Labor Law Green Notes 2015

Green Notes 2015
Labor Law
Compiled by: The Barristers Club 2015
Labor Law and Social Legislation

I. Fundamental Principles and Policies
A. Constitutional Provisions
What are the constitutional mandates with
regard labor laws?
Secs. 9, 10, 11, 13, 14, 18, 20, Art. II

1. Sec. 9, Art. II 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.
2. Sec. 10, Art. II The State shall
promote social justice in all phases of national
development.
3. Sec. 11, Art. II The State values the
dignity of every human person and guarantees
full respect for human rights.
4. Sec. 13, Art. II 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.
5. Sec. 14, Art. II The State recognizes
the role of women in nation-building, and
shall ensure the fundamental equality before
the law of women and men.
6. Sec. 18, Art. II The State affirms
labor as a primary social economic force. It
shall protect the rights of workers and
promote their welfare.
7. Sec. 20, Art. II The State
recognizes the indispensable role of the private
sector, encourages private enterprise, and
provides incentives to needed investments.
Secs. 1, 4, 7, 8, 10, 16, 18(2), Art. III

8. Sec. 1, Art. III 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.
An erring seaman is given a written

notice of the charge against him and is
afforded an opportunity to explain or defend
himself. Xxx (Sec. 17, POEA-SEC; Skippers
Pacific, Inc. v. Mira; Maersk-Filipinas Crewing,
Inc. vs. Avestruz, G.R. No. 207010, February
18, 2015).
9. Sec. 4, Art. III 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.
10. Sec. 7, Art III The right of the
people to information on matters of public
concern shall be recognized. Access to official
records, and to documents, and papers
pertaining to official acts, transactions, or
decisions, as well as to government research
data used as basis for policy development shall
be afforded the citizen, subject to such
limitations as may be provided by law.
11. Sec. 8, Art. III 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.
12. Sec 10, Art. III No law impairing
the obligation of contracts shall be passed.
13. Sec. 16, Art. III All persons shall
have the right to a speedy disposition of their
cases before all judicial, quasi-judicial, or
administrative bodies.
14. Sec. 18 (2), Art. III No
involuntary servitude in any form shall exist
except as a punishment for a crime whereof
the party shall have been duly convicted.
Secs. 1, 2, 3, 13, 14, Art. XII

15. Sec. 1, Art. XIII The Congress shall
give highest priority to the enactment of
measures that protect and enhance the right of
all the people to human dignity, reduce social,
economic, and political inequalities, and
remove cultural inequities by equitably
diffusing wealth 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.
Page 1 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

16. Sec. 2, Art. XIII The promotion of
social justice shall include the commitment to
create economic opportunities based on
freedom of initiative and self--reliance.
17. Sec. 3, Art. XIII 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 selforganization, 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 decisionmaking
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.
Consistent with the States avowed

policy to afford full protection to labor as
enshrined in the Constitution, the POEA-SEC
was designed primarily for the protection and
benefit of Filipino seafarers in the pursuit of
their employment on board ocean-going
vessels. As such, it is a standing principle that
its provisions are to be construed and applied
fairly, reasonably, and liberally in their favor
(Racelis vs. United Philippine Lines, Inc., G.R.
No. 198408, November 12, 2014).
18. Sec. 13, Art XIII The State shall
establish a special agency for disabled persons
for their rehabilitation, self-development and
self-reliance, and their integration into the
mainstream of society.
19. Sec. 14, Art. XIII The State shall
protect working women by providing safe and
healthful working conditions, taking into
account their maternal functions, and such
facilities and opportunities that will enhance

their welfare and enable them to realize their
full potential in the service of the nation.
B. What are the Civil Code provisions related

laws to labor?
1. Art. 19 Every person must in the
exercise of his rights and in the performance of
his duties, act with justice, give everyone his
due, and observe honesty and good faith.
2. Art. 1700 The relations between
capital and labor are not merely contractual.
They are so impressed with public interest that
labor contracts must yield to the common
good. Therefore, such contracts are subject to
the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and
similar subjects.
3. Art. 1701 Neither capital nor labor
shall act oppressively against the other, or
impair the interest or convenience of the
public.
The preferential treatment given by

our law to labor, however, is not a license for
abuse. It is not a signal to commit acts of
unfairness that will unreasonably infringe on
the property rights of the company. Both
labor and employer have social utility, and the
law is not so biased that it does not find a
middle ground to give each their due (Milan,
et al. vs. NLRC, G.R. No. 202961, February 4,
2015).
4. Art. 1702 In case of doubt, all
labor legislation and all labor contracts shall be
construed in favor of the safety and decent
living for the laborer.
5. Art. 1703 No contract which
practically amounts to involuntary servitude,
under any guise whatsoever, shall be valid.
C. Labor Code
1. Art. 3. Declaration of Basic
Policy. The State shall afford full 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 selforganization, collective bargaining, security of
Page 2 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

tenure, and just and humane conditions of
work.
2. Art. 4. Construction in Favor of
Labor. All doubts in the implementation and
interpretation of the provisions of this Code,

including
its
implementing
rules
and
regulations, shall be resolved in favor of labor.
It is a document issued by the DOLE

authorizing a person or association to engage
in recruitment and placement activities as a
private recruitment entity.
Who are the persons prohibited from engaging
the business of recruiting migrant workers?
1. Unlawful for any official or
employee of the:
a. DOLE;
b. POEA;
c. Overseas
Workers
Welfare
Administration (OWWA);
d. DFA; and
e. Other
government
agencies
involved in the implementation of
this Act
If doubts exist between the evidence

presented by the employer and that of the
employee, the scales of justice must be tilted in
favor of the latter (Hocheng Philippines
Corporation vs. Farrales, G.R. No. 211497,
March18, 2015)
3. Art.166. Qualifications of Health
Personnel. The physicians, dentists and nurses
employed by employers pursuant to this
Chapter shall have the necessary training in
industrial medicine and occupational safety
and health.
The
Secretary
of
Labor
and
Employment, in consultation with industrial,
medical, and occupational safety and health
associations, shall establish the qualifications,
criteria and conditions of employment of such
health personnel.
2. Their relatives within the 4th civil

degree of consanguinity or affinity, to engage,
directly or indirectly in the business of
recruiting migrant workers. (Sec. 8, R.A. 8042)
Who is a non-licensee / non-holder of
authority?
Any person, corporation or entity:
4. Art. 211. Record of Death or
1.
Disability
5. Art. 212. Notice of Sickness, Injury
or Death
6. Art. 255. Unfair Labor Practices of
2. Whose license or authority has been

suspended, revoked or cancelled by
the POEA or the SoLE
Labor Organizations
7. Art. 277. Applicability to Farm

Tenants and Rural Workers
II. Recruitment and Placement
A. Recruitment of Local and Migrant Workers

1. Illegal recruitment (Sec. 5, R.A. No. 10022)
Which has not been issued a valid

license or authority to engage in
recruitment and placement by the
Secretary of Labor and Employment
(SoLE); or
What are the grounds for revocation of

license?
1. Incurring an accumulated 3 counts of
suspension by an agency based on final and
executory orders within the period of validity
of its license;
a) License vs. authority
2. Violations of the conditions of
What is a license?
license;
It is issued by DOLE authorizing a

person or entity to operate a private
employment agency.
3. Engaging in acts of misrepresentation for the purpose of securing a

license or renewal;
What is an Authority?
4. Engaging in the recruitment or

placement of workers to jobs harmful to the
Page 3 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

public health or morality or to the dignity of
the country (Sec. 3, Rule I, Book VI, Rules and
Regulations
Employment).
Governing
Overseas
b) Essential elements of illegal recruitment

What are the elements of Illegal Recruitment?
1. Offender is a non--licensee or nonholder of authority to lawfully engage in the
recruitment/placement of workers
2. Offender undertakes:
a. Any act of canvassing,
enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes
referrals, contact services, promising or
advertising for employment, locally or abroad,
whether for profit or not (Art. 13[b]);or
under Art.34
b. Any of prohibited practices
c) Simple illegal recruitment

It is considered simple illegal
recruitment when it involves less than three (3)
victims or recruiters.
d) Illegal recruitment in large scale

It is committed against 3 or more
persons individually or as a group.
e) Illegal recruitment as economic sabotage

When is illegal recruitment considered as
economic sabotage?
When it is committed:
1. By a syndicate carried out by 3 or
more persons conspiring/confederating with
one another or
2. In large scale committed against 3
or more persons individually or as a group.
(Sec. 6, 10022)
f) Illegal recruitment vs. Estafa

Illegal recruitment is a malum
prohibitum, whereas estafa is malum in se,
meaning the criminal intent is NOT necessary
for conviction in the former, but it is necessary
in the latter.
It is not required that it be shown that

the recruiter wrongfully represented himself as
a licensed recruiter.
NOTE: It is enough that the victims
were deceived as they relied on the
misrepresentation and scheme that caused
them to entrust their money in exchange of
what they later discovered was a vain hope of
obtaining employment abroad.
Accused defrauded another by abuse
of confidence, or by means of deceit.
NOTE: It is essential that the false
statement
or
fraudulent
representation
constitutes the very cause or the only motive
which induces the complainant to part with
the thing of value Illegal recruitment and estafa
cases may be filed simultaneously or
separately.
The filing of charges for illegal
recruitment does not bar the filing of estafa,
and vice versa. Double jeopardy will not set.
g) Liabilities
What is the liability of the private employment
agency and the principal or foreign-based
employer?
They are jointly and severally liable for
any violation of the recruitment agreement
and the contracts of employment.
Note: This joint and solidary liability
imposed by law against recruitment agencies
and foreign employers is meant to assure the
aggrieved worker of immediate and sufficient
payment of what is due him. If the
recruitment/placement agency is a juridical
being, the corporate officers and directors and
partners as the case may be, shall themselves
be jointly and solidarily liable with the
corporation or partnership for the claims and
damages (Becmen Service Exporter and
Promotionv. Cuaresma, G.R. Nos. 182978-79,

April 7, 2009).
What is the theory of imputed knowledge?
A rule in insurance law that any
information material to the transaction, either
possessed by the agent at the time of the
transaction or acquired by him before its
Page 4 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

completion, is deemed to be the knowledge of
the principal, at least so far as the transaction is
concerned, even though in fact the knowledge
is not communicated to the principal at all.
3. To ensure full regulation of

employment in order to avoid
exploitation.
(Leonor v. Filipinas Compania, 48 OG 243)
B. Regulation and Enforcement
h) Pre-termination of contract of migrant

worker
1. Suspension or cancellation of license or

authority (Art. 35, Labor Code)
What are the effects of termination of overseas

employment without just, valid or authorized
cause?
What are the grounds for suspension or

cancellation of license?
The worker shall be entitled to the full

reimbursement if his placement fee and the
deductions made with interest at twelve
percent (12%) per annum, plus his salaries for
the unexpired portion of his employment
contract or for three (3) months for every year
of the unexpired term, whichever is less (Sec.
7, RA 10022)
1. Prohibited acts under Art. 34;

2. Publishing job announcements w/o
POEAs approval;
3. Charging a fee which may be in excess
of the authorized amount before a
worker is employed;
4. Deploying workers w/o processing
through POEA; and
5. Recruitment in places outside its
authorized area (Sec. 4, Rule II, Book
2. Direct hiring
IV, POEA Rules).
What is Direct-hiring?
It is when an employer hires a Filipino
worker for overseas employment without
going through the POEA or entities authorized
by the Secretary of Labor.
2. Regulatory and visitorial powers of the

DOLE secretary
What are the regulatory powers of the
Secretary of Labor and Employment (SOLE)?
What is the ban on direct-hiring?
1.
General Rule: An employer may only hire

Filipino worker for overseas employment
through POEA or entities authorized by DOLE.
2.
Exception:
Direct hiring by:
1. International organizations;
2. Name hires;
3. Members of the diplomatic
organizations; and
4. Other Employers as may be
allowed by DOLE.
Why is direct-hiring prohibited?
1.
To ensure the
and conditions
the worker;
2. To assure the
hires only
workers; and
best possible terms

of employment for
foreign Er that he
qualified Filipino
Restrict and regulate the recruitment and

placement activities of all agencies; and
Issue orders and promulgate rules and
Regulations.
What constitute visitorial power?

1.
Access to employers records and

premises at any time of the day or night,
whenever work is being undertaken;
2. To copy from said records; and
3. 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 the
Labor Code and of any labor law, wage
order, or rules and regulation issued
pursuant thereto.
Give 4 instances where the visitorial power of
the SLE may be exercised under the Labor
Code.
Page 5 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Power to:
Inspect books of accounts and records
of any person or entity engaged in
recruitment and placement; require it
to submit reports regularly on
prescribed forms and act in violations
of any provisions of the LC on
recruitment and placement. (Art. 37)
2. Have access to employers records and
premises to determine violations of
any provisions of the LC on
recruitment and placement. (Art. 128)
3. Conduct industrial safety inspections of
establishments. (Art. 165)
4. Inquire into the financial activities of
legitimate labor organizations (LLO)
and examine their books of accounts
upon the filing of the complaint under
oath and duly supported by the
written consent of at least 20% of the
total
membership
of
the
LO
concerned.
3. Filipino servicemen working in

U.S.
military
installations
(Resolution No. 1-83, InterAgency

Committee
for
Implementation of E.O. 857).
1.
Can SOLE issue search warrants or warrants of

arrest?
No. Only a judge may issue search and
arrest warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE
the power to issue search or arrest warrants.
The labor authorities must go through the
judicial process.
3. Remittance of foreign exchange earnings

What is the rule on remittance of foreign
exchange earnings?
General Rule: It shall be mandatory for all
OFWs to remit a portion of their foreign
exchange
earnings
to
their
families,
dependents, and/or beneficiaries ranging from
50%-80% depending on the workers kind of
job. (Rule VIII, Book III, POEA Rules)
Exceptions:
1. The workers immediate family
members,
beneficiaries
and
dependents are residing with him
abroad;
2. Immigrants
and
Filipino
professionals
and
employees
working with the UN agencies or
specialized bodies; and
What is the effect of failure to remit?

1.
Workers Shall be suspended or
removed from the list of eligible

workers for overseas employment; and
2. Employers Will be excluded from the
overseas
employment
program.
Private employment agencies shall face
cancellation or revocation of their
licenses or authority to recruit. (Sec. 9,
E.O. 857
4. Prohibited activities
What are prohibited practices in
recruitment/placement? (Art. 34.)
1. Furnishing or publishing any false
notice/information/document related
to recruitment/employment;
2. Failure to file reports required by SoLE;
3. Inducing or attempting to induce a
worker already employed to quit his
employment in order to offer him
another unless the transfer is designed
to liberate a worker from oppressive
terms and conditions;
4. Recruitment/placement of workers in
jobs harmful to public health or
morality or to the dignity of the
country;
5. Engaging directly or indirectly in the
management of a travel agency;
6. Substituting or altering employment
contracts without approval of DOLE;
7. Charging or accepting any amount
greater than that specified by DOLE or
make a worker pay any amount
greater than actually received by him;
8. Committing
any
act
of
misrepresentation to secure a license or
authority;
9. Influencing or attempting to influence
any person/entity not to employ any
worker who has not applied of
employment through his agency;
10. Obstructing or attempting to obstruct
inspection by SoLE or by his
representatives;
11. Withholding
or
denying
travel
documents from applicant workers
before
departure
for
monetary
Page 6 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law
12.
13.
14.
15.
16.
considerations other than authorized

by law;
Granting a loan to an OFW which will
be used for payment of legal and
allowable placement fees;
Refusing to condone or renegotiate a
loan incurred by an OFW after his
employment
contract
has
been
prematurely terminated through no
fault of his or her own;
For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the
processing
of
pending workers'
applications; and
For a recruitment/manning agency or a
foreign principal/ Er to pass on the
OFW or deduct from his or her salary
the payment of the cost of insurance
fees, premium or other insurance
related charges, as provided under the
compulsory
worker's
insurance
coverage
Imposing a compulsory and exclusive
arrangement whereby an OFW is
required to:
a. Avail a loan only from specifically
designated institutions, entities or
persons;
b. To undergo health examinations
only from specifically designated
medical, entities or persons, except
seafarers
whose
medical
examination cost is shouldered by
the shipowner; and
c. To undergo training of any kind
only from designated institutions,
entities or persons, except for
recommendatory
trainings
mandated
by
principals/shipowners (Sec. 6, R.A.
10022).
What is the limitation on the employers

power to regulate working conditions?
It must be done in good faith and not
for the purpose of defeating or circumventing
the rights of the employees. Such are not
always absolute and must be exercised with
due regard to the rights of labor.
Note: Ones employment, profession,
trade or calling is a property right and the
wrongful interference therewith is an
actionable wrong.
When does the condition on employment
under the Labor Code apply?
Only
if
an Employer-Employee
relationship exists.
Who are the employees that are covered by
the conditions of employment?
General Rule: It applies to all Ees in all
establishments.
Exceptions:
1. Govt employees;
2. Managerial employees;
3. Field personnel;
4. The employers family members who
depend on him for support;
5. Domestic helpers and persons in the
personal service of another; and
6. Workers who are paid by results as
determined under DOLE regulations.
Who are government employees?
They are Employees of the:
1. National Government;
2. Any of its political subdivisions; and
3. Including those employed in GOCCs with
original charters.
III. Labor Standards

A. Hours of work
Who are managerial employees?
1. Coverage/Exclusions (Art. 82, Labor Code)
Those whose primary duty consists of

the management of the establishment in which
they are employed or a department or
subdivision thereof, and other officers or
members of the managerial staff.
Who determines working conditions?

Generally, they are determined by the
employer, as he is usually free to regulate,
according to his discretion, all aspects of
employment.
They must meet all of the following

conditions, namely:
Page 7 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

1.
2.
3.
4.
5.
6.
Primary duty: management of the

establishment in which they are
employed or of a department or
subdivision thereof;
Customarily or regularly direct the
work of 2 or more employees;
Has the authority to hire or fire other
employees of lower rank; or their
suggestions and recommendations as
to the hiring and firing and as to the
promotion or any change of status of
other employees are given particular
weight;
Execute under general supervision
work along specialized or technical
lines
requiring
special
training,
experience, or knowledge;
Execute under general supervision
special assignment and tasks; and
Do not devote more than 20% of
their hours worked to activities which
are not directly and closely related to
performance of the work described.
(Art. 82[2])
They are:
1. non-agricultural employees;
2. who regularly perform their duties;
3. away from the principal place of
business or branch office of the
employer; and
4. whose actual hours of work in the field
cannot be determined with reasonable
certainty.
Who are domestic helpers and persons in the
personal service of another?
Those who:
1.
perform services in the employers (Er)
home which are usually necessary or
desirable for the maintenance or
enjoyment thereof; or
2. minister to the personal comfort,
convenience or safety of the employers
as well as the members of his
employers household.
1.
2. Normal hours of work

What are the normal hours of work of an
employee?
It should not exceed 8 hours in a
general working day.
Note: Normal hours of work may be
shortened or compressed.
a) Compressed work week
Who are field personnel?
What are the 3 groups

(employees) under the LC?
suspend, lay-off, recall, discharge,

assign or discipline employees;
2. Supervisory employees those who in
the interest of the employers,
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; and
3. Rank-and-File
employers
all
employers not falling within any of the
above definitions. (Art. 212[m])
of
employees
Managerial employees - One who is

vested with the powers or prerogatives
to lay down and execute management
policies and/or to hire, transfer,
What is a compressed workweek?

The normal workweek is reduced to
less than 6 days but the total number of work
hours of 48 hours per week shall remain. The
normal workday is increased to more than 8
hours but not to exceed 12 hours, without
corresponding
overtime
premium. The
concept can be adjusted accordingly
depending on the normal workweek of the
company. (Department Advisory Order No. 2,
Series of 2009)
When is the implementation of a compressed

work week valid?
The validity of the reduction of
working hours can be upheld when the
arrangement is temporary, it is a more humane
solution instead of a retrenchment of
personnel, there is notice and consultations
with the workers and supervisors, a consensus
is reached on how to deal with deteriorating
economic conditions and it is sufficiently
proven that the company was suffering from
losses.
Under the Bureau of Working
Conditions bulletin, a reduction of the
number of regular working days is valid where
the arrangement is resorted to by the
Page 8 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

employer to prevent serious losses due to
causes beyond his control, such as when there
is a substantial slump in the demand for his
goods or services or when there is lack of raw
materials. There is one main consideration in
determining the validity of reduction of
working hours that the company was
suffering from losses. A year of financial losses
would not justify a reduced workweek.
(Linton Commercial v. Hellera, G.R. No.

163147, October 10, 2007)
Under what conditions may a "compressed

work week" schedule be legally authorized as
an exception to the "8-hour a day"
requirement under the LC?
1.
2.
3.
4.
5.
There is no diminution in their weekly

or monthly take home pay or fringe
benefits;
The benefits are more than or at least
commensurate or equal to what is due
the Employees without the compressed
work week;
OT pay will be due and demandable
when they are required to work on
those days which should have ceased
to be working days because of the
compressed work week schedule;
No strenuous physical exertion or that
they are given adequate rest periods;
and
It must be for a temporary duration as
determined by the DOLE. (2005 Bar
Question)
What are the requisites for adoption of

compressed workweek?
1. The Employer shall notify the DOLE
through the Regional Office which has
jurisdiction over the workplace, of the
adoption of compressed workweek.
2. The notice shall be in Report Form
attached to the advisory.
3. The Regional Office shall conduct an
ocular visit to validate whether the
adoption of the flexible work
arrangements is in accordance with this
issuance. (Department Advisory Order
No. 2, Series of 2009)
3. Meal break
What is the duration of the meal period?
Every Employer shall give his
Employees not less than 60 minutes or 1 hour
time-off for regular meals.
Is the meal period compensable?
Being time-off, it is not compensable.
Employee must be completely relieved from
duty.
When is the
compensable?
meal
period
considered
1.
It is compensable where the lunch

period or meal time:
2. Is predominantly spent for the
employers benefit; or
3. Where it is less than 20 minutes
Note: Where during meal period, the laborers
are required to stand by for emergency work,
or where the meal hour is not one of complete
rest, such is considered OT. (Pan Am vs. Pan
Am Employees Association, G.R. No. L-16275,
Feb. 23, 1961)
Rest periods or coffee breaks running

from 5 to 20 minutes shall be considered as
compensable working time. (Sec. 7, Rule I,
Book III, IRR)
Are meal periods provided during OT work

compensable?
Yes, since the 1 hour meal period
(non-compensable) is not given during OT
work because the latter is usually for a short
period and to deduct from the same would
reduce to nothing the Employees OT work.
Thus, the 1 hour break for meals during OT
should be treated as compensable.
What are the instances where meal periods
shortened to not less than 20 minutes is
compensable or not compensable?
1.
Compensable At the instance of

Employer, when:
a. Work is non-manual in nature or does

not involve strenuous physical exertion;
b. Establishment regularly operates less than
16 hours a day;
Page 9 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

c. Work is necessary to prevent serious loss
of perishable goods; and
d. Actual or impending emergency or there
is urgent work to be performed on
machineries and equipment to avoid
serious loss which the Employer would
otherwise suffer. (Sec. 7, Rule I, Book III,
IRR)
2. Not Compensable Employee requested

for the shorter meal time so that he can
leave work earlier than the previously
established schedule. Requisites:
a. Employees voluntarily agree in writing
and are willing to waive OT pay for the
shortened meal period;
b. No diminution in the salary and other
fringe benefits of the Employees which
are existing before the effectivity of the
shortened meal period;
c. Work of the Employees does not involve
strenuous physical exertion and they are
provided with adequate coffee breaks in
the morning and afternoon;
d. Value of the benefits derived by the
Employees from the proposed work
arrangements
is
equal
to
or
commensurate with the compensation
due them for the shortened meal period
as well as the OT pay for 30 minutes as
determined
by
the
Employees
concerned;
e. OT pay will become due and
demandable after the new time schedule;
and
f. Arrangement is of temporary duration.
4. Waiting time
When is an Employee considered working
while on call?
When Employee is required to remain
on call in the Employers premises or so close
thereto that he cannot use the time effectively
and gainfully for his own purpose.
b. The employee is required or engaged

by the employer to wait (engaged to
wait)
Note: The controlling factor is whether

waiting time spent in idleness is so spent
predominantly for the employers benefit or
for the employee.
When is waiting time not considered working
time?
When the employee is waiting to be
engaged: idle time is not working time; it is
not compensable.
When is travel time considered working time?
1. Travel from home to work
General Rule: Normal travel from home to
work is not working time.
Exceptions:
a. Emergency call outside his regular
working hours where he is required to
travel to his regular place of business
or some other work site;
b. Done through a conveyance provided
by the employer;
c. Done under the supervision and
control of the employer;
d. Done under vexing and dangerous
circumstance.
2. Travel that is all in a days work time
spent in travel as part of the employees
principal activity
3. Travel away from home
General Rule:
When idle time is considered working time?

When the employee is idle or inactive
by reason of interruptions beyond his control
shall be considered working time.
When is waiting time considered working
time?
a. Travel that requires an overnight stay

on the part of the employee when it
cuts across the employees workday is
clearly working time;
b. The time is not only hours worked on
regular workdays but also during
corresponding working hours on nonworking days. Outside of these regular
working hours, travel away from
home is not considered working time.
a. If waiting is an integral part of his

work, or
Page 10 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Exception: During meal period or when
employee is permitted to sleep in adequate
facilities furnished by the employer.
What are the conditions in order for lectures,
meetings and training programs to be not
considered as working time?
what cannot be accomplished during the

normal hours of work.
Distinguish Overtime pay from premium pay.
Overtime
pay
All of the ff. conditions must be

present:
1. Attendance is outside of the employers
regular working hours;
2. Attendance is in fact voluntary; and
3. The employee does not perform any
productive
work
during
such
attendance.
is the additional
compensation for work performed beyond 8
hours on ordinary days (within the workers
24-hour workday). On the other hand,
premium pay is the additional compensation
for work performed within 8 hours on days
when normally he should not be working (on
non-working days, such as rest days and
special days.) But additional compensation for
work rendered in excess of 8 hours during
these days is also considered OT pay.
5. Overtime work, overtime pay
Overtime Pay Rates:
What is overtime work (OT)?
OT during a regular working day
Work performed beyond 8 hours

within the workers 24 hour workday.
Additional compensation of 25% of

the regular wage.
Note: Express instruction from the

employer to the employee to render OT work
is not required for the employee to be entitled
to OT pay; it is sufficient that the employee is
permitted or suffered to work. However,
written authority after office hours during rest
days and holidays are required for entitlement
to compensation.
OT during a holiday or rest day
What is a work day?
If done on a special holiday AND rest day:
The 24-hour period which commences

from the time the employee regularly starts to
work.
Note: Minimum normal working hours
fixed by law need not be continuous to
constitute the legal working day.
What is the rationale behind OT pay?
Employee is made to work longer than
what is commensurate with his agreed
compensation for the statutory fixed or
voluntarily agreed hours of labor he is
supposed to do. (PNB vs. PEMA and CIR, G.R.
Rate of the first 8 hours worked on

plus at least 30% of the regular wage (RW)
If done on a special holiday OR rest day:
30% of 130% of RW
30% of 150% of RW
if done on a regular holiday:
30% of 200% of RW
May an employee be compelled to render OT
work?
General Rule: No. OT work is voluntary.
Exception: Compulsory OT work in any of the
following situations:
No. L-30279, July 30, 1982)
Discourages the employer from

requiring such work thus protecting the health
and well-being of the worker, and also tend to
remedy unemployment by encouraging
employers to employ others workers to do
1.
Urgent work to be performed on

machines and installations in order to
avoid serious loss or damage to the
employer or some other cause of
similar nature;
2. Work is necessary to prevent loss or
damage to perishable goods;
Page 11 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

3. In case of imminent danger to the
public safety due to an actual or
impending emergency in the locality
caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic or
other disaster or calamity;
4. Country is at war;
5. Completion or continuation of the
work started before the 8th hour is
necessary
to
prevent
serious
obstruction or prejudice to the business
operations of the employer;
6. Any other national or local emergency
has been declared; and
7. Necessary to prevent loss of life or
property.
d. Imminent danger to public safety.

2. Urgent work
a. To be performed on machineries,
equipment or installations; and
b. To avoid serious loss which the
employer would otherwise suffer.
3. Work is necessary to prevent serious
loss to perishable goods
4. Woman Employees
a. Holds a responsible position of
managerial or technical nature; or
b. Has been engaged to provide health
and welfare services
Note: There should be payment of additional

compensation. employees refusal to obey the
order
of
the
employer
constitutes
insubordination for which he may be subjected
to disciplinary action.
5. Nature of the work

a. Requires the manual skill and dexterity
of women workers; and
b. The same cannot be performed with
equal efficiency by male workers
6. Night work (R.A. No. 10151), Night shift

differential
6. Women Employees are immediate

members of the establishment or
undertaking
What is night work?
7. In analogous cases exempted by the

SLE in appropriate regulations (Art.
Any and all work rendered between

6:00 pm and 6:00 am. (National Rice & Corn
131)
Corp. v. NARIC, 105 Phil 891)
What is night work prohibition with regard to

women workers?
General Rule: No woman regardless of
age shall be employed or permitted to work,
with or without compensation in any:
1. Industrial undertaking or branch
thereof between 10pm and 6am of the
following day;
2. Commercial
or
non-industrial
undertaking or branch thereof, other
than agricultural, between midnight
and 6am of the following day; and
3. Agricultural undertaking at night time
unless she is given period of rest not
less than 9 consecutive hours.
Exceptions:
1. Actual or impending emergencies
a. Caused by serious accident, fire, flood,
typhoon, earthquake, epidemic, other
disasters, or calamity;
b. To prevent loss of life or property; or
c. In case of force majeure; or
Note: The operation of Call Contract Centers

which provides offshore case solutions to US
based clients who phone in to conduct
product inquiries and technical support,
operating for 24/7, has been exempted from
the prohibition considering the inevitable time
difference between the US and the Phils. and
the peak time for its operation is between
8:00 pm to 10:00 am Manila time, thereby
making it necessary for 80% of its employees,
including women, to work during graveyard
shift. (BWC-WHSD Opinion No. 491, s. 2003)
What is night shift differential (NSD)?
It is additional compensation of not
less than 10% of an employees regular wage
for every hour worked between 10:00 pm to
6:00 am, whether or not such period is part of
the workers regular shift.
Who are entitled to NSD?
General Rule: NSD applies to all employees
Page 12 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Exceptions:
1. Employees of the Governmentt and
any of its political subdivisions,
including GOCCs;
2. Retail and service establishments
regularly employing not more than 5
workers;
3. Includes task and contract basis;
personal service of another;
5. Field personnel and employees whose
time and performance is unsupervised
by the employer; and
6. Managerial employees.
7. Part-time work
Hours of work of part-time workers
a.
Payment of wage should be in

proportion the remuneration or
earnings, however designated, for
work done;
b. or to be done or for services rendered
or to be rendered;
c. It is capable of being expressed in
terms of money, whether fixed or
ascertained on a time, task, piece, or
commission basis, or other method of
calculating the same;
d. It is payable by an employer to an
employee under a written or
unwritten contract of employment for
work done or to be done, or for
services rendered or to be rendered;
and
It includes the fair and reasonable
value, as determined by the Secretary of Labor
and Employment, of board, lodging, or other
facilities customarily furnished by the employer
to the employee. Fair and only to the hours
worked.
8. Contract for piece work (see Civil Code)

Article 1713 of the Civil Code defines a
contract for a piece of work thus:
By the contract for a piece of work
the contractor binds himself to execute a piece
of work for the employer, in consideration of
a certain price or compensation. The
contractor may either employ only his labor or
skill, or also furnish the material.
B. Wages
1.
Attributes of Wage
It is reasonable value shall not include

any profit to the employer, or to any person
affiliated with the employer.
2. Wage, salary and pay; distinction
they are synonymous in meaning and usage.
3. Commission may or may not be treated as
part of wage depending on the circumstances.
4. Actual work is the basis of claim for wages
(No work, no pay).
1. Wage vs. salary
Wage
Compensation for
manual labor (skilled
or unskilled) also
known
as
blue
collared
workers,
paid at stated times
and measured by the
day, week, month or
season.
Considerable pay for
a lower and less
responsible character
of employment.
General Rule: Not
subject to execution
Exception:
Debts
incurred for food,
shelter, clothing and
medical attendance
Salary
Paid
to
white
collared
workers
and denotes higher
degree
of
employment or a
superior grade of
services and implies a
position in office.
Out gesture of a
larger and more
important service.
Subject to execution.
2. Minimum wage defined, Minimum wage

setting
What are the standards or
minimum wage setting?
criteria for
In the determination of such regional

minimum wages, the Regional Board shall,
among other relevant factors consider the
following:
1. The demand for living wages;
2. Wage
adjustment
vis-a-vis
the
consumer price index;
3. The cost of living and changes or
increases therein;
4. The needs of workers and their
families;
Page 13 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

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 development.
What is salary ceiling method?
It is a method of minimum wage
adjustment whereby the wage adjustment is
applied to employees receiving a certain
denominated ceiling. In other words, workers
already being paid more than the existing
minimum wage are also to be given a wage
increase (ECOP v. NWCP, G.R. No. 96169,
Sep. 24,1991).
by a corporation (Philippine Duplicators v.
NLRC, GR No. 110068, February 15, 1995).
What commissions are not deemed part of

salary?
Profit-sharing
or
bonus
type
commissions may be excluded when
determining the basic salary. An example of
which is are commissions paid to or received
by medical representatives or by rank-and-file
employees as productivity bonus (Boie-Takeda
Chemicals, Inc. v. Dela Serna, GR No. 92174,

December 10, 1993 and Philippine Fuji Xerox
Corp. v. Trajano GR No. 102552, December
10, 1993).
5. Deductions from wages
What is the rule in wage deductions?
General Rule: It is strictly prohibited
What is a floor wage method?

It involves the fixing of a determinate
amount to be added to the prevailing
statutory minimum wage rates.
3. Minimum wage of workers paid by results
Exceptions:
1.
2.
a) Workers paid by results

Who are workers paid by results?
They are:
1. paid based on the work completed;
and
2. not on the time spent in working
3. including those who are paid on piecework, takay, pakiaw, or task basis
if their output rates are in accordance
with the standards prescribed.
3.
4.
5.
Deductions under Art. 113 for

insurance premiums;
Union dues in cases where the right of
the worker or his union to check off
has been recognized by the employer
or authorized in writing by the
individual worker concerned (Art. 113).
Art. 241(o) provides that special
assessments may be validly checked-off
provided that there is an individual
written authorization duly signed by
every employee;
Deductions for SSS, Medicare and Pagibig premiums;
Taxes withheld pursuant to the Tax
Code;
Deductions under Art. 114 for loss or
damage to tools, materials or
equipments;
Deductions made with the written
authorization of the employee for
payment to a third person. (Sec 13,
b) Apprentices
c) Learners
d) Persons with disability
6.
4. Commissions
7. Deductions as disciplinary measures for

habitual tardiness (Opinion dated
Rule VIII, Book III of the IRR);
What commissions are deemed part of salary?

Wages-or-sales percentage type should
be included in the 13th month pay
computation. An example of which is the sales
commission earned by salesmen who make or
close a sale of duplicating machines distributed
March 10, 1975 of the SLE);
8. Agency fees under Art. 248(e);

9. Deductions for value of meals and
facilities freely agreed upon;
10. In case where the employee is
indebted to the employer where such
Page 14 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

indebtedness has become due and
demandable (Art. 1706, Civil Code);
1. The employer is authorized to
withhold wages for debts due. Debt
in this case refers to any obligation due
from the employee to the employer. It
includes any accountability that the
employee may have to the employer.
There is no reason to limit its scope to
uniforms and equipment (Milan et al.
vs. NLRC, G.R. No. 202961, February
4, 2015).
11. In court awards, wages may be subject
of execution or attachment, but only
for debts incurred for food, shelter,
clothing, and medical attendance (Art.
1703, Civil Code); and

12. Salary deduction of a member of a
legally established cooperative (R.A.
6938, Art. 59)
6. Non-diminution of benefits
What is the concept of non-diminution (ND)
of benefits?
General Rule: Benefits being given to
employees cannot be taken back or reduced
unilaterally by the employer because the
benefit has become part of the employment
contract, whether written or unwritten.
necessary for the

laborers and his
familys
existence
and subsistence
Note:
Does
not
include
tools of
trade
or
articles/services
primarily for the
benefit
of
the
employer
or
necessary to the
conduct
of
the
employers business
Forms part of the
wage
Deductible
from
wage
For the benefit of the
worker
and
his
family.
or special privileges
or benefits given to
or received by the
laborers over and
above their ordinary
earnings or wages
(Atok Big Wedge

Mining Co. v. Atok
Big Wedge Mutual
Benefit Assoc, G.R.
No. L-7349, July 19,
1955).
Independent of wage
Not wage deductible
Granted for the
convenience of the
employer.
7. Wage Distortion / Rectification

What is wage distortion?
Exception: To correct an error, otherwise, if

the error is not corrected for a reasonable
time, it ripens into a company policy and
employees can demand it as a matter of right.
A situation where an increase in wage

results in
the elimination or severe
contraction of intentional
quantitative
differences in wage or salary rates between
and among the 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.
When is ND of benefits applicable?
What are the elements of Wage Distortion?
It is applicable if it is shown that the grant of

benefit:
1.
Is based on an express policy of the

law; or
2. Has ripened into practice over a long
period of time and the practice is
consistent and deliberate and is not
due to an error in the construction/
application of a doubtful or difficult
question of law.
7. Facilities vs. supplements
1.
An existing hierarchy of positions with

corresponding salary rates;
2. A significant change or increase in the
salary rate of a lower pay class without
a corresponding increase in the salary
rate of a higher one;
3. The elimination of the distinction
between the 2 groups or classes; and
4. The WD exists in the same region of
the country. (Alliance Trade Unions v.
NLRC, G.R. No. 140689, Feb. 17,

2004)
Distinction between Facilities and Supplements

Facilities
Items of
Supplements
expenses Extra remuneration
Page 15 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

C. Rest Periods
Exceptions: (UNA-A-PAW)
1. Weekly rest day
1.
What is the right to weekly rest day?

Every employer shall give his
employees a rest period of not less than 24
consecutive hours after every 6 consecutive
normal work days. (Sec. 3, Rule III, Book III,
2.
IRR)
3.
What is the scope of weekly rest day?

It shall apply to all employers whether
operating for profit or not, including public
utilities operated by private persons. (Sec. 1,
4.
Rule III, Book III, IRR)
5.
Who determines the weekly rest day?
6.
General Rule: Employer shall determine and

schedule the weekly rest day of his employee.
Exceptions:
1. CBA;
2. Rules and regulations as the SLE
provides; and
3. Preference of employee based on
religious grounds employee shall
make known his preference in writing
at least 7 days before the desired
effectivity of the initial rest day so
preferred (Sec. 4(1), Rule III, Book III,
IRR)
Exception to exception no. 3: Employer may

schedule the weekly rest day of his choice for
at least 2 days in a month if preference of the
employee will inevitably result in:
a. serious prejudice to the operations of
the undertaking; and
b. the employer cannot normally be
expected to resort to other remedial
measures. (Sec. 4(2), Rule III, Book III,
IRR
7.
Urgent work to be performed on the

machinery, equipment or installation,
to avoid serious loss which the
employer would otherwise suffer;
Nature of work requires continuous
operations for 7 days in a week or
more and stoppage of the work may
result in irreparable injury or loss to
the employer;
Abnormal pressure of work due to
special circumstances, where the
employer
cannot
be
ordinarily
expected to resort to other measures;
Actual or impending emergencies
(serious accident, fire, flood, typhoon,
earthquake, etc.)
Prevent loss or damage to perishable
goods;
Analogous or similar circumstances as
determined by the SLE; and
Work is necessary to avail of favorable
weather or environmental conditions
where performance or quality of work
is dependent thereon.
D. Holiday pay / Premium pay

What is premium pay?
It is the additional compensation for
work rendered by the employee on days when
normally he should not be working such as
special holidays and weekly rest days.
Can the Employer and Employre agree on the
rate of premium pay other than that provided
by law?
Yes. Nothing shall prevent the Er and
his Ee or their representatives from entering
into any agreement with terms more favorable
to the Ees Provided: It shall not be used to
diminish any benefit granted to the Ees under
existing laws, agreements and voluntary Er
practices. (Sec. 9, Rule III, Book III, IRR)
2. Emergency Rest Day Work
What is holiday pay?
Can an employee be compelled to work on his

rest day?
It is a premium given to employees

(Ees) pursuant to law even if he has not been
suffered to work on a regular holiday. It is
limited to the 11 regular holidays, also called
legal holidays listed by law.
General Rule: No.
Page 16 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

The employee (Ee) should not have
been absent without pay on the working day
preceeding the regular holiday.
Limited to those
Not exclusive
provided under Art.
94, LC
What are the classes of special day?
Who are entitled to Holiday Pay?
1. National Special Public Holiday
General Rule: All employees are entitled.
(Sec.1, Rule IV, Book III, IRR)
General Rule: Non working days

Exception:
President
Otherwise
declared
by
the
Exceptions:
1.
2. Local Special Public Holiday Regular

working day. (LOI 814 as
amended
by
LOI 1087)
2.
What are regular holidays?
3.
They are compensable whether

worked or unworked subject to certain
conditions. They are also called legal holidays.
The following are considered regular holidays
(Presidential Proclamation No. 18).
4.
REGULAR HOLIDAYS
New Years Day
Maundy Thursday
Good Friday
7.
Eidl Fitr
Araw ng Kagitingan
Labor Day
Independence Day
National Heroes Day
Bonifacio Day
Christmas Day
Rizal Day
DATE
January 1
April 2
April 3
Movable Date
April 9
May 1
June 12
Aug. 31 (last Monday
of August)
Nov. 30
December 25
Dec. 30
Distinction between Regular and Special

Holiday
Regular holiday
Special holiday
If Unworked
Regular pay
(subject to certain
conditions for daily
paid Ees)
No Pay
If worked
2x
regular
(200%)
Other matters
Set by law
pay
+ 30% premium pay

of
100% regular wage
Set by proclamation
5.
6.
8.
Govt Ees and any of its political

subdivisions, including GOCCs (with
original charter);
Retail and service establishments
regularly employing less than 10
workers;
Domestic helpers and persons in the
personal service of another;
Employee engaged on task or contract
basis or purely commission basis;
Members of the Family of the Er who
are dependent on him for support;
Managerial Ee and other member of
the managerial staff;
Field personnel and other Ee whose
time
and
performance
are
unsupervised by the Er; and
Ee paid fixed amount for performing
work irrespective of the time
consumed in the performance thereof.
(Sec. 1, Rule IV, Book III, IRR)
What are the rates of compensation for rest

day, Sunday or holiday work?
Instances
Work on
a scheduled
rest day
Work has no
regular
workdays and
rest days (If
performed on
Sundays
and
Holidays)
Work on a
Sunday (If Ees
scheduled rest
day)
Work
performed on
any
Special
Holiday
Page 17 of 72
BAR OPERATIONS 2015
Rates of additional
Compensation
+ 30% Premium Pay
(PP) of 100% regular
wage (Sec. 7, Rule III,
Book III, IRR)
+ 30% PP of 100% RW
(Sec. 7, Rule III, Book III,

IRR)
+ 30% PP of 100% RW
(Sec. 7, Rule III, Book III,

IRR)
1st 8 hrs: + 30% PP of

100% RW
Excess of 8 hrs: + 30% of

hourly rate on said date.
Green Notes 2015
Labor Law
Work
performed on a
Special Holiday
and same day is
the
scheduled rest
day
Work
performed on a
Special Working
Holiday
(M.C. No. 10, Series

of 2004)
1st 8 hrs: + 50% PP of
100% regular wage

Excess of 8 hrs: + 30%
of hourly rate on said
date (M.C. No. 10, Series
of 2004).
Ee is only entitled to his

basic rate. No PP is
required.
Reason: Work performed
is considered work on
ordinary working days.
(Sec. 7, Rule III, Book
III, IRR)
1.) Coverage, exclusions
E. Leaves
To whom does the title on wages apply?
1. Service Incentive Leave
General Rule: It applies to all employees

Exception:
1. Farm tenancy or leasehold;
2. Household or domestic helpers,
including family drivers and persons
working in the personal service of
another;
3. Home workers engaged in needlework
or in any cottage industry duly
registered in accordance with law;
4. Workers
in
duly
registered
cooperatives when so recommended
by the Bureau of Cooperative
Development and upon approval of
the
Secretary
of
Labor
and
Employment; and
5. Workers of a barangay micro business
enterprise (R.A. 9178)
2. Teachers, piece workers, takay, seasonal
workers, seafarers
What are the HPs of certain employees?
Employees
Rule
1.
RH
semestral
school
vacations
during
2.
RH
Christmas
vacation
during
Private
teachers
(Faculty members of
colleges and
universities)
HP shall not be less

than his average
daily
Ee paid by:
earnings for the last
1. results or
7
2. output
actual work days
(Piece
work
preceding the RH.
payment)
Provided: HP shall
not be less than the
minimum wage rate.
May not be paid the
required HP during
Seasonal Workers
offseason where they
are not at work.
Workers having no
Shall be entitled to
regular work days
HP
Shall be entitled to
Seafarers
HP
- Not entitled to HP
What is service incentive leave?

It is 5 days leave with pay for every
employee who has rendered at least 1 yr of
service. It is commutable to its money
equivalent if not used or exhausted at the end
of year.
Who are entitled to SIL?
General Rule: Applies to every Ee who has
rendered at least 1 year of service.
Exceptions:
1. Government Ees and any of its
political subdivisions including GOCCs;
2. Those already enjoying the benefit;
personal services of another;
4. Those already enjoying vacation leave
with pay of at least 5 days;
5. Managerial Ees;
6. Field personnel and other Ees whose
performance is unsupervised by the Er;
7. Employed in establishments regularly
employing less than 10 workers;
8. Exempt establishments; and
9. Engaged on task or contract basis,
purely commission basis, or those who
are paid in a fixed amount of
performing work irrespective of the
time consumed in the performance
thereof. (Art. 95[b])
- Shall be paid HP
Page 18 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Are part-time workers entitled to the full
benefit of the yearly 5 day SIL?
Yes. Art. 95 of Labor Code speaks of
the number of months in a year for
entitlement to said benefit (Bureau of Working
Conditions Advisory Opinion

Integrated Exporters, Inc.).
to
Phil.
Are piece-rate workers entitled to the full

benefit of the yearly 5 day SIL?
It depends.
1. Yes. Provided:
a. They are working inside the

premises of the employer; and
b. Under the direct supervision of
the Er.
2. No. Provided:
a. They are working outside the

premises of the Er;
b. Hours
spent
in
the
performance of work cannot
be ascertained with reasonable
3. certainty; and
a. They are not under the direct
supervision of the Er
Does it apply to Ees with salaries above
minimum wage?
No. The difference between the
minimum wage and the actual salary received
by the Ees cannot be deemed as their 13th
month pay and SIL pay as such difference is
not equivalent to or of the same import as the
said benefits contemplated by law. (JPL
Marketing Promotions v. CA, G.R. No.

151966, July 8, 2005.)
2. Maternity Leave
What is maternity leave benefit?
A covered female employee (Ee) is

entitled to a daily maternity benefit equivalent
to 100% of her present basic salary,
allowances and other benefits or the cash
equivalent of such benefits for 60 days or 78
days in case of caesarian delivery.
What are the requirements in order that
maternity benefits may be claimed?
1.
There is childbirth, abortion or

miscarriage; and
2. She has paid at least 3 monthly
contributions.
What are the conditions?
1. The Ee shall have notified her
employer (Er) of her pregnancy and
the probable date of her childbirth
which notice shall be transmitted to
the SSS;
2. The payment shall be advanced by the
Er in 2 equal installments within 30
days from the filing of the maternity
leave application;
3. In case of caesarian delivery, the Ee
shall be paid the daily maternity
benefit for 78 days;
4. Payment of daily maternity benefits
shall be a bar to the recovery of
sickness benefits for the same
compensable period of 60 days for the
same
childbirth,
abortion,
or
miscarriage;
5. The maternity benefits provided under
Section 14-A shall be paid only for the
first four deliveries;
6. The SSS shall immediately reimburse
the Er of 100% of the amount of
maternity benefits advanced to the Ee
by the Er upon receipt of satisfactory
proof of such payment and legality
thereof; and
7. If an Ee should give birth or suffer
abortion or miscarriage without the
required contributions having been
remitted for her by her Er to the SSS,
or without the latter having been
previously notified by the Er of the
time of the pregnancy, the Er shall pay
to the SSS damages equivalent to the
benefits which said Ee would otherwise
have been entitled to, and the SSS shall
in turn pay such amount to the Ee
concerned.
3. Paternity Leave
What is paternity leave?
It refers to the benefits granted to a
married male employee allowing him not to
report for work for 7 days but continues to
earn the compensation therefore, on the
condition that his spouse has delivered a child
or suffered a miscarriage for purposes of
enabling him to effectively lend support to his
Page 19 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

wife in her period of recovery and/or in the
nursing of the newly-born child.
What are the requirements in order to avail
paternity leave?
3. Must have at least rendered service

of one year to his or her employer;
and
4. He or she must remain a solo
parent
The male employee (Ee) applying for

paternity leave shall:
Who are those referred to as solo parent

entitled to parental leave?
1.
Notify his employer (Er) of the

pregnancy of his legitimate spouse;
and
2. The expected date of such
delivery.
Any individual who falls under any of

the following categories:
What are the conditions for entitlement to

paternity leave?
The male Ee is;
1. Ee of private or public sector;
2. Only for the first 4 deliveries of
legitimate spouse with whom he is
cohabiting; and
3. Notify his Er of the pregnancy of his
legitimate spouse and the expected
date of such delivery.
Note: For purposes of this Act,
delivery shall include childbirth or any
miscarriage.
4. Parental Leave (R.A. No. 8972)
What is parental leave?
Leave benefits granted to a solo parent
to enable him/her to perform parental duties
and responsibilities -where physical presence is
required.
In addition to leave privileges under
existing laws, parental leave of not more than
7 working days every year shall be granted to
any solo parent Ee who has rendered service
of at least 1 year. (Sec.8)
What are the conditions for entitlement of
parental leave?
1.
He or she must fall among those

referred to as solo parent;
2. Must have the actual and physical
custody of the child or children;
1. A woman who gives birth as a result of

rape and other crimes against chastity
even without a final conviction of the
offender, provided, that the mother
keeps and raises the child;
2. Parent left solo or alone with the

responsibility of parenthood due to:
a. Death of spouse;
b. Detention or service of sentence of
spouse for a criminal conviction for at
least 1 yr;
c. Physical and/or mental incapacity of
spouse
d. Legal separation or de facto separation
from spouse for at least 1 yr as long as
he/she is entrusted with the custody of
the children;
e. Nullity or annulment of marriage as
decreed by a court or by a church as
long as he/she is entrusted with the
custody of the children; and
f. Abandonment of spouse for at least 1
yr;
3. Unmarried mother/father who has

preferred to keep and rear his or her
child/children instead of:
a. having others care for them; or
b. give them up to a welfare institution
4. Any other person who solely provides:

a. parental care; and
b. support to a child or children
5. Any family member who assumes the

responsibility of head of family as a
result of the:
a.
b.
c.
d.
death;
abandonment;
disappearance; or
prolonged absence of the parents or
solo parent.
Page 20 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Note: A change in the status or circumstance of
the parent claiming benefits under this Act,
such that he/she is no longer left alone with
the responsibility of parenthood, shall
terminate his/her eligibility for these benefits.
3. Ees paid purely on commission

basis; and
4. Ees already receiving 13th month
pay
(Sec.3)
Is 13th Month Pay legally demandable?
5. Leave for Victims of Violence against

Women and Children (R.A. No. 9262)
Yes. It is a statutory obligation, granted

to covered Ees, hence, demandable as a matter
of right. (Sec 1, P.D. 851)
What is the leave for victims of violence

against women or otherwise known as
battered woman leave?
In what form is the 13th month pay paid or

given?
A female employee who is a victim of

violence (physical, sexual, or psychological) is
entitled to a paid leave of 10 days in addition
to other paid leaves. (R.A. 9262, Anti-VAWC
Act)
It is given in the form of:

1. Christmas Bonus;
2. Midyear Bonus;
3. Profit Sharing Scheme;
OR
4. Other Cash bonuses amounting to
not less than 1/12 of its basic salary
F. Service Charge
Note: It must always be in the form of a legal

tender
What are service charges (SC)?

These are charges collected by hotels,
restaurants and similar establishments and shall
be distributed at the rate of:
H. Separation Pay
G. Thirteenth Month Pay
Separation
pay,
as
generally
understood, refers to the amount due to the
employee who has been terminated from
service for causes authorized by law (not due
to employees fault or wrong-doing) such as
installation
of
labor-saving
devices,
redundancy, retrenchment to prevent losses or
the closing or cessation of operation of the
establishment or undertaking.
What is 13th month pay or its equivalent?

Additional income based on wage
required by P.D. 851 Requiring all Employers
to pay their Employees a 13th month pay
which is equivalent to 1/12 of the total basic
salary earned by an employee (Ee) within a
calendar year.
Who are covered by P.D. 851?
General Rule: All rank-and-file Ees regardless of
the amount of basic salary that they receive in
a month, if their employers (Er) are not
otherwise exempted from paying the 13th
month pay. Such Ees are entitled to the 13th
month pay regardless of said designation of
employment status, and irrespective of the
method by which their wages are paid.
Provided, that they have worked for at least 1
month, during a calendar year. (Revised
Guidelines on the Implementation of the 13

Month Pay Law)
What is Separation Pay?
Separation pay is intended to provide

the employee with the wherewithal during the
period he is looking for another employment.
Five Instances when Separation Pay is due to
Employee
There are at least five instances in
which an employee is entitled to payment of
separation
pay
upon
severance
of
employment:
th
Exceptions:
1. Government Ees;
2. Household helpers;
1.
When the termination of employment

is due to causes authorized by law,
such as installation of labor-saving
devices, redundancy, retrenchment to
prevent losses or the closing or
cessation of operation of the
Page 21 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

establishment or undertaking (Art.
283, LC);
2. When the severance of employment is
cause by a disease, particularly when
the employee is found to be suffering
from any disease and whose continued
employment is prohibited by law or is
prejudicial to his health as well as the
health of his co-employees (Art. 284,
LC);
3. When the termination from service of
the employee has been declared illegal,
but his reinstatement to his former
position is no longer feasible for some
valid reason, e.g., when reinstatement
is rendered impossible due to
subsequent closure of business, or
when the relationship between
employer and employee has become
strained
(doctrine
of
strained
relations);
4. In case of pre-termination of
employment
contract
in
jobcontracting arrangement; and
5. In exceptional cases, where separation
pay is awarded as a measure of social
or compassionate justice. Here,
payment of separation pay may be
ordered by the court even if the
dismissal from service is found to have
been for valid or just cause, i.e., even if
the employee is found to have been at
fault.
I. Retirement Pay
1. Eligibility
Retirement (R.A 7641, approved on
December 9, 1992 it has a retroactive effect
being a curative social legislation)
a) Compulsory upon reaching 65 years
of age; with at least 5 years of service;
b) Optional upon reaching 60 years of
age; with at least 5 years of service; at
the option of the employee
2. Amount
Components of Retirement Pay:
a. 15 days based on the employees latest
salary;
b. 1/12 of the 13th month pay; and
c. Cash equivalent of the 5 days service
incentive leave.
Computation:
22.5 days x number of years of service
(22.5 days: 15 days plus 2.5 days representing
1/12 of the 13th month pay plus 5 days of
service incentive leave)
3. Retirement benefits of workers paid by
results
For covered workers who are paid by
results and do not have a fixed monthly salary
rate, the basis for the determination of the
salary for fifteen (15) days shall be their
average daily salary (ADS).
The ADS is derived by dividing the
total salary or earnings for the last twelve
months reckoned from the date of retirement
by the number of actual working days in that
particular
period,
provided
that
the
determination of rates of payment by results
are in accordance with the established
regulations.
4. Retirement benefits of part-time workers
Part-time workers are also entitled to
retirement pay of onemonth salary for every
year of service under RA 7641 after satisfying
the following conditions precedent for
optional retirement:
(a) there is no retirement plan between
the employer and the employee; and (b) the
employee should have reached the age of sixty
(60) years, and should have rendered at least
five (5) years of service with the employer.
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits
due them.
5. Taxability
Is retirement pay taxable?
SEC. 1, RA 4917 - Any provision of law to the
contrary notwithstanding, the retirement
benefits received by officials and employees of
private firms, whether individual or corporate,
in accordance with a reasonable private
benefit plan maintained by the employer
(1) shall be exempt from all taxes and
Page 22 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

(2) shall not be liable to attachment,
garnishment, levy or seizure by or under any
legal or equitable process whatsoever
Exception
Except to pay a debt of the official or
employee concerned to the private benefit
plan or that arising from liability imposed in a
criminal action:
Additional conditions
(1) That the retiring official or employee
has been in the service of the same
employer for at least ten (10) years
and is not less than fifty years of age at
the time of his retirement;
(2) That the retirement benefits shall be
availed of by an official or employee
only once; and,
(3) That in case of separation of an official
or employee from the service of the
employer due to death, sickness or
other physical disability or for any
cause beyond the control of the said
official or employee, any amount
received by him or by his heirs from
the employer as a consequence of such
separation shall likewise be exempt as
hereinabove provided.
"Reasonable private benefit plan" means a
pension, gratuity, stock bonus or profit sharing
plan maintained by an employer for the
benefit of some or all of his officials and
employees, wherein contributions are made by
such employer or officials and employees, or
both, for the purpose of distributing to such
officials and employees the earnings and
principal of the fund thus accumulated, and
wherein it is provided in said plan that at no
time shall any part of the corpus or income of
the fund be used for, or be diverted to, any
purpose other than for the exclusive benefit of
the said officials and employees.
H. Women Workers
as against a male Ee for work

of
2. equal value;
a. Favoring a
respect to
male
Ee
with
3. promotion, training opportunities,

study and scholarship grants on
account of gender (Art. 135);
a. Favoring a male applicant with
respect to hiring where the
particular job can
4. equally be handled by a woman;
or
a. Favoring a male Ee over a
female Ee with respect to
dismissal of personnel.
5. Stipulating, whether as a condition
foremployment or continuation of
employment:
a. That a woman Ee shall not get
married, or
b. That upon marriage, such
woman Ee shall be deemed
resigned or separated. (Art.
136)
Note: A woman worker may not

be dismissed on the ground of
dishonesty for having written
single on the space for civil
status on the application sheet,
contrary to the fact that she was
married. (PT&T Co. v. NLRC, G.R.
No. 118978, May 23, 1997)

6. Dismissing,
discriminating
or
otherwise prejudice a woman Ee
by reason of her being married
(Art. 136);
7. Denying any woman Ee benefits

provided by law (Art. 137);
1. Provisions against discrimination

What are the unlawful acts against women Ee?
1. Discrimination with respect to the
terms
and
conditions
of
employment solely on accountof
sex:
a. Payment
of
lesser
compensation to a female Ee
8. Discharge any woman for the

purpose of preventing her from
enjoying any of the benefits
provided by law (Art. 137);
9. Discharging such woman on
account of her pregnancy, or while
Page 23 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

on leave or in confinement due to
her pregnancy (Art. 137);
alternative exist other than the discriminating

practice. To justify a BFOQ the employer must
prove two factors:
10. Discharging
or
refusing
the
admission of such woman upon
returning to her work for fear that
she may again be pregnant (Art.
1.
137)
Note: Discrimination in any form from preemployment to post employment, including

hiring, promotion or assignment, based on the
actual, perceived or suspected HIV status of an
ndividual is unlawful. (Philippine AIDS
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. (Star
Prevention and Control Act of 1998, [R.A.

8504])
Under Sec. 2 of R.A. 9710 or the

Magna Carta of Women, the State condemns
discrimination against women in all its forms
and pursues by all appropriate means and
without delay the policy of eliminating
discrimination against women in keeping with
the Convention on the Elimination of All
Forms of Discrimination Against Women
(CEDAW) and other international instruments
consistent with Philippine law. The State shall
accord women the rights, protection, and
opportunities available to every member of
society.
The State shall take steps to review
and, when necessary, amend and/or repeal
existing laws that are discriminatory to women
within three (3)years from the effectivity of
this Act. (Sec. 12, R.A.9710)
2. Stipulation against marriage
That the employment qualification

is reasonably related to the
essential operation of the job
involved; and
Paper v. Simbol, G.R. No. 164774,

April 12, 2006)
What is the importance of the BFOQ Rule?

1.
To ensure that the Ee

effectively perform his work;
can
2. So that the no-spouse rule will not

impose any danger to business.
3. Prohibited Acts
What are the prohibited acts?
4. Anti-Sexual Harassment Act (R.A. No. 7877)
Who may be held liable for sexual harassment?
In a work, education or trainingrelated environment sexual harassment may be
committed by an:
What is the no-spouse employment policy?

General Rule:
1. Policy banning spouses from working
in the same company;
2. May not facially violate Art. 136 of the
LC but it creates a disproportionate
effect and the only way it could pass
judicial scrutiny is by showing that it is
reasonable despite the discriminatory
albeit disproportionate effect.
Exception: Bona fide occupational qualification
rule (BFOQ)
What is the BFOQ rule?
There must be a finding of any BFOQ
to justify an Ers no spouse rule. There must be
a compelling business necessity for which no
1.
2.
3.
4.
5.
6.
7.
Ee;
Manager;
Supervisor;
Agent of the (Er);
Teacher, instructor, professor;
Coach, trainer,;or
Any other person who, having
authority,
influence
or
moral
ascendancy over another in a work or
training or education environment:
a. Demands
b. Requests or
c. Requires
8. Any sexual favor from the other,

regardless of whether the demand,
request or requirement for submission
is accepted by the object of R.A. 7877.
(Sec. 3)
Page 24 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

How is sexual harassment committed?
2. In an education or training environment:
Generally, a person liable demands,

requests, or otherwise requires any sexual
favor from the other, regardless of whether
the demand, request or requirement for
submission is accepted by the latter.
a. Against one who is under the care,

custody or supervision of the offender;
Under the Sexual Harassment Act, does the

definition of sexual harassment require a
categorical demand or request for sexual
favor?
No. It is true that the provision calls
for a demand, request or requirement of a
sexual favor. But it is not necessary that the
demand, request or requirement of a sexual
favor be articulated in a categorical manner. It
may be discerned, with equal certitude, from
the acts of the offender. Likewise, it is not
essential that the demand, request or
requirement be made as a condition for
continued employment or for promotion to a
higher position. It is enough that the
respondents acts result in creating an
intimidating, hostile or offensive environment
for the employee (Domingo v. Rayala, G.R.
No. 155831, Feb. 18, 2008)
When is sexual harassment committed?

Specifically:
In a work-related
environment:
1.
or
employment
a. The sexual favor is made as a

condition in the hiring or in the employment,
re-employment or continued employment of
said individual, or in granting said individual
favorable compensation, terms, conditions,
promotions, or privileges; or the refusal to
grant the sexual favor results in limiting,
segregating or classifying the Ee which in a way
would discriminate, deprive or diminish
employment opportunities or otherwise
adversely affect said Ee;
b. The above acts would impair the
Ees rights or privileges under existing labor
laws; or
c. The above acts would result in an
intimidating, hostile, or offensive environment
for the Ee.
b. Against one whose education,

training, apprenticeship or tutorship is
entrusted to the offender;
c. Sexual favor is made a condition to
the giving of a passing grade, or the granting
of honors and scholarships, or the payment of
a stipend, allowance or other benefits,
privileges, or considerations; or
d. Sexual advances result in an
intimidating, hostile or offensive environment
for the student, trainee or apprentice.
What is the liability of the Er, head of office,
educational or training institution?
Ee shall be solidarily liable for damages
arising from the acts of sexual harassment
committed in the employment, education or
training environment provided:
1. The Er or head of office, educational
or training institution is informed of such acts
by the offended party; and
2. No immediate action is taken
thereon. (Sec. 5)
Can an independent action for damages be
filed?
Yes. Nothing under R.A. 7877 shall
preclude the victim of work, education or
training-related sexual harassment from
instituting a separate and independent action
for damages and other affirmative relief (Sec.
6).
What is the three-fold liability rule in sexual

harassment cases?
An act of sexual harassment may give
rise to civil, criminal and administrative
liability on the part of the offender, each
proceeding independently of the others.
When does the action prescribe?
Any action shall prescribe in 3 years.
Page 25 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

K. Employment of Minors (Labor Code and
R.A. No. 7678, R.A. No. 9231)
What are the general prohibitions?
General Rule:
C. Above 18 no prohibition
What is the rule regarding the issuance of work
certificates/ permits for children at least 15 but
below 18 years of age?
A. Below 15 yrs. Old
The issuance of a DOLE Certificate to

youth aged 15 to below 18 years of age is not
required by law. No employer shall deny
opportunity to any such youth applying for
employment merely on the basis of lack of
work permit or certificate of eligibility for
employment. Any young person aged 15 to
below 18 years of age may present copy of this
DOLE advisory to any employer, job provider,
government
authority,
or
his/her
representative when seeking employment or
anytime
during
employment
(DOLE
Department Advisory No.01-08)
1. The child works directly under the

sole responsibility of his parents, or guardians
who employ members of his family, subject to
the following conditions:
L. Househelpers (Labor Code as amended by

R.A. No. 7655, an Act Increasing the
Minimum Wage of Househelpers; see also
Household Service under the Civil Code)
a. Employment does not endanger the

childs safety, health and morals;
b. Employment does not impair the
childs normal development;
c. Er-parent or legal guardian provides
the child with the primary and/or
secondary education prescribed by the
Dept. of Education
What is domestic or household service?

1. Services in the Ers home;
2. Usually necessary or desirable;
3. For
the
maintenance
and
employment thereof;
4. Includes
ministering
to
the
personal comfort and convenience
of the members of the Ers
household; and
5. Including services of family drivers
1. No person under 18 years of age will

be allowed to be employed in an undertaking
which is hazardous or deleterious in nature;
and
2. No Er shall discriminate against any
person in respect to terms and conditions of
employment on account of his age.
Exceptions:
2. The childs employment or

participation in public entertainment or
information through cinema, theater, radio or
television is essential provided:
a. Employment contract is concluded by
the childs parents or legal guardian;
b. With the express agreement of the
child concerned, if possible, and
c. The approval of DOLE, the following
must be complied with:
i. The employment does not involve
advertisement or commercials
promoting alcoholic beverages,
intoxicating drinks, tobacco and its
by-products or exhibiting violence;
ii. there is a written contract
approved by DOLE; and
iii. the conditions provided in the first
instance are met.
B. Above 15 but below 18 may be employed
in any non-hazardous work
Who is a househelper?
A househelper is synonymous to domestic
servant:
1. Any person, male or female;
2. Who renders services in and about
the Ers home and;
3. Services are usually necessary or
desirable for the maintenance and
1. enjoyment thereof; and
4. Ministers
exclusively
to
the
personal comfort and enjoyment
of Ers family.
Note: The children and relatives of a house
helper who live under the Ers roof and who
share the accommodations provided for the
house helper by the Er shall not be deemed as
househelpers if they are not otherwise
engaged as such and are not required to
Page 26 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

perform any substantial household work. (Sec
3, Rule XII, Book III, IRR)
The definition of a househelper cannot

be interpreted to include househelp or laundry
women working in staffhouses of a company
(APEX Mining CO., Inc., v. NLRC, G.R. No.

94951, April 22, 1991)
What are the rights of househelpers?
1.
Original contract of domestic service

shall not last for more than 2 years but
it may be renewed by the parties (Art.
142);
2. Entitled to minimum wage in addition

to lodging, food, and medical
attendance (Art. 144);
3. Employment contract should be
reviewed every 3 years with the end
view of improving the terms and
conditions of
5. employment (Art. 143);
4. SSS benefits for those who are
receiving at least P1,000 per month
(Art. 143);
5. Non-assignment to a work in a
commercial, industrial or agricultural
enterprise at a wage or salary rate
lower than that provided for
agricultural or non -agricultural
workers (Art. 145);
6. Ees under 18 years of age shall be given
opportunity for at least elementary
education. The cost of education shall
be part of the HHs compensation,
unless otherwise stipulated (Art 146);
7. Should be treated in a just and humane
manner (Art. 147);
8. Not to be treated with physical
violence (Art. 147);
9. Suitable
and
sanitary
living
headquarters as well as adequate food
and medical attendance (Art. 148;)
10. Termination of employment should
be;
11. upon
expiration
of
term
of
employment or;
12. based on just cause (Art. 149);
13. Indemnity for unjust termination of
service; and
14. Employment certification as to nature
and duration of service and efficiency
and conduct of househelper.
M. Employment of Homeworkers
Who are homeworkers?
They are those who perform in or
about his own home any processing or
fabrication of goods or materials, in whole or
in part, which have been furnished directly or
indirectly, by an Er and sold thereafter to the
latter.
Distinction
between
Househelper
and
Homeworker
Househelpers
Homeworkers
Performs in or about
his own home any
processing or fabrication
Minister to the
of goods or materials, in
personal needs and
whole or in part, which
comfort of his Er in
have been furnished
the latters home
directly or indirectly, by
an Er and soldthereafter
to the latter
Minimum Wage of Househelpers (RA 7655)
The minimum compensation of eight
hundred pesos (P800.00) a month is required
for househelper s in the cities of Caloocan, Las
Pias, Makati , Malabon, Mandaluyong,
Manila, Marikina, Muntinlupa, Navotas
,Paraaque, Pasay, Pasig, Quezon, San Juan,
Taguig, Valenzuela, and in themunicipality of
Pateros.
Meanwhile, a compensation of six
hundred fifty pesos (P650.00)a month is
required for househelpers in other chartered
citiescities other than Manila, Pasay,
Quezon, and Caloocanhighly urbanized
cities, and first -class municipalities. On the
other hand, a compensation of five hundred
fifty pesos (P550.00) a month is required for
househelpers in other municipalities.
Househelpers who are receiving at
least one thousand pesos (P1,000.00) a month
shall be covered by the Social Security System
and shall be entitled to all the benefits
provided therein.
Employers
shall
review
the
employment contracts of their househelpers
every three (3) years with the end in view of
improving the terms and conditions thereof.
Page 27 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

N. Apprentices and Learners
1.
4. Which shall not exceed 3 months; and

5. Whether or not such practical training
is
supplemented
by
theoretical
instructions. (Sec. 1a, Rule VII, Book II,
Apprentices
IRR)
Who is an apprentice?
Any worker who is covered by a
written apprenticeship agreement with an
individual employer or any of the entities
recognized under the Labor Code.
When may learners be employed?

a. When no experienced worker is
available
b. It is necessary to prevent curtailment of
employment opportunities; and
c. Employment does not create unfair
competition in terms of labor costs or
impair or lower working standards.
What is apprenticeship?
It is practical training on the job
supplemented
by
related
theoretical
instruction.
What is an apprenticeable occupation?
It requires more than 3 months of
practical training with theoretical instruction.
What is on the job training (OJT)?
What is a learnership agreement?

Any employer desiring to employ
learners shall enter into a learnership
agreement with them,which agreement shall
include:
It is practical work experience through

actual participation in productive activities
given to or acquired by an apprentice.
1.
The names and addresses of the

learners;
2. The duration of the learnership period,
which shall not exceed 3 months;
3. The wages or salary rates of the
learners which shall begin at not less
than 75% of the applicable minimum
wage; and
4. A commitment to employ the learners
if they so desire, as regular employees
upon completion of the learnership.
What is the wage rate of an apprentice?

Start at not less than 75% of the
statutory minimum wage for the 1st 6 months
(except OJT); thereafter, shall be paid in full
minimum wage, including the full COLA.
Note: Apprenticeship programs shall
be primarily voluntary.
What are the rules on working scholars?
There is no EmployerEmployee
relationship between students on one hand,
and schools, where there is written agreement
between them under which the former agree
to work for the latter in exchange for the
privilege to study free of charge. The student is
not considered an employee. (Sec. 14, Rule IX,
What is the status of learners who have been

allowed or suffered work during the first 2
months, if training is terminated by the
Employer before the end of the stipulated
period through no fault of the learner?
They are deemed regular employees.
(Sec. 4, RuleVII, Book II, IRR)
Book III, IRR)

2. Learners
1.
They are persons hired as trainees in

semi-skilled and other industrial
occupations;
2. Which are non-apprenticeable;
3. Which may be learned through
practical training on the job in a
relatively short period of time;
Page 28 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Distinguish Learnership from Apprenticeship
Learnership
Distinction between handicapped and disabled
Apprenticeship
Nature
Handicapped
Training in trades
Training on the job in
which
are
semi-skilled and other
apprenticeable, that
industrial occupation or
is, practical training
trades which are nonon
the
job
apprenticeable
supplemented by
and which may be
related theoretical
learned thru practical
instruction
for
training on the job in a
more
than
3
relatively short period
months.
of time
Covers
workers.
Duration of training
Max: 3 months Min: 3
months
Max: 6 months
loss or Basis: range of activity

impairment
of which is normal for a
earning capacity. human being.
No commitment to
Hire
In case of pretermination of contract

Considered a regular
employee
if
pretermination occurs
after 2 months of
training
and
the
dismissal is without fault
of the learner.
Worker not
considered as
regular employee
Coverage
Highly technical
industries and only
in industrial
occupation
Semi-skilled/Industrial
occupations
There is
learnable
TESDA
a list
trades
of
by
Loss
due
to
injury or physical
or mental defect
or age.
If hired, entitled
to
75%
of
minimum wage.
Subject
to
definite periods
of employment.
Employable only
when necessary
to
prevent
curtailment of
employment
opportunity.
Restriction due to
impairment of
mental/physical/
sensory defect.
If qualified, entitled to
all terms and
conditions as qualified
able-bodied person.
No restrictions on
employment.
Must get equal
opportunity and no
unfair competition.
Who are handicapped workers?
No list
Written agreement
Requires Learnership
Agreement
only
Basis:
Commitment to employ
With commitment to
employ the learner as a
regular employee if he
desires upon completion
of learnership
Earning capacity
is
impaired by age,
or physical or
mental
deficiency
or
injury.
Disabled
(Differently Abled)
Refers to all suffering
from restriction of
different abilities as a
result of mental,
physical or sensory
impairment to
perform an activity in
the manner or within
range considered
normal for a human
being.
Covers all activities or
endeavors.
Requires
Apprenticeship
Agreement
O. Persons with disability (R.A. No. 7277, as

amended by R.A. No. 9442)
Those whose earning capacity

impaired by:
1. Physical deficiency;
2. Age;
3. Injury;
4. Disease;
5. Mental deficiency; and
6. Illness.
is
What is the duration of the employment

period of handicapped workers?
a. Definition
Persons with disability refer to those
who are suffering from certain limitations to
perform an activity in the manner considered
normal for a human being, as a result of
mental, physical or sensory impairment (Sec. 4
(a), RA 9442).
There is no minimum or maximum

duration. It depends on the agreement but it is
necessary that there is a specific duration
stated.
Page 29 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

May handicapped workers
apprentices or learners?
be
hired
as
What is the prohibition on discrimination

against disabled workers?
Yes, if their handicap is not such as to

effectively impede the performance of job
operations in the particular occupations for
which they are hired Art. 81).
No disable person shall be denied

access
to
opportunities
for
suitable
employment. A qualified disabled employee
shall be subject to the same terms and
conditions of employment and the same
compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified
able bodied person.
Can a handicapped workers acquire the status

of a regular Employee?
Yes, if work is usually or necessarily or
desirable to the business. (Bernardo v. NLRC,
G.R No. 122917, July 12, 1999)
Who may employ handicapped workers?

Employers in all industries. Provided,
the handicap is not such as to effectively
impede the performance of job operations in
the particular occupations for which they are
hired.
When can handicapped workers be employed?
1. When their employment is necessary
to prevent curtailment of employment
opportunities; and
2. When it will not create unfair
competition in labor costs or lower working
standards.(Art.79)
b. Rights of disabled workers
What are the rights and privileges of disabled
workers?
1.
2.
3.
4.
5.
Equal
opportunity
for
employment;
Sheltered employment (the govt
shall endeavour to provide them
work if suitable employment for
disabled persons cannot be found
through open employment);
Apprenticeship;
Vocational rehabilitation (means to
develop the skills and potentials of
disabled workers and enable them
to compete in the labor market);
and
Vocational
guidance
and
counseling.
c. Prohibitions on discrimination against

disabled persons
Five percent (5%) of all casual

emergency and contractual positions in the
Departments
of
Social
Welfare
and
Development; Health; Education, Culture and
Sports; and other government agencies, offices
or corporations engaged in social development
shall be reserved for disabled persons.
d. Incentives for employers
What are the incentives provided for
employers in employing disabled workers?
1. Entitled to an additional deduction,
from their gross income, equivalent to twentyfive percent (25%) of the total amount paid as
salaries and wages to disabled persons:
Provided, however, That such entities present
proof as certified by the Department of Labor
and Employment that disabled persons are
under their employ: Provided, further, That
the disabled employee is accredited with the
Department of Labor and Employment and
the Department of Health as to his disability,
skills and qualifications; and
2. Private entities that improve or
modify their physical facilities in order to
provide reasonable accommodation for
disabled persons shall also be entitled to an
additional deduction from their net taxable
income, equivalent to fifty percent (50%) of
the direct costs of the improvements or
modifications.
IV. Termination of Employment

A. Employer-Employee Relationship
What determines the existence
employment relationship?
Page 30 of 72
BAR OPERATIONS 2015
of
an
Green Notes 2015
Labor Law

It is determined by law and not by
contract. Whether or not an Er-Ee relationship
exists between the parties is a question of fact.
In this regard, the findings of the NLRC are
accorded not only respect but finality if
supported by evidence.
Note: Taxi or jeepney drivers under
the boundary system are Ees of the taxi or
jeepney owners/operators; so also the
passenger bus drivers and conductors (Jardin
vs. NLRC and Goodman Taxi, G.R. No.
119268, Feb. 23, 2000).
1. Four Fold Test
In determining whether a given set of
circumstances constitute or exhibit an
employer-employee relationship, the accepted
rule is that the elements or circumstances
relating to the following matters shall be
examined and considered:
a. selection and engagement of the
employees;
b. payment of wages;
c. power of dismissal; and
d. power to control the employees
conduct.
NOTE: The control test is the most crucial
and determinative indication of the presence
or absence of an employer-employee
relationship. Absence of such despite the
presence of the other three elements will not
suffice for the relationship to exist. Not every
form of control will have the effect of
establishing
an
employer-employee
relationship.
A line should be drawn between:
a. Rules that merely serves as
guidelines, which only promote the result. In
such case, no employer-employee relationship
exists; and
b. Rules that fix the methodology and
bind or restrict the party hired to the use of
such means of methods. These address both
the result and means employed to achieve it
and hence, employer-employee relationship
exist.
What is control test?
the end to be achieved but also the means to

be used in reaching such end.
Note: However, in certain cases the
control test is not sufficient to give a complete
picture of the relationship between the parties,
owing to the complexity of such a relationship
where several positions have been held by the
worker. The better approach is to adopt the
two-tiered test (Francisco vs. NLRC, G.R. No.
170087, Aug. 31, 2006).
What is the two-tiered test?

1. The putative Ers power to control
the Ee with respect to the means and methods
by which the work is to be accomplished; and
2. The underlying economic realitiesof
the activity or relationship.
Note: This two-tiered test would
provide us with a framework of analysis,
which would take into consideration the
totality of circumstances surrounding the true
nature of the relationship between the parties.
This is especially appropriate in this case where
there is no written agreement or terms of
reference to base the relationship on and due
to the complexity of the relationship based on
the various positions and responsibilities given
to the worker over the period of the latters
employment (Francisco vs. NLRC, G.R. No.
170087, Aug. 31, 2006).
What is the proper standard for economic

dependence?
The proper standard is whether the
worker is dependent on the alleged employer
for his continued employment in that line of
business.
2. Kinds of Employment
a) Probationary Employment
Probationary employment exists where
the employee, upon his engagement is made
to undergo a trial period during which the
employer determines his fitness to qualify for
regular employment based on reasonable
standards made known to him at the time of
his engagement (Art 282, LC).
The person for whom the services are

performed reserves a right to control not only
Page 31 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

What are the characteristics of probationary
employment?
1. It is an employment for a trial period;
2. It is a temporary employment status
prior to regular employment;
3. It arises through a contract with the
following elements:
4. The employee (Ee) must learn and
work at a particular type of work
5. Such
work
calls
for
certain
qualifications
6. The probation is fixed
7. The Er reserves the power to terminate
during or at the end of the trial period
8. And if the Ee has learned the job to the
satisfaction of the Er, he becomes a
regular Ee.
General Rule: It shall not exceed 6 months.

Exceptions:
2.
3.
4.
5.
No. The evil sought to be prevented is

to discourage scheming employers from using
the system of double or successive probation
to circumvent the mandate of the law on
regularization and make it easier for them to
dismiss their employees. (Holiday Inn Manila
v. NLRC, G.R. No. 109114, Sep. 14, 2003)
A probationary employee may be terminated

on two grounds:
1. Just/authorized causes; or
2. When he fails to qualify as a regular
Ee in accordance with reasonable standards
made known by the employer (Er) to the Ee at
the time of his engagement (ICMC v. NLRC,
G.R. No. 72222, Jan. 30, 1989)
What is the period of probationary

employment?
1.
Is double or successive probation allowed?
Covered by an apprenticeship or
learnership agreement stipulating a
different period;
Voluntary
agreement
of
parties
(especially when the nature of work
requires a longer period);
The Er gives the(Ee a second chance to
pass the standards set. (Mariwasa
Manufacturing, Inc. v. Leogardo, Jr.,G.R.
No. 74246, Jan. 26, 1989);
When the same is required by the nature
of the work, e.g. the probationary
period set for professors, instructors and
teachers is 3 consecutive years of
satisfactory service pursuant to DOLE
Manual of Regulations for Private
Schools.
When the same is established by
company policy.
Note: Period of probation shall be reckoned

from the date the Ee actually started working
(Sec.6 [b], Rule I, Book VI, IRR). After the
lapse of the probationary period (6 months),
Ee becomes regular. Probationary Ees may be
dismissed before end of the probationary
period.
Note: While probationary Ees do not

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

powers to terminate a probationary
employment contract?
1. The power must be exercised in
accordance with the specific requirements of
the contract;
2. If a particular time is prescribed, the
termination must be within such time and if
formal notice is required, then that form must
be used;
3. The Ers dissatisfaction must be real
and in good faith, not feigned so as to
circumvent the contract or the law; and
4. There must be
discrimination in the dismissal
no
unlawful
Note: The probationary employee is

entitled to procedural due process prior to
dismissal from service.
Page 32 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

b) Regular Employment
What is regular employment?
1. An employee is deemed to be
regular where he has been engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of the
employer, the provisions of written agreement
to the contrary notwithstanding and regardless
of the oral agreement of the parties (Art. 280,
LC);
2. 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.
The test is whether the former is usually
necessary or desirable in the usual business or
trade of the employer. The connection can be
determined by considering the nature of the
work performed and its relation to the scheme
of the particular business or trade in its
entirety.
What is the
employment?
test
to
determine
regular
1. The primary standard of determining

regular employment is the reasonable
connection between the particular activity
performed by the employee (Ee) to the usual
trade or business of the employer. The test is
whether the former is usually necessary or
desirable in the usual business or trade of the
Er (De Leon v. NLRC, G.R. No. 70705, Aug.
21, 1989).
Note: The connection can be

determined by considering the nature of the
work performed and its relation to the scheme
of the particular business or trade in its entirety
(Highway Copra Traders v. NLRC, G.R. No.

108889, July 30, 1998).
2. Also, the performance of a job for

at least a year is sufficient evidence of the jobs
necessity if not indispensability to the business.
This is the rule even if its performance is not
continuous and merely intermittent. The
employment is considered regular, but only
with respect to such activity and while such
activity exists (Universal Robina Corp. v.
day immediately after the end of his first year

of service. The law does not provide the
qualification that the Ee must first be issued a
regular appointment or must first be formally
declared as such before he can acquire a
regular status. (Aurora Land Projects Corp. v.
NLRC, G.R. No. 114733, Jan. 2, 1997)
May route helpers be considered as regular

employees?
Yes, the Court categorically declared
that the nature of work of route helpers hired
by Coca-Cola Bottlers Phils., Inc. is necessary
and desirable in its usual business or trade
thereby qualifying them as regular employees,
to wit; Coca-Cola Bottlers Phils., Inc., is one
of the leading and largest manufacturers of
softdrinks in the country. Respondent workers
have long been in the service of petitioner
company. Respondent workers, when hired,
would go with route salesmen on board
delivery trucks and undertake the laborious
task of loading and unloading softdrink
products of petitioner company to its various
delivery points. (Basan, et. Al. vs. Coca-Cola
Bottlers Philippines, G.R. No. 174365-66,
February 4, 2015).
c) Project Employment
It is where the employment has been
fixed for a specific project or undertaking the
completion or termina-tion of which has been
determined at the time of the engagement of
the employee (Art. 286, Labor Code).
What are the
Employment?
indicators
of
Project
Either one or more of the following

circumstances, among others, may be
considered as indicators that an employee is a
project employee:
a.
The
duration
of
the
specific/identified undertaking for which the
worker is engaged is reasonably determinable;
Catapang, G.R. No. 164736, Oct. 14, 2005).
b. 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.
Note:
The
status
of
regular
employment attaches to the casual Ee on the
Note: Absent any other proof that the

project employees were informed of their
Page 33 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

status as such, it will be presumed that they are
regular employees.
c. The work/service performed by the
employee is in connection with the particular
project/undertaking for which he is engaged;
d. The employee, while not employed
and awaiting engagement, is free to offer his
services to any other employer;
e. The termination of his employment
in the particular project/undertaking is
reported to the Department of Labor and
Employment
Regional
Office
having
jurisdiction over the workplace within 30 days
following the date of his separation from
work, using the prescribed form on employees
termination or dismissal or suspensions; and
A project employee is one whose

termination of his employment contract is
reported to the DOLE everytime the project
for which he was engaged has been completed
(Manalo, et al. vs. TNS Philippines, Inc., G.R.
No. 208567, November 26, 2014).
f. An undertaking in the employment
contract by the employer to pay completion
bonus to the project employee as practiced by
most construction companies.
What are the requisites in determining whether
an employee (Ee) is a project Ee?
1. The project Ee was assigned to carry
out a specific project or undertaking, and
2. The duration and scope of which
were specified at the time the Ee was engaged
for that project. (Imbuido v. NLRC, G.R. No.
114734, Mar. 31, 2000)
3. The Ee must have been dismissed

every after completion of his project or phase;
and
4. Report to the DOLE of Ees dismissal
on account of completion of contract (Policy
Inst. No. 20; D.O. 19 [1997])

What is a project?
A "project" has reference to a particular

job or undertaking that may or may not be
within the regular or usual business of the Er.
In either case, the project must be distinct,
separate and identifiable from the main

business of the Er, and its duration must be
determined or determinable (PAL v. NLRC,
G.R. No. 125792, Nov. 9, 1998).
Distinguishable Types of Project Activities

(ALU-TUCP vs. NLRC, 234 SCRA 328):
1. A particular job or undertaking that
is WITHIN THE REGULAR OR USUAL
BUSINESS of the employer company, but
which is DISTINCT and SEPARATE, and
IDENTIFIABLE as such, from the other
undertakings of the company. Such job or
undertaking begins and ends at determined or
determinable times.
e.g. A construction company which has
construction projects in Manila, Mandaluyong
and Baguio.
2. A particular job or undertaking that
is NOT WITHIN THE REGULAR BUSINESS of
the corporation. Such a job or undertaking
must also be IDENTIFIABLY SEPARATE and
DISTINCT from the regular business. The job
or undertaking also begins and ends at
determined or determinable times.
e.g.
A
steel-making
company
undertakes projects related to breeding and
production of fish or cultivation of vegetables.
General Rule: LENGTH OF SERVICE is not
controlling in project employment (Hilario
Rada vs. NLRC, 205 SCRA 69).
Exception: Although the work to be
performed is only for a SPECIFIC PROJECT or
SEASONAL, where a person thus engaged has
been performing the job for at least one year,
even if the performance is not continuous or is
merely intermittent, the law deems the
REPEATED and CONTINUING NEED FOR ITS
PERFORMANCE as being sufficient to indicate
the necessity or desirability of that activity to
the business or trade of the employer. The
employment of such person is also then
deemed to be REGULAR WITH RESPECT TO
SUCH ACTIVITY and WHILE SUCH ACTIVITY
EXISTS (Magsalin, et.al. vs. National
Organization of Working Men, et al., May 9,
2003).
Page 34 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

d) Seasonal Employment
Seasonal workers are those who are
called to work from time to time according to
the occurrence of varying need during a
season, and are laid off after completion of the
required phase of work.
specific date of termination. The determining

factor of such contracts is not the duty of the
employee but the day certain agreed upon by
the parties for the commencement and
termination of the employment relationship
(Fonterra Brands Phils. Inc. vs. Largado, G.R.
No. 205300, March 18, 2015).
Seasonal workers who works for more

than one season are deemed to have acquired
regular employment.
3. Job Contracting
Seasonal workers during the off season

are merely considered on leave. They are also
entitled to separation pay.
1. Labor-only contracting
e) Casual Employment
It is one wherein an employee is
engaged to perform activities which are not
necessary or desirable in the usual trade or
business of the employer.
f) Fixed-term
It is a contract of employment for a
definite period which terminates by its own
terms at the end of such period (Brent School
vs. Zamora, 181 SCRA 702).
Criteria for fixed term employment
contracts so
that the same will not
circumvent security of tenure (Phil. National
Oil Company-Energy Development Corp. vs.
NLRC, et al., 239 SCRA 272):
1. The fixed period of employment
was knowingly and voluntarily agreed upon
by the parties, without any force, duress or
improper pressure being brought to bear upon
the employee and absent any other
circumstances vitiating his consent; or
2. It satisfactorily appears that the
employer and employee dealt with each other
on more or less equal terms with no moral
dominance whatever being exercised by the
former on the latter.
Are fixed-term employment contracts limited?
No, fixed-term employment contracts
are not limited. As they are under the present
Labor Code, to those by nature seasonal or for
specific projects with predetermined dates of
completion; they also include those to which
the parties by free choice have assigned a
Job Contracting and Labor-Only Contracting
a. the person supplying workers to an

employer does not have substantial capital or
investment in the form of tools, equipment,
machineries, work premises, among others;
and
b. the workers recruited and placed by
such person are performing activities which are
directly related to the principal business of such
employer (Baguio, et.al vs. NLRC, et al., 202
SCRA 465)
2. Job Contracting
a. the contractor caries on an
independent business and undertakes the
contract work on his own account and under
his own responsibility according to his own
manner and method, free from the control
and direction of his employer or principal in
all matters connected with the performance of
the work except as to the results thereof; and
b. the contractor has substantial capital
or investment in the form of tools, equipment,
machineries, work premises, and other
materials which are necessary in the conduct of
his business.
Who is the employer in a Job Contractorship?
The contractor is the employer, i.e.,
for purposes of security of tenure. For unpaid
wages and benefits, the principal is solidarily
liable (Meralco Industrial Engineering Services
Corp. vs. NLRC, G.R. No. 145402, March 14,
2008).
What are the evidence of Job Contractorship?
1. Certificate of Business Registration;
2. Certificate of Registration with the
Bureau of Internal Revenue;
Page 35 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

3. Mayors Permit;
4. Certificate of Membership with the
Social Security System;
5. Certificate of Registration with the
Department
of
Labor
and
Employment;
6. Company Profile; and
7. Certifications issued by its clients
(Fonterra Brands Phils. Inc. vs.
Largado, G.R. No. 205300, March 18,
2015).
Distinguish between job contracting and labor
only contracting
Labor-Only
Job Contracting
Contracting
Liability is limited
(shall be solidarily
Liability extends to all
liable with Er only
those provided under
when the Er fails to
the Labor Standards
comply with reqts as
law
to unpaid wages and
other labor standards
violations)
Permissible,
subject
Prohibited by Law
only
to
certain
conditions
The contractor has
Has no substantial
substantial capital or
capital or investment
investment
What is the effect for failure of owner of
project to require the contractor to post bond?
The owner of the project must answer
for whatever liabilities the contractor may
have incurred to his employees; without
prejudice on the part of the project owner to
seek reimbursement from the contractor
(Baguio, et al. vs. NLRC).
a. Article 106 to Article 109 of the Labor Code
b. Department Order No. 18-A
c. Department Circular No. 01-12
d.
Effects
of
Labor-only
Contracting
1. The subcontractor will be treated as
the agent of the principal, and representations
by the subcontractor to the employees will
bind the principal;
2. The principal will become the
employer as if it directly employed the
workers, and will be responsible for all their
entitlements and benefits under the labor laws;
3. The principal and the subcontractor

will be solidarily treated as the employer; and
4. The employees will become
employees of the principal, subject to the
classifications of employees under Article 280
of the Labor Code. (Department order no. 18A, s. 2011)
e. Trilateral Relationship in Job Contracting
Trilateral Relationship refers to the
relationship in a contracting or subcontracting
arrangement where there is a contract for a
specific job, work or service between the
principal and the contractor, and a contract of
employment between the contractor and its
workers. There are three (3) parties involved
in these arrangements: the principal who
decides to farm out a job, work or service to a
contractor; the contractor who has the
capacity to independently undertake the
performance of the job, work or service; and
the contractual workers engaged by the
contractor to accomplish the job, work or
service (Section 3 (m), Dept. order No. 18 A)
Trilateral relationship in contracting
arrangements; Solidary Liability
In
legitimate
contracting
subcontracting arrangement there exists:
or
1. An employer-employee relationship
between the contractor and the employees it
engaged to perform the specific job, work or
service being contracted; and
2. A contractual relationship between
the principal and the contractor as governed
by the provisions of the Civil Code. In the
event of any violation of any provision of the
Labor Code, including the failure to pay
wages, there exists a solidary liability on the
part of the principal and the contractor for
purposes of enforcing the provisions of the
Labor Code and other social legislation, to the
extent of the work performed under the
employment contract. However, the principal
shall be deemed the direct employer of the
contractors employee in cases where there is a
finding by a competent authority of labor-only
contracting, or commission of prohibited
activities as provided in Section 7, or a
violation of either Sections 8 or 9 hereof.
(Secton 5, Dept. order No. 18-A)
Page 36 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

B. Dismissal from employment
b. Sufficiently made known to the Ee

c. Must pertain to or be in connection
with the duties which the Ee has been
engaged to discharge. (Cosep V. NLRC,
1. Just causes
What are the just causes for termination (Art.
282, LC)?
1. Serious misconduct or willful
disobedience by the employee (Ee) of the
lawful orders of his employer (Er) or
representative in connection with his work;
2. Gross and habitual neglect by the Ee
of his duties;
3. Fraud or willful breach by the Ee of
the trust reposed in him by his Er or duly
organized representative;
4. Commission of a crime or offense
by the Ee against the person of his Er or any
immediate member of his family or his duly
authorized representative; and
5. Other causes analogous to the
foregoing.
Note: The burden of proving that the
termination was for a valid or authorized
cause shall rest on the Er. (Art. 277[b])
What are the elements of serious misconduct?
G.R. No. 124966 June 16, 1998)
Note: There is no law that compels an

Ee to accept a promotion for the reason that a
promotion is in the nature of a gift or reward,
which a person has the right to refuse. The
exercise of the Ee of the right to refuse a
promotion cannot be considered in law as
insubordination or willful disobedience (PT&T
Corp. v. CA, G.R. No. 152057, Sep. 29,

2003).
When is there Gross Negligence?
Gross negligence implies a want or

absence of or failure to exercise slight care of
diligence of the entire absence of care it
evinces thoughtless disregard of consequences
without exerting any effort to avoid them.
However, such neglect must not only be gross
but habitual in character. (Judy Phils. v. NLRC,
G.R. No. 111934, April 29, 1998)
What are the requirements for a valid finding

of abandonment?
For a valid finding of abandonment, 2
factors must be present:
1. It must be serious or of such a grave

aggravated character;
1. The failure to report for work, or

absence without valid or justifiable reason; and
2. Must relate to the performance of

the employees (Ee) duties;
2. A clear intention to sever Er-Ee

relationship, with the 2nd element as the more
determinative factor, being manifested by
some overt acts. (Sta. Catalina College s.
NLRC, G.R. No. 144483, Nov. 19, 2003)
and
3. Ee has become unfit to continue

working for the employer. (Philippine Aeolus
Automotive United Corp. v. NLRC, G.R. No.
124617, April 28, 2000)
When is willful disobedience of the Ers lawful
orders a just cause for termination?
2 requisites must concur:
1. The employees (Ees) assailed
conduct must have been willful or intentional,
the willfulness being characterized by a
wrongful and perverse attitude.
2. The disobeyed orders, regulations or
instructions of the Er must be:
a. Reasonable and lawful
When is breach of trust/loss of confidence a

just cause for termination?
1. It applies only to cases involving:
a. Employees (Ees) occupying positions
of trust and confidence (confidential and
managerial Ees) to this class belong
managerial Ees, i.e., those vested with the
powers or prerogatives to lay down

management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline Ees or effectively recommend such
managerial actions; and
Page 37 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

b. Ees routinely charged with the care
and custody of the employers (Ers) money or
property to this class belong cashiers,
auditors, property custodians, etc., or those

who, in the normal and routine exercise of
their functions, regularly handle significant
amounts of money or property. (Mabeza v.
NLRC, G.R. No. 118506 April 18, 1997);
2. The loss of trust and confidence must be

based on willful breach;
Note: A breach is willful if it is done
intentionally, knowingly, and purposely
without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently (De la Cruz v.
NLRC, G.R. No. 119536, Feb. 17, 1997)
3. The act constituting the breach must be

work--related such as would show the Ee
concerned to be unfit to continue working for
the Er (Gonzales V. NLRC, G.R. No. 131653,
Mar. 26, 2001);
4. It must be substantial and founded on

clearly established facts sufficient to warrant
the Ees separation from employment (Sulpicio
Lines Inc. V. Gulde, G.R. No. 149930, Feb. 22,

2002); and
5. Fraud must be committed against the Er or

his representatives.
Note: The treatment of rank and file
personneland managerial Ees in so far as the
application of the doctrine of loss of trust and
confidence is concerned is different. As regards
managerial Ees, such as Caoile, mere existence
of a basis for believing that such Ee has
breached the trust of his Er would suffice for
his dismissal (Caoile v. NLRC, G.R. No. 115491,
Nov. 24, 1998)
What are the guidelines for the doctrine of loss

of confidence to apply?
1. Loss of confidence should not be
simulated (reasonable basis for loss of trust and
confidence);
2. Not used for subterfuge for causes
which are improper and/or illegal and
unjustified;
3. Not arbitrarily asserted in the face
of overwhelming evidence to the contrary;
4. Must be genuine, not a mere

afterthought to justify earlier action taken in
bad faith; and
5. The Ee involved holds a position of
trust and confidence.
Note: The breach of trust must rest on
substantial grounds and not on the Ers
arbitrariness, whims, caprices, or suspicion;
otherwise, the Ee would eternally remain at
the mercy of the Er. It should be genuine and
not simulated, nor should it appear as a mere
afterthought to justify earlier action taken in
bad faith of a subterfuge for causes which are
improper, illegal, or unjustified. It has never
been intended to afford and occasion for
abuse because of its subjective nature. There
must, therefore, be an actual breach of dully
committed by the employee which must be
established by substantial evidence.
What is required for an act to be included in
analogous cases of just causes of termination?
Must be due to the voluntary and/or
willful act or omission of the employee
(Nadura v. Benguet Consolidated, G.R. No. L17780, Aug. 24, 1962)

What is the doctrine of incompatibility?
Where the employee has done
something that is contrary or incompatible
with the faithful performance of his duties, his
employer has a just cause for terminating his
employment. (Manila Chauffeurs League v.
Bachrach Motor Co., G.R. No.L-47071, June

17, 1940 )
2. Authorized Causes
What are the authorized causes of termination
by the employer (Er)?
1. Installation of labor-saving devices
(automation/robotics)
2. Redundancy (superfluity in the

performance of a particular work) exists
where the services of an employee (Ee) are in
excess of what is reasonably demanded by the
actual requirements of the enterprise.
(Wiltshire File Co., Inc. v. NLRC, G.R. No.

82249, Feb. 7, 1991)
Page 38 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Note: The redundancy should not have been
created by the Er.
5. Relocation of business to a distant

place;
6. Defiance of return-to work-order;
7. Commission of Illegal acts in strike;
8. Violation of contractual agreement;
and
9. Retirement.
3. Reorganization
Note: An Er is not precluded from
adopting a new policy conducive to a more
economical and effective management, and
the law does not require that the Er should be
suffering financial losses before he can
terminate the services of the employee on the
ground of redundancy (DOLE Phil., Inc. v.
NLRC, G.R. No. L-55413, July 25, 1983)
4. Retrenchment cutting of expenses
and includes the reduction of personnel; It is a
management prerogative, a means to protect
and preserve the Ers viability and ensure his
survival. To be an authorized cause it must be
affected in good faith (GF) and for the
retrenchment, which is after all a drastic
recourse with serious consequences for the
livelihood of the Ees or otherwise laid-off.
Note: The phrase to prevent losses
means that retrenchment or termination from
the service of some Ees is authorized to be
undertaken by the Er sometime before the
anticipated losses are actually sustained or
realized. Evidently, actual losses need not set
in prior to retrenchment. (Cajucom VII v. TP
Phils Cement Corp., et al, G.R. No. 149090,

Feb. 11, 2005)
5. Closing or cessation of operation of

the establishment or undertaking must be
What are the procedural steps required in

termination of an employee for authorized
causes?
1. Written Notice to DOLE 30 days
prior to the intended day of termination;
Purpose: To enable it to ascertain the

verity of the cause of termination.
2. Written notice to Ee concerned 30
days prior the intended date of termination;
3. Payment of separation pay -Serious
business losses do not excuse the Er from
complying with the clearance or report
required in Art. 283 of the LC and its IRR
before terminating the employment of its
workers. In the absence of justifying
circumstances, the failure of the Er to observe
the procedural reqts under Art. 284 taints
their actuations with bad faith if the lay-off
was temporary but then serious business losses
prevented the reinstatement of respondents,
the Ers should have complied with the require
ents of written notice.
What are the requisites of a valid redundancy?
done in good faith and not for the purpose of

circumventing pertinent labor laws.
6. Disease must be incurable within 6

months and the continued employment is
prohibited by law or prejudicial to his health
as well as to the health of his co-Ees with a
certification from the public health officer that
the disease is incurable within 6 months
despite due to medication and treatment.
What are other authorized causes?
1.
2.
3.
4.
1.
Valid application of union security

clause;
2. Expiration of period in term of
employment;
3. Completion of project in project
employment;
4. Failure in probation;
5.
6.
7.
Page 39 of 72
BAR OPERATIONS 2015
Written notice served on both the

employees (Ees) and the DOLE at
least 1 month prior to separation
from work;
Payment
of
separation
pay
equivalent to at least 1 month pay
or at least 1 month pay for every
year of service, whichever is
higher;
Good faith in abolishing redundant
position;
Fair and reasonable criteria in
ascertaining what positions are to
be declared redundant;
Less
preferred
status,
e.g.
temporary Ee;
Efficiency; and
Seniority.
Green Notes 2015
Labor Law
5. The employer used fair and reasonable
What are the circumstances that must be

present for a valid retrenchment?
criteria in ascertaining who would be

retained among the Ees, such as status,
efficiency, seniority, physical fitness,
age, and financial hardship of certain
workers (Asian Alcohol Corp. v. NLRC,
1. 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;
2. The substantial loss apprehended
reasonably imminent -as such
imminence can be perceived objectively and in
good faith by the employer (Er). There should
be a certain degree of urgency for the
retrenchment;
must
be
3. It must be reasonably necessary and

likely to prevent the expected losse -The Er
should have taken other measures prior or

parallel to retrenchment to forestall losses such
as cutting other costs than labor costs;
4. 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 readily
apparent: any less exacting standard of proof
would render too easy the abuse of this
ground for termination of services of
employees (Lopez Sugar Corp. v. Federation
of Free Workers, G.R. No. 75700-01, Aug. 30,
1990).
G.R. No. 131108, Mar. 25, 1999).

What is the last in first out (LIFO) rule?
It applies in the termination of

employment in the line of work. What is
contemplated in the LIFO rule is that when
there are two or more Ees occupying the same
position in the company affected by the
retrenchment program, the last one employed
will necessarily be the first one to go (Maya
Farms Ees Organization v. NLRC, G.R. No.

106256, Dec. 28, 1994).
What is the difference between redundancy

and retrenchment?
In redundancy, company has no
financial problems, unlike in retrenchment
where the company will suffer financial losses.
What are the requisites of a valid closure?
1.
2.
Note: The losses which the company

may suffer or is suffering may be proved by
financial statements audited by independent
auditors (Asian Alcohol Corporation v. NLRC,
3.
4.
5.
G.R. No. 131108, Mar. 25, 1999)
Retrenchment is a means of last resort.

What are the
retrenchment?
1.
requisites
of
valid
Written notice served on both the Ee

and the DOLE at least 1 month prior to
the intended date of retrenchment
2. Payment of separation pay equivalent
to at least one month pay or at least
1/2 month pay for every year of
service, whichever is higher;
3. Good faith;
4. Proof of expected or actual losses; and
Written notice served on both the

employees (Ees) and the DOLE at least
1 month prior to the intended date of
closure;
Payment of separation pay equivalent
to at least one month pay or at least
1/2 month pay for every year of
service, whichever is higher, except
when closure is due to serious business
losses;
Good faith;
No circumvention of the law; and
No other option available to the Er.
What is the difference

retrenchment?
Closure
Is the reversal of
fortune of the Er
whereby there is a
between closure and
Retrenchment
Is the reduction of
personnel for the
purpose of cutting
complete cessation of down on costs of
business operations to operations in terms of
prevent
further salaries and wages
financial drain upon resorted to by an Er
an Er who cannot pay because of losses in
anymore his Ees since operation
of
a
business has already business
occasioned
stopped.
by lack of work and
Page 40 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

considerable
reduction
in
the
volume of business.
As in the case of
retrenchment,
however, for the
closure of a business
or a department due
One
of
the to
prerogatives
of serious business losses
management is the to be regarded as an
decision to close the authorized cause for
entire establishment terminating Ees, it
or to close or abolish must be proven that
a
department
or the losses
incurred
section thereof for are substantial and
economic
reasons, actual or reasonably
such as to minimize imminent; that the
expenses and reduce same
increased
capitalization.
through a period of
time; and that the
condition
of
the
company is not likely
to improve in the
near future.
Does not obligate the LC provides for the
Er for the payment of payment
of
separation package if separation package in
there is closure of case of retrenchment
business
due
to to prevent losses.
serious losses.
When is disease a ground for dismissal?
a) Where the Ee suffers from a disease,
and:
b) His
continued
employment
is
prohibited by law or prejudicial to his
health or to the health of his co-Ees
(Sec.8, Rule I, Book VI, IRR)
c) With a certification by competent
public health authority that the disease
is incurable within 6 months despite
due medication and treatment. (Solis
v. NLRC, GR
28,1996)
No. 116175, Oct.
Note: The reqt for a medical

certification cannot be dispensed with;
otherwise, it would sanction the unilateral and
arbitrary determination by the Er of the
gravity or extent of the Ees illness and thus
defeat the public policy on the protection of
labor. (Manly Express v Payong, G.R. No.
167462, Oct.25, 2005)
Termination of services for health

reasons must be effected only upon
compliance with the above requisites. The

requirement for a medical certificate under Art.
284 of the LC cannot be dispensed with;
otherwise, it would sanction the unilateral and
arbitrary determination by the Er of the
gravity or extent of the Ees illness and thus
defeat the public policy on the protection of
labor. (Sy et. al v. CA, G.R. No. 142293, Feb.
27, 2003)
Discuss the rules on separation pay with regard

to each cause of termination.
Cause
of
Termination Pay
Separation
Equivalent to at least 1
month pay or at least 1
Automation
month pay for every year
of service, whichever is
higher
Redundancy
of service, whichever is
higher
RetrenchEquivalent to 1 month pay
ment
or at least month pay for
every year or service
Closures or
cessation of
operation not
due to serious
business
losses/
financial
reverses
Disease
of service (if due to severe
financial
losses,
no
separation pay
Equivalent
month pay
month pay
of service,
higher
to at least 1
or at least
for every year
whichever is
Note: A fraction of at least 6 months

shall be considered 1 whole year. There is no
separation pay when the closure is due to an
act of the government.
3. Due Process
a. Twin-notice requirement
1) Notice which apprises the employee
of the particular acts or omissions for which his
dismissal is sought; and
(2) The subsequent notice which
informs the employee of the employers
decision to dismiss him (Sec. 13, BP130, Sec. 2-
Page 41 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

6 Rule XIV, Book V, Rules and Regulations
Implementing the Labor Code as amended).
Failure
to
comply
with
the
requirements taints the dismissal with illegality.
This procedure is mandatory; in the absence of
which, any judgment reached by management
is void and inexistent (Tingson, Jr. vs. NLRC,
185 SCRA 498 [1990]; National Service Corp.
vs. NLRC, 168 SCRA 122, Ruffy vs. NLRC. 182
SCRA 365 L [1990]).
Substantive Due Process
Just causes and authorized causes As
mentioned in Article 279, there are two (2)
kinds of causes or grounds to terminate
employment by employer, to wit:
1. Just causes which refer to those
instances enumerated under Article 282
[Termination by employer] of the Labor Code.
2. Authorized causes which refer to
those instances enumerated under Article 283
[Closure of establishment and reduction of
personnel] and 284 [Disease as ground for
termination] of the Labor Code.
Procedural Due Process
Two-fold process requirement - The
requirement of due process is two-fold, thus:
(1) Substantive aspect; and
(2) Procedural aspect.
Summary of basic due process principles:
Termination with just cause but
without procedural due process-the dismissal IS
UPHELD OR TERMINATION is without
procedural due process, there shall be nominal
damages to be awarded based on Agabon and
Jaka cases (Serrano vs. NLRC et. al., [G. R. No.
January 27, 2000 was abandoned by these
two cases]).
Termination without just cause and
due process is illegal.
Termination for false or non-existent
cause-Employees should be reinstated.
In cases where employee was not
dismissed but he filed an illegal dismissal case
and failed to prove itemployee should be

reinstated and employer should readmit him.
No damages, attorneys fees or backwages
shall be awarded.
Quantum
of
evidence
in
all
termination
casesmere
substantive
evidence their standards of evidence (such as
proof beyond reasonable doubt or
preponderance of evidence are not
applicable in labor cases).
b. Hearing; meaning of opportunity to be
heard
What is the process to be observed by
the employer (Er) for termination of the
employment based on any of the just causes
for termination?
1. A written notice should be served to
the Ee specifying the ground/s for termination
and giving the said Ee reasonable opportunity
to explain;
Note: This first written notice must
apprise the Ee that his termination is being
considered due to the acts stated in the notice
(Phil. Pizza Inc. v. Bungabong, G.R. No.

154315, May 9, 2005).
2. A hearing or conference should be

held during which the Ee concerned, with the
assistance of counsel, if the Ee so desires, is
given the opportunity to respond to the
charge, present his evidence and present the
evidence presented against him; and
3. A written notice of termination If
termination is the decision of the Er, it should
be served on the Ee indicating that upon due
considerations of all the circumstance, grounds
have been established to justify his
termination, at least one month prior to his
termination;
Note: Single notice of termination
does not comply with the requirements of the
law (Aldeguer & Co., Inc. vs. Honeyline
Tomboc, G.R. No. 147633, July 28, 2008).

What is the purpose of notice and hearing?
1. The reqt of notice is intended to

inform the Ee concerned of the Ers intent to
dismiss him and the reason for the proposed
dismissal;
Page 42 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

2. On the other hand the requirement
of hearing affords the Ee the opportunity to
answer his Ers charges against him and
accordingly to defend himself there from
before dismissal is effected (Salaw v. NLRC
G.R. No. 90786 Sep. 27, 1991).
Note: Failure to comply with the

requirement of the 2 notices makes the
dismissal illegal. The procedure is mandatory.
(Loadstar Shipping Co. Inc. v. Mesano, G.R.

No. 138956, Aug. 7, 2003)
When may the required notices be dispensed
with?
Only in the exceptional case of clear
and existing danger to the safety of the crew
or vessel that the required notices may be
dispensed with, and, once again, records are
bereft of evidence showing that such was the
situation when Avestruz was dismissed
(Maersk-Filipinas Crewing, Inc. vs. Avestruz,
G.R. No. 207010, February 18, 2015).
What is included in the opportunity to be

heard?
The issue was addressed in an en banc
decision rendered by the Supreme Court. With
a 14-1 vote the Court through Chief Justice
Corona held as follows:
a) Ample opportunity to be heard in
an employee dismissal case means any
meaningful opportunity (verbal or written)
given to the employee to answer the charges
against him or her and submit evidence in
support of the defences, whether in a hearing,
conference or some other fair, just and
reasonable way;
b) 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
circumstance justify it; and
c) The ample opportunity to be
heard standard in the Labor Code prevails
over the hearing or conference requirement
in the implementing rules and regulations.
(Perez v. PT&T, G.R. No. 152048, Apr. 7,

2009)
C. Reliefs for Illegal Dismissal
1. Reinstatement
What is reinstatement?
It is the restoration of the employee to
the state from which he has been unjustly
removed or separated without loss of seniority
rights and other privileges.
What are the forms of reinstatement?
1. Actual or physical the employee
(Ee) is admitted back to work
2. Payroll the Ee is merely reinstated
in the payroll
a. Pending appeal
Distinguish Arts. 223 from 279 of the LC
Art. 279
Art. 223
May be availed of as
Presupposes that the
soon as the labor
judgment has already arbiter
renders
a
become final and judgment
declaring
executory.
that the dismissal of
Consequently, there is the Ee is illegal and
nothing left to be ordering
said
done
except
the reinstatement. It may
execution thereof.
be availed of even
pending appeal.
Note: An award or order for
reinstatement is self-executory. It does not
require the issuance of a writ of execution.
(Pioneer Texturizing Corp. v. NLRC, G.R. No.

118651, Oct. 16, 1997)
b. Separation
Reinstatement
Pay
in
Lieu
of
How can separation pay be viewed?

Under present laws and jurisprudence,
separation pay may be viewed in 4 ways:
1. In lieu of reinstatement in illegal
dismissal cases, where Ee is ordered
reinstated but reinstatement is not
feasible;
2. As Ers statutory obligation in cases of
legal termination due to authorized
causes under Art. 283 and 284 of the
LC;
3. As financial assistance, as an act of
social justice and even in case of legal
dismissal under Art. 282 of the LC; and
Page 43 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

4. As employment benefit granted in CBA
or company policy. (Poquiz, 2005)
Is an illegally dismissed employee entitled to
reinstatement as a matter of right?
General Rule: Yes.
Exceptions:
Proceeds from an illegal dismissal
wherein reinstatement is ordered but cannot
be carried out as in the following cases:
1. Reinstatement cannot be effected in
view of the long passage of time or
because of the realities of the situation.
It would be inimical to the employers
interest. When reinstatement is no
longer feasible;
2. When it will not serve the best interest
of the parties involved;
3. Company will be prejudiced by
reinstatement; and
4. When it will not serve a prudent
purpose;
5. When there is resultant strained
relation (applies to both confidential
and managerial employees (Ees) only).
6. When the position has been abolished
(applies
to
both
managerial,
supervisory and rank-and-file Ees).
2. Backwages
What are backwages?
It is the relief given to an employee
(Ee) to compensate him for the lost earnings
during the period of his dismissal. It
presupposes illegal termination.
Note: Entitlement to backwages of the
illegally dismissed Ee flows from law. Even if
he does not ask for it, it may be given. The
failure to claim backwages in the complaint for
illegal dismissal is a mere procedural lapse
which cannot defeat a right granted under
substantive law.
What is the period covered by the payment of
backwages?
1.
The backwages shall cover the period

from the date of dismissal of the
employee up to the date of:
2. Actual
reinstatement,
or
if
reinstatement is no longer feasible;
3. Finality
of
judgment
awarding
backwages (Buhain v. CA, G.R.
143709, July 2, 2002)
Note: The backwages to be awarded
should not be diminished or reduced by
earnings elsewhere during the period of his
illegal dismissal. The reason is that the Ee while
litigating the illegality of his dismissal must earn
a living to support himself and his family.
(Bustamante v. NLRC, G.R. No. 111651, Mar.

15, 1996; Buenviaje v. CA, G.R. No. 147806,
Nov. 2002)
a. Computation
What is included in the computation of
backwages?
They cover the following:
1.
2.
3.
Transportation
and
emergency
allowances;
Vacation or service incentive leave and
sick leave; and
13th month pay.
Note: Facilities such as uniforms, shoes,

helmets and ponchos should not be included
in the computation of backwages because said
items are given for free, to be use only during
official tour of duty not for private or personal
use. The award of backwages is computed on
the basis of 30-day month. (JAM Trans Co. v.
Flores, G.R. No.L-63555, Mar. 19, 1993)
a. Limited backwages
D. Preventive Suspension
What is preventive suspension?
During
the
pendency
of
the
investigation, the Er may place the Ee under
preventive suspension leading to termination
when there is an imminent threat or a
reasonable possibility of a threat to the lives
and properties of the Er, his family and
representatives as well as the offenders coworkers by the continued service of the Ee.
What is the duration of preventive
suspension?
It should not last for more than 30
days. The Ee should be made to resume his
work after 30 days. It can be extended
Page 44 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

provided the Ees wages are paid after the 30day period. This period is intended only for
the purpose of investigating the offense to
determine whether he is to be dismissed or
not. It is not a penalty.
Note: The Er may continue the period
of
preventive suspension provided that he pays
the salary of the Ee. If more than 1 month, the
Ee must actually be reinstated or reinstated in
the payroll. Officers are liable only if done
with malice.
E. Constructive Dismissal
14. Recall of workers

Exceptions: Otherwise limited by special laws.
Note: So long as a companys prerogatives are
exercised in good faith for the advancement of
the Ers interest and not for the purpose of
defeating or circumventing the rights of the Ees
under special laws or under valid agreements,
the Supreme Court will uphold them.
What are the limitations on management
prerogative?
The following are the limitations on
the exercise of management prerogative:
What is constructive dismissal?
1.) It must be exercised in good faith;

2.) It must not be tainted with unfair labor
practice;
3.) The
exercise
of
management
prerogative must be within the
limitations set by law;
4.) It must also be within the limitations
set by the Collective Bargaining
Agreement; and
5.) The exercise must be consistent with
the principles of fair play and justice.
An involuntary resignation resorted to
when:
1. continued
employment
becomes
impossible, unreasonable, or unlikely;
2. there is a demotion in rank or
diminution in pay; or
3. clear discrimination, insensibility or
disdain by an Er becomes unbearable
to the Ee (Leonardo v. NLRC, G.R.
No.125303, June 16, 2000)
Note: There is no formal dismissal.

The Ee is placed in a situation by the Er such
that his continued employment has become
unbearable. Abandonment is incompatible
with constructive dismissal.
V. Management Prerogative
What is Management Prerogative?
General Rule: It is the right of an Er to
regulate, according to his own discretion and
judgment, all aspects of employment,
including:
1. Hiring;
2. Work assignments;
3. Working methods;
4. Time, place and manner of work;
5. Tools to be used;
6. Processes to be followed;
7. Supervision of workers;
8. Working regulations;
9. Transfer of Ees;
10. Work supervision;
11. Lay-off of workers;
12. Discipline;
13. Dismissal; and
Concept of Management Prerogative.

Management Prerogative Defined. This
refers toan employer's right to freely regulate
all aspects of employment through the
adoption of strategies or schemes geared
toward attaining profit, subject, however, to
limitations set by law, the CBA and the
principles of fairness and justice and must be
effected in good faith and not tainted by
unfair labor practice.
Supreme Court Rulings On
Rights.
Management
a. In NORKIS TRADING CO., INC., ET

AL. vs. NATIONAL LABOR RELATIONS
COMMISSION, ET AL; G.R. No. 168159,
August 19, 2005 the employers are allowed,
under the broad concept of management
prerogative, to regulate all aspects of
personnel administration including 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
Page 45 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

workers, and the dismissal and recall of
workers;
b. The Supreme Court in Garcia vs.
National Labor Relations Commission, 243
SCRA 632, reiterated the existing doctrine that
the Constitution also protects management
from oppression and destruction in this wise:
"(t)he Constitutional policy of providing full
protection to labor is not intended to oppress
or destroy management xxxx. The unfledging
commitment of this Court to the cause of the
labor will not prevent Us from sustaining the
employer, when itis in the right xxxx."
c. In Philippine Geothermal, Inc. vs.
The National Labor Relations Commission,
236 SCRA 371, the Supreme Court balanced
the conflictinginterests of both labor and
management andplaced the parties in
relatively equal positions.
d. Likewise, in earlier cases, the Court
ruled that the law in protecting the rights of
the employees does not authorize the
oppression nor self-destruction of the
employer. It should be made clear that when
the law tilts the scales of justice to put the two
(2) parties in favor of labor, it is but
recognition of the inherent inequality between
labor and management. The evident intent is
to balance the scale of justice to put the two
parties on relatively equal positions. There
may be cases where the circumstances warrant
favoring labor over the interests of
management but never should the scale be so
tilted if the result is an injustice to the
employer (Justicia nemeni neganda est (Justice
is to be denied to none).
RELATED SC DECISIONS
1. In a 1996 case, the Supreme Court
ruled in Home Owners Savings and Loan
Association, Inc. vs. NLRC and Marilyn
Cabatbat, G.R No.97067, 26 September 1996,
that an "(a)n owner of a business enterprise is
given considerable leeway in managing
because it is deemed important to society as a
whole that he should succeed." Our law,
therefore, recognizes certain rights as inherent
in the management of business enterprises.
These
rights
are
collectively
called
management prerogatives or acts by which
directing the business is able to control the
variables thereof, so as to enhance the chances
of making a profit. Together, they may taken
as the freedom to administer the affairs of a

business enterprise such that the costs of
running it would be below the expected
earnings or receipts. In short, the elbow room
in the quest for profits"(Citing Chu vs. NLRC,
232 SCRA 764 [1994].
2. The scope of these prerogatives was
laid down in a number of cases, one of which
was San Miguel Brewery Sales Force Union
(PTGWO) vs. Ople, 170 SCRA 25 (1989),
where the Court held that "(e)xcept as limited
by special laws, an employer is free to
regulate, according to his own discretion and
judgment, all aspects of employment,
including 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, layoff of workers and the discipline, dismissal and
recall of work." (Based on National Labor
Union (NLU) vs. Insular La Yebana Co., 2
SCRA 924, Republic Savings Bank vs. CIR, 21
SCRA 226, 235).
3. As a general rule, it is recognized
"that normally it is the prerogative of the
employer to transfer and re-assign its
employees according to the requirements of its
business (Pocketbell Philippines, Inc. vs. NLRC,
et. al., G.R. No. 106843, 20 January 1995;
Phil. Telegraph and Telephone Co. vs.
Laplana, 199 SCRA 485 [1991] ).
4. This same ruling was the Court's
position in Interwood Employees Association
vs. International Hardwood and Veneer Co. of
the
Phil., 99 Phil. 82 (1956) and in Yuco Chemical
Industries, Inc. vs. MOLE, 185 SCRA 727
(1990), which upheld "the employer's right to
transfer its personnel for valid reasons".
5. In Isabelo, et. al., vs. NLRC, G.R.
No. 113366-68, 24 July 1997 the Court ruled
that it is the employers prerogative, based on
its assessment and perception of its employees'
qualifications, aptitudes and competence, to
move them around in the various areas of its
business operations in order to ascertain where
they will function at maximum benefit to the
cmpany. An employee' right to tenurial
security does not give him that vested right as
would deprive the company of its prerogative
to change his assignment or transfer him where
he is most useful.
Page 46 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law
6. In Cosico vs. NLRC, G.R. No.

118432, 23 May 1997, the Court recognized
the right of management to abolish a position
which it deems is no longer necessary and
absent any findings of malice and arbitrariness
on the part of management, The Court will
not efface such privilege if only to protect the
person holding that office. Moreover the
abolition of the position was seen as a costeffective measure to cut = operational
expenses so as not to incur further losses
already suffered by the Company's Manila
office on account of a low passenger yield.
The deletion therefore, of the petitioner's
position should be accepted and validated as a
valid exercise of management prerogative.
7. For a transfer of an employee not to
be considered a constructive dismissal, the
employer must be able to show that such
transfer is not unreasonable, inconvenient or
prejudicial to the employee, nor does it
involve a demotion in rank or a diminution of
his salaries, privileges and other benefits (Jarcia
Machine Shop and Auto Supply, Inc. vs. NLRC
and Agapito Tolentino, G.R. No. 118045, 02
January 1997).
8. However, the Court in PT and T vs.
Laplana, 199 SCRA 485 (1991), set certain
limitations to these rights of management and
ruled thus: "(b)ut like all other rights, there are
limits. The managerial prerogative to transfer
personnel must be exercised without grave
abuse of discretion and putting to mind the
basic elements of justice and fair play. Having
the right the same must be exercised. Thus it
cannot be used as a subterfuge by the
employer to rid himself of an undesirable
worker. Nor than the real reason is to penalize
an employee for his union activities and
thereby defeat his right to self-organization.
But the transfer can be upheld when there is
no showing that it is unnecessary, inconvenient
and prejudicial to the displaced employee."
Limitations to the Exercise of Management
Prerogative.
(a) In Master Iron Labor Union vs.
NLRC, 219 SCRA 47 (1993), the Supreme
Court ruled that the hiring, firing, transfer,
demotion and promotion of employees, are
traditionally
identified
as
management
prerogative. However, these prerogatives are
not absolute. They are subject to limitations
found in law, a collective bargaining

agreement, or general principles of fair play
and justice (Similarly ruled in Phil. Airlines, Inc.
(PAL) vs. NLRC, G.R. No. 85985, 03 August
1993).
(b) In the PAL case, supra, the Supreme
Court rendered a ruling on the employee's
participation in decision making. Hence, a
distinction
must
be
made
between
management functions regarding business
operations per se and those affecting the right
of employees. In this regard, management
should see to it that its employees be, at least,
properly informed of its decisions or modes of
action.
(c) The Supreme Court in Business Day
Information System and Services, Inc. vs. NLRC
221 SCRA 9 (1993), reiterated the limitations in
management's exercise of its prerogative, and
ruled as "not absolute and must be exercised in
good faith" as held in the Master Iron and PAL
cases (a and b above).
NOTE: If the implementation of the
provisions of company rules and policies, the
same results in the deprivation of the
employees means of livelihood, which in the
constitutional sense a property right, the latter
right serves as a limitation thereto.
Related Cases:
1. Aurelio vs. NLRC et.al. G.R. No.
99034, 14 April 1993. - The prerogative of
management to conduct its business affairs to
achieve its purpose cannot be denied.
Management is at liberty, absent any malice
on its part to abolish positions which it deems
no longer necessary.
2. Almodiel vs. NLRC, G.R. No.
100641, 14 June 1993. - On the Right to Hire.
The determination of the qualification and
fitness of the workers for hiring and firing,
promotion or reassignment are exclusive
prerogative of management.
3. Garcia vs. Manila Times/La
Vanguardia Publishing, Inc. and NLRC, G.R.
No. 99390, 05 July 1993. - On Discipline As a
Management Function. The Court will uphold
such management right if exercise in good faith
and not for the purpose of defeating the rights
of the employees.
Page 47 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

A. Discipline
What is Ers right to discipline his Ees?
The Er has the prerogative to instill
discipline in his Ees and to impose reasonable
penalties, including dismissal, on erring Ees
pursuant to company rules and regulations.
for the protection of the companys property

pending investigation of any malfeasance or
misfeasance committed by the employee
(Consolidated Food Corp. vs. NLRC, 315
SCRA 129).
C. Productivity Standard
(San Miguel Corporation v. NLRC, G.R. No.

87277, May 12, 1989)
May an Er impose productivity standards for

its workers?
B. Transfer of Employees
Yes. An Er is entitled to impose

productivity standards for its workers, and in
fact, non-compliance may be visited with a
penalty even more severe than demotion. The
practice of a company in laying off workers
because they failed to make the work quota
has been recognized in this jurisdiction. Failure
to meet the sales quota assigned to each of
them constitute a just cause of their dismissal,
regardless of the permanent or probationary
status of their employment. 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 Ers interest. (Leonardo vs.
What is the Ers right to transfer and reassign

Ees?
In the pursuit of its legitimate business
interests, especially during adverse business
conditions, management has the prerogative
to transfer or assign Ees from one office or
area of operation to another provided there is
no demotion in rank or diminution of salary,
benefits and other privileges and the action is
not motivated by discrimination, bad faith, or
effected as a form of punishment or demotion
without sufficient cause. This privilege is
inherent in the right of Ers to control and
manage their enterprises effectively.
Note: The right of Ees to security of
tenure does not give them vested rights to
their positions to the extent of depriving
management of its prerogative to change their
assignments or to transfer them (Endico v.
Quantum Foods Distribution Center, G.R. No.

161615, Jan. 30, 2009)
As a general rule, the employer has the

inherent right to transfer or assign an
employee subject only to the condition that it
not be motivated by 1) discrimination or 2)
bad faith (PT&T vs. Laplana, 199 SCRA 485).
An employees right to security of
tenure does not give him such vested right in
his position as would deprive the company of
its prerogative to change his assignment or
transfer him. It is the prerogative of
management to transfer an employee where
he can be most useful to the company (Blue
Dairy Corporation vs. NLRC, 314 SCRA 401).
Transfer, even if due to promotion,
cannot be done without employees consent.
Re-assignment
pending
the
administrative investigations of irregularities
allegedly committed by an employee falls
within the ambit of management prerogative.
The purpose is no different from that of
preventive suspension which management
could validly impose as disciplinary measure
NLRC, G.R. No. 125303, June 16, 2000)

D. Grant of Hours
What is a bonus?
It is an amount granted and paid to an

Ee for his industry and loyalty which
contributed to the success of the Ers business
and made possible the realization of profits.
Can bonus be demanded?
General Rule: Bonus is not demandable as a
matter of right. It is a management prerogative
given in addition to what is ordinarily received
by or strictly due to recipient. (Producers Bank
of the Phil. v. NLRC, G.R. No. 100701, March

28, 2001)
Exceptions: Given for a long period of time
Page 48 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

1.
Consistent and deliberate Er

continued giving benefit without any
condition imposed for its payment;
2. Er knew he was not required to give
benefit;
3. Nature of benefit is not dependent on
profit; and
4. Made part of the wage or
compensation agreed and stated in the
employment contract.
E. Change of Working Hours
What is the Ers right to change 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 Ees.
What are the factors that the Er must prove

inorder to justify BFOQ?
The Er must prove 2 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. (Star
Paper et al. vs. vs. Simbol, G.R. No. 164774,

April 12, 2006)
G. Post-employment ban
The present article provides that the

normal hours of work of an Ee shall not
exceed eight (8) hours a day. This implies that
the Er, in the exercise of its management
prerogatives, may schedule a work shift
consisting of less than eight hours. And
following the principle of a fair days wage
for a fair days labor, the Er is not obliged to
pay an Ee, working for less than eight hours a
day, the wages due for eight hours.
Nonetheless, if by voluntary practice or policy,
the Ee for a considerable period of time has
been paying his Ees wages due for eight hours
work although the work shift less than eight
hours (e.g. seven) it cannot later on increase
the working hours without an increase in the
pay of the employees affected. An Er is not
allowed to withdraw a benefit which he has
voluntarily given.
There is a distinction between

restrictive covenants barring an Ee to accept a
post-employment competitive employment or
restraint on trade in employment contracts
and restraints on post-retirement competitive
employment in pension and retirement plans
either incorporated in employment contracts
or in collective bargaining agreements between
the Er and the union of Ees, or separate from
said contracts or collective bargaining
agreements which provide that an Ee who
accepts
post
retirement
competitive
employment will forfeit retirement and other
benefits or will be obliged to restitute the same
to the employer. The strong weight of
authority is that forfeitures for engaging in
subsequent competitive employment included
in pension and retirement plans are valid even
though unrestricted in time or geography. A
post-retirement
competitive
employment
restriction is designed to protect the Er against
competition by former Ee who may retire and
obtain retirement or pension benefits and, at
the same time, engage in competitive
employment. (Rivera vs. Solidbank, G.R. No.
F. Rules on Marriage between Employees of

competitor-employers
VI. Social Welfare Legislation (P.D. 626)
May the normal hours fixed in Article 83 be

reduced by the Er?
Is a company policy prohibiting marriage

between co-workers valid?
There must be a finding of a bona fide
occupational qualification (BFOQ) to justify an
Ers No Spouse Rule. There must be a
compelling business necessity for which no
alternative exists other than the discriminating
practice. (Star Paper vs. Simbol, G.R. No.
163269, April 19, 2006)
A. SSS Law (R.A. No. 8282)

1. Coverage
upon:
Coverage in the SSS is compulsory

1.
164774, April 12, 2006)
Page 49 of 72
BAR OPERATIONS 2015
All employers engaged in business

in the Philippines, including
religious, charitable, or non-profit
Green Notes 2015
Labor Law

institutions (Sec. 8(c), RA 8282;
Roman Catholic Archbishop of
Manila v. SSC, 1 SCRA 10);
d. Employees of a foreign government,

international organization, or their
wholly-owned instrumentality; and
e. Temporary employees, which may be
excluded by regulation of the
Commission (Sec. 8(J), RA 1161 as
amended).
2. All employees not over 60 years of

age (Sec. 9, RA 8282);
3. Domestic
helpers
receiving
Php1,000.00/month (Sec. 9-A, RA
8282);
4. Aliens employed in the Philippines
(Philippine Blooming Mills v. SSS,
17 SCRA 1077);
5. Self-employed persons, including,
but not limited to the following:
a. All self-employed professionals;
b. Partners and single proprietors
of businesses;
c. Actors and actresses, directors,
scriptwriters
and
news
correspondents;
d. Professional athletes, coaches,
trainers and jockeys; and
e. Individual
farmers
and
fishermen (Sec. 9-A, RA 8282).
The right of an employee to be
covered by the SSS is premised on the existence
of an employer-employee relationship
(Gapayao vs. Fulo. G.R. No. 193493 June 13,
2013).
The following may be covered by the
SSS on a voluntarily basis:
In the absence of a regulation

exempting temporary employees from
coverage, temporary employees are covered
because there is no way of telling whether or
not the said employees belong to a group or
class designated by regulation of the Social
Security Commission as exempt (LUSTEVECO
v. SSS, 16 SCRA 6).
3. Benefits
The benefits under the Social Security Act are
as follows:
a. Monthly Pension;
b. Dependents Pension;
c. Retirement Benefits;
d. Death Benefits and Permanent
Disability Benefits;
e. Funeral Benefits;
f. Maternity Benefits;
g. Loan; and
h. Sickness Benefits.
An employee is still entitled to social
security benefits even if his employer
fails/refuses to remit the contribution to the
SSS (Gapayao v. Fulo. G.R. No. 193493 June
13, 20132013).
a. Spouses who devote full time to managing

the household and family affairs (Sec. 9(b), RA
8282); and
4. Beneficiaries
b. Filipinos recruited for overseas employment

by foreign-based employers (Sec. 9(c), RA
8282).
i. Dependent spouse until he or she

remarries; and
2. Exclusions from coverage

The Social Security Law does not cover
following:
a. Purely casual employees;
b. Employees serving performed on an
alien vessel, when such vessel is outside
the Philippines;
c. Employees
of
the
Philippine
government
or
any
of
its
instrumentalities or agencies;
a. Primary beneficiaries:
A wife who is already separated de

facto from her husband cannot be said to be
"dependent for support" upon the husband,
absent any showing to the contrary.
Conversely, if it is proved that the husband
and wife were still living together at the time
of his death, it would be safe to presume that
she was dependent on the husband for
support, unless it is shown that she is capable
of providing for herself (SSS v. Aguas. G.R. No.
165546; February 27, 2006).
Page 50 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

ii. Dependent legitimate, legiti- mated
or legally adopted, and illegitimate children.
b) Those who are not receiving basic pay

or salary (per diems, honoraria or
allowances are excluded);
c) members of the judiciary and
constitutional commissions. (they are
only covered by life insurance);
d) Purely casual employees.
b. Secondary beneficiaries:
i. Dependent Parents;
The term parents in the phrase

dependent parents is used and ought to be
taken in its general sense and cannot be unduly
limited to legitimate parents. Plainly,
dependent parents are parents, whether
legitimate or illegitimate, biological or by
adoption, who are in need of support or
assistance (Bartolome vs. SSS, G.R. No. 192531,
November 12, 2014).
ii. Any other person designated by the
member as his secondary beneficiary.
B. GSIS Law (R.A. No. 8291)
1. Coverage
The GSIS covers government employees,
irrespective of employment status, who are
employed with the:
a. national government, its political
subdivisions, branches, agencies or
instrumentalities;
b. government-owned
or
controlled
corporations;
c. government financial institutions with
original charters;
d. constitutional commissions; and
e. the judiciary (Sec. 3, RA 8291).
Membership is compulsory for all employees:
a) Appointee or elective
b) whether
temporary,
counsel,
permanent
or
contractual
with
employer-employee relationship
c) who are receiving basic pay or salary
but not per diems, honoraria or
allowances, and
d) who have not reached the compulsory
retirement age of 65 years old
2. Exclusions from coverage
The following are excluded from the
compulsory membership of the GSIS
a) Uniformed members of the AFP and
PNP;
3. Benefits
The following are the benefits:
a. Separation benefits:
b. Unemployment or Involuntary
Separation Benefits;
c. Permanent total disability benefits;
d. Permanent
partial
disability
benefits;
e. Temporary total disability benefits;
f. Retirement benefits;
g. Survivorship benefits;
h. Funeral benefits; and
i. Life insurance benefit.
Where the employee retires and meets
the eligibility requirements, he acquires a
vested right to benefits that is protected by the
due process clause. Retirees enjoy a protected
property interest whenever they acquire a
right to immediate payment under pre-existing
law. Thus, a pensioner acquires a vested right
to benefits that have become due as provided
under the terms of the public employees
pension statute. No law can deprive such
person of his pension rights without due
process of law, that is, without notice and
opportunity to be heard (GSIS vs. De Leon.
G.R. No. 186560; November 17, 2010).
4. Beneficiaries
a. Primary beneficiaries:
i. Legal dependent spouse until he
or she remarries; and
ii. Dependent children.
b. Secondary beneficiaries:
i. Dependent parents; and
ii. Legitimate descendants.
C. Limited Portability Law (R.A. No. 7699)
2011 Bar Exam Question:
Under the Limited Portability law,
funds from the GSIS and the SSS maybe
transferred for the benefit of a worker who
transfers from one system to the other. For
Page 51 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

this purpose, overlapping periods
membership shall be credited only once.
of
D. Employees Compensation
1. Coverage
The following are covered:
a. Every employer shall be covered;
b. Every employee over 60 years of age
shall be covered if he had been paying
contributions to the system prior to
age 60 and has not been compulsorily
retired; and
c. An employee who is coverable by
both the GSIS and SSS shall be
compulsorily covered by both systems.
2. When compensable
It is compensable in the following
instances:
a. For the injury and the
resulting
disability or death to be compensable,
the injury must be the result of
accident arising out of and in the
course of the employment;
b. For the sickness and the resulting
disability or death to be compensable,
the sickness must be the result of an
occupational disease listed under the
Rules with the conditions set therein
satisfied, otherwise, proof must be
shown that the risk of contracting the
disease is increased by the working
conditions;
c. Only injury or sickness that occurred
on or after January 1, 1975 and the
resulting disability or death shall be
compensable under these Rules.
primary injury is shown to have arisen in the

course of employment, every natural
consequence that flows from the injury
likewise arises out of the employment, unless it
is the result of an independent intervening
cause attributable to claimants own negligence
or misconduct (GSIS v. Calumpiano, G.R. No.
196102, November 26, 2014).
Rules on Compensability
1. Direct Premises Rule
a. General Rule:
The accident of the employee should have
occurred at the place of work in order to be
compensable.
b. Exceptions:
(The accident is still compensable even if it
occurred outside the work premises)
(1) Proximity Rule:
When the injury is sustained when the
employee is proceeding to or from his work
on the premises of the employer, the injury is
compensable (Iloilo Dock & Engineering Co.
vs. ECC, G.R. No. L-26341, Nov. 27, 1968).
(2) Going To or Coming From Work when the
injury is sustained when the employee is
proceeding to or from his work on the
premises of the employer, the injury is
compensable.
Under the present law, in order for the

employee to be entitled to sickness or death
benefits, the claimant must show:
(1) that the disability or death is the
result of an occupational disease listed under
Annex A of the ECC Rules with the
conditions set therein satisfied; or,
(2) that the risk of contracting the
disease is increased by the working conditions
(Lorenzo v. GSIS. G.R. No. 188385, October 2,
2013).
Probability, not certainty, is the test of
proof in compensation cases; where the
a. The act of the employee of going to,

or coming from, the work place, must
have been a continuing act, that is, he
had not been diverted therefrom by
any other activity and he had not
departed from his usual route to, or
from, his workplace; and,
b. An employee on a special errand must
have been official and in connection
with his work.
c. Extra Premises Rule: The company
which provides the means of
transportation in going to, or coming
from the place of work, is liable to the
injury sustained by the employees
while on board said means of
transportation (Enao v. ECC G.R. No.
L-46046, April 5, 1985).
Page 52 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

d. Special Errand Rule: Injury sustained
outside the company premises is
compensable if his being out is covered
by an office order or a locator slip or a
pass for official business. The special
errand must be official and in
connection to the employees work.
e. Dual
Purpose
Doctrine
allows
compensation where a special trip
would have to be made for the
employer if the employee had not
combined the service for the employer
with his going or coming trip even if in
the course of the trip, the employee
also pursues a personal purpose.
f.
Special Engagement Rule covers field

trips, outings, intramurals, and picnics
when initiated and sanctioned by the
employer.
g. Positional and Local Risks Doctrine: If

an employee by reason of his duties is
exposed to a special or peculiar danger
from the elements, that is, one greater
than that to which other persons in the
community are exposed and an
unexpected injury occurs, the injury is
compensable
2. 24 Hour Duty Doctrine
The 24 Hour Duty Doctrine applies
to both policemen and firemen. The
policemen and firemen are technically on duty
24 hours a day except when they are on
vacation leave, they may be on-call anytime.
However, to be compensable, the injury
should be caused by an activity which is police
or firemen services in character (reasonable
connection between the injury and the work
or service) (Hinoguin v. ECC, G.R. No. 84307,
April 17, 1989).
The 24-hour duty doctrine should not
be sweepingly applied to all acts and
circumstances causing the death of a police
officer but only to those which, although not
on official line of duty, are nonetheless
basically police service in character (GSIS vs.
Court of Appeals, G.R. No. 128524, April 20,
1999).
VII. Labor Relations Law

A. Right to self-organization
1. Who may unionize for purposes of
collective bargaining?
All persons employed in commercial,
industrial and agricultural enterprises in an
religious, charitable, medical or education
institutions, whether operating for profit not,
shall have the right to self-organizations of
their own choosing for purposes of collective
bargaining. Ambulant, intermittent and
itinerant workers, self-employed people, rural
workers and those without any definite
employers may form labor organizations for
their mutual aid and protection.
Right to organize of employees in the public
service:
Employees
of
government
corporations
established
under
the
Corporation Code shall have the right to
organized and to bargain collectively with
their respective employers. All other
employees in the civil case shall have the right
to form associations for purposes not contrary
to law.
Article 212(g) of the Labor Code
defines a labor organization as 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. Upon compliance with all the
documentary requirements, the Regional
Office or Bureau shall issue in favor of the
applicant labor organization a certificate
indicating that it is included in the roster of
legitimate labor organizations. Any applicant
labor organization shall acquire legal
personality and shall be entitled to the rights
and privileges granted by law to legitimate
labor organizations upon issuance of the
certificate of registration (Sta. Lucia East
Commercial Corporation vs. Hon. Secretary of
Labor and Employment, et al., G.R. No.
162355, August 14, 2009).
Three (3) categories of employees:
1. Managerial employees (recently
classified into: top management
and middle management);
2. Supervisory management (classified
as first-time management); and
Page 53 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

3. Rank and file employees.
Who cannot form, join or assist labor
organizations?
Managerial employees are not allowed
to join any labor organization. Supervisory
employees are allowed to join a supervisory
union but the union of rank-and-file
employees.
The principle distinction between
managerial
employees
and
supervisory
employees is: the former have the power to
decide and do managerial acts: while the latter
have the power only to recommend
managerial acts such as laying down policy, or
dismissal of employees and the like.
Separation of Union Doctrine
The affiliation of both t6he rank-andfile union and supervisory union in the same
company with one and the same federation is
not allowed if the rank-and-file employees are
under the direct supervision of the supervisors
composing the supervisory union. If not, said
affiliation with one and the same federation
allowed.
NOTE: This is now allowed under the
amendments to the Code.
Confidential Employee Rule
Confidential employees are not
allowed to join any union (as they are treated
like managers) when they:
(1) assist or act in
and
(2) to persons who
and effectuate
specifically in
relations.
confidential capacity;
formulate, determine,
management policies
the field of labor
Otherwise, if this two conditions do

not concur, they can join a union.
Security Guards:
Present rule is security guards may join
rank-and-file or supervisory union, depending
on their rank or position.
Although Article 245 of the Labor
Code limits the ineligibility to join, form and
assist any labor organization to managerial
employees, jurisprudence has extended this
prohibition to confidential employees. The
positions of Human Resource Assistant and

Assistant belong to the category of confidential
employees and, hence, are excluded from the
bargaining unit, considering their respective
positions and job descriptions. As Human
Resource Assistant, the scope of ones work
necessarily involves labor relations, recruitment
and selection of employees, access to
employees personal files and compensation
package, and human resource management. As
regards a Personnel Assistant, ones work
includes the recording of minutes for
management during collective bargaining
negotiations, assistance to management during
grievance
meetings
and
administrative
investigations, and securing legal advice for
labor issues from the petitioners team of
lawyers, and implementation of company
programs. Therefore, in the discharge of their
functions, both gain access to vital labor
relations
information
which
outrightly
disqualifies them from union membership (San
Miguel Foods, Inc. vs. San Miguel Corp.
Supervisors and Exempt Union, G.R. No.
146206. August 1, 2011).
Prohibition against aliens
General Rule: All aliens, natural or
judicial, 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
internat6ional labor centers.
Exceptions: Alien Employees with valid
working permit issued by the DOLE may
exercise the right to self-organizations for
purposes of collective bargaining, if they are
nationals of country which grants the same or
similar rights to Filipino workers, as certified
by the Department of Foreign Affairs.
2. Bargaining unit
It 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 and
geographical grouping within such employer
unit.
A bargaining unit is the group or
cluster of jobs or positions that supports the
labor organization which applying for
Page 54 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

registration,
establishment.
within
the
employers
A bargaining unit is a group of

employees of a given employer, comprised of
all or less than all of the entire body of
employees, consistent with equity to the
employer, indicated to be the best suited to
serve the reciprocal rights and duties of the
parties under the collective bargaining
provisions of the law. (Sta. Lucia East
Commercial Corporation vs. Hon. Secretary of
Labor and Employment, et al., G.R. No.
162355, August 14, 2009).
a) Test to determine the constituency of an
appropriate bargaining unit
The
fundamental
factors
in
determining
the
appropriate
collective
bargaining unit are:
(1) the will of the employees (Globe
Doctrine);
(2) affinity and unity of the employees
interest, such as substantial similarity of
work and duties, or similarity of
compensation and working conditions
(Substantial Mutual Interests Rule);
(3) prior collective bargaining history; and
(4) similarity of employment status (Sta.
Lucia East Commercial Corporation vs.
Hon.
Secretary
of
Labor
and
Employment, et al., G.R. No. 162355,
August 14, 2009).
b) Voluntary recognition
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 the appropriate bargaining unit,
for purposes of collective bargaining. This is
allowed when there is only one union
operating in the bargaining unit.
(i) Requirements
No specific criteria but the following
may be used:
1. Substantial
mutual
interests
principle or
Community or
mutuality of interests rule ;
2. Globe doctrine (will of the
employees);
3. Collective bargaining history; and
4. Employment status.
c) Certification election
It refers to the process of determining
through secret ballot sole the sole and
exclusive bargaining representative of the
employees in an appropriate bargaining unit,
for purposes of collective bargaining.
(i) In an unorganized establishment
(ii) In an organized establishment
Requisites for a certification
organized establishments:
election
in
1. that a petition questioning the majority

status of the incumbent bargaining agent
is filed before the DOLE within 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
4. (25%) of all employees in the bargaining
unit.
Note: In unorganized establishments,
certification
election
shall
be
automatically conducted upon the filing
of a petition for certification election by a
legitimate labor organization.
Who may file a petition for certification
election?
A certification for certification election
may filed by:
1. a legitimate labor organization; or
2. a dederation or national union in
behalf of a local or chapter
3. as employer, only when requested by
a labor organization to bargain
collectively and the status of the union
is in doubt.
When to file petition for certification election?
General Rule: In the absence of a collective
bargaining agreement duly registered in
accordance with Article 231 of the Labor
Code, a petition for certification election may
be filed at any time.
Page 55 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Exceptions:
vi. when the collective bargaining

agreement was entered into
prior to the 60-day freedom
period;
vii. when there is a mass defection
or schism in the union resulting
in an industrial dispute wherein
the
collective
bargaining
agreement can no longer foster
industrial peace.
However, no certification election may

held under the following rules:
1. certification yearbar rule;
2. bargaining deadclock-bar rule; or
3. contract-bar rule.
4. Consent election bar
1. Certification year-bar rule Under this rule,
a certification election petition may not be
filed within one (1) year: (1) from date of a
valid certification, consent or run-off election;
or (2) from the date of voluntary recognition.
2. Bargaining deadclock-bar rule Neither a
representation questioned be entertained if:
a. Before the filing of the petition for
certification
election,
the
duly
recognized or certified union has
commenced negotiations with the
employer within one-year period from
the date of a valid certification,
consent or run-off election or from the
date voluntary recognition; or
b. A. bargaining deadclock to which an
incumbent or certified bargaining agent
is a party had been submitted to a
conciliation or arbitration or had
become the subject of a valid notice of
strike or lockout.
c. Contract-bar rule.- 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.
Exceptions to the contract-bar rule.
i. during the 60day period;
ii. when the CBA, is not
registered with the BIR or
DOLE Regional Offices;
iii. when the CBA, although
registered, contains provisions
lower than the standards fixed
by law;
iv. when
the
documents
supporting its registration are
falsified, fraudulent or tainted
with misrepresentation;
v. when the collective bargaining
agreement is not complete as it
does not contain any of the
requisite provisions which the
law requires;
Appeal in certification election cases:

To the DOLE Secretary within 10 days
from receipt of the decision
NOTE: In an unorganized establishment, if the
petition is granted, there is no appeal thereto.
It is wellsettled that under the double
majority rule for there to be a valid
certification election, majority of the
bargaining unit must have voted and the
winning union must have garnered majority of
the valid votes cast. Following the ruling that
all the probationary employees votes should
be deemed valid votes while that of the
supervisory Ees should be excluded, it follows
that the number of valid votes cast would
increase. Under Art. 256 of the LC, the union
obtaining the majority of the valid votes cast
by the eligible voters shall be certified as the
sole exclusive bargaining agent of all the
workers in the appropriate bargaining unit.
This majority is 50% + 1 (NUWHRAIN
MPHC v. SLE. G.R. No. 181531, July 31, 2009).
The general rule is that an employer
has no standing to question the process of
certification election, since this is the sole
concern of the workers. Law and policy
demand that employers take a strict, hands-off
stance in certification elections. The bargaining
representative of employees should be chosen
free from any extraneous influence of
management. The only exception is where the
employer itself has to file the petition pursuant
to Article 258 of the Labor Code because of a
request to bargain collectively (San Miguel
Foods, Inc. vs. San Miguel Corp. Supervisors
and Exempt Union. G.R. No. 146206. August
1, 2011).
The choice of their representative is the
exclusive concern of the employees; the
employer cannot have any partisan interest
therein; it cannot interfere with, much less
Page 56 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

oppose, the process by filing a motion to
dismiss or an appeal from it; not even the
allegation that some employees participating
in a petition for certification election are
actually managerial employees will give an
employer legal personality to block the
certification election. The employers only
right in the proceeding is to be notified or
informed thereof (Samahang Manggagawa sa
Charter Chemical Solidarity of Unions in the
Philippines for Empowerment and Reforms
[SMCC-SUPER], Zacarrias Jerry Victorio
Union President v. Charter Chemical and
Coating Corporation G.R. No. 169717, March
16, 2011).
(i)
Requirements
e) Re-run election
The pendency of a petition for

cancellation of union registration does not
preclude collective bargaining, and that an
order to hold a certification election is proper
despite the pendency of the petition for
cancellation of the unions registration because
at the time the respondent union filed its
petition, it still had the legal personality to
perform such act absent an order cancelling its
registration. The legitimacy of the legal
personality of respondent cannot be
collaterally attacked in a petition for
certification election proceeding but only
through
a
separate
action
instituted
particularly for the purpose of assailing it. The
Implementing Rules stipulate that a labor
organization shall be deemed registered and
vested with legal personality on the date of
issuance of its certificate of registration. Once a
certificate of registration is issued to a union,
its legal personality cannot be subject to a
collateral attack. It may be questioned only in
an independent petition for cancellation in
accordance with Section 5 of Rule V, Book V
of
the
Implementing
Rules
(Legend
International Resorts Limited v. Kilusang
Manggagawa ng Legenda. G.R. No. 169754,
February 23, 2011).
It refers to the election voluntarily

agreed upon by the parties, with or without
the intervention of the of the Department of
Labor and Employment, to determine the issue
of majority representation of all the workers in
the appropriate collective bargaining unit.
d) Run-off election
It refers to an election between the
receiving the two (2) highest number of votes
when a certification election which provides
for three (3) more choices res4lts 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% union of the number of votes cast.
Re-run is held in two instances: 1) if

one receives a plurality of vote and the
remaining choices results in a tie; 2) if all
choices received the same number of votes;
while Run-off takes place between the unions
who received the two highest number of votes
where not one of the unions obtained the
majority of the valid votes cast, provided the
total union votes is at least 50% of the votes
cast.
f) Consent election
g) Affiliation and disaffiliation of the local

union from the mother union
A local union may disaffiliate at any
time from its mother federation, absent any
showing that the same is prohibited under its
constitution or rules. Such disaffiliation,
however, does not result in it losing its legal
personality. A local union does not owe its
existence to the federation with which it is
affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its
members. The mere act of affiliation does not
divest the local union of its own personality,
neither does it give the mother federation the
license to act independently of the local union.
It only gives rise to a contract of agency where
the former acts in representation of the latter.
In the present case, whether the FFW went
against the will of its principal (the memberemployees) by pursuing the case despite the
signing of the MOA, is not for the Court, nor
for respondent employer to determine, but for
the Union and FFW to resolve on their own
pursuant to their principal-agent relationship.
Moreover, the issue of disaffiliation is an intraunion dispute which must be resolved in a
different forum in an action at the instance of
either or both the FFW and the union or a
rival labor organization, but not the employer
as in this case (Cirtek Employees Labor UnionFederation of Free workers vs. Cirtek
Page 57 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Electronics, Inc., G.R. No. 190515. June 6,
2011).
Under the LC and the rules, the power
granted to LOs to directly create a chapter or
local through chartering is given to a
federation or national union only, not to a
trade union center (SMCEU v. San Miguel
Packaging Products Ees Union G.R. No.
171153, Sep. 12, 2007).
(i) Substitutionary doctrine
The Er cannot revoke the validly
executed CB contract with their Er by the
simple expedient of changing their bargaining
agent. The new agent must respect the
contract. It cannot be invoked to support the
contention that a newly certified CB agent
automatically assumes all the personal
undertakings of the former agentlike the no
strike clause in the CBA executed by the latter
(Benguet Consolidated Inc. v. BCI Ees and
Workers UnionPAFLU. G.R. No. L24711,
April 1968).
h) Union dues and special assessments
(i) Requirements for validity
It shall invalidate the questioned
special assessments. Substantial compliance of
the requirements is not enough in view of the
fact that the special assessment will diminish
the compensation of union members. i)
Agency fees Palacol v. Ferrer Calleja G.R. No.
85333, Feb. 26, 1990).
i) Agency fees
(ii) Requisites for assessment
B. Right to collective bargaining
Jurisdictional
preconditions
in
collective bargaining :
1. Possession of the status of majority
representation of the employees
representative in accordance with any
of the means of selection or
designation provided for the Labor
Code
2. Proof of majority representation
3. A demand to bargain under Art. 250
(a) of the LC.( Kiok Loy v. NLRC. G.R.
No. L 54334, Jan.22, 1986)
1. Duty to bargain collectively

a) When there is absence of a CBA
b) When there is a CBA
When there is a collective bargaining
agreement, the duty to bargain collectively
shall also mean that neither party shall
terminate or modify such agreement during its
lifetime. However, either party can serve a
written notice to terminate or modify the
agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both
parties to keep the status quo and to continue
in full force and effect the terms and
conditions of the existing agreement during the
60-day period and/or until a new agreement is
reached by the parties.
This is no different from a bargaining
representatives perseverance to include one
that they deem of absolute necessity. Indeed,
an adamant insistence on a bargaining position
to the point where the negotiations reach an
impasse does not establish bad faith.
Obviously, the purpose of CB is the reaching
of an agreement resulting in a contract binding
on the parties; but the failure to reach an
agreement after negotiations have continued
for a reasonable period does not establish a
lack of good faith. The statutes invite and
contemplate a collective bargaining contract,
but they do not compel one. The duty to
bargain does not include the obligation to
reach an agreement. While the law makes it an
obligation for the Er and the Ees to bargain
collectively with each other, such compulsion
does not include the commitment to
precipitately accept or agree to the proposals
of the other. All it contemplates is that both
parties should approach the negotiation with
an open mind and make reasonable effort to
reach a common ground of agreement (Union
of Filipro Ees v. Nestle Phils. G.R. Nos.
15893031, Mar. 3, 2008).
2.
Collective Bargaining Agreement (CBA)
It 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. Itys provisions are construed liberally.
Page 58 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law
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 reflect therein.
Signing bonus, not demandable under
the law.
Allegations of bad faith, wiped out
with signing of CBA.
As regular employees, petitioners fall

within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a
matter of law and contract. Under the terms of
the CBA, petitioners are members of the
appropriate bargaining unit because they are
regular rank-and-file employees and do not
belong to any of the excluded categories. Most
importantly, the labor arbiters decision of
January 17, 2002 affirmed all the way to the
CA ruled against the companys submission
that they are independent contractors. Thus, as
regular rank-and-file employees, they fall
within the CBA coverage. And, under the
CBAs express terms, they are entitled to its
benefits. CBA coverage is not only a question
of fact, but of law and contract. The factual
issue is whether the petitioners are regular
rank-and-file employees of the company. The
tribunals below uniformly answered this
question in the affirmative. From this factual
finding flows the legal effects which are
touching on the terms and conditions of the
petitioners regular employment Farley
Fulache, et al. vs. ABS-CBN Broadcasting
Corporation, G.R. No. 183810, January 21,
2010).
settlement at the plant level as provided in the

collective bargaining agreement. It is 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 grievances submitted to the
grievance machinery 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
Arbitrators, or include n the agreement a
procedure for the selection of such Voluntary
Arbitrators 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.
a) Mandatory provisions of CBA

(i) Grievance procedure
Grievance procedure refers to the
internal rules of procedure established by the
parties in their CBA with voluntary arbitration
as the 6terminal step, which are intended to
resolve
all
issue
arising
from
the
implementation and interpretation of their
CBA. It is refers to the system of grievance
Role of Sole Bargaining Agent.- It is the

representative of all employees of
purposes of collective bargaining.
However, an individual employee
group of employees shall have the
right at any time to present grievances
to their employer.
Participation of workers in policy and

decision-making processes.- Workers
shall have the right 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
labormanagement councils: Provided, That
the representatives of the workers in
such labor-management councils shall
be elected by at least the majority of
all employees in said establishment.
CBA is the law or contract between the

parties. Article 13.1 of the CBA entered into by
Page 59 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

and between respondent GCI and AMOSUP
provides that the Company and the Union
agree that in case of dispute or conflict in the
interpretation or application of any of the
provisions of this Agreement, or enforcement
of Company policies, the same shall be settled
through negotiation, conciliation or voluntary
arbitration (Dulay vs. Aboitiz Jebsen Maritime,
Inc. and General Charterers, Inc. G.R. No.
172642, June 13, 2012).
(ii) Voluntary arbitration
Article 217 of the Labor Code states
that unfair labor practices and termination
disputes fall within the original and exclusive
jurisdiction of the Labor Arbiter. As an
exception, under Article 262 the Voluntary
Arbitrator, upon agreement of the parties, shall
also hear and decide all other labor disputes
including
unfair
labor
practices
and
bargaining deadlocks. For the exception to
apply, there must be agreement between the
parties clearly conferring jurisdiction to the
voluntary arbitrator. Such agreement may be
stipulated in a collective bargaining agreement.
However, in the absence of a collective
bargaining agreement, it is enough that there is
evidence on record showing the parties have
agreed to resort to voluntary arbitration (The
University of the Immaculate Conception, et
al. vs. NLRC, et al., G.R. No. 181146, January
26, 2011).
(iii) No strike-no lockout clause
The no strikeno lockout clause in
the CBA applies only to economic strikes. It
does not apply to ULP strikes. Hence, if the
strike is founded on an unfair labor practice of
the employer, a strike declared by the union
cannot be considered a violation of the no
strike clause (Master Iron Labor Union v.
NLRC. G.R. No. 92009, Feb. 17, 1993).
Note (Poquiz): A strike can be waived
under this clause.
(iv) Labor management council
b) Duration
Terms of a CBA:
Representation aspect (sole exclusive
status of certified union)
The term and condition 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.
All other provisions (which refer to
both economic and non-economic provisions
except representation)
Shall be renegotiated not later that
three (3) years after its execution.
Article 253 of the Labor Code
mandates the parties to keep the status quo
and to continue in full force and effect the
terms and conditions of the existing agreement
during the 60-day period prior to the
expiration of the old CBA and/or until a new
agreement is reached by the parties. The law
does not provide for any exception nor
qualification on which economic provisions of
the existing agreement are to retain its force
and effect. Likewise, the law does not
distinguish between a CBA duly agreed upon
by the parties and an imposed CBA. The
provisions of the imposed CBA continues to
have full force and effect until a new CBA is
entered into by the parties (General Milling
Corporation-Independent Labor Union [GMCILU] vs. General Milling Corporation G.R.
Nos. 183122/183889, June 15, 2011)
While the parties may agree to extend
the CBAs original five-year term together with
all other CBA provisions, any such amendment
or term in excess of five years will not carry
with it a change in the unions exclusive
collective bargaining status. By express
provision of the above-quoted Article 253-A,
the exclusive bargaining status cannot go
beyond five years and the representation status
is a legal matter not for the workplace parties
to agree upon. In other words, despite an
agreement for a CBA with a life of more than
five years, either as an original provision or by
amendment, the bargaining unions exclusive
bargaining status is effective only for five years
and can be challenged within sixty (60) days
prior to the expiration of the CBAs first five
years ( FVC Labor Union-Philippine Transport
and General Workers Organization (FVCLUPTGWO) Vs. Sama-samang Nagkakaisang
Manggagawa sa FVC-Solidarity of Independent
and General Labor Organization (SANAMA-
Page 60 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

FVC-SIGLO. G.R. No. 176249, November 27,
2009)
4. Unfair
bargaining
(i) For economic provisions

(ii) For non-economic provisions
(iii) Freedom period
Labor
Practice
in
collective
a) Bargaining in bad faith

b) Refusal to bargain
c) Individual bargaining
d) Blue sky bargaining
e) Surface bargaining
Freedom period
The last sixty (60) days of the lifetime
of a collective bargaining agreement
immediately prior to its expiration is called the
freedom period. It is so called because it is
only the time when the law allows the parties
to serve notice to terminate, alter or modify
the existing agreement. It is also the time when
the majority status of the bargaining union or
agent may be challenged by another union
appropriate petition for certification election.
Automatic renewal clause
At the time of the freedom period, the
employer shall continue to recognize the
majority status of the incumbent bargaining
agent where not petition for certification
election is filed.
3. Union Security
Union for Security Clause is a
stipulation in the CBA whereby the
management recognizes, that the membership
of employees in the union which negotiated
said should be maintained and continued as a
condition for employment or retention of
employment. The obvious purpose is to
safeguard and ensure the continued existence
of the union.
a) Union security clauses; closed
shop, union shop, maintenance of
membership shop, etc.
Classification:
(1) Closed shop agreement;
(2) Maintenance
of
membership
agreement;
(3) Union shop agreement;
(4) Modified union shop agreement;
(5) Exclusive bargaining agreement;
(6) Bargaining
for
members
only
agreement;
(7) Agency shop agreement;
(8) Preferential hiring agreement.
b) Check-off; union dues, agency
fees
5. Unfair Labor Practice (ULP)

a) Nature of ULP
It violates the right of workers to selforganization, is inimical to the legitimate
interest of both labor and management,
including their right to bargain collective and
otherwise deal with each other in an
atmosphere of freedom and mutual respect,
disrupts industrial peace and hinders the
promotion of healthy and stable labormanagement relations.
Before an employer or labor
organization, as they can be, may be said to
have committed unfair practices acts, the
following ingredients must both concur:
1. there should exist an employeremployee relationship between the
offended party and the offender; and
2. the act complained must be expressly
mentioned and defined in the labor
code as constitutive and unfair labor
practice. If not mentioned, there is no
ULP.
Absent
one
of
the
elements
aforementioned will not make the act an
unfair labor practice act.
Anent the charge of unfair labor
practice, Article 248 (a) of the Labor Code
considers it an unfair labor practice when an
employer interferes, restrains or coerces
employees in the exercise of their right to selforganization or the right to form an
association. In order to show that the
employer committed unfair labor practice
under the Labor Code, substantial evidence is
required to support the claim. Substantial
evidence has been defined as such relevant
evidence as a reasonable mind might accept as
adequate to support a conclusion. In the case
at
bar,
respondents
were
indeed
unceremoniously dismissed from work by
reason of their intent to form and organize a
Page 61 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

union (Park Hotel, et al. vs. Manolo Soriano,
et al. G.R. No. 171118. September 10, 2012).
Unfair labor practice refers to acts that
violate the workers right to organize. The
prohibited acts are related to the workers
right to self-organization and to the
observance of a CBA. Thus, an employer may
be held liable for unfair labor practice only if it
can be shown that his acts interfere with his
employees right to self-organization. Since
there is no showing that the respondent
companys implementation of the Right-Sizing
Program was motivated by ill will, bad faith or
malice, or that it was aimed at interfering with
its employees right to self-organization, there
is no unfair labor practice to speak of in this
case
(Nelson
A.
Culili
v.
Eastern
Telecommunications Philippines, Inc., et al.
G.R. No. 165381, February 9, 2011).
b) ULP of employers
i.
ii.
iii.
iv.
v.
To interfere with, restrain or coerce

employees in the exercise of their right
to self organization;
To require as a condition of
employment that a person or an
employee shall not join labor
organization or shall withdraw from
one to which he belongs;
To contract out services or functions
being performed by union when such
will interfere with, restrain coerce
employees in the exercise of their
rights to selforganizations;
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;
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
in
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 already
vi.
vii.
viii.
ix.
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 (0) of
this shall not apply to the nonmembers of the recognized collective
bargaining agent.
To dismiss, discharge or other wise
prejudice or discriminate against an
employee for having given or being
about to give testimony under this
Code;
To violate the duty to bargain
collectively as prescribed by this Code;
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
To violate a collective bargaining
agreement.
The provisions preceding paragraph

notwithstanding, only the officers and agents
of corporations, associations or partnership
who have actually participated in, authorized
or ratified unfair labor practices shall be held
criminally liable.
Totality of Conduct of Doctrine
Expressions of opinion by an
employer, may be held to be constitutive of
unfair labor practice because of the
circumstances under which they were uttered,
the history of the particular employers labor
relations or anti-union bias or because of their
connection with an established collateral plan
of coercion or interference. An expression
which might be permissibly uttered by one
employer, might, in the mouth of more hostile
employer, be deemed improper and
consequently actionable as an unfair labor
practice.
c) ULP of labor organizations
i.
To restrain or coerce employees in the

exercise of their right to selforganization. However, a labor
organization shall have the right to
Page 62 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law
ii.
iii.
iv.
v.
vi.
prescribe its own rules with respect to

the acquisition or retention of
membership.
To cause or attempt an employer to
discriminate against an employee with
respect to whom membership in such
organizations has been denied or
terminate an employee on any other
than the usual terms and conditions
under
which
membership
or
continuation of membership is made
available to other members.
To violate the duty, or refuse to
bargain collectively with the employer,
provided it is the representative of the
employees.
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;
To ask for or accept negotiations or
attorneys fees from part of the
settlement of any issue in collective
bargaining or any other dispute; or
To violate collective bargaining
agreement.
The provisions of the preceding paragraph

notwithstanding, only the officers, members of
governing boards, representatives or agents or
members of labor associations or organizations
who have actually participated in, authorized
or ratified unfair labor practices shall be held
criminally liable.
C. Right to peaceful concerted activities
1. Forms of concerted activities
2. Who may declare a strike or lockout?
NAMA-MCCH-NFL is not a legitimate
labor organization, thus, the strike staged by its
leaders and members was declared illegal.
(Visayas Community Medical Center (VCMC)
formerly known as Metro Cebu Commnunity
Hospital (MCCH) v. Erma Yballe, et al.,
G.R. No. 196156, January 15, 2014).
3. Requisites for a valid strike or lockout:
First requisite: Valid and final factual ground
a. Valid grounds: (1) CBA Deadlock;

and (2) ULP
b. No other grounds are allowed
except the two mentioned above.
Second requisite: Notice of strike or notice of
lockout
a. When to file notice:
ULP: 15 days
strike/lockout
from
intended
date
of
CBA Deadlock: 30 days from the intended

date thereof
a. Parties who may file notice: Any
certification union, in case of
strike; and employer in case of
lockout.
b. Where to file notice-NCMB
Third requisite: Strike vote or lockout vote
a. Majority approval of strike or
lockout is required
b. Strike vote still necessary even in
case of union-busting.
Fourth requisite: Strike vote report or lockout
vote report
a. When to submit strike or lockout
vote report-at lest seven (7) days
prior to strike lockout, as the case
may be.
b. Effect of none-submission of strike
vote NCMB, DOLE-strike or
lockout is illegal
c. Effect on seven-day waiting period
if filed within cooling-off period.
d. Strike vote report in case of unionbusting-still necessary, it being
mandatory unlike the cooling-off
period which may be dispensed
with.
Fifth requisite: Cooling off-period
a. General rule: CBA Deadlock-30
days; ULP: 15 days
b. Exceptions in the case of unionbusting: Cooling-off period need
not be complied with.
c. When Cooling-off periods startsfrom the time the notice of
strike/lockout is filed with NCMB,
DOLE.
Sixth requisite: 7-day waiting period or strike
ban
Page 63 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

a. Cooling-off period and waiting
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
Notice of Strike/Lockout with
NCMB.
b. Purpose of the seven-day waiting
period- To ensure that the strike
votes vote was indeed taken and
that the majority approved of it.
c. Deficiency of even one-day of the
seven-day strike ban (or coolingoff period) is fatal. Hence, the
strike is illegal.
Article 263 of the Labor Code, as
amended by Republic Act (R.A.) No. 6715,
and Rule XXII, Book V of the Omnibus Rules
Implementing the Labor Code outline the
following procedural requirements for a valid
strike:
1) A notice of strike, with the required
contents, should be filed with the DOLE,
specifically the Regional Branch of the NCMB,
copy furnished the employer of the union;
2) A cooling-off period must be observed
between the filing of notice and the actual
execution of the strike thirty (30) days in case
of bargaining deadlock and fifteen (15) days in
case of unfair labor practice. However, in the
case of union busting where the unions
existence is threatened, the cooling-off period
need not be observed.
xxx xxx xxx
3) Before a strike is actually commenced, a
strike vote should be taken by secret balloting,
with a 24-hour prior notice to NCMB. The
decision to declare a strike requires the secretballot approval of majority of the total union
membership in the bargaining unit concerned.
4) The result of the strike vote should be
reported to the NCMB at least seven (7) days
before the intended strike or lockout, subject
to the cooling-off period. It is settled that these
requirements are mandatory in nature and
failure to comply therewith renders the strike
illegal.
The requisites for a valid strike are:

(Hotel Enterprises of the Philippines, Inc., etc.
vs. Samahan ng mga Manggagawa sa HyattNational Union of Workers in the Hotel
Restaurant, etc., G.R. No. 165756, June 5,
2009).
(a) a notice of strike filed with the DOLE 30
days before the intended date thereof or 15
days in case of ULP;
(b) a strike vote approved by a majority of the
total union membership in the bargaining unit
concerned obtained by secret ballot in a
meeting called for that purpose; and
(c) a notice to the DOLE of the results of the
voting at least seven (7) days before the
intended strike. The requirements are
mandatory and failure of a union to comply
therewith renders the strike illegal
4. Requisites for lawful picketing
To strike is to withhold or to stop
work by the concerted action of employees as
a result of an industrial or labor dispute. The
work stoppage may be accompanied by
picketing by the striking employees outside of
the company compound. While a strike
focuses on stoppage of work, picketing focuses
on publicizing the labor dispute and its
incidents to inform the public of what is
happening in the company struck against. A
picket simply means to march to and from the
employers premises, usually accompanied by
the display of placards and other signs making
known the facts involved in a labor dispute. It
is a strike activity separate and different from
the actual stoppage of work (PHIMCO
Industries, Inc. v. PHIMCO Industries Labor
Association (PILA), et al, G.R. No. 170830,
August 11, 2010).
5. Assumption of jurisdiction by the DOLE
Secretary or Certification of the labor dispute
to the NLRC for compulsory arbitration
The assumption of jurisdiction powers
granted to the Labor Secretary under Article
263(g) is not limited to the grounds cited in
the notice of strike or lockout that may have
preceded the strike or lockout; nor is it limited
to the incidents of the strike or lockout that in
the meanwhile may have taken place. As the
term assume jurisdiction connotes, the intent
of the law is to give the Labor Secretary full
Page 64 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

authority to resolve all matters within the
dispute that gave rise to or which arose out of
the strike or lockout, including cases over
which the labor arbiter has exclusive
jurisdiction.
(Bagong
Pagkakaisa
ng
Manggagawa ng Triumph International, et al.
vs. Secretary of Department of Labor and
Employment, et al./Triumph International
(phils.), Inc. vs. Bagong Pagkakaisa ng
Manggagawa ng Triumph International, et al.,
G.R. No. 167401, July 5, 2010).
4. When it employs unlawful means in the

pursuit of its objective, such as a widespread
terrorism of non-strikers [for example,
prohibited acts under Art. 264(e) of the Labor
Code]; or
7. Nature of assumption order or certification

order
6. When it is contrary to an existing

agreement, such as a no-strike clause or
conclusive arbitration clause.(Toyota v Toyota
Workers Association. G.R. Nos. 158786 &
158789 October 19, 2007).
8. Effect of defiance of assumption or

certification orders
Under Article 264 (a) of the Labor
Code, as amended, a strike that is undertaken
despite the issuance by the Secretary of Labor
of an assumption order and/or certification is
illegal. So is a declaration of a strike during the
pendency of cases involving the same grounds
for the strike. In the present case, there is no
dispute that when respondents conducted their
mass actions on April 3 to 6, 2000, the
proceedings before the Secretary of Labor
were still pending as both parties filed motions
for reconsideration of the March 24, 2000
Order. Clearly, respondents knowingly
violated the aforesaid provision by holding a
strike in the guise of mass demonstration (Solid
Bank Corp. Ernesto U. Gamier, et al. and Solid
Bank Corp., et al. vs. Solid Bank Union and its
Dismissed Officers and Members, et al. G.R.
No. 159460 and G.R. No. 159461, November
15, 2010).
9. Illegal strike
The Supreme Court also cited the 6
categories of illegal strikes which are:
1. When it is contrary to a specific prohibition
of law, such as strike by employees performing
governmental functions; or
2. When it violates a specific requirement of
law, [such as Article 263 of the Labor Code on
the requisites of a valid strike]; or
3. When it is declared for an unlawful
purpose, such as inducing the employer to
commit an unfair labor practice against nonunion employees; or
5. When it is declared in violation of an

existing injunction, [such as injunction,
prohibition, or order issued by the DOLE
Secretary and the NLRC under Art. 263 of the
Labor Code]; or
A strike may be regarded as invalid

although the labor union has complied with
the strict requirements for staging one as
provided in Article 263 of the Labor Code
when the same is held contrary to an existing
agreement, such as a no strike clause or
conclusive arbitration clause. Here, the CBA
between the parties contained a no strike, no
lockout provision that enjoined both the
Union and the Company from resorting to the
use of economic weapons available to them
under the law and to instead take recourse to
voluntary arbitration in settling their disputes.
No law or public policy prohibits the Union
and the Company from mutually waiving their
respective right to strike and lockout, which
are otherwise available to them under the law,
in favor of voluntary arbitration (C. Alcantara
& Sons, Inc. vs. Court of Appeals /
Nagkahiusang Mamumuno sa Alsons-SPFL
(NAMAAL-SPFL), et al. vs. C. Alcantara & Sons,
Inc. G.R. No. 155109/G.R. No. 155135/G.R.
No. 179220, September 29, 2010).
The petitioners were charged with
conducting an illegal strike, not a mass leave,
without specifying the exact acts that the
company considers as constituting an illegal
strike or violative of company policies. Such
allegation falls short of the requirement in King
of Kings Transport, Inc. of a detailed
narration of the facts and circumstances that
will serve as basis for the charge against the
employees. A bare mention of an illegal
strike will not suffice. Further, while
Biomedica cites the provisions of the company
policy which petitioners purportedly violated,
it failed to quote said provisions in the notice
so petitioners can be adequately informed of
Page 65 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

the nature of the charges against them and
intelligently file their explanation and defenses
to said accusations (Alex Q. Naranjo, et al. vs.
Biomedica Health Care, Inc., et al. G.R. No.
193789. September 19, 2012).
a) Liability of union officers
The law makes a distinction between
union members and union officers. A union
member who merely participates in an illegal
strike may not be terminated from
employment. It is only when he commits
illegal acts during a strike that he may be
declared to have lost employment status. In
contrast, a union officer may be terminated
from employment for knowingly participating
in an illegal strike or participates in the
commission of illegal acts during a strike. The
law grants the employer the option of
declaring a union officer who participated in
an illegal strike as having lost his employment.
It possesses the right and prerogative to
terminate the union officers from service
(Visayas Community Medical Center (VCMC)
formerly known as Metro Cebu Commnunity
Hospital (MCCH) v. Erma Yballe, et al., G.R.
No. 196156, January 15, 2014).
b) Liability of ordinary workers
A distinction exists between the
ordinary workers liability for illegal strike and
that of the union officers who participated in
it. The ordinary worker cannot be terminated
for merely participating in the strike. There
must be proof that he committed illegal acts
during its conduct. On the other hand, a union
officer can be terminated upon mere proof
that he knowingly participated in the illegal
strike. Moreover, the participating union
officers have to be properly identified. In the
present case, with respect to those union
officers whose identity and participation in the
strike having been properly established, the
termination was legal (Yolito Fadriquelan, et
al. vs. Monterey Foods Corporation/Monterey
Foods Corporation v. Bukluran ng mga
Manggagawa sa Monterey-ILAW, et al., G.R.
No. 178409/G.R. No. 178434, June 8, 2011)
As a general rule, when just causes for
terminating the services of an employee exist,
the employee is not entitled to separation pay
because lawbreakers should not benefit from
their illegal acts. The rule, however, is subject
to exceptions. Here, not only did the Court
declare the strike illegal, rather, it also found

the Union officers to have knowingly
participated in the illegal strike. Worse, the
Union members committed prohibited acts
during the strike. Thus, as the Court has
concluded in other cases it has previously
decided, such Union officers are not entitled to
the award of separation pay in the form of
financial assistance (C. Alcantara & Sons, Inc.
vs. Court of Appeals, G.R. No. 155109/G.R.
No. 155135/G.R. No. 179220. March 14,
2012).
Since the Unions strike has been
declared illegal, the Union officers can be
terminated from employment for their actions.
This includes the shop stewards who cannot be
shielded from the coverage of Article 264 of
the Labor Code since the Union appointed
them as such and placed them in positions of
leadership and power over the men in their
work units. As regards the rank and file Union
members,
Article
264
provides
that
termination from employment is not
warranted by the mere fact that a union
member has taken part in an illegal strike. It
must be shown that such union member,
clearly identified, performed an illegal act or
acts during the strike. The striking Union
members allegedly committed the following
prohibited acts:
a. They threatened, coerced, and intimidated
non-striking employees, officers, suppliers and
customers;
b. They obstructed the free ingress to and
egress from the company premises; and
c. They resisted and defied the implementation
of the writ of preliminary injunction issued
against the strikers.
The mere fact that the criminal
complaints against them were subsequently
dismissed does not extinguish their liability
under the Labor Code. Nor does such dismissal
bar the admission of the affidavits, documents,
and photos presented to establish their identity
and guilt during the hearing of the petition to
declare the strike illegal (C. Alcantara & Sons,
Inc. vs. Court of Appeals / Nagkahiusang
Mamumuno sa Alsons-SPFL (NAMAAL-SPFL),
et al. vs. C. Alcantara & Sons, Inc. G.R. No.
155109/G.R. No. 155135/G.R. No. 179220,
September 29, 2010).
Page 66 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

c) Liability of employer
Tire & Rubber v. CA, G.R. 128632, Aug. 5,

1999).
d) Waiver of illegality of strike

When management and union are in
pari delicto, the contending parties must be
brought back to their respective positions
before the controversy; that is, before the
strike. In this case, managements fault arose
from the fact that a day after the union filed a
petition for certification election before the
DOLE, it hit back by requiring all its employees
to undergo a compulsory drug test. Indeed,
the timing of the drug test was suspicious.
Moreover, management engaged in a runaway
shop when it began pulling out machines from
the main building (AER building) to the
compound (AER-PSC premises) located on
another street on the pretext that the main
building was undergoing renovation. On the
other hand, like management, the union and
the affected workers were also at fault for
resorting to a concerted work slowdown and
walking out of their jobs in protest of their
illegal suspension. It was also wrong for them
to have forced their way to the AER-PSC
premises to try to bring out the boring
machines. Adding to the injury was the fact
that the picketing employees prevented the
entry and exit of non-participating employees
and possibly AERs clients to the premises.
Thus, the Supreme Court affirmed the ruling of
the Court of Appeals favoring the
reinstatement of all the complaining
employees, including those who tested positive
for
illegal drugs, without backwages
(Automotive Engine Rebuilders, Inc. et al. v.
Progresibong Unyon ng mga Manggagawa sa
AERG.R. No. 160138/G.R. No. 160192. July
13, 2011).
10. Injunctions
a) Requisites for labor injunctions
b) Innocent bystander rule
The innocent by stander must show:
1. Compliance with the grounds specified in
Rule 58 of the Rules of Court, and
2. That it is entirely different from, without
any connection whatsoever to, either party to
the dispute and, therefore, its interests are
totally foreign to the context thereof (MSF
A party, by filing its 3rd party claim

with the deputy sheriff, it submitted itself to
the jurisdiction of the NLRC acting through the
LA. The broad powers granted to the LA and
to the NLRC by Art. 217, 218 and 224 of the
LC can only be interpreted as vesting in them
jurisdiction over incidents arising from, in
connection with or relating to labor disputes,
as the controversy under consideration, to the
exclusion of the regular courts. The RTC, being
a coequal body of the NLRC, has no
jurisdiction to issue any restraining order or
injunction to enjoin the execution of any
decision of the latter (Deltaventures v. Cabato.
G.R. No. 118216, Mar. 9, 2000).
VIII. Procedure and Jurisdiction
A. Labor Arbiter
1. Jurisdiction
Original and Exclusive Jurisdiction over the
following:
1. Unfair Labor practices;
2. Termination disputes;
3. Cases that workers may file involving
wages, rates of pay, hours of work and
other
terms
and
conditions
of
employment, if accompanied with claim
for reinstatement;
4. Claims for actual, moral, exemplary and
other forms of damages arising from the
from the employeremployee relations;
5. Cases arising from any violation of Article
264 of this Code, including questions
involving the legality of strikes and
lockouts; and
6. Except
claims
for
Employees
Compensation, Social Security, Medicare
and maternity benefits, all other claims
arising
from
employeremployee
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.
The jurisdiction of labor arbiters, as
well as of the NLRC, is limited to disputes
arising
from
an
employer-employee
relationship which can only be resolved by
Page 67 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

reference to the Labor Code, other labor
statutes, or their collective bargaining
agreement. U-Bix's complaint was one to
collect sum of money based on civil laws on
obligations and contract, not to enforce rights
under the Labor Code, other labor statutes, or
the collective bargaining agreement (U-Bix
Corporation, et al. vs. Valerie Anne H.
Hollero. G.R. No. 177647, October 31, 2008).
a) versus Regional Director
2. Reinstatement pending appeal
The spirit of the rule on reinstatement
pending appeal animates the proceedings once
the Labor Arbiter issues the decision containing
an order of reinstatement. The immediacy of
its execution needs no further elaboration.
Reinstatement pending appeal necessitates its
immediate execution during the pendency of
the appeal, if the law is to serve its noble
purpose. At the same time, any attempt on the
part of the employer to evade or delay its
execution should not be countenanced. After
the labor arbiters decision is reversed by a
higher tribunal, the employee may be barred
from collecting the accrued wages, if it is
shown that the delay in enforcing the
reinstatement pending appeal was without
fault on the part of the employer (Juanito A.
Garcia and Alberto Dumago v. PAL. G.R No.
164856, January 20, 2009).
3. Requirements to perfect appeal to NLRC
a. requisites to perfect
Evident it is from the foregoing that an
appeal from rulings of the Labor Arbiter to the
NLRC must be perfected within ten (10)
calendar days from receipt thereof, otherwise
the same shall become final and executory. In
a judgment involving a monetary award, the
appeal shall be perfected only upon (1) proof
of payment of the required appeal fee and (2)
posting of a cash or surety bond issued by a
reputable bonding company and (3) filing of a
memorandum of appeal. A mere notice of
appeal without complying with the other
requisites mentioned shall not stop the running
of the period for perfection of appeal (Stolt
Nielsen Marine Services Inc. (now Stolt-Nielsen
Transportation Group Inc.) vs. NLRC. G.R.
No. 147623,December 13, 2005).
b. when there is substantial compliance

There was substantial compliance with
the NLRC Rules of Procedure when the
respondents PAL Maritime Corporation and
Western Shipping Agencies, Pte., Ltd. filed,
albeit belatedly, the Joint Declaration Under
Oath, which is required when an employer
appeals from the Labor Arbiters decision
granting a monetary award and posts a surety
bond. Under the NLRC rules, the following
requisites are required to perfect the
employers appeal: (1) it must be filed within
the reglementary period; (2) it must be under
oath, with proof of payment of the required
appeal fee and the posting of a cash or surety
bond; and (3) it must be accompanied by
typewritten or printed copies of the
memorandum of appeal, stating the grounds
relied upon, the supporting arguments, the
reliefs prayed for, and a statement of the date
of receipt of the appealed decision, with proof
of service on the other party of said appeal. If
the employer posts a surety bond, the NLRC
rules further require the submission by the
employer, his or her counsel, and the bonding
company of a joint declaration under oath
attesting that the surety bond posted is
genuine and that it shall be in effect until the
final disposition of the case.
In the case at bar, the respondents
posted a surety bond equivalent to the
monetary award and filed the notice of appeal
and the appeal memorandum within the
reglementary period. When the NLRC
subsequently directed the filing of a Joint
Declaration Under Oath, the respondents
immediately complied with the said order.
There was only a late submission of the Joint
Declaration. Considering that there was
substantial compliance with the rules, the same
may be liberally construed. The application of
technical rules may be relaxed in labor cases to
serve the demands of substantial justice
(Rolando L. Cervantes vs. PAL Maritime
Corporation
and/or
Western
Shipping
Agencies. G.R. No. 175209. January 16, 2013).
c. completeness of service by registered mail
The Supreme Court also overruled the
respondents contention that UE filed its
appeal to the NLRC beyond the required ten
(10)-day period. For completeness of service
by registered mail, the reckoning period starts
either from the date of actual receipt of the
Page 68 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

mail by the addressee or after five (5) days
from the date he or she received the first
notice from the postmaster. In this case, the
respondents averred that, on March 17, 2005,
the postmaster gave UEs counsel a notice to
claim the mail containing the Labor Arbiters
decision. The respondents claimed that UEs
counsel was deemed in receipt of the decision
5 days after the giving of the notice, or on
March 22, 2005. Thus, according to the
respondents, when UE filed its appeal to the
NLRC on April 14, 2005, the 10-day
reglementary period had already lapsed. The
Supreme Court, however, ruled that there
must be conclusive proof that the registry
notice was received by or at least served on
the addressee. In this case, the records did not
show that UEs counsel in fact received the
alleged registry notice requiring him to claim
the mail. On the other hand, UE was able to
present a registry return receipt showing that
its counsel actually received a copy of the
Labor Arbiters decision on April 4, 2005.
Reckoned from this date, the 10-day
reglementary period had not yet lapsed when
UE filed its appeal to the NLRC on April 14,
2005. (University of the East, et al. v. Analiza
F. Pepanio and Mariti D. Bueno. G.R No.
193897, January 23, 2013).
d. bond
i. Filing of bond, jurisdictional
Paragraph 2, Article 223 of the Labor
Code provides that [i]n case of a judgment
involving a monetary award, an appeal by the
employer may be perfected only upon the
posting of a cash or surety bond issued by a
reputable bonding company duly accredited
by the NLRC in the amount equivalent to the
monetary award in the judgment appealed
from. Contrary to the respondents claim, the
issue of the appeal bonds validity may be
raised for the first time on appeal since its
proper filing is a jurisdictional requirement.
The requirement that the appeal bond should
be issued by an accredited bonding company is
mandatory and jurisdictional. The rationale of
requiring an appeal bond is to discourage the
employers from using an appeal to delay or
evade the employees just and lawful claims. It
is intended to assure the workers that they will
receive the money judgment in their favor if
the employers appeal is dismissed (Wilgen
Loon, et al. v. Power Master, Inc., et al. G.R.
No. 189404, December 11, 2013).
ii. Revocation of bond, prospective

application
The respondents filed a surety bond
issued
by
Security
Pacific
Assurance
Corporation (Security Pacific) on June 28,
2002. At that time, Security Pacific was still an
accredited bonding company. However, the
NLRC revoked its accreditation on February
16, 2003. This subsequent revocation should
not prejudice the respondents who relied in
good faith on the then subsisting accreditation
of Security Pacific. In Del Rosario v. Philippine
Journalists, Inc. it was held that a bonding
companys revocation of authority is
prospective in application. Nonetheless, the
respondents should post a new bond issued by
an accredited bonding company in compliance
with paragraph 4, Section 6, Rule 6 of the
NLRC Rules of Procedure, which states that
[a] cash or surety bond shall be valid and
effective from the date of deposit or posting,
until the case is finally decided, resolved or
terminated or the award satisfied (Wilgen
Loon, et al. v. Power Master, Inc., et al., G.R.
No. 189404, December 11, 2013).
iii. What constitutes
amount; the Mcburnie Rule
reasonable
To ensure the provisions of Section 6,

Rule VI of the NLRC Rules that give parties the
chance to seek a reduction of the appeal bond
are effectively carried out, without however
defeating the benefits of the bond requirement
in favor of a winning litigant, all motions to
reduce bond that are filed with the NLRC shall
be accompanied by the posting of a cash or
surety bond equivalent to 10% of the
monetary award that is subject of the appeal,
which shall provisionally be deemed the
reasonable amount of the bond in the
meantime that an appellants motion is
pending resolution by the Commission. Only
after the posting of a bond in the required
percentage shall an appellants period to
perfect an appeal under the NLRC Rules be
deemed suspended.
The percentage of the bond that is set
by this guideline is merely provisional. The
NLRC retains its authority and duty to resolve
the motion and determine the final amount of
bond that shall be posted by the appellant, still
in accordance with the standards of
meritorious grounds and reasonable
amount.
Page 69 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

Should the NLRC after considering the
motions merit, determine that a greater
amount or the full amount of the bond needs
to be posted by the appellant, then the party
shall comply accordingly. The appellant shall
be given a period of 10 days from notice of
the NLRC order within which to perfect the
appeal by posting the required appeal bond.
(Andrew Mcburnie v. Eulalio Ganzon. GR
Nos. 178034, 178117 and GR No. 186984-85,
2013).
decide all disciplinary action cases and other

special cases administrative in character
involving such workers. The obvious intent of
Republic Act No. 8042 was to have the POEA
focus its efforts in resolving all administrative
matters affecting and involving such workers.
The NLRC had no appellate jurisdiction to
review the decision of the POEA in
disciplinary cases involving overseas contract
workers (Eastern Mediterranean Maritime
Ltd., et al. vs. Estanislao Surio, et al. G.R. No.
154213, August 23, 2012).
B. National
(NLRC)
The NLRC acquires jurisdiction over

parties in cases before it either by summons
served on them or by their voluntary
appearance before its Labor Arbiter. Here,
while the Union insists that summons were
not properly served on the impleaded Union
members with respect to the Companys
amended petition that sought to declare the
strike illegal, the records show that they were
so served. The Return of Service of Summons
indicated that 74 out of the 81 impleaded
Union members were served with summons.
But they refused either to accept the
summons or to acknowledge receipt of the
same. Such refusal cannot of course frustrate
the NLRCs acquisition of jurisdiction over
them. Besides, the affected Union members
voluntarily entered their appearance in the
case when they sought affirmative relief in the
course of the proceedings like an award of
damages in their favor (C. ALCANTARA &
SONS, INC. v. COURT OF APPEALS, et
al.G.R. No. 155109, G.R. No. 155135, G.R.
No. 179220, September 29, 2010).
Labor Relations Commission
1. Jurisdiction
a. Exclusive and Original Jurisdiction:
i. Certified cases cases certified to it for
compulsory
arbitration
by
the
Secretary of Labor under Art. 269, or
the President under Art. 270;
ii. Injunction cases under Arts. 224 and
270;
iii. Contempt cases; and
iv. Verified petition.
b. Exclusive Appellate:
i. Cases decided by Labor Arbiters under
Art. 223 of the Labor Code and Sec.
10, RA 8042 (Migrant Workers Act);
and
ii. Cases decided by the Regional Offices of
DOLE in the exercise of its
adjudicatory function under Art. 129 of
the Labor Code over monetary claims
of workers amounting to not more
than Php5,000.00.
The NLRC has jurisdiction to
determine, preliminarily, the parties rights
over a property when it is necessary to
determine an issue related to rights or claims
arising
from
an
employer-employee
relationship (Milan et al. vs. NLRC, G.R. No.
202961, February 4, 2015).
Although Republic Act No. 8042,
through its Section 10, transferred the original
and exclusive jurisdiction to hear and decide
money claims involving overseas Filipino
workers from the POEA to the Labor Arbiters,
the law did not remove from the POEA the
original and exclusive jurisdiction to hear and
2. Effect of NLRC reversal of Labor Arbiters

order of reinstatement
3. Remedies
4. Certified cases
C. Bureau of Labor Relations Med-Arbiters
1. Jurisdiction (original and appellate)
D. National Conciliation and Mediation Board
1. Nature of proceedings
2. Conciliation vs. Mediation
3. Preventive mediation
E. DOLE Regional Directors
1. Jurisdiction
Page 70 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

F. DOLE Secretary
1. Visitorial and enforcement powers
2. Power to suspend/effects of
termination
3. Assumption of jurisdiction
4. Appellate jurisdiction
5. Voluntary arbitration powers
G. Grievance Machinery and Voluntary
Arbitration
1. Subject matter of grievance
2. Voluntary Arbitrator
a) Jurisdiction
b) Procedure
c) Remedies
H. Court of Appeals
1. Rule 65, Rules of Court
I. Supreme Court
1. Rule 45, Rules of Court
General rule:
It is a settled rule in this jurisdiction
that only questions of law are allowed in a
petition for review on certiorari. The Courts
power of review in a Rule 45 petition is
limited to resolving matters pertaining to any
perceived legal errors, which the CA may have
committed in issuing the assailed decision. In
reviewing the legal correctness of the CAs
Rule 65 decision in a labor case, the Court
examines the CA decision in the context that it
determined whether or not there is grave
abuse of discretion in the NLRC decision
subject of its review and not on the basis of
whether the NLRC decision on the merits of
the case was correct (Universal Robina Sugar
Milling Corporation v. Ferdinand Acibo. GR
No. 186439, January 15, 2014).
Exception:
The Courts jurisdiction in cases
brought before it from the CA via Rule 45 of
the Rules of Court is generally limited to
reviewing errors of law. The Court is not the
proper venue to consider a factual issue as it is
not a trier of facts. This rule, however, is not
ironclad and a departure therefrom may be
warranted where the findings of fact of the CA
are contrary to the findings and conclusions of
the NLRC and LA, as in this case. In this regard,
there is therefore a need to review the records
to determine which of them should be
preferred as more conformable to evidentiary
facts (INC Shipmanagement, Inc. et al. v
Alexander L. Moradas. GR No. 178564,

January 15, 2014).
While generally, only questions of law
can be raised in a petition for review on
certiorari under Rule 45 of the Rules of Court,
the rule admits of certain exceptions, namely:
(1) when the findings are grounded entirely on
speculations, surmises, or conjectures; (2)
when the inference made is manifestly
mistaken, absurd, or impossible; (3) when
there is a grave abuse of discretion; (4) when
the judgment is based on misappreciation of
facts; (5) when the findings of fact are
conflicting; (6) when in making its findings, the
same are contrary to the admissions of both
appellant and appellee; (7) when the findings
are contrary to those of the trial court; (8)
when the findings are conclusions without
citation of specific evidence on which they are
based; (9) when the facts set forth in the
petition as well as in the petitioners main and
reply briefs are not disputed by the
respondent; and (10) when the findings of fact
are premised on the supposed absence of
evidence and contradicted by the evidence on
record. The illegality of petitioners dismissal
was an issue that was squarely raised before
the NLRC. When the NLRC decision was
reversed by the Court of Appeals, there was a
situation where the findings of facts are
conflicting. The petition for review filed by
the Petitioner comes within the purview of
exception (5) and by analogy, exception (7)
(Mylene Carvajal vs. Luzon Development Bank
and/or Oscar Z. Ramirez. G.R. No. 186169,
August 1, 2012).
As a general rule, the Supreme Court is
not a trier of facts and a petition for review on
certiorari under Rule 45 of the Rules of Court
must exclusively raise questions of law.
Moreover, if factual findings of the National
Labor Relations Commission and the Labor
Arbiter have been affirmed by the Court of
Appeals, the Supreme Court accords them the
respect and finality they deserve. It is wellsettled and oft-repeated that findings of fact of
administrative agencies and quasi-judicial
bodies, which have acquired expertise because
their jurisdiction is confined to specific matters,
are generally accorded not only respect, but
finality when affirmed by the Court of
Appeals. Nevertheless, the Supreme Court will
not hesitate to deviate from what are clearly
procedural guidelines and disturb and strike
down the findings of the Court of Appeals and
Page 71 of 72
BAR OPERATIONS 2015
Green Notes 2015
Labor Law

those of the labor tribunals if there is a
showing that they are unsupported by the
evidence on record or there was a patent
misappreciation of facts. Indeed, that the
impugned decision of the Court of Appeals is
consistent with the findings of the labor
tribunals does not per se conclusively
demonstrate the correctness thereof. By way
of exception to the general rule, the Supreme
Court will scrutinize the facts if only to rectify
the prejudice and injustice resulting from an
incorrect assessment of the evidence presented
(Timoteo H. Sarona vs. National Labor
Relations Commission, Royale Security Agency,
et al., G.R. No. 185280, January 18, 2011).
J. Prescription of actions
The day the action may be brought is
the day a claim starts as a legal possibility. In
the present case, January 1, 2000 was the date
that respondent Pingol was not allowed to
perform his usual and regular job as a
maintenance technician. He, however only
filed the complaint for constructive dismissal
and monetary claims four years later or on
March 29, 2004. As correctly held by the LA,
complainant's cause of action has already
prescribed. Respondent's contention that the
prescriptive period was interrupted when he
made follow-ups is also untenable. Like other
causes of action, the prescriptive period for
money claims is subject to interruption, and in
the absence of an equivalent Labor Code
provision for determining whether the said
period may be interrupted, Art. 1155 provides
that the prescription of an action is interrupted
by (a) the filing of an action, (b) written
extrajudicial demand by the creditor, and (c) a
written acknowledgment of the debt by the
debtor. In this case, respondent Pingol never
made any written extrajudicial demand.
Neither did petitioner make any written
acknowledgment of its alleged obligation.
Thus, the claimed "follow-ups" could not have
validly tolled the running of the prescriptive
period. It is worthy to note that respondent
never presented any proof to substantiate his
allegation of follow-ups. (Philippine Long
Distance Telephone Company v. Roberto
Pingol. GR No. 182622, September 8, 2010).
reflected in his payslips, hence, it is assumed

that he learned of it at the time he received his
monthly paychecks. As thus correctly ruled by
both the NLRC and the appellate court, only
those illegal deductions made from 1997 to
1999 when he was dismissed can be claimed,
he having filed his complaint only in February
2000. Per his own computation and as
properly adopted by the NLRC in its assailed
Resolution dated March 10, 2004, petitioner is
thus entitled to reimbursement of P88,000.00.
To properly construe Article 291 of the
Labor Code, it is essential to ascertain the time
when the third element of a cause of action
transpired.
Stated
differently,
in
the
computation of the three-year prescriptive
period, a determination must be made as to
the period when the act constituting a
violation of the workers right to the benefits
being claimed was committed. For if the cause
of action accrued more than three (3) years
before the filing of the money claim, said cause
of action has already prescribed in accordance
with Article 291 ( Virgilio Anabe v. Asian
Construction. GR No. 183233, December 23,
2009).
In the present case, the day came

when petitioner learned of Asiakonstrukts
deduction from his salary of the amount of
advances he had received but had, by his
claim, been settled, the same having been
Page 72 of 72
BAR OPERATIONS 2015
--God Bless--

Labor Law Green Notes 2015

Uploaded by

Copyright:

Available Formats

Labor Law Green Notes 2015

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Labor Law Green Notes 2015

Uploaded by

Copyright:

Available Formats

Green Notes 2015

Compiled by: The Barristers Club 2015

Labor Law and Social Legislation

Secs. 9, 10, 11, 13, 14, 18, 20, Art. II

Secs. 1, 4, 7, 8, 10, 16, 18(2), Art. III

An erring seaman is given a written

Secs. 1, 2, 3, 13, 14, Art. XII

Green Notes 2015

Compiled by: The Barristers Club 2015

Consistent with the States avowed

facilities and opportunities that will enhance

B. What are the Civil Code provisions related

The preferential treatment given by

to labor, promote full employment, ensure

Green Notes 2015

Compiled by: The Barristers Club 2015

interpretation of the provisions of this Code,

It is a document issued by the DOLE

If doubts exist between the evidence

2. Their relatives within the 4th civil

4. Art. 211. Record of Death or

5. Art. 212. Notice of Sickness, Injury

6. Art. 255. Unfair Labor Practices of

2. Whose license or authority has been

7. Art. 277. Applicability to Farm

A. Recruitment of Local and Migrant Workers

Which has not been issued a valid

What are the grounds for revocation of

a) License vs. authority

2. Violations of the conditions of

It is issued by DOLE authorizing a

3. Engaging in acts of misrepresentation for the purpose of securing a

4. Engaging in the recruitment or

Green Notes 2015

Compiled by: The Barristers Club 2015

b) Essential elements of illegal recruitment

b. Any of prohibited practices

c) Simple illegal recruitment

d) Illegal recruitment in large scale

e) Illegal recruitment as economic sabotage

f) Illegal recruitment vs. Estafa

It is not required that it be shown that

Promotionv. Cuaresma, G.R. Nos. 182978-79,

Green Notes 2015

Compiled by: The Barristers Club 2015

3. To ensure full regulation of

(Leonor v. Filipinas Compania, 48 OG 243)

B. Regulation and Enforcement

h) Pre-termination of contract of migrant

1. Suspension or cancellation of license or

What are the effects of termination of overseas

What are the grounds for suspension or

The worker shall be entitled to the full

1. Prohibited acts under Art. 34;

IV, POEA Rules).

2. Regulatory and visitorial powers of the

What is the ban on direct-hiring?

General Rule: An employer may only hire

best possible terms