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Labor I Midterms Reviewer


Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


I. Introduction to Labor Law
1. Labor: Concept
a. In its general sense labor is a physical toil, though it does not necessarily include the application of skill, thus there is skiled
and unskilled labor
b. In its technical sense labor is the workforce; it includes the unemployed as long as they are potential workers; it also
includes the professionals
2. Labor Law
a. Definition
b. Justification: Social Justice
Consti, Art. II Sec. 10. The State shall promote social justice in all phases of national development.
Consti Art. XIII Sec. 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.
Consti Art. XIII Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based
on freedom of initiative and self-reliance.
Consti Art. XIII Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, 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.
Tirazona v. Phil EDS. The policy of social justice is not intended to countenance wrongdoing simply because it is committed
by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the
poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege.
Social justice cannot be permitted to be a refuge of scoundrels any more than can equity be an impediment to the punishment
of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless andf not
simply because they happen to be poor. // Equity is available only in the absence of law and not as its replacement. Equity as
an exceptional extenuating circumstance does not favor, nor may it be used to reward, the indolent, or the wrongdoer, for that
matter.
Ha Yuan v. NLRC. (re: social justice, same doctrine) Separation pay may be accordingly awarded provided that the dismissal
does not fall under either of 2 circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on the
employees moral character. // Misconduct is improper or wrongful conduct. It is the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere
error of judgment.
c. Foundation or basis: Police Power of the State
SLMCEA-AFW v. NLRC. While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be
reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety and
the general welfare of the people.
d. Ultimate Goal: Industrial Peace
Consti Art. XIII Sec. 3 Par. 3. 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.
Calalang v. Williams. Social Justice is neither communism, nor despotism, nor atomis, 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. Social justice means the promotion of the welfare of all the people, the adoption be
the government of measures calculated to insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in t he interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the existence of all
governments on the time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on the
recognition of the necessity of interdependence among diverse and diverse units of 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, consistent with the
fundamental paramount objective of the state of promoting health, comfort and quiet of all persons, and of bringing about the
greatest good to the greatest number.
e. Management Prerogative
Consti Art. XIII Sec. 3, supra.
Industrial Timber Corp v. Ababon. Work is a necessity that has economic significance deserving legal protection. The social
justice and protection to labor provisions in the constitution dictate so. On the other hand, employers are also accorded rights
and privileges to assure self-determination and independence, and reasonable return of capital. This mass of privileges
comprises the management prerogatives. Although they may be broad and unlimited in scope, the State has the right to
determine whether an employers privilege is exercised in a manner that complies with the legal requirements and does not
offend the protected rights of labor. One of the rights accorded an employer is the right to close an establishment or
undertaking. The only limitation being that the closure must not be for the purpose of circumventing the provisions on
termination of employment embodied in the Labor Code.
f. Balancing of Interests
Hotel Enterprises of the Phil v. NUWHRAIN (Hyatt). The constitution afford full protection to labor, but the policy is not to
be blindly followed at the expense of capital. Always, the interests of both sides must be balanced in light of the evidence
adduced and the peculiar circumstances surrounding each case.
3. Classification
a. Labor Standards minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work,
cost-of-living allowance, other monetary and welfare benefits, including occupational, safety and health standards
2
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


The law which sets out the minimum terms and conditions and benefits of employment that employers provide or comply
with and to which employees are entitled to as a matter of right
b. Labor Relations defines the status, rights and duties and the institutional mechanisms that govern the individual and
collective interactions of employers, employees or their representatives
One may think of labor standards as the materials or the substance to be processed while labor relations is the
mechanism that processes the substance
c. Welfare Legislation includes laws that provide particular kinds of protection or benefit to society or segments thereof in
furtherance of social justice.
In that sense, labor laws are necessarily social legislation
Labor laws are social legislation, but not all social legislation is labor laws.
4. Basis
a. Economic basis
b. Legal basis
1. 1987 constitution
Art. II, Sec. 5. The maintenance of peace and order, the protection of life, liberty, and property, and promotion of the
general welfare are essential for the enjoyment by all the people of the blessings of democracy.
Art. II, Sec. 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.
Art. II, Sec. 10. The State shall promote social justice in all phases of national development.
Art. II, Sec. 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
Art. II, Sec. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality
before the law of women and men.
Art. II, Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare.
Art. III, Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.
Art. XIII, Sec. 1, supra.
Art. XIII, Sec. 3, supra.
Art. XIII, Sec. 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.
1935 Consti, Art XIV, Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and
shall regulate the relations between the landowner and tenant, and between labor and capital in industry and in
agriculture. The State may provide for compulsory arbitration.
1973 Consti Art. II Sec. 6. The State shall promote social justice to ensure the dignity, welfare, and security of all the
people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private
property, and equitably diffuse property ownership and profits.
1973 Consti Art. II Sec. 9. The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relation 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. The State may provide for compulsory arbitration
PNB v. Cabansag. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with
the basic public policy of the state to 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.
(a) Right to security of Tenure
Casimiro v. Stern Real Estate, Inc. Article 283 of the Labor Code authorizes retrenchment as one of the valid causes
to dismiss employees as a measure to avoid or minimize business losses. Retrenchment is the termination of
employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted
to by the management during periods of business recession, industrial depression, or seasonal fluctuations, or during
lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the
introduction of new methods or more efficient machinery, or of automation. Simply put, it is a reduction in
manpower, a measure utilized by an employer to minimize losses incurred in the operation of its business.
2. Civil code
CC, 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
CC, 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for
the same.
CC, 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage
CC, 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.
CC, 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the
public.
Innodata Phils. V. Quejada-Lopez. Court has recognized the validity of fixed-term employment contracts, but it has
consistenly emphasized that when the circumstances of a case show that the periods were imposed to block the
acquisition of security of tenure, they should be struck down for being contrary to law, morals, good customs, public order
or public policy.
3. Labor Code and Omnibus Rules Implementing the Labor Code
4. International conventions, Recommendations
3
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


Consti, Art. II, Sec. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted
principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom,
cooperation, and amity with all nations.
International School Alliance of Educators v. Quisumbing. Public policy abhors inequality and discrimination.
International law, which springs from general principles of law, likewise proscribes discrimination. The Philippines,
through its Constitutions, has incorporated this principle as part of its national laws.
5. The Labor Code
a. Brief history
The writing of the Labor Code began in 1968 under then Minister of Labor Blas Ople
The objective was not merely to consolidate the then existing pieces of labor legislation but also to reorient them to the
needs of economic development and justice
Information had to be gathered from different departments and bureaus of the government, UP Law, IBP, NEDA, etc.
Ratified on April 28, 1973, signed into law on May 1, 1974 and took effect on Nov. 1, 1974, because it is designed to be a
dynamic and growing body of laws which will reflect continually the lessons of practical application and experience.
b. Name of decree.
LC, 1. This Decree shall be known as the "Labor Code of the Philippines".
c. Date of effectivity
LC, 2. This Code shall take effect six (6) months after its promulgation.
d. Declaration of basic policy
LC, 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.
e. Construction in favor of labor
LC, 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.
CC, 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.
Dealco Farms v. NLRC. It is a well-settled rule that in controversies between laborer and his master, doubts reasonably
arising from the evidence should be resolved in the formers favor. Having failed to substantiate its allegation on the
relationship between the parties, we stick to the well-settled rule.
Peaflor v. Outdoor Clothing. While the letter states that Peaflors resignation was irrevocable, it does not necessarily
signify that it was also voluntarily executed. The fact of filing a resignation alone does not shift the burden of proving that the
employees dismissal was for a just and valid cause from the employer to the employee. As ruled in Mora v. Avesco, should the
employer interpose the defense of resignation, it is still incumbent upon the employer to prove that the employee voluntarily
resigned.
f. Labor Arbiters jurisdiction over labor cases
LC, 217. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and
lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including those of persons in domestic or household service, involving
an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by
Section 9, Republic Act No. 6715, March 21, 1989).
Del Valle, Jr. v. Dy. The Court of Appeals has jurisdiction to entertain original actions for certiorari under Rule 65, ROC,
including those in which the jurisdiction of any lower court is in issue. The nature of an action and the subject matter thereof,
as well as which court or agency of the government has jurisdiction over the same, are determined by the material allegations
of the complaint in relation to the law involved and the character of the reliefs prayed for, whether or not the complainant is
entitled to any or all of such reliefs.
g. Technical rules, not binding
LC, 221. Technical rules not binding and prior resort to amicable settlement. - In any proceeding before the Commission or any
of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and
intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means
to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the
interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by
legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to
exercise complete control of the proceedings at all stages. Any provision of law to the contrary notwithstanding, the Labor
Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first
hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction. (As amended by Section 11,
Republic Act No. 6715, March 21, 1989).
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


Huntington Steel v. NLRC. Technical rules are not binding in labor cases and are not to be applied strictly if the result would
be detrimental to the working man. Private respondents should not be faulted because in filing their complaint, they merely
filled up blanks in the complaint form provided for them; they should not be punished for whatever defects found in the form.
Liberality in Application of Rules
Industrial Timber v. Ababon. In any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in the courts of law or equity shall not be controlling. Under LC, 281(c), the NLRC may, in the exercise
of its appellate powers, correct, amend, or waive any error, defect or irregularity whether in substance or in form. It is the
spirit and intention of the Labor Code that the Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process
h. Rules and Regulations/Limitation
LC, 5. Rules and regulations. - The Department of Labor and other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation.
KMP v. NLRC. Section I (k) of PD 1123, IRR is null and void as it contravenes the statutory authority granted to the Secretary
of Labor.
i. Applicability
LC, 6. Applicability. - All rights and benefits granted to workers under this Code shall, except as may otherwise be provided
herein, apply alike to all workers, whether agricultural or non-agricultural. (As amended by Presidential Decree No. 570-A,
November 1, 1974).
LC, 276. Government employees. - The terms and conditions of employment of all government employees, including employees
of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their
salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no
reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the
adoption of this Code.
Consti, Art IX B Sec. 2(1). The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters.
PNOC v. NLRC. The doctrine that employees of GOCCs, whether created by special law or formed as subsidiaries under the
General Corporation Law are governed by the Civil Service Law and not by the Labor Code has been supplanted by the present
Constitution. Thus, the test in determining whether a GOCC is subject to the Civil Service Law is the manner of its creation,
such that government corporations created by special charter are subject to its provisions while those incorporated under the
General Corporation Law are not within its coverage.
j. Enforcement and Sanctions
LC, 217(a)(2-4). 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral,
exemplary and other forms of damages arising from the employer-employee relations
LC, 217 (a) 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement
LC, 128. Visitorial and enforcement power.
(a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers,
shall have access to employers records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or
matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship
of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall
have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in
the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of
the labor employment and enforcement officer and raises issues supported by documentary proofs which were not
considered in the course of inspection. (As amended by Republic Act No. 7730, June 2, 1994). An order issued by the
duly authorized representative of the Secretary of Labor and Employment under this Article may be appealed to the
latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting
of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and
Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by Republic Act
No. 7730, June 2, 1994).
(c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit
or department of an establishment when non-compliance with the law or implementing rules and regulations poses
grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing
shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted
or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of work or suspension of operation.
(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the
Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority granted
under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or
otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.
(e) Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after appropriate
administrative investigation, be subject to summary dismissal from the service.
(f) The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain such
employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.
LC, 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested party, the Regional
Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or
household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint
does not include a claim for reinstatement: Provided further, That the aggregate money claims of each employee or
househelper does not exceed Five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve
the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of,
the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such
sum not paid to the employee or househelper because he cannot be located after diligent and reasonable effort to locate him
within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used
exclusively for the amelioration and benefit of workers. Any decision or resolution of the Regional Director or hearing officer
pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar
days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the
appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules. The
Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and
other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As
amended by Section 2, Republic Act No. 6715, March 21, 1989).
LC, 288. Penalties. - Except as otherwise provided in this Code, or unless the acts complained of hinge on a question of
interpretation or implementation of ambiguous provisions of an existing collective bargaining agreement, any violation of the
provisions of this Code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand
Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than three months nor more
than three years, or both such fine and imprisonment at the discretion of the court. In addition to such penalty, any alien
found guilty shall be summarily deported upon completion of service of sentence. Any provision of law to the contrary
notwithstanding, any criminal offense punished in this Code, shall be under the concurrent jurisdiction of the Municipal or City
Courts and the Courts of First Instance. (As amended by Section 3, Batas Pambansa Bilang 70).
LC, 289. Who are liable when committed by other than natural person. - If the offense is committed by a corporation, trust, firm,
partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such
corporation, trust, firm, partnership, association or entity.
LC, 290. Offenses. - Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in
three (3) years. All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year
from accrual of such unfair labor practice; otherwise, they shall be forever barred.
LC, 291. Money claims. - All money claims arising from employer-employee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. All
money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this
Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance with the
implementing rules and regulations of the Code; otherwise, they shall be forever barred. Workmens compensation claims
accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be
filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall
forever be barred. The claims shall be processed and adjudicated in accordance with the law and rules at the time their causes
of action accrued.
LC, 292. Institution of money claims. - Money claims specified in the immediately preceding Article shall be filed before the
appropriate entity independently of the criminal action that may be instituted in the proper courts. Pending the final
determination of the merits of money claims filed with the appropriate entity, no civil action arising from the same cause of
action shall be filed with any court. This provision shall not apply to employees compensation case which shall be processed
and determined strictly in accordance with the pertinent provisions of this Code.
Consti Art. III Sec 11. Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to
any person by reason of poverty.
Consti Art. III Sec 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or
administrative bodies.
6. Work Relationship
a. Definition: Employer and Employee
LC, 97(a). "Person" means an individual, partnership, association, corporation, business trust, legal representatives, or any
organized group of persons.
LC, 97(b). "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an
employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or
controlled corporations and institutions, as well as non-profit private institutions, or organizations.
LC, 97(c). "Employee" includes any individual employed by an employer.
LC, 167 (f). "Employer" means any person, natural or juridical, employing the services of the employee.
LC, 167 (g). "Employee" means any person compulsorily covered by the GSIS under Commonwealth Act Numbered One
hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as
casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act
Numbered Eleven hundred sixty-one, as amended.
LC, 167 (h). "Person" means any individual, partnership, firm, association, trust, corporation or legal representative thereof
LC, 212 (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
LC, 212 (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.
b. Employer-Employee Relationship
1. Factor/s Test
SGV v. de Raedt. To determine the existence of an ER-EE relationship, case law has consistently applied the 4-fold test:
(a) the selection and engagement of the employee; (b) payment of wages; (c) power of dismissal; and (d) the employers
power to control the employee on the means and methods by which the work is accomplished. The so-called control test
is the most important indicator of the presence or absence of an ER-EE relationship.
6
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


TAPE, INC v. Servana. It has been held that in a business establishment, an ID card is usually provided not just as a
security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.
(a) Control Test v. Economic reality test
Orozco v. CA. aside from the control test, the Court has also used the economic reality test. The economic realities
prevailing within an activity or between the parties are examined, taking into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate
when, as in this case, there is no written agreement or contract on which to base the relationship. In our jurisdiction,
the benchmark of economic reality in analyzing possible employment relationships for purposes of applying the
Labor Code ought to be the economic dependence of the worker on his employer.
2. Piercing the corporate veil
Pamplona Planatation v. Tinghil. Where badges of fraud exist, where public convenience is defeated, where a wrong is
sought to be justified thereby, or where a separate corporate identity is used to evade financial obligations to employees
or to third parties, the notion of separate legal entity should be set aside and the factual truth upheld.
c. Independent Contract and Labor-only Contractor
LC, 106. Contractor or subcontractor. - Whenever an employer enters into a contract with another person for the performance
of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with
the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to
employees directly employed by him. The Secretary of Labor and Employment may, by appropriate regulations, restrict or
prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as
differentiations within these types of contracting and determine who among the parties involved shall be considered the
employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code. There is "labor-
only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person
are performing activities which are directly related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.
LC, 107. Indirect employer. - The provisions of the immediately preceding article shall likewise apply to any person,
partnership, association or corporation which, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
LC, 108. Posting of bond. - An employer or indirect employer may require the contractor or subcontractor to furnish a bond
equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the
contractor or subcontractor, as the case may be, fail to pay the same.
LC, 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every employer or indirect
employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For
purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
D.O. 18-02, D.O. 10-97: (see attached)
PBC v. NLRC. A labor-only contractor is a mere agent of the employer and the employees of the former enjoy the status of
being as if they were directly employed by the employer. An undertaking by a labor supplier which does not involve
performance of a specific job, but to provide its client with a certain number of people to the bank to carry out the work of
messengers, which is directly related to a banks operations, makes the labor supplier a mere labor only contractor or
placement agency.
Coke v. dela Cruz. In labor-contracting, there is really no contracting and no contractor; there is only the employers
representative who gathers and supplies people for the employer; labor-contracting is therefore a misnomer.
Aliviado v. P&G. (same doctrine, see DOs)
d. Registration of Contractors
D.O. 18-02 Sec. 11. Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit the
contracting out of labor through appropriate regulations, a registration system to govern contracting arrangements and to be
implemented by the Regional Offices is hereby established. The registration of contractors and subcontractors shall be
necessary for purposes of establishing an effective labor market information and monitoring. Failure to register shall give rise
to the presumption that the contractor is engaged in labor-only contracting.
D.O. 18-02 Sec. 12. Requirements for registration. - A contractor or subcontractor shall be listed in the registry of contractors
and subcontractors upon completion of an application form to be provided by the DOLE. The applicant contractor or
subcontractor shall provide in the application form the following information:

(a) The name and business address of the applicant and the area or areas where it seeks to operate;
(b) The names and addresses of officers, if the applicant is a corporation, partnership, cooperative or union;
(c) The nature of the applicant's business and the industry or industries where the applicant seeks to operate;
(d) The number of regular workers; the list of clients, if any; the number of personnel assigned to each client, if any and the
services provided to the client;
(e) The description of the phases of the contract and the number of employees covered in each phase, where appropriate;
and
(f) A copy of audited financial statements if the applicant is a corporation, partnership, cooperative or a union, or copy of the
latest ITR if the applicant is a sole proprietorship.

The application shall be supported by: (a) A certified copy of a certificate of registration of firm or business name from the
Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI), Cooperative Development Authority
(CDA), or from the DOLE if the applicant is a union; and (b) A certified copy of the license or business permit issued by the
local government unit or units where the contractor or subcontractor operates.

The application shall be verified and shall include an undertaking that the contractor or subcontractor shall abide by all
applicable labor laws and regulations.
7
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


Effect of Non-Compliance
D.O. 18-02 Sec. 11 par. 3, supra.
Sandoval Shipyards v. Pepito.however final it may become, the decision in a certification election case, by the very
nature of such proceeding, is not such as to foreclose all further dispute as to the existence, or non-existence of an ER-EE
relationship. The CA also found out that the so-called subcontractors do not have a license to engage in subcontracting.
e. Liability of Indirect Employer
Eparwa v. Liceo de Cagayan. The security guards immediate recourse for the payment of the increase of their minimum
wage is with their direct employer while the latter can claim reimbursement from the principal.

II. Labor Standards Law


1. Employment policies, recruitment and placement of workers and agencies
a. Employment policies
LC, 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.
LC, 12(a) Statement of objectives. - It is the policy of the State: To promote and maintain a state of full employment through
improved manpower training, allocation and utilization
LC, 12(f). Statement of objectives. - It is the policy of the State: To strengthen the network of public employment offices and
rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve
national development objectives
Consti Art II Sec. 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.
Consti Art XIII Sec. 3 par 1.
RA 8042 (as amended by 10022) Sec 2(a). In the pursuit of an independent foreign policy and while considering national
sovereignty, territorial integrity, national interest and the right to self-determination paramount in its relations with other
states, the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino
migrant workers, in particular, continuously monitor international conventions, adopt/be signatory to and ratify those that
guarantee protection to our migrant workers, and endeavor to enter into bilateral agreements with countries hosting overseas
Filipino workers.
RA 8042 (as amended by 10022) Sec 2(b). The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. Towards this end, the State shall
provide adequate and timely social, economic and legal services to Filipino migrant workers.
RA 8042 (as amended by 10022) Sec 2(c). While recognizing the significant contribution of Filipino migrant workers to the
national economy through their foreign exchange remittances, the State does not promote overseas employment as a means to
sustain economic growth and achieve national development. The existence of the overseas employment program rests solely
on the assurance that the dignity and fundamental human rights and freedoms of the Filipino citizens shall not, at any time, be
compromised or violated. The State, therefore, shall continuously create local employment opportunities and promote the
equitable distribution of wealth and the benefits of development.
RA 8042 (as amended by 10022) Sec 2(g). The State recognizes that the most effective tool for empowerment is the
possession of skills by migrant workers. The government shall provide them free and accessible skills development and
enhancement programs. Pursuant to this and as soon as practicable, the government shall deploy and/or allow the
deployment only of skilled Filipino workers
RA 8042 (as amended by 10022) Sec 4. Deployment of Migrant Workers. - The State shall allow the deployment of overseas
Filipino workers only in countries where the rights of Filipino migrant workers are protected. The government recognizes any
of the following as a guarantee on the part of the receiving country for the protection of the rights of overseas Filipino
workers: (a) It has existing labor and social laws protecting the rights of workers, including migrant workers; (b) It is a
signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers,
including migrant workers; and (c) It has concluded a bilateral agreement or arrangement with the government on the
protection of the rights of overseas Filipino Workers: Provided, That the receiving country is taking positive, concrete
measures to protect the rights of migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c)
hereof.
In the absence of a clear showing that any of the aforementioned guarantees exists in the country of destination of the
migrant workers, no permit for deployment shall be issued by the Philippine Overseas Employment Administration (POEA).
The members of the POEA Governing Board who actually voted in favor of an order allowing the deployment of migrant
workers without any of the aforementioned guarantees shall suffer the penalties of removal or dismissal from service with
disqualification to hold any appointive public office for five (5) years, Further, the government official or employee responsible
for the issuance of the permit or for allowing the deployment of migrant workers in violation of this section and in direct
contravention of an order by the POEA Governing Board prohibiting deployment shall be meted the same penalties in this
section.
For this purpose, the Department of Foreign Affairs, through its foreign posts, shall issue a certification to the POEA,
specifying therein the pertinent provisions of the receiving country's labor/social law, or the
convention/declaration/resolution, or the bilateral agreement/arrangement which protect the rights of migrant workers.
The State shall also allow the deployment of overseas Filipino workers to vessels navigating the foreign seas or to
installations located offshore or on high seas whose owners/employers are compliant with international laws and standards
that protect the rights of migrant workers.
The State shall likewise allow the deployment of overseas Filipino workers to companies and contractors with
international operations: Provided, That they are compliant with standards, conditions and requirements, as embodied in the
employment contracts prescribed by the POEA and in accordance with internationally-accepted standards.
RA 8042 (as amended by 10022) Sec 5. Termination or Ban on Deployment. - Notwithstanding the provisions of Section 4
hereof, in pursuit of the national interest or when public welfare so requires, the POEA Governing Board, after consultation
with the Department of Foreign Affairs, may, at any time, terminate or impose a ban on the deployment of migrant workers.
b. Employment agencies
(a) Private sector agencies and entities
8
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


1. Parties
i. Worker
LC, 13(a). "Worker" means any member of the labor force, whether employed or unemployed.
RA 8042 (as amended by 10022) Sec 3(a). "Overseas Filipino worker" refers to a person who is to be engaged,
is engaged or has been engaged in a remunerated activity in a state of which he or she is not a citizen or on
board a vessel navigating the foreign seas other than a government ship used for miliatry or non-commercial
purposes or on an installation located offshore or on the high seas; to be used interchangeably with migrant
worker.
ii. Private employment agency
LC, 13(c) "Private fee-charging employment agency" means any person or entity engaged in recruitment and
placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both.
LC, 13(d) "License" means a document issued by the Department of Labor authorizing a person or entity to
operate a private employment agency.
LC, 12(f). Statement of objectives. - It is the policy of the State: To strengthen the network of public employment
offices and rationalize the participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives
LC, 14(a). Employment promotion. - The Secretary of Labor shall have the power and authority: To organize and
establish new employment offices in addition to the existing employment offices under the Department of Labor
as the need arises
iii. Private recruitment entity
LC, 13(e) "Private recruitment entity" means any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or
employers.
LC, 13(f) "Authority" means a document issued by the Department of Labor authorizing a person or association
to engage in recruitment and placement activities as a private recruitment entity.
LC, 12 (f), supra
LC, 14(a), supra
2. Recruitment and placement
i. Local employment
LC, 13 (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals, contract services, promising or 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.
ii. Overseas employment
RA 8042 (as amended by 10022) Sec 6. Definition. - For purposes of this Act, 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 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 more
persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or holder of authority:(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 any amount greater than that actually
received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in
relation to recruitment or employment; (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; (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; (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; (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; (h) 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; (i) To substitute or alter to the
prejudice of the worker, 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 including the period of the
expiration of the same without the approval of the Department of Labor and Employment; (j) 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; (k) 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; (l) Failure to actually deploy a contracted worker without valid reason as
determined by the Department of Labor and Employment; (m) 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 (n) To allow a non-
Filipino citizen to head or manage a licensed recruitment/manning agency.
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.
9
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


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 fpr
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.
The persons criminally liable for the above offenses are the principals, accomplices and accessories. In
case of juridical persons, the officers having ownership, control, management or direction of their business who
are responsible for the commission of the offense and the responsible employees/agents thereof shall be liable.
In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the
Secretary of Labor and Employment, the POEA Administrator or their duly authorized representatives, or any
aggrieved person may initiate the corresponding criminal action with the appropriate office. For this purpose,
the affidavits and testimonies of operatives or personnel from the Department of Labor and Employment, POEA
and other law enforcement agencies who witnessed the acts constituting the offense shall be sufficient to
prosecute the accused.
In the prosecution of offenses punishable under this section, the public prosecutors of the Department
of Justice shall collaborate with the anti-illegal recruitment branch of the POEA and, in certain cases, allow the
POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such cases shall
be entitled to receive additional allowances as may be determined by the POEA Administrator.
The filing of an offense punishable under this Act shall be without prejudice to the filing of cases
punishable under other existing laws, rules or regulations
3. Allowed and protected entities
i. Allowed private agencies and entities
LC, 16. Private recruitment. - Except as provided in Chapter II of this Title, no person or entity other than the
public employment offices, shall engage in the recruitment and placement of workers.
LC, 25. Private sector participation in the recruitment and placement of workers. - Pursuant to national
development objectives and in order to harness and maximize the use of private sector resources and initiative
in the development and implementation of a comprehensive employment program, the private employment
sector shall participate in the recruitment and placement of workers, locally and overseas, under such
guidelines, rules and regulations as may be issued by the Secretary of Labor.
LC, 18. Ban on direct-hiring. - No employer may hire a Filipino worker for overseas employment except through
the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may be allowed by the Secretary of Labor is exempted
from this provision.
LC, 12(f), supra
ii. Prohibited business agencies and entities
LC, 16. Private recruitment. - Except as provided in Chapter II of this Title, no person or entity other than the
public employment offices, shall engage in the recruitment and placement of workers.
LC, 18. Ban on direct-hiring. - No employer may hire a Filipino worker for overseas employment except through
the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may be allowed by the Secretary of Labor is exempted
from this provision.
LC, 25. Private sector participation in the recruitment and placement of workers. - Pursuant to national
development objectives and in order to harness and maximize the use of private sector resources and initiative
in the development and implementation of a comprehensive employment program, the private employment
sector shall participate in the recruitment and placement of workers, locally and overseas, under such
guidelines, rules and regulations as may be issued by the Secretary of Labor.
LC, 26. Travel agencies prohibited to recruit. - Travel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and placement of workers for overseas employment
whether for profit or not.
1) Travel agencies
LC, 26. Travel agencies prohibited to recruit. - Travel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and placement of workers for overseas
employment whether for profit or not.
POEA Rules, Part II Rule I, Sec. 2.
2) Direct hiring
LC, 18. Ban on direct-hiring. - No employer may hire a Filipino worker for overseas employment except
through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the
diplomatic corps, international organizations and such other employers as may be allowed by the Secretary
of Labor is exempted from this provision.
Exception: LC, 18, 2nd sentence
10
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


Hornales v. NLRC. It is sad enough that proverty has impelled many of our countrymen to seek greener
pastures in foreign lands. But what is more lamentable is when a Filipino recruiter, after sending his
unlettered countrymen to a foreign land and letting them suffer inhuman treatment in the hands of an
abusive employer, connives with the foreign employer in denying them their rightful compensation.
4. Government techniques of regulation private recruitment
i. Licensing
a. Citizenship
LC, 27. Citizenship requirement. - Only Filipino citizens or 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.
POEA Rules Part II Rule I Sec. 1(a). Qualifications. Only those who possess the following qualifications
may be permitted to engage in the business of recruitment and placement of Filipino workers: Filipino
citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of
which is owned and controlled by Filipino citizens.
b. Capitalization
LC, 28. Capitalization. - 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.
POEA Rules Part II Rule I Sec. 1(b). A minimum capitalization of Two Million Pesos (P2,000,000.00) in
case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos
(P2,000,000.00) in case of a corporation; Provided that those with existing licenses shall, within four years
from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million
Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every year.
c. Validity of license
POEA Rules Part II Rule II Sec. 5. Provisional License. Applicants for new license shall be issued a
provisional license which shall be valid for a limited period of one (1) year within which the applicant
should be able to comply with its undertaking to deploy 100 workers to its new principal. The license of a
complying agency shall be upgraded to a full license entitling them to another three years of operation.
Non-complying agencies will be notified of the expiration of their license.
POEA Rules Part II Rule II Sec. 6. Validity of the License. Except in case of a provisional license, every
license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or
suspended for violation of applicable Philippine law, these rules and other pertinent issuances. Such license
shall be valid only at the place/s stated therein and when used by the licensed person, partnership or
corporation.
d. Non-transferability
LC, 29. Non-transferability of license or authority. - 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 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.
POEA Rules Part II Rule II Sec. 7. Non-Transferability of License. No license shall be transferred, conveyed
or assigned to any person, partnership or corporation. It shall not be used directly or indirectly by any
person, partnership or corporation other than the one in whose favor it was issued. In case of death of the
sole proprietor and to prevent disruption of operation to the prejudice of the interest of legitimate heirs,
the license may be extended upon request of the heirs, to continue only for the purpose of winding up
business operations.
POEA Rules Part II Rule II Sec. 8. Change of Ownership/Relationship of Single Proprietorship or
Partnership. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment shall cause the automatic revocation of the license. A change in the relationship of the partners
in a partnership duly licensed to engage in overseas employment which materially interrupts the course of
the business or results in the actual dissolution of the partnership shall likewise cause the automatic
revocation of the license.
POEA Rules Part II Rule II Sec. 9. Upgrading of Single Proprietorship or Partnerships. License holders
which are single proprietorships or partnerships may, subject to the guidelines of the Administration,
convert into corporation for purposes of upgrading or raising their capabilities to respond adequately to
developments/changes in the international labor market and to enable them to better comply with their
responsibilities arising from the recruitment and deployment of workers overseas. The approval of merger,
consolidation or upgrading shall automatically revoke or cancel the licenses of the single proprietorships,
partnerships or corporations so merged, consolidated or upgraded.
e. Registration fees
LC, 30. Registration fees. - The Secretary of Labor shall promulgate a schedule of fees for the registration of
all applicants for license or authority.
POEA Rules Part II Rule II Sec. 4. Payment of Fees and Posting of Bonds. Upon approval of the application,
the applicant shall pay a license fee of P50,000.00. It shall submit an Escrow Agreement in the amount of
P1,000,000.00, confirmation of escrow deposit with an accredited reputable bank and a surety bond of
P100,000.00 from a bonding company acceptable to the Administration and accredited with the Insurance
Commission.
Agencies with existing licenses shall, within four years from effectivity hereof, increase their Escrow
Deposit to One Million Pesos. The bonds and escrow shall answer for all valid and legal claims arising from
violations of the conditions for the grant and use of the license, and/or accreditation and contracts of
employment. The bonds and escrow shall likewise guarantee compliance with the provisions of the Code
and its implementing rules and regulations relating to recruitment and placement, the Rules of the
Administration and relevant issuances of the Department and all liabilities which the Administration may
impose. The surety bonds shall include the condition that notice to the principal is notice to the surety and
11
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


that any judgment against the principal in connection with matters falling under POEAs/NLRCs
jurisdiction shall be binding and conclusive on the surety. The surety bonds shall cover the validity period
of the license.
f. Bonds
LC, 31. Bonds. - All applicants for license or authority shall post such cash and surety bonds as determined
by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and
regulations, and terms and conditions of employment as may be appropriate.
POEA Rules Part II Rule II Sec. 4, supra.
ii. Workers fees/filing fees/license fees (placement fee)
LC, 32. Fees to be paid by workers. - Any person applying with a private fee-charging employment agency for
employment assistance shall not be charged any fee until he has obtained employment through its efforts or has
actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing
the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees.
POEA Rules Part II Rule V Sec. 3. Fees/Costs Chargeable to the Workers. Except where the prevailing system in
the country where the worker is to be deployed, either by law, policy or practice, do not allow the charging or
collection of placement and recruitment fee, a landbased agency may charge and collect from its hired workers a
placement fee in an amount equivalent to one month salary, exclusive of documentation costs. Documentation
costs to be paid by the worker shall include, but not limited to, expenses for the following: a. Passport; b.
NBI/Police/Barangay Clearance; c. Authentication; d. Birth Certificate; e. Medicare; f. Trade Test, if necessary; g.
Inoculation, when required by host country; h. Medical Examination fees. In the event that the recruitment
agency agrees to perform documentation services, the worker shall pay only the actual cost of the document
which shall be covered by official receipts.
iii. Reports/employment information
LC, 33. Reports on employment status. - Whenever the public interest requires, the Secretary of Labor may direct
all persons or entities within the coverage of this Title to submit a report on the status of employment, including
job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other
employment data.
LC, 14(d). Employment promotion. - The Secretary of Labor shall have the power and authority: To require any
person, establishment, organization or institution to submit such employment information as may be prescribed
by the Secretary of Labor.
LC, 34(h). Prohibited practices. - It shall be unlawful for any individual, entity, licensee, or holder of authority:
(h) To fail to file 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.
RA 8042(as amended by 10022) Sec. 6(h), supra.
iv. Illegal recruitment: simple/syndicated
LC, 34. Prohibited practices. - It shall be unlawful for any individual, entity, licensee, or holder of authority:
(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;
(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;
(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 this Code.
(d) 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;
(e) 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;
(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;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
(h) To fail to file 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.
(i) To substitute or alter employment contracts approved 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;
(j) 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 agency; and
(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules and
regulations.
LC, 38(a). Illegal recruitment. - (a) Any recruitment activities, including the prohibited practices enumerated
under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or any law
enforcement officer may initiate complaints under this Article.
LC, 38(b). Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage and shall be penalized in accordance with Article 39 hereof. Illegal recruitment is
deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined
under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.
RA 8042(as amended by 10022) Sec. 6, supra.
12
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


RA 8042(as amended by 10022) Sec. 7. Penalties. - (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.
RA 8042(as amended by 10022) Sec. 8. It shall be unlawful for any official or employee of the Department of
Labor and Employment, the Philippine Overseas Employment Administration, or the Overseas Workers Welfare
Administration, or the Department of Foreign Affairs, or other government agencies involved in the
implementation of this Act, or their relatives within the fourth civil degree of consanguinity or affinity, to engage,
directly or indirectly, in the business of recruiting migrant workers as defined in this Act. The penalties shall be
imposed upon them.
RA 8042(as amended by 10022) Sec. 9. A criminal action arising from illegal recruitment as defined herein
shall be filed with the Regional Trial Court of the province or city where the offense was committed or where the
offended party actually resides at the same time of the commission of the offense: Provided, That the court
where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts. Provided,
however, That the aforestated provisions shall also apply to those criminal actions that have already been filed
in court at the time of the effectivity of this Act.
RA 8042(as amended by 10022) Sec. 10. Money Claims. - Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage.
Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the
global services industry.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The performance bond to de filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that
may be awarded to the workers. 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.
Such liabilities shall continue during the entire period or duration of the employment contract and
shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the
said contract.
Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages
under this section shall be paid within thirty (30) days from approval of the settlement by the appropriate
authority.
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 if his placement fee and the deductions made with interest at 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.
In case of a final and executory judgment against a foreign employer/principal, it shall be automatically
disqualified, without further proceedings, from participating in the Philippine Overseas Employment Program
and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgment award.
Noncompliance with the mandatory periods for resolutions of case provided under this section shall
subject the responsible officials to any or all of the following penalties: (a) The salary of any such official who
fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the
said official complies therewith; (b) Suspension for not more than ninety (90) days; or (c) Dismissal from the
service with disqualification to hold any appointive public office for five (5) years.
Provided, however, That the penalties herein provided shall be without prejudice to any liability which
any such official may have incurred under other existing laws or rules and regulations as a consequence of
violating the provisions of this paragraph.
RA 8042(as amended by 10022) Sec. 11. The preliminary investigations of cases under this Act shall be
terminated within a period of thirty (30) calendar days from the date of their filing. Where the preliminary
investigation is conducted by a prosecution officer and a prima facie case is established, the corresponding
information shall be filed in court within twenty-four (24) hours from the termination of the investigation. If the
preliminary investigation is conducted by a judge and a prima facie case is found to exist, prosecution officer
within forty-eight (48) hours from the date of receipt of the records of the case.
RA 8042(as amended by 10022) Sec. 12. Illegal recruitment cases under this Act shall prescribe in five (5)
years: Provided, however, That illegal recruitment cases involving economic sabotage as defined herein shall
prescribe in twenty (20) years.
a. When undertaken by non-lecensees, non-holders
b. Prohibited practices
PP v. Domingo. To prove illegal recruitment in large sacle, the prosecution must prove: (1) the person
charged undertook a recruitment activity or any prohibited practice; (2) s/he did not have the license to
13
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


engage in such; (3) s/he committed the acts against 3 or more persons individually or as a group. // It
suffices that appellant promised or offered employment for a fee to the complainants to warrant his
conviction (doesnt matter if for profit or not)
PP v. Gallo. (same doctrine)
NB: Art. 38 (c) declared unconstitutional per Salazar v. Achacoso, relying on Consti, Art III. Sec. 2.
v. Enforcement powers
a. Regulatory power
LC, 35. Suspension and/or cancellation of license or authority. - The Minister 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 Ministry of Labor, the Overseas Employment Development Board, or for
violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions.
LC, 36. Regulatory power. - 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.
b. Rule-making power
LC, 36. Regulatory power. - 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.
c. Visitorial power
LC, 35. Suspension and/or cancellation of license or authority. - The Minister 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 Ministry of Labor, the Overseas Employment Development Board, or for
violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions.
LC, 37. Visitorial Power. - 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 violation of any provisions of this Title.
vi. POEA Standard Employment Contact: Disability benefits
Abante v. KJGS. Clearly, the above provision does not preclude the seafarer from getting a second opinion as to
his condition for purposes of claiming disability benefits, for as held in NYK-Fil Ship Management v. Talavera:
This provision substantially incorporates the 1996 POEA Standard Employment Contract. Passing on the 1996
POEA Standard Employment Contract, this Court held that [w]hile it is the company-designated physician who
must declare that the seaman suffers a permanent disability during employment, it does not deprive the seafarer of
his right to seek a second opinion, hence, the Contract recognizes the prerogative of the seafarer to request a
second opinion and, for this purpose, to consult a physician of his choice.
vii. Joint and Several liability of employment agent and principal
POEA Rules Part II Rule II Sec. 1(f)(3). A verified undertaking stating that the applicant: 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 repatriations
RA 8042(as amended by 10022) Sec. 10par.2, supra.
OSM Shipping v. NLRC. Petitioner, as manning agent, is jointly and severally liable with its principal for private
respondents claim. Joint and solidary liability is meant to assure aggrieved workers of immediate sufficient
payment of what is due them. The fact that petitioner and its principal have already terminated their agency
agreement does not relieve the former of its liability.
viii. Responsibilities of local recruitment agency/liability for damages and attys fees
5. Jurisdiction
i. RTC over criminal action arising from illegal recruitment
RA 8042(as amended by 10022) Sec. 9, supra.
ii. LA over money claims
RA 8042(as amended by 10022) Sec. 10, supra.

Note: a phrase thereof was declared unconstitutional as per Serrano v. Gallant Maritime Services on the basis of the
equal protection clause
Flourish Maritime Shopping v. Almanzor. The choice of which amount to award an illegally dismissed OCW,
i.e., whether his salaries for the unexpired portion of his employment contract, or 3 months salary for every
year of the unexpired term, whichever is less, comes into play only when the employment contract concerned
has a term of at least 1 year or more.
iii. POEA over administrative cases
a. Pre-employment cases
RA 8042 IRR Sec. 28(a) The POEA shall exercise original and exclusive jurisdiction to hear and decide: all
cases, which are administrative in character, involving or arising out of violations of rules and regulations
relating to licensing and registration of recruitment and employment agencies or entities; and disciplinary
action cases and other special cases, which are administrative in character, involving employers, principals,
contracting partners and Filipino migrant workers.
b. Disciplinary cases
RA 8042 IRR Sec. 28(b), supra.
(b) Public sector agencies
Employment offices:
LC, 12(f), supra.
LC, 14(a), supra
EO 247 reorganizing POEA, Sec. 3.
POEA Rules.
c. Sanctions
14
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


LC, 35. Suspension and/or cancellation of license or authority. - The Minister 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
Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions
LC, 39 (a-e). Penalties.
(a) 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;
(b) 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;
(c) 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;
(d) 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;
(e) 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.
RA 8042(as amended by 10022) Sec. 6, supra.
RA 8042(as amended by 10022) Sec. 7, supra
RA 8042(as amended by 10022) Sec. 10 par. 5-6, supra
i. Local employment
LC, 39(e). 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.
ii. Overseas employment
LC, 35. Suspension and/or cancellation of license or authority. - The Minister 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 Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and
other applicable laws, General Orders and Letters of Instructions
RA 8042(as amended by 10022) Sec. 7, supra
2. Alien employment regulation
a. Coverage
LC, 40. Employment permit of non-resident aliens. - Any alien seeking admission to the Philippines for employment purposes
and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor. The employment permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and
willing at the time of application to perform the services for which the alien is desired. For an enterprise registered in
preferred areas of investments, said employment permit may be issued upon recommendation of the government agency
charged with the supervision of said registered enterprise.
Omnibus Rules, Rule I.1. Coverage All foreign nationals who intend to engage in gainful employment in the Philippines shall
apply for Alien Employment Permit (AEP)
Exemption Rule I.2. The following categories of foreign nationals are exempt from securing an employment permit:
a. All members of the diplomatic service and foreign government officials accredited by and with reciprocity
arrangement with the Philippine government;
b. Officers and staff of international organizations of which the Philippine government is a member, and their legitimate
spouses desiring to work in the Philippines;
c. Foreign nationals elected as members of the Governing Board who do not occupy any other position, but only have
voting rights in the corporation;
d. All foreign nationals granted exemption by law;
e. Owners and representatives of foreign principals whose companies are accredited by the POEA, who come to the
Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for employment
abroad;
f. Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities and
colleges as visiting, exchange or adjunct professors under formal agreements between universities and colleges in
the Philippines and foreign universities or colleges; or between the Philippine government and foreign government;
provided that such exemption is on a reciprocal basis; and,
g. Permanent resident foreign nationals, probationary or temporary resident visa holders.
Almodiel v. NLRC. Almodiel arguing that the alien who replaced him had no AEP Court: exempted, being a resident born in
the Philippines.
b. Conditions for grant of permit
Omnibus Rules, Rule I.1. supra
Omnibus Rules, Rule I.2. supra
Omnibus Rules, Rule I.3. Procedure in the processing of applicants for AEP
a. All applications for AEP shall be filed and processed at the DOLE Regional Office or Field Office having jurisdiction
over the intended place for work
Only applications with the following complete documentary requirements shall be received and acted upon by the
Regional Office
1. Duly Accomplished Application Form
2. Photocopy of Passport, with Visa or Certificate of Recognition for refugees
15
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


3. Contract of employment/Appointment or Board Secretarys Certificate of Election
4. Photocopy of Mayors Permit to operate business or in case of locators in economic zones, Certification from the
PEZA or the Ecozone Authoriy that the company is located and operating with the ecozone; and,
5. Photocopy of current AEP (if for renewal)
b. In the case of foreign nationals to be assigned in related companies, they may file their application with the regional
office having jurisdiction over any of the applicants intended places of work
c. Additional position or a change in position of the foreign national in the same company or subsequent assignment in
related companies during the validity or renewal of the AEP will be subject for publication requirement and payment
of publication fee. However, a change of employer shall require an application for new AEP.
Pacific Consultants v. Schonfeld. Petitioner PPI applied for the issuance of an AEP to respondent before the DOLE. In said
application, PPI averred that respondent is its employee. To show that this was the cse, PPI appended a copy of respondents
employment contract.
c. Validity of AEP
Omnibus Rules, Rule II.7. Validity of Permit the AEP shall be valid for a period of 1 year, unless the employment contract,
consultancy services, or other modes of engagement provides otherwise, which in no case shall exceed 5 years.
d. Suspension/revocation/cancellation, grounds, due process
Omnibus Rules, Rule III.1. The AEP may be suspended by the issuing Regional Office, based on any of the following grounds,
and after due process: (a) the continued stay of the foreign national may result in damage to the interest of the industry or the
country; (b) the employment of the foreign national is suspended by the employer or by order of Court.
3. Development of Human Resources
a. Manpower Development
1. Definition
RA 7796 Sec 4 (b). "Skills Development" shall mean the process through which learners and workers are systematically
provided with learning opportunities to acquire or upgrade, or both, their ability, knowledge and behavior pattern
required as qualifications for a job or range of jobs in a given occupational area
RA 7796 Sec 4 (c). Technical Education" shall refer to the education process designed at post-secondary and lower
tertiary levels, officially recognized as non-degree programs aimed at preparing technicians, para-professionals and other
categories of middle-level workers by providing them with a broad range of general education, theoretical, scientific and
technological studies, and related job skills training
RA 7796 Sec 4 (e). "Middle-Level Manpower" refers to those: who have acquired practical skills and knowledge through
formal or non-formal education and training equivalent to at least a secondary education but preferably at post-
secondary education with a corresponding degree of diploma; or skilled workers who have become highly competent in
their trade or craft as attested by industry
2. General policy
RA 7796 Sec 2. It is hereby declared the policy of the State to provide relevant, accessible, high quality and efficient
technical education and skills development in support of the development of high quality Filipino middle-level manpower
responsive to and in accordance with Philippine development goals and priorities. The State shall encourage active
participation of various concerned sectors, particularly private enterprises, being direct participants in and immediate
beneficiaries of a trained and skilled workforce, in providing technical education and skills development opportunities.
3. Specific goals and objectives
RA 7796 Sec . 3. Statement of Goals and Objectives. - It is the goal and objective of this Act to: Promote and strengthen the
quality of technical education and skills development programs to attain international competitiveness; Focus technical
education and skills development on meeting the changing demands for quality middle-level manpower; Encourage
critical and creative thinking by disseminating the scientific and technical knowledge base of middle-level manpower
development programs; Recognize and encourage the complementary roles of public and private institutions in technical
education and skills development and training systems; and Inculcate desirable values through the development of moral
character with emphasis on work ethic, self-discipline, self-reliance and nationalism.
b. Training & Employment of special workers apprentices and learners
1. Policy objectives
LC, 57. Statement of objectives. - This Title aims: (1) To help meet the demand of the economy for trained manpower; (2)
To establish a national apprenticeship program through the participation of employers, workers and government and
non-government agencies; and (3) To establish apprenticeship standards for the protection of apprentices.
2. Definition
LC, 58(b). An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual
employer or any of the entities recognized under this Chapter
LC, 73. Learners defined. - Learners are persons hired as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable and which may be learned through practical training on the job in a relatively short period of time
which shall not exceed three (3) months.
RA 7794 Sec 4 (j) Apprenticeship" training within employment with compulsory related theoretical instruction
involving a contract between an apprentice and an employer on an approved apprenticeable occupation
RA 7794 Sec 4 (k) "Apprentice" is a person undergoing training for an approved apprenticeable occupation during an
apprenticeship agreement
RA 7794 Sec 4 (l) "Apprenticeship Agreement" is a contract wherein a prospective employer binds himself to train the
apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights,
duties and responsibilities of each party
RA 7794 Sec 4 (m). "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body and approved
for apprenticeable by the Authority
RA 7794 Sec 4 (n) Learners" refers to persons hired as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable. Learnership programs must be approved by the Authority
3. Allowed employment and when
LC, 60. Employment of apprentices. - Only employers in the highly technical industries may employ apprentices and only
in apprenticeable occupations approved by the Secretary of Labor and Employment. (As amended by Section 1, Executive
Order No. 111, December 24, 1986).
16
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


LC, 74. When learners may be hired. - Learners may be employed when no experienced workers are available, the
employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not
create unfair competition in terms of labor costs or impair or lower working standards.
RA 7794 Sec 4 (m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body and approved
for apprenticeable by the Authority
4. Conditions of employment
LC, 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including the wage rates of apprentices, shall
conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six
months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start
below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs
duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of
apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986).
LC, 72. Apprentices without compensation. - The Secretary of Labor and Employment may authorize the hiring of
apprentices without compensation whose training on the job is required by the school or training program curriculum or
as requisite for graduation or board examination.
LC, 281. Probationary employment. - Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services
of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at
the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a
regular employee.
LC, 75. Learnership agreement. - Any employer desiring to employ learners shall enter into a learnership agreement with
them, which agreement shall include: (a) The names and addresses of the learners; (b) The duration of the learnership
period, which shall not exceed three (3) months; (c) The wages or salary rates of the learners which shall begin at not less
than seventy-five percent (75%) of the applicable minimum wage; and (d) A commitment to employ the learners if they
so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to
work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before
the end of the stipulated period through no fault of the learners. The learnership agreement shall be subject to inspection
by the Secretary of Labor and Employment or his duly authorized representative.
LC, 76. Learners in piecework. - Learners employed in piece or incentive-rate jobs during the training period shall be paid
in full for the work done.
Wage Order 14.
5. Enforcement
LC, 65. Investigation of violation of apprenticeship agreement. - Upon complaint of any interested person or upon its own
initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall
investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by
the Secretary of Labor and Employment.
LC, 66. Appeal to the Secretary of Labor and Employment. - The decision of the authorized agency of the Department of
Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five
(5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executor.
LC, 67. Exhaustion of administrative remedies. - No person shall institute any action for the enforcement of any
apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available
administrative remedies.
c. Disabled persons (handicapped workers)
1. Definition
RA 7277, Sec 4(a). Disabled persons are those suffering from restriction or different abilities, as a result of a mental,
physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human
being
RA 7277, Sec 4(b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical
structure or function
RA 7277, Sec 4(c) Disability shall mean (1) a physical or mental impairment that substantially limits one or more
psychological, physiological or anatomical function of an individual or activities of such individual; (2) a record of such an
impairment; (3) being regarded as having such an impairment
RA 7277, Sec 4(d). Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability,
that limits or prevents the function or activity, that is considered normal given the age and sex of the individual.
2. Policy declaration
RA 7277, Sec . 2. Declaration of Policy The grant of the rights and privileges for disabled persons shall be guided by
the following principles:
(a) Disabled persons are part of Philippine society, thus the State shall give full support to the improvement of the
total well-being of disabled persons and their integration into the mainstream of society. Toward this end, the
State shall adopt policies ensuring the rehabilitation, self-development and self-reliance of disabled persons. It
shall develop their skills and potentials to enable them to compete favorably for available opportunities.
(b) Disabled persons have the same rights as other people to take their proper place in society. They should be able
to live freely and as independently as possible. This must be the concern of everyone the family, community
and all government and nongovernment organizations. Disabled persons' rights must never be perceived as
welfare services by the Government.
(c) The rehabilitation of the disabled persons shall be the concern of the Government in order to foster their
capacity to attain a more meaningful, productive and satisfying life. To reach out to a greater number of disabled
persons, the rehabilitation services and benefits shall be expanded beyond the traditional urban-based centers
to community based programs that will ensure full participation of different sectors as supported by national
and local government agencies.
(d) The State also recognizes the role of the private sector in promoting the welfare of disabled persons and shall
encourage partnership in programs that address their needs and concerns.
17
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


(e) To facilitate integration of disabled persons into the mainstream of society, the State shall advocate for and
encourage respect for disabled persons. The State shall exert all efforts to remove all social, cultural, economic,
environmental and attitudinal barriers that are prejudicial to disabled persons.
3. Coverage
RA 7277, Sec 3. Coverage. This Act shall cover all disabled persons and, to the extent herein provided, departments,
offices and agencies of the National Government or nongovernment organizations involved in the attainment of the
objectives of this Act.
4. Employment rights and privileges
LC, 81. Eligibility for apprenticeship. - Subject to the appropriate provisions of this Code, handicapped workers may be
hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in
the particular occupations for which they are hired.
RA 7277, Sec 4(i). Sheltered Employment refers to the provision of productive work for disabled persons through
workshops providing special facilities, income-producing projects or homework schemes with a view to giving them the
opportunity to earn a living thus enabling them to acquire a working capacity required in open industry.
RA 7277, Sec 5. Equal Opportunity for Employment. No disable person shall be denied access to opportunities for
suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and
the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person.
Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and
Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in
social development shall be reserved for disabled persons
RA 7277, Sec 6. Sheltered Employment If suitable employment for disabled persons cannot be found through open
employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of
sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the
individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production.
RA 7277, Sec 7. Apprenticeship. Subject to the provisions of the Labor Code as amended, disabled persons shall be
eligible as apprentices or learners: Provided, That their handicap is not as much as to effectively impede the performance
of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the
period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment.
Bernardo v. NLRC & FEBTC. The noble objectives of Magna Carta for disabled persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or not. In the present case, the
handicap of the petitioners is not a hindrance to their work.
5. Discrimination in employment
RA 7277, Sec 32. Discrimination on Employment. No entity, whether public or private, shall discriminate against a
qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or
discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.
The following constitute acts of discrimination:
(a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work
opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a
disabled person unless such standards, tests or other selection criteria are shown to be job-related for the position in
question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified
disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same
work is entitled;
(e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training
opportunities, study and scholarship grants, solely on account of the latter's disability;
(f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability;
(g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can
prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity:
Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills,
aptitude or other factor of the disabled applicant or employee that such tests purports to measure, rather than the
impaired sensory, manual or speaking skills of such applicant or employee, if any; and
(i) Excluding disabled persons from membership in labor unions or similar organizations
RA 7277, Sec 33. Employment Entrance Examination. Upon an offer of employment, a disabled applicant may be
subjected to medical examination, on the following occasions:
(a) all entering employees are subjected to such an examination regardless of disability;
(b) information obtained during the medical condition or history of the applicant is collected and maintained on
separate forms and in separate medical files and is treated as a confidential medical record; Provided, however, That:
(1) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the
employees and necessary accommodations;
(2) first aid and safety personnel may be informed, when appropriate, if the disability may require emergency
treatment;
(3) government officials investigating compliance with this Act shall be provided relevant information on request;
and
(4) the results of such examination are used only in accordance with this Act

6. Enforcement
RA 7277, Sec 44. Enforcement by the Secretary of Justice. (a) Denial of Right (1) Duty to Investigate the Secretary of
Justice shall investigate alleged violations of this Act, and shall undertake periodic reviews of compliance of covered
entities under this Act. (b) Potential Violations If the Secretary of Justice has reasonable cause to believe that (1) any
person or group of persons is engaged in a pattern or practice of discrimination under this Act; or (2) any person or group
18
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


or persons has been discriminated against under this Act and such discrimination raises an issue of general public
importance, the Secretary of Justice may commence a legal action in any appropriate court.
RA 7277, Sec 45. Authority of Court. The court may grant any equitable relief that such court considers to be
appropriate, including, to the extent required by this Act: (a) granting temporary, preliminary or permanent relief;
(b) providing an auxiliary aid or service, modification of policy, practice or procedure, or alternative method;
and (c) making facilities readily accessible to and usable by individuals with disabilities.
RA 7277, Sec 46. Penal Clause. (a) Any person who violates any provision of this Act shall suffer the following
penalties: (1) for the first violation, a fine of not less than Fifty thousand pesos (P50,000.00) but not exceeding One
hundred thousand pesos (P100,000.00) or imprisonment of not less than six (6) months but not more than two (2) years,
or both at the discretion of the court; and (2) for any subsequent violation, a fine of not less than One hundred thousand
pesos (P100,000.00) but not exceeding Two hundred thousand pesos (P200,000.00) or imprisonment for not less than
two (2) years but not more than six (6) years, or both at the discretion of the court. (b) Any person who abuses the
privileges granted herein shall be punished with imprisonment of not less than six (6) months or a fine of not less than
Five thousand pesos (P5,000.00), but not more than Fifty thousand pesos (P50,000.00), or both, at the discretion of the
court. (c) If the violator is a corporation, organization or any similar entity, the officials thereof directly involved shall be
liable therefor.
(d) If the violator is an alien or a foreigner, he shall be deported immediately after service of sentence without further
deportation proceedings.
4. Conditions of Employment
a. Hours of work
1. Regulation, rationale
Manila Terminal Co v. CIR. The purpose of the 8-hour law is not only to safeguard the health and welfare of the laborer,
but also to minimize unemployment by forcing employers to utilize different shift of laborers working only 8 hours each.
2. Coverage
LC, 82. Coverage. - The provisions of this Title shall apply to employees in all establishments and undertakings whether
for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. As used herein,
"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 thereof, and to other officers or members of the managerial staff. "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 whose actual hours of work in the field cannot be determined with
reasonable certainty.
LC, 276. Government employees. - The terms and conditions of employment of all government employees, including
employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and
regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution.
However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being
enjoyed by them at the time of the adoption of this Code.
OR, Book III, Rule I Sec. 1. General statement on coverage. The provisions of this Rule shall apply to all employees in
all establishments and undertakings, whether operated for profit or not, except to those specifically exempted under
Section 2 hereof.
OR, Book III, Rule I Sec. 2. Exemption. The provisions of this Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth herein:
(a) Government employees whether employed by the National Government or any of its political subdivision,
including those employed in government-owned and/or controlled corporations;
(b) Managerial employees, if they meet all of the following conditions:
(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 two or more employees therein.
(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as
to hiring and firing and as to the promotion or any other change of status of other employees, are given
particular weight.
(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of their
employer;
(2) Customarily and regularly exercise discretion and independent judgment; and
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical lines requiring special training, experience, or
knowledge; or (iii) execute, under general supervision, special assignments and tasks; and
(4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not
directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above.
(d) 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.
(e) 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.
(f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or
place of business of the employer and whose actual hours of work in the field cannot be determined with
reasonable certainty.

Exemptions
a. Government employees
19
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


LC, 82. Coverage. - The provisions of this Title shall apply to employees in all establishments and undertakings
whether for profit or not, but not to government employees, managerial employees, field personnel, members of
the family of the employer who are dependent on him for support, domestic helpers, persons in the personal
service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations. As used herein, "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 thereof, and to
other officers or members of the managerial staff. "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 whose actual hours of work in the field cannot be determined with reasonable certainty.
LC, 276. Government employees. - The terms and conditions of employment of all government employees,
including employees of government-owned and controlled corporations, shall be governed by the Civil Service
Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the
New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and
conditions of employment being enjoyed by them at the time of the adoption of this Code.
Consti Art IX-B Sec. 2(1), supra
OR, Book III, Rule I Sec. 2(a) The provisions of this Rule shall not apply to the following persons if they qualify
for exemption under the conditions set forth herein: Government employees whether employed by the National
Government or any of its political subdivision, including those employed in government-owned and/or
controlled corporations.
b. Managerial employees
LC, 82. As used herein, "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 thereof, and to other officers
or members of the managerial staff.
LC, 212(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
OR, Book III, Rule I Sec. 2(b). Managerial employees, if they meet all of the following conditions: (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 two or more employees therein.
(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations
as to hiring and firing and as to the promotion or any other change of status of other employees, are given
particular weight.
OR, Book III, Rule I Sec. 2(c). Officers or members of a managerial staff if they perform the following duties and
responsibilities: (1) The primary duty consists of the performance of work directly related to management
policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3)
(i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(iii) execute, under general supervision, special assignments and tasks; and (4) Who do not devote more than 20
percent of their hours worked in a work week to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2) and (3) above.
Intl Pharmaceuticals v. NLRC. Quintia, being a managerial employee, is not covered by the Labot Code
provisions on hours of work. However, whether ones employment is regular is not determined by the number
of hours one works, but by the nature of the work and by the length of time one has been in that particular job.
c. Field personnel
LC, 82. "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 whose actual hours of work in the field
cannot be determined with reasonable certainty.
OR, Book III, Rule I Sec. 2(f). Non-agricultural field personnel if they regularly perform their duties away from
the principal or branch office or place of business of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
Mercidar Fishing v. NLRC. Although fishermen perform non-agricultural work away from their employers
business offices, the fact remains that throughout the duration of their work they are under the effective control
and supervision of the employer through the vessels patron or master, thus they are not field employees
contemplated by the Labor Code.
Far East Agri Supply v. Lebatique. The definition of a field personnel is not merely concerned with the location
where the employee regularly performs his duties but also with the fact that the employees performance is
unsupervised by the employer.
d. Dependent family members
LC, 82, supra.
e. Domestic helpers
LC, 82, supra.
LC, 141. Coverage. - This Chapter shall apply to all persons rendering services in households for compensation.
Domestic or household service shall mean service in the employers 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 employers household, including services of family drivers
LC, 145. Assignment to Non-Household Work. No househelper shall be assigned to work in a commercial, industrial
or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non-agricultural
workers as prescribed herein.
OR, Book III, Rule I Sec. 2(d). 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
20
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the
members of his employer's household.
f. Persons in the personal service of another
LC, 82, supra.
OR, Book III, Rule I Sec. 2(d) 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.
g. Piece workers
LC, 82, supra.
OR, Book III, Rule I Sec. 2(e). 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.
Labor Congress v. NLRC. While the petitioners mode of compensation was on a per piece basis, the status
and nature of their employment was that of regular employees. Why? (1) as to the nature of their tasks, their job
was necessary or desirable in the usual business of their employer; (2) petitioners worked for PR throughout
the year, their employment not having been dependent on a specific project or season; and, (3) the length of
time that petitioners have worked for PR.
3. Normal hours of work
LC, 83. Normal hours of work. - The normal hours of work of any employee shall not exceed eight (8) hours a day. 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, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
4. Compensable hours of work in general
a. On duty
LC, 84(a). Hours worked. - Hours worked shall include all time during which an employee is required to be on duty or
to be at a prescribed workplace.
OR, Book III, Rule I Sec. 3(a). Hours worked. The following shall be considered as compensable hours worked:
All time during which an employee is required to be on duty or to be at the employer's premises or to be at a
prescribed work place
OR, Book III, Rule I Sec. 4(a). Principles in determining hours worked. The following general principles shall
govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule:
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.
b. At work
LC, 84(b). Hours worked. - Hours worked shall include all time during which an employee is suffered or permitted to
work.
OR, Book III, Rule I Sec. 3(b). Hours worked. The following shall be considered as compensable hours worked:
All time during which an employee is suffered or permitted to work.
5. Specific rules
a. Rest period
i. Short duration or coffee break
LC, 84 Par 2. Rest periods of short duration during working hours shall be counted as hours worked.
OR, Book III, Rule I Sec. 7 Par. 2. Rest periods or coffee breaks running from five (5) to twenty (20) minutes
shall be considered as compensable working time
ii. More than 20 minutes
OR, Book III, Rule I Sec. 4(b). 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.
b. Meal period
i. Regular meal period (one hour)
LC, 85. Meal periods. - 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.
OR, Book III, Rule I Sec. 7 par. 1. Every employer shall give his employees, regardless of sex, not less than one
(1) hour time-off for regular meals, except in the following cases when 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:
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) 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
(d) Where the work is necessary to prevent serious loss of perishable goods
PAL v. NLRC. The 8-hour work period does not include the meal break; Fabros act of going home to take his
dinner does not constitute abandonment. Nowhere in the law may it be inferred that employees must take their
meals within the companys premises.
ii. Shorter meal period (less than an hour but not less than 20 minutes)
OR, Book III, Rule I Sec. 7 par. 1, supra.
c. Waiting time
OR, Book III, Rule I Sec. 5(a). 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.
21
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


Arica v. NLRC. The 30-minute assembly time practiced by the employees of the company cannot be considered
waiting time, therefore not compensable.
d. Working while on call
OR, Book III, Rule I Sec. 5(b). 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.
e. Inactive due to work interruptions
OR, Book III, Rule I Sec. 4(d). 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.
U of Pangasinan Faculty Union v. U of Pangasinan. Regular professors and teachers are entitled to ECOLA during
semestral breaks, their absence from work not being of their own will.
f. Necessary work after normal hours
OR, Book III, Rule I Sec. 4(c). 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.
g. Lectures, meeting, trainings
OR, Book III, Rule I Sec. 6. Lectures, meetings, training programs. 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:
(a) Attendance is outside of the employee's regular working hours; (b) Attendance is in fact voluntary; and (c) The
employee does not perform any productive work during such attendance.
h. Travel time
Rada v. NLRC. The fact that Rada picks up employees of Philnor at certain specified points along EDSA in going to the
project site and drops them off at the same points on his way back home, is not merely incidental to petitioners job
as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of
the employees, but primarily for the benefit of the employer.
6. Overtime work/pay
a. Overtime in ordinary working day
LC, 87. Overtime work. - Work may be performed beyond eight (8) hours a day provided that the employee is paid for
the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent
(25%) thereof. 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.
OR, Book III, Rule I Sec. 8. Overtime pay. Any employee covered by this Rule who is permitted or required to
work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime
work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof.
b. Emergency or compulsory overtime work
LC, 89. Emergency overtime work. - Any employee may be required by the employer to perform overtime work in any
of the following cases:
(a) 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;
(b) 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;
(c) 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;
(d) When the work is necessary to prevent loss or damage to perishable goods; and
(e) 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. Any employee required to
render overtime work under this Article shall be paid the additional compensation required in this Chapter.
RB Michael Press v. Galit. Fact that the numerous infractions of respondent have not been immediately subjected to
sanctions cannot be interpreted as condonation of the offenses or waiver of the company to enforce company rules;
management prerogative to discipline employees and impose punishment is a legal right which cannot, as a general
rule, be impliedly waived. // elements of willful disobedience to be a valid cause for dismissal: (1) the employees
adssailed conduct must have been willful; (2) the order violated must have been reasonable, lawful, made known to
employee, and must pertain to the duties which he had been engaged to discharge.
c. Undertime work/leave
LC, 88. Undertime not offset by 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.
d. Additional compensation
LC, 87. Overtime work. - Work may be performed beyond eight (8) hours a day provided that the employee is paid for
the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent
(25%) thereof. 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.
7. Night work
a. Coverage/exclusions
OR, Book III, Rule II Sec. 1. Coverage. This Rule shall apply to all employees except: (a) Those of the government
and any of its political subdivisions, including government-owned and/or controlled corporations; (b) Those of retail
and service establishments regularly employing not more than five (5) workers; (c) Domestic helpers and persons in
the personal service of another; (d) Managerial employees as defined in Book Three of this Code; (e) Field personnel
22
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


and other employees whose time and performance is unsupervised by the employer including 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.
b. Additional compensation
LC, 86. Night shift differential. - Every employee shall be paid a night shift differential of not less than ten percent
(10%) of his regular wage for each hour of work performed between ten oclock in the evening and six oclock in the
morning.
OR, Book III, Rule II Sec. 2. Night shift differential. An employee shall be paid night shift differential of no less
than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and
six o'clock in the morning.
OR, Book III, Rule II Sec. 3. Additional compensation. Where an employee is permitted or suffered to work on the
period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent
(25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work
performed between 10 p.m. to 6 a.m.
OR, Book III, Rule II Sec. 4. Additional compensation on scheduled rest day/special holiday. An employee who is
required or permitted to work on the period covered during rest days and/or special holidays not falling on regular
holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an
additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed.
OR, Book III, Rule II Sec. 5. Additional compensation on regular holidays. For work on the period covered during
regular holidays, an employee shall be entitled to his regular wage during these days plus an additional
compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed.
Lepanto Consolidated Mining v. Lepanto Local Staff Union. The terms and conditions of a collective bargaining
contract constitute the law between the parties.
Shell Oil v. NLU. If night work cannot be avoided, it is only right that the night workers should receive more than
their day counterparts. It is a universal fact that regular work is that during the day, and work during the night is
exceptional and justified only be inevitable causes.
b. Weekly rest periods
Caltex Regular Employees v. Caltex. In order that work may be considered as overtime work, the hours worked must be in
excess of and in addition to the 8 hours worked during the prescribed daily work period, or the 40 hours worked during the
regular work week Monday thru Friday. It is only when an employee has been required on a Saturday to render work in excess
of 40 hours constitute the regular work week that such employee may be considered as performing overtime work on that
Saturday.
1. Coverage/exclusions
LC, 82. Coverage. - The provisions of this Title shall apply to employees in all establishments and undertakings whether
for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. As used herein,
"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 thereof, and to other officers or members of the managerial staff. "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 whose actual hours of work in the field cannot be determined with
reasonable certainty.
LC, 91. Right to weekly rest day. - (a) It shall be the duty of every employer, whether operating for profit or not, to provide
each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive
normal work days. (b) The employer shall determine and schedule the weekly rest day of his employees subject to
collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may
provide. However, the employer shall respect the preference of employees as to their weekly rest day when such
preference is based on religious grounds.
OR, Book III, Rule III Sec. 1. General statement on coverage. This Rule shall apply to all employers whether operating
for profit or not, including public utilities operated by private persons.
2. Right to weekly rest period
LC, 91(a) Right to weekly rest day. - (a) It shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6)
consecutive normal work days.
OR, Book III, Rule III Sec. 3. Weekly rest day. Every employer shall give his employees a rest period of not less than
twenty-four (24) consecutive hours after every six consecutive normal work days.
3. Determination/preference of employee
LC, 91(b) The employer shall determine and schedule the weekly rest day of his employees subject to collective
bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide.
However, the employer shall respect the preference of employees as to their weekly rest day when such preference is
based on religious grounds.
OR, Book III, Rule III Sec. 4. Preference of employee. The preference of the employee as to his weekly day of rest shall
be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to
the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred. Where,
however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious
prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to
other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a
month.
OR, Book III, Rule III Sec. 5. Schedule of rest day. (a) Where the weekly rest is given to all employees simultaneously,
the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at
least one week before it becomes effective. (b) Where the rest period is not granted to all employees simultaneously and
collectively, the employer shall make known to the employees their respective schedules of weekly rest through written
notices posted conspicuously in the work place at least one week before they become effective.
4. Compulsory work on rest day
LC, 92. When employer may require work on a rest day. - The employer may require his employees to work on any day:
23
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or
other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the
employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be
expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable
injury or loss to the employer; and (f)
(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and
Employment
OR, Book III, Rule III Sec. 6. When work on rest day authorized. An employer may require any of his employees to
work on his scheduled rest day for the duration of the following emergencies and exceptional conditions: (a) In case of
actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster
or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety; (b) In case
of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer
would otherwise suffer; (c) In the event of abnormal pressure of work due to special circumstances, where the employer
cannot ordinarily be expected to resort to other measures; (d) To prevent serious loss of perishable goods; (e) Where the
nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the
case of the crew members of a vessel to complete a voyage and in other similar cases; and (f) When the work is necessary
to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.
No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in
this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances,
he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation.
5. Premium pay
LC, 93(a) Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on his
scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established
rest day.
LC, 93(b). When the nature of the work of the employee is such that he has no regular workdays and no regular rest days
can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.
LC, 93(c). Work performed on any special holiday shall be paid an additional compensation of at least thirty percent
(30%) of the regular wage of the employee. Where such holiday work falls on the employees scheduled rest day, he shall
be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage.
OR, Book III, Rule III Sec. 7. Compensation on rest day/Sunday/holiday.
(a) Except those employees referred to under Section 2, Rule I, Book Three, an employee who is made or permitted
to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular
wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only
when it is his established rest day.
(b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days
can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work
performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the
regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he shall be
entitled to additional compensation of at least 50% of his regular wage.
(d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV,
Book Three, of these regulations.
(e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a
higher premium pay than that prescribed under this Section, the employer shall pay such higher rate.
6. Work on a Sunday or holiday which is also a scheduled rest day
LC, 93(a). Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on
his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage.
An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his
established rest day
LC, 93(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest days
can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.
OR, Book III, Rule III Sec. 7(a). Compensation on rest day/Sunday/holiday. (a) Except those employees referred to
under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be
paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional
compensation for work performed on a Sunday only when it is his established rest day.
OR, Book III, Rule III Sec. 7(b). Where the nature of the work of the employee is such that he has no regular work days
and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage
for work performed on Sundays and holidays.
7. CBA on higher premium pay
LC, 93(d) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of
a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate.
OR, Book III, Rule III Sec. 7(e). Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such
higher rate.
OR, Book III, Rule III Sec. 9. Relation to agreements. Nothing herein shall prevent the employer and his employees or
their representatives in entering into any agreement with terms more favorable to the employees than those provided
herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary
employer practices.
24
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


c. Holidays
1. Coverage/exclusions
LC, 94(a) Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers.
OR, Book III, Rule IV Sec. 1. Coverage. This rule shall apply to all employees except: (a) Those of the government and
any of the political subdivision, including government-owned and controlled corporation; (b) Those of retail and service
establishments regularly employing less than ten (10) workers; (c) Domestic helpers and persons in the personal service
of another; (d) Managerial employees as defined in Book Three of the Code; (e) Field personnel and other employees
whose time and performance is unsupervised by the employer including 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.
Retail establishment
IRR, RA 6727 par. F. "Retail Establishment" is one principally engaged in the sale of goods to end-users for personal
or household use.
Service establishment
IRR, RA 6727 par. g. "Service Establishment" is one principally engaged in the sale of service to individuals for their
own or household use and is generally recognized as such
Mantrade/FMMC v. Bacungan. Employees paid by the month are entitled to holiday pay. Book III Rule IV Sec. 2 add
another excluded group, namely, employees who are uniformly paid by the month. While the additional exclusion is
only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes
a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires.
2. Regular holidays/special holidays
RA 9492 [amended EO292). (see law)
3. Holiday pay
LC, 94(b). The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate
a. Faculty in private school
OR, Book III, Rule IV Sec. 8(a). Holiday pay of certain employees. (a) Private school teachers, including faculty
members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They
shall, however, be paid for the regular holidays during Christmas vacation.
JRC v. NLRC. Hourly paid faculty members are not entitled to their pay for unworked regular holidays. Regular
holidays specified as such by the law are known to the school as no class days; certainly the faculty do not expect
payment for said unworked days. // Hourly paid faculty members are however entitled to their regular hourly rate
on days declared as special holidays or when classes are called off or shortened.
b. Divisor as factor
Trans-Asia v. NLRC. 286 days.
c. Sunday
LC, 93(a). Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work
on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular
wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is
his established rest day.
LC, 93(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest
days can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of his regular
wage for work performed on Sundays and holidays.
OR, Book III, Rule III Sec. 2. on Sundays/Holidays. All establishments and enterprises may operate or open for
business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as
provided in this Rule
Wellington v. Trajano. The monthly salary thus fixed actually covers payment for 314 days, including regular and
special holidays, as well as days when no work is done by reason of fortuitous event.
d. Muslim holiday
LC, 169. Foreign employment. - The Commission shall ensure adequate coverage of Filipino employees employed
abroad, subject to regulations as it may prescribe.
LC, 170. Effective date of coverage. - Compulsory coverage of the employer during the effectivity of this Title shall
take effect on the first day of his operation, and that of the employee, on the date of his employment.
LC, 171. Registration. - Each employer and his employees shall register with the System in accordance with its
regulations
LC, 172. Limitation of liability. - The State Insurance Fund shall be liable for compensation to the employee or his
dependents, except when the disability or death was occasioned by the employees intoxication, willful intention to
injure or kill himself or another, notorious negligence, or otherwise provided under this Title.
PD 1083, 169. Official Muslim holidays. The following are hereby recognized as legal Muslim holidays: (a) 'Amun
Jadid (New Year), which falls on the first day of the first lunar month of Muharram; (b) Maulid-un-Nabi (Birthday of
the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isra
Wal Mi'raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of
the seventh lunar month of Rajab; (d) 'Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar
month of Shawwal, commemorating the end of the fasting season; and (e) 'Id-ul-Adha (Hari Raja Haji), which falls on
the tenth day of the twelfth lunar month of Dhu 1-Hijja.
PD 1083, 170. Provinces and cities where officially observed. (1) Muslim holidays shall be officially observed in the
Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi,
Zamboanga del Norte and Zamboanga del Sur, and in the Cities of Cotabato, Iligan, Marawi, Pagadian, and Zamboanga
and in such other Muslim provinces and cities as may hereafter be created. (2) Upon proclamation by the President
of the Philippines, Muslim holidays may also be officially observed in other provinces and cities.
PD 1083, 171. Dates of observance. The dates of Muslim holidays shall be determined by the Office of the President
of the Philippines in accordance with the Muslim Lunar Calendar (Hijra).
25
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


PD 1083, 172. Observance of Muslim employees. (1) All Muslim government officials and employees in places other
than those enumerated under Article 170 shall also be excused from reporting to office in order that they may be
able to observe Muslim holidays. (2) The President of the Philippines may, by proclamation, require private offices,
agencies or establishments to excuse their Muslim employees from reporting for work during a Muslim holiday
without reduction in their usual compensation.
SMC v. CA. there should be no distinction between Muslims and non-Muslims as regards payment of benefits for
Muslim holidays.
4. Absences
OR, Book III, Rule IV Sec. 6(a). Absences. (a) All covered employees shall be entitled to the benefit provided herein
when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately
preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday
OR, Book III, Rule IV Sec. 10. Successive regular holidays. Where there are two (2) successive regular holidays, like
Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the
day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his
holiday pay on the second holiday.
5. Non-working day/scheduled rest day
OR, Book III, Rule IV Sec. 6(c). Where the day immediately preceding the holiday is a non-working day in the
establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in
which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or
rest day.
d. Service incentive leave
1. Coverage/exclusions
LC, 95(a) Right to service incentive leave. - (a) Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.
LC, 95(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate;
OR, Book III, Rule V Sec. 1. Coverage. This rule shall apply to all employees except: (a) Those of the government and
any of its political subdivisions, including government-owned and controlled corporations; (b) Domestic helpers and
persons in the personal service of another; (c) Managerial employees as defined in Book Three of this Code; (d) Field
personnel and other employees whose performance is unsupervised by the employer including 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; (e) Those who are already enjoying the benefit herein provided; (f) Those
enjoying vacation leave with pay of at least five days; and (g) Those employed in establishments regularly employing less
than ten employees
Makati Haberdashery v. NLRC. Private respondents are not entitled to service incentive leave pay and holiday pay
because as piece-rate workers they fall under the exceptions set forth in the implementing rules
Labor Congress v. NLRC, supra.
2. Requirements
LC, 95(a). Right to service incentive leave. - (a) Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.
OR, Book III, Rule V Sec. 2. Right to service incentive leave. Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay
OR, Book III, Rule V Sec. 3. Definition of certain terms. The term "at least one-year service" shall mean service for not
less than 12 months, whether continuous or broken reckoned from the date the employee started working, including
authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or
policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered
as one year.
Meaning at least one year of service OR, Book III, Rule V Sec. 3.
Treatment of benefits
OR, Book III, Rule V Sec. 5. Treatment of benefit. The service incentive leave shall be commutable to its money
equivalent if not used or exhausted at the end of the year.
e. Vacation leave/sick leave
PSTMSDWO v. PNCC Skyway Corp. It must be noted the grant to management of the right to schedule vacation leaves is not
without good reason. Indeed, if union members were given the unilateral discretion to schedule their vacation leaves, the same
may result in significantly crippling the number of key employees of the petitioner manning the toll ways on holidays and
other peak seasons, where union members may wittingly or unwittingly choose to have a vacation. Put another way, the grant
to management of the right to schedule vacation leaves ensures that there would always be enough people manning and
servicing the toll ways, which in turn assures the public plying the same orderly and efficient toll way service.
f. Paternity leave RA 8187: Paternity Leave Act of 1996
1. Coverage
RA 8187 Sec. 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the
private and public sectors shall be entitled to a paternity leave of seven (7) days with full pay for the first four (4)
deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall
notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery. For purposes, of this
Act, delivery shall include childbirth or any miscarriage.
IRR, RA 8187 Sec. 2. Every married male government employee shall be entitled to paternity leave benefits of 7 days
with full pay for the 1st 4 deliveries of the legitimate spouse with whom he is cohabiting under such terms and conditions
as hereinafter provided.
2. Conditions
RA 8187 Sec. 2, supra.
IRR, RA 8187 Sec. 2, supra.
IRR, RA 8187 Sec. 3. Notification a married male employee shall be entitled to paternity leave by filing the requisite
leave application form within a reasonable period prior to the expected delivery except in cases of miscarriage and
abnormal deliveries which were unforeseen. Approval of the leave application shall be mandatory on the part of the
26
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


approving authority unless the services of the male employee are urgently needed to preserve life and property in which
case the male employee shall be entitled to overtime pay.
IRR, RA 8187 Sec. 4. Availment The paternity benefits set forth herein may be enjoyed by the qualified male employee
on the days immediately before, during and after the childbirth or miscarriage of his legitimate spouse.
3. When to avail of benefits
IRR, RA 8187 Sec. 5. Validation requirement Any employee who has availed of the paternity leave may be required to
furnish his office a certified true copy of his marriage contract; the birth certificate of the newly born child; medical
certificate with pathology reports in case of miscarriage duly signed by the attending physician or midwife showing the
actual date of the childbirth or miscarriage.
4. Treatment of benefit
IRR, RA 8187 Sec. 6. The benefits specified hereunder shall be non-cumulative and strictly non-convertible to cash.
5. Penalty provisions
RA 8187 Sec. 5. Any person, corporation, trust, firm, partnership, association or entity found violating this Act or the
rules and regulations promulgated thereunder shall be punished by a fine not exceeding Twenty-five thousand pesos
(P25,000) or imprisonment of not less than thirty (30)days nor more than six (6) months. If the violation is committed by
a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed on
the entitys responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general
manager, managing director or partner directly responsible therefor.
IRR, RA 8187 Sec. 7. Penalty Any government official or employee found violating any provision of RA8187 or these
Rules shall be punished by a fine not exceeding PhP25,000 or imprisonment of not less than 30days nor more than 6
months. Any government official or employee who files a fraudulent claim shall be punished with separation from service
for dishonesty.
6. Employment-related rights and benefits
RA 8187 Sec. 2, supra.
RA 8187 Sec. 3. Definition of Term. For purposes of this Act, Paternity Leave refers to the benefits granted to a married
male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor,
on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively
lend support to his wife in her period of recovery and/or in the nursing of the newly-born child.
IRR, RA 8187 Sec. 1(b)
IRR, RA 8187 Sec. 3(a)
g. Parental leave RA 8972: Solo Parents Welfare Act of 2000
1. Coverage
RA 8972, Sec. 3(a)."Solo parent" - any individual who falls under any of the following categories:
(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of
the offender: Provided, That the mother keeps and raises the child;
(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving
sentence for a criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental incapacity of
spouse as certified by a public medical practitioner;
(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto separation
from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the children;
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or annulment of
marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children;
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at least one (1)
year;
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having others
care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care and support to a child or children;
(10) Any family member who assumes the responsibility of head of family as a result of the death, abandonment,
disappearance or prolonged absence of the parents or solo parent.
A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer
left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.
2. Criteria
RA 8972, Sec. 4. Criteria for Support. - Any solo parent whose income in the place of domicile falls below the poverty
threshold as set by the National Economic and Development Authority (NEDA) and subject to the assessment of the
DSWD worker in the area shall be eligible for assistance: Provided, however, That any solo parent whose income is above
the poverty threshold shall enjoy the benefits mentioned in Sections 6, 7 and 8 of this Act.
RA 8972, Sec. 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than
seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one
(1) year.
IRR, RA 8972, Art. IV Sec. 7. Criteria for Support Any solo parent whose income in the place of domicile falls equal to
or below the poverty threshold as set by the NSCB and subject to the assessment of the duly appointed or designated
social worker in the area shall be eligible for assistance: Provided, however, That any solo parent whose income is above
the poverty threshold shall enjoy the benefits mentioned in Sections 16, 17, 18, 19, 20, 21 and 23 of these Rules. For
purposes of the Act and these Rules, the place of domicile shall refer to the residence mentioned in Section 8(a) of these
Rules.
3. Qualifications of solo parents
RA 8972, Sec. 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than
seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one
(1) year.
IRR, RA 8972, Art IV Sec. 8. Qualifications of Solo Parent A solo parent seeking benefits other than those provided for
under Sections 16, 17, 18, 19, 20, 21 and 23 of these Rules shall be qualified on the basis of the following: (a) A resident of
the area where the assistance is sought, as certified by the barangay captain; Provided, that if the solo parent is a
transferee from another barangay, he/she is required to secure a clearance from his/her previous barangay,
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


indicating whether or not he/she has availed of any benefits for solo parents, and the nature of such benefits. (b)
With an income level equal to or below the poverty threshold as set forth by NSCB and assessed by a social worker as
provided for under Section 7 of these Rules.
4. Employment-related rights and benefits
RA 8972, Sec. 3(d) "Parental leave" - shall mean leave benefits granted to a solo parent to enable him/her to perform
parental duties and responsibilities where physical presence is required.
RA 8972, Sec. 3(e) "Flexible work schedule" - is the right granted to a solo parent employee to vary his/her arrival and
departure time without affecting the core work hours as defined by the employer.
a. Flexible work schedule
RA 8972, Sec. 6. Flexible Work Schedule. - The employer shall provide for a flexible working schedule for solo
parents: Provided, That the same shall not affect individual and company productivity: Provided, further, That any
employer may request exemption from the above requirements from the DOLE on certain meritorious grounds.
IRR, RA 8972, Art V. Sec. 16. Flexible Work Schedule The employer shall provide for a flexible work schedule for
solo parents: Provided, That the same shall not affect individual and company productivity: Provided further, That
any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds.
In the case of employees in the government service, flexible working hours will be subject to the discretion of the
head of the agency. In no case shall the weekly working hours be reduced in the event the agency adopts the flexible
working hours schedule format (flexi-time). In the adoption of flexi-time, the core working hours shall be prescribed
taking into consideration the needs of the service.
b. Work discrimination
RA 8972, Sec. 7. Work Discrimination. - No employer shall discriminate against any solo parent employee with
respect to terms and conditions of employment on account of his/her status.
IRR, RA 8972, Art. V Sec. 17. Work Discrimination No employer shall discriminate against any solo parent
employee with respect to terms and conditions of employment on account of his/her status.
c. Leave
RA 8972, Sec. 8, supra
5. Treatment of benefit; non-cumulative
IRR, RA 8972, Art. V. Sec. 18. Parental Leave In addition to leave privileges under existing laws, parental leave of not
more than seven (7) working days every year shall be granted to any solo parent employee who has rendered service of
at least one (1) year. The seven-day parental leave shall be non-cumulative.
h. Victims leave
1. Definition/coverage
RA 9262, Sec. 3. Definition of Terms.- As used in this Act, (a) "Violence against women and their children" refers to any
act or a series of acts committed by any person against a woman who is his wife, former wife, or against a woman with
whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child
whether legitimate or illegitimate, within or without the family abode, which result in or is likely to result in physical,
sexual, psychological harm or suffering, or economic abuse including threats of such acts, battery, assault, coercion,
harassment or arbitrary deprivation of liberty. It includes, but is not limited to, the following acts:

A. "Physical Violence" refers to acts that include bodily or physical harm;


B. "Sexual violence" refers to an act which is sexual in nature, committed against a woman or her child. It includes, but
is not limited to:
a. rape, sexual harassment, acts of lasciviousness, treating a woman or her child as a sex object, making demeaning
and sexually suggestive remarks, physically attacking the sexual parts of the victims body, forcing her/him to
watch obscene publications and indecent shows or forcing the woman or her child to do indecent acts and/or
make films thereof, forcing the wife and mistress/lover to live in the conjugal home or sleep together in the
same room with the abuser;
b. acts causing or attempting to cause the victim to engage in any sexual activity by force, threat of force, physical
or other harm or threat of physical or other harm or coercion;
c. Prostituting the woman or child.
C. "Psychological violence" refers to acts or omissions causing or likely to cause mental or emotional suffering of the
victim such as but not limited to intimidation, harassment, stalking, damage to property, public ridicule or
humiliation, repeated verbal abuse and mental infidelity. It includes causing or allowing the victim to witness the
physical, sexual or psychological abuse of a member of the family to which the victim belongs, or to witness
pornography in any form or to witness abusive injury to pets or to unlawful or unwanted deprivation of the right to
custody and/or visitation of common children.
D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which includes, but is
not limited to the following:
1. withdrawal of financial support or preventing the victim from engaging in any legitimate profession,
occupation, business or activity, except in cases wherein the other spouse/partner objects on valid,
serious and moral grounds as defined in Article 73 of the Family Code;
2. deprivation or threat of deprivation of financial resources and the right to the use and enjoyment of the
conjugal, community or property owned in common;
3. destroying household property;
4. controlling the victims own money or properties or solely controlling the conjugal money or
properties.

(b) "Battery" refers to an act of inflicting physical harm upon the woman or her child resulting to the physical and
psychological or emotional distress.

(c) "Battered Woman Syndrome" refers to a scientifically defined pattern of psychological and behavioral symptoms
found in women living in battering relationships as a result of cumulative abuse.
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


(d) "Stalking" refers to an intentional act committed by a person who, knowingly and without lawful justification follows
the woman or her child or places the woman or her child under surveillance directly or indirectly or a combination
thereof.

(e) "Dating relationship" refers to a situation wherein the parties live as husband and wife without the benefit of marriage
or are romantically involved over time and on a continuing basis during the course of the relationship. A casual
acquaintance or ordinary socialization between two individuals in a business or social context is not a dating relationship.

(f) "Sexual relations" refers to a single sexual act which may or may not result in the bearing of a common child.

(g) "Safe place or shelter" refers to any home or institution maintained or managed by the Department of Social Welfare
and Development (DSWD) or by any other agency or voluntary organization accredited by the DSWD for the purposes of
this Act or any other suitable place the resident of which is willing temporarily to receive the victim.

(h) "Children" refers to those below eighteen (18) years of age or older but are incapable of taking care of themselves as
defined under Republic Act No. 7610. As used in this Act, it includes the biological children of the victim and other
children under her care.

2. Entitlement to leave
RA, 9262 Sec 43. Entitled to Leave. Victims under this Act shall be entitled to take a paid leave of absence up to ten (10)
days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations, extendible when the
necessity arises as specified in the protection order. Any employer who shall prejudice the right of the person under this
section shall be penalized in accordance with the provisions of the Labor Code and Civil Service Rules and Regulations.
Likewise, an employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall
likewise be liable for discrimination.
IRR, RA 9262 Rule VI Sec 42. Ten-day paid leave in addition to other leave benefits. - At any time during the application
of any protection order, investigation, prosecution and/or trial of the criminal case, a victim of VAWC who is employed
shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil
Service Rules and Regulations and other existing laws and company policies, extendible when the necessity arises as
specified in the protection order. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be,
shall issue a certification at no cost to the woman that such an action is pending, and this is all that is required for the
employer to comply with the 10-day paid leave. For government employees, in addition to the aforementioned
certification, the employee concerned must file an application for leave citing as basis R.A. 9262. The administrative
enforcement of this leave entitlement shall be considered within the jurisdiction of the Regional Director of the DOLE
under Article 129 of the Labor Code of the Philippines, as amended, for employees in the private sector, and the Civil
Service Commission, for government employees. The availment of the ten day-leave shall be at the option of the woman
employee, which shall cover the days that she has to attend to medical and legal concerns. Leaves not availed of are
noncumulative and not convertible to cash. The employer/agency head who denies the application for leave, and who
shall prejudice the victim-survivor or any person for assisting a co-employee who is a victim-survivor under the Act shall
be held liable for discrimination and violation of R.A 9262. The provision of the Labor Code and the Civil Service Rules and
Regulations shall govern the penalty to be imposed on the said employer/agency head.

i. Special leave benefits for women


Covered employees: RA 9710, Sec. 18. Special Leave Benefits for Women. - A woman employee having rendered
continuous aggregate employment service of at least six (6) months for the last twelve (12) months shall be entitled to a
special leave benefit of two (2) months with full pay based on her gross monthly compensation following surgery caused by
gynecological disorders.
j. Service charges
LC, 96. Service charges. - All service charges collected by hotels, restaurants and similar establishments shall be distributed at
the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for management. The share of the
employees shall be equally distributed among them. In case the service charge is abolished, the share of the covered
employees shall be considered integrated in their wages.
OR, Book III Rule VI Sec. 1. Coverage. This rule shall apply only to establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as private subsidiaries of the Government.
OR, Book III Rule VI Sec. 2. Employees covered. This rule shall apply to all employees of covered employers, regardless of
their positions, designations or employment status, and irrespective of the method by which their wages are paid except to
managerial employees. As used herein, a "managerial employee" shall mean one who is vested with powers or prerogatives to
lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees or to effectively recommend such managerial actions. All employees not falling within this definition shall be
considered rank-and-file employees.
OR, Book III Rule VI Sec. 3. Distribution of service charges. All service charges collected by covered employers shall be
distributed at the rate of 85% for the employees and 15% for the management. The 85% shall be distributed equally among
the covered employees. The 15% shall be for the disposition by management to answer for losses and breakages and
distribution to managerial employees at the discretion of the management in the latter case.
OR, Book III Rule VI Sec. 4. Frequency of distribution. The shares referred to herein shall be distributed and paid to the
employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
OR, Book III Rule VI Sec. 5. Integration of service charges. In case the service charges is abolished the share of covered
employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average
monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of such
charges.
OR, Book III Rule VI Sec. 6. Relation to agreements. Nothing in this Rule shall prevent the employer and his employees
from entering into any agreement with terms more favorable to the employees than those provided herein, or be used to
diminish any benefit granted to the employees under existing laws, agreement and voluntary employer practice.
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


OR, Book III Rule VI Sec. 7. This rule shall be without prejudice to existing, future collective bargaining agreements. Nothing
in this rule shall be construed to justify the reduction or diminution of any benefit being enjoyed by any employee at the time
of effectivity of this rule.
1. Covered employees
2. Sharing
Phil Hoteliers v. NUWHRAIN-APL-IUF. Since Dusit Hotel is explicitly mandated by the law to pay its employees and
management their respective shares in the service charges collected, the hotel cannot claim that payment thereof
constitutes substantial compliance with ECOLA payment.
k. Non-diminution of benefits
LC, 100. Prohibition against elimination or diminution of benefits. - Nothing in this Book shall be construed to eliminate or in
any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.
Metrobank v. Patag. It is a jurisprudential rule that where there is an established employer practice of regularly, knowingly,
and voluntarily granting benefits to employees over a significant period of time, despite the lack of a legal or contractual
obligation on the part of the employer to do so, the grant of such benefits ripens into a vested right of the employees and can
no longer be unilaterally reduced or withdrawn by the employer.
5. Minimum wages and wage fixing machinery
a. Minimum wages
LC, 99. Regional minimum wages. - The minimum wage rates for agricultural and non-agricultural employees and workers in
each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. (As
amended by Section 3, Republic Act No. 6727, June 9, 1989).
Consti, Art XIII Sec. 3, supra
1. General principles
a. Right to a living wage
Consti Art XIII Sec 3 par 2, supra.
Consti Art XIII Sec 3 par 4, supra
b. No work, no pay/a fair days wage for a fair days labor
Sugue v. Triumph. Half-day absence = credited to vacation leave; in the grant of vacation and sick leave privileges to
an employee, the employer is given leeway to impose conditions on the entitlement to the same as the grant of
vacation and sick leave is not a standard of law, but a prerogative of management it is a mere concession or act of
grace of the employer and not a matter of right on the part of the employee
Aklan Electric v. NLRC. The age-old rule governing the relation between labor and capital, or management and
employee, of a fair days wage for a fair days labor remains as the basic factor in determining employees wages.
c. Equal pay for work of equal value
International Alliance v. Quisumbing, supra.
d. Form: agreement for compensation of services
LC, 97(f). "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services rendered or to be rendered and includes the
fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other
facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any
profit to the employer, or to any person affiliated with the employer.
Arms Taxi v. NLRC. 15% commission not in writing; but not in the purview of Statute of Frauds.
e. Exemption from income tax
RA 9504. xxx provided, That minimum wage earners as defined in Section 22(HH) of this Code shall be exempt from
the payment of income tax on their taxable income: Provided, further, That the holiday pay, overtime pay, night shift
differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax.
2. Coverage
LC, 97(b). "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an
employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-
owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.
LC, 97(c). "Employee" includes any individual employed by an employer.
LC, 97(e). "Employ" includes to suffer or permit to work..
LC, 98. This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective
homes in needle work or in any cottage industry duly registered in accordance with law.
OR, Book III Rule VII Sec. 3.
Phil Fisheries Devt Authority v. NLRC. Notwithstanding that petitioner is a government agency, its liabilities, which are
joint and solidary with that of the contractor, are provided in LC, 106-109. This places the petitioners liabilities under the
scope of the NLRC.
3. Minimum wage
LC, 99. Regional minimum wages. - The minimum wage rates for agricultural and non-agricultural employees and workers
in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity
Boards. (As amended by Section 3, Republic Act No. 6727, June 9, 1989).
LC, 97(f). "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily
furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to
any person affiliated with the employer.
LC, 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including the wage rates of apprentices, shall
conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six
months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start
below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs
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Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of
apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986).
LC, 75(c). Learnership agreement. - Any employer desiring to employ learners shall enter into a learnership agreement
with them, which agreement shall include: The wages or salary rates of the learners which shall begin at not less than
seventy-five percent (75%) of the applicable minimum wage
LC, 80(b). Employment agreement. - Any employer who employs handicapped workers shall enter into an employment
agreement with them, which agreement shall include: The rate to be paid the handicapped workers which shall not be
less than seventy five (75%) percent of the applicable legal minimum wage
Wage Orders 14 & 15.
RA 7323, Sec. 2. Sixty per centum (60%) of said salary or wage shall be paid by the employer in cash and forty per
centum (40%) by the Government in the form of a voucher which shall be applicable in the payment for his tuition fees
and books in any educational institution for secondary, tertiary, vocational or technological education. The amount of the
education voucher shall be paid by the Government to the educational institution concerned within thirty (30) days from
its presentation to the officer or agency designated by the Secretary of Finance. The voucher shall not be transferable
except when the payee thereof dies or for a justifiable cause stops in his duties in which case it can be transferred to his
brothers or sisters. If there be none, the amount thereof shall be paid his heirs or to the payee himself, as the case may be.
OR, Book III Rule VII Sec. 4. When Wage Increase Due Other Workers. a) All workers and employees who, prior to
July 1, 1989, were already receiving a basic wage above the statutory minimum wage rates provided under Republic Act
6640 but not over P100.00 per day shall receive a wage increase equivalent to that provided in the preceding Section. b)
Those receiving not more than the following monthly basic wage rates prior to July 1, 1989 shall be deemed covered by
the preceding subsection: (i) P3,257.50 where the workers and employees work everyday, including premium
payments for Sundays or rest days, special days and regular holidays. (ii) P3,041.67 where the workers and employees
do not work but considered paid on rest days, special days and regular holidays. (iii) P2,616.67 where the workers and
employees do not work and are not considered paid on Sundays or rest days. (iv) P2,183.33 where the workers and
employees do not work and are not considered paid on Saturdays and Sundays or rest days. c) Workers and employees
who, prior to July 1, 1989, were receiving a basic wage of more than P100.00 per day or its monthly equivalent, are not by
law entitled to the wage increase provided under the Act. They may however, receive wage increases through the
correction of wage distortions in accordance with Section 16, Chapter I of these Rules.
OR, Book III Rule VII Sec. 5.
OR, Book III Rule VII Sec. 6.Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates.
Without prejudice to existing company practices, agreements or policies, the following formula may be used as guides
in determining the equivalent monthly statutory minimum wage rates:

a) For those who are required to work everyday including Sundays or rest days, special days and regular holidays:

Equivalent Applicable daily wage rate (ADR) x 390.90 days

Monthly =

Rate (EMR) 12

Where 390.90 days =302 days Ordinary working days

20 days 10 regular holidays x 200%

66.30 days 51 rest days x 130%

2.60 days 2 special days x 130%

390.90 days Total equivalent number of days.

b) For those who do not work but considered paid on rest days, special days and regular holidays:
ADR x 365 days
EMR =

12

Where 365 days = 302 days Ordinary working days

51 days Rest days

10 days Regular holidays

2 days Special days

365 days Total equivalent number of days

c) For those who do not work and are not considered paid on Sundays or rest days:
ADR x 314 days
31
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


EMR =

12

Where 314 days = 302 days Ordinary working days, 10 days Regular holidays ,2 days Special days (If considered paid; If
actually worked, this is equivalent to 2.6 days)

314 days Total equivalent number of days

d) For those who do not work and are not considered paid on Saturdays or rest days:
ADR x 262 days

EMR =

12

Where 262 days = 250 days Ordinary working days, 10 days Regular holidays, 2 days Special days (If considered paid; If
actually worked, this is equivalent to 2.6 days)

262 days Total equivalent number of days

Note: For workers whose rest days fall on Sundays, the number of rest days in a year is reduced from 52 to 51 days, the last
Sunday of August being a regular holiday under Executive Order No. 201. For purposes of computation, said holiday,
although still a rest day for them, is included in the ten regular holidays. For workers whose rest days do not fall on Sundays,
the number of rest days is 52 days, as there are 52 weeks in a year.
Nothing herein shall be considered as authorizing the reduction of benefits granted under existing agreements or
employer practices/policies.
OR, Book III Rule VII Sec. 7. Basis of Minimum Wages Rates. The statutory minimum wage rules prescribed under the
Act shall be for the normal working hours, which shall not exceed eight hours work a day.
a. Determination of compliance with minimum wage
Iran v. NLRC. This definition explicitly includes commissions as part of wages. While commissions are, indeed,
incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly
assigned to them, still these commissions are direct remunerations for services rendered. In fact, commissions have
been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor,
broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the
principal. // Commissions are then included in determining compliance with minimum wage requirements.
b. Facilities and supplements/allowances
OR, Book III Rule VII-A Sec. 5. Facilities the term facilities as used in this Rule shall include articles or services
for the benefit of the employee or his family but shall not include tools of the trade or articles or service primarily for
the benefit of the employer or necessary to the conduct of the employers business.
Millares v. NLRC & PICOP. In determining whether a privilege is a facility, the criterion is not so much its kind but its
purpose.
c. Cash wage/commission
OR, Book III Rule VII-A Sec. 4. Cash Wage the minimum wage rates prescribed in Section 1 hereof shall be basic,
cash wages without deducting therefrom whatever benefits, supplements or allowances which the employees enjoy
free of charge aside from the basic pay. An employer may provide subsidized meals and snacks to his employees
provided that the subsidy shall not be less than 30% of the fair and reasonable value of such facilities. In such a case,
the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks
enjoyed by the employees, provided that such deduction is within the written authorization of the employees
concerned.
Songco v. NLRC. The nature of the work of a salesman and the reason for such type of remuneration for services
rendered demonstrate clearly that commissions are part of petitioners wage or salary.
Boie Takeda v. dela Serna. Commissions do not form part of basic salary. In remunerative schemes consisting of a
fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the basic salary for this is what
the employee receives for a standard work period.
Phil. Duplicators v. NLRC. The salesmens commissions, comprising a pre-determined percent of the selling price of
the goods sold, were properly included in the term basic salary for purposes of computing 13th month pay.
d. Gratuity and salary/wages, difference
Plastic Town Center v. NLRC. Gratuity pay is not based on the actual number of days worked over the period of
years forming its basis. It is a money benefit given to the workers whose purpose is to reward employees or
laborers, who have rendered satisfactory and efficient service to the company.
e. Effect on benefits
LC, 100. Prohibition against elimination or diminution of benefits. - Nothing in this Book shall be construed to
eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation
of this Code.
Davao Fruits v. ALU. Any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer.
b. Wage fixing machinery
1. Rationale for wage rationalization
RA 6727, Sec. 2. It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote
productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their
families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in
32
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


the countryside through industry dispersal; and to allow business and industry reasonable returns on investment,
expansion and growth.
2. Agencies in wage fixing machinery
a. National Wages and Productivity Commission
RA 6727, Sec. 3. In line with the declared policy under this Act, Article 99 of Presidential Decree No. 442, as
amended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127 are hereby incorporated into
Presidential Decree No. 442, as amended.
LC, 120. Creation of National Wages and Productivity Commission. - There is hereby created a National Wages and
Productivity Commission, hereinafter referred to as the Commission, which shall be attached to the Department of
Labor and Employment (DOLE) for policy and program coordination
LC, 121. Powers and functions of the Commission. - The Commission shall have the following powers and functions:
(a) To act as the national consultative and advisory body to the President of the Philippines and Congress on
matters relating to wages, incomes and productivity;
(b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise,
industry and national levels;
(c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity
measures at the regional, provincial, or industry levels;
(d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if
these are in accordance with prescribed guidelines and national development plans;
(e) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and
to collect and compile data and periodically disseminate information on wages and productivity and other
related information, including, but not limited to, employment, cost-of-living, labor costs, investments and
returns;
(f) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine
whether these are consistent with national development plans;
(g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity
Boards;
(h) To call, from time to time, a national tripartite conference of representatives of government, workers and
employers for the consideration of measures to promote wage rationalization and productivity; and
(i) To exercise such powers and functions as may be necessary to implement this Act.
The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-
General of the National Economic and Development Authority (NEDA) as ex-officio vice-chairman, and two (2)
members each from workers and employers sectors who shall be appointed by the President of the Philippines
upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees
submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years.
The Executive Director of the Commission shall also be a member of the Commission. The Commission shall be
assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall be appointed
by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment. The
Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant
Secretary, while the Deputy Directors shall have the same rank, salary, benefits and other emoluments as that of a
Bureau Director. The members of the Commission representing labor and management shall have the same rank,
emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in
the Employees Compensation Commission. (As amended by Republic Act No. 6727, June 9, 1989).
LC, 126. Prohibition against injunction. No preliminary or permanent injunction or temporary restraining order
may be issued by any court, tribunal or other entity against any proceedings before the Commission or the Regional
Boards. (As amended by Republic Act No. 6727, June 9, 1989).
b. Regional Tripartite Wages and Productivity Board
RA 6727 Sec. 3, supra.
LC, 122. Creation of Regional Tripartite Wages and Productivity Boards. - There is hereby created Regional Tripartite
Wages and Productivity Boards, hereinafter referred to as Regional Boards, in all regions, including autonomous
regions as may be established by law. The Commission shall determine the offices/headquarters of the respective
Regional Boards. The Regional Boards shall have the following powers and functions in their respective territorial
jurisdictions:
(a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their
respective regions;
(b) To determine and fix minimum wage rates applicable in their regions, provinces or industries therein and to
issue the corresponding wage orders, subject to guidelines issued by the Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and
programs, and to collect and compile data on wages, incomes, productivity and other related information and
periodically disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this
Code;
(e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by
law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.
Implementation of the plans, programs, and projects of the Regional Boards referred to in the second
paragraph, letter (a) of this Article, shall be through the respective regional offices of the Department of Labor
and Employment within their territorial jurisdiction;
Provided, however, That the Regional Boards shall have technical supervision over the regional office of the
Department of Labor and Employment with respect to the implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as
chairman, the Regional Directors of the National Economic and Development Authority and the Department of
Trade and Industry as vice-chairmen and two (2) members each from workers and employers sectors who shall
be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and
Employment, to be made on the basis of the list of nominees submitted by the workers and employers sectors,
33
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


respectively, and who shall serve for a term of five (5) years. Each Regional Board to be headed by its chairman
shall be assisted by a Secretariat. (As amended by Republic Act No. 6727, June 9, 1989).
LC, 126. Prohibition against injunction. No preliminary or permanent injunction or temporary restraining order
may be issued by any court, tribunal or other entity against any proceedings before the Commission or the Regional
Boards. (As amended by Republic Act No. 6727, June 9, 1989).
Nasipit Lumber v. NLRC. The law does not automatically grant exemption to all establishments belonging to a
distressed industry. By exempting all establishments belonging to a distressed industry, Guideline No. 3
surreptitiously and irregularly takes away the mandated increase in the minimum. Guideline No. 3 is void not only
because it lacks NWPC approval and contains an arbitrarily inserted exemption, but also because it is inconsistent
with the avowed State policies protective of labor.
3. Standards/criteria for minimum wage fixing
RA 6727, Sec 3, supra
LC, 124. Standards/Criteria for minimum wage fixing. - The regional minimum wages to be established by the Regional
Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for
the health, efficiency and general well-being of the employees within the framework of the national economic and social
development program. In the determination of such regional minimum wages, the Regional Board shall, among other
relevant factors, consider the following:
(a) The demand for living wages;
(b) Wage adjustment vis--vis the consumer price index;
(c) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects on employment generation and family income; and
(j) The equitable distribution of income and wealth along the imperatives of economic and social development.
The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages
in every region. These wages shall include wages varying with industries, provinces or localities if in the judgment of the
Regional Board, conditions make such local differentiation proper and necessary to effectuate the purpose of this Title.
Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually
with the appropriate Regional Board, Commission and the National Statistics Office, an itemized listing of their labor
component, specifying the names of their workers and employees below the managerial level, including learners,
apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment
contracts, and their corresponding salaries and wages.
Where the application of any prescribed wage increase by virtue of a law or wage order issued by any Regional Board
results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct
the distortions. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their
collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by
the parties in writing, such dispute shall be decided by the voluntary arbitrators within ten (10) calendar days from the
time said dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized labor unions, the employers and workers shall
endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and
Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred to the
appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for
compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in
prescribed wage rates pursuant to the provisions of law or wage order.
As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of differentiation.
All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not
less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight
(8) hours.
All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their
wage clauses are concerned to reflect the prescribed wage rates. (As amended by Republic Act No. 6727, June 9, 1989).
4. Wage order
LC, 123. Wage Order. - Whenever conditions in the region so warrant, the Regional Board shall investigate and study all
pertinent facts; and based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage
Order should be issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at
least one (1) newspaper of general circulation in the region. In the performance of its wage-determining functions, the
Regional Board shall conduct public hearings/consultations, giving notices to employees and employers groups,
provincial, city and municipal officials and other interested parties. Any party aggrieved by the Wage Order issued by the
Regional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing
thereof. The filing of the appeal does not stay the order unless the person appealing such order shall file with the
Commission, an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees
affected by the order of the corresponding increase, in the event such order is affirmed. (As amended by Republic Act No.
6727, June 9, 1989).
a. Methods of fixing
i. Floor wage method
j. Salary-ceiling method
34
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


ECOP v. NWPC. Historically, legislation involving the adjustment of the minimum wage made use of two
methods. The first method involves the fixing of determinate amount that would be added to the prevailing
statutory minimum wage. The other involves "the salary-ceiling method" whereby the wage adjustment is
applied to employees receiving a certain denominated salary ceiling. The first method was adopted in the earlier
wage orders, while the latter method was used in R.A. Nos. 6640 and 6727. Prior to this, the salary-ceiling
method was also used in no less than eleven issuances mandating the grant of cost-of-living allowances (P.D.
Nos. 525, 1123, 1614, 1634, 1678, 1713 and Wage Order Nos. 1, 2, 3, 5 and 6). The shift from the first method to
the second method was brought about by labor disputes arising from wage distortions, a consequence of the
implementation of the said wage orders. Apparently, the wage order provisions that wage distortions shall be
resolved through the grievance procedure was perceived by legislators as ineffective in checking industrial
unrest resulting from wage order implementations. With the establishment of the second method as a practice
in minimum wage fixing, wage distortion disputes were minimized.
b. Validity
Metrobank v. NWPC & RTWPB. In line with its declared policy, R.A. No. 6727 created the NWPC, vested with the
power to prescribe rules and guidelines for the determination of appropriate minimum wage and productivity
measures at the regional, provincial or industry levels; and authorized the RTWPB to determine and fix the minimum
wage rates applicable in their respective regions, provinces, or industries therein and issue the corresponding wage
orders, subject to the guidelines issued by the NWPC. Pursuant to its wage fixing authority, the RTWPB may issue
wage orders which set the daily minimum wage rates, based on the standards or criteria set by Article 124 of the
Labor Code.
c. Wage distortion
RA 6727 Sec. 3, supra.
LC, 124. As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results
in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation.
Prubankers v. Prudential Bank. Elements of wage distortion: (1) an existing hierarchy of positions with
corresponding salary rates; (2) a significant change in the salary rate of a lower pay class without a concomitant
increase in the salary rate of a higher one; (3) the elimination of the distinction between the 2 levels; (4) the
existence of the distortion in the same region of the country.
5. Freedom to bargain
LC, 125. Freedom to bargain. - No wage order shall be construed to prevent workers in particular firms or enterprises or
industries from bargaining for higher wages with their respective employers. (As amended by Republic Act No. 6727, June
9, 1989).
RA 6727 Sec 2, par 2. The State shall promote collective bargaining as the primary mode of settling wages and other
terms and conditions of employment; and whenever necessary, the minimum wage rates shall be adjusted in a fair and
equitable manner, considering existing regional disparities in the cost of living and other socio-economic factors and the
national economic and social development plans. The State shall promote collective bargaining as the primary mode of
settling wages and other terms and conditions of employment; and whenever necessary, the minimum wage rates shall be
adjusted in a fair and equitable manner, considering existing regional disparities in the cost of living and other socio-
economic factors and the national economic and social development plans.
6. Penalty for violation
RA 6727 Sec 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any
of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine
not exceeding twenty five thousand pesos (P25,000.00) and/or imprisonment of not less than one (1) year nor more than
two (2) years: Provided, That any person convicted under this Act shall not be entitled to the benefits provided for under
the Probations Law. If the violation is committed by a corporation, trust or firm, partnership, association or any other
entity, the penalty of imprisonment shall be imposed on the entity's responsible officers, including, but not limited to, the
president, vice-president, chief executive officer, general manager, managing director or partner.
RA 8188. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the
prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine not
less than Twenty-five thousand pesos (P25,000) nor more than One hundred thousand pesos (P100,000) or
imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the
discretion of the court: Provided, That any person convicted under this Act shall not be entitled to the benefits provided
for under the Probation Law. The employer concerned shall be ordered to pay an amount equivalent to double the
unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the
criminal liability imposable under this Act. If the violation is committed by a corporation, trust or firm, partnership,
association or any other entity the penalty of imprisonment shall be imposed upon the entity's responsible officers,
including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or
partner.
c. Wage payment and protection
1. Form of payment
LC, 102. Forms of payment. - No employer shall pay the wages of an employee by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee.
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because of special circumstances as specified in appropriate regulations to be
issued by the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.
CC, 1705. The laborer's wages shall be paid in legal currency.
OR, Book III Rule VIII Sec. 1. Manner of wage payment. As a general rule, wages shall be paid in legal tender and the
use of tokens, promissory notes, vouchers, coupons, or any other form alleged to represent legal tender is absolutely
prohibited even when expressly requested by the employee.
OR, Book III Rule VIII Sec. 2. Payment by check. Payment of wages by bank checks, postal checks or money orders is
allowed where such manner of wage payment is customary on the date of the effectivity of the Code, where it is so
stipulated in a collective agreement, or where all of the following conditions are met:
(a) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace;
35
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


(b) The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly
from the arrangement;
(c) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time
shall be considered as compensable hours worked if done during working hours; and
(d) The payment by check is with the written consent of the employees concerned if there is no collective agreement
authorizing the payment of wages by bank checks.
Congson v. NLRC. Undoubtedly, petitioner's practice of paying the private respondents the minimum wage by means of
legal tender combined with tuna liver and intestines runs counter to the above cited provision of the Labor Code. The fact
that said method of paying the minimum wage was not only agreed upon by both parties in the employment agreement
but even expressly requested by private respondents, does not shield petitioner. Article 102 of the Labor Code is clear.
Wages shall be paid only by means of legal tender. The only instance when an employer is permitted to pay wages informs
other than legal tender, that is, by checks or money order, is when the circumstances prescribed in the second paragraph
of Article 102 are present.
2. Time of payment
LC, 103. Time of payment. - Wages shall be paid at least once every two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employers control, payment of
wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such
force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month.
The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall be
subject to the following conditions, in the absence of a collective bargaining agreement or arbitration award: (1) That
payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed; (2) That
final settlement is made upon completion of the work.
OR, Book III Rule VIII Sec. 3. Time of payment. (a) Wages shall be paid not less than once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16) days, unless payment cannot be made with such regularity due to
force majeure or circumstances beyond the employer's control in which case the employer shall pay the wages
immediately after such force majeure or circumstances have ceased. (b) In case of payment of wages by results involving
work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen days in
proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work.
3. Place of payment
LC, 104. Place of payment. - Payment of wages shall be made at or near the place of undertaking, except as otherwise
provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure
greater protection of wages
OR, Book III Rule VIII Sec. 4. Place of payment. As a general rule, the place of payment shall be at or near the place of
undertaking. Payment in a place other than the work place shall be permissible only under the following circumstances:
(a) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order
conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity
rendering payment thereat impossible;
(b) When the employer provides free transportation to the employees back and forth; and
(c) Under any other analogous circumstances; Provided, That the time spent by the employees in collecting their
wages shall be considered as compensable hours worked;
(d) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage clinic, dance
hall, or other similar places or in places where games are played with stakes of money or things representing
money except in the case of persons employed in said places.
4. Person to pay
LC, 105. Direct payment of wages. - Wages shall be paid directly to the workers to whom they are due, except: (a) In cases
of force majeure rendering such payment impossible or under other special circumstances to be determined by the
Secretary of Labor and Employment in appropriate regulations, in which case, the worker may be paid through another
person under written authority given by the worker for the purpose; or (b) Where the worker has died, in which case, the
employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate
proceedings. The claimants, if they are all of age, shall execute an affidavit attesting to their relationship to the deceased
and the fact that they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be
executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be presented to the employer who shall
make payment through the Secretary of Labor and Employment or his representative. The representative of the Secretary
of Labor and Employment shall act as referee in dividing the amount paid among the heirs. The payment of wages under
this Article shall absolve the employer of any further liability with respect to the amount paid.
OR, Book III Rule VIII Sec. 5. Direct payment of wages. Payment of wages shall be made direct to the employee
entitled thereto except in the following cases: (a) Where the employer is authorized in writing by the employee to pay his
wages to a member of his family; (b) Where payment to another person of any part of the employee's wages is authorized
by existing law, including payments for the insurance premiums of the employee and union dues where the right to
check-off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the
individual employees concerned; or (c) In case of death of the employee as provided in the succeeding Section
OR, Book III Rule VIII Sec. 6. Wages of deceased employee. The payment of the wages of a deceased employee shall be
made to his heirs without the necessity of intestate proceedings. When the heirs are of age, they shall execute an affidavit
attesting to their relationship to the deceased and the fact that they are his heirs to the exclusion of all other persons. In
case any of the heirs is a minor, such affidavit shall be executed in his behalf by his natural guardian or next of kin. Upon
presentation of the affidavit to the employer, he shall make payment to the heirs as representative of the Secretary of
Labor and Employment.
Bermiso v. Escano. There is no question that the work of stevedoring was undertaken by the laborers, not in their
individual capacities, but as a group. The contract to perform the service was made by the leader of the group, for and on
behalf of the latter, not for each and every one of them individually. For the sake of convenience it was necessary that the
group must be large enough to be able to perform the task of loading and unloading in as short time as possible. As the
group undertook to render service for vessels other than those of the Hijos de F. Escao, it was absolutely necessary that
some sort of leadership be instituted in the group to determine which of the members will work for one vessel and which
for another. Leadership is also essential to obtain work for the group as employers naturally prefer to deal with a leader
of a group than with each member individually. Leadership was, therefore, essential not only to secure work for the group
36
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


but to arrange the laborers who are to perform the service. The leadership must be paid for and it was not shown that the
head of the groups got the lion's share of the cost of the service rendered. Under the circumstances we are not prepared to
say that the provision of law on direct payment of wages has been violated.
d. Wage prohibitions
1. Prohibition against interference in disposal of wages
LC, 112. Non-interference in disposal of wages. - No employer shall limit or otherwise interfere with the freedom of any
employee to dispose of his wages. He shall not in any manner force, compel, or oblige his employees to purchase
merchandise, commodities or other property from any other person, or otherwise make use of any store or services of
such employer or any other person.
OR, Book III Rule VIII Sec. 9. Labor-only contracting. (a) Any person who undertakes to supply workers to an
employer shall be deemed to be engaged in labor-only contracting where such person: (1) Does not have substantial
capital or investment in the form of tools, equipment, machineries, work premises and other materials; and (2) The
workers recruited and placed by such person are performing activities which are directly related to the principal business
or operations of the employer in which workers are habitually employed. (b) Labor-only contracting as defined herein is
hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the
employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed
by him. (c) For cases not falling under this Rule, the Secretary of Labor and Employment shall determine through
appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case
and after considering the operating needs of the employer and the rights of the workers involved. In such case, he may
prescribe conditions and restrictions to insure the protection and welfare of the workers.
2. Prohibition against wage deduction
LC, 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the
wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the
employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
OR, Book III Rule VIII Sec. 10. Payment of wages in case of bankruptcy. Unpaid wages earned by the employees
before the declaration of bankruptcy or judicial liquidation of the employer's business shall be given first preference and
shall be paid in full before other creditors may establish any claim to a share in the assets of the employer.
Apodaca v. NLRC. Unpaid subscriptions are not due and payable until a call is made by the corporation for the payment
through a board resolutions. As such, an obligation arising from non-payment of stocj subscriptions to a corporation
cannot be offset against a money claim of an employee against the employer.
Genesis Transport v. UMMGT & Taroy. Albeit the amounts representing tollgate fees were deducted from gross
revenues and not directly from Taroys commissions, the labor tribunal and the appellate court correctly held that the
withholding of those amounts reduced the amount from which Taroys 9% commission would be computed. Such a
computation not only marks a change in the method of payment of wages, resulting in a diminution of Taroys wages in
violation of Article 113 vis--vis Article 100 of the Labor Code, as amended. It need not be underlined that without Taroys
written consent or authorization, the deduction is considered illegal. Besides, the invocation of the rule on company
practice is generally used with respect to the grant of additional benefits to employees, not on issues involving
diminution of benefits.
3. Prohibition against requirement to make deposits for loss or damage
LC, 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from which deductions shall
be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer, except
when the employer is engaged in such trades, occupations or business where the practice of making deductions or
requiring deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor and
Employment in appropriate rules and regulations.
LC, 115. Limitations. - No deduction from the deposits of an employee for the actual amount of the loss or damage shall be
made unless the employee has been heard thereon, and his responsibility has been clearly shown.
OR, Book III Rule VIII Sec. 11. Attorney's fees. Attorney's fees in any judicial or administrative proceedings for the
recovery of wages shall not exceed 10 percent of the amount awarded. The fees may be deducted from the total amount
due the winning party.
Dentech v. NLRC. An employer is prohibited from requiring his employees to file a cash bond or to make deposits for loss
or damae to tools or equipments.
Five J Taxi v. NLRC. It can be deduced therefrom that the said article provides the rule on deposits for loss or damage to
tools, materials or equipments supplied by the employer. Clearly, the same does not apply to or permit deposits to defray
any deficiency which the taxi driver may incur in the remittance of his "boundary." Also, when private respondents
stopped working for petitioners, the alleged purpose for which petitioners required such unauthorized deposits no longer
existed. In other case, any balance due to private respondents after proper accounting must be returned to them with
legal interest.
4. Prohibition against withholding of wages
LC, 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for any person, directly or indirectly, to
withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the workers consent.
CC, 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.
5. Prohibition against deduction to ensure employment
LC, 117. Deduction to ensure employment. - It shall be unlawful to make any deduction from the wages of any employee
for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or
retention in employment.
6. Prohibition against retaliatory measures
LC, 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits,
discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding
under this Title or has testified or is about to testify in such proceedings.
7. Prohibition against false reporting
37
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


LC, 119. False reporting. - It shall be unlawful for any person to make any statement, report, or record filed or kept
pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect.
OR, Book III Rule X Sec. 13. False reporting. It shall be unlawful for any employer or any person to make any false
statement, report or record on matters required to be kept or maintained pursuant to the provisions of this Rule.
8. Prohibition against keeping of employees records in a place other than the workplace
OR, Book III Rule X Sec. 11. Place of records. All employment records of the employees shall be kept and maintained
by the employer in or about the premises of the work place. The premises of a work-place shall be understood to mean
the main or branch office of the establishment, if any, depending upon where the employees are regularly assigned. The
keeping of the employee's records in another place is prohibited.
OR, Book III Rule X Sec. 12. Preservation of records. All employment records required to be kept and maintained by
employers shall be preserved for at least three (3) years from the date of the last entry in the records.
South Motorists v. Tosoc. The employment records should have been kept in the Naga office where they worked as this
is where they were regularly assigned and not in Manila.
9. Prohibition against garnishment/execution
CC, 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter,
clothing and medical attendance.
Gaa v. CA. In its broadest sense, the word "laborer" includes everyone who performs any kind of mental or physical labor,
but as commonly and customarily used and understood, it only applies to one engaged in some form of manual or physical
labor. That is the sense in which the courts generally apply the term as applied in exemption acts, since persons of that
class usually look to the reward of a day's labor for immediate or present support and so are more in need of the
exemption than are other.
e. Worker preference in the event of bankruptcy
LC, 110. Worker preference in case of bankruptcy. - In the event of bankruptcy or liquidation of an employers business, his
workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other
creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989).
OR, Book III Rule VIII Sec. 7. Civil liability of employer and contractors. Every employer or indirect employer shall be
jointly and severally liable with his contractor or sub-contractor for the unpaid wages of the employees of the latter. Such
employer or indirect employer may require the contractor or sub-contractor to furnish a bond equal to the cost of labor under
contract on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as
the case may be, fail to pay the same.
CC 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.
CC 2241(6). With reference to specific movable property of the debtor, the following claims or liens shall be preferred: Claims
for laborers' wages, on the goods manufactured or the work done
CC 2242 (3). With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and
liens shall be preferred, and shall constitute an encumbrance on the immovable or real right: Claims of laborers, masons,
mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction
or repair of buildings, canals or other works, upon said buildings, canals or other works.
CC 2244(2). With reference to other property, real and personal, of the debtor, the following claims or credits shall be
preferred in the order named: Credits for services rendered the insolvent by employees, laborers, or household helpers for
one year preceding the commencement of the proceedings in insolvency.
CC, 2245. Credits of any other kind or class, or by any other right or title not comprised in the four preceding articles, shall
enjoy no preference.
CC, 2246. Those credits which enjoy preference with respect to specific movables, exclude all others to the extent of the value
of the personal property to which the preference refers.
CC, 2248. Those credits which enjoy preference in relation to specific real property or real rights, exclude all others to the
extent of the value of the immovable or real right to which the preference refers.
CC, 2250. The excess, if any, after the payment of the credits which enjoy preference with respect to specific property, real or
personal, shall be added to the free property which the debtor may have, for the payment of the other credits
Republic v, Peralta. Article 110 of the Labor Code did not sweep away the overriding preference accorded under the scheme
of the Civil Code to tax claims of the government or any subdivision thereof which constitute a lien upon properties of the
Insolvent. It is frequently said that taxes are the very lifeblood of government. The effective collection of taxes is a task of
highest importance for the sovereign. It is critical indeed for its own survival. It follows that language of a much higher degree
of specificity than that exhibited in Article 110 of the Labor Code is necessary to set aside the intent and purpose of the
legislator that shines through the precisely crafted provisions of the Civil Code. It cannot be assumed simpliciter that the
legislative authority, by using in Article 110 the words "first preference" and "any provision of law to the contrary
notwithstanding" intended to disrupt the elaborate and symmetrical structure set up in the Civil Code. Neither can it be
assumed casually that Article 110 intended to subsume the sovereign itself within the term "other creditors" in stating that
"unpaid wages shall be paid in full before other creditors may establish any claim to a share in the assets of employer."
Insistent considerations of public policy prevent us from giving to "other creditors" a linguistically unlimited scope that would
embrace the universe of creditors save only unpaid employees. We, however, do not believe that Article 110 has had no impact
at all upon the provisions of the Civil Code. Bearing in mind the overriding precedence given to taxes, duties and fees by the
Civil Code and the fact that the Labor Code does not impress any lien on the property of an employer, the use of the phrase
"first preference" in Article 110 indicates that what Article 110 intended to modify is the order of preference found in Article
2244, which order relates, as we have seen, to property of the Insolvent that is not burdened with the liens or encumbrances
created or recognized by Articles 2241 and 2242. We have noted that Article 2244, number 2, establishes second priority for
claims for wages for services rendered by employees or laborers of the Insolvent "for one year preceding the commencement
of the proceedings in insolvency." Article 110 of the Labor Code establishes "first preference" for services rendered "during
the period prior to the bankruptcy or liquidation, " a period not limited to the year immediately prior to the bankruptcy or
liquidation. Thus, very substantial effect may be given to the provisions of Article 110 without grievously distorting the
framework established in the Civil Code by holding, as we so hold, that Article 110 of the Labor Code has modified Article 2244
of the Civil Code in two respects: (a) firstly, by removing the one year limitation found in Article 2244, number 2; and (b)
secondly, by moving up claims for unpaid wages of laborers or workers of the Insolvent from second priority to first priority in
the order of preference established I by Article 2244.
38
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


DBP v. NLRC. CC, 110 should be applied in conjunction with the pertinent provisions of the Civil Code and the insolvency Law
to the extent that piece-meal distribution of the assets of the debtor is avoided.
f. Wage recovery/jurisdiction of DOLE Regional Director vis--vis Labor Arbiter
LC, 128. Visitorial and enforcement power.
(a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers,
shall have access to employers records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or
matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings of labor employment and enforcement officers or
industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where
the employer contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection. (As amended by Republic Act No. 7730,
June 2, 1994). An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this Article may be appealed to the latter. In case said order involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company
duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the
order appealed from. (As amended by Republic Act No. 7730, June 2, 1994).
(c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any
unit or department of an establishment when non-compliance with the law or implementing rules and regulations
poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a
hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall
be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned
their salaries or wages during the period of such stoppage of work or suspension of operation.
(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of
the Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority
granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in
accordance with this Article.
(e) Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after
appropriate administrative investigation, be subject to summary dismissal from the service.
(f) The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain
such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.
LC, 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested party, the Regional
Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or
household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint
does not include a claim for reinstatement: Provided further, That the aggregate money claims of each employee or
househelper does not exceed Five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve
the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of,
the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such
sum not paid to the employee or househelper because he cannot be located after diligent and reasonable effort to locate him
within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used
exclusively for the amelioration and benefit of workers. Any decision or resolution of the Regional Director or hearing officer
pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar
days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the
appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules. The
Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and
other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As
amended by Section 2, Republic Act No. 6715, March 21, 1989).
LC, 217. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases; 2.
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and
lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including those of persons in domestic or household service, involving
an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the
39
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by
Section 9, Republic Act No. 6715, March 21, 1989).
LC, 111. Attorneys fees. - (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages recovered. (b) It shall be unlawful for any person to demand or accept, in any
judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed ten percent of the amount of
wages recovered.
OR, Book III Rule X Sec. 1. Visitorial power. The Secretary of Labor and Employment or his duly authorized
representatives, including Labor Regulations Officers or Industrial Safety Engineers, shall have access to employer's records
and premises at any time of the day or night whenever work is being undertaken therein, and right to copy therefrom, to
question any employee, and to investigate any fact, condition or matter relevant to the enforcement of any provision of the
Code and of any labor law, wage order or rules and regulations issued pursuant thereto.
OR, Book III Rule X Sec. 2. Enforcement power. (a) The Regional Director in cases where employer relations shall exist,
shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of
the Code and other labor legislations based on the findings of the Labor Regulation Officers or Industrial Safety Engineers
(Labor Standard and Welfare Officer) and made in the course of inspection, and to issue writs of execution to the appropriate
authority of the enforcement of his order. In line with the provisions of Article 128 in relation to Articles 289 and 290 of the
Labor Code as amended in cases, however, where the employer contests the findings of the Labor Standards and Welfare
Officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the
normal course of inspection, the Regional Director concerned shall indorse the case to the appropriate arbitration branch of
the National Labor Relations Commission for adjudication. (b) The Regional Director shall give the employer fifteen (15) days
within which to comply with his order before issuing a writ of execution. Copy of such order or writ of execution shall
immediately be furnished the Secretary of Labor and Employment.
OR, Book III Rule X Sec. 3. Enforcement power on health and safety of workers. (a) The Regional Director may likewise
order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with
the law, safety order or implementing rules and regulations poses grave and imminent danger to the health and safety of
workers in the workplace. (b) Within 24 hours from issuance of the order of stoppage or suspension, a hearing shall be
conducted to determine whether the order for the stoppage of work or suspension of operation shall be lifted or not. The
proceedings shall be terminated within seventy-two (72) hours and a copy of such order or resolution shall be immediately
furnished the Secretary of Labor and Employment. In case the violation is attributable to the fault of the employer, he shall pay
the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.
OR, Book III Rule X Sec. 4. Power to review. (a) The Secretary of Labor and Employment, at his own initiative or upon
request of the employer and/or employee, may review the order of the Regional Director. The order of the Regional Director
shall be immediately final and executory unless stayed by the Secretary of Labor and Employment upon posting by the
employer of a reasonable cash or surety bond as fixed by the Regional Director. (b) In aid of his power of review, the Secretary
of Labor and Employment may direct the Bureau of Working Conditions to evaluate the findings or orders of the Regional
Director. The decision of the Secretary of Labor and Employment shall be final and executory
OR, Book III Rule X Sec. 5. Interference and injunctions prohibited. It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the exercise of the enforcement power of the Secretary of Labor and
Employment, Regional Director or their duly authorized representatives pursuant to the authority granted by the Code and its
implementing rules and regulations, and no inferior court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with
the Code. In addition to the penalties provided for by the Labor Code, any government employees found guilty of violation or
abuse of authority, shall be subject to the provisions of Presidential Decree No. 6.
Balladares v. Peak Ventures Corp. The DOLE Sec. or his duly authorized representatives is now empowered to hear and
decide, in a summary hearing, any matter involving the recovery of any amount of wages and other monetary claims arising
out of EE-ER relations at the time of the inspection, even if the amount of the money claim exceeds PhP5,000.
Meteoro v. Creative Creatures Inc. The visitorial and enforcement powers of the Secretary, exercised through his
representatives, encompass compliance with all labor standards law and other labor legislation, regardless of the amount of
the claims // Raising lack of jurisdiction alone is not the contest contemplated by the exception clause it is necessary that
the employer contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection
results.
6. Thirteenth month pay PD 851
a. History of the law
Dentech v. NLRC.
PD 851 (1975)
PD 1364 (May 1, 1978) abolished exemptions
MO 28 (August 13, 1986) eliminated PhP1,000 salary ceiling

b. Coverage
RIRR, PD 851 Sec. 1. Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all employers are hereby
required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year.
RIRR, PD 851 Sec. 2. The following employers are still not covered by P.D. No. 851: a. The Government and any of its political
subdivisions, including government-owned and controlled corporations, excepts those corporations operating essentially as
private subsidiaries of the Government; b. Employers already paying their employees a 13th month pay or more in a calendar
year or its equivalent at the time of this issuance; c. Employers of household helpers and persons in the personal service of
another in relation to such workers; and d. Employers of those who are paid on purely commission, boundary, or task basis,
and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance
thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month
pay to such workers.
As used herein, workers paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or
unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.
The term "its equivalent" as used on paragraph (b) hereof shall include Christmas bonus, mid-year bonus, cash bonuses
and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, cost of
living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. Where an
employer pays less than required 1/12th of the employees basic salary, the employer shall pay the difference.
40
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


RIRR, PD 851 Sec. 3. The Labor Code distinguishes a rank-and-file employee from a managerial employee. It provides that a
managerial employee is one who is vested with powers of prerogatives to lay down and execute management policies and/or
to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered rank-and-file employees. The above
distinction shall be used as guide for the purpose of determining who are rank-and-file employees entitled to the mandated
13th month pay.
RIRR, PD 851 Sec. 5. 13th Month Pay for Certain Types of Employees. (a) Employees Paid by Results. Employees who are
paid on piece work basis are by law entitled to the 13th month pay. Employees who are paid a fixed or guaranteed wage plus
commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e., on
both their fixed or guaranteed wage and commission. (b) Those with Multiple Employers. Government employees working
part time in a private enterprise, including private educational institutions, as well as employees working in two or more
private firms, whether on full or part time basis, are entitled to the required 13th month pay from all their private employers
regardless of their total earnings from each or all their employers. (c) Private School Teachers. Private school teachers,
including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of the number
of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year.
RIRR, PD 851 Sec. 6. 13th Month Pay of Resigned or Separated Employee. An employee who has resigned or whose services
were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in
proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar
year up to the time of his resignation or termination from the service. Thus, if he worked only from January up to September
his proportionate 13th month pay should be equivalent of 1/12 his total basic salary he earned during that period. The
payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship.
This is consistent with the principle of equity that as the employer can require the employee to clear himself of all liabilities
and property accountability, so can the employee demand the payment of all benefits due him upon the termination of the
relationship.
RIRR, PD 851 Sec. 7. Non-inclusion in Regular Wage. The mandated 13th month pay need not be credited as part of regular
wage of employees for purposes of determining overtime and premium pays, fringe benefits insurance fund, Social Security,
Medicare and private retirement plans.
RIRR, PD 851 Sec. 8. Prohibitions against reduction or elimination of benefits. Nothing herein shall be construed to authorize
any employer to eliminate, or diminish in any way, supplements, or other employee benefits or favorable practice being
enjoyed by the employee at the time of promulgation of this issuance.
PD 851 Sec 1. All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a
month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every year.
PD 851 Sec 2. Employers already paying their employees a 13th-month pay or its equivalent are not covered by this Decree.
Archilles Mfg. v. NLRC. Paragraph 6 of the Revised Guidelines on the Implementation of the 13th Month Pay Law (P. D. 851)
provides that "(a)n employee who has resigned or whose services were terminated at any time before the payment of the 13th
month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from
the time he started working during the calendar year up to the time of his resignation or termination from the
service . . . The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee
relationship. This is consistent with the principle of equity that as the employer can require the employee to clear himself of all
liabilities and property accountability, so can the employee demand the payment of all benefits due him upon the termination
of the relationship." Furthermore, Sec. 4 of the original Implementing Rules of P.D. 851 mandates employers to pay their
employees a 13th month pay not later than the 24th of December every year provided that they have worked for at least one
(1) month during a calendar year. In effect, this statutory benefit is automatically vested in the employee who has at least
worked for one month during the calendar year. As correctly stated by the Solicitor General, such benefit may not be lost or
forfeited even in the event of the employee's subsequent dismissal for cause without violating his property rights.
c. Rationale
WHEREAS, it is necessary to further protect the level of real wages from the ravage of worldwide inflation;
WHEREAS, there has been no increase in the legal minimum wage rates since 1970;
WHEREAS, the Christmas season is an opportune time for society to show its concern for the plight of the working masses so
they may properly celebrate Christmas and New Year.
d. Amount and date of payment
RIRR, PD 851 Sec. 4. Amount and payment of 13th Month Pay
(a) Minimum of the Amount. The minimum 13th month pay required by law shall not be less than one-twelfth of the
total basic salary earned by an employee within a calendar year. For the year 1987, the computation of the 13th month pay
shall include the cost of living allowances (COLA) integrated into the basic salary of a covered employee pursuant to Executive
Order 178.
E.O. No. 178 provides, among other things, that the P9.00 of the daily COLA of P17.00 for non-agricultural workers shall
be integrated into the basic pay of covered employees effective 1 May 1987, and the remaining P8.00 effective 1 October 1987.
For establishments with less than 30 employees and paid-up capital of P500,000 or less, the integration of COLAs shall be as
follows: P4.50 effective on 1 May 1987; P4.50 on 1 October 1987; and P8.00 effective 1 January 1988. Thus, in the computation
of the 13th month pay for 1987, the COLAs integrated into the basic pay shall be included as of the date of their integration.
Where the total P17.00 daily COLA was integrated effective 1 May 1987 or earlier the inclusion of said COLA as part of the
of the basic pay for the purpose of computing the 13th month pay shall be reckoned from the date of actual integration.
The "basic salary" of an employee for the purpose of computing the 13th month pay shall include all remunerations or
earning paid by this employer for services rendered but does not include allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave
credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related
benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective
agreement, company practice or policy, the same are treated as part of the basic salary of the employees.
(b) Time of Payment. The required 13th month pay shall be paid not later than December 24 of each year. An
employer, however, may give to his employees one half () of the required 13th month pay before the opening of the regular
school year and the other half on before the 24th of December of every year. The frequency of payment of this monetary
benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the
employees.
41
Labor I Midterms Reviewer
Prof. P. Daway
1 semester, AY 10-11
st

Janz Hanna Ria N. Serrano


1) Basic wage/commissions
PD 851 Sec. 4, supra.
Songco v. NLRC, supra
Boie Takeda v. dela Serna, supra
Phil. Duplicators v. NLRC, supra
IBC v. Panganiban. While the filing of Civil Case No. Q-89-2244 could have interrupted the running of the three-year
prescriptive period, its consequent dismissal by the CA in CA-G.R. SP No. 23821 due to lack of jurisdiction effectively
canceled the tolling of the prescriptive period within which to file his money claim, leaving respondent in exactly the same
position as though no civil case had been filed at all.17 The running of the three-year prescriptive period not having been
interrupted by the filing of Civil Case No. Q-89-2244, respondent's cause of action had already prescribed on September 2,
1991, three years after his cessation of employment on September 2, 1988. Consequently, when respondent filed his
complaint for illegal dismissal, separation pay, retirement benefits, and damages in July 24, 1996, his claim, clearly, had
already been barred by prescription.
Letran Calamba v. NLRC. In the same manner that payment for overtime work and work performed during special
holidays is considered as additional compensation apart and distinct from an employee's regular wage or basic salary, an
overload pay, owing to its very nature and definition, may not be considered as part of a teacher's regular or basic salary,
because it is being paid for additional work performed in excess of the regular teaching load. The peculiarity of an
overload lies in the fact that it may be performed within the normal eight-hour working day. This is the only reason why
the DOLE, in its explanatory bulletin, finds it proper to include a teacher's overload pay in the determination of his or her
13th-month pay. However, the DOLE loses sight of the fact that even if it is performed within the normal eight-hour
working day, an overload is still an additional or extra teaching work which is performed after the regular teaching load
has been completed. Hence, any pay given as compensation for such additional work should be considered as extra and
not deemed as part of the regular or basic salary.
2) Substitute payment
PD 851 Sec 2. Employers already paying their employees a 13th-month pay or its equivalent are not covered by this
Decree.
Framanlis Farms v. MOLE. Under Section 3 of PD 851, yearly bonuses and other benefits in kind and cash were not a
proper substitute for the 13th month pay required by law.
7. Bonus
a. Nature
Phil. Duplicators v. NLRC. A bonus is an amount granted and paid ex gratia to the employee; its payment constitutes an act of
enlightened generosity and self-interest on the part of the employer, rather than as a demandable or enforceable obligation.
b. Definition; when demandable
Protacio v. Laya Mananghaya. By definition, a "bonus" is a gratuity or act of liberality of the giver. It is something given in
addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his
industry and loyalty which contributed to the success of the employers business and made possible the realization of profits.
Generally, a bonus is not a demandable and enforceable obligation. It is so only when it is made part of the wage or salary or
compensation. When considered as part of the compensation and therefore demandable and enforceable, the amount is
usually fixed. If the amount would be a contingent one dependent upon the realization of the profits, the bonus is also not
demandable and enforceable. In the instant case, petitioners claim that the year-end lump sum represented the balance of his
total compensation package is incorrect. The fact remains that the amounts paid to petitioner on the two occasions varied and
were always dependent upon the firms financial position.
Lepanto Ceramics v. LCEA. the argument of petitioner that the giving of a Christmas bonus is a management prerogative
holds no water. There were no conditions specified in the CBA for the grant of said benefit contrary to the claim of petitioner
that the same is justified only when there are profits earned by the company. As can be gleaned from the CBA, the payment of
Christmas bonus was not contingent upon the realization of profits. It does not state that if the company derives no profits,
there are no bonuses to be given to the employees. In fine, the payment thereof was not related to the profitability of business
operations. Moreover, it is undisputed that petitioner, aside from giving the mandated 13th month pay, has further been giving
its employees an additional Christmas bonus at the end of the year since 1998 or before the effectivity of the CBA in September
1999. Clearly, the grant of Christmas bonus from 1998 up to 2001, which brought about the filing of the complaint for alleged
non-payment of the 2002 Christmas bonus does not involve the exercise of management prerogative as the same was given
continuously on or about Christmas time pursuant to the CBA. Consequently, the giving of said bonus can no longer be
withdrawn by the petitioner as this would amount to a diminution of the employees existing benefits.