EMPLOYER-EMPLOYEE RELATIONSHIP SECTION 5. Absolute Prohibition against Labor-only Contracting.

Labor-only contracting, which is totally prohibited, refers to an

A. ELEMENTS arrangement where:
FOUR-FOLD TEST: a)
1. the manner of selection and engagement of the putative 1. The contractor or subcontractor does not have
employee; substantial capital; OR
2. the payment of wages; o “substantial capital”, as defined under Sec 03:
3. the presence or absence of power of dismissal; and,  for corporations, partnerships, and
4. the presence or absence of control of the putative employee’s cooperatives: paid-up capital stock/shares of
conduct. P5MILLION
 for sole proprietorships: net worth of at least
TWO-TIERED TEST: P5MILLION
1. Control Test – the putative employer’s power to control the 2. The contractor or subcontractor does not have
employee with respect to the means and methods by which the investments in the form of tools, equipment,
work is to be accomplished; and machineries, supervision, work premises, among
2. Economic Reality Test – the underlying economic realities of others; AND
the activity or relationship. 3. The contractor's or subcontractor’s employees
 Economic reality depends upon the circumstances of the recruited and placed are performing activities which
whole economic activity, and depends upon several factors are directly related to the main business operation of
such as: the principal;
1) the extent to which the services performed are an
integral part of the employer’s business; OR
2) the extent of the worker’s investment in equipment b) The contractor or subcontractor does not exercise the right
and facilities; to control over the performance of the work of the
3) the nature and degree of control exercised by the employee.
employer;
4) the worker’s opportunity for profit and loss; NOTE: per Quintanar v CCBPI and Atty Quan, disregard
5) the amount of initiative, skill, judgment or foresight conjunctions. Treat everything as “OR”
required for the success of the claimed independent
enterprise; 2. If there is a finding that the contractor or subcontractor is
6) the permanency and duration of the relationship engaged in other illicit forms of employment arrangements
between the worker and the employer; and under Section 06; (Sec 07)
7) the degree of dependency of the worker upon the a) When the principal farms out work to a “Cabo”.
employer for his continued employment in that line of b) Contracting out of job or work through an in-house
business. (most important; also called “economic agency.
dependence test”) c) Contracting out of job or work through an in-house
cooperative which merely supplies workers to the
LABOR DISPUTE V. INTRACORPORATE DISPUTE principal.
I. Relationship Test: d) Contracting out of a job or work by reason of a strike or
A dispute is considered an intra-corporate controversy under lockout whether actual or imminent.
the relationship test when the relationship between or among the e) Contracting out of a job or work being performed by union
disagreeing parties is any one of the following: members and such will interfere with, restrain or coerce
1) between the corporation, partnership, or association and the employees in the exercise of their rights to self-
public; organization as provided in Article 259 of the Labor Code,
2) between the corporation, partnership, or association and as amended.
its stockholders, partners, members, or officers; f) Requiring the contractor’s/subcontractors employees to
3) between the corporation, partnership, or association and the perform functions which are currently being performed by
State as far as its franchise, permit or license to operate is the regular employees of the principal.
concerned; and g) Requiring the contractor’s/subcontractor’s employees to
4) among the stockholders, partners, or associates themselves. sign, as a precondition to employment or continued
employment, an antedated resignation letter; a blank
II. Nature of Controversy Test: payroll; a waiver of labor standards including minimum
The disagreement must not only be rooted in the existence of an wages and social or welfare benefits; or a quitclaim
intra-corporate relationship, but must as well pertain to the releasing the principal or contractor from liability as to
enforcement of the parties' correlative rights and obligations under payment of future claims; or require the employee to
the Corporation Code and the internal and intra-corporate regulatory become member of a cooperative.
rules of the corporation h) Repeated hiring by the contractor/subcontractor of
employees under an employment contract of short
duration.
B. INDEPENDENT CONTRACTORS AND LABOR-ONLY i) Requiring employees under a contracting/subcontracting
CONTRACTORS arrangement to sign a contract fixing the period of
employment to a term shorter than the term of the Service
When the principal is deemed as the direct employer, per DO Agreement, unless the contract is divisible into phases for
174-171: which substantially different skills are required and this is
1. If there is a finding that the contractor or subcontractor is made known to the employee at the time of engagement.
merely a labor-only contractor, as provided in Sections 05 j) Such other practices, schemes or employment
and 08; (Sec 07) arrangements designed to circumvent the right of workers
to security of tenure.
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3. Violation of the rights of the contractor’s or subcontractor’s
employees as enumerated in Section 10; (Sec 12) CLASSES OF EMPLOYEES
a) Safe and healthful working conditions;
b) Labor standards, such as but not limited to SIL, rest days, 1. regular employees or those who have been engaged to perform
OT pay, holiday pay, 13th month pay, and separation pay; activities which are usually necessary or desirable in the usual
c) Social security and welfare benefits; and business or trade of the employer;
d) Self-organization, collective bargaining and peaceful a) regular by nature of work
concerted activities including the right to strike. b) regular by length of service
c) regular by virtue of CBA
4. Violation of the required contracts under Section 11; (Sec
12). 2. project employees or those whose employment has been fixed
1. Employment contract between contractor and employees, for a specific project or undertaking, the completion or
specifying: termination of which has been determined at the time of the
a) the specific description of the job or work to be engagement of the employee;
performed by the employee; and  2 requisites:
b) the place of work and terms of condition of a) specific undertaking/task;
employment, including wage rate applicable b) duration/completion made known at the time of
o contractor must inform employee of the foregoing engagement
stipulations in writing on or before the first day of o Exception: Maraguinot, Jr. v. National Labor
his/her employment Relations Commission:
Once a project or work pool employee has been:
2. Service Agreement between contractor and principal, (1) continuously, as opposed to intermittently, re-
specifying: hired by the same employer for the same tasks or
a) specific description of the job or work being nature of tasks; and
contracted, including its term or duration; (2) these tasks are vital, necessary and
b) place or work and terms and conditions governing the indispensable to the usual business or trade of the
contracting arrangement, to include the agreed amount employer, then the employee must be deemed a
of the contracted job or work as well as the standard regular employee.
administrative fee of not less than 10% of the total o Note, however, that the Maraguinot doctrine does not
contract cost; and apply to employees in the construction industry. Mere
c) a provision on the issuance of the bond/as defined in rehiring of respondent on a project-to-project basis did
Sec 3(a) renewable every year. not confer upon him regular employment status. The
practice was dictated by the practical consideration
DO 174-171 not applicable to: CISOP that experienced construction workers are more
1. Contracting or subcontracting arrangements in the Construction preferred.
Industry, under the licensing coverage of the PCAB; (Sec 33 of  2 types of projects:
DO 174-17) a) within regular course of business, but distinct and
separate and identifiable as such;
2. Information technology-enabled services involving an entire b) not within the regular course of business, also
or specific business process such as: identifiable and distinct
a) Business Process Outsourcing, Knowledge Process  2 types of employees in construction industry:
Outsourcing, Legal Process Outsourcing; a) project – those employed in connection with a
b) IT Infrastructure Outsourcing; particular construction project and whose
c) Application Development; employment is co-terminous with it;
d) Hardware and/or Software Support; b) non-project – those employed without reference
e) Medical Transcription; to any particular project. (deemed as regular)
f) Animation Services;
g) Bank Office Operations/Support 3. seasonal employees or those who work or perform services
3. Private Security Agencies (except for the registration which are seasonal in nature, and the employment is for the
requirements); duration of the season; and
4. Other contractual relationships, such as:
a) Contract of sale or purchase; 4. casual employees or those who are not regular, project, or
b) Contract of lease; seasonal employees.
c) Contract of carriage;
d) Contract growing/growership agreement; 5. Jurisprudence later added a fifth (5 th) kind, the fixed-term
e) Toll manufacturing employee
f) Contract of management, operation and maintenance;  Requisites:
and 1) The fixed period of employment was knowingly and
g) Such other contracts governed by the Civil Code and voluntarily agreed upon by the parties without any force,
other special laws. duress, or improper pressure being brought to bear upon the
5. Contracting out of job or work to a professional, or individual employee and absent any other circumstances vitiating his
with unique skills and talents who himself or herself performs consent; or
the job or work for the principal. 2) It satisfactorily appears that the employer and the
employee dealt with each other on more or less equal terms
with no moral dominance exercised by the former or the
latter.
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 REQUISITES FOR DEDUCTION OF FACILITIES (Mabeza v
NLRC)
1. First, proof must be shown that such facilities are
customarily furnished by the trade;
Teachers and professors 2. Second, the provision of deductible facilities must be
Requisites before a private school teacher acquires permanent status: voluntarily accepted in writing by the employee;
(1) the teacher is a full-time teacher; 3. Finally, facilities must be charged at fair and reasonable
(2) the teacher must have rendered: value.
a) for elementary and secondary level: three consecutive years
of service; Supplements
b) tertiary: 6 consecutive semesters or 9 consecutive  constitute extra remuneration or special privileges or benefits
trimesters, as the case may be. given to or received by labourers over and above their ordinary
(3) such service must have been satisfactory earnings or wages.

WAGES
B. WAGE-FIXING
A. CONCEPT AND DEFINITION
The minimum wage rates for agricultural and non-agricultural
ART. 97. Definitions. employees and workers in each and every region of the country shall
As used in this Title: be those prescribed by the Regional Tripartite Wages and
"Wage" paid to any employee shall mean the remuneration or Productivity Boards.
earnings, however designated, capable of being expressed in terms of  issues wage orders subject to Guidelines by the NWPC
money, whether fixed or ascertained on a time, task, piece, or  no authority to grant across the board increases
commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten National Wages and Productivity Commission, among others:
contract of employment for work done or to be done, or for services a) prescribes rules and guidelines for the determination of
rendered or to be rendered and includes the fair and reasonable value, appropriate minimum wage and productivity measures at the
as determined by the Secretary of Labor and Employment, of board, regional, provincial, or industry levels;
lodging, or other facilities customarily furnished by the employer to b) reviews regional wage levels set by the Regional Tripartite
the employee. Wages and Productivity Boards to determine if these are in
accordance with prescribed guidelines and national development
"Fair and reasonable value" shall not include any profit to the plans
employer, or to any person affiliated with the employer.
The determination of wages has generally involved two methods:
Sec. 4. Cash Wage. 1. the "floor-wage" method
The minimum wage rates prescribed in Sec. 1 hereof shall be basic, o fixing of determinate amount that would be added to
cash wages without deducting therefrom whatever benefits, the prevailing statutory minimum wage
supplements or allowances which the employees enjoy free of charge 2. the "salary-ceiling" method
aside from the basic pay. o whereby the wage adjustment is applied to employees
receiving a certain denominated salary ceiling
An employer may provide subsidized meals and snacks to his
employees provided that the subsidy shall not be less than 30% of the ART. 124. Standards/Criteria for minimum wage fixing. The
fair and reasonable value of such facilities. In such case, the employer regional minimum wages to be established by the Regional Board
may deduct from the wages of the employees not more than 70% of shall be as nearly adequate as is economically feasible to maintain
the value of the meals and snacks enjoyed by the employees, the minimum standards of living necessary for the health,
provided that such deduction is with the written authorization of the efficiency and general well-being of the employees within the
employees concerned. framework of the national economic and social development
program. In the determination of such regional minimum wages, the
Facilities Regional Board shall, among other relevant factors, consider the
 articles or services for the benefit of the employee or his family following:  
but shall not include tools of the trade or articles or services
primarily for the benefit of the employer or necessary to the (a) The demand for living wages;
conduct of the employer’s business. (b) Wage adjustment vis-a-vis the consumer price index;
(c) The cost of living and changes or increases therein; (most
 The fair and reasonable value of facilities is hereby determined important according to Atty Quan)
to be the cost of operation and maintenance, including adequate (d) The needs of workers and their families;
depreciation plus reasonable allowance (but not more than 5 1/2 (e) The need to induce industries to invest in the countryside;
% interest on the depreciated amount of capital invested by the (f) Improvements in standards of living;
employer); (g) The prevailing wage levels;
 provided that if the total so computed is more than the fair rental (h) Fair return of the capital invested and capacity to pay of
value (or the fair price of the commodities or facilities offered employers;
for sale) the fair rental value (or the fair price of the (i) Effects on employment generation and family income; and
commodities or facilities offered for sale) shall be the reasonable (j) The equitable distribution of income and wealth along the
cost of the operation and maintenance. The rate of depreciation imperatives of economic and social development.
and depreciated amount computed by the employer shall be
those arrived at under good accounting practices. RA 8188:
Any person, corporation, trust, firm, partnership, association or entity
which refuses or fails to pay any of the prescribed increases or
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adjustments in the wage rates made in accordance with this Act shall 1. Existing hierarchy of positions with corresponding salary rates;
be punished by a fine not less than Twenty- five thousand pesos 2. Significant change in the salary rate of a lower pay class
(P25,000) nor more than One hundred thousand pesos (P100,000) or without the concomitant increase in the higher one;
imprisonment of not less than two (2) years nor more than four (4) 3. Elimination of the distinction between the two levels;
years, or both such fine and imprisonment at the discretion of the 4. The existence of the distortion in the same region of the
court: Provided, That any person convicted under this Act shall not country.
be entitled to the benefits provided for under the Probation Law.
Correction of Pay Structure:
"The employer concerned shall be ordered to pay an amount Min Wage
equivalent to double the unpaid benefits owing to the employees: ---------------------- = %
Provided, That payment of indemnity shall not absolve the employer Actual Salary
from the criminal liability imposable under this Act.
% x Prescribed Increase Adjustment = Distortion
"If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity the penalty of C. PAYMENT OF WAGES
imprisonment shall be imposed upon the entity's responsible officers,
including, but not limited to, the president, vice-president, chief I. Form: Legal Tender
executive officer, general manager, managing director or partner."  Exception: payment through checks allowed in the ff cases
– CCR (1PRC):
R.A. 9178: BARANGAY MICRO BUSINESS ENTERPRISES (BMBE'S) 1. CUSTOMARY at the date of effectivity of Labor Code
ACT OF 2002 – BMBES exempt from coverage of minimum wage 2. Stipulation in a COLLECTIVE agreement
law 3. When the ff REQUISITES concur: (1PRC)
a) There is a bank or other facility for encashment
NWPC GUIDELINES NO. 2, SERIES OF 2012, GUIDELINES ON THE within a radius of 1 km from the workplace;
IMPLEMENTATION OF THE TWO-TIERED WAGE SYSTEM: b) The employer or any of his agents or representatives
Two-tiered wage system refers to a pay system consisting of: does not receive any pecuniary benefit directly or
1. First tier – minimum wage as set by Regional Tripartite Wages indirectly from the arrangement;
and Productivity Boards c) The employees are given reasonable time during
2. Second tier – incentive pay based on productivity improvement banking hours to withdraw their wages from the bank
and gainsharing which time shall be considered as compensable hours
worked if done during working hours; &
d) The payment by check is with the written consent of
CURRENT DAILY MINIMUM WAGE RATES the employees concerned if there is no collective
Per Wage Order No. NCR-22  agreement authorizing the payment of wages by bank
(Effective: 22 November 2018) checks.
Sector/Industry Basic Basic New
Wage/Integration Wage Minimum II. Time of payment: once every 2 weeks or twice a month at
of COLA Increase Wage intervals not exceeding 16 days
Rates  Exceptions: FCP
Non-Agriculture ₱512.00 ₱25.00 ₱537.00 1. Force majeure or circumstances beyond the control
of the employer – pay immediately after the
Agriculture ₱475.00 ₱25.00 ₱500.00 circumstances have ceased
(Plantation and 2. Payment by results where the work cannot be
Non Plantation) completed within 2 weeks:
a) Pay at intervals not exceeding 16 weeks in
Retail/Service proportion to work performed
Establishments b) Final settlement immediately upon
employing 15 completion of work
workers or less
Manufacturing III. Place of payment: at or near the place of undertaking
Establishments  Exceptions: OBA
regularly 1. Payment in other places – DEFA
employing less a) Deterioration of peace and other or actual or
than impending emergencies caused by calamities;
10 workers b) Employer provides free transporation;
c) Under any other analogous circumstances
PROVIDED:
WAGE DISTORTION a) the time spent by the employees in collecting
their wages shall be considered as compensable
 wage distortion shall mean a situation where an increase in hours worked;
prescribed wage rates results in the elimination or severe b) No employer shall pay his employees in any bar,
contraction of intentional quantitative differences in wage or night or day club, drinking establishment,
salary rates between and among employee groups in an massage clinic, dance hall, or other similar
establishment as to effectively obliterate the distinctions places or in places where games are played with
embodied in such wage structure based on skills, length of stakes of money or things representing money
service, or other logical bases of differentiation.  except in the case of persons employed in said
places.
Elements: HSER 2. Payment through banks: P251
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 a) Written permission of majority of employees 2) is necessary or desirable as determined by
concerned; the Secretary of Labor and Employment in
b) Establishment must have 25 employees or more appropriate rules and regulations
c) Establishment located within 1km radius to the  trade example: private security agencies (Labor
bank Advisory No 11-14)
3. Payment through ATM: CRAP1RR
5. Withholding of wages & kickbacks
IV. To whom: directly to the workers to whom they are due  It shall be unlawful for any person, directly or
 Exceptions: indirectly, to withhold any amount from the wages
1. Payment through another person under written authority for of a worker or induce him to give up any part of his
that purpose – force majeure or other circumstances wages by force, stealth, intimidation, threat or by
determined by Secretary of Labor: any other means whatsoever without the worker’s
a) Insurance premiums consent.
b) Union dues where the right to check-off has been  Exception: clearance procedure before the the
recognized in accordance with collective release of wages and other benefits (Milan v NLRC)
agreement 6. Retaliatory measures
c) Authorized in writing by the individual  It shall be unlawful for an employer to refuse to pay
employees concerned or reduce the wages and benefits, discharge or in
2. Payment through heirs – when the worker has died any manner discriminate against any employee who
3. Payment through member of worker’s family – employer has filed any complaint or instituted any proceeding
authorized in writing by the employee to pay his wages to a under this Title or has testified or is about to testify
member of the family in such proceedings.

V. Prohibitions: 7. False reporting

1. Non-interference in disposal of wages  it shall be unlawful for any person to make any
 No employer shall limit or otherwise interfere statement, report, or record filed or kept pursuant to
with the freedom of any employee to dispose of the provisions of this Code knowing such
his wages statement, report or record to be false in any
 No employer shall in any manner oblige any of material respect.
his employees to patronize any store or avail of
the services offered by any person. D. 13TH MONTH PAY

2. Wage deduction All employers required to pay all rank-and-file employees a 13 th

 No employer, in his own behalf or in behalf of any month pay not later than December 24 every year, provided the
person, shall make any deduction from the wages of employees worked at least 1 month during the calendar year.
his employees
 Exceptions: Exempted Employers: GAHSP
1) Authorized by law: payment of premiums The ff. employers are still not covered by P.D. No. 851:
(w/ consent) and payment of union dues a. The Government and any of its political subdivisions, including
(right to check off recognized or authorized GOCCs, excepts those corporations operating essentially as
in writing) private subsidiaries of the Government;
2) Payment to a third person with the written b. Employers already paying their employees a 13th month pay or
authorization of employee and no pecuniary more in a calendar year or its equivalent at the time of this
benefit to the employer issuance;
3. Deduction to ensure employment o term "its equivalent" shall include Christmas bonus, mid-
4. Deposits for loss or damage year bonus, cash bonuses and other payments amounting to
 Exceptions: not less than 1/12 of the basic salary
1) when the employer is engaged in such o includes: Christmas, Milling and Amelioration bonus, year-
trades, occupations or business where the end productivity bonus (National Federation v Overeja;
practice of making deductions or requiring DOLE v Leogardo)
deposits is a recognized one; or o if bonus is granted under the CBA and not based on work
performed, not included (Universal Corn v NLRC)
Requisites: ROF20 o but shall not include cash and stock dividends, COLA and
a) That the employee concerned is clearly all other allowances regularly enjoyed by the employee, as
shown to be responsible for the loss or well as non-monetary benefits.
damage; o
b) That the employee is given reasonable c. Employers of household helpers and persons in the personal
opportunity to show cause why service of another in relation to such workers; and
deduction should not be made; d. Employers of those who are paid on purely commission,
c) That the amount of such deduction is boundary, or task basis, and those who are paid a fixed amount
fair and reasonable and shall not for performing specific work, irrespective of the time consumed
exceed the actual loss or damage; and in the performance thereof,
d) That the deduction from the wages of
the employee does not exceed 20 EXCEPT where the workers are paid on piece-rate basis in
percent of the employee's wages in a which case the employer shall grant the required 13th month pay
week. to such workers.

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 o workers paid on piece-rate basis shall refer to those who are 2) The diminution or discontinuance is done unilaterally by the
paid a standard amount for every piece or unit of work employer.
produced that is more or less regularly replicated, without O Thus, employees not prohibited and will be bound if they
regard to the time spent in producing the same.  enter into agreements with the employer for reduction of
certain benefits (Insular Hotel Union v Waterfront Hotel)
Amount to be paid: 1/12 of the basic salary earned by an
employee within a calendar year 3) The benefit pertains to a monetary benefit or a privilege with
 Basic salary - include all remunerations or earning paid by this monetary equivalent (Royal Plant Workers Union v CCBPI);
employer for services rendered
 does not include allowances and monetary benefits which 4) The practice is consistent and deliberate;
are not considered or integrated as part of the regular or O Thus, if granted because of a mistake or error in a doubtful
basic salary, such as the cash equivalent of unused vacation or difficult question of law, it is not company practice
and sick leave credits, overtime, premium, night differential (Globe Mackay v NLRC)
and holiday pay, and cost-of-living allowances.
 However, these salary-related benefits should be included American Wire & Cable Daily Union v American Wire
as part of the basic salary in the computation of the 13th General Rule: non-diminution not applicable to bonuses
month pay if by individual or collective agreement,  Grant is a management prerogative; something given in addition
company practice or policy, the same are treated as part of to what is ordinarily received. Thus, not a demandable and
the basic salary of the employees enforceable obligation

Time of Payment: not later than December 24 of each year. Exception:

 An employer, however, may give to his employees ½ of the a) when it was promised to be given without any conditions
required 13th month pay before the opening of the regular imposed for its payment in which case it is deemed part of
school year and the other half on before the 24th of December of the wages; or
every year. b) it must have had a fixed amount and had been a long and
 The frequency of payment of this monetary benefit may be the regular practice on the part of the employer.
subject of agreement between the employer and the
recognized/collective bargaining agent of the employees. G. WORKER PREFERENCE

Special feature of benefit: 13th month pay shall not be credited as ART. 110. WORKER PREFERENCE IN CASE OF BANKRUPTCY. –
part of the regular wage of the employees for purposes of determining In the event of bankruptcy or liquidation of an employer's business,
overtime and premium pay, fringe benefits, as well as premium his workers shall enjoy first preference as regards their unpaid wages
contributions to the State Insurance Fund, social security, medicare and other monetary claims, any provision of law to the contrary
and private welfare and retirement plans. notwithstanding.

Such unpaid wages and monetary claims shall be paid in full before
E. SERVICE CHARGE the claims of the Government and other creditors may be paid.

RA 11360, amended Art 96 of the Labor Code: DBP v Labor Arbiter: institution of bankruptcy or judicial liquidation
All service charges collected by hotels, restaurants, and similar proceedings necessary before preferential credit under Art 110 may
establishments shall be distributed completely and equally among be enforced.
the covered workers, except managerial employees.
H. ATTORNEY’S FEES
In the event that the minimum wage is increased by law or wage
order, service charges paid to the covered employees shall NOT be ART. 111. ATTORNEY’S FEES. –
considered in determining the employer’s compliance with the (a) In cases of unlawful withholding of wages, the culpable party may
increased minimum wage. be assessed attorney’s fees equivalent to ten percent of the amount of
wages recovered.
Approved: August 07 2019
(b) It shall be unlawful for any person to demand or accept, in any
Note: service charge different from tips judicial or administrative proceedings for the recovery of wages,
 Tips – not normally part of the salary; given voluntarily by the attorney’s fees which exceed ten percent of the amount of wages
customers; recovered.
 Service charge – part of the cost of the food, goods, or services
ordered by the customers.
WORKING CONDITIONS
F. NON-DIMINUTION
A. MANAGEMENT PREROGATIVE
Non-diminution rule – any benefit and supplement being enjoyed by
employees cannot be reduced, diminished, discontinued or eliminated An employer is free to regulate according to his own discretion and
by the employer (Arco Metal Products v Samahan) judgment all aspects of employment, from hiring to firing.

There is diminution of benefits when: PUMC Limitations:

1) The grant or benefit is founded on a policy (CBA or contract) or 1. Must be exercised in good faith
has ripened into a practice over a long period of time; 2. Not exercised for the purpose of circumventing:
O “long period of time” – 2 years sufficient (Sevilla Trading a) employee’s rights under the law; or
Co v Semana) b) employee’s rights under valid agreements like the CBA;
c) law, morals, good custom, public policy, or public order.
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3. Principles of justice and fair play.

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 B. COVERAGE o David v. Macasio (benefits entitled to pakyaw basis
ART. 82. COVERAGE. - The provisions of this Title* shall apply to workers):
employees in all establishments and undertakings whether for profit The payment of an employee on task or pakyaw basis alone
or not, but not to: GMFFDSP is insufficient to exclude one from the coverage of SIL and
holiday pay. They are exempted from the coverage of Title
1. government employees; I (including the holiday and SIL pay) only if they qualify as
"field personnel.”
2. managerial employees; o Entitled to SIL, Holiday Pay. NOT entiled to 13th month.
o "managerial employees" refer to those whose primary duty
consists of the management of the establishment in which
they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial
staff.

o “members of the managerial staff” - they perform the

following duties and responsibilities:
a) The primary duty consists of the performance of work
directly related to management policies of their
employer;
b) Customarily and regularly exercise discretion and
independent judgment; and
c) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of
the management of the establishment in which he is
employed or subdivision thereof; or
(ii) execute under general supervision work along
specialized or technical lines requiring special training,
experience, or knowledge; or
(iii) execute, under general supervision, special
assignments and tasks; and

d) Who do not devote more than 20 percent of their hours

worked in a work week to activities which are not
directly and closely related to the performance of the
work described in paragraphs (1), (2) and (3) above.

3. field personnel;
o "Field personnel" shall refer to non-agricultural employees
who:
a) regularly perform their duties away from the principal
place of business or branch office of the employer; and
b) whose actual hours of work in the field cannot be
determined with reasonable certainty.

4. members of the family of the employer who are dependent on him

for support;

5. domestic helpers;
o any person, whether male or female, who renders services
in and about the employer’s home and which services are
usually necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to the
personal comfort and enjoyment of the employer’s family.
o The definition does not cover include househelp or laundry
women working in staffhouses of a company.

6. persons in the personal service of another; and

7. workers who are paid by results as determined by the Secretary of

Labor in appropriate regulations.
o including those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if their
output rates are in accordance with the standards prescribed
under Section 8, Rule VII, Book Three of these regulations,
or where such rates have been fixed by the Secretary of
Labor and Employment in accordance with the aforesaid
Section.

ZABALA 3D 2021