Vous êtes sur la page 1sur 108

Fundamental

Principles

and

Policies

1

CONSTITUTIONAL PROVISIONS

1

CIVIL CODE

2

LABOR CODE

3

Recruitment and Placement.5

RECRUITMENT OF LOCAL AND MIGRANT WORKERS

5

ILLEGAL RECRUITMENT

5

DIRECT HIRING

11

REGULATION AND ENFORCEMENT

11

SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY

11

REGULATORY AND VISITORIAL POWERS

11

REMITTANCE OF FOREIGN EXCHANGE EARNING

11

PROHIBITED ACTIVITIES

11

Labor Standards

COVERAGE

GOVERNMENT EMPLOYEES MANAGERIAL EMPLOYEES FIELD PERSONNEL DEPENDENT FAMILY MEMBERS GOVERNMENT EMPLOYEES DOMESTIC HELPERS PERSONS IN PERSONAL SERVICE OF ANOTHER WORKERS PAID BY RESULT

HOURS OF WORK

COVERAGE/EXCLUSIONS NORMAL HOURS OF WORK MEAL BREAK WAITING TIME OVERTIME WORK, OVERTIME PAY NIGHT WORK, NIGHT SHIFT DIFFERENTIAL PART-TIME WORK CONTRACT FOR PIECE OF WORK

WAGES

GENERAL CONCEPT WAGE VS. SALARY MINIMUM WAGE MINIMUM WAGE OF WORKERS PAID BY RESULTS COMMISSIONS DEDUCTIONS FROM WAGES PART-TIME DEDUCTIONS FROM WAGES NON-DIMINUTION OF BENEFITS FACILITIES V. SUPPLEMENTS WAGE DISTORTION/RECTIFICATION DIVISOR TO DETERMINE DAILY RATE

REST DAY

WEEKLY REST DAY EMERGENCY REST DAY WORK

HOLIDAY PAY/PREMIUM PAY

HOLIDAYS COVERAGE REGULAR HOLIDAYS HOLIDAY PAY COMPUTATION RIGHT TO HOLIDAY PAY

12

12

12

12

12

13

13

13

13

13

13

13

13

16

16

17

18

18

18

18

18

19

19

20

20

20

20

21

21

21

22

22

22

22

23

23

23

23

23

24

TEACHERS, PIECE WORKERS, SEAFARERS, SEASONAL WORKERS,

 

25

LEAVES

26

SERVICE INCENTIVE LEAVE PAY

 

26

MATERNITY LEAVE

26

PATERNITY LEAVE

27

PARENTAL LEAVE

27

LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN

28

SERVICE CHARGES

 

30

COVERAGE

30

EXCEPTIONS

30

DISTRIBUTION

30

INTEGRATION

30

THIRTEENTH

(13TH)

MONTH

PAY

AND

OTHER

BONUSES

30

RATIONALE

30

COVERAGE

30

EXCLUSIONS/EXEMPTIONS FROM COVERAGE

 

30

NATURE OF THE 13TH MONTH PAY

31

13THE MONTH PAY IN

SPECIAL CASES

 

31

SEPARATION PAY

32

DEFINITION

32

GENERAL RULE

32

EXCEPTION

32

AMOUNT

32

NOTICE OF TERMINATION

32

BASIS OF SEPARATION PAY

32

INCLUSION OF REGULAR ALLOWANCE IN THE COMPUTATION

32

RETIREMENT PAY

 

32

RATIONALE

32

ELIGIBILITY

32

AMOUNT OF RETIREMENT PAY

33

RETIREMENT BENEFITS OF WORKERS WHO ARE PAID BY RESULTS 33

RETIREMENT BENEFIT OF PART-TIME WORKERS

33

TAXABILITY

33

WOMEN WORKERS

34

PROVISIONS AGAINST DISCRIMINATION

34

STIPULATION AGAINST MARRIAGE

34

PROHIBITED ACTS

34

ANTI-SEXUAL HARASSMENT ACT

34

MINOR WORKERS

35

CONSTITUTIONAL BASIS

35

EMPLOYMENT OF CHILDREN FROM 15 TO 18

36

REGULATION OF WORKING HOURS OF A CHILD

36

EMPLOYMENT OF HOUSEHELPERS

36

DEFINITION

36

BENEFITS ACCORDED HOUSEHELPERS

36

TERMINATION

37

EMPLOYMENT OF HOMEWORKERS

37

DEFINITION

37

RIGHTS AND BENEFITS ACCORDED HOMEWORKERS

37

CONDITIONS FOR DEDUCTION FROM HOMEWORKERS EARNINGS 37

APPRENTICES AND LEARNERS

38

APPRENTICES

38

LEARNERS

39

HANDICAPPED

WORKERS

DIFFERENTLY-ABLED

WORKERS

40

DEFINITIONS

40

RIGHTS OF DISABLED WORKERS

40

PROHIBITIONS ON DISCRIMINATION AGAINST DISABLED PERSON

41

INCENTIVES FOR EMPLOYERS

42

Termination of Employment

42

EMPLOYER-EMPLOYEE RELATIONSHIP

42

FOUR-FOLD TEST

42

ECONOMIC DEPENDENCE TEST

43

KINDS OF EMPLOYMENT

43

JOB CONTRACTING

47

DISMISSAL FROM EMPLOYMENT

51

SECURITY OF TENURE

51

CONFLICT WITH MANAGEMENT PREROGATIVES

52

JUST CAUSES

52

AUTHORIZED CAUSES

53

DUE PROCESS

56

RELIEFS FOR ILLEGAL DISMISSAL

57

REINSTATEMENT

57

BACKWAGES

59

PREVENTIVE SUSPENSION

59

DEFINITION

59

CONSTRUCTIVE DISMISSAL

59

Management Prerogative

59

DISCIPLINE

59

TRANSFER OF EMPLOYEES

59

PRODUCTIVITY STANDARD

59

GRANT OF BONUS

60

CHANGE OF WORKING HOURS

60

RULES ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS

60

POST-EMPLOYMENT BAN

60

Social and Welfare Legislation

60

SSS LAW

60

COVERAGE

60

EXCLUSIONS FROM COVERAGE

61

BENEFITS

61

BENEFICIARIES

62

GSIS

62

COVERAGE

62

EXCLUSIONS FROM COVERAGE

62

BENEFITS

62

BENEFICIARIES

63

LIMITED PORTABILITY LAW

63

COVERAGE

63

PROCESS

63

WHY?

63

EMPLOYEE’S COMPENSATION COVERAGE AND WHEN COMPENSABLE

63

COVERAGE

63

EFFECTIVITY

64

WHEN COMPENSABLE

64

Labor Relations Law

64

RIGHT TO SELF-ORGANIZATION

64

BASIS OF RIGHT TO SELF-ORGANIZATION

64

RIGHT TO SELF-ORGANIZATION: A FUNDAMENTAL RIGHT

64

INFRINGEMENT OF THE RIGHT TO SELF-ORGANIZATION

64

SCOPE OF RIGHT TO SELF-ORGANIZATION

64

WORKER QUALIFICATION

65

DEFINITIONS

65

WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING65

WHO CANNOT FORM, JOIN, OR ASSIST LABOR ORGANIZATIONS

66

BARGAINING UNIT

67

VOLUNTARY RECOGNITION

68

CERTIFICATION ELECTION

69

RIGHT TO COLLECTIVE BARGAINING

75

DUTY TO BARGAIN COLLECTIVELY

75

MANDATORY PROVISIONS OF CBA

76

UNION SECURITY

79

UNFAIR LABOR PRACTICE IN COLLECTIVE BARGAINING

80

UNFAIR LABOR PRACTICE (ULP)

81

RIGHT TO PEACEFUL CONCERTED ACTIVITIES

83

83

CONSTITUTIONAL BASIS STATUTORY BASIS FORMS OF CONCERTED ACTIVITIES WHO MAY DECLARE A STRIKE OR LOCKOUT REQUISITES OF A VALID STRIKE REQUISITES OF A VALID LOCKOUT REQUISITES FOR LAWFUL PICKETING ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS

83

83

84

84

85

86

87

87

 

87

ILLEGAL STRIKE

88

INJUNCTIONS

89

Procedure and Jurisdiction

90

LABOR ARBITER

90

JURISDICTION

90

REINSTATEMENT PENDING APPEAL

91

REQUIREMENTS TO PERFECT APPEAL TO NLRC

91

NATIONAL LABOR RELATIONS COMMISSION

91

JURISDICTION

91

EFFECT OF NLRC REVERSAL OF LABOR ARBITERS ORDER OF REINSTATEMENT

91

REMEDIES

91

CERTIFIED CASES

91

BUREAU OF LABOR RELATIONS (BLR) MED ARBITERS

92

JURISDICTION (ORIGINAL AND APPELLATE)

92

NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB)

92

NATURE OF PROCEEDINGS

92

CONCILIATION VS. MEDIATION

92

DOLE REGIONAL DIRECTORS

93

JURISDICTION

93

DOLE SECRETARY

93

VISITORIAL AND ENFORCEMENT POWERS

93

POWER TO SUSPEND EFFECTS OF TERMINATION

93

ASSUMPTION OF JURISDICTION

94

APPELLATE JURISDICTION

94

VOLUNTARY ARBITRATION POWERS

94

GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATORS

94

SUBJECT MATTER OF GRIEVANCE

94

VOLUNTARY ARBITRATOR

94

COURT OF APPEALS

95

RULE 65, RULES OF COURT

95

SUPREME COURT

95

RULE 45, RULES OF COURT

95

PRESCRIPTION OF ACTIONS

95

MONEY CLAIMS

95

ILLEGAL DISMISSAL

96

UNFAIR LABOR PRACTICE

96

OFFENSES PENALIZED BY THE LABOR CODE AND IRR ISSUED PURSUANT THERETO

96

PRESCRIPTIVE PERIOD OF ILLEGAL RECRUITMENT CASES

96

ANNEX A

97

ANNEX B: COMPARISON BETWEEN SSS AND GSIS

99

UP COLLEGE OF LAW

Fundamental Principles and Policies

CONSTITUTIONAL PROVISIONS ARTICLE II, SECS. 9, 10, 11, 13, 14, 18, 20.

Article II, Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Article II, Section 10. The State shall promote social justice in all phases of national development.

General definition Social Justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. [Calalang vs. Williams, 1940]

Welfare State The welfare state concept is found in the constitutional clause on the promotion of social justice to ensure the well-being and economic security of all the people, and in the pledge of protection to labor with specific authority to regulate the relations between landowners and tenants and between labor and capital. [Alalayan vs. National Power Corporation, 1968]

Article II, Section 11. The State values the dignity of every human person and guarantees full respect for human rights.

Article II, Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well- being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Article II, Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

Article II, Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

Limits of Social Justice Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity of interdependence among diverse units of a society, and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life. As partners in nation-building, labor and management need each other to foster productivity and

LABOR LAW

BAR OPERATIONS COMMISSION

economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. [Agabon vs. NLRC, 2004]

Liberty of Contract/Laissez Faire The prohibition to impair the obligation of contracts is not absolute and unqualified. In spite of the constitutional prohibition and the fact that both parties are of full age and competent to contract, it does not necessarily deprive the State of the power to interfere where the parties do not stand upon an equality, or where the public health demands that one party to the contract shall be protected against himself. [Leyte Land Transportation Co. vs. Leyte Farmers & Workers Union, 1948]

The Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissez-faire or relied on pure market forces to govern the economy. [Employees Confederation of the Philippines vs. NWPC, 1991]

ARTICLE III, SECS. 1, 4, 8.

Article III, Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

Due Process Due process requirements are two-fold substantive [dismissal should be for a valid and authorized cause as provided by law] and procedural (due notice and hearing). [Salaw vs. NLRC, 1991]

Labor as Property Right One’s employment is a property right, and the wrongful interference therewith is an actionable wrong. [Sibal vs. Notre Dame of Greater Manila, 1990]

Article III, Section 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.

Article III, Section 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.

ART. XIII, SECS. 1, 2, 3, 13, 14.

Article XIII, Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

To

this

end,

the

State

shall

regulate

the

acquisition,

ownership,

use,

and

disposition

of

property

and

its

increments.

Article XIII, Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

Article XIII, Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,

PAGE 1

UP COLLEGE OF LAW

and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self- organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

Participation in Decision-Making Process Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. [Phil. Airlines Inc. vs. NLRC, 1993]

Management and the Constitution:

Management Function/Prerogative The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. Never should the scale be so tilted if the result is an injustice to the employer. [Phil. Geothermal Inc. vs. NLRC, 1994]

This Court held that the employer’s right to conduct the affairs of his business according to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form. [Torreda vs. Toshiba, 2007]

But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised. [Tinio vs. CA, 2007]

This Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the legitimate business decisions of the employer. xxx However, as expressed in PAL v NLRC, the privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries indispensable to the national interest under Article 263(g)

LABOR LAW

BAR OPERATIONS COMMISSION

of the Labor Code. [University of Immaculate Concepcion Inc v Sec of Labor, 2005]

Article II, Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well- being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Article XIII, Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

CIVIL CODE

ARTICLE 19

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

ARTICLE 1700

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

ARTICLE 1702

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Contracts Under the Civil Code, contracts of labor are explicitly subject to the police power of the state because they are not ordinary contracts but are impressed with public interest. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay. [PAL Employees Savings And Loan Assn., Inc. vs. NLRC, 1996]

Liberal Construction While the terms and conditions of a CBA constitute the law between the parties, it is not however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. [Cirtek Employees Labor Union-FFW v Cirtek Electronics, 2010]

PAGE 2

UP COLLEGE OF LAW

Fair treatment The right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. [General Bank and Trust Co. vs. CA, 1985]

Mutual obligation The employer's obligation to give his workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work, diligence and good conduct. [Firestone Tire And Rubber Co. vs. Lariosa, 1987]

Compliance with law

It is also important to emphasize that the return-to-work

order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as

a duty even against the worker's will. [Sarmiento vs. Tuico,

1988]

Employee's compliance and obedience to employer's orders The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to

the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence

if not lack of due care in the performance of his duties. [PCIB vs. Jacinto, 1991]

LABOR CODE

ARTICLE 3

Art. 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

ARTICLE 4

Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

ARTICLE 166

Art. 166. Policy. The State shall promote and develop a tax- exempt employees’ compensation program whereby employees and their dependents, in the event of work- connected disability or death, may promptly secure adequate income benefit and medical related benefits.

ARTICLE 211

Art. 211. Declaration of Policy. (A) It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes; (b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;

LABOR LAW

 

BAR OPERATIONS COMMISSION

 

(c)

To foster the free and voluntary organization of a strong and united labor movement;

7

(d)

To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;

(e)

To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;

(f)

To ensure a stable but dynamic and just industrial peace; and

(g)

To ensure the participation of workers in decision

and policy-making processes affecting their rights, duties and welfare. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. [As amended by Section 3, Republic Act No. 6715, March 21,

1989]

ARTICLE 212

Art. 212. Definitions.

(a)

"Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code.

(b)

"Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.

(c)

"Board" means the National Conciliation and Mediation Board established under Executive Order No. 126.

(d)

"Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

(e)

"Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

(f)

"Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

(g)

"Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

(h)

"Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

PAGE 3

UP COLLEGE OF LAW

(i)

"Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

(j)

"Bargaining representative" means a legitimate labor organization whether or not employed by the employer.

(k)

"Unfair labor practice" means any unfair labor practice as expressly defined by the Code.

(l)

"Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

(m)

"Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

(n)

"Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.

(o)

"Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

(p)

"Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

(q)

"Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.

(r)

"Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

(s)

"Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against,

LABOR LAW

BAR OPERATIONS COMMISSION

as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment.

ARTICLE 255

Art. 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision- making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils:

Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. [As amended by Section 22, Republic Act No. 6715, March 21,

1989]

ARTICLE 277

Article 277. Miscellaneous provisions. (a) All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

PAGE 4

UP COLLEGE OF LAW

(c)

Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. [As amended by Section 33, Republic Act] No. 6715]

(d)

No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees may be assessed against the filing party, provided that in bargaining deadlock, such fees shall be shared equally by the negotiating parties.

(e)

The Minister of Labor and Employment and the Minister of the Budget shall cause to be created or reclassified in accordance with law such positions as may be necessary to carry out the objectives of this Code and cause the upgrading of the salaries of the personnel involved in the Labor Relations System of the Ministry. Funds needed for this purpose shall be provided out of the Special Activities Fund appropriated by Batas Pambansa Blg. 80 and from annual appropriations thereafter. [Incorporated by Batas Pambansa Bilang 130, August 21, 1981]

(f)

A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of voluntary arbitration in cases involving the interpretation and implementation of the Collective Bargaining Agreement, including the Arbitrator’s fees, and for such other related purposes to promote and develop voluntary arbitration. The Board shall administer the Special Voluntary Arbitration Fund in accordance with the guidelines it may adopt upon the recommendation of the Council, which guidelines shall be subject to the approval of the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen million pesos (P15,000,000.00) shall be provided in the 1989 annual general appropriations acts.

The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council.

The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary Arbitrators, and the Voluntary Arbitration Program. [As amended by Section 33, Republic Act No. 6715, March 21,

1989]

(g)

The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labor-management cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. [Incorporated by Batas Pambansa Bilang 130, August 21, 1981]

(h)

In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this

LABOR LAW

BAR OPERATIONS COMMISSION

Code. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

(i) To ensure speedy labor justice, the periods provided in this Code within which decisions or resolutions of labor relations cases or matters should be rendered shall be mandatory. For this purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing of the last pleading or memorandum required by the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director.

Upon expiration of the corresponding period, a certification stating why a decision or resolution has not been rendered within the said period shall be issued forthwith by the Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the parties.

Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without prejudice to any liability which may have been incurred as a consequence thereof, see to it that the case or matter shall be decided or resolved without any further delay. [Incorporated by Section 33, Republic Act No. 6715, March 21, 1989]

Recruitment and Placement

RECRUITMENT OF LOCAL AND MIGRANT WORKERS

ILLEGAL RECRUITMENT

License vs. Authority

A license is a document issued by the Department of Labor

and Employment (DOLE) authorizing a person or entity to

operate a private employment agency, while an authority is

a document issued by the DOLE authorizing a person or

association to engage in recruitment and placement activities as a private recruitment agency. [Art. 13(d) and (f), Labor Code]

 

License

   

Authority

 

Authorize

an

entity

to

Authorize

an

entity

to

operate

as

a

private

operate

as

a

private

employment agency

 

recruitment entity

When a license is given, one

Does not entitle a private

is

also authorized to collect

recruitment entity to collect

fees

fees.

Entities disqualified from being issued a license

(1)

Travel agencies and sales agencies of airline companies. [Art. 26]

(2)

Officers or members of the Board of any corporation or members in partnership engaged in the business of a travel agency.

(3)

Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer,

PAGE 5

UP COLLEGE OF LAW

LABOR LAW

member of the board of partner of a corporation or partnership engaged in the business of a travel agency. (4) Persons, partnerships or corporations which have derogatory records. (5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 as amended and/or any of his/her relatives within the 4 th civil degree of consanguinity and affinity. [POEA Rules of

2002].

Citizenship requirement (1) Only Filipino citizens or (2) Corporations, partnerships or entities at least seventy- five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. [Art. 27, LC]

See: POEA Rules, Part II, Rule I, Sec. 1(a)

Capitalization requirement All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. [Art. 28, LC]

Based on POEA Rules the following are the substantial capital requirements:

(1) Single proprietorships or partnerships with minimum capitalization of P2,000,000. (2) Corporations with minimum paid-up capital of

P2,000,000.

Non-transferability of license or authority (1) No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority, (2) Nor may such license or authority be transferred, conveyed, or assigned to any other person or entity.

Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. [Art. 29, LC]

SEE: POEA Rules Part II, Rule II, Sec. 7, 8, and 9.

Enforceability of the license - Licensed agencies are prohibited from conducting any recruitment activities of any form outside of the address stated in the license, acknowledged branch or extension office, without securing prior authority from the POEA. [People vs. Buli-e, 2003]

Duration of validity 4 years [POEA Rules of 2002]

Private Employment Agency (PEA) v. Private Recruitment Entity (PRE)

Private Employment Agency

Private Recruitment Agency

Definition

entity

engaged in recruitment and placement of workers for a fee

Any

person

or

Any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or

PAGE 6

BAR OPERATIONS COMMISSION

indirectly, any fee

Requires

License

Authority

Essential elements of illegal recruitment Definition of recruitment and placement “Recruitment and placement" refers to any act of (C-E-C- T-U-H)

(a)

canvassing,

(b)

enlisting,

(c)

contracting,

(d)

transporting,

(e)

utilizing, or

(f)

hiring procuring workers,

And also includes

(a)

referrals,

(b)

contract services,

(c)

promising, or

(d)

advertising for employment, locally or abroad, whether for profit or not

Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. [Labor Code, Art. 13 (b)]

(a)

Any of the acts mentioned above constitutes recruitment and placement.

(b)

The proviso provides for a presumption that a person or entity so described engages in recruitment and placement [See People v. Panis].

What constitutes recruitment The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be presumed to be engaged in the act of recruitment and placement. [People v. Panis, 1988]

Acts of referral The act of referral, which is included in recruitment, is "the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau." Petitioner’s admission that she brought private complainants to the agency whose owner she knows and her acceptance of fees including those for processing betrays her guilt. [Rodolfo vs. People,

2006]

Promising employment The Court finds that accused-appellant was engaged in unlawful recruitment and placement activities. The prosecution established that accused-appellant promised three complainants employment as factory workers and he asked them for money in order to process their papers and procure their passports. Relying completely upon such representations, complainants entrusted hard-earned money to accused-appellant in exchange for what they would later discover to be a vain hope of obtaining employment abroad. It is not disputed that accused- appellant is not authorized nor licensed by the DOLE to

UP COLLEGE OF LAW

LABOR LAW

BAR OPERATIONS COMMISSION

engage in recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellant’s recruitment activities criminal. [People

(g)

To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

vs. Saulo, 2000]

(h)

To fail to file reports on the status of employment,

Note: To determine which law applies, the place of work is the determining factor:

placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the

(1)

If in the Philippines: Labor Code (LC) applies

Secretary of Labor.

(2)

If abroad: Migrant Worker’s Act [R.A. 8042, as amended

(i)

To substitute or alter employment contracts approved

by R.A. 10022].

and verified by the Department of Labor from the time

Illegal recruitment for local workers [governed by the labor code] Simple Illegal Recruitment

(1)

(j)

of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor;

Elements:

To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel

To withhold or deny travel documents from applicant

 

The person charged with the crime must have undertaken recruitment activities defined under Art. 13(b) or prohibited activities defined under Art. 34; and

(k)

agency; and

(2)

workers before departure for monetary or financial

The said person does not have a license or authority to do so. [Art. 38, LC]

Profit or lack thereof is immaterial In 1996, LCL had no approved POEA license to recruit. C.F. Sharp’s accreditation as LCL’s new manning agency was

considerations other than those authorized under this Code and its implementing rules and regulations. [Art. 34, LC]

Offense involving Economic Sabotage (Large-Scale or by a

still pending approval at that time. Yet it entertained applicants for LCL’s vessels, and conducted preparatory interviews. Based on Art. 13 (b), this is a recruitment activity. The fact that C.F. Sharp did not receive any

Syndicate) Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff. qualifying circumstances:

payment during the interviews is of no moment. The act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or authority, not the fact of

(1)

By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one another;

payment that renders the recruitment activity of LCL unlawful. [C.F. Sharp vs. Espanol, 2007]

(2)

In large scale - if committed against 3 or more persons individually or as a group. [Art. 38(b), LC]

Accused must give the impression of ability to send

Illegal recruitment by a syndicate

complainant abroad It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send

(1)

The offender undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code;

complainants abroad for work such that the latter were convinced to part with their money in order to be employed. [People v. Ochoa, 2011]

(2)

He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and

Prohibited practices

(3)

The illegal recruitment is committed by a group of three

It shall be unlawful for any individual, entity, licensee, or holder of authority:

(4)

or more persons conspiring or confederating with one another. [People v. Gallo, 2010]

(a)

To charge or accept, directly or indirectly, any amount

greater than that specified in the schedule of allowable

Illegal recruitment in large scale

fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance;

The acts committed by the accused constituted illegal recruitment in large scale, whose essential elements are the following:

(b)

To furnish or publish any false notice or information or document in relation to recruitment or employment;

(1)

The accused engages in acts of recruitment and placement of workers defined under Article 13(b) of the

(c)

To give any false notice, testimony, information or document or commit any act of misrepresentation for

Labor Code or in any prohibited activities under Article 43 of the Labor Code;

the purpose of securing a license or authority under this Code.

(2)

The accused has not complied with the guidelines issued by the Secretary of Labor and Employment,

overseas; and

(d) To induce or attempt to induce a worker already

particularly with respect to the securing of license or an

 

employed to quit his employment in order to offer him to another unless the transfer is designed to liberate

authority to recruit and deploy workers, either locally or

the worker from oppressive terms and conditions of employment;

(3)

The accused commits the unlawful acts against three or more persons individually or as a group.

(e)

(f)

To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;

To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

Three or more complainants must be in a single case When the Labor Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a group," it must be understood as referring to the number of complainants in each case who are complainants therein, otherwise, prosecutions for single

as referring to the number of complainants in each case who are complainants therein, otherwise, prosecutions

PAGE 7

UP COLLEGE OF LAW

crimes of illegal recruitment can be cumulated to make out a case of large scale illegal recruitment.

In other words, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. [People vs. Reyes, 1995]

LABOR LAW

BAR OPERATIONS COMMISSION

more persons shall be deemed so engaged. [Sec. 6, RA 8042 as amended]

Other prohibited acts It shall likewise include the following acts, whether

committed by any person, whether a non-licensee, non- holder, licensee or holder of authority:

Illegal recruitment vs estafa Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is

One convicted for IR may still be convicted of estafa

(a)

To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge

necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa by false pretenses or fraudulent acts

any amount greater than that actually received by him as a loan or advance;

under Article 315, paragraph 2(a) of the Revised Penal Code. In the same manner, a person acquitted of illegal

(b)

To furnish or publish any false notice or information or document in relation to recruitment or employment;

recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary. [Rosita Sy vs. People of the Philippines, 2010]

In People v. Cortez the Court explained that: “In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and convicted separately of

(c)

To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA;

illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of the accused is crucial for conviction. Conviction

(d)

To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

for offenses under the Labor Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It follows that one's acquittal of the crime of estafa will not necessarily result in

(e)

To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization;

his acquittal of the crime of illegal recruitment in large scale, and vice versa.” [People v. Ochoa, 2011; People v. Ocden, 2011]

(f)

To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

Illegal recruitment for migrant workers [governed by RA 8042, as amended by, RA 10022] Simple Illegal Recruitment 1st type.(1) Person charged undertakes any recruitment activity as

2nd type.

(g)

To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment;

defined in Art.13 (b) of the Labor Code; and (2) Said person does not have a license or authority to do

(h)

To substitute or alter to the prejudice of the worker,

so.

employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and

(1)

Person charged commits any of the enumerated acts

including the period of the expiration of the same

under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. (2) It is immaterial whether he is a holder or not of any

 

without the approval of the Department of Labor and Employment;

 

license or authority

Definition Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether

(i)

For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency;

for profit or not, when undertaken by non-licensee or non- holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or

(j)

To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations;

PAGE 8

UP COLLEGE OF LAW

(k)

Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment;

(l)

Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and

(m)

To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:

(1)

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;

(2)

Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons;

(3)

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;

(4)

Impose a compulsory and exclusive 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;

(5)

Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker 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/shipowners where the latter shoulder the cost of such trainings;

(6)

For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and

(7)

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. [Sec. 6, RA 8042 as amended]

MWA expands the definition of illegal recruitment The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided stiffer

LABOR LAW

BAR OPERATIONS COMMISSION

penalties, especially for those that constitute economic sabotage. [People v. Ocden, 2011]

RA 8042 as amended by RA

10022

[ People v. Ocden, 2011 ] RA 8042 as amended by RA 10022 Labor Code Applicability

Labor Code

v. Ocden, 2011 ] RA 8042 as amended by RA 10022 Labor Code Applicability Local Workers

Applicability

Local Workers

Migrant Workers

Acts Punishable

Art. 13(b)

Art. 34

Art.

Labor Code

13(b)

Prohibited acts in Sec. 6

Who can be Punished

Non-licensee

Non-licensee

Non-licensee

Licensee/Non-

licensee

Offense involving Economic Sabotage (Large-Scale or by a Syndicate) Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

Liabilities and penalties for illegal recruitment Illegal Recruitment Involving Local Workers.The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein;

(a)

Any licensee or holder of authority found violating or causing another to violate any provision of this Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000, or both such imprisonment and fine, at the discretion of the court;

(b)

Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court;

(c)

If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings;

In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives. [Art. 39, LC]

PAGE 9

UP COLLEGE OF LAW

Illegal recruitment involving migrant workers.

(a)

Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than

twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).

(b)

The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined therein. Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

(c)

Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).

If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.

In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training school or medical clinic. [Sec. 7, RA 8042 as amended by RA 10022]

Common rules on liability

(1)

Employees of a company corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. E.g. In

this case the appellant was both the APSC Vice- President-Treasurer and the Assistant General Manager. She was a high corporate officer who had direct participation in the management, administration, direction and control of the business of the corporation, and is thus liable under Sec. 6 of RA 8042. The terms “control, management or direction” broadly cover all phases of business operation, including the aspects of administration, marketing and finances, among others. [People vs. Sagayaga, 2004].

(2)

Local Employment Agency is solidarily liable with foreign principal. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. [Becmen Service Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009]

(3)

If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. [Becmen Service

LABOR LAW

BAR OPERATIONS COMMISSION

Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009]

(4) Foreign employer shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation

Theory of imputed knowledge This is a doctrine in agency which states that the principal is chargeable with and bound by the knowledge of or notice to his agent received while the agent was acting as such. Simply put, notice to the agent is notice to the principal. Since the local employment agency is considered the agent of the foreign employer, the principal, knowledge of the former of existing labor and social legislation in the Philippines is binding on the latter. Consequently, notice to the former of any violation thereof is notice to the latter.

Joint and Several Liability of Agent and Principal

Sec. 1. Requirements for Issuance of License.- Every applicant for license to operate a private employment agency or manning agency shall submit a written application together with the following requirements:

(f) A verified undertaking stating that the applicant:

xxx

(2) Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of license; (3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation; (4) Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of recruited workers; and (5) Shall assume full and complete responsibility for all acts of its officials, employees and representatives done in connection with recruitment and placement; [POEA Rules, Book II, Rule II, Sec. 1 (f)]

Common Rules on Illegal Recruitment [Local or Overseas] Venue: A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city:

(1) where the offense was committed or (2) where the offended party actually resides at the time of the commission of the offense. [Sec. 9, R.A. 8042 [this part was not amended by R.A. 10022]].

Prescriptive Periods:

(1) Simple Illegal Recruitment 5 years (2) Illegal Recruitment involving Economic Sabotage 20 years. [Sec. 12, R.A. 8042 (this part was not amended by R.A, 10022)].

Pre-Termination of Contract of Migrant Worker In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement of his placement fee and the deductions made with interest at twelve percent (12%) per annum,

PAGE 10

UP COLLEGE OF LAW

LABOR LAW

plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. [Sec. 10, R.A. 8042, as amended by R.A. 10022]

Rule before Serrano: 3-month salary rule applies The employment contract involved in the instant case covers a two-year period but the overseas contract worker actually worked for only 26 days prior to his illegal dismissal. Thus, the three months’ salary rule applies [Flourish Maritime Shipping v. Almanzor, G.R. No. 177948, March 14, 2008].

Serrano ruling: invalidated the 3-month salary cap The issue in this case is the constitutionality of the last clause of Sec.10 of RA 8042:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.

The Court held that said clause is unconstitutional for being an invalid classification, in violation of the equal protection clause. [Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614, March 24, 2009]

DIRECT HIRING

General Rule: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. [Article 18 of the Labor Code].

Exceptions:

(1)

(2) International organizations; (3) Such other employees as may be allowed by the Sec. of Labor; (4) Name hirees those individuals who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA. [Part III, Rule III of the POEA Rules Governing Overseas Employment as amended in 2002]

Members of the diplomatic corps;

REGULATION AND ENFORCEMENT Note: See also 2002 POEA Rules Governing the Recruitment and Employment of Land-based Overseas Workers

SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY

The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Department of Labor, the Overseas Employment Development Board, and the National Seamen Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. [Article 35, LC]

The acts prohibited under Article 34 are grounds for suspension or cancellation of license. Note that they likewise constitute illegal recruitment under R.A. 8042 as amended by R.A. 10022.

PAGE 11

BAR OPERATIONS COMMISSION

Who can suspend or cancel the license?

(1)

(2) POEA Administrator

DOLE Secretary

The power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. [People v. Diaz, 259 SCRA 441 (1996)].

REGULATORY AND VISITORIAL POWERS OF THE DOLE SECRETARY

See [Art. 35, LC]

Regulatory powers The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. [Art. 36, LC]

Visitorial powers The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violations of any provisions of this Title. [Art. 37, LC]

REMITTANCE OF FOREIGN EXCHANGE EARNING

It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign earnings to their families, dependents, and/or beneficiaries in the country [Art. 22, LC]

Under Executive Order No. 857, the amount of one’s salary required to be remitted depends on the type or nature of work performed by the employee. The following are the percentages of foreign exchange remittance required from various kinds of migrant workers:

(1) Seaman or mariner 80% of their basic salary (2) Workers for Filipino contractors and construction companies 70% (3) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging 70% (4) All other professional workers whose employment contracts do not provide for free board and lodging facilities 50% (5) Domestic and other service workers 50% (6) All other workers not falling under the aforementioned categories 50% (7) Performing artists 50%

The following individuals, however, are exempted from the mandatory remittance requirement:

(1) The immediate family members, dependents or beneficiaries of migrant workers residing with the latter abroad; (2) Filipino servicemen working within US military installations; (3) Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

PROHIBITED ACTIVITIES

It shall be unlawful for any individual, entity, licensee, or holder of authority:

UP COLLEGE OF LAW

LABOR LAW

BAR OPERATIONS COMMISSION

(a)

To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance;

government employees, including employees of GOCCs, are governed by the Civil Service rules and regulations, not by the Labor Code. But this exclusion DOES NOT refer to employees of government agencies and government corporations that are incorporated under the Corporation

(b)

To furnish or publish any false notice or information or document in relation to recruitment or employment;

Code.

(c)

To give any false notice, testimony, information or

MANAGERIAL EMPLOYEES

(d)

document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code.

Definition "Managerial Employees" Refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision

Characteristics of managerial employees

To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment;

thereof, and to other officers or members of the managerial staff. [Art. 82, LC]

(e)

To influence or to attempt to influence any person or entity not to employ any worker who has not applied

To engage in the recruitment or placement of workers

(b)

Managerial employees are covered [by the exemption] if they have the following characteristics:

(f)

for employment through his agency;

in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. (2) They customarily and regularly direct the work of

(g)

To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

two or more employees therein. (3) They have the authority to hire or fire employees of lower rank; or their suggestions and

(h)

To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such

To substitute or alter employment contracts approved

recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

(i)

other matters or information as may be required by the Secretary of Labor.

Requisites for managerial staff to be covered under the exception

(1) The primary duty consists of the performance of work

(j)

and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor;

Officers or members of a managerial staff if they perform the following duties and responsibilities:

directly related to management policies of their employer;

To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel

(2)

Customarily and regularly exercise discretion and independent judgment; and

agency; and

(3)

(a)

Regularly and directly assist a proprietor or a

(k)

To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this

managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or

Code and its implementing rules and regulations. [Art.

(b)

execute under general supervision work along

34, LC]

specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and

 

(4)

Who do not devote more than 20 percent of their hours

Labor Standards

COVERAGE General rule: Shall apply to employees in all establishments and undertakings whether for profit or not. [Art. 82, LC]

Exceptions (NOT Covered) GMFF-DPR:

worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. [IRR, Bk III, Rule 1, Sec. 2 (b) & (c): Exemption]

The definition of ‘managerial employees’ in Article 82 covers more people than that in Article 212 (m) as Article 82 also includes managerial staff. In effect, managerial

(1)

Government employees [Art. 82; Art. 76]

employees in Article 82 includes supervisors, but Article

(2)

Managerial Employees including members of the managerial staff [Art. 82]

212(m) does not.

(3)

Field Personnel [Art. 82]

It follows that under Book V, supervisors are allowed to

(4)

Members of the family of the employer who are dependent on him for support [Art. 82];

form, join or assist a labor union. Supervisors are not, however, entitled to the benefits under Book III Articles 83

(5)

Domestic helpers and persons in personal service of another [Art. 141]

through 96, being part of the exemption of managerial employees as defined in Article 82. [Azucena]

(6)

Workers who paid by result as determined by DOLE regulation [Art. 82].

FIELD PERSONNEL

GOVERNMENT EMPLOYEES

The

terms

and

conditions

of

employment

of

all

PAGE 12

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and

UP COLLEGE OF LAW

LABOR LAW

whose actual hours of work in the field cannot be determined with reasonable certainty. [Art. 82, LC]

Field Personnel are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty.

Legal Test: Field personnel The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an EE's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such EE's time and performance is constantly supervised by the employer. [Union of Filipro Employees v. Vivar, 1992]

“Actual hours work in the field…” is to be read in conjunction with Rule IV, Book III of the Implementing Rules. Therefore field personnel are EEs whose time and performance is unsupervised by the employer. [Salazar v. NLRC, 1996]

If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel, despite the fact that they are performing work away from principal office of EE. [Auto Bus Transport Systems, Inc. v. Bautista, 2005]

The fishermen, although performing non-agricultural work away from petitioner’s business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel’s patron or master. Hence, the fishermen are not “field personnel”. [Mercidar Fishing Corporation v. NLRC,

1998]

DEPENDENT FAMILY MEMBERS

Workers who are family members of the employer, and who are dependent on him for their support, are outside the coverage of this Title on working conditions and rest periods.

DOMESTIC HELPERS

"Domestic or household service" shall mean service in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household, including services of family drivers. [Art. 141, LC]

PERSONS IN PERSONAL SERVICE OF ANOTHER

The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein:

Domestic servants and persons in the personal service of another if they perform such services in the employer’s home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer’s household. [Bk III, Rule 1, Sec. 2(d) of the IRR: Exemption]

PAGE 13

BAR OPERATIONS COMMISSION

Exclusivity of function required Note that the definition contemplates a domestic servant who is employed in the employer’s home to minister exclusively to the personal comfort and enjoyment of the employer’s family. [Azucena]

Thus, it has been held that the following personnel are NOT domestic employees:

(1) House personnel hired by a ranking company official but paid by the company itself to maintain a staff house provided for the official. [Cadiz v. Philippine Sinter Corp, NLRC Case No. 7-1729, cited by Azucena] (2) A family cook, who is later assigned to work as a watcher and cleaner of the employer’s business establishment, becomes an industrial worker entitled to receive the wages and benefits flowing from such status. [Villa v. Zaragosa and Associates, OP Decision No. 0183, cited by Azucena].

WORKERS PAID BY RESULT

The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein:

Workers who are paid by results, including those who are paid on piece-work, “takay,” “pakiao” or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. [Bk III, Rule 1, Sec. 2 (e) of the IRR]

The philosophy underlying the exclusion of piece workers from the 8-hour law is that said workers are paid depending upon the work they do irrespective of the amount of time employed in doing said work. [Red vs. Coconut Products Ltd., v. CIR, 1966]

HOURS OF WORK

COVERAGE/EXCLUSIONS

Note: Please see previous section (Coverage) which deals with the general rules of coverage and exclusions for the applicability of the Conditions of Employment provisions in Book III of the Labor Code.

NORMAL HOURS OF WORK

General Rule: 8-Hour Labor Law The normal hours of work of any employee shall not exceed eight (8) hours a day. [Art. 83, LC]

The law prescribes a maximum and not a minimum. Thus, part-time work, or a day’s work less than eight hours, is not prohibited.

Exception to the 8-Hour Law: Work Hours of Health Personnel Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.

For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians,

UP COLLEGE OF LAW

pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. [Art. 38, LC]

Note:

personnel. [Azucena]

Medical

secretaries

are

also

considered

clinic

Compensable Hours of Work Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work. [Art. 84, LC]

General principles in determining if time is considered as hours worked According to Book III, Rule 1, Sec. 4, “the following principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule:” (1) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (2) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest

LABOR LAW

BAR OPERATIONS COMMISSION

which states that "when the work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely shall not be counted", finds no application in the present case, where the laborer's work is continuous, and during the time that he is not working he cannot leave and completely rest owing to the place and nature of his work. [State Marine Corporation v. Cebu Seamen’s Association, 1963]

On call An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call.

An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call. [IRR, Book III, Rule 1, Sec. 5(b)]

Inactive due to work interruptions The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest. [IRR, Book III, Rule 1, Sec. 4(d)]

completely and may leave his work place to go elsewhere, whether within or outside the premises of his work place. (3) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (4) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either:

Work interruption due to brownouts Brownouts of short duration, but not exceeding 20 minutes, shall be treated as hours worked, whether used productively by the employees or not. If they last more than 20 minutes, the time may not be treated as hours worked if the employees can leave their workplace or go elsewhere whether within or without the work premises; or the employees can use the time effectively for their own interest. In this case, the employer may extend the working hours beyond the regular schedule on that day to compensate for the loss of productive man-hours without

(a)

if the imminence of the resumption of work requires the employee’s presence at the place of work, or

being liable for overtime pay. [Policy Instruction No. 36, May 22, 1978]

(b)

if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest.

Note: The time during which an employee is inactive by

the place of work or if the interval is too brief to be utilized

Work after normal hours

Rest period – short duration or “coffee break” Rest periods of short duration during working hours shall be counted as hours worked. [Art. 84, par. 2, LC]

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. [Bk III, Rule 1, Sec. 7, par. 2 of IRR]

Preliminary and Postliminary Activities Preliminary [before work] and postliminary [after work] activities are deemed performed during working hours if such activities are controlled or required by the employer and are pursued necessarily and primarily for the employer’s benefit.

reason of work interruptions beyond his control is considered working time, either if the imminence of the resumption of work requires the employee’s presence at

effectively and gainfully in the employee’s own interest. [Book III, Rule 1 Sec. 4-c OR]

If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all the time spent for such work shall be considered as hours worked if the work was with the knowledge of his employer or immediate supervisor. [IRR, Book III, Rule 1, Sec. 4(c)]

Rest period An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place. [IRR Sec 4 (b)]

Continuous work The provision of section 1 of Commonwealth Act No. 444,

PAGE 14

Lectures, meetings, trainings Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if ALL of the following conditions are met:

(1) Attendance is outside of the employee’s regular working hours; (2) Attendance is in fact voluntary; and (3) The employee does not perform any productive work during such attendance. [IRR, Book III, Rule 1, Sec. 6]

UP COLLEGE OF LAW

Note:

(1) Attendance in lectures, meetings, and training periods sanctioned by the employer are considered hours worked. (2) Attendance in CBA negotiations or grievance meeting is compensable hours worked. (3) Attendance in hearings in cases filed by the employee is NOT compensable hours worked. (4) Participation in strikes is NOT compensable working time.

LABOR LAW

BAR OPERATIONS COMMISSION

the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters to be on board. It could not have been the purpose of the law to require their employers to pay them overtime pay even when they are not actually working. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they are on board and cannot leave ship beyond the regular eight working number of hours, but whether they actually rendered service in excess of said number of hours. [Cagampan, et. al. v. NLRC, G.R. Nos. 85122-24, March 2, 1991].

Idle time The idle time that an employee may spend for resting & dining which he may leave the spot or place of work though not the premises of his employer, is not counted as working time only where the work is broken or is not continuous. [National Development Co. v. CIR, 1962]

Hours worked: Proof of work Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. [Lagatic v. NLRC, 1998]

A

laborer need not leave the premises of the factory, shop

Hours worked: Burden of Evidence

Compressed Work Week (CWW)

The total hours of work, however, shall not exceed 12 hours

or

boat in order that his period of rest shall not be counted,

When an employer alleges that his employee works less

it being enough that he "cease to work", may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted. [Luzon Stevedoring Co. v. Luzon Marine Department Union, 1957]

Travel time (1) Travel from home to work An employee who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home-to-work travel which is NOT worktime except:

than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence. [Prangan v. NLRC, et. al., G.R. No. 126529, April 15, 1998].

Note: SEE DOLE Advisory No. 02, Series of 2004 Under the CWW scheme, the normal workday goes beyond eight hours without the corresponding overtime premium.

a day or 48 hours a week, or the employer is obliged to pay the worker the overtime premium in excess of said work hours.

(a)

When called to travel during emergency;

(b)

When travel is done through a conveyance furnished by the employer;

Conditions for CWW (1) The CWW scheme is undertaken as a result of an

Effects of CWW

(c)

Travel is done under vexing and dangerous circumstances;

express and voluntary agreement of majority of the covered employees or their duly authorized

(d)

Travel is done under the supervision and control of

representatives. This agreement may be expressed

the employer. (2) Travel that is all in the day’s work Time spent by an

through collective bargaining or other legitimate workplace mechanisms of participation such as labor

employee in travel from jobsite to jobsite during the workday, must be counted as hours worked. Where an employee is required to report at a meeting place to receive instructions or to perform other work there, the travel from the designated place to the workplace is part of the day’s work. (3) Travel away from home - Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is worktime when it cuts across the employee’s workday. The time is hours worked not only on regular working hours but also during the corresponding hours on non-working days. [Department of Labor Manual].

management councils, employee assemblies or referenda. (2) In firms using substances, chemicals and processes or operating under conditions where there are airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to employees’ health and safety, there must be a certification from an accredited health and safety organization or practitioner from the firm’s safety committee that work beyond eight hours is within threshold limits or tolerable levels of exposure, as set in the OSHS. (3) The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the

Semestral Break of Private School Teachers Regular full-time teachers are entitled to salary during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ control. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. [University of the Pangasinan Faculty Union v. University of Pangasinan, No. L-63122, Feb. 20, 1984].

Work Hours of Seamen Seamen are required to stay on board of their vessels by

adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory. [DOLE Advisory No. 02-04].

(1) Unless there is a more favorable practice existing in the firm, work beyond eight hours will not be compensable by overtime premium provided the total number of hours worked per day shall not exceed twelve (12) hours. In any case, any work performed beyond 12 hours a day or 48 hours a week shall be subject to overtime premium. (2) Consistent with Art. 85 of the LC, employees under a

PAGE 15

UP COLLEGE OF LAW

CWW scheme are entitled to meal periods of not less than 60 minutes. There shall be no impairment of the right of the employees to rest days as well as to holiday pay, rest day pay or leaves in accordance with law or applicable collective bargaining agreement or company practice. (3) Adoption of the CWW scheme shall in no case result in diminution of existing benefits. Reversion to the normal eight-hour workday shall not constitute a diminution of benefits.

Rationale D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the employees will derive from the adoption of a compressed workweek scheme, thus:

The compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of transportation fares for at least one (1) day a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday without the employer being obliged for pay overtime premium compensation for work performed in excess of eight (8) hours on weekdays, in exchange for the benefits abovecited that will accrue to the employees. [Bisig Manggagawa sa Tryco v. NLRC, et al., 2008]

MEAL BREAK

Regular meal Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. [Art. 85, LC]

Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals. [IRR, Book III, Rule 1, Sec. 7]

Shorter meal period when allowed (less than 1 hour, but not less than 20 min) A meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:

(1) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (2) Where the establishment regularly operates not less than sixteen (16) hours a day; (3) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and (4) Where the work is necessary to prevent serious loss of perishable goods. [IRR, Book III, Rule 1, Sec. 7]

Synthesis of the Rules General Rule: Meal periods are NOT compensable.

LABOR LAW

BAR OPERATIONS COMMISSION

Exception: It becomes compensable:

(1) Where the lunch period or meal time is predominantly spent for the employer’s benefit. [Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and Social Legislation] (2) Meal periods of 1 hour is deemed compensable when the employee is on continuous shift. [National Development Co. v. CIR, G.R. No. L-15422, Nov. 30,

1962].

(3) Shortened meal period of less than 1 hour (say, 30 minutes) must be compensable. [Sec. 7, Rule I, Book III of the IRR].

Note: To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a REST PERIOD and is considered working time.

Exception to the Exemption: Shortened meal breaks upon the employees’ request – NOT compensable. The employees themselves may request that the meal period be shortened so that they can leave work earlier than the previously established schedule. [Drilon: Letter to Kodak Philippines, Nov. 27, 1989; also Cilindro: BWC-WHSD Opinion No. 197, s. 1998].

Conditions for shortened meal breaks upon employee’s request. (1) The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal period; (2) There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectivity of the shortened meal period; (3) The work of the employees does not involve strenuous physical exertion and they are provided with adequate “coffee breaks” in the morning and afternoon. (4) The value of the benefits derived by the employees from the proposed work arrangement is equal to or commensurate with the compensation due them for the shortened meal period as well as the overtime pay for 30 minutes as determined by the employees concerned; (5) The overtime pay of the employees will become due and demandable if ever they are permitted or made beyond 4:30pm; and (6) The effectivity of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor.

Jurisprudence:

(1) During meal period where the laborers are required to stand by for emergency work, or where said meal hour is not one of complete rest, such period is considered overtime. [Pan-American Airways v. Pan-American Employees Association, 1961] (2) The eight-hour work period does not include the meal break. Employees are not prohibited from going out of the premises as long as they return to their posts on time. [Phil. Airlines, Inc. v. NLRC, 1999]

WAITING TIME

Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.[IRR, Book III, Rule 1, Sec. 5(a)] (1) Waiting time spent by the employee shall be considered as working time if waiting is an integral part

PAGE 16

UP COLLEGE OF LAW

of his work or the employee is required or engaged by the employer to wait. (2) An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. [Sec. 5, Rule I, Book III, Labor Code Implementing Rules and Regulation]

Legal test: Whether waiting time constitutes working time depends upon the circumstances of each particular case. The facts may show that the employer was engaged or was waiting to be engaged. The controlling factor is whether waiting time spent in idleness is so spent predominantly for the employer’s benefit or for the employee’s. [Azucena citing Armour v. Wantock]

OVERTIME WORK, OVERTIME PAY

Note: SEE ALSO: IRR of Labor Code, Sec. 7-10

Definition Overtime compensation is additional pay for service or work rendered or performed in excess of eight hours a day by employees or laborers covered by the Eight-hour Labor Law. [National Shipyard and Steel Corp. v. CIR, 1961].

Rationale There can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntary agreed hours of labor he is supposed to do. [PNB v. PEMA, 1982].

LABOR LAW

BAR OPERATIONS COMMISSION

(5) Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. [Art. 89, LC]

Overtime pay does not preclude night differential pay When the tour of duty of a laborer falls at nighttime [between 10:00pm and 6:00am], the receipt of overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night while the other is payment for the excess of the regular eight-hour work. [Naric v. Naric Workers Union, 1959].

Overtime Rate based on Regular Wage Base of Computation: Regular wage or means regular base pay; it excludes money received in different concepts such as Christmas bonus and other fringe benefits. [Bisig ng Manggagawa ng Philippine Refining Co. v. Philippine Refining Co, G.R. No. L-27761, Sept. 30, 1981].

BUT when the overtime work was performed on the employee’s rest day or on special days or regular holidays [Art. 93 and 94], the premium pay, must be included in the computation of the overtime pay. [See p. 19 of Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, 2006].

Synthesis of Rules (1) Demandable only if the employer had knowledge and consented to the overtime work rendered by the employee.

Overtime on ordinary working day Overtime work. Work may be performed beyond eight (8)

Exception: Express approval by a superior NOT a requisite to make overtime compensable:

hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to

(a)

If the work performed is necessary, or that it benefited the company; or

his regular wage plus at least twenty-five percent (25%) thereof. [Art. 87, LC]

(b)

That the employee could not abandon his work at

Overtime work on holiday or rest day Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. [Art. 87, LC]

the end of his eight-hour work because there was no substitute ready to take his place. [Manila Railroad Co. v. CIR, G.R. No. L-4614, July 31, 1952].

Note: However, the Court has also ruled that a claim for overtime pay is NOT justified in the absence of a written authority to render overtime after office hours during Sundays and holidays. [Global Incorporated v. Atienza]

Computation of additional compensation For purposes of computing overtime and other additional

(2) Compensation for work rendered in excess of the eight

remuneration as required by this Chapter, the "regular

(8)

normal working hours in a day.

wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the

(a)

For ordinary days, additional 25% of the basic hourly rate.

employer. [Art. 90, LC]

(b)

For rest day/special day/holiday, additional 30% of

Emergency or overtime Any employee may be required by the employer to perform overtime work in any of the following cases:

(1) When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; (2) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; (3) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; (4) When the work is necessary to prevent loss or damage to perishable goods; and

the basic hourly rate. (3) Not unless a day is a rest day, the given day is considered an ordinary day. (4) Undertime does NOT offset overtime

Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. [Art. 88, LC]

Jurisprudence:

(1) NO waiver of overtime pay - The right to overtime pay cannot be waived. Labor Code [Art. 87] requires that an employee be paid all overtime compensation notwithstanding any agreement to work for a lesser wage. Consequently, such an agreement or "waiver" will not prevent an employee from recovering the

PAGE 17

UP COLLEGE OF LAW

difference between the wages paid the employee and the overtime compensation he or she is entitled to receive. [Cruz v. Yee Sing, G.R. No. L-12046. Oct. 1959].

Exception: When the waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay, the waiver MAY be permitted. [Meralco Workers Union v. MERALCo, G.R. No. L-11876, May 29, 1959]

LABOR LAW

BAR OPERATIONS COMMISSION

following midnight. The premium pay for the night shift also starts or ends at midnight. However, the employment contract, company policy or CBA may provide that in the case of night shift workers, daysincluding special days and regular holidaysshall begin on the night before a calendar day.

PART-TIME WORK

Definition

A single, regular or voluntary form of employment with

(2)

Composite or Package Pay NOT per se illegal

hours of work substantially shorter than those considered

Composite or “package pay” or “all-inclusive salary” is

as

normal

in

the

establishment.

[International

Labor

 

Organization]

 

an arrangement where the employee’s salary includes the overtime pay. In other words, the overtime pay is built-in.

The conditions for validity of the arrangement are:

This excludes those forms of employment which, although referred to as part-time work, are in particular, irregular, temporary or intermittent employment, or in cases where

(a)

There is a clear written agreement knowingly and freely entered by the employee; and

hours of work have been temporarily reduced for economic, technical or structural reasons.

(b)

The mathematical result shows that the agreed legal

wage rate and the overtime pay, computed separately, are equal to or higher than the separate amounts

The wage and benefits of part-time worker are in proportion to the number of hours worked.

legally due. [Damasco v. NLRC, G.R. No. 115755, December 4, 2000].

CONTRACT FOR PIECE OF WORK

 

NIGHT WORK, NIGHT SHIFT DIFFERENTIAL

Note: See R.A. No. 10151

Night worker ‘Night worker’ means any employed person whose work requires performance of a substantial number of hours of night work which exceed a specified limit. This limit shall be fixed by the Sec of Labor after consulting the workers’ representatives/labor organizations and employers. [Art. 154, RA 10151]

A contract for the delivery at a certain price of an article

which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work. [Article 1467, CC]

WAGES

GENERAL CONCEPT

Night shift differential The additional compensation of 10% of an employees regular wage for each hour of work performed between 10pm and 6am. [Art. 86, LC]

Definition (1) It is the remuneration or earnings, however designated, capable of being expressed in terms of money, (2) whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the

 

Coverage

same, (3) which is payable by an employer to an employee

This Rule (On night shift differential) covers all employees except:

(4) under a written or unwritten contract of employment for work done or to be done, or for services rendered or

(1)

Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations;

to be rendered and (5) includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board,

(2)

Those of retail and service establishments regularly employing not more than five (5) workers;

lodging, or other facilities customarily furnished by the employer to the employee

(3)

Domestic helpers and persons in the personal service of another;

(6) Fair and reasonable value - shall not include any profit to the employer, or to any person affiliated with the

(4)

Managerial employees as defined in Book Three of this Code;

employer. [Art. 97(f)]

(5)

Field personnel and other employees whose time and performance is unsupervised by the employer including

“No work no pay” principle

those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

Rest days (night-off) Night shift employees are entitled to a weekly night-off [usually Saturday evening] or a weekly rest period of 24 hours beginning at the start of the night shift.

Work on special days Night shift employees are also entitled to the premium pay on special days and holidays. These days are reckoned as calendar days which start at midnight and end at the

General Rule: a fair day’s wage for a fair day’s labor or no work no pay

Exception: when the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from working. [Sugue v Triumph International (2009) and Aklan Electric Cooperative, Inc. vs. NLRC (2000)]

“Equal Work for Equal Pay” Principle Employees working in the Philippines, if they are performing similar functions and responsibilities under similar working conditions should be paid equally. If an employer accords employees the same position and rank, the presumption is that these employees perform equal

PAGE 18

UP COLLEGE OF LAW

LABOR LAW

work. [International School Alliance of Educators v.