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PRELIMINARY PERIOD 5.
Policy
LABOR 6. Practice – practiced for a long period of time,
o It is the exertion by human beings of physical or mental 7. Policy – office policies
efforts, or both, towards the production of goods and 8. Foreign Jurisprudence
services
Past Company Practices as a Source of Labor Law
LABOR LAW * The following requisites must be present:
o The law that governs the rights and duties of the 1. Voluntary institution by the employer without any
employer and employees with respect to: legal compulsion;
1. The terms and conditions of employment, and 2. Should have been done over a long period of time;
2. Labor disputes arising from collective and,
bargaining or other concerted activity 3. Must be shown to have been consistent and
respecting such terms and conditions. deliberate.
LABOR CODE *
o P.D. No. 442 NOTE: No passage of time is required for company policy to
o Revises and consolidates labor and social laws to afford become a source of labor law.
the protection of labor, promote employment and
human resource development and ensure industrial ART. 1 – This decree shall be known as the “Labor Code of
peace based on social justice. the Philippines.
o Took effect on November 1, 1974 ART. 2 – This Code shall take effect six months after its
promulgation.
Application of the Labor Code
GR – All rights and benefits granted to workers under the LABOR STANDARDS LAW
LC shall apply alike to all workers whether agricultural or o The minimum terms and conditions of employment
non-agricultural which the employer is required to grant to its employer
XPNs (GG-FIC-WO) is required to grant to its employees.
1. Gov’t employees o The material or substance to be processed.
2. Employees of GOCCs created by special or original o e.g. 13th month pay
charter
3. Foreign governments LABOR RELATIONS LAW
4. International agencies/organizations (remedy: to o Defines the status, rights and duties, and the
file a complaint before the DFA) institutional mechanisms that govern the individual
5. Corporate officers / intra-corporate disputes and collective interactions, of employers, employees or
which fall under P.D. 902-A (SEC) their representatives.
6. Local Water district (except when NLRC’s o The grievance machinery is a labor relations
jurisdiction is invoked) mechanism.
7. As may Otherwise be provided by the Labor Code o The mechanism that processes the substance
o e.g. collective bargaining negotiations
Statement of Policy
o The Labor Code not only mandates the State to — The line between labor standards and labor relations
promote full employment but to assure as well is not an issue except perhaps to identify the
equal work opportunities regardless of sex, race, or specialization and labor relations, including
creed. motivational programs, the name “employment
relations” is used.
SOURCES OF LABOR LAW * (CCC-L-PPP-F)
1. Constitution LABOR LAW AND SOCIAL LEGISLATION
2. Contracts Social legislation *
3. CBA o All laws passed by the State to promote public welfare.
4. Labor Code and other related special legislation
(including their respective IRR)
Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]
o Laws that provide particular kinds of protection or processes affecting their rights and benefits as may be
benefits to society or segments thereof in furtherance provided by law.
of social justice.
The State shall promote the principle of shared
o Labor laws are necessarily social legislation.
responsibility between workers and employers and the
o Not all social legislations are labor laws preferential use of voluntary modes in settling disputes,
§ Labor laws – directly affect employment including conciliation, and shall enforce their mutual
- Refer to labor statutes compliance therewith to foster industrial peace.
- Focuses on the rights of the worker in the
workplace The State shall regulate the relations between
§ Social legislation – governs effects of workers and employers, recognizing the right of labor to its
just share in the fruits of production and the right of
employment
enterprises to reasonable returns to investments, and to
- Refer to Social Security Laws expansion and growth.
- Focuses on the particular part of the society § Protection to Labor Clause
or segment thereof § Not self-executing nor judicially enforceable
o Social legislation as a concept is broader, labor laws § To declare them as self-executing is impractical.
narrower.
o e.g. GSIS Law, SSS Law, Philhealth benefits, Agrarian CONSTITUTIONAL PROVISIONS NOT APPLICABLE TO
Laws LABOR CASES
Per jurisprudence:
CONSTITUTIONAL RIGHTS AND MANDATES 1. Right to due process
o If there should be a conflict between the Labor Code 2. Right to equal protection of the laws
and the Constitution, the latter shall prevail. 3. Right against self-incrimination
4. Right to counsel and to remain silent
Art. II, Sec. 18 of the Constitution * – “The state affirms 5. Right against unreasonable searches and seizures
labor as a primary social economic force. It shall protect the and to privacy of communication and
rights of workers and promote their welfare.” correspondence.
§ Protection to Labor Clause
§ Invoked in resolving ambiguities in the - These can only be asserted against the government or the
interpretation of the law, employment contracts, state but not against a private party like an employer
CBAs and appreciation of evidence
§ Relate to Art. 1702, NCC. RIGHTS OF LABOR UNDER THE CONSTITUTION
§ Art. 4 of the LC: All doubts should be resolved in (SLF-JS-CC-PP)
favor of labor 1. Security of tenure
2. Living wage
Art. III, Sec. 8 * – The right of the people, including those 3. Share in the Fruits of production
employed in the public and private sectors, to form unions, 4. Just and humane working conditions
associations, or societies for purposes not contrary to law 5. Self-organization
shall not be abridged. 6. Collective bargaining
§ Right to Organize Unions 7. Collective negotiations
8. Engage in Peaceful concerted activities, including
Art. XIII, Sec. 3 * – The State shall afford protection to labor, right to strike
local and overseas, organized and unorganized, and 9. Participate in Policy and decision-making
promote full employment and equality of employment
processes
opportunities for all.
It shall guarantee the rights of all workers to self- OTHER RELATED LAWS
organization, collective bargaining and negotiations, and Art. 1700 (NCC) * – The relations between capital and labor
peaceful concerted activities, including the right to strike in are not merely contractual. They are so impressed with
accordance with law. They shall be entitled to security of public interest that labor contracts must yield to the
tenure, humane conditions of work, and a living wage. They common good. Therefore, such contracts are subject to the
shall also participate in policy and decision-making
special laws on labor unions, collective bargaining, strikes
and lockouts, closed shop, wages, working conditions, hours “protection to labor”
of labor and similar subjects. o The State affirms labor as a primary social economic
force.
Art. 1701 – Neither capital nor labor shall act oppressively o It shall protect the rights of workers and promote their
against the other or impair the interest or convenience of welfare. (Art. II, Sec 18, 1987 Constitution)
the public. o All doubts in the implementation and interpretation of
§ Principle of Non-oppression the provisions of this Code, including its implementing
§ The principle mandates capital and labor not to act rules and regulations, shall be resolved in favor of labor
oppressively against each other or impair the
interest and convenience of the public. The “equal work opportunities regardless of sex, race, or
protection to labor clause in the Constitution is not creed”
designed to oppress or destroy capital. o What about Section 12, Article XII of the Constitution
which states: “The State shall promote the preferential
Art. 1702 * – In case of doubt, all labor legislation and all use of Filipino labor, domestic materials and locally
labor contracts shall be construed in favor of the safety and produced goods, and adopt measures that help make
decent living for the laborer. them competitive.”?
§ Relate to Art. 4 of LC o What about Article 40 which states: “Employment
§ The law must protect labor, at least to the extent of Permit of Non- resident Aliens. — Any alien seeking
raising him to equal footing in bargaining relations admission to the Philippines for employment purposes
with capital and to shield him from abuses brought and any domestic or foreign employer who desires to
about by the necessity for survival. engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of
Art. 1703 – No contract which practically amounts to Labor.
involuntary servitude, under any guise whatsoever, shall be § The employment permit may be issued to a non-
valid. (Prohibition against involuntary servitude) resident alien or to the applicant employer after a
Art. 1704 – In collective bargaining, the labor union or determination of the non-availability of a person in
members of the board or committee signing the contract the Philippines who is competent, able and willing at
shall be liable for non-fulfillment thereof. the time of application to perform the services for
Art. 1705 – The laborer's wages shall be paid in legal which the alien is desired.
currency.
Art. 1706 – Withholding of the wages, except for a debt due, SOCIAL JUSTICE AS THE AIM *
shall not be made by the employer. Basis: Police power of the State
o Social justice is both juridical principle and societal
ART. 3 – The State shall afford protection to labor, promote goal.
full employment, ensure equal work opportunities § As a juridical principle – prescribes equality of
regardless of sex, race or creed, and regulate the relations the people, rich or poor, before the law.
between workers and employers. The State shall assure the § As a goal – the attainment of decent quality of
rights of workers to self-organization, collective bargaining, life of the masses through humane productive
security of tenure, and just and humane conditions of work. efforts.
o Article 3 is not a statement of goals but a statement of o This is because “without the improvement of economic
policy directions towards the goals conditions, there can be no real enhancement of the
political rights of the people.”
o Goals: Calalang v. Williams *

- a more equitable distribution of opportunities, o The promotion of social justice, however, is to be
income and wealth; achieved not through a mistaken sympathy towards
- a sustained increase in the amount of goods and any given group.
services produced by the nation for the benefit o Social justice is "neither communism, nor despotism,
of the people. nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic forces
by the State so that justice in its rational and objectively compensates laborer, worker or employee, for the
secular conception may at least be approximated. latter’s service.
o Social justice means the promotion of the welfare of all o It is a relationship impressed with public interest in
the people, the adoption by the Government of keeping with our constitutional policy of social justice.
measures calculated to ensure economic stability of all PROHIBITIONS OF CONTRACT OF LABOR
the competent elements of society, through the 1. No law impairing the obligation of contracts
maintenance of a proper economic and social shall be passed (Art. III, Sec. 10, CONSTI).
equilibrium in the interrelations of the members of the 2. No involuntary servitude in any form shall exist
community, constitutionally, through the adoption of except as a punishment for a crime whereof the
measures legally justifiable, or extra-constitutionally, party shall have been duly convicted [Art. III, Sec.
through the exercise of powers underlying the 18(2), CONSTI].
existence of all governments on the time-honored 3. No contract which practically amounts to
principle of salus populi est suprema lex. involuntary servitude, under any guise
whatsoever, shall be valid (Art. 1703, NCC).
SOCIAL JUSTICE v. EQUAL PROTECTION CLAUSE
GR – The State is bound under the Constitution to afford full Collective Bargaining Agreement *
protection to Labor and when conflicting interests collide o The CBA is the norm of conduct between ER and EEs
and they are to be weighed on the scales of social justice, the and compliance therewith is mandated by the express
law should accord more sympathy and compassion to the policy of the law
less privileged workingman
XPN – when it is used to shield wrongdoing Fundamental Management Rights *
1. Right to return of investments
LIMITATIONS IN INVOKING THE PRINCIPLE OF SOCIAL 2. Right to prescribe rules
JUSTICE 3. Right to select employees
1. Social Justice does not champion division of 4. Right to transfer or discharge employees
property or equality of economic status. It should o Management prerogatives are subject to limitations
not tolerate usurpation of property, public or provided by: (1) Law; (2) Contract or collective
private.
bargaining agreements, and (3) General principles of
2. May only protect the laborers who come to court
with clean hands. fair play and justice.
3. Never result in an injustice or oppression of the
employer. TRIPARTISM *
4. If it is used to shield wrongdoings, it cannot be o It is composed not only of government representatives
permitted to be the refuge of scoundrels but also of employers’ and workers’ organizations.
o The principle of tripartism permeates the composition
ART. 4 – All doubts in the implementation and of ILO’s deliberative bodies and influences in many
interpretation of the provisions of this Code, including its respects the contents of ILO instruments
implementing rules and regulations, shall be resolved in
favor of labor. INTERNATIONAL ASPECT *
o The SC adopts the liberal approach which favors the o Established in 1919
exercise of labor rights. o The Philippines is a member of the ILO. (June 15, 1948)
o The International Labor Organization (ILO) is the UN
Reason for According Greater Protection to Employees specialized agency which seeks the promotion of social
o Employer stands on higher footing than the employee. justice and internationally recognized human and labor
o There is greater supply than demand for labor. rights.
o The need for employment by labor comes from vital, - Formulates international labor standards in
and even desperate, necessity. the form of Conventions and
Recommendations setting minimum standards
CONTRACT OF LABOR * of basic labor rights:
o It is a consensual, nominate, principal, and 1. Freedom of association;
commutative contract whereby the employer, 2. The right to organize;
3. Collective bargaining;
4. Abolition of forced labor; 8. Discrimination (Employment and Occupation)
5. Equality of opportunity and treatment; and Convention, 1958
6. Other standards regulating conditions
across the entire spectrum of work-related
EQUIPOISE RULE *
issues.
o In a labor case, if there is doubt, such doubt must be
International Commitments resolved in favor of the employee.
fundamental principles: (LFPW)
1. Labor is not a commodity; EMPLOYMENT CONTRACT (Nature) *
2. Freedom of expression and of association are o Principal – contract stands on its own
essential to sustained progress; o Nominate – has a special name provided by law
3. That Poverty anywhere constitutes a danger to o Consensual – perfected with consent
prosperity everywhere; o Commutative – service exchanged for wages
4. the War against want requires to be carried on with
unrelenting vigor within each nation, and by EMPLOYER-EMPLOYEE RELATIONSHIP *
continuous and concerted international effort in Employer:
which the representatives of workers and o Any person, natural or juridical, domestic or foreign,
employers, enjoying equal status with those of who carries on it the Philippines any trade, business,
governments, join with them in free discussion and industry, undertaking, or activity of any kind and uses
democratic decision with a view to the promotion the services of another person who is under his orders
of the common welfare. as regards employment Except the Government and any
of its political subdivisions, branches, or
Objectives: (FPRE) instrumentalities, including corporations owned and
1. Full employment and the raising of standards of controlled by the Government. *
living; o May be a single proprietor, a partnership or a
2. Policies in regard to wages and earnings, hours and corporation
other conditions of work calculated to ensure a just o Question of law – arises when there is doubt as to what
share of the fruits of progress to all, and a minimum law is on a certain state of facts;
living wage to all employed and in need of such o Question of fact – when the doubt arises to the truth or
protection; falsity of the alleged facts.
3. The effective Recognition of the right of collective Employee:
bargaining, the cooperation of management and o Any (natural) person who performs services for an
labor in the continuous improvement of productive employer in which both mental and physical efforts are
efficiency, and the collaboration of workers and used and who receives compensation for such-services
employers in the preparation and application of where there is an EER. *
social and economic measures; Note:
4. The Extension of social security measures to o A self-employed person shall be both employee and
provide a basic income to all in need of such employer at the same time.
protection. o “xxx It is well-settled in law and jurisprudence that
where no EER exists between the parties and no issue
8 ILO Core Conventions (AC-FAM-WED) * is involved which may be resolved by reference to the
1. Freedom of Association and Protection of the Right Labor Code, other labor statutes or any collective
to Organize Convention, 1948 bargaining agreement, it is the Regional Trial Court
2. Right to Organize and Collective Bargaining that has jurisdiction.”
Convention, 1949 o The existence of an employment relationship is a
3. Forced Labor Convention, 1930 question of fact that is decided on a case to case basis.
4. Abolition of Forced Labor Convention, 1957 o No prescribed method or rule to determine existence of
5. Minimum Age Convention, 1973 ER/EE relationship.
6. Worst Forms of Child Labor Convention, 1999 o Over the years, the SC had used (a) the four- fold test
7. Equal Remuneration Convention, 1951 and (b) the two-tiered test.

ART. 97 employed person shall be both employee and employer at
(a) “Person” means an individual, partnership, the same time.
association, corporation, business trust, legal (d) “Employee” - Any person who performs
representative, or any organized group of persons. services for an employer in which either or both mental and
(b) "Employer" includes any person acting directly or physical efforts are used and who receives compensation
indirectly in the interest of an employer in relation for such services, where there is an employer-employee
to an employee and shall include the government relationship: Provided, That a self-employed person shall be
and all its branches, subdivisions and both employee and employer at the same time.
instrumentalities, all government-owned or
controlled corporations and institutions, as well as EVIDENCE OF EMPLOYMENT *
non-profit private institutions, or organizations. 1. Employment contract
(c) "Employee" includes any individual employed by an 2. SSS
employer. 3. ID
(e) “Employ” includes to suffer or permit to work. 4. Payroll
5. Registration
ART. 173
(f) “Employer” means any person, natural or juridical, EXISTENCE OF EER
employing the services of the employee o Employment relationship is determined by law and not
(g) “Employee” means any person compulsorily by contract
covered by the GSIS under the Commonwealth Act No. 186
as amended, including the members of the AFP, and any What property right is conferred upon an employee
person employed as casual, emergency, temporary, once there is an EER?
substitute or contractual, or any person compulsorily - Once EER is established, such employment is
covered by the SSS under RA 1161 (as amended) treated, under our constitutional framework, as a
property right
ART. 219 - When a person has no property, his job may be his
(e) “Employer” includes any person acting in the only possession or means of livelihood and those of
interest of an employer, directly or indirectly. The his dependents.
term shall not include any labor organization or - Therefore, the worker shall be protected and
any of its officers or agents except when acting as insulated against any arbitrary deprivation of his
employer job.
(d) “Employee” includes any person in the employ of an
employer. The term shall not be limited to the The Four-Fold Test (SWDC) *
employees of a particular employer, unless the 1. The Selection and engagement of the employee
Code so explicitly states. It shall include any 2. The payment of Wages
individual whose work has ceased as a result of or 3. The power of Dismissal
in connection with any current labor dispute or 4. The power to Control the employees’ conduct
because of any unfair labor practice if he has not (most important)
obtained any other substantially equivalent and - INDICIA OF DETERMINATION
regular employment
o Control test * – assumes primacy in the overall
RA 8282 * consideration
(c) “Employer” - Any person, natural or juridical, 1. There is EER when the employer reserves the right
domestic or foreign, who carries on in the Philippines any to control not only the end achieved but also the
trade, business, industry, undertaking or activity of any kind manner and means used to achieve that end *
and uses the services of another person who is under his 2. Absent the power to control the employee with
orders as regards the employment, except the Government respect to the means and methods of accomplishing
and any of its political subdivisions, branches or his work, there is no employer-employee
instrumentalities, including corporations owned or relationship between the parties.
controlled by the Government: Provided, That a self-
o Kinds of control exercised by an employer appointment is not indispensable before one may be
Note: Not every form of control establishes EER. A formally declared as having attained regular status
demarcation line should be drawn between:
1. That merely serves as guidelines which only Consulta v. CA
promotes the result; and (NO EER) o In the present case, the power to control is missing.
2. Rules that fix the methodology and bind or Pamana tasked Consulta to organize, develop, manage,
restrict the party hired to the use of such and maintain a sales division, submit a number of
means or methods. (ESTABLISHES EER) enrollments and revenue attainments in accordance
with company policies and guidelines, and to recruit,
Sonza v. ABS-CBN Broadcasting Corporation train and direct her Supervising Associates and Health
o There is no employer-employee relationship. Applying Consultants. However, the manner in which Consulta
the four-fold test, petitioner Sonza was considered by was to pursue these activities was not subject to the
the Court as an independent contractor. control of Pamana. Consulta failed to show that she had
o Selection and engagement of employee: The specific to report for work at definite hours. The amount of time
selection and hiring of SONZA, because of his unique she devoted to soliciting clients was left entirely to her
skills, talent and celebrity status not possessed by discretion. The means and methods of recruiting and
ordinary employees, is a circumstance indicative, but training her sales associates, as well as the
not conclusive, of an independent contractual development, management and maintenance of her
relationship. sales division, were left to her sound judgment.
o Payment of wages: The power to bargain talent fees
way above the salary scales of ordinary employees is a Republic v. ASIAPRO
circumstance indicative, but not conclusive, of an o An owner-member of a cooperative can be an employee
independent contractual relationship. of the latter and an employer-employee relationship
o Power of dismissal: For violation of any provision of can exist between them. A cooperative acquires
the Agreement, either party may terminate their juridical personality upon its registration with the
relationship. SONZA failed to show that ABS-CBN could Cooperative Development Authority. It has its Board of
terminate his services on grounds other than breach of Directors, which directs and supervises its business;
contract. meaning, its Board of Directors is the one in charge in
o Power of control: The control test is the most the conduct and management of its affairs. With that, a
important test our courts apply in distinguishing an cooperative can be likened to a corporation with a
employee from an independent contractor. This test is personality separate and distinct from its owners-
based on the extent of control the hirer exercises over a members.
worker. The greater the supervision and control the o The existence of an employer-employee relationship
hirer exercises, the more likely the worker is deemed cannot be negated by expressly repudiating it in a
an employee. The converse holds true as well the less contract, when the terms and surrounding
control the hirer exercises; the more likely the worker circumstances show otherwise. The employment
is considered an independent contractor. status of a person is defined and prescribed by law
o ABS-CBN did not exercise control over the means and and not by what the parties say it should be.
methods of performance of SONZAs work.
o Hence, Sonza is not an employee but an independent Coca Cola Bottlers v. Climaco
contractor. o The Labor Arbiter reasoned that the Comprehensive
Medical Plan, which contains the respondent’s
ABS-CBN Broadcasting Corporation v. Nazareno objectives, duties and obligations, does not tell
o We agree with respondents’ contention that where a respondent "how to conduct his physical examination,
person has rendered at least one year of service, how to immunize, or how to diagnose and treat his
regardless of the nature of the activity performed, or patients, employees of [petitioner] company, in each
where the work is continuous or intermittent, the case.
employment is considered regular as long as the
activity exists, the reason being that a customary

The Two-Tiered Test; the Economic Dependence Test * 7. The degree of dependency of the worker upon
o Provides us with a framework analysis, which would the ER for his continued employment in that line of
take into consideration the totality of circumstances business.
surrounding the true nature of the relationship
between the parties. Note: Mode of compensation is not determinative of EER
o Appropriate when there is no written agreement or - Piece-rate, boundary and pakyaw are merely
terms of reference to base the relationship on and due methods of pay computation and do not prove
to the complexity of the relationship based on the whether the payee is an employee or not
various positions and responsibilities given to the
worker over the period of the latter’s employment BOUNDARY-HULOG SCHEME
o Elements * o A dual juridical relationship was created:
1. The putative employer’s power to control the - That of ER-EE and vendor-vendee
employee with respect to the means and methods o A scheme by an owner/operator engaged in
by which the work should be accomplished (4-fold transporting passengers as a common carrier to
test) primarily govern the compensation of the driver, that
2. The underlying economic realities of the activity or is, the latter’s daily earnings are remitted to the
relationship (economic reality test) owner/operator less the excess of the boundary which
represents the driver’s compensation.
o Under this system, the owner/operator exercises
Note – APPLICATION OF 4-FOLD TEST & 2-TIERED TEST: control and supervision over the driver.
Present Philippine law recognizes a two-tiered test. The o Employment relationship – the Court said: “The fact
first tier of the test is the four-fold test. The second tier that the drivers do not receive fixed wages but get only
is the economics of the relationship test. But the latter that in excess of the so-called “boundary” they pay to
test is used if and only if there is going to be harshness in the owner/operator is not sufficient to withdraw the
the results because of the strict application of the four- relationship between them from that of employer and
fold test. employee.” (Jeepney drivers, etc)
PROPER STANDARD FOR ECONOMIC DEPENDENCE * Villamaria v. CA

- it is whether the worker is dependent on the o Under the boundary-hulog scheme, a dual juridical
alleged employer for his continued employment relationship is created; that of employer- employee and
in that line of business. vendor-vendee. The Kasanduan did not extinguish the
employer employee relationship of the parties existing
Angelina Francisco v. NLRC* before the execution of said deed.
Determination of relationship between ER and EE o The existence of an employment relation is not
depends on the circumstances of the whole economic dependent on how the worker is paid but on the
activity, such as: presence or absence of control over the means and
1. The extent to which the services performed are an method of the work.
integral part of the ER’s business o The amount earned in excess of the “boundary hulog” is
2. The extent of the worker’s investment in equivalent to wages and the fact that the power of
equipment and facilities; dismissal was not mentioned in the Kasunduan did not
3. The nature and degree of control exercised by the mean that private respondent never exercised such
ER; power or could not exercise such power.
4. The worker’s opportunity for profit and loss;
5. The amount of initiative, skill, judgment, or foresight Matling Industrial v. Coros
required for the success of the claimed o For a position to be considered as a corporate office, or,
independent enterprise; for that matter, for one to be considered as a corporate
6. The permanency and duration of the officer, the position must, if not listed in the by-laws,
relationship between the worker and ER; and have been created by the corporation's board of
directors, and the occupant thereof appointed or
elected by the same board of directors or stockholders.
o The criteria for distinguishing between corporate - Relationship between employer and employee
officers who may be ousted from office at will, on one - Under the government
hand, and ordinary corporate employees who may 1. Non-standard – one that deviates from the
only be terminated for just cause, on the other hand, do standard form of employment
not depend on the nature of the services performed, but - e.g. multiple party employment relationship
on the manner of creation of the office. (involves trilateral relationship among three
o The determination of whether the dismissed officer parties)
was a regular employee or corporate officer unravels - example of this is job-contracting under the LC
the conundrum of whether a complaint for illegal
dismissal is cognizable by the Labor Arbiter or by the LABOR CODE PROVISIONS (Independent Contractors and
RTC. “In case of the regular employee, the LA has Labor-Only Contractors)
jurisdiction; otherwise, the RTC exercises the legal
authority to adjudicate. ART. 106 – Contractor or subcontractor. * Whenever an
employer enters into a contract with another person for the
Cosare v. Broadcom Asia performance of the former’s work, the employees of the
o Constructive dismissal is therefore a dismissal in contractor and of the latter’s subcontractor, if any, shall be
disguise. paid in accordance with the provisions of this Code.
o The law recognizes and resolves this situation in favor
of employees in order to protect their rights and In the event that the contractor or subcontractor
interests from the coercive acts of the employer. fails to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally
Atlanta Industries v. Sebolino liable with his contractor or subcontractor to such
o As regular employees, you cannot be made to sign an employees to the extent of the work performed under the
agreement making you an apprentice again. contract, in the same manner and extent that he is liable to
employees directly employed by him.
ART. 295, LC [280] – The provisions of written agreement
to the contrary notwithstanding and regardless of the oral The Secretary of Labor and Employment may, by
agreement of the parties, an employment shall be deemed appropriate regulations, restrict, or prohibit the
to be regular where the employee has been engaged to contracting-out of labor to protect the rights of workers
perform activities which are usually necessary or established under this Code. In so prohibiting or restricting,
desirable in the usual business or trade of the he may make appropriate distinctions between labor-
employer, except where the employment has been fixed only contracting and job contracting as well as
for a specific project or undertaking the completion or differentiations within these types of contracting and
termination of which has been determined at the time determine who among the parties involved shall be
of the engagement of the employee or where the work or considered the employer for purposes of this Code, to
service to be performed is seasonal in nature and the prevent any violation or circumvention of any provision of
employment is for the duration of the season. this Code.
§ Applies where the existence of EER is not the issue
of the dispute. There is "labor-only" contracting where the
§ If the issue is whether or not the claimant is an person supplying workers to an employer does not have
employee, the tests of employment relationship substantial capital or investment in the form of tools,
shall be resorted to. equipment, machineries, work premises, among others, and
§ Article 295 limits itself to differentiating four the workers recruited and placed by such person are
kinds of employment arrangement: regular, performing activities which are directly related to the
project, seasonal, and casual. The article principal business of such employer. In such cases, the
presupposes that employment relationship exists person or intermediary shall be considered merely as an
between the parties agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were
According to the ILO, there are 2 forms of employment: directly employed by him.
1. Standard – considered as old school (Bilateral)
ART. 107 – Indirect employer. The provisions of the 2. Contractor or Subcontractor – has the capacity to
immediately preceding article shall likewise apply to any independently undertake the performance of the
person, partnership, association or corporation which, not job, work or service; and
being an employer, contracts with an independent 3. Contractual Workers – engaged by the contractor
contractor for the performance of any work, task, job or or subcontractor to accomplish the job, work or
project. service pursuant to the agreement between the
latter and the principal.
ART. 108 – Posting of bond. An employer or indirect
employer may require the contractor or subcontractor to Principal
furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the
employees should the contractor or subcontractor, as the
case may be, fail to pay the same.
ART. 109 – Solidary liability. The provisions of existing Service Contract/ Independent
laws to the contrary notwithstanding, every employer or Service Agreement Contractor
indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any
provision of this Code. For purposes of determining the
extent of their civil liability under this Chapter, they shall be
considered as direct employers. Labor Contract
DOLE D.O. No. 18-A, s. 2011 Job Contractor Contractual Employees

DOLE D.O. No. 174, s. 2017 *
DOLE D.O. No. 01, s. 2017 (Clarifying D.O. No. 174) ELEMENTS OF LEGITIMATE JOB CONTRACTING OR
SUBCONTRACTING *
JOB CONTRACTING OR SUBCONTRACTING * o A person is considered engaged in legitimate job
o Sec 3C of DO 174-17 - This refers to an arrangement contracting or subcontracting if the following
whereby a principal agrees to put out or farm out to a conditions concur:
contractor or subcontractor the performance or 1. The Contractor or subcontractor carries on a
completion of a specific job, work or service within a Distinct and independent business and
definite or predetermined period, regardless of Undertakes to perform the job, work or service
whether such job, work or service is to be performed or on its own account and under its own
completed within or outside the premises of the responsibility according to its own Manner and
principal. method, and
2. Free from the control and direction of the
TRILATERAL RELATIONSHIP * principal in all matters connected with the
o Exists in legitimate contracting performance of the work Except as to the results
o There is a contract for a specific job, work or service thereof;
between the principal and the contractor or 3. The contractor or subcontractor has Substantial
subcontractor, and capital or investment; and
o A contract of employment between the contractor or 4. The Service Agreement ensures compliance with
subcontractor and its workers. all the rights and benefits for all the employees of
the contractor or subcontractor under the labor
§ There are 3 parties involved in these laws (D.O. No. 174, Sec. 8, s. 2017).
arrangements: *
1. Principal – any employer who decides to farm out PAL v. Ligan
a job or service to a contractor or subcontractor o Totality of evidence test: it is the totality of the facts
surrounding the circumstances of the case which is
determinative of the parties relationship.
Note: There is NO EER between the owner of the project
SUBSTANTIAL CAPITAL * and the employees of the IC. The principal employer is
o Refers to paid-up capital stocks/shares of at least 5M considered only an indirect employer.
php in the case of corporations, partnerships and
cooperatives. 5M php net worth in the case of a single What is contracted is the performance and
proprietorship. completion of a designated job, and not just the supplying of
o The law does not require both substantial capital and people to do the job.
investments, it is sufficient that either of the two is
complied with. DOLE Philippines v. Esteva
o Burden of proof to prove that he/it has substantial o CAMPCO, the alleged contractor, did not carry out an
capital or investment rests on the contractor himself independent business from petitioner. It was precisely
established to render services to petitioner to augment
Note: In legitimate Job Contracting, the principal is jointly its workforce during peak seasons. Petitioner was its
and severally liable with the contractor for the payment of only client. Even as CAMPCO had its own office and
unpaid wages. * office equipment, these were mainly used for
administrative purposes; the tools, machineries, and
DOLE Philippines v. Esteva * equipment actually used by CAMPCO members when
o Substantial capitalization must exist at the time of rendering services to the petitioner belonged to the
incorporation and it should not just go over the years. latter. This is indicative of a labor-only contracting.
Secretary of Labor and Employment * Note: Between the principal and the contractor’s
- Empowered by the LC to restrict or prohibit employees, no EER exists; the contractor, being himself a
Labor-only contracting and to distinguish what businessman, is the employer. But the contractor may in
is Job-Contracting and Labor-only contracting turn become a contractee if he contracts with a contractor.
INDEPENDENT CONTRACTOR * EER may be declared to exist between the principal

o Those who undertake “job-contracting.” They exercise and the contractor’s workers where the contracting
independent employment, contracting to do a piece arrangement is not legitimate.
of work according to their own methods and without
being subject to control of their employer except as to LABOR-ONLY CONTRACTING *
the result of their work. o It is a prohibited act, an arrangement where the
o Independent contractors often present themselves to contractor or subcontractor merely recruits, supplies
possess unique skills, expertise or talent to or places workers to perform a job, work or service for
distinguish them from ordinary employees (Sonza v. a principal.
ABS-CBN, G.R. No. 138051, June 10, 2004).
Essential Element:
San Miguel Corporation v. Abella 1. Supplying workers to another
Test of Independent Contractor *
o Whether the one claiming to be an independent Confirming Elements
contractor, contracted out work according to own 1. Lack of substantial capital or investment and
methods without being subject to the control of the performance of activities directly related or usually
employer. necessary or desirable to the principal’s main
business; or
Indirect or Statutory Employer 2. The contractor does not exercise control over the
o One who enters into a contract with an independent performance of the employees
contractor for the performance of any work, task, job,
or project not directly related to the employer’s NOTE: If the essential element is absent, there can be no
business LOC. And even if the essential element is present, but either
of the confirming elements are absent, there is still no LOC.*

o Activities which are directly related to the principal Effect of Failure to Register by the Independent
business of the employer. Contractor with DOLE: *
- Governed by Art. 106 o A Certificate of Registration shall be effective for two
- Refers to the standard used whether or not years, unless cancelled after due process.
labor-only contracting exists. o Failure to register shall give rise to the presumption
o Activities necessary or desirable in the usual that the contractor is engaged in labor-only
business or trade. contracting.
- Governed by Art. 280. § Although unregistered, the contractor may prove
- Used to determine regular or casual that it is a legitimate contractor
employee. § The fact of being registered is NOT conclusive
proof of being a legitimate contractor.
Note: “Labor-only” contractor is considered merely as an § NEITHER does the registration presume the
agent of the employer and is responsible to the employees registrant to be a legitimate contractor.
of the “labor-only” contractor as if they had been directly § Actual conduct of the relationship PROVES
employed by the employer. independent contractorship.
Babas v. Lorenzo Shipping Corporation RIGHTS OF CONTRACTOR’S EMPLOYEES (SLR-SSS) *

o In the definition of Job-Contracting, it said that whether 1. Safe and healthful working conditions;
or not the employees are working within the premises 2. Labor standards such as but not limited to service
of the principal or outside the premises, it should be a incentive leave, rest days, overtime pay, holiday pay,
non-issue because the DO clearly states that within or 13th month pay, and separation pay as may be provided
outside, that’s valid job-contracting in the Service Agreement or under the Labor Code;
o This Manpower had no other clients aside from LSC. 3. Retirement benefits under the SSS or retirement
o Net Financial Contracting Capacity – should be included plans of the contractor, if there is any;
in the service agreement all the outstanding contracts 4. Social security and welfare benefits;
of the job-contractor to determine its number of clients 5. Self-organization, collective bargaining and peaceful
(DO 18-A) concerted activities; and
6. Security of tenure.
JOB CONTRACTING LABOR-ONLY CONTRACTING
The ER/Principal is merely The ER/Principal is treated NOTE: Generally, the contractor is presumed to be a labor-
an indirect employer, by as direct employer of the only contractor, UNLESS such contractor overcomes the
operation of law, of his contractor’s employees in burden of proving that it has the SUBSTANTIAL capital,
contractor’s employees. all instances. (contractor = investment, tools and the like.
agent of the employer)
The LAW creates an EER for The STATUTE creates an NOTE: Where the principal is the one claiming that the
a LIMITED purpose. EER for a COMPREHENSIVE contractor is a legitimate contractor, said principal has the
purpose. burden of proving that supposed status.
The principal becomes The principal becomes
solidarily liable. The solidarily liable with the Contractor or Subcontractor to Furnish a Bond *
liability however does not contractor not only for o An employer or indirect employer may require the
extend to the payment of unpaid wages but also for contractor or subcontractor to furnish a bond equal to
backwages or separation all the rightful claims of the the cost of labor under contract, on the condition that
pay of employees who are employees under the LC the bond will answer for the wages due the
illegally dismissed. and ancillary laws. employees should the contractor or subcontractor, as
Allowed by law Prohibited by law the case may be, fail to pay the same.
Presence of substantial Absence of substantial
capital or investment. capital or investment. NOTE: Where the employer fails to require the posting of
the bond, he must be liable for whatever the contractor
may have incurred to his employees, without prejudice to

its right of reimbursement from the contractor for whatever solely that of the principal conspired with the
amount paid. contractor in the commission of the illegal
dismissal
EXTENT OF EMPLOYER’S LIABILITY IN INVALID
CONTRACTING: Meralco v. Benamira *
o Where the contracting is found to be labor-only o The principal can only be made solidarily liable with
contracting, the liability is immediately and directly the job contractor if it can be proven that the principal
imposed upon the principal. conspired with the job contractor in the illegal
o The principal shoulders all the obligation of an dismissal of the employees. (Separation Pay)
employer, not just the payment of wages. The liability
becomes direct and total as that of a directly hiring NOTE: The contractor’s liability for underpaid wages and
employer. unpaid overtime work could be enforced against the
surety bond posted by the contractor as required by the
EXTENT OF PRINCIPAL’S LIABILITY IN LEGITIMATE principal. The law’s aim in imposing indirect liability upon
CONTRACTING the principal is to assure payment of monetary
o The contractor or subcontractor shall be considered obligations to the workers. This aim is accomplished
the employer of the contractual employee for purposes through the principal’s requiring the posting of a bond.
of enforcing the provisions of the LC and other social After satisfying from the bond the unpaid wages and
legislation. overtime pay, the contractor cannot recover from the
o The principal shall be solidarily liable with the principal if the principal has already handed over to the
contractor in the event of any provisions of the LC, contractor the amount covering the wages, or the pay
including the failure to pay wages. increase mandated by a wage order.
For Wages and Money Claims * CLASSES OF EMPLOYEES

o In the event that the contractor or subcontractor fails to
pay the ages of his employees in accordance with the Art. 293. Coverage – The provisions of this Title shall apply
Code: to all establishments or undertakings, whether for profit or
- The employer shall be JOINTLY and not.
SEVERALLY LIABLE with the contractor or
subcontractor to such employees to the Art. 295. Regular and casual employment * – The
extent of the work performed under the provisions of written agreement to the contrary
contract, in the same manner and extent that notwithstanding and regardless of the oral agreement of the
he is LIABLE TO EMPLOYEES directly parties, an employment shall be deemed to be regular
employed by him. where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business
NOTE: Where no EER exists between the parties and no or trade of the employer, except where the employment has
issue is involved which may be resolved by reference to the been fixed for a specific project or undertaking the
LC, other labor statutes or any CBAs, it is the RTC that has completion or termination of which has been determined at
jurisdiction. the time of the engagement of the employee or where the
work or service to be performed is seasonal in nature and
LIABILITY: the employment is for the duration of the season.
1. For failure to pay the minimum wage or the service
incentive leave or other benefits An employment shall be deemed to be casual if it is
- The principal is equally liable with the not covered by the preceding paragraph: Provided, That any
contractor as if the principal were the employee who has rendered at least one year of service,
direct employer. whether such service is continuous or broken, shall be
2. With punitive character considered a regular employee with respect to the activity
- Such as an award for backwages and separation in which he is employed and his employment shall continue
pay because of an illegal dismissal of the while such activity exists.
contractor’s employee, the liability should be
§ Applies where the existence of EER is not the issue 2. As to length of service – Any EE who has rendered at
of the dispute. least one (1) year of service, whether such service is
§ If the issue is whether or not the claimant is an continuous or broken, shall be considered a REGULAR
employee, the tests of employment relationship
EE with respect to the activity in which he is employed
shall be resorted to.
§ Art. 295 limits itself to differentiating four kinds of and his employment shall continue while such activity
employment: regular, project, seasonal, and casual. exists (IRR, Book VI, Rule I, Sec. 5 [b]).
§ The article presupposes that employment
relationship exists between the parties. TEST:
o Reasonable connection of the function of work to the
Art. 296. Probationary employment * – Probationary nature of the business.
employment shall not exceed six (6) months from the
date the employee started working, unless it is covered by NOTE: The law does not provide the qualification that the
an apprenticeship agreement stipulating a longer period. EE must first be issued a regular appointment or must first
The services of an employee who has been engaged on a be formally declared as such before he can acquire a regular
probationary basis may be terminated for a just cause or status. *
when he fails to qualify as a regular employee in
NOTE: The repeated rehiring of workers and the continuing
accordance with reasonable standards made known by
need for their services clearly attest to the necessity or
the employer to the employee at the time of his engagement. desirability of their services in the regular conduct of the
An employee who is allowed to work after a business or trade of the company. *
probationary period shall be considered a regular
employee. NOTE: Regularization is not a management prerogative;
rather, it is the nature of employment that determines it. It
is a mandate of the law. *
IRR, Book VI, Section 5. Due Process of Termination of
Employment NOTE: What determines regularity or casualness is not the
IRR, Book VI, Rule 1. Application of Just and Authorized employment contract, written or otherwise, but the
Causes of Termination nature of the job. (Policy Instruction No. 2) *
KINDS OF EMPLOYMENT NOTE: The practice of entering into employment contracts

o As to tenure * which would prevent the workers from becoming regular
should be struck down as contrary to public policy and
1. Permanent – who is appointed to a job for an
morals.
undefined and indefinite period.
2. Temporary/Probationary – one who stays on the Pier 8 Arrastre & Stevedoring Services v. Boclot
job for a defined or pre-agreed period. o While a reading of the law would deem Boclot a casual
employee (on grounds that he only worked during the
o As to Labor Code Book VI (RPS-CPF) * absence of regulars, only 6 hours in a month, was not
1. Regular prevented from engaging in other stevedoring services)
2. Project he is STILL regular based on CBA between the employer
3. Seasonal and union.
4. Casual o Under a union-shop agreement, although nonmembers
5. Probationary may be hired, an employee is required to become a
6. Fixed term union member after a certain period, in order to retain
employment.
TYPES OF REGULAR EMPLOYMENT *
1. As to nature of work – An employment shall be The Peninsula Manila v. Alipio
deemed to be regular where the EE has been engaged o Any employee who has rendered at least one year of
to perform activities which are usually necessary or service, even though intermittent, is deemed regular
desirable in the usual business or trade of the ER, with respect to the activity performed and while such
the provisions of written agreements to the contrary activity actually exists.
notwithstanding and regardless of the oral agreements
of the parties (IRR, Book VI, Rule I, Sec. 5 [a]).

Rowell Industrial Corporation v. CA TEMPORARY EMPLOYEE BECOMING REGULAR *
o There are two kinds of regular employees: (1) those An employment may only be said to be ‘temporary’:
who are engaged to perform activities which are 1. Where it has been fixed for a specific undertaking
USUALLY NECESSARY OR DESIRABLE in the USUAL the completion of which has been determined at
BUSINESS or TRADE of the employer; and (2) those the time of the engagement of the employee; or
who have rendered at least one year of service, whether 2. Where the work or services to be performed is
continuous or broken, with respect to the activity in seasonal in nature and the employment is for the
which they are employed. duration of the season
o Taripe belonged to the first category.
o The purported contract of employment providing that CONTRACT OF PERPETUAL EMPLOYMENT *
Taripe was hired as contractual employee for 5 months o It deprives management of its prerogative to decide
only, cannot prevail over the undisputed fact that he whom to hire, fire, and promote and renders inutile
was hired to perform the function of power press the basic precepts of labor relations
operator, a function necessary or desirable in o It is contrary to public policy and good customs, as it
petitioner’s business of manufacturing tin cans. unjustly forbids the employer from terminating the
o length of service assumes importance only when the services of an employee despite the existence of a just
activity in which the employee has been engaged to or valid cause.
perform is not necessary or desirable to the usual
business or trade of the employer. Mode of compensation is not determinative of regular
o The employment contract signed by Taripe did not employment *
mention that he was hired only for a specific o While the employees’ mode of compensation was on a
undertaking, the completion of which had been “per piece basis” the status and nature of their
determined at the time of his engagement. The said employment was that of regular employees.
employment contract neither mentioned that
respondent's services were seasonal in nature and that PROJECT EMPLOYMENT *
his employment was only for the duration of the o Project employment is employment that has been fixed
Christmas season as purposely claimed by petitioner. for:
§ Specific undertaking – a specific project or
Kimberley Clark Phils. v. Secretary of Labor undertaking the completion; or
o The reckoning date for determining his regularization § Time-bound – termination of which has been
is his hiring date. determined at the time of engagement of the
employee.
Poseidon Fishing v. NLRC * o The period is not the determining factor, so that even if
The ACID TEST in considering fixed-term contracts as valid the period is more than 1 year, the employee does not
is: if from the circumstances it is apparent that periods have necessarily become regular
been imposed to preclude acquisition of tenurial security by o Nature of work may or may not be in line with the
the employee, they should be disregarded for being business
contrary to public policy. o Where the employment of a Project EE is extended
long after the supposed project has been finished, the
EEs are removed from the scope of the Project EEs and
Leyte Geothermal Power Progressive Employees Union considered as REGUAR EEs.
v. PNOC-EDC * o Repeated hiring on a project-to-project basis is
The LITMUS TEST to determine whether an individual is a considered necessary and desirable to the business of
project employee lies in setting a fixed period of the ER. EE = regular.
employment involving a specific undertaking which
completion or termination has been determined at the time Poseidon Fishing v. NLRC
of the particular employee’s engagement. o The principal test for determining whether particular
employees are "project employees" as distinguished
from "regular employees," is whether or not the
"project employees" were assigned to carry out a
"specific project or undertaking," the duration and Requisites to acquire REGULAR EE status of PROJECT EE
scope of which were specified at the time the or a MEMBER OF WORK POOL *
employees were engaged for that project. o The following must concur to acquire a status of a
o In this case, Eustoquia was never informed that he will regular EE status:
be assigned to a "specific project or undertaking” at the 1. There is a continuous rehiring of project EE’s
time of their engagement. even after cessation of a project; and
o Eustoquia’s functions were usually necessary or 2. The tasks performed by the alleged “Project EE”
desirable in the usual business or trade of petitioner are vital, necessary and indispensable to the
fishing company and he was hired continuously for 12 usual business or trade of the ER
years for the same nature of tasks. Hence, he was of
regular employee. o The length of time during which the EE was
continuously re-hired is not controlling, but merely
Determining Factors of Project EE: (DID-ER) * serves as a badge of regular employment.
1. Designation of named EEs as “Project Employees”;
2. Project must be Identified; D.M. Consunji, Inc. v. Gobres
3. The Duration and scope are specified at the time o If the termination of project employees is brought
the EE was engaged for that project; about by the completion of the contract or phase
4. No Extension after the end of the project thereof, no prior notice is required. An employer
5. Report to the DOLE of EE’s dismissal on account of need not comply with the twin-notice rule unless
completion of contract. termination is due to a Just or Legal Cause under the
Labor Code.
Exodus Industrial Construction v. Biscocho * o The only notice required is for the employer to notify
Employees in the Construction Industry the DOLE of the employee’s termination from the
o Two types of employees in the construction industry: employment for each project.
§ Project Employees - those employed in
connection with a particular construction project “Day Certain” Rule *
or phase; o It states that a project employment that ends on a
§ Non-project Employees - those employed by a certain date does not end on an exact date but upon the
construction company without reference to a completion of the project.
particular project.
o When one project is completed, employees were FILSYSTEMS v. Puente
automatically transferred to the next project. There o Evidently, although the employment contract did not
was no employment agreement given to the employees state a particular date, it did specify that the
which clearly spelled out the duration of their termination of the parties’ employment relationship
employment, the specific work to be performed and was to be on a "day certain" -- the day when the phase
that such is made clear to them at the time of hiring. As of work termed "Lifting & Hauling of Materials" for the
such, they are regular employees falling under the "World Finance Plaza" project would be completed.
classification of non- project employees. Thus, respondent cannot be considered to have been a
regular employee. He was a project employee.
WORK POOL
o Members of a work pool from which a construction Entitlement to Separation Pay *
company draws its project employees, if considered GR: Project EEs are not entitled to separation pay if their
employee of the construction company while in the services are terminated as a result of the completion of
work pool, are non-project employees or employees for project.
an indefinite period XPN: If the projects they are working on have not yet been
o If they are employed in a particular project, the completed when their services are terminated
completion of the project or any phase thereof will not
mean severance of EER NOTE: Project EEs also enjoy security of tenure during the
limited time of their employment

SEASONAL EMPLOYMENT * o The nature of their relationship with the employer is
o Employment where the job, work or service to be such that during the off season, they are temporarily
performed is seasonal in nature and the employment laid off; but reemployed during the summer season
is for the duration of the season. or when their services may be needed.
o An employment arrangement where an EE is engaged o They are in regular employment because of the nature
to work during a particular season on an activity that of their job, and not because of the length of time
is usually necessary or desirable in the business or they have worked.
trade of the ER
o Their employment legally ends upon completion of Universal Robina Sugar Milling Corp. v. Acibo *
the project or the season. o When the seasonal workers are continuously and
o The termination of their employment cannot and repeatedly hired to perform the same tasks or activities
should not constitute an illegal dismissal for several seasons or even after the cessation of the
o One-year duration on the job is pertinent in deciding season, this length of time may serve as a badge of
whether a casual EE has become regular or not, but it is regular employment.
not pertinent to a Seasonal or Project EE. o Even though denominated as seasonal workers, if these
o Passage of time does not make a seasonal worker workers are called to work from time to time and are
regular or permanent. only temporarily laid off during the off-season, the law
o During off-season, EER is not severed; the Seasonal EE considers them seasonal workers on leave until re-
is merely considered on LOA w/o pay. employed.
o Seasonal workers who are repeatedly engaged from o Regular seasonal employees should not be confused
season to season performing the same tasks are with the regular employees who perform their tasks for
deemed to have ACQUIRED REGULAR EMPLOYMENT. the entire year regardless of the season.
Seasonal Employees as Regular Employees * Paz v. Northern Tobacco Redrying,. Inc.

o Seasonal EEs can be considered Regular EEs. o In this case, Northern Tobacco engaged the services of
o The fact that Seasonal EEs do not work continuously for Paz as a seasonal sorter and had been regularly rehired
one whole year but only for the duration of the season from 1974, until she was informed in 2003 that she was
DOES NOT detract from considering them in regular being retired under company policy.
employment. o The services Paz performed as a sorter were necessary
o Seasonal workers who are called to work from time to and indispensable to Northern Tobacco’s business of
time and are temporarily laid off during off-season are flue-curing and redrying tobacco leaves. She was also
not separated from service in that period, but regularly rehired as a sorter during the tobacco seasons
merely considered on leave until re-employed. for 29 years.
o If the EE has been performing the job for at least a year, o There was an implied lack of intent to retire until Paz
even if the performance is not continuous and merely reaches the age of 65 in this case. Paz never abandoned
intermittent, the law deems repeated and continuing her argument of illegal dismissal despite the
need for its performance as sufficient evidence of the amendment of her Complaint.
necessity if not indispensability of that activity to the o Northern Tobacco had considered petitioner Paz
business. retired at the age of 63 before she reached the
§ Hence, the employment is considered regular, but compulsory age of 65, which does not fall under the just
only with respect to such activity and while such causes for termination in Article 282 of the Labor Code,
activity exists. the authorized causes for termination in Article 283, or
o It is not enough that the perform work or services that disease as a ground for termination in Article 284.
are seasonal in nature. They must have also been
employed only for the duration of one season. Entitlement to Separation Pay
o When the business establishment is sold which
Gapayao v. Fulo * effectively terminates the employment of the Seasonal
o Jaime may be considered as a regular seasonal EEs, the latter would be entitled to separation pay.
employee, who are those called to work from time to
time.
CASUAL EMPLOYMENT * submitted at the nearest
o It is an employment where the employee is engaged employment office upon
in an activity which is not usually necessary or completion of the project
desirable in the usual business or trade of the or phase.
employer.
§ Such job, work or service is for a definite period FIXED TERM EMPLOYMENT *
made known to the employee at the time of o It is an employment where a fixed period of
engagement employment was agreed upon:
§ Provided: such employment is neither Project nor 1. Knowingly and Voluntarily by the parties;
Seasonal (LC, Art. 281). 2. Without any Force, Duress or Improper
§ He performs only an incidental job in relation to pressure being brought to bear upon the
the principal activity of the employer. employee and business of employer.
o Despite the distinction between Regular and Casual
employment Term Employment
§ every employee shall be entitled to the same rights o A contract of employment for a definite period
and privileges and terminates by its own terms at the end of such period.
§ shall be subject to the same duties as may be o Term employment is not a circumvention of the law on
granted by law to regular EEs during the period of security of tenure if it follows the requisites laid down
their actual employment. by the Brent ruling.
Casual Employees becoming Regular Employees * Decisive Determinant in Term Employment

o If he has rendered at least one year of service, whether o It is the day certain agreed upon by the parties for the
such service is continuous or broken, he is considered commencement and the termination of their
as Regular EE with respect to the activity in which he employment relation.
is employed, and his employment shall continue while
such activity exists. Fixed Term Employment v. Project Employment *
o A casual EE is only casual for 1 year, and it is the o Both employments are time bound or for a certain
passage of time that gives him a regular status. period as agreed upon at the time of engagement,
o The purpose is to give meaning to the constitutional however in project employment, the employee is
guarantee of security of tenure and right to self- tasked to do specific undertaking, which is not present
organization in fixed-term employment.
PROJECT EMPLOYEE CASUAL EMPLOYEE
Employed for a specific Engaged to perform a job, Brent Doctrine
project or undertaking the work or service which is o Article 295 of the Labor Code does not prohibit an
completion or termination incidental to the business employment contract with a fixed period, provided it is
of which is determined at of the ER and the definite entered into by the parties without any force, duress
the time of his engagement. period of his employment of improper pressure, being brought to bear upon
is made known to him at either party, particularly the employee and absent any
the time of his engagement. other circumstances vitiating consent.
His work need not be His continued employment o Such employment for a defined period is allowed even
incidental to the business after the lapse of one year where the duties of the employee consist of activities
of the ER and his makes him a regular usually necessary or desirable in the usual business of
employment may exceed employee. the employer.
one year without
necessarily making him a PROBATIONARY EMPLOYMENT (UDR) *
regular EE. o Employment where the employee, upon his
Job is continuous with a No termination report engagement:
specific project or phase required. 1. Is made to Undergo a trial period
thereof. It is required that a 2. During which the employer Determines his fitness
termination report be to qualify for regular employment,
3. Based on Reasonable standards made known to the - applying Art. 13 of the NCC, the probationary
employee at the time of engagement. period of 6-months consists of 180 days.
® as clearly provided for the in last par. of Art. 13,
NOTE: In all cases involving employees engaged on in computing a period, the first day shall be
probationary basis, the employer shall make known to the excluded and the last day included.
employee the standards under which he will qualify as a - Probationary employees may be dismissed for a
regular employee at the time of his engagement. just cause before end of the probationary period.
- After the lapse of the probationary period (6
o PROBATION is the period during which the employer months), employee becomes regular.
may determine if the employee is qualified for possible
inclusion in the regular force GR: It shall not exceed 6 months.
XPNs: (HV-SE)
Characteristics of Probationary Employment (ETA) * 1. Highly technical positions which require extensive
1. It is an Employment for a trial period; training
2. It is a Temporary employment status prior to regular - period must be known to the employee at the
employment; time of engagement.
3. It Arises through a contract with the following 2. Voluntary agreement of parties (especially when
elements: (PCF-RS) the nature of work requires a longer period)
a. The employee must learn and work at a Particular
type of work NOTE: By voluntarily agreeing to such an extension, the
b. Such work calls for Certain qualifications employee waived any benefit attaching to the completion
c. The probation is Fixed of the period if he still failed to make the grade during the
d. The employer Reserves the power to terminate period of extension.
during or at the end of the trial period
e. And if the employee has learned the job to the 3. The employer gives the employee a Second chance
Satisfaction of the employer, he becomes a regular to pass the standards set;
employee. 4. When the same is Established by company policy.
Rules on Probationary Employment (IE-6-SD) *
1. Employer shall Inform the employee of the certain o Purpose: to afford the employer an opportunity to
standards under which he will qualify as a regular observe the fitness of a probationary employee at work.
employee (did not inform = regular EE)
2. Employment shall be Expressly agreed upon; without NOTE: The extension of period should always be
such explicit agreement, the employment is considered reasonable; such that, the nature of the work so requires
regular; and that it is the amount of time required for an ordinary
3. Employee must finish the Six (6) months; worker to learn the job.
4. Employee enjoys Security of tenure; his services can
only be terminated for just or authorized causes. Thus, Essence of The Prohibition on Double or Successive
Due process must still be complied with. Probation
o The evil sought to be prevented is to discourage
PNOC-EDC v. Buenviaje scheming employers from using the system of double
o It is also indispensable in probationary employment or successive probation to circumvent the mandate of
that the employer informs the employee of the the law on regularization and make it easier for them to
reasonable standards that will be used as a basis for his dismiss their employees
or her regularization at the time of his or her
engagement. If the employer fails to comply with this, Instances when a Probationary EE is Deemed to be a
then the employee is considered a regular. Regular EE *
1. If he is allowed to work after a probationary period
Period of Probationary Employment * (LC, Art. 281);
- shall be reckoned from the date the employee
actually started working
2. If no standards, under which he will qualify as a The probationary employment of academic
regular EE, are made known to him at the time of teaching personnel shall not be more than a period of six
his engagement. consecutive semesters or nine consecutive trimesters
of satisfactory service, as the case may be.
Grounds for Terminating a Probationary Employment *
1. Just/authorized causes; Section 35. Minimum Faculty Qualifications
2. When he fails to qualify as a regular EE in Section 36. Full-time and Part-time Faculty
accordance with reasonable standards made
known by the ER to the EE at the time of his Magis Young Achievers’ Learning Center v. Manalo *
engagement. o The 6-month limit on the term of probationary
employment does not apply to all classes of
NOTE: If Pre-termination of probationary contract is due to occupations.
the valid causes, the employer is not liable to pay the o For “academic personnel”, probationary employment is
monetary value of the unexpired portion of the governed by Sec. 92 of the 1992 Manual of Regulations
employment. for Private Schools: “probationary period for academic
personnel shall not be more than 3 consecutive years
NOTE: While probationary EEs do not enjoy permanent o This does not mean that academic personnel cannot
status, they are afforded the security of tenure protection of acquire permanent employment status earlier than
the Constitution. Consequently, they cannot be removed after the lapse of three years. The period of probation
from their positions unless for cause. Such constitutional may be reduced if the employer, convinced of the
protection; however, ends upon the expiration of the period fitness and efficiency of a probationary employee,
stated in their probationary contract of employment. voluntarily extends a permanent appointment even
before the three-year period ends.
Limitations on the ER’s Power to Terminate a o Teachers on probationary employment enjoy security
Probationary Employment Contract of tenure. probationary employees enjoy security of
1. The power must be exercised in accordance with tenure during the term of their probationary
the specific requirements of the contract; employment. As such, they cannot be removed except
2. If a particular time is prescribed, the termination for cause as provided by law, or if at the end of every
must be within such time and if formal notice is yearly contract during the three-year period, the
required, then that form must be used; employee does not meet the reasonable standards set
3. The employer’s dissatisfaction must be real and in by the employer at the time of engagement.
good faith, not feigned so as to circumvent the o This guarantee of security of tenure applies only during
contract or the law; and the period of probation. Once that period expires, the
4. There must be no unlawful discrimination in the constitutional protection can no longer be invoked.
dismissal.
Full-time Teacher
NOTE: The probationary EE is entitled to procedural due o One whose total working day is devoted to school, no
process prior to dismissal from service. other regular remunerative employment and is paid on
a regular monthly basis regardless of the number of
MANUAL OF REGULATIONS FOR PRIVATE HIGHER teaching hours.
EDUCATION * o In college, the normal teaching load of a full-time
Section 117. Probationary Period – An academic teaching instructor shall be 18 hours a month.
personnel, who does not possess the minimum academic
qualifications prescribed under Sections 35 and 36 of this St. Mary’s University v. CA *
Manual shall be considered as part-time employee, and The following requisites must concur before a private
therefore cannot avail of the status and privileges of a school teacher acquires permanent status:
probationary employment. A part-time employee cannot 1. The teacher is a full-time teacher;
acquire regular permanent status, and hence, may be 2. The teacher must have rendered three consecutive
terminated when a qualified teacher becomes available. years of service; and
3. Such service must have been satisfactory.
1. Probationary EEs also enjoy security of tenure
NOTE: All teaching personnel who do not meet the 2. In all cases involving EEs on probationary status,
foregoing qualifications are considered part-time the ER shall make known to the EE at the time he is
hired, the standards by which he will qualify for the
Requirement of Full-Time Academic Personnel or positions applied for.
Teacher 3. The filing of the complaint for illegal dismissal
1. Who possess at least the minimum academic effectively negates the ER’s theory of
qualifications prescribed by the Department under abandonment.
this Manual for all academic personnel; 4. The order to go home and not to return to work
2. Who are paid monthly or hourly, based on the constitutes dismissal from employment.
regular teaching loads as provided for in the 5. The 8 probationary EEs employment were
policies, rules and standards of the Department and terminated without just cause and without due
the school; process.
3. Whose total working day of not more than 8 hours In view of the foregoing, I will order reinstatement to their
a day is devoted to the school; former positions without loss of seniority rights with full
4. Who have no other remunerative; back wages, plus damages and attorney’s fees.
5. Occupation elsewhere requiring regular hours of
work that will conflict with the working hours in Mercado v. AMACC
the school; and o The school, however, cannot forget that its system of
6. Who are not teaching full-time in any other fixed-term contract is a system that operates during the
educational institution. probationary period and for this reason is subject to the
terms of Article 281 of the Labor Code.
NOTE: All teaching personnel who do not meet the o Unless this reconciliation is made, the requirements of
foregoing qualifications are considered part-time this Article on probationary status would be fully
negated as the school may freely choose not to renew
o A part-time employee does not attain permanent status contracts simply because their terms have expired.
no matter how long he has served the school. o In a situation where the probationary status overlaps
o And as a part-timer, his services could be terminated by with a fixed-term contract not specifically used for the
the school without being held liable for illegal dismissal. fixed term it offers, Article 281 should assume primacy
o Yet, this is not to say that part-time teachers may not and the fixed-period character of the contract must give
have security of tenure. The school could not lawfully way.
terminate a part-timer before the end of the agreed
period without just cause. But once the period, Dasco v. PHILTRANCO
semester, or term ends, there is no obligation on the o Thus, in order to conclude whether an employee is a
part of the school to renew the contract of employment field employee, it is also necessary to ascertain if actual
for the next period, semester, or term. hours of work in the field can be determined with
reasonable certainty by the employer. In so doing, an
Q: During their probationary employment, 8 employees inquiry must be made as to whether or not the
were berated and insulted by their supervisor. In protest, employee's time and performance are constantly
they walked out. The supervisor shouted at them to go supervised by the employer.
home and never to report back to work. Later, the personnel o Evidently, the petitioners are not field personnel as
manager required them to explain why they should not be defined above and the NLRC's finding in this regard is
dismissed from employment for abandonment and failure supported by the established facts of this case:
to qualify for the positions applied for. They filed a 1. The petitioners, as bus drivers and/or conductors,
complaint for illegal dismissal against their ER. As the Labor are directed to transport their passengers at a
Arbiter, how will you resolve the case? specified time and place;
A: As the LA, I will resolve the case in favor of the 8 2. They are not given the discretion to select and
probationary EEs due to the following: contract with prospective passengers;

3. Their actual work hours could be determined with Art. 97 (f). Wage – paid to any employee shall mean the
reasonable certainty, as well as their average trips remuneration or earnings, however designated, capable of
per month; and being expressed in terms of money, whether fixed or
4. The respondents supervised their time and ascertained on a time, task, piece, or commission basis, or
performance of duties. other method of calculating the same, which is payable by
an employer to an employee under a written or unwritten
Other notes: contract of employment for work done or to be done, or for
• You cannot reclassify Probationary Employees. services rendered or to be rendered and includes the fair
• Are employees of Academic Institutions compelled by and reasonable value, as determined by the Secretary of
law to hire outright for 6 months straight? Labor and Employment, of board, lodging, or other facilities
- Labor Code: YES customarily furnished by the employer to the employee.
- Sec. 117, MORPHR: NO "Fair and reasonable value" shall not include any profit to
• Probationary Employment and Fixed-term the employer, or to any person affiliated with the employer.
Employment may co-exist
- Fixed-term employment may be used as a medium Art. 98. Application of Title – This Title shall not apply to
to hire employees farm tenancy or leasehold, domestic service and
• Regular Seasonal Employees are entitled to persons working in their respective homes in needle
Retirement Benefits (Art. 287, LC) work or in any cottage industry duly registered in
• Employer may waive Probationary Employment accordance with law.
• FINALS PERIOD Twin Attributes of Wages

o Cash wage takes the form of ready money paid by
WAGES the employer for services rendered by the employee.
Wages (MAP-WF) o Facilities are articles or services customarily
1. Capable of being expressed in terms of Money; given for the benefit of the employee and are
2. Whether fixed/ Ascertained on a time, task, piece or voluntarily accepted by him.
commission basis or other methods of calculating the
same; NOTE: The term "wages" also covers all benefits of the
3. Payable by ER to EE, written on unwritten contract; employee under the CBA such as Severance pay,
4. For Work done or to be done, or service rendered or to Educational allowance, accrued Vacation leave earned but
be rendered; not enjoyed, as well as workmen's Compensation awards
5. Includes Fair and reasonable value, as determined by and Unpaid salaries for services rendered (SEV-CU)
SOLE of board, lodging or other facilities customarily
furnished by ER-EE Tan v. Lagrama
o Payment on fixed piece-work basis is method of
NOTE: Fair and reasonable value shall not include any profit compensation and does not define essence of EER
to the employer or to any person affiliated with the
employer (Art. 97, LC). Art. 97 (d). Agriculture (Work) – includes farming in all
its branches and, among other things, includes cultivation
Rights of Workers and tillage of soil, dairying, the production, cultivation,
Art. XIII, Sec. 3 (SCP-SHLP) growing and harvesting of any agricultural and
1. Self-organization horticultural commodities, the raising of livestock or
2. Collective Bargaining poultry, and any practices performed by a farmer on a farm
3. Peaceful Concerted Activity as an incident to or in conjunction with such farming
4. Security of Tenure operations, but does not include the manufacturing or
5. Humane Conditions of Work processing of sugar, coconuts, abaca, tobacco, pineapples or
6. Living Wage other farm products.
7. Participate in Policy Making Activities

IRR Book 3, Rule 7, Sec. 4
o Meals and snacks - ER may deduct from wages not “EQUAL PAY FOR EQUAL WORK” PRINCIPLE
more than 70% of value of meals and snacks; deduction o Persons who work with substantially equal
authorized in writing qualifications, skill, effort and responsibility, under
o Lodging- FRV- cost of operation and maintenance- similar conditions, should be paid similar salaries.
adequate depreciation and reasonable allowances o Employees holding the same position and rank are
presumed to be performing equal work.
The following are considered agricultural activities: o The rule equal pay for equal work applies whether the
1. Preparation of the soil, planting of ramie stalks and employee is hired locally or abroad.
transporting them to the stripping sheds, stripping
the fibers with the use of decorticating machines APPLICABILITY OF THE TERM WAGES
run by electricity, drying the wet fibers, passing GR: It applies to all employees.
them through the brusher to cleanse them of
impurities, and baling the fibers for the market. XPNs: (FHD-BR)
2. Planting and harvesting sugar cane and other 1. Farm tenancy or leasehold;
chores incidental to ordinary farming operations. 2. Household or domestic helpers, including family
drivers and persons working in the personal
NOTE: The differentiation is important because the service of another; Home workers engaged in
agricultural pay rate is generally lower than the industrial needlework or in any cottage industry duly
registered in accordance with law;
The following activities have also been categorized as 3. Workers in any Duly registered cooperatives when
agricultural: so recommended by the Bureau of Cooperative
1. Tillage of the soil, raising of crops including Development and upon approval of the SLE;
discovery of plant pests and their eradication by 4. Workers of a Barangay micro business enterprise;
means of insecticides done in the Bureau of Plant and
Industry Experimental Station in Davao City. 5. Retail and service establishments regularly
2. Business of fishpond. employing not more than 10 workers.
3. Employees of the International Rice Research
Institute employed in direct farm operations in its NOTE: Retail and service establishments must file an
experimental farm as well as employees in farm application for exemption with the duly appropriate
machinery shop, repair shop, carpentry shop, etc. Regional Board.
However, the employees in housing compound of the Barangay Micro Business Enterprise
International Rice Research Institute and professional staff, o refers to any business entity or enterprise engaged in
attending to the security and maintenance services and the production, processing or manufacturing of
landscape of the compound, are not agricultural employees. products or commodities, including agro- processing,
trading and services, whose total assets including those
“NO WORK, NO PAY” PRINCIPLE (Fair Day’s Wage for a arising from loans but exclusive of the land on which
Fair Day’s Labor) the particular business entity's office, plant and
GR: If there is no work performed by the employee, without equipment are situated, shall not be more than Three
the fault of the employer, there can be no wage or pay. Million Pesos (RA 9178).
Burden of economic loss suffered by employee shall not be
shifted to the employer. SALARY
XPNs: The laborer was able, willing and ready to work but o It denotes a higher degree of employment, or a
was: (PLS-DP) superior grade of services, and implies a position of
1. Prevented by management; office and is suggestive of a larger and more important
2. Illegally Locked out; service. The word salary is understood to relate to
3. Illegally Suspended; position of office, to be the compensation given for
4. Illegally Dismissed; official or other service. It is subject to execution or
5. Illegally Prevented from working attachment.
o Existing laws exclude allowances from the basic salary Inclusion of Commission in Basic Salary
or wage in the computation of the amount of retirement 1. Included in the basic salary – If the commission
and other benefits payable to an employee. is comprised of a pre-determined percentage of
the selling price of the goods.
Basic Salary 2. Excluded from basic salary – If the commission is
o The term includes remunerations or earnings paid by paid as productivity bonus or closely resemble
the employer to employee, but excludes cost-of-living profit-sharing, or when it has no clear, direct or
allowances, profit-sharing, payments, and all necessary relation to the amount of work
allowances and monetary benefits which have not actually done by each individual employee.
been considered as part of the basic salary of the
employee. Philippine Spring Water Resources v. Mahilum
o For commission to form part of the basic salary will
WAGE SALARY depend upon the circumstances:
Compensation for manual Paid to “white collared o PHIL DUPLICATORS case: commission earned by
labor (skilled or unskilled) workers” and denotes a salesmen part of basic salary.
also known as “blue higher degree of o Salesmen’s commission – predetermined
collared workers,” paid at employment or a superior percentage of selling price of goods sold by each
stated times and grade of services and
commission, included in basic salary
measured by the day, implies a position or office.
week, month or season. o BOIE-TAKEDA case: commissions paid to medical
Considerable pay for a Suggestive of a larger and representatives excluded from basic salary. Here,
lower and less responsible more permanent or fixed commission paid to medical representatives as
character of employment. compensation for more productivity bonus, resemble profit sharing. There is
important service. no clear, direct relation to the amount of work
GR: Not subject to actually done.
execution
o Mahilum’s commission is in the nature of overriding
Subject to execution. commission and not sales commission. Not included in
XPN: Debts incurred for
food, shelter, clothing and basic salary because in the nature of profit sharing.
medical attendance. Backwages exclude commission.
ALLOWANCES
NOTE: The Supreme Court reached the conclusion that
o Excluded from basic salary (retirement)
words “wages” and “salary” are in essence synonymous.
F&R Value of Board, Lodging or Other Facilities

SALARY DISTINGUISHED FROM GRATUITY
Customarily Furnished by ER to EE
o Gratuity – is something given freely, or without
1. May provide food & housing but deduct from salary
recompense; a gift; something voluntarily given in
2. SOLE- fix from time to time reasonable value of
return for a favor or services; a bounty; a tip.
board, lodging and other facilities customarily
o not intended to pay a worker for actual services
furnished by employer
rendered.
o is a money benefit given to the workers whose purpose
Facilities as Part of Wages
is “to reward employees or laborers who have rendered
o Facilities include those articles or services of benefit
satisfactory and efficient service to the company.
to the employee and his family
o not mandatory so as to be considered a part of labor
- such as rice ration, housing, recreational
standard law unlike the salary, cost-of-living
facilities, medical treatment to dependents, school
allowances, holiday pay, leave benefits, etc., which are
facilities, cost of light, water, fuel, meals or snacks.
covered by the Labor Code
o Wage deductible
o Part of laborer’s basic wage
COMMISSION
o Compensation calculated as % on amount of
transaction/ profit to principal

Determination of Facilities Beneficial to Employer or Tips Not Part of Wages; Element of Compulsion in
Employee Tipping
o It is significant to determine when articles or services o Wage is the remuneration directly paid by the employer
are beneficial to an employee because those articles or to an employee. On the other hand, tips are paid
services which are not of benefit to the employee directly to an employee by the customer; hence, they
cannot be charged against the cash wage of an fall short of the definition provided in Art. 97.
employee. o Although a tip denotes a voluntary act, it lacks the
o Articles or tools of the trade that are primarily for the essential element of a gift, that is, the free bestowing
benefit of the employer or necessary to the conduct of of a gratuity without consideration.
his business cannot be deducted from the employer's o Despite its apparent voluntariness, there is an element
wages because they are not considered as facilities of compulsion in tipping
Charging of Cost of Facilities Supplements Not Part of Wages

o In order that the cost be charged against the o E.g. vacation leave pay, overtime pay in excess of the
employee, his/her acceptance of such facilities must legal rate, profit-sharing benefits, sick pension,
be voluntary. retirement and death benefits, family allowances,
Christmas bonus, war-risk or cost-of-living bonuses or
Requirements for Deducting Values for Facilities (PDF) other bonuses other than those paid as reward for extra
1. Proof must be shown that such facilities are output or time spent on the jobs.
customarily furnished by the trade;
2. The provision of Deductible facilities must be SUPPLEMENTS – extra remuneration/ special privilege
voluntarily accepted in writing; and, or benefits given to/ received by laborers over and above
3. The Facilities must be charged at fair and their ordinary earnings or wages
reasonable value o may not be deducted from wages
Voluntary Acceptance of Facilities Criterion in Determining Whether an Item is a

o Acceptance of facilities is voluntary, for to compel the Supplement or Facility
employee to accept such facilities against his will would o The criterion is not so much with the kind of the benefit
be violative of the fundamental right of employee to or item (food, lodging, bonus or sick leave) given, but its
the free disposal of his wage guaranteed under Art. purpose.
112
Three (3) Requirements before value may be deducted
Facilities Exclude Profit from Employees wage: (CVF)
o The value of facilities should not be more than the 1. Proof facilities Customarily furnished by trade
actual cost to the employer of the board, lodging, or 2. Voluntarily accepted in writing by EE
other facilities customarily furnished by him to his 3. Charged at Fair and reasonable value
employees.
o The "fair and reasonable value" does not include any BASIS FACILITIES SUPPLEMENT
profit to the employer or to any persons affiliated with Inclusion Forms part of Independent of
the employer. the wage wage
Deduction Deductible from Not wage
Customarily Furnished Facilities wage deductible
For example, a messenger who slept in the office cannot be To whose For the benefit Granted for the
benefit of the worker convenience of
charged by the employer for housing allowance because the and his family. the employer.
office is not a regular sleeping quarter. On the other hand,
housing quarters are common in a mining industry; hence, Status of Food and Lodging, or the Electricity and Water
the latter can charge its employees for housing quarter. Consumed by a Hotel Worker
o The fair and reasonable value of facilities not o These are supplements.
customarily furnished cannot be charged against the o Considering, therefore, that hotel workers are required
cash wage. to work different shifts and are expected to be available
at various odd hours, their ready availability is a wages not being dependent on the employer’s
necessary matter in the operations of a small hotel. ability to pay.
o Furthermore, granting that meals and lodging were
provided and indeed constituted facilities, such Non-Applicability of Estoppel
facilities could not be deducted without the employer o The acceptance of by an employee of the wages paid
complying first with certain legal requirements him without objections does not give rise to estoppel
precluding him from suing for the difference between
Mabeza v. NLRC the amount received and the amount he should have
o Failure to present company policy/guidelines that received pursuant to a valid minimum wage law (1
show meals and lodging as part of salary Azucena, 2016, p. 320).
o Distinction of facilities and supplements depends on
PURPOSE and not kind Minimum Wage Non-Negotiable; Non-Waivable
o Here, meals and lodging considered as SUPPLEMENTS. o The minimum wage fixed by law is mandatory;
o Hotel workers with different shifts, their ready o Thus, it is non-waivable and non-negotiable.
availability is a necessary matter in operation. o The enactment is compulsory in nature in order to
ensure decent living conditions.
Art. 99. Regional minimum wages – The minimum wage
rates for agricultural and non-agricultural employees and Art. 120. Creation of National Wages and Productivity
workers in each and every region of the country shall be Commission – There is hereby created a National Wages
those prescribed by the Regional Tripartite Wages and and Productivity Commission, hereinafter referred to as the
Productivity Boards. (As amended by Section 3, Republic Commission, which shall be attached to the Department of
Act No. 6727, June 9, 1989). Labor and Employment (DOLE) for policy and program
coordination. (As amended by Republic Act No. 6727, June
Art. 100. Prohibition against elimination or diminution 9, 1989).
of benefits – Nothing in this Book shall be construed to
eliminate or in any way diminish supplements, or other Exceptions Under the Implementing Rules
employee benefits being enjoyed at the time of 1. Household / domestic helpers – family drivers,
promulgation of this Code. persons in personal service of another (RA 10361:
Domestic Workers Act/ Batas Kasambahay- April 2013,
Art. 101. Payment by results – The Secretary of Labor and NCR Min. Wage- Php5,000.00)
Employment shall regulate the payment of wages by results, 2. Homeworkers engaged in needlework
including pakyao, piecework, and other non-time work, in 3. Establishment duly registered with National
order to ensure the payment of fair and reasonable wage Cottage Industries & Development Authority,
rates, preferably through time and motion studies or in provided workers perform in respective homes (RA
consultation with representatives of workers’ and 3470)
employers’ organizations. 4. Duly registered cooperative as recommended by
Bureau of Cooperative Development (Cooperative
Statutory Minimum Wage – is the lowest wage rate fixed Development Authority) and as approved by SOLE
by law that an employer can pay his workers.
o Compensation which is less than such minimum rate is NOTE: The law on cooperatives (R.A. No. 9520) and its
considered an underpayment that violates the law. implementing rules contain no provision superseding or
contradicting the exceptions mentioned above. Therefore,
Purpose – to set a barrier below which wages may not fall, the Labor Code’s implementing rules on this matter still
in order to develop competition on a high level of efficient stands.
rather than competition on a low level of wages.”
David v. Macasio
Ability to Pay Immaterial o “Pakyaw” does not characterize EER between parties
o The employer cannot exempt himself from liability to but REMUNERATION or EARNING.
pay minimum wages because of poor financial
condition of the company, the payment of minimum
Exemptions under Sec. 8, RA 9178 (Barangay Micro o NWPC authorized RTWPB to issue exemptions but with
Business Enterprises Act) of 2002 review and approval of NWPC
o BMBE - any business entity or enterprise engaged in o To determine and fix minimum wage rates applicable in
the production, processing, manufacturing of products their region, provinces or industries therein and to
or commodities, including agro-processing, trading and issue the corresponding wage orders, subject to
services whose assets including arising from loans guidelines issued by the Commission
but exclusive of land on which the particular business
entity’s office, plant and equipment are situated shall REGIONAL TRIPARTITE WAGE AND PRODUCTIVITY
not be more than P3M BOARD
o Exempted but entitled to same benefits The RTWPB was created by the Wage Rationalization Act
(R.A. No. 6727). The intention was to rationalize wages by:
RA 6727 (Wage Rationalization Act of 1989) a) Providing full-time boards to police wages round-
o Sec. 4 - retail/ services establishment regularly the-clock; and
employing not less than 10 workers may be exempted b) Giving the boards enough powers to achieve this
upon application, determined by appropriate objective (1 Azucena, 2016, p. 425).
regional board (1-10 employees for minimum wage
exemption) WAGE ORDER NO. NCR- 22
o 1-9 employees- exempt from holiday pay/SIL Effectivity: November 22, 2018
§ RETAIL EST – sale of goods commonly bought by 1. Non–Agriculture - Php 537.00
private individuals for personal/ household use 2. Agriculture/Retail or Service establishments
(e.g. sari-sari store; restaurant) employing 15 workers or less - Php 500
§ SERVICE – personal service for own or household 3. Manufacturing with less than 10 workers - Php
use (e.g. repair shop) 500
NATIONAL WAGES AND PRODUCTIVITY COMMISSION NOTE: Applies to pakyaw basis

o The NWPC was created by the Wage Rationalization
Act (R.A. No. 6727). This replaced the National Wages Exemptions (Sec.8):
Council. 1. Distressed Establishment
2. Retail/ Service Establishment with not more than
Exemptions: 10 employees
1. Distressed establishment 3. Adversely affected by calamities such as natural or
2. New establishment human
3. Adversely affected by national calamities
NOTE: Should have strong justification and subject to § If you are monthly paid, how will you know if
review and approval by NWPC you are paid within minimum wage?
(Monthly rate x 12)/ 365
Nasipit Lumber Co. v. NWPC Ex. Php 20,000 x12= P240,000
o Powers and Functions of the Commission: Php 240,000/ 365= P657.53/ day
c. To prescribe rules and guidelines for the § If daily paid:
determination of appropriate minimum wage and Daily Pay x 22
productivity measures at the regional, provincial or
industry levels; § Taxability:
d. To review regional wage levels set by the January 1, 2018- gross compensation of
Regional Tripartite Wages and Productivity Boards Php 250,000 below per year Php 20, 833/ month
to determine if these are in accordance with
prescribed guidelines and national development Approval of Wage Order
plans; o NWPC - prescribes rules and guidelines for
o Art. 122, RA 6727: RTWPB Powers and Functions determination of appropriate minimum wage and
o NWPC not RTWPB prescribed rules and guidelines productivity measures at the regional, provincial or
industry levels.
- may review the wage levels set by the ECOP v. NWPC, RTWP-NCR and TUCP
RTWPBs o Wage Order NCR-01 A – “all workers in NCR receiving
- but, a wage-fixing order by the RTWPB wages above statutory minimum wage up to Php 125
does not need prior approval by the shall also increase minimum wage by Php 17/day”
NWPC. uses salary ceiling method/salary cap method
o RTWPBs are empowered to: o Shift to SCM brought about by labor dispute arising
a) determine and fix minimum wage rates applicable from wage distortion.
in their regions; and,
b) to issue the corresponding wage orders. Metropolitan Bank and Trust Company v. NWPC
- However, RTWPB issuances should o “Across the board increase of Php15/day”
accord with guidelines issued by the NWPC o RTWB did not use either floor wage method or
- it requires the Wage Board to conduct a salary ceiling method
public hearing over a petition for a wage order, to o RTWB exceeded authority
decide such petition within 30 days after the last
hearing, and to furnish the Commission a copy of NWPC and RTWP v. APL
the decision on the petition or the wage order. o RTWPB could issue exemption provided complied
- Furnishing the NWPC a copy of the wage with NWPC rules
order does not mean seeking the Commission’s
approval. WAGE DISTORTION
Concept (I-ES-O):
Art. 123. Wage Order. Whenever conditions in the region 1. Increase in prescribed wage rates
so warrant, the Regional Board shall investigate and study 2. Results in:
all pertinent facts; and based on the standards and criteria o Elimination
herein prescribed, shall proceed to determine whether a o Severe contraction
Wage Order should be issued. Any such Wage Order shall of intentional quantitative difference in wages/ salary
take effect after fifteen (15) days from its complete rates between and among employee groups in an
publication in at least one (1) newspaper of general establishment
circulation in the region. 3. Effectively Obliterating distinctions embodied in
such wage structure based on skills, length of
In the performance of its wage-determining functions, the service, or other logical bases of differentiation
Regional Board shall conduct public
hearings/consultations, giving notices to employees’ and Elements of Wage Distortion (HS-ER)
employers’ groups, provincial, city and municipal officials 1. An existing Hierarchy of positions with
and other interested parties. corresponding salary rates.
2. A Significant change or increase in the salary rate
Any party aggrieved by the Wage Order issued by the of a lower pay class without a corresponding
Regional Board may appeal such order to the Commission increase in the salary rate of a higher one;
within ten (10) calendar days from the publication of such 3. The Elimination of the distinction between the 2
order. It shall be mandatory for the Commission to decide groups or classes; and
such appeal within sixty (60) calendar days from the filing 4. The WD exists in the same Region of the country.
thereof. 5.
Example:
The filing of the appeal does not stay the order unless the § Rank and File 1 – utility/ messengerial
person appealing such order shall file with the Commission, 2 – skilled/ vocational
an undertaking with a surety or sureties satisfactory to the 3 – clerical
Commission for the payment to the employees affected by 4 – confidential
the order of the corresponding increase, in the event such 5 – professional
order is affirmed. (As amended by Republic Act No. 6727,
June 9, 1989) The rate of Rank and File 1 is Php 500.00 per day (minimum
wage) while the Rank and File 2 Php 550.00 per day.
Because of a wage order increasing the minimum wage 5. Upon request of EE, ER may issue Report of
from Php500.00 per day to Php537.00 per day, the wage payment of wages, benefits, deduction for period;
difference between Rank and File 1 and 2 is contracted. 6. No additional Expense /diminution of benefit
7. ER Assume responsibility in case of wage
Two Methods of Minimum Wage Adjustment production
o FLOOR WAGE – fixing of determinate amount that will
be added to statutory minimum wage Prohibited: (PVCTC)
o SALARY CEILING – wage adjusted to EEs receiving a 1. PN
certain denominated salary ceiling 2. Vouchers
3. Coupons
NOTE: Distortion only as a result of wage order but not 4. Tickets
because of salary restructure which is management 5. Chits
prerogative.
Other Matters:
Distortion Adjustment Formula 1. Art. 97 (Wages) – capable of being expressed in
Existing Minimum Wage = % x Prescribed = Distortion Adj. terms of money
Amt Actual Salary Wage Increase 2. RA 8183 – all monetary obligation shall be settled
in the PH currency which is the legal tender of the
Example: Philippines
EMW = Php 500/ day 3. BSP Circular No. 944 – Virtual Currency not
Daily Wage = Php 550 legal tender status
Prescribed Wage Increase = Php 25/ day 4. BSP Circular No. 537 (Series of 2008)
Php 1, Php5, Php 10 coins- up to Php 1,000
500 = .90 x 25 = 22.73 wage distortion adjustment Php .25 and lower- Php 100 and lower
550 5. RA 7653 (2009) – Commemorative banknotes –
Php 100,000/Php 200,000
550 + 22.73 = Php 572.273
SHS Perforated Materials v. Diaz
§ No legal requirement that gap which had o Cannot determine with certainty whether Diaz
previously existed be restored precisely in the worked or not from November 16, 30, 2005, doubt
same amount in evidence, must be tilted in favor of labor
§ Subject of Grievance Procedure o Withholding of salary constitutes unlawful
§ Non-strikeable withholding of salary and unauthorized wage
deduction
PAYMENT OF WAGES o In Milan, an employer is allowed to withhold
Art. 102 – Forms of Payment (LCMA) terminal pay and benefits pending the employee’s
1. Legal tender (Art. 1705, CC) return of its properties. The return of the property
2. Check - customary/ necessary/CBA * owned by their employer Solid Mills became an
3. Money order * obligation or liability on the part of the employees
4. ATM (Labor Advisory- Nov. 25, 1996)- Explanatory when the EER ceased. Thus, respondent Solid Mills
Bulletin- Sec. Leonardo Quisumbing has the right to withhold petitioners’ wages and
ATM – Labor Advisory- Nov. 25, 1996 (CR-FRREA) benefits because of this existing debt or liability.
1. With Consent of EEs concerned;
2. Given Reasonable time to withdraw; if done during Commando Security v. NLRC
work hours, must be compensable; o 25% deduction from salary representing agency’s
3. System allows workers to receive wages within share in procuring job placement for the guard is
Frequency and amount prescribed in LC; procuring job placement for the guard is illegal
4. Bank/ ATM facility within a Radius of 1 km to place
of work;

Art. 103 - Time of Payment XPNs:
1. Wages paid at least once every 2 weeks or twice 1. Worker is Insured with his consent to recompense
a month at intervals of 16 days ER for payment of premium
2. FM / beyond control – immediately after FM ceased 2. Union dues – right to check off, authorized in
3. No ER shall make payment with less frequency writing
than once a month 3. Authorized by Law
4. If task-based and cannot be completed in 2 weeks: 4. Meals/ other facilities
a. Intervals not exceeding 16 days, in 5. Indebted to ER – Due and demandable (Art. 1706)
proportion to amount of work completed; 6. Execution/ attachment – debts, food shelter,
b. Final settlement upon completion of work clothing and medical allowance (Art. 1708)
7. Withholding tax
Art. 104 – Place of Payment 8. Deduction of cooperative
GR: At or near the place of undertaking 9. SSS, PhilHealth, Pag-ibig
XPNs: 10. Deduction from Unpaid absences
1. Can’t be effected because of:
- deterioration of peace and order NOTE: Payment to 3rd person – authorized in writing by EE
- impending emergency caused by fire, flood, and no pecuniary benefit
epidemic, calamity
2. ER provides free transportation back and forth Arti. 114 - Deposits for Loss or Damage – Illegal Deposit
3. Under other analogous circumstances provided GR: No Deposit
time spent in collecting wages = compensable XPN: ER engaged in trade, occupation, business where
4. No ER shall pay in a bar, night club, drinking est., deduction is recognized (jewelry business), Department
dance hall and other similar establishments except Order 150-16, Series of 2016
they are employed in said places
Art. 115- No Deduction from Deposit for Actual Loss
Art. 105- Direct Payment of Wages Shall Be Made Unless EE Is Heard (Sec. 11, Rule VIII, Book
GR: Directly to worker III)
XPNs: o Payments for Loss or damage is deductible if:
1. Force Majeure rendering payment impossible 1. EE is shown to be responsible for loss/damage
2. Other special circumstance to be determined by 2. Ample opportunity to show cause why deduction
SOLE in appropriate regulation – payment may be should not be made
made through another under written authority 3. Amount is fair and reasonable and not to exceed
o Worker dies - ER pay wages to heir w/o intestate actual loss/ damage
proceedings 4. Deduction not to exceed 20% of EE’s wages in a
® Claimants – affidavit attesting relationship week
® Minor – guardian
® ER make payment to SOLE / representative Art. 116
(referee in dividing the amount) o Withholding of wages and kickbacks prohibited
o Unlawful to withhold amount from wages of worker/
Art. 112 – Non-Interference in Disposal of Wages induce, give up part of wage by force or stealth
1. ER cannot interfere in disposal of wages
2. ER cannot force, compel purchase of merchandise Art. 117
Penalty: (Art. 288, RPC) o No deduction to ensure employment
o Fine not less than P1k nor more than P10k
o Imprisonment – not less than 2 mos. nor more than 3 Art. 118 – Retaliatory Measures
years or both o Unlawful to refuse to pay/ reduce wage, discriminate
because filed complaint
Art. 113 – Wage Deduction (IULM-IEW-DSU) o See Article 259: ULP: an employer’s prejudicial act
GR: No ER in his behalf or in behalf of any person deduct: against an employee who gave or is about to give a
testimony under the Code
Art. 119 – False Reporting National Federation of Sugar Workers v. Ovejera
® Unlawful to make report if false o Can the company be compelled to pay 13th month pay
o Records an ER must keep: (LR-ODA) in addition to Christmas bonus, milling bonus and
1. Length of time to be paid amelioration bonus?
2. Rate - No. Companies which are paying the
3. Amount of OT “equivalent” of 13th month pay should not be
4. Deduction required to pay 13th month pay. To require
5. Amount actually paid additional payment is penalty to liberality.
o Marcopper case did not meet the required votes to be
P.D. 851 – 13th MONTH PAY doctrinal
1. Coverage: FORMULA:
Regardless of nature Total BS earned during the year = proportionate 13th mo. pay
of employment
12
Irrespective of Ex. Php 30,000/ mo.

Rank and File methods by which
wages are paid 30,000 x 12 = 360,000 = P30,000
12
Provided worked for
at least one month 30,000 x 10 (2 mos without pay)
during calendar year
2. When given? 30,000 = Php 25,000

o Not later than December 24 of every year 12
3. What is Rank and File? XPNs: (G-13-P-CBTF)

§ Management – Vested with powers or prerogatives to 1. Government and any of its political subdivisions,
lay down, execute management policies and/or to hire, including GOCCs
transfer, suspend, layoff, recall, discharge, assign or XPN: operating as private subsidiary
discipline EEs or to effectively recommend such 2. Those already paid 13th month pay or equivalent (ex.
managerial action Xmas bonus, midyear bonus, cash bonus and other
payments not less than 1/12 of basic salary
All employees not falling within the definition 3. Personal service of another (RA 10361)
are considered rank- and-file. 4. Paid on purely Commission, Boundary, Task, paid on
Fixed amount for performing specific work
4. Minimum Amount irrespective of time consumed on performance
o Not less than 1/12 of total basic salary thereof
§ Basic Salary – must not include allowance, and other XPNs: piece rate, in which case their ER
monetary benefits not considered or integrated as part shall grant 13th month pay (paid on standard
of basic salary amount for every piece/ unit of work produced,
without regard
XPN Basic Salary: § Employees paid on a fixed – guaranteed wage and
1. Cash equivalent of unused VL/ SL commission
2. OT o entitled to 13th month pay based on earnings during
3. NSD calendar year (fixed and guaranteed wage)
4. Holiday Pay § BOIE TAKEDA – commission, extra effort exerted
5. COLA in consummating sales
o additional pay = not form part of basic salary
§ Multiple employers
§ Resigned/Separated – in proportion to the length
of time he/she started working during calendar RA 11360
year up to the time of resignation/termination SC distributed completely and equally, based on actual
§ TAX – 13th month pay, other benefit, productivity, hours or days among covered workers except managerial
o Christmas bonus = exempt from taxation (Php 90k) employees
§ RR-11-2018 to implement RA 10963 - TRAIN or Increase in minimum wage-service charges: service
Tax Reform for Acceleration and Inclusion charges not considered compliance with increase
minimum wage
DOLE Philippines v. Leogardo Facilitate resolution: grievance mechanism or in
o Year-end productivity bonus integrated to 13th month inadequate – regional office of DOLE
pay notwithstanding conditional nature. To hold
otherwise is unreasonable and will constitute an undue Art. 100 – NON-DIMINUTION
burden upon ER.
Art. 100 Non-elimination
Universal Corn Products v. NLRC of supplements or other
o Applied United CMC Textile v. Valenzuela and not EE benefits enjoyed at the
time of promulgation of
Ovejera case LCP Non-diminution
o Christmas bonus clearly meant to be in addition of the
legal requirement. If Christmas bonus is included in the Legal anchor for declaration of invalidity of employees
13th month pay, no need for specific provision on deemed to have eliminated/diminished benefits
Christmas bonus in CBA
Art. 1308, Civil Code
Philippine Agricultural Commercial and Industrial
- Mutuality of Contracts
Workers Union v. NLRC
o In cases where the bus drivers and conductors are -Terms of contract cannot be withdrawn except by
automatically entitled to the basic minimum wage mutual consent of parties
mandated by law in case the commissions they
earned be less than the minimum wage for 8
Sec. 18, Art. II, 1987 Constitution
hours of work, the commissions form part of
"The State affirms labor as a primary cosial economic force.
salary.
It shall protect the rights of workers and promote their
o Every employee receiving a commission in addition welfare"
to a fixed wage is entitled to 13th month pay.
SERVICE CHARGE Art. 4, Labor Code

Art. 96, LCP; RA 11360
- All doubts in interterpretiation and implementation,
® For hotels, restaurants, and other similar resolved in favor of Labor.
establishments
fArt. 96df Art. 110 – Worker Preference in case of BANKRUPTCY,

Rank and file employee as amended by RA 6715 (1989)
Entitled to an equal share in 85% of charges; remaining o Bankruptcy/ Liquidation – worker shall enjoy first
15% retained by manager to answer for preference as regard wages and other monetary claims
losses/breakages and for distribution to managerial at o Unpaid wages/ monetary claims must be paid in full
discretion of management before claims of government and other creditors may
Payments – once every 2 weeks or twice a month at be paid
interval not exceeding 16 days o There must be judicial declaration
If stops / abolished: average share previously enjoyed o Rehabilitation – reopening/reorganization.
for past 12 months immediately preceding such Continuance of corporate life to restore and reinstate
stoppage shall be integrated to their basic wage corporation to former position
If no service charge but tips, same rule
o Liquidation – winding up or setting with creditors and Art. 111, LC – Attorney’s Fees
debtors o Unlawful withholding of wages, culpable party
o Harmonize preference of credit in the CC, Insolvency may be assessed attorney’s fees equivalent to 10%
Law, and LCP of amount of wages recovered.
o Unlawful to demand/accept in any judicial or
NOTE: Article 110 cannot be viewed in isolation but must be administrative proceedings for the recovery of
read in relation to the CC – there must be harmonization the wages, attorney’s fees, which exceed 10% of the
of laws amount of wages recovered.
o Insolvency – there must be notice to all creditors WORKING CONDITIONS

o claims must be adjudicated
a. Management Prerogative
ATTORNEY’S FEES o Refers to the right of the employer to regulate all
Concept: aspects of employment, such as the freedom to
Ordinary Extra-Ordinary prescribe work assignments, working methods,
Reasonable compensation Indemnity for Damages – processes to be followed, regulation regarding
paid to a lawyer for legal Losing Party in Litigation transfer of employees, supervision of their work,
services lay-off and discipline, and dismissal and recall of
work, presupposing the existence of employer-
Art. 2208, NCC – In the absence of stipulation, attorney's employee relationship
fees and expenses of litigation, other than judicial costs, o Not unlimited; it is subject to the limitations found
cannot be recovered, except: in law, collective bargaining agreement or the
(1) When exemplary damages are awarded; general principles of fair play and justice
(2) When the defendant's act or omission has o Article XIII, Section 3 on the rights of the
compelled the plaintiff to litigate with third employer: right of enterprise to reasonable
persons or to incur expenses to protect his interest; returns to investment, and to expansion and
(3) In criminal cases of malicious prosecution against growth
the plaintiff; 1. No provision on LCP on this right but recognized by
(4) In case of a clearly unfounded civil action or the Constitution
proceeding against the plaintiff; 2. Rights and prerogatives of employer, regulate the
(5) Where the defendant acted in gross and evident aspect of business without restraint, in accordance
bad faith in refusing to satisfy the plaintiff's plainly of own judgement
valid, just and demandable claim; 3. Limitations: good faith and with due regard to
(6) In actions for legal support; rights of labor, fair play, and justice
(7) In actions for the recovery of wages of
household helpers, laborers and skilled San Miguel Brewery v. Ople
workers; o An employer has the right to regulate according to his
(8) In actions for indemnity under workmen's discretion all aspects of employment as long as
compensation and employer's liability laws; exercised in good faith, not circumventing the law.
(9) In a separate civil action to recover civil liability
arising from a crime; PT&T v. NLRC
(10) When at least double judicial costs are awarded; o CEDAW or Convention Against All Forms of
(11) In any other case where the court deems it just and Discrimination Against Women: PH is signatory
equitable that attorney’s fees and expenses of litigation o It is not allowed if the policy of the employer is contrary
should be recovered. to law, and the prohibition against marriage is a
violation of the laws and conventions entered into by
In all cases, the attorney’s fees and expenses of the PH.
litigation must be reasonable. o Regulation of manpower by the company falls within
the so-called management prerogatives, which
prescriptions encompass the matter of hiring,
supervision of workers, work assignments, working employer and whose actual hours of work in the field
methods and assignments, as well as regulations on the cannot be determined with reasonable certainty.
transfer of employees, lay-off of workers, and the
discipline, dismissal, and recall of employees. Coverage: (HRH-IC)
GR: Title I, Book III of the Labor Code dealing with Hours of
Goya v. Goya Employees Union work, weekly Rest periods, Holidays, service Incentive
o 3 classes of employees in the CBA, in issue: contractual leaves and service Charges, covers all employees in all
EEs from PESO establishments, whether for profit or not.
o The hiring of the Contractual EEs from PESO made by
Goya was not keeping in the intent and spirit of the CBA; XPNs: (GF-MOM-WPD)
management prerogative is subject to limitations. 1. Government employees
o The exercise of management prerogative is not 2. Field personnel
unlimited but subject to the restrictions found by law, 3. Managerial employees
and in this case, provisions of the CBA. 4. Officers and members of the managerial staff
5. Members of the family of the employer who are
Sime Darby Pilipinas v. NLRC dependent on him for support
o Management is free to regulate, according to its own 6. Workers paid by results
discretion and judgment, all aspects of employment, 7. Persons in the personal service of another; and
including hiring, work assignments, working methods, 8. Domestic helpers
time, place and manner of work, processes to be
followed, supervision of workers, working regulations, The aforementioned employees are not entitled to
transfer of employees, work supervision, lay off of Overtime pay, Premium pay for Rest days and Holidays,
workers and discipline, dismissal and recall or workers. Night shift differential pay, Holiday pay, service Incentive
o Management retains the prerogative to change the leave and service Charges.
working hours of its employees, as long as exercised in
good faith for the advancement of employer’s interest Government Employees
and not for the purpose of defeating or circumventing o The terms and conditions of their employment are
the rights of the employees under special laws or under governed by the Civil Service Law.
valid agreements o In case of government-owned or controlled
corporations with original charters, terms and
conditions of employment may be governed by such
Art. 82. Coverage – The provisions of this Title shall apply legislated charters.
to employees in all establishments and undertakings o Government-owned or controlled corporations
whether for profit or not, but not to government without original charters and created under the
employees, managerial employees, field personnel, Corporation Code are governed by the Labor Code.
members of the family of the employer who are dependent
on him for support, domestic helpers, persons in the Managerial Employees
personal service of another, and workers who are paid by 1. Their primary duty consists of the management
results as determined by the Secretary of Labor in of the establishment in which they are employed
appropriate regulations. or of a department or subdivision thereof.
2. They customarily and regularly direct the work of
As used herein, “managerial employees” refer to those two or more employees therein.
whose primary duty consists of the management of the 3. They have the authority to hire or fire employees
establishment in which they are employed or of a of lower rank; or their suggestions and
department or subdivision thereof, and to other officers or recommendations as to hiring and firing and as to
members of the managerial staff. the promotion or any other change of status of
other employees, are given particular weight.
“Field personnel” shall refer to non-agricultural
employees who regularly perform their duties away from NOTE: They are employed for their special training or
the principal place of business or branch office of the expertise, experience or knowledge and for positions
which require the exercise of independent judgment and Field Personnel
discretion. They are not subject to the rigid observance Field personnel refers to non-agricultural employees
of regular office hours, as the true worth of their services who:
do not depend so much on the time they spend in office but 1. Regularly perform their duties away from the
more on the results of their accomplishments. For these principal place of business or branch office of the
types of workers, it is not feasible to provide fixed hourly employer; and
rate of pay or maximum hours of labor. 2. Whose actual hours of work in the field cannot be
determined with reasonable certainty.
National Sugar Refineries v. NLRC
o The question whether a given employee is exempt from NOTE: They are exempted from the coverage due to the
the benefits of the law is a factual one dependent on the nature of their functions which requires performance of
circumstances of the particular case. service away from the principal place of business. Hence,
o In determining whether an employee is within the they are free from the personal supervision of the
terms of the statutes, the criterion is the character of employer and the latter cannot determine with
the work performed, rather than the title of the reasonable certainty the actual number of hours of
employee's position. work expended for the employer's interest.
Test of Supervisory or Managerial Status Examples: Outside sales personnel, Agents on commission
o It depends on whether a person possesses authority basis, or Insurance field agents.
that is not merely routinary or clerical in nature but
one that requires use of independent judgement. Autobus Transport System, Inc. v. Bautista
Rule in case of Drivers/Bus Conductors:
Domestic Servants/Persons in the Personal Service of o It is of judicial notice that along the routes that are plied
Another by these bus companies, there are its inspectors
These are those who: assigned at strategic places who board the bus and
1. Perform such services in the employer's home inspect the passengers, the punched tickets, and the
which are usually necessary or desirable for the conductor’s reports.
maintenance and enjoyment thereof; or o There is also the mandatory once-a-week car barn or
2. Minister to the personal comfort, convenience, shop day, where the bus is regularly checked as to its
or safety of the employer as well as the members mechanical, electrical, and hydraulic aspects, whether
of his employer's household. or not there are problems thereon as reported by the
driver and/or conductor.
NOTE: They are not covered by this Title because terms and o They too, must be at specific place as specified time, as
conditions of employment are governed by the provisions they generally observe prompt departure and arrival
of R.A. 10361 (Kasambahay Law). from their point of origin to their point of destination.
o In each and every depot, there is always the dispatcher
Apex Mining v. NLRC whose function is precisely to see to it that the bus and
o The mere fact that the househelper or domestic servant its crew leave the premises at specific times and arrive
is working within the premises of the business of the at the estimated proper time.
employer and in relation to or in connection with its o These are present in the case at bar. The driver, the
business, as in its staff houses for its guest or even for complainant herein, was therefore under constant
its officers and employees, warrants the conclusion that supervision while in the performance of this work.
such househelper or domestic servant is and should be o He cannot be considered field personnel
considered as a regular employee of the employer and
not as a mere family househelper or domestic servant Members of the Family
as contemplated in Rule XIII, Section l(b), Book 3 of the o They are exempted from the coverage, for the support
Labor Code, as amended. given by the employer may exceed the benefit for which
an employee is entitled under appropriate labor
provisions. To cover them under Art.82, may create

labor problems that would eventually break-up the XPNs:
family, which is the evil sought to be prevented. 1. Health personnel
2. Compressed workweek
Workers Paid by Results
o Workers who are paid by results include those who Rationale (8-hour labor)
are paid on piece-work, "takay," "pakiao," or task 1. To safeguard the health and welfare of the
basis. laborer; and
o Payment of this type of worker is determined by the 2. To minimize unemployment by utilizing different
results of the work performed or the number of shifts
units produced, not the number of hours used in the
completion of the job or the time spent in production. NOTE: Normal hours of work may be shortened or
o Tailors and similar workers hired in the tailoring compressed. Neither does it follow that a person who does
establishment, although paid weekly wages on piece- not observe normal hours of work cannot be deemed an
work basis, are employees and not independent employee.
contractors, and accordingly, as regular employees paid
on piece-rate basis, they are not entitled to overtime NOTE: The eight-hour work requirement does not,
pay, holiday pay, premium pay for holiday/rest day and however, preclude the employer in the exercise of its
service incentive leave pay. management prerogatives to reduce the number of working
hours, provided that there is no diminution of existing
Art. 83. Normal hours of work – The normal hours of benefits
work of any employee shall not exceed 8 hours a day.
Work Day
Health personnel in cities and municipalities with a o Work day is the 24-hour period which commences from
population of at least 1,000,000 or in hospitals and clinics the time the employee regularly starts to work
with a bed capacity of at least 100 shall hold regular office
hours for 8 hours a day, for 5 days a week, exclusive of ILLUSTRATION: If the worker starts to work 8 am today, the
time for meals, except where the exigencies of the service workday is from 8 am today up to 8 am tomorrow.
require that such personnel work for 6 days or 48 hours,
in which case, they shall be entitled to an additional Manila Terminal Co. v. CIR
compensation of at least thirty percent (30%) of their o It is high time that all employers were warned that the
regular wage for work on the sixth day. For purposes of public is interested in the strict enforcement of the
this Article, “health personnel” shall include resident Eight-Hour Labor Law. This was designed not only to
Physicians, Nurses, Nutritionists, Dietitians, Pharmacists, safeguard the health and welfare of the laborer or
Social workers, Laboratory technicians, Paramedical employee, but in a way to minimize unemployment by
technicians, Psychologists, Midwives, Attendants and all forcing employers, in cases where more than 8-hour
Other hospital or clinic personnel. operation is necessary, to utilize different shifts of
laborers or employees working only for eight hours
Art. 84. Hours worked – Hours worked shall include (a) all each.
time during which an employee is required to be on duty
or to be at a prescribed workplace; and (b) all time during Jose Rizal College v. NLRC
which an employee is suffered or permitted to work. o Faculty members paid an hourly rate as per their
contract for classes actually held are NOT entitled to
Rest periods of short duration during working hours shall regular holiday pay BUT they are entitled to be paid
be counted as hours worked. their regular hourly rate for special holidays or days
where classes are called off or shortened, whether or
NORMAL HOURS OF WORK not extensions are ordered.
GR: The normal hours of work of any employee shall not
exceed 8 hours a day.

HOURS OF WORK OF HEALTH PERSONNEL o Article 83 does not say that the normal hours of work is
GR: 8 hours for 5 days (40-hour workweek), exclusive of or should be eight hours but that it shall not exceed
time for meals. eight.
XPN: Where the exigencies of the service require that such
personnel work for 6 days or 48 hours, they shall be NOTE: Under Art. 124, as amended by R.A. 6727, wage
entitled to an additional compensation of at least 30% proportionate to part-time work is recognized. The wage
of their regular wage for work on the 6th day. and benefits of a part-time worker are in proportion to the
number of hours worked. For example, if an EE earns
Health Personnel Covered by the 40-Hour Workweek P300.00 for an 8-hour work, he shall then get P150.00 for
1. Those in cities and municipalities with a work done in 4 hours.
population of at least 1 million; or
2. Those in hospitals and clinics with a bed capacity Broken Hours
of at least 100. o Minimum normal 8 working hours fixed by law need
not be continuous to constitute the legal working day.
NOTE: Art. 83(2) of the LC does not require hospitals to pay o It may mean broken hours of say, 4 hours in the
the EEs a full weekly salary with paid 2 days off. morning and 4 hours in the evening or variation
thereof provided the total of 8 hours is accomplished
Resident Physicians to be on Duty Beyond the 40-Hour within the workday.
Workweek Limitation
GR: The customary practice of requiring resident COMPRESSED WORKWEEK
physicians beyond the 40 hours of work per week is not o It is a scheme where the normal workweek is
permissible and violates the limitation under Art. 83. reduced to less than 6 days but the total number of
XPN: If there is a training agreement between the workhours of 48 hours per week shall remain.
resident physician and the hospital and the training o The normal workday is increased to more than 8
program is duly accredited or approved by appropriate hours but not to exceed 12 hours, without
government agency. corresponding overtime premium.
o The concept can be adjusted accordingly depending on
San Juan De Dios Hospital Employees Association v. the normal workweek of the company.
NLRC o Waiver of OT pay
o The Labor Code repealed RA 5901. Article 83 of the LC
now provides that the regular office hours for health Conditions: (SF-DOLE)
personnel is 8 hours per day and 5 days per week. 1. The scheme is expressly and voluntarily Supported
There is nothing in the Labor Code that entitles these by majority of the EEs
health personnel to a full weekly wage for 7 days if they 2. In Firms using substances, or operating in
complete a 40- hour/5-day work week. conditions that are hazardous to health, a
certification is needed from an accredited
Work Hours for Seamen safety organization or the firm’s safety
o The correct criterion in determining whether or not committee that work beyond 8 hours is within the
sailors are entitled to overtime pay is not, therefore, limit or levels of exposure set by DOLE’s
whether they were on board and cannot leave ship occupational safety and health standards.
beyond the regular eight working hours a day, but 3. The DOLE Regional Office is duly notified.
whether they actually rendered service in excess of said
number of hours. Valid Compressed Work Week
The validity of the reduction of working hours can be
Part-time Work upheld when the arrangement is: (TH-NC-L)
o It is not prohibited to have normal hours of work of less 1. Temporary;
than eight hours a day. 2. It is a more Humane solution instead of a
o What the law regulates is work hours exceeding eight – retrenchment of personnel;
it prescribes the maximum but not the minimum. 3. There is Notice and consultations with the workers
and supervisors;
4. A Consensus is reached on how to deal with o Thus, the fact that he is required to be present although
deteriorating economic conditions; and not actually doing any work, is still deemed working
5. It is sufficiently proven that the company was time.
suffering from Losses.
When Hours Worked are Compensable
Conditions Where a "Compressed Workweek" Schedule 1. EE is required to be on duty or to be at a
may be Legally Authorized as an Exception to the "8- prescribed workplace;
Hour A Day" Requirement Under the LC: (VDB-OST) 2. EE is suffered or permitted to work;
1. The EE Voluntarily agrees to it; 3. Rest periods of short duration during working
2. There is no Diminution in their weekly or monthly hours which shall not be more than 20 minutes;
take home pay or fringe benefits; and
3. The Benefits are more than or equal to what is due 4. Meal periods of less than 20 minutes.
to the EEs without the compressed work week;
4. OT pay will be due and demandable when they are NOTE: Travel time when beneficial to the ER is
required to work on those days which should have compensable.
ceased to be working days;
5. No Strenuous physical exertion or that they are Principles in Determining Hours Worked
given adequate rest periods; 1. All hours which the EE is required to give to his ER
6. It must be for a Temporary duration as determined regardless of whether or not such hours are spent
by the DOLE. in productive labor or involve physical or mental
exertion.
FLEXIBLE WORK ARRANGEMENT 2. Rest period is excluded from hours worked, even
§ Better than outright termination of services on closure if EE does not leave his workplace, it being enough
of department that:
1. Reduction of workdays a. He stops working
o Should not last for more than 6 months b. May rest completely
o Workdays may be reduced to prevent serious losses c. May leave his workplace, to go
2. Rotation of workers elsewhere, whether within or outside the
o Where the employees are rotated or alternately premises of the workplace
provided work within the workweek 3. All time spent for work is considered hours
3. Forced leave worked if:
o Where the employees are required to go on leave for a. The work performed was necessary
several days or weeks utilizing their leave credits if b. If it benefited the ER
there are any c. Or the EE could not abandon his work at
4. Broken schedule the end of his normal working hours
o Where the work schedule is not continuous but the because he had no replacement
work hours within the week remain d. Provided, the work was with the
5. Flexi-holiday schedule knowledge of his ER or immediate
o Where the employees agree to avail of the holidays at supervisor
some other days provided there is no diminution of 4. The time during which an EE is inactive by reason of
existing benefits as a result of such arrangement interruptions in his work beyond his control shall
be considered working time:
WORKING TIME a. If the imminence of the resumption of the
o Working time is one during which an employee is work requires the EEs presence at the place of
actually working. work; or
o It may include an instance when an employee is not b. If the interval is too brief to be utilized
actually working but he is required to be present in effectively and gainfully in the EEs own
the employer's premises. interest.

Rules on Hours Worked Example: travel from job site to job site during the workday,
A. Waiting Time must be counted as working hours.
It shall be considered as working time if:
1. Waiting is an integral part of this work; 3. Travel away from home
2. The employee is required or engaged by the GR:
employer to wait; or a. Travel that requires an overnight stay on the part
3. When employee is required to remain on call in of the EE when it cuts across the EEs workday is
the employer’s premises or so close thereto that he clearly working time.
cannot use the time effectively and gainfully for his b. The time is not only hours worked on regular
own purpose. workdays but also during corresponding
working hours on non-working days. Outside of
NOTE: An employee who is not required to leave word at his these regular working hours, travel away from
home or with company officials where he may be reached is home is not considered working time.
not working while on call.
XPN: During meal period or when EE is permitted to
NOTE: The controlling factor is whether waiting time spent sleep in adequate facilities furnished by the ER.
in idleness is so spent predominantly for the employer’s
benefit or for the employees. D. Sleeping Time
o Whether sleeping time is allowed, an employee will be
Engaged to Wait v. Waiting to be Engaged considered as per his working time will depend upon
o Engaged to wait – waiting is an integral part of the the express or implied agreement of the parties.
job; the time spent waiting is compensable o In the absence of an agreement, it will depend upon
o Waiting to be engaged – idle time is not working the nature of the service and its relation to the
time; it is not compensable. working time.
B. Preliminary and Postliminary Activities § Compensable: if sleeping time is subject to serious

interruption or takes place under conditions
Preliminary (before work) and postliminary (after actual substantially less desirable than would be likely to exist
work) activities deemed performed during working hours at the employer’s home.
and compensable: § Not compensable: if there is an opportunity for
1. Where such activities are controlled by the comparatively uninterrupted sleep under fairly
employer or required by the employer; and desirable conditions.
2. Pursued necessarily and primarily for the
employer's benefit NOTE: It is compensable working time if the nature of the
employee's work allows sleeping without interrupting or
C. Travel Time prejudicing the performance of his work.
1. Travel from home to work
GR: Normal travel from home to work is not working time. E. Power Interruptions
XPNs: 1. Brownouts of short duration but not exceeding
a. Emergency call outside his regular working hours 20 minutes shall be treated as worked or
where he is required to travel to his regular place compensable hours whether used productively
of business or some other work site. by the employees or not;
b. Done through a Conveyance provided by the ER. 2. Brownouts running for more than 20 minutes
c. Done under the Supervision and control of the ER. may not be treated as hours worked provided
d. Done under Vexing and dangerous circumstance. that any of the following conditions are present:
a. The employees can leave their workplace or go
2. Travel that is all in a day’s work – time spent in elsewhere whether within or without the work
travel as part of the EEs principal activity premises; or
b. The employees can use the time effectively for
their own interest.
H. Semestral Break of Teachers
NOTE: In each case, the employer may extend the working o Semestral break of teachers is considered as
hours of his employees outside the regular schedules to compensable hours worked for it is a form of an
compensate for the loss of productive man-hours without interruption beyond their control.
being liable for overtime pay (Chan, 2017).
NOTE: Payment compensation is given only to regular full-
§ Time spent during which an employee is inactive by time teachers
reason of interruptions beyond his control is
working time, such as twenty-minute electric power University of Pangasinan Faculty Union v. University of
failure or machine breakdowns. Pangasinan
§ The pay for this non-productive time is known as idle o The faculty members are full-time employees receiving
time pay. their monthly salaries irrespective of the number of
§ Where the work is broken or is not continuous, the working days or teaching hours in a month. However,
idle time that an employee may spend for rest is they find themselves in a most peculiar situation
not counted as working time. whereby they are forced to go on leave during
semestral breaks. These semestral breaks are in the
F. Lectures, Meetings, Trainings Programs nature of work interruptions beyond the employees’
o Attendance at lectures, meetings, trainings programs control. The duration of the semestral break varies
and similar activities need not be counted as working from year to year dependent on a variety of
time if the following criteria are met: (OVP) circumstances affecting at times only the private
1. Attendance is Outside of the employee's regular respondent but at other times all educational
working hours; institutions in the country. As such, these breaks cannot
2. Attendance is in fact Voluntary; be considered as absences within the meaning of the
3. The employee does not Perform any productive law for which deductions may be made from monthly
work during such attendance. allowances.
o The semestral break scheduled is an interruption
G. Attendance in Labor Relations Activities beyond petitioner’s control and it cannot be used
1. CBA Negotiations - compensable if: "effectively nor gainfully in the employee’s interest’.
a. There is an agreement for the Thus, the semestral break may also be considered as
compensability in the parties’ Ground Rules. "hours worked." For this, the teachers are paid regular
b. There is an established policy allowing salaries, and for this, they should be entitled to ECOLA.
compensability.
c. When it is done during regular work hours Art. 85. Meal periods – Subject to such regulations as the
with the agreement of the employer. Secretary of Labor may prescribe, it shall be the duty of
2. Grievance Meeting every employer to give his employees not less than sixty
GR: Time spent in adjusting grievance between employer (60) minutes time-off for their regular meals.
and employees during the time employees are required by
the employer to be on the premises is compensable. MEAL BREAK
XPN: When a bona fide union is involved and there is a o Duration – every ER shall give his EEs not less than 60
CBA, policy, practice to contrary minutes or 1-hour time-off for regular meals.
3. Strikes Non- Compensability of The Meal Period

GR: Not compensable o It is not compensable during a time-off.
XPN: if there is an agreement to allow “strike duration o EE must be completely relieved from duty.
pay” provided under the company policy, practice or CBA. o In the 9-hour shift, it includes the meal period
4. Hearing, Arbitration, Conciliation
o Not compensable for it is hardly fair for an employee Compensable Meal Period
or laborer to fight or litigate against his employer and GR: Not compensable
eventually consider it as hours worked.

XPN: It is compensable where the lunch period or mealtime: 2. Those of retail and service establishments
1. Is predominantly spent for the ER’s benefit; or regularly employing not more than 5 workers;
2. When it is less than 60 minutes. 3. Domestic helpers and persons in the personal
service of another;
NOTE: Where during a meal period, the laborers are 4. Managerial employees as defined in Book Three of
required to stand by for emergency work, or where the meal this Code;
hour is not one of complete rest, such is considered 5. Field personnel and other EES whose time and
overtime. performance are unsupervised by the ER
NOTE: Rest periods or coffee breaks running from 5 to 20 o Where the night-time work of an employee overlaps
mins shall be considered as compensable working time. with overtime work, the receipt of overtime pay does
(Full pay) not preclude the receipt of night differential pay. The
latter is night pay; the former is payment beyond 8-
National Shipyards and Steel Corporation v. CIR hour work.
o It will be noted that, under the law, the idle time that an
employee may spend for resting and during which he Non-Waivability
may leave the spot or place of work though not the GR: Waiver of NSD is against public policy
premises of his employer, is not counted as working XPN: Waiver is allowed if this will result to higher or better
time only where the work is broken or is not benefits to EEs.
continuous. (so if continuous yung work while meal time, § Burden of Proof – on worker who claims who have not
it is considered as working hours) been paid NSD
§ Additional exclusion – retail service establishment
When can Meal Period be less than 60 minutes? with not more than 5 workers
(N-16-AP)
1. Work is Non-manual, no serious physical activities Formula: Hourly rate x 110% x 3 hours worked
2. Not less than 16 hours Example:
3. Actual/impending emergencies, urgent work Daily Rate 537.18 php
4. Work necessary to Prevent serious loss Hourly Rate 67.125 php x 110% x 3hrs
§ Shortened MP – upon request/at the instance of EE so 73.838 php x 3hrs OT = 221.51 php
that he/she can leave early (non-compensable)
Night Differential in Overtime Pay
Art. 86. Night shift differential – Every employee shall be o If work is done between 10PM and 6AM is overtime
paid a night shift differential of not less than ten percent work, then the 10% NSD should be based on the
(10%) of his regular wage for each hour of work overtime rate.
performed between ten o’clock in the evening and six o When the tour of duty of an employee falls at nighttime,
o’clock in the morning. the receipt of overtime pay will not preclude the right
to night differential pay. The latter is payment for work
NIGHT SHIFT DIFFERENTIAL done during the night and the other is payment for the
o An employee shall be paid night shift differential of no excess of the regular eight-hour work
less than 10% of his regular wage for each hour of
work performed between 10:00 PM and 6:00 AM. Mercury Drug Co. v. Dayao
o The respondent court's ruling on additional
Rationale: for the health of the employee; it is natural for compensation for work done at night is, therefore, not
the employee to be asleep at night. without evidence. Moreover, the petitioner-company
did not deny that the private respondents rendered
GR: All employees are entitled to NSD. nighttime work. In fact, no additional evidence was
necessary to prove that the private respondents were
XPNs: entitled to additional compensation for whether or not
1. Government EEs and any of its political they were entitled to the same is a question of law
subdivisions, including GOCCs which the respondent court answered correctly. The
"waiver rule" is not applicable in the case at bar. Condition for Entitlement To Overtime Pay
Additional compensation for nighttime work is founded o Overtime work should actually be performed before an
on public policy, hence the same cannot be waived. employee may avail of said benefit.
(Article 6, Civil Code). On this matter, We believe that
the respondent court acted according to justice and Waiver of Overtime Pay
equity and the substantial merits of the case, without GR: The right to overtime pay cannot be waived. The
regard to technicalities or legal forms and should be right is intended for the benefit of the laborers and
sustained. employees. Any stipulation in the contract that the laborer
shall work beyond eight hours without additional
Art. 87. Overtime work – Work may be performed beyond compensation for the extra hours is contrary to law and null
8 hours a day provided that the employee is paid for the and void.
overtime work, an additional compensation equivalent XPNs:
to his regular wage plus at least 25% thereof. Work 1. When the alleged waiver of overtime pay is in
performed beyond eight hours on a holiday or rest day consideration of benefits and privileges which
shall be paid an additional compensation equivalent to the may be more than what will accrue to them in
rate of the first eight hours on a holiday or rest day plus overtime pay, the waiver may be permitted.
at least (30%) thereof. 2. Compressed workweek.
OVERTIME WORK and OVERTIME PAY Q: The employment contract requires work for more than 8
o Overtime work hours a day with a fixed wage inclusive of OT pay. Is that
– the service rendered in excess of and in addition valid?
to eight hours on ordinary working days, which are A: It depends.
the prescribed daily work period, is overtime work. 1. When the contract of employment requires work
o Overtime pay for more than 8 hours at specific wages per day,
– the additional compensation of at least 25% on without providing for a fixed hourly rate or that
the regular wage for the service or work rendered or the daily wages include OT pay, said wages
performed in excess of 8 hours a day by employees or cannot be considered as including OT
laborers in employment covered by the Eight-hour compensation.
Labor Law 2. The employment contract provides for a “built- in”
o It is computed by multiplying the overtime hourly rate OT pay. Non-payment of OT pay by the employer is
by the number of hours in excess of eight valid.
Scenarios Rada v. NLRC

Work in excess of 8 +25% of HR HR x 125% x No. of o An employee is entitled to overtime pay when he does
hours on ordinary hours of overtime work work exceeding the 8 hour work standard work period
working day rendered for the benefit of the employer.
Work in excess of 8 +30% of HR HR x 130% (OT for Rest
hours on rest day or day/Special day) x Bisig ng Manggagawa ng PRC v. PRC
special day 130% (OT pay for the o The phrase "regular base pay" is clear, unequivocal and
excess of 8 hours of requires no interpretation. It means regular basic pay
work) x No. of hours and necessarily excludes money received in different
worked concepts such as Christmas bonus and other fringe
Work in excess of 8 HR x 150% x 130% x benefits.
hours performed on No. of hours of OT
a special day which worked PAL Employees Savings and Loan Association v. NLRC
falls on a rest day o Is an employee entitled to overtime pay for work
Work in excess of 8 +30% of HR HR x 200% x No. of rendered in excess of eight hours a day, given the fact
hours performed on hours worked that his employment contract specifies a twelve-hour
a regular holiday workday at a fixed monthly salary rate that is above the
legal minimum wage? Yes.
o if an employee fails to claim his OT pay, it cannot be said o Where a teacher is engaged to undertake actual
that the monthly rate covers the OT alreadt; the additional teaching work after completing his regular
presumption is that there is a stipulation in the hours of teaching load, such additional work is referred to as
work and compensation overload.
o When the overload is performed within eight hours
Caltex Regular Employees at Manila Office v. Caltex Inc. normal working day, such overload pay is considered
o Overtime work consists of hours worked on a given day part of the basic pay for the purpose of computing
in excess of the applicable work period, which here is 13th month pay.
eight (8) hours. It is not enough that the hours worked § "Overload work" is sometimes misunderstood as
fall on disagreeable or inconvenient hours. In order that synonymous to "overtime work." The two terms
work may be considered as overtime work, the hours are not the same.
worked must be in excess of and in addition to the eight o Overtime work is work rendered in excess of the
(8) hours worked during the prescribed daily work normal working hours of eight in a day. On the other
period, or the forty (40) hours worked during the hand, since overload work may be performed either
regular work week Monday thru Friday. within or outside eight hours in a day, overload work
may or may not be overtime work.
Overtime Rate Subject to Stipulation
GR: The premium for work performed on the employees Interphil Laboratories Employees Union v. Interphil
rest days or on special days or regular holidays are included Laboratories
as part of the regular rate of the employee in the o The employees are deemed to have waived the eight-
computation of OT pay for any OT work rendered on said hour schedule since they followed, without any
days especially if the employer pays only the minimum OT question or complaint, the two- shift schedule while
rates prescribed by law. their CBA was still in force and even prior thereto. The
two-shift schedule effectively changed the working
XPN: EEs and ER may stipulate in their collective hours stipulated in the CBA. As the employees assented
agreement the payment of OT rates higher than those by practice to this arrangement, they cannot now be
provided by law and exclude the premium rates in the heard to claim that the overtime boycott is justified
computation of OT pay. Such agreement may be considered because they were not obliged to work beyond eight
valid only if the stipulated OT pay rates will yield to the EEs hours.
not less than the minimum prescribed by law.
Art. 88. Undertime not offset by overtime – Undertime
Overtime Pay in a Compressed Workweek Scheme work on any particular day shall not be offset by overtime
o Any work performed beyond 12 hours a day or 48 work on any other day. Permission given to the employee
hours a week shall be subject to OT premium to go on leave on some other day of the week shall not
exempt the employer from paying the additional
Built-in Overtime Pay or Composite/Package Pay compensation required in this Chapter.
o It is not per se illegal, but there should have been
express agreement to that effect. such arrangement, if Undertime NOT Offset by Overtime
there be any, must appear in the manner required by o Where a worker incurs undertime hours during his
law on how overtime compensation must be regular daily work, said undertime hours should not be
determined. offset against the overtime hours on the same day or on
Requisites: any other day.
1. A clear written agreement knowingly and freely o The rule will prevent the anomalous situation whereby
entered into by the employee; an employee could schedule his working hours at will
2. The mathematical result shows that the agreed thereby destroying the regular working schedules.
legal wage rate and the overtime pay, computed
separately are equal or higher than the separate Lagatic v. NLRC
amounts legally due. o Cityland has a practice of offsetting rest day or holiday
Overload Work and Overtime Work Distinguished work with equivalent time on regular workdays.
Applying by analogy the principle that overtime cannot
be offset by undertime, to allow offsetting would
prejudice the worker. He would be deprived of the The employer shall determine and schedule the weekly
additional pay for the rest day work he has rendered rest day of his employees, subject to collective
and which is utilized to offset his equivalent time off on bargaining agreement and to such rules and
regular workdays. To allow Cityland to do so would be regulations as the Secretary of Labor and Employment
to circumvent the law on payment of premiums for rest may provide. However, the employer shall respect the
day and holiday work. preference of employees as to their weekly rest day when
such preference is based on religious grounds.
Art. 89. Emergency overtime work
Right to Weekly Rest Day (WRD)
EMERGENCY OVERTIME WORK o Every ER shall give his EEs a rest period of not less than
GR: Any EE may not be compelled to render OT work; OT 24 consecutive hours after every 6 consecutive normal
work is voluntary. workdays
XPNs: Compulsory OT work in any following situations: Rest day not necessarily Sunday or holiday
(ELU-NCA) o All establishments and enterprises may operate or
1. When the country is at war or when any other national open for business on Sundays and holidays provided
or local Emergency has been declared by Congress or that the employees are given the weekly rest day
the Chief Executive; and the benefits provided under the law.
2. When overtime work is necessary to prevent Loss of life
or property, or in case of imminent danger to public Person Who Determines the WRD
safety due to actual or impending emergency in the GR: ER shall determine and schedule the WRD of
locality caused by serious accident, fire, floods, his EE.
typhoons, earthquake, epidemic or other disaster or XPNS: (CRR)
calamities; 1. CBA
3. When there is Urgent work to be performed on 2. Rules and regulations as the SLE provides
machines, installations, or equipment, in order to avoid 3. Preference of EE based on Religious grounds – EE
serious loss or damage to the employer or some other shall make known his preference in writing at least
causes of similar nature; 7 days before the desired effectivity of the initial
4. When the work is Necessary to prevent loss or damage rest day so preferred.
to perishable goods; XPNs to XPN no. 3: ER may schedule the WRD of his choice
5. When the Completion or continuation of work started for at least 2 days in a month if the preference of the EE
before the 8th hour is necessary to prevent serious will inevitably result in:
obstruction or prejudice to the business or operations a. Serious prejudice to the operations of the
of the employer; or undertaking; and
6. When overtime work is necessary to Avail of favorable b. The ER cannot normally be expected to
weather or environmental conditions where resort to other remedial measures
performance or quality of work is dependent thereon.
NOTE: The employer is mandated to respect the choice of
NOTE: There should be payment of additional its employee as to their rest day based on religion.
compensation. Employee’s refusal to obey the order of
the employer constitutes insubordination for which he Right of the Employee to know the Schedule of their
may be subjected to disciplinary action. WRDs
§ ER shall make known rest period by means of: (WP1)
REST PERIODS 1. Written notice
Art. 91. Right to weekly rest day – It shall be the duty of 2. Posted conspicuously in the workplace
every employer, whether operating for profit or not, to 3. At least 1 week before it becomes effective
provide each of his employees a rest period of not less
than twenty-four (24) consecutive hours after every six
(6) consecutive normal workdays.
Art. 93 –
RATES OF ADDITIONAL.
INSTANCES COMPENSATION
Employee to Work on His Rest Day (Art. 92) Work on a scheduled rest + 30% premium pay of
GR: The EE cannot be compelled by the ER to work day 100% RW
on his rest day. Work performed on + 30% premium pay of
Sundays and Holidays by 100% RW
XPNs: (AUA-PCA) an EE who has no regular
1. In case of Actual or impending emergencies caused workdays and rest days
by serious accident, fire, flood, typhoon, Work on a Sunday (If EE’s + 30% premium pay of
earthquake, epidemic or other disaster or calamity scheduled rest day) 100% RW
to prevent loss of life and property, or imminent 1st 8 hrs: + 30% PP of
100% RW
danger to public safety;
Work performed on any
2. In cases of Urgent work to be performed on the
Special Holiday Excess of 8 hrs: + 30% of
machinery, equipment, or installation, to avoid hourly rate on said date
serious loss which the employer would otherwise
suffer; Work performed on a 1st 8 hrs: + 50% PP of
3. In the event of Abnormal pressure of work due to Special Holiday and same 100% RW
special circumstances, where the employer cannot day is the scheduled rest
ordinarily be expected to resort to other measures; day Excess of 8 hrs:+ 30% of
4. To prevent loss or damage to Perishable goods; hourly rate on said date
5. Where the nature of the work requires Continuous
operations and the stoppage of work may result in Ee is only entitled to his
basic rate. No PP is
irreparable injury or loss to the employer; and required.
Work performed on a
6. Under other circumstances Analogous or similar to
Special Working Holiday
the foregoing as determined by the Secretary of Reason: Work performed
Labor and Employment. is considered work on
ordinary working days
PREMIUM PAY
o It is the additional compensation for work rendered
by the EE on days when normally he should not be NOTE: Holiday work provided under Art. 93 pertains to
working such as special holidays and WRDs. special holidays or special days.
o Refers to the additional compensation required by
law to be paid for work performed within the regular HOLIDAY PAY
eight (8) hours on non-working days such as rest
days and special holidays. Art. 94. Right to holiday pay – Every worker shall be paid
o Refers to the regular wage combined with the his regular daily wage during regular holidays, except
additional compensation of 30% under Article 93 in retail and service establishments regularly
and 100% under Article 94. employing less than ten (10) workers;
Art. 90. Computation of additional compensation – For The employer may require an employee to work on any
purposes of computing overtime and other additional holiday, but such employee shall be paid a compensation
remuneration as required by this Chapter, the “regular equivalent to twice his regular rate; and
wage” of an employee shall include the cash wage only,
without deduction on account of facilities provided by As used in this Article, “holiday” includes: New Year’s Day,
the employer. Maundy Thursday, Good Friday, the ninth of April, the first
of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and
the day designated by law for holding a general election.

§ Holiday Pay Wellington Investment and Manufacturing Corporation
o a one-day pay given by law to an employee even if he v. Trajano
does not work on a regular holiday o The provisions of the Labor Code on the entitlement to
o It is a premium given to EEs pursuant to the law even if the benefits of holiday pay are clear and explicit – it
he has not been suffered to work on a regular holiday. provides for both the coverage of and exclusion from
o It is limited to the 12 regular holidays, also called legal the benefits. In Policy Instruction No. 9, the then
holidays listed by law. Secretary of Labor went as far as to categorically state
o The EE should not have been absent without pay on the that the benefit is principally intended for daily paid
working day proceeding the regular holiday. employees, when the law clearly states that every
worker shall be paid their regular holiday pay.
IBAAEU v. Inciong
o The provisions of the Labor Code on the entitlement to
the benefits of holiday pay are clear and explicit – it REGULAR HOLIDAYS DATE
provides for both the coverage of and exclusion from New Year’s Day January 1
the benefits. In Policy Instruction No. 9, the then Araw ng Kagitingan Monday nearest April 9
Secretary of Labor went as far as to categorically state Maundy Thursday Movable date
that the benefit is principally intended for daily paid Good Friday Movable date
employees, when the law clearly states that every Labor Day May 1
worker shall be paid their regular holiday pay. Independence Day June 12
National Heroes Day Last Monday of August
Persons Entitled to Holiday Pay Eid’l Fitr Movable date
GR: All EEs are entitled (IRR, Book III, Rule IV, Sec.1) Edi’l Adha Movable date
XPNs: Persons not Entitled to Holiday Pay (GRD-MF-FF)
Bonifacio Day November 30
1. Government EEs and any of its political subdivisions,
Christmas Day December 25
including GOCCs (with original charter);
Rizal Day December 30
2. Retail and service establishments with less than 10
workers;
SPECIAL (NON-
3. Domestic helpers
WORKING) HOLIDAYS DATE
4. Managerial personnel and managerial staff
Ninoy Aquino Day August 21
5. Members of the Family of the ER who are dependent
on him for support; All Saints’ Day November 1
6. Field personnel and other EE whose time and Last day of the year December 31
performance are unsupervised by the ER; and Other holidays declared by
law and ordinance
Legal Holiday
o It is a day designated or set apart by the legislature, for NOTE: RH falling within temporary or periodic shutdown
a purpose within the meaning of the term "holiday", in and temporary cessation of work are compensable.
order to commemorate an important event. However, if the temporary or periodic shutdown and
cessation of work is due to business reverses, the ER may
Regular Holidays (RH) not pay the EEs during such period.
GR: They are compensable whether worked or unworked
subject to certain conditions. They are also called legal If Outside Muslim Area
holidays. GR: Muslim EEs shall be excused from work during MH
XPN: A legal holiday falling on a Sunday creates no legal without diminution of salary or wages.
obligation for the employer to pay extra, aside from the XPN: Those who are permitted or suffered to work on MH
usual holiday pay, to its monthly-paid employees. are entitled to at least 100% basic pay + 100% as premium
of their basic pay

San Miguel Corp. v. CA 1. If it is employee’s regular workday
o Payment of Muslim holidays must be paid both to a. Unworked: no pay unless there is a favorable
Muslims and non-Muslims, it is for everyone, no company policy, practice or CBA granting
classification of religion. payment of wages on special days even if
unworked.
REGULAR SPECIAL b. Worked:
HOLIDAY HOLIDAY i. 1st 8 hours – plus 30% of daily wage rate of 100%
Compensable, Not ii. Excess of 8 hours -hourly rate of the basic daily
If unworked subject to certain Compensable wage x 130% x 130% x no. of hours worked.
conditions 2. If it is employee’s rest day and worked
Rate is 200% of Additional 30% a. 1st 8 hours – 150%
If worked the regular rate premium pay of b. Excess of 8 hours – hourly rate of the basic daily
100% RW wage x 150% x 130% x no. of hours worked.
Limited to the 12 Not exclusive; 4. For those declared as Special Working Holidays, the
holidays law or ordinance following rules shall apply:
provided in the may provide for a. For work performed, an employee is entitled only to
Labor Code other special his basic rate.
holidays b. No premium pay is required since work performed
on said days is considered work on ordinary
Rules: working days.
1. Employee must be present or on leave of absence with
pay on workday immediately preceding the holiday: NOTE: The EE should not have been absent without pay in
200% the working day immediately preceding the RH.
2. If Araw ng Kagitingan falls within Maundy Thursday,
200% even if unworked HOLIDAY PAY OF CERTAIN EMPLOYEES
3. Successive regular holidays: not pay if absent Private School Teachers (Faculty Members of Colleges
immediately preceding both holidays, but if present on and Universities)
1st holiday, pay on 2nd holiday 1. RH during semestral vacations – not entitled to
holiday pay.
Formula to Compute Wage on Holidays 2. RH during Christmas vacation – entitled to
Regular Holiday holiday pay.
1. If it is employee’s regular workday
a. Unworked: 100% Hourly-Paid Teachers
b. Worked: 1. No pay on regular holidays including Christmas
i. 1st 8 hours – 200% and semestral vacations; but,
ii. Excess of 8 hours – 200% + 30% of hourly rate 2. With pay on special public holidays and other
on said day. no-class days when classes are called off or
2. If it is employee’s rest day shortened on account of floods, typhoons, rallies
a. Unworked – 100% and the like.
b. Worked
i. 1st 8 hours – 200% + 30% of 200% Field Personnel
ii. Excess of 8 hours – 230%, plus 30% of hourly o Not entitled to holiday pay
rate on said day
Part-time Worker
For declared Special Holidays such as Special Non- o If the work is partial, the pay should also be partial.
Working Day, Special Public Holiday, Special National o The amount of holiday pay of a part-timer is to be
Holiday in addition to the 3 nationwide special determined on a case-to-case basis.
(nonworking) days o The basis is any of the following, whichever yields the
highest amount:

1. The Regular wage per day; Concept of Successive Regular Holidays
2. The Basic wage on the working day preceding the WED MAUNDY GOOD ENTITLED TO
regular holiday if the employee is present or on leave THURSDAY FRIDAY HOLIDAY PAY
with pay on the last working day immediately prior to Worked RH RH Yes (Both)
the regular holiday; LOA w/ pay RH RH Yes (Both)
3. The Average of his basic wages for the last seven LOA w/o RH RH No (Both)
working days for employees who are paid by results; pay
or LOA w/o Yes (Only to
4. The Basic wage on the particular holiday, if worked. pay Worked RH holiday pay on
Fri)
Piece-Rate Workers
o A piece-rate employee is entitled to holiday pay. Conditions for an Employee to be Entitled to Two (2)
o Where a covered employee is paid by results or Successive Holiday Pays
output, his holiday pay shall not be less than his On the day immediately preceding the 1st RH, he must be:
average daily earnings for the last 7 actual 1. Present (worked); or,
workdays immediately preceding the regular holiday. 2. On LOA with pay.
o Provided: Holiday pay shall not be less than the
statutory minimum wage rate. If the Above Stated Conditions Are Not Met
o He must work on the 1st RH to be entitled to holiday
Seasonal Workers pay on the 2nd RH.
o Seasonal workers may not be paid the required
Holiday pay during off-season where they are not at SERVICE INCENTIVE LEAVE
work. Art. 95. Right to service incentive leave – Every employee
who has rendered at least one year of service shall be
Workers Having No Regular Workdays entitled to a yearly service incentive leave of five days
o They shall be entitled to holiday pay. with pay.
Rule on Two Regular Holidays Falling on the Same Day This provision shall not apply to those who are already
(Double Holiday Pay) enjoying the benefit herein provided, those enjoying
o If two regular holidays fall on the same day (such as vacation leave with pay of at least five days and those
Good Friday falling on Araw ng Kagitingan), the employed in establishments regularly employing less
employees should be paid 400% of the basic wage for than ten employees or in establishments exempted
both holidays provided he Worked on that day or from granting this benefit by the Secretary of Labor and
was on Leave of absence with pay or was on Employment after considering the viability or financial
Authorized absence on the day prior to the regular condition of such establishment.
holiday.
The grant of benefit in excess of that provided herein shall
MAUNDY not be made a subject of arbitration or any court or
WED THURSDAY & ARAW RATE administrative action.
NG KAGITINGAN
Present Unworked 200% Right to SIL
LOA w/ pay Unworked 200% GR: Every employee who has rendered at least 1 year of
LOA w/ pay At least service shall be entitled to a yearly SIL of 5 days with pay.
Worked 300% § Leave pay means an employee gets paid despite
Authorized At least absence from work.
absence Worked 300% XPNs:
390% 1. Already enjoying the benefit with at least 5 days of
Authorized Worked and day is (+30% of vacation leave
absence Rest Day each 3 2. Employs less than 10 employees
100%) 3. Exempted by SOLE
Mercidar Fishing Corporation v. NLRC EMPLOYEES PAID BY RESULTS
o Fishermen are not field personnel and are entitled Art. 101. Payment by results – The Secretary of Labor and
to service incentive leave pay because during the Employment shall regulate the payment of wages by results,
entire course of their fishing voyage, fishermen including pakyaw, piecework, and other non-time work, in
have no choice but to remain on board its vessel. order to ensure the payment of fair and reasonable wage
o Although they perform non-agricultural work rates, preferably through time and motion studies or in
away from business offices, the fact remains that consultation with representatives of workers’ and
throughout the duration of their work they are employers’ organizations.
under the effective control and supervision of the
employer through the vessel’s patron or master. Workers Paid by Results:
o The law requires that the actual hours of work in 1. Paid based on the work completed; and
the field be reasonably ascertained. 2. Not on the time spent in working.
o The company has no way of determining whether
or not these sales personnel, even if they report to o Pay of these workers is calculated not on the basis of
the office before 8am prior to field work and come time spent on the job but of the quantity and quality
back at 4:30pm, really spend hours in between or the kind of work they turn out.
actual field work o It includes those who are paid on piece work, “takay”
or task basis, who shall be entitled to receive not less
ENTITLEMENT OF TERMINATED EEs TO SIL than the prescribed statutory minimum wage for an
Entitled to SIL until actual eight-hour work or a proportion thereof for less than
Illegally dismissed EEs reinstatement eight hours work.
The EE who had not been Categories:

paid of SIL from the outset A. As to Presence of Control*
of employment is entitled 1. Supervised (Piece-rate worker) - works directly
Legally dismissed EEs only of such pay after a under the supervision of the employer.
year from 2. Unsupervised (Takay or Pakyaw)- works away
commencement of from the employer’s premises.
service until termination
of contract B. As to Rate of Payment
1. Those who are paid piece rates which are
prescribed in Piece Rate Orders issued by DOLE
Commutation of SIL to Monetary Equivalent
o It is commutable if not used at the end of the year. – Wages or earnings are determined by simply
o It is aimed primarily at encouraging workers to work multiplying the number of pieces produced by the
continuously and with dedication to the company. rate per piece.
XPN: RA 10361 grants SIL to domestic workers. Their SIL 2. Those who are paid output rates which are
need not be converted to cash or carried over to succeeding prescribed by the ER and are not yet approved
years. by the DOLE – The number of pieces produced is
multiplied by the rate per piece as determined by
Prescription of SIL the ER.
§ 3 years a. If resulting amount is equivalent to or
o From the time when the employer refuses to pay its more than the applicable statutory
monetary equivalent after demand of commutation minimum rate in relation to the number of
or upon termination of the employee’s services, as hours worked, worker will receive such
the case may be. amount.
o Not at the end of the year when the employee becomes b. If the amount is less than the applicable
entitled to the commutation of his SIL legal rate, employer is required by law to pay
the difference between the resulting amount
and the applicable legal minimum rate

Entitlement to Statutory Benefits o In a task-basis work, the emphasis is on the task
GR: All employees paid by result shall receive not less than itself, in the sense that payment is reckoned in
the applicable new minimum wage rates for eight (8) hours terms of completion of the work, not in terms of the
work a day. number of time spent in the completion of work.
XPN: A payment by result rate has been established by the Once the work or task is completed, the worker
Secretary of Labor. receives a fixed amount as wage, without regard to
the standard measurements of time generally used
NOTE: All workers in the private sector, regardless of in pay computation.
their position, designation or status, and irrespective of the o The payment of an employee on task or pakyaw
method by which their wages are paid, are entitled to basis alone is insufficient to exclude one from the
claim cost-of-living allowance. coverage of SIL and holiday pay.
o Piece-rate employees are entitled to night-shift SPECIAL GROUP OF EMPLOYEES

differential, holiday pay, service incentive leave,
premium pay, and 13th-month pay. Women
o They are entitled to overtime pay if their output pay Art. 130 – Facilities for women
rate is not shown to be in accordance with the o Provide seats proper for women and permit them to
standards prescribed under the Implementing Rules use such seats when they are free from work
or by the Secretary of Labor. o To establish separate toilet rooms and lavatories for
men and women and provide at least a dressing room
Summation: Benefits Payable to Piece-rate Workers for women
(Supervised): (S-SIL-NHM-OP-13-Other) o To establish a nursery in a workplace for the benefit of
1. Applicable Statutory minimum daily rate the women
2. Service Incentive Leave of 5 days with pay o To establish a nursery in a workplace for the benefit of
3. Night shift differential pay the women employees therein
4. Holiday pay o To determine appropriate minimum age and other
5. Meal and rest periods standards for retirement or termination in special
6. Overtime pay (conditional) occupations such as those of flight attendants and the
7. Premium pay (conditional) like.
8. 13th – month pay
9. Other benefits granted by law, CBA or company Art. 131 – Maternity Leave (RA 11210)
policy or practice. Art. 134 – Family Planning Services; incentives for family
planning
NOTE: The wage rates of workers who are paid by results Art. 135 – Discrimination prohibited
may be determined through time and motion studies or Art. 136 – Stipulation against marriage.
consultation with representatives of employers’ and o Unlawful to require as a condition of employment or
workers’ organizations in a tripartite called by the DOLE continuation of employment that a woman employee
Secretary shall remain single
Labor Congress of the Philippines v. NLRC Art. 137 – Prohibited acts

o Piece-rate workers are entitled to benefits such as o Unlawful for any employer to:
nighttime pay, holiday pay, service incentive leave, o To deny any woman employee the benefits provided in
and 13th month pay. this Chapter
o To discharge such woman on account of her pregnancy,
David v. Macasio or while on leave or in confinement due to her
o A distinguishing characteristic of “pakyaw” or task pregnancy
basis engagement, as opposed to straight-hour o To discharge or refuse the admission of such woman
wage payment, is the non-consideration of the time upon returning to her work for fear that she may again
spent in working. be pregnant

Art. 138 – Classification of certain women workers distinctions between 3rd genders so LGBT may be the
victims or offenders.
Republic Act No. 9170 o Compared to Sexual harassment law where moral
o CEDAW ascendancy is required to be liable.
o Discrimination against women o Sexual advances can now be committed via technology
o Different from RA 9262 like texts or email
o Section 22. Right to Decent Work o Complaints will be evaluated by a committee on
o Section 35 Decorum, ER must have a Committee on decorum
o Section 41. Penalties o The head of the committee of decorum must be a
woman and at least half of the members of the
RA 787: ANTI-SEXUAL HARASSMENT ACT OF 1995 committee must be women
Requisites:
1. Act is committed in a work, education or training- Maternity Leave Law - An SSS benefit
related environment; o 105 days w/ full pay may have an additional 30 days
2. The doer, is any person who has authority, but w/o pay
influence or moral ascendancy; o If solo parent, the EE will be granted and additional 15
3. Doer demands sexual favor; leave with pay
4. Does not matter whether favor is accepted or not o 60 days leave if there’s miscarriage
o EE must inform the ER, and ER must inform SSS, if the
§ Quid pro quo ER fails to inform SSS Then ER must instead give EE the
benefit not SSS
Work environment o Unused Maternity leave may be allocated to husband or
o Example, sexual favors in exchange of promotions etc. caregiver but only for 7 days
and refusal will result in detriment to the EE o Can only allocate to live births cannot allocated to
husband the 7 days leave to miscarriage
Educational environment o Maternity leave can already be availed even before the
o Example, sexual favors in exchange of passing grades, literal birth of the child
and refusal will result in detriment to the student
Philippine Telegraph & Telephone Co. NLRC
How about EE to EE acts, hindi boss and nag sexual o An employer is free to regulate, according to his
harass? discretion and best business judgment, all aspects of
o No, it is not considered, Pag wala moral ascendancy employment, "from hiring to firing," except in cases of
then it is not considered as sexual harassment unlawful discrimination or those which may be
provided by law.
Liability of ER if he ignores the complaints? o Contract of labor is impressed with public policy and
o They are solidarily liable for damages should not contain oppressive provisions nor impair
the interest or convenience of the public. Thus, the
NOTE: It is the duty of the ER to disseminate and to inform employer’s policy against marriage is a prohibited
its EEs about the prohibition of sexual harassment. provision.
o Article 136 explicitly prohibits discrimination merely
NOTE: When we speak of sexual advances, it is not by reason of the marriage of a female employee. This
necessary that sexual acts happen. As long as it offends the kind of discrimination is also prohibited by no less than
victim and it shows a hostile environment then it is the Constitution (and the Bible hehe).
sufficient to be considered as sexual harassment.
Libres v. NLRC
Safe Spaces Act o RA No. 7877 has no retroactive application; hence, it
o No distinction between those with or without moral cannot be applied to this case. The Labor Arbiter have
ascendancy. Liability may arise even if it is between to rely on the MEC report and the common connotation
employees and even subordinate offenders and also no of sexual harassment as it is generally understood by
the public in resolving the case brought before it.
o Must be cohabiting with the spouse
Domingo v. Rayala o May be availed even if the spouse suffered miscarriage
o As a managerial employee, petitioner is bound by more
exacting work ethics. He failed to live up to his higher RA 9262: VAWC
standard of responsibility when he succumbed to his o Not SSS Benefit, borne by employer
moral perversity. And when such moral perversity is o 10 days leave with pay for victims of VAWC
perpetrated against his subordinate, he provides a o VAWC is considered as extraterritorial, so illicit
justifiable ground for his dismissal for lack of trust relationship is committed abroad, a complaint can still
and confidence. It is the right, nay, the duty of every be filed in the PH
employer to protect its employees from oversexed o If the husband commits adultery, he is also considered
superiors. as committing psychological abuse.
Duncan Assoc. and Pedro Tecson v. Glaxo Wellcome Solo Parents Act
Philippines, Inc. o Solo parents are given solo parent I.D
o The policy being questioned is not a policy against o Entitled to 7 days with pay for those who have already
marriage. rendered service of at least 1 year
o An employee of the company remains free to marry o Only applies to solo parents with children
anyone of his or her choosing. The policy is not aimed - Children means lower than 18 years of age or
at restricting a personal prerogative that belongs only more than 18 years but unable to support
to the individual. However, an employee’s personal himself
decision does not detract the employer from exercising
management prerogatives to ensure maximum profit Magna Carta for Women
and business success. o When a female suffers Gynecological disorder and
needs to be operated on, the ER is bound to give her 2
Star Paper v. Simbol mo. leave with pay, provided that the EE have rendered
o Unless the employer can prove that the reasonable a continuous aggregate employment service of at least
demands of the business require a distinction based on 6 mo.
marital status and there is no better policy available o Gynecological disorders - dilatation and curettage or
that would accomplish the business purpose, an those involving female reproductive organ
employer may not discriminate against an employee o No need for the ER to fully give the 2-mo. leave, the ER
based on the identity of the employee’s spouse may ask the doctor the recommended rest time for the
EE and give her only those recommended by the doctor
Bona fide occupational qualification exception
§ The reasonable demands of the business: Night Shift Differentials
a) To require a distinction based on marital status o Night workers are required to have health assessments
b) There is no better policy available that would o Needs to provide the necessary facilities like Sleeping
accomplish the business purpose and resting quarters etc.
§ Two things to prove:
a) Employment qualification is reasonably related to RA 9231: An Act against Child Labor
the essential operation of the job involved; Sec. 2-A. Hours of Work of a Working Child –
b) There is factual basis that all persons meeting the 1. A child below 15 years old may be allowed to
qualification would be unable to properly perform work for not more than 4 hours at any given day
the duties of the job 2. A child 15 years old but below 18 shall not be
allowed to work for more than 8 hours a day and
Paternity Leave in no case beyond 40 hours a week;
o Not an SSS benefit borne by employer 3. No child below 15 years old shall be allowed to
o Must be the married husband, regardless of the work between 8pm-6am of the following day and
employment status Applies only to first 4 deliveries of no child 15-18 years old shall be allowed to work
the mother between 10pm-6am in the morning of the
o 7 days with pay following day.
5. Nature of work (if not confined to the employment
NOTE: A person between 15 and 18 may legally work if the of the family of the employer)
work is not hazardous.
RA 7277: Magna Carta for the Disabled of 1992
RA 10361: Batas Kasambahay
Section 6. Board, Lodging and Medical Attendance – The Disabled Persons
employer shall provide for the basic necessities of the - Those suffering from restriction of different
domestic worker to include at least 3 adequate meals a abilities, as a result of a mental, physical or
day and humane sleeping arrangements that ensure sensory impairment, to perform an activity in
safety. the manner or within the ranger considered
normal for a human being;
The domestic worker and employer shall not be
deprived from agreeing to the following: (OWAO) Disability
a) Offsetting a day of absence with a particular rest - Shall mean:
day; 1. Physical or mental impairment that substantially
b) Waiving a particular rest day in return for an limits one or more psychological, physiological
equivalent daily rate of pay; or anatomical function of an individual or
c) Accumulating rest days not exceeding 5 days; or activities of such individual;
d) Other similar arrangements 2. A record of such an impairment; or
3. Being regarded as having such an impairment;
Rights and Benefits of Kasambahay
1. Minimum wage Handicap
2. Daily and Weekly Rest Periods - Refers to a disadvantage for a given individual
3. SIL resulting from an impairment or a disability, that
4. 13th month pay limits or prevents the functions or activity, that
5. SSS, Philhealth, PAG-IBIG is considered normal given the age and sex of the
6. Board, lodging, medical attendance individual
APEX Mining Company v. NLRC Qualified Individual with a Disability

o The mere fact that the house helper or domestic servant - An individual with a disability who, with or
is working within the premises of the business of the without reasonable accommodations, can
employer and in relation to or in connection with its perform the essential functions of the
business, as in its staff houses for its guest or even for employment position that such individual holds
its officers and employees, warrants the conclusion that or desires. However, consideration shall be given
such house helper or domestic servant is and should be to the employer’s judgment as to what functions
considered as a regular employee of the employer and of a job are essential, and if an employer has
not as a mere family house helper or domestic servant prepared a written description before
as contemplated in the Labor Code. advertising or interviewing applicants for the
job, this description shall be considered evidence
Remington Industrial v. Castaneda of the essential functions of the job.
o The criteria for holding one to be a house helper is the
personal comfort and enjoyment of the family of the Bernardo v. NLRC
employer in the home of said employer. The mere fact o The Magna Carta for Disabled Persons mandates that
that an employee works within company premises + in qualified disabled persons be granted the same terms
relation to the business is enough to conclude that the and conditions of employment as qualified able-bodied
employee is regular. employees. Once they have attained the status of
regular workers, they should be accorded all the
Criteria – the personal comfort and enjoyment of the family benefits granted by law, notwithstanding written or
Determined by: verbal contracts to the contrary. This treatment is
4. Situs;
rooted not merely on charity or accommodation, but on submitted to the President for his approval. Thereafter, it
justice for all. shall be the controlling plan for the development of
manpower resources for the entire country in accordance
HUMAN RESOURCE DEVELOPMENT PROGRAM with the national development plan. The Council shall call
upon any agency of the Government or the private sector to
Art. 43. Statement of Objective – It is the objective of this assist in this effort.
Title to develop human resources, establish training
institutions and formulate such plans and programs as will Art. 47. National Manpower Skills Center – The Council
ensure efficient allocation, development and utilization of shall establish a National Manpower Skills Center and
the nation’s manpower and thereby promote employment regional and local training centers for the purpose of
and accelerate economic and social growth. promoting the development of skills. The centers shall be
administered and operated under such rules and
Art. 44. Definitions – As used in this Title: regulations as may be established by the Council.
(b) “Manpower” shall mean that portion of the nation’s
population which has actual or potential capability Art. 48. Establishment and Formulation of Skills
to contribute directly to the production of goods and Standards – There shall be national skills standard for
services. industry trades to be established by the Council in
(c) “Entrepreneurship” shall mean training for self- consultation with employers and workers organizations
employment or assisting individual or small and appropriate government authorities. The Council shall
industries within the purview of this Title. thereafter administer the national skills standards.
Art. 45. National Manpower And Youth Council, Art. 49. Administration of Training PROGRAMS – The
Composition – To carry out the objectives of this Title, the Council shall provide, through the Secretariat, instructor
National Manpower and Youth Council, which is attached to training, entrepreneurship development, training in
the Department of Labor for policy and program vocations, trades and other fields of employment, and assist
coordination and hereinafter referred to as the Council, any employer or organization in training schemes to attain
shall be composed of the Secretary of Labor as ex-officio its objectives under rules and regulations which the Council
chairman, the Secretary of Education and Culture as ex- shall establish for this purpose.
officio vice-chairman, and as ex-officio members, the
Secretary of Economic Planning, the Secretary of The Council shall exercise, through the Secretariat,
Agriculture and Food, the Secretary of Natural Resources, authority and jurisdiction over, and administer, ongoing
the Chairman of the Civil Service Commission, the Secretary technical assistance programs and on grants-in-aid for
of Social Welfare, the Secretary of Local Government, the manpower and youth development including those which
Secretary of Science and Technology, the Secretary of Trade may be entered into between the Government of the
and Industry, and the Director-General of the Council. The Philippines and international and foreign organizations and
Director General of the Council shall have no vote. nations, as well as persons and organizations in the
Philippines.
In addition, the President shall appoint the
following members from the private sector: two (2) In order to integrate the national manpower
representatives of national organization of employers, two development efforts, all manpower training schemes as
(2) representatives of national workers organizations and provided for in this Code shall be coordinated with the
one representative of national family and youth Council, particularly those having to do with the setting of
organizations, each for a term of three (3) years. skills standards. For this purpose, existing manpower
training programs in the Government and in the private
Art. 46. National Manpower Plan – The Council shall sector shall be reported to the Council which may regulate
formulate a long-term national manpower plan for the such programs to make them conform with national
optimum allocation, development and utilization of development programs.
manpower for employment, entrepreneurship and
economic and social growth. This manpower plan shall,
after adoption by the Council, be updated annually and
This Article shall not include apprentices, learners Office of Manpower Planning and Development, an Office of
and handicapped workers as governed by appropriate Vocational Preparation, a National Manpower Skills Center,
provisions of this Code. regional manpower development offices, and such other
offices as may be necessary.
Art. 50. Industry Boards – The Council shall establish
industry boards to assist in the establishment of manpower The Director General shall have the rank and
development schemes, trades and skills standards and such emoluments of an undersecretary and shall serve for a term
other functions as will provide direct participation of of ten (10) years. The Executive Directors of the Office of
employers and workers in the fulfillment of the Council’s Manpower Planning and Development, the Office of
objectives, in accordance with guidelines to be established Vocational Preparation, National Manpower Skills Center
by the Council and in consultation with the National shall have the rank and emoluments of a bureau director
Economic and Development Authority. and shall be subject to Civil Service Law, rules and
regulations. The Director General, Deputy General and
The maintenance and operations of the industry Executive Directors shall be natural-born citizens, between
boards shall be financed through a funding scheme under 30 and 50 years of age at the time of appointment, with a
such rates of fees and manners of collection and master’s degree or its equivalent, and experience in national
disbursement as may be determined by the Council. planning and development of human resources. The
Executive Director of the National Manpower Skills Center
Art. 51. Employment Service Training Functions – The shall, in addition to the foregoing qualifications, have
Council shall utilize the employment service of the undergone training in center management. Directors shall
Department of Labor for the placement of its graduates. The be appointed by the President on the recommendation of
Bureau of Employment Services shall render assistance to the Secretary of Labor.
the Council in the measurement of unemployment and
underemployment, conduct of local manpower resource The Director General shall appoint such personnel
surveys and occupational studies including an inventory of necessary to carry out the objectives, policies and functions
the labor force, establishment and maintenance without of the Council subject to Civil Service rules. The regular
charge of a national register of technicians who have professional and technical personnel shall be exempt from
successfully completed a training program under this Act WAPCO rules and regulations.
and skilled manpower including its periodic publication,
and maintenance of an adequate and up-to-date system of The Secretariat shall have the following functions and
employment information. responsibilities:
(a) To prepare and recommend the manpower plan for
Art. 52. Incentive Scheme – An additional deduction from approval by the Council;
taxable income of one-half (1/2) of the value of labor (b) To recommend allocation of resources for the
training expenses incurred for developmental programs implementation of the manpower plan as approved
shall be granted to the person or enterprise concerned by the Council;
provided that such development programs, other than (c) To carry out the manpower plan as the implementing
apprenticeship, are approved by the Council and the arm of the Council;
deduction does not exceed ten percent (10%) of direct labor (d) To effect the efficient performance of the functions of
wage. the Council and the achievement of the objectives of
There shall be a review of the said scheme two this Title;
years after its implementation. (e) To determine specific allocation of resources for
projects to be undertaken pursuant to approved
Art. 53. Council Secretariat – The Council shall have a manpower plans;
Secretariat headed by a Director General who shall be (f) To submit to the Council periodic reports on progress
assisted by a Deputy Director General both of whom shall and accomplishment of work programs;
be career administrators appointed by the President of the (g) To prepare for approval by the Council an annual
Philippines on recommendation of the Secretary of Labor. report to the President on plans, programs and
The Secretariat shall be under the administrative projects on manpower and out-of-school youth
supervision of the Secretary of Labor and shall have an developments;
(h) To enter into agreements to implement approved (b) An “apprentice” is a worker who is covered by a written
plans and programs and perform any and all such acts apprenticeship agreement with an individual employer
as will fulfill the objectives of this Code as well as or any of the entities recognized under this Chapter.
ensure the efficient performance of the functions of (c) An “apprenticeable occupation” means any trade, form
the Council; and of employment or occupation which requires more
(i) To perform such other functions as may be authorized than three (3) months of practical training on the job
by the Council. supplemented by related theoretical instruction. (See
Sec. 4[m] R.A. No. 7796, TESDA law.)
Art. 54. Regional Manpower Development Offices – The (d) “Apprenticeship agreement” is an employment contract
council shall create regional manpower development wherein the employer binds himself to train the
offices which shall determine the manpower needs of apprentice and the apprentice in turn accepts the terms
industry, agriculture and other sectors of the economy of training.
within their respective jurisdiction; provide the Council
central planners with the data for updating the National Art. 59. Qualifications of Apprentice – To qualify as an
Manpower plan; recommend programs for the regional apprentice, a person shall:
level agencies engaged in manpower and youth (a) Be at least fourteen (14) years of age;
development within the policies formulated by the Council; (b) Possess vocational aptitude and capacity for
and administer and supervise Secretariat training program appropriate tests; and
within the region and perform such other functions as may (c) Possess the ability to comprehend and follow oral and
be authorized by the Council. written instructions.
APPRENTICESHIP AND LEADERSHIP Trade and industry associations may recommend to the
Secretary of Labor appropriate educational requirements
Art. 55. Consultants and Technical Assistance, for different occupations.
Publication and Research – In pursuing its objectives, the
Council is authorized to set aside a portion of its EMPLOYMENT OF ALIENS
appropriation for the hiring of the services of qualified
consultants, and/or private organizations for research Art. 40. Employment Permit of Non-Resident Aliens –
work and publication. It shall avail itself of the services of Any alien seeking admission to the Philippines for
the Government as may be required. employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in
Art. 56. Rules and Regulations – The Council shall define the Philippines shall obtain an employment permit from the
its broad functions and issue appropriate rules and Department of Labor.
regulations necessary to implement the provisions of this
Code. The employment permit may be issued to a non-
resident alien or to the applicant employer after a
Art. 57. Statement of Objectives – This Title aims: determination of the non-availability of a person in the
(1) To help meet the demand of the economy for trained Philippines who is competent, able and willing at the time
manpower; of application to perform the services for which the alien is
(2) To establish a national apprenticeship program desired.
through the participation of employers, workers and
government and non-government agencies; and For an enterprise registered in preferred areas of
(3) To establish apprenticeship standards for the investments, said employment permit may be issued upon
protection of apprentices. recommendation of the government agency charged with
the supervision of said registered enterprise.
Art. 58. Definition of Terms – As used in this Title:
(a) “Apprenticeship” means practical training on the job Art. 41. Prohibition Against Transfer of Employment
supplemented by related theoretical instruction. (a) After the issuance of an employment permit, the alien
shall not transfer to another job or change his

employer without prior approval of the Secretary of question of availability of local workers. The
Labor. constitutional validity of legal provisions granting such
(b) Any non-resident alien who shall take up employment jurisdiction and authority and requiring proof of non-
in violation of the provision of this Title and its availability of local nationals able to carry out the duties
implementing rules and regulations shall be punished of the position involved, cannot be seriously
in accordance with the provisions of Articles 289 and questioned.
290 [now 303 and 304] of the Labor Code. o In the first place, the second paragraph of Article 40
says: "[t]he employment permit may be issued to a non-
In addition, the alien worker shall be subject to deportation resident alien or to the applicant employer after a
after service of his sentence. determination of the non-availability of a person in the
Philippines who is competent, able and willing at the
Art. 42. Submission of List – Any employer employing time of application to perform the services for which
non-resident foreign nationals on the effective date of this the alien is desired." The permissive language
Code shall submit a list of such nationals to the Secretary of employed in the Labor Code indicates that the authority
Labor within thirty (30) days after such date indicating granted involves the exercise of discretion on the part
their names, citizenship, foreign and local addresses, nature of the issuing authority.
of employment and status of stay in the country. The
Secretary of Labor shall then determine if they are entitled ISAE v. Quisumbing
to an employment permit. o Salaries should not be used as an enticement to the
prejudice of local-hires. The local-hires perform the
Employment of Aliens same services as foreign-hires and they ought to be paid
o Article 40 requires only non-resident aliens to secure the same salaries as the latter.
employment permit. Resident aliens are not so
required. McBurnie v. Ganzon
o For immigrants and resident aliens, what is required o A requirement for foreigners who intend to work
is an Alien Employment Registration Certificate within the country is an employment permit, as
(AERC). provided under Article 40, Title II of the Labor Code
which states: “Employment permit for non-resident
Anti-Dummy Law (C.A. No. 108, as amended by P.D. No. aliens. Any alien seeking admission to the Philippines
715) for employment purposes and any domestic or foreign
o Foreigners may not be employed in certain employer who desires to engage an alien for
“nationalized” business. employment in the Philippines shall obtain an
o Prohibits employment of aliens in entities that own employment permit from the Department of Labor.”
or control a right, franchise, privilege, property or
business whose exercise or enjoyment is reserved PRE-EMPLOYMENT
by law only to Filipinos or to corporations or
associations whose capital should be at least 60% o Republic Act No. 8042, Migrant Workers and
Filipino-owned. Overseas Filipinos Act, as amended by Republic Act
§ The same 60% requirement applies to financing No. 10022
companies.
Principles and Definitions
General Milling v. Torres Art. 12 – Statement of objectives. It is the policy of the

o The Labor Code itself specifically empowers State:
respondent Secretary to make a determination as to the
availability of the services of a "person in the a. To promote and maintain a state of full employment
Philippines who is competent, able and willing at the through improved manpower training, allocation
time of application to perform the services for which an and utilization;
alien is desired." In short, the Department of Labor is
the agency vested with jurisdiction to determine the
b. To protect every citizen desiring to work locally or placement activities as a private recruitment
overseas by securing for him the best possible terms entity.
and conditions of employment; g. “Seaman” means any person employed in a vessel
c. To facilitate a free choice of available employment engaged in maritime navigation.
by persons seeking work in conformity with the h. “Overseas employment” means employment of a
national interest; worker outside the Philippines.
d. To facilitate and regulate the movement of workers i. “Emigrant” means any person, worker or
in conformity with the national interest; otherwise, who emigrates to a foreign country by
e. To regulate the employment of aliens, including the virtue of an immigrant visa or resident permit or its
establishment of a registration and/or work permit equivalent in the country of destination.
system;
f. To strengthen the network of public employment Art. 34. Prohibited Practices – It shall be unlawful for any
offices and rationalize the participation of the individual, entity, licensee, or holder of authority:
private sector in the recruitment and placement of
workers, locally and overseas, to serve national a. To charge or accept, directly or indirectly, any amount
development objectives; greater than that specified in the schedule of allowable
g. To insure careful selection of Filipino workers for fees prescribed by the Secretary of Labor, or to make a
overseas employment in order to protect the good worker pay any amount greater than that actually
name of the Philippines abroad. received by him as a loan or advance;
b. To furnish or publish any false notice or information or
Art. 13. Definitions – document in relation to recruitment or employment;
c. To give any false notice, testimony, information or
a. “Worker” means any member of the labor force, document or commit any act of misrepresentation for
whether employed or unemployed. the purpose of securing a license or authority under this
b. “Recruitment and placement” refers to any act of Code.
canvassing, enlisting, contracting, transporting, d. To induce or attempt to induce a worker already
utilizing, hiring or procuring workers, and includes employed to quit his employment in order to offer him
referrals, contract services, promising or to another unless the transfer is designed to liberate the
advertising for employment, locally or abroad, worker from oppressive terms and conditions of
whether for profit or not: Provided, That any employment;
person or entity which, in any manner, offers or e. To influence or to attempt to influence any person or
promises for a fee, employment to two or more entity not to employ any worker who has not applied
persons shall be deemed engaged in recruitment for employment through his agency;
and placement. f. To engage in the recruitment or placement of workers
c. “Private fee-charging employment agency” means in jobs harmful to public health or morality or to the
any person or entity engaged in recruitment and dignity of the Republic of the Philippines;
placement of workers for a fee which is charged, g. To obstruct or attempt to obstruct inspection by the
directly or indirectly, from the workers or Secretary of Labor or by his duly authorized
employers or both. representatives;
d. “License” means a document issued by the h. To fail to file reports on the status of employment,
Department of Labor authorizing a person or entity placement vacancies, remittance of foreign exchange
to operate a private employment agency. earnings, separation from jobs, departures and such
e. “Private recruitment entity” means any person or other matters or information as may be required by the
association engaged in the recruitment and Secretary of Labor.
placement of workers, locally or overseas, without i. To substitute or alter employment contracts approved
charging, directly or indirectly, any fee from the and verified by the Department of Labor from the time
workers or employers. of actual signing thereof by the parties up to and
f. “Authority” means a document issued by the including the periods of expiration of the same without
Department of Labor authorizing a person or the approval of the Secretary of Labor;
association to engage in recruitment and
j. To become an officer or member of the Board of any the closure of companies, establishments and entities found
corporation engaged in travel agency or to be engaged to be engaged in the recruitment of workers for overseas
directly or indirectly in the management of a travel employment, without having been licensed or authorized to
agency; and do so.
k. To withhold or deny travel documents from applicant
workers before departure for monetary or financial Art. 39 – Penalties.
considerations other than those authorized under this
Code and its implementing rules and regulations. a. The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P1000,000.00) shall be
Art. 35. Suspension and/or Cancellation of License or imposed if illegal recruitment constitutes economic
Authority – The Minister of Labor shall have the power to sabotage as defined herein;
suspend or cancel any license or authority to recruit b. Any licensee or holder of authority found violating or
employees for overseas employment for violation of rules causing another to violate any provision of this Title or
and regulations issued by the Ministry of Labor, the its implementing rules and regulations shall, upon
Overseas Employment Development Board, or for violation conviction thereof, suffer the penalty of imprisonment
of the provisions of this and other applicable laws, General of not less than two years nor more than five years or a
Orders and Letters of Instructions. fine of not less than P10,000 nor more than P50,000, or
both such imprisonment and fine, at the discretion of
Art. 38. Illegal Recruitment – the court;
a. Any recruitment activities, including the prohibited c. Any person who is neither a licensee nor a holder of
practices enumerated under Article 34 of this Code, to be authority under this Title found violating any provision
undertaken by non-licensees or non-holders of authority, thereof or its implementing rules and regulations shall,
shall be deemed illegal and punishable under Article 39 of upon conviction thereof, suffer the penalty of
this Code. The Department of Labor and Employment or any imprisonment of not less than four years nor more than
law enforcement officer may initiate complaints under this eight years or a fine of not less than P20,000 nor more
Article. than P100,000 or both such imprisonment and fine, at
the discretion of the court;
b. Illegal recruitment when committed by a syndicate or in d. If the offender is a corporation, partnership, association
large scale shall be considered an offense involving or entity, the penalty shall be imposed upon the officer
economic sabotage and shall be penalized in accordance or officers of the corporation, partnership, association
with Article 39 hereof. or entity responsible for violation; and if such officer is
an alien, he shall, in addition to the penalties herein
Illegal recruitment is deemed committed by a prescribed, be deported without further proceedings;
syndicate if carried out by a group of three (3) or more e. In every case, conviction shall cause and carry the
persons conspiring and/or confederating with one automatic revocation of the license or authority and all
another in carrying out any unlawful or illegal the permits and privileges granted to such person or
transaction, enterprise or scheme defined under the entity under this Title, and the forfeiture of the cash and
first paragraph hereof. Illegal recruitment is deemed surety bonds in favor of the Overseas Employment
committed in large scale if committed against three (3) Development Board or the National Seamen Board, as
or more persons individually or as a group. the case may be, both of which are authorized to use the
same exclusively to promote their objectives.
c. The Secretary of Labor and Employment or his duly
authorized representatives shall have the power to cause Regulation of Recruitment and Placement Activities
the arrest and detention of such non-licensee or non-holder
of authority if after investigation it is determined that his Art. 16. Private Recruitment – Except as provided in
activities constitute a danger to national security and public Chapter II of this Title, no person or entity other than the
order or will lead to further exploitation of job-seekers. The public employment offices, shall engage in the recruitment
Secretary shall order the search of the office or premises and placement of workers.
and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and
Art. 18. Ban on Direct Hiring – No employer may hire a Art. 30. Registration Fees – The Secretary of Labor shall
Filipino worker for overseas employment except through promulgate a schedule of fees for the registration of all
the Boards and entities authorized by the Secretary of applicants for license or authority.
Labor. Direct hiring by members of the diplomatic corps,
international organizations and such other employers as Art. 31. Bonds – All applicants for license or authority shall
may be allowed by the Secretary of Labor is exempted from post such cash and surety bonds as determined by the
this provision. Secretary of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms
Art. 25. Private Sector Participation in the Recruitment and conditions of employment as may be appropriate.
And Placement of Workers – Pursuant to national
development objectives and in order to harness and Art. 32. Fees to be Paid By Workers – Any person applying
maximize the use of private sector resources and initiative with a private fee-charging employment agency for
in the development and implementation of a employment assistance shall not be charged any fee until he
comprehensive employment program, the private has obtained employment through its efforts or has actually
employment sector shall participate in the recruitment and commenced employment. Such fee shall be always covered
placement of workers, locally and overseas, under such with the appropriate receipt clearly showing the amount
guidelines, rules and regulations as may be issued by the paid. The Secretary of Labor shall promulgate a schedule of
Secretary of Labor. allowable fees.
Art. 26. Travel Agencies Prohibited to Recruit – Travel Art. 33. Reports on Employment Status – Whenever the
agencies and sales agencies of airline companies are public interest requires, the Secretary of Labor may direct
prohibited from engaging in the business of recruitment all persons or entities within the coverage of this Title to
and placement of workers for overseas employment submit a report on the status of employment, including job
whether for profit or not. vacancies, details of job requisitions, separation from jobs,
wages, other terms and conditions and other employment
Art. 27. Citizenship Requirement – Only Filipino citizens data.
or corporations, partnerships or entities at least seventy-
five percent (75%) of the authorized and voting capital Contracts
stock of which is owned and controlled by Filipino citizens Labor Code: Art. 34-35
shall be permitted to participate in the recruitment and
placement of workers, locally or overseas. Government Machinery
Labor Code: Articles 14-21, 24
Art. 28. Capitalization – All applicants for authority to hire Executive Order 257 (POEA Organization) Presidential
or renewal of license to recruit are required to have such Decree 1694
substantial capitalization as determined by the Secretary of BP 79
Labor.
Dispute Settlement
Art. 29. Non-Transferability of License or Authority – No Labor Code: Articles 36-37
license or authority shall be used directly or indirectly by
any person other than the one in whose favor it was issued People v. Diaz
or at any place other than that stated in the license or o A non-licensee or non-holder of authority means any
authority be transferred, conveyed or assigned to any other person, corporation or entity which has not been issued
person or entity. Any transfer of business address, a valid license or authority to engage in recruitment and
appointment or designation of any agent or representative placement by the Secretary of Labor, or whose license
including the establishment of additional offices anywhere or authority has been suspended, revoked or cancelled
shall be subject to the prior approval of the Department of by the POEA or the Secretary.
Labor. o In this case, Diaz was neither a licensee nor a holder of
authority to qualify him to lawfully engage in the
recruitment and placement activity. Pursuant to the
Certification issued by the POEA, appellant was never
granted an authority to conduct recruitment for for profit or not; provided, that any person or entity
overseas employment. Lastly, there were three persons which, in any manner, offers or promises for a fee
who were victims of the appellant’s act of large-scale employment to two or more persons shall be deemed
illegal recruitment. Hence, Diaz is guilty of large-scale engaged in recruitment and placement. (Article 13(b),
illegal recruitment. Labor Code.) Referral is the act of passing along or
forwarding of an applicant for employment after an
Aquino v. CA initial interview of a selected applicant for employment
o For purposes of criminal prosecutions, the receipt of to a selected employer, placement officer or bureau.
payments after the expiration of the license, for services
rendered before said expiration does not constitute Darvin v. CA
illegal recruitment. Recruitment refers to the ordering To be convicted of illegal recruitment, the elements must be
of inducements to qualified personnel to enter a proven:
particular job or employment. The advertising, the a) The person charged must have undertaken
promise of future employment and other come-ons recruitment activities;
took place while Ms. Aquino was still licensed. It is b) b) And the said person does not have a license or
asking too much to expect a licensed agency to stop all authority to do so.
transactions at the stroke of midnight on the day its
license expires. In any business, there has to be a o Following the ruling in People v. Goce , to prove that an
winding-up after it ceases operations. accused was engaged in recruitment activities so as to
commit the crime of illegal recruitment, it must be
People v. Señoron shown that the accused gave the offended party the
o To prove illegal recruitment, two elements must be distinct impression that the accused had the power or
shown, namely: (1) the person charged with the crime ability to send the same abroad for work.
must have undertaken recruitment activities, or any of
the activities enumerated in Article 34 of the Labor People v. Yabut
Code, as amended; and (2) said person does not have a
license or authority to do so. o Conviction for offenses under the Labor Code does not
o it is not the issuance or signing of receipts for the bar a conviction for offenses punishable by other laws.
placement fees that makes a case for illegal Conversely, conviction for estafa under par. 2 (a) of Art.
recruitment, but rather the undertaking of recruitment 315 of the Revised Penal Code does not bar a conviction
activities without the necessary license or authority. for illegal recruitment under the Labor Code. It follows
that one's acquittal of the crime of estafa will not
People v. Panis necessarily result in his acquittal of the crime of illegal
o Article 13 (b) was intended neither to impose a recruitment in large scale, and vice versa.
condition on the basic rule nor to provide an exception
thereto but merely to create a presumption. The People v. Saulo
presumption is that the individual or entity is engaged o The Labor Code states that "any person or entity which,
in recruitment and placement whenever he or it is in any manner, offers or promises for a fee employment
dealing with two or more persons to whom, in to two or more persons shall be deemed engaged in
consideration of a fee, an offer or promise of recruitment and placement." Corollarily, a non-licensee
employment is made in the course of the "canvassing, or non-holder of authority is any person, corporation or
enlisting, contracting, transporting, utilizing, hiring or entity which has not been issued a valid license or
procuring (of) workers." authority to engage in recruitment and placement by
the Secretary of Labor, or whose license or authority
People v. Goce has been suspended, revoked, or canceled by the POEA
o Under the Labor Code, recruitment and placement or the Secretary. It also bears stressing that agents or
refers to any act of canvassing, enlisting, contracting, representatives appointed by a licensee or a holder of
transporting, utilizing, hiring or procuring workers, authority but whose appointments are not previously
and includes referrals, contract services, promising or authorized by the POEA fall within the meaning of the
advertising for employment, locally or abroad, whether term nonlicensee or nonholder of authority. Thus, any
person, whether natural or juridical, that engages in
recruitment activities without the necessary license or
authority shall be penalized under Art. 39 of the Labor
Code.
Athenna International Manpower Services, Inc. Villanos

Monetary claims:
o Section 10 of RA. No. 8042 provides that in case of
termination of overseas employment without just,
valid, or authorized cause as defined by law or contract,
the worker shall be entitled to the full reimbursement
of his placement fee with interest at 12% per annum,
plus his salaries for the unexpired portion of his
employment contract or for 3 months for every year of
the unexpired term, whichever is less.
Rodolfo v. People
o The act of recruitment may be "for profit or not." It is
sufficient that the accused "promises or offers for a fee
employment" to warrant conviction for illegal
recruitment.

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PRELIMINARY PERIOD 5.

o Goals: Calalang v. Williams *

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

PROPER STANDARD FOR ECONOMIC DEPENDENCE * Villamaria v. CA

DOLE D.O. No. 18-A, s. 2011 Job Contractor Contractual Employees

INDEPENDENT CONTRACTOR * EER may be declared to exist between the principal

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Babas v. Lorenzo Shipping Corporation RIGHTS OF CONTRACTOR’S EMPLOYEES (SLR-SSS) *

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

For Wages and Money Claims * CLASSES OF EMPLOYEES

KINDS OF EMPLOYMENT NOTE: The practice of entering into employment contracts

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Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Seasonal Employees as Regular Employees * Paz v. Northern Tobacco Redrying,. Inc.

Casual Employees becoming Regular Employees * Decisive Determinant in Term Employment

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

• FINALS PERIOD Twin Attributes of Wages

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F&R Value of Board, Lodging or Other Facilities

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Charging of Cost of Facilities Supplements Not Part of Wages

Voluntary Acceptance of Facilities Criterion in Determining Whether an Item is a

NATIONAL WAGES AND PRODUCTIVITY COMMISSION NOTE: Applies to pakyaw basis

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Irrespective of Ex. Php 30,000/ mo.

2. When given? 30,000 = Php 25,000

3. What is Rank and File? XPNs: (G-13-P-CBTF)

SERVICE CHARGE Art. 4, Labor Code

fArt. 96df Art. 110 – Worker Preference in case of BANKRUPTCY,

o Insolvency – there must be notice to all creditors WORKING CONDITIONS

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Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

B. Preliminary and Postliminary Activities § Compensable: if sleeping time is subject to serious

3. Strikes Non- Compensability of The Meal Period

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Scenarios Rada v. NLRC

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Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

The EE who had not been Categories:

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

o Piece-rate employees are entitled to night-shift SPECIAL GROUP OF EMPLOYEES

Labor Congress of the Philippines v. NLRC Art. 137 – Prohibited acts

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

APEX Mining Company v. NLRC Qualified Individual with a Disability

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

General Milling v. Torres Art. 12 – Statement of objectives. It is the policy of the

Athenna International Manpower Services, Inc. Villanos

Macalalad M. (UST LAW - 2C, 2020-2021) - LABOR LAW 1 REVIEWER [JOLK]

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