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FUNDAMENTAL PRINCIPLES AND POLICIES

LABORLAW
Q:Whatislabor?

A:Itistheexertionbyhumanbeingsofphysicalor
mental efforts, or both, towards the production of
goodsandservices.

Q:Whatislaborlaw?

A: The law governing the rights and duties of the


employerandemployeeswithrespectto:

1. Thetermsandconditionsofemployment
and
2. Labor disputes arising from collective
bargaining(CB)respectingsuchtermsand
conditions.

Q:Whatisthepurposeoflaborlegislation?

A: Labor legislation is an exercise of police power.


The purpose of labor legislation is to regulate the
relations between employers (Ers) and employees
(Ees) respecting the terms and conditions of
employment, either by providing for certain
standards or for a legal framework within which
better terms and conditions of work could be
negotiatedthroughCB.Itisintendedtocorrectthe
injustices inherent in ErEe relationship. (2006 Bar
Question)

Q:Whataretheclassificationsoflaborlaw?

A:
1. Labor standards The minimum terms
andconditionsofemploymentprescribed
by existing laws, rules and regulations
relatingtowages,hoursofwork,costof
living allowance and other monetary and
welfare benefits. (Batong Buhay Gold
Mines,Inc.v.DelaSerna,G.R.No.86963,
August6,1999)
th
e.g.13 monthpay
2. Labor relations Defines and regulates
the status, rights and duties, and the
institutionalmechanisms,thatgovernthe
individual and collective interactions of
Ers, Ees, or their representatives. It is
concerned with the stabilization of
relations of Er and Ees and seek to
forestall and adjust the differences
between them by the encouragement of
collective bargaining and the settlement
of labor disputes through conciliation,
mediationandarbitration.
e.g. Additional allowance pursuant to
CBA

3.

Social legislation It includes laws that


provide particular kinds of protection or
benefitstosocietyorsegmentsthereofin
furtheranceofsocialjustice.
e.g.GSISLaw,SSSLaw,Philhealthbenefits

Q: Is there any distinction between labor


legislationandsociallegislation?Explain.

A:Laborlegislationissometimesdistinguishedfrom
social legislation by the former referring to labor
statutes, like Labor Relations Law and Labor
Standards, and the latter to Social Security Laws.
Laborlegislationfocusesontherightsoftheworker
intheworkplace.

Social legislation is a broad term and may include


not only laws that give social security protection,
butalsothosethathelptheworkersecurehousing
and basic necessities. The Comprehensive Agrarian
Reform Law could also be considered a social
legislation. All labor laws are social legislation, but
not all social legislation is labor law. (1994 Bar
Question)

Q:Whatarethesourcesoflaborlaws?

A:
1. Labor Code and other related special
legislation
2. Contract
3. CollectiveBargainingAgreement
4. Pastpractices
5. Companypolicies

A. FUNDAMENTALPRINCIPLESANDPOLICIES

1.CONSTITUTIONALPROVISIONS

Q: What are the constitutional mandates with


regardlaborlaws?

A:
1. Sec.3,Art.XIIITheStateshallaffordfull
protection to labor, local and overseas,
organizedandunorganized,andpromote
full employment and equality of
employmentopportunitiesforall.

Itshallguaranteetherightsofallworkers
to selforganization, collective bargaining
andnegotiations,andpeacefulconcerted
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
decisionmaking processes affecting their

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rightsandbenefitsasmaybeprovidedby
law.

The State shall promote the principle of


shared responsibility between workers
andemployersandthepreferentialuseof
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
productionandtherightofenterprisesto
reasonablereturnstoinvestments,andto
expansionandgrowth.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.
Sec.9,Art.IITheStateshallpromotea
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,
andanimprovedqualityoflifeforall.

Sec. 10, Art II The State shall promote


social justice in all phases of national
development.

Sec. 11, Art II The State values the


dignity of every human person and
guaranteesfullrespectforhumanrights.

Sec. 13, Art. II The State recognizes the


vital role of the youth in nationbuilding
and shall promote and protect their
physical,moral,spiritual,intellectual,and
social wellbeing. It shall inculcate in the
youth patriotism and nationalism, and
encouragetheirinvolvementinpublicand
civicaffairs.

Sec. 14, Art. II The State recognizes the


role of women in nationbuilding, and
shall ensure the fundamental equality
beforethelawofwomenandmen.

Sec.18,Art.IITheStateaffirmslaboras
a primary social economic force. It shall
protect the rights of workers and
promotetheirwelfare.

Sec. 20, Art. II The State recognizes the


indispensable role of the private sector,
encourages private enterprise, and

12.

13.

14.

provides
incentives
to
needed
investments.

Sec. 1, Art. III No person shall be


deprived of life, liberty, or property
withoutdueprocessoflaw,norshallany
personbedeniedtheequalprotectionof
thelaws.

Sec. 4, Art. III No law shall be passed


abridging the freedom of speech, of
expression,orofthepress,ortherightof
the people peaceably to assemble and
petition the government for redress of
grievances.

Sec. 8, Art. III The right of the people,


including those employed in the public
and private sectors, to form unions,
associations,orsocietiesforpurposesnot
contrarytolawshallnotbeabridged.

Sec. 1, Art. XIII 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
andpoliticalpowerforthecommongood.

To this end, the State shall regulate the


acquisition, ownership, use, and
disposition of property and its
increments.

Sec. 2, Art. XIII The promotion of social


justice shall include the commitment to
create economic opportunities based on
freedomofinitiativeandselfreliance.

Sec.14, Art.XIII The State shall protect


working women by providing safe and
healthful working conditions, taking into
account their maternal functions, and
such facilities and opportunities that will
enhancetheirwelfareandenablethemto
realizetheirfullpotentialintheserviceof
thenation.

Q:WhatistheStatepolicyonlaborasfoundinthe
constitution(Sec.3,Art.XIII)?

A:
1. Affordfullprotectiontolabor
2. Promotefullemployment
3. Ensure equal work opportunities
regardlessofsex,race,orcreed

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FUNDAMENTAL PRINCIPLES AND POLICIES


4.

5.

Assure the rights of workers to self


organization, security of tenure, just and
humaneconditionsofwork,participatein
policy and decisionmaking processes
affectingtheirrightandbenefits
Regulate the relations between workers
andemployers

Q: What are the basic rights of workers


guaranteedbytheConstitution(Sec.3,Art.XIII)?

A:
1. Securityoftenure
2. Receivealivingwage
3. Humaneworkingconditions
4. Shareinthefruitsofproduction
5. Organizethemselves
6. Conduct collective bargaining or
negotiationwithmanagement
7. Engage in peaceful concerted activities
includingstrike
8. Participate in policy and decision making
processes

Q:Whatistheprincipleofnonoppression?

A: The principle mandates capital and labor not to


act oppressively against each other or impair the
interest and convenience of the public. The
protectiontolaborclauseintheConstitutionisnot
designed to oppress or destroy capital. (Capili v.
NLRC,G.R.No.117378,Mar.26,1997)

2.NEWCIVILCODEANDOTHERLAWS

Q:Whatareotherrelatedlawstolabor?

A:
1. CivilCode
a. Art. 1700 The relations between
capital and labor are not merely
contractual. They are so impressed
with public interest that labor
contractsmust yieldtothecommon
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
andsimilarsubjects.
b. Art.1701 Neithercapitalnorlabor
shall act oppressively against the
other, or impair the interest or
convenienceofthepublic.
c. Art.1702Incaseofdoubt,alllabor
legislation and all labor contracts
shall be construed in favor of the

2.

3.

safety and decent living for the


laborer.
d. Art. 1703 No contract which
practically amounts to involuntary
servitude, under any guise
whatsoever,shallbevalid.

RevisedPenalCode
Art. 289 Formation, maintenance and
prohibition of combination of capital or
labor through violence or threats. Any
person who, for the purpose of
organizing, maintaining or preventing
coalitions or capital or labor, strike of
laborers or lockout of employees, shall
employ violence or threats in such a
degreeastocompelorforcethelaborers
or employers in the free and legal
exercise of their industry or work, if the
act shall not constitute a more serious
offenseinaccordancewiththeprovisions
oftheRPC.

SpecialLaws
a. GSISLaw
th
b. 13 MonthPayLaw
c. RetirementPayLaw
d. SSSLaw
e. PaternityLeaveAct
f. AntiChildLaborAct
g. AntiSexualHarassmentAct
h. Magna Carta for Public Health
Workers
i.
SoloParentsWelfareActof2000
j.
National Health Insurance Act as
amendedbyR.A.9241
k. Migrant Workers and Overseas
Filipinos Act of 1995 as amended by
RA10022
l.
PERAActof2008
m. Home Development Mutual Fund
Lawof2009
n. TheMagnaCartaofWomen
o. ComprehensiveAgrarianReformLaw
asamendedbyR.A.9700

3.LABORCODE

Q:Whatistheaimoflaborlaws?

A: The justification of labor laws is social justice.


Social justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanizationoflawsandtheequalizationofsocial
and economic force by the State so that justice in
its rational and objectively secular conception may
at least be approximated. Social justice means the
promotion of the welfare of all the people, the

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adoption by the government of measures
calculated to insure economic stability of all the
competent elements of society, through the
maintenance of a proper economic and social
equilibriumintheinterrelationsofthemembersof
the community, constitutionally, through the
adoption of measures legally justifiable, or extra
constitutionally, through the exercise of powers
underlyingtheexistenceofallgovernmentsonthe
timehonoredprincipleofsaluspopuliestsuprema
lex. (Calalang v. Williams, G.R. No. 47800, Dec. 2,
1940)

Q:Whatiscompassionatejustice?

A:Itisdisregardingrigidrulesandgivingdueweight
toallequitiesofthecase.

e.g: Employee validly dismissed may still be given


severancepay.

Q:Howshoulddoubtsintheimplementationand
interpretation of the Labor Code (LC) and its
Implementing Rules and Regulations (IRR) be
resolved?

A:Theyshouldberesolvedinfavoroflabor.

Q: What is the concept of liberal approach in


interpretingtheLCanditsIRR?

A: The workers' welfare shouldbe the paramount


consideration in interpreting the LC and its IRR.
This is rooted in the constitutional mandate to
affordfullprotectiontolabor.(PLDTv.NLRC,G.R.
No. 111933, July 23, 1997). It underscores the
policy of social justice to accommodate the
interests of the working class on the humane
justification that those who have less in life shall
have more in law. (PAL v. Santos, G.R. No. 77875,
Feb.4,1993).(2006BarQuestion)

Q:Art.4oftheLCprovidesthatincaseofdoubtin
the implementation and interpretation of the
provisionsoftheLCanditsIRR,thedoubtshallbe
resolved in favor of labor. Art. 1702 of the Civil
Codealsoprovidesthatincaseofdoubt,alllabor
legislation and all labor contracts shall be
construed in favor of the safety and decent living
ofthelaborer.

MicaMara Company assails the validity of these


statutes on the ground that they violate its
constitutional right to equal protection of the
laws. Is the contention of Mica Mara Company
tenable?Discussfully.

A:No,theConstitutionprovidesthattheStateshall
afford full protection to labor. Furthermore, the
State affirms labor as a primary economic force. It
shall protect the rights of workers and promote
theirwelfare.(1998BarQuestion)

a.Art.3.DeclarationofBasicPolicy

Q:WhatisthepolicyoftheStateasregardslabor
asfoundintheLaborCode(Art.12)?

A:
1. Promote and maintain a State of full
employment
through
improved
manpower training, allocation and
utilization;
2. Protect every citizen desiring to work
locallyoroverseasbysecuringforhimthe
best possible terms and conditions of
employment;
3. Facilitate a free choice of available
employment by persons seeking work in
conformitywiththenationalinterest;
4. Facilitate and regulate the movement of
workers in conformity with the national
interest;
5. Regulate the employment of aliens,
including the establishment of a
registrationand/orworkpermitsystem;
6. Strengthen the network of public
employment offices and rationalize the
participation of the private sector in the
recruitment and placement of workers,
locally and overseas, to serve national
developmentobjectives;
7. Ensure careful selection of Filipino
workers for overseas employment in
order to protect the good name of the
Philippinesabroad.

Q: What are the reasons for affording greater


protectiontoemployees?

A:
1. Greater supply than demand for labor;
and
2. Need for employment by labor comes
from vital and desperate necessity.
(Sanchezv.HarryLyonsConstructionInc.,
G.R.L2779,Oct.18,1950)

Q:Arealllabordisputesresolvedinfavoroflabor?

A: No. The law also recognizes that management


has rights which are also entitled to respect and
enforcement in the interest of fair play. (St. Lukes
MedicalCenterEesAssnv.NLRC,G.R.No.162053,
Mar.7,2007)

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FUNDAMENTAL PRINCIPLES AND POLICIES

1.
b.Art.5.RulesandRegulations

Q:Whoisgiventherulemakingpower?

A: The Department of Labor and other govt


agencies charged with the administration and
enforcement of the Labor Code or any of its parts
shallpromulgatethenecessaryimplementingrules
and regulations. Such rules and regulations shall
become effective 15 days after announcement of
theiradoptioninnewspapersofgeneralcirculation.

Q: What are the limitations to the rulemaking


power given to the Secretary of Labor and
Employmentandothergovtagencies?

A:Itmust:
1. Beissuedundertheauthorityofthelaw
2. Not be contrary to law and the
Constitution

c.Art.6.Applicability

Q:Towhomshallallrightsandbenefitsunderthe
LCapply?

A: GR: All rights and benefits granted to workers


under the LC shall apply alike to all workers,
whetheragriculturalornonagricultural.

XPN:
1. Governmentemployees(Ees)
2. Ees of government corporations created
byspecialororiginalcharter
3. Foreigngovernments
4. Internationalagencies
5. Corporate officers/ intracorporate
disputes which fall under P.D. 902A and
now fall under the jurisdiction of the
regular courts pursuant to the Securities
RegulationCode(SRC).
6. Local water district except where NLRCs
jurisdictionisinvoked.
7. AsmayotherwisebeprovidedbytheLC

Q:WhatisthetestindeterminingwhetheraGOCC
issubjecttotheCivilServiceLaw?

A:Itisdeterminedbythemanneroftheircreation.
Govt corporations that are created by special
(original)charterfromCongressaresubjecttoCivil
Service rules, while those incorporated under the
GeneralCorporationLawarecoveredbytheLC.

Q:Whoisanagricultural/farmworker?

A:

2.
3.

One employed in an agricultural or farm


enterprise,
Performs tasks which are directly related
toagriculturalactivitiesoftheEr,and
Any activities performed by a farmer as
anincidenttofarmingoperations.

d.Art.211.DeclarationofPolicy

Q: What are the policy objectives of our labor


relationslaw?

A:Thestateaimstopromote:
1. Free collective bargaining (CB) and
negotiations,
including
voluntary
arbitration, mediation and conciliation as
modes of settling labor or industrial
disputes;
2. Freetradeunionism;
3. Free and voluntary organization of a
strongandunitedlabormovement;
4. Enlightenment of workers concerning
their rights and obligations as union
membersandasEes;
5. Adequate administrative machinery for
the expeditious settlement of labor or
industrialdisputes;
6. Stable but dynamic and just industrial
peace;
7. Participation of workers in the decision
making processes affecting their rights,
dutiesandwelfare;
8. Truly democratic method of regulating
therelationsbetweentheErsandEesby
means of agreements freely entered into
through CB, no court or administrative
agencyorofficialshallhavethepowerto
set or fix wages, rates of pay, hours of
work or other terms and conditions of
employment, except as otherwise
providedundertheLC.

e.Art.212.Definitions

Q:Whoisanemployer(Er)?
A: Any person acting in the interest of an Er,
directly or indirectly. The term does not include a
labor organization (LO) or any of its officers and
agents,exceptwhenactingasanEr.(Art.212[e])
An Er is defined as any person or entity that
employstheservicesofothers;oneforwhomwork
and who pays their wages of salaries; any person
acting in the interest of an Er; refers to the
enterprise where the LO operates or seeks to
operate.(Sec.1[s],RuleI,BookV,IRR)
Q:WhenisalabororganizationdeemedanEr?

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or representation of persons
negotiating, fixing, maintaining
changing terms or conditions
employment.

A: When it is acting as such in relation to persons


rendering services under hire, particularly in
connectionwithitsactivitiesforprofitorgain.
Note: The mere fact that respondent is a labor union
doesnotmeanthatitcannotbeconsideredanErfor
persons who work for it. Much less should it be
exempted from labor laws. (Bautista v. Inciong, G.R.
No.L52824,Mar.16,1988)

Q:Whatarethekindsoflabordisputes?
A:
1.

Q:Whoisanemployee(Ee)?
A:
1.
2.

3.

AnypersonintheemployoftheEr
Anyindividualwhoseworkhasceasedas
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
equivalentandregularemployment
One who has been dismissed from work
but the legality of dismissal is being
contested in a forum of appropriate
jurisdiction. (D.O. No. 4003, Mar. 15,
2003)

2.

Note: The term shall not be limited to the Ees of a


particularErunlesstheLCexplicitlystates.
AnyEe,whetheremployedforadefiniteperiodornot,
shall, beginning on the first day of service, be
considered an Ee for purposes of membership in any
laborunion.(Art.277[c],LC)

Q:Whatisalabordispute?
A:Includesanycontroversyormatterconcerning:
1.
2.

3.

Termsandconditionsofemployment,or
The association or representation of
persons
in
negotiating,
fixing,
maintaining, changing or arranging the
termsandconditionsofemployment
Regardless of whether the disputants
stand in the proximate relation of Er and
Ee.(Art.212[l])

Q: What are the tests on whether a controversy


fallswithinthedefinitionofalabordispute?
A:
1.

2.

AstonatureItdependsonwhetherthe
dispute arises from ErEe relationship,
although disputants need not be
proximatelyErorEeofanother.

As to subject matter The test depends


on whether it concerns terms or
conditions of employment or association

in
or
of

Laborstandarddisputes
a. Compensation E.g. Underpayment
of minimum wage; stringent output
quota;illegalpaydeductions
b. Benefits E.g. Nonpayment of
holidaypay,OTpayorotherbenefits
c. WorkingConditionsE.g.Unrectified
workhazards

Laborrelationsdisputes

a. Organizational right disputes/ULP


E.g.
Coercion,
restraint
or
interference in unionization efforts;
reprisal or discrimination due to
union activities; company unionism;
ULP, strike or lockout; union
members complaint against union
officers
b. Representation disputes E.g.
Uncertainty as to which is the
majority union; determination of
appropriate CB unit; contests for
recognition by different sets of
officersinthesameunion
c. BargainingdisputesE.g.Refusalto
bargain; bargaining in bad faith;
bargainingdeadlock;economicstrike
orlockout
d. Contractadministrationorpersonnel
policy disputes E.g. Non
compliance with CBA provision (ULP
if gross non compliance with
economic provisions); disregard of
grievance
machinery;
non
observance of unwarranted use of
union security clause; illegal or
unreasonable
personnel
management policies; violation of
nostrike/nolockoutagreement
e. Employment tenure disputes E.g.
Nonregularization of Ees; non
absorption of labor only contracting
staff; illegal termination; non
issuanceofemploymentcontract

Q:Whoarethepartiestoadispute?

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FUNDAMENTAL PRINCIPLES AND POLICIES


A:
1.
2.

Primary parties are the Er, Ees and the


union.
Secondary parties are the voluntary
arbitrator, agencies of DOLE, NLRC,
Secretary of Labor and the Office of the
President.

Q:Whatisaninteruniondispute?

A:Anyconflictbetweenandamonglegitimatelabor
unions involving representation questions for the
purposes of CB or to any other conflict or dispute
betweenlegitimatelaborunions.
Q:Whatisanintrauniondispute?
A: Any conflict between and among union
members, grievances arising from any violation of
the rights and conditions of membership, violation
of or disagreement over any provision of the
unions constitution and bylaws, or disputes from
charteringoraffiliationofunion.
Q:Whatarerightsdisputes?
A: They are claims for violations of a specific right
arising from a contract, i.e. CBA or company
policies.
Q:Whatareinterestdisputes?
A: They involve questions on what should be
included in the CBA. Strictly speaking, the parties
maychooseavoluntaryarbitratortodecideonthe
terms and conditions of employment, but this is
impracticablebecauseitwillbeavaluejudgmentof
thearbitratorsandnotoftheparties.
Q:Whatarecontractnegotiationdisputes?
A:ThesearedisputesastothetermsoftheCBA.
Q:Whatarecontractinterpretationdisputes?
A:ThesearedisputesarisingunderanexistingCBA,
involving such matters as the interpretation and
application of the contract, or alleged violation of
itsprovisions.
f.Art.255.ExclusiveBargainingRepresentation
(EBR)andWorkersParticipationinPolicyand
DecisionMaking

Q:Whoshallbethebargainingrepresentativeof
the Employees for purposes of collective
bargaining?

A: The Labor Organization designated or selected


bythemajorityoftheemployeesinanappropriate
collective bargaining unit shall be the exclusive
representativeoftheemployeesinsuchunitforthe
purpose of collective bargaining. However, an
individual employee or group of employees shall
havetherightatanytimetopresentgrievancesto
their employer. (As amended by Sec. 22, R.A. No.
6715,Mar.15,1989)

Q: What is the extent of the workers right to


participate in policy and decisionmaking
processesinacompany?

A: Such right refers not only to formulation of


corporate programs and policies but also to
participationingrievanceproceduresandvoluntary
modesofsettlingdisputes.

Q: Explain the extent of the workers right to


participate in policy and decisionmaking process
as provided under Art. XIII, Sec. 13 of the 1987
Constitution. Does it include membership in the
BoardofDirectorsofacorporation?

A: No. In Manila Electric Company v. Quisumbing,


G.R. No. 127598, January 27, 1999, the SC
recognized the right of the union to participate in
policy formulation and decision making process on
mattersaffectingtheUnionmembersrights,duties
and welfare. However, the SC held that such
participation of the union in committees of Er
Meralco is not in the nature of a comanagement
control of the business of Meralco. Impliedly,
therefore,workersparticipatoryrightinpolicyand
decisionmaking processes does not include the
right to put a union member in the Corporations
BoardofDirectors.(2008BarQuestion)

Q: May an Er solicit questions, suggestions and


complaints from Ees even though the Ees are
representedbyaunion?

A:Yes,provided:

1. The CB representative executes an


agreementwaivingtherighttobepresent
on any occasion when Ee grievances are
beingadjustedbytheEr;and
2. Er acts strictly within the terms of his
waiveragreement.

Q:ThehotelunionfiledaNoticeofStrikewiththe
NCMBduetoULPagainsttheDiamondHotelwho
refused to bargain with it. The hotel advised the
unionthatsinceitwasnotcertifiedbytheDOLEas
the exclusive bargaining agent, it could not be

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recognized as such. Whether the Union may
bargaincollectively?

A: No. Art. 255 of the LC declares that only the


labor organization designated or selected by the
majority of the Ees in an appropriate collective
bargaining (CB) unit is the exclusive representative
oftheemployees(Ees)insuchunitforthepurpose
of CB. The union is admittedly not the exclusive
representative of the majority of the Ees of the
hotel, hence, it could not demand from the hotel
the right to bargain collectively in their behalf.
(Manila Diamond Hotel v. Manila Diamond Hotel
EesUnion,G.R.No.158075,June30,2006)

Q: Are probationary Ees allowed to vote at the


timeofthecertificationelections?

A: Yes. Under Art. 255 of the LC the labor


organizationdesignatedorselectedbythemajority
oftheEesinanappropriatebargainingunitshallbe
the exclusive representative of the Ees in such unit
for purposes of CB. CB covers all aspects of the
employment relation and the resultant CBA
negotiatedbythecertifiedunionbindsallEesinthe
bargaining unit. Hence, all rank and file Ees,
probationary or permanent, have a substantial
interest in the selection of the bargaining
representative. The LC makes no distinction as to
their employment status as basis for eligibility in
supporting the petition for certification election.
Thelawrefersto"all"theEesinthebargainingunit.
Alltheyneedtobeeligibletosupportthepetitionis
tobelongtothe"bargainingunit."Theprovisionin
theCBAdisqualifyingprobationaryEesfromvoting
cannotoverridetheconstitutionallyprotectedright
of workers to selforganization, as well as the
provisions of the LC and its implementing rules on
certification elections and jurisprudence. A law is
readinto,andformspartof,acontract.Provisions
inacontractarevalidonlyiftheyarenotcontrary
tolaw,morals,goodcustoms,publicorderorpublic
policy. (NUWHRAINMPHCv.SLE,G.R.No.181531,
July31,2009)

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RECRUITMENT AND PLACEMENT


B.

RECRUITMENTANDPLACEMENT

1. RECRUITMENTOFLOCALANDMIGRANT
WORKERS

a.RecruitmentandPlacement

Q:Whoisaworker?

A: Any member of the labor force, whether


employedorunemployed.(Art.13[a],LC)

Q:Whatisrecruitmentandplacement?

A:
1. Any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring
orprocuringworkers;and
2. Includes referrals, contact services,
promisingoradvertisingforemployment,
locally or abroad, whether for profit or
not.(Art.13[b],LC)

Q:Whataretheessentialelementsindetermining
whether
one
is
engaged
in
recruitment/placement?

A:Itmustbeshownthat:

1. The accused gave the complainant the


distinct impression that she had the
power or ability to send the complainant
forwork,
2. Suchthatthelatterwasconvincedtopart
with his money in order to be so
employed. (People v. Goce, G.R. No.
113161,Aug.29,1995)

Q: Who is deemed engaged in recruitment and


placement?

A: Any person or entity which, in any manner,


offers or promises for a fee employment to 2 or
morepersons.(Art.13[b],LC)

Q:Whatistheruleinrecruitmentandplacement?

A: GR: No person or entity other than the public


employment offices, shall engage in the
recruitmentandplacementofworkers

XPN:
1. Construction contractors if authorized by
the DOLE and Construction Industry
Authority
2. Other persons or entities as may be
authorizedbytheSLE

3.
4.
5.
6.
7.
8.

Members of the diplomatic corps (but


hiringmustgothroughPOEA)
Publicemploymentoffices
Privaterecruitmentoffices
Privateemploymentagencies
POEA
Shipping or manning agents or
representatives
Namehires

9.

Q:Whoarenamehires?

A: They are individual workers who are able to


securecontractsforoverseasemploymentontheir
own efforts and representations without the
assistance or participation of any agency. Their
hiring,nonetheless,shallpassthroughthePOEAfor
processing purposes. (Part III, Rule III, POEA Rules
Governing Overseas Employment as amended in
2002)

Q: What if employment is offered to only one


person?

A:Immaterial.Thenumberofpersonsdealtwithis
notanessentialingredientoftheactofrecruitment
andplacementofworkers.Theprovisomerelylays
down a rule of evidence that where a fee is
collected in consideration of a promise or offer of
employmentto2ormoreprospectiveworkers,the
individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment
and placement. The words "shall be deemed"
create that presumption. (People v. Panis, G.R. L
5867477,July11,1986)

Q:Whatisaprivateemploymentagency?

A:Anypersonorentityengagedintherecruitment
and placement of workers for a fee which is
charged,directlyorindirectly,fromtheworkersor
employersorboth.

Q:Whatisaprivaterecruitmentagency?

A: It is any person or association engaged in the


recruitment and placement of workers without
charging any fee, directly or indirectly, from the
workersoremployers.

Q:Whoisaseaman?

A: Any person employed in a vessel engaged in


maritimenavigation.

Q:Whatisoverseasemployment?

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A: It is employment of a worker outside the
Philippines.

Q:WhoisanoverseasFilipinoworker(OFW)?

A:Apersonwhoistobeengaged,isengagedorhas
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 military or non
commercial purposes or on an installation located
offshore or on the high seas; to be used
interchangeably with migrant worker. (Sec.2, R.A.
10022amendingR.A.8042)

Q:Whoisanemigrant?

A:Anyperson,workerorotherwise,whoemigrates
toaforeigncountrybyvirtueofanimmigrantvisa
or resident permit or its equivalent in the country
ofdestination.

b.IllegalRecruitment,Art.38(Local),Sec.6,Migrant
WorkersAct,RA8042

(a)Licensev.Authority

Q:Whatisalicense?

A: It is issued by DOLE authorizing a person or


entitytooperateaprivateemploymentagency.

Q:WhatisanAuthority?

A:ItisadocumentissuedbytheDOLEauthorizing
a person or association to engage in recruitment
and placement activities as a private recruitment
entity.

Q: Who is a nonlicensee / nonholder of


authority?

A:Anyperson,corporationorentity:

1. Whichhasnotbeenissuedavalidlicense
orauthoritytoengageinrecruitmentand
placement by the Secretary of Labor and
Employment(SLE)or
2. Whose license or authority has been
suspended, revoked or cancelled by the
POEAortheSLE

Q:Whatarethegroundsforrevocationoflicense?

A:
1. Incurring an accumulated 3 counts of
suspension by an agency based on final

10

andexecutoryorderswithintheperiodof
validityofitslicense
2. Violationsoftheconditionsoflicense
3. Engaging in acts of misrepresentation for
the purpose of securing a license or
renewal
4. Engagingintherecruitmentorplacement
of workers to jobs harmful to the public
healthormoralityortothedignityofthe
country.(Sec.3,RuleI,BookVI,Rulesand
Regulations
Governing
Overseas
Employment)

Q: What are the grounds for suspension or


cancellationoflicense?

A:
1. ProhibitedactsunderArt.34
2. Publishing job announcements w/o
POEAsapproval
3. Chargingafeewhichmaybeinexcessof
theauthorizedamountbeforeaworkeris
employed
4. Deploying workers w/o processing
throughPOEA
5. Recruitment in places outside its
authorized area. (Sec. 4, Rule II, Book IV,
POEARules)

Q:Isthelicenseorauthoritytransferable?

A:No,theyarenontransferable.(Art.29)

Q:ARecruitmentandPlacementAgencydeclared
voluntary bankruptcy. Among its assets is its
licensetoengageinbusiness.Isthelicenseofthe
bankrupt agency an asset which can be sold in
publicauctionbytheliquidator?

A: No, because of the nontransferability of the


license to engage in recruitment and placement.
TheLC(Art.29)providesthatnolicensetoengage
inrecruitmentandplacementshallbeuseddirectly
or indirectly by any person other than the one in
whose favor itwas issued normay such license be
transferred, conveyed or assigned to any other
personorentity.Itmaybenotedthatthegrantof
a license is a governmental act by the DOLE based
on personal qualifications, and citizenship and
capitalization requirements. (Arts.2728, LC). (1998
BarQuestion)

Note:Changeofownershiporrelationshipofasingle
proprietorship licensed to engage in overseas
employment shall cause the automatic revocation of
thelicense.

Q: Concerned Filipino contract workers in the


Middle East reported to the DFA that XYZ, a

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RECRUITMENT AND PLACEMENT


private recruitment and placement agency, is
covertly transporting extremists to terrorist
trainingcampsabroad.Intelligenceagenciesofthe
govt allegedly confirmed the report. Upon being
alerted by the DFA, the DOLE issued orders
cancelling the licenses of XYZ, and imposing an
immediatetravelbanonitsrecruitsfortheMiddle
East. XYZ appealed to the Office of the President
to reverse and set aside the DOLE orders, citing
damages from loss of employment of its recruits,
and violations of due process including lack of
notice and hearing by DOLE. The DOLE in its
answer claimed the existence of an emergency in
the Middle East which required prompt measures
to protect the life and limb of OFWs from a clear
and present danger posed by the ongoing war
against terrorism. Should the DOLE orders be
upheldorsetaside?

A:
1. TheDOLEordercancellingthelicensesof
XYZ is void because a report that an
agencyiscovertlytransportingextremists
isnotavalidgroundforcancellationofa
Certificate of Registration (Art. 239, LC
and there is failure of due process as no
hearing was conducted prior to the
cancellation(Art.238,LC).

2. TheDOLEorderimposingthetravelbanis
valid because it is a valid exercise of
police power to protect the national
interest (Sec. 3, Art. XIII, Constitution on
full protection to labor safety of workers)
and on the rule making authority of the
SLE. (Art. 5, LC; Phil. Assn. of Service
Exporters v. Drilon, G.R. No. 81958, June
30,1988).(2004BarQuestion)

Q:Whoarethepersonsprohibitedfromengaging
thebusinessofrecruitingmigrantworkers?

A:
1. UnlawfulforanyofficialorEeofthe:
a. DOLE
b. POEA
c. Overseas
Workers
Welfare
Administration(OWWA)
d. DFA
e. Other govt agencies involved in the
implementationofthisAct
th
2. Their relatives within the 4 civil degree
of consanguinity or affinity, to engage,
directly or indirectly in the business of
recruiting migrant workers. (Sec. 8, R.A.
8042)

(b)IllegalRecruitment

Q:WhataretheelementsofIllegalRecruitment?

A:
1. Offender is a nonlicensee or nonholder
of authority to lawfully engage in the
recruitment/placementofworkers
2. Offenderundertakes:
a. Any act of canvassing, enlisting,
contracting, transporting, utilizing,
hiring or procuring workers, and
includes referrals, contact services,
promising or advertising for
employment, locally or abroad,
whetherforprofitornot(Art.13[b]);
or
b. Any of prohibited practices under
Art.34

Q:WhenisthereSimpleIllegalRecruitment?
A:Itisconsideredsimpleillegalrecruitmentwhen
itinvolveslessthanthree(3)victimsorrecruiters.

Q: Larry Domingo was accused of the crime of


illegal recruitment. He argued that he issued no
receiptordocumentinwhichheacknowledgedas
havingreceivedanymoneyforthepromisedjobs.
Hence, he should be free him from liability. Was
Larryengagedinrecruitmentactivities?

A: Yes. Even if at the time Larry was promising


employment no cash was given to him, he is still
considered as having been engaged in recruitment
activities, since Art.13(b) of the LC states that the
act of recruitment may be for profit or not. It
sufficesthatLarrypromisedorofferedemployment
for a fee to the complaining witnesses to warrant
his conviction for illegal recruitment. (People v.
Domingo,G.R.No.181475,April7,2009,J.Carpio
Morales)

Q:WhatisthedifferencebetweentheLCandR.A.
8042 or the Overseas Filipinos and Overseas
MigrantWorkersAct?

A:
LC(Art.38)

R.A.8042,asamendedbyRA
10022

Localrecruitment

Appliestorecruitmentfor
overseasemployment

Illegal recruitment
underArt.38means
any
recruitment
activity
including
prohibited
acts
under
Art.
34
committed by non

IllegalrecruitmentunderSec.6
meansanyrecruitmentactivity
committed by nonlicensees/
nonholders of authority or
prohibited acts (same as Art.
34,LC)

11

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UST GOLDEN NOTES 2011


licensees or non
holdersofauthority.

Added to the following in the


listofprohibitedacts:
1. Failure to actually deploy
withoutvalidreason;
2. Failure to reimburse
expenses incurred by the
workerinconnectionwith
his/her documentation
and
processing
for
purposesofdeployment;
3. To allow a nonFilipino
citizen to head or
manage a licensed
recruitment/ manning
agency.

Q:Howdoesoneproveillegalrecruitment?

A: It must be shown that the accused gave the


distinctimpressionthathehadthepowerorability
tosendcomplainantsabroadforworksuchthatthe
latter were convinced to part with their money in
ordertobedeployed.

Q: May a licensee or holder of authority be held


liableforillegalrecruitment?

A: Yes, any person (whether nonlicensee, non


holderofauthority,licenseeorholderofauthority)
who commits any of the prohibited acts, shall be
liableforIllegalrecruitment.(R.A.8042)

Q: When is illegal recruitment considered as


economicsabotage?

A:Whenitiscommitted:

1. Byasyndicatecarriedoutby3ormore
persons conspiring/confederating with
oneanotheror
2. In large scale committed against 3 or
more persons individually or as a group.
(Sec.6,10022)

Q:Whileherapplicationforrenewalofherlicense
torecruitworkersforoverseasemploymentwas
still pending Maryrose Ganda recruited Alma and
her 3 sisters, Ana, Joan, and Mavic, for
employment as housemates in Saudi Arabia.
Maryroserepresentedtothesistersthatshehada
license to recruit workers for overseas
employment and demanded and received
P30,000.00 from each of them for her services.
However, her application for the renewal of her
license was denied, and consequently failed to
employ the 4 sisters in Saudi Arabia. The sisters
charged Maryrose with large scale illegal
recruitment. Testifying in her defense, she
declaredthatsheactedingoodfaithbecauseshe

12

believed that her application for the renewal of


her license would be approved. She adduced in
evidence the Affidavits of Desistance which the
four private complainants had executed after the
prosecution rested its case. In the said affidavits,
they acknowledge receipt of the refund by
MaryroseofthetotalamountofP120,000.00and
indicated that they were no longer interested to
pursuethecaseagainsther.Resolvethecasewith
reasons.

A: Illegal recruitment is defined by law as any


recruitment activities undertaken by nonlicenses
or nonholders of authority. (People v. Senoron,
G.R.No.119160,Jan.30,1997)Anditislargescale
illegal recruitment when the offense is committed
against 3 or more persons, individually or as a
group. (Art. 38[b], LC) In view of the above,
Maryroseisguiltyoflargescaleillegalrecruitment.
HerdefenseofGFandtheAffidavitofDesistanceas
well as the refund given will not save her because
R.A. No. 8042 is a special law, and illegal
recruitmentis malumprohibitum.(Peoplev.Saulo,
G.R. No. 125903, Nov. 15, 2000). (2005 Bar
Question)

Q:SometimeinthemonthofMarch1997,inthe
CityofLasPias,Bugobymeansoffalsepretenses
and fraudulent representation convinced Dado to
givetheamountofP120,000.00forprocessingof
his papers so that he can be deployed to Japan.
Dado later on found out that Bugo had
misappropriated, misapplied and converted the
moneytoherownpersonaluseandbenefit.Can
Dado file the cases of illegal recruitment and
estafasimultaneously?

A:Yes,illegalrecruitmentandestafacasesmaybe
filed simultaneously or separately. The filing of
charges for illegal recruitment does not bar the
filing of estafa, and vice versa. Bugos acquittal in
theillegalrecruitmentcasedoesnotprovethatshe
isnotguiltyofestafa.Illegalrecruitmentandestafa
are entirely different offenses and neither one
necessarilyincludesorisnecessarilyincludedinthe
other. A person who is convicted of illegal
recruitmentmay,inaddition,beconvictedofestafa
underArticle315,par.2(a)oftheRPC.Inthesame
manner, a person acquitted of illegal recruitment
maybeheldliableforestafa.Doublejeopardywill
not set in because illegal recruitment is malum
prohibitum,inwhichthereisnonecessitytoprove
criminal intent, whereas estafa is malum in se, in
theprosecutionofwhich,proofofcriminalintentis
necessary.(Syv.People,G.R.No.183879,April14,
2010)

Q:DistinguishIllegalRecruitmentfromEstafa

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RECRUITMENT AND PLACEMENT

A:
ILLEGALRECRUITMENT
Malumprohibitum,thus:
1. Criminal intent is NOT
necessary
2. itisacrimewhichinvolves
moralturpitude

It is not required that it be


shown that the recruiter
wrongfully
represented
himself as a licensed
recruiter

NOTE: It is enough that the


victims were deceived as they
relied
on
the
misrepresentationandscheme
that caused them to entrust
their money in exchange of
whattheylaterdiscoveredwas
a vain hope of obtaining
employmentabroad

ESTAFA
Maluminse,
thus:
1. criminal intent is
necessary
2. crime
which
involves
moral
turpitude

Accused defrauded
another by abuse of
confidence, or by
meansofdeceit

NOTE: It is essential
that
the
false
statement
or
fraudulent
representation
constitutes the very
cause or the only
motive which induces
thecomplainanttopart
withthethingofvalue

Illegalrecruitmentandestafacasesmaybefiled
simultaneouslyorseparately.Thefilingofchargesfor
illegalrecruitmentdoesnotbarthefilingofestafa,and
viceversa.
Doublejeopardywillnotset

(c)Liabilities

Q:Whatistheliabilityoftheprivateemployment
agency and the principal or foreignbased
employer?

A: They are jointly and severally liable for any


violation of the recruitment agreement and the
contractsofemployment.

Note: This joint and solidary liability imposed by law


againstrecruitmentagenciesandforeignErsismeant
to assure the aggrieved worker of immediate and
sufficient payment of what is due him. If the
recruitment/placementagencyisajuridicalbeing,the
corporate officers and directors and partners as the
casemaybe,shallthemselvesbejointlyandsolidarily
liable with the corporation or partnership for the
claims and damages. (Becmen Service Exporter and
Promotion v. Cuaresma, G.R. Nos. 18297879, April 7,
2009)

Q:Whatisthetheoryofimputedknowledge?

A: A rule in insurance law that any information


materialtothetransaction,eitherpossessedbythe

agentatthetimeofthetransactionoracquiredby
him before its completion, is deemed to be the
knowledge of the principal, at least so far as the
transaction is concerned, even though in fact the
knowledgeisnotcommunicatedtotheprincipalat
all.(Leonorv.FilipinasCompania,48OG243)
Q: Sunace International Management Services
(Sunace),deployedtoTaiwanMontehermozoasa
domestic helper under a 12month contract
effective Feb. 1, 1997. The deployment was with
the assistance of a Taiwanese broker, Edmund
Wang, President of Jet Crown International Co.,
Ltd.Afterher 12monthcontractexpiredonFeb.
1,1998,Montehermozocontinuedworkingforher
Taiwanese employer for two more years, after
which she returned to the Philippines on Feb. 4,
2000. Shortly after her return she file before the
NLRC against Sunace, one Perez, the Taiwanese
broker,andtheemployerforeignprincipalalleging
thatshewasjailedforthreemonthsandthatshe
was underpaid. Should Sunace be held liable for
the underpayment for the additional two years
that she worked for her Taiwanese employer
underthetheoryofimputedknowledge?

A: No, the theory of imputed knowledge ascribes


the knowledge of the agent, Sunace, to the
principal Taiwanese employer, not the other way
around. The knowledge of the principalforeign
employer cannot, therefore, be imputed to its
agentSunace.

TherebeingnosubstantialproofthatSunaceknew
of and consented to be bound under the 2year
employment contract extension, it cannot be said
to be privy thereto. As such, it and its owner
cannot be held solidarily liable for and of
Montehermozos claims arising from the 2year
employment extension. (Sunace v. NLRC, G.R. No.
161757,Jan.25,2006)

(d)Preteminationofcontractofmigrantworker

Q: Serrano, a seafarer, was hired by Gallant


Maritime and Marlow Navigation Co. for 12
months as Chief Officer. On the date of his
departure, he was constrained to accept a
downgradedemploymentcontractfortheposition
of Second Officer, upon the assurance that he
wouldbemadeChiefOfficerafteramonth.Itwas
notdone;hence,herefusedtostayonasSecond
Officer and was repatriated to the Phils. He had
served only 2 months & 7 days of his contract,
leaving an unexpired portion of 9 months & 23
days.

Serrano filed with the LA a Complaint against


Gallant Maritime and Marlow for constructive

13

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dismissal and for payment of his money claims.
The LA rendered a favorable decision to Serrano
awarding him $8,770.00, representing his salary
for 3 months of the unexpired portion of his
contract of employment applying R.A. 8042, Sec
10,par5:

MoneyClaims.Incaseofterminationofoverseas
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 12% per annum,
plus his salaries for the unexpired portion of his
employment contract or for 3 months for every
yearoftheunexpiredterm,whicheverisless.

Isthesubjectclauseconstitutional?

A: No. The subject clause contains a suspect


classification in that, in the computation of the
monetary benefits of fixedterm employees who
are illegally discharged, it imposes a 3month cap
ontheclaimofOFWswithanunexpiredportionof
one year or more in their contracts, but none on
the claims of other OFWs or local workers with
fixedtermemployment.Thesubjectclausesingles
outoneclassificationofOFWsandburdensitwitha
peculiardisadvantage.

TheclauseisaviolationoftherightofSerranoand
other OFWs to equal protection and right to
substantive due process, for it deprives him of
property, consisting of monetary benefits, without
anyexistingvalidgovernmentalpurpose.

Furthermore, prior to R.A. 8042, all OFWs,


regardless of contract periods or the unexpired
portionsthereof,weretreatedalikeintermsofthe
computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a
uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their
employment contracts. The same applies local
workerswithfixedtermemployment.

Thus, Serrano is entitled to his salaries for the


entireunexpiredperiodofninemonthsand23days
of his employment contract, pursuant to law and
jurisprudence prior to the enactment of RA 8042.
(Serrano v. Gallant Maritime Services & Marlow
NavigationCo.,Inc.,G.R.No.167614,Mar.24,2009)

c.DirectHiring

Q:WhatisDirecthiring?

A: It is when an employer hires a Filipino worker


for overseas employment without going through

14

thePOEAorentitiesauthorizedbytheSecretaryof
Labor.

Q:Whatisthebanondirecthiring?

A: GR: An Er may only hire Filipino worker for


overseas employment through POEA or
entitiesauthorizedbyDOLE.

XPN:
Directhiringby
1. Internationalorganizations
2. Namehires
3. Membersofthediplomaticorganizations
4. OtherErsasmaybeallowedbyDOLE

Q:Whyisdirecthiringprohibited?

A:
1. To ensure the best possible terms and
conditionsofemploymentfortheworker.
2. ToassuretheforeignErthathehiresonly
qualifiedFilipinoworkers.
3. To ensure full regulation of employment
inordertoavoidexploitation.

2.REGULATIONANDENFORCEMENT

a.Remittanceofforeignexchangeearnings

Q: What is the rule on remittance of foreign


exchangeearnings?

A:GR:ItshallbemandatoryforallOFWstoremita
portion of their foreign exchange earnings
to their families, dependents, and/or
beneficiaries ranging from 50% 80%
depending on the workers kind of job.
(RuleVIII,BookIII,POEARules)

XPN:
1. Theworkersimmediatefamilymembers,
beneficiariesanddependentsareresiding
withhimabroad
2. ImmigrantsandFilipinoprofessionalsand
employeesworkingwiththeUNagencies
orspecializedbodies
3. Filipino servicemen working in U.S.
military installations. (Resolution No. 1
83, InterAgency Committee for
ImplementationofE.O.857)

Q:Whatistheeffectoffailuretoremit?

A:
1. WorkersShallbesuspendedorremoved
from the list of eligible workers for
overseasemployment.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
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RECRUITMENT AND PLACEMENT


2.

Employers Will be excluded from the


overseas employment program. Private
employment agencies shall face
cancellation or revocation of their
licenses or authority to recruit. (Sec. 9,
E.O.857)

b.ProhibitedActivities

Q: What are prohibited practices in


recruitment/placement(Art.34.)?

A:
1. Furnishing or publishing any false
notice/information/document related to
recruitment/employment
2. FailuretofilereportsrequiredbySLE
3. Inducingorattemptingtoinduceaworker
alreadyemployedtoquithisemployment
in order to offer him another unless the
transfer is designed to liberate a worker
fromoppressivetermsandconditions
4. Recruitment/placement of workers in
jobs harmful to public health or morality
ortothedignityofthecountry
5. Engaging directly or indirectly in the
managementofatravelagency
6. Substituting or altering employment
contractswithoutapprovalofDOLE
7. Chargingoracceptinganyamountgreater
than that specified by DOLE or make a
worker pay any amount greater than
actuallyreceivedbyhim
8. Committing any act of misrepresentation
tosecurealicenseorauthority
9. Influencingorattemptingtoinfluenceany
person/entity not to employ any worker
who has not applied of employment
throughhisagency
10. Obstructing or attempting to obstruct
inspection by SLE or by his
representatives
11. Withholdingordenyingtraveldocuments
from applicant workers before departure
for monetary considerations other than
authorizedbylaw
12. Granting a loan to an OFW which will be
used for payment of legal and allowable
placementfees
13. Refusingtocondoneorrenegotiatealoan
incurredbyanOFWafterhisemployment
contract
has
been
prematurely
terminatedthroughnofaultofhisorher
own
14. For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the

processing
of
pending
workers'
applications;and
15. For a recruitment/manning agency or a
foreign principal/ Er to pass on the OFW
or deduct from his or her salary the
payment of the cost of insurance fees,
premium or other insurance related
charges, as provided under the
compulsoryworker'sinsurancecoverage
16. Imposing a compulsory and exclusive
arrangementwherebyanOFWisrequired
to:
a. Avail a loan only from specifically
designated institutions, entities or
persons
b. Toundergohealthexaminationsonly
fromspecificallydesignatedmedical,
entities or persons, except seafarers
whose medical examination cost is
shoulderedbytheshipowner
c. Toundergotrainingofanykindonly
fromdesignatedinstitutions,entities
or
persons,
except
for
recommendatory
trainings
mandated by principals/shipowners.
(Sec.6,R.A.10022)

c.RegulatoryandVisitorialPowersoftheLabor
Secretary

Q: What are the regulatory powers of the


SecretaryofLaborandEmployment(SLE)?

A:
1. Restrictandregulatetherecruitmentand
placementactivitiesofallagencies
2. Issue orders and promulgate rules and
regulations

Q:Whatconstitutevisitorialpower?

A:
1. Access to employers records and
premisesatanytimeofthedayornight,
wheneverworkisbeingundertaken
2. Tocopyfromsaidrecords
3. Question any employee and investigate
any fact, condition or matter which may
be necessary to determine violations or
whichmayaidintheenforcementofthe
Labor Code and of any labor law, wage
order, or rules and regulation issued
pursuantthereto.

Q: Give 4 instances where the visitorial power of


theSLEmaybeexercisedundertheLaborCode.

A:Powerto:

15

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
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Facultad de Derecho Civil
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VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

provisions

1.

2.

3.
4.

Inspect books of accounts and records of


any person or entity engaged in
recruitment and placement, require it to
submit reports regularly on prescribed
forms and act in violations of any
provisions of the LC on recruitment and
placement.(Art.37)
Have access to employers records and
premises to determine violations of any
provisions of the LC on recruitment and
placement.(Art.128)
Conduct industrial safety inspections of
establishments.(Art.165)
Inquire into the financial activities of
legitimate labor organizations (LLO) and
examinetheirbooksofaccountsuponthe
filing of the complaint under oath and
dulysupportedbythewrittenconsentof
at least 20% of the total membership of
theLOconcerned.

Q:CanSLEissuesearchwarrantsorwarrantsof
arrest?

A: No. Only a judge may issue search and arrest


warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE the
powertoissuesearchorarrestwarrants.Thelabor
authoritiesmustgothroughthejudicialprocess.

d.PenaltiesforIllegalRecruitment

Q:Whatistheconsequenceofconvictionofillegal
recruitment(IR)?

A:
PENALTIES(underR.A.10022)
Offender/Offense
IRaseconomic
sabotage

Provided:
1. Ifpersonillegally
recruitedisbelow
18yearsofageor
2. Illegal
recruitmentis
committedbya
nonlicensee/non
holder
Anypersonfound
guiltyofillegal
recruitment
Anypersonfound
guiltyofthe
prohibitedacts
Licensee/holderof
authorityviolates

16

Penalty
Lifeimprisonment+
fineofP2MP5M

Maximumpenaltyshall
beimposed

12yrsand1day20yrs
imprisonment;or
Fine:P1MP2M
6yrsand1day12yrs
imprisonment;or
FineofP500KP1M
25yrsimprisonment;or
Fine:P10KP50K;

orboth

Nonlicensee/non
holderofauthority
violatesprovisions
Corporation,
partnership,
association,orentity

Alien

Ineverycase

48yrsimprisonment;or
Fine:P20KP100K
orboth
Penaltyimposedupon
officer/sresponsiblefor
violation
PenaltiesprescribedunderRA
10022,
+
Deportationwithoutfurther
proceedings
Automaticrevocationof
licenseorauthorityandall
permitsandprivilegesofthe
recruitmentormanning
agency,lendinginstitutions,
trainingschoolormedical
clinic

Q: What are the remedies under the Migrant


WorkersActandhowmaytheybeenforced?

A:
CRIMINALACTIONS
RTC
Provinceorcity:
1. Wheretheoffensewascommittedor
2. Wheretheoffendedpartyactuallyresidesatthe
sametimeofthecommissionoftheoffense
MONEYCLAIMS
NLRC
Original and exclusive jurisdiction to hear and decide
claimsarisingoutofanErEerelationshiporbyvirtue
of any law or contract involving Filipino workers for
overseas deployment including claims for actual,
moral,exemplaryandotherformsofdamages.
Theliabilityoftheprincipal/Erandtherecruitment/
placement agency for any and all claims shall be
jointandseveral.
The performance bond to de filed by the
recruitment/placementagencyshallbeanswerable
for all money claims or damages that may be
awardedtotheworkers.
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
partnershipfortheclaimsanddamages.
ADMINISTRATIVEACTIONS
POEA

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

RECRUITMENT AND PLACEMENT


Originalandexclusivejurisdictiontohearanddecide:
1. All cases which are administrative in character,
involving or arising out of violations of rules and
regulations relating to licensing and registration of
recruitment and employment agencies or entities
and
2. Disciplinaryaction(DA)casesandotherspecialcases
whichareadministrativeincharacter,involvingErs,
principals,contractingpartnersandFilipinomigrant
workers.
a.ItmaybefiledwiththePOEAAdjudicationOffice
or the DOLE/POEA regional office of the place
wherethecomplaintappliedorwasrecruitedat
the option of the complainant. The office with
which the complaint was first filed shall take
cognizanceofthecase.
b.DAcasesandotherspecialcases,asmentioned
in the preceding Section, shall be filed with
POEAAdjudicationOffice.
PERIODS
MandatoryPeriodforResolutionofIllegal
RecruitmentCases
Thepreliminaryinvestigations(PI)ofcasesunderR.A.
10022 shall be terminated within a period of 30
calendardaysfromthedateoftheirfiling.
IfthePIisconductedbya IfthePIisconductedby
prosecutionofficeranda
ajudgeandaprima
primafaciecaseis
faciecaseisfoundto
established
exist
Prosecutionofficer
Informationshallbefiled
within48hoursfromthe
incourtwithin24hours
dateofreceiptofthe
fromtheterminationof
recordsofthecase.(Sec.
theinvestigation
11)
PrescriptivePeriodforIllegalRecruitmentCases
SimpleIllegalRecruitment

EconomicSabotage

Within5yrsfromthetime
illegalrecruitmenthas
happened

Within20yrsfromthe
timeillegalrecruitment
hashappened.(Sec.
12,R.A.8042)

Q: Is compromise agreement on money claims


allowed?

A: Yes. Consistent with the policy encouraging


amicable settlement of labor disputes, Sec. 10 of
R.A.8042allowsresolutionbycompromiseofcases
filedwiththeNLRC.

Q:Whenshallcompromiseagreementsonmoney
claimsbepaid?

A: Any compromise/amicable settlement or


voluntary agreement on money claims inclusive of
damages shall be paid within 4 months from the
approval of the settlement by the appropriate
authority.

DoOTandleavepayformpartofthesalarybasis
inthecomputationofthemonetaryaward?

A: No. The word salaries in Sec. 10(5) does not


include overtime and leave pay. For seafarers,
DOLE Department Order No. 33, series 1996,
provides a Standard Employment Contract of
Seafarers,inwhichsalaryisunderstoodasthebasic
wage,exclusiveofOT,leavepayandotherbonuses;
whereas OT pay is compensation for all work
performed in excess of the regular 8 hours, and
holiday pay is compensation for any work
performedondesignatedrestdaysandholidays.
(Serrano v. Gallant Maritime Services & Marlow
Navigation Co., Inc., G.R. No. 167614, Mar. 24,
2009)

3.OTHERRELATEDTOPICS

PhilippineOverseasEmploymentAdministration

Q:WhataretheprincipalfunctionsofthePOEA?

A:
1. ProtectionoftherightofFilipinoworkers
to fair and equitable employment
practices
2. Regulation of private sector participation
in the recruitment and overseas
placement of workers by setting up a
licensingandregistrationsystem
3. Deployment of Filipino workers through
govttogovthiring
4. Formulation,
implementation,
and
monitoring of overseas employment of
Filipinoworkerstakinginto consideration
their welfare and domestic manpower
requirements
5. Shall inform migrant workers not only of
their rights as workers but also of their
rightsashumanbeings,instructandguide
theworkershowtoasserttheirrightsand
provide the available mechanism to
redress violation of their rights. (Sec. 14,
R.A.10022)
6. Implementation, in partnership with
other lawenforcement agencies, of an
intensified program against illegal
recruitment activities. (Sec. 14, R.A.
10022)

Q:MaythePOEA,atanytimeterminateorimpose
abanonemploymentofmigrantworkers?

A: Yes,in consultationwiththeDFAbasedonthe
ff.grounds:

2. InpursuitoftheNationalInterestor

17

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


3.

When public welfare so requires. (Sec. 4


R.A.10022)

Q: What are the minimum conditions/ provisions


ofoverseasemploymentcontracts?

A:
1. Guaranteed wages for regular hours and
overtime, not lower than the minimum
wageprescribedinalloftheff:
a. Thehostcountry
b. Bilateralagreementsorinternational
conventions ratified by the host
countryandthePhilippines
c. ThePhilippines
2. Free transportation to and from the
worksiteoroffsettingbenefit
3. Free food and accommodation or
offsettingbenefit
4. Just/authorized causes of termination of
thecontractorservicesoftheworker

Note: An agreement that diminishes the Ees pay and


benefits as contained in a POEAapproved contract is
void, unless such subsequent agreement is approved
bythePOEA.

Q:WhatistheruleondeploymentofOFWs?

A:TheStateshallallowthedeploymentofOFWs:

1. Only in countries where the rights of


Filipinomigrantworkersareprotected.
2. To vessels navigating the foreign seas or
to installations located offshore or on
high seas whose owners/Ers are
compliant with international laws and
standards that protect the rights of
migrantworkers.
3. To companies and contractors with
international operations: Provided, That
they are compliant with standards,
conditions and requirements, as
embodied in the employment contracts
prescribedbythePOEAandinaccordance
with internationallyaccepted standards.
(Sec.3,R.A.10022amendingR.A.8042)

Q: What are the guarantees of the receiving


countryfortheprotectionoftherightsofOFWs?

A:
1. It has existing labor and social laws
protectingtherightsofworkers,including
migrantworkers;
2. It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers,includingmigrantworkers;and

18

3.

Ithasconcludedabilateralagreementor
arrangementwiththegovernmentonthe
protectionoftherightsofOFWs..(Sec.3,
R.A.10022amendingR.A.8042)

Provided, that the receiving country is taking


positive,concretemeasurestoprotecttherightsof
migrant workers in furtherance of any of the
guarantees.

Note:Intheabsenceofaclearshowingthatanyofthe
guarantees exists in the country of destination of the
migrant workers, no permit for deployment shall be
issuedbythePOEA.

Q:Whatistheruleonrepatriation?

A:GR:Therepatriationofthe:
1. Worker and the transport of his personal
belongings shall be the primary
responsibility of the agency which
recruited or deployed the worker
overseas.
2. Remains and transport of the personal
belongings of a deceased worker and all
costsattendanttheretoshallbeborne
bytheprincipaland/orthelocalagency.

XPNs:
1. If the termination of employment is due
solely to the fault of the worker, the
principal/ Er or agency shall not be
responsible for the repatriation of the
formerand/orhisbelongings
2. In cases of war, epidemic, disaster or
calamities, natural or manmade, and
other similar event, and where the
principalorrecruitmentagencycannotbe
identified,theOverseasWorkersWelfare
Administration, in coordination with
appropriate international agencies, shall
take charge of the repatriation. (Sec.15,
R.A.8042)

Q: What is the rule on mandatory repatriation of


underagemigrantworkers?

A: Upon discovery or being informed of the


presenceofmigrantworkerswhoseagesfallbelow
the minimum age requirement for overseas
deployment, the responsible officers in the foreign
service shall without delay repatriate said workers
and advise the DFA through the fastest means of
communication available of such discovery and
other relevant information. The license of a
recruitment/manning agency which recruited or
deployed an underage migrant worker shall be
automatically revoked and shall be imposed a fine

LABORLAWTEAM:
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RECRUITMENT AND PLACEMENT


of not less than P500,000 but not more than
P1,000,000.(Sec.9,R.A.10022)

Q: What are the regulatory and adjudicatory


functionsofthePOEA?

A:
1. Regulatory It regulates the private
sector participation in the recruitment
and overseas placement of workers
through its licensing and registration
system.
2. Adjudicatory
a. Administrative cases involving
violations of licensing rules and
regulations and registration of
recruitment
and
employment
agenciesorentities
b. Disciplinary action cases and other
special
cases
which
are
administrative in character involving
employers, principals, contracting
partnersandFilipinomigrants.

Q:Whatarethegroundsfordisciplinaryactionof
OFWs?

A:UnderR.A.8042,theseare:
1. Prostitution
2. Unjustrefusaltodepartfortheworksite
3. Gunrunning or possession of deadly
weapons
4. Vandalism or destroying company
property
5. Violationofthelawsandsacredpractices
ofthehostcountryandunjustifiedbreach
ofemploymentcontract
6. Embezzlement of funds of the company
orfellowworkerentrustedfordeliveryto
relativesinthePhils.
7. Creatingtroubleattheworksiteorinthe
vessel
8. Gambling
9. Initiating or joining a strike or work
stoppage where the laws of the host
countryprohibitsstrikesorsimilaractions
10. Commission of felony punishable by
Philippinelawsorbythehostcountry
11. Theftorrobbery
12. Drunkenness
13. Drugaddictionorpossessionortrafficking
ofprohibiteddrugs
14. Desertionorabandonment

Q:Whatisthedistinctionbetweenthejurisdiction
oftheLAandPOEA?

A:

JURISDICTION
LaborArbiter
Original and exclusive
jurisdiction over all
claims arising out of
ErEe relationship or
byvirtueofanylawor
contract
involving
OFWsincludingclaims
for:
1.Actual
2.Moral
3.Exemplary
4.Other forms of
damages. (Sec. 10,
R.A.8042)

POEA
Original
and
exclusive
jurisdictionover:
1. All cases which are
administrative in character
relating to licensing and
registration of recruitment
andemploymentagencies

2. Disciplinary Action cases


and other special cases,
which are administrative in
character, involving Ees,
principals,
contracting
partnersandFilipinomigrant
workers. (Rule VII, Book VII,
POEARules)

Q: A seafarer was prevented from leaving the


port of Manila and refused deployment without
valid reason. His POEAapproved employment
contract provides that the employeremployee
relationship shall commence only upon the
seafarers actual departure from the port in the
point of hire. Is the seafarer entitled to relief
undertheMigrantWorkersAct,intheabsenceof
anemployeremployeerelationship?

A: Yes. Despite the absence of an employer


employee relationship, the NLRC has jurisdiction
over the seafarers complaint. The jurisdiction of
labor arbiters is not limited to claims arising from
ErEerelationships.Sec.10oftheMigrantWorkers
Act provides that the labor arbiters shall have
jurisdiction over claims arising out of an ErEe
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. Since the present case
involves the employment contract entered into by
petitionerforoverseasemployment,hisclaimsare
cognizable by the labor arbiters of the NLRC.
(Santiago v. CF Sharp Crew Management,G.R. No.
162419,July10,2007)

Q:Whatmattersfalloutsidethejurisdictionofthe
POEA?

A:
1.
Foreign judgments such claim must be
brought before regular courts. POEA is
notacourt;itisanadministrativeagency,
exercising adjudicatory or quasijudicial
functions.
2. Torts falls under the provisions of the
CivilCode.

19

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


EmploymentofNonResidentAliens

Q: What is required in the employment of non


residentaliens?

A: Any alien seeking admission to the Phil. for


employmentpurposesandanydomesticorforeign
employer (Er) who desires to engage an alien for
employmentinthePhilippines:
1. Shall obtain an employment permit from
theDOLE
2. The permit may be issued to a non
residentalienortotheapplicantErafter
adeterminationofthenonavailabilityof
a person in the Phil. who is competent,
ableandwillingatthetimeofapplication
to perform the services for which the
alienisdesired
3. For an enterprise registered in preferred
areasofinvestments,saidpermitmaybe
issueduponrecommendationofthegovt
agency charged with the supervision of
saidregisteredenterprise

Q: The DOLE issued an alien employment permit


for Earl Cone, a U.S. citizen, as sports consultant
and assistant coach for GMC. Later, the Board of
SpecialInquiryoftheCommissiononImmigration
andDeportationapprovedConesapplicationfora
changeofadmissionstatusfromtemporaryvisitor
to prearranged employee. A month later, GMC
requested that it be allowed to employ Cone as
fullfledged coach. The Dole Regional Director
grantedtherequest.TheBasketballAssociationof
the Phils. appealed theissuance of said permit to
theSLEwhocancelledConesemploymentpermit
because GMC failed to show that there is no
person in the Philippines who is competent and
willing to do the services nor that the hiring of
Cone would redound to the national interest. Is
theactofSLEvalid?

A:Yes.GMCsclaimthathiringofaforeigncoachis
anErsprerogativehasnolegalbasis.UnderArt.40
of the LC, an Er seeking employment of an alien
must first obtain an employment permit from the
DOLE. GMCs right to choose whom to employ is
limited by the statutory requirement of an
employmentpermit.(GMCv.Torres,G.R.No.9366,
April22,1991)

Art.41.ProhibitionAgainstTransferofEmployment

Q: Who are required to obtain an employment


permit?

A:GR:Onlynonresidentaliens;

20

XPNS:
1. Diplomatic services and foreign govt
officials
2. Officers and staff of intl organizations
andtheirlegitimatespouses
3. Members of governing board who has
votingrightsonly
4. Thoseexemptedbyspeciallaws
5. Owners and representatives of foreign
principals who interview Filipino
applicantsforemploymentabroad
6. Alienswhosepurposeistoteach,present
and/orconductresearchstudies
7. Resident aliens. (D.O. 7506, May 31,
2006)

Q: May the nonresident alien transfer


employment after issuance of the employment
permit?

A:Aftertheissuanceofanemploymentpermit,the
alienshallnottransfertoanotherjoborchangehis
employerwithoutpriorapprovaloftheSecretaryof
Labor.

Q: What is required for immigrants and resident


aliens?

A:AnAlienEmploymentRegistrationCertificate.

Q: What is the duration of the employment


permit?

A:GR:Minimumof1year

XPN:Unlessrevokedandsubjecttorenewal

Q:Mayaliensbeemployedinentitiesengagedin
nationalizedactivities?

A:GR:No.

XPNs:
1. Sec. of Justice specifically authorizes the
employmentoftechnicalpersonnel
2. Aliens are elected members ofthe board
of directors or governing body of
corporationsorassociationsor
3. EnterprisesregisteredundertheOmnibus
Investment Code in case of technical,
supervisory or advisory positions, but for
alimitedperiod.

LABORLAWTEAM:
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MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

RECRUITMENT AND PLACEMENT


Art.25.PrivateSectorParticipationinthe
RecruitmentandPlacementofWorkers

Q:Whataretheentitiesintheprivatesectorsthat
can participate in recruitment and placement of
workers?

A:
1. Shipping or manning agents or
representatives
2. Privaterecruitmentoffices
3. Publicemploymentoffices
4. Construction contractors if authorized by
the DOLE and Construction Industry
Authority.
5. Persons that may be authorized by the
SLE
6. Private employment agencies. (Sec. 1,
RuleVII,BookI,IRR)

Q: What are the qualificationsfor participation in


recruitmentandplacementofworkers?

A:
1. Filipino citizens, partnerships or
corporations at least 75% of the
authorized capital stock of which is
ownedandcontrolledbyFilipinocitizens;
(Art.27,LC)
2. Capitalization
a. Singleproprietorshiporpartnership
A minimum capitalization of P2
million
b. Corporation
A minimum paidup capital of P2
million
Provided,thatthosewithexistinglicenses
shall, within 4 yrs from the effectivity
hereof, increase their capitalization or
paidupcapital,asthecasemaybe,toP2
million at the rate of P250,000.00 every
year.(Art.28,LC)
3. Nototherwisedisqualifiedbylaworother
government regulations to engage in the
recruitmentandplacementofworkersfor
overseas employment. (Rule I, Part II,
POEARules)
4. Paymentofregistrationfees
5. Postingofsurety/cashbonds

Q: How will POEA regulate private sector


participation in the recruitment and overseas
placementofworkers?

A:Bysettingupalicensingandregistrationsystem.
(Sec.14,R.A.10022)

Q: Is a corporation, 70% of the authorized and


votingcapitalofwhichisownedandcontrolledby
Filipino citizens, allowed to engage in the
recruitment and placement of workers, locally or
overseas?Explainbriefly.

A: No. It is because Art. 27 of the Labor Code


requiresatleast75%.(2002BarQuestion)

Q:Whoaredisqualifiedtoengageinthebusiness
ofrecruitmentandplacementofworkers?

A:
1. Travel agencies and sales agencies of
airlinecompanies;(Art.26,LC)
2. Officers or members of the board of any
corporation or members in a partnership
engaged in the business of a travel
agency;
3. Corporationsandpartnerships,whenany
of its officers, members of the board or
partners,isalsoanofficer,memberofthe
board or partner of a corporation or
partnership engaged in the business of a
travelagency;
4. Persons, partnerships or corporations
which have derogatory records, such as
butnotlimitedtothose:
a. Certified to have derogatory record
or information by the NBI or by the
AntiIllegal Recruitment Branch of
thePOEA;
b. Against whom probable cause or
primafaciefindingofguiltforillegal
recruitment or other related cases
exists;
c. Convicted for illegal recruitment or
other related cases and/or crimes
involvingmoralturpitude;and
d. Agencies whose licenses have been
previously revoked or cancelled by
the POEA for violation of R.A. 8042,
P.D. 442 as amended and their
implementing rules and regulations
as well as these rules and
regulations.
5. Any official or Ee of the DOLE, POEA,
OWWA, DFA and other government
agencies directly involved in the
implementation of R.A. 8042 and/or any
th
of his/her relatives within the 4 civil
degreeofconsanguinityoraffinity;and
6. Personsorpartners,officersanddirectors
ofcorporationswhoselicenseshavebeen
previously cancelled or revoked for
violationofrecruitmentlaws.(Sec.2,Rule
I, 2002 Rules and Regulations on the

21

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


Recruitment and Employment of Land
BasedWorkers)

Art.26.TravelAgenciesProhibitedtoRecruit

Q: What is the rule on recruitment of travel


agenciesandsalesagenciesofairlinecompanies?

A: They are prohibited from engaging in the


business of recruitment and placement of workers
foroverseasemploymentwhetherforprofitornot.

Q: WTTA is a wellknown travel agency and an


authorized sales agent of the PAL. Since majority
of its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities. It stated in its application
that its purpose is not for profit but to help
Filipinos find employment abroad. Should the
applicationbeapproved?

A: The application should be disapproved, as it is


prohibited by Art. 26 of the LC, to wit: "Art 26.
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." Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of
LandBased Workers (2002) disqualifies any entity
having common director or owner of travel
agencies and sales agencies of airlines, including
any business entity from the recruitment and
placement of Filipino workers overseas, whether
theyderiveprofitornot.(2006BarQuestion)

Art.32.FeestobePaidbyWorkers

Q:Whenmayaworkerbechargedanyfee?

A:Onlywhen:

1. Hehasobtainedworkthroughrecruiters
efforts,and
2. The worker has actually commenced
working

Note: A land based agency may charge and collect


from its hired workers a placement fee in an amount
equivalent to 1 month salary, exclusive of
documentationcosts.

Q: What are the only authorized payments that


maybecollectedfromahiredworker?

A:
1. Placement fee in an amount equivalent
toonemonthssalaryoftheworkerand
2. Documentationcosts.

22

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
C.LABORSTANDARDS

1.HOURSOFWORK

a.Coverage/Exclusions

Q:Whodeterminesworkingconditions?

A:Generally,theyaredeterminedbytheemployer,
as he is usually free to regulate, according to his
discretion,allaspectsofemployment.

Q:Whatisthelimitationontheemployerspower
toregulateworkingconditions?

A: It must be done in good faith and not for the


purposeofdefeatingorcircumventingtherightsof
the employees. Such are not always absolute and
must be exercised with due regard to the rights of
labor.

Note: Ones employment, profession, trade or calling


is a property right and the wrongful interference
therewithisanactionablewrong.

Q:Whendoestheconditiononemploymentunder
theLaborCodeapply?

A:OnlyifanErEerelationshipexists.

Q:Whoaretheemployeesthatarecoveredbythe
conditionsofemployment?

A:GR:ItappliestoallEesinallestablishments.

XPN:
1. Govtemployees
2. Managerialemployees
3. Fieldpersonnel
4. The employers family members who
dependonhimforsupport
5. Domestic helpers and persons in the
personalserviceofanother,and
6. Workers who are paid by results as
determinedunderDOLEregulations

Q:Whoaregovernmentemployees(Ees)?

A:TheyareEesofthe:

1. NationalGovernment
2. Anyofitspoliticalsubdivisions
3. Including those employed in GOCCs with
originalcharters.

Q:WhatlawgovernsgovernmentEes?

A:TheCivilServiceLaw,rulesandregulations.

Q:WhoaremanagerialEes?

A: Those whose primary duty consists of the


management of the establishment in which they
are employed or a department or subdivision
thereof, and other officers or members of the
managerialstaff.

Theymustmeetalloftheff.conditions,namely:

1. Primary duty: management of the


establishment in which they are
employed or of a department or sub
divisionthereof;
2. Customarily or regularly direct the work
of2ormoreEes
3. HastheauthoritytohireorfireotherEes
of lower rank; or their suggestions and
recommendations as to the hiring and
firing and as to the promotion or any
change of status of other Ees are given
particularweight.
4. Execute under general supervision work
along specialized or technical lines
requiring special training, experience, or
knowledge
5. Executeundergeneralsupervisionspecial
assignmentandtasks;and
6. Do not devote more than 20% of their
hours worked to activities which are not
directly and closely related to
performance of the work described. (Art.
82[2])

Q:WhyaremanagerialEesnotcovered?

A: They are employed by reason of their special


training, expertise or knowledge and for positions
requiring the exercise of discretion and
independent judgment. Value of work cannot be
measuredintermsofhours.

Q:Whoarefieldpersonnel?

A:Theyare:

1. nonagriculturalemployees
2. whoregularlyperformtheirduties
3. awayfromtheprincipalplaceofbusiness
orbranchofficeoftheemployer;and
4. whose actual hours of work in the field
cannot be determined with reasonable
certainty.

Q:Whoareworkerspaidbyresults?

A:Theyare:

23

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


1.
2.
3.

paidbasedontheworkcompleted;and
notonthetimespentinworking
including those who are paid on piece
work, takay, pakiaw, or task basis if
theiroutputratesareinaccordancewith
thestandardsprescribed.

Q: Who are domestic helpers and persons in the


personalserviceofanother?

A:Thosewho:

1. perform services in the employers (Er)


home which are usually necessary or
desirable for the maintenance or
enjoymentthereof;or
2. minister to the personal comfort,
convenienceorsafetyoftheEraswellas
themembersofhisErshousehold.

Q: A house personnel was hired by a ranking


company official to maintain a staff house
provided for the official. The personnel is being
paidbythecompanyitself.Isthehousepersonnel
adomesticservantofthecompanyofficial?

A:No,thepersonnelisnotadomestichelperbuta
regularemployeeofthecompany.

Q: What are the 3 groups of employees (Ees)


undertheLC?

A:
1. Managerial Ee One who is vested with
the powers or prerogatives to lay down
andexecutemanagementpoliciesand/or
to hire, transfer, suspend, layoff, recall,
discharge,assignordisciplineEes.
2. SupervisoryEethosewhointheinterest
of the Er, effectively recommend such
managerialactionsiftheexerciseofsuch
authority is not merely routinary or
clerical in nature but requires the use of
independentjudgment.
3. RankandFileEeallEesnotfallingwithin
anyoftheabovedefinitions.(Art.212[m])

b.Normalhoursofwork

Q:WhatarethenormalhoursofworkofanEe?

A:Itshouldnotexceed8hoursinageneralworking
day.

Note: Normal hours of work may be shortened or


compressed.

Q:Whatareconsideredhoursworked?

24

A:
1.

2.

AlltimeduringwhichanEeisrequiredto
be:
a. Onduty,or
b. AttheErspremises,or
c. Ataprescribedworkplace

AlltimeduringwhichanEeissufferedor
permittedtowork.(Sec.3,RuleI,BookIII,
IRR)

Q: What are the principles in determining hours


worked?

A:
1. AllhourswhichtheEeisrequiredtogive
to his Er regardless of whether or not
such hours are spent in productive labor
orinvolvephysicalormentalexertion.
2. Rest period is excluded from hours
worked, even if Ee does not leave his
workplace,itbeingenoughthat:
a. Hestopsworking
b. Mayrestcompletely
c. May leave his workplace, to go
elsewhere, whether within or
outside the premises of the
workplace
3. All time spent for work is considered
hoursworkedif:
a. The work performed was
necessary
b. IfitbenefitedtheEr
c. OrtheEecouldnotabandonhis
work at the end of his normal
working hours because he had
noreplacement
d. Provided,theworkwaswiththe
knowledge of his Er or
immediatesupervisor
4. ThetimeduringwhichanEeisinactiveby
reasons of interruptions in his work
beyond his control shall be considered
workingtime:
a. If the imminence of the
resumption of the work
requires the Ees presence at
theplaceofworkor
b. If the interval is too brief to be
utilized effectively and gainfully
intheEesowninterest.(Sec.4,
RuleI,BookIII,IRR)

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS

(a)Exceptions:HealthPersonnel&Compressed
WorkWeek

HealthPersonnel

Q: What are the hours of work of health


personnel?
A: GR: 8 hours/5 days (40hour work week),
exclusiveoftimeformeals.
XPN: Where the exigencies of the service
require that such personnel work for 6 days or
48hours,theyshallbeentitledtoanadditional
compensation of at least 30% of their regular
wageforworkonthe6thday.
Note: 40hourworkweek doesnot applyifthereisa
training agreement between the resident physician
and the hospital and the training program is duly
accredited or approved by appropriate government
agency.

Q:Whoarecoveredbythe40hourworkweek?

A:
1. Health personnel in cities and
municipalities with a population of at
least1million;or
2. Hospitals and clinics with a bed capacity
ofatleast100

Note:Art.83(2)donotrequirehospitalstopaythe
Ees a full weekly salary with paid 2 days off. (San
Juan de Dios Ees Assoc.AFW et al. vs. NLRC, G.R.
No.126383,Nov.28,1997)

CompressedWorkweek

Q:Whatisacompressedworkweek?

A: The normal workweek is reduced to less than 6


days but the total number of workhours of 48
hoursperweekshallremain.Thenormalworkdayis
increased to more than 8 hours but not to exceed
12 hours, without corresponding overtime
premium.Theconceptcanbeadjustedaccordingly
depending on the normal workweek of the
company.(DepartmentAdvisoryOrderNo.2,Series
of2009)

Q: When is the implementation of a compressed


workweekvalid?

A: The validity of the reduction of working hours


canbeupheldwhenthearrangementistemporary,
it is a more humane solution instead of a
retrenchment of personnel, there is notice and

consultations with the workers and supervisors, a


consensus is reached on how to deal with
deteriorating economic conditions and it is
sufficientlyproventhatthecompanywassuffering
from losses. Under the Bureau of Working
Conditions bulletin, a reduction of the number of
regular working days is valid where the
arrangement is resorted to by the employer to
prevent serious losses due to causes beyond his
control,suchaswhenthereisasubstantialslumpin
thedemandforhisgoodsorservicesorwhenthere
is lack of raw materials. There is one main
consideration in determining the validity of
reductionofworkinghoursthatthecompanywas
suffering from losses. A year of financial losses
would not justify a reduced workweek. (Linton
Commercialv.Hellera,G.R.No.163147,October10,
2007)

Q: Under what conditions may a "compressed


work week" schedule be legally authorized as an
exception to the "8hour a day" requirement
undertheLC?
A:
1.
2.
3.

4.

5.
6.

TheEevoluntarilyagreestoit
There is no diminution in their weekly or
monthlytakehomepayorfringebenefits
The benefits are more than or at least
commensurate or equal to what is due
the Ees without the compressed work
week
OTpaywillbedueanddemandablewhen
they are required to work on those days
which should have ceased to be working
days because of the compressed work
weekschedule.
No strenuous physical exertion or that
theyaregivenadequaterestperiods.
It must be for a temporary duration as
determined by the DOLE. (2005 Bar
Question)

Q: What are the requisites for adoption of


compressedworkweek?

A:
1. The Er shall notify the DOLE through the
Regional Office which has jurisdiction
over the workplace, of the adoption of
compressedworkweek.
2. The notice shall be in Report Form
attachedtotheadvisory.
3. The Regional Office shall conduct an
ocular visit to validate whether the
adoption of the flexible work
arrangements is in accordance with this
issuance.(DepartmentAdvisoryOrderNo.
2,Seriesof2009)

25

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

c.WorkinterruptionduetobrownoutS
Q: What are the guidelines on power
interruptions?
A:
1.

Brownouts of short duration but not


exceeding 20 minutes shall be treated as
worked or compensable hours whether
usedproductivelybytheemployees(Ees)
ornot.

2. Brownouts running for more than 20


minutes may not be treated as hours
worked provided any of the following
conditionsarepresent:
a. TheEescanleavetheirworkplaceor
go elsewhere within or without the
workpremises;or
b. The Ees can use the time effectively
fortheirowninterest.

3. In each case, the Er may extend the


working hours of his Ees outside the
regular schedules to compensate for the
loss of productive manhours without
beingliableforOTpay.

4. Industrial enterprises with one or two


work shifts may adopt any of the work
shift prescribed for enterprises with 3
work shifts to prevent serious loss or
damage to materials, machineries, or
equipmentthatmayresultcaseofpower
interruptions.(PolicyInstructionNo.36)

d.MealBreak

Q:Whatisthedurationofthemealperiod?
A: Every Er shall give his Ees not less than 60
minutesor1hourtimeoffforregularmeals.
Q:Isthemealperiodcompensable?
A: Beingtimeoff,itisnotcompensable.Employee
mustbecompletelyrelievedfromduty.
Q: When is the meal period considered
compensable?
A: It is compensable where the lunch period or
mealtime:
1.
2.

26

Ispredominantlyspentfortheemployers
benefit;or
Whereitislessthan20minutes

Note: Where during meal period, the laborers are


requiredtostandbyforemergencywork,orwherethe
meal hour is not one of complete rest, such is
considered OT. (Pan Am vs. Pan Am Ees Association,
G.R.No.L16275,Feb.23,1961)
Rest periods or coffee breaks running from 5 to 20
minutes shall be considered as compensable working
time.(Sec.7,RuleI,BookIII,IRR)

Q: Are meal periods provided during OT work


compensable?

A: Yes, since the 1 hour meal period (non


compensable)isnotgivenduringOTworkbecause
thelatterisusuallyforashortperiodandtodeduct
fromthesamewouldreducetonothingtheEesOT
work. Thus, the 1 hour break for meals during OT
shouldbetreatedascompensable.
Q: What are the instances where meal periods
shortened to not less than 20 minutes is
compensableornotcompensable?
A:
1.

2.

Compensable At the instance of


Employer,when:
a. Work is nonmanual in nature or
does not involve strenuous physical
exertion;
b. Establishmentregularlyoperatesless
than16hoursaday;
c. Workisnecessarytopreventserious
lossofperishablegoods.
d. Actual or impending emergency or
thereisurgentworktobeperformed
on machineries and equipment to
avoidseriouslosswhichtheErwould
otherwisesuffer.(Sec.7,RuleI,Book
III,IRR)

Not Compensable Ee requested for the


shorter meal time so that he can leave
work earlier than the previously
establishedschedule.Requisites:
a. Ees voluntarily agree in writing and
are willing to waive OT pay for the
shortenedmealperiod;
b. No diminution in the salary and
other fringe benefits of the Ees
which are existing before the
effectivity of the shortened meal
period;
c. Work of the Ees does not involve
strenuousphysicalexertionandthey
are provided with adequate coffee
breaks in the morning and
afternoon;

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
d.

e.

f.

Value of the benefits derived by the


Ees from the proposed work
arrangements is equal to or
commensurate
with
the
compensation due them for the
shortenedmealperiodaswellasthe
OTpayfor30minutesasdetermined
bytheEesconcerned;
OT pay will become due and
demandable after the new time
schedule
Arrangement is of temporary
duration.

e.Idletime,waitingtime,commutingtime/travel
time,whetherpartofhoursofworkornot

Q: When is an Ee considered working while on


call?
A:WhenEeisrequiredtoremainoncallintheErs
premisesorsoclosetheretothathecannotusethe
timeeffectivelyandgainfullyforhisownpurpose.

Q:Whenidletimeisconsideredworkingtime?

A:Whentheemployeeisidleorinactivebyreason
of interruptions beyond his control shall be
consideredworkingtime.

Q:Wheniswaitingtimeconsideredworkingtime?

A:
1. Ifwaitingisanintegralpartofhiswork,or
2. TheEeisrequiredorengagedbytheErto
wait(engagedtowait)

Note: The controlling factor is whether waiting time


spentinidlenessissospentpredominantlyfortheErs
benefitorfortheEe.

Q: When is waiting time not considered working


time?
A:WhentheEeiswaitingtobeengaged:idletime
isnotworkingtime;itisnotcompensable.
Q:Whenistraveltimeconsideredworkingtime?
A:
1.

Travelfromhometowork

GR: Normal travel from home to work is


notworkingtime.

XPNS:
a. Emergency call outside his regular
working hours where he is required

b.
c.
d.

to travel to his regular place of


businessorsomeotherworksite.
Done through a conveyance
providedbytheemployer(Er).
Done under the supervision and
controloftheEr.
Done under vexing and dangerous
circumstance.

Travel that is all in a days work time


spent in travel as part of the employees
(Ees)principalactivity
e.g.travelfromjobsitetojobsiteduring
the work day, must be counted as
workinghours.

3. Travelawayfromhome
GR:
a. Travel that requires an overnight
stay on the part of the Ee when it
cutsacrosstheEesworkdayisclearly
workingtime.
b. Thetimeisnotonlyhoursworkedon
regular workdays but also during
corresponding working hours on
nonworking days. Outside of these
regular working hours, travel away
from home is not considered
workingtime.

XPN: During meal period or when Ee is


permitted to sleep in adequate facilities
furnishedbytheEr.

Q: What are the conditions in order for lectures,


meetings and training programs to be not
consideredasworkingtime?

A:Alloftheff.conditionsmustbepresent:
1. Attendance is outside of the employers
regularworkinghours
2. Attendanceisinfactvoluntaryand
3. The employee does not perform any
productiveworkduringsuchattendance.

f.Overtimework:Undertimeoffsetbyovertime,
Waiverofovertime

Q:Whatisovertimework(OT)?
2.

A: Work performed beyond 8 hours within the


workers24hourworkday.
Note: Express instruction from the employer (Er) to
the employee (Ee) to render OT work is not required
fortheEetobeentitledtoOTpay;itissufficientthat
the Ee is permitted or suffered to work. However,
written authority after office hours during rest days

27

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


and holidays are required for entitlement to
compensation.

Q:Whatisaworkday?
A: The 24hourperiod which commences fromthe
timetheemployeeregularlystartstowork
e.g. If the worker starts to work 8 am today, the
workdayisfrom8amtodayupto8amtomorrow.

Note: Minimum normal working hours fixed by law


neednotbecontinuoustoconstitutethelegalworking
day.

Q:WhatistherationalebehindOTpay?
A: Employee is made to work longer than what is
commensurate with his agreed compensation for
the statutory fixed or voluntarily agreed hours of
laborheissupposedtodo.(PNBvs.PEMAandCIR,
G.R.No.L30279,July30,1982)
Discourages the employer (Er) from requiring such
work thus protecting the health and wellbeing of
the worker, and also tend to remedy
unemployment by encouraging Ers to employ
othersworkerstodowhatcannotbeaccomplished
duringthenormalhoursofwork.
Q:DistinguishOvertimepayfrompremiumpay.
A:
OVERTIMEPAY
Additional
compensationfor
work performed
beyond 8 hours
on ordinary days
(within
the
workers 24hour
workday)

PREMIUMPAY
Additionalcompensationforwork
performedwithin8hoursondays
when normally he should not be
working (on nonworking days,
such as rest days and special
days.)
But additional compensation for
work rendered in excess of 8
hours during these days is also
consideredOTpay.

Q:WhataretheOTpayrates?

A:
PAYRATES
OTduringaregularworkingday
Additionalcompensationof25%oftheregularwage
OTduringaholidayorrestday

28

Rateofthefirst8hoursworkedon
plusatleast30%oftheregularwage(RW):

ifdoneonaspecialholidayORrestday:
30%of130%ofRW

IfdoneonaspecialholidayANDrestday:
30%of150%ofRW

ifdoneonaregularholiday:
30%of200%ofRW

Q:WhatisthebasisofcomputingtheOTpayand
additionalremuneration?
A:Regularwagewhichincludesthecashwageonly,
withoutdeductiononaccountoffacilitiesprovided
bytheemployer.(Art.90)
Q: In lieu of OT pay, the employee was given
permission to go on leave on some other day, is
thatvalid?
A:No.Permissiongiventotheemployee(Ee)togo
onleaveonsomeotherdayoftheweekshallNOT
exempt the employer from paying the additional
compensation required because it would prejudice
theEe,forhewillbedeprivedoftheadditionalpay
for the OT work he has rendered and which is
utilized to offset the undertime he may have
incured. Undertime could be charged against the
Eesaccruedleave.
Q: Socorro is a clerktypist in the Hospicio de San
Jose, a charitable institution dependent for its
existence on contributions and donations from
wellwishers.Sherenderswork11hoursadaybut
hasnotbeengivenOTpaysinceherplaceofwork
isacharitableinstitution.IsSocorroentitledtoOT
pay?Explainbriefly.
A:Yes.SocorroisentitledtoOTcompensation.She
does not fall under any of the exceptions to the
coverage of Art. 82, under the provisions of hours
of work. The Labor Code is equally applicable to
nonprofit institutions. A covered Ee who works
beyond 8 hours is entitled to OT compensation.
(2002BarQuestion)
Q: Flores applied for the position of driver in the
motorpool of Gold Company, a multinational
corporation. Danilo was informed that he would
frequently be working OT as he would have to
drive for the company's executives even beyond
the ordinary 8hour work day. He was provided
withacontractofemploymentwhereinhewould
bepaidamonthlyrateequivalentto35timeshis
dailywage,regularsickandvacationleaves,5day
leavewithpayeverymonthandtimeoffwithpay

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
when the company's executives using the cars do
not need Danilo's service for more than eight
hoursaday,inlieuofOT.Aretheaboveprovisions
ofthecontractofemploymentinconformitywith,
orviolativeof,thelaw?
A: Except for the provision that Danilo shall have
time off with pay when the company's executives
usingthecarsdonotneedDanilo'sserviceformore
than8hoursaday,inlieuofOT,theprovisionsof
the contract of employment of Danilo are not
violative of any labor law because they instead
improve upon the present provisions of pertinent
laborlaws.
Q: May an employee be compelled to render OT
work?
A:GR:No.OTworkisvoluntary.

XPN: Compulsory OT work in any of the


followingsituations:
1.

2.
3.

4.
5.

6.
7.

Urgent work to be performed on


machines and installations in order to
avoidseriouslossordamagetotheEror
someothercauseofsimilarnature
Work is necessary to prevent loss or
damagetoperishablegoods
In case of imminent danger to the public
safety due to an actual or impending
emergency in the locality caused by
serious accidents, fire, flood, typhoon,
earthquake,epidemicorotherdisasteror
calamity
Countryisatwar
Completion or continuation of the work
started before the 8th hour is necessary
to prevent serious obstruction or
prejudice to the business operations of
theEr
Anyothernationalorlocalemergencyhas
beendeclared
Necessary to prevent loss of life or
property.

Note: There should be payment of additional


compensation.EesrefusaltoobeytheorderoftheEr
constitutes insubordination for which he may be
subjectedtodisciplinaryaction.

Q: The employment contract requires work for


more than 8 hours a day with a fixed wage
inclusiveofOTpay.Isthatvalid?

2.

(a)UndertimenotoffsetbyOvertime

Q:Canundertime(UT)offsetOT?

A: Whereaworkerincursundertimehoursduring
hisregulardailywork,saidundertimehoursshould
not be offset against the overtime hours on the
samedayoronanyotherday.Itisbothprohibited
bythestatuteandbyjurisprudence.

(b)WaiverofOvertimepay

Q:CantherighttoOTpaybewaived?
A:GR:TherighttoOTpaycannotbewaivedasit
is governed by law and not merely by the
agreementoftheparties.

XPN:
1. If the waiver is done in exchange for
certain valuable benefits and privileges,
which may even exceed the OT Pay,
waivermaybepermitted.
2. Compressedworkweek

g.Nightwork

Q:Whatisnightwork?

A: Any and all work rendered between 6:00 pm


and6:00am.(NationalRice&CornCorp.v.NARIC,
105Phil891)

Q: What isnight work prohibitionwith regard to


womenworkers?
A: GR: No woman regardless of age shall be
employed or permitted to work, with or
withoutcompensationinany:
1.

A:Itdepends.
1.

When the contract of employment


requires work for more than 8 hours at

specificwagesperday,withoutproviding
for a fixed hourly rate or that the daily
wagesincludeOTpay,saidwagescannot
be considered as including OT
compensation. (Manila Terminal Co. vs.
CIR,etal.,91Phil.,625)
However, the employment contract may
provideforabuiltinOTpay.Becauseof
this, nonpayment of OT pay by the
employer is valid. (Engg Equipment vs.
Minister of Labor, G.R. No. L64967, Sep.
23,1985)

2.

Industrial undertaking or branch thereof


between 10pm and 6am of the following
day.
Commercialornonindustrialundertaking
orbranchthereof,otherthanagricultural,

29

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

3.

between midnight and 6am of the


followingday.
Agricultural undertaking at nighttime
unlesssheisgivenperiodofrestnotless
than9consecutivehours.

XPNS:
1. Actualorimpendingemergencies
a. Caused by serious accident, fire,
flood,
typhoon,
earthquake,
epidemic, other disasters, or
calamity
b. Topreventlossoflifeorpropertyor
c. Incaseofforcemajeureor
d. Imminentdangertopublicsafety
2. Urgentwork
a. To be performed on machineries,
equipmentorinstallations,
b. To avoid serious loss which the Er
wouldotherwisesuffer
3. Workisnecessarytopreventseriousloss
toperishablegoods
4. WomanEes
a. Holds a responsible position of
managerialortechnicalnature,or
b. Has been engaged to provide health
andwelfareservices
5. Natureofthework
a. Requires the manual skill and
dexterityofwomenworkersand
b. Thesamecannotbeperformedwith
equalefficiencybymaleworkers
6. Women Ees are immediate members of
theestablishmentorundertaking
7. In analogous cases exempted by the SLE
inappropriateregulations.(Art.131)

Note: The operation of Call Contract Centers which


provides offshore case solutions to US based clients
who phone in to conduct product inquiries and
technical support, operating for 24/7, has been
exempted from the prohibition considering the
inevitable time difference between the US and the
Phils. and the peak time for its operation is between
8:00 pm to 10:00 am Manila time, thereby making it
necessaryfor80%ofitsEes,includingwomen,towork
duringgraveyardshift.(BWCWHSDOpinionNo.491,s.
2003)

Q:Whatisnightshiftdifferential(NSD)?
A: It is additional compensation of not less than
10%ofanEesregularwageforeveryhourworked
between10:00pmto6:00am,whetherornotsuch
periodispartoftheworkersregularshift.
Q:WhoareentitledtoNSD?
A:GR:NSDappliestoallemployees(Ees).

30

XPN:
1. Ees of the Govt and any of its political
subdivisions,includingGOCCs.
2. Retail and service establishments
regularly employing not more than 5
workers.
3. Includestaskandcontractbasis
4. Domestic helpers and persons in the
personalserviceofanother.
5. Field personnel and Ees whose time and
performance is unsupervised by the
employer
6. ManagerialEes

Q:MayanemployeewaivetherighttoNSD?
A: GR: No, such waiver is against public policy.
(Mercury Drug Co., Inc. vs. Dayao, et al., G.R.
No.L30452,Sep.30,1982)

XPN:Higher/betterbenefits

h.CBAprovisionvisvisovertimework
Q:Maytheovertimeratebesubjecttostipulation
oftheEeandEr?
A:Generally,thepremiumforworkperformedon
the employees rest days or on special days or
regularholidaysareincludedaspartoftheregular
rate of the employee in the computation of
overtime pay for any overtime work rendered on
said days especially if the employer pays only the
minimum overtime rates prescribed by law. The
employees and employer, however, may stipulate
in their collective agreement the payment of
overtime rates higher than those provided by law
andexcludethepremiumratesinthecomputation
of overtime pay. Such agreement may be
consideredvalidonlyifthestipulatedovertimepay
rates will yield to the employees not less than the
minimumprescribedbylaw.
2.WAGES

Q:Whatisawage?
A: It is the remuneration or earnings, however
designated,capableofbeingexpressedintermsof
money, whether fixed or ascertained on a time,
task, piece, or commission basis, or other method
of calculating the same, payable by an employer
(Er) to an employee (Ee) under a written or
unwrittencontractofemployment:
1.

For work done or to be done, or for


servicesrenderedortoberendered;and
includes

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
2.

Fair and reasonable value of board,


lodging, or other facilities customarily
furnished by the Er to the Ee as
determinedbySLE.

Q:Whatdoyoumeanbycustomary?

A: It is founded on longestablished and constant


practiceconnotingregularity.
Q: What do you mean by fair and reasonable
value?
A:Itshallnotincludeanyprofittotheemployer(Er)
ortoanypersonaffiliatedwiththeEr.
a.Nowork,Nopayprinciple
Q: What does a fair days wage for a fair days
labormean(noworknopay)?
A: GR: If there is no work performed by the Ee,
withoutthefaultoftheEr,therecanbeno
wageorpay.

XPN:Thelaborerwasable,willingandreadyto
workbutwas:
1. Preventedbymanagement;
2. Illegallylockedout;
3. Illegallysuspended;
4. Illegallydismissed
5. Otherwise illegally prevented from
working. (Aklan Electric Coop. v. NLRC,
G.R.No.129246,Jan.25,2000)

b.CoverageandExclusions

Q:Towhomdoesthetitleonwagesapply?

A:GR:Itappliestoallemployees

XPN:
1. Farmtenancyorleasehold;
2. Householdordomestichelpers,including
familydriversandpersonsworkinginthe
personalserviceofanother;
3. Homeworkersengagedinneedleworkor
in any cottage industry duly registered in
accordancewithlaw;
4. Workers in duly registered cooperatives
when so recommended by theBureau of
Cooperative Development and upon
approval of the Secretary of Labor and
Employment.
5. Workers of a barangay micro business
enterprise(R.A.9178)

c.FacilitiesandSupplements

Q:Distinguishbetweenfacilitiesandsupplement
A:
FACILITIES
Items
of
expenses
necessaryforthelaborers
and his familys existence
andsubsistence

Note:Doesnotincludetools
oftradeorarticles/services
primarily for the benefit of
the Er or necessary to the
conductoftheErsbusiness.

Formspartofthewage
Deductiblefromwage
For the benefit of the
workerandhisfamily.

SUPPLEMENT
Extra remuneration or
special privileges or
benefits given to or
receivedbythelaborers
over and above their
ordinary earnings or
wages (Atok Big Wedge
Mining Co. v. Atok Big
Wedge Mutual Benefit
Assoc, G.R. No. L7349,
July19,1955).
Independentofwage
Notwagedeductible
Granted
for
the
convenienceoftheEr.

Q:Whatisthecriterionindeterminingwhetheran
itemisasupplementorfacility?

A:Thecriterionisnotsomuchwiththekindofthe
benefitoritem(food,lodging, bonusorsickleave)
given, but its purpose. (State Marine v. Cebu
SeamensAssn.,G.R.No.L12444,Feb.28,1963)

Q:Whencanthecostoffacilitiesfurnishedbythe
ErbechargedagainstanEe?

A:InorderthatthecostbechargedagainsttheEe,
the latters acceptance of such facilities must be
voluntary.
Q:Whataretherequirementsfordeductingvalues
forfacilities?
A:
1.
2.
3.

Proof must be shown that such facilities


arecustomarilyfurnishedbythetrade
Theprovisionofdeductiblefacilitiesmust
bevoluntarilyacceptedinwriting
The facilities must be chargedat fair and
reasonable value (Mabeza v. NLRC, G.R.
No.118506,April18,1997)

Q: Are food and lodging, or the electricity and


water consumed by a hotel worker, considered
facilities?

A: No. These are supplements. Considering,


therefore, thathotel workers are required towork
differentshiftsandareexpectedtobeavailableat
various odd hours, their ready availability is a
necessarymatterintheoperationsofasmallhotel.
Furthermore,grantingthatmealsandlodgingwere

31

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


provided and indeed constituted facilities, such
facilities could not be deducted without the Er
complying first with certain legal requirements.
(Mabezav.NLRC,G.R.No.118506,April18,1997)
d.Wagesv.Salaries
Q:Distinguishbetweenwageandsalary?
A:

WAGE
SALARY
(Gaavs.CA,G.R.No.44169,Dec.3,1985)
Paidtowhitecollared
Compensationformanual
workersanddenotes
labor(skilledorunskilled)
higherdegreeof
alsoknownasblue
employmentora
collaredworkers,paidat
superiorgradeofservices
statedtimesand
andimpliesapositionin
measuredbytheday,
office.
week,monthorseason.
Considerablepayfora
Outgestureofalarger
lowerandless
andmoreimportant
responsiblecharacterof
service
employment.
GR:Notsubjectto
execution

Subjecttoexecution.
XPN:Debtsincurredfor
food,shelter,clothingand
medicalattendance.

e.WageDistortion

Q:Whatiswagedistortion(WD)?

A: Asituationwhereanincreaseinwageresultsin
theeliminationorseverecontractionofintentional
quantitative differences in wage or salary rates
between and among the Eegroups in an
establishment as to effectively obliterate the
distinctionsembodiedinsuchwagestructurebased
onskills,length ofserviceorotherlogicalbasesof
differentiation.
Q:WhataretheelementsofWD?

A:
1. An existing hierarchy of positions with
correspondingsalaryrates.
2. A significant change or increase in the
salaryrateofalowerpayclasswithouta
corresponding increase in the salary rate
ofahigherone;
3. The elimination of the distinction
betweenthe2groupsorclasses;and
4. The WD exists in the same region of the
country. (Alliance Trade Unions v. NLRC,
G.R.No.140689,Feb.17,2004)

Q:IstheErlegallyobligedtocorrectWD?

32

A: The Er and the union shall negotiate to correct


thedistortions.Ifthereisnounion,theErandthe
workersshallendeavortocorrectsuchdistinctions.

Q:WhatarethebasicprinciplesinWD?

A:
1. The concept of WD assumes an existing
group or classification of Ees which
establishes distinctions among such Ees
onsomerelevantorlegitimatebasis.This
classification is reflected in a differing
wagerateforeachoftheclassesofEes
2. Often results from govt decreed
increasesinminimumwages.
3. Should a WD exist, there is no legal
requirement that, in the rectification of
that distortion by readjustment of the
wageratesofthedifferingclassesofEes,
the gap which had previously or
historically existed be restored in
precisely the same amount. In other
words, correction of a WD may be done
by reestablishing a substantial or
significant gap (as distinguished from the
historicalgap)betweenthewageratesof
thedifferingclassesofEes.
4. The reestablishment of a significant
differenceinwageratesmaybetheresult
of resort to grievance procedures or
collectivebargainingnegotiations.(Metro
Transit Org., Inc. v. NLRC, G.R. No.
116008,July11,1995)

Q:DistinguishtheprocessforcorrectionofWDof
organized establishments and unorganized
establishments?

A:
Organized
Establishment
(withunion)
TheErandtheunion
shallnegotiateto
correctdistortion.
Anydisputeshallbe
resolvedthrougha
grievanceprocedure
undertheCBA.
Ifitremainsunresolved,
itshallbedealtwith
throughvoluntary
arbitration.
Thedisputewillbe
resolvedwithin10days
fromthetimethe
disputewasreferredto
voluntaryarbitration.

Unorganized
Establishments
(withoutunion)
TheErandtheworkers
shallendeavortocorrect
thedistortion.
Anydisputeshallbe
settledthroughtheNCMB.
Ifitremainsunresolved
within10daysitshallbe
referredtotheNLRC.
TheNLRCshallconduct
continuoushearingsand
decidethedisputewithin
20daysfromthetimethe
samewasreferred.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
Q: Can the issue of WD be raised in a notice of
strike?

A: No. WD is nonstrikeable. (Ilaw at Buklod ng


Manggagawa v. NLRC, G.R. No. 91980, June 27,
1991.) WD is neither a deadlock in collective
bargainingnorULP.

f.CBAprovisionvisvisWageOrderCBACredibility

Q:DistinguishCBAandWageOrder.

A:
CBA
Not
an
ordinary
contract. It can be
entered into only by an
exclusive
bargaining
agentorunit.
If the CBA provides
betterbenefitsthenthe
employees shall be
entitledtothesame.

WAGEORDER
Administrative issuance
which results from a
statute(RA6727)

Onlysetstheminimum

Q: Can a CBA provision regarding wages prevail


overaWageOrder?

Moreover, compliance with a collective bargaining


agreement is mandatedby theexpressed policy to
giveprotectiontolabor.Unlessotherwiseprovided
by law, said policy should be given paramount
consideration.(MeycauayanCollegev.DRILON,G.R.
No.81144,My7,1990).

g.Nondiminutionofbenefits
Q:Whatistheconceptofnondiminution(ND)of
benefits?
A: GR: Benefits being given to employees (Ees)
cannot be taken back or reduced unilaterally by
the employer (Er) because the benefit has
become part of the employment contract,
whetherwrittenorunwritten.

XPN:Tocorrectanerror,otherwise,iftheerroris
notcorrectedforareasonabletime,itripensinto
a company policy and Ees can demand it as a
matterofright.

Q:WhenisNDofbenefitsapplicable?
A: It is applicable if it is shown that the grant of
benefit:

A:Yes,wheretheCBAprovidesawageorsalaryto
be received by the employees which is more than
theamountsetbytheWageOrder,whetherissued
prior to or after the conclusion of the CBA, it is
incumbent upon the employer to compensate the
employees according to the provisions of the CBA
withrespecttowages.
Q: Meycauayan College Faculty and Personnel
Association as the employees union in
Meycauayan College, admits that its members
were paid all the increases in pay as mandated
law.Itappearshoweverthatin1987,shortlyafter
union President Joy Bugo turned over the
presidency,shediscoveredthatArt.IVoftheCBA,
which providesfor higher salary increasewasnot
implemented.Maytheunionclaimthedifference
between their old salaries and those provided by
saidCBAprovision?
A: Yes, the terms and conditions of a collective
bargainingcontractconstitutethelawbetweenthe
parties. Beneficiaries thereof are therefore, by
right, entitled to the fulfillment of the obligation
prescribed therein.Consequently, to deny binding
force to the CBA would place a premium on a
refusalbyapartytheretotocomplywiththeterms
oftheagreement.Suchrefusalwouldconstitutean
unfairlaborpractice.

1.
2.

Is based on an express policy of the law;


or
Has ripened into practice over a long
period of time and the practice is
consistent and deliberate and is not due
to an error in the construction/
application of a doubtful or difficult
questionoflaw.

h.Workerspreferenceincaseofbankruptcy

Q:Whatisbankruptcy?

A:BankruptcyisreferredtointhePhilippinesas
Insolvency. It denotes the state of an entity or
personthathasliabilitiesgreaterthanitsassets.

Q: What happens if the Er business experiences


bankruptcyorliquidation?
A: His workers shall enjoy first preference as
regards their wages and monetary claims, any
provision of the law to the contrary
notwithstanding.
Q: What are the principles underlying the
preference?
A:

33

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


1.

2.
3.

4.

Declaration of bankruptcy or judicial


liquidation before enforcement of the
workerspreferentialright;
Filingofclaimsbyworkers;
Therightdoesnotconstitutealientothe
property of the insolvent debtor in favor
ofworkers.(DBPvs.NLRC,G.R.No.82763
Mar. 19, 1990 and G.R. No. 97176, Mar.
18,1993);
ThepreferenceinfavoroftheEesapplies
to discharge of funds. The preference
doesnotonlycoverunpaidwages,italso
extends to termination pay and other
monetaryclaims;
Note: Termination pay, after all, is
considered as additional remuneration for
services rendered to the employer for a
certainperiodoftime;itiscomputedonthe
basisoflengthofservice.(PNBvs.Cruz,G.R.
No.80593,Dec.18,1989)

5.

Applicable only to ordinary preferred


credit, hence, must yield to special
preferredcredits.

Q: Are workers preferred than the tax claims of


theGovt?
A: No. Art. 110did not sweep away the overriding
preferenceaccordedundertheschemeoftheCivil
Codetotaxclaimsofthegovernment.
Q: Is worker preference applicable if the Er
corporationisunderrehabilitation?
A: No. Suspension of payments order by the SEC
mandatestheholdinginabeyancethefilingorthe
proceedings on labor cases against an Er who is
under rehabilitation to give the Er the chance to
concentrate onhow to revive his business andnot
bedistractedintryingtodefenditselfinlaborcases
filedagainstit.(Rubberworld,Inc.v.NLRC,G.R.No.
126773,April14,1999)
Q:PremiereBank,beingthecreditormortgageeof
XYZ & Co., a garment firm, foreclosed the
hypothecated assets of the latter. Despite the
foreclosure, XYZ & Co. continued its business
operations.Ayearlater,thebanktookpossession
of the foreclosed property. The garment firm's
business operations ceased without a declaration
ofbankruptcy.Caspar,anemployeeofXYZ&Co.,
was dismissed from employment due to the
cessation of business of the firm. He filed a
complaint against XYZ & Co. and the bank. The
LaborArbiter,afterhearing,sofoundthecompany
liable, as claimed by Caspar, for separation pay.
PremiereBankwasadditionallyfoundsubsidiarily
liableuponthethesisthatthesatisfactionoflabor
benefitsduetotheEeissuperiortotherightofa

34

mortgagee of property. Was the Labor Arbiter


correctinhisdecision?
A:No.ThepreferenceofcreditsestablishedinArt.
110oftheLCcannotbeinvokedintheabsenceof
any insolvency proceedings, declaration of
bankruptcy, or judicial liquidation. (DBP v.
Santos,G.R.No.75801,March20,1991).(2003Bar
Question)
Q: Distinguish the mortgage created under the
CivilCodefromtherightof1stpreferencecreated
bytheLCasregardstheunpaidwagesofworkers.
Explain.
A: A mortgage directly subjects the property upon
whichitisimposed,whoeverthepossessormaybe,
tothefulfillmentoftheobligationforwhichitwas
constituted. It creates a real right which is
enforceableagainstthewholeworld.Itistherefore
alienonanidentifiedrealproperty.
Mortgage credit is a special preferred credit under
the Civil Code in the classification of credits. The
preference given by the LC when not attached to
anyspecificpropertyisanordinarypreferredcredit.
(1995BarQuestion)
i.LaborCodeprovisionsforwageprotection
Q: What are the Labor Code provisions for wage
protection
A:
Art.112.NonInterferenceinDisposalofWagesNo
employershalllimitorotherwiseinterferewiththe
freedom of any employee to dispose of his wages.
Heshallnotinanymannerforce,compeloroblige
his employees to purchase merchandise,
commoditiesorotherpropertiesfromtheemployer
orfromanyotherperson,orotherwisemakeuseof
anystoreorserviceofsuchemployeroranyother
person.

Art. 113 Wage DeductionNo employer in his own


behalf or in behalf of any person, shall make any
deduction from the wages of his employees,
except:

(a) Incaseswheretheworkerisinsuredwith
his consent by the employer, and the
deductionistorecompensetheemployer
for the amount paid by him as premium
ontheinsurance;
(b) For union dues, in cases where the right
of the worker or his union to check off
has been recognized by the employer or
authorized in writing by the individual
workerconcerned;and

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
(c) Incaseswheretheemployerisauthorized
by law or regulations issued by the
SecretaryofLabor.

Art. 114 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 equipments supplied by the
employer;exceptwhentheemployerisengagedin
such trades, occupations or business where the
practiceofmakingdeductionsorrequiringdeposits
isarecognizedone,orisnecessary,ordesirableas
determined by the Secretary of Labor in
appropriaterulesandregulations.

Art. 115 LimitationsNo 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
responsibilityhasbeenclearlyshown.

Art 116 Withholding of Wages and Kickbacks


ProhibitedIt shall be unlawful for any person,
directlyorindirectly,towithholdanyamountfrom
thewagesofaworkerorinducehimtogiveupany
part of his wages by force, stealth, intimidation,
threat or by any other means whatsoever without
theworkersconsent.

Art117DeductiontoEnsureEmploymentItshallbe
unlawfultomakeanydeductionfromthewagesof
anyemployeeforthebenefitoftheemployerorhis
representative or intermediary as consideration of
a promise of employment or retention in
employmentorretentioninemployment.

Art. 118 Retaliatory MeasuresIt 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
anycomplaintinstitutedanyproceedingunderthis
Title or has testified or is about to testify in such
proceedings.

j.Allowabledeductionswithoutemployees
consent

Q:Whatistheruleinwagedeductions?
A:
GR:Itisstrictlyprohibited

XPN:
1. Deductions under Art. 113 for insurance
premiums
2. Unionduesincaseswheretherightofthe
workerorhisuniontocheckoffhasbeen
recognized by the employer (Er) or
authorized in writing by the individual

worker concerned (Art. 113). Art. 241(o)


providesthatspecialassessmentsmaybe
validly checkedoff provided that there is
an individual written authorization duly
signedbyeveryemployee(Ee).
3. DeductionsforSSS,MedicareandPagibig
premiums
4. TaxeswithheldpursuanttotheTaxCode
5. Deductions under Art. 114 for loss or
damagetotools,materialsorequipments
6. Deductions made with the written
authorization of the Ee for payment to a
thirdperson.(Sec13,RuleVIII,BookIIIof
theIRR)
7. Deductions as disciplinary measures for
habitual tardiness (Opinion dated March
10,1975oftheSLE)
8. AgencyfeesunderArt.248(e)
9. Deductions for value of meals and
facilitiesfreelyagreedupon
10. IncasewheretheEeisindebtedtotheEr
where such indebtedness has become
due and demandable. (Art. 1706, Civil
Code)
11. Incourtawards,wagesmaybesubjectof
execution or attachment, but only for
debtsincurredforfood,shelter,clothing,
and medical attendance. (Art. 1703, Civil
Code)
12. Salarydeductionofamemberofalegally
established cooperative. (R.A. 6938, Art.
59)

k.Attorneysfees

Q: What are the limitations to the assessment of


attorneyslienagainsttheculpableparty?
A:
1.

2.

In case of unlawful withholding of wages


10% of the amount of wages to be
recovered.
It shall be unlawful for any person to
demand or accept, in any judicial or
administrative proceedings for the
recoveryofwages,attysfeesthatexceed
10%oftheamountofwagesrecovered.

Note: The prohibition on attys lien refers to


proceedingsforrecoveryofwagesandnottoservices
rendered in connection with CBA negotiations. In the
latter case, the amount of attys fees may be agreed
upon by the parties and the same is to be charged
againstunionfundsasprovidedforinArt.222ofthe
Labor Code. (Pacific Banking Corp.v. Clave, G.R. No.
56965,Mar.7,1984)

Q:Whatisordinaryattorneysfee?

35

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
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UST GOLDEN NOTES 2011


A: It is the reasonable compensation paid to a
lawyer by his client for the legal services he has
rendered.

Q:Whatisextraordinaryattorneysfee?

A: It is the indemnity for damages ordered by the


courttobepaidbythelosingpartyinlitigationand
is not to be paid to the lawyer but to the client,
unless they have agreed that the award shall
pertain to the lawyer as an additional
compensation or as a part thereof. (Traders Royal
Bank Ees UnionIndependent v. NLRC, G.R. No.
120592,Mar.14,1997)
Note: Art.111 of the LC deals with the extraordinary
concept of attorneys fees. It may not be used as the
standardinfixingtheamountpayabletothelawyerby
hisclientforthelegalservicesherendered.(Masmud
v.NLRC,G.R.No.183385,Feb.13,2009)

Q:Santiago,aprojectworker,wasbeingassigned
by his Er, Bagsak Builders, to Laoag, Ilocos Norte.
Santiago refused to comply with the transfer
claiming that it, in effect, constituted a
constructive dismissal because it would take him
away from his family and his usual work
assignments in Metro Manila. The Labor Arbiter
(LA) found that there was no constructive
dismissal but ordered the payment of separation
pay due to strained relations between Santiago
and Bagsak Builders plus attysfees equivalentto
10%ofthevalueofSantiago'sseparationpay.
Istheawardofatty'sfeesvalid?Statethereasons
foryouranswer.
A: No, the award of attys fees is not valid.
AccordingtotheLC(Art.111[a]),attysfeesmaybe
assessedincasesofunlawfulwithholdingofwages
which does not exist in the case. The worker
refusedtocomplywithalawfultransferorder,and
hence,arefusaltowork.Giventhisfact,therecan
benobasisforthepaymentofatty'sfees.
Could the LA have validly awarded moral and
exemplary damages to Santiago instead of atty's
fees?Why?
A: No, moral and exemplary damages can be
awardedonlyiftheworkerwasillegallyterminated
in an arbitrary or capricious manner. (Nueva Ecija
Electric Cooperative Inc., Ees Assn., vs. NLRC, G.R.
No. 116066, Jan. 24, 2000; Cruz vs. NLRC, G.R. No.
116384, Feb. 7, 2000; Phil. Aeolus etc., vs. NLRC,
G.R. No. 124617, April 28, 2000). (2001 Bar
Question)

36

Q: When can attorneys fees and damages be


awardedinanillegaldismissalcase?

A: For attorneys fees, moral and exemplary


damages to be granted, the plaintiff must prove
thatthefactsofhiscasefallwithintheenumerated
instances in the Civil Code. Thus, moral damages
may only be recovered where the dismissal or
suspension of the employee was attended by bad
faith or fraud, or constituted an act oppressive to
labor,orwasdoneinamannercontrarytomorals,
goodcustomsorpublicpolicy.Inotherwords,the
act must be a conscious and intentional design to
doawrongfulactforadishonestpurposeorsome
moralobliquity.Exemplarydamages,ontheother
hand, may only be awarded where the act of
dismissal was effected in a wanton, oppressive or
malevolent manner. (Chaves v. NLRC,G.R. No.
166382,June27,2006)

Q:Whatisunionservicefee?

A: The appearance of labor federations and local


unions as counsel in labor proceedings has been
givenlegalsanctionunderArt.222oftheLC,which
allows nonlawyers to represent their organization
thereof.Thesaidlaborfederationsandlocalunions
haveavalidclaimtoattysfeeswhichiscalledthe
UnionServiceFee.
l.Criteria/FactorsforWageSetting
Q:Whatarethestandardsorcriteriaforminimum
wagesetting?
A: In the determination of such regional minimum
wages, the Regional Board shall, among other
relevantfactorsconsiderthefollowing:
a)
b)

Thedemandforlivingwages
Wage adjustment visavis the consumer
priceindex
c) The cost of living and changes or
increasestherein
d) Theneedsofworkersandtheirfamilies
e) Theneedtoinduceindustriestoinvestin
thecountryside
f) Improvementsinstandardsofliving
g) Theprevailingwagelevels
h) Fair return of the capital invested and
capacitytopayofemployers
i) Effects on employment generation and
familyincome
j) The equitable distribution of income and
wealthalongtheimperativesofeconomic
andsocialdevelopment

Q:Whatissalaryceilingmethod?

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
A: A method of minimum wage adjustment
whereby the wage adjustment is applied to Ees
receiving a certain denominated ceiling. In other
words, workers already being paid more than the
existingminimumwagearealsotobegivenawage
increase. (ECOP v. NWCP, G.R. No. 96169, Sep. 24,
1991)

Q:Whatisafloorwagemethod?

A:Itinvolvesthefixingofadeterminateamountto
beaddedtotheprevailingstatutoryminimumwage
rates.

Q:TheRegionalWageBoardofRegionIIissueda
Wage Order granting all Ees in the private sector
throughout the region an acrosstheboard
increaseofP15.00daily.IsthisWageOrdervalid?

A:TheWageOrderisvalidinsofarasthemandated
increase applies to Ees earning the prevailing
minimum wage rate at the time of the passage of
the Wage Order and void with respect to its
application to Ees receiving more than the
prevailing minimum wage rate at the time of the
passage of the Wage Order. Pursuant to its
authority, the Regional Wage Boards may issue
wage orders which set the daily minimum wage
rates. In the present case, the Regional Wage
Board did not determine orfixthe minimum wage
rate.Itdidnotsetawagelevelnorarangetowhich
a wage adjustment or increase shall be added.
Instead, it granted an acrosstheboard wage
increaseofP15.00toallEesintheregion.Indoing
so,theRegionalWageBoardexceededitsauthority
by extending the coverage of the Wage Order to
wage earners receiving more than the prevailing
minimumwagerate,withoutadenominatedsalary
ceiling.TheWageOrdergrantedadditionalbenefits
notcontemplatedbyR.A.No.6727.(MBTCvNWPC
Commission,G.R.No.144322,Feb.6,2007)

Q: Since the Wage Order was declared void with


respect to its application to employees receiving
more than the prevailing minimum wage rate at
thetimeofthepassageoftheWageOrder,should
these Ees refund the wage increase received by
them?

A:No.TheEesshouldnotrefundthewageincrease
that they received under the invalidated Wage
Order.Beingingoodfaith,theemployeesneednot
refund the benefits they received. Since they
received the wage increase in good faith, in the
honest belief that they are entitled to such wage
increaseandwithoutanyknowledgethattherewas
no legal basis for the same, they need not refund
the wage increase that they already received.

(MBTCvNWPCCommission,G.R.NO.144322,Feb.
6,2007)

3.RESTDAY

a.Righttoweeklyrestday,Preferemceofthe
employee,whenworkonrestdayauthorized

Q:Whatistherighttoweeklyrestday(WRD)?
A: Every employer shall give his employees a rest
period of not less than 24 consecutive hours after
every6consecutivenormalworkdays.(Sec.3,Rule
III,BookIII,IRR)
Q:WhatisthescopeofWRD?

A:Itshallapplytoallemployerswhetheroperating
forprofitornot,includingpublicutilitiesoperated
byprivatepersons.(Sec.1,RuleIII,BookIII,IRR)

Q:WhodeterminestheWRD?

A:GR:ErshalldetermineandscheduletheWRDof
hisEe.

XPNs:
1. CBA
2. RulesandregulationsastheSLEprovides
3. Preference of employee (Ee) based on
religious grounds Ee shall make known
his preference in writing at least 7 DAYS
beforethedesiredeffectivityoftheinitial
rest day so preferred. (Sec. 4(1), Rule III,
BookIII,IRR)

XPN to XPN no. 3: Employer (Er) may


schedule the WRD of his choice for at
least 2 days in a month if preference of
theemployeewillinevitablyresultin:
a. serious prejudice to the operations
oftheundertakingand
b. the Er cannot normally be expected
to resort to other remedial
measures.(Sec.4(2),RuleIII,BookIII,
IRR)

Q: When should employees (Ees) be informed of


theirscheduleofWRD?

A:Ershallmakeknownrestperiodbymeansof:
1. Writtennotice
2. Postedconspicuouslyintheworkplace
3. At least 1 week before it becomes
effective.(Sec.5,RuleIII,BookIII.IRR)

Q: Can an Ee be compelled to work on his rest


day?

37

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


A:GR:No.

XPN:
1. Urgent work to be performed on the
machinery, equipment or installation, to
avoid serious loss which the Er would
otherwisesuffer;
2. Nature of work requires continuous
operations for 7 days in a week or more
and stoppage of the work may result in
irreparableinjuryorlosstotheEr;
3. Abnormalpressureofworkduetospecial
circumstances, where the Er cannot be
ordinarily expected to resort to other
measures;
4. Actualorimpendingemergencies(serious
accident,fire,flood,typhoon,earthquake,
etc.)
5. Prevent loss or damage to perishable
goods;
6. Analogous or similar circumstances as
determinedbytheSLE;
7. Work is necessary to avail of favorable
weather or environmental conditions
where performance or quality of work is
dependentthereon.

Q.WhatistherulewhenanEevolunteerstowork
onhisrestdayunderothercircumstances?

A:Heshallexpressitinwritingsubjecttoadditional
compensation.(Sec.6[2],RuleIII,BookIII,IRR)

Q:Whatispremiumpay?

A: It is the additional compensation for work


rendered by the employee on days when normally
he should not be working such as special holidays
andweeklyrestdays.

Q:CantheErandEeagreeontherateofpremium
payotherthanthatprovidedbylaw?

A: Yes. Nothing shall prevent the Er and his Ee or


their representatives from entering into any
agreement with terms more favorable to the Ees
Provided: It shall not be used to diminish any
benefit granted to the Ees under existing laws,
agreementsandvoluntaryErpractices.(Sec.9,Rule
III,BookIII,IRR)

Q: What are the rates of compensation for rest


day,Sundayorholidaywork?

A:
RATESOFADDITIONAL
COMPENSATION

INSTANCES

38

Workonascheduled
restday

Workhasnoregular
workdaysandrestdays
(Ifperformedon
SundaysandHolidays)
WorkonaSunday
(IfEesscheduledrest
day)

Workperformedonany
SpecialHoliday

Workperformedona
SpecialHolidayand
samedayisthe
scheduledrestday

Workperformedona
SpecialWorkingHoliday

+30%PremiumPay(PP)
of100%regularwage
(RW).(Sec.7,RuleIII,Book
III,IRR)
+30%PPof100%RW.
(Sec.7,RuleIII,BookIII,
IRR
+30%PPof100%RW.
(Sec.7,RuleIII,BookIII,
IRR)
1st8hrs:+30%PPof
100%RW

Excessof8hrs:+30%of
hourlyrateonsaiddate.
(M.C.No.10,Seriesof
2004)
1st8hrs:+50%PPof
100%regularwage

Excessof8hrs:+30%of
hourlyrateonsaiddate.
(M.C.No.10,Seriesof
2004)
Eeisonlyentitledtohis
basicrate.NoPPis
required.

Reason:Workperformed
isconsideredworkon
ordinaryworkingdays.
(Sec.7,RuleIII,BookIII,
IRR)

Note:HolidayworkprovidedunderArt.93pertainsto
specialholidaysorspecialdays.

Q: Jose applied with Mercure Drug Company for


thepositionofSalesClerk.MercureDrugCompany
maintains a chain of drug stores that are open
everydaytilllateatnight.Josewasinformedthat
he had to work on Sundays and holidays at night
as part of the regular course of employment. He
was presented with a contract of employment
settingforthhiscompensationonanannualbasis
withanexpresswaiverofextracompensationfor
workonSundaysandholidays,whichJosesigned.
IssuchawaiverbindingonJose?Explain.

A: As long as the annual compensation is an


amount that is not less than what Jose should
receiveforallthedaysthatheworks,plustheextra
compensation that he should receive for work on
his weekly rest WRD and for night differential pay
forlatenightwork,consideringthelawsandwage
orders providing for minimum wages, and the
pertinentprovisionsoftheLC,thenthewaiverthat
Jose signed is binding on him for he is not really
waivinganyrightunderLaborLaw.Itisnotcontrary

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
tolaw,morals,goodcustoms,publicorderorpublic
policy for an Er and Ee to enter into a contract
where the Ees compensation that is agreed upon
alreadyincludesalltheamountsheistoreceivefor
OT work and for work on weekly rest days and
holidaysandfornightdifferentialpayforlatenight
work.(1996BarQuestion)
4.HOLIDAYS

a.RighttoHolidayPay

holidays.

REGULARHOLIDAYS
NewYearsDay
MaundyThursday
GoodFriday
EidlFitr
ArawngKagitingan
LaborDay
IndependenceDay

A: It is a premium given to employees (Ees)


pursuanttolawevenifhehasnotbeensufferedto
work on a regular holiday. It is limited to the 11
regularholidays,alsocalledlegalholidayslistedby
law. The employee (Ee) should not have been
absentwithoutpayontheworkingdaypreceeding
theregularholiday.
Q:Whataretheclassesofspecialdays(SD)?

A:
1. NationalSpecialPublicHoliday
GR:Nonworkingdays

XPN:Otherwisedeclaredbythe
President

2. Local Special Public Holiday Regular


workingday.(LOI814asamendedbyLOI
1087)

DATE
November1
December31
August21

December24

February25

e.g.Maniladay(in
Manilaonly)

Q:Whatareregularholidays(RH)?
A: They are compensable whether worked or
unworked subject to certain conditions. They are
also called legal holidays. The following are

(Presidential

DATE
January1
April21
April22
MovableDate
April9
May1
June12
Aug.29(lastMondayof
August)
Nov.30
December25
Dec.30

NationalHeroesDay

Q:Whatisholidaypay(HP)?

NATIONALSPECIALDAYS
AllSaintsDay
LastDayoftheYear
NinoyAquinoDay
Otherdaysdeclaredbylaw
1. SpecialNonworking
days
2. SpecialPublicHolidays
3. SpecialNational
Holiday
4. SpecialHoliday(forall
schools)
a. EdsaRevolution
Anniversary
LOCALSPECIALDAYS
Thosedeclaredby:
1. Lawor
2. Ordinance

considered regular
ProclamationNo.18)

BonifacioDay
ChristmasDay
RizalDay

Note: RA 9492 has already been superseded by


Presidential Proclamation No. 18 issued by President
BenignoC.AquinoIIIplacingtheobservanceofregular
holidays and national special days according to their
respectivedatesinthecalendar.

Q:WhatareMuslimHolidays(MH)?
A: The MHs, except Eidl Fitr, are observed in
specified Muslim areas. All private corporations,
offices, agencies and entities or establishments
operating within the designated Muslim provinces
andcitiesarerequiredtoobserveMH.
Q: When shall Eidl Fitr and/or Eidl Adha be
declaredanationalholiday?
A:Theproclamationdeclaringanationalholidayfor
the observance of Eidl Fitr and/or Eidl Adha shall
beissued:
1.

AftertheapproximatedateoftheIslamic
holiday has been determined in
accordancewiththe:
a. IslamicCalendar(Hijra)or
b. LunarCalendaror
c. Uponastronomicalcalculations
d. Whicheverispossibleorconvenient
2. The Office of Muslim Affairs shall inform
the Office of the President on which day
the holiday shall fall. (Sec.2, Proc. No.
1841)
Q: Can a Christian employee (Ee) working within
theMuslimareabecompelledtoworkduringMH?
A: No. Christians working within the Muslim areas
may not report for work during MH. Not only
Muslim but also Christian Ee in the designated
provinces and cities are entitled to HP on the MH.
(SMCv.CA,G.R.146775,Jan.30,2002)

39

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


Q: Can a Muslim Ee working outside the Muslim
areabecompelledtoworkduringtheobservance
oftheMH?
A:GR: No.MuslimEesshallbeexcusedfromwork
during MH without diminution of salary or
wages.

XPN: Those who are permitted or suffered to


workonMHareentitledtoatleast100%basic
pay+100%aspremiumoftheirbasicpay.(SMC
v.CA,G.R.No.146775,Jan.30,2002)

Note: RH falling within temporary or periodic


shutdown and temporary cessation of work are
compensable. However, if the temporary or periodic
shutdown and cessation of work is due to business
reverses, the employer may not pay the RHs during
suchperiod.

Q:DistinguishRHfromSD.
A:
REGULARHOLIDAY
SPECIALHOLIDAY
IfUnworked
Regularpay
(subject
to
certain
NoPay
conditions for daily paid
Ees)
Ifworked
+ 30% premium pay of
2xregularpay(200%)
100%regularwage
Othermatters
Setbylaw
Setbyproclamation
Limited to those provided
Notexclusive
underArt.94,LC

Q:WhoareentitledtoHP?
A:GR:Allemployees(Ees)areentitled.(Sec.1,Rule
IV,BookIII,IRR)

XPNS:
1. Govt Ees and any of its political
subdivisions, including GOCCs (with
originalcharter)
2. Retail and service establishments
regularlyemployinglessthan10workers
3. Domestic helpers and persons in the
personalserviceofanother
4. Ee engaged on task or contract basis or
purelycommissionbasis
5. MembersoftheFamilyoftheErwhoare
dependentonhimforsupport
6. Managerial Ee and other member of the
managerialstaff
7. FieldpersonnelandotherEewhosetime
andperformanceareunsupervisedbythe
Er

40

8.

Eepaidfixedamountforperformingwork
irrespective of the time consumed in the
performance thereof. (Sec. 1, Rule IV,
BookIII,IRR)

Q:Whatareretailestablishments?
A: They are engaged in the sale of goods to end
usersforpersonalorhouseholduse.(e.g.Grocery)
Q:Whatareserviceestablishments?
A: They are engaged in the sale of services to
individualsfortheirownorhouseholduse.(e.g.TV
repairshop)
Q:Isanexerciseofprofessionretailorservice?
A:Itisneitherretailnorservice.
Q:MayanErrequireanEetoworkonRH?

A: Yes. But Ee shall be compensated twice his


regularrate.

Q:WhataretheratesofcompensationforRHon
EesregularworkdayandRHonEesrestday?

A:
FORMULASTOCOMPUTEWAGESON
REGULARHOLIDAYS(RH)
(M.C.No.10,Seriesof2004)
RHonEesregular
RHonEesrestday
workday
Ifunworked
100%
100%

e.g. 300 Php regular wage


e.g.300Php(RW)
(RW)
Ifworked(1st8hrs)
+30%of200%
200%

e.g600(200%ofRW)
e.g.300(RW)
X0.3
+300
180
600=TotalWage(TW)

180+600=780(TW)
Ifworked(OT)(excessof8hrs)
230%

230% + 30% of hourly


200%+30%ofhourlyrate rateonsaiddate
onsaiddate

Q:What is animportant condition that shouldbe


metinordertoavail/receivethesingleHP?
A:TheEeshouldnothavebeenabsentwithoutpay
ontheworkingdayprecedingtheRH.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
Q: Distinguish between monthly paid and daily
paidEes.
A:
MonthlyPaidEes
One who is paid his wage or
salary for everyday of the
month, including rest days,
Sundays, regular or special
days, although he does not
regularlyworkonthesedays.

Not excluded from benefit of


HP.

DailyPaidEes
One who is paid his
wage or salary only
on those days he
actually
worked,
except in cases of
regular or special
days, although he
does not regularly
workonthesedays.

Q: What is the effect if a legal holiday falls on a


Sunday?
A: A legal holiday falling on a Sunday creates no
legal obligation for the Er to pay extra to the Ee
who does not work on that day, aside from the
usual HP to its monthly paid Ee. (Wellington v.
Trajano,G.R.114698,July3,1995)
(1)InCaseofAbsences

cleaning of machineries compensated.


isundertaken
Due to business reverses
RH may not be paid
(cessation as authorized by
bytheEr
theSec.ofLabor)

(3)HolidayPayofTeachers,Pieceworkers,
seafarers,seasonalworkers
Q:WhataretheHPsofcertainemployees?
A:
EMPLOYEES
Private
school
teachers (Faculty
members
of
colleges
and
universities)
Eepaidby:
1. resultsor
2. output
(Piece
work
payment)

Q:Discusstheconceptofabsences.
SeasonalWorkers

A:
ABSENCES
LOAwithpayontheday
LOAwithoutpay onthe
immediatleypreceding
dayimmediately
RH.
precedingaRH.
GR: An Ee may not be
paid the required HP
if he has not worked
onsuchRH.
XPN: Where the day
immediately
GR: All covered Ees are
preceding
the
entitledtoHP.
holidayisa:
1. Nonworking day
(NWD)
in
the
establishmentor
2. The scheduled rest
day(RD)oftheEe.

(2)InCaseofTemporaryCessationofWork
Q:Whatistheeffectincasethereisatemporary
or periodic shutdown and temporary cessation of
work?
A:

1.
2.

TEMPORARYORPERIODICSHUTDOWNand
TEMPORARYCESSATIONOFWORK
(Sec.7,RuleIV,BookIII,IRR)
Instances
Rule:
Yearlyinventoryor
RH falling within the
When the repair or period
shall
be

Workershavingno
regularworkdays
Seafarers

RULE
RH
during
semestral
vacations
NotentitledtoHP
2. RH
during
Christmas
vacation
ShallbepaidHP
HP shall not be less than his
average daily earnings for the
last 7 actual work days
precedingtheRH.
Provided: HP shall not be less
than the statutory minimum
wagerate.
MaynotbepaidtherequiredHP
duringoffseasonwheretheyare
notatwork.
1.

ShallbeentitledtoHP
ShallbeentitledtoHP

Q: Are the school faculty who according to their


contracts are paid per lecture hour entitled to
unworkedHP?

A:
1. If during regular holiday No. Art. 94 of
LC is silent with respect to faculty members
paidbythehourwhobecauseoftheirteaching
contracts are obliged to work and consent to
be paid only for work actually done (except
whenanemergencyorafortuitouseventora
national need calls for the declaration of
special holidays). RH specified as such by law
areknowntobothschoolandfacultymembers
as "no class days" certainly the latter do not
expect payment for said unworked days, and
this was clearly in their minds when they
enteredintotheteachingcontracts.(JoseRizal
Collegev.NLRC,G.R.No.65482,Dec.1,1987)

2. IfduringspecialpublicholidaysYes.The
law and the IRR governing HP are silent as to
payment on Special Public Holidays. It is
readily apparent that the declared purpose of
the HP which is the prevention of diminution
of the monthly income of the Ees on account

41

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


of work interruptions is defeated when a
regular class day is cancelled on account of a
specialpublicholidayandclasshoursareheld
on another working day to make up for time
lost in the school calendar. Otherwise stated,
thefacultymember,althoughforcedtotakea
rest, does not earn what he should earn on
thatday.Beitnotedthatwhenaspecialpublic
holiday is declared, the faculty member paid
by the hour is deprived of expected income,
anditdoesnotmatterthattheschoolcalendar
is extended in view of the days or hours lost,
for their income that could be earned from
othersourcesislostduringtheextendeddays.
Similarly, when classes are called off or
shortened on account of typhoons, floods,
rallies, and the like, these faculty members
must likewise be paid, whether or not
extensions are ordered. (Jose Rizal College v.
NLRC,G.R.No.65482,Dec.1,1987)

Q: Lita, a full time professor in San Ildefonso


University,ispaidonaregularmonthlybasis.She
teachesforaperiodof10monthsinaschoolyear,
excluding the 2 month summerbreak. During the
semestral break, the University did not pay her
emergency Cost of Living allowance (ECOLA)
althoughshereceivedherregularsalarysincethe
semestralbreakwasallegedlynotanintegralpart
of the school year and no teaching service were
actually rendered by her. In short, the University
invoked the principle of "no work, no pay". She
seeksyouradviceonwhetherornotsheisentitled
to receive her ECOLA during semestral breaks.
Howwouldyourespondtothequery?

A: There is no longer any law making it the legal


obligation of an employer to grant an Emergency
Cost of Living Allowance (ECOLA). Effective 1981,
the mandatory living allowances provided for in
earlier Presidential Decrees were integrated into
the basic pay of all covered employees. Thus,
whether the ECOLA will be paid or not during the
semestral break now depends on the provisions of
theapplicablewageorderorcontractwhichmaybe
a CBA, that many grant said ECOLA. (1997 Bar
Question)
Q:WhatistheconceptofdoubleHP?
A:2RHonsameday.

Present
LOAw/pay

MAUNDY
THURSDAY&ARAW
NGKAGITINGAN
unworked
unworked

LOAw/pay

worked

WED

42

Authorized
absence

worked

Same

Workedanddayis
RestDay

300%
(atleast)
390%
(+30%of
each3
100%)

Q:IsdoubleHPapplicableatpresent?

A: No, because Araw ng Kagitingan is moved to


MondaynearestApril9.(R.A.9242)

Q:WhatistheconceptofsuccessiveRH?

A:
WED
Worked
LOA
w/pay
LOAw/o
pay
LOAw/o
pay

MAUNDY
THURS
RH

GOOD
FRIDAY
RH

ENTITLED
TOHP
Yes.Both

RH

RH

Yes.Both

RH

RH

No.Both

Worked

RH

Yes.Onlyto
HPon
Friday

Q: What are the conditions so that an Ee may be


entitledto2successiveHP?

st
A:Onthedayimmediatelyprecedingthe1 RH,he
mustbe:

1. Present(worked),or
2. On LOA with pay. (Sec. 10, Rule IV, Book
III,IRR)

Q:Whatiftheconditionsarenotmet?
A:Hemustworkonthe1stRHtobeentitledtoHP
onthe2ndRH.(Sec.10,RuleIV,BookIII,IRR)
5.LEAVES

a.ServiceIncentiveLeavePay

Q:Whatisserviceincentiveleave(SIL)?
A: It is 5 days leave with pay for every employee
who has rendered at least 1 yr of service. It is
commutabletoitsmoneyequivalentifnotusedor
exhaustedattheendofyear.
Q:Whatdoyoumeanbyatleast1yearofservice?

RATE
200%
200%
300%
(atleast)

A: Service for not less than 12 months, whether


continuous or broken reckoned from the date the
employee started working, including authorized
absences and paid regular holidays unless the
working days in the establishment as a matter of

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
practice or policy, or that provided in the
employment contract is less than 12 months, in
which case said period shall be considered as one
year.(Sec.3,RuleV,BookIII,IRR)

theSILmaybeonaproratabasis.(No.VI(c),DOLE
HandbookonWorkersStatutoryMonetaryBenefit)
Q: Are parttime workers entitled to the full
benefitoftheyearly5daySIL?

Q:WhoareentitledtoSIL?
A: GR: Applies to every Ee who has rendered at
least1yearofservice.(Art.95[a])

XPNS:
1. Government Ees and any of its political
subdivisionsincludingGOCCs
2. Thosealreadyenjoyingthebenefit
3. Domestic helpers and persons in the
personalservicesofanother
4. Thosealreadyenjoyingvacationleavewith
payofatleast5days
5. ManagerialEes
6. Field personnel and other Ees whose
performanceisunsupervisedbytheEr
7. Employed in establishments regularly
employinglessthan10workers
8. Exemptestablishments
9. Engaged on task or contract basis, purely
commissionbasis,orthosewhoarepaidin
a fixed amount of performing work
irrespective of the time consumed in the
performancethereof.(Art.95[b])

Q: Are teachers of private schools on contract


basisentitledtoSIL?
A:Yes.Thephrase"thosewhoareengagedontask
orcontractbasis"should,however,berelatedwith
"field personnel" applying the rule on ejusdem
generis that general and unlimited terms are
restrained and limited by the particular terms that
they follow. Clearly, Cebu Institute of Technology
teaching personnel cannot be deemed as field
personnelwhichrefers"tononagriculturalEeswho
regularly perform their duties away from the
principalplaceofbusinessorbranchofficeoftheEr
andwhoseactualhoursofworkinthefieldcannot
be determined with reasonable certainty. (Par. 3,
Art. 82, LC). (CIT vs. Ople, G.R. No. 70203, Dec. 18,
1987)
Q:IsSILcommutabletoitsmonetaryequivalentif
notusedorexhaustedattheendoftheyear?
A:Yes.Itisaimedprimarilyatencouragingworkers
to work continuously and with dedication to the
company.
Q:Whatisthebasisforcashconversion?
A: The basis shall be the salary rate at the date of
commutation. The availment and commutation of

A:Yes.Art.95ofLaborCodespeaksofthenumber
ofmonthsinayearforentitlementtosaidbenefit.
(Bureau of Working Conditions Advisory Opinion to
Phil.IntegratedExporters,Inc.)
Q: Are piecerate workers entitled to the full
benefitoftheyearly5daySIL?
A:Itdepends.
1.

Yes.Provided:
a. Theyareworkinginsidethepremises
oftheemployer(Er)and
b. Under the direct supervision of the
Er.
2. No.Provided:
a. They are working outside the
premisesoftheEr
b. Hours spent in the performance of
work cannot be ascertained with
reasonablecertainty
c. The are not under the direct
supervisionoftheEr

Q: Does it apply to Ees with salaries above


minimumwage?

A:No.Thedifferencebetweentheminimumwage
andtheactualsalaryreceivedbytheEescannotbe
deemedastheir13thmonthpayandSILpayassuch
difference is not equivalent to or of the same
import as the said benefits contemplated by law.
(JPL Marketing Promotions v. CA, G.R. No. 151966,
July8,2005.)
Q: Explain the entitlement of terminated Ees to
SIL.
A:
1.

2.

Illegally dismissed Ees entitled to SIL


until actual reinstatement. (Integrated
Contractor and Plumbing Works, Inc. v.
NLRC,G.R.No.Aug.9,2005)
Legally dismissed Ees the Ee who had
not been paid of SIL from outset of
employment is entitled only of such pay
after a year from commencement of
service until termination of employment
orcontract.(JPLMarketingPromotionsv.
CA,G.R.No.151966,July8,2005)

43

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UST GOLDEN NOTES 2011


said Ee would otherwise have been
entitledto,andtheSSSshallinturnpay
suchamounttotheEeconcerned.

b.MaternityLeave

Q:Whatismaternityleavebenefit?

A:Acoveredfemaleemployee(Ee)isentitledtoa
daily maternity benefit equivalent to 100% of her
presentbasicsalary,allowancesandotherbenefits
orthecashequivalentofsuchbenefitsfor60days
or78daysincaseofcaesariandelivery.
Q: What are the requirements in order that
maternitybenefitsmaybeclaimed?
A:
1.
2.

There is childbirth, abortion or


miscarriage
She has paid at least 3 monthly
contributions

Q:Whataretheconditions?
A:
1.

2.

3.

The Ee shall have notified her employer


(Er) of her pregnancy and the probable
date of her childbirth which notice shall
betransmittedtotheSSS

ThepaymentshallbeadvancedbytheEr
in 2 equal installments within 30 days
from the filing of the maternity leave
application

Incaseofcaesariandelivery,theEeshall
bepaidthedailymaternitybenefitfor78
days

4.

5.

6.

7.

44

Payment of daily maternity benefits shall


be a bar to the recovery of sickness
benefits for the same compensable
periodof60daysforthesamechildbirth,
abortion,ormiscarriage
The maternity benefits provided under
Section 14A shall be paid only for the
firstfourdeliveries

The SSS shall immediately reimburse the


Er of 100% of the amount of maternity
benefits advanced to the Ee by the Er
uponreceiptofsatisfactoryproofofsuch
paymentandlegalitythereof;and

If an Ee should give birth or suffer


abortion or miscarriage without the
required contributions having been
remitted for her by her Er to the SSS, or
withoutthelatterhavingbeenpreviously
notified by the Er of the time of the
pregnancy, the Er shall pay to the SSS
damagesequivalenttothebenefitswhich

c.PaternityLeave

Q:Whatistheconceptofpaternityleavebenefits?

A: Notwithstanding any law, rules and regulations


to the contrary, every married male employee in
theprivateandpublicsectorsshallbeentitledtoa
paternityleaveof7dayswithfullpayforthefirst4
deliveriesofthelegitimatespousewithwhomheis
cohabiting.
Q:Whatispaternityleave?
A: It refers to the benefits granted to a
marriedmaleemployeeallowinghimnottoreport
for work for 7 days but continues to earn the
compensation therefore, on thecondition that his
spouse has delivered a child or suffered
amiscarriage for purposes of enabling him to
effectivelylendsupporttohiswifeinherperiodof
recovery and/or in the nursing of the newlyborn
child.
Q: What are the requirements in order to avail
paternityleave?
A: The maleemployee (Ee) applying for paternity
leaveshall:
1.

Notifyhisemployer(Er)ofthepregnancy
ofhislegitimatespouseand
Theexpecteddateofsuchdelivery.

2.

Q: What are the conditions for entitlement to


paternityleave?

A:ThemaleEeis;
1. Legallymarriedto,andiscohabitingwith
thewomanwhodeliversthebaby
2. Eeofprivateorpublicsector;
3. Onlyforthefirst4deliveriesoflegitimate
spousewithwhomheiscohabiting;and
4. Notify his Er of the pregnancy of his
legitimate spouse and the expected date
ofsuchdelivery

Note: For purposes of this Act, delivery shall include


childbirthoranymiscarriage.

Q: Jemuel is a bank employee of BPI. He is


cohabiting with Paula for straight five years with
whom he has four children. On the fifth year of
their cohabitation, Paula had her miscarriage.
Jemuelisavailinghimselfofhispaternityleave.Is
heentitledtopaternityleave?

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
A:
No. Jemuel is not entitled to paternity
leavebecausethefactsofthecaseonlyshowthat
heisonlycohabitingwith Paula.Thelawexpressly
provides that the male must be legally married to
the woman with whom he is cohabiting as a
condition for entitlement of paternity leave. Even
assumingthatJemuelislegallymarriedtoPaula,he
cannotavailalsoofthepaternityleavebecausethe
law limits the deliveries only to four which include
childbirth or miscarriage. Based on the facts, it is
alreadythefifthdeliveryofthewoman.

he/she is entrusted with the custody


ofthechildren;
e. Nullity or annulment of marriage as
decreed by a court or by a church as
long as he/she is entrusted with the
custodyofthechildren;
f. Abandonment of spouse for at least 1
yr;
3. Unmarried mother/father who has
preferred to keep and rear his or her
child/childreninsteadof:
a.havingotherscareforthemor
b.givethemuptoawelfareinstitution;
4.Anyotherpersonwhosolelyprovides:
a.parentalcareand
b.supporttoachildorchildren;
5. Any family member who assumes the
responsibilityofheadoffamilyasaresult
ofthe:
a.death,
b.abandonment,
c.disappearanceor
d. prolonged absence of the parents or
soloparent.

d.ParentalLeave
Q:Whatisparentalleave?

A:Leavebenefitsgrantedtoasoloparenttoenable
him/her to perform parental duties and
responsibilities where physical presence is
required.

In addition to leave privileges under existing laws,


parental leave of not more than 7 working days
every year shall be granted to any solo parent Ee
whohasrenderedserviceofatleast1year.(Sec.8)

Q: What are the conditions for entitlement of


parentalleave?

A:
1.Heorshemustfallamongthosereferredtoas
soloparent
2. Must have the actual and physical custody of
thechildorchildren
3. Must have at least rendered service of one
yeartohisorheremployer
4.Heorshemustremainasoloparent

Q: Who are those referred to as solo parent


entitledtoparentalleave?

A: Any individual who falls under any of the ff.


categories:

1.Awomanwhogivesbirthasaresultofrape
and other crimes against chastity even
withoutafinalconvictionoftheoffender,
provided, That the mother keeps and
raisesthechild;
2. Parent left solo or alone with the
responsibilityofparenthooddueto:
a.Deathofspouse;
b. Detention or service of sentence of
spouseforacriminalconvictionforat
least1yr;
c. Physical and/or mental incapacity of
spouse
d.Legalseparationordefactoseparation
fromspouseforatleast1yraslongas

Note: A change in the status or circumstance of the


parent claiming benefits under this Act, such that
he/sheisnolongerleftalonewiththeresponsibilityof
parenthood,shallterminatehis/hereligibilityforthese
benefits.(Sec.3)

e.Leavesforvictimsofviolenceagainstwomen

Q:Whatistheleaveforvictimsofviolenceagainst
women or otherwise known as battered woman
leave?

A: A female employee who is a victim of violence


(physical, sexual, or psychological) is entitled to a
paid leave of 10 days in addition to other paid
leaves.(R.A.9262,AntiVAWCAct)

6.SERVICECHARGES

a.CoverageandExclusion

Q:Whatareservicecharges(SC)?

A: These are charges collected by hotels,


restaurantsandsimilarestablishmentsandshallbe
distributedattherateof:

COVEREDEes

MANAGEMENT

85%

15%

Equally
distributed

1.
2.

To answer for losses and


breakagesand
Distributed to Ees receiving

45

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
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UST GOLDEN NOTES 2011


amongthem

Provided, that they have worked for at least 1


month, during a calendar year. (Revised
th
Guidelines on the Implementation of the 13
MonthPayLaw)

XPN:
1. GovernmentEes
2. Householdhelpers
3. Eespaidpurelyoncommissionbasis
4. Eesalreadyreceiving13thmonthpay

more than P2000 a month at


the
discretion
of
the
management.

Q:WhoarecoveredEes?

A: GR: All Ees are covered, regardless of their


position, designation, employment status,
irrespectiveofthemethodbywhichtheirwagesare
paid.

Note: Applies only to hotels, restaurants and similar


establishmentcollectingservicecharges.

XPN:ManagerialEes.(Sec.2,RuleVI,BookIII,IRR)

b.Distribution
Q:Whenistheshareofemployeedistributedand
paidtothem?
A: Not less than once every 2 weeks or twice a
monthatintervalsnotexceeding16days.
c.Integration
Q: What happens if the Service Charge is
abolished?
A:TheshareofthecoveredEesshallbeconsidered
integrated in their wages on the basis of the
average monthly share of eachEes for thepast 12
monthsimmediatelyprecedingtheabolition.
Note:Servicechargesformpartoftheawardinillegal
dismissalcases.

7.13thMONTHPAYANDOTHERBONUSES

a.Coverage,Exclusion/exemptionsfromcoverage

Q:Whatis13thmonthpayoritsequivalent?

A: Additional income based on wage required by


P.D. 851 Requiring all Employers to pay their
Employeesa13thmonthpaywhichisequivalentto
1/12 of the total basic salary earned by an
employee(Ee)withinacalendaryear.

Q: What would be your advice to your client, a


manufacturing company, who asks for your legal
opinion on whether or not the 13th Month Pay
LawcoversacasualEewhoispaidadailywage?
A: I will advise the manufacturing company to pay
thecasualEe13thMonthPayifsuchcasualEehas
workedforatleast1monthduringacalendaryear.
The law on the 13th Month Pay provides that Ees
areentitledtothebenefitofsaidlawregardlessof
theirdesignationoremploymentstatus.
The SC ruled in Jackson BuildingCondominium
Corp. v. NLRC, G.R. No. 112546, March 13, 1996,
interpretingP.D.851,asfollows:Eesareentitledto
the 13th month pay benefits regardless of their
designation and irrespective of the method by
whichtheirwagesarepaid.(1998BarQuestion)
Note:AnEr,maygivetohisEesoftherequired13th
Monthpaybeforetheopeningoftheregularschoolyr.
andtheotherhalfonorbeforetheDec.24.

Q:Is13thMonthPaylegallydemandable?
A: Yes. It is a statutory obligation, granted to
covered Ees, hence, demandable as a matter of
right.(Sec1,P.D.851)
b.Natureof13thMonthPay
Q: In what form is the 13th month pay paid or
given?
A:Itisgivenintheformof:
1.
2.
3.
4.

Q:WhoarecoveredbyP.D.851?
A:GR: All rankandfile Ees regardless of the
amount of basic salary that they receive in a
month,iftheiremployers(Er)arenototherwise
exemptedfrompayingthe13thmonthpay.Such
th
Ees are entitled to the 13 month pay
regardless of said designation of employment
status,andirrespectiveofthemethodbywhich
theirwagesarepaid.

46

ChristmasBonus
MidyearBonus
ProfitSharingScheme
Other Cash bonuses amounting to not
lessthan1/12ofitsbasicsalary

Note:Itmustalwaysbeintheformofalegaltender.

Q:Whatarenotpropersubstitutesfor13thMonth
pay?
A:
1.

Freerice

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
2.
3.
4.

Electricity
Cashandstockdividends
COLA(Sec.3)

Q: Concepcion Textile Co. included the OT pay,


nightshift differential pay, and the like in the
computation of its Ees 13thmonth pay.
Subsequently, with the promulgation of the
decision of the SC in the case of SMC vs. Inciong
(103SCRA139)holdingthattheseothermonetary
claimsshouldnotbeincludedinthecomputation
of the 13th month pay, Concepcion Textile Co.
sought to recover under the principle of solutio
indebiti the overpayment of the Ees 13thmonth
pay, by debiting against future 13thmonth
payments whatever excess amounts it had
previouslymade.

2.

3.

4.

(1)IstheCompany'sactiontenable?
(2) With respect to the payment of the 13th
month pay after the SMC ruling, what
arrangement, if any, must the Company make in
order to exclude from the 13thmonth pay all
earnings and remunerations other than the basic
pay?

5.

A: The Company's action is not tenable. The


principle of solutio indebiti which is a civil law
conceptisnotapplicableinlaborlaw.(DavaoFruits
Corp. vs. NLRC, et al., G.R. No. 85073 August 24,
1993). After the 1981 SMC ruling, the High Court
decided the case of Philippine Duplicators Inc. vs.
NLRC, GR 110068, Nov. 11, 1993. Accordingly,
management may undertake to exclude sick leave,
vacation leave, maternity leave, premium pay for
regular holiday, night differential pay and cost of
living allowance. Sales commissions, however,
should be included based on the settled rule as
earlier enunciated in Songco vs. NLRC, G.R. No. L
50999,March23,1990.(1994BarQuestion)

6.

7.

Q: Are all Ers required to pay 13th Month Pay


underP.D.851?
A:
GR:Yes.ItappliestoallErs,

XPN:
1. DistressedErs:
a. Currentlyincurringsubstantiallosses
or
b. In the case of nonprofit institutions
and organizations, where their
income, whether from donations,
contributions, grants and other
earnings from any source, has
consistently declined by more than
40% of their normal income for the

last2years,subjecttotheprovision
ofSec.7ofP.D.851;

The Government and any of its political


subdivisions, including GOCCs, except
those corporations operating essentially
as private subsidiaries of the
Government;
ErsalreadypayingtheirEes13monthpay
or more in a calendar year of its
equivalentatthetimeofthisissuance:

Itsequivalentshallinclude:
a. Christmasbonus
b. Midyearbonus
c. Profitsharing payments
and
d. Other
cash
bonuses
amountingtonotlessthan
1/12th of the basic salary
but

Itshallnotinclude:
a. cashandstockdividends,
b. COLA
c. all
other
allowances
regularly enjoyed by the
Ee, as well as non
monetarybenefits.

Ers of household helpers and persons in


thepersonalserviceofanotherinrelation
tosuchworkers;and

Ers of those who are paid on purely


commission, boundary, or taskbasis, and
those who are paid a fixed amount for
performingaspecificwork,irrespectiveof
the time consumed in the performance
thereof, except where the workers are
paidonpieceratebasisinwhichcasethe
employer shall be covered by this
issuance insofar as such workers are
concerned.(Sec3,P.D.851)

Q:WhataretheoptionsofcoveredErs?
A:
1.

2.

Pay onehalf of the 13thmonth pay


required before the opening of the
regularschoolyearandtheotherhalfon
or before the 24th day of December of
everyyear.
In any establishment where a union has
been recognized or certified as the
collective bargaining agent of the Ee, the
periodicity or frequency of payment of
the13thmonthpaymaybethesubjectof
agreement.

47

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
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UST GOLDEN NOTES 2011


Manggagawa sa Honda, G.R. No. 145561, June
15,2005)

Q:Howareclaimsadjudicated?
A:Nonpaymentofthe13thmonthpayprovidedby
P.D. 851 and the rules of NLRC shall be treated as
moneyclaimscases.
Q: Are the following Ees entitled to 13th month
pay?
a.
b.
c.
d.

A:
1.

Eeswhoarepaidbyresults
EeswithmultipleErs
Privateschoolteachers
ResignedorseparatedEes

Eepaidbyresultsentitledto13thmonth
pay.

Note: Ees paid a fixed or guaranteed wage


plus commission are also entitled to the
mandated 13th month pay, based on their
total earnings during the calendar year, i.e.
onboththeirfixedorguaranteedwageand
commission

2.

3.

4.

ThosewithMultipleErsGovernmentEes
workingparttimeinaprivateenterprise,
including private educational institutions,
as well as Ees working in 2 or more
private firms, whether full or part time
th
basis, are entitled to the required 13
month pay from all their private Ers
regardless of their total earnings from
eachoralltheirErs.

Private School Teachers, including faculty


members of universities and colleges
entitled regardless of the number of
months they teach or are paid within a
year, if they have rendered service for at
least1monthwithinayear.

ResignedorSeparatedEesIfresignedor
separated from work before the time of
th
payment of 13 month pay, entitled to
monetary benefit in proportion to the
length of time he started working during
the calendar year up to the time of
resignation or termination of service.
th
(Prorated13 monthpay)

th
Q:Whendoesprorationof13 MonthPayapply?

A: GR: Proration of this benefit applies only in


cases of resignation or separation from work;
computation should be based on length of
service and not on the actual wage earned by
the worker (Honda Phils. v. Samahan ng

48

XPN: Ees who are paid a guaranteed minimum


wageorcommissionsearnedareentitledto13th
month pay based on total earnings. (Philippine
Agricultural Commercial and Industrial Workers
Unionv.NLRC,G.R.No.107994,Aug.14,1995)

th
Q:Is14 MonthPaylegallydemandable?

th
A: No. The granting of 14 month pay is a
management prerogative and is not legally
demandable.Itisbasicallyabonusandisgratuitous
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
75289,Aug.31,1989)
c.Commissionsvisvis13thmonthpay
Q: What is commission in relation to 13th month
pay?
A:
1.

2.

The salesmans commissions, comprising


a predetermined percent of the selling
priceofthegoodssoldbyeachsalesman,
were properly included in the term basic
salary for purposes of computing their
13thmonthpay.

The so called commission paid to or


received by medical representatives of
BoieTakedaChemicalsorbytherankand
file Ees of Phil. Fuji Xerox were excluded
fromthetermbasicsalarybecausethese
were paid as productivity bonuses. Such
bonuses closely resemble profit sharing,
payments and have no clear, direct,
necessaryrelationtotheamountofwork
actually done by each individual
employee.
d.CBAvisvis13thmonthpay

Q:WhatisCBAinrelationto13thmonthpay?

A:TheabsenceofanexpressprovisionintheCBA
obligating the employer to pay the members of a
union thirteenth month pay is immaterial.
Notwithstanding therefore the absence of any
contractualagreement,thepaymentofathirteenth
monthpaybeingastatutorygrant,compliancewith
the same is mandatory and is deemed incorporate
intheCBA.

8.WOMENWORKERS

a.Discrimination(Art.135.LC);ProhibitedActs(Art.
137.LC)

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
Q:WhataretheunlawfulactsagainstwomenEe?
A:
1.

2.

Discrimination with respect to the terms


and conditions of employment solely on
accountofsex
a. Paymentoflessercompensationtoa
female Ee as against a male Ee for
workofequalvalue
b. Favoring a male Ee with respect to
promotion, training opportunities,
study and scholarship grants on
accountofgender.(Art.135)
c. Favoring a male applicant with
respect to hiring where the
particularjobcanequallybehandled
byawoman
d. FavoringamaleEeoverafemaleEe
with respect to dismissal of
personnel.
Stipulating, whether as a condition for
employment
or
continuation
of
employment:
a. That a woman Ee shall not get
married,or
b. Thatuponmarriage,suchwomanEe
shall be deemed resigned or
separated.(Art.136)
Note: A woman worker may not be
dismissed on the ground of dishonesty for
havingwrittensingleonthespaceforcivil
status on the application sheet, contrary to
the fact that she was married. (PT&T Co. v.
NLRC,G.R.No.118978,May23,1997)

3.

4.
5.

6.

7.

Dismissing, discriminating or otherwise


prejudice a woman Ee by reason of her
beingmarried.(Art.136)
DenyinganywomanEebenefitsprovided
bylaw.(Art.137)
Discharge any woman for the purpose of
preventing her from enjoying any of the
benefitsprovidedbylaw.(Art.137)
Discharging such woman on account of
her pregnancy, or while on leave or in
confinement due to her pregnancy. (Art.
137)
Discharging or refusing the admission of
such woman upon returning to her work
for fear that she may again be pregnant.
(Art.137)

Note: Discrimination in any form from pre


employment to post employment, including hiring,
promotion or assignment, based on the actual,
perceived or suspected HIV status of an individual is
unlawful. (Philippine AIDS Prevention and Control Act
of1998,[R.A.8504])

Under Sec. 2 of R.A. 9710 or the Magna Carta of


Women, the State condemns discrimination against
womeninallitsformsandpursuesbyallappropriate
means and without delay the policy of eliminating
discrimination against women in keeping with the
Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW) and other
international instruments consistent with Philippine
law. The State shall accord women the rights,
protection, and opportunities available to every
memberofsociety.

The State shall take steps to review and, when


necessary,amendand/orrepealexistinglawsthatare
discriminatory to women within three (3) years from
theeffectivityofthisAct.(Sec.12,R.A.9710)

Q: Can an individual, the sole proprietor of a


business enterprise, be said to have violated the
AntiSexual Harassment Act of 1995 if he clearly
discriminates against women in the adoption of
policy standards for employment and promotions
intheenterprise?Explain.

A: When an employer (Er) discriminates against


women in the adoption of policy standards for
employmentandpromotioninhisenterprise,heis
not guilty of sexual harassment. Instead, the Er is
guiltyofdiscriminationagainstwomenEeswhichis
declaredtobeunlawfulbytheLC.

For an Er to commit sexual harassment, he as a


personofauthority,influenceormoralascendancy
should have demanded, requested or otherwise
required a sexual favor from his Ee whether the
demand, request or requirement for submission is
accepted by the object of said act. (2003 Bar
Question)

Q: At any given time, approximately 90% of the


production workforce of a semiconductor
company are females. 75%of the female workers
are married and of childbearing years. It is
imperativethattheCompanymustoperatewitha
minimum number of absences to meet strict
delivery schedules. In view of the very high
numberoflostworkinghoursduetoabsencesfor
familyreasonsandmaternityleaves,thecompany
adopted a policy that it will employ married
women as production workers only if they are at
least 35 yrs of age. Is the policy violative of any
law?
A: Yes, it is violative of Art. 140 of the LC which
provides that no employer shall discriminate
against any person in respect to terms and
conditions of employment on account of his age.
(1998BarQuestion)
b.StipulationAgainstMarriage(Art.136,LC)

49

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


Q:Whatisthenospouseemploymentpolicy?
A:GR:
1. Policy banning spouses from working in
thesamecompany.
2. MaynotfaciallyviolateArt.136oftheLC
but it creates a disproportionate effect
and the only way it could pass judicial
scrutinyisbyshowingthatitisreasonable
despite the discriminatory albeit
disproportionateeffect.

XPN: Bona fide occupational qualification rule


(BFOQ)

Q:WhatistheBFOQrule?
A:TheremustbeafindingofanyBFOQtojustifyan
Ers no spouse rule. There must be a compelling
business necessity for which no alternative exist
otherthanthediscriminatingpractice.

Glaxo does not impose an absolute prohibition


against relationships between its Ees and those of
competitor companies. Its Ees are free to cultivate
relationships with and marry persons of their own
choosing.Whatthecompanymerelyseekstoavoid
is a conflict of interest between the Ee and the
company that may arise out of such relationships.
Furthermore, the prohibition forms part of the
employment contract and Tecson was aware of
such restrictions when he entered into a
relationship with Bettsy. (Duncan Asso. of
DetailmanPTGWO v. Glaxo Wellcome Phil. Inc.,
G.R.No.162994,Sep.17,2004)

c.ClassificationofCertainWomenWorkers(Art.
138,LC)
Q:WhoarecoveredunderthisTitle?
A: Any women who is permitted or suffered to
work:

To justify a BFOQ the employer must prove two


factors:
1.

2.

That the employment qualification is


reasonably related to the essential
operationofthejobinvolved;and
That there is a factual basis for believing
that all or substantially all persons
meeting the qualification would be
unable to properly perform the duties of
the job. (Star Paper v. Simbol, G.R. No.
164774,April12,2006)

Q:WhatistheimportanceoftheBFOQRule?

A:
1. To ensure that the Ee can effectively
performhiswork
2. Sothatthenospouserulewillnotimpose
anydangertobusiness.

Q: Tecson was employed by Glaxo as medical


representativewhohasapolicyagainstEeshaving
relationships against competitors Ees. Tecson
married Bettsy, a Branch coordinator of Astra,
Glaxos competitor. Tecson was transferred to
anotherarea.Tecsondidnotacceptsuchtransfer.

IsthepolicyofGlaxovalidandreasonablesoasto
constitute the act of Tecson as willful
disobedience?

A: The prohibition against personal or marital


relationships with Ees of competitors companies
upon Glaxos Ees is reasonable under the
circumstances because relationships of that nature
might compromise the interest of the company.

50

1.
2.

3.
4.

Withorwithoutcompensation
In any night club, cocktail lounge,
massage clinic, bar or similar
establishment
Undertheeffectivecontrolorsupervision
oftheErforasubstantialperiodoftime
Shall be considered as an Ee of such
establishment for purposes of labor and
sociallegislation.

d.AntiSexualHarrasmentAct
RA7877

Q: What is the policy of the State in enacting the


AntiSexualHarassmentlaw?

A:TheStateshall:

1. Valuethedignityofeveryindividual
2. Enhance the development of it human
resources
3. Guarantee full respect for human rights
and
4. Uphold the dignity of workers, Ee,
applicants for employment, students or
those undergoing training, instruction or
education.(Sec.2)

Q:Whomaybeheldliableforsexualharassment?

A: In a work, education or trainingrelated


environmentsexualharassmentmaybecommitted
byan:

1. Ee
2. Manager
3. Supervisor

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
4.
5.
6.
7.

Agentofthe(Er)
Teacher,instructor,professor
Coach,trainer,or
Any other person who, having authority,
influence or moral ascendancy over
anotherinaworkortrainingoreducation
environment:
a. Demands
b. Requestsor
c. Requires
any sexual favor from the other,
regardless of whether the demand,
request or requirement for
submissionisacceptedbytheobject
ofR.A.7877.(Sec.3)

Q:Howissexualharassmentcommitted?

A:Generally,apersonliabledemands,requests,or
otherwiserequiresanysexualfavorfromtheother,
regardless of whether the demand, request or
requirement for submission is accepted by the
latter.
Q: Under the Sexual Harassment Act, does the
definition of sexual harassment require a
categoricaldemandorrequestforsexualfavor?
A: No. It is true that the provision calls for a
demand, request or requirement of a sexual
favor. But it is not necessary that the demand,
request or requirement of a sexual favor be
articulated in a categorical manner. It may be
discerned, with equal certitude, from the acts of
theoffender.
Likewise, it is not essential that the demand,
requestorrequirementbemadeasaconditionfor
continued employment or for promotion to a
higher position. It is enough that the respondents
acts result in creating an intimidating, hostile or
offensiveenvironmentfortheemployee.(Domingo
v.Rayala,G.R.No.155831,Feb.18,2008)
Q:Whenissexualharassmentcommitted?
A:Specifically:

1. In a workrelated or employment
environment:
a. The sexual favor is made as a
condition in the hiring or in the
employment, reemployment or
continued employment of said
individual, or in granting said
individual favorable compensation,
terms, conditions, promotions, or
privileges;ortherefusaltograntthe
sexual favor results in limiting,

segregating or classifying the Ee


which in a way would discriminate,
deprive or diminish employment
opportunitiesorotherwiseadversely
affectsaidEe;
b. TheaboveactswouldimpairtheEes
rights or privileges under existing
laborlaws;or
c. The above acts would result in an
intimidating, hostile, or offensive
environmentfortheEe.

2. Inaneducationortrainingenvironment:
a. Against one who is under the care,
custody or supervision of the
offender;
b. Against one whose education,
training, apprenticeship or tutorship
isentrustedtotheoffender;
c. 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,orconsiderations;or
d. Sexual advances result in an
intimidating, hostile or offensive
environmentforthestudent,trainee
orapprentice.

Q:WhatarethedutiesoftheErorheadofoffice
in a workrelated, education or training
environment?
A:
1.
2.

Prevent or deter the commission of acts


ofsexualharassmentand
Providetheproceduresfortheresolution,
settlement or prosecution of acts of
sexualharassment.

Towardsthisend,theErorheadofofficeshall:

1. Promulgate appropriate rules and


regulationsinconsultationwiththejointly
approved by the Ees or students or
trainees, through their duly designated
representatives,
prescribing
the
procedure for the investigation or sexual
harassment cases and the administrative
sanctionstherefore.(Sec.4)

Note:Administrativesanctionsshallnotbe
abartoprosecutioninthepropercourtsfor
unlawfulactsofsexualharassment.
The said rules and regulations issued shall
include,amongothers,guidelinesonproper
decorum in the workplace and educational
ortraininginstitutions.

51

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

2.

3.

Create a committee on decorum and


investigation of cases on sexual
harassment.
The Er or head of office, education or
training institution shall disseminate or
post a copy of this R.A. 7877 for the
informationofallconcerned

Q: What is the liability of the Er, head of office,


educationalortraininginstitution?

A: Ee shall be solidarily liable for damages arising


from the acts of sexual harassment committed in
the employment, education or training
environmentprovided:

1.
The Er or head of office, educational or
training institution is informed of such
actsbytheoffendedparty;and
2.
No immediate action is taken thereon.
(Sec.5)

Q: Can an independent action for damages be


filed?

A: Yes.NothingunderR.A.7877shallprecludethe
victimofwork,educationortrainingrelatedsexual
harassment from instituting a separate and
independent action for damages and other
affirmativerelief.(Sec.6)

Q: What is the threefold liability rule in sexual


harassmentcases?

A:Anactofsexualharassmentmaygiverisetocivil,
criminal and administrative liability on the part of
theoffender,eachproceedingindependentlyofthe
others.

Q:Whendoestheactionprescribe?

A:Anyactionshallprescribein3years.

Q: A Personnel Manager, while interviewing an


attractive female applicant for employment,
stareddirectlyatherforprolongedperiods,albeit
in a friendly manner. After the interview, the
manager accompanied the applicant to the door,
shook her hand and patted her on the shoulder.
He also asked the applicant if he could invite her
for dinner and dancing at some future time. Did
thePersonnelManager,bytheaboveacts,commit
sexualharassment?Reason.
A: Yes, because the Personnel Manager, is in a
position to grant or not to grant a favor (a job) to
theapplicant.Underthecircumstances,invitingthe
applicant for dinner or dancing creates a situation

52

hostileorunfriendlytotheapplicant'schancesfora
job if she turns down the invitation. [Sec. 3(a)(3),
R.A. No. 7877, AntiSexual Harassment Act]. (2000
BarQuestion)
Q: In the course of an interview, another female
applicant inquired from the same Personnel
Manager if she had the physical attributes
required for the position she applied for. The
Personnel Manager replied: "You will be more
attractive if you will wear micromini dresses
without the undergarments that ladies normally
wear." Did the Personnel Manager, by the above
reply, commit an act of sexual harassment?
Reason.
A:Yes.Theremarkswouldresultinanoffensiveor
hostile environment for the Ee. Moreover, the
remarks did not give due regard to the applicants
feelingsanditisachauvinisticdisdainofherhonor,
justifying the finding of sexual harassment
(Villaramav.NLRC,G.R.No.106341,Sep.2,1994)
Q:PedritoMasculado,acollegegraduatefromthe
province,triedhisluckinthecityandlandedajob
asutility/maintenancemanatthewarehouseofa
bigshoppingmall.AfterworkingasacasualEefor
6 months, he signed a contract for probationary
employment for 6 months. Being wellbuilt and
physically attractive, his supervisor, Mr. Hercules
Barak,tookspecialinteresttobefriendhim.When
his probationary period was about to expire, he
was surprised when one afternoon after working
hours, Mr. Barak followed him to the mens
comfort room. After seeing that no one else was
around, Mr. Barak placed his arm over Pedritos
shoulderandsoftlysaid:Youhavegreatpotential
tobecomearegularEeandIthinkIcangiveyoua
favorablerecommendation.Canyoucomeoverto
my condo unit on Saturday evening so we can
have a little drink? Im alone, and Im sure you
want to stay longer with the company. Is Mr.
Barakliableforsexualharassmentcommittedina
workrelatedoremploymentenvironment?
A: Yes, the elements of sexual harassment are all
present. The act of Mr. Barak was committed in a
workplace. Mr. Barak, as supervisor of Pedrito
Masculado, has authority, influence and moral
ascendancyoverMasculado.

Given the specific circumstances mentioned in the


questionlikeMr.BarakfollowingMasculadotothe
comfort room, etc. Mr. Barak was requesting a
sexual favor from Masculado for a favorable
recommendation
regarding
the
latter's
employment.Itisnotimpossibleforamale,whois
a homosexual, to ask for a sexual favor from
anothermale.(2000BarQuestion)

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
9.MINORWORKERS

a.Regulationofworkinghoursofachild,
Employmentofthechildinpublicentertainment,
Prohibitionofemployingminorsincertain
undertakingsandincertainadvertisements
Q:Whatarethegeneralprohibitions?
A:GR:
1.

2.

No person under 18 years of age will be


allowedtobeemployedinanundertaking
which is hazardous or deleterious in
nature.
No Er shall discriminate against any
personinrespecttotermsandconditions
ofemploymentonaccountofhisage.

XPN:
A. Below15yrs.Old
1. The child works directly under the
sole responsibility of his parents, or
guardians who employ members of
his family, subject to the following
conditions:
a. Employmentdoesnotendanger
the childs safety, health and
morals
b. Employment does not impair
thechildsnormaldevt
c. Erparent or legal guardian
provides the child with the
primary and/or secondary
education prescribed by the
Dept.ofEducation
2. The childs employment or
participationinpublicentertainment
or information through cinema,
theater, radio or television is
essentialprovided:
a. Employment
contract
is
concludedbythechildsparents
orlegalguardian,
b. With the express agreement of
thechildconcerned,ifpossible,
and
c. The approval of DOLE, the
following must be complied
with:
i. The employment does not
involve advertisement or
commercials
promoting
alcoholic
beverages,
intoxicating drinks, tobacco
and its byproducts or
exhibitingviolence
ii. there is a written contract
approvedbyDOLE

the conditions provided in


thefirstinstancearemet.
Above 15 but below 18 may be
employedinanynonhazardouswork
Above18noprohibition
iii.

B.

C.

Q:WhatisthedutyoftheErbeforeengagingchild
intowork?

A:TheErshallfirstsecureaworkpermitfromthe
DOLE which shall ensure observance of the
requirements.(Sec.12,R.A.7160)
Q:Whatistheruleregardingtheissuanceofwork
certificates/ permits for children at least 15 but
below18yearsofage?

A:TheissuanceofaDOLECertificatetoyouthaged
15tobelow18yearsofageisnotrequiredbylaw.
No employer shall deny opportunity to any such
youthapplyingforemploymentmerelyonthebasis
oflackofworkpermitorcertificateofeligibilityfor
employment. Any young person aged 15 to below
18 years of age may present copy of this DOLE
advisorytoanyemployer,jobprovider,government
authority, or his/her representative when seeking
employmentoranytimeduringemployment.(DOLE
DepartmentAdvisoryNo.0108)

Q:Whatisanonhazardouswork?
A: It is any work or activity in which the Ee is not
exposedtoanyriskwhichconstitutesanimminent
dangertohissafetyandhealth.
Q:Whatarehazardousworkplaces?
A:
1. Nature of work exposes the workers to
dangerous
environmental
elements,
contaminantsorworkconditions
2. Workers are engaged in construction work,
logging, firefighting, mining, quarrying,
blasting, stevedoring, dock work, deepsea
fishing,andmechanizedfarming
3.Workersareengagedinthemanufactureor
handling of explosives and other pyrotechnic
products
4. Workers use or are exposed to heavy or
powerdriventools

Q: You were asked by a paint manufacturing


companyregardingthepossibleemploymentasa
mixer of a person, aged 17, who shall be directly
under the care of the section supervisor. What
advicewouldyougive?Explainbriefly.
A: I will advise the paint manufacturing company
thatitcannothireapersonwhoisaged17.Art139

53

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


(c)oftheLCprovidesthatapersonbelow18yrsof
ageshallnotbeallowedtoworkinanundertaking
which is hazardous or deleterious in nature as
determined by the SLE. Paint manufacturing has
been classified by the SLE as a hazardous work.
(2002BarQuestion)
Q: What are the prohibitions on the employment
ofchildrenincertainadvertisements?
A: No employment of child models in all
commercialadvertisementspromoting:
1.
2.
3.
4.

Violence
Alcoholicbeverages
Intoxicatingdrinks
Tobaccoanditsbyproducts

Q: A spinster school teacher took pity on one of


her pupils, a robust and precocious 12year old
boywhosepoorfamilycouldbarelyaffordthecost
ofhisschooling.Shelivesaloneatherhousenear
the school after her housemaid left. In the
afternoon, she lets the boy do various chores as
cleaning, fetching water and all kinds of errands
after school hours. She gives him rice and P30.00
beforetheboygoeshomeat7:00everynight.The
school principal learned about it and charged her
with violating the law which prohibits the
employmentofchildrenbelow15yearsofage.In
her defense, the teacher stated that the work
performedby her pupil isnothazardous, andshe
invokedtheexceptionprovidedintheDepartment
Order of DOLE for the engagement of persons in
domestic and household service. Is her defense
tenable?Reason?
A:No,herdefenseisnottenable.UnderArt.139of
the LC on minimum employable age, no child
below 15 years of age shall be employed except
when he works directly under the sole
responsibility of his parents or guardian, the
provisions of the alleged DO of DOLE to the
contrary notwithstanding. A mere DO cannot
prevail over the express prohibitory provisions of
theLC.(2004BarQuestion)
Q: Determine whether the following minors
should be prohibited from being hired and from
performing their respective duties indicated
hereunder:
1. A 17year old boy working as miner at the
WalwadiMiningCorporation.
A: Yes, he should be prohibited from being hired
andfromperformingthedutiesofaminerbecause
suchconstituteshazardousworkunderD.O.No.04
Seriesof1999.Art.139(c)ofLCexpresslyprohibits

54

the employment of persons below 18 years of age


inanundertakingwhichishazardousordeleterious
innatureasdeterminedbytheSLE.

2. An 11year old boy who is an accomplished


singer and performer in different parts of the
country.

A:No,heshouldnotbeprohibitedfrombeinghired
andfromperformingasasinger.UnderArt.VIIISec.
12par.2ofR.A.7619asamendedbyR.A.7658,this
constitutesanexceptiontothegeneralprohibition
againsttheemploymentofchildrenbelow15years
of age, provided that the following requirements
arestrictlycompliedwith:

1. TheErshallensuretheprotection,health
safetyandmoralsofthechild
2. TheErshallinstitutemeasurestoprevent
the childs exploitation or discrimination
taking into account the system and level
of remuneration, and the duration and
arrangementofworkingtime;and
3. The Er shall formulate and implement,
subjecttotheapprovalandsupervisionof
competent authorities, a continuing
program for training and skill acquisition
ofthechild.Moreover,thechildmustbe
directly under the sole responsibility of
his parents or guardian and his
employment should not in any way
interferewithhisschooling.

3. A 15year old girl working as a library assistant


inagirls'highschool.
A: No, she should not be prohibited from working
asalibraryassistantbecausetheprohibitioninthe
LC against employment of persons below 18 years
of age merely pertains to employment in an
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issuedby the
SLE working as a library assistant is not one of
undertakingsidentifiedtobehazardousunderD.O.
No04Seriesof1999.
4.A16yearoldgirlworkingasmodelpromoting
alcoholicbeverages.
A:Yes,sheshouldbeprohibitedfromworkingasa
model promoting alcoholic beverages. R.A. 7610
categorically prohibits the employment of child
models in all commercials or advertisements
promoting alcoholic beverages and intoxicating
drinks,amongotherthings.

5. A 17year old boy working as a dealer in a


casino.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
A: Yes, he should be prohibited from working as a
dealer in casino, because Art. 140 of the LC
prohibits the employment of persons below 18
years of age in an undertaking which is hazardous
ordeleteriousinnatureidentifiedintheguidelines
issuedbytheSLE.Workingasadealerinacasinois
classifiedashazardousunderD.O.No.04Seriesof
1999 as it exposes children to physical,
psychologicalorsexualabuses.(2006BarQuestion)

b.ActAgainstChildLabor(RA9231)andChildAbuse
Law(RA7610)

Q:Whatischildlabor?

A: Any work or economic activity performed by a


child that subjects him or her to any form of
exploitation or is harmful to his or her health and
safety or physical, mental or psychosocial
development.

Q:Whoisaworkingchild?

A:Anychildengagedasfollows:

1. Whenthechildisbelow18yearsofagein
a work or economic activity that is not
childlabor;or
2. Whenthechildisbelow15yearsofage:
a. In work where he/she is directly
under the responsibility of his/her
parents or legal guardianand where
only members of the childs family
areemployed;or
b. In public entertainment or
information

Q:WhenmaytheStateinterveneinbehalfofthe
child?

A:
1. The parent, guardian, teacher or person
havingcareorcustodyofthechildfailsor
is unable to protect the child against
abuse,exploitationanddiscrimination;or
2. When such acts are committed against
the child by the said parent, guardian,
teacher or person having care and
custodyoverthechild

Q:Whatisthelimitationonthehoursofworkofa
workingchild?

A:Ifthechildis:

1. Below15yearsofagenotmorethan20
hoursaweekandnotmorethan4hours
aday

Not allowed to work between 8:00


pm6:00am

At least 15 years of age but below 18


years of age will not exceed 8 hours a
dayor40hoursaweek
Notallowedtoworkbetween10:00
pm6:00am
-

2.

Q:Whataretheworstformsoflabor?
A:
1.

2.

3.

4.

5.

All forms of slavery (AntiTrafficking of


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;
The use, procuring, offering or exposing
of a child pornography or for
pornographicperformances;
The use, procuring, offering or exposing
of a child for illegal or illicit activities,
includingtheproductionandtraffickingof
dangerous drugs and volatile substances
prohibitedunderexistinglaws;
Employingchildmodelsinallcommercials
or advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco
anditsbyproductsandviolence;and
Work which, by its nature or
circumstancesinwhichitiscarriedout,is
hazardous or likely to be harmful to the
health,safetyormoralsofchildren.

Q: Who can file a complaint for unlawful acts


committedagainstchildren?

A:
1. Offendedparty
2. Parentsorguardians
3. Ascendants or collateral relatives within
rd
the3 degreeofconsanguinity
4. Officer,socialworkerorrepresentativeof
alicensedchildcaringinstitution
5. OfficerorsocialworkerofDSWD
6. Barangay chairman of the place where
the violation occurred, where the child is
residingoremployed
7. Atleast3concerned,responsiblecitizens
wheretheviolationoccurred

Q: Which courts have jurisdiction over offenses


punishableunderR.A.9231?

A:TheFamilyCourtsshallhaveoriginaljurisdiction
over all cases involving offenses punishable under
thisAct

55

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

5.

10.EMPLOYMENTOFHOUSEHELPERS

a.Definition
Q:Whatisdomesticorhouseholdservice?
A:
1. ServicesintheErshome
2. Usuallynecessaryordesirable
3. For the maintenance and employment
thereof
4. Includes ministering to the personal
comfortandconvenienceofthemembers
oftheErshousehold
5. Includingservicesoffamilydrivers.

Q:Whoisahousehelper?
A: A househelper is synonymous to domestic
servant
1.Anyperson,maleorfemale;
2.WhorendersservicesinandabouttheErs
homeand;
3. ServicesareusuallynecessaryorDesirable
for the maintenance and enjoyment
thereof,and
4. Ministers exclusively to the personal
comfortandenjoymentofErsfamily

Note:Thechildrenandrelativesofahousehelperwho
live under the Ers roof and who share the
accommodationsprovidedforthehousehelperbythe
Ershallnotbedeemedashousehelpersiftheyarenot
otherwise engaged as such and are not required to
perform any substantial household work. (Sec 3, Rule
XII,BookIII,IRR)
Thedefinitionofahousehelpercannotbeinterpreted
to include househelp or laundry women working in
staffhouses of a company. (APEX Mining CO., Inc., v.
NLRC,G.R.No.94951,April22,1991)

b.Benefitsaccordedhousehelpers
Q:Whataretherightsofhousehelpers?
A:
1.

2.

3.

4.

56

Originalcontractofdomesticserviceshall
notlastformorethan2yearsbutitmay
berenewedbytheparties.(Art.142)
Entitled to minimum wage in addition to
lodging, food, and medical attendance.
(Art.144)
Employmentcontractshouldbereviewed
every 3 years with the end view of
improving the terms and conditions of
employment.(Art.143)
SSS benefits for those who are receiving
atleastP1,000permonth.(Art.143)

Nonassignment to a work in a
commercial, industrial or agricultural
enterprise at a wage or salary rate lower
thanthatprovidedforagriculturalornon
agriculturalworkers.(Art.145)
6. Ees under 18 years of age shall be given
opportunity for at least elementary
education.Thecostofeducationshallbe
part of the HHs compensation, unless
otherwisestipulated.(Art146)
7. Should be treated in a just and humane
manner.(Art.147)
8. Not to be treated with physical violence
(Art.147)
9. Suitable and sanitary living headquarters
as well as adequate food and medical
attendance.(Art.148)
10. Terminationofemploymentshouldbe
a. upon expiration of term of
employment,or
b. basedonjustcause(Art.149)
11. Indemnity for unjust termination of
service
12. Employmentcertificationastonatureand
duration of service and efficiency and
conductofhousehelper.

Q:Whatistheminimumwageforhousehelpers?

A:
1.MetoManilaP800/month
2. Other Chartered Cities or First Class
MunicipalitiesP650/month
3.InotherMunicipalitiesP550/month

Note: The minimum cash wage rates shall be paid to


the househelpers in addition to lodging, food and
medicalattendance.

Q:IsthereanOTPayforhousehelpers?
A: No. The LC is silent on the grant of OT pay, HP,
Premium Pay and SIL to those engaged in the
domesticorhouseholdservice.MoreoverArt.82of
LC expressly excludes domestic helpers from its
coverage. (Ultra Villa Food Haus v. Geniston, G.R.
No.120473,June23,1999)
Q: Erlinda worked as a cook, preparing the lunch
and merienda of the Ees of Remington Industrial
Sales Corp. She worked at the premises of the
company. When Erlinda filed an illegal dismissal
case,Mr.Tan,themanagingdirectorofRemington
Corp.claimedthatErlindawasadomestichelper,
andnotaregularEeofRemingtonCorp.Mr.Tan
argued that it is only when the househelper or
domestic servant is assigned to certain aspects of
the business of the Er that such househelper or

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
d.ReliefsforUnjustTermination

domestic servant may be considered as such an


employee.IsErlindaadomesticorhousehelper?
A: No, Erlinda is clearly not a househelper. A
househelper or domestic servant under the
Implementing Rules of the LC is one who is
employed in the Ers home to minister exclusively
to the personalcomfort and enjoyment of the Ers
family. A househelper, domestic servant or
laundrywoman in a home or in a company
staffhouse is different in the sense that in a
corporation or a single proprietorship engaged in
business or industry or any agricultural or similar
pursuit,serviceisbeingrenderedinthestaffhouses
orwithinthepremisesofthebusinessoftheEr.In
suchinstance,theyareEesofthecompanyorErin
thebusinessconcerned,entitledtotheprivilegesof
aregularEe.Themerefactthatthehousehelperor
domesticservantisworkingwithinthepremisesof
thebusinessoftheemployerandinrelationtoorin
connection with its business, as in its staffhouses
for its guest or even for its officers and Ees,
warrants the conclusion that such househelper or
domestic servant is and should be considered a
regular Ee and not a househelper. (Remington
Industrial v. Castaneda, G.R. Nos. 16929596,
Nov.20,2006)

Q:NBChasaresthouseandrecreationalfacilityin
thehighlandsofTagaytayCityfortheuseofitstop
executives and corporate clients. The resthouse
staff includes a caretaker, two cooks and a
laundrywoman. All of them are reported to the
SSSasdomesticorhouseholdEesoftheresthouse
and recreational facility and not of NBC. Can NBC
legally consider the caretaker, cooks and
laundrywoman as domestic Ees of the resthouse
andnotofNBC?

A: No, they are not domestic Ees. They are NBCs


Ees because the resthouseandrecreational facility
arebusinessfacilitiesastheyareforuseofthetop
executives and clients of NBC. (Traders Royal Bank
v.NLRC,G.R.No.127864,Dec.22.1999).(2000Bar
Question)
c.Termination

Q: What is the proper procedure in the


terminationofahousehelper?

Q:Whataretherulesforindemnity?

A:
1. If the period for household service is
fixed, neither the Er nor the househelper
may terminate the contract before the
expiration of the term except for just
cause.
2.Ifthehousehelperisunjustlydismissed,he
or she shall be paid the compensation
already earned plus that for the 15 days
bywayofindemnity.
3. If the househelper leaves without
justifiable reason, he or she shall forfeit
any unpaid salary due him or her not
exceeding15days.

Q: When can the HH demand for employment


certification?

A: Upon the severance of the household service


relationship, the househelper may demand from
the Er a written statement of the nature and
duration of the service and his/ her efficiency and
conductashousehelper.

11.EMPLOYMENTOFHOMEWORKERS

a.Defintion
Q:Whoarehomeworkers?
A:Theyarethosewhoperforminorabouthisown
home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an Er and sold
thereaftertothelatter.
Q:WhoistheErofHomeworker?
A:Includesanyperson,naturalorartificialwho,for
his account or benefit, or on behalf of any person
residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor
oranyotherperson:
1.

A: The termination of the employment of a


househelpershouldbe:
a.
b.

Upon expiration of the term of


employment,or
Basedonjustcause(Art.149)

2.

Delivers or causes to be delivered, any


goods, articles or materials to be
processed or fabricated in or about a
homeandthereaftertobereturnedorto
be disposed of or distributed in
accordancewithhisdirections.
Sellsanygoods,articlesormaterialstobe
processedorfabricatedinorabutahome
and then rebuys them after such
processing or fabrication, either by
himselforthroughsomeotherperson.

57

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


4.

b.Rightsandbenefitsaccordedhomeworkers
Q:WhatisthedutyoftheErincasehecontracts
withanothertheperformanceofhiswork?

The deduction is made at such rate that


the amount deducted does not exceed
20%oftheHWsearningsinaweek.

Q:Distinguishhousehelpersfromhomeworkers.

A: It shall be the duty of the Er to provide in such


contractthattheEesorHWsofthecontractorand
the latters subcontractor shall be paid in
accordancewiththeLC.
Q:WhatistheliabiltyoftheErifthecontractoror
subcontractorfailstopaythewagesorearningsof
hisEes?
A: Er shall be jointly and severally liable with the
contractor or subcontractor to the workers of the
latter to the extent that such work is performed
under such contract, in the same manner as if the
EesorHWsweredirectlyengagedbytheEr.
Q:CanHomeworkersformlabororganizations?
A:Yes.DONo.5,replacingRuleXIVoftheIRRBook
3 of the LC, authorizes the formation and
registrationoflabororganizationofindustrialHWs.
ItalsomakesexplicittheErsdutytopayandremit
SSS,PhilhealthandECCpremiums.
Q:Whataretheprohibitionsagainsthomework?
A:Nohomeworkshallbeperformedon:
1.
2.
3.

Explosives,fireworksandsimilararticles;
Drugsandpoisons;and
Other articles, the processing of which
requires exposure to toxic substances.
(Sec.13,RuleXIV,BookIII,IRR)

c.Conditionsfordeductionfromhomeworkers
earnings

Q: Can the Er make deductions on homeworkers


earnings?

A: GR: No Er, contractor or subcontractor shall


make any deduction from the HWs earnings
forthevalueofmaterialswhichhavebeenlost,
destroyed,soiledorotherwisedamage.

XPN:Unlesstheff.conditionsaremet:
1. TheHWisclearlyshowntoberesponsible
forthelossordamage
2. TheEeisgivenreasonableopportunityto
showcausewhydeductionsshouldnotbe
made;
3. Theamountofsuchdeductionisfairand
reasonable and shall not exceed the
actuallossordamages;and

58

A:
HOUSEHELPERS

Minister to the personal


needsandcomfortofhis
Erinthelattershome

HOMEWORKERS
Performs in or about his
ownhomeanyprocessing
or fabrication of goods or
materials, in whole or in
part, which have been
furnished directly or
indirectly, by an Er and
sold thereafter to the
latter.

Q: Josie is the confidential secretary of the


Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
where the Chairman of the Board can still have
accesstoherservices,thebankallowshertowork
inherresidenceduringherleave.Forthispurpose,
thebankinstalledafaxmachineinherresidence,
and gave her a cellphone and a beeper. Is Josie a
homeworkerunderthelaw?Explain.
A:No,sheisactuallyanofficeworker.Sheisnotan
industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
which work, when finished, will be returned to or
repurchasedbysaidcontractor.(Art.155,LC)(2000
BarQuestion)
12.APPRENTICESANDLEARNERS

a.Apprentices

Q:Whoisanapprentice?
A: Any worker who is covered by a written
apprenticeship agreement with an individual
employer or any of the entities recognized under
theLC.
Q:Whatisapprenticeship?
A: It is practical training on the job supplemented
byrelatedtheoreticalinstruction.
Q:Whatisanapprenticeableoccupation?
A: That which requires more than 3 months of
practicaltrainingwiththeoreticalinstruction
Q:Whatisonthejobtraining(OJT)?
A: It is practical work experience through actual
participation in productive activities given to or
acquiredbyanapprentice.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
Q:Whatarehighlytechnicalindustries?

Q:Whatistheemploymentstatusofapprentices?

A: Those which are engaged in the application of


advancedtechnology.

Q:Whatarerelatedtheoreticalinstructions?

A: Technical information based on apprenticeship


standardsapprovedbytheBureau.

A: They are contractual workers whose length of


service depends on the term provided for in the
apprenticeship agreement. Thus, the employer is
not obliged to employ the apprentice after the
completionofhistraining.

Note:PriorapprovalbyTESDA(formerlyDOLE)ofthe
proposed apprenticeship program is a condition sine
quanon.Otherwise,apprenticebecomesaregularEe.
(Nitto Enterprises v. NLRC, G.R. No. 114337, Sep. 29,
1995).

A:Mustnotexceed6months:

Q:Whatarethequalificationsofanapprentice?

Q:Whatistheperiodofapprenticeship?

1.

2.

A:
1.

Atleast15yearsofage
Note:Thosebelow18yearsofageshallnot
workinhazardousoccupations

2.
3.
4.

5.

Physicallyfitfortheoccupation
Possessvocationalaptitudeandcapacity
Possess:
a. Theabilitytocomprehend,and
b. Followoralandwritteninstructions
The
company
must
have
an
apprenticeshipprogramdulyapprovedby
theDOLE.

Note: Trade and industry associations may


recommend to the SLE appropriate educational
requirementsfordifferentoccupations.

Q:Whenisanoccupationdeemedhazardous?

Q: What is the status of an apprentice hired after


suchterm?

A:HeisdeemedaregularEe.Hecannotbehiredasa
probationary Ee since the apprenticeship is deemed
theprobationaryperiod.
Q:Whatisthewagerateofanapprentice?
A: Start at not less than 75% of the statutory
minimum wage for the 1st 6 months (except OJT);
thereafter, shall be paid in full minimum wage,
includingthefullCOLA.
Note: GR: Apprenticeship programs shall be primarily
voluntary

A:
1.

2.

3.

4.

Nature of work exposes worker to


dangerous environmental elemental
contaminantsorworkconditions

Workers are engaged in construction


work, logging, firefighting, mining,
quarrying,blasting,stevedoring,deepsea
fishing,andmechanizedfarming
Workersareengagedinthemanufacture
or handling of explosives and other
pyrotechnicproducts
Workers use, or are exposed to heavy or
powerdrivenmachineryorequipment.

Q:Whomayemployapprentices?

A:
1. Only employers in highly technical
industriesand
2. Only in apprenticeable occupations
approvedbySLE

2months/400hours:Tradesoroccupations
whichnormally require 1 yearormorefor
proficiency
1 month/200 hours: Occupations and jobs
whichrequiremorethan3monthsbutless
than1yearforproficiency.(Sec.19,RuleVI,
BookII,IRR)

XPN:Compulsoryapprenticeship:
1. National security or economic
developmentsodemand,thePresident
mayrequirecompulsorytraining
2. Services of foreign technicians are
utilized by private companies in
apprenticeabletrades.

Q: What are the rules regarding apprenticeship


agreements?
A: Apprenticeship agreements, including the wage
ratesofapprentices,shall:
1.
2.
3.

ConformtotherulesissuedbySLE.
The period of apprenticeship shall not
exceed6months.
Apprenticeship agreements providing for
wage rates below the legal minimum
wage, which in no case shall start below
75%oftheapplicablemin.wage,maybe
entered into only in accordance with

59

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011

4.

apprenticeship programs duly approved


bytheSLE.
The DOLE shall develop standard model
programsofapprenticeship.(Sec.18,Rule
VI,BookII,IRR)

Q:Whosignstheapprenticeshipagreement?

A: Every apprenticeship agreement shall be signed


by:
1.
2.

Theemployerorhisagent,or
An authorized representative of any of
therecognizedorganizations,associations
orgroups,and
Theapprentice.

3.

Q:Whowillsigniftheapprenticeisaminor?

A:Anapprenticeshipagreementwithaminorshall
besignedinhisbehalfby:
1.
2.

His parent or guardian, or if the latter is


notavailable,
An authorized representative of the
DOLE.

Q: May apprentices
compensation?

A:Required:

be

hired

without

1.
2.
3.
4.

Byschool
Bythetrainingprogramcurriculum
ForGraduation
Forboardexaminations

Q:Whataretherulesonworkingscholars?
A:ThereisnoErEerelationshipbetweenstudents
on one hand, and schools, where there is written
agreement between them under which the former
agree to work for the latter in exchange for the
privilegetostudyfreeofcharge.Thestudentisnot
consideredanEe.(Sec.14,RuleIX,BookIII,IRR)
Q: Padilla entered into a written agreement with
Gomburza College to work for the latter in
exchange for the privilege of studying in said
institution.Hisworkwasconfinedtokeepingclean
the lavatory facilities of the school. One school
day, he got into a fist fight with a classmate,
Monteverde, as a result of which the latter
sustained a fractured arm. Victor filed a civil case
for damages against him, impleading Gomburza
Collegeduetothelatter'sallegedliabilityashisEr.
Underthecircumstances,couldGomburzaCollege
beheldliablebyVictorMonteverdeasanPadillas
Er?

60

A: Gomburza College is not liable for the acts of


Padilla because there is no ErEe relationship
between them. As provided in the Rules and
RegulationsImplementingtheLC"thereisnoErEe
relationship between students on one hand, and
schools, colleges, or universities on the other,
wherestudentsworkwiththelatterinexchangefor
the privilege to study free of charge, provided the
students aregiven real opportunity, including such
facilities as may be reasonable and necessary to
finish their chosen courses under such
arrangement."(1997BarQuestion)
Q: Who may terminate an apprenticeship
agreement?
A:
1.

2.

Eitherpartymayterminateanagreement
aftertheprobationaryperiodbutonlyfor
avalidcause.
It may be initiated by either party upon
filing a complaint or upon DOLEs own
initiative.

Q:Whomayappealthedecisionoftheauthorized
agencyoftheDOLE?
A: It may be appealed by any aggrieved person to
theSLEwithin5daysfromreceiptofthedecision.
Note: The decision of the SLE shall be final and
executory.

Q:WhatisExhaustionofAdministrativeRemedies
(EAR)?
A: It is a condition precedent to the institution of
action.(Sec.32b,RuleVI,BookII,IRR)
Q: How is the principle of Exhaustion of
AdministrativeRemediesappliedincaseofbreach
ofapprenticeshipagreement?
A: No person shall institute any action for the
enforcement of any apprenticeship agreement or
damagesforbreachofanysuchagreement,unless
he has exhausted all available administrative
remedies.
Q: Who shall settle differences arising out of
apprenticeshipagreement?
A: The plant apprenticeship committee shall have
the initial responsibility for settling differences
arisingoutofapprenticeshipagreement.(Sec.32b,
RuleVI,BookII,IRR)
Q: What is the procedure for the termination of
apprenticeship?

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
A:Thepartyterminatingshall:
1.
2.
3.

Serve a written notice on the other at


least5daysbeforeactualtermination,
Statingthereasonforsuchdecision;and
A copy of said notice shall be furnished
theApprenticeshipDivisionconcerned.

b.Learners

Q:Whoarelearners?

A:
1. They are persons hired as trainees in
semiskilled and other industrial
occupations
2. Whicharenonapprenticeableand
3. Which may be learned through practical
training on the job in a relatively short
periodoftime
4. Whichshallnotexceed3months
5. Whether or not such practical training is
supplementedbytheoreticalinstructions.
(Sec.1a,RuleVII,BookII,IRR)

Q:Whenmaylearnersbeemployed?
A:
1.
2.
3.

Whennoexperiencedworkerisavailable
It is necessary to prevent curtailment of
employmentopportunities;and
Employment does not create unfair
competition in terms of labor costs or
impairorlowerworkingstandards.

A: Only employers in semiskilled and other


industrial occupations which are non
apprenticeable.
Q: What is the status of learners who have been
allowed or suffered work during the first 2
months, if training is terminated by the Er before
the end of the stipulated period through no fault
ofthelearner?
A: They are deemed regular employees. (Sec. 4,
RuleVII,BookII,IRR)
c.DistinctionsbetweenLearnershipand
Apprenticeship

Q:DistinguishLearnershipfromApprenticeship.
A:
Learnership
Trainingonthejobinsemi
skilledandotherindustrial
occupationortradeswhich
arenonapprenticeable
andwhichmaybelearned
thrupracticaltrainingon
thejobinarelativelyshort
periodoftime.

3.

4.

Min:3months
Max:6months
Commitmenttoemploy
Withcommitmentto
employthelearnerasa
Nocommitmenttohire
regularEeifhedesires
uponcompletionof
learnership
Incaseofpreterminationofcontract
ConsideredaregularEeif
preterminationoccurs
Workernotconsidered
after2monthsoftraining
asregularemployee.
andthedismissalis
withoutfaultofthe
learner.
Coverage
Highlytechnical
Semiskilled/Industrial
industriesandonlyin
occupations
industrialoccupation
Thereisalistoflearnable
Nolist
tradesbyTESDA
Writtenagreement
RequireLearnership
RequiresApprenticeship
Agreement
Agreement
Max:3months

Thenamesandaddressesofthelearners;
The duration of the learnership period,
whichshallnotexceed3months;
The wages or salary rates of the learners
whichshallbeginatnotlessthan75%of
theapplicableminimumwage;and
A commitment to employ the learners if
theysodesire,asregularemployeesupon
completionofthelearnership.

Q:Whatisthequalificationofalearner?

A:Mustbeatleast15yearsofage.
Note: Those below 18 years of age shall not work in
hazardousoccupations.

Q:Whomayemploylearners?

Trainingintradeswhich
areapprenticeable,that
is,practicaltrainingon
thejobsupplemented
byrelatedtheoretical
instructionformore
than3months.

Durationoftraining

Q:Whatisalearnershipagreement?

A: Any employer desiring to employ learners shall


enter into a learnership agreement with them,
whichagreementshallinclude:
1.
2.

Apprenticeship
Nature

61

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UST GOLDEN NOTES 2011

13.HANDICAPPEDWORKERS(RA9277)
13.
a.Definition

disability he can still efficiently perform his work, he


cannot be classified as handicapped; he would be
consideredaqualifieddisabledworkerentitledtothe
sametreatmentasqualifiedablebodiedworkers.

Q:Whoarehandicappedworkers(HW)?
A:Thosewhoseearningcapacityisimpairedby:
1.
2.
3.
4.
5.
6.

Physicaldeficiency
Age
Injury
Disease
Mentaldeficiency
Illness

Q:Whatisthedurationoftheemploymentperiod
ofhandicappedworkers?

A: There is no minimum or maximum duration. It


depends on the agreement butit is necessary that
thereisaspecificdurationstated.

b.Rightsofdisabledworkers
Q: What are the rights and privileges of disabled
workers?
A:
1.
2.

3.
4.

5.

Equalopportunityforemployment
Sheltered employment (the govt shall
endeavourtoprovidethemworkifsuitable
employment for disabled persons cannot
befoundthroughopenemployment)
Apprenticeship
Vocationalrehabilitation(meanstodevelop
theskillsandpotentialsofdisabledworkers
and enable them to compete in the labor
market)
Vocationalguidanceandcounselling

Q: May handicapped workers be hired as


apprenticesorlearners?

c.Prohibitionsondiscriminationagainstdisabled
persons

A:Yes,iftheirhandicapisnotsuchastoeffectively
impede the performance of job operations in the
particular occupations for which they are hired.
(Art.81)

Q: What is the prohibition on discrimination


againstdisabledworkers?

Q: Can a handicapped workers acquire the status


ofaregularEe?
A:Yes,ifworkisusuallyornecessarilyordesirable
to the business. (Bernardo v. NLRC, G.R No.
122917,July12,1999)

A: No disable person shall be denied access to


opportunities for suitable employment. A qualified
disabled employee shall be subject to the same
termsandconditionsofemploymentandthesame
compensation, privileges, benefits, fringe benefits,
incentives or allowances as aqualified able bodied
person.

A: Employers in all industries. Provided, the


handicap is not such as to effectively impede the
performance of job operations in the particular
occupationsforwhichtheyarehired

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.

Q:Whencanhandicappedworkersbeemployed?

d.Incentivesforemployers

Q:Whomayemployhandicappedworkers?

A:
1.

2.

When their employment is necessary to


prevent curtailment of employment
opportunitiesand
Whenitwillnotcreateunfaircompetition
inlaborcostsorlowerworkingstandards.
(Art.79)

Q:Doesthemerefactthataworkerhasadisability,
makehimahandicappedworker?
A: No, because his disability may not impair his
efficiency or the quality of his work. If despite his

62

Q: What are the incentives provided for employers


inemployingdisabledworkers?
A:1.Entitledtoanadditionaldeduction,fromtheir
gross income, equivalent to twentyfive percent
(25%) of the total amount paid as salaries and
wagestodisabledpersons:Provided,however,That
such entities present proof as certified by the
Department of Labor and Employment that
disabledpersonsareundertheiremploy:Provided,
further, That the disabled employee is accredited
withtheDepartmentofLaborandEmploymentand

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

LABOR STANDARDS
the Department of Health as to his disability, skills
andqualifications
2. 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
taxableincome,equivalenttofiftypercent(50%)of
the direct costs of the improvements or
modifications
Q:Distinguishhandicappedfromdisabled?
A:

Handicapped

Disabled
(DifferentlyAbled)

Earningcapacityis
impairedbyage,or
physicalormental
deficiencyorinjury.

Referstoallsufferingfrom
restrictionofdifferentabilities
asaresultofmental,physical
orsensoryimpairmentto
performanactivityinthe
mannerorwithinrange
considerednormalfora
humanbeing.

Coversonlyworkers.

Coversallactivitiesor
endeavors.

Basis:loss/impairment
ofearningcapacity.

Basis:rangeofactivitywhich
isnormalforahuman
being.

Lossduetoinjuryor
physicalormental
defectorage.

Restrictionduetoimpairment
ofmental/physical/sensory
defect.

Ifhired,entitledto75%
ofminimumwage.

Subjecttodefinite
periodsof
employment.

Ifqualified,entitledtoall
termsandconditionsas
qualifiedablebodiedperson.

Employableonlywhen
necessarytoprevent
curtailmentof
employment
opportunity.

Norestrictionson
employment.

Mustgetequalopportunity
andnounfaircompetition.

63

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VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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UST GOLDEN NOTES 2011


D.TERMINATIONOFEMPLOYMENT

1.EMPLOYEREMPLOYEERELATIONSHIP

Q: What determines the existence of an


employmentrelationship?
A: It is determined by law and not by contract.
Whether or not an ErEe relationship exists
between the parties is a question of fact. In this
regard, the findings of the NLRC are accorded not
onlyrespectbutfinalityifsupportedbyevidence.
Note: Taxi or jeepney drivers under the boundary
system are Ees of the taxi or jeepney
owners/operators; so also the passenger bus drivers
and conductors. (Jardin vs. NLRC and Goodman Taxi,
G.R.No.119268,Feb.23,2000)

Q:Theemploymentcontractstipulatesthatthere
is no ErEe relationship between the parties. Is
thatvalid?
A: No. The existence of an ErEe relation is a
questionoflawandbeingsuch,itcannotbemade
the subject of agreement. (Tabas v. California
ManufacturingCo.,G.R.No.L80680,Jan.26,1989)
Q: Banco de Manila and the Ang Husay Janitorial
and Pest Control Agency entered into an
IndependentContractorAgreementwiththeusual
stipulations: specifically, the absence of ErEe
relationship, and the relief from liability clauses.
Can the bank, as a client, and the agency, as an
independent contractor, stipulate that no ErEe
relationship exists between the bank and the Ees
oftheAgencywhomaybeassignedtoworkinthe
Bank?Reason.
A:Yes,theycanstipulateprovidedtherelationship
isjobcontracting.Howeverthestipulationcannot
prevailoverthefactsandthelaws.Theexistenceof
ErEe relationship is determined by facts and law
and not by stipulation of the parties. (Insular Life
AssuranceCo..Ltd.v.NLRC,G.R.No.119930,March
12,1998)
Q:ASIAexecuteda1yearcontractwiththeBaron
Hotel(BARON)fortheformertoprovidethelatter
with 20 security guards to safeguard the persons
andbelongingsofhotelguests,amongothers.The
security guards filled up Baron application form
and submitted the executed forms directly to the
SecurityDepartmentofBaron.Thepayslipsofthe
security guards bore BARON's logo and showed
that Baron deducted therefrom the amounts for
SSS premiums, medicare contributions and
withholdingtaxes.Assignmentsofsecurityguards,
who should be on duty or on call, promotions,

64

suspensions, dismissals and award citations for


meritorious services were all done upon approval
by BARON's chief security officer. After the
expiration of the contract with ASIA, BARON did
notrenewthesameandinsteadexecutedanother
contractforsecurityserviceswithanotheragency.
ASIA placed the affected security guards on
"floating status" on "no work no pay" basis.
Having been displaced from work, the ASIA
securityguardsfiledacaseagainsttheBARONfor
illegal dismissal, overtime pay, minimum wage
differentials, vacation leave and sick leave
benefits, and 13th month pay. BARON denied
liability alleging that ASIA is the employer of the
securityguards and therefore, their complaint for
illegal dismissal and payment of money claims
should be directed against ASIA. Nevertheless,
BARONfiledaThirdPartyComplaintagainstASIA.

IsthereanErEerelationshipbetweentheBARON,
ononehand,andtheASIAsecurityguards,onthe
otherhand?Explainbriefly.

A:Asageneralrule,thesecurityguardsofaprivate
security guard agency are the employees of the
latterandnotoftheestablishmentthathasentered
into a contract with the private security guard
agency for security services. But under the facts in
thequestion,BaronHotelappeartohavehiredthe
security guards, to have paid their wages, to have
the power to promote, suspend or dismiss the
security guards and the power of control over
them, namely, the security guards were under
ordersofBaronHotelasregardtheiremployment.
Because of the abovementioned circumstances,
BaronHotelistheErofthesecurityguards.

Q:AssumingthatASIAistheEr,istheactofASIA
in placing the security guards on "floating status"
lawful?Why?

A:Itislawfulforaprivatesecurityguardagencyto
place its security guard on a "floating status" if it
has no assignment to give to said security guards.
But if thesecurity guardsare placed on a "floating
status"formorethan6months,thesecurityguards
mayconsiderthemselvesashavingbeendismissed.
(1999BarQuestion)

Q:Lacsonwasoneofmorethan100Eeswhowere
terminated from employment due to the closure
ofLBMConstructionCorporation.LBMwasasister
company of Lastimoso Construction, Inc. and RL
Realty & Devt Corp. All 3 entities formed what
came to be known as the Lastimoso Group of
Companies. The 3 corporations were owned and
controlled by members of the Lastimoso family;
their incorporators and directors all belonged to

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
the Lastimoso family. The 3 corporations were
engaged in the same line of business, under one
management, and used the same equipment
including manpower services. Lacson and his co
Ees filed a complaint with the Labor Arbiter
againstLBM,RLRealtyandLastimosoConstruction
to hold them jointly and severally liable for
backwages and separation pay. Lastimoso
Construction, Inc. RL Realty & Development
Corporation interposed a Motion to Dismiss
contending that they are juridical entitles with
distinct and separate personalities from LBM
Construction Corporation and therefore, they
cannot be held jointly and severally liable for the
money claims of workers who are not their Ees.
Rule on the motion to dismiss. Should it be
grantedordenied?Why?

A: It is very clear that even if LBM Construction


company, Lastimoso Construction Company, Inc.
and RL Realty & Devt Corp. all belong to the
Lastimosofamilyandareengagedinthesameline
of business under one management and used the
same equipment including manpower services,
these corporations were separate juridical entities.
Thus, only the LBM Construction Corp. is the Er of
Teofilo Lacson. The other corporation do not have
any ErEe relations with Lacson. The case in
question does not include any fact that would
justify piercing the veil of corporate fiction of the
othercorporationsinordertoprotecttherightsof
workers. In a case (Concept Builders, Inc. v. NLRC,
G.R.No.108734,May29,1996)theSCruledthatit
isafundamentalprincipleofcorporationlawthata
corporation is an entity separate and distinct from
its stockholders and from other corporations to
which it may be connected. But this separate and
distinct personality of a corporation is merely a
fiction created by law for convenience and to
promote justice. So, when the notion of separate
juridical personality is used to defeat public
convenience,justifywrong,protectfraudordefend
crime, or is used as a device to defeat the labor
laws, this separate personality of the corporation
maybe disregarded or the veil of corporate fiction
pierced.(1999BarQuestion)

a.Fourfoldtest

Q:WhatfactorsdeterminetheexistenceofanEr
Eerelationship?

A:Thefourfoldtest:
1.
2.
3.

Selection and engagement of the


employee;
Paymentofwages;
Powerofdismissal;and

4.

Power of control. (The Labor Code with


Comments and Cases 2007, Azucena, Vol
I,p.158)

Q:Whatiscontroltest?

A:Thepersonforwhomtheservicesareperformed
reserves a right to control not only the end to be
achievedbutalsothemeanstobeusedinreaching
suchend.
Note:However,incertaincasesthecontroltestisnot
sufficienttogiveacompletepictureoftherelationship
betweentheparties,owingtothecomplexityofsucha
relationshipwhereseveralpositionshavebeenheldby
theworker.Thebetterapproachistoadoptthetwo
tieredtest.(Franciscovs.NLRC,G.R.No.170087,Aug.
31,2006)

Q: Genesis entered into a Careers Agent


Agreement with EmoLife Insurance Company, a
domestic corporation engaged in insurance
business. In the Agreement, it provides that the
agent is an independent contractor and nothing
therein shall be construed or interpreted as
creating an employer employee relationship. It
furtherprovidesthattheagentmustcomplywith
three requirements: (1) compliance with the
regulationsandrequirementsofthecompany;(2)
maintenance of a level of knowledge of the
company's products that is satisfactory to the
company;and(3)compliancewithaquotaofnew
businesses.However, EmoLifeinsurance company
terminated Genesis services. Genesis filed an
illegaldismissalcomplaintallegingthereinthatan
employeremployeerelationshipexistsandthathe
was illegally dismissed. Is he an employee of the
insurancecompany?
A:GenesisisnotanemployeeofEmoLifeInsurance
Company. Generally, the determinative element is
the control exercised over the one rendereing the
service.TheconceptofcontrolinLaborCodehas
to be compared and distinguished with control
that must necessarily exist in a principalagent
relationship. The employer controls the employee
bothintheresultsandinthemeansandmannerof
achieving this result. The principal in an agency
relationship, e.g. insurance agent, on the other
hand, also has the prerogative to exercise control
over the agent in undertaking the assigned task
based on the parameters outlined in the pertinent
laws. In the present case, the Agreement fully
servesasgrantofauthoritytoGenesisasEmoLifes
insurance agent. This agreement is supplemented
bythecompanysagencypracticesandusages,duly
accepted by the agent in carrying out the agency.
Foremost among these are the directives that the
principal may impose on the agent to achieve the

65

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UST GOLDEN NOTES 2011


assigned tasks, to the extent that they do not
involve the means and manner of undertaking
thesetasks.Thelawlikewiseobligatestheagentto
renderanaccount;inthissense,theprincipal may
imposeontheagentspecificinstructionsonhowan
accountshallbemade,particularlyonthematterof
expenses and reimbursements. To these extents,
control can be imposed through rules and
regulations without intruding into the labor law
concept of control for purposes of employment.
(Gregorio Tongko v. ManuLife Insurance Company,
G.R.No.167622,Jun.29,2010)
b.TwotieredTest
Q:Whatisthetwotieredtest?
A:
1.

2.

TheputativeErspowertocontroltheEe
with respect to the means and methods
bywhichtheworkistobeaccomplished;
and
The underlying economic realities of the
activityorrelationship.

Note: This twotiered test would provide us with a


framework of analysis, which would take into
consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties. This is especially appropriate in
this case where there is no written agreement or
termsofreferencetobasetherelationshiponanddue
to the complexity of the relationship based on the
various positions and responsibilities given to the
worker over the period of the latters employment.
(Franciscovs.NLRC,G.R.No.170087,Aug.31,2006)

Q: What is the proper standard for economic


dependence?
A: The proper standard is whether the worker is
dependent on the alleged employer for his
continuedemploymentinthatlineofbusiness
c.Probationaryemployment
Q:Whatisprobationaryemployment?
A:Employmentwheretheemployee(Ee),uponhis
engagement:
1.
2.

Ismadetoundergoatrialperiod
DuringwhichtheErdetermineshisfitness
toqualifyforregularemployment,
3. Based on reasonable standards made
known to the Ee at the time of
engagement.(Sec6,RuleI,BookVI,IRR)

Note:TheservicesofanEewhohasbeenengaged
on probationary basis may be terminated only for

66

justcause,whenhefailstoqualifyasaregularEein
accordance with reasonable standards prescribed
bytheEr.
Q: Michelle Miclat was employed on a
probationary basis as marketing assistant by
ClarionPrintingHousebutduringheremployment
shewasnotinformedofthestandardsthatwould
qualify her as a regular employee (Ee). 30 days
after, Clarion informed Miclat that her
employment contract had been terminated
withoutanyreason.Miclatwasinformedthather
termination was part of Clarions costcutting
measures.IsMiclatconsideredasaregularEeand
henceentitledtoitsbenefits?

A:Yes.Probationaryemploymentshallbegoverned
by the following rules: (d) In all cases of
probationaryemployment,theErshallmakeknown
totheEethestandardsunderwhichhewillqualify
as a regular Ee at the time of his
engagement.Wherenostandardsaremadeknown
totheEeatthattime,heshallbedeemedaregular
Ee. In the case at bar, she was deemed to have
been hired from day one as a regular Ee. (Clarion
PrintingHouseInc.,vs.NLRC,G.R.No.148372,June
27,2005)

Q: What are the characteristics of probationary


employment?

A:
1. Itisanemploymentforatrialperiod;
2. Itisatemporaryemploymentstatusprior
toregularemployment;
3. It arises through a contract with the
followingelements:
a. The employee (Ee) must learn and
workataparticulartypeofwork
b. Such work calls for certain
qualifications
c. Theprobationisfixed
d. The Er reserves the power to
terminateduringorattheendofthe
trialperiod
e. And if the Ee has learned the job to
the satisfaction of the Er, he
becomesaregularEe.

Q: What is the period of probationary


employment?
A:GR:Itshallnotexceed6months.

XPNs:
1. Covered by an apprenticeship or
learnership agreement stipulating a
differentperiod

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
2.

3.

4.

5.

Voluntary agreement of parties


(especially when the nature of work
requiresalongerperiod)
The Er gives the(Ee a second chance to
pass the standards set. (Mariwasa
Manufacturing, Inc. v. Leogardo, Jr.,G.R.
No.74246,Jan.26,1989)
Whenthesameisrequiredbythenature
ofthework,e.g.theprobationaryperiod
set for professors, instructors and
teachers is 3 consecutive years of
satisfactory service pursuant to DOLE
ManualofRegulationsforPrivateSchools.
When the same is established by
companypolicy.

Note:Periodofprobationshallbereckonedfromthe
datetheEeactuallystartedworking.(Sec.6[b],RuleI,
BookVI,IRR)

Afterthelapseoftheprobationaryperiod(6months),
Eebecomesregular.

ProbationaryEesmaybedismissedbeforeendofthe
probationaryperiod.

Q: May the Er and Ee validly agree to extend the


probationaryperiodbeyond6months?

A: Yes. Such an extension may be lawfully agreed


upon,despitetherestrictivelanguageofArt.281.A
voluntary agreement extending the original
probationaryperiodtogivetheEeasecondchance
topasstheprobationstandardsconstitutesalawful
exception to the statutory limit. (Mariwasa
Manufacturing,Inc.v.Leogardo,Jr.,G.R.No.74246,
Jan.26,1989)
Note:Byvoluntarilyagreeingtosuchanextension,the
Ee waived any benefit attaching to the completion of
the period if he still failed to make the grade during
the period of extension. (Mariwasa Mfg. Inc. v. Hon.
Leogardo,G.R.No.74246,Jan.26,1989)

Q:Isdoubleorsuccessiveprobationallowed?
A: No. The evil sought to be prevented is to
discourage scheming employers from using the
system of double or successive probation to
circumvent the mandate of the law on
regularization and make it easier for them to
dismiss their employees. (Holiday Inn Manila v.
NLRC,G.R.No.109114,Sep.14,2003)
Q: Middleby Phils. Corp. hired Alcira as engg
support services supervisor on a probationary
basis for 6 months. Apparently unhappy with
Alciras performance, Middleby terminated his
services. Alcira contends that he was already a
regular employee (Ee) when he was terminated.

AccordingtoAlcirascomputation,sinceArt.13of
theCivilCodeprovidesthat1monthiscomposed
of 30 days, 6 months totaling 180 days, then his
th
180 daywouldfallonNov.16,96makinghima
regular Ee before his termination. Is the
contentionofthepetitionerinthecomputationof
6monthscorrect?

A: No, the computation of the 6month


probationary period is reckoned from the date of
appointment up to the same calendar date of the
th
6 monthfollowing.Inshort,sincethenumberof
daysineachparticularmonthwasirrelevant,Alcira
was still a probationary Ee when Middleby opted
nottoregularizehimonNov.20,1996.(Alcirav.
NLRC,G.R.No.149859,June9,2004)

Note: In Mitsubishi Motors v. Chrysler Phils. Labor


Union,G.R.No.148738,June29,2004,theSCruledin
thiswise:

Applying Art. 13 of the Civil Code, the probationary


periodof6monthsconsistsofthe180days.Thisisin
conformity with par.1, Art. 13 of the Civil Code. The
number of months in the probationary period, 6,
should then be multiplied by the number of days
withinamonth,30;hence,theperiodof180days.As
clearly provided for the in last par. of Art. 13, in
computingaperiod,thefirstdayshallbeexcludedand
thelastdayincluded.Thus,the180dayscommenced
on May 27, 1996, and ended on Nov. 23, 1996. The
terminationletterdatedNov.25,1996wasservedon
ParasonlyonNov.26,1996.Hewas,bythenalreadya
regularEeofthecompanyunderArt.281oftheLC.

How to resolve the conflict between the Alcira and


MitsubishiMotorscase

1. Statutory Construction The latter case


prevails(MitsubishiMotors);or
2. Rule more favorable to the Ee use the
computation which would amount to
grantingthesubjectEeregularemployment
status (based on Constitutional and
statutory provisions for the liberal
interpretationoflaborlaws)

Q:Whatisthepurposeoftheperiod?
A: To afford the employer an opportunity to
observe the fitness of a probationary employee at
work.
Q: In what instances is a probationary employee
(Ee)deemedaregularEe?
A:
1.

If he is allowed to work after a


probationaryperiod.(Art.281)

67

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UST GOLDEN NOTES 2011


2.

If no standards, under which he will


qualify as a regular Ee, are made known
to him at the time of his engagement.
(Sec.6[d],RuleI,BookVI,IRR)

Q: What are the grounds for terminating


probationaryemployment?
A:
1.
2.

Just/authorizedcauses
WhenhefailstoqualifyasaregularEein
accordance with reasonable standards
made known by the employer (Er) to the
Eeatthetimeofhisengagement(ICMCv.
NLRC,G.R.No.72222,Jan.30,1989)

Note:WhileprobationaryEesdonotenjoypermanent
status, they are afforded the security of tenure
protection of the Constitution. Consequently, they
cannot be removed from their positions unless for
cause. Such constitutional protection, however, ends
upon the expiration of the period stated in their
probationarycontractofemployment.Thereafter,the
parties are free to renew the contract or not. (CSA v.
NLRC,G.R.No.87333,Sep.6,1991)

Q: What are the limitations on the employers


(Ers) power to terminate a probationary
employmentcontract?
A:
1.

2.

3.

4.

The power must be exercised in


accordancewiththespecificreqtsofthe
contract
If a particular time is prescribed, the
terminationmustbewithinsuchtimeand
if formal notice is required, then that
formmustbeused
The Ers dissatisfaction must be real and
in good faith, not feigned so as to
circumventthecontractorthelaw
Theremustbenounlawfuldiscrimination
inthedismissal

Note: The probationary employee is entitled to


proceduraldueprocesspriortodismissalfromservice.

Q:R.L. CruzwasemployedasgardenerbyManila
HotelonprobationstatuseffectiveSep.22,76.
The appointment signed by Cruz provided for a 6
monthprobationaryperiod.OnMar.20,77,ora
day before the expiration of the probationary
period, Cruzs was promoted to lead gardener
position. On the same day Cruz position was
abolished by Manila Hotel allegedly due to
economic reverses or business recession, and to
salvage the enterprise from imminent danger of
collapse.WasCruzillegallydismissed?

68

A: Yes, there is no dispute that as a probationary


employee (Ee), Cruz had but limited tenure.
Althoughonprobationarybasis,however,Cruzstill
enjoys the constitutional protection on security of
tenure.Duringhistenureofemployment,therefore,
or before his contract expires, Cruz cannot be
removedexceptforcauseasprovidedforbylaw.

WhatmakesCruzdismissalhighlysuspiciousisthat
it took place at a time when he needs only but a
day to be eligible as a regular Ee. That he is
competentfindssupportinhisbeingpromotedtoa
lead gardener in so short span of less than 6
months. By terminating his employment or
abolishing his position with but only one day
remaining in his probationary appointment, the
hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
Hotel Corp. v. NLRC, G.R. No. L53453, Jan. 22,
1986)

Q:ColegioSanAgustin(CSA)hiredtheGelaJoseas
a grade school classroom teacher on a
probationary basis for SY 84 85. Her contract
wasrenewedforSYs8586and8687.OnMar.
24, 87, the CSA wrote theGela that "itwouldbe
in the best interest of the students and their
families that she seek employment in another
school or business concern for next school year".
Notwithstandingthesaidnotice,theCSAstillpaid
Gela her salary for April 15 to May 15, 1987. On
April 6, 87, Gela wrote the CSA and sought
reconsideration but she received no reply.
Thereafter, she filed a complaint for illegal
dismissal.WasGelaillegallydismissed?

A: No. The Faculty Manual of CSA underscoresthe


completionof3yearsofcontinuousserviceatCSA
before a probationary teacher acquires tenure.
Hence,theGelacannotclaimanyvestedrighttoa
permanent appointment since she had not yet
achieved the prerequisite 3year period under the
Manual of Regulation for Private Schools and the
FacultyManualofCSA.
In the instant case where the CSA did not wish to
renew the contract of employment for the next
schoolyear,theGelahasnogroundtoprotest.She
was not illegally dismissed. Her contract merely
expired.(CSAv.NLRC,G.RNo.87333,Sep.6,1991)
Q: During their probationary employment, 8 Ees
wereberatedandinsultedbytheirsupervisor.In
protest,theywalkedout.Thesupervisor shouted
at them to go home and nevertoreportbackto
work. Later, the personnel manager required
themtoexplainwhytheyshouldnotbedismissed
from employment for abandonment and failure
toqualifyforthepositionsappliedfor.Theyfiled

LABORLAWTEAM:
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TERMINATION OF EMPLOYMENT
a complaint for illegal dismissal against their Er.
AsaLA,howwillyouresolvethecase?
A: AsaLAIwillresolvethecaseinfavorofthe 8
probationary Ees due to theff::
1.

2.

3.

4.

5.

Probationary Ees also enjoy security of


tenure. (Biboso v. Victoria Milling, G.R.
No. L44360,Mar.31,1977)
InallcasesinvolvingEesonprobationary
status, the Er shall make known to the
Eeatthetimeheishired,the standards
by which he will qualify for the
positionsappliedfor.
The filing of the complaint for illegal
dismissal effectively negates the Ers
theory of abandonment. (Rizada v.
NLRC,G.R. No.96982,Sep.21,1999)
The order togo homeandnottoreturn
to work constitutes dismissal from
employment.
The8probationaryEeswereterminated
without just cause and without due
process

In view of the foregoing, I will order


reinstatement to their former positions without
loss of seniority rights with full backwages, plus
damagesandattysfees.(2006BarQuestion)

d.Kindsofemployment

(1)Regularemployment
Q:Whatisregularemployment?
A:
1. An employment shall be deemed to be
regularwheretheEehasbeenengagedto
perform activities which are usually
necessary or desirable in the usual
businessortradeoftheEr,theprovisions
of written agreements to the contrary
notwithstanding and regardless of the
oralagreementsoftheparties.(Sec.5[a],
RuleI,BookVI,IRR)

2. Any Ee who has rendered at least one


year of service, whether such service is
continuousorbroken,shallbeconsidered
aregularEewithrespecttotheactivityin
which he is employed and his
employment shall continue while such
activity exists. (Sec. 5 [b], Rule I, Book VI,
IRR)

Note:Regularizationisnotamanagementprerogative;
rather,itisthenatureofemploymentthatdetermines
it.Itisamandateofthelaw.(PALv.Pascua,G.R.No.
143258,Aug.15,2003)

Regular employment does not mean permanent


employment.AprobationaryEebecomesaregularEe
after 6 months. A regular Ee may only be terminated
forjust/authorizedcauses.

The practice of entering into employment contracts


which would prevent the workers from becoming
regular should be struck down as contrary to public
policy and morals. (Universal Robina Corp. v.
Catapang,G.R.No.164736,Oct.14,2005)

(a)Reasonableconnectionrule

Q: What is the test to determine regular


employment?
A:
1.

The primary standard of determining


regular employment is the reasonable
connection between the particular
activity performed by the employee (Ee)
to the usual trade or business of the
employer.Thetestiswhethertheformer
is usually necessary or desirable in the
usualbusinessortradeoftheEr.(DeLeon
v.NLRC,G.R.No.70705,Aug.21,1989)

Note:Theconnectioncanbedeterminedby
considering the nature of the work
performedanditsrelationtotheschemeof
the particular business or trade in its
entirety. (Highway Copra Traders v. NLRC,
G.R.No.108889,July30,1998)

2.

Also,theperformanceofajobforatleast
a year is sufficient evidence of the jobs
necessity if not indispensability to the
business. This is the rule even if its
performance is not continuous and
merely intermittent. The employment is
considered regular, but only with respect
to such activity and while such activity
exists. (Universal Robina Corp. v.
Catapang, G.R. No. 164736, Oct. 14,
2005).

Note: The status of regular employment attaches to


thecasualEeonthedayimmediatelyaftertheendof
hisfirstyearofservice.Thelawdoesnotprovidethe
qualificationthattheEemustfirstbeissuedaregular
appointmentormustfirstbeformallydeclaredassuch
before he can acquire a regular status. (Aurora Land
ProjectsCorp.v.NLRC,G.R.No.114733,Jan.2,1997)

Q:Isthemodeofcompensationdeterminativeof
regularemployment?

A:No,whiletheEesmodeofcompensationwason
a per piece basis the status and nature of their
employment was that of regular Ees. (Labor

69

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UST GOLDEN NOTES 2011


CongressofthePhilsv.NLRC,G.R.No.123938,May
21,1998)

Q:WhendoesArt.280notapply?

A:ItdoesnotapplyincaseofOFWs.

Note: Seafarers cannot be considered as regular Ees.


Their employment is governed by the contracts they
sign everytime they are hired and their employment
terminated when the contract expires. Their
employment is fixed for a certain period of time.
(Ravago v. Esso Eastern Maritime Ltd., G.R. No.
158324,Mar.14,2005)

Q: Moises was employed by La Tondea at the


maintenance section of its Engg Dept paid on a
dailybasisthroughpettycashvouchers.Hiswork
consistedmainlyofpaintingcompanybuildingand
equipment and other odd jobs relating to
maintenance.Afteraserviceofmorethan1year,
Moises requested that he be included in the
payroll of regular workers, instead of being paid
throughpettycashvouchers.InsteadLaTondeas
dismissed Moises and claimed that Moises was
contracted on a casual basis specifically to paint
certaincompanybuildingsandthatitscompletion
terminated Moises employment. Can Moises be
consideredasaregularEe?

A: Yes, the law demands that the nature and


entirety of the activities performed by the Ee be
considered. Here, the painting and maintenance
work given Moises manifests a treatment
consistent with a maintenance man and not just a
painter, for if his job was only to paint a building
there would be no basis for giving him other work
assignmentsinbetweenpaintingactivities.

It is not tenable to argue that the painting and


maintenance work of Moises are not necessary in
La Tondeas business of manufacturing liquors;
otherwise, there would be noneedfor the regular
maintenancesectionofthecompanysenggdept.
(DeLeonv.NLRC,G.R.No.70705,Aug.21,1989)

Q: Honorio Dagui was hired by Doa Aurora


Suntay Tanjangco in 1953 to take charge of the
maintenance and repair of the Tanjangco
apartments and residential bldgs. He was to
perform carpentry, plumbing, electrical and
masonry work. Upon the death of Doa Aurora
Tanjangcoin82herdaughter,TeresitaTanjangco
Quazon, took over the administration of all the
Tanjangco properties, and dismissed Dagui. Is
HonorioDaguiaregularemployee(Ee)?

A: Yes. The jobs assigned to Dagui as maintenance


man, carpenter, plumber, electrician and mason

70

were directly related to the business of the


Tanjangcosaslessorsofresidentialandapartment
bldgs. Moreover, such a continuing need for his
servicesbytheTanjangcosissufficientevidenceof
thenecessityandindispensabilityofhisservicesto
theirbusinessortrade.

DaguishouldlikewisebeconsideredaregularEeby
the mere fact that he rendered service for the
Tanjangcos for more than one year, that is,
beginning 53 until 82, under Doa Aurora; and
then from 1982 up to June 8, 91 under the
daughter,foratotalof29and9yearsrespectively.
Owing to Dagui's length of service, he became a
regular Ee, by operation of law, one year after he
was employed in 53 and subsequently in 82.
(Aurora Land Projects Corp. v. NLRC, G.R. No.
114733,Jan.2,1997)

Q: A total of 43 Ees who are deafmutes were


hired and rehired on various periods by Far East
BankandTrustCo.asmoneysortersandcounters
through a uniformly worded agreement called
EmploymentContractforHandicappedWorkers.
The company disclaimed that these Ees were
regular Ees and maintained among others that
theyareaspecialclassofworkers,whowerehired
temporarily under a special employment
arrangement which was a result of overtures
made by some civic and political personalities to
theBank.ShouldthedeafmuteEesbeconsidered
asregularEes?
A: Yes. The renewal of the contracts of the
handicappedworkersandthehiringofothersleads
to the conclusion that their tasks were beneficial
andnecessarytothebank.Italsoshowsthatthey
were qualified to perform the responsibilities of
theirpositions;theirdisabilitydidnotrenderthem
unqualifiedorunfitforthetasksassignedtothem.

The Magna Carta for Disabled Persons mandates


that a qualified disabled Ee should be given the
same terms and conditions of employment as a
qualifiedablebodiedperson.ThefactthattheEes
were qualified disabled persons necessarily
removestheemploymentcontractsfromtheambit
ofArt.80.SincetheMagnaCartaaccordsthemthe
rights of qualified ablebodied persons, they are
thus covered by Art. 280 of the LC. (Bernardo v.
NLRC,G.R.No.122917,July12,1999)

Q: CocaCola Bottlers Phils, Inc., (CCBPI) engaged


the services of the workers as sales route
helpersforaperiodof5months.After5months,
theworkerswereemployedbythecompanyona
daytoday basis. According to the company, the
workerswerehiredtosubstituteforregularroute
helperswheneverthelatterwouldbeunavailable

LABORLAWTEAM:
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TERMINATION OF EMPLOYMENT
or when there would be an unexpected shortage
of manpower in any of its work places or an
unusually high volume of work. The practice was
fortheworkerstowaiteverymorningoutsidethe
gates of the sales office of the company, if thus
hired,theworkerswouldthenbepaidtheirwages
at the end of the day. Should the workers be
consideredasregularemployees(Ees)ofCCBPI?

A:Yes,therepeatedrehiringoftheworkersandthe
continuing need for their services clearly attest to
the necessity or desirability of their services in the
regular conduct of the business or trade of the
company.Thefactthattheworkershaveagreedto
be employed on such basis and to forego the
protection given to them on their security of
tenure,demonstratenothingmorethantheserious
problem of impoverishment of so many of our
peopleandtheresultingunevennessbetweenlabor
and capital. (Magsalin & CocaCola v. N.O.W.M.,
G.R.No.148492,May9,2003)

Q: Metromedia Times Corp. entered, for the fifth


time, into an agreement with Efren Paguio,
appointing him to be an account executive of the
firm. He was to solicit advertisements for The
ManilaTimes,.Thewrittencontractbetweenthe
parties provided that, You are not an Ee of the
Metromedia Times Corp. nor does the company
have any obligations towards anyone you may
employ, nor any responsibility for your operating
expenses or for any liability you may incur. The
only rights and obligations between us are those
setforthinthisagreement.Thisagreementcannot
be amended or modified in any way except with
the duly authorized consent in writing of both
parties. Is Efren Paguio a regular employee of
MetromediaTimesCorporation?

A: Yes, he performed activities which were


necessary and desirable to the business of the Er,
and that the same went on for more than a year.
He was an account executive in soliciting
advertisements,clearlynecessaryanddesirable,for
the survival and continued operation of the
businessofthecorp.

The corporation cannot seek refuge under the


terms of the agreement it has entered into with
EfrenPaguio.Thelaw,indefiningtheircontractual
relationship,doesso,notnecessarilyorexclusively
uponthetermsoftheirwrittenororalcontract,but
alsoonthebasisofthenatureoftheworkofEfren
has been called upon to perform. A stipulation in
an agreement can be ignored as and when it is
utilized to deprive the Ee of his security of tenure.
(Paguiov.NLRC,G.R.No.147816,May9,2003)

(2)ProjectEmployment

Q:Whatisprojectemployment?

A: Employment that has been fixed for a specific


project or undertaking the completion for which
hasbeendeterminedatthetimeofengagementof
the employee (Ee). (Sec.5 [a], Rule I, Book VI, IRR).
The period is not the determining factor, so that
eveniftheperiodismorethan1year,theEedoes
notnecessarilybecomeregular.
Note: Where the employment of a project Ee is
extended long after the supposed project has been
finished, the Ees are removed from the scope of
projectEesandconsideredasregularEes.
Repeated hiring on a projecttoproject basis is
considerednecessaryanddesirabletothebusinessof
theEr.TheEeisregular(Maraguinotv.NLRC,G.R.No.
120969,Jan.22,1998).However,repeatedhiringdoes
not necessarily mean regular employment. (Filipinas
PreFabricated Building Systems (FILSYSTEMS), Inc. v.
Puente,G.R.No.153832,.March18,2005)

(a)Indicatorsofprojectemployment

Q: What are the Indicators of Project


Employment?

A: Either one or more of the following


circumstances,amongothers,maybeconsideredas
indicatorsthatanemployeeisaprojectemployee.
(Hanjinv.Ibaez,G.R.No.170181,June26,2008)

a. The duration of the specific/identified


undertaking for which the worker is
engagedisreasonablydeterminable

b. Such duration, as well as the specific


work/service to be performed, is defined
in an employment agreement and is
madecleartotheemployeeatthetimeof
hiring.

Note: Absent any other proof that the


project employees were informed of their
statusassuch,itwillbepresumedthatthey
areregularemployees.

c.

d.

The work/service performed by the


employee is in connection with the
particular project/undertaking for which
heisengaged

The employee, while not employed and


awaiting engagement, is free to offer his
servicestoanyotheremployer

71

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UST GOLDEN NOTES 2011


e.

Theterminationofhisemploymentinthe
particularproject/undertakingisreported
to the Department of Labor and
Employment Regional Office having
jurisdiction over the workplace within 30
days following the date of his separation
from work, using the prescribed form on
employees
termination/dismissal/suspensions

f.

An undertaking in the employment


contract by the employer to pay
completion bonus to the project
employee as practiced by most
constructioncompanies

Q:Whataretherequisitesindeterminingwhether
anemployee(Ee)isaprojectEe?

A:
1. TheprojectEewasassignedtocarryouta
specificprojectorundertaking,and
2. The duration and scope of which were
specifiedatthetimetheEewasengaged
for that project. (Imbuido v. NLRC, G.R.
No.114734,Mar.31,2000)
3. The Ee must have been dismissed every
aftercompletionofhisprojectorphase
4. Report to the DOLE of Ees dismissal on
account of completion of contract (Policy
Inst.No.20;D.O.19[1997])

Q:Whatisaproject?

A: A "project" has reference to a particular job or


undertaking that may or may not be within the
regular or usual business of the Er. In either case,
the project must be distinct, separate and
identifiable from the main business of the Er, and
its duration must be determined or determinable
(PALv.NLRC,G.R.No.125792,Nov.9,1998).

Q: Can a project employee(Ee) or a member of a


workpoolacquirethestatusofaregularEe?

A:Yes,whenthefollowingconcur:

1. There is a continuous rehiring of project


Eesevenaftercessationofaproject;and
2. The tasks performed by the alleged
project Ee are vital, necessary and
indispensable to the usual business or
tradeoftheemployer(Er).

Note: The length of time during which the Ee was


continuously rehired is not controlling, but merely
serves as a badge of regular employment. Enero and
Maraguinot have been employed for a period of not
lessthan2yearsandhavebeeninvolvedinatleast18

72

projects.Thesefactsarethebasisinconsideringthem
as regular Ees of the company. (Maraguinot v. NLRC,
G.R.No.120969,Jan.22,1998)
Members of a work pool from which a construction
companydrawsitsprojectEes,ifconsideredEesofthe
constructioncompanywhileintheworkpool,arenon
projectEesorEesforanindefiniteperiod.Iftheyare
employedinaparticularproject,thecompletionofthe
projectoranyphasethereofwillnotmeanseverance
of ErEe relationship. Unless the workers in the work
poolarefreetoleaveanytimeandoffertheirservices
to other Ers. (L.T. Datu & Co., Inc. v. NLRC, G.R. No.
113162,Feb.9,1996)

Q:Whatisthedaycertainrule?
A:Itstatesthataprojectemploymentthatendson
a certain date does not end on an exact date but
uponthecompletionoftheproject.
Q:AreprojectEesentitledtoseparationpay?
A: GR: Project Ees are not entitled to separation
pay if they are terminated as a result of the
completionproject.

XPN: If the projects they are working on have


notyetbeencompletedwhentheirservicesare
terminated; project Ees also enjoy security of
tenure during the limited time of their
employment. (De Ocampo v. NLRC, G.R. No.
81077,June6,1990)

Q: Roger Puente was hired by Filsystems, Inc.,


initiallyasaninstallerandeventuallypromotedto
mobile crane operator, and was stationed at the
companys premises. Puente claimed in his
complaint for illegal dismissal, that his work was
continuousandwithoutinterruptionfor10years,
and that he was dismissed from his employment
without any cause. Filsystems on its part averred
that Puente was a project Ee in the companys
variousprojects, and that after thecompletion of
eachproject,hisemploymentwasterminated,and
suchwasreportedtotheDOLE.IsRogerPuentea
regularEe?

A: No, Puente is a project Ee. The contracts of


employment of Puente attest to the fact that he
washiredforspecificprojects.Hisemploymentwas
coterminouswiththecompletionoftheprojectsfor
whichhehadbeenhired.Thosecontractsexpressly
providedthathistenureofemploymentdepended
on the duration of any phase of the project or on
the completion of the construction projects.
Furthermore, the company regularly submitted to
the labor dept reports of the termination of
services of project workers. Such compliance with

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TERMINATION OF EMPLOYMENT
the reportorial reqt confirms that Puente was a
projectEe.

ThemererehiringofPuenteonaprojecttoproject
basisdidnotconferuponhimregularemployment
status.Thepracticewasdictatedbythepractical
consideration that experienced construction
workersaremorepreferred.Itdidnotchangehis
status as a project Ee. (Filipinas PreFabricated
Building Systems (FILSYSTEMS), Inc. v. Puente, G.R.
No.153832,Mar.18,2005)

(3)Seasonalemployment

Q:Whatisseasonalemployment?
A: Employment where the job, work or service to
be performed is seasonal in nature and the
employment is for the duration of the season.
(Sec.5[a],RuleI,BookVI,IRR)
An employment arrangement where an employee
(Ee) is engaged to work during a particular season
onanactivitythatisusuallynecessaryordesirable
intheusualbusinessortradeoftheemployer(Er).
Note:ForseasonalEes,theiremploymentlegallyends
upon completion of the project or the season. The
termination of their employment cannot and should
not constitute an illegal dismissal. (Mercado v. NLRC,
G.R.No.79869,Sept.5,1991)

One year duration on the job is pertinent in deciding


whetheracasualEehasbecomeregularornot,butit
isnotpertinenttoaseasonalorprojectEe.Passageof
time does not make a seasonal worker regular or
permanent.(Mercadov.NLRC,G.R.No.78969,Sep.5,
1991)

During offseason, the relationship of ErEe is not


severed;theseasonalEeismerelyconsideredonLOA
without pay. Seasonal workers who are repeatedly
engaged from season to season performing the same
tasks are deemed to have acquired regular
employment.(HaciendaFatimav.NationalFederation
of Sugarcane WorkersFood and General Trade, G.R.
No.149440,Jan.28,2003)

Q:AreseasonalEesentitledtoseparationpay?

A: When the business establishment is sold which


effectively terminates the employment of the
seasonal Ees, the latter would be entitled to
separationpay.

Q:Canseasonalemployees(Ees)beconsideredas
regularEes?

A: Yes. The fact that seasonal Ees do not work


continuously for one whole year but only for the

duration of the season does not detract from


considering them in regular employment. Seasonal
workers who are called to work from time to time
and are temporarily laid off during offseason are
not separated from service in that period, but
merelyconsideredonleaveuntilreemployed.

IftheEehasbeenperformingthejobforatleasta
year,eveniftheperformanceisnotcontinuousand
merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
that activity to the business. Hence, the
employment is considered regular, but only with
respect to such activity and while such activity
exists. (Benares v. Pancho, G.R. No. 151827, April
29,2005)

Q: Carlito Codilan and Maximo Docena had been


working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria and Reynaldo Tulin
have been working for 22, 15, and 6 years
respectively. The operations of the rice mill
continue to operate and do business throughout
the year even if there are only two or three
harvest seasons within the year. This seasonal
harvesting is the reason why the company
considers the workers as seasonal Ees. Is the
companycorrectinconsideringtheEesasseasonal
Ees?

A:No,thefactisthatbigricemillssuchastheone
ownedbythecompanycontinuetooperateanddo
businessthroughouttheyearevenifthereareonly
twoorthreeharvestseasonswithintheyear.Itisa
common practice among farmers and rice dealers
tostoretheirpalayandtohavethesamemilledas
the need arises. Thus, the milling operations are
not seasonal. Finally, considering the number of
years that they have worked, the lowest being 6
years,theworkershavelongattainedthestatusof
regular Ees as defined under Art. 280. (Tacloban
SagkahanRiceMillv.NLRC,G.R.No.73806,Mar.21,
1990)

(4)Casualemployment
Q:Whatiscasualemployment?
A:
1. It is an employment where the Ee is engaged in
an activity which is not usually necessary or
desirable in the usual business or trade of the Er,
provided: such employment is not project nor
seasonal(Art.281).

Note:Butdespitethedistinctionbetweenregular
and casual employment, every Ee shall be
entitled to the same rights and privileges, and

73

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UST GOLDEN NOTES 2011


shall be subject to the same duties as may be
grantedbylawtoregularEesduringtheperiodof
theiractualemployment.

2.AnEeisengagedtoperformajob,workorservice
whichismerelyincidentaltothebusinessoftheEr,
andsuchjob,workorserviceisforadefiniteperiod
made known to the Ee at the time of engagement
(Sec.5[b],RuleI,BookVI,IRR)

Note:Ifhehasrenderedatleast1yearofservice,
whethersuchserviceiscontinuousorbroken,he
is considered as regular Ee with respect to the
activity in which he is employed and his
employment shall continue while such activity
exists.

ACasualEeisonlycasualfor1year,anditisthe
passage of time that gives him a regular status.
(KASAMMACCOv.CA,G.R.No.159828,April19,
2006)

The purpose is to give meaning to the


constitutionalguaranteeofsecurityoftenureand
righttoselforganization.(Mercadov.NLRC,G.R.
No.79868,Sep.5,1991)

Q: Yakult Phils. is engaged in the manufacture of


cultured milk. The workers were hired to cut
cogon grass and weeds at the back of the factory
building used by Yakult. They were not required
toworkonfixedscheduleandtheyworkedonany
day of the week on their own discretion and
convenience. The services of the workers were
terminated by Yakult on less than 1year after.
MaycasualortemporaryEesbedismissedbythe
Er before the expiration of the 1year period of
employment?
A:Yes,theusualbusinessortradeofYakultPhils.is
the manufacture of cultured milk. The cutting of
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business
oftheYakult.
TheworkersarecasualEes.Nevertheless,theymay
be considered regular Ees if they have rendered
services for at least 1 year. When, as in this case,
theyweredismissedfromtheiremploymentbefore
the expiration of the 1year period they cannot
lawfully claim that their dismissal was illegal.
(Capule, et al. v. NLRC, G.R. No. 90653, Nov. 12,
1990)
Q: How is the project worker different from a
casualorcontractualworker?Brieflyexplainyour
answers.

74

A:
PROJECTWORKER
Used to designate
workers
in
the
construction industry,
hired to perform a
specificundertakingfor
a fixed period, co
terminuswithaproject
or phase thereof
determinedatthetime
of the engagement of
theEe
Tobeconsideredatrue
project worker, it is
required
that
a
termination report be
submitted to the
nearest
public
employment
office
uponthecompletionof
the
construciton
project. (Aurora Land
Projects Corp. v. NLRC,
G.R. No. 114733, Jan.
2,1997)

CASUALor
CONTRACTUAL
WORKER

Generic term used to


designate any worker
covered by a wrtitten
contract to perform a
specificundertakingfor
afixedperiod

There is no such
requirement for an
ordinary contractual
worker

(5)Fixedtermemployment;Requisitesforvalidity
Q:Whatisthenatureoftermemployment?
A: A contract of employment for a definite period
terminates by its own terms at the end of such
period. (Brent School v. Zamora, G.R. No. L48494,
Feb.5,1990)

Q: What is the decisive determinant in term


employment?

A: It is the day certain agreed upon by the parties


for the commencement and the termination of
theiremploymentrelation.

Q:Whatisafixedtermemployment?
A: It is an employment where a fixed period of
employmentwasagreedupon:

1. Knowinglyandvoluntarilybytheparties,
2. Without any force, duress or improper
pressure being brought to bear upon the
employee(Ee)and
3. Absent any other circumstances vitiating
hisconsent,or
4. WhereitsatisfactorilyappearsthattheEr
andEedealtwitheachotheronmoreor
less equal terms with no moral

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
dominance whatever being exercised by
the former over the latter. (Brent School,
Inc. v. Zamora, G.R. No. 48494, Feb. 5,
1990)

Note:AfixedperiodEedoesnotbecomearegularEe
becausehisemploymentiscoterminuswithaspecific
periodoftime.

Ee hired on a fixedterm is regular if job is necessary


and desirable to the business of Er. (Philips
Semiconductor v. Fadriquela, G.R. No. 141717, April
2004)

Q: Is term employment a circumvention of the


lawonsecurityoftenure?

A: No, it is not a circumvention of the law if it


followstherequisiteslaiddownbytheBrentruling.
(Romaresv.NLRC,G.R.No.122327,Aug.19,1998)

Q: Rene was hired as an athletic director in


ChristOmarDivivaSchoolforaperiodoffiveyears.
As such, he oversees the work of coaches and
related staff involved in intercollegiate or
interscholastic athletic programs. However, he
wasnotrehiredupontheexpirationofsaidperiod.
Rene questions his termination alleging that he
was a regular employee and could not be
dismissed without valid cause. Is he a regular
employee?

A: No. Rene was not a regular employee but an


employeeunderafixedtermcontract.Whileitcan
be said that the services he rendered were usually
necessary and desirable to the business of the
school, it cannot also be denied that his
employmentwasforafixedtermoffiveyears.The
decisive determinant in fixed term employment
should not be the activities that the employee is
calledupontoperform,butthedaycertainagreed
upon by the parties for the commencement and
termination of their employment relation (Brent
SchoolInc.v.Zamora,G.R.No.48494,Feb.5,1990).

Q: In the above mentioned facts, will Rene


automatically become a regular employee if he is
rehired by the school for another definite period
ofemployment?

A: No. The decisive determinant in term


employmentisthedaycertainagreeduponbythe
parties for the commencement and termination of
their employment relationship, a day certain being
understoodtobethatwhichmustnecessarilycome,
although it may not be known when and not
whethertheworkisusuallynecessaryanddesirable
tothebusinessoftheemployer.

Q:DoestheReasonableConnectionRuleapplies
in fixed term employment for a fixed term
employee be eventually classified as regular
employee?

A: No. It should be apparent that this settled and


familiar notion of a period, in the context of a
contractofemployment,takesnoaccountatallof
the nature of the duties of the employee; it has
absolutely no relevance to the character of his
duties as being usually necessary and desirable to
theusualbusinessoftheemployer,ornot.

Q: Dean Jose and other employees are holding


administrativepositions asdean,dept heads and
institutesecretaries.Intheimplementationofthe
Reorganization, Retrenchment and Restructuring
program effective Jan. 1, 1984, Dean Jose and
other employees were retired but subsequently
rehired.Theirappointmenttotheiradministrative
positions as dean, dept heads and institute
secretaries had been extended by the company
fromtimetotimeuntiltheexpirationoftheirlast
appointment on May 31, 1988. Were Dean Jose
andotheremployeesillegallydismissed?

A:No.Petitionersweredismissedbyreasonofthe
expiration of their contracts of employment.
Petitioners'appointmentsasdean,deptheadsand
institutesecretarieswereforfixedtermsofdefinite
periods as shown by their respective contracts of
employment, which all expired on the same date,
May 31, 1988. The validity of employment for a
fixed period has been acknowledged and affirmed
bytheSC.(Blancaflorv.NLRC,G.R.No.101013,Feb.
2,1993)

e.Jobcontractingandlaboronlycontracting
Q:Whenistherejobcontracting?
A:Specifically,thereisjobcontractingwhere:

1. The contractor carries on an


independent
business
and
undertakes thecontract work on his
own account under his own
responsibility according to his own
manner and method, free from the
controlanddirectionofhisemployer
or principal in all matters connected
with the performance of the work
exceptastotheresultsthereof;and

2. The contractor has substantial


capital or investment in the form of
tools, equipment, machineries, work
premises, and other materials which

75

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


are necessary in the conduct of his
business.

Phils.,Inc.,G.R.No.179807,July31,2009,
J.CarpioMorales)

Q:Whenistherelaboronlycontracting?

Q:Whatarethefactorstoconsiderindetermining
whethercontractoriscarryingonanindependent
business?

A: A person is deemed to be engaged in labor


onlycontractingwhere:

1. The person supplying workers to an


employer does not have substantial
capital or investment in the for of
tools, equipment, machineries, work
premises,amongothers;and

2. Theworkersrecruitedandplacedby
suchpersonareperformingactivities
which are directly related to the
principal business of such employer.
(Baguio v. NLRC, G.R. No. 7900408,
Oct.4,1991)

A:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Q: What is a permissible job contracting or


subcontracting?
A: It refers to an arrangementwhereby aprincipal
agrees to farm out with a contractor or
subcontractor the performance of a specific job,
work,orservicewithinadefiniteorpredetermined
period, regardless of whether such job, work or,
service is to be performed or completed within or
outsidethepremisesoftheprincipal.

Q: What are the conditions that must be met in


order to be considered as permissible job
contractingorsubcontracting?

A:Thefollowingconditionsmustbemet:

1. The contractor carries on a distinct and


independentbusinessandundertakesthe
contract work on his account under his
own responsibility according to his own
manner and method, free from the
control and direction of his employer or
principalinallmattersconnectedwiththe
performanceofhisworkexceptastothe
resultsthereof;

2. The contractor has substantial capital or


investment;and

3. Theagreementbetweentheprincipaland
contractor or subcontractor assures the
contractual employees entitlement to all
labor and occupational safety and health
standards, free exercise of the right to
selforganization, security of tenure, and
socialwelfarebenefits.(Gallegov.BAYER

76

Natureandextentofwork
Skillrequired
Termanddurationoftherelationship
Right to assign the performance of
specifiedpiecesofwork
Controlandsupervisionofworker
Power of employer to hire, fire and pay
wages
Controlofthepremises
Duty to supply premises, tools,
appliances,materialsandlabor
Mode, manner and terms of payment.
(Vinoya v. NLRC, G.R. No. 126286, Feb 2,
2000)

Note:Individualswithspecialskills,expertiseortalent
enjoy the freedom to offer their services as
independentcontractors.Anindividuallikeanartistor
talent has a right to render his services without any
one controlling the means and methods by which he
performshisartorcraft.(Sonzavs.ABSCBN,G.R.No.
138051,June10,2004)

Q: Who are the parties in contracting and


subcontracting?
A:
1. Contractor/subcontractor Refers to any
person engaged in a legitimate contracting or
subcontractingarrangement.

2. Contractual Ee One who is employed by a


contractor or subcontractor to perform or
completeajob,work,orservicepursuanttoan
arrangement between the latter and a
principal.(D.O.1802)

3. PrincipalAnyErwhoputsoutorfarmsouta
job, service, or work to a contractor or
subcontractor.

Q: Describe the relationship arising from


contractualarrangements.

A: There is a trilateral relationship between the


principal, contractor and Ee. There exists a
contractual relationship between the principal and
thecontractororsubcontractortoitsEes.
Q:WhataretherightsofacontractualEe(CEe)?

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
A: They shall be entitled to all the rights and
privilegesduetoaregularEeasprovidedintheLC,
asamendedtoincludetheff:
1.
2.

3.
4.

Safeandhealthfulworkingconditions
ServiceIncentiveLeave,restdays,OTpay,
holiday pay, 13th month pay and
separationpay
Socialsecurityandwelfarebenefits;
Selforganization, CBA and peaceful
concertedactions
Securityoftenure(Sec.8,DO1802)

5.

Q: What are the effects of termination of CEe to


separationpayandotherbenefits?

A:
1. If prior to the expiration of the
employment contract between the
principal and the contractor or
subcontractor The right of CEe to
separation pay or other related benefits
shall be governed by the applicable laws
and jurisprudence on termination of
employment

2. If the termination results from the


expiration of the contract between the
principal and the contractor or
subcontractor The Ee shall not be
entitled to separation pay. However, this
isw/oprejudicetocompletionbonusesor
other emoluments including retirement
pay as may be provided by law or in the
contract between the principal and the
contractor.

Q:Whenistheprincipaldeemedtheemployerof
thecontractualemployee?

A:Where:

1. Thereislaboronlycontracting
2. The contracting arrangement falls within
theprohibitedacts

Q:MaytheErorindirectErrequirethecontractor
or subcontractor to furnish a bond equal to the
cost of labor under contract to answer for the
wages due to Ees in case the contractor or
subcontractorfailstopaythesame?

A: Yes. The Er or indirect Er may require the


contractor or subcontractor to furnish a bond that
willanswerforthewagesduetotheEes.
Q:Whatistheliabilityoftheprincipal?

A: The principal shall be solidarily liable with the


contractor in the event of any violation of any
provision of the LC, including the failure to pay
wages. This will not prevent the principal from
claimingreimbursementfromthecontractor.
Q: What does substantial capital or investment
mean?
A: It refers to the capital stocks and subscribed
capitalization in case of corporations, tools,
equipments, implement, 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.(D.O.1802)
Note:Thelawdoesnotrequirebothsubstantialcapital
and investment in the form of tools, equipments,
machineries, etc. This is clear from the use of
conjunctionor.Ifthecontentionwastorequirethe
contractor to prove that he has both capital and
requisite investment, then the conjunction and
should have been used. (Virginia Neri v. NLRC, G.R.
No.97008,July21,1993)

Q:Whatdoestherighttocontrolmean?
A: It refers 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
usedinreachingthatend.(D.O.1802)
Q:SMCandSunflowerCooperativeenteredintoa
1yr Contract of Services, to be renewed on a
month to month basis until terminated by either
party. Pursuant to the contract, Sunflower
engagedprivaterespondentstorenderservicesat
SMCs Bacolod Shrimp Processing Plant. The
contract was deemed renewed by the parties
everymonthafteritsexpirationonJan.1,94and
respondentscontinuedtoperformtheirtasksuntil
Sep.11,95.InJuly95,privaterespondentsfileda
complaintbeforetheNLRC,prayingtobedeclared
asregularEesofSMC,withclaimsforrecoveryof
all benefits and privileges enjoyed by SMC rank
and file Ees. Respondents subsequently filed an
AmendedComplainttoincludeillegaldismissalas
additionalcauseofactionfollowingSMCsclosure
of its Bacolod Shrimp Processing Plant on which
resulted in the termination of their services. SMC
filed a Motion for Leave to File Attached Third
rd
PartyComplainttoimpleadSunfloweras3 Party
Defendant. Are private respondents Ees of the
independent cooperative contractor (Sunflower)
oroftheSMC?

77

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


A:ThecontentionofSMCholdsnobasis.Usingthe
substantial capital doctrine and the right of
control test, the Court found that the Sunflower
had no substantial capital in the form of tools,
equipment, machineries, work premises and other
materials to qualify itself as an independent
contractor. The lot, building, machineries and all
otherworkingtoolsutilizedbyprivaterespondents
in carrying out their tasks were owned and
provided by SMC. In addition, the shrimp
processing company was found to have control of
the manner and method on how the work was
done.Thus,thecomplainantsweredeemedEesnot
of the cooperative but of the shrimp processing
company. Sincerespondents who were engaged in
shrimp processing performed tasks usually
necessary or desirable in the aquaculture business
ofSMC,theyshouldbedeemedregularEesofthe
latter and as such are entitled to all the benefits
and rights appurtenant to regular employment.
(SMC vs. Prospero Aballa, et al., G.R. No. 149011,
June28,2005,J.CarpioMorales)

Q: What are the conditions before permitting job


contracting?
A:
1.

2.

The labor contractor must be duly


licensed by the appropriate Regional
OfficeoftheDOLE
There should be a written contract
between the labor contractor and his
clientEr that will assure the Ees at least
the minimum labor standards and
benefitsprovidedbyexistinglaws.

Note:TheEesofthecontractororsubcontractorshall
be paid in accordance with the provisions of the LC.
(Art.106)

Q:Whatislaboronlycontracting?
A:Itreferstoanarrangementwherethefollowing
conditionsconcur:
1.

2.

3.

The person supplying workers to an Er


does not have substantial capital or
investment in the form of tools,
equipment, machineries, work, premises,
amongothers,or
Evenifsuchpersonhassubstantialassets,
thesamearenotactuallyordirectlyused
bytheEescontractedout;
Theworkersrecruitedandplacedbysuch
personareperformingactivitieswhichare
directly related to the principal business
ofsuchEr.

Q:Whyislaboronlycontractingprohibited?

78

A:ItgivesrisetoconfusionastowhoistherealEr
of the workers and who is liable to their claims. It
alsodeprivesworkersoftheopportunitytobecome
regularEes.
Q: How do we determine if one is engaged in
labor/jobonlycontracting?
A:Thetesttodeterminewhetheroneisajob/labor
onlycontractingistolookintotheelementsofajob
contractor. If all the elements of a job contractor
arepresent,thenheisajobcontractor.Absentone
of the elements for a job contractor, then the
personisalaboronlycontractor.
Note: It is the opinion of Dean Antonio H. Abad, Jr.
thatthedecisivedeterminantinjobcontractingshould
not be the fact that the contracted workers are
performingactivitieswhicharedirectlyrelatedtothe
mainbusinessof theprincipal,but that the principal
has no right to control the conduct of the employees
astothemeansemployedtoachieveanend;notthe
character of the activities as being usually necessary
ordesirableintheusualbusinessoftheemployer.
It cannot be gainsaid that the activities of the
contractedworkersarealwaysnecessaryordesirable;
even that they are directly related to the main
businessoftheprincipal.Theprimordialconsideration
should be the control test. Hence, if the
arrangement passes the control test, it is job
contracting.Ifitfails,itislaboronlycontracting.

Q:Distinguishbetweenjobcontractingandlabor
onlycontracting
A:
JOBCONTRACTING
Liabilityislimited(shallbe
solidarily liable with Er
only when the Er fails to
comply with reqts as to
unpaid wages and other
laborstandardsviolations)
Permissible, subject only
tocertainconditions
The
contractor
has
substantial capital or
investment

LABORONLY
CONTRACTING
Liability extends to all
those provided under
theLaborStandardslaw

ProhibitedbyLaw
Has no substantial
capitalorinvestment

Q: SMPC entered into a contract with Arnold for


the milling of lumber as well as the hauling of
waste woodproducts. The company provided the
equipment and tools because Arnold had neither
tools and equipment nor capital for the job.
Arnold, on the other hand, hired his friends,
relatives and neighbors for the job. Their wages
were paid by SMPC to Arnold, based on their

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
productionorthenumberofworkersandthetime
used in certain areas of work. All work activities
andscheduleswerefixedbythecompany.
1.IsArnoldajobcontractor?Explainbriefly
2.Whoisliablefortheclaimsoftheworkershired
byArnold?Explainbriefly.
A:
1.

2.

No. In the problem given, Arnold did not


have sufficient capital or investment for
one. For another, Arnold was not free
from the control and direction of SMPC
because all work activities and schedules
were fixed by the company. Therefore,
Arnold is not a job contractor. He is
engagedinlaboronlycontracting.
SMPC is liable for the claims of the
workers hired by Arnold. A finding that
Arnold is a labor only contractor is
equivalenttodeclaringthatthereexistan
ErEe relationship between SMPC and
workers hired by Arnold. This is so
because Arnold is considered a mere
agent of SMPC (Lim v. NLRC, G.R. No.
124630, Feb. 19, 1999); 2002 Bar
Question)

Q: What are the grounds for delisting of


contractorsorsubcontractors?

A:
1. Nonsubmissionofcontractsbetweenthe
principal and the contractor or
subcontractorwhenrequiredtodoso;
2. Nonsubmissionofannualreport;
3. Findings through arbitration that the
contractor or subcontractor has engaged
in laboronly contracting and other
prohibitedactivities;
4. Noncompliancewithlaborstandardsand
workingconditions.(Sec.16,D.O.1802)

Q: What are the effects of finding that there is


laboronlycontracting?

A: A finding that a contractor is a laboronly


contractorisequivalenttodeclaringthatthereisan
employeremployee relationship between the
principal and the employees of the laboronly
contractor. (Assoc. AngloAmerican Tobacco Corp.
v.Clave,G.R.No.50915,Aug.30,1990)

2.TERMINATIONOFEMPLOYMENT
a.Substantivedueprocess
Q:WhatisSubstantivedueprocess?

A:SubstantiveDueProcessprovidesthegroundfor
disciplinaryaction,i.e.correctiveorretributive

(a)Justcauses

Q: What are the just causes for termination (Art.


282,LC)?

A:

1. Serious
misconduct
or
willful
disobediencebytheemployee(Ee)ofthe
lawful orders of his employer (Er) or
representative in connection with his
work
2. Gross and habitual neglect by the Ee of
hisduties
3. Fraud or willful breach by the Ee of the
trust reposed in him by his Er or duly
organizedrepresentative
4. Commission of a crime or offense by the
Ee against the person of his Er or any
immediate member of his family or his
dulyauthorizedrepresentative.
5. Othercausesanalogoustotheforegoing

Note:Theburdenofprovingthattheterminationwas
foravalidorauthorizedcauseshallrestontheEr.(Art.
277[b])

1.SeriousMisconduct
Q:Whatisseriousmisconduct?

A: It is an improper or wrong conduct; the


transgressionofsomeestablishedanddefiniterule
of action, a forbidden act, a dereliction of duty,
willfulincharacter,andimplieswrongfulintentand
not mere error in judgment. To be serious within
the meaning and intendment of the law, the
misconduct must be of such grave and aggravated
character and not merely trivial or unimportant.
(Villamor Golf Club v. Pehid, G.R. No. 166152, Oct.
4,2005)
Q:Whataretheelementsofseriousmisconduct?
A:
1.
2.
3.

Itmustbeseriousorofsuchagraveand
aggravatedcharacter;
Must relate to the performance of the
employees(Ee)duties;
Eehasbecomeunfittocontinueworking
for the employer. (Philippine Aeolus
Automotive United Corp. v. NLRC, G.R.
No.124617,April28,2000)

Q:Givesomeexamplesofseriousmisconduct.
A:

79

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


1.
2.
3.
4.
5.

Sexualharassment
Fightingwithinthecompanypremises
Uttering obscene, insulting or offensive
wordsagainstasuperior
Falsificationoftimerecords
Grossimmorality

Q: Escando, upset at his transfer to the washer


section, repeatedly uttered gago ka and
threatened bodily harm to his superior Mr.
Andres.Istheutteranceoftheobscenewordsand
threats of bodily harm gross and willful
misconduct?
A: Yes. The repeated utterances by Escando of
obscene, insulting or offensive words against a
superiorwerenotonlydestructiveofthemoralsof
his coemployees (Ees) and a violation of the
company rules and regulations, but also constitute
gross misconduct which is one of the grounds
providedbylawtoterminatetheservicesofanEe.
(Autobus Workers Union v. NLRC, G.R. No. 11753,
June26,1998)
Q:Samsonmadeinsultingandobsceneutterances
towards the General Manager saying Si EDT
bullshit yan, sabihin mo kay EDT yan among
others during the Christmas party. Are the
utterances towards the General Manager gross
misconduct?
A:TheallegedmisconductofSamsonwhenviewed
in its context is not of such serious and grave
characterastowarranthisdismissal.Samsonmade
theutterancesandobscenegesturesataninformal
Christmasgatheringanditistobeexpectedduring
this kind of gatherings, where tongues are more
oftenthannotloosenedbyliquorofotheralcoholic
beverages,thatemployees(Ees)freelyexpresstheir
grievancesandgripesagainsttheiremployers(Ers).
Ees should be allowed wider latitude to freely
express heir grievances andgripesagainst their Er.
Ees should be allowed wider latitude to freely
express their sentiments during these kinds of
occasions which are beyond the disciplinary
authority of the Er. (Samson v. NLRC, G.R. No.
121035,April12,2000)
2.WillfulDisobedience

Q: When is willful disobedience of the Ers lawful


ordersajustcausefortermination?

A:2requisitesmustconcur:
1.

80

The employees (Ees) assailed conduct


musthavebeenwillfulorintentional,the
willfulness being characterized by a
wrongfulandperverseattitude.

2.

The disobeyed orders, regulations or


instructionsoftheErmustbe:
a. Reasonableandlawful
b. SufficientlymadeknowntotheEe
c. Must pertain to or be in connection
with the duties which the Ee has
beenengagedtodischarge.(CosepV.
NLRC, G.R. No. 124966 June 16,
1998)

Note: ThereisnolawthatcompelsanEetoaccepta
promotion for the reason that a promotion is in the
natureofagiftorreward,whichapersonhastheright
torefuse.TheexerciseoftheEeoftherighttorefusea
promotion cannot be considered in law as
insubordinationorwillfuldisobedience.(PT&TCorp.v.
CA,G.R.No.152057,Sep.29,2003)

Q: The company vehicle was brought out of the


companypremiseswithoutauthorizationtwice.In
the first instance the company opted not to
implement any action against Dioks and instead
issuedamemorandumreimindingDioksaswellas
the security guards of the proper procedure.
However, in the second instance the vehicle met
anaccident.IsDioksguiltyofwillfuldisobedience
even though he was not the one who personally
brought the company vehicleout of the company
premises and was merely a passenger in the
secondincident?
A: Yes. A rule prohibiting Ees from using company
vehiclesforprivatepurposewithoutauthorityfrom
managementisareasonableone.WhenDioksrode
thecompanyvehiclehewasundoubtedlyawareof
thepossibleconsequencesofhisactandtakinginto
consideration his moral ascendancy over the
securityguardsitwasincumbentuponhimnotonly
toadmonishthembutalsotorefrainfromusingthe
company car himself. (Family Planning Org. of the
Phil.v.NLRC,G.R.No.75907,Mar.23,1992)
Q: Escobins group were security guards based in
Basilan. They were placed in floating status and
were asked to report for reassignment in Metro
Manila by PISI. Upon failure to report or respond
to such directives they were ordered dismissed
fromemploymentbyPISIforwillfuldisobedience.
Did the failure to report to Manila amount to
willfuldisobedience?
A: The reasonableness of the rule pertains to the
kind of character of directives and commands and
tothemannerinwhichtheyaremade.Inthiscase,
the order to report to the Manila office fails to
meet this standard. The order to report to Manila
was inconvenient, unreasonable, and prejudicial to
Escobins group since they are heads of families
residing in Basilan and they were not given

LABORLAWTEAM:
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TERMINATION OF EMPLOYMENT
transportationmoneyorassuranceofavailabilityof
workinManila.(Escobinv.NLRC,G.R.No.118159.
April15,1998)
3.Negligence
Q: When is negligence a just cause for
termination?
A:Whenitisgrossandhabitual.
Q:WhenisthereGrossNegligence?
A:Grossnegligenceimpliesawantorabsenceofor
failure to exercise slight care of diligence of the
entire absence of care it evinces thoughtless
disregard of consequences without exerting any
effort to avoid them. However, such neglect must
not only be gross but habitual in character. (Judy
Phils.v.NLRC,G.R.No.111934,April29,1998)
Q:WhenisthereHabitualNeglectofduties?
A: Habitual Neglect implies repeated failure to
perform ones duties over a period of time,
depending upon the circumstance. (JGB and
Associatesv.NLRC,GRNo.10939,Mar.7,1996)
Q: Antiola, as assorter of baby infant dress as for
Judy Phils. erroneously assorted and packaged
2,680 dozens of infant wear. Antiola was
dismissed from employment for this infraction.
Does the single act of misassortment constitute
grossnegligence?

A: Yes, failure to observe prescribed standards of


work,ortofulfillreasonableworkassignmentsdue
to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean
failure to attain work goals or work quotas, either
byfailingtocompletethesamewithintheallotted
reasonable period, or by producing unsatisfactory
results. (Buiser v. Leogardo, G.R. No. L63316, July
31,1984)
This ground is considered analogous to those
enumeratedunderArt.282.(SkippersUnitedPacific
v.Magud,G.R.No.166363,Aug.15,2006)
Q: Gamido was a quality control inspector of VH
Manufacturing. Gamido was allegedly caught by
thecompanyPres.DyJuancoofsleepingandwas
dismissed from employment. Did Gamidos act of
sleeping on the job constitute a valid cause of
dismissal?
A: Sleeping on the job as a valid ground for
dismissalonlyappliestosecurityguardswhoseduty
necessitatesthattheybeawakeandwatchfulatall
times. Gambidos single act of sleeping further
shows that the alleged negligence or neglect of
duty was neither gross nor habitual. (VH
Manufacturing v. NLRC, G.R. No. 130957, Jan. 19,
2000)
Q:Givesomeformsofneglectofduty.
A:
1.
2.

A:No.Suchneglectmustnotonlybegrossbutalso
habitual in character. Hence, the penalty of
dismissal is quite severe considering that Antiola
committed the infraction for the first time. (Judy
Phils.v.NLRC,G.R.No.111934.April29,1998)
Q: Does the failure in performance evaluations
amounttogrossandhabitualneglectofduties?
A: As a general concept poor performance is
equivalent to inefficiency and incompetence in the
performance of official duties. The fact that an
employees(Ees)performanceisfoundtobepoor
or unsatisfactory does not necessarily mean that
the Ee is grossly and habitually negligent of his
duties.Grossnegligenceimpliesawantorabsence
of or failure to exercise slight care of diligence or
theentireabsenceorcare.Heevincesathoughtless
disregard of consequences without exerting any
effort to avoid them. (Eastern Overseas
Employment Center Inc. v. Bea, G.R. 143023,
Nov.29,2005)
Q:Isinefficiencyajustcausefordismissal?

Habitualtardinessandabsenteeism
Abandonment:
a. Failuretoreportforworkorabsence
withoutjustifiablereason
b. Clear intention to sever ErEe
relationship manifested by some
overt acts. (Labor et. al v. NLRC, GR
No.110388,Sep.14,1995)

4.Abandonment
Q: What is abandonment as a just cause for
termination?
A:Itmeansthedeliberate,unjustifiedrefusalofan
employeetoresumehisemployment.
Q:Whataretherequirementsforavalidfindingof
abandonment?

A: For a valid finding of abandonment, 2 factors


mustbepresent:
1. Thefailuretoreportforwork,orabsence
withoutvalidorjustifiablereason;and
2. A clear intention to sever ErEe
relationship,withthe2ndelementasthe

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UST GOLDEN NOTES 2011


more determinative factor, being
manifested by some overt acts. (Sta.
Catalina College s. NLRC, G.R. No.
144483,Nov.19,2003)

Q:Howtoproveabandonment?

A: To prove abandonment, the Er must show that


the Ee deliberately and unjustifiably refused to
resume his employment without any intention of
returning. There must be a concurrence of the
intention to abandon and some overt acts from
which an Ee may be deduced as having no more
intention to work. The law, however, does not
enumerate what specific overt acts can be
considered as strong evidence of the intention to
sever the EeEr relationship. (Sta. Catalina College
v.NLRC,G.R.No.144483.Nov.19,2003)

Q: Mejila a barber at Windfield Barber Shop, had


analtercationwithafellowbarberwhichresulted
in his subsequent turning over the duplicate keys
of the shop to the cashier and took away all his
belongings there from and worked at different
barbershop. Mejila then filed an illegal dismissal
casebutdidnotseekreinstatementasarelief.Did
Mejilacommitabandonment?

A: Mejilas acts such as surrendering the shops


keys, not reporting to the shop anymore without
any justifiable reason, his employment in another
barbershop,andthefilingofacomplaintforillegal
dismissal without praying for reinstatement clearly
showthattherewasaconcurrenceoftheintention
toabandonandsomeovertactsfromwhichitmay
be inferred that the Ee concerned has no more
interest in working. (Jo v. NLRC, G.R. No. 121605,
Feb.2,2000)
5.Fraud;BreachofTrust/LossofConfidence
Q: When is breach of trust/loss of confidence a
justcausefortermination?
A:
1.

82

Itappliesonlytocasesinvolving:
a. Employees (Ees) occupying positions
of trust and confidence (confidential
and managerial Ees) to this class
belong managerial Ees, i.e., those
vested with the powers or
prerogatives
to
lay
down
managementpoliciesand/ortohire,
transfer, suspend, layoff, recall,
discharge, assign or discipline Ees or
effectively
recommend
such
managerialactions
b. Ees routinely charged with the care
and custody of the employers (Ers)

2.

money or property to this class


belong cashiers, auditors, property
custodians,etc.,orthosewho,inthe
normal and routine exercise of their
functions,
regularly
handle
significant amounts of money or
property. (Mabeza v. NLRC, G.R. No.
118506April18,1997)

The loss of trust and confidence must be


basedonwillfulbreach.

Note: A breach is willful if it is done


intentionally, knowingly, and purposely
without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently (De la Cruz v.
NLRC,G.R.No.119536,Feb.17,1997)

3.

The act constituting the breach must be


workrelated such as would show the
Ee concerned to be unfit to continue
working for the Er. (Gonzales V. NLRC,
G.R.No.131653,Mar.26,2001)

4.

It must be substantial and founded on


clearly established facts sufficient to
warrant the Ees separation from
employment.(SulpicioLinesInc.V.Gulde,
G.R.No.149930,Feb.22,2002)

5.

Fraud must be committed against the Er


orhisrepresentatives,e.g.:
a. Falsificationoftimecards
b. Theftofcompanyproperty
c. Unauthorized use of company
vehicle

Note: The treatment of rank and file personnel and


managerial Ees in so far as the application of the
doctrineoflossoftrustandconfidenceisconcernedis
different. As regards managerial Ees, such as Caoile,
mereexistenceofabasisforbelievingthatsuchEehas
breached the trust of his Er would suffice for his
dismissal. (Caoile v. NLRC, G.R. No. 115491, Nov. 24,
1998)

Q:Whataretheguidelinesforthedoctrineofloss
ofconfidencetoapply?
A:
1.

2.

3.

Loss of confidence should not be


simulated (reasonable basis for loss of
trustandconfidence)
Notusedforsubterfugeforcauseswhich
are improper and/or illegal and
unjustified
Not arbitrarily asserted in the face of
overwhelmingevidencetothecontrary

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TERMINATION OF EMPLOYMENT
4.

5.

Must be genuine, not a mere


afterthoughttojustifyearlieractiontaken
inbadfaithand
The Ee involved holds a position of trust
andconfidence

Note: The breach of trust must rest on substantial


grounds and not on the Ers arbitrariness, whims,
caprices, or suspicion; otherwise, the Ee would
eternally remain at the mercy of the Er. It should be
genuine and not simulated, nor should it appear as a
mereafterthoughttojustifyearlieractiontakeninbad
faith of a subterfuge for causes which are improper,
illegal, or unjustified. It has never been intended to
affordandoccasionforabusebecauseofitssubjective
nature.Theremust,therefore,beanactualbreachof
dully committed by the employee which must be
established by substantial evidence. (Dela Cruz v.
NLRC,G.R.No.119536,Feb.17,1997)

Q:MabezaachambermaidatHotelSupremewas
terminated from employment because of her
refusal to sign an affidavit attesting to their
employers(Ers)compliancewithminimumwage
and other labor standards. Mabeza filed a
complaint for illegal dismissal against Hotel
Supreme. As a defense, Hotel Supreme claimed
that she abandoned her work and belatedly
claimed loss of confidence as the ground for the
dismissalofMabezabecauseshestolesomeofthe
properties of her Er. Is loss of confidence a valid
groundfordismissalofahotelchambermaid?
A: No. Loss of confidence as a just cause for
dismissalwasneverintendedtoprovideErswitha
blankcheckforterminatingtheirEes.Evidently,an
ordinarychambermaidwhohastosignoutforlinen
and other hotel property from the property
custodian each day and who has to account for
each and every towel or bed sheet utilized by the
hotel'sguestsattheendofhershiftwouldnotfall
underanyofthesetwoclassesofEesforwhichloss
ofconfidence,ifablysupportedbyevidence,would
normallyapply.(Mabezav.NLRC,G.R.No.118506,
April18,1997)
Q: Abelardo Abel was first hired by Philex Mining
Corp. in Jan. 88. He was later assigned to the
companys Legal Dept as a Contract Claims Asst.,
andheldthepositionfor5yrspriortohistransfer
totheMineEnggandDrawControlDeptwherein
he was appointed Unit Head. In 02, he was
implicated in an irregularity occurring in the
subsidence area of the companys mine site at
Benguet. His coworker Danilo, executed an
affidavit known as the Subsidence Area
Anomaly. The incidents in Lupegas affidavit
supposedly took place when Abel was still a
ContractClaimsAsst.atthecompanyslegaldept.

An investigation was promptly launched by the


companys officers. Abel attended the meetings
but claimed that he was neither asked if he
needed the assistance of counsel nor allowed to
properlypresenthisside.Bymemo,thecompany
found Abel guilty of (1) fraud resulting in loss of
trustandconfidenceand(2)grossneglectofduty,
and was meted out the penalty of dismissal from
employment. Was Abel validly dismissed for any
ofthecausesprovidedforinArt.282oftheLC?
A:No.The1strequisitefordismissalontheground
of loss of trust and confidence is that the Ee
concerned must be holding a position of trust and
confidence.Abelwasacontractclaimsassistantat
thetimeheallegedlycommittedtheactswhichled
to its loss of trust and confidence. It is not thejob
title but the actual work that the Ee performs. It
was part of Abels responsibilities to monitor the
performance of the companys contractors in
relation to the scope of work contracted out to
them.
The2ndrequisiteisthattheremustbeanactthat
wouldjustifythelossoftrustandconfidence.Loss
of trust and confidence, to be a valid cause for
dismissal,mustbebasedonawillfulbreachoftrust
andfoundedonclearlyestablishedfacts.Thebasis
for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is
not necessary. The companys evidence against
Abel fails to meet this standard. Its lone witness,
Lupega,didnotsupporthisaffidavitandtestimony
duringthecompanyinvestigationwithanypieceof
evidence at all. It could hardly be considered
substantial evidence. (Abel v. Philex Mining Corp.,
G.R.No.178976,July31,2009,J.CarpioMorales)
6.TerminationofEmploymentpursuanttoUnion
SecurityClause
Q:MSMGwasalocalunionaffiliatedwithULGWP
a national federation. MSMG had a dispute with
ULGWP over an imposition of a fine prompting
MSMG to declare independence from ULGWP.
Because of the dispute, ULGWP asked for the
dismissal from employment of the officers of
MDMG from the company by virtue of a union
securityclauseintheCBA.Thecompanydismissed
the officers. Does a union security clause absolve
the company form observing the requirement of
dueprocess?
A:Althoughunionsecurityclausesembodiedinthe
CBA may be validly enforced and dismissals
pursuant thereto may likewise be valid, this does
not erase the fundamental requirement of due
process. An employer cannot merely rely upon a
labor federations allegations in terminating union

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UST GOLDEN NOTES 2011


officers expelled by the federation for allegedly
committingactsofdisloyaltyand/orinimicaltothe
interest of the federation and in violation of its
constitutionandbylaws.
The right of an Ee to be informed of the charges
against him and to be given a reasonable
opportunity to present his side in a controversy
with either the company or his own union is not
wiped away by a union security clause in a CBA.
Evenassumingthatafederationhadvalidgrounds
to expel union officers, due process requires that
theseunionofficersbeaccordedaseparatehearing
by the company. (MSMG v. Ramos, G.R. No.
113907,Feb.28,2000)

9.AnalogousCases

Q: What is required for an act to be included in


analogouscasesofjustcausesoftermination?

A: Must be due to the voluntary and/or willful act


or omission of the employee (Nadura v. Benguet
Consolidated,G.R.No.L17780,Aug.24,1962),e.g.:
1.
2.
3.
4.
5.

7.TotalityofInfractionsdoctrine
Q:Whatisthetotalityofinfractionsdoctrine?
A:Itisthetotality,notthecompartmentalizationof
company infractions that the Ee has committed,
which justifies the penalty of dismissal. (MERALCO
v.NLRC,G.R.No.114129,Oct.24,1996)
Note: Where the Ee has been found to have
repeatedly incurred several suspensions or warnings
on account of violations of company rules and
regulations, the law warrants their dismissal as it is
akin to habitual delinquency. (Villeno v. NLRC, G.R.
No.108153,Dec.26,1995)

Q: What are the guidelines to determine the


validityoftermination?

6.

Q:Whatisthedoctrineofincompatibility?

A:Wheretheemployeehasdonesomethingthatis
contrary or incompatible with the faithful
performance of his duties, his employer has a just
cause for terminating his employment. (Manila
ChauffeursLeaguev.BachrachMotorCo.,G.R.No.
L47071,June17,1940)
(b).AuthorizedCauses
Q:Whataretheauthorizedcausesoftermination
bytheemployer(Er)?
A:
1.

A:Gravityoftheoffense
1. Positionoccupiedbytheemployee
2. Degreeofdamagetotheemployer
3. Previousinfractionsofthesameoffense
4. LengthofService

8.CommissionofaCrime
Q: Whatdo you meanby commission of a crime
or offense as a just cause for termination of an
Ee?

A: It refers to an offense by the Ee against the


person of his employer or any immediate member
of his family or his duly authorized representative
and thus, conviction of a crime involving moral
turpitude is not analogous thereto as the element
ofrelationtohisworkortohisemployerislacking.
Note: A criminal case need not be actually filed.
Commission of acts constituting a crime itself is
sufficient.

84

Violation of company rules and


regulations
Drunkenness
Grossinefficiency
Illegallydivertingemployersproducts
Failure to heed an order not to join an
illegalpicket
Violation of safety rules and code of
discipline

2.

Installation of laborsaving devices


(automation/robotics)

Redundancy
(superfluity
in
the
performanceofaparticularwork)exists
where the services of an employee (Ee)
are in excess of what is reasonably
demanded by the actual reqts of the
enterprise.(WiltshireFileCo.,Inc.v.NLRC,
G.R.No.82249,Feb.7,1991)

Note:Theredundancyshouldnothavebeen
createdbytheEr.

3.

Reorganization

Note: AnErisnotprecludedfromadopting
a new policy conducive to a more
economicalandeffectivemanagement,and
thelawdoesnotrequirethattheErshould
be suffering financial losses before he can
terminate the services of the employee on
thegroundofredundancy(DOLEPhil.,Inc.v.
NLRC,G.R.No.L55413,July25,1983)

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TERMINATION OF EMPLOYMENT
4.

Retrenchment cutting of expenses and


includesthereductionofpersonnel;Itisa
management prerogative, a means to
protectandpreservetheErsviabilityand
ensure his survival. To be an authorized
cause it must be affected in good faith
(GF) and for the retrenchment, which is
after all a drastic recourse with serious
consequences for the livelihood of the
Eesorotherwiselaidoff.

Note:Thephrasetopreventlossesmeans
that retrenchment or termination from the
service of some Ees is authorized to be
undertaken by the Er sometime before the
anticipated losses are actually sustained or
realized. Evidently, actual losses need not
setinpriortoretrenchment.(CajucomVIIv.
TP Phils Cement Corp., et al, G.R. No.
149090,Feb.11,2005)

5.

6.

Closing or cessation of operation of the


establishment or undertaking must be
done in good faith and not for the
purpose of circumventing pertinent labor
laws.

Disease must be incurable within 6


monthsandthecontinuedemploymentis
prohibited by law or prejudicial to his
health as well as to the health of his co
Ees with a certification from the public
healthofficerthatthediseaseisincurable
within 6 months despite due to
medicationandtreatment

Q:Whatareotherauthorizedcauses?

A:
1. TotalandpermanentdisabilityofEe
2. Validapplicationofunionsecurityclause
3. Expiration of period in term of
employment
4. Completion of project in project
employment
5. Failureinprobation
6. Relocationofbusinesstoadistantplace
7. Defianceofreturntoworkorder
8. CommissionofIllegalactsinstrike
9. Violationofcontractualagreement
10. Retirement

Q: What are the procedural steps required in


termination of an employee for authorized
causes?

A:
1. Written Notice to DOLE 30 days prior to
theintendeddayoftermination.

2.

3.

Purpose: To enable it to ascertain the


verityofthecauseoftermination.

Written notice to Ee concerned 30 days


priortheintendeddateoftermination.

Payment of separation pay Serious


businesslossesdonotexcusetheErfrom
complying with the clearance or report
required in Art. 283 of the LC and its IRR
beforeterminatingtheemploymentofits
workers. In the absence of justifying
circumstances, the failure of the Er to
observe the procedural reqts under Art.
284 taints their actuations with bad faith
if the layoff was temporary but then
serious business losses prevented the
reinstatement of respondents, the Ers
should have complied with the reqts of
writtennotice.

Redundancy

Q:Whataretherequisitesofavalidredundancy?

A:
1. Written notice served on both the
employees (Ees) and the DOLE at least 1
monthpriortoseparationfromwork
2. Payment of separation pay equivalent to
at least 1 month pay or at least 1 month
payforeveryyearofservice,whicheveris
higher
3. Good faith in abolishing redundant
position
4. Fair and reasonable criteria in
ascertaining what positions are to be
declaredredundant:
a. Lesspreferredstatus,e.g.temporary
Ee
b. Efficiencyand
c. Seniority

Q:Ong,aSalesManagerofWiltshireFileCo.,Inc.,
was informed of the termination of his
employment due to redundancy upon returning
from a trip abroad. Ong maintains that there can
be no redundancy since he was the only person
occupyinghispositioninthecompany.
IsthereredundancyeventhoughOngwastheonly
oneoccupyinghisposition.
A: Redundancy in an employers (Ers) personnel
does not necessarily or even ordinarily refer to
duplication of work. The characterization ofOngs
services as no longer necessary or sustainable and
therefore properly terminable, was an exercise of
business judgment on the part of Wiltshire.

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Furthermore, 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 over hiring of workers, decreased
volume of business, or dropping of a particular
product line or service activity previously
manufacturedorundertakenbytheenterprise.The
Erhasnolegalobligationtokeepinitspayrollmore
employees that are necessary for the operation of
itsbusiness.(WiltshireFileCo.,Inc.v.NLRC,G.R.No.
82249,Feb.7,1991)
Retrenchment
Q: What are the circumstances that must be
presentforavalidretrenchment?
A:
1.

2.

Thelossesexpectedshouldbesubstantial
and not merely de minimis in extent If
the loss purportedly sought to be
forestalled by retrenchment is clearly
shown to be insubstantial and
inconsequential in character, the bona
fide nature of the retrenchment would
appeartobeseriouslyinquestion.

Thesubstantiallossapprehendedmustbe
reasonablyimminentassuchimminence
can be perceived objectively and in good
faith by the employer (Er). There should
be a certain degree of urgency for the
retrenchment.

3.

Itmustbereasonablynecessaryandlikely
to prevent the expected losse The Er
should have taken other measures prior
or parallel to retrenchment to forestall
losses such as cutting other costs than
laborcosts.

4.

Theallegedlossesifalreadyrealized,and
the expected imminent losses sought to
be forestalled, must be proved by
sufficient and convincing evidence The
reason for requiring this quantum of
proof is readily apparent: any less
exacting standard of proof would render
too easy the abuse of this ground for
termination of services of employees.
(Lopez Sugar Corp. v. Federation of Free
Workers, G.R. No. 7570001, Aug. 30,
1990)

Note: The losses which the company may suffer or is


suffering may be proved by financial statements
audited by independent auditors (Asian Alcohol
Corporationv.NLRC,G.R.No.131108,Mar.25,1999)

86

Retrenchmentisameansoflastresort.

Q: What are the requisites of a valid


retrenchment?

A:
1. WrittennoticeservedonboththeEeand
the DOLE at least 1 month prior to the
intendeddateofretrenchment
2. Payment of separation pay equivalent to
at least one month pay or at least 1/2
month pay for every year of service,
whicheverishigher
3. Goodfaith
4. Proofofexpectedoractuallosses
5. The employer used fair and reasonable
criteria in ascertaining who would be
retained among the Ees, such as status,
efficiency, seniority, physical fitness, age,
and financial hardship of certain workers
(Asian Alcohol Corp. v. NLRC, G.R. No.
131108,Mar.25,1999).

Q: What are the criteria in selecting employees


(Ees)toberetrenched?
A:Theremustbefairandreasonablecriteriatobe
usedinselectingEestobedismissedsuchas:
1. Lesspreferredstatus;
2. Efficiencyrating;
3. Seniority. (Phil. Tuberculosis Society, Inc.
v.NationalLaborUnion,G.R.No.115414,
Aug.25,1998)

Q:Whatisthelastinfirstout(LIFO)rule?

A: It applies in the termination of employment in


thelineofwork.WhatiscontemplatedintheLIFO
rule is that when there are two or more Ees
occupying the same position in the company
affectedbytheretrenchmentprogram,thelastone
employed will necessarily be the first one to go.
(Maya Farms Ees Organization v. NLRC, G.R. No.
106256,Dec.28,1994)

Q: Is the seniority rule or "last in first out"


policy to be strictly followed in effecting a
retrenchmentorredundancyprogram?
A: Again, in Asian Alcohol Corp., the SC stated
that with regard the policy of "first in, last out"
in choosing which positions to declare as
redundantorwhomtoretrenchtopreventfurther
business losses, there is no law that mandates
suchapolicy.Thereasonissimpleenough.Ahost
of relevant factors come into play in determining
cost efficient measures and in choosing the Ees
who will be retained or separated to save the

LABORLAWTEAM:
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MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
companyfrom
closingshop.
In
determining these issues, management plays a
preeminentrole.Thecharacterizationofpositions
as redundant is an exercise of business judgment
on the part of the Er. It will be upheld as long
as it passes the test of arbitrariness. (2001 Bar
Question)
Q: What is the difference between redundancy
andretrenchment?
A: In redundancy, company has no financial
problems, unlike in retrenchment where the
companywillsufferfinanciallosses.
Q:PhilippineTuberculosisSociety,Inc.retrenched
116 Ees after incurring deficits amounting to 9.1
million pesos. Aside for retrenching some of its
Ees, the company also implemented cost cutting
measurestopreventsuchlossesforincreasingand
minimizing it. The NLRC ruled that the
retrenchmentwasnotvalidonthegroundthatthe
Societydidnottakeseniorityintoaccountintheir
selection. Was the retrenchment done by the
Society not valid for its failure to follow the
criterialaiddownbylaw?
A: No. The Society terminated the employment of
severalworkerswhohaveworkedwiththeSociety
forgreatnumberofyearswithoutconsiderationfor
the number of years of service and their seniority
indicates that they had been retained for such a
longtimebecauseofloyalandefficientservice.The
burdenofprovingthecontraryrestontheSociety.
(Phil. Tuberculosis Society, Inc. v. National Labor
Union,G.R.No.115414,Aug.25,1998)
Q: Due to mounting losses the former owners of
Asian Alcohol Corporation sold its stake in the
companytoPriorHoldings.Upontakingcontrolof
thecompanyandtopreventlosses,PriorHoldings
implementedareorganizationplanandothercost
saving measures and one of them is the
retrenchment of 117 employees (Ees) of which
somearemembersoftheunionandthemajority
held by nonunion members. Some retrenched
workers filed a complaint for illegal dismissal
alleging that the retrenchment was a subterfuge
forunionbustingactivities.
Was the retrenchment made by Asian Alcohol
validandjustified?
A: Yes. Even though the bulk of the losses were
sufferedundertheoldmanagementandcontinued
only under the new management ultimately the
newmanagementofPriorHoldingswillabsorbsuch
losses. The law gives the new management every
right to undertake measures to save the company

frombankruptcy.(AsianAlcoholCorp.v.NLRC,G.R.
No.131108,Mar.25,1999)
Closure
Q:Whataretherequisitesofavalidclosure?
A:
1.

2.

3.
4.
5.

Written notice served on both the


employees (Ees) and the DOLE at least 1
month prior to the intended date of
closure
Payment of separation pay equivalent to
at least one month pay or at least 1/2
month pay for every year of service,
whicheverishigher,exceptwhenclosure
isduetoseriousbusinesslosses
Goodfaith
Nocircumventionofthelaw
NootheroptionavailabletotheEr

Q: What is the test for the validity of closure or


cessationofestablishmentorundertaking?

A: The ultimate test of the validity of closure or


cessationofestablishmentorundertakingisthatit
must be bonafide in character. And theburden of
proving such falls upon the Er. (Capitol Medical
Center,Inc.vs.Dr.Meris,G.R.No.155098,Sep.16,
2005,J.CarpioMorales)

Q: When is separation pay required in case of


closure?

A:Onlywhereclosureisnotduetoseriousbusiness
losses nor due to an act of govt. (North Davao
Mining Corp v. NLRC, G.R. No. 112546, Mar. 13,
1996;NFLv.NLRC,G.R.No.127718,Mar.2,2000)

Q: Galaxie Steel Corp. decided to close down


becauseofseriousbusinessloses.Itfiledawritten
notice with the DOLE informing its intended
closureandtheterminationofitsemployees(Ees).
It posted the notice of closure on the corporate
bulletinboard.

Q: Does the written notice posted by Galaxie on


the bulletin board sufficiently comply with the
noticereqtunderArt.283oftheLC?

A:No.Inordertomeetthepurpose,serviceofthe
writtennoticemustbemadeindividuallyuponeach
and every Ee of the company. However, the Court
held that where the dismissal is for an authorized
cause, noncompliance with statutory due process
shouldnotnullifythedismissal,orrenderitillegal,
orineffectual.Still,theemployershouldindemnify
the Ee, in the form of nominal damages, for the
violation of his right to statutory due process.

87

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


(Galaxie Steel Workers Union v. NLRC, G.R. No.
165757,Oct.17,2006)

AreEesentitledtoseparationpay?

A: No. Galaxie had been experiencing serious


financial losses at the time it closed business
operations.Art.283oftheLCgovernsthegrantof
separationbenefits"incaseofclosuresorcessation
of operation" of business establishments "not due
to serious business losses or financial reverses."
Where, the closure then is dueto serious business
losses,theLCdoesnotimposeanyobligationupon
the employer to pay separation benefits. (Galaxie
Steel Workers Unin v. NLRC, G.R. No. 165757, Oct.
17,2006)

Q:RankandfileworkersofSIMEXfiledapetition
fordirectcertificationandaffiliatedwithUnionof
FilipinoWorkers(UFW).Subsequently,36workers
of the companys lumpia dept and 16 other
workersfromotherdeptswereeffectivelylocked
out when their working areas were cleaned out.
The workers through UFW filed a complaint for
unfairlaborpracticesagainstthecompany.SIMEX
then filed a notice of permanent shutdown/total
closure of all units of operation in the
establishment with the DOLE allegedly due to
businessreversesbroughtaboutbytheenormous
rejectionoftheirproductsforexporttotheUnited
States.

Wastheclosurewarrantedbytheallegedbusiness
reverses?
A: The closure of a business establishment is a
ground for the termination of the services of any
employee unless the closing is for the purpose of
circumventingtheprovisionsofthelaw.But,while
business reverses can be a just cause for
terminating employees, they must be sufficiently
proved.Inthiscase,theauditedfinancialstatement
ofSIMEXclearlyindicatesthattheyactuallyderived
earnings.Althoughtherejectionsmayhavereduced
theirearningstheywerenotsufferinglosses.There
is no question that an employer may reduce its
workforcetopreventlossesbutitmustbeserious,
actual and real otherwise this ground for
termination would be susceptible to abuse by
schemingemployerswhomightbemerelyfeigning
business losses or reverses in their business
ventures to ease out employees. (Union of Filipino
Workersv.NLRC,G.R.No.90519,Mar.23,1992)
Q: Carmelcraft Corporation closed it business
operations allegedly due to losses of P1, 603.88
aftertheCarmelcraftEesUnionfiledapetitionfor
certification election. Carmelcraft Union filed a
complaint for illegal lockout and ULP with

88

damages and claim for employment benefits.


Werethelossesincurredbythecompanyenough
tojustifyclosureofitsoperations?
A: The determination to cease operations is a
prerogative of management that is usually not
interfered with by the State as no business can be
required to continue operating at a loss simply to
maintain the workers in employment. That would
beatakingofpropertywithoutdueprocessoflaw
whichtheemployerhasarighttoresist.Butwhere
itismanifestthattheclosureismotivatednotbya
desiretoavoidfurtherlossesbuttodiscouragethe
workers from organizing themselves into a union
for more effective negotiations with management,
the State is bound to intervene. The losses of less
than P2,000 for a corporation capitalized at P3
millioncannotbeconsideredseriousenoughtocall
for the closure of the company. (Carmelcraft Corp.
v.NLRC,G.R.No.9063435,June6,1990)
Q: Is the transferee of the closed corporation
requiredtoabsorbtheemployees(Ees)oftheold
corporation?
A:
GR:Thereisnolawrequiringabonafidepurchaser
of assets of an ongoing concern to absorb in its
employ the Ees of the latter except when the
transaction between the parties is colored or
clothedwithbadfaith(BF).(SundownerDevtCorp.
v.Drilon,G.R.No.82341,Dec.6,1989)

XPNs:
1. Where the transferee was found to be
merely an alter ego of the different
mergingfirms.(FilipinasPortServices,Inc.
v.NLRC,G.R.No.97237,Aug.16,1991)
2. Where the transferee voluntarily agrees
to do so. (Marina Port Services, Inc. v.
Iniego,G.R.No.77853,Jan.22,1990)
Q:MarikinaDairyIndustries,Inc.decidedtosellits
assets and close operations on the ground of
heavylosses.Theunionsallegedthatthefinancial
losses were imaginary and the dissolution was a
schememaliciouslydesignedtoevadeitslegaland
social obligations to its employees (Ees). The
unionswantthebuyersofthecorporationsassets
restrained to operate unless the members of the
unions were the ones hired to operate the plant
under the terms and conditions specified in the
collectivebargainingagreements.
Is the buyer of a companys assets required to
absorbtheEesoftheseller?
A:Thereisnolawrequiringthatthepurchaserofa
companys assets should absorb its Ees and the

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
most that can be donefor reasons of public policy
andsocialjusticewastodirectthatbuyersofsuch
assetstogivepreferencetothequalifiedseparated
Ees in the filling up of vacancies in the facilities of
the buyer. (MDII Supervisors & Confidential Ees
Assn(FFW)v.residentialAssistantonLegalAffairs,
G.R.Nos.L4542123,Sep.9,1977)
Q: What is the difference between closure and
retrenchment?

A:
CLOSURE
Is the reversal of
fortune of the Er
whereby there is a
complete cessation of
business operations to
preventfurtherfinancial
drain upon an Er who
cannotpayanymorehis
Ees since business has
alreadystopped.

One of the prerogatives


of management is the
decision to close the
entire establishment or
to close or abolish a
department or section
thereof for economic
reasons, such as to
minimize expenses and
reducecapitalization.

DoesnotobligatetheEr
for the payment of
separation package if
there is closure of
business due to serious
losses.

RETRENCHMENT
Is the reduction of
personnel for the purpose
ofcuttingdownoncostsof
operations in terms of
salaries
and
wages
resorted to by an Er
because of losses in
operation of a business
occasionedbylackofwork
andconsiderablereduction
inthevolumeofbusiness.
As in the case of
retrenchment, however,
for the closure of a
business or a department
due to serious business
lossestoberegardedasan
authorized cause for
terminatingEes,itmustbe
proven that the losses
incurred are substantial
and actual or reasonably
imminent; that the same
increasedthroughaperiod
of time; and that the
condition of the company
is not likely to improve in
thenearfuture.
LC provides for the
payment of separation
package in case of
retrenchment to prevent
losses.

Disease

Q:Whenisdiseaseagroundfordismissal?
A:WheretheEesuffersfromadisease,and:
1. His continued employment is prohibited
by law or prejudicial to his health or to
the health of his coEes. (Sec.8, Rule I,
BookVI,IRR)

2.

With a certification by competent public


health authority that the disease is
incurable within 6 months despite due
medicationandtreatment.(Solisv.NLRC,
GRNo.116175,Oct.28,1996)

Note:Thereqtforamedicalcertificationcannot
be dispensed with; otherwise, it would sanction
theunilateralandarbitrarydeterminationbythe
ErofthegravityorextentoftheEesillnessand
thusdefeatthepublicpolicyontheprotectionof
labor.(ManlyExpressvPayong,G.R.No.167462,
Oct.25,2005)

Termination of services for health reasons must


beeffectedonlyuponcompliancewiththeabove
requisites. The reqt for a medical certificate
under Art. 284 of the LC cannot be dispensed
with; otherwise, it would sanction the unilateral
and arbitrary determination by the Er of the
gravity or extent of the Ees illness and thus
defeat the public policy on the protection of
labor. (Sy et. al v. CA, G.R. No. 142293, Feb. 27,
2003)

Q: What is the procedure in terminating an


employee(Ee)onthegroundofdisease?

A:
1. Theemployer(Er)shallnot terminatehis
employmentunless:
a. There is a certification by a
competentpublichealthauthority
b. Thatthediseaseisofsuchnatureor
at such a stage that it cannot be
cured within a period of 6 months
evenwithpropermedicaltreatment.

2. If the disease or ailment can be cured


within the period, the Er shall not
terminate the Ee but shall ask the Ee to
takealeave.TheErshallreinstatesuchEe
to his former position immediately upon
therestorationofhisnormalhealth.(Sec.
8,RuleI,BookVI,IRR)

Q:Isanemployeesufferingfromadiseaseentitled
toreinstatement?

A: Yes, provided he presents a certification by a


competent public health authority that he is fit to
return to work. (Cebu Royal Plant v. Deputy
Minister,G.R.No.L58639,Aug.12,1987)

Q: Is the requirements of a medical certificate


mandatory?

A:Yes,itisonlywherethereisapriorcertification
fromacompetentpublicauthoritythatthedisease

89

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
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UST GOLDEN NOTES 2011


afflictingtheemployeesoughttobedismissedisof
suchnatureoratsuchstagethatitcannotbecured
within 6 months even with proper medical
treatment that the latter could be validly
terminated from his job. (Tan v. NLRC, G. R. No.
116807,April14,1997)

Closures or cessation
of operation not due
to serious
business
losses/financial
reverses

Equivalenttoatleast1month
pay or at least 1 month pay
for every year of service (if
duetoseverefinanciallosses,
noseparationpay

Note: Termination from work on the sole basis of


actual perceived or suspected HIV status is deemed
unlawful.(Sec.35,R.A.8504HIV/AIDSLaw)

Disease

Equivalenttoatleast1month
pay or at least month pay
for every year of service,
whicheverishigher

Q: Anna Ferrer has been working as


bookkeeperatGreatFoods,Inc.,whichoperatesa
chain of highend restaurants throughout the
country, since 1970 when it was still a small
eatery at Binondo. In the early part of the year
2003, Anna, who was already 50 years old,
reported for work after a weeklong vacation in
herprovince.ItwastheheightoftheSARSscare,
andmanagementlearnedthatthefirstconfirmed
SARSdeathcaseinthePhils,abalikbayannurse
from Canada, is a townmate of Anna.
Immediately, a memorandum was issued by
managementterminatingtheservicesofAnnaon
thegroundthatsheisaprobablecarrierofSARS
virus and that her continued employment is
prejudicial to the health of her coEes. Is the
actiontakenbytheemployer(Er)justified?

A: The Ers act of terminating the employment of


Anna is not justified. There is no showing that said
employeeissickwithSARS,orthatsheassociatedor
had contact with the deceased nurse. They are
merely town mates. Furthermore, there is no
certificationbyacompetentpublichealthauthority
thatthediseaseisofsuchanatureorsuchastage
thatitcannotbecuredwithinaperiodof6months
evenwithpropermedicaltreatment.(Implementing
Rules, Book VI, Rule 1, Sec. 8, LC) (2004 Bar
Question)
Q:Discusstherulesonseparationpaywithregard
toeachcauseoftermination.
A:
CAUSEOF
TERMINATION

Automation

Redundancy

Retrenchment

90

SEPARATIONPAY
Equivalenttoatleast1month
pay or at least 1 month pay
for every year of service,
whicheverishigher
Equivalenttoatleast1month
pay or at least 1 month pay
for every year of service,
whicheverishigher
Equivalentto1monthpayor
at least month pay for
everyyearorservice

Note: A fraction of at least 6 months shall be


considered1wholeyear.

Thereisnoseparationpaywhentheclosureisdueto
anactofthegovt.

Q: What is the purpose of the 2 notices served to


theEeandDOLE1monthpriortotermination?

A:
1. TogivetheEessometimetopreparefor
the eventual loss of their jobs and their
corresponding income, look for other
employment and ease the impact of the
lossoftheirjobs.
2. TogiveDOLEtheopportunitytoascertain
the verity of the alleged cause of
termination.(Phil.Telegraph&Telephone
Corp. v. NLRC, G.R. No. 147002, April 15,
2005)

Note:NoticetoboththeEesconcernedandtheDOLE
aremandatoryandmustbewrittenandgivenatleast
1 month beforethe intendeddate of retrenchment
and the fact that the Ees were already on temporary
layoff at the time notice should have been given to
them is not an excuse to forego the 1month written
notice. (Sebuguero v. NLRC, G.R. No.115394, Sep. 27,
1995)

Q: DAP Corp. ceased its operation due to the


terminationofitsdistributionagreementwithIntl
Distributors Corp. which resulted in its need to
ceaseitsbusinessoperationsandtoterminatethe
employment of its Ees. Marcial et al. filed a
complaint for illegal dismissal and for failure to
give the Ees written notices regarding the
termination of their employment. On the other
hand, DAP claims that their Ees actually knew of
the termination therefore the written notices
were no longer required. Are written notices
dispensed with when the Ees have actual
knowledgeoftheredundancy?
A:TheEesactualknowledgeoftheterminationof
a companys distributorship agreement with
another company is not sufficient to replace the
formal and written notice required by law. In the

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
writtennotice,theEesareinformedofthespecific
date of the termination, at least a month prior to
thedateofeffectivity,togivethemsufficienttime
to make necessary arrangements. In this case,
notwithstanding the Ees knowledge of the
cancellationofthedistributorshipagreement,they
remained uncertain about the status of their
employment when DAP failed to formally inform
themabouttheredundancy.(DAPCorp.v.CA,G.R.
No.165811,Dec.14,2005)

1.

2.

b.Proceduraldueprocess

Note:Failuretocomplywiththereqtofthe
2 notices makes the dismissal illegal. The
procedure is mandatory. (Loadstar Shipping
Co.Inc.v.Mesano,G.R.No.138956,Aug.7,
2003)

Q: What are the 2fold requirements of a valid


dismissalforajustcause?
A:
1.
2.

Substantiveitmustbeforajustcause
Procedural there must be notice and
hearing

Q: What is the process to be observed by the


employer (Er) for termination of the employment
basedonanyofthejustcausesfortermination?
A:
1.

A written notice should be served to the


Ee specifying the ground/s for
termination and giving the said Ee
reasonableopportunitytoexplain.

Note: This first written notice must apprise


the Ee that his termination is being
considered due to the acts stated in the
notice. (Phil. Pizza Inc. v. Bungabong, G.R.
No.154315,May9,2005)

2.

3.

A hearing or conference should be held


during which the Ee concerned, with the
assistanceofcounsel,iftheEesodesires,
isgiventheopportunitytorespondtothe
charge, present his evidence and present
theevidencepresentedagainsthim.

A written notice of termination If


termination is the decision of the Er, it
shouldbeservedontheEeindicatingthat
upon due considerations of all the
circumstance, grounds have been
established to justify his termination, at
leastonemonthpriortohistermination.

Note:Singlenoticeofterminationdoesnot
comply with the requirements of the law.
(Aldeguer & Co.,Inc. vs. Honeyline Tomboc,
G.R.No.147633,July28,2008)

Q:Whatisthepurposeofnoticeandhearing?
A:

The reqt of notice is intended to inform


the Ee concerned of the Ers intent to
dismiss him and the reason for the
proposeddismissal
On the otherhand the reqt of hearing
affords the Ee the opportunityto answer
his Ers charges against him and
accordingly to defend himself there from
before dismissal is effected. (Salaw v.
NLRCG.R.No.90786Sep.27,1991)

Q: While it may be true that the Er enjoys wider


latitude of discretion in terminating employees
(Ees) should there exists valid and just cause,
would this be sufficient for the Er to depart from
givingtheEetherighttobeheard?
A: Art. 277(b) of the LC mandates that an Er who
seekstodismissanEemustaffordthelatterample
opportunitytobeheardandtodefendhimselfwith
theassistanceofhisrepresentativeifhesodesires.
Expounding on this provision, the SC held that
ample opportunity connotes every kind of
assistancethatmanagementmustaccordtheEeto
enable him to prepare adequately for his defense
including legal representation. (UBIX Corp. vs.
Bravo,G.R.No.177647,Oct.31,2008)
Q: What is included in the opportunity to be
heard?
A:Theissuewasaddressedinanenbancdecision
renderedbytheSupremeCourt.Witha141vote
the Court through Chief Justice Corona held as
follows:
a)

b)

c)

Ample opportunity to be heard in an


employee dismissal case means any
meaningful opportunity (verbal or
written)giventotheemployeetoanswer
thechargesagainsthimorherandsubmit
evidence in support of the defences,
whetherinahearing,conferenceorsome
otherfair,justandreasonableway.
A formal hearing or conference becomes
mandatory only when requested by the
employee in writing or substantial
evidentiary disputes exist or a company
rule or practice requires it, or when
similarcircumstancejustifyit.
The ample opportunity to be heard
standard in the Labor Code prevails over
the hearing or conference requirement

91

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Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


in the implementing rules and
regulations. (Perez v. PT&T, G.R. No.
152048,Apr.7,2009)
Q:Whohastheburdenofproof?
A:Theburdenofproofrestsupontheemployerto
showthatthedismissaloftheemployeeisforajust
cause,andfailuretodosowouldnecessarilymean
that the dismissal is not justified, consonant with
theconstitutionalguaranteeofsecurityoftenure.
Note: Due process refers to the process to be
followed; burden of proof refers to the amount of
prooftobeadduced.
Inmoneyclaims,theburdenofproofastotheamount
to be paid the Ees rests upon the Er since he is in
custodyofdocumentsthatwouldbeabletoprovethe
amountdue,suchasthepayroll.

Q:Whatisthedegreeofproof?

A: In administrative or quasijudicial proceedings,


substantial evidence is considered sufficient in
determiningthelegalityofanemployersdismissal
of an employee. (Pangasinan III Electric
Cooperative,Inc.v.NLRC,G.R.No.89878,Nov.13,
1992)
Q:PerezandDoriawereemployedbyPT&T.After
investigation, Perez and Doria were placed on
preventivesuspensionfor30daysfortheiralleged
involvement in anomalous transactions in the
shipping section. PT&T dismissed Perez and Doria
fromserviceforfalsifyingdocuments.Theyfileda
complaint for illegal suspension and illegal
dismissal.TheLAfoundthatthe30dayextension
of suspension and the subsequent dismissal were
bothillegal.TheNLRCreversedtheLAsdecision,it
ruledthatPerezandDoriaweredismissedforjust
cause, that they were accorded due process and
thattheywereillegallysuspendedforonly15days
(without stating the reason for the reduction of
the period of petitioners illegal suspension). On
appeal,CAheldthattheyweredismissedwithout
due process. Whether petitioners were illegally
dismissed?
A: Yes. The Er must establish that the dismissal is
forcauseinviewofthesecurityoftenurethatEes
enjoy under the Constitution and the LC. PT&T
failedtodischargethisburden.PT&Tsillegalactof
dismissingPerezandDoriawasaggravatedbytheir
failure to observe due process. To meet the reqts
ofdueprocessinthedismissalofanEe,anErmust
furnish the worker with 2 written notices: (1) a
written notice specifying the grounds for
termination and giving to said Ee a reasonable

92

opportunity to explain his side and (2) another


written notice indicating that, upon due
consideration of all circumstances, grounds have
been established to justify the Er's decision to
dismisstheEe.
There is however, no need for a hearing or
conference. To be heard does not mean verbal
argumentation alone inasmuch as one may be
heard just as effectively through written
explanations, submissions or pleadings. In other
words, the existence of an actual, formal trial
typehearing,althoughpreferred,isnotabsolutely
necessary to satisfy the employees right to be
heard. (Perez. v. Phil. Telegraph and Telephone
Company,G.R.No.152048,April7,2009)
Q: What are the guidelines in determining
whetherpenaltyimposedonEeisproper?
A:
1.
2.
3.
4.
5.

Gravityoftheoffense
PositionoccupiedbytheEe
Degreeofdamagetotheemployer(Er)
Previousinfractionsofthesameoffense
Lengthofservice(ALUTUCPv.NLRC,G.R.
No.120450,Feb.10,1999;PALv.PALEA,
G.R.No.L24626,June28,1974)

Q: Felizardo was dismissed from Republic Flour


MillsSelectaicecreamCorporationfordishonesty
and theft of company property for bringing out a
pair of boots, 1 piece aluminum container and 15
pieces of hamburger patties. Is the penalty of
dismissal commensurate with the offense
committed?
A: There is no question that the employer has the
inherent right to discipline its Ees which includes
therighttodismiss.Howeverthisrightissubjectto
thepolicepoweroftheState.InthiscasetheCourt
finds that the penalty imposedupon Felizardo was
not commensurate with the offense committed
consideringthevalueofthearticleshepilferedand
thefactthathehadnopreviousderogatoryrecord
during his 2 years of employment in the company.
Moreover,itshouldalsobetakenintoaccountthat
FelizardowasnotamanagerialorconfidentialEein
whomgreatertrustisreposedbymanagementand
from whom greater fidelity to duty is
correspondinglyexpected.(ALUTUCPv.NLRC,G.R.
No.120450,Feb.10,1999)
(1)AgabonDoctrine
Q:Ifthedismissalisforajustorauthorizedcause
buttherequirementofdueprocessofnoticeand
hearing were not complied with should the
dismissalbeheldillegal?

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
A: No, In Agabon v. NLRC, G.R. No. 158693, Nov.
17,2004,itwasheldthatwhendismissalisforjust
or authorized cause but due process was not
observed,thedismissalshouldbeupheld.

However, the employer (Er) should be held liable


for noncompliance with the procedural reqts of
dueprocess(e.g.damages).TheAgabonrulingwas
modifiedbyJAKAFoodProcessingv.Pacot(G.R.No.
515378,Mar.28,2005)whereitwasheldthat:

1. Ifbasedonjustcause(Art.282)buttheEr
failedtocomplywiththenoticereqt,the
sanction to be imposed upon him should
be tempered because the dismissal
process was, in effect, initiated by an act
imputabletotheEe;and
2. If based on authorized causes (Art. 283)
buttheErfailedtocomplywiththenotice
reqt, the sanction should be stiffer
because the dismissal process was
initiated by Ers exercise of his
managementprerogative.

c.Reliefsforillegaldismissal

(1)Reinstatementaspect
Q:Whataretheremediesavailabletoanillegally
dismissedemployee(Ee)?

A:AnEewhoisunjustlydismissedfromworkshall
byentitledto:
1. Reinstatement without loss of seniority
rightsand
2. Full backwages. (Sec. 3, Rule I, Book VI,
IRR)
3. Separationpayinlieuofreinstatement,if
thelatterisnolongerfeasible

Q:Whatisreinstatement?

A:Itistherestorationoftheemployeetothestate
from which he has been unjustly removed or
separatedwithoutlossofseniorityrightsandother
privileges.

(a)Immediatelyexecutory:actualreinstatementand
payrollreinstatement
Q:Whataretheformsofreinstatement?
A:
1.
2.

Actual or physical the employee (Ee) is


admittedbacktowork
PayrolltheEeismerelyreinstatedinthe
payroll

Note:AnorderofreinstatementbytheLAisnotthe
same as actual reinstatement of a dismissed or
separated Ee. Thus, until the Er continuously fails to
actually implement the reinstatement aspect of the
decision of the LA, their obligation to the illegally
dismissedEe,insofarasaccruedbackwagesandother
benefitsareconcerned,continuestoaccumulate.Itis
only when the illegally dismissed Ee receives the
separation pay (in case of strained relations) that it
could be claimed with certainty that the ErEe
realtionship has formally ceased thereby precluding
thepossibilityofreinstatement.Inthemeantime,the
illegally dismissed Ees entitlement to backwages, 13th
month pay, and other benefits subsists. Until the
paymentofseparationpayiscarriedout,theErshould
notbeallowedtoremainunpunishedforthedelay,if
not outright refusal, to immediately execute the
reinstatementaspectoftheLAsdecision.
Further, the Er cannot refuse to reinstate the illegally
dismissed Ee by claiming that the latter had already
foundajobelsewhere.Minimumwageearnersareleft
with no choice after they are illegally dismissed from
their employment, but to seek new employment in
ordertoearnadecentliving.Surely,wecouldnotfault
them for their perseverance in looking for and
eventually securing new employment opportunities
instead of remaining idle and waiting the outcome of
the case. (TriadSecurity & AlliedServices, Inc. etal v.
Ortega,G.R.No.160871,Feb.6,2006).

Q:DistinguishArts.223from279oftheLC?
A:
Art.279
Presupposes that the
judgment has already
become
final
and
executory.

Consequently, there is
nothing left to be done
except the execution
thereof.

Art.223
Maybeavailedofassoon
as the labor arbiter
renders a judgment
declaring
that
the
dismissal of the Ee is
illegal and ordering said
reinstatement. It may be
availed of even pending
appeal

Note: An award or order for reinstatement is self


executory.Itdoesnotrequiretheissuanceofawritof
execution.(PioneerTexturizingCorp.v.NLRC,G.R.No.
118651,Oct.16,1997)

Q:PALdismissedGarcia,forviolatingPALsCode
of Discipline for allegedly sniffing shabu in PALs
Technical Center Toolroom Section. Garcia then
filed for illegal dismissal and damages where the
Labor Arbiter (LA) ordered PAL to immediately
reinstate Garcia. On appeal, the NLRC reversed
the decision and dismissed Garcias complaint for
lackofmerit.Garciasmotionforreconsideration
wasdeniedbytheNLRC.Itaffirmedthevalidityof
the writ and the notice issued by the LA but
suspended and referred the action to the

93

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VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


Rehabilitation Receiver for appropriate action.
WhetherGarciamaycollecttheirwagesduringthe
period between the LAs order of reinstatement
pendingappealandtheNLRCdecisionoverturning
thatoftheLA?
A: Par. 3 of Art. 223 of the LC provides that the
decision of the LA reinstating a dismissed or
separatedEe,insofarasthereinstatementaspectis
concerned, shall immediately be executory,
pendingappeal.
Even if the order of reinstatement of the LA is
reversed on appeal, it is obligatory on the part of
the Er to reinstate and pay the wages of the
dismissed Ee during the period of appeal until
reversal by the higher court. On the other hand, if
theEehasbeenreinstatedduringtheappealperiod
and such reinstatement order is reversed with
finality, the Ee is not required to reimburse
whatever salary he received for he is entitled to
such, more so if he actually rendered services
duringtheperiod.
In other words, a dismissed Ee whose case was
favorably decided by the LA is entitled to receive
wagespendingappealuponreinstatement,whichis
immediatelyexecutory.Unlessthereisarestraining
order,itisministerialupontheLAtoimplementthe
order of reinstatement and it is mandatory on the
Er to comply therewith. (Garcia vs. PAL, G.R. No.
164856,Jan.20,2009)
Q: What is the effect of the reversal of LAs
decisiontothereinstatedemployee(Ee)
A: If the decision of the LA is later reversed on
appeal upon the finding that the ground for
dismissal is valid, then the Er has the right to
require the dismissed Ee on payroll reinstatement
to refund the salaries he/she received while the
case was pending appeal, or it can be deducted
from the accrued benefits that the dismissed Ee
was entitled to receive from the employer under
existing laws, CBA provisions, and company
practices.However,iftheEewasreinstatedtowork
during the pendency of the appeal, then the Ee is
entitled to receive the compensation received for
actual services rendered without need of refund
(Citibank v. NLRC, G.R. No. 14273233, Dec. 4,
2007).
Q: May a court order the reinstatement of a
dismissedemployee(Ee)eveniftheprayerofthe
complaintdidnotincludesuchrelief?
A:Yes.SolongasthereisafindingthattheEewas
illegally dismissed, the court can order the
reinstatement of an Ee even if the complaint does

94

not include a prayer for reinstatement, unless, of


coursetheEehaswaivedhisrighttoreinstatement.
Bylaw,anEewhoisunjustlydismissedisentitledto
reinstatement among others. The mere fact that
the complaint did not pray for reinstatement will
not prejudice the Ee, because technicalities of law
and procedure are frowned upon in labor
proceedings (Pheschem Industrial Corp. v. Moldez,
G.R.No.1161158,May9,2005).
Q: What happens if there is an Order of
Reinstatement but the position is no longer
available?
A: The employee (Ee) should be given a
substantiallyequivalentposition.Ifnosubstantially
equivalent position is available, reinstatement
shouldnotbeorderedbecausethatwouldineffect
compeltheemployertodotheimpossible.Insuch
a situation, the Ee should merely be given a
separation pay consisting of 1month salary for
every year of service (Grolier Intl Inc. v. ELA, G.R.
No.83523,Aug.31,1989)
(2)Separationpayinlieuofreinstatement
Q:Howcanseparationpaybeviewed?
A: Under present laws and jurisprudence,
separationpaymaybeviewedin4ways:
1.

2.

3.

4.

Inlieuofreinstatementinillegaldismissal
cases,whereEeisorderedreinstatedbut
reinstatementisnotfeasible.
As Ers statutory obligation in cases of
legal termination due to authorized
causesunderArt.283and284oftheLC.
Asfinancialassistance,asanactofsocial
justiceandevenincaseoflegaldismissal
underArt.282oftheLC.
AsemploymentbenefitgrantedinCBAor
companypolicy.(Poquiz,2005)

Q: Is an illegally dismissed employee entitled to


reinstatementasamatterofright?
A:GR:Yes.

XPNS: Proceeds from an illegal dismissal


whereinreinstatementisorderedbutcannotbe
carriedoutasinthefollowingcases:
1.

Reinstatementcannotbeeffectedinview
ofthelongpassageoftimeorbecauseof
therealitiesofthesituation.
2. It would be inimical to the employers
interest.Whenreinstatementisnolonger
feasible.

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
3.
4.
5.
6.

7.

Whenitwillnotservethebestinterestof
thepartiesinvolved.
Company will be prejudiced by
reinstatement.
Whenitwillnotserveaprudentpurpose.
When there is resultant strained relation
(applies to both confidential and
managerialemployees(Ees)only).
When the position has been abolished
(applies to both managerial, supervisory
andrankandfileEes).

Note:Insuchcases,itwouldbemoreprudenttoorder
payment of separation pay instead of reinstatement.
(Quijano v. Mercury Drug Corporation, G.R. No.
126561,July8,1998)

Q: Respondents are licensed drivers of public


utility jeepneys owned by Moises Capili. When
Capili assumed ownership and operation of the
jeepneys, the drivers were required to sign
individual contracts of lease of the jeepneys. The
drivers gathered the impression that signing the
contract was a condition precedent before they
couldcontinuedriving.Thedriversstoppedplying
their assigned routes and a week later filed with
the Labor Arbiter a complaint for illegal dismissal
praying not for reinstatement but for separation
pay. Are the respondents entitled to separation
pay?

A:No.Whendriversvoluntarilychosenottoreturn
to work anymore, they must be considered as
having resigned from their employment. The
common denominator of those instances where
paymentofseparationpayiswarrantedisthatthe
employeewasdismissedbytheemployer.(Capiliv.
NLRC,G.R.117378,Mar.26,1997)

Q: Two groups of seasonal workers claimed


separation benefits after the closure of Phil.
Tobacco processing plant in Balintawak and the
transfer of its tobacco operations to Candon,
Ilocos Sur. Phil. Tobacco refused to grant
separation pay to the workers belonging to the
first batch (Lubat group), because they had not
been given work during the preceding year and,
hence,werenolongerinitsemployatthetimeit
closed its Balintawak plant. Likewise, it claims
exemption from awarding separation pay to the
secondbatch(Lurisgroup),becausetheclosureof
its plant was due to "serious business losses," as
defined in Art. 283 of the LC. Both labor agencies
heldthattheLurisandLubatgroupswereentitled
to separation pay equivalent to 1/2 month salary
for every of service, provided that the Ee worked
atleast1monthinagivenyear.Istheseparation
pay granted to an illegally dismissed Ee the same

asthatprovidedunderArt.283oftheLCincaseof
retrenchmenttopreventlosses?

A: No. The separation pay awarded to employees


duetoillegaldismissalisdifferentfromtheamount
ofseparationpayprovidedforinArt.283oftheLC.
Prescinding from the above, Phil. Tobacco is liable
for illegal dismissal and should be responsible for
the reinstatement of the Lubat group and the
payment of their backwages. However, since
reinstatementisnolongerpossibleasPhil.Tobacco
have already closed its Balintawak plant, members
of the said group should instead be awarded
normal separation pay (in lieu of reinstatement)
equivalenttoatleastonemonthpay,oronemonth
payforeveryyearofservice,whicheverishigher.It
must be stressed that the separation pay being
awarded to the Lubat group is due to illegal
dismissal;hence,itisdifferentfromtheamountof
separationpayprovidedforinArticle283incaseof
retrenchmenttopreventlossesorincaseofclosure
orcessationoftheErsbusiness,ineitherofwhich
theseparationpayisequivalenttoatleastone(1)
month or onehalf (1/2) month pay for every year
ofservice,whicheverishigher.(Phil.TobaccoFlue
Curing & Redrying Corp. v. NLRC, G.R. No. 127395,
Dec.10,1998)

(a)Strainedrelationrule

Q:Whatisthedoctrineofstrainedrelations?
A:WhentheErcannolongertrusttheEeandvice
versa, or there were imputations of bad faith to
each other, reinstatement could not effectively
serve as a remedy. This doctrine applies only to
positionswhichrequiretrustandconfidence(Globe
Mackayv.NLRC,G.R.No.82511,March3,1992).
Note: Under the circumstances where the
employment relationship has become so strained to
preclude a harmonious working relationship and that
all hopes at reconciliation are naught after
reinstatement, it would be more beneficial to accord
theEebackwagesandseparationpay.

Q: What must be proven before the principle of


strained relations can be applied to a particular
case?

A:
1. The Ee concerned occupies a position
whereheenjoysthetrustandconfidence
ofhisEr;and
2. That it is likely that if reinstated, an
atmosphereofantipathyandantagonism
may be generated as to adversely affect
the efficiency and productivity of the Ee
concerned. (Globe Mackay Cable & Wire

95

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Facultad de Derecho Civil
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UST GOLDEN NOTES 2011


Corp. v. NLRC G.R. No. 82511, Mar. 3,
1992)

Q: Does the doctrine of strained relationship


alwaysbarreinstatementinallcases?

A:No.Thedoctrineshouldbeappliedonacaseto
casebasis,basedoneachcasespeculiarconditions
and not universally. Otherwise, reinstatement can
never be possible simply because some hostility is
invariably engendered between the parties as a
result of litigation. That is human nature. (Anscor
Transportv.NLRC,G.R.No.85894,Sept.28,1990)

Besides, no strained relations should arise from a


valid and legal act of asserting one's right;
otherwiseanEewhoshallasserthisrightcouldbe
easilyseparatedfromtheservice,bymerelypaying
his separation pay on the pretext that his
relationship with his employer (Er) had already
become strained. (Globe Mackay Cable & Wire
Corp.v.NLRC,G.R.No.82511,Mar.3,1992)

Q: Differentiate Art. 279 of the LC from Sec. 7 of


R.A.10022.

A: The payment of backwages is generally granted


on the ground of equity. It is a form of relief that
restorestheincomethatwaslostbyreasonofthe
unlawfuldismissal;thegrantthereofisintendedto
restoretheearningsthatwouldhaveaccruedtothe
dismissedEeduringtheperiodofdismissaluntilitis
determinedthattheterminationofemploymentis
for a just cause. It is not private compensation or
damages but is awarded in furtherance and
effectuationofthepublicobjectiveoftheLC.Noris
it a redress of a private right but rather in the
nature of a command to the employer to make
publicreparationfordismissinganEeeitherdueto
the formers unlawful act or bad faith. (Tomas
Claudio Memorial College Inc., v. CA, G.R. No.
152568,Feb.16,2004)
Q: What is theperiod coveredby the payment of
backwages?
A: The backwages shall cover the period from the
dateofdismissaloftheemployeeuptothedateof:
1.
2.

A:

Actual reinstatement, or if reinstatement


isnolongerfeasible
Finality of judgment awardingbackwages
(Buhainv.CA,G.R.143709,July2,2002)

Art.279,LC(Local
Workers)
Reinstatement

Fullbackwagesfromthe
timeofhiscompensation
waswithheldfromhim
uptothetimeofhis
actualreinstatement.

Sec.7,RA10022
(MigrantWorkers)
FullReimbursementofhis
placementfeewith
interestof12%per
annum.

(3)Backwages

Note: The backwages to be awarded should not be


diminished or reduced by earnings elsewhere during
the period of his illegal dismissal. The reason is that
the Ee while litigating the illegality of his dismissal
must earn a living to support himself and his family.
(Bustamantev.NLRC,G.R.No.111651,Mar.15,1996;
Buenviajev.CA,G.R.No.147806,Nov.2002)

(a)Componentsoftheamountofbackwages

Q: What is included in the computation of


backwages?

Q:Whatarebackwages?

A: It is the relief given to an employee (Ee) to


compensate him for the lost earnings during the
period of his dismissal. It presupposes illegal
termination.

A:Theycoverthefollowing:

Note: Entitlement to backwages of the illegally


dismissed Ee flows from law. Even if he does not ask
forit,itmaybegiven.Thefailuretoclaimbackwages
in the complaint for illegal dismissal is a mere
procedural lapse which cannot defeat a right granted
under substantive law. (St. Michaels Institute v.
Santos,G.R.No.145280,Dec.4,2001)

Q:Whatisthebasisofawardingbackwagestoan
illegallydismissedemployee(Ee)?

1.
2.
3.

Transportation
and
emergency
allowances
Vacation or service incentive leave and
sickleave
th
13 monthpay

Note: Facilities such as uniforms, shoes, helmets and


ponchosshouldnotbeincludedinthecomputationof
backwagesbecausesaiditemsaregivenforfree,tobe
useonlyduringofficialtourofdutynotforprivateor
personaluse.

The award of backwages is computed on the basis of


30day month. (JAM Trans Co. v. Flores, G.R. No. L
63555,Mar.19,1993)

Q:Whatdoesthetermfullbackwagesmean?

96

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

TERMINATION OF EMPLOYMENT
A:TheLaborCodeasamendedbyR.A.6715points
to "full backwages" as meaning exactly that, i.e.,
without deducting from backwages the earnings
derived elsewhere by the concerned Ee during the
periodofhisillegaldismissal.(Buenviajev.CA,G.R.
147806,Nov.12,2002)
The underlying reason for this ruling is that the
employee, while litigating the legality (illegality) of
his dismissal, must still earn a living to support
himselfandfamily,whilefullbackwageshavetobe
paidbytheemployeraspartofthepricehehasto

pay for illegally dismissing his Ee. (Bustamante v.


NLRC,G.R.No.111651,Mar.15,1996)
Q: Is an Ee entitled to backwages even after the
closureofthebusiness?

A: Yes. The closure of the business rendered the


reinstatement of complainant to her previous
position impossible but she is still entitled to the
paymentofbackwagesuptothedateofdissolution
orclosure.Anemployerfoundguiltyofunfairlabor
practiceindismissinghisEemaynotbeorderedto
pay backwages beyond the date of closure of
businesswheresuchclosurewasduetolegitimate
business reasons and not merely an attempt to
defeat the order of reinstatement. (Pizza Inn v.
NLRC,G.R.No.74531,June28,1988)

Q:Whatarethecircumstancesthatpreventaward
ofbackwages?

A:
1. Dismissalforcause
2. Death, physical or mental incapacity of
theemployee
3. Businessreverses
4. Detentioninprison

(4)ConstructiveDismissal
Q:Whatisconstructivedismissal?
A:Aninvoluntaryresignationresortedtowhen:
1.
2.
3.

continued
employment
becomes
impossible,unreasonable,orunlikely
thereisademotioninrankordiminution
inpayor
clear discrimination, insensibility or
disdain by an Er becomes unbearable to
the Ee. (Leonardo v. NLRC, G.R.
No.125303,June16,2000)

Note:Thereisnoformaldismissal.TheEeisplacedin
a situation by the Er such that his continued
employmenthasbecomeunbearable.Abandonmentis
incompatiblewithconstructivedismissal.

Q: Reynaldo was hired by Geminilou Trucking


Service(GTS)asatruckdrivertohaulanddeliver
productsofSanMiguelPureFoodsCompany,Inc.
HewaspaidP400pertripandmade4tripsaday.
HeclaimedthathewasrequestedbyGTStosigna
contract entitled Kasunduan Sa PagUpa ng
Serbisyowhichherefusedashefoundittoalter
hisstatusasaregularEetomerelycontractual.He
averred that on account of his refusal to sign the
Kasunduan, his services were terminated
promptinghimtofileacomplaintbeforetheNLRC
for constructive dismissal against the GTS. Would
Reynaldos refusal to sign the Kasunduan
adequatelysupporthisallegationofconstructively
dismissal?
A:No.Thetestofconstructivedismissaliswhether
a reasonable person in the employees (Ee's)
position would have felt compelled to give up his
job under the circumstances. In the present case,
the records show that the lone piece of evidence
submittedbyReynaldotosubstantiatehisclaimof
constructive dismissal is an unsigned copy of the
Kasunduan. This falls way short of the required
quantumofproofwhichissubstantialevidence,or
suchrelevantevidenceasareasonablemindmight
accept as adequate to support a conclusion.
Reynaldo was not dismissed, but that he simply
failedtoreportforworkafteranaltercationwitha
fellow driver. (Madrigalejos vs. Geminilou Trucking
Service,G.R.No.179174,Dec.24,2008)
Q: Flores, a conductor of JAM TransportationCo.,
Inc., had an accident where he had to be
hospitalizedforanumberofdays.Uponreporting
back to the company he was told to wait. For
severaldaysthiscontinuedandhewaspromiseda
routeassignmentwhichdidnotmaterialize.Upon
speaking to Personnel Manager Medrano, he was
toldthathewillbeacceptedbacktoworkbutasa
newemployee.Floresrejectedtheofferbecauseit
wouldmeanforfeitureofhis18yearsofserviceto
the company. Is the offer for reinstatement as a
newemployee(Ee)aconstructivedismissal?
A: Yes. Flores reemployment as a new Ee would
be very prejudicial to him as it would mean a
demotion in rank and privileges, retirement
benefitsashisprevious18yearsofservicewiththe
company would simply be considered as non
existent.Itamountstoconstructivedismissal.(JAM
Transportation Co., Inc. v. Flores, G.R. No. 82829,
Mar.19,1993)
Q:Quinanolawastransferredfromthepositionof
Executive Secretary to the Executive Vice
PresidentandGeneralManagertotheProduction
DeptasProductionSecretary.Quinanolarejected
the assignment and filed a complaint for illegal

97

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Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
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UST GOLDEN NOTES 2011


dismissal due to constructive dismissal. Did the
transfer of Quinanola amount to constructive
dismissal?

This period is intended only for the purpose of


investigating the offense to determine whether he
istobedismissedornot.Itisnotapenalty.

A: No. Quinanolas transfer was not unreasonable


since it did not involve a demotion in rank nor a
changeinherplaceofworknoradiminutioninpay,
benefits and privileges. It did not constitute a
constructivedismissal.Furthermore,anemployees
securityoftenuredoesnotgivehimavestedright
inhispositionaswoulddeprivethecompanyofits
prerogative to change his assignment or transfer
himwherehewillbemostuseful.(PhilippineJapan
Active Carbon Corp. v. NLRC, G.R. No. 83239, Mar.
8,1989)

Note: The Er may continue the period of preventive


suspensionprovidedthathepaysthesalaryoftheEe.

Q: Sangil was a utility man/assistant steward of


thepassengercruisevesselCrownodysseyundera
oneyear contract. Sangil suffered head injuries
after an altercation with a Greek member of the
crew. He informed the captain that he no longer
intends to return aboard the vessel for fear that
further trouble may erupt between him and the
otherGreekcrewmembersoftheship.WasSangil
constructivelydismissed?
A:Yes.Thereisconstructivedismissalwheretheact
of a seaman in leaving ship was not voluntary but
was impelled by a legitimate desire for self
preservation or because of fear for his life
Constructive dismissal does not always involve
diminutioninpayorrankbutmaybeinferredfrom
an act of clear discrimination, insensibility or
disdain by an Er may become unbearable on the
partoftheEethatitcouldforecloseanychoiceby
him except to forego his continued employment.
(Sunga Ship Management Phils., Inc. v. NLRC, G.R.
No.119080,April14,1998)
(5)PreventiveSuspension
Q:Whatispreventivesuspension?
A:Duringthependencyoftheinvestigation,theEr
may place the Ee under preventive suspension
leading to termination when there is an imminent
threatorareasonablepossibilityofathreattothe
lives and properties of the Er, his family and
representativesaswellastheoffenderscoworkers
bythecontinuedserviceoftheEe.
Q:Whatisthedurationofpreventivesuspension?
A:Itshouldnotlastformorethan30days.TheEe
shouldbemadetoresumehisworkafter30days.It
can be extended provided the Ees wages are paid
afterthe30dayperiod.

98

If more than 1 month, the Ee must actually be


reinstated or reinstated in the payroll. Officers are
liableonlyifdonewithmalice.

Q:CantorandPepitowerepreventivelysuspended
pending application for their dismissal by Manila
Doctors Hospital after being implicated by one
Macatubal when they refused to help him when
he was caught stealing xray films from the
hospital.WasthepreventivesuspensionofCantor
andPepitoproper?
A: Where the continued employment of an Ee
posesaseriousandimminentthreattothelifeand
propertyoftheemployeroronhiscoEes,theEes
preventive suspension is proper. In this case, no
suchthreattothelifeandpropertyoftheErorof
their coEes is present and they were merely
implicated by the Macatubal. (Manila Doctors
Hospitalv.NLRC,G.R.No64897,Feb.28,1985)
(6)Quitclaim
Q:Whatisaquitclaim?

A: It is a document executed by an employee in


favor of the employer preventing the former from
filing any further money claim against the latter
arisingfromemployment.
Q:Whataretheelementsofavalidquitclaim?
A:
1.

Voluntarily entered into with full


understanding of what the employee is
doing
2. Representsareasonablesettlement

Q:Whatconstitutesreasonablesettlement?
A: Reasonable settlement requires that the
consideration for the quitclaim is credible and
reasonable.(Periquetv.NLRC,G.R.No.91298,June
22,1990)
Q: Is dire necessity a ground to nullify a
quitclaim?
A: Dire necessity is not an acceptable ground for
annulling the releases, especially since it has not
beenshownthattheemployeeshadbeenforcedto
executethem.Ithasnotevenbeenproventhatthe
considerations for the quitclaims were

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TERMINATION OF EMPLOYMENT
unconscionably low and that the petitioners had
beentrickedintoacceptingthem.Furthermore,no
deception has been established on the part of the
employer that would justify the annulment of the
employees quitclaim. (Veloso v. DOLE, G.R. No.
87297,August5,1991.)

A: Itistheresultofabilateralactoftheparties,a
voluntary agreement between the employer and
the employees whereby the latter after reaching a
certain age agrees and/or consents to sever his
employment with the former. (Soberano v. Sec. of
Labor, G.R. Nos. L4375356 and L50991, Aug. 29,
1980)

(7)Terminationofemploymentbyemployee
Q:Howcananemployee(Ee)terminatehisservice
withhisemployer(Er)?

A:
1. Without just cause by serving written
notice on the Er at least 1 month in
advance. The Er upon whom no such
notice was served may hold the Ee liable
fordamages.

2. WithjustcauseanEemayputanendto
employment without serving any notice
on the Er for any of the following just
causes:
a. Serious insult by the Er or his
representative on the hour and
personoftheEe
b. Inhuman and unbearable treatment
accorded the Ee by the Er or his
representative
c. Commissionofacrimeoroffenseby
the Er or his representative against
the person of the Ee or any of the
immediatemembersofhisfamily
d. Othercausesanalogoustoanyofthe
foregoing

Q:Whenisemploymentnotdeemedterminated?

A:
1. Bona fide suspension of the operation of
abusinessorundertakingforaperiodnot
exceeding6months,or
2. The fulfillment by the Ee of a military or
civic duty shall not terminate
employment.

Note:Inallsuchcases,theErshallreinstatetheEeto
hisformerpositionwithoutlossofseniorityrightsifhe
indicateshisdesiretoresumehisworknotlaterthan1
monthfromtheresumptionofoperationsofhisEror
fromhisrelieffromthemilitaryorcivicduty.(Art.286)

3.RETIREMENTPAYLAW

a.Coverage,Exclusionsfromcoverage,Components
ofretirementpay
Q:Whatisretirement?

Q:Whatarethekindsofretirementschemes?

A:
1. Compulsoryandcontributoryinnature;
2. One set up by the agreement between
theemployer(Er)andemployees(Ees)in
the CBA or other agreements between
them (other applicable employment
contract);
3. One that is voluntarily given by the Er,
expressly as announced company policy
or impliedly as in the failure to contest
the Ees claim for retirement benefits.
(Marilyn Odchimar Gertach v. Reuters
Limited, Phils., G.R. No. 148542, Jan. 17,
2005)

Q: Who are covered by the LC provisions on


retirement?

A:
GR:Allemployees(Ees)intheprivatesector:
1. Regardless of their position, designation
orstatus;and
2. Irrespectiveofthemethodbywhichtheir
wages are paid. (Sec.1, Rule II, Book VI,
IRR)

XPN:
1. Ees of the National Govt and its political
subdivisions,includingGOCCs(iftheyare
coveredbytheCivilServiceLaw)
2. Domestic helpers and persons in the
personalserviceofanother
3. Ees of retail, service, and agricultural
establishments or operations employing
notmorethan10Ees(Sec.2,RuleII,Book
VI,IRR)

Q:Whatistheretirementage?
A:Itistheageofretirementthatisspecifiedinthe:
1. CBA;or
2. Employmentcontract;or
3. Retirement plan (Sec. 3, Rule II, Book VI,
IRR).
4. Optional retirement age for underground
mining employees: 5060 years provided
theyhaveatleastservedforaperiodof5
years.(Art.285asamendedbyR.A.8558)

99

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UST GOLDEN NOTES 2011


Q:Whatistheretirementageintheabsenceofa
retirementplanorotherapplicableagreement?

A:
1. Optional60yearsold/5yearsinservice
(includes authorized absences, vacations,
regular holidays, mandatory military or
civicservice)

Note:Theoptiontoretireuponreachingthe
ageof60yearsormorebutnotbeyond65
istheexclusiveprerogativeoftheemployee
(Ee)ifthereisnoprovisiononretirementin
a CBA or any other agreement or if the
employer (Er) has no retirement plan. (R.A.
7641;Capiliv.NLRC,G.R.No.117378,Mar.
26,1997)

2.

Compulsory 65 years old, regardless of


yearsofservice(companyisnotboundto
dismissEe;itisautomatic).(Sec.4,RuleII,
BookVI,IRR)

Note: Retirement benefits, where not


mandated by law, may be granted by
agreement of the Ees and their Er or as a
voluntary act on the part of the Er.
Retirement benefits are intended to help
theEeenjoytheremainingyearsofhislife,
lessening the burden of worrying for his
financialsupport,andareaformofreward
forhisloyaltyandservicetotheEr(Aquino
v.NLRC,G.R.No.87653,Feb.11,1992)

Q: Is compulsory retirement age below 60


allowed?
A: Yes. Art. 287 permits Er and Ee to fix the
applicableretirementageatbelow60.Thesameis
legalandenforceablesolongasthepartiesagreeto
begovernedbysuchCBA.(PantrancoNorthExpress
v.NLRC,G.R.No.95940,July24,1996)
Q: What is the rule for extension of service of
retiree upon his reaching the compulsory
retirementage?
A:Uponthecompulsoryretirementofanemployee
(Ee) or official in the public or private service, his
employment is deemed terminated. The matter of
extension of service of such Ee or official is
addressed to the sound discretion of the Er. (UST
FacultyUnionv.NLRC,G.R.No.89885,Aug.6,1990)
Q:Whatareretirementbenefits?
A: In the absence of an applicable agreement or
retirement plan A retiree is entitled to a
retirement pay equivalent to at least month
salaryforeveryyearofservice,afractionofatleast

100

6 months being considered as 1 whole year.


(Sec.5.1,RuleII,BookVI,IRR)
Q: What comprises month salary or retirement
pay?
A:Unlesspartiesprovideforbroaderinclusions:
1. 15dayssalarybasedonlatestsalaryrate;
2. Cash equivalent of not more than 5 days
of service incentive leaves (22.5/year of
service)
3. 1/12ofthe13thmonthpay
4. Allotherbenefitsasmaybeagreedupon
by the employer and employee (Ee).
(Sec.5.2,RuleII,BookVI,IRR)

Note:UnderSec.26ofR.A.No.4670,otherwiseknown
as Magna Carta for Public School Teachers, public
school teachers having fulfilled the age and service
reqtsoftheapplicableretirementlawsshallbegiven
one range salary raise upon the retirement, which
shallbethebasisofthecomputationofthelumpsum
oftheretirementpayandmonthlybenefitthereafter.

Q: Can Art. 287 of the LC (on retirement) as


amendedbyR.A.7641beappliedretroactively?

A:Yes,provided:
1. The claimant for retirement benefits was
stilltheemployeeoftheemployeratthe
timethestatutetookeffect;and
2. The claimant was in compliance with the
reqts for eligibility under the statute for
suchretirementbenefits.(PSVSIAv.NLRC,
G.R.No.115019,April14,1997)

Q: Are the provisions of the retirement plan


bindingaspartoftheemploymentcontract?
A: Yes. The retirement plan forms part of the
employmentcontractsinceitismadeknowntothe
Ees and accepted by them, and such plan has an
expressprovisionthatthecompanyhasthechoice
to retire an Ee regardless of age, with 20 years of
service, said policy is within the bounds
contemplated by the LC. Moreover, the manner of
computationofretirementbenefitsdependsonthe
stipulation provided in the company retirement
plan. (Progressive Devt Corporation v. NLRC, G.R.
No.138826,Oct.30,2000)
Q: Rivera was employed as senior manufacturing
pharmacistbyUNILAB.ShelaterbecameDirector
of UNILAB's Manufacturing Division. UNILAB
adopted a comprehensive retirement plan (the
plan or retirement plan) supported by a
retirement fund. A member is compulsorily
retireduponreachingage60orhascompleted30

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TERMINATION OF EMPLOYMENT
years of service, whichever comes first. Rivera
completed30yearsofserviceandUNILABretired
herpursuanttothetermsoftheplan,shereceived
the benefits in 88. At Rivera's request, UNILAB
allowedhertocontinueworkingforthecompany.
She continued working beyond the compulsory
separation from service that resulted from her
retirement.From1993to1994,Riveraservedasa
personal consultant under contract for UNILABs
sister companies which assigned Rivera to render
service involving UNILAB.In 1992, the company
amended its retirement plan, providing, among
others, for an increase in retirement benefits.
Rivera asked that her retirement benefits be
increased in accordance with the amended
retirementprogram.WhetherRiveraisentitledto
theadditionalretirementbenefitsoftheamended
retirementplan?
A: No. Whether these terms included renewed
coverage in the retirement plan is an evidentiary
gap that could have been conclusively shown by
evidenceofdeductionsofcontributionstotheplan
after1988.Twoindicators,however,tellusthatno
suchcoveragetookplace.Thefirstisthattheterms
of the retirement plan, before and after its 1992
amendment,continuedtoexcludethosewhohave
rendered 30 years of service or have reached 60
years of age. Therefore, the plan could not have
coveredher.Thesecondistheabsenceofevidence
of, or of any demand for, any reimbursement of
whatRiverawouldhavepaidascontributionstothe
plan had her coverage and deductions continued
after 1988. Thus, the Court concludes that her
renewed service did not have the benefit of any
retirement plan coverage. (Rivera v. United
Laboratories,Inc.,G.R.No.155639,April22,2009)

Q:Isaspecialretirementplandifferentfromthose
contemplatedundertheLCasagreeduponbythe
partiesvalid?

A:Yes.Apilotwhoretiresafter20yearsofservice
or after flying 20,000 hours would still be in the
prime of his life and at the peak of his career,
comparedtoonewhoretiresattheageof60years
old. Based on this peculiar circumstance that PAL
pilots are in, the parties provided for a special
scheme of retirement different from that
contemplated in the LC. Conversely, the provisions
of Art. 287 of the LC could not have contemplated
thesituationofPAL'spilots.Rather,itwasintended
for those who have no more plans of employment
after retirement, and are thus in need of financial
assistanceandrewardfortheyearsthattheyhave
rendered service. (PAL v. Airline Pilots Assn of the
Phils.,G.R.No.143686,Jan.15,2002)

Q: In 55, Hilaria was hired as a grade school


teacher at the Sta. Catalina College.In 70, she
applied for and was granted a 1 yr LOA without
pay due to the illness of her mother.After the
expiration in 71 of her LOA, she had not been
heardfrombySta.Catalina.Inthemeantime,she
was employed as a teacher at the San Pedro
ParochialSchoolduringSY8081andattheLiceo
deSanPedro,duringSY8182.In82,sheapplied
anewatSta.Catalinawhichhiredher.OnMar22,
st
97, during the 51 Commencement Exercises of
Sta. Catalina, Hilaria was awarded a Plaque of
Appreciation for 30 yrs of service and P12,000 as
gratuity pay. On May 31, 97, Hilaria reached the
compulsory retirement age of 65. Sta. Catalina
pegged
her
retirement
benefits
at
P59,038.35.Deducted was theamount of P12,000
representing the gratuity pay which was given to
her.

Should the gratuity pay be deducted from the


retirementbenefits?

A: No. As for the ruling of theCA affirming that of


the NLRC that the P12,000 gratuity pay earlier
awardedtoHilariashouldnotbedeductedfromthe
retirement benefits due her, the same is in order.
Gratuity pay is separate and distinct from
retirement benefits. It is paid purely out of
generosity.

Q: What is the difference between gratuity pay


andretirementbenefits?

A:
GRATUITYPAY
Itispaidtothe
beneficiaryforthepast
servicesorfavor
renderedpurelyoutof
thegenerosityofthe
giverorgrantor.Itisnot
intendedtopayaworker
foractualservices
renderedorforactual
performance.Itisa
moneybenefitorbounty
giventotheworker,the
purposeofwhichisto
rewardEeswhohave
renderedsatisfactory
servicetothecompany.

RETIREMENTBENEFITS
Areintendedtohelpthe
Eeenjoytheremaining
yearsofhislife,releasing
himfromtheburdenof
worryingforhisfinancial
support,andareaformof
rewardforhisloyaltyto
theEr.(Sta.Catalina
CollegeandSr.Loreta
Oranza,vs.NLRCand
HilariaTercera,G.R.No.
144483.November19,
2003,J.CarpioMorales)

b.RetirementpayunderRA7641visvisretireent
benefitsunderSSSandGSISlaws
Q:WhatisretirementpayundertheLCinrelation
toretirementbenefitsunderSSSandGSISlaws?

101

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UST GOLDEN NOTES 2011


A:
Social
SecurityLaw

Revised
Government
Service
InsuranceAct

Employees
Compensation
Act

Compulsory
upon all E e s
n o t o v e r 6 0
years of age
andtheirErs.

1.Filipinos
recruited
in
the Phils. by
foreignbased
Ers
for
employment
abroadmaybe
coveredbythe
SSS on a
voluntary
basis.

2.
Compulsory
upon all self
employed
persons
earning P1,800
or more per
annum.

Compulsory for
all permanent
Ees below 60
years of age
upon
appointment to
permanent
status, and for
all
elective
officials for the
duration oftheir
tenure.

1. Any person,
whether elected
or appointed, in
theserviceofan
Er is a covered
Ee if he receives
compensation
forsuchservice.

Compulsory upon
all Ers and their
Ees not over 60
years of age;
Provided, that an
Ee who isover 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.

Note: The Ees Compensation Commission shall ensure


adequate coverage of Filipino Ees employed abroad,
subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS
including the members of the AFP, and any person
employed as casual, emergency, temporary, substitute
or contractual, or any person compulsorily covered by
theSSSarecoveredbytheEesCompensationProgram.
(1997BarQuestion)

102

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MANAGEMENT PREROGATIVE
E.MANAGEMENTPREROGATIVE

Q:WhatisManagementPrerogative?

A:
GR: It is the right of an Er to regulate,
accordingtohisowndiscretionandjudgment,
allaspectsofemployment,including:
1. Hiring
2. Workassignments
3. Workingmethods
4. Time,placeandmannerofwork
5. Toolstobeused
6. Processestobefollowed
7. Supervisionofworkers
8. Workingregulations
9. TransferofEes
10. Worksupervision
11. Layoffofworkers
12. Discipline
13. Dismissal
14. Recallofworkers

XPNs:Otherwiselimitedbyspeciallaws.

Note: So long as a companys prerogatives are


exercised in good faith for the advancement of the
Ersinterest and not for the purpose of defeating or
circumventingtherightsoftheEesunderspeciallaws
or under valid agreements, the Supreme Court will
upholdthem.

Q: 1. An exclusive school for girls, run by a


religious order, has a policy of not employing
unwedmothers,womenwithliveinpartners,and
lesbians.Isthepolicyviolativeofanyprovisionof
theLConemploymentofwomen?

2. The same school dismissed 2 female faculty


membersonaccountofpregnancyoutofwedlock.
Did the school violate any provision of the LC on
employmentofwomen?

A:
1. No,thepolicydoesnotviolatetheLC.The
practiceisavalidexerciseofmanagement
function. Considering the nature and
reasonforexistenceoftheschool,itmay
adopt such policy as will advance its
laudable objectives. In fact, the policy
accordswiththeconstitutionalpreceptof
inculcating ethical and moral values in
schools. The school policy does not
discriminate against women solely on
account of sex (Art. 135, LC) nor are the
actsprohibitedunderArt.137oftheLC.

2. No,becausetotoleratepregnancyoutof
wedlockwillbeablatantcontradictionof

the school's laudable mission which, as


already stated, accords with high
constitutionalprecepts.Thisanswerdoes
not contradict the ruling in ChuaQua
wheretheteachermerelyfellinlovewith
a bachelor student and the teacher, also
single, did not get pregnant out of
wedlock.(2000BarQuestion)

Q:LittleHandsGarmentCompany,anunorganized
manufacturer of children's apparel with around
1,000workers,sufferedlossesforthe1stfirsttime
in history when its US and European customers
shiftedtheirhugeorderstoChinaandBangladesh.
ThemanagementinformeditsEesthatitcouldno
longer afford to provide transportation shuttle
services. Consequently, it announced that a
normal fare would be charged depending on the
distance traveled by the workers availing of the
service.

WastheLittleHandsGarmentsCompanywithinits
rights to withdraw this benefit which it had
unilaterallybeenprovidingtoitsEes?

A: Yes, because this is a management prerogative


which is not due any legal or contractual
obligation.Thefactsofthecasedonotstatethe
circumstances through which the shuttle service
maybeconsideredasabenefitthatripenedintoa
demandable right. There is no showing that the
benefit has been deliberately and consistently
granted,i.e.withtheemployersfullconsciousness
thatdespiteitsnotbeingboundbylaworcontract
to grant it, it just the same granted the benefit.
(2005BarQuestion)

1.DISCIPLINE

Q:DiscussbrieflytheErsrighttodisciplinehisEes.

A: TheErhastheprerogativetoinstilldisciplinein
his Ees and to impose reasonable penalties,
including dismissal, on erring Ees pursuant to
company rules and regulations. (San Miguel
Corporationv.NLRC,G.R.No.87277,May12,1989)

Q: Is the power of the Er to discipline his Ees


absolute?

A: No. While management has the prerogative to


discipline its Ees and to impose appropriate
penalties on erring workers, pursuant to company
rules and regulations, however, such management
prerogativesmustbeexercisedingoodfaithforthe
advancement of the Ers interest and not for the
purposeofdefeatingorcircumventingtherightsof
the Ees under special laws and valid agreements.

103

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UST GOLDEN NOTES 2011


(PLDT vs. Teves, G.R. No. 143511, November 10,
2010)

Q: May the Er be compelled to share with its Ees


the prerogative of formulating a code of
discipline? Is a code of discipline unilaterally
formulatedbytheErenforceable?

A:TheErhastheobligationtosharewithitsEesits
prerogativeofformulatingacodeofdiscipline.This
is in compliance with the States policy stated in
Article 211 of the Labor Code, to ensure the
participation of workers in decision and policy
making processes affecting their rights, duties and
welfare. The exercise of management prerogatives
has, furthermore, never been considered to be
boundless.Thisobligationisnotdispensedwithby
a provision in the collective bargaining agreement
recognizing the exclusive right of the Er to make
andenforcecompanyrulesandregulationstocarry
outthefunctionsofmanagementwithouthavingto
discuss the same with the union and much less
obtain the latters conformity thereto. A code of
discipline unilaterally formulated and promulgated
by the Er would be unenforceable. (Philippine
Airlines, Inc. vs. NLRC et al., G.R. No. August 13,
1993.)

2.TRANSFEROFEMPLOYEES

Q: Discuss briefly the Ers right to transfer and


reassignEes.

A:Inthepursuitofitslegitimatebusinessinterests,
especially during adverse business conditions,
management has the prerogative to transfer or
assign Ees from one office or area of operation to
another provided there is no demotion in rank or
diminution of salary, benefits and other privileges
and the action is not motivated by discrimination,
bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is
inherent in the right of Ers to control and manage
theirenterpriseseffectively.

Note: The right of Ees to security of tenure does not


givethemvestedrightstotheirpositionstotheextent
ofdeprivingmanagementofitsprerogativetochange
their assignments or to transfer them. (Endico v.
Quantum Foods Distribution Center, G.R. No. 161615,
Jan.30,2009)

Q: May the Er exercise his right to transfer an Ee


and compel the latter to accept the same if said
transfer is coupled with or is in the nature of
promotion?

A:No.ThereisnolawthatcompelsanEetoaccept
promotion,asapromotionisinthenatureofagift

104

or a reward, which a person has a right to refuse.


When an Ee refused to accept his promotion, he
wasexercisinghisrightandcannotbepunishedfor
it.Whileitmaybetruethattherighttotransferor
reassign an Ee is an Ers exclusive right and the
prerogative of management, such right is not
absolute. (Dosch vs. NLRC and Northwest Airlines,
G.R.No.51182,July5,1983)

Q: Who has the burden of proving that the


transferwasreasonable?

A:TheErmustbeabletoshowthatthetransferis
notunreasonable,inconvenientorprejudicialtothe
Ee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other
benefits.ShouldtheErfailtoovercomethisburden
of proof, the Ees transfer shall be tantamount to
constructive dismissal. (Blue Dairy Corporation v.
NLRC,314SCRA401[1999])

3.PRODUCTIVITYSTANDARD

Q:MayanErimposeproductivitystandardsforits
workers?

A: Yes. An Er is entitled to impose productivity


standards for its workers, and in fact, non
compliance may be visited with a penalty even
more severe than demotion. The practice of a
company in laying off workers because they failed
tomaketheworkquotahasbeenrecognizedinthis
jurisdiction. Failure to meet the sales quota
assignedtoeachofthemconstituteajustcauseof
their dismissal, regardless of the permanent or
probationarystatusoftheiremployment.Failureto
observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency
may constitute just cause for dismissal. Such
inefficiencyisunderstoodtomeanfailuretoattain
work goals or work quotas, either by failing to
complete the same within the allotted reasonable
period, or by producing unsatisfactory results. This
management prerogative of requiring standards
may be availed of so long as they are exercised in
goodfaithfortheadvancementoftheErsinterest.
(Leonardovs.NLRC,G.R.No.125303,June16,2000)

4.GRANTOFBONUS

Q:Whatisabonus?

A:ItisanamountgrantedandpaidtoanEeforhis
industry and loyalty which contributed to the
success of the Ers business and made possible the
realizationofprofits.

Q:Canbonusbedemanded?

LABORLAWTEAM:
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MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

MANAGEMENT PREROGATIVE

A:
GR: Bonus is not demandable as a matter of
right. It is a management prerogative given in
addition to what is ordinarily received by or
strictlyduetorecipient.(ProducersBankofthe
Phil.v.NLRC,G.R.No.100701,March28,2001)

XPNs:Givenforalongperiodoftime
1. Consistent and deliberate Er continued
giving benefit without any condition
imposedforitspayment
2. Er knew he was not required to give
benefit
3. Nature of benefit is not dependent on
profit
4. Made part of the wage or compensation
agreed and stated in the employment
contract.

Q: The projected bonus for the Ees of Suerte Co.


was 50% of their monthly compensation.
Unfortunately, due to the slump in the business,
the president reduced the bonus to 5% of their
compensation. Can the company unilaterally
reducetheamountofbonus?Explainbriefly.

A: Yes. The granting of a bonus is a management


prerogative,somethinggiveninadditiontowhatis
ordinarily received by or strictly due the recipient.
AnErcannotbeforcedtodistributebonuseswhen
it can no longer afford to pay. To hold otherwise
wouldbetopenalizetheErforhispastgenerosity.
(Producers Bank of the Phil. v NLRC, G.R. No.
100701,March28,2001).(2002BarQuestion)

5.CHANGEOFWORKINGHOURS

Q:DiscussbrieflytheErsrighttochangeworking
hours.

A:Wellsettledistherulethatmanagementretains
theprerogative,wheneverexigenciesoftheservice
sorequire,tochangetheworkinghoursofitsEes.

Q: May the normal hours fixed in Article 83 be


reducedbytheEr?Explain.

A: The present article provides that the normal


hours of work of an Ee shall not exceed eight (8)
hoursaday.ThisimpliesthattheEr,intheexercise
of its management prerogatives, may schedule a
work shift consisting of less than eight hours. And
following the principle of a fair days wage for a
fairdayslabor,theErisnotobligedtopayanEe,
workingfor lessthaneighthoursaday,thewages
due for eight hours. Nonetheless, if by voluntary
practiceorpolicy,theEeforaconsiderableperiod

oftimehasbeenpayinghisEeswagesdueforeight
hours work although the work shift less than eight
hours (e.g. seven) it cannot later on increase the
workinghourswithoutanincreaseinthepayofthe
employees affected. An Er is not allowed to
withdraw a benefit which he has voluntarily given.
AnErisnotallowedtowithdrawabenefitwhichhe
hasvoluntarilygiven.

6.MARITALDISCRIMINATION

Q: Is a company policy prohibiting marriage


betweencoworkersvalid?

A: There must be a finding of a bona fide


occupational qualification (BFOQ) to justify an Ers
No Spouse Rule. There must be a compelling
business necessity for which no alternative exists
other than the discriminating practice. (Star Paper
vs.Simbol,G.R.No.164774,April12,2006)

Q: What are the factors that the Er must prove


inordertojustifyBFOQ?

A:TheErmustprove2factors:
1. That the employment qualification is
reasonably related to the essential
operationofthejobinvolved;and
2. Thatthereisafactualbasisforbelieving
that all or substantially all persons
meeting the qualification would be
unabletoproperlyperformthedutiesof
thejob.(StarPaperetal.vs.Simbol,G.R.
No.164774,April12,2006)

Q: Peds was employed by Glaxo as medical


representativewhohasapolicyagainstEeshaving
relationships against competitors Ees. Peds
marriedJali,aBranchcoordinatorofAstra,Glaxos
competitor.Pedswastransferredtoanotherarea.
Pedsdid not accept such transfer.Is the policy of
Glaxovalidandreasonablesoastoconstitutethe
actofPedsaswillfuldisobedience?

A: The prohibition against personal or marital


relationships with Ees of competitorscompanies
upon Glaxos Ees is reasonable under the
circumstances because relationships of that nature
might compromise the interest of the company.
Glaxo does not impose an absolute prohibition
against relationships between its Ees and those of
competitorcompanies.ItsEesarefreetocultivate
relationships with and marry persons of their own
choosing.Whatthecompanymerelyseekstoavoid
is a conflict of interest between the Ee and the
company that may arise out of such relationships.
Furthermore, the prohibition forms part of the
employment contract and Peds was aware of such

105

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011


restrictions when he entered into a relationship
withJali.(DuncanAssociationofDetailmanPTGWO
v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep.
17,2004)

7.POSTEMPLOYMENTBAN

Q: Genesis Fulgencio had been working for


Solidbank Corporation since 1977. He later on
appliedforretirement.SolidbankrequiredGenesis
to sign an undated Undertaking where he
promised that "[he] will not seek employment
with a competitor bank or financial institution
within one (1) year from February 28, 1995, and
that any breach of the Undertaking or the
provisions of the Release, Waiver and Quitclaim
would entitle Solidbank to a cause of action
againsthimbeforetheappropriatecourtsoflaw.
Equitable Banking Corporation (Equitable)
employed Genesis. Is the postretirement
employmentbanincorporatedintheUndertaking
which Genesis executed upon his retirement is
unreasonable, oppressive, hence, contrary to
publicpolicy?

A: No. There is a distinction between restrictive


covenants barring an Ee to accept a post
employment competitive employment or restraint
ontradeinemploymentcontractsandrestraintson
postretirement competitive employment in
pensionandretirementplanseitherincorporatedin
employment contracts or in collective bargaining
agreements between the Er and the union of Ees,
or separate from said contracts or collective
bargaining agreements which provide that an Ee
who accepts post retirement competitive
employment will forfeit retirement and other
benefitsorwillbeobligedtorestitutethesameto
theemployer.Thestrongweightofauthorityisthat
forfeitures for engaging in subsequent competitive
employment included in pension and retirement
plansarevalideventhoughunrestrictedintimeor
geography. A postretirement competitive
employment restriction is designed to protect the
EragainstcompetitionbyformerEewhomayretire
and obtain retirement or pension benefits and, at
thesametime,engageincompetitiveemployment.
(Rivera vs. Solidbank, G.R. No. 163269, April 19,
2006)

8.LIMITATIONSINITSEXERCISE

Q: Is the exercise of management prerogative


unlimited?

A:No.Itiscircumscribedbylimitationsfoundin:
1. Law,
2. CBA,or

106

3. Generalprinciplesoffairplayandjustice

Furthermore, a line must be drawn between


management prerogatives regarding business
operationsperseandthosewhichaffecttherights
of Ees. In treating the latter, management should
seetoitthatitsEesareatleastproperlyinformed
of its decisions and modes of actions. So long as a
companysprerogativesareexercisedingoodfaith
fortheadvancementoftheErsinterestandnotfor
the purpose of defeating or circumventing the
rights of the Ees under special laws or under valid
agreements, the Supreme Court will uphold them.
(PAL v. NLRC, G.R. No. 85985, Aug. 13, 1993; San
Miguel Brewery Sales v9. Ople, G.R. No. 53515,
February8,1989)

Note:Itmustbeestablishedthattheprerogativebeing
invokedisclearlyamanagerialone

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