Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

from the airport or seaport in the port of

Applicability of the Labor Code hire.” We adhere to the terms and conditions
Art. 6 of the Labor Code: of the contract so as to credit the valid prior
stipulations of the parties before the
“All rights and benefits granted to controversy started. Else, the obligatory
workers under this Code shall, except as force of every contract will be useless.
may otherwise be provided herein, apply Parties are bound not only to the fulfillment
alike to all workers, whether agricultural of what has been expressly stipulated but
also to all the consequences which,
or non-agricultural.”
according to their nature, may be in keeping
with good faith, usage and law.

1. Workers in agricultural or non-agricultural NOTE: Those employees enumerated under Art. 82

are covered. of the Labor Code are only exempted from the
2. Profit or non-profit organization as long as benefits under Title 1, Book 3 (Working Conditions
the tests to determine the employer- and Rest Periods).
employee relationship are met.
 Government employees
GR: The Labor Code apply where employer-  Managerial employees
employee relationship exists.  Field personnel
 Members of the family of the employer who
XPNS: Labor Laws still apply even without are dependent on him for support
employer-employee relationship in the following  Domestic helpers
cases:  Persons in personal service of another
1. OFWs not yet deployed but signed POEA  Workers paid by results
approved contract under Sec. 10 of RA 8042;
2. Permissible Job Contracting (Art. 106-109, as
amended by DO No. 174); Who are not covered by Labor Laws?
3. GOCCs without an original charter;
1. Government employees covered by CSC
4. Recruitment and Placement (in case of illegal
2. Corporate Officers
recruitment or in relation to Sec. 10 of RA
a. President;
8042)
b. Treasurer;
5. Putative employment (under Art. 219: an
c. Secretary;
employee with current labor dispute)
d. Other officers provided in the bylaws;
6. Officers of a Federations (exercise to the
e. Compliance officer if vested with
right to self-organization [affiliation])
public interest. [Sec. 24 of RCC]
Stolt-Nielsen Transportation Group, Inc. vs. 3. Employees/employers of foreign government
Medequillo, Jr. (January 18, 2012) not doing business in the Philippines
4. International agencies or organizations,
- Even before the start of any employer-
provided that they are granted immunity
employee relationship, contemporaneous
5. Disputes involving ecclesiastical matters
with the perfection of the employment
6. Independent Contractors
contract was the birth of certain rights and
obligations, the breach of which may give Corporate Officers
rise to a cause of action against the erring
Question: How to determine whether a case is
party.
corporate or a labor dispute?
- The POEA Standard Employment Contract
provides that employment shall commence
“upon the actual departure of the seafarer

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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

-
correlative rights and obligations under
Answer: Two tests to determine:
the Corporation Code and the internal
1. Nature of relationship test and intra-corporate regulatory rules of
- is the person included in the list of the corporation.
officers in the RCC/charter/bylaws
International Agencies or Organizations
- manner of the creation of the office
- how was the office has been filled (is it Question: Why are they not covered by the Labor
thru appointment via board resolution, Laws?
etc.)
Answer: They are international organizations with
2. Nature of the controversy
global clientele and they do not cater anyone in
Cacho vs. Balagtas (Feb.7, 2018) particular. They are immune from suit so that their
operations will not be interrupted. (no interference)
- A two (2)-tier test must be employed to
determine whether an intra-corporate Question: Does it mean that their employees have
controversy exists in the present case, no legal recourse?
viz.:
Answer: No, under Sec. 21 of the Convention on
(a) the relationship test, and
the Privileges and Immunities of the United Nations,
(b) the nature of the controversy test
all international organizations must provide
- A dispute is considered an intra-
grievance mechanism/dispute settlement
corporate controversy under the
mechanism. Further, if the situation escalated to
relationship test when the relationship
something worse, the State can withdraw the
between or among the disagreeing
immunity.
parties is any one of the following:
(a) between the corporation, Disputes Involving Ecclesiastical Matters
partnership, or association and the
public; - Separation of the Church and State
(b) between the corporation, - These religious matters cannot be
partnership, or association and its interfered with by the State.
stockholders, partners, members, or -
officers; - Ecclesiastical matter involves the
(c) between the corporation, partnership, relationship between the church and its
or association and the State as far as its members of faith, religious doctrines,
franchise, permit or license to operate is worship, and governance of the
concerned; and congregation. It is within the tenet of
(d) among the stockholders, partners, or religious organization so the State shall
associates. not interfere. Matter that involves church
- One shall be considered a corporate dogma. (Pasay City Alliance Church vs.
officer only if two (2) conditions are met, Benito)
viz.: Austria vs. NLRC (Aug, 16, 1999)
(1) the position occupied was created by
charter/bylaws, and - While the State is prohibited from
(2) the officer was elected (or appointed) interfering in purely ecclesiastical affairs,
by the corporation’s board of directors to the Church is likewise barred from
occupy said position. meddling in purely secular matters.
- Under the nature of the controversy - While the matter at hand relates to the
test, the disagreement must not only be church and its religious minister, it does
rooted in the existence of an intra- not ipso facto give the case of a religious
corporate relationship, but must as well significance.
pertain to the enforcement of the parties’
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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

- Simply stated, what is involved here is Independent Contractors

the relationship of the church as an
Two kinds of Independent Contractors
employer and the minister as an
employee. It is purely secular and has no 1. Those engaged in legitimate contracting;
relation whatsoever with the practice of 2. Those who have unique skills, celebrity
faith, worship or doctrines of Church. status, with greater bargaining power and
works in his own discretion not subject to
Amari vs. Villaflor (Feb. 17, 2020)
control.
- Dismissal is inherent in religious
congregations as they have the power to
discipline their members. As to the third Employee
element, the Court find that dismissal is
inherent in religious congregations as Question: Can a person who belongs to the
they have the power to discipline their workforce, but unemployed, can still be considered
members. Admittedly, the nature of as a worker?
respondent’s position as a missionary Answer: Yes. Art. 13(a) of the Labor Code states
calls on the exercise of supervision by the “worker means any member of the labor force,
church of which he is a member whether employed or unemployed.” It is applicable
considering that the basis of the in the concept of recruitment and placement.
relationship between a religious
corporation and its members is the Labor Standards definition of employee:
latter’s absolute adherence to a common
Art. 97(c) of the Labor Code:
religious or spiritual belief. Although
respondent’s removal is clear from the
"Employee" includes any individual
November 24, 2011 Letter, this alone
employed by an employer.
cannot establish an employer-employee
relationship.
- The matter of terminating an employee,
which is purely secular in nature, is "Employ" includes to suffer or permit to work. [Art.
different from the ecclesiastical act of 97(e) of LC]
expelling a member from the religious Suffer to work
congregation. Petitioners insist that this
case is an ecclesiastical affair as there is - The initiative comes from the employer.
no employer-employee relationship - It is the employer who is requiring the
between BSAABC/MBIS and respondent. employee to work.
In order to settle the issue, it is Permit to work
imperative to determine the existence of
an employer-employee relationship. We - The initiative comes from the employee,
have previously ruled that in an illegal but the employer has no disagreement.
dismissal case, the onus probandi rests
NOTE: These terms are important in order to
on the employer to prove that its
determine benefits of an employee such as overtime
dismissal of an employee was for a valid
pay. (The burden of proof lies with the employee,
cause. However, before a case for illegal
since it happens not in the ordinary course of
dismissal can prosper, an employer-
business.)
employee relationship must first be
established. Evidence to present: Suffered to work on that
particular day to render OT or been permitted by the
employer to render OT.

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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

Social Legislation definition of employee: Labor Relations definition of employee:

Rule 12, Sec. 4 of IRR of RA 11199 (Social Art. 219(f) of the Labor Code:
Security Act of 2018):
"Employee" includes any person in the
“Employee - Any person who performs employ of an employer. The term shall
services for an employer in which either not be limited to the employees of a
or both mental or physical efforts are particular employer, unless the Code so
used and who receives compensation for explicitly states. It shall include any
such services, where there is an individual whose work has ceased as a
employer-employee relationship, result of or in connection with any current
provided that a self-employed person labor dispute or because of any unfair
shall be both employee and employer at labor practice if he has not obtained any
the same time. other substantially equivalent and regular
employment.
As a general rule, the determination of
the existence or non-existence of an
employer-employee relationship for the NOTE: Sec. 1, Rule 1, Book V of the IRR of Labor
purpose of determining the coverage in Code provides that in relation to Art. 219, it added a
condition that the dismissed employee must have
the SSS shall be within the sole
challenged the legality of his dismissal at an
jurisdiction of the Commission.”
appropriate forum. (putative employee status for as
long as the dispute is being litigated)

Question: Why is there a need of the concept of

NOTE: Book IV of Labor Code is the Social putative employment?
Legislation Aspect.
Answer: It is important for the reinstatement,
Art. 173(g) of the Labor Code: computation of back wages he is entitled if he was
not dismissed, award of separation pay in lieu of
"Employee" means any person reinstatement. (as if the employment was not
compulsorily covered by the GSIS under disrupted by the termination or dismissal). In
Commonwealth Act Numbered One addition, in case of a certification election as well as
Hundred Eighty-Six, as amended, to participate in a strike vote.
including the members of the Armed
Employer
Forces of the Philippines, and any person
employed as casual, emergency, Labor Standards definition of employer:
temporary, substitute or contractual, or Art. 97(b) of the Labor Code:
any person compulsorily covered by the
SSS under Republic Act Numbered Eleven "Employer" includes any person acting directly
Hundred Sixty-One, as amended. or indirectly in the interest of an employer in
relation to an employee and shall include the
government and all its branches, subdivisions
and instrumentalities, all government-owned or
controlled corporations and institutions, as well
as non-profit private institutions, or
organizations.

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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

NOTE: There is a mention of government Consensual and contractual

employees under the definition of employer in Art.
- There is voluntary, freely, and knowingly
97 because GOCC without an original charter is not
entered an agreement
covered by the CSC. Further, under Art. 254, it states
that “Employees of government corporations Involuntary servitude – no consent on the part of
established under the Corporation Code shall have employee.
the right to organize and to bargain collectively with
Oppression – no consent on the part of the
their respective employers. All other employees in
employer.
the civil service shall have the right to form
associations for purposes not contrary to law.” Question: Is an employment contract a contract of
adhesion?
Luz Lumanta et.al. vs. NLRC (Feb. 8, 1989)
Answer: Yes, though an employment contract is
- Employees of GOCC without an original
consensual, it is still a contract of adhesion because
charter is not covered by the CSC, but it
the employee was not left with much choice.
is covered by the DOLE.
Further, employment is very difficult in the country.
Rule 12, Sec. 3 of IRR of RA 11199 (Social
Any doubt in this contract must be resolved in favor
Security Act of 2018):
of the worker.

“Employer - Any person, natural or Art. 1702: In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the
juridical, domestic or foreign, who carries
safety and decent living for the laborer.
on in the Philippines any trade, business,
industry, undertaking, or activity of any Question: Why is the doubt resolved in favor of
kind and uses the services of another labor?
person who is under his/her orders as Answer:
regards the employment, except the
1. Due to inherent economic inequality between
Philippine Government and any of its
labor and management
political subdivisions, branches or
2. More supply of workers compared to demand
instrumentalities, including corporations of their services
owned or controlled by the Philippine 3. Manifestation of social justice guarantee of
Government, provided that a self- the Constitution
employed person shall be both employee
In personam
and employer at the same time.”
- Privity of contract rule
- Only the parties are bound in the
Employer-Employee Relationship relationship

Question of fact
Characteristics:
- No particular form of evidence to prove
1. Consensual and contractual
or deny such relationship
2. In personam
- It will depend on particular
3. Imbued with public interest (Art. 1700)
circumstances in given cases.
4. Question of fact
5. Question of law Question of law
6. It cannot be the subject of the parties’
agreement. - When it involves the issue of jurisdiction

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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

It cannot be the subject of the parties’ agreement Economic reality test is used in the following:

- Determined by the facts and law 1. There is no employment contract;

2. The employee has several jobs and
functions;
Tests in determining the existence of 3. Which job is the employee dependent on for
Employer-Employee Relationship his livelihood.

1. Four-fold Test Francisco vs. NLRC (Aug. 31, 2006)

a. Selection and engagement of
- Under the broader economic reality test,
employee
the petitioner can likewise be said to be
b. Payment of wages or salary
an employee of respondent corporation
c. Power of dismissal
because she had served the company for
d. Power to control
six years before her dismissal, receiving
Power to control – the means and method by check vouchers indicating her
which a particular task is accomplished in salaries/wages, benefits, 13th month
order to achieve the result is being dictated pay, bonuses and allowances, as well as
or supervised by the employer. (The means deductions and Social Security
and method must be specific) contributions. Petitioner’s membership in
the SSS as manifested by a copy of the
NOTE: The most important element is the power to SSS specimen signature card which was
control. The details on the means and methods must signed by the President of Kasei
be identified. It can be a power actually exercised Corporation and the inclusion of her
and a power in reserve. name in the on-line inquiry system of the
2. Two-tiered Test/Multi-factorial Test SSS evinces the existence of an
a. Employer’s power to control with employer-employee relationship
respect to the means and methods by between petitioner and respondent
which the work is to be accomplished corporation. It is therefore apparent that
b. Economic realities of the activity or petitioner is economically dependent on
relationship respondent corporation for her continued
employment in the latter’s line of
3. Economic reality Test business.
- It is used if there is vagueness on the
control of the employer.
- Economic dependence of the worker on “Gig Economy” – refers to freelancers. It can be an
his employer. online platform or labor platform.
- Usually on independent contractors who
Labor Advisory No. 24, s. 2021 – Working
hold several positions.
Conditions of Delivery Riders in Food delivery
- Dependent on his job to support
and Courier activities:
livelihood.
- All delivery riders who are deemed
4. Exclusivity plus control employees are entitled to minimum
benefits (minimum wage, holiday pay,
overtime pay, etc.)
- All delivery riders who are deemed
employees shall also enjoy the right to
security of tenure, self-organization and
collective bargaining.

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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

production, his anemic

- Terms and conditions of engagement of
performance or even dead result
delivery riders who are deemed
does not become a ground for
independent contractors or freelancers
dismissal.
shall be governed by their respective
contract or agreements. Tongko vs. Manulife (January 26, 2011)

Grab/Uber Riders – the LTFRB had categorized them - The Court stated that it cannot use the
as independent contractors. Labor Code solely to determine the er-ee
relationship, may look into Insurance
Grepalife vs. Judico (Dec. 21, 1989)
Code and Civil Code.
- There exists an employer-employee - In our June 29, 2010 resolution, we
relationship between Grepalife and noted that there are built in elements of
Judico because the element of control by control specific to an insurance agency,
the former on the latter was present. which do not amount to the elements of
- The test to determine whether employer- control that characterizes an
employee relationship exists is when the employment relationship governed by
“employee” was controlled by the the labor code.
“employer” not only as to the kind of - The insurance code provides definite
work, the amount of results, the kind of parameters in the way an agent
performance, but also the power of negotiates for the sale of the company’s
dismissal. insurance products, his collection
- In this case, Judico received a definite activities and his delivery of the
minimum amount per week as his wage insurance contract or policy.
known as “sales reserve”. He was - In addition, the civil code defines an
assigned a definite place in the office to agent as a person who binds himself to
work on when he is not in the field, was do something in behalf of another, with
burdened with the job of collection, was the consent or authority of the latter.
required to make regular reports to the Article 1887 of the civil code also
company, and for which an anemic provides that in the execution of the
performance would mean a dismissal. agency, the agent shall act in accordance
Undoubtedly, by nature of his position with the instructions of the principal.
and work, Judico had been a regular - Evidence presented was the tax
employee of Grepalife, and is therefore declarations stating that Tongko is self-
entitled to the protection of the law and employed.
could not just be terminated without valid - Insurance code control – the manner by
and justifiable cause. which the output was achieved (imbued
- Two kinds of insurance agents: with public interest)
o Salaried insurance agents – - The Labor Code control is not applicable.
considered as employees
GR: The parties’ agreement regarding er-ee
o Ordinary commission insurance
relationship is not binding upon the courts.
agent - works at his own volition
or at his own leisure without fear XPN: Agreement between the insurance company
of dismissal from the company and insurance agent (insurance agency)
and short of committing acts
detrimental to the business
interest of the company or
against the latter, whether he
produces or not is of no moment
as his salary is based on his
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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

-
giving commendations for meritorious
Valeroso and Legatona v. Sky Cable
performance do not pertain to the means
Corporation (July 13, 2016)
and methods of how petitioners were to
- The legal relation of petitioners as sales perform and accomplish their task of
account executives to respondent can be soliciting cable subscriptions.
that of an independent contractor. There At most, these indicate that respondent
was no showing that respondent had regularly monitors the result of
control with respect to the details of how petitioners' work but in no way dictate
petitioners must conduct their sales upon them the manner in which they
activity of soliciting cable subscriptions should perform their duties.
from the public. Absent any intrusion by respondent into
- The Court ruled that an employer- the means and manner of conducting
employee relationship is absent in this petitioners' tasks, bare assertion that
case. petitioners' work was supervised and
- The evidence presented by petitioners monitored does not suffice to establish
did not prove their claim that they were employer-employee relationship.
employees of respondent. The - Performing work necessary and desirable
certifications issued by De la Cuesta are to the business of the employer is not
not competent evidence of employer- indicative of er-ee relationship.
employee relation as these merely
certified that respondent had engaged
the services of petitioners without NLU vs. Dinglasan (March 23, 1956)
specifying the true nature of such
- All jeepney drivers covered by the
engagement. These documents did not
boundary system are employee of
certify that petitioners were employees
operators.
but were only issued to accommodate
- Not having any interest in the business
petitioners' request for loan applications,
because they did not invest anything in
which fact was not refuted by petitioners.
the acquisition of the jeeps and did not
As for the payslips presented, it appears
participate in the management thereof,
that only the payslips for the years 2001
their service as drivers of the jeeps being
to 2006 were submitted. No payslips for
their only contribution to the business,
the years material to this case (2007 to
the relationship of lessor and lessee
2009) were submitted. It is undisputed
cannot be sustained.
that petitioners were transferred to
- In the lease of chattels the lessor loses
Armada in 2007, thus, we cannot give
complete control over the chattel leased
much credence to the payslips issued
although the lessee cannot make bad use
before this period.
thereof, for he would be responsible for
- Guidelines indicative of labor law 'control'
damages to the lessor should he do so.
do not merely relate to the mutually
In this case there is a supervision and a
desirable result intended by the
sort of control that the owner of the jeeps
contractual relationship; they must have
exercises over the drivers. It is an
the nature of dictating the means and
attempt by ingenious scheme to
methods to be employed in attaining the
withdraw the relationship between the
result.
owner of the jeeps and the drivers
- Here, we find that respondent's act of
thereof from the operation of the labor
regularly updating petitioners of new
laws enacted to promote industrial
promos, new price listings, meetings and
peace.
trainings of new account executives;
imposing quotas and penalties; and
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Labor Law Review Lecture Notes – September 27, 2022 Prepared by: JOSE, Lovella Anne J.

NOTE: The Dinglasan ruling is applicable to tricycle,

pedicab, kalesa drivers but not to bus drivers since
the latter is paid on a commission basis.

Question: Presently, is it correct that bus

drivers/conductors are paid on a commission basis?

Answer: No, under DO No. 118-12 (Rules and

Regulations Governing the Employment and
Working Conditions of Drivers and Conductors in the
Public Utility Bus Transport Industry), their
compensation is two-tiered:

a. Basic Pay (minimum wage)

b. Performance-based Pay

Del Monte Land Transport Bus Company v.

Armenta et. al. (February 3, 2021)

- To ensure the protection and welfare of

drivers and conductors in the public
utility bus industry, the Department of
Labor and Employment (DOLE), in the
exercise of its rule-making power, issued
Department Order No. 118-12 (DO 118-
12) on January 13, 2012 providing for a
fixed and performance compensation
scheme in the computation of public
utility bus driver's or conductor's wage.
- The goal of the issuance was to insure
public road transport safety by improving
the working conditions, compensation
and competence of bus drivers and
conductors thereby eliminating their risk-
taking behavior.
- Undeniably, the issues surrounding the
money claims of respondents public
utility bus drivers and conductors, as well
as questions pertaining to the Labor
Standard Compliance Certificates dated
February 12, 2014 raised in the instant
case, are within the purview of the
jurisdiction of the DOLE pursuant to
Article 128 and the provisions of DO 118-
12.

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