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Introductory Materials
general welfare are essential for the enjoyment by all the people
of the blessing of democracy.
2. Art. II, Sec. 18, Const. : The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
The SC reaffirms its concern for the lowly worker who, often at the
mercy of his ER, must look up to the law for protection. Fittingly, the
law regards him with tenderness and even favor and always with
hope in his capacity to help in shaping the nation’s future. It is an
error to take him for granted. (Cebu Royal Plant vs. Deputy Minister of
Labor)
1. Art. II, Sec. 9, Const. : The State shall promote a just and
dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty
through policies that provide adequate social services, promote
full employment, a rising standard of living, and an improved
quality of life for all.
2. Art. II, Sec. 10, Const. : The State shall promote social justice
in all phases of national development.
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3. Art. II, Sec. 13, Const. : The State recognized the role of the
youth in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. . .
4. Art. II, Sec. 14, Const. : The State recognizes the role of
women in nation-building, and shall ensure their fundamental
equality before the law of women and men.
5. Art. II, Sec. 18, Const. : The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
9. Art. XIII, Sec. 11, Const. : The State shall adopt an integrated
and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost . . .
10. The present Constitution has gone further than the 1973
Constitution in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. The framers of
the Constitution intended to give primacy to the rights of labor
and afford the sector “full protection” regardless of the
geographical location of the workers and whether they are
organized or not (Globe Mackay vs. NLRC).
* The law, while protecting the rights of laborers, does not authorize
the oppression or destruction of the employer
Laissez Faire
1. Laissez faire or the principle of free enterprise never found full
acceptance in this jurisdiction . . . (ACCFA vs. CUGCO)
1. Art. II, Sec. 18, Const. : The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
1. Art. II, Sec. 10, Const. : The State shall promote social justice in
all phases of national development.
Definition [H, E, P, A]
Limits of Use
* Art. XIII, Sec. 3, Const. : [In the relation between workers and ER’s
the following rights shall be assured by the State:
a. Rights to self-organization
b. Right to collective bargaining
c. Right to collective negotiations
d. Right to peaceful and concerted Activities including the
right to strike
e. Right to security of Tenure
f. Right to just and humane Conditions of work
g. Right to a living Wage
h. Right to participate in policy and Decision-making
processes (WACT BOND)
1. The law must protect labor, at least to the extent of raising him
to equal footing in bargaining relations with capital and to shield
him from abuses brought about by the necessity for survival. It is
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2. Art. III, Sec. 16, Const. : All persons shall have the right to a
speedy disposition of their cases before all judicial, quasi-judicial
or administrative bodies.
3. Art. III, Sec. 18 (2), Const. : No involuntary servitude in any
form shall exist except as a punishment for a crime whereof the
party shall have been duly convicted.
Labor as Property
MGT. Rights [C P S T]
1. Right to conduct business
2. Right to prescribe rules
3. Right to select employees
4. Right to transfer and discharge employees
1. It is only when there is clear proof that the waiver was wangled
an unsuspecting person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction.
2. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding
undertaking. (Sicangco vs. NLRC)
3. Should a party fail or refuse to comply with the terms of a valid
compromise or amicable settlement, the other party could either
enforce the compromise by a writ of execution, or regard it as
rescinded and to insist upon his original demand. (Morales vs.
NLRC)
- Voluntary consideration – not unconscionable
- Waiver of future benefits is not valid and binding
- The law does not consider as valid any agreement
a. to receive less compensation on what a worker is
entitled to recover
b. to prevent him from demanding benefits to which
he is entitled
2. Bank and EE’s association, entered into a CBA providing for the
withdrawal of the pending case of the association against the
bank for non-payment of Php60.00 ECOLA. There is nothing in
the compromise which contravenes the law, morals, good
customs, public order, or public policy. (Monte de Piedad vs. MOLE)
the Labor Arbiter has the effect and authority of res judicata.
(Olaybar vs. NLRC)
Management Prerogatives
1. Right to select and discharge employees – with valid cause
2. promulgate reasonable employment rules and regulation
3. designation of work to employees
4. transfer and promote employees
5. control company operations
6. install money-saving devices
7. re-clarify or abolish positions
8. sell or close business
Drug Testing
G. R. : cannot – right to privacy
Exception:
- if job or occupation involve public safety
Ex.ample:
a. bus drivers
b. security guards
3. 1 Role of Law
1. Art. 1700, NCC : The relation between capital and labor are
merely contractual. They are so impressed with public interest
that labor contracts must yield to common good. Therefore, such
contracts are subject to special laws on labor unions, collective
bargaining, strikes, lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.
* Art. 1701 : Neither capital nor labor shall act oppressively against
the other, or impair the convenience of the public.
Fair Treatment
* The NCC states that every person must in the exercise of his rights,
and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith. (AHS Phils. vs. NLRC)
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Law Compliance
ER Obligation
4. 3 Applicability
1. Art. 6: All rights and benefits granted under this Code shall,
except as many otherwise be provided, apply alike to all workers,
whether agricultural, or non-agricultural.
3. Art. IX-B, Sec. 2(1), Const. :The Civil Service embraces all
branches of Government, including GOCC’s with original
charters.
Test-GOCC
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1. The rule now is that only the GOCC’s with original charters come
under the Civil Service Law. (Cabrera vs. NLRC)
2. Art. 1702, NCC : In case of doubt, all labor legislation and labor
contracts shall be construed in favor of the safety and decent
living of the laborer.
In Favor Labor-Rationale
Liberal Construction
* Are the provisions violative of the equal protection clause? No. The
ER and the laborer do not stand on equal footing; to ensure
equality, the latter must, be afforded protection. Insofar as labor
contracts are concerned, the same are usually drafted and prepared
by the ER. All doubts in their provisions should therefore be
resolved against it. (Alcantara)
Doubt
No doubt
* The provision in case of doubt does not apply where the pertinent
provisions of the Labor Code leave no room for doubt either in their
interpretation or application. (Bonifacio vs. GSIS)
Sweeping Interpretation
* The care and solitude in the protection and vindication of the right of
workingmen cannot justify disregard of relevant facts or schewal of
rationality in the construction of the text of applicable rules in order to
arrive at disposition in favor of an EE. (PAL vs. NLRC)
1. Art. 217 (a) (2), (3), (4), (6): Jurisdiction of Labor Arbiters and
the Commission
1. The Labor Arbiters shall have exclusive and original jurisdiction,
except as otherwise provided, the following cases involving all
workers: (unfair labor practice)
2. Termination disputes (qualified by Art. 261 which grant voluntary
arbitrators original and exclusive jurisdiction over all unresolved
grievances arising from CBAs and company personnel policies);
3. Cases involving terms and conditions of employment, if
accompanied with a claim for reinstatement (including claims of
OFW’s arising out of an ER-EE relationship, including claims for
actual, moral and exemplary damages, as provided in Sec. 10,
Migrant Workers Act);
4. Claims for actual, moral, exemplary and other damages arising
from the ER-EE relations;
5. Except claims for EE’s Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from the ER-EE
relations; including
- those of persons in domestic or household service,
involving an amount exceeding Php5,000, regardless of
whether of whether accompanied with a claim for
reinstatement.
6. Disputes arising from Art. 264 including legality of strikes and
lockouts
5. Art. 289 : The penalty (of the offenses listed in the Labor Code)
shall be imposed upon the guilty officer of officers of a corporation,
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5. 1 Work Relationship
ER and EE
2. Art. 167 (f) and (g) : (f) “ER” means any person, natural or
juridical, employing the services of the EE.
(g) “EE” means any person compulsory covered by the
GSIS . . ., including members of the AFP, and any person
employed as casual, emergency, temporary, substitute or
contractual, or any person compulsory covered by the SSS. . .
3. Art. 212 (e) and (f) : “ER” includes any person acting in the
interest of the ER directly or indirectly. The term shall not include
any labor organization or any of its officers except when acting
as an ER.
(f) “EE” includes any person in the employ of an ER. The term
shall not be limited to the EE’s of a particular ER, unless this
Code explicitly states. It shall include any individual whose work
has ceased as a result or in connection with any current labor
dispute or because of unfair labor practice if he has not obtained
any other substantially equivalent or regular employment.
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CLASSIFICATION
1. casual
2. regular
3. emergency
4. temporary
5. substitute
6. contractual
2. Sec. 9, Rule VIII, Book III, IRR’s : (a) Any person who
undertakes to supply workers to an ER shall be deemed to be
engaged in labor-only contracting where such person :
* Does not have
substantial capital
[substantial] investment in the form of tools, equipment,
machineries, work premises and other materials; and
* The workers recruited and placed by such person are performing
activities which are directly related to the principal business or
operations of the ER in which the workers are habitually employed.
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(c) For cases not falling under this Article, the Secretary of Labor shall
determine through whether or not the contracting out is permissible in
the light of the circumstances of each case and after considering the
operating needs of the ER and the rights of the workers involved.
A. DETERMINATION
B. FACTORS
* Piece workers subject to specifications. Yes. The fact that the making
of the basket is subject to Dy’s specifications indicates the existence of
control. (Dy Koh Beng vs. ILMU)
* Shoe shiners who had their own customers but shared proceeds with
company. No. The company does not exercise any degree of control or
supervision over his work. The shoe shiner is a partner in trade. (Besa
vs. Trajano)
* The power of control refers merely to the existence of the power and
not the actual exercise thereof.
* Caddles who are not under the control and supervision of the golf
club as to working hours, manner of carrying out their services, etc.
No. The club did not have the measure of control over the incidents of
the caddy’s work and compensation that the ER would possess. (Manila
vs. IAC)
* Jeepney drivers working under the boundary system. Yes. The driver
does not have any interest in the business because he did not invest
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C. CONTROL TEST
D. ECONOMIC TEST
E. AGREEMENT
With respect to the first requirement, the law does not require both
substantial capital and investment in the form of tools, equipment,
machineries, etc. This is clear from the use of the conjunction “or”.
(Neri vs. NLRC)
various clients and pull them out. CSI was a registered service
contractor and did business with a number of known companies in the
country. It maintains its own office and had its own office equipment. It
furnishes its janitors the cleaning equipment. (Rhone-Poulene vs. NLRC)
6. 1 Employment Policies
A. PARTIES
A.1. Worker
A.2 Agency
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A.3 Entity
B. ALLOWED ENTITIES
C.2 Bonds
** Illegal termination
- full reimbursement fees + 12%
- salaries for unexpired portion or 3 mos. For every year of
unexpired term – whichever is lower
6. NATO, a national union of teachers was able to find jobs abroad for
its member by directly contacting other teachers organizations in
foreign countries, without charging additional fees. Is this legal? No.
Only persons or entities with appropriate license or authority can
engage in recruitment and placement of workers. Contact services are
activities that fall within the scope of recruitment and placement of
workers. (Alcantara)
* The Secretary of Labor and Employment has the power and authority
not only to restrict and regulate the recruitment and placement
activities of all agencies but also promulgate rules and regulations to
carry out the objectives and implement the provisions governing said
activities. (Eastern Assurance vs. Secretary of Labor)
C. 8 Enforcement
1. Art. 14 (a) : The Secretary of Labor shall have the power and
authority: (a) To organize and establish new employment
agencies in addition to the existing employment offices under
the DOLE as the need arises.
B. Definition of Terms
Sec. 1 (j), (w), (z), (ff), and (qq), Rule II, Book I, Rules and
regulations on Overseas Employment –
6. 3 Sanctions
* Illegal recruitment:
a. imprisonment of not less than 6 years and 1 day but not
more than 12 years and
b. a fine of not less than P200,000.00 nor more than
P500,000.00.
5. Art. 38 (c) of the Labor Code granting the Secretary of Labor the
power to issue search or arrest warrants is declared
unconstitutional and null and void. (Salazar vs. Achacoso)
Art. 288 : Any alien found guilty shall be summarily deported upon
completion of service of sentence.
Coverage
Policy Objectives
Definition
- 1 month probation
- prior approval by TESDA of the proposed apprenticeship
program is a condition sine qua non before an
apprenticeship can be validly entered into
- employer is not obliged to employ the apprentice after the
completion of his training
B. LEARNERS
- Learnership programs must be approved by TESDA
C. HANDICAPPED WORKERS
Conditions of Employment
- not exceed 8 hours
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- allowed overtime
* Art. 61 :
1. Period of apprenticeship shall not exceed 6 months.
2. Wages shall not start below 75% of the minimum wage.
3. Apprenticeship program must be duly approved by TESDA or
apprentices becomes regular EE. This must be evidenced by an
apprenticeship agreement. (Nitto Enterprises vs. NLRC)
3. Qualifications of an Apprentice:
a. At least 15 years of age: provided, those below 18
years of age shall not work in hazardous
occupations;
b. Be physically fit for the occupation.
c. Possess vocational aptitude and capacity.
d. Possess the ability to comprehend, and follow oral
and written instructions. (Sec. 11, Rule VI, Book III,
IRR’s)
EMPLOYER
a. habitual absentism
b. willful disobedience e.g. rules
c. insubordination – lawful order
d. poor physical conditions – apprentice
e. theft or malicious destruction
f. poor efficiency of performance
g. engaging in violence
h. gross misconduct
i. bad health or continuing illness. (Sec. 25, Rule VI, Book II,
IRR’s)
B. LEARNERS
- learnership must be approved by TESDA
1. Art. 75 :
1. Duration of the learnership period shall be 3 months;
2. Wages and salary rates begin at not less than 75% minimum
wage; and
3. A commitment to employ learners if they so desire, as regular
EE’s upon completion of the learnership.
All learners who have been allowed or suffered work during
the first 2nd months to be deemed EE’s training is
terminated by the ER before the end of the stipulated
period though no fault of the learner.
C. HANDICAPPED WORKERS [A P M I]
1. Art. 80 :
Rates to be paid to handicapped workers shall not be less
than 75% of the applicable minimum wage.
Employment agreement must state the duration of the
employment period and the work to be performed.
2. Art. 81 : Handicapped workers may be hired as apprentices or
learners if their handicap is not such as to effectively impede the
performance of job operations in the particular occupations for
which they are hired.
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Enforcement
9. 1 Hours Regulation
* The 8-hour labor law was designed not only to safeguard the health
and welfare of the laborer but in a way to minimize unemployment by
forcing ER’s, in cases, where more than an 8-hour operations is
necessary, to utilize different shifts of laborers working only for 8 hours
each. (Manila Terminal vs. CIR)
9.2 Coverage
6. And workers who are paid by results. [Including those who are
paid on piece-work, “takay”, “pakiao”, or task basis if their
output rates are in accordance with the standards prescribed.]
Waiting Time
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Idle Time
1. A laborer need not leave the premises of the factory, shop or
boat in order that his period of rest shall not be counted, it being
enough that he “cease to work”, may rest completely and leave
or may leave at his will the spot where he actually stays while
working, or go somewhere else, whether within or without the
factory, shop or boat. (Luzon Stevedoring vs. Luzon Marine Dept. Union)
Meal Time
1. Sec. 7, Rule I, Book III, IRR’s : Every ER shall give his EE’s not
less than 1 hour time-off for regular meals, except in the
following cases where a meal period of not less than 20 minutes
may be given by the ER provided
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On Call
Travel Time
***Principles which determine whether or not time spent in travel is working time:
Semestral Break
7. A was late for work on a particular day. To offset for the time he
was late, A worked on additional period equivalent to the period
he was late for work. The period was offset against A’ undertime.
Is this valid? Yes. The prohibition to offset overtime against
undertime applies to undertime incurred and overtime rendered
on different days.
Provisions for overtime covers both profit and non-profit
establishment or undertaking
For purposes of computing overtime
REGULAR WAGE – includes the cash wage only; without
deduction of facilities provided.
* The reasons for overtime pay is that the worker is made to work
longer than what is commensurate with the agreed compensation for
the statutorily fixed or voluntary agreed hours of labor he is supposed
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to do. When he thus spends additional time to his work, the effect
upon him is multi-faceted; he puts in more effort, physical or mental;
he is delayed in going home to his family to enjoy the comforts thereof;
he might have no time for relaxation, amusement or sports; he might
miss important pre-arranged arrangements. (PNB vs. PEMA)
Retail Establishment
- sale of goods for personal or household use
ex. grocery
Service Establishment
- sale of services to individuals for their own or household
use
ex. T.V. repair shop
Built-In Compensation
2. Sec. 1, Rule II, Book III, IRR’s : This rule shall apply to all EE’s
except:
[G R S D M F]
a. Those of the government and any of its political
subdivisions, including GOCC’s.
b. Retail and service establishments regularly employing not
more than 5 workers.
c. Domestic helpers and persons in the personal service of
another.
d. Managerial EE’s.
e. Field personnel and other EE’s whose time and
performance is unsupervised by the ER.
f. Includes task and contract basis
Rationale – Prohibition
Sec. 1, Rule III, Book III, IRR’s : This rule shall apply to all ER’s
whether operating for profit pr not, including public utilities
operated by private persons.
* The ER shall determine and schedule the weekly rest day of his
EE’s
However, the ER shall respect the preference of EE’s as to
their weekly rest day when such preference is based on
religion grounds.
Sec. 4, Rule III, Book III, IRR’s : Where however the choice of the
EE’s as to their rest day based on religious grounds will inevitably
result in serious prejudice or obstruction to the operation of the
undertaking, the ER may so schedule the weekday rest day of their
choice at least 2 days in a month.
11.1 Coverage
1. * Art. 94 : Every worker shall be paid his regular daily wage during
holidays, except: [RSIO, G, DH, M, FP]
a. in retail and service establishments regularly employing less than 10
workers;
Regular Holidays
1. New Years day
2. Maundy Thursday
3. Good Friday
4. Bataan Day
5. Labor day
6. Independence day
7. National heroes day
8. Bonifacio day
9. X-mas day
10. Rizal day
2. Monthly paid EE’s are not excluded from the benefits of holiday pay.
(Mantrade vs. Bacungan)
Divisor as Factor
12.1 Coverage
Coverage
12.2 Entitlement
- can be converted to cash
[The term ‘at least 1 year of service’ shall mean service within 12
months, whether continuous or broken, reckoned from the date the EE
started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contract are less
than 12 months, in which case said period shall be considered as 1
year. (Sec. 3, Rule V, Book III, IRR’s)
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2. Explain the rule “a fair day’s wage for a fair day’s labor”?
Unless specifically required by law, contract or established
policy, the ER is not bound to pay wages to a worker who has not
actually rendered any service.
No. They are still agricultural workers. They perform activities which
fall under the primary aspect of agriculture and the cutting of trees
to be used for fencing is incidental to the farming operations and
falls under the secondary aspect of agriculture.
Coverage
Minimum Wage
3. Art. 75 : Learners : Wage rates shall begin at not less than 75%
of the applicable minimum wage.
* The law guarantees the laborer a fair and just wage. The “minimum
wage” can by no means imply only the actual minimum. Some margin
or leeway must be provided, over and above the minimum, to take
care of contingencies, such as increase in wants, and to provide means
for a desirable improvement in his mode of living. (Atok-Big Wedge vs.
Atok-Big-Wedge Mutual Benefit Association)
B. SUPPLEMENTAL FACILITY
* The minimum wage law directly benefits the lowly paid EE’s who
receive inadequate wages on which they support themselves and their
families. It benefits all wage earners indirectly by setting a floor below
which their remuneration cannot fall. It increases the standard of
competition among ER’s since it would protect the fair-minded ER who
operates at lower costs by reason of paying his workers a wage below
subsistence. (Pp vs. Gatchalian)
G. BENEFITS
Yes. The company has the right to change the basis of the payment
of the wages of the workers. The workers would not suffer since it is
within their capability to clean and inspect the number of containers
to enable them to at least earn the rate they were receiving at the
time the change was effected. They cannot however be deprived of
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Methods of Fixing
Wage Distortion
Wage/Salary
Wage Payment
A. DIRECT PAYMENT
Wage Prohibition
A. WAGE DEDUCTION
2. The wife of an EE tells the manager that her husband has not
been giving her support. Taking pity, the manager instructs the
cashier to deduct 1/3 of the EE’s pay and give the same to the
wife. Is this valid?
No. The EE concerned did not give his written authorization for the
deduction. (Alcantara)
3. Z borrowed P500.00 from his ER. When the loan became due and
demandable, Z did not pay his ER. May the ER, without the
written authorization of Z, deduct the loan from the latter’s
wages?
Yes. Compensation can take place under Art. 1706 of the NCC.
(Alcantara)
B. CHECK-OFF
C. GARNISHMENT/ATTACHMENT
1. Under Art. 1708 of the NCC, “laborers’ wages shall not be subject
to execution or attachment, except for debts incurred for food,
shelter, clothing and medical attendance” (Pacific Customs vs. Inter-
Island Dockmen and Labor Union)
D. DEPOSIT
Art. 114 does not permit deposits for deficiency in the remittances
of drivers’ “boundary” but the requirement for deposit for car wash
payments is lawfull. (5-J Taxi vs. NLRC)
Prohibited Acts
A. RECORD KEEPING
Yes. Under Art. 107, the person, though not an ER, who contracts
with the independent contractor for the damages employed by the
latter are indirect ER’s. (Alcantara)
Extent of Liability
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1. The direct ER and the indirect ER are jointly and severally liable
to petitioners for the monetary claims. (Deferia vs. NLRC) For
purposes of determining the extent of their civil liability, they
shall be considered as direct ER’s. (Art. 109)
No, XYZ will still be liable for the unpaid wages of the janitor since
the obligation is imposed by law. (Id)
No. The janitors employed by ABC are considered indirect EE’s and
not to indirect EE’s coming from the private sector. (Rabago vs. NLRC)
Yes, under Art. 110 workers enjoy first preference as regards wages
owed them for services rendered during the period prior to the
bankruptcy or liquidation. (PCIB vs. National Mines and Allied Union)
No. Art. 110 does not create a lien in favor of the workers. (Alcantara)
Art. 110
establishes merely a rule of preference and does not
create a lien in favor of the workers
1. Art. 217 (a) (2), (3), (4), (6) : Jurisdiction of Labor Arbiters
and the Commission – The Labor Arbiters shall have exclusive
and original jurisdiction, except as otherwise provided, the
following cases involving all workers:
a. Termination Disputes (qualified by Art. 261which
grant voluntary arbitrators original and exclusive
jurisdiction over all unresolved grievances arising
from CBAS and company personnel policies);
b. Cases involving terms and conditions and
employment, if accompanied with a claim for
reinstatement (including claims of an ER-EE
relationship, including claims for actual, moral and
exemplary damages, as provided in Sec. 10,
Migrant Workers Act)
c. Claims for actual, moral, exemplary and other
damages arising from the ER-EE relations;
d. Except claims for EE’s Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from the ER- EE relations, including
4. Art. 111 :
In cases of unlawful withholding of wages the culpable
party may be assessed attorney’s fees equivalent to 10%
of the amount of wages recovered.
14. 1 Coverage
1. Section 1, Rule V, Book III, IRR’s : This rule shall apply only
to establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as
private subsidiaries of the Government.
2. Section 2, Rule VI, Book III : This rule shall apply to all EE’s of
covered ER’s except to managerial EE’s.
Managerial EE –
a. powers of prerogatives to lay down, and execute
management to lay don and execute management policies
and/or
b. hire, transfer, suspend, lay-off, recall, discharge, assign, or
discipline EE’s or to effectively recommend such
managerial actions.
Yes. In case the service charge is abolished, the share or the covered
EE’s shall be considered integrated in their wages. (Art. 96)
Coverage
2. Define basic salary: For purposes of computing the 13th month pay,
basic salary”
include remuneration or earnings paid by this ER for
services rendered
but does not include allowances and monetary benefits
which are not considered or integrated as part of the
regular or basic salary, such as the cash equivalent or
unused vacation and sick leave credits, overtime,
premium, night-differential and holiday pay, and cost-of-
living allowances.
• However, these salary-related benefits should be
included as part of the basic salary in the
computation of the 13th month pay if the individual
or collective agreement, company practice or
policy, the same are treated as part of the basic
salary of the EE’s.
Basic Wage
Substitute Payment
15. 3 Non-inclusion
Section 16 : Bonus
16. 1 Definition
1. Art. II, Sec. 14, Const. : The State recognizes the role of
women in nation-building, and shall ensure the fundamental
equality before the law of women and men.
17.2 Coverage
1. Section 1, Rule XII, Book III, IRR’s : This rule shall apply to all
ER’s except to:
a. government and GOCC’s and
b. to ER’s of household helpers and persons in their personal
service insofar as such workers are concerned
Yes. The women sewers, by reason of their sex, are denied the
opportunity to earn additional pay. The nature of the work requires
the manual skill and dexterity of women workers and cannot be
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B. DISCRIMINATION
C. MARRIAGE
D. GENERAL
Yes. It is both awkward and dangerous for her to dance during her
pregnancy. Of course the ER has the obligation to give her another
job, but as stated in the problem there is no other work for which
her talents are suited. It is not fair to require the ER to continue
employing her. (Alcantara)
Yes. The company has the prerogative to select its EE’s. What is
unlawful is for the ER to discriminate against or dismiss a woman by
reason of their pregnancy. (Alcantara)
17. 4 Facilities
Art. II, Sec. 13, Const. : The State recognized the role of the youth in
nation-building and shall promote and protect their physical, moral
spiritual, intellectual, and social well-being. It shall inculcate in the
youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.
18.2 Coverage
Section 1, Rule XII, Book III, IRR’s : This Rule shall apply to all ER’s
except
[G H]
1. to the Government and GOCC’s and
2. to ER’s of household helpers and persons in their personal
service insofar as such workers are concerned.
No. Such employment will endanger her health and impair her
normal development. She is also deprived of the opportunity to get
primary education as she is always traveling to different parts of the
country. (Alcantara)
18.4 Discrimination
19.1 Coverage
Art. 141 : This chapter shall apply to all persons rendering services in
households for compensation
19.2 Househelpers
For work rendered by the maids and the family driver, they should be
paid at the rate prescribed by law for non-agricultural workers.
(Alcantara) No household helper shall be assigned to work in a
commercial industrial or agricultural enterprise at a wage or salary
rates lower than that provided for agricultural or non-agricultural
workers as prescribed therein. (Art. 145)
Yes. The period contract exceeds the maximum set by the law. Art.
142 provides that the original contract of domestic service shall not
last for more than 2 years, although it may be renewed for such
periods as may be agreed upon by the parties. M’s contract will
therefore be good for only 2 years. (Alcantara)
20.1 ER
20.2 ER Liability
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Sears is jointly and severally liable if S is not able to pay the wages
of the homeworkers. (Sec. 8, Rule XIV, Book III, IRR’s)
Section 1, Rule I, Book IV, IRR’s “ This rule shall apply to all ER’s
whether operating for profit or not, including the Government ant
GOCC’s, which employ in any workplace 1 or more workers.
21.3 Administration
Art. 165 : (a) The DOLE shall be solely responsible for the
administration and enforcement of occupational safety and health
laws, regulations and standards in all establishments and workplaces
wherever they may be located.
Chartered cities may be allowed to conduct industrial
safety inspections of establishments within their respective
jurisdictions where they have adequate facilities and
competent personnel for the purpose as determined by the
DOLE and subject to national standards established by the
latter.
(b) The Secretary of Labor may, through appropriate
regulations, collect reasonable fees for the inspection of
steam boilers, pressure vessels and pipings and electrical
installations, the test and approval for safe use of materials,
equipment and other safety devices and the approval of plans
for such materials, equipment and devices. The fee so
collected expended exclusively for the administration and
enforcement of safety and other labor laws administered by
the DOLE.
22.1 Coverage
Section 1, Rule I, Book VI, IRR’s : This Rule shall apply to all
establishments and undertakings, whether operated for profit or not,
including educational, medical, charitable and religious institutions and
organizations, in cases of regular employment with the exception of
the Government and its political subdivisions including GOCC’s.
22.2 EE Classification
1. Art. 280
a. Regular EE’s
b. Project EE’s
c. Casual EE’s
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d. Seasonal EE’s
2. Art. 281
Probationary EE
3. Others
Contract-fixed period
ER Determination
2. H applied for employment with Holiday Inn and was accepted for
“On-the-job training” as telephone operator for 3 weeks. After
the completion of the training she was employed on a
“probationary basis” for 6 months. Four days before the said
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period, she was dismissed by the hotel on the ground that she
failed to meet the standards of the hotel. Is the dismissal valid?
No. At the time of her dismissal, she was already a regular EE since
the “on-the-job training” was already her “probationary period.” She
was not dropped after that period. Even granting that the probation
did not end with the training, there is no reason why that period
should not be included in the stipulated 6-month period probation.
(Holiday Inn vs. NLRC)
3. L was hired as a component mechanic by a manufacturing firm
for a probationary period for 6 months. Management decided not
to hire her after the probationary period. After a month, the
company again hired L for another 6-month probationary period.
After the 2nd 6-month probationary period, she was dismissed. Is
L a regular EE?
Yes. The nature of her job required her to perform activities which
are necessary and desirable in the usual business of her ER. She
was also rehired after the probationary employment extended to
her. This fact of rehiring negates any claim that she failed to qualify
as a regular EE. Successive hirings and firings cannot be resorted to
by the ER to avoid obligations imposed by law for the protection and
benefit of probationary EE’s. (Octaviano vs. NLRC)
Nature of Work
Contract to Contract
Project EE’s
No. They are project EE’s whose work is co-terminus with the
project for which they are hired. (Sandoval Shipyards vs. Leogardo)
No. The interviewers were hired for specific projects the completion
or termination of which are determined at the start of their
employment. (Manansag vs. NLRC)
No. Their work did not end upon the completion of a project. They
perform their jobs even after a job had been finished. Since they
performed tasks vital and indispensable to the efficient
administration and completion of the company’s various projects,
they are considered regular EE’s. (Capitol Industrial vs. NLRC)
Rationale
1. The rationale for this rule is that if a project has already been
completed, it would be unjust to require the ER to maintain them
in the payroll while they are doing absolutely nothing except
waiting until another program begun, if at all. In effect, these
stand-by workers would be enjoying the status of a privileged
retainers, collecting payments for work not done, to be disbursed
by the ER from profits not earned. This is not fair by any
standards and can only be lead to a coddling of labor at the
expense of management. (De Ocampo vs. NLRC)
Implication
Project EE’s are not entitled to separation pay as their work was
coterminous with the completion of the project. (Sandoval Shipyards vs.
Leogardo)
No. A’s employment was for a fixed period, her employment ended.
It does not necessarily follow that where the duties of the EE’s entail
activities which are usually necessary or desirable in the usual trade
or business of the ER, the parties should not be forbidden to
stipulate any period of time for these activities. There is nothing
essentially contradictory between a definite period of employment
and the nature of the EE’s duties. (Brent vs. Zamora)
No. The contract for a fixed period was a clever scheme to prevent
its EE’s from becoming regular EE’s. he should be considered a
regular EE. (Cielo vs. NLRC)
No. The contract specifically provided for a fixed term. (Pantranco vs.
NLRC)
Purpose
Duration/Exception
particular kind of work such as selling or when the job requires certain
qualifications, skills, experience or training. (Buiser or Leogardo)
Absorbed EE’s
Yes. When she was rehired, she did not have to undergo a
probationary employment as her teaching competence had already
been tried and tested during her 22 years of service. she could not
be discharged solely on account of the expiration of her 2nd annual
contract. She could not only be dismissed for cause and with due
process. (St. Theresita’s Academy vs. NLRC)
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Coverage
Security of Tenure
Nature of Rights
Rationale Regulation
5. Analogous cases.
Management Rights
The following are management rights with respect to EE”s:
1. Right to manage people in general : Except as limited by special
laws, an ER is free to regulate, according to his own discretion
and judgment, all aspects of employment. (San Miguel vs. Ople)
No. He did not drink beer in the company premises; neither did he
report for work under the influence of liquor because it was not their
tour of duty then. (Catalan vs. Genilo)
Yes. He was guilty of serious neglect of his duties. (Phil. Geothermal vs.
NLRC)
2. Example of Dishonesty
Falsification of time cards. (SMC vs. NLRC)
No. The termination of rank and file EE’s due to breach of trust
requires proof of actual involvement in the acts constituting the
offense. (SMC vs. NLRC)
F. ANALOGOUS CASES
G. OTHERS
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Art. 284: EE who has been found to be suffering from and Disease and
whose continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-EE’s.
Redundancy
Closure of Business
No. The cases of State Investment House vs. CA, Mendoza vs.
NLRC, and the Mindanao Terminal vs. Minister of Labor provide that
the rule in Article 283 with respect to separation pay applies only to
closure not due to business reverses. (Azucena)
Ailment or Disease
The law requires that the ER must furnish the worker sought to be
dismissed with two written notices before termination of employment
can be legally effected:
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Opportunity to be Heard
3. W was called to the Office of the General Manager and was told
that she was being charged with discourtesy and
insubordination. During that time, she was also called to explain
her side. As she could not give an explanation, she was
dismissed. Is the dismissal valid?
No. She was denied procedural due process. She was not given
ample opportunity to be heard and to defend herself.
Yes. As compared to the BLTB case, the findings of the city fiscal
were based solely on the affidavit of the accused-turned state
witness. The substantial evidence requirement is not present. (China
City Restaurant vs. NLRC)
Yes. The meeting called by the ER does not qualify as the hearing
required by law. (Segismundo vs. Montalvo)
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Right to Counsel
Burden of Proof
Art. 277 : The burden of proving that the termination was for a valid
or authorized cause shall rest on the ER.
Degree of Proof
Condonation
Offer to Reinstate
The fact that his ER latter made an offer to re-employ him did not cure
the vice of his earlier arbitrary dismissal. (Ranara vs. NLRC)
Prescription
Separation Pay
A. General Rule
If there is valid cause to terminate an employment, no separation pay
need be paid. (Sec. 7, Rule I, Book VI, IRR’s)
B. Exceptions
1. Art. 283 :
Installation of labor saving devices and redundancy : 1
month or 1 month pay for every year of service, whichever
is higher.
2. Art. 284 :
Disease : 1 month salary or ½ month salary for every year
of service, whichever is higher.
Includes not just the basic salary but also the regular allowances the
EE has been receiving. (Planters Products vs. NLRC) However, commissions
are not included in such base figure. (Soriano vs. NLRC)
D. EFFECT- RECEIPT
EE’s who received their separation pay are not barred from contesting
the legality of their dismissal. The acceptance of those would not
amount to estoppel. (San Miguel vs. Javate)
Backwages
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A. COMPUTATION OF BACKWAGES
Reinstatement
1. Reinstatement is a restoration to a state which one has been
removed or separated. It is the turn to the position from which he
was removed and assuming again the functions of the office
already held. Reinstatement presupposes that the previous
position from which one had been removed still exists, or that
there is an unfilled position more or less of a similar nature as
the one previously occupied by EE’ (NATU vs. Secretary of Labor)
Yes. G held a sensitive position. The case left both parties with less
than full trust and faith in each other. He should be paid severance
compensation in lieu of reinstatement. (Golden Donuts vs. NLRC)
A. RESIGNATION
B. CONSTRUCTIVE DISCHARGE
Suspension of Operations
1. Art. 286 : The bona fide suspension of the operation of a
business or undertaking for a period not exceeding 6 months, or
the fulfillment by the EE of a military or civic duty shall not
terminate employment. In all such cases, the ER shall reinstate
the EE to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than 1 month
from the resumption of operations of his ER or from his relief
from the military or civic duty.
Art. 287 : Any EE may be retired upon reaching the retirement age
established in the CBA or other applicable employment contract.
Obligation
1. The law does not impose any obligation upon ER’s to set up a
retirement scheme for their EE’s over and above that already
established under existing laws. (Llora Motors vs. Drilon)
Benefit
1. Retirement benefits are intended to help the EE enjoy the
remaining years of his life, lessening the burden of worrying for
his financial support, and are a form of reward for his loyalty and
service to the ER. (Aquino vs. NLRC)
PART II
SOCIAL SECURITY
Section 1, SSL : The Act shall be known as the Social Security Act of
1997.
2. The law imposes upon ER’s and EE’s the obligation to become
members of and make contributions to the Social Security
System. Is such a legal imposition valid and constitutional?
25.3 Definitions
ER
1. Section 8, SSL : “ER” – any person, natural or juridical,
domestic or foreign, who carries on in the Philippines any trade,
business industry, undertaking or activity of any kind and uses
the services of another person who is under his orders as regards
the employment.
EE
Section 8, SSL : “EE” – Any person who performs services for an ER
– where either mental and physical efforts are used and who receives
compensation for such services and where there is an ER-EE
relationship.
Dependent
1. Section 8, SSL : Legal spouse entitled by law to from member
to receive support.
Child :
legitimate
legitimated
legally adopted
illegitimate
who is unmarried, and not gainfully
employed and not reached 21 or over 21
is congenitally or while still minor
permanently incapacitated and incapable
of self-support, physically or mentally.
Parent: Who is receiving regular support from member.
Beneficiaries
A. PRIMARY
1. Sec. 8, SSL :
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B. SECONDARY
Sec. 8
Dependent parents
C. OTHERS
25.4 Coverage
A. COMPULSORY
B. VOLUNTARY
C. BY ARRANGEMENT
III. After working for 5 years, J was fired without cause. His dismissal
effected him so much that 2 months after he suffered a stroke. Is he
entitled to disability benefits at the time of his stroke?
25.7 Funding
II. The funds contributed to the System belong to the members who
will receive benefits, as a matter of right, whenever the hazards
provided by the law occur. (CMS Estate vs. SSS)
Effects of Non-remittance
25. 8 Benefits
his ER of the pregnancy of his legitimate spouse and the expected date
of such delivery.
III. On his way home from work, R went to a movie house to watch. He
is stabbed by an unknown assailant while watching. The SSS denied his
claims on the ground that the injury is not work-connected. Is the
denial valid?
Prescription Periods
Art. 1144 : 10 years from the time the right of action accrues since
this is an obligation created by law.
Benefit Protection
Execution of Decisions
Appeal
26.1 Law
Policy Objective
Rationale
The primary purpose of a workmen’s compensation act is to provide
compensation for disability or death resulting from occupational
injuries or diseases or accidental injury; the statute is a remedial one,
to compensate reasonably those who are injured while in the
employment of others, as part of the natural, necessary cost of
production. (Azucena)
Interpretation
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26.2 Definitions
ER
Art. 266 : Any person, natural or juridical, employing the services of
an EE.
Dependent
Beneficiaries
Who are the beneficiaries under the ECSIF?
1. Primary
a. Spouse – dependent spouse until remarriage
b. Children – dependent; provided dependent acknowledged
natural children shall be considered as primary beneficiary
when there are no other dependent children who are not
eligible and qualified for monthly income benefit.
2. Secondary
a. Parents – dependent subject to restrictions imposed on
dependent children.
b. Children – illegitimate subject to restrictions imposed on
dependent children
c. Legitimate descendants.
26.3 Compensability
Yes. The death arose out of and in the course of the employment
since the soldier was not on vacation leave and he had lawful
permission to go to the place and the other soldier was authorized
to carry a firearm. (Hinoguin vs. ECC)
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Proximate Cause
Employment includes not only the actual doing of the work, but a
reasonable margin of time and space necessary to be used in
passing to and from the place where the work is to be done. As a
general rule, employment may be said to begin when the EE
reaches the entrance to the ER’s premises where the work is to be
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done; but it is clear that in some cases the rule extends to include
adjacent premises used by the EE as a means of ingress and egress
with the express or implied consent of the ER. (Iloilo Dock vs. WCC)
Incidents of Employment
2. Acts for the personal benefit of the ER i.e. special errand rule.
While Travelling
Assault
1. Define sickness?
Any illness
a. definitely accepted as an occupational disease listed by
the Commission, or
b. any illness caused by employment subject to proof that the
risk of contracting the same is increased by working
conditions. (Art. 167)
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Disease due wholly to causes and conditions which are normal and
constantly present and characteristic of the particular conditions
which are normal and constantly present and characteristic of the
particular occupation. (Menez vs. ECC)
Compulsory Coverage
Art. 168 : All ER’s and their EE’s not over 60 years of age, provided,
an EE who is over 60 and paying contribution to qualify for retirement
or life insurance benefits shall be subject to compulsory coverage.
Foreign Employment
Exclusions
a. EE’s intoxication,
b. Willful intention to injure or kill himself or another,
c. Notorious negligence, or
d. Otherwise provided under this Title.
A. INTOXICATION OR DRUNKENNESS
B. SELF-INFLICTED INJURIES
C. NOTORIOUS NEGLIGENCE
26.5 Funding
EE’s shall be null and void. (Art. 183) EE’s do not have any
contribution. The government accepts general responsibility for the
solvency of the ECSIF. Any deficiency will be covered by the
supplemental appropriations from the National Government. (Art. 184)
Effects of Non-Remittance
26.6 Benefits
Benefit Protection
Prescriptive Periods
Art. 201 : 3 years from the time the cause of action accrued.
Exclusivity of Benefits
No. The EE or his heirs has the right of selection or choice of action.
He cannot however pursue both courses of action simultaneously.
(Floresca vs. Philex)
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Benefit Protection
Appeal
27.2 Definitions
ER
EE
Sec. 2, GSIS Act of 1997 : EE shall include :
1. Any person receiving compensation while in the service of ER
whether by election, or appointment, irrespective of the status of
appointment.
2. Barangay officials.
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3. Sanggunian officials.
Dependents
Beneficiaries
Who are the beneficiaries under the GSIS Law?
1. Primary :
a. Legal dependent spouse until remarriage.
b. Dependent children.
2. Secondary :
a. Dependent parents.
b. Legitimate descendants subject to restrictions of
dependent children.
27.3 Compulsory Coverage
Sec. 3, GSIS Act of 1997 : Coverage shall be compulsory for all EE’s
receiving compensation who have not reached compulsory retirement
age, irrespective of the employment status.
Sec. 6, GSIS Act of 1997 : The ER shall report to the GSIS the names
of all EE’s, corresponding employment status, positions, salaries and
other pertinent information.
27.6 Funding
27.7 Benefits
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b. Separation
c. Unemployment.
Prescriptive Period
Sec. 28, GSIS Act of 1997 : All claims, except for life and
retirement benefits shall prescribed within 4 years from date of
contingency.
Benefit Protection
Appeals
28.2 Purposes/Objectives
28.3 Coverage
1. Section 7, National Health Insurance Act : All citizens of the
Philippines shall be covered, provided, the Program shall not be
made compulsory in certain provinces and cites until the
Corporation shall be able to ensure the members in such
localities shall have reasonable access to adequate and
acceptable health care services.
28.4 Funding
What are the sources of funding of the NHIF?
1. Members contributions.
2. Current balance of the Health Insurance Funds of the SSS and
the GSIS
3. Other appropriations earmarked by the national and local
governments purposely for the implementation of the Program.
4. Subsequent appropriations.
5. Donations and grant-in-aid.
6. Accruals.
7. Contributions by LGU’s for indigent members.
2. Appeals from Office decisions must be filed with the Board within
30 days from receipt of notice of dismissal or disallowance by the
Office.
3. The Office shall have no jurisdiction over any issue involving the
suspension or revocation of accreditation, the imposition of fines,
or the imposition of charges on members or their dependents in
case of revocation of their entitlement.
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