerated in Sec. 6 of R.A. No. 8042, as
Note: Conviction under the Labor Code for illegal
amended (Sto. Tomas v. Salac, G.R. No. 152642,
recruitment does not preclude punishment under
2012)
the RPC for estafa (People v. Fernandez, G.R. No.
199211, 2014)
Kinds of Illegal Recruitment
A worker who suffers pecuniary damage,
(a) Simple Illegal Recruitment
regardless of amount, as a result of previous or
Illegal recruitment committed by a person who is
simultaneous false pretense resorted to by a non-
neither a licensee nor a holder of authority;
licensee or non-holder of authority, may complain
(b) Illegal Recruitment as Economic Sabotage of estafa under Art. 315, par. 2(a) of the RPC,
Illegal recruitment when committed: aside from illegal recruitment. (People V.
• By a syndicate; or Fernandez, G.R. Nos. 141221-36, 2002)
• In large scale,
shall be considered an offense involving economic • Estafa is committed by any person who
sabotage. (R.A. No. 10022, Sec. 5[M)) defrauds another by using fictitious name,
or falsely pretends to possess power,
Illegal Recruitment shall be considered an offense influence, qualifications, property, credit,
involving economic sabotage if any of the following agency, business or imaginary
' • circumstances
• exist: transactions, or by means of similar
qualifying
deceits executed prior to or
ILLEGAL ILLEGAL
simultaneously with the commission of the
RECRUITMENT RECRUITMENT -
fraud. (Revised Penal Code, Art. 315)
COMMITTED BY COMMITTED IN
- SYNDICATE: LARGE SCALE
Carried out by a group Committed against 3 • The offended party must have relied on
the false pretense, fraudulent act or
of 3 or more persons or more persons
conspiring and/or individually or as a fraudulent means of the accused-
confederating with group appellant and as a result thereof, the
one another in offended party suffered damages.
carrying out any
unlawful or illegal
transaction, enterprise
or scheme falling
under illegal
recruitment
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2. Liability of Local Recruitment Agency and Foreign Employer

Foreign Employer In case of a final and executory judgement against
a foreign employer/principal, it shall be
Venue of Criminal Action automatically disqualified, without further
The complainant, may, at his option, file at the proceedings, from participating in the POEA
RTC of the province or city: Program and from recruiting and hiring Filipino
• Where the offense was committed; or workers until and unless it fully satisfies the
• Where the offended party resides at the judgement award. (R.A. No. 8042, Sec. 10)
time of the commission of the offense
(R.A. No. 8042, Sec. 9) a. Solidary Liability
Prescriptive Period The liability of the principal/employer and the

SIMPLE ECONOMIC recruitment/placement agency for any and all
- SABOTAGE claims under this section shall be joint and several.
Within 5 years from Within 20 years from This provision shall be incorporated in the contract
time the illegal the time the illegal for overseas employment and shall be a condition
recruitment happened recruitment happened precedent for its approval. (R.A. No. 8042, as
amended, Sec. 10)
When maximum penalty is imposed:
• If the person illegally recruited is less than 18
• Even if the recruiter and the principal had
years of age; or
already severed their agency agreement at
• If committed by a non-licensee or non-holder the time employee was injured, the recruiter
of authority (R.A. No. 8042, Sec. 7) may still be sued for a violation of the
employment contract because no notice of the
Local Recruitment Agency agency agreement's termination was given to
The persons criminally liable are the principals, the employee.
accomplices and accessories. In case of juridical
persons, the officers having ownership, control, • The obligations covenanted in the recruitment
management or direction of their business who are
agreement entered into by and between the
responsible for the commission of the offense and
local agent and its foreign principal are not
the responsible employees/agents thereof shall be coterminous with the term of such agreement
liable. (RA 8042, as amended, Section 6)
so that if either or both of the parties decide to
• Local Recruitment Agency is solidarily liable end the agreement, the responsibilities of
with foreign principal. (IRR of the Labor Code, such parties towards the contracted
Book I, Rule V, Sec. 17) employees under the agreement do not at all
• Severance of relations between local agent end, but the same extends up to and until the
and foreign principal does not affect liability of expiration of the employment contracts of the
local recruiter. employees recruited and employed pursuant
to the said recruitment agreement. (Catan v.
Where the workers themselves insisted for the NLRC, G.R. No. 77279, 1988).
recruitment agency to send them back to their
foreign employer despite their knowledge of its Purpose of Solidary Liability
inability to pay their wages, the Supreme Court The agency agreement with the principal even if
absolved the agency from liability (Feagle ended as between them, still extends up to and
Construction Corp. v. Dorado, G.R. No. 86042, until the expiration of, the employment contracts of
1991) the employees recruited and employed pursuant
to the said recruitment agreement. (OSM Shipping
Phil, Inc. v. NLRC, G.R. No. 138193, 2003)
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b. Theory of Imputed Knowledge 3. Termination of Contract of Migrant Worker

Without Just or Valid Cause
• [This theory means] knowledge of the agent is
knowledge of the principal. (New Life v. CA, Under the Migrant Workers' Act
G.R. No. 94071, 1992) A worker dismissed from overseas employment
without just, valid or authorized cause as defined
• For the liability of the agent to attach, this by law or contract, is entitled to:
theory states that the agent knew of and a. Full reimbursement of the placement fee
consented to the extension of period of with interest at 12% per annum PLUS
employment. Otherwise, the liability of the b. His salary for unexpired portion of his
recruitment agency shall expire from the employment contract OR salary for 3
termination of the worker's original contract. months for every year of the unexpired
(Sunace International Management v. NLRC, term, WHICHEVER IS LESSER. (R.A.
G.R. No. 161757, 2006, Carpio Morales, J. as No. 8042, Sec. 10)
seen in Veloso' answers to the 2011 Bar
Examination) Rule before Serrano (1995-2009): 3-month
salary rule
Posting of Cash Bond by Recruiter • The employment contract involved in the
• The requirement for the posting of a cash bond instant case covers a two-year period but the
is also an indispensable requirement. By overseas contract worker actually worked for
posting such, the agency undertakes to only 26 days prior to his illegal dismissal.
assume joint and solidary liability with the Thus, the three months' salary rule applies.
employer for all claims and liabilities which (Flourish Maritime Shipping v. Almanzor, G.R.
may arise in connection with the No. 177948, 2008)
implementation of, the overseas employment
contract and to gUarantee compliance with Rule after Serrano (2009-present): it
existing Philippine labor laws and the laws of invalidated the 3-month salary cap clause
country of employment. • Full reimbursement of the placement fee
with interest at 12% per annum. This decision
• The peculiar nature of overseas employment held that Sec. 10 of 8042, which limited the
makes it very difficult for the Filipino overseas separation pay to three months, was
Worker to effectively go after his foreign unconstitutional for violating the equal
employer for employment-related claims and, protection clause. (Serrano v. Gallant, G.R.
hence, public policy dictates that the No. 167614, 2009)
recruitment or placement agency in the
Philippines be made to share in the employer's • Despite the fact that the clause "or for three (3)
responsibility. (Capricorn Travel & Tours v. months for every year of the unexpired term,
CA, G.R. No. 91096, April 3, 1990) whichever is less" was reinstated in R.A 8042
upon promulgation of R.A. 10022 in 2010, the
• The surety bond is intended to insure that if the Supreme Court reiterated its finding in
rights of overseas workers are violated by their Serrano v. Gallant Maritime that limiting
employers, recourse would still be available wages that could be recovered by an
against the local companies that recruited illegally dismissed overseas worker to
them for the foreign principal. (Stronghold three months is both a violation of due
Insurance Co. v. CA, G.R. No. 88050, 1992) process and the equal protection clauses
of the Constitution. (Sameer Overseas
Placement Agency v. Cabiles, G.R. 170139,
2014)
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4. Ban on Direct hiring Employers cannot directly hire workers for

overseas employment EXCEPT through
General Rule: No employer may hire a Filipino authorized entities. (See below)
worker for overseas employment except through • The reason for the ban is to ensure full
the Boards and entities authorized by the regulation of employment in order to avoid
Secretary of Labor. exploitation.
Exceptions: Entities Authorized To Engage In Recruitment

1. Members of the diplomatic corps, And Placement
2. international organizations and 1. Public employment offices
3. Such other employers as may be allowed by 2. Philippine Overseas Employment
the Secretary of Labor is exempted from this Administration (POEA)
provision. (Labor Code, Art. 18) 3. Private recruitment entities
4. Name hirees — those individuals who are able 4. Private employment agencies
to secure contracts for overseas employment 5. Shipping or manning agents or
on their own efforts and representation without representatives
the assistance or participation of any agency. 6. Such other persons or entities as may be
Their hiring, nonetheless, has to be processed authorized by the DOLE Secretary
through the POEA. (Part Ill, Rule Ill of the 7. Construction contractors
POEA Rules Governing Overseas
Employment as amended in 2002)
Summary of Penalties and Prescriptive Periods

..
INVOLVING
"SIMPLE ILLEGAL
ECONOMIC PROHIBITED ACTS. ALL CASES
RECRUITMENT
SABOTAGE .
Imprisonment of not Life imprisonment Imprisonment of not Automatic revocation of the
less than 12 years and AND less than 6 years and 1 license or registration of
1 day but not more than day but not more than the recruitment/ manning
20 years 12 years agency, lending
AND institutions, training
schools or medical clinic.
Fine of not less than Fine of not less than Fine of not less than
P1M nor more than P2M nor more than P5M nor more than
P2M P5M P1M
MAXIMUM PENALTY If ALIEN
• if person illegally • Deportation without
recruited is less need for
than 18 years old, proceedings,
or
• if committed by a
non-licensee /non
holder of authority
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B. EMPLOYMENT OF NON-RESIDENT ALIENS C. REGULATION OF RECRUITMENT AND

PLACEMENT ACTIVITIES
ART. 40. Employment Permit of Non-resident
Aliens. - Any alien seeking admission to the 1. Suspension or Cancellation of License or
Philippines for employment purposes and any Authority
domestic or foreign employer who desires to
engage an alien for employment in the Power to suspend or cancel any license or
Philippines shall obtain an employment permit authority to recruit employees for overseas
from the Department of Labor. employment is concurrently vested with the POEA
and the Secretary of Labor. (Labor Code, Art. 35)
The employment permit may be issued to a
non-resident alien or to the applicant The Secretary of Labor has the power, under Art.
employer after a determination of the non- 35 of the Code, to apply the sanctions, as well as
availability of a person in the Philippines who the authority, conferred by Art. 36, not only to
is competent, able and willing at the time of restrict and regulate the recruitment and
application to perform the services for which placement activities of all agencies, but also to
the alien is desired. promulgate rules and regulations to carry out the
objectives and implement the provisions
For an enterprise registered in preferred governing said activities.
areas of investments, said employment
permit may be issued upon recommendation Pursuant to this rule-making power thus granted,
of the government agency charged with the the Secretary of Labor gave the POEA on its own
supervision of said registered enterprise. initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved
ART. 41. Prohibition Against Transfer of person, (authority to) conduct the necessary
Employment. (a) After the issuance of an proceedings for the suspension or cancellation of
employment permit, the alien shall not the license or authority of any agency or entity for
transfer to another job or change his employer certain enumerated offenses including:
without prior approval of the Secretary of 1. The imposition or acceptance, directly or
Labor: indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what
(b) Any non-resident alien who shall take up is prescribed by the Administration.
employment in violation of the provision of this 2. Any other violation of pertinent provisions of
Title and its implementing rules and the Labor Code and other relevant laws, rules
regulations shall be punished in accordance and regulations.
with the provisions of Articles 289 and 29043
of the Labor Code. The Administrator was also given the power to
order the dismissal of the case or the suspension
In addition, the alien worker shall be subject of the license or authority of the respondent
to deportation after service of his sentence. agency or contractor or recommend to the
Secretary the cancellation thereof. (Eastern
ART. 42. Submission of List. Any employer Assurance& Surety Corp. v. Secretary of Labor,
employing non-resident foreign nationals on G.R. No. L-79436-50, 1990)
the effective date of this Code shall submit a
list of such nationals to the Secretary of Labor Termination/ Ban On Deployment
within thirty (30) days after such date
indicating their names, citizenship, foreign Notwithstanding the provisions of Section 4 of
and local addresses, nature of employment RA. No. 8042, as amended by R.A. No. 10022, in
and status of stay in the country. The pursuit of the national interest or when public
Secretary of Labor shall then determine if they welfare so requires, the POEA Governing Board,
are entitled to an employment permit. after consultation with the Department of Foreign
Affairs, may, at any time, terminate or impose a
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ban on the deployment of migrant workers. (R.A. Visitorial Powers

No. 10022, Sec. 5) The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the
Under Section 4 of R.A. No. 8042, as amended premises, books of accounts and records of any
by Section 3 of R.A. No. 10022, it is provided that person or entity covered by this Title, require it to
the State shall allow the deployment of overseas submit reports regularly on prescribed forms, and
Filipino workers only in countries where the rights act on violations of any provisions of this Title.
of Filipino migrant workers are protected. (Labor Code, Art. 37)
The government recognizes any of the following In Salazar vs. Achacoso, G.R. No. 81510, 1990,
as a guarantee on the part of the receiving country the SC ruled that Art. 38 of the LC is
for the protection of the rights of overseas Filipino unconstitutional and that the Secretary of Labor
workers: and Employment cannot issue a warrant of arrest.
(a) It has existing labor and social laws protecting DOLE Secretary does not have the power to issue
the rights of workers, including migrant search warrants and warrants of arrest. (Salazar
workers; v. Achacoso, G.R. No. 81510, 1990).
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations or 3. Prohibited Activities
resolutions relating to the protection of See above discussion on Page 10.
workers, including migrant workers; and
(c) It has concluded a bilateral agreement or Jurisdiction of the POEA
arrangement with the government on the Original and exclusive jurisdiction to hear and
protection of the rights of overseas Filipino decide:
Workers: a. All cases, which are administrative in
character, involving or arising out of violations
Provided, That the receiving country is taking of rules and regulations relating to licensing
positive, concrete measures to protect the rights of and registration of recruitment and
migrant workers in furtherance of any of the employment agencies or entities
guarantees under subparagraphs (a), (b) and (c) b. Disciplinary action cases and other special
hereof. cases, which are administrative in character,
involving employers, principals, contracting
In the absence of a clear showing that any of the partners and Filipino migrant workers (IRR of
aforementioned guarantees exists in the country of R.A. no. 8042, Rule X, Sec. 6)
destination of the migrant workers, no permit for
deployment shall be issued by the POEA. (R.A. Outside of POEA Jurisdiction
No. 8042, Sec. 4) a. Foreign Judgment — POEA has no jurisdiction
to hear and decide a claim for enforcement of a
foreign judgment (Pacific Asia Overseas v. NLRC,
2. Regulatory and Visitorial Powers of the
DOLE Secretary G.R. No. 76595, 1988)
b. Torts — Fall under the provisions of the Civil

Regulatory & Rule-Making Powers
The Secretary of Labor shall have the power to Code (Mckenzie v. Cui, G.R. No. 48831, 1989)
restrict and regulate the recruitment and
placement activities of all agencies within the Remittance of Foreign Exchange Earnings
coverage of this Title and is hereby authorized to It shall be mandatory for all Filipino workers
issue orders and promulgate rules and regulations abroad to remit a portion of their foreign earnings
to carry out the objectives and implement the to their families, dependents, and/or beneficiaries
provisions of this Title. (Labor Code, Art. 36) in the country. (Labor Code, Art. 22)
Amount required to be remitted (E.O. No. 857)
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The amount of one's salary required to be remitted

depends on the type or nature of work III. LABOR STANDARDS
performed by the employee.
Percentages of foreign exchange remittance
required from various kinds of migrant workers: A. Conditions of employment
1. Seaman or mariner - 80% of basic salary 1. Coverage
2. Workers for Filipino contractors and 2. Hours of work
construction companies - 70% a.- Normal hours of work;
3. Doctors, engineers, teachers, nurses and hours worked
other professional workers whose contract b. Meal periods
provide for free board and lodging - 70% c. Night-shift differential
4. All other professional workers whose d. Overtime work
employment contracts do not provide for free e. Computation of additional
board and lodging facilities - 50% compensation (rates
5. Domestic and other service workers - 50% only); facilities vs.
6. All other workers not falling under the supplements
aforementioned categories - 50% 3. Weekly Rest Periods
7. Performing artists - 50% 4. Holidays
5. Service incentive leaves
Individuals exempted from the mandatory 6. Service Charges
remittance requirement: 7. 13 month pay
1. The immediate family members, dependents
or beneficiaries of migrant workers residing B. Wages
with the latter abroad;
2. Filipino servicemen working within US military 1. Payment of wages
installations; 2. Prohibitions regarding wages
3. Immigrants and Filipino professionals working 3. Wage distortion; concept
with the United Nations and its agencies or 4. Non-dimunition of benefits
other specialized bodies.
4. Missionaries actually engaged in missionary C. Leaves
work 1. Service Incentive Leave
5. All aliens granted exemption by special laws 2. Maternity Leave
and all those whose employment in the Phil. 3. Paternity Leave
determined by the Secretary of Labor to be 4. Solo parent leave
beneficial to national interest. 5. Leave benefits for women workers
under RA 9710 or the Magna Carta
end of topic for Women and RA 9262 or the
Anti-Violence against Women and
Children Act of 2004
D. Special Groups of Employees

1. Women
a) Discrimination
b) Stipulation against marriage
c) Prohibited acts
d) Sexual Harassment (RA 7877)
2. Minors (R.A. No. 7610, as
amended by R.A. No. 9231)
3. Kasambahay (R.A. No. 10361)
4. Homeworkers
5. Night workers
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6. Apprentices and learners A. CONDITIONS OF EMPLOYMENT

7. Persons with Disabilities
(a) Discrimination 1. Coverage
(b) Incentives for employers
Book III of the Labor Code provides the conditions
or standards of employment. These standards
apply only if an employer-employee relationship
(EER) exist.
Excluded Employees (Go-Ma-Off-FiFa-DoPe)

a. Government employees
b. Managerial employees if they meet all of

the following conditions:
(a) Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or sub-division thereof.
(b) They customarily and regularly direct the
work of two or more employees therein.
(c) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion or
any other change of status of other
employees, are given particular weight.
(1RR Labor Code, Book Ill, Rule 1, Sec. 2)
c. Officer or members of a managerial staff if

they perform the following duties and
responsibilities:
a. The primary duty consists of the
performance of work directly related to
management policies of their employer;
b. Customarily and regularly exercise
discretion and independent judgment;
and
c. (i) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
management of. the establishment in
which he is employed or subdivision
thereof; or (ii) execute under general
supervision work along specialized or
technical lines requiring special training,
experience, or knowledge; or (iii)
execute, under general supervision,
special assignments and tasks; and
d. Who do not devote more than 20 percent
of their hours worked in a work week to
activities which are not directly and
closely related to the performance of the
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work described in paragraphs (1), (2) and was with the knowledge of his employer or
(3) above. immediate supervisor.
4. The time during which an employee is inactive
d. Non-agricultural Field Personnel by reason of interruptions in his work beyond
Non-agricultural employees who regularly his control shall be considered working time
perform their duties away from the principal either if:
place of business or branch office of the a. The imminence of the resumption of work
employer and whose actual hours of work in requires the employee's presence at the
the field cannot be determined with place of work; or
reasonable certainty) (Autobus Transport v. b. The interval is too brief to be utilized
Bautista, G.R. No. 156367, 2005) effectively and gainfully in the employee's
own interest. (IRR of Labor Code, Sec. 4,
e. Members of the Family of the employer Book III, Rule I)
who are dependent on him for support
Considered as Compensable Hours Worked
f. Domestic Helpers 1. All time during which an employee is required
The mere fact that the househelper or to be on duty or to be at the employer's
domestic servant is working within the premises or to be at a prescribed work place;
premises of the business of the employer and 2. All time during which an employee is suffered
in relation to or in connection with its business, or permitted to work; (IRR Labor Code, Book
as in its staff houses for its guest or even for III, Rule I, Sec. 3) and
its officers and employees, warrants the 3. Rest periods of short duration during working
conclusion that such househelper or domestic hours. (Philippine Airlines v. NLRC, G.R. No.
servant is and should be considered as a 132805, 1999).
regular employee of the employer and not as
a mere family househelper or domestic a. Normal Hours of Work
servant. (Apex Mining Company v. NLRC,
G.R. No. 94951, 1991). General Rule: The normal hours of work of any
employee shall not exceed eight (8) hours a day.
g. Persons in the personal service of another (Labor Code, Art. 83)
h. Workers who are paid by Results (IRR Part-time work, or a day's work of less than 8
Labor Code, Book III, Rule I, Sec. 2) hours, is not prohibited (Legend Hotel v. Realuyo,
G.R. No. 153511, 2012)
2. Hours of Work
Purpose of the Law
Principles in Determining Hours Worked To protect the health of the workers.
1. All hours are hours worked which the
employee is required to give to his employer, The law is designed to minimize unemployment by
regardless of whether or not such hours are forcing employers, in case where more than eight-
spent in productive labor or involve physical or hour operation is necessary, to utilize different
mental exertion. shifts of laborers or employees working only for
2. An employee need not leave the premises of eight hours each. (Manila Terminal Company v.
the workplace in order that his rest period shall CIR, G.R. No. L-4148, 1952).
not be counted, it being enough that he stops
working, may rest completely and may leave Exception to 8-Hour Law: Work Hours of
his workplace. Health Personnel
3. If the work performed was necessary or it
benefited the employer, or the employee could Health Personnel in:
not abandon his work at the end of his normal a. Cities and municipalities with a population
working hours because he had no of at least one million (1,000,000) or
replacement, all time spent or such work shall
be considered as hours worked, if the work
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b. Hospitals and clinics with a bed capacity DOLE's occupational safety and health
of at least one hundred (100) shall hold standards; and
regular office hours for eight (8) hours a c. The DOLE Regional Office is duly notified.
day, for five (5) days a week, exclusive of
time for meals, except where the Effects of a CWW Scheme:
exigencies of the service require that such a. Unless there is a more favorable practice
personnel work for six (6) days or forty- existing in the firm, work beyond eight (8)
eight (48) hours (Labor Code, Art. 83) hours will not be compensable by overtime
premium provided the total number of hours
WORK DAY CALENDAR DAY worked per day shall not exceed twelve (12)
24-hour period 24-hour period hours. In any case, any work performed
commencing from the commencing at 12 beyond 12 hours a day or 48 hours a week
time an employee midnight and ending at shall be subject to overtime premium.
regularly starts to work 11:59 p.m. b. Consistent with Articles 85 of the Labor Code,
regardless of whether employees under a CWW scheme are entitled
the work is broken or to meal periods of not less than sixty (60)
continuous. minutes. Nothing herein shall impair the right
of employees to rest days as well as to holiday
(1) Compressed Work Week (CWW) pay, rest day pays or leaves in accordance
with law or applicable collective bargaining
Department Order No. 21-90/ DOLE Advisory No. agreement or company practice.
2-09 and No. 02-04 c. Adoption of the CWW scheme shall in no case
result in diminution of existing benefits.
Resorted to by the employer to prevent serious Reversion to the normal eight-hour workday
losses due to causes beyond his control (i.e. when shall not constitute a diminution of benefits.
there is substantial slump in demand for his goods The reversion shall be considered a legitimate
and services or when there is lack of raw ekercise of management prerogative,
materials). (DOLE Explanatory Bulletin, July 23, provided that the employer shall give the
1985) employees prior notice of such reversion
within a reasonable period of time.
Under this scheme, the number of workdays is
reduced, but the number of work hours in a day is Health Personnel in Hospitals and Clinics
increased to more than eight (8), but no overtime
pay may be claimed. Thus, a CWW scheme is an Hospital and clinic personnel can start and end
alternative arrangement wherein the normal work at any hour on any day but would not work
workweek is reduced to less than six (6) days but for more than 8 hours in a day, nor more than 40
the total number of normal work hours per week hours in one week.
shall remain at 48 hours. (Azucena Vol. I, 9th ed.,
p. 265). Hospital and clinic personnel may be scheduled to
work for more than 5 days or 40 hours in a week,
Conditions for implementation of the CWW if they are paid overtime. (+ at least 30% regular
(DOLE Department Advisory No. 02 Series of rate). (Labor Code, Art. 83)
2004)
a. The scheme is expressly and voluntarily (2) Power Interruptions/Brownout
supported by majority of employees affected;
b. In firms using substances, or operating in Brownouts not exceeding twenty (20) minutes
conditions that are hazardous to health, a shall be treated as hours worked.
certification is needed from an accredited
safety organization or the firm's safety Brownouts running for more than twenty (20)
committee that work beyond eight (8) hours is minutes may not be treated as hours worked
within the limits or levels of exposure set by provided that any of the following conditions are
present:
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a. The employees can leave their work place Note: Rest periods or coffee breaks running from
or go elsewhere whether within or without 5-20 minutes shall be considered compensable
the work premises; or working time. (IRR Labor Code, Book III, Rule 1,
b. The employees can use the time Sec. 7)
effectively for their own interest. (Policy
Instruction No. 36, cited in Durabullt Note: To shorten meal time to less than 20
Recapping Plant & Co. vs. NLRC, G.R. minutes is not allowed. If it is less than 20 minutes,
No. 76746, 1987) it becomes only a REST PERIOD and is
considered working time (Labor Code, Art. 84, ¶ 2)
The time during which an employee is inactive by
reason of work interruptions beyond his control is If standby is for emergency work, meal break
considered working time, either if the imminence is part of hours worked. (Pan-American World
of the resumption of work requires the employee's Airways System Philippines v. Pan-American
presence at the place of work or if the interval is Employees Association G.R. No.L-16275, 1961)
too brief to be utilized effectively and gainfully in
the employee's own interest. (IRR Labor Code, Exception to the exception: Shortened meal
Sec. 4[d], Rule 1, Book III) breaks upon the employee's request are NOT
compensable, provided that:
b. Meal Periods 1. The employees voluntarily agree in writing to
a shortened meal period of 30 minutes and are
General Rule: Meal periods are NOT willing to waive the overtime pay for such
compensable. Meal periods should not be less shortened meal period;
than 60 minutes. (Labor Code, Art. 85) 2. There will be no diminution whatsoever in the
salary and other fringe benefits of the
Exceptions: employees existing before the effectivity of the
1. Where the lunch period or meal time is shortened meal period;
predominantly spent for the employer's 3. The work of the employees does not involve
benefit; strenuous physical exertion and they are
2. Meal periods of 1hour are deemed provided with adequate "coffee breaks" in the
compensable when the employee is on morning and afternoon.
continuous shift (National Dev't Corp. v. CIR, 4. The value of the benefits derived by the
G.R. No. 15422, 1962) employees from the proposed work
3. Shortened meal period of less than 1 hour arrangement is equal to or commensurate with
must be compensable (IRR Labor Code, Book the compensation due them for the shortened
III, Rule 1, Sec. 7) meal period as well as the overtime pay for 30
minutes as determined by the employees
Meal period of not less than 20 minutes in the concerned;
following cases are compensable hours worked: 5. The overtime pay of the employees will
a. Where the work is non-manual work in nature become due and demandable if ever they are
or does not involve strenuous physical permitted or made beyond 4:30pm; and
exertion; 6. The effectivity of the proposed working time
b. Where the establishment regularly operates arrangement shall be of temporary duration as
not less than 16 hours a day; determined by the Secretary of Labor (2004
c. In case of actual or impending emergencies or BWC Manual on Labor Standards).
there is urgent work to be performed on
machineries, equipment or installations to Note: For a full one (1) hour undisturbed lunch
avoid serious loss which the employer would break, the employees can freely and effectively
otherwise suffer; and use this hour not only for eating but also for their
d. Where the work is necessary to prevent rest and comfort. Since the employees are no
serious loss of perishable goods (IRR Labor longer required to work during this 1-hour lunch
Code, Book III, Rule 1, Sec. 7) break, there is no more need for them to be
PAGE 23 OF 244
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compensated for this period. (Sime Darby Pilipinas whether within or outside the premises of said
v. NLRC, G.R. No. 119205, 1998) factory, shop or boat. If these requisites are
complied with, the period of such rest shall not be
Waiting Time counted. (Luzon Stevedoring v. Luzon Marine
Department Union, G.R. No. L-9265, 1957)
Whether waiting time constitutes working time
depends upon the circumstances of each Waiting time spent by an employee shall be
particular case. The facts may show that the considered as working time if:
employee was engaged to wait or may show that 1. Waiting is an integral part of his work; or
he waited to be engaged. The controlling factor 2. The employee is required or engaged by the
is whether waiting time spent in idleness is employer to wait. (IRR Labor Code, Sec. 5[a],
spent predominantly for the employer's benefit, Rule 1, Book III)
or the employee's (Azucena Vol. I, gth ed., p .
231). When Employee is Considered Working while

on call - When employee
A laborer need not leave the premises of the 1. Is required to remain on call in the employer's
factory, shop or boat in order that his period of rest premises or so close thereto; or
shall not be counted, it being enough that he 2. Cannot use the time effectively and gainfully for
"cease to work", may rest completely and leave or his own purpose (IRR Labor Code, Sec. 5[b], Rule
may leave at his will the spot where he actually 1, Book III)
stays while working, to go somewhere else,
Travel Time
TraveithatisAWkiTs
Travel From Home-to Work
- -rravel Away from Home
Days Work
Normal travel from home to work which is Time spent by an Travel that keeps an employee
not work time employee in travel as away from home overnight
part of his principal
activity, like travel
from jobsite to jobsite
during the workday
General Rule: NOT comperisable because COUnted as hours Work time when it cuts across an
it is a normal incidentof employment worked employee's workday.
Exceptions: Cornpensable It substitutes for the hours the

Where employee made to work on an employee should have been in
emergency call and travel is necessary the office
in proceeding to the workplace
Travel is done through a conveyance
provided by the employer
3. Travel is done under the supervision
and control of the employer
4. Travel is done under vexing and
dangerous circumstances
The fact that [petitioner Rada] picks up employees adopted not so much for the convenience of the
at certain specified points in EDSA in going to the employees, but primarily for the benefit of the
project site and drops them off at the same time on employer. Since the assigned task of fetching and
his way back from the field office going home to delivering employees is indispensable and
Marikina is not merely incidental to his job as a consequently mandatory, then the time required of
driver. Said transportation arrangement had been and used by petitioner in going from his residence
PAGE 24 OF 244
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to the field office and back should be paid as teachers.(University of Pangasinan Faculty Union
overtime work. (Rada v. NLRC, G.R. No. 96078, v. Univ. of Pangasinan, G.R. 64821-23, 1993).
1992)
c. Night Shift Differential
Sleeping Time
Night Worker:
Whether sleeping time allowed an employee will Any employed person whose work requires
be considered as part of his working time will performance of a substantial number of hours of
depend upon the express or implied agreement of night work which exceed a specified limit. This limit
the parties. In the absence of an agreement, it will shall be fixed by the Secretary of Labor after
depend upon the nature of the service and its consulting the workers' representatives/labor
relation to the working time. organizations and employers. (Labor Code, Art.
154, as amended by R.A. No. 10151)
When Sleeping is Considered Working Time
_ CONSIDERED NOT CONSIDERED
WORKING TIME WORKING TIME Night Shift Differential, defined (R.A. 10151)
If sleeping time is If there an opportunity Definition: Every employee shall be paid a night
subject to serious for comparatively shift differential of not less than 10% of his regular
interruption, or takes uninterrupted sleep wage for each hour of work performed between
place under conditions under fairly desirable ten o'clock in the evening (10 pm) and six o'clock
substantially less conditions in the morning (6 am). (Labor Code, Art. 86)
desirable than would
be likely to exist at the Coverage:
employee's home This benefit applies to ALL employees EXCEPT:
(Azucena .Vol. I, 91h ed., 13, 233). (Go-FR-PMS)
1. Those of the government and any of its
Lectures, Meeting, Trainings, Programs political subdivisions, including
General Rule: Considered working time government-owned and/or controlled
Exception: NOT considered working time if the corporations;
following conditions are met: 2. Those of retail and service establishments
1. Attendance is outside of the employee's regularly employing not more than five (5)
regular working hours workers;
2. Attendance is voluntary 3. Domestic helpers and persons in the
3. The employee does not perform any personal service of another;
productive work during such attendance. (IRR 4. Managerial employees as defined in Book
Labor Code, Sec. 6, Book ill, Rule 1) Three of this Code;
5. Field personnel and other employees
- NOT whose time and performance is
COMPENSABLE
COMPENSABLE _ unsupervised by the employer including
HOURS WORKED
HOURS WORKED those who are engaged on task or
1. Attendance in 1. Attendance in contract basis, purely commission basis,
lectures, meetings, hearings in cases filed or those who are paid a fixed amount for
and training periods by the employee
performing work irrespective of the time
sanctioned by the 2. Participation in
consumed in the performance thereof.
employer strikes
(!RR Labor Code, Book III, Rule II, Sec. 1)
2. Attendance in CBA
negotiations or
grievance meetings
Semestral break of teachers is compensable

hours worked for it is a form of interruption beyond
their control. Applies only for regular full-time
PAGE 25 OF 244
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NSD = (10% x regular wage/hr.) x no. of hrs. of management of the establishment in

work between 10 pm — 6 am which he is employed or subdivision
thereof; or (ii) execute under general
NOTE: If work done between 10 pm and 6 am is supervision work along specialized or
OT work, the NSD should be based on the OT rate. technical lines requiring special training,
experience, or knowledge; or (iii)
NOTE: Additional compensation for nighttime execute, under general supervision,
work is founded on public policy. (Mercury Drug v. special assignments and tasks; and
Dayao, G.R. No. L-30452) NSD is not waivable d. Who do not devote more than 20 percent
except for higher and bigger benefits. of their hours worked in a work week to
activities which are not directly and
d. Overtime Work closely related to the performance of the
work described in paragraphs (1), (2) and
OVERTIME PAY (OT) (3) above.
Work exceeding eight hours within the worker's
24-hour workday regardless whether the work d. Non-agricultural Field Personnel
covers 2 calendar days. Work within the Non-agricultural employees who regularly
employee's shift is not overtime. perform their duties away from the principal
place of business or branch office of the
Coverage: employer and whose actual hours of work in
This benefit applies to all employees EXCEPT the field cannot be determined with
(Go-Ma-Off-FiFa-DoPe): reasonable certainty) (Autobus Transport v.
a. Government employees Bautista, G.R. No. 156367, 2005)
b. Managerial employees if they meet all of e. Members of the Family of the employer
the following conditions: who are dependent on him for support
(a) Their primary duty consists of the
management of the establishment in f. Domestic Helpers
which they are employed or of a The mere fact that the househelper or
department or sub-division thereof. domestic servant is working within the
(b) They customarily and regularly direct the premises of the business of the employer and
work of two or more employees therein. in relation to or in connection with its business,
(c) They have the authority to hire or fire as in its staff houses for its guest or even for
employees of lower rank; or their its officers and employees, warrants the
suggestions and recommendations as to conclusion that such househelper or domestic
hiring and firing and as to the promotion or servant is and should be considered as a
any other change of status of other regular employee of the employer and not as
employees, are given particular weight. a mere family househelper or domestic
(IRR Labor Code, Book Ill, Rule!, Sec. 2) servant. (Apex Mining Company v. NLRC,
G.R. No. 94951, 1991).
c. Officer or members of a managerial staff if
they perform the following duties and g• Persons in the personal service of another
responsibilities:
a. The primary duty consists of the h. Workers who are paid by Results (1RR
performance of work directly related to Labor Code, Book III, Rule I, Sec. 2)
management policies of their employer;
b. Customarily and regularly exercise
discretion and independent judgment;
and
c. (i) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
PAGE 26 OF 244
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Overtime Pay Rates Overtime Pay Premium Pay

Additional Additional
_ - SCENARIO RATE compensation for compensation
OT ON A Regular wage + at least work performed required by law for
REGULAR DAY 25% thereof beyond 8 hours a day. work performed within
OT ON A Rest day or special Every employee who 8 hours on non-
HOLIDAY/SPECIAL holiday wage rate is entitled to premium working days, such as
DAY/EMPLOYEES (130%) + 30% thereof. pay is likewise entitled rest days, and regular
REST DAY to the benefit of and special holidays.
OT ON A HOLIDAY Rest day & holiday overtime pay.
WHICH FALLS ON wage rate (150%) +
A REST DAY 30% thereof. Conditions to be entitled to OT pay
1. Actual rendition of OT work
NOTE: Since OT work is considered hourly, the 2. Submission of sufficient proof that said work
pay rate is computed on per hour basis. The daily was actually performed (Cagarnpan v. NLRC,
wage is divided by 8 to get the hourly base rate. G.R. No. 85122-24)
3. OT work is with the knowledge and consent of
If employee is paid on a monthly salary basis, the the employer (Azucena, 254)
daily rate is obtained by the following formula:
NOTE: On rest days and holidays, written
Daily Rate = monthly salary x 12 authority after office hours is required for
Total no of days considered entitlement to compensation (Global Incorporated
paid in a year v. Atienza)
It is permissible for the employer to stipulate that Proof of Hours Worked

the employee's monthly salary constitutes Entitlement to overtime pay must first be
payment for all the days of the month, including established by proof that said overtime work was
rest days and holidays, where the employee's actually performed, before an employee may avail
monthly salary, when converted by the increased of said benefit. (Lagatic v. NLRC, G.R. No.
divisor into its daily equivalent, would still meet 121004, 1998)
minimum wage. (Interphil Laboratories Employees
Union-FFW v. Interphil Laboratories, Inc., G.R. No. Burden of Proof: When an employer alleges that
142824, 2001) his employee works less than the normal hours of
employment as provided for in the law, the
Regular Wage employer bears the burden of proving his
Includes the cash wage only, without deduction on allegation with clear and satisfactory evidence.
account of facilities provided by the employer. (Prangan v. NLRC, G.R. No. 126569, 1998)
(Bisig ng Manggagawa ng Philippine Refining Co.
v. Philipine Refining Co., G.R. No. L-2776, 1981) Emergency OT Work
General Rule: Employees cannot be compelled to
NOTE: When the overtime work is performed on render overtime work against their will.
the ,employee's rest day or on special days or
regular holidays (Labor Code, Arts. 93-94), the Exceptions: (P2W2IM)
premium pay must be included in the computation 1. When the country is at war or when any
of overtime pay (Bureau of Working Conditions, other national or local emergency has
Handbook on Worker's Statutory Monetary been declared by Congress or the Chief
Benefits, p. 19, 2006) Executive;
2. When overtime work is necessary to
prevent loss of life or property, or in case
of imminent'clanger to public safety due to
actual or impending emergency in the
locality caused by serious accident, fire,
PAGE 27 OF 244
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floods, typhoons, earthquake, epidemic or considering that a pre-approved overtime

other disaster or calamities; schedule and daily time record is required before
3. When there is urgent work to be overtime pay can be claimed.
performed on machines, installations, or
equipment, in order to avoid serious loss While as a general rule, the parties may enter into
or damage to the employer or some other any kind of stipulation in a contract and the same
causes of similar nature; shall be considered as the law between them,
4. When the work is necessary to prevent however, it must be emphasized that a labor
loss or damage to perishable goods; contract is not an ordinary contract since it is
5. When the completion or continuation of impressed with public interest. Thus, the parties
are prohibited to enter into any stipulation which
work started before the 8th hour is
may result in the reduction of any employee
necessary to prevent serious obstruction
benefits. (Labor Code, Art. 100; Republic Planters
or prejudice to the business or operations
Bank v. NLRC, G.R. 117460, 1997)
of the employer; or
6. When overtime work is necessary to avail
The employer and the employee are not prohibited
of favorable weather or environmental under the law to enter into an agreement for the
conditions where performance or quality increase of whatever benefit being mandated by
of work is dependent thereon (IRR Labor law for the simple reason that any such increase
Code, Book III, Rule I, Sec. 10) certainly redounds to the benefit of the employee.
Note: This is an exclusive list. (IRR Labor Code, Thus, the employer and the employee may legally
Book III, Rule I, Sec. 10) and validly agree to increase the minimum
percentage provided for night differential pay,
Undertime NOT offset by OT overtime pay, and premium pay. (Republic
Offsetting of undertime hours against the OT hours Planters Bank v. NLRC, G.R. 117460, 1997)
whether on the same or any other day is prohibited
by law. (Labor Code, Art. 88) Note: Compressed work week is an exception to
OT (DOLE Advisory No. 2-04)
Overtime pay does not preclude night shift
differential pay Work Hours of Seamen
When the tour of duty of a laborer falls at nighttime Seamen are required to stay on board of their
[between 10:00pm and 6:00am], the receipt of vessels by the very nature of their duties, and it is
overtime pay will not preclude the right to night for this reason that, in addition to their regular
differential pay. The latter is payment for work compensation, they are given free living quarters
done during the night while the other is payment to be on board. It could not have been the purpose
for the excess of the regular eight-hour work. of the law to require their employers to pay them
(Naric v. Naric Workers Union, G.R. No. 12075, overtime pay even when they are not actually
1959) working. The correct criterion in determining
whether sailors are entitled to overtime pay is
Waiver of overtime pay whether they actually rendered service in excess
Right to OT pay cannot be waived. But when the of said number of hours. (Cagampan v. NLRC,
alleged waiver of OT pay is in consideration of G.R. No. 85122-24, 1991)
benefits and privileges, which may even exceed
the OT pay, the waiver may be permitted. (Bisig Composite or package pay is not per se illegal
Manggagawa sa Tryco v. NLRC, G.R. No. 151309, Composite or "package pay" or "all-inclusive
2008) salary" is an arrangement where the employee's
salary includes the overtime pay. The overtime
In Intertranz Container Lines, Inc. v. Bautista, pay is "built-in" (Trans-Asia PhiIs. Employees
(G.R. No. 187693, 2010), the Court held that an Association v. NLRC, G.R. No. 118289, 1999)
employee may not sweepingly claim that overtime
work was performed and consequent pap-dent for
such work is compensable absent any evidence
that overtime work was indeed performed
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Two conditions for validity of such arrangement: e. Computation of additional compensation

1) There is a clear written arrangement knowingly (rates only); facilities vs. supplements
and freely entered by the employee; and
Facilities versus supplements
2) The mathematical result shows that the agreed
legal wage rate and the overtime pay, computed (a) Facilities
separately, are equal to or higher than the Articles or services for the benefit of the employee
separate amounts legally due (Damasco v. NLRC, or his family but shall not include tools of the trade
G.R. No. 115755, 2000) or articles or ; may be deducted from the
employees' wages.
Synthesis: Overtime Rules
1) An employer cannot compel an employee to Acceptance of Facilities
work overtime In order that the cost of facilities furnished by the
employer may be charged against an employee,
Exception: Emergency overtime work (Labor the employee's acceptance of such facilities must
Code, Art. 89) be voluntary.
2) Additional compensation is demandable only if Requirements for deducting value of facilities:

the employer had knowledge and consented to the 1. Proof must be shown that such facilities are
overtime work rendered by the employee customarily furnished by the trade
2. The provision of deductible facilities must be
Exception: Express approval by a superior NOT voluntarily accepted in writing by the
a requisite to make overtime compensable: employee
1. If the work performed is necessary, or that it 3. The facilities must be charged at fair and
benefited the company; or reasonable value. (SLL International Cable
2. That the employee could not abandon his work Specialists v. NLRC, G.R. No. 172161, 2011).
at the end of his eight-hour work because
there was no substitute ready to take his place Note: As regards meals and snacks, the employer
(Manila Railroad Co. v. C1R, G.R. No. L-4614, may deduct from the wages not more than 70% of
1952) the value of the meals and snacks enjoyed by the
employees, provided that such deduction is
NOTE: The claim for overtime is not justified authorized in writing by the employees.
in the absence of a written authority to render
overtime after office hours during Sundays The remaining 30% of the value has to be
and holidays (Global Incorporate v. Atienza, subsidized by the employer. (IRR Labor Code,
G.R. No. L-51612, 1986) Sec. 1, Rule VII-A, Book III)
3) Compensation for work rendered in excess of (b) Supplements

the 8 normal working hours a day The benefit or privilege given to the employee which
1. For ordinary days, additional 25% of the constitutes an extra remuneration over and above
basic hourly rate his basic or ordinary earning or wage, is supplement.
2. For rest day/special day/holiday, additional Thus, free meals supplied by the ship operator to
30% of the basic hourly rate crew member's, out of necessity, cannot be
considered as facilities but supplements which could
4) A given day is considered an ordinary day, not be reduced having been given not as part of
unless it is a rest day wages but as a necessary matter in the maintenance
of the health and efficiency of the crew personnel
5) Undertime does not offset overtime (Labor during the voyage. (States Marine Corporation and
Code, Art. 88) Royal Line, Inc. v. Cebu Seamen's Association, Inc.,
G.R. No. L-12444, 1963).
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Criterion: In determining whether a privilege is a 3. Employee's preference based on religious

facility, the criterion is not so much its kind but its grounds
PURPOSE (Miltares v NLRC & PICOP, G.R. no.
122827, 1999) Preference of employee — The preference of the
employee as to his weekly day of rest shall be
FACILITIES - , SUPPLEMENTS respected by the employer if the same is based on
t it is religious grounds. (Labor Code, Art. 91)
Necessary items of Extra remuneration or
expense, articles, or special privileges/ The employee shall make known his preference
services benefits/ articles or to the employer in writing at least seven (7) days
services / tools of the before the desired effectivity of the initial rest day
trade so preferred. (IRR Labor Code, Sec. 4, Rule III,
--W1Ve PrilOhs ' Book III)
For the benefit of the For the benefit or
employee and his convenience of the Exception: Where, the choice of the employee as
family; for their employer to his rest day based on religious grounds will
existence and inevitably result in serious prejudice or obstruction
subsistence to the operations of the undertaking and the
Peduct!kI,ty fr44404.9 employer cannot normally be expected to resort to
Part of the wage Independent of the other remedial measures, the employer may
wage schedule the weekly rest day of his choice for
Deductible from the Not wage deductible at least two (2) days in a month. (IRR Labor
wage Code, Sec. 4, Rule III, Book III)
Rest Periods Schedule of Rest Day

a. Where the weekly rest is given to all
3. Weekly Rest Periods employees simultaneously — the employer
shall make known such rest period by means
Applies to all employers whether operating for of a written notice posted conspicuously in the
profit or not, including public utilities operated by work place at least one week before it
private persons becomes effective
b. Where the rest period is not granted to all
It is the duty of every employer, whether operating employees simultaneously and collectively —
for profit or not, including public utilities operated the employer shall make known to the
by private persons, to provide each of his employees their respective schedules of
employees a rest period of not less than 24 weekly rest through written notices posted
consecutive hours for every 6 normal work days. conspicuously in the work place at least one
(Labor Code, Art. 91) week before they become effective
Business on Sundays/Holidays — All Employer May Require Work on Rest Day

establishments and enterprises may operate or General Rule: The employer may not require the
open for business on Sundays and holidays employees to work on a rest day.
provided that the employees are given the weekly
rest day and the benefits as provided. Exceptions: (UAAP FAN)
1. In case of Urgent work to be performed on
Who Determines Weekly Rest Days machineries, equipment or installations to
The employer determines and schedules the avoid serious loss which the employer would
weekly rest period subject to the following: otherwise suffer
1. Collective Bargaining Agreement; 2. In case of Actual or impending
2. I-tules and regulations issued by the Secretary emergencies caused by serious accident,
of Labor; and fire, flood, typhoon, earthquake, epidemic or
other disaster or calamity, to prevent loss of
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life or property, or in cases of force majeure or Note: There can be no valid waiver of
imminent danger to public safety compensation for work done on a rest day or
3. In the event of Abnormal pressure of work holiday.
due to special circumstances, where the
employer cannot ordinarily be expected to Synthesis of the Rules
resort to other measures 1. Rest day of not less than 24 consecutive hours
4. To prevent serious loss of Perishable goods after 6 consecutive days of work.
5. Where the Nature of the work is such that the 2. No work, no pay principle applies
employees have to work continuously for 7 3. If an employee works on his designated rest
days in a week or more, as in the case of the day, he is entitled to a premium pay.
crew members of a vessel to complete a 4. Premium pay is additional 30% of the basic
voyage and in other similar cases (IRR Labor
pay.
Code, Sec. 6, Rule III, Book III)
5. Employer selects the rest day of his
6. Under other Analogous or similar
employees
circumstances
7. Where nature of work requires continuous 6. However, employer must consider the
operations and the stoppage of work may religious reasons for the choice of a rest day.
result in irreparable injury or loss to the 7. When the choice of the employee as to his rest
employer (Labor Code, Art. 92) day based on religious grounds will inevitably
result in serious prejudice or obstruction to the
Other than the above circumstances, no employee operations and the employer cannot normally
shall be required against his will to work on his be expected to resort to other measures, the
scheduled rest day. employer may so schedule the weekly rest day
of his choice for at least two days in a month.
When an employee volunteers to work on his rest (IRR Labor Code, Sec. 4, Book Ill, Rule III)
day under other circumstances, he shall express
such desire in writing, subject to payment of 4. Holidays
additional compensation.
Holiday Pay: Coverage; Exclusions
An employee shall be entitled additional
Right to Holiday Pay
compensation for work performed on a Sunday
Holiday pay refers to the payment of the regular
only when it is his established rest day.
daily wage for any unworked regular holiday.
(Handbook on Workers' Statutory Monetary
The failure to work during an employer's rest day
Benefits, Bureau of Working Conditions, p. 12,
does not justify the disciplinary sanction of outright
2016)
dismissal from employment as such is so severe a
consequence, moreso when justifiable grounds
Coverage:
exist for said failure (Remerco Garments
General Rule: Applies to ALL employees.
Manufactuing v. Minister of Labor, G.R. No. L-
56176-77, 1985)
Exceptions:
1. Those of the government and any of the
Employees NOT covered,, political subdivision, including
Employees excepted under Article 82 of the government-owned and controlled
Labor Code are, generally, not covered by the corporation;
rule on additional compensation. 2. Those of retail and service establishments
regularly employing less than ten (10)
Remuneration of employee working on a rest workers;
day — REGULAR REMUNERATION (100%) + 3. Domestic helpers and persons in the
PREMIUM PAY (additional sum of at least 30% of personal service of another;
the regular remuneration) 4. Managerial employees as defined in Book
Three of the Code;
5. Field personnel and other employees
whose time and performance is
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unsupervised by the employer including Muslims and Christians working within the
those who are engaged on task or Muslim areas may not report for work on the
contract basis, purely commission basis, days designated by law as Muslim Holidays.
or those who are paid a fixed amount for (SMC v. CA, G.R. No. 146775, January 30, 2002).
performing work irrespective of the time
consumed in the performance thereof.
Successive Regular Holidays
(IRR Labor Code, Sec. 1, Rule IV, Book
III) Where there are 2 successive regular holidays,
like Holy Thursday and Good Friday, an employee
Regular Holidays may not be paid for both holidays if he absents
1. New Year's Day — Jan. 1 himself from work on the day immediately
2. Maundy Thursday — Movable Date preceding the first holiday, unless he works on the
3. Good Friday — Movable Date first holiday, in which case he is entitled to his
4. Araw ng Kagitingan — April 9 holiday pay on the second holiday.
5. Labor Day — May 1
6. Independence Day — June 12 Double Holiday
7. Nat'l Heroes Day — Last Mon. of Aug. 1. If unworked — employee entitled to 200% of
8. Bonifacio Day — Nov. 30 basic wage, provided he was present or on
9. Eid al Fit'r — Movable Date leave with pay on the preceding work day
10. Eid al Adha Movable Date 2. If worked — employee entitled to 300% of basic
11. Christmas Day — Dec. 25 wage. Only an employee who works on the day
12. Rizal Day — Dec. 30 immediately preceding or after a regular
holiday shall be entitled to the holiday pay. A
Special Days paid legal holiday occurring during the
1. Ninoy Aquino Day — August 21 scheduled vacation leave will result in holiday
2. All Saints' Day — Nov. 1 payment in addition to normal vacation pay but
3. Last Day of the Year — Dec. 31 will not entitle the employee to another vacation
4. Special Non-Working Days leave. (Asian Transmission v. CA, GR No.
5. Special Public Holidays 144664, March 15, 2004)
6. Special National Holiday
Holiday-Sunday
Muslim Holidays A legal holiday falling on a Sunday creates no legal
General Rule: Muslim holidays are observed only obligation for the employer to pay extra, aside from
in specified areas the usual holiday pay, to its monthly-paid
1. Amun Jadid (New Year) employees.
2. Maulid un-Nabi (Birthday of the Prophet
Muhammad) In cases temporary cessation of work
3. Lailatul lsra Wal Miraj (Nocturnal Journey and Regular holidays falling within this period are
the Ascencion of the Prophet Muhammad) compensabie (i.e. yearly inventory, repair or
cleaning of machineries or equipment, etc).
Exception: Eid al Fit'r and Eid ul Adha
(Celebrated nationwide) However, in the case of a regular holiday during
the cessation of operations due to business
Muslim employees working outside of the reverses as authorized by the Secretary of Labor,
specified areas shall be excused from reporting for the employer may not pay the regular holidays
work during the observance of the Muslim holidays during this period.
as recognized by law, without diminution of salary
or wages during the period. In cases of periodic and temporary closures, the
Omnibus Rules Implementing the Labor Code
Considering that all private corporations, offices, Book 3 Rule IV Section 7 provides that in cases
agencies, and entities or establishments operation of temporary or periodic shutdown and temporary
within the designated Muslim provinces and cities cessation of work of an establishment, as when a
are required to observe Muslim holidays, both yearly inventory or when the repair of cleaning
PAGE 32 OF 244
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machines and equipment is undertaken, the minimum wage shall not be less than the statutory
regular holidays falling within the period shall be minimum wage multiplied by 365 days divided by
compensated. twelve," and to pay that salary "for all days in the
month whether worked or not," and "irrespective of
Teachers, Pieceworkers, Takay, Seasonal the number of working days therein." (Wellington
Workers, Seafarers v. Trajano, GR No. 114698, 1995)
Holiday Pay of Certain Employees: Divisors

1. Private School teachers including faculty The divisor assumes an important role in
members of college and universities - may determining whether or not holiday pay is already
not be paid for the regular holidays during included in the monthly paid employee's salary
semestral vacations. Paid for the regular and in the computation of his daily rate. (Union of
holidays during Christmas vacation (Jose Filipro Empl. v. Vivar, Jr, G.R. No. 79255, 1992)
Rizal College v. NLRC & NA TOW, G.R. No. L-
65428, 1987) The divisor used in arriving at an employee's daily
2. Employee paid by results (payment on rate for the purpose of computing salary-related
piece-work) - holiday pay shall not be less benefits is 261. From the 365 days in a year, we
than his average daily earnings for the last 7 deduct 104 rest days which gives a total of 261
actual working days preceding the regular days. Now, if 261 days is the number of working
holiday; Provided, However, that in no case days of the employees then, there is a disputable
shall the holiday pay be less than the presumption that the employees are paid their
applicable statutory minimum wage rate holiday pay. (Producer's Bank v. NLRC, G.R.
3. Seafarers - any hours of work or duty No.100701, 2001)
including hours of watch keeping performed
on designated rest days and holidays shall be The 251 working days divisor is the result of
paid rest day or holiday subtracting all Saturdays, Sundays and the ten
4. Seasonal workers - may not be paid the (10) legal holidays from the total number of
required holiday pay during off-season when calendar days in a year. If the employees are
they are not at work already paid for all non-working days, the divisor
5. Workers without regular working clays - should be 365 and not 251. (Chartered Bank v.
entitled to the benefits, under item d, Section Ople, GR No. L-44717, 1985)
8, Rule IV of the Omnibus Rules Implementing
the Labor Code. Outline of Rules on Payment of Holiday Pay
REGULAR HOLIDAYS
Holiday pay is a legislated benefit enacted as part
of the Constitutional imperative that the State shall Falling on a regular work day
afford protection to labor. Its purpose is not merely 100% '(E- 0:EFT: i6 re ; and
Unworked 4
"to prevent diminution of the monthly income of the - se astablis rnents
workers on account of work interruptions. In other ,e,n104#410.0,.t. a'fl, 10 1:AigrAP.I:s),..
words, although the worker is forced to take a rest, First 8 Hours 200%
he earns what he should earn, that is, his holiday + 30% of
Worked
pay." (RFM Corporation v. Kasapian, GR No. Excess of 8 Hours hourly rate
,
162324, 2009) on said day
Falling opa:rest day
There is no provision of law requiring any Unworked 100%
employer to make such adjustments in the monthly + 3 0% o
First 8 nOgTs
salary rate set by him to take account of legal .0%,.
holidays falling on Sundays in a given year, or, i3O `)/0 of '
Worked
contrary to the legal provisions bearing on the Excess of 8 hour hourly rate
point, otherwise to reckon a year at more than 365 R.500 day- -
days. What the law requires of employers opting ' 'SPECIAL DAYS
to pay by the month is to assure that "the monthly
PAGE 33 OF 244
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NO PAY, unless there is a 5. Those already enjoying this benefit;

favorable company policy, 6. Those enjoying vacation leave with pay of at
Unworked practice or CBA granting least five (5) days; and
payment of wages on special 7. Those employed in establishments regularly
days even if unworked employing less than ten (10) employees. (IRR
Labor Code, Sec. 1, Rule V, Book III)
daily rate
Meaning of "at least 1 year of service"
Service for not less than 12 months, whether
continuous or broken reckoned from the date the
Exce,sstif
. . • ::... hourly:Ate.:-
8 hour
employee started working, including authorized
LPO:g01.0:40 absences and paid regular holidays unless the
Worked & 1450°
working days in the establishment as a matter of
FjalIirg On dallysra
practice or policy, or that provided in the
A, Rest
Excess of 8 hours' employment contract is less than 12 months, in
purlY'fAt. which case said period shall be considered as one
SPECIAL WORKING HOLIDAYS — only the
year (Integrated Contractor and Plumbing Works
- basic rate
v. NLRC, G.R. No. 152427, 2005)
5. Service incentive leaves
Usage/Conversion to Cash
General Rule: Commutable to its money
Right To Service Incentive Leave
equivalent if not used or exhausted at the end of
Definition: Every employee who has rendered at
the year. (Fernandez v. NLRC, G.R. No. 105982,
least 1 year of service shall be entitled to a yearly
1998)
service incentive leave of 5 days with pay. (Labor
Code, Art. 95)
Note: The basis for the computation is the salary
at the date of commutation/conversion of the SIL.
Coverage:
This benefit applies to all employees, EXCEPT:
Exception: Under the Kasambahay Law, a
1. Government employees, whether employed
domestic workerwho has rendered at least one (1)
by the National Government or any of its
year of service shall be entitled to an annual
political subdivisions, including those
service incentive leave of five (5) days with pay,
employed in government-owned and/or
provided that any unused portion of said annual
controlled corporations with original charters
leave shall NOT be cumulative or carried over to
or created under special laws;
the succeeding years. Unused leaves shall NOT
2. House helpers and persons in the personal
be convertible to cash. (R.A. No. 10361, Sec. 29)
service of another;
3. Managerial employees, if they meet all of the
Illegal Dismissal
following conditions.
An employee who is illegally dismissed is entitled
3.1. Their primary duty is to manage the
to service incentive leave benefits computed 1
establishment in which they are
year from the date she started working until the
employed or of a department or
date of her actual reinstatement. (Imbutido v.
subdivision thereof;
NLRC, G.R. No. 114734, 2000)
3.2. They customarily and regularly direct the
work of two or more employees therein;
Prescription of Claim for SIL
3.3. They have the authority to hire or fire
Art. 306 is not a prescription of a period of time for
other employees of lower rank; or their
the computation of money claims but is a
suggestions and recommendations as to
prescription of filing an action upon monetary
hiring, firing, and promotion, or any other
claims from the time the cause of action accrued.
change of status of other employees are
The employee may use his SIL benefits as leave
given particular weight.
days or he may collect its monetary value. To limit
4. Field personnel and those whose time and
performance is unsupervised by the employer;
PAGE 34 OF 244
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the award to 3 years is to unduly restrict such right. charges such as hotels, restaurants, lodging
(Fernandez v. NLRC, G.R. No. 105892, 1998) houses, night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling houses, and
The cause of action of an entitled employee to similar enterprises, including those entities
claim his service incentive leave pay accrues from operating primarily as private subsidiaries of the
the moment the employer refuses to remunerate Government. (Labor Code, Art. 96)
its monetary equivalent if the employee did not
make use of said leave credits but instead chose Coverage
to avail of its commutation. Accordingly, if the All employees of covered employers, regardless of
employee wishes to accumulate his leave credits their positions, designations or employment
and opts for its commutation upon his resignation status, and irrespective of the method by which
or separation from employment, his cause of their wages are paid
action to claim the whole amount of his
accumulated service incentive leave shall arise EXCEPT to managerial employees
when the employer fails to pay such amount at the
time of his resignation or separation from Service Charge different from Tip
employment. (Autobus Transport System Inc. v. Tip, not normally part of the salary, it being given
Bautista, G.R. No. 156367, 2005) voluntarily by the customer. Service charges are
considered part of the cost of the food, goods, or
Vacation Leave (VL) / Sick Leave (SL) services ordered by the customers.
Not required by law and depends on voluntary
employer policy (management prerogative) or Distribution
collective bargaining. (see Sugue v. Trimpuh a. 85% distributed equally among the covered
International [Phils], G.R. No. 164804, 2009) employees
b. 15% for the disposition by management to
It can be waived, as the VL/SL may be considered answer for losses and breakages and
a concession or act of grace of the employer. distribution to managerial employees at the
discretion of the management in the latter
SUMMARY OF EXCLUSIONS case
NSD Holiday SIL c. Distributed and paid to the employees not less
Pay than once every 2 weeks or twice a month at
Gov't x x x intervals not exceeding 16 days
employees d. Supervisors share in the 15%. LC speaks of
Retail/ Service 5 and 9 and 9 and below "management," and not "managerial
Establishments below below (establishments employees."
in general)
Domestic x x x Abolition and Integration
Workers -- In case the service charge is abolished, the share
Managerial x x x of the covered employees shall be integrated into
Employees their wages. (Labor Code, Art. 96)
Field x x x
Personnel The basis of the amount to be integrated shall be
the average monthly share of each employee for
6. Service Charges the past 12 months immediately preceding the
abolition of withdrawal of the charges. (IRR Labor
Definition: Code, Sec. 5, Rule VI, Book 3)
Service charges are considered part of the cost of
the food, goods, or services ordered by the
customers.
Establishments
Applies only to establishments collecting service
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7. ir Month Pay
Basic Salary
Governing Laws INCLUDES:
P.D. No. 851 (The 13th-month Pay Law) and the All remunerations or earnings paid by an employer
Revised Guidelines on the Implementation of the to an employee for services rendered .
13'h Month Pay Law
DOES NOT INCLUDE:
a. Coverage: 1. Cost of living allowances (COLA),
All employers are required to pay all their rank- 2. Profit-sharing payments and
and-file employees, a 13th month pay not later 3. All allowances and monetary benefits (e.g.
than December 24 of every year, provided that unused VL and sick leave credits, OT
they have worked for at least 1 month during a premium, night differential and holiday pay)
calendar year. which are not considered or integrated as part
of the regular or basic salary of the employee.
b. Exempted employers: However, the above should be included in the
a. Government and any of its political computation if by individual or collective
subdivisions, including GOCCs, except those agreement, company practice or policy.
corporations operating essentially as private
subsidiaries of the Government; Time of Payment
b. Employers already paying their employees The thirteenth-month pay shall be paid not later
13th month pay or more in a calendar year or than December 24 of every year. An employer,
its equivalent at the time of issuance of PD 851 however, may give to his or her employees one-
• "Its equivalent" — includes Christmas half (1/2) of the thirteenth-month pay before the
bonus, mid-year bonus, cash bonuses opening of the regular school year and the
and other payments amounting to not less remaining half on or before December 24 of every
than 1/12 of the basic salary but shall not year.
include cash and stock dividends, COLA
and all other allowances regularly enjoyed The frequency of payment of this monetary benefit
by the employee as well as non-monetary may be the subject of an agreement between the
benefits. employer and the recognized/collective bargaining
c. Employers of household helpers and persons agent of the employees.
in the personal service of another in relation to
such workers 13th Month Pay for Certain Types of
d. Employers of those who are paid on Employees
commission, boundary, or task basis, and 1. Employees paid by results — entitled to 13th
those who are paid a fixed amount for month pay
performance of a specific work, irrespective of 2. Those with Multiple Employers — entitled to the
the time consumed in the performance thereof 13th month pay from all their private
employers regardless of their total earnings
Exception: where the workers are paid on a from each or all of their employers
piece-rate basis, in which case the employer 3. Private School Teachers — entitled regardless
shall grant the required 13th month pay to of the number of months they teach or are paid
such workers. within a year, if they have rendered service for
• Piece Rate — employees who are paid a at least 1 month within a year.
standard amount for every piece or unit of
work produced that is more or less 13th Month Pay of Resigned or Separated
regularly replicated, without regard to the Employee
time spent in producing the same. Employee is entitled to the benefit in proportion to
the length of time he worked during the year,
Computation of 13th month pay reckoned from the time he started working during
13th Month Pay = 1/12th of the basic salary of an the calendar year up to the time of his resignation
employee within a calendar year. or termination from the service. Can be demanded
PAGE 36 OF 244
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by the employee upon the cessation of EER. In principle, where these earnings and
remuneration are closely akin to fringe benefits,
Non-inclusion in Regular Wage overtime pay or profit-sharing payments, they are
Benefit need not be credited as part of regular properly excluded in computing the 13th month
wage of employees for purposes of determining pay. However, sales commissions which are
OT pay and premium pays, fringe benefits as well effectively an integral portion of the basic salary
as contributions to the state insurance fund, Social structure of an employee, shall be included in
Security, Medicare, and private retirement plans. determining his 13th month pay. (Philippine
Duplicators v. NLRC, GR No. 110068, 1995)
c. Nature of 13th month pay
All employers are hereby required to pay all their e. CBA vis-à-vis 13th month pay
employees receiving a basic salary of not more Employers who are already paying their
than P1,000 a month, regardless of the nature of employees a 13th month pay "or its equivalent" are
their employment, a 13th-month pay not later than not covered by the decree.
December 24 of every year. (P.D. No. 851, Sec. 1)
Note: "Equivalent" includes:
The payment of a thirteenth-month pay is a a) Christmas bonus, mid-year bonus, cash
statutory grant, and compliance therewith is bonuses;
mandatory. The benefit is deemed written in every b) and Other payments amounting to not less than
CBA. 1/12 of the basic salary;
c) But shall not include cash and stock dividends,
Food and other material things are not substitute cost of living allowances, and all other allowances
for 13th month pay. regularly enjoyed by the employee as well as non-
monetary benefits (IRR P.D. 851, Sec. 3[e])
Proportionate 13th month pay accrues to
employees who worked only for a period of less An employer is not obliged to give a 13th month
than twelve months in a given year. salary in addition to other bonuses stipulated in a
CBA amounting to more than a month's pay. (See
Note: 13th month pay is a non-strike able issue. Brokenshire MemorialHospital Inc., v. NLRC, G.R.
No. L-69741, 1986)
d. Commissions vis-à-vis 13th month pay
If the commissions may be properly considered In Relation to Collective Bargaining
part of the basic salary — included in computing the Agreements and Employer-Employee
13th month pay Agreements
1. Nothing in the Rules shall prevent the
If the commissions are not part of basic salary — employer and employee from entering into any
excluded. agreement with terms more favorable to the
employees than those granted therein, or be
In Boie-Takeda Chemicals v. Hon. Lasema (GR used to diminish any benefit granted to the
No. 92174, 1993) we note that productivity employees under existing laws, agreement
bonuses are generally tied to the productivity, or AND voluntary employer practice. (Sec. 6,
capacity for revenue production, of a corporation; Rule VI, Book 3, IRR)
such bonuses closely resemble profit-sharing 2. The rule is without prejudice to existing, future
payments and have no clear director necessary collective bargaining agreements. (Sec. 7,
relation to the amount of work actually done by Rule VI, Book 3, IRR)
each individual employee. More generally, a
bonus is an amount granted and paid ex gratia to Synthesis of the Rules
the employee; its payment constitutes an act of 1. Service charges must be pooled;
enlightened generosity and self-interest on the 2. Where a restaurant or similar establishment
part of the employer, rather than as a demandable does not collect service charges but has a
or enforceable obligation. practice or policy of monitoring and pooling
tips given voluntarily by its customers to its
PAGE 37 OF 244
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employees, the pooled tips should be B. WAGES

monitored, accounted for and distributed in the
same manner as the services charges. (DOLE Wage versus salary
Handbook on Workers' Statutory Monetary
Benefits, 2014ed.) (a) "Wage"
3. The amount collected is divided between the
company (15%) and employees (85%); Wages paid to any employee shall mean the:
1. Remuneration or earnings, however
4. It shall be given twice a month with intervals of
designated, capable of being expressed in
not more than 16 days;
terms of money, whether fixed or ascertained
5. If discontinued, removed, or stopped, the
on a time, task, piece, or commission basis, or
average share of the employees of their
other method of calculating the same, which is
service charge or tips shall be integrated with
payable by an employer to an employee under
their basic wage. a written or unwritten contract of employment
for work done or to be done, or for services
rendered or to be rendered;
2. INCLUDES, the fair and reasonable value, as

determined by the DOLE Secretary, of board,
lodging, or other facilities customarily
furnished by the employer to the employee.
"Fair and reasonable value" shall not

include any profit to the employer, or to any
person affiliated with the employer. (Id.)
WAGE. SALARY
Paid for skilled or Paid to white collar
unskilled manual workers and denote a
labor higher grade of
employment
Not subject Not exempt from
execution, execution,
garnishment or garnishment or
attachment except attachment. (Gaa v.
for debts related to CA, G.R. No. L-44169,
necessities (Civil 1985)
Code, Art. 1708)
Minimum wage is set by law or wage order issued

by the Regional Tripartite Wages and Productivity
Boards (RTWPB's) or the rate which may be fixed
by the employer provided the same is not lower
than the legally mandated minimum wage for
agricultural or non-agricultural workers.
Wage or Salary includes:

Commission; Facilities; and Commodities/
Supplements
PAGE 38 OF 244
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No Work — No Pay Principle Industries and Development Authority in

General Rule: A fair day's wage for a fair day's accordance with RA 8470
labor. (Sugue v. Triumph International [Phi/s.], 7. Retail and service establishments regularly
G.R. No. 164804, 2009) employing not more than 10 workers
Exception: Where the employer was able, willing, (c) Minimum Wage of Workers Paid BY
and ready to work but was prevented by RESULTS
management or was illegally locked out,
suspended or dismissed, or otherwise illegally i. Workers paid by results
prevented from working (Sugue v. Triumph All workers paid by result, including those who are
International, supra) paid on piecework, takay, pakyaw or task basis,
shall receive not less than the prescribed wage
BUT: Where the failure of employees to work was rates per eight (8) hours of work a day, or a
not due to the employer's fault, the burden of proportion thereof for working less than eight (8)
economic loss suffered by the employees should hours. (Labor Code, Art. 124)
not be shifted to the employer. Each party must
bear his own loss. ii. Apprentices
Wage rates of apprentices shall conform to the
Equal Pay for Equal Work rules issued by the Secretary of Labor. Wages
Employees holding the same position and rank are shall in no case be less than 75% of the applicable
presumed to be performing equal work. The rule minimum wage rates. (Labor Code, Art. 61 & 75)
equal pay for equal work applies whether the
employee is hired locally or abroad (ISAE v. Note: Learners employed in piece or incentive-
Quisumbing, G.R. No. 128845, 2000) rate jobs during the training period shall be paid in
full for the work done (Labor Code, Art. 76)
(b) Coverage/Exclusion
The Secretary of Labor may authorize the hiring of
The rule on wages applies to ALL workers. (SLL apprentices without compensation whose training
International Cables, G.R. No. 172161, 2011). on the job is required by the school or training
program curriculum or as a requisite for graduation
EXCEPT: (FaB-CD-CHR10) or board examination. (Labor Code, Art. 72)
1. Farm tenancy / leasehold
2. Domestic service iii. Learners
3. Persons working in their respective homes in Wages of learners shall begin at not less than 75%
needle work or in any Cottage industry duly of the applicable minimum wage. (Labor Code, Art.
registered in accordance with law 75)
4. Barangay micro business enterprise (. MBE)
under RA 9178, the BMBE Law. BMBE — any - Learners employed in piece or incentive-rate jobs
business entity or enterprise engaged in the during the training period shall be paid in full for
production, processing, or manufacturing of the work done. (Labor Code, Art. 76)
products or commodities, including agro-
processing, trading and services, whose total iv. Persons with Disability
assets including those arising from loans but A qualified disabled employee shall be subject to
exclusive of the land on which the particular the same terms and conditions of employment and
business entity's office, plant and equipment the same compensation, privileges, benefits,
are situated, shall not be more than P3M. fringe benefits or allowances as qualified, able-
5. Cooperatives. (Benguet Electric Cooperative bodied persons (R.A. No. 7277, Sec. 5)
v. Hon. Ferrer-Calleja, G.R. No. 79025,
December 29, 1989).
6. Homeworkers employed in any establishment
duly registered with the National Cottage
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(d) Commissions In the determination of such regional minimum

wages, the Regional Board shall, among other
Commissions have been defined as the relevant factors, consider the following:
recompense, compensation, or reward of an 1. The demand for living wages;
agent, salesman, executor, trustee, receiver, 2. Wage adjustment vis-à-vis the consumer price
factor, broker or bailee, when the same is index
calculated as a percentage on the amount of his 3. The cost of living and changes or increases
transactions or on the profit to the principal. (Phil. therein
Duplicators' Inc. v. NLRC, G.R. No. 110068, 1993) 4. The needs of workers and their families
5. The need to induce industries to invest in the
The Court held that the definition of "wages" under countryside
Art. 97 (f) of the Labor Code explicitly includes 6. Improvements in standards of living
commissions as part of wages. While 7. The prevailing wage levels
commissions are incentives to inspire employees 8. Fair return of the capital invested and capacity
to put a little more industry on the jobs particularly to pay of employees
assigned to them, still, these commissions are 9. Effects on employment generation and family
direct remunerations for services rendered. income
10. The equitable distribution of income and
There is no law mandating that commissions be wealth along the imperatives of economic and
paid only after the minimum wage has been paid social development (Labor Code, Art. 124)
to the employee. Verily, the establishment of a
minimum wage only sets a floor below which an Two Methods of fixing the minimum wage rate.
employee's remuneration cannot fall, not that
commissions are excluded from wages in the 1. Floor Wage Method
compliance with the minimum wage law. (Iran v. Method which involves the fixing of a determinate
NLRC, G.R. No. 121927, 1998) amount to be added to the prevailing statutory
minimum wage rates.
However, for commissions to be included in the
employees' salary, the employee must have 2. Salary Cap Method
earned them through performing actual business Method where the wage adjustment is to be
transactions. (Phil. Duplicators' Inc. v. NLRC, G.R. applied to employees receiving a certain
No. 110068, 1995) denominated salary ceiling. In other words,
workers already being paid more than the existing
(e) Minimum Wage minimum wage (up to a certain amount stated in
the Wage Order) are also to be given a wage
Current Minimum Wage increase. (Employers Confederation of the
PhP 512 (Wage Order No. NCR-21) Philippines v. National Wages and Productivity
Commission, G.R. No. 96169, 1991).
PhP 512 is the minimum wage for the non-
Agricultural Sector, and is composed of: Pursuant to its authority, the Regional Wage
Basic Wage of PhP 502 + COLA of PhP 10 Boards may issue wage orders which set the daily
minimum wage rates. It has no authority to grant
Standards/Criteria for minimum wage fixing an across-the-board wage increase. (Metropolitan
The regional minimum wages to be established by Bank and Trust Company v. NWPC, 2007).
the Regional Board shall be as nearly adequate as
is economically feasible to maintain the minimum
standards of living necessary for the health,
efficiency and general well-being of the employees
within the framework of the national economic and
social development program.
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1. Payment of Wages
Exceptions:
Means of Payment 1. In case of force majeure or other
circumstances beyond the employer's control,
The employer cannot pay his workers by payment must be made immediately after
means of any of the following: such occurrence has ceased; and
a) Vouchers; 2. In case of payment of wages by result
b) Promissory notes; involving work which cannot be completed in
c) Any object other than legal tender; two weeks and in the absence of CBA or
d) Coupons; arbitration award:
e) Chits; - Payments are made at intervals not
f) Tokens; or exceeding 16 days, in proportion to the
g) Tickets (Labor Code, Art. 102) amount of work completed; and
- Final settlement is made upon
General Rule: No employer shall pay the wages completion of the work. (IRR Labor Code,
of an employee by any other means other than Sec. 3, Rule VIII, Book III)
legal tender, even when expressly requested by
the employee. (Congson v. NLRC, G.R. No. In ALL Cases: No employer shall make payment
114250, April 5, 1995) with less frequency than once a month.
Exception: Payment of wages by bank checks, If on account of force majeure or circumstances

postal checks or money orders is allowed where: beyond the employer's control, payment of wages
1. Such manner of wage payment is customary on or within the time herein provided cannot be
on the date of the Labor Code's effectivity; made, the employer shall pay the wages
2. It is stipulated in a collective agreement; immediately after such force majeure or
3. All of the following conditions are met; or circumstances have ceased.
a. There is a bank or other facility for
encashment within a radius of 1 kilometer Place of Payment
from the workplace
b. The employer or any of his agents or General Rule: Payment of wages shall be made
representatives does not receive any at or near the place of undertaking
pecuniary benefit directly or indirectly from
the arrangement Exceptions: Payment in a place other than the
c. The employees are given reasonable time work place shall be permissible only under the
during banking hours to withdraw their following circumstances:
wages from the bank which time shall be 1. When payment cannot be effected at or near
considered as compensable hours the place of work by reason of the
worked if done during working hours deterioration of peace and order conditions, or
d. The payment by check is with the written by reason of actual or impending emergencies
consent of the employees concerned if caused by fire, flood, epidemic or other
there is no collective agreement calamity rendering payment thereat
authorizing the payment of wages by bank impossible
checks 2. When the employer provides free
4. Necessary because of special circumstances transportation to the employees back and forth
as specified in appropriate regulations issued 3. Under any other analogous circumstances;
by the Secretary of Labor (IRR Labor Code, Provided, That the time spent by the
Sec. 2, Rule VIII, Book III) employees in collecting their wages shall be
considered as compensable hours worked
Time of Payment (Labor Code, Art. 103; IRR Labor Code, Sec.
4, Rule VIII, Book III)
General Rule: At least once every 2 weeks or
twice a month at intervals not exceeding 16 days.
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Prohibited Place of Payment To Whom Wages are Paid

General Rule: Payment cannot be made in a bar,
night or day club, drinking establishment, massage General Rule: Wages shall be paid directly to the
clinic, dance hall, or other similar places or in workers to whom they are due (Labor Code, Art.
places where games are played with stakes of 105)
money or things representing money
Exceptions:
Exception: Persons employed in the 1. Payment through another person —
abovementioned places may be paid there (IRR (a) In cases of force majeure rendering such
Labor Code, Sec. 4[b], Rule VIII, Book III) payment impossible or under other special
circumstances to be determined by the
Payment through Banks; Requisites Secretary — the worker may be paid
1. There must be a written permission of the through another person under written
majority of the employees concerned in an authority given by the worker for the
establishment purpose (Labor Code, Art. 105[4); or
2. The establishment must have 25 or more (b) When authorized under existing law,
employees including:
3. The establishment must be located within 1 i. Payments for the insurance
km. radius to the bank. premiums of the employee
ii. Union dues where the right to check-
Payment through ATM; Requisites off has been recognized by the
Payment through automated teller machine employer in accordance with a
(ATM) of banks is allowed, provided the if. collective agreement
conditions are met [CTARRDR]: iii. Authorized in writing by the individual
1. The ATM system of payment is with the written employees concerned (!RR of Labor
Consent of the employees concerned; Code, Sec. 5[b], Rule VIII)
2. The employees are given reasonable Time to
withdraw their wages from the bank facility 2. Payment through heirs of the worker —
which time, if done during working hours, shall Where the worker has died — the employer may
be considered compensable hours worked; pay the wages of the deceased worker to the heirs
3. The system shall Allow workers to receive of the latter without the necessity of intestate
their wages within the period or frequency and proceedings. (Labor Code, Art. 105(N)
in the amount prescribed under the Labor
Code; Procedure:
4. There is a bank or ATM facility within a Radius • The claimants, if they are all of age (or in
of one (1) kilometer to the place of work; case of a minor, by the natural guardians or
5. Upon request of the concerned employee/s, next-of-kin), shall execute an affidavit
the employer shall issue a Record of payment attesting to their relationship to the
of wages, benefits and deductions for a deceased and the fact that they are his
particular period; heirs, to the exclusion of all other persons.
6. There shall be no additional expenses and no • If any of the heirs is a minor, the affidavit
Diminution of benefits and privileges as a shall be executed on his behalf by his
result of the ATM system of payment; natural guardian or next-of-kin.
7. The employer shall assume Responsibility in • The affidavit shall be presented to the
case the wage protection provisions of law and employer who shall make payment through
regulations are not complied with under the the Secretary or his representative. The
arrangement (DOLE's Explanatory Bulletin on representative of the Secretary shall act as
Wage Payment Through ATM Facility, referee in dividing the amount paid among
November 25, 1996) the heirs.
• The payment of wages„under this Article
shall absolve the employer of any further
liability with respect to the amount paid.
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• Withholding tax
3. Payment through member of worker's family
NOTE: Persons earning minimum wage are
Where the employer is authorized in writing by the exempted from income tax.
employee to pay his wages to a member of his
family (!RR Labor Code, Sec. 514 Rule VIII, Book 3. When Authorized by Law
III) • Deposit for loss/breakage (Labor
Advisory, No. 11120141 Sec. 3)
Summary of Rules on Payment of Wages • In cases where the employee is indebted
Legal tender; Prohibited: to the employer, where such indebtedness
Promissory notes, vouchers, has become due and demandable (Civil
WHAT. MUST
coupons, tokens, tickets, Code, Art. 1706)
BE PAID
chits, or any other object other • Court judgment, but only for debts
than legal tender incurred for food, shelter, clothing, and
Once every two weeks or medical attendance (Civil Code, Art. 1708)
WHEN twice a month at intervals not
exceeding 16 days 4. Regulation Issued by the Secretary of Labor
At or near the place of
WHERE
undertaking Deposits for Loss or Damage
Directly to the employee
- HOW
• • entitled thereto General Rule: No employer shall require his
worker to make deposits for the reimbursement of
2. Prohibitions regarding wages loss of or damage to material, equipment, or tools
supplied by the employer.
(a) Deductions from Wages (Labor Code, Art.
113) Exception: When the trade, occupation or
business of the employer recognizes or considers
General Rule: Wage deduction is strictly the practice of making deductions or requiring
prohibited. deposits necessary or desirable. (Labor Code, Art.
114)
Exceptions:
1. With Employee's Consent in Writing Requisites for Valid Deduction for
• SSS payments Loss/Damage
• PHILHEALTH payments 1. The employee concerned is clearly shown to
• Contributions to PAG-IBIG Fund be responsible for the loss or damage
• Value of meals and other facilities 2. The employee is given reasonable opportunity
• Payments to third persons with to show cause why deduction should not be
employee's consent and without made
pecuniary benefit 3. The amount of such deduction is fair and
• Deduction for unpaid absences reasonable and shall not exceed the actual
loss or damage
2. Without Employee's Consent 4. The deduction from the wages of the
• Worker's insurance acquired by the employee does not exceed 20% of the
employer employee's wages in a week (1RR Labor
• Union dues, where the right to check-off Code, Sec. 11, Rule VIII, Book III)
has been recognized by the employer or
authorized in writing by the employee Note: Art. 144 provides for the rule on deposits for
the loss or damage to tools, materials, or
• Cases where the employer is authorized
equipment supplied by the employer. The same
by law or regulations issued by the
does not apply to or permit deposits to defray any
Secretary of Labor
deficiency, which the taxi driver may incur in the
Debts of the employee to the employer
that have become due and demandable
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remittance of "boundary" (Five J Taxi v. NLRC, criteria prescribed by the Labor Code. (Labor
G.R. No. 111474, 1994) Code, Art. 123)
Prohibited / Unlawful Acts A wage order adjusts the minimum level but not
1. Withhold any amount from the wages of a the levels above the minimum. ' It does not
worker or induce him to give up any part of his mandate across the board salary increase.
wages by force, stealth, intimidation, threat or
by any other means whatsoever without the Employees NOT Covered
worker's consent. (Labor Code, Art. 116) 1. Household or domestic helpers, including
2. Deduction from the wages of any employee family drivers and workers in the personal
for the benefit of the employer or his service of another
representative or intermediary as 2. Workers and employees in retail/service
consideration of a promise of employment or establishments regularly employing not more
retention in employment. (Labor Code, Art. than 10 workers, when exempted from
117) compliance, for a period fixed by the
3. Refuse to pay or reduce the wages and Commission/Boards
benefits, discharge or in any manner 3. Workers and employees in new business
discriminate against any employee who has enterprises outside the National Capital
filed any complaint or instituted any Region and export processing zones for a
proceeding under this Title or has testified or period of not more than two or three years, as
is about to testify in such proceedings. (Labor the case may be, from the start of operations
Code, Art. 118) when exempted (R.A. No. 672)
4. Make any statement, report, or record filed or
kept pursuant to the provisions of this Code In addition to setting the minimum wage, the
knowing such statement, report or record to be RTWPB can provide additional exemptions since
false in any material respect. (Labor Code, Art. it is vested with the competence to determine the
119) industries and sectors to exempt from the
coverage of their wage orders. (National Wages
Non-Interference in Disposal of Wages (Civil and Productivity Commission (NWPC) and the
Code Provisions) Regional Tripartite Wages and Productivity Board
1. The laborer's wages shall be paid in legal (RTWPB) vs. Alliance of Progressive Labor (APL)
currency (Civil Code, Art. 1705) and the Tunay na Nagkakaisang Manggagawa sa
2. Withholding of wages, except for a debt due, Royal (TNMR), G.R. No. 150326, 2014)
shall not be made by the employer (Civil Code,
Art. 1706) Effectivity of Wage Orders
3. The laborer's wages shall be a lien on the Takes effect after 15 days from its complete
goods manufactured or the work done (Civil publication in at least one newspaper of general
Code, Art. 1707) circulation in the region. (NWPC Guidelines No.
4. The laborer's wages shall not be subject to 001-95, Sec. 4, Rule IV)
execution or attachment, except for debts
incurred for food, shelter, clothing, and Public Hearings and Consultations Mandatory
medical attendance (Civil Code, Art. 1708) Notice must be given to employees' and
5. The employer shall neither seize nor retain employers' groups, provincial, city and municipal
any tool or other articles belonging to the officials and other interested parties.
laborer (Civil Code, Art. 1709)
A wage order issued without the required public
3. Wage Order; Wage Distortion, concept consultation and newspaper publication is null and
void.
Wage Order
An order issued by the Regional Board whenever Frequency
the conditions in the region so warrant after General Rule: A wage order issued by the Board
studying and investigating and studying all may not be disturbed for a period of 12 months
pertinent facts and based on the standards and
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from its effectivity and no petition for wage event that such order is affirmed (IRR of R.A. No.
increase shall be entertained during said period 6727, Sec. 5, Rule V)
(NWPC Guidelines No. 001-05, Sec. 3, Rule IV)
Doctrine of Double Indemnity
Exceptions: Payment to a concerned employee of the
1. When Congress itself issues a law increasing prescribed increase or adjustments in the wage
wages; or rate which was not paid by an employer in an
2. Supervening conditions, such as extraordinary amount equivalent to twice the unpaid benefits
increases in prices of petroleum products and owing to such employee (D.O. No. 10, Sec. 2[1]
basic goods / services [1998])
Standards/Criteria for Minimum Wage Fixing Wage Distortion

Must be economically feasible to maintain the
minimum standards of living necessary for the Definition of Wage Distortion
health, efficiency and general well-being of the A situation where an increase in prescribed wage
employees within the framework of the national rates results in the elimination or severe
economic and social development program. contraction of intentional quantitative differences
in wage or salary rates between and among
Factors to Consider: (SNAPE CRIED) employee groups in an establishment as to
3. Improvements in tandards of living effectively obliterate the distinctions embodied in
4. The Needs of workers and their families such wage structure based on skills, length of
5. Wage adjustment vis-à-vis the consumer service or other logical basis of differentiation.
price index (Labor Code, Art. 124)
6. The p_revailing wage levels
7. Effects on employment generation and family Simply, if the pay advantage of a position over
income another is removed or significantly reduced by a
8. The Rost of living and changes or increases pay adjustment required by a wage order, such
9. Fair Return of the capital invested and pay advantage should be restored. Manila
capacity to pay of employers Mandarin Employees Union v. NLRC, (G.R. No.
10. The need to induce Industries to invest in the 108556, 1996)
countryside
11. The Equitable distribution of income and For a distortion to exist, the law does not require
wealth along the imperatives of economic and an elimination or total abrogation of quantitative
social development wage or salary difference; a severe contraction
12. The Remand for living wages (Labor Code, thereof is enough. (MBTC Employees Union-ALU-
Art 124) TUCP v. NLRC, G.R. No. 102636, 1993)
Appeal Wage distortion involves comparison of jobs

A party aggrieved by a Wage Order may appeal to located in the same region. Examination of alleged
the NWPC not later than 10 days from the date of salary distortion is limited to jobs or positions in the
the publication of the order (NWPC Guidelines No. same employer in the same region; thus, the
001-95, Sec. 1, Rule V) comparison of salaries has to be intra-region, not
inter-region. (Prubankers Association v. Prudential
Effect of Appeal Bank and Trust Co., G.R. No. 131247, 1999)
General Rule: Appeal does not stay the effect of
the wage order Elements of Wage Distortion:
1. An existing hierarchy of positions with
Exception: Unless the party appealing such order corresponding salary rates.
shall file with the NWPC an undertaking with a 2. A significant change in the salary rate of a
surety/sureties (surety bond) satisfactory to the lower pay class without a concomitant
Commission for payment to employees affected by increase in the salary rate of a higher one.
the order for the corresponding increase, in the
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3. The elimination of the distinction between the should be given only to those employees covered
two levels. thereby. (P.I. Manufacturing, Inc., v. P.I.
4. The existence of the distortion in the same Manufacturing Supervisors and Foreman Ass'n
region of the country. (Alliance Trade unions and the NLRC, G.R. No. 167217, 2008).
v. NLRC, G.R. No. 140689, 2004)
Summary of Principles on Wage Distortion
Correction of Wage Distortion (NFL v. NLRC, G.R. No. 103586, 1994)
A. In case of an ORGANIZED establishment The concept of wage distortion assumes an

1. Employer and union shall negotiate to correct existing grouping or classification of employees
the distortion which establishes distinctions among such
2. Any dispute arising should be resolved employees on some relevant or legitimate basis.
through grievance procedure under CBA This classification is reflected in a differing wage
3. If dispute remains unresolved, through rate for each of the existing classes of employees.
voluntary arbitration (Labor Code, Art. 124) Wage distortions have often been the result of
government-decreed increases in minimum
B. In case of an UNORGANIZED establishment wages. There are, however, other causes of wage
1. The employer and employees shall endeavor distortions (such as merger).
to correct the distortion
2. Any dispute shall be settled through National Should a wage distortion exist, there is no legal
Conciliation and Mediation Board (NCMB) requirement that the gap which had been
3. If remains unresolved after 10 days of previously existed be restored in precisely the
conciliation, it shall be referred to the NLRC same amount. Correction of a wage distortion may
(Labor Code, Art. 124) be done by re-establishing a substantial or
significant gap (as distinguished from the historical
Note: Any issue involving wage distortion is not a gap) between the wage rages of the differing
valid ground for a strike or a lockout. (Ilaw at classes of employees.
Buklod ng Manggagawa, G.R. No. 91980, 1991)
The re-establishment of a significant wage
Amount of Distortion Adjustment difference may be done through the grievance
The restoration of the previous pay advantage is procedure or collective bargaining negotiations.
the aim but not necessarily to the last peso.
Restoration of appreciable differential, a 4. Non-diminution of benefits
significant pay gap, should suffice as correction.
There is diminution of benefits when:
Suggested Formula to Correct a Salary 1. The grant or benefit is founded on a policy or
Distortion has ripened into a practice over a long period
Minimum = % x Actual Salary Prescribed of time
Wage Increase 2. The practice is consistent and deliberate
3. The practice is not due to error in the
The distortion that should be rectified refers to construction or application of a doubtful or
distortion arising from compliance with a difficult question of law, and
government wage order. It does not refer to 4. The diminution or discontinuance is done
distortion caused by salary revisions voluntarily unilaterally by the employer. (TSPIC v. TSPIC
initiated by the employer unless such a duty exists Employee Union, G.R. No. 163419, 2008).
because of a CBA stipulation or company practice. 5. The "benefits" refer to monetary benefits or
(Bankard Employees Union — WATU v. NLRC, privileges given to the employee with
G.R. No. 140689, 2004) monetary equivalents. (Royal Plant Workers
Union vs. Coca-Cola Bottlers Philippines, Inc.-
CBA vis-à-vis Wage Orders — CBA Creditability Cebu Plant, G.R. 198783, 2013).
The provisions of the CBA should be read in
harmony with the wage orders, whose benefits
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Non-Diminution Rule resulted by virtue of the correction (TSPIC Corp. v.

TSPIC Employees Union, G.R. No. 163419, 2008)
General Rule: Nothing in the Labor Code shall be
construed to eliminate or in any way diminish Benefits initiated through negotiation between
supplements, or other employee benefits being Employee and Employer, e.g. CBA, can only be
enjoyed at the time of promulgation of the Labor eliminated or diminished bilaterally. A union is not
Code. Benefits being given to employees shall not prohibited from offering and agreeing to reduce
be taken back or reduced unilaterally by the wages and benefits of the employees during CBA
employer because the benefit has become part of negotiations. (Insular Hotel Employees Union v.
the employment contract, written or unwritten. Waterfront, G.R. 174040-41, 2010)
Bonus
Exception: To correct an error, otherwise, if the A benefit which is contingent or conditional; its
error is left uncorrected for a reasonable period of demandability depends on certain pre-conditions.
time, it ripens into a company policy and
employees can demand for it as a matter of right. It is an amount granted voluntarily to an employee
for his/her industry and loyalty, which contributed
When Non-Diminution Rule Applicable to the success and realization of profits of the
The rule is applicable if it is shown that: employer's business.
1. The practice is consistent and deliberate
(Metrobank v. NLRC, G.R. No. 152928, 2009) General Rule: Bonus is not demandable as a
2. The diminution or discontinuance is done matter of right. It is a management prerogative,
unilaterally by the employer (Steel Corporation given in addition to what is ordinarily received by
v. Nagkakaisang Manggagawang Supreme or strictly due to the recipient (Producers Bank v.
Independent Union, G.R. No. 185556, 2011); NLRC, G.R. No. 100701, 2001)
3. The grant of the benefit is founded on a policy
or has ripened into a practice over a long Exceptions:
period (Phil. Appliance Corp. v. CA, G.R. No. 1. When it was promised to be given without
149434, 2004); and any conditions imposed for its payment in which
4. The practice is not due to error in the case it is deemed part of the wage; and
construction or application of a doubtful or 2. When it has ripened into practice (Marcos v.
difficult question of law (Vergara, Jr., v. Coca NLRC, G.R. No. 111744, 1995)
Cola, G.R. No. 176985, 2013)
C. LEAVES
When not applicable
At least one of the requisites is absent. 1 Service Incentive Leave (SIL) (supra)
1. At least one of the requisites is absent
2. Mistake in the application of the law (Globe 2. Maternity Leave
Mackay v. NLRC, G.R. No. 82511, 1988)
3. Negotiated benefits (Azucena) Coverage:
4. Reclassification of Positions — e.g. loss of SSS Law (R.A. 1161, as amended by RA 8282)
some benefits by promotion. A female member who has paid at least 3 monthly
5. Contingent or Conditional Benefits — the rule contributions in the 12-month period immediately
does not apply to a benefit whose grant preceding the semester of her
depends on the existence of certain childbirth/miscarriage shall be paid a daily
conditions, so that the benefit is not maternity benefit equivalent to 100% of her
demandable if those preconditions are absent. average daily salary credit for 60 days (in case of
normal delivery) or 78 days (in case of caesarian
Past Errors delivery). (R.A. No. 9282, Sec. 14-A)
If it is a past error that is being corrected, no vested
right may be said to have arisen nor any diminution Conditions for entitlement: (NAB-4-RD)
of benefit under Art. 100 may be said to have 1. Employee shall have Notified her employer of
her pregnancy and the probable date of her
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childbirth, which notice shall be transmitted to 3. Paternity Leave (R.A. No. 8187)
the SSS.
2. Full payment shall be Advanced by the Definition:
employer within 30 days from the filing of the Paternity Leave refers to the benefits granted to a
maternity leave. married male employee allowing him not to report
3. Payment of daily maternity benefits shall be a for work for seven (7) days but continues to earn
Bar to the recovery of sickness benefits the compensation therefor, on the condition that
provided by the SSS Law for the same period his spouse has delivered a child or suffered a
for which daily maternity benefits have been miscarriage for purposes of enabling him to
received. effectively lend support to his wife in her period of
4. The maternity benefits provided under this recovery and/or in the nursing of the newly-born
section shall be paid only for the first 4 child. (R.A. No. 8187, Sec. 3)
deliveries/miscarriages. Coverage
5. The SSS shall immediately Reimburse the Paternity Leave is granted to all married male
employer of 100% of the amount of maternity employees in the private sector, regardless of their
benefits advanced to the employee by the employment status (e.g., probationary, regular,
employer upon receipt of satisfactory proof of contractual, project basis).
such payment and legality thereof;
6. If an employee member should give birth or Government employees are also entitled to the
suffer miscarriage without the required paternity leave benefit. They shall be governed by
contributions having been remitted for her by the Civil Service rules.
her employer to the SSS, or without the latter
having been previously notified by the Conditions to entitlement:
employer of the time of the pregnancy, the 1. A married male employee at the time of
employer shall pay to the SSS Damages delivery of his child;
equivalent to the benefits which said 2. Cohabiting with his spouse at the time she
employee member would otherwise have gives birth or suffers a miscarriage;
been entitled to (R.A. No. 9282, Sec. 14-A) 3. Applied for paternity leave within a reasonable
period from the expected date of delivery by
Notes: the pregnant spouse, or within such period as
Women in the military, police, and other services may be provided by company rules or by CBA;
shall be entitled to leave benefits such as provided that prior application is not required
maternity leave, as provided for by existing laws in case of miscarriage;
(Magna Carta of Women, Sec. 15) 4. Wife has given birth or suffered a miscarriage.
5. Where a male employee is already enjoying
It is not necessary that the woman be impregnated the paternity leave benefits by reason of
by her legitimate husband. It is immaterial who the contract, company policy or CBA, the greater
father is. benefit prevails.
Every pregnant woman in the private sector, Application for Paternity Leave
whether married or unmarried, is entitled to the The male employee applying for paternity leave
maternity leave benefits. shall notify his employer of the pregnancy of his
legitimate spouse and the expected date of such
Availment delivery by the pregnant spouse, or within such
The maternity benefits provided under this period as may be provided by company rules and
sections shall be available only for the first four (4) regulations or by collective bargaining agreement,
deliveries or miscarriages. (R.A. No. 8282, Sec. provided that prior application for leave shall not
14-Aid]) be required in case of miscarriage (IRR ofR.A. No.
8187 for the private sector, Sec. 4)
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Non-conversion to Cash disappearance or prolonged absence of the

In the event that the paternity leave is not availed children's parents or solo parent.
of, it shall not be convertible to cash and shall not A victim of rape and/or other crimes against
be cumulative. 1RR of R.A. No. 8187, Sec. 7) chastity, have given birth to a child as a result
and have decided to keep and raise his child.
4. Solo Parent Leave (R.A. No. 8972 Sec. 314)
Parental (Solo Parent Leave) Children

Benefits granted to a solo parent to enable him/her 1. Those living with and dependent upon the solo
to perform parental duties and responsibilities parent for support who are unmarried,
where physical presence is required. The parental unemployed and not more than 18 years of
leave, in addition to leave privileges under existing age; or
laws, shall be for seven (7) work days every year, 2. Those even over 18 years but are incapable of
with full pay, consisting of basic salary and self-support because of mental and/or physical
mandatory allowances fixed by the Regional Wage defect (R.A. No. 8972 Sec. 3(4)
Board, if any, provided that his/her pay shall not be
less than the mandated minimum wage. (/RR of Conditions to Entitlement
R.A. No. 8972, Sec. 6[g]) 1. He/she has rendered at least 1 year of service,
whether continuous or broken;
Coverage: 2. He/she has notified his/her employer of the
availment thereof within a reasonable period
Who are considered Solo Parents: 3. He/she has presented a Solo Parent
a. A parent left alone with the responsibility of Identification Card to his/her employer which
parenthood because of death of one's spouse. may be obtained from the DSWD office of the
b. A parent left alone with the responsibility of city or municipality where he/she resides (/RR
parenthood because of any physical and/or of R.A. No. 8972, Sec. 19)
mental incapacity of one's spouse as certified
by a public medical practitioner Availment
c. A parent left alone with the responsibility of A parental leave of not more than 7 working days
parenthood because one has legally every year shall be granted to any solo parent
separated from his spouse or because they employee who has rendered service of at least 1
have been separated for at least one year and year
the child is in solo parent's custody
d. A parent left alone with the responsibility of Non-Conversion to Cash
parenthood because the marriage was Unused parental leave is not convertible to cash
annulled by a court or a church decree, and unless otherwise provided by the CBA. (IRR of
the child is in solo parent's custody. R.A. No. 8972 Sec. 20)
e. A parent left alone with the responsibility of
parenthood because his spouse abandoned Termination of the benefit
him for at least one year. A change in the status or circumstance of the
f. A parent left solo or alone with the parent claiming benefits under this Act, such that
responsibility of parenthood because his he/she is no longer left alone with the responsibility
spouse is detained or is serving sentence for of parenthood, shall terminate his/her eligibility for
a crime for at least one year. these benefits. (R.A. No. 8972, Sec. 314
g. An unmarried mother or father who has
preferred to keep and rear the child himself, 5. Leaves Benefits for Women Workers Under
instead of having others care for them or give RA 9710 and RA 9262
up to a welfare institution.
h. Solely provides parental care and support to a R.A. No. 9710 or the Magna Carta for Women
child or children. A special leave benefit for women was .granted
i. Assumes responsibility of head of the family under R.A. No. 9710 (August 14, 2009). Women
as a result of the death, abandonment, who qualify under R.A. No. 9710 are entitled to a
special leave benefit of two (2) months with full pay
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based on her gross monthly compensation 3. It shall be used for the days that she need to
following surgery caused by gynecological attend to medical and legal concerns.
disorders. 4. Leaves not availed of are non-cumulative and
not convertible to cash.
Conditions for Entitlement:
1. A woman employee must have rendered Availment
continuous aggregate employment service of Leave of up to ten (10) days in addition to other
at least six (6) months for the twelve (12) paid leaves under the Labor Code, or other laws.
months immediately prior to the surgery (Sec. 43, RA 9262)
2. She has filed an application for special leave
with her employer within a reasonable period
of time from the expected date of surgery or
within such period as may be provided by
company rules and regulations or collective
bargaining agreement; and
3. She has undergone surgery due to
gynecological disorders as certified by a
competent physician.
R.A. No. 9262 or the Anti-Violence Against

Women and their Children Act of 2004
Violence against women and their children refers
to any act or a series of acts committed by any
person against a woman who is his wife, former
wife, or against a woman with whom the person
has or had a sexual or dating relationship, or with
whom he has a common child, or against her child
whether legitimate or illegitimate, within or without
the family abode, which will result in or is likely to
result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of
such acts, battery, assault, coercion, harassment
or arbitrary deprivation of liberty. (R.A. 9262 'Anti-
Violence Against Women and Their Children Act
of 2004')
Coverage:
Allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the
issuance of a protection order. If such victim is an
employee, she is entitled to a paid leave of up to
10 days in addition to other paid leaves under the
Labor Code, other laws and company policies.
Conditions to entitlement
1. The employee has to submit a certification
from the Punong Barangay or Kagawad or
prosecutor or Clerk of Court that an action
under RA 9262 has been filed and is pending.
2. The use of the 10-day leave is at the option of
the employee
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D. SPECIAL GROUPS OF EMPLOYEES Jurisprudence: Stipulations on Marriage
1. Women 1. Philippine Telegraph and Telephone

Company v. NLRC (G.R. No. 118978, 1997)
a. Discrimination
It was declared here that the company policy
Unlawful for any employer to discriminate against of not accepting or considering as disqualified
any woman employee with respect to terms and from work any woman worker who contracts
conditions of employment solely on account of her marriage runs afoul of the test of, and the right
sex (Labor Code, Art. 135) against, discrimination afforded all women
workers by our labor laws and by no less than
Acts of Discrimination
the Constitution.
1. Payment of a lesser compensation, including
wage, salary or other form of remuneration
2. Star Paper Corp. v. Simbol, (G.R. No.
and fringe benefits, to a female employees as
164774, 2006)
against a male employee, for work of equal
value
The following policies were struck down as
2. Favoring a male employee over a female
invalid for violating the standard of
employee with respect to promotion, training
reasonableness which is being followed in our
opportunities, study and scholarship grants
jurisdiction, otherwise called the "Reasonable
solely on account of their sexes
Business Necessity Rule":
a. Person guilty of committing these acts are
criminally liable under Arts. 288-289 of the
i) New applicants will not be allowed to be
Labor Code
b. That the institution of any criminal action hired if in case he/she has [a] relative, up to
[the] 3rd degree of relationship, already
under this provision shall not bar the
aggrieved employee from filing an entirely employed by the company.
separate and distinct action for money
claims, which may include claims for ii) In case of two of our employees (both
damages and other affirmative reliefs. The singles [sic], one male and another female)
actions hereby authorized shall proceed developed a friendly relationship during the
independently of each other. course of their employment and then decided
3. Favoring a male applicant with respect to to get married, one of them should resign to
hiring where the particular job can equally be preserve the policy stated above.
handled by a woman; and
4. Favoring a male employee over a female 3. Duncan Association of Detailman-PTGWO
employee with respect to dismissal of v. Glaxo Welcome Philippines, Inc (G.R.
personnel No. 162994, Sept. 17, 2004)
b. Stipulation Against Marriage - In this case, the prohibition against marriage

embodied in the following stipulation in the
It shall be unlawful for the employer: employment contract was held as valid: "10.
1. To require as a condition of "employment or You agree to disclose to management any
continuation of employment that a woman existing or future relationship you may have,
employee shall not get married; either by consanguinity or affinity with co-
2. To stipulate expressly or tacitly that upon employees or employees of competing drug
getting married, a woman employee shall be companies. Should it pose a possible conflict
deemed resigned or separated of interest in management discretion, you
3. To actually dismiss, discharge, discriminate or agree to resign voluntarily from the Company
otherwise prejudice a woman employee as a matter of Company policy."
merely by reason of her marriage (Labor
Code, Art. 136) - The Supreme Court ruled that the dismissal
based on this stipulation in the employment
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contract is a valid exercise of management Enjoying the maternity leave, facilities and
prerogative. The prohibition against personal other benefits provided under the Code
or marital relationships with employees of c. To discharge such woman employee on
competitor companies upon its employees account of her Pregnancy, or while on leave or
was held reasonable under the circumstances in confinement due to her pregnancy (Del
because relationships of that nature might Monte v. Velasco, G.R. No. 153477 (March 6,
compromise the interests of the company. In 2007).
laying down the assailed company policy, the d. To discharge or refuse the admission of such
employer only aims to protect its interests woman upon Returning to her work for fear
against the possibility that a competitor that she may be pregnant
company will gain access to its secrets and e. To discharge any woman or child or any other
procedures. employee for having filed a complaint or
having Testified or being about to testify under
Bona fide occupational qualification exception the Code
When the employer can prove that the reasonable f. To require as a Condition for a continuation of
demands of the business require a distinction employment that a woman employee shall not
based on marital status and there is no better get married or to stipulate expressly or tacitly
available or acceptable policy which would better that upon getting married, a woman employee
accomplish the business purpose, an employer shall be deemed resigned or separated, or to
may discriminate against an employee based in actually dismiss, discharge, discriminate or
the identity of the employee's spouse. (Star Paper otherwise prejudice a woman employee
Corp. vs. Simbol, G.R. No. 164774, 2006) merely by reason of her marriage
The Court sustained the validity of employer policy d. Sexual Harassment (RA 7877)
prohibiting an employee from having a personal or
marital relationship with an employee of a Where Committed (WET)
competitor. The prohibition was reasonable under a. Working
the circumstances because relationships of such b. Education
nature might compromise the interests of the C. Training environment
company. (Duncan Association of Detailmen v.
Glaxo Wellcome, G.R. no. 162994, 2004) Who Commits (MEE-PATIS-COT)
1. Manager
Classification of Certain Women Workers 2. Employer
Any woman who is permitted or suffered to work, 3. Employee
with or without compensation, in any night club, 4. Professor
cocktail lounge, massage clinic, bar or similar 5. Agent of the employer
establishments under the effective control or 6. Teacher
supervision of the employer for a substantial 7. Instructor
period of time as determined by the Secretary of 8. Supervisor
Labor and Employment, shall be considered as an 9. Coach
employee of such establishment for purposes of 10. Trainer
labor and social legislation. (Labor Code, Art. 138) 11. Any Other person having authority, influence
or moral ascendancy over another (R.A. No.
c. Prohibited Acts 7877, Sec. 3)
Art. 137 Prohibited Acts (DEP-R-TeC) How Committed

It is unlawful for any employer: Person liable demands, requests, or otherwise
a. To Deny any woman the benefits provided for requires any sexual favor from the other,
under the Code regardless of whether the demand, request or
b. To discharge any woman employed by him for requirement for submission is accepted by the
the purpose of preventing such woman from latter.
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It is not necessary that a demand, request or Duty of Employer

requirement of sexual favor be articulated in a 1. Promulgate appropriate rules and regulations
categorical oral or written statement. It may be prescribing the procedure for investigation of
discerned, with equal certitude, from acts of the sexual harassment cases as well as
offender. (Domingo v. Raya/p, G.R. No. 155831, guidelines on proper decorum in the
2008). workplace.
2. Create a committee on decorum and
It is also not essential that the demand, request, or investigation of cases on sexual harassment.
requirement be made as a condition for continued (Sec. 4)
employment or for promotion to a higher position.
It is enough that the offender's acts result in Liability of Employer / Head of Office
creating an intimidating, hostile, or offensive Solidarily liable for damages arising from the acts
environment for the employee. (Domingo v. of sexual harassment committed in the
Rayala, G.R. No. 155831, 2008) employment, education or training environment if
the employer is informed of such acts by the
Work-Related/Employment Environment, offended party and no immediate action is taken.
Sexual Harassment Committed When
1. The sexual favor is made as a condition: Prescriptive period to file action: 3 years
a. In hiring or in the employment, (Sec. 7)
reemployment or continued employment
of said individual e) Facilities for Women
b. In granting said individual favorable The DOLE Secretary may require employers to:
compensation, terms, conditions, • Provide seats proper for women and permit
promotions or privileges them to use such seats when they are free
c. The refusal to grant the sexual favor from work and during working hours, provided
results in limiting, segregating or they can perform their duties in this position
classifying the employee which in any way without detriment to efficiency
would discriminate, deprive or diminish • Establish separate toilet rooms and lavatories
employment opportunities or otherwise for men and women and provide at least a
adversely affect said employee dressing room for women
2. The above acts would impair the employee's • Establish a nursery in a workplace for the
rights or privileges under existing labor laws. benefit of the women employees therein
3. The above acts would result in an intimidating, • Determine appropriate minimum age and
hostile or offensive environment for the other standards for retirement or termination in
employee. (Sec. 314) special occupations such as those of flight
attendants and the like (Labor Code, Att. 132)
Education or Training Environment, Sexual
Harassment Committed When Family Planning Services; Incentives for
1. The sexual favor is made as a condition: Family Planning
2. The above acts would impair the employee's Employers who habitually employ more than 200
rights or privileges under existing labor laws. workers in any locality shall provide free family-
3. The above acts would result in an intimidating, planning services to their employees and -their
hostile or offensive environment for the spouses which shall include but not limited to, the
employee. (Sec. 3[4 application or use of contraceptives (Labor Code,
Art. 134)
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2. Minors (R.A. No. 7610, as amended by R.A. No. 9231)
Allowable work for minors
Below 15 NOT employable,

EXCEPT:
1. When the child works directly under the sole responsibility of his/her parents/legal
guardian and where only members of his/her family are employed, under the if.
conditions:
• employment does not endanger the child's life, safety, health and morals
• employment does not impair the child's normal development; and
• the parent/legal guardian provides the child with primary/secondary
education
2. When the child's employment or participation in public entertainment or information
through cinema, theater, radio or television is essential, provided that:
• the employment contract is concluded by the child's parents/legal guardian,
with the express agreement of the child concerned, if possible, and the
approval of the DOLE
• the following requirements are complied with:
o employer shall ensure protection, health, morals, and normal
development of the child
o employer shall institute measures to prevent child's exploitation /
discrimination taking into account the system and level of remuneration,
duration, and arrangement of working time
o employer shall formulate and implement a continuing program for
training and skills acquisition of the child, subject to approval and
supervision of competent authorities (as amended by RA 9231)
In these two cases: employer must first secure a work permit from the DOLE before
engaging the child
ALLOWED ONLY in: non-hazardous or non-deleterious undertakings
'Hazardous Workplaces"
Nature of the work exposes the workers to dangerous environmental elements
contaminants or work conditions
Workers are engaged. in construction work, logging, fire-fighting, mining, quarrying,
blasting, stevedoring, dock-work, deep sea fishing, and mechanized farming
Workers are engaged in the manufacture or handling of explosives and other
pyrotechnic products
'Exposed to or use of heavy power-driven machinery or equipment
Workers use or are exposed to power-driven tools
PAGE 54 OF 244
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Regulation of working hours of a child work only occasionally or sporadically and not on
an occupational basis. (R.A. No. 10361, Sec. 2[d])
15 AND
AGE BELOW 15
BELOW 18 b) Benefits accorded to househelpers
Not more Not more
DAY
than 4 hours than 8 hours Rights and privileges of domestic worker:
Not more Not more a. The domestic worker shall not be subjected to
WEEK than 20 than 40 any kind of abuse or any form of physical
hours hours violence or harassment or any act tending to
8pm to 6am 10pm to 6am degrade his or her dignity.
PPROHIBITION of the of the b. The employer shall provide for the basic
following day following day necessities of the domestic worker to include
at least three (3) adequate meals a day and
Employment of the child in public humane sleeping arrangements that ensure
entertainment (please refer to the table above) safety.
c. Respect for the privacy of the domestic worker
Prohibition on the employment of children in shall be guaranteed at all times and shall
certain undertaking and certain extend to all forms of communication and
advertisements personal effects.
d. The employer shall grant the domestic worker
NO CHILD shall be employed as a model in any access to outside communication during free
advertisement directly/indirectly promoting time.
alcoholic beverage, intoxicating drinks, tobacco e. The employer shall afford the domestic worker
and its byproducts, gambling or any form of the opportunity to finish basic education and
violence or pornography. (Sec. 5) may allow access to alternative learning
systems and, as far as practicable, higher
Prohibition against worst forms of child labor education or technical and vocational training.
"Worst forms of child labor": f. All communication and information pertaining
1. All forms of slavery to the employer or members of the household
2. Prostitution shall be treated as privileged and confidential,
3. Production and trafficking of dangerous and shall not be publicly disclosed by the
drugs and prohibited volatile substances domestic worker during and after employment.
4. Work which by its nature or the
circumstances in which it is carried out is Employment contract
hazardous or likely to be harmful to the An employment contract shall be executed by and
health, safety, or morals of children (Sec. 3) between the domestic worker and the employer
before the commencement of the service in a
3. Kasambahay (R.A. No. 10361) language or dialect understood by both parties and
shall include the following:
Coverage 1. the kasambahay's duties and responsibilities
This Act applies to all domestic workers employed 2. period of employment
and working within the country. 3. compensation
4. authorized deductions
a) Definition 5. working conditions
6. Termination of employment
Domestic worker or "Kasambahay" refers to any 7. any other lawful condition agreed upon by
person engaged in domestic work within an both parties. (Sec. 11)
employment relationship such as, but not limited
to, the following: general househelp, nursemaid or Note: A kasambahay assigned to work in a
"yaya", cook, gardener, or laundry person, but commercial, industrial or agricultural enterprise,
shall exclude any person who performs domestic will be entitled to the applicable minimum wage for
agricultural or non-agricultural workers.
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proportionate share in the premium

Pre-employment requirements: payments or contributions.
1. Medical certificate or a health certificate
issued by a local government health officer c) Termination of Employment
2. Barangay and police clearance
3. NBI clearance A. Initiated by the domestic worker
4. Duly authenticated birth certificate or if not 1. Verbal or emotional abuse of the domestic
available, any other document showing the worker by the employer or any member of the
age of the domestic worker such as voter's household
identification card, baptismal record or 2. Inhuman treatment including physical abuse
passport. (Sec. 12) of the domestic worker by the employer or any
member of the household
Terms and conditions of employment 3. Commission of a crime or offense against the
1. Minimum Wage domestic worker by the employer or any
• Those employed in the National Capital member of the household
Region — P2,500 a month 4. Violation by the employer of the terms and
• Those employed in chartered cities and conditions of the employment contract and
first class municipalities — P2,000 a month other standards set forth under this law
• Those employed in other municipalities — 5. Any disease prejudicial to the health of the
P1,500 a month domestic worker, the employer, or member/s
2. Rest period of the household
• Daily rest period — aggregate of 8 hours per 6. Other causes analogous to the foregoing
day (Sec. 32)
• Weekly rest period - at least 24
consecutive hours of rest in a week Note: If the domestic worker leaves without
3. Thirteenth month pay justifiable reason, any unpaid salary due not
• The domestic worker is entitled to 13th exceeding the equivalent 15 days work shall be
month pay as provided for by law forfeited. In addition, the employer may recover
4. Leave benefits from the domestic worker costs incurred related to
• A domestic worker who has rendered at the deployment expenses, provided that the
least 1 year of service shall be entitled to service has been terminated within 6 months from
an annual service incentive leave of 5 days the domestic worker's employment.
with pay. Any unused portion of said annual
leave shall not be cumulative or carried B. Initiated by the employer
over to the succeeding years. Unused 1. Misconduct or willful disobedience by the
leaves shall not be convertible to cash. domestic worker of the lawful order of the
5. Social and other benefits employer in connection with the former's work
2. Gross or habitual neglect or inefficiency by the
• A domestic worker who has rendered at
domestic worker in the performance of duties
least 1 month of service shall be covered
3. Fraud or willful breach of the trust reposed by
by the Social Security System (SSS), the
Philippine Health Insurance Corporation the employer on the domestic worker
(PhilHealth), and the Home Development 4. Commission of a crime or offense by the
domestic worker against the person of the
Mutual Fund or Pag-IBIG, and shall be
employer or any immediate member of the
entitled to all the benefits in accordance
with the pertinent provisions provided by employer's family
law. 5. Violation by the domestic worker of the terms
and conditions of the employment contract
• Premium payments or contributions shall
and other standards set forth under this law
be shouldered by the employer. However,
6. Any disease prejudicial to the health of the
if the domestic worker is receiving a wage
domestic worker, the employer, or member/s
of P5,000.00 and above per month, the
of the household
domestic worker shall pay the
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7. Other causes analogous to the foregoing fabricated in or about a home and thereafter to
(Sec. 34) be returned or to be disposed of or distributed
in accordance with his directions
d) Reliefs for unjust termination • Sells any goods, articles or materials to be
processed or fabricated in or about a home
If the domestic worker is unjustly dismissed, the and then re-buys them after such processing
domestic worker shall be paid the compensation or fabrication, either by himself or through
already earned plus the equivalent of 15 days work some other person (D.O. No. 05-92)
by way of indemnity.
b) Rights and benefits accorded to
e) Penalties homeworkers
Any violation of R.A. No. 10391 declared unlawful Immediately upon receipt of the finished goods or
shall be punishable with a fine of not less than Ten articles, the employer shall pay the homeworker of
thousand pesos (P10,000.00) but not more than the contractor or subcontractor, as the case may
Forty thousand pesos (P40,000.00) without be, for, the work performed less corresponding
prejudice to the filing of appropriate civil or criminal homeworkers' share of SSS, MEDICARE AND
action by the aggrieved party. ECC premium contributions which shall be
remitted by the contractor/subcontractor or
4. Homeworkers employer to the SSS with the employer's share.
However, where payment is made to a contractor
a) Definition or subcontractor, the homeworker shall likewise be
Homeworker paid immediately after the goods or articles have
Applies to any person who performs industrial been collected from the workers. (D.O. No. 05-92,
homework for an employer, contractor or sub- Sec. 6)
contractor
c) Conditions for deductions from
Industrial Homework homeworker's earnings
Industrial Homework is a system of production No employee, contractor, or sub-contractor shall
under which work for an employer or contractor is make any deduction from the homeworker's
carried out by a homeworker at his/her home. earnings for the value of .materials which have
Materials may or may not be furnished by the been lost, destroyed, soiled or otherwise damaged
employer or contractor. It differs from regular unless the following conditions are met:
factory production principally in that it is a • The homeworker concerned is clearly shown
decentralized form of production where there is to be responsible for the loss or damage;
ordinarily very little supervision or regulation or • The employee is given reasonable opportunity
methods of work. (D. O. No. 05-92, Sec. 2[4) to show cause why deductions should not be
made;
Industrial Homeworker • The amount of such deduction is fair and
System of production under which work for an reasonable and shall not exceed the actual
employer or contractor is carried out by a loss or damages; and
homeworker at his/her home. Materials may or • The deduction is made at such rate that the
may not be furnished by the employer or amount deducted does not exceed 20% of the
contractor (Labor Code, Art. 154) homeworker's earnings in a week.
Employer of Homeworker Liability of employer and contractor

Includes any person, natural or artificial who, for Whenever an employer shall contract with another
his account or benefit, or on behalf of any person for the performance of the employer's work, it shall
residing outside the country, directly or indirectly, be the duty of such employer to provide in such
or through an employee, agent contractor, subcontract that the employees or homeworkers of the
contractor or any other person: contractor and the latter's sub-contractor shall be
• Delivers, or causes to be delivered, any paid in accordance with the provisions of this Rule.
goods, articles or materials to be processed or
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In the event that such contractor or sub-contractor to reteive advice on how to reduce or avoid health
fails to pay the wages or earnings of his problems associated with their work:
employees or homeworkers, such employer shall a. Before taking up an assignment as a night
be jointly and severally liable with the contractor or worker;
sub-contractor to the workers of the latter, to the b. At regular intervals during such an
extent that such work is performed under such assignment; and
contract, in the same manner as if the employees c. If they experience health problems during
or homeworkers were directly engaged by the such an assignment which are not caused by
employer. factors other than the performance of night
work.
Prohibitions for Homework
1. Explosives, fireworks and articles of like With the exception of a findind of unfitness for
character night work, the findings of such assessments shall
2. Drugs and poisons not be transmitted to others without the workers'
3. Other articles, the processing of which consent and shall not be used to their detriment.
requires exposure to toxic substance
Mandatory Facilities
5. Night Workers Suitable first-aid facilities shall be made available
for workers performing night work, including
R.A. No. 10151 arrangements where such workers, where
An Act Allowing the Employment of Night Workers, necessary, can be taken immediately to a place for
Thereby Repealing Articles 130 and 131 of appropriate treatment. The employers are likewise
Presidential Decree Number Four Hundred Forty- required to provide safe and healthful working
Two, as amended, otherwise known as the Labor conditions and adequate or reasonable facilities
Code of the Philippines, 2011 such as sleeping or resting quarters in the
establishment and transportation from the work
This new Republic Act provides that women can premises to the nearest point of their residence
now work on night time. subject to exceptions and guidelines to be
provided by the DOLE.
Coverage
All persons, who shall be employed or permitted or Transfer
suffered to work at night, except those employed Night workers who are certified as unfit for night
in agriculture, stock raising, fishing, maritime work, due to health reasons, shall be transferred,
transport and inland navigation, during a period of whenever practicable, to a similar job for which
not less than seven (7) consecutive hours, they are fit to work. If such transfer to a similar job
including the interval from midnight to five o'clock is not practicable, these workers shall be granted
in the morning, to be determined by the Secretary the same benefits as other workers who are
of Labor and Employment, after consulting the unable to work, or to secure employment during
workers' representative/labor organizations and such period. A night worker certified as temporarily
employers. unfit for night work shall be given the same
protection against dismissal or notice of dismissal
Night Worker means any employed person as other workers who are prevented from working
whose work requires performance of a substantial for reasons of health.
number of hours of night work which exceeds a
specified limit. This limit shall be fixed by the Compensation
Secretary of Labor after consulting the workers'
representative/labor organizations and The compensation for night workers in the form of
employers." working time, pay or similar benefits shall
recognize the exceptional nature of night work.
Health Assessment
At their request, workers shall have the right to
undergo a health assessment without charge and
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Social Services 2. For additional periods in respect of which a

Appropriate social services shall be provided for medical certificate is produced stating that
night workers and, where necessary, for workers said additional periods are necessary for the
performing night work. health of the mother or the child —
a. During pregnancy
Night Work Schedules b. Determined by DOLE after consultation
Before introducing work schedules requiring the with employer and labor representatives
services of night workers, the employer shall
consult the workers' representatives/labor During the periods referred to in this article:
organizations concerned on the details of such a. A woman worker shall not be dismissed or
schedules and the forms of organization of night given notice of dismissal, except for just or
work that are best adapted to the establishment authorized causes provided for in this Code
and its personnel, as well as on the occupational that are not connected with pregnancy,
health measures and social services which are childbirth and childcare responsibilities.
required. In establishments employing night b. A woman worker shall not lose the benefits
workers, consultation shall take,place regularly. regarding her status, seniority, and access to
promotion which may attach to her regular
CBA provision vis-à-vis overtime work night work position.
CBA may stipulate higher overtime pay rate.
Pregnant women are allowed to work at night only
The basis of computation of overtime pay beyond if a competent physician other than the company
that required by Art. 87 of the Labor Code must be physician shall certify their fitness to render night
the collective agreement. It is not for the court to work, and specify the period of the pregnancy that
impose upon the parties anything beyond what they can safely work.
they have agreed upon which is not tainted with
illegality. On the other hand, where the parties fail The measures referred to in this article may
to come to an agreement, on a matter not legally include transfer to day work where this is possible,
required, the court abuses its discretion when it the provision of social security benefits or an
obliges any of them to do more than what is legally extension of maternity leave. The provisions of this
obliged. (PNB v. PNB Employee's Assoc., G.R. article shall not have the effect of reducing the
No. L-30279, 1982). protection and benefits connected with maternity
leave under existing laws.
Pregnant Women
Migrant Workers (R.A. No. 8042 or the Migrant
Measures shall be taken to ensure that an Workers and Overseas Filipinos Act of 1995, as
alternative to night work is available to women amended by R.A. No. 10022)
workers who would otherwise be called upon to
perform such work — a) Claims for Compensability of Work-Related
1. Before or after childbirth, for a period of at Death, Sickness, or Disability
least 16 weeks, which shall be divided
between the time before and after childbirth; See Part ll of reviewer.
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6. Apprentices and Learners
-- LEARNERS - APPRENTICES
1. Persons hired as trainees in semi- skilled 1. Practical training on the job
and other industrial occupations 2. Supplemented by related
2. Non- apprenticeable 3. theoretical
3. May be learned through practical training 4. instruction
on the job in a relatively short period of time 5. Covered by a
4. Shall not exceed 3 months 6. Written apprenticeship agreement with an
individual employer or entity
7. Needs DOLE approval
8. Shall not exceed 6 months
Training Agreement
Governed by Learnership Agreement Apprenticeship Agreement
Occupation
learnable occupations consisting of semi- Apprenticeable occupations or any trade, form of
skilled and other industrial occupations which employment or occupation approved for
are non-apprenticeable apprenticeship by the DOLE Secretary
Theoretical instructions
Learnership may or may not be supplemented Apprenticeship should always be supplemented by
by related theoretical instructions related theoretical instructions
Ratio of theoretical instructions and on OJT
For both, the normal ratio is one hundred (100) hours for every two thousand 2,000 hours of
practical or on-the-job training
Competency-based system
It is required that learnership be implemented Not required
on the TESDA-approved competency-based
system
Duration of training
Not exceeding three (3) months of practical More than three (3) months, but not over six (6)
training months
Qualifications
Law does not mention any qualification Art. 59 of the Labor Code:
1. Be at least fifteen (15) years of age; (IRR and
R.A. 7610, as amended by R.A. 7658)
2. Possess vocational aptitude and capacity for
appropriate tests; and
3. Possess the ability to comprehend and follow
oral and written instructions.
Circumstances justifying hiring of trainees
Art. 74. Pre-requisites before learners may be Law does not expressly mention any
validly employed:
1. When no experienced workers are
available;
2. The employment of learners is necessary to
prevent curtailment of employment
opportunities; and
3. The employment does not create unfair
competition in terms of labor costs or impair
or lower working standards
Limitation on the number of trainees
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In learnership, a participating enterprise is No similar cap is imposed in the case of

allowed to take in learners only up to a apprenticeship
maximum of twenty percent (20%) of its total
regular workforce
Option to employ
The enterprise is obliged to hire the learner The enterprise is given only an "option" to hire the
after the lapse of the learnership period; apprentice as an employee.
Wage rate
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory
minimum wage.
Requisites for a Valid Apprenticeship 2. Occupation to be learned and the duration of

1. Qualifications of apprentice are met the training period which shall not exceed 3
2. The apprentice earns not less than 75% of the months
prescribed minimum salary 3. Wage of the learner which shall be at least
3. Apprenticeship agreement duly executed and 75% of the applicable minimum wage
signed 4. Commitment to employ the learner, if he so
4. Apprenticeship program approved by the sec. desires, as a regular employee upon
Of labor; otherwise, the apprentice shall be completion of training (Labor Code, Art. 75)
deemed as a regular employee
5. Period of apprenticeship not exceed 6 months A learner who has worked during the first two
months shall be deemed a regular employee if
At the termination of the apprenticeship, the training is terminated by the employer before the
employer is not required to continue the end of the stipulated period through no fault of the
employment. learner.
Employer may not pay wage if the apprenticeship 7. Persons with Disabilities
is:
a. A requirement for graduation Handicapped Workers
b. Required by the School Those whose earning capacity is impaired by age
c. Required by the Training Program Curriculum or physical or mental deficiency or injury, disease
d. Requisite for Board examination or illness. (Art. 78, Labor Code)
Art. 63, Labor Code. Venue of Apprenticeship There must be a link between the deficiency and
Programs the work which entitles the employer to lessen the
The plant, shop, premises of the employer or firm worker's wage. If the disability of the person is not
concerned if the apprenticeship program is in any way related to the work for which he was
organized by an individual employer or firm. hired, he should not be so considered as a
handicapped worker.
The premises of one or several firms designated
for the purpose by the organizer of the program if PERSONS WITH DISABILITY
such organizer is an association of employers, (R.A. No. 7277, as Amended by R.A. No. 9442)
civic groups and the like.
Persons with Disability are those suffering from
DOLE training center or other public training restriction or different abilities, as a result of a
institutions with which the Bureau has made mental, physical or sensory impairment, to perform
appropriate arrangements. an activity in the manner or within the range
considered normal for a human being.
Contents of Learnership Agreement
1. Names and addresses of employer and Impairment refers to any loss, diminution or
learner aberration of psychological, physiological, or
anatomical structure or function.
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Disability means: 4. Duration of the employment (Labor Code, Art.

a. A physical or mental impairment that 80)
substantially limits one or more psychological,
physiological or anatomical functions of an a) Equal Opportunity for Employment
individual or activities of such individual;
b. A record of such an impairment; or No disabled person shall be denied access to
c. Being regarded as having such an opportunities for suitable employment. Qualified
impairment. disabled employees shall be subject to same
terms and conditions of employment and the same
Handicap refers to a disadvantage for a given compensation, privileges, benefits, fringe benefits,
individual, resulting from an impairment or a incentives or allowances as a qualified able-
disability that limits or bodied person
prevents the function or activity that is considered
normal given the age and sex of the individual. What are the rights of PWDs?
Under the law, PWDs are entitled to equal
When Employable opportunity for employment. Consequently, no
1. their employment is necessary to prevent PWD shall be denied access to opportunities for
curtailment of employment opportunities; suitable employment. A qualified employee with
2. does not create unfair competition in labor disability shall be subject to the same terms and
costs; and conditions of employment and the same
3. does not impair or lower working standards. compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-
Handicapped workers may be hired as bodied person.
apprentices or learners if their handicap is not
such as to effectively impede the performance of What is the wage rate of PWDs?
job operation in the particular position for which The wage rate of PWDs is 100% of the applicable
they are hired. minimum wage.
Handicapped Workers May Become Regular What is the wage rate of PWD if hired as
Employees — if their handicap is not such as to apprentice or learner?
effectively impede the performance of job A PWD hired as an apprentice or learner shall be
operations in the particular occupations for which paid not less than seventy-five percent (75%) of
they were hired. the applicable minimum wage.
Rules on Handicapped Workers a. Discrimination

Handicapped workers may be employed when:
1. Their employment is necessary to prevent What is the rule on discrimination against
curtailment of employment opportunities employment of PWDs?
2. Does not create unfair competition in labor No entity, whether public or private, shall
costs discriminate against a qualified PWD by reason of
3. Does not impair or lower working standards. disability in regard to job application procedures,
(Labor Code, Art. 79) the hiring, promotion, or discharge of employees,
employee compensation, job training, and other
Employment Agreement; Contents terms, conditions and privileges of employment.
1. Names and addresses of the employer and (RA 7277, Sec. 32)
the handicapped worker
2. Rate of pay of the handicapped worker which The following constitute acts of
shall not be less than 75% of the legal discrimination:
minimum wage 1. Limiting, segregating or classifying a job
3. Nature of work to be performed by the applicant with disability in such a manner that
handicapped worker adversely affects his work opportunities;
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2. Using qualification standards, employment shall be provided to private entities which employ
tests or other selection criteria that screen out disabled persons.
or tend to screen out a PWD unless such
standards, tests or other selection criteria are Private entities that employ disabled persons who
shown to be job-related for the position in met the required skills or qualifications, either as
question and are consistent with business regular employee, apprentice or learner, shall be
necessity; entitled to an additional deduction, from their gross
3. Utilizing standards, criteria, or methods of income, equivalent to 25% of the total amount paid
administration that: as salaries and wages to disabled persons.
4. Have the effect of discrimination on the basis
of disability; or Private entities that improve or modify their
5. Perpetuate the discrimination of others who physical facilities in order to provide reasonable
are subject to common administrative control. accommodation for disabled persons shall also be
6. Providing less compensation, such as salary, entitled to an additional deduction from their net
wage or other forms of remuneration and taxable income, equivalent to 50% of the direct
fringe benefits, to a qualified employee with costs of the improvements or modifications.
disability, by reason of his disability, than the
amount to which a non-disabled person end of topic
performing the same work is entitled;
7. Favoring a non-disabled employee over a
qualified employee with disability with respect
to promotion, training opportunities, study and
scholarship grants, solely on account of the
latter's disability;
8. Re-assigning or transferring an employee with
a disability to a job or position he cannot
perform by reason of his disability;
9. Dismissing or terminating the services of an
employee with disability by reason of his
disability unless the employer can prove that
he impairs the satisfactory performance of the
work involved to the prejudice of the business
entity; provided, however, that the employer
first sought to provide reasonable
accommodations for persons with disability;
10. Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or other
factor of the applicant or employee with
disability that such tests purports to measure,
rather than the impaired sensory, manual or
speaking skills of such applicant or employee,
if any; and
11. Excluding PWD from membership in labor
unions or similar organizations.
b. Incentives for Employers (Sec. 8)
To encourage the active participation of the private

sector in promoting the welfare of disabled
persons and to ensure gainful employment for
qualified disabled persons, adequate incentives
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IV. SOCIAL WELFARE LEGISLATION
A. SSS Law (R.A. No. 8262)

1. Coverage and Exclusions
2. Dependents; Beneficiaries
3. Benefits
B. GSIS Law (R.A. No. 8291)

1. Coverage and Exclusions
2. Dependents; Beneficiaries
3. Benefits
C. Disability and death benefits

1. Labor Code
2. POEA-Standard Employment
Contract
B. GOVERNMENT --
A. SOCIAL SECURITY C. •- EMPLOYEE'S
SERVICE INSURANCE
ACT OF 1997 (R.A. No COMPENSATION LAW
ACT 0F1997 •
8282)
(R.A. No. 82911.
Employer — any 1. Employer — the 1. Employer - any
person, natural or national government, person, natural or
judicial, domestic or its political juridical, employing
foreign who carries subdivisions, the services of the
on in the Philippines branches, agencies or
employee.
any trade, business, instrumentalities,
industry undertaking, including GOCCs,
or activity of any kind and financial 2. Employees —
and uses the institutions with belonging to either of
services of another original charters, the the following sectors:
person who is under constitutional
his orders as regards commissions and the Public sectors,
employment. judiciary comprised of the
following:
COVERED *EXCEPT: Government 2. Employee any (a) Employed
SCOPE and any of its political person receiving workers covered by
subdivisions, branches compensation while in the GSIS, including
and instrumentality, service of an members of the AFP;
including GOCCs, i.e., employer as defined (b) Elective officials
those under GSIS. herein, whether by who are receiving
election or regular salary;
Employee — any appointment (c) Those employed
person who performs as Casual,
services for an Contractual,
employer who Emergency,
receives Temporary or
compensation for Substitute Employees
such services, wheie (Labor Code, Art.
there is an employer- 173[g])
employee
relationship.
PAGE 64 OF 244
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Private sector,
3. Self-Employed — comprising all the
considered both employed workers
employer and who are covered by
employee. the SSS;
Overseas Filipinos
(ECL Rules, Sec. 5,
Rule 1)
1. Legal spouse entitled for support; 1. Legitimate spouse
2. Child, whether legitimate, legitimated, legally living with the
adopted or illegitimate; employee
3. Parents receiving regular support from the 2. Child, whether
member. legitimate, legitimated
DEPENDENTS or legally adopted;
3. Parents of said
employee wholly
dependent upon him
for regular support.
1. Unmarried;
Not gainfully employed;
2. Has not reached 21 2. Not over age of 2. Not over 21 years of
years of age; OR majority; OR age provided that he is
CONDITIONS enrolled in school; OR
FOR CHILD TO
3. Incapable of supporting himself either physically 3. Over twenty-one years
=BE CONSIDERED
or mentally prior to 21 years of age or age of of age provided that he is
_ DEPENDENT _ congenitally incapacitated
majority, as the case may be
and incapable of self-
support physically or
mentally
a. Dependent Spouse, a. Legal Dependent a. Dependent Spouse
,- until remarriage; AND Spouse until until he remarries; AND
b. Dependent Legitimate remarriage ;AND b. Dependent Children
BENEFICIARIES who are the primary
or Legitimated or b. Dependent Children
1. PRIMARY - Legally Adopted and beneficiaries.
Illegitimate Children
a. Dependent Parents a. Dependent Parents a. Dependent Parents

b. Absent primary and AND b. Illegitimate Children
secondary b. Legitimate and Legitimate
beneficiaries, any descendants, subject Descendants, who are the
2; SECONDARY other person to restrictions on secondary beneficiaries
designated by dependent children
member as
secondary
beneficiary
As to DEATH
BENEFITS, if no
3. OTHERS beneficiary qualifies
under the Act, benefits
shall be paid to Legal
Heirs in accordance with
Law of Succession
1. Monthly Pension 1. Monthly Pensions 1. Medical
BENEFITS 2. Dependents Pension 2. Separation 2. Temporary Total
3. Retirement Disability
PAGE 65 OF 244
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4. Death 3. Unemployment or 3. Permanent Total

5. Permanent Disability Involuntary Separation Disability
6. Funeral 4. Retirement 4. Permanent Partial
7. Sickness 5. Disability Disability
8. Maternity (ONLY 1ST 6. Survivorship 5. Death
FOUR DELIVERIES 7. Funeral
OR 8. Life Insurance
MISCARRIAGES) 9. Loan Grants
*EXCEPT Judiciary and

Constitutional
Commissions who shall
have life insurance only
a. All employees not All employees receiving a. All employers;
over 60 years of compensation who have b. Employees not over
age and their not reached compulsory 60 years old;
employers; retirement age, c. Employees over 60
(effective date: on irrespective of years old and paying
the first day of his employment status contributions;
operation and that of d. Employee coverable
the employee on the by both the GSIS and
day of his SSS are compulsorily
employment) covered by both
COVERAGE b. Self-employed Systems; and
persons, as may be e. Filipino employees
1. Compulsory - determined by the employed abroad
Commission under subject to prescribed
such rules and EC regulations
regulations as it may (Labor Code, Art. 175;
prescribe, including, Amended Rules on
but not limited to: Employees'
i. all self-employed Compensation, Rule 1,
professionals; Sec. 2)
ii. partners and
single-proprietors Compulsory coverage of
of business; the employer shall take
iii. actors and effect on the first day of
actresses, his operation.
directors,
scriptwriters and Compulsory coverage of
news the employee shall take
correspondents effect on the first day of
not employees; his employment. (ECL
iv. professional Rules, Sec. 6, Rule 1)
athletes, coaches,
trainers and
jockeys, and
individual farmers
and fishermen;
(effective date: on
registration with the
SSS)
c. Domestic helpers
60 years of age and
below, provided,
that their monthly
income is not less
PAGE 66 OF 244
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than P1,000;
(effective date: upon
rendering at least 1
month of service)
Filipinos recruited
by foreign-based
employers for
employment abroad;
Employee
separated from
employment to
maintain his right to
full benefits;
Self-employed who
realizes no income
for a certain month;
Spouses who
devote full time to
managing household
and family affairs,
unless specifically
2. VOLUNTARY mandatorily covered.
*BY AGREEMENT:
Any foreign government,
international
organization or wholly
owned instrumentality
employing workers in the
Philippines or employing
Filipinos outside the
Philippines, may enter
agreement with
Philippines for inclusion
of such .employees in
SSS EXCEPT those
already covered by their
respective civil service
retirement system.
1. Employment 1. Members of the AFP
purely casual and and PNP, subject to
not for the purpose the condition that they
of occupation, or must settle first their
business of the financial obligation
employer with the GSIS;
2. Service performed 2. Contractual
;- on or in connection employees, who
EXCLUSIONS have no employer-
with alien vessel, if
FROM when employee relationship
employed
COVERAGE with the agencies they
such vessel is
outside of serve;
Philippines 3. Uniformed personnel
3. Employees of of the Bureau of Fire
Philippine Protection (BFP);
government or 4. Uniformed personnel
instrumentality or of the Bureau of Jail
agency thereof
PAGE 67 OF 244
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4. Service performed Management and

in the employ of a Penology (BJMP);
foreign 5. Barangay and
government, or Sanggunian Officials
international who are not receiving
organizations, or fixed monthly
wholly owned compensation;
instrumentality 6. Employees who do
employing workers not have monthly
in the Philippines or regular hours of work
employing Filipinos and are not receiving
outside of the fixed monthly
Philippines compensation
5. Services performed (1RR of R.A. No.
by temporary 8291, Rule 11, Sec 3,
employees and Par. 2)
other employees
excluded by SSS
regulation;
employees of bona
fide independent
contractors shall not
be deemed
employees of the
employer engaging
the services of an
independent
contractor
All actual remuneration The basic pay or salary All payments made for
for employment, received by an employee, income benefits, and
including the mandated pursuant to his medical or related
cost-of-living allowance, election/appointment, benefits.
the cash value of any excluding per diems,
COMPENSATION remuneration paid in any bonuses, overtime pay,
medium other than cash honoraria, allowances
EXCEPT that part of the and any other
remuneration in excess emoluments received in
of the maximum salary addition to the basic pay
credit
Non-work connected Work-connected exempt
disability, sickness, from liability where
maternity, death and old permanent disability due
age and other to his grave misconduct,
BASIS OF CLAIM
contingencies resulting habitual intoxication, or
in loss of income or willful intention to kill
financial burden (Sec. 2) himself or another (Sec.
15-17)
1. Employer's 1. Member shall Employer's obligation to
contribution on his continue to be a pay the monthly
account ceases at member; and contribution arising from
EFFECTS OF
the end of the month 2. Member shall be that employment shall
SEPARATION
of separation; entitled to whatever cease at the end of the
FROM
2. Employee's benefits he has month of contingency
EMPLOYMENT
obligation to qualified to in the and during such months
contribute also evert of any that he is not receiving
ceases at the end of contingency wages or salary.
PAGE 68 OF 244
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the month of compensable under

separation; this Act.
3. . Employee shall be
credited with all
contributions paid on
his behalf and
entitled to benefits;
4. Employee may
continue to pay the
total contributions to
maintain his right to
full benefits.
A. Employer: Employer: A. Any physician
Report immediately to Report to GSIS the attending an injured or
SSS the names, ages, names, employment sick employee shall report
civil status, occupations, status, positions, salaries concerning his condition
salaries and dependents of the employee and such or treatment, and
of all his covered other matter as thereafter, make available
employees. determined by the GSIS. to the employee or the
REPORTING System such medical
REQUIREMENTS B. Self-employed: information.
Report to SSS within 30
days from the first day of B. Within five days after
his operation, his name, entry in the logbook, the
age, civil status, employer shall report to
occupation, average the System only those
monthly net income and contingencies it deems to
his dependents. be work-connected.
1. Employer's contributions 1. Employer's
2. Employee's/member's contributions contributions
FUNDING 2. Government
guarantee
EXEMPTION Property, assets, and revenues of SSS and GSIS are State Insurance Fund and
FROM TAX/ all exempt from taxes, and all benefits paid by SSS or all its assets shaIl be
LEGAL GSIS shall likewise be exempt from taxes, exempt from any tax, fee,
PROCESS/ assessments, fees, charges, and duties of all kind charge, levy, or customs
LIEN or import duty
Dispute arising from: Any dispute arising under Dispute arising from:
1. Coverage this Act and other laws 1. Coverage
2. Benefits administered by GSIS 2. Benefits
3. Contributions 3. Contributions
4. Penalties Jurisdiction: GSIS 4. Penalties
5. Any matters related 5. Any matter related
thereto When decision made: 30 thereto
days from receipt of the
Jurisdiction: Social hearing officer's findings Jurisdiction: SSS or GSIS,
DISPUTE and recommendations or as the case may be.
Security Commission
SETTLEMENT
30 days after submission
When decision made: for decision Appeal:
Mandatory period of 20 The Commission - decide
days from submission of Appeal: within twenty working
evidence CA — Rule 43, Section 31 days from the submission
SC — Rule 45 of the evidence.
Appeal:
CA — questions of law SC — questions of law only
and facts
PAGE 69 OF 244
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SC — questions of law
only
20 years from: 4 years from date of Claim for compensation
1. time delinquency is contingency EXCEPT for - 1 year from notice to the
known; life and retirement employer
2. time the assessment benefits
is made by the SSS; All money claims arising
PRESCRIPTIVE
or from employer-employee
PERIOD
3. time the benefit relations accruing during
accrues. the effectivity of this Code
(as the case may be) - within 3 years from the
time the cause of action
accrued
4. "Death" is the loss of life resulting from

EMPLOYEE'S COMPENSATION LAW l'ECL1 injury or sickness (Labor Code, Art. 1731m])
(P.D. No. 626)
5. "Sickness" is any illness defined accepted
Definition of Injury, Accident, and Death as occupational disease listed by the
1. Injury: Any harmful change in the human Commission, or caused by employment,
organism from any accident arising out of subject to proof that the risk of contracting
and in the course of employment. (ECC v. the same is increased by work conditions
Sanico, G.R. No. 134028, 1999) (Labor Code, Art. 1730
2. "Arising out of" refers to the origin or 6. "Disability" means loss or impairment of a
cause of the accident. "In the course of physical or mental function resulting from
employment" refers to the injury that takes injury or sickness (Labor Code, Art. 173Inj)
place within the period of employment, at
the place where the employee reasonably Abolishment of Presumption of
may be, and while fulfilling his duties or is Compensability (doctrine under Workman's
engaged in doing something incidental Compensation Act, predecessor law of ECL)
thereto (Iloilo Dock & Engineering Co. v. While the presumption of compensability and
WCC, G.R. No. L-26341, 1968) theory of aggravation under the Workmen's
Compensation Act may have been abandoned
3. "Accident" is an unintentional and under the New Labor Code, it is significant that the
unforeseen injurious occurrence that which liberality of the law in general in favor of the
happens by chance or fortuitously without workingman still subsists. (Lazo v. ECC, G.R. No.
intention and design and which is 78167, 1990)
unexpected, unusual, and unforeseen
(Sunga v. Virgen Shipping Corp., G.R. No. Rules on Compensability
198640, 2014) 1. For the injury and the resulting disability or
death to be compensable, the injury must be
An "assault" although resulting from a the result of accident arising out of and in the
deliberate act of the slayer, is considered an course of the employment (ECC Resolution
"accident" under the law, since the word No. 2799, 1984); and
"accident" is intended to indicate that "the 2. For the sickness and the resulting disability
act causing the injury shall be casual or or death to be compensable, the sickness
unforeseen, an act for which the injured must be the result of an occupational
party is not legally responsible." (Taller Vda. disease listed under the Annex "A" of the
de Nava v. Ynchausti Steamship, G.R. No. Rules dealing with occupational diseases
35741, 1932) with the conditions set therein satisfied.
Otherwise, proof must be shown that the risk
of contracting the disease is increased by
PAGE 70 OF 244
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the working conditions (ECL Rules, Sec. 1, or at his home, or during his employment,
Rule III) with some duty or special errand connected
3. Only injury or sickness that occurred on or with his employment; and
after January 1, 1975 and the resulting 4. Where the employer, as an incident of the
disability or death shall be compensable employment, provides the means of
(ECL Rules, Sec. 1, Rule IN transportation to and from the place of
employment (Iloilo Dock and Engineering
Limitations — No compensation Co. v. WCC, G.R. No. L-26341, 1978)
No compensation shall be allowed to the -
employee or his dependents when the injury, Street Peril Principle
sickness, disability, or death was occasioned by 1. The act of the employee of going to, or
any of the following: coming from, the workplace, must have
1. His intoxication; been a continuing act, that is, he had not
2. His willful intention to injure or kill himself or been diverted therefrom by any other
another; or activity; and he had departed from his usual
3. His notorious negligence (Labor Code, Art. route to, or from, his workplace; or
178; ECL Rules, Sec. 1, Rule IV) 2. An employee on a special errand that must
have been official and in connection with his
Sufficient proof of insanity or mental sickness may work (ECC Resolution No. 3914-A, 1988)
be presented to negate the requirement of
willfulness as a matter of counter-defense (Agile Proximate Cause Doctrine
Maritime Resources v. Siador, G.R. No. 191034, The proximate legal cause is that acting first and
2014) production the injury either immediately or by
setting others in motion, they constitute a natural
Intoxication alone is not sufficient to defeat the and continuous chain of events, each having a
recovery of compensation when intoxication does close causal connection with its immediate
not incapacitate the employee from performing his predecessor. (Azucena, The Labor Code with
functions and duties and from following his Comments and Cases, Vol. 1, p. 529, 2016)
occupation (De Yohanon v. Balena, G.R. No. L-
43641,1977) General Rule: Proximate cause resulting to injury
is an injury arising out of employment.
Direct Premises Rule
The accident should have occurred at the place of Exception: When independent intervening cause
work to be compensable. ensues attributable to claimant's fault.
General Rule: In the absence of special 24-Hour Duty Doctrine

circumstances, an employee injured in, going to or Members of the national police by the nature of
coming from, his place of work is excluded from their functions are technically on duty 24 hours a
the benefits of workmen's compensation acts day, except when they are on vacation leave.
(Iloilo Dock andEngineering Co. v. WCC, G.R. No.
L-26341, 1978) The 24-hour duty doctrine should not be
sweepingly applied to all acts and circumstances
Exceptions: causing the death of a police officer but only to
1. Where the employee is proceeding to or those which, although not on official line of duty,
from his work on the premises of his are nonetheless basically police service in
employer; character. (Tancinco V. GSIS, G.R. No. 132916,
2. Where the employee is about to enter or 2001)
about to leave the premises of his employer
by way of the exclusive or customary means Incidents of Employment Doctrine
of ingress and egress; Acts which are reasonably incidental to the
3. Where the employee is charged, while on employment are deemed arising out of such
his way to or from his place of employment employment, thus compensable
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1. Acts of personal ministration for the comfort 2. When the injured was a victim of the assault
or convenience of the employee; and it occurred in the course of performance
2. Slight deviation from work, from curiosity, or of official functions, compensable (Lentejas
otherwise; v. ECC, G.R. No. 89168, 1991)
3. Acts for the benefit of the employer;
4. Acts in emergencies; and Bunkhouse Rule
5. Acts done to further the Goodwill of the Where the employee is required to stay in the
business. (Horovitz, 3 NACCA L.J. 28-30) premises or in quarters furnished by the employer,
injuries sustained therein are in the course of
Force majeure employment regardless of the time the same
General Rule: Employer is not responsible. occurred. (Uy v. WCC, G.R. No. L-43389, 1980)
Exception: Positional and local risks doctrine SICKNESS AND OCCUPATIONAL DISEASE
When one in the course of his employment is Conditions for Compensability of
reasonably required to be at a particular place at a Occupational Disease and Resulting Disability
particular time and there meets an accident, or Death
although one which any other person then and 1. His sickness was the result of an
there present would have meet irrespective of his occupational disease listed under Annex A
employment, that accident is one arising out of the of the Rules of the Employees
employment if the person is so injured. (Azucena, Compensation; or
The Labor Code with Comments and Cases, Vol. 2. The risk of contracting the disease was
1, p. 552-553, 2016) increased by his working conditions (Barrios
v. ECC, G.R. No. 148089, 2006)
Assault of an Employee considered as an
Accident Theory of Increased Risks
An "assault" although resulting from a deliberate If the ailment is not included in the list of
act of the slayer, is considered an "accident" under occupational diseases, the claimant has the
the law, since the word "accident" is intended to burden of proving that the nature of the work
indicate that "the act causing the injury shall be increased the risk of contracting the disease.
casual or unforeseen, an act for which the injured (Dabatian v. GSIS, G.R. No. 4721, 1987)
party is not legally responsible." (Taller Vda. de
Nava v. Ynchausti Steamship, G.R. No. 35741, Where the cause of the disease is unknown, the
1932) theory of increased risk is applicable (Panotes v.
ECC, G.R. No. L-64802, 1985)
The death of an employee due to a murderous
assault is compensable when the same occurred "Increased Risk" Jobs
in the course of performance of official functions. 1. Keeping the peace or guarding property
2. Keeping or carrying of money or valuables
The motive of assault need not be established if 3. Expose employee to direct contact with
the covered employee sustained the injury while: lawless and irresponsible people
1. The employee was at the 4. Bus driver, taxi driver, or street car
assigned/designated workplaces; or conductor. (Batangas Transportation Co. v.
2. The employee was executing orders of the Vda de Rivera, G.R. No. L-7658, 1956)
employer, regardless of the time and place 5. Expose employee to illness; and
of the incident 6. Prolonged sitting down and putting off
urination. (Barrios v. ECC, G.R. No.
Rule on Injury or Death in the Course of 148089 March 24, 2006)
Assault
1. When the injured was the unlawful Reasonable Proof of Connection
aggressor, not compensable (Mabuhay What the law requires is reasonable work
Shipping Services v. NLRC, G.R. No. connection and not a direct causal relation. It is
94167, 1991) sufficient that the hypothesis on which workmen's
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claim is based is probable since probability, not. period exceeding 240 days. (Abaya v. ECC, G.R.
certainty, is the touchstone. (Castro-Garupa v. No. 64255, 1989)
ECC, G.R. No. 158268, 2006)
Test of Permanent Total Disability
C. DISABILITY AND DEATH BENEFITS The test of whether an employee suffers from
"permanent total disability" is a showing of the
1. TEMPORARY TOTAL DISABILITY capacity of the employee to continue performing
his work notwithstanding the disability he incurred.
As a result of injury or sickness, the employee is (Vicente v. ECC, G.R. No. 85024, 1991)
unable to perform any gainful occupation for a
continuous period not exceeding 120 days. (Berko Instances of Permanent Total Disability
International v. Alcayno, G.R. No. 188190, 2014) 1. Temporary total disability lasting
continuously for more than one hundred
Amount of Benefits twenty days, except as otherwise provided
Income benefit equivalent to 90% of his average for in the Rules;
daily salary credit subject to the following: 2. Complete loss of sight of both eyes;
1. Benefit shall not be less than P10 or more 3. Loss of two limbs at or above the ankle or
than P90; not paid lower than 120 days wrist;
unless injury or sickness requires more 4. Permanent complete paralysis of two limbs;
extensive treatment that lasts beyond 120 5. Brain injury resulting in incurable imbecility or
days not exceeding 240 days from the onset insanity; and
of disability, in which case he shall be paid 6. Such cases as determined by the Medical
benefit for Temporary Total Disability during Director of the System and approved by the
the extended period (P10 — P200 per day, Commission. (Labor Code, Art. 198[c])
maximum 120 days).
2. Benefit shall be suspended if employee When temporary total disability becomes
failed to submit monthly medical report permanent total disability
certified by attending physician. (Amended 1. Declared by the company-designated
Rules on Employees' Compensation, Rule physician within 120 or 240 day treatment
X, Sec. 3) period; or
2. In case of absence of such a declaration
Period of Relapse either of fitness or permanent total disability,
The period covered by any relapse he suffers, or upon the lapse of the 120 or 240 day
recurrence of the illness, which results in disability treatment period, while the employee's
and is determined to be compensable, shall be disability continues and he is unable to
considered independent of, and separate from, the engage in gainful employment during such
period covered by the original disability. Such a period, and the company physician fails to
period shall not be added to the period covered by arrive at a definite assessment of the
his original disability (Amended Rules on employee's fitness or disability (Alpha Ship
Employees' Compensation, Rule X, Sec. 2[b]) Management v. Cabo, G.R. No. 192034,
2014)
2. PERMANENT TOTAL DISABILITY
When the company-designated physician and
In means incapacity to perform gainful work which employee-designated physician disagree
is expected to be permanent. This status does not If a doctor appointed by the seafarer disagrees
require a condition of complete helplessness. Nor with the assessment of the company-designated
is it affected by the performance of occasional odd doctor, a 3 rd doctor may be agreed jointly between
jobs. the employer and the seafarer, and the 3rd doctors'
decision shall be final and binding on both parties.
There is permanent total disability if as a result of (Bahia Shipping v. Constantino, G.R. No. 180343,
the injury or sickness, the employee is unable to 2014)
perform any gainful occupation for a continuous
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Suspension of Income Benefits Liabilities of Employer (ER) for Work-related

Monthly income benefits can be suspended under Injury or Illness (IN/ILL) of the Seafarer During
any of the following conditions: Term of Contract
1. Failure of the employee to present himself 1. ER will continue to pay the seafarer his
for examination at Vast once a year upon wages during the time he is on board the
notice by the System; ship.
2. Failure to submit a quarterly Medical Report
certified by the attending physician; 2. If IN/ILL requires medical and/or dental
3. Complete or full recovery from his treatment in a foreign port, ER shall be
permanent disability; or liable for full cost of such treatment as well
4. Upon being Gainfully employed. (Amended as board and lodging until the seafarer is
Rules on Employees' Compensation, Rule declared fit to work or to be repatriated.
XI, Sec. 2)
NOTE: If after repatriation, seafarer still requires
3. PERMANENT PARTIAL DISABILITY medical attention, he shall be provided such
treatment until he is declared fit or the degree of
A disability is partial and permanent if as a result his disability had been established by company-
designated physician at the expense of the ER.
of the injury or sickness, the employee suffers a
permanent partial loss of the use of any part of his 3. Seafarer shall also receive sickness
body. (Abaya v. ECC, G.R. No. 64255, 1989) allowance from his employer. The amount
is equivalent to his basic wage computed
Distinguished from Permanent Total Disability from the time he signed off until he is
The test of whether an employee suffers from declared fit to work or the degree of
"permanent total disability" is a showing of the disability has been assessed by the
capacity of the employee to continue performing company-designated physician. The
his work notwithstanding the disability he incurred. period within which the seafarer shall be
(Vicente v. ECC, G.R. No. 85024, 1991) entitled to his sickness allowance shall
not exceed 120 days. Payment shall be
made on a regular basis, but not less
Receipt of Disability Benefit Precludes Claim
than once a month.
for Loss of Future Earnings
Once given disability compensation for loss of NOTE: Under the 2000 POEA-SEC, the
earning capacity, an additional award for loss of assessment made by company-designated
earnings (future earnings) no longer lies, physician for permanent disability shall in no case
otherwise, it will result in double recovery. exceed 120 days.
(Magsaysay Maritime Corp. v. Chin, Jr., G.R. No.
199022, 2014) Elburg Shipmanagement Phi/s., Inc. v. Ouioguie,
Jr. provided a summation of periods when the
company-designated physician must assess the
NOTES: It must be shown that the injury or illness
seafarer:
was contracted during the term of employment.
a. The company-designated physician must
The unqualified phrase "during the term" covers all issue a final medical assessment on the
injuries or illnesses occurring during the lifetime of seafarer's disability grading within a period of
the contract. (Wallem Maritime Services v. 120 days from the time the seafarer reported
Tanawan, G.R. No. 160444, 2012) to him;
b. If the company-designated physician fails to
Reimbursement for Medical Expenses are give his assessment within the period of 120
separate and distinct from Disability Benefits. days, without any justifiable reason, then the
(Javier v. PH, Inc., G.R. No. 204101, 2014) seafarer's disability becomes permanent and
total;
c. If the company-designated physician fails to
DISABILITY BENEFITS (2010 AMENDED give his assessment within the period of 120
POEA-SEC) days with a sufficient justification (e.g.,
seafarer required further Medical treatment or
seafarer was uncooperative), then the period
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of diagnosis and treatment shall be extended Failure of the seafarer to comply with the
to 240 days. The employer has the burden to mandatory reporting requirement shall result
prove that the company-designated physician in his forfeiture of the right to claim the above
has sufficient justification to extend the period; benefits.
and
d. If the company-designated physician still fails When the seafarer suffers work-related illness
to give his assessment within the extended during the term of his contract, the employer shall
period of 240 days, then the seafarer's be liable to pay for: (1) the seafarer's wages; (2)
disability becomes permanent and total, costs of medical treatment both in a foreign port
regardless of any justification. and in the Philippines until the seafarer is declared
fit to work, or the disability rating is established by
Hence, the general rule is that the 120-day period the company-designated physician; (3) sickness
is an absolute rule. The company-designated allowance which shall not exceed 120 days; and
physician must provide a sufficient justification (4) reimbursement of reasonable medicine,
to extend the original 120-day period of traveling, and accommodation expenses.
assessment. (Career Philippines However, to be qualified for the foregoing
Shipmanagement, Inc. v. Silvestre, G.R. No. monetary benefits, the same section of the POEA
213465, 2018). • Contract requires the seafarer to submit
himself/herself to a post-employment medical
NOTE: Prior to Elburg ruling, the Court held in examination by a company-designated physician
Vergara v. Hammonia Maritime Services, Inc. that within three working days upon his return to the
seafarers could not automatically claim permanent Philippines, except when he is physically
and total disability even though the 120-day period incapacitated to do so. The seafarer is likewise
for medical evaluation was exceeded for it was required to report regularly to the company-
possible to extend the evaluation or treatment designated physician during the course of his
period to 240 days. (Vergara V. Hammonia treatment. The three-day reporting requirement
Maritime Services, Inc., 588 Phil. 895, 2008). is MANDATORY. (Manila Shipmanagement &
Manning, Inc. v. Aninang, G.R. No. 217135, 2018)
4. Seafarer is entitled to reimbursement of
the cost of medicines prescribed by
company-designated physician. 5. Illnesses NOT listed in Sec. 32 of POEA-
SEC are disputably presumed as work-
If treatment is on an out-patient basis as related.
determined by the company-designated
physician, the company shall approve the 6. In case seafarer is disembarked from ship
appropriate mode of transportation and for medical reasons, ER shall bear full
accommodation. cost of repatriation if seafarer is declared:
a. fit for repatriation; or
The reasonable cost of actual traveling b. fit to work but the employer is
expenses and/or accommodation shall be unable to find employment for the
paid subject to liquidation and seafarer on board his former ship
submission of official receipts and/or or another ship of the employer.
proof of expenses.
7. In case of permanent total or partial
NOTE: To be entitled to the foregoing monetary disability of the seafarer, he shall be
benefits, seafarer shall submit himself to a post- compensated in accordance with the
employment medical examination by a company- schedule of benefits enumerated in
designated physician within 3 working days Section 32 of POEA-SEC. Computation of
upon his return. his benefits shall be governed by the rates
and the rules of compensation
EXCEPT when he is physically incapacitated to do applicable at the time the illness or
so. In such case, a written notice to the agency disease was contracted.
within the same period (3 working days upon
return) is deemed as compliance. NOTE: The disability shall be based solely on
the disability gradings provided under
The seafarer shall also report regularly to the Section 32. It shall NOT be measured or
company-designated physician. determined by the number of days a seafarer
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is under treatment or the number of days in not exceeding 5, beginning with the youngest and
which sickness allowance is paid. without substitution. The income benefit shall be
guaranteed for 5 years. (Amended Rules on
8. The aforementioned benefits are separate Employees' Compensation, Rule XIII, Sec.3)
and distinct from other benefits the
seafarer is entitled to. Conditions to entitlement
1. The employee has been duly reported to the
In determining the compensability of an illness, it System;
is not required that the employment be the sole 2. He died as a result of an injury or sickness;
factor in the growth, development, or acceleration
and
of a claimants' illness to entitle him to the benefits
provided for. It is enough that his employment 3. The System has been duly notified of his
contributed, even if only in a small degree, to the death, as well as the injury or sickness which
development of the disease. caused his death.
Even assuming that the ailment of the worker was NOTES: Employer shall be liable for the benefit if
contracted prior to his employment, this still would such death occurred before the employee is duly
not deprive him of compensation benefits. For reported for coverage to the System.
what matters is that his work had contributed, even
in a small degree, to the development of the If the employee has been receiving monthly
disease. Neither is it necessary, in order to recover
income benefit for permanent total disability at the
compensation, that the employee must have been
in perfect health at the time he contracted the time of his death, the surviving spouse must show
disease. A worker brings with him possible that the marriage has been validly subsisting at the
infirmities in the course of his employment, and time of his disability.
while the employer is not the insurer of the health
of the employees, he takes them as he finds them The cause of death must be a complication or
and assumes the risk of liability. (Skippers United natural consequence of the compensated
Pacific, Inc. v. Lagne, G.R. No. 217036, 2018) Permanent Total Disability
(Amended Rules on Employees' Compensation,
Rule XIII, Sec.1)
For disability to be compensable, two elements
must concur: (1) the injury or illness must be work-
Amount of Benefits
related; and (2) the work-related injury or illness
must have existed during the term of the seafarer's 1. For life to the primary beneficiaries,
employment contract. guaranteed for 5 years;
2. For not more than 60 months to secondary
Work-related injury pertains to injuries resulting in beneficiaries;
disability or death arising out of, and in the course 3. Total benefits shall be at least P15,000
of, employment. Work-relatedness of an injury or (Labor Code, Art. 200[aj)
illness means that the seafarer's injury or illness
has a possible connection to one's work, and thus, Persons Entitled to Funeral Benefits
allows the seafarer to claim disability benefits. A funeral benefit of P30,000 (ECC Board
Resolution No. 16-05-28, May 31, 2016) shall be
Whoever claims entitlement to the benefits paid to:
provided by law should establish his or her right 1. Surviving spouse; or
thereto by substantial evidence. Petitioner failed to 2. Legitimate child who spent for funeral
prove that the injury suffered is work-related. services;
Hence, he is not entitled to disability benefits. 3. Any other person who can show
(Guerrero v. Philippine Transmarine Carriers, Inc., incontrovertible proof of having borne the
G.R. No. 222523, 2018) funeral expenses. (Amended Rules on
Employees' Compensation, Rule XI)
DEATH BENEFITS
The System shall pay to the primary beneficiaries, Death Benefits (2010 AMENDED POEA-SEC)
upon the death of the covered employee, an
amount equivalent to his monthly income benefit, Work-related death of seafarer during the term of
plus 10% thereof, for each dependent child, but his contract, the employer shall pay his
PAGE 76 OF 244
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beneficiaries $50,000 in Philippine currency and Disqualification due to Misrepresentation

an additional amount of $7,000 to each child under
the age of 21 but not exceeding 4 children, at the A seafarer who knowingly conceals a pre-existing
exchange rate prevailing during the time of illness or condition in the Pre- Employment
payment. (Sec. 20 (B) (1), POEA-SEC) Medical Examination (PEME) shall be liable for
misrepresentation and shall be disqualified from
Compensation payable shall be doubled where any compensation and benefits.
death is caused by warlike activity while sailing
within a declared war zone or war risk area, the
This is likewise a just cause for termination of
compensation payable shall be doubled. (Sec. 20
employment and imposition of appropriate
(B) (2), POEA-SEC)
administrative sanctions. (Sec. 20 (D) POEA-
SEC)
The aforementioned benefits are separate and
distinct from other benefits the seafarer is entitled
to. (Sec. 20 (B) (3), POEA-SEC)
The other liabilities of the employer when seafarer

dies as a result of work-related injury or illness
during the term of employment:
1. Pay the deceased's beneficiary all end of topic
outstanding obligations due the seafarer
under the Contract.
2. Transport the remains and personal
effects of the seafarer to the Philippines at
employer's expense EXCEPT:
a. If death occurred in a port where
local government laws or
regulations do not permit the
transport of such remains.
b. In case death occurs at sea, the
disposition of the remains shall be
handled or dealt with in
accordance with the master's best
judgment.
In all cases, the employer/master shall
communicate with the manning agency to
advise for disposition of seafarer's
remains.
3. Pay the beneficiaries of the seafarer
$1,000 in Philippine currency for burial.
expenses at the exchange rate prevailing
during the time of payment. (Sec. 20 (B)
(4), POEA-SEC)
Injury/Incapacity/Disability/Death Resulting
from Willful or Criminal Act or Intentional
Breach of Duties
Compensation and benefits shall not be payable

in case of injury, incapacity, disability or death of
the seafarer resulting from his willful or criminal
act or intentional breach of his duties.
PROVIDED HOWEVER, that the employer can

prove that such injury, incapacity, disability or
death is directly. attributable to the seafarer. (Sec.
20 (C) POEA-SEC)
PAGE 77 OF 244
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V. LABOR RELATIONS
A. RIGHT TO SELF-ORGANIZATION
1 Coverage
2. Ineligibility of managerial employees;
right of supervisory employees
3. Effect of inclusion as employees outside
of the bargaining unit
4. Non-abridgement
B. BARGAINING UNIT
C. BARGAINING REPRESENTATIVE
D. RIGHTS OF LABOR ORGANIZATION

1. CHECK OFF, ASSESSMENT, AGENCY
FEES
2. COLLECTIVE BARGAINING
a) Duty to Bargain Collectively
b) Collective Bargaining Agreement
(CBA)
E. UNFAIR LABOR PRACTICE

I. NATURE, ASPECTS
2. BY EMPLOYERS
3. BY LABOR ORGANIZATIONS
F. PEACEFUL CONCERTED ACTIVITIES

I. Strike
2. Picketing
3. Lockout
4. Assumption of Jurisdiction
5. Injunctions
PAGE 78 OF 244
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LABOR RELATIONS POLICY 1. Forming, joining, or assisting labor

organizations for the purpose of collective
Labor Relations Policy under The Constitution bargaining through representatives of
The Constitution guarantees to ALL WORKERS their own choosing.
their right, among others, to: 2. To engage in lawful concerted activities
1. Self-organization; for the purpose of collective bargaining or
2. Collective bargaining and negotiations; for their mutual aid and protection. (Labor
3. Peaceful and concerted activities Code, Art. 257)
including the right to strike in accordance
with law; The right to form, join, assist a union is specifically
4. Entitled to security of tenure, humane protected by Art. XIII, Section 3 of the Constitution
conditions of work, and a living wage; and and Art 257 of the Labor Code, and shall not be
5. Participate in policy and decision-making abridged. (SS Ventures Intl. v. SS Ventures Labor
processes affecting their rights and Union, G.R. No. 161690, 2008)
benefits as may be provided by law (PHIL.
CONST. art. XIII, § 3) What the Constitution guarantees is the right to
6. Form unions, associations, or societies for form or join organizations. It is the employee who
purposes not contrary to law ((PHIL. should decide for himself whether he should join
CONST. art. III, § 8) or not in an association. The right to join a union
includes the right to abstain from joining any union.
Labor Relations Policy: Labor Code (Victoriano v. ElizaIde Rope Workers' Union, G.R.
1. To promote and emphasize the primacy of L-25246, 1974)
free collective bargaining and
negotiations, including • WORKERS'
2. Voluntary arbitration mediation and
UNION .ASSOCIATION—
conciliation, as modes of settling labor or Organization of
industrial disputes; workers formed for
To promote free trade unionism as an the mutual aid and
instrument for the enhancement of protection of its
Any labor
democracy and the members or for any
organization in the
3. Promotion of social justice and legitimate purpose
private sector
development; other than collective
organized for
To foster the free and voluntary bargaining
collective bargaining
organization of a strong and united labor
and for other
movement; NOTE: Workers have
legitimate purpose
4. To promote the enlightenment of workers the right to choose
concerning their rights and obligations as whether to form or join
union members and as employees; a union or workers'
5. To provide an adequate administrative association.
machinery for the expeditious settlement
of labor or industrial disputes; The last sentence of Art. 253 broadens the
6. To ensure a stable but dynamic and just coverage of workers who can _form or join a
industrial peace; and workers' association and is not exclusive to
7. To ensure the participation of workers in ambulant, intermittent and itinerant workers.
decision and policy-making processes (Samahan ng mga Manggagawa sa Hanjin, G.R.
affecting their rights, duties and welfare. 211145, 2015.).,
A. RIGHT TO SELF-ORGANIZATION
Scope of Self-Organization Under the Labor

Code
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1. COVERAGE - WHO MAY/MAY NOT EXERCISE ALIENS

THE RIGHT General Rule: All aliens, natural or juridical, [...]
are strictly prohibited from engaging directly or
GENERAL RULE indirectly in all forms of trade union activities.
ALL EMPLOYEES
1. ALL persons employed in: Commercial, Exceptions: Aliens may exercise the right to self-
industrial, agricultural enterprises, organization and join or assist labor unions for
religious, charitable, medical or purposes of collective bargaining, provided the
educational institutions, whether or not following requisites are fulfilled:
operated for profit. 1. With valid working permits issued by
DOLE; and
Purpose: Collective bargaining, engaging in 2. They are nationals of a country which
lawful concerted activities for collective grants the same or similar rights to Filipino
bargaining, and mutual aid and protection (Labor workers:
Code, Art. 253).. a. As certified by the DFA; or
b. Ratified either the ILO Convention
2. Ambulant, intermittent and itinerant and No. 8 or ILO Convention No. 98
rural workers, the self-employed and
those with no definite employers may form SECURITY GUARDS
labor organizations. The security guards and other personnel
employed by the security service contractor shall
Purpose: Mutual aid and protection (Labor Code, have the right:
Art. 253).. 1. To form, join, or assist in the formation of
a labor organization of their own choosing
NOTE: Employees of non-profit organizations are for purposes of collective bargaining and
now permitted to form, organize, or join labor 2. To engage in concerned activities which
unions of their choice for purposes of collective are not contrary to law including the right
bargaining (FEU-Dr. Nicanor Reyes Medical to strike
Foundation v. Trajano, G.R. No. 76273, 1992)
Note: The right to organize cannot be bargained
EMPLOYEES OF GOCCs CREATED UNDER away (Southern Philippines Federation ofLabor v.
THE CORPORATION CODE Calleja, G.R. No. 80882, 1989)
See Discussion Below. EXCEPTIONS:

1. Managerial and Confidential employees
SUPERVISORY EMPLOYEES
Supervisory employees shall not be eligible for Managerial vs. Supervisory vs. Confidential
membership in a labor organization of the rank- Employees
and-file employees but may join, assist or form
separate labor organizations of their own. (Labor MANAGERIAL EMPLOYEE: one who is vested
Code, Art. 255) with powers or prerogatives:
1. To lay down and execute management
Rationale: Supervisory employees, while in the policies and/or
performance of supervisory functions, become the 2. To hire, transfer, suspend, layoff, recall,
alter ego of the management in the making and discharge, assign or discipline
the implementing of key decisions. It would be employees. (Labor Code, Art. 219[m])
difficult to find unity or mutuality of interests in a
bargaining unit consisting of a mixture of rank-and- Managerial employees have the authority to
file and supervisory employees. (Toyota Motor devise, implement, and control strategic and
Phil. Corp. v. Toyota Motor Phil. Corp. Labor operational policies (decision maker).
Union, G.R. No. 121084, 1997)
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Managerial Functions refers to powers such as to: For an Employee to be Considered a Supervisor,
1. Effectively recommend managerial Recommendation Must Be;
actions; 1. Discretionary or judgmental (not clerical);
2. Formulate or execute management policy 2. Independent (not a dictation of someone
or decisions; or else); and
3. Hire, transfer, suspend, lay-off, recall, 3. Effective (given particular weight in
dismiss, assign or discipline employees making the management decision).
(San Miguel Supervisors v. Laguesma, (Azucena, Everyone's Labor Code, 2015
G.R. No. 110399, 1997) ed.)
Managers cannot unionize (United Pepsi-Cola CONFIDENTIAL EMPLOYEES: those who

Supervisory Union v. Laguesma, G.R. No. 1. By the nature of his functions, assist or act
122226, 1998; Labor Code, Art. 255) in a confidential capacity, in regard to
persons who formulate, determine; and
SUPERVISORS: are those employees, who in the 2. Effectuate management policies,
interest of the employer; specifically in the field of labor relations.
1. Effectively recommend such managerial (Sugbuanon Rural Bank v. Laguesma,
actions G.R. No. 116194, 2000)
2. If the exercise of such authority is not
merely routinary or clerical in nature but Confidential employees, by reason of their position
requires independent judgment. (Labor or nature of work are required to assist or act in a
Code, Art. 219) fiduciary manner to managerial employees, they
are likewise privy to sensitive and highly
Supervisors have the task of simply ensuring that confidential records. (Standard Chartered Bank
such policies are carried, _out by the rank-and-file Union v. Standard Chartered Bank, G.R. No.
employees, or who may merely recommend 161933, 2008)
strategic and operational policies (recommender).
Confidentiality Must be Related to Labor
Supervisors can unionize. (Pagkakaisa ng mga Relations, and Not a Business Standpoint
Manggagawa sa Triumph International v. Pura An employee must assist or act in a confidential
Ferrer-Calleja, G.R. No. 85915, 1990) capacity and obtain confidential information
relating to labor relations policies. Exposure to
Note: Supervisors are allowed to form unions. internal business operations of the company is not
What is prohibited is the co-mingling of Rank-and- per se a ground for the exclusion in the bargaining
file employees and supervisors in one union. They unit. (Tunay na Pagkakaisa ng Manggagawa sa
have to form separate unions. Asia Brewery v. Asia Brewery, G.R. No. 162025,
2010)
Managerial Employee vs. Supervisor
MANAGERIAL Doctrine of Necessary Implication
SUPERVISOR-
EMPLOYEE While Art. 255 of the Labor Code singles out
Has power to managerial employees as ineligible to join, assist
recommend those or form any labor organization, under the doctrine
Has power to decide
managerial acts, such of necessary implication, confidential employees
and do managerial
as laying down policy, are similarly disqualified. This doctrine states
acts.
hiring, or dismissing that what is implied in a statute is as much a part
employees, and so on. thereof as that which is expressed. (NATU v.
Republic Planters Bank, G.R. No. 93468, 1994;
Note: The power of the position, not the title, make United Pepsi Cola v. Laguesma, G.R. No. 9663,
the position-holder a manager or a supervisor. 1999)
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Note: Confidentiality may attach to a managerial However: The Victoriano decision does not bar
or non-managerial position. Confidentiality is not the members of the lglesia ni Kristo from forming
determined by rank, but by the nature of the job. their own union. (Kapatiran sa Meat and Canning
Division v. BLR Director, G.R. No. L-82914, 1988)
Note: Confidential employees are excluded from
joining labor organization under the doctrine of
In fact, religious objectors can vote for "No-
necessary implication. If confidential employees
Union" in a certification election in the exercise
could unionize in order to bargain for advantages
for themselves, then they could be governed by of their right to self-organization (Reyes v. Trajano,
their own motives rather than the interest of the G.R. No. 84433, 1992)
employers. They may become the source of
undue advantage. Said employees may act as spy 4. Employees of Foreign Embassies,
or spies of either party to a collective bargaining Consulates and International Organizations
agreement. (Pepsi-Cola Products, Inc. v. For example, the employees of International
Secretary of Labor, G.R. 96663, 1999) Catholic Migration Commission cannot unionize
nor conduct a certification election (International
2. Employee-Members of Cooperatives Catholic Migration Commission v. Hon. Calleja,
An employee of a cooperative who is a member G.R. No. 85750, 1990)
and co-owner thereof cannot invoke the right to
collective bargaining, for certainly, an owner The International Rice Research Institute ("IRRI")
cannot bargain with himself or his co-owners.
enjoys immunity from local jurisdiction; it has the
discretion W/N to waive its immunity (Cal/ado v.
However, insofar as it involves cooperatives with International Rice Research Institute, G.R. No.
employers who are not members or co-owners 106483, 1995)
thereof, such employees are entitled to exercise
the rights of all workers to organization, collective Note: Aliens working in the country with valid work
bargaining negotiations and others. (San Jose
permits issued by the DOLE, may exercise right to
Electric Service Cooperative v. Ministry of Labor, self-organization subject to rule on comity. (Labor
G.R. No. 77231, 1989) Code, Art. 284)
Employee-Members of cooperatives cannot 5. Government Employees

invoke the right to collective bargaining due to the
Note: The prohibition/s are not absolute.
fact of ownership but they are allowed to form an Employees of government corporations
association for their mutual aid and protection as
established under the Corporation Code shall
employees. (Planters Products, G.R. No. 78524,
have the right to organize and to bargain
1989; Benguet Electric, G.R. No. 79025, 1989)
collectively with their respective employers.
3. Religious Objectors
All other employees of the civil service shall have
Under the Industrial Peace Act (1953), members
the right to form associations for purposes not
of religious sects cannot be compelled or coerced
contrary to law. (Art. 254, Labor Code)
to join labor unions even when said unions have
closed shop agreements with employers E.O. 180: Guidelines for the exercise of the right
(Victoriano v. Elizalde Rope Workers' Union, G.R.
to organize of government employees, creating a
no. L-25246, 1974)
Public Sector Labor-Management Council, and for
other purposes.
Note: While the Victoriano decision was penned
citing the Industrial Peace Act, and while said act
Right to Self-Organization under EO 180 is for a
was repealed by R.A. No. 3350, which does not
limited purpose — only for the furtherance and
contain the same exception, subsequent decisions
protection of their interests not for purposes of
still uphold the religious objector exception (see
collective bargaining.
Ebralinag v. Division Superintendent of Cebu,
G.R. No. 95770, 1993)
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Coverage of EO 180 acts designed to place such organizations under

Applies to all government employees the control of government authority. (§6)
Employees of all branches, subdivisions,
instrumentalities, and agencies of the government, Place of Registration
including GOCCs with original charters. (§1) CSC and DOLE. (§7)
Excluded from Coverage Procedure for the Registration of Employees'

1. Members of the Armed Forces of the Organizations
Philippines 1. File application with BLR or Regional
2. Including police officers Office, which shall transmit the application
3. Policemen to the BLR within 3 days from receipt.
4. Firemen and 2. BLR shall process the application in
5. Jail guards (§4) accordance with the Labor Code. (§7)
3. Upon approval, a registration certificate
Right to Organize will be issued, recognizing it as a
All government employees can form, join or assist legitimate employees' organization with
employees' organizations of their own choosing the right to represent its members and
for the furtherance and protection of their interests. undertake activities to further and defend
They can also form, in conjunction with its interests.
appropriate government authorities, labor- 4. The certificates of registration shall be
management committees, work councils, and jointly approved by the Chairman of the
other forms of workers' participation schemes for CSC and Secretary of DOLE. (§8)
the same objectives. (§2)
Subject of Negotiation
Under RA 6715, security guards may freely join Terms and conditions of employment or
a labor,organization of the rank and file or that of improvements thereof, except those that are fixed
the supervisory union, depending on their rank by law, may be the subject of negotiations _
(Manila Electric Company v. The Hon. Secretary between duly recognized employees'
of Labor and Employment, Staff and Technical organizations and appropriate government
Employees Association of Meralco et al, G.R. No. authorities. (§13)
91902, 1991)
Peaceful Concerted Activities and Strikes
Who are Ineligible to Join Organization of Rank The Civil Service laws and rules governing
& File Government Employees concerted activities and strikes in the government
High-level employees whose functions are service shall be observed, subject to any
normally considered as policy-making or legislation that may be enacted by Congress.
managerial or whose duties are of a highly (§14)
confidential nature. (§3)
Public Sector Labor-Management Council
Protection of Right to Organize (Council)
1. They shall not be discriminated against in It is the body charged with implementing and
respect of their employment by reason of administering EO 180.
their membership or participation in
employees' organizations. The Council shall be composed of the following:
2. Employment shall not be subject to the 1. Chairman; Civil Service Commission
condition that they shall not join or shall Chairman
relinquish their membership therein. (§5) 2. Secretary; Department of Labor and
Employment Vice Chairman
Non-Interference of Government Authorities 3. Secretary; Department of Finance
Government authorities shall not interfere in the Member
establishment, functioning or administration of 4. Secretary; Department of Justice Member
5. Secretary; Department of Budget and
government employees' organizations through
Management Member (§15).
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association. (United Pepsi v. Laguesma, G.R. No.

Settlement of Disputes 122226, 1998)
The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the See above discussion on Confidential Employees.
resolution of complaints, grievances and cases
involving government employees. In case any 2. INELIGIBILITY OF MANAGERIAL
dispute remains unresolved after exhausting all EMPLOYEES; RIGHT OF SUPERVISORY
the available remedies under existing laws and EMPLOYEES
procedures, the parties may jointly refer the
dispute to the Council, for appropriate action. COMINGGLING/ MIXTURE OF MEMBERSHIP
(§16)
R.A. No. 9481: AN ACT STRENGTHENING THE
The BLR has the jurisdiction to call for and WORKERS' CONSTITUTIONAL RIGHT TO
supervise the conduct of certification elections SELF-ORGANIZATION, amending the Labor
in the public sector. There is no constitutional Code modified previous Supreme Court rulings
objection to DOLE handling the certification prohibiting supervisors' unions from joining with
process considering its expertise, machinery and the same federation as the rank and file.
experience in this particular activity. EO 180
requires organizations of government employees New law now explicitly ALLOWS for the
to register with both DOLE and CSC. This commingling of the two.
ambivalence notwithstanding, the CSC has no Sec. 8 of new law provides: "Article 245 (now 255)
facilities, personnel and experience in the conduct of the Labor Code is hereby amended to read as
of certification elections. BLR has to do the job. follows —
(Bautista v. CA, G.R. No. 123357, 2005)
Art. 245 (now 255). Ineligibility of Managerial
DEFINITION OF A MANAGERIAL EMPLOYEE: Employees to Join any Labor Organization;
LABOR STANDARDS VS. LABOR RELATIONS Right of Supervisory Employees. - Managerial
employees are not eligible to join, assist or form
LABOR: any labor organization. Supervisory employees
LABOR RELATIONS
• STANDARDS — shall not be eligible for membership in the
Includes the officers Does not include the collective bargaining unit of the rank-and-file
and members of the managerial staff since employees but may join, assist or form separate
managerial staff they are classified as collective bargaining units and/or legitimate labor
(supervisory supervisory organizations of their own. The rank and file
employees); such is employees; used in union and the supervisors' union operating
important to be able to order to determine an within the same establishment may join the
determine if employee's eligibility same federation or national union.
employees are in joining or forming a
covered by the Labor union. Thus, GENERAL RULE: Rank-and-file
Code on Conditions of employees' union and supervisors' union may join
Employment. the same federation or national union.
Extent of Limitation on Right to Self- EXCEPTION: There is conflict of interest in a

Organization national federation affiliating with both the
Art. 255 only disallows managerial employees supervisor's union and the rank-and-file
from joining "labor organizations" (means any employees' union of the same company when the
union or association of employees which exists in following requisites occur:
whole or in part for the purpose of collective 1. The rank-and-file employees are directly
bargaining or of dealing with the employer under the authority of supervisory
concerning terms and conditions of employment). employees AND
Art. 255 does not absolutely disqualify managerial 2. The national federation is actively
employees from exercising their right of involved in union activities in the company
(DLSU Medical Center and College of
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Medicine v. Laguesma, G.R. 102084 , 5. REGISTRATION AND CANCELLATION OF

1998) LABOR ORGANIZATIONS
The inclusion as union members outside the Definition of Terms

bargaining unit shall render said employees Labor Organization: any union or association of
automatically removed from the list of employees in the private sector which exists in
membership of said union. (Labor Code, Art. 256) whole or in part for the purpose of collective
bargaining, mutual aid, interest, cooperation,
4. NON-ABRIDGMENT OF THE RIGHT TO SELF-
protection, or other lawful purposes. (Labor Code,
ORGANIZATION
Art. 21910
It shall be unlawful for any person to restrain,
Union: Any labor organization in the private sector
coerce, discriminate against or unduly interfere
organized for collective bargaining and for other
with employees and workers in their exercise of
legitimate purpose (Sec. 1[zzi Rule I of D.O. 40-
the right to self-organization (Labor Code, Art. 25)
03).
Legitimate Labor Organization: any labor

organization in the private sector registered or
reported with the DOLE, which includes a
local/chapter directly chartered by a legitimate
federation or national union which has been duly
reported to the Department (Labor Code, Art.
2191111)
Independent Union: A labor union at the

enterprise level is either "independent" if created
by independent registration.
Independent Labor Unions require the submission

of names of all its members comprising at least
20% of all the employees in the bargaining unit.
(Labor Code, Art. 240) This requirement does not
apply to local chapters.
Limitation for Trade Unions: Although a trade

union center can be an LLO, it has no power to
directly create a local or chapter. Such power is
only granted to a federation or national union.
(SMCEU-PTGWO v. SMPPEU-PDMP, G.R. No.
171153, 2007)
Company Union: Any labor organization whose

formation, function, or administration has been
assisted by any act defined as ULP under the
Labor Code (Labor Code, Art. 219[17)
Types of Labor Organizations

1. National Union/Federation: group of
legitimate labor unions organized for
collective bargaining or for dealing with •
employers or for participating in the
formulation of social and employment
policies, standards and programs. It has
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at least 10 LLO's, whether independent

unions or chartered locals that are duly NOTE: Under Art. 240, the following organizations
certified bargaining agents. may register as labor organizations:
2. Industry Union: group of LLO operating 1. National Union;
within an identified industry for collective 2. Independent Union;
bargaining or for dealing with employers 3. Federation;
or for participating in the formulation of 4. Industry Union;
social and employment policies, 5. Trade Union Center
standards and programs
3. Trade Union Center: group of national Acquisition of Legal Personality
unions or federations organized for mutual 1. A federation, national union,
aid and protection of its Members, for industry/trade union center or an
assisting such members in collective independent union acquires legal
bargaining, or for participating in the personality upon issuance of the
formulation of social and employment Certificate of Registration.
policies, standards and programs. 2. A Chapter, Local or Chartered Local
4. Independent Union: LO operating at the acquires tentative legal personality to file
enterprise level that acquired legal a Petition for Certificate Election (PCE)
personality through independent upon issuance of its Charter Certificate.
registration All other rights are vested upon the
5. Chartered Local/Local/Chapter: a union submission of:
created through chartering a. The names of the chapter's
6. Workers' Association: an association of officers, their addresses, and the
workers organized for the mutual aid and principal office;
protection of its members or for any b. The chapter's constitution and by-
legitimate purpose other than collective laws; and
bargaining. (D.O. No. 40-03) c. Provided, that where the
7. Legitimate Workers' Association: an chapter's constitution and by-laws
association of workers organized for are the same as that of the
mutual aid and protection of its members federation or the national union,
for any legitimate purpose other than this fact shall be indicated
collective bargaining registered with accordingly. (Labor Code, Arts.
DOLE. 240-241)
LABOR WORKER'S NOTE: Such legal personality may be questioned

ORGANIZATION ASSOCIATION only through an independent petition for
It exists in whole or in It is organized for cancellation and not by way of collateral attack.
part for the purpose of (Sec. 8 Rule IV of D.O. 40-03). The legal
the mutual aid and
collective bargaining personality of a legitimate labor organization
or of dealing with
protection of its cannot be collaterally attacked. The proceedings
employers concerning members or for on a petition for cancellation of registration are
terms and conditions any legitimate independent of those of a petition for certification
of employment. purpose other than election (Samma-Likha v. Samma Corporation,
collective G.R.167141 ,2009).
bargaining. Where to Register

ENTERPRISE
Modes of Acquiring Legitimacy for Labor NATIONAL LEVEL
LEVEL
Organizations Filed with the Bureau
1. Registration with the Bureau of Labor Filed with and acted
of Labor Relations or
Relations (Independent Union); upon by the Regional
the Regional Offices,
2. Chartering or Issuance of a Federation or Office where the
but shall be
National Union of a Charter Certificate
PAGE 86 OF 244
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processed and acted applicant principally Association of Labor Unions v. Secretary

upon by the Bureau operates. of Labor, G.R. No. L-22228, 1969)
which has national Requirements for the Issuance of the
jurisdiction. Certificate of Registration of Labor
(Sec. 1, Rule Ill of D.O. 40-03). Organizations
1. P50 registration fee;
BLR's Duty to Review the Application is 2. Names of its officers, their addresses, the
Compellable by Mandamus principal address of the labor
The ministerial duty involves only the review of the organization, the minutes of the
application for registration and not the issuance of organizational meetings and the list of the
the Certification of Registration. workers who participated in such
meetings;
After a labor organization has filed the necessary 3. In case the applicant is an independent
papers and documents for registration, it becomes union, the names of all its members
mandatory for the Bureau of Labor Relations to comprising at least twenty percent (20%)
check if the requirements under Article 240 have of all the employees in the bargaining unit
been sedulously complied with. where it seeks to operate;
4. If the applicant union has been in
If its application for registration is vitiated by existence for one or more years, copies of
falsification and serious irregularities, especially its annual financial reports; and
those appearing on the face of the application and 5. Four copies of the constitution and by-
the supporting documents, a labor organization laws of the applicant union, minutes of its
should be denied recognition as a legitimate labor adoption or ratification, and the list of the
organization. (Progressive Development members who participated in it. (Labor
Corporation — Pizza Hut v. Laguesma, G.R. No. Code, Art. 240)
115077, 1997)
Note: To create a chapter, no minimum size of
Purpose of Registration membership is required. But the 20% minimum
Registration with the BLR is the operative act that membership is required to register an independent
gives rights to a labor organization. union. The 20% is not a requirement for the
1. It is the fact of being registered with the organizational meeting or the ratification of the
DOLE that makes a labor organization independent union's constitution and by-laws. But
legitimate in the sense that it is clothed the 20% is required at the time the independent
with legal personality to claim union applies to register. (Takata Phil. Corp., v.
representational and bargaining rights BLR and SALAMAT, G.R. No. 196276, 2014)
enumerated in Art. 250 or to strike or
picket under Art. 278. Additional Requirements for the Registration
2. Registration is not a limitation to the right of a Federation
of assembly or association, which may be 1. Proof of the affiliation of at least ten (10)
exercised with or without said registration. locals or chapters, each of which must be
It is merely a condition sine qua non for a duly recognized collective bargaining
the acquisition of legal personality by agent in the establishment or industry in
labor organizations, associations or which it operates, supporting the
unions and the possession of the "rights registration of such applicant federation or
and privileges granted by law to legitimate national union; and
,labor organizations". 2. The names and addresses of the
3. It is a valid exercise of the police power, companies where the locals or chapters
because the activities in which labor operate and the list of all the members in
organizations, associations and union of each company involved. (Labor Code, Art.
workers are engaged affect public 244)
interest, which should be protected. (PH
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Independent Registration vs. Chartering d. The certificate of affiliation issued by the

INDEPENDENT ' federation in favor of the independently
CHARTERING
REGISTRATION registered labor union; and
A duly registered e. Written notice to the employer concerned
federation / national if the affiliating union is the incumbent
Obtained by union union issues a charter bargaining agent
organizers in an to a union in an
enterprise through their enterprise and registers Action on Application
own accord the charter with the The BLR shall act on all applications for
regional office of the registration within 30 days from filing (Labor Code,
BLR Art. 242)
Result: Independent Result: Chapter / Local
union Denial of Application/Return of Notice
With legal personality, Where the documents supporting the application
but loses it once it for registration are incomplete or do not contain
Accorded legal
disaffiliates with the
personality the required certification and attestation, the
legitimate labor
Regional Office or BLR shall, within one day from
federation
receipt of application:
Application is filed with Charter certificate
and will be acted upon issued by federation or 1. Notify the applicant/labor organization
by the DOLE Regional national union is filed 2. In writing of the necessary requirements
Office where the with the Regional Office 3. Complete the same withing 30 days from
receipt of notice
applicant's principal or BLR within 30 days
office is located after the issuance of the
Failure to complete the requirements within the
charter certificate
time prescribed, the application for registration
20% minimum No minimum size of shall be denied, without prejudice to filing a new
membership is required membership is required application or notice (Sec. 5, Rule IV of D.O. 40-
to register an 03)
independent union
Appeal
Affiliate The decision of the Regional Office or the Bureau
1. An independent union affiliated with a denying the application for registration shall be:
federation or national union(/RR Labor 1. In writing;
Code, Sec. 3, Book V, Rule II); or 2. Stating in clear terms the reason for the
2. A chartered local which was subsequently decision; and
granted an independent registration but 3. Application union must be furnished a
did not disaffiliate from its mother copy of said decision (Sec. 6, Rule IV of
federation or national union (Sec. 'gal D.O. 40-03)
Rule I of D. 0. 40-03)
Procedure on Appeal
Requirements of Affiliation (Sec. 5 and 6, Rule 1. Memorandum of Appeal shall be filed with
III of D.O. 40-03) the Regional office or the BLR that issued
1. Report affiliation of independently registered the denial/return of notice.
labor union filed with the Regional Office that 2. This shall be transmitted by the Regional
issued its certificate of registration; Office to the Bureau or by the Bureau to
2. Attachments: the Office of the Secretary within 24 hours
a. Registration of the labor union's board of from the receipt of the Memo of Appeal.
directors approving the affiliation;
b. Minutes of the general membership
meeting approving the affiliation;
c. Total number of members comprising the
labor union and the names of the
members who approved the affiliation;
PAGE 88 OF 244
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• APPEAL ii. Misrepresentation, false statements or fraud in

CASES FROM CASES FROM connection with the election of officers,
_ THE REGIONAL THE BLR minutes of the election of officers, and the list
- OFFICE of voters.
Appealable to the Decisions of the BLR iii. Voluntary dissolution by the members (Labor
BLR in the exercise of Code, Art. 247)
Decisions on the BLR his/her original
on cases appealed jurisdiction may be Note: Labor Code, Art. 250 provides an additional
from the Regional appealed to the ground - Any violation of the rights and conditions
Secretary of Labor of membership shall be a ground for the
Director are final and
cancellation of the union registration or expulsion
not appealable to the (Sec. 22, Rule XI, of an officer from office, whichever is appropriate.
Secretary of Labor D.0. No. 40-03)
(Sec. 22, Rule XI, Note: For fraud and misrepresentation to be
D. O. No. 40-03) grounds for cancellation of union registration, the
MODES OF APPEAL nature must be grave and compelling enough to
The Bureau of Labor The Bureau of Labor vitiate the consent of a majority of union members
Relations shall Relations shall (S.S. Ventures International v. S.S. Ventures
transmit the records transmit the records Labor Union, G.R. 161690, 2008)
within 24 hours from within 24 hours from
receipt of the Memo of receipt of the Memo of Note: Failure to submit reportorial requirements is
Appeal. Appeal. no longer a ground for cancellation but shall
subject the erring officers or members to
The Bureau of Labor The Secretary of suspension, expulsion from membership, or any
Relations shall render Labor shall render a appropriate penalty (Labor Code, Art. 248)
a decision within 20 decision within 20
days from receipt of days from receipt of Requirements for Voluntary Cancellation of
records. records. Registration
1. 2/3 of its general membership votes in a
The decision of the The decision of the meeting duly called for the purpose
BLR may be Secretary of Labor 2. Application to cancel registration
contested before the may be contested submitted by the board and attested by
CA via petition for before the CA via the president. (Labor Code, Art. 248)
Certiorari under Rule petition for Certiorari
65 of the Rules of under Rule 65 of the Note: Having held an illegal strike is not reason to
Court. Rules of Court. cancel a union's registration. Holding an illegal
(Sec. 7, Rule IV of D.0. 40-03) strike has adverse consequences to the strikers,
particularly the officers, but cancellation of their -
Grounds for Appeal union registration is not one of those
Any applicant union may appeal within 10 consequences (ltogon-Suyoc Mines v. Sangilo-
calendar days from receipt of such decision on Itogon Workers Union, G.R. No. L-24189, 1986)
grounds of:
1. Grave abuse of discretion; and Any party-in-interest may commence a petition for
2. Gross incompetence cancellation. (D.O. No. 40-03, Sec. 2, Rule XIV)
(/RR Labor Code, Sec. 6, Book V, Rule 11) The employer is a "party-in-interest". (Azucena
Vol. I, 9th ed., p. 217).
Grounds for Cancellation
i. Misrepresentation, false statement or fraud in
connection with the adoption or ratification of
the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list
of members who took part in the ratification.
PAGE 89 OF 244
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6. RIGHTS AND CONDITIONS OF

MEMBERSHIP However: When the violation directly affects only
1 or 2 members, then only 1 or 2 members would
SUMMARY OF RIGHTS AND be enough to report such violation (Verceles v.
CONDITIONS OF MEMBERSHIP UNDER BLR-DOLE, G.R. No. 152322, 2005)
_ ART. 250 -
The member's right to vote Visitorial Power of DOLE Secretary
• and be voted for, subject to The complaint to authorize the DOLE Secretary's
_ POLITICAL
RIGHTS
lawful provisions on or his duly authorized representative's power to
qualifications and inquire into the financial activities of any labor
disqualifications organization must be supported by at least 20% of
: The member's right to the Labor Organization's membership (Labor
DELIBERATIVE
participate in deliberations on Code, Sec. 289).
AND
MAKING RIGHTS major policy questions and
decide them by secret ballot Eligibility for Membership
The member's rights: Eligibility for membership depends on a union's
1. Against unauthorized constitution and by-laws. Nonetheless, employee
collection of is already qualified for union membership starting
contributions or on his first day of service. (Labor Code, Art. 292(c))
unauthorized
disbursements An employee's membership in the union does not
. To require adequate mean coverage in the CBA. Neither does
records of income and coverage in the CBA mean membership in the
_
-_- RIGHTS OVER expenses; union.
--- _ - MONEY_ 3. To access to financial
- MATTERS records; • WHO ARE . WHO ARE.
. To vote on officers' PROHIBITED FROM PROHIBITED FROM
compensation; BECOMING BECOMING
. To vote on proposed - MEMBERS OF A OFFICERS OF A
special assessments LABOR LABOR -
. To be deducted a special ORGANIZATION ORGANIZATION
assessment only with the 1. Non-Employees 1. Non-Employees
member's individual (Labor Code, Art. (Labor Code, Art.
written authorization 250[c]); 250[c]);
The member's right to be 2. Subversives or 2. Subversives or
informed about: those engaged in those engaged in
1. The organization's subversive subversive
RIGHT TO -
INFORMATION
constitution and by-laws; activities (Labor activities (Labor
and Code, Art. Code, Art.
. The CBA, and about 250[e]); 250[4);
labor laws 3. Persons who
have been
Note: Any violation of the above rights and convicted of a
conditions of membership shall be a ground for the crime involving
cancellation of the union registration or expulsion moral turpitude
of an officer from office, whichever is appropriate. (Labor Code, Art.
250N)
Reporting Violations of Membership
At least 30% of all the members of the union or any Note: No qualification requirements for candidacy
member or members specifically concerned may to any position shall be imposed other than
report such violation to the Bureau (Labor Code, membership in good standing in the labor
Art. 250) organization. Union officer must be an employee.
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registration but did not disaffiliate from its

Who are entitled to Vote federation, reported to the Regional Office and the
Only members of the union can take part in the Bureau in accordance with Rule III, Sections 6 and
election of union officers. (Labor Code, Art. 2501c]) 7 of these Rules (Sec. ha], Rule I of D. O. 40-03)
The question however of eligibility to vote may be A local union does not owe its existence to the
determined through the use of the applicable federation with which it is affiliated. It is a separate
payroll period and employee's status during the and distinct voluntary association owing its
applicable payroll period. The payroll of the month creation to the will of its members. Mere affiliation
next preceding the labor dispute in case of does not divest the local union of its own
regular employees and the payroll period at or personality, neither does it give the mother
near the peak of operations in case of employees federation the license to act independently of the
in seasonal industries. (Tancino v. Ferrer- local union. It only gives rise to a contract of
Calleja, G.R. No. 78131, 1988) agency, where the former acts in representation
of the latter. (Insular Hotel Employees v.
Limitations Waterfront Insular Hotel, G.R. No. 174040-41,
1. The labor organization cannot compel 2010)
employees to become members of their
labor organization if they are already (i) DISAFFILIATION
members of a rival union;
2. The persons mentioned in Art. 250[e]) of A right granted to affiliates to disassociate from the
the Labor Code are prohibited from mother union.
becoming a member of a labor
organization (Subversives); and Local unions remain the basic units of association,
3. Religious objectors cannot be compelled free to serve their own interests subject to the
or coerced to join labor unions (Victoriano restraints imposed by the constitution and the by-
v. ElizaIde Rope Worker's Union, G.R. No. laws of the ndtional federation, and they are also
L-25246, 1974) free to renounce the affiliation upon the terms laid
down in the agreement which brought about
a) NATURE OF RELATIONSHIP affiliation. To disaffiliate is a right, but to observe
the terms of affiliation is an obligation.
(1) MEMBER— LABOR UNION
Note: Disaffiliation is a right corollary to the right
The relationship of the union and the member is of association granted by the Constitution. The
fiduciary in nature. The union may be considered right to associate necessarily entails the right not
the agent of its members for the purpose of to associate. (Volkschel Labor Union v. BLR, G.R.
securing for them fair and just wages and good No. L-45824, 1985)
working conditions and is subject to the obligation
of giving the members as its principals all Note: Chartered local can disaffiliate from the
information relevant to union and labor matters federation, but it will lose its legal personality. In
entrusted to it. (Heirs of Teodolo Cruz v. CIR, G.R. practice, chartered locals file for independent
No. L-23331-32, 1969) registration prior to disaffiliation in order for it to
gain new legal personality despite
AGENCY RELATIONSHIP INVOLVED disaffiliation.When to Disaffiliate
PRINCIPAL AGENT AGENT OF AGENT General Rule: A labor union may disaffiliate from
Federation/National the mother union to form a local or independent
Employees Local/Chapter
Union union ONLY during the 60-day freedom period
(2) LOCAL-UNION — FEDERATION immediately preceding expiration of CBA.
Affiliate: Independent union affiliated with a Freedom Period: The last 60 days of the 5th and
federation or national union (IRR Labor Code, last year of the CBA. (Labor Code, Art. 265)
Sec. 3, Book V, Rule II); OR a chartered local
which was subsequently granted independent
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Exception: Shift of allegiance of majority. In such

a case, however, the CBA continues to bind EFFECTS OF DISAFFILIATION
members of the new or disaffiliated and AS TO EXISTING -
independent union up to the CBA's expiration AS TO UNION DUES
CBA
date. (Tanduay Distillery Labor Union v. NLRC. The federation will no
G.R. No. 75037, 1987) longer receive the
dues from the
Distinction — Individual Member Disaffiliation employer because
versus Union's Disaffiliation without the said The CBA continues
Any individual member or any number of members affiliation, the employer to bind the members
may disaffiliate from the union during the "freedom has no link to the of the new or
period." But disaffiliating the union from its mother mother union. disaffiliated and
union must be supported by the majority of the independent union
members. If done by a minority, even during the The employer's check- up to the CBA's
freedom period, the act may constitute disloyalty. off authorization, even expiration date.
(Villar, et al v. lnciong, G.R. Nos. L-50283-8, 1983) if declared irrevocable, (Associated Workers
is good only as long as Union-PTGWO v.
Manner of Disaffiliation they remain members NLRC, G.R. Nos.
An affiliate may disaffiliate from a labor federation of the union 87266-69, 1990)
or national union through the members' concerned. (Phil.
determination by secret balloting, after due Federation of
deliberation (Labor Code, Art. 250[d]) Petroleum Workers v.
C1R, G.R. No. L-
Local Union Disaffiliates to Join New 26346, 1971)
Federation — Allowed
When the local union withdraws from the old (ii) SUBSTITUTIONARY DOCTRINE
federation to join a new federation, it is merely
exercising its primary right to self-organization for The employees cannot revoke the validly
the effective enhancement and protection of executed collective bargaining contract with their
common interests. In the absence of enforceable employer by the simple expedient of changing
provisions in the federation's constitution their bargaining agent. The new agent must
preventing disaffiliation of a local union, a local respect the contract. The employees, through their
may sever its relationship with its parent. (Tropical new bargaining agent, cannot renege on the
Hut Employees Union-CGW v. Tropical Hut, G.R. collective bargaining contract, except to negotiate
Nos. L-43495-99, 1990) with management for the shortening hereof.
(Azucena Vol. I, 7th ed., p. 209).
Note: A local union which has affiliated itself with
a federation is free to sever such affiliation anytime Effect of substitutionary doctrine on the
and such disaffiliation cannot be considered Deposed Union's Personal Undertakings
disloyalty. In the absence of specific provisions in In case of change of bargaining agent under the
the federation's constitution prohibiting substitutionary doctrine, the new bargaining agent
disaffiliation or the declaration of autonomy of a is not bound by the personal undertakings of the
local union, a local may dissociate with its parent deposed union like the "no strike, no lockout"
union (MSMG-UWP v. Ramos, G.R. 113907
clause in a CBA which is the personal undertaking
,2000)
of the bargaining agent which negotiated it.
Limitations to Disaffiliation
Disaffiliation should be in accordance with the
rules and procedures stated in the constitution and
by-laws of the federation. (see Cirtek Employees
Labor Union-FFW v. COW( Electronics, G.R. No.
190515, 2011)
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Summary of Principles: Affiliation / Role of Bargaining Unit

Disaffiliation The labor organization designated or selected by
1. A local union may affiliate or disaffiliate the majority of the employees in an appropriate
from federation collective bargaining unit shall be the exclusive
2. Affiliation and disaffiliation entails rights representative of the employees of such unit for
and obligations the purpose of collective bargaining. (Labor Code,
3. Affiliation or disaffiliation is a major issue Art. 267)
that can be decided only by a majority of
the members through secret balloting in a Right of Individual or Group to Present
formal meeting duly called for the purpose Grievances Not Impaired
4. Between the chapter and the federation, An individual employee or group of employees
affiliation or disaffiliation is a contractual shall have, the right at any time to present
relation. grievances to their employer.
5. An affiliation contract cannot absolutely
prohibit disaffiliation but may impose Any provision of law to the contrary
limitations or restrictions. It may specify notwithstanding, workers shall have the right, to
the number or proportion of votes needed, participate in the policy and decision-making
or the appropriate period to disaffiliate. processes of the establishment where they are
6. By affiliating or disaffiliating , the local employed insofar as said processes will directly
union does not dissolve itself nor does it affect their rights, benefits and welfare.
lose its standing as principal.
7. The local union, even a local chapter, For this purpose, workers and employers may
must be a legitimate labor organization — form labor-management councils: Provided, that
it must have been duly registered with the representatives of the workers in such labor-
DOLE, otherwise it is not entitled to the management councils shall be elected by at least
rights of an LLO the majority of all employees in said
establishment. (Labor Code, Art. 267)
B. BARGAINING UNIT
Note: In establishments where no legitimate labor
Bargaining Unit organization exists, the workers' representative
A group of employees sharing mutual interests shall be elected directly by the employees at large.
within a given employer unit, comprised of all or (Azucena Vol. I, 7th ed., p.458).
less than all of the entire body of employees in the
employer unit or any specific occupational or Test to determine the constituency of an
geographical grouping within such employer unit. appropriate bargaining unit
(D.0. No. 40-03, Sec. 1[d), Rule I, Book V) The law fixes no maximum or minimum number of
bargaining units. Union members come from the
Appropriate Bargaining Unit (ABU) CBU and several rival unions can come from the
A group of employees of a given employer CBU. The representative is the union, and the
comprised of all or less than all of the entire body group represented is the CBU.
of employees, which the collective interests of the
employees, consistent with the equity of the Fundamental Factors in Determining the
employer, indicate to be best suited to serve Appropriate Collective Bargaining Unit:
reciprocal rights and duties of the parties. (Belyca 1. Will of the Employees
Corp. v. CaIleja, G.R. No. 77395, 1988) 2. Substantial Mutual Interests
3. Prior Collective Bargaining History
4. Similarity of Employment Status
Out of these, the controlling test test of grouping is
mutuality or commonality of interest (San
Miguel Corporation v. Laguesma, G.R. 100485,
1994).
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Community of Interests Rule: States that the Geography and Location play a significant role
employees within an appropriate bargaining unit in determining community of interests if:
must have commonality of collective bargaining 1. The separation between the camps and
interests in the terms of employment and working the different kinds of work in each all
conditions as evidenced by the type of work they militate in favor of the system of separate
perform. (San Miguel Foods Inc. v. San Miguel bargaining units;
Corp. Supervisors and Exempt Union, G.R. No. 2. When the problems and interests of the
146206, 2011) workers are peculiar in each camp or
department;
ELEMENTS OF AN APPROPRIATE 3. The system of having one collective
BARGAINING UNIT bargaining unit in each camp has
All or less than all of the entire operated satisfactorily in the past.
COMPOSITION
body of employees (Benguet Consolidated v. Bobok
Of employees, i.e. the Lumberjack Association, G.R. No. L-
collective interest of 11029, 1958)
EQUITY
employees consistent with the
equity of the employer Prior Collective Bargaining History
To serve the reciprocal rights The existence of a prior collective bargaining
PURPOSE and duties of the parties under history is neither decisive nor conclusive in the
the CB provisions and with law determination of what constitutes an appropriate
bargaining unit. (National Association of Free
Factors in Determining Community of Interest Trade Unions v. Mainit Lumber Development
1. Similarity in the scale and manner of Company Workers Union, G.R. No. 79526, 1990)
determining earnings
2. Similarity in employment benefits, hours Single or "Employer Unit" Preferred
of work and other terms and conditions of General Rule: The proliferation of unions in an
employment employer unit is discouraged as a matter of policy
3. Similarity in the kinds of work performed unless there are compelling reasons which would
4. Similarity in the qualifications, skills and deny a certain class of employees the right to self-
training of the employees organization for purposes of collective bargaining.
5. Frequency of contact or interchange (Philtranco v. BLR, G.R. No. 85343, 1989)
among the employees
6. Geographic proximity Exceptions:
7. Continuity or integration of production 1. Supervisory employees who are allowed
process to form their own unions apart from the
8. Common supervision and determination rank-and-file employees;
of labor-relations policy 2. Where the employees exercise their right
9. History of collective bargaining to form unions or associations for purpose
10. Desires of the affected employees not contrary to law, to self-organization,
11. Extent of union organization (Azucena and to enter into collective bargaining
Vol. I, 7th ed., p. 461). negotiations (Barbizon Phil. v.
Nagkakaisang Supervisor ng Barbizon,
Globe doctrine: If units in one industry cannot be G.R. Nos. 113204-05, 1996)
determined, the employees can decide how to
organize themselves into units. The best way to Two Companies with Related Business
determine such preference is through referendum General Rule: Two corporations cannot be
or plebiscite. (Kapisanan ng Mga Manggagawa sa treated as a single bargaining unit even if their
Manila Road Co. v. Yard Crew Union, G.R. Nos. businesses are related. (Diatagon Labor
L-16292-94, 1960) Federation Local v. Ople, G.R. No. L-44493-94,
1980)
Exception: Application of Piercing Doctrine
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The cross-linking of the agencies command, management councils for the same
control, and communication systems indicate their purpose. In such case, its representatives
unitary corporate personality. Accordingly, the veil shall be elected by a majority of all
of corporate fiction should be lifted for the purpose employees in said establishment. (Labor
of allowing the employees of the three agencies to Code, Art. 267)
form a single labor union. (Philippine Scouts
Veterans v. Torres, G.R. No. 92357, 1993) Note: A bargaining unit is a group of employees
sought to be represented by a petitioning union.
Spin-Off Corporations Such employees need not be members of a union
In the case of subsidiaries or corporations formed seeking the conduct of a certification election. A
out of former divisions of a mother company union certified as an exclusive bargaining agent
represents not only its members but also other
following a bona fide reorganization, it is best to
employees who are not union members (Holy
have separate bargaining units for the different
Child Catholic School v. BHCCS-TELI-PIGLAS,
companies. (San Miguel v. Confesor, G.R. 11262, G.R. 179146,2013).
1996)
Creation of Labor Management and Other
Summary: Signification of Determining the Councils
Bargaining Unit The Department shall promote the formation of
1. In a Certification Election, the voters are labor-management councils in organized and
the whole bargaining unit, whether union unorganized councils.
or non-union members (Labor Code, Arts.
267); Purpose of the Labor-Management Councils
2. In a CBA Ratification, the voters are the To enable the workers to participate in policy and
whole bargaining unit, and not just the decision-making processes in the
union members (Labor Code, Art 237); establishment, insofar as said processes will
and directly affect their rights, benefits and welfare.
3. In Strike Voting, the voters are the
members of the union, not the whole Services to be rendered by the Department in
bargaining unit. (Labor Code, Art. 278[6) line with the said policy
1. Conduct awareness campaigns
C. BARGAINING REPRESENTATIVE 2. Assist the parties in setting up labor-
management structures, functions and
Selection/Designation of an exclusive procedures
bargaining representative 3. Provide process facilitators upon request
General Rule: The labor organization of the parties
designated/selected by the majority of the 4. Monitor the activities of labor-
employees in an ABU shall be the exclusive management structures as may be
bargaining representative of the employees in necessary and conduct studies on best
such unit for the purpose of collective bargaining. practices aimed at promoting harmonious
labor-management relations.
Exceptions:
1. An individual employee or group of SELECTION OF EMPLOYEES'
employees shall have the right at any time REPRESENTATIVES TO THE COUNCIL
to present grievances to their exclusive NO LEGITIMATE
bargaining representative. ORGANIZED
LABOR
2. Any provision of law to the contrary ESTABLISHMENT
ORGANIZATION
notwithstanding, workers shall have the Nominated by the
right to participate in policy and decision- By the employees at
exclusive bargaining
making processes of the establishment large.
representatives
where they are employed insofar as said
processes will directly affect their rights,
benefits and welfare. Workers and
employees may also form labor
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1. Determination of representation status 1. Determine whether the request is

a. SEBA (Sole and Exclusive compliant with the rules and whether the
Bargaining Agent) Certification bargaining unit sought to be represented
b. Certification Election is organized or not
c. Run-Off Election Request a copy of the payroll for purposes
d. Re-run Elections of SEBA certification
e. Consent Election
If he/she finds it deficient, the Regional Director
a. SEBA CERTIFICATION shall advise the requesting union or local to
comply within 10 days from notice. Failure to
Voluntary recognition was repealed and replaced comply is deemed a withdrawal of the request.
by a Request for the Sole and Exclusive
Bargaining Agent Certification (D.O. No. 40-1-15 REQUEST FOR CERTIFICATION
Series of 2015) UNORGANIZED
UNORGANIZED
_ ESTABLISHMENT
ESTABLISHMENT
SEBA Certification may be issued if it is proved , WITH ONLY 1
WITH MORE
that the following concur: '• LEGITIMATE LABOR
THAN 1 LLO
1. The bargaining unit is ununionized; ORGANIZATION (LLO)
2. The requesting union is the only union in that The RD shall call a
bargaining unit; and conference within 5 work
3. The CBU majority are members of the union days for the submission
of the following:
Requesting Union 1. The names of the
Any legitimate labor organization employees in the
covered bargaining
Where to File unit who support the
Regional Office which issued the legitimate labor certification, provided
organization's certificate of registration or that said employees
certificate of creation of chartered local. comprise at least
majority of the
for Request of SEBA The RD shall refer
Requirements number of employees
the same to the
Certification: The request shall indicate: in the covered
Election Officer for
1. The name and address of the requesting bargaining unit; and
the conduct of a
legitimate labor organization 2. Certification under
Certification
2. The name and address of the company oath by the president
Election.
where it operates of the requesting
3. The bargaining unit sought to be union or local that all
represented documents submitted
4. The approximate number of employees in are true and correct
the bargaining unit; and based on his/her
5. The statement of the existence/non- personal knowledge.
existence of other labor organization/CBA
If the RD finds the
The certificate of registration or certification of requirements complete,
creation as duly certified by the president of the he/she shall issue during
requesting union or of the federation of the local, the conference a
respectively, shall be attached to the request. certification as SEBA.
Action on the Request Request for Certification In Organized

Within 1 day from the submission of the request, Establishment
the Regional Director shall: If the RD finds the establishment organized,
he/she shall refer the same to the Mediator-Arbiter
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for the determination of the propriety of conducting Association (PALEA) v. Ferrer-Calleja, G.R. No.
a certification election. 76673, 1988)
Effects of Certification Issues Involved in a Certification Election

1. Upon the issuance of the certification as 1. Proper composition and constituency of the
SEBA, the certified union or local shall bargaining unit; and
enjoy the rights and privileges of an 2. Veracity of membership claims of the
exclusive bargaining agent of all the competing unions so as to identify the union
employees in the covered bargaining unit. that will serve as the bargaining representative
2. The certification shall bar the filing of a of the entire bargaining unit
petition for certification by any labor
organization for a period of 1 year from the Note: The questions to be resolved in a
date of its issuance. Upon expiration of Certification Election:
this 1-year period, any legitimate labor 1. Whether the employees what to be
organization may file a petition for represented
certification election in the same 2. By whom should they be represented
bargaining unit represented by the
certified labor organization, unless a CBA Pending Petition for Cancellation of
between the employer and the certified Registration is not a Bar for a Certification
labor organization was executed and Election
registered with the Regional Officer in An order to hold a certification election is proper
despite the pendency of the petition for
accordance with Rule XVII of this rules.
cancellation of the registration certificate of the
(D.O. 40-1-15)
respondent union because at that time the union
filed its petition, it still had the legal personality to
a. CERTIFICATION ELECTION perform such act absent an order directing the
Process of determining through secret ballot the cancellation (Legend International Resorts Limited
sole and exclusive bargaining agent of the v. Kilusang Manggagawa ng Legenda, G.R.
employees in an appropriate bargaining unit for 169754, 2006).
purposes of collective bargaining or negotiations.
Conducted by Med-Arbiter of the Bureau of Labor Certification
Union Election
Relations of the DOLE. (IRR Labor Code, Sec. - Election -
114, Rule I, Book V) To determine the
exclusive bargaining To elect union officers
Purpose agent
The ascertainment of the wishes of the majority of All members of the
the employees in the appropriate bargaining unit: appropriate Only union members
to be or not to be represented by a labor bargaining unit may may vote
organization, and in the affirmative case, by which vote
particular labor organization. (Reyes v. Trajano,
G.R. No. 84433, 1992) Note: The process in certification elections
depends upon whether the establishment is
Whenever there is doubt as to whether a particular organized or unorganized. The general flow
union represents the majority of the rank-and-file remains the same, but there are some differences,
employees, in the absence of a legal impediment, as will be discussed below.
the holding of a certification election is the most
democratic method of determining the employees' . IN AN UNORGANIZED ESTABLISHMENT
choice of their bargaining representative. It is the
appropriate means whereby controversies and Unorganized establishment: an establishment
disputes on representation may be laid to rest, by without a bargaining representative.
the unequivocal vote of the employees
themselves. (Philippine Airlines Employees' Who May File
Any legitimate labor organization including
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1. A national union or federation which has Requisites for holding a certification election
already issued a charter certificate to its in an organized establishment (Labor Code,
local/chapter participating in the Art. 268):
certification election or a local/chapter 1. The Med-Arbiter shall automatically order
which has been issued a charter an election by secret ballot when
certificate by the national union or 2. Verified petition supported by at least 25%
federation. (Labor Code, Art. 269) of all the employees in the bargaining unit,
2. An employer may file a Petition for questioning the majority status of the
Certification Election when: incumbent bargaining agent.
a. Requested to bargain collectively; 3. Filed before the DOLE within the 60-day
and period before the expiration of the five
b. No bargaining agent nor a year representation aspect of the CBA
registered CBA exists in the unit.
(Labor Code, Art. 270) Note: The requisite written consent of at least 20%
(now 25%) of the workers in the bargaining unit
Requisites for holding a certification election applies to certification election only, and not to
in an unorganized establishment (Labor Code, motions for intervention. (PAFLU v. Calleja, G.R.
Art. 269) No. 79347, 1989)
Once a petition is filed by a legitimate labor When to file
organization, the Med-Arbiter shall automatically The proper time to file a petition for C.E. depends
order the conduct of a certification election. on whether the bargaining unit has a CBA or not.
When to File If it has no CBA, the petition may be filed anytime

Any time, except within 12 months of a previous except within 12 months of a previous election (if
election (if any). any).
IN AN ORGANIZED ESTABLISHMENT If the bargaining unit has a CBA, the petition can
be filed only within the "freedom period" which is
Organized establishment: an establishment with the last 60 days of the 5th year of the CBA.
a duly certified bargaining agent and/or an existing
CBA.
Who May File

Any legitimate labor organization, including
1. A national union or federation which has
already issued a charter certificate to its
local chapter participating in the
certification election. (Labor Code, Art.
268) (National union or federation shall
not be required to disclose the names of
the local/chapter's officers and members,
but shall attach to the petition the charter
certificate it issued to its local/chapter
Sec. 1, Rule VIII of D. 0. 40-1-15)
2. A local chapter which has been issued a
charter certificate by the national union or
federation before the DOLE within the 60-
day freedom period. (Labor Code, Art.
268)
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Comparison of Organized v. Unorganized Regional Office, the same shall be

establishments automatically consolidated with the Med-
Arbiter who first acquires jurisdiction.
'ART. 268 ART. 269 .
2. Where the petitions are filed in different
ORGANIZED UN-ORGANIZED
Regional Offices, the Regional office in
PAFZGArNING AGENT which the petition was first filed shall
Existing None exclude all others; in which case, the latter
' '-FREED'OM'PERIOD - shall endorse the petition to the former for
Not applicable. Can consolidation.
No petition for 3. At the option of the petitioner, a PCE and
file petition anytime,
certification except its supporting document may also be filed
except within 12
within the 60-day ONLINE. (DO No. 40-1-15)
months of a previous
freedom period The Regional Director or his/her authorized
election (if any).
stINTANTIAI, q01T. T.54E' personnel shall be responsible for the posting of
Must be duly the Notice of Petition for Certification Election.
supported by 25% of
Substantial support Employer as bystander
all the members of the
rule not applicable IN ALL CASES (including when petition for
appropriate bargaining
unit certification is filed by employer), the employer's
GRANT OF PETITION FOR CERT. participation shall be limited to:
ELECTION 1. Being notified or informed of petitions of
Appealable Not Appealable such nature; and
(Protest may be filed) 2. Submitting the list of employees during
the pre-election conference should the
REQUIREMENTS FOR VALID CERTIFICATION Med-Arbiter act favorably on the petition.
ELECTION (Labor Code, Art. 271)
1. The union should be legitimate which
means that it is duly registered and listed However, manifestation of facts that would aid
in the registry of legitimate labor unions of the Med-Arbiter in expeditiously resolving the
the BLR or that its legal personality has petition may be considered (i.e. existence of bars).
not been revoked or cancelled with (D. O. No. 40-1-15)
finality.
2. In case of organized establishments, the Note:
petition for certification election is filed An employer has no legal standing in a certification
during (and not before or after) the 60- election. He cannot oppose the petition or appeal
day freedom period of a duly registered the Med-Arbiter's orders related thereto. (San
CBA. Miguel Foods Inc.-Cebu B-Meg Feed Plant v.
Laguesma, G.R. No. 116172, 1996)
In case of organized establishments, the
petition complied with the 25% written
An employee has the right to intervene for the
support of the members of the
protection of his individual right. (D.O. No. 40-F-
bargaining unit.
03)
4. The petition is filed not in violation of any
of the three (3) bar rules. Probationary employees can vote in a
certification/consent election. All employees in the
COMMON REQUISITES appropriate bargaining unit, whether probationary
or permanent are entitled to vote. (National Union
Where to file the PCE of Workers In Hotels, Restaurant and Allied
With the Regional Office which issued the Industries-Manila Pavilion Hotel Chapter v.
petitioning union's certificate of registration or Secretary of Labor, 2009)
certificate of creation of chartered local.
1. Where two/more petitions involving the
same bargaining unit are filed in one
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Grounds for Denying Petition (R.A. 9481; D.O. extension or renewal of the collective
No. 40-F-03) (ALCEC-YDS) bargaining agreement; (Contract Bar)
1. If the petitioner union does not Appear in
two successive conferences called by the 6. The petition was filed within 1 year from
Med-Arbiter, upon showing that the entry of voluntary recognition or a valid
petitioner was duly notified.(Non- certification, consent or run-off election
Appearance) and no appeal on the results of the
2. The petitioner is not Listed in the certification, consent or run-off election is
Department's registry of legitimate labor pending; (1-Year Bar/Certification Year
unions or that its legal personality has Bar)
been revoked or cancelled with finality.
(Illegitimacy— Unregistered Union) 7. A duly certified union has commenced'
and sustained negotiations with the
The filing or pendency of any inter/intra-union employer or there exists a bargaining
dispute and other related labor relations deadlock which had been submitted to
dispute is not a prejudicial question to any conciliation or arbitration or had become
petition for certification and shall not be a the subject of a valid notice of strike or
ground for the dismissal of a petition for lockout to which an incumbent or certified
certification election or suspension of bargaining agent is a party; (Negotiation
proceedings for certification election. (D.O. Bar/Deadlock Bar)
No. 40-03, as amended by D. 0. No. 40-F-03,
Sec. 2, Rule XI) 8. In case of an organized establishment,
failure to submit the 25% Support
Certification election may be ordered despite requirement for the filing of the petition for
the pendency of a ULP charge against a union certification election. (Lack of Support)
filed by the employer (Barrera v. CIR, G.R. No.
L-32853, 1981) or the pendency of a petition A certification may be called by the Med-Arbiter
to cancel the union's registration certificate even through the 25% support requirement has
based on an alleged illegal strike by the union. not been complied with. The requirement is
(National Union ofBank Employees v. Minister relevant only when it becomes mandatory to
of Labor, G.R. No. L-53406, 1981) conduct a certification election. In all other
instances, the discretion ought to be exercised
3. Failure of a local/chapter or national union in favor of a petition for certification election.
or federation to submit a duly issued (California Manufacturing Corp., v. Usec of
Charter Certificate upon filing of the Labor, G.R. No. 97020, 1992)
petition for certification election.
(Illegitimacy— No Charter) In Summary, the Grounds for Denying Petition
for Certification Election:
4. Absence of an Employment relationship 1. Non-Appearance
between all the members of the petitioning 2. Illegitimacy — Unregistered Union
union and the establishment where the 3. Illegitimacy — No Charter
proposed bargaining unit is sought to be 4. No Employee-Employer Relationship
represented. (Absence of EER 5. Contract Bar
Relationship) 6. 1-Year Bar/Certification Year Bar
7. Negotiation/Deadlock Bar
8. Lack of Support
5. The petition was filed before or after the
freedom period of a duly registered
RULES PROHIBITING THE FILING OF
collective bargaining agreement; provided
PCE/BARS TO CERTIFICATION ELECTION
that the 60-day period based on the
1. Contract Bar Rule
original collective bargaining agreement
2. Negotiation or Deadlock Bar Rule
shall not be affected by any amendment,
3. One-year or Certification Year Bar Rule
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1. CONTRACT BAR RULE election (Vassar Industries EU v. Estrella,

General Rule: The representation status of the G.R. No. L-46562, 1978)
incumbent exclusive bargaining agent which is a 7. CBA was concluded in violation of an order
party to a duly registered CBA shall be for a term enjoining the parties from entering into a CBA
of five (5) years from the date of effectivity of of the until the issue of representation is resolved
CBA. No petition questioning the majority status 8. Referendum to register an independent union
of the incumbent exclusive bargaining agent or
petition for certification election shall be filed (Sec. 2. NEGOTIATION OR DEADLOCK BAR RULE
7, Rule XVII of D. 0. 40-03).
Deadlock arises when there is an impasse, which
Exception: (Freedom period) Arts. 264, 265, 268: presupposes reasonable effort at good faith
Within 60 days before expiration of the 5-yr term bargaining which, despite noble intentions, did not
of the representational aspect of the CBA. conclude in an agreement between the parties.
Note: This freedom period is different from the Genuine Deadlock

sixty day period within which to start negotiations 1. The submission of the deadlock to a 3rd
for a new CBA. party conciliator or arbitrator; or
2. The deadlock is the subject of a valid
Requisites for Contract-Bar Rule notice of strike or lockout (National
1. Agreement is existing; Congress of Unions in the Sugar Industry
2. Ratified by the union membership; v. Trajano, G.R. No. 67485, 1992)
3. It is adequate for it contains substantial terms
and conditions for employment; Petition for certification election cannot be
4. It encompasses the employees in the entertained if:
appropriate bargaining unit; 1. A duly certified union has commenced
5. It was not prematurely extended; the CBA was and sustained negotiations with the
not hastily entered into; employer in accordance with Art. 261
6. It is for a definite period; within the 1-year period referred to in Sec.
7. No schism or mass disaffiliation affects the 14.d of the IRR.
contracting union during the lifetime of the 2. Before the filing of the petition for
agreement; certification election, a bargaining
8. The contracting union is not defunct; and deadlock to which an incumbent or
9. The contracting union is not company- certified bargaining agent is a party, had
dominated been submitted to conciliation or
arbitration or had become the subject of a
Exceptions to the Application of the Contract- valid notice of strike or lockout.
Bar Rule
The existence of a CBA will not bar certification Requisites:
election in the following instances: 1. Parties must have negotiated in good faith
1. CBA is not registered 2. Deadlock must have been submitted to
2. CBA deregistered voluntary conciliation or arbitration or is
3. CBA is incomplete in itself subject of a valid notice of strike / lock-out.
4. CBA where the identity of the representative is
in doubt (Associated Labor Unions v. Hon. When Deadlock Bar Not Applicable: Artificial
Ferrer-Calleja, G.R. No. 85085, 1989) Deadlock
5. CBA was hastily entered into, i.e. signed A deadlock prearranged or preserved by collusion
before the freedom period (Associated Trade of the employer and the majority union. (See
Unions-ATU v. Hon. None!, G.R. No. L-48367, Kaisahan ng Manggagawang Pilipino (KAMPIL-
1979) KATIPUNAN) v. Trajano, G.R. No. 758110, 1991)
6. CBA entered into between the employer and
the union during the pendency for certification
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3. ONE-YEAR BAR RULE OR CERTIFICATION 2. A failure of election where less than

YEAR BAR RULE majority of the CBU members voted. A
failure of election shall not bar the filing of
No petition for a certification election may be filed a motion for the immediate holding of
within 1 year from the date of a valid certification, another certification or consent election
consent, or run-off election, or from the date of may be filed within 6 months from date of
entry of a voluntary recognition of the union by the declaration of the failure of election. (D. O.
employer. No. 40-03, Sec. 18, Rule IX)
Certification year rule will apply even if the "No PROTESTS/APPEAL AND OTHER QUESTIONS
union" choice won. Therefore, for one year, no ARISING FROM CONDUCT OF
PCE will be entertained (Samahang Manggagawa CERTIFICATION ELECTION
sa Permex v. Secretary, G.R. No. 107792, 1998) The order granting the conduct of a certification
election in an unorganized establishment shall
Note: The 12 month prohibition presupposes that not be subject to appeal. Any issue arising
there was an actual conduct of election, i.e. ballots therefrom may be raised by means of protest on
were cast and there was a counting of votes. In a the conduct and results of the certification
case where there was no certification election election.
conducted precisely because the first petition was
dismissed on the ground that it did not include all The order granting the conduct of a certification
the employees who should be properly included in election in an organized establishment and the
the collective bargaining unit, the certification year decision dismissing or denying the petition,
bar does not apply. (R Transport Corp. v. whether in an organized or unorganized
Laguesma, G.R. No. 106830, 1993) establishment, may be appealed to the Office of
the Secretary within 10 days from receipt thereof.
Date of election (Sec. 17, Rule VIII of D.O. 40-03).
Date to be considered is when the election was
conducted; if results are appealed, then the date PROTEST (Sec. 13, Rule IX, Book V)
when appeal is finally resolved. Who may file: Any party-in-interest
Ground: On the conduct or mechanics of election
Where less than majority of CBU voted
There is a failure of election when less than How to protest:
majority of the CBU members voted. A failure of 1. Record the protest in the minutes of the
election shall not bar the filing of a motion for the election proceedings; AND
immediate holding of another certification or 2. Formalize the protest with specific
consent election may be filed within 6 months from grounds, arguments before the Med-
date of declaration of the failure of election. (D.O. Arbiter within five (5) days after the close
No. 40-03, Sec. 18, Rule IX) of the election proceedings
Note: The last sentence pertains to the re-run Protests deemed dropped
election as provided under D.O. No. 40-1-15. Protests which are:
1. Not recorded in the minutes; AND
When Certification Year Bar Rule will NOT 2. Formalized within the prescribed period
APPLY
1. In a case where there was no certification General Reservation to file protest prohibited
election conducted precisely because the Protesting party shall specify the grounds.
first petition was dismissed on the ground
that it did not include all the employees Failure to formalize within 5-days cannot be
who should be properly included in the taken against the union.
collective bargaining unit. (R Transport The union misrepresented that they were
Corp. v. Laguesma, G.R. No. 106830, independent which caused the members to
1993)
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disaffiliate and form a new union and their protest When parties fail to agree to a consent election
was not filed within the 5-day period. during the preliminary conference, hearing/s will
be conducted.
The failure to follow strictly the procedural
technicalities regarding the period for filing their Number of Hearings
protest (within the 5-day period) should not be The Med-Arbiter may conduct as many hearings
taken against them. Mere technicalities should not as he/she may deem necessary, but in no case
be allowed to prevail over the welfare of the shall the conduct thereof exceed 15 days from the
workers. What is essential is that they be accorded date of the scheduled preliminary
an opportunity to determine freely and intelligently conference/hearing, after which time the petition
which labor organization shall act on their behalf. shall be considered submitted for decision (Sec.
(DHL-URFA-FFW v. BMP G.R. No. 152094 2004) 11, Rule VIII of D.O. 40-03)
•
ELECTION PROCEEDINGS refer to the period Failure to Appear Despite Notice
Included: Failure of any party to appear in the hearing/s
1. Starting from the opening to the closing of when notified or to file its pleadings shall be
the polls deemed a waiver of its right to be hear. (Sec. 12
2. Counting, tabulation and consolidation of Rule VIII of D.O. 40-03)
votes
Note: See diagram in the suceeding pages.
Excluded:
1. Period for the final determination of the 2. ORDER/DECISION ON THE PETITION
challenged votes Within 10 days from the date of the last hearing,
2. Canvass the Med-Arbiter shall issue a formal order granting
(Sec. lip], Rule I of D.O. 40-03). or denying the petition.
ELECTION MECHANICS (Rule VIII of D.O. 40- In organized establishments, no order or

03). decision shall be issued during the freedom
period.
1. RAFFLE OF THE CASE
Upon the filing of the petition, the Regional The order granting the petition shall state the
Director or any of his/her authorized following:
representative shall allow the party filing the 1. Name of the employer or establishment
petition to personally determine the Med- 2. Description of the bargaining unit
3. Statement that none of the grounds for
Arbiter assigned to the case by means of a
dismissal exists
raffle (Sec. 5, Rule VIII of D.O. 40-03).
4. Names of contending labor unions
5. Directive to an unregistered local/chapter
or a federation/national union representing
2. PRELIMINARY CONFERENCE an unregistered local/chapter to personally
The Med-Arbiter shall conduct a preliminary submit to the Election Officer its certificate
conference and hearing within 10 days from the of creation at least 5 working days before
receipt of the petition to determine the following: the actual conduct of the certification
1. The bargaining unit to be represented; election. Non-submission of this
2. Contending Labor Unions; requirement as certified by the Election
3. Possibility of labor unions consent Officer shall disqualify the local/chapter
elections; from participating in the certification
4. Existence of any of the bars to certification election
election; and 6. Directive upon the employer and the
5. Such other matters as may be relevant for contending union(s) to submit within 10
the final disposition of the case. (Sec. 9 days from receipt of the order, the certified
Rule VIII of D.O. 40-03). list of employees in the bargaining unit, or
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where necessary, the payrolls covering

the members of the bargaining unit of at 4. PRE-ELECTION CONFERENCE
least 3 months prior to the issuance of the Within 24 hours from receipt of the assignment for
order (Sec. 13 Rule VIII of D.O. 40-03). the conduct of a certification election, the Election
Officer shall cause the issuance of notice of pre-
Grounds for Denial of the Petition for election conference upon the contending unions
Certification Election: and the employer.
1. Petitioner is not listed as a LLO or its legal
personality has been revoked Must be scheduled within 10 days from receipt of
2. Petition was filed outside of the freedom the assignment.
period
3. Petition was filed within one (1) ear Must be completed within 30 days from the last
from entry of valid hearing.
certification/consent or run off election
AND no appeal on the results of the The employer shall be required to submit the
election is pending certified list of employees in the bargaining unit, or
4. Petition was filed in violation of the where necessary, the payrolls covering the
negotiation/deadlock bar rule or had members of the bargaining unit at the time of the
become the subject of a valid notice of filing of the petition.
strike or lockout to which an Importance: The pre-election conference shall
incumbent or CBA is a party set the mechanics for the election and determine
5. In case of organized establishment, the following:
failure to submit the twenty-five 1. Date, time arid place of the election
percent (25%) support requirement 2. Not be later than 45 days from the date of
(Sec. 14,Rule VIII of D.O. 40-03) the first pre-election conference
3. On a regular working day
Prohibited Grounds for Denial of Petition 4. Within the employer's premises, unless
The following must be heard and resolved by the circumstances require otherwise
Regional Director in an independent petition for 5. List of eligible and challenged voters
cancellation of registration: 6. Number and location of polling places or
1. Validity of petitioning union's certificate of booths and the number of ballots to be
registration or its legal personality as a prepared with appropriate translations, if
labor organization necessary
2. Validity of registration and execution of 7. Name of watchers or representatives and
CBA their alternates for each of the parties
during election
The following issues shall be raised before the 8. Mechanics and guidelines of the election
Med-Arbiter during the hearing and in the (Sec. 2, Rule IX of D.O. 40-03)
pleadings in the petition for certification election
and shall be resolved in the same order Effect of failure to appear during the pre-
1. Existence of Employer-Employee election conference
relationship 1. Considered as a waiver to be present and
2. Eligibility or mixture in union membership to question or object to any of the
(Sec. 14 Rule VIII of D.O. 40-03) agreements reached in said pre-election
conference.
2. However, the non-appearing party or the
3. APPEAL employer still has the right to be furnished
Order granting conduct of certification election in notices of subsequent pre-election
unorganized establishments — NOT appealable conferences and to attend the same (Sec.
3, Rule IX of D.O. 40-03).
All others — appealable to the DOLE Sec. within 10
days from receipt.
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Qualification of Voters
1. All employees who are members of the No device that could record or identify the voter or
appropriate bargaining unit 3 MONTHS otherwise undermine the secrecy and sanctity of
PRIOR to the filing of the petition/request the ballot shall be allowed within the premises,
shall be eligible to vote. except those devices brought in by the election
2. An employee who has been dismissed officer.
from work but has contested the legality of
the dismissal in a forum of appropriate Any other device found within the premises shall
jurisdiction at the time of the issuance of be confiscated by the election officer and
the order for the conduct of a certification returned to its owner after the conduct of the
election shall be considered a qualified certification election. (Sec. 12, Rule IX of D.O.
voter UNLESS his/her dismissal was 40-1-15)
declared valid in a final judgment at the
time of the conduct of the certification Preparation of Ballots
election (Sec. 6, Rule IX of D. 0. 40-1- The Election Officer shall prepare the ballots in
15). English and Filipino or the local dialect
Inclusion/Exclusion of Voters The number of ballots should correspond to the

In case of disagreement over the voters' list or number of voters in the bargaining unit plus a
over the eligibility of voters, all contested voters reasonable number of extra ballots for
shall be allowed to vote, but their votes shall be contingencies.
segregated and sealed in individual envelopes
with their names. All ballots shall be signed at the back by the
Election Officer and an authorized representative
each of the contending unions.
5. POSTING OF NOTICES OF ELECTION
At least 10 days before the actual date of the A party who refuses or fails to sign the ballots
election in 2 most conspicuous places in the waives its right to do so and the Election Officer
company premises • shall enter the fact of refusal or failure and the
reason therefore in the records of the case(Sec.
Contents of the Notice 8, Rule IX of D. 0. 40-03).
1. Date and time of the election, which is
preferably within the establishment Challenging of Votes
2. Names of all contending unions An authorized representative of any of the
3. The description of the bargaining unit and contending unions and employer may challenge
the list of eligible and challenged voters the vote.
The posting of the list of employees comprising Challenge must be raised before vote is deposited
the bargaining unit shall be done by the DOLE in the ballot box.
personnel.
Note: The posting of the notice of election, the Grounds for Challenging Votes
information required to be included therein and the 1. No employer-employee relationship
duration of posting cannot be waived by the between the voter and the company
contending unions or the employer (Sec. 11, 2. Voter is not a member of the appropriate
Rule IX of D.O. 40-1-15). bargaining unit which petitioner seeks to
represent (Sec. 10, Rule IX of D.O. 40-
Secrecy and Sanctity of the Ballot 03)
The Election Officer and the authorized
representatives of the contending unions shall Procedure in Challenging of Votes
before the start of the actual voting, inspect the 1. The Election Officer shall place the ballot
polling place, the ballot boxes and the polling of the voter who has been properly
booths.
PAGE 105 OF 244
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challenged during the pre-election Canvassing of Votes

conferences in an envelope. 1. Counted and tabulated by the Election
a. Sealed in the presence of the Officer in the presence of the
voter and the representatives of representatives of the contending unions.
the contending unions and 2. Each representative is entitled to a copy
employer. of the minutes of the election proceedings
b. Indicate on the envelope the and results of the election.
voter's name, the union or 3. The ballots and the tally sheets shall be:
employer challenging the voter, a. Sealed in an envelope
and the ground for the challenge. b. Signed by the Election Officer and
c. Envelope shall be signed by the the representatives of the
Election Officer and the contending unions
representatives of the contending c. Transmitted to the Med-Arbiter,
unions and employer. together with the minutes and
2. The Election Officer shall note all results of the election, within 24
challenges in the minutes of the election hours from the completion of the
proceedings and shall have custody of all canvass
envelopes containing the challenged 4. Where the election is conducted in more
votes. than one region, consolidation of results
3. The envelopes shall be opened and the shall be made within 15 days from the
question of eligibility shall be passed upon conduct thereof (Sec. 14, Rule IX of
by the mediator-arbiter only if the number D. 0. 40-03).
of segregated voters will materially alter.
the results of the election (Sec. 11, Rule 6. CONDUCT OF ELECTION AND CANVASS OF
IX of D.O. 40-03) VOTES
1. The election precincts shall open and
Protest close on the date and time agreed upon
Any party-in-interest may file a protest based on during the pre-election conference.
the conduct or mechanics of the election. 2. The opening and canvass shall proceed
immediately after the precincts have
Protests not so raised immediately after the last closed
ballot cast are deemed waived. 3. Failure of any party or the employer or
his/her/their representative to appear
General Reservation to file a protest shall be during the election proceedings shall be
prohibited. The protesting party shall specify the considered a waiver to be present and to
grounds for protest. question the conduct thereof (Sec. 15,
Rule IX of D.O. 40-03).
Requirements in order that a protest may
prosper: Double Majority Rule
1. Filed with the representation officer and For there to be a valid certification election:
made of record in the minutes of the 1. Majority of the bargaining unit must have
proceedings before the close of election voted; AND
proceedings; and 2. The winning union must have garnered
2. Formalized before the Med-Arbiter within majority of the valid votes cast. (National
5 days after the close of the election Union of Workers In Hotels, Restaurant
proceedings. and Allied Industries-Manila Pavilion Hotel
3. If not recorded in the minutes and Chapter v. Secretary of Labor, G.R. No.
formalized within the prescribed period, 181531, 2009)
the protest shall be deemed dropped
(Sec. 14, Rule IX of D. 0. 40-1-15). Note: Spoiled ballots are not reckoned to
determine majority (PAFLU v. BLR, G.R. No. L-
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43760, 1976) Valid votes are those not

challenged, damaged, etc.
7. CERTIFICATION OF COLLECTIVE
BARGAINING AGENT
The union which obtained a majority of the valid
votes cast shall be certified as the sole and
exclusive bargaining agent of all the employees in
the appropriate bargaining unit.
Certification must be done within five days from

the day of election provided there was no protest.
When the winning choice is a local chapter

without a certificate of creation of chartered
local
The local chapter shall submit its DOLE issued
certificate of creation within five (5) days from the
conclusion of election (Sec. 15, Rule IX of D. 0.
40-1-15)
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FILING PETITION FOR CERTIFICATION ELECTION
File PETITION for

certification election
RAFFLE
Dispensed with if there is only one
Med-Arbiter
Service of NOTICE of
preliminary conference
PRELIMINARY CONFERENCE
Must be within 10 days from receipt of
petition for certification election
Parties AGREE on a Parties FAIL TO AGREE

consent election on a consent election
FORWARD RECORDS of HEARINGS

No set #, but must not exceed 15
petition to RD / authorized
days from date of preliminary
representative
DECISION
First PRE-ELECTION Must be within 10 days from last
CONFERENCE hearing
Must be within 10 days from date of
entry of agreement
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APPEAL OF DECISIONS RE: GRANTING / DENYING CONDUCT OF CERTIFICATION ELECTION
DECISION
UNORGANIZED ORGANIZED
Establishment Establishment
Petition Petition Petition Petition

GRANTED DENIED GRANTED DENIED
Unappealable
I
File MEMORANDUM OF APPEAL within 10 days from
receipt of decision with the REGIONAL DIRECTOR where
the petition originated
1
REGIONAL DIRECTOR to transmit entire record within 24
hours from receipt of appeal to OFFICE OF THE
SECRETARY OF LABOR
REPLY
Any party may file a reply within 10 days from receipt of the
Memorandum of Appeal
Decision of the SECRETARY OF LABOR
Secretary shall have 15 days from receipt of the entire records

to decide the appeal
The decision shall be final and executory
within 10 days from receipt by the parties
No motion for reconsideration shall be entertained
The entire records of the case shall be remanded to the
Regional Office for implementation
within 48 hours from notice of receipt of the decision
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CERTIFICATION ELECTION PROPER
RECEIPT OF ENTRY OF FINAL JUDGMENT granting conduct of a Certification Election
Jr
Regional Director to cause the RAFFLE of the case to an ELECTION OFFICER
within 24 hours from receipt of notice
Jr
Election Officer to cause issuance of NOTICE OF PRE-ELECTION CONFERENCE upon
contending unions and employer w/in 24 hours from receipt of assignment
Posting of notices must be done at least 10 days before election,
in 2 most conspicuous places in the company premises
Jr
PRE-ELECTION CONFERENCE
Must be within 10 days from receipt of assignment, and completed within 3 days of first hearing
Failure to appear in pre-election conference is a waiver of the right to question any agreement in
pre-election conference. However, the non-appearing party retains the right to be given notices of
subsequent pre-election conferences.
Jr
CERTIFICATION ELECTION
Must not be later than 45 days from date of first pre-election conference
Jr
ELECTION PRECINCTS CLOSE
On the date and time agreed upon during the pre-election conference
Jr
CANVASS OF VOTES
Opening and canvassing of votes shall begin immediately after the precincts have closed
NOTE: FAILURE OF ELECTIONS

Exists when the votes cast is less than the majority of eligible voters, and there are no material challenged votes.
Another certification or consent election may be held within 6 months.
TRANSMIT RECORDS OF CASE to MED-ARBITER. MED-ARBITER to issue an order

PROCLAIMING THE RESULTS of the Certification Election.
Any of the following conditions must have been present:
[1] No protest was filed, or protest filed but not perfected within the 5-day period for perfection of protest
[2] No challenge or eligibility issue raised, or even if raised, will not materially charge results of elections
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c. RUN-OFF ELECTIONS Example 1: 100 members in the appropriate

An election between the labor unions receiving bargaining unit. All members cast their votes.
the two (2) highest number of votes in a
certification or consent election with three (3) or Election results:
more choices, where such results in none of the Union A —24 Union C - 10
choices (unions or "no union" choice) receiving a Union B —15 No Union - 5
majority of the valid votes cast.
Total number of votes: 54 valid votes, with the
Provided, that the total number of votes for all rest declared illegal or stray.
contending union is at least fifty (50%) of the
number of votes cast (Sec. 1[ss], Rule I of D. O. Q1: Is the election valid?
40-03) Yes, because everyone voted.
Procedure in Run-off Elections Q2: Who won?

The Election Officer shall motu propio conduct a None of the three unions won, because not one
run-off election within 10 days from the close of received a majority of the valid votes cast.
the election proceedings between the labor (Majority is 28 votes)
unions receiving the two highest numbers of
votes. Q3: Is run-off election a remedy here?
No. The total number of votes for all contending
Notice of run-off elections shall be posted by the unions is LESS than 50% of ALL of the number of
Election Officer at least 5 days before the actual votes cast (Unions A, B and C garnered 49 votes,
date of-run-oft election. or at least one vote short of the requirement,
since there are 100 members in the ABU).
Requirements for Run-Off election
1. A valid election took place because Q4: Is a re-run election a remedy here?
majority of the CBU members voted No. There is no failure of election and none of the
2. There are three or more choices in the choices obtained the same number of votes.
election (including no union) (D.O. No. 40-1-15)
3. Not one of the choices obtained majority
'of the valid votes Example 2: 200 members in the appropriate
4. Total number of votes for all contending bargaining unit. All members cast their votes.
unions is at least 50% of the number of
votes cast. Election results:
5. There is no unresolved challenge of voter Union A — 40
or election protest Union B — 30
Union C -20
Note: "No Union" shall not be a choice in the run- No Union — 80
off election (Sec. 1, Rule X of D.O. 40-03) Spoiled —30
Abstention refers to a blank or unfilled ballot Total number of votes: 170 valid votes, with 30
validly cast by an eligible voter. It is not spoiled votes.
considered as a negative vote but is considered
a valid vote in determining a valid election. (Sec. Step 1: Check for first majority: WoN there was a
l[a], Rule 1, D.O. No. 40-1-15). Valid Election -› 50% +1 of the Bargaining Unit
Step 2: Check for second majority: WoN a
Spoiled Ballot refers to a ballot tha tis torn, union/no union won the majority of valid votes
defaced, or contains marking which can lead cast -› 50% + 1 of VVC
another to clearly identify the voter who casts
such vote (Sec.1[ww], Rule 1, D.O. No. 40-1-15). In example 2,
Step 1:
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First majority — 50%+1 of the BU = (200*50% +1 secrecy in the voting, fraud or bribery, in which
) = 101 votes case, the certification election should be
invalidated. Such invalidation would necessitate
413+30+20+80+30 = 200 ; There is a valid election the conduct of a re-run election among the
since all 200 members voted, which satisfies the contending unions to determine the true will and
first majority of 50% + 1 of the BU. desire of the employee-electorates.
Step 2: Situation contemplated

Second majority — 50%+1 of VVC When a Certification, Consent or Run-off Election
((40+30+20+80)*50°/0+1) = 86 results to a tie between 2 choices.
Ql: Is the election valid? Duty of Election Officer (EO)

Yes, because everyone voted. 1. Immediately notify the parties of a Re-run
Election.
02: Who won? 2. Cause the posting of the NOTICE within
None of the three unions won, because not one 5 days from the Certification, Consent or
received a majority of the valid votes cast. Run-off Election. The Re-run shall be
(Majority is 86 votes) conducted within 10 days after the
posting. (Sec. 18, Rule IX, D.O. No. 40-1-
Q3: Is run-off election a remedy here? 15)
No. The total number of votes for all contending
unions is LESS than 50% of ALL of the number of When will re-run be conducted
votes cast (Unions A, B and C garnered 90 votes, Within ten (10) days after the posting of the
or 10 votes short of the requirement, since there notice.
are 200 members in the ABU).
Declared as winner and certified
Q4: Is a re-run election a remedy here? Choice who receives the HIGHEST VOTES
No. There is no failure of election and none of the CAST.
choices obtained the same number of votes.
(D.C. No. 40-1-15) Note: 'No Union' is still included in the Re-run
Elections, since D.O. No. 40-1-15 did not specify
Note: The above given examples are for otherwise.
illustration purposes only existing as it does in its
most basic and ideal form. Answers may vary Failure of Election
depending on the circumstances. Where the number of votes cast in a certification
or consent election is less than the majority of the
d. RE-RUN ELECTIONS number of eligible voters and there are no
material challenged votes (Sec. 17, Rule IX of
Re-Run Election Takes Place in Two D.O. 40-03).
Instances
1. An election conducted to break a tie A failure of election shall not bar the filing of a
between contending unions, including motion for the immediate holding of another
"no union" and one of the unions. certification or consent election within 6 months
2. If a failure of election has been declared from date of declaration of failure of election
by the election officer and/or affirmed by (Sec. 18, Rule IX of D.O. 40-03).
the Med-Arbiter (Sec. 11-ttl, Rule I, D.O.
No. 40-1-15) Action on motion for the immediate holding of
another certification or consent election
A re-run election may be justified if certain Within 24 hours from receipt of the motion, the EO
irregularities have been committed during the shall immediately schedule the conduct of
conduct of the certification election such as, inter another certification or consent election within 15
alia, disenfranchisement of the voters, lack of days from receipt of the motion and cause the
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posting of the notice of certification election at parties agreed to hold a consent election, the
least 10 days prior to the scheduled date of results shall constitute a bar to the holding of a
election in 2 most conspicuous places in the certification election for one year from the holding
establishment. The same guidelines and list of of such consent election. Where an appeal has
voters shall be used in the election. been filed from the results of the consent election,
the running of the one-year period shall be
e. CONSENT ELECTIONS suspended until the decision on appeal has
Definition become final and executory.
Election voluntarily agreed upon by the parties,
with or without the intervention of the Department Where no petition for certification election was
of Labor and Employment, to determine the issue filed but the parties themselves agreed to hold a
of majority representation of all the workers in the consent election with the intercession of the
appropriate collective bargaining unit. (IRR Labor Regional Office, the results thereof shall
Code, Sec. 1[h], Rule 1, Book V) constitute a bar to another petition for certification
election. (Sec. 23 Rule VIII of D.O. 40-03).
Note: If done as part of a certification election
case, i.e., with the intervention of the DOLE, a Summary of the Five Modes of
consent election shall have the same legal effect Determining the Exclusive Bargaining
as a certification election. Representative
1. SEBA There's only ONE LLO
Procedure in Consent Elections if Agreed in CERTIFICATION
the Course of Proceeding of Petition for 2. CONSENT Election without the need
certification Election ELECTIONS for government
1. In case the contending unions agree to a intervention
consent election, the Med-Arbiter shall 3. Double Majority Rule
not issue a formal order calling for the CERTIFICATION - First Majority: Validity of
conduct of certification election, but shall ELECTIONS Election
enter the fact of the agreement in the - Second Majority:
minutes of the hearing. Majority of Valid Votes
2. The minutes of the hearing shall be Cast
signed by the parties and attested to by
the Med-Arbiter. Purpose
3. The employer may be required to submit - WoN the employees
the certified list of employers in the want to be represented
bargaining unit or where necessary, the - If yes, be represented
payrolls at the time of filing of the petition. by whom
(Sec. 2, Rule IX) 4. RUN-OFF Part and parcel of
4. The Med-Arbiter shall, immediately ELECTIONS certification elections
thereafter, forward the records of the
petition to the Regional Director or Requisites:
his/her authorized representative for the 1. A valid election
determination of the Election Officer by took place
the contending unions through raffle. because majority
5. The first pre-election conference shall be of the CBU
scheduled within 10 days from the date members voted
of entry consent election agreement. 2. There are three
(See Annex G) (Sec. 10 Rule VIII ofD.O. or more choices
40-03). in the election
(including no
Effects of Consent Election union)
Where a petition for certification election is filed, 3. Not one of the
and upon the intercession of the Med-Arbiter, the choices obtained
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majority of the D. RIGHTS OF LABOR ORGANIZATIONS

valid votes
4. Total number of Rights of Legitimate Labor Organizations
votes for all 1. To act as the representative of its
contending members for the purpose of collective
unions is at least bargaining;
50% of the 2. To be certified as the exclusive
number of votes representative of all the employees in an
cast. appropriate bargaining unit for purposes
5. There is no of collective bargaining;
unresolved 3. To be furnished by the employer, upon
challenge of voter written request, with its annual audited
or election financial statements, including the
protest. balance sheet and the profit and loss
statement, within 30 calendar days from
Note: "No Union" shall not the date of receipt of the request, after
be a choice in the run-off the union has been duly recognized by
election. the employer or certified as the sole and
5. RE-RUN Part and parcel of exclusive bargaining representative of
ELECTIONS certification elections the employees in the bargaining unit, or
within 60 calendar days before the
Two Instances: expiration of the existing collective
1. Break a tie bargaining agreement, or during the
2. Failure of Elections collective bargaining negotiation;
4. To own property, real or personal, for the
Note: "No Union" is still use and benefit of the labor organization
included as a choice and its members; To sue and be sued in
its registered name; and
5. To undertake all other activities designed
to benefit the organization and its
members, including cooperative,
housing, welfare and other projects not
contrary to law. (Labor Code, Art. 251)
Reportorial Requirements to be Submitted to

the BLR by the Legitimate Labor Organization
1. Its constitution and by-laws, or
amendments thereto, the minutes of
ratification, and the list of members who
took part in the ratification of the
constitution and by-laws within thirty (30)
days from adoption or ratification of the
constitution and by-laws or amendments
thereto;
2. Its list of officers, minutes of the election
of officers, and list of voters within thirty
(30) days from election;
3. Its annual financial report within thirty
(30) days after the close of every fiscal
year; and
4. Its list of members at least once a year or
whenever required by the Bureau.
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Exceptions to Written Authorization

Failure to comply with the above Requirement
requirements shall not be a ground for 1. For mandatory activities provided under
cancellation of union registration but shall subject the Labor Code; and
the erring officers or members to suspension, 2. When Non-members of the union avail of
expulsion from membership, or any appropriate the benefits of the CBA:
penalty. (Labor Code, Art. 252) a. Said non-members may be
assessed union dues equivalent
1. CHECK OFF, ASSESSMENT FEES, AGENCY to that paid by members; and
FEES b. Only a board resolution
approved by majority of the
A method of deducting from an employee's pay at members in a general meeting
prescribed period, the amounts due the union for called for the purpose; and
fees, fines or assessments. 3. Check-off for union service fees
authorized by law (Radio
Deductions for union service fee are authorized Communications of the Philippines, Inc.
by law and do not require individual check-off v. Sec. of Labor, G.R. No. 77959, 1989)
authorizations.
Note: If there exist a Check-off provision in the
Nature and Purpose of Check-Off CBA, individual written authorization requirement
All unions are authorized to collect reasonable may be dispensed with.
membership fees, union dues, assessments, and
fines and other contributions for labor education Requisites for a Valid Special Assessment
and research, mutual death and hospitalization 1. Authorization by a written Resolution of
benefits, welfare fund, strike fund and credit and the majority of all the members at the
cooperative undertakings. (Labor Code, Art. 250) general membership meeting duly called
for that purpose.
Requirements Regarding Check-Offs 2. Secretary's record of the Minutes of the
General Rule: No special assessment, attorney's meeting including the list of members
fees, registration fees, or other extraordinary fees present, votes cast, purpose of the
may be checked off from any amount due an special assessments and the recipient of
employee without an individual written such assessments which must be
authorization duly signed by the employee attested to by the President
(Labor Code, Art. 250101) 3. Individual written authorization for check-
off duly signed by the employee
The authorization should specifically state the: concerned to levy such assessments
1. Beneficiary of the deduction;
2. Amount; and Agency fees
3. Purpose Dues equivalent to union dues, charged from the
non-union members who are benefited by or
Note: There can be no valid check-off if the under the CBA.
majority of the union members had already
withdrawn their individual authorization. (Palacol Requisites for the Imposition of Agency Fees
v. Ferrer-Calleja, G.R. No. 85333, 1990) 1. Employee is part of the bargaining unit;
2. He is not a member of the union; and
3. He partook of the benefits of the CBA
(Labor Code, Art. 2591-el)
NOTE: No written authorization is required from

the non-union employees in order to effect a valid
check-off. (Del Pilar Academy v. Del Pilar
Academy Employees, G.R. No. 170112, 2008)
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Rule on Levy Free Workers Union v. Compania Maritima, G.R.

Article 250, par. (n) of the Labor Code provides Nos. L-122951-52, 1967)
that no special assessment or extraordinary fees
may be levied upon the members of a labor Jurisdictional Pre-Conditions of Collective
organization unless authorized by a written Bargaining
resolution of a majority of all the members at a 1. Status of majority representation of the
general membership meeting duly called for the employees' representative;
purpose. The secretary of the organization shall 2. Proof of majority representation; and
record the minutes of the meeting including the 3. Demand to bargain under Art. 261(a)
list of all members present, the votes cast, the (Kiok Loy v. NLRC, G.R. No. 54334,
purpose of the special assessment or fees and 1986).
the recipient of such assessment or fees. The
record shall be attested to by the president. Pending Petition for Cancellation of Union
Registration
Rule on Collection Pendency of a petition for cancellation of union
Article 250, par (o) of the Labor Code provides registration does NOT preclude collective
that other than for mandatory activities under the bargaining. It shall not suspend the proceedings
Code, no special assessments, attorney's fees, for certification election nor shall it prevent the
negotiation fees or any other extraordinary fees filing of a petition for certification election (Sec. 3,
may be checked off from any amount due to an Rule XI of D.0. 40-03)..
employee without an individual written
authorization duly signed by the employee. The Purpose of Collective Bargaining
authorization should specifically state the Purpose of collective bargaining is the reaching
amount, purpose and beneficiary of the of an agreement resulting in a contract binding on
deduction. the parties; but the failure to reach an agreement
after negotiations have continued for a
2. COLLECTIVE BARGAINING reasonable period does not establish a lack of
good faith.
a) DUTY TO BARGAIN COLLECTIVELY
The statutes invite and contemplate a collective
bargaining contract, but they do not compel one.
Meaning of the Duty to Bargain Collectively
1. The performance of a mutual (employer The duty to bargain does not include the
and the exclusive bargaining agent) obligation to reach an agreement (Union ofFilipro
obligation to meet and convene, Employees v. Nestle Phils., G.R. 158930-31
2. Promptly and expeditiously in good faith ,2008)
3. For the purpose of negotiating an
agreement with respect to wages, hours b) COLLECTIVE BARGAINING AGREEMENT
of work and all other terms and conditions
of employment, including proposals for Collective Bargaining Agreement (CBA)
adjusting any grievances or questions A contract executed upon request of either the
arising under such agreement, and employer or the exclusive bargaining
4. Executing a contract incorporating such representative of the employees, incorporating
agreements, if requested by either party. the agreement reached after negotiations with
(Labor Code, Art. 263) respect to the followings:
1. Wages;
Parties to Collective Bargaining 2. Hours of work; and
1. Employer 3. All other terms and conditions of
2. Employees, represented by the exclusive employment, including proposals for
bargaining agent adjusting any grievance or questions
under the agreement (Davao Integrated
The duty to bargain collectively arises only Port Stevedoring Services v. Abarquez,
between the employer and its employee. (Allied G.R. No. 102132, 1993)
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Note: CBA constitutes the law between the to such meetings. It shall be the duty of the parties
parties when freely and voluntarily entered into. to participate fully and promptly in the conciliation
The goal of collective bargaining is the making of meetings the NCMB may call.
agreements that will stabilize business conditions
and fix fair standards of working conditions. (PI 4. During the conciliation proceedings in the
Manufacturing Inc. v. PI Manufacturing NCMB, the parties are prohibited from
Supervisors and Foremen Associations, G.R. No. doing any act which may disrupt or
167217, 2008) impede the early settlement of the
disputes; and
Coverage of CBA 5. The NCMB shall exert all efforts to settle
It is a well-settled doctrine that the benefits of a disputes amicably and encourage the
CBA extend to the laborers and employees in the parties to submit their case to a voluntary
collective bargaining unit, including those who do arbitrator.
not belong to the chosen bargaining labor
organization. Otherwise, it would be a clear case When There Is No Collective Bargaining
of discrimination (PAL v. PALEA, G.R. 142399 Agreement (Labor Code, Art. 262)
,2008).
In absence of an agreement OR other voluntary
Commencement of Bargaining arrangement providing for a more expeditious
During Certification Year or within 12 months manner of collective bargaining, it shall be the
after the determination and certification of the duty of the employer AND the representatives of
employees' exclusive bargaining representative the employees to bargain collectively in
accordance with the provisions of this Code.
Bargaining Procedure
The parties may agree on the bargaining The duty to bargain collectively where no CBA
procedure. If there is a procedure agreed upon, exists involves the performance of a mutual
the Labor Code Procedure applies obligation:
supplementary. 1. To meet and convene promptly and
expeditiously in good faith for the purpose
Labor Code Procedure in Collective of negotiating an agreement with respect to
Bargaining (Labor Code, Art. 261) wages, hours of work, and all other terms
and conditions of employment including
The following procedures shall be observed in
collective bargaining: proposals for adjusting any grievances or
1. When a party desires to negotiate an questions arising under such agreement;
agreement it shall serve a written notice and
upon the other party with a statement of 2. To execute a contract incorporating such
its proposals the other party shall make agreements, if requested by either party.
reply thereto NOT later than 10 (Labor Code, Art. 263)
calendar days from the receipt of such
notice; Essentially, the duty to bargain in this situation
2. Should differences arise on the basis of still requires the performance of the obligation by
such notice and reply either party may the employer and the union to meet, convene and
request a CONFERENCE which shall confer for collective purposes.
begin NOT later than 10 calendar days
from the date of request. Limitations to the Duty to Bargain
3. If the dispute is NOT settled, the NCMB The duty to bargain does not compel any party to
shall intervene upon the request of either agree to a proposal or to make any concession
or both parties or at its own initiative AND (Labor Code, Art. 263).
immediately call the parties to
CONCILIATION MEETINGS. Notes: The provisions of the Code are only
supplementary and not mandatory with regard to
The NCMB shall have the power to issue the process of collective bargaining. It is the
subpoenas requiring the attendance of the parties policy of the state to promote the primacy of
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FREE collective bargaining. (Labor Code, Art. When to file

218[a]) Within 30 days from execution of the CBA.
(Sec. 1, Rule XVII of D.O. 40-03)
The Code authorizes parties to provide for their
own procedure in CB but it must be more Requirements for registration
expeditious than that provided in Art. 261. The application for CBA registration shall be
accompanied by the original and 2 duplicate
If they are unable to agree, they must follow the copies of the following documents:
Code procedure (i.e. in Art. 261). 1. CBA
2. A statement that the CBA was posted in
Automatic Renewal Clause at least 2 conspicuous places in the
At the expiration of the freedom period, the establishment concerned for at least 5
employer shall continue to recognize the majority days before its ratification.
status of the incumbent bargaining agent where 3. Statement that the CBA was ratified by
no petition for certification election is filled. It shall the majority of the employees in the
be the duty of both parties to keep the status quo bargaining unit.
and to continue in full force and effect the terms
and conditions of the existing agreement during Note: The foregoing documents must be certified
the 60-day period and/or until a new agreement under oath by the representative of the employer
is reached by the parties. (Labor Code, Art. 264) and the labor union. No other document shall be
required in the registration of the CBA (Sec. 2,
Duty to Bargain Collectively when there is a Rule XVII of D. O. 40-03).
Collective Bargaining Agreement (Labor Code,
Art. 264) Procedure for registration
1. The Regional Office or the Bureau shall
General Rule: When there is a CBA, the duty to act on the applications within 5 days from
bargain also means that neither party shall receipt of the application.
terminate nor modify such agreement during its 2. The Regional Office or Bureau may
lifetime. within 5 days from receipt of the
application,
Exception: 60 days before the CBA expires, a. Approve the application and issue
either party may notify the other in writing that it the certificate of registration or
wants to terminate or modify the agreement. The b. Deny the application for failure to
CBA remains in full force and effect during the 60 comply with the requirements.
day period and until a new agreement is reached. c. If the supporting documents are not
complete, or are not verified under
Registration of Collective Bargaining oath, the Regional Office or the
Agreements Bureau shall notify the applicants in
writing of the requirements needed to
Where to file complete the registration.
1. With the Regional Office which issued the
certificate of registration/certificate of NOTE: If the applicant fails to complete the
creation of chartered local. requirements within 10 days from receipt of
2. If the certificate of creation of the chartered notice, application is denied without prejudice.
local was issued by the Bureau, the
agreement shall be filed with the Regional Denial of Registration; Grounds of Appeal
Office which has jurisdiction over the place 1. The denial shall be in writing, stating in
where it principally operates. clear terms the reason therefore and
3. Multi-employer collective bargaining served upon the applicant union and
agreements shall be filed with the Bureau employer within 24 hours from issuance.
(Sec. 1, Rule XVII of D.O. 40-03). 2. The denial by the Regional Office of the
registration of single enterprise collective
bargaining agreements may be appealed
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to the Bureau while the denial by the

Bureau of the registration of multi-
employer collective bargaining
agreements may be appealed to the
Office of the Secretary, both within 10
days from receipt of the notice of denial.
3. The memorandum of appeal is filed with
the Regional Office or the Bureau, as the
case may be.
4. The memorandum of appeal and the
entire records of the application shall be
transmitted to the Bureau or the Office of
the Secretary within 24 hours from
receipt of the memorandum of appeal.
5. Bureau or the Office of the Secretary
shall resolve within the same period and
in the same manner as that prescribed for
inter/intra-union disputes (Sec. 5, Rule
XVII of D.0. 40-03).
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BARGAINING PROCEDURE UNDER THE LABOR CODE

(Labor code, Art. 261)
The recognized or certified

labor union and its employer
may adopt such procedures
and processes they may deem
appropriate and necessary for Serve written notice with statement of
the early termination of their
negotiations. proposals upon the other party.
They shall name their
respective representatives to
the negotiation, schedule the NOTE: NOT
number and frequency of MORE
meetings, and agree on wages, THAN
benefits and other terms and Reply of other party 10 DAYS
conditions of work for all FROM
employees covered in the RECEIPT
bargaining unit (Section 4, Rule NOTE:
XVI, Omnibus Rules • Only if
Implementing the Labor Code)
differences arise
between the
proposals and the
Board shall have the CONFERENCE reply
power to issue • Shall begin not later
subpoenas to require than 10 calnedar
attendance to such days from date of
meetings. (Labor code, request
Art 261 (c)) NOTE:
Board shall exert all Board shall intervene, call parties to • Only if
efforts to settle disputes conciliation meetings differences
amicably, encourage are not settled
parties to submit case to • It shall be the
duty of the
voluntary arbitrator. (Art
parties to
261 (e)) participate fully
Parties are prohibited and promptly in
from doing any act the conciliation
which may disrupt or meetings
impede the early
settlement of the
disputes. (Att. 261 (d))
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(1) Mandatory Provisions of the CBA the law itself. Such provision CANNOT be used
to assail the legality of a strike which is
Matters considered as mandatory subjects of grounded on ULP. In this situation, it is not
bargaining essential that the ULP act has, in fact, been
1. Grievance Machinery (Labor Code, Art. committed; it suffices that the striking workers are
271) shown to have acted honestly on an impression
2. Voluntary Arbitration (Labor Code, Art. that the company has committed ULP and the
274-75) surrounding circumstances could warrant such
3. No Strike-No Lockout Clause belief in good faith (Panay Electric v. NLRC, G.R.
4. Labor Management Council (Labor Code, No. 102672, Oct. 4, 1995); (Malayang Samahan
Art. 267) ng mga Manggagawa sa Greenfield v. Ramos,
5. Union Security Arrangements G.R. No. 113907, 2000).
6. Economic / Working Conditions
a. Wages and other types of In the case of (Nuwhrain-Dusit v. NLRC, G.R. No.
compensation; including merit 163942, 2008; G.R. No. 166295), the Union's
increases; concerted violation of the Hotel's Grooming
b. Working hours and working days, Standard by deliberately shaving their heads
including work shifts; which resulted in the disruption of the Hotel's
c. Vacations and holidays; operations clearly violated the CBA's "No Strike,
d. Bonuses; No Lockout" provision which states that "The
e. Pensions and retirement plans; Union agrees that there shall be no strikes,
f. Seniority; walkouts, stoppage or slowdown of work, boycott,
g. Transfer; or any other form of interference and/or
h. Lay-offs; interruptions with any of the normal operations of
i. Employee workloads; the Hotel during the life of the Agreement". The
j. Work rules and regulations; strike arose out of a bargaining deadlock in the
k. Rent of company houses; CBA negotiations with the Hotel. The concerted
I. Family planning; action is an economic strike upon which the afore-
m. Rates of pay; quoted "no strike/work stoppage and lockout"
n. Mutual observance duties; and prohibition is squarely applicable.
o. Provision against Drug Use in
Workplace (R.A. No. 9165, Sec. Duration of the CBA
49)
CBA Duration for economic provisions (Labor
Where the subject of the dispute is a mandatory Code, Art. 265)
bargaining subject, either party may bargain to Duration: 3 years
an impasse as long as he bargains in good faith.
Refers to the rest of CBA, economic as well as
Where the subject is non-mandatory, a party may non-economic other than representational.
not insist on bargaining to the point of impasse. His
CBA Duration for non-economic provisions
insistence may be construed as evasion of the
duty to bargain.
Duration: 5 years for representational or political
issues.
Valid Stipulation — No Strike No Lockout
Refers to the identity and majority status of the
A "no strike, no lockout" provision in the CBA is a union that negotiated the CBA as the exclusive
valid stipulation, although the clause may be bargaining representative
invoked by an employer only when the strike is
economic in nature or one which is conducted to Freedom PeriodThe 60-day period immediately
force wage or other concessions from the before the date of expiry of such 5 year-term of the
employer that are not mandated to be granted by CBA (Art. 265)
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Hold over principle shall also govern during the

No petition questioning the majority status of the interregnum between the expiration of the
incumbent bargaining agent shall be entertained economic provisions of the CBA and the date of
and no certification election shall be conducted by effectivity of the Arbitral Award. [I]t shall be the
the DOLE outside of the 60-day period duty of both parties to keep the status quo and to
immediately before the date of the expiry of such
continue in full force and effect the terms and
five year term of the Collective Bargaining
Agreement. (Labor code, Art. 265) (Contract-Bar conditions of the existing agreement during the 60-
rule) day freedom period and/or until a new agreement
is reached by the parties." Despite the lapse of the
Rules on Effectivity and Retroactivity of New formal effectivity of the CBA the law still considers
CBA the same as continuing in force and effect until a
new CBA shall have been validly executed.III
New and First-ever CBA (No previous CBA): (Manila Electric Co. V. Quisumbing, G.R. No.
effective on date agreed upon by the parties 127598 (Resolution), 2000.
With Previous CBA Arbitral Award

1. Effectivity of new CBA entered into within In the absence of an agreement between the
6 months after the expiration of the old parties, an arbitrated CBA takes on the nature of
CBA: retroact to the date following the any judicial or quasi-judicial award. It operates and
expiry date. (Art. 265, Labor Code) may be executed only prospectively unless there
2. Effectivity of new CBA entered into after 6 are legal justifications for its retroactive
months following the expiration of the old application. (Manila Electric Company vs.
CBA: parties shall agree on the date of Quisumbing, G.R. No. 127598, 1999)
effectivity thereof (Art. 265, Labor Code)
It is true that an arbitral award cannot per se be
Hold Over Principle categorized as an agreement voluntarily entered
The CBA shall be in full force and effect until the into by the parties because it requires the
parties reach a new agreement. Until a new CBA interference and imposing power of the State thru
has been executed by and between the parties, the Secretary of Labor when he assumes
they are duty-bound to keep the status quo and to jurisdiction. However, the arbitral award can be
continue in full force and effect the terms and considered as an approximation of a collective
conditions of the existing agreement. (Labor Code, bargaining agreement which would otherwise
Art. 253; FAMIT v. CA, G.R. No. 164060, 2007) have been entered into by the parties. The terms
or periods set forth in Article 253-A pertains
The law does not provide for any exception nor explicitly to a CBA. But there is nothing that would
qualification as to which of the economic prevent its application by analogy to an arbitral
provisions of the existing agreement are to retain award by the Secretary considering the absence
force and effect, therefore, it must be understood of an applicable law. III (Manila Electric Co. v.
as encompassing all the terms and conditions in Quisumbing, G.R. No. 127598 (Resolution),
the said agreement. (FAMIT v. CA, G.R. No. February 22, 2000])
164060, 2007)
Rules: (Manila Electric Co. v. Quisumbing,
To rule otherwise would be to create a gap during February 2000)
which no agreement would govern, from the time 1. CBA arbitral awards granted after 6
the old contract expired to the time a new months from the expiration of the last CBA
agreement shall have been entered into. (New — retroact to such time agreed upon by
Pacific Timber & Supply Company Inc. v. NLRC, both employer and the employees or their
G.R. No. 124224, 2000) union.
2. Absent such agreement as to retroactivity
— award shall retroact to the first day after
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the 6-month period following the rights of the employees. The most that the
expiration of the last day of CBA. transferee may do, for reasons of public policy and
3. In the absence of a CBA, DOLE social justice, is to give preference to the qualified
Secretary's determination of the date of separated employees in the filling of vacancies in
retroactivity as part of his discretionary the facilities of the purchaser. (Manlimos v. NLRC,
powers over arbitral awards shall control.
G.R. No. 113337, 1995)
On the other hand, when the CBA is only part of
(2) GRIEVANCE MACHINERY
an arbitral award (,) (...) it may be made retroactive
to the date of expiration of the previous
Establishment of a grievance machinery
agreement. Therefore, in the absence of a specific
The parties to a CBA shall include therein
provision of law prohibiting retroactivity of the
provisions that will ensure the mutual observance
effectivity of arbitral awards issued by the
of its terms and conditions.
Secretary of Labor pursuant to Art. 263(g) [now
Art. 278 (g)], the latter is deemed vested with
They shall establish a machinery for the
plenary and discretionary powers to determine the
adjustment and resolution of grievances arising
effectivity thereof. (Manila Central Line Corp. v.
from the interpretation or implementation of their
Manila Central Line Free Workers Union, G.R. No.
CBA AND those arising from the interpretation or
109383, 1998)
enforcement of company personnel policies
CBA and 3rd Party Applicability
The rule is that unless expressly assumed, labor
Establishment of Grievance Machinery
contracts such as employment contracts and
(Omnibus Rule Implementing the Labor Code,
CBAs are not enforceable against a transferee of
Rule XIX, Sec. 1)
an enterprise, labor contracts being in personam,
1. By provision in the CBA
is binding only between the parties. A labor
2. In the absence of applicable provision in the
contract merely creates an action in personam and
CBA, a Grievance committee shall be created
does not create any real right which should be
within 10 days from the signing of the CBA.
respected by third parties.
Grievance committee shall be composed of at
As a general rule, there is no law requiring a bona
least 2 representatives each from the members of
fide purchaser of the assets of an on-going
the bargaining unit, designated by the union and
concern to absorb in its employ the employees of
the employer, unless otherwise agreed upon by
the latter. However, although the purchaser of the
the parties.
assets or enterprise is not legally bound to absorb
in its employ the employees of the seller of such
"Grievance" or "Grieveable Issue"
assets or enterprise, the parties are liable to the
1. Interpretation or implementation of the CBA
employees if the transaction between the parties
2. Interpretation or enforcement of company
is colored or clothed with bad faith. (Sundowner
personnel policies
Dev't. Corp. v. Drilon, G.R. No. 82341, 1989)
3. Any claim by either party that the other party
is violating any provisions of the CBA or
General Rule: An innocent transferee of a
company personnel policies.
business establishment has no liability to the
employees of the transferor to continue employing
them. Nor is the transferee liable for past unfair In order to be grieveable, the violations of the
labor practices of the previous owner. CBA should be ordinary and not gross in
character; otherwise, they shall be considered as
Exception: When the liability therefore is unfair labor practice (ULP).
assumed by the new employer under the contract
of sale, or when liability arises because of the new
owner's participation in thwarting or defeating the
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Gross violation of the CBA is defined as flagrant 1. NATURE AND ASPECTS

and/or malicious refusal by a party thereto to
comply with the economic provisions thereof. Nature of Unfair Labor Practice
Accordingly, violations of a CBA, except those 1. Inimical to the legitimate interests of both
which are gross in character, shall no longer be labor and management, including their
treated as ULP, and shall be resolved as right to bargain collectively and otherwise
grievances. (Labor Code, Art. 274) deal with each other in an atmosphere of
If what is violated, therefore, is a non-economic or freedom and mutual respect;
a political provision of the CBA, the same shall not 2. Disrupt industrial peace;
be considered as unfair labor practice and may 3. Criminal offenses against the State;
thus be processed as a grievable issue in 4. Violation of civil rights of both labor and
accordance with and following the grievance management;
machinery laid down in the CBA. 5. Violate the constitutional right of workers
and employees to self-organization; and
Note: In the case of (Liberal Labor Union v. Phil 6. Creates unstable labor-management
Can Co., 1952), the Court declared as illegal the relations (Labor Code, Art. 258)
strike staged by the union for not complying with
the grievance procedure provided in the collective Elements of Unfair Labor Practice
bargaining agreement ruling that "xxx the main 1. There is an employer-employee
purpose of the parties in adopting a procedure in relationship.
the settlement of their disputed is to prevent a 2. The act done is expressly defined in the
strike. This procedure must be followed in its Code as an unfair labor practice
entirety if it is to achieve its objective. xxx strikes • Note: HSBC Employees Union v. NLRC
held in violation of the terms contained in the (1997)
collective bargaining agreement are illegal, 3. Act complained of as ULP must have
especially when they provide for conclusive proximate and causal connection with/
arbitration clauses." violation of:
a. Exercise the right to self-
In abandoning the grievance proceedings and organization
stubbornly refusing to avail of the remedies under b. Exercise of the right to collective
the CBA, respondent Union violated the bargaining (Allied Banking
mandatory provisions of the collective bargaining Corporation v. CA, G.R. No.
144412, 2003)
agreement. (San Miguel Corporation v. NLRC,
Note: Employee refers to any person working for
G.R. No. 99266, 1999)
an employer. It includes one whose work has
ceased in connection with any current labor
E. UNFAIR LABOR PRACTICE
dispute or because of any unfair labor practice and
one who has been dismissed from work but the
Unfair Labor Practice
legality of the dismissal is being contested in a
Any unfair labor practice expressly defined by the
forum of appropriate jurisdiction. (IRR Book VRule
Labor Code. (Labor Code, Art. 219110
1Sec.1 (r))
Both employers and labor organizations can
Prescription of actions for ULP
commit acts of unfair labor practices in collective
The offense prescribes in 1 year. (Labor Code,
bargaining. However, the labor organization must
Art. 305)
be the representative of the employees before any
act it does may be considered as a violation of the
Not every unfair act is an Unfair Labor Practice
duty to bargain collectively. (Labor Code, Arts.
The prohibited acts are all related to the workers'
259[g] and 260[c])
self— organizational right and to the observance of
a collective bargaining agreement. Because ULP
is and has to be related to the right to self—
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organization and to the observance of the CBA, it 2. ULP BY EMPLOYERS

follows that not every unfair act is unfair labor The Code enumerates the acts or categories of
practice. acts considered as ULP. The enumeration does
not mean an exhaustive listing of ULP incidents.
ULP therefore, refers only to acts opposed to (The Hongkong and Shanghai Banking Corp.
workers' right to organize. When committed by the Employees Union v. NLRC, G.R. No. 125038,
employer, it commonly connotes anti — unionism. 1997)
ASPECTS OF UNAFAIR LABOR PRACTICE When there is no ULP: Instance of Valid

- CIVIL ASPECT CRIMINAL ASPECT Exercise of Management Rights
May include liability for Can only be initiated The law on unfair labor practices is not intended to
damages and may be after the finality of deprive the employer of his fundamental right to
passed upon by the judgment in the labor prescribe and enforce such rules as he honestly
Labor Arbiter (Labor case (Labor code, Art. believes to be necessary to the proper, productive
code, Art. 258) 258) and profitable operation of his business. (Bankard,
Inc. v. NLRC, G.R. No. 171664, 2013)
NOTE: But judgment in the labor case will not
sever as evidence of ULP in the criminal case. The only condition imposed upon this control is
that it must not be exercised so as to effect a
Jurisdiction of Criminal Charge of ULP violation of the Act and its several prohibitions.
The criminal charge fall under the concurrent
jurisdiction of the MTC or the RTC So long as a company's management
1. Only substantial evidence is required in prerogatives are exercised in good faith for the
the labor case while proof beyond advancement of the employer's interest and not
• reasonable doubt is need in the criminal for the purpose of defeating or circumventing the
prosecution. rights of the employees under special laws or
2. Recovery of civil liability in the under valid agreements, the Court will uphold
administrative proceedings shall bar them. (LVN Picture Workers v. LVN, G.R. No. L-
recovery under the Civil Code. 23495, 1970)
Who are Liable when ULP is Committed by Even as the law is solicitous of the welfare of the
Other than a Natural Person employees, it also recognizes employer's exercise
The penalty shall be imposed upon the guilty of management prerogatives. As long as the
officers of a corporation, partnership, association company's exercise of judgment is in good faith to
or entity. Art. 260 states that if the ULP is advance its interest and not for the purpose of
committed by a labor organization, the parties defeating or circumventing the rights of employees
liable are the officers, members of governing under the laws or valid agreements, such exercise
boards, representatives or agents or members of will be upheld.III (Central Azucarera De Bais v.
labor associations or organizations who have Heirs of Apostol, G.R. No. 215314, [March 14,
actually participated in, authorized or ratified such 2018])
acts. Art. 259 states that if ULP is committed by
the employer corporation, partnership, Where the vacation leave is without pay, which the
association, its officers or agents who have employer requires employees to take in view of the
actually participated in, authorized or ratified ULP economic crisis, is neither malicious, oppressive
shall be held criminally liable. nor vindictive, ULP is not committed.(Phifippine
Graphic Arts, Inc. v. NLRC, et al., G.R. No. L-
80737, 1988)
The Court has held that management is free to

regulate, according to its own discretion and
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judgment, all aspects of employment, including that they were dismissed. (Enriquez v. Zamora,
hiring, work assignments, working methods, G.R. No. 51382, 1986).
time, place, and manner of work, processes to
be followed, supervision of workers, working There can be no discrimination committed by the
regulations, transfer of employees, work employer as the situation of the union employees
supervision, lay-off of workers, and discipline, is different from that of the nonunion employees.
dismissal and recall of workers. The exercise of Discrimination per se is not unlawful. There can be
management prerogative, however, is not no discrimination where the employees concerned
absolute as it must be exercised in good faith are not similarly situated. The grant by the
employer of profit-sharing benefits to the
and with due regard to the rights of labor. (Royal
employees outside the bargaining unit falls under
Plant Workers Union v. Coca-Cola Bottlers
the ambit of its managerial prerogative. (Wise and
Philippines, inc, G.R. No. 198783, 2013)
Co. v. Employees Union, G.R. No. 87672, 1989)
Jurisprudence recognizes the exercise of Determination of Validity of Employer's Acts

management prerogatives. Labor Jaws also Involves an appraisal of his motives. Thus, there
discourage interference with an employer's must be a measure of reliance on the
judgment in the conduct of its business. For this administrative agency. It is for the CIR (NLRC
reason, the Court often declines to interfere in now), in the first instance, to weigh the employer's
legitimate business decisions of employers. The expressed motive in determining the effect on the
law must protect not only the welfare of the employees of management's otherwise equivocal
employees, but also the right of the employers. act. (Republic Savings Bank v. CIR, G.R. No. L-
(Royal Plant Workers Union v. Coca-Cola 20303, 1967)
Bottlers Philippines, inc, G.R. No. 198783,
2013) The Court has ruled that the prohibited acts
considered as ULP relate to the workers' right to
Relevant Jurisprudence self-organization and to the observance of a CBA.
As a rule, it is the prerogative of the company to It refers to "acts that violate the workers' right to
promote, transfer or even demote its employees to organize." Without that element, the acts, even if
other positions when the interests of the company unfair, are not ULP. Thus, an employer may only
reasonably demand it. Unless there are instances be held liable for unfair labor practice if it can be
which directly point to interference by the company shown that his acts affect in whatever manner the
with the employees right's to self — organization, right of his employees to self-organize. (Bankard
the transfer of an employee should be considered v. NLRC, G.R. 171664, 2013).
within the bounds allowed by law, e.g. where
despite his transfer to a lower position, his original Rundown of Acts Constituting Unfair Labor
rank and salary remained undiminished. Practice of Employers (YIP-C2-D2-V2) (Art.
(Rubberworld PhiIs. Inc., et al. v. NLRC, G.R. No. 259)
75704, 1989) 1. Interference
2. Yellow dog condition
Acceptance of a mass voluntary resignation is not 3. Qontracting out
ULP. In a Philippine Airlines case, the courts said 4. Company unionism
that the pilots' protest retirement/resignation was 5. Discrimination for or against union
not a concerted activity which was protected by membership
law. They did not assume the status of strikers. 6. Discrimination because of testimony
They cannot, therefore, validly claim that the 7. yjolation of duty to bargain
company committed unfair labor practice. When 8. Raid negotiation
the pilots voluntarily terminated their employment 9. Violation of CBA
relationship with the company, they cannot claim
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FIRST ULP: INTERFERENCE (ART. 259 [A]) Totality of Conduct Doctrine: The culpability of
To interfere with, restrain or coerce employees employer's remarks is to be evaluated on the basis
in the exercise of their right to self-organization of their implication, against the background of and
in conjunction with collateral circumstances.
Example: Interference with employee
organizational rights were found where the Under this doctrine, an expression which might be
superintendent of the employer threatened the permissibly uttered by one employer, might be
employees with cutting their pay, increasing rent deemed improper when spoken by a more hostile
of the company houses, or closing the plant if they employer, because of the circumstances under
supported the union and where the employer which they were uttered, the history of the
encouraged the employees to sign a petition particular employer's labor relations or anti — union
repudiating the 'union. bias or because of their connection with an
established collateral plan of coercion or
The questioned acts of petitioners, namely: 1) interference, and consequently actionable as an
sponsoring a field trip to Zambales for its unfair labor practice. (Insular Life Assurance Co.,
employees, to the exclusion of union members, Ltd., Employees Association-ATU, et al. v. Insular
before the scheduled certification election; 2) the Life Assurance Co., Ltd., G.R. L-25291, 1971).
active campaign by the sales officer of petitioners
against the union prevailing as a bargaining agent ULP Even Before Union is Registered
during the field trip; 3) escorting its employees Under Art.259 (a) of the Labor Code of the
after the field trip to the polling center; 4) the Philippines, "to interfere with, restrain, or coerce
continuous hiring of subcontractors performing employees in their exercise of their right to self —
respondents' functions; 5) assigning union organization" is an unfair labor practice on the part
members to the Cabangan site to work as grass of the employer. Paragraph (d) of said Article also
cutters; and 6) the enforcement of work on a considers it an unfair labor practice for an
rotational basis for union members, all reek of employer "to initiate, dominate, assist or otherwise
interference on the part of petitioners. interfere the formation or administration of any
labor organization, including the giving of financial
Indubitably, the various acts of petitioners, taken "or other support to it." In this particular case, the
together, reasonably support an inference that, private respondents were dismissed, or their
indeed, such were all orchestrated to restrict services were terminated, because they were
respondents' free exercise of their right to self— soliciting signatures in order to form a union within
organization. (T&H Shopfitters Corporation v. T&H the plant. (Judric Canning Corporation v. lnciong,
Shopfitters Corporation Union, G.R. No. 191714, G.R. No. L-51494, 1982)
2014).
In short, an employer who interfered with the right
Test to self — organization even before the union is
Whether the employer has engaged in conduct registered can be held guilty of ULP. (Samahan ng
which, it may reasonably be said, tends to interfere mga Manggagawa sa Bandolino — LMLC v. NLRC
with the free exercise of the employees' right and and Bandolino Shoe Corp, G.R. No. 125195,
that it is not necessary that there be direct 1997)
evidence that any employee was in fact
intimidated or coerced by the statements or Prohibiting organizing activities
threats of the employer if there is a reasonable However, in the absence of showing that the illegal
interference that the anti-union conduct of the dismissal was dictated by anti — union motives, the
employer does have an adverse effect on self- same does not constitute an unfair labor practice
organization and collective bargaining. (Insular as would be a valid ground for strike. The remedy
Life Assurance Co., Ltd. EU v. Insular Life, G.R. is an action for reinstatement with backwages and
No. L-25291, 1971) damages. (AHS/ Philippine Employees Union V.
NLRC, G.R. No. 73721, 1987)
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members of the aggrieved union and therefore

Examples of unlawful acts to discourage cannot justly escape liability. (Cruz v. PAFLU, G.R.
membership in a labor organization, as held in No. L-26519, 1971)
jurisprudence:
1. Refusal over a period of years to give Doctrine of Successor-Employer
salary adjustments according to the A new company will be treated as a continuation
improved salary scales in the collective or successor of the one that closed if the new or
bargaining agreements. (Benguet take-over company is engaging in the same
Consolidated v. BC! Employees and business as the closed company or department, or
Workers Union, G.R. No. L-25471, 1968) is owned by the same people, and the "closure" is
2. Dismissal of an old employee allegedly for calculated to defeat the worker's organizational
inefficiency, on account of her having right in which case the closure may be declared a
joined a union and engaging in union subterfuge.
activities. (East Asiatic Co v. CIR, G.R.
No. L-17037, 1966) This doctrine is just an enforcement of the piercing
3. Dismissal of teachers for fear by the the veil of corporate entity. (Azucena Vols. 11-A and
school that there would be strike the II-B, 9th ed., 2016, p. 327).
following semester. (Rizal Memorial
Colleges Faculty Union v. NLRC, G.R. Factors to Determine Continuity:
Nos. 59012-13, 1989) 1. Retention of control
4. A company's capital reduction efforts, to 2. Use of the same plant or factory
camouflage the fact that it has been 3. Use of the same or substantially the
making profits to justify the mass lay-off of same employees, workers, supervisors
its employees especially union members. or managers
(Madrigal & Company Inc. v. Zamora, 4. Similar or substantially the same work or
G.R. No. L-48237, 1987) production under similar or substantially
the same working conditions
Lockout or Closure Amounting to ULP 5. Use of the same machinery and
A lockout, actual or threatened, as a means of equipment
dissuading the employees from exercising their 6. Manufacture of the same products or
rights under the Act is clearly an unfair labor the performance of the same services
practice. (Azucena Vols. II-A and 11-B, 9th ed.,
2016, p. 323). In the case of Sundowner Development
Corporation v. Drilon (G.R. No. 82341, 1989),
while it is true that Sundowner is using the leased
Note: To hold an employer who actually or who property for the same type of business as that of
threatens to lock out his employees guilty of a Mabuhay, there can be no continuity of the
violation of this Act, the evidence must establish business operations of the predecessor employer
that the purpose thereof was to interfere with the by the successor employer as respondent
employee's exercise of their rights. (Azucena Vols. Mabuhay had not retained control of the business.
II-A and II-B, 9th ed., 2016, p. 323). Petitioner Sundowner is corporation entirely
different from Mabuhay. It has no controlling
Sale in Bad Faith interest whatever in Mabuhay. The two have no
Where the sale of a business enterprise is privity and are strangers to each other.
attended with bad faith, there is no need to
consider the applicability of the rule that labor As earlier stated, it was mandated that Filport shall
contracts being in personam are not enforceable absorb all labor force and necessary personnel
against the transferee. The latter is in the position complement of the merging operators, thus,
of tort—feasor, having been a party likewise clearly indicating the intention to continue the
responsible for the damage inflicted on the employer — employee relationships of the
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individual companies with its employees through reduce the cost, even if the employer's estimate of
Filport. This is true where the transferee was found his cost is based on a projected increase
to be merely an alter ego of the different merging attributable to unionization.
firms, as in this case. Thus, Filport has the
obligation not only to absorb the workers of the It is to be emphasized that contracting out of
dissolved companies but also to include the length servicesis not illegal per se. It is an exercise of
of service earned by the absorbed employees with business judgment or management prerogative.
their former employees as well. (Filipinas Port Absent proof that the management acted in
Services v. NLRC, G.R. No.97237, 1991) malicious or arbitrary manner, the Court will not
interefere with the exercise of judgment by an
SECOND ULP: YELLOW DOG (ART. 259 [B]) employer. In this case, bad faith cannot be
To require as a condition of employment that a attributed to BPI because its actions were
person or an employee shall not join a labor authorized by BSP Circular No. 1388, Series of
organization or shall withdraw from one to which 1993 issued by the Monetary Bank of BSP. (BPI
he belongs Employees Union-Davao City-FUBU v. BPI, G.R.
No. 174912, 2013)
Yellow Dog Contract: A promise exacted from
workers as a condition of employment that they Runaway shop: An industrial plant moved by its
are not to belong to, or attempt to foster, a union owners from one location to another to escape
during their period of employment (Azucena Vols. union labor regulations or state laws or to
II-A and II-B, 9th ed., 2016, p. 329). discriminate against employees at the old plant
because of their union activities.
Usual Provisions under Yellow Dog Contract
1. A representation by the employee that he Resorting to runaway shop is ULP.
is not a member of a labor union;
2. A promise by the employee not to join a Where a plant removal is for business reasons but
labor union; and the relocation is hastened by anti — union
3. A promise by the employee that, upon motivation, the early removal is unfair labor
joining a labor union, he will quit his practice. It is immaterial that the relocation is
employment (Teller, Law Governing Labor accompanied by a transfer of title to a new
Disputes and Collective Bargaining, pp. employer who is an alter ego of the original
118-119) employer.
THIRD ULP: CONTRACTING OUT (ART. 259 Mere ownership by a single stockholder or by
[C]) another corporation of all or nearly all of the capital
To contract out services or functions being stock of a corporation is not of itself sufficient
performed by union members when such will ground for disregarding the separate corporate
interfere with, restrain or coerce employees in the personality. (Sunio v. NLRC, G.R. No. L-57767,
exercise of their rights to self-organization 1984)
Contracting Out as ULP Outsourcing is not per se ULP

Contracting out services or functions being Conditions for a valid outsourcing:
performed by union members when such act will 1 Motivated by good faith; and
interfere with, restrain, or coerce employees in the 2. Must not have been resorted to
exercise of their right to self — organize. circumvent the law or must not have been
the result of malicious or arbitrary action
Note: an employer is not guilty of an unfair labor (Manila Electric v. Quisumbing, G.R. No.
practice in contracting work out for business 127598, 1999; Bankard v.NLRC, G.R. No.
reasons such as decline in business, the 171664, 2013)
inadequacy of his equipment, or the need to
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FOURTH ULP: COMPANY DOMINATION OF had presented demands for the improvement of
UNION (ART. 259 [D]) the working conditions despite its alleged
To initiate, dominate, assist or otherwise interfere retrenchment policy; and that, after dismissal of
with the formation or administration of any labor the aforesaid officers of the rival labor union, the
organization, including the giving of financial or company engages the services of new laborers.
other support to it or its organizers or supporters (Oceanic Air Products, Inc. v. CIR, GR No. L-
18704, 1963)
Manifestations of Domination of a Labor Union
1. Initiation of company union idea. Prejudicial Question that Bars Holding of
Certificate Election
This may further occur in three styles: While generally, the pendency of ULP case filed
a. outri6ht formation by the employer or against a labor organization participating in the
his representatives certification election does not stay the holding
b. employee formation on outright thereof (Barrera v. CIR, G.R. No. L-32853, 1981).
demand or influence by employer
C. managerially motivated formation by However, the pendency of a formal charge of
employees company domination against one of the unions
which is participating in the certification election is
2. Financial support to the union. a prejudicial question that bars the holding thereof
until its final resolution. (Standard Cigarette v. CIR,
By defraying the union expenses or paying the G.R.No. L-9908, 1957).
attorney's fees of the lawyer who drafted the
constitution and by — laws of the union. Suspension of CBA
In the case of Rivera v. Espiritu, the CBA between
3. Employer encouragement and the management (PAL) and the bargaining union,
assistance. PALEA, with the expiry date of Sep. 30, 2000, was
mutually agreed by the parties to be suspended
Immediately granting the union exclusive until 2008, to prevent the closure of PAL because
recognition as a bargaining agent without
of severe financial losses. It was accordingly
determining whether the union represents the
majority of employees stipulated in the agreement of suspension that
PAL shall continue to recognize PALEA as the
4. Supervisory assistance. duly certified bargaining agent of the rank and file
ground employees of the company. The Supreme
This takes the form of soliciting membership, Court here held that, contrary to the argument of
permitting union activities during working time the petitioners that the suspension installed
or coercing employees to join the union by PALEA as company union, the suspension
threats of dismissal or demotion. (Philippine agreement is a valid exercise of the freedom to
American Cigar & Cigarette Factory Workers contract and under the principle of inviolability of
Union v. Philippine American Cigar & contracts under the Constitution, contract be
Cigarette Mfg. Co., G.R. No. L-18364, 1963) upheld. (G.R. No. 135547, 2002).
A labor union is company — dominated where it
FIFTH ULP: DISCRIMINATION (ART. 259 [E])
appears that key officials of the company have
To discriminate in regard to wages, hours of work
been forcing employees belonging to rival labor
and other terms and conditions of employment in
union to join the former under pain of dismissal
order to encourage or discourage membership in
should they refuse to do so; that key officials of the
any labor organization. (Labor Code, Art. 259[4)
company, as well as its legal counsel, have
attended the election of officers of the former
There is discrimination only when one is denied
union; that officers and members of the rival union
privileges which are granted to others under
were dismissed allegedly pursuant to a
similar conditions and circumstances (Caltex
retrenchment policy of the company, after they
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Philippines, Inc. v. Philippine Labor Organization, branch. (Manila Hotel Company v. Pines
G.R. No. L-5206, 1953). Thus, it must be Hotel Employees Association (CUGCO)
established that: and CIR, G.R. No. L-30818, 1972)
1. No reasonable distinction or classification
that can be obtained between persons Discrimination in Layoff or Dismissal
belonging to the same class Even where business conditions justified a layoff
2. Persons belonging to the same class have of employees, unfair labor practices in the form of
not been treated alike (Wise and Co., Inc. discriminatory dismissal were found where only
v. Wise and Co., Inc Employees Union, unionists were permanently dismissed while non —
G.R. No. 87672, 1989). unionists were not.
There can be no discrimination if the employees Test of Discrimination

are not similarly situated. (Great Pacific Life
To determine whether or not a discharge is
Employees Union v. Great Pacific Life Assurance
Corporation, G.R. No. 126717, 1999). discriminatory, it is necessary that the underlying
reason for the discharge be established.
Note: To constitute an unfair labor practice, the
discrimination committed by the employer must be The fact that a lawful cause for discharge is
in regard to the hire or tenure of employment or available is not a defense where the employee is
any term or condition of employment to encourage actually discharged because of his union activities.
or discourage membership in any labor If the discharge is actually motivated by a lawful
organization. The exaction by the Company, from reason, the fact that the employee is engaged in
strikers returning to work, of a promise not to union activities at the time will not lie against the
destroy company property and not to commit acts employer and prevent him from the exercise of his
of reprisal against the Union members who did not business judgment to discharge an employee for
participate in the strike, cannot be considered as cause. (NLRB v. Ace Comb Co. 342 F. 2841, as
intended to encourage or discourage Union cited in Cainta Catholic School v. CCSEU, G.R.
membership. Taking the circumstances No. 151021, 2006).
surrounding the prescribing of that condition, the
requirement by the Company is actually an act of An inference that the discharge of an employee
self — preservation and designed to inure the was motivated by his union activity must be based
maintenance of peace and order in the Company upon evidence, direct or circumstantial, not upon
premises. (Pagkakaisang Itinataguyod ng mga mere suspicion. (NLRB v. South Rambler Co., 324
Manggagawasa Ang Tibay, et aL, G.R. No. L- F 2d 447).
22273, 1967)
Discharge due to union activity, a question of
Discrimination in Bonus Allocation or Salary fact
Adjustments The question of whether an employee was
There is unfair and unjust discrimination in discharged because of his union activities is
granting of salary adjustments where evidence essentially a question of fact as to which the
shows that: findings of the court of Industrial Relations are
1. The management paid the employees of conclusive and binding if supported by substantial
the unionized branch; evidence considering the record as a whole.
2. Where salary adjustments were granted (Philippine Metal Foundries, Inc., v. CIR, G.R. No.
to employees of one of its non — unionized L-34948, 1979)
branches although it was losing in its
operations; and Valid Discrimination: Union Security Clause
3. The total salary adjustments given every
ten of its unionized employees would not Union Security
even equal the salary adjustments given Union security is a generic term which is applied
one employee in the non — unionized to and comprehends closed shop, union shop,
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maintenance of membership or any other form of The law has allowed stipulations for 'union shop'
agreement which imposes upon employees the and 'closed shop' as means of encouraging
obligation to acquire or retain union membership workers to join and support the union of their
as a condition affecting employment. It is indeed choice in the protection of their rights and interests
compulsory union membership whose objective is vis-a-vis the employer. (Del Monte Philippines v.
to assure continued existence of the union. In a Salvidar, G.R. No. 158620, 2006)
sense, there is discrimination when certain
employees are obliged to join a particular union. TYPES OF UNIONS SECURITY CLAUSES
But it is discrimination favoring unionism; it is a 1. CLOSED SHOP
valid kind of discrimination. (Azucena, Everyone's Only union members can be hired by the company
Labor Code, 2015 ed.) and they must remain as union members to retain
employment in the company.
The employer is not guilty of unfair labor practice
if he merely complies in good faith with the request Employees not covered by the closed shop
of the certified union for the dismissal of provision
employees expelled from the union pursuant to the 1. Any employee who at the time the closed
union security clause in the collective bargaining — shop agreement takes effect is a bona
agreement. (Soriano v. Atienza, G.R. No. 68619, fide member of a religious organization
1989) which prohibits its members from joining
labor unions of religious grounds.
Union security is any form of agreement which 2. Employees already in service and already
imposes upon employees the obligation to acquire members of a labor union or unions other
or retain union membership as a condition than the majority union at the time the
affecting employment. (GMC v. Casio, G.R. No. closed — shop agreement took effect.
149552, 2010) 3. Confidential employees who are excluded
from the rank and file bargaining unit.
It is true that disaffiliation from a labor union is not 4. Employees excluded from the closed —
open to legal objection. It is implicit in the freedom shop by express terms of the agreement.
of association ordained by the Constitution. But a (BPI v. BPI Employees Union-Davao
closed shop is a valid form of union security, and Chapter, G.R. No 164301, 2010).
such provision in a collective bargaining
agreement is not a restriction of the right of In the absence of a manifest intent to the contrary,
freedom of association guaranteed by the closed — shop provisions in a collective bargaining
Constitution. x x x (Employees), although entitled agreement apply only to persons to be hired or to
to disaffiliation from their union to form a new employees who are not yet members of any labor
organization of their own, must, however, suffer organization and that said provisions of the
the consequences of their separation from the agreement are not applicable to those already in
union under the security clause of the CBA. (VNar the service at the time of the execution.
Inciong, G.R. No. L-50283-84, 1983)
To hold that the employees in a company who are
Statutory Basis and Rationale members of a minority union may be compelled to
Nothing in this Code or in any other law shall stop disaffiliate from their union and join the majority or
the parties from requiring membership in a contracting union, would render nugatory the right
recognized collective bargaining agent as a of all employees to self— organization and to form,
condition for employment, except those join or assist labor organizations of their own
employees who are already members of another choosing, a right guaranteed by the Industrial
union at the time of the signing of the collective Peace Act as well as by the Constitution.
bargaining agreement. (Labor Code, Art. 259[4) (Kapisanan ng mga Manggagawa ng Alak
(NAFLU) v. Hamilton Distellery Co., et. aL, G.R.
No. L-18112, 1962)
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received as a consequence of the bargaining

2. UNION SHOP efforts of the union.
Non-members may be hired, but to retain
employment, they must become union members Under the agency — shop clause of a CBA, an
after a certain period. The requirement applies to employee is not required to join the union as a
present and future employees. (Azucena Vol. II-A, condition of continued employment, but must pay
9th ed., p. 346). the union a service fee (usually equivalent to union
dues and initiation fees). Since a union is required
An agreement where all new regular employees by statute to act as the bargaining representative
are required to join the union within a certain of all employees, both union and non — union,
period as a condition for their continued within their bargaining unit, the justification for the
employment. clause is that the nonmember should contribute
towards the cost of collective bargaining process
There is union shop when all new regular without supporting it financially.
employees are required to join the union within a
certain period as a condition for their continued 5. MODIFIED UNION SHOP
employment. (GMC v. Casio, G.R. No. 149552, Employees who are not union members at the time
2010) of signing the contract need not join the union, but
all workers hired thereafter must join. (Azucena
3. MAINTENANCE OF MEMBERSHIP Vol. II-A, 9th ed., p. 346).
SHOP
No employee is compelled to join the union, but all Enforcement of Union Security Clause
present or future members of the union must, as a
condition of employment, remain in good standing Termination Due to Union Security Provision
in the union. (Azucena Vol. II-A, 9th ed., p. 346). Termination of employment by virtue of a union
security clause embodied in a CBA is recognized
An agreement where present and future union and accepted in our jurisdiction. This practice
members must maintain their membership as a strengthens the union and prevents disunity in the
condition for continued employment until they are bargaining unit within the duration of the CBA. By
promoted or transferred out of the bargaining unit preventing member disaffiliation with the threat of
or the agreement is terminated. expulsion from the union and the consequent
There is maintenance of membership shop when termination of employment, the authorized
employees, who are union members as of the bargaining representative gains more numbers
effective date of the agreement, or who thereafter and strengthens its position as against other
become members, must maintain union unions which may want to claim majority
membership as a condition for (their) continued representation. (Alabang Country Club v. NLRC,
employment until they are promoted or transferred G.R. No. 170287, 2008)
out of the bargaining unit or the agreement is To validly dismiss an employee because of a union
terminated. (GMC v. Casio, G.R. No. 149552, shop or closed-shop provisions, there should be a
2010) clear and unequivocal statement that loss of good
standing in the union would be a cause for
4. AGENCY SHOP dismissal. (Confederated Sons of Labor v.
An agreement whereby employees must either Anakan Lumber Co., G.R. No. L-12503, 1960)
join the union or pay to the union as exclusive
bargaining agent a sum equal to that paid by the Requisites for Enforcement of Union Security
members. (Azucena Vol. II-A, 9th ed., p. 346). Clauses
In terminating the employment of an employee by
It is an arrangement whereby non-members must enforcing the union security clause, the employer
pay the union agency fees for the benefits they needs only to determine and prove that:
1. The union security clause is applicable
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2. The union is requesting for the dismissal of an employee. This holds true even if
enforcement of the union security the dismissal is predicated on particular causes for
provision in the CBA dismissal established not by the Labor Code, but
3. There is sufficient evidence to support the by the CBA. Further, in order that any CBA-
union's decision to expel the employee mandated dismissal may receive the warrant of
from the union; and the courts and labor tribunals, the causes for
4. The employer must comply with due dismissal as provided for in the CBA must satisfy
process: to the evidentiary threshold of the NLRC and the
a. Notify the employees that their courts. (Del Monte v. Saldivar, G.R. No. 158620,
dismissal is being requested by the 2006)
union;
b. The employees' explanations are Obligations and Liabilities
heard (Alabang Countiy Club v. Where the employer dismissed his employees in
NLRC, G.R. No 170287, 2008) the belief in good faith that such dismissal was
required by the (union security provision) of the
Employer's Responsibility: To conduct collective bargaining agreement with the union, he
separate investigation and hearing may not be ordered to pay back compensations to
While company may validly dismiss the such employees although their dismissal is found
employees expelled under the union security upon to be illegal. (Confederated Sons of Labor v.
the recommendation by the union, this dismissal Anakan Lumber Co., G.R. No. L-12503, 1960)
should not be done hastily and summarily thereby
eroding the employees' right to due process, self- As dictated by fairness, [...] the union shall be
organization and security of tenure. The liable to pay their backwages. This is because
enforcement of union security clauses is management would not have taken the action it did
authorized by law provided such enforcement is had it not been for the insistence of the labor union
not characterized by arbitrariness, and always with seeking to give effect to its interpretation of a
due process. Even if there are valid grounds to closed shop provision. (Guijamo v. C1R, G.R. Nos.
expel the union officers, due process requires that L-28791-93, 1973)
these union officers be accorded a separate
hearing by respondent company. (Malayang SIXTH ULP: DISCRIMINATION BECAUSE OF
Samahan ng Manggagawa sa M. Greenfield v. TESTIMONY (ART. 259 [F])
Ramos, G.R. No. 113907, 2000) To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given
Requirement of Due Process or being about to give testimony under this Code.
The requirements laid down by the law in
determining whether or not an employee was Note: This is the only ULP not directly related to
validly terminated must still be followed even if it is the right to self — organization. The testimony or
based on a (union security clause) of a CBA, i.e. proceedings might involve wages, employee's
the substantive as well as the procedural due benefits disciplinary rules, or organizational rights,
process requirements. As applied to the or anything covered by the Labor Code. What is
dismissals grounded on violations of the CBA, chargeable as ULP is the employer's retaliatory
observance of substantial due process is act regardless of the subject of the employee's
indispensable in establishing the presence of the complaint or testimony.
cause or causes for dismissal as provided for in
the CBA. Unfair labor practice refers to acts that violate the
workers' right to organize. The prohibited acts are
Substantive due process, as it applies to all forms related to workers' right to self-organization with
of dismissals, encompasses the proper the sole exception of Art. [259 (f)]. (Phi/corn
presentation and appreciation of evidence to Employees Union v. Philippine Global
establish that cause under law exists for the Communication, G.R. 126717, 1999).
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SEVENTH ULP: VIOLATION OF THE DUTY TO presented by the union. More than a month after
BARGAIN (ART. 259 [G]) the proposals were submitted by the union,
petitioner still had not made any counter-
To violate the duty to bargain collectively as proposals. This inaction on the part of petitioner
prescribed by this Code prompted the union to file its second notice of
strike. Petitioner could only offer a feeble
Both employers and labor organizations can explanation that the Board of Trustees had not yet
commit acts of unfair labor practices in collective convened to discuss the matters as its excuse for
bargaining. However, the labor organization must failing to file its reply.
be the representative of the employees before any
act it does may be considered as a violation of the A local union which is not independently registered
duty to bargain collectively. (Labor Code, Art. cannot exercise the rights and privileges granted
259[g] and 2601q) by law to legitimate labor organizations. The
employer cannot be faulted for refusing to
Four Forms of Unfair Labor Practice in negotiate with the unregistered chapter. (Abaria,
Bargaining et al v. Metro Cebu Community Hospital, G.R. No.
1. Failure or Refusal to Meet and Convene 154113, 2011)
2. Evading the Mandatory Subjects of
Bargaining An employer is guilty of ULP when he directly
3. Bad Faith in Bargaining discharges his employees to forestall a demand
4. Gross Violation of the CBA for collective bargaining, and also indirectly
causes that discharge by selling to a company that
FIRST FORM: FAILURE OR REFUSAL TO he knows is unwilling to accept his employees.
MEET AND CONVENE (Fernando v. Angat Labor Union, G.R. No. L-
17896, 1962)
Employer -cannot bargain directly with
employees Acts Not Deemed Refusal to Bargain
The employer cannot ignore the bargaining agent 1. Adoption of an adamant bargaining
and bargain directly with individual employees. position in good faith, particularly when
the company is operating at a loss;
Refusal to make counter-proposals — Effect is 2. Refusal to bargain over demands for
that CBA will be imposed on the union commission of ULP;
refusal to meet and convene promptly and 3. Refusal to bargain during period of illegal
expeditiously in good faith for the purpose of strike;
negotiating an agreement for wages, hours of 4. Refusal to bargain where there is no
work and other terms of employment. A company's request for bargaining;
refusal to make counter-proposal if considered in 5. Union seeks recognition for an
relation to the- entire bargaining process, may inappropriately large unit
indicate bad faith and this is especially true where
the Union's request for a counter proposal is left Note: Holding meetings that result in deadlocks, if
unanswered. (Kiok Loy v. NLRC, G.R. No. L- done in good faith, does not result in ULP. The
54334, 1986; Divine Word University, of Tacloban purpose of collective bargaining is the reaching of
v. Secretary of Labor, G.R. No. 91915, 1992) an agreement resulting in a contract binding on the
parties but the failure to reach an agreement after
Failure to reply - ULP negotiations have continued for a reasonable
Likewise, in Colegio de San Juan de Letran v. period does not establish a lack of good faith.
Association of Employees and Faculty of Letran (Union of Filipro Employees v. Nestle, G.R. Nos.
(G.R. No. 141471, 2000), petitioner-school was 158930-31, 2008).
declared to have acted in bad faith because of its
'failure to make a timely reply to the proposals
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SECOND FORM: EVADING THE MANDATORY "reasonable effort of good faith bargaining."
SUBJECTS OF BARGAINING (Samahan Ng Manggagawa sa Top Form
Where the subject of the dispute is a mandatory Manufacturing-United Workers of the Philippines
bargaining subject, either party may bargain to v. NLRC, G.R. No. 13856, 1998)
an impasse as long as he bargains in good faith.
A company's refusal to make counter-proposal, if
Where the subject is non-mandatory, a party may considered in relation to the entire bargaining
not insist on bargaining to the point of impasse. His process, may indicate bad faith and this is
insistence may be construed as evasion of the specially true where the Union's request for a
duty to bargain. counter-proposal is left unanswered." Considering
the facts of that case, the Court concluded that the
THIRD FORM: BARGAINING IN BAD FAITH company was "unwilling to negotiate and reach an
agreement with the Union." (Kiok Loy v. NLRC,
Determination of Good Faith: Question of Fact G.R. 54334, 1986).
The question whether or not a party has met his
statutory duty to bargain in good faith typically Inflexible Demands and Strike Amid
turns on the facts of the individual case. There is Negotiation — Bad Faith Bargaining
no per se test of good faith in bargaining. Good It is also evident from the records that the charge
faith or bad faith is an inference to be drawn from of bargaining in bad faith imputed to the
the facts. The question of good faith may be a respondent companies, is hardly credible. In fact,
question of credibility. The effect of an employer's such charge is valid as only against the
or a union's actions individually is not the test of complainant LAKAS. The parties had a total of 5
good-faith bargaining, but the impact of all such conferences for purposes of collective bargaining.
occasions or actions, considered as a whole, and It is worth considering that the first strike of Sept.
the inferences fairly drawn therefrom collectively 4 1967 was staged less than a week after the 4th
may offer a basis for the finding of the NLRC (The CBA conference and without any benefit of any
Hong Kong and Shanghai Banking Corporation previous strike notice. In this connection, it must
Employees Union v. NLRC, G.R. 125038, 1997). be stated that the notice of strike filed on June 13,
1967 could not have been the strike notice for the
An employer's steadfast insistence to exclude a first strike because it was already withdrawn on
particular substantive provision from the union's July 14, 1967. Thus, from these stated facts can
proposal is no different from a bargaining be seen that the first strike was held while the
representatives perseverance to include one that parties were in the process of negotiating. The
they deem of absolute necessity. (Union ofFilipro company's refusal to accede to the demands of
Employees v. Nestle-Philippines, G.R. Nos. LAKAS appears to be justified since there is no
158930-31, 2008) showing that these companies were in the same
state of financial and economic affairs. There is
Bargaining in Bad Faith Must Occur While reason to believe that the first strike was staged
Bargaining is in Process only for the purpose of compelling the respondent
The charge of bad faith should be raised while companies to accede to the inflexible demands of
the bargaining is in progress. With the execution the complainant LAKAS. (Lakas ng
of the CBA, bad faith can no longer be imputed Manggagawang Makabayan v. Marcelo
upon any of the parties thereto. All provisions in Enterprises, G.R. Nos. L-38258 & 38260, 1982)
the CBA are supposed to have been jointly and
voluntarily incorporated therein by the parties. This Other Examples of Bad Faith Bargaining
is not a case where private respondent exhibited
an indifferent attitude towards collective Surface Bargaining: A sophisticated pretense in
bargaining because the negotiations were not the the form of apparent bargaining does not satisfy
unilateral activity of petitioner union. The CBA is the statutory duty to bargain. The duty is not
good enough that private respondent exerted discharged by merely meeting together or simply
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manifesting a willingness to talk. An employer's and decide to bargain with a different group if there
proposals which could not be offered with any is no legitimate reason for doing so and without
reasonable expectation that they would be first following the proper procedure. (Employees'
accepted by the union constitute surface Union of Bayer v. Bayer Phil., G.R. No. 162943,
bargaining. (Standard Chartered Bank Employees 2010)
Union (NUBE) v. Confessor, G.R. No 114974,
2004) EIGHTH ULP: PAID NEGOTIATION (ART. 259
[H])
Blue Sky Bargaining: The making of To pay negotiation or attorney's fees to the union
exaggerated or unreasonable proposals in or its officers or agents as part of the settlement of
collective bargaining. (Standard Chartered Bank any issue in collective bargaining or any other
Employees Union (NUBE) v. Confessor, G.R. No. dispute
114974, 2004)
Note: Self— organization and collective bargaining
Boulwarism — occurs: are treasured rights of the workers. The law
1. When the employer directly bargains with zealously shields them from corruption. It is a
the employee disregarding the union; punishable act of ULP for the employer to pay the
2. The aim was to deal with the union union or any of its officers or agents any
through the employees, rather than with negotiation fee or attorney's fees as part of the
the employees through the union; settlement in collective bargaining or any labor
3. Employer submits its proposals and dispute. To do so is not only unlawful. It is ethically
adopts a "take it or leave it" stand. (NLRB reprehensible. Correspondingly, Art. 260 prohibits
v. General Election Co., 418 F. 2d 736 union officers or agents from asking for or
(1970) accepting such payments. Such act, furthermore,
is a ground for cancellation of union registration
FOURTH FORM: GROSS VIOLATION OF THE under Art. 247(g). (Azucena Vols. II-A andII-B, 9th
CBA ed., 2016, p. 362).
ULP exists in this form when the complaint shows NINTH ULP: VIOLATION OF THE CBA (ART.
prima facie the concurrence of two things: 259 [I])
1. There is a gross violation of the CBA;
and See above discussion on Fourth Form of ULP in
2. The violation pertains to the economic Bargaining.
provisions of the CBA (Silva v. NLRC,
G.R. No. 110226, 1997) Note: Under Art. 259, simple violation of the
collective bargaining agreement is no longer
Gross: Refers to a flagrant and/or malicious treated as unfair labor practice but as mere
refusal by a party to comply with the [economic grievance, which should be processed through the
provisions] (FASAP v. PAL, G.R. No. 178083, grievance machinery in the CBA. It becomes an
2008). unfair labor practice only when it is gross in nature,
Total Disregard of CBA Constitutes ULP which means that there is flagrant and/or
Reference to the economic provisions of the CBA malicious refusal to comply with the economic
is not a necessary element of ULP where the provisions of such agreement by either the
employer in effect totally disregarded the CBA. employer or the union.
(Employees' Union of Bayer v. Bayer Phil., G.R.
No. 162943, 2010) In the case of Master Union Labor Union v. NLRC,
(G.R. No. 92009, 1993), Master Iron Works
An employer should not be allowed to rescind Construction Corporation's insistence that the
unilaterally its CBA with the duly certified hiring of casual employees is a management
bargaining agent it had previously contracted with, prerogative betrays its attempt to coat with legality
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the illicit curtailment of its employees' right to work Gochangco Workers Union v. NLRC, G.R. No. L-
under the terms of the contract of employment and 67153, 1988)
to a fair implementation of the CBA.
However: In another decision the SC approved a
Relief In ULP Cases compromise agreement finally settling an illegal
1. Cease and Desist Order strike case. The agreement in that case was
To support a cease and desist order, the voluntarily entered into and represented a
record must show that the restrained reasonable settlement, thus binding. (see
misconduct was an issue in the case; that Reformist Union of R.B. Liner v. NLRC, G.R. No.
there was a finding of fact of said 120482, 1997)
misconduct and such finding was
supported by evidence. ULP in a given period should be included in a
single charge
The Court is not authorized to issue blank When a labor union accuses an employer of acts
cease and desist orders, but must confine of unfair labor practice allegedly committed during
its injunction orders to specific act or acts a given period of time, the charges should include
which are related to past misconduct. all acts of unfair labor practice committed against
(Azucena Vols. II-A and II-B, 9th ed., any and all members of the union during that
2016, p. 363). period. The union should not, upon the dismissal
of the charges first preferred, be allowed to split its
2. Affirmative Order cause of action and harass the employer with
In addition to a cease and desist order, the subsequent charges, based upon acts committed
court may issue an affirmative order to during the same period of time. (Dionela, et. al. v.
reinstate the said employee with back pay CIR et. al., G.R. No. L-18334, 1963)
from the date of the discrimination.
3. ULP BY LABOR ORGANIZATIONS
The order may usually direct the full
reinstatement of the discharged Kinds of ULP by Labor Organizations (Labor
employees to their substantially code, Art. 260)
equivalent position without prejudice to 1. To restrain or coerce employees in the
their seniority and other rights and exercise of their right to self —
privileges. organization.
2. To attempt to or cause an employer to
If other laborers have been hired, the discriminate against an employee to
affirmative order shall direct the whom membership in the labor
respondent to dismiss these hired organization was denied or to terminate
laborers to make room for the returning an employee on any ground other than the
employee.(Azucena Vols. II-A and II-B, usual terms and conditions under which
9th ed., 2016, p. 363). membership or continuation of
membership is made available to other
3. Court may impose the union's proposed members.
CBA on the employer. (Kiok Loy v. NLRC, 3. To refuse to bargain collectively with the
G.R. No. L-54334, 1986) employer, if it is the representative of the
employee.
4. Strike by union members (Labor code, Art. 4. To attempt to or cause the employer to
278) pay money or other things of value, in the
nature of an exaction, for services which
ULP is not subject to compromise are not performed or not to be performed.
ULP cases are not, in view of the public interest This includes fees for union negotiations.
involved, subject to compromise. (CLLC E.G.
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5. To ask or accept negotiations or interference does not amount to restraint or

attorney's fees from employers as part of coercion. (Azucena Vols. 11-A and 11-B, 9th ed.,
the settlement in any dispute. 2016, p. 368).
6. Violation of CBA.
SECOND ULP: UNION-INDUCED
FIRST ULP: RESTRAINT OR COERCION BY DISCRIMINATION (ART. 260[B])
LABOR ORGANIZATION; INTERFERENCE BY
UNION IS NOT ULP (ART. 260 [Al) Three (3) Kinds of Discrimination that the
Union may commit under Art. 260(b)
A labor organization commits ULP when it 1. Act of the union to cause or attempt to
restrains or coerces employees in their right to self cause an employer to discriminate against
— organization. an employee, in general, irrespective of
whether he/she is a member or non-
A labor organization may interfere in the member of the union
employees' right to self — organization as long as 2. Discriminatory act of the union against an
the interference does not amount to restraint or employee "with respect to whom
coercion. membersgip in such organization has
been denied."
3. Discriminatory act of the union against an
Union cannot coerce employees to join a strike
employee whose membership therein has
Similarly, a violation is committed when a union been terminated based "on any ground
threatens the employees with bodily harm in order other than usual terms and conditions
to force them to strike. under which membership or continuation
of membership is made available to other
A union violates the law when, in order to restrain members."
or coerce non-strikers from working during the
strike, it: Arbitrary use of union security clause
1. Assaults or threatens to assault them The broad rule is that the union has the right to
2. Threatens them with the loss of their jobs determine its membership and to prescribe the
3. Blocks their ingress to and egress from conditions for the acquisition and retention thereof.
the plant Consequently, admission to membership may not
4. Damages non-strikers' automobiles or be compelled.
forces them off the highway
5. Physically preventing them from working This rule, however, is qualified in the case of labor
6. Sabotages the employer's property in unions holding a monopoly in the supply of labor,
their presence, thereby creating an either in a given locality, or as regards a particular
atmosphere of fear or violence employer by reason of a closed — shop or similar
7. Demonstrates loudly in front of a non- agreements. In such case, qualified applicants
strikers' residence with signs and shouts may not be barred by unreasonable rules.
accusing the non-striker of "scabbing"
8. Holding the nonstriker up to ridicule Salunge v. CIR (G.R. No. L-22456, 1967)
9. Seeking public condemnation of the non- An employee resigned from the union. The union
striker requested the company to enforce the closed-
shop provision of the CBA. Company deferred
Note: Interference, which is ULP with employers, action and informed the employee of the possible
is not ULP when done by a labor organization effects of his resignation from the union. Employee
because it is part and parcel of the duties and tried to revoke his resignation from the union but
functions of a labor organization. this is denied by the union. Company finally
granted the request of the union and terminated
A labor organization may interfere in employees' the employee. Employee complained of illegal
right to self organization as long as the dismissal.
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In spite of employee assertions that these so-

The Court held that labor unions are not entitled called featherbedding [or make-work] practices
to arbitrarily exclude qualified applicants for are directly related to job security, or health and
membership. A closed-shop provision will not safety, most courts at common law found these
justify the employer in discharging, as well as a practices to be economically wasteful and without
union insisting upon the discharge of an employee any legitimate employee justification. (Cox, Cases
whom it refuses to admit, without any reasonable and Materials on labor Law, NY, 1977, p.919, cited
ground thereof. Having been dismissed from in Azucena Vols. II-A and II-B, 9th ed., 2016, p.
service owing to unfair labor practice on the part of 372).
the union, petitioner is entitled to reinstatement as
member of the union and to his former or Note: It may take the form of minimum crew
substantially equivalent position in the company, regulations on the railroad, make — work rules
without prejudice to his seniority and/or rights and such as the setting of and prompt destruction of
privileges, and with back pay. Union security unneeded bogus type in the newspaper industry,
clauses are also governed by law and by principles stand — by pay for musicians when a radio station
of justice, fair play, and legality. Union security broadcasts music from phonograph records or
clauses cannot be used by union officials against production ceilings for work on the assembly lines
an employer, much less their own members, or at the construction site.
except with a high sense of responsibility, fairness,
prudence and judiciousness. (Manila Mandarin Requisites for featherbedding:
Employees Union v. NLRC, G.R. No. 76989, 1987) 1. Labor organization, its officers, agents or
representatives have caused or attempted
THIRD ULP: REFUSAL TO BARGAIN (ART. to cause an employer either:
260(C)) a. To pay, or agree to pay any
A union violates its duty to bargain collectively by money, including the demand for
entering negotiations with a fixed purpose of not fee for union negotiations
reaching an agreement or signing a contract. b. To deliver or agree to deliver any
things of value
2. Such demand for payment of money or
Requisites
delivery of things of value is in the nature
1. Union is the duly certified bargaining of an exaction
agent (Lakas ng Manggagawang 3. The services contemplated in exchange
Makabayan v. Marcelo Enterprises, G.R. for the exaction are not actually performed
No. L-38258, 1982) or will not be performed (Labor code, Art.
2. Commits any of the following: 260 (d)).
a. Violation of the duty to bargain
collectively
b. Refusal to bargain collectively
with the employer
See above discussion on Forms of ULP in

Collective Bargaining
FOURTH ULP: FEATHERBEDDING AND MAKE

— WORK ARRANGEMENTS (ART. 260 [D])
Featherbedding: Employee practices which

create or spread employment by unnecessarily
maintaining or increasing the number of
employees used, or the amount of time consumed,
to work on a particular job.
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UNFAIR LABOR PRACTICES OF EMPLOYERS vs. UNFAIR LABOR PRACTICES

OF LABOR ORGANIZATIONS
_ Art. 259 _Art. 260

(EMPLOYERS) (LABOR ORGANIZATIONS)
To interfere with, restrain or coerce (IRC) To restrain or coerce (RC) employees in the
employees in the exercise of their right to self- exercise of their right to self-organization
organization (However, a labor organization shall have the right
to prescribe its own rules with respect to the
acquisition or retention or membership)
TO4:441e a ,,collectj]veqb4fgOttgrg- azeernent To Vielate.a collective bargainirrg adreernent
To violate the duty to bargain collectively as To violate the duty, or refuse to bargain collectively
prescribed by the Labor Code with the employer (provided it is the representative
of the employees)
To r uirei as a donditiOn' o ,(Arnpl yrnent that 2 To ripe or attempt to cause aii -employer to
perSon', Or an employee'- shall no join a labor discriminate against an employee! including
organization or shall withdraw from -rie. - discrimination againOwj T,-CPloyeelyigvespect to
whom membership KliiMorgani2Orcitlas been
denied or to terrninagM.inplOyeeV4ily. ground
other tnan the usual terms and conditions
To contract out services or functions being To cause or attempt to cause an employer to pay
performed by union members when such will or deliver or agree to pay or deliver any money or
interfere with, restrain or coerce employees in the other things of value, in the nature of an exaction,
exercise of their rights to self-organization for services which are not performed or not to be
performed including demand for fee for union
negotiations (Featherbedding)
To Hate, dominaT, $t --ro-aK
efwise ipteitoe: for dr accePt n6gcit!at Of O(attp.MOV$f0,0
'..vith the:
- , s fbrrnation' '
: () administration
,, ,.., _ of any
.-g.., - -
lab4
F
prom employers as pail% 'IV: setiredaSE14
organization including ;:tfie',.'gkiirigj'ef: financial or issue in collective bargaining or any other dispute
' •-,,-."-,,gr,:'
oti f,,mpp9f-t to it or its *§914:erj.or, supporters
To discriminate in regard to wages, hours of work
and other terms and conditions of employment in
order to encourage or discourage members of any
'labor organization
T&-:.'drs'miss,. Ai§e1),0:0&7.6t::61,41*Wdiki,i:iiii0-0te •
4pins( an ernpftit:ee for having given or being
r4-01-104%**I .644,04:3, 101AT 0617)9z, Coe
To pay negotiation or attorney's fees to the union
or its officers or agents as part of the settlement of
any issue in collective bargaining or any other
dispute
NOTE: Provided that only the officers, members of governing boards, representatives or agents or
members of labor associations or organization who have actually participated in, authorized or ratified unfair
labor practices shall be held criminally liable.
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F. PEACEFUL CONCERTED ACTIVITIES 5. Work stoppage is done through

concerted action
Concerted Action: An activity undertaken by two 6. The striking group is a legitimate labor
or more employees; by one on behalf of others. organization. In case of bargaining
deadlock, it must be the employee's sole
It is the policy of the State to encourage free trade bargaining representative.
unionism and free collective bargaining. Workers
shall have the right to engage in concerted Internal union dispute: Includes all disputes or
activities for purposes of collective bargaining or grievances arising from any violation of or
for their mutual benefit and protection. (Labor disagreement over any provision of the
Code, Art. 278) constitution and by — laws of a union, including
any violation of the rights and conditions of union
Forms of Concerted Activities (Labor Code, membership provided for in this Code (Ilaw at
Art. 278) Buklod ng Manggagawa (IBM) v. NLRC), G.R.
1. Strike; Nos. 81852-53, 1993).
2. Lockout; and
3. Picketing Grounds for Strike or Lockout
1. Unfair Labor Practice (ULP) of the
1. BY LABOR ORGANIZATION Employer
2. Collective Bargaining Deadlock (CBD)
1. STRIKE
NOTE: Violations of CBA must be gross to be
Any temporary stoppage of work by the concerted considered as ULP
action of the employees as a result of an industrial
or labor dispute. (Labor code, Art. 219 (o)) Conversion Doctrine: A strike may start as
economic and, as it progresses, becomes ULP,
Note: The term "strike" has been elucidated to or vice-versa.
encompass not only concerted work stoppage,
but also slowdowns, mass leaves, sit downs, Different Kinds of Strike
attempts to damage, destroy or sabotage plant 1. LEGAL STRIKE — one called for a valid
equipment and facilities, and similar activities. purpose and conducted through means
(Toyota Motor Phi/s. Corp Workers Assoc. v. allowed by law;
NLRC, G.R. Nos. 158798-99, October 19, 2007) 2. ILLEGAL STRIKE — one staged for a
purpose not recognized by law, or if for a
Labor Dispute includes any controversy or valid purpose, conducted through means
matters concerning terms and conditions of not sanctioned by law;
employment or the association or representation 3. ECONOMIC STRIKE — one staged by
of persons in negotiations, fixing, maintaining, workers to force wage or other economic
changing, or arranging the terms and conditions concessions from the employer which he
of employment, regardless of whether or not the is not required by law to grant
disputants stand in the proximate relation of (Consolidated Labor Association of the
employers and employees (Labor code, Art. Phil. vs. Marsman and Company, G.R.
219(l); Gold City Integrated Port Services v. No. L-17038, 1964);
NLRC, G.R. No. 103560 & 103599, 1995) 4. ULP STRIKE — one called to protest
against the employer's acts of unfair
Characteristics of a Strike labor practice enumerated in the Labor
1. There must be an employer-employee Code;
relationship 5. SLOWDOWN STRIKE — one staged
2. Existence of a dispute without the workers quitting their work but
3. Employment relation is deemed to merely slackening or by reducing their
continue although in a state of belligerent normal work output;
suspension 6. WILD-CAT STRIKE — one declared and
4. There is temporary work stoppage staged without filing the required notice
PAGE 142 OF 244
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of strike and without the majority volition or refuse openly or secretly to the
approval of the recognized bargaining employer's damage, to do other work. They work
agent; on their own terms. But whether or not the
7. SIT DOWN STRIKE — one where the workers' activity in question—their concerted
workers stop working but do not leave adoption of a different work schedule than that
their place. prescribed by management and adhered to for
several years—constitutes a slowdown need not
Strike-breaker: Any person who obstructs, be gone into. The activity is contrary to RA6727
impedes, or interferes with by force, violence, and the parties' CBA (Ilaw at Buklod v. NLRC,
coercion, threats, or intimidation any peaceful G.R. No. 91980, June 27, 1991)
picketing affecting wages, hours or conditions of
work or in the exercise of the right of self- Non-Strikeable Issues (NCMB, Manual of
organization or collective bargaining (Labor code, Procedures in Settlement and Disposition of
Art. 219(r)) Conciliation and Preventive Mediation Cases,
Rule VI, Sec. 6(c)(i); see University of San
Strike Area: Establishments, warehouses, Agustin Employees' Union-FFW v. CA, G.R.
depots, plants or offices, including the sites or No. 169632, 2006).
premises used as runaway shops, of the 1. Labor Standards Cases;
employer struck against, as well as the immediate 2. Wage Distortion;
vicinity actually used by picketing strikers in 3. Inter-Union or Intra-Union Disputes;
moving to and fro before all points of entrance to 4. Physical Re-arrangement of the Office
and exit from said establishment (Labor code, Art. (Reliance Surety and Insurance Co., v.
219 (s)) NLRC, G.R. Nos. 86917-18, 1991);
5. Execution and Enforcement of Final
Boycott: A combination of many to cause a loss Orders, Decisions, Resolutions, or
to one person by causing others, against their will, Awards in the Cases Mentioned in # 6;
to withdraw from him their beneficial business 6. Cases pending at the DOLE Regional
intercourse through threats that unless others do Offices, BLR, NLRC, DOLE Secretary,
so, the many will cause similar loss to him or Voluntary and Compulsory Arbitrators,
them. (31 Am Jur., Sec. 250, p. 956) CA, and SC;
7. Violations of CBA which are resolved via
Slowdown: A method by which one's employees, Grievance Machinery;
without seeking a complete stoppage of work, 8. Company's Sales Evaluation Policy
retard production and distribution in an effort to (GTE Directories v. Hon. Sanchez, G.R.
compel compliance by the employer with the No. 76219, 1991); and
labor demands made upon him. (Rothenberg, p. 9. Issues covered by a No-Strike
101) Commitment in the CBA
Unlike other forms of strike, the employees Who can declare a strike or lockout
involved in a slowdown do not walk out of their 1. Any certified or duly recognized
jobs to hurt the company. They need only to stop bargaining representative on the grounds
work or reduce the rate of their work while of bargaining deadlock and ULP;
generally remaining in their assigned postill 2. Employer; or
(Fadriquelan v. Monterey Foods Corp., G.R. Nos. 3. In the absence of #1, any legitimate labor
178409 & 178434, 2011) organization in the establishment (IRR
Labor Code, Sec. 2, Rule XII, Book V)
Note: Such slowdown is generally condemned as
inherently illicit and unjustifiable, because while 1) VALID VERSUS ILLEGAL STRIKES
the employees continue to work and remain at
their positions and accept the wages due them, An Illegal Strike is one which: PPP-MIA
they at the same time select what part of their
allocated task they care to perform of their own
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1. Is contrary to a specific Prohibition of law, 1. NOTICE OF STRIKE

such as strike by employees performing
governmental functions WHERE FILED: Regional Branch of the National
2. Violates a specific requirement of law (as Conciliation and Mediation board, copy furnished
to Procedure) the employer or the union, as the case may be.
3. Is declared for an unlawful Purpose, such
as inducing the employer to commit an WHEN FILED: At least 30 days, in case of CBD,
and at least 15 days, in case of ULP, before the
unfair labor practice against nonunion
intended date of strike,
employees
4. Employs unlawful Means in the pursuit of WHO FILES NOTICE OF STRIKE
its objective, such as widespread
ULP • DEADLOCK
terrorism of non-strikers
Duly recognized Or
5. Violates an existing Injunction
certified bargaining
6. Contrary to an existing Agreement, such
agent ONLY EXCLUSIVE
as a no-strike clause or conclusive
BARGAINING
arbitration clause (Toyota Motor Phil.
If none, unrecognized REPRESENTATIVE
Workers Association v. NLRC, G.R. No.
labor union, provided
158789, 2007)
union is duly registered.
FIRST FACTOR: STATUTORY PROHIBITION • CONTENTS OF NOTICE
BARGAINING DEADLOCK ' - ULP .
Employees in the public service may not engage Notice shall, as far as Notice shall, as
in strikes. While the Constitution recognizes the practicable, further state the far as
right of government employees to organize, they
unresolved issues in the practicable,
are prohibited from staging strikes, bargaining negotiations and state the acts
demonstrations, mass leaves, walk-outs and be accompanied by the complained of
other forms of mass action which will result in written proposals of the and the efforts
temporary stoppage or disruption of public union, the counter-proposals taken to
service. The right of government employees to of the employer and the proof resolve the
organize is limited only tot the formation of unions of a request for conference to dispute
or associations, without including the right to settle the differences. amicably.
strike. (Bangalisan, et al. v. CA, G.R. No. 124687,
NOTE: In case notice does not conform with
1997) requirements of this and foregoing section/s, the
Regional branch of the Board shall inform the
SECOND FACTOR: PROCEDURAL concerned party of such fact. (Club Filipino, Inc.
REQUIREMENTS v. Bautista, G.R. No. 168406, 2015)
PROCEDURAL REQUIREMENTS (Labor code,

Art. 278)
1. Notice of Strike
2. Cooling-off Period
3. Strike Vote
4. Strike Vote Report
5. 7-day strike/lockout ban
These requirements are mandatory, meaning,

non-compliance therewith makes the strike
illegal. (Azucena Vol. II-A, 9th ed., p. 594).
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2. COOLING-OFF PERIOD vote, and the date, place, and time thereof, the
NCMB cannot determine for itself whether to
• BARGIANING • - supervise a strike vote meeting or not and insure
- ULP
DEADLOCK its peaceful and regular conduct. The failure of a
30 days 15 days union to comply with the requirement of the giving
of notice to the NCMB at least 24 hours prior to
NCMB, upon receipt of the notice of strike and the holding of a strike vote meeting will render the
during the cooling-off period, mediates and subsequent strike staged by the union illegal.
conciliates the parties. The Regional branch of (Capitol Medical Center Inc. v. National Labor
the Board may, upon agreement of the parties, Relations Commission, G.R. No. 147080, 2005)
treat a notice as a preventive mediation case. It
shall also encourage the parties to submit the NUMBER OF VOTES REQUIRED for stike/
dispute to voluntary arbitration.
lockout: Majority of the total UNION
In cases of ULP strike, the cooling-off period need MEMBERSHIP OR OF THE DIRECTORS OR
not be observed when union-busting is present. PARTNERS, as the case may be.
(Labor code, Art. 278)
Strike or lockout vote
Elements of Union Busting: (Labor code, Art. 1. Approved by majority of total union
278(c)) membership or by majority of the BOD or
1. The union officers are being dismissed partners
2. Those officers are duly elected in 2. By a secret ballot
accordance with the union constitution 3. In a meeting called for that purpose
and by-laws
3. The existence of the union is threatened 4. STRIKE VOTE REPORT
The result of the strike/lockout vote should be
3. STRIKE VOTE (Labor code, Art. 278(f)) reported to the NCMB at least 7 days before the
A strike/lockout vote should be taken by secret intended strike or lockout, subject to the cooling-
balloting, in meetings or referenda specially off period. Labor code, Art. 278 (f))
called for the purpose. If the strike vote is filed within the cooling-off
The regional branch of the Board may, at its own period, the 7-day requirement shall be counted
initiative or upon request of any affected party, from the day following the expiration of the
supervise the conduct of the secret balloting. cooling-off period. (NCMB's Primer on Strike,
NOTE: Picketing and Lockout)
The requirement of giving notice of the conduct of If the union is being busted, there is no need to
a strike vote to the NCMB at least 24 hours before observe the cooling-off period but the unions
the meeting for the said purpose is designed to must still file a notice of strike, take a strike vote
(a) inform the NCMB of the intent of the union to and submit the strike vote report. What is being
conduct a strike vote; excused in case of union busting is only the
(b) give the NCMB ample time to decide on observance of the 15-day cooling-off period.)
whether or not there is a need to supervise the (Sec. 7, D.O. 40-G-03, 2010)
conduct of the strike vote to prevent any. acts of
violence and/or irregularities attendant thereto; No strike or lockout can be declared while a case
and is pending involving the same grounds for strike
(c) should the NCMB decide on its own initiative or lockout. (Bulletin v. Sanchez, G.R. No. 74425,
or upon the request of an interested party 1986)
including the employer, to supervise the strike
vote, to give it ample time to prepare for the The submission of the report gives assurance
deployment of the requisite personnel, including that a strike vote has been taken and that, if the
peace officers if need be. report concerning it is false, the majority of the
members can take appropriate remedy before it
Unless and until the NCMB is notified at least 24 is too late.' The seven (7)-day waiting period is
hours of the union's decision to conduct a strike intended to give the Department of Labor and
PAGE 145 OF 244
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Employment an opportunity to verify whether the resolution or awards in

projected strike really carries the imprimatur of No. 4. Above
the majority of the union members. The need for Any issue covered by a
assurance that majority of the union members no-strike commitment in
support the strike cannot be gainsaidlll a duly executed CBA
(Lapanday Workers Union v. National Labor (NCMB, Manual of Procedures in the Settlement
Relations Commission, G.R. Nos. 95494-97, and Disposition of Conciliation and Preventive
[September 7, 1995], 318 PHIL 114-127) Mediation Cases)
Legal and Enforceable Dismissal of ULP Strike in Good Faith

Employees during Conciliation It is not even required that there be in fact an
unfair practice committed by the employer. It
When the strike notice was filed by the union, the
suffices if such a belief in good faith is entertained
chain of events which culminated in the by labor as the inducing factor for staging a strike.
termination of the 14 salespersons' employment (Shell Oil Union v. Shell Oil Company, G.R. No.
was already taking place; the series of defiant L-28607, 1971)
refusals by said sales representatives to comply
with GTE's requirement to submit individual If the management performed acts which, under
reports was already in progress. At that time, no the circumstances, the strikers believed were
less than 3 of the ultimate 6 direct orders of the unfair labor practices on the part of the
employer for the submission of the reports had management, although they were not, the court
already been disobeyed. The filing of the strike rules that the strike cannot be held illegal.
notice, and the commencement of conciliation However, the union's belief needs some rational
activities by the BLR did not operate to make basis. (Azucena Vol. 11-A, 9th ed., p. 617)
GTE's orders illegal and unenforceable so as to
excuse continued noncompliance therewith. NOTE: The good faith strike doctrine does not
(GTE Directories v. Sanchez, G.R. No. 76219, tolerate groundless strike. It does not excuse the
1991) union's presentation of substantial evidence to
support its allegation of ULP by the employer.
THIRD FACTOR: UNLAWFUL PURPOSE
Such requirements as the filing of a notice of
STRIKEABLE strike, strike vote and notice given to DOLE are
NON-STRIKEABLE ISSUES-
ISSUES mandatory in nature and apply even to ULP strike
1. CBA 1. Inter/Infra-union disputes in good faith. (Azucena Vol. 11-A, 9th ed., p. 621)
deadlock 2. Violation of labor
2. Employer's standards law, unless Strike to Compel Recognition of and
ULP Article (258) particularly Bargaining with the Majority Union
clause (c), (f), or (i), is The legal way to secure union recognition is not
also violated through strike but through a certification process.
3. Any issue involving wage This is why Article 278 (b) prohibits strike due to
distortion inter-union or intra-union dispute.
4. Cases pending at DOLE
regional offices, BLR, But where the majority status of a union is not in
NLRC or its regional doubt, not in dispute, or is certainly established
branches, NWPC and its and, despite this, the employer still refuses to
regional wage boards, bargain, then the situation is one of refusal to
office of the Secretary, bargain which is ULP by employer. (Caltex
Voluntary Arbitrator, CA, Filipino v. CIR, G.R. Nos. L-30632-33, 1972)
SC
Execution and Minority Union Cannot Strike
enforcement of final Defeated union cannot lawfully undertake a strike
orders, decisions, against the employer; if one is being done, it must
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come to a halt. (United Restauror's Employees & Non-Strikeable Issues

Labor Union, G.R. No. L-24993, 1968). 1. Physical rearrangement of office
2. Company's sales evaluation policy
Trivial, Unjust or Unreasonable Strike Illegal 3. Salary distortion under the Wage
The walkout was premature as it was declared Rationalization Act
without giving the General Manafer, or the Board 4. Inter-Union or lntra-union dispute
of Directors of the Company a reasonable time
within which to consider and act on the demands FOURTH FACTOR: UNLAWFUL MEANS
submitted by the Union. The nature of the
demands was such that no possible action could Strike may be illegal for commission of
be taken thereon by the officials to whom they prohibited acts. Despite the validity of the
purpose of a strike and compliance with the
were submitted. They could have only been acted
procedural requirements, a strike may still be
upon by the General Manager, or by the Board of held illegal where the means employed are
Directors. The former was then in Bacolod, and illegal.The means become illegal when they
the latter could not be convened because the come within the prohibitions under Article 279(e)
chairman and two of its members were also of the Labor Code. (Phimco Industries, Inc v.
absent. This fact was well known to the leaders of Phimco Industries Labor Association (P/LA),
the Union. The Court of Industrial Relations, G.R. No. 170830, 20/0)The strike had been
therefore, acted rightly in declaring said strike attended by the widespread commission of
unjustified and illegal. (Industrial Paper v. Insular prohibited acts. Well-settled is the rule that even
Sugar, G.R. No. L-7394, 1954) if the strike were to be declared valid because its
objective or purpose is lawful, the strike may still
be declared invalid where the means employed
Acts Calculated to Force Disruption of are illegal. Among such limits are the prohibited
Operations, Thereby Violating the No-strike activities under Article [279] of the Labor Code,
Clause in the CBA, Constitute Illegal Strike particularly paragraph (e), which states that no
The Union officers and members' concerted person engaged in picketing shall:
action to shave their heads and crop their hair not
only violated the Hotel's Grooming Standards but a) commit any act of violence, coercion, or
also violated the Union's duty to bargain in good intimidation or
faith. By shaving their heads and cropping their b) obstruct the free ingress to or egress from the
hair, the Union officers and members violated employer's premises for lawful purposes, or
then Section 6, Rule XIII of the IRR of Book V of c) obstruct public thoroughfares. (Sukhothai
the Labor Code. This rule prohibits the Cuisine v. CA, G.R. No. 150437, 2006)
commission of any act which will disrupt or
NOTE: Whoever commits these acts — union
impede the early settlement of the labor dispute officers or members, employees or non-
that are under conciliation. Since the bargaining employees — is answerable for the acts.
deadlock is being conciliated by the NCMB, the The use of violence, intimidation, restraint or
Union's action to have their officers and coercion in carrying out concerted activities,
members' heads shaved was manifestly which are injurious to the rights of property or to
calculated to antagonize and embarrass the Hotel particular individuals, makes a strike illegal. (Cf.
management and in doing so effectively disrupted Liberal Labor Union v. Phil. Can Co, G.R. No. L-
the operations of the Hotel and violated their duty 4834, 1952)
to bargain collectively in good faith. (NUWHRAIN-
Acts of violence justify the dismissal of the guilty
APL-1UF v. CA, G.R. No. 163942, 2008)
strikers. (Shell Oil Workers' Union v. Shell
Company, G.R. No L-28607, 1971)
Strike motivated by an unreasonable demand of
the labor union for the dismissal of a factory The mere filing of charges against an employee
foreman is illegal and unjustified. (Luzon Marine for alleged illegal acts during a strike does not by
v. Roldan, G.R. No. L-2660, 1950) itself justify dismissal. The charges must be
proved at an investigation duly called where the
employee shall be given an opportunity to defend
himself. This is true even if the alleged ground
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constitutes a criminal offense. (Almira v. B.F. . Phila. Corp v. NLRC

Goodrich Phil., Inc., G.R. No. L-34974, 1974) ,G.R.. 'Nos. 158786
.&158799,-2007) •
Violence on Both Sides
Where violence was committed on both sides
during a strike, such violence cannot be a ground b Ordina Em ee
for declaring the strike as illegal. (Malayang Participation in Participation in
Samahan ng mga Manggagawa v. Ramos, G.R. Lawful Strike . Illegal Strike
No. 113907, 2000) _
rhpipyee. who Meru finding or
.participates in laWfuls, ''declaration of illegality
Liability of Union Officers and Ordinary strike is nbt deemed of 6: strike will not
Members abandoned .,losuit in termination of
to 7: have at),andpin0
Declaration of a strike does not amount to a his employment Out is Ordiri iry union
renunciation of the employment relation (Rex rnerOlY exOtisina,:.'his rnerilbers—
Taxi Cab v. CIR, G.R. No. 47303, 1940). righ,
organization,
a) Union Officer Mere participation of An ordinary striking
Participation in. Participation in a worker in a lawful employee can not be
Lawful
,• Strike Illegal Strike strike cannot terminated for mere
„...
Mereparticipation of a, Mere •fihain or constitute sufficient participation in an
; worker in d'O-Pl r iOh of ground for termination illegal strike. There
strike Cannot illegality strike of his employment, must be proof that he
constitute
. sufficient
. will:: result -.the, even if replacement committed illegal acts
, ground : for termination
t • ,, teirniriatiOn' air had been hired by the during the strike and
al; his employment,: union . .officers. - w employer during such the striker who
Qyen". Sif 'cip:006enierit knowingly lawful strike (Labor participated in the
i -i66140entiiroo bythe- code, Art. 279 (a) commission of illegal
enipf6yer.daring such: 'illegal , strike (paragraph 3) act[s] must be
ul strike , (Labor. LaPapdaY Wciikersi: identified. But proof
9 ( 010. sG• • beyond reasonable
cie: 9594= -1995) doubt is not required.
It is not required, for Substantial evidence
purposes of available under the
termination that the circumstances, which
officers should may justify the
commit an illegal act imposition of the
during the strike penalty of dismissal,
(Phimco Industries, may suffice. (Toyota
Inc. v. Phimco Motors Phils. Corp v.
Industries Labor NLRC, G.R. Nos.
Association, G.R. No. 158786 &158799,
170830, 2010) 2007
Any union_ officer.-
.knowingly Reason for distinction: The responsibility of
participaies. in . union officers, as main players in an illegal
illegal strike and strike, is greater than that of the members and,
any ViOrker. therefore, limiting the penalty of dismissal only
• . , Or
union officer who for the former for participation in an illegal strike
knowingly.' is in order. (Solidbank Corporation v. Gamier,
-
participates in the G.R. No. 159460, 2010)
commission of
Officials' Inability to Leave Premises Not
illegal acts
Illegal Detention
.During a May There was no kidnapping as the detention or
be declared... to have . deprivation of liberty under the circumstance
lost his employment while certainly not to be justified, was not done
status (Toyota Motors
PAGE 148 OF 244
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with criminal intent. (People v. Barba, 20SCRA The substitutionary doctrine only provides that
663, 1969) the employees cannot revoke the validly-
executed collective bargaining contract with their
Blockade or Obstruction employer by the simple expedient of changing
Illegal obstructions on public thoroughfares, such their bargaining agent. It cannot be invoked to
as streets or sidewalks, are nuisances which local
support the contention that a newly certified
government authorities can summarily remove.
collective bargaining agent automatically
Waiver of Illegality of Strikes assumes all the personal undertakings — like the
Where the ER voluntarily agrees to reinstate the no strike stipulation — in the CBA made by the
strikers, such agreement on the part of the ER deposed Union. (Benguet Consolidated v. BC!
constitutes a waiver of the defense that the strike Employees, G.R. No. L-24711, 1968)
was illegal
If Members Disregard No-Strike Clause, Union
May Become Liable
FIFTH REQUIREMENT: INJUNCTION A union which agrees to an express no-strike
clause impliedly agrees to undertake every
See discussion under assumption ofjurisdiction reasonable means to induce members
participating in an unauthorized strike to return to
SIXTH REQUIREMENT: EXISTING work. The union is entitled to a reasonable period
AGREEMENT of time after inception of the strike in which to take
A no-strike clause in a CBA is applicable only to required action, after which the union's damage
economic strikes. If the strike is founded on an liability commences; where the union knows of
unfair labor practice of the employer, a strike the strike at about the time it commences, the
declared by the union cannot be considered a union is properly allowed about 48 hours in which
violation of the no-strike clause. (Master- iron to take action to end the strike, after which the
Labor Union v. NLRC, G.R. No. 92009, 1993) union's period of liability runs. (Azucena Vol. II-A,
9th ed., p. 673 citing 48-A Am. Jur. 2d 1899,
Where the CBA stipulates that disputes between p.320).
the parties should be resolved through a
grievance machinery, including voluntary 2. PICKETING
arbitration, a notice of strike filed by the union
violates that agreement. The NCMB should Definition of Picketing
consider such notice as not duly filed and then Picketing involves the presence of striking
direct the union to avail itself of the grievance workers who pace back and forth at the place of
machinery and voluntary arbitration. A similar business of the ER, in the hope of being able to
posture should be taken by the Secretary of Labor peacefully persuade other workers not to work in
instead of assuming jurisdiction over the dispute. the establishment, and customers not to do
(Azucena Vol. II-A, 9th ed., p. 670; See University business there. (Azucena Vol. II-A, 9th ed., p.
of San Agustin Employees Union-FFW, et al. v. 605).
CA, G.R. No. 169632, 2006).
Picketing as a concerted activity is subject to the
"No Strike" Clause of the CBA Applicable same limitations as strike, particularly as to lawful
Only to Economic Strikes purpose and lawful means employed to carry it
A strike declared due to unfair labor practice out. It should be done within the bounds of law.
(ULP) of the employer is NOT a violation of the
'No Strike" clause of the CBA. Moreover, a "no Picketing peacefully carried out is not illegal even
strike" clause is applicable only to economic in the absence of employer-employee
strikes. (Philippine Metal Foundries v. CIR, G.R. relationship for peaceful picketing is a part of a
Nos. L-34948, 1979). freedom of speech guaranteed by the
Constitution. (De Leon v. NLRC, G.R. No. L-
No-Strike Clause Not Binding Upon Newly 7586, 1957)
Certified Bargaining Agent
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The right to picket is said to be part of the freedom Pickets may not aggressively interfere with the
of speech and to peaceably assemble to air right of peaceful ingress to and egress from the
grievances under Sec. 4, Arti. Ill, of the ER's establishment or obstruct the public
Constitution . (De Leon v. NLRC, G.R. No. L- thoroughfares.
7586, 1957)
A picket, although peaceful and moving, may
Prohibition on those Engaged in Picketing constitute illegal obstruction if it effectively blocks
Article 279[e]) prohibits any person engaged in the entry and exit points of the ER's premises.
picketing from obstructing the free ingress to and
egress from the employer's premises (Jackbilt Picketing of Neutral Parties or "Innocent
Industries v. Jackbilt Employees Workers Union, Bystanders" Not Allowed
G.R. Nos. 171618-19, 2009) Although the right to peaceful picketing is entitled
to protection as an exercise of free speech, such
No person engaged in picketing shall: right may be regulated at the instance of third
1. Commit any act of violence, coercion or parties or "innocent bystanders" if it appears that
intimidation, or the inevitable result of its exercise is to create an
2. Obstruct the free ingress to or egress impression that a labor dispute with which they
from the employer's premises for lawful have no connection or interest exists between
purposes, or them and the picketing union.
3. Obstruct public thoroughfares. (Art.
279(e), Labor Code) A picketing union has no right to prevent
employees of another company (who is not their
Note: No person shall obstruct, impede or employer) from getting in and out of its premises,
interfere with by force, violence, coercion, threats otherwise the picketing union may be held liable
or intimidation, any peaceful picketing by workers for damages for its act against innocent
during any labor-controversy or in the exercise of bystanders.
the right to self organization or collective
bargaining, or shall aid or abet such obstruction 2. BY EMPLOYER
or interference.
3. LOCKOUTS
No employer shall use or employ any person to
commit such acts nor shall any person be Temporary refusal of any employer to furnish
employed for such purpose (Sec. 9, D.O. 40-G- work as a result of an industrial or labor dispute
03, 2010)
Procedural Requirements in Lockouts: (Same
Moving Pickets may be Illegal as those required in Strikes) (Labor Code, Art.
A picket, although "peaceful" and "moving," may 278)
constitute illegal obstruction if it effectively blocks 1. Notice of Lockout
the entry and exit points of the company 2. Cooling-off Period
premises, thus violating the law and making the 3. Strike/Lockout Vote
strike itself illegal. (Phimco Industries, Inc. V. 4. Strike/Lockout Vote Report
Phimco Industries Labor Association, G.R. No. 5. 7-day strike/lockout ban
170830, 2010)
Picketing may be considered as a nuisance if it Art. 279 prohibits the employer from doing the
constitutes an obstruction to the free use of following acts:
property, so as to substantially interfere with the 1. Declare a lockout without first having
comfortable enjoyment of life or property of bargained collectively or without first
another, or if it constitutes an unlawful obstruction having filed the notice required or without
to the free passage or use, in the customary the necessary lockout vote first having
manner, of a street. been obtained and reported to the DOLE
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2. Declare a lockout after assumption of

jurisdiction by the President or the Grounds for Lockout or Strike
Secretary or after certification or 1. Collective Bargaining Deadlock
submission of the dispute to compulsory 2. Unfair Labor Practice
or voluntary arbitration or during the
pendency of cases involving the same NOTE: Violations of CBA must be gross to be
grounds for the strike or lockout considered as ULP
3. Obstruct, impede, or interfere with, by
force, violence, coercion, threats or Conversion Doctrine: A strike may start as
intimidation, any peaceful picketing by economic and, as it progresses, becomes ULP,
employees during any labor controversy or vice-versa.
or in the exercise of the right to self-
organization or collective bargaining, or When strike or lockout cannot be declared
shall aid or abet such obstruction or 1. Violations of CBA which are not gross.
interference. 2. Grounds involving inter/intra union
4. Use or employ any strike-breaker, nor be disputes.
employed as a strike-breaker. 3. When there is no notice of strike or
lockout or without the strike or lockout
vote.
Lockouts have been held valid in the if. 4. After assumption of jurisdiction by the
situations: Secretary.
1. In anticipation of a threatened strike, 5. After certification or submission of
where motivated by economic dispute to compulsory or voluntary
considerations arbitration or during the pendency of
2. In response to unprotected strike or cases involving the same grounds for
walkout strike or lockout.
3. In response to a whipsaw strike
When Notice Must be Filed: Cooling — off
Lockouts have been held unlawful in the if. period
circumstances: 1. In case of bargaining deadlocks: at least
1. To discourage and dissipate membership 30 days before the intended date of strike
in a labor organization 2. In case of unfair labor practice: at least
2. To aid a particular union by preventing 15 days before the intended date of strike
further work of its rival 3. In case of ULP involving the dismissal of
3. To avoid bargaining duly elected union officer/s which may
constitute union-busting: union may
Procedure for Declaring a Strike or Lockout take action immediately after the strike
vote and the submission of the results of
- WHO MAY DECLARE? .(Sea 6, ap._40-G- the strike vote to the regional branch of
.
03, 2010) the Board
_ STRIKE LOCKOUT
Any legitimate labor
Employer in Strike or lockout vote
organization or any certified
cases of 4. Approved by majority of total union
Or duly recognized
bargaining membership or by majority of the BOD or
bargaining representative in
deadlocks and partners
cases of bargaining
ULPs 5. By a secret ballot
deadlocks and ULPs
6. In a meeting called for that purpose
Note: If there is no certified or duly recognized
bargaining representative, any legitimate labor
organization may declare a strike but only on
grounds of unfair labor practice.
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The regional branch may supervise the conduct requirements. (Sec 8, D.O. 40-G-03, Series of
of the secret balloting at its own initiative or upon 2010)
request of any party.
Action on notice of strike or lockout (Sec 9,
Notice of the meeting must be given at least 24 D.O. 40-G-03, Series of 2010)
hours before such meeting, and the results of the 1. Upon receipt of the notice, the regional
voting must be given at least 7 days before the branch of the Board shall exert all efforts
intended strike or lockout to the regional branch at mediation and conciliation to enable
of the Board. This is subject to the cooling-off the parties to settle the dispute amicably.
period. (Labor code, Art. 278(f)) It shall also encourage the parties to
submit the dispute to voluntary
Strike/Lockout Vote Report arbitration.
The result of the strike (or lockout voting) should 2. The Regional Branch of the Board may,
be reported to the NCMB at least 7 days before upon agreement of the parties, treat a
the intended strike or lockout, subject to the notice as a preventive mediation case. It
cooling off period. This means that after the strike shall also encourage the parties to
vote is taken and the result reported to NCMB, submit to submit the dispute to voluntary
seven days must pass before the union can arbitration.
actually commence the strike. This seven-day 3. During the proceedings, the parties shall
reporting period is intended to give the Dept. of not do any act which may disrupt or
Labor and Employment an opportunity to verify impede the early settlement of the
whether the projected strike really carries the dispute. They are obliged, as part of their
imprimatur of the majority of the union members. duty to bargain collectively in good faith
(Lapanday Workers' Union, et. al. v. NLRC, G.R. and to participate fully and promptly in the
Nos. 95494-97, September 7, 1995) conciliation meetings called by the
regional branch of the Board.
A strike tagged without the submission of the 4. A notice, upon agreement of the parties,
result of the strike vote is illegal. (Samahan ng may be referred to alternative modes of
Manggagawa in Moldex Products, et. al. v. dispute resolution, including voluntary
NLRC, etat, G.R. No. 119467, February 1, 2000) arbitration.
Contents of the notice of strike or lockout Procedural Requirements of a Valid Strike or

1. Names and addresses of employer Lockout
2. Union involved 1. Notice of Strike or Lockout
3. Nature of industry to which the employer 2. Cooling Off Period
belongs 3. Notice of meeting for Strike or Lockout
4. Number of union members vote at least 24 hours before the conduct
5. Workers in the bargaining unit of said meeting
6. Other relevant data 4. Conduct AND results of Strike or Lockout
7. In case of bargaining deadlocks: the vote reported
unresolved issues, written proposals of 5. 7-day strike ban observed
the union, counter-proposals of the
employer and proof of request for Preventive Mediation
conference to settle differences The regional branch may treat the notice as a
8. In case of unfair labor practice: the acts preventive mediation case upon agreement of the
complained of, and the efforts taken to parties.
resolve the dispute (Sec 8, D.O. 40-G-03,
Series of 2010) When labor may strike or when the employer
may lockout its workers
Note: Board shall inform the concerned party in If the dispute remains unsettled after the lapse of
case notice does not conform with the the requisite number of days from the filing of the
notice of strike or lockout and of the results of the
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election but the regional branch of the Board shall

continue mediating and conciliating. IMPROVED OFFER BALLOTING (Labor
code, Art. 280; Sec 9, D.O. 40-G-03, Series
Prohibited activities during strikes and of 2010)
lockouts (Labor code, Art. 279) IN CASE OF
IN CASE OF STRIKE
1. Strike or lockout without first having LOCKOUT
bargained collectively 1. Regional branch 1. The regional
2. Strike or lockout without the necessary of the Board shall, branch of the
vote first having been obtained and conduct a Board shall also
reported to the DOLE. referendum by conduct a
3. Strike or lockout after DOLE has secret balloting referendum by
assumed jurisdiction or the President or on the improved secret balloting
after certification or submission of offer of the on the reduced
dispute to the compulsory employer. offer of the union.
arbitration/voluntary arbitration or during 2. On or before the 2. On or before the
the pendency of cases involving the 30th day of strike. 30th day of the
same grounds for the strike or lockout. 3. At its own lockout.
4. Knowingly participating in illegal strike or (regional board) 3. When at least a
knowingly participating in the initiative or upon majority of the
commission of illegal acts during a strike the request of any board of directors
(ground for termination of employment). affected party. or trustees or the
5. Obstruct, impede, or interfere with by 4. When at least a partners holding
force, violence, coercion, threats, or majority of the the controlling
intimidation any peaceful picketing by union members interest in the
employees during any labor controversy vote to accept the case of
or shall abeit or aid such obstruction or improved offer, partnership vote
interference. the striking to accept the
6. Employment or use of any strikebreaker/ workers shall reduced offer, the
employed as a strike breaker. immediately workers shall
7. Bringing in, introducing, or escorting by return to work and immediately
any public officer or employee, including the employer return to work and
officers and personnel of the AFP or shall thereupon the employer
PNP, or any armed person in any manner re-admit them shall thereupon
of any individual who seeks to replace upon the signing re-admit them
strikers in entering or leaving the of the agreement upon the signing
premises of a strike area or work in place of the agreement.
of strikers.
8. Commit any act of violence, coercion or
intimidation while engaged in picketing or
obstruct the ingress or egress from the
employer's premises for lawful purposes
or obstruct public thoroughfares(must be
pervasive and widespread/consistently
and deliberately resorted to as a matter
of policy
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3. ASSUMPTION OF JURISDICTION BY THE A Police Power Measure

DOLE SECRETARY The assumption of jurisdiction is in the nature of
police power measure. This is done for the
a) Nature promotion of the common good considering that
a prolonged strike or lockout can be inimical to
Art. 278(g) is both an extraordinary and a the national economy. The Secretary of Labor
preemptive power to address an extraordinary acts to maintain industrial peace. Thus, his
situation — a strike or lockout in an industry certification for compulsory arbitration is not
indispensable to the national interest. The intended to impede the workers right to strike but
secretary of Labor is empowered to: to obtain a speedy settlement of the dispute.
1. Assume jurisdiction over the dispute and (Philtread Workers Union v. Confesor, G.R. No.
decide it, or 117169, 1997).
2. Certify the dispute to the NLRC for
compulsory arbitration, in which case, b) EFFECTS OF ASSUMPTION OF
NLRC shall here and decide
JURISDICTION
1. On intended or impending strike or
The intent of the law is to give the Labor Secretary
lockout — Automatically enjoined (Labor
full authority to resolve all matters within the
code, Art. 278(g))
dispute that gave rise to or which arose out of the
2. On actual strike or lockout (already taken
strike or lockout; it includes and extends to all place) — all striking or locked-out
questions and controversies arising from or employees shall immediately return to
related to the dispute, including cases over which work and the employer shall immediately
the labor arbiter has exclusive jurisdiction. resume operations and readmit all
workers under the same terms and
The authority of the Secretary to assume conditions prevailing before the strike or
jurisdiction over a labor dispute causing or likely lockout(Labor code, Art. 278(g))
to cause a strike or lockout in an industry 3. On cases already filed and may be filed
indispensable to national interest includes and — considered subsumed or absorbed by
extends to all questions and controversies arising assumed or certified case, except where
certification or assumption order states
from such labor dispute. The power is plenary and
otherwise (Guagua National Colleges v.
discretionary in nature to enable him to effectively Guagua National Colleges Faculty Labor
and efficiently dispose of the dispute. (Philcom Union, G.R. No. 204693, 2016)
Employees Union v. Philippine Global 4. On other pending cases — Parties are
Communications, G.R. No. 144315, 2006) required to inform their counsels and the
DOLE Secretary/ NLRC Division
As held in International Pharmaceuticals, Inc. v. concerned of all pending cases that are
Secretary of Labor, the Labor Secretary has related or incident to the
jurisdiction over all questions and controversies assumed/certified case.(Par 2, Sec. 3(b),
arising from an assumed dispute, including cases Rule VIII, 2011 NLRC Rules of
Procedure)
over which the labor arbiter has exclusive
jurisdiction. (G.R. Nos. 92981-83, 1992) Such assumption or certification has the effect of
automatically enjoining the intended or impending
What Constitutes a National Interest Case
strike or lockout as specified in the assumption or
The Labor Code vests upon the Secretary of certification order.
Labor the discretion to determine what industries
are indispensable to national interest. Thus, upon
If one has already taken place at the time of the
the determination of the Secretary of Labor that
assumption or certification, all striking or locked
such industry is indispensable to the national
out employees shall immediately return to work
interest, it will assume jurisdiction over the labor
and the employer shall immediately resume
dispute of said industry. (Philtread Workers Union
operations and readmit all workers under the
v. Confesor, G.R. No. 117169, 1997).
same terms and conditions prevailing before the
strike or lockout. In such case, the
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assumption/certification results to a return-to- When May the Secretary Assume Jurisdiction

work of all striking workers even if the Secretary Over a Case or Certify it to the NLRC
has not issued a Return to Work Order (RTWO). Under the law, when in his opinion there exists a
(Labor code, Art. 278 (g)) labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
This is an example of an automatic injunction. But national interest, the Secretary [of Labor] may:
this is strictly limited to "national interest" cases, 1. Assume jurisdiction over the dispute and
and even in these cases, the parties retain the decide it, or
option to submit the dispute to voluntary 2. Certify the same to the NLRC for
arbitration. compulsory arbitration
Upon assumption or certification, the parties Note: Power of DOLE Secretary to assume
should revert to the status quo ante litem which jurisdiction over a labor dispute is limited to
refers to the state of things as it was before the strikes or lockouts adversely affecting the
labor dispute or the state affairs existing at the national interest. (Free Telephone Workers Union
time of the filing of the case. (Overseas Workers' v. Hon. Minister of Labor and Employment, G.R.
Welfare Administration v. Chavez, G.R. No. L-58184, 1981)
169802, 2007).
What are Considered "National Interest"
The assumption or certification also has the effect Cases
of regulating the management prerogative of The NLRC vests the President of the Philippines
determining the assignment or movement of EEs. and the Secretary of Labor almost unlimited
discretion to determine what industries may be
Thus, in one case, the Court held the layoff of 94 considered as indispensable to the national
EEs pending the resolution of the dispute illegal interest.
as it was violative of the assumption order.
(Metrolab v. Roldan-Confesor, G.R. No. 108855, Industries Indispensable to the National
1996) Interest
1. Hospital Sector
2. Electric Power Industry
3. Water Supply Services, to exclude small
water supply such as bottling and refilling
stations
4. Air traffic control
5. Such other industries as maybe
recommended by the National Tripartite
Peace Council (TIPC) (DO No.40-H-13)
Examples of "National interest" disputes:

1. Nestle Philippines, Inc. is engaged in an
undertaking affected with public interest
being one of the largest manufacturers of
food products. (Union of Filipro v.
NLRC,G.R. No. 91025, 1990)
2. Academic institutions (Philippine School
ofBusiness Administration v. Noriel, G.R.
No. 80648, 1988)
3. A company supplying the sulfate
requirements of MWSS
4. Banking is expressly classified by the
General Banking Law as an industry
indispensable to the national interest.
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5. However, the Court ruled that the Assumption of Jurisdiction: Prior Notice Not
production of telephone directories is not Required
an industry affecting the national interest. The discretion to assume jurisdiction may be
(GTE Directories Corp v. Sanchez, G.R. exercise by the Secretary without the necessity of
No. 76219, 1991) prior notice or hearing given to any of the parties.
The rationale for his primary assumption of
Rule on Strikes and Lockouts in Hospitals, jurisdiction can justifiably rest on his own
Clinics and Medical Institutions (Labor code, consideration of the exigency of the situation in
Article 278(g) (par.2))GR: Strikes and lockouts in relation to the national interests. (Capitol Medical
these insttitutions must be avoided Center v. Trajano, G.R. No. 155690, 2005).
But in case a strike or lockout is staged:

1. It shall be the duty of the striking union or Return-to-Work-Order (RTWO)
locking-out employer to provide and The moment the Secretary of Labor assumes
maintain an effective skeletal workforce jurisdiction over a labor dispute in an industry
of medical/ other health personnel whose indispensable to national interest, such
services shall be unhampered and assumption shall have the effect of automatically
unrestricted to insure the proper and enjoining the intended or impending strike. It was
adequate protection of life and health of not even necessary for the Secretary of Labor to
its patients for the duration of the issue another order directing a return to work. The
strike/lockout mere issuance of an assumption order by the
2. DOLE Secretary shall immediately Secretary of Labor automatically carries with it a
assume, within 24 hrs from knowledge of return-to-work order, even if the directive to return
the occurrence of the strike/lockout, to work is not expressly stated in the assumption
jurisdiction over the same or certiy it to order. (Steel Corporation of the Philippines v.
NLRC for compulsory arbitration
SCP Employees Union, G.R. 169829-30, 2008)
Note:
It is always part of the
assumption/certification order even if not
expressly stated.
RTWO is compulsory in character
Certification to NLRC
"Certified labor disputes" are cases certified [or
referred] to the NLRC for compulsory arbitration
A "national interest" dispute may be certified to

the NLRC even before a strike is declared since
the Labor Code does not require the existence of
a strike, but only of an industrial dispute.
When sitting in a compulsory arbitration certified

to by the DOLE Secretary, the NLRC is not sitting
as a judicial court but as an administrative body
charged with the duty to implement the order of
the Secretary. In such a case, the NLRC does not
have the power to amend the Secretary's order.
(GSISEA v. C1R, G.R. No. L-18734, 1961)
Effects of Defiance of Assumption or

CertificationNon-compliance with the
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certification order of the Secretary shall be Refusal to Receive the Assumption of

considered an illegal act committed in the course Jurisdiction Order Amounts to Defiance
of the strike or lockout, and shall authorize the Refusal to receive the Assumption of Jurisdiction
NLRC to enforce the same under pain of Order (AJO) amounts to defiance of the order,
immediate disciplinary action, including loss of which makes the continuation of the strike an
employment status or payment by the locking-out illegal act, thus subjecting the strikers to possible
ER of backwages or damages, even criminal termination of employment.
prosecution against the liable parties.
The strikers should resume work immediately
Defiant Strikers, Whether Officer or Ordinary upon receipt or constructive receipt of the order.
Members of the Striking Union, are Deemed A grace period may be given but that is not
Dismissed - required by the law. (Azucena Vol. II-A, 9th ed.,
Once DOLE Sec assumes jurisdiction over a 2016, p. 646)
labor dispute or certifies it to NLRC for
compulsory arbitration, such jurisdiction should Effects of Defying the RTWO
not be interfered with by the application of the The mere issuance of an assumption order
application of coercive processes of a strike or automatically carries with it a return-to-work
lockout. order. (Steel Corporation of the Philippines V.
SCP Employees Union, G.R. Nos. 169829-30,
Any defiance thereof is a valid ground for the loss 2008)
of employment status regardless of whether the
defiant worker is an officer or an ordinary member From the moment a worker defies a RTWO, he is
of the union Defiance of the assumption order or deemed to have abandoned his job. (St.
a return-to work order by a striking employee, Scholastica's College v. Torres, G.R. No. 100158,
whether a union officer or a member, is an illegal 1992)
act and, therefore, a valid ground for loss of
employment status. (Manila Hotel Employees Those workers who refuse to obey the RTWO are
Association v. Manila Hotel Corp., G.R. No. not entitled to be paid for work not done or to
154591, 2007) reinstatement to the positions they have
abandoned by their refusal to return thereto as
Certification to the NLRC makes the continuation ordered. (Asian Transmission Corporation v.
of the strike illegal, provided that the parties are NLRC, G.R. No. 88725, 1989)
duly notified of the certification order. Notice is a
prerequisite even if the order states that it is Where the RTWO is issued pending the
"immediately executory." determination of the legality of the strike, it is not
correct to say that it may be enforced only if the
strike is legal and may be disregarded if the strike
is illegal. Precisely, the purpose of the RTWO is
to maintain the status quo while the determination
is being made. (Union ofFilipro Emplees v. Nestle
Philippines, G.R. No. 88710-13, 1990)
Not only union officers but also union members

who defy an RTWO are subject to dismissal.
But to justify the dismissal, the defiance of the

RTWO must be clearly proven. (Batangas
Laguna Tayabas Bus Company v. NLRC, G.R.
No. 101858, 1992)
Thus, the alleged or perceived defiance of the

RTWO does not mean automatic dismissal of the
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defying employees. Due process must be GR: No Union members or union organizers may
observed. The employees must be given the be arrested or detained for union activities without
chance to explain and prove that there was no previous consultation with the Secretary of Labor.
defiance at all. (Azucena Vol. II-A, 9th ed., 2016,
p. 652) Exception: On grounds of national security and
public peace.
Actual, Not Payroll, Reinstatement
Under the law, "the striking or locked out 4. CONSEQUENCES
employees shall return to work and the employer
shall readmit them." The Court has interpreted Generally, the effects of employment are merely
this to mean, as a general rule, actual, not payroll, suspended while on strike, the workers do not
readmission to the EEs' positions. (Azucena Vol. work and do not get paid.
II-A, 9th ed., 2016, p. 655)
Mere participation of a worker in a lawful strike
With respect to the Secretary's Order allowing shall not be a sufficient ground for termination of
payroll reinstatement instead of actual his employment, even if a replacement had been
reinstatement for the individual respondents hired during the strike. (Art.279 (a), Labor Code)
herein, an amendment to the previous Orders
issued by her office, the same is usually not Art. 279 sets out the consequences to union
allowed. Article 263(g) of the Labor Code officers and member for (1) participation in a
aforementioned states that all workers must strike and (2) commission of illegal acts.
immediately return to work and all employers
must readmit all of them under the same terms The penalty imposable is not always be
and conditions prevailing before the strike or termination but maybe suspension. The Court
lockout The phrase "under the same terms and used its judicial prerogative in the case of PAL v.
conditions" makes it clear that the norm is actual Brillantes, G.R. 119360, 1990, where it found that
reinstatement. This is consistent with the idea both employers and employees contributed to the
that any work stoppage or slowdown in that volatile atmosphere.
particular industry can be detrimental to the
national interest. (University of Immaculate Forfeiture of Reinstatement
Concepcion, Inc. v. Secretary of Labor, G.R. No. The Court has ruled that a striker who failed to
151379, 2005) report for work when one had the opportunity to
do so waived his right to reinstatement. (East
Thus, placing the striking employees to Asiatic v. CIR, G.R. L-29068, 1971)
substantially equivalent positions could not be
considered reinstatement "under the same terms What are Illegal Acts?
and conditions prevailing before the 1. Violation of Art. 279(e) of the Labor Code
strike."(University of Sto. Tomas v. NLRC, 2. Commission of crimes and other unlawful
G.R. No. 89920, 1990) acts in carrying out the strike
3. Violation of any order, prohibition, or
Appeal of Secretary's Order injunction issued by the DOLE Secretary
In "national interest" cases, the Secretary's Order or NLRC in connection with the
may be appealed to the Office of the President. assumption of jurisdiction/certification
order under Art. 278(g) of the Labor Code
In "non-national interest" cases, the Order may be
appealed via a Petition for Certiorari (Rule 65). This enumeration is not exclusive and may cover
other breaches of existing laws.
The parties may at any stage withdraw the case
from compulsory arbitration to bring it instead to a) LIABILITY OF UNION OFFICERS
a voluntary arbitrator. (Labor code, Art. 278(1,).
Any union officer who knowingly participates in
Arrest and Detention (Labor code, Art. 281) an illegal strike and any union officer who
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knowingly participates in the commission of Declaration of Loss of Employment Status

illegal acts during a strike may be declared to The law grants the employer the option of
have lost his employment. (Labor Code. Art. declaring a union officer who participated in an
279[0) illegal strikes as having lost his employment.
Filing a petition to declare a strike illegal is not a
Illegal Acts are: pre-requisite for the ER to terminate the
1. Violation of Art. 279(e) of the Labor Code employment of EEs who commit illegal acts in the
2. Commission of crimes and other unlawful course of the strike. In terminating the employee,
acts in carrying out the strike the ER must observe due process.
3. Violation of any order, prohibition, or
injunction issued by the DOLE Secretary or Entitlement to Backwages
NLRC in connection with the assumption of In an economic strike, the strikers are not entitled
jurisdiction/certification order under Art. to backwages on the principle that a "fair's day
278(g) of the Labor Code (Toyota Motor Phil. wage" accrues only for a "fair day's labor."
Workers Association v. NLRC, G.R. No. (Heilbronn v. NLU, G.R. L-6454, 1954)
158789, 2007) In a ULP strike, if the strike was voluntary, strikers
are not entitled to backwages. In the case of
Union officer may not be vicariously held liable for involuntary strike, strikers are entitled to
illegal acts of strikers. The rule is, for an LO backwages.
and/or its officer and members to be liable, there
must be proof of actual participation in, Exception: Voluntary strikers who subsequently
authorization or ratification of, the illegal acts. applied for reinstatement but were denied are
entitled to backwages provided the if. requisites
Labor Organizations (L0s) are not liable for concur:
unauthorized or unratified acts of its officers. Nor 1. The strike was legal
is it liable for the unlawful acts of its members 2. There was an unconditional offer to
which neither its officer nor committees have return to work
directed, aided, or approved. 3. The strikers were refused reinstatement
Shop stewards appointed by the Union, in a shop, However, backwages are not granted to
department or plant serves as representative of employees participating in an illegal strike they do
the Union, charged with negotiating and not render work for the employer during the
adjustment of grievances of employees with the period of the illegal strike. The principle of a "fair
supervisor of the employer, is considered an day's wage for a fair day's labor" is applicable. If
officer. Hence, shop stewards were similarly there is no work performed by the employee there
dismissed from employment in the conduct of an can be no wage or pay unless, of course, the
illegal strike. (Santa Rosa Coca-Cola v. Coca- laborer was able, willing and ready to work but
Cola, G.R. 164302-03, 2007) was illegally locked out, suspended or dismissed
or otherwise illegally prevented from working. For
b) LIABILITY OF ORDINARY WORKERS this exception to apply, it is required that the strike
be legal, a situation that does not obtain in the
Any worker who knowingly participates in the case at bar (Escario v. NLRC, G.R. No. 160302,
commission of illegal acts during a strike may 2010)
be declared to have lost his employment status.
(Art. 279(a), Labor Code) Summary: Consequences of Actions in Strike
Participation in Strike
The individual strikers committing the illegal acts
must be identified. Proof beyond reasonable
doubt is not required, only substantial evidence.
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2. Art. 279 — NLRC can enjoin or restrain

Commission of Illegal Act in a Strike the commission of the prohibited acts
DISMISSABLE? under Art. 279.
3. Innocent Bystander Rule — The no-
injunction rule does not apply in cases
where the interests of an innocent
bystander are concerned. Thus, the right
may be regulated at the instance of third
parties or "innocent, bystanders" if it
c) LIABILITY OF EMPLOYERS appears that the inevitable result of its
exercise is to create an impression that a
Any worker whose employment has been labor dispute with which they have no
terminated as a consequence of an unlawful connection or interest exists between
lockout shall be entitled to reinstatement with full them and the picketing union or
backwages. (Labor Code, Art. 27914) constitute an invasion of their rights. In
one case decided by this Court, we
e) In Pani Delicto upheld a trial court's injunction prohibiting
If the employer committed illegal lockout and the the union from blocking the entrance to a
employees staged illegal strike, they are both at feed mill located within the compound of
fault. The court will restore their respective a flour mill with which the union had a
positions before the strike. The dismisse strikers dispute (Liwayway Publications v.
will be reinstated without backwages (Automative Permanent, G.R. No. L-25003, 1981)
Engine Rebuilders v. Progresibong Unyon ng
mga Manggagawa sa AER, G.R. No. 16138, Thus, in a case where the Union declared a strike
2011) against its ER and picketed the premises,
preventing the peaceful passing of other persons
not connected with the ER, the Court upheld the
f) Criminal Liability injunction granted by a regular court (not by the
The regular courts shall have jurisdiction over any NLRC).
criminal action under Art. 272 of the Labor Code,
but subject to the required clearance from DOLE Injunctions by the NLRC
on cases arising out of or related to a labor
Under Art. 225 (e), the NLRC has the power to
dispute pursuant to DOJ Circular No. 15 (1982),
and Circular No. 9 (1986) enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful
5. INJUNCTIONS acts or to require the performance of a particular
act in any labor dispute which, if not restrained or
General Rule: No temporary or permanent performed forthwith, may cause grave or
injunction or restraining order in any case irreparable damage to any party or render
involving or growing out of labor disputes shall be ineffectual any decision in favor of such party.
issued by any court or other entity (Labor Code,
Art. 225 (e) paragraph 1) Requirements for Injunction to Issue: (Labor
Code, Art. 225 (e))
Exceptions: 1. Hearing of testimony of witnesses, with
1. Art. 225 (e)— NLRC can enjoin or restrain opportunity for cross-examination, in
an actual or threatened commission of support of verified complaint, and
any or all prohibited or unlawful acts or to testimony in opposition thereto
require the performance of a particular 2. A finding of fact by the NLRC that: (see
act in any labor dispute which, if not Philippine Association of Free Labor
restrained or performed forthwith, may Unions v. Hon. Tan, G.R. 9115, 1956)
cause grave or irreparable damage to a. Prohibited/unlawful acts will be
any party or render ineffectual any committed or have been
decision in favor of such party committed and will be continued
unless restrained
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b. Substantial and irreparable injury

will follow VI. POST-EMPLOYMENT
c. Greater injury will be inflicted
upon complainant by the denial TOPIC OUTLINE UNDER THE SYLLABUS
of relief than will be inflicted upon
defendants by the granting of the A. Employer-employee relationship
relief 1. Tests to determine existence
d. Complainant has no adequate 2. Kinds of employment
remedy at law a. Regular
e. The public officers charged with b. Casual
the duty to protect complainant's c. Probationary
property are unable or unwilling d. Project
e. Seasonal
to furnish adequate protection
f. Fixed-term
3. Notice of hearing has been served to
g. Security guards
a. All persons against whom relief
h. Floating status
is sought 3. Legitimate Subcontracting versus
b. Local Chief Executive and other Labor-Only Contracting
public officers of the a. Elements
province/city charged with the b. Trilateral Relationship
duty to protect complainant's c. Solidary Liability
property
4. Bond in an in an amount to be fixed by B. Termination by Employer
the NLRC 1. Just Causes
2. Authorized Causes
Conditions for Ex-Parte TRO: (Sec. 14, D.O. 3. Due Process
40-G-03, 2010) a. Twin-Notice Requirement
b. Hearing
A 20-day TRO may be issued ex-parte under the
if. conditions: C. Termination by Employee
1. Complainant also alleges that, unless a 1. Resignation versus Constructive
TRO shall be issued without notice, a Dismissal
substantial and irreparable injury to his
D. Preventive Suspension
property will be unavoidable
2. Testimony under oath, sufficient, if
E. Reliefs from Illegal Dismissal
sustained, to justify the issuance of a
TRO after notice and hearing F. Money claims arising from employer-
3. Bond in an amount to be fixed by the employee relationship
NLRC sufficient to recompense the
improvident/erroneous issuance of such G. Retirement
injunction/TRO
4. TRO shall be effective for no longer than
20 days and shall become void at its
expiration
end of topic
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A. EMPLOYER - EMPLOYEE RELATIONSHIP of a suspensive condition, and hence, renders

the obligation of the would-be employer, i.e., ANZ
"Employer" includes any person acting in the in this case, conditional. Jurisprudence states
interest of an employer, directly or indirectly. The that when a contract is subject to a suspensive
term shall not include any labor organization or condition, its effectivity shall take place only if
any of its officers or agents except when acting and when the event which constitutes the
as employer. (Labor Code, Art. 219[4) condition happens or is fulfilled. Considering,
however, that Sagun failed to comply with his
"Employee" includes any person in the employ of obligations, ANZ's obligations as a would-be
an employer. The term shall not be limited to the employer were held in suspense and thus, had
employees of a particular employer, unless the yet to acquire any obligatory force. (Sagun v. ANZ
Code so explicitly states. It shall include any Global Services, GR No. 220399, 2016)
individual whose work has ceased as a result of
or in connection with any current labor dispute or Authority of DOLE Secretary to determine
because of any unfair labor practice if he has not Employer-Employee Relationship (EER)
obtained any other substantially equivalent and The DOLE Secretary has the authority to
regular employment. (Labor Code, Art. 2190 determine the existence of an employer-
employee relationship. Under Article 128(b) of the
It is axiomatic that the existence of an employer- Labor Code, as amended by RA 7330, the DOLE
employee relationship cannot be negated by is fully empowered to make a determination as to
expressly repudiating it in the management the exercise of an employer- employee
contract and providing therein that the relationship in the exercise of its visitorial and
"employee" is an independent contractor when enforcement power, subject to judicial review, not
the terms of agreement clearly show otherwise. review by the NLRC. (People's Broadcasting
For, the employment status of a person is defined Service v. Secretary of Labor, GR 179652, 2012)
and prescribed by law and not by what the parties
say it should be. (Insurance Life Assurance Co. v.
NLRC, GR No. 11930, 1998)
Contractual in nature
The relationship of employer and employee is
contractual in nature. It may be an oral or written
contract. A written contract is not necessary for
the creation and validity of the relationship.
(Compania Maritima v. Emesta Cabagnot Vda.
De Hio, GR No. L-10675, 1960)
Conditional Employment
PERLAS-BERNABE, J. : An employment
contract, like any other contract, is perfected at
the moment the parties come to agree upon its
terms and conditions, and thereafter, concur in
the essential elements thereof. In Sagun v. ANZ
Global Services, the Court ruled that there was
already a perfected contract of employment
when Sagun signed ANZ's employment offer
and agreed to the terms and conditions that
were embodied therein. Nonetheless, the offer
of employment extended to Sagun contained
several conditions.before he may be deemed
an employee of ANZ. Accordingly, Sagun's
employment depended on the outcome of his
background check, which partakes of the nature
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1. TESTS TO DETERMINE EMPLOYER- of violation of any of its rules and

EMPLOYEE RELATIONSHIP regulations
FOUR-FOLD TEST 4. Power to control employee's conduct

The existence of an employer-employee (Control Test)
relationship (EER) is ultimately a question of fact. a. Who exercises control over the methods
To ascertain the existence of an employer- and results by which the work of the
employee relationship, jurisprudence has employee is accomplished?
invariably adhered to the four-fold test, to wit: b. The most important factor is the control
test. This test is premised on whether
1. Selection and engagement of the the person for whom the services are
employee (Hiring); performed reserves the right to control
a. Who has the power to select the both the end achieved and the manner
employee? and means used to achieve that end.
b. Employment relation arises from (Reyes v. Glaucoma Research
contract of hire, express or implied. Foundation, Inc.,GR No. 189255, 2015)
(Ruga v. NLRC, G.R. No. L-72654-61, c. The control test calls for the existence of
1990). the right to control the manner of doing
c. Selection and engagement of the the work, not the actual exercise of the
workers rests with the employers. right. (Dy Keh Beng v. Intl Labor &
Marine Union of the Phil, G.R. No. L-
2. Payment of wages or salaries 32245, 1979)
a. Who pays the employee's wages? d. There could be no EER where "the
b. The mode of paying the salary or element of control is absent; where a
compensation of a worker does not person who works for another does so
preclude existence of employer- more or less at his own pleasure and is
employee relationship. not subject to definite hours or conditions
c. Not a conclusive test since it can be of work; and in turn is compensated
avoided by the use of subcontracting according to the result of his efforts and
agreements or other contracts other not the amount thereof, we should not
than employment contracts. find that the relationship of employer-
d. Payment of compensation by way of employee exists." (Filipinas Broadcasting
commission does not militate against Network, Inc. v. NLRC, G.R. No. 118892,
the conclusion that EER exists. Under 1998)
Art. 97 of the Labor Code, "wage" shall
mean "however designated, capable of Concept of Control over Insurance Agents —
being expressed in terms of money, NOT Control in Labor Law
whether fixed or ascertained on a time, a. The fact that private respondent was
task, price or commission basis..." required to solicit business exclusively for
(Insular Life Assurance Co., Ltd. v. petitioner could hardly be considered as
NLRC, G.R. No. 119930, 1998) control in labor jurisprudence. Under
e. EER not determined by basis of Memo Circulars No. 2-81 and 2-85
employee's compensation. (Labor issued by the Insurance Commissioner,
Congress v. NLRC, G.R. No. 123938, insurance agents are barred from serving
1998). more than one insurance company, in
order to protect the public and to enable
3. Power of dismissal (Firing) insurance companies to exercise
a. Who has the power to dismiss the exclusive supervision over their agents in
employee? their solicitation work. Thus, the
b. Disciplinary power exercised by exclusivity restriction springs from a
employer over the worker and the regulation issued by the Insurance
corresponding sanction imposed in case Commission, and not from an intention
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by petitioner to establish control over the of such means. These address both the
method and manner by which private result and the means used to achieve it and
respondent shall accomplish his work. hence, EER exists (Insular Life Assurance
This is not meant to change the nature of Co. Ltd. v. NLRC, G.R. No. 84484, 1989)
the relationship between the parties, nor
does it necessarily imbue such TWO-TIERED TEST (Francisco Doctrine)
relationship with the quality of control (Francisco v. NLRC, G.R. No. 170087, 2006)
envisioned by the law. (AFP Mutual
Benefit Association v. NLRC, G.R. No. In cases where the control test is insufficient to
102199, 1997) determine the relationship between the parties,
b. That private respondent was bound by the Francisco doctrine adds another test, applied
company policies, memo/circulars, rules in conjunction with the control test, called the
and regulations issued from time to time economic dependence test.
is also not indicative of control. With
regard to the territorial assignments (I) FIRST TIER: CONTROL TEST
given to sales agents, this too cannot be The putative employer's power to control the
held as indicative of the exercise of employee with respect to the means and methods
control over an employee. Not every form by which the work is to be accomplished.
of control that a party reserves to himself
over the conduct of the other party in (II) SECOND TIER: ECONOMIC REALITY TEST
relation to the services being rendered (ALSO, ECONOMIC DEPENDENCE TEST)
may be accorded the effect of Under this test, the economic realities prevailing
establishing an employer-employee within the activity or between the parties are
relationship. (AFP Mutual Benefit examined, taking into consideration the totality of
Association v. NLRC, G.R. No. 102199, circumstances surrounding the true nature of the
1997) relationship between the parties. This is resorted
to when there is serious doubt or genuine
EER between crew members and owners of confusion as to the relationship of the employee
fishing vessels with the employer.
The employer-employee relationship between the
crew members and the owners of the fishing The proper standard of "economic dependence"
vessels engaged in deep-sea fishing is merely of the employee is whether the worker is
suspended during the time the vessels are dry- dependent on the alleged employer for his
docked or undergoing repairs or being loaded continued employment in that line of business.
with the necessary provisions for the next fishing (Orozco v. CA, G. R. No. 155207, 2008)
trip. This is premised on the principle that all these
activities i.e., dry-dock, repairs, loading of The 2-tiered test provides a framework of
necessary provisions, form part of the regular analysis which would take into consideration the
operation of the company fishing business. (Ruga totality of circumstances surrounding the true
v. NLRC, G.R. No.L-72654-61, 1990) nature of the relationship between the parties. It
is appropriate in a case where there is:
Not every form of control will have the effect 1. No written agreement or terms of reference
of establishing EER. The line should be drawn to base the relationship on; and
between: 2. There exists a complexity in the relationship
1. Rules that merely serve as guidelines based on the various positions and
towards the achievement of mutually desired responsibilities given to the worker over the
results without dictating the means or period of the latter's employment.
methods to be employed in attaining it.
These aim only to promote the result. NO Thus, the determination of the relationship
EER exists. between employer and employee depends upon
2. Rules that control or fix the methodology the circumstances of the whole economic activity,
and bind or restrict the party hired to the use such as:
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1. The extent to which the services performed are Cases where no EER exists:
an integral part of the employer's business; a. Farm Workers are not employees of the
2. The extent of the worker's investment in sugar central (Pondoc v. NLRC, G.R. No.
equipment and facilities; 116347, 1996)
3. The nature and degree of control exercised by
the employer; b. Once in the playing court, the referees
4. The worker's opportunity for profit and loss; exercise their own independent judgment,
5. The amount of initiative, skill, judgment or based on the rules of the game, as to when
foresight required for the success of the and how a call or decision is to be made.
claimed independent enterprise; The very nature of officiating a professional
6. The permanency and duration of the basketball game undoubtedly calls for
relationship between the worker and the freedom of control (Bemante v. PBA, G.R.
employer; and No. 190842, 2011)
7. The degree of dependency of the worker upon
the employer for his continued employment in c. Healthcare associate - The manner in which
that line of business. (Francisco v. NLRC, Consulta was to pursue these activities was
G.R. No. 170087, 2006) not subject to the control of Pamana.
Consulta failed to show that she had to
Cases Where EER Exists: report for work at definite hours. The amount
a. Jeepney drivers on boundary basis of time she devoted to soliciting clients was
(Villamaria v. CA, G.R. No. 165881, 2006) left entirely to her discretion. The means and
b. Drivers or helpers of salesmen are methods of recruiting and training her sales
employees of the company (Alhambra associates, as well as the development,
Industries v. CIR, G.R. No. L-25984, 1970) management and maintenance of her sales
c. Employees of an unregistered association division, were left to her sound judgment
(Orlando Farm Growers v. NLRC, G.R. No. (Consulta v. CA, G.R. No 145443, 2005)
129076, 1998)
d. Street-hired kargador (Caurdanetaan Piece d. IV personality — The specific selection and
Workers Union v. Laguesman, G.R. No. hiring of Sonza, because of his unique skills,
113542, 1998) talent and celebrity status not possessed by
e. Workers in movie projects (Maraguinot and ordinary employees, is a circumstance
Enero v. NLRC and Viva Fils, G.R. No. indicative, but not conclusive, of an
113542, 1998) independent contractual relationship (Sonza
f. "Talents" (Begino v. ABS-CBN, G.R. No. v. ABS-CBN, G.R. No. 138051, 2004)
199166, 2015)
g. Salaried insurance agent, as distinguished e. Where the contractor PSI was the one that
from registered agents on commission basis selected, engaged, and hired the security
(Great Pacific Life Assurance Corp., v. guards, the latter cannot claim that PLOT,
Judico, G.R. No. 73887, 1989) the entity to which they were detailed to, is
h. Tailors, seamstresses, servers, basters, their employer (Abella v. PLDT, G.R. No.
plantsadoras paid on piece-rate basis 159469, 2005)
(Makati Haberdashery v. NLRC, G.R. Nos.
83380-83, 1989) Importance of determining existence of
i. In-house counsel (Hydro Resources employer-employee relationship
Contractors v. Pagalilauan, G.R. No. 62909, Generally, labor standards and conditions apply
1989) only if there is an EER. However, in some
Security guards, with respect to the security instances, even if tehre is no EER, the Labor
agency (Agro Commercial Services v. Code may still be invoked (e.g. indirect
NLRC, G.R. No. 82823-24, 1989) employer's liability, illegal recruitment, and
misuse of POEA license).
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EER is determined by law and not by contract a. REGULAR EMPLOYMENT

between the parties (Paguio v. NLRC, G.R. No.
147816, 2003) Regular employment is an arrangement where
the employee:
2. KINDS OF EMPLOYMENT 1. Has been engaged to perform tasks usually
necessary or desirable to the usual trade or
Rundown of Kinds of Employment business of the employer (by nature of
a. Regular work);
b. Casual 2. Has rendered at least 1 year of service,
c. Probationary whether such service is continuous or
d. Project broken, with respect to the activity in which
e. Seasonal he is employed (by length of service); or
f. Fixed-term 3. When an employee is allowed to work after
g. Security guards a probationary period (by probationary
h. Floating employment) (Labor Code, Art. 295, 296)
Despite the distinction between regular and Test to determine regular employment
casual employment, every employee shall be The primary standard of determining regular
entitled to the same rights and privileges, and employment is the reasonable connection
shall be subject to the same duties as may be between the particular activity performed by
granted by law to regular employees during the the employee to the usual trade or business of
period of their actual employment. the employer. The connection can be
determined by considering the nature of work
performed and its relation to the scheme of the
particular business or trade in its entirety. The
repeated and continuing need for the
performance of the job has been deemed
sufficient evidence of the necessity, if not
indispensability of the activity to the business.
(Lopez v. MWSS, G.R. No. 154472, 2005)
The performance of a job for at least a year is

sufficient evidence of the job's necessity if not
indispensability to the business. This is the rule
even if its performance is not continuous and
merely intermittent. The employment is
considered regular, but only with respect to such
activity and while such activity exists. (URC v.
Catapang, G.R. No. 164736, 2005).
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Ways of attaining regular employment employed and his employment shall continue
1. By nature of work while such activity exists. (Labor Code, Art. 295)
The employment is deemed regular when the
employee has been engaged to perform c. PROBATIONARY EMPLOYMENT
activities which are usually necessary or
desirable in the usual business or trade of the Probationary employment exists where the
employer. (Labor Code, Art. 295; Paguio v. employee, upon his engagement, is made to
NLRC G.R. No. 147816, 2003) undergo a trial period during which the employer
determines his fitness to qualify for regular
2. By length of service employment based on reasonable standards
The casual employee is reckoned as regular made known to him at the time of his engagement
when the employee has rendered at least one (Labor Code, Art. 296)
(1) year of service, whether such service is
continuous or broken, with respect to the Period of Probationary Employment
activity in which he is employed and his Probationary employment shall not exceed six (6)
employment shall continue while such activity months from the date the employee started
exists. (Labor Code, Art. 295; Conti v. NLRC, working, unless it is covered by an apprenticeship
G.R. No. 119253, 1997) agreement stipulating a longer period. (Labor
Code, Art. 296)
3. Work beyond the probationary
employment Probationary employee is one who is on trial by
The employment is considered regular when an employer during which the employer
the employee is allowed to work after a determines whether or not he is qualified for
probationary period. (Labor Code, Art. 296) permanent employment. (International Catholic
Migration Comm. v. NLRC, G. R. No.. 72222,
4. Repeated Hiring 1989)
When the "seasonal" workers are
continuously and repeatedly hired to perform While the employer observes the fitness,
the same tasks or activities for several propriety, and efficiency of a probationer to
seasons or even after the cessation of the ascertain whether he is qualified for permanent
season, this length of time may likewise serve employment, the probationer, on the other hand,
as badge of regular employment. (Universal seeks to prove to the employer that he has the
Robina Sugar Milling Corporation v. Acibo, qualifications to meet the reasonable standards
G.R. No. 186439, 2014) for permanent employment. (Tamson's
Enterprises, Inc. v. CA, GR No. 192881, 2011)
Note: Regular employment does not mean
permanent employment. A regular employee may Probationary employment must have been
be terminated for just and authorized causes. expressly agreed upon. If there is no such
agreement, the employment is considered
b. CASUAL EMPLOYMENT regular (Sampaguita Auto Transport Corp. v.
NLRC, G.R. No. 197384, 2013)
General Rule: Activity performed is not usually
necessary or desirable in the usual business or Duration of Probationary Employment
trade of the employer, not project and not General Rule: Probationary employment shall
seasonal. Otherwise stated, casual employees not exceed 6 months from the date the employee
perform activities which are incidental to the started working (Labor Code, Art. 296)
business of the employer.
Probation ends 180 days from the starting date.
Exception: If he has rendered at least 1 year of (Mitsubishi Motors Corporation v. Chrysler Phi/s.,
service, whether such service is continuous or G.R. No. 148738, 2004)
broken, he is considered a REGULAR employee
with respect to the activity in which he is
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When an employer renews a contract of Standards Must Be Made Known to Employee

employment after the lapse of the six-month In all cases of probationary employment, the
probationary period, the employee thereby employer shall make known to the employee the
becomes a regular employee. No employer is standards under which he will qualify as a regular
allowed to determine indefinitely the fitness of its employee at the time of his engagement. Where
employees. (Labor Code, Art. 291, Malicdem v. no standards are made known to the employee at
Marulas Industrial Corp., GR No. 204406, 2014) that time, he shall be deemed a regular
employee. (Aberdeen Court, Inc. v. Agustin, G.R.
Exceptions: No. 149371, 2005; 1RR Labor Code, Sec. 6[d],
1. Covered by an apprenticeship agreement Rule I, Book V)
stipulating a longer period (Labor Code, Art.
296) PERLAS-BERNABE. When dealing with a
2. Voluntary agreement of parties (especially probationary employee, the employer is made to
when nature of work requires a longer comply with two requisites:
period) (Mariwasa Manufacturing v. a. The employer must communicate the
Leogardo, G.R. No. 74246, 1989) regularization standards to the probationary
3. The employer gives the employee a second employee (performance standard); and
chance to pass the standards set (Mariwasa b. The employer must make such
Manufacturing v. Leogardo, G.R. No. 74246, communication at the time of probationary
1989) employee's engagement.
4. When a longer period is required and
established by company policy If the employee fails to comply with either, the
employee is deemed as a regular and not a
probationary employee.
If not one of the exceptional circumstances above
is proven, the employee whose employment GR: An employer is deemed to have made
exceeds 6 months is undoubtedly a regular known the standards that would qualify a
employee (San Miguel v. Del Rosario, G.R. No. probationary employee to be a regular employee
168194 & 168693, 2005) when it has exerted reasonable efforts to apprise
the employee of what he is expected to do or
Example: The probationary period set for accomplish.
professors, instructors and teachers is 3
consecutive years of satisfactory service EXCEPTIONS:
a. When the job is self-descriptive in nature
pursuant to DOLE Manual of Regulations for
such as in the case of maids, cooks, drivers,
Private Schools.
or messengers. (Abbott Laboratories,
Philippines v. Alcaraz, GR No. 192571,
Extension of Probation; Double/Successive 2013)
Probation Not Allowed b. Probationary managerial employee. A
The employer and employee may extend by managerial role essentially connotes an
agreement the probationary period of exercise of discretion, the quality of effective
employment beyond 6 months, but it cannot be management can only be determined
ad infinitum. (Mariwasa Manufacturing v. through subsequent assessment.
Leogardo, G.R. No. 74246, 1989) c. The case of probationary employees whose
tasks involve the application of discretion
and intellect, such as — to name a few —
The evil sought to be prevented is to discourage lawyers, artists, and journalists (Abbott
scheming employers from using the system of Laboratories, Philippines v. Alcaraz, GR No.
double or successive probation to circumvent the 192571 MR, 2014)
mandate of the law on regularization and make it
easier for them to dismiss their employees Termination of Probationary Employment
(Holiday Inn Manila v. NLRC, G.R. No. 109114, PERLAS-BERNABE. A probationary employee,
1993) like a regular employee, enjoys security of tenure.
Thus, services of an employee who has been
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engaged on probationary basis may be Acquisition of Permanent Employment for

terminated for any of the following: Private School Teachers
1. Just causes The legal requirements for acquisition of
2. Authorized causes permanent employment, are as follows:
3. When he fails to qualify as a regular 9. The teacher is a full-time teacher;
employee in accordance with reasonable 10. The teacher must have rendered three
standards made known by the employer to consecutive years of service; and
employee at the time of his engagement. 11. Such service must have been satisfactory.
(Abbott Laboraties, Philippines v. Alcaraz, (UST v. NLRC G.R. No. 85519, 1990)
GR No. 192571, 2013))
d. PROJECT EMPLOYMENT
Note: If the termination is for cause, it may be
done anytime during the probation. The employer One whose employment has been fixed for a
need not wait until the probation period is over. specific project or undertaking, the completion of
(Carvajal v. Luzon Development Bank, GR No. which has been determined at the time of
186169, 2012) engagement of the employee. (Labor Code, Art.
295)
Limitations to Termination of Probation
6. Must be exercised in accordance with the PERLAS-BERNABE. For an employee to be
specific requirements of the contract; considered project-based, the employer must
7. The dissatisfaction on the employer's part show compliance with two (2) requisites, namely
must be real and in good faith, not feigned so that:
as to circumvent the contract or the law; and c. The employee was assigned to carry out a
8. There must be no unlawful discrimination in specific project or undertaking; and
the dismissal (Davao Contractors d. The duration and scope of which were
Development v. Pasawa, G.R. No. 172174, specified at the time they were engaged for
2009) such project. (Gadia v. Sykes Asia, Inc., GR
No. 209499, 2015)
Probationary employee may be dismissed before
end of the probationary period. Termination, to be Project Employees are NOT Regular
valid, must be done before the lapse of the Employees; Exception
probationary period. (Pasamba V. NLRC, G.R. General Rule: Project employees are not regular
No. 168421, June 8, 2007; Manila Electric employees, as their services are needed only
Company v. NLRC, G.R. No. 83751, 1989). when there are projects to be undertaken.
Conversely, once the employer finds the Exception: Where the employment or project
employee qualified, the employer may extend to employees is extended long after the supposed
him regular employment even before the end of project has been finished, the employees are
the probation (Canagian Opportunities v. removed from the scope of project employees
Dalangin, Jr., G.R. No. 172223, 2012) and are considered regular employees. (Lao
Construction v. NLRC, G.R. No. 116781, 1997)
Due Process Prior to Termination
Probationary employees is entitled to procedural When a Project Employee Becomes a Regular
due process prior to dismissal from service. Employee
Unlike the first and second grounds (see above a. There is continuous re-hiring of project
enumeration), the third ground does not require employees even after the cessation of a
notice and hearing. Due process for the third project for the same tasks or nature of tasks
ground consists of making the reasonable (the employee must be continuously rehired
standards excepted of the employee during his without gaps and intervals); and
probationary period known to him at the time of b. The tasks performed by the alleged project
his probationary employment. (PD! v. Magtibay, employee are vital, necessary, and
Jr., G.R. No. 164532, 2007) indispensable to the usual business or trade
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of the employer (Maraguinot v. NLRC, G.R. particular construction project or phase

No. 120969, 1998) of a project. Said employees are
considered regular employees; or
Duration of Work b. Project employees are those employed
One year duration on the job is pertinent in in connection with a particular
deciding whether a casual employee has become construction project or phase thereof
regular or not, but it is not pertinent to a seasonal and such employment is coterminous
or project employee. with each project or phase of the project
to which they are assigned. (Exodus
"Day Certain" Rule International Construction v. Biscocho,
Project employment does not end on an exact GR No. 166109, 2011))
date, but on the completion of the project.
Mere membership in the work pool does not result
Termination in the workers' becoming regular employees by
As project employees, their termination is reason of that fact alone. (Abesso Construction
governed by Rule XXIII, Book V of the Omnibus and Dev't Corp., v. Ramirez, G.R. No. 141168,
Rules Implementing the Labor Code which 2006). However, a project employee who is a
provides that: If the termination is brought about member of a work pool may attain regular status
by the completion of the contract or phase as a project employee.
thereof, no prior notice is required.
Project Employment vs. Regular Employment
This is because completion of work or project PROJECT : 1. REGULAR. .
automatically terminates employment, in which EMPLOYMENT ._ I EMPLOYMENT
case, the employer is, under the law, only obliged The services of Regular employees
to render a report to the DOLE on the termination project employees are enjoy security of
of employment. (Cioco, Jr. v. C.E. Construction
coterminus with tenure and are legally
Corp., GR No. 156748 & 156896, 2015)
project or any phase entitled to remain in
thereof any may be the service of their
Length of time not applicable to the
terminated upon the employer and to hold
construction industry
end or completion of on their work or
Generally, length of service provides a fair
the project or phase position until their
yardstick for determining when an employee
thereof for which they services are
initially hired on a temporary basis becomes a
were hired terminated by any of
permanent one, entitled to the security and
benefits of regularization. But this standard will the modes of
not be fair, if applied to the construction industry, termination of service
under the Labor Code
simply because construction firms cannot
As to termination, due If termination is for
guarantee work and funding for its payrolls
beyond the life of each project. And getting process complied with just cause, due
even if no prior notice process applicable to
projects is not a matter of course. (Uy
of termination is Art. 297 applies. If
Construction v. Trinidad, G.R. No. 183250, 2010)
served due to authorized
Work Pool Principle causes, Art. 298 &
Generally, employees may or may not be 299 followed.
members of a work pool. A work pool refers to a
group of works from which an employer like a Note: A regular employee cannot be at the same
construction company deploys or assigns to its time a project employee (Magcalas v. NLRC,
various projects or any phase/s thereof. G.R. No. 100333, 1997)
Types of Employees in the Construction

Industry:
a. Non-project employees are those
employed without reference to any
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e. SEASONAL EMPLOYMENT National Federation of Sugarcane

Workers-Food and General Trade, G.R.
Work or services to be performed is seasonal in No. 149440, 2003);
nature and the employment is for the duration of b. When seasonal employees are free to
the season. (Labor Code, Art. 295) contract their services with other farm
owners (Mercado, Sr. v. NLRC, 2013).
Farm workers generally fall under the definition of
seasonal employees. Seasonal employees may f. FIXED-TERM EMPLOYMENT
be considered as regular employees.
Fixed-term employment was repealed by Labor
Regular seasonal employees are those called to Code. But the Civil Code, a general law, allows
work from time to time. The nature of their fixed-term employment. (Brent School, Inc. v.
relationship with the employer is such that during Zamora, G.R. No. 48494, 1990)
the off season, they are temporarily laid off; but
re-employed during the summer season or when Elements of valid fixed-term employment
their services may be needed. They are in regular 1. The fixed period of employment was
employment because of the nature of their job, knowingly and voluntarily agreed upon by
and not because of the length of time they have the parties without any force, duress, or
worked. (Gapayao V. Fulo, GR No. 19343, 2013) improper pressure being brought to bear
upon the employee and absent any other
Employment Relationship During Off-Season circumstances vitiating his consent;
During off-season, the EER is not severed; the 2. It satisfactorily appears that the employer
seasonal employee is merely considered on and the employee dealt with each other on
leave of absence without pay. Workers who have more or less equal terms with no moral
performed the same tasks every season for dominance exercised by the former or the
several years are considered regular employees latter.
for their respective tasks. (Hacienda Fatima v.
National Federation of Sugarcane Workers-Food These indications, which must be read together,
and General Trade, G.R. No. 149440, 2003) make the Brent doctrine applicable only in a few
special cases wherein the employer and
When Seasonal Employees Considered as employee are on more or less in equal footing in
Regular Employees entering into the contract.
1. Where there is a reasonable connection
between the particular activity performed by The reason for this is: when a prospective
the employee in relation to the usual trade or employee, on account of special skills or market
business of the employer; and forces, is in a position to make demands upon the
2. When seasonal workers are repeatedly prospective employer, such prospective
engaged to perform the same tasks for more employee needs less protection than the ordinary
than one season (Zamudio v. NLRC, G.R. worker. Lesser limitations on the parties' freedom
No. 76723, 1990) of contract are thus required for the protection of
the employee. (Fuji Television Network v.
One year duration on the job is pertinent in Espiritu, G.R. Nos. 204944-45, 2014)
deciding whether a casual employee has become
General Rule: Fixed-Period Employment is valid
regular or not, but it is not pertinent to a seasonal
or project employee. Passage of time does not so long as the criteria is complied with.
make a seasonal worker regular or permanent.
(Mercado v. NLRC, G.R. No. 79869, 1991) Exception: Fixed-term employment will not be
considered valid where, from the circumstances,
it is apparent that periods have been imposed to
When Seasonal Employees NOT Considered
as Regular Employees preclude acquisition of tenurial security by the
employee. (Dumpit-Murillo v. CA, G.R. No.
a. Seasonal workers who have worked for
164652, 2007)
one season only (Hacienda Fatima v.
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Rules:
1. Notice of termination is not necessary in
fixed-term employment (Pangilinan v.
General Milling Corporation, supra)
2. Employee is deemed regular if the contract
failed to state the specific period of
employment (Poseidon Fishing v. NLRC,
G.R. No. 168052, 2006);
3. Termination prior to lapse of fixed-term
contract should be for a just or authorized
cause (Anderson v. NLRC, G.R. No.
111212, 1996);
4. Liability for illegal dismissal of fixed-term
employees is only for the salary for
unexpired portion (New Sunrise Metal v.
Pia, G.R. No. 171131, 2007)
Probationary Employment vs. Fixed-Term

Employment
PROBATIONARY FIXED-TERM
EMPLOYMENT 'EMPLOYMENT.
The parties intend to No such intention
make their relationship exists and the
regular after the lapse relationship
of the period. automatically
terminates at the
expiration of the
period.
g. SECURITY GUARDS
Employment Status
The Security Service Contractor (SSC) or Private
Security Agency (PSA) is the employer of its
security guards and other private security
personnel on duty detail to a principal or client
under a Service Agreement. (Sec. 3.1, DO 150-
16)
Note: Similar to a situation of legitimate

subcontracting.
The three parties involved:

a. SSC/PSA as Contractor / Subcontractor
b. Security Guards as employees of
SSC/PSA
c. Principal or client of SSC/PSA - puts out or
farms out a security and/or detective job,
service, or work to a private SSC/PSA.
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Probationary Employment
Probationary period of newly-hired security guard
and other private security personnel in the private
security industry shall not exceed six (6) months.
While on probationary status, their services may
be terminated for failure to meet reasonable
standards or criteria made known by the
SSC/PSA at the time of their engagement or for
any just case contained in the probationary
contract. (Sec. 3.2, DO 150-16)
Regular Employment
Any security guard or other private security
personnel who is allowed to work after the
probationary period or in the absence of a valid
probationary contract shall be considered a
regular employee. Security guards affected by
repeated hiring-firing-rehiring scheme for short
periods of time, the aggregate duration of which
is at least 6 months, shall be considered a regular
employee. (Sec. 3.3, DO 15016)
Employment Contracts
Notwithstanding and oral or written stipulations to
the contrary, the contract between SSC/PPA and
its security guards shall be governed by
provisions of Art. 294 and 295 of the Labor Code.
The SSC/PSA shall provide his/her security
guards a copy of the employment contract duly
signed by the parties, which shall contain terms
and conditions of employment. (Sec. 5.1, DO
150-16)
Reserved Status
A security guard and other private security
personnel may be placed in a work pool or on
reserved status due to lack of service assignment
after the expiration or termination of the Service
Agreement with the principal where he/she is
assigned, or due to the temporary suspension of
security service operations, or due to valid relief
from the current place of work and there is no
work assignment available.
No security guard and other private security

personnel can be placed in a work pool or on
reserved status in any of the following situations:
a. after expiration of a service contract, if

there are other principals where he/she can be
assigned;
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b. as a measure to constructively dismiss

the security guard; and
c. as an act of retaliation for filing any
complaint against the employer for violation of
labor laws, among others.
If after a period of six (6) months, the SSC/PSA

cannot provide work or give an assignment to the
reserved security guard, the latter can be
separated from service and shall be entitled to
separation pay as described in Subsection 7.5
(m) hereof. An assignment of the security guard
and other private security personnel as a reliever
for less than one-month shall not be considered
as an interruption of the six (6) months period.
(Sec. 10.3, DO 150-16)
PERLAS-BERNABE. Specifically with respect to

cases involving security guards, a relief and
transfer order in itself does not sever employment
relationship between a security guard and his
agency. Temporary "off-detail" or the period of
time security guards are made to wait until they
are transferred or assigned to a new post or client
does not constitute constructive dismissal, so
long as such status does not continue beyond six
(6) months. (Tatel v. JLFP Investigation and
Security Agency, Inc., GR No. 206942, 2015)
PERLAS-BERNABE. The concept of temporary

"off-detail" or "floating status" of security guards
employed by private security agencies — a form of
temporary retrenchment or lay-off— relates to the
period of time when security guards are in
between assignments or when they are made to
wait after being relieved from a previous post until
they are transferred to a new one. When a
security guard is placed on a floating status, he or
she does not receive any salary or financial
benefit provided by law. (Quiflopa v. Quality
Guards Services, GR No. 213814, 2015)
Burden of Proof
The onus of proving that there is no post available
to which the security guard can be assigned rests
on the employer. (Nationwide Security and Allied
Services, Inc. v. Valderama, 659 Phil. 362, 2011)
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Due to the grim economic consequences to the subject to the control of the employer, except only
security guard in which he does not receive any as to the results of the work. (SMC v. Aballa, G.R.
salary while in temporary off-detail or floating No. 149011, 2005)
status, the employer-security agency should bear
the burden of proving that there are no posts An individual can be an independent contractor
available to which the security guard temporarily for himself. (Sonza v. ABS-CBN, G.R. No.
out of work can be assigned. (Pido v. NLRC, 545 138051, 2004)
Phil 507, 516, 2007)
Factors to consider in determining whether
Management Prerogative Contractor is carrying on an Independent
PERLAS-BERNABE. Placing a security guard in Business:
temporary off-detail or floating status is part of It is not enough to show substantial capitalization
management prerogative of the employer- or investment in the form of tools, equipment,
security agency and does not, per se, constitute machineries, and work premises, among others,
a severance of the employer-employee to be considered as an independent contractor. In
relationship. However, such exercise of determining the existence of an independent
management prerogative must be made in good contractor relationship, several factors might be
faith. (Quillopa v. Quality Guards Services, GR considered:
No. 213814, 2015) a. Nature and extent of work
b. Skill required
3. LEGITIMATE SUBCONTRACTING vs. c. Term and duration of the relationship
LABOR-ONLY CONTRACTING d. Right to assign the performance of
specified pieces of work
Contracting or Subcontracting refers to an e. Control and supervision of the
arrangement whereby a principal agrees to farm workers
out to a contractor the performance or completion f. Power of the employer with respect to
of a specific job or work within a definite or the hiring, firing, and payment of
predetermined period, regardless of whether workers of the contractor
such work is to be performed or completed within 9- Control of the premises
or outside the premises of the principal. (DO 174- h. Duty to supply premises, tools,
17, Sec. 3(c)) appliances, materials, and labor
i. Mode, manner, and terms of
Labor-Only Contracting — An arrangement payment. (Vinoya v. NLRC, GR No.
where the contractor or subcontractor recruits, 126586, 2000)
supplies, or places workers to perform a job or
work for a principal, and the elements hereunder:
A. The contractor does not have substantial
capital or the contractor or subcontractor
does not have investments in the form of
tools, equipment, machineries; and the
contractor's or subcontractor's employees
recruited and placed are performing activities
which are directly related to the main
business operation of the principal; or
B. The contractor or subcontractor does not
exercise the right of control over the work of
the employee (D.O. No. 174-17, Sec. 5)
Test to determine the existence of an

independent contractor
Whether one claiming to be an independent
contractor has contracted to do the work
according to his own methods and without being
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Job Contracting v. Labor-Only a. ELEMENTS

Contracting
JOB LABOR-ONLY- - Legitimate contracting or subcontracting '
CONTRACTING .CONTRACTING Contracting or subcontracting shall be legitimate
Has sufficient if all the following circumstances occur:
substantial capital Has NO substantial a. The contractor is engaged in a distinct
OR investment in capital OR investment and independent business and
machinery, tools or in the form of undertakes to perform the job or work on
equipment directly or machinery, tools or its own responsibility according to its
intended to be related equipment own method;
to the job contracted c. The contractor or subcontractor has
Crries I substantial capital and/or investment;
03 bp.:e0Op „ Hds. no 'independent' d. The contractor undertakes to perform the
job, work or service on its own
grte J ..dfffêr .i t business
r 0 .the.ei-nploy. r's responsibility, according to its own
Undertakes to manner and method, and free from
perform the job under Performs control and direction of the principal in all
activities
its own account and directly related to the matters connected with the performance
responsibility, FREE main business of the of the work except as to the results
from the principal's principal thereof; and
control e. The Service Agreement ensures
rincipal .treatpd::ar compliance with all the rights and
NO, EER except benefits for all of the employees of the
wed employer
vu -ten the cor)ti-O.Ptbr . -,:.-- : :.,.-:. Of• the.
. " contractor or subcontractor under Labor
person recruited iii;pll
oV,silbcontr:act8hai s laws. (D. O. No. 174-17, Sec. 8)
instances , (P9filr@a61:
to pay the
drhployeos' v.'ages' ks-Creq(DO 8 entail4
principal): : Labor-Only Contracting
LIMITED liability Labor only contracting shall refer to an
(principal solidarity arrangement where the contractor or
liable with contractor Principal's liability subcontractor recruits, supplies, or places
or subcontractor only extends to all rights, workers to perform a job or work for a principal,
when latter fails to duties and liabilities and the elements hereunder:
comply with under labor standard a. The contractor does not have substantial
requirements as to laws including the right capital; or the contractor or
unpaid wages and to self-organization subcontractor does not have
other labor standards investments in the form of tools,
violations. equipment, machineries; and the
PERMISSIBLE PROHIBITED contractor's or subcontractor's
employees recruited and placed are
performing activities which are directly
related to the main business operation of
the principal; or
b. The contractor or subcontractor does not
exercise the right of control over the
work of the employee (D.O. No. 174-17,
Sec. 5)
Right to Control
Right reserved to the person for whom the
services of the contractual workers are
performed, to determine not only the end to be
achieved, but also the manner and means to be
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used in reaching that end. (D.O. No. 18-A, Sec. subcontractor in the performance or completion
3[1]) of the job, work or service contracted out.
Only one of either (i) substantial capital or (ii) The law does not require both substantial capital
performing activities related to the main and investment in the form of tools, equipment
business — is required for Labor-Only and machineries. This is clear from the use of the
Contracting to exist conjunction "or." If the intention was to require the
Performing activities directly related to the contractor to prove that he has both capital and
principal business of the employer is only one of the requisite investment, then the conjunction
the two indicators that "labor-only" contracting "and" should have been used. (New Golden
exists; the other is lack of substantial capital or Builders & Dev't Corp v. CA, et al., G.R. No.
investment. Labor-only contracting exists 154715, 2003)
when any of the two elements is present.
(Quintanar, etal. v. Coca-Cola, G.R. No. 210565, Net Financial Contracting Capacity (NFCC)
2016) refers to the formuia to determine the financial
capacity of the contractor to carry out the job,
Posting of Bond work or services sought to be undertaken under
An employer or indirect employer may require the a Service Agreement. NFCC is current assets
contractor or subcontractor to furnish a bond minus current liabilities multiplied by K, which
equal to the cost of labor under contract, on stands for contract duration equivalent to: 10 for
condition that the bond will answer for the wages one year or less; 15 for more than one (1) year up
due the employees should the contractor or to two (2) years; and 20 for more than two (2)
subcontractor, as the case may be, fail to pay the years, minus the value of all outstanding or
same. (D.O. No. 174-17, Sec. 3[a], Labor Code, ongoing projects including contracts to be started.
Art. 108) (D.O. 18-A, Sec. 3[g])
Note: Labor-Only Contracting is legally wrong Illicit Forms of Employment Arrangements

and prohibited because it is an attempt to evade The following are declared prohibited for being
the obligations of an employer. If proven, it contrary to law or public policy:
amounts to employment avoidance (Convoy c. When the principal farms out work to a
Marketing v. Albia, G.R. No. 194969, 2015) "Cabo".
Substantial Capital "Cabo" refers to a person or group of persons

It refers to capital stocks and subscribed or to a labor group which, under the guise of
capitalization in the case of corporations, tools, labor organization, cooperative, or any entity,
equipment, implements, machineries, and work supplies workers to an employer, with or
premises, actually and directly used by the without any monetary or other consideration,
contractor or subcontractor in the performance or whether in the capacity of agent of the
completion of the job, work or service contracted employer or as ostensible independent
out (D.O. No. 18-02, Sec. 5) contractor. (D.O. No. 174-17, Sec. 3[b])
It also refers to paid-up capital stocks/shares of at d. Contracting out of job or work through an in-
least Five Million Pesos (P5,000,000.00) in the house agency.
case of corporations, partnerships and e. Contracting out of job or work through an in-
cooperatives; in the case of single proprietorship, house cooperative which merely supplies
a net worth of at least Five Million Pesos workers to the principal.
(P5,000,000.00). (D.O. No. 174-17, Sec. 3, IP) F. Contracting out of a job or work by reason of
a strike or lockout whether actual or
Capital stocks and subscribed capitalization in imminent.
the case of corporations, tools, equipment, g. Contracting out of a job or work being
implements, machineries and work premises, performed by union members and such will
actually and directly used by the contractor or interfere with, restrain or coerce employees
PAGE 177 OF 244
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in the exercise of their rights to self- b. TRILATERAL RELATIONSHIP

organization as provided in Article 259 of the
Labor Code, as amended
h. Requiring the contractor's/subcontractor's
employees to perform functions which are [ Principal
currently being performed by the regular
employees of the principal.
i. Requiring the contractor's/subcontractor's
employees to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank payroll;
a waiver of labor standards including Contractor's
minimum wages and social or welfare Employees
benefits; or a quitclaim releasing the principal 4
or contractor from liability as to payment of

future claims; or require the employee to The three parties involved:
become member of a cooperative. a. Contractor / Subcontractor
Repeated hiring by the Any person or entity, including a cooperative,
contractor/subcontractor of employees under engaged in a legitimate contracting or
an employment contract of short duration. subcontracting arrangement.
k. Requiring employees under a
contracting/subcontracting arrangement to b. Contractor's Employee
sign a contract fixing the period of One employed by a contractor or subcontractor to
employment to a term shorter than the term perform or complete a job, work or service
of the Service Agreement, unless the contract pursuant to an arrangement between the latter
is divisible into phases for which substantially and a principal
different skills are required and this is made
known to the employee at the time of c. Principal
engagement. Any employer who puts out or farms out a job,
I. Such other practices, schemes or
service or work to a contractor or subcontractor
employment arrangements designed to (D.O. No. 174-17, Sec. 3)
circumvent the right of workers to security of
tenure. (D.O. No. 174-17, Sec. 6)
Relationships that exist in legitimate
contracting or subcontracting:
a. An employer-employee relationship between
the contractor and the employees it engaged
to perform the specific job, work or service
being contracted; and
b. A contractual relationship between the
principal and the contractor as governed by
the provisions of,the Civil Code. (D.O. No. 18-
A-11, Sec. 5, ¶ 1)
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Governing Laws Required Contracts

c. Between the principal and the contractor the 1. Employment contract between the
major laws applicable to their work contractor and its employee.
relationship are the Civil Code and pertinent a. Notwithstanding any oral or written
commercial laws. stipulations to the contrary, the contract
d. Between the contractor and his employees between the contractor and its employee
the major laws applicable to their work shall be governed by the provisions of
relationship are the Civil Code and special Articles 279 and 280 of the Labor Code,
labor laws. as amended.
e. Between the principal and the contractor's
employees, no employer-employee It shall include the following terms and
relationship exists, because the contractor conditions:
himself is the employer. (Azucena, The Labor i. The specific description of the job,
Code with Comments and Cases Volume I, work or service to be performed by
306, 2013) the employee;
ii. The place of work and terms and
The law recognizes and resolves this situation in conditions of employment, including
favor of employees in order to protect their rights a statement of the wage rate
and interests from the coercive acts of the applicable to the individual employee;
employer. In fact, the employee who is and
constructively dismissed may be allowed to keep iii. The term or duration of employment
on coming to work. (McMer Corp., Inc. v. NLRC, that must be co-extensive with
G.R. No. 193421, 2014) the Service Agreement or with the
specific phase of work for which the
Rights of contractor's employees employee is engaged.
All contractor's/subcontractor's employees, shall
be entitled to security of tenure and all the rights b. The contractor shall inform the employee
and privileges as provided for in the Labor Code, of the foregoing terms and conditions of
as amended, to include the following: employment in writing on or before the first
f. Safe and healthful working conditions; day of his/her employment.
d. Labor standards such as but not limited to
service incentive leave, rest days, overtime Service Agreement between the principal and
pay, holiday pay, 13th month pay, and the contractor v. security guards
separation pay as may be provided in the
Required Provisions:
Service Agreement or under the Labor Code;
DO 174-17: Service DO 150-16: The
e. Retirement benefits under the SSS or
Agreement between SSC/PSA and/or the
retirement plans of the contractor, if there is
the principlal and the principle shall produce
any;
contractor. or submit the original
f. Social security and welfare benefits; and
copy of the Service
9. Self-organization, collective bargaining and Agreement when
peaceful concerted activities, including the
directed to do so by the
right to strike. (D.O. No. 174-17, Sec. 10)
Regional Director or
his/her duly authorized
representative.
The Service The Service
Agreement shall Agreement shall
include the following: stipulate, among
others:
a. The specific a. Specific
description description of
of the job or the kind or
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work being nature of deemed

subcontract security job, amended
ed, including work, or accordingly;
its term or service being e. Provisions
duration; subcontracted; which shall
b. The place b. Place of work ensure that
or work and and terms the principle
terms and and and the
conditions conditions SSC/PSA
governing governing the shall uphold
the contracting the rights and
contracting arrangement provide all
arrangeme which shall benefits of
nt, to include the security
include the agreed guards;
agreed amount of f. Provision on
amount of security the NFCC of
the services to SSC/PSA;
contracted be rendered g. Undertaking
job or work and the that the
as well as standard SSC/PSA
the administrativ shall directly
standard e fee of not remit monthly
administrat less than employers'
lye fee of 20% of the share and
not less total contract employees'
than 10% cost; contribution
of the total c. Basic to SSS, ECC,
contract equipment to PhilHealth,
cost. be provided Pag-IBIG;
c. A provision by the h. Undertaking
on the SSC/PSA theat
issuance of (handgun, expenses for
bon/s as handheld any training
defined in radio); required by
Sec. 3(a) d. Automatic the principal
renewable crediting or other
every year. provision government
(Sec. 11, which shall instrumentalit
DO 174- immediately ies shall be
17) give effect to shouldered
the common by the
provision in principal.
wage orders (Sec. 4, DO
that 150-16)
prescribed
wage Note: Administrative fee is different for
increases security guards which must not be less
and the than 20% of thetotal contract cost.
Service
Agreements
shall be
PAGE 180 OF 244
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Registration of Contractors and Principal as Direct Employer: Finding of

Subcontractors Labor-Only Contracting
Mandatory Registration and Registry of There is "labor-only" contracting where the
Legitimate Contractors. Consistent with the person supplying workers to an employer does
authority of the Secretary of Labor and not have substantial capital or investment in the
Employment to restrict or prohibit the contracting form of tools, equipment, machineries, work
out of labor to protect the rights of workers, it shall premises, among others, and the workers
be mandatory for all persons or entities, including recruited and placed by such person are
cooperatives, acting as contractors to register performing activities which are directly related to
with the Regional Office of the Department of the principal business of such employer. In such
Labor and Employment (DOLE) where it cases, the person or intermediary shall be
principally operates. (D.O. No. 174-17, Sec. 14) considered merely as an agent of the employer
who shall be responsible to the workers in the
Validity of Certificate of Registration of same manner and extent as if the latter were
Contractors directly employed by him. (Labor Code, Art. 106)
The contractor shall be deemed registered only In the event that there is a finding that the
on the date of issuance of its Certificate of contractor or subcontractor is engaged in labor-
Registration. The Certificate of Registration shall only contracting under Section 5 and other illicit
be effective for 2 years, unless cancelled after forms of employment arrangements under
due process. The same shall be valid in the Section 6 of these Rules, the principal shall be
region where it is registered. deemed the direct employer of the contractor's or
subcontractor's employees. (D.O. No. 174-17,
In case the contractor has Service Agreement or Sec. 7)
operates outside the jurisdiction of the RTC
where it is registered, it shall request a duly Therefore: The principal shall be deemed an
authenticated copy of its certificate of registration employer of the contractual employee and shall
from the DOLE Regional Office where it seeks to be directly liable, in the following cases:
operate, together with a copy of its Service a. Labor-only contracting; and
Agreement/s in the area, for purposes of b. Prohibited contracting arrangements
monitoring compliance with the rules (D.O. No (Broadway Motors v. NLRC, G.R. No. 78382,
174-17, Sec. 20) 1987)
Note: Failure to register shall give rise to the Principal as Direct Employer: Violations of
presumption that the contractor is engaged in Rights of Employees or Required Contracts
labor-only contracting. (Aklan v. San Miguel A finding of violation of either Sections 10 (Rights
Corporation, G.R. No. 168537, 2008) of Contractor's Employees) or 11 (Required
Contracts) shall render the principal the direct
c. BoaDARY LIABILITY employer of the employees of the contractor or
subcontractor, pursuant to Art. 109 of the Labor
Labor Code Provisions on Liability Code (D.O. No. 147-17, Sec. 12)
In the event that the contractor or sub-contractor
fails to pay the wages of his employees in Solidary Liability in Legitimate Contracting:
accordance with this Code, the employer shall be Violations of the Labor Code and Social
jointly and severally liable with his contractor or Legislation
sub-contractor to such employees to the extent of In the event of violation of any provision of the
the work performed under the contract, in the Labor Code, including the failure to pay wages,
same manner and extent that he is liable to there exists a solidary liability on the part of the
employees directly employed by him. (Labor principal and the contractor for purposes of
Code, Art. 106) enforcing the provisions of the Labor Code and
other social legislations, to the extent of the work
performed under the employment contract. (D.O.
No. 174-17, Sec. 9)
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Even in the absence of an EER, the law itself

Every employer or indirect employer shall be held establishes one between the principal and the
responsible with his contractor or subcontractor employees of the agency for a limited purpose i.e.
for any violation of any provision of this Code. For in order to ensure that the employees are paid the
purposes of determining the extent of their civil wages due them. (Lapanday Agricultural Dev't
liability under this Chapter, they shall be Corp. v. CA, G.R. No. 112139, 2000)
considered as direct employers. (Labor Code,
Art. 109) Solidary Liability of Principal and Employer in
cases of Illegal Dismissal
Note: Principal's Liability under Art. 109 Joint and several with the employer, but with the
If the liability is for failure to pay the minimum right to reimbursement from the employer-
wage, or the service incentive leave or other contractor
benefits derived from or provided for by law, the
principal is equally liable with the contractor Wage differentials only to the extent where the
employee performed the work under the principal
If the liability is invested with punitive character,
such as an award for backwages and separation General Rule: Principal and contractor are
pay because of an illegal dismissal, the liability solidarily liable.
should be solely with the contractor in the
absence of proof that the principal conspired with Exception: When the contractor has already
the contractor in the commission of the illegal
received from the Principal the correct amount of
dismissal (see Merelc° v. NLRC, G.R. No.
wages and benefits, but failed to turn them over
145402, 2008) to the workers, the contractor should solely bear
the liability for the underpayment of wages and
Solidary Liability for Wages and Money
non-payment of overtime pay. (Meralco v. NLRC,
Claims for Performed Under The Contract
G.R. No. 145402, 2008)
In the event that the contractor or subcontractor
fails to pay the wages of his employees in
Effect of Termination of Employment
accordance with this Code, the employer shall be The termination of employment of the
jointly and severally liable with his contractor or
contractors/subcontractors employee prior to the
subcontractor to such employees to the extent of expiration of the Service Agreement shall be
the work performed under the contract, in the
governed by Articles 297, 298 and 299 of the
same manner and extent that he is liable to Labor Code.
employees directly employed by him (Labor
Code, Art. 106) In case the termination of employment is caused
by the pre-termination of the Service Agreement
Should the indirect employer be constrained to not due to authorized causes under Article 298,
pay the workers, it can recover whatever amount the right of the contractor's/subcontractor's
it paid, in accordance with the terms of the service
employee to unpaid wages and other unpaid
contract between itself and the contractor benefits including unremitted legal mandatory
(Rosewood Processing v. NLRC, G.R. Nos. contributions, e.g., SSS, PhilHealth, Pag-IBIG,
116476-84, 1998). ECC, shall be borne by the party at fault, without
prejudice to the solidary liability of the parties to
The joint and several liability of the contractor and
the Service Agreement.
the principal is mandated by the Labor Code to
assure compliance with the provisions therein Where the termination results from the expiration
including the minimum wage. The contractor is of the Service Agreement, or from the completion
made liable by virtue of his status as direct of the phase of the job or work for which the
employer. The principal, on the other hand, is employee is engaged, the latter may opt to wait
made the indirect employer of the contractor's for re-employment within three (3) months to
employees to secure payment of their wages resign and transfer to another contractor-
should the contractor be unable to pay them. employer.
PAGE 182 OF 244
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emoluments, including retirement bener ts

Failure of the contractor to provide new whenever applicable. The mere expiration of the
employment for the employee shall entitle the Service Agreement shall not be deemed as a
latter to payment of separation bene ts as may termination of employment of the
be provided by law or the Service Agreement, contractor's/subcontractor's employees who are
whichever is higher, without prejudice to his/her regular employees of the latter.
entitlement to completion bonuses or other
PAGE 183 OF 244

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Comparative Table: D.O. No. 18-A-11 vs. D.O. No. 174-17

DOLE_D.O. 18-A-11. DOLE.D.O. -174-17
overage
Expressly includes 03) erptives . No express inclusion of cooperatives, but should
i still be included
ft-Hate-a Relationship
1..
11-ilateral RelOtionshiP:-,',VOSrmphasized.
, fi Deleted provision on trilateral relationship.
Pri.pdpal„. . ...c_olltractott ->„Employees

rqpi.00Ity , ' LSubc actuig
Rco jtRri of editi ,, Legitirnate 'Job•:, Requirements: Permissible Contracting
Ciintr'nctin
> Distinct and independent business; own
,-- DOLEregisterecj manner and method of performance of job
, Distill& ,4601.ki-1 0 ndent business; . awn' or work
menrcer aiici ' rrie od in performing lob,-, > Substantial capital AND investment (in the
work; set)..!tce;;2,• ree fiorn. Lcontrol , and form of tools, equipment, machinery and
dir6o,ti:Ory Of 0110,-ipal except OOlt:S supervision)
, Subt6htiO"OpOifol:andgfifiVe'ttrilent > [new] Free from control and/or direction of
,-• Ser,-WceL. Adrlebitieht: (A) complies with the principal
- lab& la,:e ribt-*ta'nd:b,eriefits - - :
> Service Agreement (SA) complies with
, labor law rights and benefits
1
Su ti: t4iiii6VOpita ' .
3',•0oixoo4'00 , , Php5,000,00.00
Net Financial Contractin:9„coOcity(NEP:p). -

Thd--,f0i'mula.fo' .4terrnirlde :--firiarlc.61:660:ac4 pf', No provision on NFCC
the conir'atof't6-•`e'EirrY`O'(1 p.10 -4i-k• or service
s,Ggiightfto::t10.14-rdelreKettlit) er,.a Ai ,,
:A:Howe
_
' -. No co-terminus employment (for regular)
,.
The terrfOGOuration ofleftloyment.that, must be Mere expiration of SA shall not be deemed as a
cdLextniu1sivewith-the'SA.46kith the specific phase • termination of employment of the contractor's
of work for which the employee is engged employees who are regular employees of the
, latter.
abor7pribr, Contr tii-3
jPfOhiOited! , Mt i, Absolutely Prohibited
Labor-only Contraetiri . '' In- Labor-only Contracting: 2nd kind
Tr1ezztorifractor doet il ;e4.SU MO (a Capital The contractor does not have substantial capital
.• - - ' ' g; "' ',,,,,,...v51,
.•'••• ,3. :,,,
- or •• ,. ,)) - or -
...The contraret0 0'opiio h4's?0 jnve4trnents in, tffe,1 The contractor does not have investments in the
A.,tor .
Jfop of tools :e glp e ,, 'I'A'ainery, 'work form of tools, equipment, machineries,
' .. & -iises, a morrg!!Otifeltik supervision, work premises among others,
PAGE 184 OF 244

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- .,.-. • '41;A' , 1 i•A ,. A'''' - and -

- ''C.. f
.4 ..1
t 7
•
&r - .1
>
.1 71 '4 , , The contractor's or subcontractors employees
i j ih ''. 1.1fri _ -1-t-fll recruited and placed are performing activities
"desir0. 4 . - , which are directly related to the main business
directly relate o4i j ..,)".p -.1; ,,I. ,i f 1 p1 ii Mj i
.-
operation of the principal.
\rVithin a
regardles$;-O, . Oh-.s„ 4 i ZaW i
to be perfortheoftr40) t '0,-.'i
the princibabA.,:..
Labor-onIV.'ContractinoE, " ' Labor-only Contracting: 2nd kind
The cditreefor3.ddeOry . r, t. uiiti.f.i The contractor does not exercise the right to
the performarIcebt.the,\Vo'h<: of errip 0), ,,,, control over the performance of the work of the
employee.
Other Prohibitions •:,: , ,- • ,
,
' Other Illicit Forms of Employment Arrangements
, . Prohibitions
Other, - .. --,,-, •-- -- -,-,
„„
,n, n .„.,, .:., 1
ee....,iigo;-:„
t , - .i,IvNV
(Good faith and legitimate business reason no
.., _ zn longer a defense)
N/A -. ' -.-- - - 1 . [new] Contracting through an in-house
. .--.. e, 4--
- ,-. • , cooperative which merely supplies workers to
t the principal
• ,-,- ,.. ,,,1_
_____,„,., —
.. -- - 'au ,1- 7- -WfiC
,- i!' --...
- N/A-
. .. . [new] Practices, schemed or employment
..-, _. , - arrangements designed to circumvent
' Security of Tenure
. '
.3: . N/ ' s' ' '° 3. [new] Contracting out of a job or work by
. , '' -t ''''''' V. . "' • reason of a strike or lockout whether actual or
_ ...
, imminent
_
. H .§01t i t rrniriptio E'rd li a a 4. Not listed
redtiOtir.5674-1;6*.teri9). 0
. ReSults:in,termipetippv, c !on, regara,
reduction/splitting of bargaihinTbn ,
.. -: Refusal '. to ...gie:- provide- BA,(-qtidg**- ;- "ilo. ' iif,,i" 5. Not listed
% contracts - in., bergainis.10'. ",-.unit.,. 0 '''.4" , nci a .
'certified,666aining--ageht to"-§76les'alid'exclii§iy'e
'bargaining agent
. -, -:, . ,
,1
7 .Engaging/maintaining .. by principal . of 6. Not listed

'subcontracted Oi-nplpyee.a iii.0-66`.6:5;of CBA or
set.by,.In2c*try Tripartite Cot,ineCi' .' '
, , •
: Contracting - Out of a.. jcilpivicirldelit!ige that is 7. Not listed
nece0ailyt- desirable or directly, related to the
business/ operation of the principal by reason '
- of strike/lockout
..
.„ ,,..
When Priria0aMay;Bo.Li'able:Lr:;.,tio,,,,,,,,,,-....1,,
PAGE 185 OF 244
ATENEO CENTRAL
..
Duties of priii‘tdrial," as indirect errififti*?" Principal deemed direct employer when there is
evidence of:
-4 1. Labor-only contracting;
•,! er ,-,. 2. Other illicit forms of employment
arrangements;
• , 0 3. Violation of employee's rights
sn
'4 1 4. Violation of required contracts
opiiiii 0#401,,§f:,e.fii.i,t, tin

r.,#.6Olike,.. ' . ...I,
, "i •'i-'to'''
Benefits being prOpyed . by parties, --tor, existing - No provision
contracting arran'gPments
' ' ,-li'e i pa
shalt not - ii-'ed-- ' y
gthis D.O.
t EibkifitentMe i iiiilatapn
'c51:14'id by½ iFe-te? ijaton- of SA not ue to, Same
-authbriZed causes, ' iii b yhpai Wages an
.b ef orne by part t fault.-: ,.,,
Employee may p or.; pairan, ofk§ppOrOtiPlir/- Employee may opt to wait for re-employment
benefits as may be. "tqVi6d i'iy)oVir Or the:'-',SA',. within 3 months to resign and transfer to another
rthOut.,i prejurl,l,94-- i,S/her eritit4mkrit,:-tothe employer.
completion [of, bonuses.: pr, othee?4;044.prnOlits Failure to provide new employment, employee
including retirement be6efifS' whenever applicable.' shall be entitled to separation benefits as may be
provided by law or the SA, whichever is higher,
,. without prejudice to entitlement completion of
bonuses or other emoluments, including
retirement benefits whenever applicable.
7:SkiiratiOl :.on-efttil ,..._ :. i' :.,'::
t 6aiiiiili'ar' is çntirgent owl oc dadiiiir the; If not re-employed after 3-month wait, separation
SA Of may apply on out1no benefits are given as may be provided by law or
e; a or; e: ,,, , , the SA.
7,6471tifiare6. -dgifili.:, , ' _ ,
egieliAn/Reriewal Fee Php25,000 ' Php 100,00
i Validity:,Three'(3) years Two (2) years

DOLE Programs ' -. ---, ,,
. N/A 7 ' - Mandatory Enrollment to DOLE Programs:
Principal and Contractors/Subcontractors
PAGE 186 OF 244

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Department Circular No. 01-17 Non-Applicability of DO 174-17 to

D.O. 174, Series of 2017, applies only to trilateral BPO/LPO/KPO
relationship which characterizes contracting or
subcontracting arrangement. It does not 1. Business Process Outsourcing
contemplate to cover information technology- 2. Knowledge Process Outsourcing
enabled services involving entire or specific 3. Legal Process Outsourcing
business process. 4. IT Infrastructure Outsourcing
5. Application Development
6. Hardware and/or Software Support
NOTE: Construction Industry NOT covered by 7. Medical Transcription
mandatory registration provision of D.O. 174-17 8. Animation Services
9. Back Office Operations/Support
The DOLE, through its regional- offices, shall not
require contractors licensed by PCAB in the Applicability/Non-Applicability of DO 174-17
Construction Industry to register under D.O. 18- to Construction Industry; Coordination with
A, Series of 2011. Findings of violation/s on labor PCAB-CIAP
standards and occupational health and safety Pursuant to PD No. 1746, Series of 1980,
standards shall be coordinated with PCAB for its licensing and the exercise of regulatory powers
appropriate action, including the possible over the construction industry is lodged with the
cancellation/suspension of the contractor's Philippine Contractors Accreditation Board
(PCAB) of the Construction Industry Authority of
license.
the Philippines (CIAP)
Contractors licensed by PCAB which are
Applicability/Non-Applicability of DO 174-17
engaged in other contracting or subcontracting to Private Security Agencies
arrangement in addition to, or other than Except for the registration requirements as
construction activities shall be required to register provided for in DO 174-17, contracting or
under D.O. No. 174-17 subcontracting arrangements in the private
security industry shall be governed by DO 15-16
Except for the registration requirements of D.O.
174-17, contracting or subcontracting Non-Applicability of DO 174-17 to Other
arrangements in the private security industry shall Contractual Relationships
be governed by D.O. No. 150, Series of 2016. DO 174-17 applies only to trilateral relationship
which characterizes contracting or subcontracting
arrangement. It does not cover: (governed by CC)
D.O. No. 174-17 applies only to trilateral 1. Contract of Sale or Purchase
relationship which characterizes contracting or 2. Contract of Lease
subcontracting arrangement. It does not 3. Contract of Carriage
contemplate to cover contractual relationships 4. Contract of Growing/Growership
such as in contract of sale or purchase, contract Agreement
of lease, contract of carriage, contract 5. Toll Manufacturing
growing/growership agreement, toll 6. Contract of Management, Operation, and
manufacturing, contract of management, Maintenance
operation and maintenance and other contracts
DO 174-17 does not cover the contracting out of
governed by the Civil Code and other special
job or work to a professional, or individual with
laws. unique skills and talents who himself performs the
job or work for the principal.
D.O. No. 174-17 does not also cover the
contracting out of job or work to a professional, or
individual with unique skills and talents who
himself or herself performs the job or work for the
principal.
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SPECIAL CASES TERMINATION OF EMPLOYMENT

1. Working scholars
No EER between students on one hand, The terms and conditions of employment of all
and schools, colleges or universities on the government employees, including employees of
other, where: GOCCs, shall be governed by the Civil Service
a. There is written agreement between Law, rules and regulations (Labor Code, Art. 291)
them under which the former agree to
work for the latter in exchange for the Coverage
privilege to study free of charge General Rule: All establishments and
b. Provided, the students are given real undertakings, whether for profit or not (Labor
opportunities, including such facilities Code, Art. 293)
as may be reasonable and necessary
to finish their chosen courses under Exception: Government, its political
such agreement subdivisions, including GOCCs without original
charter (IRR Labor Code, Sec. 1, Rule 1, Book VI)
2. Resident physicians in training
There is EER between resident physicians Security of Tenure
and the training hospital UNLESS: It is a constitutionally protected right and applies
a. There is a training agreement between to all workers (PHIL. CONST. art. XIII, Sec. 3)
them
b. The training program is duly accredited In cases of regular employment, the employer
or approved by the appropriate shall not terminate the services of an employee
government agency. except for a just cause or when authorized by the
provisions of the Labor Code. (Labor Code, Art.
Effects of Labor-Only Contracting 294)
A finding by a competent authority of labor-only
contracting shall render the principal jointly and Security of tenure is the constitutional right
severally liable with the contractor to the latter's granted to the employee, that the employer shall
employees in the same manner and extent that not terminate the services of the employee except
the principal is liable to employees directly hired for just cause or when authorized by law. It
by him/her as provided in Art. 106 of the Labor extends to regular (permanent) as well as non-
Code, as amended. (D.O. 18-A, Sec. 27, 2011) regular (temporary) employment. (Kiamco v.
NLRC, G.R. No. 129449, 1999)
A finding of commission of any of the prohibited
activities in Sec. 7 or violation of either Sections B. TERMINATION BY EMPLOYER
8 or 9 hereof, shall render the principal the direct
employer of the employees of the contractor or Note: In September 2015, DOLE issued D.O.
subcontractor. (D.O. 18-A, Sec. 7, 2011) 147-15, Amending the IRR of Book VI of the
Labor Code.
1. JUST CAUSES
Grounds: (SMWD-GHN-FWB-CO-A)
1. Serious misconduct Or Willful
Disobedience by the employee of the lawful
orders of his employer or representative in
connection with his work (work-related)
2. Gross and Habitual neglect by the
employee of his duties
3. Fraud or Willful breach by employee of the
Trust reposed in him by his employer or
PAGE 188 OF 244

ATENEO CENTRAL
duly authorized representative (not mere 7. Theft of company property

suspicion)
4. Commission of a crime or offense by the Habitual Infractions
employee against the person of his A series of irregularities when put together may
employer or any immediate member of his constitute serious misconduct (Gustilo v. Wyeth
family or duly authorized representative G.R. No. 149629, 2004)
5. Other analogous cases
Totality of infractions doctrine
SERIOUS MISCONDUCT OR WILLFUL The totality of infractions or the number of
DISOBEDIENCE (Labor Code, Article 29714 violations committed during the period of
employment shall be considered in determining
Serious Misconduct the penalty to be imposed upon ah erring
Improper or wrong conduct; the transgression of employee. Fitness for continued employment
some established and definite rule of action, a cannot be compartmentalized into tight little
forbidden act, a dereliction of duty, willful in cubicles of aspects of character, conduct and
character, and implies wrongful intent and not ability separate and independent of each other.
mere error in judgment. To be serious within the While it may be true that petitioner was penalized
meaning and intendment of the law, the for his previous infractions, this does not and
misconduct must be of such grave and should not mean that his employment record
aggravated character and not merely trivial or would be wiped clean of his infractions. After all,
unimportant. (Villamor Golf Club v. Pehid, G.R. the record of an employee is a relevant
No. 166152, 2005) consideration in determining the penalty that
should be meted out since an employee's past
The charge of drug abuse inside the company's misconduct and present behavior must be taken
premises and during work hours against the together in determining the proper imposable
petitioner constitutes serious misconduct. penalty. (Merin v. NLRC, G.R. No. 171790)
(Bughaw Jr. v. Treasure Industrial Corporation,
G.R. No. 173151, 2008) Elements of Willful Disobedience
1. There must be disobedience or
Elements of Serious Misconduct insubordination;
1. There must be misconduct; 2. The disobedience or insubordination must
2. The misconduct must be of such grave and be willful or intentional characterized by a
aggravated character; wrongful and perverse attitude;
3. Relates to the performance of the 3. The order violated must be reasonable,
employee's duties; and lawful, and made known to the employee;
4. A showing that the employee becomes unfit and
to continue working for the employer. (D. 0. 4. The order must pertain to the duties which
No. 147-15, Sec. 5.214 he has been engaged to discharge. (D.O.
No. 147-15)
Examples
1. Sexual harassment; GROSS AND HABITUAL NEGLECT (Labor
2. Fighting within company premises; Code, Article 297[0
3. Accusatory and inflammatory language used
by an employee to an employer or superior Elements of Gross and Habitual Neglect:
(Nissan Motors Phi/s. v. Angelo, G.R. No. 1. There must be neglect of duty; and
164181, 2011) 2. The negligence must be both gross and
4. Falsification of time records; habitual in character. (D.O. No. 147-15)
5. Gross immorality; and
6. Sexual intercourse inside company premises Gross Neglect
and during work hours (Imasen Philippine An absence of that diligence that an ordinarily
Manufacturing Corp v. Alcon, G.R. No. prudent man would use in his own affairs (DOLE
194884, 2014) Manual, Sec. 4343.01[27j)
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employee's current whereabouts (Agabon v.

Habitual Neglect NLRC, G.R. No. 158693, 2004)
Implies repeated failure to perform one's duties
over a period of time (JGB and Associates, Inc. v. No hearing is required to validly dismiss an
NLRC, G.R. no. 109390, March 7, 1996) employee for abandonment (Intertranz Container
Lines v. Bautista, G.R. No. 187693, 2010)
Elements of Gross and Habitual Neglect:
1. There must be neglect of duty; and Mere absence or failure to report for work, even
2. The negligence must be both gross and after notice to return, does not necessarily
habitual in character. (D.O. No. 147-15, Sec. amount to abandonment. Abandonment is a
5.2[c]) matter of intention and cannot lightly be
presumed from certain equivocal acts. The
Exception: Where the negligence was gross, operative act is still the employee's ultimate act of
but not habitual, the SC still dismissed the putting an end to his employment (Jordan v.
erring employee. The SC agreed that the Grandeur Security and Services, G.R. No.
resultant damage caused by the employee's 206716, 2014)
negligence should be considered in the
dismissal of the employee. In this case, the Abandonment vis-à-vis Illegal Dismissal
damage went as far as claiming the life of a General Rule: Abandonment inconsistent with
child. (School of Holy Spirit v. Taguim, G.R. the immediate filing of a complaint for illegal
No. 165565, 2008) dismissal Tamblot Security v. Item, G.R. No.
199314, 2015)
Note: Actual damage, loss, or injury is not an
essential requisite (DOLE Manual, Sec. Exception: The above rule has no application
4343.0112]) where the complainant does not pray for
reinstatement and asks for separation pay
Forms of neglect of duty instead (Jo v. NLRC, G.R. No. 121605, 2000)
1. Habitual tardiness and absenteeism;
Poor performance
2. Abandonment of work Previous infractions by the employee should have
(a) Failure to report for work or absence been acted upon appropriately by the employer
without valid or justifiable reason; and before terminating the former.
(b) Clear intention to sever EER is manifested
by some overt acts (Tamblot Security and As a general concept, "poor performance" is
General Services v. Item, G.R. No. 199314, equivalent to inefficiency and incompetence in
2015) the performance of official duties. An
unsatisfactory rating can be just cause for
Due Process in Abandonment dismissal only if it amounts to gross and habitual
Twin-Notice Requirement neglect of duties. Thus, the fact that an
(a) First Notice directing the employee to employee's performance is found to be poor and
explain why he should not be declared as unsatisfactory does not necessarily mean that the
having abandoned his job; employee is grossly and habitually negligent of
(b) Second Notice to inform him of the his duties. (Universal Staffing Inc. v. NLRC, G.R.
employer's decision to dismiss him on the No. 177576, 2008)
ground of abandonment (Kingsize
Manufacturing Corp v. NLRC, G.R. Nos. Gross negligence includes gross inefficiency
110452,54, 1994) Article 290 of the Labor Code provides that one
of the just causes for terminating an employment
Notices in abandonment cases must be sent to is the employee's gross and habitual neglect of
the employee's Iasi known address per record of his duties. This cause includes gross inefficiency,
the company. The employer need not look for the negligence and carelessness (Century Iron
Works, Inc. v. Batias, G.R. No. 184116, 2013)
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FRAUD OR WILLFUL BREACH OF TRUST Guidelines for the application of the doctrine
(Labor Code, Article 297(14) of loss of confidence
1. Loss of confidence should not be simulated;
Elements of Fraud or Willful Breach of Trust 2. It should not be used as a subterfuge for
1. There must be an act, omission, or causes which are improper, illegal or
concealment; unjustified;
2. The act, omission or concealment involves 3. It may not be arbitrarily asserted in the face
a breach of legal duty, trust, or confidence of overwhelming evidence to the contrary;
justly reposed; and
3. It must be committed against the employer 4. It must be genuine, not a mere afterthought
or his/her representative; and to justify earlier action taken in bad faith
4. It must be in connection with the (Coca-Cola Bottlers, PhiIs. Inc. v. Kapisanan
employees' work. (D.O. No. 147-15, Sec. ng Malayang Manggagawa sa Coca-Cola,
5.2(d)) G.R. No. 148205, 2005)
Elements of Loss of Confidence The breach must be related to the performance of

1. There must be an act, omission or the employee's function. (Enriquez v. BPI, G.R.
concealment; No. 172812, 2008)
2. The act, omission or concealment justifies
the loss of trust and confidence of the When an employee accepts a promotion to a
employer to the employee; managerial position or to an office requiring full
3. The employee concerned must be holding trust and confidence, she gives up some of the
a position of trust and confidence; rigid guarantees available to ordinary workers
4. The loss of trust and confidence should not infractions which is committed by others would be
be simulated; overlooked or condoned or penalties mitigated
5. It should not be used as a subterfuge for may be visited with more sever disciplinary
causes which are improper, illegal, or action. (Tirazona v. CA, G.R. No. 169712, 2008)
unjustified; and
6. It must be genuine and not a mere Positions of trust and confidence
afterthought to justify an earlier action Managerial employees: Those vested with the
taken in bad faith. (D.O. No. 147-15, Sec. powers or prerogatives to lay down management
5.2(e)) policies and to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees
Loss of trust and confidence to be a valid cause or effectively recommend such managerial
for dismissal must be based on a willful breach of actions.
trust and founded on clearly established facts.
The basis for the dismissal must be clearly and Fiduciary Rank and file: Those who in the
convincingly established but proof beyond normal and routine exercise of their functions,
reasonable doubt is not necessary. (Prudential regularly handle significant amounts of money or
Guarantee and Assurance Employee Labor property. Examples are cashiers, auditors,
Union v. NLRC, G.R. No. 185335, 2012) property custodians, etc. (Prudential Guarantee
and Assurance Employee Labor Union v. NLRC,
G.R. No. 185335, 2012)
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Immediate Members of the Family

MANAGERIAL FIDUCIARY RANK- 1. Between husband and wife;
_ . AND-FILE 2. Between parents and children;
Mere existence of a Proof of involvement 3. Among other ascendants and
basis for the belief of in the alleged events descendants;
employee's guilt in question required; 4. Among brothers and sisters, whether of
(Grand Asian mere uncorroborated the full or half-blood (see Family Code,
Shipping Lines v. assertions and Art. 150)
Galvez, G.R. No. accusations are not
178184, 2014) enough (Etcuban v. Acquittal in criminal case arising from
Sulpicio Lines, G.R. misconduct
No. 148410, 2005) Notwithstanding petitioner's acquittal in the
Employment for a criminal case for qualified theft, the company had
long time is counted adequately established the basis for the
against the employee company's loss of confidence as a just cause to
(Salvador v. terminate. As opposed to the "proof beyond
Philippine Mining reasonable doubt" standard of evidence required
Service Corp., G.R. in criminal cases, labor suits require only
No. 148766, 2003) substantial evidence to prove the validity of the
dismissal (Paulin° v. NLRC, G.R. No. 176184,
Confidential employees are those charged with 2012)
custody and protection of employer's property like
a cashier (this is different from the "confidential Past Infractions Rule
employees" in labor relations) Previous offenses may be used as justification for
dismissal from work only if the past infractions are
COMMISSION OF A CRIME OR OFFENSE: related to the subsequent offense upon which the
(Labor Code, Article 297(d1) basis of termination is decreed. (Salas v. Aboitiz
One Inc., G.R. No. 178236, 2008)
Commission of a crime or offense
Refers to an offense by the employee against the ANALOGOUS CASES (Labor Code, Article
person of his employer or any immediate member 297feJ)
of his family or his duly authorized representative.
Requisites
Elements 1. There must be an act or omission similar
1. There must be an act or omission to those specified just causes;
punishable/ prohibited by law; and 2. The act or omission must be voluntary
2. The act or omission must be voluntary and/or willful on the part of the employees
and/or willful on the part of the employees. (D.O. No. 147-15, Sec. 5.210
(D.O. No. 147-15, Sec. 5.2[t])
Analogous Cases must be due to the voluntary
Conviction or prosecution of the employee is not and/or willful act or omission of the employee.
necessary. A criminal case need not be actually (Cosmos Bottling Corp. v. Fermin, G.R. No.
filed. Commission of acts constituting a crime is 193676, 2012)
sufficient. (Nicolas v. NLRC, G.R. No. 113948,
1996) D.O. No. 147-15 (new qualification)
No act or omission shall be considered as
analogous cause unless expressly specified in
he company rules and regulations or policies.
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Analogous Cases must be due to the voluntary Immorality

and/or willful act or omission of the employee. Disgraceful or immoral conduct can be used as a
(Cosmos Bottling Corp. v. Fermin, G. R. No. basis for termination of employment (Santos, Jr.
193676, 2012) v. NLRC, G.R. No. 115795, 1998)
Examples The act of engaging in extramarital affairs was

1. Abandonment specifically provided for by the cooperative's
2.Violation of safety rules Personnel Policy as one of the grounds for
3. Gross inefficiency termination of employment and said act raised
4.Wrongful acts of employee against the concerns ,to the cooperative as the Board
company received numerous complaints and petitions from
5. Violation of code of discipline the cooperative members themselves asking for
6.Failure to heed an order not to join an illegal the removal of Bandiola because of his immoral
picket conduct, hence, immorality (extramarital affair)
7.Immorality justified terminating the employment by the
8. Sexual harassment employer (Alilem Credit Cooperative v. Bandiola,
Jr., G.R. No. 173489, 2013)
Change of Ownership
A mere change in the equity composition of a Pregnancy out of wedlock
corporation is neither a just nor an authorized When the law speaks of immoral or, necessarily,
cause that would legally permit the dismissal of disgraceful conduct, it pertains to public and
the corporation's employees en masse. (SME secular morality; it refers to those conducts which
Bank, Inc. v. De Guzman, G.R. No. 184517, are proscribed because they are detrimental to
2013) conditions upon which depend the existence and
progress of human society.
Other Just Causes under other Labor Code
provisions To stress, pre-marital sexual relations between
1. Union officers who, with knowledge, two consenting adults who have no impediment
participate in an illegal strike. to marry each other, and, consequently,
2. Any employee who commits an illegal act conceiving a child out of wedlock, gauged from a
during a strike purely public and secular view of morality, does
3. Strikers who violate orders, prohibitions or not amount to a disgraceful or immoral conduct.
injunctions issued by the NLRC, the (Leus v. St. Scholastica, G.R. No. 187226, 2015)
Secretary of Labor and Employment or the
President Valid Dismissal Because of Application of
4. Violation of union security clause in the Union Security Clause
CBA Union security clauses in the collective
bargaining agreements, if freely and voluntarily
Doctrine of Incompatibility entered into, are valid and binding. Thus, the
Where the employee has done something that is dismissal of an employee by the company
contrary or incompatible with the faithful pursuant to a labor union's demand in
performance of his duties, his employer has a just accordance with a union security agreement
cause for terminating his employment. (Manila does not constitute unfair labor practice.
Chauffer's League v. Bachrach Motor, G.R. No. (Malayang Samahan ng mga Manggagawa sa M.
L-47138, 1940) Greenfield v. Ramos, G.R. No. 113907, 2000;
Villar v. Inciong, G.R. No. L-50283-84, 1983
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Although a union security clause in a CBA may The Supreme Court had upheld the dismissal of
be validly enforced and dismissal pursuant a cabin crew member for being unable to trim
thereto may likewise be valid, this does not erode down his weight. The Court classified such weight
the fundamental requirement of due process. The standards as a BFOQ, which is defined as the
reason behind the enforcement of union security employment qualifications imposed by an
clauses which is the sanctity and inviolability of employer such as sex, religion, or national origin
contracts cannot override one's right to due as a limiting factor in performing a certain job. In
process. (MSMG-UWP v. Ramos, G.R. No. the instant case, PAL is a common carrier and
113907, 2000) from the nature of its business and for reasons of
public policy, it is bound to observe extraordinary
Where the employer compelled the employee to diligence for the safety of the passengers it
go on forced leave upon recommendation of the transports. A BFOQ on weight standards in this
union for alleged violation by the employee of the case was deemed to be necessary and justified
closed—shop agreement, the NLRC correctly given the normal operations of PAL. (Armando
ordered the reinstatement of the employee and Yragsuegi v. PAL, GR 168081, 2008)
directed the union to pay the wages and fringe
benefits which employees failed to receive as a 2. AUTHORIZED CAUSES
result of her forced leave and to pay attorney's
fees. (Manila Mandarin Employees Union v. Grounds: (RRLCD)
NLRC, G.R. No. 76989„ 1987) 1. Redundancy
2. Retrenchment
Where the employer dismissed his employees in 3. Introduction of Labor-saving devices
the belief in good faith that such dismissal was 4. Cessation or Closure of Operation of the
required by the closed — shop provisions of the Establishment or Undertaking
collective bargaining contract with the union, he 5. Disease
may not be ordered to pay back compensation to
such employees although their dismissal is found REDUNDANCY
to be illegal. (Confederated Sons of Labor v.
Anakan Lumber, G.R. No. L-12503, 1960) Redundancy exists where the services of an
employee are in excess of what is reasonably
Bona Fide Occupational Qualification (BFOQ) demanded by the actual requirements of the
General Rule: Where the job itself necessarily enterprise. (Wiltshire File Co. Inc. v. NLRC, G. R.
requires a particular qualification, then the job No. 82249, 1991)
applicant or worker who does not possess it may
be disqualified on that basis and such will not be A position has become superfluous as an
considered unlawful discrimination. outcome of a number of factors such as over
hiring of workers, decreased volume of business,
Exception: To justify a BFOQ, the employer dropping of a particular product line or service
must prove that: activity previously manufactured or undertaken
1. The employment qualification is reasonably by the enterprise (thus it only requires superfluity
related to the essential operation of the job not duplication of work (Asian Alcohol Corp. v.
involved; and NLRC, G. R. No. 131108, 1999)
2. There is factual basis for believing that all
or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job (Star Paper
Corporation, et. al. vs. Simbol, et. al., G.R.
No. 164774, 2006).
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Elements of Redundancy RETRENCHMENT

1. There must be superfluous positions or Retrenchment is one of the economic grounds
services of employees; resorted to by an employer to terminate
2. The positions or services are in excess of employment primarily to avoid or minimize
what is reasonably demanded by the actual business losses. (Azucena, The Labor Code with
requirements of the enterprise to operate in Comments and Cases Volume II-B, 884, 2016)
an economical and efficient manner;
3. There must be good faith in abolishing Elements of Retrenchment or Downsizing
redundant positions; 1. The retrenchment must be reasonably
4. There must be fair and reasonable criteria necessary and likely to prevent business
in selecting the employees to be losses;
terminated; and 2. The losses, if already incurred, are not
5. There must be an adequate proof of merely de minimis, but substantial, serious,
redundancy such as but not limited to the actual and real, or if only expected, are
new staffing pattern, feasibility studies/ reasonably imminent.
proposal, on the viability of the newly 3. The expected or actual losses must be
created positions, job description and the proved sufficient and convincing evidence
approval by the management of the such as financial statements (audited by an
restructuring. (DO 147-15) independent firm) over a span of several
years OR a some reasonable period of
Requisites for Implementation of a Valid time, and not merely the actual year of
Redundancy Program business loss;
1. A written notice served on both the 4. The retrenchment must be in good faith for
employees and the DOLE at least one the advancement of its interest and not to
month prior to the intended date of defeat or circumvent the employees' right
retrenchment to security of tenure; and
2. Payment of separation pay equivalent to at 5. There must be fair and reasonable criteria
least one month pay or at least one month in ascertaining who would be dismissed
pay for every year of service, whichever is and who would be retained among the
higher employees, such as status, efficiency,
3. Good faith in abolishing the redundant seniority, physical fitness, age, and
positions financial hardship for certain workers. (D. 0.
4. Fair and reasonable criteria in ascertaining No. 147-15, Sec. 5.41CD
what positions •are to be declared
redundant and accordingly abolished. "To Prevent Losses"; Proof Required
(Lopez Sugar Corporation v. Franco, G.R. The phrase "to prevent losses" means that
No. 148195, 2005) retrenchment or termination from the service of
some employees is authorized to be undertaken
Proof of good faith and fair and reasonable by the employer sometime before the losses
criteria to substantiate redundancy anticipated are actually sustained or realized.
1. New staffing pattern; Actual losses need not set in prior to
2. Feasibility studies / proposal on the retrenchment (Cajucom VII v. TPI Phil. Cement
viability of the newly created positions; Corp., G.R. No. 149090, 2005)
3. Job description; and
4. Approval by the management of the The employer bears the burden of proving the
restructuring (General Milling Corporation existence of the imminence of substantial losses
v. Violeta L. Viajar, G.R. No. 181738, with clear and satisfactory evidence that there are
2013) legitimate business reasons justifying a
retrenchment. (Mount Carmel Employees Union
v. Mount Carmel College, G.R. No. 187261,
2014)
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Two kinds of losses to justify retrenchment "Last In, First Out" Rule (LIFO)
1. Incurred losses which are substantial, When there are two or more employees
serious, actual and real; and occupying the same position in the company
2. Expected losses — which are reasonably affected by the retrenchment program, the last
imminent. (Sanoh Fulton Phils. Inc. v. one employed will necessarily be the first to go
Bernardo & Tagohoy, G.R. No. 187214, (Maya Farms Employees Organization v. NLRC,
2013) G.R. No. 106256, 1994)
Due Process Requirements of the However: No law mandates LIFO. A host of

Retrenchment Program: relevant factors come into play in determining
1. The retrenchment is necessary to prevent or cost-efficient measures in choosing the
minimize losses and such losses are employees who will be retained or separated to
proven; save the company from closing chop. In
2. Written notice is given to the employees and determining these issues, management has to
the Department of Labor and Employment at enjoy a pre-eminent role. (Asian Alcohol Corp. v.
least one month before the intended date of NLRC, G.R. No. 131108, 1999)
retrenchment;
3. Payment of separation pay equivalent to at In case of installation of labor-saving devices,
least one month pay or at least 1/2 month pay redundancy and retrenchment, the LIFO rule
for every year of service, whichever is shall apply, except when an employee volunteers
higher; to be separated from employment (D.O. No. 147-
4. The employer exercise its prerogative to 15, Sec. 5.4)
retrench employees in good faith for the
advancement of its interest; and Hobson's Choice
5. Fair and reasonable criteria in ascertaining No choice at all; a choice between accepted what
who will be dismissed or retained. (Azucena, is offered or having nothing at all.
The Labor Code with Comments and Cases
Volume II-B, 886-887, 2016) In Asufrin, Jr. v. San Miguel Corp. (G.R. No.
156658, 2004), the employees were given the
Difference between redundancy and choice either to voluntarily retire, be retrenched
retrenchment witout benefits, or be dismissed without receiving
Redundancy- the position of the employee has any benefit at all.
become superfluous even if the business does
not suffer from financial problems.
Retrenchment-4 always linked with losses; a

cost-cutting measure made necessary by
business reverses.
(Azucena, The Labor Code with Comments and
Cases Volume II-B, 893, 2016)
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INSTALLATION OF LABOR-SAVING DEVICE CLOSURE OR CESSATION OF OPERATION

This refers to the installation of machinery to OF THE ESTABLISHMENT OR
effect economy and efficiency in the employer's UNDERTAKINGS
method of production (Edge Apparel, Inc. v. Closure of business is the reversal of fortune of
NLRC, G.R. No. 121314, 1998) the employer whereby there is a complete
cessation of business operations and/or an actual
Elements of a valid termination based on locking-up of the doors of establishment, usually
installation of labor-saving devices due to financial losses. Closure of business as an
1. There must be introduction of machinery, authorized cause for termination of employment
equipment or other devices; aims to prevent further financial drain upon an
2. The introduction must be done in good employer who cannot pay anymore his
faith; employees since business has already stopped.
3. The purpose for such introduction must be (J.A.T. General Services v. NLRC, G.R. No.
valid such as to save on cost, enhance 148340, 2004)
efficiency and other justifiable economic
reasons; Elements of Closure or Cessation of
4. There is no other option available to the Operation
employer than the introduction of 1. There must be a decision to close or cease
machinery, equipment or device and the operation of the enterprise by the
consequent termination of employment of management;
those affected thereby; and 2. The decision was made in good faith; and
5. There must be fair and reasonable criteria 3. There is no other opinion available to the
in selecting employees to be terminated. employer except to close or cease
(DO 147-15) operations. (DO 147-15)
Due Process Requirements for Termination Due Process Requirements for Termination
Due to Installation of Labor-Saving Device Due to Closure or Cessation of Operation
1. The employer served a written notice both 1. Service of written notice to the employees
to the employees and to the DOLE at least and to the DOLE at least one month before
30 days prior to the intended date of the intended date thereof;
termination; and 2. The cessation of or withdrawal from
2. The employer pays the employees business operations must be bona fide in
separation pay equivalent to one month character; and
pay or at least one month pay for every 3. Payment to the employees of termination
year of service, whichever is higher, a pay amounting to at least one-half (1/2)
fraction of at least six months being month pay for each year of service, or one
considered as one whole year. (Labor month pay, whichever is higher. (Azucena,
Code, Art. 298) The Labor Code with Comments and
Cases Volume II-B, 903, 2016)
Closure Not Due to Losses

In cases of closure not due to losses, it must NOT
be in BAD FAITH. (Azucena, The Labor Code
with Comments and Cases Volume II-B, 902,
2016)
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Guidelines in Closure Closure of Department

1. Closure or cessation of operations of The closure of a department or division of a
establishment or undertaking may either be company constitutes retrenchment by, and not
partial or total. closure of, the company itself. (Waterfront Cebu
City Hotel v. Jimenez, G.R. No. 174214, 2012)
2. Closure or cessation of operations of
establishment or undertaking may or may not Retrenchment vs. Redundancy vs. Closure
be due to serious business losses or financial Retrenchment - Redundancy Closure
reverses. However, in both instances, proof Reduction of The service The reversal
must be shown that: personnel of an of the fortune
usually due to Employee is of the
(a) It was done in good faith to advance poor financial in excess of employer
the employer's interest and not for the returns so as what is whereby there
purpose of defeating or circumventing to cut down required by is a complete
the rights of employees under the law on costs of an cessation of
or a valid agreement; and operations in enterprise business
(b) A written notice on the affected terms of operations
employees and the DOLE is served at salaries and and/or actual
least one month before the intended wages locking-up of
date of termination of employment. the doors of
the
3. The employer can lawfully close shop even if establishment,
not due to serious business losses or financial usually due to
reverses but separation pay, which is financial
equivalent to at least one month pay as losses
provided for by the Labor Code as amended, Resorted to To save Aims to
must be given to all the affected employees. primarily to production prevent further
avoid or costs financial drain
4. If the closure or cessation of operations of minimize upon the
establishment or undertaking is due to serious business Employer
business losses or financial reverses, the losses
employer must prove such allegation in order Employee is Employee is In case of
to avoid the payment of separation pay. entitled to entitled to closure of
Otherwise, the affected employees are separation separation business not
entitled to separation pay. pay of 1 pay of 1 due to serious
month pay or month pay business
5. The burden of proving compliance with all the 1/2 month or 1 month losses, the
above-stated falls upon the employer. (Manila pay per year pay per year employer pays
Polo Club Employees' Union v. Manila Polo of service, of service, the employees
Club, Inc., G.R. No. 172846, 2013) whichever is whichever is terminated
higher higher , separation
pay of 1 month
pay or 1/2
month pay per
year of
service,
whichever is
higher
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Computation of Separation Pay Floating Status

Computation of Separation Pay It is legal, such as in the case of security guards
Installation of labor- 1 month pay or 1 who have no assignment.
saving devices month pay for every
Redundancy year of service In security agency parlance, being placed "off
whichever is higher. duty" or on 'floating" status means "waiting to be
Retr rt to 1 month pay or at posted."
Pr. Y..g, sPps oas 1/2 month pay
fo ,dvery year Such a status should not exceed six months; if it
mfp of
cisArtex cessation enijce whictisym does, it amounts to a dismissal. (Agro
of operations of higher. Commercial Services v. NLRC, G.R. No. 82823-
0sLat4lis0 le.uts o 24, 1989)
'Uri e e in 0; u
64 s?, 'us!nes AILMENT OR DISEASE
I dsse, merit al Substantive Elements of Due Process for
Termination Due to Ailment or Disease
grO
1. An employee has been found to be suffering
Diseasp from any disease, whether contagious or
Closures or cessation No separation pay not;
of operations due to 2. His continued employment is prohibited by
serious business law or prejudicial to his health, or to the
losses or financial health of his co-employees;
reverses 3. A competent public health authority certifies
that the disease is of such nature or at such
Note: A fraction of at least 6 months is considered a stage that it cannot be cured within a
1 year period of six months even with proper
medical treatment; and
TEMPORARY CLOSURE / BONA FIDE 4. Payment of separation pay equivalent to at
SUSPENSION OF OPERATIONS (Labor Code, least one month salary or to one-half month
Art. 301) salary for every year of service, whichever is
A bona fide suspension of business operations greater, a fraction of at least six months
for not more than 6 months does not terminate being considered as one whole year.
employment.
Prior Certification From Competent Public
After 6 months, the employee may be recalled to Authority
work or be permanently laid off. (SKM Art Craft The burden falls upon the employer to establish
Corp v. Bauca, G.R. No. 171282, 183484, 2013) these requisites, and in the absence of such
certification, the dismissal must necessarily be
An employer may validly suspend operations for declared illegal.
at most 6 months. Not accepting the workers back
to work after the 6-month period is equivalent to It is only where there is a prior certification from a
termination, which should be for cause and with competent public authority that the disease
proper procedure. (Manila Mining Corp. v. Amor, afflicting the employee sought to be dismissed is
G.R. No. 182800, 2015) of such nature or at such stage that it cannot be
cured within 6 months even with proper medical
treatment that the latter could be validly
terminated from his job (Crayons Processing,
Inc., v. Pula, G.R. No. 167727, 2007)
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3. DUE PROCESS Degree of proof

In labor cases, substantial evidence is required
Subject to the constitutional right of workers to and it is such relevant evidence as a reasonable
security of tenure and their right to be protected mind might accept as adequate to support a
against dismissal except for a just and authorized conclusion. (Andrade v. Agemar Manning
cause and without prejudice to the requirement of Agency, G.R. No. 194758, 2012)
notice under Art. 283 of this Code,
Guiding Principles on Notice and Hearing in
The employer shall furnish the worker whose Termination/Dismissal cases
employment is sought to be terminated: Any decision taken by the employer shall be
1. A written notice containing a statement of without prejudice to the right of the worker to
the causes for termination, contest the validity or legality of his dismissal by
2. And shall afford the latter ample opportunity filing a complaint with the regional branch of the
to be heard and to defend himself with the NLRC.
assistance of his representative if he so
desires, in accordance with company rules The burden of proving that the termination was for
and regulations promulgated pursuant to a valid or authorized cause shall rest with the
guidelines set by the Department of Labor employer.
and Employment. (Labor Code, Art. 2921b])
The Secretary of the Department of Labor and
Note: Employee may have a counsel but it is not Employment may suspend the effects of the
indispensable. termination pending resolution of the dispute in
the event of a prima facie finding by the
Requisites for Valid Dismissal appropriate official of the DOLE before whom
1. Substantive Due Process: The dismissal such dispute is pending that the termination may
must be for cause; and cause a serious labor dispute or is in
2. Procedural Due Process: The employee implementation of a mass lay-off.
must be afforded an opportunity to be heard
and defend himself (Fujitsu Computer In cases of dismissal, employer has the burden of
Products v.CA, G.R. No. 158232, 2005) proof to show that the dismissal falls under the
just and authorized causes. (Tolentino v. PLDT,
Employer may not substitute the required prior G.R. No. 160404, 2005)
notice & opportunity to be heard with the mere
payment of 30 days' salary. (PNB v. Cabansag, a. TWIN-NOTICE REQUIREMENT
G.R. No. 157010, 2005)
The employer has the burden of proving that a
Right to counsel dismissed worker has been served two notices:
Guaranteed by the 1987 Constitution to any 1. First written notice: served on the
person under investigation, be the proceeding employee specifying the ground or grounds
administrative, civil, and criminal. (Salaw v. for termination, and giving said employee
NLRC, G.R. No. 90786, 1991) reasonable opportunity within which to
explain his side.
Burden of Proof 2. Second written notice: served upon the
In illegal dismissal cases, the onus of proving that employee, indicating that upon due
the employee was not dismissed or, if dismissed, consideration of all the circumstances,
that the dismissal was not illegal, rests on the grounds have been established to justify
employer, failure to discharge which would mean his termination.
that the dismissal is not justified and, therefore,
illegal. (Macasero v. Southern Industrial Gases
Philippines, G.R. No. 178524, 2009)
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b. HEARING; AMPLE OPPORTUNITY TO BE

First 1. Contain specific causes or HEARD
Notice grounds for termination as
provided under Art. 297 and After serving the first notice, the employer should
company policies, if any; schedule and conduct a hearing or conference
2. Contain a detailed narration of wherein the employee will be given the
the facts and circumstances that opportunity to:
will serve as basis for the charge 1. Explain and clarify his defenses to the
against the employee. (general charge/s against him;
description of the charge will not 2. Present evidence in support of his
suffice); and defenses; and
3. Contain a directive that the 3. Rebut the evidence presented against him
employee is given the by the management.
opportunity to submit his written
explanation within the Guiding principles in hearing requirement
reasonable period of FIVE (5) 3. "Ample opportunity to be heard" means
CALENDAR DAYS from receipt any meaningful opportunity (verbal or written)
of the notice: given to the employee to answer the charges
a. to enable him to prepare against him and submit evidence in support of
adequately for his defense; his defense, whether in a hearing, conference
or some other fair, just and reasonable way.
b. to study the accusation 5. A formal hearing or conference becomes
against him; mandatory only when requested by the
c. to consult a union official or employee in writing or substantial evidentiary
lawyer; disputes exist or a company rule or practice
requires it, or when similar circumstances
d. to gather data and
justify it.
evidence; and
6. The "ample opportunity to be heard"
e. to decide on the defenses standard in the Labor Code prevails over the
he will raise against the
"hearing or conference" requirement in the
complaint. (DO 147-15) implementing rules and regulations (Perez v.
Second After determining that termination of PT&T, G.R. No. 152048, 2009)
Notice employment is justified, the
employer shall serve the employees Use of position paper
a written notice of termination It is the labor arbiter who is authorized to
indicating that: determine whether or not there is a necessity for
1. all circumstances involving the conducting formal hearings in cases brought
charge/s against the employee before them for adjudication even after the
have been considered; and submission of the parties of their position papers
2. grounds have been established or memoranda. A formal trial-type hearing is not
to justify the severance of his at all times and in all instances essential to due
employment process. It is enough that the parties are given a
fair and reasonable opportunity to explain their
An employee may be dismissed only if the respective sides of the controversy and to present
grounds mentioned in the pre-dismissal notice supporting evidence on which a fair decision can
were the ones cited for the termination of be based. (Seastar Marine v. Bul-an, Jr., G.R. No.
employment. (Erector Advertising Sign Group, 142609, 2004)
Inc. v. Cloma, G.R. No. 167218, 2010)
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Decision/Award Consequences for Non-Compliance of

It is a requirement of due process that the parties Procedural Due Process
to a litigation be informed, of how it was decided, I. Just or Authorized Cause Exists + Due
with an explanation of the factual and legal Process
reasons that led to the conclusions of the court. (a) Valid Dismissal
(b) Employer is not liable; but pays
The court cannot simply say that judgment is separation pay only in authorized
rendered in favor of X and against Y and just causes.
leave it at that without any justification
whatsoever for its action. The losing party is 2. Just or Authorized Cause + No Due
entitled to know why he lost, so he may appeal to Process
a higher court, if permitted, should he believe that (a) Valid Dismissal
the decision should be reversed. (ABD Overseas (b) Employer is liable for damages due to
Manpower Corporation v. NLRC, G.R. No. procedural infirmities.
117056, 1998) (c) Employer pays separation pay if for
authorized causes.
Procedural Requirements in Termination
Cases (Just Cause and Authorized Cause) 3. No Just or Authorized Cause + Due
- AUTHORIZED Process
JUST CAUSES
CAUSES (a) Illegal Dismissal
First Notice Notice to the following: (b) Employer is liable to reinstate
specifying the employee or pay separation pay.
grounds for which Employee; and (c) If reinstatement is not possible, pay full
dismissal is sought backwages.
DOLE
Hearing or 4. No Just or Authorized Cause + No Due
opportunity to be At least 1 month prior Process
heard to effectivity of the (a) Illegal Dismissal
separation (b) Employer is liable to reinstate
Second Notice of the employee or pay separation pay.
decision to dismiss (c) If reinstatement is not possible, pay full
backwages.
Requisites for Notice in Authorized Causes
4. Notice is not needed when Employee
consented to the retrenchment or voluntarily
applied for one (Intl Hardware v. NLRC, G.R.
No. 80770, 1989)
7. Notice must be individual, and not collective
(Shoppers Gain Supermart v. NLRC, G.R.
No. 110731, 1996)
8. Voluntary Arbitration satisfies notice
requirement for authorized causes (Revidad
v. NLRC, G.R. No. 111105, 1995)
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D. TERMINATION BY EMPLOYEE part of management as an employee who intends

to resign may be allowed a shorter period before
Termination by employee may be split into his resignation becomes effective. (Hechanova
(Labor Code, Art. 300): Bugay Vilchez Lawyers v. Matorre, G.R. No.
198261 2013)
Termination without Just Cause
1. At least 1 month prior notice Stipulations providing that either party may
2. Acceptance by the employer is necessary terminate a contract even without cause are
3. Employee may be held liable for damages legitimate if exercised in good faith. Thus, while
for failure to give notice either party has the right to terminate the contract
at will, it cannot not act purposely to injure the
Termination with Just Cause other. The monetary award provided in Section
1. Grounds 10 of R.A. 8042 applies only to an illegally
a. Serious insult on the honor and person dismissed overseas contract worker or a worker
of employee by the employer or his dismissed from overseas employment without
representative just, valid or authorized cause as defined by law
b. Inhumane and unbearable treatment or contract. It finds no application to cases in
accorded to the employee which the OFW was not illegally dismissed.
c. Commission of a crime against person (GBMLT Manpower Services vs Malinao, G.R.
of the employee or any of the No. 189262, 2015)
immediate members of his family
d. Other causes analogous to the Constructive Dismissal
foregoing 1.No formal dismissal
2. Notice not necessary when resignation is 2.The employee is placed in a situation by the
with just cause. employer such that his continued
employment has become UNBEARABLE
1. RESIGNATION VERSUS CONSTRUCTIVE --> Forced resignation.
DISMISSAL
Constructive dismissal exists when an act of
Resignation clear discrimination, insensibility or disdain on the
Resignation is the voluntary act of an employee part of the employer has become so unbearable
who finds himself in a situation where he believes as to leave an employee with no choice but to
that personal reasons cannot be sacrificed in forego continued employment.
favor of the exigency of the service, such that he
has no other choice but to disassociate himself Constructive dismissal occurs when:
from his employment. (Cervantes v. PAL 1. Continued employment is rendered
Maritime Corp., G.R. No. 175209, 2013) impossible or unreasonable, resulting in an
involuntary resignation
To constitute a resignation, it must be 2. Demotion in rank or diminution in pay
unconditional and with the intent to operate as 3. Forced resignation to make it appear that
such. There must be an intention to relinquish a no termination by the employer was done
portion of the term of office accompanied by an (Leonardo v. NLRC, G.R. No. 125303,
act of relinquishment. (Azcor Manufacturing Inc. June 16, 2000)
v. NLRC, G.R. No. 117963, 1999)
Test of Constructive dismissal: whether or not
Resignation is inconsistent with the filing of a a reasonable person in the employee's position
complaint for illegal dismissal. (Blue Angel would feel the need to give up his position
Manpower and Security Services Inc. v Court of
Appeals, G.R. No. 1611962008) Note: Abandonment is incompatible with
constructive dismissal.
The rule requiring an employee to stay or
complete the 30-day period prior to the effectivity
of his resignation becomes discretionary on the
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It is the inherent prerogative of an employer to (Mandapat v. AddForce Personnel Services, Inc.,

transfer and reassign its employees to meet the G.R. No. 180285, 2010)
requirements of its business. Be that as it may,
the prerogative of the management to transfer its A threat to sue the employee will not amount to
employees must be exercised without grave forced resignation, as this is a legal act which
abuse of discretion. The exercise of the will be decided by a competent authority.
prerogative should not defeat an employee's right (Caliente v. NLRC, G.R. No. 105083, 1993)
to security of tenure. The employer's privilege to
transfer its employees to different workstations A choice between investigation and resignation is
cannot be used as a subterfuge to rid itself of an not illegal. (Belaunzaran v. NLRC, G.R. 120038,
undesirable worker. (Veterans Security Agency v. 1996)
Vargas, G.R. No. 159293, 2005)
An employee who tenders her voluntary
Instances of Constructive Dismissal resignation, accepts separation pay and benefits
5. There may be constructive dismissal if an cannot claim constructive dismissal. (Concrete
act of an employer becomes so unbearable Aggregates v. NLRC, G.R. No. 82458, 1989)
on the part of the employee that it could
foreclose any choice by him except to forego An employee may be considered constructively
his continued employment (Hyatt Taxi dismissed and at the same time legally
Services v. Catinoy, G.R. No. 143204, 2001) dismissed, as when a complaint for sexual abuse
9. Continued employment is rendered is proven in the NLRC. This will amount to a
impossible or unreasonable, resulting in an termination with just cause but without due
involuntary resignation; process (see the Agabon doctrine above).
10. Demotion in rank or diminution in pay; (Formantes v. Duncan Pharmaceuticals Inc.,
11. Forced resignation to make it appear that no G.R. No. 170661, 2009)
termination by the employer was done;
(Leonardo v. NLRC, G.R. No. 125303, 2000)
12. After the 30-day period of preventive
suspension, the employee must be
reinstated to his former position because
suspension beyond this maximum period
amounts to constructive dismissal (Hyatt
Taxi Services v. Catinoy, supra);
13. Floating status of a security guard if it lasts
for more than 6 months (Emeritus Security
and Maintenance Systems v. Dailig, G.R.
No. 204761, 2014)
Note: It is manifestly unfair and

unacceptable to declare the mere lapse of
the six-month period of floating status as a
case of constructive dismissal without
looking into the peculiar circumstances that
resulted in the security guard's failure to
assume another post (Exocet Security and
Allies Services Corp v. Serrano, G.R. no.
198538, 2014)
Jurisprudence: Resignation
Forced resignation must be substantiated by
more than mere threats and allegations.
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F. PREVENTIVE SUSPENSION These do not give the employee ample warning

that he may be terminated for his infractions, only
Preventive suspension is a disciplinary that he is being suspended for them. The notice
measure for the protection of the company's must sufficiently apprise the employee of the
property pending investigation of any alleged instances or for which he is to be terminated, and
malfeasance or misfeasance committed by the he must not have already been punished for
employee. The employer may place the worker these (ex. with suspension) (Erector v. NLRC,
concerned under preventive suspension if his G.R. No. 167218, 2010)
continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co- workers. However, when it
is determined that there is no sufficient basis to
justify an employee's preventive suspension, the
latter is entitled to the payment of salaries during
the time of preventive suspension. (Gatbonton V.
NLRC, G.R. No. 146779, 2009)
Duration of preventive suspension

No preventive suspension shall last longer than
thirty (30) days.
Upon the expiry of such period, the employer

shall thereafter
6. Reinstate the worker in his former or in a
substantially equivalent position or
14. The employer may extend the period of
suspension provided that during the period
of extension, he pays the wages and other
benefits due to the worker (IRR Labor Code,
Sec. 9, Rule XXIII, Book V)
Preventive Suspension as a Protective

Measure vs. Suspension as a Penalty
Preventive suspension is not a penalty in itself. It
is merely a measure of precaution so that the
employee who is charged may be separated, for
obvious reasons, from the scene of his alleged
misfeasance while the same is being
investigated.
While [preventive suspension] may be imposed

on a respondent during the investigation of the
charges against him, [suspension] is the penalty
which may only be meted upon him at the
termination of the investigation or the final
disposition of the case. (PAL v. NLRC, G.R. No.
114307, 1998)
Notice requirement not complied with by mere

issuance of suspension order
Suspension orders are not enough to meet the
notice requirement necessary in termination.
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E. RELIEFS FROM ILLEGAL DISMISSAL 7. Job with a totally different nature (DUP Sound
Phils. v. CA, G.R. No. 168317, 2011)
An employee who is unjustly dismissed from work 8. Long passage of time
shall be entitled to reinstatement without loss of 9. Inimical to the employer's interest
seniority rights and other privileges and to his full
10.Supervening facts have transpired which
backwages, inclusive of allowances, and to his
make execution unjust or inequitable, to an
other benefits or their monetary equivalent
increasing extent (Emeritus Security v. Dailig,
computed from the time his compensation was
G.R. No. 204761, 2014)
withheld from him up to the time of his actual
reinstatement. (Labor Code, Art. 294)
Prescriptive Period
Bring action for reinstatement within 4 years from
1.Backwages + Reinstatement without loss of
the time of dismissal. (Civil Code, Art. 1146)
seniority rights, OR
2.Backwages + Separation Pay, if
i. Reinstatement pending appeal
reinstatement impossible, or not ordered, in
view of the application of the strained
Note: The decision of the Labor Arbiter reinstating
relations doctrine.
a dismissed or separated employee shall
immediately be executory, even pending appeal.
NOTE: Where reinstatement is ordered, but the
The employee shall either be admitted back to
position is already filled up, the dismissed
work under the same terms and conditions
employee must still be reinstated if it is still
possible. prevailing prior to his dismissal or separation or,
at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer
REINSTATEMENT
shall not stay the execution for reinstatement
Reinstatement means the restoration to a state
or condition from which one had been removed or provided herein. (Labor Code, Art. 223)
separated. The person reinstated assumes the
Two options given to employers
position he had occupied prior to his dismissal. It
1. Actual Reinstatement
presupposes that the previous position from
Restoration of an illegally dismissed employee to
which one had been removed still exists, or that
the position s/he had occupied prior to the illegal
there is an unfilled position which is substantially
dismissal.
equivalent or of similar nature as the one
previously occupied by the employee. (Pfizer,
Inc., et al. v. Velasco, G.R. No. 177467, 2011) 2. Payroll Reinstatement
The employer, instead of physically reinstating
General Rule: Reinstatement and backwages the employee to his former or substantially
are awarded equivalent position, chooses to reinstate the
employee in the payroll only by paying him
Exceptions: wages and other benefits without however
1. Separation pay allowing or requiring him to actually report for
work.
2. Closure of business (Retuya v. Hon.
Dumarpa, G.R. No. 148848, 2003)
Obligation to Reinstate — Order of
3. Economic Business Conditions (Union of
Reinstatement
Supervisors v. Secretary ofLabor, G.R. No. L-
If the order of reinstatement of the Labor Arbiter
39889, 1981)
is reversed on appeal, it is obligatory on the part
4. Employee's unsuitability (Divine Word High of the employer to reinstate and pay the wages of
School v. NLRC, G.R. No 72207, 1986) the dismissed employee during the period of
5. Employee's retirement / overage (New Phil. appeal until reversal by the higher court. The
Skylanders v. Dekfla, G.R. No. 199547, 2012) Labor Arbiter's order of reinstatement is
6. Antipathy and antagonism (Wensha Spa immediately executory and the employer has to
Center v. Yung, G.R. No. 185122, 2010) either re-admit them to work under the same
terms and conditions prevailing prior to their
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dismissal, or to reinstate them in the payroll, and Retrenchment or Separation pay of 1

that failing to exercise the options in the closure or cessation month pay or 1/ 2
alternative, employer must pay the employee's of operations NOT month pay per year of
salaries. (Magana v. Medicard Philipppines, G.R. due to serious service, whichever is
No. 174833) business losses; higher
Disease
No obligation to refund salaries and wages Retrenchment or None
during pendency of the appeal closure or cessation
An employee cannot be compelled to reimburse of operations due to
the salaries and wages he received during the serious business
pendency of his appeal, notwithstanding the losses
reversal by the NLRC of the LA's order of Note: A fraction of at least 6 months is considered
reinstatement. (College of Immaculate 1 year
Conception v. NLRC, G.R. No. 167563, 2010)
Second Kind: Separation pay as financial
Note: Rule XI, Sec. 14 of the 2011 NLRC Rules assistance
of Procedure provide for restitution of amounts Separation pay may be awarded, in the name of
paid pursuant to execution of awards during compassionate justice, to an employee dismissed
pendency of the appeal. However, it expressly for a "just cause", except in the following:
disallows restitution of wages paid due to 1. Serious misconduct; or
reinstatement pending appeal. 2. Other offenses reflecting on his moral
character (PLDT v. NLRC, G.R. No. 80609,
SEPARATION PAY 1988)
Reinstatement and separation pay — exclusive
remedies However: In the Toyota case, the Supreme Court
Payment of separation pay and reinstatement are ruled that if the dismissal is based on any of the
exclusive remedies. The payment of separation just causes in Art. 297 of the Labor Code — No
pay replaces the legal consequences of financial assistance can be granted, except
reinstatement to an employee who was illegally perhaps under "analogous causes." (Toyota
dismissed. (Bank Rural Bank v. De Guzman, Motor Phil. Corp. Workers Ass'n. v. NLR,C, G.R.
G.R. No. 170940, 2013) No. 158786, 2007)
Kinds of separation pay But note: In the International School case, the
1. Statutory separation pay, in authorized Supreme Court granted "separation pay" of 1/2
causes (Labor Code, Arts. 288-299) month per year of service while upholding the
2. Separation pay as financial assistance (found teacher's dismissal on the ground of "gross
in the next section) inefficiency" resulting from the lack of skills,
3. Separation pay in lieu of reinstatement where thereby failing to meet the standards of the
reinstatement is not feasible; and employer of the school. (International School v.
4. Separation pay as a benefit in the CBA or International School Alliance, 2014)
company policy
No financial assistance to dismissed strikers.
First Kind: Statutory separation pay
The employer has a statutory obligation in cases Third Kind: Separation Pay in Lieu of
of legal termination due to authorized causes. Reinstatement
This happens only in cases where:
CAUSE SEPARATION PAY 1. Doctrine of Strained Relations applies, but
Introduction of labor- Separation pay of 1 only applicable to confidential and managerial
saving devices, month pay or 1 month employees only; or
redundancy pay per year of 2. When reinstatement would only exacerbate
service, whichever is the tension and strained relations between the
higher
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parties. (Quijano v. Mercury, G.R. No.

126561, 1998) Failure to order backwages
3. The position has been abolished (applies to A 'plain error" which may be rectified, even if
both managerial and rank and file) employee did not bring an appeal regarding the
matter (Aurora Land Projects v. NLRC, G.R. No.
Note: Moral and exemplary damages may also 114733, 1997)
be awarded.
Full backwages
Computation of separation pay Full backwages means exactly that, i.e., without
SP as a statutory requirement is computed by deducting from backwages the earnings derived
integrating the basic salary with regular elsewhere by the concerned employee during the
allowances employee has been receiving period of his illegal dismissal. (Bustamante v.
(Planters Products v. NLRC, G.R. No. 78524, NLRC, G.R. No. 111651, 1996)
1989); allowances include transportation and
emergency living allowances (Santos v. NLRC, Awards including salary differentials are not
G.R. No. 76721, 1987) allowed (Insular Life Assurance Co., v. NLRC,
G.R. No. L-74191, 1987)
Commissions included in separation pay;
exception to inclusion Emergency cost of living allowances (ECOLA),
Inasmuch as the words "wages", "pay" and transportation allowances, and 13th month pay
"salary" have the same meaning, and should be included. (Paramount Vinyl Product
commission is included in the definition of "wage", Corp. v. NLRC, G.R No. 81200, 1990)
the logical conclusion, therefore, is, in the
computation of the separation pay of petitioners, The effects of extraordinary inflation are not to be
their salary base should include also their earned applied without an official declaration by
sales commissions. (Songco v. NLRC, G.R. Nos. competent authorities (Lantion v. NLRC, G.R. No.
50999-51000, 1990) 82028, 1990)
Commissions given to a managerial employee Limited Backwages

who did not perform actual business transactions General Rule: Illegally dismissed employee is
to earn the commission shall not be included in entitled to full backwages
the salary for purposes of computing separation
pay. (Phil. Duplicators v. NLRC, G.R. No. 11068, Exceptions:
1995) 1. The Court awarded limited backwages
where the employee was illegally dismissed
BACKWAGES but the employer was found to be in good
Backwages are earnings lost by a worker due to faith. (San Miguel Corporation v. Javate, Jr,
his illegal dismissal; a form of relief that restores G.R. No. L-54244, 1992)
the income lost by reason of such unlawful 2. Delay of the employee in filing the case for
dismissal; it is not private compensation or illegal dismissal (Mercury Drug Co., v. CIR,
damages; nor is it a redress of a private right but, G.R. No. L-23357, 1974)
rather, in the nature of a command to the
employer to make a public reparation for illegally Deduction of earnings elsewhere rule
dismissing an employee. (St. Theresa's School of There is no deduction from backwages the
Novaliches Foundation v. NLRC, G.R. No. earnings which the employee has derived from
122955, 1998) another employment during the time of his illegal
dismissal (Bustamante v. NLRC, G.R. No.
Backwages and reinstatement are two reliefs that 111651, 1996)
should be given to an illegally dismissed
employee. They are separate and distinct from Note: The Bustamante doctrine must be read in
each other. (Aurora Land Projects v. NLRC, G.R. light of R.A. No. 6715 (21 March 1989). Prior to
No. 114733, 1997) that date, backwages are limited to three years
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without deduction or qualification (Azucena, The

Labor Code with Comments and Cases Volume Computation of backwages
II, 918, 2013) Backwages is computed from the time of illegal
dismissal up to time of actual reinstatement.
Components of the amount of backwages
(Azucena, The Labor Code with Comments and If reinstatement is no longer possible, backwages
Cases Volume II-B, 976, 2016) should be computed from the time the employee
1. Salaries at the wage rate level at the time of was terminated until the finality of the decision,
dismissal, not current wage level. finding the dismissal unlawful. (Bustamante v.
2. Allowances or other benefits regularly granted NLRC, G.R. No. 111651, 1996)
Example: ECOLA, 13' month pay, fringe
benefits, transportation allowances, holiday pay, Reliefs of local workers vs. migrant workers
SIL, VL, just share in service charges, and any Art. 279, LC Sec. 10, RA 8042
other regular allowances or benefits or their (LOCAL WORKERS) (MIGRANT
monetary equivalents WORKERS)
Reinstatement Full reimbursement of
Reinstatement; payment of backwages his placement fee with
An order of reinstatement by the labor arbiter is interest of 12% per
not the same as actual reinstatement of a annum
dismissed or separated employee. Thus, until ClAvor Saljrieg for the
employer actually reinstates, their obligation to .1k5: unexpired portion: of
the illegally dismissed employee, insofar as 0:lament
accrued backwages and other benefits are
concerned, continues to accumulate.
ag!-IgIfeitiMPt9:,
It is only when the illegally dismissed employee
receives the separation pay (in case of strained QUITCLAIMS
relations) that it could be claimed with certainty After a valid compromise has been entered into,
that the EER has formally ceased thereby a quitclaim usually follows. In this document, the
precluding the possibility of reinstatement. In the employee waives or releases the employer from
meantime, the illegally dismissed employee's any claims he may have against him by reason of
entitlement to backwages, 13" month pay, and his employment. These are normally frowned
other benefits subsists. Until the payment of upon because the employer and employee stand
separation pay is carried out, the employer on unequal footing. Hence, if the one signing the
should not be allowed to remain unpunished for quitclaim does not need protection, it is usually
the delay, if not outright refusal, to immediately held to be valid.
execute the reinstatement aspect of the labor
arbiter's decision. Requisites for a valid quitclaim (L-FEN)
1. Lack of fraud or deceit
Further, the employer cannot refuse to reinstate 2. Entered into Freely and voluntarily
the illegally dismissed employee by claiming that 3. Trade-off is Equitable and credible
the latter had already found a job elsewhere. 4. Not contrary to law, public order, public
Minimum wage earners are left with no choice policy, morals, good customs, nor prejudicial
after they are illegally dismissed from their to a third person with a right recognized by
employment, but to seek new employment in law (Goodrich Manufacturing Corp. v. Ativo,
order to earn a decent living. Surely, we could not G.R. No. 188002, 2010)
fault them for their perseverance in looking for
and eventually securing new employment
opportunities instead of remaining idle and
awaiting the outcome of the case. (Triad Security
& Allied Services, Inc, et al. v Ortega, G.R. No.
160871, 2006)
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Requisites for a valid quitclaim of an OFW EMPLOYER'S INDEMNITY

(FB-TESS)
1. Fixed amount as full and final Prior to 1989 (Pre-Wenphil)
compensation • Dismissal is Illegal
2. The Benefits of the OFW and • Employer's liability: Reinstatement plus
corresponding monetary amounts which he Backwages
is giving up for the compromised amount
3. A statement that the quitclaim and its February 1989— 1999 (Wenphil Doctrine)
nature and consequences have been • Dismissal is Valid
Explained to him in a language or dialect he • Employer's liability: Pay indemnity
understands
4. A statement that the quitclaim has been January 2000 — October 2004 (Serrano
signed knowingly and voluntarily and Doctrine)
consent was without Threat or other undue • Dismissal is Ineffectual
influence • Employer's liability: Full backwages up to
5. Signed by two (2) witnesses who can attest reinstatement / finality of decision
to the execution
6. Subscribed and sworn to
November 2004 — Present (Agabon Doctrine)
(EDI-Staffbuilders International, Inc. vs.
• Dismissal is valid
National Labor Relations Commission, 537
• Employer's liability: Nominal damages
SCRA 409, 2007)
Jaka Food v. Pacot, G.R. No. 151378, 2005
No Separation Pay in resignation; Exceptions;
If the dismissal is based on a just cause but the
Waivers and Quitclaims, when valid
employer failed to comply with the notice
General Rule: Separation pay need not be paid
requirement, the sanction to be imposed upon
to an employee who voluntarily resigns.
him should be tempered because the dismissal
process was, in effect, initiated by an act
However: An employer who agrees to expend
imputable to the employee.
such benefit as an incident of the resignation
should not be allowed to renege in the
If the dismissal is based on an authorized cause
performance of such commitment.
but the employer failed to comply with the notice
requirement, the sanction should be stiffer
Not all waivers and quitclaims are invalid as
because the dismissal was initiated by the
against public policy. If the agreement was
employer's exercise of management prerogative.
voluntarily entered into and represented a
reasonable settlement, it is binding on the parties
Industrial Timber v. Ababan, G.R. No. 164518,
and may not later be disowned, simply because
2006 (Distinction of Authorized Causes)
of a change of mind. (Candido Alfaro v. CA, et aL,
If the authorized cause that terminates
G.R. No. 140812, 2001)
employment arises from losses, the penalty to the
employer who disregarded due process may be
lighter than if the authorized cause has no relation
to losses.
HSBC Employees Union v. NLRC, G.R. No.

156635, 2016
A dismissal lacking in valid cause or valid
procedure is "illegal." In a dismissal based on just
or authorized cause, but effected without due
process, the employee remains dismissed, but
the employer must pay nominal damages.
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G. RETIREMENT employees. The reason for the second situation

is expressed in the Latin maxim pacta private furl
Retirement public derogare non possunt. Private contracts
The result of a bilateral act of the parties, a cannot derogate from the public law. (Oxales vs
voluntary agreement between the employer and Unilab, G.R. No. 152991, 2008)
the employee whereby the latter, after reaching a
certain age agrees to sever his or her Age of retirement
employment with the former. (Jaculbe v. Siliman Optional retirement: In the absence of a
University, G.R. No. 156934, 2007) retirement plan or other applicable agreement
providing for retirement benefits of employees in
Retroactive Effect of Retirement Laws an establishment, an employee may retire upon
4. The claimant for retirement benefits was still reaching the age of 60 or more if he has served
in the employ of the employer at the time the for at least 5 years in said establishment.
statute took effect; and
5. The claimant had complied with the Compulsory retirement: In the absence of a
requirements for eligibility for such retirement retirement plan or other applicable agreement
benefits under the statute (URC v. Caballeda, providing for retirement benefits of EEs in an
G.R. No. 156644, 2008) establishment, an EE shall be retired at the age
of 65 years. (IRR R.A. No. 7641, Sec. 4)
Eligibility
General Rule: All employees in the private May the optional and compulsory retirement
sector, regardless of their position, designation, ages be lowered?
or status, and irrespective of the method by which 1. Written policy — such as in the CBA
their wages are paid (IRR R.A. No. 7641, Sec. 1) (Pantranco North Express v. NLRC & U.
Suniga, G.R. No. 95940, 1996); or
Exceptions: 2. Assented to by the employees (Jaculbe v.
6. Employees covered by the Civil Service Law; Silliman University, G.R. No. 156934, 2007)
7. Domestic Helpers and Persons in the
Personal Service of Another; and Nature of employees' assent
8. Employees in Retail, Service, and Agricultural The employees' assent may be evidenced by
Establishments or Operations Regularly silence. (Obusan v. PNB, G.R. No. 181178, 2010)
Employing Not More Than 10 Employees
(IRR R.A. No. 7641, Sec. 2) However, in another case, the Supreme Court
ruled that acceptance by the employees of an
Exclusions from coverage early retirement age option must be explicit,
R.A. No. 7641, "The Retirement Pay Law," only voluntary, free, and uncompelled. (Cercado v.
applies in a situation where: Uniprom, Inc., G.R. No. 188154, 2010)
1. There is no collective bargaining agreement
or other applicable employment contract Note: Obusan was decided by the Supreme
providing for retirement benefits for an Court in division on July 26, 2010, while Cercado
employee; or was decided also in division on October 13,2010.
2. There is a collective bargaining agreement or „.
other applicable employment contract Extension of Service of Retiree
providing for retirement benefits for an The matter of extension of service of such
employee, but it is below the requirements employee or official is addressed to the sound
set for by law. discretion of the employer. (UST Faculty Union v.
NLRC, G.R. No. 89885, 1990)
The reason for the first situation is to prevent the
absurd situation where an employee, who is Retirement Age for Underground and Surface
otherwise deserving, is denied retirement Mine Workers
benefits by the nefarious scheme of employers in For underground and surface mine workers, the
not providing for retirement benefits for their optional retirement age is 50, while the
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mandatory retirement age is now 60. (R.A. No. Retirement pay under RA 7641 vis-à-vis
10757, Sec. 2) retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
Amount of Retirement Pay benefits. All private sector employees regardless
The minimum retirement pay shall be equivalent of their position, designation or status and
to one-half (1/2) month salary for every year of irrespective of the method by which their wages
service, a fraction of at least six (6) months being are paid are entitled to retirement benefits upon
considered as one whole year. compulsory retirement at the age of sixty-five (65)
or upon optional retirement at sixty (60) or more
For the purpose of computing retirement pay, but not 65. The minimum retirement pay due
"one-half month salary" shall include all of the covered employees shall be equivalent to one-
following: half month salary for every year of service, a
3. Fifteen (15) days salary based on the latest fraction of at least six (6) months being
salary rate; considered as one whole year. The benefits
4. Cash equivalent of five (5) days of service under this law are other than those granted by
incentive leave; the SSS or the GSIS.
5. One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52 days) Retirement Benefits under a CBA or
Applicable Contract
Total: 22.5 days Any employee may retire or be retired by his/her
employer upon reaching the age established in
Thus, "one-half month salary" is equivalent to the CBA or other applicable agreement/contract
22.5 days. (Capitol Wireless, Inc. vs Sec. and shall receive the retirement benefits granted
Confessor, G.R. No. 117174, 1996; Rogelio therein; provided, however, that such retirement
Reyes v. NLRC, G.R. No. 160233, 2007) benefits shall not be less than the retirement pay
required under R.A. No. 7641, and provided
Other benefits may be included in the further that if such retirement benefits under the
computation of the retirement pay upon agreement are less, the employer shall pay the
agreement of the ER and the EE or if provided in difference.
the CBA.
Where both the employer and the employee
contribute to a retirement fund pursuant to the
applicable agreement, the employer's total
contributions and the accrued interest thereof
should not be less than the total retirement
benefits to which the employee would have been
entitled had there been no such retirement
benefits' fund. If such total portion from the
employer is less, the employer shall pay the
deficiency.
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Retirement Benefits of Workers Who Are Paid Additional conditions

By Results 1. The benefit plan must be approved by the
For covered workers who are paid by result and Bureau of Internal Revenue;
do not have a fixed monthly salary rate, the basis 2. The retiring official or employee has been in
for the determination of the salary for 15 days the service of the same employer for at least
shall be their average daily salary (ADS). The ten (10) years and is not less than fifty years
ADS is derived by dividing the total salary or of age at the time of his retirement;
earning for the last 12 months reckoned from the 3. The retirement benefits shall be availed of by
date of retirement by the number of actual an official or employee only once; and,
working days in that particular period, provided 4. In case of separation of an official or
that the determination of rates of payment by employee from the service of the employer
results are in accordance with established due to death, sickness or other physical
regulations. (Rules Implementing R.A. No. 7641, disability or for any cause beyond the control
Sec. 5.3) of the said official or employee, any amount
received by him or by his heirs from the
Retirement Benefit of Part-Time Workers employer as a consequence of such
Part-time workers are also entitled to retirement separation shall likewise be exempt as
pay of "one-month salary" for every year of hereinabove provided.
service under RA 7641 after satisfying the
following conditions precedent for optional Reasonable private benefit plan
retirement: A pension, gratuity, stock bonus or profit sharing
1. There is no retirement plan between the plan maintained by an employer for the benefit of
employer and the employee; and some or all of his officials and employees,
2. The employee should have reached the age wherein contributions are made by such
of 60 years, and should have rendered at least employer or officials and employees, or both, for
5 years of service with the employer. the purpose of distributing to such officials and
employees the earnings and principal of the fund
The components of retirement benefit of part- thus accumulated, and wherein it is provided in
time workers may likewise be computed at least said plan that at no time shall any part of the
in proportion to the salary and related benefits corpus or income of the fund be used for, or be
due them. (DOLE Handbook on Workers' diverted to, any purpose other than for the
Statutory Monetary Benefits, 2014 ed.) exclusive benefit of the said officials and
employees.
Taxability
General Rule: Any provision of law to the Retirement Benefits and Separation Pay May
contrary notwithstanding, the retirement benefits be Simultaneously Granted; When Not
received by officials and employees of private Granted
firms, whether individual or corporate, in Yes. (University of the East v. UE Faculty
accordance with a reasonable private benefit plan Association, G.R. No. 74007, 1987)
maintained by the employer shall be exempt from
all taxes and shall not be liable to attachment, Separation pay is required in the cases
garnishment, levy or seizure by or under any legal enumerated in Articles [298] and [299] of the
or equitable process whatsoever (Intercontinental Labor Code. It is a statutory right designed to
Broadcasting Corp. (IBC) v. Amorilla, G.R. No. provide the employee with the wherewithal during
162775, 2006) the period that he is looking for another
employment.
Exception: Except to pay a debt of the official or
employee concerned to the private benefit plan or Retirement benefits, where not mandated by
that arising from liability imposed in a criminal law, may be granted by agreement of the
action. employees and their employer or as a voluntary
act on the part of the employer. Retirement
benefits are intended to help the employee enjoy
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the remaining years of his life, lessening the

burden of worrying for his financial support, and VII. MANAGEMENT PREROGATIVE
are a form of reward for his loyalty and service to
the employer. (Aquino v. NLRC & Otis Elevator, TOPIC OUTLINE UNDER THE SYLLABUS
G.R. No. 87653, 1992)
A. Discipline
However: Company policy or CBA may make B. Transfer of employees
separation pay and retirement benefits mutually C. Productivity standard
exclusive. (Aquino v. NLRC & Otis Elevator, G.R. D. Bonus
E. Change of working hours
No. 87653, 1992)
F. Bona Fide Occupational Qualifications
G. Post-employment ban
Gratuity Pay distinguished from Retirement
Benefit
Gratuity Pay is paid to the beneficiary for the past
services or favor rendered purely out of the
generosity of the giver or grantor. Gratuity,
therefore, is not intended to pay a worker for
actual services rendered or for actual
performance. It is a money benefit or bounty
given to the worker, the purpose of which is to
reward employees who have rendered
satisfactory service to the company.
Retirement Benefits are intended to help the

employee enjoy the remaining years of his life,
releasing him from the burden of worrying for his
financial support, and are a form of reward for his
loyalty to the employer. (Sta. Catalina College v.
NLRC and Tercero, G.R. No. 144483, 2003)
end of topic
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Labor Secretary had assumed jurisdiction over

Overview of Management Prerogative the dispute and enjoined the parties from "any
The law in protecting the rights of the employees acts which might exacerbate the situation."
authorizes neither oppression nor self-destruction
of the employer. It should be made clear that The Court disagreed with the company's defense,
when the law tilts the scale of justice in favor of stating that the privilege is not absolute but
labor, it is but a recognition of the inherent subject to limitations imposed by law. In this case,
economic inequality between labor and it is limited by Sec. 236(g), which gives the
management. Never should the scale be so tilted Secretary the power to assume jurisdiction and
if the result is an injustice to the employer. resolve labor disputes involving industries
(Panuncillo v. CAP, G.R. No. 161305, 2007) indispensable to national interest.
General Rule: An employer is free to regulate, The company's management prerogatives are
according to his own discretion and judgment, all not being unjustly curtailed but duly tempered by
aspects of employment, including hiring, work the limitations set by law, taking into account its
assignments, working methods, time, place and special character and the particular
manner of work, tools to be used, processes to be circumstances in the case at bench. (Metrolab
followed, supervision of workers, working Industries, Inc. v. Roldan-Confesor, G.R. No.
regulations, transfer of employees, work 108855, 2013)
supervision, lay-off of workers and the discipline,
dismissal and recall of workers (Peckson V. 4. Collective Bargaining
Robinson's Supermarket Corporation, G.R. No. The CBA provisions agreed upon by the
198534, 2013) Company and the Union delimit the free exercise
of management prerogative. The parties in a CBA
Limits to Management Prerogative - may establish such stipulations, clauses, terms
1. Good Faith and conditions as they may deem convenient
So long as a company's management provided these are not contrary to law, morals,
prerogatives are exercised in good faith for the good customs, public order or public policy.
advancement of the employer's interest and not Where the CBA is clear and unambiguous, it
for the purpose of defeating or circumventing the becomes the law between the parties and
rights of the employees under special laws or compliance therewith is mandated by the express
under valid agreements, this Court will uphold policy of the law. (Goya v. Goya Employees
them. Even as the law is solicitous of the welfare Union-FFW, G.R. No. 170054, 2013)
of the employees, it must also protect the right of
an employer to exercise what are clearly 5. Equity and/or Substantial Justice
management prerogatives. The free will of The Court recognized the inherent right of the
management to conduct its own business affairs employer to discipline its employees but it should
to achieve its purpose cannot be denied. still ensure that the employer exercises the
(Ymbong v ABS-CBN, G.R. No. 184885, 2012) prerogative to discipline humanely and
considerately, and that the sanction imposed is
2. Grave abuse of discretion commensurate to the offense involved and to the
The managerial prerogative to transfer personnel degree of the infraction. The discipline exacted by
must be exercised without grave abuse of the employer should further consider the
discretion, bearing in mind the basic elements of employee's length of service and the number of
justice and fair play. Having the right should not infractions during his employment. (Dongon v.
be confused with the manner in which the right is Rapid Movers and Forwarders Co., G.R. No.
exercised. (Tinio v. CA, G.R. No. 171764, 2007) 163431, 2013)
3. Law The exercise of management prerogatives is not

A pharmaceutical company defended its unlimited. A line must be drawn between
termination of rank and file employees during a management prerogatives regarding business
bargaining deadlock, as an exercise of operations per se and those which affect the
management prerogative. This was after the
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rights of employees. In treating the latter, diminution of salaries, benefits, and other '
management should see to it that its employees privileges, the employee may not complain that it
are at least properly informed of its decisions and amounts to a constructive dismissal. (Bisig ng
modes of action. (PAL v. NLRC, G.R. No. 85985, Manggagawa sa TRYCO v. NLRC, G.R. No.
1993) 151309, 2008)
The law on unfair labor practices is not intended
to deprive the employer of his fundamental right It is management prerogative for employers to
to prescribe and enforce such rules as long as it transfer employees on just and valid grounds
is not exercised in violation of the Act and its such as genuine business necessity. (William
several prohibitions. Barroga v. Data Center College of the
Philippines, G.R. No. 174158, 2011)
Where, however, an employer does violate the
Act and is found guilty of the commission of an Re-assignments made by management pending
unfair labor practice, it is no excuse that his investigation of irregularities allegedly committed
conduct was unintentional and innocent. by an employee fall within the ambit of
management prerogative. The purpose of
A. DISCIPLINE reassignments is no different from that of
preventive suspension which management could
Management has the prerogative to discipline its validly impose as a disciplinary measure for the
employees and to impose appropriate penalties protection of the company's property pending
on erring workers, pursuant to company rules and investigation of any alleged malfeasance or
regulations (Artificio v. NLRC, G.R. No. 172988, misfeasance committed by the employee. (Ruiz
2010) v. v. Wendel Osaka Realty, G.R. No. 189082,
2012)
Although the right of employers to shape their
own work force, is recognized, this management In cases of a transfer of an employee, the
prerogative must not curtail the basic right of employer is charged with the burden of proving
employees to security of tenure. (Alert Security that its conduct and action are for valid and
Investigation Agency v. Saidafi Pasawilan, G.R. legitimate grounds such as genuine business
No. 182397 (2011) necessity and that the transfer is not
unreasonable, inconvenient or prejudicial to the
B. TRANSFER OF EMPLOYEE
employee. If the employer cannot overcome this
An employee's right to security of tenure does not burden of proof, the employee's transfer shall be
give him such a vested right in his position as tantamount to unlawful constructive dismissal.
would deprive the company of its prerogative to (Jonathan Morales v. Harbor Centre Port
Terminal, G.R. No. 174208, 2012)
change his assignment or transfer him where he
will be most useful.
C. PRODUCTIVITY STANDARD
The employer has the right to transfer or assign The employer has the right to demote and
employees from one area of operation to another, transfer an employee who has failed to observe
or one office to another or in pursuit of its proper diligence in his work and incurred habitual
legitimate business interest, Provided there is no tardiness and absences and indolence in his
demotion in rank or diminution of salary, benefits assigned work. (Petrophil Corporation v. NLRC,
and other privileges and not motivated by G.R. No. L-64048, 1986)
discrimination or made in bad faith, or effected as As a general concept, "poor performance" is
a form of punishment or demotion without equivalent to inefficiency and incompetence in
sufficient cause. (Westin Phil. Plaza Hotel v. the performance of official duties. Under Art. 282
NLRC, G.R. No. 121621, 1999) of the Labor Code, an unsatisfactory rating can
be a just cause for dismissal only if it amounts to
When the transfer is not unreasonable, or gross and habitual neglect of duties. Thus, the
inconvenient, or prejudicial to the employee, and fact that an employee's performance is found to
it does not involve a demotion in rank or be poor or unsatisfactory does not necessarily
PAGE 216 OF 244
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mean that the employee is grossly and habitually such exercise. (Sime Darby Pilipinas, Inc. v.
negligent of his duties. Gross negligence implies NLRC, G.R. No. 119205, 1998)
a want or absence of or failure to exercise slight
care of diligence, or the entire absence of care. It Except as limited by special laws, an employer is
evinces a thoughtless disregard of consequences free to regulate, according to his own discretion
without exerting any effort to avoid them. and judgment, all aspects of employment,
(Universal Staffing Services, Inc. vs. NLRC, G.R. including hiring, work assignments, working
No. 177576, 2008) methods, time, place and manner of work, tools
to be used, processes to be followed, supervision
The imposition of productivity standards is an of workers, working regulations, transfer of
allowable exercise of company rights. An employees, work supervision, lay-off of workers
employer is entitled to impose productivity and discipline, dismissal and recall of workers.
standards for its workers and non-compliance (San Miguel Brewery v. Ople, G.R. No. L-53515,
may be visited with a penalty even more severe 1989)
than demotion. (Leonardo v. NLRC, G.R. No.
125303, 2000) F. Bona Fide Occupational Qualifications
D. BONUS Employment in particular jobs may not be

limited to persons of a particular sex, religion,
The granting of bonus is a management or national origin UNLESS, the employer can
prerogative, something given in addition to what show that sex, religion, or natibnal origin is
is ordinarily received by or strictly due the an actual qualification for performing the job.
recipient. (Producers Bank of the Philippines v. The qualification is called a bona fide
NLRC, G.R. No. 100701, 2001) occupational qualification (BFOQ).
There is unfair and unjust discrimination in the BFOQ is valid "provided it reflects an
granting of, salary adjustments where the inherent quality reasonably necessary for
evidence shows that satisfactory job performance."
1. The management paid the employees of
the unionized branch; Weight standards of PAL show its effort to
2. here salary adjustments were granted to
comply with the exacting obligations imposed
employees of one of its non - unionized
upon it by law by virtue of being a common
branches although it was losing in its
carrier. On board an aircraft, the body weight
operations; and
and size of a cabin attendant are important
3. The total salary adjustments given every factors to consider in case of emergency.
ten of its unionized employees would not
The job of a cabin attendant during
even equal to the salary adjustments given
emergencies is to speedily get the
to one employee in the non — unionized
passengers out of the aircraft safely. Being
branch. (Manila Hotel Company v. Pines
overweight necessarily impedes mobility.
Hotel Employees Association(CUGC0)
Indeed, in an emergency situation, seconds
and C1R, G.R. No. L-30818, 1972)
are what cabin attendants are dealing with,
not minutes. Hence, separation from service
E. CHANGE OF WORKING HOURS
for failure to meet weight standards of PAL is
Management retains the prerogative, whenever justified. (Yrasuegi v. PAL, G.R. No. 168081)
exigencies of the service so require, to change
It is unlawful for an employer to require as a
the working hours of its employees. So long as
condition of employment or continuation of
such prerogative is exercised in good faith for the
employment that:
advancement of the employer's interest and not
1. A woman employee shall not get married,
for the purpose of defeating or circumventing the
or
rights of the employees under special laws or
2. To stipulate expressly or tacitly that upon
under valid agreements, this Court will uphold
getting married a woman employee shall be
deemed resigned or separated; or
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3. To actually dismiss, discharge, companies upon its employees was held

discriminate or otherwise prejudice a reasonable under the circumstances because
woman employee merely by reason of her relationships of that nature might compromise the
marriage. (Labor Code, Art. 136) interests of the company.
Relevant Jurisprudence In laying down the assailed company policy, the

employer only aims to protect its interests against
Philippine Telegraph and Telephone the possibility that a competitor company will gain
Company v. NLRC (G.R. No. 118978, 1997) access to its secrets and procedures.
The company policy of not accepting or
considering as disqualified from work any woman G. POST-EMPLOYMENT BAN
worker who contracts marriage runs afoul of the
test of, and the right against, discrimination A post-retirement competitive employment
afforded all women workers by our labor laws and restriction is designed to protect the employer
by no less than the Constitution. against competition by former employees who
may retire and obtain retirement or pension
Star Paper Corp. v. Simbol, Comia and benefits and, at the same time, engage in
Estrella (G.R. No. 164774, 2006) competitive employment. (Rivera v. Solidbank,
The following policies were struck down as invalid G.R. No. 163269, 2006)
for violating the standard of reasonableness
which is being followed in our jurisdiction, called Petitioner retired under the Special Retirement
the "Reasonable Business Necessity Rule": Program and received P963,619.28 from
respondent. However, petitioner is not
1. New applicants will not be allowed to be
proscribed, by waiver or estoppel, from assailing
hired if in case he/she has (a) relative, up
the post-retirement competitive employment ban
to (the) 3rd degree of relationship, already
since under Article 1409 of the New Civil Code,
employed by the company.
those contracts ,whose cause, object or purpose
2. In case of two of our employees (both
is contrary to law, morals, good customs, public
singles (sic), one male and another female)
order or public policy are inexistent or void from
developed a friendly relationship during the
the beginning. Estoppel cannot give validity to an
course of their employment and then
act that is prohibited by law or to one that is
decided to get married, one of them should
against public policy. (Rivera v. Solidbank, G.R.
resign to preserve the policy stated above."
No. 163269, 2006)
Duncan Ass'n of Detailman-PTGWO V. Glaxo Respondent, as employer, is burdened to

Welcome Philippines (G.R. No. 162994, 2004) establish that a restrictive covenant barring an
In this case, the prohibition against marriage
employee from accepting a competitive
embodied in the following stipulation in the employment after retirement or resignation is not
employment contract was held valid: unreasonable or oppressive, or not an undue or
You agree to disclose to management any unreasonable restraint of trade, thus,
existing or future relationship you may have, unenforceable for being repugnant to public
either by consanguinity or affinity with co- policy. (Rivera v. Solidbank, G.R. No. 163269,
employees or employees of competing drug 2006)
companies. Should it pose a possible conflict of
interest in management discretion, you agree to Two principal grounds on which the doctrine
resign voluntarily from the Company as a matter is founded that a contract in restraint of trade
of Company policy." is void as against public policy.
1. The injury to the public by being deprived
SC ruled that the dismissal based on this of the restricted party's industry; and
stipulation in the employment contract is a valid 2. The injury to the party himself by being
exercise of management prerogative. precluded from pursuing his occupation,
and thus being prevented from supporting
The prohibition against personal or marital himself and his family.
relationships with employees of competitor
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In cases where an employee assails a contract

containing a provision prohibiting him or her from VIII. JURISDICTION AND RELIEFS
accepting competitive employment as against
public policy, the employer has to adduce TOPIC OUTLINE UNDER THE SYLLABUS
evidence to prove that the restriction is
reasonable and not greater than necessary to A. LABOR ARBITER
protect the employer's legitimate business
interests. The restraint may not be unduly harsh B. NATIONAL LABOR RELATIONS
or oppressive in curtailing the employee's COMMISSION
legitimate efforts to earn a livelihood and must be
reasonable in light of sound public policy. C. JUDICIAL REVIEW OF LABOR RULINGS
In determining whether the contract is D. BUREAU OF LABOR RELATIONS

reasonable or not, the trial court should
consider the following factors: E. NATIONAL CONCILIATION AND MEDIATION
1. Whether the covenant protects a legitimate BOARD
business interest of the employer;
2. Whether the covenant creates an undue F. DOLE REGIONAL DIRECTORS
burden on the employee;
3. Whether the covenant is injurious to the G. DOLE SECRETARY
public welfare;
4. Whether the time and territorial limitations H. GRIEVANCE MACHINERY
contained in the covenant are reasonable;
I. VOLUNTARY ARBITRATION
and
5. Whether the restraint is reasonable from
J. PRESCRIPTION OF ACTIONS
the standpoint of public policy. (Rivera v. 1. Money Claims
Solidbank Corporation, G.R. No. 163269, 2. Illegal Dismissal
2006) 3. Unfair Labor Practice
4. Offenses under the Labor Code
end of topic 5. Illegal Recruitment
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A. LABOR ARBITER Termination of Corporate Officers

The LA has jurisdiction over the termination of
1. Jurisdiction corporate employees.
In order that the causes of action under Art.
224(a) may prosper (and inferentially, in order The RTC acting as a Special Commercial Court
that a LA can exercise jurisdiction over cases has jurisdiction over termination of corporate
thereon), an indispensable precondition must be officers.
met — the prior existence of an EER between the
parties. (Patornado v. NLRC, (G.R. No. 96520, A person is a corporate officer if:
1996) • The creation of the position is under the
corporation's charter or by-laws; and
(1) ULP (PRIORITY, RESOLVED WITHIN 30
• The election of the officer is by the directors
CALENDAR DAYS FROM SUBMISSION FOR
or stockholders.
DECISION)
The better policy in determining which body has
The LA has jurisdiction over the civil aspect of
jurisdiction over a case would be to consider not
ULP. The criminal aspect is lodged with the
only the status or relationship of the parties but
regular courts. (Labor Code, Art. 258)
also the nature of the question that is the subject
of their controversy. (Matting v. Coros, G.R. No.
Violations of the CBA are not ULP unless the
157802, 2010)
same are gross violations. (Labor Code, Art. 274)
However: In Prudential Bank v. Reyes (G.R. No.
The test of whether an employer has interfered
141093, 2001), it was held that an employee who
with and coerced employees within the meaning
rose from the ranks is a regular employee and not
of Art. 259 (a) is whether the employer has
a mere corporate officer.
engaged in conduct which it may reasonably be
said tends to interfere with the free exercise of an
Award of Nominal Damages
employee's rights, and it is not necessary that
An employer who terminates an employee for a
there be direct evidence that any employee was
valid cause but does so through invalid procedure
in fact intimidated or coerced by statements of
is liable to pay the latter nominal damages. (J. PB:
threats of the employer if there is a reasonable
Abbott Laboratories v. Alcaraz, 2013)
inference that anti-union conduct of the employer
does not have an adverse effect on self-
(3) CLAIMS FOR WAGES, RATES OF PAY,
organization and collective bargaining. HOURS OF WORK AND OTHER TERMS AND
(Francisco Labor Laws, 1956, Vol. IIp 323)
CONDITIONS OF EMPLOYMENT — IF
ACCOMPANIED WITH A CLAIM FOR
(2) TERMINATION DISPUTES
REINSTATEMENT
Resolving Questions of Jurisdiction Between
The LA has jurisdiction to award not only the
Labor Arbiter and Voluntary Arbitrator
reliefs provided by labor laws, but also damages
General Rule: Complaints for illegal dismissal
governed by the Civil Code. The employee need
are within the original and exclusive jurisdiction of
only include his claim for damages in the illegal
the LA.
dismissal suit filed with the LA. (Kawachi v. Del
Quero, G.R. No. 163738, 2007)
Exception: The parties may submit the question
of termination to voluntary arbitration but this
(4) CLAIMS FOR ACTUAL, MORAL,
must be expressed in unequivocal language in
EXEMPLARY AND OTHER FORMS OF
their CBA. (Ace Navigation Co. v. Fernandez,
DAMAGES ARISING FROM EER
G.R. No. 197309, 2012)
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(5) CASES ARISING FROM PROHIBITED 3. Written acknowledgement of

ACTIVITIES DURING STRIKES, INCLUDING indebtedness. (IBC v. Panganiban, G.R.
QUESTIONS INVOLVING THE LEGALITY OF No. 151407, 2007)
STRIKES AND LOCKOUTS
A judgment in the form of a wage order for money
LA vs. DOLE Secretary/NLRC Jurisdiction claims which has become final and executory
General Rule: LA has jurisdiction (NCMB Primer prescribes in 10 years, pursuant to Art. 1144 of
on Strike, Picketing, and Lockout, No. 22) the Civil Code on prescription of judgments. (JK
Mercado & Sons v. Sto Tomas, G.R. No. 158084,
Exception: In labor disputes involving industries 2008)
indispensable to the national interest, the DOLE
Secretary or NLRC (if certified by the Secretary) DOLE certification that all mandatory wage
has jurisdiction. increases and other monetary benefits were all
complied with by the employer is not sufficient
Industries Indispensable to the National proof to conclude payment of the monetary
Interest claims of the employee, especially if the
a. Hospital sector; certification was issued based only on documents
b. Electric power industry; submitted by the employer. (Dansart Security v.
c. Water supply services, to exclude small Bagoy, G.R. No. 168495, 2010)
water supply services such as bottling
and refilling stations; (7) WAGE DISTORTION CASES IN
d. Air traffic control; and UNORGANIZED ESTABLISHMENTS
e. Such other industries as may be
recommended by the National Tripartite Note: In Organized Establishments: The
Industrial Peace Council. Voluntary Arbitrator (VA) has jurisdiction
(6) ALL OTHER CLAIMS ARISING FROM EER (8) ALL MONETARY CLAIMS OF OFWS
INVOLVING AN AMOUNT EXCEEDING P,5000 ARISING FROM EER OR BY VIRTUE OF ANY
REGARDLESS OF WHETHER ACCOMPANIED LAW OR CONTRACT INVOLVING FILIPINO
BY A CLAIM FOR REINSTATEMENT EXCEPT WORKERS FOR OVERSEAS DEPLOYMENT,
CLAIMS FOR ECC, SSS, MEDICARE, & INCLUDING CLAIMS FOR ACTUAL, MORAL,
MATERNITY BENEFITS EXEMPLARY AND OTHER FORMS OF
DAMAGES (RA 8042)
Monetary claims arising from EER which do not
exceed Php5,000 fall within the jurisdiction of the For the LA to have jurisdiction over money claims
DOLE Regional Director. (LC, Art. 129) of OFWs, a EER is not necessary, as the article
also refers to "law" or "contract." (see Santiago v.
NOTE: A kasambahay's claim, regardless of the C.F. Sharp, G.R. No. 162419, 2007)
amount, falls within the jurisdiction of the DOLE
Regional Office, and not the NLRC. (Batas In order for the LA to assume jurisdiction over the
Kasambahay, Sec. 37) money claim, the OFC must have a certification
from the POEA (PNB v. Cabansag, G.R. No.
Art. 306 provides that "all money claims arising 157010, 2005)
from EER shall be filed within 3 years from the
time the cause of action accrued, before the labor
arbiter.
But this prescriptive period is subject to

interruption through:
1. Filing of an .action;
2. Written extrajudicial demand;
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(9) ENFORCEMENT OF COMPROMISE "Exclusive and Original" Jurisdiction subject

AGREEMENTS WHEN THERE IS NON- to Articles 274 and 275
COMPLIANCE BY ANY OF THE PARTIES A case under Art 224 may be lodged with the VA.
PURSUANT TO ART. 233 OF THE CODE (SEC. The policy of the law is to give primacy to
1, RULE V. 2005 NLRC RULES) voluntary modes of settling dispute.
Cooperatives For the VA to have jurisdiction over a subject

Termination of members of cooperatives is not matter under the LA's jurisdiction (such as
cognizable by the LA (members are not termination disputes), the parties must express
employees) this in unequivocal language in their CBA. (see
Ace Navigation Co. v. Fernandez, G.R. No.
LA has jurisdiction 'over illegal dismissal cases 197309, 2012)
involving employees of cooperatives
a) LABOR ARBITER VERSUS REGIONAL
LA does NOT have jurisdiction over DIRECTOR
1. Intra-corporate disputes
2. Cases involving corporate officers Jurisdiction over Money Claims
(because they are not employees); A money claim arising from employer-employee
3. Cases involving GOCCs with original relations, except SSS, ECC/Medicare claims, is
charters; within the jurisdiction of:
4. Cases involving entities immune from • REGIONAL
suit (except when the entity performs LABOR ARBITER
- - DIRECTOR
proprietary functions); Claim, regardless of Money claim is not
5. Local water districts (since they are amount, is accompanied by
quasi-public corporations); accompanied with a reinstatement AND
6. Actions based on tort; claim of
7. Claim of a seaman for damages is under reinstatement; or Claim does not
torts (regular court has jurisdiction). exceed P5,000 (Labor
(Tolosa v. NLRC, G.R. No. 149578, Claim exceeds Code, Art. 129)
P5,000, whether or
2003)
not there is a claim for
reinstatement.
Money Claims: LA vs. VA's Jurisdiction
1. Money claims arose from EER; and
Jurisdiction over Contested Cases Forwarded
2. Money claims arose from law or contracts other
from Regional Director to Labor Arbiter
than a CBA
1. The employer contests the findings of the
labor regulations officer and raises issues
NOTE: EER is a jurisdictional requisite, absent of thereon;
which, the NLRC has no jurisdiction to hear and 2. In order to resolve such issues, there is a
decide the case. (Hawaiian-Philippine Company need to examine evidentiary matters; and
v. Gulmatico, G.R. No. 106231, 1994) 3. Such matters are not verifiable in the
normal course of inspection.
MONEY CLAIMS
MONEY CLAIMS ARISE FROM EER If all requisites are present, the labor standard
NOT ARISING BUT BY VIRTUE OF case falls under the exception clause under Art.
FROM EER - IMPLEMENTATION 128(b), and the RD will need to endorse the case
- OF CBA to the appropriate LA (Ex-Bataaris Veterans
Regular Courts have Voluntary Arbitrator Security Agency v. Secretary, G.R. No. 162396,
jurisdiction has jurisdiction 2007)
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2. REQUIREMENTS TO APPEAL TO NLRC Effect of self-executing order of reinstatement

on back wages
Appeal of LA's Decision The law intends the award of backwages and
Appeal from the decision of the LA is brought by similar benefits to accumulate past the date of the
ordinary appeal to the NLRC within 10 calendar LA's decision until the dismissed employee is
days from receipt of the decision. (Vir-jen actually reinstated. (Siemens Philippines v.
Shipping and Marine Services v. NLRC, G.R. No. Domingo, G.R. No. 150488, 2008)
58011-12, 1982)
However, if reinstatement is no longer possible,
The 10-day period is reckoned from receipt by backwages shall be computed from the time of
counsel of the final decision, order or award. This illegal dismissal until the date the decision
applies to both appeals from the LA to NLRC and becomes final. (Javellana V. Be/en, G.R. No.
NLRC to CA. (Sy. v. Fair/and Knitcraft, G.R. No. 181913 and 182158, 2010)
182915, 2011)
Note: If there was implementation of
This 10-day period is both mandatory and reinstatement pending appeal, either through
jurisdictional in nature. (Charter Chemical & actual or payroll reinstatement, and the employee
Coating Corp v. Tan, G.R. No. 163891, 2009) received his/her salary for the period of such
reinstatement, the said amount received shall be
NOTE: There is no appeal from the decision of deducted from the total amount of backwages
the NLRC. The only way to elevate the case to due the employee, assuming the final decision of
the CA is by way of special civil action of the case awarded backwages to the employee.
certiorari under Rule 65, Rules of Court.
An employee who was dismissed on the ground
From the ruling of the CA, it may be elevated to of AWOL due to incarceration, is entitled to
the SC by petition for review on certiorari under reinstatement and under the principle of "no work,
Rule 45 of the Rules of Civil Procedure. (St. no pay", his full backwages shall only commence
Martin Funeral Home v. NLRC, et aL, G.R. No. from the time he is refused work after acquittal.
130866, 1998) (Standard Electric v. Standard Electric
employees Union, G.R. No. 166111, 2005)
Grounds
1. Prima facie evidence of abuse of Determination of Employer's Liability After
discretion on the part of LA; Finality of the Case
2. The decision, order or award was After finality of the case, the records will have to
secured through fraud or coercion be remanded to the LA to determine the actual
including graft and corruption; liability of the employer to each and every
3. Pure questions of law; and employee. Both parties will have a chance to
4. Raised serious errors in the findings of submit further proof and argument in support of
facts which could cause grave or their respective proposed computations.
irreparable damage or injury to the
appellant. For the guidance of the LA, as well as the parties,
jurisprudence had laid down the following
Additional Requirement: In case of judgment yardsticks in the computation of the final amount
involving a monetary award, employer (appellant) of liability:
may perfect the appeal of the LA's decision only 1. Employees who have been re —
upon the posting of a cash or surety bond employed without loss of seniority rights
issued by a reputable bonding company duly shall be paid backwages but only up to
accredited by the NLRC in the amount equivalent actual reinstatement;
to the monetary award in the judgment appealed 2. Employees who have been re —
from. employed as new hires shall be restored
their seniority and other preferential
rights. However, their backwages shall
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be computed only to date of actual relapse, an excusable neglect, and, hence, not a
hiring; jurisdictional defect warranting the dismissal of an
3. Employees who shall have reached appeal. Instead, the NLRC should require the
compulsory age of retirement shall appellant to provide the opposing party copies of
receive backwages up to their retirement the notice of appeal and memorandum of appeal.
only. The same is true as regards the (J. PB: Fernandez v. Botica Claudio, G.R. No.
heirs of those who have passed away; 205870, 2014)
4. Employees who have not been
reemployed plus those who have Appeal by Employer Involving Monetary
executed quitclaims and received Award
separation pay of financial assistance A bond equivalent to monetary award should be
shall be reinstated without loss of posted within the 10-day period for filing of
seniority rights and paid full backwages, appeal.
after deduction of whatever amounts
already received; and If no bond is filed, appeal is not perfected. (see
5. Employees who had obtained Catubay v. NLRC, G.R. No. 119289, 2000)
substantially equivalent or even more
lucrative employment elsewhere in 1998 Remedy in case of failure to post bond, remedy is
or thereafter are deemed to have to file a motion to dismiss.
severed their employment with their
previous employer, and shall be entitled No monetary award, no appeal bond required
to full backwages from the date of their If LA's decision does not provide for a
retrenchment only up to the date they computation of the monetary award, no appeal
found gainful employment elsewhere. bond is required to be filed.
(FASAP v. PAL, G.R. No. 172013,
October 2, 2009) • Justifications for Non-Posting of Bond
1. No monetary award (Aba v. NLRC, G.R.
Requisites for Perfection of Appeal No. 122627, 1999);
1. Filed within the reglementary period; 2. Monetary award is not specified in the
2. Memorandum of Appeal under oath; decision (Orozco v. CA, G.R. No.
3. Appeal fee; 155207, 2005);
4. Cash, property, or surety bond, if 3. In case of conflict between body and folio
judgment involves monetary award; and of the decision, the latter should prevail
5. Proof of service to the adverse party. (Mendoza Jr. v. San Miguel Foods, G.R.
No. 158684, 2005)
Procedure
1. File Memorandum of Appeal within 10 Motion to Reduce Bond
calendar days, counted from receipt of General Rule: Motion to reduce bond does not
decision; toll the running of the period to perfect appeal.
2. Other party can file an Answer within 10
calendar days from receipt of
Memorandum of Appeal; Exception: See below (McBumie v. Ganzon,
3. NLRC decides within 20 calendar years; G.R. Nos. 178034& 178117, 2013)
4. NLRC decision becomes final and
executory 10 days after it is rendered. McBumie v. Ganzon Guidelines in Reduction
(subject to MR) of Appeal Bond
1. The filing of a motion to reduce appeal bond
Failure to Serve Copy of Memorandum of shall be entertained by the NLRC subject to
Appeal Not Jurisdictional the following conditions:
The mere failure of a party to serve his o There is meritorious ground; and
Memorandum of Appeal upon the opposing party o A bond in a reasonable amount is posted;
does not bar the NLRC from giving due course to
an appeal. Such failure is only treated as a formal 2. For purposes of comr:liance with the second
condition — bdild in rt.Idsonable amount — a
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motion shall be accompanied by the posting of interpretation when McBurnie made it clear that
a provisional cash or surety bond equivalent the percentage of bond set is provisional. (Sara
to (10%) of the monetary award subject of the Lee v. Macatlang, G.R. No. 180147, 2015)
appeal, exclusive of damages and attorney's Enforcement
fees; Any law enforcement agency may be deputized
by the DOLE Secretary or the NLRC.
3. Compliance with the foregoing conditions shall
suffice to suspend the running of the 10-day Issuance of writ of execution on a judgment within
reglementary period to perfect an appeal from 5 years from date it becomes final and executory
the labor arbiter's decision to the NLRC; motu proprio or in motion of any interested party.
4. The NLRC retains its authority and duty to 3. REINSTATEMENT PENDING APPEAL
resolve the motion to reduce bond and
determine the final amount of bond that shall If reinstatement is ordered in an illegal
be posted by the appellant, still in accordance dismissal case, it is immediately executory
with the standards of meritorious grounds and even pending appeal. This means that the
reasonable amount; and perfection of an appeal shall stay the execution of
the decision of the LA except execution of the
5. In the event that the NLRC denies the motion reinstatement pending appeal.
to reduce bond, or requires a bond that
exceeds the amount of the provisional bond, Self — executing with no need for a writ of
the appellant shall be given a fresh period of execution — only applicable to order issued by
10 days from notice of the NLRC order within Labor Arbiter.
which to perfect the appeal by posting the Writ of execution required when reinstatement is
required appeal bond. ordered by NLRC on appeal, or subsequently by
the CA or SC, as the case may be.
NOTE: A substantial monetary award, even if it
runs into millions, does not necessarily give the Either admitted back to work under the same
employer-appellant a 'meritorious case' and does terms and conditions prevailing prior to his
not automatically warrant a reduction of the dismissal or separation or merely reinstated in the
appeal bond. (Calabash Garments v. NLRC, G.R. payroll (at the option of the employer, i.e.
No. 110827, 1996) confidential employee, but the choice must be
communicated to the employee by the employer)
Examples of Meritorious Grounds
1. Fundamental consideration of substantial Posting of a bond shall not stay the execution of
justice; reinstatement.
2. Prevention of miscarriage of justice or of
unjust enrichment; or The unjustified refusal of the employer to
3. Special circumstances of the case reinstate an illegally dismissed employee entitles
combined with its legal merits and the the employee to payment of his salaries.
amount and issue involved (Garcia v. KJ
Commercial, G.R. No. 196830, 2012) Reinstatement Pending Appeal (Art. 229) vs.
Order of Reinstatement (Art. 294)
10% Appeal Bond is Provisional - ART. 229 ART. 294
The 10% requirement in McBumie pertains to the Order of The order of
reasonable amount which the NLRC would reinstatement by the reinstatement
accept as the minimum of the bond that should LA is immediately presupposes the
accompany the motion to reduce bond in order to executory pending award thereof is
suspend the period to perfect an appeal under the appeal. pursuant to a final
NLRC rules. The 10% is based on the judgment and executory
award and should in no case be construed as the It is similar to a return- judgment, and not
minimum amount of bond to be posted in order to to-work order. while the case for
perfect appeal. There is no room for a different
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illegal dismissal is Exclusive Appellate Jurisdiction

pending on appeal. 1. All cases decided by the LAs, including
Issued by the LA Issued by the NLRC, contempt cases;
CA, or SC 2. Cases decided by the DOLE Regional
Generally, no need for Requires the Directors or his duly authorized hearing
the issuance of a writ issuance of a writ of officers involving recovery of wages, simple
of execution. execution. money claims and other benefits not
exceeding P5,000 and not accompanied by
Jurisprudence a claim for reinstatement.
If despite several writs of execution, the employer
still refuses to reinstate the employee, the remedy Jurisdiction to Determine EER
is not the grant of additional backwages to serve The NLRC has jurisdiction to determine,
as damages but to file a motion to cite the preliminarily, the parties' rights over a property,
employer for contempt. (Christian Literature when it is necessary to determine an issue related
Crusade v. NLRC, G.R. No. 79106, 1989) to rights or claims arising from a EER (Milan v.
NLRC, G.R. No. 202961, 2015)
An order for reinstatement entitles an employee
to receive his accrued backwages from the Jurisdiction to hear cases over company-
moment the reinstatement order was issued up to owned property
the date when the same was reversed by a higher Both the LA and the NLRC have jurisdiction to
court without fear of refunding what he had hear cases over company-owned property
received. (Garcia v. Philippine Airlines, Inc., G.R. although the LA has primary jurisdiction.
No.164856, 2009)
In Yupangco Cotton vs. CA (G.R. 126322, 2002),
the Court held a third party whose property has
B. NATIONAL LABOR RELATIONS been levied upon by a sheriff to enforce a
COMMISSION (NLRC) decision against a judgment debtor is afforded
with several alternative remedies to protect its
1. JURISDICTION interests. The third party may avail himself of
alternative remedies cumulatively, and one will
Original Jurisdiction not preclude the third party from availing himself
1. Injunction in ordinary labor disputes to of the other alternative remedies in the event he
enjoin or restrain any actual or threatened failed in the remedy first availed of.
commission of any or all prohibited or
unlawful acts or to require the performance Thus, a third party may avail himself of the
of a particular act in any labor dispute following alternative remedies:
which, if not restrained or performed a. File a third party claim with the sheriff of
forthwith, may cause grave or irreparable the Labor Arbiter, and
damage to any party; b. If the third party claim is denied, the third
2. Injunction in strikes or lockouts under Art. party may appeal the denial to the NLRC.
279;
3. Certified labor dispute causing or likely to Even if a third party claim was denied, a third
cause a strike or lockout in an industry party may still file a proper action with a
indispensable to the national interest, competent court to recover ownership of the
certified to it by the DOLE Secretary for property illegally seized by the sheriff.
compulsory arbitration;
4. Contempt cases; and Ocular Inspection by LA & NLRC at any time
5. Petition to annul or modify the order or during working hours
resolution of the LA; The Chairman, any Commissioner, LA, or their
duly authorized representatives, may at any time
during work hours, conduct ocular inspection.
(2011 NLRC Rules of Procedure, Rule X, Sec. 5)
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Director, as the case may be. This is mandatory

Injunction from the NLRC is NOT the proper and jurisdictional.
remedy against employee dismissal
The NLRC's power to issue an injunction A motion for reconsideration should be filed even
originates from a 'labor dispute' before the LA. though it is not required or even prohibited by the
(PAL v. NLRC, G.R. No. 120567, 1998) concerned government office. This was the rule
enunciated in the 2014 case ofPhiltranco Service
Enterprises, Inc. v. PWU- AGLO (G.R. No.
C. JUDICIAL REVIEW OF LABOR RULINGS 180962, 2014).
1. COURT OF APPEALS Failure to file a motion for reconsideration within

the 10-day reglementary period prior to the filing
RULE 65, RULES OF COURT of a petition for certiorari renders the NLRC
Rule 65, Rules of Court decision final and executory. (J. PB: Michelin Asia
Section 1. Petition for certiorari. — When any Pacific Application Support System v. Ortiz, G.R.
tribunal, board or officer exercising judicial or No. 189861, 2014)
quasi-judicial functions has acted without or in
excess its or his jurisdiction, or with grave Thus, while a government office may prohibit
abuse of discretion amounting to lack or altogether the filing of a motion for
excess of jurisdiction, and there is no appeal, reconsideration with respect to its decisions or
or any plain, speedy, and adequate remedy in orders, the fact remains that certiorari inherently
the ordinary course of law, a person aggrieved requires the filing of a motion for reconsideration
thereby may file a verified petition in the proper which is the tangible representation of the
court, alleging the facts with certainty and opportunity given to the office to correct itself.
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, Simply put, regardless of the proscription against
board or officer, and granting such incidental the filing of a motion for reconsideration, the same
reliefs as law and justice may require. may be filed on the assumption that rectification
of the decision or order must be obtained and
General Rule: The only mode by which a labor before a petition for certiorari may be instituted.
case decided by any of the following labor
authorities/tribunals may reach the Court of NOTE: A second motion for reconsideration is
Appeals is through a Rule 65 petition for prohibited under the NLRC Rules. (G.R. No.
certiorari. 189861, 2014)
1. the DOLE Secretary;
2. the NLRC; and When Filing of a Motion for Reconsideration
3. the Director of the Bureau of Labor Not Necessary
Relations (BLR) in cases decided by him Q: A labor dispute between X and Y was pending
in his appellate jurisdiction (as before the NLRC. The NLRC ruled partly in favor
distinguished from those he decides in of Y. Dissatisfied with the decision, Y filed a
his original jurisdiction which are motion for reconsideration which was denied. In
appealable to the DOLE Secretary). the denial, the NLRC stated that "No further
motion of similar import shall be entertained."
Exception: Decisions, orders or awards issued Without filing a motion for reconsideration, X filed
by the VA or panel of VAs which may be a petition for certiorari before the CA. Was the
elevated to the CA by way of an ordinary appeal action taken by X proper?
under a Rule 43 petition for review.
A: Yes. The resolution explicitly warned the
litigating parties that the NLRC shall no longer
Requisites before filing a Petition for Review
entertain any further motions for reconsideration.
under Rule 65
This circumstance gave X the impression that
A Motion for Reconsideration must have been
moving for reconsideration before the NLRC
filed before the DOLE Secretary, NLRC, or BLR
would only be an exercise in futility in light of the
PAGE 227 OF 244
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tribunal's aforesaid warning. (Genpact Services 2. SUPREME COURT

v. SantOs-Falceso, G.R. No. 227695, 2017)
RULE 45, RULES OF COURT
When Appeal Bond May Be Reduced Rule 45, Rules of Court
While the posting of a cash or surety bond is Section 1. Filing of petition with Supreme
indispensable to the perfection of an appeal in Court. — A party desiring to appeal by
cases involving monetary awards from the certiorari from a judgment or final order or
decision of the LA, the Rules of Procedure of the resolution of the Court of Appeals, the
NLRC nonetheless allows the reduction of the Sandiganbayan, the Regional Trial Court or
bond upon a showing of: other courts whenever authorized by law, may
1. The existence of a meritorious ground for file with the Supreme Court a verified petition
reduction, and for review on certiorari. The petition shall raise
2. The posting of a bond in a reasonable only questions of law which must be distinctly
amount in relation to the monetary set forth.
award. (Philippine Touristers, Inc. and/or
Alejandro R. Vague, Jr. v. Mas Transit All references in the amended Section 9 of B.P.
Workers Union-Anglo-Kmu and its No. 129 to supposed appeals from the NLRC to
members, G.R. No. 201237, 2014). the Supreme Court are interpreted and hereby
declared to mean and refer to petitions for
Simultaneous filing of the motion to reduce certiorari under Rule 65.
bond and the posting of the reduced amounts
to substantial compliance with Art. 223 Consequently, all such petitions should hence
While the bond requirement on appeals involving forth be initially filed in the Court of Appeals in
a monetary award has been relaxed in certain strict observance of the doctrine on the hierarchy
cases, this can only be done where there was of courts as the appropriate forum for the relief
substantial compliance with the rules or where desired. (St. Martin Funeral Home vs. NLRC,
the appellants, at the very least, exhibited 1998)
willingness to pay by posting a partial bond.
(Magdala Multipurpose v. KMLMS, G.R. 191138- Appeal from CA to SC should be under Rule 45
39, 2011). (Petition for Review on Certiorari) and not Rule 65
(Special Civil Action for Certiorari). (Sea Power
LA, NLRC, or CA MAY validly award attorney's Shipping Enterprises, Inc. vs. CA, 2001)
fees in favor of a complainant even if not
claimed or proven in the proceeding.
The provision on attorney's fees in Article 111 D. BUREAU OF LABOR RELATIONS
envisions a situation where there is a judicial or
administrative proceeding for recovery of wages. 1. JURISDICTION
Upon the termination of the proceedings, the law Jurisdiction of BLR

allows a deduction for attorney's fees of 10% from 1. Inter-union conflicts
the total amount due to the winning party. 2. All disputes, grievances or problems
(Vengco v. Trajano, G.R. No. 74453, 1989). arising from or affecting labor-
management relations in all workplaces
EXCEPT those arising from the
Hence, even if there is no claim and proof, implementation or interpretation of the
attorney's fees not more than 10% of the amount CBA which shall be the subject of
entitled may be awarded. The court has also a grievance procedure and/or voluntary
liberty of decreasing it if the questions involved in arbitration
the litigation are neither novel nor difficult. (D.M. 3. Complaint involving federations, national
Consunji v. NLRC, G.R. No. 71459, 1986). unions, industry unions, its officers or
member organizations
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ORIGINAL APPELLATE Note: Unlike the NLRC which is explicitly vested

Cases involving Cases involving with the jurisdiction over claims for actual, moral,
Federations and independent unions exemplary and other forms of damages, the BLR
National Unions and local chapters is not specifically empowered to adjudicate
claims of such nature arising from intra-union or
inter-union disputes. (Marino, Jr., et. al. v.
MODE OF REVIEW
Gamine, et. al.,G.R. No. 132400, January 31,
ORIGINAL APPEALLATE
2005)
JURISDICTION . JURISDICTION
Decision is
Power to Issue Subpoena
immediately
When relevant to a labor dispute under its
executory upon
jurisdiction either at the request of any interested
issuance of entry of
Appeal to DOLE party or at its own initiative
final judgment; can be
Secretary
reviewed by the CA in
Compromise Agreements
a petition for
If voluntarily agreed upon by the parties with the
certiorari under Rule
assistance of the BLR or the regional office of
65.
DOLE --> final and binding upon the parties
Within 10 days to the
DOLE Secretary
The only time NLRC or any courts can assume
Grounds:
jurisdiction over issues involved therein:
Grave abuse of
1. In case of non-compliance thereof
discretion
2. If there is prima facie evidence that the
settlement was obtained through fraud,
Gross incompetence
misrepresentation or coercion
Appeal of BLR's Decision As long as the agreement is voluntarily entered
1. Denial of application for registration of a into and has a reasonable award, it is valid.
union
a. Denial by the Regional Office, appeal to It must be approved by the LA (NLRC Rules).
the BLR
b. Denial is originally made by the BLR,
At the DOLE Secretary's level, the Secretary
appeal may be had to the DOLE
must approve.
Secretary
2. Cancellation of registration of a union
On appeal, the NLRC must approve the
a. Cancellation by the Regional Office,
appeal to the BLR. agreement.
b. Cancellation by the BLR in a petition filed
An offer to settle is not proof that something is due
directly, appeal to DOLE Secretary by
ordinary appeal to the employee.
3. Decision of the BLR rendered in its original
jurisdiction may be appealed to the DOLE Art. 233 of the Labor Code states that any.,
Secretary whose decision thereon may only compromise settlement, including those involving
be elevated to the CA by way of certiorari labor standard laws, voluntarily agreed upon by
under Rule 65. the parties with the assistance of the Bureau or
4. Decision of the BLR rendered in its appellate the Regional Office of the Department of Labor
jurisdiction may not be appealed to the DOLE shall be final and binding upon the parties.
Secretary but may be elevated directly to the
Note: The assistance of the BLR or the regional
CA by way of certiorari under Rule 65.
(Abbott Laboratories Philippines, Inc. v. office of the DOLE in the execution of a
Abbott Laboratories Employees Union, et al., compromise settlement is a basic requirement.
G.R. No. 131374, 2000) Without it, there can be no valid compromise
settlement. Mere appearance before BLR or the
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regional office of the DOLE to file the already Privileged Communication

executed compromise settlement is not the Information and statements made at conciliation
"assistance" required by the law. (Mindoro meetings shall NOT be used as evidence in the
Lumber and Hardware v. Eduardo D. Bacay, et. NLRC. Conciliators and similar officials shall not
aL, G.R. No. 158753, 2005) testify in any court or body regarding any matters
taken up at conciliation proceeding conducted by
Jurisdiction of the POEA them.
1. Cancellation/Suspension of License of
Authority to recruit of Recruitment 2. PREVENTIVE MEDIATION
Agencies (until phase out within 5 years NCMB Manual of Procedures Section 1, (24),
as provided in RA 8042) refers to Preventive Mediation cases as labor
disputes Which are the subject of a formal or
2. Disciplinary Action against OFWs informal request for conciliation and mediation
assistance sought by either or both parties or
Appeal to Secretary of DOLE within 10 upon the initiative of the NCMB.
calendar days-
cancellation/revocation/supervision of
Only a certified or duly recognized bargaining
license or authority agent may file a notice or request for preventive
mediation.
Appeal of POEA Decision to NLRC w/in 10
calendar days in cases of: NCMB has no jurisdiction to entertain any notice
1. Violation of overseas employment
filed by the federation in behalf of individual union
contracts.
members of its local. (Insular Hotel Employees
2. Disciplinary cases filed against overseas
Union-NFL v. Waterfront Insular Hotel Davao,
contract workers.
G.R. No. 174040-41, 2010)
E. NATIONAL CONCILIATION AND MEDIATION
BOARD F. DOLE REGIONAL DIRECTORS
Jurisdiction of the NCMB Jurisdiction of DOLE RDs

1. Conciliation 1. Visitorial power. (Art. 128, Labor Code)
2. Mediation 2. Simple Money Claims not exceeding Php
3. Voluntary arbitration cases 5,000. (Art. 129, Labor Code)
3. Violation of the constitution & by — laws
and rights & conditions membership.
1. CONCILIATION, MEDIATION 4. Inter-union and intra-union disputes
Conciliation — Mediation refers to the process of involving independent unions and
dispute management conducted by a Conciliator chartered locals.
— Mediator with the end in view of facilitating
amicable settlement of the labor dispute. (NCMB 1. Recovery and Adjudicatory Power
Manual of Procedures Rule Ill, Section 1, (4))
Requisites for RD to Decide Small Money
ORGANIZED UNORGANIZED Claims
ESTABLISHMENT ESTABLISHMENTS 1. Claim is presented by an employee, or a
WITH CBA AND WITHOUT CBA person employed in domestic or
Submit the issue household service, or employer;
Submit issue before
before NCMB for 2. The claim arises from an EER;
the grievance
conciliation. If not 3. The claimant does not seek
machinery. If
fruitful in 10 days, reinstatement; and
unresolved, refer to
refer to NLRC for 4. The aggregate money claim of each
voluntary arbitration
arbitration claimant does not exceed PhP 5,000
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Notes: In the absence of any of the above 3. Order Work Stoppage / Suspension of
requisites, the LA will have jurisdiction over the Operations when non-compliance with
case, pursuant to ART. 224. the law or IRR poses grave or imminent
danger to the health and safety of the
The claimant need not be an employee at the time workers in the workplace
the complaint has been filed; it is enough that the 4. Conduct hearings within 24 hours to
claim arises from employment determine whether:
a. An order for stoppage of work /
Appeal from the RD's Decision suspension of operations shall
The Complainant may appeal to the NLRC within be lifted or not; and
10 calendar days from a receipt of a copy of the b. Employee shall pay the
Regional Director's decision / resolution. employees concerned their
salary in case the violation is
G. DOLE SECRETARY attributable to his fault
1. Visitorial and enforcement powers Note: EER must still exist at the time of the
initiation of the action for the Secretary or his
Visitorial Power authorized representative to exercise
Power of the Secretary of Labor or his duly Enforcement Power
authorized representative, including labor
regulation officers to: When Enforcement Power Cannot be Used
1. Have access to employer's records and 1. Case does not arise from exercise of
premises at any time of the day or night visitorial power
whenever work is being undertaken 2. When EER ceased to exist at the time of
therein inspection
2. Right to copy records 3. If employer contests finding of the labor
3. To question any employee
officer and such contestable issue is not
4. Investigate any fact, condition, or matter
verifiable in the normal course of
which may be necessary to determine
inspection
violations or which may be necessary to
aid in enforcement of the Labor Code or
Compliance Order
any labor law or order
Must observe due process in administrative
proceedings:
Enforcement Power
1. Alleged violator must first be heard and
Power of the Secretary of Labor or his duly
given adequate opportunity to present
authorized representative, including labor evidence on his behalf.
regulation officers to: 2. Evidence presented duly considered
1. Issue compliance orders to give effect to before any decision reached.
labor legislation based on the findings of 3. Decision is based on substantial
employment and enforcement officers or evidence.
industrial safety engineers made in the 4. Decision based on evidence presented in
course of inspection the hearing, or at least contained in the
2. Issue writs of execution to the 'record and disclosed to the parties.
appropriate authority for the enforcement 5. Decision should explain the issueg
of their orders, EXCEPT in cases where involved and the reasons for the
the employer contests the findings of the decisions rendered.
labor employment and enforcement
officer and raises issues supported by Appeal
documentary proofs which were not If order issued by duly authorized representative
considered in the course of inspection — of DOLE Secretary — appeal to the latter
in the latter case, the case will have to be
forwarded to a Labor Arbiter If order involves monetary award — an appeal by
the employer may be perfected upon only upon
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posting of CASH or SURETY bond in the amount

equivalent to the monetary award in the order Before the DOLE may exercise its power under
appealed from Art. 128, two important things must be resolved:
1. Does the employer — employee relationship
Stoppage of Work/Suspension of Operations still exist, or alternatively, was there ever an
The Secretary may order stoppage of work OR employer — employee relationship to speak
suspension of any unit or department where non- of; and
compliance with the law or implementing rules 2. Are there violations of the Labor Code or any
and regulations poses grave and imminent of the labor laws?
danger to the health and safety of workers in the
workplace. Note: The existence of EER is a statutory
prerequisite to a limitation on the power of the
Within 24 hours — a hearing shall be conducted to Secretary of Labor, on which the legislative
determine whether an order for the stoppage of branch is entitled to impose.
work or suspension of operations shall be lifted
Art. 128's grant of visitorial and enforcement
If violation is attributable to fault of the employer, powers is for the purpose of determining
he shall pay the employees concerned their violations of, and enforcing, the Labor Code and
salaries or wages during the period of such any labor law, wage order, or rules and
stoppage of work or suspension of operations. regulations. If there is no employer-employee
relationship in the first place, the duty of the
Comparison: Enforcement Power under Art. employer to adhere to labor standards with
128 vs. Adjudicatory Power under Art. 129 respect to the non-employees is questionable.
ART. 128 - ART. 129 -
_OM- aZeOfilla*M1,1M. DOLE can Determine, Prima Facie, the
Inspection of Existence of an EER
establishments and If there is a prima facie showing of the absence of
issuance of Adjudication of employer-employee relationship, the Secretary is
compliance orders monetary claims precluded from exercising the visitorial and
with labor standards, (labor standards) enforcement powers. (People's Broadcasting v.
wage orders, or other
Secretary of Labor, G.R. No. 179652, May 8,
labor laws
2009)
Any interested party
The DOLE Secretary . .. Under Art. 128(b) of the Labor Code, as amended
initiates the case
or Regional Director by RA 7730, the DOLE is fully empowered to
through a sworn
acts motu proplo
complaint make a determination as to the existence of an
.E gEstriofted ,.. employer-employee relationship in the exercise
Present or past of its visitorial and enforcement power, subject to
Employees must still employees at the judicial review, not review by the NLRC.
be in the service time the complaint is
(hence, there is an filed, provided that If a complaint is brought before the DOLE to give
existing EER) there is no demand
effect to the labor standards provisions of the
for reinstatement
- 11,4- ,:j.,iliMi. triiniff iiiiitNa . Labor Code or other labor legislation, and there is
No maximum Maximum of P5,000 a finding by the DOLE that there is an existing
r nor 1eta w limit per complainant employer-employee relationship, the DOLE
., Offi6Oiti:;D:e:adt:TO,to,d -' exercises jurisdiction to the exclusion of the
DOLE Secretary or Regional Director NLRC.
any of his duly (RD) or any duly
authorized rep (may or authorized hearing If the DOLE finds that there is no employer-
may not be RD) officer of the DOLE employee relationship, the jurisdiction is properly
. ...!'4. - Mode of A000) .. ' with the NLRC.
Appealable to the Appealable to the
DOLE Secretary NLRC
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If a complaint is filed with the DOLE, and it is a complaint under oath and duly supported by the
accompanied by a claim for reinstatement, the written consent of at least 20% of the total
jurisdiction is properly with the Labor Arbiter, membership of the labor organization concerned
under Art. 217(3) of the Labor Code, which and to examine their books of accounts and other
provides that the Labor Arbiter has original and records to determine compliance or non-
exclusive jurisdiction over those cases involving compliance with the law and to prosecute any
wages, rates of pay, hours of work, and other violations of the law and the union constitution
terms and conditions of employment, if and by-laws:
accompanied by a claim for reinstatement.
Provided, That such inquiry or examination shall
If a complaint is filed with the NLRC, and there is not be conducted during the
still an existing EER, the jurisdiction is properly
with the DOLE. 60-day freedom period nor within the 30 days
immediately preceding the date of election of
The findings of the DOLE, however, may still be union officials. (Labor Code, Art. 289)
questioned through a petition for certiorari under
Rule 65 of the Rules of Court. (People's SOLE generally has NO jurisdiction over
Broadcasting v. Secretary of Labor, G.R. No. appeals
179652, 2012) In The Heritage Hotel vs. National Union of
Workers (G.R. 178296, 2011), the Supreme
Unlawful Activities Court ruled that jurisdiction remained with the
1. For any person or entity to obstruct, BLR despite the BLR Director's inhibition.
impede, delay or otherwise render
ineffective the orders of the Sec. or his "When the DOLE Secretary resolved the appeal,
authorized representatives issued she merely stepped into the shoes of the BLR
pursuant to the authority under Art. 128. Director and performed a function that the latter
No inferior court shall issue temporary or could not himself perform."
permanent injunction or restraining order
or otherwise assume jurisdiction over any SOLE has the power to give arbitral awards in
case involving the enforcement orders. the exercise of his authority to assume
jurisdiction over labor dispute
2. POWER TO SUSPEND EFFECTS OF The arbitral award given by the Secretary of
TERMINATION Labor can be considered as an approximation of
a collective bargaining agreement. While the
Miscellaneous Provisions award cannot per se be categorized as an
The Secretary of Labor and Employment may agreement between the parties (because of the
suspend the effects of the termination pending Secretary's interference), it still has the force and
resolution of the dispute in the event of a prima effect of a valid contract obligation between the
facie finding by the appropriate official of the parties, as is stated in (Cirtek Employees vs.
Department of Labor and Employment before Cirtek Electronics, G.R. 190515, 2011).
whom such dispute is pending that the
termination may cause a serious labor dispute or 3. REMEDIES
is in implementation of a mass lay-off. (Labor
Code, Art. 292[b]) Decisions of the DOLE Secretary are appealable
to the NLRC within 5 calendar days.
Conditions under which Secretary of Labor or
his duly authorized representative MAY Remedy where no EER exists
inquire into the financial activities of Where no employer-employee relation exists
legitimate labor organizations between the parties and no issue is involved
The Secretary of Labor and Employment or his which may be resolved by reference to the Labor
duly authorized representative is hereby Code, other labor statutes, or any collective
empowered to inquire into the financial activities
of legitimate labor organizations upon the filing of
PAGE 233 OF 244
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bargaining agreement, it is the RTC that has The show steward, the employee and his
jurisdiction. immediate supervisor shall exert efforts
to settle the grievance at their level.
The RTC has jurisdiction over the claim of an C. If no settlement is reached, the grievance
independent contractor to adjust the shall be referred to the grievance
contractor's fee. (Urbanes v. Secretary of Labor, committee which shall have 10 days to
decide the case.
G.R. No. 122791, 2003)
I. VOLUNTARY ARBITRATORS
H. GRIEVANCE MACHINERY
Purpose 1. JURISDICTION (ART. 274)

The parties to a CBA shall establish a machinery 1. Grievances arising from the
implementation or interpretation of CBAs
for the adjustment and resolution of grievances
2. Arising from interpretation or
arising from the interpretation of implementation
enforcement of company personnel
of their CBA and those arising from the
policies
interpretation or enforcement of company
3. Wage distortion issues arising from the
policies. (LC, Art. 273)
application of any wage orders in
organized establishments
Absence of Grievance Machinery Provision in
4. Arising from interpretation and
CBA
implementation of the productivity
In the absence of applicable provision in the CBA,
incentive programs under RA 6971
a grievance committee shall be created within 10
5. Any other labor disputes upon agreement
days from signing of the CBA. The committee
by the parties.
shall be composed of at least two (2)
representatives each from the members of the
NOTE: The parties may choose to submit the
bargaining unit and the employer, unless
dispute to voluntary arbitration proceedings
otherwise agreed upon by the parties. The
before or at stage of the compulsory arbitration
representatives from among the members of the
proceedings.
bargaining unit shall be designated by the union.
(Rule XIX, Section 1(2), D. 0. 40-03)
Issues/ controversies which may be the
subject of voluntary arbitration
By-passing Grievance Machinery is ULP
1. Article 261 of the Labor Code provides
The failure or refusal of any party to the CBA to that VA shall have original and exclusive
adhere to the grievance procedure amounts to an jurisdiction over unresolved grievances
unfair labor practice. Collective bargaining does arising from the interpretation or
not end with the execution of an agreement. It is implementation of the CBA and those
a continuous process. (Republic Savings Bank v. arising from the interpretation or
CIR, G.R. No. L-20303, 1967) enforcement of company personnel
policies
Procedure in Handling Grievances 2. Violations of the CBA which are not gross
In the absence of a specific provision in the in character if not resolved through the
collective bargaining agreement or existing grievance machinery.
3. All other labor disputes including ULP
company practice prescribing for the procedures
and bargaining deadlock upon
in handling grievance, the following shall apply: agreement of the parties (Labor Code,
a. An employee shall present his grievance Art. 262)
or complaint orally or in writing to the
shop steward. Upon receipt thereof, the Submission agreement
shop steward shall verify the facts and
determine whether or not the grievance is Note: It is mandatory for parties to refer their
valid. controversy to a grievance machinery and
b. If the grievance is valid, the shop steward voluntary arbitrators for the adjustment or
shall immediately bring the complaint to resolution of grievances arising from the
the employee's immediate supervisor.
PAGE 234 OF 244
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interpretation or implementation of their CBA and 2. REMEDIES

those arising from the interpretation or VA or panel of VAs may grant the same reliefs
enforcement of company personnel policies. and remedies granted by Labor Arbiters under
(Sanyo Philippines Workers Union-PSSLU v. Article 279 of the Labor Code, such as:
Canizares, G.R. No. 101619, 1992) 1. In illegal dismissal cases:
a. Actual reinstatement;
A VA is confined to the interpretation and b. Separation pay in lieu of
application of the CBA. He does not sit to reinstatement, in case
reinstatement becomes
dispense his own brand of industrial justice and
impossible, non-feasible or
his award is legitimate only insofar as it draws its
impractical;
essence form the CBA. c. Full backwages;
d. Moral and exemplary damages;
While the VA is confined to the interpretation and and
the application of the CBA in resolving the issue/s e. Attorney's fees.
submitted for its resolution, he is not expected to 2. Monetary awards in monetary claims
merely rely on the cold and cryptic words on the cases in which case, the decision should
face of the CBA. He is mandated to discover the specify the amount granted and the
intentions of the parties and gaps may likewise be formula used in the computation thereof.
filled by reference to the practices of the industry,
such that the parties' contemporaneous and Rule 43, §1,, Rules of Court. The decision of
subsequent acts should be considered. (Veloso, a Voluntary Arbitrator or panel of Voluntary
Labor Reviewer, pp 415-416 (2011)) Arbitrators is appealable by ordinary appeal
under Rule 43 of the Rules of Civil Procedure
A dispute settled through voluntary directly to the Court of Appeals.
arbitration IS NOT inconsistent with Article
217 of the Labor Code Appeal of VA's Decision
The SC in The University of Immaculate Appealable by ordinary appeal under Rule 43 of
Concepcion vs. NLRC (G.R. 181146, 2011), the Rules of Civil Procedure directly to the CA.
stated that Article 262 provides of an exception,
and "for the exception to apply, there must be From the CA, the case may be elevated to the SC
agreement between the parties clearly conferring by way of ordinary appeal under the same Rule
jurisdiction to the voluntary arbitrator. Such 45. (Luzon Development Bank v. Association of
agreement may be stipulated in a collective Luzon Development Bank Employees, et al., G.R.
bargaining agreement. However, in the absence No. 120319, 1995)
of a collective bargaining agreement, it is enough
that there is evidence on record showing the Instances when an order of execution may be
parties have agreed to resort to voluntary appealed
arbitration." 1. When execution becomes impossible or
unjust, it may be modified or altered on
Effect of failure to resort to barangay appeal to harmonize the same with justice
conciliation to the labor case and the facts (Torres vs. NLRC, G.R. No.
Labor disputes are the exception to PD 1508. 107014, 2000).
Under Art. 226 of the Labor Code, motions to 2. Supervening events may warrant
dismiss before the LA are only allowed on modification in the execution of judgment, as
grounds of lack of jurisdiction, improper venue when reinstatement is no longer possible
and bar by prior judgment or prescription. Hence, because the position was abolished as a
failure to resort to barangay conciliation is not a cost-cutting measure due to losses. (Abalos
valid ground to defeat the labor case vs. Philex Mining Corp, G.R. 140374, 2002).
3. Where the writ is found defective, exceeds or
varies the award and/or is irregularly issued.
(DBP v. Union Bank, G.R. No. 155838, 2004)
PAGE 235 OF 244

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Execution of a labor judgment which on J. PRESCRIPTION OF ACTIONS

appeal, had become final and executory
By filing a motion for execution and serving a writ All money claims arising from
of execution to be served by the sheriff or such employer— employee relations
law enforcement agency as may be deputized by accruing during the effectivity
the DOLE or NLRC. It may also be issued motu MONEY of this Code shall be filed
propio by the Labor Arbiter. (Labor Code, Arts. CLAIMS within 3 years from the time
223 & 224) the cause of action accrued;
. otherwise they shall be forever
. barred.
. An action for reinstatement
prescribes in 4 years, for the
injury to the employee's rights
ILLEGAL
as provided under Art. 1146 of
DISMISSAL
the Civil Code. (Caliente v.
Carnation Philippines, G.R.
No. 70615, 1986)
1 year from accrual of such
ULP
• unfair labor practice.
Simple illegal recruitment — 5
ILLEGAL
years
RECRUITME
Economic sabotage — 20
NT
yearS-
General Rule: 3 years from
the time the cause of action
- OFFENSES accrued
UNDER THE:
- LABOR . Exception: ULP cases
CODE prescribe within 1 year from
accrual of such unfair labor
practice
A complaint or petition for
audit or examination of funds
and books of accounts
prescribes within three (3)
years:
from the date of submission
of the annual financial
report to the DOLE; or
ACTIONS 1. from the date the same
should have been
INVOLVING
submitted as required by
UNION law, whichever comes
FUNDS . earlier.
This provision on the

prescriptive period applies
only to a legitimate labor
organization which has
submitted the financial report
required under the Labor
Code.
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SUMMARY OF PROCEDURE: LABOR CASES NLRC Rules provide that before deciding, LA
must inform parties that the case has been
The rules of evidence prevailing in courts of law submitted for decision. If this is not complied with,
or equity shall not be controlling. decision is still valid because of Art. 227.
It is the spirit and intention of this Code which Art. 218(c) cannot be invoked to support a faulty
shall be used as reasonable means to ascertain decision of the LA. The provision refers to a
the facts in each case, without regard to power of the NLRC and not the LA.
technicalities of law and procedure all in the
interest of due process. Summary
1. Decision of the Voluntary Arbitrator —
Parties may be represented by legal counsel but appeal to CA under Rule 43 (Luzon Dev't
it shall be the duty of the Chairman, any presiding Bank)
Commissioner or any labor arbiter to exercise 2. Decision of the DOLE and other attached
complete control of the proceedings at all stages. agencies (including NLRC) should be
brought to the CA under Rule 65 (St.
Martin Funeral Homes)
General Rule: The only way to acquire 3. Decision of the DOLE Secretary —
jurisdiction is to serve summons. certiorari to the CA under Rule 65
(NAFLU v. Laguesma)
Exception:Voluntary appearance of the lawyer 4. Order of the Med-Arbiter GRANTING the
amounts to voluntary submission to the Petition for CE in an UNORGANIZED
jurisdiction of the LA. (Santos v. NLRC, G.R No. establishment — not appealable under
101699, 1996) DO 40-03 (2003). Thus, the recourse is
certiorari under Rule 65.
Failure to implead a substitute party is not a fatal 5. Decisions of the BLR in its appellate
jurisdiction — CA, certiorari under Rule
defect. (Chu v. Pasajo, 2003)
65. (UST Faculty Union v. Bitonio, G.R.
No. 131235, 1999)
Payment of docket fees is not required in labor 6. Certiorari is not a substitute for lost
standards claims under Art. 292(d). appeal.
Except: In case of bargaining deadlock, the fees 7. 10 days to perfect appeal by filing a
are shared by the parties. Memorandum of Appeal
8. Property bond is now allowed. (UERM-
Sec. 3, Rule V of the NLRC Rules allows parties Memorial Medical Center v. NLRC, G.R.
to submit position papers with attachments and No. 110419, 1997)
they can be made basis of the LA's decision. 9. Appeal bond must be strictly complied
with.
10. NLRC cannot resuscitate a lost appeal.
Holding of trial on the merits is discretionary on 11. Only 1 MR is allowed.
the part of the LA. 12. LA cannot entertain an MR or a petition
for relief of judgment. After the decision
Due process in Art. 292(b), termination disputes has become final and executory, the writ
-› end line is hearing with representative of own of execution is NOT appealable.
choice 13. To stay writ of execution, ask for an
injunction under Art. 218 (e).
Due process in Art. 2273 opportunity to be heard 14. Period to appeal cannot be extended
BUT in a number of cases, SC
entertained appeals filed out of time
It is wrong to apply opportunity be heard in due
under the interest of justice rule (esp. if
process under Art. 292(b). the appellants are the employees)
15. Doctrine of supervening event (i.e.
Verification and Certification of Non-Forum closure of company) requires payment of
Shopping are required BUT Art. 227 can be separation pay and full backwages up to
invoked. the time of the closure of the company.
PAGE 237 OF 244

JURISDICTION TABLE
LABOR AR1BTER DOLE REGIONAL
DIRECTORS NLRC COURT OF APPEALS SUPREME COURT
1. ULP 1. Visitorial power. (Art. 128, Appeal from CA to SC
2. Termination disputes Labor Code) ORIGINAL JURISDICTION VIA RULE 65 should be under Rule 45
3. Claims for wages, rates of pay, hours 2. Simple Money Claims not 1. Injunction in ordinary labor (Petition for Review on
of work and other terms and conditions exceeding Php 5,000. (Art. disputes to enjoin or restrain any The only mode by which a labor Certiorari) and not Rule
of employment — if accompanied with 129, Labor Code) actual or threatened case decided by any of the 65 (Special Civil Action
a claim for reinstatement 3. Simple Money Claims not commission of any or all following labor authorities/tribunals for Certiorari). (Sea
4. Claims for actual, moral, exemplary exceeding Php 5,000. (Art. prohibited or unlawful acts or to may reach the Court of Appeals is Power Shipping
and other forms of damages arising 129, Labor Code) require the performance of a through a Rule 65 petition for Enterprises, Inc. vs. CA,
from employer-employee relationship 4. Violation of the constitution particular act in any labor certiorari. 2001)
5. Cases arising from prohibited activities & by — laws and rights & dispute which, if not restrained 1. DOLE Secretary;
during strikes, including questions conditions membership. or performed forthwith , may 2. Commission (NLRC); and
involving the legality of strikes and 5. Inter-union and intra-union cause grave or irreparable 3. Director of the Bureau of Labor
lockouts disputes involving damage to any party Relations (BLR) in cases
6. All other claims arising from employer independent unions and 2. Injunctions in strikes or lockouts decided by him in his appellate
— employee relationship involving an chartered locals. under Art. 279 jurisdiction (as distinguished
amount exceeding P5000 regardless 3. Certified labor dispute casing or from those he decides in his
of whether accompanied by a claim for likely to cause a strike or lockout original jurisdiction which are
reinstatement except claims for ECC, in an industry indispensable to appealable to the DOLE
SSS, Medicare, & maternity benefits the national interest, certified to Secretary).
7. Wage distortion cases in unorganized it by the DOLE Secretary for
establishments compulsory arbitration EXCEPTION: RULE 43
8. All monetary claims of OFWs arising
from EER or by virtue of any law or Decisions, orders or awards
contract involving Filipino workers for EXCLUSIVE APPELLATE
JURISDICTION issued by the Voluntary
overseas deployment, including claims Arbitrator or panel of Voluntary
for actual, moral, exemplary and other 1. All cases decided by the LAs,
including contempt cases Arbitrators
forms of damages (RA 8042)
9. Enforcement of 2. Cases decided by the DOLE
compromise
agreements when there is non- Regional Directors or his duly
compliance by any of the parties authorized hearing officers
pursuant to Art. 233 of the Code (Sec. involving recovery of wages,
1, Rule V, 2005 NLRC Rules) simple money claims and other
benefits not exceeding Php
5,000 and not accompanied by
a claim for reinstatement.
PAGE 238 OF 244

NATIONAL
BUREAU OF LABOR CONCILIATION ,
DOLE SECRETARY
, RELATIONS AND MEDIATION
BOARD
1. Inter-union conflicts 1. Conciliation Art. '128. Visitorial and Enforcement Power. Grievances arising from
All disputes, grievances or problems 2, Mediation Power of the Sec. of Labor or his duly authorized representative, the implementation or
arising from or affecting labor- 3. Voluntary including labor regulation officers to: interpretation of CBAs
management relations in all arbitration 1. Have access to employer's records and premises at any time 2. Arising from interpretation
workplaces EXCEPT those of the day or night whenever work is being undertaken therein or . enforcement of
arising from the implementation 2. Right to copy records company personnel
or interpretation of the CBA which 3. To question any employee policies
shall be the subject of grievance 4. Investigate any fact, condition, or matter which may be 3. Wage distortion issues
procedure and/or voluntary necessary to determine violations or which may be necessary arising from the
arbitration to aid in enforcement of the Labor Code or any labor law or application of any wage
Complaint involving federations, order orders in organized
national unions, industry unions, 5. Issue compliance orders to give effect to labor legislation establishments
its officers or member based on the findings of employment and enforcement 4. Arising from interpretation
organizations officers or industrial safety engineers made in the course of and implementation of the
inspection productivity incentive
6. Issue writs of execution to the appropriate authority for the programs under RA 6971
enforcement of their orders, EXCEPT in cases where the 5. Any other labor disputes
employer contests the findings of the labor employment and upon agreement by the
enforcement officer and raises issues supported by parties.
documentary proofs which were not considered in the course
of inspection — in the latter case, the case will have to be
forwarded to a Labor Arbiter
PAGE 239 OF 244

ATENEO CENTRAL
PAGE 240 OF 244

Labor Law Review

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TABLE OF CONTENTS

d. Sexual Harassment (RA 7877) 52

b. TRILATERAL RELATIONSHIP 178

I. GENERAL PROVISIONS Welfare state based on social justice

Social Justice Balancing of interests

2. Article Ill: Bill Of Rights

To constitute valid dismissal from employment,

Labor as Property Right

Sec. 4. No law shall be passed abridging the

Wearing armbands and putting up placards to

Sec. 8. The right of the people, including those

Sec. 18(2). No involuntary servitude in any form Management prerogative

The State shall regulate the relations between Principle of Co-Determination

collective bargaining, strikes and lockouts, closed

The law also recognizes that management has

While labor laws should be construed liberally in

If doubts exist between the evidence presented by

A. RECRUITMENT AND PLACEMENT OF LOCAL Private Employment Agency v. Private

LABOR CODE R.A. No. 8042 — MIGRANT WORKERS ACT, AS AMENDED

a. Elements Illegal recruitment shall mean any act of

Doctrines: Illegal Recruitment expiration does not constitute illegal recruitment.

RA 8042 — OVERSEAS FILIPINOS AND

oppressive terms and conditions • of connection with his documentation and

• Refuse to condone or renegotiate a loan

For a recruitment/manning agency or a foreign

b. Types of Illegal Recruitment c. Illegal recruitment versus estafa

Two Kinds of Illegal Recruiters ILLEGAL

2. Liability of Local Recruitment Agency and Foreign Employer

Prescriptive Period The liability of the principal/employer and the

b. Theory of Imputed Knowledge 3. Termination of Contract of Migrant Worker

4. Ban on Direct hiring Employers cannot directly hire workers for

Exceptions: Entities Authorized To Engage In Recruitment

Summary of Penalties and Prescriptive Periods

B. EMPLOYMENT OF NON-RESIDENT ALIENS C. REGULATION OF RECRUITMENT AND

ban on the deployment of migrant workers. (R.A. Visitorial Powers

b. Torts — Fall under the provisions of the Civil

Amount required to be remitted (E.O. No. 857)

The amount of one's salary required to be remitted

D. Special Groups of Employees

6. Apprentices and learners A. CONDITIONS OF EMPLOYMENT

Excluded Employees (Go-Ma-Off-FiFa-DoPe)

b. Managerial employees if they meet all of

c. Officer or members of a managerial staff if

231). When Employee is Considered Working while

Exceptions: Cornpensable It substitutes for the hours the

Semestral break of teachers is compensable

NSD = (10% x regular wage/hr.) x no. of hrs. of management of the establishment in

Overtime Pay Rates Overtime Pay Premium Pay

It is permissible for the employer to stipulate that Proof of Hours Worked

floods, typhoons, earthquake, epidemic or considering that a pre-approved overtime

Two conditions for validity of such arrangement: e. Computation of additional compensation

2) Additional compensation is demandable only if Requirements for deducting value of facilities:

3) Compensation for work rendered in excess of (b) Supplements

Criterion: In determining whether a privilege is a 3. Employee's preference based on religious