Labor Law

Doctrines/ Principles Definitions

“Deduction of Earning Elsewhere” earning obtained by the EE elsewhere
shoud be deducted from the backwages
Doctrine awarded to the E pursuant to the principle
that EEs should not be dismisses to enrich

Agabon doctrine it was held that if a probationary

Doctrine of loss of trust and
confidence
employee was dismissed for just cause but
without affording him the required notice,
the doctrinal ruling in the leading case of
Agabon vs. NLRC
With respect to rank-and-file personnel,
loss of trust and confidence as ground for
valid dismissal requires proof of
involvement in the alleged events in
question, and that mere uncorroborated
assertions and accusations by the
employer will not be sufficient. But as
regards a managerial employee, the mere
existence of a basis for believing that such
employee has breached the trust of his
employer would suffice for his dismissal.

Hence, in the case of managerial

employees, proof beyond reasonable doubt
is not required, it being sufficient that
there is some basis for such loss of
confidence, such as when the employer has
reasonable ground to believe that the
employee concerned is responsible for the
purported misconduct, and the nature of
his participation therein renders him
unworthy of the trust and confidence
demanded by his position.
While generally, the doctrine of loss of
trust and confidence may only be invoked
against managerial employees, there are
instances when the doctrine may also be
successfully invoked against rank-and-file
employees who, by reason of the nature of
their positions, are reposed with trust and
confidence.

For example, as held in Coca-Cola Bottlers

Philippines, Inc. vs. NLRC, [172 SCRA 751
(1989)], route salesmen are rank-and-file
employees but they are highly
individualistic personnel who roam around
selling products, deal with customers and
are entrusted with large assets and funds
and property of the employer. There is a
high degree of trust and confidence

The Personal Comfort Doctrine
Going to and Coming from Place
of Work Doctrine
Twenty-Four-Hour Duty Doctrine
“Increase Risk” Doctrine
doctrine of Strained relations
reposed on them, and when such
confidence is breached, the employer may
take proper disciplinary action on them.
Acts performed by an employee within the
time and space limits of his employment,
to minister to his personal comfort, such
as satisfaction of his thirst, hunger or
other physical demands, or to protect
himself from excessive cold, shall be
deemed incidental to his employment and
injuries the employee suffered in the
performance of such acts shall be
considered compensable and arising out of
and in the course of employment.
Injury or death resulting from an accident
while the employee is in transit as regards
the work establishment is compensable if
the following conditions are met: • The
acts of the employee of going to, or coming
from, the workplace must have been a
continuing act, i.e., he had not been
diverted therefrom by any other activity,
and he had not departed from his usual
route to, or from, his workplace; and If the
employee was sent on a special errand, the
special errand must have been official and
in connection with his work.
Under the 24 hour duty doctrine, a soldier
on active duty status and is subject to
military discipline and military law 24
hours a day. To be entitled to
compensation, the standard of work
connection must still be established by
substantial evidence.
There is increased risk if the illness is
caused by or precipitated by factors
inherent in the employees’ nature of work
and working conditions.
• It does not include aggravation of pre-
existing illness.
• All that is required is reasonable work-
connection, which could be established by
mere substantial evidence.
• It is essential for the claimant to show
that the development of the disease was
brought largely by the conditions present
in the nature of the job.
• The test of evidence in compensation
cases or the relation of the disease with
the employment is probability and not
certainty
GR: must be raised and proved before the
LA, except:  Strained relations arose
after the filing of the complaint
 During the execution proceedings as a
supervening event which would render the
execution unjust and inequiatable o Should

Mercury Drug Doctrine (Mercury
Drug vs CIR)
Bustamante doctrine (Bustamante
vs NLRC)
DOCTRINES of Cases
Labadan vs. Forest Hills
Academy
People vs. Panis
not be applied indiscriminately
• Discarded the 1st method
• Backwages due to an illegally dismissed
EE is fixed at a certain amount (usually 3-
yrs where the case is not terminated
sooner) without deduction or qualification
• Realistic, reasonable and mutually
beneficial to both parties because it
relieves the EE from submitting docs to
prove his earnings.
Currently followed
• Backwages to be awarded to an illegally
dismissed EE, should not, as a general
rule, be diminished or reduced by the
earnings, derived by him elsewhere during
the period of his illegal dismissal
• Reason: the EE, while litigating the
matter of his dismissal, must still earn a
living to support himself and family, while
full backwages have to be paid by the ER
as part of the price or penalty he has to
pay for illegally dismissing his EE
DESCRIPTIONS
While in cases of illegal dismissal, the employer
bears the burden of proving that the dismissal is
for a valid or authorized cause, the employee must
first establish by substantial evidence the fact of
dismissal.—While in cases of illegal dismissal, the
employer bears the burden of proving that the
dismissal is for a valid or authorized cause, the
employee must first establish by substantial
evidence the fact of dismissal.
The provision that a worker is entitled to twice his
regular rate if he is required to work on a holiday
implies that the provision entitling a worker to his
regular rate on holidays applies even if he does
not work
Presumption that the individual or entity is
engaged in recruitment and placement whenever
two or more persons are involved; Number of
persons, not an essential ingredient of the act of
recruitment and placement of workers.—As we see
it, the proviso was intended neither to impose a
condition on the basic rule nor to provide an
exception thereto but merely to create a
presumption. The presumption is that the
individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two
 or more persons to whom, in consideration of a
fee, an offer or promise of employment is made in
the course of the “canvassing, enlisting,
contracting, transporting, utilizing, hiring or
procuring (of) workers.” The number of persons
dealt with is not an essential ingredient of the act
of recruitment and placement of workers.

C.F. Sharp Crew Management, The conduct of preparatory interviews is a

recruitment activity.—Article 13(b) of the Labor
Inc. vs. Espanol, Jr., Code defines recruitment and placement as: any
act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services,
promising or advertising for employment, locally
or abroad whether for profit or not: Provided,
That any person or entity which in any manner,
offers or promises for a fee employment to two or
more persons shall be deemed engaged in
recruitment and placement.

C.F. Sharp Crew Management, It is the lack of the necessary license or authority,
not the fact of payment, that renders the
Inc. vs. Espanol, Jr., recruitment activity of LCL unlawful.

The essence of due process lies in the reasonable

opportunity afforded a party to be heard and to
submit any evidence in support of its defense;
What is vital is not the opportunity to cross-
examine an adverse witness, but an opportunity to
be heard

Judicial review of labor cases does not go beyond

the evaluation of the sufficiency of the evidence
upon which the labor officials’ findings rest.

Santiago vs. CF Sharp Crew A distinction must be made between the perfection
of the employment contract and the
Management, Inc. commencement of the employer-employee
relationship. The perfection of the contract, which
in this case coincided with the date of execution
thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the
rest of the terms and conditions therein. The
commencement of the employer employee
relationship, as earlier discussed, would have
taken place had petitioner been actually deployed
from the point of hire.

Neither the manning agent nor the employer can

simply prevent a seafarer from being deployed
without a valid reason; Respondent unilaterally
and unreasonably reneged on its obligation to
deploy petitioner and must therefore answer for
the actual damages he suffered.

Ambraque International
Placement & Services vs. NLRC
Interorient Maritime
Enterprises, Inc. vs. NLRC
De Jesus vs. National Labor
Relations Commission
Seagull Shipmanagement and
Transport, Inc. vs. NLRC
The fact that the Philippine Overseas Employment
Administration (POEA) Rules are silent as to the
payment of damages to the affected seafarer does
not mean that the seafarer is precluded from
claiming the same
Seafarers are considered contractual employees
and cannot be considered as regular employees
under the Labor Code.
Dismissal of worker that he allegedly exhibited
disagreeable conduct when he was abroad, is a
sweeping statement and without any elaboration
by the employer; Absence of details surrounding
the charge of disagreeable conduct of the worker
casts veracity on the charge
Even if the termination of the employment
contract is duly effected in a foreign country, still
the responsibility of the foreign employer to see to
it that the worker is duly repatriated to the point
of hiring subsists
The foreign employer may not be obligated by its
contract to provide a companion for a returning
employee but it cannot deny that it is expressly
tasked by its agreement to assure the safe return
of said worker
The rule is that an ailment contracted by a worker
even prior to his employment, does not detract
from the compensability of the disease.
A worker’s misrepresentation cannot be made the
basis by his employer for the denial of his claims
under the contract where he passed the required
pre-medical examination and was declared fit to
work.
Settled is the rule that in termination cases, the
burden of proof rests upon the employer to show
that the dismissal is for a just and valid cause. The
case of the employer must stand or fall on its own
merits and not on the weakness of the employee’s
defense.
Under the contract, compensability of the illness
or death of seamen need not depend on whether
the illness was work connected or not; It is
sufficient that the illness occurred during the term
of the employment contract.
It is not necessary, in order to recover
compensation, that the employee must have been
in perfect health at the time he contracted the
disease; If the disease is the proximate cause of
the employee’s death for which compensation is

Prudential Shipping and
Management Corporation vs.
Sta. Rita
Prieto vs. National Labor
Relations Commission
JMM Promotion and
Management, Inc. vs. Court of
Appeals
Cadalin vs. POEA's
Administrator
Nitto Enterprises vs. National
Labor Relations Commission
Bisig Manggagawa sa Tryco vs.
National Labor Relations
sought, the previous physical condition of the
employee is unimportant, and recovery may be
had for said death, independently of any pre-
existing disease.
The death of a seaman during the term of
employment makes the employer liable to his
heirs for death compensation benefits, but if the
seaman dies after the termination of his contract
of employment, his beneficiaries are not entitled
to the death benefits
The factual findings of administrative bodies are
as a rule binding on this Court, but this is true
only when they do not come under the established
exceptions. One of these is where the findings of
the POEA and the NLRC are contrary to each other,
as in this case, and there is a necessity to
determine which of them should be preferred as
more conformable to the established facts.
A profession, trade or calling is a property right
within the meaning of our constitutional
guarantees.—A profession, trade or calling is a
property right within the meaning of our
constitutional guarantees. One cannot be deprived
of the right to work and the right to make a living
because these rights are property rights, the
arbitrary and unwarranted deprivation of which
normally constitutes an actionable wrong.
Article 291 of the Labor Code applies to money
claims arising from employer-employee relations,
including those arising from application of foreign
laws providing for greater employee benefits.—
Section 7-a of the Eight-Hour Labor Law provides
the prescriptive period for filing “actions to
enforce any cause of action under said law.” On
the other hand, Article 291 of the Labor Code of
the Philippines provides the prescriptive period
for filing “money claims arising from employer-
employee relations.”
Where the apprenticeship agreement has no force
and effect, the worker hired as apprentice should
be considered as a regular employee
The twin requirements of due process, substantive
and procedural, must be complied with before
valid dismissal exists, otherwise the dismissal
becomes void.
While the law is solicitous of the welfare of
employees, it must also protect the right of an
employer to exercise what are clearly
management prerogatives; The free will of
Commission
Bisig Manggagawa sa Tryco vs.
National Labor Relations
Commission
Linton Commercial Co., Inc. vs.
Hellera
Perpetual Help Credit Cooperative,
Inc. vs. Faburada
management to conduct its own business affairs to
achieve its purpose cannot be denied.
Management’s prerogative of transferring and
reassigning employees from one area of operation
to another in order to meet the requirements of
the business is, therefore, generally not
constitutive of constructive dismissal.
Employer must show that the transfer is not
unreasonable, inconvenient, or prejudicial to the
employee, nor does it involve a demotion in rank
or a diminution of his salaries, privileges and
other benefits
The validity of the reduction of working hours
upheld in Philippine Graphic Arts, Inc. vs. NLRC,
166 SCRA 118 (1988); The Bureau of Working
Conditions of the DOLE released a bulletin
providing for in determining when an employer
can validly reduce the regular number of working
days
Permitting reduction of work and pay at the
slightest indication of losses would be contrary to
the State’s policy to afford protection to labor and
provide full employment.
Management prerogative must be exercised in
good faith and with due regard to the rights of
labor.—Management has the prerogative to come
up with measures to ensure profitability or loss
minimization. However, such privilege is not
absolute. Management prerogative must be
exercised in good faith and with due regard to the
rights of labor.
In determining the existence of an employer-
employee relationship, the following elements are
considered: (1) the selection and engagement of
the worker or the power to hire; (2) the power to
dismiss; (3) the payment of wages by whatever
means; and (4) the power to control the worker’s
conduct, with the latter assuming primacy in the
overall consideration. No particular form of proof
is required to prove the existence of an employer-
employee relationship. Any competent and
relevant evidence may show the relationship.
Three Kinds of Employees; Words and Phrases;
“Regular Employees, “Project Employees,” and
“Casual Employees,” Explained.—Necessarily, this
leads us to the issue of whether or not private
respondents are regular employees. Article 280 of
the Labor Code provides for three kinds of
employees: (1) regular employees or those who

Perpetual Help Credit Cooperative,
Inc. vs. Faburada
Honda Phils., Inc. vs. Samahan ng
Malayang Manggagawa sa Honda
have been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer; (2) project
employees or those whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season; and
(3) casual employees or those who are neither
regular nor project employees. The employees
who are deemed regular are: (a) those who have
been engaged to perform activities which are
usually necessary or desirable in the usual trade
or business of the employer; and (b) those casual
employees who have rendered at least one (1) year
of service, whether such service is continuous or
broken, with respect to the activity in which they
are employed.
One’s regularity of employment is not determined
by the number of hours one works but by the
nature and by the length of time one has been in
that particular job
Regular employees or workers are entitled to
security of tenure and their services may be
terminated only for a valid cause, with observance
of due process; The valid causes are categorized
into two groups—the just causes under Article 282
of the Labor Code and the authorized causes under
Articles 283 and 284.
Where the CBA is clear and unambiguous, it
becomes the law between the parties and
compliance therewith is mandated by the express
policy of the law.—A collective bargaining
agreement refers to the negotiated contract
between a legitimate labor organization and the
employer concerning wages, hours of work and all
other terms and conditions of employment in a
bargaining unit.
Excluded from the computation of “basic salary”
payments for sick, vacation and maternity leaves,
night differentials, regular holiday pay and
premiums for work done on rest days and special
holidays.
13th month pay primarily given to alleviate the
plight of workers and to help them cope with the
exorbitant increases in the cost of living
Davao Fruits Corporation vs.
Associated Labor Unions
DOCTRINES OF CASES
Davao Fruits Corporation vs.
Associated Labor Unions
Davao Fruits Corporation vs.
Associated Labor Unions
Prubankers Association vs.
Prudential Bank & Trust Company
Basic salary does not merely exclude the benefits
expressly mentioned but all payments which may
be in the form of fringe benefits or allowances;
Overtime pay earnings and other remunerations
shall be excluded in computing the thirteenth
month pay
DEFINITIONS
Payment for sick, vacation and maternity leaves,
premium for work done on rest days and special
holidays as well as pay for regular holidays are
likewise excluded in computing the basic salary
for the purpose of determining the thirteenth
month pay.
Any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished,
discontinued or eliminated by the employer
Where a significant change occurs at the lowest
level of positions in terms of basic wage without a
corresponding change in the other level in the
hierarchy of positions, negating as a result thereof
the distinction between one level of position from
the next higher level, and resulting in a parity
between the lowest level and the next higher level
or rank, between new entrants and old hires,
there exists a wage distortion.
Wage distortion involves four elements: 1. An
existing hierarchy of positions with corresponding
salary rates; 2. A significant change in the salary
rate of a lower pay class without a concomitant
increase in the salary rate of a higher one; 3. The
elimination of the distinction between the two
levels; 4. The existence of the distortion in the
same region of the country.