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LABOR CODE

ARTICLE 1. Name of Decree.


This Decree shall be known as the "Labor Code of the Philippines".

ART. 2. Date of effectivity.


- This Code shall take effect six (6) months after its promulgation.

Labor standards law


As that which sets out the least or basic terms, conditions and benefits of employment that employers
must provide or comply with and to which employees are entitled as a matter of legal right.

Labor relations law


Is that part of labor law which defines the status, rights and duties, and the institutional mechanisms that
govern the individual and collective interactions of employers, employees or their representatives.

Social legislation
As those laws that provide particular kinds of protection or benefits to society or segments thereof in
furtherance of social justice.

Social justice
It is neither communism nor despotism nor atomism nor anarchy, but the humanization of laws and the
equalization of social and economic forces of the State so that justice in its rational and objectively
secular conception may at least be approximated.

Social justice means the promotion of the welfare of all people, of the adaptation by the government of
measures calculated to insure economic stability of the component elements of society through the
maintenance of a proper economic and social equilibrium in the interrelation of the members of the
community, constitutionally, through the adoption of measures legally justifiable, or extra constitutionally,
through the exercise f powers underlying the existence of all governments, on the time honored principle
of Salus Populi Est Suprema Lex.

Social justice does not champion division of property or equality of economic status, what it and the
constitution do guarantee are equality of opportunity, equality of political rights, equality before the law,
equality between values given and received, and equitable sharing of the social and material goods on the
basis of efforts exerted in their production.

ART. 3. Declaration of basic policy.


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

ART. 4. Construction in favor of labor.


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

Basic Management rights:


1) Right to ROI
2) Right to prescribe Rules
Employers have the right to make reasonable rules and regulations for the government of their
employees, with knowledge of an established rule, enter the service, the rule becomes a part of
the contract of employment. Company policies and regulations are, unless shown to be grossly
oppressive or contrary to law, generally binding and valid on parties.

3) Right to select employees


The right of the employer to select employees is absolute and is subject only to law and previous
agreement between the employer and its union (closed shop bargaining agreement). If the
employer compel the employee to give him work against the latters will, this is servitude. If the
employee can compel the employer to give him work against the latters will, this is oppression.
4) Right to transfer or discharge employees.

ART. 5. Rules and regulations.


- The Department of Labor and other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of
their adoption in newspapers of general circulation

ART. 6. Applicability. - All rights and benefits granted to workers under this Code shall, except as may
otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural.

The applicability of the labor code extends to GOCCs, the test is the manner of its creation. If the GOCC
has an original charter (Statute creating it) it is governed by the civil service law and if it is created under
the provisions of our general incorporation statute (corporation code) it is governed by the labor code.
This rule is the result of the constitutional provision which includes GOCCs with original charter withn
the coverage of the civil service.

Fundamental principles

Constitutional Provisions
Article 2
Section 9.
The State shall promote a just and dynamic social order that will ensure the prosperity and independence
of the nation and free the people from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living, and an improved quality of life for all.
Section 10.
The State shall promote social justice in all phases of national development.
Section 11.
The State values the dignity of every human person and guarantees full respect for human rights.
Section 13.
The State recognizes the vital role of the youth in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in public and civic affairs.
Section 14.
The State recognizes the role of women in nation-building, and shall ensure the fundamental equality
before the law of women and men.
Section 18.
The State affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare.
Section 20.
The State recognizes the indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investments.

Article 3
Section 1.
No person shall be deprived of life, liberty, or property without due process of law, nor shall any person
be denied the equal protection of the laws.

Section 4.
No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government for redress of grievances.

Section 7.
The right of the people to information on matters of public concern shall be recognized. Access to official
records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be afforded the citizen, subject to
such limitations as may be provided by law.
Section 8.
The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.
Section 10.
No law impairing the obligation of contracts shall be passed.
Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-
judicial, or administrative bodies.

Section 18.
(2) No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party
shall have been duly convicted.

Article 13
Section 1.
The Congress shall give highest priority to the enactment of measures that protect and enhance the right
of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its
increments.
Section 2.
The promotion of social justice shall include the commitment to create economic opportunities based on
freedom of initiative and self-reliance.

LABOR
Section 3.
The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.

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

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

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

Civil Code

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

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good. Therefore, such contracts are subject
to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.
Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever,
shall be valid.

Art. 1704. In collective bargaining, the labor union or members of the board or committee signing the
contract shall be liable for non-fulfillment thereof.

Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.

Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred
for food, shelter, clothing and medical attendance.

Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

Art. 1710. Dismissal of laborers shall be subject to the supervision of the Government, under special
laws.

Art. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of or
injuries to their laborers, workmen, mechanics or other employees, even though the event may have been
purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in
the course of the employment. The employer is also liable for compensation if the employee contracts any
illness or disease caused by such employment or as the result of the nature of the employment. If the
mishap was due to the employee's own notorious negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation. When the employee's lack of due care contributed to his
death or injury, the compensation shall be equitably reduced.

Art. 1712. If the death or injury is due to the negligence of a fellow worker, the latter and the employer
shall be solidarily liable for compensation. If a fellow worker's intentional malicious act is the only cause
of the death or injury, the employer shall not be answerable, unless it should be shown that the latter did
not exercise due diligence in the selection or supervision of the plaintiff's fellow worker.

Labor Code

ART. 3. Declaration of basic policy.


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

ART. 4. Construction in favor of labor.


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

Basic Management rights:


1) Right to ROI
2) Right to prescribe Rules
Employers have the right to make reasonable rules and regulations for the government of their
employees, with knowledge of an established rule, enter the service, the rule becomes a part of
the contract of employment. Company policies and regulations are, unless shown to be grossly
oppressive or contrary to law, generally binding and valid on parties.

3) Right to select employees


The right of the employer to select employees is absolute and is subject only to law and previous
agreement between the employer and its union (closed shop bargaining agreement). If the
employer compel the employee to give him work against the latters will, this is servitude. If the
employee can compel the employer to give him work against the latters will, this is oppression.
4) Right to transfer or discharge employees.

ART. 166. Policy. (employees compensation and insurance fund)


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

Article. 211. Declaration of Policy. - A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;

(b) To promote free trade unionism as an instrument for the enhancement of democracy and the
promotion of social justice and development;

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

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

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

(f) To ensure a stable but dynamic and just industrial peace; and

(g) To ensure the participation of workers in decision and policy-making processes affecting their rights,
duties and welfare.
B. To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or
administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or
other terms and conditions of employment, except as otherwise provided under this Code. (As amended
by Section 3, Republic Act No. 6715, March 21, 1989).

DEFINITIONS

Article. 212. Definitions.


- (a) "Commission" means the National Labor Relations Commission or any of its divisions, as the case
may be, as provided under this Code.
(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional
offices established under Presidential Decree No. 1, in the Department of Labor.

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

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

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

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

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

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

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

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

(k) "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.
(l) "Labor dispute" includes any controversy or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the
terms and conditions of employment, regardless of whether the disputants stand in the proximate relation
of employer and employee.

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

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

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

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

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

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

(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or
premises used as runaway shops, of the employer struck against, as well as the immediate vicinity
actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said
establishment.

Article 255. Exclusive bargaining representation and workers participation in policy and decision-
making.
The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees shall have the
right at any time to present grievances to their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules
and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and
decision-making processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor-management
councils shall be elected by at least the majority of all employees in said establishment.

Article. 277. Miscellaneous provisions.


- (a) All unions are authorized to collect reasonable membership fees, union dues, assessments and fines
and other contributions for labor education and research, mutual death and hospitalization benefits,
welfare fund, strike fund and credit and cooperative undertakings.

Recruitment and placement of workers

ART. 13. Definitions.


(a) "Worker" means any member of the labor force, whether employed or unemployed.
(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be
deemed engaged in recruitment and placement.
(c) "Private fee-charging employment agency" means any person or entity engaged in recruitment and
placement of workers for a fee which is charged, directly or indirectly, from the workers or employers
or both.
(d) "License" means a document issued by the Department of Labor authorizing a person or entity to
operate a private employment agency.
(e) "Private recruitment entity" means any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the
workers or employers.
(f) "Authority" means a document issued by the Department of Labor authorizing a person or association
to engage in recruitment and placement activities as a private recruitment entity.
(g) "Seaman" means any person employed in a vessel engaged in maritime navigation.
(h) "Overseas employment" means employment of a worker outside the Philippines.
(i) "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by virtue of
an immigrant visa or resident permit or its equivalent in the country of destination.

People vs Pamis
The number of persons is not an essential ingredient of the act of recruitment. Any of the acts mentioned
in the basic rule of article 13 (b) will constitute recruitment and placement even if one prospective worker
is involved. The proviso merely lays down the rule of evidence that where a fee is collected in
consideration of a promise or offer f 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.
Hence the proviso is not made a condition precedent to the act of recruitment but more appropriately
only creates a legal presumption that the person involved is deemed as engages in recruitment and
placement

In order for recruitment to exist the accused must have given the complainant the distinct impression that
she had the power or ability to send the complainant abroad for work, such that the latter was convinced
to part with her money in order to be so employed. Where such act or representation is not proven, there
is no recruitment activity and conviction for illegal recruitment has no basis.

Selective Deployment
SEC. 4. Deployment of Migrant Workers. - The State shall allow the deployment of overseas Filipino
workers only in countries where the rights of Filipino migrant workers are protected. The government
recognizes any of the following as a guarantee on the part of the receiving country for the protection of
the rights of overseas Filipino workers:

(a) It has existing labor and social laws protecting the rights of workers, including migrant workers;

(b) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to


the protection of workers, including migrant workers; and

(c) It has concluded a bilateral agreement or arrangement with the government on the protection of the
rights of overseas Filipino Workers:

Provided, That the receiving country is taking positive, concrete measures to protect the rights of
migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c)
hereof.

In the absence of a clear showing that any of the aforementioned guarantees exists in the country of
destination of the migrant workers, no permit for deployment shall be issued by the Philippine Overseas
Employment Administration (POEA).

The members of the POEA Governing Board who actually voted in favor of an order allowing the
deployment of migrant workers without any of the aforementioned guarantees shall suffer the penalties of
removal or dismissal from service with disqualification to hold any appointive public office for five (5)
years, Further, the government official or employee responsible for the issuance of the permit or for
allowing the deployment of migrant workers in violation of this section and in direct contravention of an
order by the POEA Governing Board prohibiting deployment shall be meted the same penalties in this
section.

For this purpose, the Department of Foreign Affairs, through its foreign posts, shall issue a certification to
the POEA, specifying therein the pertinent provisions of the receiving country's labor/social law, or the
convention/declaration/resolution, or the bilateral agreement/arrangement which protect the rights of
migrant workers.
The State shall also allow the deployment of overseas Filipino workers to vessels navigating the foreign
seas or to installations located offshore or on high seas whose owners/employers are compliant with
international laws and standards that protect the rights of migrant workers.

The State shall likewise allow the deployment of overseas Filipino workers to companies and contractors
with international operations: Provided, That they are compliant with standards, conditions and
requirements, as embodied in the employment contracts prescribed by the POEA and in accordance with
internationally-accepted standards.
SEC. 5. Termination or Ban on Deployment.
- Notwithstanding the provisions of Section 4 hereof, in pursuit of the national interest or when public
welfare so requires, the POEA Governing Board, after consultation with the Department of Foreign
Affairs, may, at any time, terminate or impose a ban on the deployment of migrant workers.

Migrant worker
A person who is to be engaged, is engaged or been engaged in a remunerated activity in a state of which
he is not a legal resident.

SEC. 10. MONEY CLAIMS.


- Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety
(90) calendar days after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.

The law allows claims for money or damages sustained during that period of deployment or
before departure abroad

Jurisdiction retained by the POEA:


a. 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.
b. Disciplinary action cases and other special cases which are administrative in
character, involving employers, principals, contracting partners and Filipino migrant
workers.

Jurisdiction outside the scope of POEA:


a. Those mentioned under section 10 of RA 8042 (Migrant Workers and overseas
Filipinos act)
b. No jurisdiction to enforce foreign judgment
c. No jurisdiction over torts

The liability of the principal/employer and the recruitment/placement agency for any and all claims under
this section shall be joint and several. These provisions shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. 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.

Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages


under this section shall be paid within four (4) months from the approval of the settlement by the
appropriate authority.

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

Serrano vs Gallant
The proviso in the law which provides for three (3) months for every year of the unexpired
term, whichever is less. is unconstitutional since it violates the equal protection clause by
discriminating between OFWS with unexpired term of less than 12 months from those which has
an expired term of more than 12 months and from local employees. Also the proviso was declared
unreasonable since it was over burdensome to the employees thereby violating substantive due
process.

Non-compliance with the mandatory periods for resolutions of cases provided under this section shall
subject the responsible officials to any or all of the following penalties:

(a) The salary of any such official who fails to render his decision or resolutions within the prescribed
period shall be, or caused to be, withheld until the said official complies therewith;

(b) Suspension for not more than ninety (90) days; or

(c) Dismissal from the service with disqualifications to hold any appointive public office for five (5)
years.

Provided, however, that the penalties herein provided shall be without prejudice to any liability which any
such official may have incurred under other existing laws or rules and regulations as a consequence of
violating the provisions of this paragraph.

Termination f employees still requires procedural due process


Instance where the contract of employment was perfected already although the employee has not been
deployed, a breach thereof will subject the breaching party to actual damages.

Death of a seafarer results is always compensable when such death occurred during the term of
employment contract.

Rules regarding disability:


1) The seafarer is entitled to basic pay upon the first day of disability
2) Such temporary state of disability cannot last for more than 120 days except where the sickness
requires medical attendance beyond 120 days but not to exceed 240 days.
3) Failure to declare the total disability or that the seafarer within the 240 days will constitute as a
permanent disability

Conflict between the company designated physician vs a third party physician


If there is a conflict the parties may agree to appoint another physician whose findings will be final. The
failure of the seafarer to follow this procedure will result to him being bound to the decision of the
company designated physician.

ART. 18. Ban on direct-hiring.


No employer may hire a Filipino worker for overseas employment except through the Boards and entities
authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international
organizations and such other employers as may be allowed by the Secretary of Labor is exempted from
this provision.

Another exception to the above provision is Name hires, or those 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.

Side agreements which diminishes the employees pay and benefits as contained in the POEA-approved
contract is void, unless such subsequent agreement is approved by the POEA

Part V Rule 1 section 2 (Minimum provisions of employment contracts)


1) Guaranteed wages for regular working hours and OT pay, as appropriate, which shall not be lower
than the appropriate minimum wage standard set forth in a bilateral agreement or international
convention duly ratified by the host country and the Philippines or not lower than the minimum
wage in the Philippines, whichever is highest.
ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be mandatory for all Filipino
workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or
beneficiaries in the country in accordance with rules and regulations prescribed by the Secretary of Labor.
ART. 23. Composition of the Boards. - (a) The OEDB shall be composed of the Secretary of Labor and
Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, and a representative each of
the Department of Foreign Affairs, the Department of National Defense, the Central Bank, the
Department of Education, Culture and Sports, the National Manpower and Youth Council, the Bureau of
Employment Services, a workers organization and an employers organization and the Executive Director
of the OEDB as members.

(b) The National Seamen Board shall be composed of the Secretary of Labor and Employment as
Chairman, the Undersecretary of Labor as Vice-Chairman, the Commandant of the Philippine Coast
Guard, and a representative each of the Department of Foreign Affairs, the Department of Education,
Culture and Sports, the Central Bank, the Maritime Industry Authority, the Bureau of Employment
Services, a national shipping association and the Executive Director of the NSB as members.

The members of the Boards shall receive allowances to be determined by the Board which shall not be
more than P2,000.00 per month.

(c) The Boards shall be attached to the Department of Labor for policy and program coordination. They
shall each be assisted by a Secretariat headed by an Executive Director who shall be a Filipino citizen
with sufficient experience in manpower administration, including overseas employment activities. The
Executive Director shall be appointed by the President of the Philippines upon the recommendation of the
Secretary of Labor and shall receive an annual salary as fixed by law. The Secretary of Labor shall
appoint the other members of the Secretariat.

(d) The Auditor General shall appoint his representative to the Boards to audit their respective accounts in
accordance with auditing laws and pertinent rules and regulations. chanroblesvirtuallawlibrary

ART. 24. Boards to issue rules and collect fees. - The Boards shall issue appropriate rules and regulations
to carry out their functions. They shall have the power to impose and collect fees from employers
concerned, which shall be deposited in the respective accounts of said Boards and be used by them

ART. 25. Private sector participation in the recruitment and placement of workers. - Pursuant to national
development objectives and in order to harness and maximize the use of private sector resources and
initiative in the development and implementation of a comprehensive employment program, the private
employment sector shall participate in the recruitment and placement of workers, locally and overseas,
under such guidelines, rules and regulations as may be issued by the Secretary of Labor.

POEA retains original exclusive Jurisdiction over cases:

1) Involving violations f POEA rules and regulations


2) Disciplinary cases
3) Cases which are administrative in character involving OFWs.
ART. 25. Private sector participation in the recruitment and placement of workers.
Pursuant to national development objectives and in order to harness and maximize the use of private
sector resources and initiative in the development and implementation of a comprehensive employment
program, the private employment sector shall participate in the recruitment and placement of workers,
locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of
Labor.

ART. 26. Travel agencies prohibited to recruit.


Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of
recruitment and placement of workers for overseas employment whether for profit or not.

Other individuals disqualified from recruiting :


1) Travel agencies
2) Sales agencies of airline companies
3) Persons with derogatory records such as those convicted for illegal recruitment
4) Persons guilty of a crime involving moral turpitude

ART. 27. Citizenship requirement.


Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the
authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be
permitted to participate in the recruitment and placement of workers, locally or overseas.

ART. 28. Capitalization.


All applicants for authority to hire or renewal of license to recruit are required to have such substantial
capitalization as determined by the Secretary of Labor.

Local employment:
1) 200k for single proprietorship and partnerships
2) 500k corp

Overseas employment
1) 2M for all

ART. 29. Non-transferability of license or authority.


No license or authority shall be used directly or indirectly by any person other than the one in whose
favor it was issued or at any place other than that stated in the license or authority be transferred,
conveyed or assigned to any other person or entity. Any transfer of business address, appointment or
designation of any agent or representative including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of Labor.

ART. 30. Registration fees.


The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license
or authority.

ART. 31. Bonds.


All applicants for license or authority shall post such cash and surety bonds as determined by the
Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and
regulations, and terms and conditions of employment as may be appropriate.

The bond set forth under Art 31 is not limited to monetary awards arising out employment
contracts but extends to the right of the POEA to against such bond for violations by the recruiter
of the conditions for its license. Hence the Bond under article 31 is different from the bond
required pending appeal set forth in article 223 since the latter is for the sole purpose of
guaranteeing payment of the monetary award to be adjudge by the courts.

The bond under article 31 of the labor code is intended only for employment related claims and
for violations of labor law. Hence garnishment may not be allowed even if it stems out from the
agencys to settle expenses necessary for their operations (bills, Meralco and stuff)

Once the bond has been validly garnished or withdrawn the agency must replenish the same.
Failure to replenish within 15 days from the date of receipt of notice from the POEA that the
bonds or deposits in escrow, or any part of it had been garnished, shall cause the suspension of the
license

Requirements for release of bond for local employment:


1) Voluntary surrender of license
2) The agency must post a surety bond of similar amount from a bonding company accredited
by the insurance commission
3) The surety bond must be valid for 3 years from the expiration of the license

Requirements for release of bond for overseas employment:


1) Voluntary surrender of license
2) The agency must post a surety bond of similar amount from a bonding company accredited
by the insurance commission
3) The surety bond must be valid for 4 years from the expiration of the license
4) Submission of clearance from the NLRC and the POEA

ART. 32. Fees to be paid by workers.


Any person applying with a private fee-charging employment agency for employment assistance shall not
be charged any fee until he has obtained employment through its efforts or has actually commenced
employment. Such fee shall be always covered with the appropriate receipt clearly showing the amount
paid. The Secretary of Labor shall promulgate a schedule of allowable fees.

Chargeable fees:
1) Placement fees for local employment
A licensed private recruitment and placement agency for local employment may charge a
worker placement fee which shall not exceed 20% of the workers first months basic salary.
In no case shall such fee be charged prior to the actual commencement of employment
2) Placement and documentation fees for Overseas employment
a. Fees and cost chargeable to principals
Unless otherwise provided, the principal shall be responsible for the payment of the
following:
Visa fee
Airfare
POEA processing fee
OWWA membership fee
b. Fees chargeable to workers
Except where the prevailing system in the country where the worker is to be
deployed, either by law, policy or practice, does not allow the charging or collection
of placement and recruitment fee, a land-based agency may charge and collect from
its hired workers a placement fee in an amount equivalent to one month salary,
exclusive of documentation costs.

In the even that the recruitment agency agrees to perform documentation services, the
worker shall pay only the actual costs of the document which shall be covered by
official receipts.

The above mentioned placement and documentation costs are the only authorized
payments that may be collected from a hired worker. No other charfes in whatever
form, manner or purpose, shall be imposed on and be paid by the worker without
prior approval of the POEA.

Such fees shall be collected from a hired worker only after he has obtained
employment through the facilities of the recruitment agency.

3) Service Fees
A licensed private recruitment and placement agency may charge the employer service fee
which shall not exceed 20% of the annual salary of the worker. In no case shall the service fee
be deducted from the workers salary. Transportation of the worker from the place of origin to
the place of work shall be charged against the employer and shall in no case be deducted from
the workers salary.

ART. 33. Reports on employment status.


Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the
coverage of this Title to submit a report on the status of employment, including job vacancies, details of
job requisitions, separation from jobs, wages, other terms and conditions and other employment data.

ART. 34. Prohibited practices.


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

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

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

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.

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

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

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

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

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

(i) To substitute or alter employment contracts approved and verified by the Department of Labor
from the time of actual signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of Labor;

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

(k) To withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations other than those authorized under this Code and its implementing
rules and regulations.
For comments please read under illegal recruitment portion

ART. 35. Suspension and/or cancellation of license or authority.


The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by the Ministry of
Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other
applicable laws, General Orders and Letters of Instructions.

Recruitment violations that may cause the imposition of administrative sanctions (suspension or
cancelation):
1) Misrepresentation for the purpose of securing a license or renewal thereof:
a. By giving false testimonies
b. By giving falsified documents
2) Engaging in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the RP
3) Charging of any fee before employment is obtained for an applicant worker
4) Charging of any fee in amount exceeding the allowable rate
5) Obstructing inspections by dole
6) Acts constituting illegal recruitment

Both the POEA and the secretary of labor may exercise concurrent jurisdiction to suspend or
cancel a license. The POEA was granted jurisdiction by the Labor secretary by the power vested
in him under article 36 of the LC allowing granting him quasi legislative power to promulgate
rules and regulations to carry out the objectives and implement the provisions governing said
activities.

A recruitment agency is solidarily liable for the unpaid salaries of a worker recruited form
employment with a foreign principal. The solidary liability of the parties continuous to exist
despite the fact that the relationship between the agency and the principal has already terminated
provided that no notice of such termination was given to the employee. This rule is supported
under article 1921 of the NCC which provides that if the agency has been entrusted for the
purpose of contracting with specified persons, its revocation shall not prejudice the latter if they
were not given notice thereof. Further, per Catan vs NLRC, the obligations covenanted in the
recruitment agreement entered into by and between the local agent and its foreign principal are
not coterminous with the term of the agency agreement so that if either or both of the parties
decide to end the agreement, the responsibilities of such parties towards the contracted employees
under the agreement do not at all end. It extends up to and until the expiration of the employment
contracts of the employees recruited an employed pursuant to the said recruitment agreement.
Otherwise, this will render nugatory the very purpose for which the law governing the
employment of workers for foreign jobs abroad was enacted.

Basis of solidary liability of the agency and the foreign principal:


1) Submission of a verified undertaking which provided that the agency assumed all
responsibilities for the proper use of its license and the proper implementation of the
employment contracts with the workers it recruited and deployed for overseas employment
2) Submission of a formal appointment or agency contract executed by the foreign-based
employer authorizing the agency to recruit and hire personnel for the former. This contained a
provision empowering the agency to sue and be sued jointly and solidarily with the foreign
principal for any violations of the recruitment agreement and the contracts of employment.
3) The posting of bonds to guarantee compliance with prescribed recruitment procedures and
terms of employment as appropriate.

The rule on solidary liability of the agency is not absolute and is subject to exceptions depending
on the peculiar circumstances surrounding a particular case, such as the case where the employees
themselves insisted to go back to the employer despite sufficient warning given by the agency as
to the insolvency of the employer, to the extend that they executed written waivers for the same

ART. 36. Regulatory power.


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

ART. 37. Visitorial Power.


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

Illegal recruitment
(RA 10022)

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad, whether
for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under
Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of
the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers
or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, whether committed by any person, whether a non-
licensee, non-holder, licensee or holder of authority:

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

"(b) To furnish or publish any false notice or information or document in relation to recruitment
or employment;

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

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

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

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

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

"(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof by
the parties up to and including the period of the expiration of the same without the approval of the
Department of Labor and Employment;

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

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

"(l) Failure to actually deploy a contracted worker without valid reason as determined by the
Department of Labor and Employment;
"(m) Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage; and

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

"Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large scale
if committed against three (3) or more persons individually or as a group.

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

"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per
annum, which will be used for payment of legal and allowable placement fees and make the
migrant worker issue, either personally or through a guarantor or accommodation party, postdated
checks in relation to the said loan;

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

"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the
latter's employment contract has been prematurely terminated through no fault of his or her own;

"(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo health examinations only from specifically designated medical clinics,
institutions, entities or persons, except in the case of a seafarer whose medical examination cost is
shouldered by the principal/shipowner;

"(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo training, seminar, instruction or schooling of any kind only from specifically
designated institutions, entities or persons, except fpr recommendatory trainings mandated by
principals/shipowners where the latter shoulder the cost of such trainings;

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

"(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas


Filipino worker or deduct from his or her salary the payment of the cost of insurance fees,
premium or other insurance related charges, as provided under the compulsory worker's insurance
coverage.
"The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having ownership, control, management or
direction of their business who are responsible for the commission of the offense and the
responsible employees/agents thereof shall be liable.

"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the
Secretary of Labor and Employment, the POEA Administrator or their duly authorized
representatives, or any aggrieved person may initiate the corresponding criminal action with the
appropriate office. For this purpose, the affidavits and testimonies of operatives or personnel from
the Department of Labor and Employment, POEA and other law enforcement agencies who
witnessed the acts constituting the offense shall be sufficient to prosecute the accused.

"In the prosecution of offenses punishable under this section, the public prosecutors of the
Department of Justice shall collaborate with the anti-illegal recruitment branch of the POEA and,
in certain cases, allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers
who act as prosecutors in such cases shall be entitled to receive additional allowances as may be
determined by the POEA Administrator.

"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases
punishable under other existing laws, rules or regulations."

Overseas Filipino worker


Refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a
state of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a
government ship used for miliatry or non-commercial purposes or on an installation located offshore or
on the high seas; to be used interchangeably with migrant worker.

Private employment agency


Means any person or entity engaged in the recruitment and placement of workers for a fee which is
charged directly or indirectly, from the workers or employers or both.

License
Means a document issued by the Department of Labor authorizing a person or entity to operate a private
employment agency.

Private recruitment entity


Means any person or association engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from the workers or employers.

Authority
Means a document issued by the Department of Labor authorizing a person or association to engage in
recruitment and placement activities as a private recruitment entity.

2 Manners by which illegal recruitment may be committed:


1) By a person who has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and he undertakes either any activity within the
meaning of "recruitment and placement"
2) By any person with or without license or authority commits any of the acts mentioned in Sec 6 of
RA 8042 as amended by RA 10022

SEC. 7. (RA 8042 as amended by RA 10022) Penalties.

"(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less
than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One
million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).

"(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor
more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined therein.

"Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

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

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

"In every case, conviction shall cause and carry the automatic revocation of the license or registration of
the recruitment/manning agency, lending institutions, training school or medical clinic."

Simple Illegal Recruitment


Is the commission of the offense of illegal recruitment without it being committed by a syndicate (if
carried out by a group of three (3) or more persons conspiring or confederating with one another.) or in a
large scale (if committed against three (3) or more persons individually or as a group.)

Economic sabotage
Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage

Venue:
A criminal action arising from illegal recruitment shall be filed with the RTC of the province 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 over the case to the
exclusion of the other courts.

Prescriptive period
Actions for illegal recruitment shall prescribe in five years and 20 years if it involves economic sabotage.
The prescriptive period shall begin from the date the crime was discovered..

Estafa vs illegal recruitment


In Illegal Recruitment what the law punishes is the act of recruiting or placement a person or a group of
person without having a license or any of the acts mentioned in section of RA 8042 as amended by
RA10022 whereas in the crime of estafa what the law punishes is the employment of deceit by the
accused to cause the offended party to part with their property. Both offenses are independent from one
another and may be prosecuted independently from each other since the elements of the offenses are
separate and distinct from each other.

Theory of imputed knowledge


The so-called theory of imputed knowledge, that is, knowledge of the agent is knowledge of the principal.
[New Life vs. CA, G.R. No. 94071 March 31, 1992] For the liability of the agent to attach, this theory
states that the agent knew of and consented to the extension of period of employment. Otherwise, the
liability of the recruitment agency shall expire from the termination of the worker's original contract.
[SUNACE INTERNATIONAL MANAGEMENT vs. NLRC, G.R. No. 161757, January 25, 2006, Carpio
Morales, J.]

1.2.8. Pre-termination of contract of migrant worker


Rules on Repatriation of Overseas Workers
(1) Without fault of the worker, his repatriation shall be borne by the local agency and/or principal
over the:
a. worker and his personal belongings;
b. remains of the deceased worker and his personal belongings [Sec. 15, par. 1, RA 8042]
(2) Repatriation due to the fault of migrant worker shall be borne by the migrant worker. [Sec. 15,
par. 1, RA 8042]
(3) Repatriation in cases of war, epidemic, disasters/calamities, or other similar events shall be borne
by OWWA, without prejudice to reimbursement by the principal or local agency. [Sec. 15, par.2,
RA 8042]
(4) Repatriation of underage migrant worker shall be mandatory upon discovery, done by the
responsible officers of the foreign service where the underage migrant worker is found. [Sec. 16,
RA 8042]
(5) Repatriation of seafarer
Apprenticeship
ART. 57. Statement of objectives
This Title aims:
(1) To help meet the demand of the economy for trained manpower;
(2) To establish a national apprenticeship program through the participation of employers, workers and
government and non-government agencies; and
(3) To establish apprenticeship standards for the protection of apprentices.

ART. 58. Definition of Terms. - As used in this Title:


(a) "Apprenticeship" means practical training on the job supplemented by related theoretical instruction.
(b) An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual
employer or any of the entities recognized under this Chapter.
(c) An "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.
ART. 59. Qualifications of apprentice.
To qualify as an apprentice, a person shall:
(a) Be at least fourteen (14) years of age; (modified by RA 7658 to 15years old)
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.

Trade and industry associations may recommend to the Secretary of Labor appropriate educational
requirements for different occupations.

ART. 60. Employment of apprentices.


Only employers in the highly technical industries may employ apprentices and only in apprenticeable
occupations approved by the Secretary of Labor and Employment.

Requisites for employment of apprentices


1) The employer should be engaged in a business that is considered a highly technical industry. A
highly technical industry is a trade, business, enterprise, industry or other activity which utilizes
the application of advanced technology
2) The job to which the apprentice will work on should be classified as an apprenticeable
occupation. Apprenticeable occupation is an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the TESDA (Technical Education and Skills Development
authority.

ART. 61. Contents of apprenticeship agreements.


Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by
the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case
shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance
with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department
shall develop standard model programs of apprenticeship

Comment:
Apprenticeship needs DOLEs prior approval, or apprentice becomes a regular employee since the
approval is a condition sine qua non to a valid apprenticeship agreement (Nitto vs NLRC)

ART. 62. Signing of apprenticeship agreement.


Every apprenticeship agreement shall be signed by the employer or his agent, or by an authorized
representative of any of the recognized organizations, associations or groups and by the apprentice.

An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, if the
latter is not available, by an authorized representative of the Department of Labor, and the same shall be
binding during its lifetime.

Every apprenticeship agreement entered into under this Title shall be ratified by the appropriate
apprenticeship committees, if any, and a copy thereof shall be furnished both the employer and the
apprentice.

ART. 63. Venue of apprenticeship programs.


Any firm, employer, group or association, industry organization or civic group wishing to organize an
apprenticeship program may choose from any of the following apprenticeship schemes as the training
venue for apprentice:
(a) Apprenticeship conducted entirely by and within the sponsoring firm, establishment or entity;
(b) Apprenticeship entirely within a Department of Labor and Employment training center or other
public training institution; or
(c) Initial training in trade fundamentals in a training center or other institution with subsequent actual
work participation within the sponsoring firm or entity during the final stage of training.

ART. 64. Sponsoring of apprenticeship program.


Any of the apprenticeship schemes recognized herein may be undertaken or sponsored by a single
employer or firm or by a group or association thereof or by a civic organization. Actual training of
apprentices may be undertaken:
(a) In the premises of the sponsoring employer in the case of individual apprenticeship programs;
(b) In the premises of one or several designated firms in the case of programs sponsored by a group or
association of employers or by a civic organization; or
(c) In a Department of Labor and Employment training center or other public training institution.

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.

ART. 68. Aptitude testing of applicants.


Consonant with the minimum qualifications of apprentice-applicants required under this Chapter,
employers or entities with duly recognized apprenticeship programs shall have primary responsibility for
providing appropriate aptitude tests in the selection of apprentices. If they do not have adequate facilities
for the purpose, the Department of Labor and Employment shall perform the service free of charge.

ART. 69. Responsibility for theoretical instruction.


Supplementary theoretical instruction to apprentices in cases where the program is undertaken in the plant
may be done by the employer. If the latter is not prepared to assume the responsibility, the same may be
delegated to an appropriate government agency.

ART. 70. Voluntary organization of apprenticeship programs; exemptions.


(a) The organization of apprenticeship program shall be primarily a voluntary undertaking by employers;
(b) When national security or particular requirements of economic development so demand, the President
of the Philippines may require compulsory training of apprentices in certain trades, occupations, jobs
or employment levels where shortage of trained manpower is deemed critical as determined by the
Secretary of Labor and Employment. Appropriate rules in this connection shall be promulgated by the
Secretary of Labor and Employment as the need arises; and
(c) Where services of foreign technicians are utilized by private companies in apprenticeable trades, said
companies are required to set up appropriate apprenticeship programs.

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.

LEARNERS

ART. 73. Learners defined.


Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-
apprenticeable and which may be learned through practical training on the job in a relatively short period
of time which shall not exceed three (3) months.

ART. 74. When learners may be hired.


Learners may be employed when no experienced workers are available, the employment of learners is
necessary to prevent curtailment of employment opportunities, and the employment does not create unfair
competition in terms of labor costs or impair or lower working standards.

ART. 75. Learnership agreement.


Any employer desiring to employ learners shall enter into a learnership agreement with them, which
agreement shall include:
(a) The names and addresses of the learners;
(b) The duration of the learnership period, which shall not exceed three (3) months;
(c) The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%)
of the applicable minimum wage; and
(d) A commitment to employ the learners if they so desire, as regular employees upon completion of the
learnership. All learners who have been allowed or suffered to work during the first two (2) months
shall be deemed regular employees if training is terminated by the employer before the end of the
stipulated period through no fault of the learners.

The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or
his duly authorized representative.

ART. 76. Learners in piecework.


Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the
work done.
ART. 77. Penalty clause.
Any violation of this Chapter or its implementing rules and regulations shall be subject to the general
penalty clause provided for in this Code.

Learners vs Apprentices
Learners Apprentices
Semi skilled or industrial occupations Highly skilled job or a job found only in a highly
technical industry
Training period cannot exceed 3 months Training exceeds 3 months
A learner is not an apprentice An apprentice is, conceptually a learner

HANDICAPPED WORKERS
ART. 78. Definition.
Handicapped workers are those whose earning capacity is impaired by age or physical or mental
deficiency or injury.

ART. 79. When employable.


Handicapped workers may be employed when their employment is necessary to prevent curtailment of
employment opportunities and when it does not create unfair competition in labor costs or impair or lower
working standards.

ART. 80. Employment agreement.


Any employer who employs handicapped workers shall enter into an employment agreement with them,
which agreement shall include:
a. The names and addresses of the handicapped workers to be employed;
b. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent
of the applicable legal minimum wage;
c. The duration of employment period; and
d. The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized
representative.

ART. 81. Eligibility for apprenticeship.


Subject to the appropriate provisions of this Code, handicapped workers may be hired as apprentices or
learners if their handicap is not such as to effectively impede the performance of job operations in the
particular occupations for which they are hired.

Magna Carta for Disabled Persons

Sec. 5.Equal Opportunity for Employment.


No disable person shall be denied access to opportunities for suitable employment. A qualified disabled
employee shall be subject to the same terms and conditions of employment and the same compensation,
privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person.

Five percent(5%) of all casual emergency and contractual positions in the Departments of Social Welfare
and Development; Health; Education, Culture and Sports; and other government agencies, offices or
corporations engaged in social development shall be reserved for disabled persons.
Sec. 6. Sheltered Employment
If suitable employmentfor disabled persons cannot be found through open employment as provided in the
immediately preceding Section, the State shall endeavor to provide it by means of sheltered employment.
In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual
qualities, vocational goals and inclinations to ensure a good working atmosphere and
efficient production.

Sec. 7.Apprenticeship.
Subject to the provisions of the Labor Code as amended, disabled persons shall be eligible as apprentices
or learners: Provided, That their handicap is not as much as to effectively impede the performance of job
operations in the particular occupation for which they are hired; Provided, further, That after the lapse of
the period of apprenticeship, if found satisfactory in the job performance, they
shall be eligible for employment.

Sec. 8.Incentives for Employers.


(a) To encourage the active participation of the private sector in promoting the welfare of disabled
persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be
provided to private entities which employ disabled persons.
(b) Private entities that employ disabled persons who meet the required skills or qualifications, either as
regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross
income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to
disabled persons: Provided, however, That such entities present proof as certified by the Department
of Labor and Employment that disabled persons are under their employ: Provided, further, That the
disabled employee is accredited with the Department of Labor and Employment and the Department
of Health as to his disability, skills and qualifications.
(c) Private entities that improve or modify their physical facilities in order to provide reasonable
accommodation for disabled persons shall also be entitled to an additional deduction from their net
taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or
modifications. This Section, however, does not apply to improvements or modifications offacilities
required underBatas PambansaBilang 344.

Sec. 32. Discrimination on Employment.


No entity, whether public or private, shall discriminate against a qualified disabled person by reason of
disability in regard to job application procedures, the hiring, promotion, or discharge of employees,
employee compensation, job training, and other terms, conditions, and privileges of employment. The
following constitute acts of discrimination:
(a) Limiting, segregating or classifying a disabled job application such a manner that adversely affects
his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to
screen out a disabled person unless such standards, tests or other selection criteria are shown to be
job-related for the position in question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits,
to a qualified disabled employee, by reason of his disability, than the amount to which a non-disabled
person performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion,
training opportunities, study and scholarship grants, solely on account of the latter's disability;
(f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of
his disability;
(g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the
employer can prove that he impairs the satisfactory performance of the work involved to the prejudice
of the business entity: Provided, however, That the employer first sought to provide reasonable
accommodations for disabled persons;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect
the skills, aptitude or other factor of the disabled applicant or

Conditions of Employment
ART. 82. Coverage.
The provisions of this Title shall apply to employees in all establishments and undertakings whether for
profit or not, but not to government employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support, domestic helpers, persons in the personal
service of another, and workers who are paid by results as determined by the Secretary of Labor in
appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty consists of the management of
the establishment in which they are employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff.

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty.

Four fold test of E&E relationship:


1) Selection and engagement of the employee
2) Payment of wages
3) Power of dismissal
4) Employers power of controls (Control test)
The employer reserves the right to control not only the end to be achieved but also the means to
be used in reaching such end

2 tiered test
1) Control test
2) The underlying economic realities of the activity or relationship.
This determines the level of economic dependence the employee has on his employer
Independent contractors
Generally rely on their own resources, and the manner by which they seek to achieve the end result is
usually dependent on their own volition.

Unregistered associations or associations without any legal personality can still be held as employers
since there is no legal requirement requiring the employer to be a person, natural or juridical, it is
sufficient when the circumstances of a case fall within the 4 fold test.

Labor-only contractor
Arises when the contract is not to accomplish a job or service but merely to supply the people to do the
job. By virtue of the law this type of contractor is rendered as a mere agent of his client thereby creating a
E&E relationship between the client and the employee.

2 types of benefits:
1) Statutory
Provided for by law
2) Voluntary
Initiated by the employer unilaterally or by contractual stipulation.

Employees not covered by the provisions on conditions of employment:


1) Government employees
2) Managerial employees, including other officers or members of the managerial staff
3) Field personnel
4) The employer
5) S family members who depend on him for support
6) Workers who are paid by results as determined under DOLE regulations
7) Domestic helpers

Since Article 82 mentions managerial employees including managerial staff, supervisors are also
excluded from its coverage

Characteristics of a managerial staff:


1) Their primary duty consist of the performance of work directly related to management policies of
their employer
2) They customarily and regularly exercise discretion and independent judgment
3) They regularly and directly assist the managerial employee whose primary duty consist of the
management of a department of the establishment in which they are employed
4) They execute, under general supervision work along specialized or technical lines requiring
special training, experience or knowledge
5) They execute, under general supervision, special assignments and tasks
6) They do not devote more than 20% of their hours worked in a work-week to activities which are
not directly and clearly related to the performance of their work hereinabove described.
The rule with respect to Field personnel is not merely whether the actual hours work can be determined
with certainty but also whether the employees time and performance is constantly supervised by the
employer

2 requirements of field personnel:


1) The absence of the ability to determine with reasonable certainty the actual number of hours
worked
2) The absence of constant supervision as to the employees time and performance.

Workers paid by result


Connotes an employee with no fixed salary, wages or remuneration but receiving a compensation from his
employer an uncertain and variable amount depending upon the work done or the result of said work,
irrespective of the amount of time employed.

ART. 83. Normal hours of work.


The normal hours of work of any employee shall not exceed eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of
the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they
shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Probationary employment of part-time workers


Using the legal principles enunciated in Article 281 of the Labor Code on probationary employment vis--
vis Article 13 of the Civil Code on the proper reckoning of periods, a probationary part-time employee
shall become regular in status after working for such number of hours or days which equates to, or
completes, a six-month probationary period in the same establishment doing the same job under the
employment contract. In other words, the six-month probationary period prescribed by law should be
interpreted to mean the number of normal working days and hours within the normal six-month period in
the establishment or undertaking. For this reason, part-timers should become regular in status, after
working for the total number of hours or days, which completes a six-month probationary period of a full-
time worker in the same establishment doing the same job under normal circumstances.

Rules on Work Hours of health Personnel


1) The provision is only applicable if any of the following circumstances occur:
a. That the HP works in cities or municipalities with a population of at least 1M
b. That the HP works in a hospital and clinics with a bed capacity of at least 100
2) That the HP is a:
a. Resident physicians
b. Nurses
c. Nutritionist
d. Dieticians pharmacists
e. Social workers
f. Laboratory technicians
g. Paramedical technicians
h. Psychologists
i. Midwives
j. Attendants
k. Medical secretaries
l. All other hospital or clinic personnel
3) That the 40-48 hour work week does not apply if there is a training program is dully accredited or
approved by the appropriate government agency. In such case, there is no E&E relationship

ART. 84. Hours worked.


Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a
prescribed workplace; and (b) all time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

Principles determining whether the time spent by an employee is considered hours worked:
1) All hours worked which the employee is required to give to his employer, regardless of whether
or not such hours are spent in productive labor or involve physical or mental exertion
2) An employee need not leave the premises of the 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 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 of his normal working hours because he had no replacement all tim spent fir
such work shall be considered as hours worked, if the work was with the knowledge of his
employer or immediate supervisor.
4) The time during which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered time worked either because of the imminence of 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.

Preliminary activities
Preliminary activities and postliminary activities are deemed performed during working hours, where
such activities are controlled or required by the employer and are pursued necessarily and primarily for
the employers benefit

Rules waiting time:


1) If the employee is engaged to wait, the time used in waiting is considered time worked. The
provisions relating to overtime pays is applicable

2) Waiting to be engaged, the time consumed here is not considered as hours worked.
The test to determine whether the time spent is engaged to wait or waiting to be engaged is whether
waiting is considered an integral part of his job or of the employee is required or engaged by the employer
to wait ----- the controlling factor is whether the waiting time spent in idleness is so spent predominantly
for the employers benefit.

In order for meal time not t be considered hours worked the employee must be completely relieved from
duty for the purpose of eating regular meals otherwise it may constitute overtime

Working while sleeping depends upon the express or implied agreement of the parties in the absence of
the agreement, it will depend upon the nature of the service and its relation to the working time

In order for on call status to be considered hours worked:


1) He must be the place of business or so close thereto that he cannot use the time effectively for his
own purposes
2) They should be subject to the call of their employers.

Principles in determining travel time


1) Travel from home to work
An employee who travels from home before his regular workday and returns to his home at the
end of the workday is engaged in ordinary home to work travel which is a normal incident of
employment. However when the employee receives an emergency call outside of his regular
working hours and is required to travel to his regular place of business or some other work site,
all of the time spent in such travel is working time

2) Travel is all in the days work


Where the nature of the job of the employee requires him to travel from one place to another all
the time spent in travel when required by his employment is considered hours worked excluding
his travel time to and from work

3) Travel away from home


Travel that keeps an employee away from home overnight is travel away from home and is
considered work time when it cuts across the employees workday covering travel time after his
normal working hours. However as an enforcement policy, the department will not consider as
work time those time spent in travel away from home outside of regular working hours as a
passenger on an airplane, train, boat or automobile except when the very nature of his job requires
him to work during that time (pilot, driver etc.)
3 Criteria for time spent in lectures and meetings will not be considered as time worked:
1) Attendance is outside of the employees regular working hours
2) Attendance is in fact voluntary
3) The employee does not perform any productive work during such attendance.

When an employer alleges that the employee performs less than 8 hours of work per day the burden of
proof to prove such allegation is with the employer

ART. 85. Meal periods.


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

Meal time is usually nor compensable except when the meal time is spent predominantly for the
benefit of the employer or the meal time is less than 60 minutes

Meal times may be shortened subject to certain conditions however it may not be less than 20
minutes otherwise it would no longer be considered as meal time but a rest period.

4 situations where meal time may be lessened to less than 60 minutes with full pay:

1) Where the work is non manual or does not involve serious physical exertion
2) Where the establishment regularly operates not less than 16 hours a day
3) Where there is actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installation to avoid serious loss which the employer would otherwise
suffer
4) Where the work is necessary to prevent serious loss of perishable goods

However upon the request of the employee, subject to certain requirements, meal time may be
lessened to less than 60 minutes without pay in order for the employee to leave earlier.

Conditions where the employee may request to lessened the meal time:
1) The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are
willing to waive the OT pay for such shortened meal period
2) There will be no diminution whatsoever in the salary and other fringe benefits of the employees
existing before the effectivity of the shortened meal period
3) The work of the employees does not involve strenuous physical exertion and they are provided
with adequate rest periods in the afternoon and morning
4) The value of the benefits derived by the employees from the proposed work arrangement is equal
to or commensurate with the compensation due them for the shortened meal period as well as the
OT pay for 30 minutes as determined by the employees concerned
5) The OT pay of the employees will become due and demandable if ever they are permitted to work
beyond 4:30pm
6) The effectivity of the proposed working time arrangement shall be of temporary duration as
determined by the secretary of labor and employment

Changing the lunch break from a 30 minute paid break to an hour unpaid break is a valid exercise of
management prerogative since the work schedule ultimately rest within the discretion of the employer
subject to the provisions of the labor code.

ART. 86. Night shift differential.


Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular
wage for each hour of work performed between ten oclock in the evening and six oclock in the morning.

Chapter V
(RA 10151)

Employment of Night Workers

Art. 154. Coverage.


This chapter shall apply to all persons, who shall be employed or permitted or suffered to work at night,
except those employed in agriculture, stock raising, fishing, maritime transport and inland navigation,
during a period of not less than seven (7) consecutive hours, including the interval from midnight to five
oclock in the morning, to be determined by the Secretary of Labor and Employment, after consulting the
workers representatives/labor organizations and employers.

Night worker means any employed person whose work requires performance of a substantial number of
hours of night work which exceeds a specified limit. This limit shall be fixed by the Secretary of Labor
after consulting the workers representatives/labor organizations and employers.

Art. 155. Health Assessment, At their request, workers shall have the right to undergo a health
assessment without charge and to receive advice on how to reduce or avoid health problems associated
with their work:

(a) Before taking up an assignment as a night worker;

(b) At regular intervals during such an assignment; and

(c) If they experience health problems during such an assignment which are not caused by factors other
than the performance of night work.

With the exception of a finding of unfitness for night work, the findings of such assessments shall not be
transmitted to others without the workers consent and shall not be used to their detriment.
Art. 156. Mandatory Facilities. Suitable first-aid facilities shall be made available for workers
performing night work, including arrangements where such workers, where necessary, can be taken
immediately to a place for appropriate treatment. The employers are likewise required to provide safe and
healthful working conditions and adequate or reasonable facilities such as sleeping or resting quarters in
the establishment and transportation from the work premises to the nearest point of their residence subject
to exceptions and guidelines to be provided by the DOLE.

Art. 157. Transfer. Night workers who are certified as unfit for night work, due to health reasons, shall
be transferred, whenever practicable, to a similar job for which they are fit to work.

If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as
other workers who are unable to work, or to secure employment during such period.

A night worker certified as temporarily unfit for night work shall be given the same protection against
dismissal or notice of dismissal as other workers who are prevented from working for reasons of health.

Art. 158. Women Night Workers. Measures shall be taken to ensure that an alternative to night work is
available to women workers who would otherwise be called upon to perform such work:

(a) Before and after childbirth, for a period of at least sixteen (16) weeks, which shall be divided
between the time before and after childbirth;

(b) For additional periods, in respect of which a medical certificate is produced stating that said
additional periods are necessary for the health of the mother or child:

(1) During pregnancy;

(2) During a specified time beyond the period, after childbirth is fixed pursuant to subparagraph (a)
above, the length of which shall be determined by the DOLE after consulting the labor organizations and
employers.

During the periods referred to in this article:

(i) A woman worker shall not be dismissed or given notice of dismissal, except for just or authorised
causes provided for in this Code that are not connected with pregnancy, childbirth and childcare
responsibilities.

(ii) A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion
which may attach to her regular night work position.

Pregnant women and nursing mothers may he allowed to work at night only if a competent physician,
other than the company physician, shall certify their fitness to render night work, and specify, in the ease
of pregnant employees, the period of the pregnancy that they can safely work.
The measures referred to in this article may include transfer to day work where this is possible, the
provision of social security benefits or an extension of maternity leave.

The provisions of this article shall not have the effect of reducing the protection and benefits connected
with maternity leave under existing laws.

Art. 159. Compensation. The compensation for night workers in the form of working time, pay or
similar benefits shall recognize the exceptional nature of night work.

Art. 160. Social Services.Appropriate social services shall be provided for night workers and, where
necessary, for workers performing night work.

Art. 161. Night Work Schedules. Before introducing work schedules requiring the services of night
workers, the employer shall consult the workers representatives/labor

organizations concerned on the details of such schedules and the forms of organization of night work that
are best adapted to the establishment and its personnel, as well as on the occupational health measures
and social services which are required. In establishments employing night workers, consultation shall take
place regularly.

SEC. 5. The subsequent articles starting from Book Four, Title I, Chapter I of Presidential Decree No. 442
are hereby renumbered accordingly.

SEC. 6. Application. The measures referred to in this chapter shall be applied not later than six (G)
months from the effectivity of this Act.

SEC. 7. Guidelines. The DOLE shah promulgate appropriate regulations in addition to existing ones to
ensure protection, safety and welfare of night workers.

SEC. 8. Penalties. Any violation of this Act, and the rules and regulations issued pursuant hereof shall
be punished with a fine of not less than Thirty thousand pesos (P30,000.00) nor more than Fifty thousand
pesos (P50,000.00) or imprisonment of not less than six (6) months, or both, at the discretion of the court.
If the offense is committed by a corporation, trust, firm, partnership or association, or other entity, the
penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership or
association, or entity.

IRR of RA 10151
Night Worker
Means any employed person whose work covers the period from 10pm to 6am the following morning
provided that the worker performs no less than 7 consecutive hours of work.

Mandatory Facilities
1) Suitable first aid and emergency facilities
2) Lactation stations in required companies pursuant to RA 10028 (expanded breastfeeding
promotion act of 2009
3) Separate toilet facilities for men and women
4) Facility for eating with potable drinking water
5) Facilities for transportation and/or properly ventilated temporary sleeping or resting quarters,
separate for female and male workers, shall be provided except where any of the following
circumstances are present
a. Where there is an existing company guideline, practice or policy , CBA, or similar
agreement between management and workers providing for equivalent or superior benefit
b. Where the start or end of night shift does not fall within 12am to 5am
c. Where the workplace is located in an area that is accessible 24 hours to public
transportation
d. Where the number of employees does not exceed a specific number as may be provided
by the secretary of labor and employment in subsequent issuances

Transfers
Night Workers who are certified by a competent physician , as unfit to render night work, due to health
reasons, shall be transferred to a job where they are fit to work whenever practicable. The transfer of the
employee must be to a similar or equivalent position in good faith.

If such transfer is not practicable or workers are unable to render night work for a continuous period of
not less than 6 months upon the certification of a competent public health authority, this workers shall be
granted the same company benefits as other workers who are unable to work due to illness.

A night worker certified as temporarily unfit for night work for a period of less than 6 months shall be
given the same protection against dismissal or notice of dismissal as other workers who are prevented
from working due to health reasons.

Transfer to day work


Medical certificate issued by a competent physician is necessary for the grant of:
1) Additional periods of assignment to day work during pregnancy or after child birth other than the
period mentioned (16 weeks) provided that the length of additional period should not be more
than 4 weeks or of a longer period as may be agreed upon by the employer and employee
2) Extension of maternity leave
3) Clearance to render night work

Extension of maternity leave


Maternity leave may be extended upon the recommendation of a competent physician without pay.

Section 7 non diminution of maternity leave benefits


Nothing in this rule shall be construed to authorize the diminution or reduction of the protection and
benefits connected with maternity leave under existing law.
Section 8 protection against dismissal and loss of benefits attached to employment status, seniority
or access to promotion
A woman employee shall not be dismissed pregnancy, childbirth or child care responsibilities as defined
under this rules. She shall not lose the benefits regarding her employment status, seniority and access to
promotion which may attach to her regular night work position
READ IRR OF RA 10151 we have it!!!

Night differential is not susceptible to waiver under the reasoning that the additional
compensation is founded upon public policy hence the same cannot be waived as provided in
article 6 of the NCC

ART. 87. Overtime work.


Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime
work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%)
thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty
percent (30%) thereof.

Work day
Is the 24 hour period which commences from the time the employee regularly starts to work.

The limit of eight hours need not be continuous so long as they are rendered within the same work day

Verbal order to render OT despite the existence of a memorandum to render OT is sufficient knowledge
to qualify the employee to avail of OT pay. An express instruction from the employer to render OT work
is not required for the employee to be entitled to OT pay; it is sufficient that the employee is permitted or
suffered to work

Actions for recovery of compensation for past overtime work is not subject to the principles of
laches and estoppel subject to reasonable circumstances (very long time) under the following
reasons:
1) It would be contrary to the spirit of the law since the employees themselves cannot waive
their right to collect OT payment
2) The law obligates the employer to observe it and punishes them for non-performance
3) The employee is already at a disadvantageous position as to be naturally reluctant or even
apprehensive in asserting a claim which may cause the employer to devise a way to exercise
his right of termination

OT pay in arrears retroacts to the date when the services were actually performed and not just to
the date where he presented a claim against his employer.
As a general rule OT pay is not subject to waiver nor to quitclaims except in cases the waiver was
in exchange for certain benefits or benefits which will be more than what will accrue to them in
overtime pay

Compressed Work Week


Under this scheme the number of work days is reduced but the number of work hours in a day is
increased to more than 8 hours but no overtime pay may be claimed.

Conditions of a valid CWW (DOLE order no 21 series of 1990)


1) The scheme is expressly and voluntarily supported by majority of the employees affected.
2) In firms using substances, or operating in conditions that are hazardous to health, a certification is
needed from an accredited safety organization or the firms safety committee that work beyond
eight hours is within the limits or levels of exposure set DOLEs occupational safety and health
standards.
3) DOLE regional office is duly notified

Limitations
1) The CWW scheme shall not divest the employee the right to:
a. 60 minute meals
b. Holiday pay
c. Rest day pay
d. Leaves in accordance with law or applicable CBA
2) The adoption of the CWW scheme shall in no case result in the diminution of existing benefits.
Reversion to the normal eight hour workday shall not constitute a diminution of benefits. The
reversion shall be considered a legitimate exercise of management prerogative, provided that the
employer shall give the employees prior notice of such reversion within a reasonable period of
time.
3) Unless there is a more favourable practice existing in the firm, work performed beyond eight
hours until the ordained CWW work schedule, not exceeding 12 hours, shall not be compensable.

Flexible work arrangements:


Refers to alternative arrangements or schedules other than the traditional or standard work hours,
workdays or workweek.
1) Reduction of workdays
Where the normal workdays per week are reduced but should not last for more than 6 months
2) Rotation of workers
Where the employees are required to go on leave for several days or weeks, utilizing their leave
credits if there are any
3) Forced Leave
Where the employees are required to go on leave for several days or weeks, utilizing their leave
credits if there are any.

4) Flexi holiday
Where the employees agree to avail themselves of the holidays at some other days, provided that
there is n diminution of existing benefits as a result of such arrangement.

ART. 91. Right to weekly rest day.


(a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after every six (6)
consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his employees subject to collective
bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment
may provide. However, the employer shall respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds.

ART. 92. When employer may require work on a rest day.


The employer may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent
danger to public safety;

(b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious
loss which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;

(d) To prevent loss or damage to perishable goods;

(e) Where the nature of the work requires continuous operations and the stoppage of work may result in
irreparable injury or loss to the employer; and

(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of
Labor and Employment.

ART. 93. Compensation for rest day, Sunday or holiday work.


(a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage. An employee shall be
entitled to such additional compensation for work performed on Sunday only when it is his
established rest day.

(b) When the nature of the work of the employee is such that he has no regular workdays and no regular
rest days can be scheduled, he shall be paid an additional compensation of at least thirty percent
(30%) of his regular wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid an additional compensation of at least thirty
percent (30%) of the regular wage of the employee. Where such holiday work falls on the employees
scheduled rest day, he shall be entitled to an additional compensation of at least fifty per cent (50%)
of his regular wage.

(d) Where the collective bargaining agreement or other applicable employment contract stipulates the
payment of a higher premium pay than that prescribed under this Article, the employer shall pay such
higher rate.

ART. 94. Right to holiday pay.


(b) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;
(c) 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; and
(d) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the
ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the
twenty-fifth and thirtieth of December and the day designated by law for holding a general election.

Conditions for holiday pay:


1) The employee should not have been absent without pay on the working day preceding the regular
holiday

Holiday pay of part-timer


The basis of the holiday pay is any of the following whichever is higher:
1) The regular wage per day
2) The basic wage on the working day preceding the regular holiday if the employee is present or on
leave with pay on the last working day immediately prior to the regular holiday
3) The average of his basic wages for the last seven working days for employees who are paid by
result
4) The basic wage on the particular holiday, if worked.

List of regular holiday (EO 203) 30 June 1987

Sec. 1. Unless otherwise modified by law, order or proclamation, the following regular holidays and
special days shall be observed in this country:

Regular Holidays Date


New Year's Day January 1
Maundy Thursday Movable date
Good Friday Movable date
Araw ng Kagitingan (Bataan and Corregidor Day) April 9
Labor Day May 1
Independence Day June 12
National Heroes Day Last Sunday of August
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
Eidul Fitr First day after the 30 day fasting period of ramadan
Eidul adha 10 th day in the month of Hajj
special day
All Saints Day November 1 (30%)
Last Day of the Year December 31(30%)
Sec. 2. Henceforth, the terms "legal or regular holiday" and "special holiday", as used in laws, orders,
rules and regulations or other issuances shall now be referred to as "regular holiday" and "special day",
respectively.
Sec. 3. All laws, orders, issuances, rules and regulations or parts thereof inconsistent with this Executive
Order are hereby repealed or modified accordingly.

Rules of compensation for day worked on special days:


1) If OT is rendered on a holiday/special day the OT rate shall be at least 30% of the premium rate.
2) If the holiday fall on a rest day %50
3) Unworked no compensation
4) OT- Premium rate plus 30% per hour of OT

Rules of compensation for day worked on regular holidays days:


1) Unworked 100%
2) If worked 200%
3) On restday 230%
4) OT- Premium rate plus 30% per hour of OT

Is an employee entitled to ECOLA on a regular holiday?


If the minimum wage is defined as inclusive of the ECOLA, then the ECOLA should be included as a
basis in computing night shift differential, overtime pay, premium pay and 13 month pay. If the ECOLA is
not part of the basic regular pay then it should not be included in the computation of the abovementioned
benefits. The determining factor is the wage order associated with it, whether it provides for the inclusion
or exclusion of ECOLA in the basic pay.

Monthly paid employees are entitled to holiday pay

ART. 95. Right to service incentive leave.


(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those
enjoying vacation leave with pay of at least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted from granting this benefit by the
Secretary of Labor and Employment after considering the viability or financial condition of such
establishment.

(c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any
court or administrative action.

Section 3 rule v of book 3 IRR


One year of service means 12 months of service whether continuous or broken, reckoned from the date
the employee started working, including authorized absences from and paid regular holidays, unless the
number of working days in the establishment as a matter or practice or policy, or provided in the
employment contract, is less than 12 months, in which case, said period shall be considered as one year
for the purpose of determining entitlement to the service incentive leave

Part-time workers are also entitled to SIL after 1 year of service however the availment and commutation
of the same can be proportionate to the daily work rendered and the regular daily salary, respectively.

Teachers on contract basis are entitled to SIL, the phrase in the IRR excluding employees on contract
basis should be interpreted to mean a term related to field personnel as supported by the principle of
ejusdem generis.

Piece-rate workers are not entitled to SIL as provided in article 101

If the employer excludes an employee from the coverage of any benefit specifically SIL, the employer
has the burden of proof in proving why the employee is excluded

Paternity Leave

4 Conditions to entitlement to paternity leave:


1) He is an employee at the time of 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 within a reasonable period of the time from the expected date of
delivery by the pregnant spouse, or within such period as may be provided by the company rules and
regulations or by the CBA; provided that prior application for leave shall not be required in case of
miscarriage.
4) His wife has given birth or suffered a miscarriage

IRR of RA 8187
SECTION 2. Coverage.
Every married male employee in the private sector shall be entitled to paternity leave benefits of seven (7)
days with full pay for the first four deliveries by his lawful spouse under such terms and conditions as
hereinafter provided.

The rules on paternity leave of employees in the public sector shall be promulgated by the Civil Service
Commission.

SECTION 3. Conditions to entitlement of paternity leave benefits.


A married male employee shall be entitled to paternity benefits provided that:
a. He is an employee at the time of delivery of his child;
b. He is cohabiting with his spouse at the time she gives birth or suffers a miscarriage.
c. He has applied for paternity leave in accordance with Section 4 hereof; and
d. He wife has given birth or suffered a miscarriage.

SECTION 4. Application for leave.


The married male employees shall apply for paternity leave with his employer within a reasonable period
of time from the expected date of delivery by the pregnant spouse, or within such period as may be
provided by company rules and regulations or by collective bargaining agreement, provided that prior
application for leave shall not be required in case of miscarriage.

SECTION 5. Availment.
Paternity leave benefits shall be granted to the qualified employee after the delivery by his wife, without
prejudice to an employer allowing an employee to avail of the benefit before or during the delivery;
provided, that the total number of days shall not exceed seven (7) days for each delivery.

SECTION 6. Benefits.
The employee is entitled to his full pay, consisting of basic salary, for the seven (7) days during which he
is allowed not to report for work, provided, that his pay shall not be less than the mandated minimum
wage.
SECTION 7. Non-commutation of benefits.
In the event that paternity leave benefit is not availed of, said leave shall not be convertible to cash.

SECTION 8. Non-diminution clause.


Nothing in these Rules shall be construed to reduce or replace any existing benefits of any kind granted
under existing laws, decrees, executive orders, or any contract, agreement or policy between employer
and employee.

SECTION 9. Crediting of existing benefits.


Where a male employee is already enjoying the paternity leave benefits by reason of contract,
company policy or collective bargaining agreement, the following rules shall apply:

a. If the existing paternity leave benefit is greater than the benefitherein provided, the greater benefit
shall prevail;
b. If the existing paternity leave is less than that provided herein, such existing benefit shall be adjusted
to the extent of the difference.

However, where a contract, company policy or collective bargaining agreement provides for an
emergency or contingency leave without specific provisions on paternity leave, the paternity leave as
herein provided shall apply in full.

SECTION 10. Penalty.


Any person, corporation, trust, firm, partnership, association or entity found violating any provision of
these Rules shall be penalized by a fine not exceeding twenty five thousand pesos (P25,000) or
imprisonment of not less than thirty (30) days nor more than six (6) months.

If the violation is committed by a corporation, trust or firm, partnership, association or any other entity,
the penalty of imprisonment shall be imposed on the entitys responsible officers, including but not
limited to, the president, vice president, chief executive officer, general manager, managing director or
partner directly responsible therefor.

Maternity Leave Benefit

Maternity leave benefit under the SSS law as amended by RA 8282


SEC. 14-A. Maternity Leave Benefit.
A female member who has paid at least three (3) monthly contributions in the twelve-month period
immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit
equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or
seventy-eight (78) days in case of caesarian delivery, subject to the following conditions:

(a) 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 in accordance with the rules and regulations it
may provide;

(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the
maternity leave application;
(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits Provided
by this Act for the same period for which daily maternity benefits have been received;

(d) That the maternity benefits Provided under this section shall be paid only for the first four (4)
deliveries or miscarriages;

(e) That the SSS shall immediately reimburse the employer of one hundred percent (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

(f) That if an 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 by the employer of the time of the pregnancy, the employer shall pay to the SSS damages
equivalent to the benefits which said employee member would otherwise have been entitled to.

Qualifications for entitlement to maternity benefit:


1) The female member should be employed at the time of delivery, miscarriage or abortion.
2) She must have given the required notification to the SSS thru her employer
3) Her employer must have paid at least 3 months of maternity contributions within the 12 month
period immediately before the semester of contingency

Battered Women leave


SECTION 43. Entitled to Leave. Victims under this Act shall be entitled to take a paid leave of absence
up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and
Regulations, extendible when the necessity arises as specified in the protection order.
Any employer who shall prejudice the right of the person under this section shall be penalized in
accordance with the provisions of the Labor Code and Civil Service Rules and Regulations. Likewise, an
employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall
likewise be liable for discrimination.

2 month leave under Magna Carta Leave


Section 18. Special Leave Benefits for Women. - A woman employee having rendered continuous
aggregate employment service of at least six (6) months for the last twelve (12) months shall be entitled
to a special leave benefit of two (2) months with full pay based on her gross monthly compensation
following surgery caused by gynecological disorders.

Parental Solo Parent Leave

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.

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

The seven day leave is subject to the discretion of the employee, hence he must indicate the same in his
request to file for leave, the only limitation is that it cannot exceed 7 days

Conditions to entitlement of solo parent leave


1) He has rendered at least 1 year of service whether continuous or broken at the time of effectivity
of the act
2) He has notified his employer of the availment thereof within a reasonable time period
3) He has presented a solo parent ID to his employer

ART. 96. Service charges.


All service charges collected by hotels, restaurants and similar establishments shall be distributed at the
rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for management.
The share of the employees shall be equally distributed among them. In case the service charge is
abolished, the share of the covered employees shall be considered integrated in their wages.

The 15% shall be retained by management to answer for losses and breakages and for distribution to
managerial employees, at the discretion of management in the latter case. The shares shall be distributed
and paid to the employees not less than once every 2 weeks or twice a month at intervals not exceeding
16 days

If the company does not require a service charge, tips earned if any shall be handled in the same manner

Rule if collection of Service Charge is abolished


The share of covered employees shall be considered integrated in their wages. The basis of the amount to
be integrated shall be the average monthly share of each employee for the past 12 months immediately
preceding the abolition or withdrawal of such charges.

ART. 97. Definitions.


As used in this Title:
(a) "Person" means an individual, partnership, association, corporation, business trust, legal
representatives, or any organized group of persons.
(b) "Employer" includes any person acting directly or indirectly in the interest of an employer in relation
to an employee and shall include the government and all its branches, subdivisions and
instrumentalities, all government-owned or controlled corporations and institutions, as well as non-
profit private institutions, or organizations.
(c) "Employee" includes any individual employed by an employer.
(d) "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.
(e)
(f) "Employ" includes to suffer or permit to work.
(g) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as determined by the
Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by
the employer to the employee. "Fair and reasonable value" shall not include any profit to the
employer, or to any person affiliated with the employer.

ART. 98. Application of Title. - This Title shall not apply to farm tenancy or leasehold, domestic service
and persons working in their respective homes in needle work or in any cottage industry duly registered in
accordance with law.
The technical distinction between wages and salaries is that the former is the compensation given for
manual labor, skilled or unskilled whereas Salary denotes a higher degree of employment, or superior
grade of services, implies a position or office.

The term wages includes sales commissions, hence sales commissions should be included in the
computation of separation pay basing the average of the commissioned earned during their last year of
employment

2 reasons why commissions form part of wages/salaries hence computation of separation pay
(Songco et al vs NLRC et al)
1) Commissions are in the form of incentives or encouragement, so that the petitioners would be
inspired to put a little more industry on the jobs particularly assigned to them, still these
commissions are direct remuneration services rendered which contributed to the increase of
income of Zuellig . Commission is the recompense, compensation or reward of an agent,
salesman, executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a
percentage on the amount of his transactions or on the profit to the principal (Black's Law
Dictionary, 5th Ed., citing Weiner v. Swales, 217 Md. 123, 141 A.2d 749, 750). The nature of the
work of a salesman and the reason for such type of remuneration for services rendered
demonstrate clearly that commission are part of petitioners' wage or salary.
2) 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 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.

Inclusions of wages:
1) Any form of remuneration earnings for services rendered.
2) Commissions
3) Ecola, depending on the wage order providing for it
4) Transportation allowance

Facilities are chargeable against the wage of the employees subject to the limitations set forth by the
secretary of labor and the IRR However supplements are not capable of being charged against wages

Facilities
Includes articles or services for the benefit of the employee or his family but shall not include tools of the
trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the
employers business.

Supplements
Constitutes extra remuneration or special privileges or benefits given to or received by the employees
over and above their ordinary earnings or wages given for the benefit of the employer or necessary to the
conduct of the employers business.

3 requirements before the value of the facility may be deducted from the wage (Mabeza vs NLRC)
1) Proof must be shown that such facilities are customarily furnished by the trade
2) The provision of deductible facility must be voluntarily accepted in writing by the employee.
3) Facilities must be charged at fair and reasonable value

The controlling factor in determining whether the benefit given is a facility or supplement is the purpose,
if it is solely for the benefit of the employee it is a facility but where the purpose is to benefit the
employer and the benefit enjoyed by the employee is only incidental it is a supplement

Fair Days wage for fair days labor


If there is no work performed by the employee there can be no 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. Thus it has been held that where the failure of the workers to work was not due to the
employers fault, the burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss.

ART. 99. Regional minimum wages.


The minimum wage rates for agricultural and non-agricultural employees and workers in each and every
region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.

Exceptions to the coverage of minimum wages:


1) Household or domestic helpers, including family drivers and persons in the personal service of
another
2) Homeworkers engaged in needle-work
3) Work employed in any establishment duly registered with the national cottage industries and
development authority in accordance with RA 3470 provided that such workers perform the work
in their respective homes.
4) Workers in any duly registered cooperative when so recommended by the bureau of cooperative
development and upon approval of the SEC of labor and employment provided however:
a. The purpose of the exemption is to make the cooperative viable
b. Upon finding by the bureau supported by adequate proof that the cooperative cannot
resort to other remedial measures without serious loss or prejudice to its operation except
through the exemption from the rules
c. That the exemption is subject to the T&Cs for such period of time as the SEC of L&E
may prescribe.
d. BMBEs (Barangay micro business enterprises)
Is defined as any business entity or enterprise engaged in the production, processing or
manufacturing of products or commodities, including agro-processing, trading and
services , whose total assets including those arising from loans but exclusive of the land
on which the particular business entitys office, plant and equipment are situated, shall
not be more than 3M pesos.

Section 8 exemption from the coverage of the minimum wage law


The BMBEs shall be exempt from the coverage of the minimum wage law provided that
all employees covered under this act shall be entitled to the same benefits given to any
regular employee such as SSS and health care benefits
e. Retail and service establishment (Wage Rationalization act [ RA 6727]) requisites:
i. The establishment is generally employing not more than 10 employees
ii. The employer has applied for the exception with the regional board
iii. The application for exemption has been granted in accordance with the
applicable rules and regulations issued by the commission
f. Wage orders by the wage boards

ART. 100. Prohibition against elimination or diminution of benefits.


Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.

5 requisites for the application of the Non-diminution of benefits rule:


1) The grant of the benefits is founded on a policy or has ripened into a practice over a long period
of time
2) The practice is consistent and deliberate
3) The practice is not due to error in the construction or application of a doubtful or difficult
question of law
4) It is not based on of a strict legal or contractual obligation but by reason of an act of liberality on
the part of the employer
5) The diminution or discontinuance is done unilaterally by the employer.
The practice to constitute practice under the Non-Diminution rule must subscribe to the following:
1) The employer continue to give the benefits
2) The employer fully knew that the said employees are not covered by the law requiring payment
thereof.

The time required for the practice to ripened into a long period of time is subject to reasonable standards
however the court has least number of years approved by the court is 2 years.

Comment:
The rule on non-diminution of benefits embodied in article 100 covers only those benefits already in
existence prior the promulgation of the labor code on 01 May 1974 and prevents its diminution due to the
provisions found in the code.

However under the principle of mutuality of contracts under article 1308 of the civil code, the terms of
the contract whether express or implied cannot be withdrawn except by mutual agreement of the parties.

Exceptions to the non-diminution rule:


1) Correction of error
2) Negotiated benefits
3) Wage order compliance
4) Benefits on reimbursement basis
5) Reclassification of position
6) Contingent benefits or conditional bonus (bonus not part of the wage)
7) Productivity incentives

13 month pay

Employees excluded from the coverage of the 13th month pay law:
1) Managerial employees;
2) Those covered under the civil service law;
3) Those already receiving 13th month pay or its equivalent. Christmas bonus, mid-year bonus, cash
bonuses and other payments amounting to not less than 1/12 of the basic salary are treated as
equivalent of 13th month pay;
4) Household helpers and persons in the personal service of another; and
5) Those paid on purely commission, boundary, or task basis, and those who are paid fixed amount
for performing specific work except those paid on a piece-rate basis.
6) Seafarers, since there are more appropriately termed as contract employees

Harmonization of Duplicators inc. VS. NLRC and BOIE-Takeda VS. SEC of Labor

The ruling of the court here is that 13th month pay may include the commission earned by the employee
for the calendar year provided that the commission forms part of the basic salary. The following are the
criteria used to determine whether commission is part of the term basic salary:
1) Does not partake of a profit sharing or productivity bonus incentive program (Takeda) since the
medical representatives here are similar to that of a promotion agents which are not tasked to sell
the goods of the company
2) That the commission is based on the predetermined percent of the selling price of the goods sold
by each salesman
Hence if the incentive or commission is given as something extra for which no specific additional
services are rendered by any particular employee, such incentive is not part of the employees basic
salary. However when the commissions or incentives are related or directly proportional to the extent of
energy of an employees endeavors and the commissions paid based upon the specific result achieved by
employee such as via a percentage of the sales closed by the employee, such commission forms part of
such employees basic pay.

Comment:
Teachers overload work is included in the calculation of the 13 th month pay.
The load in excess of the normal load of a private school teacher as prescribed by DECS or the policies,
rules and standard of particular private schools. Overload work is different from overtime work since the
former may be performed within the 8 hour work day of the employee and refers to the additional load a
teacher is requested to perform outside the regular load prescribed by DECS or the policies, rules or
standards of the involved private school. Whereas overtime refers to work performed outside the 8 hour
work day of a teacher.

Comment:
a) A distressed employer may seek exemption from the 13 th month pay rule with the SEC of labor
his failure to do so would render him covered by the said rule.
b) The disagreement as to the computation of the 13 th month pay is not a strikeable issue and any
strike held for that purpose is considered an illegal strike

ART. 101. Payment by results.


The Secretary of Labor and Employment shall regulate the payment of wages by results, including
pakyao, piecework, and other non-time work, in order to ensure the payment of fair and reasonable wage
rates, preferably through time and motion studies or in consultation with representatives of workers and
employers organizations.

2 groups of employees paid by result:


1) Those whose time and performance are supervised by the employer
Technically called piece rate workers, the distinguishing factor is the presence of element of
control, hence the E&E relationship exists.
2) Those whose time and performance are unsupervised.
Technically called pakiaw and takay employess

2 methods in determining the compensation of a piece rate worker:


1) Those who are paid pieces rates which are prescribed in piece rate orders issued by dole
Wages or earnings in this category are determined by simply multiplying the number of pieces
produced by the rate per piece amount
2) Those who are paid output rates which are prescribed by the employer and are not yet approved
by DOLE
The number of pieces produced is multiplied by the rate per piece amount provided by the
employer. If the resulting amount is equal or greater than the applicable statutory minimum wage,
the worker shall receive such amount. If the resulting amount is less than the applicable statutory
minimum wage, the employer shall pay the resulting amount and the difference between them.

Comment:

A closer reading of article 82 would show that the piece rate workers that are excluded from the coverage
of title 1 of book 3 of the LC is subjected to the discretion of the SEC of Labor as supported by:

In any event the IRR of the LC provides that the piece rate employees whose time and performance are
supervised by the employer are entitled to:
1) Statutory minimum daily rate
2) Yearly SIL of 5 days with pay (if with power of control)
3) Night shift differential pay (if with power of control)
4) Holiday pay(if with power of control)
5) Meal and rest periods
6) OT (conditional)
a. If the rates has been set by the SEC of Labor no OT is applicable
b.
7) Premium pay (conditional)
a. If the rates has been set by the SEC of Labor no OT is applicable
b.
8) 13 month pay
9) Other benefits granted by law, CBA or individual agreements or company policy or practice

NCC Art. 1467.


A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his
business manufactures or procures for the general market, whether the same is on hand at the time or not,
is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his
special order, and not for the general market, it is a contract for a piece of work. (n)

ART. 102. Forms of payment.


No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons,
tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the
employee.

Payment of wages by check or money order shall be allowed when such manner of payment is customary
on the date of effectivity of this Code, or is necessary because of special circumstances as specified in
appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a
collective bargaining agreement.
Comment:
When the employee alleges that there has been non-payment of wages and/or commission the employer
has the burden to prove payment

ART. 103. Time of payment.


Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen
(16) days. If on account of force majeure or circumstances beyond the employers control, payment of
wages on or within the time herein provided cannot be made, the employer shall pay the wages
immediately after such force majeure or circumstances have ceased. No employer shall make payment
with less frequency than once a month.

The payment of wages of employees engaged to perform a task which cannot be completed in two (2)
weeks shall be subject to the following conditions, in the absence of a collective bargaining agreement or
arbitration award:
(1) That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of
work completed;
(2) That final settlement is made upon completion of the work.

ART. 104. Place of payment.


Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such
regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater
protection of wages

IRR place of payment


Place of payment. As a general rule, the place of payment shall be at or near the place of undertaking.
Payment in a place other than the work place shall be permissible only under the following
circumstances:
(a) When payment cannot be effected at or near the place of work by reason of the deterioration of peace
and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic
or other calamity rendering payment thereat impossible;
(b) When the employer provides free transportation to the employees back and forth; and
(c) Under any other analogous circumstances; Provided, That the time spent by the employees in
collecting their wages shall be considered as compensable hours worked;
(d) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage
clinic, dance hall, or other similar places or in places where games are played with stakes of money or
things representing money except in the case of persons employed in said places.

Requirements of payment through banks


1) Written permission of the majority of the employees or workers concerned,
2) The employer is a private establishment, company, business, or any other entities with 25 or more
employees
3) The employers place of business is located within 1km radius of the bank who shall make the
payment
4) The paying bank can issue upon request of an employee a certification of record of payment of
wages of a particular worker for a particular payroll period.

ART. 105. Direct payment of wages. - Wages shall be paid directly to the workers to whom they are due,
except:

(a) In cases of force majeure rendering such payment impossible or under other special circumstances to
be determined by the Secretary of Labor and Employment in appropriate regulations, in which case,
the worker may be paid through another person under written authority given by the worker for the
purpose; or

(b) Where the worker has died, in which case, the employer may pay the wages of the deceased worker to
the heirs of the latter without the necessity of intestate proceedings. The claimants, if they are all of
age, shall execute an affidavit attesting to their relationship to the deceased and the fact that they are
his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be
executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be presented to the
employer who shall make payment through the Secretary of Labor and Employment or his
representative. The representative of the Secretary of Labor and Employment shall act as referee in
dividing the amount paid among the heirs. The payment of wages under this Article shall absolve the
employer of any further liability with respect to the amount paid.

ART. 106. Contractor or subcontractor.


Whenever an employer enters into a contract with another person for the performance of the formers
work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance
with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to
such employees to the extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only contracting and job contracting as
well as differentiations within these types of contracting and determine who among the parties involved
shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of
any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.

ART. 107. Indirect employer. - The provisions of the immediately preceding article shall likewise apply to
any person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.

ART. 108. Posting of bond. - An employer or indirect employer may require the contractor or
subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will
answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to
pay the same.

ART. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every
employer or indirect employer shall be held responsible with his contractor or subcontractor for any
violation of any provision of this Code. For purposes of determining the extent of their civil liability
under this Chapter, they shall be considered as direct employers.

Labor only contracting as defined in D.O no, 18-02 Section 5:

Section 5. Prohibition against labor-only contracting.


Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer
to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to
perform a job, work or service for a principal, and any of the following elements are present:
i) The contractor or subcontractor does not have substantial capital or investment which relates to the
job, work or service to be performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly related to the main business of
the principal; or
ii) the contractor does not exercise the right to control over the performance of the work of the
contractual employee.

The foregoing provisions shall be without prejudice to the application of Article 248 (C ) of the Labor
Code, as amended.

"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements, machineries and work premises, actually and directly used by
the contractor or subcontractor in the performance or completion of the job, work or service contracted
out.

The "right to control" shall refer to the right reserved to the person for whom the services of the
contractual workers are performed, to determine not only the end to be achieved, but also the manner and
means to be used in reaching that end.
Comment:

Labor-only contracting is hereby declared prohibited. For this purpose, labor only contracting shall refer
to an arrangement where the contractor or subcontractor merely recruits, supplies or place workers to
perform a job, work or service for a principal, and any of the following elements are present:

1) The contractor does not have substantial capital or investment which relates to the job, work or
service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the
principal; or
2) The contractor does not exercise the right to control over the performance of the work of the
contractual employee.

Elements of labor-only contractor:


1) There is an arrangement to merely recruit, supply or place workers to perform a job, work or
service to the principal.
2) Existence of either of the following confirming elements:
a. Lack of substantial capital or investment and performance of activities directly related to
the principals main business
b. Contractor does not exercise control over the performance of the employees

DO no. 18-02
Section 10. Effect of Termination of Contractual Employment.
In cases of termination of employment prior to the expiration of the contract between the principal and the
contractor or subcontractor, the right of the contractual employee to separation pay or other related
benefits shall be governed by the applicable laws and jurisprudence on termination of employment.

Where the termination results from the expiration of the contract between the principal and the contractor
or subcontractor, or from the completion of the phase of the job, work or service for which the contractual
employee is engaged, the latter shall not be entitled to separation pay. However, this shall be without
prejudice to completion bonuses or other emoluments, including retirement pay as may be provided by
law or in the contract between the principal and the contractor or subcontractor.

Section 11. Registration of Contractors or Subcontractors.


Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit the
contracting out of labor through appropriate regulations, a registration system to govern contracting
arrangements and to be implemented by the Regional Offices is hereby established.

The registration of contractors and subcontractors shall be necessary for purposes of establishing an
effective labor market information and monitoring. Failure to register shall give rise to the presumption
that the contractor is engaged in labor-only contracting.
Section 6. Prohibitions.
Notwithstanding Section 5 of these Rules, the following are hereby declared prohibited for being contrary
to law or public policy:
(a) Contracting out of a job, work or service when not done in good faith and not justified by the
exigencies of the business and the same results in the termination of regular employees and reduction
of work hours or reduction or splitting of the bargaining unit;
(b) Contracting out of work with a "cabo" as defined in Section 1 (ii), Rule I, Book V of these Rules.
"Cabo" refers to a person or group of persons or to a labor group which, in the guise of a labor
organization, supplies workers to an employer, with or without any monetary or other consideration
whether in the capacity of an agent of the employer or as an ostensible independent contractor;
(c) Taking undue advantage of the economic situation or lack of bargaining strength of the contractual
employee, or undermining his security of tenure or basic rights, or circumventing the provisions of
regular employment, in any of the following instances:
i) In addition to his assigned functions, requiring the contractual employee to perform functions
which are currently being performed by the regular employees of the principal or of the
contractor or subcontractor;
ii) Requiring him to sign, as a precondition to employment or continued employment, an antedated
resignation letter; a blank payroll; a waiver of labor standards including minimum wages and
social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from
any liability as to payment of future claims; and
iii) Requiring him to sign a contract fixing the period of employment to a term shorter than the term
of the contract between the principal and the contractor or subcontractor, unless the latter contract
is divisible into phases for which substantially different skills are required and this is made
known to the employee at the time of engagement;
(d) Contracting out of a job, work or service through an in-house agency which refers to a contractor or
subcontractor engaged in the supply of labor which is owned, managed or controlled by the principal
and which operates solely for the principal;
(e) Contracting out of a job, work or service directly related to the business or operation of the principal
by reason of a strike or lockout whether actual or imminent;
(f) Contracting out of a job, work or service being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to self organization as provided in
Art.248 (c) of the Labor Code, as amended.

Section 7. Existence of an employer-employee relationship.


The contractor or subcontractor shall be considered the employer of the contractual employee for
purposes of enforcing the provisions of the Labor Code and other social legislation. The principal,
however, shall be solidarily liable with the contractor in the event of any violation of any provision of the
Labor Code, including the failure to pay wages.

The principal shall be deemed the employer of the contractual employee in any of the following cases, as
declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions provided in Section 6
(Prohibitions) hereof.

Comment:
Prohibited labor only contracting under DO 18-02
1) labor only contracting
2) contracting that terminates the employment of regular employees or reduces their work hours, or
reduces or splits a bargaining unit, if such contracting out is not done in good faith and not
justified by business exigencies
3) contracting with a cabo
4) contracting with in house agency
5) contracting because of a strike or lock out (under article 264, an employer may directly hire
replacements during a strike or lock out)
6) contracting that constitute ULP under article 248

exploitative acts under section 6 do 18-02

(c) Taking undue advantage of the economic situation or lack of bargaining strength of the contractual
employee, or undermining his security of tenure or basic rights, or circumventing the provisions of
regular employment, in any of the following instances:
iv) In addition to his assigned functions, requiring the contractual employee to perform functions
which are currently being performed by the regular employees of the principal or of the
contractor or subcontractor;
v) Requiring him to sign, as a precondition to employment or continued employment, an antedated
resignation letter; a blank payroll; a waiver of labor standards including minimum wages and
social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from
any liability as to payment of future claims; and
vi) Requiring him to sign a contract fixing the period of employment to a term shorter than the term
of the contract between the principal and the contractor or subcontractor, unless the latter contract
is divisible into phases for which substantially different skills are required and this is made
known to the employee at the time of engagement;

Commission of any of the acts prohibited as well as labor contracting will render the principal of the
contractor or subcontractor the employer of the workers thereby legally subjecting him to all the
provisions applicable to an employer with respect to his employees, as provided for by section 7 of DO
18-02 provided however that the solidary liability of the principal is qualified or limited only. This means
that the liability of the principal extends only to failure to pay the wages, SIL holiday pay and other
benefits provided for by law. But if the liability invested is punitive in character, such as an award for
backwages and separation pay because of illegal dismissal by the contractor, the sole liability of which
lies with the contractor unless the principal conspired with him to illegal dismiss the employee (rosewood
processing vs NLRC)

Hence solidary liability of the principal for labor only contractor and commission of the prohibited acts is
limited to the following:
1) Payment to the extent of the work performed under the contract (article 106)
2) Payment to the performance of any work, task job or project (107)
3) To the extent of their civil liability under this chapter ( payment of wages) (109)

However if the contractor validly engages in job contracting only the solidary liability of the employer is
limited only to the nonpayment of wages of the contractor for which he can prior the engagement require
the latter to set up a bond.

Note: in a recent case the SC has ruled that the SSC has the authority and jurisdiction to determine the
existence of a E&E between the parties in order to determine who is the appropriate party to create and
pay for the SSS contributions of the workers in question RP vs Asiapro

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.

Factors to consider in determining the existence of a independent contractor:


1) Whether the contract is carrying on an independent business
2) Nature and extend of the work
3) The skill required
4) The term and duration of the relationship
5) The right to assign the performance of specified pieces of work
6) The control and supervision of the workers
7) The power of the employer with respect to the hiring and firing and payment of the workers of
the contractor
8) The control of the premises
9) The duty to supply premises, tools, appliances, materials and labor
10) The mode, manner and terms of payment.

Comment:
The solidary liability of the principal in the event that the independent contractor fails to pay the wages of
the workers is limited only to the wages earned in respect to the service rendered for the benefit of the
principal.

In cases where the principal made payment he can secure reimbursement from the employer however this
is not permissible in the same labor case he must institute a separate case in the RTC since this issue does
not devolve upon a labor dispute by arising from a civil contract.

Comment:
The general rule is that if there is a change in the law requiring a higher pay for any services rendered
including holiday pay and the like only the employer, in this case the independent contractor is liable to
pay the increase however a special circumstance is created by RA 6727 with respect to the increase of
wage rate of employees mentioned below:

Section 6. In the case of contracts for construction projects and for security, janitorial and similar
services, the prescribed increases in the wage (statutory minimum wage) rates of the workers
shall be borne by the principals or clients of the construction/service contractors and the contract
shall be deemed amended accordingly. In the event, however, that the principal or client fails to
pay the prescribed wage rates, the construction/service contractor shall be jointly and severally
liable with his principal or client.

Adjustment of contract rates between the independent contractor and the principal is not within the
jurisdiction of the DOLE nor of the NLRC but with the courts of general jurisdiction since it does arise
from an E&E relationship

ART. 110. Worker preference in case of bankruptcy.


In the event of bankruptcy or liquidation of an employers business, his workers shall enjoy first
preference as regards their wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the
government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March
21, 1989).

Comment:
Rules to consider in the preference of workers in case of bankruptcy:
1) The SC has ruled that the preference shall arise only upon judicial determination of bankruptcy of
the employer hence until that time the worker is not accorded the preference givern by art 110
2) The preference must be distinguished from a lien, hence the lien given by law to mortgagors as
well as to the government for payment of taxes shall take precedence over the workers right to
preference.

ART. 111. Attorneys fees.


(a) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings
for the recovery of wages, attorneys fees which exceed ten percent of the amount of wages
recovered.

Comment:
2 concepts of attys fees:
1) Ordinary concept
Is the reasonable compensation paid to a lawyer by his client for legal services rendered. In absences
of a stipulation the amount of attys fee will be determined based on quatum meruit
2) Extraordinary attys fee
Are indemnity for damages ordered by the court to be paid by the losing party in litigation

Instances under the labor code where extraordinary ATTYs fees may be granted:
1) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages recovered (110 A)
2) Those arising from CBA negotiations that may be charged against union funds in an amount to be
agreed upon by the parties.

ART. 112. Non-interference in disposal of wages.


No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages.
He shall not in any manner force, compel, or oblige his employees to purchase merchandise, commodities
or other property from any other person, or otherwise make use of any store or services of such employer
or any other person.

Pertinent civil code provisions:

Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.

Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred
for food, shelter, clothing and medical attendance.

Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

ART. 113. Wage deduction.


No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of
his employees, except:
i. In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
ii. For union dues, in cases where the right of the worker or his union to check-off has been recognized
by the employer or authorized in writing by the individual worker concerned; and
iii. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and
Employment.

Cases where the law allows deductions from payment:


1) Deduction for value of meals and other facilities
2) In cases where the employee is insured with his consent by the employer, deductions for the
amount paid by said employer, as premiums on the insurance
3) In cases where the right of the employee or his union to check off has been recognized by the
employer or authorized in writing by the individual employee concerned
4) In cases where the employee is indebted to the employer, where such indebtness has become due
and demandable
5) In court awards, wages may be subject of execution or attachment, but only for debts incurred for
food, shelter, clothing and medical attendance
6) Withholding tax
7) Salary deductions of a member of a legally established cooperative
8) SSS, medicare and pagibig contributions

Comment:
Unjustified work reduction not backed up by evidence is a ground for constructive dismissal or ULP
depending on the circumstances

Comment:
Although the law allows the employer to deduct from the wages of their employee the debts of the latter
to the former which are due and demandable, the same is outside the jurisdiction of the labor courts but is
vested in the civil courts since it is excluded in the enumeration under article 217 of the LC and is based
on article 1706 of the civil code.

IRR Book 3 rule VIII section 13


SECTION 13. Wages deduction.

Deductions from the wages of the employees may be made by the employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums
advanced by the employer in behalf of the employee as well as union dues where the right to check-
off has been recognized by the employer or authorized in writing by the individual employee himself.

(b) When the deductions are with the written authorization of the employees for payment to the third
person and the employer agrees to do so; Provided, That the latter does not receive any pecuniary
benefit, directly or indirectly, from the transaction.

ART. 114. Deposits for loss or damage.


No employer shall require his worker to make deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer, except
when the employer is engaged in such trades, occupations or business where the practice of making
deductions or requiring deposits is a recognized one, or is necessary or desirable as determined by the
Secretary of Labor and Employment in appropriate rules and regulations.

ART. 115. Limitations.


No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made
unless the employee has been heard thereon, and his responsibility has been clearly shown.

4 conditions for deductions for loss or damage IRR:


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 the deduction should not be made
3) The amount of the deduction is fair and reasonable and shall not exceed the actual loss or damage
4) The deduction from the employees wage does not exceed 20% of the employees wages in a
week.

ART. 116. Withholding of wages and kickbacks prohibited.


It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a
worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any
other means whatsoever without the workers consent.

ART. 117. Deduction to ensure employment.


It shall be unlawful to make any deduction from the wages of any employee for the benefit of the
employer or his representative or intermediary as consideration of a promise of employment or retention
in employment.

Comment:
The practice wherein the employer deducts a percentage from the monthly salary of an employee in
consideration of their securing his employment is hereby declared null and void for being contracry to
public policy and the abovestated provision

ART. 118. Retaliatory measures.


It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any
manner discriminate against any employee who has filed any complaint or instituted any proceeding
under this Title or has testified or is about to testify in such proceedings.

Comment:
Prohibition on retaliatory measures includes silent testimonies, meaning where the employee refuses to
testify in favor of the employer in court, article 118 shall be violated if the employer retaliates.

ART. 119. False reporting.


It shall be unlawful for any person to make any statement, report, or record filed or kept pursuant to the
provisions of this Code knowing such statement, report or record to be false in any material respect.
6 Records an employer must keep:
1) Length of time to be paid
2) Rate of per month, week, day or hours, piece or etc
3) Amount due for regular work
4) Amount due for overtime work
5) Deductions made from the wages
6) Amounts actually paid

Wage studies, Wage agreements and Wage determination

ART. 123. Wage Order.


Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent
facts; and based on the standards and criteria herein prescribed, shall proceed to determine whether a
Wage Order should be issued. Any such Wage Order shall take effect after fifteen (15) days from its
complete publication in at least one (1) newspaper of general circulation in the region.

In the performance of its wage-determining functions, the Regional Board shall conduct public
hearings/consultations, giving notices to employees and employers groups, provincial, city and
municipal officials and other interested parties.

Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the
Commission within ten (10) calendar days from the publication of such order. It shall be mandatory for
the Commission to decide such appeal within sixty (60) calendar days from the filing thereof.

The filing of the appeal does not stay the order unless the person appealing such order shall file with the
Commission, an undertaking with a surety or sureties satisfactory to the Commission for the payment to
the employees affected by the order of the corresponding increase, in the event such order is affirmed. (As
amended by Republic Act No. 6727, June 9, 1989).

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:
The demand for living wages;
(c) Wage adjustment vis--vis the consumer price index;
(d) The cost of living and changes or increases therein;
(e) The needs of workers and their families;
(f) The need to induce industries to invest in the countryside;
(g) Improvements in standards of living;
(h) The prevailing wage levels;
(i) Fair return of the capital invested and capacity to pay of employers;
(j) Effects on employment generation and family income; and
(k) The equitable distribution of income and wealth along the imperatives of economic and social
development.

The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing
minimum wages in every region. These wages shall include wages varying with industries, provinces or
localities if in the judgment of the Regional Board, conditions make such local differentiation proper and
necessary to effectuate the purpose of this Title.

Any person, company, corporation, partnership or any other entity engaged in business shall file and
register annually with the appropriate Regional Board, Commission and the National Statistics Office, an
itemized listing of their labor component, specifying the names of their workers and employees below the
managerial level, including learners, apprentices and disabled/handicapped workers who were hired under
the terms prescribed in the employment contracts, and their corresponding salaries and wages.

Where the application of any prescribed wage increase by virtue of a law or wage order issued by any
Regional Board results in distortions of the wage structure within an establishment, the employer and the
union shall negotiate to correct the distortions. Any dispute arising from wage distortions shall be
resolved through the grievance procedure under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute
shall be decided by the voluntary arbitrators within ten (10) calendar days from the time said dispute was
referred to voluntary arbitration.

In cases where there are no collective agreements or recognized labor unions, the employers and workers
shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the
National Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of
conciliation, shall be referred to the appropriate branch of the National Labor Relations Commission
(NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute
within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.

The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of
any increase in prescribed wage rates pursuant to the provisions of law or wage order.

As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results
in the elimination or severe contraction of intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases of
differentiation.
All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall
receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof
for working less than eight (8) hours.

All recognized learnership and apprenticeship agreements shall be considered automatically modified
insofar as their wage clauses are concerned to reflect the prescribed wage rates. (As amended by Republic
Act No. 6727, June 9, 1989).

2 methods of minimum wage adjustment:


1) The fixing of determinate amount that would be added to the prevailing statutory minimum wage
2) The salary ceiling method whereby the wage adjustment is applied to employees receiving a
certain denominated salary ceiling.

Wage distortion
A situation where an increase in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative difference in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinction embodied in such wage structure based on skills,
length of service, or other logical bases of differentiation. In order for wage distortion to be susceptible of
rectification under the provisions of article 124 of the LC, the same must have resulted from compliance
with a wage order or a valid governmental order.

ART. 128. Visitorial and enforcement power.


a) The Secretary of Labor and Employment or his duly authorized representatives, including labor
regulation officers, shall have access to employers records and premises at any time of the day or
night whenever work is being undertaken therein, and the right to copy therefrom, to question any
employee and investigate any fact, condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules
and regulations issued pursuant thereto.

b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases
where the relationship of employer-employee still exists, the Secretary of Labor and Employment or
his duly authorized representatives shall have the power to issue compliance orders to give effect to
the labor standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where the employer contests the findings
of the labor employment and enforcement officer and raises issues supported by documentary proofs
which were not considered in the course of inspection.

c) An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this Article may be appealed to the latter. In case said order involves a monetary award, an
appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from. (As amended by Republic Act No.
7730, June 2, 1994).

iv. The Secretary of Labor and Employment may likewise order stoppage of work or suspension of
operations of any unit or department of an establishment when non-compliance with the law or
implementing rules and regulations poses grave and imminent danger to the health and safety of
workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine
whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case
the violation is attributable to the fault of the employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of work or suspension of operation.

v. It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective
the orders of the Secretary of Labor and Employment or his duly authorized representatives issued
pursuant to the authority granted under this Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders issued in accordance with this Article.

vi. Any government employee found guilty of violation of, or abuse of authority, under this Article shall,
after appropriate administrative investigation, be subject to summary dismissal from the service.

vii. The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep
and maintain such employment records as may be necessary in aid of his visitorial and enforcement
powers under this Code.

3 approaches of labor standard enforcement framework ( DO 57-04


1) Self-assessment
Is a voluntary compliance mode applicable to and encouraged in establishments with at least 200
workers and, regardless of number of workers, to unionized firms with CBAs. The self-
assessment is guided with a checklist that dole provides in the 1 st quarter of every year. Within a
month after receiving the checklist a committee compose of employer and employee
representatives shall accomplish the checklist and submit it to the DOLE in five days
2) Inspection
Is undertaken by DOLE inspectors in workplaces with 10 to 199 employees
3) Advisory service
Consists in providing advisory services to establishments with less than 10 employees and those
registered BMBEs

Comment:
A condition in order for the secretary of labor or a regional director to exercise its enforcement power
under article 128 (b) is that the work relationship between the parties must be existing at the time of the
filling of the complaint, formal or informal. However when the employees who filed the complaint has
been dismissed, the case is placed out of the jurisdiction of the SOL or the RD since the issue now has
become a case for illegal dismissal hence jurisdiction is properly lodged with the labor arbitrators.
Powers of the SOL and RD
1) Visitorial or inspection power
2) Enforcement power
a. Issue Compliance order with the labor standards provisions of the LC and other labor
legislation
b. Issue writs of execution to the appropriate authority for the enforcement of his orders in
line with the provisions of article 128 in relation to article 289 and 290

Requirements of the exercise of enforcement power of the SOL or RD


1) The existence of E&E at the time of filling of the formal or informal complaint
2) It must be issued after due notice and hearing
3) Based upon the findings of the labor regulation officer or industrial safety engineers made in the
course of inspection

However in those cases where the employer contests the finding of the labor standards and welfare
officers and raises issues which cannot be resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection, the regional director must endorse the case to the
appropriate arbitration branch of the NLRC.

The visitorial power of the SOL or RD extends to matters not included in the complaint as the power is
provided in article 128 of the LC which was not made subject to the submission of a previous complaint

Comment:
Violations of labor standards found during the inspection is susceptible to a compromise agreement
however subject to the following conditions:
1) It must be reduced in writing
2) Signed by the parties
3) In the presence of the RD
4) A settlement that provides for an amount of money far below the sum legally due violates public
policy even if signed in the presence of the DR, hence is appealable to the SOL

Procedure of complaint inspection article 128


1) Submission of complaint
2) Inspection conducted by the DOLE
3) Notice of inspection results will be issued requiring the employer to comply with the standards
4) If proof of compliance is not submitted within 7 days from the receipt of inspection results or
field inspection cannot be made for reasons attributable to the employer, the DR shall summon
the parties for summary investigation
5) Issuance of compliance order if applicable
6) Appeal to the SOL
7) Appeal to CA via ceritorari

Comment:
1) Enforcement orders for suspension of operations is not susceptible to injunctive relief.
2) A pre condition to a valid appeal is the posting of a cash or surety bond equivalent to the
monetary award which the SOL cannot reduce
3) All employees shall benefit the rectification ordered by the SOL even those who are not signatory
to the complaint under the reasoning that the correction was a result of the visitorial power of the
DR or SOL.

Double indemnity in violations of the minimum wage act or wage orders


Is the payment to a concerned employee of the prescribed increases or adjustment in the wage rate which
was not paid by an employer in an amount equivalent to twice the unpaid benefits owing to such
employee

ART. 129. Recovery of wages, simple money claims and other benefits.
Upon complaint of any interested party, the Regional Director of the Department of Labor and
Employment or any of the duly authorized hearing officers of the Department is empowered, through
summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits, including legal interest, owing to an employee or person
employed in domestic or household service or househelper under this Code, arising from employer-
employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided
further, That the aggregate money claims of each employee or househelper does not exceed Five thousand
pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within
thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be
paid on order of, the Secretary of Labor and Employment or the Regional Director directly to the
employee or househelper concerned. Any such sum not paid to the employee or househelper because he
cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall
be held as a special fund of the Department of Labor and Employment to be used exclusively for the
amelioration and benefit of workers.

Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days from the submission of the last pleading required or
allowed under its rules.chan robles virtual law library

The Secretary of Labor and Employment or his duly authorized representative may supervise the payment
of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any
employee or househelper under this Code. (As amended by Section 2, Republic Act No. 6715, March 21,
1989).
Requirements to avail of the summary proceedings by the DR for money claims under article 129
1) The claim is presented by an employee, or a person employed in domestic or household service or
househelper
2) The claim arises from E&E relations
3) The claimant does not seek reinstatement
4) The aggregate money claim of each claimant does not exceed P5k

In the absence of any of the above requisites, the labor arbiter shall have exclusive jurisdiction over
claims arising from E&E relationships save that of claims arising from those specified under article 217

128 129
Nature and subject of proceedings
Refers to inspection of establishments and issuance Refers to adjudication through summary
of orders to compel compliance with labor proceedings after due notice and hearing of
standards, wage orders and other labor laws and employees money claims for wages and benefits.
regulations. Hence refers to enforcement of labor Hence involves only money claims arising from
legislations labor standards
Workers involved
Involves workers currently employed by the Refers to past and present employees provided that
employer reinstatement is not requested
Jurisdictional limits
No limits required by law Requisites for exercise of jurisdiction are set forth
in article 129
Officers designated
SOL or any of his duly authorized representatives RD ir aby duly authorized hearing officer of the
who may or may not be a RD DOLE
Appeals
Appealable to the SOL Appealable to the NLRC

Adjustment of contract rates between the independent contractor and the principal is not within the
jurisdiction of the DOLE nor of the NLRC but with the courts of general jurisdiction since it does arise
from an E&E relationship

Employment of Women

Article 135. 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.

The following are acts of discrimination:

(a) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe
benefits, to a female employee as against a male employee, for work of equal value; and
(b) Favoring a male employee over a female employee with respect to promotion, training opportunities,
study and scholarship grants solely on account of their sexes.

Criminal liability for the willful commission of any unlawful act as provided in this Article or any
violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as provided in
Articles 288 and 289 of this Code: Provided, That the institution of any criminal action under this
provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for
money claims, which may include claims for damages and other affirmative reliefs. The actions hereby
authorized shall proceed independently of each other. (As amended by Republic Act No. 6725, May 12,
1989).

Art. 136. Stipulation Against Marriage


It shall be unlawful for an employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon
getting married a woman employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

Article 137. Prohibited Acts. (a) It shall be unlawful for any employer:
(1) To deny any woman employee the benefits provided for in this Chapter or to discharge any woman
employed by him for the purpose of preventing her from enjoying any of the benefits provided under
this Code;
(2) To discharge such woman on account of her pregnancy, or while on leave or in confinement due to
her pregnancy;
(3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may
again be pregnant.

Article 138. Classification of Certain Women Workers. Any woman who is permitted or suffered
to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or
similar establishments under the effective control or supervision of the employer for a substantial
period of time as determined by the Secretary of Labor and Employment, shall be considered as an
employee of such establishment for purposes of labor and social legislation.

Sexual Harassment
SECTION 3. Work, Education or Training -Related, Sexual Harassment Defined.
Work, education or training-related sexual harassment is committed by an employer, 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, re-employment or
continued employment of said individual, or in granting said individual favorable compensation,
terms of conditions, promotions, or privileges; or the refusal to grant the sexual favor results in
limiting, segregating or classifying the employee which in any way would discriminate, deprive
or diminish employment opportunities or otherwise adversely affect said employee;
(2) The above acts would impair the employee's rights or privileges under existing labor laws; or
(3) The above acts 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
consideration; 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.

SECTION 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 and joint1y approved by the
employees or students or trainees, through their duly designated representatives, prescribing the
procedure for the investigation of 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 subsection (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 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 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, instructors, professors
or coaches and students or trainees, as the case may be.
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.

EMPLOYMENT OF MINORS

Article 139. Minimum Employable Age.


(a) No child below fifteen (15) years of age shall be employed, except when he works directly under the
sole responsibility of his parents or guardian, and his employment does not in any way interfere with
his schooling.

(b) Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of
hours and such periods of the day as determined by the Secretary of Labor and Employment in
appropriate regulations.

(c) The foregoing provisions shall in no case allow the employment of a person below eighteen (18)
years of age in an undertaking which is hazardous or deleterious in nature as determined by the
Secretary of Labor and Employment.

Article 140. Prohibition Against Child Discrimination.


No employer shall discriminate against any person in respect to terms and conditions of employment on
account of his age.

Hazardous Work
1) Where the nature of the work exposes the workers to dangerous environmental elements,
contaminations or work conditions including ionization radiations, chemicals, fire, flammable
substances noxious components, and the like
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 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
5) Where workers use or are exposed to power driven tools

RA 7610 as amended by RA 9231

Section 12 of the same Act, as amended, is hereby further amended to read as follows:

Sec. 2. 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 child's 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 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: 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 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 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. 2-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 o'clock in the
evening and six o'clock 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 o'clock in the evening and six o'clock in the
morning of the following day."

Sec. 12-B. Ownership, Usage and Administration of the Working Child's 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 child's 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 of preference on parental
authority as provided for under the Family Code shall apply.

Sec. 12-C. Trust Fund to Preserve Part of the Working Child's 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 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, co-agents 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

EMPLOYMENT OF HOUSEHELPERS
Article 141. Coverage.
This Chapter shall apply to all persons rendering services in households for compensation.

Domestic or household service shall mean service in the employers home which is usually necessary
or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort
and convenience of the members of the employers household, including services of family drivers.

Article 142. Contract of Domestic Service.


The original contract of domestic service shall not last for more than two (2) years but it may be renewed
for such periods as may be agreed upon by the parties.

Article 143. Minimum Wage.


(a) Househelpers shall be paid the following minimum wage rates:
(1)Two Thousand Five Hundred (P2,500) a month for househelpers in Manila, Quezon, Pasay, and
Caloocan cities and municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas,
Malabon, Paranaque, Las Pias, Pasig, Marikina, Valenzuela, Taguig and Pateros in Metro Manila
and in highly urbanized cities;
(2)Two Thousand (P2,000.00) a month for those in other chartered cities and first-class municipalities;
and
(3)One Thousand Five Hundred pesos (P1500.00) a month for those in other municipalities.

Provided, That the employers shall review the employment contracts of their househelpers every three (3)
years with the end in view of improving the terms and conditions thereof.

Provided, further, That those househelpers who are receiving at least One thousand pesos (P1,000.00)
shall be covered by the Social Security System (SSS) and be entitled to all the benefits provided
thereunder. (As amended by Republic Act No. 7655, August 19, 1993).

Article 144. Minimum Cash Wage.


The minimum wage rates prescribed under this Chapter shall be the basic cash wages which shall be paid
to the househelpers in addition to lodging, food and medical attendance.

Article 145. Assignment to Non-Household Work.


No househelper shall be assigned to work in a commercial, industrial or agricultural enterprise at a wage
or salary rate lower than that provided for agricultural or non-agricultural workers as prescribed herein.

Article 146. Opportunity for Education.


If the househelper is under the age of eighteen (18) years, the employer shall give him or her an
opportunity for at least elementary education. The cost of education shall be part of the househelpers
compensation, unless there is a stipulation to the contrary.

Article 147. Treatment of Househelpers.


The employer shall treat the househelper in a just and humane manner. In no case shall physical violence
be used upon the househelper.
Article 148. Board, Lodging, and Medical Attendance.
The employer shall furnish the househelper, free of charge, suitable and sanitary living quarters as well as
adequate food and medical attendance.

Article 149. Indemnity for Unjust Termination of Services.


If the period of household service is fixed, neither the employer nor the househelper may terminate the
contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed,
he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of
indemnity.

If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or
her not exceeding fifteen (15) days.

Article 150. Service of Termination Notice.


If the duration of the household service is not determined either in stipulation or by the nature of the
service, the employer or the househelper may give notice to put an end to the relationship five (5) days
before the intended termination of the service.

Article 151. Employment Certification.


Upon the severance of the household service relation, the employer shall give the househelper a written
statement of the nature and duration of the service and his or her efficiency and conduct as househelper.

Article 152. Employment Record.


The employer may keep such records as he may deem necessary to reflect the actual terms and conditions
of employment of his househelper, which the latter shall authenticate by signature or thumbmark upon
request of the employer.

NCC Art. 1695.


House helper shall not be required to work more than ten hours a day. Every house helper shall be
allowed four days' vacation each month, with pay.

NCC Art. 1696.


In case of death of the house helper, the head of the family shall bear the funeral expenses if the house
helper has no relatives in the place where the head of the family lives, with sufficient means therefor.

EMPLOYMENT OF HOMEWORKERS

Article 153. Regulation of Industrial Homeworkers.


The employment of industrial homeworkers and field personnel shall be regulated by the government
through the appropriate regulations issued by the Secretary of Labor and Employment to ensure the
general welfare and protection of homeworkers and field personnel and the industries employing them.

Article 154. Regulations of Secretary of Labor.


The regulations or orders to be issued pursuant to this Chapter shall be designed to assure the minimum
terms and conditions of employment applicable to the industrial homeworkers or field personnel
involved.

Article 155. Distribution of Homework.


For purposes of this Chapter, the employer of homeworkers includes any person, natural or artificial
who, for his account or benefit, or on behalf of any person residing outside the country, directly or
indirectly, or through an employee, agent contractor, sub-contractor or any other person:

(1) Delivers, or causes to be delivered, any goods, articles or materials to be processed or fabricated in or
about a home and thereafter to be returned or to be disposed of or distributed in accordance with his
directions; or

(2) Sells any goods, articles or materials to be processed or fabricated in or about a home and then rebuys
them after such processing or fabrication, either by himself or through some other person.

POST EMPLOYMENT
ART. 278. Coverage.
The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not.

ART. 279. Security of tenure.


In cases of regular employment, the employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.

Kiamco vs NLRC
Security of tenure-the right not to be removed from ones job without valid cause and valid procedure- is
so fundamental it extends to regular (permanent) as well as non-regular (Temporary employment).

Termination of Employment

ART. 280. Regular and casual employment.


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 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.
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.

Comment:
In order for the provisions herein to apply it is assumed that there exist an E&E relationship between the
parties

Four kinds of employment arrangement:


1) Regular
2) Project
3) Seasonal
4) Casual

2 kinds of regular employees:


1) By nature of work
2) By years of service

Requisites in order for regular jobs may be contracted out:


1) It must be done in good faith
2) Justified by exigencies of the business
3) It must not amount to ULP

Project employment:
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.

Principal test in determining whether a project or regular employee


Whether or not the project employees were assigned to carry out a specific or project undertaking, the
duration and scope of which were specified at the time the employees were engaged for that project.

Indicators of a project employee:


1) The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable
2) Such duration, as well as the specific work/service to be performed, is identified in an
employment agreement and is made clear to the employee at the time of hiring
3) The work or service performed by the employee is in connection with the particular project.
Undertaking for which he is engaged
4) The employee while not employed and awaiting engagement, is free to offer his services to any
other employer
5) The termination of his employment in the particular project/undertaking is reported to DOLE
regional office having jurisdiction over the workplace within 30 days following the date of his
separation from work, using the prescribed form on employees terminations, dismissals or
suspensions.
6) An undertaking in the employment contract by the employer to pay completion bonus to the
project employee.

Bona fide project employees are not entitled to separation pay as a result of the termination of their
employment by reason of completion of the project in which they were hired.

Requisites for a project employee to be converted to a regular employee:


1) There is continuous rehiring of project employees even after cessation of a project
2) The task performed by the alleged project employee are vital, necessary and indispensable to the
usual business or trade of the employer

The fact that the employees has been rehired each time a project has been completed over a long span of
time is not controlling but a strong indicator that the project employees have been converted to regular
employees

Seasonal Employment

Comment:

Conditions of seasonal employment:


1) The work performed is seasonal in nature
2) Their employment is for the duration of one season only

Once a seasonal employee is rehired for more than 1 season he becomes a regular seasonal employee and
due to such he has the right to expect re-engagement once the employer requires the rendition of services
again. However during the period where he is not so engaged he is deemed only on a leave of absence
without pay under the principle of no work no pay.

Brent School Inc vs Zamora


Contracts of employment with a fixed term is not proscribed or prohibited by law provided that the same
is entered into by the parties without any force, duress or improper pressure being brought upon the
employee and absent any other circumstance vitiating consent.

Comment:
In situations where the parties freely agree to enter into a contract of employment with a fixed
term the ratione anima of the law is not defeated since what the law seeks to prevent is the abuse
committed by an employer precisely to evade or violate the security of tenure granted to an
employee. In this situation the employees knowingly and voluntary agreed to a pre-defined
termination date of his employment.
However, employees with a contract of employment with a fixed term does not lose their security
of tenure but rather they enjoy the same fully during the duration of their employment contract
and thus they cannot be terminated without just cause otherwise it would constitute illegal
dismissal and render the employer liable for payment of the unexpired portion of his contract.

Finally, when circumstance surrounding the case shows that the real intent behind by the
employer is to evade tenurial security of the employees the same shall be struck down as contrary
to public morals hence void abinitio

Requisites of a valid term employment contract:


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 consent
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter.
3) There should be no circumstances apparent that the period has been imposed to preclude
acquisition of tenurial security by the employee.
4) The stipulations entered into is not contrary to law, morals, good customs, public order and public
policy.

ART. 281. Probationary employment.


Probationary employment shall not exceed six (6) months from the date the employee started working,
unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.

Comment:

If an employee hired allegedly on probationary employment basis was not informed of the standards that
should qualify her as a regular employee, the employee is deemed to have been hired from day one as a
regular employee.

Limitation to termination of probation; regular status after probationary period


1) It must be exercised in accordance with the specific requirements of the contract
2) If a particular time is prescribed, the termination must be within such time and if formal notice
required, then that form must be used
3) The employers dissatisfaction must be real and in good faith, not feigned so as to circumvent the
contract or the law
4) There must be no unlawful discrimination in the dismissal.

Comment:
The probationary period of 6 months is a general rule and a longer period may be justified provided that
the parties freely agree upon it and the nature of the work to be performed by the employee requires a
longer period of probation or there exist a clear company policy to that effect.

The period of probation is subject to waiver in the sense that if the employee has been judged as lacking
in qualifications to be a regular employee prior to the expiration of the probationary period however due
to the gratuitous act of the employer, the parties agreed to extend the probationary period to give the
employee another chance to prove his worth, the additional period for probation even exceeding the 6
month quota shall not be construed to automatically vest the employee with the status of regularity.

The six month period is determined by determining the 180 th day counted from the date of engagement of
the employee.

Requisites of teachers end of probationary status:


1) The teacher is a full time teacher
2) The teacher must have rendered three consecutive years of service
3) The service must have been satisfactory

Exceptions to the 6 month rule on probationary periods


1) Where the work is learnable or apprenticeable, the the probationary employment period shall be
limited to the authorized learnership or apprenticeship period
2) 3 years in case of teachers
3) When parties agree to a longer term by virtue of a company policy or when the same is required
by the nature of the work

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 nature of the work performed is usually necessary or desirable in the usual
business or trade of the employer. Further the law deems that repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the business.

Part time employee regular status?


Ones regularity of employment is not determined by the number of hour one has worked but by the
nature and by the length of time one has been in that particular job.

ART. 282. Termination by employer.


An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) 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 representatives; and
(e) Other causes analogous to the foregoing.

6 just causes for termination by employer


1) Serious misconduct
2) Willful disobedience or insubordination
3) Gross and habitual neglect of duties
4) Fraud or willful breach of trust
5) Commission of a crime or offense
6) Analogous causes

6 Management prerogatives:
A. Discipline
B. Transfer of employees
C. Productivity standard
D. Grant of bonus
E. Change of working hours
F. Rules on Marriage between employees of competitor-employers
G. Post-employment ban

Requirements of a valid transfer


1) It must be done in good faith
2) It must be reasonable to remain valid despite inconvenience caused to the employee
3) There must be no demotion in rank or diminution of his salary, benefits and other privileges

Comment:
Removal under article 282 is called dismissal or discharged if under 283 and 284 it is called separation

Requisites of serious misconduct:


1) It must be serious
2) It must relate to the performance of the employees duties
3) It must show that the employee has become unfit to continue working for the employer

Serious misconduct
1) There must be wrongful intent not a mere error in judgment
2) There is a grave and aggravated character and not merely trivial or unimportant
3) The misconduct is in connection with the employees work
4) A serious of irregularities when put together may constitute serious misconduct.

Immoral behavior to constitute a valid ground for termination must be grossly immoral, that is it must be
so corrupt as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree or
committed under such scandalous or revolting circumstances as to shock the common sense of decency.
Requisites for willful disobedience
1) The assailed conduct must have been willful or intentional, the will-fullness being characterized
by a wrongful and perverse attitude
2) The orders, regulations or instructions of the employer must be
a) Reasonable and lawful
b) Sufficiently known to the employee
c) In connection with the duties which the employee has been engaged to discharged.
3) The disobedience must relate to substantial matters and not merely to trivial or unimportant
matters

Comment:
The SC has decided that there is no law requiring an employee to accept a promotion hence to decline one
is within the rights of an employee and any other obligations (transfer to another location) attached to the
promotion is no longer enforceable.

Transfer vs Promotion
Is a movement from one position to another of equivalent rank, level or salary without break in the
service. Promotion, on the other hand is the advancement from one position to another with an increase in
duties and responsibilities as authorized by law and usually accompanied by an increased in salary.

Comment:
In order for negligence be a ground for dismissal it must not only be gross but habitual amounting to
reckless disregard of the safety of a person or property. The degree of skill, care, diligence and attention
imposed by the implied possession of competency, knowledge or skillfulness or the like is that or ordinary
and reasonable skill unless:
1) Expressly stipulates the need to exercise the highest degree of competency, skill or diligence
2) The employee represented that he has such degree of skill, competency or diligence

However (not sure) if there is a provision in the contract of employment that the employees service shall
be warranted or agreed to give satisfaction, the employer is vested with the power to determine the
question of whether the work is satisfactory; and the reasonableness of the grounds of dissatisfaction
cannot be inquired into by the court in an action by the employee for damages for his discharge.

Elements of abandonment:
1) The failure to report for work or absence without valid or justifiable reason.
2) Clear intention to sever the E&E relationship

The second element is more determinative factor and being manifested by some overt acts. Mere absence
is not sufficient to constitute abandonment, the employer has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any intention of returning.

Comment:
Attitude problem may be a sufficient ground for termination of an employee since it is akin to loss of trust
and confidence, provided however substantial evidence must exist to support the allegation that the
employee has in fact an attitude problem detrimental to the company. It is the employer who carries the
burden of proof in proving such an attitude problem.

Requisites for fraud to constitute a valid ground of termination:


1) It must be committed against the employer or his representative
2) The fraud was done in connection with the employees work.

5 guidelines of loss of confidence:


1) The loss of confidence must not be simulated
2) It should not be used as a subterfuge for causes which are improper, illegal or unjustified
3) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary
4) It must be genuine, not a mere afterthought to justify earlier action taken in bad faith
5) Applies only to employees occupying positions of trusts and confidence or to those situations
where the employee is routinely charged with the care and custody of the employers money or
property.
6) Proof beyond reasonable doubt is not required still substantial evidence is vital and the burden
rests on the employer to establish it.

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 representatives; and

Immediate family members:


1) Spouse
2) Ascendants
3) Descendants
4) Brothers and sisters of the employer
5) Relative by affinity in the same degrees and consanguinity within the 4 th civil degree

Conviction of the offense charged is not required to constitute this ground for dismissal.

Authorized Causes of Termination

ART. 283. Closure of establishment and reduction of personnel.


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, by serving a written notice on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to the installation of labor-saving
devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business 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 one (1) whole year.

Grounds mentioned in article 283:


1) Installation of labor saving devices
2) Redundancy
3) Retrenchment to prevent losses
4) The closing or cessation of operation of the establishment or undertaking, unless the closing is for
the purpose of circumventing the provisions of law

Other authorized causes


1) Total or permanent disability of the an employee
2) Disease not curably within 6 months
3) Valid application of union security clause
4) Expiration of period in term employment
5) Failure in probation
6) Sale amounting to closure of business
7) Relocation of business to a distant place
8) Defiance of return to work order
9) Commission of illegal acts in a strike
10) None-feasible reinstatement
11) Floating status or off detail beyond 6 months
12) Resignation
13) Violation of contractual commitment such as being a consultant to a competitor
14) Retirement
15) Retirement of the employee

ART. 284. Disease as ground for termination. An employer may terminate the services of an employee
who has been found to be suffering from any disease and whose continued employment is prohibited by
law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year
of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole
year.

Comment:

The SC has opined that the decision that retrenchment exist in not a management prerogative but a
question of fact the burden of proving which lies with the employer

5 Basic Requirements of valid retrenchment


1) The retrenchment is necessary to prevent or minimize losses and such losses are proven
2) Written notice is given to the employees and the DOLE at least one month before the intended
date of retrenchment
3) Separation pay is paid
4) The employer exercises its prerogative to retrench employees in good faith for the advancement
of its interest and not to defeat or circumvent the employees right to security of tenure
5) The employer uses fair and reasonable criteria in ascertaining who will be dismissed or retained
among the employees such as status, efficiency, seniority physical fitness age and financial
hardship for certain worker.

Standards to justify future losses as a ground for retrenchment


1) The loses expected should be substantial and merely inconsequential
2) The substantial loss apprehended must be reasonably imminent
3) The retrenchment should be reasonably necessary and likely to effectively prevent the expected
losses. It must be exercised as an remedy of last resort
4) The losses if incurred or is expected imminently shall be proven or supported by substantial
evidence.

Redundancy
Exist 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 where it is superfluous and superfluity of a
position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased
volume of business, or dropping of a particular product line or service activity previously manufactured
or undertaken by the enterprise

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 on the volume of his business.

Comment:
An employer when justified may seek temporary retrenchment however upon the expiration of six months
therefrom the employer needs to either recall the employee or permanently retrench the employees by
following the requirements of the law. Hence the employer, if deciding to undergo permanent
retrenchment must follow the requirements of retrenchment during the 6 month period otherwise they
would be guilty of illegal dismissal.

My comment:
The main distinction between redundancy and retrenchment is that in the latter there is an actual
substantial or imminent danger of a loss whereas in redundancy the fact that the position dismissed is
based on loss of new orders or the like which has not necessarily caused or will cause a loss but instituted
only to improve the business of the employer. The determinative factor is the reason behind the abolition
whether forced by a an imminent or actual substantial loss or the mere loss of purpose of the position.
Comments:
Reduction of workdays if substantial and lasted for more than a period of 6 months would constitute
constructive retrenchment thereby placing the employer liable for separation pay for retrenchment.

Requisites to voluntary cessation of business not due to losses:


1) Written notice to the employees and to the DOLE
2) The cessation or withdrawal from business operations must be bona fide in character
3) Payment of the employees separation pay

Comment:
The general rule is that if the employer closes its business it is required to pay the separation pay of the
employees of salary per year of service or 1 month salary whichever is higher except that in cases
where the closure is due to serious business losses or financial reverses.

Comment:
Closure in order to be under the coverage of article 283 must by voluntary on the part of the employer in
the sense it must not be forced upon it by an act of the government for the benefit of the employee similar
to the instance where by virtue of the CARP law, majority of the estate was subjected to eminent domain
and forced the company to close. In this situation the employees are no longer entitled to separation pay
under article 283, since the closure was not voluntary.

Where employment of the employees is contingent upon the continuing possession of the employer of
the property involved in the business, the expiration of the contract of lease over the said property
constitutes the expiration of the tenure of the employees and not dismissal viewed under article 283.

Petitioner insists that the payment of 30 days salary to respondents in place of notice was sufficient
compliance with the 30-day notice rule. We cannot agree. Nothing in the law gives petitioner the option
to substitute the required prior written notice with payment of 30 days salary. Indeed, a job is more than
the salary it carries. Payment of 30 days salary cannot compensate for the psychological effect or the
stigma of immediately finding ones self laid off from work. It cannot be a fully effective substitute for
the 30 days written notice requirement by law, especially when, as in this case, no notice was given to the
DOLE

Effect of sale in good faith


1) The E&E relationship is deemed terminated
2) The reason for termination is closure or cessation of business
3) Payment of separation pay as required by article 283 comes into effect
4) The successor in interest shall not be bound for the past ULP grievance, if any, unless a contrary
stipulation exist in the contract of sale
5) Nor is the successor in interest be compelled to employ the employees, the most the transferee
can do is to give the employees preference in the hiring unless a contrary stipulation exist in the
contract of sale.
Effect of sale in bad faith
1) The company may be held liable for ULP
2) The doctrine of successor employer may apply

Successor-Employer Doctrine
This doctrine involves a transfer of ownership of the business to a new employer. Where the change of
ownership is in bad faith or is used to defeat the rights of labor, the successor-employer is deemed to have
absorbed the employees and is held liable for the transgressions of his or her predecessor and is liable for
the lawful obligations of the predecessor employers.

Effect of merger if done in good faith (BPI vs BPI employees Union Davao Chapter)
The Supreme Court has decided that the effect of merger done in good faith does not ipso facto create a
an E&E relationship between the surviving corporation and the employee of the absorbed corporation
since:

The rule is that unless expressly assumed, labor contracts such as employment contracts and
collective bargaining agreements are not enforceable against a transferee of an enterprise, labor
contracts being in personam, thus binding only between the parties. A labor contract merely
creates an action in personam and does not create any real right which should be respected by
third parties. This conclusion draws its force from the right of an employer to select his
employees and to decide when to engage them as protected under our Constitution, and the same
can only be restricted by law through the exercise of the police power.

However the rule on non-absorption is subject to the following exceptions:


1) When there is a contrary stipulation in the articles of merger
2) When the merger is done in bad faith as the law pierces the veil of corporate fiction and thereby
declares the surviving corporation as a mere alter ego of the deposed corporation. In this situation
the successor-employer doctrine shall be applied.

Procedure To terminate Employment

Article. 277. Miscellaneous provisions.

XXXX

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

XXXXXXX

Comment:
Lack of valid cause (substantive due process) makes dismissal illegal and invalid, generally entitling the
employee to reinstatement. Lack of proper procedure (procedural due process), on the other hand, does
not invalidate the dismissal which means that employee remains dismissed but the employer becomes
liable for indemnity for violating the employees right to due process. In short what makes a dismissal
invalid or illegal is lack of a valid cause not the nonobservance of procedural due process

Twin notice requirement:


1) Notice must be given by the employer to the employee of the particular acts or omissions for
which his dismissal is sought
2) The subsequent notice which informs the employee of the employers decision to dismiss him.

Standards of Procedural Due Process (IRR)


1) For termination based on just causes:
a. 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
b. A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given the opportunity to respond to the charge,
present his evidence or rebut the evidence presented against him
c. A written notice of termination served on the employee indicating that upon due
consideration of all circumstance, grounds have been established to justify termination.
2) For Termination based on the authorized causes mentioned in article 283, the requirements of due
process is deemed complied with upon the service of written notice to the employee and the
appropriate Regional office of the DOLE at least 30 days before the effectivity of the termination,
specifying the ground/s for termination
3) If the termination is brought about by the completion of the contract or phase thereof, no prior
notice is required. If the termination is brought about by the failure of the employee to meet the
standards of the employer in case of probationary employment, it shall be sufficient that a written
notice is serve the employee within a reasonable time from the effective date of the termination.

Following notice is not sufficient to comply with the requirements of procedural due process:
1) Notice of preventive suspension
The notice must be for the purpose of appraising the employee that termination is sought against
him on the grounds specified in the notice to adequately appraise of the same. Further, interview
without appraising him that he is already being investigated does not comply with the hearing
requirement otherwise known as the right to be heard. Finally hearing made during the
determination of the NLRC does not cure the defect since what the law requires is notice prior to
termination which in the case where the notice is given in NLRC, termination has already been
effected
2) Consultation with the union, insufficient notice
The right to procedural due process is a personal right and may not be exercised by any other
person even the union. Further, being a personal right the same is subject to waiver however such
waiver must be made by the employee himself and not any other party.

Comment:
As a rule, notice and hearing must be made prior to a declaration or decision of termination to the extent
that the requirement of ample opportunity to prepare his defense is deemed not complied with even if the
notice of termination had an effective date of a much later date, even assuming that the interim period is
sufficient for him to prepare his defense, because the fact is the employee has already been dismissed
without the complying with the requirements of procedural due process

Comment:
The SC has ruled that reasonable opportunity should be construed as a period of at least 5 calendar days
from receipt of the notice to give the employee an opportunity to study the accusation against them.

Close shop agreements does not exempt the company from following the requirements of procedural due
process

Hearing is not required when the employee has categorically admitted his guilt. If the employee merely
narrated what he did without admitting his guilt, then conducting a hearing is required; otherwise , there is
a failure of procedural due process.

The notice requirement requires that the notice be given individually to employees whose employment is
sought to be terminated and a group notice is not sufficient to comply with this requirement since the law
is specifically requires that notice be given to him in writing 30 days before the intended dismissal
2 instances where hearing is not required:
1) When the employee categorically admits his guilt
2) Where the termination is based upon authorized causes since the employer is not alleging any
malfeasance or nonfeasance on the part of the employee.

Comment:
Notice requirement under article 283 is deemed complied with when voluntary arbitration has been
availed of by the parties or of the employer.

Substantial evidence
Is the quantum of evidence requiring that there is more than a mere scintilla supporting the allegation. It
means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

Comment:
Condonation/pardon or waiver of a misconduct by the employer of his employees, precludes himself from
subsequently asserting the right to discharge them for cause. Retention of an employee after the actual
discovery of the misconduct on his part, in some instance warrant the inference that the act has been
condoned, so as to be no longer available as a ground for dismissal. However if there has been a repetition
of the offense, the employer has a right to take the entire record into account, the condoning of the
employees misconduct being deemed to have been conditioned upon future good conduct.

IRR Rule XIV SECTION 3. Preventive suspension.


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 of his co-workers.

SECTION 4. Period of suspension.


No preventive suspension shall last longer than 30 days. The employer shall thereafter reinstate the
worker in his former or in a substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and other benefits due to the
worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to dismiss the worker.

Comment:
However with respect to project and non project employees employed in the construction industry the
preventive suspension period shall not exceed 15 day otherwise the employee will be entitled to payment
of wages and shall not be bound to reimburse what he receives even after the employer has decided to
terminate his services.

Constructive Dismissal
Does not always involve forthright dismissal or diminution in rank, compensation, benefit and
privileges.14 There may be constructive dismissal if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any
choice by him except to forego his continued employment.

IRR RULE XIV


Termination of Employment
SECTION 1. Security of tenure and due process.
No workers shall be dismissed except for a just or authorized cause provided by law and after due
process.

SECTION 2. Notice of dismissal.


Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts
or omission constituting the grounds for his dismissal. In cases of abandonment of work, the notice shall
be served at the workers last known address.

SECTION 3. Preventive suspension.


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 of his co-workers.

SECTION 4. Period of suspension.


No preventive suspension shall last longer than 30 days. The employer shall thereafter reinstate the
worker in his former or in a substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and other benefits due to the
worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to dismiss the worker.

SECTION 5. Answer and hearing.


The worker may answer the allegations stated against him in the notice of dismissal within a reasonable
period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard
and to defend himself with the assistance of his representative, if he so desires.

SECTION 6. Decision to dismiss.


The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the
reasons therefor.

SECTION 7. Right to contest dismissal.


Any decision taken by the employer shall be without prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a complaint with the Regional Branch of the Commission.

SECTION 8. Period to decide.


Cases involving the dismissal of a worker shall be decided by the Labor Arbiter within 20 working days
from the date of submission of such cases for decision.

SECTION 9. Reinstatement pending hearing.


The Secretary may suspend the effects of the termination pending resolution of the case in the event of a
prima facie finding that the termination may cause a serious labor dispute or is in implementation of a
mass lay-off.
SECTION 10. Certification of employment.
A dismissed worker shall be entitled to receive, on request, a certificate from the employer specifying the
dates of his engagement and termination of his employment and the type or types of work on which he is
employed.

Appropriate penalty
It would imply at the very least that where a penalty less punitive would suffice, whatever missteps may
be committed by labor ought not to be visited with a consequence so severe. It is not only because of the
laws concern for the workingman. There is, in addition, his family to consider. Unemployment brings
untold hardships and sorrows on those dependent on the wage-earner. The misery and pain attendant on
the loss of jobs then could be avoided if there be acceptance of the view that under all the circumstances
of this case, petitioners should not be deprived of their means of livelihood. Nor is this to condone what
had been done by them. For all this to condone what had been done by them. For all this while, since
private respondent considered them separated from the service, they had not been paid. For the strictly
juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work, Discretionary
Justice, that where a decision may be made to rest on informed judgment rather than rigid rules, all the
equities of the case must be accorded their due weight. Finally, labor law determinations, to quote from
Bultmann, should be not only secundum rationem but also secundum caritatem.

Comment:
Past offenses may be compiled and become a basis of a valid dismissal provided that the present and past
offense are related to one another, in other words, it may be used if it has a bearing to the proximate
offense warranting dismissal.

Effects of lack of substantive or procedural due process (AGABON vs. NLRC)

Standards of due process: requirements of notice. In all cases of termination of


employment, the following standards of due process shall be substantially observed:

(2) For termination of employment based on just causes


as defined in Article 282 of the Code:

(3) 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;

(4) 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
(5) 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.

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 employee
is entitled to reinstatement without loss of seniority rights and other privileges and full ackwages,
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.

Comment:
The above Agabon case was further revised by Jaka and later by Industrial Timber case where the court
has ruled in Jaka that if the cause of termination was due to an authorized cause, since the termination
was due to the employers exercise of management prerogative a higher penalty should be given.
However in the Industrial Timber case the Court has provided guidelines in determining the amount of
indemnity to be provided, namely:
1) The authorized cause invoked, whether it was a retrenchment or a closure or cessation of
operation of establishment due to serious business losses or financial reverses or otherwise
2) The number of employees to be awarded
3) The capacity of the employer to satisfy the awards, taking into account their prevailing financial
status as borne by the records
4) Employers grant of termination benefits in favor of the employees
5) Whether there was a bona fide attempt to comply with the notice requirements

Consequences of termination
ART. 279. Security of tenure.
In cases of regular employment, the employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full ackwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.

5 possible effects of termination


1) Separation pay
2) Backwages
3) Reinstatement
4) Damages
5) Attorneys fees

4 ways separation pay may be viewed


1) Separation pay as employers statutory obligation in cases of legal termination due to authorized
causes (article 283 284)
2) Separation pay as financial assistance, as an act of social justice, even in cases of legal dismissal
under article 282
3) Separation pay in lieu of reinstatement in illegal dismissl case where the employee is ordered
reinstatement but reinstatement is not feasible
4) Separation pay as an employment benefit granted in CBA or company policy.

2 amounts of separation pay for authorized causes:


1) 1 month salary or one month salary multiplied by the number of years of service, whichever is
higher, a fraction of at least 6 months is counted as one year for:
a. Redundancy
b. Installation of labor saving devises
2) 1 month salary or month salary for every year of services, a fraction of atleast 6 months is
deemed as a year for:
a. Retrenchment
b. Closure or cessation of business NOT due to severe losses
c. Separation due to disease
Comment:
In computing the statutory separation pay allowances (Transportation, ECOLA and the like) should be
included however commissions should not be included since commissions must be earned by actual
market transactions attributable to the employee.

Comment:
Separation pay given as financial assistance in cases of a valid dismissal due to just causes is justified
only on situations where the grounds of termination is not of serious misconduct or those reflecting the
moral character of the employee.

Backwages
Presupposes illegal termination. It is the restitution of earnings unduly withheld from the employee
because of illegal termination. Hence there is no illegal termination there is no basis for claiming or
awarding of Backwages. However in exceptional cases where there was evident good faith on the part of
the employer the Supreme Court has in several instances did not impose the payment of Backwages
despite a finding of illegal termination

Comment:
Backwages is a substantive right granted by article 279 of the LC as such the mere failure to claim
Backwages is considered by the court as a mere procedural lapse and would not justify the refusal to
award the same when warranted.

Comment:
The fact that the lower court failed to award Backwages when it is warranted, despite the fact of the
employees failure to appeal the same, does not preclude a higher court in granting the same specially
noting that justice requires a full resolution of the controversy and not a piecemeal justice.

Computation of Backwages
1) Salary rate of the employee at the time of his dismissal
2) Allowances granted to the employees
3) 13 month pay and other benefits or their cash value
4) Wage increase should not be considered.

What is evident is that salary increases are a mere expectancy. They are, by its nature volatile and are
dependent on numerous variables, including the companys fiscal situation and even the employees
future performance on the job, or the employees continued stay in a position subject to management
prerogative to transfer him to another position where his services are needed. In short, there is no vested
right to salary increases. That respondent Sadac may have received salary increases in the past only
proves fact of receipt but does not establish a degree of assuredness that is inherent in backwages. From
the foregoing, the plain conclusion is that respondent Sadacs computation of his full backwages which
includes his prospective salary increases cannot be permitted.

Comment:
Note that however the decision of the SC against including salary increase is based on the fact that there
is no vested right in salary increase since it is volatile and subject to several factors which cannot be
determined at the time of awarding. What if there is a law or contract stipulation whether in the
employment contract or in the CBA granting annual salary increase, would it now be included in the
computation of Backwages, it being not volatile anymore? I vote in the affirmative

Dates concerning Backwages


1) It starts when the salary was withheld by the employer or upon his illegal dismissal whichever is
sooner, save cases where the the salary withheld constitutes unpaid salary.
2) Until the employee is actually reinstated.
3) When reinstatement in not feasible, until the decision of the court becomes final.
Prescriptive period for filing a case for illegal dismissal is 4 years from the time of illegal dismissal
(article 1146 of the NCC)

Years affecting Backwages (date of the effectivity of 6715)


1) If the illegal dismissal occurred before 21 March 1989, the mercury drug rule (3 years only)
2) If the illegal dismissal occurred on or after 21 march 1989, the full Backwages is applicable
3) Backwages are only limited to retirement age only plus retirement benefits

Comments:
1) Payment of Backwages continue to accrue until reinstatement is made
2) Reinstatement is immediately executory even while the case is pending however the employer is
granted the option to include the employee in the payroll only thus entitling the employee to
receive his salary and the benefits previously received by her.
3) Refusal to comply with an order by the LA to reinstate the employee, the LA shall thereafter issue
a writ of execution, If the writ is also refused the employer shall be liable for contempt
4) No reimbursement rule, grants the employee the right not to reimburse paid salaries he has
received when reinstatement was granted by a lower tribunal but only to be reversed by a higher
court. The reasoning for the same is a substantive right provided for by article 223:

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein.

5) Reinstatement is self executory if the LA has awarded the same since to declare otherwise would
defeat the purpose and the language of article 223 however reinstatement ordered by the NLRC is
not self executory under the following reasons:
a. A similar provision granting immediate execution of an order for reinstatement by the
NLRC is lacking
b. Under paragraph 6 of article 223 states that the orders of the NLRC shall become final
and executory only after the expiration of 10 days from the receipt of the judgment
c. Under article 224 (a) it was provided that a writ of execution may be issued from the date
the decision has become final.
6) Strained relationship as an exception to reinstatement is a question of fact which must be adduced
and proved by substantial evidence however if the employee fails to include a prayer for
reinstatement he shall be entitled to receive separation pay instead.
7) Moral damages may be granted by the court in case of illegal dismissal as based in article 220 of
the NCC provided that the act of the employer was attended by bad faith or fraud.
8) Exemplary damages may only be awarded in case the dismissal was effected in a wanton,
oppressive or malevonent manner.

Requisites of a valid quitclaim:


(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties;
(3) the consideration of the quitclaim is credible and reasonable; and
(4) the contract is not contrary to law, public order, public policy, morals or good customs, or
prejudicial to a third person with a right recognized by law

ART. 285. Termination by employee.


(a) An employee may terminate without just cause the employee-employer relationship by serving a
written notice on the employer at least one (1) month in advance. The employer upon whom no
such notice was served may hold the employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer for
any of the following just causes:

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 his family; and
4. Other causes analogous to any of the foregoing

Comment:
Resignation is susceptible to withdrawal by the employee provided that the employer has consented to the
withdrawal

As a general rule, a resigned employee is not entitled to resignation pay save that of the following
instances:
1) There is a contrary stipulation in the contract of employment
2) An existing provision in the CBA
3) When resignation pay is a corporate practice or policy

ART. 286. When employment not deemed terminated.


The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (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 one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.

Comment:
In order for an employee to be placed in floating status off-detail there has to be a dire exigency of the
employers bona fide suspension of operation

RETIREMENT FROM THE SERVICE


ART. 287. Retirement.
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 and other agreements
shall not be less than those provided therein.

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 one-half
(1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one
whole year.

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13 th month pay and the cash equivalent of not more than five (5)
days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than ten (10) employees
or workers are exempted from the coverage of this provision.

Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article
288 of this Code.

Comment:
Condition for entitlement to retirement pay is not continuing. Once a person is entitled and has begun
receiving the same, the conditions required of him to be entitled to the same is no longer material since
the so long that the employee was eligible for retirement at the time he retired the lack thereof does not
affect his right to receive it.

If there is an option to exercise optional retirement is exclusively vested with the employee and the
employer cannot force him to avail of the same. However when there is a valid agreement in place vesting
the option to retire to the employer under the CBA or employment contract thereby become a
management prerogative, and the employer exercises this prerogative, the same is not considered as
illegal dismissal nor union busting. This prerogative and/ or the lowering of retirement age must be
assented to by the employee otherwise the management cannot force the employee to retire save that
instance where the same stipulation is found in the CBA.

Union busting requisites


1. There must be a dismissal from employment of union officers who are duly elected in accordance
with the union constitution and by-laws;
2. The existence of the union must be threatened by such dismissal.

Note:
The cooling off period is not applicable to the situations of union busting. However the following are still
applicable:
1. Strike vote
2. Notice of strike
3. Submission of strike vote report.
4. 7-day period.

Requisites or conditions in order for RA 7641 can be given retroactive effect:


1) The claimant was still an employee of the employer at the time the statue took effect (07 Jan
1993)
2) The claimant was in compliance with the requirements for eligibility under the statue for such
retirement benefits.

The retirement benefits under article 287 is apart from the retirement benefits granted under the SSS law.

Employees Compensation and State Fund

General purpose of the Workmens compensation


1) To improve status of the workers
2) To obviate the uncertainties, delay, expense and hardship attendant upon the enforcement of court
remedies
3) To transfer from the worker to the industry in which he is employed, and ultimately to the
consuming public, a greater proportion of the economic loss due to industrial accidents and
injuries
4) To improve relations between employers and employees by avoiding or reducing the friction
incident to litigation
5) To provide, not only for employees a remedy which is both expeditious and independent of proof
of fault, but also for employers a liability which is limited and determinate.

Comment:
Source of fund of the SID (State Insurance Fund) is the requirement that all employers remit to a common
fund a monthly contribution equivalent to one% of the monthly salary credit of every covered worker.
The employee pays no contribution to the fund, any agreement to the contrary is prohibited.

Benefits covered by the ECC


1) Medical benefits (Medical supplies and services)
2) Cash income if the employee is unable to earn because of the injury or disease
3) Death benefits
4) Funeral benefits

Requisites in order for death or illness to be compensable under the SIF:


1) Any illness definitely accepted as an occupational disease listed by the commission
2) Any illness caused by employment subject to proof that the risk of contracting the same is
increased by working conditions

Comment:
Presumptive compensability (presumption that the death or injury is because of the nature of his work) in
a limited sense has been restored in favor of the AFP provided that:
1) The worker suffered a contingency
2) That his injury or death are clearly established through duly issued medical certifications on his
injury or death by the attending physician or duly authorized representatives of the hospital where
he is brought for medical treatment.

ART. 167. Definition of terms.


As used in this Title, unless the context indicates otherwise:

(a) "Code" means the Labor Code of the Philippines instituted under Presidential Decree Numbered four
hundred forty-two, as amended.

(b) "Commission" means the Employees Compensation Commission created under this Title.

(c) "SSS" means the Social Security System created under Republic Act Numbered Eleven hundred sixty-
one, as amended.

(d) "GSIS" means the Government Service Insurance System created under Commonwealth Act
Numbered One hundred eighty-six, as amended.

(e) "System" means the SSS or GSIS, as the case may be.

(f) "Employer" means any person, natural or juridical, employing the services of the employee.

(g) "Employee" means any person compulsorily covered by the GSIS under Commonwealth Act
Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the
Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any
person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as
amended.

(h) "Person" means any individual, partnership, firm, association, trust, corporation or legal representative
thereof.

(i) "Dependent" means the legitimate, legitimated or legally adopted or acknowledged natural child who
is unmarried, not gainfully employed, and not over twenty-one (21) years of age or over twenty-one (21)
years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect
which is congenital or acquired during minority; the legitimate spouse living with the employee and the
parents of said employee wholly dependent upon him for regular support. chanroblesvirtuallawlibrary

(j) "Beneficiaries" means the dependent spouse until he/she remarries and dependent children, who are
the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed
on dependent children, the illegitimate children and legitimate descendants, who are the secondary
beneficiaries: Provided, That the dependent acknowledged natural child shall be considered as a primary
beneficiary when there are no other dependent children who are qualified and eligible for monthly income
benefit.

(k) "Injury" means any harmful change in the human organism from any accident arising out of and in the
course of the employment.

(l) "Sickness" means any illness definitely accepted as an occupational disease listed by the Commission,
or any illness caused by employment subject to proof that the risk of contracting the same is increased by
working conditions. For this purpose, the Commission is empowered to determine and approve
occupational diseases and work-related illnesses that may be considered compensable based on peculiar
hazards of employment.

(m) "Death" means loss of life resulting from injury or sickness.

(n) "Disability" means loss or impairment of a physical or mental function resulting from injury or
sickness.

(o) "Compensation" means all payments made under this Title for income benefits and medical or related
benefits.

(p) "Income benefit" means all payments made under this Title to the providers of medical care,
rehabilitation services and hospital care.

(q) "Medical benefit" means all payments made under this Title to the providers of medical care,
rehabilitation services and hospital care.

(r) "Related benefit" means all payments made under this Title for appliances and supplies.
(s) "Appliances" means crutches, artificial aids and other similar devices.

(t) "Supplies" means medicine and other medical, dental or surgical items.

(u) "Hospital" means any medical facility, government or private, authorized by law, an active member in
good standing of the Philippine Hospital Association and accredited by the Commission.

(v) "Physician" means any doctor of medicine duly licensed to practice in the Philippines, an active
member in good standing of the Philippine Medical Association and accredited by the Commission.

(w) "Wages" or "Salary", insofar as they refer to the computation of benefits defined in Republic Act No.
1161, as amended, for SSS and Presidential Decree No. 1146, as amended, for GSIS, respectively, except
that part in excess of Three Thousand Pesos.

(x) "Monthly salary credit" means the wage or salary base for contributions as provided in Republic Act
Numbered Eleven hundred sixty-one, as amended, or the wages or salary.

(y) "Average monthly salary credit" in the case of the SSS means the result obtained by dividing the sum
of the monthly salary credits in the sixty-month period immediately following the semester of death or
permanent disability by sixty (60), except where the month of death or permanent disability falls within
eighteen (18) calendar months from the month of coverage, in which case, it is the result obtained by
dividing the sum of all monthly salary credits paid prior to the month of contingency by the total number
of calendar months of coverage in the same period.

(z) "Average daily salary credit" in the case of the SSS means the result obtained by dividing the sum of
the six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester
of sickness or injury by one hundred eighty (180), except where the month of injury falls within twelve
(12) calendar months from the first month of coverage, in which case it is the result obtained by dividing
the sum of all monthly salary credits by thirty (30) times the number of calendar months of coverage in
the period.

In the case of the GSIS, the average daily salary credit shall be the actual daily salary or wage, or the
monthly salary or wage divided by the actual number of working days of the month of contingency.

(aa) "Quarter" means a period of three (3) consecutive months ending on the last days of March, June,
September and December.

(bb) "Semester" means a period of two consecutive quarters ending in the quarter of death, permanent
disability, injury or sickness.

(cc) "Replacement ratio" - The sum of twenty percent and the quotient obtained by dividing three hundred
by the sum of three hundred forty and the average monthly salary credit.
(dd) "Credited years of service" - For a member covered prior to January, 1975, nineteen hundred
seventy-five minus the calendar year of coverage, plus the number of calendar years in which six or more
contributions have been paid from January, 1975 up to the calendar year containing the semester prior to
the contingency. For a member covered on or after January, 1975, the number of calendar years in which
six or more contributions have been paid from the year of coverage up to the calendar year containing the
semester prior to the contingency.

(ee) "Monthly income benefit" means the amount equivalent to one hundred fifteen percent of the sum of
the average monthly salary credit multiplied by the replacement ratio, and one and a half percent of the
average monthly salary credit for each credited year of service in excess of ten years: Provided, That the
monthly income benefit shall in no case be less than two hundred fifty pesos.

Comment:
What the law compensates is not the injury, sickness, disease or death but the loss of earning capacity.

Requisites for injury to be compensable:


1) The employee must have been injured at the place where his work requires him to be
2) The employee must have been performing his official functions
3) If the injury is sustained elsewhere, the employee must have been executing an order for the
employer

24 hour doctrine
This doctrine presupposes that the AFP PNP or fireman claimant is performing his official functions
regardless while he is in active duty even if he is not found in the place or work provided that when the
accident occurred the work connection requisite is present or at least a prior directive or permission given
by a superior even if the act performed although not in official line of duty, are nonetheless, basically
police service in character.

Resolution No. 3914-A (extention of the proximity rule) extending the compensable coverage of off-
premises injury

An injury or death of a covered member in an accident while he is going to, or coming from work, the
workplace, shall henceforth be duly considered compensable provided the following conditions are
established:
1) The act of the employee of going to, or coming from work must have been a continuing act, that
is, he had not been diverted therefrom by any other activity, and he had not departed from his
usual route to, or from, his workplace
2) An employee on an special errand, the special errand must have been official and in connection
with his work

Direct premises rule


The accident should have occurred at the place of work. This rule is subject to several exceptions

Exceptions to the Direct Premises Rule:


1) The coming and going rule
2) Proximity rule
In order for proximity rule may be applied it must be first be shown thats there is a casual
connection between the employment and the hazard which resulted in the injury.
3) Incidents of employment
a. Acts of ministration
Are those done by a person for the purpose of satisfying a call of nature (urinating,
drinking)
b. Acts for the benefit of the employer
c. Acts done to further the goodwill of the business
d. Slight deviations from work, from curiosity or otherwise
e. Acts in emergencies
4) Extra Premises Rule (Shuttle Bus Rule)
If the company provides the means of transportation in going to and coming from the place of
work is liable for the injury sustained by the employees while on board the means of
transportation since it is considered an extension employers premises
5) Special errand rule
6) While living, boarding or lodging on the premises of the employer or at the work place.
Exceptions:
a. Where the residence of the employee on the employers premises is merely permissive
and not required.
b. Where the injury results from a risk or danger which is not reasonably incidental to the
employment
7) While travelling provided that the injury results from a risk which falls within any of the
following circumstances:
a. Inherent in the nature of the employment
b. Which is reasonably related to the employment
c. Which the employee is specially exposed to
d. Upon whether the employee, at the time of the occurrence of the accident was engaged in
the exercise of some functions or duties reasonably necessary or incidental to the
performance of the contract of employment or if actively engaged, whether he was at a
place where he was authorized or required by such contract to be.
8) Dual purpose doctrine
Allows compensation to an injury incurred while he was performing both a service for the
employer with his own going or coming trip provided that the service if not combined would
require the employee to make a special trip thereto
9) Employer sponsored activity provided that the activity was fostered and encouraged by the
employer to the end of efficiency of their service.
10) Acts of god or force majuere provided that one in the course of his employment is reasonably
required to be at a particular place at a particular time and there meets an accident, irrespective of
the fact that any other person then and there present would have met regardless of his
employment
11)

Comment:

Limitation of compensation for work at home


The injury occurred while the employee was performing the work at home voluntarily for his own
convenience or benefit and not requested by the employer, the said injury was not an injury arising out of
and in the course of employment.

Assault
An assault although resulting from a deliberate act of the slayer, is considered an accident within the
meaning of the workmens compensation act, since the word accident is intended to indicate that the act
causing the injury shall be casual or unforeseen, an act for which the injured party is not legall
responsible.

increased risk
There are employments which increase the risk of assault on the person of the employee and it is that
sense that an injury or harm sustained by the assaulted worker arises out of the employment, because the
increased risk to assault supplies the link or connection between the injury and the employment

Jobs where increased risk is assumed:


1) Jobs related to kepping the peace or guarding the property
2) Jobs related to keeping or carrying property which subject the employee to the risk of assault
because of the increased temptation to robbery
3) Jobs which exposes the employee to direct contact with lawless and irresponsible members of the
community, like that of a bartender
4) Work as a bus driver, taxi driver or street car conductor.

Comment:
The fact that the injury resulted or was accompanied the resulting injury does not ipso facto remove the
injury from compensability, the circumstance surrounding the injury must be considered in determining
whether the injury arose out of or in the course of employment. However when the injury resulted from
intoxication, willful intention to injure or kill himself or another, notorious negligence renders the injury
not compensable

Sickness
Any illness definitely accepted as an occupational occupational disease listed by the commission, or any
illness caused by employment subject to proof by the employee that the risk of contracting the same is
increased by working conditions.

Occupational Disease
Is one which develops as a result of hazards peculiar to certain occupations, due to toxic substances,
repeated mechanical injury, emotional strain due to the usual exposure of the employee to this adverse
working conditions in course of his employment.

Theory of increased risk


The claimant must show proof of reasonable work-connection, not necessarily direct causal relation
supported by substantial evidence.

IE:
Janitor in a clinic

Coverage and Liability

ART. 168. Compulsory coverage.


Coverage in the State Insurance Fund shall be compulsory upon all employers and their employees not
over sixty (60) years of age: Provided, That 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. 169. Foreign employment.


The Commission shall ensure adequate coverage of Filipino employees employed abroad, subject to
regulations as it may prescribe.

ART. 170. Effective date of coverage


Compulsory coverage of the employer during the effectivity of this Title shall take effect on the first day
of his operation, and that of the employee, on the date of his employment.

ART. 171. Registration.


Each employer and his employees shall register with the System in accordance with its regulations.

ART. 172. Limitation of liability.


The State Insurance Fund shall be liable for compensation to the employee or his dependents, except
when the disability or death was occasioned by the employees intoxication, willful intention to injure or
kill himself or another, notorious negligence, or otherwise provided under this Title.

Notorious negligence
Is something more than simple or contributory negligence. It signifies a deliberate act of the employee to
disregard his own personal safety , disobedience to the rules does not in itself constitute notorious
negligence, if no intention can be attributed to the injured to end his life.
ART. 173. Extent of liability.
Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and
in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents. The payment of compensation
under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised
Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as amended, Republic Act
Numbered Forty-eight hundred sixty-four as amended, and other laws whose benefits are administered by
the System or by other agencies of the government. (As amended by Presidential Decree No. 1921).

Comment:
The SC has ruled that the remedy provided in the WCC is an alternative remedy, meaning the claimant
may claim recovery of damages in the normal courts by virtue of the civil code or under the provision in
the WCC. Upon choosing the remedy and being paid thereby the employee is deemed precluded from
recovering under the other remedy as supported by the sense of fair play and unjust enrichment. However
simultaneous recovery under the WCC and the SSS/GSIS is allowed since PD 1921 (1984) has effectively
rendered section 15 of the SSS law repealed.

ART. 174. Liability of third party/ies.


(a) When the disability or death is caused by circumstances creating a legal liability against a third party,
the disabled employee or the dependents, in case of his death, shall be paid by the System under this
Title. In case benefit is paid under this Title, the System shall be subrogated to the rights of the
disabled employee or the dependents, in case of his death, in accordance with the general law.

(b) Where the System recovers from such third party damages in excess of those paid or allowed under
this Title, such excess shall be delivered to the disabled employee or other persons entitled thereto,
after deducting the cost of proceedings and expenses of the System.

ART. 175. Deprivation of the benefits.


Except as otherwise provided under this Title, no contract, regulation or device whatsoever shall operate
to deprive the employee or his dependents of any part of the income benefits and medical or related
services granted under this Title. Existing medical services being provided by the employer shall be
maintained and continued to be enjoyed by their employees.

Social Security Law

Definition of terms:
(c) Employer- Any 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: Provided, That a self-employed person shall be both employee and employer at the
same time.

(d) Employee - Any person who performs services for an employer in which either or both mental or
physical efforts are used and who receives compensation for such services, where there is an
employer-employee relationship: Provided, That a self-employed person shall be both employee and
employer at the same time.

(e) Dependents - The dependents shall be the following:

(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 twenty-one (21) years of age, or if over twenty-one (21)
years of age, he is congenitally or while still a minor has been permanently incapacitated and
incapable of self-support, physically or mentally; and

(3) The parent who is receiving regular support from the member.

(l) Employment - Any service performed by an employee for his employer except:

(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 employ of a foreign government or international organization, or their
wholly-owned instrumentality: Provided, however, That this exemption notwithstanding, any
foreign government, international organization or their wholly-owned instrumentality employing
workers in the Philippines or employing Filipinos outside of 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: Provided, further, That
the terms of such agreement shall conform with the provisions of this Act on coverage and
amount of payment of contributions and benefits: Provided, finally, That the provisions of this
Act shall be supplementary to any such agreement; and

(5) Such other services performed by temporary and other employees which may be excluded by
regulation of the Commission. Employees of bona fide independent contractors shall not be
deemed employees of the employer engaging the service of said contractors.
(m) Beneficiaries - 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:
Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share
of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the
dependent legitimate, legitimated children of the member, his/her dependent illegitimate children
shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent
parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing,
any other person designated by the member as his/her secondary beneficiary.

(n) Contingency - The retirement, death, disability, injury or sickness and maternity of the member.

SEC. 9. Coverage.
(a) Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age and
their employers: Provided, That in the case of domestic helpers, their monthly income shall not be
less than One thousand pesos (P1,000.00) a month:
Provided, further, That any benefit already earned by the employees under private benefit plans
existing at the time of the approval of this Act shall not be discontinued, reduced or otherwise
impaired:
Provided, further, That private plans 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 employer's
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 employer's total contribution to his benefit plan
and to the SSS shall be the same as his contribution to his private benefit plan before the
compulsory coverage:
Provided, further, That 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 contributions thereto as a result of the integration, shall be subject to
agreements between the employers and employees concerned:
Provided, further, That the private benefit plan which the employer shall continue for his
employees shall remain under the employer's management and control unless there is an existing
agreement to the contrary:
Provided, finally, That 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.

(b) 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.

(c) Filipinos recruited by foreign-based employers for employment abroad may be covered by the SSS on
a voluntary basis.

SEC. 9-A. Compulsory Coverage of the Self-Employed.


Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by
the Commission under such rules and regulations as it may prescribe, including but not limited to the
following:
1. All self-employed professionals;
2. Partners and single proprietors of businesses;
3. 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;
4. Professional athletes, coaches, trainers and jockeys; and
5. Individual farmers and fishermen.

Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be
applicable to the covered self-employed persons.

SEC. 11. Effect of Separation from Employment.


When an employee under compulsory coverage is separated from employment, his employer's
contribution on his account and his obligation to pay contributions arising from that employment shall
cease at the end of the month of separation, but said employee shall be credited with all contributions paid
on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to
pay the total contributions to maintain his right to full benefit.

SEC. 11-A. Effect of Interruption of Business or Professional Income.


If the self-employed realizes no income in any given month, he shall not be required to pay contributions
for that month. He may, however, be allowed to continue paying contributions under the same rules and
regulations applicable to a separated employee member: Provided, That no retroactive payment of
contributions shall be allowed other than as prescribed under Section Twenty-two-A hereof.

SEC. 12. Monthly Pension.


(a) The monthly pension shall be the highest of the following amounts:

(1) The sum of the following:

i. Three hundred pesos (P300.00; plus

(ii) Twenty percent (20%) of the average monthly salary credit; plus

(iii) Two percent (2%) of the average monthly salary credit for each credited year of service
in excess of ten (10) years; or

(2) Forth percent (40%) of the average monthly salary credit; or

(3) One thousand pesos (P1,000.00): Provided, That the monthly pension shall in no case be paid for
an aggregate amount of less than sixty (60) months.
(b) Notwithstanding the preceding paragraph, the minimum pension shall be One thousand two hundred
pesos (P1,200.00) for members with at least ten (10) credited years of service and Two thousand four
hundred pesos (P2,400.00) for those with twenty (20) credited years of service.

SEC. 12-A. Dependents' Pension.


Where monthly pension is payable on account of death, permanent total disability or retirement,
dependents' pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos
(P250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the
date of the contingency but not exceeding five (5), beginning with the youngest and without substitution:
Provided, That where there are legitimate or illegitimate children, the former shall be preferred.

SEC. 12-B. Retirement Benefits.


(a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the
semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated
from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65)
years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the
option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential
rate of interest to be determined by the SSS.

(b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension
benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total
contributions paid by him and on his behalf: Provided, That he is separated from employment and is
not continuing payment of contributions to the SSS on his own.

(c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment
of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section
Eighteen and his employer to Section Nineteen of this Act.

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall
be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he
dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall
be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the
balance of the five-year guaranteed period, excluding the dependents' pension.

(e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of
either: (1) the monthly pension computed at the earliest time he could have retired had he been
separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the
monthly pension computed at the time when he actually retires.

SEC. 13. Death Benefits.


Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the
semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he
has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit
equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36)
monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit
equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve
(12) times the monthly pension, whichever is higher.

SEC. 13-A. Permanent Disability Benefits.


(a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly
contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided,
That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump
sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS
or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump
sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the
date of his disability shall again be subject to compulsory coverage and shall be considered a new
member.

(b) The monthly pension and dependents' pension shall be suspended upon the reemployment or
resumption of self-employment or the recovery of the disabled member from his permanent total
disability or his failure to present himself for examination at least once a year upon notice by the SSS.

(c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of
disability shall be entitled to receive the monthly pension: Provided, That if he has no primary
beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions
corresponding to the balance of the five-year guaranteed period excluding the dependents' pension.

EC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve thousand pesos (P12,000.00) 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.

"SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly contributions in the
twelve-month period immediately preceding the semester of sickness or injury and is confined therefor
for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of
compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is
unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average
daily salary credit, subject to the following conditions:

"(1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one
(1) calendar year, nor shall any unused portion of the one hundred twenty (120) days of sickness benefit
granted under this section be carried forward and added to the total number of compensable days
allowable in the subsequent year;

"(2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of
the same confinement; and
"(3) The employee member shall notify his employer of the fact of his sickness or injury within five (5)
calendar days after the start of his confinement unless such confinement is in a hospital or the employee
became sick or was injured while working or within the premises of the employer in which case,
notification to the employer is necessary: Provided, That if the member is unemployed or self-employed,
he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof
unless such confinement is in a hospital in which case notification is also not necessary: Provided, further,
That in cases where notification is necessary, the confinement shall be deemed to have started not earlier
than the fifth day immediately preceding the date of notification.

"(b) The compensable confinement shall begin on the first day of sickness, and the payment of such
allowances shall be promptly made by the employer every regular payday or on the fifteenth and last day
of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are
due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full
pay to the credit of the employee member shall have been exhausted.

"(c) One hundred percent (100%) of the daily benefits Provided in the preceding paragraph shall be
reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality
thereof: Provided, That the employer has notified the SSS of the confinement within five (5) calendar
days after receipt of the notification from the employee member: Provided, further, That if the notification
to the SSS is made by the employer beyond five (5) calendar days after receipt of the notification from the
employee member, said employer shall be reimbursed only for each day of confinement starting from the
tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the
SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-
year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS,
except confinement in a hospital in which case the claim for benefit or reimbursement must be filed
within one (1) year from the last day of confinement.

"(d) Where the employee member has given the required notification but the employer fails to notify the
SSS of the confinement or to file the claim for reimbursement within the period prescribed in this section
resulting in the reduction of the benefit or denial of the claim, such employer shall have no right to
recover the corresponding daily allowance he advanced to the employee member as required in this
section.

"(e)The claim of reimbursement shall be adjudicated by the SSS within a period of two (2) months from
receipt thereof: Provided, That should no payment be received by the employer within one (1) month after
the period prescribed herein for adjudication, the reimbursement shall thereafter earn simple interest of
one percent (1%) per month until paid.

"(f) The provisions regarding the notification required of the member and the employer as well as the
period within which the claim for benefit or reimbursement may be filed shall apply to all claims filed
with the SSS.

"SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at least three (3) monthly
contributions in the twelve-month period immediately preceding the semester of her childbirth or
miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her
average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery,
subject to the following conditions:

"(a) 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 in accordance with the rules and regulations it
may provide;

"(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the
maternity leave application;

"(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits Provided
by this Act for the same period for which daily maternity benefits have been received;

"(d) That the maternity benefits Provided under this section shall be paid only for the first four (4)
deliveries or miscarriages;

"(e) That the SSS shall immediately reimburse the employer of one hundred percent (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

"(f) That if an 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 by the employer of the time of the pregnancy, the employer shall pay to the SSS
damages equivalent to the benefits which said employee member would otherwise have been entitled to.

Coverage of SSS law


1) The following are compulsory covered
a. All employees not over 60 years old and their employers and domestic helpers with a
monthly income of not less than P1000
b. Self-employed person as may be determined by the commission including:
i. Self-employed professionals
ii. Partners and single proprietors of business
iii. Actors and actress, directors, scriptwriters and news correspondents who do not
fall within the definition of the term employee
iv. Professional athletes, coaches, trainers and jockeys
v. Individual farmers and fisherman
c. Those voluntarily covered:
i. Spouses who devote full time to managing the household and family affairs
ii. Filipinos employed abroad recruited by foreign based employers
iii. Persons separated from employment to maintain his full benefits
iv. Self-employed, who realizes no income for a certain month
d. Any foreign government, international organization , or their wholly owned
instrumentality employing workers in the Philippine, may enter into an agreement with
the PH government for inclusion of such employees in the SSS except those already
covered by their respective civil service retirement systems.

Exclusions from the compulsory coverage of the SSS:


(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 employ of a foreign government or international organization, or their
wholly-owned instrumentality: Provided, however, That this exemption notwithstanding, any
foreign government, international organization or their wholly-owned instrumentality employing
workers in the Philippines or employing Filipinos outside of 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: Provided, further, That
the terms of such agreement shall conform with the provisions of this Act on coverage and
amount of payment of contributions and benefits: Provided, finally, That the provisions of this
Act shall be supplementary to any such agreement; and

(5) Such other services performed by temporary and other employees which may be excluded by
regulation of the Commission. Employees of bona fide independent contractors shall not be
deemed employees of the employer engaging the service of said contractors.

Benefits under the SSS


1) Monthly pension
2) Dependents pension
3) Retirement benefits
4) Death benefits and permanent disability benefits
5) Maternity benefits
6) Loan
7) Sickness benefits

GSIS Law
Coverage
It is compulsory upon all government employees receiving compensation who have not reached the
compulsory retirement age irrespective of employment status.

Exclusion from coverage


1) Members of the AFP and PNP
2) Contractual employees who have no E&E relationship with the agency they serve
3) Members of the judiciary and constitutional commissions who shall be covered by the life
insurance policy only
4) Purely casual employees

Benefits
1) Monthly pensions
2) Separation benefits
3) Unemployment or involuntary separation benefits
4) Permanent Total Disability Benefits
5) Survivorship benefits
6) Funeral benefits

Comment:
All contributions paid by a member personally, and those that were paid by his employers to both SSS
and GSIS shall be considered in the processing of benefits which he can claim from either or both
systems.

Beneficiaries:
1) Primary beneficiaries The legal dependent spouse until he/she remarries and the dependent
children;
2) Secondary beneficiaries The dependent parents and, subject to the restrictions on dependent
children, the legitimate descendants;

Labor Relations

Article. 211. Declaration of Policy.


A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of democracy and the
promotion of social justice and development;
(c) To foster the free and voluntary organization of a strong and united labor movement;
(d) To promote the enlightenment of workers concerning their rights and obligations as union
members and as employees;
(e) To provide an adequate administrative machinery for the expeditious settlement of labor or
industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-making processes affecting their
rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or
administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work
or other terms and conditions of employment, except as otherwise provided under this Code. (As
amended by Section 3, Republic Act No. 6715, March 21, 1989).

Labor standards
Refers to the minimum terms and conditions of employment to which employees are legally entitled and
with which employers must comply

Labor relations
Refers to the interactions between employer and employees or their representatives and the mechanism by
which the standards and other terms and conditions of employment are negotiated, adjusted and enforced.

Labor union
A completely organized body of dues-paying members, operating through elected officers and
constituting a militant, vital and functioning organ.

DEFINITIONS

Article. 212. Definitions.


(a) "Commission" means the National Labor Relations Commission or any of its divisions, as the case
may be, as provided under this Code.
(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional
offices established under Presidential Decree No. 1, in the Department of Labor.

(c) "Board" means the National Conciliation and Mediation Board established under Executive Order
No. 126.
(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive
Order No. 126, as amended.
(e) "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term
shall not include any labor organization or any of its officers or agents except when acting as
employer.
(f) "Employee" includes any person in the employ of an employer. The term shall not be limited to the
employees of a particular employer, unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in connection with any current labor dispute or
because of any unfair labor practice if he has not obtained any other substantially equivalent and
regular employment.
(g) "Labor organization" means any union or association of employees which exists in whole or in part
for the purpose of collective bargaining or of dealing with employers concerning terms and conditions
of employment.
(h) "Legitimate labor organization" means any labor organization duly registered with the Department of
Labor and Employment, and includes any branch or local thereof.
(i) "Company union" means any labor organization whose formation, function or administration has
been assisted by any act defined as unfair labor practice by this Code.
(j) "Bargaining representative" means a legitimate labor organization whether or not employed by the
employer.
(k) "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.
(l) "Labor dispute" includes any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee.
(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All employees not falling within any
of the above definitions are considered rank-and-file employees for purposes of this Book.
(n) "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or
designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator,
or one chosen with or without the assistance of the National Conciliation and Mediation Board,
pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official
that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon
the written request and agreement of the parties to a labor dispute.
(o) "Strike" means any temporary stoppage of work by the concerted action of employees as a result of
an industrial or labor dispute.
(p) "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or
labor dispute.

(q) "Internal union dispute" includes all disputes or grievances arising from any violation of or
disagreement over any provision of the constitution and by laws of a union, including any violation of
the rights and conditions of union membership provided for in this Code.
(r) "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work
or in the exercise of the right of self-organization or collective bargaining.
(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or
premises used as runaway shops, of the employer struck against, as well as the immediate vicinity
actually used by picketing strikers in moving to and fro before all points of entrance to and exit from
said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989).

Comment:
The test to determine the existence of a labor dispute whether it concerns terms, conditions of
employment or representation.

2 Tests or criteria of a labor dispute:


1) Nature: Disputes arises from E&E relationship, although disputants need not be proximately
Employee or Employer of the other
2) Subject matter:
1. It concerns terms and conditions of employment
2. Association or representation of persons in negotiating, fixing, maintaining, or changing terms or
conditions of employment

Kinds of labor disputes:


1) Labor standards dispute
a. Compensation
b. Benefits
c. Working conditions
2) Labor relations disputes
a. Organizational right dispute (restraint or interference in unionization efforts)
b. Representation disputes (uncertainty as which union has the right to represent)
c. Bargaining disputes
i. Refusal to bargain
ii. Bargaining in bad faith
iii. Bargaining deadlock
d. Contract administration or personal policy dispute
i. Noncompliance with CBA provision
ii. Disregard of grievance machinery
iii. Nonobservance or unwarranted use of union security clause
iv. Illegal or unreasonable personnel management policies
v. Violation of no-strike no-lockout agreement
e. Employment tenure disputes
i. Non regularization of employees, non-absorption of labor-only contracting staff
ii. Illegal termination
iii. Non-issuance of employment of contract

General remedies in labor disputes


1) Grievance procedure
In-house adjustment of complaint, problem or dispute following the steps prescribed in the CBA
or company policy
2) Conciliation (to draw together)
A process where a disinterested party meets with management and labor; at their request or
otherwise, during a labor dispute or in collective bargaining conferences and by cooling tempers,
aid in reaching an agreement
3) Mediation (to be in the middle)
A 3rd party studies each side of the dispute them makes proposal for the disputants to consider.
Note:
A mediator like a conciliator, cannot render an award or render a decision; they do not
adjudicate . Conciliations and mediations, usually combined, are done primarily by
conciliators-mediators of the NLRC
4) Enforcement of compliance orders
An act of the Secretary of labor (through the RD or other representatives) in the exercise of his
visitorial or administrative authority to enforce labor laws, policies, plans or programs or rules
and regulations
5) Certification of bargaining representatives
Determination of which contending unions shall represent employees in the CBA negotiations.
This is handled by med-arbiters of DOLE regional offices after certification or consent
elections.
6) Arbitration
The submission of a dispute to an impartial person for determination on the basis of evidence and
arguments of the parties. A dispute during arbitration cannot be a ground for strike or lockout; to
do so will be a sabotage of the arbitration process
Kinds:
b. Voluntary arbitration
The submission of the dispute by the parties is voluntary via an agreement and the
arbitrator or panel of arbitrators is chosen by them. The decision of the voluntary
arbitrators is final and unappealable except through certiorari
c. Compulsory arbitration
The submission of the dispute to arbitration is required by law. The decision is appealable
to the NLRC, then the CA through the civil action of Certiorari
7) Assumption of jurisdiction
An authority vested by law to the Sec of labor or the president to decide dispute causing or likely
to cause a strike or lockout in an industry indispensable to national interest
8) Certification to the NLRC
An action of the SOL empowering the NLRC to compulsory arbitrate a dispute causing or likely
to cause a strike or lockout in an industry indispensable to the national interest.

Note:
Either the assumption or certification to the NLRC automatically enjoins an ongoing or
impending strike or lockout. A return to work order is issue to strikers; at the same time the
employer is ordered to immediately resume operations and readmit all workers nder the same
terms and conditions prevailing before the strike or lockout

9) Injunction
Is an extraordinary remedy which is not favored in labor law.
10) Judicial action
A complaint in with the regular courts in cases falling under its jurisdiction
11) Appeal
12) Review by the courts
There is no law authorizing an ordinary appeal to the courts of justice save thatin cases where the
special civil action of certiorari, mandamus or prohibition.
13) Compromise agreement.

NLRC

Article 213. National Labor Relations Commission.


There shall be a National Labor Relations Commission which shall be attached to the Department of
Labor and Employment solely for program and policy coordination only, composed of a Chairman and
twenty-three (23) Members.

Eight (8) members each shall be chosen only from among the nominees of the workers and employers
organizations, respectively. The Chairman and the seven (7) remaining members shall come from the
public sector, with the latter to be chosen preferably from among the incumbent Labor Arbiters.

Upon assumption into office, the members nominated by the workers and employers organizations shall
divest themselves of any affiliation with or interest in the federation or association to which they belong.

The Commission may sit en banc or in eight (8) divisions, each composed of three (3) members. The
Commission shall sit en banc only for purposes of promulgating rules and regulations governing the
hearing and disposition of cases before any of its divisions and regional branches and formulating
policies affecting its administration and operations. The Commission shall exercise its adjudicatory
and all other powers, functions, and duties through its divisions. Of the eight (8) divisions, the first,
second, third, fourth, fifth and sixth divisions shall handle cases coming from the National Capital Region
and other parts of Luzon; and the seventh and eighth divisions, cases from the Visayas and Mindanao,
respectively: Provided, That the Commission sitting en banc may, on temporary or emergency basis,
allow cases within the jurisdiction of any division to be heard and decided by any other division
whose docket allows the additional workload and such transfer will not expose litigants to
unnecessary additional expenses. The divisions of the Commission shall have exclusive appellate
jurisdiction over cases within their respective territorial jurisdiction.

The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement
of a judgment or resolution. Whenever the required membership in a division is not complete and the
concurrence of two (2) Commissioners to arrive at a judgment or resolution cannot be obtained, the
Chairman shall designate such number of additional Commissioners from the other divisions as may be
necessary.

The conclusions of a division on any case submitted to it for decision shall be reached in consultation
before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the
division to meet for purposes of the consultation ordained therein. A certification to this effect signed
by the Presiding Commissioner of the division shall be issued, and a copy thereof attached to the record
of the case and served upon the parties.
The Chairman shall be the Presiding Commissioner of the first division, and the seven (7) other
members from the public sector shall be the Presiding Commissioners of the second, third, fourth,
fifth, sixth, seventh and eight divisions, respectively. In case of the effective absence or incapacity of
the Chairman, the Presiding Commissioner of the second division shall be the Acting Chairman.

The Chairman, aided by the Executive Clerk of the Commission, shall have administrative supervision
over the Commission and its regional branches and all its personnel, including the Labor Arbiters.

The Commission, when sitting en banc, shall be assisted by the same Executive Clerk, and, when acting
thru its Divisions, by said Executive Clerk for its first division and seven (7) other Deputy Executive
Clerks for the second, third, fourth fifth, sixth, seventh and eighth divisions, respectively, in the
performance of such similar or equivalent functions and duties as are discharged by the Clerk of Court
and Deputy Clerks of Court of the Court of Appeals.

The Commission and its eight (8) divisions shall be assisted by the Commission Attorneys in its appellate
and adjudicatory functions whose term shall be coterminous with the Commissioners with whom they are
assigned. The Commission Attorneys shall be members of the Philippine Bar with at least one (1) year
experience or exposure in the field of labor-management relations. They shall receive annual salaries and
shall be entitled to the same allowances and benefits as those falling under Salary Grade twenty-six (SG
26). There shall be as many Commission Attorneys as may be necessary for the effective and efficient
operations of the Commission but in no case more than three (3) assigned to the Office of the
Chairman and each Commissioner.

No Labor Arbiter shall be assigned to perform the functions of the Commission Attorney nor
detailed to the office of any Commissioner. (As amended by Section 1, Republic Act No. 9347 [July 27,
2006] and as previously amended by Republic Act No. 7700 and Section 5, Republic Act No. 6715).

Comment:
The rule that once a labor dispute has been certified to the NLRC, the same must be decided en banc has
been effectively repealed by the grant of the adjudicatory powers only to the divisions of the NLRC.

Administrative supervision over the divisions of the NLRC is vested with the chairman assisted by the
executive clerk of the commission. The NLRC is attached to the DOLE solely for program and policy
coordination only.

Instances where the NLRC may sit en banc:


1) For the purpose of promulgating rules and regulations governing the hearing and disposition of
cases before any of its divisions and regional branches and formulating policies affecting its
administration and opertaions
2) In order to transfer a case within the jurisdiction of a division to another subject to the following
conditions:
a. The receiving division can accommodate the additional workload
b. The transfer will not expose litigants to unnecessary additional expenses
3) The appointment of a labor arbiter needs the recommendation of the commission en banc

Article 214. Headquarters, Branches and Provincial Extension Units.


The Commission and its first, second, third, fourth, fifth and sixth divisions shall have their main offices
in Metropolitan Manila, and the seventh and eighth divisions in the cities of Cebu and Cagayan de Oro,
respectively. The Commission shall establish as many regional branches as there are regional offices of
the Department of Labor and Employment, sub-regional branches or provincial extension units. There
shall be as many Labor Arbiters as may be necessary for the effective and efficient operation of the
Commission. (As amended by Section 2, Republic Act No. 9347 [July 27, 2006] and previously amended
by Section 6, Republic Act No. 6715 [March 21, 1989]).

Article 215. Appointment and Qualifications.


The Chairman and other Commissioners shall be members of the Philippine Bar and must have been
engaged in the practice of law in the Philippines for at least fifteen (15) years, with at least five (5) years
experience or exposure in the field of labor-management relations, and shall preferably be residents of the
region where they shall hold office. The Labor Arbiters shall likewise be members of the Philippine Bar
and must have been engaged in the practice of law in the Philippines for at least ten (10) years, with at
least five (5) years experience or exposure in the field of labor-management relations.

The Chairman and the other Commissioners and the Labor Arbiters shall hold office during good
behavior until they reach the age of sixty-five (65) years, unless sooner removed for cause as provided by
law or become incapacitated to discharge the duties of their office; Provided, however, That the President
of the Republic of the Philippines may extend the services of the Commissioners and Labor Arbiters up to
the maximum age of seventy (70) years upon the recommendation of the Commission en banc.

The Chairman, the Division Presiding Commissioners and other Commissioners shall all be appointed by
the President. Appointment to any vacancy in a specific division shall come only from the nominees of
the sector which nominated the predecessor. The Labor Arbiters shall also be appointed by the President,
upon recommendation of the Commission en banc to a specific arbitration branch, preferably in the
region where they are residents, and shall be subject to the Civil Service Law, rules and regulations:
Provided, that the Labor Arbiters who are presently holding office in the region where they are residents
shall be deemed appointed thereat.
The Chairman and the Commission, shall appoint the staff and employees of the Commission, and its
regional branches as the needs of the service may require, subject to the Civil Service Law, rules and
regulations, and upgrade their current salaries, benefits and other emoluments in accordance with law. (As
amended by Section 3, Republic Act No. 9347 [July 27, 2006] and as previously amended by Section 7,
Republic Act No. 6715 [March 21, 1989]).

Article 216. Salaries, benefits and other emoluments.


The Chairman and members of the Commission shall have the same rank, receive an annual salary
equivalent to, and be entitled to the same allowances, retirement and benefits as, those of the Presiding
Justice and Associate Justices of the Court of Appeals, respectively. Labor Arbiters shall have the same
rank, receive an annual salary equivalent to and be entitled to the same allowances, retirement and other
benefits and privileges as those of the judges of the regional trial courts. In no case, however, shall the
provision of this Article result in the diminution of the existing salaries, allowances and benefits of the
aforementioned officials. (As amended by Section 4, Republic Act No. 9347 [July 27, 2006] and as
previously amended by Section 8, Republic Act No. 6715 [March 21, 1989])

POWERS AND DUTIES

Article. 217. Jurisdiction of the Labor Arbiters and the Commission.


(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
2. Unfair labor practice cases;
3. Termination disputes;
4. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;
5. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
6. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
7. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements. (As amended by Section 9,
Republic Act No. 6715, March 21, 1989).

Additional cases within the exclusive original jurisdiction of the LA:


1) Money claims arising out of E&E relationship or by virtue of any law or contract, involving Filipino
workers for overseas development, including claims for actual, moral exemplary and other forms of
damages as well as employment termination of OFWs
2) Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant
to RA 6727
3) Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant
to article 227
4) Other cases as may be provided for by law

Comment:
Compulsory arbitration refers only to the proceeding before the LA hence the phrase pending final
resolution of the case by arbitration should be understood to be limited only to the proceeding before the
LA.

Exceptions to the exclusive original jurisdiction of the LA (first and last paragraph of 217)
1) Grievances arising from the interpretation or implementation of the CBA and those arising from
the interpretation or enforcement of company personnel policies and violations of the CBA which
are not gross in character (261)
2) All other labor disputes which has been submitted for voluntary arbitration by the parties (262)

Comment: (requisites for violation of CBA to become ULP)


In order for the LA to have jurisdiction for violations of the CBA the complaint must show prima facie the
concurrence of the following:
1) Gross violations of the CBA
2) The violations pertains to the economic provisions of the CBA.
The existence of an E&E relationship is a jurisdictional requirement in order for the labor tribunals to take
cognizance over a controversy

Jurisdiction over intra-corporate disputes


PD 902-A
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving.
(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers
or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the
public and/or of the stockholder, partners, members of associations or organizations registered with the
Commission;
(b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members, or associates; between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns their individual franchise or
right to exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such
corporations, partnerships or associations.

As amended by RA8799
5.2. The Commissions jurisdiction over all cases enumerated under section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over
pending cases involving intra-corporate disputes submitted for final resolution which should be resolved
within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over
pending suspension of payment/rehabilitation cases filed as of 30 June 2000 until finally disposed

Better policy rule:


The better policy to be followed in determining jurisdiction over a case should be to consider concurrent
factors such as the status or relationship of the parties or the nature of the question that is subject of their
controversy. In the absence of any one of these factors, the SEC will not have jurisdiction. Furthermore,
it does not necessarily follow that every conflict between the corporation and its stockholders would
involve such corporate matters as only SEC (now the Regional Trial Court[20]) can resolve in the
exercise of its adjudicatory or quasi-judicial power

Requisites of the Better Policy rule (Renato Real VS. Sangu Philippines 2011):
1) There must be an intra-corporate relationship:
a. Between the corporation, partnership or association and the public;
b. Between the corporation, partnership or association and its stockholders, partners,
members or officers;
c. Between the corporation, partnership or association and the State as far as its franchise,
permit or license to operate is concerned; and
d. Among the stockholders, partners or associates themselves.
2) The nature and subject of the controversy
Whether the issue involved refers to intra-corporate matters

Comment:
Under the case of DY vs NLRC the court has ruled that the non-payment or under payment of wages of a
corporate officer stems from the corporate officers post brings the issue into a corporate dispute:

It is of no moment that Vailoces, in his amended complaint, seeks other reliefs which would
seemingly fall under the jurisdiction of the Labor Arbiter, because a closer look at these
underpayment of salary and non-payment of living allowance shows that they are actually part
of the perquisites of his elective position, hence, intimately linked with his relations with the
corporation. The question of remuneration, involving as it does, a person who is not a mere
employee but a stockholder and officer, an integral part, it might be said, of the corporation, is not
a simple labor problem but a matter that comes within the area of corporate affairs and
management, and is in fact a corporate controversy in contemplation of the Corporation Code.

Further note should be taken that that the re-election or re-appointment of a corporate officer is clearly
within the prerogative of the board hence this will constitute a intra-corporate controversy.
Corporate Officer
Are those officers of the corporation who are given that character by the Corporation Code or by the
corporations by-laws. There are three specific officers whom a corporation must have under Section 25
of the Corporation Code. These are the president, secretary and the treasurer. The number of officers is
not limited to these three. A corporation may have such other officers as may be provided for by its by-
laws like, but not limited to, the vice-president, cashier, auditor or general manager. The number of
corporate officers is thus limited by law and by the corporations by-laws.

Hence a corporate office is an office established by:


1) Law
2) By-laws
3) And if provided in the by-laws that the board may appoint other officers, those elected or
appointed by the board.

LAs jurisdiction with respect to money claims:


1) If the claim regardless of amount, is accompanied with a claim of reinstatement
2) If the claim, whether or not accompanied with a claim for reinstatement , exceeds P5000 per
claimant

Hence the only instance where the LA is deprived of jurisdiction, subject to the existence of a provision
for voluntary arbitration, is when the amount is less than 5k and there is no claim for reinstatement

Comment:
Money claims to be within the jurisdiction of the labor tribunals must have arisen from employment.
However note must be taken that money claims as a reward or prize in an incentive program (promos and
the like), jurisdiction over which would depend upon the following factors:
1) The claim must arise out of or in connection with the existence of the E&E of the parties
2) Resolution of the issue requires the application of the labor laws
Absent any of the above criteria, the courts of general jurisdiction has jurisdiction. On the other hand
where both criteria are present it is the labor tribunals which has jurisdiction.

Limitations to the jurisdiction of the LA in strike cases


1) Power to issue injunctions is lodge with the NLRC
2) Assumption of jurisdiction by the SOL or the Pres in cases involving an industry indispensable to
national interest
3) Crimes committed during a strike, prosecution thereof lies in the courts of general jurisdiction.

Comment:
Money claims against the government is not within the jurisdiction of the Labor tribunals, despite the fact
that there is an law expressly waiving the immunity of suit of the government, nonetheless under CA 327
all money claims must still be filed with the Commission on audit.

Comment:
A person is estopped from questioning the lack of jurisdiction over the subject of the court which he
invoked and actively participated in the hearing thereof. The provision in the rules of court stating that
lack of jurisdiction over the subject matter may be question anytime during appeal, stating that
jurisdiction is conferred by law and not by the parties is of no moment since administrative bodies are not
bound with the strict rules of court but are at best merely supplementary. (delicates---- kasi un SC iba iba
yun decision)

Comment on damages:
Not all damages are covered by the jurisdiction of the LA. The test to apply is that which law is the party
seeking a remedy for if it is the civil law it should be the courts of general jurisdiction. In the case of
portillo vs lietz the SC has ruled that the liquidated damages sought by the employer arose from the
breach of the employee of the good will clause (non-compete clause) which necessarily meant that the
cause of action accrued post-employment of the employee and that the employer is seeking protection
under our civil laws and not under labor laws, hence the labor courts had no jurisdiction to allow legal
compensation to be effected.

There is no causal connection between the petitioner employees claim for unpaid wages and the
respondent employers claim for damages for the alleged "Goodwill Clause" violation. Portillos
claim for unpaid salaries did not have anything to do with her alleged violation of the
employment contract as, in fact, her separation from employment is not "rooted" in the alleged
contractual violation. She resigned from her employment. She was not dismissed. Portillos
entitlement to the unpaid salaries is not even contested. Indeed, Lietz Inc.s argument about legal
compensation necessarily admits that it owes the money claimed by Portillo.

The alleged contractual violation did not arise during the existence of the employer-employee
relationship. It was a post-employment matter, a post-employment violation. Reminders are apt.
That is provided by the fairly recent case of Yusen Air and Sea Services Phils., Inc. v. Villamor,31
which harked back to the previous rulings on the necessity of "reasonable causal connection"
between the tortious damage and the damage arising from the employer-employee relationship.
Yusen proceeded to pronounce that the absence of the connection results in the absence of
jurisdiction of the labor arbiter. Importantly, such absence of jurisdiction cannot be remedied by
raising before the labor tribunal the tortious damage as a defense. Thus:

When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable
causal connection with any of the claims provided for in Article 217, jurisdiction over the action
is with the regular courts. [citation omitted]

As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover
damages based on the parties contract of employment as redress for respondents breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy
belongs to the regular courts. More so must this be in the present case, what with the reality that
the stipulation refers to the postemployment relations of the parties.

Article. 218. Powers of the Commission.


The Commission shall have the power and authority:

(a) To promulgate rules and regulations governing the hearing and disposition of cases before it and its
regional branches, as well as those pertaining to its internal functions and such rules and regulations
as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic Act
No. 6715, March 21, 1989).

(b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance
and testimony of witnesses or the production of such books, papers, contracts, records, statement of
accounts, agreements, and others as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in pursuance of this Code;

(c) To conduct investigation for the determination of a question, matter or controversy within its
jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has
been summoned or served with notice to appear, conduct its proceedings or any part thereof in public
or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an
expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties
to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or
irregularity whether in substance or in form, give all such directions as it may deem necessary or
expedient in the determination of the dispute before it, and dismiss any matter or refrain from further
hearing or from determining the dispute or part thereof, where it is trivial or where further
proceedings by the Commission are not necessary or desirable; and

(d) To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in
accordance with law.

A person guilty of misbehavior in the presence of or so near the Chairman or any member of the
Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same,
including disrespect toward said officials, offensive personalities toward others, or refusal to be
sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to
do so, may be summarily adjudged in direct contempt by said officials and punished by fine not
exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be the
Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or
imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter. The person adjudged in
direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment
shall be suspended pending the resolution of the appeal upon the filing by such person of a bond on
condition that he will abide by and perform the judgment of the Commission should the appeal be
decided against him. Judgment of the Commission on direct contempt is immediately executory and
unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the
manner prescribed under Rule 71 of the Revised Rules of Court; and (As amended by Section 10,
Republic Act No. 6715, March 21, 1989).

(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or
to require the performance of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any
decision in favor of such party: Provided, That no temporary or permanent injunction in any case
involving or growing out of a labor dispute as defined in this Code shall be issued except after
hearing the testimony of witnesses, with opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only
after a finding of fact by the Commission, to the effect:

(1) That prohibited or unlawful acts have been threatened and will be committed and will be
continued unless restrained, but no injunction or temporary restraining order shall be issued on
account of any threat, prohibited or unlawful act, except against the person or persons, association
or organization making the threat or committing the prohibited or unlawful act or actually
authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainants property will follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by
the denial of relief than will be inflicted upon defendants by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainants property are unable or
unwilling to furnish adequate protection.

Such hearing shall be held after due and personal notice thereof has been served, in such manner as
the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief
Executive and other public officials of the province or city within which the unlawful acts have been
threatened or committed, charged with the duty to protect complainants property: Provided, however,
that if a complainant shall also allege that, unless a temporary restraining order shall be issued
without notice, a substantial and irreparable injury to complainants property will be unavoidable,
such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained,
to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a
temporary restraining order shall be effective for no longer than twenty (20) days and shall become
void at the expiration of said twenty (20) days. No such temporary restraining order or temporary
injunction shall be issued except on condition that complainant shall first file an undertaking with
adequate security in an amount to be fixed by the Commission sufficient to recompense those
enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such
order or injunction, including all reasonable costs, together with a reasonable attorneys fee, and
expense of defense against the order or against the granting of any injunctive relief sought in the same
proceeding and subsequently denied by the Commission.
The undertaking herein mentioned shall be understood to constitute an agreement entered into by the
complainant and the surety upon which an order may be rendered in the same suit or proceeding
against said complainant and surety, upon a hearing to assess damages, of which hearing, complainant
and surety shall have reasonable notice, the said complainant and surety submitting themselves to the
jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party
having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary
remedy by suit at law or in equity: Provided, further, That the reception of evidence for the
application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters
who shall conduct such hearings in such places as he may determine to be accessible to the parties
and their witnesses and shall submit thereafter his recommendation to the Commission. (As amended
by Section 10, Republic Act No. 6715, March 21, 1989).

Article. 219. Ocular inspection.


The Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives, may, at any
time during working hours, conduct an ocular inspection on any establishment, building, ship or vessel,
place or premises, including any work, material, implement, machinery, appliance or any object therein,
and ask any employee, laborer, or any person, as the case may be, for any information or data concerning
any matter or question relative to the object of the investigation.

Powers of the NLRC


1) Rule making power
a. Governing the nearing and disposition of cases before it and its regional branches
b. Pertaining to its internal functions
c. Those that may be necessary to carry out the purposes of this article
2) Power to issue compulsory process
a. Administer oaths
b. Summon parties
c. Issue subpoenas ad testificandum and duces tecum
3) Power to investigate and hear disputes within its jurisdiction
4) Contempt power
5) Power to conduct ocular inspection
6) Original Adjudicatory power
a. Petitions for injunctions or TRO
b. Cases certified by the SOL or the PRES
7) Appellate adjudicatory power
a. NLRC does not have jurisdiction over the cases decided by:
i. VA
ii. SOL
iii. Bureau of labor relations on cases appealed from the dole regional offices
Note: the above is appealable to the CA.

Power to issue injunctions


Comment:
Article 254 prohibits the issuance of injunctions connected to a labor dispute except under article 218 and
264. Further the NLRC should follow the process laid down in article 218 in issuing injunction otherwise
the said injunction shall be declared illegal and void.

Before the power to grant injunctions was granted to LA via the NLRC rules of procedure, however due
to the revision of the rules the same was removed under the reasoning that the law only granted the NLRC
with such power hence the same cannot be extended by the NLRC by its promulgation of its new rules

Requisites for issuance of restraining order:


1) A hearing is held after due and personal notice thereof has been served to the following:
a. To all known persons against whom the relief is sought (save exception provided in the
law)
b. Chief executive and other public official of the province or city within which the
unlawful acts have been threatened or committed charged with the duty to protect
complainants property
2) Reception at the hearing of the testimony of witnesses, with opportunity for cross-examination, in
support of the allegations of a complaint made under oath , as well as testimony in opposition
thereto, if offered.
3) A finding of fact by the commission, to the effect:
a. That prohibited or unlawful acts have been threatened and will be committed and will be
continued unless restrained, but no injunction or TRO shall be issued on account of any
threat, prohibited or unlawful act, except against the person or persons, associations or
organization making the threat or committing the prohibited or unlawful act or actually
authorizing or ratifying the same after actual knowledge thereof
b. That substantial and irreparable injury to complainants property will follow
c. That as to each item of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon the defendants by granting
the relief
d. That complainant has no adequate remedy at law
e. That public officers charged with the duty to protect complainants property are unable or
unwilling to furnish adequate protection

Conditions for issuance of Ex Parte of TRO


1) The complainant shall also allege that, unless a TRO shall be issued without notice, a substantial
and irreparable injury to complainants property will be unavoidable
2) There is testimony under oath, sufficient, if sustained, to justify the commission in issuing a TRO
upon hearing after notice
3) The complainant shall first file an undertaking with adequate security in amount to be fixed by
the NLRC sufficient to recompense those enjoined for any loss, expense or damage caused by the
improvident or erroneous issuance of such order or injunction, including all reasonable costs,
together with a reasonable attorneys fee, and expense of defense against the order or against the
granting of any injunctive relief sought in the same proceeding and subsequently denied by the
Commission.
4) The TRO shall be effective for no longer than 20 days and shall become void at the expiration
thereof.

Comment:
TRO should be issued only for extreme necessity.

An injury is considered irreparable if it is of such constant and frequent recurrence that no fair and
reasonable redress can be had therefor in a court of law or where there is no standard by which their
amount can be measured with reasonable accuracy, that is, it is not susceptible of mathematical
computation.

Injunction cannot be issued against unlawful acts, unless the local authorities whose duty is to keep the
peace has been first resorted to and have either:
1) Advised that they could not or would not keep it
2) Advised that they could not and would have failed through inability or unwillingness to do

The power to issue injunctions by the NLRC is limited only to those arising out of or in connection to a
labor dispute. The test here is if the petitioner is requesting protection under the civil code and not from
the labor code, the injunction requested is civil in nature and therefore outside the jurisdiction of the
NLRC

Duration of TRO
From the date of issuance, not from the date of receipt of the parties, and ipso facto rendered void at the
end of the 20 day period, including Saturdays and Sundays.

Before an injunction can be issued by the NLRC it requires that a complaint be first filed or instituted
under the reasoning:
1) That the NLRCs power to issue injunctions originates from a labor dispute, without having filed
a complaint there is no labor dispute to account for
2) Injunctions are only ancillary remedy in ordinary dispute
3) (double check in article 217) the NLRC has no original jurisdiction saved that in cases certified to
it, as such the complaint in seeking labor remedies must first be filed with the appropriate agency
and should not try to circumvent the law by trying to institute the complaint in the NLRC by
virtue of an injunction instead of seeking appropriate redress from the appropriate tribunal.

Innocent bystander rule


The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of
speech guaranteed by the constitution. If peacefully carried out, it can not be curtailed even in the
absence of employer-employee relationship. The right is, however, not an absolute one. While peaceful
picketing is entitled to protection as an exercise of free speech, we believe the courts are not without
power to confine or localize the sphere of communication or the demonstration to the parties to the labor
dispute, including those with related interest, and to insulate establishments or persons with no industrial
connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated
at the instance of third parties or innocent bystanders if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have no connection or interest
exists between them and the picketing union or constitute an invasion of their rights. Thus, an innocent
bystander, who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds
specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection
whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the
context thereof. In the case at bar, petitioner cannot be said not to have such connection to the
dispute.

Comment:
An innocent bystander not being a party to the labor dispute can file an injunction in the civil courts.

Article. 221. Technical rules not binding and prior resort to amicable settlement.
In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in
courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain
the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all
in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties
may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner
or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages.

Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the
amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule
shall apply to the Commission in the exercise of its original jurisdiction. (As amended by Section 11,
Republic Act No. 6715, March 21, 1989).

Cardinal principles in administrative Due Process


1) The right to a hearing, which includes the right to present ones case and submit evidence in
support thereof
2) The tribunal must consider the evidence presented
3) The decision must have something to support itself
4) The evidence must be substantial
5) The decision must be based on the evidence presented at the hearing, or at least contained in the
record and disclosed to the parties affected
6) The tribunal or body or any of its judges must act on its own independent consideration of the law
and the facts of the controversy, and simply accept the views of a subordinate
7) The board or body should, in all controversial questions, render its decision in such manner that
the parties to the proceeding can know the various issues involved, and the reason for the decision
rendered

Prohibited pleadings:
1) Motion to dismiss, except on the ground of res judicata ground of lack of jurisdiction over the
subject matter, improper venue, prescription and forum shopping (litis pendentia)
2) Motion for bill of particulars
3) Motion for new trial
4) Petition for relief from judgment when filed with the NLRC
5) Petition for certiorari, mandamus, prohibition
6) Motion to declare respondent in default
7) MR or appeal from any interlocutory order

Comment:
1) Non-appearance of the complainant during the 2 settings for mandatory conciliation and
mediation conference scheduled in the summons, despite due notice thereof, shall be a ground for
the dismissal of the case without prejudice.
2) Failure of the respondent to appear in the mandatory conciliation and mediation conference for 2
of the scheduled sessions will result to the allowance by the LA to terminate such proceedings
and allow the complainant to submit evidence in support of his cause of action
3) Once a court has rendered a decision in a labor dispute and has become final and executory it is
no longer subject to amicable settlement since to allow the contrary would result to a mockery of
the judicial system (note: the SC has ruled that a compromise agreement is valid regardless if it
was entered into before, during or after the litigation of the issue provided it does not suffer any
of the vices of consent.
4) A motion to dismiss on the grounds above stated may be filed on or before the date set for
mandatory conciliation and mediation conference
5) The rule on the waiver of defences by failure to plead in the answer or motion to dismiss does not
apply when the ground thereof is apparent on its face of the complaint, specially when the
plaintiffs own allegation supports such finding. The labor arbiter may dismiss the case motu
proprio
6) All causes of action available during the period which is under litigation must be filed otherwise
the same shall be considered waived or barred
7) Suspension of proceedings due to the employers rehabilitation under PD 902-A is binding hence
all claims including those arising from labor disputes are also suspended since to allow otherwise
would defeat the very purpose of the statute allowing the employer corporation to rehabilitate
itself
8) Once a decision has been final and executory, the same cannot be amended nor altered even if the
purpose is to correct a perceived conclusion of fact or law. This is true regardless whether the
modification is to be made by the magistrate that rendered the judgment or by the appellate
magistrate that reviewed the same. This is anchored on the fact that all litigations must come to an
end however unjust the result of error may appear, otherwise litigation would even be more
intolerable than the wrong or injustice it is designed to correct.

Elements of res judicata


1) There must be a final judgment or order
2) The court rendering the decision must have jurisdiction over the subject matter and over the
parties
3) It must be a judgment or an order upon the merits of the controversy
4) There must be identity:
a. Parties
b. Subject matter
c. Cause of action

Article. 222. Appearances and Fees.


(a) Non-lawyers may appear before the Commission or any Labor Arbiter only:

1. If they represent themselves; or 2. If they represent their organization or members thereof.

(b) No attorneys fees, negotiation fees or similar charges of any kind arising from any collective
bargaining agreement shall be imposed on any individual member of the contracting union:
Provided, However, that attorneys fees may be charged against union funds in an amount to be
agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary
shall be null and void

NLRC RULES OF PROCEDURE


SECTION 6. APPEARANCES.
a) A lawyer appearing for a party is presumed to be properly authorized for that purpose. In every case,
he/she shall indicate in his/her pleadings and motions his/her Attorneys Roll Number, as well as
his/her PTR and IBP numbers for the current year and MCLE compliance.
b) A non-lawyer may appear in any of the proceedings before the Labor Arbiter or Commission only
under the following conditions:
(1) he/she represents himself/herself as party to the case;
(2) he/she represents a legitimate labor organization, as defined under Article 212 and 242 of the
Labor Code, as amended, which is a party to the case: Provided, that he/she presents to the
Commission or Labor Arbiter during the mandatory conference or initial hearing: (i) a
certification from the Bureau of Labor Relations (BLR) or Regional Office of the Department of
Labor and Employment attesting that the organization he/she represents is duly registered and
listed in the roster of legitimate labor organizations; (ii) a verified certification issued by the
secretary and attested to by the president of the said organization stating that he/she is authorized
to represent the said organization in the said case; and (iii) a copy of the resolution of the board
of directors of the said organization granting him such authority;
(3) he/she represents a member or members of a legitimate labor organization that is existing within
the employers establishment, who are parties to the case: Provided, that he/she presents: (i) a
verified certification attesting that he/she is authorized by such member or members to represent
them in the case; and (ii) a verified certification issued by the secretary and attested to by the
president of the said organization stating that the person or persons he/she is representing are
members of their organization which is existing in the employers establishment;
(4) he/she is a duly-accredited member of any legal aid office recognized by the Department of
Justice or Integrated Bar of the Philippines: Provided, that he/she (i) presents proof of his/her
accreditation; and (ii) represents a party to the case;
(5) he/she is the owner or president of a corporation or establishment which is a party to the case:
Provided, that he/she presents: (i) a verified certification attesting that he/she is authorized to
represent said corporation or establishment; and (ii) a copy of the resolution of the board of
directors of said corporation, or other similar resolution or instrument issued by said
establishment, granting him/her such authority.
c) Appearances of a non-lawyer in contravention of this section shall not be recognized in any
proceedings before the Labor Arbiter or the Commission.
d) Appearances may be made orally or in writing. In both cases, the complete name and office address
of counsel or authorized representative shall be made of record and the adverse party or his counsel or
authorized representative properly notified.
e) In case of change of address, the counsel or representative shall file a notice of such change, copy
furnished the adverse party and counsel or representative, if any.
f) Any change or withdrawal of counsel or authorized representative shall be made in accordance with
the Rules of Court. (8a)

SECTION 7. AUTHORITY TO BIND PARTY


Counsel or other authorized representatives of parties shall have authority to bind their clients in all
matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a
compromise agreement with the opposing party in full or partial discharge of a client's claim. (9a)

NLRC rules of procedure


SECTION 6. MOTION TO DISMISS.
Before the date set for the mandatory conciliation and mediation conference, the respondent may file a
motion to dismiss on grounds provided under Section 5, paragraph (a) hereof. Such motion shall be
immediately resolved by the Labor Arbiter through a written order. An order denying the motion to
dismiss, or suspending its resolution until the final determination of the case, is not appealable. (6a)

SECTION 7. EFFECT OF FAILURE TO FILE.


No motion to dismiss shall be allowed or entertained after the lapse of the period provided in Section 6
hereof. (n)

SECTION 8. MANDATORY CONCILIATION AND MEDIATION CONFERENCE.


a) The mandatory conciliation and mediation conference shall be called for the purpose of (1) amicably
settling the case upon a fair compromise; (2) determining the real parties in interest; (3) determining
the necessity of amending the complaint and including all causes of action; (4) defining and
simplifying the issues in the case; (5) entering into admissions or stipulations of facts; and (6)
threshing out all other preliminary matters. The Labor Arbiter shall personally preside over and take
full control of the proceedings and may be assisted by the Labor Arbitration Associate in the conduct
thereof. b) Conciliation and mediation efforts shall be exerted by the Labor Arbiters all throughout the
mandatory conferences. Any agreement entered into by the parties whether in partial or full
settlement of the dispute shall be reduced into writing and signed by the parties and their counsel or
the parties authorized representatives, if any.
b) In any case, the compromise agreement shall be approved by the Labor Arbiter, if after explaining to
the parties, particularly to the complainants, the terms, conditions and consequences thereof, he/she is
satisfied that they understand the agreement, that the same was entered into freely and voluntarily by
them, and that it is not contrary to law, morals, and public policy.
c) A compromise agreement duly entered into in accordance with this Section shall be final and binding
upon the parties and shall have the force and effect of a judgment rendered by the Labor Arbiter.
d) The mandatory conciliation and mediation conference shall, except for justifiable grounds, be
terminated within thirty (30) calendar days from the date of the first conference.
e) No motion for postponement shall be entertained except on meritorious grounds and when filed at
least three (3) days before the scheduled hearing. (3a)

SECTION 9. EFFECT OF FAILURE OF SETTLEMENT.


If the parties fail to agree on an amicable settlement, either in whole or in part, during the mandatory
conciliation and mediation conference, the Labor Arbiter shall proceed to the other purposes of the said
conference as enumerated in Section 8(a) hereof. (4a)

Article. 223. Appeal.


Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards,
or orders. Such appeal may be entertained only on any of the following grounds:
(b) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(c) If the decision, order or award was secured through fraud or coercion, including graft and corruption;

(d) If made purely on questions of law; and

(e) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or
injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from.

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution for reinstatement provided herein.

To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose reasonable
penalty, including fines or censures, upon the erring parties.

In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall
file an answer not later than ten (10) calendar days from receipt thereof.

The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the
appellee. The decision of the Commission shall be final and executory after ten (10) calendar days from
receipt thereof by the parties.

Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the
Commission in the enforcement of decisions, awards or orders.

NLRC Rules SECTION 4. REQUISITES FOR PERFECTION OF APPEAL.


a) The appeal shall be:
(1) filed within the reglementary period provided in Section 1 of this Rule;
(2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of
Court, as amended;
(3) in the form of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by:
i) proof of payment of the required appeal fee and legal research fee;
ii) posting of a cash or surety bond as provided in Section 6 of this Rule; and
iii) proof of service upon the other parties.
b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.
c) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was
filed, his/her answer or reply to appellant's memorandum of appeal, not later than ten (10) calendar
days from receipt thereof. Failure on the part of the appellee who was properly furnished with a copy
of the appeal to file his/her answer or reply within the said period may be construed as a waiver on
his/her part to file the same.
d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in accordance
with these Rules, the Commission shall limit itself to reviewing and deciding only the specific issues
that were elevated on appeal. (4a)

SECTION 6. BOND
In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a bond, which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and
attorneys fees.

In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court, and shall be accompanied by original or certified true copies of the
following:
a) a joint declaration under oath by the employer, his/her counsel, and the bonding company, attesting
that the bond posted is genuine, and shall be in effect until final disposition of the case.
b) an indemnity agreement between the employer-appellant and bonding company;
c) proof of security deposit or collateral securing the bond: provided, that a check shall not be
considered as an acceptable security;
d) a certificate of authority from the Insurance Commission;
e) certificate of registration from the Securities and Exchange Commission;
f) certificate of accreditation and authority from the Supreme Court; and 12
g) notarized board resolution or secretarys certificate from the bonding company showing its authorized
signatories and their specimen signatures. The Commission through the Chairman may on justifiable
grounds blacklist a bonding company, notwithstanding its accreditation by the Supreme Court.

A cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is
finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed
incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the
bonding company.

The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the
above-mentioned supporting documents. The appellee shall verify the regularity and genuineness thereof
and immediately report any irregularity to the Commission.
Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall
cause the immediate dismissal of the appeal, and censure the responsible parties and their counsels, or
subject them to reasonable fine or penalty, and the bonding company may be blacklisted.

No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the
posting of a bond in a reasonable amount in relation to the monetary award.

The mere filing of a motion to reduce bond without complying with the requisites in the preceding
paragraphs shall not stop the running of the period to perfect an appeal. (6a)

Comment:
No MR is allowed however if the MR filed complies with all the requirements of an appeal it will be
considered as a perfected appeal on the date of its submission

Failure to pay the appeal fee confers a directory not a mandatory power to dismiss the appeal. Further the
requirement to pay the appeal bond is not merely a procedural requirement but more importantly a
jurisdictional requirement, absent which the court should dismiss the appeal filed this is anchored under
the provisions of article 223 of the LLC which expressly requires that the appeal be perfected within 10
days from the receipt of the decision and only upon payment of the appeal bond will the appeal be
deemed perfected.

A motion to reduce bond shall not toll the appeal period unless the motion is based on meritorious
grounds and is accompanied by posting of a bond in a reasonable amount in relation to the monetary
award.

The computation of the appeal bond excludes the consideration of damages in its computation be it moral,
exemplary or Attys fees and only refers to the monetary award for Backwages separation pay and the
like.

Property bond is acceptable. The bond must be accepted unconditionally by the NLRC since if the
acceptance by the NLRC of the bond is subjected to conditions, the appellant must submit or complete the
aforesaid conditions prior to the expiration of the 10 day period otherwise he shall be deemed as not
having perfected his appeal.

Certification to the NLRC

Article 263 (g)


(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended
or impending strike or lockout as specified in the assumption or certification order. If one has already
taken place at the time of assumption or certification, all striking or locked out employees shall
immediately return-to-work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

NLRC rule 8

RULE VIII
CERTIFIED CASES

SECTION 2. CERTIFIED LABOR DISPUTES.


Certified labor disputes are cases certified to the Commission for compulsory arbitration under Article
263 (g) of the Labor Code.

SECTION 3. EFFECTS OF CERTIFICATION.


a) Upon certification, the intended or impending strike or lockout is automatically enjoined,
notwithstanding the filing of any motion for reconsideration of the certification order nor the non-
resolution of any such motion which may have been duly submitted to the Office of the Secretary of
Labor and Employment. If a work stoppage has already taken place at the time of the certification, all
striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout.
b) All cases between the same parties, except where the certification order specifies otherwise the issues
submitted for arbitration which are already filed or may be filed, and are relevant to or are proper
incidents of the certified case, shall be considered subsumed or absorbed by the certified case, and
shall be decided by the appropriate Division of the Commission. Subject to the second paragraph of
Section 4 of Rule IV, the parties to a certified case, under pain of contempt, shall inform their
counsels and the Division concerned of all cases pending with the Regional Arbitration Branches and
the Voluntary Arbitrators relative or incident to the certified case before it.
c) Whenever a certified labor dispute involves a business entity with several workplaces located in
different regions, the Division having territorial jurisdiction over the principal office of the company
shall acquire jurisdiction to decide such labor dispute; unless the certification order provides
otherwise.

SECTION 4. EFFECTS OF DEFIANCE.


Non-compliance with the certification order of the Secretary of Labor and Employment shall be
considered as an illegal act committed in the course of the strike or lockout, and shall authorize the
Commission to enforce the same under pain of immediate disciplinary action, including dismissal or loss
of employment status or payment by the locking-out employer of backwages, damages and/or other
affirmative relief, even criminal prosecution against the liable parties.
The Commission may also seek the assistance of law enforcement agencies to ensure compliance and
enforcement of its orders and resolutions.

SECTION 5. PROCEDURE IN CERTIFIED CASES.


a) When there is no need to conduct a clarificatory hearing, the Commission shall resolve all certified
cases within thirty (30) calendar days from receipt by the assigned Commissioner of the complete
records, which shall include the position papers of the parties and the order of the Secretary of Labor
and Employment denying the motion for reconsideration of the certification order, if any.
b) Where a clarificatory hearing is needed, the Commission shall, within five (5) calendar days from
receipt of the records, issue a notice to be served on the parties through the fastest means available,
requiring them to appear and submit additional evidence, if any. All certified cases shall be resolved
by the Commission within sixty (60) calendar days from receipt of the complete records by the
assigned Commissioner.
c) No motion for extension or postponement shall be entertained. (5a)

SECTION 6. EXECUTION OF JUDGMENT IN CERTIFIED CASE.


Upon issuance of the entry of judgment, the Commission, motu proprio or upon motion by the proper
party, may cause the execution of the judgment in the certified case.

Comment:

The general banking law has expressly classified the banking industry as indispensable to the national
interest.

The certification of a labor dispute no longer requires the existence of a strike, hence a dispute may be
certified to the NLRC for compulsory arbitration even before the existence of a strike provided however
there exist a labor dispute.

A strike becomes illegal if it continuous despite the assumption of the SOL or certification of the latter to
the NLRC provided notice to the parties and their counsels were effectively given, is a prerequisite even if
the order stats that it is immediately executory.

Defiance of the AJO order will not only result to the disciplinary action of the union officers who did not
comply but shall extend to all those members who defied the AJO. However it must sufficiently proved
that the employees intentionally defied a AJO or RTWO in the sense it must be shown that they knew of
the order and despite its knowledge consciously and knowingly defied its mandate.

Where to appeal
St Martin case rules:
1) The way for review a decision of the NLRC is via the special civil action of certiorari under rule
65
2) The SC and the CA has concurrent original jurisdiction for the special civil action of certiorari
3) By virtue to the doctrine of hierarchy of courts, the petition for the special civil action of
certiorari must be initiated with the CA

Grounds for review of the CA of the decisions of the SOL:


1) Complaints of employment agencies
2) Compliance orders affecting labor standards
3) Denial by the BLR of the registration of union
4) Cancellation of registration by the BLR
5) Order of a med arbiter as to the results of a certification election
6) Decisions of the BLR regarding administration of union funds
7) Decisions in cases where the SOL or the pres assumed jurisdiction over industries affecting
national interest.

Article. 224. Execution of decisions, orders or awards.


(a) The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor
Arbiter, or Med-Arbiter or Voluntary Arbitrator may, motu proprio or on motion of any interested
party, issue a writ of execution on a judgment within five (5) years from the date it becomes final and
executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders
or awards of the Secretary of Labor and Employment or regional director, the Commission, the Labor
Arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be the duty of the responsible
officer to separately furnish immediately the counsels of record and the parties with copies of said
decisions, orders or awards. Failure to comply with the duty prescribed herein shall subject such
responsible officer to appropriate administrative sanctions.

(b) The Secretary of Labor and Employment, and the Chairman of the Commission may designate
special sheriffs and take any measure under existing laws to ensure compliance with their decisions,
orders or awards and those of the Labor Arbiters and voluntary arbitrators, including the imposition of
administrative fines which shall not be less than P500.00 nor more than P10,000.00.

Comment:
1) Both parties and their corresponding counsels, if any must be given notice to be considered as
valid notice.
2) A writ of execution may be issued Motu Proprio or upon motion of the parties within 5 years
from the date us becomes final and executory
3) Failure to execute a judgment that has become final and executory within five years thereof will
render the decision dormant which then will require the party seeking its enforcement to institute
an independent action for its execution within 10 years from the date the judgment or order
became final
4) Petition for certiorari either by the CA or SC shall not stay the execution unless an injunction or
TRO has been issued by the courts
5) In the event that the ownership over the property to be enjoined or executed by the sheriff belongs
to a third party not part of the labor dispute the 3rd party may:
a. Seek redress from the LA and the sheriff who must follow the process laid down by the
NLRC rules and appeal to the NLRC may also follow
b. Seek redress from the civil courts and follow the process laid down therein (terceria)
Note must be taken that the rules covering the Sheriff and the LA binds them to follow the same
however does not limit such party to seek redress in the labor courts noting that his concern does
not arise from a labor dispute.

Further note, must be taken that the above remedies is not alternative but cumulative in the sense
that he can pursue both claims as provided in rule 39 section 16 of the RRC, therefore will not
hold the 3rd party liable for forum shopping since the rules itself provides that nothing herein
contained shall prevent such claimant or any third party person from vindicating his claim to the
property
6) Power of the NLRC to execute its judgments extends only to properties unquestionably belonging
to the judgment debtor.
7) If the 3rd party sought redress from the labor courts, his filing may suspend the execution unless
an indemnity bond is submitted by the judgment creditor, the recourse of the party here is to
institute an independent reinvindicatory action.

Bureau of Labor Relations


Article. 226. Bureau of Labor Relations.
The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the
Department of Labor, shall have original and exclusive authority to act, at their own initiative or upon
request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances
or problems arising from or affecting labor-management relations in all workplaces, whether agricultural
or non-agricultural, except those arising from the implementation or interpretation of collective
bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by
agreement of the parties.

Comment:
Inter-union disputes
Refers to any conflict between and among legitimate labor unions involving representation questions for
purposes of collecting bargaining or to any other conflict or dispute between legitimate labor unions

Intra-union disputes
Refers to any conflict between and among union members, including grievances arising from any
violation union members right and conditions of memberships, violation of or disagreement over any
provision of the unions constitution and by-laws, or disputes arising from chartering or affiliation of
union.
RULE XI (D.O 40-03
INTER/INTRA-UNION DISPUTES AND OTHER RELATED
LABOR RELATIONS DISPUTES
Section 1. Coverage.
Inter/intra-union disputes shall include:
(a) cancellation of registration of a labor organization filed by its members or by another labor
organization;
(b) conduct of election of union and workers' association officers/nullification of election of union and
workers' association officers;
(c) audit/accounts examination of union or workers' association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion of union and workers association officers and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;
(j) violations of or disagreements over any provision in a union or workers' association constitution and
by-laws;
(k) disagreements over chartering or registration of labor organizations and collective bargaining
agreements;
(l) violations of the rights and conditions of union or workers' association membership;
(m) violations of the rights of legitimate labor organizations, except interpretation of collective bargaining
agreements;
(n) such other disputes or conflicts involving the rights to self-organization, union membership and
collective bargaining -
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers' association.

Section 2. Coverage.
Other related labor relations disputes shall include any conflict between a labor union and the employer or
any individual, entity or group that is not a labor organization or workers' association. This includes:
(1) cancellation of registration of unions and workers associations; and
(2) a petition for interpleader.

Section 3. Effects of the filing/pendency of inter/intra-union and other related labor relations
disputes.
The rights, relationships and obligations of the parties litigants against each other and other parties-in-
interest prior to the institution of the petition shall continue to remain during the pendency of the petition
and until the date of finality of the decision rendered therein. Thereafter, the rights, relationships and
obligations of the parties litigants against each other and other parties-in-interest shall be governed by the
decision so ordered.
The filing or pendency of any inter/intra-union dispute and other related labor relations dispute is not a
prejudicial question to any petition for certification election and shall not be a ground for the dismissal of
a petition for certification election or suspension of proceedings for certification election.

Article. 227. Compromise agreements.


Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by
the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be
final and binding upon the parties. The National Labor Relations Commission or any court, shall not
assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is
prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

Requisites of a valid quitclaim:


(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties;
(3) the consideration of the quitclaim is credible and reasonable; and
(4) the contract is not contrary to law, public order, public policy, morals or good customs, or
prejudicial to a third person with a right recognized by law

Comment:
When it comes to the individual benefits accruing to members of a union from favorable final judgment
of any court, the members themselves become the real parties in interest and it is for them, rather than the
union, to accept or rekect individually the fruits of litigation

Article. 231. Registry of unions and file of collective bargaining agreements


The Bureau shall keep a registry of legitimate labor organizations. The Bureau shall also maintain a file of
all collective bargaining agreements and other related agreements and records of settlement of labor
disputes and copies of orders and decisions of voluntary arbitrators. The file shall be open and accessible
to interested parties under conditions prescribed by the Secretary of Labor and Employment, provided
that no specific information submitted in confidence shall be disclosed unless authorized by the Secretary,
or when it is at issue in any judicial litigation, or when public interest or national security so requires.

Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall submit
copies of the same directly to the Bureau or the Regional Offices of the Department of Labor and
Employment for registration, accompanied with verified proofs of its posting in two conspicuous places
in the place of work and ratification by the majority of all the workers in the bargaining unit. The Bureau
or Regional Offices shall act upon the application for registration of such Collective Bargaining
Agreement within five (5) calendar days from receipt thereof. The Regional Offices shall furnish the
Bureau with a copy of the Collective Bargaining Agreement within five (5) days from its submission.

The Bureau or Regional Office shall assess the employer for every Collective Bargaining Agreement a
registration fee of not less than one thousand pesos (P1,000.00) or in any other amount as may be deemed
appropriate and necessary by the Secretary of Labor and Employment for the effective and efficient
administration of the Voluntary Arbitration Program. Any amount collected under this provision shall
accrue to the Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall undertake or assist in the publication of all final decisions,
orders and awards of the Secretary of Labor and Employment, Regional Directors and the Commission.
(As amended by Section 15, Republic Act No. 6715, March 21, 1989).

Article. 232. Prohibition on certification election.


The Bureau shall not entertain any petition for certification election or any other action which may disturb
the administration of duly registered existing collective bargaining agreements affecting the parties except
under Articles 253, 253-A and 256 of this Code. (As amended by Section 15, Republic Act No. 6715,
March 21, 1989).

The Contract-Bar Rule


Requires, while a valid and registered CBA is subsisting, the BLR is not allow to hol an election
contesting the majority status of the incumbent union. The existence of a CBA bars the holding of iner-
union election contest. Such election is only allowed during the freedom period which refers to the last 60
days of the 5th year of a CBA.

Article. 233. Privileged communication.


Information and statements made at conciliation proceedings shall be treated as privileged
communication and shall not be used as evidence in the Commission. Conciliators and similar officials
shall not testify in any court or body regarding any matters taken up at conciliation proceedings
conducted by them.

Labor Organization
Article 234. Requirements of registration. - A federation, national union or industry or trade union
center or an independent union shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration
based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes
of the organizational meetings and the list of the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it. (As amended by Batas Pambansa
Bilang 130, August 21, 1981 and Section 1, Republic Act No. 9481 which lapsed into law on May 25,
2007 and became effective on June 14, 2007).

Article 234-A. Chartering and creation of a local chapter.


A duly registered federation or national union may directly create a local chapter by issuing a charter
certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality
only for purposes of filing a petition for certification election from the date it was issued a charter
certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon
the submission of the following documents in addition to its charter certificate:
(a) The names of the chapters officers, their addresses, and the principal office of the chapter; and
(b) The chapters constitution and by-laws: Provided, That where the chapters constitution and by-laws
are the same as that of the federation or the national union, this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the
chapter and attested by its president. (As inserted by Section 2, Republic Act No. 9481 which lapsed into
law on May 25, 2007 and became effective on June 14, 2007).

Article 235. Action on application.


The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the
organization, as the case may be, and attested to by its president.

Article 236. Denial of registration; appeal.


The decision of the Labor Relations Division in the regional office denying registration may be appealed
by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.

Article 237. Additional requirements for federations or national unions.


Subject to Article 238, if the applicant for registration is a federation or a national union, it shall, in
addition to the requirements of the preceding Articles, submit the following:
(a) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized
collective bargaining agent in the establishment or industry in which it operates, supporting the
registration of such applicant federation or national union; and
(b) The names and addresses of the companies where the locals or chapters operate and the list of all the
members in each company involved.

Labor union
Refers to any union or association of employees in the private sector which exist in whole or in part for
the purpose of collective bargaining, mutual aid, interest cooperation, protection or other lawful purposes

Legitimate Labor Organization


Refers to any labor organization in the private sector registered or reported with the DOLE in accordance
with law.

Union
Refers to any labor organization in the private sector organized for collective bargaining and for other
legitimate purpose.
Comment
Registration confers legal personality

Exclusive Bargaining agent


Refers to a LLO union duly recognized or certified as the sole and exclusive bargaining representative or
agent of all employees in a bargaining unit.

Workers association
Refers to an association of workers organized for the mutual aid and protection of its members or for any
legitimate purpose other than collective bargaining.

Legitimate workers association


Refers to an association of workers organized for mutual aid and protection of its members or for any
legitimate purpose other than collective bargaining registered with the DOLE in accordance with law.

National union/Federation
Means any labor organization with at least 10 local chapters or affiliates each of which must be a duy
certified collective bargaining agent

Industry union
Any group of LLO operating within an identified industry, organized for collective bargaining or for
dealing with employers concerning terms and conditions of employment within an industry, or for
participating in the formulation of social and employment policies, standards and programs in such
industry, which us duly registered with DOLE.

Trade Center
May refer to a group of national unions or federations organized for the mutual aid and protection of its
members, for assisting such members in CB, or for participating in the formulation of social and
employment policies, standards and programs.

Alliance
Is an aggregation of unions existing in one line of industry, or in conglomerate, a group of franchise, a
geographic area, or industrial center. Each member union retains its own organization or structure and
independence. An alliance, though cannot represent its members unions in CBA negotiations

Company union
Is a labor organization which, in whole or in part, is employer-controlled or employer dominated.

Comment
A union may be independent or a chapter dependent upon its creation, independent if created by
independent registration or a chapter is created through chaptering.

Where to file registration


Registration shall be filed and acted upon by the regional office where the applicant principally resides.
However applications for registration of federations, national unions or workers association operating in
more than one region shall be filed with the BLR or regional offices but shall be acted upon by the BLE
which has national jurisdiction.

Chartered local
Refers to a labor organization in the private sector operating at the enterprise level that acquired legal
personality, through the issuance of a charter certificate by a duly licensed federation or a national union
and registered with the BLR. The federation/National union must submit the following:
1) Local certificate issued by the Federation indicating the creation of the local chapter
2) Names of the local chapters officers, their addresses and their principal office
3) The local chapters constitution and by-laws, if the consti and by laws are the same with the
federation this fact shall be indicated accordingly
All the forgoing must be certified under oath ny the secretary or the treasurer and attested by the president
of the local chapter.

Comment:
The grant of a charter automatically grants the local chapter legal personality, however such personality is
limited only to the purpose of filing a petition for certification election.
A labor organization acquires the status of an LLO and all the rights and privileges pertaining thereto
upon the issuance of its certificate of registration or certificate of creation of chartered local by the BLR

Recognition by the BLR is not a ministerial duty since they are clothed with the power to investigate the
veracity of the documents submitted to check if the same was acquired through fraud or otherwise and to
finally see that all the requirements of the law has been complied with.

The 20% requirement is not applicable to the federation since article 234-A specifically omitted such a
requirement in the instance of registering a local chapter. Hence the 20% requirement is applicable only to
independent labor organization requesting registration and the subsequent release of certification of
registration.

Note must be taken that the IRR NO09 specifically states that the legal personality of the an LLO is not
subject to collateral attack but needs to be assailed in an independent petition for cancelation of union
registration

The requirement of a bargaining unit is that the members must have common concerns or interest. The
only requirement is that a union seeking registration must comprise at least 20% of that bargaining unit

The constitution of the union and its by laws regulates and governs the relationship between and among
its members and the courts will enforce the same so long that it does not contravene the law, morals,
public policy, reason and does not foster discrimination.
Procedure of denial and appeal of registration, consolidation change of name affiliation merger and the
like:
1) The RO or BLR shall within 5 days from receipt of the application notify the applicant in writing
that their requirements are lacking and that they must complete the same within 10 days from
receipt
2) If the applicant fails to complete the same, the RO or BLR shall deny the application without
prejudice to the applicant to re-file the same
3) The denial must be in writing and expressing the reason for denial in clear terms
4) If appeal is warranted the process is:
a. RO BLR CA - SC
b. BLR SOL CA SC

Comment:
The right to affiliate has the corresponding right to disaffiliate however the terms and conditions agreed
upon the affiliation document is an obligation the parties needs to comply with. Finally the right to dis-
affiliate is subject to the provisions of the constitution and by-laws of the parties and absent any
prohibition therein a dismissal grounded upon disaffiliation is illegal.

Substitutionary doctrine:
The employees cannot revoke the validly executed CBA with their employers by the simply expedient of
changing their bargaining agent. The new agent must respect and comply with the CBA. The employees,
thru their new bargaining agent, cannot renege on the CBA, except to negotiate with management for the
shortening hereof. Note must be taken that the SC in the case of Benguet vs. BCI ruled that the no-strike
clause is not binding on the new representative since the substitutionary doctrine binds only the
employees and not the other LLO in the company and saving the instance they voluntarily assumed the
personal undertaking of the deposed LLO they are not bound thereby.

Comment:
The federation or national union can revoke the charter it has granted to a local chapter on grounds of
disloyalty or other grounds found in its constitution by a written notice to that effect sent to the local
chapter and the BLR. The revocation notice will result to the revocation of the legal personality of the
local chapter unless it has secured independent registration. However if the local chapter is covered by a
duly registered CBA there legal personality shall continue only until the expiration of the CBA unless
they have secured independent registration.

Requirements of a merger/consolidation
1) Notice of merger or consolidation
2) The minutes of m/c convention or general membership meeting/s of all the m/c labor
organizations, with the list of their respective members who approved the same
3) The amended constitution and by-laws and minutes of its ratification, unless ratification
transpired in the M/C convention, which fact shall be indicated accordingly
Certificate of registration of the merged labor organization
1) The new name of the m/c orgs
2) That fact that it is a m/c of two or more labor organization
3) The name of the LO that were merged or consolidated
4) The office or business address
The date when each of the m/c labor organizations acquired legitimate personality as stated in their
respective original certificate of registration

Article 238. Cancellation of registration.


The certificate of registration of any legitimate labor organization, whether national or local, may be
cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof. (As
amended by Section 3, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

Article 238-A. Effect of a petition for cancellation of registration.


A petition for cancellation of union registration shall not suspend the proceedings for certification election
nor shall it prevent the filing of a petition for certification election.

In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable
remedies in the appropriate courts. (As inserted by Section 4, Republic Act No. 9481 which lapsed into
law on May 25, 2007 and became effective on June 14, 2007).

Article 239. Grounds for cancellation of union registration.


The following may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters;
(c) Voluntary dissolution by the members. (As amended by Section 5, Republic Act No. 9481 which
lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Article 239-A. Voluntary cancellation of registration.


The registration of a legitimate labor organization may be cancelled by the organization itself: Provided,
That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to
dissolve the organization: Provided, further, That an application to cancel registration is thereafter
submitted by the board of the organization, attested to by the president thereof. (Inserted as a new
provision by Section 6, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

Requisites of voluntary cancelation


1) The members desire to dissolve or cancel the registration of their union must have been voted
upon through secret ballot, applying the provisions of article 241
2) The balloting should take place in a meeting duly called for that purpose
3) The vote to dissolve should represent at least 2/3 affirmative vote of the general membership, not
just of the quorum
4) The members resolution must be followed by an application for cancellation passed and
submitted by the unions governing board, which application must be attested to by the president.

Comment:
Reason or justification for the vote of dissolution by the members is not required by law

Administrative cancellation:
Authorizes the BLR to delist the registration of a LLO upon its failure to submit the following
requirements for 5 consecutive years:

1) Any amendment to its consti or by-laws and the minutes of adoption or ratification of such
amendments
2) Annual financial reports 30days from the close of the fiscal year
3) Updated list of newly-elected officers together with the appointive officers or agents who are
entrusted with the handling of funds within 30 days from such election
4) Updated list of individual members of chartered locals, independent unions and workers
association 30 days from the close of each fiscal year
5) Updated list of its chartered locals and affiliates or member organization, CBA executed and their
effective period, within 30 days from the close of the fiscal year. As well as the updated list of
their authorized representatives, agents or signatories in different regions of the country.

Appeal for cancellation


1) Regional director- BLR CA
2) BLR SOL CA

Article 240. Equity of the incumbent.


All existing federations and national unions which meet the qualifications of a legitimate labor
organization and none of the grounds for cancellation shall continue to maintain their existing affiliates
regardless of the nature of the industry and the location of the affiliates.

Article 241. Rights and conditions of membership in a labor organization.


The following are the rights and conditions of membership in a labor organization:

(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor
organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

(b) The members shall be entitled to full and detailed reports from their officers and representatives of all
financial transactions as provided for in the constitution and by-laws of the organization;
(c) The members shall directly elect their officers, including those of the national union or federation to
which they or their union is affiliated, by secret ballot at intervals of five (5) years. No qualification
requirements for candidacy to any position shall be imposed other than membership in good
standing in subject labor organization. The secretary or any other responsible union officer shall
furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with
the appointive officers or agents who are entrusted with the handling of funds, within thirty (30)
calendar days after the election of officers or from the occurrence of any change in the list of officers
of the labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989).

(d) The members shall determine by secret ballot, after due deliberation, any question of major policy
affecting the entire membership of the organization, unless the nature of the organization or force
majeure renders such secret ballot impractical, in which case, the board of directors of the
organization may make the decision in behalf of the general membership;

(e) No labor organization shall knowingly admit as members or continue in membership any individual
who belongs to a subversive organization or who is engaged directly or indirectly in any subversive
activity;

(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for election
as a union officer or for appointment to any position in the union;

(g) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions
in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to
its constitution and by-laws;

(h) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt
signed by the officer or agent making the collection and entered into the record of the organization to
be kept and maintained for the purpose;

(i) The funds of the organization shall not be applied for any purpose or object other than those expressly
provided by its constitution and by-laws or those expressly authorized by written resolution adopted
by the majority of the members at a general meeting duly called for the purpose;

(j) Every income or revenue of the organization shall be evidenced by a record showing its source, and
every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment
is made, which shall state the date, place and purpose of such payment. Such record or receipt shall
form part of the financial records of the organization.

Any action involving the funds of the organization shall prescribe after three (3) years from the date
of submission of the annual financial report to the Department of Labor and Employment or from the
date the same should have been submitted as required by law, whichever comes earlier: Provided,
That this provision shall apply only to a legitimate labor organization which has submitted the
financial report requirements under this Code: Provided, further, that failure of any labor organization
to comply with the periodic financial reports required by law and such rules and regulations
promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the
cancellation of union registration of such labor organization; (As amended by Section 16, Republic
Act No. 6715, March 21, 1989).

(k) The officers of any labor organization shall not be paid any compensation other than the salaries and
expenses due to their positions as specifically provided for in its constitution and by-laws, or in a
written resolution duly authorized by a majority of all the members at a general membership meeting
duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast
shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any
irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from
the organization;

(l) The treasurer of any labor organization and every officer thereof who is responsible for the account of
such organization or for the collection, management, disbursement, custody or control of the funds,
moneys and other properties of the organization, shall render to the organization and to its members a
true and correct account of all moneys received and paid by him since he assumed office or since the
last day on which he rendered such account, and of all bonds, securities and other properties of the
organization entrusted to his custody or under his control. The rendering of such account shall be
made:

(1) At least once a year within thirty (30) days after the close of its fiscal year;
(2) At such other times as may be required by a resolution of the majority of the members of the
organization; and
(3) Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the
Secretary of Labor.

(m) The books of accounts and other records of the financial activities of any labor organization shall be
open to inspection by any officer or member thereof during office hours;

(n) No special assessment or other extraordinary fees may be levied upon the members of a labor
organization unless authorized by a written resolution of a majority of all the members in a general
membership meeting duly called for the purpose. The secretary of the organization shall record the
minutes of the meeting including the list of all members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such assessment or fees. The record shall be attested to
by the president.

(o) Other than for mandatory activities under the Code, no special assessments, attorneys fees,
negotiation fees or any other extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed by the employee. The authorization
should specifically state the amount, purpose and beneficiary of the deduction; and
(p) It shall be the duty of any labor organization and its officers to inform its members on the provisions
of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system
and all their rights and obligations under existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations
seminars and other labor education activities.

Any violation of the above rights and conditions of membership shall be a ground for cancellation of
union registration or expulsion of officers from office, whichever is appropriate. At least thirty
percent (30%) of the members of a union or any member or members specially concerned may report
such violation to the Bureau. The Bureau shall have the power to hear and decide any reported
violation to mete the appropriate penalty.

Criminal and civil liabilities arising from violations of above rights and conditions of membership
shall continue to be under the jurisdiction of ordinary courts.

Rights of union members:


1) Political right
a. Right to vote
b. Right to be voted for subject to lawful provisions on qualifications and DQs
2) Deliberative and decision making rights:
a. Right to participate in deliberations on major policy questions and decide them by secret
ballots
3) Rights over money matters:
a. Right against excessive fees
b. Right against unauthorized collection of contributions or disbursements
c. Right to require adequate records of income and expenses
d. Right to access to financial records
e. Right to vote on officers compensation
f. Right to vote on proposed special assessments and be deducted a special assessment only
with the members written authorization
4) Right to information
a. Right to be informed about the organizations constitution and by-laws and the CBA and
about labor laws

Comment:
The right to be part of a union is given on the first day a person starts his employment however, the
conditions in joining a specific union is dependent on the constitution and by-laws of that specific union.

The manner and what positions will be elected is left by the law to the union in accordance with its consti
and by-laws however in the absence of a provision to that effect the IRR provides the following:

1) The president shall form an election committee within 60 days before expiration of the incumbent
officers term
2) In the event that the officers with expired terms do not call an election, the remedy according to
the rules is for at least 30% of the members file a petition with the DOLE for the holding of an
election.

Note should be taken that the provisions found in the consti or by-laws shall not be contrary to the
provisions of the law, such as the requirements of an officer save that of the term in good standing

Comment:
In no cases shall the union members violate the provisions of their constitution, assuming it is not invalid
as being contrary to law, morals, public order or public policy, they must even if they are in fear of the
result follow the provisions they have agreed upon in their CBL in election of their officers or any other
action governed by it.

The right to vote with respect to the election of officers may be regulated by the union so long as the
regulation is reasonable in no case however can the union completely withdraw this right to its members
permanently specially if they are in good standing.

No person shall be elected as an officer or appointed thereto without being a (employee) member in good
standing of the union he is seeking to be elected or appointed to.

Is employment a requirement of joining a union?


Grounds for DQ of union officers:
1) He has been convicted with a crime involving moral turpitude
2) He is a member of an organization engaged directly or indirectly in any subversive activity
3) He is not a member in good standing

Comment:
As a general rule a union officer, after his election may not be expelled from the union for past
malfeasance or misfeasance otherwise this would nullify the choice made by the member unions since the
court has noted that the members is voting for him is aware of his past grievances and forgave him
thereof. However if the malfeasance or misfeasance was committed during his term the remedy is union
expulsion and not a referendum. Such expulsion may be effected by following the rules set forth in their
CBL or at the least substantial compliance thereof, without validating the officers right to due process.

Comment:
As a general rule before redress can be availed of in the administrative or quasi-judicial bodies for intra-
union disputes the remedy provided in their CBL should be first availed of otherwise the said case shall
be considered as premature and thereby dismiss. However this rule is not absolute and subject to the
following exceptions:
1) If the exhaustion of the remedies found in the CBL would amount to denial of justice, such as the
case where the board or person who will adjudicate the claim are the very persons subject of the
complaint
2) Where the violation complained of is a violation of due process.
Comment:

Violation of the rights of the members is a ground for expulsion and may be a valid subject of a case filed
in the BLR however the 30% requirement is not essential where the members who filed the case are the
very members whose rights has been transgressed by virtue of the following provision:

Any violation of the above rights and conditions of membership shall be a ground for cancellation of
union registration or expulsion of officers from office, whichever is appropriate. At least thirty
percent (30%) of the members of a union or any member or members specially concerned may report
such violation to the Bureau. The Bureau shall have the power to hear and decide any reported
violation to mete the appropriate penalty.

Visitorial power of the SOL


Article 274 grants the SOL to conduct an investigation or inquire into the financial activities of a union to
determine its compliance or non-compliance with the law and to aid prosecution for violations thereof
upon complaint filed to it which is supported by at least 20% of the membership of the said union.

Check-off
Is a method deducting from an employees wage at a prescribed period amounts due to the unions for
fees, fines or assessments validly made by the union.

Requirement for check off of special assessment, atty fee, negotiation fees or other extraordinary fees:
1) A written resolution must be made by the majority of the members present in the general meeting
authorizing the levy for special assessment
2) There must be individual authorizations signed and given by the employees concerned, specifying
the following:
a. Amount
b. Purpose
c. Beneficiary of the deduction
3) Secretarys record of the minutes of the meeting

Requirement of levy for special assessment:


1) There must be a general meeting
2) The general meeting must be held specifically for that purpose
3) A written resolution must be made by the majority of the members present in the general meeting
authorizing the levy for special assessment

Comment:
Per the labor code and the IRR no check off can be made except that authorized in writing by the
employee specifying the amount, purpose and beneficiary thereof.
The only instance where the law allows an automatic deduction of the winnings or the employee for
payment of not exceeding 10% for attys fees is where it went through a judicial or quasi-judicial
proceeding for recovery of wages

Book 3 Rule VIII section 11 IRR:


SECTION 11. Attorney's fees. Attorney's fees in any judicial or administrative proceedings for the
recovery of wages shall not exceed 10 percent of the amount awarded. The fees may be deducted from the
total amount due the winning party

Mandatory activity:
mandatory activity has been defined as a judicial process of settling dispute laid down by the law. (Carlos
P. Galvadores, et al. vs. Cresenciano B. Trajano, Director of the Bureau of Labor Relations, et al., G.R.
No. L-70067)

Valid check-offs
1) Union dues
2) Agency fee
This is the amount nonunion members pays to the union because they benefit from the CBA
negotiations of the union. This amount is usually equivalent to union fees (248 (e))

Comment:
Illegal check-offs committed by the employer may result to a violation of article 113 (wage deduction).
However its failure to collect union fees will not render it liable for its payment since the obligation to
pay devolves upon the individual employees. However its failure to collect and submit to the union, if
required by a CBA, may result to it being liable for an ULP for violating the provisions of the CBA.

Article 242. Rights of legitimate labor organizations.


A legitimate labor organization shall have the right:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the employees in an appropriate bargaining unit
for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with its annual audited financial statements,
including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the
date of receipt of the request, after the union has been duly recognized by the employer or certified as
the sole and exclusive bargaining representative of the employees in the bargaining unit, or within
sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or
during the collective bargaining negotiation;
(d) To own property, real or personal, for the use and benefit of the labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its members, including
cooperative, housing, welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to the contrary, the income and the properties
of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they
may receive from fraternal and similar organizations, local or foreign, which are actually, directly and
exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments.
The exemptions provided herein may be withdrawn only by a special law expressly repealing this
provision. (As amended by Section 17, Republic Act No. 6715, March 21, 1989).

Comment:
An LLO has the legal personality to sue in behalf of its members. Once a suit has been filed by the union
the members thereof can no longer intervene in the said case since their interest has been fully represented
the only instance where this can be allowed is where the intervening members prove:
a) That there is fraud or collusion between the union and the employer
b) Or the union will not act in good faith for the protection of all interest represented by the union

Comment:
As a general rule CBA agreements entered into by the union in favor of its members. Shall bind the
members of the union if ratified by majority of its members. However this presumption of authority does
not extend to compromise agreements or quitclaims concerning money claims of the individual members
since the law requires an express individual authorization of its members.

4 points in time where a union may ask to for financial statements of the company:
1) After the union has been recognized by the employer as the sole bargaining agent/representative
of the employees in the bargaining unit
2) After the union is certified by DOLE as such sole bargaining representative
3) Within the last 60 days of the life of the current CBA
4) During CB negotiations

The audited financial statements, including the balance sheet and the profit and loss statement, should be
provided by the employer within 30 calendars days after receipt of the unions request.

Comment:
The right of the union to collect dues is anchored in article 277

Article 242-A. Reportorial requirements.


The following are documents required to be submitted to the Bureau by the legitimate labor organization
concerned:

(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days from
adoption or ratification of the constitution and by-lam or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from
election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union registration
but shall subject the erring officers or members to suspension, expulsion from membership, or any
appropriate penalty. (As inserted by Section 7, Republic Act No. 9481 which lapsed into law on May 25,
2007 and became effective on June 14, 2007).

Article 243. Coverage and employees right to self-organization.


All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable,
medical, or educational institutions, whether operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their mutual aid and
protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980).

Exceptions to the right to form unions:


1) Cooperatives member-employee since they are considered an owner or part owner of the
cooperative since it would result to the owner bargaining with himself. However the member-
employee is not prohibited from joining or creating a workers association since the purpose of
the same is not to collectively bargain with the owner but for the mutual aid and protection of its
members and other legitimate purposes other than right to the to bargain collectively
2) International organization and specialized agencies due to their immunity from suit
3) Foreign workers are allowed to exercise this right provided that their home country grants a
similar rights to Filipinos
4) Religious beliefs:
a. Clear and present danger rule
b. Strict scrutiny test
c. Hierarchy of rights- Religious freedom, although not unlimited, is a fundamental personal
right and liberty, and has a preferred position in the hierarchy of values. Contractual
rights, therefore, must yield to freedom of religion.

Article 244. Right of employees in the public service.


Employees of government corporations established under the Corporation Code shall have the right to
organize and to bargain collectively with their respective employers. All other employees in the civil
service shall have the right to form associations for purposes not contrary to law.

Comment:
The right to form associations are granted to government employees however the right to strike is
withheld from them under the reasoning that under the 1987 constitution the right to strike has been
allowed provided it is in accordance with law and since there is a law prohibiting the government
employees to render strike they are not allowed to do this for several reasons.

They are still allowed to negotiate however they cannot negotiate terms and conditions of employment
requiring the appropriation of public funds nor those terms provided for by law.

Levels of position
Private Can join unions Public Can join unions
Managerial No High level: managerial No
or highly confidential
Supervisory Yes to a limit Rank and file Yes
Rank and file Yes n/a N/a

Community or mutuality of interest test


Whether or not it is fundamentally the combination which will best assure to all employees the exercise of
their collective bargaining right.

Take into consideration:


3) Will of the employees
4) Affinity and unity of the employee's interest such as similarity of work, duties and salary
5) Prior collective bargaining history
6) Employment status

EO 180
I. Coverage

Sec. 1. This Executive Order applies to all employees of all branches, subdivisions, instrumentalities, and
agencies, of the Government, including government-owned or controlled corporations with original
charters. For this purpose, employees, covered by this Executive Order shall be referred to as
"government employees".

Sec. 2. All government employees can form, join or assist employees' organizations of their own
choosing for the furtherance and protection of their interests. They can also form, in conjunction with
appropriate government authorities, labor-management committees, works councils and other forms of
workers' participation schemes to achieve the same objectives.

Sec. 3. High-level employees whose functions are normally considered as policy-making or managerial
or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-
and-file government employees.

Sec. 4. The Executive Order shall not apply to the members of the Armed Forces of the Philippines,
including police officers, policemen, firemen and jail guards.

Comment:
Government Employees not capable of joining or forming unions:
1) High-level employees whose functions are normally considered as policy-making or managerial
or whose duties are of a highly confidential nature
2) Members of the Armed Forces of the Philippines, including police officers, policemen, firemen
and jail guards.

II. Protection of the Right to Organize

Sec. 5. Government employees shall not be discriminated against in respect of their employment by
reason of their membership in employees' organizations or participation in the normal activities of their
organization. Their employment shall not be subject to the condition that they shall not join or shall
relinquish their membership in the employees' organizations.

Sec. 6. Government authorities shall not interfere in the establishment, functioning or administration of
government employees' organizations through acts designed to place such organizations under the control
of government authority.

III. Registration of Employees' Organization

Sec. 7. Government employees' organizations shall register with the Civil Service Commission and the
Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations
of the Department which shall process the same in accordance with the provisions of the Labor Code of
the Philippines, as amended. Applications may also be filed with the Regional Offices of the Department
of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor
Relations within three (3) days from receipt thereof.

Sec. 8. Upon approval of the application, a registration certificate be issued to the organization
recognizing it as a legitimate employees' organization with the right to represent its members and
undertake activities to further and defend its interest. The corresponding certificates of registration shall
be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor and
Employment.

IV. Sole and Exclusive Employees' Representatives

Sec. 9. The appropriate organizational unit shall be the employers unit consisting of rank-and-file
employees unless circumstances otherwise require.

Sec. 10.The duly registered employees' organization having the support of the majority of the employees
in the appropriate organizational unit shall be designated as the sole and exclusive representative of the
employees.

Sec. 11. A duly registered employees' organization shall be accorded voluntary recognition upon a
showing that no other employees' organization is registered or is seeking registration, based on records of
the Bureau of Labor Relations, and that the said organizations has the majority support of the rank-and-
file employees in the organizational unit.

Sec. 12.Where there are two or more duly registered employees' organizations in the appropriate
organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification
election and shall certify the winner as the exclusive representative of the rank-and-file employees in said
organization unit.

D. Terms and Conditions of Employment in Government Services

Sec. 13.Terms and conditions of employment or improvements thereof, except those that are fixed
by law, may be the subject of negotiations between duly recognized employees' organizations and
appropriate government authorities.

VI. Peaceful Concerted Activities and Strikes

Sec. 14.The Civil Service laws and rules governing concerted activities and strikes in the government
service shall be observed, subject to any legislation that may be enacted by Congress.

VII. Public Sector Labor-Management Council

Sec. 15.A Public Sector Labor Management Council, hereinafter referred to as the Council, is hereby
constituted to be composed of the following:
1) Chairman, Civil Service Commission Chairman
2) Secretary, Department of Labor and Employment Vice Chairman
3) Secretary, Department of Finance Member
4) Secretary, Department of Justice Member
5) Secretary, Department of Budget and Management Member

The Council shall implement and administer the provisions of this Executive Order. For this purpose, the
Council shall promulgate the necessary rules and regulations to implement this Executive Order.

VIII. Settlement of Disputes

Sec. 16.The Civil Service and labor laws and procedures, whenever applicable, shall be followed in the
resolution of complaints, grievances and cases involving government employees. In case any dispute
remains unresolved after exhausting all the available remedies under existing laws and procedures, the
parties may jointly refer the dispute to the Council, for appropriate action.

Article 245. Ineligibility of managerial employees to join any labor organization; Right of
Supervisory Employees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective bargaining units and/or legitimate labor
organizations of their own. The rank-and-file union and the supervisors union operating within the same
establishment may join the same federation or national union. (As amended by Section 18, Republic Act
No. 6715, March 21, 1989 and Section 8, Republic Act No. 9481 which lapsed into law on May 25, 2007
and became effective on June 14, 2007).

Article 245-A. Effect of inclusion as members of employees outside the bargaining unit.
The inclusion as union members of employees outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are automatically deemed removed from the
list of membership of said union. (Introduced as new provision by Section 9, Republic Act No. 9481
which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Managers
Those who have authority to devise, implement and control strategic and operational policies

Supervisors
Those whose task is simply to ensure that such policies are carried out by the rank and file employess.
Limited discretion.

Article 212
(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees. Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but . All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of this Book.

Criteria of recommendatory power of a supervisor:


1) It is discretionary or judgmental not a routinary or clerical duty
2) Independent not directed by any other person
3) Effective, given particular weight in making management decisions

The criterion that differentiates a manager and supervisor from the rank and file is the ability to take part
in policy making. The latter is only given readymade policies to execute and standards practices to
observe

Characteristics of a managerial position:


1) He is not subject to the rigid observance of regular office hours
2) His work requires the consistent exercise of discretion and judgment in its performance
3) The output produced or the result accomplished cannot be standardized in relation to a given
period of time
4) He manages a customarily recognized department or subdivision thereof, customarily and
regularly directing the work of other employees
5) He either has the authority to hire or discharge other employees or his suggestions and
recommendations as to hiring and discharging are given particular weight
6) As a rule, he is not paid hourly wages nor subjected to maximum hours of work.

Metrolab Ruling
Due to the sensitivity of information handled by the confidential employees which in turn effectively
creates a great conflict of interest between that of their position and receiving benefits from union
negotiations the court has decreed that confidential employees are not only excluded from the closed shop
agreement but more importantly cannot join any union.

Confidential Employees:
Are those employees who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence are likewise privy to sensitive and highly
confidential records. As such the rationale behind their ineligibility of managerial employees to form,
assist or join labor unions equally applies to them.

Sugbuanon Rural Bank vs Laguesma

Art. 245 of the Labor Code11 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
Comment:
From the foregoing the recent definition of a confidential employee is an employee who in the normal
course of their duties they become aware of management policies relating to labor relations.

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

Requisites for a confidential employee status


1) That in the normal course of their duties they become aware of management policies
2) Such management policies must relate to labor relations between the management and the
employees.

Article 246. Non-abridgment of right to self-organization.


It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with
employees and workers in their exercise of the right to self-organization. Such right shall include the right
to form, join, or assist labor organizations for the purpose of collective bargaining through representatives
of their own choosing and to engage in lawful concerted activities for the same purpose or for their
mutual aid and protection, subject to the provisions of Article 264 of this Code. (As amended by Batas
Pambansa Bilang 70, May 1, 1980).

Article 247. Concept of unfair labor practice and procedure for prosecution thereof.
Unfair labor practices violate the constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-management relations.

Consequently, unfair labor practices are not only violations of the civil rights of both labor and
management but are also criminal offenses against the State which shall be subject to prosecution and
punishment as herein provided.

Subject to the exercise by the President or by the Secretary of Labor and Employment of the powers
vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases involving unfair labor
practices, which may include claims for actual, moral, exemplary and other forms of damages, attorneys
fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters. The Labor Arbiters
shall give utmost priority to the hearing and resolution of all cases involving unfair labor practices. They
shall resolve such cases within thirty (30) calendar days from the time they are submitted for decision.

Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code.

No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair
labor practice was committed, having been first obtained in the preceding paragraph. During the
pendency of such administrative proceeding, the running of the period of prescription of the criminal
offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in the
administrative proceedings shall not be binding in the criminal case nor be considered as evidence of guilt
but merely as proof of compliance of the requirements therein set forth. (As amended by Batas Pambansa
Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21,
1989).

Elements of ULP:
1) There is an E&E relationship
2) The act done is expressly defined in the code as an act of unfair labor practice

UNFAIR LABOR PRACTICES OF EMPLOYERS

Article 248. Unfair labor practices of employers.


It shall be unlawful for an employer to commit any of the following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an employee shall not join a labor
organization or shall with-draw from one to which he belongs;
(c) To contract out services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in this Code or in
any other law shall stop the parties from requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees who are already members of another
union at the time of the signing of the collective bargaining agreement. Employees of an appropriate
bargaining unit who are not members of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent, if such non-union members accept the benefits under the collective bargaining
agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of
this Code shall not apply to the non-members of the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or
being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorneys fees to the union or its officers or agents as part of the settlement of
any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations,
associations or partnerships who have actually participated in, authorized or ratified unfair labor practices
shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981).

Yellow-Dog Contracts
A yellow dog contract is an employment contract which prohibits an employee from joing a labor
organization or which requires him to withdraw from one to which he belongs. Yellow dog contract is
prohibited under Article 248(b) of the Labor Code.

Comment:

HSBC employee union vs NLRC, the SC has stated that the ULP enumerated under the labor code is not
exhaustive rather it leaves sufficient discretion in applying the laws general prohibitory language in light
of infinite combinations of events which may be charged as violative of its term.

9 ULP acts of an employer


1) Interference
2) Yellow dog
3) Contracting out
4) Company unionism
5) Discrimination for or against union membership
6) Discrimination because of testimony
7) Violation of duty to bargain
8) Paid negotiation
9) Gross violation of CBA (248 in conjunction with article 261)

Article. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.


The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.

Examples of interference
1) Interrogations
2) Prohibiting organizing activities
3) Violence or intimidations
4) Espionage and surveillance
5) Economic inducement
6) Totality of conduct doctrine
Expression of opinion by an employer, though innocent in themselves, frequently were held to be
culpable because of the circumstances under which they were uttered, the history of the particular
employers labor relations or anti-union bias or because of their connection with an established
collateral plan of coercion or interference.

Stated differently, the culpability of an employers remarks has to be evaluated not only on the
basis of their implicit implications, but in conjunction with collateral circumstances.

Again, an act to be characterized as a ULP, should be viewed not in isolation but in connection
with collateral circumstances.

7) Mass layoff
8) Lockout or closure of business
As a rule lockout or closure is a valid management prerogative so long it is done in good faith,
however if it is proved that the actual purpose of the employer in employing this means is to
interfere or to coerced the employees not to join a union by circumstantial evidence the employer
can then be held that his conduct constitutes ULP.

a. Sale in bad faith


The sale of a business enterprise to avoid the legal consequences of an unfair labor practice is
necessarily attended with bad faith and both the vendor and the vendee continue to be liable
to the affected workers.
b. Assumption of obligations by a new company
9) Successor employer; piercing the corporate veil
The separate juridical personality of a corporation shall be disregarded and shall be considered as
a mere associations of person if any of the following is present:
a. Defeat of public convenience as when the corporate fiction is used as a vehicle for the
evasion of an existing obligation;
b. Fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a
crime; or
c. Alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business
conduit of a person, or where the corporation is so organized and controlled and its affairs are
so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another
corporation

The test of interference


Whether the employer has engaged in conduct which it may reasonably said tends to interfere with the
free exercise of employees right. It is not necessary that there be direct evidence that any employee was
in fact intimidated or coerced by statements or threats of the employer if there is a reasonable inference
that the anti-union conduct of the employer does have an adverse effect on self-organization and
collective bargaining.

Comment:
If the employer performs act although a valid management prerogative but for the purpose of interfering
with the employees right to self-organization or the exercise thereof will constitute ULP since it is marked
with bad faith.

Runaway shop
The employer moves its business to another location or it temporarily closes its business for anti-union
purposes. In a sense it is the relocation of a business motivated by anti-union animus rather than for
business reasons.

Forms of company domination of union


1) Initiation of the company union idea
a. Outright formation by the employer by the employer or his representative
b. Employee formation on outright demand or influence by employer
c. Managerially motivated formation by employees
2) Financial support to the union
3) Employer encouragement and assistance
Immediately granting the union exclusive recognition as a bargaining agent without determining
whether the union represents the majority of employees is an illegal form of assistance amounting
to ULP
4) Supervisory assistance
This takes the form of soliciting membership, permitting union activities during working hours or
coercing employees to join the union by threats of dismissals or demotion.

Discrimination as ULP
In order for discrimination to constitute as ULP the discrimination it must be in regard to the hire or
tenure of employment or any term or condition of employment to encourage or discourage membership in
any labor organization.

Types of discrimination
1) Discrimination in Work quota
2) Discrimination in bonus allocation
3) Discrimination in layoff or dismissal
4) Discrimination in regularization
5) Discrimination by blacklisting
6) Indirect discrimination
7) Constructive discharge
Where the employer prohibits employees from exercising their rights under the act, on pain of
discharge, and the employee quits as a result of the prohibition, a constructive discharge occurs.

Test of discrimination
To determine whether or not a discharge is discriminatory, it is necessary that the underlying reason for
the discharge be established. Hence the fact that a valid ground exist to discharge an employee is not
justifiable where the discharge was actually motivated by his union activities. Although substantial
evidence is required to prove such a statement and the mere uncorroborated testimony of the employee is
not sufficient to overcome a valid ground for dismissal.

Comment:
The reason why union security clause is not an ULP is simply because, although it is a form of
discrimination it is valid because it is a discrimination favoring unionism.

Kinds of union security clauses


1) Closed shop
Only union member can be hired by the company and they must remain as union members to
retain employment in the company
2) Union shop
Non-members may be hired, but to retain employment they must become members of the union
within a certain period of time. The requirement applies to future and present employees
3) Modified union shop
Employees who are not union members at the time of signing of the contract need not join the
union, but all workers thereafter must join
4) Maintenance of membership shop
No employee is compelled to join the union, but all present or future members must, as a
condition of employment remain in good standing in the union
5) Exclusive bargaining shop
The union is recognized as the exclusive bargaining agent for all employees in the bargaining
unit, whether union members or not
6) Exclusive bargaining shop
The union is recognized as the exclusive bargaining agent for all employees in the bargaining
unit, whether union members or not
7) Bargaining for members only
The union is recognized as the bargaining agent only of its own members.
8) Agency shop/ treasury shop
An agreement whereby employees must either join the union or pay to the union as exclusive
bargaining agent a sum equal to that paid by the members.

Comment:
In order for a union security clause to be fully effective its terms must be explicit and without ambiguity
stating:
1) That the employer can only employ members of the union in good standing
2) That the failure of the member to join and maintain membership in good standing will result to
the termination of his employment.

If the erroneous dismissal was due to the insistence of the union to comply with the union security clause,
as a rule the employee is not liable if it has followed the procedural requirements and in case the dismissal
is overturned by the courts the employer will just be commanded to reinstate the employee but the
payment of Backwages and allowances connected thereto will be charged against the union. However If
the employer failed to follow procedural due process and/or acted in bad faith he shall be liable for both.
Hence the basic rule is that if the employer acted in good faith in dismissing the employee per the union
security clause he will not be liable for payment of Backwages and the corresponding allowances.

Closed shop agreements not applicable to:


1) Any employee who at the time the CSA takes effect is a bona fide member of religious
organization which prohibits its members from joining labor unions on religious grounds
2) Employees already in the service and already members of a labor union or unions other than the
majority union at the time the CSA took effect
3) Confidential employees who are excluded from the rank and file bargaining unit
4) Employees excluded from the CSA by express provision of the CBA

Comment:
Absent any provision to the contrary a CSA in a CBA applies only to persons to be hired or to employees
who are not yet members of any labor organization and that said provisions of the agreement are not
applicable to those already in the service at the time of execution.

Note must be taken that a provision in a CSA requiring non-member to quit all their affiliations with other
union/s and become members of the union in the CSA is null and void for being contrary to the
constitutional right of all employees to form, join or assist labor organizations of their own choosing.

Discrimination due to because of testimony


The reason why this act is considered an ULP is because the act of an employee even on his own when
pursuing a group interest such as testifying against the employer in a certification case is considered as a
concerted activity and is thereby protected by the right of an employee to engage in concerted activity, a
right included in the right to self-organization protected by the constitution and article 246 and 248.

It is a well settled rule that the retaliation against an employee for her refusal to testify in behalf of the
employer is an ULP since this act is a form of coercion by the employer preventing the employee to
exercise her right to concerted activity of her choosing. Further this prevents the employee from seeking
better terms of employment by concerted activity. Lastly the court has ruled that this situation is
analogous to the prohibit under article 248 against discrimination due to the giving of testimony.

Comment:
As a general rule violation of labor standards is not a strikeable offense however if the employer retaliates
against the complaining employees the same will constitute a ULP which is a strikeable offense under
article 263 of the LC.

Disestablishment order
Is an order by the court against the employer who has instituted a company dominated union, ordering the
employer to withdraw its recognition over the said union in such a manner where the employees of the
company shall know and understand the withdrawal of recognition. The employer is not however ordered
to liquidate the organization.

Comment:
ULP is not generally susceptible to compromise agreements since the relation between capital and labor is
not merely contractual but is impressed with public policy. However the SC has in case allowed such a
compromise under the reasoning that the agreement was voluntarily entered into and contained reasonable
provisions.

A suit for ULP must contain all ULP acts committed during the period at issue otherwise the union will be
held to be splitting their causes of action thereby giving justification for the dismissal of the subsequent
complaint.

Instances where the subordinates ULP acts can be imputed to the employer:
1) Knowledge by the employer of the employees acts and his failure to prevent continuation of
course of conduct or failure to renounce any connection or affinity therewith.
2) Continuity of open and improper conduct by an employee creates a presumption that the
employer knows of such infraction and allows its continuity
3) Employers past policy and attitude
The past policy and attitude of the employer taken together with the supervisors ULP acts is an
indication of a concert of effort between the two.

UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS

Article 249. Unfair labor practices of labor organizations.


It shall be unfair labor practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention
of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization has been
denied or to terminate an employee on any ground other than the usual terms and conditions under
which membership or continuation of membership is made available to other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or
other things of value, in the nature of an exaction, for services which are not performed or not to be
performed, including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorneys fees from employers as part of the settlement of any
issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers, members of governing
boards, representatives or agents or members of labor associations or organizations who have actually
participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As amended
by Batas Pambansa Bilang 130, August 21, 1981).

Comment:
The omission of the word interference in the definition of the ULP acts committed by the union is
purposefully made in order to allow the unions to interfere with the employees right to self organization
however such interference must not be in such a manner or such an extent to be considered as restraint or
coercion since this in turn would constitute ULP. (campaigning, union security clause)

Samples of coercion
1) Threats of bodily harm in the event that the employee refuses to join a strike.

Comment:
The union may not exercise its union security clause in an arbitrary manner as the same will constitute
ULP on the union and thereby hold it liable exclusively for payment of Backwages and the applicable
allowances if the union has succeeded in having the employee terminated. Note however this is plausible
only when the owner is free from bad faith and has complied with procedural due process.

SCB vs SOLE

Surface bargaining
Is defined as going through the motions of negotiating without any legal intent to reach an agreement
Surface bargaining is defined as "going through the motions of negotiating" without any legal
intent to reach an agreement.50 The resolution of surface bargaining allegations never presents an
easy issue. The determination of whether a party has engaged in unlawful surface bargaining is
usually a difficult one because it involves, at bottom, a question of the intent of the party in
question, and usually such intent can only be inferred from the totality of the challenged partys
conduct both at and away from the bargaining table.51 It involves the question of whether an
employers conduct demonstrates an unwillingness to bargain in good faith or is merely hard
bargaining.

Blue-sky bargainaing
Means making exaggerated or unreasonable proposals

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or
making exaggerated or unreasonable proposals. The Bank failed to show that the economic
demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show
that the Union based its economic proposals on data of rank and file employees and the prevailing
economic benefits received by bank employees from other foreign banks doing business in the
Philippines and other branches of the Bank in the Asian region.

Note:
The refusal of the employer to furnish financial data in instance specified by the code constitutes as ulp
for refusal to bargain. However such a situation is not applicable in instances where the request of the
union was never reduced in writing as required by the law.

Note:
In ULP cases the union has the burden of proof in proving that the acts of the employer is a ulp under the
code.

COLLECTIVE BARGAINING AND


ADMINISTRATION OF AGREEMENTS

Article 250. Procedure in collective bargaining.


The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party
with a statement of its proposals. The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice;
(b) Should differences arise on the basis of such notice and reply, either party may request for a
conference which shall begin not later than ten (10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its
own initiative and immediately call the parties to conciliation meetings. The Board shall have the
power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty
of the parties to participate fully and promptly in the conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which
may disrupt or impede the early settlement of the disputes; and
(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their
case to a voluntary arbitrator. (As amended by Section 20, Republic Act No. 6715, March 21, 1989).

Article 251. Duty to bargain collectively in the absence of collective bargaining agreements.
In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner
of collective bargaining, it shall be the duty of employer and the representatives of the employees to
bargain collectively in accordance with the provisions of this Code.

4 stages/process of CB
1) Negotiations between representative of the management and the union over wages, hours and
other terms of employment
2) Execution of a written contract embodying the terms agreed upon
3) Negotiations of any questions arising as to the interpretation or application of the contract
4) Negotiations over the terms of a new contract or proposed modifications, when an existing
agreement is validly opened for negotiations.

Comment:
The parties to a CBA are the employer and the employees, the latter is usually represented by their
bargaining agent (which must be an LLO) which in turn acts through its agents, who does not need to be
an employee of the other, the only requirement is that the latter is duly authorized by the employees.

Jurisdictional preconditions of CBA


1) Possession of the majority representation of the employees representative in accordance with any
of the means of selection or designation provided for by the LC
2) Proof of majority representation
3) Demand to bargain under article 250 (a) of the LC

Comment:
The employer is not under legal duty to initiate contact bargaining. The duty to bargain only arises upon
the written demand of the bargaining representative to bargain with the employer, who in turn must
respond within 10 days.

Comment:
The employer has the right to demand the union to provide proof of its majority representation and unless
the union submits, the employer cannot be made to bargain. Note that the demand by the employer must
be made in good faith and not a dilatory act, otherwise it would constitute as an ULP for refusal to
bargain.
The same rule applies when the employer decides to bargain with a minority union despite the existence
of a majority union.

Certification year
The period in time when all the jurisdiction preconditions of a CBA is present

Article 252. Meaning of duty to bargain collectively.


The duty to bargain collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including proposals for adjusting
any grievances or questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to a proposal or
to make any concession.

Article 253. Duty to bargain collectively when there exists a collective bargaining agreement.
When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that
neither party shall terminate nor modify such agreement during its lifetime. However, either party can
serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties.

Comment:
Absent any notice to terminate or to renegotiate the CBA within the 60 day period prior to the expiration
of the term of the CBA, the law dictates that the said CBA shall automatically be renewed. The renewal
covers all the provisions of the CBA since the law itself does not provide exceptions or qualifications.

4 forms of ULP in bargaining


1) Failure to meet and convene
2) Evading mandatory subjects of bargaining
3) Bad faith bargaining, including refusal to execute the CBA agreement, if requested
4) Gross violation of the CBA

Comment:
The filing of a petition to cancel the certification of the union is not a prejudicial question which must be
settled before bargaining may commence since unless an order of revocation of certification or
registration is issued the LLOs status as the certified bargaining agent subsist and the corresponding duty
of the employer to bargain corollary subsists.

Comment:
A request by the employer to remove any of the panel of negotiators of the union is not necessarily a ULP
act however when such request constitutes as coercion for the purpose of securing adverse agreements
with the union supported by substantial evidence, the facts constitutes as ULP. But where the request is
merely a request without pain of reprisals or refusal to bargain until accommodates, does not by itself
constitute a ULP act but a part of normal friendly negotiations.

Comment:
The SC has held in several decisions that the employers failure to reply to a demand for collective
bargaining done in bad faith is sufficient grounds for the court to impose upon the employer the CBA
proposal submitted by the union, assuming arguendo that all jurisdictional precondition of collective
bargaining has been complied with.

Comment:
With the second kind of ULP of refusal to bargain, the employer and the union is statutorily bound to
bargain over matters concerning employment terms and conditions and neither party can refuse to tackle
the same when requested by the other. However with respect to the other terms, either parties can lawfully
refuse to agree or altogether refuse to bargain over such matters.

Note must be taken in order for an issue become a mandatory subject of bargaining it must be shown that
the issue must materially or significantly affect the terms and conditions of employment and not a mere
incidental effect.

Examples of mandatory subjects:


1) Wages and other types of compensation, including merit increases
2) Working hours and working days, including work shifts
3) Vacation and holidays
4) Bonuses
5) Pensions and retirement plans
6) Seniority
7) Transfer
8) Lay-offs
9) Employee workloads
10) Work rules and regulations
11) Rent of company houses
12) Union security arrangements

Bargaining impasse
Exist where good faith bargaining on both parties has failed to resolve the issue and there are no definite
plans for further efforts to break the dead lock such as in situations where a substantial change in the
bargaining position of one party is necessary to break an existing impasse so as to render the other partys
subsequent refusal to meet and bargain unlawful.

Bargaining in good faith


It requires a sincere effort to reach an agreement, more than a sterile and repetitive discussion of
formalities precluding actual negotiations, although it does not require agreement itself.
As a ground for ULP, any act that constitutes as bargaining in bad faith must be instituted while the
negotiations are occurring or during its impasse since if it was submitted post negotiations it has been
held as futile by the courts because the executed serves as proof that both parties voluntarily came to an
agreement regarding its content and therefore serves as proof that the employer exerted reasonable effort
of good faith bargaining.

Comment:
The failure to respond to the counter-proposal of the union within the time prescribed by law is an
indication of bad faith

Badges of bargaining in bad faith


1) Unwarranted delays or dilatory tactics
2) Surface bargaining
Precludes holistic point of view in entering negotiations to take it or leave it approach, since
under this concept a party does not really intend to negotiate at all but plans to go through the
motions of negotiating
3) Inflexible demands; strike amid negotiations
4) Boulwarism or Boulware approach
The central tenet is that the product or firm, fair offer must be marketed vigorously to the
employees to convince them that the company, and not the union is their true representative. It is
the refusal to bargain with the union but the effort to sell their proposal directly to the employees
by by-passing the union and to their detriment.

Steps in bargaining:
1) Demand to negotiate
2) Negotiation
3) Ratification
4) Execution
5) Registration
6) Implementation

Ratification
The proper ratifying group is not just the majority union but the majority of all workers in the bargaining
unit represented in the negotiation.
Requirements of a valid ratification
1) Posting of the CBA in 2 conspicuous places for five days
2) Ratification by at least majority members of the bargaining unit of the proposed CBA
3) Submission of 5 signed copies to the BLR accompanied by proofs of compliance of the first two
requisites by a statement certified under oath by the secretary to that effect and attested to by the
president.
Comment:
Failure to register the CBA with the BLR does not render it invalid or unenforceable, its non-registration,
however, renders the contract bar rule inoperative. Hence a union security clause of an unregistered CBA
is binding, thus an employee may be dismissed for acts of disloyalty despite the laws allowance of a
certification election even outside the freedom period.

Contract bar rule:


The Contract Bar Rule is a rule that a valid and existing collective bargaining agreement is a bar to a
petition for certification election.

Exceptions to the contract bar rule:


(a) If the petition is made within 60 days before the expiration of the CBA, known as the "freedom
period
(b) If the CBA is defective or inadequate in substance, as where it does not fulfill the legal requirements
of providing for a grievance machinery or voluntary arbitration
(c) If it has not fulfilled the formal requirements for registration with the Bureau or the Regional Office
of the DOLE, which requirements are held to be mandatory

Comment:
Ratification of the CBA by the BU is not required where the CBA is a product of voluntary arbitration or
as a result of mandatory arbitration by the NLRC as certified by the SOLE. However the posting
requirement still subsist in order to appraise the employees of its content and not for appropriate
ratification.

If the CBA was validly ratified by the employees the fact that the appropriate union officers fail to sign it
was declared by the court to be of no moment since the actual signing thereof is a mere mechanical act
and its absence shall not invalidate the voluntary agreement of the parties as ratified by the bargaining
unit concerned.

If the CBA was not duly ratified but was implemented and the employees covered enjoyed its benefits,
the same employees are already estopped from questioning its validity since it would be an iniquitous that
they have already enjoyed its benefits and later question its validity.

Zipper clause
A zipper clause is a clause in an employment agreement or in the CBA in which both parties waive the
right to demand bargaining on any matter not dealt with in the contract, regardless of whether that matter
was contemplated when the contract/CBA was negotiated or signed.

Article 253-A. Terms of a collective bargaining agreement.


Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation
aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period immediately before the date of
expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution.
Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six
(6) months from the date of expiry of the term of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement
is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case
of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their
rights under this Code. (As amended by Section 21, Republic Act No. 6715, March 21, 1989).

Comment:
Rules regarding effectivity date of a CBA
1) If it is the first CBA, the effectivity date is the date agreed upon by the parties
2) If is a subsequent CBA:
a. If the new CBA was finalized within 6 months from the expiration date of the previous
CBA, the law provides that the effective date shall retroact to the date after the last day of
effectivity of the previous CBA
b. If the new CBA was finalized after 6 months from the expiration date of the previous
CBA the law grants the parties to negotiate as to the retroactivity and duration thereof.
3) The date of conclusion or the operative date is the date the parties actually agreed upon the
provisions of the CBA and not the date of signature.
4) A resulting CBA issued as a result of a mandatory or voluntary arbitration, the effective date of
which absent any agreement by the parties to the contrary may be decided upon by the arbitrator
or the SOL since the provision of law granting discretion is not a limitation of the powers of the
arbitrators.

Rules as to durations
1) The majority status of the union who secured the CBA shall be for a period of 5 years and no
certification election or challenge to its status shall be allowed except during the freedom period
of 60 days before the expiration of the 5 year term
2) The other provisions except that of the representative aspect shall last for a period of 3 years only.

Comment:
1) A spun off of a division to a new separate corporation or entity if done in good faith will sever the
relation of the employees from the bargaining unit they were once part of, thereby giving them a
right to form or join a new union or maintain their membership ambit form part of a different
bargaining unit.

Comment:
The five year period is applicable only when there is an existing CBA.

Article 254. Injunction prohibited.


No temporary or permanent injunction or restraining order in any case involving or growing out of labor
disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264
of this Code. (As amended by Batas Pambansa Bilang 227, June 1, 1982).

Comment:
In the event that neutral employers seeks protection from the regular courts to protects its employees
from coming in to work from employees of other employers whose property is situated in the same area is
appropriate since there is in fact no labor dispute between the neutral employer and the striking emloyees.

Article 255. Exclusive bargaining representation and workers participation in policy and decision-
making.

The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees shall have the
right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules
and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and
decision-making processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor-management
councils shall be elected by at least the majority of all employees in said establishment. (As amended by
Section 22, Republic Act No. 6715, March 21, 1989).

Collective Bargaining Unit


Refers to a group of employees sharing mutual interest within a given employer unit, comprised of all or
less than all of the entire body of employees in the employer unit or any specific occupational or
geographical grouping within such employer unit.

Factors affecting mutuality of interest:


1) Similarity in the scale and manner of determining earnings
2) Similarity in employment benefits, hours of work and other terms and conditions of employment
3) Similarity in the kinds of work performed
4) Similarity in the qualifications, skills and training of employees
5) Frequency of contract or interchange amoung the empoyees
6) Geographic proximity
7) Continuity or integration of production processes
8) Common supervision and determination of labor-relations policy
9) History of collective bargaining
10) Desires of affected employees otherwise known as the globe doctrine.
The court ruled that considerations as to the inclusion or non-inclusion is evenly balanced the
desire of the employees should be taken into account as to the determination if the said
employees can appropriately included in a single CBU
11) Extent of union organization.

Importance in determining the appropriate CBU:


1) The employees who can vote in the certification elections
2) The employees to be represented in bargaining with the employer
3) The employees who will be covered by the resulting CBA

CBU vs Union:
1) In certification elections, the voters are the CBU whether unionized or not.
2) In ratification of the CBA, the voters are the entire CBU not just the union
3) In strike voters, the voters are the member of the union, not all of the unit

Article 256. Representation Issue in Organized Establishments.


In organized establishments, when a verified petition questioning the majority status of the incumbent
bargaining agent is filed by any legitimate labor organization including a national union or federation
which has already issued a charter certificate to its local chapter participating in the certification election
or a local chapter which has been issued a charter certificate by the national union or federation before the
Department of Labor and Employment within the sixty (60)-day period before the expiration of the
collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot
when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all
the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining
unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their
votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an election which provides for three or more choices
results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted
between the labor unions receiving the two highest number of votes: Provided, That the total number of
votes for all contending unions is at least fifty percent (50%) of the number of votes cast. In cases where
the petition was filed by a national union or federation, it shall not be required to disclose the names of
the local chapters officers and members.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of
the incumbent bargaining agent where no petition for certification election is filed. (As amended by
Section 23, Republic Act No. 6715, March 21, 1989 and Section 10, Republic Act No. 9481 which lapsed
into law on May 25, 2007 and became effective on June 14, 2007).

Article 257. Petitions in Unorganized Establishments.


In any establishment where there is no certified bargaining agent, a certification election shall
automatically be conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor
organization, including a national union or federation which has already issued a charter certificate to its
1ocal/chapter participating in the certification election or a local/chapter which has been issued a charter
certificate by the national union or federation. In cases where the petition was filed by a national union or
federation, it shall not be required to disclose the names of the local chapters officers and members. (As
amended by Section 24, Republic Act No. 6715, March 21, 1989 and Section 11, Republic Act No. 9481
which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Article 258. When an employer may file petition.


When requested to bargain collectively, an employer may petition the Bureau for an election. If there is
no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a
certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and
regulations prescribed by the Secretary of Labor.

Article 258-A. Employer as Bystander.


In all cases, whether the petition for certification election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party thereto with a concomitant right to oppose a
petition for certification election. The employers participation in such proceedings shall be limited to:

(1) being notified or informed of petitions of such nature; and

(2) submitting the list of employees during the pre-election conference should the Med-Arbiter act
favorably on the petition. (As amended by Section 12, Republic Act No. 9481 which lapsed into law on
May 25, 2007 and became effective on June 14, 2007).

Article 259. Appeal from certification election orders.


Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter
directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts
thereof established by the Secretary of Labor and Employment for the conduct of the election have been
violated. Such appeal shall be decided within fifteen (15) calendar days. (As amended by Section 25,
Republic Act No. 6715, March 21, 1989)

Comment:

Exclusive bargaining agent


Means any LLO duly recognized or certified as the sole and exclusive bargaining representative of all
employees in a bargaining unit.
Comment:
Voluntary recognition by an employer of a union as a bargaining representative is only allowable in in
unorganized establishment and a certification election or the like is required in an organized
establishment.

In order for the LLO to ask for a certification election the petition must have the written support of at
least 25% of the the employees in the bargaining unit concerned.

Organized establishment
Refers to an enterprise where there exists a recognized or certified sole and exclusive bargaining agent
Unorganized establishment
Refers to an establishment where no union has yet been recognized or certified as the bargaining
representative.

3 methods in determining the bargaining representative:


1) Voluntary recognition (VR)
2) Certification election with or without run off elections
3) Consent elections.

Conditions of a valid VR
1) The establishment is unorganized establishment since in an organized establishment the employer
is required by article 256 to continue to recognize the current bargaining agent until it has been
properly replaced according to law.
2) Only one union is asking for recognition
3) The union voluntarily recognized should be the majority union.

DO 40-03

RULE VII
VOLUNTARY RECOGNITION
Section 1. When and where to file.
In unorganized establishments with only one legitimate labor organization, the employer may voluntarily
recognize the representation status of such a union. Within thirty (30) days from such recognition, the
employer and union shall submit a notice of voluntary recognition with the Regional Office which issued
the recognized labor union's certificate of registration or certificate of creation of a chartered local.

Section 2. Requirements for voluntary recognition.


The notice of voluntary recognition shall be accompanied by the original copy and two (2) duplicate
copies of the following documents:
(a) a joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition;
(b) certificate of posting of the joint statement of voluntary recognition for fifteen (15) consecutive days
in at least two (2) conspicuous places in the establishment or bargaining unit where the union seeks to
operate;
(c) the approximate number of employees in the bargaining unit, accompanied by the names of those
who support the voluntary recognition comprising at least a majority of the members of the
bargaining unit; and
(d) a statement that the labor union is the only legitimate labor organization operating within the
bargaining unit.

All accompanying documents of the notice for voluntary recognition shall be certified under oath by the
employer representative and president of the recognized labor union.

Section 3. Action on the Notice.


Where the notice of voluntary recognition is sufficient in form, number and substance and where there is
no other registered labor union operating within the bargaining unit concerned, the Regional Office,
through the Labor Relations Division shall, within ten (10) days from receipt of the notice, record the fact
of voluntary recognition in its roster of legitimate labor unions and notify the labor union concerned.

Where the notice of voluntary recognition is insufficient in form, number and substance, the Regional
Office shall, within the same period, notify the labor union of its findings and advise it to comply with the
necessary requirements. Where neither the employer nor the labor union failed to complete the
requirements for voluntary recognition under Section 2 of this Rule within thirty (30) days from receipt of
the advisory, the Regional Office shall return the notice for voluntary recognition together with all its
accompanying documents without prejudice to its re-submission.

Section 4. Effect of recording of fact of voluntary recognition.


From the time of recording of voluntary recognition, the recognized labor union shall enjoy the rights,
privileges and obligations of an existing bargaining agent of all the employees in the bargaining unit.
Entry of voluntary recognition shall bar the filing of a petition for certification election by any labor
organization for a period of one (1) year from the date of entry of voluntary recognition. Upon expiration
of this one-year period, any legitimate labor organization may file a petition for certification election in
the same bargaining unit represented by the voluntarily recognized union, unless a collective bargaining
agreement between the employer and voluntarily recognized labor union was executed and registered
with the Regional Office in accordance with Rule XVII of these Rules.

Certification Election

Certification election
Is the process of determining through secret ballot the sole and exclusive representative of the employees
in an appropriate bargaining unit, for purpose of collective bargaining or negotiation.

2 issues involved in certification elections:


1) proper composition and constituency of the bargaining unit
2) veracity of majority membership claims of the competing unions so as to identify the one union
that will serve as the bargaining representative of the entire bargaining unit

12 month bar
No PCE may be filed within 12 months from the date of a valid certification, consent, or run-off election
or from the date of entry of a voluntary recognition of the union by the employer. Note that this
prohibition applies even if no union won the CE since the prohibition is with respect to the holding of an
CE.

Union elections
Is an election held to determine who shall be the officers of the union concerned in accordance with its
by-laws and constitution, hence if the CBL allows non-members may be allowed to vote. Unlike in CE
non-union members so long as they are part of the CBU are always allowed to vote.
Comment:
The amendment of article 257 has the effect of proscribing direct certification where there are competing
unions, the correct manner in determining the BR is via certification election or consent elections

The employers rights to participate in a CE are limited to:


1) to be notified or informed of petitions of such nature
2) Submit a list of employees during the pre-election conference should the med-arbiter act
favorably on the petition.

Comment:
Once a PCE has been filed the other unions seeking certification may file an intervention provided that
they comply with the same requirements of that union who filed the PCE.

Limitations when to file a PCE:

Section 3. When to file.


A petition for certification election may be filed anytime, except:
(a) when a fact of voluntary recognition has been entered or a valid certification, consent or run-off
election has been conducted within the bargaining unit within one (1) year prior to the filing of the
petition for certification election. Where an appeal has been filed from the order of the Med-Arbiter
certifying the results of the election, the running of the one year period shall be suspended until the
decision on the appeal has become final and executory;
(b) when the duly certified union has commenced and sustained negotiations in good faith with the
employer in accordance with Article 250 of the Labor Code within the one year period referred to in
the immediately preceding paragraph;
(c) when a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been
submitted to conciliation or arbitration or had become the subject of a valid notice of strike or
lockout;
(d) when a collective bargaining agreement between the employer and a duly recognized or certified
bargaining agent has been registered in accordance with Article 231 of the Labor Code. Where such
collective bargaining agreement is registered, the petition may be filed only within sixty (60) days
prior to its expiry.

Comment:
In a PCE the order or decision granting the PCE must be rendered after the freedom period to allow any
other qualified union to file a PCE or an intervention. The decision of the med-arbiter to allow or deny a
CE is appealable to the SOLE. Note must be taken that an order granting a PCE in an ununionized
enterprise is not appealable save that of rule 65.

8 grounds for denial of PCE:


1) non-appearance of the petitioner for 2 consecutive scheduled conference before the med-arbiter
despite due notice
2) illegitimacy/unregistered union.
3) Failure of the federation/national union or the local chapter to submit a duly issued charter
certificate upon filing of the petition for election
4) Absent of employment relationship
5) Election bar (12 month bar rule)
6) Election bar due to negotiation or deadlock
when the duly certified union has commenced and sustained negotiations in good faith with the
employer in accordance with Article 250 of the Labor Code within the one year period referred to
in the immediately preceding paragraph; when a bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or lockout;
7) Election bar existing CBA
Filing the petition before or after the freedom period
8) Lack of support
Failure of the petitioning union to submit the 12% signature requirement to support the filing of
the PCE

Comment:
With respect to ground number 2, the mere filing of a petition to cancel the certification of an LLO is not
sufficient ground to suspend or dismiss a PCE since it is not a prejudicial question as the name entails.
The only instance where the law allows dismissal is if the certification of the union has been revoked or
cancelled with finality

Comment:
Once a union has been elected to be the CB agent it must conclude a CBA within the 12 month period
otherwise it may be considered as a tool of management. However when the failure to conclude a CBA is
not due to the unions fault but on the employer, the same shall not be a ground to institute another PCE
since this form constitute a analogous situation with a deadlock bar.

Exceptions to the 12 month bar


1. When the failure to conclude a CBA was due to the fault of the employer ( the bar may exceed 12
months)
2. When there was a failure of election because less than majority of the CBU voted, in this case another
PCE may be granted
3. If there election held was invalid, a new PCA may be granted within the period
4. An election may be granted where a unit of employees newly created by combining employees not
previously considered as one unit, hence employees who voted as part of one bargaining unit may
find themselves involved in an election encompassing a larger group of employees established as a
different CBU.
5. When some of the members of the CBU were not given notice and opportunity to vote in the prior
election.
6. The bar does not apply to a unit clarification petition filed during the certification year.
Comment:
The SC ruled that in the case where the no union choice won within a CE, subsequently within the 12
month bar the employer recognized a union and concluded a CBA with it constituted a violation of the 12
bar rule under the reasoning that the court highly doubted the independence and probity of the said union.

Comment:
In order for the deadlock bar to come into play the deadlock must be genuine and not a drama. Deadlock
is a question of fact

Indicators of a genuine deadlock


1. When the deadlock was submitted to a third party conciliator or arbitrator
2. Where the deadlock is subject to a valid notice of strike or lockout

Freedom period vs notice period


The former refers to the 60 day period at the end of the representation provisions in the CBA usually at
the end of the 5th year. During the same 60 day period a PCE may be held if warranted by the
circumstances. Whereas the notice period of 60 days refers to the period of time where the non-
representational provisions is about to expire which usually is on or just before the 3 rd year of the CBA. In
sum the distinction is the freedom period is viewed as a political event upon which a new BA may be
elected by virtue of a PCE whereas the renegotiation notice period is an economic activity where the
non-representational provisions of the CBA may be amended, repealed or extended dependent on the will
of the parties.

Grounds not appropriate to dismiss a PCE


1) Commingling
Since the law automatically removes from the list of members of the CBU those who are not part
of the CBU
2) Validity or registration
Since PCE shall continue until the registration of the LLO is deemed invalid by the BLR. Note
that the absence of registration is an appropriate ground for dismissal

Comment:
The med-arbiter and the SOLE in deciding the PCE has adequate authority to determine the existence of a
E&E relationship since it is an integral part thereof.

Employees who can vote in a CE


1. Employees who are members of the CBU
2. Terminated employees whose termination is still pending litigation
3. Probationary employees
4. Contested employees. However their votes shall be segregated and not counted but sealed in an
envelope for determination.
5. Non-members of union.
A contrary stipulation is void since the actual purpose of a CE is to determine the actual will of the
majority and if the majority wills the no union choice the same must be respected.

Steps post granting of the PCE


1. The med arbiter shall rule upon the petition stating:
a. The name of the employer or establishment
b. The description of the BU
c. Statement that none of the grounds to dismiss as enumerated by law exists
d. The names of contending LLO
e. Require a local chapter, if any, to submit to the election officer its certificate of creation
otherwise it shall be DQ to participate in the CE
f. A directive upon the Employer and contending unions to submit within 10 days from
receipt of order, the certified list of employees in the BU, or where necessary, the payrolls
covering the member of the BU for the last 3 months prior to issuance of the order
2. If an appeal has been made, the same must be decided upon prior to the holding of the CE
3. Within 24 hours from receipt of final order, the regional director shall cause the raffle of the case
to an election officer who shall have control of the pre-election conference and election
proceedings
4. Within w4 hours from receipt by the EO of the assignment he shall cause the issuance of notice of
pre-election conference to the contending unions, which shall be scheduled within 10 days from
assignment.
5. The pre-election conference shall set the mechanics for the election and determine, among others
the following:
a. Date, time and place of the election which must be:
i. Not later than 45 days from the first election conference
ii. On a regular work day within the employers premises unless circumstance
require otherwise
b. List of eligible voters
c. Number and location of polling booths and number of ballot to be prepared
d. Name of watchers or representative and their alternatives for each of the unions during
elections
e. Mechanics and guidelines of the election
6. Failure to attend the pre-election conference shall be deemed a waiver to be present and be heard
therein. However such waiver shall not extend to the right of the absent union for future notices
7. Notice of the date of election shall be made at least 10 days prior to the election and posted in at
least 2 conspicuous place within the company premises.
8. The notice shall contain
a. Date and time of elections
b. Names of contending unions
c. Description of the bargaining unit and the list of eligible and challenged voters.

Comment:
The EO may rule on matters pertinent to the elections on the same time however he has no authority to
rule on the acceptability of the challenged votes which shall be decided upon by the med-arbiter provided
that the number of votes will materially alter the results of the election

Protest when filed


Protest based on the conduct of elections shall be recorded in the minutes of the election proceedings.
Protest not so raised are deemed waived. The protesting party must formalize their protest by filing with
the med arbiter their protest specifying the grounds, arguments and evidence it has within 5 days from the
close of the election proceeding. If not recorded in the minutes and formalized within 5 days thereof, the
protest shall be deemed dropped.

Comment:
Failure of election shall result when less than majority of the eligible voters cast their votes in the
election.

Effect of Failure of election


A failure of election shall not bar another CE within the period of 6 months provided that it is upon
motion by any party to be decided upon within 15 days thereof and that notice of CE shall be made at
least 10 days from the date of the elections and posted in at least 2 conspicuous place in the premises of
the employer.

Proclamation
Within 24 hours from the final canvass of votes, there being a valid election, the EO shall transmit the
records of the case to the Med-Arbiter who shaoll, within the period from receipt of the minutes and
results of the election, issue an order proclaiming the results of the election certifying the union which
obtained a majority of the valid votes casts as the sole bargaining representative under the following
conditions:
1. No valid or perfected protest was filed
2. No challenge or eligibility issue was raised. Even if there was if the said issue is not sufficient to alter
the result of the election.

Elements of Run-off election


1. A valid election was held because Majority of the BU casted their votes in the election
2. There are 3 or more contending unions
3. None of the unions received majority of the votes in the election
4. That the total number of votes for all the union is at least 50% of the votes cast.
5. There are no objections nor challenges which if sustained would materially alter the results.

Comment
If all the above is present the EO shall Motu Proprio conduct a run-off election within 10 days from the
close of the election proceedings between the labor unions receiving the 2 highest number of votes. No
Union shall not be a choice in the run-off election. The notice of run-off election shall be made at least 5
days before the actual run-off election.
Comment:
In case there is a tie between the second highest votes all of them as well as the highest voted union shall
participate in the run-off election since the contest is not between 2 unions but between the 2 highest
votes received.

Consent Election
Is an election to determine who is the appropriate bargaining unit via election voluntarily agreed upon by
the contending unions without the intervention of the department. In this situation:
1. Upon filing of the CE, the parties subsequently agreed to hold a consent election. The Med-
Arbiter concerned shall enter into the minutes of the hearing or preliminary conference the fact of
agreement and then cause the immediate scheduling of the pre-election conference. The minutes
should be signed by the unions attested to by the MA.
2. Without filing a CE but upon agreement between the parties seeking intercession by the regional
office

The MA shall immediately transmit the record to the director or his authorized representative for the
purpose of determination of the EO by raffle in the presence of the unions of they so desire. Then the
process shall be the same with a CE.

Rights of the minority union


1) The employer nor the majority union cannot abridge their right to self organization.
2) Right to present grievance to their employer
3) To complain of ULP

Comment:
Retired members may still be represented by the Union in litigation if the basis of their cause of action is
the rights given by their CBA or by law during their employment. The SC deems them an employee
entitled to the protection of the labor code, for the purpose of prosecuting their claim

GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION

Article. 260. Grievance machinery and voluntary arbitration.


The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the
mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and
resolution of grievances arising from the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days
from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or
panel of Arbitrators has been selected by the parties as described above.

Comment:
The benefits secured via CBA shall enure to the benefit of all the members of the CBU. If otherwise, there
must be a valid reason therefore otherwise it would result to discrimination

General Rule:
A bona fide purchaser of assets of an employer is not bound by the CBA and the latter is not enforceable
against it since labor contracts are in personam hence binding only between the parties. Further, a labor
contract at best only creates an action in personam and does not create any real rights which should be
respected by third parties.

Exceptions:
1. When the sale is clothed in bad faith
2. When there there are grounds to pierce the corporate veil
3. When the act constitutes ULP

Note:
VA is a master procedure, meaning all labor disputes may be submitted to it for resolution subject to the
consent of the parties save for the following which must be resolved by the VA:
1) All unresolved grievances arising from interpretation or implementation of the Collective
Bargaining Agreement
2) Unresolved grievances arising from the interpretation or enforcement of company personnel
policies
3) CBA violations not constituting ULP
4) interpretation or implementation of the productivity incentives program (RA 6971)
5) all other matters voluntarily agreed upon by the parties in the CBA or subsequently thereof.
Note:
The submission of the parties to a VA removes the jurisdiction of the LA or NLRC even if certified to the
latter by the SOLE.

Temporary Arbitrator
Is a VA which has been chosen to settle a dispute already in existence with no requirement to re-appoint
him in future conflicts.

Permanent arbitrator
Is selected before a dispute arises, usually during the CBA negotiations. He is to serve for a period of time
usually during the lifetime of the CBA rather than a single controversy.
Article. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to
hear and decide all unresolved grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.

Article. 262. Jurisdiction over other labor disputes.


The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear
and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

Comment:
In order for the LA be ousted from jurisdiction to hear an illegal termination clause by reason of a CBA
provision, the CBA must unequivocally or explicitly state that terminations should be submitted to the
grievance machinery.

Further, by the language of article 260, the parties to the dispute has to be the Union and the employer
hence in situations where the complainant or the other party is not a member of the union in such a degree
that the employer and the union stands united against the employee the grievance machinery should not
be availed of since the same is a creation and the parties therein are appointed by the employer and the
union, hence to submit the dispute to them would violate the due process right of the employee since the
union and employer would be the judge and prosecutor at the same time.

Finally, only unresolved grievances can be subject of the grievance machinery, the termination of an
employee is no longer an unresolved grievance since he has been terminated already hence he can secure
assistance of the LA.

Other cases covered by the VA (RA 6971)- sabi ni azucena pati wage orders
Section 9. Disputes and Grievances.
Whenever disputes, grievances, or other matters arise from the interpretation or implementation of the
productivity incentives program, the labor-management committee shall meet to resolve the dispute, and
may seek the assistance of the National Conciliation and Mediation Board of the Department of Labor
and Employment for such purpose. Any dispute which remains unresolved within twenty (20) days from
the time of its submission to the labor-management committee shall be submitted for voluntary arbitration
in line with the pertinent of the Labor Code, as amended.
The productivity incentives program shall include the name(s) of the voluntary arbitrator or panel of
voluntary arbitrators previously chosen and agreed upon by the labor-management committee.

Note:
That NLRC, its regional branches and regional directors of the DOLE shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the VA provided in the CBA.

2 ways to initiate VA
1) Submission
It is where there is no previous agreement to arbitrate. It must be signed by both parties
describing the facts of the controversy, stating the VA and enumerating his powers or the limts
thereof.
2) By demand or notice
This is a unilateral act by a party by serving a written notice of intent to arbitrate, seeking to
enforce an arbitration clause found in the CBA regarding the present dispute falling under those
mentioned in the arbitration clause, if any.

Comment:
The VA has authority to determine the limits of his power based on the submission provided. He may
deem to determine issues that are necessarily included in the issues framed by the parties subject only to
reason and thereafter certiorari. Note must be taken that the purpose of the VA is fully settle the dispute or
controversy.

General rule; authority of the VA covers:


1. General authority to investigate and hear the case upon notice to the parties and to render an
award based on the contract and record of the case
2. Incidental authority to perform all acts, necessary to an adequate discharge of his duties and
responsibilities like setting and conduct of hearing, attendance of witnesses and production of
documents and other evidence, fact finding and other modes of discovery, reopening of hearing.
Etc.
3. Special power in aid of his general contractual authority like the authority to determine
arbitrability of any particular dispute and to modify any provisions of existing agreement upon
which a proposed change is submitted for arbitration
4. Authority to issue writ of execution.

There is unauthorized amendment or alteration of the CBA by the VA in any of the following
1. It is so unfounded in reason and fact
2. It is so unconnected with the wording and purpose of the agreement
3. It is without factual support in view of its language, its context, and any other indicia of the
parties intention
4. It ignores or abandons the plain language of the contract
5. It is mistakenly based on crucial assumption which concededly is non fact
6. It is unlawful, arbitrary or capricious
7. It is contrary to public policy

Note:
When a CBA is expected to speak on a matter, but it does not or its sentences imports ambiguity on the
subject the VA may look into extrinsic aids to determine the intention of the parties, using the history of
the company, the contemporaneous and subsequent acts of the parties or past practices. His decision must
be supported by reason, further a CBA should be liberally construed rather than narrowly and technically
and the VA must make Practical and realistic construction upon it.

Article. 262-A. Procedures


The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive
evidences and take whatever action is necessary to resolve the issue or issues subject of the dispute,
including efforts to effect a voluntary settlement between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any
third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary
Arbitrator or panel of Voluntary Arbitrators. Hearing may be adjourned for cause or upon agreement by
the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of
Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of
submission of the dispute to voluntary arbitration.

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts
and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt
of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the
Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution
requiring either the sheriff of the Commission or regular courts or any public official whom the parties
may designate in the submission agreement to execute the final decision, order or award.

Comment:
Failure of the VA to render an award within the prescribed time, absent a contrary stipulation, shall, upon
complain of a party, be a sufficient ground for the Board to discipline said VA, pursuant to the guidelines
issued by the secretary. In cases where the recommended sanction is de-listing, it shall be unlawful for the
VA to refuse or fail to turn over to the BLR, for its further disposition, the records of the case within 10
calendars from the demand thereof.

MR is allowable due to the amendment providing for 10 days for finality

Mode of appeal:
To the CA rule 43 section 1
Samahan ng mga mangagawa VS VA Froilan

Petitioner union argues that the proper remedy to assail a decision of a voluntary arbitrator is a special civil
action for certiorari under Rule 65 of the Rules of Court and not an appeal via a petition for review under
Rule 43. Petitioner unions theory is based on the following ratiocinations: first, the decision of the
voluntary arbitrator is similar to the decisions rendered by the National Labor Relations Commission
(NLRC) and the Secretary of Labor and Employment, which become final and executory after ten (10)
calendar days from receipt of notice, in that the Labor Code expressly disallows an appeal from their
judgment or final order; second, Section 2 of Rule 43, which exempts judgments or final orders issued
under the Labor Code from an appeal via Rule 43, should apply with equal force to decisions of labor
voluntary arbitrators.

The petition lacks merit.

The question on the proper recourse to assail a decision of a voluntary arbitrator has already been settled in
Luzon Development Bank v. Association of Luzon Development Bank Employees,12 where the Court held
that the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to
the Court of Appeals, in line with the procedure outlines in Revised Administrative Circular No. 1-95 (now
embodied in Rule 43 of the 1997 Rules of Civil Procedure), just like those of the quasi-judicial agencies,
boards and commissions enumerated therein, and consistent with the original purpose to provide a uniform
procedure for the appellate review of adjudications of all quasi-judicial entities.13

Subsequently, in Alcantara, Jr. v. Court of Appeals,14 and Nippon Paint Employees Union v. Court of
Appeals,15 the Court reiterated the aforequoted ruling. In Alcantara, the Court held that notwithstanding
Section 2 of Rule 43, the ruling in Luzon Development Bank still stands. The Court explained, thus:

The provisions may be new to the Rules of Court but it is far from being a new law. Section 2, Rules 42 of
the 1997 Rules of Civil Procedure, as presently worded, is nothing more but a reiteration of the exception
to the exclusive appellate jurisdiction of the Court of Appeals, as provided for in Section 9, Batas Pambansa
Blg. 129, as amended by Republic Act No. 7902:

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the
Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

The Court took into account this exception in Luzon Development Bank but, nevertheless, held that the
decisions of voluntary arbitrators issued pursuant to the Labor Code do not come within its ambit x x x16

On some occasions, rules of procedure may be relaxed and on that basis the Court of Appeals could have
treated the petition for certiorari as a petition for review under Rule 43. However, as correctly pointed out
by the Court of Appeals, the petition was filed beyond the reglementary period for filing a petition for
review under Rule 43. It is elementary in remedial law that the use of an erroneous mode of appeal is a
cause for dismissal of the petition for certiorari and it has been repeatedly stressed that a petition for
certiorari is not a substitute for a lost appeal.17

Article. 262-B. Cost of voluntary arbitration and Voluntary Arbitrators fee.


The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on
the cost of voluntary arbitration including the Voluntary Arbitrators fee. The fixing of fee of Voluntary
Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration
Fund, shall take into account the following factors:
(a) Nature of the case;
(b) Time consumed in hearing the case;
(c) Professional standing of the Voluntary Arbitrator;
(d) Capacity to pay of the parties; and
(e) Fees provided for in the Revised Rules of Court.

STRIKES AND LOCKOUTS


AND FOREIGN INVOLVEMENT
IN TRADE UNION ACTIVITIES

Chapter I
STRIKES AND LOCKOUTS
Article. 263. Strikes, picketing and lockouts
(a) It is the policy of the State to encourage free trade unionism and free collective bargaining.
(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or
for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket
and of employers to lockout, consistent with the national interest, shall continue to be recognized and
respected. However, no labor union may strike and no employer may declare a lockout on grounds
involving inter-union and intra-union disputes.
(c) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout with the Ministry at least 30 day before the
intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the
absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any
legitimate labor organization in behalf of its members. However, in case of dismissal from
employment of union officers duly elected in accordance with the union constitution and by-laws,
which may constitute union busting, where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action immediately. (As amended by
Executive Order No. 111, December 24, 1986).
(d) The notice must be in accordance with such implementing rules and regulations as the Minister of
Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at mediation and
conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the
requisite number of days from the mandatory filing of the notice, the labor union may strike or the
employer may declare a lockout.
(f) A decision to declare a strike must be approved by a majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose.
A decision to declare a lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting
called for that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was taken. The Ministry
may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting
at least seven days before the intended strike or lockout, subject to the cooling-off period herein
provided. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by
Executive Order No. 111, December 24, 1986).
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one
has already taken place at the time of assumption or certification, all striking or locked out employees
shall immediately return-to-work and the employer shall immediately resume operations and readmit
all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may seek the assistance of law enforcement agencies
to ensure compliance with this provision as well as with such orders as he may issue to enforce the
same.

In line with the national concern for and the highest respect accorded to the right of patients to life
and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every
extent possible, be avoided, and all serious efforts, not only by labor and management but
government as well, be exhausted to substantially minimize, if not prevent, their adverse effects on
such life and health, through the exercise, however legitimate, by labor of its right to strike and by
management to lockout. In labor disputes adversely affecting the continued operation of such
hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-out
employer to provide and maintain an effective skeletal workforce of medical and other health
personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to
insure the proper and adequate protection of the life and health of its patients, most especially
emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of
Labor and Employment may immediately assume, within twenty four (24) hours from knowledge of
the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission
for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply
with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and
Employment or the Commission, under pain of immediate disciplinary action, including dismissal or
loss of employment status or payment by the locking-out employer of backwages, damages and other
affirmative relief, even criminal prosecution against either or both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from
determining the industries that, in his opinion, are indispensable to the national interest, and from
intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or
terminate the same.
(h) Before or at any stage of the compulsory arbitration process, the parties may opt to submit their
dispute to voluntary arbitration.

(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or
resolve the dispute, as the case may be. The decision of the President, the Secretary of Labor and
Employment, the Commission or the voluntary arbitrator shall be final and executory ten (10)
calendar days after receipt thereof by the parties. (As amended by Section 27, Republic Act No.
6715, March 21, 1989).

Article. 264. Prohibited activities. - (a) No labor organization or employer shall declare a strike or lockout
without first having bargained collectively in accordance with Title VII of this Book or without first
having filed the notice required in the preceding Article or without the necessary strike or lockout vote
first having been obtained and reported to the Ministry.

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or
after certification or submission of the dispute to compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for the strike or lockout.

Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be
entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status: Provided, That mere participation of a
worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike.

(b) No person shall obstruct, impede, or interfere with, by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees during any labor controversy or in the exercise of the
right to self-organization or collective bargaining, or shall aid or abet such obstruction or interference.

(c) No employer shall use or employ any strike-breaker, nor shall any person be employed as a strike-
breaker.

(d) No public official or employee, including officers and personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or armed person, shall bring in, introduce or escort in any
manner, any individual who seeks to replace strikers in entering or leaving the premises of a strike area,
or work in place of the strikers. The police force shall keep out of the picket lines unless actual violence
or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any
public officer from taking any measure necessary to maintain peace and order, protect life and property,
and/or enforce the law and legal order. (As amended by Executive Order No. 111, December 24, 1986).

(e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct
the free ingress to or egress from the employers premises for lawful purposes, or obstruct public
thoroughfares. (As amended by Batas Pambansa Bilang 227, June 1, 1982).
Article. 265. Improved offer balloting.
In an effort to settle a strike, the Department of Labor and Employment shall conduct a referendum by
secret ballot on the improved offer of the employer on or before the 30th day of the strike. When at least a
majority of the union members vote to accept the improved offer the striking workers shall immediately
return to work and the employer shall thereupon readmit them upon the signing of the agreement.

In case of a lockout, the Department of Labor and Employment shall also conduct a referendum by secret
balloting on the reduced offer of the union on or before the 30th day of the lockout. When at least a
majority of the board of directors or trustees or the partners holding the controlling interest in the case of
a partnership vote to accept the reduced offer, the workers shall immediately return to work and the
employer shall thereupon readmit them upon the signing of the agreement. (Incorporated by Sect ion 28,
Republic Act No. 6715, March 21, 1989).

2 grounds for strike


1) ULP
2) Bargaining deadlock

Hence the following grounds for strike are illegal:


1) Inter-union or intra union disputes
2) Violation of labor standards law not amounting to ULP
3) Any issues involving wage distortion (not strikeable sec 16 RA 6727)
4) Cases pending at the DOLE, BLR, NLRC, NWPC, SOLE, VA, CA, SC
5) Execution and enforcement of final orders, decisions, resolutions or awards
6) Any issues covered by a no strike commitment under an existing CBA

Section 16. Effects on Existing Wage Structure. Where the application of the wage increase prescribed
herein results in distortions in the wage structure within an establishment which gives rise to a dispute
therein, such dispute shall first be settled voluntarily between the parties. In the event of a deadlock, such
dispute shall be finally resolved through compulsory arbitration by the regional arbitration branch of the
National Labor Relations Commission (NLRC) having jurisdiction over the workplace.

The NLRC shall conduct continuous hearings and decide any dispute arising from wage distortions within
twenty calendar days from the time said dispute is formally submitted to it for arbitration.

The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the
increases in the wage rates prescribed under the Act.

Any issue involving wage distortion shall not be a ground for a strike/lockout.

Periods of notice
1) Bargaining deadlock (30)
2) ULP (15)
3) Union busting (immediately)

Concerted activity
Is one undertaken by two or more employees, or by one on behalf of others.

Strike
Is a cessation of work by employees in an effort to get more favorable terms for themselves, or as a concerted
refusal by the employees to do any work for their employer, or to work at their customary rate of speed, until the
object of the strike is attained by the employers granting the demanded concession.

Means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor
dispute (212 0)

Characteristics a strike
1. There must be an established relationship between the strikers and the person or persons against whom the
strike is called
2. The relationship must be one of E&E
3. The existence of a dispute between the parties and the utilization by labor of the weapon of concerted
refusal to work as a means of persuading, or coercing compliance with the working mens demands.
4. The contention advanced by the workers that although work ceases the employment relation is deemed to
continue albeit in a state of belligerent suspension
5. There is work stoppage which stoppage is temporary
6. The work stoppage is a legitimate labor organization and, in case of bargaining deadlock, is the employees
sole bargaining representative.

Lock out
Is the temporary refusal of any employer to furnish work as a result of an industrial or labor dispute; it is an
employers act excluding employees who are union members from the plant. It may affect all or less than all of the
employee-union members. It is an act directed at the union itself rather than at the individual employee-members of
the union.

Requisites of a valid lockout/strike


1. Notice of intention to declare a strike/lock out has been filed with the DOLE, save on the ground union
busting
2. The vote requirement has been complied with
3. Observance of the 7-day strike report.
4. The strike or lockout shall be conducted only after the cooling-off period.
5. An impasse has resulted in the negotiations
6. The lockout/strike is not discriminatory

Valid reason of lockout


The intention must be to protect the employers bargaining position and not acting out of hostility to the process of
collective bargaining or by way of discriminating against union members. It must be used as a defensive weapon, or
in pursuance of the employers legal interest.

Whipsaw strike
Also called a selective strike is a strike by a trade union against only one or a few employers in an industry or a
multi-employer association at a time. The strike is often of a short duration, and usually recurs during the labor
dispute or contract negotiations.
Examples of a valid lockout
1. In anticipation of a threatened strike, where motivated by economic considerations
2. In response to unprotected strike or walk out
3. In response to a whipsaw strike

Instances a lockout was held illegal


1. To discourage and dissipate membership in a labor organization or otherwise kill the union
2. To aid a particular union by preventing further organizational work of its rival, or to coerce the employees
to join a favored union
3. To avoid bargaining.

Comment
A lockout must be for a lawful purpose and carried out through lawful means.

Kinds of strike
1. Extent
a. General
b. Local or particular
2. Nature of the act
a. Strike proper
b. Sit-down
c. Partial or quickie strike
3. Degree of employee interest
a. Primary
b. Secondary
c. Sympathetic
4. Purpose or nature of employee interest
a. Economic strike
b. Unfair labor practice strike

General strike
Extends over a community, province, state or country. It is an extended form of sympathetic strike, involving many
workers who cease to work in sympathy with the workers of another employer, or in order to put pressure upon the
government or in order to paralyze the present economic systems

Lock down
Is one undertaken by workers in a particular enterprise, locality, or occupation; it usually involves only one union or
only one industry

Sit-down strike
Is a method of a prosecuting a strike in which the stiking employees of the offending employer remain on the
employers business premises, and, without working themselves, retain such dominion over the plants facilities so
as to prevent access to and the continued operation of these facilities.

Slow down
Is a willful reduction in the rate of work by a group of employees for the purpose of restrincting the output of the
employer. Otherwise stated, is a method by which ones employees, without seeking a complete stoppage of work,
retard production and distribution in an effort to compel compliance by the employer with the labor demands made
upon him.

Partial strike (quickie strike)


Takes the form of intermittent, unannounced work stoppage, including slowdowns, unauthorized extensions of rest
periods, and walkouts for portions of a shift or for entire shifts.

Wildcat strike
Us a work stoppage that violates the labor contract and is not authorized by the union.

Primary strike (initial or original strike)


Is one declared by the employees who have a direct and immediate interest, whether economic or otherwise, in the
subject of the dispute, which exists between them and their employer.

Secondary strike
Refers to a coercive measure adopted by workers against an employer connected by a product or employment with
alleged unfair labor conditions or practices. It occurs when a group of employees refuse in concert to remain at work
for an employer, not because of any complaint over their labor standards under him, but because he persists in
dealing with a third person against whom they have a grievance.

Sympathetic strike
Is stoppage of work to make common cause with other strikers in other establishments or companies, without the
existence of any labor dispute between the striking employees and their own employer. It is deemed to be anlawful
infliction of damage, aimless and unjustifiable because of the absence of any direct economic advantages to the
group of workers participating in it.

Economic strike
Is intended to force wage and other concessions from the employer, which he is not required by law to grant. It is
declared for the purpose of securing higher wages and for their immediate conditions of labor as a shorter work day,
higher rate OT pay, and such other economic benefits as are usually included in a collective bargaining contract.

ULP strike
Is called against the ULP of the employer, usually for the purpose of making him desist from further committing
such practices.

Note:
A valid strike requires a labor dispute between the parties. Hence when there is no dispute or the dispute has nothing
to do with the terms and conditions of employment in the establishment, the stoppage of work but its employees has
no basis in labor laws and the employees who engage in the work stoppage actually commit an illegal strike and take
the risk and consequences of such an illegal act.

Hence the following strikes are illegal:


1. Wildcat strike
2. Secondary strikes
3. Sympathetic strikes
4. Strike against a subcontractor for the purpose of coercing him to coerce the main contractor, the owner, to
break an existing contract and five the strikers the work they demand.
5. Strike held for the purpose of coercing one employer to coerce another to settle a trade dispute between him
and his employees.
6. Welga ng bayan general strike

Comment:
1. Pacific measures must first be exhausted by the employees before they stage a strike otherwise the strike
may be held as premature and rendered invalid.
2. Issues pending resolution in arbitration proceedings, whether compulsory or voluntary, cannot serve as
basis of a strike. To resort to strike despite ongoing arbitration is an act amounting to sabotage of a peaceful
conciliatory process.

Instances where strike was held as premature


1. It was declared without giving the manager or board of directors who were in another place, a reasonable
time within which to consider and act upon the demands of the union.
2. Strike was held despite the knowledge that the officer capable of deciding their proposal went temporarily
out of the country and did not wait that their demands be transmitted to him.

Protection granted to a legal strike


1. It is generally not subject to labor injunction or restraining order
2. Employees may not be discriminated against merely because they have exercised their right to strike
3. Use of strike-breakers is prohibited
4. Mere participation in a strike does not sever the employment

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

Comment:
The right to strike includes the right to use peaceable and lawful means to induce present and expectant employees
to join the ranks of the strikers.

During a strike the E&E relationship is not terminated but merely suspended as the work stoppage is not permanent
but only temporary hence the employer is required to reinstate the striking employees to their positions once the
lawful strike has terminated. Also, since the employee relationship has been suspended the workers who went on
strike is not entitled to payment of wages.

Illegal strike is:


1. Is contrary to a specific prohibition of law
2. Violates a specific requirement of law
3. Is declared for an unlawful purpose
4. Employs unlawful means
5. Is declared in violation of an existing injunctions
6. Is contrary to an existing agreements (no strike clause or requirement to pursue grievance procedure)
7. Strike during arbitration or preventive mediation
8. Strike in violation of a lawful order by the arbitrator

Comment:
Once a labor dispute has been decided as appropriate for preventive mediation, the effect of that declaration by the
NCMB is the dropping of the case from the docket of notice of strikes, as provided in its rules. Hence the effect is as
if there was no notice of strike ever filed therefore during the pendency of the preventive mediation proceedings no
strike could be legally declared.

Comment:
If the ground relied upon for the strike is bargaining deadlock, notice must be given to whether the bargaining or
negotiations were conducted during the notice period (60 days), prior to the expiration date of the existing CBA.

Comment:
the assumption of the SOLE of jurisdiction over a labor dispute which is causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the law grants the SOLE the jurisdiction to decide the
labor dispute but not the legality of the strike if done.

PAL vs SOLE
Under Art. 263 of the Labor Code, the Labor Secretary's authority to resolve a labor dispute within 30 days from the
date of assumption of jurisdiction, encompasses only the issues in the dispute, not the legality or illegality of any
strike that may have been resorted to in the meantine (Binamira vs. Ogan-Occena, 148 SCRA 677, 685 [1987]).
Indeed, as found by the Labor Secretary in his Order of January 21, 1989, the only issues involved in the dispute
were:

1. determination of the minimum entry rate

2. wage adjustment due to payscale study

3. retroactive pay as a consequence of the upgraded payscale or goodwill bonus.

The legality or illegality of the strike was not submitted to the Secretary of Labor for resolution.

The jurisdiction to decide the legality of strikes and lock-outs is vested in Labor Arbiters, not in the Secretary of
Labor.

Reasons who govt employees cannot strike


1. The right to self-organization does not carry with it the right to strike
2. The constitution only granted the right to self-organization and not recognize the plausibility of striking
subject to the provisions of law
3. There is no law allowing the govt employees to go on strike
4. The govt offices are imbued with public welfare
5. They can negotiate or bargain with the appropriate agencies only those conditions of employment not fixed
by law.
6. General rule: no right to strike, even if there is no prohibition. Exception: when the law expressly grants
them the right.

Rules: notice to strike


1. The notice should be filed with the Regional National Conciliation and Mediation Board
2. If the reason for the strike is ULP it must be filed by the certified duly recognized or certified bargaining
agent. If there is no bargaining agent any registered union
3. If the ground is bargaining deadlock only the bargaining agent
4. Content of the union:
a. Names and addresses of the employer and the union involved
b. Nature of the undustry to which the employer belongs
c. Number of union members and of the workers in the bargaining unit
d. All other data as may facilitate the settlement of the dispute such as all pending labor disputes
involving the same parties

Rules: cooling of period


1. Bargaining deadlock 30 days
2. ULP 15 days
3. Union busting immediately after the strike vote is conducted and the results thereof submitted to the
appropriate regional branch of the NCMB

Requirements of strike vote:


1. It must be via secret ballot
2. In a meeting or referenda specially called for that purpose
3. Notice of the meeting shall be sent to the NCMB at least 24 hours before such meetings as well as the
results of the voting 7 days before the intended strike or lockout, subject to the cooling off period.
4. It must be supported by at least majority of the total union membership.

Note:
The 7 day period must be added to the cooling of period.

Purpose of periods:
1. 30 and 15 day period to allow the parties to calm down
2. 7 day period to allow the NCMB to determine the veracity of the strike report
3. 24 hour period, to allow the NCMB to determine if there is a need to supervise the voting.

Comment:
The non-observance of the procedural requirements will render the strike illegal.

Conversion doctrine
Refers to instances where the strike begun as a strike over bargaining demands which subsequently
became an unfair labor practice when the employer refused to bargain.

Comment:
The effect is that the employees permanently replaced during the economic phase of the strike are not
entitled to immediate reinstatement whereas those permanently replaced after the date of conversion are
entitled to immediate reinstatement

Note:
The inability of the employer to grant the demands of the union, even if real, will not render the strike
illegal, since the ability to grant and the right of the individual to strike are different matter. Hence the
option given to the employer is to reject the proposal and bargain with the employee.

NCMB Manual of procedure


SECTION 3. Action on Non-Strikeable Issues. A strike or lockout notice anchored on ground
involving 1.) inter-union and intra-union disputes, or 2.) on issues already brought to voluntary or
compulsory arbitration, or 3.) mere violation of the collective bargaining agreement involving political
provisions may be considered not duly filed and the party so filing may be notified of such finding either
orally or in writing by the Director II. On his part, the Conciliator shall convince the party concerned to
voluntarily withdraw the notice without prejudice to further conciliation proceeding. Otherwise, he shall
recommend to the Director II that the notice be treated as a preventive mediation case.

2 test to determine if the strike for ULP is lawful


1. Objectively, when the strike is declared in protest of ULP which is found to have been actually
committed
2. Good faith strike doctrine
Subjectively, when a strike is declared in protest of what the union believed to be ULP committed
by management, and the circumstance warranted such belief in good faith, although found
subsequently as not committed

Note:
Good faith is insufficient, the good faith must be based on a rational basis.

Comment:
The SC ruled that the no strike clause is applicable only to economic strikes and not to ULP. However

Comment:

General rule:
A strike for union recognition is not a lawful purpose and rendering it illegal. The appropriate remedy is
to seek for certification election specially when its majority status has not been proven since there are
several unions present in the bargaining unit, it takes the form of a intra-union dispute.

Exception:
The SC considered a strike legal despite the fact that the initial purpose of the strike is to compel
recognition by the employer of the union under the reason that the majority status has in fact been proved
despite absence of certification election and that the employer employed dilatory tactics as it did not
attend conciliatory and mediatory proceedings plus the fact that the certification election has been
pending for 6 years already, this situation falls under the ULP of refusal to bargain.

Requirements of ULP refusal to bargain:


1. Possession of majority status
2. Proof of majority representation
3. Demand to bargain.

Note:
If new policies are executed or laid down by the employer by virtue of its management prerogative and
the union believes such is discriminatory or unreasonable, they must follow the grievance procedure they
have laid down and negotiate within the terms thereof. Until the said policies has been declared either by
a competent authority or by their mutual assent, the said employees are bound to comply with said
management prerogatives.
Prohibited activities:
1. Commit any act of violence, coercion or intimidation
2. Obstruct the free ingress to or egress from the employers premises for lawful puposes
3. Obstruct public thoroughfares.

Note:
The commission of an illegal act by an employee during a strike is sufficient ground to dismiss an
employee however, the employer must before dismissing the employee conduct an investigation on the
same and provide the employee the right to strike otherwise it may be subject to nominal damages.

Comment:
Strike held for a valid purpose shall remain valid even if there are isolated acts of violence, only the
perpetrators would be accountable for those acts however when the perpetration of the unlawful acts are
pervasive and widespread, the same will constitute the strike illegal, however there must be sufficient
proof of actual authorization or ratification of such acts after actual knowledge thereof, the dismissal of
all active participants of the strike will be justified (read pp597).

Note:
The general banking law, explicitly classifies banking an industry indispensable to the national interest.

SECTION 22. Strikes and Lockouts.


The banking industry is hereby declared as indispensable to the national interest and, not
withstanding the provisions of any law to the contrary, any strike or lockout involving banks, if
unsettled after seven (7) calendar days shall be reported by the Bangko Sentral to the Secretary of
Labor who may assume jurisdiction over the dispute or decide it or certify the same to the
National Labor Relations Commission for compulsory arbitration. However, the President of the
Philippines may at any time intervene and assume jurisdiction over such labor dispute in order to
settle or terminate the same. (6-E)

Note:
The assumption or notification is immediately executory even if there is no return to work order, the
parties are enjoined to return to work upon receipt of the assumption or certification order by the SOLE.

Refusal to receive the assumption or certification order amounts to defiance of the said order from then on
the strike became unlawful.

Comment:
Defiance of a RTWO (return to work order) is considered an illegal act, thereby not only the officers who
knowingly took part in the illegal act can be dismissed but also the employees who knowingly took part
in the illegal act, hence article 264 (3)
No strike or lockout shall be declared after assumption of jurisdiction by the President or the
Minister or after certification or submission of the dispute to compulsory or voluntary arbitration
or during the pendency of cases involving the same grounds for the strike or lockout.

Comment: reason why the defiance of the RTWO is a prohibited act therefore illegal act.
The effect of which is the succeeding paragraph

Any worker whose employment has been terminated as a consequence of any unlawful lockout
shall be entitled to reinstatement with full backwages. Any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status:
Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the employer
during such lawful strike.

St Scholasticas College vs Ruben


The respective liabilities of striking union officers and members who failed to immediately
comply with the return-to-work order is outlined in Art. 264 of the Labor Code which provides
that any declaration of a strike or lockout after the Secretary of Labor and Employment has
assumed jurisdiction over the labor dispute is considered an illegal act. Any worker or union
officer who knowingly participates in a strike defying a return-to-work order may, consequently,
"be declared to have lost his employment status."

Section 6 Rule IX, of the New Rules of Procedure of the NLRC, which provides the penalties for
defying a certification order of the Secretary of Labor or a return-to-work order of the
Commission, also reiterates the same penalty. It specifically states that non-compliance with the
aforesaid orders, which is considered an illegal act, "shall authorize the Secretary of Labor and
Employment or the Commission . . . to enforce the same under pain of loss of employment status."
Under the Labor Code, assumption and/or certification orders are similarly treated.

Note:
In order for the refusal to constitute defiance there must be proof of unjustifiable refusal to retrun to work
despite knowledge over the same. Hence it must be accompanied by overt acts unerringly pointing to the
fact that the employee simply refused to comply with the order.

The issuance of the RTWO or assumption or certification order has the effect of enjoining all acts of
protest from both side hence the parties are ordered to return to work under the conditions prevalent prior
to the strike. Therefore the employer may be compelled to readmit the employees despite pendency of
criminal prosecution of their acts since the provision of law requiring such is not for the protection of
neither the employees nor the employer but of the states interest in having the industry continue its work.
Note must be taken that under special circumstances the same may be allowed to readmit them to the
payroll.
The readmission must be actual and not merely for purposes of payroll otherwise the purpose of the
assumption/certification, to protect national interest, will be defeated.

Note:
All issues involved in the labor dispute must be heard and determined by the NLRC branch to which the
certification by the SOLE referred to.

Comment:
The determination of the legality or illegality of a strike and the corresponding dismissals thereon is as a
general rule not covered by the authority of the SOLE when it assumed jurisdiction however if the same
has been submitted to him for resolution the same will be within his jurisdiction to determine.

Picketing
Refers to the pacing of back and forth and voicing their grievances with or without stoppage of work. If
without, the picketing is not accompanied by a strike and shall be governed by the rules of right of
expression. The same must be in constant motion since if they are they are covered by the right of the
general public to the right of passage, easement of passage. If they are not moving and may be considered
as squatting they would exceed the public easement and would constitute an enjoinable trespass.

Comment:
Picketing the home of the employer is not allowed unless the home itself is the place of business of the
employer since the law requires that the same must be conducted in the enterprise

Note:
Shop stewards, due to their positions as the first line of assistance in addressing grievances of their
members with the employers are considered union officers. Therefore if they knowingly participated in an
illegal strike they will be deemed to have forfeited their employment.

Note:
As a general rule, the striking employees who voluntarily went on strike cannot secure payment of wages
under the principle of fair days wage. However if the following circumstance concur and the ground of
the strike is for ULP, they are subject to the discretion of the court entitled to back pay:
1. The strike was legal
2. There was an unconditional offer to return to work
3. That the strikers were refused reinstatement.

2 types of Boycott:
1. Primary boycott
Where the union refuses to use or purchase the product/s of the employer and peacefully persuade
third parties to do the same
2. Secondary boycott
Is committed when the union through force, violence or intimidation coerce third parties to
remove their patronage from the employer, commission of such will render the perpetrators liable
for damages.
Damages incurred during strikes

General rules:
The LLO as well as its members are not liable to damages incurred by reason of a lawful strike
conducted by lawful means since such damages are deemed incidental and damnum absque
injuria.
Only those who committed unlawful or prohibited acts will be liable for their acts unless they
were authorized and/or ratified by another party, the other party will also therefor be liable.
Union officers are liable for damages resulting from unlawful acts if they participated in it or that
there was conspiracy to perpetrate it.
Members are not liable for damages for acts of their unions except:
o Where they authorized or ratified the act
o They participated in its commission
o They directed its commission.

Article. 266. Requirement for arrest and detention.


Except on grounds of national security and public peace or in case of commission of a crime, no union
members or union organizers may be arrested or detained for union activities without previous
consultations with the Secretary of Labor.

Chapter II
ASSISTANCE TO
LABOR ORGANIZATIONS
Article. 267. Assistance by the Department of Labor.
The Department of Labor, at the initiative of the Secretary of Labor, shall extend special assistance to the
organization, for purposes of collective bargaining, of the most underprivileged workers who, for reasons
of occupation, organizational structure or insufficient incomes, are not normally covered by major labor
organizations or federations.

Article. 268. Assistance by the Institute of Labor and Manpower Studies.


The Institute of Labor and Manpower Studies shall render technical and other forms of assistance to labor
organizations and employer organizations in the field of labor education, especially pertaining to
collective bargaining, arbitration, labor standards and the Labor Code of the Philippines in general.

Chapter III
FOREIGN ACTIVITIES
Article. 269. Prohibition against aliens; exceptions.
All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging
directly or indirectly in all forms of trade union activities without prejudice to normal contacts between
Philippine labor unions and recognized international labor centers: Provided, however, That aliens
working in the country with valid permits issued by the Department of Labor and Employment, may
exercise the right to self-organization and join or assist labor organizations of their own choosing for
purposes of collective bargaining: Provided, further, That said aliens are nationals of a country which
grants the same or similar rights to Filipino workers. (As amended by Section 29, Republic Act No. 6715,
March 21, 1989).

Article. 270. Regulation of foreign assistance.


(a) No foreign individual, organization or entity may give any donations, grants or other forms of
assistance, in cash or in kind, directly or indirectly, to any labor organization, group of workers or any
auxiliary thereof, such as cooperatives, credit unions and institutions engaged in research, education
or communication, in relation to trade union activities, without prior permission by the Secretary of
Labor.

"Trade union activities" shall mean:


(1) organization, formation and administration of labor organization;
(2) negotiation and administration of collective bargaining agreements;
(3) all forms of concerted union action;
(4) organizing, managing, or assisting union conventions, meetings, rallies, referenda, teach-ins,
seminars, conferences and institutes;
(5) any form of participation or involvement in representation proceedings, representation elections,
consent elections, union elections; and
(6) other activities or actions analogous to the foregoing.

(b) This prohibition shall equally apply to foreign donations, grants or other forms of assistance, in cash
or in kind, given directly or indirectly to any employer or employers organization to support any
activity or activities affecting trade unions.
(c) The Secretary of Labor shall promulgate rules and regulations to regulate and control the giving and
receiving of such donations, grants, or other forms of assistance, including the mandatory reporting of
the amounts of the donations or grants, the specific recipients thereof, the projects or activities
proposed to be supported, and their duration.

Article. 271. Applicability to farm tenants and rural workers.


The provisions of this Title pertaining to foreign organizations and activities shall be deemed applicable
likewise to all organizations of farm tenants, rural workers, and the like: Provided, That in appropriate
cases, the Secretary of Agrarian Reform shall exercise the powers and responsibilities vested by this Title
in the Secretary of Labor.

Article. 272. Penalties.


(a) Any person violating any of the provisions of Article 264 of this Code shall be punished by a fine of
not less than one thousand pesos (P1,000.00) nor more than ten thousand pesos (P10,000.00) and/or
imprisonment for not less than three months nor more than three (3) years, or both such fine and
imprisonment, at the discretion of the court. Prosecution under this provision shall preclude
prosecution for the same act under the Revised Penal Code, and vice versa.

(b) Upon the recommendation of the Minister of Labor and Employment and the Minister of National
Defense, foreigners who violate the provisions of this Title shall be subject to immediate and
summary deportation by the Commission on Immigration and Deportation and shall be permanently
barred from re-entering the country without the special permission of the President of the Philippines.
(As amended by Section 16, Batas Pambansa Bilang 130 and Section 7, Batas Pambansa Bilang 227).

Article. 273. Study of labor-management relations.


The Secretary of Labor shall have the power and it shall be his duty to inquire into:
(a) the existing relations between employers and employees in the Philippines;
(b) the growth of associations of employees and the effect of such associations upon employer-employee
relations;
(c) the extent and results of the methods of collective bargaining in the determination of terms and
conditions of employment;
(d) the methods which have been tried by employers and associations of employees for maintaining
mutually satisfactory relations;
(e) desirable industrial practices which have been developed through collective bargaining and other
voluntary arrangements;
(f) the possible ways of increasing the usefulness and efficiency of collective bargaining for settling
differences;
(g) the possibilities for the adoption of practical and effective methods of labor-management cooperation;
(h) any other aspects of employer-employee relations concerning the promotion of harmony and
understanding between the parties; and
(i) the relevance of labor laws and labor relations to national development.

The Secretary of Labor shall also inquire into the causes of industrial unrest and take all the necessary
steps within his power as may be prescribed by law to alleviate the same, and shall from time to time
recommend the enactment of such remedial legislation as in his judgment may be desirable for the
maintenance and promotion of industrial peace.

Article. 274. Visitorial power.


The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to
inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under
oath and duly supported by the written consent of at least twenty percent (20%) of the total membership
of the labor organization concerned and to examine their books of accounts and other records to
determine compliance or non-compliance with the law and to prosecute any violations of the law and the
union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during
the sixty (60)-day freedom period nor within the thirty (30) days immediately preceding the date of
election of union officials. (As amended by Section 31, Republic Act No. 6715, March 21, 1989).

Article. 275. Tripartism and tripartite conferences.


(a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and
employers shall, as far as practicable, be represented in decision and policy-making bodies of the
government.

(b) The Secretary of Labor and Employment or his duly authorized representatives may, from time to
time, call a national, regional, or industrial tripartite conference of representatives of government,
workers and employers for the consideration and adoption of voluntary codes of principles designed
to promote industrial peace based on social justice or to align labor movement relations with
established priorities in economic and social development. In calling such conference, the Secretary
of Labor and Employment may consult with accredited representatives of workers and employers.
(As amended by Section 32, Republic Act No. 6715, March 21, 1989).

Tripartism
Is representation of the three sectors (governemnet, employer, employee) in policy making bodies of the
government.

Article. 276. Government employees.


The terms and conditions of employment of all government employees, including employees of
government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and
regulations. Their salaries shall be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages, benefits and other terms and
conditions of employment being enjoyed by them at the time of the adoption of this Code.

Article. 277. Miscellaneous provisions.


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

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

(c) Any employee, whether employed for a definite period or not, shall, beginning on his first day of
service, be considered as an employee for purposes of membership in any labor union. (As amended
by Section 33, Republic Act No. 6715).
(d) No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees may be
assessed against the filing party, provided that in bargaining deadlock, such fees shall be shared
equally by the negotiating parties.

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

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

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

The Fund shall also be utilized for the operation of the Council, the training and education of
Voluntary Arbitrators, and the Voluntary Arbitration Program. (As amended by Section 33, Republic
Act No. 6715, March 21, 1989).

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

(h) In establishments where no legitimate labor organization exists, labor-management committees may
be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The
Department of Labor and Employment shall endeavor to enlighten and educate the workers and
employers on their rights and responsibilities through labor education with emphasis on the policy
thrusts of this Code. (As amended by Section 33, Republic Act No. 6715, March 21, 1989).

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

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

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