LABOR REVIEW

LABOR REVIEW SYLLABUS ◦ company policy

Atty. Peter-Joey Usita ◦ legislation

◦ implementing rules and regulations

NOTES:
◦ company past practices
• LABOR -
1) Constitutional basis for labor relations policy
◦ it is the exertion by human beings of physical or mental efforts, or both, towards the production of
goods and services Section 3, Article 13:

◦ it also means that sector or group in a society, which derives its livelihood chiefly from rendition of Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote
work or services in exchange for compensation under managerial direction full employment and equality of employment opportunities for all.

• LABOR LEGISLATION It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
◦ consists of statutes, regulations and jurisprudence governing the relations between capital and labor, by humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes
providing for certain employment standards and a legal framework for negotiating, adjusting and affecting their rights and benefits as may be provided by law.
administering those standards and other incidents of employment.
The State shall promote the principle of shared responsibility between workers and employers and the preferential use
◦ Labor Standards vs Labor Relations : they complement each other of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.
LABOR STANDARDS LABOR RELATIONS The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in
the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.
Deals with the MINIMUM STANDARDS as to Defines the status, rights and duties as well as the
wages, hours of work and other terms and institutional mechanisms that govern the individual 1) Civil Code provisions - Articles 19, 224, 1700 to 1712.
conditions of employment that employers must and collective interactions between employers,
provide their employees employees and their representatives Article Provision

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

• DATE OF EFFECTIVITY: November 1, 1974 Art. 224 The family home may be established judicially or extrajudicially.

• DATE OF PROMULGATION: May 1, 1974 Art. 1700 The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good.
• SOURCES OF LABOR CODE: Therefore, such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
◦ constitution
labor and similar subjects.
◦ contractual / CBA
Art. 1712 If the death or injury is due to the negligence of a fellow worker, the latter and the

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 LABOR REVIEW
employer shall be solidarily liable for compensation. If afellow worker's intentional
malicious act is the only cause of the death or injury, the employer shall not be
answerable, unless it should be shown that the latter did not exercise due diligence in
the selection or supervision of the plaintiff's fellow worker.
2) Definitions of:
Term Definition
Labor relations Is the interaction between the employer and employees or their
representatives and the mechanism by which the standards and other terms
and conditions of the employment are negotiated, adjusted and enforced.
Labor relations laws Define the status, rights and duties and the institutional mechanisms that
govern the individual and collective interactions of employers, employees
and other representatives
Labor standards Part of labor law which prescribes the minimum terms and conditions of
employment when the employer is required to grant to its employees
Labor organization any union or association of employees which exists in whole or in part for
the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
Legitimate labor organization any labor organization duly registered with the Department of Labor and
Employment, and includes any branch or local thereof.
Labor union any labor organization whose formation, function or administration has
been assisted by any act defined as unfair labor practice by this Code.
Labor dispute includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating,
fixing, maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate
relation of employer and employee.
Company union any labor organization whose formation, function or administration has
been assisted by any act defined as unfair labor practice by this Code.
Bargaining representative a legitimate labor organization whether or not employed by the employer.
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I. PROCEDURE & JURISDICTION
PROCEEDINGS BEFORE THE LA & NLRC
The proceedings before the Labor Arbiters and the NLRC are governed by the Labor Code, as amended, the 2011
NLRC Rules of Procedure, and suppletorily, the Rules of Court.
1. Labor Arbiter
Article 223 (formerly Art. 217): Jurisdiction of the Labor Arbiter
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a.Except as otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and other terms and conditions
of employment;
Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
a.The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.
b.Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
 LABOR REVIEW
arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No.
6715, March 21, 1989)
NOTES:
Under Article 217 of the Labor Code, Labor Arbiters have jurisdiction over the following cases:
1.   Unfair labor practice (ULP) cases;
2.   Termination disputes (or illegal dismissal cases);
3.   If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
4.   Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;
5.   Cases arising from any violation of Article 264 of the Labor Code, including questions involving the legality of
strikes and lockouts;
6.   Except claims for employees compensation not included in the next succeeding paragraph, social security,
medicare and maternity benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding Five Thousand Pesos (P5,000.00), whether
or not accompanied with a claim for reinstatement;
7.   Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to Republic
Act No. 6627;
8.   Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Article
227 of the Labor Code, as amended;
DOCTRINE:
9.   Money claims arising out of employer-employee relationship or by virtue of any law or contract, involving
Filipino workers for overseas employment, including claims for actual, moral, exemplary and other forms of damages
as provided by Section 10 of R.A. No. 8042, as amended by R.A. No. 10022;
10.Contested cases under the exception clause of Article 128(b) of the Labor Code, as amended by R.A. 7730; and
11.Other cases as may be provided by law.
 Law gives primacy or prefers voluntary arbitration instead of compulsory arbitration
 the law forbids a labor arbiter from entertaining a dispute properly belonging to the jurisdiction of a
voluntary arbitrator
 LA: employment related cases. Test:
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◦ if the principal relief sought will be resolved by applying the Labor code or labor related statutes or
CBA ==> LABOR ARBITER
◦ if the applicable law is the general law ==> REGULAR COURTS
 ULP : belongs to the labor arbiters
 Jurisdiction over corporate disputes → was under SEC but later on transferred to regular courts by virtue of
the Securities Regulations Code
 the LA may award damages
 VENUE:
◦ all cases which LA have authority shall be filed before the REGIONAL ARBITRATION BRANCH
having jurisdiction over the workplace of the complainant/petitioner
◦ if OFW, Regional Arbitration Branch where the complainant resides or where the
principal office of the respondent
Halaguea v. PAL, G.R. No. 172013, October 2, 2009 (jurisdiction of the LA)
[G.R. No. 172013. October 2, 2009.]
PATRICIA HALAGUEÑA, and other flight attendants of PHILIPPINE AIRLINES vs. PHILIPPINE
AIRLINES INCORPORATED
• it is clear that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and
unconstitutional. Here, the petitioners' primary relief is the annulment of the said provision, which allegedly
discriminates against them for being female flight attendants. The subject of litigation is incapable of
pecuniary estimation, exclusively cognizable by the RTC. Being an ordinary civil action, the same is beyond
the jurisdiction of labor tribunals.
• The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can ONLY be resolved by reference to the Labor
Code, other labor statutes, or their collective bargaining agreement.
• Actions between employees and employer where the employer-employee relationship is merely incidental
and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of
the regular court.
Lapanday Agricultural Dev’t. Corp v. CA, G.R. No. 112139, January 31, 2000
 LABOR REVIEW
DOCTRINE:
• 1. REMEDIAL LAW; JURISDICTION; THE REGIONAL TRIAL COURT HAS JURISDICTION OVER
THE SUBJECT MATTER OF THE PRESENT CASE; WHILE THE RESOLUTION OF THE ISSUE
INVOLVES THE APPLICATION OF LABOR LAWS, REFERENCE TO THE LABOR CODE WAS
ONLY FOR THE DETERMINATION OF THE SOLIDARY LIABILITY OF THE PETITIONER TO THE
RESPONDENT WHERE NO EMPLOYER-EMPLOYEE RELATION EXISTS. — We agree with the
respondent that the RTC has jurisdiction over the subject matter of the present case. It is well-settled in law
and jurisprudence that where no employer-employee relationship exists between the parties and no issue is
involved which may be resolved by reference to the Labor Code, other labor statutes or any collective DOCTRINE:
bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent
is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on
account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is
within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the
resolution of the issue involves the application of labor laws, reference to the labor code was only for the
determination of the solidary liability of the petitioner to the respondent where no employer-employee
relation exists.
• 2. CIVIL LAW; JOINT AND SOLIDARY OBLIGATIONS; PRIVATE RESPONDENT MAY NOT ASSERT DOCTRINE:
A CLAIM AGAINST PETITIONER FOR SALARY WAGE ADJUSTMENTS THAT IT HAS NOT
ACTUALLY PAID; IT IS ONLY WHEN PRIVATE RESPONDENT PAYS THE INCREASES
MANDATED THAT IT CAN CLAIM AN ADJUSTMENT FROM THE PETITIONER TO COVER THE
INCREASES PAYABLE TO THE SECURITY GUARDS. — It is clear also from the foregoing that it is
only when contractor pays the increases mandated that it can claim an adjustment from the principal to cover
the increases payable to the security guards. The conclusion that the right of the contractor (as principal
debtor) to recover from the principal as solidary co-debtor) arises only if he has paid the amounts for which
both of them are jointly and severally liable is in line with Article 1217 of the Civil Code. Pursuant to the
above provision, the right of reimbursement from a co-debtor is recognized in favor of the one who paid. It
will be seen that the liability of the petitioner to reimburse the respondent only arises if and when respondent
actually pays its employees the increases granted by Wage Order Nos. 5 and 6. Payment, which means not
only the delivery of money but also the performance, in any other manner, of the obligation, is the operative
fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds
to each of the debtors. The records show that judgment was rendered by Labor Arbiter Newton R. Sancho
holding both petitioner and private respondent jointly and solidarily liable to the security guards in a
Decision dated October 17, 1986 (NLRC Case No. 2849-MC-XI-86). However, it is not disputed that the
private respondent has not actually paid the security guards the wage increases granted under the Wage
Orders in question. Neither is it alleged that there is an extant claim for such wage adjustments from the
security guards concerned, whose services have already been terminated by the contractor. Accordingly,
private respondent has no cause of action against petitioner to recover the wage increases. Needless to stress,
the increases in wages are intended for the benefit of the laborers and the contractor may not assert a claim
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against the principal for salary wage adjustments that it has not actually paid. Otherwise, as correctly put by
the respondent, the contractor would be unduly enriching itself by recovering wage increases, for its own
benefit. 
7K Corp. vs. Albarico, GR No. 182295, June 26, 2013
(jurisdiction of the LA)
G.R. No. 182295 June 26, 2013 7K CORPORATION, vs. EDDIE ALBARICO
•
People’s Broadcasting vs. Sec. of Labor, GR No. 179652, March 6, 2012
PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) -versus- THE SECRETARY OF
THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION
VII, AND JANDELEON JUEZAN.
[G.R. No. 179652, MARCH 6,2012]
• No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-
employee relationship.
• DOLE also determines existence of ee-er relations via the four-fold test, such test being not limited w/in
NLRC domain. The tests are as follows:  
◦ (1) the selection and engagement of the employee;
◦ (2) the payment of wages;
◦ (3) the power of dismissal;
◦ (4) the employers power to control the employees conduct.
• If a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code
or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC.  If the DOLE finds that there is
no employer-employee relationship, the jurisdiction is properly with the NLRC.  If a complaint is filed with
the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor
Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and
 LABOR REVIEW
conditions of employment, if accompanied by a claim for reinstatement.  If a complaint is filed with the
NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the
DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under
Rule 65 of the Rules of Court.
1. National Labor Relations Commission
Art. 213. National Labor Relations Commission. There shall be a National Labor Relations Commission
which shall be attached to the Department of Labor and Employment for program and policy coordination
only, composed of a Chairman and fourteen (14) Members.
Five (5) members each shall be chosen from among the nominees of the workers and employers
organizations, respectively. The Chairman and the four (4) remaining members shall come from the public
sector, with the latter to be chosen from among the recommendees of the Secretary of Labor and
Employment.
Upon assumption into office, the members nominated by the workers and employers organizations shall
divest themselves of any affiliation with or interest in the federation or association to which they belong.
The Commission may sit en banc or in five (5) divisions, each composed of three (3) members. Subject to
the penultimate sentence of this paragraph, the Commission shall sit en banc only for purposes of
promulgating rules and regulations governing the hearing and disposition of cases before any of its
divisions and regional branches, and formulating policies affecting its administration and operations. The
Commission shall exercise its adjudicatory and all other powers, functions, and duties through its divisions.
Of the five (5) divisions, the first, second and third divisions shall handle cases coming from the National
Capital Region and the parts of Luzon; and the fourth and fifth divisions, cases from the Visayas and
Mindanao, respectively; Provided that the Commission sitting en banc may, on temporary or emergency
basis, allow cases within the jurisdiction of any division to be heard and decided by any other division
whose docket allows the additional workload and such transfer will not expose litigants to unnecessary
additional expense. The divisions of the Commission shall have exclusive appellate jurisdiction over cases
within their respective territorial jurisdictions. [As amended by Republic Act No. 7700].
The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of
judgment or resolution. Whenever the required membership in a division is not complete and the
concurrence of two (2) commissioners to arrive at a judgment or resolution cannot be obtained, the
Chairman shall designate such number of additional Commissioners from the other divisions as may be
necessary.
The conclusions of a division on any case submitted to it for decision shall be reached in consultation
before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the division
to meet for purposes of the consultation ordained herein. A certification to this effect signed by the
Presiding Commissioner of the division shall be issued and a copy thereof attached to the record of the case
and served upon the parties.
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The Chairman shall be the Presiding Commissioner of the first division and the four (4) other members
from the public sector shall be the Presiding Commissioners of the second, third, fourth and fifth divisions,
respectively. In case of the effective absence or incapacity of the Chairman, the Presiding Commissioner of
the second division shall be the Acting Chairman.
The Chairman, aided by the Executive Clerk of the Commission, shall have administrative supervision over
the Commission and its regional branches and all its personnel, including the Executive Labor Arbiters and
Labor Arbiters.
The Commission, when sitting en banc shall be assisted by the same Executive Clerk and, when acting thru
its Divisions, by said Executive Clerks for the second, third, fourth and fifth Divisions, respectively, in the
performance of such similar or equivalent functions and duties as are discharged by the Clerk of Court and
Deputy Clerks of Court of the Court of Appeals. (As amended by Section 5, Republic Act No. 6715, March
21, 1989)
Art. 214. Headquarters, Branches and Provincial Extension Units. The Commission and its First,
Second and Third divisions shall have their main offices in Metropolitan Manila, and the Fourth and Fifth
divisions in the Cities of Cebu and Cagayan de Oro, respectively. The Commission shall establish as many
regional branches as there are regional offices of the Department of Labor and Employment, sub-regional
branches or provincial extension units. There shall be as many Labor Arbiters as may be necessary for the
effective and efficient operation of the Commission. Each regional branch shall be headed by an Executive
Labor Arbiter. (As amended by Section 6, Republic Act No. 6715, March 21, 1989)
Art. 215. Appointment and Qualifications. The Chairman and other Commissioners shall be members of
the Philippine Bar and must have engaged in the practice of law in the Philippines for at least fifteen (15)
years, with at least five (5) years experience or exposure in the field of labor-management relations, and
shall preferably be residents of the region where they are to hold office. The Executive Labor Arbiters and
Labor Arbiters shall likewise be members of the Philippine Bar and must have been engaged in the practice
of law in the Philippines for at least seven (7) years, with at least three (3) years experience or exposure in
the field of labor-management relations: Provided, However, that incumbent Executive Labor Arbiters and
Labor Arbiters who have been engaged in the practice of law for at least five (5) years may be considered
as already qualified for purposes of reappointment as such under this Act. The Chairman and the other
Commissioners, the Executive Labor Arbiters and Labor Arbiters shall hold office during good behavior
until they reach the age of sixty-five years, unless sooner removed for cause as provided by law or become
incapacitated to discharge the duties of their office.
The Chairman, the division Presiding Commissioners and other Commissioners shall be appointed by the
President, subject to confirmation by the Commission on Appointments. Appointment to any vacancy shall
come from the nominees of the sector which nominated the predecessor. The Executive Labor Arbiters and
Labor Arbiters shall also be appointed by the President, upon recommendation of the Secretary of Labor
and Employment and shall be subject to the Civil Service Law, rules and regulations.
The Secretary of Labor and Employment shall, in consultation with the Chairman of the Commission,
appoint the staff and employees of the Commission and its regional branches as the needs of the service
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may require, subject to the Civil Service Law, rules and regulations, and upgrade their current salaries, 2. Certified labor disputes causing or likely to
benefits and other emoluments in accordance with law. (As amended by Section 7, Republic Act No. 6715, cause a strike or lockout in an industry
March 21, 1989) indispensable to the national interest, certified
to it by the Secretary of Labor and Employment
Art. 216. Salaries, benefits and other emoluments. The Chairman and members of the Commission shall
for compulsory arbitration.
receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as those
of the Presiding Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor
Arbiters shall receive an annual salary at least equivalent to that of an Assistant Regional Director of the
Bartolino vs Coca Cola Bottlers Gr. No 153660 June 10, 2003
Department of Labor and Employment and shall be entitled to the same allowances and benefits as that of a
Regional Director of said Department. The Labor Arbiters shall receive an annual salary at least equivalent G.R. No. 153660            June 10, 2003
to, and be entitled to the same allowances and benefits as that of an Assistant Regional Director of the
Department of Labor and Employment. In no case, however, shall the provision of this Article result in the PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA, ARMAN QUELING,
diminution of existing salaries, allowances and benefits of the aforementioned officials. (As amended by ROLANDO NIETO, RICARDO BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and NELSON
Section 8, Republic Act No. 6715, March 21, 1989) MANALASTAS,petitioners,  vs.COCA-COLA BOTTLERS PHILS., INC., respondent.
DOCTRINE:

NOTES: • rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where
 principal government agency that hears and decides labor-management disputes decisions may be reached on the basis of position papers only. To require otherwise would be to negate the
 NLRC is independent from DOLE, attached to DOLE only for purposes of policy coordination
rationale and purpose of the summary nature of the proceedings mandated by the Rules and to make
 NLRC is less tied to technical rules of the regular courts
mandatory the application of the technical rules of evidence.
 NLRC has regional arbitration branches or RAB's
 LABOR ARBITERS → are the representative of the NLRC in various regions • under Art. 221 of the Labor Code, the rules of evidence prevailing in courts of law do not control
 The commission acts as a whole in 4 instances proceedings before the Labor Arbiter and the NLRC. Further, it notes that the Labor Arbiter and the NLRC
◦ promulgate rules and regulations governing the hearing and disposition of cases are authorized to adopt reasonable means to ascertain the facts in each case speedily and objectively and
◦ to formulate policies affecting its administration and operations without regard to technicalities of law and procedure, all in the interest of due process.
◦ to allow cases within the jurisdiction of any division to be heard and decided by another division
◦ to recommend appointment of a labor arbiter • "Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
a. Original Jurisdiction of the NLRC disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face,
ORIGINAL JURISDICTION EXCLUSIVE APPELLATE JURISDICTION
that the law will step in to annul the questionable transaction.

1. Injunction in ordinary labor disputes to enjoin
or restrain any actual or threatened commission
of any or all prohibited or unlawful acts or to
require the performance of a particular act in
any labor dispute which, if not restrained or
performed forthwith, may cause grave or
irreparable damage to any party;
1. Injunction in strikes or lockouts under Article
264 of the Labor Code; and
1. All cases decided by the Labor Arbiters
a. Article 223 (formerly Art. 217); Exclusive Appellate jurisdiction
including contempt cases; and
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
1. Cases decided by the DOLE Regional Directors
or his duly authorized Hearing Officers (under 2. The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Article 129) involving recovery of wages, Arbiters.
simple money claims and other benefits not
exceeding P5,000 and not accompanied by
claim for reinstatement. b. Article 229 (formerly Art. 223); Appeal
Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless

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appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such  Appeal from the decision of the Labor Arbiter is brought by ordinary appeal to the NLRC within ten (10)
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: calendar days from receipt by the party of the decision. From the decision of the NLRC, there is no appeal.
The only way to elevate the case to the Court of Appeals is by way of the special civil action of certiorari
1. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; under Rule 65 of the Rules of Civil Procedure. From the ruling of the Court of the Appeals, it may be
elevated to the Supreme Court by way of ordinary appeal under Rule 45 of the Rules of Civil Procedure.
2. If the decision, order or award was secured through fraud or coercion, including graft  The appeal shall be: 
and corruption; ◦ (1) filed within the reglementary period provided in Section 1 of the Rule;
◦ (2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the
3. If made purely on questions of law; and Rules of Court, as amended;
◦ (3) in the form of a memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof, the relief prayed for, and with a statement of the
4. If serious errors in the findings of facts are raised which would cause grave or date the appellant received the appealed decision, award or order;
irreparable damage or injury to the appellant. ◦ (4) in three (3) legibly typewritten or printed copies; and (5) accompanied by proof of
payment of the required appeal fee and legal research fee, posting of a cash or surety
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only bond as provided in Section 6 of this Rule, and proof of service upon the other parties.
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by  Appeal from the decision of the LA's decision is not perfected if cash or surety bond is not posted
the Commission in the amount equivalent to the monetary award in the judgment appealed from. within the 10-day appeal period.
 A MOTION TO REDUCE the bond may be filed on meritorious grounds, but meantime, a bond in a
reasonable amount in relation to the monetary award should be posted with the appeal (check Mcburnie
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar case)
as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The  EFFECT OF APPEAL FROM LA to NLRC:
◦ LA loses jurisdiction over the case
employee shall either be admitted back to work under the same terms and conditions prevailing prior
◦ perfection of appeal stays the decision of the LA
to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The ◦ IF the LA's decision includes a reinstatement order → the LA shall immediately issue a
posting of a bond by the employer shall not stay the execution for reinstatement provided herein. partial writ of execution even pending the appeal
◦ actual reinstatement → employee returns back to work
◦ payroll reinstatement → employee does not work but still gets paid regularly
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose
reasonable penalty, including fines or censures, upon the erring parties. APPEAL: Labor Code 2011 NLRC Rules of Procedure (EXTRAORDINARY
REMEDIES)
In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who  Such appeal may be entertained only on  (a) If there is prima facie evidence of
shall file an answer not later than ten (10) calendar days from receipt thereof. any of the following grounds: abuse of discretion on the part of the
 If there is prima facie evidence of abuse of Labor Arbiter;
discretion on the part of the Labor Arbiter;  (b) If serious errors in the findings of facts
The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer  If the decision, order or award was are raised which, if not corrected, would
of the appellee. The decision of the Commission shall be final and executory after ten (10) calendar secured through fraud or coercion, cause grave or irreparable damage or
including graft and corruption; injury to the petitioner;
days from receipt thereof by the parties.
 If made purely on questions of law; and  (c) If a party by fraud, accident, mistake or
 If serious errors in the findings of facts are excusable negligence has been prevented
Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the raised which would cause grave or from taking an appeal;
Commission in the enforcement of decisions, awards or orders. (As amended by Section 12, Republic irreparable damage or injury to the  (d) If made purely on questions of law; or
Act No. 6715, March 21, 1989) appellant.  (e) If the order or resolution will cause
injustice if not rectified. (As amended by
NOTES: En Banc Resolution No. 05-14, Series of

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2014) ◦ the prevention of miscarriage of justice or of unjust enrichment; and

 Petition may include an order to suspend
or stop the execution of the LA's order or
resolution.
Mcburnie vs. Ganzon, GR No. 178034, Oct. 17, 2013
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013
ANDREW JAMES MCBURNIE, Petitioner, 
vs. EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.
DOCTRINE: Rule of appeal bonds and guidelines for reduction of appeal bond.
• The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure
◦ No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of
a bond in a reasonable amount in relation to the monetary award.
◦ GUIDELINES in filing and acceptance of motions to reduce appeal bond (Sec. 6 Rule VI of the 2011
NLRC Rules of Prcedure)
◦ (a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
◦ (b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of
a provisional cash or surety bond equivalent to ten percent (10,) of the monetary award subject of the
appeal, exclusive of damages and attorney's fees;
◦ (c) Compliance with the foregoing conditions shall suffice to suspend the running of the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
◦ (d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the
final amount o bond that shall be posted by the appellant, still in accordance with the standards of
meritorious grounds and reasonable amount; and
◦ (e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount o the provisional bond, the appellant shall be given a fresh period o ten 1 0) days from notice o
the NLRC order within which to perfect the appeal by posting the required appeal bond.
• The NLRC has full discretion to grant or deny the motion to reduce bond.
• Court has relaxed this requirement under certain exceptional circumstances in order to resolve controversies
on their merits. These circumstances include:
◦ the fundamental consideration of substantial justice;
◦ special circumstances of the case combined with its legal merits, and the amount and the issue
involved.
◦ The bond requirement in appeals involving monetary awards has been and may be relaxed in
meritorious cases, including instances in which (1) there was substantial compliance with the Rules, (2)
surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a
liberal interpretation of the requirement of an appeal bond would serve the desired objective of
resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the reglementary period.
• To ensure that the provisions of Section 6, Rule VI of the NLRC Rules
of Procedure that give parties the chance to seek a reduction of the
appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant,
all motions to reduce bond that are to be filed with the NLRC shall be
accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall
provisionally be deemed the reasonable amount of the bond in the
meantime that an appellant’s motion is pending resolution by the
Commission and it shall exclude damages and attorney’s fees.
• The requirement on the existence of a "meritorious ground" delves
on the worth of the parties’ arguments, taking into account their
respective rights and the circumstances that attend the case.
• As regards the requirement on the posting of a bond in a
"reasonable amount," the Court holds that the final determination
thereof by the NLRC shall be based primarily on the merits of the
motion and the main appeal

8
 LABOR REVIEW
Lepanto Consolidated Mining vs. Icao, GR No. 196047, Jan. 15, 2014
G.R. No. 196047               January 15, 2014
LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner, vs. BELIO ICAO, Respondent.
DOCTRINE:
• in the case: the petitioner asked the court to release the bond in another case and apply it in this case as their
appeal bond
• An appeal is not a matter of right, but is a mere statutory privilege. It may be availed of only in the manner
provided by law and the rules. Thus, a party who seeks to exercise the right to appeal must comply with the
requirements of the rules; otherwise, the privilege is lost.
• where the Court said that when the law does not clearly provide a rule or norm for the tribunal to follow in
deciding a question submitted, but leaves to the tribunal the discretion to determine the case in one way or
another, the judge must decide the question in conformity with justice, reason and equity, in view of the
circumstances of the case. Applying this doctrine, the Court ruled in the present case that petitioner
substantially complied with the mandatory requirement of posting an appeal bond
◦ The appeal was filed within the 10-day reglementary period.
◦ The petitioner has an unencumbered amount of money in the form of cash in the custody of the NLRC DOCTRINE :
– which was in another case
◦ The cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to cover
the appeal bond in the amount of P345,879.45 required in the present case.
◦ The ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that
workers will receive the money awarded in their favor when the employer’s appeal eventually fails.
• the Court has liberally applied the NLRC Rules and the Labor Code provisions on the posting of an appeal
bond in exceptional cases.
Sadol vs. Pilipinas Kao, GR No. 87530, June 13, 1990
G.R. No. 87530 June 13, 1990
GERONIMO SADOL, petitioner,  bond. The filing of the motion to reduce bond shall not stop the running of the period to perfect appeal.
vs.PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO GOMEZ & NLRC SECOND
DIVISION, respondents.
9
DOCTRINE:
• whether or not a party who failed to appeal from a decision of the labor arbiter to the National Labor
Relations Commission (NLRC) within the ten (10) day reglementary period can still participate in a separate
appeal timely interposed by the adverse party by filing a motion for reconsideration of a decision of the
NLRC on such appeal.
◦ There is no question that private respondents failed to file a timely appeal from the decision of the labor
arbiter while the petitioner was able to interpose his appeal within the reglementary period. However,
as petitioner had filed a timely appeal the NLRC had jurisdiction to give due course to his appeal and
render the decision of August 28, 1988, a copy of which was furnished respondents. Having lost the
right to appeal can respondent PKI file a motion for reconsideration of said decision? The Court
resolves the question in the affirmative. The rules of technicality must yield to the broader interest of
justice. It is only by giving due course to the motion for reconsideration that was timely filed that the
NLRC may be able to equitably evaluate the conflicting versions of facts presented by the parties.
Ong vs. CA, GR No. 152494, Sept. 22, 2004
MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING, petitioner, vs. THE COURT OF APPEALS, CONRADO DABAC, BERNABE
TAYACTAC, MANUEL ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS,
JAIME ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER,
RENATO ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA, respondents.
• the right to appeal is not a natural right or a part of due process, it is merely a statutory privilege, and may be
exercised only in the manner and in accordance with the provisions of law. The party who seeks to avail of
the same must comply with the requirements of the rules. Failing to do so, the right to appeal is lost.
• in case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
• A mere notice of appeal without complying with the other requisite aforestated shall not stop the running of
the period for perfecting an appeal.
• The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the amount of the
 LABOR REVIEW
• While the bond requirement on appeals involving monetary awards has been relaxed in certain cases, this
can only be done where there was substantial compliance of the Rules or where the appellants, at the very
least, exhibited willingness to pay by posting a partial bond.
c. Article 224 (formerly Art. 218); Powers of the Commission
Art. 218. Powers of the Commission. The Commission shall have the power and authority:
1. To promulgate rules and regulations governing the hearing and disposition of cases before it and its
regional branches, as well as those pertaining to its internal functions and such rules and regulations
as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic Act
No. 6715, March 21, 1989)
2. To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance
and testimony of witnesses or the production of such books, papers, contracts, records, statement of
accounts, agreements, and others as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in pursuance of this Code;
3. To conduct investigation for the determination of a question, matter or controversy within its
jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has
been summoned or served with notice to appear, conduct its proceedings or any part thereof in public
or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an
expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties
to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or
irregularity whether in substance or in form, give all such directions as it may deem necessary or
expedient in the determination of the dispute before it, and dismiss any matter or refrain from further
hearing or from determining the dispute or part thereof, where it is trivial or where further
proceedings by the Commission are not necessary or desirable; and
4. To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in
accordance with law.
A person guilty of misbehavior in the presence of or so near the Chairman or any member of the
Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same,
including disrespect toward said officials, offensive personalities toward others, or refusal to be
sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to
do so, may be summarily adjudged in direct contempt by said officials and punished by fine not
exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be the
Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or
imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter.
10
The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the
execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by
such person of a bond on condition that he will abide by and perform the judgment of the
Commission should the appeal be decided against him. Judgment of the Commission on direct
contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the
Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court;
and (As amended by Section 10, Republic Act No. 6715, March 21, 1989)
5. To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts
or to require the performance of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any
decision in favor of such party: Provided, That no temporary or permanent injunction in any case
involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing
the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a
complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of
fact by the Commission, to the effect:
 
1. That prohibited or unlawful acts have been threatened and will be
committed and will be continued unless restrained, but no injunction or
temporary restraining order shall be issued on account of any threat,
prohibited or unlawful act, except against the person or persons,
association or organization making the threat or committing the
prohibited or unlawful act or actually authorizing or ratifying the same
after actual knowledge thereof;
 
2. That substantial and irreparable injury to complainant’s property will
follow;
3. That as to each item of relief to be granted, greater injury will be
inflicted upon complainant by the denial of relief than will be inflicted
upon defendants by the granting of relief;
4. That complainant has no adequate remedy at law; and
 
5. That the public officers charged with the duty to protect complainant’s
property are unable or unwilling to furnish adequate protection.
 
Such hearing shall be held after due and personal notice thereof has been served, in such manner as
 LABOR REVIEW
the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief
Executive and other public officials of the province or city within which the unlawful acts have been
threatened or committed, charged with the duty to protect complainant’s property: Provided, however,
that if a complainant shall also allege that, unless a temporary restraining order shall be issued without
notice, a substantial and irreparable injury to complainant’s property will be unavoidable, such a
temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to
justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary
restraining order shall be effective for no longer than twenty (20) days and shall become void at the
expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall
be issued except on condition that complainant shall first file an undertaking with adequate security in
an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss,
expense or damage caused by the improvident or erroneous issuance of such order or injunction,
including all reasonable costs, together with a reasonable attorney’s fee, and expense of defense
against the order or against the granting of any injunctive relief sought in the same proceeding and
subsequently denied by the Commission.
 
The undertaking herein mentioned shall be understood to constitute an agreement entered into by the
complainant and the surety upon which an order may be rendered in the same suit or proceeding
against said complainant and surety, upon a hearing to assess damages, of which hearing, complainant
and surety shall have reasonable notice, the said complainant and surety submitting themselves to the
jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party
having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary
remedy by suit at law or in equity: Provided, further, That the reception of evidence for the
application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters
who shall conduct such hearings in such places as he may determine to be accessible to the parties
and their witnesses and shall submit thereafter his recommendation to the Commission. (As amended
by Section 10, Republic Act No. 6715, March 21, 1989)
NOTES:
The powers of the NLRC may be summed up as:
◦ power to make rules and regulations pertaining to its functions
◦ the power to administer oaths and issue subpoena and summons
◦ the power to investigate, hear and decide disputes within its jurisdiction
◦ the power to hold persons in contempt
◦ the power to issue restraining orders and injunctions
◦ power to conduct ocular inspection
◦ the power to decide appealed cases
Yupangco Cotton Mills vs. CA, GR No. 126332, Jan. 16, 2002
DOCTRINE:
11
• 1. REMEDIAL LAW; ACTIONS; FORUM SHOPPING; CONSTRUED. — In Golangco
v. Court of Appeals, we held: "What is truly important to consider in determining whether forum
shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks
different courts and/or administrative agencies to rule on the same or related causes and/or grant the
same or substantially the same reliefs, in the process creating possibility of conflicting decisions being
rendered by the different for a upon the same issues. ". . . "There is no forum-shopping where two
different orders were questioned, two distinct causes of action and issues were raised, and two
objectives were sought." The rule is that "for forum-shopping to exist both actions must involve the
same transactions, the same circumstances. The actions must also raise identical causes of action,
subject matter and issues. In Chemphil Export & Import Corporation v. Court of Appeals, we ruled
that: "Forum-shopping or the act of a party against whom an adverse judgment has been rendered in
one forum, of seeking another (and possible) opinion in another forum (other than by appeal or the
special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other would make a favorable
disposition." DTAcIa
2. ID.; ID.; THIRD PARTY CLAIMANT; MAY AVAIL OF SEVERAL ALTERNATIVE REMEDIES FOR THE
PROTECTION OF HIS INTEREST. — A third party whose property has been levied upon by a sheriff to
enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests.
The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party
from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. Thus,
a third party may avail himself of the following alternative remedies: a) File a third party claim with the
sheriff of the Labor Arbiter, and b) If the third party claim is denied, the third party may appeal the denial to the
NLRC. Even if a third party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff. This finds support in
Section 17 (now 16), Rule 39, Revised Rules ofCourt. In light of the above, the filing of a third party claim with
the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for
recovery of property and damages with the Regional Trial Court. And, the institution of such complaint will not
make petitioner guilty of forum shopping.
3. ID.; ID.; ID.; FILING OF SEPARATE CIVIL ACTION FOR RECOVERY OF OWNERSHIP OF THE
PROPERTY LEVIED SHOULD NOT BE CONSIDERED INTERFERENCE UPON THE MAIN ACTION. —
Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of the parties to the
action, he could not, strictly speaking, appeal from the order denying his claim, but should file a separate
reivindicatory action against the execution creditor or the purchaser of the property after the sale at public
auction, or a complaint for damages against the bond filed by the judgment creditor in favor of the sheriff. And
in Lorenzana v. Cayetano, we ruled that: "The rights of a third-party claimant should not be decided in the
action where the third-party claim has been presented, but in a separate action to be instituted by the third
person. The appeal that should be interposed if the term 'appeal' may properly be employed, is a separate
reivindicatory action against the execution creditor or the purchaser of the property after the sale at public
auction, or complaint for damages to be charged against the bond filed by the judgment creditor in favor of the
 LABOR REVIEW

sheriff. Such reivindicatory action is reserved to the third-party claimant." A separate civil action for
recovery of ownership of the property would not constitute interference with the powers or processes of the
Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The
property levied upon being that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a
claim and prima-facie showing of ownership by the petitioner, cannot be considered as interference
voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by
agreement of the parties. (As amended by Section 14, Republic Act No. 6715, March 21, 1989).

PAL vs. NLRC, GR No. 120567, March 20, 1998 Diokno vs. Cacdac, GR No. 168475, July 4, 2007
[G.R. No. 120567. March 20, 1998.] PHILIPPINE AIRLINES, INC. vs. NATIONAL LABOR RELATIONS
COMMISSION Gr. No. 168475|July 4, 2007
EMILIO E. DIOKNO, VICENTE R. ALCANTARA, ANTONIO Z. VERGARA, JR., DANTE M. TONG, JAIME
DOCTRINE: C. MENDOZA, ROMEO M. MACAPULAY, ROBERTO M. MASIGLAT, LEANDRO C. ATIENZA, ROMULO
AQUINO, JESUS SAMIA, GAUDENCIO CAMIT, DANTE PARAO, ALBERTO MABUGAT, EDGARDO
• From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates from VILLANUEVA, JR., FRANCISCO ESCOTO, EDGARDO SEVILLA, FELICITO MACASAET, and JOSE Z.
TULLO, Petitioners, v. HON. HANS LEO J. CACDAC, in his capacity as Director of the Bureau of Labor
"any labor dispute" upon application by a party thereof, which application if not granted "may cause grave Relations, DOLE, MANILA, MED-ARBITER TRANQUILINO C. REYES,EDGARDO DAYA, PABLO LUCAS,
or irreparable damage to any party or render ineffectual any decision in favor of such party." LEANDRO M. TABILOG, REYNALDO ESPIRITU, JOSE VITO, ANTONIO DE LUNA, ARMANDO
YALUNG, EDWIN LAYUG, NARDS PABILONA, REYNALDO REYES, EVANGELINE ESCALL, ALBERTO
• It is an essential requirement that there must first be a labor dispute between the contending parties before ALCANTARA, ROGELIO CERVITILLO, MARCELINO MORELOS, FAUSTINO ERMINO, JIMMY S.
the labor arbiter. In the present case, there is no labor dispute between the petitioner and private respondents ONG, ALFREDO ESCALL, NARDITO C. ALVAREZ, JAIME T. VALERIANO, JOHNSON S. REYES,
as there has yet been no complaint for illegal dismissal filed with the labor arbiter by the private respondents GAUDENCIO JIMENEZ, JR., GAVINO R. VIDANES, ARNALDO G. TAYAO, BONIFACIO F. CIRUJANO,
against the petitioner. EDGARDO G. CADVONA, MAXIMO A. CAOC, JOSE O. MACLIT, JR., LUZMINDO D. ACORDA, JR.,
• The jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and, therefore, it cannot LEMUEL R. RAGASA, and GIL G. DE VERA, Respondents
entertain the private respondents' petition for injunction which challenges the dismissal orders of petitioner.
• Labor dispute - any controversy or matter concerning terms and conditions of employment or the Ponente: Chico-Nazario, J
association or representation or persons in negotiating, fixing, maintaining, changing, or arranging the terms
and conditions of employment regardless of whether or not the disputants stand in the proximate relation of Doctrine:
employers and employees.
• Article 226 (now 232) of the Labor Code “the Bureau of Labor Relations and the Labor Relations Divisions
• Controversy - a litigated question; adversary proceeding in a court of law; a civil action or suit , either at in the regional offices of the Department of Labor shall have original and exclusive authority to act, at their
law or in equity; a justiciable dispute. own initiative or upon request either or both parties, on all inter-union and inter-union conflicts, and all
disputes, grievance or problems arising from or affecting labor-management relations in all workplaces
whether agricultural or non-agricultural, except those arising from the implementation or interpretation of
• Justiciable controversy - is one involving an active antagonistic assertion of a legal right on one side and
collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary
denial thereof on the other concerning a real, and not a mere theoretical question or issue.
arbitration.”
• Intra-union Dispute refers to any conflict between and among union members, and includes all disputes or
2. Article 232 (formerly Art. 226) Bureau of Labor Relations grievances arising from the violation or disagreement over any provision of the constitution and by-laws of a
Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor Relations Divisions union, including cases arising from chartering or affiliation of labor organizations or from any violation of
in the regional offices of the Department of Labor, shall have original and exclusive authority to act, at the rights and conditions of union membership provided for in the code. \
their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts,
and all disputes, grievances or problems arising from or affecting labor-management relations in all
workplaces, whether agricultural or non-agricultural, except those arising from the implementation or Montano vs. Verceles, GR. No. 168583, July 6, 2010
interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or ATTY. ALLAN S. MONTAÑO, Petitioner, vs. ATTY. ERNESTO C. VERCELES, Respondent. G.R. No. 168583              

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 LABOR REVIEW
July 26, 2010
DOCTRINE:
• The BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union
disputes. Such disputes include the conduct or nullification of election of union and workers’ association
officers.
• dispute as the same involves member-unions of a federation arising from disagreement over the provisions
of the federation’s constitution and by-laws.
3. National Conciliation and Mediation Board Jurisdiction
THE 2011 NLRC RULES OF PROCEDURE, AS AMENDED
SECTION 8. MANDATORY CONCILIATION AND MEDIATION CONFERENCE. –
(a) The mandatory conciliation and mediation conference shall be called for the purpose of: (1)
amicably settling the case upon a fair compromise; (2) determining the real parties in interest;
(3) determining the necessity of amending the complaint and including all causes of action; (4)
defining and simplifying the issues in the case; (5) entering into admissions or stipulations of
facts; and (6) threshing out all other preliminary matters. The Labor Arbiter shall personally
preside over and take full control of the proceedings and may be assisted by the Labor
Arbitration Associate in the conduct thereof. Provided that, in areas where there is no Labor
Arbiter assigned, conciliation and mediation may be conducted by a Labor Arbitration Associate,
any other NLRC personnel with sufficient training and knowledge on conciliation and
mediation, authorized by the Chairman or a duly authorized personnel of the Department of
Labor and Employment pursuant to any Memorandum of Agreement executed for this purpose.
(As amended by En Banc Resolution No. 05-14, Series of 2014)
(b) Conciliation and mediation efforts shall be exerted by the Labor Arbiters or the said
authorized personnel all throughout the mandatory conferences. (As amended by En Banc
Resolution No. 05-14, Series of 2014) Any agreement entered into by the parties whether in
partial or full settlement of the dispute shall be reduced into writing and signed by the parties
and their counsel or the parties’ authorized representatives, if any.
(c) In any case, the compromise agreement shall be approved by the Labor Arbiter, if after
explaining to the parties, particularly to the complainants, the terms, conditions and
consequences thereof, he/she is satisfied that they understand the agreement, that the same was
entered into freely and voluntarily by them, and that it is not contrary to law, morals, and public
policy.
(d) A compromise agreement duly entered into in accordance with this Section shall be final and
binding upon the parties and shall have the force and effect of a judgment rendered by the Labor
Arbiter.
13
(e) The mandatory conciliation and mediation conference shall, except for justifiable grounds, be
terminated within thirty (30) calendar days from the date of the first conference.
(f) No motion for postponement shall be entertained except on meritorious grounds and when
filed at least three (3) days before the scheduled hearing. (3a
SECTION 9. EFFECT OF FAILURE OF SETTLEMENT. – If the parties fail to agree on an amicable
settlement, either in whole or in part, during the mandatory conciliation and mediation conference, the
Labor Arbiter or the said duly authorized personnel shall proceed to the other purposes of the said
conference as enumerated in Section 8(a) hereof. (4a) (As amended by En Banc Resolution No. 05-14,
Series of 2014)
NOTES:
What is the purpose of mandatory conciliation and mediation conference?
 The mandatory conciliation and mediation conference shall be called for the purpose of (1) amicably settling
the case upon a fair compromise; (2) determining the real parties in interest; (3) determining the necessity of
amending the complaint and including all causes of action; (4) defining and simplifying the issues in the
case; (5) entering into admissions or stipulations of facts; and (6) threshing out all other preliminary matters
 The National Conciliation and Mediation Board is an attached agency under the supervision and control of
the DOLE. It was created to handle the conciliation, mediation, and voluntary arbitration functions of the
BLR and is composed of an administrator and 2 deputies.
 Functions:
1.) Formulate policies, programs, procedures, standards, operation manuals and guidelines on
effective mediation and conciliation of labor disputes
2.) Preventive mediation and conciliation functions
3.) Coordinate and maintain linkages with other sectors and institutions and other government
authorities concerned with matters relative to the prevention and settlement of labor disputes
4.) Formulate policies, plans, programs, standards, procedures, operations manuals and guidelines
pertaining to the promotion of cooperative and non-adversarial schemes, grievance handling,
voluntary arbitration and other voluntary modes of dispute settlement
5.) Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations
and compile arbitration awards and decisions
6.) Provide counseling and preventive mediation assistance particularly in the administration of
collective agreements
7.) Monitor and exercise technical supervision over BLR programs implemented in regional
offices
8.) Perform other such function provided by law or assigned by the DOLE secretary
 the NLRC rules of procedure requires the LA to call and preside over a mandatory conciliation and
mediation conference to try to amicably settle the case, to define and simplify the issues, or thresh out other
preliminary matters.
 The rules encourages compromise settlement but they have to be approved by the LA
 even at the APPEAL STATE of a a LA's decision, amicable settlement is a preferred mode
 NLRC DECISION: SECTION 15. MOTIONS FOR RECONSIDERATION. – Motion for reconsideration of
any decision, resolution or order of the Commission shall not be entertained except when based on palpable
 LABOR REVIEW
or patent errors; provided that the motion is filed within ten (10) calendar days from receipt of decision,
resolution or order, with proof of service that a copy of the same has been furnished, within the reglementary
period, the adverse party; and provided further, that only one such motion from the same party shall be
entertained. (15a)
 if MOTION FOR RECONSIDERATION FAILED BEFORE THE NLRC: may avail of the special civil
action under Rule 65 of the Rules of Court → case may go the CA or the SC as both of them have the power
to review the NLRC decision. The decision under the principle of hierarchy of courts must be filed before
the CA
 GENERAL RULE: quasi-judicial agencies decision are accorded respect and finality as such findings are
supported by substantial evidences
◦ EXCEPT:
▪ conclusion is a finding grounded on speculations, surmises and conjectures
▪ the inferences made are manifestly mistaken, absurd or impossible
▪ there is a grave abuse of discretion
▪ there is a misapprehension of facts
▪ the court in arriving at its findings went beyond the issues of the case and the same are contrary to
the admissions of the parties or the evidence presented
▪ where respondent commission has sustained irregular procedures and through the invocation of
summary methods, including rules on appeal, has affirmed an order which tolerates violation of
due process
▪ where the rights of a party were prejudiced because the administrative findings, conclusions or
decisions were in violation of constitutional provisions, in excess of statutory authority, or
jurisdiction, made upon irregular procedure, vitiated by fraud, imposition or mistake, not
supported by substantial evidence
4. Regional Directors Jurisdiction
Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor Relations Divisions
in the regional offices of the Department of Labor, shall have original and exclusive authority to act, at
their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts,
and all disputes, grievances or problems arising from or affecting labor-management relations in all
workplaces, whether agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or
voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by
agreement of the parties. (As amended by Section 14, Republic Act No. 6715, March 21, 1989).
Art. 227. Compromise agreements. Any compromise settlement, including those involving labor
standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional
office of the Department of Labor, shall be final and binding upon the parties. The National Labor
Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in
case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through
fraud, misrepresentation, or coercion.
14
[ Art. 228. Indorsement of cases to Labor Arbiters.
a.Except as provided in paragraph (b) of this Article, the Labor Arbiter shall entertain only cases endorsed
to him for compulsory arbitration by the Bureau or by the Regional Director with a written notice of such
indorsement or non-indorsement. The indorsement or non-indorsement of the Regional Director may be
appealed to the Bureau within ten (10) working days from receipt of the notice.
a.The parties may, at any time, by mutual agreement, withdraw a case from the Conciliation Section and
jointly submit it to a Labor Arbiter, except deadlocks in collective bargaining.] (Repealed by Section 16,
Batas Pambansa Bilang 130, August 21, 1981)
Art. 229. Issuance of subpoenas. The Bureau shall have the power to require the appearance of any
person or the production of any paper, document or matter relevant to a labor dispute under its jurisdiction,
either at the request of any interested party or at its own initiative.
Art. 230. Appointment of bureau personnel. The Secretary of Labor and Employment may appoint, in
addition to the present personnel of the Bureau and the Industrial Relations Divisions, such number of
examiners and other assistants as may be necessary to carry out the purpose of the Code. (As amended by
Section 15, Republic Act No. 6715, March 21, 1989)
Art. 231. Registry of unions and file of collective bargaining agreements. The Bureau shall keep a
registry of legitimate labor organizations. The Bureau shall also maintain a file of all collective bargaining
agreements and other related agreements and records of settlement of labor disputes and copies of orders
and decisions of voluntary arbitrators. The file shall be open and accessible to interested parties under
conditions prescribed by the Secretary of Labor and Employment, provided that no specific information
submitted in confidence shall be disclosed unless authorized by the Secretary, or when it is at issue in any
judicial litigation, or when public interest or national security so requires.
Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall submit
copies of the same directly to the Bureau or the Regional Offices of the Department of Labor and
Employment for registration, accompanied with verified proofs of its posting in two conspicuous places in
the place of work and ratification by the majority of all the workers in the bargaining unit. The Bureau or
Regional Offices shall act upon the application for registration of such Collective Bargaining Agreement
within five (5) calendar days from receipt thereof. The Regional Offices shall furnish the Bureau with a
copy of the Collective Bargaining Agreement within five (5) days from its submission.
The Bureau or Regional Office shall assess the employer for every Collective Bargaining Agreement a
registration fee of not less than one thousand pesos (P1,000.00) or in any other amount as may be deemed
appropriate and necessary by the Secretary of Labor and Employment for the effective and efficient
administration of the Voluntary Arbitration Program. Any amount collected under this provision shall
accrue to the Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall undertake or assist in the publication of all final decisions,
orders and awards of the Secretary of Labor and Employment, Regional Directors and the
Commission. (As amended by Section 15, Republic Act No. 6715, March 21, 1989)
 LABOR REVIEW
Art. 232. Prohibition on certification election. The Bureau shall not entertain any petition for
certification election or any other action which may disturb the administration of duly registered existing
collective bargaining agreements affecting the parties except under Articles 253, 253-A and 256 of this
Code. (As amended by Section 15, Republic Act No. 6715, March 21, 1989)
Art. 233. Privileged communication. Information and statements made at conciliation proceedings shall
be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators
and similar officials shall not testify in any court or body regarding any matters taken up at conciliation
proceedings conducted by them.
ART. 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested
party, the Regional Director of the Department of Labor and Employment or any of the duly authorized
hearing officers of the Department is empowered, through summary proceeding and after due notice, to
hear and decide any matter involving the recovery of wages and other monetary claims and benefits,
including legal interest, owing to an employee or person employed in domestic or household service
or househelper under this Code, arising from employer-employee relations: Provided, That such complaint
does not include a claim for reinstatement: Provided further, That the aggregate money claims of each
employee orhousehelper does not exceed Five thousand pesos (P5,000.00). The Regional Director or
hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the
filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this
Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary
of Labor and Employment or the Regional Director directly to the employee or  househelper concerned.
Any such sum not paid to the employee or househelper because he cannot be located after diligent and
reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the
Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days from the submission of the last pleading required or
allowed under itsrules.chan robles virtual law library
The Secretary of Labor and Employment or his duly authorized representative may supervise the payment
of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any
employee or househelper under this Code.(As amended by Section 2, Republic Act No. 6715, March 21,
1989)
15
NOTES:
 In a March 2012 decision, the Supreme Court delineates the jurisdiction of the DOLE Secretary vis-à-vis that of the
NLRC.
      The Court ruled that no limitation in the law was placed upon the power of the DOLE to determine the existence
of an employer-employee relationship. No procedure was laid down where the DOLE would only make a preliminary
finding, that the power was primarily held by the NLRC. x  x  x
      The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to
follow, the same guide the courts themselves use. The elements to determine the existence of an employment
relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; (4) the employer’s power to control the employee’s conduct. The use of this test is not solely limited to the
NLRC. The DOLE Secretary, or his or her representatives, can utilize the same test, even in the course of inspection,
making use of the same evidence that would have been presented before the NLRC. x  x  x
      If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the
matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee
relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed
in the first place. x  x  x
      To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the
Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC.
      If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If
a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly
with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement.  If a complaint is filed with the NLRC, and there is still an
existing employer-employee relationship, the jurisdiction is properly with the DOLE.  The findings of the DOLE,
however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.  (People’s
Broadcasting Service vs. The Secretary of the Department of Labor and Employment, G.R. No. 179652, March 6,
2012)
 The DOLE Secretary may assume jurisdiction over a labor dispute, or certify it to the NLRC for compulsory
arbitration, if, in his opinion, it may cause or likely to cause a strike or lockout in an industry indispensable
to the national interest. The President may also exercise the power to assume jurisdiction over a labor
dispute.
 MEDIATOR-ARBITRATOR (MED-ARB) refers to an officer in the DOLE Regional office or in the bureau
of labor relations who is authorized to hear and decide representation cases, inter/intra-union disputes and
related labor relations disputes EXCEPT cancellation of union registration cases
◦ Representation Cases – proceedings intended to determine which one, among rival unions, should be
officially designated or certified as the exclusive representative of the employees in bargaining
collectively with their employee
 LABOR REVIEW
◦ Inter-Union Dispute – refers to any conflict between legitimate labor unions involving representation
questions for purposes of CBA or to any dispute between legitimate labor unions
◦ Intra-Union Dispute – conflict between member unions.
 Examples of inter/intra-union disputes
◦ cancellation of union registration
◦ audit of union funds
◦ violation of union members' rights
 APPEAL FROM MED-ARB DECISION and REGIONAL DIRECTOR → appeal to the Bureau of Labor
Relations. Bureau Director may be appealed to the Office of the Secretary of DOLE
a. Article 128- Visitorial and Enforcement Powers
Art. 128. Visitorial and enforcement power.
a.The Secretary of Labor and Employment or his duly authorized representatives, including labor
regulation officers, shall have access to employer’s records and premises at any time of the day or
night whenever work is being undertaken therein, and the right to copy therefrom, to question any
employee and investigate any fact, condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules
and regulations issued pursuant thereto.
a.Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases
where the relationship of employer-employee still exists, the Secretary of Labor and Employment or
his duly authorized representatives shall have the power to issue compliance orders to give effect to
the labor standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where the employer contests the findings
of the labor employment and enforcement officer and raises issues supported by documentary proofs
which were not considered in the course of inspection. (As amended by Republic Act No. 7730, June
2, 1994).
 
An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this Article may be appealed to the latter. In case said order involves a monetary award, an
appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from. (As amended by Republic Act No. 7730,
June 2, 1994)
16
 
b.The Secretary of Labor and Employment may likewise order stoppage of work or suspension of
operations of any unit or department of an establishment when non-compliance with the law or
implementing rules and regulations poses grave and imminent danger to the health and safety of
workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine
whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the
violation is attributable to the fault of the employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of work or suspension of operation.
c.It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective
the orders of the Secretary of Labor and Employment or his duly authorized representatives issued
pursuant to the authority granted under this Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders issued in accordance with this Article.
d.Any government employee found guilty of violation of, or abuse of authority, under this Article
shall, after appropriate administrative investigation, be subject to summary dismissal from the service.
 
e.The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep
and maintain such employment records as may be necessary in aid of his visitorial and enforcement
powers under this Code.
Maternity Children’s Hospital vs. Sec. of Labor, GR No. 79809, June 30,
1989
[G.R. No. 78909. June 30, 1989.]
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,
President, petitioner, vs. THE HONORABLE SECRETARY OF LABOR AND THE
REGIONAL DIRECTOR OF LABOR, REGION X, respondents.
• 1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; LABOR STANDARDS,
CONSTRUED. — Labor standards refer to the minimum requirements prescribed by existing laws, rules,
and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of
Labor Standards Cases in the Regional Office, dated September 16, 1987).
• 2. ID.; ID.; ID.; LABOR DISPUTES; POWER OF THE REGIONAL DIRECTOR TO ADJUDICATE
MONEY CLAIMS; CONDITIONS. — Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases, and is therefore
empowered to adjudicate money claims, provided there still exists an employer-employee relationship,
 LABOR REVIEW

and the findings of the regional office is  not contested by the employer concerned. (Art. 128-b of Brokenshire Memorial Hospital vs. Minister of Labor, GR. No. 74621,
the Labor Code,as amended by E.O. No. 111)
Feb. 7, 1990
• 3. ID.; ID.; MORE POLICY INSTRUCTIONS NOS. 6 AND 37; ADJUDICATORY POWERS OF THE
REGIONAL DIRECTOR REQUIRES THE EXISTENCE OF EMPLOYER-EMPLOYEE
[G.R. No. 74621. February 7, 1990.]
RELATIONSHIP. — The provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over
BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner, vs. THE HONORABLE
Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) gave the Regional Directors adjudicatory
MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE MEMORIAL HOSPITAL
powers over uncontested money claims discovered in the course of normal inspection, provided an
EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A.
employer-employee relationship still exists.
AFUAN, respondents.
• 4. ID.; ID.; ID.; ID.; CONFIRMED BY E.O. NO. 111. — E.O. 111 authorizes a Regional Director to order
compliance by an employer with labor standards provisions ofthe Labor Code and other legislation. It is Our
• 1. LABOR AND SOCIAL LEGISLATION;  REPUBLIC ACT 6715; JURISDICTION OF REGIONAL
considered opinion however, that the inclusion of the phrase, "The provisions of Article 217 of this Code to
DIRECTORS AND OTHER HEARING OFFICERS OVER MONEY CLAIMS; REQUISITES.
the contrary notwithstanding and in cases where the relationship of employer-employee still exists" . . . in
— RA 6715 amended Art. 129 and Art. 217 of the Labor Code. It will be observed that what in fact
Article 128(b), as amended, above-cited, merely confirms/reiterates the enforcement adjudication authority
conferred upon Regional Directors and other hearing officers of the Department of Labor (aside from
of the Regional Director over uncontested money claims in cases where an employer-employee relationship
the Labor Arbiters) adjudicative powers, i.e., the power to try and decide, or hear and determine any
still exists.
claim brought before them for recovery of wages, simple money claims, and other benefits, is  Republic
• 5. ID.; ID.; ID.; ID.; ID.; INTENTION OF POLICY INSTRUCTIONS NOS. 6 AND 37, GIVEN WEIGHT
Act 6715, provided that the following requisites concur, to wit: 1) The claim is presented by an
AND ENTITLED TO GREAT RESPECT. — The amendment of the visitorial and enforcement powers of
employee or person employed in domestic or household service, or househelper under the code; 2) The
the Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy
claimant, no longer being employed, does not seek reinstatement; and 3) The aggregate money claim
Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases
of the employee or househelper does not exceed five thousand pesos (P5,000.00).
where an employer-employee relationship still exists. This intention must be given weight and entitled to
• 2. ID.; ID.; ID.; ID.; IN ABSENCE OF ANY OF THE REQUISITES, LABOR ARBITERS HAVE
great respect.
EXCLUSIVE ORIGINAL JURISDICTION. — In the absence of any of the three (3) requisites, the Labor
• 6. ID.; LABOR LAWS; EXECUTIVE ORDER NO. 111, A CURATIVE STATUTE WITH
Arbiters have exclusive original jurisdiction over all claims arising from employer-employee relations, other
RETROSPECTIVE APPLICATION. — The proceedings before the Regional Director must, perforce, be
than claims for employee's compensation, social security, medicare and maternity benefits.
upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive
• 3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — Considering further that the aggregate claims involve an
order "to be considered in the nature of a curative statute with retrospective application." (Progressive
amount in excess of P5,000.00, We find it more appropriate that the issue of petitioner hospital's liability
Workers' Union, et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No.
therefor, including the proposal of petitioner that the obligation of private respondents to the former in the
L-47629, May 28, 1979, 90 SCRA 331).
aggregate amount of P507,237.57 be used to offset its obligations to them, be ventilated and resolved, not in
• 7. ID.; LABOR CODE; ENFORCEMENT POWER OF THE REGIONAL DIRECTOR CANNOT BE
a summary proceeding before the Regional Director under Article 128 of the Labor Code, as amended, but
UPHELD IN CASES OF SEPARATED EMPLOYEES. — There is no legal justification for the award in
in accordance with the more formal and extensive proceeding before the Labor Arbiter. Nevertheless, it
favor of those employees who were no longer connected with the hospital at the time the complaint was
should be emphasized that the amount of the employer's liability is not quite a factor in determining the
filed, having resigned therefrom in 1984. The enforcement power of the Regional Director cannot legally be
jurisdiction of the Regional Director. However, the power to order compliance with labor standards
upheld in cases of separated employees. Article 129 of the Labor Code,cited by petitioner is not applicable as
provisions may not be exercised where the employer contends or questions the findings of the labor
said article is in aid of the enforcement power of the Regional Director; hence, not applicable where the regulation officers and raises issues which cannot be determined without taking into account evidentiary
employee seeking to be paid underpayment of wages is already separated from the service. His claim is matters not verifiable in the normal course of inspection, as in the case at bar.
purely a money claim that has to be the subject of arbitration proceedings and therefore within the original • 4. ID.; ID.; CONSIDERED A CURATIVE STATUTE. — RA 6715 is in the nature of a curative statute.
and exclusive jurisdiction of the Labor Arbiter. Curative statutes have long been considered valid in our jurisdiction, as long as they do not affect vested
rights. In this case, We do not see any vested right that will be impaired by the application of RA 6715.
a. Adjudicatory Power • 5. CONSTITUTIONAL LAW; SUPREME COURT; HAS POWER TO ULTIMATELY DECLARE A LAW
UNCONSTITUTIONAL; WITHOUT THE DECLARATION, LEGISLATION REMAINS OPERATIVE. —

17
 LABOR REVIEW

The Supreme Court is vested by the Constitution with the power to ultimately declare a law
unconstitutional. Without such declaration, the assailed legislation remains operative and can be the source
of rights and duties especially so in the case at bar when petitioner complied with Wage Order No. 5 by
paying the claimants the total amount of P163,047.50, representing the latter's minimum wage increases up
to October 16, 1984, instead of questioning immediately at that stage before paying the amount due, the
validity of the order on grounds of constitutionality. The Regional Director is plainly without the authority to
declare an order or law unconstitutional and his duty is merely to enforce the law which stands valid, unless
otherwise declared by this Tribunal to be unconstitutional. On our part, We hereby declare the assailed Wage
Orders as constitutional, there being no provision of the 1973 Constitution (or even of both the Freedom
Constitution and the 1987 Constitution) violated by said Wage Orders, which Orders are without doubt
for the benefit of labor

D.O No. 83-07, Series of 2007

 Designation of DOLE Regional Directors and Asst. Regional
Directors as Ex-Officio Voluntary Arbitrators

18
 LABOR REVIEW
5. Grievance Machinery and Voluntary Arbitration
  Title VII-A
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
 
Article. 260. Grievance machinery and voluntary arbitration. - The parties to a Collective Bargaining
Agreement shall include therein provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from
the interpretation or implementation of their Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies.
All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days
from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or
panel of Arbitrators has been selected by the parties as described above.
Article. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company personnel
policies referred to in the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no longer be treated as
unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and
19
refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining
Agreement.
Article. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also hear and decide all otherlabor  disputes including
unfair labor practices and bargaining deadlocks.
Article. 262-A. Procedures. - The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the
power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or
issues subject of the dispute, including efforts to effect a voluntary settlement between parties.
All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third
party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator
or panel of Voluntary Arbitrators. Hearing may be adjourned for cause or upon agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary
Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of
the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts
and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of
the copy of the award or decision by the parties.
Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or
the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the
Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution
requiring either the sheriff of the Commission or regular courts or any public official whom the parties
may designate in the submission agreement to execute the final decision, order or award.
Article. 262-B. Cost of voluntary arbitration and Voluntary Arbitrator’s fee. - The parties to a
Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of
voluntary arbitration including the Voluntary Arbitrator’s fee. The fixing of fee of Voluntary
Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration
Fund, shall take into account the following factors:
(a) Nature of the case;
(b) Time consumed in hearing the case;
(c) Professional standing of the Voluntary Arbitrator;
 LABOR REVIEW

(d) Capacity to pay of the parties; and down a formal process for settling complaints and stresses an employee’s right to air his gripes and expect redress,
is one of the chief tools of employee relations. It is designed to give employees every opportunity to be heard. Its
(e) Fees provided for in the Revised Rules of Court. aim is to eliminate or reduce dissatisfaction, misunderstanding, or complaint, which can affect the employee’s
morale and reduce efficiency. A good grievance procedure guarantees that individual gripes will be fully heard and
considered.
a. Grievance Machinery Definition The law mandates no particular set-up for grievance machinery. Rather, Article 260 of the Labor Code, as
incorporated in RA 6715 provides for single grievance machinery in the workplace.
What is a Grievance?
 A grievance is defined by the collective bargaining agreement.    
Reasons for Establishing Grievance Machinery 
Generally speaking, a grievance is any difference or dispute between an employee or the union, and the employer
with respect to the interpretation, application, or of compliance with any terms and conditions of the contract.   Generally, the grievance procedure:
Other authors defined Grievance as any dissatisfaction, complaint, irritation, or misunderstanding (real or    1.      Provides for peaceful resolution of disputes;
imagined) of an employee arising from his job, or his relationship with his employer, any violation of the CBA or   2.      Provides a systematic way to resolve problems through fact finding
of the Labor Code that he thinks or feels he is wronged or treated unfairly (Sison 1991). 
3.      Provides a method of interpreting the contract
In the broadest sense, grievance includes all dissatisfaction that arise in an organization whether unionized or not. 
4.      Protects the integrity of the contractual agreement
If the term grievance is to be applied in the loose or generic sense, any dispute or controversy respecting terms and
5.      Improves the efficiency of the organization
conditions of employment which an employee or group of employees may present to the employer can be a
grievance, even without a union or CBA. Under this interpretation, any complaint, question or problem that an 6.      Can improve labor-management relations
employee or group of employees may wish to take up or discuss with the employer respecting terms and 7.      Identifies problems in plant operations or the contract itself
conditions of employment for the purpose of resolving or satisfying the same, constitutes a grievance. The
8.      Keeps the lines of communication between the parties open during the life of the contract
expansion of original and exclusive jurisdiction of voluntary arbitrators to include questions arising from the
interpretation and enforcement of company policies has the effect of widening  the meaning and interpretation of 9.      It gives employees an opportunity to voice their concerns
grievance to include a situation where there is no collective bargaining agent and no CBA.     10. Provides the individual union member with the ability to appeal a decision and ultimately allows the
  member to resolve the problem through exhausting his/her rights under the grievance procedure, or possibly by
overturning the decision of management through arbitration
The Grievance Machinery 
 
Article 260 of the Labor Code requires parties to establish a grievance machinery for the adjustment and
resolution of grievances arising from the interpretation or implementation of a collective bargaining agreement or Typical Steps in the Grievance Process 
the interpretation or enforcement of company personnel policies.  Essentially, the grievance process involves union and management addressing the grievance and attempting to
Grievances submitted to the grievance machinery and not settled within seven calendar days shall automatically reach an acceptable resolution.  The specifics of the grievance process will be spelled out in the labor agreement.   
be referred to voluntary arbitration.  Typically, the contract outlines the specific steps in grievance handling, specifying time limits for both sides.  The
The grievance procedure refers to the internal rules of procedures intended to resolve all issues arising from the ramifications of not adhering to these time limits are usually identified as well, e.g., the grievance may be
implementation and interpretation of the CBA.   considered waived or settled or may automatically move on to the next step. 
Established by the parties in their CBA, this grievance procedure leads to voluntary arbitration as the final step. It Step 1.  Shop floor level.  Presentation by the employee problems to the foreman or supervisor who would
is part of the continuous process of collective bargaining, which intended to promote friendly dialogue between listen to the employee and record the facts of the problem. The supervisor should settle the problem within
labor and management as a means of maintaining industrial peace. three (3) days. If the employee is not satisfied, proceed to step 2.  
It is an orderly process established in the CBA whereby the employer, the employee and the union, present to each Step 2.  Plant level. Discussion of the problem between the employee, the supervisor, and the department
other a complaint or dissatisfaction, in the hope of getting it settled quickly. Grievance machinery, which lays manager takes place. If no satisfactory solution within seven days, proceed to step 3. 

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 LABOR REVIEW
Step 3. Top level. Discussion of the problem between the supervisors, the department manager, the
complainant, and top management (President or General Manager). If no satisfactory solution within ten
(10) days, proceed to step 4.  The Commission, its Regional Offices and the Regional Directors of the Department of Labor
Step 4. Arbitrator’s level.  The problem or case may be taken to voluntary arbitration for final decision. 
 
Characteristics of Effective Grievance Machinery  provided in the Collective Bargaining Agreement.
1.      The successive steps in the procedure, the method of presenting grievances or disputes, and the method of
taking an appeal from one step to another should be so clearly stated in the agreement as to be readily understood
by all employees, union officials and  management representatives. 
  2.      The procedure should be adaptable to the handling of various types of grievances and disputes, which
come under the terms of the agreement.
3.      The procedure should be designed to facilitate the settlement of grievances and disputes as soon as possible
after the arise. To this end: 
 The agreement should provide adequate stated time limits for the presentation of grievances and
disputes, thus rendering of decisions, and the taking of appeals.
 Issues should be clearly formulated at the earliest possible moment. In all cases, which cannot be
settled in the first informal discussions, the positions of both sides should be reduced to writing.
 Management and union should encourage their representatives to settle at the lower steps
grievances, which do not involve broad questions or policy, or of contract interpretation and should delegate
sufficient authority to them to accomplish this end.
 Provision should be made for priority handling of grievances involving discharge, suspension, or
other disciplinary action.
   4.      The procedure should be open to the submission of grievances by all parties to the agreement.
http://ncmb.ph/VAP/Overview/grievance_machinery.htm
a. Article 267 (formerly Art. 261) Jurisdiction of Voluntary Arbitrators
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The
Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with
21
the economic provisions of such agreement.
and Employment shall not entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration
Jurisdiction of Voluntary Arbitrators
Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators (Art. 261-262, Labor Code) 
Exclusive and original jurisdiction to hear and decide all grievances:
1.Arising  from the implementation or interpretation of the collective bargaining agreements;
2.Arising from the interpretation or enforcement of company personnel policies;
3.Wage distortion issues arising from the application of any wage orders in organized
establishments (Par. 4, Art. 124, RA 6727);
            “Where the application of any prescribed wage increase by virtue of a law or   Wage Order issued by
any Regional Board results in distortions or wage structure within an establishment, the employer and the
union shall negotiate to correct the distortions. Any dispute arising from wage distortion shall be resolved
through the grievance procedure under their collective bargaining agreement and, if it remains unresolved,
through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be
decided by the voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to
voluntary arbitration.” 
4.Unresolved grievances arising from the interpretation and implementation of the productivity
incentive programs under RA 6971.
Sec. 9, RA 6971 
            Sec. 9. Disputes and Grievances – Whenever disputes, grievances, or other matters arise from the
interpretation or implementation of the productivity incentive program, the labor-management committee
shall meet to resolve the dispute, and may seek the assistance of the National Conciliation and Mediation
Board of the Department of Labor and Employment for such purpose. Any dispute which remains
unresolved within twenty (20) days from the time of its submission to the labor-management committee shall
be submitted for voluntary arbitration in line with the pertinent provisions of the Labor Code as amended. 
The Productivity incentives program shall include the name(s) if the voluntary arbitrator or panel of
voluntary arbitrators previously chosen and agreed upon by the labor-management committee. 
Concurrent Jurisdiction
 Any other labor dispute upon agreement of the party may be submitted to a voluntary arbitrator or panel of voluntary
arbitrators. 
 LABOR REVIEW

Before or at any stage of the compulsory arbitration process, the parties may opt to submit to their dispute to voluntary
arbitration. 
The NLRC and its Regional Branches as well as the Regional Directors of the DOLE are prohibited from entertaining
disputes, grievances or matters under the exclusive and original jurisdiction of the voluntary arbitrator or panel of
voluntary arbitrators. They shall immediately dispose and refer the same to the appropriate grievance machinery or
voluntary arbitration provided in the collective bargaining agreement.
 
Powers of the Voluntary Arbitrators or Panel of Voluntary Arbitrators (Sec. 4, Rule XI, Book V)
1.To hold hearings;
1.To receive evidence;
2.To take whatever action is necessary to resolve the issue/s subject of the dispute;
3.To conciliate or mediate to aid the parties in reaching a voluntary settlement of the dispute;
4.To issue a writ of execution to enforce final decisions, orders, resolutions or awards.

Carlos L. Octavio vs. PLDT Co., GR No. 175492, Feb. 27, 2013

DOCTRINE:
• Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation of the
parties CBA should be resolved in accordance with the grievance procedure embodied therein. It also
provides that all unsettled grievances shall be automatically referred for voluntary arbitration as prescribed
in the CBA.
• It is settled that when parties have validly agreed on a procedure for resolving grievances and to submit a
dispute to voluntary arbitration then that procedure should be strictly observed. Moreover, we have held time
and again that before a party is allowed to seek the intervention of the court, it is a precondition that he
should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the administrative officer concerned every
opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted
first before the courts judicial power can be sought.

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 LABOR REVIEW
II. RECRUITMENT & PLACEMENT
1. Article 13 (b): Definition of Recruitment & Placement
Art. 13. Definitions.
b."Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring
or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a
fee, employment to two or more persons shall be deemed engaged in recruitment and placement.
Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or entity other than the public
employment offices, shall engage in the recruitment and placement of workers.
Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except through the
Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from
this provision.
Art. 25. Private sector participation in the recruitment and placement of workers.  Pursuant to national
development objectives and in order to harness and maximize the use of private sector resources and initiative in the
development and implementation of a comprehensive employment program, the private employment sector shall
participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and
regulations as may be issued by the Secretary of Labor.
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether
for profit or not.
Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-
five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens
shall be permitted to participate in the recruitment and placement of workers, locally or overseas.
Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit are required to have such
substantial capitalization as determined by the Secretary of Labor.
Art. 29. Non-transferability of license or authority. No license or authority shall be used directly or indirectly by
any person other than the one in whose favor it was issued or at any place other than that stated in the license or
23
authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address,
appointment or designation of any agent or representative including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of Labor.
Art. 30. Registration fees. The Secretary of Labor shall promulgate a schedule of fees for the registration of all
applicants for license or authority.
Art. 31. Bonds. All applicants for license or authority shall post such cash and surety bonds as determined by the
Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms
and conditions of employment as may be appropriate.
Art. 32. Fees to be paid by workers. Any person applying with a private fee-charging employment agency for
employment assistance shall not be charged any fee until he has obtained employment through its efforts or has
actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing the
amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees.
Art. 33. Reports on employment status. Whenever the public interest requires, the Secretary of Labor may direct
all persons or entities within the coverage of this Title to submit a report on the status of employment, including job
vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other employment
data.
• No person or entity other than the following shall engage in the recruitment and placement of workers,
locally or overseas.
◦ public employment offices
◦ private recruitment entities
◦ private employment agencies
◦ POEA
◦ construction contractors if authorized by the DOLE and the CIA
◦ members of the diplomatic corps but hiring must be through POEA
other persons or entities as may be authorized by the DOLE Secretary
◦ name hires
◦ Shipping or manning agents or representatives
• Disqualified from recruitment and placement of workers for overseas employment whether for profit or
not (REVISED POEA RULES AND REGULATIONS GOVERNING THE RECRUITMENT AND
EMPLOYMENT OF LANDBASED OVERSEAS FILIPINO WORKERS OF 2016)
◦ a. Travel agencies and sales agencies of airline companies;
◦ b. Officers or members of the Board of any corporation or partners in a partnership engaged in the
business of a travel agency;
 LABOR REVIEW
◦ c. Corporations and partnerships, where any of its officers, members of the board or partners is
also an officer, member of the board or partner of a corporation or partnership engaged in the
business of a travel agency;
◦ d. Individuals, partners, officers or directors of an insurance company who make, propose or
provide an insurance contract under the compulsory insurance coverage for agency-hired Overseas
Filipino Workers;
◦ e. Sole proprietors, partners or officers and members of the board with derogatory records, such
as, but not limited to the following:
▪ 1. Those convicted, or against whom probable cause or prima facie finding of guilt is
determined by a competent authority, for illegal recruitment, or for other related crimes or
offenses committed in the course of, related to, or resulting from, illegal recruitment, or for
crimes involving moral turpitude;
▪ 2. Those agencies whose licenses have been revoked for violation of RA 8042 (Migrant
Workers and Overseas Filipinos Act of 1995), as amended, PD 442 (Labor Code of the
Philippines), as amended, and RA 9208 (Trafficking in Persons Act of 2003), as amended,
and their implementing rules and regulations;
▪ 3. Those agencies whose licenses have been cancelled, or those who, pursuant to the Order of
the Administrator, were included in the list of persons with derogatory record for violation of
recruitment laws and regulations; and
◦ Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation Authority of the Philippines (CAAP), international
airport authorities, and other government agencies directly involved in the implementation of RA
8042, as amended, and/or any of his/her relatives within the fourth civil degree of consanguinity or
affinity.
2. Article 13 (b): When there is a presumption of Recruitment & Placement
People v. Panis, L-58674-77, July 11, 1986
[G.R. No. L-58674-77. July 11, 1986.]
PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. DOMINGO PANIS, Presiding
Judge of the Court of First Instance of Zambales & Olongapo City, Branch III and
SERAPIO ABUG, respondents.
DOCTRINE
 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 proviso merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity dealing
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with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be
deemed" create that presumption
 The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and
placement even if only one prospective worker is involved.
3. Illegal Recruitment
a. Definition of Illegal Recruitment under Labor Code
Art. 38. Illegal recruitment.
a.Any recruitment activities, including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed illegal
and punishable under Article 39 of this Code. The Department of Labor and Employment or any
law enforcement officer may initiate complaints under this Article.
a.Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal
recruitment is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.
b.The Secretary of Labor and Employment or his duly authorized representatives shall have the
power to cause the arrest and detention of such non-licensee or non-holder of authority if after
investigation it is determined that his activities constitute a danger to national security and public
order or will lead to further exploitation of job-seekers. The Secretary shall order the search of
the office or premises and seizure of documents, paraphernalia, properties and other implements
used in illegal recruitment activities and the closure of companies, establishments and entities
found to be engaged in the recruitment of workers for overseas employment, without having
been licensed or authorized to do so.
a. Definition of Illegal Recruitment under the Migrant Worker’s Act (R.A.
No. 8042)
II. ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of
 LABOR REVIEW
canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes
referring, contact services, promising or advertising for employment abroad, whether for profit
or not, when undertaken by a non-license or non-holder of authority contemplated under Article
13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the
Philippines. Provided, that such non-license or non-holder, who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, whether committed by any persons, whether a non-
licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a
worker pay any amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment
or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ any worker who has
not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or
by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies, remittances of
foreign exchange earnings, separations from jobs, departures and such other matters or
information as may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof by
the parties up to and including the period of the expiration of the same without the approval of
the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an officer or member
of the Board of any corporation engaged in travel agency or to be engaged directly on indirectly
in the management of a travel agency;
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(k) To withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations other than those authorized under the Labor Code and its
implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the Department of Labor
and Employment; and
(m) Failure to reimburse expenses incurred by the workers in connection with his documentation
and processing for purposes of deployment, in cases where the deployment does not actually
take place without the worker's fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered as offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large
scale if committed against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction of
their business shall be liable.
• 2 KINDS OF ILLEGAL RECRUITER
◦ 1. Non-licensee or nonholder of authority – not having been issued a license or authority to
recruit, commits illegal recruitment when it performs any of the acts defined in the law as
recruitment and placement such as canvassing, enlisting, contracting workers; or any of the 14
acts enumerated in Sec 6 of RA 8042
◦ 2. Licensed recruiter – possesses a license or authority to recruit. It may be charged with
illegal recruitment only when it commits any of the 13 wrongful acts enumerated in Sect 6
• ESSENTIAL ELEMENT: presupposes deceit or misrepresentation
Constitutionality –
Lazo v. Salac, G.R. No. 152642, November 13, 2012
DOCTRINE
• Section 6 is clear and unambiguous. By its terms, persons who engage in "canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers" without the appropriate government
license or authority are guilty of illegal recruitment whether or not they commit the wrongful acts
enumerated in that section. On the other hand, recruiters who engage in the canvassing, enlisting, etc. of
OFWs, although with the appropriate government license or authority, are guilty of illegal recruitment only
if they commit any of the wrongful acts enumerated in Section 6.
• in fixing uniform penalties for each of the enumerated acts under Section 6, Congress was within its
prerogative to determine what individual acts are equally reprehensible, consistent with the State policy of
according full protection to labor, and deserving of the same penalties. It is not within the power of the
 LABOR REVIEW
Court to question the wisdom of this kind of choice.
• there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations of
Section 6 of R.A. 8042 that differs from the venue established by the Rules on Criminal Procedure. Indeed,
Section 15(a), Rule 110 of the latter Rules allows exceptions provided by laws.
• pending adjudication of this case, that the liability of corporate directors and officers is not automatic. To
make them jointly and solidarily liable with their company, there must be a finding that they were remiss in
directing the affairs of that company, such as sponsoring or tolerating the conduct of illegal activities
b. Article 13: License v. Authority
LICENSE AUTHORITY
means a document issued by the Department of means a document issued by the Department of
Labor authorizing a person or entity to operate Labor authorizing a person or association to
a private employment agency. engage in recruitment and placement activities
as a private recruitment entity.
c. Article 34: Prohibited Acts
Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder
of authority:
a.To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any
amount greater than that actually received by him as a loan or advance;
a.To furnish or publish any false notice or information or document in relation to recruitment or
employment;
b.To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.
c.To induce or attempt to induce a worker already employed to quit his employment in order to
offer him to another unless the transfer is designed to liberate the worker from oppressive terms
and conditions of employment;
d.To influence or to attempt to influence any person or entity not to employ any worker who has
not applied for employment through his agency;
e.To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
f.To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
g.To fail to file reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as
26
may be required by the Secretary of Labor.
h.To substitute or alter employment contracts approved and verified by the Department of Labor
from the time of actual signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of Labor;
i.To become an officer or member of the Board of any corporation engaged in travel agency or to
be engaged directly or indirectly in the management of a travel agency; and
j.To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules
and regulations.
d. Additional grounds (prohibited acts) added by Migrant Worker’s act,
apart from Art. 34
(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent
(8%) per annum, which will be used for payment of legal and allowable placement fees
and make the migrant worker issue, either personally or through a guarantor or
accommodation party, postdated checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker
is required to avail of a loan only from specifically designated institutions, entities or
persons;
(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker
after the latter's employment contract has been prematurely terminated through no fault of
his or her own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker
is required to undergo health examinations only from specifically designated medical
clinics, institutions, entities or persons, except in the case of a seafarer whose medical
examination cost is shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker
is required to undergo training, seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or persons, except for recommendatory
trainings mandated by principals/shipowners where the latter shoulder the cost of such
trainings;
(6) For a suspended recruitment/manning agency to engage in any kind of recruitment
activity including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the
overseas Filipino worker or deduct from his or her salary the payment of the cost of
insurance fees, premium or other insurance related charges, as provided under the
 LABOR REVIEW
compulsory worker's insurance coverage
• PERSONS LIABLE FOR ILLEGAL RECRUITMENT
◦ • Principals accomplices and accessories
◦ For Juridical person – officers having control, management or direction of their
business who are responsible for the commission of the offense and the responsible
employees/agents shall be liable
• EMPLOYEE WHEN LIABLE
◦ Employee may be held liable as principal if it shown that, together with his
employer, he actively and consciously participated in illegal recruitment
• FOREIGN EMPLOYER in case of final and executory judgment → automatically
disqualified without further proceedings from participating in the POEA and from
recruiting and hiring Filipino workers until and unless it fully satisfied the judgment
award
• POEA has no power to issue search or arrest warants : Salazar vs Achacoso
◦ A person who has committed any act that constitutes IR may be arrested after the
issuance by a judge of a WOA
• for conviction
e. Illegal recruitment as economic sabotage
 IR shall be considered an offense involving economic sabotage if any of the
 QUALIFYING CIRCUMSTANCES exists:
◦ Committed by a syndicate
◦ Committed in large scale
 •Large scale and in by a syndicate are separate or separate categories → They need not
coincide in the same case
 People vs. F. Hernandez - Where only one complainant filed individual complaints, there is
no illegal recruitment in large scale, but the three conspiring recruited can be held guilty of
illegal recruitment by a syndicate
 People vs. Tan Tiong Meng – The accused appellant’s act of accepting placement fees from
job applicants and representing to said applicants that he could get them jobs in Taiwan
constitute recruitment and placement under the LC. The offense committed against 6
complainants in this case is illegal recruitment in large scale punishable under Art 39 (a) of the
LC with life imprisonment and 1k fine
 Hon. Patricia St. Tomas vs. Salac - Where the illegal recruitment is proved, but the elements
of “large scale” or “syndicate” are absent, the accused can only be convicted of “simple” IR
f. Differences: Simple Illegal recruitment, illegal recruitment in large scale,
illegal recruitment by a syndicate
SIMPLE IR Where the illegal recruitment is proved, but the elements of “large scale”
or “syndicate” are absent, the accused can only be convicted of “simple”
IR
undertakes any recruitment activity defined in Art 13(b) or any prohibited
27
practice enumerated in Art 34 and 38 of the Labor Code
Does not have a licence or authority to lawfully engage in the recruitment
and placement of workers
LARGE SCALE IR Carried out AGAINST THREE OR MORE PERSONS, individually or as
a group
SYNDICATE IR Carried out BY A GROUP OF THREE OR MORE PERSONS conspiring
or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme
g. Illegal Recruitment v. Estafa
 IR is a crime separate and distinct from estafa
 illegal recruitment is a MALUM PROHIBITUM where criminal intent is not necessary for
conviction, while estafa is MALUM IN SE where criminal intent of the accused is necessary
 A worker who suffers pecuniary damage, regardless of amount, as a result of previous or
simultaneous false pretense resorted to by nonlicensee or or nonholder of authority may
complain of estafa under Art 315 aside from IR
 The court said that a person convicted of IR under LC can be convicted for violation of
Estafa in RPC provided that the elements of the crime are present. The elements are:
1. That the accused defrauded another by abuse of confidence or by means of deceit
1. That the damage or prejudice capable of pecuniary estimation is caused to the
offended party or third person
 Estafa under Art 315, par 2 of the RPC is committed by any person who defrauds another by
using a fictitious name, or falsely pretends to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions or by means of similar deceits
executed prior to or simultaneously with the commission of the fraud. The offended party must
have relied on the false pretense, fraudulent act or fraudulent means of the accused-appellant and as a
result thereof, the offended party suffers damages
ILLEGAL RECRUITMENT ESTAFA
MALUM PROHIBITUM MALUM IN SE
Criminal intent is not necessary Criminal intent is imperative
 LABOR REVIEW
Penalized under Labor Code Penalized under RPC
Limited in scope Wider in scope and covers deceits whether
related or not relate to recruitment activities
h. Liabilities of the local employment agency and the employer
 Principals accomplices and accessories
 For Juridical person – officers having control, management or direction of their business who are
responsivle for the commission of the offense and the responsible employees/agents shall be liable
 In case of a final and executory judgment against a foreign employer/principal ! it shall be
automatically disqualified without further proceedings, from participating in the POEA and from
recruiting and hiring Filipino workers until and unless it fully satisfied the judgment award
i. Theory of Imputed Knowledge
Sunace International vs. NLRC G.R. No. 161757, January 25, 2006
DOCTRINE:
• the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer
Xiong, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be
imputed to its agent Sunace.
• The message does not provide evidence that Sunace was privy to the new contract executed after the
expiration of the original contract. There being no substantial proof that Sunace knew of and consented to
be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it
and its owner cannot be held solidarily liable for any of Divinas claims arising from the 2-year
employment extension.
• Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship
with its foreign principal when, after the termination of the original employment contract, the foreign
principal directly negotiated with Divina and entered into a new and separate employment contract in
Taiwan||
j. Rule on the pre-termination of contract of a migrant worker
Serrano v. Gallant, G.R. No. 167614, March 24, 2009
ANTONIO M. SERRANO, Petitioner, vs. Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC., Respondents. [G.R. No. 167614  March 24, 2009]
28
DOCTRINE:
• In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally
discharged were treated alike in terms of the computation of their money claims: they were uniformly
entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A.
No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired
portion of one year or more in their employment contract have since been differently treated in that their
money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with
fixed-term employment.
• the clause “or for three months for every year of the unexpired term, whichever is less” provided in the
5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of OFWs
to equal protection of the laws. The subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-
month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but
none on the claims of other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar disadvantage. Moreover, the subject
clause does not state or imply any definitive governmental purpose; hence, the same violates not just
petitioner’s right to equal protection, but also his right to substantive due process under Section 1, Article
III of the Constitution.
• The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner,
DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in
which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas
overtime pay is compensation for all work "performed" in excess of the regular eight hours, and holiday
pay is compensation for any work "performed" on designated rest days and holidays.
◦ By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and
holiday pay in the computation of petitioner's monetary award, unless there is evidence that he
performed work during those periods
Yap v. Thenamaris, G.R. No. 179532, May 30, 2011
DOCTRINE:
• court declared unconstitutional the clause "or for three months for every year of the unexpired term,
whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042 in the case ofSerrano v.
Gallant Maritime Services, Inc. 
• As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords
no protection; it creates no office; it is inoperative as if it has not been passed at all ||| (Yap v. Thenamaris
Ship's Management, G.R. No. 179532, [May 30, 2011], 664 PHIL 614-629)
 LABOR REVIEW

◦ The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity
and fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a
statute prior to a determination of unconstitutionality is an operative fact and may have consequences
which cannot always be ignored. The past cannot always be erased by a new judicial declaration.|
• The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of
Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work "performed" in excess of the regular eight
hours, and holiday pay is compensation for any work "performed" on designated rest days and holidays|||  clinic.
of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine
of not less than Five hundred thousand pesos (P500,000.00) nor more than One million
pesos (P1,000,000.00).
If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be
deported without further proceedings
In every case, conviction shall cause and carry the automatic revocation of the license or
registration of the recruitment/manning agency, lending institutions, training school or medical

• A close perusal of the contract reveals that the tanker allowance of US$130.00 was not categorized as a
bonus but was rather encapsulated in the basic salary clause, hence, forming part of the basic salary of
petitioner.|||
4. Regulation and Enforcement
a. Article 35: Suspension or cancellation of license or authority
Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall
have the power to suspend or cancel any license or authority to recruit employees for overseas
employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas
Employment Development Board, or for violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions.
b. Rule on remittance of foreign exchange earnings
 Art. 22. Mandatory remittance of foreign exchange earnings. It shall be mandatory for all
Filipino workers abroad to remit a portion of their foreign exchange earnings to their
families, dependents, and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor.
◦ Mandatory remittance is done by remitting a portion of their salary through BSP and
DOLE authorized agents
◦ Exceptions:
▪ filipino serviceman working in the US military installations
▪ where the worker's immediate family members, dependents or beneficiaries are
residing with him abroad
▪ immigrants and filipino professionals and employees working with UN agencies or
specialized bodies

a. Penalties of Illegal Recruitment under R.A. No. 8042 NATURE OF JOB FOREIGN EXCHANGE
SEC. 7. PENALTIES - REMITTANCE (% OF
BASIC SALARY)
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not more than twelve (12) years and a fine not less Seaman or Mariners 80.00%
than two hundred thousand pesos (P200,000.00) nor more than five hundred thousand pesos Workers for Filipino Contractors and construction companies 70.00%
(P500,000.00).
Professionals whose employment contract provide for lodging 70.00%
 (b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos facilities
(P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal Professionals without board and lodging 50.00%
recruitment constitutes economic sabotage as defined herein.
Domestic and other service workers 50.00%
 Provided, however, that the maximum penalty shall be imposed if the person illegally recruited All other workers 50.00%
is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.
(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment

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 LABOR REVIEW

5. Article 18: Direct Hiring, and Rules & Regulations Governing Overseas
Employment: Exceptions
Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except
through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the
diplomatic corps, international organizations and such other employers as may be allowed by the Secretary
of Labor is exempted from this provision.

Rationale for the Law

- Art. 18 is intended to enable the monitoring of overseas contract workers and
- to ensure that Filipino overseas workers are afforded fair and equitable recruitment and employment
practices thereby assuring the best terms and conditions of employment and facilitating the enforcement of
employment contracts.
2. Exception to the Ban on Direct-Hiring
- prohibition against direct hiring of overseas workers does not apply to workers hired by:
a. members of the diplomatic corps;
b. international organizations; and
c. other employers who may be allowed by the Secretary of Labor and Employment to directly hire
their workers.
c. Name Hire : A name hire is a worker who is able to secure an overseas employment on his own
without the assistance or participation of any agency.
4. Registration of Name Hires
- Name hires should register with the POEA by submitting the following documents:
a. Employment contract
b. Valid passport
c. Employment visa or work permit, or equivalent document
d. Certificate of medical fitness
e. Certificate of attendance to the required employment orientation/ briefing.

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 LABOR REVIEW
III. LABOR STANDARDS
1. Hours of Work
a. Article 82: Who are covered and excluded from the provision
Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments
and undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who are dependent on him
for support, domestic helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certaint
• EXCLUDED EMPLOYEES
◦ Art 82 to 96 applies to all employees in all establishment except the following:
1. Government employees
2. Managerial employees, including officers or members of the managerial staff
3. Field personnel
4. Employer’s family members who depend upon his for support
5. Domestic helpers
6. Persons in the personal service of others
7. Workers who are paid by results as determined under DOLE regulations
i. Health Workers
• For public health workers, a specific provision of special law provides for an “on call
pay” (Sect. 15, RA 7305)
◦ o On call pay equivalent to 50% of his/her regular wage
◦ o On call status refers to a condition when the public health workers are called
upon to respond to urgent or immediate need for health/medical assistance or relief
working during emergencies such that he cannot devote his time for his own use
• Health personnel in government service are excluded from coverage of Art 82 to 96
• Their work hours, night shift differential pay and other employment benefits are specified under RA
7305 (March 26, 1992)
• Health personnel covered by 48 hour week – resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, and all other hospital or clinic personnel, medical secretaries
◦ The practice of making resident physicians work 24 hours a day = violates Art 83
◦ x permissible even if they are given additional compensation
i. Compressed Work Week DOLE ADVISORY NO 02-04
31
• GR: Overtime compensation cannot be waived
•
◦ E: Compressed Work Week arrangement
COMPRESSED WORK WEEK - Under this scheme, the number of work days is reduced but
the number of work hours in a day is increased to more than 8 hours, but no OT pay may be
claimed
• Alternative arrangement whereby the normal workweek is reduced to less than 6 days but the total
number of work hours per week shall remain at 48 hours
• • DOLE ADVISORY NO. 02, series 2004 - Taking into account the emergency of new technology
and the continuing restructuring and modernization of the work process, encourages voluntary
adoption of compressed workweek schemes
• VALID ONLY IF THE CONDITIONS STATED IN THE ADVISORY ARE OBSERVED,
OTHERWISE, OT PAYMENT MAY STILL BE CLAIMED
1. The scheme is expressly and voluntarily supported by majority of the
employees affected
2. In firms using substances or operating in conditions that are hazardous to
health, a certification is needed from an accredited safety organization or the firm’s
safety committee that work beyond 8 hours is within the limits or levels of exposure set
by DOLE’s occupational safety and health standards
2. DOLE regional office is duly notified
• EFFECTS
◦ If adopted according to the preceding conditions, the CWW agreement produces the
following effects:
1. Unless there is a more favorable practice existing in the firm, work beyond 8 hours
will not be compensable by OT premium, provided that the total no. of hours worked
per day will not exceed 12 hours. In any case, any work performed beyond 12 hours a
day or 48 hours a week shall be subject to OT premium
2. Consistent with Art 85 of the LC, employees under the CWW scheme are entitled to
meal period of not less than 60 minutes. The right of employees to rest day as well as
holiday pay, rest day or payday leaves in accordance with the law or applicable CBA or
company practice shall not be impaired
3. Adoption of the CWW scheme shall in no case result in diminution of existing
benefits. Reversion to normal eight hour work day shall not constitute diminution of
benefits. The reversion shall be considered a legitimate exercise of management
prerogatives, provided that the employer shall give the employees prior notice of such
reversion within a reasonable period of time
• DOLE shall recognize only those CWW schemes that have been entered into consistent with the advisory
a. Article 83: Normal hours of work & exceptions
 LABOR REVIEW
Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed
eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for
meals, except where the exigencies of the service require that such personnel work for six (6)
days or forty-eight (48) hours, in which case, they shall be entitled to an additional
compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For
purposes of this Article, "health personnel" shall include resident physicians, nurses,
IRR states guiding principles to determine compensable or non-compensable hours
nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
• The normal hours of work of any employee shall not exceed eight (8) hours a day.
◦ HOW “WORK DAY” IS COUNTED
▪ 8 hour labor law → understood to be the 24 hour period which commences from
the time the employee regularly starts to work
• • It is not the same as calendar day from 12 MN to 12 MN, unless the
employee starts working at 12MN
• • If an employee works from 8 am to 4 pm
◦ o 8 am to 8 am the following day = work day
◦ o 8 to 4 pm = regular working hours
◦ o Any work in excess of 8 hours within the 24 hour period = overtime
work regardless of whether work covers 2 calendar days
◦ o Any work in excess of 8 hours not falling within the 24 hour period = X
considered overtime work
• PART TIME WORK is not prohibited to have less than 8 hours work a day/
• WORK HOURS OF HEALTH PERSONNEL
◦ Health personnel covered by 48 hour week – resident physicians, nurses,
nutritionists, dieticians, pharmacists, social workers, laboratory technicians paramedical
technicians, psychologists, midwives, and all other hospital or clinic personnel, medical
secretaries
◦ he practice of making resident physicians work 24 hours a day = violates Art 83
▪ x permissible even if they are given additional compensation
▪ E: X apply 48 hour work week if there is a training agreement between the resident
physician and the hospital and the training program is duly accredited or approved
by the appropriate government agency ! no E to E relationship on account of the
approved training program
• “An act prescribing 48 hours a week of labor for government and private hospitals or
clinic personnel” → repealed with the passage of the LABOR CODE
b. Article 84: Hours Worked
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Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is
required to be on duty or to be at a prescribed workplace; and (b) all time during which an
employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours worked.
Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give his employees not less than sixty (60) minutes time-
off for their regular meals.
• Sec. 4 Principles in Determining Hours Worked – the following general principals shall
govern in determining whether the time spent by an employee is considered hours
worked for purpose of this Rule:
◦ (a) All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in productive labor or
involve physical or mental exertion
◦ (b) An employee need not leave the premises of the workplace in order that his rest
period shall not be counted, it being enough that he stops working, may rest
completely and may leave his workplace, to go elsewhere, whether within or
outside the premises of his workplace
◦ (c) If the work performed was necessary, or it benefitted the employer, or the
employee could not abandon his work at the end of his normal working hours
because he had no replacement, at all time spent for such work shall be considered
as hours worked, if the work was with the knowledge of his employer or immediate
supervisor
◦ (d) the time during which an employee is inactive by reason of interruptions in his
work beyond his control shall be considered time either if the imminence of the
resumption of work requires the employee’s presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the employee’s own
interest
• PRELIMINARY ACTIVITIES → those done before work and after actual work →
deemed to be performed during working hours where such activities are controlled or
required by the employer and are pursued necessarily and primarily for the employer’s
benefit.
• WORKING WHILE SLEEPING
◦ Sleeping time may be considered working time ! if it is subject to serious
interruptions or takes place under conditions substantially less desirable than would
be likely to exist in the employee’s home
◦ • Sleeping time is not regarded as working time ! if there is an opportunity for
comparatively uninterrupted sleep under fairly desirable conditions, even though
the employee is required to remain on or near the employer’s premises and must
hold himself in readiness for a call to action employment
◦ this is dependent on the agreement between the parties
• ON CALL
 LABOR REVIEW
◦ When the work is not continuous, the time when the laborer can leave his work
and rest completely shall = not be counted in the computation
◦ However, if they are required to be in their place of work before or after regular
working hours and within the call of their employers ! the time they stay in the
place of work should not be discounted from their working hours
◦ Example: Truck drivers who are required by the company to be at the place of work
before or after working hours does not do anything at work but could not leave
because he may at any time be called to work ! X prejudice time he spent not
actually working
• WITH CELLULAR PHONE OR OTHER CONTACT DEVICE If employee is kept
within reach thru a cellphone or other contact device = X considered to be in work status
• TRAVEL TIME
◦ Time spent walking, riding, travelling to or from place of work = X constitute work
time
◦ Depends upon the kind of travel involved
▪ 1. Travel from home to work
• • Engaged in the ordinary home-to work travel which is normal incident
of employment
• • Exception: When an employee receives an emergency call outside of his
regular working hours and is required to travel to his place of business or
some other work site = working time
▪ 2. Travel that is all in the day’s work
• • Travel as part of his principal activity, such as travel from jobsite to
jobsite during the workday = counted as hours worked
• • Travel to a place to receive meeting report = counted as hours worked
▪ 3. Travel away from home
• • Travel that keeps an employee away from home overnight is travel
away from home = work time
• • If the employee’s regular working day is Monday to Friday from 9-5 →
Travel time during these work hours on Saturdays and Sundays is
worktime
• • Regular meal period is not counted
• • X considered as work time those spent in travel away from home
OUTSIDE of regular working hours as a passenger on an airplane, train,
boat or automobile
• • Any work which an employee is required to perform while traveling is
counted as hours worked (except bona fide meal periods or permitted to
sleep)
• • Time spent by an employee in travelling to a place outside Metro
manila to do installation jobs is considered worktime when the travel
time cuts across or coincides with his regular work hours ! hence he
should be paid his regular salary for said time
• LECTURES, MEETINGS AND TRAINING PROGRAMS
◦ Attendance at lectures, meetings and training programs, and similar activities need not be
counted as working time if the following criteria are met:
▪ 1. Attendance is outside of the employee’s regular working hours
33
▪ 2. Attendance is voluntary
▪ 3. The employee does not perform any productive work during such attendance
i. Meal Break
Sec. 7. Meal and Rest Periods.—Every employer shall give his employees, regardless
of sex, not less than one (1) hour time-off for regular meals, except in the following
cases when a meal period of not less than twenty (20) minutes may be given by the
employer provided that such shorter meal period is credited as compensable hours
worked of the employee:
(a) Where the work is non-manual work in nature or does not involve
strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen (16)
hours a day;
(c) In cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss
which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
xxx xxx xxx
• not less than sixty (60) minutes time-off for their regular meals
• The employee must be completely relieved from duty for the purpose of eating
regular meals
• Meal time = x compensable if he is completely freed from his duties even though
he remains at his workplace
• But the employee is not relieved if he is required to perform his duties whether
active or inactive, while eating = compensable
• Summary:
◦ o Non compensable meal break = free time, the employer’s own time
◦ o Compensable = X free time, whether the worker is able to eat or not
• NOT REQUIRED to stay within premises of work
• When work is continuous for several shifts, the meal time breaks should be counted as
working time for the purpose of overtime compensation
• GR: Meal period should not be less than 60 minutes, in which case it is time-off or
noncompensable time
◦ If less than 20 minutes = rest period; working time; compensable
◦ The situations where meal time can be less than 60 minutes but not less than 20n
minutes:
▪ 1. Where the work is non-manual or does not involve serious physical exertion
 LABOR REVIEW

▪ 2. Establishment regularly operates not less than 16 hours a day
▪ 3. Where the is actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss which
the employer would otherwise suffer
▪ 4. Where the work is necessary to prevent serious loss of perishable goods
◦ Similar to the situations of emergency overtime work
◦ SHORTENED MEAL BREAK UPON EMPLOYEE’S REQUEST
▪ Employee may request that their meal period be shorted so that they can leave
earlier than previously established schedule = NOT COMPENSABLE
d. Overtime Work/Overtime Pay
Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that
the employee is paid for the overtime work, an additional compensation equivalent to his regular
wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205, April 15, Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be
offset by overtime work on any other day. Permission given to the employee to go on leave on
1998
some other day of the week shall not exempt the employer from paying the additional
PAN-AM v. PAN-AM Employees Association, 1 SCRA 527 compensation required in this Chapter.
i. Waiting Time
• ENGAGED TO WAIT OR WAITING TO BE ENGAGED?
◦ Question of fact resolved by appropriate finding of the TC Art. 89. Emergency overtime work. Any employee may be required by the employer to
◦ The facts may show that the employee was engaged to wait or may show that he waited perform overtime work in any of the following cases:
to be engaged a. When the country is at war or when any other national or local emergency has been
◦ Controlling factor: Whether the waiting time spent in idleness is so spent
predominantly for the employer’s benefit or for the employee’s declared by the National Assembly or the Chief Executive;
• examples:  
◦ Firefighters who are in standby capacity who spent time in idleness playing cards or b. When it is necessary to prevent loss of life or property or in case of imminent danger
other amusement in the facilities provided by the employer ! X render inapplicable the
overtime provisions of the act to public safety due to an actual or impending emergency in the locality caused by serious
◦ Truck driver who has to wait at or near the jobsite for goods to be loaded is working accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
during the loading period ! engaged to be waiting = considered working time  
◦ Truck driver done with task and waiting for 6 pm when he goes on duty for the return c. When there is urgent work to be performed on machines, installations, or equipment,
trip → Waiting to be engaged = Idle time is not working time
• in order to avoid serious loss or damage to the employer or some other cause of similar nature;
ii. Rule on Brownout
• Work interruption due to brownouts  Brownouts is not included in “Hours worked” d. When the work is necessary to prevent loss or damage to perishable goods; and
 
e. Where the completion or continuation of the work started before the eighth hour is
c. Night shift differential (NSD) and those not covered by NSD
necessary to prevent serious obstruction or prejudice to the business or operations of the
Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not employer.
less than ten percent (10%) of his regular wage for each hour of work performed between ten
o’clock in the evening and six o’clock in the morning. Any employee required to render overtime work under this Article shall be paid the additional
• This is NOT WAIVABLE compensation required in this Chapter.
• BURDEN OF PROOF OF PAYMENT : Employer has burden of proving a clam for night
shift differential pay
• Night-shift work is more onerous and burdensome, and thus deserves more remuneration than
NIGHT SHIFT DIFFERENTIAL PAY OVERTIME PAY
their day time counterparts. There is no dispute that ordinary and regular normal work is
performed in the daytime, and that night work is exceptional and is only justified in
unavoidable circumstances necessary for the business of the employer. [Shell Company vs. payment for work done during the night payment for the excess of regular 8 hour work
NLU, 81 Phil. 315 (1948)]

34
 LABOR REVIEW

i. Condition for entitlement to overtime pay a. In cases where the worker is insured with his consent by the employer, and the
• Additional pay for service or work rendered or performed in excess of 8 hours a deduction is to recompense the employer for the amount paid by him as premium on the
day by employees or laborers covered by the 8 hour labor law and not exempt from insurance;
its requirements  
i. Basis for Computation b. For union dues, in cases where the right of the worker or his union to check-off has
• OVERTIME RATE BASED ON REGULAR WAGE → Overtime pay = been recognized by the employer or authorized in writing by the individual worker concerned;
compensation added to regular wage
and
• REGULAR BASE PAY – excludes money received by the employee in different
concepts, such as Christmas bonus and other fringe benefits  
• The COLA shall not be included in the computation of overtime pay. c. In cases where the employer is authorized by law or regulations issued by the
• the minimum overtime pay rates vary according to the day the overtime work is Secretary of Labor and Employment.
performed
• COMPUTATION:
◦ 1. For work in excess of 8 hours performed on ORDINARY WORKING 2. Rest Day
DAY → Plus 25% a. Article 91: Right to Weekly Rest Day
◦ For work in excess of 8 hours performed on a SCHEDULED REST DAY
Art. 91. Right to weekly rest day.
OR A SPECIAL DAY → plus 30% of the hourly rates on said days
◦ For work in excess of 8 hours performed on a REGULAR HOLIDA → a. It shall be the duty of every employer, whether operating for profit or not, to provide
plus 30% of the hourly rates on the said days each of his employees a rest period of not less than twenty-four (24) consecutive hours after
◦ 4. For work in excess of 8 hours performed on a REGULAR HOLIDAY every six (6) consecutive normal work days.
WHICH FALLS ON A SCHEDULE REST DAY! plus 30% of the hourly  
rates on the said days b. The employer shall determine and schedule the weekly rest day of his employees
ii. Waiver or quitclaim subject to collective bargaining agreement and to such rules and regulations as the Secretary of
• WAIVER OF QUITCLAIM; NO WAIVER OF OVERTIME PAY, GENERALLY Labor and Employment may provide. However, the employer shall respect the preference of
→ The right to OT pay cannot be waived employees as to their weekly rest day when such preference is based on religious grounds.
• WHEN VALID; WAIVER IN EXCHANGE FOR CERTAIN BENEFITS →
◦ GR: Overtime compensation cannot be waived
◦ E: When the alleged waiver of OT is in consideration of benefits and privileges Art. 92. When employer may require work on a rest day. The employer may require his
which may be more than what will accrue to them in OT pay, the waiver may be employees to work on any day:
permitted a. In case of actual or impending emergencies caused by serious accident, fire, flood,
•
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property,
1. Wages or imminent danger to public safety;
◦ “no work no pay” principle and exception to “no work no pay”  
◦ Facilities v. Supplements b. In cases of urgent work to be performed on the machinery, equipment, or installation,
◦ Exempted from the rules on wages to avoid serious loss which the employer would otherwise suffer;
◦ Non-diminution rule  
◦ Wage Distortion c. In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
◦ Rule on those paid by results  
◦ Article 113: Wage Deduction d. To prevent loss or damage to perishable goods;
Art. 113. Wage deduction. No employer, in his own behalf or in behalf of any person, shall  
make any deduction from the wages of his employees, except: e. Where the nature of the work requires continuous operations and the stoppage of work

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 LABOR REVIEW

may result in irreparable injury or loss to the employer; and 4. Leaves

  a. Service Incentive Leave (SIL) and Exemptions
f. Under other circumstances analogous or similar to the foregoing as determined by the Art. 95. Right to service incentive leave.
Secretary of Labor and Employment. a. Every employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay.
a. Article 93: Compensation for Rest Day, Sunday, Holiday Work  
Art. 93. Compensation for rest day, Sunday or holiday work. b. This provision shall not apply to those who are already enjoying the benefit herein
a. Where an employee is made or permitted to work on his scheduled rest day, he shall be provided, those enjoying vacation leave with pay of at least five days and those employed in
paid an additional compensation of at least thirty percent (30%) of his regular wage. An establishments regularly employing less than ten employees or in establishments exempted from
employee shall be entitled to such additional compensation for work performed on Sunday only granting this benefit by the Secretary of Labor and Employment after considering the viability or
when it is his established rest day. financial condition of such establishment
b. When the nature of the work of the employee is such that he has no regular workdays  
and no regular rest days can be scheduled, he shall be paid an additional compensation of at least c. The grant of benefit in excess of that provided herein shall not be made a subject of
thirty percent (30%) of his regular wage for work performed on Sundays and holidays. arbitration or any court or administrative action.
c. Work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on a. Vacation Leave & Sick Leave
the employee’s scheduled rest day, he shall be entitled to an additional compensation of at least PSTMSDWO, represented by its president, Rene Soriano v. PNCC
fifty per cent (50%) of his regular wage.
Skyway Corp, G.R. No. 171231, February 17, 2010
d. Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Article, the b. Leaves that are required by Law (mandatory)
employer shall pay such higher rate. i. SIL
Autobus Transport System v. Bautista, May 16, 2005
3. Holiday pay/Premium pay i. Paternity Leave (R.A. No. 8187)
a. Article 94: Coverage/ Exclusions ii. Maternity Leave (SSS Law)
Art. 94. Right to holiday pay.
iii. Solo Parent Leave (R.A. No. 8972)
a. Every worker shall be paid his regular daily wage during regular holidays, except in iv. Battered Woman Leave (R.A. No. 9262)
retail and service establishments regularly employing less than ten (10) workers; 
b. The employer may require an employee to work on any holiday but such employee 5. Thirteenth Month Pay (P.D. 851)
shall be paid a compensation equivalent to twice his regular rate; and a. Value of 13th month pay
c. As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good a. Coverage
Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and the day designated by law for holding
6. Separation Pay
a general election. Songco v. NLRC, G.R. No. L-50999, March 23, 1990
Millares v. NLRC, G.R. No. 122827, March 29, 1999
7. Retirement Pay
a. Article 94: Computation
8. Apprentices, Learners and Handicapped Workers
b. Legal Holidays
APPRENTICE
c. Holiday Economic Rule Art. 58. Definition of Terms. As used in this Title:

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 LABOR REVIEW

a. "Apprenticeship" means practical training on the job supplemented by related theoretical
instruction.
 
b. An "apprentice" is a worker who is covered by a written apprenticeship agreement with an
individual employer or any of the entities recognized under this Chapter.
c. An "apprenticeable occupation" means any trade, form of employment or occupation which
requires more than three (3) months of practical training on the job supplemented by related theoretical
instruction.
 
d. "Apprenticeship agreement" is an employment contract wherein the employer binds himself to
train the apprentice and the apprentice in turn accepts the terms of training.
Art. 59. Qualifications of apprentice. To qualify as an apprentice, a person shall:
a. Be at least fourteen (14) years of age;
 
b. Possess vocational aptitude and capacity for appropriate tests; and
 
c. Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary of Labor appropriate educational
requirements for different occupations.
Art. 60. Employment of apprentices. Only employers in the highly technical industries may employ
apprentices and only in apprenticeable occupations approved by the Secretary of Labor and
Employment. (As amended by Section 1, Executive Order No. 111, December 24, 1986)
Art. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the
legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may
be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor
and Employment. The Department shall develop standard model programs of apprenticeship. (As amended
by Section 1, Executive Order No. 111, December 24, 1986)
Art. 62. Signing of apprenticeship agreement. Every apprenticeship agreement shall be signed by the
employer or his agent, or by an authorized representative of any of the recognized organizations,
associations or groups and by the apprentice.
An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, if the
latter is not available, by an authorized representative of the Department of Labor, and the same shall be
binding during its lifetime.
Every apprenticeship agreement entered into under this Title shall be ratified by the appropriate
apprenticeship committees, if any, and a copy thereof shall be furnished both the employer and the
apprentice.
Art. 63. Venue of apprenticeship programs. Any firm, employer, group or association, industry
organization or civic group wishing to organize an apprenticeship program may choose from any of the
following apprenticeship schemes as the training venue for apprentice:
a. Apprenticeship conducted entirely by and within the sponsoring firm, establishment or entity;
b. Apprenticeship entirely within a Department of Labor and Employment training center or other
public training institution; or
c. Initial training in trade fundamentals in a training center or other institution with subsequent
actual work participation within the sponsoring firm or entity during the final stage of training.
Art. 64. Sponsoring of apprenticeship program. Any of the apprenticeship schemes recognized herein
may be undertaken or sponsored by a single employer or firm or by a group or association thereof or by a
civic organization. Actual training of apprentices may be undertaken:
a. In the premises of the sponsoring employer in the case of individual apprenticeship programs;
b. In the premises of one or several designated firms in the case of programs sponsored by a group
or association of employers or by a civic organization; or
c. In a Department of Labor and Employment training center or other public training institution.
Art. 65. Investigation of violation of apprenticeship agreement. Upon complaint of any interested
person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or
its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to
such rules and regulations as may be prescribed by the Secretary of Labor and Employment.
Art. 66. Appeal to the Secretary of Labor and Employment. The decision of the authorized agency of
the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of
Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of
Labor and Employment shall be final and executory.

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 LABOR REVIEW
Art. 67. Exhaustion of administrative remedies. No person shall institute any action for the enforcement
of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all
available administrative remedies.
Art. 68. Aptitude testing of applicants. Consonant with the minimum qualifications of apprentice-
applicants required under this Chapter, employers or entities with duly recognized apprenticeship
programs shall have primary responsibility for providing appropriate aptitude tests in the selection of
apprentices. If they do not have adequate facilities for the purpose, the Department of Labor and
Employment shall perform the service free of charge.
Art. 69. Responsibility for theoretical instruction. Supplementary theoretical instruction to apprentices
in cases where the program is undertaken in the plant may be done by the employer. If the latter is not
prepared to assume the responsibility, the same may be delegated to an appropriate government agency.
Art. 70. Voluntary organization of apprenticeship programs; exemptions.
a. The organization of apprenticeship program shall be primarily a voluntary undertaking by
employers;
 
b. When national security or particular requirements of economic development so demand, the
President of the Philippines may require compulsory training of apprentices in certain trades, occupations,
jobs or employment levels where shortage of trained manpower is deemed critical as determined by the
Secretary of Labor and Employment. Appropriate rules in this connection shall be promulgated by the
Secretary of Labor and Employment as the need arises; and
 
c. Where services of foreign technicians are utilized by private companies in apprenticeable trades,
said companies are required to set up appropriate apprenticeship programs.
Art. 71. Deductibility of training costs. An additional deduction from taxable income of one-half (1/2) of
the value of labor training expenses incurred for developing the productivity and efficiency of apprentices
shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such
program is duly recognized by the Department of Labor and Employment: Provided, further, That such
deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person
or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the
minimum wage.
Art. 72. Apprentices without compensation. The Secretary of Labor and Employment may authorize the
38
hiring of apprentices without compensation whose training on the job is required by the school or training
program curriculum or as requisite for graduation or board examination
LEARNERS
Art. 73. Learners defined. Learners are persons hired as trainees in semi-skilled and other industrial
occupations which are non-apprenticeable and which may be learned through practical training on the job
in a relatively short period of time which shall not exceed three (3) months.
Art. 74. When learners may be hired. Learners may be employed when no experienced workers are
available, the employment of learners is necessary to prevent curtailment of employment opportunities,
and the employment does not create unfair competition in terms of labor costs or impair or lower working
standards.
Art. 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership
agreement with them, which agreement shall include:
a. The names and addresses of the learners;
 
b. The duration of the learnership period, which shall not exceed three (3) months;
 
c. The wages or salary rates of the learners which shall begin at not less than seventy-five
percent (75%) of the applicable minimum wage; and
 
d. A commitment to employ the learners if they so desire, as regular employees upon
completion of the learnership. All learners who have been allowed or suffered to work during the
first two (2) months shall be deemed regular employees if training is terminated by the employer
before the end of the stipulated period through no fault of the learners.
The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his
duly authorized representative.
Art. 76. Learners in piecework. Learners employed in piece or incentive-rate jobs during the training
period shall be paid in full for the work done.
Art. 77. Penalty clause. Any violation of this Chapter or its implementing rules and regulations shall be
subject to the general penalty clause provided for in this Code.
 LABOR REVIEW

• • If the student injures a 3rd party, does the school become liable? YES
HANDICAPPED WORKERS LEARNERS APPRENTICESHIP
Art. 78. Definition. Handicapped workers are those whose earning capacity is impaired by age or physical SIMILARITIES • Both mean training periods for jobs requiring skills that can be
or mental deficiency or injury. acquired through actual work experience
• • Paid wages 25% lower than the applicable minimum wage
Art. 79. When employable. Handicapped workers may be employed when their employment is necessary FOCUS Semi-skilled jobs or in industrial Highly technical industry
to prevent curtailment of employment opportunities and when it does not create unfair competition in labor occupation
costs or impair or lower working standards. TRAINING PERIOD Less than 3 months Exceeds 3 months
DIFFICULTY Job is more easily learned Harder to learn (apprenticeable job)
Art. 80. Employment agreement. Any employer who employs handicapped workers shall enter into an
COMMITMENT OF Employer is committed to hire the No such commitment
employment agreement with them, which agreement shall include: EMPLOYER learner-trainee as an employee after
1. The names and addresses of the handicapped workers to be employed; the training period
 
TYPE OF Non-technical jobs Highly technical industries and only
2. The rate to be paid the handicapped workers which shall not be less than seventy five
JOB/INDUSTRY in apprenticeable occupations
(75%) percent of the applicable legal minimum wage; approved by DOLE
 
3. The duration of employment period; and
• A learner is not an apprentice but an apprentice, is conceptually also a learner
 
• MAGNA CARTA FOR DISABLED PERSONS (RA 7277, MARCH 24, 1992)
4. The work to be performed by handicapped workers. ◦ QUALIFIED DISABLED EMPLOYEE Equal Opportunity for Employment. — No disabled
person shall be denied access to opportunities for suitable employment. A qualified disabled
The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized employee shall be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able
representative.
bodied person
• QUALIFIED INDIVIDUAL WITH A DISABILITY
◦ Shall mean an individual with a disability who, with or without reasonable accommodations, can
Art. 81. Eligibility for apprenticeship. Subject to the appropriate provisions of this Code, handicapped perform the essential functions of the employment position that such individual holds or desires.
workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the However, consideration shall be given to the employer's judgment as to what functions of a job are
performance of job operations in the particular occupations for which they are hired. essential, and if an employer has prepared a written description before advertising or interviewing
applicants for the job, this description shall be considered evidence of the essential functions of the
job
• TESDA (TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY) ◦ Sheltered Employment — If suitable employment for disabled persons cannot be found through
IMPLEMENTS THE APPRENTICESHIP PROGRAM open employment as provided in the immediately preceding Section, the State shall endeavor to
◦ Sect 18 of TESDA Act of 1994 – expressly empowers TESDA to implement and administer the provide it by means of sheltered employment. In the placement of disabled persons in sheltered
apprenticeship program in accordance with existing laws, rules and regulations employment, it shall accord due regard to the individual qualities, vocational goals and
• APPRENTICEABLE AGE inclinations to ensure a good working atmosphere and efficient production.
◦ This article – 14; IRR – 15 (what to follow? Moot and academic question already because:) • SHELTERED EMPLOYMENT- Refers to the provision of productive work for disabled persons
◦ • RA 7610 – prohibits the employment of children below 15 years old through workshops providing special facilities, income-producing projects or homework schemes with
• WORKING SCHOLAR, LIABILITY OF SCHOOL: There is NO employer-employee a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity
relationship between students and schools where there is a WRITTEN agreement between them required in open industry;|||
under which the student agree to work for the school in exchange for the privilege to study free of • DISCRIMINATION ON EMPLOYMENT • No entity, whether public or private, shall discriminate
charge, provided that the students are given real opportunities, including suchfacilities as may be against a qualified disabled person by reason of disability in regard to job application procedures, the
reasonable and necessary to finish their chosen coursesunder such agreement

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 LABOR REVIEW

hiring, promotion, or discharge of employees, employee compensation, job training, and other terms,
conditions, and privileges of employment. The following constitute acts of discrimination: casia
a) Limiting, segregating or classifying a disabled job applicant in such amanner that adversely
affects his work opportunities;
b) Using qualification standards, employment tests or other selection criteria that screen out
or tend to screen out a disabled person unless such standards, tests or other selection criteria are
shown to be job-related for theposition in question and are consistent with business necessity;
c) Utilizing standards, criteria, or methods of administration that:
1. Have the effect of discrimination on the basis of disability; or
2. 2) Perpetuate the discrimination of others who are subject to common administrative
control.
d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe
benefits, to a qualified disabled employee, by reason of his disability, than the amount to which a
non-disabled person performing the same work is entitled;
e) Favoring a non-disabled employee over a qualified disabled employee with respect to
promotion, training opportunities, study and scholarship grants, solely on account of the latter's
disability;
f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by
reason of his disability;
g) Dismissing or terminating the services of a disabled employee by reason of his disability
IV. LABOR RELATIONS LAW
unless the employer can prove that he impairs the satisfactory performance of the work involved
to the prejudice of the business entity:Provided, however, That the employer first sought to 1. Right to Self-Organization
provide reasonable accommodations for disabled persons; cda
h) Failing to select or administer in the most effective manner employment tests which accurately
a. Who can join
reflect the skills, aptitude or other factor of the disabled applicant or employee that such tests La Suerte Cigar & Cigarette Factory v. Director of BLR, G.R. No. L-
purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant 55674, July 25, 1983
or employee, if any; and
i) Excluding disabled persons from membership in labor unions or similar organizations
a. Exceptions
• QUALIFIED DISABLED PERONS ARE REGULAR EMPLOYEES 1. Labor Organizations
a. Classification of Labor Organizations
9. Women Workers a. Disaffiliation of a local union from the federation
a. Non-Discrimination Rule Tropical Hut Employees’ Union-CGW v. Tropical Hut Food Market, Inc,
a. Stipulation Against Workers G.R. No. L-43495-99, January 20, 1990
10. Minor Workers (R.A. No. 7678, R.A. No. 9231, & R.A. 7323)
11. Househelpers (Domestic Workers Act, R.A. No. 10361) 2. Bargaining Agent and Certification Election
a. Voluntary Recognition (D.O. 40-03, Rule VII)
a. Certification Election
UST Faculty Union v. Bitonio, Jr., G.R. No. 131235, November 16, 1999
Progressive Development Corporation-Pizza Hut v. Laguesma, G.R. No.
115077
i. Certification Election in an Organized v. Unorganized
Establishment

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 LABOR REVIEW

i. Procedure in Pre-Election Contest (D.O. 40-03)

ii. Grounds for denial of petition for certification election (contract- 6. Strikes & Lockouts
bar rule, deadlock bar-rule, charge-of-company unionism rule, a. Definition of strikes & lockouts
outside-of-the-freedom-period rule, negotiation rule, appeal bar a. Economic v. ULP Strike
rule). b. Procedural Requirements
b. Consent Election c. Liability in case of Illegal Strike/lockout
c. Run-Off Election Jackbilt Industries Inc v. Jackbilt Employees Workers Union-NAFLU-
d. Re-run Election KMU, G.R. Nos. 171618-19, March 20, 2009
i. Union Officers
3. Union Security Arrangements i. Members
Bataan Shipyard and Engineering Co., Inc. v. NLRC, G.R. No. 78604, May 9, ii. Employer
1988
4. Unfair Labor Practice
a. Article 253 (formerly Art. 247): Unfair Labor Practice
V. TERMINATION OF EMPLOYMENT
a. Article 254 (formerly Art. 248): ULP of Employers
Complex Electronics Employees Association v. NLRC, G.R. No. 121315, 1. Employer-Employee Relationship
July 19, 1999 a. Four-Fold Test
1. The selection and engagement of the employee
Standard Chartered Bank v. Hon. Confesor, G.R. No. 114974, June 16, 2. The payment of wages
2004 3. The power of dismissal
b. Article 255 (formerly Art. 249): ULP of Labor Organization 4. The employer’s power to control the employee with respect to the means and methods
5. Collective Bargaining & Administration of Agreements by which the work is to be accomplished (most important, without this, there is no E-
E relationship) –
a. Procedures/steps in collective bargaining
a. Article 257: Duty to Bargain Collectively in the absence of Collective Sonza v. ABS-CBN, G.R. No. 138051, June 10, 2004
Bargaining Agreements DOCTRINES:
1. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and
b. Article 258: Duty to Bargain Collectively Definition engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to
Kiok Loy v. NLRC, 141 SCRA 179 control the employee on the means and methods by which the work is accomplished. The last element, the so-called
c. Article 259: Duty to Bargain Collectively when there exists a CBA control test, is the most important element.
2. The control test is the most important test our courts apply in distinguishing an employee from an independent
d. Article 260: Terms of CBA contractor.
i. Principle of Hold-over FACTS:
i. Substitutionary Doctrine
ii. Deadlock in CBA renegotiation In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President
Divine Word University of Tacloban v. Sec. of Labor, G.R. No. and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to
91995, September 11, 1992 provide Sonza’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a
monthly talent fee of P310, 000 for the first year and P317, 000 for the second and third year.

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 LABOR REVIEW

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events
concerning his program and career. After the said letter, Sonza filed with the Department of Labor and Employment a
complaint alleging that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13th month pay,
signing bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended
that no employee-employer relationship existed between the parties. However, ABS-CBN continued to remit Sonza’s
monthly talent fees but opened another account for the same purpose.
For violation of any provision of the Agreement, either party may terminate their relationship. SONZA failed to show
that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent
losses as provided under labor laws. Even if it suffered severe business losses, ABS-CBN could not retrench SONZA
because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement. This circumstance
indicates an independent contractual relationship between SONZA and ABS-CBN. SONZA admits that even after
ABS-CBN ceased broadcasting his programs, ABS-CBN still paid him his talent fees.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC D. Power of Control
affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC.
Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor.
ISSUE: The control test is the most important test our courts apply in distinguishing an employee from an independent
contractor.
Whether or not there was employer-employee relationship between the parties.
First, SONZA contends that ABS-CBN exercised control over the means and methods of his work. SONZAs argument
HELD: is misplaced. ABS-CBN engaged SONZAs services specifically to co-host the Mel & Jay programs. ABS-CBN did
not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA
No employer-employee relationship exists between the parties. delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. We find that ABS-
CBN was not involved in the actual performance that produced the finished product of SONZAs work.ABS-CBN did
Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the program format and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to airtime schedule for more effective programming. ABS-CBNs sole concern was the quality of the shows and their
standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of
control the employee on the means and methods by which the work is accomplished. ]The last element, the so-called
SONZAs work.
control test, is the most important element. Second, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN subjected him to its rules and
standards of performance. SONZA claims that this indicates ABS-CBNs control not only [over] his manner of work
A. Selection and Engagement of Employee
but also the quality of his work. The Agreement stipulates that SONZA shall abide with the rules and standards of
The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed performance covering talents of ABS-CBN. The Agreement does not require SONZA to comply with the rules and
by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If standards of performance prescribed for employees of ABS-CBN. The code of conduct imposed on SONZA under the
SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the Agreement refers to the Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which
has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics.
Agreement with SONZA but would have hired him through its personnel department just like any other employee.
Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme form of control which ABS-
B. Payment of Wages
CBN exercised over him. This argument is futile. Being an exclusive talent does not by itself mean that SONZA is an
SONZAs talent fees, amounting to P317,000 monthly in the second and third year, are so huge and out of the ordinary employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring
that they indicate more an independent contractual relationship rather than an employer-employee relationship. ABS- party. In the broadcast industry, exclusivity is not necessarily the same as control.
CBN agreed to pay SONZA such huge talent fees precisely because of SONZAs unique skills, talent and celebrity
status not possessed by ordinary employees. The payment of talent fees directly to SONZA and not to MJMDC does a. Economic Reality Test
not negate the status of SONZA as an independent contractor. The parties expressly agreed on such mode of payment. • TWO TIERED APPROACH; THE ECONOMIC DEPENDENCE TEST
Under the Agreement, MJMDC is the AGENT of SONZA, to whom MJMDC would have to turn over any talent fee • Two tiered Test
1. Power of control of employer
accruing under the Agreement.
2. Underlying economic realities of the activity of relationship
• Totality of the circumstance – depends on the circumstance of the whole economic activity
C. Power of Dismissal such as:
1. Extent to which services performed are integral part of the employer’s business

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 LABOR REVIEW

2. Degree of control exercised by the employer In 1996, petitioner was designated Acting Manager. For five years, petitioner performed the duties of Acting Manager.
3. Worker’s opportunity for profit In January 2001, petitioner was replaced by Liza R. Fuentes as Manager. Petitioner alleged that she was required to
4. Amount of initiative, skill, judgment or foresight required for the success of the sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei
independent enterprise
Corporation.
5. Permanency and duration of the relationship
6. Degree of dependency of the worker upon the employer for his continued
Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001.
employment in that line of business
7. Extent of worker’s investment in equipment andfacilities Petitioner was not paid her mid-year bonus allegedly because the company was not earning well. On October 2001,
• " Economic dependence – whether the worker is dependent on the alleged employer for his petitioner did not receive her salary from the company. On October 15, 2001, petitioner asked for her salary from
continued employment in that line of business Acedo and the rest of the officers but she was informed that she is no longer connected with the company. Since she
• " Respondent = employee = served for 6 years before her dismissal and received salaries = was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before
economically dependent on corporation the labor arbiter.
• " Constrictively dismissed when salary was reduced = illegal termination of employment =
entitled to fill backwages + separation pay in lieu of reinstatemen Kasei Corporation averred that petitioner was not an employee and to prove that, they submitted a list of employees
for the years 1999 and 2000 duly received by the BIR showing that petitioner was not among the employees reported
Francisco v. NLRC, G.R. No. 170087, August 21, 2006 to the BIR. Private respondent corporation also alleged that petitioner was hired as one of its technical consultants on
DOCTRINES: accounting matters and act concurrently as Corporate Secretary. Petitioner’s designation as technical consultant
depended solely upon the will of management. As such, her consultancy may be terminated any time considering that
1. Two-tiered test: The better approach would therefore be to adopt a two-tiered test involving: (1) the her services were only temporary in nature and dependent on the needs of the corporation.
putative employer’s power to control the employee with respect to the means and methods by which the
work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. This Labor Arbiter: petitioner was illegally dismissed.
two-tiered 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 NLRC: affirmed the decision of the Labor Arbiter.
especially appropriate in this case where there is no written agreement or terms of reference to base the
CA: reversed the NLRC decision and dismissed the complaint.
relationship on; and due to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter’s employment.
ISSUE:
Whether there was an employer-employee relationship between petitioner Francisco and private respondent Kasei
2. The determination of the relationship between employer and employee depends upon the circumstances of
Corporation.
the whole economic activity, such as: (1) the extent to which the services performed are an integral part of
the employer’s business; (2) the extent of the worker’s investment in equipment and facilities; (3) the HELD:
nature and degree of control exercised by the employer; (4) the worker’s opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent Yes, by applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she
enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and was under the direct control and supervision of Seiji Kamura, the corporation’s Technical Consultant.
(7) the degree of dependency of the worker upon the employer for his continued employment in that line of
business. Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent
corporation because she had served the company for six years before her dismissal, receiving check vouchers
indicating her salaries/ wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
FACTS: Security contributions from August 1, 1999 to December 18, 2000. When petitioner was designated General Manager,
In 1995, petitioner Angelina Francisco was hired by Kasei Corporation during its incorporation stage. She was respondent corporation made a report to the SSS signed by Irene Ballesteros. Petitioner’s membership in the SSS as
designated as Accountant and Corporate Secretary and was assigned to handle all the accounting needs of the manifested by a copy of the SSS specimen signature card which was signed by the President of Kasei Corporation and
company. She was also designated as Liaison Officer to the City of Makati to secure business permits, construction the inclusion of her name in the online inquiry system of the SSS evinces the existence of an employer-employee
permits and other licenses for the initial operation of the company.

43
 LABOR REVIEW
relationship between petitioner and respondent corporation. It is therefore apparent that petitioner is economically
dependent on respondent corporation for her continued employment in the latter’s line of business.
2. Kinds of Employment
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the
date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of his engagement. An employee who is allowed
to work after a probationary period shall be considered a regular employee.
3 CATEGORIES OF EMPLOYEE'S UNDER ART 280
regular employees or those whose work is necessary or desirable to the usual business of the
employer;
Regular employees may be classified into:
(1) regular employees by nature of work → Employee performs work that
is usually necessary and desirable in the usual business or trade of the
employer. A continuing need for respondents' services is sufficient
evidence of the necessity and indispensability of their services to
petitioner's business .
(2) regular employees by years of service → A casual employee who has
rendered at least one (1) year of service, whether continuous or broken is
a regular employee. The status of regular employment under this category
attaches to the casual worker on the day immediately after the end of his
first year of service as such casual employee.
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
44
services to be performed is seasonal in nature and the employment is for
the duration of the season;
casual employees or those who are neither regular nor project employees
a. Regular Employees
• Reasonable connection rule → The primary standard, therefore, of determining a regular
employment is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. Also, if the employee
has been performing the job for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the 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 also considered regular, but only with respect to such activity and
while such activity exists.
De Leon v. NLRC, G.R. No. 70705, August 21, 1989
DOCTRINES:
1. The primary standard, therefore, of determining a regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the employer. The test is
whether the former is usually necessary or desirable in the usual business or trade of the employer.
2. What determines whether a certain employment is regular or casual is not the will and word of the employer, to
which the desperate worker often accedes, much less the procedure of hiring the employee or the manner of paying
his salary. It is the nature of the activities performed in relation to the particular business or trade considering all
circumstances, and in some cases the length of time of its performance and its continued existence.
FACTS:
Moises de Leon was employed by La Tondeña Inc. on December 11, 1981, at the Maintenance Section of its
Engineering Department. His work consisted mainly of painting company building and equipment, and other odd jobs
relating to maintenance. He was paid on a daily basis through petty cash vouchers. After a service of more than one
year, De Leon requested from La Tondeña that he be included in the payroll of regular workers, instead of being paid
through petty cash vouchers. La Tondeña's response, however, was his dismissal from employment on January 16,
1983. Having been refused reinstatement despite repeated demands, De Leon filed a complaint for illegal dismissal,
reinstatement and payment of backwages before the LA.
De Leon: alleged that he was dismissed following his request to be treated as a regular employee; that his work
consisted of painting company buildings and maintenance chores like cleaning and operating company equipment,
assisting Emiliano Tanque Jr., a regular maintenance man; and that weeks after his dismissal, he was re-hired by La
 LABOR REVIEW

Tondeña indirectly through the Vitas-Magsaysay Village Livelihood Council, a labor agency of La Tondeña, and was the painting and maintenance work given him manifest a treatment consistent with a maintenance man and not just a
made to perform the tasks which he used to do. painter, for if his job was truly only to paint a building there would have been no basis for giving him other work
assignments In between painting activities.
La Tondeña: claimed that De Leon was not a regular employee but only a casual worker hired allegedly only to paint
a certain building in the company premises, and that his work as a painter terminated upon the completion of the It is of no moment that petitioner was told when he was hired that his employment would only be casual, that he was
painting job. paid through cash vouchers, and that he did not comply with regular employment procedure. Precisely, the law
overrides such conditions which are prejudicial to the interest of the worker whose weak bargaining position needs the
LA: found the dismissal illegal; ordered La Tondeña to reinstate De Leon with full backwages and other benefits. LA support of the State. What determines whether a certain employment is regular or casual is not the will and word
ruled that De Leon was not a mere casual employee as asserted by La Tondeña but a regular employee. He concluded of the employer, to which the desperate worker often accedes, much less the procedure of hiring the employee
that the dismissal of De Leon from the service was prompted by his request to be included in the list of regular or the manner of paying his salary. It is the nature of the activities performed in relation to the particular
employees and to be paid through the payroll and is, therefore, an attempt to circumvent the legal obligations of an business or trade considering all circumstances, and in some cases the length of time of its performance and its
employer towards a regular employee. continued existence.

NLRC: Reversed the LA decision; ruled that De Leon’s job cannot be considered as necessary or desirable in the
a. Casual Employees
usual business or trade of the employer because, "Painting the business or factory building is not a part of the
respondent's manufacturing or distilling process of wines and liquors.‖
Philippine Geothermal, Inc. v. NLRC, G.R. No. 82643-47, August 30, 1990
ISSUE: DOCTRINE:

WON the NLRC erred in finding that De Leon was not a regular employee, and thus, was not illegally dismissed. 1. There are two kinds of regular employees, as: 1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; and 2) those who have rendered at least one (1)
HELD: year of service, whether continuous or broken with respect to the activity in which they are employed. While the
actual regularization of these employees entails the mechanical act of issuing regular appointment papers and
Yes. Under Art. 281 of the Labor Code, an employment is deemed regular when the activities performed by the compliance with such other operating procedures, as may be adopted by the employer, it is more in keeping with the
employee are usually necessary or desirable in the usual business or trade of the employer. Not considered regular are intent and spirit of the law to rule that the status of regular employment attaches to the casual employee on the day
the so-called "project employment" the completion or termination of which is more or less determinable at the time immediately after the end of his first year of service.
of employment, such as those employed in connection with a particular construction project and seasonal employment
which by its nature is only desirable for a limited period of time. However, any employee who has rendered at least
one year of service, whether continuous or intermittent, is deemed regular with respect to the activity he FACTS:
performed and while such activity actually exists. Petitioner is a U.S. corporation engaged in the exploration and development of geothermal energy resources as an
alternative source of energy. Private respondents are employees of herein petitioner occupying various positions
The primary standard, therefore, of determining a regular employment is the reasonable connection between ranging from carpenter to Clerk II who had worked with petitioner company under individual contracts, categorized as
the particular activity performed by the employee in relation to the usual business or trade of the employer. The contractual employment, for a period of 15 to 3 months. These contracts were regularly renewed until 1983 and 1984
test is whether the former is usually necessary or desirable in the usual business or trade of the employer. when petitioner started terminating their employment by not renewing their individual contracts. Subsequently
petitioner entered into job contracting agreement with Dra. Gonzales who supplies it with skilled manpower. Private
In the case at bar, during De Leon’s period of employment, the tasks assigned to him included not only painting of
respondents organized a separate labor union in view of their exclusion in the bargaining unit of the regular rank and
company buildings, equipment and tools but also cleaning and oiling machines, even operating a drilling machine, and
file employees. They filed a petition for certification election. Petitioner allegedly started harassing them and replaced
other odd jobs assigned to him when he had no painting job. It is self-serving, to say the least, to isolate petitioner's
them with so called "contract workers". Thus, complainant union and herein respondent employees filed a case for
painting job to justify the proposition of casual employment and conveniently disregard the other maintenance
illegal lock-out and unfair labor practice for unfair labor practice and/or illegal dismissal, reinstatement backwages
activities of petitioner which were assigned by the respondent company when he was not painting. The law demands
and service incentive. LA decided in favor of petitioners. NLRC affirmed. Hence, this petition.
that the nature and entirety of the activities performed by the employee be considered. In the case of petitioner,

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 LABOR REVIEW

ISSUE: FACTS:
Petitioners did not look with favor workers having organized themselves into a union. Thus when the respondent
Whether or not private respondents may be considered regular and permanent employees due to their length of service union was certified as the collective bargaining representative in the certification elections, petitioners refused to sit
in the company despite the fact that their employment is on contractual basis. down with the respondents for the purpose of entering into a collective bargaining agreement. Moreover, the workers
were not given work for more than one month. In protest, complainants staged a strike which was however settled
HELD: upon the signing of a Memorandum of Agreement which stipulated among others that ―management will provide
fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be given priority.
Petitioner alleges that it engaged the services of private respondents on a monthly basis to ensure that manpower However, in case the said workforce would not be enough, the management can hire additional workers to supplement
would be available when and where needed. Private respondents were fully aware of the nature of their employment as them.‖
this was clearly spelled out in the employment contracts. What happened to them was not a case of unwarranted
dismissal but simply one of expiration of the tenure of employment contracts and the completion of the phase of the However, alleging that respondents failed to load the fifteen wagons, petitioners reneged on its commitment to sit
project for which their services were hired. This Court classified the two kinds of regular employees, as: 1) those who down and bargain collectively. Instead, petitioners employed all means including the use of private armed guards to
are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the prevent the organizers from entering the premises.
employer; and 2) those who have rendered at least one (1) year of service, whether continuous or broken with respect
to the activity in which they are employed. Moreover, starting September 1991, petitioners did not any more give work assignments to the respondents forcing the
union to stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of
While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers Agreement was signed. However, petitioners still reneged on its commitment pursuant to the 2nd Memorandum which
and compliance with such other operating procedures, as may be adopted by the employer, it is more in keeping with prompted the respondents to file a complaint.
the intent and spirit of the law to rule that the status of regular employment attaches to the casual employee on the day
immediately after the end of his first year of service. Assuming therefore, that an employee could properly be regarded The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on
as a casual (as distinguished from a regular employee) he becomes entitled to be regarded as a regular employee of the leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security
employer as soon as he has completed one year of service. Under the circumstances, employers may not terminate the of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.
service of a regular employee except for a just cause or when authorized under the Labor Code. It is the policy of the
state to assure the right of workers to "security of tenure." The guarantee is an act of social justice. When a person has ISSUE:
no property, his job may possibly be his only possession or means of livelihood. Therefore, he should be protected
against any arbitrary deprivation of his job. Whether or not the seasonal employees have become regular employees.

b. Seasonal Employees
Hacienda Fatima v. National Federation of Sugarcane Workers, G.R. No. 149440,
January 28, 2003
DOCTRINE:
1. The primary standard of determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual trade or business of the employer. The connection can be
determined by considering the nature of the work performed and its relation to the scheme of the particular business
or trade in its entirety
HELD:
Yes they are regular employees. For respondents to be excluded from those classified as regular employees, it is
not enough that they perform work or services that are seasonal in nature. They must have also been employed
only for the duration of one season. The evidence proves the existence of the first, but not of the second,
condition. The fact that respondents repeatedly worked as sugarcane workers for petitioners for several years is
not denied by the latter. Evidently, petitioners employed respondents for more than one season. Therefore, the
general rule of regular employment is applicable.
The primary standard of determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous

46
 LABOR REVIEW
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre
necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only protested the announced termination of his employment. He argued that although his contract did stipulate that the
with respect to such activity and while such activity exists.
Respondents, having performed the same tasks for petitioners every season for several years, are considered the not be removed except for valid cause.
latter’s regular employees for their respective tasks. Petitioners eventual refusal to use their services -- even if they
were ready, able and willing to perform their usual duties whenever these were available -- and hiring of other workers Regional Director - application for clearance to terminate employment (not a report of termination), and accepting
to perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.
c. Fixed-Term
Brent School, Inc. v. Zamora, G.R. No. 48494, February 5, 1990
DOCTRINES:
1. Article 319 undertook to define "employment without a fixed period" in the following manner: Where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or where the
work or service to be performed is seasonal in nature and the employment is for the duration of the season.
2. The advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the
impending expiration of his contract, not a letter of termination, nor an application for clearance to terminate which
needed the approval of the Department of Labor to make the termination of his services effective. In any case, such
clearance should properly have been given, not denied.
FACTS:
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly compensation of P20,000.00. The
contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the
agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and
September 14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the
original contract of July 18, 1971.
Some three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was
given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his
services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of
the definite period of employment." And a month or so later, on May 26, 1976, Alegre accepted the amount of
P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to
July 17, 1976 as full payment of contract.‖
47
same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his
employer, and his employment had lasted for five years, he had acquired the status of a regular employee and could
the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of
Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages.
ISSUE: Whether or not the contract of employment was lawfully terminated?
HELD: Yes, Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement.
The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor
Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the validity of term employment was
impliedly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior, thereto, it was the Code
of Commerce (Article 302) which governed employment without a fixed period, and also implicitly acknowledged the
propriety of employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949
and became effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or
fixed-period employment is contained in any of its articles or is otherwise deducible therefrom.
It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly
legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly
recognized as valid by this Court.
The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (PD
442), which went into effect on November 1, 1974. The Code contained explicit references to fixed period
employment, or employment with a fixed or definite period. Nevertheless, obscuration of the principle of licitness of
term employment began to take place at about this time.
Article 320 originally stated that the "termination of employment of probationary employees and those employed
WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe." Article 321
prescribed the just causes for which an employer could terminate "an employment without a definite period." And
Article 319 undertook to define "employment without a fixed period" in the following manner: …where the employee
has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or service
to be performed is seasonal in nature and the employment is for the duration of the season. Subsequently, the
foregoing articles regarding employment with "a definite period" and "regular" employment were amended by
Presidential Decree No. 850, effective December 16, 1975.
Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to
persons "employed with a fixed period," and was renumbered (becoming Article 271).
 LABOR REVIEW

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of
his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be
given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a
means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or,
more relevantly, curing a headache by lopping off the head.
1. Article 280 of the Labor Code provides that an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the duration of the season.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still
good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, FACTS:
1989) where, in the fairly analogous case of a teacher being served by her school a notice of termination following the Respondent Romago is a general contractor engaged in contracting and sub-contracting of specific building
expiration of the last of three successive fixed-term employment contracts, the Court held: construction projects or undertaking such as electrical, mechanical and civil engineering aspects in the repair of
buildings and from other kindred services.
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was
probationary, contractual in nature, and one with a definitive period. At the expiration of the period Individual complainants (petitioners) are employed by the respondent in connection with particular construction
stipulated in the contract, her appointment was deemed terminated and the letter informing her of the non-
projects and in hiring the herein complainants to be assigned to a particular project they have to fill up an employment
renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the
employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was due to application form and are subjected to a pre-hiring examination. If evaluated to be qualified they sign at the end portion
expire and that the contract would no longer be renewed. It is not a letter of termination. of their employment application form that states that they agree to the condition that their employment was for a fixed
period and for the specific project only.

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last contract with Petitioners allege that they have worked on many projects by the respondent and they were hired over and over again
Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department so they should be regarded as regular employees.
of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of
termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to ISSUE:
make the termination of his services effective. In any case, such clearance should properly have been given, not
denied. Whether or not petitioners are regular employees or project employees.

d. Project Employees
• PROJECT − refers to a job/undertaking within the regular or usual business of the employer,
but which is distinct and separate and identifiable from the undertakings of the company.
Such job/undertaking begins and ends at determined or determinable times
• Principal Test for Project Employment
◦ (a) Whether one is assigned to carry out a specific project or undertaking, the duration
and scope of which are specified at the time of engagement for a project.
◦ (b) Duration of work to be performed must be defined in the employment contract, and
◦ (c) Terms and conditions of employment must be made clear to the employee at the time
of hiring
Cartajenas v. Romago Electric Company, Inc., G.R. No. 82973, September 15, 1989
DOCTRINE:
HELD:
They are project employees, the NLRC is correct in ruling that said petitioners should be deemed as project
employees. The fact that the complainants worked for the respondent under different project employment contracts for
so many years could not be made a basis to consider them as regular employees for they remain project employees
regardless of the number of projects in which they have worked on.
As an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain from real
estate developers and builders of buildings. Since its work depends on the availability of such contracts or "projects,"
necessarily the duration of the employment of its work force is not permanent but co-terminus with the projects to
which they are assigned and from whose payrolls they are paid. It would be extremely burdensome for their employer
who, like them, depends on the availability of projects, if it would have to carry them as permanent employees and pay
them wages even if there are no projects for them to work on.

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 LABOR REVIEW
3. Probationary Employment
PROBATIONARY EMPLOYEE Refers to one who, for a given period of time, is being
observed and evaluated to determine whether he is
qualified for permanent employment. [Woodridge School
vs. Pe Benito, 570 SCRA 164, October 29, 2008]
PROBATIONARY EMPLOYMENT A phase in employment where the employer is afforded
the opportunity to observe the fitness of a probationary
employee while at work, and to ascertain whether he will
become an efficient and productive employee. [Magis
Young Achievers' Learning Center vs. Manalo, G.R. No.
178835, February 13, 2009; Philippine Daily Inquirer,
Inc. vs. Magtibay, Jr., G.R. No. 164532, July 27, 2007]
Rules
• Period of Probation 
◦ While there is no statutory cap on the minimum term of probation, the law sets a maximum “trial
period” during which the employer may test the fitness and efficiency of the employee. [Magis
Young Achievers' vs. Manalo, supra] 
◦ The computation of probationary period is made on a calendar date basis to be reckoned from the
date of appointment, NOT on a 30-days per month basis as provided for in Art. 13, Civil Code.
[Alcira vs. NLRC, 431 SCRA 508 (June 9, 2004) citing CALS Poultry Supply vs. Roco, 385
SCRA 479, 488 (2002)]
• BUT, 
◦ An employer, under exceptional circumstances, can extend a probationary period of employment,
such as when the same is established by company policy, or when it is required by the nature of
the work, provided such extension was agreed upon by the parties, and exercised before the
expiration of the original period of probation. [San Miguel Corporation vs. Caroline C. Del
Rosario, 477 SCRA 604 (December 13, 2005), citing Buiser vs. Leogardo, 216 Phil. 144, 150
(1984)] In fact, length of time is immaterial in determining the correlative rights of both parties in
dealing with each other during probationary period. [Philippine Daily Inquirer vs. Magtibay, Jr.,
supra] 
◦ It is important that the contract of probationary employment specify the period or term of its
effectivity. The failure to stipulate its precise duration could lead to the inference that the contract
is binding for the full three-year probationary period. [Magis Young Achievers' vs. Manalo, supra]
• Nature of Probation 
◦ The provision on employment on probationary status under the Labor Code is a primary example
of the fine balancing of interests between labor and management. Employment on probationary
status affords management the chance to fully scrutinize the true worth of hired personnel before
the full force of the security of tenure guarantee comes into play. Management is given the
opportunity to reject during the probationary period hirees who fail to meet its own adopted but
reasonable standards.
49
◦ A probationary employee enjoys security of tenure while on probation. He can be dismissed only
for a just cause OR when he fails to qualify for regular employment.
◦ Evaluation is made before expiration of the probationary period
◦ This means that they are terminable anytime. The employer could well decide if he no longer
needed the probationary's service or his performance fell short of expectations.
International Catholic Migration Commission v. NLRCC, G.R. No. 72222, January 30,
1989
DOCTRINES:
1. Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just
cause for terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the
Labor Code.
2. An employee who was terminated during the probationary period of her employment is not entitled to her salary
for the unexpired portion of her six-month probationary employment.
FACTS:
Petitioner (ICMC) engaged the services of private respondent Bernadette Galang as a probationary cultural orientation
teacher.
After three months, private respondent’s services were terminated for her failure to meet the prescribed standards of
petitioner as reflected in the performance evaluation of her supervisors during the teacher evaluation program.
Subsequently, private respondent returned to the ICMC premises on to accomplish the clearance requirements. In the
evening of that same day, she was found at the Freedom Park of Morong wet and shivering from the rain and acting
bizarrely. She was then taken to petitioner's hospital where she was given the necessary medical attention.
Two days later, she was taken to her residence in Manila. Thru a letter, her father expressed appreciation to petitioner
for taking care of her daughter. On that same day, her father received, on her behalf, the proportionate amount of her
13th month pay and the equivalent of her two-week pay.
Private respondent filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against petitioner
with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral
damages.
The Labor Arbiter rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for
moral and exemplary damages but ordered the ICMC to pay private respondent the sum of P6,000.00 as payment for
the last three months of the agreed employment period.
 LABOR REVIEW

Petitioner countered, stating that private respondent who was employed for a probationary period of three months 4. Difference between Job Contracting & Labor-Only Contracting
could not rightfully be awarded P6,000.00 because her services were terminated for failure to qualify as a regular
Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person
employee in accordance with the reasonable standards prescribed by her employer.
for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor,
if any, shall be paid in accordance with the provisions of this Code.
NLRC sustained the decision of the Labor Arbiter.

ISSUE: In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such
Whether or not an employee who was terminated during the probationary period of her employment is entitled to her employees to the extent of the work performed under the contract, in the same manner and extent that he is
salary for the unexpired portion of her six-month probationary employment liable to employees directly employed by him.

HELD:
No. Private respondent was terminated during her probationary period of employment for failure to qualify as a
regular member of petitioner's teaching staff in accordance with its reasonable standards. Records show that private
respondent was found by petitioner to be deficient in classroom management, teacher-student relationship and
teaching techniques.
Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for
terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code.
A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, is one who is on trial
by an employer during which the employer determines whether or not he is qualified for permanent employment. A
probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while
at work, and to ascertain whether he will become a proper and efficient employee. The word "probationary", as used to
describe the period of employment, implies the purpose of the term or period, but not its length
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only contracting and job contracting as
well as differentiations within these types of contracting and determine who among the parties involved
shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of
any provision of this Code.
There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the workers in the same manner
and extent as if the latter were directly employed by him.

Notwithstanding the finding of legality of the termination of private respondent, the NLRC justified the award of
salary for the unexpired portion of the probationary employment on the ground that a probationary employment for six JOB CONTRACTING LABOR-ONLY CONTRACTING
(6) months is an employment for a "definite period" which requires the employer to exhaust the entireprobationary
period to give the employee the opportunity to meet the required standards. ob contracting or subcontracting refers to an Labor-only contracting is an arrangement
Article 281 of the Labor Code gives ample authority to the employer to terminate a probationary employee for a just arrangement whereby a principal agrees to put wherein the contractor merely acts as an agent
cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the out or farm out with the contractor or in recruiting and supplying the principal
employer to the employee at the time of his engagement. subcontractor the performance or completion employer with workers for the purpose of
of a specific job, work or service within a circumventing labor law provisions setting
Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, Article 281 definite or predetermined period regardless of down the rights of employees. It is not
of the Labor Code does not likewise preclude the employer from terminating the probationary employment on whether such job, work or service is to be condoned by law.
justifiable causes as in the instant case. performed or completed within or outside the
premises of the principal
The SC found unmeritorious, therefore, public respondents argument that the security of tenure of probationary
In legitimate job contracting, the law creates an Where labor-only contracting exists, the Labor
employees within the period of their probation, as in the case of herein private respondent, justified the award of salary employer-employee relationship between the Code itself establishes an employer-employee
for the unexpired portion of her probationary employment. employer and the contractor’s employees only relationship between the employer and the

50
 LABOR REVIEW

for a limited purpose
Substantial capital or investment” refers to
capital stocks and subscribed capitalization in
the case of corporations, tools, equipments
[sic], implements, machineries and work
premises, actually and directly used by the
contractor or subcontractor in the performance
or completion of the job, work or service
contracted out.
Mandaue Galleon Trade v. Andales, G.R. No. 159668, March 7, 2008
DOCTRINE:
employees of the 'labor-only' contractor in
order to prevent a circumvention of labor laws.
Here, the contractor is considered merely an
agent of the principal employer.
On the other hand, MGTI denied the existence of employer-employee relationship (EER) and claimed that they were
workers of independent contractors. It further claimed that, as a survival measure, the management had decided to
retrench its employees and that the complainants were jealous of the separation pay paid to retrenched employees.
LA: Ordered the petitioners to take back the complainants and to pay 13th month pay (P545K) and held that there was
no dismissal. 183 complainants were regular piece-rate employees of MGTI since they were made to perform
functions which were necessary to the business and that the independent contractors were not properly identified.
NLRC: Affirmed LA but there was constructive dismissal thru the unilateral transfer. Ordered to pay separation pay in
addition ot the 13th month pay. It held that labor-only contracting and not job-contracting was present since the
alleged contractors did not have substantial capital in the form of equipment, machineries and work premises. The
NLRC, however, did not agree with the LA's finding that there was no dismissal.
CA: Initially dismissed the petition for certiorari an affirmed NLRC. Upon motion, an Amended Decision was made
which ordered petitioners to pay the 183 respondents of their separation pay computed an ½ month salary per year of
service up to the promulgation. (Reduction of sep pay)
ISSUE: WON there was EER

1. Labor-only contracting exists when the following criteria are present:
(a) Where the contractor or subcontractor supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among other things; and the workers
recruited and placed by the contractor or subcontractor are performing activities which are directly related to the
principal business of such employer; or
(b) Where the contractor does not exercise the right to control the performance of the work of the contractual
employee.
HELD: There was EER.
Based on Article 106 of the Labor Code and Sections 5 and 7 of the Implementing Rules, labor-only contracting exists
when the following criteria are present: (1) where the contractor or subcontractor supplying workers to an employer
does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among
other things; and the workers recruited and placed by the contractor or subcontractor are performing activities which
are directly related to the principal business of such employer; or (2) where the contractor does not exercise the right
to control the performance of the work of the contractual employee.
In this case, petitioners claimed that their contractors were independent contractors, and, therefore, this case was one
of permissible job contracting, was without basis.

FACTS:
The complainants alleged that MGTI hired them as weavers, grinders, sanders and finishers; some of them were told
that they would be transferred to a contractor, while some were told to look for work elsewhere as the company had no
work for them; some workers were not allowed to enter the company premises, while others were told that they could
no longer work since there was no work available; and they were dismissed without notice and just cause.
They further alleged that they were regular employees of MGTI because: (a) they performed their work inside the
company premises; (b) they were issued uniforms and were told to strictly follow company rules and regulations; (c)
they were under the supervision of MGTI; (d) MGTI supplied the materials, designs, tools and equipment in the
production of furniture; (e) MGTI conducted orientations; (f) MGTI issued memoranda regarding absences and waste
of materials; and (g) MGTI exercised the power to discipline them.
(1) The respondents’ work was directly related to MGTI's principal business. Where the employees are tasked to
undertake activities usually desirable or necessary in the usual business of the employer, the contractor is considered
as a labor-only contractor and such employees are considered as regular employees of the employer.
(2) MGTI was unable to present any proof that its contractors had substantial capital. The law casts the burden on the
contractor to prove that it has substantial capital, investment, tools, etc. Employees, on the other hand, need not prove
that the contractor does not have substantial capital, investment, and tools to engage in job-contracting.
Thus, the contractors were labor-only contractors since they did not have substantial capital or investment which
related to the service performed and respondents performed activities which were directly related to MGTI's main
business. MGTI, the principal employer, was solidarily liable with the labor-only contractors, for the rightful claims of
the employees. Under this set-up, labor-only contractors are deemed agents of the principal, MGTI, and the law makes
the principal responsible to the employees of the labor-only contractor as if the principal itself directly hired or

51
 LABOR REVIEW

employed the employees. In prohibiting labor-only contracting and creating an employer-employee relationship withheld from him up to the time of his actual reinstatement. (As amended by Section 34,
between the principal and the supposed contractors employees, the law intends to prevent employers from Republic Act No. 6715, March 21, 1989)
circumventing labor laws intended to protect employees. • Security of tenure is a paramount right of every employee that is held sacred by the
constitutional guarantees as an act of social justice. The right of every employee to security of
NOTES: tenure is all the more secured by the Labor Code by providing that the employer shall not
terminate the services of an employee, except for a just cause or when authorized by law
Section 5. Prohibition against labor-only contracting. Labor-only contracting is hereby declared prohibited. For this • case of private school teachers, their entitlement to security of tenure is governed by the
purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, Manual of Regulations for Private Schools and not the Labor Code
supplies or places workers to perform a job, work or service for a principal, and any of the following elements are [is] • AUTHORIZED CAUSES IN GENERAL
present: ◦ • 296 – just causes
◦ • 297 and 298 – authorized causes
i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or ▪ Others:
• 1. Total and permanent disability
service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are
• 2. Disease not curable in 6 months
performing activities which are directly related to the main business of the principal; or • 3. Valid application of a union security clause
• 4. Expiration of period in term employment
ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. • 5. Completion of projct in project employment
• 6. Failure in probation
The foregoing provisions shall be without prejudice to the application of Article 248 (C) of the Labor Code, as • 7. Sale amounting to closure of business
amended. • 8. Relocation of business to a distant place
• 9. Non-feasible reinstatement
Substantial capital or investment refers to capital stocks and subscribed capitalization in the case of corporations, • 10. Floating status or off-detail beyond 6 months
tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or • 11. Resignation
• 12. Violation of a contractal commitment as such being a consultant to a
subcontractor in the performance or completion of the job, work or service contracted out.
competitor
• 13. Retirement
The right to control shall refer to the right reserved to the person for whom the services of the contractual workers are • 14. Death of the employee
performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that ◦ • Differentiation in name is not always observed
end. • • The following are the AUTHORIZED causes for termination:
◦ 1. The installation of labor-saving devices
5. Dismissal from Employment ◦ 2. Redundancy
• DISMISSAL connotes permanent severance or complete separation of the worker from the service on ◦ 3. Retrenchment to prevent losses or the closing or
the initiative of the employer regardless of the reasons therefor. [Industrial & Transport Equipment, Inc. ◦ 4. Cessation of operation of the establishment or undertaking unless the closing is for the
vs. Tomas Tugade, et al., G.R. No. 158539, January 15, 2009] purpose of circumventing the provisions of this Title,
• SUSPENSION is a disciplinary measure that is imposed for violation by the employee of a reasonable • In transfer of ownership, the sale or disposition must be motivated by good faith as a
rule of conduct prescribed by the employer and made known to the employee. [Anonas Construction condition for exemption from liability. A change of ownership done in bad faith, or used to
and Industrial Supply Corporation vs. NLRC, G.R. No. 164052, October 17, 2008] defeat the rights of labor, apart from making the successoremployer liable for the
transgressions of its predecessor-employer, the displaced employees shall be deemed
a. Security of Tenure absorbed. [Peñafrancia Tours and Travel Transport, Inc. vs. Joselito P. Sarmiento, et al., G.R.
Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate No. 178397, October 20, 2010, Nachura, J.]
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of a. Just Causes
seniority rights and other privileges and to his full backwages, inclusive of allowances, and to Art. 282. Termination by employer. An employer may terminate an employment for any of the
his other benefits or their monetary equivalent computed from the time his compensation was following causes:

52
 LABOR REVIEW

a. Serious misconduct or willful disobedience by the employee of the lawful orders of his NLRC, October 17, 1996; Philippine Aeolus United Corporation vs.
employer or representative in connection with his work; NLRC, supra]
 
b. Gross and habitual neglect by the employee of his duties; • HABITUAL NEGLECT The repeated failure to perform one’s duties for
  a period of time. [Chua vs. NLRC, G.R. No. 146780, March 11, 2005
c. Fraud or willful breach by the employee of the trust reposed in him by his employer or
citing JEB & Associates vs. NLRC, 254 SCRA 457 (1996)]
duly authorized representative;
 
d. Commission of a crime or offense by the employee against the person of his employer ◦ Under Article 282 of the Labor Code, gross and habitual neglect by
or any immediate member of his family or his duly authorized representatives; and the employee of his duties is a sufficient and legal ground to
  terminate employment. Gross negligence connotes want of care in
e. Other causes analogous to the foregoing. the performance of one's duties. Habitual neglect implies repeated
failure to perform one's duties for a period of time, depending upon
a. Serious • SERIOUS MISCONDUCT the circumstances.
misconduct or • An improper and wrong conduct;
willful • A transgression of some established and definite rule of action, ◦ In dismissing an employee for gross and habitual neglect of duties,
a forbidden act, a dereliction of duty, willful in character, and the employer must be able to identify what specific duties the
disobedience by
implies wrongful intent and not mere error in judgment. employee violated and whether the violations were gross and
the employee of • For misconduct to be considered serious, it must be of such
the lawful orders habitual.
grave and aggravated character and not merely trivial or
of his employer or unimportant.
• TARDINESS/ ABSENTEEISM Habitual tardiness and absenteeism are
representative in • Elements of Serious Misconduct to be a just cause for dismissal:
• it must be serious; forms of neglect of duty. Lack of initiative, diligence, and discipline to
connection with
• it must relate to the performance of the employee’s duties; come to work on time everyday exhibit the employee’s deportment
his work;
and towards work, which is inimical to the general productivity and business
• it must show that the employee has become unfit to continue of the employer.
working for the employer
• Insubordination, as a just cause for the dismissal of an employee, ◦ Even assuming that respondent's absenteeism constitutes willful
requires the concurrence of at least two requisites: (1) the employee's disobedience, such offense does not warrant respondent's dismissal.
assailed conduct must have been willful, that is, characterized by a
Not every case of insubordination or willful disobedience by an
wrongful and perverse attitude; and 92) the order violated must have
been reasonable, lawful, made known to the employee, and must pertain employee reasonably deserves the penalty of dismissal. There must
to the duties which he had been engaged to discharge be a reasonable proportionality between the offense and the penalty
• Elements of Willful Disobedience
• (a) the employee’s assailed conduct must have been willful or ◦ While management has the prerogative to discipline its employees
intentional, the willfulness being characterized by a wrongful and to impose appropriate penalties on erring workers, pursuant to
and perverse attitude; and company rules and regulations, however, such management
• (b) the order violated must have been reasonable and lawful, prerogatives must be exercised in good faith for the advancement of
made known to the employee, and must pertain to the duties
the employer's interest and not for the purpose of defeating or
which he has been engaged to discharge.
circumventing the rights of the employees under special laws and
b. Gross and • GROSS NEGLIGENCE The want or absence of even slight care or valid agreements. Nevertheless, it may terminate an employee only
habitual neglect diligence amounting to a reckless disregard of the safety of a person or for a just cause, his prerogative to dismiss must be exercised
by the employee property. In evinces a thoughtless disregard of consequences without
of his duties; without abuse of discretion. Its implementation should be tempered
exerting any effort to avoid them. [Metro Transit Organization, Inc. vs.

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 LABOR REVIEW

with compassion and understanding
c. Fraud or willful • LOSS OF CONFIDENCE When the employer has reasonable ground to
breach by the believe the employee is responsible for the misconduct, and the nature of
employee of the his participation renders him unworthy of the trust and confidence
trust reposed in demanded by his position. [Cañete, Jr. vs. NLRC, G.R. No. 130425,
him by his September 30, 1999; Tolentino vs. PLDT, G.R. No. 160404, June 8,
employer or duly 2005] Applies only to an employee who holds a position of
authorized responsibility or trust and confidence, or a person invested with
representative; confidence on delicate matters. [Sanchez vs. NLRC, G.R. No. 124348,
August 1999; Cruz vs. Coca-Cola Bottlers Phils., Inc., G.R. No
• BREACH OF TRUST A willful violation of the trust. 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. [Pastor Dionisio Austria vs. NLRC, G.R.
No. 124382, August 16, 1999; PNCC vs. Mandagan, G.R. No. 160965,
July 21, 2008
• BUT, Loss of trust and confidence can be based on gross negligence
• Loss of trust and confidence is premised on the fact that an employee
concerned holds a position where greater trust is placed by management
and from whom greater fidelity to duty is correspondingly expected.
This includes managerial personnel entrusted with confidence on
delicate matters, such as custody, handling or care and protection of the
employer's property. The betrayal of this trust is the essence of the
offense for which an employee is penalized
• In the absence of any malicious intent or fraud, an employee's
negligence or carelessness is not a justifiable ground for the employer's
loss of trust and confidence, for the breach conceived of here should be
founded on a dishonest, deceitful or fraudulent act.
• Requisites
◦ There must be an actual breach; [Salas vs. Aboitiz One, Inc, G.R.
NO. 178236, June 27, 2008]
◦ (2) The loss of confidence must not be simulated;
◦ (3) It should not be used as a subterfuge for causes which are
illegal, improper, or unjustified;
◦ (4) It may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary
◦ (5) It must be genuine, not a mere afterthought to justify earlier
action taken in bad faith; [Tolentino vs. PLDT, G.R. No. 160404,
June 8, 2005; Weh Yueh Restaurant vs. Jayona, G.R. No. 159448,
December 16, 2005; Perez vs. PT&T, G.R. No. 152048, April 7,
2009]
◦ (6) The employee involved holds a position of trust and confidence
[Molina vs. Pacific Plans, Inc., G.R. No. 165476, March 10, 2006,
484 SCRA 498]
◦ (7) proof beyond reasonable doubt need not be established to prove
loss of trust and confidence, as reasonable ground is enough. [P.J.
Lhuillier, Inc. vs. NLRC, G.R. No. 158758, April 29, 2005; Norsk
Hydro (Phils.), Inc. vs. Rosales, Jr., G.R. No. 162871, January 31,
2007]
◦ (8) must be grounded on facts clearly and convincingly established
by the employer proving the facts and incidents upon which the loss
of confidence was based [Philippine Aeolus Automotive United
Corporation vs. NLRC, 311 SCRA 237, 247 (2000)] mere
uncorroborated assertions and accusations will not be sufficient;
[Uniwide Sales Warehouse Club vs. NLRC, G.R. No. 154503,
February 29, 2008; Metro Eye Security, Inc. vs. Salsona, G.R. No.
167637, September 28, 2007] and
◦ breach of trust and confidence as ground for dismissal must be
related to the performance of the duties of the employee such as
would show unfitness to continue working for the employer. [Blue
Dairy Corp. vs. NLRC, G.R. No. 129843, September 14, 1999;
Rentokil (Initial) Philippines vs. Sanchez, G.R. No. 176219,
December 23, 2008]
f. Commis
sion of a crime or
offense by the

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 LABOR REVIEW
employee against
the person of his
employer or any
immediate
member of his
family or his duly
authorized
representatives;
and
g. Other Termination of employment pursuant to a Union Security Clause → Termination
causes analogous of employment by virtue of a union security clause embodied in a CBA is
to the foregoing. recognized and accepted in our jurisdiction. This practice strengthens the union
and prevents disunity in the bargaining unit within the duration of the CBA. By
preventing member disaffiliation with the threat of expulsion from the union and
the consequent termination of employment, the authorized bargaining
representative gains more numbers and strengthens its position as against other
unions which may want to claim majority representation
▪ Totality of infractions doctrine → The totality of infractions or the number of violations
committed during the period of employment shall be considered in determining the penalty to be
imposed upon an erring employee. The offenses committed by petitioner should not be taken
singly and separately
Agabon v. NLRC, G.R. No. 158693, November 17, 2004
DOCTRINE:
1. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of
neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of
abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced that the employees has no
more intention to work. The intent to discontinue the employment must be shown by clear proof that it was
deliberate and unjustified.
FACTS:
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental
and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice
installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work.
55
Petitioners then filed a complaint for illegal dismissal and payment of money claims and on December 28, 1999, the
Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary
claims. The NLRC, however, reversed the Labor Arbiter because it found that the petitioners had abandoned their
work, and were not entitled to backwages and separation pay. The Court of Appeals in turn ruled that the dismissal of
the petitioners was not illegal because they had abandoned their employment but ordered the payment of money
claims.
Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless
they agreed to work on a pakyaw basis when they reported for duty on February 23, 1999. They did not agree on this
arrangement because it would mean losing benefits as Social Security System (SSS) members. Petitioners also claim
that private respondent did not comply with the twin requirements of notice and hearing.
Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work. In
fact, private respondent sent two letters to the last known addresses of the petitioners advising them to report for work.
Private respondents manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him
about the new assignment at Pacific Plaza Towers involving 40,000 square meters of cornice installation work.
However, petitioners did not report for work because they had subcontracted to perform installation work for another
company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this was not granted,
petitioners stopped reporting for work and filed the illegal dismissal case.
ISSUE:
Was the dismissal of petitioners for a just cause?
HELD:
YES. To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the
employer to give the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code
enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or the latters representative in connection with the employees work; (b)
gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust
reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or his duly authorized
representative; and (e) other causes analogous to the foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of
neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of
abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more
 LABOR REVIEW

intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and FACTS:
unjustified. Private respondent Jose Bacalso was employed as an admeasurer by the petitioner Gold City Integrated Port Services,
Inc. ("Gold City"). He was suspected by management of under measuring cargo. Hence, on 23 January 1987, the cargo
In February 1999, petitioners were frequently absent having subcontracted for an installation work for another control officer ordered two (2) other admeasurers to re-measure three (3) pallets of bananas which had already been
company. Subcontracting for another company clearly showed the intention to sever the employer-employee measured by private respondent. The re-measurement revealed that respondent had under-measured the bananas.
relationship with private respondent. This was not the first time they did this. In January 1996, they did not report for
work because they were working for another company. Private respondent at that time warned petitioners that they Private respondent felt insulted by the re-measurement and so the next day he went to the office of the Chief
would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever Admeasurer, Rolando Guanaco, and there confronted Nigel Mabalacad, one of the two (2) admeasurers who had re-
their employer-employee relationship. The record of an employee is a relevant consideration in determining the checked his work, regarding the matter. Private respondent quarreled with Mabalacad in the presence of Guanaco,
penalty that should be meted out to him. their immediate superior, inside the latter's office. Guanaco directed private respondent to stop provoking Mabalacad
and told both that being in his office, they should behave properly. Private respondent ignored this oral directive and a
The law imposes many obligations on the employer such as providing just compensation to workers, observance of the fistfight erupted then and there between him and Mabalacad. Both were eventually pacified by their co-workers.
procedural requirements of notice and hearing in the termination of employment. On the other hand, the law also
recognizes the right of the employer to expect from its workers not only good performance, adequate work and Private respondent Bacalso was then charged with assaulting a co-employee and falsifying reports and records of the
diligence, but also good conduct and loyalty. The employer may not be compelled to continue to employ such persons company relative to the performance of his duties, and was preventively suspended pending investigation of his case
whose continuance in the service will patently be inimical to his interests. by the union-management grievance committee.

Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 86000, September 21, 1990
DOCTRINES:
1. It is less than fair for management to charge an employee with one offense and then to dismiss him for having
committed another offense with which he had not been charged and against which he was therefore unable
adequately to defend himself. Correct specification of private respondent's alleged wrongdoing was obviously
important here, since the penalty that could appropriately be meted out depended upon what offense was charged and
proven. It has been stressed by the Court that the right of an employee to procedural due process consists of the twin
rights of notice and hearing. The purpose of the requirement of notice is obviously to enable the employee to defend
himself against the charge preferred against him by presenting and substantiating his version of the facts.
2. Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an employee, envisages
the concurrence of at least two (2) requisites: the employee's assailed conduct must have been wilful or intentional,
the wilfulness being characterized by a "wrongful and perverse attitude"; and the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge.
3. Not every case of insubordination or wilful disobedience by an employee of a lawful work-connected order of the
employer or its representative is reasonably penalized with dismissal. For one thing, Article 282 (a) refers to "serious
misconduct or willful disobedience". There must be reasonable proportionality between, on the one hand, the willful
disobedience by the employee and, on the other hand, the penalty imposed therefor.
On 11 April 1987, private respondent received a notice of termination of services upon the grounds of assaulting a co-
employee and of insubordination.
Private respondent Bacalso filed a complaint for illegal dismissal with the Regional Arbitration Branch No. 10 of the
Department of Labor and Employment on 25 May 1987.
Labor Arbiter - In favor of private respondent Bacalso holding that the dismissal was illegal because there was no
evidence to support the charge of insubordination, and that assault on a co-employee was punishable only with fifteen
(15) days suspension under the CBA's Schedule of penalties. In view of the strained relations between the parties,
however, the Labor Arbiter did not order reinstatement and awarded Bacalso separation pay and attorney's fees
instead.
NLRC – Affirmed with reinstatement with backwages. It declined to characterize the assailed conduct of Bacalso as
insubordination under Article 282 (a) of the Labor Code because Guangco's order was "not connected with" Bacalso's
work, and did not amount to wilful or gross disrespect.
In its Petition, Gold City emphasizes management's prerogative to promulgate rules of discipline and to enforce the
Schedule of disciplinary sanctions providing for dismissal of an employee who commits gross disrespect of a superior
officer. 13
In his Comment on the Petition, private respondent Bacalso alleged that he was apprised of the charge of
insubordination only in his notice of termination, and that he was thereby denied an opportunity to be heard on this
charge before being dismissed, in violation of Sections 2 and 5 of Rule 14 of the Omnibus Rules Implementing the
Labor Code.

56
 LABOR REVIEW
ISSUES:
1. Whether or not private respondent was denied due process in the course of his dismissal; and
2. Whether or not private respondent was dismissed for a just cause
HELD:
1. No.
The petitioner did not properly inform private respondent of all the infractions of company regulations which
subsequently became the justification for his dismissal. After being preventively suspended, he was charged with
assaulting a co-employee and falsifying reports and records of the company relating to the performance of his duties.
Consequently, throughout the investigation conducted at the company level, private respondent's explanations in
defense were shaped to meet only those charges.
Petitioner discovered it could not sustain the charge of falsification of company records against private respondent.
Since assault upon a co-employee, the charge admitted by private respondent, is punishable only with fifteen (15) days
suspension under the CBA's Schedule of penalties, it in effect became necessary for petitioner to characterize said
assault as an act of "insubordination or disrespect towards a superior officer", an offense punishable with dismissal
under the Schedule. So it came to pass that when private respondent received his notice of termination, the causes
therefor were stated as assault on a co-employee and insubordination.
The Court considers that there was here at least a partial deprivation of private respondent's right to procedural due
process. He could not be expected adequately to defend himself as he was not fully or correctly informed of the
charges against him which management intended to prove. Since Gold City here in effect charged private respondent
with a second offense other than falsification of company records, it was incumbent upon petitioner employer to have
given private respondent additional time and opportunity to meet the new charge against him of insubordination. Gold
City failed to do that here. In so failing, Gold City failed to accord to private respondent the full measure of his right to
procedural due process.
2. No.
Article 282 of the Labor Code provides in part:
Art. 282. Termination by Employer.-An employer may terminate an employment for any of the following causes: a)
Serious misconduct or wilful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work.
Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an employee, envisages the
concurrence of at least two (2) requisites: the employee's assailed conduct must have been wilful or intentional, the
wilfulness being characterized by a "wrongful and perverse attitude"; and the order violated must have been
57
reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge. Both requisites are present in the instant case.
It does not follow, however, that private respondent Bacalso's services were lawfully terminated either under Article
282 (a) of the Labor Code or under the CBA Schedule of penalties. We believe that not every case of insubordination
or wilful disobedience by an employee of a lawful work-connected order of the employer or its representative is
reasonably penalized with dismissal. For one thing, Article 282 (a) refers to "serious misconduct or willful
disobedience". There must be reasonable proportionality between, on the one hand, the willful disobedience by the
employee and, on the other hand, the penalty imposed therefor. Examination of the circumstances surrounding private
respondent's assault upon his co-employee shows that no serious or substantial danger had been posed by that fistfight
to the well-being of his other co-employees or of the general public doing business with petitioner employer; and
neither did such behavior threaten substantial prejudice for the business of his employer. The fistfight occurred inside
the offices of the Surveyors' Division, more particularly, Mr. Guangco's office, away from the view of petitioner's
customers or of the general public.
b. Authorized Causes
Art. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of termination due
to the installation of labor-saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
Art. 284. Disease as ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his co-
employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or
to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least
six (6) months being considered as one (1) whole year.
INSTALLATION OF Streamlining of personnel structure through the installation of
LABOR-SAVING machineries and equipment, or introduction of new methods for
DEVICE purposes of achieving maximum profitability of employer’s business.
[Agustilo vs. CA, G.R. No. 142875, September 7, 2001]
 LABOR REVIEW
REDUNDANCY Exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. A
position is redundant where it is superfluous, and superfluity of a
position/s may be the outcome of a number of facts, such as over hiring
of employees, decreased volume of business, or dropping of a particular
product line or service activity previously manufactured or undertaken
by the enterprise. [Coats Manila Bay, Inc. vs. Ortega, G.R. No. 172628,
February 13, 2009]
Requisites for Valid Redundancy Program (1) good faith on the part of
the employer in abolishing the redundant position; and fair and
reasonable criteria in ascertaining what positions are to be declared
redundant, and accordingly abolished.
The ground of redundancy does not require the exhibition of proof of
losses or imminent losses.
CLOSURE
The wisdom or soundness of abolishing a position for being redundant is
not subject to the discretionary review of the labor arbiter and the
NLRC, provided there is no violation of the law and no showing that it
was prompted by an arbitrary or malicious act
RETRENCHMENT One of the ways of terminating employment to preserve the viability of
the business. [Eastridge Golf Club, Inc. vs. Eastridge Golf Club, Inc.,
Labor Union-SUPER, G.R. No. 166760, August 22, 2008]
Termination of employment initiated by the employer through no fault
of the employees, and without prejudice to the latter, resorted to by
management during periods of business recession, industrial depression,
or seasonal fluctuations or during lulls occasioned by lack of orders,
shortage of materials, conversion of the plant for a new production
program or the introduction of new methods or more efficient
machinery, or of automation. [Mobilia Products, Inc. vs. Demecillo,
G.R. No. 170669, February 4, 2009; AMA Computer College vs. Garcia,
infra]
• Adequate, credible and persuasive evidence of dire financial
straits from drastic business losses must be presented by the
employer
It is a means of last resort, and justified only when all other less drastic
means have been tried and found insufficient. [FASAP vs. PAL, infra]
Requisites for Valid Retrenchment
• (a) the retrenchment is necessary to prevent losses and such
losses are proven;
• (b) written notice to the employees and to DOLE at least one
58
(1) month prior to the intended date of retrenchment;
• (c) payment of separation pay equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service,
whichever is higher. [AMA Computer College, Inc. vs. Garcia,
supra; Manatad vs. PT&T, G.R. No. 172363, March 7, 2008;
TPI Philippines Cement Corp vs. Cajucom VIII, 483 SCRA
494, 502- 03 (2006)]
• (d) the employer exercised its prerogative to retrench in good
faith; and
• (e) it uses fair and reasonable criteria ascertaining who would
be retrenched or retained. [Mendros, Jr. vs. Mitsubishi Motors
Phils. Corporation (MMPC), G.R. No. 169780, February 16,
2009]
• (f) the employer must first exhaust all other means to avoid
further losses without retrenching its employees. [FASAP vs.
PAL, G.R. No. 178083, July 22, 2008]
Complete or partial cessation of the operations and/or shutdown of the
establishment of the employer. It is carried out to either stave off the
financial ruin or promote the business interest of the employer.
Requisites for Valid Closure
• (a) the closure/cessation of business is bona fide – its purpose
is to advance the interest of the employer and not to defeat or
circumvent the rights of employees under the law or a valid
agreement;
• (b) a written notice was served on the employees and the
DOLE at least one month before the intended date of
closure/cessation of business; and
• (c) IN CASE OF CLOSURE NOT DUE TO FINANCIAL
LOSSES, that the employees affected have been give
separation pay equivalent to ½ month pay for every year of
service or one month pay, whichever is higher. [Eastridge Golf
Club, Inc., supra]
• Two (2) Types of Closure:
◦ (1) Due to business losses or reverses; and
◦ (2) NOT due to losses - Closure or cessation of business operations is allowed even
if the business is not undergoing economic losses. Just as no law forces anyone to
go into business, no law can compel anybody to continue in it.
◦ Procedural steps required :The law only requires that the employer serve a written
notice of the retrenchment on the employee concerned and the DOLE at least one
month before the intended date of retrenchment.
▪ 1-Month Notice Rule  If an employee consented to his retrenchment or
voluntarily applied for retrenchment, the required previous notice to the
 LABOR REVIEW

DOLE is not necessary as the employee thereby acknowledged the existence
of a valid cause for termination of his employment.
▪ A written notice that is short of the 30 days prior to notice rule will constitute
substantial compliance if the period not covered is compensated even if
unworked
• Payment of Separation Pay under Article 283  The amount of separation pay must be
computed from the time the employee commenced employment until the cessation of
operations of the employer’s business
• Requisites for Valid Dismissal under Art. 284 : The employer must adduce:
◦ (a) That the employee is suffering from a disease that is:
▪ (1) prohibited by law;
▪ (2) prejudicial to his health; or
▪ (3) prejudicial to his co-employees
◦ (b) A certification from a competent public authority that the disease of the
employee is incurable within a period of 6 months even with proper treatment.
[Duterte vs. Kingswood Trading Co., Inc., G.R. No. 160325, October 4, 2007] (c)
◦ (c) Payment of separation pay of one (1) month salary or one-half (1/2) month
salary for every year of service, whichever is higher, and a fraction of at least 6
months is considered as one (1) year.
• shopping were executed merely by petitioners counsel and not by petitioners.
Santos v. CA, G.R. No. 141947, July 5, 2001
DOCTRINE:
1. Redundancy exists when the service capability of the work force is in excess of what is reasonably needed to meet
the demands of the enterprise. Based on the facts, PEPSI wanted to restructure its organization. The soundness of this
business judgment of PEPSI is not subject to discretionary review on the part of the Labor Arbiter or of the NLRC so
long as no violation of law or arbitrary and malicious action is indicated.
program was made in good faith and that a close perusal of the job descriptions of both the CDS and ADM positions
would show that the two (2) were very different in terms of the nature of their functions, areas of concerns,
responsibilities and qualifications.
LA: Dismissed the complaint for lack of merit. Furthermore, he ruled that the one (1)-month written notice prior to
termination required by Art. 283 was complied with.
NLRC: Initially affirmed LA but later on reversed the LA upon finding that the Establishment Termination Report
was only submitted to the DOLE 2 months after the termination had already taken place. onetheless, the NLRC
dismissed the appeal, citing International Hardware, Inc. v. NLRC,which held -
x x x x if an employee consented to his retrenchment or voluntarily applied for retrenchment with the employer due to
the installation of labor-saving devices, redundancy, closure or cessation of operation or to prevent financial losses to
the business of the employer, the required previous notice to the DOLE is not necessary as the employee thereby
acknowledged the existence of a valid cause for termination of his employment x x x x
CA: Dismissed special civil action for certiorari upon finding that the verification and certification against forum
ISSUE:
Whether the petitioners were illegally dismissed.
HELD:
NO. The question of whether the duties and responsibilities of the CDS and ADM positions are similar is a question
properly belonging to both the Labor Arbiter and the NLRC. In fact, the NLRC merely affirmed the finding of the
Labor Arbiter.Thus it ruled -

FACTS: x x x We cannot subscribe to the complainants assertions that the positions have similar job descriptions. First, CDS
Petitioners Ismael V. Santos and Alfredo G. Arce were employed by PEPSI as Complimentary Distribution Specialists report to a CD Manager, whereas the ADMs do not report to the CD Manager, leading us to believe that the
(CDS) while Hilario M. Pastrana was employed as Route Manager. In a letter dated 26 December 1994, PEPSI organizational set-up of the sales department has been changed.
informed its employees that due to poor performance of its Metro Manila Sales Operations it would restructure certain
sales distribution systems. Certain positions, including that of petitioners, were declared redundant and abolished. Second, CDS are field personnel who drive assigned vehicles and deliver stocks to dealers who, under the job
Consequently, on 15 January 1995 petitioners left their respective positions, accepted their separation pays and description are those who sell and deliver the same stocks to smaller retail outlets in their assigned areas. The ADMs
executed the corresponding releases and quitclaims. However, before the end of the year, petitioners learned that are not required to drive trucks and they do not physically deliver stocks to wholesale dealers. Instead, they help
PEPSI created new positions called Account Development Managers (ADM) with substantially the same duties and dealers market the stocks through retail.
responsibilities as the CDS. Aggrieved petitioners filed a complaint with the Labor Arbiter for illegal dismissal with a
prayer for reinstatement, back wages and damages. Therefore, the two (2) positions being different, it follows that the redundancy program instituted by PEPSI was
undertaken in good faith. Redundancy exists when the service capability of the work force is in excess of what is
In their complaint, petitioners alleged that the creation of the new positions belied PEPSIs claim of redundancy. reasonably needed to meet the demands of the enterprise.
PEPSI, on the other hand, maintained that termination due to redundancy was a management prerogative the wisdom
and soundness of which were beyond the discretionary review of the courts. It further maintained that the redundancy

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 LABOR REVIEW
Based on the fact PEPSI wanted to restructure its organization. The soundness of this business judgment of PEPSI has
been assailed by petitioners but the wisdom or soundness of business judgment is not subject to discretionary review
on the part of the Labor Arbiter or of the NLRC so long as no violation of law or arbitrary and malicious action is
indicated. In the case at bar, no such violation or arbitrary action was established by petitioners.
We agree with the NLRC in its application of International Hardware v. NLRC that the mandated one (1) month
notice prior to termination given to the worker and the DOLE is rendered unnecessary by the consent of the worker
himself. Petitioners assail the voluntariness of their consent by stating that had they known of PEPSIs bad faith they
would not have agreed to their termination, nor would they have signed the corresponding releases and quitclaims.
Having established private respondents good faith in undertaking the assailed redundancy program, there is no need to
rule on this contention.
c. Procedural Due Process (Twin-notice & Hearing)
Art. 277. Miscellaneous provisions.
XXX
b. Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing a statement of the
causes for termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires in accordance with company
rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. Any decision taken by the employer shall be without prejudice to the right of the
worker to contest the validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission. The burden of proving that the termination
was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may suspend the effects of the termination pending resolution of the
dispute in the event of a prima facie finding by the appropriate official of the Department of
Labor and Employment before whom such dispute is pending that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33,
Republic Act No. 6715, March 21, 1989)
• The law mandates that the burden of proving the validity of the termination of employment
rests with the employer. Failure to discharge this evidentiary burden would necessarily mean
that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions,
accusations, and conclusions of employers do not provide for legal justification for
dismissing employees
• The employer is bound to furnish the employee concerned with two (2) written notices before
termination of employment can be legally effected. One is the notice apprising the employee
60
of the particular acts or omissions for which his dismissal is sought – and this may loosely be
considered as the proper charge. The other is the notice informing the employee of the
management's decision to sever his employment. However, the decision must come only after
the employee is given a reasonable period from receipt of the first notice within which to
answer the charge. The requirement of notice is not a mere technicality but a requirement of
due process to which every employee is entitled.
• REMEMBER, Article 277(b) recognizes the right to due process of all workers, without
distinction as to the cause of their termination, thus, none should be construed.
Acesite Corp v. NLRC, G.R. No. 152308, January 26, 2005
DOCTRINES:
1. Willful disobedience entails the concurrence of at least two (2) requisites: the employees assailed conduct has been
willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and the order violated
must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been
engaged to discharge.
2. In illegal dismissal cases, reinstatement to an illegally dismissed employees former position may be excused on
the ground of strained relations. This may be invoked against employees whose positions demand trust and
confidence, or whose differences with their employer are of such nature or degree as to preclude reinstatement.
FACTS:
Leo A. Gonzales (Gonzales) was hired as Chief of Security of Manila Pavillion Hotel. On January 1, 1995, Acesite
Corporation (Acesite) took over the operations of Manila Pavillion and renamed it Holiday Inn Manila (the hotel).
Acesite retained Gonzales as Chief of Security of the hotel.
Gonzales took a 4-day sick leave and took emergency leave on March 30, 1998. On April 16-29, 1998, he again took a
12-day vacation leave, thereby using up all leaves that he was entitled for the year. Before the expiration of his 12-day
vacation leave or on April 23, 1998, Gonzales filed an application for emergency leave for 10 days commencing on
April 30 up to May 13, 1998. The application was not, however, approved. By Acesites claim, he received a telegram
informing him of the disapproval and asking him to report back for work on April 30, 1998.
Gonzales did not report for work. On even date, he received a telegram from Acesite advising him that he was on
unauthorized leave and asking him to provide a written explanation within the next 24 hours why he was not reporting
for work. At the same time, he was required to report for work the following day or on May 1, 1998. Gonzales father
Anacleto sent a telegram to Acesite stating that he was still recovering from severe stomach disorder and would report
back for work on May 4, 1998. A medical certificate dated May 3, 1998 issued by a Dr. Laureano C. Gonzales, Jr.
stating that Gonzales was under his care from April 30 to May 3, 1998 was presented to prove that he indeed was
treated from such sickness.
 LABOR REVIEW

On May 4, 1998, around lunchtime, Gonzales reported for work and presented himself to Johann Angerbauer, then received it only on May 7, 1998. On the contrary, that he immediately went back to Manila upon receipt thereof
Resident Manager of the hotel. Angerbauer claims that when Gonzales went to him, he asked him to explain why he negates a perverse attitude.
had been absent despite orders for him to report back for work to which he (Gonzales) replied that it was necessary for
him to go home to his province in Abra As to Gonzales alleged concealment of his candidacy (for provincial board member) as a ground for Acesites loss of
trust and confidence in him, the same is not impressed with merit. It should be noted that Acesites ground for
Gonzales, on the other hand, claims that when he conferred with Angerbauer, he requested for leave without pay from terminating the services of Gonzales as stated in the Notice of Termination is his alleged acts of
May 5-9, 1998 which was provisionally approved on condition that he (Gonzales) would be sending his explanation insubordination/disobedience. The concealment of candidacy angle harped upon by Acesite can only thus be
through e-mail behind his absences on April 30, 1998 and May 2, 1998 so that Angerbauer could send it to the hotel considered as mere afterthought to further justify his illegal dismissal.
General Manager Phil Kennedy who was then out of the country.
With regard to Gonzales perceived feigning of illness, the same is purely speculatory. If there is anything that
Around 5:33 pm of May 4, 1998, Gonzales sent his explanation to Angerbauer through e-mail. In the evening Gonzales can be faulted for, it is his being too presumptuous that his application for leave would be approved.
Gonzales left for Abra.
2. No. Gonzales’ petition claims, among others, that the said court should not have given Acesite the option to reinstate
Also on May 4, 1998 Angerbauer sent another inter-office memo to Gonzales, requesting him to submit an explanation him or not since the case at bar does not fall under circumstances for which reinstatement is no longer possible. This
for failure to report to work despite the former’s request. Gonzales claims that he got hold of a copy of the above- contention has no merit.
quoted memo only on May 8, 1998. Gonzales, who claims to have received the May 5, 1998 telegram only in the
afternoon of May 7, 1998, immediately repaired back to Manila on May 8, 1998 only to be humiliatingly and In illegal dismissal cases, reinstatement to an illegally dismissed employees former position may be excused on the
ignominiously barred by the guard (a subordinate of Gonzales) from entering the premises It appears that on May 7, ground of strained relations. This may be invoked against employees whose positions demand trust and confidence, or
1998, Angerbauer issued a Notice of Termination through an inter-office memo. whose differences with their employer are of such nature or degree as to preclude reinstatement.

Gonzales thus filed a complaint against Acesite, Angerbauer and Kennedy for illegal dismissal with prayer for In the case at bar, Gonzales was Chief of Security, whose duty was to manage the operation of the security areas of the
reinstatement and payment of full backwages, service incentive leave, 13th month pay, moral and exemplary damages hotel to provide and ensure the safety and security of the hotel guests, visitors, management, staff and their properties
and attorneys fees. Gonzales, however, failed to appear in 2 consecutive hearings despite notice, meriting the dismissal according to company policies and local laws. It cannot be gainsaid that Gonzales position is one of trust and
by the Labor Arbiter of his complaint. confidence, he being in charge of the over-all security of said hotel.

ISSUES:
1. Whether there has been just cause to dismiss Gonzales from employment
2. Whether Gonzales is entitled to be reinstated
HELD:
1. No. Gonzales cannot be considered to have willfully disobeyed his employer. Willful disobedience entails the
concurrence of at least two (2) requisites: the employees assailed conduct has been willful or intentional, the
willfulness being characterized by a wrongful and perverse attitude; and the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.
In Gonzales case, his assailed conduct has not been shown to have been characterized by a perverse attitude, hence,
the first requisite is wanting. His receipt of the telegram disapproving his application for emergency leave starting
April 30, 1998 has not been shown. And it cannot be said that he disobeyed the May 5, 1998 telegram since he
Thus, reinstatement is no longer possible. In lieu thereof, Acesite is liable to pay separation pay of 1 month for every
year of service.
6. Abandonment
• ABANDONMENT the deliberate and unjustified refusal of an employee to resume his employment,
without any intention of returning. It is a form of neglect of duty. [Sugue vs. Triumph International
(Phils.), Inc., infra]
• Elements of Abandonment
◦ 1. failure to report for work or absence without valid or justifiable reason;
◦ 2. clear intention to sever the employer-employee relationship [Sugue vs. Triumph International
(Phils.), Inc., G.R. No. 164804, January 30, 2009; Fe La Rosa vs. Ambassador Hotel, G.R. No.
177059, March 13, 2009]
◦ 3. employer should have reported such fact to the nearest Regional Office of DOLE in accordance
with Rule XXIII, Section 7, Book V, DO 9-97 [R. Transport Corporation vs. Ejandra, G.R. No.
155264, May 6, 2005] The operative act that will ultimately put an end to this relationship is the
dismissal of the employee after complying with the procedure prescribed by law. [Kams

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 LABOR REVIEW
International, Inc. vs. NLRC, G.R. No. 128806, September 28, 1999; Floren Hotel vs. NLRC,
G.R. o. 155264, May 6, 2005]
◦ Presumption: A complaint for illegal dismissal negates allegation of abandonment. [Big AA
Manufacturer vs. Antonio, G.R. No. 160854, March 3, 2006, 484 SCRA 33] Mere failure to
report for work is not enough to amount to abandonment of work. Abandonment is the deliberate
and unjustified refusal of an employee to resume his employment.
▪ BUT,  If employer alleges that employee was never even dismissed, the presumption does
not hold.
▪ BECAUSE,  Sometimes the complaint for illegal dismissal is only made as leverage to
gain monetary benefits.
▪ THUS,  The rule is that an employee must positively prove first that he was indeed
dismissed before the burden of the employer under Article 277(b) applies.
Labor,et.al v. NLRC, G.R. No. 110388, September 14, 1995
DOCTRINE:
1. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid
or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element
as the more determinative factor and being manifested by some overt acts. Mere absence is insufficient. The
immediate filing of the complaint of illegal dismissal is proof enough of their desire to return to work.
FACTS:
Labor et. al. filed an illegal dismissal case against Gold City alleging that they were prevented from entering their
work place on 22 August 1991 to 24 August 1991, that their time cards were taken off the time card rack and they
were advised to resign. They assailed the notice of termination given to them only on 06 September 1991 and denied
having abandoned their work. They further aver that they were illegally dismissed to the violation of labor standards
they filed against private respondent. Gold City, on the other hand, avers that petitioners were not illegally dismissed
but abandoned their work. It also alleged that petitioners were under investigation for dishonest acts which they were
charged with estafa and the filing of the violation of labor standards were made to preempt action taken therein.
Furthermore, it alleged that notices of termination were given on 06 September 1991 to petitioners. However,
petitioners failed to reply and did not report for work.
LA ruled for petitioners. No abandonment as evidenced by the immediate filing of the complaint.
NLRC reversed NLRC. There is abandonment. They were given notices but failed to reply and return to work.
ISSUE:
WON there was abandonment on the part of the petitioners.
HELD:
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NO. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid
or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as
the more determinative factor and being manifested by some overt acts. Mere absence is not sufficient. Gold City did
not adduce any proof of some overt act of the petitioners that clearly and unequivocally show their intention to
abandon their posts. On the contrary, the petitioners lost no time in filing the case for illegal dismissal against them,
taking only four days from the time most of them were prevented from entering their work place from 22 August 1991
to 24 August 1991. They cannot, by any reasoning, be said to have abandoned their work, for as we have also
previously ruled, the filing by an employee of a complaint for illegal dismissal is proof enough of his desire to return
to work, thus negating the employer's charge of abandonment. Furthermore, petitioners Labor and Bonita presented
proof that during some of those days that they were supposedly on AWOL (absence without official leave), they were
actually on official leave.
7. Constructive Dismissal
Art. 286. When employment not deemed terminated. The bona-fide suspension of the operation of a
business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a
military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his desire to resume his
work not later than one (1) month from the resumption of operations of his employer or from his relief
from the military or civic duty.
• CONSTRUCTIVE DISMISSAL - Termination by reason of a bonafide suspension of operation of a
business or undertaking that exceeds six months. Otherwise stated, if the employee was forced to
remain without work or assignment for a period exceeding six months, then he is in effect
constructively dismissed.
• INRSELY, A bona fide suspension of the employer’s operation of a business or undertaking for a period
not exceeding six (6) months does not amount to termination of employment, but only a temporary
displacement of employees. The paramount consideration should be the dire exigency of the business of
the employer that compels it to put some of its employees temporarily out of work. [Pido vs. NLRC,
G.R. No. 169812, February 23, 2007]
◦ BUT, If the operation of the business is resumed within six months, it shall be the duty of the
employer to reinstate his employees to their former positions without loss of seniority rights.
[Lagonoy Bus Co., Inc. vs. CA, G.R. No. 165598, August 14, 2007]
◦ PROVIDED, That the employee should indicate his desire to resume his work not later than one
(1) month from resumption of operation/undertaking; or relief from military or civic duty.
• Constructive dismissal occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay
or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee leaving the latter with no other option but to quit.
Philippine Japan Active Carbon Corp. v. NLRC, G.R. No. 83239, March 8, 1989
DOCTRINE:
 LABOR REVIEW
1. A constructive discharge is defined as: "A quitting because continued employment is rendered impossible,
unreasonable or unlikely; as, an offer involving a demotion in rank and a diminution in pay."
2. It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes,
and competence, to move them around in the various areas of its business operations in order to "ascertain where
they will function with maximum benefit to the company. An employee's right to security of tenure does not give him
such a vested right in his position as would deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to
him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the
employee may not complain that it amounts to a constructive dismissal.
FACTS:
The private respondent, who had been employed in petitioner corporation since January 19, 1982, as Assistant
Secretary/Export Coordinator, was promoted on May 20, 1983 to the position of Executive Secretary to the Executive
Vice President and General Manager. On May 31, 1986, for no apparent reason at all and without prior notice to her,
she was transferred to the Production Department as Production Secretary, swapping positions with Ester Tamayo.
Although the transfer did not amount to a demotion because her salary and workload remained the same, she believed
otherwise so she rejected the assignment and filed a complaint for illegal dismissal.
LA: The Labor Arbiter found, on the basis of the evidence of both parties, that the transfer would amount to
constructive dismissal hence, her refusal to obey the transfer order was justified.
NLRC: approved the Labor Arbiter's decision but reduced to P10,000 the award of moral damages and the attorney's
fees to 10% of the judgment.
In her comment to the petition, the private respondent argued that she was dismissed without due process because she
was not given the opportunity to be heard concerning the causes of her transfer. Upon a careful consideration of the
petition and the documents annexed thereto as well as private respondent's comment.
ISSUES:
1. WON the employee was constructively discharged
2. WON private respondent's absence from work on June 2 to June 3, 1986 constituted an abandonment of her job in
the company resulting in the forfeiture of the benefits due her (because she believed the transfer was illegal).
HELD:
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1. Employee was NOT constructively dismissed.
In this case, the private respondent's assignment as Production Secretary of the Production Department was not
unreasonable as it did not involve a demotion in rank (her rank was still that of a department secretary) nor a
change in her place of work (the office is in the same building), nor a diminution in pay, benefits, and privileges.
It did not constitute a constructive dismissal.
It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and
competence, to move them around in the various areas of its business operations in order to "ascertain where they will
function with maximum benefit to the company. An employee's right to security of tenure does not give him such a
vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him
where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it
does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may
not complain that it amounts to a constructive dismissal.
2. Failure to report to work constituted mere insubordination and not abandonment,
On the other hand, we reject the petitioner's contention that the private respondent's absence from work on June 2 to
June 3, 1986 constituted an abandonment of her job in the company resulting in the forfeiture of the benefits due her.
While she was guilty of insubordination for having refused to move out of her position as Executive Secretary to the
Executive Vice-President and General Manager of the company, dismissal from the service would be a draconian
punishment for it, as her complaint for illegal dismissal was filed in good faith .
8. Floating Status
• Temporary “off-detail” or “floating status” is the period of time when security guards are in
between assignments or when they are made to wait after being relieved from a previous post until
they are transferred to a new one. It takes place when the security agency's clients decide not to
renew their contracts with the agency, resulting in a situation where the available posts under its
existing contracts are less than the number of guards in its roster. It also happens in instances
where contracts for security services stipulate that the client may request the agency for the
replacement of the guards assigned to it even for want of cause. [Bebina G. Salvaloza vs. NLRC,
et al., G.R. No. 182086, November 24, 2010, Nachura, J.]
◦ An employee who was placed on temporary “off-detail” on the ground of poor performance
and inefficiency, allegations of which were never made known to him, and instead was given
to various assignments amounts to constructive dismissal. Assignment to different posts
despite repeated errors and poor performance is considered condonation, which the employer
cannot invoke to justify placing the employee on temporary “off-detail”.
•
Reyes v. RP Guardians Security Agency, G.R. No. 193756, April 10, 2013
DOCTRINE:
 LABOR REVIEW
1 Temporary displacement or temporary off-detail of security guard is, generally, allowed in a situation where a
security agency's client decided not to renew their service contract with the agency and no post is available for the
relieved security guard. Such situation does not normally result in a constructive dismissal. Nonetheless, when the
floating status lasts for more than six (6) months, the employee may be considered to have been constructively
dismissed.
FACTS:
Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M. Calanno, Rogelio A. Supe, Jr.,
Roland R. Trinidad, and Aurelio A. Duldulao (petitioners) were hired by respondent RP Guardians Security Agency,
Inc. (respondent) as security guards. They were deployed to various clients of respondent, the last of which were the
different branches of Banco Filipino Savings and Mortgage Bank (Banco Filipino).
In September 2006, respondent's security contract with Banco Filipino was terminated. Petitioners were individually
informed of the termination of the security contract with Banco de Oro. Petitioners were directed to turnover their
duties and responsibilities to the incoming security agency and were advised that they would be placed on floating
status while waiting for available post. Petitioners waited for their next assignment, but several months lapsed and
they were not given new assignments.
Consequently, on April 10, 2007, petitioners filed a complaint for constructive dismissal. Respondent claimed that
there was no dismissal, of petitioners, constructive or otherwise, and asserted that their termination was due to the
expiration of the service contract which was coterminus with their contract of employment.
Labor Arbiter ruled in favor of petitioners ordering respondent to pay petitioners separation pay, backwages, refund of
trust fund, moral and exemplary damages, and attorneys fees. Aggrieved, respondent appealed to the NLRC. The
NLRC promulgated its sustained the finding of constructive dismissal by the LA, and the awards she made in the
decision. Respondent filed a petition for certiorari before the CA. The CA rendered a decision dismissing the petition
and affirming the assailed NLRC decision and resolution
ISSUE:
Whether or not the petitioners were constructively dismissed in view of their floating status for a period of more than 6
months.
HELD:
There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and the CA were one in their
conclusion that respondent was guilty of illegal dismissal when it placed petitioners on floating status beyond the
reasonable six-month period after the termination of their service contract with Banco de Oro.
Temporary displacement or temporary off-detail of security guard is, generally, allowed in a situation where a security
agency's client decided not to renew their service contract with the agency and no post is available for the relieved
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security guard. Such situation does not normally result in a constructive dismissal. Nonetheless, when the floating
status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. No
less than the Constitution guarantees the right of workers to security of tenure, thus, employees can only be dismissed
for just or authorized causes and after they have been afforded the due process of law.
9. Consequences of Illegal Dismissal
• An illegally dismissed employee is entitled to twin reliefs: backwages and reinstatement. The two
reliefs provided are separate and distinct.
a. Reinstatement - Reinstatement means restoration to a state or condition from which one had
been removed or separated. The person reinstated assumes the position he had occupied prior to
his dismissal. It presupposes that the previous position form which one had been removed still
exists, or that there is an unfilled position which is substantially equivalent or of similar nature as
the one previously occupied by the employee. An order of reinstatement is immediately self-
executory without the need for the issuance of a writ of execution
i. Actual Reinstatement - Actual reinstatement is restoration of an illegally
dismissed employee the position s/he had occupied prior to the illegal dismissal. In
order that s/he may be actually reinstated to his former position, said position from
which one had been removed must still exist, or that there is an unfilled position which
is substantially equivalent or of similar nature as the one previously occupied by the
employee
i. Payroll Reinstatement - In cases where the employer opted to
choose payroll reinstatement in compliance with the decision of the
labor arbiter, the employee reinstated in the employer's payroll is
equally entitled to receive all the benefits given to a regular employee
under the CBA
• Refund Doctrine If the decision of the labor arbiter is later
reversed on appeal upon the finding that the ground for dismissal
is valid, then the employer has the right to require the dismissed
employee on payroll reinstatement to refund the salaries s/he
received while the case was pending appeal, or it can be deducted
from the accrued benefits that the dismissed employee was
entitled to receive
ii. Separation in lieu of Reinstatement
• Strained Relation rule - Where reinstatement is not feasible, expedient or
practical, as where reinstatement would only exacerbate the tension and strained
relations between the parties, or where the relationship between the employer and
 LABOR REVIEW
employee has been unduly strained by reason of their irreconcilable differences,
particularly where the illegally dismissed employee held a managerial or key
position in the company, it would be more prudent to order payment of separation
pay instead of reinstatement.
• Other Instances where Separation pay is awarded
◦ if reinstatement is no longer feasible Payment of separation pay as a
substitute for reinstatement is allowed only under exceptional circumstances,
viz.: (1) when reasons exist which are not attributable to the fault or are
beyond the control of the employer, such as when employer closes business;
(2) when he illegally dismissed employee has contracted a disease and his
reinstatement will endanger the safety of his co-employees; or (3) where a
strained relationship exists between the employer and the dismissed
employee.
◦ as financial assistance (in cases of valid dismissal) Although by way of
exception, the grant of separation pay or some other financial assistance may
be allowed to an employee dismissed for just causes on the basis of equity as
a measure of social justice only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting
on his moral character. The policy of social justice is not intended to
countenance wrongdoing simply because it is committed by the
underprivileged.
Starlite Plastic Industrial Corp v. NLRC, G.R. No. 78491, March 16, 1989
DOCTRINE:
1. Loss of confidence, when adequately proven, constitutes a valid ground for dismissing an employee, however, the
right of an employer to dismiss employees on such ground must not be exercised arbitrarily and without just cause.
The basis thereof must be clearly and convincingly established and failure to do as such will caused in the illegal
dismissal of an employee. If the employee was dismissed illegally, the employer is obligated to reinstate such
employee to his former position or one reasonably equivalent thereto without loss of seniority rights, and to pay
backwages, without qualification or deduction. In the event that reinstatement is no longer feasible, or if the
employee decides not to be reinstated, the employer shall pay the employee separation pay in lieu of reinstatement.
2. Loss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper,
illegal or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
3. The theft charge not having been established, the dismissal of GOMEZ on the ground of loss of trust and
confidence cannot be sustained.
FACTS:
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Edgar Gomez was employed as a factory worker by Starlite sometime in March 1981. On 22 June 1984, Starlite
dismissed him on the ground that he was caught attempting to steal one ballast costing P80.00. Starlite reported the
matter to the police, after grievance meetings failed to resolve the controversy. A criminal complaint was filed against
Gomez, but the investigating fiscal dismissed the same saying that Starlite failed to establish a prima facie case against
Gomez.
Gomez then filed a complaint for illegal dismissal against Starlite. After the parties submitted their respective position
papers, the Labor Arbiter rendered his decision on dismissing the complaint for lack of merit. Gomez appealed the
decision to the NLRC which reversed the ruling of the Labor Arbiter.
Starlite filed a motion for reconsideration on the decision of the NLRC but was denied hence, the a petition for
certiorari was, with a prayer for the issuance of a writ of preliminary injunction or a temporary restraining order.
The Supreme Court issued a temporary restraining order enjoining the NLRC from enforcing its decision and the
petition was given due course.
Starlite mainly contends that it was justified in dismissing Gomez since it had lost its trust and confidence in him for
his act of attempting to steal the ballast and public respondent NLRC therefore committed grave abuse of discretion
amounting to lack of jurisdiction when it ordered the reinstatement of Gomez with full backwages.
Starlite argues that even if the fiscal dismissed the charges against Gomez, still it has reasonable ground to believe that
Gomez was responsible for the theft of the ballast and that such act of dishonesty justifies his dismissal on the ground
of loss of confidence.
ISSUE:
Whether or not Gomez was illegally dismissed by Starlite.
HELD:
Yes, Gomez was illegally dismissed by Starlite. There is no dispute that loss of confidence, when adequately proven,
constitutes a valid ground for dismissing an employee and proof beyond reasonable doubt is not required to terminate
him on this charge. It is sufficient that there is some basis for such loss of confidence and that the employer has
reasonable ground to believe or entertain the moral conviction that the employee concerned is responsible for the
misconduct and that the nature of his participation therein would render him absolutely unworthy of the trust and
confidence demanded of his position. The doctrine goes on further to include the basic rule that the conviction of an
employee in a criminal case is not indispensable to warrant his dismissal by his employer and that the fact that a
criminal complaint against the employee has been dropped by the city fiscal is not binding and conclusive upon a
labor tribunal.
The Court, however, has time and again stressed that the right of an employer to dismiss employees on the ground that
it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause; that although the
 LABOR REVIEW

dropping of a criminal prosecution for an employee's alleged misconduct does not bar his dismissal and proof beyond ◦ (2) Employees who have been re-employed as new hires shall be restored their
reasonable doubt is not necessary to justify the same, still the basis thereof must be clearly and convincingly seniority and other preferential rights. However, their backwages shall be computed
established. only to date of actual re-hiring;
◦ (3) Employees who have reached compulsory age of retirement shall receive
Thus, the Court in the case of General Bank and Trust Co. v. CA (1985) laid down the guidelines in the applicability backwages up to their retirement only. The same is true as regards the heirs of those
who have passed away;
of the doctrine of loss of confidence. Loss of confidence should not be simulated. It should not be used as a subterfuge ◦ (4) Employees who have not been re-employed, plus those who have executed
for causes which are improper, illegal or unjustified. Loss of confidence may not be arbitrarily asserted in the face of quitclaims and received separation pay or financial assistance, shall be reinstated
overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in without loss of seniority rights, and paid full backwages, after deduction of whatever
bad faith. amounts already received; and
◦ (5) Employees who had obtained substantially equivalent or even more lucrative
Applying the foregoing in this case, the Court found that there was utter failure here to establish or substantiate the employment elsewhere in 1998 or thereafter are deemed to have severed their
theft charge against Gomez. The NLRC found that contrary to the Labor Arbiter's findings that Gomez failed to employment with their previous employer, and shall be entitled to full backwages from
the date of their retrenchment only up to the date they found gainful employment
present an iota of evidence to prove his innocence, Gomez indeed presented exculpatory evidence consisting of the
elsewhere
statements of his co-employees Tamondong and Biong, the former attesting that he was not aware of any missing
ballast from his department and the latter claiming that it was in fact Alvarez who brought out a canopy containing a
ballast, which Gomez was accused of stealing. Although Starlite subsequently submitted the recanting affidavits of 10. Voluntary Resignation
said witnesses, said recanting affidavits did not inspire belief and the NLRC disregarded the same. The NLRC also
found that the findings of the fiscal exonerating Gomez from the theft charge was entitled to great weight as these
findings reveal at once that the theft charge which is the basis for the dismissal of Gomez was not clearly and VI. SOCIAL LEGISLATION
convincingly established by petitioner. 1. SSS Law
a. Coverage- Philippine Blooming Mills v. SSS
In view of the finding that Gomez was dismissed illegally, Starlite is obligated to reinstate Gomez to his former
1. GSIS Law
position or one reasonably equivalent thereto without loss of seniority rights, and to pay backwages for three years,
without qualification or deduction. In the event such reinstatement is no longer feasible, or if Gomez decides not to be 2. Limited Portability Law (R.A. No. 7699)
reinstated, Starlite shall pay him separation pay in lieu of reinstatement. 3. Employee’s Compensation and State Insurance Fund
Belarmino v. ECC, G.R. No. 90204, May 11, 1990
a. Backwages Lopez v. ECC, G.R. No. 90267, December 21, 1993
• Components of the amount of backwages  An unjustly dismissed employee is entitled to
full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent, computed from the time his compensation was withheld from him up to the time
of his actual reinstatement. [Siemens Philippines, Inc. vs. Domingo, G.R. No. 150488, July
28, 2008] As a rule, backwages shall be computed from the time of illegal dismissal up to
the finality of the decision
• HOWEVER, If the dismissal was due to cessation of business operations, backwages is not
to be computed beyond the closure of operations, as it is confiscatory.
• AND, An employee who was dismissed on the ground of AWOL due to incarceration, is
entitled to reinstatement, and under the principle of “no work, no pay”, his full backwages
shall only commence from the time he is refused work after acquittal.
• Yardsticks in the computation of the final amount of liability in Illegal Dismissal Cases
◦ (1) Employees who have been re-employed without loss of seniority rights shall be
paid backwages but only up to actual reinstatement;

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