LABOR LAW

A. FUNDAMENTAL PRINCIPLES AND POLICIES

1. Constitutional Provisions

a. Article II - Declaration of Principles and State Policies

The State shall promote a just and dynamic social order that will ensure the prosperity and independence of
the nation and free the people from poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for all.1

The State shall promote social justice in all phases of national development.2

The State values the dignity of every human person and guarantees full respect for human/rights.3

The State recognizes the vital role of the youth in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism,
and encourage their involvement in public and civic affairs.4

The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before
the law of women and men.5

The State affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare.6

The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides
incentives to needed investments.7

b. Article III Bill of Rights

No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be
denied the equal protection of the laws.8

No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government for redress of grievances.9

The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.10

1
Sec. 9
2
Sec.10
3
Sec.11
4
Sec. 13
5
Sec. 14
6
Sec. 18
7
Sec. 20
8
Sec. 1.
9
Sec. 4.
10
Sec. 8.
1
 c. Article XIII

The Congress shall give highest priority to the enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the
acquisition, ownership, use, and disposition of property and its increments.11

The promotion of social justice shall include the commitment to create economic opportunities based on
freedom of initiative and self-reliance.12

The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law. The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace. The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and growth.13

The State shall protect working women by providing safe and healthful working conditions, taking into
account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable
them to realize their full potential in the service of the nation.14

2. New Civil Code

The relations between capital and labor are not merely contractual. They are so impressed with public
interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special
laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.15

3. Labor Code

The State shall afford protection to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the
rights of workers to self- organization, collective bargaining, security of tenure, and just and humane conditions of
work.16

A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of democracy and the
promotion of social justice and development;

11
Sec. 1.
12
Sec. 2.
13
Sec. 3.
14
Sec. 14.
15
Art. 1700
16
Art. 3
2
 (c) To foster the free and voluntary organization of a strong and united labor movement;
(d) To promote the enlightenment of workers concerning their rights and obligations as union
members and as employees;
(e) To provide an adequate administrative machinery for the expeditious settlement of labor or
industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers indecision and policy-making processes affecting their
rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or administrative
agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions
of employment, except as otherwise provided under this Code17.

Definitions.

(a) Commission means the National Labor Relations Commission or any of its divisions, as the case may
be, as provided under this Code.

(b) Bureau means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional
offices established under Presidential Decree No. 1, in the Department of Labor.

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

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

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

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

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

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

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

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

17
Art. 211

3
 (k) Unfair labor practice means any unfair labor practice as expressly defined by the Code.

(l) Labor dispute includes any controversy or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment regardless of whether the disputants stand in the proximate relation of employer and
employee.

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

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

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

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

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

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

(s) Strike area means the establishment, warehouses, depots, plants or offices, including the sites or
premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by
picketing strikers in moving to and fro before all points of entrance to and exit from said establishment18.

Exclusive bargaining representation and workers participation in policy and decision-making.- The labor
organization designated or selected by the majority of the employees in an appropriate collective bargaining unit
shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining.
However, an individual employee or group of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in
policy and decision-making processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor-management councils shall
be elected by at least the majority of all employees in said establishment19.

18
Art. 212
19
Art. 255
4
B. RECRUITMENT AND PLACEMENT

1. Recruitment of Local and Migrant Workers

a. Recruitment and placement;20 defined

It 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 placement21.

b. Illegal Recruitment22

(a) License23 vs. Authority

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

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

(b) Essential elements of illegal recruitment

(1) the accused must be engaged in the recruitment and placement of workers, whether locally or overseas
and;

(2) the accused has not complied with such guidelines, rules and regulations issued by the Secretary of
Labor and Employment, particularly with respect to the securing of license or authority to recruit and deploy
workers either locally or overseas24.

20
Some relevant principles:
Mere impression that recruiter is capable of providing work abroad is sufficient.
"Referral" of recruits also constitutes recruitment activity.
Absence of receipt to prove payment is not essential to prove recruitment.
Only one (1) person recruited is sufficient to constitute recruitment.
Non-prosecution of another suspect is not material.
A person convicted for illegal recruitment may still be convicted for estafa
21
Art. 13, Labor Code.
22
Art. 38 (Local), Sec. 6, Migrant Workers Act, RA 8042
23
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
other place other than that stated in the license or authority, nor may such license or authority be transferred, conveyed or assigned to
any other person or entity.
Licensees or holders of authority or their duly authorized representatives may, as a rule, undertake recruitment and placement
activities ONLY at their authorized official addresses.
Change of ownership or relationship of single proprietorship licensed to engage in overseas employment shall cause the automatic
revocation of the license.
5
 (c) Simple illegal recruitment25

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.

(d) Illegal recruitment in large scale26

(e) Illegal recruitment as economic sabotage

When the commission thereof is attended by the qualifying circumstances as follows:

a. By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one
another;

b. In large scale - if committed against 3 or more persons individually or as a group.

(f) Illegal Recruitment vs. Estafa27

Illegal recruitment is malum prohibitum, while estafa is malum in se.

In the first, the criminal intent of the accused is not necessary for conviction. In the second, such an intent
is imperative.

(g) Liabilities

(a) local employment agency

Local Agency is solidarily liable with foreign principal

(b) foreign employer

i. Theory of imputed knowledge28

Ascribes the knowledge of the agent to the principal employer, not the other way around29.

(h) Pretermination of contract of migrant worker

24
People vs. Mary Rose Ondo @ Baby and Simeon Ortega, G.R. No. 101361 November 8, 1993
25
applies to both local and overseas employment.
26
See (e), infra
27
under Art. 315, par. 2, RPC.
Estafa is committed by any person who defrauds another by using 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 fraud (People v. Comila, G.R. No. 171448, February 28, 2007, 517 SCRA 153, 167)
28
knowledge of the agent is knowledge of the principal.
29
Rovels Enterprises, Inc. v. Ocampo, G.R. No. 136821, October 17, 2002, 391 SCRA 176; vide Air France v. Court of Appeals, et
al., 211 Phil. 601 (1983).
6
 Termination before the agreed termination date based not on lawful or valid ground, employer will pay
employee corresponding to the unexpired portion of the employment contract30

However, if the illegal dismissal took place on or after July 15, 1995, the illegally dismissed overseas worker
shall be entitled to the full reimbursement of his placement fee with interest at the rate of 12% per annum plus
salary for the unexpired portion of his employment contract or for 3 mos. for every year of the unexpired term,
whichever is less. 31

The basis of the award of back wages is the parties employment contract stipulating the wages and benefits.

c. Direct hiring32

General Rule:

No foreign employer may hire a Filipino worker for overseas employment.

Exceptions:

Direct hiring by

1. Members of the diplomatic corps;

2. International organizations; and
3. Such other employers as may be allowed by the Dept. of Labor.

2. Regulation and Enforcement

a. Remittance of foreign exchange earnings

Mandatory remittance requirements:

Seamen or mariners: 80% of the basic salary

Workers for Filipino Contractors and Construction Companies: 70% of the basic salary

30
Tierra Intl Construction Corp. vs. NLRC
31
RA 8042 , Sec. 10, par. 5
Under Section 10, RA 8042, the claim for unpaid salaries of overseas workers should be whichever is less between salaries for
unexpired portion of the contract or 3 months for every year of the remaining unexpired portion of the contract (in case contract is one
year or more)(Skippers Pacific, Inc. Vs. Mira, et al. NOV. 21, 2002)
However, SC clarified in the case of Marsaman Manning Agency vs. NLRC (G.R.No. 127195. Aug.25, 1999) that A plain reading
of section 10 clearly reveals that the choice of which amount to award an illegally dismissed OCW, i.e. whether his salaries for the
unexpired portion of his employment contract or 3 months salary for every year of the unexpired term whichever is less, comes into
play ONLY when the employment contract concerned has a term of at least 1 year or more. This is evident from the words for every
year of the unexpired term which follows the salaries x x x for three months.
32
Employers cannot directly hire workers for overseas employment except through authorized entities duly authorized by POEA as
follows:
a. public employment offices;
b. Philippine Overseas Employment Administration (POEA);
c. private recruitment entities;
d. private employment agencies;
e. shipping or manning agents or representatives;
f. such other persons or entities as may be authorized by the Secretary of Labor and Employment; and
g. construction contractors.
7
Doctors, engineers, teachers, nurses, and other professionals whose employment contract provide for lodging
facilities: 70% of the basic salary
All other professionals without board and lodging: 50% of the basic salary
Domestic and other service of workers: 50% 0f the basic salary

b. Prohibited activities

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

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

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

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

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

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

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

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

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

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

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

(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules and regulations.33

c. Regulatory and visitorial powers of the Labor Secretary

Visitorial and enforcement power34.

33
Art. 34
8
 (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall
have access to employers records and premises at any time of the day or night whenever work is being undertaken
therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor
law, wage order or rules and regulations issued pursuant thereto.

(b) Notwithstanding the provisions of Articles 129 and 21735 of this Code to the contrary, and in cases
where the relationship of employer-employee 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 finding of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection.

d. Penalties for illegal recruitment

(a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be
imposed if illegal recruitment constitutes economic sabotage as defined herein;

(b) Any licensee or holder of authority found violating or causing another to violate any provision of this
Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of
not less than two years nor more than five years or a fine of not less than P10,000.00 nor more than P50,000.00, or
both such imprisonment and fine, at the discretion of the court;

(c) Any person who is neither a licensee nor a holder of authority under this Title found violating
any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000.00 nor more
than P100,000.00 or both such imprisonment and fine, at the discretion of the court;

(d) If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the
officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer
is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings;

34
Art. 128 (as amended by R.A. No. 7730)
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 involved 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.
The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase
"(N)otwithstanding the provisions of Articles 129 and 217 of this Code to the contrary . . ." thereby retaining and further strengthening
the power of the Secretary of Labor or his duly authorized representative to issue compliance orders to give effect to the labor
standards provisions of said 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.
35
See Reference
9
 (e) In every case, conviction shall cause and carry the automatic revocation of the license or authority and all
the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety
bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may
be, both of which are authorized to use the same exclusively to promote their objectives.

C. LABOR STANDARDS

1. Hours of Work36

a. Coverage/Exclusions

It shall apply to employees in all establishments and undertakings, whether for profit or not, but not to

i. government employees,
ii. managerial employees,37
iii. field personnel38,
iv. members of the family of the employer who are dependent on him for support,
v. domestic helpers,
vi. persons in the personal service of another, and
vii. workers who are paid by results39

b. Normal Hours of Work

Eight (8) hours per day

c. Exceptions

(a) Health Personnel40

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.

(b) Compressed Work Week41

36
Work day" means 24 consecutive-hour period which commences from the time the employee regularly starts to work. It does not
necessarily mean the ordinary calendar day from 12:00 midnight to 12:00 midnight unless the employee starts to work at this unusual
hour.
"Work week" is a week consisting of 168 consecutive hours or 7 consecutive 24-hour work days beginning at the same hour and on
the same calendar day each calendar week.
Reduction of eight-hour working day - not prohibited by law provided there is no reduction in pay of workers.
Hours of work of part-time workers - payment of wage should be in proportion only to the hours worked.
37
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.
38
non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with reasonable certainty
39
as determined by the Secretary of Labor in appropriate regulations.
40
shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel
41
See shortening of work week (under 1. Hours of Work), supra
10
 Allowed provided employees voluntarily agree thereto; there is no diminution in pay; and only on temporary
duration.

d. Work interruption due to brownouts

Basic rules:

Brown-outs of short duration not exceeding twenty (20) minutes - compensable hours worked.

Brown-outs running for more than twenty (20) minutes may not be treated as hours worked provided any of
the following conditions are present:

i. The employees can leave their workplace or go elsewhere whether within or without the work premises;
or

ii. The employees can use the time effectively for their own interest.

e. Meal Break

Every employee is entitled to not less than one (1) hour (or 60 minutes) time-off for regular meals. Being
time-off, it is not compensable hours worked and employee is free to do anything he wants, except to work. If he is
required to work while eating, he should be compensated therefor.

If meal time is shortened to not less than twenty (20) minutes - compensable hours worked.

If shortened to less than 20 minutes, it is considered coffee break or rest period of short duration and,
therefore, compensable.

f. Idle time, waiting time, commuting time, travel time, whether part of hours of work or not

Idle time

Not working time; it is not compensable42.

Waiting time

Considered compensable if waiting is an integral part of the employee's work or he is required or engaged by
the employer to wait.

Travel time, commuting time:

i. Travel from home to work -not compensable working time

ii. Travel that is all in the days work - compensable hours worked.
iii. Travel away from home - compensable hours worked.

42
e.g. Stiller works as a Partas Trans bus driver. His route is from Vigan to Baguio, leaving at 6am and arriving at 12nn. He is
completely relieved from all duty until 6pm, when he again goes on duty for the return trip to Vigan. Is his idle time working time?
No, because during his idle time, he is specifically relieved from all duty. He is merely waiting to be engaged.
11
 g. Overtime work43

Work rendered after normal eight (8) hours of work44.

(a) Undertime not offset by overtime

Undertime work on any particular day shall not be offset by overtime on any other day.

(b) Waiver of overtime pay

The right of the laborers to overtime pay cannot be waived.

h. Night Work45

Night-shift differential is equivalent to 10% of employee's regular wage for each hour of work performed
between 10:00 p.m. and 6:00 a.m. of the following day.

i. CBA provision vis--vis overtime work

43
General Rule: no employee may be compelled to render overtime work against his will.
Exceptions:
a. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the
Chief Executive
b. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to public safety due to actual
or impending emergency in the locality caused by serious accident, fire, floods,
typhoons, earthquake, epidemic or other disasters or calamities;
c. When there is urgent work to be performed on machines, installations or equipment, or in order to avoid serious loss or damage to
the employer or some other causes of similar nature
d. When the work is necessary to prevent loss or damage to perishable goods;
e. When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice
to the business or operations of the employer; and
f. When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of
work is dependent thereon.
When an employee refuses to render emergency overtime work under any of the foregoing conditions, he may be dismissed on the
ground of insubordination or willful disobedience of the lawful order of the employer.
44
In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without deduction for facilities provided by
the employer.
"Premium pay" means the additional compensation required by law for work performed within 8 hours on non- working days, such as
rest days and special days.
"Overtime pay" means the additional compensation for work performed beyond 8 hours. Every employee entitled to premium pay is
also entitled to the benefit of overtime pay.
45
Night shift differential and overtime pay, distinguished
When the work of an employee falls at nighttime, the receipt of overtime pay shall not preclude the right to receive night differential
pay. The reason is, the payment of the night differential pay is for the work done during the night; while the payment of the overtime
pay is for work in excess of the regular eight (8) working hours.
12
 If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal
meaning thereof shall prevail. That is settled46.

The CBA is the law between the parties, hence, they are obliged to comply with its provisions47

2. Wages48

a. "No work no pay" principle49

Actual work is the basis of claim for wages

b. Coverage/Exclusions

General rule:

Payment of wages shall be made directly to the employee entitled thereto and to nobody else.

Exceptions.

i. Where the employer is authorized in writing by the employee to pay his wages to a member of his family;
ii. Where payment to another person of any part of the employees wages is authorized by existing law,
including payments for the insurance premiums of the employee and union dues where the right to check-off has
been recognized by the employer in accordance with a collective agreement or authorized in writing by
the individual employees concerned; or

iii. In case of death of the employee, in which case, the same shall be paid to his heirs without necessity of
intestate proceedings.

c. Facilities50 vs. supplements

46
United Kimberly-Clark Employees UnionPhilippine Transport General Workers Organization (UKCEU- PTGWO) v. Kimberly
Clark Philippines, Inc., G.R. No. 162957, March 6, 2006.
47
TSPIC Corporation v. TSPIC Employees Union, et al., G.R. No. 163419, February 13, 2008, 545 SCRA 215, 225.
48
Under the Civil Code, it is mandated that the laborers wages shall be paid in legal currency. Under the Labor Code and its
implementing rules, as a general rule, wages shall be paid in legal tender and the use of tokens, promissory notes, vouchers, coupons
or any other form alleged to represent legal tender is prohibited even when expressly requested by the employee
Exceptions :
A. Payment through automated teller machine (ATM) of banks provided the following conditions are met:
1. the ATM system of payment is with the written consent of the employees concerned;
2. The employees are given reasonable time to withdraw their wages from the bank facility which time, if done during working
hours, shall be considered compensable hours worked;
3. The system shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the
Labor Code, as amended;
4. There is a bank or ATM facility within a radius of one (1) kilometer to the place of work;
5. Upon request of the concerned employee/s, the employer shall issue a record of payment of wages,benefits and deductions for a
particular period;
6. There shall be an additional expenses and no diminution of benefits and privileges as a result of the ATM system of payment;
7. The employer shall assume responsibility in case the wage protection provisions of law and regulations are not complied with
under the arrangement
49
applies to special days but not to unworked regular holidays where employees are always paid 100% of their basic pay.
50
Value of facilities - the fair and reasonable value of board, lodging and other facilities customarily furnished by an employer to his
employees both in agricultural and non-agricultural enterprises
13
 Facilities shall include articles or services for the benefit of the employee or his family but shall not include
tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the
employers business.

In order that the cost of facilities furnished by the employer may be charged against an employee, his
acceptance of such facilities must be voluntary51.

Supplements means extra remuneration or special privileges or benefits given to or received by the laborers
over and above their ordinary earnings or wages.

d. Wages vs. salaries

Wages applies to compensation for manual labor, skilled or unskilled. It indicates inconsiderable pay for a
lower or less responsible character of employment.

Salaries denotes a higher degree of employment, or a superior grade of services, and implies a position or
office. It suggests a larger and more permanent or fixed compensation for more important services.

e. Wage distortion

A situation where an increase in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among employee groups in an establishment
as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or
other logical bases of differentiation.

The issue of whether or not a wage distortion exists is a question of fact that is within the jurisdiction of the
quasi- judicial tribunals.

f. CBA vis--vis Wage Orders CBA creditability

If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal
meaning of its stipulation shall prevail. In order to ascertain the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered. The CBA must be construed liberally rather
than narrowly and technically and the Court must place a practical and realistic construction upon it 52.

To ripen into a company practice that is demandable as a matter of right, the giving of the increase should
not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the
employer. Hence, even if the company continuously grants a wage increase as mandated by a wage order or
pursuant to a CBA, the same would not automatically ripen into a company practice.

g. Non-diminution of benefits53

51
Sec. 7, Rule VII, Book III, Rules to Implement the Labor Code.
52
United Kimberly-Clark Employees Union, et al. v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March 6, 2006.
53
The rule is applicable if it is shown that the grant of the benefits is:
Based on an express policy; or
Has ripened into practice over a long period of time,
The practice is consistent and deliberate; and
It is not due to an error in the construction/ application of a doubtful or difficult question of law.
14
 This principle mandates that the reduction or diminution or withdrawal by employers of any benefits,
supplements or payments as provided in existing laws, individual agreements or collective bargaining agreements
between workers and employers or voluntary employer practice or policy, is not allowed.54.

The benefits being given to employees cannot be taken back or reduced unilaterally by the employer because
the benefits have become part of the employment contract, written or unwritten.

h. Workers preference in case of bankruptcy55

1. The right to preference given to workers under Article 110 cannot exist in any effective way prior to the
time of its presentation in distribution proceedings. Article 110 applies only in case of bankruptcy or judicial
liquidation of the employer.

2. Judicial proceedings in rem is required for creditors claims against debtors to become operative.

3. To contend that Article 110 of the Labor Code is applicable also to extrajudicial proceedings would be
putting the worker in a better position than the State which could only assert its own prior preference in case of a
judicial proceeding.

4. The right of preference as regards unpaid wages recognized by Article 110 of the Labor Code does not
constitute a lien on the property of the insolvent debtor in favor of the workers but a right to a first preference in
the discharge of the funds of the judgment debtor.

i. Labor Code provisions for wage protection

1. Non-interference in disposal of wages.

Employers are not allowed to interfere in the disposal of wages of employees56.

2. Wage deduction.

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

i. When the deductions are authorized by law57, including deductions for the insurance premiums advanced
by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized
by the employer or authorized in writing by the individual employee himself;

54
See Art. 100
55
Art. 110, see Reference
It does not purport to create a lien in favor of workers or employees for unpaid wages either upon all of the properties or upon any
particular property owned by their employer. Claims for unpaid wages do not, therefore, fall at all within the category of specially
preferred claims established under Articles 2241 and 2242 of the Civil Code, except to the extent that such claims for unpaid wages
are already covered by Article 2241, number 6: claims for laborers wages, on the goods manufactured or the work done; or by
Article 2242, number 3: claims of laborers and other workers engaged in the construction, reconstruction or repair of buildings, canals
and other works, upon said buildings, canals or other works. To the extent that claims for unpaid wages fall outside the scope of
Article 2241, number 6 and 2242, number 3, they would come within the ambit of the category of ordinary preferred credits under
Article 2244.
Workers preference is an ordinary preferred credit.

56
Art. 112
57
e.g., SSS, Pag-IBIG
15
 ii. When the deductions are with the written authorization of the employees for payment to a third person
and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction;

iii. Withholding tax mandated under the National Internal Revenue Code;

iv. Withholding of wages because of employees debt to the employer which is already due;

v. Deductions made pursuant to a judgment against the worker under circumstances where the wages maybe
the subject of attachment or execution but only for debts incurred for food, clothing, shelter and medical
attendance.

vi. When deductions from wages are ordered by the court58.

vii. Deductions made for agency fee from non-union members who accept the benefits under the CBA
negotiated by the bargaining union. This form of deduction does not require the written authorization of the
non-union member.

3. Deposits for loss or damage.

No employer shall require his worker to make deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer, EXCEPT when the
employer is engaged in such trades, occupations or business where the practice of making deductions or requiring
deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor and Employment
in appropriate rules and regulations59.

Limitations.

No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made
unless the employee has been heard thereon, and his responsibility has been clearly shown60.

4. Withholding of wages and kickbacks prohibited.

It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a
worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means
whatsoever without the workers consent61.

5. Deduction to ensure employment.

It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer
or his representative or intermediary as consideration of a promise of employment or retention in employment62.

6. Retaliatory measures.

58
see also Art. 113
59
Art. 114
60
Art. 115
61
Art. 116
62
Art. 117
16
 It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any
manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title
or has testified or is about to testify in such proceedings63.

j. Allowable deductions without employees consent64

k. Attorneys fees and union service fee in labor cases

i. In cases of unlawful withholding of wages, the employer may be assessed attorneys fees equivalent to ten
percent of the amount of wages recovered.

ii. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for
the recovery of wages, attorneys fees which exceed ten percent (10%) of the amount of wages recovered65.

iii. The attorneys fees may be awarded only when the withholding of wages is declared unlawful.

iv. The basis of the 10% attorneys fees is the amount of wages recovered. Should there be any other
monetary awards given in the proceedings, the same may not be assessed or subjected to the 10% attorneys fees.

l. Criteria/Factors for Wage Setting

1) The demand for living wages;

2) Wage adjustment vis--vis the consumer price index;
3) The cost of living and changes or increases therein;
4) The needs of workers and their families;
5) The need to induce industries to invest in the countryside;
6) Improvements in standards of living;
7) The prevailing wage levels;
8) Fair return of the capital invested and capacity to pay of employers;
9) Effects on employment generation and family income; and
10) The equitable distribution of income and wealth along the imperatives of economic and social
development66

3. Rest Day

a. Right to weekly rest day

i. It shall be the duty of every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal
work days.

ii. The employer shall determine and schedule the weekly rest day of his employees subject to collective
bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide.
However, the employer shall respect the preference of employees as to their weekly rest day when such preference
is based on religious grounds.

63
Art. 118
64
see exceptions in Art. 114, supra
65
Art. 111
66
See Art. 124
17
 b. Preference of the employee67

c. When work on rest day authorized

The employer may require his employees to work on any day:

i. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;

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

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

iv. To prevent loss or damage to perishable goods;

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

vi. Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor
and Employment68.

4. Holidays

a. Right to holiday pay69

(1) In case of absences70

i. Employees on leave of absence with pay - entitled to regular holiday pay

ii. Employees on leave of absence without pay on the day immediately preceding a regular holiday may
not be paid the required holiday pay if he has not worked on such regular holiday.

iii. Employees on leave while on SSS or employee's compensation benefits- Employers shall grant the same
percentage of the holiday pay as the benefit granted by competent authority in the form of employees
compensation or social security payment, whichever is higher, if they are not reporting for work while on such
benefits.

iv. When the day preceding regular holiday is a non-working day or scheduled rest day - Employee shall not
be deemed to be on leave of absence on that day, in which case, he shall be entitled to the regular holiday pay if he
worked on the day immediately preceding the non-working day or rest day.

67
See a. Right to Weekly Rest Day, supra
68
Art. 92
69
Art. 94
Every worker shall be paid his regular daily wage during regular holidays.
The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice
his regular rate;
70
If worker did not work on a regular holiday, he is entitled to 0ne hundred percent (100%) of his basic pay; if he worked, he is
entitled to 200% thereof
18
 In case of absence during successive regular holidays, an employee may not be paid for both holidays if he
absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday,
in which case, he is entitled to his holiday pay on the second holiday.

(2) In case of temporary cessation of work

A worker is entitled to holiday pay for the regular holidays falling within the period.

(3) Of teachers, piece workers, seafarers, seasonal workers, etc.

Faculty members of private colleges and universities may not be paid for the regular holidays during
semestral vacations but shall be paid for such holidays during Christmas vacations71

However, hourly-paid faculty members of such schools are held not entitled to pay on regular holidays-
whether during semestral or vacation breaks-because these are known to both the school and faculty members
concerned as no class days, and the latter do not expect payment for such unwanted days. But such faculty
members must be paid (their regular rate) when a special day is proclaimed or when classes are called off or
shortened due to typhoons, rallies, etc.

Piece-rate workers are entitled to the minimum wage and 13th month pay, but not to holiday pay.72

Seasonal employees who do not work during off season are not entitled to pay for the regular holidays
occurring during their off-season. Workers assigned to skeleton crews that work during the off-season have the
right to paid on regular holidays falling in that duration.

b. Exclusions from coverage

In retail and service establishments regularly employing less than ten (10) workers.

5. Leaves

a. Service Incentive Leave Pay

(1) Right to service incentive leave

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.

(2) Exclusions from coverage73

i. those who are already enjoying the benefit herein provided,

ii. those enjoying vacation leave with pay of at least five days and
iii. those employed in establishments regularly employing less than ten employees or in establishments
exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or
financial condition of such establishment

71
Book III, Rule 4, Sec. 8-a.
72
Samahang Manggagawa sa Bandolino vs. NLRC, 275 SCRA 633.
73
ibid.
19
 (3) Commutable nature of benefit

It is commutable to cash if unused at the end of the year.

b. Maternity Leave74

(1) Coverage

A covered female employee who has paid at least three monthly maternity contributions in the twelve-
month period preceding the semester of her childbirth, abortion or miscarriage and who is currently employed shall
be paid a daily maternity benefit equivalent to one hundred percent (100%) of her present basic salary, allowances
and other benefits or the cash equivalent of such benefits for sixty (60) days.

(2) Conditions to entitlement

a. The employee shall have notified her employer of her pregnancy and the probable date of her childbirth
which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide;

b. Payment shall be advanced by the employer in two equal installments within thirty (30) days from the
filing of the maternity leave application;

c. In case of caesarian delivery, the employee shall be paid the daily maternity benefit for 78 days;
d. Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this
Act for the same compensable period of sixty (60) days for the same childbirth, abortion or miscarriage;

e. The maternity benefits shall be paid only for the first four deliveries after March 13, 1973;

f. The SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of
maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment
and legality thereof

g. If an employee should give birth or suffer abortion or miscarriage without the required contributions
having been remitted for her by her employer to the SSS, or without the latter having been previously notified by
the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits
which said employee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the
employee concerned75.

(3) Availment

Every pregnant woman in the private sector, whether married or unmarried, is entitled to the maternity
leave benefits.

c. Paternity Leave76

74
Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages and, therefore, may not be
included in computing the employees 13th-month pay for the calendar year.
Voluntary or self-employed members are not entitled to the maternity benefit because to be entitled thereto, corresponding
maternity contributions should be paid by employers. Voluntary or self-employed members have no employers so they do not have
maternity contributions.
75
R. A. 7322, March 3, 1992.
76
It is not convertible to cash if not availed of.
20
 (1) Coverage

Benefit granted to a married male employee allowing him not to report for work for seven (7) days (for each
delivery77 for the first 4 deliveries) but continues to earn the compensation therefor.

(2) Conditions to entitlement

His spouse78 has delivered a child or suffered miscarriage for purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the nursing of the newly-born child.

(3) Availment79

The paternity benefits may be enjoyed by the qualified employee before, during or after the delivery by his
wife.

However, the total number of days shall not exceed seven (7) working days for each delivery.

Provided further, this benefit shall be availed of not later than sixty (60) days after the date of said delivery.

d. Parental Leave80

(1) Coverage

Leave benefits of seven (7) days granted to a solo parent to enable him/her to perform parental duties and
responsibilities where physical presence is required.

(2) Conditions to entitlement

Granted to any solo parent employee who has rendered service of at least one (1) year.

(3) Availment81

e. Leaves for victims of violence against women82

(1) Coverage
(2) Conditions to entitlement
(3) Availment

Victims under this Act shall be entitled to take a paid leave of absence up to ten (10) days in addition to
other paid leaves under the Labor Code and Civil Service Rules and Regulations, extendible when the necessity
arises as specified in the protection order.83

77
include childbirth or any miscarriage
78
refers to the lawful wife. For this purpose, lawful wife refers to a woman who is legally married to the male employee concerned.
79
see (1) Coverage, supra
80
Republic Act No. 8972 (An Act Providing for Benefits and Privileges to Solo Parents and Their Children, Appropriating Funds
Therefor and for Other Purposes), otherwise known as The Solo Parents Welfare Act of 2000. This leave privilege is an additional
leave benefit which is separate and distinct from any other leave benefits provided under existing laws or agreements
81
see (1) Coverage, supra
82
Under R.A. 9262
83
Sec. 43, 1st par., ibid
21
 6. Service Charges

a. Coverage

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

b. Exclusion84

c. Distribution85

d. Integration86

7. Thirteenth (13th) Month Pay and other bonuses

a) Coverage

All rank-and-file employees are entitled to a 13th-month pay87 regardless of the amount of basic salary that
they receive in a month and regardless of their designation or employment status, and irrespective of the method by
which their wages are paid, provided that they have worked for at least one (1) month during a calendar year.

b) Exclusion/Exemptions from coverage

i. The government and any of its political subdivisions, including government-owned and controlled
corporations, except those corporations operating essentially as private subsidiaries of the government.

ii. Employers already paying their employees 13th-month pay or more in a calendar year or its equivalent;

iii.. Employers of household helpers and persons in the personal service of another in relation to such
workers

iv. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid
a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof,
except where the workers are paid on piece-rate basis in which case, the employer shall be covered by the 13th
month pay law insofar as such workers are concerned.

c) Nature of 13th month pay

84
See A. Coverage
85
ibid
86
ibid
87
Forms:
Christmas bonus;
Midyear bonus;
Profit sharing payments; and
Other cash bonuses amounting to not less than1/12 of its basic salary
22
 It is in the nature of wages. This is a year-end pay established by P.D. 851 which is equivalent to 1/12 of the
total basic salary earned by an employee within the calendar year, which is demandable as a legal obligation. It may
be given anytime but not later than December 24.

d) Commissions vis--vis 13th month pay

Commissions are given for extra efforts exerted in consummating sales or other related transactions. As
such, they are additional pay which do not form part of the basic salary.

The computation of the 13th month pay should be confined to the concept provided in P.D. 851, and
should be stripped of other payments properly considered as fringe benefits or additional pay, which do not form
part of the basic salary.88

e) CBA vis--vis 13th month pay

The presence of such stipulation in the CBA, particularly after the effectivity of P.D. 851-creates the
presumption that it was meant to be in addition to the legal requirement89

8. Women Workers

a. Discrimination

It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and
conditions of employment solely on account of her sex.
The following are acts of discrimination:
i. Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe
benefits, to a female employees as against a male employee, for work of equal value; and

ii. Favoring a male employee over a female employee with respect to promotion, training opportunities,
study and scholarship grants solely on account of their sexes.90

b. Stipulation against marriage

It shall be unlawful for an employer to require as a condition of employment or continuation of

employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate
or otherwise prejudice a woman employee merely by reason of her marriage91.

c. Prohibited Acts

It shall be unlawful for any employer:

88
Boie-Takeda Chemical vs. dela Serna; Phil. Fuji Xerox Corp. vs. Trajano, et al., 228 SCRA 329
89
Universal Corn Products vs. NLRC.
90
Art. 135, 1st par.
91
Art. 136
23
 1. To deny any woman employee the benefits provided for in this Chapter or to discharge any woman
employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code.

2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her
pregnancy;

3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may
again be pregnant92.

d. Classification of certain women workers

Any woman who is permitted or suffered to work, with or without compensation, in any nightclub, cocktail
lounge, massage clinic, bar or similar establishments under the effective control or supervision of the employer for a
substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an
employee of such establishment for purposes of labor and social legislation93.

e. Anti-Sexual Harassment Act94

The Act punishes sexual harassment if the same is:

1. work-related; or
2. Education-related; or
3. training-related.95

Work, education or training-related sexual harassment is committed by any employer, employee, manager,
supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or training or education environment, demands,
requests or otherwise requires any sexual favor from another, regardless of whether the demand, request or
requirement for submission is accepted by the object of said act.

Any person who directs or induces another to commit any act of sexual harassment as defined in the law, or
who cooperates in the commission thereof by another without which it would not have been committed, shall also
be held liable under the law.96

9. Minor Workers97

a. Regulation of working hours of a child98

i. A child below fifteen (15) years of age99 may be allowed to work for not more than twenty (20) hours a
week: Provided, That the work shall not be more than four (4) hours at any given day;

92
Art. 137
93
Art. 138
94
RA 7877
- declares sexual harassment unlawful in the employment, education or training environment.
95
Sec. 3, Ibid.
96
ibid
97
RA 7678, RA 9231
98
The term "child" shall apply to all persons under eighteen (18) years of age.
99
Children below fifteen (15) years of age shall not be employed except:
(1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her
family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor
24
 ii. A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight
(8) hours a day, and in no case beyond forty (40) hours a week;

iii. No child below fifteen (15) years of age shall be allowed to work between eight o'clock in the evening
and six o'clock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18)
shall be allowed to work between ten o'clock in the evening and six o'clock in the morning of the following day100.

b. Employment of the child in public entertainment101

c. Prohibition of employing minors in certain undertakings and in certain advertisements

No child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic
beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography102.

10. Employment of Househelpers

a. Definition

Domestic or household service shall mean service in the employers home which is usually necessary or
desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and
convenience of the members of the employers household, including services of family drivers103.

b. Benefits accorded househelpers

i. If the househelper is under the age of eighteen (18) years, the employer shall give him or her an
opportunity for at least elementary education. The cost of education shall be part of the househelpers
compensation, unless there is a stipulation to the contrary104.

ii. The employer shall furnish the househelper, free of charge, suitable and sanitary living quarters as well as
adequate food and medical attendance.
c. Termination

impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the
prescribed primary and/or secondary education; or
(2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio, television or
other forms of media is essential: Provided, That the employment contract is concluded by the child's parents or legal guardian, with
the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided,
further, That the following requirements in all instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety, morals and normal development of the child;
(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and
level of remuneration, and the duration and arrangement of working time; and
(c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing
program for training and skills acquisition of the child.
In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a
work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. (Section 12,
R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003).
100
Sec. 12-A, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.
101
see footnote 98, no. 2.
102
Sec. 14, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.
103
Art. 141, 2nd par.
104
Art. 146
25
 If the duration of the household service is not determined either in stipulation or by the nature of the
service, the employer or the househelper may give notice to put an end to the relationship five (5) days before the
intended termination of the service105.

d. Reliefs for unjust termination

If the period of household service is fixed, neither the employer nor the househelper may terminate the
contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he or
she shall be paid the compensation already earned plus that for fifteen (15)days by way of indemnity. If the
househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding
fifteen (15) days106.

11. Employment of Homeworkers

a. Definition

Homeworkers refer to workers who perform in or about their homes any processing of goods or materials
in whole or in part which have been furnished directly or indirectly by an employer or contractor, and thereafter to
be returned to the latter. The term does not include those situated within the premises or compound of an employer
or contractor, where work performed therein is under the active or personal supervision by or for the latter.

b. Rights and benefits accorded homeworkers

i. The employer is required to pay the homeworker or the contractor or sub-contractor for the work
performed immediately upon receipt of the finished goods or articles. When payment is made to a contractor or
sub-contractor, the homeworker shall be paid within one week after the contractor or subcontractor has collected
the goods or articles from the homeworker107.

ii. Whenever an employer contracts with a contractor in this regard, the employer should provide in such
contract that the employees or homeworkers of the contractor and the latters subcontractor shall be paid in
accordance with these regulations. In the event that such contractor or subcontractor fails to pay the wages or
earnings of his employees or homeworkers, such employee shall be jointly and severally liable with the contractor or
subcontractor to the workers of the latter, to the extent that the work is performed under such contract, in the same
manner as if the employees or homeworkers were directly engaged by the employer108

c. Conditions for deduction from homewokers earnings

No deductions shall me made from the homeworkers earnings for the value of materials lost, destroyed,
soiled or otherwise damaged unless the following conditions are met: a) the homeworker concerned is clearly shown
to be responsible for the loss or damage: b) the employee is given reasonable opportunity to show cause why
deductions should not be made: c) the amount of such deductions is fair and reasonable, and shall not exceed the
actual loss or damage; and d) the deduction is made at such rate that the amount deducted does not exceed 20
percent of the homeworkers earnings in a week109

12. Apprentices and Learners110

105
Art. 150
106
Art. 149
107
Rule XIII, Book III, Secs. 3 & 4, OR
108
ibid, Sec. 8, OR.
109
Rule XIII, Sec. 5, OR. This is to ensure the homeworkers right to due process.
110
Under RA 7277. Wage rate is 75% of the statutory minimum wage rate.
26
 a. Distinctions between Learnership and Apprenticeship

An apprentice is a worker who is covered by a written apprenticeship agreement with an employer while a
learner is a person hired as a trainee in industrial occupations which are non-apprenticeable and which may be
learned through practical training on the job for a period not exceeding three (3) months, whether or not such
practical training is supplemented by theoretical instructions.

13. Handicapped Workers 111

a. Definition of "handicapped workers"

One whose earning capacity is impaired: by age, physical or mental deficiency; or injury.

b. Rights of disabled workers

Handicapped workers may be hired as apprentices or learners if their handicap is not such as to effectively
impede the performance of job operations in the particular occupations for which they are hired.

No disabled person shall be denied access to opportunities for suitable employment. Qualified disabled
employees shall be subject to the same terms and conditions of employment and the same compensation, privileges,
benefits, fringe benefits, incentives or allowances as a qualified able-bodied person. Even a handicapped worker can
acquire the status of a regular employee if the factors that make for a regular employment are present, especially if
his appointment was repeatedly renewed112.

c. Prohibitions on discrimination against disable persons

The Magna Carta strictly prohibits discrimination against a qualified disabled person, even as the law gives
incentives to employers of disabled persons.

d. Incentives for employers

(a) To encourage the active participation of the private sector in promoting the welfare of disabled persons
and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private
entities which employ disabled persons.

(b) Private entities that employ disabled persons who meet the required skills or qualifications, either as
regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income,
equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons:

111
Ibid
If disability is not related to the work for which he was hired, he should not be so considered as handicapped worker. He may have
a disability but since the same is not related to his work, he cannot be considered a handicapped worker insofar as that particular work
is concerned.
112
Bernardo vs. NLRC, July 12, 1999 GR No. 122917
27
Provided, however, That such entities present proof as certified by the Department of Labor and Employment that
disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the
Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications.

(c) Private entities that improve or modify their physical facilities in order to provide reasonable
accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income,
equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however,
does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344.113

D. TERMINATION OF EMPLOYMENT

1. Employer-Employee Relationship

a. Four-fold Test

a. Selection and engagement of employee;

b. Payment of wages;
c. Power of dismissal; and
d. Power of control114

b. Probationary Employment

General rule.

Probationary period should not exceed six (6) months from the date the employee started working. One
becomes a regular employee upon completion of his six-month period of/probation.

Exceptions. -

1. when the employer and the employee mutually agree on a shorter or longer period;
2. when the nature of work to be performed by the employee requires a longer period;
3. when a longer period is required and established by company policy.

c. Kinds of Employment

(1) Regular employment

Where, notwithstanding any written or oral agreement between the employer and the employee to the
contrary:

i. the employee has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer.

ii. the employee has rendered at least one year of service, whether such service is continuous or broken, with
respect to the activity in which he is employed and his employment shall continue while such activity exists.

iii. the employee is allowed to work after a probationary period.

113
Sec. 8, R.A. 7277
114
the most important test
28
 (a) Reasonable connection rule

The primary standard is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. If the employee has been performing the job
for at least one year, even if the performance is not continuous or only intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of the activity of
the business115

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.
Additionally, "an employee is regular because of the nature of work and the length of service, not because of the
mode or even the reason for hiring them.116

(2) Project employment117

(a) Indicators of project employment

i. The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.

ii. Such duration, as well as the specific work/service to be performed, is defined in an employment
agreement and is made clear to the employee at the time of hiring.

iii. The work/service performed by the employee is in connection with the particular project/undertaking
for which he is engaged.

iv. The employee, while not employed and awaiting engagement, is free to offer his services to any other
employer.

v. The termination of his employment in the particular project/undertaking is reported to the Department
of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days
following the date of his separation from work, using the prescribed form on employees' terminations dismissals
suspensions.

vi. An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies

(3) Seasonal employment

Where the work or service to be performed by the employee is seasonal in nature and the employment is for
the duration of the season.
(4) Casual employment

Where an employee is engaged to perform a job, work or service which is merely incidental to the business
of the employer, and such job, work or service is for a definite period made known to the employee at the time of
engagement

115
International Pharmaceuticals, Inc. vs. NLRC, et al., March 9, 1998, 287 SCRA 213).
116
Matling Industrial and Commercial Corp. et al., v. Ricardo Coros, G.R. No. 157802, October 13, 2010)
117
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.
29
 (5) Fixed term employment118

(a) Requisites for validity

i. The fixed period was knowingly and voluntarily agreed upon by the parties.

ii. The employer and the employee dealt with each other on more or less equal terms with no moral
dominance being exercised by the employee119

iii. It is not valid if it is apparent that periods have been imposed to preclude acquisition of tenurial security
by the employee.

d. Job contracting and Labor-only contracting

(1) When is there "job contracting"?

It refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or service within a definite or predetermined
period, regardless of whether such job, work or service is to be performed or completed within or outside the
premises of the principal.

(2) When is there "labor-only contracting"?

It refers to an arrangement where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal

(3) Conditions that must concur in legitimate job contracting

i. the contractor or subcontractor does not have substantial capital or investment which relates to the job,
work or service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the principal; or

ii. the contractor does not exercise the right to control over the performance of the work of the contractual
employee120.

(4) Effects of finding that there is labor-only contracting

i. The subcontractor will be treated as the agent or intermediary of the principal. Since the act of an agent is
the act of the principal, representations made by the subcontractor to the employees will bind the principal.

ii. The principal will become the employer as if it directly employed the workers engaged to undertake the
subcontracted job or service. It will be responsible to them for all their entitlements and benefits under the labor
laws.

iii. The principal and the subcontractor will be solidarily treated as the employer.

118
Not limited to those by nature, seasonal or for specific projects with pre-determined dates of completion provided under the Labor
Code. They also include contracts to which the parties by free choice, have assigned a specific date of termination
119
Brent School Ruling.
120
Art. 106
30
 iv. The employees will become employees of the principal, subject to the classifications of employees under
Article 28 of the Labor Code.121

If the labor-only contracting activity is undertaken by a legitimate labor organization, a petition for
cancellation of union registration may be filed against it, pursuant to Article 239(e) of the Labor Code122.

2. Termination of Employment

a. Substantive Due Process

(a) Just Causes

(a) Serious misconduct123 or willful disobedience124

i. Requisites

a. it must be serious;
b. it must relate to the performance of the employees duties; and
c. it must show that the employee has become unfit to continue working for the employer.

(b) Gross and habitual neglect of duties

i. Requisites

a. Element of habituality may be disregarded where loss is substantial.

b. Element of habituality may be disregarded if totality of evidence justifies dismissal.
c. Element of actual loss or damage, not an essential requisite

(c) Fraud125 or willful breach of trust126 (loss of trust and confidence)

i. Requisites

a. The loss of confidence must not be simulated;

121
No. 13, DOLE Primer on Contracting and Subcontracting, Effects of Department Order No. 3, Series of 2001.
122
ibid
123
Transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment.
Grave and aggravated character and not merely trivial or unimportant; Must be in connection with the work of the employee.
124
Elements:
Assailed conduct must have been willful or intentional, willfulness characterized by a wrongful, perverse mental attitude
It must be established that the said orders, regulations or instructions are
Reasonable and lawful
Sufficiently known to the employee
In connection with his duties
125
Commission of fraud by an employee against the employer will necessarily result in the latter's loss of trust and confidence in the
former. Proof of loss is not required under this ground.
In order to constitute a just cause for dismissal, the act complained of should be work-related and must show that the employee
concerned is unfit to continue to work for the employer
126
loss of trust and confidence
In order to constitute a just cause for dismissal, the act complained of should be work-related and must show that the employee
concerned is unfit to continue to work for the employer.
31
 b. It should not be used as a subterfuge for causes which are illegal, improper or unjustified;
c. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;
d It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith; and
e. The employee involved holds a position of trust and confidence

(d) Abandonment of employment; Elements that 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. This is the more determinative factor
being manifested by some overt acts.

(e) Termination of employment pursuant to a Union Security Clause127

To validly dismiss an employee based on violation of union security clause, employer should still afford due
process to the expelled unionists. Although the Supreme Court has ruled that union security clauses embodied in
the CBA may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the
fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the
sanctity and inviolability of contracts, cannot override ones right to due process.

(f) Totality of infractions doctrine128

Dismissal due to repetition of related offenses, even if already punished with less punitive sanctions.

Culpability of employer's remarks were to be evaluated not only on the basis of their implicit implications,
but were to be appraised against the background of and in conjunction with collateral circumstances.129

(b) Authorized Causes

(a) Redundancy, 130Retrenchment131 and Closure

i. Procedural steps required

127
In the case of Alabang Country Club, Inc. vs. NLRC, [G.R. No. 170287, Feb. 14, 2008], the Supreme Court declared that in
terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove
that:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in the CBA; and
(3) there is sufficient evidence to support the unions decision to expel the employee from the union.
The foregoing requisites constitute just cause for terminating an employee based on the CBAs union security provision.
128
Cognate offenses rule
129
history of employer's labor relations + anti-union bias
130
Exists where the services of an employee are in excess of what would reasonably be demanded by the actual requirements of the
enterprise
A position is redundant when it is superfluous.
An employee has no legal obligation to keep on the payroll employees more than the number needed for the operation of the
business.
131
Requisites:
It is intended to prevent losses
Written notices are served on the workers and the DOLE at least one month before the effective date of retrenchment
Separation pay is paid to the affected workers.
Two notices are mandatory; if the notice to the workers is given later than the notice sent to DOLE, the date of termination should
be at least 1 month from the date of notice to the workers.

32
 A. Notice requirement

1. Mere posting of notice on employees bulletin board is not sufficient

2. Payment of 1 month salary in lieu of notice is not valid

If based on just causes:

1. Notice which apprises the employee of the particular acts or omissions for which his dismissal is sought;
and

2. Subsequent notice which informs the employee of the employers decision to dismiss him

If based on authorized causes:

Employer should give both the worker and the DOLE written notices 30 days prior to termination

B. Hearing

1. Worker may answer allegations within a reasonable period from receipt of the notice of dismissal.

2. Employer shall afford the worker ample opportunity to be heard and to defend himself with his
representatives.

3. Second notice informing the employee of his dismissal must be given after due hearing.

ii. Requirements for valid retrenchment/redundancy

1. written notice served on both the affected employees and the Department of Labor and Employment at
least one (1) month prior to the intended date of termination;

2. payment of separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for
every year of service, whichever is higher;

3. good faith in abolishing the redundant positions; and

4. fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished.132

iii. Criteria in selecting employees for dismissal

It is well settled that the characterization of an employees services as no longer necessary or sustainable,
and, therefore, properly terminable, is an exercise of business judgment on the part of the employer. However, the
wisdom or soundness of such characterization or decision is not subject to discretionary review provided, of course,
that violation of law or arbitrary or malicious action is not shown.133

132
such as less preferred status, e. g., (a) temporary employee; (b) efficiency; and (c) seniority
133
DOLE Phils. Inc. v. NLRC, 417 Phil. 428, 440 (2001)
33
 In several instances, the Court has held that it is important for a company to have fair and reasonable
criteria in implementing its redundancy program, such as but not limited to, (a) preferred status, (b) efficiency and
(c) seniority.134

iv. Standards to be followed

Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly
sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the
bona-fide nature of the retrenchment would appear to be seriously in question.

Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of
urgency for the retrenchment which is, after all, a drastic recourse with serious consequences for the livelihood of
the employees retrenched or otherwise laid off.

Thirdly, retrenchment, because of its consequential nature, must be reasonably necessary and likely to
effectively prevent the expected losses. The employer should have taken other measures prior or parallel to
retrenchment to forestall losses, i.e., cut other costs than labor costs.

Lastly, the alleged losses, if already realized, and the expected imminent losses sought to be forestalled, must
be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is apparent; any
less exacting standard of proof would render too easy the abuse of this ground for termination of services of
employees135.

(b) Disease or illness136

i. Requisites

1.the/employee/is/suffering/from/a/disease

2. his continued employment is either:

a. prohibited/by/law/or

b. prejudicial/to/his/health/or

c. prejudicial to the health of his co-employees;

3. there is a certification by a competent public health authority that the disease is of such nature or at such
stage that it cannot be cured within a period of six (6) months even with proper medical treatment;

4. notice of termination based on this ground should be served to the employee; and

134
Panlilio v. NLRC, 346 Phil. 30, 35 (1997))
135
F. F. Marine Corporation vs. The Honorable Second Division NLRC, G. R. No. 152039, April 8, 2005; See also Clarion Printing
House, Inc. vs. NLRC, G. R. No. 148372, June 27, 2005
136
Burden of proof rests on the employer.
Company physician is not a competent public health authority.
Medical certificate issued by company doctor is not sufficient
34
 5. separation pay shall be paid to him in the amount 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.

b. Procedural Due Process137

(1) Procedure to be observed in termination cases

The twin requirements of notice and hearing138 constitute the essential elements of the procedural due
process and neither of these elements can be eliminated without running afoul/of/the/procedural/mandate.

(2) Guiding Principles in connection with the hearing requirements in dismissal cases

i. "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the
employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing,
conference or some other fair, just and reasonable way.

ii. A formal hearing or conference becomes mandatory only when requested by the employee in writing or
substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify
it.

iii. The "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or
conference" requirement in the implementing rules and regulations.

(3) Agabon doctrine

Enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the
dismissal should be upheld. Where the dismissal is for just cause, the lack of statutory due process should not nullify
the dismissal or render it illegal or ineffectual. However, the employer should indemnify the employee for the
violation of his right to procedural due process. The indemnity to be imposed should be stiffer to discourage the

137
Written notice together with grounds or offenses charged.
Opportunity to be heard by means of a formal investigation.
Subsequent formal and written notice of termination.
Plus other requisites as may be provided by company handbooks in addition to the first three.
138
In the situations mentioned below, hearing is not required to be conducted by the
employer in order for the termination to be valid.
a. Admission of guilt by employee.
b. Termination due to authorized causes under Article 283.
c. Termination due to disease under Article 284.
d. Termination by the employee (resignation).
e. Termination after 6 months of bona-fide suspension of operation.
f. Termination due to expiration of fixed-period employment.
g. Termination of casual employment.
h. Termination due to completion of project in project employment.
i. Termination due to lapse of season in case of seasonal employment.
j. Termination due to expiration of period of probationary employment.
k. Termination due to expiration of tenure made coterminous with lease.
l. Termination due to expiration of contractual employment.
m. Termination due to abandonment.
n. Termination due to closure or stoppage of work by government authorities.
35
abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. In Agabon, the
nominal damages awarded was P30,000.00.

c. Reliefs for illegal dismissal

(1) Reinstatement aspect139

(a) Immediately executory140

i. Actual reinstatement

A writ of Execution is needed for a judgment of reinstatement after it becomes final and executory.141

ii. Payroll reinstatement

Must rest on special circumstances that render actual reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law142.

There must be immediate execution even without a writ of execution. However, the employer is granted the
option to merely reinstate the employee in the payroll and is entitled to receive her salary and other benefits as if she
were working.

(2) Separation pay143 in lieu of Reinstatement

(a) Strained Relation rule

There is a resultant strained relations or irretrievable estrangements between the employer and the employee
where the employee concerned occupies a position of trust and confidence and it is likely that if reinstated an
atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of
the employee.

Reinstatement will not be insisted upon if it is shown that the employee was dismissed for valid and
sufficient reason although the dismissal procedure was defective

(3) Backwages144

139
Restoration to a state from which one has been removed
140
Under Art 223, the decision of the Labor Arbiter reinstating a dismissed employee is immediately executory even while the case is
brought up on appeal.
141
Under Art 224 (a)
142
Manila Diamond Hotel Employees Union v. CA, et al., G.R. No. 140518 (Dec. 16, 2004); UST v. NLRC, 190 SCRA 758 (1990).
143
Reinstatement can no longer be effected in view of the LONG PASSAGE OF TIME or because of the realities of the situation.
It is the amount that an employee receives at the time of his severance from the service and is designed to provide the employee
with the wherewithal during the period that he is looking for another employment.
Separation pay is payable to an employee whose services are validly terminated for authorized causes (Article 283 and 284).
An employee dismissed for a just cause is not entitled to separation pay (Article 282).
Exception:
Where the employee is dismissed for causes other than serious misconduct or those reflecting on his moral character, separation
pay may be allowed as a measure of social justice
144
A form of relief that restores the income of the employee that was lost by reason of the unlawful dismissal.
36
 (a) Components of the amount of backwages

Following several decisions of the Supreme Court, the following benefits, in addition to the basic salary,
should be taken into account in the computation of backwages, if applicable:

1. Fringe benefits or their monetary equivalent.145

2. Increases in compensation and other benefits, including 13t h month pay146.
3. Transportation and emergency allowances147.
4. Holiday pay, vacation and sick leaves and service incentive leaves148.
5. Just share in the service charges149.
6. Gasoline, car and representation allowances150.
7. Any other allowances and benefits or their monetary equivalent151.

The computation of said benefits should be up to the date of reinstatement as provided under Article 279 152
of the Labor Code153.

(4) Constructive dismissal

Involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or

unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or
disclaim by an employer becomes unbearable to an employee.

An employee is deemed constructively dismissed where his status is changed from regular to casual.

(5) Preventive Suspension154

During pendency of the investigation, if the workers continued employment poses a serious and imminent
threat to life and property of employer, or of his co-employees.155

Can be extended provided the employer pays the suspended employee his wages and other benefits

Full Backwages have to be paid by an employer as part of the price or penalty he has to pay for illegally dismissing his employee.
Other benefits must be paid in addition to backwages. The computation should be based on the wage rate level at the time of the
illegal dismissal and not in accordance with the latest, current wage level of the employees position.
145
Acesite Corporation vs. NLRC, G. R. No. 152308, Jan. 26, 200).
146
Traders House, Inc. vs. NLRC, G. R. No. 120677, Dec. 21, 1998, 300 SCRA 360).
147
Santos vs. NLRC, G. R. No. 76721, Sept. 21, 1987; Soriano vs. NLRC, G. R. No. L-75510, Oct. 27, 1987..
148
St. Louise College of Tuguegarao vs. NLRC, G. R. No. 74214, Aug. 31, 1989; On service incentive leave, see Fernandez vs.
NLRC, G. R. No. 105892, Jan. 28, 1998, 285 SCRA 149..
149
Maranaw Hotels & Resort Corporation vs. NLRC, G. R. No. 123880, Feb. 23, 1999).
150
Consolidated Rural Bank [Cagayan Valley], Inc. vs. NLRC, G. R. No. 123810, Jan. 20, 1999, 301 SCRA 223.
151
Blue DairyCorporation vs. NLRC, G. R. No. 129843, Sept. 14, 1999.
152
See Reference
153
Fernandez vs. NLRC, supra.
154
Rule pending appeal:
Preventive suspension is punitive already; hence, if exonerated, the employee must be reinstated and compensated for the period of
his suspension
Suspension beyond 30 days ripens to dismissal
155
Max period: 30 days
37
 (6) Quitclaims156

Once an employee resigns and executes a quitclaim in favor of the employer, he is thereby estopped from
filing any further money claim.

It should be voluntarily signed.

But even if voluntary, if it is contrary to public policy, it is deemed invalid.

(7) Termination of employment by employee

Without just cause:

Written notice to the employer at least 1 month in advance

Failure to give noticemakes employee liable for damages

With just causes:

Serious insult by the employer or his representative on the honor and person of the employee

Implies malice or denotes ill-will or an intent to injure or to offend, or to wound the feelings of another.

Inhuman and unbearable treatment accorded the employee by the employer or his representative

Any conduct which will affect the mind and body or where continuance of it involves the life or health of
the employee

No comfort room provided by the employer compelling the employees to go outside employers business
premises to heed the call of nature constitutes unbearable treatment

No gas masks provided by employer although employees work deals with smoke-producing chemicals
amounts to inhuman treatment

Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate
members of his family;

The act of slapping the employee plus the threat of scratching her face with a pair of scissors constitute an
offense which would justify employees severing employer-employee relationship

Other causes analogous to any of the foregoing:

Undue delay in the payment of employees salaries or wages

Violation of employment term and condition
156
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. It is only when there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms are unconscionable that the law will step in to annul it.
Dire necessity is not an acceptable ground for annulling the releases.

38
 Unsanitary or unhygienic working conditions

3. Retirement Pay Law

a. Coverage

Applies to all employees in the private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid, except those specifically exempted. It also includes and
covers part-time employees, employees of service and other job contractors and domestic helpers or persons in the
personal service of another.

b. Exclusions from coverage

1. Employees of the National Government and its political subdivisions, including government-owned
and/or controlled corporations, if they are covered by the Civil Service Law and its regulations.

2. Domestic helpers and persons in the personal service of another

3. Employees of retail157, service158 and agricultural159 establishments or operations regularly employing not
more than ten (10) employees

c. Components of retirement pay

One-half/(1/2)/month/salary160.

In the absence of an applicable employment contract, an employee who retires shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6)
months being considered as one (1) whole year.

d. Retirement pay under RA 7641 vis--vis retirement benefits under SSS and GSIS laws

It provided for retirement pay to qualified private sector employees even in the absence of any retirement
plan in the establishment. It treats retirement as

i. Retirement under a CBA or contract shall not be less than those provided by law, and if such benefits re
less, the employer shall pay the difference; and

157
one principally engaged in the sale of goods to end-users for personal or household use. It shall lose its retail character qualified
for exemption if it is engaged in both retail and wholesale of goods.
158
one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such..
159
refers to an employer which is engaged in agriculture. This term refers to all farming activities in all branches and includes, among
others, the cultivation and tillage of soil, production, cultivation, growing and harvesting of any agricultural or horticultural
commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in farms or ponds, and any
activities performed by a farmer or on a farm as an incident to, or in conjunction with, such farming operations, but does not include
the manufacture and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products
160
Components. - For the purpose of determining the minimum retirement pay due an employee, the term one-half month salary
shall include all the following:
(a) fifteen (15) days salary of the employee based on his latest salary rate.
(b) the cash equivalent of five (5) days of service incentive leave;
(c) one-twelfth (1/12) of the 13th month pay due the employee; and
(d) all other benefits that the employer and employee may agree upon that should be included inthe computation of the employees
retirement pay.
39
 ii. Retirement in the absence of a retirement plan. the law allows: optional retirement, where an employee
may retire upon reaching the age of 60 years or more if he has served for at least five years in said establishment; or
compulsory retirement, upon reaching the age of 65 years.

Upon an employees requirement, whether optional or compulsory, his services may be continued or
extended on a case to case basis by agreement.

E. MANAGEMENT PREROGATIVE

1. Discipline161

The employers right to conduct the affairs of his business, according to its own discretion and judgment,
includes the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon
erring employees. This is a management prerogative where the free will of management to conduct its own affairs to
achieve its purpose takes form. The only criterion to guide the exercise of its management prerogative is that the
policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the
corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the
infraction.162

Instilling discipline among its employees is a basic management right and prerogative. Management may
lawfully impose reasonable penalties such as dismissal upon an employee who transgresses the company rules and
regulations163.

2. Transfer of employees164

The Supreme Court has recognized and upheld the prerogative of management to transfer an employee
from one office to another within the business establishment, provided there is no demotion in rank or diminution
of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause. This is a privilege inherent in the employers
right to control and manage its enterprise effectively.165

3. Productivity standard

The practice of a company in laying off workers because they failed to make the work quota has been
recognized in this jurisdiction166.

161
subject to reasonable regulation by the State in the exercise of its police power. (Associated Labor Unions-TUCP vs. NLRC, G. R.
No. 120450, Feb. 10, 1999; PLDT vs. NLRC, 276 SCRA 1 [1997]).
162
St. Michaels Institute vs. Santos, G. R. No. 145280, Dec. 4, 2001; Consolidated Food Corporation vs. NRLC, 315 SCRA 129, 139
[1999]
163
Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000.
164
Jurisprudential guidelines:
(a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral
movement from one position to another of equivalent rank or salary; 164
(b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes;
(c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a
demotion without sufficient cause;164
(d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee
165
Mendoza vs. Rural Bank of Lucban, G. R. No. 155421, July 7, 2004; Benguet Electric Cooperative vs. Fianza, G. R. No. 158606,
March 9, 2004.
166
Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639.
40
 Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work
goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing
unsatisfactory results. This management prerogative of requiring standards may be availed of so long as they are
exercised in good faith for the advancement of the employer's interest167.

4. Grant of Bonus

By definition, a "bonus" is a gratuity or act of liberality of the giver which the recipient has no right to
demand as a matter of right168. It is something given in addition to what is ordinarily received by or strictly due the
recipient. The granting of a bonus is basically a management prerogative which cannot be forced upon the employer
who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the
employee's basic salaries or wages,169 especially so if it is incapable of doing so.

5. Change of working hours

Well-settled is the rule that management retains the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees170.

The employer has the prerogative to control all aspects of employment in his business organization such as
hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be
followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers
and the discipline, dismissal and recall of workers171.

6. Marital discrimination172

Stipulation against marriage. - It shall be unlawful for an employer to require as a condition of employment
or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly
that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage173.

7. Post-employment ban

Whether such an agreement would be held valid and binding will depend on its reasonableness in relation to
the parties concerned, as well as to its public policy.

167
Buiser v. Leogardo, Jr., 131 SCRA 151, 158 (1984).
168
Traders Royal Bank v. NLRC, 189 SCRA 274 [1990] citing Aragon v. Cebu Portland Cement Co., 61 O.G. 4567.
169
Kamaya Point Hotel v. NLRC, 177 SCRA 160 (1989).
170
Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15 April 1998, 289 SCRA 86
171
Consolidated Food Corporation, et al. vs. NLRC, et al., G. R. No. 118647, Sept. 23, 1999.
172
Unless the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is
no better available or acceptable policy which would better accomplish the business purpose, an employer may not discriminate
against an employee based on the identity of the employees spouse. 172 This is known as the bona fide occupational qualification
exception.
Since the finding of a bona fide occupational qualification justifies an employers no-spouse rule, the exception is interpreted
strictly and narrowly by these state courts. There must be a compelling business necessity for which no alternative exists other than the
discriminatory practice. To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.
173
Sec. 136. LC.
41
 8. Limitations in its exercise

i. Management's prerogatives must be without abuse of discretion174.

ii. It must be duly established that the prerogative being invoked is clearly a managerial one.
iii. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice175

So long as a company's management prerogatives are exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them176.

F. SOCIAL LEGISLATION

1. SSS Law177

a. Coverage

(i) Compulsory upon all employees not over sixty (60) years of age and their
employers. In the case of domestic helpers, their monthly income shall not be less than One thousand pesos
(P1,000.00) a month.178

(ii) Spouses who devote full time to managing the household and family affairs, unless they are also engaged
in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a
voluntary basis.

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

b. Exclusions from coverage179

1. Agricultural labor when performed by a share or leasehold tenant or worker who is not paid any regular
daily wage or base pay and who does not work for an uninterrupted period of at least six months in a year;180

2. Domestic service in a private home;

3. Employment purely casual and not for the purposes of occupation or business of the employer;

174
Cruz vs. Medina (177 SCRA 565 [1989])
175
University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
176
San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989])
177
RA 8282
178
Also compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it
may prescribe, including but not limited to the following:
1.All/self-employed/professionals;
2. Partners and single proprietors of businesses;
3.Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the
definition of the term"employee" in Section 8 (d) of this Act; chanrobles virtual law library
4.Professional/athletes,/coaches,/trainers/and/jockeys;/and
5.Individual farmers and fishermen.
Unless otherwise specified in the law, all provisions of the SSS LAW applicable to covered employees shall also be
179
Sec. 8(j) of Social Security Act (As amended by Sec. 5, P.D. No. 735, S-1975).
180
As amended by Sec. 4, R.A. 2658
42
 4. Service performed by an individual in the employ of his son, daughter, or spouse, and service performed
by a child under the age of twenty-one years in the employ of his parents;

5. Service performed on or in connection with an alien vessel by an employee if he is employed when such
vessel is outside the Philippines;

6. Service performed in the employ of the Philippine Government or an instrumentality or agency thereof;

7. Service performed in the employ of a foreign government or international organization, or their wholly-
owned instrumentality: Provided, however, That his exemption notwithstanding, any foreign government,
international organization, or their wholly-owned instrumentality employing workers in the Philippines or
employing Filipinos outside of the Philippines may enter into an agreement with the Philippine Government for the
inclusion of such employees in the SSS except those already covered by their respective civil service retirement
systems: Provided, further, That the terms of such agreement shall conform with the provisions of this Act on
coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act
shall be supplementary to any such agreement181.

8. Such other services performed by temporary employees who may be excluded by regulation of the
Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer
engaging the services of said contractors182.

c. Benefits

(1) Monthly pension;

(2) Dependentspension ;
(3) Retirement benefits;
(4) Death benefits;
(5) Permanent disability benefits;
(6) Funeral benefit;
(7) Sickness benefit;
(8) Maternity leave benefit.

d. Beneficiaries

i. The dependent spouse until he or she remarries

ii. The dependent legitimate, legitimated or legallyadopted, and illegitimate children, who shall be the
primary beneficiaries of the member.

iii. In their absence, the dependent parents who shall be the secondary beneficiaries of the member.

iv. In the absence of all the foregoing, any other person designated by the member as his/her secondary
beneficiary.

2. GSIS183

a. Coverage

181
As amended by Sec. 1, R.A. 3839; Sec. 3, R.A. 4857; and Sec. 5, P.D. No. 735, S-1975
182
As amended by Sec. 5, P.D. No. 735, S-1975
183
RA 8291
43
 Compulsory for all employees receiving compensation who have not reached the
compulsory retirement age, irrespective of employment status.

b. Exclusions from coverage

i. members of the Armed Forces of the Philippines and the Philippine National Police, subject to the
condition that they must settle first their financial obligation with the GSIS, and

ii. contractuals who have no employer and employee relationship with the agencies they serve.

c. Benefits

i. Monthly Pension;
ii. Separation Benefits;
iii. Unemployment or Involuntary Separation Benefits;
iv.RetirementBenefits;
v. Permanent Disability Benefits;
vi.Temporary Total Disability Benefits;
vii. Survivorship Benefits;
viii.Funeral/Benefits;
ix. Compulsory Life Insurance Benefit;
x. Optional Insurance and/or pre-need coverage embracing life, health,
hospitalization, education, memorial plans, and such other plans as may be designed by the GSIS, for the member
and/or his dependents.

d. Beneficiaries

Primary beneficiaries- The legal dependent spouse until he/she remarries and the dependent children;

Secondary beneficiaries- The dependent parents and, subject to the restrictions on dependent children, the
legitimate descendants

3. Limited Portability Law184

Under this law, an employee who has worked in both the private and public sectors and has been covered
by both the Government Service Insurance System (GSIS) and the Social Security System (SSS) shall have his
creditable services or contributions in both Systems credited to his service or contribution record in each of the
Systems, which shall be summed up for purposes of old age, disability, survivorship and other benefits in case the
covered member does not qualify for such benefits in either or both Systems without the totalization.

4. Employees Compensation185 Coverage and when compensable

Coverage in the State Insurance Fund shall be compulsory upon all employers and their employees not over
sixty years of age: Provided, That an employee who is over sixty years of age and paying contributions to qualify for
the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage:
Provided, further, That in case of an employee who is both covered by the SSS and GSIS, only his employment
under the GSIS shall be considered for purposes of his coverage.

184
RA 7699
185
P.D. No. 626
44
 The State Insurance Fund shall be liable for compensation to the employee or his dependents, except when
the disability or death was occasioned by the employee's intoxication, willful intention to injure or kill himself or
another, notorious negligence, or otherwise provided under this Title.

45
G. LABOR RELATIONS LAW

1. Right to Self-organization186

The right to join, assist or form LABOR ORGANIZATIONS for collective bargaining and to engage in
lawful concerted activities for the same purpose or for their mutual aid and protection.

Any employee187, whether employed for a definite period or not, shall beginning on the first day of his/her
service, be eligible for membership in any labor organization188.

a. Who may unionize for purposes of collective bargaining

All persons employed in:

Commercial
Industrial ) enterprises
Agricultural ) whether operating for profit or not
Charitable
Religious ) Institutions
Educational

The following are also included in the coverage of the right to self-organization

Ambulant workers
Intermittent workers
Rural workers
Workers with no definite employers
Itinerant workers
Self-employed

Specific Coverage:

Supervisory employees189

186
Employees of government corporations established under the Corporation Code (without original charters) shall have the right to
organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to
form associations for purposes not contrary to law.
General rule: All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging directly or
indirectly in all forms of trade union activities without prejudice to normal contacts between Philippine labor unions and recognized
international labor centers.
Exception: Alien employees with valid working permits issued by the DOLE may exercise the right to self-organization and join
or assist labor organizations for purposes of collective bargaining, if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.
187
Three categories of employees:
a. Managerial;
b. Supervisory; and
c. Rank-and-file.
188
Ibid.; See also Art. 277; No. 10, Basic Amendments under R. A. 6715, prepared by Members of the Senate-House Conference
Committee of Congress.
46
 Terminated employees who are contesting their termination
Aliens with valid work permit
Government employees
New employees
Iglesia ni Kristo members
Security guards

(1) Who cannot form, join or assist labor organizations

As a general rule, only top and middle managers are not allowed to join any labor organization. First-line
managers190 are allowed to join a supervisory union but not the union of rank-and-file employees or vice-versa. In
fact, the law does not allow mixed membership of both supervisory and rank-and-file employees in one union. A
union with such mixed membership is no union at all. It cannot exercise the rights of a legitimate labor
organization.

(2) Executive Order No. 180

The right of government employees to form, join or assist employees organizations of their own choosing is
not regarded as existing or available for purposes of collective bargaining but simply for the furtherance and
protection of their interests191.

Excluded from negotiation by government employees are the terms and conditions of employment that are
fixed by law, it being only those terms and conditions not otherwise fixed by law.

concedes to government employees the right to engage in concerted activities, including the right to strike
provided such activities are exercised in accordance with law.

b. Bargaining unit

The group or cluster of jobs or positions that supports the labor organization which is applying for
registration, within the employers establishment

Refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or
less than all of the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit.

(1) Test to determine the constituency of an appropriate bargaining unit

Any of the following four (4) modes may be used:

i. Substantial mutual interests principle or community or mutuality of interests rule.

189
shall not be eligible for membership in a labor union of the rank-and-file employees but may form, join or assist separate labor
unions of their own.
A union whose membership is a mixture of supervisors and rank-and-file is not and cannot become a legitimate labor organization
A local supervisors union should not be allowed to affiliate with the national federation of union of rank-and-file employees
where that federation actively participates in union activity in the company and the rank-and-file employees are directly under the
authority of the supervisory employees
190
or supervisory employees
191
Arizala vs CA, Sept. 14, 1990
47
 The employees sought to be represented by the collective bargaining agent must have substantial mutual
interests in terms of employment and working conditions as evinced by the type of work they perform. It is
characterized by similarity of employment status, same duties and responsibilities and substantially similar
compensation and working conditions192.

ii. Globe doctrine193

The determining factor is the desire of the workers themselves. Consequently, a certification election
should be held separately to choose which representative union will be chosen by the workers194.

iii. Collective bargaining history.

Enunciates that the prior collective bargaining history and affinity of the employees should be considered in
determining the appropriate bargaining unit. However, the Supreme Court has categorically ruled that the existence
of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit195.

iv. Employment status.

The determination of appropriate bargaining unit based thereon is considered an acceptable mode.196

(2) Voluntary Recognition197

Voluntary recognition of bargaining agent is the free and voluntary act of the employer of extending and
conferring full recognition to a union as the sole and exclusive bargaining representative of the employees in an
appropriate bargaining unit, for purposes of collective bargaining. This is allowed when there is only one union
operating in the bargaining unit.

(a) Requirements

1. Submission to DOLE of a joint statement ( by the employer and union president) attesting to the voluntary
recognition
2. The joint- statement198 must be published for 15 consecutive days in 2 conspicuous places in the
establishment or CBU where the union seeks to operate

192
San Miguel Corporation Employees Union-PTGWO vs. Confesor, G. R. No. 111262, Sept. 19, 1996, 262 SCRA 81, 98
193
will of the employees
194
See also Mechanical Department Labor Union sa Philippine National Railways vs. CIR, G. R. No. L-28223, Aug. 30, 1968.
195
San Miguel Corporation vs. Laguesma, G. R. No. 100485, Sept. 21, 1994; National Association of Free Trade Unions vs. Mainit
Lumber Development Company Workers Union, G. R. No. 79526, Dec. 21, 1990)
196
Rothenberg on Labor Relations, pp. 482-510.
197
Effect of voluntary recognition:
From the time of recording, the union shall enjoy the rights, privileges and obligations of an exclusive bargaining representative
Voluntary acknowledgement can ONLY take place when there is no dispute as to what union counts in its members a majority of
the employees.
Voluntary recognition is possible only in an unorganized establishment. In an organized setting, the employer cannot voluntarily
recognize any new union because Art. 256, LCP requires the employer to continue recognizing and dealing with the incumbent union
if it has not been properly replaced by another union.
48
 (3) Certification election

It refers to the process of determining through secret ballot the sole and exclusive bargaining representative
of the employees in an appropriate bargaining unit, for purposes of collective bargaining

(a) In an unorganized establishment

In unorganized establishments, certification election shall be "automatically" conducted upon the filing of a
petition for certification election by a legitimate labor organization. However, it must be emphasized that the
petitioner-union should have a valid certificate of registration; otherwise, it has no legal personality to file the
petition for certification election.

(b) In an organized establishment

The following are the requisites for certification election in organized establishments.

1. that a petition questioning the majority status of the incumbent bargaining agent is filed before the
DOLE within the 60-day freedom period;

2. that such petition is verified; and

3. that the petition is supported by the written consent of at least twenty-five percent (25%) of all
employees in the bargaining unit

(c) Rules prohibiting the filing of petition for certification election

1. Certification year-bar rule;

A certification election petition may not be filed within one (1) year:

(i) from the date of a valid certification, consent or run-off election; or

(ii) from the date of voluntary recognition.

2. Bargaining deadlock-bar rule;

Neither may a representation question be entertained if:

i. before the filing of a petition for certification election, the duly recognized or certified union has
commenced negotiations with the employer within the one-year period from the date of a valid certification,
consent or run-off election or from the date of voluntary recognition; or
198
The joint-statement should state the approximate number of employees in the CBU, accompanied by the names and signatures of at
least a majority of the members of the CBU supporting the voluntary recognition;
The joint-statement should state that there are no other LLOs operating within the CBU
The joint-statement must be submitted to the Regional Office within 30 days from date of recognition

49
 ii. a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted
to conciliation or arbitration or had become the subject of valid notice of strike or lockout.

3. Contract-bar rule199

The Bureau of Labor Relations 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.

(d) Requirements for validity of certification election

For a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor
union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the
workers in the unit.200

(e) Protests and other questions arising from conduct of certification election

(4) Run-off election

It refers to an election between the labor unions receiving the two (2) highest number of votes when a
certification election which provides for three (3) or more choices results in no choice receiving a majority of the
valid votes cast; provided, that the total number of votes for all contending unions is at least fifty percent (50%) of
the number of votes cast.

(a) Requirements

1. A valid election took place because majority of the CBU members voted
2. The election presented at least three choices

199
The exceptions to the contract-bar rule are as follows:
1. during the 60-day freedom period;
2. when the CBA is not registered with the BLR or DOLE Regional Offices;
3. when the CBA, although registered, contains provisions lower than the standards fixed by law;
4. when the documents supporting its registration are falsified, fraudulent or tainted with misrepresentation;
5.when the collective bargaining agreement is not complete as it does not contain any of the requisite provisions which the law
requires;
6. when the collective bargaining agreement was entered into prior to the 60-day freedom period;
7. when there is a schism in the union resulting in an industrial dispute wherein the collective bargaining agreement can no longer
foster industrial peace.
200
R. Manalac, Phil. Labor Laws and Jurisprudence, 2007 Ed., p. 248
50
 3. Not one of the choices obtained the majority of the valid votes
4. The total votes of the unions is at least 50% of the votes cast
5. There is no unresolved challenge of voter or election protest

(5) Re-run election

It means that the condition precedent to what happened in the year of the election continues, that is why no
new candidates are admitted to run in a re-run.

(6) Consent election201

It refers to the election voluntarily agreed upon by the parties, with or without the intervention of the
Department of Labor and Employment, to determine the issue of majority representation of all the workers in the
appropriate collective bargaining unit.

In hearing a petition for a CE, the Med-Arbiter may persuade the contending unions to agree to a consent
election. If the unions do agree, the Med-Arbiter shall enter in the minutes of the hearing the fact of the agreement
and then cause the immediate scheduling of the pre-election conference

(7) Affiliation and disaffiliation of the local union from the mother union

(a) Substitutionary doctrine202

This principle, formulated by the NLRB as its initial compromise solution to the problem facing it when
there occurs a shift in employees' union allegiance after the execution of a bargaining contract with their employer,
merely states that even during the effectivity of a collective bargaining agreement executed between employer and
employees thru their agent, the employees can change said agent but the contract continues to bind then up to its
expiration date. They may bargain however for the shortening of said expiration date.

In formulating the "substitutionary" doctrine, the only consideration involved is the employees' interest in
the existing bargaining agreement. The agent's interest never entered the picture. In fact, the justification for said
doctrine was:

... that the majority of the employees, as an entity under the statute, is the true party in interest to the
contract, holding rights through the agency of the union representative. Thus, any exclusive interest claimed
by the agent is defeasible at the will of the principal.203
(8) Union dues and special assessments

201
The holding of a valid consent election, upon the intercession of the med-arbiter, bars the holding of a CE for one year.
Where no petition for a CE had been filed but the parties themselves have agreed to hold consent election, the results of the
election will NOT bar another CE, UNLESS the winning union had been extended voluntary recognition by the employer
Consent election is a separate and distinct process and has nothing to do with the import and effect of a certification election.
Neither does it shorten the terms of an existing CBA nor entitle the participants thereof to immediately renegotiate an existing CBA
although it does not preclude the workers from exercising their right to choose their sole and exclusive bargaining representative after
the expiration of the 60-day freedom period.
202
Substitutionary Doctrine
- employees cannot revoke the validity of a validly executed CBA with their employer by the simple expedient of changing their
collective bargaining agent
- the new agent must respect the subsisting CBA
- employer cannot renege on the CBA, except to negotiate with the management for the shortening thereof
- Inapplicable to personal undertaking of deposed union; e.g. : no strike stipulation
203
Benguet Consolidated Inc. vs. BCI Employees & W Union-PAFLU, 23 SCRA, 465, 471
51
 (a) Requirements for validity

No special assessment or other extraordinary fees may be levied upon the members of a labor organization
unless authorized by a written resolution of a majority of all the members at a general membership meeting duly
called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of
all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such
assessment or fees. The record shall be attested to by the president.204

Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees
or any other extraordinary fees may be checked off from any amount due to an employee without an individual
written authorization duly signed by the employee. The authorization should specifically state the amount, purpose
and beneficiary of the deduction.205

(9) Agency fees

(a) Requisites for assessment

The collection of agency fees in an amount equivalent to union dues and fees, from employees who are not
union members, is recognized by Article 248 (e) of the Labor Code. No requirement of written authorization from
the non-union employee is imposed. The employee's acceptance of benefits resulting from a collective bargaining
agreement justifies the deduction of agency fees from his pay and the union's entitlement thereto. In this aspect, the
legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving
from the established principle that non-union employees may not unjustly enrich themselves by benefiting from
employment conditions negotiated by the bargaining union.206

The collection of agency fees in an amount equivalent to union dues and fees, from employees who are not
union members, is recognized by Article 248(e) of the Labor Code, thus:

Employees of an appropriate collective bargaining unit who are not members of the recognized collective
bargaining agent may be assessed reasonable fees equivalent to the dues and other fees paid by the recognized
collective bargaining agent, if such non-union members accept the benefits under the collective bargaining
agreement. Provided, That the individual authorization required under Article 241, paragraph (o) of this Code shall
not apply to the non-members of recognized collective bargaining agent.207

2. Right to Collective Bargaining208

204
Art. 241, as amended
205
Art. 241(o), ibid
206
Alcantara, Reviewer in Labor and Social Legislation, p. 211, 1988 ed.
207
Del Pilar Academy, et al., vs. Del Pilar Academy Employees Union, G.R. No. 170112, April 30, 2008
208
Legal principles applicable to Collective Bargaining Agreement
A proposal not embodied in CBA is not part thereof.
Minutes of CBA negotiation - no effect if its contents are not incorporated in the CBA.
Making a promise during the CBA negotiation is not considered bad faith.
Adamant stance resulting in impasse, not bad faith.
The DOLE Secretary cannot order inclusion of terms and conditions in CBA which the law and the parties did not intend to reflect
therein.
Signing bonus, not demandable under the law.
Allegations of bad faith, wiped out with signing of CBA.
Term (lifetime) of a CBA
Representation aspect (sole and exclusive status of certified union): - The term is 5 years which means that no petition questioning
the majority status of the incumbent bargaining agent shall be entertained by DOLE and no certification election shall be conducted
outside of the 60-day freedom period.
52
 Collective Bargaining Agreement (CBA) refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and conditions of employment
in a bargaining unit. The CBA is deemed the law between the parties during its lifetime. Its provisions are
construed liberally.

a. Duty to bargain collectively

The performance of the mutual obligation of the employer and the sole bargaining representative to meet
promptly, expeditiously, & in good faith & agree on Wages, Hours of Work & Other terms & conditions of
employment (WHO).

(1) Kiok Loy ruling

In the case of Kiok Loy vs. NLRC209, the Supreme Court found that petitioner therein, Sweden Ice Cream
Plant, refused to submit any counter proposal to the CBA proposed by its employees certified bargaining agent. It
ruled that the former had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the High
Court did not hesitate to impose on the erring company the CBA proposed by its employees union - lock, stock
and barrel.

b. Mandatory provisions of CBA

1. Wages & Hours of Work

2. Other terms & conditions
3. Other modes of compensation
4. Work shifts
5. Vacation & holidays
6. Bonuses
7. Pensions & retirement plans
8. Seniority
9. Transfers
10. Lay-offs
11. Workload
12. Work rules & regulations
13. Rent of company houses
14. Union security agreements

An employer does not commit ULP by insisting to the point of a bargaining impasse, on the inclusion in a
contract of a management prerogative clause, or a union discipline clause, or a no strike clause

(1) Grievance Procedure

Refers to the internal rules of procedure established by the parties in their CBA with voluntary arbitration as
the terminal step, which are intended to resolve all issues arising from the implementation and interpretation of
their CBA. It refers to the system of grievance settlement at the plant level as provided in the collective bargaining
agreement. It usually consists of successive steps starting at the level of the complainant and his immediate
supervisor and ending, when necessary, at the level of the top union and company officials

All other provisions (which refer to both economic and non-economic provisions except representation): Shall be renegotiated not
later than three (3) years after its execution.
209
No. L-54334, January 22, 1986, 141 SCRA 179, 188
53
 All grievances submitted to the grievance machinery210 which are not settled within seven (7) calendar days
from the date of their submission shall automatically be referred to voluntary arbitration prescribed in the CBA.

For this purpose, parties to a CBA 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
NCMB. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the NCMB shall
designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection
procedure agreed upon in the CBA, 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.

(2) Voluntary Arbitration

Refers to the mode of settling labor-management disputes by which the parties select a competent, trained
and impartial third person who shall decide on the merits of the case and whose decision is final and executory211

(3) No Strike-No Lockout Clause212

The right to strike is not absolute. It has heretofore been held that a no-strike, no lockout provision in
the CBA is a valid stipulation although the clause may be invoked by an employer only when the strike is economic
in nature or one which is conducted to force wage or other concessions from the employer that are not mandated
to be granted by the law itself213.

Such no-strike provision in the CBA only bars strikes which are economic in nature, but not strikes
grounded on unfair labor practices214.

210
refers to the mechanism for the adjustment and resolution of grievances arising from the interpretation or implementation of a CBA
and those arising from the interpretation or enforcement of company personnel policies. It is part of the continuing process of
collective bargaining.
211
Section 1 [d], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004].
212
Summary of principles governing strikes:
1. A strike or lockout is illegal if any of the legal requisites (enumerated above) is not complied with. Procedural requirements are
mandatory.
2. A strike or lockout is illegal if it is based on non-strikeable issues (e.g., inter-union or intra-union disputes or wage distortion).
3. A strike or lockout is illegal if the issues involved are already subject of compulsory or voluntary arbitration or conciliation or the
steps in grievance machinery are not exhausted.
4. A strike or lockout is illegal if unlawful means were employed or prohibited acts or practices were committed (e.g., Use of force,
violence, threats, coercion, etc.; Barricades, blockades and obstructions of ingress to [entrance] or egress from [exit] the company
premises).
5. A strike or lockout is illegal if the notice of strike or notice of lockout is already converted into a preventive mediation case. (See
further discussion below).
6. A strike or lockout is illegal if staged in violation of the No-Strike, No-Lockout clause in the collective bargaining agreement.
7. A strike or lockout is illegal if staged in violation of a temporary restraining order or an injunction or assumption or certification
order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for unlawful purpose/s (e.g.: Strike to compel dismissal of employee or to compel the
employer to recognize the union or the so-called Union-Recognition Strike)
10. The local union and not the federation is liable to pay damages in case of illegal strike.
213
Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) vs. Ramos, G. R. No. 113907, Feb. 28, 2000
214
MSMG-UWP vs. Ramos, 326 SCRA 428 (2000), citing Master Iron Labor Union vs. NLRC 219 SCRA 47 [1993]).
54
 In a situation where ULP is alleged, it is not essential that the unfair labor practice act has, in fact, been
committed; it suffices that the striking workers are shown to have acted honestly on an impression that the
company has committed such unfair labor practice and the surrounding circumstances could warrant such a belief
in good faith215.

The Supreme Court consistently ruled in a long line of cases that a strike is illegal if staged in violation of the
No Strike/No Lockout Clause in the CBA stating that a strike, which is in violation of the terms of the CBA, is
illegal, especially when such terms provide for conclusive arbitration clause216.

(4) Labor Management Council

May be formed voluntarily by workers and employers for the purpose of promoting industrial peace in
establishments where no legitimate labor organization exists217.

c. ULP in Collective Bargaining

(1) Bargaining in bad faith

Instances:

i. Delay of negotiations
ii. Imposing time limit on negotiations

(2) Refusal to bargain

It shall be unfair labor practice for an employer to refuse to bargain collectively with the representatives of
his employees. To be representative of the employees, the labor union should be certified as the exclusive
bargaining representative of the employees in the bargaining unit and only then that a labor union has a basis in
having a desire to negotiate an agreement of its proposals.

(3) Individual bargaining

It is an unfair labor practice for an employer operating under a collective bargaining agreement to negotiate
or to attempt to negotiate with his employees individually in connection with changes in the agreement.

And the basis of the prohibition regarding individual bargaining with the strikers is that although the union
is on strike, the employer is still under obligation to bargain with the union as the employees' bargaining
representative.218

(4) Blue sky bargaining

215
Panay Electric Company, Inc. vs. NLRC, G. R. No. 102672, Oct. 4, 1995; Peoples Industrial and Commercial Employees and
Workers Organization [FFW] vs. Peoples Industrial and Commercial Corporation, 112 SCRA 430.
216
Filcon Manufacturing Corporation vs. Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center [LMF-LMLC], G. R. No.
150166, July 26, 2004.
Thus, in Interphil Laboratories Employees Union-FFW vs. Interphil Laboratories, Inc. , the Supreme Court considered the conduct
of overtime boycott and work slowdown by the employees as constitutive of illegal strike and a violation of the CBA which
prohibits the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of work.
217
Sec. 33-h, R.A. 6715.
218
Melo Photo Supply Corporation vs. National Labor Relations Board, 321 U.S. 332
55
 It means making exaggerated or unreasonable proposals219.

(5) Surface bargaining

It means going through the motions of negotiating without any legal intent to reach an agreement.220

d. Unfair Labor Practice

(1) ULP of Employers221

a. To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

b. To require as a condition of employment that a person or an employee shall not join a labor organization
or shall withdraw from one to which he belongs;222

c. To contract out services or functions being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization;223.

d. To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;224

e. To discriminate in regard to wages, hours of work and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law
shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of another union at the time of the signing of the
collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid
by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the
collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph
(o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;

f. To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or
being about to give testimony under this Code;

g. To violate the duty to bargain collectively as prescribed by this Code;

h. To pay negotiation or attorneys fees to the union or its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute; or

i. To violate a collective bargaining agreement (but only if gross in character).

219
Arthur A. Sloane and Fred Witney, Labor Relations, 7th Edition 1991, p. 195).
220
Standard Chartered Bank Employees Union [NUBE] vs. Confesor, G. R. No. 114974, June 16, 2004).
221
Only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified
unfair labor practices shall be held criminally liable.
222
a.k.a. yellow dog contract;
223
The act of an employer in having work or certain services or functions being performed by union members contracted out is not
generally an unfair labor practice act. It is only when the contracting out of a job, work or service being performed by union members
will interfere with, restrain or coerce employees in the exercise of their right to self-organization that it shall be unlawful and shall
constitute unfair labor practice (Article 248 [c], Labor Code; Section 6 [f], Department Order No. 18-02, Series of 2002, [Feb. 21,
2002).
224
a.k.a. company union
56
 (2) ULP of Labor Organizations

a. To restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention of
membership;

b. To cause or attempt to cause an employer to discriminate against an employee, including discrimination

against an employee with respect to whom membership in such organization has been denied or to terminate an
employee on any ground other than the usual terms and conditions under which membership or continuation of
membership is made available to other members;

c. To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of
the employees;

d. To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services which are not performed or not to be performed, including
the demand for fee for union negotiations;225

e. To ask for or accept negotiation or attorneys fees from employers as part of the settlement of any issue in
collective bargaining or any other dispute; or

f. To violate a collective bargaining agreement.

3. Right to Peaceful Concerted Activities

a. Forms of Concerted Activities

Strike226

Any temporary stoppage of work by the concerted action of the employees as a result of an industrial or
labor dispute. It consists not only of concerted work stoppages but also slowdowns, mass leaves, sitdowns,
attempts to damage, destroy or sabotage plant equipment and facilities and similar activities.

225
a.k.a. feather-bedding
226
Summary of principles governing strikes:
1. A strike or lockout is illegal if any of the legal requisites (enumerated above) is not complied with. Procedural requirements are
mandatory.
2. A strike or lockout is illegal if it is based on non-strikeable issues (e.g., inter-union or intra-union disputes or wage distortion).
3. A strike or lockout is illegal if the issues involved are already subject of compulsory or voluntary arbitration or conciliation or
the steps in grievance machinery are not exhausted.
4. A strike or lockout is illegal if unlawful means were employed or prohibited acts or practices were committed (e.g., Use of
force, violence, threats, coercion, etc.; Barricades, blockades and obstructions of ingress to [entrance] or egress from [exit] the
company premises).
5. A strike or lockout is illegal if the notice of strike or notice of lockout is already converted into a preventive mediation case. (See
further discussion below).
6. A strike or lockout is illegal if staged in violation of the No-Strike, No-Lockout clause in the collective bargaining agreement.
7. A strike or lockout is illegal if staged in violation of a temporary restraining order or an injunction or assumption or certification
order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for unlawful purpose/s (e.g.: Strike to compel dismissal of employee or to compel the
employer to recognize the union or the so-called Union-Recognition Strike)
10. The local union and not the federation is liable to pay damages in case of illegal strike.
57
 Lockout227

Any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

Picketing228

The right of workers to peacefully march to and fro before an establishment involved in a labor dispute
generally accompanied by the carrying and display of signs, placards and banners intended to inform the public
about the dispute.

b. Who may declare a strike or lockout?229

c. Requisites for a valid strike

First requisite: Valid and factual grounds

i. There are only two (2), namely:

1. CBA Deadlock; and

2. Unfair labor practice (ULP).

ii. No other grounds are allowed except the two mentioned above.

Second requisite: Notice of strike or notice of lockout

i. When to file notice:

1. In case of ULP: 15 days from intended date of strike/lockout

2. In case of CBA Deadlock: 30 days from intended date thereof

ii. Parties who may file notice:

1. Certified union, in case of strike; and

2. Employer in case of lockout.

iii. Where to file notice: - NCMB

Third requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the
taking of the strike/ lockout vote by secret balloting, informing said office of the decision to conduct a
strike vote/lockout vote, and the date, place, and time thereof.

Fourth requisite: Strike vote or lockout vote

i. Majority approval of strike or lockout is required

ii. Strike vote still necessary even in case of union-busting.

227
Grounds for Lockout
1. Collective bargaining deadlock
2. ULP act of a union
228
or peaceful picketing
229
see b. Parties who may file notice under Requisites for a valid strike or lockout, infra.
58
 Fifth requisite: Strike vote report or lockout vote report

i. When to submit strike or lockout vote report - at least 7 days prior to strike or lockout, as the case
may be.

ii. Effect of non-submission of strike vote to NCMB, DOLE - strike or lockout is illegal

iii. Effect on 7-day waiting period if filed within cooling-off period: the 7-day waiting period shall be
counted from the day following the expiration of the cooling-off period.

iv. Strike vote report in case of union-busting - still necessary, it being mandatory unlike the cooling-
off period which may be dispensed with.

Sixth requisite: Cooling-off period230

General rule:

1. In case of CBA Deadlock - 30 days

2. In case of ULP - 15 days

Exception: In the case of union-busting where the cooling-off period need not be complied with.

Seventh requisite: 7-day waiting period or strike ban231

d. Requisites for a valid lockout232

1. Notice of intention to declare a lockout has been filed with the DOLE
2. At least 30 days has elapsed since the filing of notice before lockout is declared
3. An impasse had resulted in the negotiations; and
4. Lockout is not discriminatory

e. Requisites for lawful picketing

No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the
free ingress to or egress from the employers premises for lawful purposes, or obstruct public thoroughfares.233

f. Assumption of jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the
NLRC for compulsory arbitration

i. On intended or impending strike or lockout - automatically enjoined even if a Motion for Reconsideration
is filed.

230
When cooling-off period starts: from the time the notice of strike/lockout is filed with NCMB, DOLE.
Purpose of the cooling-off period: for the parties to settle the dispute.
231
Purpose of the 7-day waiting period: To ensure that the strike vote was indeed taken and that the majority of the members
approved of it.
Cooling-off period and waiting period, distinguished:
Waiting period is counted from the time of submission of strike vote report to NCMB; Cooling-off period is counted from the filing
of the Notice of Strike/Lockout with NCMB.
Deficiency of even one day of the 7-day strike ban (or cooling off period) is fatal. Hence, the strike is illegal.
232
Lockout is valid where, in the course of a labor dispute, it is undertaken as a defensive weapon, or in pursuance of the employers
interest.
233
Article 264 (e), as amended
59
 ii. On actual strike or lockout - strikers or locked out employees should immediately return to work and
employer should readmit them back.

iii. On cases filed or may be filed - All shall be subsumed/absorbed by the assumed or certified case except
when the order specified otherwise. The parties to the case should inform the DOLE Secretary of pendency
thereof.

g. Nature of Assumption Order or Certification Order

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.234

h. Effect of defiance of Assumption or Certification Orders

A strike that is undertaken after the issuance by the Secretary of Labor and Employment of an assumption
or certification order becomes a prohibited activity and thus illegal, pursuant to the second paragraph of Article
264235 of the Labor Code. The union officers and members, as a result, are deemed to have lost their employment
status for having knowingly participated in an illegal strike. Stated differently, from the moment a worker defies a
return-to-work order, he is deemed to have abandoned his job. The loss of employment results from the striking
employees own act - an act which is illegal, an act in violation of the law and in defiance of authority.236

i. Illegal Strike

(1) Liability of officers of the unions

Only the union officers during the strike are liable.

The penalty of dismissal could be imposed only on union officers serving and acting as such during the
period of illegal strike237.

As a necessary implication, if employees acted as union officers after said strike, they may not be held liable
and, therefore, could not be terminated238.

(2) Liability of ordinary workers

The mere declaration of the illegality of strike would result in the termination of employment of union
officers. They are deemed to have lost their employment status. This adverse consequence does not apply to
ordinary union members except when they participated in the commission of illegal acts in the course of the strike,
in which case, they shall be deemed to have also lost their employment status.

(3) Waiver of illegality of strike

A waiver to be valid and effective must be couched in clear and unequivocal terms which leave no doubt as
to the intention of a party to give up a right or benefit which legally pertains to him.
234
The President may also exercise the power to assume jurisdiction over a labor dispute
235
See Reference
236
Philippine Airlines, Inc. vs. Brillantes, G. R. No. 119360, Oct. 10, 1997
237
Lapanday Workers Union vs. NLRC, 248 SCRA 95, 106.
238
(CCBPI Postmix Workers Union vs. NLRC, G. R. No. 114521, Nov. 27, 1998.
60
 j. Injunctions

(1) Requisites for Labor Injunctions

No temporary or permanent injunction or restraining order in any case involving or growing out of labor
disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 239 of the
Labor Code.

(2) "Innocent Bystander Rule"

The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of
speech guaranteed by the constitution. If peacefully carried out, it cannot be curtailed even in the absence of
employer-employee relationship.

The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise
of free speech, we believe the courts are not without power to confine or localize the sphere of communication or
the demonstration to the parties to the labor dispute, including those with related interest, and to insulate
establishments or persons with no industrial connection or having interest totally foreign to the context of the
dispute. Thus, the right may be regulated at the instance of third parties or "innocent bystanders" if it appears that
the inevitable result of it is to create an impression that a labor dispute with which they have no connection or
interest exists between them and the picketing union or constitute an invasion of their rights. In one case decided by
this Court, we upheld a trial court's injunction prohibiting the union from blocking the entrance to a feed mill
located within the compound of a flour mill with which the union had a dispute. Although sustained on a different
ground, no connection was found between the two mills owned by two different corporations other than their
being situated in the same premises. It is to be noted that in the instances cited, peaceful picketing has not been
totally banned but merely regulated. And in one American case, a picket by a labor union in front of a motion
picture theater with which the union had a labor dispute was enjoined by the court from being extended in front of
the main entrance of the building housing the theater wherein other stores operated by third persons were
located.240

H. PROCEDURE AND JURISDICTION

1. Labor Arbiter

a. Jurisdiction241

Labor Arbiters have jurisdiction over the following cases242:

239
See Reference
240
Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, 27 SCRA 465 (1969)
241
The jurisdiction is original and exclusive in nature. Labor Arbiters have no appellate jurisdiction.
242
Including the following cases:
i. Wage distortion cases only in unorganized establishments. In organized establishments, jurisdiction is vested with Voluntary
Arbitrators.
ii. All monetary claims of Overseas Filipino Workers arising from employer- employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of
damages.
61
i. Unfair labor practice (ULP) cases;

ii.Termination/disputes243

iii. Cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of
employment,244 if accompanied with claim for reinstatement;

iv. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee/relations;

v. Cases arising from any violation of Article 264245 of this Code, including questions involving the legality of strikes
and lockouts; and

vi. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including those of persons in domestic or household service, involving
an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.

b. Effect of self-executing order of reinstatement on backwages

The decision of the LA reinstating a dismissed OR separated employee, shall be executory, even pending
appeal:

The employee shall either be:

i. Admitted back to work under the same terms and conditions prevailing prior to the dismissal or
separation; or

ii. At the option of the employer, merely reinstated into payroll

The posting of a bond by the employer shall not stay the execution of reinstatement

c. Requirements to perfect appeal to NLRC246

a. the appeal should be filed within the reglementary period;247

b. the Memorandum of Appeal should be under oath;

iii. Illegal dismissal cases of employees of cooperatives, but not members of cooperatives because they are not employees.
iv. Cases involving employees of government-owned or controlled corporations without original charters (organized under the
Corporation Code). They have no jurisdiction if entity has original charter.
Labor Arbiters have no jurisdiction over termination ofcorporate officers and stockholders which, under the law, is considered
intra-corporate dispute.
Labor Arbiters have no jurisdiction over labor cases involving entities immuned from suit. Exception: when said entities perform
proprietary activities (as distinguished from governmental functions).
243
or illegal dismissal cases
244
Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be classified as follows:
1. any money claim, regardless of amount, accompanied with a claim for reinstatement (which involves a termination case); or
2. any money claim, regardless of whether accompanied with a claim for reinstatement, exceeding the amount of P5,000.00 per
claimant (which does not necessarily involve termination of employment)
245
supra
246
Appeal from the decision of the Labor Arbiter is brought by ordinary appeal to the NLRC within ten (10) calendar days from
receipt by the party of the decision.
247
within 10 calendar days from receipt of such decisions, awards or orders of the Labor Arbiter
62
 c. payment of appeal fee;
d. posting of cash or surety bond, if judgment involves monetary award; and
e. proof of service to the adverse party.

2. National Labor Relations Commission (NLRC)

a. Jurisdictions248

Original jurisdiction.

i. 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.

ii. Injunction in strikes or lockouts under Article 264 of the Labor Code.

iii. Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, certified to it by the Secretary of Labor and Employment for compulsory arbitration.

Exclusive appellate jurisdiction.

i. All cases decided by the Labor Arbiters including contempt cases.

ii. Cases decided by the DOLE Regional Directors or his duly authorized Hearing Officers (under
Article 129) involving recovery of wages, simple money claims and other benefits not exceeding P5,000 and not
accompanied by claim for reinstatement.

b. Effect of NLRC reversal of Labor Arbiters order of reinstatement

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by
the higher court.

On the other hand, if the employee has been reinstated during the appeal period and such reinstatement
order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is
entitled to such, more so if he actually rendered services during the period.

In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining
order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith.

c. Requirements to perfect appeal to Court of Appeals

248
Distinction between the jurisdiction of the Labor Arbiters and the NLRC.
The NLRC has exclusive appellate jurisdiction on all cases decided by the Labor Arbiters. The NLRC does not have original
jurisdiction on the cases over which Labor Arbiters have original and exclusive jurisdiction (see above enumeration). If a claim does
not fall within the exclusive original jurisdiction of the Labor Arbiter, the NLRC cannot have appellate jurisdiction thereover.

63
 Generally, certiorari as a special civil action will not lie unless a motion for reconsideration is filed before the
NLRC to allow it an opportunity to correct its imputed error.

3. Bureau of Labor Relations (BLR) Med Arbiters

a. Jurisdiction249

The BLR has original and exclusive jurisdiction over the following:

i. Inter-union disputes or representation disputes which refer to cases involving petition for
certification election filed by a duly registered labor organization which is seeking to be recognized as the sole and
exclusive bargaining agent of the rank-and-file employees in the appropriate bargaining unit of a company, firm or
establishment.

ii. Intra-union disputes or internal union disputes which refer to disputes or grievances arising from
any violation of or disagreement over any provision of the constitution and by-laws of the union, including any
violation of the rights and conditions of union membership provided for in the Labor Code.

iii. All disputes, grievances or problems arising from or affecting labor-management relations in all
workplaces, except those arising from the interpretation or implementation of the CBA which are subject of
grievance procedure and/or voluntary arbitration.

4. National Conciliation and Mediation Board (NCMB)

a. Conciliation vs. Mediation

b. Preventive Mediation

Executive Order No. 251 which created the National Conciliation and Mediation Board (NCMB) ordains
that the conciliation, mediation and voluntary arbitration functions of the Bureau of Labor Relations (BLR) shall be
absorbed by NCMB. It is an attached agency under the administrative supervision of the Secretary of Labor and
Employment.

The NCMB has jurisdiction over conciliation, mediation and voluntary arbitration cases. It performs
preventive mediation and conciliation functions. It administers the voluntary arbitration program;
maintains/updates a list of voluntary arbitrators; compiles arbitration awards and decisions; and provides counseling
and preventive mediation assistance particularly in the administration of collective agreements.

It is with the NCMB that Notices of Strike or Lockout are filed.

5. DOLE Regional Directors

a. Small money claims

The Regional Director or any of the duly authorized hearing officers of DOLE have jurisdiction over claims
for recovery of wages, simple money claims and other benefits, provided that:

i. the claim must arise from employer-employee relationship;

249
Original and Appellate

64
 ii. the claimant does not seek reinstatement; and
iii. the aggregate money claim of each employee does not exceed P5,000.00250

6. DOLE Secretary

a. Visitorial and Enforcement Powers251

Visitorial Powers

The Secretary of Labor and Employment or his duly authorized representatives may at any time inspect the
premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports
regularly on prescribed forms, and act on violations of any provision of this Title.252

The Secretary of Labor and Employment or his duly authorized representatives, including labor regulations
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 to 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.253

The Department of Labor and Employment shall be solely responsible for the administration and
enforcement of occupational safety and health laws, regulations and standards in all establishments and workplaces
wherever they may be located; however, chartered cities may be allowed to conduct industrial safety inspections of
establishments within their respective jurisdiction where they have adequate facilities and competent personnel for
the purpose as determined by the Department of Labor and Employment and subject to national standards
established by the latter.254

The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to
inquire into the financial activities of legitimate labor organizations upon the filing of a complainant under oath and
duly supported by the written consent of at least twenty percent (20%) of the total membership of the labor
organization concerned and to examine their books of accounts and other records to determine compliance or non-
compliance with the law and to prosecute any violations of the law and the union constitution and by-laws:
Provided, That such inquiry or examination shall not be conducted during the sixty (60) day freedom period nor
within thirty (30) days immediately preceding the date of election of union officials.255

250
Article 129
251
Visitorial and enforcement power by Secretary of Labor or duly authorized representative
1. Access to employer's records and premises
2. Right to copy records
3. Right to question any employee
4. Investigate any fact, condition or matter which may be necessary to
5. Order and administer, after due notice and hearing, compliance with the Labor Standards provisions
6. Issue writs of execution to the appropriate authority for enforcement of their orders
7. Order stoppage of work or suspension of operations when non-compliance with law and implementing regulations poses grave
and imminent danger to the health and safety of workers in the workplace (only Secretary of Labor has this power)
- Hearing within 24 hours
- Employer liable for salaries during suspension of operations if found to have caused the violation
- No TRO or Temporary/Permanent injunction may be issued by an inferior court over any case involving the enforcement orders
issued
252
Art. 37
253
Art. 128 (a)
254
Art. 165
255
Art. 274
65
 Enforcement Powers

The provisions of Article 217 of this Code to the contrary notwithstanding 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 order and administer, after due notice and hearing, compliance with the
labor standards provisions of this Code and other labor legislation based on the findings of labor regulation officers
or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate
authority for the enforcement of their order, except in cases where the employer contests the findings of the labor
regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection.256

b. Power to suspend effects of termination

The Secretary of the Department of Labor 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.257

7. Voluntary Arbitrators

The Voluntary Arbitrator258 has original and exclusive jurisdiction over the following:

i. all unresolved grievances arising from the interpretation or implementation of the collective bargaining
agreement after exhaustion of the grievance procedure; and

ii. all unresolved grievances arising from the implementation or interpretation of company personnel
policies.259

iii. all other labor disputes including unfair labor practices and bargaining deadlocks, upon agreement of the
parties.260

a. Submission Agreement

It is the policy of the state to encourage voluntary arbitration on all other labor-management disputes.
Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to
voluntary arbitration.261

b. Rule 43, Rules of Court

The decision of a Voluntary Arbitrator or panel of Voluntary Arbitrators is appealable by ordinary appeal
under Rule 43 of the Rules of Civil Procedure directly to the Court of Appeals. From the Court of Appeals, the
case may be elevated to the Supreme Court by way of ordinary appeal under the same Rule 45262.

8. Court of Appeals

256
Art. 248 (b)
257
Art. 277, last sentence
258
or panel of Voluntary Arbitrators
259
Art. 261
260
Art. 262
261
Bk. V, Rule II, Sec. 3, OR
262
Luzon Development Bank vs. Association of Luzon Development Bank Employees, et al., G. R. No. 120319, October 6, 1995.
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 a. Rule 65, Rules of Court

A party may avail itself of the civil action for certiorari, where the tribunal, board or office exercising
juridical functions:

Has acted without or in excess of jurisdiction; and, or

With grave abuse of discretion and praying that judgments be rendered annulling or modifying the
proceedings, as the law requires, of such tribunal, board or officer

It may be filed not later than 60 days from notice of the judgment, order or resolution. Both SC and CA has
jurisdiction over the action; however in line with the doctrine of minatory of warts, the petition should initially be
presented to the lower of the two courts, that is, the CA.

9. Supreme Court

a. Rule 45, Rules of Court

A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals,
the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme
Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be
distinctly set forth.263

10. Prescription of Actions

a. Money claims - three (3) years from accrual of cause of action.

b. Illegal dismissal four (4) years from accrual of cause of action.
c. Unfair labor practice - 1 year from accrual of the cause of action.
d. Offenses penalized by the Labor Code and IRR issued pursuant thereto three (3) years

263
Sec. 1
67
 Reference
ARTICLE 110. Worker preference in case of bankruptcy. - In the event of bankruptcy or liquidation of an
employers business, his workers shall enjoy first preference as regards their wages and other monetary claims, any
provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full
before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No.
6715, March 21, 1989).

ARTICLE 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested
party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing
officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide
any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing
to an employee or person employed in domestic or household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint does not include a claim for reinstatement:
Provided further, That the aggregate money claims of each employee or househelper does not exceed Five
thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within
thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid
on order of, the Secretary of Labor and Employment or the Regional Director directly to the employee or
househelper concerned. Any such sum not paid to the employee or househelper because he cannot be located
after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund
of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed
on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a
copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the
appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.
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).

ARTICLE 217. Jurisdiction of the Labor Arbiters and the Commission. -

(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non- agricultural:

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;
4. 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
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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.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising
from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter
by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
(As amended by Section 9, Republic Act No. 6715, March 21, 1989).

ARTICLE 279. Security of tenure. - In cases of regular employment, the employer shall not terminate the services
of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of Any union officer who knowingly participates in an
illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during
a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had
been hired by the employer during such lawful strike.

ARTICLE 264. Any union officer who knowingly participates in an illegal strike and any worker or union officer
who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the employer during such
lawful strike. (paragraph 2)

LABOR LAW SYLLABUS

A. FUNDAMENTAL PRINCIPLES AND POLICIES

1. Constitutional Provisions
a. Art II, Secs. 9, 10, 11, 13, 14, 18, 20.
b. Art III, Secs. 1, 4, 8.
c. Art. XIII, Secs. 1, 2, 3, 14.

2. New Civil Code

a. Article 1700

3. Labor Code

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 a. Article 3
b. Article 211
c. Article 212
d. Article 255

B. RECRUITMENT AND PLACEMENT

1. Recruitment of Local and Migrant Workers

a. Recruitment and placement; defined

b. Illegal Recruitment, Art. 38 (Local), Sec. 6, Migrant Workers Act, RA 8042
(a) License vs. Authority
(b) Essential elements of illegal recruitment
(c) Simple illegal recruitment
(d) Illegal recruitment in large scale
(e) Illegal recruitment as economic sabotage
(f) Illegal Recruitment vs. Estafa
(g) Liabilities
(a) local employment agency
(b) foreign employer
i. Theory of imputed knowledge
(h) Pretermination of contract of migrant worker
c. Direct hiring

2. Regulation and Enforcement

a. Remittance of foreign exchange earnings

b. Prohibited activities
c. Regulatory and visitorial powers of the Labor Secretary
d. Penalties for illegal recruitment

C. LABOR STANDARDS

1. Hours of Work
a. Coverage/Exclusions
b. Normal Hours of Work
c. Exceptions
(a) Health Personnel
(b) Compressed Work Week
d. Work interruption due to brownouts
e. Meal Break
f. Idle time, waiting time, commuting time, travel time, whether part of hours of work or not
g. Overtime work
(a) Undertime not offset by overtime
(b) Waiver of overtime pay
h. Night Work
i. CBA provision vis--vis overtime work

2. Wages

a. "No work no pay" principle

b. Coverage/Exclusions
c. Facilities vs supplements
d. Wages vs. salaries

70
 e. Wage distortion
f. CBA vis--vis Wage Orders CBA creditability
g. Non-diminution of benefits
h. Workers preference in case of bankruptcy
i. Labor Code provisions for wage protection
j. Allowable deductions without employees consent
k. Attorneys fees and union service fee in labor cases
l. Criteria/Factors for Wage Setting

3. Rest Day

a. Right to weekly rest day

b. Preference of the employee
c. When work on rest day authorized

4. Holidays

a. Right to holiday pay

(1) In case of absences
(2) In case of temporary cessation of work
(3) Of teachers, piece workers, seafarers, seasonal workers, etc.
b. Exclusions from coverage

5. Leaves

a. Service Incentive Leave Pay

(1) Right to service incentive leave
(2) Exclusions from coverage
(3) Commutable nature of benefit
b. Maternity Leave
(1) Coverage
(2) Conditions to entitlement
(3) Availment
c. Paternity Leave
(1) Coverage
(2) Conditions to entitlement
(3) Availment
d. Parental Leave
(1) Coverage
(2) Conditions to entitlement
(3) Availment
e. Leaves for victims of violence against women
(1) Coverage
(2) Conditions to entitlement
(3) Availment

6. Service Charges

a. Coverage
b. Exclusion
c. Distribution
d. Integration

7. Thirteenth (13th) Month Pay and other bonuses

71
 a) Coverage
b) Exclusion/Exemptions from coverage
c) Nature of 13th month pay
d) Commissions vis--vis 13th month pay
e) CBA vis--vis 13th month pay

8. Women Workers

a. Discrimination (Art. 135, LC)

b. Stipulation against marriage (Art. 136, LC)
c. Prohibited Acts (Art. 137, LC)
d. Classification of certain women workers (Art. 138, LC)
e. Anti-Sexual Harassment Act (RA 7877)

9. Minor Workers (RA 7678, RA 9231)

a. Regulation of working hours of a child

b. Employment of the child in public entertainment
c. Prohibition of employing minors in certain undertakings and in certain advertisements

10. Employment of Househelpers

a. Definition
b. Benefits accorded househelpers
c. Termination
d. Reliefs for unjust termination

11. Employment of Homeworkers

a. Definition
b. Rights and benefits accorded homeworkers
c. Conditions for deduction from homewokers earnings

12. Apprentices and Learners

a. Distinctions between Learnership and Apprenticeship

13. Handicapped Workers (RA 7277)

a. Definition of "handicapped workers"

b. Rights of disabled workers
c. Prohibitions on discrimination against disable persons
d. Incentives for employers

D. TERMINATION OF EMPLOYMENT

1. Employer-Employee Relationship

a. Four-fold Test
b. Probationary Employment
c. Kinds of Employment
(1) Regular employment

72
 (a) Reasonable connection rule
(2) Project employment
(a) Indicators of project employment
(3) Seasonal employment
(4) Casual employment
(5) Fixed term employment
(a) Requisites for validity
d. Job contracting and Labor-only contracting
(1) When is there "job contracting"?
(2) When is there "labor-only contracting"?
(3) Conditions that must concur in legitimate job contracting
(4) Effects of finding that there is labor-only contracting

2. Termination of Employment

a. Substantive Due Process

(a) Just Causes

(a) Serious misconduct or willful disobedience

i. Requisites
(b) Gross and habitual neglect of duties
i. Requisites
(c) Fraud or willful breach of trust (loss of trust and confidence)
i. Requisites
(d) Abandonment of employment; Elements that must concur
(e) Termination of employment pursuant to a Union Security Clause
(f) Totality of infractions doctrine

(b) Authorized Causes

(a) Redundancy, Retrenchment and Closure

i. Procedural steps required

ii. Requirements for valid retrenchment/redundancy
iii. Criteria in selecting employees for dismissal
iv. Standards to be followed

(b) Disease or illness

i. Requisites

b. Procedural Due Process

(1) Procedure to be observed in termination cases

(2) Guiding Principles in connection with the hearing requirements in dismissal cases
(3) Agabondoctrine

c. Reliefs for illegal dismissal

(1) Reinstatement aspect

(a) Immediately executory
i. Actual reinstatement
ii. Payroll reinstatement

73
 (2) Separation pay in lieu of Reinstatement
(a) Strained Relation rule
(3) Backwages
(a) Components of the amount of backwages
(4) Constructive dismissal
(5) Preventive Suspension
(6) Quitclaims
(7) Termination of employment by employee

3. Retirement Pay Law

a. Coverage
b. Exclusions from coverage
c. Components of retirement pay
d. Retirement pay under RA 7641 vis--vis retirement benefits under SSS and GSIS laws

E. MANAGEMENT PREROGATIVE
1. Discipline
2. Transfer of employees
3. Productivity standard
4. Grant of Bonus
5. Change of working hours
6. Marital discrimination
7. Post-employment ban
8. Limitations in its exercise

F. SOCIAL LEGISLATION

1. SSS Law (RA 8282)

a. Coverage
b. Exclusions from coverage
c. Benefits
d. Beneficiaries
2. GSIS (RA 8291)
a. Coverage
b. Exclusions from coverage
c. Benefits
d. Beneficiaries
3. Limited Portability Law (RA 7699)
4. Employees Compensation Coverage and when compensable

G. LABOR RELATIONS LAW

1. Right to Self-organization

a. Who may unionize for purposes of collective bargaining

(1) Who cannot form, join or assist labor organizations
(2) Executive Order No. 180
b. Bargaining unit
(1) Test to determine the constituency of an appropriate bargaining unit
(2) Voluntary Recognition
(a) Requirements
(3) Certification election
(a) In an unorganized establishment

74
 (b) In an organized establishment
(c) Rules prohibiting the filing of petition for certification election
(d) Requirements for validity of certification election
(e) Protests and other questions arising from conduct of certification election
(4) Run-off election
(a) Requirements
(5) Re-run election
(6) Consent election
(7) Affiliation and disaffiliation of the local union from the mother union
(a) Substitutionary doctrine
(8) Union dues and special assessments
(a) Requirements for validity
(9) Agency fees
(a) Requisites for assessment

2. Right to Collective Bargaining

a. Duty to bargain collectively

(1) Kiok Loy ruling
b. Mandatory provisions of CBA
(1) Grievance Procedure
(2) Voluntary Arbitration
(3) No Strike-No Lockout Clause
(4) Labor Management Council
c. ULP in Collective Bargaining
(1) Bargaining in bad faith
(2) Refusal to bargain
(3) Individual bargaining
(4) Blue sky bargaining
(5) Surface bargaining
d. Unfair Labor Practice
(1) ULP of Employers
(2) ULP of Labor Organizations

3. Right to Peaceful Concerted Activities

a. Forms of Concerted Activities
b. Who may declare a strike or lockout?
c. Requisites for a valid strike
d. Requisites for a valid lockout
e. Requisites for lawful picketing
f. Assumption of jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the NLRC
for compulsory arbitration
g. Nature of Assumption Order or Certification Order
h. Effect of defiance of Assumption or Certification Orders
i. Illegal Strike
(1) Liability of officers of the unions
(2) Liability of ordinary workers
(3) Waiver of illegality of strike
j. Injunctions
(1) Requisites for Labor Injunctions
(2) "Innocent Bystander Rule"

H. PROCEDURE AND JURISDICTION

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1. Labor Arbiter

a. Jurisdiction
b. Effect of self-executing order of reinstatement on backwages
c. Requirements to perfect appeal to NLRC

2. National Labor Relations Commission (NLRC)

a. Jurisdictions
b. Effect of NLRC reversal of Labor Arbiters order of reinstatement
c. Requirements to perfect appeal to Court of Appeals

3. Bureau of Labor Relations (BLR) Med Arbiters

a. Jurisdiction (Original and Appellate)

4. National Conciliation and Mediation Board (NCMB)

a. Conciliation vs. Mediation

b. Preventive Mediation

5. DOLE Regional Directors

a. Small money claims

6. DOLE Secretary

a. Visitorial and Enforcement Powers

b. Power to suspend effects of termination

7. Voluntary Arbitrators

a. Submission Agreement
b. Rule 43, Rules of Court

8. Court of Appeals

a. Rule 65, Rules of Court

9. Supreme Court

a. Rule 45, Rules of Court

10. Prescription of Actions

a. Money claims
b. Illegal dismissal
c. Unfair labor practice
d. Offenses penalized by the Labor Code and IRR issued pursuant thereto

76