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iyaPART I: LABOR STANDARDS I.

INTRODUCTION CONCEPTS TO LEGAL

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a. Definition of Terms: Labor Legislation- consists of statutes, regulations and jurisprudence governing the relations between capital and labor. 2. Labor Standards Law- sets out the minimum terms, conditions, and benefits of employment, which employers must provide or comply with and to which the employees are entitled to as a matter of right. 3. Labor Relations Law- defines the statute, rights, duties and the institutional mechanisms that govern the individual and collective interactions of employers, employees or their representatives. It intends to stabilize the relations of the employees and their employers, adjust differences between them through the encouragement of collective bargaining and settle labor disputes through conciliation, mediation and arbitration. 4. Welfare and Social Legislationstatutes that govern the effects of employment. It involves long range benefits and covers employment for profit or non-profit. It affects the life of employee. 5. Labor - is the exertion by human beings of physical or mental efforts, or both, towards the production of goods and services. Labor also means that sector or groups in a society which derives its livelihood chiefly from rendition of work or services in exchange for compensation under managerial direction. 6. Social Justiceis neither communism nor despotism nor atomism nor anarchy but the humanization of laws and the equalization of the social and economic forces by the state so that justice in its rational and objectively secular conception may at least be approximated. Purpose: Promotion of the welfare of all the people and adoption by the government of measures to insure economic of all the elements of society.

Doctrine of Compassionate Justice- social justice policy mandates a compassionate attitude toward working class in its relation to management. In calling for the protection to labor, the Constitution does not condone wrongdoing by the employee, it nevertheless urges a moderation of the sanctions that may be applied to him in the light of the many disadvantages that weigh heavily on him like an albatross on his neck. (Gandara Mill Supply vs. NLRC). 8. Labor- exertion by human beings of physical or mental efforts or both towards the production of goods and services. Labor also means that sector or groups in a society which derives its livelihood chiefly from rendition of work or services in exchange for compensation under managerial direction. b. Constitutional Provisions Concerning Labor: Article II, Section 18State affirms labor as a primary social economic force. It shall protect the right of workers and promote their welfare. Article III, Section 8The right of the people, including those employed in the public or private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Article XII, Section 12State shall promote preferential use of Filipino Labor, domestic materials and locally produced goods, and adopt measures that held make them more competitive. Article XIII, Section 3 (1) State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. (2) State shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to security of tenure, human

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. (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. (4) 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 on investments, and to expansion and growth. Article XIII, Section 14The State shall protect the working women by providing safe and healthful working conditions, taking into account their material functions, and provide such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. c. Basic Rights of Workers: 1. Work under humane conditions; 2. Organize; 3. Conduct collective bargaining or negotiation with management; 4. Receive living wage; 5. Engage in peaceful concerted activities, including strike in accordance with law; 6. Enjoy security of tenure; 7. Participate in policy and decisionmaking processes affecting their rights and benefits as may be provided by law; 8. Share in the fruits of the production. d. Interest Management 1. Reasonable return of capital; 2. Gain profit; 3. Hire and terminate employees of

Facts: Respondent Union filed a Notice of Strike with (BLR) on ground of ULP consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing employees to retract their membership with the union and restraining non-union members from joining the union. The MOLE assumed jurisdiction over the dispute. Colgate- Palmolive Co. pointed out that the formation of the union and the membership therein of Sayson, Reynante and Mejia were not in any manner connected with the companys decision to dismiss the three; that the fact that their dismissal came at a time when the alleged union was being formed was purely coincidental. Public respondent Minister of Labor ordered the reinstatement of the 3 salesmen to the company on the ground that the dismissed employees were the first offenders. PETITIONERs CONTENTION: Respondent Minister committed grave abuse of discretion when, notwithstanding his very own finding that there was just cause for the dismissal of the 2 salesmen, he nevertheless ordered their reistatement. Issue: WON the MOLE is correct reinstating the 3 erring employees. Ruling: The order of the respondent Minister to reinstate the employees despite a clear finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. Under the law, respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. In the case at bench, to order in

COLGATE PALMOLIVE PHILIPPINES vs. BLAS F. OPLE G.R. No. 73681 June 30, 1988 PARAS

the reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage unequal protection of the laws as a managerial employee of petitioner company involved in the same incident was already dismissed and was not ordered to be reinstated. As stated by in a decided case "an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest." Thus, the order of MOLE is reversed and set aside. e. Balancing of Interest thru regulation: The State, through its inherent police power can regulate the labor relations law to promote general welfare. In protecting the labor, the State shall not disregard the capital so as to result to its destruction. Though protecting the welfare of the labor is the primordial consideration of the State; the State also recognized the important role being played by the capital in the national development. Declaration of Basic Policy- (Art. 3, LC) The State shall: afford protection to labor; promote full employment; regulate the relations between workers and employers; assure the right of the workers to self-organization, security of tenure, collective bargaining, and just and humane conditions of work; and ensure equal work opportunities regardless of age, sex, or creed. g. Basis of Labor Law:

justice collides with the equal protection clause, the law should accord more sympathy and compassion to the less privileged workingman. h. Construction/ Interpretation in Favor of Labor (Art. 4) In interpreting Labor Code provisions, the workingmans welfare should be the primordial and paramount consideration. Article 4 of the Labor Code provides that all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor. If doubts exist between the evidence presented by the employer and the employee, the doubt should be resolved in favor of the employee. The State is bound under the Constitution to afford full protection to labor and when conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence of the latter should be counterbalanced with the sympathy and compassion the law accords the less privileged workingman. This is only fair if the worker is to be given the opportunity and the right to assert and defend his cause, not as a subordinate, but as part of management with which he can negotiate on even plane. Thus, labor is not a mere employee of capital but its active and equal partner. (Fuentes vs. NLRC, 266 S 24). EASTERN SHIPPING LINES vs. POEA G.R. NO. 76633 OCT. 18, 1988 CRUZ Facts: Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan. His widow sued for damages under EO 707 and MC No. 2 of the POEA. The petitioner Eastern Shipping, as owner of the vessel, argued that the complaint was cognizable not by the POEA but by the SSS and should have

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1. Police Power- The regulation of


liberty and property rights of individuals for the promotion and general welfare of the people. 2. Social Justice- In accordance with the state policy of affording full protection to labor, when social

been filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties, ruled in favor of the complainant. The award consisted of death benefits and burial expenses. The award was made by the POEA pursuant to MC 2. Such award for seamen is separate and distinct from, and will be in addition to whatever benefits which the seamen is entitled to under the Philippine laws. This circular prescribed a standard contract to be adopted by both foreign and domestic shipping companies in the hiring of the Filipino seamen for overseas employment. Hence, this petition. PETITIONERs CONTENTION: The company did not enter into such kind of contract (MC 2) with Saco. Issue: WON petitioner entered into such kind of contract with Saco.

employment of any Filipino seamen on board any ocean-going vessel are advised to adopt and use this employment contract and to desist from using any other format of employment contract effective that date." Second, even if it had not done so, the provisions of the said circular are nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. It is not denied that the private respondent has been receiving a monthly death benefit pension and that she was also paid a funeral benefit by the SSS. In addition, as already observed, she also received burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under MC 2. Petition is dismissed. MANILA ELECTRIC COMPANY vs. NLRC G.R. No. 78763 July 12, 1989 MEDIALDEA Facts: Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated. A certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peafrancia Subdivision. Signo facilitated the processing of the said application as well as the required documentation for said application at Rizal. In consideration thereof, Signo received from Fernando de Lara the amount of P7,000. Signo thereafter filed the application for electric services with the Power Sales Division of the company. It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's residence, certain employees of the company, including Signo, made it

Ruling: Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line with the express mandate of the Labor Code and the principle that those with less in life should have more in law. When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can negotiate on even plane. Labor is not a mere employee of capital but its active and equal partner. In the case at bench, the contention of petitioner is untenable. First, Eastern should have done such a contract as required by MC 2. MC 2 specifically declared that "all parties to the

appear in the application that the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter. As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year. Meralco conducted an investigation of the matter and found Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated. Signo filed a complaint for illegal dismissal. NLRC ruled in favor of Signo and ordered his reinstatement. Hence, this petition for certiorari. PETITIONER's CONTENTION: The acts of Signo constituted breach of trust and caused the petitioner company economic losses resulting from the unbilled electric consumption of de Lara Issue: WON Signo should be dismissed. Ruling: The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits. In the case at bench, there is no question that herein Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the offense. However, the dismissal should not be meted to Signo considering his 20 years of service in the employ of petitioner, without any previous derogatory record, in addition to the fact

that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales Division. Notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor." Petition is dismissed. i. Rules and Regulations (Art. 5) All rules and regulations issued by the DOLE shall become effective 15 days after announcement of their adoption in newspapers of general circulation. Every agency shall file with the UP Law Center 3 certified copies of every ruled adopted by it. (Sec. 3, Chapter 2, RAC) j. Applicability of Labor Code Provisions (Art. 6) General Rule- Applies alike to all workers, whether agricultural or nonagricultural. ExceptionAll government employees including employees of government-owned or controlled corporations with original charters shall

be governed by Civil Service Law, its Rules and Regulations. GOCCs with original charters are governed by Civil Service Law; while GOCCs not directly chartered or created by special law but were acquired or taken over by corporations created under special law, are governed by the Labor Code. Corporate Officers are governed by the SEC Regulation Code. II. EMPLOYER-EMPLOYEE RELATIONSHIP a. Four-fold test in determining employeremployee relationship 1. Selection and engagement of employee 2. Payment of Wages 3. Power of Dismissal 4. Control Test Of the above, control test is commonly regarded as the most crucial and determinative indicator of the presence or absence of the ER-EER. The right of control test is where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. NOTE: Not every form of control will have the effect of establishing an employeremployee relationship. A line should be drawn between: a. Rules that merely serve as guidelines, which only promote the result. In such case, no employeremployee relationship exists. b. Rules that fix the methodology and bind or restrict the party hired to the use of such means of methods. These address both the result and the means employed to achieve it and hence, employer-employee relationship exists. (Insular Life vs. NLRC, 179 S 459) PAZ MARTIN JO vs. NLRC and PETER MEJILA G.R. No. 121605 February 2, 2000 QUISUMBING

Facts: Private respondent Peter Mejila worked as barber on a piece rate basis at Dina's Barber Shop. In 1970, the owner, Dina Tan, sold the barbershop to petitioners Paz Martin Jo and Cesar Jo. All the employees, including private respondent, were absorbed by the new owners. The name of the barbershop was changed to Windfield Barber Shop. The owners and the barbers shared in the earnings of the barber shop. The barbers got 2/3 of the fee paid for every haircut or shaving job done, while 1/3 went to the owners of the shop. In 1977, petitioners designated private respondent as caretaker of the shop because the former caretaker became physically unfit. Private respondent's duties as caretaker, in addition to his being a barber, were: (1) to report to the owners of the barbershop whenever the airconditioning units malfunctioned and/or whenever water or electric power supply was interrupted, (2) to call the laundry woman to wash dirty linen; (3) to recommend applicants for interview and hiring; (4) to attend to other needs of the shop. For this additional job, he was given an honorarium equivalent to one-third (1/3) of the net income of the shop. As a caretaker, private respondent received monthly honorarium. In November 1992, private respondent had an altercation with his co-barber, Jorge Tinoy. The bickerings became serious so that Private respondent reported the matter to Atty. Allan Macaraya of the labor department. Atty. Macaraya directed petitioners' counsel, Atty. Prudencio Abragan, to thresh out the problem. During the mediation meeting held at Atty. Abragan's office a new twist was added. Despite the assurance that he was not being driven out as caretakerbarber, private respondent demanded payment for several thousand pesos as his separation pay and other monetary benefits. Meanwhile, private respondent continued reporting for work at the barbershop. But, on January 2, 1993, he turned over the duplicate keys of the shop to the cashier and took away all his belongings therefrom. On January 8, 1993, he began working as a regular barber at the newly opened Goldilocks Barbershop

also in Iligan City. Private respondent filed a complaint for illegal dismissal. Significantly, the complaint did not seek reinstatement as a positive relief. Labor Arbiter found that private respondent was an employee of petitioners, and that private respondent was not dismissed but had left his job voluntarily because of his misunderstanding with his co-worker.The Labor Arbiter dismissed the complaint, but ordered petitioners to pay private respondent his 13th month pay and attorney's fees. NLRC sustained the labor arbiter's finding as to the existence of employer-employee relationship between petitioners and private respondent, but it ruled that private respondent was illegally dismissed. Hence, the petitioners were ordered to reinstate private respondent and pay the latter's backwages, 13th month pay, separation pay and attorney's fees. Hence, this petition. Issue: WON there is employer-employee relationship between petitioners and private respondent. Ruling: In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall consideration. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the employer has the right to wield that power. In the case at bench, there is no clear showing that petitioners and private respondent had intended to pursue a relationship of industrial partnership, thus, there is no doubt that private respondent was employed by petitioners as caretakerbarber. Initially, petitioners, as new

owners of the barbershop, hired private respondent as barber by absorbing the latter in their employ. Undoubtedly, the services performed by private respondent as barber is related to, and in the pursuit of the principal business activity of petitioners. Later on, petitioners tapped private respondent to serve concurrently as caretaker of the shop. Certainly, petitioners had the power to dismiss private respondent being the ones who engaged the services of the latter. In fact, private respondent sued petitioners for illegal dismissal, albeit contested by the latter. As a caretaker, private respondent was paid by petitioners wages in the form of honorarium, originally, at the rate of 1/3 of the shop's net income but subsequently pegged at a fixed amount per month. As a barber, private respondent earned 2/3 of the fee paid per haircut or shaving job done. Furthermore, the following facts indubitably reveal that petitioners controlled private respondent's work performance, in that: (1) private respondent had to inform petitioners of the things needed in the shop; (2) he could only recommend the hiring of barbers and masseuses, with petitioners having the final decision; (3) he had to be at the shop at 9:00 a.m. and could leave only at 9:00 p.m. because he was the one who opened and closed it, being the one entrusted with the key. These duties were complied with by the private respondent upon instructions of petitioners. Moreover, such task was crucial to the business operation of petitioners. Hence, there was enough basis to declare private respondent an employee of petitioners. The Supreme Court found that there was no dismissal of, but abandonment of work by private respondent. Hence, the petition is granted. SOCIAL SECURITY SYSTEM vs. CA and CONCHITA AYALDE G.R. No. 100388. December 14, 2000 YNARESSANTIAGO Facts: In a petition before the Social Security Commission, Margarita Tana, widow of the

late Ignacio Tana, Sr., alleged that her husband was, before his demise, an employee of Conchita Ayalde as a farmhand in the 2 sugarcane plantations she owned (Had. B-70) and Hda. B-15-M which leased from the University of the Philippines. She further alleged that Tana worked continuously 6 days a week, 4 weeks a month, and for 12 months every year between 1961-1979. For his labor, Tana allegedly received a regular salary according to the minimum wage prevailing at the time. She further alleged that throughout the given period, social security contributions, as well as medicare and employees compensation premiums were deducted from Tanas wages. It was only after his death that Margarita discovered that Tana was never reported for coverage, nor were his contributions/premiums remitted to SSS. Consequently, she was deprived of the burial grant and pension benefits accruing to the heirs of Tana had he been reported for coverage. The SSS revealed that neither Hda. B-70 nor respondents Ayalde and Maghari were registered membersemployers of the SSS, and consequently, Ignacio Tana, Sr. was never registered as a member-employee. Likewise, SSS records reflected that there was no way of verifying whether the alleged premium contributions were remitted since the respondents were not registered members-employers. Antero Maghari raised the defense that he was a mere employee who was hired as an overseer of Hda. B-70 and as such, his job was limited to those defined for him by the employer which never involved matters relating to the SSS. Ayalde belied the allegation that Ignacio Tana, Sr. was her employee, admitting only that he was hired intermittently as an independent contractor to plow, harrow, or burrow Hda. No. Audit B-15-M. Tana used his own carabao and other implements, and he followed his own schedule of work hours. Social Security Commission ruled in favor of Tana and absolved Maghari from liability because he is a mere employee of Conchita Ayalde. CA reversed the Social Security Commission and declaring that the late Ignacio Tana, Sr. was an

independent contractor, hence, petition for review on certiorari.

this

Issue: WON an agricultural laborer who was hired on pakyaw basis can be considered an employee entitled to compulsory coverage and corresponding benefits under the Social Security Law. Ruling: The mandatory coverage under the SSS Law is premised on the existence of an employer-employee relationship, and Section 8(d) defines an employee as any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services where there is an employer-employee relationship. The essential elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power of control with regard to the means and methods by which the work is to be accomplished, with the power of control being the most determinative factor. In the case at bench, there is no question that Tana was selected and his services engaged by either Ayalde herself, or by Antero Maghari, her overseer. Corollarily, they also held the prerogative of dismissing or terminating Tanas employment. As regards the payment of wages, Margarita Tana and her corroborating witnesses testified that her husband was paid daily wages per quincena as well as on pakyaw basis. Ayalde insists that Tana was paid solely on pakyaw basis. To support her claim, she presented payrolls. The records readily show that the exhibits offered are not complete, and are but a mere sampling of payrolls. While the names of the supposed laborers appear therein, their signatures are nowhere to be found. The witnesses did not waver in their assertion that while Tana was hired by Ayalde as an arador on pakyaw basis, he was also

paid a daily wage which Ayaldes overseer disbursed every 15 days. Moreover, Tana worked continuously for Ayalde, not only as arador on pakyaw basis, but as a regular farmhand, doing backbreaking jobs for Ayaldes business. There is no shred of evidence to show that Tana was only a seasonal worker, much less a migrant worker. Ayalde herself testified that Tana and his family resided in the plantation. If he was a mere pakyaw worker or independent contractor, then there would be no reason for Ayalde to allow them to live inside her property for free. Secondly, Ayalde made much ado of her claim that Tana could not be her employee because she exercised no control over his work hours and method of performing his task as arador. It is also an admitted fact that Tana, Jr. used his own carabao and tools. Thus, she contends that, applying the control test, Tana was not an employee but an independent contractor. The records reveal that while Ayalde herself may not have directly imposed on Tana the manner and methods to follow in performing his tasks, she did exercise control through her overseer. Be that as it may, the power of control refers merely to the existence of the power. It is not essential for the employer to actually supervise the performance of duties of the employee; it is sufficient that the former has a right to wield the power. Certainly, Ayalde, on her own or through her overseer, wielded the power to hire or dismiss, to check on the work, be it in progress or quality, of the laborers. As the owner/lessee of the plantations, she possessed the power to control everyone working therein and everything taking place therein. Jurisprudence provides other equally important considerations which support the conclusion that Tana was not an independent contractor. First, Tana cannot be said to be engaged in a distinct occupation or business. His carabao and plow may be useful in his livelihood, but he is not independently engaged in the

business of farming or plowing. Second, he had been working exclusively for Ayalde for eighteen (18) years prior to his demise. Third, there is no dispute that Ayalde was in the business of growing sugarcane in the two plantations for commercial purposes. There is also no question that plowing or preparing the soil for planting is a major part of the regular business of Ayalde. CA is reversed. 1. Selection and Hiring: ALIPIO R. RUGA vs. NLRC and DE GUZMAN FISHING ENTERPRISES G.R. No. L-72654-61 January 22, 1990 FERNAN Facts: Petitioners Alipio Ruga were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen. For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. Upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union. During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal

charges were formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day. Petitioners filed complaints for illegal dismissal which were joined and thereafter dismissed by the Labor Arbiter and affirmed by NLRC. Hence, the instant petition. Issue: WON there is an employeremployee relationship between private respondents and petitioners. Ruling: The Supreme Court have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. The employment relation arises from contract of hire, express or implied. In the absence of hiring, no actual employer-employee relation could exist. In the case at bench, petitioners testified that they were directly hired by private respondent through its general manager, Arsenio de Guzman, and its operations manager, Conrado de Guzman; that, except for Laurente Bautu, they had been employed by private respondent from 8 to 15 years in various capacities; that private respondent, through its operations manager, supervised and controlled the conduct of their fishing operations as to the fixing of the schedule of the fishing trips, the direction of the fishing vessel, the volume or number of tubes of the fishcatch the time to return to the fishing port, which were communicated to the patron/pilot by radio (single side band); that they were not allowed to join other outfits even the other vessels owned by private respondent without the permission of the operations manager; that they were compensated on percentage commission basis of the gross sales of the fish-catch which were delivered to them in cash by

private respondent's cashier, Mrs. Pilar de Guzman; and that they have to follow company policies, rules and regulations imposed on them by private respondent. Petition is granted. 2. Payment of Wages: NSULAR LIFE ASSURANCE CO. vs. NLRC and PANTALEON DE LOS REYES G.R. No. 119930 March 12, 1998 BELLOSILLO Facts: Petitioner Insular Life Co. entered into an agency contract with respondent Pantaleon de los Reyes authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commissions. The contract was prepared by petitioner in its entirety and De los Reyes merely signed his conformity thereto. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgment as to time, place and means of soliciting insurance. De los Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was required to submit to the former all completed applications for insurance within 90 consecutive days, and collect initial premiums and payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. In a written communication by petitioner to respondent De los Reyes, the latter was urged to register with the Social Security System as a self-employed individual. On 1 March 1993 petitioner and private respondent entered into another contract where the latter was appointed as Acting Unit Manager under its office in Cebu. As such, the duties and responsibilities of De los Reyes included the recruitment,

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training, organization and development within his designated territory. It was similarly provided in the management contract that the relation of the acting unit manager and/or the agents of his unit to the company shall be that of independent contractor. If the appointment was terminated for any reason other than for cause, the acting unit manager would be reverted to agent status and assigned to any unit. As in the previous agency contract, De los Reyes together with his unit force was granted freedom to exercise judgment as to time, place and means of soliciting insurance. Aside from being granted override commissions, the acting unit manager was given production bonus, development allowance and a unit development financing scheme euphemistically termed "financial assistance. Private respondent worked concurrently as agent and Acting Unit Manager until he was notified by petitioner that his services were terminated. Delos Reyes filed a complaint for illegal dismissal before the Labor Arbiter which was dismissed on the ground of lack of jurisdiction. NLRC, finding there exists employer-employee relationship between the parties, reversed the Labor Arbiter, hence, this petition. Issue: WON there is employee relationship parties. Ruling: The first contract between Insular Life and Delos Reyes is an agency contract. However, the second contract between the parties, contained conditionalities that indicate an employer-employee relationship. It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise. For, the employment status of a person is defined and prescribed by an employerbetween the

law and not by what the parties say it should be. In determining the status of the management contract, the "four-fold test" on employment earlier mentioned has to be applied. In the case at bench, on the matter of payment of wages, petitioner points out that respondent was compensated strictly on commission basis, the amount of which was totally dependent on his total output. But, the manager's contract, speaks differently. The managers contract demonstrates that the performance requirement imposed on De los Reyes was applicable quarterly while his entitlement to the free portion (P300) and the validated portion (P1,200) was monthly starting on the first month of the twelve (12) months of the appointment. Thus, it has to be admitted that even before the end of the first quarter and prior to the socalled quarterly performance evaluation, private respondent was already entitled to be paid both the free and validated portions of the UDF every month because his production performance could not be determined until after the lapse of the quarter involved. This indicates quite clearly that the unit manager's quarterly performance had no bearing at all on his entitlement at least to the free portion of the UDF which for all intents and purposes comprised the salary regularly paid to him by petitioner. Thus it cannot be validly claimed that the financial assistance consisting of the free portion of the UDF was purely dependent on the premium production of the agent. Be that as it may, it is worth considering that the payment of compensation by way of commission does not militate against the conclusion that private respondent was an employee of petitioner. Under Art. 97 of the Labor Code, "wage" shall mean "however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, price or commission basis." Petition is denied. 3. Power of Dismissal: CECILIO P. DE LOS SANTOS vs. NLRC and ROGELIO I. RAYALA G.R. No.

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121327. December BELLOSILLO Facts:

20,

2001

further proceedings. Hence, this petition for certiorari. Issue: WON there is employer-employee relationship between CAMARA and Delos Santos. Ruling: There are the four (4) standards in determining the existence of an employer-employee relationship, namely: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of power of dismisssal; and, (d) the presence or absence of control of the putative employee's conduct. Most determinative among these factors is the so-called "control test." In the case at bench, records would attest that even the power to dismiss was vested with CAMARA which admitted in its Reply that "Top-Flite requested CAMARA to terminate his employment after he was caught by the security guard committing theft." A cursory reading of this declaration will confirm the fact that the dismissal of De los Santos could only be effected by CAMARA and not by Top-Flite as the latter could only "request" for De los Santos' dismissal. If Top-Flite was truly the employer of De los Santos, it would not be asking permission from or "requesting" respondent CAMARA to dismiss De los Santos considering that it could very well dismiss him without CAMARA's assent. All the foregoing considerations affirm by more than substantial evidence the existence of an employer-employee relationship between De los Santos and CAMARA. Petition is granted. 4. Control Test: OSCAR VILLAMARIA, JR. vs. CA and JERRY V. BUSTAMANTE G.R. No. 165881 April 19, 2006 CALLEJO, SR. Facts:

Petitioner De los Santos was first assigned at the LPC assembly line of Camara Steel Industries Inc., a company engaged in the manufacture of steel products such as LPG cylinders and drums. Then, he became operator of a blasting machine. Later, he was designated as a janitor assigned to clean the premises of the company, and occasionally, to transfer scrap and garbage from one site to another. On 11 May 1993 petitioner was doing his usual chores as a janitor of CAMARA STEEL when he momentarily left his pushcart to answer the call of Narciso Honrado, scrap incharge, who summoned him to the company clinic. There Honrado handed him a box which he placed on top of a drum in his pushcart for transfer to the other lot of the company near gate 2. On his way out of gate 2, however, the security guard on duty found in the box handed to him by Honrado two (2) pieces of electric cable. Apprehensive that he might be charged with theft, petitioner De los Santos explained that the electric cord was declared a scrap by Honrado whose instructions he was only following to transfer the same to the adjacent lot of the company as scrap. Narciso Honrado admitted responsibility for the haul and his error in declaring the electric cables as scrap. The general manager, apparently appeased by Honrados apology, issued a memorandum acknowledging receipt of his letter of apology and exculpated him of any wrongdoing. Taking an unexpected volte face, however, the company through filed a criminal complaint for frustrated qualified theft against Honrado and petitioner De los Santos. The complaint however was subsequently dismissed by the Provincial Prosecutor of Pasig for lack of evidence. Upon request of Top-Flite, alleged manpower agency of De los Santos, CAMARA terminated the services of the latter. Delos Santos filed an action for illegal dismissal and the Labor Arbiter ordered his reinstatement. NLRC reversed the Labor Arbiter and remanded the case to the arbitration branch of origin for

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Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in assembling passenger jeepneys. By 1995, Villamaria stopped assembling jeepneys and retained only nine, four of which he operated by employing drivers on a boundary basis. One of those drivers was respondent Bustamante. Bustamante remitted P450.00 a day to Villamaria as boundary and kept the residue of his daily earnings as compensation for driving the vehicle. Villamaria verbally agreed to sell the jeepney to Bustamante under the boundary-hulog scheme, where Bustamante would remit to Villarama P550.00 a day for a period of four years; Bustamante would then become the owner of the vehicle and continue to drive the same under Villamarias franchise. It was also agreed that Bustamante would make a downpayment of P10,000.00. Villamaria executed a contract entitled Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog over the passenger jeepney. The parties agreed that if Bustamante failed to pay the boundaryhulog for three days, Villamaria Motors would hold on to the vehicle until Bustamante paid his arrears, including a penalty of P50.00 a day; in case Bustamante failed to remit the daily boundary-hulog for a period of one week, the Kasunduan would cease to have legal effect and Bustamante would have to return the vehicle to Villamaria Motors. Under the Kasunduan, Bustamante was prohibited from driving the vehicle without prior authority from Villamaria Motors. Thus, Bustamante was authorized to operate the vehicle to transport passengers only and not for other purposes. He was also required to display an identification card in front of the windshield of the vehicle; in case of failure to do so, any fine that may be imposed by government authorities would be charged against his account. Bustamante further obliged himself to pay for the cost of replacing any parts of the vehicle that would be lost or damaged due to his negligence. In case the vehicle sustained serious damage, Bustamante was obliged to notify Villamaria Motors before commencing repairs. Bustamante was not

allowed to wear slippers, short pants or undershirts while driving. He was required to be polite and respectful towards the passengers. He was also obliged to notify Villamaria Motors in case the vehicle was leased for two or more days and was required to attend any meetings which may be called from time to time. Aside from the boundary-hulog, Bustamante was also obliged to pay for the annual registration fees of the vehicle and the premium for the vehicles comprehensive insurance. Bustamante promised to strictly comply with the rules and regulations imposed by Villamaria for the upkeep and maintenance of the jeepney. Bustamante continued driving the jeepney under the supervision and control of Villamaria. As agreed upon, he made daily remittances of P550.00 in payment of the purchase price of the vehicle. Bustamante failed to pay for the annual registration fees of the vehicle, but Villamaria allowed him to continue driving the jeepney. In 1999, Bustamante and other drivers who also had the same arrangement with Villamaria Motors failed to pay their respective boundary-hulog. Villamaria took back the jeepney driven by Bustamante and barred the latter from driving the vehicle. Bustamante filed a Complaint for Illegal Dismissal against Villamaria and his wife Teresita. Labor Arbiter rendered judgment in favor of the spouses Villamaria. NLRC dismissed Bustamantes appeal. CA ruled in favor of Bustamante, hence, this petition. Issue: WON there is employer-employee relationship between Villamaria and Bustamante. Ruling: In a decided case, it has been held that the jeepney owner/operator-driver relationship under the boundary system is that of employer-employee and not lessorlessee. The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the latters daily earnings are remitted to the

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owner/operator less the excess of the boundary which represents the drivers compensation. Under this system, the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. In the case at bench, the Supreme Court agreed with the CA that under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution of said deed. Under the Kasunduan, petitioner retained supervision and control over the conduct of the respondent as driver of the jeepney. Under the boundary-hulog scheme, petitioner retained ownership of the jeepney although its material possession was vested in respondent as its driver. In case respondent failed to make his P550.00 daily installment payment for a week, the agreement would be of no force and effect and respondent would have to return the jeepney to petitioner; the employer-employee relationship would likewise be terminated unless petitioner would allow respondent to continue

driving the jeepney on a boundary basis of P550.00 daily despite the termination of their vendor-vendee relationship. The juridical relationship of employeremployee between petitioner and respondent was not negated by the foregoing stipulation in the Kasunduan, considering that petitioner retained control of respondents conduct as driver of the vehicle. Neither is such juridical relationship negated by petitioners claim that the terms and conditions in the Kasunduan relative to respondents behavior and deportment as driver was for his and respondents benefit: to insure that respondent would be able to pay the requisite daily installment of P550.00, and that the vehicle would still be in good condition despite the lapse of four years. What is primordial is that petitioner retained control over the conduct of the respondent as driver of the jeepney. Indeed, petitioner, as the owner of the vehicle and the holder of the franchise, is entitled to exercise supervision and control over the respondent, by seeing to it that the route provided in his franchise, and the rules and regulations of the Land Transportation Regulatory Board are duly complied with. Petition is denied. b. Cases EER Exists where ER-

1. Jeepney drivers on boundary basis ANGEL JARDIN vs. NLRC and GOODMAN TAXI G.R. No. 119268 February 23, 2000 QUISUMBING Facts: Petitioners Angel Jardin were drivers of private respondent, Philjama International Inc., a domestic corporation engaged in the operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs every other day on a 24-hour work schedule under the boundary system. Under this arrangement, the petitioners earned an average of P400.00 daily. Nevertheless, private respondent admittedly regularly

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deducts from petitioners, daily earnings the amount of P30.00 supposedly for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor union to protect their rights and interests.Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their taxicabs when they reported for work. Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against private respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. The labor arbiter dismissed said complaint. NLRC reversed the labor arbiter. However, NLRC set aside its own resolution and granted the MFR filed by private respondent company. Hence, this petition. Issue: WON there is an employeremployee relationship between private respondent and petitioners. Ruling: In a number of decided cases, the Supreme Court has ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessorlessee. We explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owner's hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive

fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. The Supreme Court has applied by analogy the above-stated doctrine to the relationships between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer. Petition is granted. 2. Musicians who were engaged by musical director for background music in motion pictures are employees of the film company LVN PICTURES vs. PHILIPPINE MUSICIANS Guild G.R. No. L-12582 January 28, 1961 CONCEPCION Facts: Philippine Musicians Guild averred that it is a duly registered legitimate labor organization; that LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations, duly organized under the Philippine laws, engaged in the making of motion pictures and in the processing and distribution thereof; that said companies employ musicians for the purpose of making music recordings for title music, background music, musical numbers, finale music and other incidental music, without which a motion picture is incomplete; that 95% of all the musicians playing for the musical recordings of said companies are members of the Guild; and that the same has no knowledge of the existence of any other legitimate labor organization representing musicians in said companies. Premised upon these allegations, the Guild prayed that it be certified as the sole and exclusive bargaining agency for all musicians working in the aforementioned

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companies. In their respective answers, the latter denied that they have any musicians as employees, and alleged that the musical numbers in the filing of the companies are furnished by independent contractors. The film companies also alleged that the musical directors were the ones who exercise control over the musicians. The lower court, however, rejected this pretense and sustained the theory of the Guild, with the result already adverted to. Issue: WON the musicians in question are employees of the film companies. Ruling: It is well settled that an employeremployee relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. The decisive nature of said control over the "means to be used", is illustrated in one case, in which, by reason of said control, the employer-employee relationship was held to exist between the management and the workers, notwithstanding the intervention of an alleged independent contractor, who had, and exercise, the power to hire and fire said workers. The aforementioned control over the means to be used" in reading the desired end is possessed and exercised by the film companies over the musicians in the cases before us. In the case at bench, the musical directors have no such control over the musicians. Said musical directors control neither the music to be played, nor the musicians playing it. The film companies summon the musicians to work, through the musical directors. The film companies, through the musical directors, fix the date, the time and the place of work. The film companies, not the musical directors, provide the transportation to and from the studio. The film companies furnish meal at dinner time. During the recording sessions, the motion picture director who is an employee of the company not the musical director supervises the recording of the musicians and tells them what to do in

every detail". The motion picture director not the musical director solely directs and performance of the musicians before the camera. The motion picture director supervises the performance of all the actors, including the musicians who appear in the scenes, so that in the actual performance to be shown in the screen, the musical director's intervention has stopped. The movie director tells the musical director what to do; tells the music to be cut or tells additional music in this part or he eliminates the entire music he does not (want) or he may want more drums or move violin or piano, as the case may be. The movie director directly controls the activities of the musicians. He says he wants more drums and the drummer plays more or if he wants more violins or he does not like that. Order appealed from is affirmed. 3. Tailors, Seamstress paid on piece-rate basis MAKATI HABERDASHERY vs. NLRC and JACINTO GARCIANO et.al. G.R. Nos. 83380-81 November 15, 1989 FERNAN Facts: Private respondents Jacinto Garciano et.al have been working for petitioner Makati Haberdashery, Inc. as tailors, seamstress, sewers, basters (manlililip) and "plantsadoras". They are paid on a piecerate basis except Maria Angeles and Leonila Serafina who are paid on a monthly basis. In addition to their piecerate, they are given a daily allowance of three (P 3.00) pesos provided they report for work before 9:30 a.m. everyday. Private respondents are required to work from or before 9:30 a.m. up to 6:00 or 7:00 p.m. from Monday to Saturday and during peak periods even on Sundays and holidays. Private respondent Dioscoro Pelobello left with Salvador Rivera, a salesman of petitioner Haberdashery, an open package which was discovered to contain a "jusi" barong tagalog. When confronted, Pelobello replied that the same was ordered by respondent Casimiro Zapata for his customer. Zapata allegedly

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admitted that he copied the design of petitioner Haberdashery. But in the afternoon, when again questioned about said barong, Pelobello and Zapata denied ownership of the same. Consequently a memorandum was issued to each of them to explain why no action should be taken against them for accepting a job order which is prejudicial and in direct competition with the business of the company. Both respondents allegedly did not submit their explanation and did not report for work. Hence, they were dismissed by petitioners. Issue: WON there is an employeremployee relationship between petitioner and private respondents. Ruling: The test of employer-employee relationship is four-fold: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct. It is the so called "control test" that is the most important element. This simply means the determination of whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and method by which the same is to be accomplished. The facts at bar indubitably reveal that the most important requisite of control is present. As gleaned from the operations of petitioner, when a customer enters into a contract with the haberdashery or its proprietor, the latter directs an employee who may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's measurements, and to sew the pants, coat or shirt as specified by the customer. Supervision is actively manifested in all these aspects the manner and quality of cutting, sewing and ironing. NLRC is modified. 4. Caddies golf clubs are employees of the golf clubs

In the case of Manila Golf and Country Club vs. IAC, 237 S 207, the issue raised was WON the persons rendering caddying services for members of golf clubs and their guests in said clubs courses or premises are the employees of such clubs. The Supreme Court held that in the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do their work in. For all that is made to appear, they work for the club to which they attach themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please, to stay away for as long as they like. It is not pretended that if found remiss in the observance of said rules, any discipline may be meted them beyond barring them from the premises which, it may supposed the Club may do in any case even absent any breach of the rules, and without violating any right to work on their part. All these considerations clash frontally with the concept of employment. c. Cases where NO ER-EER exists 1. Independent Contractor JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORP G.R. No. 138051. June 10, 2004 CARPIO Facts: ABS-CBN signed an Agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABSCBN was represented by its corporate officers while MJMDC was represented by Jose Sonza, as President and General Manager, and Carmela Tiangco, as EVP and Treasurer. In the Agreement, MJMDC agreed to provide Sonzas services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay for Sonzas services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third year of the

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Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. Sonza wrote a letter to ABS-CBN rescinding the Agreement in view of the irrevocable resignation of Sonza because of the recent events concerning his programs and career, which Sonza considered as breach of the Agreement by ABS-CBN. Sonza also waived the remaining amount stipulated due to him but reserves the right to seek recovery of the other benefits under said Agreement. Sonza filed a complaint against ABS-CBN before DOLE complaining that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP). ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. Meanwhile, ABS-CBN continued to remit SONZAs monthly talent fees through his account at PCI Bank. ABS-CBN opened a new account with the same bank where ABS-CBN deposited SONZAs talent fees and other payments due him under the Agreement. Labor Arbiter denied the motion to dismiss. The Labor Arbiter considered the case submitted for resolution. The Labor Arbiter dismissed the case for lack of jurisdiction which was affirmed by NLRC and late, the CA. Hence, this petition for certiorari. Issue: WON there is employer-employee relationship between Sonza and ABS-CBN. Ruling: A. Selection and Engagement of Employee ABS-CBN engaged SONZAs services to cohost its television and radio programs because of SONZAs peculiar skills, talent and celebrity status. SONZA contends that the discretion used by respondent in specifically selecting and hiring complainant over other broadcasters of possibly similar experience and qualification as complainant belies respondents claim of independent contractorship.

Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of Sonza, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If Sonza did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the Agreement with Sonza but would have hired him through its personnel department just like any other employee. In any event, the method of selecting and engaging Sonza does not conclusively determine his status. B. Payment of Wages ABS-CBN directly paid Sonza his monthly talent fees with no part of his fees going to MJMDC. Sonza asserts that this mode of fee payment shows that he was an employee of ABS-CBN. Sonza also points out that ABS-CBN granted him benefits and privileges which he would not have enjoyed if he were truly the subject of a valid job contract. All the talent fees and benefits paid to Sonza were the result of negotiations that led to the Agreement. If Sonza was ABS-CBNs employee, there would be no need for the parties to stipulate on benefits such as SSS, Medicare, and 13th month pay which the law automatically incorporates into every employer-employee contract. Whatever benefits Sonza enjoyed arose from contract and not because of an employer-employee relationship. Sonzas talent fees, amounting to P317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship. ABS-CBN agreed to pay Sonza such huge talent fees precisely because of Sonzas unique skills, talent and celebrity status

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not possessed by ordinary employees. Obviously, Sonza acting alone possessed enough bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship. The payment of talent fees directly to Sonza and not to MJMDC does not negate the status of Sonza as an independent contractor. The parties expressly agreed on such mode of payment. Under the Agreement, MJMDC is the AGENT of Sonza, to whom MJMDC would have to turn over any talent fee accruing under the Agreement. C. Power of Dismissal For violation of any provision of the Agreement, either party may terminate their relationship. Sonza failed to show that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws. During the life of the Agreement, ABS-CBN agreed to pay Sonzas talent fees as long as AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement. Even if it suffered severe business losses, ABS-CBN could not retrench Sonza because ABS-CBN remained obligated to pay Sonzas talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between Sonza and ABSCBN. Sonza admits that even after ABSCBN ceased broadcasting his programs, ABS-CBN still paid him his talent fees. Plainly, ABS-CBN adhered to its undertaking in the Agreement to continue paying Sonzas talent fees during the remaining life of the Agreement even if ABS-CBN cancelled Sonzas programs through no fault of Sonza. Sonza assails the Labor Arbiters interpretation of his rescission of the Agreement as an admission that he is not an employee of ABS-CBN. The Labor Arbiter stated that if it were true that complainant was really an

employee, he would merely resign, instead. Sonza did actually resign from ABS-CBN but he also, as president of MJMDC, rescinded the Agreement. Sonzas letter clearly bears this out. However, the manner by which Sonza terminated his relationship with ABS-CBN is immaterial. Whether Sonza rescinded the Agreement or resigned from work does not determine his status as employee or independent contractor. D. Power of Control Since there is no local precedent on whether a radio and television program host is an employee or an independent contractor, the Supreme Court referred to foreign case law in analyzing the present case. In a US decided case, it has been held that a television program host is an independent contractor. Applying the control test to the present case, Sonza is not an employee but an independent contractor. The control test is the most important test the courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor. First, Sonza contends that ABS-CBN exercised control over the means and methods of his work. Sonzas argument is misplaced. ABS-CBN engaged Sonzas services specifically to co-host the Mel & Jay programs. ABS-CBN did not assign any other work to Sonza. To perform his work, Sonza only needed his skills and talent. How Sonza delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. Sonza did not have to render eight hours of work per day. The Agreement required Sonza to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN

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could not dictate the contents of Sonzas script. However, the Agreement prohibited Sonza from criticizing in his shows ABS-CBN or its interests. The clear implication is that Sonza had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. ABS-CBN was not involved in the actual performance that produced the finished product of Sonzas work. ABS-CBN did not instruct Sonza how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule for more effective programming. ABS-CBNs sole concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. In a US decided case, it has been held that, vaudeville performers were independent contractors although the management reserved the right to delete objectionable features in their shows. Since the management did not have control over the manner of performance of the skills of the artists, it could only control the result of the work by deleting objectionable features. In the case at bench, although ABS-CBN did have the option not to broadcast Sonzas show, ABS-CBN was still obligated to pay Sonzas talent fees. Thus, even if ABS-CBN was completely dissatisfied with the means and methods of Sonzas performance of his work, or even with the quality or product of his work, ABS-CBN could not dismiss or even discipline Sonza. All that ABS-CBN could do is not to broadcast Sonzas show but ABS-CBN must still pay his talent fees in full. Sonza further contends that ABS-CBN exercised control over his work by supplying all equipment and crew. No doubt, ABS-CBN supplied the equipment, crew and airtime needed to broadcast the Mel & Jay programs. However, the equipment, crew and airtime are not the tools and instrumentalities Sonza needed to perform his job. What Sonza principally needed were his talent or skills and the costumes necessary for his appearance. Even though ABS-CBN

provided Sonza with the place of work and the necessary equipment, Sonza was still an independent contractor since ABS-CBN did not supervise and control his work. ABS-CBNs sole concern was for Sonza to display his talent during the airing of the programs. A radio broadcast specialist who works under minimal supervision is an independent contractor. Sonzas work as television and radio program host required special skills and talent, which Sonza admittedly possesses. The records do not show that ABS-CBN exercised any supervision and control over how Sonza utilized his skills and talent in his shows. Second, Sonza argues that ABS-CBN subjected him to its rules and standards of performance. Sonza claims that this indicates ABS-CBNs control not only over his manner of work but also the quality of his work. The Agreement stipulates that Sonza shall abide with the rules and standards of performance covering talents of ABS-CBN. The Agreement does not require Sonza to comply with the rules and standards of performance prescribed for employees of ABS-CBN. The code of conduct imposed on Sonza under the Agreement refers to the Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by ABSCBN as its Code of Ethics. The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN. In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. In this case, Sonza failed to show that these rules controlled his performance. These general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry. In a US case, it has been held that one could still be an independent contractor although the

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hirer reserved certain supervision to insure the attainment of the desired result. The hirer, however, must not deprive the one hired from performing his services according to his own initiative. Lastly, Sonza insists that the exclusivity clause in the Agreement is the most extreme form of control which ABS-CBN exercised over him. This argument is futile. Being an exclusive talent does not by itself mean that Sonza is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time. Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity, as in the present case. MJMDC as Agent of Sonza Sonza protests the Labor Arbiters finding that he is a talent of MJMDC, which contracted out his services to ABS-CBN. The Labor Arbiter ruled that as a talent of MJMDC, Sonza is not an employee of ABSCBN. Sonza insists that MJMDC is a laboronly contractor and ABS-CBN is his employer. In a labor-only contract, there three parties involved: (1) labor-only contractor; (2) employee who is ostensibly under are the the the

employ of the labor-only contractor; and (3) the principal who is deemed the real employer. Under this scheme, the labor-only contractor is the agent of the principal. The law makes the principal responsible to the employees of the labor-only contractor as if the principal itself directly hired or employed the employees. These circumstances are not present in this case. In the case at bench, there are essentially only two parties involved under the Agreement, namely, Sonza and ABS-CBN. MJMDC merely acted as Sonzas agent. The Agreement expressly states that MJMDC acted as the AGENT of Sonza. The records do not show that MJMDC acted as ABS-CBNs agent. MJMDC, which stands for Mel and Jay Management and Development Corporation, is a corporation organized and owned by Sonza and Tiangco. The President and General Manager of MJMDC is Sonza himself. It is absurd to hold that MJMDC, which is owned, controlled, headed and managed by Sonza, acted as agent of ABS-CBN in entering into the Agreement with Sonza, who himself is represented by MJMDC. That would make MJMDC the agent of both ABS-CBN and Sonza. CA is affirmed. 2. Shoe store and shoe-shiners MAMERTO S. BESA vs. CRESENCIANO B. TRAJANO AND KAISAHAN NG MANGGAGAWANG PILIPINO G.R. No. 72409 December 29, 1986 PARAS Facts: Private respondent Kaisahan ng Mangagawang Pilipino KAMPIL, a legitimate labor union filed a Petition for Certification Election in the NLRC. Petitioner Mamerto Besa opposed it alleging that there is no employeremployee relationship between Besa's and the petitioners-signatories to the petition. Acting on the Petition, the Opposition thereto, and the Reply to the Opposition,

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The Med-Arbiter issued an order declaring that there was an employer-employee relationship between the parties and directed that an election be conducted. BLR affirmed the Med-Arbiter, hence, this petition. Issue: WON there employer-employee relationship between petitioner Besa and 17 of the members of the herein respondent Union who are designated as shoeshiners. Ruling: Existence of employer-employee relationship is determined by the following elements, namely, a] selection and engagement of the employee; b] payment of wages; c] powers of dismissal; and d] power to control the employee's conduct although the latter is the most important element. The records of the case reveal that an employer-employee relationship does not exist between the 17 shoeshiners and petitioner. In the CIRs Decision dated December 21, 1965 for complaint of ULP filed by the shoeshiners against Besa, it has been held that: The shoe shiner is distinct from a piece worker because while the latter is paid for work accomplished, he does not, however, contribute anything to the capital of the employer other than his service. It is the employer of the piece worker who pays his wages, while the shoe shiner in this instance is paid directly by his customer. The piece worker is paid for work accomplished without regard or concern to the profit as derived by his employer, but in the case of the shoe shiners, the proceeds derived from the trade are always divided share and share alike with respondent Besa. The shoe shiner can take his share of the proceeds everyday if he wanted to or weekly as is the practice of Besa The employer of the piece worker supervises and controls his work, but in the case of the shoe shiner, respondent Besa does not exercise any degree of control or supervision over their person and their work. All these are not obtaining in the case of a piece worker as he is in fact an employee in contemplation of law,

distinct from the shoe shiner in this instance who, in relation to respondent Besa, is a partner in the trade. Consequently, employer-employee relationship between members of the Petitioning union and respondent Besa being absent the latter could not be held guilty of the unfair tabor. Decision appealed from is declared void. 3. Softdrinks company and contractors selling softdrinks MAFINCO TRADING CORPORATION vs. BLAS F. OPLE and RODRIGO REPOMANTA G.R. No. L-37790 March 25, 1976 AQUINO Facts: Cosmos Aerated Water Factory appointed Mafinco as its sole distributor of Cosmos soft drinks in Manila. Rodrigo Repomanta and Mafinco executed a peddling contract whereby Repomanta agreed to "buy and sell" Cosmos soft drinks. Rey Moralde entered into a similar contract. The contracts were to remain in force for one year unless sooner terminated by either party upon five days notice to the other. Mafinco terminated its contract to Repomanta. Repomanta filed a complaint with the NLRC, charging Mafinco with having illegal dismissal. Mafinco filed a motion to dismiss the complaint on the ground that the NLRC had no jurisdiction because Repomanta and Moralde were not its employees but were independent contractors. It stressed that there was termination of the contract, not a dismissal of an employee. NLRC dismissed the complaint for lack of jurisdiction which was reversed by the Secretary of Labor, hence, this petition. Issue: WON there is an employeremployee relationship between Mafinco and Repomante. Ruling: In determining the existence of employer-employee relationship, the following elements are generally

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considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees' conductalthough the latter is the most important element. On the other hand, an independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work. In the case at bench, under their peddling contracts Repomanta and Moralde were not employees of Mafinco but were independent contractors. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer. Repomanta and Moralde voluntarily executed with Mafinco formal peddling contracts which indicate the manner in which they would sell Cosmos soft drinks. That circumstance signifies that they were acting as independent businessmen. They were to sign or not to sign that contract. If they did not want to sell Cosmos products under the conditions defined in that contract; they were free to reject it. But having signed it, they were bound by its stipulations and the consequences thereof under existing labor laws. One such stipulation is the right of the parties to terminate the contract upon five days' prior notice. Order appealed from is set aside. 4. Company and Collecting agents on commission basis SINGER SEWING MACHINE COMPANY vs. FRANKLIN M. DRILON and SINGER MACHINE COLLECTORS UNION G.R. No. 91307 January 24, 1991 GUTIERREZ Facts:

Respondent union filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine Company. The Company opposed the petition mainly on the ground that the union members are actually not employees but are independent contractors as evidenced by the collection agency agreement which they signed. The Med-Arbiter, finding that there exists an employer-employee relationship between the union members and the Company, granted the petition for certification election which was affirmed by the Secretary of Labor Franklin M. Drilon. Hence, this petition. Issue: WON there is employer-employee relationship between the company and the private respondent Union. Ruling: The following elements are generally considered in the determination of the employer-employee relationship; (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct although the latter is the most important element. In the case at bench, the Collection Agency Agreement defines the relationship between the Company and each of the union members who signed a contract. The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because he is explicitly described as such but also because the provisions permit him to perform collection services for the company without being subject to the control of the latter except only as to the result of his work. The requirement that collection agents utilize only receipt forms and report forms issued by the Company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job of collection is to be performed. The agreement itself specifically explains that receipt forms shall be used for the purpose of avoiding a co-mingling of personal funds of the agent

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with the money collected on behalf of the Company. Likewise, the use of standard report forms as well as the regular time within which to submit a report of collection are intended to facilitate order in office procedures. Even if the report requirements are to be called control measures, any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of the service. The monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to encourage a collecting agent to report at least the minimum amount of proceeds. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. Order appealed from is reversed. 5. Sugar workers Central Company and farm

Issue: WON there is an employeremployee relationship between petitioner company and private respondent union. Ruling: In a decided case, it has been held that a sugar central does not have any privity of any kind with the sugar farm workers, to wit: from the very beginning of the sugar industry, the centrals have never had any privity of any kind with the plantation laborers, since they had their own laborers to take of. In other words, both the centrals and the planters have always been the one dealing with their respective laborers regarding the terms and conditions of their employment, particularly as to wages. Sugar farm workers/laborers were the direct responsibility of their respective planters and the central did not deal with the planter's workers but only with the planter. R.A. 809 did not create any employer-employee relationship between the planters' workers and the sugar centrals. In fact, the law affirmed the old practice of the central dealing only with the planter by directly issuing to it the planter's share of the unrefined sugar per their milling contracts. The planter's share included the workers' share such that if any increase was made on the planter's participation in the proceeds, it became the planter's obligation to pay his workers their 60% share of such increase. Clearly, there is no privity between the sugar centrals and the sugar farm workers. The workers are not employees of the sugar central but of the planter. And R.A. 809 expressly recognizes the planter, not the central, as the employer of the farm workers by imposing on it the duty of paying its respective workers their share of the proceeds from the milled sugar. Petition is granted. 6. Schools and working scholars FILAMER CHRISTIAN INSTITUTE vs. IAC and POTENCIANO KAPUNAN, SR. G.R. No. 75112 August 17, 1992 GUTIERREZ, JR.

VICTORIAS MILLING CO. vs. NLRC and NATIONAL FEDERATION OF SUGAR WORKERS-FOOD G.R. No. 116236 October 2, 1996 PUNO Facts: Private respondent National Federation of Sugar Workers-Food, on behalf of "all workers of farm owners," instituted a suit against petitioner Victorias Milling Co., Inc., a sugar central in Victorias, before NLRC. Private respondent sought to recover the share of the workers in the increased deliveries enjoyed by the planter of unrefined sugar and by-products produced in petitioner's refinery from 1952 to crop year 1983-1984. Petitioner moved to dismiss the complaint for lack of jurisdiction on the ground that there was no employer-employee relationship between it and private respondent. The labor arbiter denied the motion which was affirmed by NLRC. Hence this petition.

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Facts: The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision rendered by the Supreme Court on October 16, 1990 in the case of Filamer Christian Institute v. Court of Appeals, in which SC ruled petitioner Filamer is not liable for the injuries caused by Funtecha on the grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily answerable, and that Funtecha was merely a working scholar who, is not considered an employee of the petitioner. In that case, Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer. He was assigned to clean the school premises for only 2 hours in the morning of each school day. Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the vehicle while the latter was on his way home one late afternoon. The place where Allan lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the house where Funtecha was allowed free board while he was a student of Filamer Christian Institute. Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous curb, and viewing that the road was clear. Thereupon, a fast moving truck with glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. The vehicle hit Potenciano Kapunan which caused his death. Issue: WON Funtecha was an employee of Filamer Institute. Ruling: It is to be noted that the present case does not deal with a labor dispute on conditions of employment between an alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a person, against both doer-employee and his employer. Thus, it is the Civil Code on torts and damages that should be applied

and not the Labor Code. Hence, in this case, the Supreme Court granted the MFR and held that Filamer Institute was an employer of Funtecha and as such, liable for the injuries caused by Funtecha to Potenciano Kapunan. In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the service for which the jeep was intended by the petitioner school. The Supreme Court is constrained to conclude that the act of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act the petitionerschool cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties. The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of an employer, includes any act done by an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage. Even if somehow, the employee driving the vehicle derived some benefit from the act, the existence of a presumptive liability of the employer is determined by answering the question of whether or not the servant was at the time of the accident performing any act in furtherance of his master's business. Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's position in order that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the time of the incident was for the benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or was not acting within the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the supervision over him. The petitioner has failed to show proof of its having exercised the required

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diligence of a good father of a family over its employees Funtecha and Allan. Petition is granted. 7. In contract of agency DR. CARLOS L. SEVILLA and LINA SEVILLA vs. CA and TOURIST WORLD SERVICE G.R. No. L-41182-3 April 16, 1988 SARMIENTO Facts: Segundina Noguera leased her property to the Tourist World Service, Inc., represented by Mr. Eliseo Canilao for the formers use as a branch office. In the said contract, Lina Sevilla held herself solidarily liable with the party of the part for the prompt payment of the monthly rental agreed on. When the branch office was opened, the same was run by Lina Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World Service, Inc. Tourist World Service appears to have been informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. Because of this, and to comply with the mandate of the Tourist World Service, the corporate secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and, being unable to contact Lina Sevilla, he padlocked the premises on June 4, 1962 to protect the interests of the Tourist World Service. When neither the appellant Lina Sevilla nor any of her employees could enter the locked premises, a complaint was filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction which was dismissed by the trial court for failure to prosecute. Lina Sevilla refiled her case which was dismiss for lack of merit. Issue: WON there is an employeeemployer relationship between Tourist World and Sevilla.

Ruling: In this jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. The right of control test is where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. Subsequently, however, in addition to the standard of right-of control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship. In the case at bench, the records show that the Lina Sevilla, was not subject to control by the private respondent Tourist World, either as to the result of the enterprise or as to the means used in connection therewith. In the first place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for rental payments, an arrangement that would be like claims of a master-servant relationship. In the second place, when the branch office was opened, the same was run by Lina Sevilla payable to Tourist World Service, Inc. by any airline for any fare brought in on the effort of Mrs. Lina Sevilla. Under these circumstances, it cannot be said that Sevilla was under the control of Tourist World Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously relied on her own gifts and capabilities. It is further admitted that Sevilla was not in the company's payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes. The fact that Sevilla had been designated 'branch manager" does not make her Tourist World's employee. Employment is determined by the right-of-control test and

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certain economic parameters. But titles are weak indicators. The Supreme Court is of the opinion, that when the petitioner, Lina Sevilla, agreed to man the Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another. In the case at bench, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. Sevilla herself based on her letter of preassumed her principal's authority as owner of the business undertaking. Thus, the relationship between Sevilla and Tourist World is one of principal-agent relationship, rather than a joint managament or a partnership. CA is reversed. d. Contractor or SubContractor (Art. 106)

of contractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal. Independent Contractor- One who carries on a distinct and independent business and undertakes to perform the job on to do a piece of work on its own account and under its own manner and methods and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. A mere statement in a contract with a company that laborers who are paid according to the amount and quality of work are independent contractors does not change their status s mere employees in contemplation of labor laws. i. Elements of Job Contracting: 1. the contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job on his own account and under his own responsibility, according to its own manner and method and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; 2. the contractor or subcontractor has substantial capital or investment; and 3. the agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure and social and welfare benefits. Substantial Capital- refers to the adequacy of resources actually or directly used by the contractor or subcontractor in the performance or completion of the job, work, service

i. Types of Contractor 1. Labor-only Contractor 2. Job Contractor

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 persons are performing activities which are directly related to the principal business of such employer. NOTE: Labor-only contracting is prohibited and the person acting as contractor 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. job Contracting- An arrangement whereby a principal agrees to put out or farm out with a contractor or series

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contracted out. Substantial capital need not be coupled with investment in tools or equipment. This is clear from the use of the conjunction or. ii. Scope of Liability in Contracting or Subcontracting When a contractor fails to pay the wage of his employees in accordance with the Labor Code the employer who contracted out the job becomes jointly and severally liable with the contractor to the extent of the work performed under the contractors employees. The law itself establishes an employer-employee relationship between the employer and the job contractors employee for a limited purpose, i.e. in order to ensure the latter get paid the wages due to them. Working Conditions- refers to the terms and circumstances affecting the employment of an employee, including policies, programs, and regulations governing his employment status, work, and work relationships. They are, as a rule, determined by the employer. JOB CONTRACTING No ER-EER except when the contractor or subcontractor fails to pay the wages of the workers. Liability is limited. It shall be solidarily liable with the employer when the employer fails to comply with requirements at to unpaid wages and other labor standards violations. Permissible Presence of substantial capital or investment LABOR ONLY CONTRACTING Employer is treated as direct employer of the person (contractor is deemed agent of the employer) Liability extends to all rights, duties and liabilities under labor standard laws including the right to self-organization

LAPANDAY AGRICULTURAL vs. CA and COMMANDO SECURITY SERVICE AGENCY G.R. No. 112139 January 31, 2000 GONZAGA-REYES Facts: Commando Security Service Agency, Inc., and defendant Lapanday Agricultural Development Corporation entered into a Guard Service Contract. Plaintiff provided security guards in defendant's banana plantation. The contract called for the payment to a guard of P754.28 on a daily 8-hour basis and an additional P565.72 for a four hour overtime while the shift-incharge was to be paid P811.40 on a daily 8-hour basis and P808.60 for the 4-hour overtime. Wage Orders increasing the minimum wage in 1983 were complied with by the defendant. On June 16, 1984, Wage Order No. 5 was promulgated directing an increase of P3.00 per day on the minimum wage of workers in the private sector and a P5.00 increase on the ECOLA. This was followed on November 1, 1984 by Wage Order No. 6 which further increased said minimum wage by P3.00 on the ECOLA. Both Wage Orders contain the following provision: "In the case of contract for construction projects and for security, janitorial and similar services, the increase in the minimum wage and allowances rates of the workers shall be borne by the principal or client of the construction/service contractor xxx. Plaintiff demanded that its Guard Service Contract with defendant be upgraded in compliance with Wage Order Nos. 5 and 6. Defendant refused. Private respondent filed a suit before RTC for the purpose of securing the upgrading of the Guard Service Contract entered into by herein petitioner and private respondent. Petitioner assailed the jurisdiction of RTC arguing that it is the NLRC that has jurisdiction to resolve the issue involved in this case for it refers to the enforcement of wage adjustment and other benefits due to private respondent's security guards mandated under Wage Order Nos. 5 and 6. Issue: WON RTC has jurisdiction over the case at bench.

Prohibited by law Absence of substantial capital or investment

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Ruling: RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists. As regards the issue on whether or not petitioner is liable to the private respondent for the wage adjustments provided under Wage Order Nos. 5 and, private respondent admits that there is no employer-employee relationship between it and the petitioner. The private respondent is an independent/job contractor who assigned security guards at the petitioner's premises for a stipulated amount per guard per month. The Contract of Security Services expressly stipulated that the security guards are employees of the Agency and not of the petitioner. In a decided case, it has been held that that the joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. The contractor is made liable by virtue of his status as direct employer. The principal, on the other hand, is made the indirect employer of the contractor's employees to secure payment of their wages should the contractor be unable to pay them.

Even in the absence of an employeremployee relationship, the law itself establishes one between the principal and the employees of the agency for a limited purpose i.e. in order to ensure that the employees are paid the wages due them.

III. EMANCIPATION OF TENANTS

a. Agricultural or Farm Workers- employed in an agricultural or farm tasks which are directly related to the agricultural activities of the employer, such as cultivation and tillage of the soil, dairying, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any activities performed by a farmer as an incident to or in conjunction with such farming operations. b. Purpose of the ProvisionsIntended to encourage workers to seek employment in agricultural enterprise instead of migrating to already overcrowded urban areas to find work in industrial establishment.
Farm EmployerFarm Worker Relationship
The lease is one of labor with the agricultural laborer as the lessor of his services and the farm employer as the lessee. The agricultural worker works for the farm employer. He receives a salary/wage, whether the employer makes a profit or not.

Tenancy Relationship
It is the landowner who is the lessor and the tenant as the lessee of agricultural land. The tenant derives his income from the agricultural produce or harvest.

c. Share Tenancy has been abolished placing in the stead agricultural leasehold system. Under Article 8, the land covered by operation of land transfer must be

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private agricultural land, tenanted, primarily devoted to rice and/or corn, and more than 7 hectares in area. Emancipation Patent- the title issued to the tenant upon compliance with all the requirements of the government. It represents the full emancipation of the tenant from the bandage of the soil. Prohibition against Alienationof land is intended to: 1. Preserve the landholding in the hands of the owner-tiller and his heirs; 2. Minimize land speculation; and 3. Prevent a return to the regime of land ownership by a few. Land Reform- distribution of land to farmer beneficiaries. Land Reform Code (RA 3844)abolished the Share-Tenancy and replaced it with the LeaseholdTenancy System. Share Tenancy- agrarian system where the partition between the landowner-lessor and the farmer-lessee on the land is in halves. Agrarian Reform Law- land reform program of the government where support services are provided to farmers. TenancyThe physical possession by a person of land possessed by another for the purpose of production through the labor of the former and of the members of his immediate farm household in consideration of which the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, whether in produce or in money, or both. (RA 1199, Sec.3) Elements of Agricultural Tenancy a. The parties are the landholder and tenant: Tenanta person who by himself, or with the aid available form his immediate household, cultivates the land belonging to or possessed by another, with the latters consent for purposes of production, sharing the produce of the landholder or

d. Comprehensive

Agricultural

for a price certain or ascertainable in produce or in money, or both, under the leasehold tenancy system. (RA 1199, Sec.5 (a)) Landholder-lessor- any person, natural or juridical, either as owner, lessee, usufructuary or legal possessor of agricultural land, who lets leases or rents to another said property for purposes of agricultural production and for an price a certain or ascertainable either in an amount of money or produce. (RA 1199, Sec. 42) b. The subject is agricultural land; Agricultural Land- a land devoted to agricultural activity as defined, and not classified as mineral, forest, residential, commercial or industrial land. (RA 6657) Land devoted to any growth, including but not limited to crop lands, salt beds, fish ponds, idle land and abandoned land. (RA 3844) The area of agricultural land that a lessee may cultivate has no limit, but he should cultivate the entire area leased. The 3 hectare limit under RA 6657 applies only to the award that may be given to the agrarian reform beneficiary. c. There is consent by the landholder for the tenant to work on the land, given either orally or in writing, expressly or impliedly; NOTE: The tenancy relation does not exist where a usurper cultivates the land. (Hilario vs. IAC 148 S 573) Successors-in-interest of the true and lawful landholder/owner who gave the consent are bound to recognize the tenancy established before they acquire the agricultural land. (Endaya vs. CA, 215 S 109) d. The purpose is agricultural production: Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of agricultural production. The fact of sharing alone is not sufficient to establish a tenancy relationship. e. There is a personal cultivation or with the help of immediate farm household. (Evangelista vs. CA, 158 S 41) Cultivation is not limited to the plowing and harrowing of the land, but also the husbanding of the ground to

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forward the products of the earth by general industry, the taking care of the lands and fruits growing thereon, fencing of certain areas, and the clearing thereof by gathering dried leaves and cutting of grasses. f. There is compensation in terms of payment of a fixed amount in money and/or produce. (Qua vs. CA, 198 S 236) NOTE: All requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant. (Caballes vs. DAR, 168 S 254) PD 27
Retentio n Limit Benefits Land owners: 7 hecs. Children (15 y/o): 3 hecs. 5 hecs. If not irrigated 3 hecs. If irrigated

RA 6657
5 hectares

provided by law. (De Jesus vs. IAC, 175 S 559) Transfer of ownership or legal possession does not affect security of tenure. (Tanpingco vs. IAC, 207 S 653) Pursuant to PD 27, a farmerbeneficiary cannot make any valid form of transfer of the land adjudicated to him, except to the government or by hereditary succession to his respective successors. The purpose of the agrarian reform law is to ensure the farmerbeneficiarys continued possession, cultivation and enjoyment of the land he tills. (Toralba vs. Mercado, GR No. 146480, July 14, 2004) f. Rights and Responsibilities of the Parties i. The Lessee shall have the following rights (RA 3844, Secs. 11, 12, 23-25, 36): 1. To have possession and peaceful enjoyment of the land. 2. To manage and work on the land in a manner and method of cultivation and harvest which conform to the proven farm practices. 3. To mechanize all or any phase of his farm work. 4. To deal with millers and processors and attend to the issuance of quedans and warehouse receipts of the produce due him/her. 5. To continue in the exclusive possession and enjoyment of any homelot the lessee may have occupied upon the effectivity of RA 3844. 6. To be indemnified for the costs and expenses incurred in the cultivation and for other expenses incidental to the improvement of the crop in case the lessee surrenders, abandons or is ejected from the landholding. 7. To have the right of pre-emption and redemption. 8. To be paid disturbance compensation in case of conversion of the farmholding has been approved. ii. The Lessee shall have the following responsibilities (RA 3844, Sec 29):

5 hectares

Dispositi on of lands through hereditar y or governm ent successio n Lands not covered

Can be disposed within 10 years from award

Homesteads, residential lands, ponds, and those devoted in livestock and poulty.

Residential lands, commercial lands, industrial lands and homesteads

e. Security of Tenure Under RA 1199, Sec. 7, the agricultural leasehold relation, once established, shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court causes provided therein. The tenant has the right to continue working on the land except when he is ejected therefrom for cause as

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1. Cultivate and take care of the farm, growing crops and other improvements on the land and perform all the work therein in accordance with proven farm practices. 2. Inform the lessor within a reasonable time of any trespass committed by third persons on the farm without prejudice to his direct action against the trespasser. 3. Take reasonable care of the work animals and farm implements delivered to him by the lessor and see to it that they are not used for other purposes other than those intended, or used by another without the knowledge and consent of the lessor. 4. Keep the farm and growing crops attended to during the work season. 5. To pay the lease rental to the lessor when it falls due. (RA 3844, Sec. 26) iii. The Lessor shall have the following rights: 1. To inspect and observe the extent of compliance with the terms and conditions of the leasehold contract. 2. To propose a change in the use of the landholding to other agricultural purposes or in the kind of crop planted. 3. To require the lessee, taking into consideration his financial capacity and the credit facilities available to him, to adopt proven farm practices necessary to the conservation of the land, improvement of the fertility and increase in productivity. 4. To mortgage expected rentals. iv. The Lessor shall have the following obligations (RA 3844, Sec. 30): 1. To keep the lessee in peaceful possession and cultivation of the land; and 2. To keep intact such permanent useful improvements existing on the landholding at the start of the leasehold relation. v. Prohibited Acts of the Lessor (DAR A.O. Leasehold Relations, RA 3844, Sec. 8): 1. To dispossess the lessee of his landholding except upon authorization by the Court; 2. To require the lessee to assume, directly or indirectly, the payment of taxes or part thereof levied by the government on the land;

3. To require the lessee to assume, directly or indirectly, any rent or obligation of the lessor to a third party; 4. To deal with millers or processors without written authorization of the lessee in cases where the crop has to be sold in processed form before payment of the lessee rental; 5. To discourage, directly or indirectly, the formation, maintenance or growth of unions or organizations of lessees in his landholding; and 6. For coconut lands, indiscriminate cutting of coconut trees will be deemed prima facie evidence to dispose the tenants of his landholdings unless there is written consent of the lessee and there is PCA certification, copy of the findings and recommendations of which shall be furnished to affected tenants or lessees. g. i. Termination of Relations Tenancy

Causes for Termination of Leasehold Relations: 1. Abandonment of the landholding without the knowledge of the agricultural lessor; Abandon means the giving up absolutely, with intent never again to resume or claim ones right or interest. The act of abandonment constitutes actual, absolute and irrevocable desertion of ones right or property. Failure to cultivate the land by reason of the forcible prohibition to do so by a third party cannot also amount to abandonment, for abandonment presupposes free will. (Teodoro vs. Macaraeg) 2. Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served 3 months in advance; The tenants intention to surrender landholding cannot be presumed, much less determined by mere implication, but must be convincingly and sufficiently proved. (Nisnisan vs. CA, 294 S 173) 3. Absence of an heir to succeed the lessee in the events of his death or permanent incapacity. In case of death or permanent incapacity, the leasehold relation continues between the lessor and the person who can

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cultivate the land personally, chosen by the lessor within one month from such death or incapacity, from among the following: 1. the surviving spouse; 2. the eldest direct descendant by consanguinity 3. the next eldest direct descendant/s in the order of age (RA 3844, Sec. 9) The leasehold relation is not terminated by death or permanent incapacity of the landholder-lessor. It binds his legal heirs. (RA 3944, Sec. 9). NOTE: Conversion of a land to nonagricultural uses also extinguished the leasehold relations because the subject land is no longer agricultural land and the purpose is no longer agricultural production. However, under Sec. 16 of DAR AO 1, the tenant affected by the conversion is entitled to disturbance compensation which must be paid within 60 days from the issuance of the order of conversion. RA 6657 (CARL) Implementation: 1. Letter of Coverage (Given by DAR to landowners to identify the subject land) 2. Letter of Acquisition (Land Bank of the Philippines may require bonds) Just Compensation- fair and reasonable value of the land. If acceptedthe government makes the necessarily process. After the documents are surrendered, the TCT will be issued. If refused upon- the government will deposit the amount to the Land Bank, and it will have the right to occupy the land. IV. PRE- EMPLOYMENT a. Definition of Terms (Art. 13) 1. Worker- means any member of the labor force, whether employed or unemployed. 2. 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. NOTE: The number of persons dealt with is not an essential factor of the act of recruitment and placement of workers. The proviso merely creates the presumption. 3. 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. 4. License- means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. 5. Private recruitment entitymeans 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. 6. Authoritymeans 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. 7. Seaman means any person employed in a vessel engaged in maritime navigation. 8. Overseas employmentmeans employment of a worker outside the Philippines. 9. Emigrantmeans any person, worker or otherwise, who immigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. b. Private Recruitment (Art. 16)

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General Rule- No person or entity


other than the public employment offices shall engage in the recruitment and placement of workers. Exception- 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. (Art. 25) Entities Authorized to Recruit: 1. Public employment offices; 2. Private recruitment entities or private employment agencies; 3. Shipping or manning agents or representatives; 4. Philippine Overseas Employment Agency; 5. Construction contractors if authorized by the DOLE and the Construction Industry Authority; 6. Members of the diplomatic corps (but all hiring must pass through the POEA); and 7. Other persons or entities as may be authorized by the DOLE Secretary. Documentation of Workers: 1. Contract Processing- workers hired through the POEA shall issue the individual employment contract and such other documents as may be necessary for travel. 2. Passport Documentation 3. Visa Arrangement Recruitment and Placement by Private Sectors i. Qualifications: 1. Filipino citizens, partnerships, or corporations at least 75% of the authorized and voting capital stock of which is owned and controlled by Filipino citizens. 2. Minimum capitalization of P1M in case of single proprietorship or partnership and a minimum of P1M paid-up capital for corporations; and 3. Not otherwise disqualified by law or these guidelines to engage in the

recruitment and placement of workers for overseas employment. 4. Cash and Surety Bond ii. Disqualifications: 1. Travel agencies and sales agencies of airline companies; 2. Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency; 3. Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board of a corporation engaged in the business of a travel agency; 4. Persons, partnerships, or corporations which have derogatory records; 5. Persons employed in the DOLE or in other government agencies directly involved in overseas employment program and their relatives within the 4th degree of consanguinity or affinity; or 6. Those whose license has been previously cancelled or revoked. No license or authority shall be transferred, conveyed, or assigned to any other person or entity. Any violation shall result to automatic revocation of the license. Non-licensee or Non-Holder of Authority- any person, entity, or corporation which has not been issued a valid license or authority to engage in recruitment and placement of workers by the Secretary of Labor, or whose license or authority has been suspended, revoked, or cancelled by the POEA and the Secretary. c. Migrant Workers and Overseas Filipinos Act (RA 8042) It institutes the policies of overseas employment and establishes a higher standard of protection and promotion of the welfare of migrant workers, their families, and of overseas Filipinos in distress. The Supreme Court had the occasion to rule on conflicts of

34

jurisdiction between the courts and the labor agencies arising from the amendments to PD 1367 by PD 1691. The later law, PD 1691, is a curative statute which corrected the lack of jurisdiction of the labor arbiters at the start of the proceedings and therefore should be given retroactive application vis--vis pending proceedings. It was intended to correct a situation where two different tribunals had jurisdiction over separate issues arising from the same labor conflict. (UST vs. CA, GR No. 124350, Oct. 18, 2004) NOTE: Repatriation of Workers- The primary responsibility to repatriate a worker, including his remains and personal effects, belongs to the principal or the agency that recruited or deployed the worker. The principal of agency has to advance the air transport fare and immediately repatriate the worker, as needed, without determining the cause of termination of employment. If the cause of the termination is due solely to the fault of the worker, the principal or agency may recover the cost of repatriation from the worker after return to the country. Such obligation of the principal/agency to advance the plane fare and of the worker to refund the cost should be stipulated in every contract for overseas employment. In no case shall an employment agency require any bond or cash deposit from the worker to guarantee performance under the contract of his repatriation. The mandatory repatriation bond is abolished as of June 17, 1995 under RA 8042. Grounds for Disciplinary Action Under Migrant Workers Act: 1. Commission of a felony punished under Philippine laws or by the host country; 2. Drug addiction or possession or trafficking of prohibited drugs; 3. Desertion or abandonment; 4. Drunkenness, especially where the laws of the host country prohibit the same; 5. Gambling, especially when the laws of the host country prohibit the same;

6. Initiating or joining a strike or work stoppage where laws of host country prohibit the same; 7. Creating trouble at the worksite or in the vessel; 8. Embezzlement of company funds or of money and properties of a fellow worker entrusted for delivery to kins or relatives in the Philippines; 9. Theft or robbery; 10.Prostitution; 11.Vandalism; 12.Gunrunning or possession of deadly weapons; 13.Unjust refusal to depart from the worksite after all employment and travel documents have been duly approved by the appropriate government agency; and 14.Violation of the laws and sacred practices of the host country and unjustified breach of governmentapproved employment contract by a worker. d. Ban on Direct- Hiring (Art. 18)

General Rule- Direct hiring of


Filipino workers by a foreign employer is NOT allowed. Exceptions: 1. Name hirees-individual workers who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency but subject to POEA processing; 2. By members of diplomatic corps; 3. By international organizations; and 4. By such other employers as may be allowed by the DOLE. i. Minimum Conditions of Overseas Employment: 1. Guaranteed wages for regular working hours and overtime pay for services rendered beyond regular working hours in accordance with the established standards;

35

2. Free transportation from point of hire to the site of employment and return; 3. Free emergency medical and dental treatment facilities; 4. Just causes for termination of the contract or of the services of the workers; 5. Workmens compensation benefits and war hazard protection. 6. Repatriation of workers remains and properties in case of death at the point of hire; 7. Assistance on remittance of salaries, allowance, or allotments to the beneficiaries; and 8. Free and adequate board and lodging facilities or compensatory food allowance at the prevailing cost of living standards at the job site. e. Mandatory Remittance of Foreign Exchange Earnings (Art. 22) Requirements: 1. Seamen or mariners: 80% of the basic salary; 2. Workers for Filipino Contractors and Construction Companies: 70% of the basic salary; 3. Doctors, engineers, teachers, nurses and other professionals whose employment contract provide for lodging facilities: 70% of the basic salary; 4. All other professionals without board and lodging facilities: 50% of the basic salary; and 5. Domestic and other service workers: 50% of the basic salary. f. Non-Transferability of License or Authority (Art. 29) No License or authority shall be: 1. used directly or indirectly by any person other that those in

1.

whose favor it was issued or at any place other than that stated in the license or authority; 2. transferred, conveyed, assigned to any other person or entity. Effects of Violation: Automatic revocation of the license. 2. Only at their authorized official addresses may licensees and holders of authority or their duly authorized representatives undertake recruitment and placement activities. g. Fees to be Paid Workers (Art. 32) by

Any person applying with the 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. h. Prohibited Practices in Recruitment and Placement (Art. 34) 1. To charge or accept amount beyond the amount allowed by law; 2. To furnish or publish false notice or information in relation to recruitment and placement; 3. To give any false notice or information or commit any act of misrepresentation to secure license or authority; 4. To induce or attempt to induce workers to quit employment in order to offer him another: Except- if transfer is to liberate a worker form oppressive terms and conditions of employment. NOTE: It is not necessary that the worker is actually induced or did quit employment. 5. To influence or attempt to influence any person or entity not to employ any person who has not applied employment in his agency; 6. To engage in the recruitment and placement of workers in jobs harmful to public health or morality or to the dignity of the Philippines;

36

7. To obstruct or attempt to obstruct inspections by the Secretary; 8. To fail to file reports; 9. To substitute or alter employment contracts; 10.To become an officer or board member of a corporation engaged in the travel agency business; 11.To withhold or deny travel documents before departure for monetary or financial considerations other than those authorized by the Code; 12.To fail to actually deploy without valid reason as determined by the DOLE; 13.To fail to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of employment, in cases where the deployment does not actually take place without the workers fault. i. Suspension and/or Cancellation of License or Authority (Art. 36)

4. Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the Republic of the Philippines. (POEA 2000 Rules) ii. Grounds for Suspension/Cancellation of License: 1. Charging a fee before the worker is employed or in excess of the authorized amount. 2. Doing recruitment in places outside its authorized area; 3. Deploying workers without processing through the POEA; 4. Substituting or altering employment contracts; and 5. Publishing job announcements without the POEAs prior approval. (Sec. 4, Rule 2, Book IV, POEA Rules) j. Illegal Recruitment

Illegal Recruitment- refers to 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 a nonlicense or a non-holder of authority. Provided, any such non-licensee or non-holder of authority 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 commission of prohibited acts whether committed by a non-licensee or a non-holder of authority. i. Elements of Illegal Recruitment: 1. The offender is a non-holder of authority to lawfully engage in recruitment and placement of workers; 2. Offender undertakes either any recruitment activities under Article 13(6) or Article 34 of the Labor Code. It is incorrect to maintain that to be liable for illegal recruitment, one must present himself to the victims as a duly licensed recruiter. (People vs. Duque, 212 S 607)

Authority- document issued by


DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. License- a document issued by the DOLE authorizing a person or entity to operate a private employment agency. Non-licensee or non-holder of authority- any person, entity, or corporation which has not been issued a valid license or authority to engage in recruitment and placement of workers by the Secretary of Labor, or whose license or authority has been suspended, revoked, or cancelled by the POEA and the Secretary. i. Grounds for Revocation of License: 1. Incurring an accumulated three counts of suspension by an agency based on final and executory orders within the validity period of its license; 2. Violations/s of the conditions of license; 3. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal thereof;

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Persons who may be held liable for illegal recruitment are the principals, accomplices and accessories. An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, it if is shown that he actively and consciously participated in illegal recruitment. The existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. (Executive Secretary vs. CA GR. No. 131718, May 25, 2004) ii. Venue of Illegal Recruitment Case 1. RTC of the province where the illegal recruitment was committed; or 2. RTC of the province where complainant resides; NOTE: The first RTC to take jurisdiction over the case excludes the others. iii. Acts of Illegal RecruitmentArticle 34 (supra.) Illegal recruitment as a crime involving economic sabotage: 1. By a syndicate- if carried out by a group of at least 3 persons conspiring and confederating with one another; or 2. In a Large Scale- if committed against at least 3 persons, individually or as a group. (People vs. Bodozo, 215 S 33) k. Employment of NonResident Aliens (Art. 40) When it is allowed: 1. Upon determination by DOLE of the non-availability of a person in the Philippines who is competent, able, and willing at the time of the application to perform the services for which the alien is desired to be employed; 2. Employment permit from DOLE; 3. Employment will not be in certain nationalized business; 4. The non-resident alien worker and the employer shall bind themselves to train at least 2 Filipino understudies. Prohibition against Employment of Aliens:

General Rule: No alien shall be employed in establishments where or entities which have under their name or control a right, franchise, privilege, property, or business; the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines, or to corporations or associations at least 60% of the capital of which is owned by such citizens, (Anti-Dummy Law, Sec.2-A). Exceptions: 1. Where the Secretary of Justice specifically authorizes the employment of technical personnel; and 2. Where the aliens are elected members of the board of directors or governing body of corporations or associations in proportion to their allowable participation in the capital of such entities. Prohibition against transfer of employment (Art. 41) a. After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor. b. Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles 289 and 290 of the Labor Code. In addition, the alien worker shall be subject to deportation after service of his sentence.

l.

Philippine Overseas Employment Agency

i. Principal Functions of the POEA 1. Formulation, implementation, and monitoring of overseas employment of Filipino workers. 2. Protection of their rights to fair and equitable employment practices. 3.Deployment of Filipino Workers through government-to-government hiring. ii. Regulatory Function of the POEA

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private sector participation in the recruitment and overseas placement of workers through its licensing and registration system. iii. Adjudicatory Functions of the POEA 1. All cases which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration or recruitment and employment agencies or entities; and 2. Disciplinary action cases and other special cases which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers. CASES: PEOPLE OF THE PHILIPPINES vs. CAROL M. DELA PIEDRA G.R. No. 121777. January 24, 2001 KAPUNAN Facts: Accused Carol M. dela Piedra was charged before RTC in an information alleging: That on accused, without having previously obtained from the Philippine Overseas Employment Administration, a license or authority to engage in recruitment and overseas placement of workers, did then and there, wilfully, unlawfully and feloniously, offer and promise for a fee employment abroad particularly in Singapore thus causing Maria Lourdes Modesto et.al, all qualified to apply, in fact said Maria Lourdes Modesto had already advanced the amount of P2,000.00 to the accused for and in consideration of the promised employment which did not materialized thus causing damage and prejudice to the latter in the said sum; furthermore, the acts complained of herein tantamount to economic sabotage in that the same were committed in large scale. The trial court convicted the accused. Hence, this appeal by the accused questioning her conviction for illegal recruitment in large scale and assailing the constitutionality of the law defining and penalizing said crime.

Regulates

Issue: WON the law defining recruitment and placement violates due process is void for vagueness. Ruling: A criminal statute that fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute, or is so indefinite that it encourages arbitrary and erratic arrests and convictions, is void for vagueness. However, the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. It is to be distinguished, however, from legislation couched in imprecise languagebut which nonetheless specifies a standard though defectively phrasedin which case, it may be saved by proper construction. Under Section 13 (b) Labor Code, Recruitment and placement refers to any act of canvassing, enlisting, contracting, xxx 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. When undertaken by nonlicensees or non-holders of authority, recruitment activities are punishable as follows: (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, xxx (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage xxx. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three 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 or more persons individually or as a group.

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The proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made in the course of the canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of workers. The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words shall be deemed create that presumption. The word shall be deemed should by the same token be given the force of a disputable presumption or of prima facie evidence of engaging in recruitment and placement. In this case, Section 13 (b) Labor Code, therefore, is not a perfectly vague act whose obscurity is evident on its face. If at all, the proviso therein is merely couched in imprecise language that was salvaged by proper construction. It is not void for vagueness. Neither Section 13 (b), Labor Code is void for overbreadth. A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally worded statute, when construed to punish conduct which cannot be constitutionally punished is unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between the constitutionally

permissible and the constitutionally impermissible applications of the statute. In the present case, however, appellant did not even specify what constitutionally protected freedoms are embraced by the definition of recruitment and placement that would render the same constitutionally overbroad. Issue: WON petitioner committed illegal recruitment. Ruling: Illegal recruitment is committed when two elements concur. First, the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers. Second, he or she undertakes either any activity within the meaning of recruitment and placement defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. In case of illegal recruitment in large scale, a third element is added: that the accused commits said acts against three or more persons, individually or as a group. In this case, the first element is present. The certification of POEA Officer-in-Charge Macarulay states that appellant is not licensed or authorized to engage in recruitment and placement. The second element is also present. Appellant is presumed engaged in recruitment and placement under Article 13 (b) of the Labor Code. Both Nancy Araneta and Lourdes Modesto testified that appellant promised them employment for a fee. That appellant did not receive any payment for the promised or offered employment is of no moment. From the language of the statute, the act of recruitment may be for profit or not; it suffices that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment. Issue: WON appellant committed illegal recruitment if large scale.

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Ruling: A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. In this case, only two persons, Araneta and Modesto, were proven to have been recruited by appellant. The third person named in the complaint as having been promised employment for a fee, Jennelyn Baez, was not presented in court to testify. It is true that law does not require that at least three victims testify at the trial; nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed against three or more persons. In this case, evidence that appellant likewise promised her employment for a fee is sketchy. The only evidence that tends to prove this fact is the testimony of Nancy Araneta, who said that she and her friends, Baez and Sandra Aquino, came to the briefing and that they filled up application forms. The affidavit Baez executed jointly with Araneta cannot support Aranetas testimony. The affidavit was neither identified, nor its contents affirmed, by Baez. Insofar as it purports to prove that appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible. In any case, hearsay evidence, such as the said affidavit, has little probative value. RTC is modified. PHILSA INTERNATIONAL PLACEMENT vs. SECRETARY OF LABOR AND VIVENCIO DE MESA G.R. No. 103144. April 4, 2001 GONZAGA-REYES Facts: Petitioner Philsa International Placement is a domestic corporation engaged in the recruitment of workers for overseas employment. Private respondents, who were recruited by petitioner for employment in Saudi Arabia, were required to pay placement fees. After the execution of their respective work contracts, private respondents left for

Saudi Arabia. They then began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner. While in Saudi Arabia, private respondents were allegedly made to sign a second contract which changed some of the provisions of their original contract resulting in the reduction of some of their benefits and privileges. When they refused to sign this third contract, their services terminated by AlHejailan and they were repatriated to the Philippines. Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return of their placement fees and for the payment of their salaries for the unexpired portion of their contract. When petitioner refused, they filed a case before the POEA against petitioner Philsa and its foreign principal, Al-Hejailan with illegal dismissal and payment of salary differentials. Under POEA Rules dated May 21, 1985, complaints involving employer-employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas employment, including money claims, are adjudicated by the Workers Assistance and Adjudication Office (WAAO). On the other hand, complaints involving recruitment violations warranting suspension or cancellation of the license of recruiting agencies are cognizable by the POEA thru its Licensing and Recruitment Office (LRO). In cases where a complaint partakes of the nature of both an employer-employee relationship case and a recruitment regulation case, the POEA Hearing Officer shall act as representative of both the WAAO and the LRO and both cases shall be heard simultaneously. On the aspects of the case involving money claims arising from the employeremployee relations and illegal dismissal, the POEA ordered respondent PHILSA to pay complainants, jointly and severally with its principal Al-Hejailan. Under the Rules and Regulations of the POEA, the decision of the POEA-Adjudication Office on matters involving money claims arising from the employer-employee relationship of overseas Filipino workers may be appealed to NLRC. Thus, as both felt

41

aggrieved by the said POEA Decision, petitioner and private respondents filed separate appeals to NLRC, which modified the award granted by the POEA. Private respondents then elevated the decision of the NLRC to the Supreme Court which was dismissed by the Court. POEA also found petitioner guilty of illegal exaction, contract substitution, and unlawful deduction. Petitioner is ordered to refund the placement fees. Moreover, petitioners license is suspended. Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or canceling a license or authority to act as a recruitment agency may be appealed to the Ministry (now Department) of Labor. The Secretary of Labor affirmed in toto the POEA. PETITIONERs CONTENTION: The Secretary of Labor committed grave abuse of discretion in holding petitioner liable for illegal deductions/withholding of salaries. The Decision of the NLRC absolving it from private respondent de Mesas claim for salary deduction has already attained finality by reason of the dismissal of private respondents petition for certiorari of the said NLRC decision by the Supreme Court. Issue: WON petitioner may still be held liable for illegal deduction or withholding of salaries despite the finality of NLRCs decision absolving the former from de Mesas claim for salary deduction. Ruling: Petitioner is correct in stating that the Decision of the NLRC has attained finality by reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC Decision dealt only with the money claims of private respondents arising from employer-employee relations and illegal dismissal and as such, it is only for the payment of the said money claims that petitioner is absolved. The administrative sanctions, which are distinct and separate from the money claims of private respondents, may still be properly imposed by the POEA. The NLRC

Decision absolving petitioner from paying private respondent de Mesas claim for salary deduction based its ruling on a finding that the said money claim was not raised in the complaint. But the fact that the claim for salary deduction was not raised by private respondents in their complaint will not bar the POEA from holding petitioner liable for illegal deduction or withholding of salaries as a ground for the suspension or cancellation of petitioners license. Under the POEA Rules and Regulations, the POEA, on its own initiative, may conduct the necessary proceeding for the suspension or cancellation of the license of any private placement agency on any of the grounds mentioned therein. As such, even without a written complaint from an aggrieved party, the POEA can initiate proceedings against an erring private placement agency and, if the result of its investigation so warrants, impose the corresponding administrative sanction thereof. Moreover, the POEA, in an investigation of an employer-employee relationship case, may still hold a respondent liable for administrative sanctions if, in the course of its investigation, violations of recruitment regulations are uncovered. It is thus clear that even if recruitment violations were not included in a complaint for money claims initiated by a private complainant, the POEA, under its rules, may still take cognizance of the same and impose administrative sanctions if the evidence so warrants. As such, the fact that petitioner has been absolved by final judgment for the payment of the money claim to private respondent de Mesa does not mean that it is likewise absolved from the administrative sanctions which may be imposed as a result of the unlawful deduction or withholding of private respondents salary. The POEA thus committed no grave abuse of discretion in finding petitioner administratively liable of

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one count of deduction/withholding of salary.

unlawful

ordering Manuela S. Catan to pay him. NLRC affirmed the decision appealed from. Issue: WON Catan is liable for damages. Ruling: An analysis of Pereira's sworn declarations generates perplexing questions. If Pereira could not understand the document that he was being forced to sign because it was written in Arabic, how could he assert that it was in truth another two-year employment contract? No answer can be given on the face of the record. Again, if Pereira had indeed sabotaged the operations of the power plant as was the belief, according to Pereira, entertained by his employer, Abusame why would Abusame be so eager and so insistent to sign them up for another two-year employment contract? This simply makes no sense, especially if it be considered that their original contract still had one year to run, as is the uncontroverted fact. The patently illogical and unnatural features of Pereira's evidence make it undeserving of credence; and that they were apparently ignored and not taken into account in the general assessment of the proofs presented by the parties indicates capriciousness and whimsicality constituting grave abuse of discretion on the part of the Labor Arbiter and the NLRC. These unprepossessing features infest and taint the very facts which form the foundation of Pereira's cause of action; hence, the conclusions of the POEA based on those facts must be set aside. Unfortunately, this leaves Pereira with no other evidence to adequately make out a cause of action against petitioner Catan. Petition is granted. PEOPLE OF THE PHILIPPINES vs. CORAZON NAVARRA G.R. No. 119361. February 19, 2001 PARDO Facts: Job and Rodolfo Navarra, along with Rodolfos wife Corazon Navarra, operated an agency which purported to have the authority to recruit and place workers for

Decision appealed from is modified. MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY vs. NLRC and AMELIA DE PEREIRA G.R. No. 74218 December 14, 1987 NARVASA Facts: Eduardo de Pereira was recruited by M.S. Catan Placement Agency on September 4, 1979 to work as an electrical maintenance operator for Al Gihaz Establishment Power Plant in Saudi Arabia. His employment contract (and the supplement thereto) provided inter alia that: 1. his term of employment was for 2 years or 24 months; 2. he was entitled to a thirty-day paid vacation leave upon completion of 12 months of continuous service, but the precise time of enjoyment of the leave would be determined by Al Gihaz in "accordance with work convenience. He claims that after completing a year's continuous service at the Al Gihaz Power Plant, he requested for his thirty-day paid vacation leave pursuant to his contract, but the response of his employer, a Mr. Abusame, was utterly unexpected and grossly oppressive, for what Abusame did was to put them on jail and to force him to sign another 2 year contract written in Arabicand that he refused because he could not understand the contents but he had no choice but to sign the contract as a condition of their release from jail. Forthwith, Pereira sought the assistance of the Philippine Embassy for his repatriation but was only able to return to the Philippines after paying the sum of US$950.00 for his plane fare and other processing fees to M.S. Catan, who was then in Saudi Arabia. Once back in Manila, Pereira lost no time in lodging a complaint with the Bureau of Employment Services of the Ministry of Labor and Employment against M.S. Catan Placement Agency and/or Manuela S. Catan, for recovery of damages arising from breach of contract. After due proceedings, the POEA-Worker's Assistance and Adjudication Office rendered a decision in Pereira's favor,

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employment in Taiwan. The agency was named Rodolfo Navarras Travel Consultant and General Services (RNTCGS), which in the course of its operation was able to victimize several hapless victims who never left Philippine soil, and in due time, filed complaints with the Philippine Overseas Employment Agency (POEA) against accused for illegal recruitment. Neither RNTCGS nor Rodolfo, Corazon or Job in their personal capacities were licensed or authorized by the POEA to recruit workers for overseas employment. An information against accused for illegal recruitment committed in a large scale provides: That the accused conspiring, confederating and mutually helping one another, representing themselves to have the capacity to contract, enlist and transport workers for employment abroad, did then and there willfully, unlawfully and for a fee, recruit and promise employment/job placement to Merlie Villesca, Gliceria Marinas, Jose Lloret, Beinvenida Amutan, Melba Yacas, Marites De Sagun, Vilma Marana, Ernesto Amutan, Florie Rose Ramos, Ronald Allan Santos And Henry Dela Cruz without first securing the required license and/or authority from POEA. RTC convicted Rodolfo and job for Illegal Recruitment Committed in a Large Scale Resulting to Economic Sabotage. Hence, this appeal. Issue: WON the accused committed illegal recruitment committed in a large scale resulting to economic sabotage. Ruling: Illegal recruitment has two essential elements: First, the offender has no valid license or authority required by law to enable him to lawfully engage in the recruitment and placement of workers. Second, the offender undertakes any activity within the meaning of recruitment and placement defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. A nonlicensee or nonholder of authority means any person, corporation or entity without a valid

license or authority to engage in recruitment or placement from the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary of Labor. Under Article 13(b) of the Labor Code, recruitment and placement refer 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. In the case at bench, from the evidence adduced, accused-appellants committed acts of recruitment and placement, such as promises to the complainants of profitable employment abroad and acceptance of placement fees. Accusedappellants gave the impression that they had the power to send the complainants to Taiwan for employment. With the certification from DOLE stating that RNTCGS was not authorized to recruit workers for overseas employment, and promises by the accused of employment abroad for complainants on payment of placements fees, the conclusion is inescapable that accused are liable for illegal recruitment. Article 38 (b) of the Labor Code, as amended by P. D. No. 2018 provides that illegal recruitment shall be considered an offense involving economic sabotage if any of the following qualifying circumstances exists: First, when illegal recruitment is committed by a syndicate. For purposes of the law, a syndicate exists when three or more persons conspire or confederate with one another in carrying out any unlawful or illegal transaction, enterprise or scheme. Second, there is economic sabotage when illegal recruitment is committed in a large scale, as when it is committed against three or more persons individually or as a group.

44

In this case, even assuming that there was no conspiracy, the record clearly shows illegal recruitment committed in a large scale, since at least 6 complainants were victims, which is more than the minimum number of persons required by law to constitute illegal recruitment in a large scale, resulting in economic sabotage. RTC is affirmed. ESALYN CHAVEZ vs. EDNA BONTOPEREZ and CENTRUM PROMOTIONS PLACEMENT CORP G.R. No. 109808 March 1, 1995 PUNO Facts: Petitioner Esalyn Chavez, an entertainment dancer, entered into a standard employment contract for overseas Filipino artists and entertainers with Planning Japan Co through its Philippine representative, private respondent Centrum Placement & Promotions Corporation. The contract had a duration of 2-6 months, and petitioner was to be paid a monthly compensation of US$1,5000.00. POEA approved the contract. Subsequently, petitioner executed side agreement reducing her salary below the minimum standard set by the POEA with her Japanese employer through her local manager, Jaz Talents Promotion. Petitioner left for Osaka, Japan, where she worked for 6 months. She came back to the Philippines. Petitioner instituted the case at bench for underpayment of wages with the POEA Private respondent Centrum Promotions and Placement Corporation, the Philippine representative of Planning Japan, Co., Inc., its insurer, Times Surety and Insurance Co., Inc., and Jaz Talents Promotion. The complaint was dismissed by POEA which was affirmed by POEA. Issue: WON private respondents are not solidarily liable to her for US$6,000.00 in unpaid wages. Ruling: Thirdly, private respondents Centrum and Times as well as Planning Japan Co., Ltd.

the agency's foreign principal are solidarily liable to petitioner for her unpaid wages. This solidary liability also arises from the provisions of Section 10(a)(2), Rule V, Book I of the Omnibus Rules Implementing the Labor Code, as amended, thus: a) A formal appointment or agency contract executed by a foreign-based employer in favor of the license holder to recruit and hire personnel for the former xxx. Such formal appointment or recruitment agreement shall contain the following provisions, among others: 2. Power of the agency to sue and be sued jointly and solidarily with the principal or foreign based employer for any of the violations of the recruitment agreement and the contracts of employment. Our overseas workers constitute an exploited class. Most of them come from the poorest sector of our society. They are thoroughly disadvantaged. Their profile shows they live in suffocating slums, trapped in an environment of crime. Hardly literate and in ill health, their only hope lies in jobs they can hardly find in our country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they will work under sub-human conditions and accept salaries below the minimum. The least we can do is to protect them with our laws in our land. Regretfully, respondent public officials who should sympathize with the working class appear to have a different orientation. Petition is granted. V. LOCAL EMPLOYMENT A. CONDITIONS EMPLOYMENT a. Employment of: 1. APPRENTICES OF

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i. Definition of Terms means practical training on the job supplemented by related theoretical instruction. b. 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. c. Apprenticeable occupation- means any trade, form of employment or occupation which requires more than three (3) months of practical training on the job supplemented by related theoretical instruction. d. Apprenticeship agreement- is an employment contract wherein the employer binds himself to train the apprentice and the apprentice in turn accepts the terms of training. ii. Qualifications of Apprentices: 1. At least 15 years of age; provided that those who are at least 15 years of age but less than 18 may be eligible for apprenticeship and the apprenticeship agreement shall be signed in his behalf by the parent or guardian or authorized representative of DOLE. NOTE: The apprenticeable age under Art. 59 of the Labor Code is 14 but under the Implementing Rules, the age is 15. The question of variance is rendered moot and academic by RA 7610 which explicitly prohibits employment of children below 15 years old. RA 7610 recognizes certain exceptions, but being an apprentice is not one of the exceptions. 2. Possess vocational aptitude and capacity for appropriate tests; and 3. Possess the ability to comprehend and follow oral and written instructions; 4. The company must have an apprenticeship program duly approved by the DOLE. Trade and industry associations may recommend to the Secretary of Labor, educational qualifications for apprentices, if approved, shall be the educational requirements for apprenticeship in such occupations unless waived by an employer in favor of an applicant who has demonstrated exceptional ability. iii. Requisites for Employment of Apprentices:

a. Apprenticeship-

1. Employers must be engaged in highly technical industries; 2. Apprentice may be hired only in apprenticeable occupations as determined by the Secretary of Labor. iv. Requisites for a Valid Apprenticeship: 1. Qualifications of the apprentice; 2. Qualifications of the employer; 3. Apprenticeship Agreement duly executed and signed which shall contain the following: a. the duration of apprenticeship which shall not exceed 6 months; b. the wage rates below the legal minimum wage which in no case shall start below 75% of the applicable minimum wage in the place where he is working (i.e. compensation which must not be less than 75% of the applicable minimum wage except onthe-job training (OJT). 4. Apprenticeship program duly approved by the DOLE (Nitto Enterprises vs. NLRC, GR No. 114337, Sept, 29, 1995); otherwise, theres a possibility that apprentice may become a regular employee. 5. Period of apprenticeship shall not exceed 6 months. v. Signing of Apprenticeship Agreement Every apprenticeship agreement shall be signed by the employer or his duly authorized representative and by the apprentice. An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, or if the latter is not available, by an authorized representative of the DOLE. vi. Venue of Apprenticeship Programs OJT of Apprentices may be undertaken in: 1. the plant, shop or premises, of the employer or firm concerned if the apprenticeship program is organized by an individual employer or firm; 2. the premises of one or several firms designated for the purpose by the organizer of the program if such organizer is an association of

46

employers, civic group and the like; and 3. DOLE Training Center or other public training institutions with which the Bureau has made appropriate arrangements. vii. Violation of Apprenticeship Agreement Art. 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. Art. 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 executory. Art. 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. viii. Voluntary Organization of Apprenticeship Program

Art. 71. Deductibility of training costs. An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wage. Art. 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. Requisites for Tax Deductions in Case Employers have Apprenticeship Programs: 1. the program must be duly recognized by the DOLE; 2. the deduction shall not exceed 10% of direct labor wage; and 3. the employer must pay his apprentices for minimum wage. 2. LEARNERS i. Definition of Terms a. Learners- are persons hired as trainees in semi-skilled and other industrial occupations which are nonapprenticeable 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. b. Learnership Agreement- refers to the employment and training contract entered into between the employer and the learner. ii. When Learners May be Hired 1. when no experienced workers are available;

General Rule- The organization of


apprenticeship program shall be primarily a voluntary undertaking of employers. ExceptionInstances when organization of program is compulsory: 1. when national security or particular requirements of economic development so demand; 2. where services of foreign technicians are utilized by private companies in apprenticeable trades.

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2. the employment of learners being necessary to prevent curtailment of employment opportunities; and 3. such employment will not create unfair competition in terms of labor costs nor impair working standards. iii. Contents of Learnership Agreement 1. The names and addresses of the employer and the learner; 2. The occupation to be learned and the duration of the training period which shall not exceed 3 months. 3. The wage of learner which shall be at least 75% of the applicable minimum wage; and 4. A commitment to employ the learner, if he so desires, as a regular employee upon completion of training. A learner who has worked during the first 2 months shall be deemed a regular employee if training is terminated by the employer before the end of the stipulated period through no fault of the learner. Learners in piecework-Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. APPRENTICESHIP LEARNERSHIP Duration Not less than 3 Practical training on months practical the job not to training on the job exceed 3 months. but not more than a 6 months Concept Practical training on Hiring of persons as the job trainees in semisupplemented by skilled and other related theoretical industrial instruction occupations which are nonapprenticeable and which may be learned through practical training on the job in a relatively short period of time. Employers Commitment to Hire No commitment to With a commitment hire to employ the learner as regular

employee if he desires upon completion of learnership Effect of Pre-termination Worker is not Learner is considered an considered regular employee employee after 2 months of training and dismissal is without fault of learner Focus of Training Highly skilled or Semi-skilled/ technical industries industrial and in industrial occupation (nonoccupation apprenticeable) Approval Requires DOLE Not required approval for validity Exhaustion of Administrative Remedies in case of Breach Precondition for Not required filing action 3. HANDICAPPED

Handicapped workers- are those


whose earning capacity is impaired by age or physical or mental deficiency or injury. i. When Employable 1. when their employment is necessary to prevent curtailment of employment opportunities; and 2. when it does not create unfair competition in labor costs or impair or lower working standards.

Subject to the provisions of the


Labor Code, handicapped workers may be hired as regular workers, 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 were hired. Equal Opportunity for Employment (RA 7277)- No disable person shall be denied access to

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opportunities for suitable employment. Qualified disabled employees 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-bodies person. Even a handicapped worker can acquire the status of a regular employee. Duration of Employment- the minimum, no maximum duration. Dependent on agreement but it is necessary that there is a specific duration. ii. Contents Agreement of Employment

in the manner or within the range considered normal for a human being. 4. HOMEWORKERS i. Regulation of Industrial Home The Rule shall apply to any homeworker who performs in or about his home any processing of goods or materials, in whole or in part, which have been furnished directly or indirectly by an employer and therafter to be returned to the latter. ii. Distribution of Homework

Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall include: 1. The names and addresses of the handicapped workers to be employed; 2. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage; 3. The duration of employment period; and 4. The work to be performed by handicapped workers. NOTE: The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representative.

Employer of Homeworkers- any


natural or artificial person who, for his own account or benefit, or on behalf of any person residing outside the Philippines directly or indirectly, or through any employee, agent, contractor, sub-contractor; or any other person: 1. Delivers or causes to be delivered any goods or articles to be processed in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or 2. Sells any goods or articles for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing. 5. WOMEN i. Night Work Prohibition (Art. 130)

HANDICAPPED WORKERS under Labor Code Those whose earning capacity is impaired by age or physical or mental deficiency or injury.

HANDICAPPED PERSON (RA 7277) Those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity

General

Rule- NO WOMAN, regardless of age, shall be employed or permitted or suffered to work, with or without compensation in any: 1. Industrial undertaking between 10pm and 6am; 2. Commercial/ Non-industrial undertaking between 12mn and 6am; 3. Agricultural undertaking at nighttime unless she is given a

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period of rest of not less than 9 consecutive hours. Exceptions- This prohibitions shall NOT APPLY in any of the following cases: 1. In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic, or other disasters or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety; 2. In cases of urgent work to be performed on the machineries, equipment or installations, to avoid serious loss which the employer would otherwise suffer; 3. Where the work is necessary to prevent serious loss of perishable goods; 4. Where the woman employee holds a responsible position of managerial or technical nature, or where the woman employee has been engaged to provide health and welfare service; 5. Where the nature of the work requires the manual skill and dexterity of women workers and the same cannot be performed with equal efficiency by male workers; 6. Where the women employees are immediate members of the family operation the establishment or undertaking; and 7. Under other analogous cases exempted by the Secretary of Labor in appropriate regulations. ii. Facilities for Women (Art. 132) The Secretary of Labor may require employers to: 1. Provide seats proper for women and permit them to use the seats when they are free from work or during office hours provided the quality of the work will not be compromised; 2. Establish separate toilet rooms and lavatories for men and women and provide at least a dressing room for women; 3. Establish a nursery in the establishment; and

4. Determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like. iii. Maternity Leave Benefits (Art. 133) Maternity Leave under the SSS Law- A female member, who need not be legally married, who has paid for at least 3 monthly contributions in the 12month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credit for 60 days or 78 days, in case of caesarian delivery. Maternity benefits provided herein shall be paid only for the first four deliveries or miscarriages; Maternity benefits like other benefits granted by the SSS, are granted in lieu of wages and therefore, may not be included in computing the employees 13th month pay for the calendar year. a. Qualifications for Entitlement: 1. The female employee should be employed at the time of the delivery, miscarriage or abortion; 2. The employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS in accordance with the rules and regulations in may provide; 3. That full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application; and 4. That payment of daily maternity benefits have been received. NOTE: Every pregnant woman in the private sector, whether married or unmarried is entitled to the maternity leave benefits. b. Other Important Conditions: That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and

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That if employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified the employer of the time of the pregnancy, the employer shall day to the SSS damages equivalent to the benefits which said employee would otherwise have been entitled to. c. Extension of Maternity Leave: The maternity leave shall be extended without pay on account of illness medically certified to arise out of the pregnancy, delivery, abortion, or miscarriage, which renders the woman unit for work, unless she has earned unused leave credits from which such extended leave may be charged. d. PATERNITY LEAVE (RA 8187) Grants paternity leave of 7 days with full pay, consisting of basic salary, to all married male employees in the public and private sector. Available only for the first 4 deliveries of the legitimate spouse with whom the husband is cohabiting; the term delivery includes childbirth, miscarriage or abortion. In the event that such leave was not availed of, said leave shall not be convertible to cash. Purpose- to enable the husband to lend support to his wife during the period of recovery and/or in the nursing of the newly born child. d.i. Conditions for Entitlement: 1. He is an employee at the time of the delivery of his child; 2. He is cohabiting with his spouse at the time she gives birth or suffers a miscarriage; 3. He has applied for paternity leave with his employer; 4. His wife has given birth or suffered a miscarriage; the term wife refers to the lawful wife which means the woman who is legally married to the male employee concerned. d.ii. Application of Leave: 1. Must be made within a reasonable time from the expected date of delivery by the pregnant spouse;

2. within such period as may be provided by company rules and regulations or CBA. Prior application for leave shall NOT be required in case of miscarriage. iv. Family Planning Services Employers who habitually employ more than 200 workers in any locality shall provide free family planning services to their employees and their spouses which shall include but not limited to, the application or use of contraceptive pills and intrauterine devices. v. Discrimination Prohibited It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. Acts of Discrimination: 1. Payment of a lesser compensation for work of equal value. 2. Favoring a male employee over a female employee solely on the account of their sexes. vi. Stipulation Against Marriage It shall be unlawful for an employer: 1. to require as a condition for employment or continuation of employment that a woman employee shall not get married; 2. to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed resigned or separated; 3. to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. vii. Prohibited Acts It shall be unlawful for an employer: 1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying the maternity leave, facilities and other benefits provided under the Code; 2. To discharge such woman employee on account of her pregnancy, or while on leave or confinement due to her pregnancy; 3. To discharge or refuse the admission of such woman upon

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returning to her work for fear that she may be pregnant; 4. To discharge any woman or child or any other employee for having filed a complaint or having testified on being about to testify under the Code. viii. Classification of Certain Women Workers Any woman who is permitted to work or suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishment, under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor, shall be considered as an employee of such establishment for purposes of labor and social legislation. 6. HOUSE HELPERS i. Rights of House- helpers (Articles 1689-1699, NCC) non-assignment to non-household work; reasonable compensation (minimum cash wage); lodging, food, and medical attendance; if under 18 years of age, an opportunity for elementary education (cost of which shall be part of house helpers compensation); contract for household service shall not exceed 2 years (renewable however from year to year); just and humane treatment; right not to be required to work for more than 10 hours a day (if the house helper agrees to work overtime, and there is additional compensation, the same is permissible); right to 4 days vacation each month with pay (if the helper does not ask for the vacation, the number of vacation days cannot be accumulated, he is entitled only to its monetary equivalent); funeral expenses must be paid by the employer if the house helper has no relatives with sufficient

1. 2. 3. 4.

means in the place where the head of the family lives. 10.termination only for a just cause; 11.indemnity for unjust termination of service; 12.employment certification as to nature and duration of service and efficiency and conduct of the house helper. ii. Indemnity for Unjust Termination of Service: 1. If the period for household service is fixed, neither the employer not the house helper may terminate the contract before the expiration of the term, except for a just cause. 2. If the house helper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for 15 days by way of indemnity. 3. If the house helper leaves without justifiable reason, he or she shall forfeit an unpaid salary due him or her not exceeding 15 days. iii. Employment for Certification Upon the severance of the household service relationship, the house helper may demand from the employer a written statement of the nature and duration of the service and his or her efficiency and conduct as house helper. 7. MINORS (RA 7610) i. Minimum Employable Age

5. 6. 7.

General Rule- No child below 15


years old shall be employed. Conditions on the Employment of a Child below 15 years old: 1. When the child works directly under the sole responsibility of his parents or legal guardian who employs members of his family only under the following conditions: a. employment does not endanger the childs life, safely, health and morals; b. employment does not impair the childs normal development; and c. the parent/ legal guardian provides the child with the

8.

9.

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primary and/or secondary education prescribed by DepEd. 2. Where the childs employment, or participation in public entertainment or information through cinema, theater, radio or television is essential, provided that: a. employment does not involve advertisements or commercials promoting alcoholic beverages, intoxicating drinks, tobacco and its by products or exhibiting violence; b. there is written contract approved by the DOLE; and c. the conditions prescribed for the employment of minor are met. Any person between 15 and 18 years old may be employed in any nonhazardous work. ii. Non-Hazardous Work or Undertaking One where the employee is not exposed to any risk which constitutes an imminent danger to his safety and health. iii. Hazardous Work Places: 1. where the nature of the work exposes the workers to dangerous environmental elements, contaminants, or work conditions; 2. where the workers are engaged in construction work, logging, firefighting, mining, quarrying, blasting, stevedoring, dock work, deep-sea fishing, and mechanized farming; 3. where the workers are engaged in the manufacture or handling of explosive and other pyrotechnic products; 4. where the workers use or are exposed to heavy or power-driven machinery or equipment; and 5. where the workers use or are exposed to power-driven tools. B. TYPES OF EMPLOYEES i. Definition of Terms

a. Managerial employees under Article 82 of the Labor Code-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. b. Managerial Employee under Article 212 of the Labor Code- 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. c. Field personnel- shall refer to nonagricultural 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. d. Confidential Employee- Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies [specifically in the field of labor relations]. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his superior officer; and that officer must handle the prescribed responsibilities relating to labor relations. e. 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. f. Rank and File Employees- All employees not falling within any of the above definitions are considered rank-andfile employees. ii. Managerial Employee under Labor Standards vs. Managerial Employee under Labor Relations Managerial Employee under Labor Standards Managerial Employee under Labor Relations

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(Art. 82) Used only for purposes of Conditions of Employment 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.

(Art. 212 m) Used only for purposes of Labor Organization 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.

job includes the facilitation of the processing of the bills of lading of all intended company shipments. Petitioner Union maintains that both Plaza and Yap are supervisors who are disqualified to join the proposed bargaining unit for rank-andfile employees. The Med-Arbiter declared that the challenged voters Yap and Plaza are rank-and-file employees. Issue: WON Plaza and Yap are supervisory employees for purposes of labor organization. Ruling: The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and file groups. Article 212 (m) of the Code provides: (m) Managerial employee is 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. 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. Under Rule I, Section 2 (c), Book III of the Implementing Rules of the Labor Code, to be a member of managerial staff, the following elements must concur or co-exist, to wit: (1) that his primary duty consists of the performance of work directly related to management policies; (2) that he customarily and regularly exercises discretion and independent judgment in the performance of his functions; (3) that he regularly and directly assists in the management of the establishment; and (4) that he does not devote more than twenty percent of his time to work other than those described above. In the case at bench, the Supreme Court did not disturb the findings of the MedArbiter that the petitioner Union failed to present concrete and substantial evidence

Supervisors are Supervisors are not members of the included in this term managerial staff CASES: A. D. GOTHONG MANUFACTURING CORPORATION EMPLOYEES UNIONALU vs. NIEVES CONFESOR and A.D. GOTHONG MANUFACTURING CORPORATION G.R. No. 113638 November 16, 1999 GONZAGA-REYES Facts: Petitioner A. D. Gothong Manufacturing Corporation Employees Union-ALU (Union) filed a petition for certification election in its bid to represent the unorganized regular rank-and-file employees of respondent A. D. Gothong Manufacturing Corporation (Company) excluding its office staff and personnel. Respondent Company opposed the petition as it excluded office personnel who are rank and file employees. In the inclusion-exclusion proceedings, the parties agreed to the inclusion of Romulo Plaza and Paul Michael Yap in the list of eligible voters on condition that their votes are considered challenged on the ground that they were supervisory employees. Both Plaza and Yap argued that they are rank-and-file employees. Plaza claimed that he was a mere salesman based in Cebu, and Yap argued that he is a mere expediter whose

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to establish the fact that challenged voters are either managerial or supervising employees. Nowhere in the documentary evidence presented by the Union that therein is stated about any instance where the challenged voters effectively recommended any managerial action which would require the use of independent judgment. Petition is denied. SURIGAO DEL NORTE ELECTRIC COOPERATIVE vs. NLRC AND ELSIE ESCULANO G.R. No. 125212 June 28, 1999 YNARES-SANTIAGO Facts: A former employee of petitioner cooperative, Cosette O. Quinto, sent a letter to its General Manager, petitioner Eugenio A. Balugo, informing Balugo of her decision to be separated with SURNECO due to her pressing personal problems. No action was taken on this matter by either petitioner Balugo or petitioner cooperative's Board of Directors. Nearly four months later, private respondent Elsie Esculano, being then the Personnel Officer of petitioner cooperative sent a letter to petitioner Balugo regarding Quinto's letterrequest, attached to her letter was a report containing her findings and recommendations. In her attached report, private respondent concluded that petitioner cooperative had not properly accorded Quinto due process before terminating her services, enumerating the circumstances evidencing such lack of due process. Thus, private respondent recommended that petitioner cooperative grant Quinto separation pay, otherwise, the latter would be entitled to reinstatement without loss of seniority rights and other privileges and benefits. Meanwhile, with no action taken by petitioner cooperative on her letterrequest, Quinto filed a Complaint for Illegal Dismissal against petitioner cooperative. Without a doubt, the complaint was based largely on the report submitted to petitioner Balugo by private respondent Esculano. On account of the filing of the illegal dismissal case against petitioner

cooperative, based largely on private respondent's report, Balugo issued a Memorandum to Esculano in which she was made to explain on why she made a review of Quintos case even if she was not authorized to do so and for furnishing the copy of the report to Quinto. Esculano submitted her Written Explanation to Balugo and reasoned out that it was inherent in her job as Personnel Officer "to assist Management in formulating and evaluating plans, policies and procedures on personnel related matters, and recommend to Management and (the) Board of Directors wage, salary and other benefits. Petitioner cooperative, however, through its Board of Directors, proceeded to act on the case of private respondent terminating the services of the latter. Private respondent filed a Complaint for illegal dismissal. Labor Arbiter declared private respondent's dismissal as valid and legal which was set aside by the NLRC. Issue: WON private illegally dismissed. Ruling: First, there is no basis for petitioner cooperative's charge of serious misconduct on the part of private respondent. Misconduct is 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 in judgment. In the case at bench, private respondent's review of Quinto's case hardly qualifies as serious misconduct.As acknowledged by petitioners, private respondent, as Personnel Officer, holds a managerial position. As such, her authority is not merely routinary or clerical in nature but requires independent judgment. Indeed, those occupying managerial positions are considered vested with a certain amount of discretion and independent judgment. As Personnel Officer, private respondent could very well take charge of matters involving employees, even former ones, and proceed to make recommendations thereon. This is precisely what private respondent did. To require private respondent was

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respondent to wait for management authorization before acting on matters already obviously within her job jurisdiction would be tantamount to making her a mere rank and file employee stripped of discretionary powers. Second, private respondent's dismissal cannot be justified on the basis of loss of confidence. To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion, otherwise, the employee would eternally remain at the mercy of the employer. In the case at bench, there was no direct proof that private respondent did furnish a copy of her report to Quinto. As such, petitioners cannot validly rely on loss of confidence as a ground to dismiss private respondent. Petition is dismissed. LEILANI MENDOZA vs. NLRC and ASIAN LAND STRATEGIES CORPORATION G.R. No. 131405 July 20, 1999 PANGANIBAN Facts: Petitioner Leilani Mendoza worked with the private respondent and later, she was appointed as finance manager of the private respondent and her tasks included, among others, custody of and disbursement of company funds. Petitioner claims that she was summoned by Ms. Ma. Angela Celeridad, the company's vicepresident, who informed her that management had decided to terminate her employment Hence, she was told either to resign or face dismissal. Later that day petitioner alleged that the president of the company, Johnny P. Lee, announced that her employment was already terminated. Petitioner lodged her complaint against the company for illegal

dismissal. Private respondent denies having dismissed the petitioner as no memorandum or letter of dismissal was issued to her. The company asserts that it received a complaint from several of its marketing and sales agents accusing petitioner of committing deliberate delays in the payment of their commission in violation of company policy. They alleged that she refused to release their commissions despite payment of the price of the properties they had brokered unless she [was] given a certain amount as her cut. The company also claims that another employee of the company, a certain Rufino Pahati, lodged a separate complaint against petitioner regarding his application for cash advance. Mr. Pahati claimed that petitioner made him apply for cash advance but it was she who took the money. She promised to pay him back but failed. Allegedly, the company sent a letter to Mendoza demanding her to explain all the irregularities imputed to her. NLRC ruled in favor of the company. Issue: WON dismissed. Ruling: True, employers cannot be compelled to retain in their service employees who are guilty of acts inimical to the interest of the former. True also, management has the right to dismiss erring employees as a measure of self-protection. In the case of managerial employees, employers are allowed a wider latitude of discretion in terminating their employment because they perform functions which by their nature require the full trust and confidence of the company. However, loss of trust and confidence has never been intended to afford an occasion for abuse. It cannot be used arbitrarily, whimsically or capriciously; it must be supported with substantial evidence. Unsubstantiated suspicions, accusations and conclusions of employers do not provide legal justifications for dismissing employees. In case of doubt, such Mendoza was illegally

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cases should be resolved in favor of labor, pursuant to the social justice policy of our labor laws and the Constitution. In the case at bench, the act of extorting money from sales agents in exchange for releasing their commissions is a serious accusation, but allegation is not proof. The employer has the burden of proof. However, the company failed to present sufficient evidence that petitioner was responsible for such abnormality. The relevant evidence for the private respondent consisted only of the following: (a) Gonzales' commission voucher; (b) the letter-complaint signed by the division heads of the Sales Department; (c) Pahatis letter-complaint; (d) the affidavits of Celeridad, Gonzales and Mendoza; (e) Lee's letter-notice dated June 2, 1995; (f) Celeridad's letter-notice dated June 24, 1995; and (g) several cash disbursement vouchers including those of Mendoza and Gonzales. While the cash disbursement voucher and Gonzales' affidavit support the claim that her commission was released to another person, they do not show that petitioner was responsible for such irregularity. As finance manager, she approved disbursement of the company's funds, but the actual payment of cash was usually the function of the company cashier. Labor tribunals should be cautioned against confusing conjecture with evidence. The absence of petitioner, who failed to contest the charges against her in the investigation conducted by private respondent, did not mean admission of the accusations. Petition is granted. SUGBUANON RURAL BANK, INC vs. BIENVENIDO E. LAGUESMA, AND SUGBUANON RURAL BANK, INC. ASSOCIATION OF PROFESSIONAL, SUPERVISORY, OFFICE, AND TECHNICAL EMPLOYEES UNION G.R. No. 116194. February 2, 2000 QUISUMBING Facts: Petitioner Sugbuanon Rural Bank, Inc., (SRBI) is a duly-registered banking

institution. Private respondent SRBIAssociation of Professional, Supervisory, Office, and Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with the Trade Unions Congress of the Philippines (TUCP). DOLE granted Certificate of Registration to APSOTEU. The union filed a petition for certification election of the supervisory employees of SRBI. SRBI filed a motion to dismiss the union's petition on the ground that the members of APSOTEU-TUCP were in fact managerial or confidential employees. Petitioner submitted detailed job descriptions to support its contention that the union members are managerial employees and/or confidential employees proscribed from engaging in labor activities. Petitioner argues that the functions and responsibilities of the employees involved constitute the very core of the bank's business, lending of money to clients and borrowers, evaluating their capacity to pay, approving the loan and its amount, scheduling the terms of repayment, and endorsing delinquent accounts to counsel for collection. The union filed its opposition to the motion to dismiss arguing that its members were not managerial employees but merely supervisory employees. Med-Arbiter denied petitioner's motion to dismiss. SRBI appealed the Med-Arbiter's decision to the Secretary of Labor which was denied for lack of merit. The certification election was ordered. Issue: WON the members of the union are managerial employees and/or highlyplaced confidential employees, hence prohibited by law from joining labor organizations and engaging in union activities. Ruling: Under Article 212 (m), Labor Code: Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer,

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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. In the case at bench, the employees in question only had recommendatory powers subject to evaluation, review, and final decision by the bank's management. The job description forms submitted by petitioner clearly show that the union members in question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline employees. Moreover, the forms also do not show that the Cashiers, Accountants, and Acting Chiefs of the loans Department formulate and execute management policies which are normally expected of management officers. The Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner did not possess managerial powers and duties. Neither can these employees be classified as confidential employees. Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies [specifically in the field of labor relations]. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee-that is, the confidential relationship must exist between the employee and his superior officer; and that officer must handle the prescribed responsibilities relating to labor relations. Article 245 of the Labor Code does not directly, prohibit confidential employees from engaging in union activities. However, under the doctrine of necessary implication, the disqualification of managerial employees equally applies to confidential employees. The confidential-employee rule justifies exclusion of confidential employees because in the normal course of their duties they become aware of

management policies relating to labor relations. It must be stressed, however, that when the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting, or joining a union. In the case at bench, petitioner contends that it has only 5 officers running its dayto-day affairs. They assist in confidential capacities and have complete access to the bank's confidential data. Petitioner's explanation, however, does not state who among the employees has access to information specifically relating to its labor relations policies. Even Cashier Patricia Maluya, who serves as the secretary of the bank's Board of Directors may not be so classified. True, the board of directors is responsible for corporate policies, the exercise of corporate powers, and the general management of the business and affairs of the corporation. As secretary of the bank's governing body, Patricia Maluya serves the bank's management, but could not be deemed to have access to confidential information specifically relating to SRBI's labor relations policies, absent a clear showing on this matter. Thus, while petitioner's explanation confirms the regular duties of the concerned employees, it shows nothing about any duties specifically connected to labor relations. Petition is dismissed.

ROBERTO GONZALES vs. NLRC and PEPSI COLA PRODUCTS G.R. No. 131653 March 26, 2001 DE LEON Facts: Petitioner Roberto Gonzales was an employee of private respondent PCPPI. He was promoted to the position of Route Manager with a post at PCPPI Northbay Sales Office. As Route Manager, he was tasked with the supervision and coordination of the activities of salesmen servicing the area under his jurisdiction.

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Subsequently, petitioner was served with a notice of termination of his employment. His dismissal stemmed from alleged irregularities attributed to him as Route Manager and concurrently as dealer of Pepsi Cola products. Under his dealership contract with PCPPI, petitioner was extended by PCPPI a credit line of P300,000 payable in 30 days. As concessionaire or dealer, petitioner was entitled to a concession which is the cash equivalent of the value of empty bottles and its contents given to a dealer who met the monthly quota requirements in the sale of Pepsi Cola products. Petitioner operated under the business name of RR Store. Petitioner as proprietor of RR Store purchased Pepsi Cola products on credit amounting to P116,182.00. The credit transaction was covered by Charge Invoice. To cover this transaction, petitioner Gonzales issued a post-dated check. Three days before his said postdated check became due and payable, petitioner issued in favor of respondent PCPPI another post-dated check to cover the outstanding total debt of P116,182.00. With the issuance of the new post-dated check, petitioner ordered Mr. Gerry Alhambra, PCPPI salesman servicing RR Store, to issue an official receipt in the amount of P116,182.00 to cover his account. However, issuance of official receipt for post-dated checks is contrary to respondent PCPPI's company policy which requires that its official receipt shall be issued only for cash sales and/or currently dated checks. Nonetheless, Gerry Alhambra acceded to his superior, the petitioner, and issued the official receipt. When salesman Alhambra attempted to settle his account, the settlement clerk noticed that there was a discrepancy between the cash amount declared by Alhambra and the sum actually remitted. Alhambra admitted that petitioner Gonzales pressured him to issue the official receipt. Alhambra could not likewise present the post-dated check issued by respondent Gonzales for the reason that under the company rules and regulations, any post-dated check must be covered by a post-dated check receipt, duly signed by Mr. Andy Roxas, the Sales Office Manager. Petitioner issued a third

post-dated check which was signed by the petitioner himself and not by the Sales Office Manager who has the sole authority to issue the same. After investigation and hearing, petitioner was notified of his termination from employment on the ground of loss of confidence and of having violated the company rules and regulations. The Labor Arbiter ruled in favor of petitioner which was reversed by NLRC, hence this petition. Issue: WON dismissed. Ruling: Substantive due process, for validity of the petitioner's dismissal, has likewise been met by private respondent PCPPI. As aptly found by the NLRC, petitioner was separated or terminated by private respondent PCPPI from his employment due to loss of trust and confidence, which is a just and valid cause for dismissal under Article 282(c) of the Labor Code. We find the evidence adduced in this case contrary to petitioner's claim that the questionable credit sale transaction he was charged with was in connection with his being a dealer or concessionaire of PCPPI and not as an employee thereof, and thus, there was allegedly no just and valid cause to dismiss him. Ruling: Under the Labor Code, an employer can terminate the employment of the employee concerned for "fraud or willful breach by an employee of the trust reposed in him by his employer or duly authorized representative." The loss of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a petitioner was illegally

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position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employer's property and/or funds. But in order to constitute a just cause for dismissal, the act complained of must be "workrelated" such as would show the employee concerned to be unfit to continue working for the employer. In a decided case, it has been held that the test of managerial status has been defined as an authority to act in the interest of the employer, which authority is not merely routinary or clerical in nature but requires in dependent judgment. In the case at bench, petitioner is not an ordinary rank-and-file employee. He is a Route Manager, a managerial level position. As managerial employee, petitioner is tasked to perform key and sensitive functions, and thus he is bound by more exacting work ethics. Records show that maneuvers and machinations on the questionable credit sale transaction could not have been consummated by the petitioner if he was not equipped with the knowledge, as a route manager, of how the respondent company processes these kinds of transactions. It was highly inconceivable for a mere dealer to have done what petitioner did. First, petitioner gave himself a credit extension without proper authorization. Second, petitioner, as route manager prevailed upon salesman Alhambra, his subordinate, over whom he exercises moral and professional ascendancy to carry out his machination. Third, upon the discovery by the settlement clerk of the fraudulent official receipt, petitioner issued another postdated check together with a post-dated check receipt (PDCR) signed by petitioner himself although he was not authorized to do so. These acts of petitioner are patently dishonest and militate against the rules and regulations of his employer, herein private respondent company. Hence, the loss of trust and confidence in him by private respondent PCPPI. As a general rule, employers are allowed a wide latitude of discretion

in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employer's full trust and confidence. Proof beyond reasonable doubt is not required. It is sufficient that there is some basis for loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position. This must be distinguished from the case of ordinary rank-and-file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice. In the present case, PCPPI has sufficiently shown that petitioner has become unworthy of the trust and confidence demanded of his position. Petitioner betrayed his employer's trust and confidence when he instigated the issuance by his subordinate salesman of an official receipt for his post-dated check whereby petitioner could have evaded payment to private respondent PCPPI of his debt amounting to P116,182.00. These acts committed by petitioner adversely reflected on his integrity. As Route Manager he disregarded the private respondent company's rules and regulation prohibiting the issuance of official receipt for post-dated check payment unless the same is done by the Sales Office Manager. The fact the private respondent PCPPI ultimately suffered no monetary damage as petitioner subsequently settled his account is of no moment. This was not the reason for the termination of his employment in the respondent company but the anomalous scheme he engineered to cover up his past due account, which constitutes a clear betrayal of trust and confidence. Petition is dismissed.

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C. WORKING CONDITIONS AND WORK PERIODS a. Coverage (Art. 82) General Rule- Title I, Book III of the Labor Code dealing with hours of work, weekly rest periods, holidays, service incentive leaves and service charges, covers all employees in all establishments, whether for profit or not. Exceptions: 1. Government employees; 2. Managerial employees; 3. Officers and members of the managerial staff; 4. Field Personnel; 5. Members of the family of the employer who are dependent on him for support; 6. Domestic Helpers; 7. Persons on the Personal Service of Another; 8. Workers Paid by Result TYPE OF EMPLOYEE Government Employees, including those employed in GOCCs not incorporated under the Corporation Code Managerial Employees REASON WHY NOT COVERED Because terms and conditions of employment are governed by Civil Service Law and its IRR Because they are employed by reason of their special training, experience or knowledge. The value of their work cannot be measured in terms of hours. Because they are on their own in the field and the number of hours of actual work they render cannot be reasonably ascertained; it would be grossly unfair to require the employer to pay them benefits such as overtime compensation.

Members of the Family of the employer who are dependent upon him for support

Domestic Helpers and persons in the personal service of another

Workers who are paid By Results, such as those on piece rates or task basis

The amounts given by the employer by way of support may far exceed the benefits to which the employee is entitled under the provisions of the Title. Terms and conditions of employment are governed by the provisions of Chapter III, Title III, Book III, Labor Code. Their compensation is based on the work accomplished and not on the time they spend in accomplishing the work.

Non-Agricultural Field Personnel

The aforementioned employees are not entitled to: 1. overtime pay; 2. premium pay for rest days and holidays; 3. night shift differential pay; 4. holiday pay; 5. service incentive leave; 6. service charges Government Employees- refers only to employees of government agencies, instrumentalities or political subdivisions and of government corporations that are NOT incorporated under the Corporation Code (those that have original charters). Workers Paid on Piece-Rate Basis- 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. Workers Paid By Result- those who are paid based on the work completed and not on the time spent in working. Field Personnel- non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the

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employer and whose actual hours of work in the field cannot be determined with reasonable certainty. They work away from direct supervision of the employer. Domestic Helpers/ Persons Rendering Personal Services- those who: 1. perform services in the employers home which are usually necessary and desirable for the maintenance or enjoyment thereof; or 2. minister to the personal comfort, convenience, or safety of the employer, as well as the members of the employers household. b. Normal Hours (Art. 83) of Work

In case of exigencies, they may work for 6 days or for 48 hours, but they shall be entitled to an additional compensation of at least 30% of their regular wage for work th performed on the 6 day. It is possible for an employee to work for 2 calendar days (e.g. Marks work schedule is from 10pm of Monday up to 6am of Tuesday, his work day covers 2 calendar days). c. Hours Worked (Art. 84) Hours worked shall include: 1. all time during which an employee is required to be on duty or to be at a prescribed workplace; 2. all time during which an employee is suffered or permitted to work; and 3. rest periods of short durations during working hours. NOTE: Meal period of less than 20 minutes, becomes only a rest period and is thus considered as work time. i. Principles in Determining Hours Worked: 1. All hours are hours worked which the employee s required to give to his employer, regardless of whether or not such hour are spent in productive labor or involve physical or mental exertion. 2. An employee need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his workplace, to go elsewhere whether within or outside the premises of his workplace. 3. If the work performed was necessary or it benefited the employer or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked if the work is with the knowledge of his employer or immediate supervisor.

The normal hours of work of an


employee shall not exceed 8 hours a day. Health personnel in government service are excluded from the coverage of Arts. 82- 96, Labor Code. Their work hours, NSD, and other employment benefits are specified in RA 7305. i.Purposes of the provisions governing hours of work: 1. to safeguard the health and welfare of the laborer; and 2. to minimize unemployment by utilizing different shifts. NOTES: It is not prohibited to have normal hours of work of less than 8 hours a day. What the law regulates is work hours exceeding 8 hours a day. 8-hour labor law prescribes the maximum but not the minimum. Therefore, part-time work, or a days work of less than 8 hours is not prohibited. ii. Normal Hours of Work of Health Personnel: For health personnel in cities and municipalities with a population of at least 1M or in hospitals and clinics with a bed capacity of at least 100: Regular office hours shall be 8 hours a day for 5 days a week, or 40 hours a week, exclusive of time for meals.

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4. The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered time worked either if the imminence of the resumption of work requires the employees presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employees own interest. ii. Rules on Hours of Work a. Waiting Time Considered as hours worked if waiting: 1. is an integral part of his work; or 2. the employee is required or engaged by the employer to wait. 3. when employee is required to remain on call in the employers premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose. b. Working while on Call When employee is required to remain on call in the employers premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose. However, if he is not required to leave work at his home or with company officials where he may be reached, he is not considered working while on call. ENGAGED TO WAIT When waiting is an integral part of the job, the time spent waiting is compensable. Example: Mark works as a driver and his task is to drive a truck to Ilocos to load gravel and sand. While gravel is being loaded, he engaged himself in a mahjong session and then slept. Is the time spent playing and sleeping WAITING TO BE ENGAGED Idle time is not working time; it is not compensable. Example: Spencer works as a Florida Transit bus driver. His route is from Pagudpud to Manila, leaving at 6am and arriving at 6pm. He is completely relieved from all duty until 8pm, when he again goes on duty for the return trip to Pagudpud. Is his idle

compensable? Answer: Yes, because he is engaged to wait for waiting is an integral part of the job.

time working time? Answer: No, because during his idle time, he is specifically relieved from all duty. He is merely waiting to be engaged.

iii. Preliminary and Postliminary Activities Compensable when: 1. controlled or required by employer; 2. are pursued necessarily and primarily for the employers benefit Preliminary- before work (e.g. preparation for business presentations) Postliminary- after actual work (e.g. overtime) iv. Travel Time Travel from Home to Work Normal travel from home to work which is not work time Travel that is All in Days Work The time spent by an employee in travel as part of his principal activity, like travel from jobsite to jobsite during the workday. General Compensabl Rulenot e and must compensabl be counted e as hours Exceptionworked. where the worker is made to work on an emergency call and travel is necessary in proceeding to the workplace, Travel Away from Home Travel that keeps an employee away from home overnight.

Considered as work time when it cuts across an employees workday (because it substitutes for the hours that the employee should have been in the office.

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the time spent on travel is compensabl e. NOTE: In travel from home to work, if same is via shuttle service sponsored by the company, travel time is not compensable because service is for the benefit of the employee. In travel away from home, if instruction was given by the employer to the employee to go to a warehouse and to go back to the main office afterwards, the time traveled is considered as hours worked; however, if instead of going back to the office, the employee went home, only the travel to the warehouse is considered as hours worked. v. Power Interruptions a. First 20 minutes is compensable; b. Succeeding minutes not compensable, but is despite the lapse of the first 20 minutes the employees are required to stay in their workplaces, such time is compensable. vi. Semestral Break of Teachers Compensable hours worked for it is a form of interruption beyond their control. Only for regular full-time teachers. (University of Pangasinan Faculty Union vs. University of Pangasinan; February 20, 1984) vii. Lectures, Trainings, Programs Meetings,

Presence on board for more than 8 hours a day is required by the nature of their service. Conditions to be satisfied before a seaman be entitled to overtime pay; 1. Actual rendition of overtime work. 2. Submission of sufficient proof that said work was actually performed. c. Meal Periods (Art. 85) 1. Meal periods should not be less than 60 minutes, and is timeoff/non-compensable. 2. Under specified cases, may be less than 60 minutes but should not be less than 20 minutes and must be with full pay. 3. If less than 20 minutes, it becomes only a rest period and is thus considered as work time. NOTE: The employee must be completely relieved from duty. Otherwise, it is compensable as hours worked. Mealtime is not compensable, EXCEPT: 1. where the lunch period or meal time is predominantly spent for the employers benefit; or 2. where it is less than 60 minutes. i. Shortened Meal Break Upon Employees Request Employees may request that their meal period be shortened so that they can leave work earlier than the previously established schedule. Requisites: 1. employees voluntarily agree in writing to a shortened meal period and are willing to waive the overtime pay for such shortened meal; 2. there will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectivity of the shortened meal period; 3. the work of the employees does not involve strenuous physical exertion and they are provided with adequate coffee breaks; 4. the value of benefits is equal to the compensation due them for the shortened meal period;

Not counted as working time if all the following conditions are met: 1. attendance is outside of the employees regular working hours; 2. attendance is in fact voluntary; and 3. employee does not perform any productive work during such attendance. viii. Work Hours of Seamen

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5. overtime pay will become due and demandable if ever they are permitted or made to work beyond 4:30pm. 6. the arrangement is of temporary duration. d. Night Shift (Art. 86) Differential

b. On a rest day/special day/ a regular holiday- Plus 10% of the overtime hourly rate on a rest day/special day/ regular holiday. iii. Illustration Daily Wage: P1000 Work Schedule: 6pm to 2am Night Shift Hours: 4 hours Step 1: Get Hourly Wage Rate (HWR) by dividing the Daily Wage Rate (DWR) to number of Working Hours (WH) HWR= DWR WH P1000 8 hrs. = P125 HWR Step 2: Get the 10% of HWR P125 HWR x .10= P12. 50 Step 3: Compute NSD by multiplying the 10% of HWR to no. of Hours Performed between 10pm to 6am (night shift hours; NSH) NSD= 10% of HWR x NSH P125 HWR x .10 = P12.50 x 4 hrs = P 50 NSD Step 4: To get the Total Wage Earned for the Day: Get the Wage Earned for the Day (WED) by multiplying HWR to number of WH and then add it to the NSD WED= [HWR x WH] + NSD P125 x 8 hrs. = P1000 + P 50 NSD = P 1050 Total Wage Earned for the day e. Overtime Work (Art. 87)

i. Concept Additional compensation of not less than 10% of an employees regular wage for every hour of work done between 10pm and 6am, whether or not such period is part of the workers regular shift. If work done between 10pm and 6am is overtime work, then the 10% night shift differential should be based on the overtime rate. Not WaivableAdditional compensation for nighttime work is founded on public policy. (Mercury Drug vs. Dayao, GR No. L-30452, September 30, 1982) ii. Computation of Night Shift Pay 1. Where night shift (10pm to 6am) work is Regular Work: a. On an ordinary day- Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate. b. On a rest day, special day or regular holiday- Plus 10% of the regular hourly rate on a rest day, special day or regular holiday or a total of 110% of the regular hourly rate. NOTE: Since special days and regular holidays are calendar day (24 hour period from 12 midnight to 12 midnight of the following day), the night shift is either cutoff or starts only at 12 midnight. Hence, the night shift pay for such days may be determined by the hour on the basis of the hourly rate not the daily rate. 2. Where night shift (10pm to 6am) work is Overtime Work: a. On an ordinary day- Plus 10% of the overtime hourly rate on an ordinary day or a total of 110% of the overtime hourly rate on an ordinary day.

Overtime

Payadditional compensation for work performed beyond 8 hours within the workers 24hors workday regardless of whether the work covers 2 calendar days. The employee is paid for the overtime work on additional compensation equivalent to his regular wage plus at leas 25% thereof. Overtime work performed on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first 8 hours on a holiday or rest day plus at least 30% thereof.

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Premium

Payis additional compensation for work rendered by the employee on days when normally he should not be working such as special holidays and weekly rest day. Work Day- the 24-hour period which commences from the time the employee regularly starts to work (e.g. if the worker starts to work 8am today, the workday is from 8am today to 8am tomorrow). The minimum normal working hours fixed by law need not be continuous to constitute the legal working day, so long as it is within the work day. Rationale- The employee is given OT pay because he is made to work longer than what is commensurate with his agreed compensation for the staturorily fixed of voluntarily agreed hours of labor he is supposed to do. Waiver of Overtime Pay- As a rule, no waiver of overtime pay whether express or implied. Any contrary stipulation is null and void, as it is intended to benefit laborers and employees. Exceptions: 1. When the waiver is med in consideration of benefits and privileges which may be more that what will accrue to them in overtime pay (Meralco Workers Union vs. Meralco; GR No. L- 11876, May 29, 1959). 2. Compressed workweek proposed by employees. This is allowed only under the following conditions: a. It is voluntary on the part of the worker; b. There will be no diminution of the weekly or monthly take-home pay and fringe benefits of the employee. c. The value of the benefits that will accrue to the employees under the proposed schedule is more than or at least commensurate with the one-hour OT pay that is due them during weekdays based on the employees quantification; d. The work does not involve strenuous physical exertion and

employee must have adequate rest periods; and e. The arrangement is of temporary duration. i. Factual & Legal Basis for Claim

As a rule, express instruction from


the employer to the employee to render overtime work is not required for the employee to be entitled to overtime pay. It is sufficient that the employee is permitted or suffered to work. NOTE: Meal periods during overtime work is not given to workers performing overtime for the reason that OT work is usually for a short period ranging from 1 to 3 hours and to deduct from the same 1 full hour as meal period would reduce to nothing the employees OT work. Basis of Overtime- Regular Basic Wage includes cash wage only, without any deduction on account of facilities provided by the employer. ii. Rules: Work performed beyond 8 hours a day must be paid an additional compensation equivalent to the employees regular wage plus at least 25% thereof. Work performed beyond 8 hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate for the first 8 hours on a holiday or rest day plus 30% thereof. iii. Illustration: Daily Wage: P1000 Work Schedule: 9am to 6pm (inclusive of 1 hour meal period) OT: 6pm to 1am Step 1: Get HWR P1000/ 8 hrs. = P125 Step 2: Get Over Time Premium Pay (OTP) by adding the 25% of HWR to HWR and multiply it to number of Over Time Hours (OTH) OTP= [25% of HWR + HWR] x OTH P125 x .25 = P 31. 25 (25% of HWR) + P125 (HWR) = P 156. 25 x 7 hours (OTH)

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= P 1093. 75 (OTP) Step 3: Compute Total wage earned for the day by adding the OTP to Daily Wage P 1093. 75 OTP + P 1000 daily wage = P 2093. 75 Total wage earned for the day Article 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. Article 89. Emergency Overtime WorkAny employee may be required by the employer to perform overtime work in any of the following cases: 1. when the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; 2. when it is necessary to prevent loss of life or property or in case of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; 3. when there is urgent work to be performed on machines, installation, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; 4. when the work is necessary to prevent loss or damage in perishable good; and 5. where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. f. Week Rest Period (Art.91) i. Right to a Weekly Rest Day

Concept of Rest Day- Employee


should be provided a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days. Weekly rest period is within the purview of employers prerogative. The employer shall schedule the weekly rest day of is employees subject to CBA. However, the employer shall respect preference of employees as to their weekly rest day when such preference is based on religious grounds. But when such preference will prejudice the operations of the undertaking and the employer cannot normally result to order remedial measures, the employer may so schedule the weekly rest day that meets the employees choice for at least 2 days a month. ii. When Employer may Require Work on a Rest Day (Art. 92)

General Rule- It shall be the duty


of every employer, whether operating for profits or not to provide a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days to his employees. Exception: The employer may require his employees to work on any day even on a rest day: 1. In cases of urgent work to be performed on the machinery, equipment or installation, to avoid serious loss which the employer would otherwise suffer; 2. To prevent loss or damage to perishable goods; 3. 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; 4. 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

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5. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; 6. Under other circumstances analogous to the foregoing as determined by the Secretary of Labor. iii. Compensation for Rest Day, Sunday or Holiday Work (Art. 93) This Article does not prohibit a stipulation in the CBA for higher benefits List of Special Holidays: 1. November 1- All Saints Day 2. December 31- Last Day of the Year 3. All other days declared by law 4. Local Holiday (that which declared by law or Ordinance as holiday of a particular LGU. This is for that specific LGU only, e.g. Quezon City Day) b. List of Regular Holidays: 1. January 1- New Years Day 2. Maundy Thursday (movable date) 3. Good Friday (movable date) 4. April 9Araw ng Kagitingan 5. May 1- Labor Day 6. June 12- Independence Day 7. National Heroes Day (Last Sunday of August) 8. November 30Bonifacio Day 9. December 25Christmas Day 10. December 30- Rizal Day 11. Eidl Fitr (movable date) under RA 9177, November 13, 2002. NOTE: There must be no distinction between Muslims and Non-Muslims as regards payment of benefits for Muslim Holidays; wages and other emoluments are laid down by law and not based on faith or religion.

REGULAR HOLIDAY Compensable even if unworked subject to certain conditions. Limited to the 10 enumerated by the Labor Code. Rate is twice the regular rate if worked. Pay

SPECIAL HOLIDAY Not compensable if unworked. Not exclusive since a law of ordinance may provide for other special holidays. Rate is 130% of the regular wage if worked.

a.

iii. When Entitled to Premium

If worked- regular wage plus 30%


premium pay If not worked- no compensation/ no premium iv. Additional Compensation for Work on a Rest Day, Sunday or Holiday: DAY Work on a scheduled rest day No regular workdays and rest days Work on Special Holidays Holiday Work falls on Scheduled Rest Day RATE OF ADDITIONAL COMPENSATION 30% of regular wage 30% of regular wage for work on Sundays and Holidays 30% of regular wage 50% of regular wage

g. Right to Holiday Pay (Art. 94)

Holiday Pay (legal holiday)- A


days pay given by law to an employee even if he does not work on a regular holiday. It is limited to the 11 regular holiday listed by law. The employee should not have been absent without

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pay on the working day preceding the regular holiday. Premium PayAdditional compensation for work performed on a scheduled rest day or holiday. i. Rule on Compensability Compensable whether worked or unworked subject to certain conditions. Legal holiday falling on a Sunday does not create an additional workday nor create a legal obligation for the employer to pay extra aside from the usual holiday pay to its monthly paid employees. ii. Double Holiday Pay 1. 200% of the basic wage- entitled even if said holiday is unworked. To give employee only 100% would reduce the number of holidays under DO No. 3. 2. 300% if he worked on 2 regular holidays falling on the same day (e.g. April 9 and Maundy Thursday) ILLUSTRATION: a. Single Holiday Rule- provided that the employee: 1. worked; 2. was on leave with pay; or 3. was on authorized absence on the day prior to the regular holiday. Successive Regular Holiday- If there are two successive regular holidays (e.g. Maundy Thursday and Good Friday), the employee must be present the day before the scheduled regular holiday to be entitled to compensation to both; otherwise, he must work on the first holiday to be entitled to holiday pay on the second regular holiday. Wed. Present Absent with pay Absent without pay Present Thurs. REST DAY REST DAY SPECIAL DAY SPECIAL DAY Fri. REGULA R HOLIDAY REGULA R HOLIDAY REGULA R HOLIDAY Entitled to be Paid? Yes Yes No Yes

Absent with Pay Absent without Pay

SPECIAL DAY SPECIAL DAY

Yes No

b. Successive Holiday Rule Wed. Maunda Good Entitled y Thurs. Friday to be Paid? Present REGULA REGULA YesR R Both HOLIDAY HOLIDAY Absent REGULA REGULA Yeswith pay R R Both HOLIDAY HOLIDAY Absent REGULA REGULA No- Both without R R pay HOLIDAY HOLIDAY Absent WORKED Yes- but without only to pay the holiday pay on Friday h. Right to Service Incentive Leave (Art. 95)

Concept

of Service Incentive Leave (SIL)- 5 days leave with pay for every employee who has rendered at least 1 year of service. SIL does not apply to those who are: 1. already enjoying the said benefits; 2. already enjoying vacation leave with pay for at least 5 days; 3. employed in establishments regularly employing less than 10 employees; and 4. employed in establishments exempted by the Secretary of Labor. 1 Year of Service- service within 12 months, whether continuous or broken, reckoned from the date the employee started working including authorized absences and paid regular holidays unless the number of working days in the establishment, as a matter of practice or policy or a provided in the employment contract, is less than 12 months.

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SIL is commutable, i.e. convertible


to cash the cash equivalent is aimed primarily at encouraging workers to work continuously and with dedication to the company. Part-time workers are entitled to the full benefit of the yearly 5-days SIL. The reason is that the provisions of Article 95, Labor Code speak of the number of months in a year for entitlement to said benefit. i. Vacation and Sick Leave Not statutorily required; matter of management discretion or a product of CBA. Benefits are non-cumulative and non-commutative; must be enjoyed by the employee within 1 year otherwise they are considered waived or forfeited. Exception is when the labor contract or the established practice of the employer provides otherwise. No employer shall discriminate against any solo parent employee with respect to terms and conditions of employment on account of his/her status. In addition to leave privileges under existing laws, parental leave of not more than 7 working days every year shall be granted to any solo parent employee who has rendered service of at least 1 year. i. Service Charges (Art. 96)

The 15% management share shall be for disposition by management to answer for losses and breakages and distribution to employees receiving more than P2,000.00 a month at the discretion of the management in the latter case. In case the service charge is abolished, the share of the covered employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average share of each employee for the past 12 months immediately preceding the abolition or withdrawal of such charge. Coverage- Apply only to hotels, restaurants and similar establishment collecting service charges. Pooled Tips- Monitored, accounted for, and distributed in the same manner as service charges. CASES: ACE NAVIGATION CO. vs. CA and ORLANDO ALONSAGAY G.R. No. 140364. August 15, 2000 PUNO Facts: Ace Navigation Co. recruited private respondent Orlando Alonsagay to work as a bartender on board the vessel M/V "Orient Express" owned by its principal, Conning Shipping Ltd. (Conning). Under their POEA approved contract of employment, Orlando shall receive a monthly basic salary of U.S. $450.00, flat rate, including overtime pay for 12 hours of work daily plus tips of S. $2.00 per passenger per day. He was also entitled to 2.5 days of vacation leave with pay each month. The contract was to last for one (1) year. Petitioners alleged that Orlando was deployed and boarded M/V "Orient Express" at the seaport of Hong Kong. After the expiration of the contract on June 13, 1995, Orlando returned to the Philippines and demanded from Ace Nav, his vacation leave pay. Ace Nav. did not pay him immediately. It told him that he should have been paid prior to his disembarkation and repatriation to the

Concept-

All service charges collected by hotels, restaurants, and similar establishment shall be distributed: 1. 85% for all covered employees to be equally distributed among them. 2. 15% for management. Share of the employees shall be equally distributed among them. The shares referred to herein shall be distributed and paid to employees not less than once every 2 weeks or twice a month at intervals not exceeding 16 days.

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Philippines. Moreover, Conning did not remit any amount for his vacation leave pay. Ace Nav, however, promised to verify the matter and asked Orlando to return after a few days. Orlando never returned. Orlando filed a complaint before the labor arbiter for vacation leave pay and unpaid tips. Labor Arbiter ordered Ace Nav and Conning to pay jointly and severally Orlando his vacation leave pay. The claim for tips of Orlando was dismissed for lack of merit. NLRC ordered petitioner and Conning to pay Orlando his unpaid tips. CA denied the petition for certiorari, hence, this petition. Issue: WON petitioners are liable to pay the tips to Orlando. Ruling: The word tip has several meanings, with origins more or less obscure, connected with "tap" and with "top." in the sense of a sum of money given for good service. It is more frequently used to indicate additional compensation, and in this sense "tip" is defined as meaning a gratuity; a gift; a present; a fee; money given, as to a servant to secure better or more prompt service. A tip may range from pure gift out of benevolence or friendship, to a compensation for a service measured by its supposed value but not fixed by an agreement, although usually the word is applied to what is paid to a servant in addition to the regular compensation for his service in order to secure better service or in recognition of it. Tipping is done to get the attention and secure the immediate services of a waiter, porter or others for their services. Since a tip is considered a pure gift out of benevolence or friendship, it can not be demanded from the customer. Whether or not tips will be given is dependent on the will and generosity of the giver. Although a customer may give a tip as a consideration for services rendered, its value still depends on the giver. They are given in addition to the compensation by the employer. A gratuity given by an employer in order to inspire the employee to

exert more effort in his work is more appropriately called a bonus. In the case at bench, NLRC and CA held that petitioners were liable to pay tips to Orlando because of the contract of employment. However, the contract of employment between petitioners and Orlando is categorical that the monthly salary of Orlando is US$450.00 flat rate. This already included his overtime pay which is integrated in his 12 hours of work. The words "plus tips of US$2.00 per passenger per day" were written at the line for overtime. Since payment for overtime was included in the monthly salary of Orlando, the supposed tips mentioned in the contract should be deemed included thereat. The actuations of Orlando during his employment also show that he was aware his monthly salary is only US$450.00, no more no less. He did not raise any complaint about the non-payment of his tips during the entire duration of his employment. After the expiration of his contract, he demanded payment only of his vacation leave pay. He did not immediately seek the payment of tips. He only asked for the payment of tips when he filed this case before the labor arbiter. This shows that the alleged non-payment of tips was a mere afterthought to bloat up his claim. The records of the case do not show that Orlando was deprived of any monthly salary. It will now be unjust to impose a burden on the employer who performed the contract in good faith. Furthermore, it is presumed that the parties were aware of the plain, ordinary and common meaning of the word "tip." It is also absurd that petitioners intended to give Orlando a salary higher than that of the ship captain. However, Orlando should be paid his vacation leave pay. Petitioners denied this liability by raising the defense that the usual practice is that vacation leave pay is given before repatriation. But petitioners did not present any evidence to prove that they already paid the amount. The burden of proving payment was not discharged by the petitioners. CA is reversed.

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PHILIPPINE NATIONAL CONSTRUCTION CORPORATION vs. NLRC and ROLANDO S. ANGELES G.R. No. 128345 May 18, 1999 PUNO Facts: Private respondents Rolando S. Angeles and Ricardo P. Pablo, Jr. were employed by petitioner corporation as tollway guards. Their services, however, were terminated on the ground of serious misconduct. Rosario C. Maravilla complained to the Tollway General Manager, Mr. Ibarra G. Paulino, about the "mulcting activities" of some security personnel. Acting on the complaint, Mr. Paulino formed an investigating team which staged an entrapment. They marked one P500.00 bill and two P100.00 bills and handed to Maravilla with instruction to give it to whoever demands money from her. Thus, the team, together with Maravilla, boarded the latter's passenger jeepney driven by Eustaquio Paa. The Jeepney was then carrying a cargo of dogs. The jeepney was stopped by Angeles who was on duty at that time. He allegedly suspected them of illegally transporting dogs. Angeles approached the driver, asked for his driver's license and told him to park at the shoulder of the road. The members of the investigating team saw private respondents accept cash and a sack containing a dog from Maravilla, after which they allowed the jeepney to leave. Mr. Ibarra issued a Notice of Dismissal to private respondents requiring them to answer the charge of serious misconduct. After conducting a formal investigation, the investigating officer recommended the dismissal of private respondents which was adopted by Mr. Ibarra issued and issued a Notice of Termination to private respondents informing them that their employment shall cease. The Labor Arbiter ruled that private respondents' dismissal was illegal. He held that petitioner failed to prove by clear and convincing evidence that private respondents committed serious misconduct. However, instead of ordering their reinstatement, the Labor Arbiter ordered the payment of separation pay because of strained relations. He also ordered petitioner to pay private

respondents their backwages and midyear bonus, which was modified by NLRC. Issue: WON pay private respondents are entitled to mid-year bonus notwithstanding the fact that private respondents committed grave and serious misconduct. Ruling: Private respondents are not entitled to the mid-year bonus they are claiming. A bonus is a gift from the employer and the grant thereof is a management prerogative. Petitioner may not be compelled to award a bonus to private respondents whom it found guilty of serious misconduct. In a decided case, it has been held that a bonus is a gratuity or an act of liberality of the giver which the recipient has no right to demand as a matter of right. It is something given in addition to what is ordinarily received by or strictly due the recipient. The granting of a bonus is basically, a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee's basic salaries or wages. A bonus, however, is a demandable or enforceable obligation when it is made part of the wage or salary or compensation of the employee. Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. If it is additional compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are realized or if a certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to all but only to some employees and only when their labor becomes more efficient or more productive, it is only an inducement for efficiency, a prize therefor, not a part of the wage.

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In the case at bench, private respondents in this case neither alleged nor adduced evidence to show that the bonus they are claiming is a regular benefit which has become part of their compensation. Thus, the presumption is that it is not a demandable obligation from the employer and the latter may not be compelled to grant the same to underserving employees. Petition is granted. PRODUCERS BANK OF THE PHILIPPINES vs. NLRC and PRODUCERS BANK EMPLOYEES ASSOCIATION G.R. No. 100701 March 28, 2001 GONZAGA-REYES Facts: Producers Bank of the Philippines, a banking institution, has been providing several benefits to its employees since 1971 when it started its operation. Among the benefits it had been regularly giving is a mid-year bonus equivalent to an employee's one-month basic pay and a Christmas bonus equivalent to an employee's one whole month salary (basic pay plus allowance). When the law granting a 13th month pay, took effect, the basic pay previously being given as part of the Christmas bonus was applied as compliance to the 13th Month Law, the allowances remained as Christmas bonus From 1981 up to 1983, the bank continued giving one month basic pay as mid-year bonus, one month basic pay as 13th month pay but the Christmas bonus was no longer based on the allowance but on the basic pay of the employees which is higher. In the early part of 1984, the bank was placed under conservatorship but it still provided the traditional mid-year bonus. By virtue of an alleged Monetary Board Resolution No. 1566, bank only gave a one-half (1/2) month basic pay as compliance of the 13th month pay and none for the Christmas bonus. Private respondent Producers Bank Employees Association with NLRC charging petitioner Bank with diminution of benefits, non-compliance with Wage Order

No. 6 and non-payment of holiday pay. In addition, private respondent prayed for damages. Labor Arbiter Nieves V. de Castro found private respondent's claims to be unmeritorious and dismissed its complaint. NLRC granted all of private respondent's claims, except for damages. The issues are discussed in seriatim. Bonuses Ruling: A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer's business and made possible the realization of profits. It is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. However, an employer cannot be forced to distribute bonuses which it can no longer afford to pay. To hold otherwise would be to penalize the employer for his past generosity. In the case at bench, it was established by the labor arbiter and NLRC and admitted by both parties that petitioner was placed under conservatorship by the Monetary Board. Petitioner was not only experiencing a decline in its profits, but was reeling from tremendous losses triggered by a bank-run which began in 1983. In such a depressed financial condition, petitioner cannot be legally compelled to continue paying the same amount of bonuses to its employees. Thus, the conservator was justified in reducing the mid-year and Christmas bonuses of petitioner's employees. To hold otherwise would be to defeat the reason for the

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conservatorship which is to preserve the assets and restore the viability of the financially precarious bank. Ultimately, it is to the employees' advantage that the conservatorship achieve its purposes for the alternative would be petitioner's closure whereby employees would lose not only their benefits, but their jobs as well. 13th Month Pay Ruling: PD 851, which was issued by President Marcos on 16 December 1975, requires all employers to pay their employees receiving a basic salary of not more than P 1,000 a month, regardless of the nature of the employment, a 13th month pay, not later than December 24 of every year. However, employers already paying their employees a 13th month pay or its equivalent are not covered by the law. Under the Revised Guidelines on the Implementation of the 13th Month Pay Law, the term "equivalent" shall be construed to include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary. The intention of the law was to grant some relief - not to all workers - but only to those not actually paid a 13th month salary or what amounts to it, by whatever name called. It was not envisioned that a double burden would be imposed on the employer already paying his employees a 13th month pay or its equivalent whether out of pure generosity or on the basis of a binding agreement. To impose upon an employer already giving his employees the equivalent of a 13th month pay would be to penalize him for his liberality and in all probability, the employer would react by withdrawing the bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same benefits, his prior concessions might not be given due credit. In the case at bench, even assuming the truth of private respondent's claims regarding the payments received by its

members in the form of 13th month pay, mid-year bonus and Christmas bonus, it is noted that, for each and every year involved, the total amount given by petitioner would still exceed, or at least be equal to, one month basic salary and thus, may be considered as an "equivalent" of the 13th month pay mandated by PD 851. Thus, petitioner is justified in crediting the mid-year bonus and Christmas bonus as part of the 13th month pay. Holiday Pay Article 94 of the Labor Code provides that every worker shall be paid his regular daily wage during regular holiday and that 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. In this case, the Labor Arbiter found that the divisor used by petitioner in arriving at the employees' daily rate for the purpose of computing salary-related benefits is 314. This finding was not disputed by the NLRC. However, the divisor was reduced to 303 by virtue of an inter-office memorandum issued on 13 August 1986. Private respondent admits that, prior to 18 August 1986, petitioner used a divisor of 314 in arriving at the daily wage rate of monthly-salaried employees. Private respondent also concedes that the divisor was changed to 303 for purposes of computing overtime pay only. Apparently, the divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year, since Saturdays are considered paid rest days, as stated in the inter-office memorandum. Thus, the use of 314 as a divisor leads to the inevitable conclusion that the ten legal holidays are already included therein. The reduction of the divisor to 303 was done for the sole purpose of increasing the employees' overtime pay, and was not meant to exclude holiday pay from the monthly salary of petitioner's employees. In fact, it was expressly stated in the inter-office memorandum- that the divisor of 314 will still be used in the computation for cash conversion and in the determination of the daily rate. Thus, based on the records of

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this case and the parties' own admissions, SC holds that petitioner has complied with the requirements of Article 94 of the Labor Code. NLRC is set aside.

NLRC maintained the award of SIL which was affirmed by CA, hence, this petition. Issue: WON private respondent is entitled to service incentive leave; Ruling:

AUTO BUS TRANSPORT SYSTEMS vs. ANTONIO BAUTISTA G.R. No. 156367 May 16, 2005 CHICO-NAZARIO Facts: Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc. (Autobus), as driver-conductor. Respondent was paid on commission basis, 7% of the total gross income per travel, on a twice a month basis. While respondent was driving Autobus No. 114, the bus he was driving accidentally bumped the rear portion of Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving any warning. Respondent averred that the accident happened because he was compelled by the management to go back to Roxas, Isabela, although he had not slept for almost 24 hours, as he had just arrived in Manila from Roxas, Isabela. Respondent further alleged that he was not allowed to work until he fully paid the amount representing 30% of the cost of repair of the damaged buses and that despite respondents pleas for reconsideration, the same was ignored by management. After a month, management sent him a letter of termination. Respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay against Autobus. Petitioner, on the other hand, maintained that respondents employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty. To support its claim, petitioner presented copies of letters, memos, irregularity reports, and warrants of arrest pertaining to several incidents wherein respondent was involved. The Labor Arbiter dismissed the complaint, however, petitioner was ordered to pay private respondent his 13th month pay and SIL.

Under the law, 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. This rule shall apply to all employees except: (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 in a fixed amount for performing work irrespective of the time consumed in the performance thereof . A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the IRR of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the IRR, Service Incentive Leave shall not apply to employees classified as "field personnel." The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate classification of employees to which SIL shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certainty." The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission basis." Said phrase should be related with "field personnel," applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. Hence, employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the

75

grant of service incentive leave, unless, they fall under the classification of field personnel. It is necessary to stress that 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. Thus, in order to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employees time and performance are constantly supervised by the employer. In the case at bench, as observed by the Labor Arbiter, in each and every depot, there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. The driver was therefore under constant supervision while in the performance of this work. He cannot be considered a field personnel. Respondent is a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioners business. Accordingly, respondent is entitled to the grant of service incentive leave. Petition is denied. C. PLANAS COMMERCIAL vs. NLRC and ALFREDO OFIALDA G.R. No. 144619 November 11, 2005 AUSTRIAMARTINEZ Facts: Private respondents Ofialda, Morente and Allauigan et.al filed a complaint for underpayment of wages, nonpayment of employees other benefits petitioners C. Planas Commercial and Marcial Cohu. Private respondents alleged that petitioner Marcial Cohu, owner of C. Planas Commercial, is engaged in wholesale of plastic products and fruits of different

kinds with more than 24 employees; that private respondents were hired by petitioners as helpers/laborers; that they were paid below the minimum wage law for the past 3 years; that they were required to work for more than 8 hours a day without overtime pay; that they never enjoyed holiday pay and did not have a rest day as they worked for 7 days a week; and they were not paid SIL pay although they had been working for more than one year. Private respondent Ofialda asked for NSD as he had worked from 8 p.m. to 8 a.m. the following day for more than one year. Petitioners admitted that private respondents were their helpers. Petitioners averred that private respondents were not entitled to holiday and SIL pays for they were employed in a retail and service establishment regularly employing less than ten workers. The Labor Arbiter dismissed the money claims. Private respondents filed their appeal with the NLRC. However, pending the appeal, private respondents Morente and Allauigan filed their respective motions to dismiss with release and quitclaim before the NLRC. NLRC ordered petitioners to pay private respondents an amount representing their combined salary differentials, holiday pay, and SIL pay, which was affirmed in toto by CA. Issue: WON petitioner is exempted from paying the minimum wage and the SIL pay. Ruling: R.A. No. 6727 known as the Wage Rationalization Act provides for the statutory minimum wage rate of all workers and employees in the private sector. Section 4 of the Act provides for exemption from the coverage and for a retail/service establishment to be exempted from the coverage of the minimum wage law, it must be shown that the establishment is regularly employing not more than 10 workers and had applied for exemptions with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations issued by the Commission. Likewise

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the Labor Code and its IRR provide for the exclusive list of who are exempted from the payment of SIL pay, one of the exempted is an establishment employing less than 10 employees. Therefore, it was incumbent upon the employerestablishment to prove that it belonged to a class excepted by law from the general rule. Specifically, it was the duty of the employer to prove that there were less than 10 employees in the company. In the case at bench, petitioners had not shown any evidence to show that they had applied for such exemption and if they had applied, the same was granted. CA is modified. D. WAGES a. Definition of Terms:

6. Wage- paid to any employee shall

1. Person-

means an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons. 2. 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. 3. Employee- includes any individual employed by an employer. 4. Agriculture- includes farming in all its branches and, among other things, includes cultivation and tillage of soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products. 5. Employ- includes to suffer or permit to work.

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. 7. Fair and reasonable value- shall not include any profit to the employer, or to any person affiliated with the employer. 8. Fair Days Wage for a Fair Days Labor- If there is no work performed by the employee, there can be not wage or pay unless the laborer was able, willing, and ready to work but was prevented by management or was illegally locked out, suspended or dismissed. 9. Equal Pay for Equal WorkPersons who work with substantially equal qualifications, skills, effort and responsibilities under similar conditions, should be paid similar salaries. If an employer accords employees same position and rank, the presumption is that these employees perform equal work. NOTE: Wage is compensation for manual labor; while Salary corresponds to higher degree of employment. What does wage or salary include? 1. commission; 2. facilities; 3. commodities/ supplements They are deemed included in the term SALARY if the following conditions concur: a. that the grant thereof is unconditional;

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b. consistent and deliberate over a period of time; c. customarily given such that the employee expects to receive the same. Commission- direct remunerations received by an agent, salesman, executor, broker, or trustee calculated as a percentage on the amount of his transactions or on the profit to the principal. Facilities- shall include all articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employers business. i. Legal Requirements before Facilities can be Deducted from the Employees Wages: 1. Proof must be shown that such facilities are customarily furnished by the trade; 2. The provision of deductible facilities must be voluntarily accepted in writing by the employee; and 3. The facilities must be charged at fair and reasonable value. Gratuity- something given freely or without recompense to reward employees who have rendered satisfactory and efficient service to the company. Facilities Items of expense necessary for the laborers and his familys existence and subsistence. Supplements Constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings wages. Part of the wage Independent of the wage Deductible from the Not wage deductible wage ii. Application of Provisions on Wages

The provisions on wages do not apply to the following: 1. farm tenancy or leasehold; 2. household or domestic helpers; 3. homeworkers engaged in needle work; 4. workers employed in any establishment duly registered with the National Cottage Industry Development Authority; 5. workers in duly registered cooperatives. b. Regional Minimum Wages (Art. 99) 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. Minimum Wage- lowest wage rate fixed by that an employer can pay his employees. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company; the payment of minimum wage is not dependent on the employers ability to pay (De Racho vs. Municipality of Iligan, GR No. L23542). The acceptance by an employee of the wages paid him without objection does not give rise to estoppel precluding him from suing for the difference between the amount received and the amount he should have received pursuant to a valid minimum wage law where it does not appear that the employer changed his position to his own prejudice. c. Prohibition against Elimination or Diminution of Benefits (Art. 100)

Non-Diminution Rule- Nothing in


the Labor Code shall be construed to eliminate or in any way diminish supplements, or other employee

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benefits being enjoyed at the time of promulgation of this Code. Benefits being given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten. The rule is applicable if it is shown that the grant of the benefit is: 1. based on an express policy, or 2. has ripened into practice over a long period of time and the practice is consistent and deliberate, and it is not due to an error in the construction/ application of a doubtful or difficult question of law. But even in cases of error, it should be shown that the correction is being done soon after the discovery of the error. BonusA supplement or employment benefit given under certain conditions, such as success of the business or greater production or output. As a rule, it is an amount granted voluntarily to an employee for his industry and loyalty which contributed to the success and realization of profits of the employers business. Therefore, from a legal point of view, it is not demandable and enforceable obligation unless it was promised to be given without any conditions imposed for its payment in which case it is deemed part of the wage. An 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 of his resignation or termination from service. th 13 Month Pay or its Equivalent Additional income based on wage required by PD 851 which is equivalent to 1/12 of the total basic salary earned by an employee within a calendar year. It may be given anytime but not later than December 24. a. Coverage

rank-and-file employees regardless of their designation or employment status and irrespective of the method by which their wages are paid, are entitled to this benefit, provided, that they have worked for at least 1 month during the calendar year. b. Forms 1. Christmas bonus; 2. midyear bonus; 3. profit sharing payments; and 4. other cash bonuses amounting to not less than 1/12 of its basic salary. It must always be in the form of legal tender. Difference of opinion on how to compute the 13th month pay does not justify a strike. Free rice, electricity cash and stock dividends, COLA are NOT proper substitutes for the 13th month pay. ii. 14th Month Pay A misnomer because it is basically a bonus and gratuitous in character. Granting thereof is a management prerogative which can not be forced upon the employer. iii. Productivity Incentives Act of 1990 (RA 6971, November 22, 1990) Kind of bonus that comes from productivity gain. Aims to institute productivity at company level and the sharing of productivity gain between employers and employees. Nature of salary bonus is proportionate to increase in current productivity. Employees whose positions are reclassified from rank and file to supervisory lose overtime pay and other benefits under Articles 82-96. Promotion produces the same effect. But the promotion and position reclassification must be done in good faith. The personnel movement should not be intended to circumvent the law to deprive employees of the benefits they used to receive.

All

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d. Payment by Results (Art. 101) i. Categories of Piece-Rate Workers (as to the presence of control) 1. those who work directly under the supervision of their employer (piece-rate worker) 2. those who work away from the employers work premises and are not directly supervised by the employer (pakiaw or takay) ii. Categories of Piece-Rate (as to the rate of payment) 1. those who are paid piece rates as prescribed in piece rate orders by the DOLE. 2. those who are paid output rates which are prescribed by the employer and are not yet approved by the DOLE. iii. Workers Paid on Piece-Rate Basis Those who are paid a standard amount for every piece or unit of work produced that is more or less regularly relicated, without regard to the time spent in producing the same. iv. Benefits Payable to PieceRate Workers Whose Work is Directly Supervise by the Employer Applicable statutory minimum daily rate. Yearly service incentive leave of 5 days with pay. NSD Pay Holiday Pay Meal and Rest Periods OT Pay (conditional) Premium Pay (conditional) 13th Month Pay Other benefits granted by law, individual or collective bargaining agreements or company policy and practice. The rules implementing the Labor Code on NSD and SIL do not apply to employees whose time and performance is unsupervised by the employers, including those who are engaged on task or contract basis, purely commission or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

e. Forms of Payment (Art. 102) Employer cannot pay his workers by means of: 1. promissory notes; 2. vouchers; 3. coupons; 4. tokens; 5. tickets; 6. chits; or 7. any object other than legal tender General Rule- Payment by legal tender Exceptions- payment by check or money order may be allowed if the same is: a. customarily on the date of effectivity of the Labor Code; b. necessary because of special circumstances as determined by the Secretary of Labor; c. stipulated in the CBA; or d. where the following conditions are met: e. there is a bank or other facility for encashment within the radius of 1km from the work place; f. the employer, or any of his agent or representatives, does not receive any pecuniary benefit directly or indirectly from the arrangement; g. 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 h. the payment by check is with the written consent of the employees concerned if there is no CBA authorizing the payment of wages by bank checks. f. Time of Payment (Art. 103)

1. 2. 3. 4. 5. 6. 7.

8.
9.

When to Pay?- At least once ever


2 weeks; or twice a month at intervals not exceeding 16 days. In case of force majeure or other circumstances beyond the employers control, payment must be made immediately after such occurrence has ceased.

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If engaged to perform a task which cannot be completed in 2 weeks and in the absence of CBA: a. payment shall be made at intervals not exceeding 16 days, in proportion to the amount of work completed; b. that final settlement is made upon completion of the work. g. Place of Payment (Art. 104)

Where to Pay?- At or near the


place of undertaking. Exceptions: 1. When payment cannot be effected at or near the place of work by reason of deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire flood or other calamity rendering payment thereat impossible. 2. When the employer provides for free transportation to the employees back and forth; and 3. Under any other analogous circumstances 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 or money or things representing money except in the case of persons employed in said places. Requisites of Payment through Banks: 1. There must be written permission of the majority of the employees concerned in an establishment; 2. The establishment must have 25 or more employees; and 3. The establishment must be located within 1km radius to the bank. Payment through ATM is allowed. h. Direct Payment of Wages (Art. 105)

General Rule- Wages shall be paid


directly to the workers to whom they are due: Exceptions:

1. payment through another person in case of force majeure rendering such payment impossible provided said person is under written authority given by the worker for the purpose; when authorized under existing law, including payments for insurance premiums of the employee and union dues where the right to check-off has been recognized by the employer in accordance with a CBA or authorized in writing by the individual employees concerned. 2. payment through heirs of worker in case where the worker has died employer may pay wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. Procedure: 1. claimants shall execute an affidavit attesting their relationship to the deceased and the fact that they are his heirs, to the exclusion of all others; 2. in case of a minor heir, affidavit shall be executed on his behalf by his natural guardian or next of kin; 3. affidavit shall be presented to the employer who shall make payment through the Secretary of Labor or his representatives. 4. the representative shall act as referee in dividing the amount paid among the heirs; 5. payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid. 3. payment through member of workers family Where the employer is authorized in writing by the employee to pay his wages to a member of his family. What Legal tender; promissory notes,

81

must be paid? When? Where? How?

vouchers, coupons, tokens, tickets, chits, or any other object other than legal tender is prohibited. Once every 2 weeks or twice a month at intervals not exceeding 16 days. At or near the place or undertaking. Directly to the employee entitled thereto

any proceedings employer.

against

his

j. Wage Deductions (Art. 113)

General Rule- Wage deduction is


strictly prohibited. Exceptions (allowable deductions): a. with employees consent: 1. SSS payments; 2. PHILHEALTH payments; 3. Contributions to PAG-IBIG Fund; 4. Value of meals and other facilities; 5. payments to third persons with employees consent; 6. deduction of absences b. without employees consent: 1. workers insurance acquired by the employer; 2. union dues, where the right to check-off has been recognized by the employer; 3. cases where the employer is authorized by law or regulations issued by the Secretary of Labor; 4. debts of the employee to the employer which have become due and demandable. k. Deposits for Loss Damage (Art. 114) or

i. Non-Interference in Disposal of Wages Article 1705, NCC- The laborers wages shall be paid in legal currency. Article 1706- Withholding of the wages, except for a debt due, shall not be made by the employer. Article 1707- The laborers wages shall be a lien on the goods manufactured or the work done. Article 1708- The laborers wages shall not be subject to execution or attachment except for debts incurred for food, shelter, clothing and medial attendance. Article 1709- The employer shall neither seize nor retain any tool or other articles belonging to the laborer. Prohibitions Regarding Wages: 1. Payment of wages with less frequency than once a month; 2. Limitations/ interference by the employer with the employees freedom to dispose of his wages; 3. Forcing, compelling/obliging employees to purchase merchandise, commodities, or other properties from the employer or from any other person, or to make use of any store or service of such employer or any other person; 4. Withholding wages; 5. Deduction of wages as consideration of a promise of employment or retention in employment; 6. Refusal to pay/reduction of wages and benefits, discharge/discrimination against any employee as retaliatory measures against any employee who has filed any complaint or instituted

General Rule- No employer shall


require his worker to make deposits for the reimbursement of loss of or damage to material, equipment, or tools supplied by the employer. ExceptionWhen the trade, occupation or business of the employer recognizes or considers the practice or making deductions or requiring deposits necessary or desirable. i. Requisites of Deduction for Loss or Damage: 1. the employee is clearly shown to be responsible for the loss or damage; 2. the employee is given ample opportunity to show cause why deduction should not be made; 3. the amount of the deduction is fair and reasonable and shall not

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1. 2.

3. 4.

5.

6. 7.

8.

9.

exceed the actual loss or damage; and 4. the deduction from the employees wage does not exceed 20% of the employees wages in a week. ii. 10 Commandments for the Employer: No employer shall interfere with the employees freedom to dispose his wages; No employer shall force, compel or oblige employees to purchase merchandise, commodities or other property from the employer or from any other person or otherwise make use of any store or services of such employer or any other person. No employer shall make any deductions from the employees wages except when authorized; No employer shall require the worker to make deposits from which deductions shall be made for reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer except when the employer is engaged in such business requiring such deposits as determined by the Secretary of Labor. No employer shall make any deduction from the employees deposits for the actual amount of the loss or damage unless the employee has been heard thereon and his responsibilities has been clearly shown; No employer shall withhold any amount from the wages unless authorized to do so. No employer shall induce the employee to give up any part of his wages by force, stealth, intimidation, threat or dismissal or by any other means without the workers consent; No employer shall make deductions as consideration of a promise of employment or retention of employment; No employer shall refuse to pay or reduce the wages and benefits or otherwise discharge the employee who has filed any complaint under

this Title, or has testified or is about to testify in such proceedings; 10.No employer shall make any statement report or record knowing such statement; report, or record to be false in any material respect. l. Wage Studies, Agreements and Determination Art. 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 DOLE for policy and program coordination. (As am. by Republic Act No. 6727, June 9, 1989). Art. 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

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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. Art. 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. m. Wage Order

Wage Order- An order issued by


the Regional Tripartite Wages and Productivity Board whenever the conditions in the region so warrant after investigating and studying all pertinent facts and based on the standards and criteria prescribed by the Labor Code, the Regional Board proceeds to determine whether to issue the same or not. Effectivity of Wage Order- It shall take effect after 15 days from its complete publication in at least one newspaper of general circulation in the region. Frequency of a Wage Order- A Wage Order issued by the Board may not be disturbed for a period of 12 months from its effectivity and no petition for wage increase shall be entertained during said period, except, when the Congress itself issues a law increasing wages. n. Standards/ Criteria For Minimum Wage Fixing Art. 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;

84

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. Art. 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)

A. While that is the aim, it need not necessarily be restored to the last peso. An appreciable differential, a significant pay gap should suffice as correction of the distortion. CMP FEDERAL SECURITY AGENCY vs. NLRC and VALENTIN TAPIS G.R. No. 122107 June 2, 1999 BELLOSILLO Facts: Between 1988 to 1992 private respondents Valentin Tapis et.al. were employed by petitioner as security guards and assigned to its various clients. Respondent individuals filed a complaint against petitioner for illegal dismissal, underpayment of wages, and nonpayment of other benefits. The alleged illegal dismissal was premised on private respondents lack of assignment for several months. On the other hand, petitioner interposed the defense of prematurity of the complaint due to the fact that it was filed even before the lapse of the 6 months floating period allowed security agencies in posting assignments. The Labor Arbiter Labor Arbiter acknowledged that "the complaint for illegal dismissal was prematurely filed but he found that private respondents were constructively dismissed and were thus awarded back wages, separation pay, differentials and the return of the cash bonds. NLRC reversed the Labor Arbiter and deleted the back wages and separation pay. However, it maintained the differentials and the return of the cash bonds. Issue: WON NLRC erred in not recomputing the wage differentials despite the fact that re-computation could not be avoided because of the modification of the decision of the Labor Arbiter on illegal dismissal. Ruling: As held by the Labor Arbiter: For lack of evidence (payrolls and time cards), complainants are entitled to their monetary claims from the time they

WAGE DISTORTION- A situation


where an increase in prescribed wage rates results in the elimination or sever 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. Correction of Wage Distortion: a. Unionized Establishment 1. Negotiate to correct the distortion 2. Any dispute arising therefrom should be resolved through grievance procedure under their CBA. 3. If the dispute remains unresolved, through voluntary arbitration. b. Establishment without Union 1. The employer and workers shall endeavor to correct the distortion; 2. Any dispute arising therefrom shall be settled through the NCMB and 3. If it remains unresolved after 10 days of conciliation, it shall be referred to the NLRC. NOTE: Wage Distortion is non-strikaable. Q. Is the employer legally obliged to correct a wage distortion? A. It appears so. Article 124, Labor Code provides that the employer and the union shall negotiate to correct the distortions. If there is no union, the employer and the workers shall endeavor to correct such distortions. Q. Must the previous pay gaps be restored?

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started working with the respondents till their last detail or assignment but limited to the prescriptive period of three years. Their wage differentials should be computed under the minimum standard rate for employees who are tasked to work 12 hours a day including Sundays and Holidays. However, the salaries, overtime pay and 13th month pay received by the complainants should be deducted to arrive at the proper wage differentials. This simply means that the basis for the differentials was never extended to cover the period when back wages were allowable. That this should be the case is explained by the very nature of back wages which demands that the period covered refers to the duration of unemployment, for back wages are the earnings lost by reason of the unjustified dismissal. Wage differentials, on the other hand, are accrued and unpaid wages which necessarily require the employment of the wage earner at the time the wage differentials accrued. It would naturally follow that the differentials were never computed to include the time for which the back wages were awarded as erroneously contended by petitioner. NLRC is affirmed. VI. POST EMPLOYMENT A. Kinds of Employment 1. REGULAR EMPLOYMENT (Art. 280)

Regular

EmploymentOne wherein an employee is engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. Except: 1. where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee; or

2. where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. He is regular employee at the point of hiring. i. Who are considered Regular Employee? 1. Those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. 2. Casual employees who have rendered at least 1 year of service is continuous or broken; they are considered regular employees with respect to the activities in which they are employed; their employment shall continue while such activity exists. 3. A probationary employee who is allowed to work after the probationary period. 4. Learners who have been allowed or suffered work during the first 2 months if training is terminated by the employer before the end of the stipulated period through no fault of the learner. i. Test in Determining Regular Employment: a. Reasonable Connection Rule The primary standard of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the activity performed by the employee is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety (de Leon vs. NLRC, 171 S 615). Additionally, an employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them (Prudential Bank vs. Reyes, 352 S 316) Whether the work undertaken by the employee is necessary or desirable can be assessed by looking at the

86

services rendered and its relation to the general scheme under which the business or trade is pursued (Magsalin vs. National Organization of Working Men, May 9, 2003). 2. PROJECT EMPLOYMENT

not mean severance employee relationship.

of

employer-

Project Employment- Where the


employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee. i. Test of Project Employment The principal test for determining whether an employee is project employee is whether or not such employee is assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project A common basic requisite is that the designation of named employee as project employees and their assignment to a specific project are effected and implemented in good faith. The services of project are conterminous with the project. They may be terminated upon the end or completion of that project or phase thereof for which they were hired. The employer has no obligation to pay them separation pay. The contract workers are not considered regular employees, their services being needed only when there are projects to be undertaken. The rationale of the rule is that if a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun. Members of a work pool from which a construction company draws its project employees, if considered employee of the construction company while in the work pool, are non-project employees or employees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will

ii. When project employee may acquire the status of regular employee? 1. there is a continuous rehiring of the project employees ever after cessation of a project; and 2. the tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer. 3. SEASONAL EMPLOYMENT

Seasonal Employment- Seasonal


workers are those who are called to work from time to time according to the occurrence of varying need during a season, and are laid off after completion of the required of work. Nature of ER- EER- The nature of the relationship of the seasonal workers with their employer is such that during off season they are temporarily laid off but during the season of work, they are re-employed. They are not, strictly speaking, separated from the service but merely considered as on leave of absence without pay until they are re-employed. Their employment relationship is never severed but only suspended. Seasonal workers who work for more than one season are deemed to have acquired regular employment (Hacienda Fatima vs. National Federation of Sugarcane Workers, January 28, 2003). 4. CASUAL EMPLOYMENT

Under Article 280, Labor Code,


Casual Employment is one where employment is neither regular nor seasonal or fixed for a specific project. Employment is casual when and where it is not permanent nor periodically regular, but occasional or by chance, and not in the usual course of the employers trade or business. An employee who has rendered at least 1 year of service, whether such

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service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Casual employees who are dismissed from their employment before the expiration of the 1-year period, cannot lawfully claim that they are illegally dismissed. The status of regular employment attaches to the casual employee on the day immediately after the end of his first year of service. 5. FIXED PERIOD (Termed Employment) EMPLOYMENT

Probationary Employee- is one


who is no trial by an employer during which the employer determines whether or not he is qualified for permanent employment. Probationer enjoys security of tenure and he cannot be removed from employment before his contract expires, except for cause provided for by law. General Rule- probationary period of employment is 6 months. Exceptions: 1. When the parties voluntary agreed to a longer period; or 2. When the parties lawfully agreed for an extension to give an employee a second chance. Requisites for acquisition of permanent employment of Private School Teachers: 1. full-time teacher; 2. must have rendered at least 3 consecutive years of service; and 3. such service must have been satisfactory. CASES: RICARDO S. MEDENILLA vs. PHILIPPINE VETERANS BANK G.R. No. 127673. March 13, 2000 PURISIMA Facts: Petitioners were employees of the Philippine Veterans Bank (PVB). Their services were terminated as a result of the liquidation of PVB pursuant to the order of the Monetary Board of the Central Bank. On the same day of their termination, petitioners were rehired through PVBs Bank Liquidator, Antonio T. Castro, Jr.. However, all of them were required to sign employment contracts which provided that: (1) The employment shall be strictly on a temporary basis and only for the duration of the particular undertaking for which a particular employee is hired; (2) Such temporary employment will not entitle an employee to any benefits except those granted by law; (3) The Liquidator reserves the right to terminate the services of the employee at any time

Employment that will last only for a definite period, as agreed by the parties, is not per se illegal or against public policy even if this kind of employment is not mentioned in Art. 280, Labor Code. Fixed-term Employment- those to which the parties by free choice have assigned a specific date of termination of employment. To be valid, the parties must have knowingly and voluntarily agreed thereto. Where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy. 6. PROBATIONARY EMPLOYMENT Article 281- Probationary employment shall not exceed 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 tie of his engagement. An employee who is allowed to work after a probationary period shall be considered as a regular employee.

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during the period of such employment if the employee is found not qualified, competent or, efficient in the performance of his job, or have violated any rules and regulations, or such circumstances and conditions recognized by law. Petitioners received a uniform notice of dismissal effective a month from the date of receipt, which notice contained the reasons justifying the termination: (a) To reduce costs and expenses in the liquidation of closed banks; (b) The employment were on strictly temporary basis." Petitioners instituted a case for illegal dismissal. Labor Arbiter ruled in favor of the petitioners which was reversed by NLRC. Issue: WON NLRC erred in ruling that there was a valid fixed-period of employment of the petitioners. Ruling: In a decided case, it has been held that the two guidelines by which fixed contracts of employment can be said NOT to circumvent security of tenure, are either: 1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or 2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. In the case at bench, the employment contract entered into by the parties herein appears to have observed the said guidelines. Furthermore, it is evident from the records that the subsequent re-hiring of petitioners which was to continue during the period of liquidation and the process of liquidation ended prior to the enactment of RA 7169 entitled, "An Act to Rehabilitate Philippine Veterans Bank", which was promulgated on January 2, 1992. However, petitioners were illegally dismissed.

It is settled that in cases of illegal dismissal, the burden is on the employer to prove that there was a valid ground for dismissal. Mere allegation of reduction of costs without any proof to substantiate the same cannot be given credence by the Supreme Court. Here, respondents failed to rebut petitioners evidence, thus, irresistible conclusion is that the dismissal in question was illegal. Such illegal dismissal warrants reinstatement and payment of backwages. However, since petitioners reinstatement is now considered impractical because the new Philippine Veterans Bank has been rehabilitated by virtue of RA 7169, the Supreme Court limits the relief to be granted to the petitioners to the unpaid wages during the remaining period of their employment contract. If the contract is for a fixed term and the employee is dismissed without just cause, he is entitled to the payment of his salaries corresponding to the unexpired portion of the employment contract. In this case, the unpaid wages should be reckoned on February 18, 1991 to January 1, 1992. January 1, 1992 is considered the date of expiration of the period of liquidation since January 2, 1992 was the effectivity of RA 7169. Petition is partly granted. D. M. CONSUNJI, INC vs. NLRC and ALEXANDER AGRAVIADOR G.R. No. 116572. December 18, 2000 KAPUNAN Facts: Private respondents were hired by petitioner as project employees to work on its Cebu Super Block Project in Cebu City. Their separate but identical contracts state among others: You are hired/appointed as project employee as ___________ for an estimated period of employment for _____________________ in the company's construction project at Cebu Superblock. THE TERMS AND CONDITIONS OF YOUR EMPLOYMENT ARE AS FOLLOWS:

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The period of employment is for an estimated period of one month that is for ___________________ to _____________________ provided that it shall not extend beyond the duration of the project xxx.. Private respondents services were terminated allegedly without regard to the date of termination as specified in their contracts of employment. Petitioner reported the termination of their services to DOLE alleging that the term of the contracts of employment had expired. The private respondents then filed their respective complaints for illegal dismissal Labor Arbiter rendered a decision finding the dismissal of the private respondents without just cause and ordering petitioner to reinstate them to their former positions without loss of benefits and seniority rights and to pay them, which was affirmed by NLRC. Issue: WON the private respondents were project employees. Ruling: Project employee is one whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Supreme Court has held that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee. In the case at bench, private respondents are project employees. Their contracts of employment readily show that the private respondents were employed with respect to a specific project. The private respondents in this case were workers in a construction project of the petitioner.

While employed with respect to a specific project, the contracts of employment between the private respondents and the petitioner provide that the former were employed for a term of 1 month which was the estimated period for the project to be finished. The private respondents do not even claim to be regular employees but merely that, as employees at the Cebu Super Block, they were terminated before the completion of the project without just cause and due process. As project employees, there is no showing that they were part of the work pool of the petitioner construction company. Hence, private respondents admit that they are not unaware that as project employees their employment can be terminated upon the completion of the project. Issue: WON the termination employment was illegal. Ruling: Examining the standard contracts signed by the private respondents, there are three ways by which their employment may be terminated: one, the expiration of the one month period, which was the estimated period for the completion of the project; two, the completion of the project or phase of the project for which they were engaged prior to the expiration of the one month period; and three, upon the finding of unsatisfactory services or other just cause. The private respondents admitted that they signed their employment contract voluntarily. By this admission, the private respondents necessarily bound themselves to be employed for a fixed duration knowingly and voluntarily without any force, duress or improper pressure. There is no showing that the term fixed was used to preclude acquisition of tenurial security since private respondents were admittedly employed with respect to a specific project, the Cebu Super Block. Inescapably, being a valid contract between the private respondents and the petitioner, the provisions thereof, specifically with respect to the one (1) month period of employment, has the force of law between the parties. of their

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At the time of the termination of the private respondents employment on March 2, 1993, the respective periods or terms of employment of private respondents Barcelona, Laspuna and Diaz had already expired. The fact that they were allowed to work for weeks after the expiration of their contracts would not necessarily show that petitioner had dishonored the contracts. Indeed, some phases of the project may not have been completed after the estimated one month period and that their services were still necessary. On the other hand, the one month period under the contracts of Agraviador and Mendrez had not yet expired when their services were terminated on March 2, 1993. Petitioner has not alleged, much less established, that the premature termination of the services of private respondents Agraviador and Mendrez was due to the earlier completion of the project or any phase or phases thereof to which they were assigned. Neither has it been shown that the services of Agraviador and Mendrez were unsatisfactory. In termination cases, the burden of proving that an employee has been lawfully dismissed lies with the employer. It is in the interest of justice to require employers to state the reason for their project employees dismissal and prove this ground once its veracity is challenged. Employers who hire project employees are mandated to prove the actual basis of the latters dismissal. The inescapable conclusion is that Agraviador and Mendrez were terminated prior to the expiration of the period of their employment without just cause, hence, their termination was illegal. However, private respondents can not be reinstated since the project they were assigned to was already completely finished. NLRC is reversed.

Facts: On May, 1990, Respondent Rosalina Arceo (Arceo) applied for the position of telephone operator with petitioner Philippine Long Distance Telephone Co. She, however, failed the pre-employment qualifying examination. Having failed the test, Arceo requested PLDT to allow her to work at the latters office even without pay. PLDT agreed and assigned her to its commercial section where she was made to perform various tasks like photocopying documents, sorting out telephone bills and notices of disconnection, and other minor assignments and activities. After two weeks, PLDT decided to pay her the minimum wage. On February 15, 1991, PLDT saw no further need for Arceos services and decided to fire her but, through the intervention of PLDTs commercial section supervisor, Mrs. Beatriz Mataguihan, she was recommended for an on-the-job training on minor traffic work. When she failed to assimilate traffic procedures, the company transferred her to auxiliary services, a minor facility. Subsequently, Arceo took the pre-qualifying exams for the position of telephone operator two more times but again failed in both attempts. Finally, on October 13, 1991, PLDT discharged Arceo from employment. She then filed a case for illegal dismissal before the labor arbiter. The Labor Arbiter ordered PLDT to reinstate Arceo to her "former position or to an equivalent position." This decision became final and executory. On June 9, 1993, Arceo was reinstated as casual employee with a minimum wage. She was assigned to photocopy documents and sort out telephone bills. On September 3, 1996 or more than three years after her reinstatement, Arceo filed a complaint for ULP alleging that, since her reinstatement, she had yet to be regularized and had yet to receive the benefits due to a regular employee. On August 18, 1997, Labor Arbiter ruled that Arceo was already qualified to become a regular employee. He also found that petitioner denied her all the benefits and privileges of a regular employee.

PLDT vs. ROSALINA C. ARCEO G.R. No. 149985 May 5, 2006 CORONA

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Issue: WON Arceo eligible to become a regular employee of PLDT. Ruling: Under Art. 280, Labor Code, the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Under the foregoing provision, a regular employee is (1) one who is either engaged to perform activities that are necessary or desirable in the usual trade or business of the employer or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. Under the first criterion, respondent is qualified to be a regular employee. Her work, consisting mainly of photocopying documents, sorting out telephone bills and disconnection notices, was certainly "necessary or desirable" to the business of PLDT. But even if the contrary were true, the uncontested fact is that she rendered service for more than one year as a casual employee. Hence, under the second criterion, she is still eligible to become a

regular employee. Petitioners argument that respondents position has been abolished, if indeed true, does not preclude Arceos becoming a regular employee. The order to reinstate her also included the alternative to reinstate her to "a position equivalent thereto." Thus, PLDT can still "regularize" her in an equivalent position. Petition is denied. VIVIAN Y. IMBUIDO vs. NLRC and INTERNATIONAL INFORMATION SERVICES G.R. No. 114734. March 31, 2000 BUENA Facts: Petitioner Vivian Imbuido was employed as a data encoder by private respondent International Information Services, Inc., a domestic corporation engaged in the business of data encoding and keypunching, from August 26, 1988 until October 18, 1991 when her services were terminated. From August 26, 1988October 18, 1991, petitioner entered into 13 separate employment contracts with private respondent, each contract lasting only for a period of 3 months. Aside from the basic hourly rate, specific job contract number and period of employment. Petitioner allegedly agreed to the filing of a petition for certification election involving the rank-and-file employees of private respondent. Thus, Lakas Manggagawa sa Pilipinas filed a petition for certification election. Subsequently, petitioner received a termination letter from Edna Kasilag, Administrative Officer of private respondent, allegedly "due to low volume of work." Thus, petitioner filed a complaint for illegal dismissal. Labor Arbiter ruled in favor of petitioner and ordered her reinstatement, which was reversed by NLRC. Issue: WON employee. Ruling: Petitioner is a project employee. The principal test for determining petitioner is a regular

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whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project. A project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. In the instant case, petitioner was engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer, petitioner worked as a data encoder for private respondent, a corporation engaged in the business of data encoding and keypunching, and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement, as may be observed from the series of employment contracts between petitioner and private respondent, all of which contained a designation of the specific job contract and a specific period of employment. However, even though petitioner is a project employee, petitioner has acquired the status of a regular employee. In a decided case, it has been held that a project employee or a member of a work pool may acquire the status of a regular employee when the following concur: 1) There is a continuous rehiring of project employees even after [the] cessation of a project; and 2) The tasks performed by the alleged "project employee" are vital, necessary and indispensable to the usual business or trade of the employer. In this case, the evidence on record reveals that petitioner was employed by private respondent as a data encoder, performing activities which are usually necessary or desirable in the usual business or trade of her employer,

continuously for a period of more than 3 years, from August 26, 1988 to October 18, 1991 and contracted for a total of 13 successive projects. It should be noted, however, that the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. Based on the foregoing, Petitioner has attained the status of a regular employee of private respondent. Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just or authorized cause. Petition is granted. RADIN C. ALCIRA vs. NLRC and PHILIPPINES CORPORATION G.R. No. 149859 June 9, 2004CORONA Facts: Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated petitioners services. Alcira claimed that his employment started on May 20, 1996 while the company alleged that Alcira was employed on May 27, 1996. The documents presented indicate petitioners employment status as "probationary (6 mos.)" and a remark that "after five months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance." Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal "after the lapse of his probationary employment," petitioner filed on November 21, 1996 a complaint against respondent Middleby contending that he had already become a regular employee as of the date he was illegally dismissed. The Labor Arbiter dismissed the complaint which was affirmed by NLRC.

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Issue: WON petitioner was allowed to work beyond his probationary period. Ruling: Under the law, probationary employment shall not exceed 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. In the case at bench, the appointment contract expressly states that petitioners employment status was "probationary (6 mos.)." The five-month period referred to the evaluation of his work. Petitioner however, insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. As the appointment provided that petitioners status was "probationary (6 mos.)" without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee. Petitioners contention is incorrect. It has been held that the computation of the 6month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following. In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to "regularize" him on November 20, 1996. Issue: WON petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment.

Ruling: It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement. However, it has been held that this constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment. In the case at hand, Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not intend to grant him a regular status. Petition is denied. PERPETUAL HELP CREDIT COOPERATIVE vs. BENEDICTO FABURADA, SISINITA VILLAR G.R. No. 121948. October 8, 2001 SANDOVALGUTIERREZ Facts: Private respondents Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay filed a complaint against the Perpetual Help Credit Cooperative, Inc. (PHCCI), for illegal dismissal. Petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative. Furthermore, private respondents have not exhausted the remedies provided in the cooperative bylaws. Labor Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code.

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Issue: WON private regular employees. Ruling:

respondents

are

Article 280 of the Labor Code provides for three kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. The employees who are deemed regular are: (a) those who have been engaged to perform activities which are usually necessary or desirable in the usual trade or business of the employer; and (b) those casual employees who have rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in which they are employed. The elements of the ER-EER are present in this case. PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager, hired private respondents to work for it. They worked regularly on regular working hours, were assigned specific duties, were paid regular wages and made to accomplish daily time records just like any other regular employee. They worked under the supervision of the cooperative manager. But unfortunately, they were dismissed. Moreover, private respondents were rendering services necessary to the dayto-day operations of petitioner PHCCI. This fact alone qualified them as regular employees. All of them, except Harold D. Catipay, worked with petitioner for more than 1 year. That Benedicto Faburada worked only on a part-time basis, does not mean that he is not a regular employee.

Ones regularity of employment is not determined by the number of hours one works but by the nature and by the length of time one has been in that particular job. Consequently, petitioner's contention that private respondents are mere volunteer workers, not regular employees, must necessarily fail. As regular employees or workers, private respondents are entitled to security of tenure. Thus, their services may be terminated only for a valid cause, with observance of due process. Petition is denied. ABESCO CONSTRUCTION AND DEVELOPMENT CORPORATION vs. ALBERTO RAMIREZ G.R. No. 141168 April 10, 2006 CORONA Facts: Petitioner company was engaged in a construction business where respondents were hired on different dates from 1976 to 1992 either as laborers, road roller operators, painters or drivers. Respondents filed complaintsfor illegal dismissal against the company. Petitioners allegedly dismissed them without a valid reason and without due process of law. Petitioners denied liability to respondents and countered that respondents were "project employees" since their services were necessary only when the company had projects to be completed. Petitioners argued that, being project employees, respondents' employment was coterminous with the project to which they were assigned. They were not regular employees who enjoyed security of tenure and entitlement to separation pay upon termination from work. The Labor Arbiter ruled that private respondents are regular employees. Issue: WON private regular employees. Ruling: Private respondents were regular employees. Employees (like respondents) who work under different project respondents were

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employment contracts for several years do not automatically become regular employees; they can remain as project employees regardless of the number of years they work. Length of service is not a controlling factor in determining the nature of one's employment. Moreover, employees who are members of a "work pool" from which a company (like petitioner corporation) draws workers for deployment to its different projects do not become regular employees by reason of that fact alone. It has been held that members of a "work pool" can either be project employees or regular employees. The principal test for determining whether employees are "project employees" or "regular employees" is whether they are assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time they are engaged for that project. Such duration, as well as the particular work/service to be performed, is defined in an employment agreement and is made clear to the employees at the time of hiring. In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform respondents of the nature of the latter's work at the time of hiring. Hence, for failure of petitioners to substantiate their claim that respondents were project employees, the Supreme Court is constrained to declare them as regular employees. Petition is denied. B. Management Prerogatives Management prerogative refers to the right of an employee to regulate all aspects of employment. a. Scope 1. Right to set Qualifications: a. Civil Status; Pre-employment

b. Height; c. Age; d. Gender/sex; e. Academic background; f. Residence 2. Right to Manage People in General The free will of management to conduct its own affairs to achieve its purpose cannot be denied. Except as limited by special laws, an employer is free to regulate according to his own discretion and judgment, all aspects of employment including, the power to: a. Determine the time, place, and manner of work; b. Determine the tools to be used; c. Lay-off of workers; d. Dismiss erring employees; e. Promote, transfer, or demote an employee to other positions; f. Rotate an employee from the day shift to the night shift; g. Prescribe reasonable rules and regulations necessary or proper for the conduct of its business; h. Provide certain disciplinary measures in order to implement prescribed rules; i. Merge or consolidate the business with another; j. Abolish positions which it deems no longer necessary; k. Close the business; and l. Contract out services performed by employees to outside agencies. Every business enterprise endeavors to increase its profits. In the process it may adopt or devise means designed toward that goal. So long as the management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, such prerogatives will be upheld. NOTE: The Court upheld the right of the management to prescribe a policy prohibiting an employee from having a relationship with an employee of a competitor company (Tecson vs. Glaxo Wellcome Philippines, GR No. 162994, September 17, 2004)

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2. Right to Discipline Employees The employer has the prerogative to instill discipline in his employees and to impose reasonable penalties, including dismissal, on erring employees pursuant to company rules and regulations. Although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution. Infractions committed by an employee should merit only the corresponding sanction demanded by the circumstances. The penalty must be commensurate with the act, conduct or omission imputed to the employee and imposed in connection with the employers disciplinary authority. 3. Right to Transfer Employees It is management prerogative to transfer or assign an employee from one office to another within the business establishment, in the pursuance of its legitimate business interest provided there is no demotion in rank or diminution of his salary. An employees right to security of tenure does not give him such vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him. It is the prerogative of management to transfer an employee where he can be most useful to the company. Q. When transfer may constitute constructive dismissal? A. A transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient or prejudicial to the employee, and involves a demotion in rank or diminution of salaries, benefits and other privileges. NOTE: A transfer that results of promotion or demotion, advancement or reduction or a transfer that aims to lure an employee away from his permanent position cannot be done without the employees consent. Re-assignment pending investigation by the management falls

within the management prerogatives. The purpose of re-assignment is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the companys property pending investigation of any alleged misfeasance or malfeasance committed by an employee. 4. Right to Demote It is management prerogative to transfer, demote, and even dismiss an employee to protect its business, provided it is not tainted with unfair labor practices. Management is at liberty, absent any malice on its part, to abolish positions which it deems no longer necessary. Abolition of position due to company reorganization or merger is a management prerogative and will be upheld provided the same is undertaken without any malice on the part of the management. The company has the prerogative to adopt a redundancy/retrenchment program to minimize if not, to avert losses in the conduct of its operations. Promotion of employees is a management prerogative. 5. Right to Dismiss The right of the company to dismiss its employee is a measure of selfprotection. An employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to its interest. NOTE: a. Services Performed by Personnelwith respect to the determination of whether services should be performed by its personnel or contracted to outside agencies, the contracting out should be motivated by good faith and must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action. b. Closing of Business- with respect to the closing of business, although the

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employer may close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, the same may be undertaken as long as he pays his employees their termination pay in the amount corresponding to their length of service. CASES: ANGELITO P. DELES, JR vs. NLRC and FIRST PHIL. INDUSTRIAL CORP. G.R. No. 121348. March 9, 2000 QUISUMBING Facts: Respondent company operates a pipeline system which transports petroleum products from the refineries by Caltex and Shell in Batangas to terminal receiving facilities in Metro Manila. Petitioner was employed by the company as shift supervisor. He was assigned at its joint terminal facility in Pandacan, Manila, where he was the highest ranking officer at the terminal during his shift. His primary task was to oversee the entire pipeline operation in the terminal. Admittedly, he was a member of the management team. On the night of March 19, 1993, petitioner was the shift supervisor on duty while Eduardo Yumul and Leonardo Espejon were the assigned shift operator and gauger, respectively. During this shift, there was a scheduled delivery for Shell through respondent companys pipeline of about 3,000 barrels of kerosene (KE) to be followed by a delivery of aviation turbine fuel (AV). Forthwith, petitioner instructed his chief operator (Yumul) to effect a batch change from the kerosene tank to the aviation fuel tank when the joint terminal facility turbine meter registers 2,944 barrels of kerosene delivered. Apparently, Yumul failed to execute correctly petitioners order. Instead of effecting the batch change at the prescribed reading of 2,944 barrels, Yumul caused the batch change when the reading already reached 3,341 barrels. Thus, about 397 barrels of the succeeding batch of aviation turbine fuel went to the kerosene batch thereby

downgrading the former. When informed of the incident, the company required petitioner to explain why he should not be charged administratively for neglect of duty. Petitioner was placed under preventive suspension pending the outcome of the investigation. The company conducted a joint formal investigation and found petitioner, Yumul and Espejon guilty as charged. Accordingly, private respondent Flaviano Santos, respondent companys assistant vice president, informed petitioner that he was found to have violated the section on Neglect of Duty of respondent companys Code of Discipline and for this violation he was meted the penalty of 3 months suspension. For their part, Yumul was meted the penalty of dismissal while Espejon was suspended for one and a half months. Petitioner filed a complaint before the NLRC, questioning the legality of his suspension. Issue: WON dismissed. Ruling: regarding the legality of petitioners suspension, petitioner was found remiss in his duties in connection with the wrong batch change operation on March 19, 1993. He contends though that his suspension for three months is too harsh, whimsical and biased. In essence, he decries the penalty imposed on him which he considered too severe. However, petitioner loses sight of the fact that the right of an employer to regulate all aspects of employment is well settled. This right, aptly called management prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In general, management has the prerogative to discipline its employees and to petitioner was illegally

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impose appropriate penalties on erring workers pursuant to company rules and regulations. Thus, petitioners protestation unfounded. For, based on the record, the company imposed said penalty pursuant to the Company Code of Discipline which the labor agencies find to be fair and in accordance with law. In fact, the penalty for violating the provision on Neglect of Duty ranges from warning to dismissal depending on the gravity of the offense. Respondent company explained that mishandling the delivery of highly flammable petroleum products could result in enormous damage to properties and loss of lives at the terminal and surrounding areas. Hence, it has to exercise extraordinary diligence in conducting its operations in view of the delicate nature of its business. Considering the attendant circumstances, we are constrained to agree that the penalty of suspension first imposed on petitioner is reasonable and appropriate as well as legally unassailable. Petition is denied. FLOREN HOTEL vs. NLRC and RODERICK A. CALIMLIM G.R. No. 155264 May 6, 2005 QUISUMBING Facts: At the time of their termination, private respondents Roderick A. Calimlim and Ronald Rico were working in the hotel as room boys and Lito F. Bautista as front desk man. Petitioner Dely Lim randomly inspected the hotel rooms to check if they had been properly cleaned. When she entered Room 301, she found Lito Bautista sleeping half-naked with the airconditioning on. Lim immediately called the attention of the hotels acting supervisor, Diosdado Aquino, who had supervision over Bautista. Lim admonished Aquino for not supervising Bautista more closely, considering that it was Bautistas third offense of the same nature. When she entered Room 303, she saw private respondents Calimlim and Rico drinking beer, with four bottles in front of them. They had taken these bottles of beer from the hotels coffee shop. Like Bautista, they

had switched on the air conditioning in Room 303. Dely Lim prepared a memorandum for Bautista. In the presence of Acting Supervisor Aquino as well as the other workers, Lim tried to give Bautista a copy of the memorandum but Bautista refused to receive it. Bautista then went on absence without leave. Calimlim and Rico, embarrassed by the incident, went home. When they returned to work the next day, they were served with a notice of suspension for one week. Like Bautista, they refused to receive the notice of suspension, but opted to serve the penalty. Upon their return on June 15, 1998, they saw a memorandum on the bulletin board announcing the suspension as room boys of Calimlim and Rico, or alternately returning to work on probation as janitors. The memorandum also included Calimlim and Ricos new work schedule. Calimlim and Rico submitted handwritten apologies and pleaded for another chance, before they went AWOL (absent without leave). Calimlim, Rico and Bautista filed separate complaints, for illegal dismissal and money claims, before the Labor Arbiter. Calimlim and Rico claimed they were constructively dismissed, while Bautista claimed that Dely Lim orally told him not to go back to work because he was already dismissed. Labor Arbiter dismissed the complaints but ordered petitioners to pay private respondents their proportionate 13th month pay, and SIL pay. He likewise ordered petitioners to pay Calimlim and Rico indemnity. NLRC reversed Labor Arbiter and ordered the hotel management to immediately reinstate private respondents to their former positions without loss of seniority rights, with full backwages and other benefits until they are actually reinstated. CA ruled that petitioners had constructively dismissed private respondents Calimlim and Rico, hence the petitioners are liable to the private respondents for their proportionate 13th month pay, SIL pay, and indemnity. Issue: WON private respondents Calimlim and Rico were constructively dismissed. Ruling:

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For the transfer of the employee to be considered a valid exercise of management prerogatives, the employer must show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; neither would it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to discharge this burden of proof, the employees transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely, as in an offer involving a demotion in rank and diminution in pay. In the case at bench, Calimlim and Rico were being forced to accept alternate work periods in their new jobs as janitors, otherwise they would be unemployed. Not only did their new schedule entail a diminution of wages, because they would only be allowed to work every other week, the new schedule was also clearly for an undefined period. The memorandum did not state how long the schedule was to be effective. Indeed, it appears that the period could continue for as long as management desired it. These unreasonable new terms of employment were imposed in the memorandum, which was issued two days before Calimlim and Rico returned from their week-long suspension. They were imposed for alleged past infractions for which neither Calimlim nor Rico was given the chance to be heard. Under the circumstances, the Supreme Court fail to see how the temporary transfer of Calimlim and Rico could be a valid exercise of management prerogatives. Even the employers right to demote an employee requires the observance of the twin-notice requirement. CA is modified. LOPEZ SUGAR CORPORATION vs. LEONITO G. FRANCO G.R. No. 148195 May 16, 2005 CALLEJO Facts:

Private respondents Leonito G. Franco et.al were supervisory employees of the Lopez Sugar Corporation. Franco was hired by the Corporation as Shift Supervisor in the Sugar Storage Department. On the other hand, Perrin and Candelario were employed as Planter Service Representatives (PSRs), who rose from the ranks and, by 1994, occupied supervisory positions in the Corporations Cane Marketing Section. By 1994, the supervisory employees of the Corporation, spearheaded by Franco et.al. decided to form a labor union called Lopez Sugar Corporation Supervisors Association. DOLE issued a Certificate of Registration to the union. During its organizational meeting, Franco was elected president and Pabalan as treasurer. The officers of the union and the management held a meeting, which led to the submission of the unions proposals for a CBA. The Corporations president issued a Memorandum to the vice-president and department heads for the adoption of a special retirement program for supervisory and middle level managers. He emphasized that the management shall have the final say on who would be covered, and that the program would be irrevocable once approved. Perrin and Candelario were on leave when they were invited by Juan Masa, Jr., the head of the Cane Marketing Section. The latter informed them that they were all included in the special retirement program and would receive their respective notices of dismissal shortly. Franco et.al. received copies of the Memorandum from the Corporations Vice-President for Administration and Finance, informing them that they were included in the "special retirement program" for supervisors and middle level managers; hence, their employment with the Corporation was to be terminated effective and they would be paid their salaries. Thereafter, the private respondents filed separate complaints against the corporation with the NLRC for illegal dismissal, ULP, reinstatement and damages. NLRC ruled in favor of private respondents which was affirmed by CA.

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Issue: WON private illegally dismissed. Ruling:

respondents were

In a decided case, it has been held that it is imperative for the employer to have fair and reasonable criteria in implementing its redundancy program, such as but not limited to (a) preferred status; (b) efficiency; and (c) seniority. The general rule is that the characterization by an employer of an employees services as no longer necessary or sustainable is an exercise of business judgment on the part of the employer. The wisdom or soundness of such characterization or decision is not, as a general rule, subject to discretionary review on the part of the Labor Arbiter, the NLRC and the CA. Such characterization may, however, be rejected if the same is found to be in violation of the law or is arbitrary or malicious. It is settled that the hiring, firing or demotion of employees is a management prerogative, but is subject to limitations stated in the collective bargaining agreement, if any, or general principles of fair play and justice. Indeed, the Supreme Court will not hesitate to strike down a redundancy program structured by a corporation to downsize its personnel, solely for the purpose of weakening the union leadership, thereby preventing it from securing reasonable terms and conditions of employment in their CBA with the employer. In the case at bench, petitioner illegally dismissed the private respondents from their employment by including them in its special retirement program, thus, debilitating the union, rendering it pliant by decapacitating its leadership. As such, the so-called "downsizing" of the Cane Marketing Department and SMSD based on the SGV Study Report was a farce capricious and arbitrary. Foremost, the petitioner failed to formulate fair and reasonable criteria in ascertaining what positions were declared redundant and

accordingly obsolete, such as preferred status, efficiency or seniority. It, likewise, failed to formulate fair and reasonable parameters to determine who among the supervisors and middle-level managers should be "retired" for redundancy. Using the SGV report as anchor, the petitioner came out with a special retirement program for its 108 supervisors and middle-level managers, making it clear that its decision to eliminate them was final and irrevocable. Moreover, the private respondents were not properly apprised of the existence of the special retirement program, as well as the criteria for the selection of the supervisors to be "retired," and those to be retained or transferred or demoted. Petitioner downsized the Cane Marketing Department by eliminating private respondents Perrin and Candelario; and Franco and Candelario from the Sugar and Molasses Storage Department, respectively, without due regard to the SGV report. The downsizing of personnel was not among the foregoing recommendations, and yet this was what the petitioner did, through its special retirement program, by including private respondents Franco and Pabalan, thereby terminating their employment. It is too much of a coincidence that the two private respondents were active members of the union. Petition is denied. C. TERMINATION EMPLOYMENT a. Security of Tenure OF

Security

of Tenurethe Constitutional right granted to the employee that the employer shall not terminate the services of an employee except for just cause or when authorized cause. Nature of the Right to Security of Tenure and the Right to terminate employment: Termination of employment is not anymore a mere cessation or severance of contractual

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relationship but an economic phenomenon affecting members of the family. This explains why under the broad principles of social justice the dismissal of employee is adequately protected by the laws of the State. However, the workers right to security of tenure is not an absolute right for the law provides that he may be dismissed for cause. The law in protecting the rights of the labor authorizes neither oppression nor self-destruction of the capital. Substantive Due Process of Dismissal- an employee cannot be dismissed except for just or authorized cause of dismissal. Procedural Due Processthe process of termination that should be observed by the employer such as the twin-notice and hearing requirement and the 30-day notice requirement. b. Causes of Termination by Employer (Substantive Due Process of Dismissal) b.i. JUST CAUSES 1. Serious Misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work: 1.a. Serious Misconduct Misconduct- 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 in judgment. Requisites: 1. misconduct must be serious; 2. must relate to the performance of the employees duties; and 3. must show that the employee has become unfit to continue working for the employer. Examples: 1. challenging a superior officer to a fight; 2. use of insulting and offensive language towards superiors;

3. drinking liquor on company time in company premises; 4. sexual intercourse on company time and in company premises; 5. falsification of time cards; 6. drunkenness and disorderly or violent behavior; 7. using the employers property, equipment and personnel in the personal business of the employee; 8. sexual harassment (the managers act of fondling the hands, massaging the shoulder and caressing the nape of the secretary). 1.b. Requisites of Willful Disobedience of Lawful Orders 1. The employees assailed conduct must have been willful or intentional, the willfulness is being characterized by a wrongful and perverse attitude; 2. Order violated must be reasonable and lawful and made known to the employee and must pertain to the duties which he had been engaged to discharge. Examples: 1. using company vehicles for private purpose without authority from management; 2. refusal to report in the workers new work assignment in defiance of management prerogative; 3. driving without a valid drivers license in violation of the company rules and regulations. 2. Gross and habitual neglect by the employee of his duties; Gross negligence- the want or absence of even slight care or diligence as to amount to a reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Habitual neglectimplies repeated failure to perform ones duties for a period of time, depending upon the circumstances. In order to constitute a just cause for the employees dismissal, the neglect of duties must not only be

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gross but also habitual. Thus, the single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Examples: 1. Unjustified absences; 2. habitual absenteeism; 3. abandonment of work NOTE: To constitute abandonment of work, two elements must concur: 1. The failure to report for work or absence without valid or justifiable reason; and 2. a clear intention to sever the employer-employee relationship. The second element is the more determinative factor and being manifested by some overt acts. Abandoning ones job means the deliberate, unjustified refusal of the employee to resume his employment and the burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment. 3. Fraud of willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; The lost of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employers property and/or funds. Loss of Confidence (Guidelines) 1. not simulated; 2. should not be used as a subterfuge for causes which are improper;

3. may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. must be genuine; 5. must be substantial Examples: 1. theft of company property; 2. forgery or falsification of voucher 4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; NOTE: Conviction or prosecution is not required. 5. Other causes analogous to the foregoing causes. Examples: 1. unreasonable behavior and unpleasant deportment in dealing with co-workers; 2. failure to meet assigned sales quota; 3. gross inefficiency; 4. violation of the companys code of conduct or company rules and regulations

Doctrine

of IncompatibilityUpon employment, an employee is expected to behave in such a manner that would ensure the efficient and orderly operation of the employers business. Where the employee has done something that is contrary or incompatible to the performance of his duties, his employer has just cause for terminating his employment. Substantial proof and NOT clear and convincing evidence or proof beyond reasonable doubt is sufficient as basis for the imposition of any disciplinary action upon the employee. CASES: IMELDA B. DAMASCO vs. NLRC and MANILA GLASS SUPPLY G.R. No. 115755. Dec. 4, 2000 Quisimbing Facts:

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Ms. Imelda Damasco was a regular sales clerk in Manila Glass Supply in Olongapo City. Manila Glass Supply is a sole proprietorship engaged in the sale of glass with main store in Olongapo City and branch in Metro Manila. Bonifacio K. Sia is private respondent is the owner of Manila Glass Supply. Damasco was employed by Manila Glass Supply and Bonifacio K. Sia as Sales Clerk, receiving lately a daily wage of P140.00. As sales clerk, she was ordered to do almost all the works related to the glass business of respondents including the cutting, sales and delivery of glass as well as balancing, accounting and checking of capital and profits every end of the month. On August 28, 1992, while she was working, Bonifacio Sia called her up and told her to finish all her works that night, but she told respondent that she would not be able to finish them all because it was already late; that she then left respondents room but respondent called her again and asked her why she could not finish what she was told to do, to which Damasco answered that it was already late and there were still a lot of things to do. Sia asked Damasco why she was not teaching her 2 other co-workers on what to do, and she answered she would not do it anymore because if the other co-workers should commit mistakes in accounting, she was the first one to be lambasted by respondent and even required to share in paying the shortages. Sia ordered Damasco to go out of the room and told her that he does not want to see her face anymore. Sia, on the other hand, alleged that Damasco was instructed to report for work in their store in Metro Manila as there is a necessity for her detail thereat for reasons that the employees there are new. Damasco objected for reasons that her husband is working in Olongapo City and she does not want to work in Manila and thereafter, Damasco did not report for work in the respondents store in Olongapo City. Sia received a copy of complaint for illegal dismisssal filed by Damasco. Immediately, Sia sent a letter to complainant directing her to report for work which was ignored by Damasco. The Labor Arbiter ruled in favor of Damasco which was modified by NLRC.

Issue: WON dismissed. Ruling:

Damasco

was

illegally

To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employeremployee relationship, with the second element as the more determinative factor when manifested by some overt acts. Abandoning ones job means the deliberate, unjustified refusal of the employee to resume his employment and the burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment. In the case at bench, there are no overt acts established by Sia from which we can infer the clear intention of Damasco to desist from employment. Sias letters for Damasco to report for work deserve scant consideration. Note that those orders were made four months after Damasco was told not to show herself again in the store, and after Sia had received a copy of Damascos complaint for illegal dismissal. It is indeed highly incredible for an employer to require his employee without an approved leave to report to work only after four months of absence. If at all, the charge of abandonment is disingenuous to say the least. Moreover, it was unlikely that Damasco had abandoned her job for no reason at all considering the hardship of the times. In addition, if Damasco had truly forsaken her job, she would not have bothered to file a complaint for illegal dismissal against her employer and prayed for reinstatement. An employee who forthwith took steps to protect her layoff could not by any logic be said to have abandoned her work. As regards Sias allegation that Damasco committed serious misconduct or willful disobedience of lawful order in connection with her work, the same is not tenable. Even if Sia directed her to be assigned at his store in Metro Manila, her act of

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refusing to be detailed in Metro Manila could hardly be characterized a willful or intentional disobedience of her employers order. It was Sias order that appears to us whimsical if not vindictive. Reassignment to Metro Manila is prejudicial to Ms. Damasco, as she and her family are residing in Olongapo City. This would entail separation from her family and additional expenses on her part for transportation and food. Damascos reassignment order was unreasonable, considering the attendant circumstances. Petition is granted. ST. MICHAEL'S INSTITUTE vs. CARMELITA A. SANTOS G.R. No. 145280 December 4, 2001 DE LEON Facts: Petitioner St. Michael's Institute is an institute of learning. Carmelita Santos et.al. were regular classroom teachers. Respondent Santos began teaching at St. Michael's Institute in 1979 while respondents Magcamit and Rosarda joined its school faculty only in 1990. Their service with the school was abruptly interrupted when each of them was served a notice of termination of employment on 1993. The termination allegedly stemmed from an incident that occurred on August 10, 1993. On said date, a public rally was held at the town plaza of Bacoor, Cavite in the vicinity of petitioner school. The rally, organized and participated in by faculty members, parents and some students of petitioner school, was, among others, aimed at calling the attention of the school administration to certain grievances relative to substandard school facilities and the economic demands of teachers and other employees of St. Michael's Institute. Blanco, as school principal, sent each of the respondents identical memoranda requiring them to explain their acts of leading the aforementioned rally of students outside the school premises; preventing students from attending classes; and denouncing the school authority in their speeches. Respondents denied all the accusations attributed to them, and explained that

they were invited by the core group of parents and merely joined them in expressing their sentiments. After investigation, the Investigating Committee found respondents to have led and actively participated in the said rally and consequently recommended their termination from service. Respondents were sent letters informing them of their termination from the service "for serious disrespect" to their superior, petitioner Fr. Victorino, and for "serious misconduct that resulted in the disruption of classes." In the illegal dismissal case, the Labor Arbiter declared that there was just cause for the dismissal of the respondents' complaints since they were guilty of dereliction of duty, which was reversed by NLRC. Issue: WON private illegally dismissed. Ruling: In termination of employment disputes that the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. Evidence must be clear, convincing and free from any inference that the prerogative to dismiss an employee was abused and unjustly used by the employer to further any vindictive end. Misconduct 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. As a just cause for termination, the misconduct must be serious, which implies that it must be of such grave and aggravated character and not merely trivial or unimportant. On the other hand, disobedience, as a just cause for termination, must be willful or intentional. Willfulness is characterized by a wrongful and perverse mental attitude rendering the employee's act inconsistent with proper subordination. Not every case of insubordination or willful disobedience by an employee of a lawful work-connected order of the employer is reasonably penalized with dismissal. There must be respondents were

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reasonable proportionality between, on the one hand, the willful disobedience by the employee and, on the other hand, the penalty imposed therefor. In the case at bench, evidence is wanting on the depravity of conduct, and willfulness of the disobedience on the part of the respondents. Absence of one day of work to join a public rally cannot be of such great dimension as to equate it with an offense punishable with the penalty of dismissal. The reinstatement of the respondents is, thus, just and proper. Petition is denied. PHILIPPINE AEOLUS AUTOMOTIVE UNITED C CORP vs. NLRC and ROSALINDA. CORTEZ G.R. No. 124617. April 28, 2000 BELLOSILLO Facts: Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a domestic corporation, petitioner Francis Chua is its President while private respondent Rosalinda C. Cortez was a company nurse of petitioner corporation until her termination. A memorandum was issued by Ms. Myrna Palomares, Personnel Manager of petitioner corporation, addressed to private respondent Cortez requiring her to explain within 48 hours why no disciplinary action should be taken against her (a) for throwing a stapler at Plant Manager William Chua, her superior, and uttering invectives against him; (b) for losing the amount of P1,488.00 entrusted to her by Plant Manager Chua to be given to Mr. Fang of the CLMC Department; and, (c) for asking a co-employee to punch-in her time card thus making it appear that she was in the office in the morning of 6 September 1994 when in fact she was not. The memorandum however was refused by private respondent although it was read to her and discussed with her by a co-employee. She did not also submit the required explanation, so that while her case was pending investigation the company placed her under preventive suspension for 30 days. While Cortez was still under preventive suspension, another

memorandum was issued by petitioner giving her 72 hours to explain why no disciplinary action should be taken against her for allegedly failing to process the ATM applications of her 9 co-employees with the Allied Banking Corporation. The memorandum was also refused to receive by private respondent. A third memorandum was issued to private respondent, this time informing her of her termination from the service on grounds of gross and habitual neglect of duties, serious misconduct and fraud or willful breach of trust. Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, which was reversed by NLRC. Issue: WON private illegally dismissed. Ruling: The Labor Code provides specific grounds by which an employer may validly terminate the services of an employee, which grounds should be strictly construed since a persons employment constitutes "property" under the context of due process of law and, as such, the burden of proving that there exists a valid ground for termination of employment rests upon the employer. Likewise, in light of the employee's right to security of tenure, where a penalty less punitive than dismissal will suffice, whatever missteps may have been committed by labor ought not to be visited with a consequence so severe. The Supreme Court, in a litany of decisions on serious misconduct warranting dismissal of an employee, has ruled that for misconduct or improper behavior to be a just cause for dismissal (a) it must be serious; (b) must relate to the performance of the employees duties; and, (c) must show that the employee has become unfit to continue working for the employer. In the case at bench, the act of private respondent in throwing a stapler and uttering abusive language upon the person of the plant manager may be respondent was

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considered, from a lay man's perspective, as a serious misconduct. However, in order to consider it a serious misconduct that would justify dismissal under the law, it must have been done in relation to the performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of, under the circumstances they were done, did not in any way pertain to her duties as a nurse. Her employment identification card discloses the nature of her employment as a nurse and no other. Also, the memorandum informing her that she was being preventively suspended pending investigation of her case was addressed to her as a nurse. Likewise, the act of private respondent in asking a coemployee to punch-in her time card, although a violation of company rules, likewise does not constitute serious misconduct. On alleged failure to process the ATM applications of her 9 co-employees with the Allied Banking Corporation, the truth is that the money entrusted to private respondent was in fact deposited in the respective accounts of the employees concerned, although belatedly. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. The negligence, to warrant removal from service, should not merely be gross but also habitual. Likewise, the ground "willful breach by the employee of the trust reposed in him by his employer" must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may fairly be made to rest. All these requirements prescribed by law and jurisprudence are wanting in the case at bar. NLRC is affirmed.

SANTIAGO ALCANTARA vs. CA and THE PENINSULA MANILA G.R. No. 143397. August 6, 2002 KAPUNAN Facts: Petitioner Santiago Alcantara, Jr., an employee of respondent The Peninsula Manila. At the time of his dismissal, petitioner worked as Commis II of the Food and Beverage Department of the Peninsula. He was also a Director of the National Union of Workers in Hotels Restaurants. The controversy stems from a Memorandum issued by respondent Hotel prohibiting the union from using the union office from midnight until 6:00 in the morning. The union office was located in the hotel premises. On several occasions, petitioner and his companions were seen inside the union office from midnight until morning. The Hotel sent a memorandum to petitioner directing him to submit his written explanation within 24 hours from receipt thereof. Petitioner explained that the Memorandum prohibiting the use of the union office was inconsistent with the CBA and was necessarily ineffective. Petitioner argued that inasmuch as the Hotel operated 24 hours a day, the union office should be available whenever the union found it necessary. This was how the CBA had always been applied. Petitioner also pointed out that the charge against him did not pertain to his duties in the Hotel. He claimed he used the union office only during his breaks or when he was off duty. The Hotel sent petitioner a Notice of Termination for alleged willful and blatant refusal to comply with a lawful and valid issued by his employer. CA found that petitioner was legally dismissed on the ground of willful disobedience. Issue: WON dismissed. Ruling: Willful disobedience of the employers lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employees assailed conduct must petitioner was illegally

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have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority. It would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations, policies and procedures laid down by their employer by the simple expedient of formally challenging their reasonableness or the motives which inspired them, or to give the employees the power to suspend compliance with company rules or policies by requesting that they be first subject of collective bargaining. It would be well nigh impossible under these circumstances for any employer to maintain discipline in its establishment. In the case at bench, the subject Memorandum is not grossly oppressive. It is not patently contrary to law. While petitioner argues that its application was discriminatory the two employees found with him in the union room were not at all subjected to disciplinary action the Memorandum was not discriminatory on its face. Petitioners violation of his employers order, prior to its revocation, was therefore inexcusable. Nevertheless, petitioners behavior did not constitute the wrongful and perverse attitude that would sanction his dismissal. The surrounding circumstances indicate that petitioner was motivated by a his honest belief that the Memorandum was indeed unlawful and unreasonable. Previous practice allowed the use of the union office 24 hours a day. Viewed in this light, petitioners attitude can hardly be characterized as wrongful and perverse. While these circumstances do

not justify his violation of the regulation, they do not justify his dismissal either. Petition is granted. PHILIPPINE NATIONAL CONSTRUCTION CORP vs. ROLANDO MATIAS G.R. No. 156283 May 6, 2005 PANGANIBAN Facts: Rolando Matias was employed by Construction and Development Corp as Chief Accountant and Administrative Officer. During his employment with the company, various parcels of land situated at Don Carlos Bukidnon were placed in the names of certain employees as trustees for the purpose of owning vast tracts of land more than the limit a corporation can own which were primarily intended for CDCP agricultural businesses. By internal arrangement documents transferring back the properties to the corporation were executed. A land was registered in the name of Matias covered by OCT. In 1984, the loans of CDCP from various government entities were converted to equity thus making it a GOCC and the name of CDCP was changed to Philippine National Construction Corporation (PNCC). Under a new set up, PNCC offered a retrenchment program and Matias availed of the said program. In July 1992, two former CDCP employees, namely Reynaldo Tac-an and Luciano Tadena went to the house of Matias and brought with them duly accomplished documents and SPA for his signature and informed him that the lands in Bukidnon under his name with all the others were invaded by squatters, and that the said land were covered by CARP where Matias name was included in the list of landowners. Matias reluctantly signed the document and after six months, he signed an acknowledgment receipt of P100,000.00. The Register of Deeds cancelled the OCT originally registered in the name of Matias and issued a new TCT in the name of the Republic of the Philippines. Matias was rehired by PNCC as Project Controller in Zambales PMMA Project. Later, Matias was dismissed by PNCC on the ground of lost of trust and confidence. Petitioner alleges that

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respondent fraudulently breached its trust and confidence when, without its knowledge and consent, he disposed of the Bukidnon property; though actually belonging to petitioner, that property had purportedly been merely placed in trust under his name. Thereafter, he assigned the same property to petitioner, allegedly despite his full knowledge that the title had already been transferred -- with his active planning and participation -- to the Republic of the Philippines. Issue: WON private illegally dismissed. Ruling: It is a basic principle that in termination cases that the employer bears the burden of proving that the dismissal of the employee is for a just or an authorized cause. Failure to dispose of the burden would imply that the dismissal is not lawful, and that the employee is entitled to reinstatement, back wages and accruing benefits. Moreover, dismissed employees are not required to prove their innocence of the employers accusations against them. Under Article 282 of the Labor Code, loss of confidence must be based on "fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative." Ordinary breach does not suffice. A breach of trust is willful if it is done intentionally and knowingly without any justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or inadvertently. In the present case, petitioner invokes loss of trust and confidence as the ground for dismissing respondent. The allegations of petitioner are unsupported by substantial evidence or by established facts. It was more than 7 years after respondent had been separated from the employ of petitioner when two of his former coemployees at CDCP (petitioners predecessor) -- Reynaldo Tac-an and Luciano Tadena -- went to see him at his home in Quezon City, carrying accomplished documents and a SPA. They informed him that the pieces of land in respondent was

Bukidnon, including that which had been placed by petitioner in his name, were covered by CARP; and that he therefore had to sign the documents. Relying on their representations, he did as he had been told. Petitioner has not at any time denied or repudiated the acts of Tac-an and Tadena. Thus, private respondent cannot be faulted for presuming that both employees were acting on its behalf. Furthermore, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be so related to the performance of the duties of the dismissed employee as would show that he or she is unfit to continue working for the employer. Undeniably, the position of project controller -- the position of respondent at the time of his dismissal -- required trust and confidence, for it related to the handling of business expenditures or finances. However, his act allegedly constituting breach of trust and confidence was not in any way related to his official functions and responsibilities as controller. In fact, the questioned act pertained to an unlawful scheme deliberately engaged in by petitioner in order to evade a constitutional and legal mandate. Petition is denied. CARMELITA NOKOM vs. NLRC and RENTOKIL (PHILS.) G.R. No. 140043. July 18, 2000 DE LEON Facts: Petitioner Nokom was employed as a manager by private respondent Rentokil (Phils.) for its Healthcare Division. As manager, she was responsible for managing the Healthcare Division in accordance with the policies of Rentokil and she reported directly to the General Manager, Framie Ong-dela Luna. Private respondents Paul Stern and Russel Harris, Rentokils Area Director and Regional

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Finance Controller, respectively, received information that fictitious invoices were sent to Rentokil clients in the Healthcare Division whose contracts have already been terminated. The fictitious invoices were allegedly made to inflate the gross revenues of the Healthcare Division to make up for the shortfall in its target revenues for the year 1995. Because initial findings showed that petitioner Nokom, as Manager of the Healthcare Division, was involved in the anomaly, private respondents placed her on preventive suspension. Later on, it was found out that petitioner knew of the fraudulent activities which, as discovered by the new Finance Manager. Thereafter, Stern informed petitioner of the findings of their auditor. Petitioner admitted the irregularities and, in her written explanation as required under the notice of preventive suspension, petitioner told Stern that she had no explanation and said that she was leaving her fate up to management. During the hearing conducted by Rentokil management, petitioner failed to appear despite notice. After the investigation, it was found out that petitioner was aware, tolerated and in fact participated in the production of fictitious invoices. Thus, petitioners employment was terminated. NLRC dismissed the complaint for illegal dismissal for being without merit. Issue: WON Nokom was illegally dismissed. Ruling: In a decided case, it has been held that the guidelines for the application of the doctrine of loss of confidence are: a..loss of confidence should not be simulated; b.. it should not be used as a subterfuge for causes which are improper, illegal or unjustified; c. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d..it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. In the case at bench, petitioner was holding a managerial position with Rentokil. As manager of the Healthcare Division, petitioner was duty-bound to

perform her functions in accordance with company policies. During her incumbency, fraudulent activities transpired for which she must be held accountable. Petitioner has not presented any persuasive evidence or argument to convince us otherwise. True it is that an employer enjoys a wide latitude of discretion in the promulgation of company rules and regulations that at times become the root of abuse by management. In this case, however, the policies of private respondent Rentokil are fair and reasonable, the decision to terminate the employment of petitioner was justified and appropriate in the light of the acts committed by her, and considering that the requirements of the constitutional right to due process were duly accorded to petitioner. Petition is denied. b.iii. AUTHORIZED CAUSES 1. Installation of Labor-Saving Devices; The installation of labor-saving devices must be to effect economy and efficiency in the method of production. Requisites for validity: 1. must be done in good faith; 2. purpose is to save on cost, enhance efficiency and other justifiable economic reasons; 3. no other option available to the employer; 4. reasonable and fair standards or criteria in selecting who to terminate; 5. compliance with the 30-day notice requirement; and 6. payment of separation pay. 2. Redundancy; Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise; a position is redundant when it is superfluous. Requisites for validity: 1. written notice on both the affected employees and DOLE; 2. payment of separation pay equivalent to at least 1 month pay or to at least month pay for every year of service, whichever is higher;

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3. good faith in abolishing the redundant positions; and 4. fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly. 3. Retrenchment Retrenchment- it is an act of the employer of dismissing employees because of losses in the operation of a business lack of work and considerable reduction of the volume of his business. Requisites for validity: 1. reasonably necessary and likely to prevent business losses; 2. written notice both to the employees and DOLE; 3. separation pay equivalent to 1 month pay or at least month pay for every year of service, whichever is higher; 4. must be done in good faith; 5. fair and reasonable criteria in ascertaining who would be dismissed. Retrenchment is an authorized cause for termination of employment which the law accords an employer who is not making good in its operations in order to cut back on expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to save a financially ailing business establishment from eventually collapsing. Conditions under which an employer may retrench: 1. substantial loss which are not merely de minimis in extent; 2. imminence of such substantial losses; 3. retrenchment would effectively prevent the expected and additional losses; 4. the alleged losses and expected losses must be proven by sufficient and convincing evidence. 4. Closing or cessation of operation of the establishment or undertaking; To abolish means to do away with, to annul, abrogate or destroy

completely. It denotes an intention to do away with the office wholly and permanently. A valid abolition of offices is neither removal nor separation of the incumbents. No dismissal or separation arises because the position itself ceases to exists (Tan vs. DPWH, GR No. 143289, November 11, 2004). Requisites for validity: 1. must be in good faith; 2. purpose should not be to circumvent the provisions of the Labor Code; 3. no other option available to the employer except to close or cease operations; 4. notice requirement; 5. separation pay. Obligations of Transferee in case of Sale in Good Faith- There is no law which requires the purchaser to absorb the employees of the selling company. As there is no such law, the most that the purchasing company may do, for purposes of public policy and social justice,, is to give preference to the qualified separated employees of the selling company who in its judgment are necessary in the continued operation of the business establishment (MDII Supervisors Association vs. Presidential Assistant on Legal Affairs, 79 SCRA 40). Sale in Bad Faith- Although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the employees of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the parties is clothed with bad faith. In case of Merger- A succession of employment rights and obligations has occurred. The principle that employment contract is in personam and binding only between the parties applies only when the transferee is an entirely new corporation with a distinct personality from the integrating firms and NOT where the transferee was found to be merely an alter ego of the different merging firms. 5. Disease

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Requisites for validity: 1. employee is suffering from a disease; 2. his continued employment is either: (1) prohibited by law; (2) prejudicial to his health; or (3) prejudicial to the health of his co-employees; 3. certification by a competent public health authority that the disease is incurable within 6 months; 4. notice of termination; 5. separation pay of at least 1 month salary or to month salary for every year of service, whichever is greater, a fraction of at least 6 months shall be considered 1 whole year. CASES: NDC-GUTHRIE PLANTATIONS vs. NLRC and EDWIN M. CRUZ et.al G.R. No. 110740 August 9, 2001 DE LEON Facts: Petitioner companies are both government-controlled corporations, 60% of their stocks being owned by the National Development Corporation. They were incorporated in the early 1980's to develop, operate and maintain integrated palm projects in Agusan del Sur. Pursuant to their purpose clause, NGPI and NGEI hired hundreds of farm workers to establish and maintain their respective plantations as well as several supervisors to oversee and superintend their workers. Kumar Das was the designated general manager of petitioner companies at the time of the supposed illegal dismissal. NGPI discovered that it was sustaining tremendous losses which threatened to further upset its precarious financial condition. In a desperate attempt to reverse its fortune and prevent its coffers from further depletion, NGPI terminated the services of 72 field workers. Still, the company was confronted with an audit report prepared by COA reflecting losses. Faced with mounting losses, NGPI further terminated the employment of 49 field workers, followed by another 158 farm hands. With this as backdrop, several employees of petitioner companies

bonded together and formed the NDCGUTHRIE Union. Petitioner companies notified the DOLE of their financial condition and their decision to retrench employees numbering 120. Subsequently, petitioner companies sent notices to 17 of their office and supervisory employees advising them that in view of the companies' financial problems, they would be retrenched from their employment. Believing that their dismissal was resorted to because of their union activities and hence, in violation of their rights to selforganization and to collective bargaining, the said 17 employees who were laid off filed with the Labor Arbiter a Complaint for illegal dismissal and unfair labor practice against petitioner companies and petitioner Kumar Das. NLRC ruled in favor of private respondents. Issue: WON private illegally dismissed. Ruling: As the retrenchment programs undertaken by petitioner companies were purely business decisions properly within the reasonable exercise of management prerogative, the NLRC cannot delve into their wisdom and soundness. Indeed, management cannot be denied recourses to retrenchment if it can successfully prove the existence of the following factors: (a) substantial losses which are not merely de minimis in extent; (b) imminence of such substantial losses; (c) retrenchment would effectively prevent the expected additional losses; and, (d) alleged losses and expected losses must be proven by sufficient and convincing evidence. In the case at bench, these guidelines were faithfully observed by petitioner companies. However, notwithstanding the propriety of the retrenchment programs, petitioner companies are not excused from complying with the required written notice to the affected employees and DOLE at least one month before the intended date of termination. In this case, it is respondents were

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undisputed that petitioner companies informed both the retrenched employees and DOLE of the impending retrenchment. The requirement of law mandating the giving of notices was intended not only to enable the employees to look for other employment and therefore ease the impact of the loss of their jobs and the corresponding income, but, more importantly, to give the DOLE the opportunity to ascertain the verity of the alleged authorized cause of termination. Accordingly, inasmuch as private respondents' separation from service was both substantively and procedurally just, petitioner companies should only be held liable for separation pay and the proportionate 13th month pay. Petition is granted. EDGAR AGUSTILO vs. CA and SAN MIGUEL CORP G.R. No. 142875 September 7, 2001 MENDOZA Facts: Petitioner Edgar Agustilo was hired by respondent San Miguel Corporation (SMC) as a temporary employee at its Mandaue Brewery in Mandaue, Cebu. On October 1, 1979, he was made permanent and designated as a safety clerk. He was transferred to the Engineering Department of the SMC Mandaue Brewery as an administrative secretary. SMC Mandaue Brewery adopted a policy that managers would no longer be assigned secretaries and that only director level positions may be given secretaries. As a result, petitioner's position as administrative secretary was abolished and he was transferred to the company's Plant Director's Office-Quality Improvement Team. Petitioner was informed that 584 employees, including him, would be retrenched due to the modernization program of the company. Petitioner was told that his services would be terminated and that he would be paid his benefits 30 days after he was cleared of all accountabilities. SMC notified the DOLE of its modernization program. Petitioner then filed a complaint against respondents for

unfair labor practice, illegal dismissal, and payment of separation pay. The Labor Arbiter dismissed the complaint. Issue: WON dismissed. Ruling: Art. 283 of the Labor Code provides: The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title xxx. In the case at bench, petitioner was not constructively dismissed but his services was terminated on the ground of the installation of labor saving devices by SMC. As stated in the notice of termination sent to petitioner the PDO-QIT GROUP has been abolished after a thorough study. Consequently, petitioners position therein has also been abolished. As stated by the Court of Appeals: Private respondent demonstrated before the Labor Arbiter by clear and convincing evidence that the Mandaue plant where petitioners used to work had instituted a modernization program. The operations of which are "all automated using microprocessor and electronic process controllers and instrumentation systems through intelligent interfacing with Siemens Industrial computers." All of these hightechnology innovations, at the cost of 2.6 billion pesos, truly render the functions of the Plant Director's Office Quality Control Unit, where private respondent was transferred after his post as Administrative Secretary to the plant manager was validly abolished, upon management prerogative that the same "did not add value to the organization." Petition is denied. NATIONAL FEDERATION OF LABOR vs. NLRC and PATALON COCONUT ESTATE petitioner was illegally

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G.R. No. 127718 March 2, 2000 DE LEON Facts: Petitioners are bona fide members of the National Federation of Labor (NFL), a legitimate labor organization duly registered with DOLE. They were employed by private respondents Charlie Reith and Susie Galle Reith, general manager and owner, respectively, of the 354-hectare Patalon Coconut Estate. Patalon Coconut Estate was engaged in growing agricultural products and in raising livestock. In 1988, Congress enacted the Comprehensive Agrarian Reform Law which mandated the compulsory acquisition of all covered agricultural lands for distribution to qualified farmer beneficiaries under the so-called CARP. Pursuant to R.A. No. 6657, the Patalon Coconut Estate was awarded to the Patalon Estate Agrarian Reform Association (PEARA), a cooperative accredited by DAR, of which petitioners are members and co-owners. As a result of this acquisition, private respondents shut down the operation of the Patalon Coconut Estate and the employment of the petitioners was severed. Petitioners did not receive any separation pay. The cooperative took over the estate. Petitioners filed complaints praying for their reinstatement with full backwages on the ground that they were illegally dismissed. The petitioners were represented by their labor organization, the NFL. NLRC ruled that petitioners were not illegally dismissed. Hence, this petition. Issue: WON dismissed. Ruling: Under Article 283 of the Labor Code the employer may also terminate the employment of any employee due xxx closing or cessation of operation of the establishment or undertaking xxx. In cases of xxx closures or cessation of operations of establishment or undertaking not due to serious business petitioners were illegally

losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year. It is clear that Article 283 of the Labor Code applies in cases of closures of establishment and reduction of personnel. The peculiar circumstances in the case at bar, however, involves neither the closure of an establishment nor a reduction of personnel as contemplated under the aforesaid article. When the Patalon Coconut Estate was closed because a large portion of the estate was acquired by DAR pursuant to CARP, the ownership of that large portion of the estate was precisely transferred to PEARA and ultimately to the petitioners as members thereof and as agrarian lot beneficiaries. Hence, Article 283 of the Labor Code is not applicable to the case at bench. Even assuming, arguendo, that the situation in this case were a closure of the business establishment called Patalon Coconut Estate of private respondents, still the petitioners/employees are not entitled to separation pay. The closure contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on the part of the employer to close the business establishment as may be gleaned from the wording of the said legal provision that "The employer may also terminate the employment of any employee due to xxx. The use of the word "may," in a statute, denotes that it is directory in nature and generally permissive only. In other words, Article 283 of the Labor Code does not contemplate a situation where the closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. In this case, the Patalon Coconut Estate was closed down because a large portion of the said estate was acquired by the DAR pursuant to the CARP. Hence, the closure of the Patalon Coconut Estate was

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not effected voluntarily by private respondents who even filed a petition to have said estate exempted from the coverage of RA 6657. Petition is denied. c. Procedure of Termination (Procedural Due Process of Dismissal) i. Notice and Hearing a. For Just Causes: 1. Written Notice- a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; 2. Hearing- A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and 3. Written Notice of Termination- A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. b. For Authorized Causes: The requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the DOLE at least 30 days before effectivity of the termination, specifying the ground or grounds for termination. NOTES: When termination of employment is brought by the failure of an employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.

When termination is brought about by the completion of the contract or phase thereof, no prior notice is required. ii. Burden of Proof The employer has the burden of proving the lawfulness of his employees dismissal. The validity of the charge must be clearly established in a manner consistent with due process. iii. Preventive Suspension When there is an imminent threat to the lives and properties of the employer; his family and representatives as well as the offenders co-workers by the continued service of the employee, then he may be placed under preventive suspension pending his investigation. Preventive suspension should not last for more than 30 days. The employee should be made to resume his work after 30 days. It can be extended provided the employees wages are paid after the 30 day period. CASES: VH MANUFACTURING vs. NLRC and HERMINIO C. GAMIDO G.R. No. 130957 January 19, 2000 DE LEON Facts: Private respondent was employed in petitioner's, business of manufacturing liquefied petroleum gas (LPG) cylinders. He served as a quality control inspector with the principal duty of inspecting LPG cylinders for any possible defects and earning P155.00 a day. His service with the company was abruptly interrupted on February 14, 1995, when he was served a notice of termination of his employment. His dismissal stemmed from an incident wherein petitioner's company President, Alejandro Dy Juanco, allegedly caught private respondent sleeping on the job. On that same day, private respondent was asked through a written notice to explain why no disciplinary action should be taken against him for his violation of Company Rule 15-b which provides for a penalty of

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separation for sleeping during working hours. Without delay, private respondent replied in a letter which reads: Sir, ipagpaumanhin po ninyo kung nakapikit ako sa aking puwesto dahil hinihintay ko po ang niliha hi Abreu para i quality pasensiya na po kung hindi ko po namalayan ang pagdaan ninyo dahil maingay po ang painting booth. Notwithstanding his foregoing reply, he was terminated. Feeling aggrieved, private respondent initially instituted a criminal suit for Estafa, for alleged withholding of his salary, against the company President. Said complaint was dismissed for improper forum. He then filed a complaint for illegal. Labor Arbiter declared that private respondent's dismissal is anchored on a valid and just cause and the latter's contention of denial of due process as devoid of merit. NLRC reversed the Labor Arbiter and ordered herein petitioner to reinstate private respondent with full backwages less one-month pay. Issue: WON private illegally dismissed. Ruling: respondent was

and response to petitioner's allegation which he reiterated in his written reply. Moreover, the dismissal meted out on private respondent for allegedly sleeping on the job, under the attendant circumstances, appears to be too harsh a penalty, considering that he was being held liable for first time, after 9 long years of unblemished service, for an alleged offense which caused no prejudice to the employer, aside from absence of substantiation of the alleged offense. The authorities cited by petitioner are also irrelevant for the reason that there is no evidence on the depravity of conduct, willfulness of the disobedience, or conclusiveness of guilt on the part of private respondent. Neither was it shown that private respondent's alleged negligence or neglect of duty, if any, was gross and habitual. Thus, reinstatement is just and proper. Petition is dismissed. MARICALUM MINING CORP vs. ANTONIO DECORION G.R. No. 158637 April 12, 2006 TINGA Facts:

While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. In the case at bench, petitioner's claim that private respondent slept on the job on February 10, 1995 was not substantiated by any convincing evidence other than the bare allegation of petitioner. The report of Ronaldo M. Alvarez, Acting Quality Control Department Head of petitioner corporation, on the circumstances which ultimately served as basis for the termination of private respondent's employment, did not confirm the alleged violation by private respondent of the pertinent Company Rule 15-b. The report merely stated private respondent's denial

Antonio Decorion was a regular employee of Maricalum Mining who started out as a Mill Mechanic assigned to the Concentrator Maintenance Department and was later promoted to Foreman I. The Concentrator Maintenance Supervisor called a meeting which Decorion failed to attend as he was then supervising the workers under him. Because of his alleged insubordination for failure to attend the meeting, he was placed under preventive suspension on the same day. He was also not allowed to report for work the following day. A month after, Decorion was served a Notice of Infraction and Proposed Dismissal to enable him to present his side. He submitted to the Personnel Department his written reply to the notice. A grievance meeting was held upon Decorions request, during which he manifested that he failed to attend the meeting on April 11, 1996 because he was then still assigning work to his men. He maintained that he has not committed any

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offense and that his service record would show his efficiency. Decorion filed NLRC a complaint for illegal dismissal. Maricalum Mining insists that Decorion was not dismissed but merely preventively suspended. Petitioner contends that constructive dismissal occurs only after the lapse of more than 6 months from the time an employee is placed on a "floating status" as a result of temporary preventive suspension from employment. Thus, it goes on to argue, since Decorion was suspended for less than 6 months, his suspension was legal. Issue: WON private responded was merely suspended from work. Ruling: Under the IRR of Labor Code, The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or his co-workers. No preventive suspension shall last longer than thirty (30) days xxx. The Rules are explicit that preventive suspension is justified where the employees continued employment poses a serious and imminent threat to the life or property of the employer or of the employees co-workers. Without this kind of threat, preventive suspension is not proper. In this case, Decorion was suspended only because he failed to attend a meeting called by his supervisor. There is no evidence to indicate that his failure to attend the meeting prejudiced his employer or that his presence in the companys premises posed a serious threat to his employer and co-workers. The preventive suspension was clearly unjustified. What is more, Decorions suspension persisted beyond the 30-day period allowed by the IRR. A preventive suspension which lasts beyond the maximum period allowed by the Implementing Rules amounts to constructive dismissal. Similarly, from the time Decorion was placed under preventive suspension up to the time a

grievance meeting was conducted, 55 days had already passed. Another 48 days went by before he filed a complaint for illegal dismissal. Thus, at the time Decorion filed a complaint for illegal dismissal, he had already been suspended for a total of 103 days. Maricalum Minings contention that there was as yet no illegal dismissal at the time of the filing of the complaint is evidently unmeritorious. Decorions preventive suspension had already ripened into constructive dismissal at that time. While actual dismissal and constructive dismissal do take place in different fashion, the legal consequences they generate are identical. Decorions employment may not have been actually terminated in the sense that he was not served walking papers but there is no doubt that he was constructively dismissed as he was forced to quit because continued employment was rendered impossible, unreasonable or unlikely by Maricalum Minings act of preventing him from reporting for work. Petition is denied. d. Termination by Employee i. Resignation Resignation- is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and, that he has no other choice but to disassociate himself from his employment. Resignation is withdrawable even if the employee has called it irrevocable. But after it is accepted or approved by the employer, its withdrawal need the employers consent. a. Requisites for Termination without Just Cause: 1. written notice of the termination (resignation letter); 2. service of the resignation letter to the employer at least 1 month in advance. NOTE: An employer upon whom no such notice was served may hold the employee liable for damages. b. Termination with Just Cause:

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No written notice (resignation letter) is necessary in the following cases: 1. serious insult by the employer or his representative on the honor and person of the employee; 2. inhuman and unbearable treatment accorded the employee by the employer or his representative; 3. commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of the family; and 4. other causes analogous to any of the foregoing. e. Constructive Dismissal This refers to an involuntary resignation resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. An employee is likewise deemed constructively dismissed where his status is changed from regular to casual. An unwarranted transfer or demotion of an employee, or other unjustified action prejudicial to the employee may give rise to a complaint for constructive dismissal. f. When Employment not Deemed Terminated (Art. 286) The bona fide suspension of the operation of a business or undertaking for a period exceeding 6 months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than 1 month from the resumption of operations of his employer or from his relief from the military or civic duty. Article 283 speaks of a permanent retrenchment as opposed to a

temporary lay-off. There is no specific provision of law which treats of a temporary retrenchment or lay-off. To remedy this situation or fill the hiatus, Article 286 may be applied but only by analogy to set a specific period that employees may remain temporarily laid-off or in floating status. 6 months is the period set by law that the operation of a business of the employees concerned. The temporary lay-off wherein the employees likewise cease to work should also not last long than 6 months. After 6 months, the employees should either be recalled to work or permanently retrenched following the requirements of the law. g. Consequence Termination i. Separation Pay of

General Rule- If there is valid


cause to terminate an employee, no separation pay need by paid. Exceptions: 1. Article 283, Labor Code Installation of labor saving device and redundancy- 1 month pay or moth pay for every year of service, whichever is higher Retrenchment to prevent losses and closure or cessation of operation or establishment or undertaking not due to serious business losses or financial reverses- 1 month pay or month pay for every year of service, whichever is higher. If due to severe financial losses, no separation pay. 2. Article 284, Labor Code Disease- 1 month salary or month salary for every year of service, whichever is higher. A fraction of at least 6 months shall be considered 1 whole year. 3. Discerning Compassion Doctrine Separation pay shall be allowed as a measure of social justice for instances where the employee is validly dismissed for causes other that serious misconduct or those reflecting on his moral character

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(i.e. Employee was found to have demanded and received money in consideration for promise to facilitate approval of telephone line application). 4. Antipathy and Antagonism Reinstatement is no longer possible Strained relations in order that is may justify award of separation pay in lieu of reinstatement with backwages, should be of such, that they are so compelling and so serious in character, that the continued employment has become inconsistent with peace and tranquility which is an ideal atmosphere in every workplace. 5. Even if an employee resigns, he shall be given a separation pay if there is a company policy to that effect. NOTE: Financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. ii. Computation of Separation Pay Includes not just the basic salary but also the regular allowances the employee has been receiving. However, commissions are not included in such base figure. Effect- Receipt- An employee who received his separation pay is not barred from contesting the legality of their dismissal. The acceptance of those would not amount to estoppel. iii. Backwages

Backwages- the relief given to an


employee to compensate him for lost earnings during the period of his dismissal. An employee who is unjustly dismissed from work shall be entitled to full backwages, inclusive of allowances, and to his other benefits or their monetary equivalents computed from the time his compensation was withheld up to the time of his actual reinstatement.

Backwages in general are granted on grounds of equity which a worker has lost due to his illegal dismissal. As a general rule, an employee is entitled to backwages only where his dismissal is due to the unlawful act of the employer to the latters bad faith. While generally, an order of reinstatement carries with it an award of backwages, the court may not only mitigate, but absolve the employer from liability for backwages where good faith is evident. Separation Pay vs. BackwagesSeparation pay is the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. Backwages, on the other hand, represent compensation that should be earned but not controlled because of the unjust dismissal. The basis of computing the two are different, the separation pay is being computed usually on the basis of the length of the employees service and the backwages are computed from the actual period when he was unlawfully prevented from working. Inclusions to Backwages: 1. transportation and emergency allowance; 2. vacation or service incentive leave and sick leave; 3. 13th month pay. NOTE: Facilities such as uniforms, shoes, helmets and ponchos should not be included in the computation of backwages because said item are given free to be used only during official tour of duty and not for private or personal use. Circumstances that prevent award of backwages: 1. death of the employee; 2. physical and mental incapacity 3. business reverses; 4. closure of business; 5. reinstatement of dismissed employee confinement in jail. iv. Reinstatement

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Reinstatement- is a restoration to
a state which on e has been removed or separated. It is the turn to the position from which he was removed and assuming again the functions of the office already held. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position more or less of a similar nature as the one previously. Forms of Reinstatement: 1. Actual or Physical Reinstatementthe employee shall be admitted back to work. 2. Payroll Reinstatementthe employee is merely reinstated in the payroll. Q. May a court order the reinstatement of a dismissed employee even if the prayer of the complaint did not include such relief? A. Yes, so long as there is a finding that the employee was illegally dismissed, the court can order the reinstatement of an employee even if the complaint does not include a prayer for reinstatement, unless, of course, the employee has waived his right to reinstatement. By law, an employee who is unjustly dismissed is entitled to reinstatement, among others. The mere fact that the complaint did not pray for reinstatement will not prejudice the employee, because technicalities of law and procedures are frowned upon in labor proceedings (General Baptist Bible College vs. NLRC, 219 S 549). Q. What happens if there is an order of reinstatement but the position is no longer available? A. The employee should be given a substantially equivalent position. If no substantially equivalent position is available, reinstatement should not e ordered because that would in effect compel the employer to do the impossible. In such a situation, the employee should merely be given separation pay consisting of one month salary for every year of service. Circumstances when company may not reinstate despite order of reinstatement: 1. Transfer of Business OwnershipThere is no law requiring a

2. 3. 4. 5.

purchasing corporation to absorb the employees of the selling corporation. A fortiori, reinstatement of unjustly dismissed employees CANNOT be enforced against the new owner UNLESS there is an express agreement on the assumption of liabilities by the purchasing corporation; Reinstatement is rendered impossible due to abolition of the position; When the business has closed down; Physical incapacity of the employee; and Doctrine of Strained RelationsWhen the employee can no longer trust the employee and vice-versa, reinstatement could not effectively serve as a remedy. This doctrine only applies to positions which require trust and confidence. Under the circumstances where the employment relationship has become so strained to preclude a harmonious working relationship and that all hopes at reconciliation are nil after reinstatement, it would be more beneficial to accord the employee backwages and separation pay. v. Damages

Moral damages are recoverable in


dismissal cases only where the dismissal was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy. Exemplary damages in dismissal cases may be awarded only if the dismissal was effected in wanton, oppressive or malevolent manner. vi. Quitclaims

Generally, quitclaims are commonly


frowned upon for being contrary to public policy, there are, however, legitimate waivers that represent a voluntary and reasonable settlement of a workers claim which should be

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respected by the courts as the law between the parties. Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. Not all quitclaims are per se invalid or against policy, except: (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face; in these cases, the law will step in to annul the questionable transaction. Requisites for Recovery of Wages, Simple Money Claims and Other Benefits: 1. The aggregate money claim of each employee or house helper does not exceed P5K. 2. The claim is presented by an employee or person employed in domestic or household service or househelper. 3. The claim arises from ER-EER 4. The claimant does not seek reinstatement. NOTE: In the absence of any of the requisites, it is the Labor Arbiter who shall have exclusive jurisdiction over claims arising from employer-employee relations, except claims for employees compensation, SSS, Philihealth and Maternity benefits. The proceedings before the Regional Office shall be summary and non-litigous in nature. The RD or any of his duly authorized hearing officer is empowered through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interests. Article 292. Institution of Money Claims- Money claims specified in Article 291 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 employee compensation cases which shall be processed and determined strictly in accordance with the pertinent provisions of the Labor Code. Worker Preference in case of Bankruptcy (Art. 110): PrincipleWorkers shall enjoy firs preference as regards their unpaid wages and other monetary claims, ay provision of law to the contrary notwithstanding. Just establishes a preference and not a lien; Applicable only to ordinary preferred credit, hence, must yield to special preferred credits e.g. secure creditors. This Article did not sweep away the overriding preference accorded under the scheme of the Civil Code to tax claims of the government. Conditions sine qua non to the operation of the preference accorded to workers under Art. 110: 1. formal declaration of insolvency or bankruptcy 2. general judicial liquidation proceedings of the employers business 3. filing of claims by workers The worker preference is not applicable in case the employer is under rehabilitation. Art. 110 covers not only unpaid wages but also all other monetary claims. Attorneys Fees (Art. 111): a. In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to 10% of the amount of wages recovered. b. It shall be unlawful for any person to demand

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or accept, in any judicial or administrative proceedings for the recovery of the wages, attorneys fees which exceed 10% of the amount of wages recovered. Attorneys fees presupposes attorney-client relationship. Any agreement on such other provisions of the CBA made within 6 months after the date of expiry of the CBA is subject to automatic retroaction to the day immediately following such date of expiry. CASES: MOBILE PROTECTIVE & DETECTIVE AGENCY vs. ALBERTO OMPAD G.R. No. 159195 May 9, 2005 PUNO Facts: Respondent alleged that he was employed by the Agency as security guard in January 1990 and was, since then, detailed to its various clients. He claimed having worked 12 hours a day, even during rest days and holidays, without receiving overtime pay, rest day pay, holiday pay, service incentive leave pay and 13th month pay. Sometime in June 1997, respondent inquired from the project manager of the Agency's client, Manila Southwoods, if the latter had already paid their backwages to the Agency. When petitioners found out about his query, respondent was allegedly relieved from his post and never given another assignment. Petitioners allegedly promised that they would pay respondent his money claims provided he signs a resignation letter. He was also told to copy in his handwriting the same resignation letter. As he needed the money, he complied. Thereafter, petitioners would give him only the meager amount of P5,000.00, which he rejected. Respondent filed a complaint for illegal dismissal and prayed for reinstatement with backwages or backwages with separation pay and money claims. Petitioners denied respondent's allegations and claimed that respondent was not dismissed but

resigned as evidenced by another resignation letter signed by respondent. Issue: WON respondent has resigned. Ruling: As a rule quitclaims, waivers or releases are looked upon with disfavor and are commonly frowned upon as contrary to public policy and ineffective to bar claims for the measure of a worker's legal rights. In this case, the Supreme Court sustained the findings of CA and NLRC that the two resignation letters are not resignation letters but a bare reading of their content would reveal that they are in the nature of a quitclaim, waiver or release. They were written in a language obviously not of respondent's and "lopsidedly worded" to free the Agency from liabilities. As held by CA: "When the first resignation letter was a pro forma one, entirely drafted by the petitioner Agency for the private respondent to merely affix his signature, and the second one entirely copied by the private respondent with his own hand from the first resignation letter, voluntariness is not attendant." Moreover, it is a rule that resignation is difficult to reconcile with the filing of a complaint for illegal dismissal. Hence, the finding that respondent's resignation was involuntary is further strengthened by the fact that respondent filed the instant case the day after the alleged tender of resignation. Petition is dismissed. LITONJUA GROUP OF COMPANIES vs. TERESITA VIGAN G.R. No. 143723 June 28, 2001 GONZAGA Facts: Respondent Teresita Vigan alleged that she was hired by the Litonjua Group of Companies as telex operator. Later, she was assigned as accounting and payroll clerk under the supervision of Danilo Litonjua. She had been performing well until 1995, when Danilo Litonjua who was already naturally a very ill-tempered, ill-

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mouthed and violent employer, became more so due to business problems. In fact, a complaint letter was sent by the Litonjua Employees to the father and his junior regarding the boorishness of their kin Danilo Litonjua but apparently the management just glossed over this. Danilo Litonjua became particularly angry with Vigan and threw a stapler at her when she refused to give him money upon the instructions of Eddie Litonjua. From then on, Danilo Litonjua had been rabid towards her and even threatened to hit her for some petty matters. Danilo Litonjua would order the security guards to forcibly eject her or prevent her entry in the office premises whenever he was angry. The incidents prompted Vigan to write Danilo Litonjua letters asking why she was treated so and what was her fault. She suspected that Danilo Litonjua wanted her out for he would not let her inside the office such that even while abroad he would order the guards by phone to bar her. She pleaded for forgiveness or at least for explanation but it fell on deaf ears. Later, Danilo Litonjua changed tack and charged that Vigan had been hysterical, emotional and created scenes at the office. He even required her to secure psychiatric assistance, but despite proof that she was not suffering from psychosis or organic brain syndrome as certified to by a Psychiatrist of Danilo Litonjuas choice, still she was denied by the guards entry to her work upon instructions again of Danilo Litonjua. Left with no alternative, Vigan filed this case for illegal dismissal. Labor Arbiter rendered his decision finding Vigan diseased and unfit for work under Article 284 of the Labor Code and awarded the corresponding separation pay. CA ruled that respondent was illegally dismissed. Issue: WON respondent is entitled to damages and attorneys fees. Ruling: The Supreme Court sustained the findings of CA that respondent Vigan did not abandon her job but was illegally dismissed. In Vigans letter addressed to petitioner Danilo Litonjua, respondent

Vigan had complained of petitioner Danilos inhumane treatment in barring her from entering her workplace. Notwithstanding the fact the she was refused entrance to her workplace, respondent Vigan, to show her earnest desire to report for work, would sneak her way into the premises and punched her time card but she could not resume work as the guards in the company gate would prevent her per petitioner Danilo Litonjuas instructions. Respondents actuations militate against petitioners claim that she did not heed the notices to return to work and abandoned her job. She had been going to her workplace to report for work but was prevented from resuming her work upon the instructions of petitioner Danilo Litonjua. It would be the height of injustice to allow an employee to claim as a ground for abandonment a situation which he himself had brought about. Since respondent Vigan was illegally dismissed from her employment, she is entitled to: (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and (2) backwages. The award of moral and exemplary damages to the respondent is also proper. As a rule, moral damages are recoverable only where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. In this case, bad faith attended respondents dismissal from her employment. Bad faith involves a state of mind dominated by ill will or motive. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. Petitioner Danilo Litonjua showed ill will in treating respondent Vigan in a very unfair and cruel manner which made her suffer anxieties by reason of such job difficulties. Respondent Vigan is also entitled to exemplary damages as her dismissal was effected in an oppressive and malevolent manner. The award of attorneys fees is likewise sustained. It is settled that in actions for recovery of wages or where an employee was

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forced to litigate and incur expenses to protect his rights and interest, he is entitled to an award of attorneys fees. Petition is denied. OSS SECURITY & ALLIED SERVICES vs. NLRC and EDEN LEGASPI G.R. No. 112752 Feb. 9, 2000 DE LEON Facts: Private respondent worked as a lady security guard of OSS Security Agency from June 16, 1986. Petitioner of acquired the assets and properties of OSS Security Agency and absorbed some of its personnel, including private respondent. As a lady security guard she was assigned to render security services to the different clients of petitioner. In a memorandum addressed to petitioner's company President, the Building Administrator of VM Condominium II complied of the laxity of the guards in enforcing security measures. In compliance therewith, petitioner issued Duty Detail Order relieving private respondent and another lady security guard of their assignment at VM Condominium II for reassignment to other units or detachments where vacancy exists. Private respondent was detailed to the Minami International Corporation from to replace lady security guard Susan Tan who filed her vacation leave for August 1991. However, it appears that private respondent did not report for duty at her new assignment. Private respondent filed her complaint for under payment and constructive dismissal. Labor Arbiter declared that private respondent's transfer was not sanctioned by law, hence illegal and tantamount to unjust dismissal. The Labor Arbiter ordered for respondents reinstatement and payment of backwagedHence, this petition. Issue: WON respondent is entitled to reinstatement and payment of backwages. Ruling: In the employment of personnel, the employer can prescribe the hiring, work

assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work, subject only to limitations imposed by laws. These are called management prerogatives in which the free will of management to conduct its own affairs to achieve its purpose, takes from. Thus, the transfer of an employee ordinarily lies within the ambit of management prerogatives. However, a transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient, or prejudicial to the employee, and it involves a demotion in rank or diminution of salaries, benefits and other privileges. In the case at bench, nowhere in the record does it show that that the transfer of private respondent was anything but done in good faith, without grave abuse of discretion, and in the best interest of the business enterprise. First. No malice should be imputed from the fact that private respondent was relieved of her assignment and, a day later, assigned a new post. When a security guard is placed "off detail" or on "floating" status, in security agency parlance, it means "waiting to be posted. Private respondent has not even been "off detail" for a week when she filed her complaint. Second. Evidence is wanting to support the Labor Arbiter's conclusion that petitioner discriminated against private respondent when it ordered her relief and transfer of assignment. Petitioner proved that such transfer was effected in good faith to comply with the reasonable request of its client, Madrigal Condominium for a more disciplined service of the security guards on detail. The renewal of the contract of petitioner with MCCI hinged on the action taken by the former on the latter's request. Third. It appears that private respondent declined the post assigned to her inasmuch as she considered it "a booby trap of crippling and dislocating private respondent from her employment". Private respondent lived in Sta. Mesa,

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Manila, and her new assigned post is in Taytay, Rizal, as against her previous post at VM Condominium II in Makati. Her new assigned post would entail changes in her routine, something that she was not agreeable with. But the mere fact that it would be inconvenient for her, as she has been assigned to VM Condominium II for a number of years, does not by itself make her transfer illegal. Thus, there was no basis to order reinstatement and back wages inasmuch as private respondent was not constructively dismissed. Neither is private respondent entitled to the award of money claims for underpayment, absent evidence to substantiate the same. Petition is granted. CANDIDO ALFARO vs. CA and STAR PAPER CORP G.R. No. 140812 August 28, 2001 PANGANIBAN Facts: Petitioner Candido Alfaro was employed as a helper/operator of private respondent Star Paper Corp. since November 8, 1990. Alfaro took a sick leave. When he reported back to work, he was surprised to find out that another worker was recruited to take his place, and instead, he was transferred to the wrapping section where he was required to work with overtime up to 9:30 PM, from his regular working hours of from 7:00 a.m., to 4:00 p.m., despite the fact that he had just recovered from illness. He was given a new assignment where the work was even more difficult and when he complained of what he felt was rude treatment or sort of punishment since he was being exposed to hard labor notwithstanding his predicament of just coming from sickness, petitioner was told to look for another job because he was dismissed, when petitioner was seeking his 13th month pay and 15 days SIL, he was ignored when he refused to sign documents which indicated that he was renouncing claims against private respondent. Petitioner sought private respondent to pay him, but he was told to come next year. When petitioner came

back, private respondent dangled to him a check worth P3,000.00 which would be released to him, only if he signed the documents, being forced upon him to sign on the day he was dismissed. Desperate for the money to support his subsistence, and against his will, petitioner was constrained to sign the said documents which contained no amount of money released to him. The actual sum of money received by petitioner from private respondent amounted to P3,000.00 in the form of check, while his claims for 15 days sick leave pay was secured by him from SSS. The Labor Arbiter found that petitioner was not illegally dismissed bur resigned from employment. Hence, this petition. Issue: WON petitioner separation pay. Ruling: Generally, an employee who voluntarily resigns from employment is not entitled to separation pay. Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment. In this case, The factual findings of the labor arbiter and the NLRC, as affirmed by the CA, reveal that petitioner resigned from his work due to his illness, with the understanding that private respondent would give him separation pay. He was already suffering from a lingering illness at the time he tendered his resignation. His continued employment would have been detrimental not only to his health, but also to his performance as an employee of private respondent. Hence, the termination of the employment relations of petitioner with private respondent was ultimately, if not outrightly inevitable. Petitioner negotiated for a resignation with separation pay as the manner in which his employment relations with private respondent would end, because resignation with separation pay was the best option for him under the is entitled to

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circumstances. Rightly so, this was the mode adopted and agreed upon by the parties, as evidenced by the Release and Quitclaim petitioner executed in connection with his resignation.Clearly then, the claim of petitioner that he was illegally dismissed cannot be sustained. It should be noted that dismissal and voluntary resignation are adversely opposed modes of terminating employment relations, in that the presence of one precludes that of the other. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and may not later be disowned, simply because of a change of mind. Unfortunately, it private respondent did not keep its promise to grant the separation pay, prompting petitioner to institute the present action for illegal dismissal. Thus, the Supreme Court gave due course to this petition. Petition is denied. GLOBE TELECOM vs. JOAN FLORENDOFLORES G.R. No. 150092 September 27, 2002 BELLOSILLO Facts: Petitioner GLOBE TELECOM is a domestic corporation while respondent Joan Florendo-Flores was the Senior Account Manager for Northern Luzon. Joan Florendo-Flores filed an amended complaint for constructive dismissal against GLOBE and alleged that Cacholo M. Santos never accomplished and submitted her performance evaluation report thereby depriving her of salary increases, bonuses and other incentives which other employees of the same rank had been receiving. GLOBE claimed that after receiving her salary in the second week of May 1998 Florendo-Flores went AWOL without signifying through letter or any other means that she was resigning from her position; that notwithstanding her absence and the filing of her case,

respondents employment was not terminated as shown by the fact that salary was still provided her until July 1998 to be released upon her presentation of the attendance-record sheet indicating that she already returned and reported for work; that she continued to have the use a of company car and company "handyphone" unit; that she was replaced only when her absence became indefinite and intolerable as the marketing operations in Northern Luzon began to suffer. Labor Arbiter ruled that respondent was illegally dismissed. NLRC ruled that petitioners did not dismiss respondent but that the latter actually abandoned her employment because of a disagreement with her immediate superior which she failed to bring to the attention of GLOBE and its officers. However, NLRC ordered GLOBE to pay backwages to respondent. Issue: WON respondent is entitled to backwages. Ruling: Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and valid grounds such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee's demotion shall be tantamount to unlawful constructive dismissal. All these are discernible in respondent's situation. She was singularly edged out of employment by the unbearable or undesirable treatment she received from her immediate superior Cacholo M. Santos who discriminated against her without reason - not preparing and submitting her performance evaluation report that would

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have been the basis for her increased salary; not forwarding her project proposals to management that would have been the source of commendation; diminishing her supervisor stature by assigning her to house-to-house sales or direct sales; and withholding from her the enjoyment of bonuses, allowances and other similar benefits that were necessary for her efficient sales performance. Although respondent continued to have the rank of a supervisor, her functions were reduced to a mere house-to-house sales agent or direct sales agent. This was tantamount to a demotion. She might not have suffered any diminution in her basic salary but petitioners did not dispute her allegation that she was deprived of all benefits due to another of her rank and position, benefits which she apparently used to receive. For this act of illegal dismissal, she deserves no less than full back wages starting from the time she had been illegally dismissed until her actual reinstatement to her former position without loss of seniority rights and other benefits - earned, accrued and demandable. She shall continue to enjoy her benefits, privileges and incentives including the use of the company car and "handyphone." It should be noted that the award of back wages in the instant case is justified upon the finding of illegal dismissal, and not under the principle of "act of grace" for past services rendered. Decision appealed from is modified. PATERNO S. MENDOZA vs. SAN MIGUEL FOODS G.R. No. 158684. May 16, 2005 CALLEJO Facts: Paterno S. Mendoza, Jr., was hired by San Miguel Corporation (SMC) as a marketing coordinator in its Trading Department. He was transferred to San Miguel Foods, Inc. (SMFI), a subsidiary of SMC, and was assigned to Instafood Corporation of the Philippines (Instafood) as a Purchasing Officer. He, however, remained an employee of SMFI. In the course of its operations, Instafood suffered serious

business losses for successive years and was closed. SMFI also suffered serious business losses; it had to implement a redundancy program and give benefits to affected employees. One of those whose employment was terminated on account of redundancy was Mendoza. He accepted benefits equivalent to two months salary for every year of service. SMFI, sent Mendoza a letter of termination informing him that the severance of his employment was to take effect at the close of business hours of November 30, 1996, and that his separation benefits would be released 30 days thereafter. Pursuant to company policy, Mendoza was allowed to go on a one-month terminal leave before the date of his severance from employment. In this case, petitioner challenges that deed of release and quitclaim that he signed and insists that he was merely forced to execute and sign it, and that he received only half of what he was entitled to receive; worse, he spent as much as P300,000.00 for processing the release of the subject shipment. The petitioner invokes the rule that quitclaims are disfavored and do not bar recovery of the full measure of a workers rights and benefits. Issue: WON the quitclaim in question is valid. Ruling: Generally, quitclaims are commonly frowned upon for being contrary to public policy, there are, however, legitimate waivers that represent a voluntary and reasonable settlement of a workers claim which should be respected by the courts as the law between the parties. Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. Not all quitclaims are per se invalid or against policy, except (1) where there is clear proof that the waiver was wangled from an

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unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face; in these cases, the law will step in to annul the questionable transaction. In the case at bench, the petitioner is not an unsuspecting or a gullible person. As adverted to by the respondents, the petitioner is a graduate of the University of the Philippines no less, with a Bachelor of Arts degree in Economics. Surely, he knew the nature and the legal effect of the said deed. Neither is the amount involved in the quitclaim unconscionable. Under Article 283 of the Labor Code, in case of termination of employment by virtue of redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In this case, the amount involved in the quitclaim is a rather hefty sum, a gross amount of P1,102,386.25, equivalent to two months salary for every year of service. Even assuming that the petitioner, indeed, spent half of what he received in facilitating the release of the shipment, the remainder thereof is still compliant with the provision of the aforesaid Article 283, as it would still be equivalent to about one month of his salary for every year of service. Petition is denied. SPS. AGABON vs. NLRC and RIVIERA HOME IMPROVEMENTS G.R. No. 158693 November 17, 2004 YNARESSANTIAGO Facts: Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and payment of money claims

and the Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims.NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and were not entitled to backwages and separation pay. The other money claims awarded by the Labor Arbiter were also denied for lack of evidence. Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to work on a "pakyaw" basis when they reported for duty. They did not agree on this arrangement because it would mean losing benefits as SSS members. Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing. Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work. In fact, private respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private respondent's manager even talked to petitioner Virgilio Agabon by telephone to tell him about the new assignment at Pacific Plaza Towers. However, petitioners did not report for work because they had subcontracted to perform installation work for another company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case. Issue: WON dismissed. Ruling: To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code enumerates the just causes for termination by the employer: xxx (b) gross and habitual neglect by the employee of his duties; xxx. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. petitioners were illegally

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It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. In the case at bench, petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever their employeremployee relationship. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him. In a decided case, it has been held that an employee who deliberately absented from work without leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job. We should apply that rule with more reason here where petitioners were absent because they were already working in another company. The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural requirements of notice and hearing in the termination of employment. Issue: WON private respondent is liable to indemnify petitioner. Ruling:

Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted. Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and DOLE written notices 30 days prior to the effectivity of his separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability. In the second and third situations where the dismissals are illegal, Article 279 mandates that the

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employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process. The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be held liable for non-compliance with the procedural requirements of due process. In cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, t the dismissal was for just cause and should be upheld but imposing sanctions on the employer. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.

Petition is denied. JAKA FOOD PROCESSING CORP vs. DARWIN PACOT G.R. No. 151378. March 28, 2005 GARCIA Facts: Respondents Darwin Pacot et.al were earlier hired by petitioner JAKA Foods Processing Corporation (JAKA) until the latter terminated their employment because the corporation was in dire financial straits. It is not disputed, however, that the termination was effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the employees and the DOLE at least one (1) month before the intended date of termination. In time, respondents filed complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA. Labor Arbiter rendered a decision declaring the termination illegal and ordering JAKA to reinstate respondents with full backwages, and separation pay if reinstatement is not possible. NLRC modified the Labor Arbiter and set aside the awards of backwages, service incentive leave pay but ordered JAKA to indemnify petitioners for its failure to observe due process in effecting the retrenchment. Issue: WON petitioner is liable indemnify private respondents. Ruling: In a decided case, it has been held that where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights. The violation of petitioners right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. to

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A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some fraud against the employer. Thus, it can be said that the employee himself initiated the dismissal process. On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employers exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program. The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay. For these reasons, there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and when based on one of the authorized causes under Article 283. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employers exercise of his management prerogative.

In the case at bench, , JAKA was suffering from serious business losses at the time it terminated respondents employment. It is, therefore, established that there was ground for respondents dismissal, i.e., retrenchment, which is one of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with the notice requirement under the same Article. Considering the factual circumstances in the instant case and the above ratiocination, the Supreme Court deem it proper to fix the indemnity at P50,000.00. SC held that CA erred when it ordered JAKA to pay respondents separation pay equivalent to 1)month salary for every year of service. This is because the rule is that in all cases of business closure or cessation of operation or undertaking of the employer, the affected employee is entitled to separation pay. This is consistent with the state policy of treating labor as a primary social economic force, affording full protection to its rights as well as its welfare. The exception is when the closure of business or cessation of operations is due to serious business losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious reasons. Petition is granted. EASTERN SHIPPING LINES, INC vs. DIOSCORO D. SEDAN G.R. No. 159354 April 7, 2006 QUISUMBING Facts: Petitioners hired on a per-voyage basis private respondent Dioscoro Sedan as 3rd marine engineer and oiler in one of the vessels owned by petitioners. His last voyage was on July 27, 1997 on board the vessel M/V Eastern Universe. His monthly pay was P22,000. Additionally, after each voyage his earned leave credits are monetized and paid in cash. He said he was disembarking because he was going to take the board examinations for marine

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engineers. Two months later, Sedan sent a letter to petitioners applying for optional retirement, citing as reason the death of his only daughter, hence the retirement benefits he would receive would ease his financial burden. However, petitioners deferred action on his application for optional retirement since his services on board ship were still needed. Nonetheless, according to petitioners, the company expressed intention to extend him a loan in order to defray the costs incurred for the burial and funeral expenses of his daughter. Sedan sent petitioners another letter insisting on the release of half of his optional retirement benefits. Later, he said that he no longer wanted to continue working on board a vessel for reasons of health. Sedan sent another letter to petitioners threatening to file a complaint if his application was not granted. In reply, according to petitioners, the company management sent a telegram informing Sedan that his services were needed on board a vessel and that he should report immediately for work as there was no available replacement. Sedan claims he did not receive the telegram, nor was this fact proved by the company before the Labor Arbiter or the NLRC. Sedan proceeded to file a complaint with the Labor Arbiter against petitioners demanding payment of his retirement benefits, leave pay, 13th month pay and attorneys fees. The Labor Arbiter ruled in favor of Sedan. CA sustained NLRC and the Labor Arbiter and ruled that private respondent is entitled to financial assistance. Issue: WON private respondent is entitled to financial assistance. Ruling: The Supreme Court is not unmindful of the rule that Financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Neither it is unmindful of this of the Supreme Courts ruling in one case where it has been held that when there is no dismissal to speak of, an award of financial assistance is not in order.

The Supreme Court did allow, in several instances, the grant of financial assistance. Financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. In the case at bench, private respondent joined the company when he was a young man of 25 years and stayed on until he was 48 years old; that he had given to the company the best years of his youth, working on board ship for almost 24 years; that in those years there was not a single report of him transgressing any of the company rules and regulations; that he applied for optional retirement under the companys non-contributory plan when his daughter died and for his own health reasons; and that it would appear that he had served the company well, since even the company said that the reason it refused his application for optional retirement was that it still needed his services; that he denies receiving the telegram asking him to report back to work; but that considering his age and health, he preferred to stay home rather than risk further working in a ship at sea. These special circumstances warrants the grant of financial assistance. Petition is denied. HA YUAN RESTAURANT vs. NLRC and JUVY SORIA G.R. No. 147719 January 27, 2006 AUSTRIA-MARTINEZ Facts: Respondent Juvy Soria worked as a cashier in petitioners establishment located inside the SM Food Court Makati. Respondent assaulted her co-worker Ma. Teresa Sumalague resulting in a scuffle between the two. Despite the intervention of their supervisor Fiderlie Recide, they were not pacified, prompting Recide to call for security assistance. The two were then brought to the SM Food Court Administration Office where they continued to cast tirades at each other notwithstanding the request of the SM Food Court Manager to stop. Because they refused to be mollified, they were brought to the Customer Relations Office for

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further investigation. As a result of the incident, the SM Food Court Manager banned the two from working within the SM Food Courts premises. Respondent then filed with the Labor Arbiter a complaint for illegal dismissal which was dismissed by the Labor Arbiter for lack of merit. NLRC modified the Labor Arbiter and awarded separation pay to private respondent. Issue: WON private respondent is entitled to separation pay. Ruling: In a decided case, it has been held that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. Separation pay therefore, depends on the cause of dismissal, and may be accordingly awarded provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on the employees moral character. In the case at bench, respondents cause of dismissal in this case amounts as a serious misconduct and as such, separation pay should not have been awarded to her. Thus, the petition should be granted. While it is true, that the Labor Arbiter did not tag private respondent cause of dismissal as serious misconduct, nevertheless, it is its nature, not its label that characterizes the cause as serious misconduct. There is no question as regards the incident that caused respondents dismissal. While respondents co-worker Sumalague was

eating at the back of the store, respondent rushed toward Sumalague and hit the latter on the face causing injuries. A scuffle ensued and despite their supervisor Recides pleas, the two continued to fight, prompting Recide to call the mall security. When the two were brought to the administration office, they continued bickering and did not heed the request of the manager to stop, and thus they were brought to the Customer Relations Office. Because of the incident, the two were banned from working within the premises. The fact that Sumalague sustained injuries is a matter that cannot be taken lightly. Moreover, the incident disturbed the peace in the work place, not to mention that respondent and Sumalague committed a breach of its discipline. Clearly, respondent committed serious misconduct within the meaning of Art. 282 of the Labor Code providing for the dismissal of employees. Her cause of dismissal amounting to a serious misconduct, respondent is not entitled to an award of separation pay. Petition is granted. h. Retirement (Art. 287)

Retirement

Age- The age of retirement is that specified in the CBA or in the employment contract. In the absence of a retirement plan or agreement providing for retirement benefits of employees in an establishment, an employee upon reaching the age of 60 years old or more; but not beyond 65 years of age which is hereby declared as the compulsory retirement age, who has served at least 5 years in said establishment. The rule is different with respect to underground mining employees whose optional retirement age is 50-60 provided they have at least served for a period of 5 years. Benefits: A retiree is entitled to a retirement pay equivalent to at least month salary for every year of service, a fraction of at least 6 months being contracted as one whole year.

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Unless the parties provide for broader inclusions, the term one half month salary shall means: 15 days plus 1/12 of the 13th month pay and the cash equivalent of NOT more than 5 days of SIL (22.5 days per year of service). Under Section 26, RA 4670 (Magna Carta for Public School Teachers), public school teachers having fulfilled the age and service requirements of the applicable retirement laws shall be given ONE RANGE SALARY RAISE upon retirement, which shall be the basis of the computation of the lump sum of the retirement pay and the monthly benefit thereafter. NOTE: Exempted from the payment of retirement pay are retail, service and agricultural establishments or operations employing not more than 10 employees or workers. AGE 60-65 65 RETIREMENT Optional but the employee must have served at least 5 years Compulsory (no need for 5 years of service)

exercising the prerogative to dismiss for just or authorized causes. In those two instances, it is indispensable that the employer establish the existence of just or authorized causes for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former. Article 287 of the Labor Code, as amended, governs retirement of employees, stating: Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employees retirement benefits under any collective bargaining agreement and other agreements shall not be less than those provided herein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least onehalf (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.We are impelled to reverse the Court of Appeals and affirm the validity of the termination of employment of Llagas and Javier, arising as it did from a management prerogative granted by the mutually-negotiated CBA between the School and the Union. In the case at bench, the CBA provided that the School has the option to retire an

CAINTA CATHOLIC SCHOOL vs. CAINTA CATHOLIC SCHOOL EMPLOYEES UNION (CCSEU) G.R. No. 151021 May 4, 2006 TINGA Issue: WON a stipulation in a CBA that allows management to retire an employee in its employ for a predetermined lengthy period but who has not yet reached the minimum compulsory retirement age provided in the Labor Code is valid. Ruling: Retirement is a different specie of termination of employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor Code. While in all three cases, the employee to be terminated may be unwilling to part from service, there are eminently higher standards to be met by the employer validly

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employee upon reaching the age limit of sixty (60) or after having rendered at least twenty (20) years of service to the School, the last three (3) years of which must be continuous. The CBA established 60 as the compulsory retirement age. However, it is not alleged that either Javier or Llagas had reached the compulsory retirement age of 60 years, but instead that they had rendered at least 20 years of service in the School, the last 3 years continuous. Clearly, the CBA provision allows the employee to be retired by the School even before reaching the age of 60, provided that he/she had rendered 20 years of service. Would such a stipulation be valid? Yes, such stipulation is valid. In a decided case, it has been held that Labor Code permitted employers and employees to fix the applicable retirement age at below 60 years of age. Moreover, there was no illegal dismissal since it was the CBA itself that incorporated the agreement reached between the employer and the bargaining agent with respect to the terms and conditions of employment; hence, when an employee ratified the CBA with his union, he concurrently agreed to conform to and abide by its provisions. By their acceptance of the CBA, the Union and its members are obliged to abide by the commitments and limitations they had agreed to cede to management. The questioned retirement provisions cannot be deemed as an imposition foisted on the Union, which very well had the right to have refused to agree to allowing management to retire retire employees with at least 20 years of service. i. Periods of Prescription (Art. 292) CAUSE Money Claims ULP Illegal Period of Prescription 3 years from the accrual of the causes of action 1 year from the accrual of the cause of action 4 years from the accrual of

Dismissal Reinstate ment

the cause of action 4 years

The period of prescription under Article 292, Labor Code, refers to and is limited to money claims, all other cases on injury to rights of a workingman being governed by the Civil Code. Hence, reinstatement prescribes in 4 years. AUTO BUS TRANSPORT SYSTEMS vs. ANTONIO BAUTISTA supra. Issue: WON the 3-year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to respondents claim of service incentive leave pay. Ruling: Article 291 of the Labor Code states that all money claims arising from employeremployee relationship shall be filed within 3 years from the time the cause of action accrued; otherwise, they shall be forever barred. When does the cause of action for money claims accrue in order to determine the reckoning date of the three-year prescriptive period? It is settled that one of the elements of a cause of action is the act or omission on the part of the defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. Thus, in the computation of the three-year prescriptive period, a determination must be made as to the period when the act constituting a violation of the workers right to the benefits being claimed was committed. For if the cause of action accrued more than 3 years before the filing of the money claim, said cause of action has already prescribed in accordance with Article 291. Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits being claimed have been withheld from the employee for a

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period longer than three 3 years, the amount pertaining to the period beyond the three-year prescriptive period is therefore barred by prescription. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within 3 years before the filing of the complaint. It is essential at this point, however, that in the case of SIL, the employee may choose to either use his leave credits or commute it to its monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. In the case at bench, respondent had not made use of his service incentive leave nor demanded for its commutation until his employment was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay at the time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that respondent demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim the payment of his accumulated service

incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated leave credits. Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. MEDICAL AND DENTAL SERVICES Art. 156- First Aid Treatment

First Aid Treatment- adequate,


immediate and necessary medical and dental attention or remedy given in case of injury or illness suffered by a worker during employment, irrespective of whether or not such injury or illness is work-connected, before a more extensive medical and/or dental treatment. First Aider- any person trained and duly certified as qualified to administer first aid by the Philippine National Red Cross, or by any other organization accredited by the former. Workmens Compensation- a general and comprehensive term applied to those laws providing for compensation for loss resulting from the injury, disablement or death of a workman through industrial accident, casualty or disease. Compensationmoney relief offered according to the scale established under the statue as differentiated from compensatory damages recoverable in an action at law for breach of contract or for tort. Workmens Compensation Act There is Employees Compensation Law No presumption of

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presumption of compensability There is a presumption of aggravation There is a need for the employer to controvert the claim within 14 days otherwise he is deemed to have waived the right Payment of compensation is made by the employer.

compensability No presumption of aggravation No need for the employer to controvert the claim

Payment of the compensation is made by the SSS/GSIS through the State Insurance Fund

Art. 167. Definition of Terms

Injury- any harmful change in the


human organism from any accident arising out of and in the course of employment. Conditions for an injury to be compensable: 1. The employee must have been injured at the place where the work requires him to be. 2. The employee must have performing his official functions. 3. If the injury is sustained elsewhere, the employee must have been executing an order for the employer. 4. The injury was not due to the employees intoxication, willful intention to injure or kill himself or another, notorious negligence or as otherwise provided under this Title. 5. Injuries incurred by a health worker while doing overtime work shall be presume work-connected. Sicknessany illness accepted as an occupational disease listed by the Commission or any illness caused by employment subject to proof that the risk of contraction the same is increased by working conditions. i. Conditions for an occupational disease and the resulting

disability or death to be compensable: a. The employees work must involve the risk described therein; b. The disease was contracted as a result of the employees exposure to the described risks; c. The disease was contracted within the period of exposure and under such factors necessary to contract it; and d. There was no notorious negligence on the part of the employee. Death- loss of life resulting from injury or sickness. Disabilityloss or impairment of a physical or mental function resulting from injury or sickness. Direct Premises Rule- as a general rule, the accident should have occurred at the place of work to be compensable. Exceptions to the Direct Premises Rule: a. Ingress- Egress/ Proximity RuleWhen the injury is sustained when the employee is proceeding to or from his work on the premises of the employer, the injury is compensable. b. Going to or Coming from WorkWhen the injury is sustained when the employee is proceeding to or from his work on the premises of the employer, the injury is compensable. 1. the act of the employee of going to, or coming from, the work place, must have been a continuing act, that is, he had not been diverted therefrom by any other activity, and he had departed from his usual route to, or from, his workplace; and 2. an employee on a special errand must have been official and in connection with his work. c. Extra-Premises Rule (Shuttle Bus Rule)- The company which provides the means of

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transportation in going to or coming from the place of work is liable to the injury sustained by the employees while on board said means of transportation. d. Special Errand Rule- Injury sustained outside the company premises is compensable if his being out is covered by an office order or a locator slip or a pass for official business. e. Dual Purpose Doctrine- allows compensation where a special trip would have to be made for the employer if the employee had not combined the service for the employer with his going or coming trip. f. Special Engagement Rulecovers field trips, outings, intramurals and picnics when initiated and sanctioned by the employer. g. Positional and Local Risks Doctrine- if an employee by reason of his duties is exposed to a special or peculiar danger from the elements, that is, one greater than that to which other persons in the community are exposed and an unexpected injury occurs, the injury is compensable. Art. 168. Compulsory Coverage Employees Compensation Law applies to all employers, public or private, and to all employees, public or private including casual, emergency, temporary, or substitute employees. An employee who is over 60 years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the system shall be subject to compulsory coverage. Art. 170. Effective Date of Coverage The employer is covered compulsorily fro the first day of operation and the employee from the first day of employment. Art. 172. Limitations of Liability

No Compensation can be obtained if the injury, death or disability is a result of the employees 1. intoxication; 2. willful intention to injure or kill himself or another; 3. notorious negligence; or 4. otherwise provided by the Labor Code. Notorious Negligencedeliberate act of the employee to disregard to is own personal safety. As a rule, death through suicide is not compensable. However, a self-inflicted death could be compensable: 1. by agreement of the parties; 2. if the suicide/death is caused by work-related or compensable illness or disease. Art. 173. Extent of Liability Simultaneous recovery under the Labor Code and the Civil Code cannot be made. The action is selective and the employee may either choose to file the claim under either. But once the election is made, the claimant cannot opt for the other remedy. State Insurance Fund- all covered employees are required to remit to a common fund a monthly contribution equivalent to 1% of the monthly salary of credit of every covered employees. The employee pays no contribution to the fund. Any agreement to the contrary is prohibited. Disability Benefits: Temporary Total Disability- if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period not exceeding 120 days. Permanent Total Disability- if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days.

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Permanent Partial Disability- if as a result of the injury or sickness, the employee suffers a permanent partial loss of the user of any part of his body. Death Benefits- The System shall pay to the primary beneficiaries upon the death of the covered employee an amount equal to his monthly income benefit, plus 10% thereof for each dependent child, but not exceeding 5, beginning with the youngest and without substitution. The income benefit shall be guaranteed for 5 years. i. Dependents: 1. The legitimate, legitimated, and legally adopted or acknowledged natural child who is unmarried, not gainfully employed and not over 21 years of age or over 21 years of age provided that he is incapable of selfsupport due to a physical or mental defect which is congenital or acquired during his minority. 2. Legitimate spouse living with the employee. 3. The parents of said employee wholly dependent upon him for regular support. ii. Benefits: 1. For life to the primary beneficiaries, guaranteed for 5 years. 2. For not more than 60 months to the secondary beneficiaries in case there are no primary beneficiaries. 3. In no case shall the total benefit be less than P15,000. iii. Beneficiaries a. Primary Beneficiaries: 1. dependent spouse until he remarries 2. dependent children (legitimate, legitimated, natural born or legally adopted) b. Secondary Beneficiaries: 1. illegitimate children and legitimate descendants 2. parents, grandparents, grandchildren

PART II SOCIAL LEGISLATION A. RA No. 1161 SOCIAL SECURITY SYSTEM as amended by RA No. 8282 i. Coverage: a. Compulsory: 1. Compulsory upon all employers not over 60 years of age and their employees; 2. In case of domestic helpers, their monthly income should not be less than P1,000. b. Limitations:

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Any benefit already earned by the employers under private benefit plans existing at the time of the approval of the Act shall not be discontinued, reduced or otherwise impaired. Private planes which are existing and in force at the time of compulsory coverage shall be integrated with the plan of the SSS in such a way where the employers contribution to his private plan is more than that required of him in this Act, he shall pay to the SSS only the contribution required of him and he shall continue his contribution to such private plan less his contribution to the SSS so that the employers total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before any compulsory coverage. Any changes, adjustments, modifications, eliminations or improvements in the benefits to be available under the remaining private plan, which may be necessary to adopt by reason of the reduced contribution thereto as a result of the integration shall be subject to agreements between the employers and the employees concerned. The private benefit plan which the employer shall continue for his employees shall remain under the employers management and control unless there is an existing agreement to the contrary. Nothing in this Act shall be construed as a limitation on the right of employers and employees to agree on and adopt benefits which are over and above those provided under this Act. 3. Compulsory upon such selfemployed persons as may be determined by the Commission including but not limited to the following: All self employed professionals; Partners and single proprietors;

Actors and actresses directors, scriptwriters and news correspondents who do not fall within the definition of the term employee in Section 8 (d) of this Act; Professional athletes, coaches, trainers, and jockeys; Individual farmers and fisherman. c. Voluntary: 1. Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis. 2. Filipinos recruited by foreign based employers for employment abroad may be covered by the SSS on a voluntary basis. 3. Employees separated from employment may continue to pay contributions to maintain his right to full benefits. 4. Self-employed with no income. d. By Agreement: Any foreign government, international organization, or their wholly-owned instrumentality employing workers in the Philippines, may enter into an agreement with the Philippine government for the inclusion of such employees in the SSS except those already covered by their respective civil service retirement systems. e. Excluded Employment: 1. Employment purely casual and not for the purpose of occupation or business of the employer; 2. Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines. 3. Service performed in the employ of the Philippine government or instrumentality or agency thereof; 4. Service performed in the employed of a foreign government, international organization, or their wholly owned instrumentality;

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5. Services performed by temporary employees, which may be excluded by regulation of the commission. f. Effective Date of Coverage: 1. Employer- it shall take effect on the first day of his operation. 2. Employee- on the day of his employment. 3. Self-employed- it shall take effect upon his registration with SSS. ii. Definition of Terms: EmployerAny person natural or juridical, domestic or foreign, who carries on in the Philippines, any trade business, industry undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government. Self-employed person shall be both the employer and employee at the same time. Employee- Any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship. Defendents: 1. The legal spouse entitled by law to receive support from the member; 2. The legitimate, legitimated or legally adopted and illegitimate child who is unmarried, not gainfully employed and has not reached 21 years of age or if 21 years of age, he is congenitally incapacitated or while still a minor, has been permanently incapacitated and incapable of self-support physically and mentally and; 3. The parent who is receiving regular support from the member. Beneficiaries:

1. The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted and illegitimate children who shall be the primary beneficiaries of the member. 2. PROVIDED that the dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally adopted children. 3. PROVIDED FURTHER in the absence of the legitimated, legally adopted or legitimate children, illegitimate children shall be entitled to 100% of the benefits. 4. IN THEIR ABSENCE, the dependent parents who shall be the secondary beneficiaries. 5. IN THE ABSENCE OF ALL of the foregoing, any person designated by the covered employee as secondary benefits. iii. Benefits: 1. Monthly Pension; 2. Dependents Pension; It shall be paid for each dependent child conceived on or before the date of the contingency but not exceeding five, beginning with the youngest without substitution provided that where there are legitimate and illegitimate children, the former shall be preferred. 3. Retirement Benefits A member who has paid at least 120 monthly contributions prior to the semester of retirement and who: a. has reached the age of 60 years and is already separated from employment or has ceased to be selfemployed b. has reached the age of 65 A covered member who is 60 years old not qualified under Letter a, shall still be entitled to retirement benefits PROVIDED, he is separated from employment and is not continuing payment of contributions to the SSS on his own.

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Upon the re-employment or resumption of self-employment of a retired employee who is less than 65 years old. 4. Death Benefits; 5. Permanent Disability Benefits; 6. Funeral Benefits; A funeral grant equivalent to P12,000 shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree. 7. Sickness Benefits (Requirements); a. A member must have paid at least 3 monthly contributions in the twelve month period immediately preceding the semester of sickness or injury; and b. is confined therefore for more than 3 days in a hospital or elsewhere with the approval of the SSS. 8. Maternity Leave Benefit: It shall be paid to a female employee who has paid at least 3 monthly contributions in the twelve month period immediately preceding the semester of her childbirth or miscarriage PROVIDED: 1. that the employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS. 2. The full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application. 3. Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits. 4. The maternity benefits provided under this Section shall be paid only for the first 4 deliveries or miscarriages. 5. The SSS shall immediately reimburse the employer 100% of the benefits advanced by the latter. 6. If no contributions were remitted by the employer or no notice was given to SSS, the employer shall be liable for

Suspension of Monthly Pension-

damages equivalent to the benefits which said employee member would otherwise have been entitled to. iv. Non-Transferability of Benefits Such benefits are not transferable and no power of attorney or other document executed by those entitled thereto, in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits. v. Sources of Fund 1. Collection: Beginning on the last day of the month when an employees compulsory coverage takes effect and every month thereafter during his employment, his employer shall pay the employers contribution and shall deduct and withhold from such employees monthly salary the employees contribution. The same time of collection for self-employed. 2. Remittance: It shall be remitted within the first 10 days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. For self-employed they shall remit their contributions quarterly on such dates and schedules as the Commission may require. B. RA NO. 8291- GOVERNMENT SERVICE INSURANCE SYSTEM i. Compulsory Membership Compulsory for all employees (as defined in Section 2 (d) of GSIS Law) receiving compensation who have not reached the compulsory retirement age, irrespective of employment status, EXCEPT MEMBERS OF THE ARMED FORCES AND THE PNP, subject to the

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condition that they must settle first their financial obligations with the GSIS and contractuals who have no employer and employee relationship with the agencies. EXCEPT FOR THE MEMBERS OF THE JUDICIARY AND CONSTITUTIONAL COMMISSIONS WHO SHALL HAVE LIFE INSURANCE ONLY, all members of the GSIS shall have life insurance, retirement and all other social security protection such as disability, survivorship, separation and unemployment benefits. Computation of Service The computation of service for the purpose of determining the amount of benefits payable shall be from the date of the original appointment/ election including periods of service at different times under the authority of the Republic of the Philippines and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. All service credited for retirement, resignation or separation for which corresponding benefits have been awarded shall be excluded in the computation of service in case of reinstatement in the service of an employer and subsequent retirement or separation which is compensable. ii. Definition of Terms: EmployerThe national government, its political subdivisions, branches, agencies or instrumentalities including GOCCs and financial institutions with original charters, the Constitutional Commissions and the Judiciary. Employee/ Member- Any person receiving compensation while in the service of an employer as defined herein, whether by election or appointment, irrespective of status appointment. Dependents:

1. The legitimate spouse dependent for support upon the member or pensioner 2. The legitimate, legitimated legally adopted child, including the illegitimate child who is: a. unmarried , b. not gainfully employed, c. not over the age of majority, or d. is over the age of majority but incapacitated and incapable of self-support due to a mental or physical defect acquired prior to age of majority. 3. Parents dependent upon the members for support. Primary Beneficiary- The legal dependent spouse until he/she remarries. Secondary BeneficiaryThe dependent parents and subject to the restrictions on dependent children, the legitimate descendants. DisabilityAny loss or impairment of the normal functions of the physical and/or mental faculty of a member which reduces or eliminates his/her capacity to continue with his/her current gainful occupation or engage in any other gainful occupation. Total Disability- Complete incapacity to continue with his present employment or engage in any gainful occupation due to the loss or impairment of the normal functions of the physical and/or mental faculties of the member. Permanent Total Disability- Accrues or arises when recovery from impairment mentioned in Section 2 (Q) (defining disability) is medically remote. Temporary Total Disability- Accrues or arises when impaired physical and/or mental faculties can be rehabilitated and

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/or restored to their normal functions. Permanent Partial Disability- Accrues or arises upon the irrevocable loss or impairment of certain portion/s of the physical faculties, despite which the member is able to pursue a gainful occupation. iii. Sources of Fund: a. Contributions: 1. It shall be mandatory for the member and the employer to pay the monthly contributions. 2. T he employer shall include the in its annual appropriation the necessary amounts for its share of the contributions indicated above PLUS any additional premiums that may be required on account of the hazards or risks of its employees occupation. 3. Fa ilure to do so shall subject the employers to penal or administrative sanctions. b. Collection and Remittance: 1. Collection- The employer shall report to the GSIS all pertinent information regarding the employee and shall deduct each month for the salary or compensation of each employee the contribution payable by him. 2. Remittance- The employer shall remit directly to the GSIS the employees and employers contributions within the first 10 days of the calendar month following to which the contributions apply. iv. Benefits: 1. Separation Benefits: Separation benefits are given to the: a. The member resigns or separates from the service after he has rendered at least 3 years of service but less than 15 years. b. The member resigns or separates from office after he has rendered 15 days of service and is below 60 years of age at the time of resignation or separation.

Separation benefits likewise include: Unemployment or Involuntary Separation Benefits- shall be paid to a permanent employee who is involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganization PROVIDED that he has been paying integrated contributions for at least 1 year prior to contributions. 2. Retirement Benefits: Conditions for entitlement: a. Member has rendered at least 15 years of service. b. He is at least 60 years of age at the time of retirement. c. He is not receiving a monthly pension benefit from permanent total disability. 3. Permanent Disability Benefits: General Conditions for Entitlement- the member must have suffered permanent disability for reasons NOT DUE to: a. Grave misconduct, b. notorious negligence, c. habitual intoxication, or willful intention to kill himself or another. Specific Conditions for entitlementhe shall receive monthly income benefit for life equal to the basic monthly pension effective from the date of the disability, PROVIDED: a. He is in the service at the time of the disability. b. If separated from service, he has paid at least 36 monthly contributions within the 5 year period immediately preceding the disability or has paid a total of at least 180 monthly contributions prior to the disability. c. If he was in service and has paid a total of at least a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension. d. However, a member cannot enjoy the monthly income benefit for permanent disability and the old age retirement simultaneously.

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Unless the member has reached the minimum retirement age, disability benefits shall be suspended when: a. he is reemployed b. he recovers from his disability as determined by the GSIS, whose decision shall be final and binding d. he fails to present himself for medical examination when required by the GSIS. Permanent Partial Disability- he must satisfy specific conditions 1-3. 4. Temporary Disability Benefits The member shall be entitled to 75% of the current daily compensation for each day or fraction thereof of temporary disability benefit not exceeding 120 days in one calendar year after exhausting all sick leave credits and collective bargaining sick leave benefits. PROVIDED: he is in service at the time of his disability. if separated, he has rendered at least 3 years of service and has paid at least 6 monthly contributions in the 12 month period immediately preceding the disability. However, a member cannot enjoy temporary total disability benefit and sick leave pay simultaneously. In addition, if the disability requires more extensive treatment that lasts beyond 120 days, the payment of the temporary total disability benefit may be extended by the GSIS but not to exceed a total of 240 days. Lastly, and in no case shall the benefit be less than P70 a day. 5. Survivorship Benefits: For purposes of survivorship benefits, legitimate children shall include legally adopted and legitimated children. v. Death of a Member- upon the death of a member, the primary beneficiaries shall be entitled to: 1. Survivorship Pension, provided: a. Member was in service at the time of his death.

b. If separated from service has rendered at least 3 years of service and paid 36 monthly contributions with the 5-years period immediately preceding his death or has paid a total of at least 180 monthly contributions. 2. Survivorship Pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service, provided: The deceased was in the service at the time of his death with at least 3 years of service. 3. Survivorship Pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service he paid contributions but not less than P12,000, provided: That the deceased has rendered at least 3 years of service prior to his death but does not qualify under 1 and 2. a. Order of Payment of the Survivorship Pension: 1. When the dependent spouse is the only survivor, he shall receive the basic survivorship pension for life or until he/she remarries. 2. When only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent childrens pension. 3. When the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependents pension. b. In the absence of Primary Beneficiaries, the secondary beneficiaries shall be entitled to: 1. Cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12, 000 PROVIDED that the member is in service at the time of his death and has at least 3 years of service.

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2. In the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to the legal heirs.

6. Funeral Benefits: It shall not be less than P12, 000 PROVIDED that it shall be increased to at least P18, 000 after 5 years and shall be paid upon death. 7. Life Insurance Benefits: All employees except members of the AFP and the PNP shall be compulsorily covered with life insurance. vi. Adjudication of Claims and Disputes Prescription of Claims- Claims for benefits under the Act except for life and retirement shall prescribe after 4 years from the date of contingency. Jurisdiction- GSIS shall have the exclusive and original jurisdiction to settle any dispute arising under the Act and any other laws administered by the GSIS. Appealable under Rule 43 and 45, Rules of Court. The appeal shall not stay the execution of the order or award unless ordered by the Boards, CA, or SC and the appeal shall be without prejudice to the special civil action for certiorari when proper.

C. Salient Provisions of RA NO. 8972 SOLO PARENTS WELFARE ACT OF 2000 Section 2. Declaration of Policy. - It is the policy of the State to promote the family as the foundation of the nation, strengthen its solidarity and ensure its total development. Section 3. Definition of Terms. - Whenever used in this Act, the following terms shall mean as follows: (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. (b) Children - refer to those living with and dependent upon the solo parent for support who are unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years but are incapable of self-support because of mental and/or physical defect/disability. (c) Parental responsibility - with

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respect to their minor children shall refer to the rights and duties of the parents as defined in Article 220 of Executive Order No. 209, as amended, otherwise known as the "Family Code of the Philippines." (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. (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. Section 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. Section 5. Comprehensive Package of Social Development and Welfare Services. - A comprehensive package of social development and welfare services for solo parents and their families will be developed by the DSWD, DOH, DECS, CHED, TESDA, DOLE, NHA and DILG, in coordination with local government units and a nongovernmental organization with proven track record in providing services for solo parents. The DSWD shall coordinate with concerned agencies the implementation of the comprehensive package of social development and welfare services for solo parents and their families. The package will initially include: (a) Livelihood development service xxx. (b) Counseling services xxx. (c) Parent effectiveness services xxx. (d) Critical incidence stress debriefing xxx. (e) Special projects for individuals in need of protection xxx. Section 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. Section 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. Section 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. Section 9. Educational Benefits. - The DECS, CHED and TESDA shall provide the following benefits and privileges: (1) Scholarship programs for qualified solo parents and their children in institutions of basic, tertiary and technical/skills education; and (2) Nonformal education programs appropriate for solo parents and their children. xxx Section 10. Housing Benefits. - Solo parents shall be given allocation in housing projects and shall be provided with liberal terms of payment on said government low-cost housing projects in accordance with housing law provisions prioritizing applicants below the poverty line as declared by the NEDA. Section 11. Medical Assistance. - The DOH shall develop a comprehensive health care program for solo parents and their children. The program shall be implemented by the DOH through their retained hospitals and medical centers and the local government units (LGUs) through their provincial/district/city/municipal hospitals and rural health units (RHUs). D. Salient Provisions of RA NO. 8187PATERNITY ACT OF 1996 SECTION 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)

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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. SECTION 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. SECTION 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 P25,000 or imprisonment of not less than 30 days nor more than 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 entity's responsible officers, including, but not limited to, the president, vicepresident, chief executive officer, general manager, managing director or partner directly responsible therefor. SECTION 6. Nondiminution Clause. - Nothing in this Act shall be construed to reduce any existing benefits of any form granted under existing laws, decrees, executive orders, or any contract agreement or policy between employer and employee.

E. Salient Provisions of RA NO. 7610 SPECIAL PROTECTION OF CHILDREN AGAINST ABUSE, EXPLOITATION AND DISCRIMINATION ACT, AS AMENDED BY RA NO. 7658

Section 2. Declaration of State Policy and Principles. - It is hereby declared to be the policy of the State to provide special protection to children from all firms of abuse, neglect, cruelty exploitation and discrimination and other conditions, prejudicial their development; provide sanctions for their commission and carry out a program for prevention and deterrence of and crisis intervention in situations of child abuse, exploitation and discrimination. The State shall intervene on behalf of the child when the parent, guardian, teacher or person having care or custody of the child fails or is unable to protect the child against abuse, exploitation and discrimination or when such acts against the child are committed by the said parent, guardian, teacher or person having care and custody of the same. It shall be the policy of the State to protect and rehabilitate children gravely threatened or endangered by circumstances which affect or will affect their survival and normal development and over which they have no control. The best interests of children shall be the paramount consideration in all actions concerning them, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities, and legislative bodies, consistent with the principle of First Call for Children as enunciated in the United Nations Convention of the Rights of the Child. Every effort shall be exerted to promote the welfare of children and enhance their opportunities for a useful and happy life. Section 3. Definition of Terms. (a) Children refers to person below eighteen (18) years of age or those over but are unable to fully take care of themselves or protect themselves from abuse, neglect, cruelty, exploitation or discrimination because of a physical or mental disability or condition; (b) Child abuse refers to the maltreatment, whether habitual or not, of the child which includes any of the following: (1) Psychological and physical abuse, neglect, cruelty, sexual abuse and emotional maltreatment; (2) Any act by deeds or words which debases,

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degrades or demeans the intrinsic worth and dignity of a child as a human being; (3) Unreasonable deprivation of his basic needs for survival, such as food and shelter; or (4) Failure to immediately give medical treatment to an injured child resulting in serious impairment of his growth and development or in his permanent incapacity or death. (c) Circumstances which gravely threaten or endanger the survival and normal development of children include, but are not limited to, the following; (1) Being in a community where there is armed conflict or being affected by armed conflict-related activities; (2) Working under conditions hazardous to life, safety and normal which unduly interfere with their normal development; (3) Living in or fending for themselves in the streets of urban or rural areas without the care of parents or a guardian or basic services needed for a good quality of life; (4) Being a member of a indigenous cultural community and/or living under conditions of extreme poverty or in an area which is underdeveloped and/or lacks or has inadequate access to basic services needed for a good quality of life; (5) Being a victim of a man-made or natural disaster or calamity; or (6) Circumstances analogous to those above-stated which endanger the life, safety or normal development of children. Section 12. Employment of Children. Children below fifteen (15) years of age shall not be employed except: 1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer's family are employed: Provided, however, That his employment neither endangers his life, safety, health and morals, nor impairs his normal development; Provided, further, That the parent or legal guardian shall provide the

said minor child with the prescribed primary and/or secondary education; or 2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: and Provided, That the following requirements in all instances are strictly complied with: (a)The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the requirements. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the child. Section 13. Non-formal Education for Working Children. - The Department of Education, Culture and Sports shall promulgate a course design under its nonformal education program aimed at promoting the intellectual, moral and vocational efficiency of working children who have not undergone or finished elementary or secondary education. Such course design shall integrate the learning process deemed most effective under given circumstances. Section 14. Prohibition on the Employment of Children in Certain Advertisements. - No person shall employ child models in all commercials or advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence. Section 15.

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Duty of Employer. - Every employer shall comply with the duties provided for in Articles 108 and 109 of Presidential Decree No. 603. Section 16. Penalties. - Any person who shall violate any provision of this Article shall suffer the penalty of a fine of not less than One thousand pesos (P1,000) but not more than Ten thousand pesos (P10,000) or imprisonment of not less than three (3) months but not more than three (3) years, or both at the discretion of the court; Provided, That, in case of repeated violations of the provisions of this Article, the offender's license to operate shall be revoked. F. RA 7875- NATIONAL INSURANCE ACT OF 1995 HEALTH

i. General Objectives 1. Provide all citizens of the Philippines with the mechanism to gain financial access to health services. 2. Prioritize and accelerate the provision of health services to all Filipinos, especially that segment of the population who cannot afford services; 3. Establish the Philippine Health Insurance Corporation hereinafter referred to as the Corporation, that will administer the Program at the central and local levels; and 4. Create the National Health Insurance hereinafter referred to as the Program to serve as the means of help the people pay for health care services. ii. Definition of Terms: Dependent a. The legitimate spouse who is not a member; b. The unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged children as appearing in the birth certificate; legally adopted or step-children below 21 years of age; c. Children who are 21 years old or above but

suffering from congenital disability, either physical or mental, or any disability acquired that renders them totally dependent on the member of support; d. Parents who are 60 years old or above whose monthly income is below an amount to be determined by the Corporation Employer- A natural or juridical person who employs the services of an employee. Employee- Any person who performs services for a employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship. iii. The National Health Insurance Program Establishment and Purpose- it shall provide health insurance coverage and ensure affordable, acceptable, accessible and available health care services for all citizens of the Philippines. It shall as a means for the healthy to help pay for the care of the sick and for those who can afford medical care to subsidize those who cannot. Coverage- All citizens of the Philippines shall be covered by the National Health Insurance Program. Benefit Package 1. Inpatient hospital care: a. room and board b. services of health care professionals c. diagnostic, laboratory and other medical examination services d. use of surgical or medical equipment and facilities e. prescription drugs and biologicals 2. Outpatient care: a. services of health care professionals b. diagnostic, laboratory and other medical examination services c. personal preventive services d. prescription drugs and biological 3. Emergency and transfer services 4. Other health care services Excluded Personal Health Services

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1. non-prescription drugs and services 2. outpatient psychotherapy and counseling for mental disorders 3. drug and alcohol abuse or dependency surgery 4. cosmetic surgery 5. home and rehabilitation services 6. optometric services 7. normal obstetrical services 8. cost-ineffective procedures which shall be defined by the Corporation Entitlement to Benefits 1. A member whose premium for at least 3 months have been paid within 6 months prior to the first day of his or his dependents availment. 2. He must show that he contributes thereto with sufficient regularity as evidenced by their health insurance ID Card. 3. He must not be currently subject to legal penalties Monthly Contributions need not be paid by the following to be entitled to the Programs Benefits: 1. Retirees and pensioners of SSS and GSIS; 2. Members who have paid at least 120 monthly contributions; and 3. Enrolled indigents. NOTE: Transfer of Health Insurance Funds of SSS and GSIS. It shall be transferred to the Corporation within 60 days from the promulgation of the IRR. The SSS and GSIS shall continue to perform Medicare functions under contract with the Corporation until such time that such functions are assumed by the Corporation. Transfer of Medicare Functions of the SSS and GSISWithin 5 years from the promulgation of the IRR, but the SSS and GSIS shall continue performing its Medicare functions beyond the stipulated 5-year period

if such extension Program members.

will

benefit

G. Salient Provisions of RA NO. 7877 ANTI-SEXUAL HARASSMENT ACT OF 1995 Sec. 2. Declaration of Policy. The State shall value the dignity of every individual, enhance the development of it human resources, guarantee full respect for human rights, and uphold the dignity of workers, employees, applicants for employment, students or those undergoing training, instruction or education. Towards this end, all forms of sexual harassment in the employment, education or training environment are hereby declared unlawful. Sec. 3. Work, Education or Trainingrelated Sexual Harassment Defined. Work, education or training-related sexual harassment is committed by an employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of said Act. (a) In a work-related or employment environment, sexual harassment is committed when: (1) The sexual favor is made as a condition in the hiring or in the employment, reemployment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee; (2) The above acts would impair the employees rights or privileges under existing labor laws; or (3) The above acts

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would result in an intimidating, hostile, or offensive environment for the employee. (b) In an education or training environment, sexual harassment is committed: (1) Against one who is under the care, custody or supervision of the offender; (2) Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; (3) When the sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or (4) When the sexual advances result in an intimidating, hostile or offensive environment for the student, trainee or apprentice. Any person who directs or induces another to commit any act of sexual harassment as herein defined, or who cooperates in the commission thereof by another without which it would not have been committed, shall also be held liable under this Act. Sec.4. Duty of the Employer or Head of Office in a Work-related, Education or Training Environment. It shall be the duty of the employer or the head of the work-related, educational or training environment or institution, to prevent or deter the commission of acts of sexual harassment and to provide the procedures for the resolution, settlement or prosecution of acts of sexual harassment. Towards this end, the employer or head of office shall: (a) Promulgate appropriate rules and regulations in consultation with the jointly approved by the employees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation or sexual harassment cases and the administrative sanctions therefor. Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of sexual harassment. The said rules and regulations issued pursuant to this section (a) shall include, among others, guidelines on proper decorum in the workplace and educational or training institutions. (b) Create a

committee on decorum and investigation of cases on sexual harassment. The committee shall conduct meetings, as the case may be, with other officers and employees, teachers, instructors, professors, coaches, trainors and students or trainees to increase understanding and prevent incidents of sexual harassment. It shall also conduct the investigation of the alleged cases constituting sexual harassment. In the case of a work-related environment, the committee shall be composed of at least one (1) representative each from the management, the union, if any, the employees from the supervisory rank, and from the rank and file employees. In the case of the educational or training institution, the committee shall be composed of at least one (1) representative from the administration, the trainors, teachers, instructors, professors or coaches and students or trainees, as the case maybe. The employer or head of office, educational or training institution shall disseminate or post a copy of this Act for the information of all concerned. Sec. 5. Liability of the Employer, Head of Office, Educational or Training Institution. The employer or head of office, educational training institution shall be solidarily liable for damage arising from the acts of sexual harassment committed in the employment, education or training environment if the employer or head of office, educational or training institution is informed of such acts by the offended party and no immediate action is taken thereon. Sec. 6. Independent Action for Damages. Nothing in this Act shall preclude the victim of work, education or training-related sexual harassment from instituting a separate and independent action for damages and other affirmative relief. Sec. 7. Penalties. Any person who violates the provisions of this Act shall, upon conviction, be penalized by imprisonment of not less than one (1) month nor more than six (6) months, or a fine of not less than Ten thousand pesos (P10,000) nor more than Twenty thousand pesos

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(P20,000), or both such fine and imprisonment at the discretion of the court. Any action arising from the violation of the provision of this Act shall prescribe in three (3) years. H. RA 8042- MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 Approved on June 8, 1995 and took effect on July 15, 1995. as indicated in its Title, the law institutes the policies of overseas employment and establishes a higher standard of protection and promotion of the welfare of migrant workers, their families and of overseas Filipinos in distress. i. Guarantee of Protection for Overseas Workers The State shall deploy 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 for the protection of the receiving country of the rights of overseas Filipino workers: 1. It has existing labor and social laws protecting the rights of migrant workers; 2. It is signatory to multilateral conventions, declarations or resolutions relating to the protection of migrant workers; 3. It has concluded a bilateral agreement or arrangement with the government protecting the rights of overseas Filipino workers; and 4. It is taking positive, concrete measures to protect the rights of migrant workers. ii. Jurisdiction a. NLRC Money Claims The Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide the claims arising out of an employeremployee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral,

exemplary and other forms of damages. Liabilities The liability of the principal/employer and the recruitment/ placement agency for any and all claims under this Section shall be joint and several. The performance bond to be 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. 13th Month Pay Under RA 8042 The date the employment termination occurred is material. On or after July 15, 1995, the law to apply is RA 8042. Under Section 10, RA 8042, a worker dismissed from overseas employment without just, valid or authorized cause as defined by law or contract, is entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salary for the unexpired portion of his employment contract or for 3 months of every year of the unexpired term, whichever is less. b. POEA The POEA retains original and exclusive jurisdiction to hear and decide: 1. 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

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2. Disciplinary action cases and other special cases which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers. Venue- It may be filed with the POEA Adjudication Office or the DOLE/POEA regional office of the place where the complainant applied or was recruited at the option of the complainant. The office with which the complaint was first filed shall take cognizance of the case. Disciplinary action cases and other special cases, as mentioned in the preceding Section, shall be filed with POEA Adjudication Office. c. RTC A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense. The court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts. iii. Mandatory Periods for Resolution of Illegal Recruitment Cases The preliminary investigations of cases under this Act shall be terminated within a period of 30 calendar days from the date of their filing. Where the preliminary investigation is conducted by a prosecution office an a prima facie case is established, the corresponding information shall be filed in court within 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, the corresponding information shall be filed by the proper prosecution officer within 48-hours from the date of receipt of the records of the case. iv. Prescriptive Period Illegal recruitment cases under this Act shall prescribe in 5 years; provided, however, that illegal recruitment cases involving economic sabotage as

defined herein shall prescribe in 29 years. v. Prohibited Acts in Recruitment and Placement of Workers under the Labor Code are Retained. Under RA 8042, there are additional acts: 1. Failure to deploy employee without valid reason; 2. Failure to reimburse expenses incurred in connection with his documentation and processing in cases that deployment did not take place. vi. Different Funds Created under this Act: 1. R epatriation fund 2. Lo an guaranty fund 3. Le gal Assistance fund 4. C ongressional Migrant Workers Scholarship fund. vii. Government Agencies Mobilized: 1. DFA 2. DOLE 3. POEA 4. OWWA- The Welfare Officer or in his absence, the Center Coordinator of the Filipinos Resource Center shall make proper representation with the employer/ principal and/ or agency as the case may be, through conciliation meetings or conferences for the purpose of enforcing Contractual Obligations concerning migrant workers. For this purpose, the officer may enlist the assistance of the OWWA officer. 5. Re-placement and Monitoring Center- it shall: a. Provide a mechanism for the reintegration into the Philippine society; b. Serve as a promotion house for their local employment; c. Tap their skills and potentials for national development. I. Salient Provisions of PD NO. 851- 13th Month Pay Law and its IRR

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Sec. 1, PD 851- 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. Sec. 2, PD 851- Employers already paying their employees a 13th-month pay or its equivalent are not covered by this Decree. Section 1. Payment of 13th-month Pay. - All employers covered by Presidential Decree No. 851, hereinafter referred to as the "Decree", shall pay to all their employees receiving a basic salary of not more than P1,000 a month a thirteenth-month pay not later than December 24 of every year. Sec. 2. Definition of certain terms. - As used in this issuance: (a) Thirteenth-month pay shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year; (b) Basic salary shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to Presidential Decree No. 525 or Letter of Instructions No. 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. Sec. 3. Employers covered. - The Decree shall apply to all employers except to: (a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of nonprofit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the last two (2) years, subject to the provision of Section 7 of this issuance; (b) The Government and any of its political subdivisions,

including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the Government; (c) Employers already paying their employees 13-month pay or more in a calendar year or its equivalent at the time of this issuance; (d) Employers of household helpers and persons in the personal service of another in relation to such workers; and (e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a 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 be covered by this issuance insofar as such workers are concerned. 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 in paragraph c) hereof shall include Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th 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 1/12th of the employees basic salary, the employer shall pay the difference. Sec. 4. Employees covered. - Except as provided in Section 3 of this issuance, all employees of covered employers shall be entitled to benefit provided under the Decree who are receiving not more than P1,000 a month, regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month

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during the calendar year. Sec. 5. Option of covered employers. A covered employer may pay one-half of the 13th-month pay required by the Decree before the opening of the regular school year and the other half on or before the 24th day of December of every year. In any establishment where a union has been recognized or certified as the collective bargaining agent of the employees therein, the periodicity or frequency of payment of the 13th-month pay may be the subject of agreement. Nothing herein shall prevent employers from giving the benefits provided in the Decree to their employees who are receiving more than One Thousand (P1,000) Pesos a month or benefits higher than those provided by the Decree. Sec. 6. Special feature of benefit. The benefits granted under this issuance shall not be credited as part of the regular wage of the employees for purposes of determining overtime and premium pay, fringe benefits, as well as premium contributions to the State Insurance Fund, social security, medicare and private welfare and retirement plans. Sec. 7. Exemption of Distressed employers. Distressed employers shall qualify for exemption from the requirement of the Decree upon prior authorization by the Secretary of Labor. Petitions for exemptions may be filed within the nearest regional office having jurisdiction over the employer not later than January 15, 1976. The regional offices shall transmit the petitions to the Secretary of Labor within 24 hours from receipt thereof. Sec. 9. Adjudication of claims. - Nonpayment of the thirteenth-month pay provided by the Decree and these rules shall be treated as money claims cases and shall be processed in accordance with the Rules Implementing the Labor Code of the Philippines and the Rules of the National Labor Relations Commission. Sec. 10. Prohibition 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. J. RA NO. 6657- COMPREHENSIVE AGRARIAN REFORM LAW i. Coverage

In General- Regardless of tenurial


arrangement and commodity produced, all public and private agricultural lands as provided in Proc. No. 131 and EO No. 229, including other lands of the public domain suitable for agriculture. Specifically: 1. All alienable and disposable lands of the public domain devoted to or suitable for agriculture; 2. All lands of the public domain in excess to the specific limits as determined by Congress; 3. All other lands owned by the Government devoted to or suitable for agriculture; and 4. All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. ii. Excluded: Lands actually, directly and exclusively used and found to be necessary for the following purposes: 1. for parks, wildlife, forest reserves, reforestation; 2. for fish sanctuaries and breeding grounds; 3. for watersheds and mangroves; 4. for national defense; 5. for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes; 6. for seeds and seedlings research and pilot production center; 7. for church sites and convents appurtenant thereto; 8. for mosque sites and Islamic centers appurtenant thereto;

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9. for communal burial grounds and cemeteries; 10. for penal colonies and penal farms actually worked by the inmates; 11. for government and private research and quarantine centers; 12. all lands with 18% slope and over, except those already developed; 13. Ancestral lands belonging to indigenous cultural communities until their boundaries and extent are duly identified and delineated by the proper governmental agency and segregated as part of the public domain. iii. Definition of Terms: Public Domain- refers to lands to which the government has propriety rights. Government Lands- include both public lands and other lands of the government already reserved for or devoted to public use or subject to private rights. Private Agricultural Lands- are those devoted to commercial livestock, poultry and swine raising, aquaculture including saltbeds, fishponds, and prawn ponds, fruit farms, orchards, vegetables and cutflower farms, and cacao, coffee and rubber plantation. Share Tenancymeans the relationship which exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid or labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant. Leasehold System- is characterized by a tenant-farmer personally and actually cultivating the farmholding under a leasehold relationship whereby the lessee pays a fixed amount of rental whether in cash or

in kind to the lessor (owner or legal possessor) of the land. iv. Establishment of Leasehold Relationship 1. By agreement of the parties (between the lessor and lessees)- this may be entered into either orally or in writing, expressly or impliedly. 2. By operation of law- this is brought about by the implementation of RA No. 3844, Agricultural Land Reform Code, providing for the abolition of share tenancy. v. Establishment of Implied Leasehold Relationship Implied leasehold relationship is established when the landholder: 1. does not object to the continued cultivation of the land, or 2. tolerates the continued cultivation thereof by the agricultural worker, and/or 3. the landholder continues to receive benefits from the cultivation of the land. SHARE TENANCY Tenant has physical possession of anothers land of the purpose of cultivating it giving the owner the share of the property. The tenant may choose to shoulder in addition to labor, any one or more items or production such as farm implements work animals, cost of final harrowing and transplanting. The tenant and the landholder are comanagers of farm holding. The tenant and the landholder divide the harvest in proportion to their LEASEHOLD TENANCY Lessee pays the landowner a fixed rent for the use and cultivation of land

The tenant-lessee always shoulders all items or production except land

The tenant is the sole manager of the farm holding The tenant or lessee gets the whole produce with mere obligation to pay

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contributions.

rental

vi. Family Sized Farm Under the Agricultural Land Reform Code or RA3844, a family sized farm constitutes an area of farmland that permits efficient use of labor and capital resources of the farm family and will produce an income sufficient to provide a modest standard of living to meet a farm familys needs for food, clothing, shelter and education with possible allowance for payment of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income. vii. Retention Limit Except as otherwise provided, no person may own or retain, directly, any public or private agricultural land, the size of which shall vary according to factor governing a viable family-sized farm, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC), but in no case shall the retention by the landowner exceed 5 hectares. The right to foreclose the area to be retained, which shall be compact or contiguous, shall pertain, to the landowner. viii. Rights of Child of Landowners under CARL 1. 3 hectares- may be awarded to each child of the landowner, regardless of the number of children the landowner has, and whether they are legitimate or illegitimate, provided that the filiation of the children who are illegitimate must be lawfully recognized by the landowner or duly established according to law, subject to the following qualifications: That he is at least 15 years old; That he is actually tiling the land or directly managing the farm. 2. Children of landowners who are qualified, shall be given preference in the distribution of the land of their parents. ix. Exception to the Retention Limit:

1. Landowners whose lands have been covered by PD No. 27 shall be allowed to keep the area originally retained by them thereunder. NOTE: Under PD 27, landowners covered are entitled to retain 7 hectares of his landholding devoted to the production of rice and corn. 2. Original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of CARL (June 15, 1988) shall retain the same areas as long as they continue to cultivate said homestead. x. Qualified Beneficiaries: 1. landless residents of the same barangay; or in the absence thereof 2. landless residents of the same municipality in the following order of priority: agricultural lessees and share tenants; regular farm workers; seasonal farm workers; other farm workers; actual tillers or occupants of public lands; collective or cooperatives of the above beneficiaries; and others directly working on the land. xi. Preferential Right of Children in the Distribution of Privatelyowned Agricultural Land Covered by CARL Children of landowners who are qualified shall be given preference in the distribution of the land of their parents. Provided, further, that actual tenant-tillers in the landholding shall not be ejected or remove therefrom. xii. Qualifications of a Beneficiary: 1. his willngness; 2. aptitude; 3. ability to cultivate and make land as productive as possible. xiii. Disqualifications: 1. Any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue as such beneficiary.

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2. Beneficiaries under PD 27 who have culpably sold, disposed of, or abandoned their land are disqualified to become beneficiaries under their program. xiv. Distribution Ceiling: No qualified beneficiary may own more than 3 hectares of agricultural land. Beneficiaries shall be awarded an area not exceeding 3 hectares, which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits. xv. Circumstances when Distribution Ceiling may be Exceeded The beneficiaries may opt for collective ownership, such as coworkers or farmers cooperative or some other form of collective organization. In such case, the total area that may be awarded shall not exceed the total number of workers or members of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective organization, as the case may be. xvi. Landless Beneficiary: For purposes of this Act, a landless beneficiary is one who owns less than 3 hectares of agricultural land. As a landless beneficiary, he can demand that the award ceiling of 3 hectares shall be completed which may be taken from other available private agricultural lands to be acquired either by voluntary offer to sell, voluntary land transfer or compulsory modes under the CARL. xvii. Rights given to Actual Tenant Tillers or Farmers in Place in cases where the Land Tilled by them is Transferred to a Qualified Beneficiary: a. Actual tenant-tillers in the landholding shall not be rejected or removed therefrom.

b. Farmers already in place and those not accommodated in the distribution of privately owned lands will be given preferential rights in the distribution of lands from the public domain. xviii. Rights given to those qualified beneficiaries who were not accommodated due to insufficiency of lands to be distributed If due to landowners retention rights or to the number of tenants, lessees, or workers on the land, there is not enough land to accommodate any or some of them, they may be granted ownership of other lands available for distribution under this Act, at the option of the beneficiaries. xix. Conditions for Sale or Conveyance to Third Persons of Land Retained The sale or disposition of agricultural lands retained by a landowner shall be valid as long as: the sale or disposition of agricultural lands after the effectivity of CARL should conform with the provisions of the said law, otherwise, such sale or disposition shall be null and void. the tenants or lessees preferential right to purchase the same should be recognized. In case the land is sold to third persons without his knowledge, he shall have a right to redeem the land in the manner prescribed by law. the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholdings ceilings provided for in this Act. transferees of agricultural lands shall furnish the appropriate Register of Deeds and the PARC with an affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The RD shall not register the transfer of any agricultural land without the submission of this sworn statement together with proof of service of a copy thereof to the PARC.

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xx. Rights of the said TenantFarmer under CARL when Area selected for Retention by Landowner is Tenanted: 1. In case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. If the choice is to remain in the retained area- he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. If the choice is to be a beneficiary- he loses his right as a leaseholder to the land retained by the landowner. Period to exercise the option- the tenant must exercise this option within a period of 1 year from the time the landowner manifests his choice of the area for retention. 2. In all case, the security of tenure of the farmer or farm workers on the land prior to the approval of this Act shall be respected. xxi. Modes of Acquiring Private Agricultural Lands under CARL: 1. Voluntary Offer to Sell- by and between the landowner and the government. Purchase price agreed upon by parties and paid by LBP. Exempt from taxes. 2. Voluntary Land Transferdirectly by and between the landowner and the beneficiary. Purchase price agreed upon by said parties but paid by LBP subject to approval of DAR. Not exempt from taxes. Conditions for Voluntary Land Transfer: a. All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation of the CARP. Negotiations between the landowners and qualified beneficiaries covering any voluntary land transfer which remain unresolved after 1 year

a. b.

c.

d.

e.

shall not be recognized and such land shall instead be acquired by the government and transferred pursuant to this Act. b. The terms and conditions of such transfer shall not be less favorable to the transferee than those of the governments standing offer to purchase from the landowner and to resell to the beneficiaries, if such offers have been made and are fully known to both parties. 3. Compulsory Acquisitionundertaken by government, thru DAR, in the exercise of police power if landowner fails to avail of the two modes or when parties in the second mode disagrees on the price of the land. xxii. Procedure for the Acquisition of Private Lands under CARL Identification of the land, the landowners and the beneficiaries. DAR shall sent notice to acquire the land with offer to pay the corresponding value to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the municipal building and barangay shall of the place where the property is located. Within 30 days from the date of receipt of written notice, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. In case landowner accepts the offer, the LBP shall pay the landowner the purchase price of land within 30 days after he executes and delivers a deed of transfer in favor of the Government and surrenders the Certificate of Title and other muniments of title. In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine just compensation. After the expiration of the above period, the matter is deemed submitted for decision. The

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DAR shall decide the case within 30 days after it is submitted for decision. f. Upon receipt by the landowner of the corresponding payment or in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or LBP bonds, the DAR shall take immediate possession of the land and shall request the proper RD to issue TCT in the name of the Republic. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. g. Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. xxiii. Compensation In determining just compensation, the following shall be considered: 1. the cost of acquisition of the land; 2. the current value of like properties, 3. its nature, actual use and income, 4. the sworn valuation by the owner, the tax declaration, 5. the assessment made by government assessors, 6. additional factor, such as: the social and economic benefits contributed by the farmers and the farm workers and by government to the property non -payment of taxes or loans secured from any government financing institution on the said land. xxiv. Amount of Just Compensation for Lands Acquired under CARL The LBP shall compensate the landowner in such amount:

1. as may be agreed upon by the landowner and the DAR and LBP; or 2. as may be finally determined by the court as just compensation for the land. xxv. Determination of Just Compensation by DAR for Lands Acquired under CARL is not an usurpation of Judicial Function According to the Supreme Court, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch of official of the government. A reading of Section 16 (d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. The determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party who may bring the matter to the court of proper jurisdiction for final determination of just compensation. The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function (Nicolas vs. Manaay GR No. 79777). Payments to the Landowner
1. CASH payment, under the following terms and conditions: a. Lands 24 hectares and below- 35% cash + balance to be paid in government financial instruments negotiable at any time. b. Lands above 24 hectares and up to 50 hectares- 30% cash + balance to be paid in government financial instruments negotiable at any time. c. For lands above 50 hectares, insofar as the excess in 50 hectares is concerned25% cast + balance to

Payments by the Beneficiary


1. Payments shall be made to the LBP in 30 annual installments at 6% interest per annum; 2. Payments for the first 3 years shall be at reduced amounts as may be established by the PARC; 3. Payments corresponding to the first 5 annual amortizations may not exceed 5% of the value of the annual gross production as established by DAR. 4. Annual payments as scheduled by the LBP that exceeds 10% of the annual gross production

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be paid in government financial instruments negotiable at any time. 2. SHARES OF STOCK in GOCC, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC. 3. TAX CREDITS which can be used against any tax liability. 4. LBP BONDS

after the 5th year of amortizations, may be entitled to a reduction of the interest rate provided in this Act, or a reduction of the principal obligation, whichever is deemed beneficial and less burdensome to the beneficiary and affordable. This is provided that the failure to produce is not attributable to the beneficiarys fault like drought, typhoon, fire, flood or other natural calamities or fortuitous circumstances.

reasonably. At least that after 10 continuous years of enjoyment of the governments bounty the tenantfarmer has not more reason to complain that he has been neglected by the government. SECTION 27. Transferability of Awarded Lands. Lands acquired by beneficiaries under this Act may not be sold, transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified beneficiaries for a period of ten (10) years: provided, however, that the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be given due notice thereof by the BARC. If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph. In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has already paid, together with the value of improvements he has made on the land. SECTION 28. Standing Crops at the Time of Acquisition. The landowner shall retain his share of any standing crops unharvested at the time the DAR shall take possession of the land under Section 16 of the Act, and shall be given a reasonable time to harvest the same. Administrative Adjudication SECTION 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested

xxvi. Effects of Failure to Pay by the Beneficiary All lands awarded under RA 6657 are mortgaged with the LBP which has a first lien thereof, failure on the part of the awardee to pay at least 3 aggregate annual amortizations, shall be sufficient ground for the foreclosure of the mortgage. Foreclosure has the effect of forfeiture of the beneficiarys landholding in favor of the government and thereafter the DAR shall award such forfeited landholdings to other qualified beneficiary. a. Limitation: Lands acquired by beneficiaries under this Act may not be sold, transferred or conveyed for a period of 10 years, except: 1. through hereditary succession, or 2. when sold, transferred or conveyed to: the LBP, or the government, or other qualified beneficiaries b. Rationale for 10 years Limitation: The reason is that after making use of land deriving maximum benefits and income therefrom for the period of 10 years, the awardee must have already attained his dream of providing proper education for his children or at least his hunger for the soil which he can call his own, must have been satisfied

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with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination for every action or proceeding before it. It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories and issue subpoena, and subpoena duces tecum, and enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and indirect contempts in the same manner and subject to the same penalties as provided in the Rules of Court. Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their organizations in any proceedings before the DAR: provided, however, that when there are two or more representatives for any individual or group, the representatives should choose only one among themselves to represent such party or group before any DAR proceedings. Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory. SECTION 51. Finality of Determination. Any case or controversy before it shall be decided within thirty (30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be allowed. Any order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy thereof. SECTION

52. Frivolous Appeals. To discourage frivolous or dilatory appeals from the decisions or orders on the local or provincial levels, the DAR may impose reasonable penalties, including but not limited to fines or censures upon erring parties. SECTION 53. Certification of the BARC. The DAR shall not take cognizance of any agrarian dispute or controversy unless a certification from the BARC that the dispute has been submitted to it for mediation and conciliation without any success of settlement is presented: provided, however, that if no certification is issued by the BARC within thirty (30) days after a matter or issue is submitted to it for mediation or conciliation the case or dispute may be brought before the PARC. Judicial Review SECTION 56. Special Agrarian Court. The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court. The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province.n the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations. The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts. The Special Agrarian Courts shall have the powers and prerogatives inherent in or belonging to the Regional Trial Courts. SECTION 57. Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian

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Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. SECTION 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: provided, that the beneficiary shall have fully paid his obligation. SECTION 66. Exemptions from Taxes and Fees of Land Transfers. Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof; provided, that all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled. SECTION 67. Free Registration of Patents and Titles. All Registers of Deeds are hereby directed to register, free from payment of all fees and other charges, patents, titles and documents required for the implementation of the CARP. SECTION 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program. SECTION 73. Prohibited Acts and

Omissions. The following are prohibited: (a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective ownership by farmer-beneficiaries. (b) The forcible entry or illegal detainer by persons who are not qualified beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian Reform Program. (c) The conversion by any landowner of his agricultural land into any nonagricultural use with intent to avoid the application of this Act to his landholdings and to dispossess his tenant farmers of the land tilled by them. (d) The willful prevention or obstruction by any person, association or entity of the implementation of the CARP. (e) The sale, transfer, conveyance or change of the nature of lands outside of urban centers and city limits either in whole or in part after the effectivity of this Act. The date of the registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the date of the issuance of the tax declaration to the transferee of the property with respect to unregistered lands, as the case may be, shall be conclusive for the purpose of this Act. (f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act. SECTION 74. Penalties. Any person who knowingly or willfully violates the provisions of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00), or both, at the discretion of the court. If the offender is a corporation or association, the officer responsible therefore shall be criminally liable.

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K. Salient Provisions of RA NO. 9231 amending RA NO. 7610 SEC. 2. Section 12 of the same Act, as amended, is hereby further amended to read as follows: SEC. 12. Employment of Children. Children below fifteen (15) years of age shall not be employed except: 1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education; or 2) Where a childs employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the Employment contract is concluded by the childs parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child: (b) The employer shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisitions of the child. In the above-exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. For purposes of this Article, the term "child" shall apply to all persons under eighteen (18) years of

age." SEC. 3. The same Act, as amended, is hereby further amended by adding new sections to be denominated as Sections 12-A, 12-B, 12-C, and 12-D to read as follows: SEC. 12-A. Hours of Work of a Working Child. Under the exceptions provided in Section 12 of this Act, as amended: (1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours at any given day; (2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a week: (3) No child below fifteen (15) years of age shall be allowed to work between eight oclock I the evening and sic oclock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten oclock in the evening and six oclock in the morning of the following day. SEC. 12-B. Ownership, Usage and administration the Working Childs Income. The wages, salaries, earnings and other income of the working child shall belong to him/her in ownership and shall be set aside primarily for his/her support, education or skills acquisition and secondarily to the collective needs of the family: Provided, That not more than twenty percent (20%) of the childs income may be used for the collective needs of the family. The income of the working child and/or the property acquired through the work of the child shall be administered by both parents. In the absence or incapacity of either of the parents, the other parent shall administer the same. In case both parents are absent or incapacitated, the order preference on parental authority as provided for under the Family Code shall apply. Sec. 12-C. Trust fund to Preserve Part of the Working Childs Income. The parent or legal guardian of a working child below eighteen (18) years of age shall set up a trust fund for at least thirty percent (30%) of the earnings of the

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child whose wages and salaries from work and other income amount to at least two hundred thousand pesos (P200,000.00) annually, for which he/she shall render a semi-annual accounting of the fund to the Department of Labor and Employment, in compliance with the provisions of this Act. The child shall have full control over the trust fund upon reaching the age of majority. Sec. 12-D. Prohibition Against Worst Forms of Child Labor. No child shall be engaged in the worst forms of child labor. The phrase "worst forms of child labor" shall refer to any of the following: (1) All forms of slavery, as defined under the "Anti-trafficking in Persons Act of 2003", or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; or (2) The use, procuring, offering or exposing of a child for prostitution, for the production of pornography or for pornographic performances; or (3) The use, procuring or offering of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; or (4) Work which, by its nature or the circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children, such that it: a) Debases, degrades or demeans the intrinsic worth and dignity of a child as a human being: or b) Exposes the child to physical, emotional or sexual abuse, or is found to be highly stressful psychologically or may prejudice morals; or c) Is performed underground, underwater or at dangerous heights; or d) Involves the use of dangerous machinery, equipment and tools such as power-driven or explosive power-actuated tools; or e) Exposes the child to physical danger such as, but not limited to the dangerous feats of balancing, physical strength or contortion, or which requires the manual transport of heavy loads; or f) Is

performed in an unhealthy environment exposing the child to hazardous working conditions, elements, substances, coagents or processes involving ionizing, radiation, fire, flammable substances, noxious components and the like, or to extreme temperatures, noise levels, or vibrations; or g) Is performed under particularly difficult conditions: or h) Exposes the child to biological agents such as bacteria, fungi, viruses, protozoans, nematodes and other parasites; or I) Involves the manufacture or handling of explosives and other pyrotechnic products. Sec. 4. Section 13 of the same Act is hereby amended to read as follows: SEC. 13. Access to Education and Training for Working Children a) No child shall be deprived of formal or non-formal education. In all cases of employment allowed in this Act, the employer shall provide a working child with access to at least primary and secondary education. b) To ensure and guarantee the access; of the working child to education and training, the Department of Education (DEPED) shall: (1) formulate, promulgate, and implement relevant and effective course designs and educational programs; (2) conduct the necessary training for the implementation of the appropriate curriculum for the purpose; (3) ensure the availability of the needed educational facilities and materials; and (4) conduct continuity research and development program for the necessary and relevant alternative education of the working child. c) The DEPED shall promulgate a course design under its nonformal education program aimed at promoting the intellectual, moral and vocational efficiency to working children who have not undergone or finished elementary or secondary education. Such course design shall integrate the learning process deemed most effective under given circumstances.

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SEC. 5. Section 14 of the same Act is hereby amended to read as follows: Sec.14. Prohibition on the Employment of Children in Certain Advertisements. No child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic beverage, intoxicating drinks, tobacco and its byproducts, gambling or any for of violence or pornography. -ENDRespect the works of others. Liberty Roxas Ll.B

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