Labor Law Proper

FUNDAMENTAL PRINCIPLES AND POLICIES
UNIVERSITYOFSANTOTOMAS
Fac ul t a d de De r e c h o Ci v i l
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ
LABORLAW
Q:Whatislabor?
A: It is theexertion by human beings of physical or

mental efforts, or both, towards the production of
goodsandservices.
Q:Whatislaborlaw?
A: The law governing the rights and duties of the

employerandemployeeswithrespectto:
1. The terms and conditions of employment

and
2. Labor disputes arising from collective
bargaining(CB)respectingsuchtermsand
conditions.
Q:Whatisthepurposeoflaborlegislation?
A: Labor legislation is an exercise of police power.

The purpose of labor legislation is to regulate the
relations between employers (Ers) and employees
(Ees) respecting the terms and conditions of
employment, either by providing for certain
standards or for a legal framework within which
better terms and conditions of work could be
negotiatedthroughCB.Itisintendedtocorrectthe
injustices inherent in ErEe relationship. (2006 Bar
Question)
Q:Whataretheclassificationsoflaborlaw?
A:
1. Labor standards The minimum terms
andconditionsofemploymentprescribed
by existing laws, rules and regulations
relating to wages, hours of work, costof
living allowance and other monetary and
welfare benefits. (Batong Buhay Gold
Mines, Inc. v. Dela Serna, G.R. No. 86963,
August6,1999)
e.g.13
th
monthpay
2. Labor relations Defines and regulates
the status, rights and duties, and the
institutionalmechanisms,thatgovernthe
individual and collective interactions of
Ers, Ees, or their representatives. It is
concerned with the stabilization of
relations of Er and Ees and seek to
forestall and adjust the differences
between them by the encouragement of
collective bargaining and the settlement
of labor disputes through conciliation,
mediationandarbitration.
e.g. Additional allowance pursuant to
CBA
3. Social legislation It includes laws that
provide particular kinds of protection or
benefitstosocietyorsegmentsthereofin
furtheranceofsocialjustice.
e.g.GSISLaw,SSSLaw,Philhealthbenefits
Q: Is there any distinction between labor

legislationandsociallegislation?Explain.
A:Laborlegislationissometimesdistinguishedfrom
social legislation by the former referring to labor
statutes, like Labor Relations Law and Labor
Standards, and the latter to Social Security Laws.
Laborlegislationfocusesontherightsoftheworker
intheworkplace.
Social legislation is a broad term and may include

not only laws that give social security protection,
but also those that help the worker secure housing
and basic necessities. The Comprehensive Agrarian
Reform Law could also be considered a social
legislation. All labor laws are social legislation, but
not all social legislation is labor law. (1994 Bar
Question)
Q:Whatarethesourcesoflaborlaws?
A:
1. Labor Code and other related special
legislation
2. Contract
3. CollectiveBargainingAgreement
4. Pastpractices
5. Companypolicies
A. FUNDAMENTALPRINCIPLESANDPOLICIES
1.CONSTITUTIONALPROVISIONS
Q: What are the constitutional mandates with

regardlaborlaws?
A:
1. Sec.3,Art.XIIITheStateshallaffordfull
protection to labor, local and overseas,
organized and unorganized, and promote
full employment and equality of
employmentopportunitiesforall.
Itshallguaranteetherightsofallworkers
to selforganization, collective bargaining
and negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. They shall be
entitled to security of tenure, humane
conditions of work, and a living wage.
They shall also participate in policy and
decisionmaking processes affecting their

UST GOLDEN NOTES 2011

LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM
2
rightsandbenefitsasmaybeprovidedby
law.
The State shall promote the principle of

shared responsibility between workers
andemployersandthepreferentialuseof
voluntary modes in settling disputes,
including conciliation, and shall enforce
their mutual compliance therewith to
foster industrial peace. The State shall
regulate the relations between workers
and employers, recognizing the right of
labor to its just share in the fruits of
productionandtherightofenterprisesto
reasonablereturnstoinvestments,andto
expansionandgrowth.
2. Sec. 9, Art. II The State shall promote a

just and dynamic social order that will
ensure the prosperity and independence
of the nation and free the people from
poverty through policies that provide
adequate social services, promote full
employment, a rising standard of living,
andanimprovedqualityoflifeforall.
3. Sec. 10, Art II The State shall promote

social justice in all phases of national
development.
4. Sec. 11, Art II The State values the

dignity of every human person and
guaranteesfullrespectforhumanrights.
5. Sec. 13, Art. II The State recognizes the

vital role of the youth in nationbuilding
and shall promote and protect their
physical, moral, spiritual, intellectual, and
social wellbeing. It shall inculcate in the
youth patriotism and nationalism, and
encouragetheirinvolvementinpublicand
civicaffairs.

role of women in nationbuilding, and
shall ensure the fundamental equality
beforethelawofwomenandmen.
7. Sec.18,Art.IITheStateaffirmslaboras
a primary social economic force. It shall
protect the rights of workers and
promotetheirwelfare.

indispensable role of the private sector,
encourages private enterprise, and
provides incentives to needed
investments.
9. Sec. 1, Art. III No person shall be

deprived of life, liberty, or property
without due process of law, nor shall any
person be denied the equal protection of
thelaws.
10. Sec. 4, Art. III No law shall be passed

abridging the freedom of speech, of
expression,orofthepress,ortherightof
the people peaceably to assemble and
petition the government for redress of
grievances.
11. Sec. 8, Art. III The right of the people,

including those employed in the public
and private sectors, to form unions,
associations,orsocietiesforpurposesnot
contrarytolawshallnotbeabridged.
12. Sec. 1, Art. XIII The Congress shall give

highest priority to the enactment of
measures that protect and enhance the
right of all the people to human dignity,
reduce social, economic, and political
inequalities, and remove cultural
inequities by equitably diffusing wealth
andpoliticalpowerforthecommongood.
To this end, the State shall regulate the

acquisition, ownership, use, and
disposition of property and its
increments.
13. Sec. 2, Art. XIII The promotion of social

justice shall include the commitment to
create economic opportunities based on
freedomofinitiativeandselfreliance.
14. Sec. 14, Art. XIII The State shall protect

working women by providing safe and
healthful working conditions, taking into
account their maternal functions, and
such facilities and opportunities that will
enhancetheirwelfareandenablethemto
realizetheirfullpotentialintheserviceof
thenation.
Q:WhatistheStatepolicyonlaborasfoundinthe
constitution(Sec.3,Art.XIII)?
A:
1. Affordfullprotectiontolabor
2. Promotefullemployment
3. Ensure equal work opportunities
regardlessofsex,race,orcreed

4. Assure the rights of workers to self
organization, security of tenure, just and
humaneconditionsofwork,participatein
policy and decisionmaking processes
affectingtheirrightandbenefits
5. Regulate the relations between workers
andemployers
Q: What are the basic rights of workers

guaranteedbytheConstitution(Sec.3,Art.XIII)?
A:
1. Securityoftenure
2. Receivealivingwage
3. Humaneworkingconditions
4. Shareinthefruitsofproduction
5. Organizethemselves
6. Conduct collective bargaining or
negotiationwithmanagement
7. Engage in peaceful concerted activities
includingstrike
8. Participate in policy and decision making
processes
Q:Whatistheprincipleofnonoppression?
A: The principle mandates capital and labor not to

act oppressively against each other or impair the
interest and convenience of the public. The
protectiontolaborclauseintheConstitutionisnot
designed to oppress or destroy capital. (Capili v.
NLRC,G.R.No.117378,Mar.26,1997)
2.NEWCIVILCODEANDOTHERLAWS
Q:Whatareotherrelatedlawstolabor?
A:
1. CivilCode
a. Art. 1700 The relations between
capital and labor are not merely
contractual. They are so impressed
with public interest that labor
contracts must yield to the common
good. Therefore, such contracts are
subject to the special laws on labor
unions, collective bargaining, strikes
and lockouts, closed shop, wages,
working conditions, hours of labor
andsimilarsubjects.
b. Art. 1701 Neither capital nor labor
shall act oppressively against the
other, or impair the interest or
convenienceofthepublic.
c. Art.1702Incaseofdoubt,alllabor
legislation and all labor contracts
shall be construed in favor of the
safety and decent living for the
laborer.
d. Art. 1703 No contract which
practically amounts to involuntary
servitude, under any guise
whatsoever,shallbevalid.
2. RevisedPenalCode
Art. 289 Formation, maintenance and
prohibition of combination of capital or
labor through violence or threats. Any
person who, for the purpose of
organizing, maintaining or preventing
coalitions or capital or labor, strike of
laborers or lockout of employees, shall
employ violence or threats in such a
degreeastocompelorforcethelaborers
or employers in the free and legal
exercise of their industry or work, if the
act shall not constitute a more serious
offenseinaccordancewiththeprovisions
oftheRPC.
3. SpecialLaws
a. GSISLaw
b. 13
th
MonthPayLaw
c. RetirementPayLaw
d. SSSLaw
e. PaternityLeaveAct
f. AntiChildLaborAct
g. AntiSexualHarassmentAct
h. Magna Carta for Public Health
Workers
i. SoloParentsWelfareActof2000
j. National Health Insurance Act as
amendedbyR.A.9241
k. Migrant Workers and Overseas
Filipinos Act of 1995 as amended by
RA10022
l. PERAActof2008
m. Home Development Mutual Fund
Lawof2009
n. TheMagnaCartaofWomen
o. ComprehensiveAgrarianReformLaw
asamendedbyR.A.9700
3.LABORCODE
Q:Whatistheaimoflaborlaws?
A: The justification of labor laws is social justice.

Social justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanizationoflawsandtheequalizationofsocial
and economic force by the State so that justice in
its rational and objectively secular conception may
at least be approximated. Social justice means the
promotion of the welfare of all the people, the


LABORLAWTEAM:
4
adoption by the government of measures
calculated to insure economic stability of all the
competent elements of society, through the
maintenance of a proper economic and social
equilibriumintheinterrelationsofthemembersof
the community, constitutionally, through the
adoption of measures legally justifiable, or extra
constitutionally, through the exercise of powers
underlying the existence of all governments on the
timehonored principle of salus populi est suprema
lex. (Calalang v. Williams, G.R. No. 47800, Dec. 2,
1940)
Q:Whatiscompassionatejustice?
A:Itisdisregardingrigidrulesandgivingdueweight
toallequitiesofthecase.
e.g: Employee validly dismissed may still be given

severancepay.
Q: How should doubts in the implementation and

interpretation of the Labor Code (LC) and its
Implementing Rules and Regulations (IRR) be
resolved?
A:Theyshouldberesolvedinfavoroflabor.
Q: What is the concept of liberal approach in

interpretingtheLCanditsIRR?
A: The workers' welfare should be the paramount

consideration in interpreting the LC and its IRR.
This is rooted in the constitutional mandate to
afford full protection to labor. (PLDT v. NLRC, G.R.
No. 111933, July 23, 1997). It underscores the
policy of social justice to accommodate the
interests of the working class on the humane
justification that those who have less in life shall
have more in law. (PAL v. Santos, G.R. No. 77875,
Feb.4,1993).(2006BarQuestion)
Q:Art.4oftheLCprovidesthatincaseofdoubtin
the implementation and interpretation of the
provisionsoftheLCanditsIRR,thedoubtshallbe
resolved in favor of labor. Art. 1702 of the Civil
Code also provides that in case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and decent living
ofthelaborer.
MicaMara Company assails the validity of these

statutes on the ground that they violate its
constitutional right to equal protection of the
laws. Is the contention of Mica Mara Company
tenable?Discussfully.
A:No,theConstitutionprovidesthattheStateshall
afford full protection to labor. Furthermore, the
State affirms labor as a primary economic force. It
shall protect the rights of workers and promote
theirwelfare.(1998BarQuestion)
a.Art.3.DeclarationofBasicPolicy
Q:WhatisthepolicyoftheStateasregardslabor
asfoundintheLaborCode(Art.12)?
A:
1. Promote and maintain a State of full
employment through improved
manpower training, allocation and
utilization;
2. Protect every citizen desiring to work
locallyoroverseasbysecuringforhimthe
best possible terms and conditions of
employment;
3. Facilitate a free choice of available
employment by persons seeking work in
conformitywiththenationalinterest;
4. Facilitate and regulate the movement of
workers in conformity with the national
interest;
5. Regulate the employment of aliens,
including the establishment of a
registrationand/orworkpermitsystem;
6. Strengthen the network of public
employment offices and rationalize the
participation of the private sector in the
recruitment and placement of workers,
locally and overseas, to serve national
developmentobjectives;
7. Ensure careful selection of Filipino
workers for overseas employment in
order to protect the good name of the
Philippinesabroad.
Q: What are the reasons for affording greater

protectiontoemployees?
A:
1. Greater supply than demand for labor;
and
2. Need for employment by labor comes
from vital and desperate necessity.
(Sanchez v. Harry Lyons Construction Inc.,
G.R.L2779,Oct.18,1950)
Q:Arealllabordisputesresolvedinfavoroflabor?
A: No. The law also recognizes that management

has rights which are also entitled to respect and
enforcement in the interest of fair play. (St. Lukes
MedicalCenter EesAssnv.NLRC,G.R.No.162053,
Mar.7,2007)

5
b.Art.5.RulesandRegulations
Q:Whoisgiventherulemakingpower?
A: The Department of Labor and other govt

agencies charged with the administration and
enforcement of the Labor Code or any of its parts
shall promulgate the necessary implementing rules
and regulations. Such rules and regulations shall
become effective 15 days after announcement of
theiradoptioninnewspapersofgeneralcirculation.
Q: What are the limitations to the rulemaking

power given to the Secretary of Labor and
Employmentandothergovtagencies?
A:Itmust:
1. Beissuedundertheauthorityofthelaw
2. Not be contrary to law and the
Constitution
c.Art.6.Applicability
Q:Towhomshallallrightsandbenefitsunderthe
LCapply?
A: GR: All rights and benefits granted to workers

under the LC shall apply alike to all workers,
whetheragriculturalornonagricultural.
XPN:
1. Governmentemployees(Ees)
2. Ees of government corporations created
byspecialororiginalcharter
3. Foreigngovernments
4. Internationalagencies
5. Corporate officers/ intracorporate
disputes which fall under P.D. 902A and
now fall under the jurisdiction of the
regular courts pursuant to the Securities
RegulationCode(SRC).
6. Local water district except where NLRCs
jurisdictionisinvoked.
7. AsmayotherwisebeprovidedbytheLC
Q:WhatisthetestindeterminingwhetheraGOCC
issubjecttotheCivilServiceLaw?
A:Itisdeterminedbythemanneroftheircreation.
Govt corporations that are created by special
(original) charter from Congress are subject to Civil
Service rules, while those incorporated under the
GeneralCorporationLawarecoveredbytheLC.
Q:Whoisanagricultural/farmworker?
A:
1. One employed in an agricultural or farm
enterprise,
2. Performs tasks which are directly related
toagriculturalactivitiesoftheEr,and
3. Any activities performed by a farmer as
anincidenttofarmingoperations.
d.Art.211.DeclarationofPolicy
Q: What are the policy objectives of our labor

relationslaw?
A:Thestateaimstopromote:
1. Free collective bargaining (CB) and
negotiations, including voluntary
arbitration, mediation and conciliation as
modes of settling labor or industrial
disputes;
2. Freetradeunionism;
3. Free and voluntary organization of a
strongandunitedlabormovement;
4. Enlightenment of workers concerning
their rights and obligations as union
membersandasEes;
5. Adequate administrative machinery for
the expeditious settlement of labor or
industrialdisputes;
6. Stable but dynamic and just industrial
peace;
7. Participation of workers in the decision
making processes affecting their rights,
dutiesandwelfare;
8. Truly democratic method of regulating
the relations between the Ers and Ees by
means of agreements freely entered into
through CB, no court or administrative
agency or official shall have the power to
set or fix wages, rates of pay, hours of
work or other terms and conditions of
employment, except as otherwise
providedundertheLC.
e.Art.212.Definitions
Q:Whoisanemployer(Er)?
A: Any person acting in the interest of an Er,
directly or indirectly. The term does not include a
labor organization (LO) or any of its officers and
agents,exceptwhenactingasanEr.(Art.212[e])
An Er is defined as any person or entity that
employstheservicesofothers;oneforwhomwork
and who pays their wages of salaries; any person
acting in the interest of an Er; refers to the
enterprise where the LO operates or seeks to
operate.(Sec.1[s],RuleI,BookV,IRR)
Q:WhenisalabororganizationdeemedanEr?


LABORLAWTEAM:
6
A: When it is acting as such in relation to persons
rendering services under hire, particularly in
connectionwithitsactivitiesforprofitorgain.
Note: The mere fact that respondent is a labor union
does not mean that it cannot be considered an Er for
persons who work for it. Much less should it be
exempted from labor laws. (Bautista v. Inciong, G.R.
No.L52824,Mar.16,1988)
Q:Whoisanemployee(Ee)?
A:
1. AnypersonintheemployoftheEr
2. Any individual whose work has ceased as
a result of or in connection with any
current labor dispute or because of any
unfair labor practice if he has not
obtained any other substantially
equivalentandregularemployment
3. One who has been dismissed from work
but the legality of dismissal is being
contested in a forum of appropriate
jurisdiction. (D.O. No. 4003, Mar. 15,
2003)
Note: The term shall not be limited to the Ees of a
particularErunlesstheLCexplicitlystates.
AnyEe,whetheremployedforadefiniteperiodornot,
shall, beginning on the first day of service, be
considered an Ee for purposes of membership in any
laborunion.(Art.277[c],LC)
Q:Whatisalabordispute?
A:Includesanycontroversyormatterconcerning:
1. Termsandconditionsofemployment,or
2. The association or representation of
persons in negotiating, fixing,
maintaining, changing or arranging the
termsandconditionsofemployment
3. Regardless of whether the disputants
stand in the proximate relation of Er and
Ee.(Art.212[l])
Q: What are the tests on whether a controversy

fallswithinthedefinitionofalabordispute?
A:
1. AstonatureItdependsonwhetherthe
dispute arises from ErEe relationship,
although disputants need not be
proximatelyErorEeofanother.
2. As to subject matter The test depends

on whether it concerns terms or
conditions of employment or association
or representation of persons in
negotiating, fixing, maintaining or
changing terms or conditions of
employment.
Q:Whatarethekindsoflabordisputes?
A:
1. Laborstandarddisputes
a. Compensation E.g. Underpayment
of minimum wage; stringent output
quota;illegalpaydeductions
b. Benefits E.g. Nonpayment of
holidaypay,OTpayorotherbenefits
c. WorkingConditionsE.g.Unrectified
workhazards
2. Laborrelationsdisputes
a. Organizational right disputes/ULP

E.g. Coercion, restraint or
interference in unionization efforts;
reprisal or discrimination due to
union activities; company unionism;
ULP, strike or lockout; union
members complaint against union
officers
b. Representation disputes E.g.
Uncertainty as to which is the
majority union; determination of
appropriate CB unit; contests for
recognition by different sets of
officersinthesameunion
c. Bargaining disputes E.g. Refusal to
bargain; bargaining in bad faith;
bargainingdeadlock;economicstrike
orlockout
d. Contract administration or personnel
policy disputes E.g. Non
compliance with CBA provision (ULP
if gross non compliance with
economic provisions); disregard of
grievance machinery; non
observance of unwarranted use of
union security clause; illegal or
unreasonable personnel
management policies; violation of
nostrike/nolockoutagreement
e. Employment tenure disputes E.g.
Nonregularization of Ees; non
absorption of labor only contracting
staff; illegal termination; non
issuanceofemploymentcontract
Q:Whoarethepartiestoadispute?

A:
1. Primary parties are the Er, Ees and the
union.
2. Secondary parties are the voluntary
arbitrator, agencies of DOLE, NLRC,
Secretary of Labor and the Office of the
President.
Q:Whatisaninteruniondispute?
A:Anyconflictbetweenandamonglegitimatelabor
unions involving representation questions for the
purposes of CB or to any other conflict or dispute
betweenlegitimatelaborunions.
Q:Whatisanintrauniondispute?
A: Any conflict between and among union
members, grievances arising from any violation of
the rights and conditions of membership, violation
of or disagreement over any provision of the
unions constitution and bylaws, or disputes from
charteringoraffiliationofunion.
Q:Whatarerightsdisputes?
A: They are claims for violations of a specific right
arising from a contract, i.e. CBA or company
policies.
Q:Whatareinterestdisputes?
A: They involve questions on what should be
included in the CBA. Strictly speaking, the parties
maychooseavoluntaryarbitratortodecideon the
terms and conditions of employment, but this is
impracticablebecauseitwillbeavaluejudgmentof
thearbitratorsandnotoftheparties.
Q:Whatarecontractnegotiationdisputes?
A:ThesearedisputesastothetermsoftheCBA.
Q:Whatarecontractinterpretationdisputes?
A:ThesearedisputesarisingunderanexistingCBA,
involving such matters as the interpretation and
application of the contract, or alleged violation of
itsprovisions.
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f.Art.255.ExclusiveBargainingRepresentation
(EBR)andWorkersParticipationinPolicyand
DecisionMaking
Q: Who shall be the bargaining representative of

the Employees for purposes of collective
bargaining?
A: The Labor Organization designated or selected

bythemajorityoftheemployeesinanappropriate
collective bargaining unit shall be the exclusive
representativeoftheemployeesinsuchunitforthe
purpose of collective bargaining. However, an
individual employee or group of employees shall
have the right at any time to present grievances to
their employer. (As amended by Sec. 22, R.A. No.
6715,Mar.15,1989)
Q: What is the extent of the workers right to

participate in policy and decisionmaking
processesinacompany?
A: Such right refers not only to formulation of

corporate programs and policies but also to
participationingrievanceproceduresandvoluntary
modesofsettlingdisputes.
Q: Explain the extent of the workers right to

participate in policy and decisionmaking process
as provided under Art. XIII, Sec. 13 of the 1987
Constitution. Does it include membership in the
BoardofDirectorsofacorporation?
A: No. In Manila Electric Company v. Quisumbing,

G.R. No. 127598, January 27, 1999, the SC
recognized the right of the union to participate in
policy formulation and decision making process on
mattersaffectingtheUnionmembersrights,duties
and welfare. However, the SC held that such
participation of the union in committees of Er
Meralco is not in the nature of a comanagement
control of the business of Meralco. Impliedly,
therefore,workersparticipatoryrightinpolicy and
decisionmaking processes does not include the
right to put a union member in the Corporations
BoardofDirectors.(2008BarQuestion)
Q: May an Er solicit questions, suggestions and

complaints from Ees even though the Ees are
representedbyaunion?
A:Yes,provided:
1. The CB representative executes an

agreementwaivingtherighttobepresent
on any occasion when Ee grievances are
beingadjustedbytheEr;and
2. Er acts strictly within the terms of his
waiveragreement.
Q:ThehotelunionfiledaNoticeofStrikewiththe
NCMBduetoULPagainsttheDiamondHotelwho
refused to bargain with it. The hotel advised the
unionthatsinceitwasnotcertifiedbytheDOLEas
the exclusive bargaining agent, it could not be


8
LABORLAWTEAM:
recognized as such. Whether the Union may

bargaincollectively?
A: No. Art. 255 of the LC declares that only the

labor organization designated or selected by the
majority of the Ees in an appropriate collective
bargaining (CB) unit is the exclusive representative
oftheemployees(Ees)insuchunitforthepurpose
of CB. The union is admittedly not the exclusive
representative of the majority of the Ees of the
hotel, hence, it could not demand from the hotel
the right to bargain collectively in their behalf.
(Manila Diamond Hotel v. Manila Diamond Hotel
EesUnion,G.R.No.158075,June30,2006)
Q: Are probationary Ees allowed to vote at the

timeofthecertificationelections?
A: Yes. Under Art. 255 of the LC the labor

organizationdesignatedorselectedbythemajority
oftheEesinanappropriatebargainingunitshallbe
the exclusive representative of the Ees in such unit
for purposes of CB. CB covers all aspects of the
employment relation and the resultant CBA
negotiatedbythecertifiedunionbindsallEesinthe
bargaining unit. Hence, all rank and file Ees,
probationary or permanent, have a substantial
interest in the selection of the bargaining
representative. The LC makes no distinction as to
their employment status as basis for eligibility in
supporting the petition for certification election.
Thelawrefersto"all"theEesinthebargainingunit.
Alltheyneedtobeeligibletosupportthepetitionis
tobelongtothe"bargainingunit."Theprovisionin
the CBA disqualifying probationary Ees from voting
cannotoverridetheconstitutionallyprotectedright
of workers to selforganization, as well as the
provisions of the LC and its implementing rules on
certification elections and jurisprudence. A law is
read into, and forms part of, a contract. Provisions
in a contract are valid only if they are not contrary
tolaw,morals,goodcustoms,publicorderorpublic
policy. (NUWHRAINMPHC v. SLE, G.R. No. 181531,
July31,2009)
RECRUITMENT AND PLACEMENT

9
B. RECRUITMENTANDPLACEMENT
1. RECRUITMENTOFLOCALANDMIGRANT
WORKERS
a.RecruitmentandPlacement
Q:Whoisaworker?
A: Any member of the labor force, whether

employedorunemployed.(Art.13[a],LC)
Q:Whatisrecruitmentandplacement?
A:
1. Any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring
orprocuringworkers;and
2. Includes referrals, contact services,
promising or advertising for employment,
locally or abroad, whether for profit or
not.(Art.13[b],LC)
Q:Whataretheessentialelementsindetermining
whether one is engaged in
recruitment/placement?
A:Itmustbeshownthat:
1. The accused gave the complainant the

distinct impression that she had the
power or ability to send the complainant
forwork,
2. Suchthatthelatterwasconvincedtopart
with his money in order to be so
employed. (People v. Goce, G.R. No.
113161,Aug.29,1995)
Q: Who is deemed engaged in recruitment and

placement?
A: Any person or entity which, in any manner,

offers or promises for a fee employment to 2 or
morepersons.(Art.13[b],LC)
Q:Whatistheruleinrecruitmentandplacement?
A: GR: No person or entity other than the public

employment offices, shall engage in the
recruitmentandplacementofworkers
XPN:
1. Construction contractors if authorized by
the DOLE and Construction Industry
Authority
2. Other persons or entities as may be
authorizedbytheSLE
3. Members of the diplomatic corps (but
hiringmustgothroughPOEA)
4. Publicemploymentoffices
5. Privaterecruitmentoffices
6. Privateemploymentagencies
7. POEA
8. Shipping or manning agents or
representatives
9. Namehires
Q:Whoarenamehires?
A: They are individual workers who are able to

secure contracts for overseasemployment on their
own efforts and representations without the
assistance or participation of any agency. Their
hiring,nonetheless,shallpassthroughthePOEAfor
processing purposes. (Part III, Rule III, POEA Rules
Governing Overseas Employment as amended in
2002)
Q: What if employment is offered to only one

person?
A: Immaterial. The number of persons dealt with is

notanessentialingredientoftheactofrecruitment
and placement of workers. The proviso merely lays
down a rule of evidence that where a fee is
collected in consideration of a promise or offer of
employmentto2ormoreprospectiveworkers,the
individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment
and placement. The words "shall be deemed"
create that presumption. (People v. Panis, G.R. L
5867477,July11,1986)
Q:Whatisaprivateemploymentagency?
A:Anypersonorentityengagedintherecruitment
and placement of workers for a fee which is
charged, directly or indirectly, from the workers or
employersorboth.
Q:Whatisaprivaterecruitmentagency?
A: It is any person or association engaged in the

recruitment and placement of workers without
charging any fee, directly or indirectly, from the
workersoremployers.
Q:Whoisaseaman?
A: Any person employed in a vessel engaged in

maritimenavigation.
Q:Whatisoverseasemployment?


LABORLAWTEAM:
10
A: It is employment of a worker outside the
Philippines.
Q:WhoisanoverseasFilipinoworker(OFW)?
A:Apersonwhoistobeengaged,isengagedorhas
been engaged in a remunerated activity in a State
of which he or she is not a citizen or on board a
vessel navigating the foreign seas other than a
government ship used for military or non
commercial purposes or on an installation located
offshore or on the high seas; to be used
interchangeably with migrant worker. (Sec.2, R.A.
10022amendingR.A.8042)
Q:Whoisanemigrant?
A:Anyperson,workerorotherwise,whoemigrates
to a foreign country by virtue of an immigrant visa
or resident permit or its equivalent in the country
ofdestination.
b.IllegalRecruitment,Art.38(Local),Sec.6,Migrant
WorkersAct,RA8042
(a)Licensev.Authority
Q:Whatisalicense?
A: It is issued by DOLE authorizing a person or

entitytooperateaprivateemploymentagency.
Q:WhatisanAuthority?
A:ItisadocumentissuedbytheDOLEauthorizing
a person or association to engage in recruitment
and placement activities as a private recruitment
entity.
Q: Who is a nonlicensee / nonholder of

authority?
A:Anyperson,corporationorentity:
1. Whichhasnotbeenissuedavalidlicense
orauthoritytoengageinrecruitmentand
placement by the Secretary of Labor and
Employment(SLE)or
2. Whose license or authority has been
suspended, revoked or cancelled by the
POEAortheSLE
Q:Whatarethegroundsforrevocationoflicense?
A:
1. Incurring an accumulated 3 counts of
suspension by an agency based on final
andexecutoryorderswithintheperiodof
validityofitslicense
2. Violationsoftheconditionsoflicense
3. Engaging in acts of misrepresentation for
the purpose of securing a license or
renewal
4. Engagingintherecruitmentorplacement
of workers to jobs harmful to the public
healthormoralityortothedignityofthe
country.(Sec.3,RuleI,BookVI,Rulesand
Regulations Governing Overseas
Employment)
Q: What are the grounds for suspension or

cancellationoflicense?
A:
1. ProhibitedactsunderArt.34
2. Publishing job announcements w/o
POEAsapproval
3. Charging a fee which may be in excess of
theauthorizedamountbeforeaworkeris
employed
4. Deploying workers w/o processing
throughPOEA
5. Recruitment in places outside its
authorized area. (Sec. 4, Rule II, Book IV,
POEARules)
Q:Isthelicenseorauthoritytransferable?
A:No,theyarenontransferable.(Art.29)
Q: A Recruitment and Placement Agency declared

voluntary bankruptcy. Among its assets is its
license to engage in business. Is the license of the
bankrupt agency an asset which can be sold in
publicauctionbytheliquidator?
A: No, because of the nontransferability of the

license to engage in recruitment and placement.
The LC (Art. 29) provides that no license to engage
inrecruitmentandplacementshallbeuseddirectly
or indirectly by any person other than the one in
whose favor it was issued nor may such license be
transferred, conveyed or assigned to any other
personorentity.Itmaybenotedthatthegrantof
a license is a governmental act by the DOLE based
on personal qualifications, and citizenship and
capitalization requirements. (Arts.2728, LC). (1998
BarQuestion)
Note: Changeofownershiporrelationshipofasingle
proprietorship licensed to engage in overseas
employment shall cause the automatic revocation of
thelicense.
Q: Concerned Filipino contract workers in the

Middle East reported to the DFA that XYZ, a

11
private recruitment and placement agency, is
covertly transporting extremists to terrorist
trainingcampsabroad.Intelligenceagenciesofthe
govt allegedly confirmed the report. Upon being
alerted by the DFA, the DOLE issued orders
cancelling the licenses of XYZ, and imposing an
immediatetravelbanonitsrecruitsfortheMiddle
East. XYZ appealed to the Office of the President
to reverse and set aside the DOLE orders, citing
damages from loss of employment of its recruits,
and violations of due process including lack of
notice and hearing by DOLE. The DOLE in its
answer claimed the existence of an emergency in
the Middle East which required prompt measures
to protect the life and limb of OFWs from a clear
and present danger posed by the ongoing war
against terrorism. Should the DOLE orders be
upheldorsetaside?
A:
1. The DOLE order cancelling the licenses of
XYZ is void because a report that an
agency is covertly transporting extremists
is not a valid ground for cancellation of a
Certificate of Registration (Art. 239, LC
and there is failure of due process as no
hearing was conducted prior to the
cancellation(Art.238,LC).
2. TheDOLEorderimposingthetravelbanis
valid because it is a valid exercise of
police power to protect the national
interest (Sec. 3, Art. XIII, Constitution on
full protection to labor safety of workers)
and on the rule making authority of the
SLE. (Art. 5, LC; Phil. Assn. of Service
Exporters v. Drilon, G.R. No. 81958, June
30,1988).(2004BarQuestion)
Q: Who are the persons prohibited from engaging

thebusinessofrecruitingmigrantworkers?
A:
1. UnlawfulforanyofficialorEeofthe:
a. DOLE
b. POEA
c. Overseas Workers Welfare
Administration(OWWA)
d. DFA
e. Other govt agencies involved in the
implementationofthisAct
2. Their relatives within the 4
th
civil degree
of consanguinity or affinity, to engage,
directly or indirectly in the business of
recruiting migrant workers. (Sec. 8, R.A.
8042)
(b)IllegalRecruitment
Q:WhataretheelementsofIllegalRecruitment?
A:
1. Offender is a nonlicensee or nonholder
of authority to lawfully engage in the
recruitment/placementofworkers
2. Offenderundertakes:
a. Any act of canvassing, enlisting,
contracting, transporting, utilizing,
hiring or procuring workers, and
includes referrals, contact services,
promising or advertising for
employment, locally or abroad,
whetherforprofitornot(Art.13[b]);
or
b. Any of prohibited practices under
Art.34
Q:WhenisthereSimpleIllegalRecruitment?
A: It is considered simple illegal recruitment when
itinvolveslessthanthree(3)victimsorrecruiters.
Q: Larry Domingo was accused of the crime of

illegal recruitment. He argued that he issued no
receiptordocumentinwhichheacknowledgedas
havingreceivedanymoneyforthepromisedjobs.
Hence, he should be free him from liability. Was
Larryengagedinrecruitmentactivities?
A: Yes. Even if at the time Larry was promising

employment no cash was given to him, he is still
considered as having been engaged in recruitment
activities, since Art.13(b) of the LC states that the
act of recruitment may be for profit or not. It
sufficesthatLarrypromisedorofferedemployment
for a fee to the complaining witnesses to warrant
his conviction for illegal recruitment. (People v.
Domingo, G.R. No. 181475, April 7, 2009, J. Carpio
Morales)
Q:WhatisthedifferencebetweentheLCandR.A.
8042 or the Overseas Filipinos and Overseas
MigrantWorkersAct?
A:
LC(Art.38)
R.A.8042,asamendedbyRA
10022
Localrecruitment
Appliestorecruitmentfor
overseasemployment
Illegal recruitment
underArt.38means
any recruitment
activity including
prohibited acts
under Art. 34
committed by non
IllegalrecruitmentunderSec.6
meansanyrecruitmentactivity
committed by nonlicensees/
nonholders of authority or
prohibited acts (same as Art.
34,LC)


LABORLAWTEAM:
12
licensees or non
holdersofauthority.
Added to the following in the

listofprohibitedacts:
1. Failure to actually deploy
withoutvalidreason;
2. Failure to reimburse
expenses incurred by the
workerinconnectionwith
his/her documentation
and processing for
purposesofdeployment;
3. To allow a nonFilipino
citizen to head or
manage a licensed
recruitment/ manning
agency.
Q:Howdoesoneproveillegalrecruitment?
A: It must be shown that the accused gave the

distinctimpressionthathehadthepowerorability
tosendcomplainantsabroadforworksuchthatthe
latter were convinced to part with their money in
ordertobedeployed.
Q: May a licensee or holder of authority be held

liableforillegalrecruitment?
A: Yes, any person (whether nonlicensee, non

holderofauthority,licenseeorholderofauthority)
who commits any of the prohibited acts, shall be
liableforIllegalrecruitment.(R.A.8042)
Q: When is illegal recruitment considered as

economicsabotage?
A:Whenitiscommitted:
1. Byasyndicatecarriedoutby3ormore
persons conspiring/confederating with
oneanotheror
2. In large scale committed against 3 or
more persons individually or as a group.
(Sec.6,10022)
Q:Whileherapplicationforrenewalofherlicense
torecruitworkersforoverseasemploymentwas
still pending Maryrose Ganda recruited Alma and
her 3 sisters, Ana, Joan, and Mavic, for
employment as housemates in Saudi Arabia.
Maryroserepresentedtothesistersthatshehada
license to recruit workers for overseas
employment and demanded and received
P30,000.00 from each of them for her services.
However, her application for the renewal of her
license was denied, and consequently failed to
employ the 4 sisters in Saudi Arabia. The sisters
charged Maryrose with large scale illegal
recruitment. Testifying in her defense, she
declared that she acted in good faith because she
believed that her application for the renewal of
her license would be approved. She adduced in
evidence the Affidavits of Desistance which the
four private complainants had executed after the
prosecution rested its case. In the said affidavits,
they acknowledge receipt of the refund by
Maryrose of the total amount of P120,000.00 and
indicated that they were no longer interested to
pursuethecaseagainsther.Resolvethecasewith
reasons.
A: Illegal recruitment is defined by law as any

recruitment activities undertaken by nonlicenses
or nonholders of authority. (People v. Senoron,
G.R. No. 119160, Jan. 30,1997) And it is large scale
illegal recruitment when the offense is committed
against 3 or more persons, individually or as a
group. (Art. 38[b], LC) In view of the above,
Maryrose is guilty of large scale illegal recruitment.
HerdefenseofGFandtheAffidavitofDesistanceas
well as the refund given will not save her because
R.A. No. 8042 is a special law, and illegal
recruitment is malum prohibitum. (People v. Saulo,
G.R. No. 125903, Nov. 15, 2000). (2005 Bar
Question)
Q: Sometime in the month of March 1997, in the

CityofLasPias,Bugobymeansoffalsepretenses
and fraudulent representation convinced Dado to
give the amount of P 120,000.00 for processing of
his papers so that he can be deployed to Japan.
Dado later on found out that Bugo had
misappropriated, misapplied and converted the
money to her own personal use and benefit. Can
Dado file the cases of illegal recruitment and
estafasimultaneously?
A:Yes,illegalrecruitmentandestafacasesmaybe
filed simultaneously or separately. The filing of
charges for illegal recruitment does not bar the
filing of estafa, and vice versa. Bugos acquittal in
theillegalrecruitmentcasedoesnotprovethatshe
isnotguiltyofestafa.Illegalrecruitmentandestafa
are entirely different offenses and neither one
necessarilyincludesorisnecessarilyincludedinthe
other. A person who is convicted of illegal
recruitmentmay,inaddition,beconvictedofestafa
underArticle315,par.2(a)oftheRPC.Inthesame
manner, a person acquitted of illegal recruitment
maybeheldliableforestafa.Doublejeopardywill
not set in because illegal recruitment is malum
prohibitum, in which there is no necessity to prove
criminal intent, whereas estafa is malum in se, in
theprosecutionofwhich,proofofcriminalintentis
necessary.(Syv.People,G.R.No.183879,April14,
2010)
Q:DistinguishIllegalRecruitmentfromEstafa

13
A:
ILLEGALRECRUITMENT ESTAFA
Malumprohibitum,thus:
1. Criminal intent is NOT
necessary
2. itisacrimewhichinvolves
moralturpitude
Maluminse,
thus:
1. criminal intent is
necessary
2. crime which
involves moral
turpitude
It is not required that it be

shown that the recruiter
wrongfully represented
himself as a licensed
recruiter
NOTE: It is enough that the

victims were deceived as they
relied on the
misrepresentationandscheme
that caused them to entrust
their money in exchange of
whattheylaterdiscoveredwas
a vain hope of obtaining
employmentabroad
Accused defrauded
another by abuse of
confidence, or by
meansofdeceit
NOTE: It is essential
that the false
statement or
fraudulent
representation
constitutes the very
cause or the only
motive which induces
thecomplainanttopart
withthethingofvalue
Illegalrecruitmentandestafacasesmaybefiled
simultaneouslyorseparately.Thefilingofchargesfor
illegalrecruitmentdoesnotbarthefilingofestafa,and
viceversa.
Doublejeopardywillnotset
(c)Liabilities
Q: What is the liabilityof theprivate employment

agency and the principal or foreignbased
employer?
A: They are jointly and severally liable for any

violation of the recruitment agreement and the
contractsofemployment.
Note: This joint and solidary liability imposed by law

against recruitment agencies and foreign Ers is meant
to assure the aggrieved worker of immediate and
sufficient payment of what is due him. If the
recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the
case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the
claims and damages. (Becmen Service Exporter and
Promotion v. Cuaresma, G.R. Nos. 18297879, April 7,
2009)
Q:Whatisthetheoryofimputedknowledge?
A: A rule in insurance law that any information

materialtothetransaction,eitherpossessedbythe
agent at the time of the transaction or acquired by
him before its completion, is deemed to be the
knowledge of the principal, at least so far as the
transaction is concerned, even though in fact the
knowledge is not communicated to the principal at
all.(Leonorv.FilipinasCompania,48OG243)
Q: Sunace International Management Services
(Sunace),deployedtoTaiwanMontehermozoasa
domestic helper under a 12month contract
effective Feb. 1, 1997. The deployment was with
the assistance of a Taiwanese broker, Edmund
Wang, President of Jet Crown International Co.,
Ltd. After her 12month contract expired on Feb.
1,1998,Montehermozocontinuedworkingforher
Taiwanese employer for two more years, after
which she returned to the Philippines on Feb. 4,
2000. Shortly after her return she file before the
NLRC against Sunace, one Perez, the Taiwanese
broker,andtheemployerforeignprincipalalleging
that she was jailed for three months and that she
was underpaid. Should Sunace be held liable for
the underpayment for the additional two years
that she worked for her Taiwanese employer
underthetheoryofimputedknowledge?
A: No, the theory of imputed knowledge ascribes

the knowledge of the agent, Sunace, to the
principal Taiwanese employer, not the other way
around. The knowledge of the principalforeign
employer cannot, therefore, be imputed to its
agentSunace.
There being no substantial proof that Sunace knew

of and consented to be bound under the 2year
employment contract extension, it cannot be said
to be privy thereto. As such, it and its owner
cannot be held solidarily liable for and of
Montehermozos claims arising from the 2year
employment extension. (Sunace v. NLRC, G.R. No.
161757,Jan.25,2006)
(d)Preteminationofcontractofmigrantworker
Q: Serrano, a seafarer, was hired by Gallant

Maritime and Marlow Navigation Co. for 12
months as Chief Officer. On the date of his
departure, he was constrained to accept a
downgradedemploymentcontractfortheposition
of Second Officer, upon the assurance that he
wouldbemadeChiefOfficerafteramonth.Itwas
not done; hence, he refused to stay on as Second
Officer and was repatriated to the Phils. He had
served only 2 months & 7 days of his contract,
leaving an unexpired portion of 9 months & 23
days.
Serrano filed with the LA a Complaint against

Gallant Maritime and Marlow for constructive


LABORLAWTEAM:
14
dismissal and for payment of his money claims.
The LA rendered a favorable decision to Serrano
awarding him $8,770.00, representing his salary
for 3 months of the unexpired portion of his
contract of employment applying R.A. 8042, Sec
10,par5:
MoneyClaims.Incaseofterminationofoverseas
employment without just, valid or authorized
cause as defined by law or contract, the workers
shall be entitled to the full reimbursement of his
placement fee with interest of 12% per annum,
plus his salaries for the unexpired portion of his
employment contract or for 3 months for every
yearoftheunexpiredterm,whicheverisless.
Isthesubjectclauseconstitutional?
A: No. The subject clause contains a suspect

classification in that, in the computation of the
monetary benefits of fixedterm employees who
are illegally discharged, it imposes a 3month cap
ontheclaimofOFWswithanunexpiredportionof
one year or more in their contracts, but none on
the claims of other OFWs or local workers with
fixedtermemployment.Thesubjectclausesingles
outoneclassificationofOFWsandburdensitwitha
peculiardisadvantage.
TheclauseisaviolationoftherightofSerranoand
other OFWs to equal protection and right to
substantive due process, for it deprives him of
property, consisting of monetary benefits, without
anyexistingvalidgovernmentalpurpose.
Furthermore, prior to R.A. 8042, all OFWs,

regardless of contract periods or the unexpired
portionsthereof,weretreatedalikeintermsofthe
computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a
uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their
employment contracts. The same applies local
workerswithfixedtermemployment.
Thus, Serrano is entitled to his salaries for the

entireunexpiredperiodofninemonthsand23days
of his employment contract, pursuant to law and
jurisprudence prior to the enactment of RA 8042.
(Serrano v. Gallant Maritime Services & Marlow
NavigationCo.,Inc.,G.R.No.167614,Mar.24,2009)
c.DirectHiring
Q:WhatisDirecthiring?
A: It is when an employer hires a Filipino worker

for overseas employment without going through
thePOEAorentitiesauthorizedbytheSecretaryof
Labor.
Q:Whatisthebanondirecthiring?
A: GR: An Er may only hire Filipino worker for

overseas employment through POEA or
entitiesauthorizedbyDOLE.
XPN:
Directhiringby
1. Internationalorganizations
2. Namehires
3. Membersofthediplomaticorganizations
4. OtherErsasmaybeallowedbyDOLE
Q:Whyisdirecthiringprohibited?
A:
1. To ensure the best possible terms and
conditionsofemploymentfortheworker.
2. ToassuretheforeignErthathehiresonly
qualifiedFilipinoworkers.
3. To ensure full regulation of employment
inordertoavoidexploitation.
2.REGULATIONANDENFORCEMENT
a.Remittanceofforeignexchangeearnings
Q: What is the rule on remittance of foreign

exchangeearnings?
A:GR:ItshallbemandatoryforallOFWstoremita
portion of their foreign exchange earnings
to their families, dependents, and/or
beneficiaries ranging from 50% 80%
depending on the workers kind of job.
(RuleVIII,BookIII,POEARules)
XPN:
1. Theworkersimmediatefamilymembers,
beneficiariesanddependentsareresiding
withhimabroad
2. Immigrants andFilipino professionals and
employees working with the UN agencies
orspecializedbodies
3. Filipino servicemen working in U.S.
military installations. (Resolution No. 1
83, InterAgency Committee for
ImplementationofE.O.857)
Q:Whatistheeffectoffailuretoremit?
A:
1. WorkersShallbesuspendedorremoved
from the list of eligible workers for
overseasemployment.

15
2. Employers Will be excluded from the
overseas employment program. Private
employment agencies shall face
cancellation or revocation of their
licenses or authority to recruit. (Sec. 9,
E.O.857)
b.ProhibitedActivities
Q: What are prohibited practices in

recruitment/placement(Art.34.)?
A:
1. Furnishing or publishing any false
notice/information/document related to
recruitment/employment
2. FailuretofilereportsrequiredbySLE
3. Inducingorattemptingtoinduceaworker
alreadyemployedtoquithisemployment
in order to offer him another unless the
transfer is designed to liberate a worker
fromoppressivetermsandconditions
4. Recruitment/placement of workers in
jobs harmful to public health or morality
ortothedignityofthecountry
5. Engaging directly or indirectly in the
managementofatravelagency
6. Substituting or altering employment
contractswithoutapprovalofDOLE
7. Chargingoracceptinganyamountgreater
than that specified by DOLE or make a
worker pay any amount greater than
actuallyreceivedbyhim
8. Committing any act of misrepresentation
tosecurealicenseorauthority
9. Influencingorattemptingtoinfluenceany
person/entity not to employ any worker
who has not applied of employment
throughhisagency
10. Obstructing or attempting to obstruct
inspection by SLE or by his
representatives
11. Withholding or denying travel documents
from applicant workers before departure
for monetary considerations other than
authorizedbylaw
12. Granting a loan to an OFW which will be
used for payment of legal and allowable
placementfees
13. Refusingtocondoneorrenegotiatealoan
incurredbyanOFWafterhisemployment
contract has been prematurely
terminated through no fault of his or her
own
14. For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the
processing of pending workers'
applications;and
15. For a recruitment/manning agency or a
foreign principal/ Er to pass on the OFW
or deduct from his or her salary the
payment of the cost of insurance fees,
premium or other insurance related
charges, as provided under the
compulsoryworker'sinsurancecoverage
16. Imposing a compulsory and exclusive
arrangementwherebyanOFWisrequired
to:
a. Avail a loan only from specifically
designated institutions, entities or
persons
b. Toundergohealthexaminationsonly
from specifically designated medical,
entities or persons, except seafarers
whose medical examination cost is
shoulderedbytheshipowner
c. To undergo training of any kind only
from designated institutions, entities
or persons, except for
recommendatory trainings
mandated by principals/shipowners.
(Sec.6,R.A.10022)
c.RegulatoryandVisitorialPowersoftheLabor
Secretary
Q: What are the regulatory powers of the

SecretaryofLaborandEmployment(SLE)?
A:
1. Restrictandregulatetherecruitmentand
placementactivitiesofallagencies
2. Issue orders and promulgate rules and
regulations
Q:Whatconstitutevisitorialpower?
A:
1. Access to employers records and
premises at any time of the day or night,
wheneverworkisbeingundertaken
2. Tocopyfromsaidrecords
3. Question any employee and investigate
any fact, condition or matter which may
be necessary to determine violations or
which may aid in the enforcement of the
Labor Code and of any labor law, wage
order, or rules and regulation issued
pursuantthereto.
Q: Give 4 instances where the visitorial power of

theSLEmaybeexercisedundertheLaborCode.
A:Powerto:


LABORLAWTEAM:
16
1. Inspect books of accounts and records of

any person or entity engaged in
recruitment and placement, require it to
submit reports regularly on prescribed
forms and act in violations of any
provisions of the LC on recruitment and
placement.(Art.37)
2. Have access to employers records and
premises to determine violations of any
placement.(Art.128)
3. Conduct industrial safety inspections of
establishments.(Art.165)
4. Inquire into the financial activities of
legitimate labor organizations (LLO) and
examinetheirbooksofaccountsuponthe
filing of the complaint under oath and
duly supported by the written consent of
at least 20% of the total membership of
theLOconcerned.
Q:CanSLEissuesearchwarrantsorwarrantsof
arrest?
A: No. Only a judge may issue search and arrest

warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE the
powertoissuesearchorarrestwarrants.Thelabor
authoritiesmustgothroughthejudicialprocess.
d.PenaltiesforIllegalRecruitment
Q:Whatistheconsequenceofconvictionofillegal
recruitment(IR)?
A:
PENALTIES(underR.A.10022)
Offender/Offense Penalty
IRaseconomic
sabotage
Provided:
1. Ifpersonillegally
recruitedisbelow
18yearsofageor
2. Illegal
recruitmentis
committedbya
nonlicensee/non
holder
Lifeimprisonment+
fineofP2MP5M
Maximumpenaltyshall
beimposed
Anypersonfound
guiltyofillegal
recruitment
12yrsand1day20yrs
imprisonment;or
Fine:P1MP2M
Anypersonfound
guiltyofthe
prohibitedacts
6yrsand1day12yrs
imprisonment;or
FineofP500KP1M
Licensee/holderof
authorityviolates
25yrsimprisonment;or
Fine:P10KP50K;
provisions orboth
Nonlicensee/non
holderofauthority
violatesprovisions
48yrsimprisonment;or
Fine:P20KP100K
orboth
Corporation,
partnership,
association,orentity
Penaltyimposedupon
officer/sresponsiblefor
violation
Alien
PenaltiesprescribedunderRA
10022,
+
Deportationwithoutfurther
proceedings
Ineverycase
Automaticrevocationof
licenseorauthorityandall
permitsandprivilegesofthe
recruitmentormanning
agency,lendinginstitutions,
trainingschoolormedical
clinic
Q: What are the remedies under the Migrant

WorkersActandhowmaytheybeenforced?
A:
CRIMINALACTIONS
RTC
Provinceorcity:
1. Wheretheoffensewascommittedor
2. Wheretheoffendedpartyactuallyresidesatthe
sametimeofthecommissionoftheoffense
MONEYCLAIMS
NLRC
Original and exclusive jurisdiction to hear and decide
claims arising out of an ErEe relationship or by virtue
of any law or contract involving Filipino workers for
overseas deployment including claims for actual,
moral,exemplaryandotherformsofdamages.
Theliabilityoftheprincipal/Erandtherecruitment/
placement agency for any and all claims shall be
jointandseveral.
The performance bond to de filed by the
recruitment/ placement agency shall be answerable
for all money claims or damages that may be
awardedtotheworkers.
If the recruitment/placement agency is a juridical
being, the corporate officers and directors and
partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or
partnershipfortheclaimsanddamages.
ADMINISTRATIVEACTIONS
POEA

17
Originalandexclusivejurisdictiontohearanddecide:
1. All cases which are administrative in character,
involving or arising out of violations of rules and
regulations relating to licensing and registration of
recruitment and employment agencies or entities
and
2. Disciplinaryaction(DA)casesandotherspecialcases
which are administrative in character, involving Ers,
principals, contracting partners and Filipino migrant
workers.
a.ItmaybefiledwiththePOEAAdjudicationOffice
or the DOLE/POEA regional office of the place
wherethecomplaintappliedorwasrecruitedat
the option of the complainant. The office with
which the complaint was first filed shall take
cognizanceofthecase.
b. DA cases and other special cases, as mentioned
in the preceding Section, shall be filed with
POEAAdjudicationOffice.
PERIODS
MandatoryPeriodforResolutionofIllegal
RecruitmentCases
The preliminary investigations (PI) of cases under R.A.
10022 shall be terminated within a period of 30
calendardaysfromthedateoftheirfiling.
IfthePIisconductedbya
prosecutionofficeranda
primafaciecaseis
established
IfthePIisconductedby
ajudgeandaprima
faciecaseisfoundto
exist
Informationshallbefiled
incourtwithin24hours
fromtheterminationof
theinvestigation
Prosecutionofficer
within48hoursfromthe
dateofreceiptofthe
recordsofthecase.(Sec.
11)
PrescriptivePeriodforIllegalRecruitmentCases
SimpleIllegalRecruitment EconomicSabotage
Within5yrsfromthetime
illegalrecruitmenthas
happened
Within20yrsfromthe
timeillegalrecruitment
hashappened.(Sec.
12,R.A.8042)
Q: Is compromise agreement on money claims

allowed?
A: Yes. Consistent with the policy encouraging

amicable settlement of labor disputes, Sec. 10 of
R.A.8042allowsresolutionbycompromiseofcases
filedwiththeNLRC.
Q: When shall compromise agreements on money

claimsbepaid?
A: Any compromise/amicable settlement or

voluntary agreement on money claims inclusive of
damages shall be paid within 4 months from the
approval of the settlement by the appropriate
authority.
Do OT and leave pay form part of the salary basis

inthecomputationofthemonetaryaward?
A: No. The word salaries in Sec. 10(5) does not

include overtime and leave pay. For seafarers,
DOLE Department Order No. 33, series 1996,
provides a Standard Employment Contract of
Seafarers,inwhichsalaryisunderstoodasthebasic
wage,exclusiveofOT,leavepayandotherbonuses;
whereas OT pay is compensation for all work
performed in excess of the regular 8 hours, and
holiday pay is compensation for any work
performedondesignatedrestdaysandholidays.
(Serrano v. Gallant Maritime Services & Marlow
Navigation Co., Inc., G.R. No. 167614, Mar. 24,
2009)
3.OTHERRELATEDTOPICS
PhilippineOverseasEmploymentAdministration
Q:WhataretheprincipalfunctionsofthePOEA?
A:
1. Protection of the right of Filipino workers
to fair and equitable employment
practices
2. Regulation of private sector participation
in the recruitment and overseas
placement of workers by setting up a
licensingandregistrationsystem
3. Deployment of Filipino workers through
govttogovthiring
4. Formulation, implementation, and
monitoring of overseas employment of
Filipino workers taking into consideration
their welfare and domestic manpower
requirements
5. Shall inform migrant workers not only of
their rights as workers but also of their
rightsashumanbeings,instructandguide
theworkershowtoasserttheirrightsand
provide the available mechanism to
redress violation of their rights. (Sec. 14,
R.A.10022)
6. Implementation, in partnership with
other lawenforcement agencies, of an
intensified program against illegal
recruitment activities. (Sec. 14, R.A.
10022)
Q:MaythePOEA,atanytimeterminateorimpose
abanonemploymentofmigrantworkers?
A: Yes, in consultation with the DFA based on the

ff.grounds:
2. InpursuitoftheNationalInterestor


LABORLAWTEAM:
18
3. When public welfare so requires. (Sec. 4
R.A.10022)
Q: What are the minimum conditions/ provisions

ofoverseasemploymentcontracts?
A:
1. Guaranteed wages for regular hours and
overtime, not lower than the minimum
wageprescribedinalloftheff:
a. Thehostcountry
b. Bilateralagreementsorinternational
conventions ratified by the host
countryandthePhilippines
c. ThePhilippines
2. Free transportation to and from the
worksiteoroffsettingbenefit
3. Free food and accommodation or
offsettingbenefit
4. Just/authorized causes of termination of
thecontractorservicesoftheworker
Note: An agreement that diminishes the Ees pay and

benefits as contained in a POEAapproved contract is
void, unless such subsequent agreement is approved
bythePOEA.
Q:WhatistheruleondeploymentofOFWs?
A:TheStateshallallowthedeploymentofOFWs:
1. Only in countries where the rights of

Filipinomigrantworkersareprotected.
2. To vessels navigating the foreign seas or
to installations located offshore or on
high seas whose owners/Ers are
compliant with international laws and
standards that protect the rights of
migrantworkers.
3. To companies and contractors with
international operations: Provided, That
they are compliant with standards,
conditions and requirements, as
embodied in the employment contracts
prescribedbythePOEAandinaccordance
with internationallyaccepted standards.
(Sec.3,R.A.10022amendingR.A.8042)
Q: What are the guarantees of the receiving

countryfortheprotectionoftherightsofOFWs?
A:
1. It has existing labor and social laws
protectingtherightsofworkers,including
migrantworkers;
2. It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers,includingmigrantworkers;and
3. It has concluded a bilateral agreement or
arrangementwiththegovernmentonthe
protectionoftherightsofOFWs..(Sec.3,
R.A.10022amendingR.A.8042)
Provided, that the receiving country is taking

positive,concretemeasurestoprotecttherightsof
migrant workers in furtherance of any of the
guarantees.
Note:Intheabsenceofaclearshowingthatanyofthe
guarantees exists in the country of destination of the
migrant workers, no permit for deployment shall be
issuedbythePOEA.
Q:Whatistheruleonrepatriation?
A:GR:Therepatriationofthe:
1. Worker and the transport of his personal
belongings shall be the primary
responsibility of the agency which
recruited or deployed the worker
overseas.
2. Remains and transport of the personal
belongings of a deceased worker and all
costs attendant thereto shall be borne
bytheprincipaland/orthelocalagency.
XPNs:
1. If the termination of employment is due
solely to the fault of the worker, the
principal/ Er or agency shall not be
responsible for the repatriation of the
formerand/orhisbelongings
2. In cases of war, epidemic, disaster or
calamities, natural or manmade, and
other similar event, and where the
principalorrecruitmentagencycannotbe
identified, the Overseas Workers Welfare
Administration, in coordination with
appropriate international agencies, shall
take charge of the repatriation. (Sec.15,
R.A.8042)
Q: What is the rule on mandatory repatriation of

underagemigrantworkers?
A: Upon discovery or being informed of the

presenceofmigrantworkerswhoseagesfallbelow
the minimum age requirement for overseas
deployment, the responsible officers in the foreign
service shall without delay repatriate said workers
and advise the DFA through the fastest means of
communication available of such discovery and
other relevant information. The license of a
recruitment/manning agency which recruited or
deployed an underage migrant worker shall be
automatically revoked and shall be imposed a fine

19
of not less than P500,000 but not more than
P1,000,000.(Sec.9,R.A.10022)
Q: What are the regulatory and adjudicatory

functionsofthePOEA?
A:
1. Regulatory It regulates the private
sector participation in the recruitment
and overseas placement of workers
through its licensing and registration
system.
2. Adjudicatory
a. Administrative cases involving
violations of licensing rules and
regulations and registration of
recruitment and employment
agenciesorentities
b. Disciplinary action cases and other
special cases which are
administrative in character involving
employers, principals, contracting
partnersandFilipinomigrants.
Q: What are the grounds for disciplinary action of

OFWs?
A:UnderR.A.8042,theseare:
1. Prostitution
2. Unjustrefusaltodepartfortheworksite
3. Gunrunning or possession of deadly
weapons
4. Vandalism or destroying company
property
5. Violationofthelawsandsacredpractices
ofthehostcountryandunjustifiedbreach
ofemploymentcontract
6. Embezzlement of funds of the company
orfellowworkerentrustedfordeliveryto
relativesinthePhils.
7. Creating trouble at the worksite or in the
vessel
8. Gambling
9. Initiating or joining a strike or work
stoppage where the laws of the host
countryprohibitsstrikesorsimilaractions
10. Commission of felony punishable by
Philippinelawsorbythehostcountry
11. Theftorrobbery
12. Drunkenness
13. Drugaddictionorpossessionortrafficking
ofprohibiteddrugs
14. Desertionorabandonment
Q:Whatisthedistinctionbetweenthejurisdiction
oftheLAandPOEA?
A:
JURISDICTION
LaborArbiter POEA
Original and exclusive
jurisdiction over all
claims arising out of
ErEe relationship or
byvirtueofanylawor
contract involving
OFWsincludingclaims
for:
1.Actual
2.Moral
3.Exemplary
4.Other forms of
damages. (Sec. 10,
R.A.8042)
Original and exclusive
jurisdictionover:
1. All cases which are
administrative in character
relating to licensing and
registration of recruitment
andemploymentagencies
2. Disciplinary Action cases

and other special cases,
which are administrative in
character, involving Ees,
principals, contracting
partners and Filipino migrant
workers. (Rule VII, Book VII,
POEARules)
Q: A seafarer was prevented from leaving the

port of Manila and refused deployment without
valid reason. His POEAapproved employment
contract provides that the employeremployee
relationship shall commence only upon the
seafarers actual departure from the port in the
point of hire. Is the seafarer entitled to relief
undertheMigrantWorkersAct,intheabsenceof
anemployeremployeerelationship?
A: Yes. Despite the absence of an employer

employee relationship, the NLRC has jurisdiction
over the seafarers complaint. The jurisdiction of
labor arbiters is not limited to claims arising from
ErEe relationships. Sec. 10of the Migrant Workers
Act provides that the labor arbiters shall have
jurisdiction over claims arising out of an ErEe
relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and
other forms of damages. Since the present case
involves the employment contract entered into by
petitioner for overseas employment, his claims are
cognizable by the labor arbiters of the NLRC.
(Santiago v. CF Sharp Crew Management,G.R. No.
162419,July10,2007)
Q:Whatmattersfalloutsidethejurisdictionofthe
POEA?
A:
1. Foreign judgments such claim must be
brought before regular courts. POEA is
notacourt;itisanadministrativeagency,
exercising adjudicatory or quasijudicial
functions.
2. Torts falls under the provisions of the
CivilCode.


LABORLAWTEAM:
20
EmploymentofNonResidentAliens

Q: What is required in the employment of non
residentaliens?
A: Any alien seeking admission to the Phil. for

employment purposes and anydomestic or foreign
employer (Er) who desires to engage an alien for
employmentinthePhilippines:
1. Shall obtain an employment permit from
theDOLE
2. The permit may be issued to a non
resident alien or to the applicant Er after
a determination of the nonavailability of
a person in the Phil. who is competent,
ableandwillingatthetimeofapplication
to perform the services for which the
alienisdesired
3. For an enterprise registered in preferred
areas of investments, said permit may be
issueduponrecommendationofthegovt
agency charged with the supervision of
saidregisteredenterprise
Q: The DOLE issued an alien employment permit

for Earl Cone, a U.S. citizen, as sports consultant
and assistant coach for GMC. Later, the Board of
Special Inquiry of the Commission on Immigration
andDeportationapprovedConesapplicationfora
changeofadmissionstatusfromtemporaryvisitor
to prearranged employee. A month later, GMC
requested that it be allowed to employ Cone as
fullfledged coach. The Dole Regional Director
grantedtherequest.TheBasketballAssociationof
the Phils. appealed the issuance of said permit to
the SLE who cancelled Cones employment permit
because GMC failed to show that there is no
person in the Philippines who is competent and
willing to do the services nor that the hiring of
Cone would redound to the national interest. Is
theactofSLEvalid?
A:Yes.GMCsclaimthathiringofaforeigncoachis
anErsprerogativehasnolegalbasis.UnderArt.40
of the LC, an Er seeking employment of an alien
must first obtain an employment permit from the
DOLE. GMCs right to choose whom to employ is
limited by the statutory requirement of an
employmentpermit.(GMCv.Torres,G.R.No.9366,
April22,1991)
Art.41.ProhibitionAgainstTransferofEmployment
Q: Who are required to obtain an employment

permit?
A:GR:Onlynonresidentaliens;
XPNS:
1. Diplomatic services and foreign govt
officials
2. Officers and staff of intl organizations
andtheirlegitimatespouses
3. Members of governing board who has
votingrightsonly
4. Thoseexemptedbyspeciallaws
5. Owners and representatives of foreign
principals who interview Filipino
applicantsforemploymentabroad
6. Alienswhosepurposeistoteach,present
and/orconductresearchstudies
7. Resident aliens. (D.O. 7506, May 31,
2006)
Q: May the nonresident alien transfer

employment after issuance of the employment
permit?
A:Aftertheissuanceofanemploymentpermit,the
alienshallnottransfertoanotherjoborchangehis
employerwithoutpriorapprovaloftheSecretaryof
Labor.
Q: What is required for immigrants and resident

aliens?
A:AnAlienEmploymentRegistrationCertificate.
Q: What is the duration of the employment

permit?
A:GR:Minimumof1year
XPN:Unlessrevokedandsubjecttorenewal
Q: May aliens be employed in entities engaged in

nationalizedactivities?
A:GR:No.
XPNs:
1. Sec. of Justice specifically authorizes the
employmentoftechnicalpersonnel
2. Aliens are elected members of the board
of directors or governing body of
corporationsorassociationsor
3. EnterprisesregisteredundertheOmnibus
Investment Code in case of technical,
supervisory or advisory positions, but for
alimitedperiod.

21
Art.25.PrivateSectorParticipationinthe
RecruitmentandPlacementofWorkers
Q:Whataretheentitiesintheprivatesectorsthat
can participate in recruitment and placement of
workers?
A:
1. Shipping or manning agents or
representatives
2. Privaterecruitmentoffices
3. Publicemploymentoffices
4. Construction contractors if authorized by
the DOLE and Construction Industry
Authority.
5. Persons that may be authorized by the
SLE
6. Private employment agencies. (Sec. 1,
RuleVII,BookI,IRR)
Q: What are the qualifications for participation in

recruitmentandplacementofworkers?
A:
1. Filipino citizens, partnerships or
corporations at least 75% of the
authorized capital stock of which is
owned and controlled by Filipino citizens;
(Art.27,LC)
2. Capitalization
a. Singleproprietorshiporpartnership
A minimum capitalization of P2
million
b. Corporation
A minimum paidup capital of P2
million
Provided,thatthosewithexistinglicenses
shall, within 4 yrs from the effectivity
hereof, increase their capitalization or
paidupcapital,asthecasemaybe,toP2
million at the rate of P250,000.00 every
year.(Art.28,LC)
3. Nototherwisedisqualifiedbylaworother
government regulations to engage in the
recruitmentandplacementofworkersfor
overseas employment. (Rule I, Part II,
POEARules)
4. Paymentofregistrationfees
5. Postingofsurety/cashbonds
Q: How will POEA regulate private sector

participation in the recruitment and overseas
placementofworkers?
A:Bysettingupalicensingandregistrationsystem.
(Sec.14,R.A.10022)
Q: Is a corporation, 70% of the authorized and

votingcapitalofwhichisownedandcontrolledby
Filipino citizens, allowed to engage in the
recruitment and placement of workers, locally or
overseas?Explainbriefly.
A: No. It is because Art. 27 of the Labor Code

requiresatleast75%.(2002BarQuestion)
Q: Who are disqualified to engage in the business

ofrecruitmentandplacementofworkers?
A:
1. Travel agencies and sales agencies of
airlinecompanies;(Art.26,LC)
2. Officers or members of the board of any
corporation or members in a partnership
engaged in the business of a travel
agency;
3. Corporations and partnerships, when any
of its officers, members of the board or
partners,isalsoanofficer,memberofthe
board or partner of a corporation or
partnership engaged in the business of a
travelagency;
4. Persons, partnerships or corporations
which have derogatory records, such as
butnotlimitedtothose:
a. Certified to have derogatory record
or information by the NBI or by the
AntiIllegal Recruitment Branch of
thePOEA;
b. Against whom probable cause or
prima facie finding of guilt for illegal
recruitment or other related cases
exists;
c. Convicted for illegal recruitment or
other related cases and/or crimes
involvingmoralturpitude;and
d. Agencies whose licenses have been
previously revoked or cancelled by
the POEA for violation of R.A. 8042,
P.D. 442 as amended and their
implementing rules and regulations
as well as these rules and
regulations.
5. Any official or Ee of the DOLE, POEA,
OWWA, DFA and other government
agencies directly involved in the
implementation of R.A. 8042 and/or any
of his/her relatives within the 4
th
civil
degreeofconsanguinityoraffinity;and
6. Personsorpartners,officersanddirectors
ofcorporationswhoselicenseshavebeen
previously cancelled or revoked for
violationofrecruitmentlaws.(Sec.2,Rule
I, 2002 Rules and Regulations on the


22
LABORLAWTEAM:
Recruitment and Employment of Land

BasedWorkers)
Art.26.TravelAgenciesProhibitedtoRecruit
Q: What is the rule on recruitment of travel

agenciesandsalesagenciesofairlinecompanies?
A: They are prohibited from engaging in the

business of recruitment and placement of workers
foroverseasemploymentwhetherforprofitornot.
Q: WTTA is a wellknown travel agency and an

authorized sales agent of the PAL. Since majority
of its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities. It stated in its application
that its purpose is not for profit but to help
Filipinos find employment abroad. Should the
applicationbeapproved?
A: The application should be disapproved, as it is

prohibited by Art. 26 of the LC, to wit: "Art 26.
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of workers
for overseas employment whether for profit or
not." Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of
LandBased Workers (2002) disqualifies any entity
having common director or owner of travel
agencies and sales agencies of airlines, including
any business entity from the recruitment and
placement of Filipino workers overseas, whether
theyderiveprofitornot.(2006BarQuestion)
Art.32.FeestobePaidbyWorkers
Q:Whenmayaworkerbechargedanyfee?
A:Onlywhen:
1. He has obtained work through recruiters

efforts,and
2. The worker has actually commenced
working
Note: A land based agency may charge and collect

from its hired workers a placement fee in an amount
equivalent to 1 month salary, exclusive of
documentationcosts.
Q: What are the only authorized payments that

maybecollectedfromahiredworker?
A:
1. Placement fee in an amount equivalent
toonemonthssalaryoftheworkerand
2. Documentationcosts.
LABOR STANDARDS

23
C.LABORSTANDARDS
1.HOURSOFWORK
a.Coverage/Exclusions
Q:Whodeterminesworkingconditions?
A:Generally,theyaredeterminedbytheemployer,
as he is usually free to regulate, according to his
discretion,allaspectsofemployment.
Q:Whatisthelimitationontheemployerspower
toregulateworkingconditions?
A: It must be done in good faith and not for the

purposeofdefeatingorcircumventingtherightsof
the employees. Such are not always absolute and
must be exercised with due regard to the rights of
labor.
Note: Ones employment, profession, trade or calling

is a property right and the wrongful interference
therewithisanactionablewrong.
Q:Whendoestheconditiononemploymentunder
theLaborCodeapply?
A:OnlyifanErEerelationshipexists.
Q:Whoaretheemployeesthatarecoveredbythe
conditionsofemployment?
A:GR:ItappliestoallEesinallestablishments.
XPN:
1. Govtemployees
2. Managerialemployees
3. Fieldpersonnel
4. The employers family members who
dependonhimforsupport
5. Domestic helpers and persons in the
personalserviceofanother,and
6. Workers who are paid by results as
determinedunderDOLEregulations
Q:Whoaregovernmentemployees(Ees)?
A:TheyareEesofthe:
1. NationalGovernment
2. Anyofitspoliticalsubdivisions
3. Including those employed in GOCCs with
originalcharters.
Q:WhatlawgovernsgovernmentEes?
A:TheCivilServiceLaw,rulesandregulations.
Q:WhoaremanagerialEes?
A: Those whose primary duty consists of the

management of the establishment in which they
are employed or a department or subdivision
thereof, and other officers or members of the
managerialstaff.
Theymustmeetalloftheff.conditions,namely:
1. Primary duty: management of the

establishment in which they are
employed or of a department or sub
divisionthereof;
2. Customarily or regularly direct the work
of2ormoreEes
3. HastheauthoritytohireorfireotherEes
of lower rank; or their suggestions and
recommendations as to the hiring and
firing and as to the promotion or any
change of status of other Ees are given
particularweight.
4. Execute under general supervision work
along specialized or technical lines
requiring special training, experience, or
knowledge
5. Executeundergeneralsupervisionspecial
assignmentandtasks;and
6. Do not devote more than 20% of their
hours worked to activities which are not
directly and closely related to
performance of the work described. (Art.
82[2])
Q:WhyaremanagerialEesnotcovered?
A: They are employed by reason of their special

training, expertise or knowledge and for positions
requiring the exercise of discretion and
independent judgment. Value of work cannot be
measuredintermsofhours.
Q:Whoarefieldpersonnel?
A:Theyare:
1. nonagriculturalemployees
2. whoregularlyperformtheirduties
3. away from theprincipal place of business
orbranchofficeoftheemployer;and
4. whose actual hours of work in the field
cannot be determined with reasonable
certainty.
Q:Whoareworkerspaidbyresults?
A:Theyare:


LABORLAWTEAM:
24
1. paidbasedontheworkcompleted;and
2. notonthetimespentinworking
3. including those who are paid on piece
work, takay, pakiaw, or task basis if
their output rates are in accordance with
thestandardsprescribed.
Q: Who are domestic helpers and persons in the

personalserviceofanother?
A:Thosewho:
1. perform services in the employers (Er)

home which are usually necessary or
desirable for the maintenance or
enjoymentthereof;or
2. minister to the personal comfort,
convenienceorsafetyoftheEraswellas
themembersofhisErshousehold.
Q: A house personnel was hired by a ranking

company official to maintain a staff house
provided for the official. The personnel is being
paidbythecompanyitself.Isthehousepersonnel
adomesticservantofthecompanyofficial?
A:No,thepersonnelisnotadomestichelperbuta
regularemployeeofthecompany.
Q: What are the 3 groups of employees (Ees)

undertheLC?
A:
1. Managerial Ee One who is vested with
the powers or prerogatives to lay down
and execute management policies and/or
to hire, transfer, suspend, layoff, recall,
discharge,assignordisciplineEes.
2. SupervisoryEethosewhointheinterest
of the Er, effectively recommend such
managerial actions if the exercise of such
authority is not merely routinary or
clerical in nature but requires the use of
independentjudgment.
3. RankandFileEeallEesnotfallingwithin
anyoftheabovedefinitions.(Art.212[m])
b.Normalhoursofwork
Q:WhatarethenormalhoursofworkofanEe?
A:Itshouldnotexceed8hoursinageneralworking
day.
Note: Normal hours of work may be shortened or

compressed.
Q:Whatareconsideredhoursworked?
A:
1. AlltimeduringwhichanEeisrequiredto
be:
a. Onduty,or
b. AttheErspremises,or
c. Ataprescribedworkplace
2. All time duringwhich an Ee is suffered or

permittedtowork.(Sec.3,RuleI,BookIII,
IRR)
Q: What are the principles in determining hours

worked?
A:
1. All hours which the Ee is required to give
to his Er regardless of whether or not
such hours are spent in productive labor
orinvolvephysicalormentalexertion.
2. Rest period is excluded from hours
worked, even if Ee does not leave his
workplace,itbeingenoughthat:
a. Hestopsworking
b. Mayrestcompletely
c. May leave his workplace, to go
elsewhere, whether within or
outside the premises of the
workplace
3. All time spent for work is considered
hoursworkedif:
a. The work performed was
necessary
b. IfitbenefitedtheEr
c. OrtheEecouldnotabandonhis
work at the end of his normal
working hours because he had
noreplacement
d. Provided,theworkwaswiththe
knowledge of his Er or
immediatesupervisor
4. ThetimeduringwhichanEeisinactiveby
reasons of interruptions in his work
beyond his control shall be considered
workingtime:
a. If the imminence of the
resumption of the work
requires the Ees presence at
theplaceofworkor
b. If the interval is too brief to be
utilized effectively and gainfully
in the Ees own interest. (Sec. 4,
RuleI,BookIII,IRR)
LABOR STANDARDS

25
(a)Exceptions:HealthPersonnel&Compressed
WorkWeek
HealthPersonnel
Q: What are the hours of work of health

personnel?
A: GR: 8 hours/5 days (40hour work week),
exclusiveoftimeformeals.
XPN: Where the exigencies of the service
require that such personnel work for 6 days or
48hours,theyshallbeentitledtoanadditional
compensation of at least 30% of their regular
wageforworkonthe6
th
day.
Note: 40hour work week does not apply if there is a
training agreement between the resident physician
and the hospital and the training program is duly
accredited or approved by appropriate government
agency.
Q:Whoarecoveredbythe40hourworkweek?
A:
1. Health personnel in cities and
municipalities with a population of at
least1million;or
2. Hospitals and clinics with a bed capacity
ofatleast100
Note:Art.83(2)donotrequirehospitalstopaythe
Ees a full weekly salary with paid 2 days off. (San
Juan de Dios Ees Assoc.AFW et al. vs. NLRC, G.R.
No.126383,Nov.28,1997)
CompressedWorkweek
Q:Whatisacompressedworkweek?
A: The normal workweek is reduced to less than 6

days but the total number of workhours of 48
hoursperweekshallremain.Thenormalworkdayis
increased to more than 8 hours but not to exceed
12 hours, without corresponding overtime
premium. The concept can be adjusted accordingly
depending on the normal workweek of the
company.(DepartmentAdvisoryOrderNo.2,Series
of2009)
Q: When is the implementation of a compressed

workweekvalid?
A: The validity of the reduction of working hours

canbeupheldwhenthearrangementistemporary,
it is a more humane solution instead of a
retrenchment of personnel, there is notice and
consultations with the workers and supervisors, a
consensus is reached on how to deal with
deteriorating economic conditions and it is
sufficiently proven that the company was suffering
from losses. Under the Bureau of Working
Conditions bulletin, a reduction of the number of
regular working days is valid where the
arrangement is resorted to by the employer to
prevent serious losses due to causes beyond his
control,suchaswhenthereisasubstantialslumpin
thedemandforhisgoodsorservicesorwhenthere
is lack of raw materials. There is one main
consideration in determining the validity of
reductionofworkinghoursthatthecompanywas
suffering from losses. A year of financial losses
would not justify a reduced workweek. (Linton
Commercialv.Hellera,G.R.No.163147,October10,
2007)
Q: Under what conditions may a "compressed

work week" schedule be legally authorized as an
exception to the "8hour a day" requirement
undertheLC?
A:
1. TheEevoluntarilyagreestoit
2. There is no diminution in their weekly or
monthlytakehomepayorfringebenefits
3. The benefits are more than or at least
commensurate or equal to what is due
the Ees without the compressed work
week
4. OTpaywillbedueanddemandablewhen
they are required to work on those days
which should have ceased to be working
days because of the compressed work
weekschedule.
5. No strenuous physical exertion or that
theyaregivenadequaterestperiods.
6. It must be for a temporary duration as
determined by the DOLE. (2005 Bar
Question)
Q: What are the requisites for adoption of

compressedworkweek?
A:
1. The Er shall notify the DOLE through the
Regional Office which has jurisdiction
over the workplace, of the adoption of
compressedworkweek.
2. The notice shall be in Report Form
attachedtotheadvisory.
3. The Regional Office shall conduct an
ocular visit to validate whether the
adoption of the flexible work
arrangements is in accordance with this
issuance.(DepartmentAdvisoryOrderNo.
2,Seriesof2009)


LABORLAWTEAM:
26
c.WorkinterruptionduetobrownoutS
Q: What are the guidelines on power
interruptions?
A:
1. Brownouts of short duration but not
exceeding 20 minutes shall be treated as
worked or compensable hours whether
usedproductivelybytheemployees(Ees)
ornot.
2. Brownouts running for more than 20

minutes may not be treated as hours
worked provided any of the following
conditionsarepresent:
a. TheEescanleavetheirworkplaceor
go elsewhere within or without the
workpremises;or
b. The Ees can use the time effectively
fortheirowninterest.
3. In each case, the Er may extend the

working hours of his Ees outside the
regular schedules to compensate for the
loss of productive manhours without
beingliableforOTpay.
4. Industrial enterprises with one or two

work shifts may adopt any of the work
shift prescribed for enterprises with 3
work shifts to prevent serious loss or
damage to materials, machineries, or
equipmentthatmayresultcaseofpower
interruptions.(PolicyInstructionNo.36)
d.MealBreak
Q:Whatisthedurationofthemealperiod?
A: Every Er shall give his Ees not less than 60
minutesor1hourtimeoffforregularmeals.
Q:Isthemealperiodcompensable?
A: Being timeoff, it is not compensable. Employee
mustbecompletelyrelievedfromduty.
Q: When is the meal period considered
compensable?
A: It is compensable where the lunch period or
mealtime:
1. Ispredominantlyspentfortheemployers
benefit;or
2. Whereitislessthan20minutes
Note: Where during meal period, the laborers are

requiredtostandbyforemergencywork,orwherethe
meal hour is not one of complete rest, such is
considered OT. (Pan Am vs. Pan Am Ees Association,
G.R.No.L16275,Feb.23,1961)
Rest periods or coffee breaks running from 5 to 20
minutes shall be considered as compensable working
time.(Sec.7,RuleI,BookIII,IRR)
Q: Are meal periods provided during OT work

compensable?
A: Yes, since the 1 hour meal period (non

compensable) is not given during OT work because
thelatterisusuallyforashortperiodandtodeduct
fromthesamewouldreducetonothingtheEesOT
work. Thus, the 1 hour break for meals during OT
shouldbetreatedascompensable.
Q: What are the instances where meal periods
shortened to not less than 20 minutes is
compensableornotcompensable?
A:
1. Compensable At the instance of
Employer,when:
a. Work is nonmanual in nature or
does not involve strenuous physical
exertion;
b. Establishmentregularlyoperatesless
than16hoursaday;
c. Workisnecessarytopreventserious
lossofperishablegoods.
d. Actual or impending emergency or
thereisurgentworktobeperformed
on machineries and equipment to
avoidseriouslosswhichtheErwould
otherwisesuffer.(Sec.7,RuleI,Book
III,IRR)
2. Not Compensable Ee requested for the

shorter meal time so that he can leave
work earlier than the previously
establishedschedule.Requisites:
a. Ees voluntarily agree in writing and
are willing to waive OT pay for the
shortenedmealperiod;
b. No diminution in the salary and
other fringe benefits of the Ees
which are existing before the
effectivity of the shortened meal
period;
c. Work of the Ees does not involve
strenuousphysicalexertionandthey
are provided with adequate coffee
breaks in the morning and
afternoon;
LABOR STANDARDS

27
d. Value of the benefits derived by the
Ees from the proposed work
arrangements is equal to or
commensurate with the
compensation due them for the
shortenedmealperiodaswellasthe
OTpayfor30minutesasdetermined
bytheEesconcerned;
e. OT pay will become due and
demandable after the new time
schedule
f. Arrangement is of temporary
duration.
e.Idletime,waitingtime,commutingtime/travel
time,whetherpartofhoursofworkornot
Q: When is an Ee considered working while on

call?
A: When Ee is required to remain on call in the Ers
premisesorsoclosetheretothathecannotusethe
timeeffectivelyandgainfullyforhisownpurpose.
Q:Whenidletimeisconsideredworkingtime?
A: Whentheemployeeisidleorinactivebyreason
of interruptions beyond his control shall be
consideredworkingtime.
Q:Wheniswaitingtimeconsideredworkingtime?
A:
1. Ifwaitingisanintegralpartofhiswork,or
2. TheEeisrequiredorengagedbytheErto
wait(engagedtowait)
Note: The controlling factor is whether waiting time

spentinidlenessissospentpredominantlyfortheErs
benefitorfortheEe.
Q: When is waiting time not considered working

time?
A: When the Ee is waiting to be engaged: idle time
isnotworkingtime;itisnotcompensable.
Q:Whenistraveltimeconsideredworkingtime?
A:
1. Travelfromhometowork
GR: Normal travel from home to work is

notworkingtime.
XPNS:
a. Emergency call outside his regular
working hours where he is required
to travel to his regular place of
businessorsomeotherworksite.
b. Done through a conveyance
providedbytheemployer(Er).
c. Done under the supervision and
controloftheEr.
d. Done under vexing and dangerous
circumstance.
2. Travel that is all in a days work time

spent in travel as part of the employees
(Ees)principalactivity
e.g. travel from job site to job site during
the work day, must be counted as
workinghours.
3. Travelawayfromhome
GR:
a. Travel that requires an overnight
stay on the part of the Ee when it
cutsacrosstheEesworkdayisclearly
workingtime.
b. Thetimeisnotonlyhoursworkedon
regular workdays but also during
corresponding working hours on
nonworking days. Outside of these
regular working hours, travel away
from home is not considered
workingtime.
XPN: During meal period or when Ee is

permitted to sleep in adequate facilities
furnishedbytheEr.
Q: What are the conditions in order for lectures,

meetings and training programs to be not
consideredasworkingtime?
A:Alloftheff.conditionsmustbepresent:
1. Attendance is outside of the employers
regularworkinghours
2. Attendanceisinfactvoluntaryand
3. The employee does not perform any
productiveworkduringsuchattendance.
f.Overtimework:Undertimeoffsetbyovertime,
Waiverofovertime
Q:Whatisovertimework(OT)?
A: Work performed beyond 8 hours within the
workers24hourworkday.
Note: Express instruction from the employer (Er) to
the employee (Ee) to render OT work is not required
fortheEetobeentitledtoOTpay;itissufficientthat
the Ee is permitted or suffered to work. However,
written authority after office hours during rest days


LABORLAWTEAM:
28
and holidays are required for entitlement to
compensation.
Q:Whatisaworkday?
A: The 24hour period which commences from the
timetheemployeeregularlystartstowork
e.g. If the worker starts to work 8 am today, the
workdayisfrom8amtodayupto8amtomorrow.
Note: Minimum normal working hours fixed by law

neednotbecontinuoustoconstitutethelegalworking
day.
Q:WhatistherationalebehindOTpay?
A: Employee is made to work longer than what is
commensurate with his agreed compensation for
the statutory fixed or voluntarily agreed hours of
laborheissupposedtodo.(PNBvs.PEMAandCIR,
G.R.No.L30279,July30,1982)
Discourages the employer (Er) from requiring such
work thus protecting the health and wellbeing of
the worker, and also tend to remedy
unemployment by encouraging Ers to employ
othersworkerstodowhatcannotbeaccomplished
duringthenormalhoursofwork.
Q:DistinguishOvertimepayfrompremiumpay.
A:
OVERTIMEPAY PREMIUMPAY
Additional
compensation for
work performed
beyond 8 hours
on ordinary days
(within the
workers 24hour
workday)
Additionalcompensationforwork
performedwithin8hoursondays
when normally he should not be
working (on nonworking days,
such as rest days and special
days.)
But additional compensation for
work rendered in excess of 8
hours during these days is also
consideredOTpay.
Q:WhataretheOTpayrates?
A:
PAYRATES
OTduringaregularworkingday
Additionalcompensationof25%oftheregularwage
OTduringaholidayorrestday
Rateofthefirst8hoursworkedon
plusatleast30%oftheregularwage(RW):
ifdoneonaspecialholidayORrestday:
30%of130%ofRW
IfdoneonaspecialholidayANDrestday:
30%of150%ofRW
ifdoneonaregularholiday:
30%of200%ofRW
Q:WhatisthebasisofcomputingtheOTpayand
additionalremuneration?
A:Regularwagewhichincludesthecashwageonly,
without deduction on account of facilities provided
bytheemployer.(Art.90)
Q: In lieu of OT pay, the employee was given
permission to go on leave on some other day, is
thatvalid?
A:No.Permissiongiventotheemployee(Ee)togo
on leave on some other day of the week shall NOT
exempt the employer from paying the additional
compensation required because it would prejudice
theEe,forhewillbedeprivedoftheadditionalpay
for the OT work he has rendered and which is
utilized to offset the undertime he may have
incured. Undertime could be charged against the
Eesaccruedleave.
Q: Socorro is a clerktypist in the Hospicio de San
Jose, a charitable institution dependent for its
existence on contributions and donations from
wellwishers.Sherenderswork11hoursadaybut
hasnotbeengivenOTpaysinceherplaceofwork
isacharitableinstitution.IsSocorroentitledtoOT
pay?Explainbriefly.
A:Yes.SocorroisentitledtoOTcompensation.She
does not fall under any of the exceptions to the
coverage of Art. 82, under the provisions of hours
of work. The Labor Code is equally applicable to
nonprofit institutions. A covered Ee who works
beyond 8 hours is entitled to OT compensation.
(2002BarQuestion)
Q: Flores applied for the position of driver in the
motorpool of Gold Company, a multinational
corporation. Danilo was informed that he would
frequently be working OT as he would have to
drive for the company's executives even beyond
the ordinary 8hour work day. He was provided
with a contract of employment wherein he would
be paid a monthly rate equivalent to 35 times his
dailywage,regularsickandvacationleaves,5day
leavewithpayeverymonthandtimeoffwithpay
LABOR STANDARDS

29
when the company's executives using the cars do
not need Danilo's service for more than eight
hoursaday,inlieuofOT.Aretheaboveprovisions
ofthecontractofemploymentinconformitywith,
orviolativeof,thelaw?
A: Except for the provision that Danilo shall have
time off with pay when the company's executives
usingthecarsdonotneedDanilo'sserviceformore
than 8 hours a day, in lieu of OT, the provisions of
the contract of employment of Danilo are not
violative of any labor law because they instead
improve upon the present provisions of pertinent
laborlaws.
Q: May an employee be compelled to render OT
work?
A:GR:No.OTworkisvoluntary.
XPN: Compulsory OT work in any of the

followingsituations:
1. Urgent work to be performed on
machines and installations in order to
avoid serious loss or damage to the Er or
someothercauseofsimilarnature
2. Work is necessary to prevent loss or
damagetoperishablegoods
3. In case of imminent danger to the public
safety due to an actual or impending
emergency in the locality caused by
serious accidents, fire, flood, typhoon,
earthquake,epidemicorotherdisasteror
calamity
4. Countryisatwar
5. Completion or continuation of the work
started before the 8th hour is necessary
to prevent serious obstruction or
prejudice to the business operations of
theEr
6. Anyothernationalorlocalemergencyhas
beendeclared
7. Necessary to prevent loss of life or
property.
Note: There should be payment of additional

compensation. Ees refusal to obey the order of the Er
constitutes insubordination for which he may be
subjectedtodisciplinaryaction.
Q: The employment contract requires work for
more than 8 hours a day with a fixed wage
inclusiveofOTpay.Isthatvalid?
A:Itdepends.
1. When the contract of employment
requires work for more than 8 hours at
specific wages per day, without providing
for a fixed hourly rate or that the daily
wages include OT pay, said wages cannot
be considered as including OT
compensation. (Manila Terminal Co. vs.
CIR,etal.,91Phil.,625)
2. However, the employment contract may
provideforabuiltinOTpay.Becauseof
this, nonpayment of OT pay by the
employer is valid. (Engg Equipment vs.
Minister of Labor, G.R. No. L64967, Sep.
23,1985)
(a)UndertimenotoffsetbyOvertime
Q:Canundertime(UT)offsetOT?
A: Where a worker incurs undertime hours during

hisregulardailywork,saidundertimehoursshould
not be offset against the overtime hours on the
samedayoronanyotherday.Itisbothprohibited
bythestatuteandbyjurisprudence.
(b)WaiverofOvertimepay
Q:CantherighttoOTpaybewaived?
A:GR:TherighttoOTpaycannotbewaivedasit
is governed by law and not merely by the
agreementoftheparties.
XPN:
1. If the waiver is done in exchange for
certain valuable benefits and privileges,
which may even exceed the OT Pay,
waivermaybepermitted.
2. Compressedworkweek
g.Nightwork
Q:Whatisnightwork?
A: Any and all work rendered between 6:00 pm

and 6:00 am. (National Rice & Corn Corp. v. NARIC,
105Phil891)
Q: What is night work prohibition with regard to

womenworkers?
A: GR: No woman regardless of age shall be
employed or permitted to work, with or
withoutcompensationinany:
1. Industrial undertaking or branch thereof
between 10pm and 6am of the following
day.
2. Commercialornonindustrialundertaking
orbranchthereof,otherthanagricultural,


LABORLAWTEAM:
30
between midnight and 6am of the
followingday.
3. Agricultural undertaking at nighttime
unless she is given period of rest not less
than9consecutivehours.
XPNS:
1. Actualorimpendingemergencies
a. Caused by serious accident, fire,
flood, typhoon, earthquake,
epidemic, other disasters, or
calamity
b. Topreventlossoflifeorpropertyor
c. Incaseofforcemajeureor
d. Imminentdangertopublicsafety
2. Urgentwork
a. To be performed on machineries,
equipmentorinstallations,
b. To avoid serious loss which the Er
wouldotherwisesuffer
3. Work is necessary to prevent serious loss
toperishablegoods
4. WomanEes
a. Holds a responsible position of
managerialortechnicalnature,or
b. Has been engaged to provide health
andwelfareservices
5. Natureofthework
a. Requires the manual skill and
dexterityofwomenworkersand
b. The same cannot be performedwith
equalefficiencybymaleworkers
6. Women Ees are immediate members of
theestablishmentorundertaking
7. In analogous cases exempted by the SLE
inappropriateregulations.(Art.131)
Note: The operation of Call Contract Centers which

provides offshore case solutions to US based clients
who phone in to conduct product inquiries and
technical support, operating for 24/7, has been
exempted from the prohibition considering the
inevitable time difference between the US and the
Phils. and the peak time for its operation is between
8:00 pm to 10:00 am Manila time, thereby making it
necessaryfor80%ofitsEes,includingwomen,towork
duringgraveyardshift.(BWCWHSDOpinionNo.491,s.
2003)
Q:Whatisnightshiftdifferential(NSD)?
A: It is additional compensation of not less than
10% of an Ees regular wage for every hour worked
between10:00pmto6:00am,whetherornotsuch
periodispartoftheworkersregularshift.
Q:WhoareentitledtoNSD?
A:GR:NSDappliestoallemployees(Ees).
XPN:
1. Ees of the Govt and any of its political
subdivisions,includingGOCCs.
2. Retail and service establishments
regularly employing not more than 5
workers.
3. Includestaskandcontractbasis
personalserviceofanother.
5. Field personnel and Ees whose time and
performance is unsupervised by the
employer
6. ManagerialEes
Q:MayanemployeewaivetherighttoNSD?
A: GR: No, such waiver is against public policy.
(Mercury Drug Co., Inc. vs. Dayao, et al., G.R.
No.L30452,Sep.30,1982)
XPN:Higher/betterbenefits
h.CBAprovisionvisvisovertimework
Q:Maytheovertimeratebesubjecttostipulation
oftheEeandEr?
A: Generally, the premium for work performed on
the employees rest days or on special days or
regular holidays are included as part of the regular
rate of the employee in the computation of
overtime pay for any overtime work rendered on
said days especially if the employer pays only the
minimum overtime rates prescribed by law. The
employees and employer, however, may stipulate
in their collective agreement the payment of
overtime rates higher than those provided by law
and excludethepremiumratesinthecomputation
of overtime pay. Such agreement may be
consideredvalidonlyifthestipulatedovertimepay
rates will yield to the employees not less than the
minimumprescribedbylaw.
2.WAGES
Q:Whatisawage?
A: It is the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time,
task, piece, or commission basis, or other method
of calculating the same, payable by an employer
(Er) to an employee (Ee) under a written or
unwrittencontractofemployment:
1. For work done or to be done, or for
services rendered or to be rendered; and
includes
LABOR STANDARDS

31
2. Fair and reasonable value of board,
lodging, or other facilities customarily
furnished by the Er to the Ee as
determinedbySLE.
Q:Whatdoyoumeanbycustomary?
A: It is founded on longestablished and constant

practiceconnotingregularity.
Q: What do you mean by fair and reasonable
value?
A:Itshallnotincludeanyprofittotheemployer(Er)
ortoanypersonaffiliatedwiththeEr.
a.Nowork,Nopayprinciple
Q: What does a fair days wage for a fair days
labormean(noworknopay)?
A: GR: If there is no work performed by the Ee,
without the fault of the Er, there can be no
wageorpay.
XPN: Thelaborerwasable,willingandreadyto
workbutwas:
1. Preventedbymanagement;
2. Illegallylockedout;
3. Illegallysuspended;
4. Illegallydismissed
5. Otherwise illegally prevented from
working. (Aklan Electric Coop. v. NLRC,
G.R.No.129246,Jan.25,2000)
b.CoverageandExclusions
Q:Towhomdoesthetitleonwagesapply?
A:GR:Itappliestoallemployees
XPN:
1. Farmtenancyorleasehold;
2. Household or domestic helpers, including
family drivers and persons working in the
personalserviceofanother;
3. Home workers engaged in needlework or
in any cottage industry duly registered in
accordancewithlaw;
4. Workers in duly registered cooperatives
when so recommended by the Bureau of
Cooperative Development and upon
approval of the Secretary of Labor and
Employment.
5. Workers of a barangay micro business
enterprise(R.A.9178)
c.FacilitiesandSupplements
Q:Distinguishbetweenfacilitiesandsupplement
A:
FACILITIES SUPPLEMENT
Items of expenses
necessary for the laborers
and his familys existence
andsubsistence
Note:Doesnotincludetools
oftradeorarticles/services
primarily for the benefit of
the Er or necessary to the
conductoftheErsbusiness.
Extra remuneration or
special privileges or
benefits given to or
received by the laborers
over and above their
ordinary earnings or
wages (Atok Big Wedge
Mining Co. v. Atok Big
Wedge Mutual Benefit
Assoc, G.R. No. L7349,
July19,1955).
Formspartofthewage Independentofwage
Deductiblefromwage Notwagedeductible
For the benefit of the
workerandhisfamily.
Granted for the
convenienceoftheEr.
Q:Whatisthecriterionindeterminingwhetheran
itemisasupplementorfacility?
A:Thecriterionisnotsomuchwiththekindofthe
benefit or item (food, lodging, bonus or sick leave)
given, but its purpose. (State Marine v. Cebu
SeamensAssn.,G.R.No.L12444,Feb.28,1963)
Q:Whencanthecostoffacilitiesfurnishedbythe
ErbechargedagainstanEe?
A:InorderthatthecostbechargedagainsttheEe,
the latters acceptance of such facilities must be
voluntary.
Q:Whataretherequirementsfordeductingvalues
forfacilities?
A:
1. Proof must be shown that such facilities
arecustomarilyfurnishedbythetrade
2. Theprovisionofdeductiblefacilitiesmust
bevoluntarilyacceptedinwriting
3. The facilities must be charged at fair and
reasonable value (Mabeza v. NLRC, G.R.
No.118506,April18,1997)
Q: Are food and lodging, or the electricity and

water consumed by a hotel worker, considered
facilities?
A: No. These are supplements. Considering,

therefore, that hotel workers are required to work
different shifts and are expected to be available at
various odd hours, their ready availability is a
necessarymatterintheoperationsofasmallhotel.
Furthermore,grantingthatmealsandlodgingwere


LABORLAWTEAM:
32
provided and indeed constituted facilities, such
facilities could not be deducted without the Er
complying first with certain legal requirements.
(Mabezav.NLRC,G.R.No.118506,April18,1997)
d.Wagesv.Salaries
Q:Distinguishbetweenwageandsalary?
A:
WAGE SALARY
(Gaavs.CA,G.R.No.44169,Dec.3,1985)
Compensationformanual
labor(skilledorunskilled)
alsoknownasblue
collaredworkers,paidat
statedtimesand
measuredbytheday,
week,monthorseason.
Paidtowhitecollared
workersanddenotes
higherdegreeof
employmentora
superiorgradeofservices
andimpliesapositionin
office.
Considerablepayfora
lowerandless
responsiblecharacterof
employment.
Outgestureofalarger
andmoreimportant
service
GR:Notsubjectto
execution
XPN:Debtsincurredfor
food,shelter,clothingand
medicalattendance.
Subjecttoexecution.
e.WageDistortion
Q:Whatiswagedistortion(WD)?
A: A situation where an increase in wage results in

theeliminationorseverecontractionofintentional
quantitative differences in wage or salary rates
between and among the Eegroups in an
establishment as to effectively obliterate the
distinctionsembodiedinsuchwagestructurebased
on skills, length of service or other logical bases of
differentiation.
Q:WhataretheelementsofWD?
A:
1. An existing hierarchy of positions with
correspondingsalaryrates.
2. A significant change or increase in the
salary rate of a lower pay class without a
corresponding increase in the salary rate
ofahigherone;
3. The elimination of the distinction
betweenthe2groupsorclasses;and
4. The WD exists in the same region of the
country. (Alliance Trade Unions v. NLRC,
G.R.No.140689,Feb.17,2004)
Q:IstheErlegallyobligedtocorrectWD?
A: The Er and the union shall negotiate to correct

the distortions. If there is no union, the Er and the
workersshallendeavortocorrectsuchdistinctions.
Q:WhatarethebasicprinciplesinWD?
A:
1. The concept of WD assumes an existing
group or classification of Ees which
establishes distinctions among such Ees
onsomerelevantorlegitimatebasis.This
classification is reflected in a differing
wagerateforeachoftheclassesofEes
2. Often results from govt decreed
increasesinminimumwages.
3. Should a WD exist, there is no legal
requirement that, in the rectification of
that distortion by readjustment of the
wage rates of the differing classes of Ees,
the gap which had previously or
historically existed be restored in
precisely the same amount. In other
words, correction of a WD may be done
by reestablishing a substantial or
significant gap (as distinguished from the
historicalgap)betweenthewageratesof
thedifferingclassesofEes.
4. The reestablishment of a significant
differenceinwageratesmaybetheresult
of resort to grievance procedures or
collective bargaining negotiations. (Metro
Transit Org., Inc. v. NLRC, G.R. No.
116008,July11,1995)
Q: Distinguish theprocess for correction of WD of

organized establishments and unorganized
establishments?
A:
Organized
Establishment
(withunion)
Unorganized
Establishments
(withoutunion)
TheErandtheunion
shallnegotiateto
correctdistortion.
TheErandtheworkers
shallendeavortocorrect
thedistortion.
Anydisputeshallbe
resolvedthrougha
grievanceprocedure
undertheCBA.
Anydisputeshallbe
settledthroughtheNCMB.
Ifitremainsunresolved,
itshallbedealtwith
throughvoluntary
arbitration.
Ifitremainsunresolved
within10daysitshallbe
referredtotheNLRC.
Thedisputewillbe
resolvedwithin10days
fromthetimethe
disputewasreferredto
voluntaryarbitration.
TheNLRCshallconduct
continuoushearingsand
decidethedisputewithin
20daysfromthetimethe
samewasreferred.
LABOR STANDARDS

33
Q: Can the issue of WD be raised in a notice of
strike?
A: No. WD is nonstrikeable. (Ilaw at Buklod ng

Manggagawa v. NLRC, G.R. No. 91980, June 27,
1991.) WD is neither a deadlock in collective
bargainingnorULP.
f.CBAprovisionvisvisWageOrderCBACredibility
Q:DistinguishCBAandWageOrder.
A:
CBA WAGEORDER
Not an ordinary
contract. It can be
entered into only by an
exclusive bargaining
agentorunit.
Administrative issuance
which results from a
statute(RA6727)
If the CBA provides
betterbenefitsthenthe
employees shall be
entitledtothesame.
Onlysetstheminimum
Q: Can a CBA provision regarding wages prevail

overaWageOrder?
A:Yes,wheretheCBAprovidesawageorsalaryto
be received by the employees which is more than
theamountsetbytheWageOrder,whetherissued
prior to or after the conclusion of the CBA, it is
incumbent upon the employer to compensate the
employees according to the provisions of the CBA
withrespecttowages.
Q: Meycauayan College Faculty and Personnel
Association as the employees union in
Meycauayan College, admits that its members
were paid all the increases in pay as mandated
law.Itappearshoweverthatin1987,shortlyafter
union President Joy Bugo turned over the
presidency,shediscoveredthatArt.IVoftheCBA,
which provides for higher salary increase was not
implemented.Maytheunionclaimthedifference
between their old salaries and those provided by
saidCBAprovision?
A: Yes, the terms and conditions of a collective
bargainingcontractconstitutethelawbetweenthe
parties. Beneficiaries thereof are therefore, by
right, entitled to the fulfillment of the obligation
prescribed therein.Consequently, to deny binding
force to the CBA would place a premium on a
refusalbyapartytheretotocomplywiththeterms
oftheagreement.Suchrefusalwouldconstitutean
unfairlaborpractice.
Moreover, compliance with a collective bargaining

agreement is mandated by the expressed policy to
giveprotection to labor.Unlessotherwise provided
by law, said policy should be given paramount
consideration.(MeycauayanCollegev.DRILON,G.R.
No.81144,My7,1990).
g.Nondiminutionofbenefits
Q: What is the concept of nondiminution (ND) of
benefits?
A: GR: Benefits being given to employees (Ees)
cannot be taken back or reduced unilaterally by
the employer (Er) because the benefit has
become part of the employment contract,
whetherwrittenorunwritten.
XPN:Tocorrectanerror,otherwise,iftheerroris
notcorrectedforareasonabletime,itripensinto
a company policy and Ees can demand it as a
matterofright.
Q:WhenisNDofbenefitsapplicable?
A: It is applicable if it is shown that the grant of
benefit:
1. Is based on an express policy of the law;
or
2. Has ripened into practice over a long
period of time and the practice is
consistent and deliberate and is not due
to an error in the construction/
application of a doubtful or difficult
questionoflaw.
h.Workerspreferenceincaseofbankruptcy
Q:Whatisbankruptcy?
A: BankruptcyisreferredtointhePhilippinesas
Insolvency. It denotes the state of an entity or
personthathasliabilitiesgreaterthanitsassets.
Q: What happens if the Er business experiences

bankruptcyorliquidation?
A: His workers shall enjoy first preference as
regards their wages and monetary claims, any
provision of the law to the contrary
notwithstanding.
Q: What are the principles underlying the
preference?
A:


LABORLAWTEAM:
34
1. Declaration of bankruptcy or judicial
liquidation before enforcement of the
workerspreferentialright;
2. Filingofclaimsbyworkers;
3. Therightdoesnotconstitutealientothe
property of the insolvent debtor in favor
ofworkers.(DBPvs.NLRC,G.R.No.82763
Mar. 19, 1990 and G.R. No. 97176, Mar.
18,1993);
4. ThepreferenceinfavoroftheEesapplies
to discharge of funds. The preference
does not only cover unpaid wages, it also
extends to termination pay and other
monetaryclaims;
Note: Termination pay, after all, is
considered as additional remuneration for
services rendered to the employer for a
certainperiodoftime;itiscomputedonthe
basisoflengthofservice.(PNBvs.Cruz,G.R.
No.80593,Dec.18,1989)
5. Applicable only to ordinary preferred
credit, hence, must yield to special
preferredcredits.
Q: Are workers preferred than the tax claims of

theGovt?
A: No. Art. 110 did not sweep away the overriding
preference accorded under the scheme of the Civil
Codetotaxclaimsofthegovernment.
Q: Is worker preference applicable if the Er
corporationisunderrehabilitation?
A: No. Suspension of payments order by the SEC
mandates the holding in abeyance the filing or the
proceedings on labor cases against an Er who is
under rehabilitation to give the Er the chance to
concentrate on how to revive his business and not
bedistractedintryingtodefenditselfinlaborcases
filedagainstit.(Rubberworld,Inc.v.NLRC,G.R.No.
126773,April14,1999)
Q:PremiereBank,beingthecreditormortgageeof
XYZ & Co., a garment firm, foreclosed the
hypothecated assets of the latter. Despite the
foreclosure, XYZ & Co. continued its business
operations.Ayearlater,thebanktookpossession
of the foreclosed property. The garment firm's
business operations ceased without a declaration
of bankruptcy. Caspar, an employee of XYZ & Co.,
was dismissed from employment due to the
cessation of business of the firm. He filed a
complaint against XYZ & Co. and the bank. The
LaborArbiter,afterhearing,sofoundthecompany
liable, as claimed by Caspar, for separation pay.
Premiere Bank was additionally found subsidiarily
liableuponthethesisthatthesatisfactionoflabor
benefitsdue tothe Ee is superior to the rightof a
mortgagee of property. Was the Labor Arbiter
correctinhisdecision?
A: No. The preference of credits established in Art.
110 of the LC cannot be invoked in the absence of
any insolvency proceedings, declaration of
bankruptcy, or judicial liquidation. (DBP v.
Santos,G.R.No.75801,March20,1991).(2003Bar
Question)
Q: Distinguish the mortgage created under the
Civil Code from the right of 1
st
preference created
bytheLCasregardstheunpaidwagesofworkers.
Explain.
A: A mortgage directly subjects the property upon
whichitisimposed,whoeverthepossessormaybe,
to the fulfillment of the obligation for which it was
constituted. It creates a real right which is
enforceableagainstthewholeworld.Itistherefore
alienonanidentifiedrealproperty.
Mortgage credit is a special preferred credit under
the Civil Code in the classification of credits. The
preference given by the LC when not attached to
anyspecificpropertyisanordinarypreferredcredit.
(1995BarQuestion)
i.LaborCodeprovisionsforwageprotection
Q: What are the Labor Code provisions for wage
protection
A:
Art. 112. NonInterference in Disposal of WagesNo
employershalllimitorotherwiseinterferewiththe
freedom of any employee to dispose of his wages.
He shall not in any manner force, compel or oblige
his employees to purchase merchandise,
commoditiesorotherpropertiesfromtheemployer
orfromanyotherperson,orotherwisemakeuseof
any store or service of such employer or any other
person.
Art. 113 Wage DeductionNo employer in his own

behalf or in behalf of any person, shall make any
deduction from the wages of his employees,
except:
(a) Incaseswheretheworkerisinsuredwith
his consent by the employer, and the
deductionistorecompensetheemployer
for the amount paid by him as premium
ontheinsurance;
(b) For union dues, in cases where the right
of the worker or his union to check off
has been recognized by the employer or
authorized in writing by the individual
workerconcerned;and
LABOR STANDARDS

35
(c) Incaseswheretheemployerisauthorized
by law or regulations issued by the
SecretaryofLabor.
Art. 114 No employer shall require his worker to

make deposits from which deductions shall be
made for the reimbursement of loss of or damage
to tools, materials or equipments supplied by the
employer;exceptwhentheemployerisengagedin
such trades, occupations or business where the
practiceofmakingdeductionsorrequiringdeposits
is a recognized one, or is necessary, or desirable as
determined by the Secretary of Labor in
appropriaterulesandregulations.
Art. 115 LimitationsNo deduction from the

deposits of an employee for the actual amount of
the loss or damage shall be made unless the
employee has been heard thereon, and his
responsibilityhasbeenclearlyshown.
Art 116 Withholding of Wages and Kickbacks

ProhibitedIt shall be unlawful for any person,
directly or indirectly, to withhold any amount from
thewagesofaworkerorinducehimtogiveupany
part of his wages by force, stealth, intimidation,
threat or by any other means whatsoever without
theworkersconsent.
Art117DeductiontoEnsureEmploymentItshallbe
unlawfultomakeanydeductionfromthewagesof
anyemployeeforthebenefitoftheemployerorhis
representative or intermediary as consideration of
a promise of employment or retention in
employmentorretentioninemployment.
Art. 118 Retaliatory MeasuresIt shall be unlawful

for an employer to refuse to pay or reduce the
wages and benefits, discharge or in any manner
discriminate against any employee who has filed
any complaint instituted any proceeding under this
Title or has testified or is about to testify in such
proceedings.
j.Allowabledeductionswithoutemployees
consent
Q:Whatistheruleinwagedeductions?
A:
GR:Itisstrictlyprohibited
XPN:
1. Deductions under Art. 113 for insurance
premiums
2. Unionduesincaseswheretherightofthe
workerorhisuniontocheckoffhasbeen
recognized by the employer (Er) or
authorized in writing by the individual
worker concerned (Art. 113). Art. 241(o)
providesthatspecialassessmentsmaybe
validly checkedoff provided that there is
an individual written authorization duly
signedbyeveryemployee(Ee).
3. DeductionsforSSS,MedicareandPagibig
premiums
4. TaxeswithheldpursuanttotheTaxCode
5. Deductions under Art. 114 for loss or
damagetotools,materialsorequipments
6. Deductions made with the written
authorization of the Ee for payment to a
third person. (Sec 13, Rule VIII,Book III of
theIRR)
7. Deductions as disciplinary measures for
habitual tardiness (Opinion dated March
10,1975oftheSLE)
8. AgencyfeesunderArt.248(e)
9. Deductions for value of meals and
facilitiesfreelyagreedupon
10. IncasewheretheEeisindebtedtotheEr
where such indebtedness has become
due and demandable. (Art. 1706, Civil
Code)
11. Incourtawards,wagesmaybesubjectof
execution or attachment, but only for
debts incurred for food, shelter, clothing,
and medical attendance. (Art. 1703, Civil
Code)
12. Salarydeductionofamemberofalegally
established cooperative. (R.A. 6938, Art.
59)
k.Attorneysfees
Q: What are the limitations to the assessment of

attorneyslienagainsttheculpableparty?
A:
1. In case of unlawful withholding of wages
10% of the amount of wages to be
recovered.
2. It shall be unlawful for any person to
demand or accept, in any judicial or
administrative proceedings for the
recoveryofwages,attysfeesthatexceed
10%oftheamountofwagesrecovered.
Note: The prohibition on attys lien refers to

proceedings forrecovery ofwages and nottoservices
rendered in connection with CBA negotiations. In the
latter case, the amount of attys fees may be agreed
upon by the parties and the same is to be charged
against union funds as provided for in Art. 222 of the
Labor Code. (Pacific Banking Corp.v. Clave, G.R. No.
56965,Mar.7,1984)
Q:Whatisordinaryattorneysfee?


LABORLAWTEAM:
36
A: It is the reasonable compensation paid to a
lawyer by his client for the legal services he has
rendered.
Q:Whatisextraordinaryattorneysfee?
A: It is the indemnity for damages ordered by the

courttobepaidbythelosingpartyinlitigationand
is not to be paid to the lawyer but to the client,
unless they have agreed that the award shall
pertain to the lawyer as an additional
compensation or as a part thereof. (Traders Royal
Bank Ees UnionIndependent v. NLRC, G.R. No.
120592,Mar.14,1997)
Note: Art.111 of the LC deals with the extraordinary
concept of attorneys fees. It may not be used as the
standardinfixingtheamountpayabletothelawyerby
his client for the legal services he rendered. (Masmud
v.NLRC,G.R.No.183385,Feb.13,2009)
Q: Santiago, a project worker, was being assigned
by his Er, Bagsak Builders, to Laoag, Ilocos Norte.
Santiago refused to comply with the transfer
claiming that it, in effect, constituted a
constructive dismissal because it would take him
away from his family and his usual work
assignments in Metro Manila. The Labor Arbiter
(LA) found that there was no constructive
dismissal but ordered the payment of separation
pay due to strained relations between Santiago
and Bagsak Builders plus attys fees equivalent to
10%ofthevalueofSantiago'sseparationpay.
Istheawardofatty'sfeesvalid?Statethereasons
foryouranswer.
A: No, the award of attys fees is not valid.
AccordingtotheLC(Art.111[a]),attysfeesmaybe
assessed in cases of unlawful withholding of wages
which does not exist in the case. The worker
refusedtocomplywithalawfultransferorder,and
hence, a refusal to work. Given this fact, there can
benobasisforthepaymentofatty'sfees.
Could the LA have validly awarded moral and
exemplary damages to Santiago instead of atty's
fees?Why?
A: No, moral and exemplary damages can be
awardedonlyiftheworkerwasillegallyterminated
in an arbitrary or capricious manner. (Nueva Ecija
Electric Cooperative Inc., Ees Assn., vs. NLRC, G.R.
No. 116066, Jan. 24, 2000; Cruz vs. NLRC, G.R. No.
116384, Feb. 7, 2000; Phil. Aeolus etc., vs. NLRC,
G.R. No. 124617, April 28, 2000). (2001 Bar
Question)
Q: When can attorneys fees and damages be
awardedinanillegaldismissalcase?
A: For attorneys fees, moral and exemplary

damages to be granted, the plaintiff must prove
thatthefactsofhiscasefallwithintheenumerated
instances in the Civil Code. Thus, moral damages
may only be recovered where the dismissal or
suspension of the employee was attended by bad
faith or fraud, or constituted an act oppressive to
labor,orwasdoneinamannercontrarytomorals,
goodcustomsorpublicpolicy.Inotherwords,the
act must be a conscious and intentional design to
do a wrongful act for a dishonest purpose or some
moralobliquity.Exemplarydamages,ontheother
hand, may only be awarded where the act of
dismissal was effected in a wanton, oppressive or
malevolent manner. (Chaves v. NLRC,G.R. No.
166382,June27,2006)
Q:Whatisunionservicefee?
A: The appearance of labor federations and local

unions as counsel in labor proceedings has been
given legal sanction under Art.222 of the LC, which
allows nonlawyers to represent their organization
thereof.Thesaidlaborfederationsandlocalunions
have a valid claim to attys fees which is called the
UnionServiceFee.
l.Criteria/FactorsforWageSetting
Q:Whatarethestandardsorcriteriaforminimum
wagesetting?
A: In the determination of such regional minimum
wages, the Regional Board shall, among other
relevantfactorsconsiderthefollowing:
a) Thedemandforlivingwages
b) Wage adjustment visavis the consumer
priceindex
c) The cost of living and changes or
increasestherein
d) Theneedsofworkersandtheirfamilies
e) Theneedtoinduceindustriestoinvestin
thecountryside
f) Improvementsinstandardsofliving
g) Theprevailingwagelevels
h) Fair return of the capital invested and
capacitytopayofemployers
i) Effects on employment generation and
familyincome
j) The equitable distribution of income and
wealthalongtheimperativesofeconomic
andsocialdevelopment
Q:Whatissalaryceilingmethod?
LABOR STANDARDS

37
A: A method of minimum wage adjustment
whereby the wage adjustment is applied to Ees
receiving a certain denominated ceiling. In other
words, workers already being paid more than the
existingminimumwagearealsotobegivenawage
increase. (ECOP v. NWCP, G.R. No. 96169, Sep. 24,
1991)
Q:Whatisafloorwagemethod?
A:Itinvolvesthefixingofadeterminateamountto
beaddedtotheprevailingstatutoryminimumwage
rates.
Q: The Regional Wage Board of Region II issued a

Wage Order granting all Ees in the private sector
throughout the region an acrosstheboard
increaseofP15.00daily.IsthisWageOrdervalid?
A:TheWageOrderisvalidinsofarasthemandated
increase applies to Ees earning the prevailing
minimum wage rate at the time of the passage of
the Wage Order and void with respect to its
application to Ees receiving more than the
prevailing minimum wage rate at the time of the
passage of the Wage Order. Pursuant to its
authority, the Regional Wage Boards may issue
wage orders which set the daily minimum wage
rates. In the present case, the Regional Wage
Board did not determine or fix the minimum wage
rate.Itdidnotsetawagelevelnorarangetowhich
a wage adjustment or increase shall be added.
Instead, it granted an acrosstheboard wage
increase of P15.00 to all Ees in the region. In doing
so,theRegionalWageBoardexceededitsauthority
by extending the coverage of the Wage Order to
wage earners receiving more than the prevailing
minimumwagerate,withoutadenominatedsalary
ceiling.TheWageOrdergrantedadditionalbenefits
notcontemplatedbyR.A.No.6727.(MBTCvNWPC
Commission,G.R.No.144322,Feb.6,2007)
Q: Since the Wage Order was declared void with

respect to its application to employees receiving
more than the prevailing minimum wage rate at
thetimeofthepassageoftheWageOrder,should
these Ees refund the wage increase received by
them?
A:No.TheEesshouldnotrefundthewageincrease
that they received under the invalidated Wage
Order.Beingingoodfaith,theemployeesneednot
refund the benefits they received. Since they
received the wage increase in good faith, in the
honest belief that they are entitled to such wage
increaseandwithoutanyknowledgethattherewas
no legal basis for the same, they need not refund
the wage increase that they already received.
(MBTC v NWPC Commission, G.R. NO. 144322, Feb.
6,2007)
3.RESTDAY
a.Righttoweeklyrestday,Preferemceofthe
employee,whenworkonrestdayauthorized
Q:Whatistherighttoweeklyrestday(WRD)?
A: Every employer shall give his employees a rest
period of not less than 24 consecutive hours after
every6consecutivenormalworkdays.(Sec.3,Rule
III,BookIII,IRR)
Q:WhatisthescopeofWRD?
A:Itshallapplytoallemployerswhetheroperating
for profit ornot, including public utilities operated
byprivatepersons.(Sec.1,RuleIII,BookIII,IRR)
Q:WhodeterminestheWRD?
A:GR:ErshalldetermineandscheduletheWRDof
hisEe.
XPNs:
1. CBA
2. RulesandregulationsastheSLEprovides
3. Preference of employee (Ee) based on
religious grounds Ee shall make known
his preference in writing at least 7 DAYS
beforethedesiredeffectivityoftheinitial
rest day so preferred. (Sec. 4(1), Rule III,
BookIII,IRR)
XPN to XPN no. 3: Employer (Er) may

schedule the WRD of his choice for at
least 2 days in a month if preference of
theemployeewillinevitablyresultin:
a. serious prejudice to the operations
oftheundertakingand
b. the Er cannot normally be expected
to resort to other remedial
measures.(Sec.4(2),RuleIII,BookIII,
IRR)
Q: When should employees (Ees) be informed of

theirscheduleofWRD?
A:Ershallmakeknownrestperiodbymeansof:
1. Writtennotice
2. Postedconspicuouslyintheworkplace
3. At least 1 week before it becomes
effective.(Sec.5,RuleIII,BookIII.IRR)
Q: Can an Ee be compelled to work on his rest

day?


LABORLAWTEAM:
38
A:GR:No.
XPN:
1. Urgent work to be performed on the
machinery, equipment or installation, to
avoid serious loss which the Er would
otherwisesuffer;
2. Nature of work requires continuous
operations for 7 days in a week or more
and stoppage of the work may result in
irreparableinjuryorlosstotheEr;
3. Abnormalpressureofworkduetospecial
circumstances, where the Er cannot be
ordinarily expected to resort to other
measures;
4. Actualorimpendingemergencies(serious
accident,fire,flood,typhoon,earthquake,
etc.)
5. Prevent loss or damage to perishable
goods;
6. Analogous or similar circumstances as
determinedbytheSLE;
7. Work is necessary to avail of favorable
weather or environmental conditions
where performance or quality of work is
dependentthereon.
Q.WhatistherulewhenanEevolunteerstowork
onhisrestdayunderothercircumstances?
A:Heshallexpressitinwritingsubjecttoadditional
compensation.(Sec.6[2],RuleIII,BookIII,IRR)
Q:Whatispremiumpay?
A: It is the additional compensation for work

rendered by the employee on days when normally
he should not be working such as special holidays
andweeklyrestdays.
Q:CantheErandEeagreeontherateofpremium
payotherthanthatprovidedbylaw?
A: Yes. Nothing shall prevent the Er and his Ee or

their representatives from entering into any
agreement with terms more favorable to the Ees
Provided: It shall not be used to diminish any
benefit granted to the Ees under existing laws,
agreementsandvoluntaryErpractices.(Sec.9,Rule
III,BookIII,IRR)
Q: What are the rates of compensation for rest

day,Sundayorholidaywork?
A:
INSTANCES
RATESOFADDITIONAL
COMPENSATION
Workonascheduled
restday
+30%PremiumPay(PP)
of100%regularwage
(RW).(Sec.7,RuleIII,Book
III,IRR)
Workhasnoregular
workdaysandrestdays
(Ifperformedon
SundaysandHolidays)
+30%PPof100%RW.
(Sec.7,RuleIII,BookIII,
IRR
WorkonaSunday
(IfEesscheduledrest
day)
+30%PPof100%RW.
IRR)
Workperformedonany
SpecialHoliday
1st8hrs:+30%PPof
100%RW
Excessof8hrs:+30%of
hourlyrateonsaiddate.
(M.C.No.10,Seriesof
2004)
Workperformedona
SpecialHolidayand
samedayisthe
scheduledrestday
1st8hrs:+50%PPof
100%regularwage
Excessof8hrs:+30%of
hourlyrateonsaiddate.
(M.C.No.10,Seriesof
2004)
Workperformedona
SpecialWorkingHoliday
Eeisonlyentitledtohis
basicrate.NoPPis
required.
Reason:Workperformed
isconsideredworkon
ordinaryworkingdays.
IRR)
Note: Holiday work provided under Art.93 pertains to

specialholidaysorspecialdays.
Q: Jose applied with Mercure Drug Company for

thepositionofSalesClerk.MercureDrugCompany
maintains a chain of drug stores that are open
everyday till late at night. Jose was informed that
he had to work on Sundays and holidays at night
as part of the regular course of employment. He
was presented with a contract of employment
setting forth his compensation on an annual basis
with an express waiver of extra compensation for
workonSundaysandholidays,whichJosesigned.
IssuchawaiverbindingonJose?Explain.
A: As long as the annual compensation is an

amount that is not less than what Jose should
receiveforallthedaysthatheworks,plustheextra
compensation that he should receive for work on
his weekly rest WRD and for night differential pay
for late night work, considering the laws and wage
orders providing for minimum wages, and the
pertinentprovisionsoftheLC,thenthewaiverthat
Jose signed is binding on him for he is not really
waivinganyrightunderLaborLaw.Itisnotcontrary
LABOR STANDARDS

39
tolaw,morals,goodcustoms,publicorderorpublic
policy for an Er and Ee to enter into a contract
where the Ees compensation that is agreed upon
alreadyincludesalltheamountsheistoreceivefor
OT work and for work on weekly rest days and
holidaysandfornightdifferentialpayforlatenight
work.(1996BarQuestion)
4.HOLIDAYS
a.RighttoHolidayPay
Q:Whatisholidaypay(HP)?
A: It is a premium given to employees (Ees)
pursuanttolawevenifhehasnotbeensufferedto
work on a regular holiday. It is limited to the 11
regular holidays, also called legal holidays listed by
law. The employee (Ee) should not have been
absent without pay on the working day preceeding
theregularholiday.
Q:Whataretheclassesofspecialdays(SD)?
A:
1. NationalSpecialPublicHoliday
GR:Nonworkingdays

XPN:Otherwisedeclaredbythe
President
2. Local Special Public Holiday Regular

working day. (LOI 814 as amended by LOI
1087)
NATIONALSPECIALDAYS DATE
AllSaintsDay November1
LastDayoftheYear December31
NinoyAquinoDay August21
Otherdaysdeclaredbylaw
1. SpecialNonworking
days
2. SpecialPublicHolidays
3. SpecialNational
Holiday
4. SpecialHoliday(forall
schools)
a. EdsaRevolution
Anniversary
December24
February25
LOCALSPECIALDAYS
Thosedeclaredby:
1. Lawor
2. Ordinance
e.g.Maniladay(in
Manilaonly)
Q:Whatareregularholidays(RH)?
A: They are compensable whether worked or
unworked subject to certain conditions. They are
also called legal holidays. The following are
considered regular holidays. (Presidential
ProclamationNo.18)
REGULARHOLIDAYS DATE
NewYearsDay January1
MaundyThursday April21
GoodFriday April22
EidlFitr MovableDate
ArawngKagitingan April9
LaborDay May1
IndependenceDay June12
NationalHeroesDay
Aug.29(lastMondayof
August)
BonifacioDay Nov.30
ChristmasDay December25
RizalDay Dec.30
Note: RA 9492 has already been superseded by

Presidential Proclamation No. 18 issued by President
BenignoC.AquinoIIIplacingtheobservanceofregular
holidays and national special days according to their
respectivedatesinthecalendar.
Q:WhatareMuslimHolidays(MH)?
A: The MHs, except Eidl Fitr, are observed in
specified Muslim areas. All private corporations,
offices, agencies and entities or establishments
operating within the designated Muslim provinces
andcitiesarerequiredtoobserveMH.
Q: When shall Eidl Fitr and/or Eidl Adha be
declaredanationalholiday?
A:Theproclamationdeclaringanationalholidayfor
the observance of Eidl Fitr and/or Eidl Adha shall
beissued:
1. After the approximate date of the Islamic
holiday has been determined in
accordancewiththe:
a. IslamicCalendar(Hijra)or
b. LunarCalendaror
c. Uponastronomicalcalculations
d. Whicheverispossibleorconvenient
2. The Office of Muslim Affairs shall inform
the Office of the President on which day
the holiday shall fall. (Sec.2, Proc. No.
1841)
Q: Can a Christian employee (Ee) working within
theMuslimareabecompelledtoworkduringMH?
A: No. Christians working within the Muslim areas
may not report for work during MH. Not only
Muslim but also Christian Ee in the designated
provinces and cities are entitled to HP on the MH.
(SMCv.CA,G.R.146775,Jan.30,2002)


LABORLAWTEAM:
40
Q: Can a Muslim Ee working outside the Muslim
area be compelled to work during the observance
oftheMH?
A: GR: No. Muslim Ees shall be excused from work
during MH without diminution of salary or
wages.
XPN: Those who are permitted or suffered to

work on MH are entitled to at least 100% basic
pay+100%aspremiumoftheirbasicpay.(SMC
v.CA,G.R.No.146775,Jan.30,2002)
Note: RH falling within temporary or periodic

shutdown and temporary cessation of work are
compensable. However, if the temporary or periodic
shutdown and cessation of work is due to business
reverses, the employer may not pay the RHs during
suchperiod.
Q:DistinguishRHfromSD.
A:
REGULARHOLIDAY SPECIALHOLIDAY
IfUnworked
Regularpay
(subject to certain
conditions for daily paid
Ees)
NoPay
Ifworked
2xregularpay(200%)
+ 30% premium pay of
100%regularwage
Othermatters
Setbylaw Setbyproclamation
Limited to those provided
underArt.94,LC
Notexclusive
Q:WhoareentitledtoHP?
A:GR:Allemployees(Ees)areentitled.(Sec.1,Rule
IV,BookIII,IRR)
XPNS:
1. Govt Ees and any of its political
subdivisions, including GOCCs (with
originalcharter)
2. Retail and service establishments
regularlyemployinglessthan10workers
personalserviceofanother
4. Ee engaged on task or contract basis or
purelycommissionbasis
5. MembersoftheFamilyoftheErwhoare
dependentonhimforsupport
6. Managerial Ee and other member of the
managerialstaff
7. Field personnel and other Ee whose time
andperformanceareunsupervisedbythe
Er
8. Eepaidfixedamountforperformingwork
irrespective of the time consumed in the
performance thereof. (Sec. 1, Rule IV,
BookIII,IRR)
Q:Whatareretailestablishments?
A: They are engaged in the sale of goods to end
usersforpersonalorhouseholduse.(e.g.Grocery)
Q:Whatareserviceestablishments?
A: They are engaged in the sale of services to
individualsfortheirownorhouseholduse.(e.g.TV
repairshop)
Q:Isanexerciseofprofessionretailorservice?
A:Itisneitherretailnorservice.
Q:MayanErrequireanEetoworkonRH?
A: Yes. But Ee shall be compensated twice his

regularrate.
Q: What are the rates of compensation for RH on

EesregularworkdayandRHonEesrestday?
A:
FORMULASTOCOMPUTEWAGESON
REGULARHOLIDAYS(RH)
(M.C.No.10,Seriesof2004)
RHonEesregular
workday
RHonEesrestday
Ifunworked
100%
e.g. 300 Php regular wage

(RW)
100%
e.g.300Php(RW)
Ifworked(1st8hrs)
200%
e.g.300(RW)
+300
600=TotalWage(TW)
+30%of200%
e.g600(200%ofRW)
X0.3
180
180+600=780(TW)
Ifworked(OT)(excessof8hrs)
230%
200% + 30% of hourly rate

onsaiddate
230% + 30% of hourly
rateonsaiddate
Q: What is an important condition that should be

metinordertoavail/receivethesingleHP?
A:TheEeshouldnothavebeenabsentwithoutpay
ontheworkingdayprecedingtheRH.
LABOR STANDARDS

41
Q: Distinguish between monthly paid and daily
paidEes.
A:
MonthlyPaidEes DailyPaidEes
One who is paid his wage or
salary for everyday of the
month, including rest days,
Sundays, regular or special
days, although he does not
regularlyworkonthesedays.
Not excluded from benefit of

HP.
One who is paid his
wage or salary only
on those days he
actually worked,
except in cases of
regular or special
days, although he
does not regularly
workonthesedays.
Q: What is the effect if a legal holiday falls on a

Sunday?
A: A legal holiday falling on a Sunday creates no
legal obligation for the Er to pay extra to the Ee
who does not work on that day, aside from the
usual HP to its monthly paid Ee. (Wellington v.
Trajano,G.R.114698,July3,1995)
(1)InCaseofAbsences
Q:Discusstheconceptofabsences.
A:
ABSENCES
LOAwithpayontheday
immediatleypreceding
RH.
LOAwithoutpay onthe
dayimmediately
precedingaRH.
GR: All covered Ees are
entitledtoHP.
GR: An Ee may not be
paid the required HP
if he has not worked
onsuchRH.
XPN: Where the day
immediately
preceding the
holidayisa:
1. Nonworking day
(NWD) in the
establishmentor
2. The scheduled rest
day(RD)oftheEe.
(2)InCaseofTemporaryCessationofWork
Q: What is the effect in case there is a temporary
or periodic shutdown and temporary cessation of
work?
A:
TEMPORARYORPERIODICSHUTDOWNand
TEMPORARYCESSATIONOFWORK
(Sec.7,RuleIV,BookIII,IRR)
Instances Rule:
1. Yearlyinventoryor
2. When the repair or
RH falling within the
period shall be
cleaning of machineries
isundertaken
compensated.
Due to business reverses
(cessation as authorized by
theSec.ofLabor)
RH may not be paid
bytheEr
(3)HolidayPayofTeachers,Pieceworkers,
seafarers,seasonalworkers
Q:WhataretheHPsofcertainemployees?
A:
EMPLOYEES RULE
Private school
teachers (Faculty
members of
colleges and
universities)
1. RH during semestral
vacations
- NotentitledtoHP
2. RH during Christmas
vacation
- ShallbepaidHP
Eepaidby:
1. resultsor
2. output
(Piece work
payment)
HP shall not be less than his
average daily earnings for the
last 7 actual work days
precedingtheRH.
Provided: HP shall not be less
than the statutory minimum
wagerate.
SeasonalWorkers
MaynotbepaidtherequiredHP
duringoffseasonwheretheyare
notatwork.
Workers having no
regularworkdays
ShallbeentitledtoHP
Seafarers ShallbeentitledtoHP
Q: Are the school faculty who according to their

contracts are paid per lecture hour entitled to
unworkedHP?
A:
1. If during regular holiday No. Art. 94 of
LC is silent with respect to faculty members
paidbythehourwhobecauseoftheirteaching
contracts are obliged to work and consent to
be paid only for work actually done (except
when an emergency or a fortuitous event or a
national need calls for the declaration of
special holidays). RH specified as such by law
areknowntobothschoolandfacultymembers
as "no class days" certainly the latter do not
expect payment for said unworked days, and
this was clearly in their minds when they
enteredintotheteachingcontracts.(JoseRizal
Collegev.NLRC,G.R.No.65482,Dec.1,1987)
2. IfduringspecialpublicholidaysYes.The
law and the IRR governing HP are silent as to
payment on Special Public Holidays. It is
readily apparent that the declared purpose of
the HP which is the prevention of diminution
of the monthly income of the Ees on account


LABORLAWTEAM:
42
of work interruptions is defeated when a
regular class day is cancelled on account of a
special public holiday and class hours are held
on another working day to make up for time
lost in the school calendar. Otherwise stated,
thefacultymember,althoughforcedtotakea
rest, does not earn what he should earn on
thatday.Beitnotedthatwhenaspecialpublic
holiday is declared, the faculty member paid
by the hour is deprived of expected income,
anditdoesnotmatterthattheschoolcalendar
is extended in view of the days or hours lost,
for their income that could be earned from
othersourcesislostduringtheextendeddays.
Similarly, when classes are called off or
shortened on account of typhoons, floods,
rallies, and the like, these faculty members
must likewise be paid, whether or not
extensions are ordered. (Jose Rizal College v.
NLRC,G.R.No.65482,Dec.1,1987)
Q: Lita, a full time professor in San Ildefonso

University, is paid on a regularmonthly basis.She
teachesforaperiodof10monthsinaschoolyear,
excluding the 2 month summerbreak. During the
semestral break, the University did not pay her
emergency Cost of Living allowance (ECOLA)
although she received her regular salary since the
semestralbreakwasallegedlynotanintegralpart
of the school year and no teaching service were
actually rendered by her. In short, the University
invoked the principle of "no work, no pay". She
seeksyouradviceonwhetherornotsheisentitled
to receive her ECOLA during semestral breaks.
Howwouldyourespondtothequery?
A: There is no longer any law making it the legal

obligation of an employer to grant an Emergency
Cost of Living Allowance (ECOLA). Effective 1981,
the mandatory living allowances provided for in
earlier Presidential Decrees were integrated into
the basic pay of all covered employees. Thus,
whether the ECOLA will be paid or not during the
semestral break now depends on the provisions of
theapplicablewageorderorcontractwhichmaybe
a CBA, that many grant said ECOLA. (1997 Bar
Question)
Q:WhatistheconceptofdoubleHP?
A:2RHonsameday.
WED
MAUNDY
THURSDAY&ARAW
NGKAGITINGAN
RATE
Present unworked 200%
LOAw/pay unworked 200%
LOAw/pay worked
300%
(atleast)
Authorized
absence
worked
300%
(atleast)
Same
Workedanddayis
RestDay
390%
(+30%of
each3
100%)
Q:IsdoubleHPapplicableatpresent?
A: No, because Araw ng Kagitingan is moved to

MondaynearestApril9.(R.A.9242)
Q:WhatistheconceptofsuccessiveRH?
A:
WED
MAUNDY
THURS
GOOD
FRIDAY
ENTITLED
TOHP
Worked RH RH Yes.Both
LOA
w/pay
RH RH Yes.Both
LOAw/o
pay
RH RH No.Both
LOAw/o
pay
Worked RH
Yes.Onlyto
HPon
Friday
Q: What are the conditions so that an Ee may be

entitledto2successiveHP?
A:Onthedayimmediatelyprecedingthe1
st
RH,he
mustbe:
1. Present(worked),or
2. On LOA with pay. (Sec. 10, Rule IV, Book
III,IRR)
Q:Whatiftheconditionsarenotmet?
A:Hemustworkonthe1
st
RHtobeentitledtoHP
onthe2
nd
RH.(Sec.10,RuleIV,BookIII,IRR)
5.LEAVES
a.ServiceIncentiveLeavePay
Q:Whatisserviceincentiveleave(SIL)?
A: It is 5 days leave with pay for every employee
who has rendered at least 1 yr of service. It is
commutable to its money equivalent if not used or
exhaustedattheendofyear.
Q:Whatdoyoumeanbyatleast1yearofservice?
A: Service for not less than 12 months, whether
continuous or broken reckoned from the date the
employee started working, including authorized
absences and paid regular holidays unless the
working days in the establishment as a matter of
LABOR STANDARDS

43
practice or policy, or that provided in the
employment contract is less than 12 months, in
which case said period shall be considered as one
year.(Sec.3,RuleV,BookIII,IRR)
Q:WhoareentitledtoSIL?
A: GR: Applies to every Ee who has rendered at
least1yearofservice.(Art.95[a])
XPNS:
1. Government Ees and any of its political
subdivisionsincludingGOCCs
2. Thosealreadyenjoyingthebenefit
personalservicesofanother
4. Thosealreadyenjoyingvacationleavewith
payofatleast5days
5. ManagerialEes
6. Field personnel and other Ees whose
performanceisunsupervisedbytheEr
7. Employed in establishments regularly
employinglessthan10workers
8. Exemptestablishments
9. Engaged on task or contract basis, purely
commissionbasis,orthosewhoarepaidin
a fixed amount of performing work
irrespective of the time consumed in the
performancethereof.(Art.95[b])
Q: Are teachers of private schools on contract

basisentitledtoSIL?
A:Yes.Thephrase"thosewhoareengagedontask
orcontractbasis"should,however,berelatedwith
"field personnel" applying the rule on ejusdem
generis that general and unlimited terms are
restrained and limited by the particular terms that
they follow. Clearly, Cebu Institute of Technology
teaching personnel cannot be deemed as field
personnelwhichrefers"tononagriculturalEeswho
regularly perform their duties away from the
principalplaceofbusinessorbranchofficeoftheEr
and whoseactual hours of work in the field cannot
be determined with reasonable certainty. (Par. 3,
Art. 82, LC). (CIT vs. Ople, G.R. No. 70203, Dec. 18,
1987)
Q:IsSILcommutabletoitsmonetaryequivalentif
notusedorexhaustedattheendoftheyear?
A:Yes.Itisaimedprimarilyatencouragingworkers
to work continuously and with dedication to the
company.
Q:Whatisthebasisforcashconversion?
A: The basis shall be the salary rate at the date of
commutation. The availment and commutation of
theSILmaybeonaproratabasis.(No.VI(c),DOLE
HandbookonWorkersStatutoryMonetaryBenefit)
Q: Are parttime workers entitled to the full
benefitoftheyearly5daySIL?
A:Yes.Art.95ofLaborCodespeaksofthenumber
of months in a year for entitlement to said benefit.
(Bureau of Working Conditions Advisory Opinion to
Phil.IntegratedExporters,Inc.)
Q: Are piecerate workers entitled to the full
benefitoftheyearly5daySIL?
A:Itdepends.
1. Yes.Provided:
a. Theyareworkinginsidethepremises
oftheemployer(Er)and
b. Under the direct supervision of the
Er.
2. No.Provided:
a. They are working outside the
premisesoftheEr
b. Hours spent in the performance of
work cannot be ascertained with
reasonablecertainty
c. The are not under the direct
supervisionoftheEr
Q: Does it apply to Ees with salaries above

minimumwage?
A: No. The difference between the minimum wage

andtheactualsalaryreceivedbytheEescannotbe
deemedastheir13
th
monthpayandSILpayassuch
difference is not equivalent to or of the same
import as the said benefits contemplated by law.
(JPL Marketing Promotions v. CA, G.R. No. 151966,
July8,2005.)
Q: Explain the entitlement of terminated Ees to
SIL.
A:
1. Illegally dismissed Ees entitled to SIL
until actual reinstatement. (Integrated
Contractor and Plumbing Works, Inc. v.
NLRC,G.R.No.Aug.9,2005)
2. Legally dismissed Ees the Ee who had
not been paid of SIL from outset of
employment is entitled only of such pay
after a year from commencement of
service until termination of employment
or contract. (JPL Marketing Promotions v.
CA,G.R.No.151966,July8,2005)


LABORLAWTEAM:
44
b.MaternityLeave
Q:Whatismaternityleavebenefit?
A: Acoveredfemaleemployee(Ee)isentitledtoa
daily maternity benefit equivalent to 100% of her
present basic salary, allowances and other benefits
or the cash equivalent of such benefits for 60 days
or78daysincaseofcaesariandelivery.
Q: What are the requirements in order that
maternitybenefitsmaybeclaimed?
A:
1. There is childbirth, abortion or
miscarriage
2. She has paid at least 3 monthly
contributions
Q:Whataretheconditions?
A:
1. The Ee shall have notified her employer
(Er) of her pregnancy and the probable
date of her childbirth which notice shall
betransmittedtotheSSS
2. The payment shall be advanced by the Er

in 2 equal installments within 30 days
from the filing of the maternity leave
application
3. Incaseofcaesariandelivery,theEeshall
bepaidthedailymaternitybenefitfor78
days
4. Payment of daily maternity benefits shall

be a bar to the recovery of sickness
benefits for the same compensable
periodof60daysforthesamechildbirth,
abortion,ormiscarriage
5. The maternity benefits provided under
Section 14A shall be paid only for the
firstfourdeliveries
6. The SSS shall immediately reimburse the

Er of 100% of the amount of maternity
benefits advanced to the Ee by the Er
upon receipt ofsatisfactory proof ofsuch
paymentandlegalitythereof;and
7. If an Ee should give birth or suffer

abortion or miscarriage without the
required contributions having been
remitted for her by her Er to the SSS, or
without the latter having been previously
notified by the Er of the time of the
pregnancy, the Er shall pay to the SSS
damagesequivalenttothebenefitswhich
said Ee would otherwise have been
entitled to, and the SSS shall in turn pay
suchamounttotheEeconcerned.
c.PaternityLeave
Q:Whatistheconceptofpaternityleavebenefits?
A: Notwithstanding any law, rules and regulations

to the contrary, every married male employee in
theprivate and public sectors shall be entitled to a
paternityleaveof7dayswithfullpayforthefirst4
deliveriesofthelegitimatespousewithwhomheis
cohabiting.
Q:Whatispaternityleave?
A: It refers to the benefits granted to a
marriedmale employee allowing him not to report
for work for 7 days but continues to earn the
compensation therefore, on thecondition that his
spouse has delivered a child or suffered
amiscarriage for purposes of enabling him to
effectivelylendsupporttohiswifeinherperiodof
recovery and/or in the nursing of the newlyborn
child.
Q: What are the requirements in order to avail
paternityleave?
A: The maleemployee (Ee) applying for paternity
leaveshall:
1. Notify his employer (Er) of the pregnancy
ofhislegitimatespouseand
2. Theexpecteddateofsuchdelivery.
Q: What are the conditions for entitlement to

paternityleave?
A:ThemaleEeis;
1. Legally married to, and is cohabiting with
thewomanwhodeliversthebaby
2. Eeofprivateorpublicsector;
3. Onlyforthefirst4deliveriesoflegitimate
spousewithwhomheiscohabiting;and
4. Notify his Er of the pregnancy of his
legitimate spouse and the expected date
ofsuchdelivery
Note: For purposes of this Act, delivery shall include

childbirthoranymiscarriage.
Q: Jemuel is a bank employee of BPI. He is
cohabiting with Paula for straight five years with
whom he has four children. On the fifth year of
their cohabitation, Paula had her miscarriage.
Jemuelisavailinghimselfofhispaternityleave.Is
heentitledtopaternityleave?
LABOR STANDARDS

45
A: No. Jemuel is not entitled to paternity
leave because the facts of the case only show that
he is only cohabiting with Paula. The law expressly
provides that the male must be legally married to
the woman with whom he is cohabiting as a
condition for entitlement of paternity leave. Even
assumingthatJemuelislegallymarriedtoPaula,he
cannotavailalsoofthepaternityleavebecausethe
law limits the deliveries only to four which include
childbirth or miscarriage. Based on the facts, it is
alreadythefifthdeliveryofthewoman.
d.ParentalLeave
Q:Whatisparentalleave?
A:Leavebenefitsgrantedtoasoloparenttoenable
him/her to perform parental duties and
responsibilities where physical presence is
required.
In addition to leave privileges under existing laws,

parental leave of not more than 7 working days
every year shall be granted to any solo parent Ee
whohasrenderedserviceofatleast1year.(Sec.8)
Q: What are the conditions for entitlement of

parentalleave?
A:
1.Heorshemustfallamongthosereferredtoas
soloparent
2. Must have the actual and physical custody of
thechildorchildren
3. Must have at least rendered service of one
yeartohisorheremployer
4.Heorshemustremainasoloparent
Q: Who are those referred to as solo parent

entitledtoparentalleave?
A: Any individual who falls under any of the ff.

categories:
1.Awomanwhogivesbirthasaresultofrape
and other crimes against chastity even
without a final conviction of the offender,
provided, That the mother keeps and
raisesthechild;
2. Parent left solo or alone with the
responsibilityofparenthooddueto:
a.Deathofspouse;
b. Detention or service of sentence of
spouseforacriminalconvictionforat
least1yr;
c. Physical and/or mental incapacity of
spouse
d.Legalseparationordefactoseparation
fromspouseforatleast1yraslongas
he/she is entrusted with the custody
ofthechildren;
e. Nullity or annulment of marriage as
decreed by a court or by a church as
long as he/she is entrusted with the
custodyofthechildren;
f. Abandonment of spouse for at least 1
yr;
3. Unmarried mother/father who has
preferred to keep and rear his or her
child/childreninsteadof:
a.havingotherscareforthemor
b.givethemuptoawelfareinstitution;
4.Anyotherpersonwhosolelyprovides:
a.parentalcareand
b.supporttoachildorchildren;
5. Any family member who assumes the
responsibilityofheadoffamilyasaresult
ofthe:
a.death,
b.abandonment,
c.disappearanceor
d. prolonged absence of the parents or
soloparent.
Note: A change in the status or circumstance of the

parent claiming benefits under this Act, such that
he/sheisnolongerleftalonewiththeresponsibilityof
parenthood,shallterminatehis/hereligibilityforthese
benefits.(Sec.3)
e.Leavesforvictimsofviolenceagainstwomen
Q:Whatistheleaveforvictimsofviolenceagainst
women or otherwise known as battered woman
leave?
A: A female employee who is a victim of violence

(physical, sexual, or psychological) is entitled to a
paid leave of 10 days in addition to other paid
leaves.(R.A.9262,AntiVAWCAct)
6.SERVICECHARGES
a.CoverageandExclusion
Q:Whatareservicecharges(SC)?
A: These are charges collected by hotels,

restaurants andsimilar establishments and shall be
distributedattherateof:
COVEREDEes MANAGEMENT
85% 15%
Equally
distributed
1. To answer for losses and
breakagesand
2. Distributed to Ees receiving


LABORLAWTEAM:
46
amongthem more than P2000 a month at
the discretion of the
management.
Q:WhoarecoveredEes?
A: GR: All Ees are covered, regardless of their

position, designation, employment status,
irrespectiveofthemethodbywhichtheirwagesare
paid.
Note: Applies only to hotels, restaurants and similar

establishmentcollectingservicecharges.
XPN:ManagerialEes.(Sec.2,RuleVI,BookIII,IRR)
b.Distribution
Q:Whenistheshareofemployeedistributedand
paidtothem?
A: Not less than once every 2 weeks or twice a
monthatintervalsnotexceeding16days.
c.Integration
Q: What happens if the Service Charge is
abolished?
A:TheshareofthecoveredEesshallbeconsidered
integrated in their wages on the basis of the
average monthly share of each Ees for the past 12
monthsimmediatelyprecedingtheabolition.
Note:Servicechargesformpartoftheawardinillegal
dismissalcases.
7.13
th
MONTHPAYANDOTHERBONUSES
a.Coverage,Exclusion/exemptionsfromcoverage
Q:Whatis13
th
monthpayoritsequivalent?
A: Additional income based on wage required by

P.D. 851 Requiring all Employers to pay their
Employees a13
th
monthpaywhichisequivalentto
1/12 of the total basic salary earned by an
employee(Ee)withinacalendaryear.
Q:WhoarecoveredbyP.D.851?
A: GR: All rankandfile Ees regardless of the
amount of basic salary that they receive in a
month,iftheiremployers(Er)arenototherwise
exemptedfrompayingthe13
th
monthpay.Such
Ees are entitled to the 13
th
month pay
regardless of said designation of employment
status,andirrespectiveofthemethodbywhich
theirwagesarepaid.
Provided, that they have worked for at least 1

month, during a calendar year. (Revised
Guidelines on the Implementation of the 13
th
MonthPayLaw)
XPN:
1. GovernmentEes
2. Householdhelpers
3. Eespaidpurelyoncommissionbasis
4. Eesalreadyreceiving13
th
monthpay
Q: What would be your advice to your client, a

manufacturing company, who asks for your legal
opinion on whether or not the 13th Month Pay
LawcoversacasualEewhoispaidadailywage?
A: I will advise the manufacturing company to pay
thecasualEe13thMonthPayif suchcasualEehas
workedforatleast1monthduringacalendaryear.
The law on the 13th Month Pay provides that Ees
are entitled to the benefit of said law regardless of
theirdesignationoremploymentstatus.
The SC ruled in Jackson BuildingCondominium
Corp. v. NLRC, G.R. No. 112546, March 13, 1996,
interpreting P.D.851, as follows: Ees are entitled to
the 13
th
month pay benefits regardless of their
designation and irrespective of the method by
whichtheirwagesarepaid.(1998BarQuestion)
Note:AnEr,maygivetohisEesoftherequired13
th
Monthpaybeforetheopeningoftheregularschoolyr.
andtheotherhalfonorbeforetheDec.24.
Q:Is13
th
MonthPaylegallydemandable?
A: Yes. It is a statutory obligation, granted to
covered Ees, hence, demandable as a matter of
right.(Sec1,P.D.851)
b.Natureof13
th
MonthPay
Q: In what form is the 13
th
month pay paid or
given?
A:Itisgivenintheformof:
1. ChristmasBonus
2. MidyearBonus
3. ProfitSharingScheme
4. Other Cash bonuses amounting to not
lessthan1/12ofitsbasicsalary
Note:Itmustalwaysbeintheformofalegaltender.
Q:Whatarenotpropersubstitutesfor13
th
Month
pay?
A:
1. Freerice
LABOR STANDARDS

47
2. Electricity
3. Cashandstockdividends
4. COLA(Sec.3)
Q: Concepcion Textile Co. included the OT pay,

nightshift differential pay, and the like in the
computation of its Ees 13thmonth pay.
Subsequently, with the promulgation of the
decision of the SC in the case of SMC vs. Inciong
(103SCRA139)holdingthattheseothermonetary
claims should not be included in the computation
of the 13th month pay, Concepcion Textile Co.
sought to recover under the principle of solutio
indebiti the overpayment of the Ees 13thmonth
pay, by debiting against future 13thmonth
payments whatever excess amounts it had
previouslymade.
(1)IstheCompany'sactiontenable?
(2) With respect to the payment of the 13th
month pay after the SMC ruling, what
arrangement, if any, must the Company make in
order to exclude from the 13thmonth pay all
earnings and remunerations other than the basic
pay?
A: The Company's action is not tenable. The
principle of solutio indebiti which is a civil law
conceptisnotapplicableinlaborlaw.(DavaoFruits
Corp. vs. NLRC, et al., G.R. No. 85073 August 24,
1993). After the 1981 SMC ruling, the High Court
decided the case of Philippine Duplicators Inc. vs.
NLRC, GR 110068, Nov. 11, 1993. Accordingly,
management may undertake to exclude sick leave,
vacation leave, maternity leave, premium pay for
regular holiday, night differential pay and cost of
living allowance. Sales commissions, however,
should be included based on the settled rule as
earlier enunciated in Songco vs. NLRC, G.R. No. L
50999,March23,1990.(1994BarQuestion)
Q: Are all Ers required to pay 13
th
Month Pay
underP.D.851?
A:
GR:Yes.ItappliestoallErs,
XPN:
1. DistressedErs:
a. Currently incurring substantial losses
or
b. In the case of nonprofit institutions
and organizations, where their
income, whether from donations,
contributions, grants and other
earnings from any source, has
consistently declined by more than
40% of their normal income for the
last 2 years, subject to the provision
ofSec.7ofP.D.851;
2. The Government and any of its political

subdivisions, including GOCCs, except
those corporations operating essentially
as private subsidiaries of the
Government;
3. ErsalreadypayingtheirEes13monthpay
or more in a calendar year of its
equivalentatthetimeofthisissuance:
4. Itsequivalentshallinclude:
a. Christmasbonus
b. Midyearbonus
c. Profitsharing payments
and
d. Other cash bonuses
amounting to not less than
1/12th of the basic salary
but
5. Itshallnotinclude:
a. cashandstockdividends,
b. COLA
c. all other allowances
regularly enjoyed by the
Ee, as well as non
monetarybenefits.
6. Ers of household helpers and persons in

thepersonalserviceofanotherinrelation
tosuchworkers;and
7. Ers of those who are paid on purely

commission, boundary, or task basis, and
those who are paid a fixed amount for
performingaspecificwork,irrespectiveof
the time consumed in the performance
thereof, except where the workers are
paidonpieceratebasisinwhichcasethe
employer shall be covered by this
issuance insofar as such workers are
concerned.(Sec3,P.D.851)
Q:WhataretheoptionsofcoveredErs?
A:
1. Pay onehalf of the 13thmonth pay
required before the opening of the
regular school year and the other half on
or before the 24th day of December of
everyyear.
2. In any establishment where a union has
been recognized or certified as the
collective bargaining agent of the Ee, the
periodicity or frequency of payment of
the13thmonthpaymaybethesubjectof
agreement.


LABORLAWTEAM:
48
Q:Howareclaimsadjudicated?
A:Nonpaymentofthe13
th
monthpayprovidedby
P.D. 851 and the rules of NLRC shall be treated as
moneyclaimscases.
Q: Are the following Ees entitled to 13
th
month
pay?
a. Eeswhoarepaidbyresults
b. EeswithmultipleErs
c. Privateschoolteachers
d. ResignedorseparatedEes
A:
1. Eepaidbyresultsentitledto13
th
month
pay.
Note: Ees paid a fixed or guaranteed wage

plus commission are also entitled to the
mandated 13
th
month pay, based on their
total earnings during the calendar year, i.e.
onboththeir fixedorguaranteed wage and
commission
2. ThosewithMultipleErsGovernmentEes
working part time in a private enterprise,
including private educational institutions,
as well as Ees working in 2 or more
private firms, whether full or part time
basis, are entitled to the required 13
th
month pay from all their private Ers

regardless of their total earnings from
eachoralltheirErs.
3. Private School Teachers, including faculty

members of universities and colleges
entitled regardless of the number of
months they teach or are paid within a
year, if they have rendered service for at
least1monthwithinayear.
4. ResignedorSeparatedEesIfresignedor
separated from work before the time of
payment of 13
th
month pay, entitled to
monetary benefit in proportion to the
length of time he started working during
the calendar year up to the time of
resignation or termination of service.
(Prorated13
th
monthpay)
Q:Whendoesprorationof13
th
MonthPayapply?
A: GR: Proration of this benefit applies only in

cases of resignation or separation from work;
computation should be based on length of
service and not on the actual wage earned by
the worker (Honda Phils. v. Samahan ng
Manggagawa sa Honda, G.R. No. 145561, June
15,2005)
XPN: Ees who are paid a guaranteed minimum

wageorcommissionsearnedareentitledto13
th
month pay based on total earnings. (Philippine

Agricultural Commercial and Industrial Workers
Unionv.NLRC,G.R.No.107994,Aug.14,1995)
Q:Is14
th
MonthPaylegallydemandable?
A: No. The granting of 14

th
month pay is a
management prerogative and is not legally
demandable.Itisbasicallyabonusandisgratuitous
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
75289,Aug.31,1989)
c.Commissionsvisvis13
th
monthpay
Q: What is commission in relation to 13
th
month
pay?
A:
1. The salesmans commissions, comprising
a predetermined percent of the selling
priceofthegoodssoldbyeachsalesman,
were properly included in the term basic
salary for purposes of computing their
13
th
monthpay.
2. The so called commission paid to or

received by medical representatives of
BoieTakeda Chemicals or by the rank and
file Ees of Phil. Fuji Xerox were excluded
from the term basic salary because these
were paid as productivity bonuses. Such
bonuses closely resemble profit sharing,
payments and have no clear, direct,
necessaryrelationtotheamountofwork
actually done by each individual
employee.
d.CBAvisvis13
th
monthpay
Q:WhatisCBAinrelationto13
th
monthpay?
A: The absence of an express provision in the CBA

obligating the employer to pay the members of a
union thirteenth month pay is immaterial.
Notwithstanding therefore the absence of any
contractualagreement,thepaymentofathirteenth
monthpaybeingastatutorygrant,compliancewith
the same is mandatory and is deemed incorporate
intheCBA.
8.WOMENWORKERS
a.Discrimination(Art.135.LC);ProhibitedActs(Art.
137.LC)
LABOR STANDARDS

49
Q:WhataretheunlawfulactsagainstwomenEe?
A:
1. Discrimination with respect to the terms
and conditions of employment solely on
accountofsex
a. Paymentoflessercompensationtoa
female Ee as against a male Ee for
workofequalvalue
b. Favoring a male Ee with respect to
promotion, training opportunities,
study and scholarship grants on
accountofgender.(Art.135)
c. Favoring a male applicant with
respect to hiring where the
particularjobcanequallybehandled
byawoman
d. Favoring a male Ee over a female Ee
with respect to dismissal of
personnel.
2. Stipulating, whether as a condition for
employment or continuation of
employment:
a. That a woman Ee shall not get
married,or
b. That upon marriage, such woman Ee
shall be deemed resigned or
separated.(Art.136)
Note: A woman worker may not be
dismissed on the ground of dishonesty for
havingwrittensingleonthespaceforcivil
status on the application sheet, contrary to
the fact that she was married. (PT&T Co. v.
NLRC,G.R.No.118978,May23,1997)
3. Dismissing, discriminating or otherwise
prejudice a woman Ee by reason of her
beingmarried.(Art.136)
4. Denying any woman Ee benefits provided
bylaw.(Art.137)
5. Discharge any woman for the purpose of
preventing her from enjoying any of the
benefitsprovidedbylaw.(Art.137)
6. Discharging such woman on account of
her pregnancy, or while on leave or in
confinement due to her pregnancy. (Art.
137)
7. Discharging or refusing the admission of
such woman upon returning to her work
for fear that she may again be pregnant.
(Art.137)
Note: Discrimination in any form from pre

employment to post employment, including hiring,
promotion or assignment, based on the actual,
perceived or suspected HIV status of an individual is
unlawful. (Philippine AIDS Prevention and Control Act
of1998,[R.A.8504])
Under Sec. 2 of R.A. 9710 or the Magna Carta of

Women, the State condemns discrimination against
women in all its forms and pursues by all appropriate
means and without delay the policy of eliminating
discrimination against women in keeping with the
Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW) and other
international instruments consistent with Philippine
law. The State shall accord women the rights,
protection, and opportunities available to every
memberofsociety.
The State shall take steps to review and, when

necessary, amend and/orrepealexistinglawsthat are
discriminatory to women within three (3) years from
theeffectivityofthisAct.(Sec.12,R.A.9710)
Q: Can an individual, the sole proprietor of a

business enterprise, be said to have violated the
AntiSexual Harassment Act of 1995 if he clearly
discriminates against women in the adoption of
policy standards for employment and promotions
intheenterprise?Explain.
A: When an employer (Er) discriminates against

women in the adoption of policy standards for
employment and promotion in his enterprise, he is
not guilty of sexual harassment. Instead, the Er is
guiltyofdiscriminationagainstwomenEeswhichis
declaredtobeunlawfulbytheLC.
For an Er to commit sexual harassment, he as a

person of authority, influence or moral ascendancy
should have demanded, requested or otherwise
required a sexual favor from his Ee whether the
demand, request or requirement for submission is
accepted by the object of said act. (2003 Bar
Question)
Q: At any given time, approximately 90% of the

production workforce of a semiconductor
company are females. 75% of the female workers
are married and of childbearing years. It is
imperativethattheCompanymustoperatewitha
minimum number of absences to meet strict
delivery schedules. In view of the very high
number of lostworkinghoursdue to absences for
familyreasonsandmaternityleaves,thecompany
adopted a policy that it will employ married
women as production workers only if they are at
least 35 yrs of age. Is the policy violative of any
law?
A: Yes, it is violative of Art. 140 of the LC which
provides that no employer shall discriminate
against any person in respect to terms and
conditions of employment on account of his age.
(1998BarQuestion)
b.StipulationAgainstMarriage(Art.136,LC)


LABORLAWTEAM:
50
Q:Whatisthenospouseemploymentpolicy?
A:GR:
1. Policy banning spouses from working in
thesamecompany.
2. MaynotfaciallyviolateArt.136oftheLC
but it creates a disproportionate effect
and the only way it could pass judicial
scrutinyisbyshowingthatitisreasonable
despite the discriminatory albeit
disproportionateeffect.
XPN: Bona fide occupational qualification rule

(BFOQ)
Q:WhatistheBFOQrule?
A:TheremustbeafindingofanyBFOQtojustifyan
Ers no spouse rule. There must be a compelling
business necessity for which no alternative exist
otherthanthediscriminatingpractice.
To justify a BFOQ the employer must prove two
factors:
1. That the employment qualification is
reasonably related to the essential
operationofthejobinvolved;and
2. That there is a factual basis for believing
that all or substantially all persons
meeting the qualification would be
unable to properly perform the duties of
the job. (Star Paper v. Simbol, G.R. No.
164774,April12,2006)
Q:WhatistheimportanceoftheBFOQRule?
A:
1. To ensure that the Ee can effectively
performhiswork
2. Sothatthenospouserulewillnotimpose
anydangertobusiness.
Q: Tecson was employed by Glaxo as medical

representativewhohasapolicyagainstEeshaving
relationships against competitors Ees. Tecson
married Bettsy, a Branch coordinator of Astra,
Glaxos competitor. Tecson was transferred to
anotherarea.Tecsondidnotacceptsuchtransfer.
IsthepolicyofGlaxovalidandreasonablesoasto
constitute the act of Tecson as willful
disobedience?
A: The prohibition against personal or marital

relationships with Ees of competitors companies
upon Glaxos Ees is reasonable under the
circumstances because relationships of that nature
might compromise the interest of the company.
Glaxo does not impose an absolute prohibition
against relationships between its Ees and those of
competitor companies. Its Ees are free to cultivate
relationships with and marry persons of their own
choosing.Whatthecompanymerelyseekstoavoid
is a conflict of interest between the Ee and the
company that may arise out of such relationships.
Furthermore, the prohibition forms part of the
employment contract and Tecson was aware of
such restrictions when he entered into a
relationship with Bettsy. (Duncan Asso. of
DetailmanPTGWO v. Glaxo Wellcome Phil. Inc.,
G.R.No.162994,Sep.17,2004)
c.ClassificationofCertainWomenWorkers(Art.
138,LC)
Q:WhoarecoveredunderthisTitle?
A: Any women who is permitted or suffered to
work:
1. Withorwithoutcompensation
2. In any night club, cocktail lounge,
massage clinic, bar or similar
establishment
3. Undertheeffectivecontrolorsupervision
oftheErforasubstantialperiodoftime
4. Shall be considered as an Ee of such
establishment for purposes of labor and
sociallegislation.
d.AntiSexualHarrasmentAct
RA7877
Q: What is the policy of the State in enacting the

AntiSexualHarassmentlaw?
A:TheStateshall:
1. Valuethedignityofeveryindividual
2. Enhance the development of it human
resources
3. Guarantee full respect for human rights
and
4. Uphold the dignity of workers, Ee,
applicants for employment, students or
those undergoing training, instruction or
education.(Sec.2)
Q:Whomaybeheldliableforsexualharassment?
A: In a work, education or trainingrelated

environmentsexualharassmentmaybecommitted
byan:
1. Ee
2. Manager
3. Supervisor
LABOR STANDARDS

51
4. Agentofthe(Er)
5. Teacher,instructor,professor
6. Coach,trainer,or
7. Any other person who, having authority,
influence or moral ascendancy over
anotherinaworkortrainingoreducation
environment:
a. Demands
b. Requestsor
c. Requires
any sexual favor from the other,
regardless of whether the demand,
request or requirement for
submission isaccepted by the object
ofR.A.7877.(Sec.3)
Q:Howissexualharassmentcommitted?
A:Generally,apersonliabledemands,requests,or
otherwiserequiresanysexualfavorfromtheother,
regardless of whether the demand, request or
requirement for submission is accepted by the
latter.
Q: Under the Sexual Harassment Act, does the
definition of sexual harassment require a
categoricaldemandorrequestforsexualfavor?
A: No. It is true that the provision calls for a
demand, request or requirement of a sexual
favor. But it is not necessary that the demand,
request or requirement of a sexual favor be
articulated in a categorical manner. It may be
discerned, with equal certitude, from the acts of
theoffender.
Likewise, it is not essential that the demand,
request or requirement be made as a condition for
continued employment or for promotion to a
higher position. It is enough that the respondents
acts result in creating an intimidating, hostile or
offensiveenvironmentfortheemployee.(Domingo
v.Rayala,G.R.No.155831,Feb.18,2008)
Q:Whenissexualharassmentcommitted?
A:Specifically:
1. In a workrelated or employment
environment:
a. The sexual favor is made as a
condition in the hiring or in the
employment, reemployment or
continued employment of said
individual, or in granting said
individual favorable compensation,
terms, conditions, promotions, or
privileges;ortherefusaltograntthe
sexual favor results in limiting,
segregating or classifying the Ee
which in a way would discriminate,
deprive or diminish employment
opportunitiesorotherwiseadversely
affectsaidEe;
b. TheaboveactswouldimpairtheEes
rights or privileges under existing
laborlaws;or
c. The above acts would result in an
intimidating, hostile, or offensive
environmentfortheEe.
2. Inaneducationortrainingenvironment:
a. Against one who is under the care,
custody or supervision of the
offender;
b. Against one whose education,
training, apprenticeship or tutorship
isentrustedtotheoffender;
c. Sexual favor is made a condition to
the giving of a passing grade, or the
granting of honors and scholarships,
or the payment of a stipend,
allowance or other benefits,
privileges,orconsiderations;or
d. Sexual advances result in an
intimidating, hostile or offensive
environmentforthestudent,trainee
orapprentice.
Q: What are the duties of the Er or head of office

in a workrelated, education or training
environment?
A:
1. Prevent or deter the commission of acts
ofsexualharassmentand
2. Providetheproceduresfortheresolution,
settlement or prosecution of acts of
sexualharassment.
Towardsthisend,theErorheadofofficeshall:
1. Promulgate appropriate rules and

regulationsinconsultationwiththejointly
approved by the Ees or students or
trainees, through their duly designated
representatives, prescribing the
procedure for the investigation or sexual
harassment cases and the administrative
sanctionstherefore.(Sec.4)
Note: Administrative sanctions shall not be

abartoprosecutioninthepropercourtsfor
unlawfulactsofsexualharassment.
The said rules and regulations issued shall
include,amongothers,guidelinesonproper
decorum in the workplace and educational
ortraininginstitutions.


LABORLAWTEAM:
52
2. Create a committee on decorum and

investigation of cases on sexual
harassment.
3. The Er or head of office, education or
training institution shall disseminate or
post a copy of this R.A. 7877 for the
informationofallconcerned
Q: What is the liability of the Er, head of office,

educationalortraininginstitution?
A: Ee shall be solidarily liable for damages arising

from the acts of sexual harassment committed in
the employment, education or training
environmentprovided:
1. The Er or head of office, educational or

training institution is informed of such
actsbytheoffendedparty;and
2. No immediate action is taken thereon.
(Sec.5)
Q: Can an independent action for damages be

filed?
A: Yes. Nothing under R.A. 7877 shall preclude the

victimofwork, educationortrainingrelatedsexual
harassment from instituting a separate and
independent action for damages and other
affirmativerelief.(Sec.6)
Q: What is the threefold liability rule in sexual

harassmentcases?
A:Anactofsexualharassmentmaygiverisetocivil,
criminal and administrative liability on the part of
theoffender,eachproceedingindependentlyofthe
others.
Q:Whendoestheactionprescribe?
A:Anyactionshallprescribein3years.
Q: A Personnel Manager, while interviewing an

attractive female applicant for employment,
stareddirectlyatherforprolongedperiods,albeit
in a friendly manner. After the interview, the
manager accompanied the applicant to the door,
shook her hand and patted her on the shoulder.
He also asked the applicant if he could invite her
for dinner and dancing at some future time. Did
thePersonnelManager,bytheaboveacts,commit
sexualharassment?Reason.
A: Yes, because the Personnel Manager, is in a
position to grant or not to grant a favor (a job) to
theapplicant.Underthecircumstances,invitingthe
applicant for dinner or dancing creates a situation
hostileorunfriendlytotheapplicant'schancesfora
job if she turns down the invitation. [Sec. 3(a)(3),
R.A. No. 7877, AntiSexual Harassment Act]. (2000
BarQuestion)
Q: In the course of an interview, another female
applicant inquired from the same Personnel
Manager if she had the physical attributes
required for the position she applied for. The
Personnel Manager replied: "You will be more
attractive if you will wear micromini dresses
without the undergarments that ladies normally
wear." Did the Personnel Manager, by the above
reply, commit an act of sexual harassment?
Reason.
A: Yes.Theremarkswouldresultinanoffensiveor
hostile environment for the Ee. Moreover, the
remarks did not give due regard to the applicants
feelingsanditisachauvinisticdisdainofherhonor,
justifying the finding of sexual harassment
(Villaramav.NLRC,G.R.No.106341,Sep.2,1994)
Q:PedritoMasculado,acollegegraduatefromthe
province,triedhisluckinthecityandlandedajob
asutility/maintenancemanatthewarehouseofa
bigshoppingmall.AfterworkingasacasualEefor
6 months, he signed a contract for probationary
employment for 6 months. Being wellbuilt and
physically attractive, his supervisor, Mr. Hercules
Barak,tookspecialinteresttobefriendhim.When
his probationary period was about to expire, he
was surprised when one afternoon after working
hours, Mr. Barak followed him to the mens
comfort room. After seeing that no one else was
around, Mr. Barak placed his arm over Pedritos
shoulderandsoftlysaid:Youhavegreatpotential
tobecomearegularEeandIthinkIcangiveyoua
favorablerecommendation.Canyoucomeoverto
my condo unit on Saturday evening so we can
have a little drink? Im alone, and Im sure you
want to stay longer with the company. Is Mr.
Barakliableforsexualharassmentcommittedina
workrelatedoremploymentenvironment?
A: Yes, the elements of sexual harassment are all
present. The act of Mr. Barak was committed in a
workplace. Mr. Barak, as supervisor of Pedrito
Masculado, has authority, influence and moral
ascendancyoverMasculado.
Given the specific circumstances mentioned in the

questionlikeMr.BarakfollowingMasculadotothe
comfort room, etc. Mr. Barak was requesting a
sexual favor from Masculado for a favorable
recommendation regarding the latter's
employment.Itisnotimpossibleforamale,whois
a homosexual, to ask for a sexual favor from
anothermale.(2000BarQuestion)
LABOR STANDARDS

53
9.MINORWORKERS
a.Regulationofworkinghoursofachild,
Employmentofthechildinpublicentertainment,
Prohibitionofemployingminorsincertain
undertakingsandincertainadvertisements
Q:Whatarethegeneralprohibitions?
A:GR:
1. No person under 18 years of age will be
allowedtobeemployedinanundertaking
which is hazardous or deleterious in
nature.
2. No Er shall discriminate against any
personinrespecttotermsandconditions
ofemploymentonaccountofhisage.
XPN:
A. Below15yrs.Old
1. The child works directly under the
sole responsibility of his parents, or
guardians who employ members of
his family, subject to the following
conditions:
a. Employmentdoesnotendanger
the childs safety, health and
morals
b. Employment does not impair
thechildsnormaldevt
c. Erparent or legal guardian
provides the child with the
primary and/or secondary
education prescribed by the
Dept.ofEducation
2. The childs employment or
participationin publicentertainment
or information through cinema,
theater, radio or television is
essentialprovided:
a. Employment contract is
concludedbythechildsparents
orlegalguardian,
b. With the express agreement of
the child concerned, if possible,
and
c. The approval of DOLE, the
following must be complied
with:
i. The employment does not
involve advertisement or
commercials promoting
alcoholic beverages,
intoxicating drinks, tobacco
and its byproducts or
exhibitingviolence
ii. there is a written contract
approvedbyDOLE
iii. the conditions provided in
thefirstinstancearemet.
B. Above 15 but below 18 may be
employedinanynonhazardouswork
C. Above18noprohibition
Q:WhatisthedutyoftheErbeforeengagingchild
intowork?
A: The Er shall first secure a work permit from the
DOLE which shall ensure observance of the
requirements.(Sec.12,R.A.7160)
Q:Whatistheruleregardingtheissuanceofwork
certificates/ permits for children at least 15 but
below18yearsofage?
A:TheissuanceofaDOLECertificatetoyouthaged
15to below18years of age is not required by law.
No employer shall deny opportunity to any such
youthapplyingforemploymentmerelyonthebasis
oflackofworkpermitorcertificateofeligibilityfor
employment. Any young person aged 15 to below
18 years of age may present copy of this DOLE
advisorytoanyemployer,jobprovider,government
authority, or his/her representative when seeking
employmentoranytimeduringemployment.(DOLE
DepartmentAdvisoryNo.0108)
Q:Whatisanonhazardouswork?
A: It is any work or activity in which the Ee is not
exposed to any risk which constitutes an imminent
dangertohissafetyandhealth.
Q:Whatarehazardousworkplaces?
A:
1. Nature of work exposes the workers to
dangerous environmental elements,
contaminantsorworkconditions
2. Workers are engaged in construction work,
logging, firefighting, mining, quarrying,
blasting, stevedoring, dock work, deepsea
fishing,andmechanizedfarming
3.Workersareengagedinthemanufactureor
handling of explosives and other pyrotechnic
products
4. Workers use or are exposed to heavy or
powerdriventools
Q: You were asked by a paint manufacturing

company regarding the possible employment as a
mixer of a person, aged 17, who shall be directly
under the care of the section supervisor. What
advicewouldyougive?Explainbriefly.
A: I will advise the paint manufacturing company
thatitcannothireapersonwhoisaged17.Art139


LABORLAWTEAM:
54
(c)oftheLCprovidesthatapersonbelow18yrsof
age shall not be allowed to work in an undertaking
which is hazardous or deleterious in nature as
determined by the SLE. Paint manufacturing has
been classified by the SLE as a hazardous work.
(2002BarQuestion)
Q: What are the prohibitions on the employment
ofchildrenincertainadvertisements?
A: No employment of child models in all
commercialadvertisementspromoting:
1. Violence
2. Alcoholicbeverages
3. Intoxicatingdrinks
4. Tobaccoanditsbyproducts
Q: A spinster school teacher took pity on one of

her pupils, a robust and precocious 12year old
boywhosepoorfamilycouldbarelyaffordthecost
ofhisschooling.Shelivesaloneatherhousenear
the school after her housemaid left. In the
afternoon, she lets the boy do various chores as
cleaning, fetching water and all kinds of errands
after school hours. She gives him rice and P30.00
beforetheboygoeshomeat7:00everynight.The
school principal learned about it and charged her
with violating the law which prohibits the
employment of children below 15 years of age. In
her defense, the teacher stated that the work
performed by her pupil is not hazardous, and she
invokedtheexceptionprovidedintheDepartment
Order of DOLE for the engagement of persons in
domestic and household service. Is her defense
tenable?Reason?
A:No,herdefenseisnottenable.UnderArt.139of
the LC on minimum employable age, no child
below 15 years of age shall be employed except
when he works directly under the sole
responsibility of his parents or guardian, the
provisions of the alleged DO of DOLE to the
contrary notwithstanding. A mere DO cannot
prevail over the express prohibitory provisions of
theLC.(2004BarQuestion)
Q: Determine whether the following minors
should be prohibited from being hired and from
performing their respective duties indicated
hereunder:
1. A 17year old boy working as miner at the
WalwadiMiningCorporation.
A: Yes, he should be prohibited from being hired
andfromperformingthedutiesofaminerbecause
suchconstituteshazardousworkunderD.O.No.04
Seriesof1999.Art.139(c)ofLCexpresslyprohibits
the employment of persons below 18 years of age
inanundertakingwhichishazardousordeleterious
innatureasdeterminedbytheSLE.
2. An 11year old boy who is an accomplished

singer and performer in different parts of the
country.
A:No,heshouldnotbeprohibitedfrombeinghired
andfromperformingasasinger.UnderArt.VIIISec.
12par.2ofR.A.7619asamendedbyR.A.7658,this
constitutes an exception to the general prohibition
againsttheemploymentofchildrenbelow15years
of age, provided that the following requirements
arestrictlycompliedwith:
1. TheErshallensuretheprotection,health
safetyandmoralsofthechild
2. TheErshallinstitutemeasurestoprevent
the childs exploitation or discrimination
taking into account the system and level
of remuneration, and the duration and
arrangementofworkingtime;and
3. The Er shall formulate and implement,
subjecttotheapprovalandsupervisionof
competent authorities, a continuing
program for training and skill acquisition
of the child. Moreover, the child must be
directly under the sole responsibility of
his parents or guardian and his
employment should not in any way
interferewithhisschooling.
3. A 15year old girl working as a library assistant

inagirls'highschool.
A: No, she should not be prohibited from working
asalibraryassistantbecausetheprohibitionin the
LC against employment of persons below 18 years
of age merely pertains to employment in an
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by the
SLE working as a library assistant is not one of
undertakingsidentifiedtobehazardousunderD.O.
No04Seriesof1999.
4. A 16year old girl working as model promoting
alcoholicbeverages.
A:Yes,sheshouldbeprohibitedfromworkingasa
model promoting alcoholic beverages. R.A. 7610
categorically prohibits the employment of child
models in all commercials or advertisements
promoting alcoholic beverages and intoxicating
drinks,amongotherthings.
5. A 17year old boy working as a dealer in a

casino.
LABOR STANDARDS

55
A: Yes, he should be prohibited from working as a
dealer in casino, because Art. 140 of the LC
prohibits the employment of persons below 18
years of age in an undertaking which is hazardous
or deleterious in nature identified in the guidelines
issuedbytheSLE.Workingasadealerinacasinois
classified as hazardous under D.O. No. 04 Series of
1999 as it exposes children to physical,
psychologicalorsexualabuses.(2006BarQuestion)
b.ActAgainstChildLabor(RA9231)andChildAbuse
Law(RA7610)
Q:Whatischildlabor?
A: Any work or economic activity performed by a

child that subjects him or her to any form of
exploitation or is harmful to his or her health and
safety or physical, mental or psychosocial
development.
Q:Whoisaworkingchild?
A:Anychildengagedasfollows:
1. Whenthechildisbelow18yearsofagein
a work or economic activity that is not
childlabor;or
2. Whenthechildisbelow15yearsofage:
a. In work where he/she is directly
under the responsibility of his/her
parents or legal guardian and where
only members of the childs family
areemployed;or
b. In public entertainment or
information
Q: When may the State intervene in behalf of the

child?
A:
1. The parent, guardian, teacher or person
havingcareorcustodyofthechildfailsor
is unable to protect the child against
abuse,exploitationanddiscrimination;or
2. When such acts are committed against
the child by the said parent, guardian,
teacher or person having care and
custodyoverthechild
Q:Whatisthelimitationonthehoursofworkofa
workingchild?
A:Ifthechildis:
1. Below15yearsofagenotmorethan20
hours a week and not more than 4 hours
aday
- Not allowed to work between 8:00
pm6:00am
2. At least 15 years of age but below 18

years of age will not exceed 8 hours a
dayor40hoursaweek
- Notallowedtoworkbetween10:00
pm6:00am
Q:Whataretheworstformsoflabor?
A:
1. All forms of slavery (AntiTrafficking of
Persons Act of 2003) or practices similar
to slavery such as sale and trafficking of
children, debt bondage and serfdom and
forced or compulsory labor, including
recruitment of children for use in armed
conflict;
2. The use, procuring, offering or exposing
of a child pornography or for
pornographicperformances;
3. The use, procuring, offering or exposing
of a child for illegal or illicit activities,
includingtheproductionandtraffickingof
dangerous drugs and volatile substances
prohibitedunderexistinglaws;
4. Employingchildmodelsinallcommercials
or advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco
anditsbyproductsandviolence;and
5. Work which, by its nature or
circumstancesinwhichitiscarriedout,is
hazardous or likely to be harmful to the
health,safetyormoralsofchildren.
Q: Who can file a complaint for unlawful acts

committedagainstchildren?
A:
1. Offendedparty
2. Parentsorguardians
3. Ascendants or collateral relatives within
the3
rd
degreeofconsanguinity
4. Officer,socialworkerorrepresentativeof
alicensedchildcaringinstitution
5. OfficerorsocialworkerofDSWD
6. Barangay chairman of the place where
the violation occurred, where the child is
residingoremployed
7. At least 3 concerned, responsible citizens
wheretheviolationoccurred
Q: Which courts have jurisdiction over offenses

punishableunderR.A.9231?
A: The Family Courts shall have original jurisdiction

over all cases involving offenses punishable under
thisAct


LABORLAWTEAM:
56
10.EMPLOYMENTOFHOUSEHELPERS
a.Definition
Q:Whatisdomesticorhouseholdservice?
A:
1. ServicesintheErshome
2. Usuallynecessaryordesirable
3. For the maintenance and employment
thereof
4. Includes ministering to the personal
comfortandconvenienceofthemembers
oftheErshousehold
5. Includingservicesoffamilydrivers.
Q:Whoisahousehelper?
A: A househelper is synonymous to domestic
servant
1.Anyperson,maleorfemale;
2. Who renders services in and about the Ers
homeand;
3. Services are usually necessary or Desirable
for the maintenance and enjoyment
thereof,and
4. Ministers exclusively to the personal
comfortandenjoymentofErsfamily
Note:Thechildrenandrelativesofahousehelperwho
live under the Ers roof and who share the
accommodations provided for the househelper by the
Ershallnotbedeemedashousehelpersiftheyarenot
otherwise engaged as such and are not required to
perform any substantial household work. (Sec 3, Rule
XII,BookIII,IRR)
The definition of a househelper cannot be interpreted
to include househelp or laundry women working in
staffhouses of a company. (APEX Mining CO., Inc., v.
NLRC,G.R.No.94951,April22,1991)
b.Benefitsaccordedhousehelpers
Q:Whataretherightsofhousehelpers?
A:
1. Originalcontractofdomesticserviceshall
not last for more than 2 years but it may
berenewedbytheparties.(Art.142)
2. Entitled to minimum wage in addition to
lodging, food, and medical attendance.
(Art.144)
3. Employmentcontractshouldbereviewed
every 3 years with the end view of
improving the terms and conditions of
employment.(Art.143)
4. SSS benefits for those who are receiving
atleastP1,000permonth.(Art.143)
5. Nonassignment to a work in a
commercial, industrial or agricultural
enterprise at a wage or salary rate lower
thanthatprovidedforagriculturalornon
agriculturalworkers.(Art.145)
6. Ees under 18 years of age shall be given
opportunity for at least elementary
education. The cost of education shall be
part of the HHs compensation, unless
otherwisestipulated.(Art146)
7. Should be treated in a just and humane
manner.(Art.147)
8. Not to be treated with physical violence
(Art.147)
9. Suitable and sanitary living headquarters
as well as adequate food and medical
attendance.(Art.148)
10. Terminationofemploymentshouldbe
a. upon expiration of term of
employment,or
b. basedonjustcause(Art.149)
11. Indemnity for unjust termination of
service
12. Employmentcertificationastonatureand
duration of service and efficiency and
conductofhousehelper.
Q:Whatistheminimumwageforhousehelpers?
A:
1.MetoManilaP800/month
2. Other Chartered Cities or First Class
MunicipalitiesP650/month
3.InotherMunicipalitiesP550/month
Note: The minimum cash wage rates shall be paid to

the househelpers in addition to lodging, food and
medicalattendance.
Q:IsthereanOTPayforhousehelpers?
A: No. The LC is silent on the grant of OT pay, HP,
Premium Pay and SIL to those engaged in the
domesticorhouseholdservice.MoreoverArt.82of
LC expressly excludes domestic helpers from its
coverage. (Ultra Villa Food Haus v. Geniston, G.R.
No.120473,June23,1999)
Q: Erlinda worked as a cook, preparing the lunch
and merienda of the Ees of Remington Industrial
Sales Corp. She worked at the premises of the
company. When Erlinda filed an illegal dismissal
case,Mr.Tan,themanagingdirectorofRemington
Corp. claimed that Erlinda was a domestic helper,
and not a regular Ee of Remington Corp. Mr. Tan
argued that it is only when the househelper or
domestic servant is assigned to certain aspects of
the business of the Er that such househelper or
LABOR STANDARDS

57
domestic servant may be considered as such an
employee.IsErlindaadomesticorhousehelper?
A: No, Erlinda is clearly not a househelper. A
househelper or domestic servant under the
Implementing Rules of the LC is one who is
employed in the Ers home to minister exclusively
to the personal comfort and enjoyment of the Ers
family. A househelper, domestic servant or
laundrywoman in a home or in a company
staffhouse is different in the sense that in a
corporation or a single proprietorship engaged in
business or industry or any agricultural or similar
pursuit,serviceisbeingrenderedinthestaffhouses
or within the premises of the business of the Er. In
suchinstance,theyareEesofthecompanyorErin
thebusinessconcerned,entitledtotheprivilegesof
aregularEe.Themerefactthatthehousehelperor
domestic servant is working within the premises of
thebusinessoftheemployerandinrelationtoorin
connection with its business, as in its staffhouses
for its guest or even for its officers and Ees,
warrants the conclusion that such househelper or
domestic servant is and should be considered a
regular Ee and not a househelper. (Remington
Industrial v. Castaneda, G.R. Nos. 16929596,
Nov.20,2006)
Q:NBChasaresthouseandrecreationalfacilityin
thehighlandsofTagaytayCityfortheuseofitstop
executives and corporate clients. The resthouse
staff includes a caretaker, two cooks and a
laundrywoman. All of them are reported to the
SSSasdomesticorhouseholdEesoftheresthouse
and recreational facility and not of NBC. Can NBC
legally consider the caretaker, cooks and
laundrywoman as domestic Ees of the resthouse
andnotofNBC?
A: No, they are not domestic Ees. They are NBCs

Ees because the resthouse and recreational facility
arebusinessfacilitiesastheyareforuseofthetop
executives and clients of NBC. (Traders Royal Bank
v.NLRC,G.R.No.127864,Dec.22.1999).(2000Bar
Question)
c.Termination
Q: What is the proper procedure in the

terminationofahousehelper?
A: The termination of the employment of a
househelpershouldbe:
a. Upon expiration of the term of
employment,or
b. Basedonjustcause(Art.149)
d.ReliefsforUnjustTermination
Q:Whataretherulesforindemnity?
A:
1. If the period for household service is
fixed, neither the Er nor the househelper
may terminate the contract before the
expiration of the term except for just
cause.
2.Ifthehousehelperisunjustlydismissed,he
or she shall be paid the compensation
already earned plus that for the 15 days
bywayofindemnity.
3. If the househelper leaves without
justifiable reason, he or she shall forfeit
any unpaid salary due him or her not
exceeding15days.
Q: When can the HH demand for employment

certification?
A: Upon the severance of the household service

relationship, the househelper may demand from
the Er a written statement of the nature and
duration of the service and his/ her efficiency and
conductashousehelper.
11.EMPLOYMENTOFHOMEWORKERS
a.Defintion
Q:Whoarehomeworkers?
A:Theyarethosewhoperforminorabouthisown
home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an Er and sold
thereaftertothelatter.
Q:WhoistheErofHomeworker?
A:Includesanyperson,naturalorartificialwho,for
his account or benefit, or on behalf of any person
residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor
oranyotherperson:
1. Delivers or causes to be delivered, any
goods, articles or materials to be
processed or fabricated in or about a
homeandthereaftertobereturnedorto
be disposed of or distributed in
accordancewithhisdirections.
2. Sellsanygoods,articlesormaterialstobe
processedorfabricatedinorabutahome
and then rebuys them after such
processing or fabrication, either by
himselforthroughsomeotherperson.


LABORLAWTEAM:
58
b.Rightsandbenefitsaccordedhomeworkers
Q: What is the duty of the Er in case he contracts
withanothertheperformanceofhiswork?
A: It shall be the duty of the Er to provide in such
contractthattheEesorHWsofthecontractor and
the latters subcontractor shall be paid in
accordancewiththeLC.
Q:WhatistheliabiltyoftheErifthecontractoror
subcontractorfailstopaythewagesorearningsof
hisEes?
A: Er shall be jointly and severally liable with the
contractor or subcontractor to the workers of the
latter to the extent that such work is performed
under such contract, in the same manner as if the
EesorHWsweredirectlyengagedbytheEr.
Q:CanHomeworkersformlabororganizations?
A:Yes.DONo.5,replacingRuleXIVoftheIRRBook
3 of the LC, authorizes the formation and
registrationoflabororganizationofindustrialHWs.
It also makes explicit the Ers duty to pay and remit
SSS,PhilhealthandECCpremiums.
Q:Whataretheprohibitionsagainsthomework?
A:Nohomeworkshallbeperformedon:
1. Explosives,fireworksandsimilararticles;
2. Drugsandpoisons;and
3. Other articles, the processing of which
requires exposure to toxic substances.
(Sec.13,RuleXIV,BookIII,IRR)
c.Conditionsfordeductionfromhomeworkers
earnings
Q: Can the Er make deductions on homeworkers

earnings?
A: GR: No Er, contractor or subcontractor shall

make any deduction from the HWs earnings
forthevalueofmaterialswhichhavebeenlost,
destroyed,soiledorotherwisedamage.
XPN:Unlesstheff.conditionsaremet:
1. TheHWisclearlyshowntoberesponsible
forthelossordamage
2. TheEeisgivenreasonableopportunityto
showcausewhydeductionsshouldnotbe
made;
3. The amount of such deduction is fair and
reasonable and shall not exceed the
actuallossordamages;and
4. The deduction is made at such rate that
the amount deducted does not exceed
20%oftheHWsearningsinaweek.
Q:Distinguishhousehelpersfromhomeworkers.
A:
HOUSEHELPERS HOMEWORKERS
Minister to the personal
needs and comfortof his
Erinthelattershome
Performs in or about his
ownhomeanyprocessing
or fabrication of goods or
materials, in whole or in
part, which have been
furnished directly or
indirectly, by an Er and
sold thereafter to the
latter.
Q: Josie is the confidential secretary of the
Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
where the Chairman of the Board can still have
accesstoherservices,thebankallowshertowork
inherresidenceduringherleave.Forthispurpose,
the bank installed a fax machine in her residence,
and gave her a cellphone and a beeper. Is Josie a
homeworkerunderthelaw?Explain.
A:No,sheisactuallyanofficeworker.Sheisnotan
industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
which work, when finished, will be returned to or
repurchasedbysaidcontractor.(Art.155,LC)(2000
BarQuestion)
12.APPRENTICESANDLEARNERS
a.Apprentices
Q:Whoisanapprentice?
A: Any worker who is covered by a written
apprenticeship agreement with an individual
employer or any of the entities recognized under
theLC.
Q:Whatisapprenticeship?
A: It is practical training on the job supplemented
byrelatedtheoreticalinstruction.
Q:Whatisanapprenticeableoccupation?
A: That which requires more than 3 months of
practicaltrainingwiththeoreticalinstruction
Q:Whatisonthejobtraining(OJT)?
A: It is practical work experience through actual
participation in productive activities given to or
acquiredbyanapprentice.
LABOR STANDARDS

59
Q:Whatarehighlytechnicalindustries?
A: Those which are engaged in the application of
advancedtechnology.
Q:Whatarerelatedtheoreticalinstructions?
A: Technical information based on apprenticeship

standardsapprovedbytheBureau.
Note: Prior approval by TESDA (formerly DOLE) of the
proposed apprenticeship program is a condition sine
quanon.Otherwise,apprenticebecomesaregularEe.
(Nitto Enterprises v. NLRC, G.R. No. 114337, Sep. 29,
1995).
Q:Whatarethequalificationsofanapprentice?
A:
1. Atleast15yearsofage
Note:Thosebelow18yearsofageshallnot
workinhazardousoccupations
2. Physicallyfitfortheoccupation
3. Possessvocationalaptitudeandcapacity
4. Possess:
a. Theabilitytocomprehend,and
b. Followoralandwritteninstructions
5. The company must have an
apprenticeshipprogramdulyapprovedby
theDOLE.
Note: Trade and industry associations may

recommend to the SLE appropriate educational
requirementsfordifferentoccupations.
Q:Whenisanoccupationdeemedhazardous?
A:
1. Nature of work exposes worker to
dangerous environmental elemental
contaminantsorworkconditions
2. Workers are engaged in construction
work, logging, firefighting, mining,
quarrying,blasting,stevedoring,deepsea
fishing,andmechanizedfarming
3. Workers are engaged in the manufacture
or handling of explosives and other
pyrotechnicproducts
4. Workers use, or are exposed to heavy or
powerdrivenmachineryorequipment.
Q:Whomayemployapprentices?
A:
1. Only employers in highly technical
industriesand
2. Only in apprenticeable occupations
approvedbySLE
Q:Whatistheemploymentstatusofapprentices?
A: They are contractual workers whose length of
service depends on the term provided for in the
apprenticeship agreement. Thus, the employer is
not obliged to employ the apprentice after the
completionofhistraining.
Q:Whatistheperiodofapprenticeship?
A:Mustnotexceed6months:
1. 2months/400hours:Tradesoroccupations
which normally require 1 year or more for
proficiency
2. 1 month/200 hours: Occupations and jobs
whichrequiremorethan3monthsbutless
than1yearforproficiency.(Sec.19,RuleVI,
BookII,IRR)
Q: What is the status of an apprentice hired after

suchterm?
A:HeisdeemedaregularEe.Hecannotbehiredasa
probationary Ee since the apprenticeship is deemed
theprobationaryperiod.
Q:Whatisthewagerateofanapprentice?
A: Start at not less than 75% of the statutory
minimum wage for the 1
st
6 months (except OJT);
thereafter, shall be paid in full minimum wage,
includingthefullCOLA.
Note: GR: Apprenticeship programs shall be primarily
voluntary
XPN:Compulsoryapprenticeship:
1. National security or economic
developmentsodemand,thePresident
mayrequirecompulsorytraining
2. Services of foreign technicians are
utilized by private companies in
apprenticeabletrades.
Q: What are the rules regarding apprenticeship

agreements?
A: Apprenticeship agreements, including the wage
ratesofapprentices,shall:
1. ConformtotherulesissuedbySLE.
2. The period of apprenticeship shall not
exceed6months.
3. Apprenticeship agreements providing for
wage rates below the legal minimum
wage, which in no case shall start below
75% of the applicable min. wage, may be
entered into only in accordance with


LABORLAWTEAM:
60
apprenticeship programs duly approved
bytheSLE.
4. The DOLE shall develop standard model
programsofapprenticeship.(Sec.18,Rule
VI,BookII,IRR)
Q:Whosignstheapprenticeshipagreement?
A: Every apprenticeship agreement shall be signed

by:
1. Theemployerorhisagent,or
2. An authorized representative of any of
therecognizedorganizations,associations
orgroups,and
3. Theapprentice.
Q:Whowillsigniftheapprenticeisaminor?
A: An apprenticeship agreement with a minor shall

besignedinhisbehalfby:
1. His parent or guardian, or if the latter is
notavailable,
2. An authorized representative of the
DOLE.
Q: May apprentices be hired without

compensation?
A:Required:
1. Byschool
2. Bythetrainingprogramcurriculum
3. ForGraduation
4. Forboardexaminations
Q:Whataretherulesonworkingscholars?
A: There is no ErEe relationship between students
on one hand, and schools, where there is written
agreement between them under which the former
agree to work for the latter in exchange for the
privilegetostudyfreeofcharge.Thestudentisnot
consideredanEe.(Sec.14,RuleIX,BookIII,IRR)
Q: Padilla entered into a written agreement with
Gomburza College to work for the latter in
exchange for the privilege of studying in said
institution.Hisworkwasconfinedtokeepingclean
the lavatory facilities of the school. One school
day, he got into a fist fight with a classmate,
Monteverde, as a result of which the latter
sustained a fractured arm. Victor filed a civil case
for damages against him, impleading Gomburza
Collegeduetothelatter'sallegedliabilityashisEr.
Underthecircumstances,couldGomburzaCollege
beheldliablebyVictorMonteverdeasanPadillas
Er?
A: Gomburza College is not liable for the acts of
Padilla because there is no ErEe relationship
between them. As provided in the Rules and
RegulationsImplementingtheLC"thereisnoErEe
relationship between students on one hand, and
schools, colleges, or universities on the other,
wherestudentsworkwiththelatterinexchangefor
the privilege to study free of charge, provided the
students are given real opportunity, including such
facilities as may be reasonable and necessary to
finish their chosen courses under such
arrangement."(1997BarQuestion)
Q: Who may terminate an apprenticeship
agreement?
A:
1. Eitherpartymayterminateanagreement
aftertheprobationaryperiodbutonlyfor
avalidcause.
2. It may be initiated by either party upon
filing a complaint or upon DOLEs own
initiative.
Q:Whomayappealthedecisionoftheauthorized
agencyoftheDOLE?
A: It may be appealed by any aggrieved person to
theSLEwithin5daysfromreceiptofthedecision.
Note: The decision of the SLE shall be final and
executory.
Q:WhatisExhaustionofAdministrativeRemedies
(EAR)?
A: It is a condition precedent to the institution of
action.(Sec.32b,RuleVI,BookII,IRR)
Q: How is the principle of Exhaustion of
AdministrativeRemediesappliedincaseofbreach
ofapprenticeshipagreement?
A: No person shall institute any action for the
enforcement of any apprenticeship agreement or
damages for breach of any such agreement, unless
he has exhausted all available administrative
remedies.
Q: Who shall settle differences arising out of
apprenticeshipagreement?
A: The plant apprenticeship committee shall have
the initial responsibility for settling differences
arising out of apprenticeship agreement. (Sec. 32b,
RuleVI,BookII,IRR)
Q: What is the procedure for the termination of
apprenticeship?
LABOR STANDARDS

61
A:Thepartyterminatingshall:
1. Serve a written notice on the other at
least5daysbeforeactualtermination,
2. Statingthereasonforsuchdecision;and
3. A copy of said notice shall be furnished
theApprenticeshipDivisionconcerned.
b.Learners
Q:Whoarelearners?
A:
1. They are persons hired as trainees in
semiskilled and other industrial
occupations
2. Whicharenonapprenticeableand
3. Which may be learned through practical
training on the job in a relatively short
periodoftime
4. Whichshallnotexceed3months
5. Whether or not such practical training is
supplemented by theoretical instructions.
(Sec.1a,RuleVII,BookII,IRR)
Q:Whenmaylearnersbeemployed?
A:
1. Whennoexperiencedworkerisavailable
2. It is necessary to prevent curtailment of
employmentopportunities;and
3. Employment does not create unfair
competition in terms of labor costs or
impairorlowerworkingstandards.
Q:Whatisalearnershipagreement?
A: Any employer desiring to employ learners shall

enter into a learnership agreement with them,
whichagreementshallinclude:
1. Thenamesandaddressesofthelearners;
2. The duration of the learnership period,
whichshallnotexceed3months;
3. The wages or salary rates of the learners
which shall begin at not less than 75% of
theapplicableminimumwage;and
4. A commitment to employ the learners if
theysodesire,asregularemployeesupon
completionofthelearnership.
Q:Whatisthequalificationofalearner?
A:Mustbeatleast15yearsofage.
Note: Those below 18 years of age shall not work in
hazardousoccupations.
Q:Whomayemploylearners?
A: Only employers in semiskilled and other
industrial occupations which are non
apprenticeable.
Q: What is the status of learners who have been
allowed or suffered work during the first 2
months, if training is terminated by the Er before
the end of the stipulated period through no fault
ofthelearner?
A: They are deemed regular employees. (Sec. 4,
RuleVII,BookII,IRR)
c.DistinctionsbetweenLearnershipand
Apprenticeship
Q:DistinguishLearnershipfromApprenticeship.
A:
Learnership Apprenticeship
Nature
Trainingonthejobinsemi
skilledandotherindustrial
occupationortradeswhich
arenonapprenticeable
andwhichmaybelearned
thrupracticaltrainingon
thejobinarelativelyshort
periodoftime.
Trainingintradeswhich
areapprenticeable,that
is,practicaltrainingon
thejobsupplemented
byrelatedtheoretical
instructionformore
than3months.
Durationoftraining
Max:3months
Min:3months
Max:6months
Commitmenttoemploy
Withcommitmentto
employthelearnerasa
regularEeifhedesires
uponcompletionof
learnership
Nocommitmenttohire
Incaseofpreterminationofcontract
ConsideredaregularEeif
preterminationoccurs
after2monthsoftraining
andthedismissalis
withoutfaultofthe
learner.
Workernotconsidered
asregularemployee.
Coverage
Semiskilled/Industrial
occupations
Highlytechnical
industriesandonlyin
industrialoccupation
Thereisalistoflearnable
tradesbyTESDA
Nolist
Writtenagreement
RequireLearnership
Agreement
RequiresApprenticeship
Agreement


LABORLAWTEAM:
62
13.HANDICAPPEDWORKERS(RA9277)
13.
a.Definition
Q:Whoarehandicappedworkers(HW)?
A:Thosewhoseearningcapacityisimpairedby:
1. Physicaldeficiency
2. Age
3. Injury
4. Disease
5. Mentaldeficiency
6. Illness
Q:Whatisthedurationoftheemploymentperiod
ofhandicappedworkers?
A: There is no minimum or maximum duration. It

depends on the agreement but it is necessary that
thereisaspecificdurationstated.
Q: May handicapped workers be hired as
apprenticesorlearners?
A:Yes,iftheirhandicapisnotsuchastoeffectively
impede the performance of job operations in the
particular occupations for which they are hired.
(Art.81)
Q: Can a handicapped workers acquire the status
ofaregularEe?
A: Yes, if work is usually or necessarily or desirable
to the business. (Bernardo v. NLRC, G.R No.
122917,July12,1999)
Q:Whomayemployhandicappedworkers?
A: Employers in all industries. Provided, the
handicap is not such as to effectively impede the
performance of job operations in the particular
occupationsforwhichtheyarehired
Q:Whencanhandicappedworkersbeemployed?
A:
1. When their employment is necessary to
prevent curtailment of employment
opportunitiesand
2. Whenitwillnotcreateunfaircompetition
inlaborcostsorlowerworkingstandards.
(Art.79)
Q:Doesthemerefactthataworkerhasadisability,
makehimahandicappedworker?
A: No, because his disability may not impair his
efficiency or the quality of his work. If despite his
disability he can still efficiently perform his work, he
cannot be classified as handicapped; he would be
consideredaqualifieddisabledworkerentitledtothe
sametreatmentasqualifiedablebodiedworkers.
b.Rightsofdisabledworkers
Q: What are the rights and privileges of disabled
workers?
A:
1. Equalopportunityforemployment
2. Sheltered employment (the govt shall
endeavourtoprovidethemworkifsuitable
employment for disabled persons cannot
befoundthroughopenemployment)
3. Apprenticeship
4. Vocationalrehabilitation(meanstodevelop
theskillsandpotentialsofdisabledworkers
and enable them to compete in the labor
market)
5. Vocationalguidanceandcounselling
c.Prohibitionsondiscriminationagainstdisabled
persons
Q: What is the prohibition on discrimination
againstdisabledworkers?
A: No disable person shall be denied access to
opportunities for suitable employment. A qualified
disabled employee shall be subject to the same
termsandconditionsofemploymentandthesame
compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied
person.
Five percent (5%) of all casual emergency and
contractual positions in the Departments of Social
Welfare and Development; Health; Education,
Culture and Sports; and other government
agencies, offices or corporations engaged in social
development shall be reserved for disabled
persons.
d.Incentivesforemployers
Q: What are the incentives provided for employers
inemployingdisabledworkers?
A:1.Entitledtoanadditionaldeduction,fromtheir
gross income, equivalent to twentyfive percent
(25%) of the total amount paid as salaries and
wagestodisabledpersons:Provided,however,That
such entities present proof as certified by the
Department of Labor and Employment that
disabledpersonsareundertheiremploy:Provided,
further, That the disabled employee is accredited
withtheDepartmentofLaborandEmploymentand
LABOR STANDARDS

63
the Department of Health as to his disability, skills
andqualifications
2. Private entities that improve or modify their
physical facilities in order to provide reasonable
accommodation for disabled persons shall also be
entitled to an additional deduction from their net
taxableincome,equivalenttofiftypercent(50%)of
the direct costs of the improvements or
modifications
Q:Distinguishhandicappedfromdisabled?
A:
Handicapped
Disabled
(DifferentlyAbled)
Earningcapacityis
impairedbyage,or
physicalormental
deficiencyorinjury.
Referstoallsufferingfrom
restrictionofdifferentabilities
asaresultofmental,physical
orsensoryimpairmentto
performanactivityinthe
mannerorwithinrange
considerednormalfora
humanbeing.
Coversonlyworkers.
Coversallactivitiesor
endeavors.
Basis:loss/impairment
ofearningcapacity.
Basis:rangeofactivitywhich
isnormalforahuman
being.
Lossduetoinjuryor
physicalormental
defectorage.
Restrictionduetoimpairment
ofmental/physical/sensory
defect.
Ifhired,entitledto75%
ofminimumwage.
Subjecttodefinite
periodsof
employment.
Ifqualified,entitledtoall
termsandconditionsas
qualifiedablebodiedperson.
Employableonlywhen
necessarytoprevent
curtailmentof
employment
opportunity.
Norestrictionson
employment.
Mustgetequalopportunity
andnounfaircompetition.

LABORLAWTEAM:
64
D.TERMINATIONOFEMPLOYMENT
1.EMPLOYEREMPLOYEERELATIONSHIP
Q: What determines the existence of an

employmentrelationship?
A: It is determined by law and not by contract.
Whether or not an ErEe relationship exists
between the parties is a question of fact. In this
regard, the findings of the NLRC are accorded not
onlyrespectbutfinalityifsupportedbyevidence.
Note: Taxi or jeepney drivers under the boundary
system are Ees of the taxi or jeepney
owners/operators; so also the passenger bus drivers
and conductors. (Jardin vs. NLRC and Goodman Taxi,
G.R.No.119268,Feb.23,2000)
Q: The employment contract stipulates that there
is no ErEe relationship between the parties. Is
thatvalid?
A: No. The existence of an ErEe relation is a
question of law and being such, it cannot be made
the subject of agreement. (Tabas v. California
ManufacturingCo.,G.R.No.L80680,Jan.26,1989)
Q: Banco de Manila and the Ang Husay Janitorial
and Pest Control Agency entered into an
IndependentContractorAgreementwiththeusual
stipulations: specifically, the absence of ErEe
relationship, and the relief from liability clauses.
Can the bank, as a client, and the agency, as an
independent contractor, stipulate that no ErEe
relationship exists between the bank and the Ees
oftheAgencywhomaybeassignedtoworkinthe
Bank?Reason.
A: Yes, they can stipulate provided the relationship
is job contracting. However the stipulation cannot
prevailoverthefactsandthelaws.Theexistenceof
ErEe relationship is determined by facts and law
and not by stipulation of the parties. (Insular Life
AssuranceCo..Ltd.v.NLRC,G.R.No.119930,March
12,1998)
Q:ASIAexecuteda1yearcontractwiththeBaron
Hotel(BARON)fortheformertoprovidethelatter
with 20 security guards to safeguard the persons
andbelongingsofhotelguests,amongothers.The
security guards filled up Baron application form
and submitted the executed forms directly to the
SecurityDepartmentofBaron.Thepayslipsofthe
security guards bore BARON's logo and showed
that Baron deducted therefrom the amounts for
SSS premiums, medicare contributions and
withholdingtaxes.Assignmentsofsecurityguards,
who should be on duty or on call, promotions,
suspensions, dismissals and award citations for
meritorious services were all done upon approval
by BARON's chief security officer. After the
expiration of the contract with ASIA, BARON did
notrenewthesameandinsteadexecutedanother
contractforsecurityserviceswithanotheragency.
ASIA placed the affected security guards on
"floating status" on "no work no pay" basis.
Having been displaced from work, the ASIA
securityguardsfiledacaseagainsttheBARONfor
illegal dismissal, overtime pay, minimum wage
differentials, vacation leave and sick leave
benefits, and 13th month pay. BARON denied
liability alleging that ASIA is the employer of the
security guards and therefore, their complaint for
illegal dismissal and payment of money claims
should be directed against ASIA. Nevertheless,
BARONfiledaThirdPartyComplaintagainstASIA.
IsthereanErEerelationshipbetweentheBARON,
ononehand,andtheASIAsecurityguards,onthe
otherhand?Explainbriefly.
A:Asageneralrule,thesecurityguardsofaprivate
security guard agency are the employees of the
latterandnotoftheestablishmentthathasentered
into a contract with the private security guard
agency for security services. But under the facts in
thequestion,BaronHotelappeartohavehiredthe
security guards, to have paid their wages, to have
the power to promote, suspend or dismiss the
security guards and the power of control over
them, namely, the security guards were under
orders of Baron Hotel as regard their employment.
Because of the abovementioned circumstances,
BaronHotelistheErofthesecurityguards.
Q: Assuming that ASIA is the Er, is the act of ASIA

in placing the security guards on "floating status"
lawful?Why?
A: Itislawfulforaprivatesecurityguardagencyto
place its security guard on a "floating status" if it
has no assignment to give to said security guards.
But if the security guards are placed on a "floating
status"formorethan6months,thesecurityguards
mayconsiderthemselvesashavingbeendismissed.
(1999BarQuestion)
Q:Lacsonwasoneofmorethan100Eeswhowere
terminated from employment due to the closure
ofLBMConstructionCorporation.LBMwasasister
company of Lastimoso Construction, Inc. and RL
Realty & Devt Corp. All 3 entities formed what
came to be known as the Lastimoso Group of
Companies. The 3 corporations were owned and
controlled by members of the Lastimoso family;
their incorporators and directors all belonged to
TERMINATION OF EMPLOYMENT

65
the Lastimoso family. The 3 corporations were
engaged in the same line of business, under one
management, and used the same equipment
including manpower services. Lacson and his co
Ees filed a complaint with the Labor Arbiter
againstLBM,RLRealtyandLastimosoConstruction
to hold them jointly and severally liable for
backwages and separation pay. Lastimoso
Construction, Inc. RL Realty & Development
Corporation interposed a Motion to Dismiss
contending that they are juridical entitles with
distinct and separate personalities from LBM
Construction Corporation and therefore, they
cannot be held jointly and severally liable for the
money claims of workers who are not their Ees.
Rule on the motion to dismiss. Should it be
grantedordenied?Why?
A: It is very clear that even if LBM Construction

company, Lastimoso Construction Company, Inc.
and RL Realty & Devt Corp. all belong to the
Lastimoso family and are engaged in the same line
of business under one management and used the
same equipment including manpower services,
these corporations were separate juridical entities.
Thus, only the LBM Construction Corp. is the Er of
Teofilo Lacson. The other corporation do not have
any ErEe relations with Lacson. The case in
question does not include any fact that would
justify piercing the veil of corporate fiction of the
other corporations in order to protect the rights of
workers. In a case (Concept Builders, Inc. v. NLRC,
G.R.No.108734,May29,1996)theSCruledthatit
isafundamentalprincipleofcorporationlawthata
corporation is an entity separate and distinct from
its stockholders and from other corporations to
which it may be connected. But this separate and
distinct personality of a corporation is merely a
fiction created by law for convenience and to
promote justice. So, when the notion of separate
juridical personality is used to defeat public
convenience,justifywrong,protectfraudordefend
crime, or is used as a device to defeat the labor
laws, this separate personality of the corporation
maybe disregarded or the veil of corporate fiction
pierced.(1999BarQuestion)
a.Fourfoldtest
Q: What factors determine the existence of an Er

Eerelationship?
A:Thefourfoldtest:
1. Selection and engagement of the
employee;
2. Paymentofwages;
3. Powerofdismissal;and
4. Power of control. (The Labor Code with
Comments and Cases 2007, Azucena, Vol
I,p.158)
Q:Whatiscontroltest?
A:Thepersonforwhomtheservicesareperformed
reserves a right to control not only the end to be
achievedbutalsothemeanstobeusedinreaching
suchend.
Note:However,incertaincasesthecontroltestisnot
sufficienttogiveacompletepictureoftherelationship
betweentheparties,owingtothecomplexityofsucha
relationshipwhereseveralpositionshavebeenheldby
the worker. The better approach is to adopt the two
tiered test. (Francisco vs. NLRC, G.R. No. 170087, Aug.
31,2006)
Q: Genesis entered into a Careers Agent
Agreement with EmoLife Insurance Company, a
domestic corporation engaged in insurance
business. In the Agreement, it provides that the
agent is an independent contractor and nothing
therein shall be construed or interpreted as
creating an employer employee relationship. It
further provides that the agent must comply with
three requirements: (1) compliance with the
regulations and requirements of the company; (2)
maintenance of a level of knowledge of the
company's products that is satisfactory to the
company;and(3)compliancewithaquotaofnew
businesses. However, EmoLife insurance company
terminated Genesis services. Genesis filed an
illegal dismissal complaint alleging therein that an
employeremployeerelationshipexistsandthathe
was illegally dismissed. Is he an employee of the
insurancecompany?
A:GenesisisnotanemployeeofEmoLifeInsurance
Company. Generally, the determinative element is
the control exercised over the one rendereing the
service.TheconceptofcontrolinLaborCodehas
to be compared and distinguished with control
that must necessarily exist in a principalagent
relationship. The employer controls the employee
bothintheresultsandinthemeansandmannerof
achieving this result. The principal in an agency
relationship, e.g. insurance agent, on the other
hand, also has the prerogative to exercise control
over the agent in undertaking the assigned task
based on the parameters outlined in the pertinent
laws. In the present case, the Agreement fully
servesasgrantofauthoritytoGenesisasEmoLifes
insurance agent. This agreement is supplemented
bythecompanysagencypracticesandusages,duly
accepted by the agent in carrying out the agency.
Foremost among these are the directives that the
principal may impose on the agent to achieve the


LABORLAWTEAM:
66
assigned tasks, to the extent that they do not
involve the means and manner of undertaking
thesetasks.Thelawlikewiseobligatestheagentto
render an account; in this sense, the principal may
imposeontheagentspecificinstructionsonhowan
accountshallbemade,particularlyonthematterof
expenses and reimbursements. To these extents,
control can be imposed through rules and
regulations without intruding into the labor law
concept of control for purposes of employment.
(Gregorio Tongko v. ManuLife Insurance Company,
G.R.No.167622,Jun.29,2010)
b.TwotieredTest
Q:Whatisthetwotieredtest?
A:
1. The putative Ers power to control the Ee
with respect to the means and methods
bywhichtheworkistobeaccomplished;
and
2. The underlying economic realities of the
activityorrelationship.
Note: This twotiered test would provide us with a

framework of analysis, which would take into
consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties. This is especially appropriate in
this case where there is no written agreement or
termsofreferencetobasetherelationshiponanddue
to the complexity of the relationship based on the
various positions and responsibilities given to the
worker over the period of the latters employment.
(Franciscovs.NLRC,G.R.No.170087,Aug.31,2006)
Q: What is the proper standard for economic

dependence?
A: The proper standard is whether the worker is
dependent on the alleged employer for his
continuedemploymentinthatlineofbusiness
c.Probationaryemployment
Q:Whatisprobationaryemployment?
A: Employmentwhere the employee (Ee), uponhis
engagement:
1. Ismadetoundergoatrialperiod
2. DuringwhichtheErdetermineshisfitness
toqualifyforregularemployment,
3. Based on reasonable standards made
known to the Ee at the time of
engagement.(Sec6,RuleI,BookVI,IRR)
Note:TheservicesofanEewhohasbeenengaged
on probationary basis may be terminated only for
justcause,whenhefailstoqualifyasaregularEein
accordance with reasonable standards prescribed
bytheEr.
Q: Michelle Miclat was employed on a
probationary basis as marketing assistant by
ClarionPrintingHousebutduringheremployment
shewasnotinformedofthestandardsthatwould
qualify her as a regular employee (Ee). 30 days
after, Clarion informed Miclat that her
employment contract had been terminated
without any reason. Miclat was informed thather
termination was part of Clarions costcutting
measures.IsMiclatconsideredasaregularEeand
henceentitledtoitsbenefits?
A:Yes.Probationaryemploymentshallbegoverned
by the following rules: (d) In all cases of
probationaryemployment,theErshallmakeknown
totheEethestandardsunderwhichhewillqualify
as a regular Ee at the time of his
engagement.Wherenostandardsaremadeknown
totheEeatthattime,heshallbedeemedaregular
Ee. In the case at bar, she was deemed to have
been hired from day one as a regular Ee. (Clarion
PrintingHouseInc.,vs.NLRC,G.R.No.148372,June
27,2005)
Q: What are the characteristics of probationary

employment?
A:
1. Itisanemploymentforatrialperiod;
2. Itisatemporaryemploymentstatusprior
toregularemployment;
3. It arises through a contract with the
followingelements:
a. The employee (Ee) must learn and
workataparticulartypeofwork
b. Such work calls for certain
qualifications
c. Theprobationisfixed
d. The Er reserves the power to
terminateduringorattheendofthe
trialperiod
e. And if the Ee has learned the job to
the satisfaction of the Er, he
becomesaregularEe.
Q: What is the period of probationary

employment?
A:GR:Itshallnotexceed6months.
XPNs:
1. Covered by an apprenticeship or
learnership agreement stipulating a
differentperiod

67
2. Voluntary agreement of parties
(especially when the nature of work
requiresalongerperiod)
3. The Er gives the(Ee a second chance to
pass the standards set. (Mariwasa
Manufacturing, Inc. v. Leogardo, Jr.,G.R.
No.74246,Jan.26,1989)
4. When the same is required by the nature
of the work, e.g. the probationary period
set for professors, instructors and
teachers is 3 consecutive years of
satisfactory service pursuant to DOLE
ManualofRegulationsforPrivateSchools.
5. When the same is established by
companypolicy.
Note:Periodofprobationshallbereckonedfromthe
datetheEeactuallystartedworking.(Sec.6[b],RuleI,
BookVI,IRR)
Afterthelapseoftheprobationaryperiod(6months),
Eebecomesregular.
Probationary Ees may be dismissed before end of the

probationaryperiod.
Q: May the Er and Ee validly agree to extend the

probationaryperiodbeyond6months?
A: Yes. Such an extension may be lawfully agreed

upon,despitetherestrictivelanguageofArt.281.A
voluntary agreement extending the original
probationaryperiodtogivetheEeasecondchance
topasstheprobationstandardsconstitutesalawful
exception to the statutory limit. (Mariwasa
Manufacturing,Inc.v.Leogardo,Jr.,G.R.No.74246,
Jan.26,1989)
Note:Byvoluntarilyagreeingtosuchanextension,the
Ee waived any benefit attaching to the completion of
the period if he still failed to make the grade during
the period of extension. (Mariwasa Mfg. Inc. v. Hon.
Leogardo,G.R.No.74246,Jan.26,1989)
Q:Isdoubleorsuccessiveprobationallowed?
A: No. The evil sought to be prevented is to
discourage scheming employers from using the
system of double or successive probation to
circumvent the mandate of the law on
regularization and make it easier for them to
dismiss their employees. (Holiday Inn Manila v.
NLRC,G.R.No.109114,Sep.14,2003)
Q: Middleby Phils. Corp. hired Alcira as engg
support services supervisor on a probationary
basis for 6 months. Apparently unhappy with
Alciras performance, Middleby terminated his
services. Alcira contends that he was already a
regular employee (Ee) when he was terminated.
AccordingtoAlcirascomputation,sinceArt.13of
the Civil Code provides that 1 month is composed
of 30 days, 6 months totaling 180 days, then his
180
th
day would fall on Nov. 16, 96 making him a
regular Ee before his termination. Is the
contentionofthepetitionerinthecomputationof
6monthscorrect?
A: No, the computation of the 6month

probationary period is reckoned from the date of
appointment up to the same calendar date of the
6
th
month following. In short, since the number of
daysineachparticularmonthwasirrelevant,Alcira
was still a probationary Ee when Middleby opted
not to regularize him on Nov. 20, 1996. (Alcira v.
NLRC,G.R.No.149859,June9,2004)
Note: In Mitsubishi Motors v. Chrysler Phils. Labor

Union,G.R.No.148738,June29,2004,theSCruledin
thiswise:
Applying Art. 13 of the Civil Code, the probationary

periodof6monthsconsistsofthe180days.Thisisin
conformity with par.1, Art. 13 of the Civil Code. The
number of months in the probationary period, 6,
should then be multiplied by the number of days
withinamonth,30;hence,theperiodof180days.As
clearly provided for the in last par. of Art. 13, in
computingaperiod,thefirstdayshallbeexcludedand
thelastdayincluded.Thus,the180dayscommenced
on May 27, 1996, and ended on Nov. 23, 1996. The
termination letter dated Nov. 25, 1996 was served on
ParasonlyonNov.26,1996.Hewas,bythenalreadya
regularEeofthecompanyunderArt.281oftheLC.
How to resolve the conflict between the Alcira and

MitsubishiMotorscase
1. Statutory Construction The latter case

prevails(MitsubishiMotors);or
2. Rule more favorable to the Ee use the
computation which would amount to
grantingthesubjectEeregularemployment
status (based on Constitutional and
statutory provisions for the liberal
interpretationoflaborlaws)
Q:Whatisthepurposeoftheperiod?
A: To afford the employer an opportunity to
observe the fitness of a probationary employee at
work.
Q: In what instances is a probationary employee
(Ee)deemedaregularEe?
A:
1. If he is allowed to work after a
probationaryperiod.(Art.281)


LABORLAWTEAM:
68
2. If no standards, under which he will
qualify as a regular Ee, are made known
to him at the time of his engagement.
(Sec.6[d],RuleI,BookVI,IRR)
Q: What are the grounds for terminating

probationaryemployment?
A:
1. Just/authorizedcauses
2. WhenhefailstoqualifyasaregularEein
accordance with reasonable standards
made known by the employer (Er) to the
Eeatthetimeofhisengagement(ICMCv.
NLRC,G.R.No.72222,Jan.30,1989)
Note:WhileprobationaryEesdonotenjoypermanent
status, they are afforded the security of tenure
protection of the Constitution. Consequently, they
cannot be removed from their positions unless for
cause. Such constitutional protection, however, ends
upon the expiration of the period stated in their
probationarycontractofemployment.Thereafter,the
parties are free to renew the contract or not. (CSA v.
NLRC,G.R.No.87333,Sep.6,1991)
Q: What are the limitations on the employers

(Ers) power to terminate a probationary
employmentcontract?
A:
1. The power must be exercised in
accordance with the specific reqts of the
contract
2. If a particular time is prescribed, the
terminationmustbewithinsuchtimeand
if formal notice is required, then that
formmustbeused
3. The Ers dissatisfaction must be real and
in good faith, not feigned so as to
circumventthecontractorthelaw
4. Theremustbenounlawfuldiscrimination
inthedismissal
Note: The probationary employee is entitled to

proceduraldueprocesspriortodismissalfromservice.
Q: R.L. Cruz was employed as gardener by Manila

Hotel on probation status effective Sep. 22, 76.
The appointment signed by Cruz provided for a 6
monthprobationaryperiod.OnMar.20,77,ora
day before the expiration of the probationary
period, Cruzs was promoted to lead gardener
position. On the same day Cruz position was
abolished by Manila Hotel allegedly due to
economic reverses or business recession, and to
salvage the enterprise from imminent danger of
collapse.WasCruzillegallydismissed?
A: Yes, there is no dispute that as a probationary

employee (Ee), Cruz had but limited tenure.
Although on probationary basis, however, Cruz still
enjoys the constitutional protection on security of
tenure.Duringhistenureofemployment,therefore,
or before his contract expires, Cruz cannot be
removedexceptforcauseasprovidedforbylaw.
WhatmakesCruzdismissalhighlysuspiciousisthat
it took place at a time when he needs only but a
day to be eligible as a regular Ee. That he is
competentfindssupportinhisbeingpromotedtoa
lead gardener in so short span of less than 6
months. By terminating his employment or
abolishing his position with but only one day
remaining in his probationary appointment, the
hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
Hotel Corp. v. NLRC, G.R. No. L53453, Jan. 22,
1986)
Q:ColegioSanAgustin(CSA)hiredtheGelaJoseas
a grade school classroom teacher on a
probationary basis for SY 84 85. Her contract
wasrenewedforSYs8586and8687.OnMar.
24, 87, the CSA wrote the Gela that "it would be
in the best interest of the students and their
families that she seek employment in another
school or business concern for next school year".
Notwithstandingthesaidnotice,theCSAstillpaid
Gela her salary for April 15 to May 15, 1987. On
April 6, 87, Gela wrote the CSA and sought
reconsideration but she received no reply.
Thereafter, she filed a complaint for illegal
dismissal.WasGelaillegallydismissed?
A: No. The Faculty Manual of CSA underscores the

completion of 3 years of continuous service at CSA
before a probationary teacher acquires tenure.
Hence, the Gela cannot claim any vested right to a
permanent appointment since she had not yet
achieved the prerequisite 3year period under the
Manual of Regulation for Private Schools and the
FacultyManualofCSA.
In the instant case where the CSA did not wish to
renew the contract of employment for the next
schoolyear,theGelahasnogroundtoprotest.She
was not illegally dismissed. Her contract merely
expired.(CSAv.NLRC,G.RNo.87333,Sep.6,1991)
Q: During their probationary employment, 8 Ees
were berated and insulted by their supervisor. In
protest,theywalkedout.Thesupervisor shouted
at them to go home and never to report back to
work. Later, the personnel manager required
themtoexplainwhytheyshouldnotbedismissed
from employment for abandonment and failure
toqualify for the positionsapplied for.They filed

69
a complaint for illegal dismissal against their Er.
AsaLA,howwillyouresolvethecase?
A: As a LA I will resolve the case in favor of the 8
probationary Ees due to theff::
1. Probationary Ees also enjoy security of
tenure. (Biboso v. Victoria Milling, G.R.
No. L44360,Mar.31,1977)
2. InallcasesinvolvingEesonprobationary
status, the Er shall make known to the
Ee at the time he is hired,the standards
by which he will qualify for the
positionsappliedfor.
3. The filing of the complaint for illegal
dismissal effectively negates the Ers
theory of abandonment. (Rizada v.
NLRC,G.R. No.96982,Sep.21,1999)
4. The order to go home and not to return
to work constitutes dismissal from
employment.
5. The 8 probationary Ees were terminated
without just cause and without due
process
In view of the foregoing, I will order

reinstatement to their former positions without
loss of seniority rights with full backwages, plus
damagesandattysfees.(2006BarQuestion)
d.Kindsofemployment
(1)Regularemployment
Q:Whatisregularemployment?
A:
1. An employment shall be deemed to be
regularwheretheEehasbeenengagedto
perform activities which are usually
necessary or desirable in the usual
businessortradeoftheEr,theprovisions
of written agreements to the contrary
notwithstanding and regardless of the
oralagreementsoftheparties.(Sec.5[a],
RuleI,BookVI,IRR)
2. Any Ee who has rendered at least one

year of service, whether such service is
continuousorbroken,shallbeconsidered
aregularEewithrespecttotheactivityin
which he is employed and his
employment shall continue while such
activity exists. (Sec. 5 [b], Rule I, Book VI,
IRR)
Note:Regularizationisnotamanagementprerogative;
rather,itisthenatureofemploymentthatdetermines
it.Itisamandateofthelaw.(PALv.Pascua,G.R.No.
143258,Aug.15,2003)
Regular employment does not mean permanent
employment. A probationary Ee becomes a regular Ee
after 6 months. A regular Ee may only be terminated
forjust/authorizedcauses.
The practice of entering into employment contracts

which would prevent the workers from becoming
regular should be struck down as contrary to public
policy and morals. (Universal Robina Corp. v.
Catapang,G.R.No.164736,Oct.14,2005)
(a)Reasonableconnectionrule
Q: What is the test to determine regular

employment?
A:
1. The primary standard of determining
regular employment is the reasonable
connection between the particular
activity performed by the employee (Ee)
to the usual trade or business of the
employer. The test is whether the former
is usually necessary or desirable in the
usualbusinessortradeoftheEr.(DeLeon
v.NLRC,G.R.No.70705,Aug.21,1989)
Note:Theconnectioncanbedeterminedby
considering the nature of the work
performedanditsrelationtotheschemeof
the particular business or trade in its
entirety. (Highway Copra Traders v. NLRC,
G.R.No.108889,July30,1998)
2. Also,theperformanceofajobforatleast
a year is sufficient evidence of the jobs
necessity if not indispensability to the
business. This is the rule even if its
performance is not continuous and
merely intermittent. The employment is
considered regular, but only with respect
to such activity and while such activity
exists. (Universal Robina Corp. v.
Catapang, G.R. No. 164736, Oct. 14,
2005).
Note: The status of regular employment attaches to

the casual Eeonthedayimmediately aftertheend of
his first year of service. The law does not provide the
qualification that the Ee must first be issued a regular
appointmentormustfirstbeformallydeclaredassuch
before he can acquire a regular status. (Aurora Land
ProjectsCorp.v.NLRC,G.R.No.114733,Jan.2,1997)
Q:Isthemodeofcompensationdeterminativeof
regularemployment?
A:No,whiletheEesmodeofcompensationwason
a per piece basis the status and nature of their
employment was that of regular Ees. (Labor


LABORLAWTEAM:
70
CongressofthePhilsv.NLRC,G.R.No.123938,May
21,1998)
Q:WhendoesArt.280notapply?
A:ItdoesnotapplyincaseofOFWs.
Note: Seafarers cannot be considered as regular Ees.

Their employment is governed by the contracts they
sign everytime they are hired and their employment
terminated when the contract expires. Their
employment is fixed for a certain period of time.
(Ravago v. Esso Eastern Maritime Ltd., G.R. No.
158324,Mar.14,2005)
Q: Moises was employed by La Tondea at the

maintenance section of its Engg Dept paid on a
dailybasisthroughpettycashvouchers.Hiswork
consistedmainlyofpaintingcompanybuildingand
equipment and other odd jobs relating to
maintenance. After a service of more than 1 year,
Moises requested that he be included in the
payroll of regular workers, instead of being paid
throughpettycashvouchers.InsteadLaTondeas
dismissed Moises and claimed that Moises was
contracted on a casual basis specifically to paint
certaincompanybuildingsandthatitscompletion
terminated Moises employment. Can Moises be
consideredasaregularEe?
A: Yes, the law demands that the nature and

entirety of the activities performed by the Ee be
considered. Here, the painting and maintenance
work given Moises manifests a treatment
consistent with a maintenance man and not just a
painter, for if his job was only to paint a building
there would be no basis for giving him other work
assignmentsinbetweenpaintingactivities.
It is not tenable to argue that the painting and

maintenance work of Moises are not necessary in
La Tondeas business of manufacturing liquors;
otherwise, there would be no need for the regular
maintenance section of the companys engg dept.
(DeLeonv.NLRC,G.R.No.70705,Aug.21,1989)
Q: Honorio Dagui was hired by Doa Aurora

Suntay Tanjangco in 1953 to take charge of the
maintenance and repair of the Tanjangco
apartments and residential bldgs. He was to
perform carpentry, plumbing, electrical and
masonry work. Upon the death of Doa Aurora
Tanjangco in 82 her daughter, Teresita Tanjangco
Quazon, took over the administration of all the
Tanjangco properties, and dismissed Dagui. Is
HonorioDaguiaregularemployee(Ee)?
A: Yes. The jobs assigned to Dagui as maintenance

man, carpenter, plumber, electrician and mason
were directly related to the business of the
Tanjangcos as lessors of residential and apartment
bldgs. Moreover, such a continuing need for his
services by the Tanjangcos is sufficient evidence of
the necessity and indispensability of his services to
theirbusinessortrade.
DaguishouldlikewisebeconsideredaregularEeby
the mere fact that he rendered service for the
Tanjangcos for more than one year, that is,
beginning 53 until 82, under Doa Aurora; and
then from 1982 up to June 8, 91 under the
daughter,foratotalof29and9yearsrespectively.
Owing to Dagui's length of service, he became a
regular Ee, by operation of law, one year after he
was employed in 53 and subsequently in 82.
(Aurora Land Projects Corp. v. NLRC, G.R. No.
114733,Jan.2,1997)
Q: A total of 43 Ees who are deafmutes were

hired and rehired on various periods by Far East
BankandTrustCo.asmoneysortersandcounters
through a uniformly worded agreement called
EmploymentContractforHandicappedWorkers.
The company disclaimed that these Ees were
regular Ees and maintained among others that
theyareaspecialclassofworkers,whowerehired
temporarily under a special employment
arrangement which was a result of overtures
made by some civic and political personalities to
theBank.ShouldthedeafmuteEesbeconsidered
asregularEes?
A: Yes. The renewal of the contracts of the
handicappedworkersandthehiringofothersleads
to the conclusion that their tasks were beneficial
andnecessarytothebank.Italsoshowsthatthey
were qualified to perform the responsibilities of
their positions; their disability did not render them
unqualifiedorunfitforthetasksassignedtothem.
The Magna Carta for Disabled Persons mandates

that a qualified disabled Ee should be given the
same terms and conditions of employment as a
qualified ablebodied person. The fact that the Ees
were qualified disabled persons necessarily
removestheemploymentcontractsfromtheambit
ofArt.80.SincetheMagnaCartaaccordsthemthe
rights of qualified ablebodied persons, they are
thus covered by Art. 280 of the LC. (Bernardo v.
NLRC,G.R.No.122917,July12,1999)
Q: CocaCola Bottlers Phils, Inc., (CCBPI) engaged

the services of the workers as sales route
helpersforaperiodof5months.After5months,
the workers were employed by the companyon a
daytoday basis. According to the company, the
workerswerehiredtosubstituteforregularroute
helpers whenever the latter would be unavailable

71
or when there would be an unexpected shortage
of manpower in any of its work places or an
unusually high volume of work. The practice was
fortheworkerstowaiteverymorningoutsidethe
gates of the sales office of the company, if thus
hired,theworkerswouldthenbepaidtheirwages
at the end of the day. Should the workers be
consideredasregularemployees(Ees)ofCCBPI?
A:Yes,therepeatedrehiringoftheworkersandthe
continuing need for their services clearly attest to
the necessity or desirability of their services in the
regular conduct of the business or trade of the
company.Thefactthattheworkershaveagreedto
be employed on such basis and to forego the
protection given to them on their security of
tenure,demonstratenothingmorethantheserious
problem of impoverishment of so many of our
peopleandtheresultingunevennessbetweenlabor
and capital. (Magsalin & CocaCola v. N.O.W.M.,
G.R.No.148492,May9,2003)
Q: Metromedia Times Corp. entered, for the fifth

time, into an agreement with Efren Paguio,
appointing him to be an account executive of the
firm. He was to solicit advertisements for The
Manila Times,. The written contract betweenthe
parties provided that, You are not an Ee of the
Metromedia Times Corp. nor does the company
have any obligations towards anyone you may
employ, nor any responsibility for your operating
expenses or for any liability you may incur. The
only rights and obligations between us are those
setforthinthisagreement.Thisagreementcannot
be amended or modified in any way except with
the duly authorized consent in writing of both
parties. Is Efren Paguio a regular employee of
MetromediaTimesCorporation?
A: Yes, he performed activities which were

necessary and desirable to the business of the Er,
and that the same went on for more than a year.
He was an account executive in soliciting
advertisements,clearlynecessaryanddesirable,for
the survival and continued operation of the
businessofthecorp.
The corporation cannot seek refuge under the

terms of the agreement it has entered into with
Efren Paguio. The law, in defining their contractual
relationship, does so, not necessarily or exclusively
uponthetermsoftheirwrittenororalcontract,but
alsoonthebasisofthenatureoftheworkofEfren
has been called upon to perform. A stipulation in
an agreement can be ignored as and when it is
utilized to deprive the Ee of his security of tenure.
(Paguiov.NLRC,G.R.No.147816,May9,2003)

(2)ProjectEmployment
Q:Whatisprojectemployment?
A: Employment that has been fixed for a specific

project or undertaking the completion for which
hasbeendeterminedatthetimeofengagementof
the employee (Ee). (Sec.5 [a], Rule I, Book VI, IRR).
The period is not the determining factor, so that
even if the period is more than 1 year, the Eedoes
notnecessarilybecomeregular.
Note: 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
projectEesandconsideredasregularEes.
Repeated hiring on a projecttoproject basis is
considered necessary and desirable to the business of
theEr.TheEeisregular(Maraguinotv.NLRC,G.R.No.
120969,Jan.22,1998).However,repeatedhiringdoes
not necessarily mean regular employment. (Filipinas
PreFabricated Building Systems (FILSYSTEMS), Inc. v.
Puente,G.R.No.153832,.March18,2005)
(a)Indicatorsofprojectemployment
Q: What are the Indicators of Project

Employment?
A: Either one or more of the following

circumstances,amongothers,maybeconsideredas
indicators that an employee is a project employee.
(Hanjinv.Ibaez,G.R.No.170181,June26,2008)
a. The duration of the specific/identified

undertaking for which the worker is
engagedisreasonablydeterminable
b. Such duration, as well as the specific

work/service to be performed, is defined
in an employment agreement and is
madecleartotheemployeeatthetimeof
hiring.
Note: Absent any other proof that the

project employees were informed of their
statusassuch,itwillbepresumedthatthey
areregularemployees.
c. The work/service performed by the

employee is in connection with the
particular project/undertaking for which
heisengaged
d. The employee, while not employed and

awaiting engagement, is free to offer his
servicestoanyotheremployer


LABORLAWTEAM:
72
e. Theterminationofhisemploymentinthe
particularproject/undertakingisreported
to the Department of Labor and
Employment Regional Office having
jurisdiction over the workplace within 30
days following the date of his separation
from work, using the prescribed form on
employees
termination/dismissal/suspensions
f. An undertaking in the employment

contract by the employer to pay
completion bonus to the project
employee as practiced by most
constructioncompanies
Q:Whataretherequisitesindeterminingwhether
anemployee(Ee)isaprojectEe?
A:
1. TheprojectEewasassignedtocarryouta
specificprojectorundertaking,and
2. The duration and scope of which were
specified at the time the Ee was engaged
for that project. (Imbuido v. NLRC, G.R.
No.114734,Mar.31,2000)
3. The Ee must have been dismissed every
aftercompletionofhisprojectorphase
4. Report to the DOLE of Ees dismissal on
account of completion of contract (Policy
Inst.No.20;D.O.19[1997])
Q:Whatisaproject?
A: A "project" has reference to a particular job or

undertaking that may or may not be within the
regular or usual business of the Er. In either case,
the project must be distinct, separate and
identifiable from the main business of the Er, and
its duration must be determined or determinable
(PALv.NLRC,G.R.No.125792,Nov.9,1998).
Q: Can a project employee (Ee) or a member of a

workpoolacquirethestatusofaregularEe?
A:Yes,whenthefollowingconcur:
1. There is a continuous rehiring of project

Eesevenaftercessationofaproject;and
2. The tasks performed by the alleged
project Ee are vital, necessary and
indispensable to the usual business or
tradeoftheemployer(Er).
Note: The length of time during which the Ee was

continuously rehired is not controlling, but merely
serves as a badge of regular employment. Enero and
Maraguinot have been employed for a period of not
lessthan2yearsandhavebeeninvolvedinatleast18
projects.Thesefactsarethebasisinconsideringthem
as regular Ees of the company. (Maraguinot v. NLRC,
G.R.No.120969,Jan.22,1998)
Members of a work pool from which a construction
companydrawsitsprojectEes,ifconsideredEesofthe
constructioncompanywhileintheworkpool,arenon
project Ees or Ees for an indefinite period. If they are
employedinaparticularproject,thecompletionofthe
project or any phase thereof will not mean severance
of ErEe relationship. Unless the workers in the work
poolarefreetoleaveanytimeandoffertheirservices
to other Ers. (L.T. Datu & Co., Inc. v. NLRC, G.R. No.
113162,Feb.9,1996)
Q:Whatisthedaycertainrule?
A:Itstatesthataprojectemploymentthatendson
a certain date does not end on an exact date but
uponthecompletionoftheproject.
Q:AreprojectEesentitledtoseparationpay?
A: GR: Project Ees are not entitled to separation
pay if they are terminated as a result of the
completionproject.
XPN: If the projects they are working on have

notyetbeencompletedwhentheirservicesare
terminated; project Ees also enjoy security of
tenure during the limited time of their
employment. (De Ocampo v. NLRC, G.R. No.
81077,June6,1990)
Q: Roger Puente was hired by Filsystems, Inc.,

initiallyasaninstallerandeventuallypromotedto
mobile crane operator, and was stationed at the
companys premises. Puente claimed in his
complaint for illegal dismissal, that his work was
continuous and without interruption for 10 years,
and that he was dismissed from his employment
without any cause. Filsystems on its part averred
that Puente was a project Ee in the companys
various projects, and that after the completion of
eachproject,hisemploymentwasterminated,and
such was reported to the DOLE. Is Roger Puente a
regularEe?
A: No, Puente is a project Ee. The contracts of

employment of Puente attest to the fact that he
washiredforspecificprojects.Hisemploymentwas
coterminouswiththecompletionoftheprojectsfor
whichhehadbeenhired.Thosecontractsexpressly
provided that his tenure of employment depended
on the duration of any phase of the project or on
the completion of the construction projects.
Furthermore, the company regularly submitted to
the labor dept reports of the termination of
services of project workers. Such compliance with

73
the reportorial reqt confirms that Puente was a
projectEe.
ThemererehiringofPuenteonaprojecttoproject
basis did not confer upon him regular employment
status. The practice was dictated by the practical
consideration that experienced construction
workersaremorepreferred.Itdidnotchangehis
status as a project Ee. (Filipinas PreFabricated
Building Systems (FILSYSTEMS), Inc. v. Puente, G.R.
No.153832,Mar.18,2005)
(3)Seasonalemployment
Q:Whatisseasonalemployment?
A: Employment where the job, work or service to
be performed is seasonal in nature and the
employment is for the duration of the season.
(Sec.5[a],RuleI,BookVI,IRR)
An employment arrangement where an employee
(Ee) is engaged to work during a particular season
on an activity that is usually necessary or desirable
intheusualbusinessortradeoftheemployer(Er).
Note: ForseasonalEes,theiremploymentlegallyends
upon completion of the project or the season. The
termination of their employment cannot and should
not constitute an illegal dismissal. (Mercado v. NLRC,
G.R.No.79869,Sept.5,1991)
One year duration on the job is pertinent in deciding

whether a casual Ee has become regular ornot, but it
isnotpertinenttoaseasonalorprojectEe.Passageof
time does not make a seasonal worker regular or
permanent.(Mercadov.NLRC,G.R.No.78969,Sep.5,
1991)
During offseason, the relationship of ErEe is not

severed; the seasonal Ee is merely considered on LOA
without pay. Seasonal workers who are repeatedly
engaged from season to season performing the same
tasks are deemed to have acquired regular
employment. (Hacienda Fatima v. National Federation
of Sugarcane WorkersFood and General Trade, G.R.
No.149440,Jan.28,2003)
Q:AreseasonalEesentitledtoseparationpay?
A: When the business establishment is sold which

effectively terminates the employment of the
seasonal Ees, the latter would be entitled to
separationpay.
Q: Can seasonal employees(Ees) be consideredas

regularEes?
A: Yes. The fact that seasonal Ees do not work

continuously for one whole year but only for the
duration of the season does not detract from
considering them in regular employment. Seasonal
workers who are called to work from time to time
and are temporarily laid off during offseason are
not separated from service in that period, but
merelyconsideredonleaveuntilreemployed.
If the Ee has been performing the job for at least a

year,eveniftheperformanceisnotcontinuousand
merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
that activity to the business. Hence, the
employment is considered regular, but only with
respect to such activity and while such activity
exists. (Benares v. Pancho, G.R. No. 151827, April
29,2005)
Q: Carlito Codilan and Maximo Docena had been

working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria and Reynaldo Tulin
have been working for 22, 15, and 6 years
respectively. The operations of the rice mill
continue to operate and do business throughout
the year even if there are only two or three
harvest seasons within the year. This seasonal
harvesting is the reason why the company
considers the workers as seasonal Ees. Is the
companycorrectinconsideringtheEesasseasonal
Ees?
A:No,thefactisthatbigricemillssuchastheone
ownedbythecompanycontinuetooperateanddo
businessthroughouttheyearevenifthereareonly
twoorthreeharvestseasonswithintheyear.Itisa
common practice among farmers and rice dealers
tostoretheirpalayandtohavethesamemilledas
the need arises. Thus, the milling operations are
not seasonal. Finally, considering the number of
years that they have worked, the lowest being 6
years, the workers have long attained the status of
regular Ees as defined under Art. 280. (Tacloban
SagkahanRiceMillv.NLRC,G.R.No.73806,Mar.21,
1990)
(4)Casualemployment
Q:Whatiscasualemployment?
A:
1. It is an employment where the Ee is engaged in
an activity which is not usually necessary or
desirable in the usual business or trade of the Er,
provided: such employment is not project nor
seasonal(Art.281).
Note:Butdespitethedistinctionbetweenregular
and casual employment, every Ee shall be
entitled to the same rights and privileges, and


LABORLAWTEAM:
74
shall be subject to the same duties as may be
grantedbylawtoregularEesduringtheperiodof
theiractualemployment.
2.AnEeisengagedtoperformajob,workorservice
whichismerelyincidentaltothebusinessoftheEr,
andsuchjob,workorserviceisforadefiniteperiod
made known to the Ee at the time of engagement
(Sec.5[b],RuleI,BookVI,IRR)
Note:Ifhehasrenderedatleast1yearofservice,
whethersuchserviceiscontinuousorbroken,he
is considered as regular Ee with respect to the
activity in which he is employed and his
employment shall continue while such activity
exists.
ACasualEeisonlycasualfor1year,anditisthe
passage of time that gives him a regular status.
(KASAMMACCOv.CA,G.R.No.159828,April19,
2006)
The purpose is to give meaning to the

constitutionalguaranteeofsecurityoftenureand
right to selforganization. (Mercado v. NLRC, G.R.
No.79868,Sep.5,1991)
Q: Yakult Phils. is engaged in the manufacture of

cultured milk. The workers were hired to cut
cogon grass and weeds at the back of the factory
building used by Yakult. They were not required
toworkonfixedscheduleandtheyworkedonany
day of the week on their own discretion and
convenience. The services of the workers were
terminated by Yakult on less than 1year after.
May casual or temporary Ees be dismissed by the
Er before the expiration of the 1year period of
employment?
A:Yes,theusualbusinessortradeofYakultPhils.is
the manufacture of cultured milk. The cutting of
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business
oftheYakult.
TheworkersarecasualEes.Nevertheless,theymay
be considered regular Ees if they have rendered
services for at least 1 year. When, as in this case,
theyweredismissedfromtheiremploymentbefore
the expiration of the 1year period they cannot
lawfully claim that their dismissal was illegal.
(Capule, et al. v. NLRC, G.R. No. 90653, Nov. 12,
1990)
Q: How is the project worker different from a
casualorcontractualworker?Brieflyexplainyour
answers.
A:
PROJECTWORKER
CASUALor
CONTRACTUAL
WORKER
Used to designate
workers in the
construction industry,
hired to perform a
specificundertakingfor
a fixed period, co
terminuswithaproject
or phase thereof
determinedatthetime
of the engagement of
theEe
Generic term used to
designate any worker
covered by a wrtitten
contract to perform a
specificundertakingfor
afixedperiod
Tobeconsideredatrue
project worker, it is
required that a
termination report be
submitted to the
nearest public
employment office
uponthecompletionof
the construciton
project. (Aurora Land
Projects Corp. v. NLRC,
G.R. No. 114733, Jan.
2,1997)
There is no such
requirement for an
ordinary contractual
worker
(5)Fixedtermemployment;Requisitesforvalidity
Q:Whatisthenatureoftermemployment?
A: A contract of employment for a definite period
terminates by its own terms at the end of such
period. (Brent School v. Zamora, G.R. No. L48494,
Feb.5,1990)
Q: What is the decisive determinant in term

employment?
A: It is the day certain agreed upon by the parties

for the commencement and the termination of
theiremploymentrelation.
Q:Whatisafixedtermemployment?
A: It is an employment where a fixed period of
employmentwasagreedupon:
1. Knowinglyandvoluntarilybytheparties,
2. Without any force, duress or improper
pressure being brought to bear upon the
employee(Ee)and
3. Absent any other circumstances vitiating
hisconsent,or
4. WhereitsatisfactorilyappearsthattheEr
and Ee dealt with each other on more or
less equal terms with no moral

75
dominance whatever being exercised by
the former over the latter. (Brent School,
Inc. v. Zamora, G.R. No. 48494, Feb. 5,
1990)
Note:AfixedperiodEedoesnotbecomearegularEe
becausehisemploymentiscoterminuswithaspecific
periodoftime.
Ee hired on a fixedterm is regular if job is necessary

and desirable to the business of Er. (Philips
Semiconductor v. Fadriquela, G.R. No. 141717, April
2004)
Q: Is term employment a circumvention of the

lawonsecurityoftenure?
A: No, it is not a circumvention of the law if it

followstherequisiteslaiddownbytheBrentruling.
(Romaresv.NLRC,G.R.No.122327,Aug.19,1998)
Q: Rene was hired as an athletic director in

ChristOmarDivivaSchoolforaperiodoffiveyears.
As such, he oversees the work of coaches and
related staff involved in intercollegiate or
interscholastic athletic programs. However, he
wasnotrehiredupontheexpirationofsaidperiod.
Rene questions his termination alleging that he
was a regular employee and could not be
dismissed without valid cause. Is he a regular
employee?
A: No. Rene was not a regular employee but an

employeeunderafixedtermcontract.Whileitcan
be said that the services he rendered were usually
necessary and desirable to the business of the
school, it cannot also be denied that his
employmentwasforafixedtermoffiveyears.The
decisive determinant in fixed term employment
should not be the activities that the employee is
called upon to perform, but the day certain agreed
upon by the parties for the commencement and
termination of their employment relation (Brent
SchoolInc.v.Zamora,G.R.No.48494,Feb.5,1990).
Q: In the above mentioned facts, will Rene

automatically become a regular employee if he is
rehired by the school for another definite period
ofemployment?
A: No. The decisive determinant in term

employment is the day certain agreed upon by the
parties for the commencement and termination of
their employment relationship, a day certain being
understoodtobethatwhichmustnecessarilycome,
although it may not be known when and not
whethertheworkisusuallynecessaryanddesirable
tothebusinessoftheemployer.
Q:DoestheReasonableConnectionRuleapplies
in fixed term employment for a fixed term
employee be eventually classified as regular
employee?
A: No. It should be apparent that this settled and

familiar notion of a period, in the context of a
contract of employment, takes no account at all of
the nature of the duties of the employee; it has
absolutely no relevance to the character of his
duties as being usually necessary and desirable to
theusualbusinessoftheemployer,ornot.
Q: Dean Jose and other employees are holding

administrative positions as dean, dept heads and
institute secretaries. In the implementationof the
Reorganization, Retrenchment and Restructuring
program effective Jan. 1, 1984, Dean Jose and
other employees were retired but subsequently
rehired.Theirappointmenttotheiradministrative
positions as dean, dept heads and institute
secretaries had been extended by the company
fromtimetotimeuntiltheexpirationoftheirlast
appointment on May 31, 1988. Were Dean Jose
andotheremployeesillegallydismissed?
A:No.Petitionersweredismissedbyreasonofthe
expiration of their contracts of employment.
Petitioners'appointmentsasdean,deptheadsand
institutesecretarieswereforfixedtermsofdefinite
periods as shown by their respective contracts of
employment, which all expired on the same date,
May 31, 1988. The validity of employment for a
fixed period has been acknowledged and affirmed
bytheSC.(Blancaflorv.NLRC,G.R.No.101013,Feb.
2,1993)
e.Jobcontractingandlaboronlycontracting
Q:Whenistherejobcontracting?
A:Specifically,thereisjobcontractingwhere:
1. The contractor carries on an

independent business and
undertakes the contract work on his
own account under his own
responsibility according to his own
manner and method, free from the
controlanddirectionofhisemployer
or principal in all matters connected
with the performance of the work
exceptastotheresultsthereof;and
2. The contractor has substantial

capital or investment in the form of
tools, equipment, machineries, work
premises, and other materials which


LABORLAWTEAM:
76
are necessary in the conduct of his
business.
Q:Whenistherelaboronlycontracting?
A: A person is deemed to be engaged in labor
onlycontractingwhere:
1. The person supplying workers to an

employer does not have substantial
capital or investment in the for of
tools, equipment, machineries, work
premises,amongothers;and
2. The workers recruited and placed by

suchpersonareperformingactivities
which are directly related to the
principal business of such employer.
(Baguio v. NLRC, G.R. No. 7900408,
Oct.4,1991)
Q: What is a permissible job contracting or
subcontracting?
A: It refers to an arrangement whereby a principal
agrees to farm out with a contractor or
subcontractor the performance of a specific job,
work,orservicewithinadefiniteorpredetermined
period, regardless of whether such job, work or,
service is to be performed or completed within or
outsidethepremisesoftheprincipal.
Q: What are the conditions that must be met in

order to be considered as permissible job
contractingorsubcontracting?
A:Thefollowingconditionsmustbemet:
1. The contractor carries on a distinct and

independentbusinessandundertakesthe
contract work on his account under his
own responsibility according to his own
manner and method, free from the
control and direction of his employer or
principalinallmattersconnectedwiththe
performance ofhis work except as to the
resultsthereof;
2. The contractor has substantial capital or

investment;and
3. Theagreementbetweentheprincipaland
contractor or subcontractor assures the
contractual employees entitlement to all
labor and occupational safety and health
standards, free exercise of the right to
selforganization, security of tenure, and
social welfare benefits. (Gallego v. BAYER
Phils.,Inc.,G.R.No.179807,July31,2009,
J.CarpioMorales)
Q:Whatarethefactorstoconsiderindetermining
whether contractor is carrying on an independent
business?
A:
1. Natureandextentofwork
2. Skillrequired
3. Termanddurationoftherelationship
4. Right to assign the performance of
specifiedpiecesofwork
5. Controlandsupervisionofworker
6. Power of employer to hire, fire and pay
wages
7. Controlofthepremises
8. Duty to supply premises, tools,
appliances,materialsandlabor
9. Mode, manner and terms of payment.
(Vinoya v. NLRC, G.R. No. 126286, Feb 2,
2000)
Note:Individualswithspecialskills,expertiseortalent
enjoy the freedom to offer their services as
independentcontractors.Anindividuallikeanartistor
talent has a right to render his services without any
one controlling the means and methods by which he
performs his artor craft. (Sonza vs. ABSCBN, G.R.No.
138051,June10,2004)
Q: Who are the parties in contracting and

subcontracting?
A:
1. Contractor/subcontractor Refers to any
person engaged in a legitimate contracting or
subcontractingarrangement.
2. Contractual Ee One who is employed by a

contractor or subcontractor to perform or
completeajob,work,orservicepursuanttoan
arrangement between the latter and a
principal.(D.O.1802)
3. PrincipalAnyErwhoputsoutorfarmsouta
job, service, or work to a contractor or
subcontractor.
Q: Describe the relationship arising from

contractualarrangements.
A: There is a trilateral relationship between the

principal, contractor and Ee. There exists a
contractual relationship between the principal and
thecontractororsubcontractortoitsEes.
Q:WhataretherightsofacontractualEe(CEe)?

77
A: They shall be entitled to all the rights and
privilegesduetoaregularEeasprovidedintheLC,
asamendedtoincludetheff:
1. Safeandhealthfulworkingconditions
2. ServiceIncentiveLeave,restdays,OTpay,
holiday pay, 13
th
month pay and
separationpay
3. Socialsecurityandwelfarebenefits;
4. Selforganization, CBA and peaceful
concertedactions
5. Securityoftenure(Sec.8,DO1802)
Q: What are the effects of termination of CEe to

separationpayandotherbenefits?
A:
1. If prior to the expiration of the
employment contract between the
principal and the contractor or
subcontractor The right of CEe to
separation pay or other related benefits
shall be governed by the applicable laws
and jurisprudence on termination of
employment
2. If the termination results from the

expiration of the contract between the
subcontractor The Ee shall not be
entitled to separation pay. However, this
isw/oprejudicetocompletionbonusesor
other emoluments including retirement
pay as may be provided by law or in the
contract between the principal and the
contractor.
Q: When is the principal deemed the employer of

thecontractualemployee?
A:Where:
1. Thereislaboronlycontracting
2. The contracting arrangement falls within
theprohibitedacts
Q:MaytheErorindirectErrequirethecontractor
or subcontractor to furnish a bond equal to the
cost of labor under contract to answer for the
wages due to Ees in case the contractor or
subcontractorfailstopaythesame?
A: Yes. The Er or indirect Er may require the

contractor or subcontractor to furnish a bond that
willanswerforthewagesduetotheEes.
Q:Whatistheliabilityoftheprincipal?
A: The principal shall be solidarily liable with the

contractor in the event of any violation of any
provision of the LC, including the failure to pay
wages. This will not prevent the principal from
claimingreimbursementfromthecontractor.
Q: What does substantial capital or investment
mean?
A: It refers to the capital stocks and subscribed
capitalization in case of corporations, tools,
equipments, implement, machineries and work
premises, actually and directly used by the
contractor or subcontractor in the performance or
completion of the job, work or service contracted
out.(D.O.1802)
Note:Thelawdoesnotrequirebothsubstantialcapital
and investment in the form of tools, equipments,
machineries, etc. This is clear from the use of
conjunction or. If the contention was to require the
contractor to prove that he has both capital and
requisite investment, then the conjunction and
should have been used. (Virginia Neri v. NLRC, G.R.
No.97008,July21,1993)
Q:Whatdoestherighttocontrolmean?
A: It refers to the right reserved to the person for
whom the services of the contractual workers are
performed, to determine not only the end to be
achieved, but also the manner and means to be
usedinreachingthatend.(D.O.1802)
Q: SMC and Sunflower Cooperative enteredinto a
1yr Contract of Services, to be renewed on a
month to month basis until terminated by either
party. Pursuant to the contract, Sunflower
engagedprivaterespondentstorenderservicesat
SMCs Bacolod Shrimp Processing Plant. The
contract was deemed renewed by the parties
everymonthafteritsexpirationonJan.1,94and
respondentscontinuedtoperformtheirtasksuntil
Sep.11,95.InJuly95,privaterespondentsfileda
complaintbeforetheNLRC,prayingtobedeclared
as regular Ees of SMC, with claims for recovery of
all benefits and privileges enjoyed by SMC rank
and file Ees. Respondents subsequently filed an
Amended Complaint to include illegal dismissal as
additional cause of action following SMCs closure
of its Bacolod Shrimp Processing Plant on which
resulted in the termination of their services. SMC
filed a Motion for Leave to File Attached Third
PartyComplainttoimpleadSunfloweras3
rd
Party
Defendant. Are private respondents Ees of the
independent cooperative contractor (Sunflower)
oroftheSMC?


LABORLAWTEAM:
78
A:ThecontentionofSMCholdsnobasis.Usingthe
substantial capital doctrine and the right of
control test, the Court found that the Sunflower
had no substantial capital in the form of tools,
equipment, machineries, work premises and other
materials to qualify itself as an independent
contractor. The lot, building, machineries and all
other working tools utilized by private respondents
in carrying out their tasks were owned and
provided by SMC. In addition, the shrimp
processing company was found to have control of
the manner and method on how the work was
done.Thus,thecomplainantsweredeemedEesnot
of the cooperative but of the shrimp processing
company. Since respondents who were engaged in
shrimp processing performed tasks usually
necessary or desirable in the aquaculture business
of SMC, they should be deemed regular Ees of the
latter and as such are entitled to all the benefits
and rights appurtenant to regular employment.
(SMC vs. Prospero Aballa, et al., G.R. No. 149011,
June28,2005,J.CarpioMorales)
Q: What are the conditions before permitting job

contracting?
A:
1. The labor contractor must be duly
licensed by the appropriate Regional
OfficeoftheDOLE
2. There should be a written contract
between the labor contractor and his
clientEr that will assure the Ees at least
the minimum labor standards and
benefitsprovidedbyexistinglaws.
Note:TheEesofthecontractororsubcontractorshall
be paid in accordance with the provisions of the LC.
(Art.106)
Q:Whatislaboronlycontracting?
A: It refers to an arrangement where the following
conditionsconcur:
1. The person supplying workers to an Er
does not have substantial capital or
investment in the form of tools,
equipment, machineries, work, premises,
amongothers,or
2. Evenifsuchpersonhassubstantialassets,
thesamearenotactuallyordirectlyused
bytheEescontractedout;
3. Theworkersrecruitedandplacedbysuch
personareperformingactivitieswhichare
directly related to the principal business
ofsuchEr.
Q:Whyislaboronlycontractingprohibited?
A: ItgivesrisetoconfusionastowhoistherealEr
of the workers and who is liable to their claims. It
alsodeprivesworkersoftheopportunitytobecome
regularEes.
Q: How do we determine if one is engaged in
labor/jobonlycontracting?
A:Thetesttodeterminewhetheroneisajob/labor
onlycontractingistolookintotheelementsofajob
contractor. If all the elements of a job contractor
arepresent,thenheisajobcontractor.Absentone
of the elements for a job contractor, then the
personisalaboronlycontractor.
Note: It is the opinion of Dean Antonio H. Abad, Jr.
thatthedecisivedeterminantinjobcontractingshould
not be the fact that the contracted workers are
performingactivitieswhicharedirectlyrelatedtothe
main business of the principal, but that the principal
has no right to control the conduct of the employees
as to the means employed to achieve an end; not the
character of the activities as being usually necessary
ordesirableintheusualbusinessoftheemployer.
It cannot be gainsaid that the activities of the
contracted workers are always necessary or desirable;
even that they are directly related to the main
businessoftheprincipal.Theprimordialconsideration
should be the control test. Hence, if the
arrangement passes the control test, it is job
contracting.Ifitfails,itislaboronlycontracting.
Q: Distinguish between job contracting and labor
onlycontracting
A:
JOBCONTRACTING
LABORONLY
CONTRACTING
Liability is limited (shall be
solidarily liable with Er
only when the Er fails to
comply with reqts as to
unpaid wages and other
laborstandardsviolations)
Liability extends to all
those provided under
theLaborStandardslaw
Permissible, subject only
tocertainconditions
ProhibitedbyLaw
The contractor has
substantial capital or
investment
Has no substantial
capitalorinvestment
Q: SMPC entered into a contract with Arnold for

the milling of lumber as well as the hauling of
waste wood products. The company provided the
equipment and tools because Arnold had neither
tools and equipment nor capital for the job.
Arnold, on the other hand, hired his friends,
relatives and neighbors for the job. Their wages
were paid by SMPC to Arnold, based on their

79
productionorthenumberofworkersandthetime
used in certain areas of work. All work activities
andscheduleswerefixedbythecompany.
1.IsArnoldajobcontractor?Explainbriefly
2.Whoisliablefortheclaimsoftheworkershired
byArnold?Explainbriefly.
A:
1. No. In the problem given, Arnold did not
have sufficient capital or investment for
one. For another, Arnold was not free
from the control and direction of SMPC
because all work activities and schedules
were fixed by the company. Therefore,
Arnold is not a job contractor. He is
engagedinlaboronlycontracting.
2. SMPC is liable for the claims of the
workers hired by Arnold. A finding that
Arnold is a labor only contractor is
equivalenttodeclaringthatthereexistan
ErEe relationship between SMPC and
workers hired by Arnold. This is so
because Arnold is considered a mere
agent of SMPC (Lim v. NLRC, G.R. No.
124630, Feb. 19, 1999); 2002 Bar
Question)
Q: What are the grounds for delisting of

contractorsorsubcontractors?
A:
1. Nonsubmissionofcontractsbetweenthe
subcontractorwhenrequiredtodoso;
2. Nonsubmissionofannualreport;
3. Findings through arbitration that the
contractor or subcontractor has engaged
in laboronly contracting and other
prohibitedactivities;
4. Noncompliancewithlaborstandardsand
workingconditions.(Sec.16,D.O.1802)
Q: What are the effects of finding that there is

laboronlycontracting?
A: A finding that a contractor is a laboronly

contractorisequivalenttodeclaringthatthereisan
employeremployee relationship between the
principal and the employees of the laboronly
contractor. (Assoc. AngloAmerican Tobacco Corp.
v.Clave,G.R.No.50915,Aug.30,1990)
2.TERMINATIONOFEMPLOYMENT
a.Substantivedueprocess
Q:WhatisSubstantivedueprocess?
A:SubstantiveDueProcessprovidesthegroundfor
disciplinaryaction,i.e.correctiveorretributive
(a)Justcauses
Q: What are the just causes for termination (Art.

282,LC)?
A:
1. Serious misconduct or willful
disobediencebytheemployee(Ee)ofthe
lawful orders of his employer (Er) or
representative in connection with his
work
2. Gross and habitual neglect by the Ee of
hisduties
3. Fraud or willful breach by the Ee of the
trust reposed in him by his Er or duly
organizedrepresentative
4. Commission of a crime or offense by the
Ee against the person of his Er or any
immediate member of his family or his
dulyauthorizedrepresentative.
5. Othercausesanalogoustotheforegoing
Note: Theburdenofprovingthattheterminationwas
foravalidorauthorizedcauseshallrestontheEr.(Art.
277[b])
1.SeriousMisconduct
Q:Whatisseriousmisconduct?
A: It is an improper or wrong conduct; the

transgression of some established and definite rule
of action, a forbidden act, a dereliction of duty,
willfulincharacter,andimplieswrongfulintentand
not mere error in judgment. To be serious within
the meaning and intendment of the law, the
misconduct must be of such grave and aggravated
character and not merely trivial or unimportant.
(Villamor Golf Club v. Pehid, G.R. No. 166152, Oct.
4,2005)
Q:Whataretheelementsofseriousmisconduct?
A:
1. It must be serious or of such a grave and
aggravatedcharacter;
2. Must relate to the performance of the
employees(Ee)duties;
3. Ee has become unfit to continue working
for the employer. (Philippine Aeolus
Automotive United Corp. v. NLRC, G.R.
No.124617,April28,2000)
Q:Givesomeexamplesofseriousmisconduct.
A:


LABORLAWTEAM:
80
1. Sexualharassment
2. Fightingwithinthecompanypremises
3. Uttering obscene, insulting or offensive
wordsagainstasuperior
4. Falsificationoftimerecords
5. Grossimmorality
Q: Escando, upset at his transfer to the washer

section, repeatedly uttered gago ka and
threatened bodily harm to his superior Mr.
Andres.Istheutteranceoftheobscenewordsand
threats of bodily harm gross and willful
misconduct?
A: Yes. The repeated utterances by Escando of
obscene, insulting or offensive words against a
superiorwerenotonlydestructiveofthemoralsof
his coemployees (Ees) and a violation of the
company rules and regulations, but also constitute
gross misconduct which is one of the grounds
providedbylawtoterminatetheservicesofanEe.
(Autobus Workers Union v. NLRC, G.R. No. 11753,
June26,1998)
Q:Samsonmadeinsultingandobsceneutterances
towards the General Manager saying Si EDT
bullshit yan, sabihin mo kay EDT yan among
others during the Christmas party. Are the
utterances towards the General Manager gross
misconduct?
A:TheallegedmisconductofSamsonwhenviewed
in its context is not of such serious and grave
characterastowarranthisdismissal.Samsonmade
theutterancesandobscenegesturesataninformal
Christmasgatheringanditistobeexpectedduring
this kind of gatherings, where tongues are more
oftenthannotloosenedbyliquorofotheralcoholic
beverages,thatemployees(Ees)freelyexpresstheir
grievancesandgripesagainsttheiremployers(Ers).
Ees should be allowed wider latitude to freely
express heir grievances and gripes against their Er.
Ees should be allowed wider latitude to freely
express their sentiments during these kinds of
occasions which are beyond the disciplinary
authority of the Er. (Samson v. NLRC, G.R. No.
121035,April12,2000)
2.WillfulDisobedience
Q: When is willful disobedience of the Ers lawful

ordersajustcausefortermination?
A:2requisitesmustconcur:
1. The employees (Ees) assailed conduct
musthavebeenwillfulor intentional,the
willfulness being characterized by a
wrongfulandperverseattitude.
2. The disobeyed orders, regulations or
instructionsoftheErmustbe:
a. Reasonableandlawful
b. SufficientlymadeknowntotheEe
c. Must pertain to or be in connection
with the duties which the Ee has
beenengagedtodischarge.(CosepV.
NLRC, G.R. No. 124966 June 16,
1998)
Note: There is no law that compels an Ee to accept a

promotion for the reason that a promotion is in the
natureofagiftorreward,whichapersonhastheright
torefuse.TheexerciseoftheEeoftherighttorefusea
promotion cannot be considered in law as
insubordinationorwillfuldisobedience.(PT&TCorp.v.
CA,G.R.No.152057,Sep.29,2003)
Q: The company vehicle was brought out of the

companypremiseswithoutauthorizationtwice.In
the first instance the company opted not to
implement any action against Dioks and instead
issuedamemorandumreimindingDioksaswellas
the security guards of the proper procedure.
However, in the second instance the vehicle met
an accident. Is Dioks guilty of willful disobedience
even though he was not the one who personally
brought the company vehicle out of the company
premises and was merely a passenger in the
secondincident?
A: Yes. A rule prohibiting Ees from using company
vehiclesforprivatepurposewithoutauthorityfrom
managementisareasonableone.WhenDioksrode
the company vehicle he was undoubtedly aware of
thepossibleconsequencesofhisactandtakinginto
consideration his moral ascendancy over the
securityguardsitwasincumbentuponhimnotonly
toadmonishthembutalsotorefrainfromusingthe
company car himself. (Family Planning Org. of the
Phil.v.NLRC,G.R.No.75907,Mar.23,1992)
Q: Escobins group were security guards based in
Basilan. They were placed in floating status and
were asked to report for reassignment in Metro
Manila by PISI. Upon failure to report or respond
to such directives they were ordered dismissed
fromemploymentbyPISIforwillfuldisobedience.
Did the failure to report to Manila amount to
willfuldisobedience?
A: The reasonableness of the rule pertains to the
kind of character of directives and commands and
tothemannerinwhichtheyaremade.Inthiscase,
the order to report to the Manila office fails to
meet this standard. The order to report to Manila
was inconvenient, unreasonable, and prejudicial to
Escobins group since they are heads of families
residing in Basilan and they were not given

81
transportationmoneyorassuranceofavailabilityof
work in Manila. (Escobin v. NLRC, G.R. No. 118159.
April15,1998)
3.Negligence
Q: When is negligence a just cause for
termination?
A:Whenitisgrossandhabitual.
Q:WhenisthereGrossNegligence?
A:Grossnegligenceimpliesawantorabsenceofor
failure to exercise slight care of diligence of the
entire absence of care it evinces thoughtless
disregard of consequences without exerting any
effort to avoid them. However, such neglect must
not only be gross but habitual in character. (Judy
Phils.v.NLRC,G.R.No.111934,April29,1998)
Q:WhenisthereHabitualNeglectofduties?
A: Habitual Neglect implies repeated failure to
perform ones duties over a period of time,
depending upon the circumstance. (JGB and
Associatesv.NLRC,GRNo.10939,Mar.7,1996)
Q: Antiola, as assorter of baby infant dress as for
Judy Phils. erroneously assorted and packaged
2,680 dozens of infant wear. Antiola was
dismissed from employment for this infraction.
Does the single act of misassortment constitute
grossnegligence?
A:No.Suchneglectmustnotonlybegrossbutalso
habitual in character. Hence, the penalty of
dismissal is quite severe considering that Antiola
committed the infraction for the first time. (Judy
Phils.v.NLRC,G.R.No.111934.April29,1998)
Q: Does the failure in performance evaluations
amounttogrossandhabitualneglectofduties?
A: As a general concept poor performance is
equivalent to inefficiency and incompetence in the
performance of official duties. The fact that an
employees (Ees) performance is found to be poor
or unsatisfactory does not necessarily mean that
the Ee is grossly and habitually negligent of his
duties. Gross negligence implies a want or absence
of or failure to exercise slight care of diligence or
theentireabsenceorcare.Heevincesathoughtless
disregard of consequences without exerting any
effort to avoid them. (Eastern Overseas
Employment Center Inc. v. Bea, G.R. 143023,
Nov.29,2005)
Q:Isinefficiencyajustcausefordismissal?
A: Yes, failure to observe prescribed standards of
work,ortofulfillreasonableworkassignmentsdue
to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean
failure to attain work goals or work quotas, either
by failing to complete the same within the allotted
reasonable period, or by producing unsatisfactory
results. (Buiser v. Leogardo, G.R. No. L63316, July
31,1984)
This ground is considered analogous to those
enumeratedunderArt.282.(SkippersUnitedPacific
v.Magud,G.R.No.166363,Aug.15,2006)
Q: Gamido was a quality control inspector of VH
Manufacturing. Gamido was allegedly caught by
the company Pres. Dy Juanco of sleeping and was
dismissed from employment. Did Gamidos act of
sleeping on the job constitute a valid cause of
dismissal?
A: Sleeping on the job as a valid ground for
dismissalonlyappliestosecurityguardswhoseduty
necessitatesthattheybeawakeandwatchfulatall
times. Gambidos single act of sleeping further
shows that the alleged negligence or neglect of
duty was neither gross nor habitual. (VH
Manufacturing v. NLRC, G.R. No. 130957, Jan. 19,
2000)
Q:Givesomeformsofneglectofduty.
A:
1. Habitualtardinessandabsenteeism
2. Abandonment:
a. Failuretoreportforworkorabsence
withoutjustifiablereason
b. Clear intention to sever ErEe
relationship manifested by some
overt acts. (Labor et. al v. NLRC, GR
No.110388,Sep.14,1995)
4.Abandonment
Q: What is abandonment as a just cause for
termination?
A: It means thedeliberate, unjustified refusal of an
employeetoresumehisemployment.
Q:Whataretherequirementsforavalidfindingof
abandonment?
A: For a valid finding of abandonment, 2 factors

mustbepresent:
1. Thefailuretoreportforwork,orabsence
withoutvalidorjustifiablereason;and
2. A clear intention to sever ErEe
relationship, with the 2nd element as the


LABORLAWTEAM:
82
more determinative factor, being
manifested by some overt acts. (Sta.
Catalina College s. NLRC, G.R. No.
144483,Nov.19,2003)
Q:Howtoproveabandonment?
A: To prove abandonment, the Er must show that

the Ee deliberately and unjustifiably refused to
resume his employment without any intention of
returning. There must be a concurrence of the
intention to abandon and some overt acts from
which an Ee may be deduced as having no more
intention to work. The law, however, does not
enumerate what specific overt acts can be
considered as strong evidence of the intention to
sever the EeEr relationship. (Sta. Catalina College
v.NLRC,G.R.No.144483.Nov.19,2003)
Q: Mejila a barber at Windfield Barber Shop, had

analtercationwithafellowbarberwhichresulted
in his subsequent turning over the duplicate keys
of the shop to the cashier and took away all his
belongings there from and worked at different
barbershop. Mejila then filed an illegal dismissal
casebutdidnotseekreinstatementasarelief.Did
Mejilacommitabandonment?
A: Mejilas acts such as surrendering the shops

keys, not reporting to the shop anymore without
any justifiable reason, his employment in another
barbershop,andthefilingofacomplaintforillegal
dismissal without praying for reinstatement clearly
showthattherewasaconcurrenceoftheintention
toabandonandsomeovertactsfromwhichitmay
be inferred that the Ee concerned has no more
interest in working. (Jo v. NLRC, G.R. No. 121605,
Feb.2,2000)
5.Fraud;BreachofTrust/LossofConfidence
Q: When is breach of trust/loss of confidence a
justcausefortermination?
A:
1. Itappliesonlytocasesinvolving:
a. Employees (Ees) occupying positions
of trust and confidence (confidential
and managerial Ees) to this class
belong managerial Ees, i.e., those
vested with the powers or
prerogatives to lay down
management policies and/or to hire,
transfer, suspend, layoff, recall,
discharge, assign or discipline Ees or
effectively recommend such
managerialactions
b. Ees routinely charged with the care
and custody of the employers (Ers)
money or property to this class
belong cashiers, auditors, property
custodians,etc.,orthosewho,inthe
normal and routine exercise of their
functions, regularly handle
significant amounts of money or
property. (Mabeza v. NLRC, G.R. No.
118506April18,1997)
2. The loss of trust and confidence must be

basedonwillfulbreach.
Note: A breach is willful if it is done

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

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

clearly established facts sufficient to
warrant the Ees separation from
employment.(SulpicioLinesInc.V.Gulde,
G.R.No.149930,Feb.22,2002)
5. Fraud must be committed against the Er

orhisrepresentatives,e.g.:
a. Falsificationoftimecards
b. Theftofcompanyproperty
c. Unauthorized use of company
vehicle
Note: The treatment of rank and file personnel and

managerial Ees in so far as the application of the
doctrineoflossoftrustandconfidenceisconcernedis
different. As regards managerial Ees, such as Caoile,
mereexistenceofabasisforbelievingthatsuchEehas
breached the trust of his Er would suffice for his
dismissal. (Caoile v. NLRC, G.R. No. 115491, Nov. 24,
1998)
Q:Whataretheguidelinesforthedoctrineofloss
ofconfidencetoapply?
A:
1. Loss of confidence should not be
simulated (reasonable basis for loss of
trustandconfidence)
2. Not used for subterfuge for causes which
are improper and/or illegal and
unjustified
3. Not arbitrarily asserted in the face of
overwhelmingevidencetothecontrary

83
4. Must be genuine, not a mere
afterthoughttojustifyearlieractiontaken
inbadfaithand
5. The Ee involved holds a position of trust
andconfidence
Note: The breach of trust must rest on substantial

grounds and not on the Ers arbitrariness, whims,
caprices, or suspicion; otherwise, the Ee would
eternally remain at the mercy of the Er. It should be
genuine and not simulated, nor should it appear as a
mereafterthoughttojustifyearlieractiontakeninbad
faith of a subterfuge for causes which are improper,
illegal, or unjustified. It has never been intended to
affordandoccasionforabusebecauseofitssubjective
nature. There must, therefore, be an actual breach of
dully committed by the employee which must be
established by substantial evidence. (Dela Cruz v.
NLRC,G.R.No.119536,Feb.17,1997)
Q: Mabeza a chambermaid at Hotel Supreme was
terminated from employment because of her
refusal to sign an affidavit attesting to their
employers (Ers) compliance with minimum wage
and other labor standards. Mabeza filed a
complaint for illegal dismissal against Hotel
Supreme. As a defense, Hotel Supreme claimed
that she abandoned her work and belatedly
claimed loss of confidence as the ground for the
dismissalofMabezabecauseshestolesomeofthe
properties of her Er. Is loss of confidence a valid
groundfordismissalofahotelchambermaid?
A: No. Loss of confidence as a just cause for
dismissal was never intended to provide Ers with a
blank check for terminating their Ees. Evidently, an
ordinarychambermaidwhohastosignoutforlinen
and other hotel property from the property
custodian each day and who has to account for
each and every towel or bed sheet utilized by the
hotel's guests at the end of her shift would not fall
underanyofthesetwoclassesofEesforwhichloss
ofconfidence,ifablysupportedbyevidence,would
normally apply. (Mabeza v. NLRC, G.R. No. 118506,
April18,1997)
Q: Abelardo Abel was first hired by Philex Mining
Corp. in Jan. 88. He was later assigned to the
companys Legal Dept as a Contract Claims Asst.,
andheldthepositionfor5yrspriortohistransfer
totheMineEnggandDrawControlDeptwherein
he was appointed Unit Head. In 02, he was
implicated in an irregularity occurring in the
subsidence area of the companys mine site at
Benguet. His coworker Danilo, executed an
affidavit known as the Subsidence Area
Anomaly. The incidents in Lupegas affidavit
supposedly took place when Abel was still a
ContractClaimsAsst.atthecompanyslegaldept.
An investigation was promptly launched by the
companys officers. Abel attended the meetings
but claimed that he was neither asked if he
needed the assistance of counsel nor allowed to
properly present his side. By memo, the company
found Abel guilty of (1) fraud resulting in loss of
trustandconfidenceand(2)grossneglectofduty,
and was meted out the penalty of dismissal from
employment. Was Abel validly dismissed for any
ofthecausesprovidedforinArt.282oftheLC?
A:No.The1strequisitefordismissalontheground
of loss of trust and confidence is that the Ee
concerned must be holding a position of trust and
confidence. Abel was a contract claims assistant at
thetimeheallegedlycommittedtheactswhichled
to its loss of trust and confidence. It is not the job
title but the actual work that the Ee performs. It
was part of Abels responsibilities to monitor the
performance of the companys contractors in
relation to the scope of work contracted out to
them.
The 2nd requisite is that there must be an act that
wouldjustifythelossoftrustandconfidence.Loss
of trust and confidence, to be a valid cause for
dismissal,mustbebasedonawillfulbreachoftrust
and founded on clearly established facts. The basis
for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is
not necessary. The companys evidence against
Abel fails to meet this standard. Its lone witness,
Lupega, did not support his affidavit and testimony
duringthecompanyinvestigationwithanypieceof
evidence at all. It could hardly be considered
substantial evidence. (Abel v. Philex Mining Corp.,
G.R.No.178976,July31,2009,J.CarpioMorales)
6.TerminationofEmploymentpursuanttoUnion
SecurityClause
Q:MSMGwasalocalunionaffiliatedwithULGWP
a national federation. MSMG had a dispute with
ULGWP over an imposition of a fine prompting
MSMG to declare independence from ULGWP.
Because of the dispute, ULGWP asked for the
dismissal from employment of the officers of
MDMG from the company by virtue of a union
securityclauseintheCBA.Thecompanydismissed
the officers. Does a union security clause absolve
the company form observing the requirement of
dueprocess?
A:Althoughunionsecurityclausesembodiedinthe
CBA may be validly enforced and dismissals
pursuant thereto may likewise be valid, this does
not erase the fundamental requirement of due
process. An employer cannot merely rely upon a
labor federations allegations in terminating union


LABORLAWTEAM:
84
officers expelled by the federation for allegedly
committingactsofdisloyaltyand/orinimicalto the
interest of the federation and in violation of its
constitutionandbylaws.
The right of an Ee to be informed of the charges
against him and to be given a reasonable
opportunity to present his side in a controversy
with either the company or his own union is not
wiped away by a union security clause in a CBA.
Even assuming that a federation had valid grounds
to expel union officers, due process requires that
theseunionofficersbeaccordedaseparatehearing
by the company. (MSMG v. Ramos, G.R. No.
113907,Feb.28,2000)
7.TotalityofInfractionsdoctrine
Q:Whatisthetotalityofinfractionsdoctrine?
A:Itisthetotality,notthecompartmentalizationof
company infractions that the Ee has committed,
which justifies the penalty of dismissal. (MERALCO
v.NLRC,G.R.No.114129,Oct.24,1996)
Note: Where the Ee has been found to have
repeatedly incurred several suspensions or warnings
on account of violations of company rules and
regulations, the law warrants their dismissal as it is
akin to habitual delinquency. (Villeno v. NLRC, G.R.
No.108153,Dec.26,1995)
Q: What are the guidelines to determine the
validityoftermination?
A:Gravityoftheoffense
1. Positionoccupiedbytheemployee
2. Degreeofdamagetotheemployer
3. Previousinfractionsofthesameoffense
4. LengthofService
8.CommissionofaCrime
Q: What do you mean by commission of a crime
or offense as a just cause for termination of an
Ee?
A: It refers to an offense by the Ee against the

person of his employer or any immediate member
of his family or his duly authorized representative
and thus, conviction of a crime involving moral
turpitude is not analogous thereto as the element
ofrelationtohisworkortohisemployerislacking.
Note: A criminal case need not be actually filed.
Commission of acts constituting a crime itself is
sufficient.
9.AnalogousCases
Q: What is required for an act to be included in

analogouscasesofjustcausesoftermination?
A: Must be due to the voluntary and/or willful act

or omission of the employee (Nadura v. Benguet
Consolidated,G.R.No.L17780,Aug.24,1962),e.g.:
1. Violation of company rules and
regulations
2. Drunkenness
3. Grossinefficiency
4. Illegallydivertingemployersproducts
5. Failure to heed an order not to join an
illegalpicket
6. Violation of safety rules and code of
discipline
Q:Whatisthedoctrineofincompatibility?
A:Wheretheemployeehasdonesomethingthatis
contrary or incompatible with the faithful
performance of his duties, his employer has a just
cause for terminating his employment. (Manila
ChauffeursLeaguev.BachrachMotorCo.,G.R.No.
L47071,June17,1940)
(b).AuthorizedCauses
Q: What are the authorized causes of termination
bytheemployer(Er)?
A:
1. Installation of laborsaving devices
(automation/robotics)
2. Redundancy (superfluity in the

performanceofaparticularwork)exists
where the services of an employee (Ee)
are in excess of what is reasonably
demanded by the actual reqts of the
enterprise.(WiltshireFileCo.,Inc.v.NLRC,
G.R.No.82249,Feb.7,1991)
Note:Theredundancyshouldnothavebeen
createdbytheEr.
3. Reorganization
Note: An Er is not precluded from adopting

a new policy conducive to a more
economical and effective management, and
the law does not require that the Er should
be suffering financial losses before he can
terminate the services of the employee on
thegroundofredundancy(DOLEPhil.,Inc.v.
NLRC,G.R.No.L55413,July25,1983)

85
4. Retrenchment cutting of expenses and
includesthereductionofpersonnel;Itisa
management prerogative, a means to
protectandpreservetheErsviabilityand
ensure his survival. To be an authorized
cause it must be affected in good faith
(GF) and for the retrenchment, which is
after all a drastic recourse with serious
consequences for the livelihood of the
Eesorotherwiselaidoff.
Note:Thephrasetopreventlossesmeans
that retrenchment or termination from the
service of some Ees is authorized to be
undertaken by the Er sometime before the
anticipated losses are actually sustained or
realized. Evidently, actual losses need not
setinpriortoretrenchment.(CajucomVIIv.
TP Phils Cement Corp., et al, G.R. No.
149090,Feb.11,2005)
5. Closing or cessation of operation of the

establishment or undertaking must be
done in good faith and not for the
purpose of circumventing pertinent labor
laws.
6. Disease must be incurable within 6

monthsandthecontinuedemploymentis
prohibited by law or prejudicial to his
health as well as to the health of his co
Ees with a certification from the public
healthofficerthatthediseaseisincurable
within 6 months despite due to
medicationandtreatment
Q:Whatareotherauthorizedcauses?
A:
1. TotalandpermanentdisabilityofEe
2. Validapplicationofunionsecurityclause
3. Expiration of period in term of
employment
4. Completion of project in project
employment
5. Failureinprobation
6. Relocationofbusinesstoadistantplace
7. Defianceofreturntoworkorder
8. CommissionofIllegalactsinstrike
9. Violationofcontractualagreement
10. Retirement
Q: What are the procedural steps required in

termination of an employee for authorized
causes?
A:
1. Written Notice to DOLE 30 days prior to
theintendeddayoftermination.
Purpose: To enable it to ascertain the
verityofthecauseoftermination.
2. Written notice to Ee concerned 30 days

priortheintendeddateoftermination.
3. Payment of separation pay Serious

businesslossesdonotexcusetheErfrom
complying with the clearance or report
required in Art. 283 of the LC and its IRR
beforeterminatingtheemploymentofits
workers. In the absence of justifying
circumstances, the failure of the Er to
observe the procedural reqts under Art.
284 taints their actuations with bad faith
if the layoff was temporary but then
serious business losses prevented the
reinstatement of respondents, the Ers
should have complied with the reqts of
writtennotice.
Redundancy
Q:Whataretherequisitesofavalidredundancy?
A:
1. Written notice served on both the
employees (Ees) and the DOLE at least 1
monthpriortoseparationfromwork
2. Payment of separation pay equivalent to
at least 1 month pay or at least 1 month
payforeveryyearofservice,whicheveris
higher
3. Good faith in abolishing redundant
position
4. Fair and reasonable criteria in
ascertaining what positions are to be
declaredredundant:
a. Lesspreferredstatus,e.g.temporary
Ee
b. Efficiencyand
c. Seniority
Q:Ong,aSalesManagerofWiltshireFileCo.,Inc.,
was informed of the termination of his
employment due to redundancy upon returning
from a trip abroad. Ong maintains that there can
be no redundancy since he was the only person
occupyinghispositioninthecompany.
IsthereredundancyeventhoughOngwastheonly
oneoccupyinghisposition.
A: Redundancy in an employers (Ers) personnel
does not necessarily or even ordinarily refer to
duplication of work. The characterization ofOngs
services as no longer necessary or sustainable and
therefore properly terminable, was an exercise of
business judgment on the part of Wiltshire.


LABORLAWTEAM:
86
Furthermore, a position is redundant where it is
superfluous, and superfluity of a position or
positions may be the outcome of a number of
factors, such as over hiring of workers, decreased
volume of business, or dropping of a particular
product line or service activity previously
manufacturedorundertakenbytheenterprise.The
Erhasnolegalobligationtokeepinitspayrollmore
employees that are necessary for the operation of
itsbusiness.(WiltshireFileCo.,Inc.v.NLRC,G.R.No.
82249,Feb.7,1991)
Retrenchment
Q: What are the circumstances that must be
presentforavalidretrenchment?
A:
1. The losses expected should be substantial
and not merely de minimis in extent If
the loss purportedly sought to be
forestalled by retrenchment is clearly
shown to be insubstantial and
inconsequential in character, the bona
fide nature of the retrenchment would
appeartobeseriouslyinquestion.
2. Thesubstantiallossapprehendedmustbe
reasonablyimminentassuchimminence
can be perceived objectively and in good
faith by the employer (Er). There should
be a certain degree of urgency for the
retrenchment.
3. Itmustbereasonablynecessaryandlikely
to prevent the expected losse The Er
should have taken other measures prior
or parallel to retrenchment to forestall
losses such as cutting other costs than
laborcosts.
4. The alleged losses if already realized, and

the expected imminent losses sought to
be forestalled, must be proved by
sufficient and convincing evidence The
reason for requiring this quantum of
proof is readily apparent: any less
exacting standard of proof would render
too easy the abuse of this ground for
termination of services of employees.
(Lopez Sugar Corp. v. Federation of Free
Workers, G.R. No. 7570001, Aug. 30,
1990)
Note: The losses which the company may suffer or is

suffering may be proved by financial statements
audited by independent auditors (Asian Alcohol
Corporationv.NLRC,G.R.No.131108,Mar.25,1999)
Retrenchmentisameansoflastresort.
Q: What are the requisites of a valid

retrenchment?
A:
1. WrittennoticeservedonboththeEeand
the DOLE at least 1 month prior to the
intendeddateofretrenchment
at least one month pay or at least 1/2
month pay for every year of service,
whicheverishigher
3. Goodfaith
4. Proofofexpectedoractuallosses
5. The employer used fair and reasonable
criteria in ascertaining who would be
retained among the Ees, such as status,
efficiency, seniority, physical fitness, age,
and financial hardship of certain workers
(Asian Alcohol Corp. v. NLRC, G.R. No.
131108,Mar.25,1999).
Q: What are the criteria in selecting employees

(Ees)toberetrenched?
A: There must be fair and reasonable criteria to be
usedinselectingEestobedismissedsuchas:
1. Lesspreferredstatus;
2. Efficiencyrating;
3. Seniority. (Phil. Tuberculosis Society, Inc.
v.NationalLaborUnion,G.R.No.115414,
Aug.25,1998)
Q:Whatisthelastinfirstout(LIFO)rule?
A: It applies in the termination of employment in

the line of work. What is contemplated in the LIFO
rule is that when there are two or more Ees
occupying the same position in the company
affectedbytheretrenchmentprogram,thelastone
employed will necessarily be the first one to go.
(Maya Farms Ees Organization v. NLRC, G.R. No.
106256,Dec.28,1994)
Q: Is the seniority rule or "last in first out"

policy to be strictly followed in effecting a
retrenchmentorredundancyprogram?
A: Again, in Asian Alcohol Corp., the SC stated
that with regard the policy of "first in, last out"
in choosing which positions to declare as
redundantorwhomtoretrenchtopreventfurther
business losses, there is no law that mandates
suchapolicy.Thereasonissimpleenough.Ahost
of relevant factors come into play in determining
cost efficient measures and in choosing the Ees
who will be retained or separated to save the

87
companyfrom closingshop. In
determining these issues, management plays a
preeminentrole.Thecharacterizationofpositions
as redundant is an exercise of business judgment
on the part of the Er. It will be upheld as long
as it passes the test of arbitrariness. (2001 Bar
Question)
Q: What is the difference between redundancy
andretrenchment?
A: In redundancy, company has no financial
problems, unlike in retrenchment where the
companywillsufferfinanciallosses.
Q: Philippine Tuberculosis Society, Inc. retrenched
116 Ees after incurring deficits amounting to 9.1
million pesos. Aside for retrenching some of its
Ees, the company also implemented cost cutting
measurestopreventsuchlossesforincreasingand
minimizing it. The NLRC ruled that the
retrenchmentwasnotvalidonthegroundthatthe
Societydidnottakeseniorityintoaccountintheir
selection. Was the retrenchment done by the
Society not valid for its failure to follow the
criterialaiddownbylaw?
A: No. The Society terminated the employment of
several workers who have worked with the Society
forgreatnumberofyearswithoutconsiderationfor
the number of years of service and their seniority
indicates that they had been retained for such a
longtimebecauseofloyalandefficientservice.The
burden of proving the contrary rest on the Society.
(Phil. Tuberculosis Society, Inc. v. National Labor
Union,G.R.No.115414,Aug.25,1998)
Q: Due to mounting losses the former owners of
Asian Alcohol Corporation sold its stake in the
companytoPriorHoldings.Upontakingcontrolof
thecompanyandtopreventlosses,PriorHoldings
implementedareorganizationplanandothercost
saving measures and one of them is the
retrenchment of 117 employees (Ees) of which
some are members of the union and the majority
held by nonunion members. Some retrenched
workers filed a complaint for illegal dismissal
alleging that the retrenchment was a subterfuge
forunionbustingactivities.
Was the retrenchment made by Asian Alcohol
validandjustified?
A: Yes. Even though the bulk of the losses were
sufferedundertheoldmanagementandcontinued
only under the new management ultimately the
newmanagementofPriorHoldingswillabsorbsuch
losses. The law gives the new management every
right to undertake measures to save the company
frombankruptcy.(AsianAlcoholCorp.v.NLRC,G.R.
No.131108,Mar.25,1999)
Closure
Q:Whataretherequisitesofavalidclosure?
A:
1. Written notice served on both the
employees (Ees) and the DOLE at least 1
month prior to the intended date of
closure
at least one month pay or at least 1/2
month pay for every year of service,
whichever is higher, except when closure
isduetoseriousbusinesslosses
3. Goodfaith
4. Nocircumventionofthelaw
5. NootheroptionavailabletotheEr
Q: What is the test for the validity of closure or

cessationofestablishmentorundertaking?
A: The ultimate test of the validity of closure or

cessation of establishment or undertaking is that it
must be bona fide in character. And the burden of
proving such falls upon the Er. (Capitol Medical
Center, Inc. vs. Dr. Meris, G.R. No. 155098, Sep. 16,
2005,J.CarpioMorales)
Q: When is separation pay required in case of

closure?
A:Onlywhereclosureisnotduetoseriousbusiness
losses nor due to an act of govt. (North Davao
Mining Corp v. NLRC, G.R. No. 112546, Mar. 13,
1996;NFLv.NLRC,G.R.No.127718,Mar.2,2000)
Q: Galaxie Steel Corp. decided to close down

becauseofseriousbusinessloses.Itfiledawritten
notice with the DOLE informing its intended
closureandtheterminationofitsemployees(Ees).
It posted the notice of closure on the corporate
bulletinboard.
Q: Does the written notice posted by Galaxie on

the bulletin board sufficiently comply with the
noticereqtunderArt.283oftheLC?
A: No.In orderto meet the purpose,service ofthe

writtennoticemustbemadeindividuallyuponeach
and every Ee of the company. However, the Court
held that where the dismissal is for an authorized
cause, noncompliance with statutory due process
should not nullify the dismissal, or render it illegal,
orineffectual.Still,theemployershouldindemnify
the Ee, in the form of nominal damages, for the
violation of his right to statutory due process.


LABORLAWTEAM:
88
(Galaxie Steel Workers Union v. NLRC, G.R. No.
165757,Oct.17,2006)
AreEesentitledtoseparationpay?
A: No. Galaxie had been experiencing serious

financial losses at the time it closed business
operations. Art. 283 of the LC governs the grant of
separationbenefits"incaseofclosuresorcessation
of operation" of business establishments "not due
to serious business losses or financial reverses."
Where, the closure then is due to serious business
losses,theLCdoesnotimposeanyobligationupon
the employer to pay separation benefits. (Galaxie
Steel Workers Unin v. NLRC, G.R. No. 165757, Oct.
17,2006)
Q: Rankandfile workers of SIMEX filed a petition

fordirectcertificationandaffiliatedwithUnionof
FilipinoWorkers(UFW).Subsequently,36workers
of the companys lumpia dept and 16 other
workersfromotherdeptswereeffectivelylocked
out when their working areas were cleaned out.
The workers through UFW filed a complaint for
unfairlaborpracticesagainstthecompany.SIMEX
then filed a notice of permanent shutdown/total
closure of all units of operation in the
establishment with the DOLE allegedly due to
businessreversesbroughtaboutbytheenormous
rejectionoftheirproductsforexporttotheUnited
States.
Wastheclosurewarrantedbytheallegedbusiness
reverses?
A: The closure of a business establishment is a
ground for the termination of the services of any
employee unless the closing is for the purpose of
circumventing the provisions of the law. But, while
business reverses can be a just cause for
terminating employees, they must be sufficiently
proved.Inthiscase,theauditedfinancialstatement
ofSIMEXclearlyindicatesthattheyactuallyderived
earnings.Althoughtherejectionsmayhavereduced
theirearningstheywerenotsufferinglosses.There
is no question that an employer may reduce its
workforcetopreventlossesbutitmustbeserious,
actual and real otherwise this ground for
termination would be susceptible to abuse by
scheming employers who might be merely feigning
business losses or reverses in their business
ventures to ease out employees. (Union of Filipino
Workersv.NLRC,G.R.No.90519,Mar.23,1992)
Q: Carmelcraft Corporation closed it business
operations allegedly due to losses of P1, 603.88
aftertheCarmelcraftEesUnionfiledapetitionfor
certification election. Carmelcraft Union filed a
complaint for illegal lockout and ULP with
damages and claim for employment benefits.
Were the losses incurred by the company enough
tojustifyclosureofitsoperations?
A: The determination to cease operations is a
prerogative of management that is usually not
interfered with by the State as no business can be
required to continue operating at a loss simply to
maintain the workers in employment. That would
be a taking of property without due process oflaw
whichtheemployerhasarighttoresist.Butwhere
itismanifestthattheclosureismotivatednotbya
desiretoavoidfurtherlossesbuttodiscouragethe
workers from organizing themselves into a union
for more effective negotiations with management,
the State is bound to intervene. The losses of less
than P2,000 for a corporation capitalized at P3
millioncannotbeconsideredseriousenoughtocall
for the closure of the company. (Carmelcraft Corp.
v.NLRC,G.R.No.9063435,June6,1990)
Q: Is the transferee of the closed corporation
required to absorb theemployees (Ees) of the old
corporation?
A:
GR:Thereisnolawrequiringabonafidepurchaser
of assets of an ongoing concern to absorb in its
employ the Ees of the latter except when the
transaction between the parties is colored or
clothedwithbadfaith(BF).(SundownerDevtCorp.
v.Drilon,G.R.No.82341,Dec.6,1989)
XPNs:
1. Where the transferee was found to be
merely an alter ego of the different
mergingfirms.(FilipinasPortServices,Inc.
v.NLRC,G.R.No.97237,Aug.16,1991)
2. Where the transferee voluntarily agrees
to do so. (Marina Port Services, Inc. v.
Iniego,G.R.No.77853,Jan.22,1990)
Q:MarikinaDairyIndustries,Inc.decidedtosellits
assets and close operations on the ground of
heavylosses.Theunionsallegedthatthefinancial
losses were imaginary and the dissolution was a
schememaliciouslydesignedtoevadeitslegaland
social obligations to its employees (Ees). The
unionswantthebuyersofthecorporationsassets
restrained to operate unless the members of the
unions were the ones hired to operate the plant
under the terms and conditions specified in the
collectivebargainingagreements.
Is the buyer of a companys assets required to
absorbtheEesoftheseller?
A:Thereisnolawrequiringthatthepurchaserofa
companys assets should absorb its Ees and the

89
most that can be done for reasons of public policy
and social justice was to direct that buyers of such
assetstogivepreferencetothequalifiedseparated
Ees in the filling up of vacancies in the facilities of
the buyer. (MDII Supervisors & Confidential Ees
Assn(FFW)v.residentialAssistantonLegalAffairs,
G.R.Nos.L4542123,Sep.9,1977)
Q: What is the difference between closure and
retrenchment?
A:
CLOSURE RETRENCHMENT
Is the reversal of
fortune of the Er
whereby there is a
complete cessation of
business operations to
preventfurtherfinancial
drain upon an Er who
cannot pay anymore his
Ees since business has
alreadystopped.
Is the reduction of
personnel for the purpose
ofcuttingdownoncostsof
operations in terms of
salaries and wages
resorted to by an Er
because of losses in
operation of a business
occasionedbylackofwork
andconsiderablereduction
inthevolumeofbusiness.
One of the prerogatives
of management is the
decision to close the
entire establishment or
to close or abolish a
department or section
thereof for economic
reasons, such as to
minimize expenses and
reducecapitalization.
As in the case of
retrenchment, however,
for the closure of a
business or a department
due to serious business
lossestoberegardedasan
authorized cause for
terminatingEes,itmustbe
proven that the losses
incurred are substantial
and actual or reasonably
imminent; that the same
increasedthroughaperiod
of time; and that the
condition of the company
is not likely to improve in
thenearfuture.
DoesnotobligatetheEr
for the payment of
separation package if
there is closure of
business due to serious
losses.
LC provides for the
payment of separation
package in case of
retrenchment to prevent
losses.
Disease
Q:Whenisdiseaseagroundfordismissal?
A:WheretheEesuffersfromadisease,and:
1. His continued employment is prohibited
by law or prejudicial to his health or to
the health of his coEes. (Sec.8, Rule I,
BookVI,IRR)
2. With a certification by competent public
health authority that the disease is
incurable within 6 months despite due
medication and treatment. (Solis v. NLRC,
GRNo.116175,Oct.28,1996)
Note:Thereqtforamedicalcertificationcannot
be dispensed with; otherwise, it would sanction
the unilateral and arbitrary determination by the
Er of the gravity or extent of the Ees illness and
thusdefeatthepublicpolicyontheprotectionof
labor.(ManlyExpressvPayong,G.R.No.167462,
Oct.25,2005)
Termination of services for health reasons must

beeffectedonlyuponcompliancewiththeabove
requisites. The reqt for a medical certificate
under Art. 284 of the LC cannot be dispensed
with; otherwise, it would sanction the unilateral
and arbitrary determination by the Er of the
gravity or extent of the Ees illness and thus
defeat the public policy on the protection of
labor. (Sy et. al v. CA, G.R. No. 142293, Feb. 27,
2003)
Q: What is the procedure in terminating an

employee(Ee)onthegroundofdisease?
A:
1. The employer (Er) shall not terminate his
employmentunless:
a. There is a certification by a
competentpublichealthauthority
b. That the disease is of such nature or
at such a stage that it cannot be
cured within a period of 6 months
evenwithpropermedicaltreatment.
2. If the disease or ailment can be cured

within the period, the Er shall not
terminate the Ee but shall ask the Ee to
takealeave.TheErshallreinstatesuchEe
to his former position immediately upon
therestorationofhisnormalhealth.(Sec.
8,RuleI,BookVI,IRR)
Q:Isanemployeesufferingfromadiseaseentitled
toreinstatement?
A: Yes, provided he presents a certification by a

competent public health authority that he is fit to
return to work. (Cebu Royal Plant v. Deputy
Minister,G.R.No.L58639,Aug.12,1987)
Q: Is the requirements of a medical certificate

mandatory?
A: Yes, it is only where there is a prior certification

fromacompetentpublicauthoritythatthedisease


LABORLAWTEAM:
90
afflictingtheemployeesoughttobedismissedisof
suchnatureoratsuchstagethatitcannotbecured
within 6 months even with proper medical
treatment that the latter could be validly
terminated from his job. (Tan v. NLRC, G. R. No.
116807,April14,1997)
Note: Termination from work on the sole basis of
actual perceived or suspected HIV status is deemed
unlawful.(Sec.35,R.A.8504HIV/AIDSLaw)
Q: Anna Ferrer has been working as
bookkeeperatGreatFoods,Inc.,whichoperatesa
chain of highend restaurants throughout the
country, since 1970 when it was still a small
eatery at Binondo. In the early part of the year
2003, Anna, who was already 50 years old,
reported for work after a weeklong vacation in
herprovince.ItwastheheightoftheSARSscare,
andmanagementlearnedthatthefirstconfirmed
SARSdeathcaseinthePhils,abalikbayannurse
from Canada, is a townmate of Anna.
Immediately, a memorandum was issued by
managementterminatingtheservicesofAnnaon
the ground that she is a probable carrier of SARS
virus and that her continued employment is
prejudicial to the health of her coEes. Is the
actiontakenbytheemployer(Er)justified?
A: The Ers act of terminating the employment of
Anna is not justified. There is no showing that said
employeeissickwithSARS,orthatsheassociatedor
had contact with the deceased nurse. They are
merely town mates. Furthermore, there is no
certification by a competent public health authority
that the disease is of such a nature or such a stage
that it cannotbecuredwithinaperiodof6months
evenwithpropermedicaltreatment.(Implementing
Rules, Book VI, Rule 1, Sec. 8, LC) (2004 Bar
Question)
Q:Discusstherulesonseparationpaywithregard
toeachcauseoftermination.
A:
CAUSEOF
TERMINATION
SEPARATIONPAY
Automation
Equivalenttoatleast1month
pay or at least 1 month pay
for every year of service,
whicheverishigher
Redundancy
whicheverishigher
Retrenchment
Equivalent to 1 month pay or
at least month pay for
everyyearorservice
Closures or cessation
of operation not due
to serious
business
losses/financial
reverses
for every year of service (if
duetoseverefinanciallosses,
noseparationpay
Disease
pay or at least month pay
whicheverishigher
Note: A fraction of at least 6 months shall be

considered1wholeyear.
There is no separation pay when the closure is due to

anactofthegovt.
Q: What is the purpose of the 2 notices served to

theEeandDOLE1monthpriortotermination?
A:
1. To give the Ees some time to prepare for
the eventual loss of their jobs and their
corresponding income, look for other
employment and ease the impact of the
lossoftheirjobs.
2. TogiveDOLEtheopportunitytoascertain
the verity of the alleged cause of
termination. (Phil. Telegraph & Telephone
Corp. v. NLRC, G.R. No. 147002, April 15,
2005)
Note:NoticetoboththeEesconcernedandtheDOLE
aremandatoryandmustbewrittenandgivenatleast
1 month before the intended date of retrenchment
and the fact that the Ees were already on temporary
layoff at the time notice should have been given to
them is not an excuse to forego the 1month written
notice. (Sebuguero v. NLRC, G.R. No.115394, Sep. 27,
1995)
Q: DAP Corp. ceased its operation due to the
terminationofitsdistributionagreementwithIntl
Distributors Corp. which resulted in its need to
ceaseitsbusinessoperationsandtoterminatethe
employment of its Ees. Marcial et al. filed a
complaint for illegal dismissal and for failure to
give the Ees written notices regarding the
termination of their employment. On the other
hand, DAP claims that their Ees actually knew of
the termination therefore the written notices
were no longer required. Are written notices
dispensed with when the Ees have actual
knowledgeoftheredundancy?
A: The Ees actual knowledge of the termination of
a companys distributorship agreement with
another company is not sufficient to replace the
formal and written notice required by law. In the

91
written notice, the Ees are informed of the specific
date of the termination, at least a month prior to
the date of effectivity, to give them sufficient time
to make necessary arrangements. In this case,
notwithstanding the Ees knowledge of the
cancellation of the distributorship agreement, they
remained uncertain about the status of their
employment when DAP failed to formally inform
them about theredundancy. (DAP Corp. v.CA, G.R.
No.165811,Dec.14,2005)
b.Proceduraldueprocess
Q: What are the 2fold requirements of a valid
dismissalforajustcause?
A:
1. Substantiveitmustbeforajustcause
2. Procedural there must be notice and
hearing
Q: What is the process to be observed by the

employer (Er) for termination of the employment
basedonanyofthejustcausesfortermination?
A:
1. A written notice should be served to the
Ee specifying the ground/s for
termination and giving the said Ee
reasonableopportunitytoexplain.
Note: This first written notice must apprise

the Ee that his termination is being
considered due to the acts stated in the
notice. (Phil. Pizza Inc. v. Bungabong, G.R.
No.154315,May9,2005)
2. A hearing or conference should be held

during which the Ee concerned, with the
assistanceofcounsel,iftheEesodesires,
isgiventheopportunitytorespondtothe
charge, present his evidence and present
theevidencepresentedagainsthim.
3. A written notice of termination If

termination is the decision of the Er, it
shouldbeservedontheEeindicatingthat
upon due considerations of all the
circumstance, grounds have been
established to justify his termination, at
leastonemonthpriortohistermination.
Note:Singlenoticeofterminationdoesnot
comply with the requirements of the law.
(Aldeguer & Co., Inc. vs. Honeyline Tomboc,
G.R.No.147633,July28,2008)
Q:Whatisthepurposeofnoticeandhearing?
A:
1. The reqt of notice is intended to inform
the Ee concerned of the Ers intent to
dismiss him and the reason for the
proposeddismissal
2. On the otherhand the reqt of hearing
affords the Ee the opportunity to answer
his Ers charges against him and
accordingly to defend himself there from
before dismissal is effected. (Salaw v.
NLRCG.R.No.90786Sep.27,1991)
Note:Failuretocomplywiththereqtofthe
2 notices makes the dismissal illegal. The
procedure is mandatory. (Loadstar Shipping
Co.Inc.v.Mesano,G.R.No.138956,Aug.7,
2003)
Q: While it may be true that the Er enjoys wider

latitude of discretion in terminating employees
(Ees) should there exists valid and just cause,
would this be sufficient for the Er to depart from
givingtheEetherighttobeheard?
A: Art. 277(b) of the LC mandates that an Er who
seekstodismissanEemustaffordthelatterample
opportunitytobeheardandtodefendhimselfwith
theassistanceofhisrepresentativeifhesodesires.
Expounding on this provision, the SC held that
ample opportunity connotes every kind of
assistance that management must accord the Ee to
enable him to prepare adequately for his defense
including legal representation. (UBIX Corp. vs.
Bravo,G.R.No.177647,Oct.31,2008)
Q: What is included in the opportunity to be
heard?
A:The issue was addressed in an en banc decision
rendered by the Supreme Court. With a 141 vote
the Court through Chief Justice Corona held as
follows:
a) Ample opportunity to be heard in an
employee dismissal case means any
meaningful opportunity (verbal or
written)giventotheemployeetoanswer
thechargesagainsthimorherandsubmit
evidence in support of the defences,
whetherinahearing,conferenceorsome
otherfair,justandreasonableway.
b) A formal hearing or conference becomes
mandatory only when requested by the
employee in writing or substantial
evidentiary disputes exist or a company
rule or practice requires it, or when
similarcircumstancejustifyit.
c) The ample opportunity to be heard
standard in the Labor Code prevails over
the hearing or conference requirement


LABORLAWTEAM:
92
in the implementing rules and
regulations. (Perez v. PT&T, G.R. No.
152048,Apr.7,2009)
Q:Whohastheburdenofproof?
A:Theburdenofproofrestsupontheemployerto
showthatthedismissaloftheemployeeisforajust
cause,andfailuretodosowouldnecessarilymean
that the dismissal is not justified, consonant with
theconstitutionalguaranteeofsecurityoftenure.
Note: Due process refers to the process to be
followed; burden of proof refers to the amount of
prooftobeadduced.
Inmoneyclaims,theburdenofproofastotheamount
to be paid the Ees rests upon the Er since he is in
custodyofdocumentsthatwouldbeabletoprovethe
amountdue,suchasthepayroll.
Q:Whatisthedegreeofproof?
A: In administrative or quasijudicial proceedings,

substantial evidence is considered sufficient in
determining the legality of an employers dismissal
of an employee. (Pangasinan III Electric
Cooperative, Inc. v. NLRC, G.R. No. 89878, Nov. 13,
1992)
Q:PerezandDoriawereemployedbyPT&T.After
investigation, Perez and Doria were placed on
preventivesuspensionfor30daysfortheiralleged
involvement in anomalous transactions in the
shipping section. PT&T dismissed Perez and Doria
from service for falsifyingdocuments. They filed a
complaint for illegal suspension and illegal
dismissal. The LA found that the 30day extension
of suspension and the subsequent dismissal were
bothillegal.TheNLRCreversedtheLAsdecision,it
ruledthatPerezandDoriaweredismissedforjust
cause, that they were accorded due process and
thattheywereillegallysuspendedforonly15days
(without stating the reason for the reduction of
the period of petitioners illegal suspension). On
appeal, CA held that they were dismissed without
due process. Whether petitioners were illegally
dismissed?
A: Yes. The Er must establish that the dismissal is
for cause in view of the security of tenure that Ees
enjoy under the Constitution and the LC. PT&T
failedtodischargethisburden.PT&Tsillegalactof
dismissingPerezandDoriawasaggravatedbytheir
failure to observe due process. To meet the reqts
ofdueprocessinthedismissalofanEe,anErmust
furnish the worker with 2 written notices: (1) a
written notice specifying the grounds for
termination and giving to said Ee a reasonable
opportunity to explain his side and (2) another
written notice indicating that, upon due
consideration of all circumstances, grounds have
been established to justify the Er's decision to
dismisstheEe.
There is however, no need for a hearing or
conference. To be heard does not mean verbal
argumentation alone inasmuch as one may be
heard just as effectively through written
explanations, submissions or pleadings. In other
words, the existence of an actual, formal trial
typehearing,althoughpreferred,isnotabsolutely
necessary to satisfy the employees right to be
heard. (Perez. v. Phil. Telegraph and Telephone
Company,G.R.No.152048,April7,2009)
Q: What are the guidelines in determining
whetherpenaltyimposedonEeisproper?
A:
1. Gravityoftheoffense
2. PositionoccupiedbytheEe
3. Degreeofdamagetotheemployer(Er)
4. Previousinfractionsofthesameoffense
5. Lengthofservice(ALUTUCPv.NLRC,G.R.
No. 120450, Feb. 10, 1999; PAL v. PALEA,
G.R.No.L24626,June28,1974)
Q: Felizardo was dismissed from Republic Flour

MillsSelectaicecreamCorporationfordishonesty
and theft of company property for bringing out a
pair of boots, 1 piece aluminum container and 15
pieces of hamburger patties. Is the penalty of
dismissal commensurate with the offense
committed?
A: There is no question that the employer has the
inherent right to discipline its Ees which includes
therighttodismiss.Howeverthisrightissubjectto
thepolicepoweroftheState.InthiscasetheCourt
finds that the penalty imposed upon Felizardo was
not commensurate with the offense committed
consideringthevalueofthearticleshepilferedand
thefactthathehadnopreviousderogatoryrecord
during his 2 years of employment in the company.
Moreover,itshouldalsobetakenintoaccountthat
FelizardowasnotamanagerialorconfidentialEein
whomgreatertrustisreposedbymanagementand
from whom greater fidelity to duty is
correspondingly expected. (ALUTUCP v. NLRC, G.R.
No.120450,Feb.10,1999)
(1)AgabonDoctrine
Q:Ifthedismissalisforajustorauthorizedcause
but the requirement of due process of notice and
hearing were not complied with should the
dismissalbeheldillegal?

93
A: No, In Agabon v. NLRC, G.R. No. 158693, Nov.
17,2004,itwasheldthatwhendismissalisforjust
or authorized cause but due process was not
observed,thedismissalshouldbeupheld.
However, the employer (Er) should be held liable

for noncompliance with the procedural reqts of
dueprocess(e.g.damages).TheAgabonrulingwas
modifiedbyJAKAFoodProcessingv.Pacot(G.R.No.
515378,Mar.28,2005)whereitwasheldthat:
1. Ifbasedonjustcause(Art.282)buttheEr
failedtocomplywiththenoticereqt,the
sanction to be imposed upon him should
be tempered because the dismissal
process was, in effect, initiated by an act
imputabletotheEe;and
2. If based on authorized causes (Art. 283)
buttheErfailedtocomplywiththenotice
reqt, the sanction should be stiffer
because the dismissal process was
initiated by Ers exercise of his
managementprerogative.
c.Reliefsforillegaldismissal
(1)Reinstatementaspect
Q: What are the remedies available to an illegally
dismissedemployee(Ee)?
A:AnEewhoisunjustlydismissedfromworkshall
byentitledto:
1. Reinstatement without loss of seniority
rightsand
2. Full backwages. (Sec. 3, Rule I, Book VI,
IRR)
3. Separationpayinlieuofreinstatement,if
thelatterisnolongerfeasible
Q:Whatisreinstatement?
A:Itistherestorationoftheemployeetothestate
from which he has been unjustly removed or
separatedwithoutlossofseniorityrightsandother
privileges.
(a)Immediatelyexecutory:actualreinstatementand
payrollreinstatement
Q:Whataretheformsofreinstatement?
A:
1. Actual or physical the employee (Ee) is
admittedbacktowork
2. PayrolltheEeismerelyreinstatedinthe
payroll
Note: An order of reinstatement by the LA is not the

same as actual reinstatement of a dismissed or
separated Ee. Thus, until the Er continuously fails to
actually implement the reinstatement aspect of the
decision of the LA, their obligation to the illegally
dismissed Ee, insofar as accrued backwages and other
benefits are concerned, continues to accumulate. It is
only when the illegally dismissed Ee receives the
separation pay (in case of strained relations) that it
could be claimed with certainty that the ErEe
realtionship has formally ceased thereby precluding
the possibility of reinstatement. In the meantime, the
illegally dismissed Ees entitlement to backwages, 13
th
month pay, and other benefits subsists. Until the

paymentofseparationpayiscarriedout,theErshould
not be allowed to remain unpunished for the delay, if
not outright refusal, to immediately execute the
reinstatementaspectoftheLAsdecision.
Further, the Er cannot refuse to reinstate the illegally
dismissed Ee by claiming that the latter had already
foundajobelsewhere.Minimumwageearnersareleft
with no choice after they are illegally dismissed from
their employment, but to seek new employment in
ordertoearnadecentliving.Surely,wecouldnotfault
them for their perseverance in looking for and
eventually securing new employment opportunities
instead of remaining idle and waiting the outcome of
the case. (Triad Security & Allied Services, Inc. et al v.
Ortega,G.R.No.160871,Feb.6,2006).
Q:DistinguishArts.223from279oftheLC?
A:
Art.279 Art.223
Presupposes that the
judgment has already
become final and
executory.
Consequently, there is
nothing left to be done
except the execution
thereof.
Maybeavailedofassoon
as the labor arbiter
renders a judgment
declaring that the
dismissal of the Ee is
illegal and ordering said
reinstatement. It may be
availed of even pending
appeal
Note: An award or order for reinstatement is self

executory.Itdoesnotrequiretheissuanceofawritof
execution.(PioneerTexturizingCorp.v.NLRC,G.R.No.
118651,Oct.16,1997)
Q: PAL dismissed Garcia, for violating PALs Code
of Discipline for allegedly sniffing shabu in PALs
Technical Center Toolroom Section. Garcia then
filed for illegal dismissal and damages where the
Labor Arbiter (LA) ordered PAL to immediately
reinstate Garcia. On appeal, the NLRC reversed
the decision and dismissed Garcias complaint for
lack of merit. Garcias motion for reconsideration
wasdeniedbytheNLRC.Itaffirmedthevalidityof
the writ and the notice issued by the LA but
suspended and referred the action to the


LABORLAWTEAM:
94
Rehabilitation Receiver for appropriate action.
WhetherGarciamaycollecttheirwagesduringthe
period between the LAs order of reinstatement
pendingappealandtheNLRCdecisionoverturning
thatoftheLA?
A: Par. 3 of Art. 223 of the LC provides that the
decision of the LA reinstating a dismissed or
separatedEe,insofarasthereinstatementaspectis
concerned, shall immediately be executory,
pendingappeal.
Even if the order of reinstatement of the LA is
reversed on appeal, it is obligatory on the part of
the Er to reinstate and pay the wages of the
dismissed Ee during the period of appeal until
reversal by the higher court. On the other hand, if
theEehasbeenreinstatedduringtheappealperiod
and such reinstatement order is reversed with
finality, the Ee is not required to reimburse
whatever salary he received for he is entitled to
such, more so if he actually rendered services
duringtheperiod.
In other words, a dismissed Ee whose case was
favorably decided by the LA is entitled to receive
wagespendingappealuponreinstatement,whichis
immediatelyexecutory.Unlessthereisarestraining
order,itisministerialupontheLAtoimplementthe
order of reinstatement and it is mandatory on the
Er to comply therewith. (Garcia vs. PAL, G.R. No.
164856,Jan.20,2009)
Q: What is the effect of the reversal of LAs
decisiontothereinstatedemployee(Ee)
A: If the decision of the LA is later reversed on
appeal upon the finding that the ground for
dismissal is valid, then the Er has the right to
require the dismissed Ee on payroll reinstatement
to refund the salaries he/she received while the
case was pending appeal, or it can be deducted
from the accrued benefits that the dismissed Ee
was entitled to receive from the employer under
existing laws, CBA provisions, and company
practices.However,iftheEewasreinstatedtowork
during the pendency of the appeal, then the Ee is
entitled to receive the compensation received for
actual services rendered without need of refund
(Citibank v. NLRC, G.R. No. 14273233, Dec. 4,
2007).
Q: May a court order the reinstatement of a
dismissed employee (Ee) even if the prayer of the
complaintdidnotincludesuchrelief?
A:Yes.SolongasthereisafindingthattheEewas
illegally dismissed, the court can order the
reinstatement of an Ee even if the complaint does
not include a prayer for reinstatement, unless, of
coursetheEehaswaivedhisrighttoreinstatement.
Bylaw,anEewhoisunjustlydismissedisentitledto
reinstatement among others. The mere fact that
the complaint did not pray for reinstatement will
not prejudice the Ee, because technicalities of law
and procedure are frowned upon in labor
proceedings (Pheschem Industrial Corp. v. Moldez,
G.R.No.1161158,May9,2005).
Q: What happens if there is an Order of
Reinstatement but the position is no longer
available?
A: The employee (Ee) should be given a
substantiallyequivalentposition.Ifnosubstantially
equivalent position is available, reinstatement
shouldnotbeorderedbecausethatwouldineffect
compel the employer to do the impossible. In such
a situation, the Ee should merely be given a
separation pay consisting of 1month salary for
every year of service (Grolier Intl Inc. v. ELA, G.R.
No.83523,Aug.31,1989)
(2)Separationpayinlieuofreinstatement
Q:Howcanseparationpaybeviewed?
A: Under present laws and jurisprudence,
separationpaymaybeviewedin4ways:
1. Inlieuofreinstatementinillegaldismissal
cases,whereEeisorderedreinstatedbut
reinstatementisnotfeasible.
2. As Ers statutory obligation in cases of
legal termination due to authorized
causesunderArt.283and284oftheLC.
3. As financial assistance, as an act of social
justice and even in case of legal dismissal
underArt.282oftheLC.
4. AsemploymentbenefitgrantedinCBAor
companypolicy.(Poquiz,2005)
Q: Is an illegally dismissed employee entitled to

reinstatementasamatterofright?
A:GR:Yes.
XPNS: Proceeds from an illegal dismissal

whereinreinstatementisorderedbutcannotbe
carriedoutasinthefollowingcases:
1. Reinstatementcannotbeeffectedinview
ofthelongpassageoftimeorbecauseof
therealitiesofthesituation.
2. It would be inimical to the employers
interest.When reinstatement is no longer
feasible.

95
3. Whenitwillnotservethebestinterestof
thepartiesinvolved.
4. Company will be prejudiced by
reinstatement.
5. Whenitwillnotserveaprudentpurpose.
6. When there is resultant strained relation
(applies to both confidential and
managerialemployees(Ees)only).
7. When the position has been abolished
(applies to both managerial, supervisory
andrankandfileEes).
Note:Insuchcases,itwouldbemoreprudenttoorder
payment of separation pay instead of reinstatement.
(Quijano v. Mercury Drug Corporation, G.R. No.
126561,July8,1998)
Q: Respondents are licensed drivers of public

utility jeepneys owned by Moises Capili. When
Capili assumed ownership and operation of the
jeepneys, the drivers were required to sign
individual contracts of lease of the jeepneys. The
drivers gathered the impression that signing the
contract was a condition precedent before they
could continue driving. The drivers stopped plying
their assigned routes and a week later filed with
the Labor Arbiter a complaint for illegal dismissal
praying not for reinstatement but for separation
pay. Are the respondents entitled to separation
pay?
A:No.Whendriversvoluntarilychosenottoreturn
to work anymore, they must be considered as
having resigned from their employment. The
common denominator of those instances where
payment of separation pay is warranted is that the
employeewasdismissedbytheemployer.(Capiliv.
NLRC,G.R.117378,Mar.26,1997)
Q: Two groups of seasonal workers claimed

separation benefits after the closure of Phil.
Tobacco processing plant in Balintawak and the
transfer of its tobacco operations to Candon,
Ilocos Sur. Phil. Tobacco refused to grant
separation pay to the workers belonging to the
first batch (Lubat group), because they had not
been given work during the preceding year and,
hence, were no longer in itsemploy at the time it
closed its Balintawak plant. Likewise, it claims
exemption from awarding separation pay to the
second batch (Luris group),because the closure of
its plant was due to "serious business losses," as
defined in Art. 283 of the LC. Both labor agencies
heldthattheLurisandLubatgroupswereentitled
to separation pay equivalent to 1/2 month salary
for every of service, provided that the Ee worked
at least 1 month in a given year. Is the separation
pay granted to an illegally dismissed Ee the same
asthatprovidedunderArt.283oftheLCincaseof
retrenchmenttopreventlosses?
A: No. The separation pay awarded to employees

duetoillegaldismissalisdifferentfromtheamount
ofseparationpayprovidedforinArt.283oftheLC.
Prescinding from the above, Phil. Tobacco is liable
for illegal dismissal and should be responsible for
the reinstatement of the Lubat group and the
payment of their backwages. However, since
reinstatementisnolongerpossibleasPhil.Tobacco
have already closed its Balintawak plant, members
of the said group should instead be awarded
normal separation pay (in lieu of reinstatement)
equivalenttoatleastonemonthpay,oronemonth
payforeveryyearofservice,whicheverishigher.It
must be stressed that the separation pay being
awarded to the Lubat group is due to illegal
dismissal; hence, it is different from the amount of
separationpayprovidedforinArticle283incaseof
retrenchmenttopreventlossesorincaseofclosure
or cessation of the Ers business, in either of which
the separation pay is equivalent to at least one (1)
month or onehalf (1/2) month pay for every year
of service, whichever is higher. (Phil. Tobacco Flue
Curing & Redrying Corp. v. NLRC, G.R. No. 127395,
Dec.10,1998)
(a)Strainedrelationrule
Q:Whatisthedoctrineofstrainedrelations?
A: When the Er can no longer trust the Ee andvice
versa, or there were imputations of bad faith to
each other, reinstatement could not effectively
serve as a remedy. This doctrine applies only to
positionswhichrequiretrustandconfidence(Globe
Mackayv.NLRC,G.R.No.82511,March3,1992).
Note: Under the circumstances where the
employment relationship has become so strained to
preclude a harmonious working relationship and that
all hopes at reconciliation are naught after
reinstatement, it would be more beneficial to accord
theEebackwagesandseparationpay.
Q: What must be proven before the principle of

strained relations can be applied to a particular
case?
A:
1. The Ee concerned occupies a position
whereheenjoysthetrustandconfidence
ofhisEr;and
2. That it is likely that if reinstated, an
atmosphere of antipathy and antagonism
may be generated as to adversely affect
the efficiency and productivity of the Ee
concerned. (Globe Mackay Cable & Wire


LABORLAWTEAM:
96
Corp. v. NLRC G.R. No. 82511, Mar. 3,
1992)
Q: Does the doctrine of strained relationship

alwaysbarreinstatementinallcases?
A: No. The doctrine should be applied on a case to

casebasis,basedoneachcasespeculiarconditions
and not universally. Otherwise, reinstatement can
never be possible simply because some hostility is
invariably engendered between the parties as a
result of litigation. That is human nature. (Anscor
Transportv.NLRC,G.R.No.85894,Sept.28,1990)
Besides, no strained relations should arise from a

valid and legal act of asserting one's right;
otherwise an Ee who shall assert his right could be
easilyseparatedfromtheservice,bymerelypaying
his separation pay on the pretext that his
relationship with his employer (Er) had already
become strained. (Globe Mackay Cable & Wire
Corp.v.NLRC,G.R.No.82511,Mar.3,1992)
Q: Differentiate Art. 279 of the LC from Sec. 7 of

R.A.10022.
A:
Art.279,LC(Local
Workers)
Sec.7,RA10022
(MigrantWorkers)
Reinstatement
Fullbackwagesfromthe
timeofhiscompensation
waswithheldfromhim
uptothetimeofhis
actualreinstatement.
FullReimbursementofhis
placementfeewith
interestof12%per
annum.
(3)Backwages
Q:Whatarebackwages?
A: It is the relief given to an employee (Ee) to

compensate him for the lost earnings during the
period of his dismissal. It presupposes illegal
termination.
Note: Entitlement to backwages of the illegally
dismissed Ee flows from law. Even if he does not ask
for it, it may be given. The failure to claim backwages
in the complaint for illegal dismissal is a mere
procedural lapse which cannot defeat a right granted
under substantive law. (St. Michaels Institute v.
Santos,G.R.No.145280,Dec.4,2001)
Q:What is thebasisof awarding backwages to an
illegallydismissedemployee(Ee)?
A: The payment of backwages is generally granted
on the ground of equity. It is a form of relief that
restores the income that was lost by reason of the
unlawfuldismissal;thegrantthereofisintendedto
restoretheearningsthatwouldhaveaccruedtothe
dismissedEeduringtheperiodofdismissaluntilitis
determined that the termination of employment is
for a just cause. It is not private compensation or
damages but is awarded in furtherance and
effectuationofthepublicobjectiveoftheLC.Noris
it a redress of a private right but rather in the
nature of a command to the employer to make
publicreparationfordismissinganEeeitherdueto
the formers unlawful act or bad faith. (Tomas
Claudio Memorial College Inc., v. CA, G.R. No.
152568,Feb.16,2004)
Q: What is the period covered by the payment of
backwages?
A: The backwages shall cover the period from the
dateofdismissaloftheemployeeuptothedateof:
1. Actual reinstatement, or if reinstatement
isnolongerfeasible
2. Finality of judgment awarding backwages
(Buhainv.CA,G.R.143709,July2,2002)
Note: The backwages to be awarded should not be

diminished or reduced by earnings elsewhere during
the period of his illegal dismissal. The reason is that
the Ee while litigating the illegality of his dismissal
must earn a living to support himself and his family.
(Bustamantev.NLRC,G.R.No.111651,Mar.15,1996;
Buenviajev.CA,G.R.No.147806,Nov.2002)
(a)Componentsoftheamountofbackwages
Q: What is included in the computation of

backwages?
A:Theycoverthefollowing:
1. Transportation and emergency
allowances
2. Vacation or service incentive leave and
sickleave
3. 13
th
monthpay
Note: Facilities such as uniforms, shoes, helmets and

ponchosshouldnotbeincludedinthecomputationof
backwagesbecausesaiditemsaregivenforfree,tobe
use only during official tour of duty not for private or
personaluse.
The award of backwages is computed on the basis of

30day month. (JAM Trans Co. v. Flores, G.R. No. L
63555,Mar.19,1993)
Q:Whatdoesthetermfullbackwagesmean?

97
A: TheLaborCodeasamendedbyR.A.6715points
to "full backwages" as meaning exactly that, i.e.,
without deducting from backwages the earnings
derived elsewhere by the concerned Ee during the
periodofhisillegaldismissal.(Buenviajev.CA,G.R.
147806,Nov.12,2002)
The underlying reason for this ruling is that the
employee, while litigating the legality (illegality) of
his dismissal, must still earn a living to support
himselfandfamily,whilefullbackwageshavetobe
paidbytheemployeraspartof thepricehehasto
pay for illegally dismissing his Ee.

(Bustamante v.
NLRC,G.R.No.111651,Mar.15,1996)
Q: Is an Ee entitled to backwages even after the
closureofthebusiness?
A: Yes. The closure of the business rendered the

reinstatement of complainant to her previous
position impossible but she is still entitled to the
paymentofbackwagesuptothedateofdissolution
orclosure.Anemployerfoundguiltyofunfairlabor
practice indismissinghisEemaynotbeorderedto
pay backwages beyond the date of closure of
business where such closure was due to legitimate
business reasons and not merely an attempt to
defeat the order of reinstatement. (Pizza Inn v.
NLRC,G.R.No.74531,June28,1988)
Q:Whatarethecircumstancesthatpreventaward
ofbackwages?
A:
1. Dismissalforcause
2. Death, physical or mental incapacity of
theemployee
3. Businessreverses
4. Detentioninprison
(4)ConstructiveDismissal
Q:Whatisconstructivedismissal?
A:Aninvoluntaryresignationresortedtowhen:
1. continued employment becomes
impossible,unreasonable,orunlikely
2. there is a demotion in rank or diminution
inpayor
3. clear discrimination, insensibility or
disdain by an Er becomes unbearable to
the Ee. (Leonardo v. NLRC, G.R.
No.125303,June16,2000)
Note: There isno formaldismissal. The Eeis placedin
a situation by the Er such that his continued
employmenthasbecomeunbearable.Abandonmentis
incompatiblewithconstructivedismissal.
Q: Reynaldo was hired by Geminilou Trucking
Service (GTS) as a truck driver to haul and deliver
products of San Miguel Pure Foods Company, Inc.
HewaspaidP400pertripandmade4tripsaday.
HeclaimedthathewasrequestedbyGTStosigna
contract entitled Kasunduan Sa PagUpa ng
Serbisyo which he refused as he found it to alter
hisstatusasaregularEetomerelycontractual.He
averred that on account of his refusal to sign the
Kasunduan, his services were terminated
promptinghimtofileacomplaintbeforetheNLRC
for constructive dismissal against the GTS. Would
Reynaldos refusal to sign the Kasunduan
adequatelysupporthisallegationofconstructively
dismissal?
A:No.Thetestofconstructivedismissaliswhether
a reasonable person in the employees (Ee's)
position would have felt compelled to give up his
job under the circumstances. In the present case,
the records show that the lone piece of evidence
submitted by Reynaldo to substantiate his claim of
constructive dismissal is an unsigned copy of the
Kasunduan. This falls way short of the required
quantum of proof which is substantial evidence, or
such relevantevidence as a reasonable mind might
accept as adequate to support a conclusion.
Reynaldo was not dismissed, but that he simply
failedtoreport forworkafteranaltercationwitha
fellow driver. (Madrigalejos vs. Geminilou Trucking
Service,G.R.No.179174,Dec.24,2008)
Q: Flores, a conductor of JAM Transportation Co.,
Inc., had an accident where he had to be
hospitalizedforanumberofdays.Uponreporting
back to the company he was told to wait. For
severaldaysthiscontinuedandhewaspromiseda
route assignment which did not materialize. Upon
speaking to Personnel Manager Medrano, he was
toldthathewillbeacceptedbacktoworkbutasa
newemployee.Floresrejectedtheofferbecauseit
wouldmeanforfeitureofhis18yearsofserviceto
the company. Is the offer for reinstatement as a
newemployee(Ee)aconstructivedismissal?
A: Yes. Flores reemployment as a new Ee would
be very prejudicial to him as it would mean a
demotion in rank and privileges, retirement
benefitsashisprevious18yearsofservicewiththe
company would simply be considered as non
existent.Itamountstoconstructivedismissal.(JAM
Transportation Co., Inc. v. Flores, G.R. No. 82829,
Mar.19,1993)
Q:Quinanolawastransferredfromthepositionof
Executive Secretary to the Executive Vice
President and General Manager to the Production
Dept as Production Secretary. Quinanola rejected
the assignment and filed a complaint for illegal


LABORLAWTEAM:
98
dismissal due to constructive dismissal. Did the
transfer of Quinanola amount to constructive
dismissal?
A: No. Quinanolas transfer was not unreasonable
since it did not involve a demotion in rank nor a
changeinherplaceofworknoradiminutioninpay,
benefits and privileges. It did not constitute a
constructivedismissal.Furthermore,anemployees
security of tenure does not give him a vested right
inhispositionaswoulddeprivethecompanyofits
prerogative to change his assignment or transfer
himwherehewillbemostuseful.(PhilippineJapan
Active Carbon Corp. v. NLRC, G.R. No. 83239, Mar.
8,1989)
Q: Sangil was a utility man/assistant steward of
thepassengercruisevesselCrownodysseyundera
oneyear contract. Sangil suffered head injuries
after an altercation with a Greek member of the
crew. He informed the captain that he no longer
intends to return aboard the vessel for fear that
further trouble may erupt between him and the
otherGreekcrewmembersoftheship.WasSangil
constructivelydismissed?
A:Yes.Thereisconstructivedismissalwheretheact
of a seaman in leaving ship was not voluntary but
was impelled by a legitimate desire for self
preservation or because of fear for his life
Constructive dismissal does not always involve
diminutioninpayorrankbutmaybeinferredfrom
an act of clear discrimination, insensibility or
disdain by an Er may become unbearable on the
part of the Ee that it could foreclose any choice by
him except to forego his continued employment.
(Sunga Ship Management Phils., Inc. v. NLRC, G.R.
No.119080,April14,1998)
(5)PreventiveSuspension
Q:Whatispreventivesuspension?
A: During the pendency of the investigation, the Er
may place the Ee under preventive suspension
leading to termination when there is an imminent
threat or a reasonable possibility of a threat to the
lives and properties of the Er, his family and
representativesaswellastheoffenderscoworkers
bythecontinuedserviceoftheEe.
Q:Whatisthedurationofpreventivesuspension?
A: It should not last for more than 30 days. The Ee
shouldbemadetoresumehisworkafter30days.It
can be extended provided the Ees wages are paid
afterthe30dayperiod.
This period is intended only for the purpose of
investigating the offense to determine whether he
istobedismissedornot.Itisnotapenalty.
Note: The Er may continue the period of preventive
suspensionprovidedthathepaysthesalaryoftheEe.
If more than 1 month, the Ee must actually be
reinstated or reinstated in the payroll. Officers are
liableonlyifdonewithmalice.
Q:CantorandPepitowerepreventivelysuspended
pending application for their dismissal by Manila
Doctors Hospital after being implicated by one
Macatubal when they refused to help him when
he was caught stealing xray films from the
hospital.WasthepreventivesuspensionofCantor
andPepitoproper?
A: Where the continued employment of an Ee
posesaseriousandimminentthreattothelifeand
propertyoftheemployeroronhiscoEes,theEes
preventive suspension is proper. In this case, no
such threat to the life and property of the Er or of
their coEes is present and they were merely
implicated by the Macatubal. (Manila Doctors
Hospitalv.NLRC,G.R.No64897,Feb.28,1985)
(6)Quitclaim
Q:Whatisaquitclaim?
A: It is a document executed by an employee in
favor of the employer preventing the former from
filing any further money claim against the latter
arisingfromemployment.
Q:Whataretheelementsofavalidquitclaim?
A:
1. Voluntarily entered into with full
understanding of what the employee is
doing
2. Representsareasonablesettlement
Q:Whatconstitutesreasonablesettlement?
A: Reasonable settlement requires that the
consideration for the quitclaim is credible and
reasonable.(Periquetv.NLRC,G.R.No.91298,June
22,1990)
Q: Is dire necessity a ground to nullify a
quitclaim?
A: Dire necessity is not an acceptable ground for
annulling the releases, especially since it has not
beenshownthattheemployeeshadbeenforcedto
executethem.Ithasnotevenbeenproventhatthe
considerations for the quitclaims were

99
unconscionably low and that the petitioners had
been tricked into accepting them. Furthermore, no
deception has been established on the part of the
employer that would justify the annulment of the
employees quitclaim. (Veloso v. DOLE, G.R. No.
87297,August5,1991.)
(7)Terminationofemploymentbyemployee
Q:Howcananemployee(Ee)terminatehisservice
withhisemployer(Er)?
A:
1. Without just cause by serving written
notice on the Er at least 1 month in
advance. The Er upon whom no such
notice was served may hold the Ee liable
fordamages.
2. WithjustcauseanEemayputanendto
employment without serving any notice
on the Er for any of the following just
causes:
a. Serious insult by the Er or his
representative on the hour and
personoftheEe
b. Inhuman and unbearable treatment
accorded the Ee by the Er or his
representative
c. Commissionofacrimeoroffenseby
the Er or his representative against
the person of the Ee or any of the
immediatemembersofhisfamily
d. Othercausesanalogoustoanyofthe
foregoing
Q:Whenisemploymentnotdeemedterminated?
A:
1. Bona fide suspension of the operation of
abusinessorundertakingforaperiodnot
exceeding6months,or
2. The fulfillment by the Ee of a military or
civic duty shall not terminate
employment.
Note:Inallsuchcases,theErshallreinstatetheEeto
hisformerpositionwithoutlossofseniorityrightsifhe
indicateshisdesiretoresumehisworknotlaterthan1
month from the resumption of operations of his Er or
fromhisrelieffromthemilitaryorcivicduty.(Art.286)
3.RETIREMENTPAYLAW
a.Coverage,Exclusionsfromcoverage,Components
ofretirementpay
Q:Whatisretirement?
A: It is the result of a bilateral act of the parties, a
voluntary agreement between the employer and
the employees whereby the latter after reaching a
certain age agrees and/or consents to sever his
employment with the former. (Soberano v. Sec. of
Labor, G.R. Nos. L4375356 and L50991, Aug. 29,
1980)
Q:Whatarethekindsofretirementschemes?
A:
1. Compulsoryandcontributoryinnature;
2. One set up by the agreement between
the employer (Er) and employees (Ees) in
the CBA or other agreements between
them (other applicable employment
contract);
3. One that is voluntarily given by the Er,
expressly as announced company policy
or impliedly as in the failure to contest
the Ees claim for retirement benefits.
(Marilyn Odchimar Gertach v. Reuters
Limited, Phils., G.R. No. 148542, Jan. 17,
2005)
Q: Who are covered by the LC provisions on

retirement?
A:
GR:Allemployees(Ees)intheprivatesector:
1. Regardless of their position, designation
orstatus;and
2. Irrespectiveofthemethodbywhichtheir
wages are paid. (Sec.1, Rule II, Book VI,
IRR)
XPN:
1. Ees of the National Govt and its political
subdivisions, including GOCCs (if they are
coveredbytheCivilServiceLaw)
personalserviceofanother
3. Ees of retail, service, and agricultural
establishments or operations employing
notmorethan10Ees(Sec.2,RuleII,Book
VI,IRR)
Q:Whatistheretirementage?
A:Itistheageofretirementthatisspecifiedinthe:
1. CBA;or
2. Employmentcontract;or
3. Retirement plan (Sec. 3, Rule II, Book VI,
IRR).
4. Optional retirement age for underground
mining employees: 5060 years provided
theyhaveatleastservedforaperiodof5
years.(Art.285asamendedbyR.A.8558)


LABORLAWTEAM:
100
Q: What is the retirement age in the absence of a
retirementplanorotherapplicableagreement?
A:
1. Optional60yearsold/5yearsinservice
(includes authorized absences, vacations,
regular holidays, mandatory military or
civicservice)
Note:Theoptiontoretireuponreachingthe
age of 60 years or more but not beyond 65
istheexclusiveprerogativeoftheemployee
(Ee)ifthereisnoprovisiononretirementin
a CBA or any other agreement or if the
employer (Er) has no retirement plan. (R.A.
7641; Capili v. NLRC, G.R. No. 117378, Mar.
26,1997)
2. Compulsory 65 years old, regardless of

yearsofservice(companyisnotboundto
dismissEe;itisautomatic).(Sec.4,RuleII,
BookVI,IRR)
Note: Retirement benefits, where not

mandated by law, may be granted by
agreement of the Ees and their Er or as a
voluntary act on the part of the Er.
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
v.NLRC,G.R.No.87653,Feb.11,1992)
Q: Is compulsory retirement age below 60

allowed?
A: Yes. Art. 287 permits Er and Ee to fix the
applicableretirementageatbelow60.Thesameis
legalandenforceablesolongasthepartiesagreeto
begovernedbysuchCBA.(PantrancoNorthExpress
v.NLRC,G.R.No.95940,July24,1996)
Q: What is the rule for extension of service of
retiree upon his reaching the compulsory
retirementage?
A:Uponthecompulsoryretirementofanemployee
(Ee) or official in the public or private service, his
employment is deemed terminated. The matter of
extension of service of such Ee or official is
addressed to the sound discretion of the Er. (UST
FacultyUnionv.NLRC,G.R.No.89885,Aug.6,1990)
Q:Whatareretirementbenefits?
A: In the absence of an applicable agreement or
retirement plan A retiree is entitled to a
retirement pay equivalent to at least month
salaryforeveryyearofservice,afractionofatleast
6 months being considered as 1 whole year.
(Sec.5.1,RuleII,BookVI,IRR)
Q: What comprises month salary or retirement
pay?
A:Unlesspartiesprovideforbroaderinclusions:
1. 15dayssalarybasedonlatestsalaryrate;
2. Cash equivalent of not more than 5 days
of service incentive leaves (22.5/year of
service)
3. 1/12ofthe13
th
monthpay
4. All other benefits as may be agreedupon
by the employer and employee (Ee).
(Sec.5.2,RuleII,BookVI,IRR)
Note:UnderSec.26ofR.A.No.4670,otherwiseknown
as Magna Carta for Public School Teachers, public
school teachers having fulfilled the age and service
reqts of the applicable retirement laws shall be given
one range salary raise upon the retirement, which
shallbethebasisofthecomputationofthelumpsum
oftheretirementpayandmonthlybenefitthereafter.
Q: Can Art. 287 of the LC (on retirement) as
amendedbyR.A.7641beappliedretroactively?
A:Yes,provided:
1. The claimant for retirement benefits was
still the employee of the employer at the
timethestatutetookeffect;and
2. The claimant was in compliance with the
reqts for eligibility under the statute for
suchretirementbenefits.(PSVSIAv.NLRC,
G.R.No.115019,April14,1997)
Q: Are the provisions of the retirement plan

bindingaspartoftheemploymentcontract?
A: Yes. The retirement plan forms part of the
employmentcontractsinceitismadeknowntothe
Ees and accepted by them, and such plan has an
express provision that the company has the choice
to retire an Ee regardless of age, with 20 years of
service, said policy is within the bounds
contemplated by the LC. Moreover, the manner of
computationofretirementbenefitsdependsonthe
stipulation provided in the company retirement
plan. (Progressive Devt Corporation v. NLRC, G.R.
No.138826,Oct.30,2000)
Q: Rivera was employed as senior manufacturing
pharmacistbyUNILAB.ShelaterbecameDirector
of UNILAB's Manufacturing Division. UNILAB
adopted a comprehensive retirement plan (the
plan or retirement plan) supported by a
retirement fund. A member is compulsorily
retiredupon reaching age 60 or has completed 30

101
years of service, whichever comes first. Rivera
completed 30 years of service and UNILAB retired
herpursuanttothetermsoftheplan,shereceived
the benefits in 88. At Rivera's request, UNILAB
allowedhertocontinueworkingforthecompany.
She continued working beyond the compulsory
separation from service that resulted from her
retirement.From1993to1994,Riveraservedasa
personal consultant under contract for UNILABs
sister companies which assigned Rivera to render
service involving UNILAB.In 1992, the company
amended its retirement plan, providing, among
others, for an increase in retirement benefits.
Rivera asked that her retirement benefits be
increased in accordance with the amended
retirementprogram. Whether Rivera is entitled to
theadditionalretirementbenefitsoftheamended
retirementplan?
A: No. Whether these terms included renewed
coverage in the retirement plan is an evidentiary
gap that could have been conclusively shown by
evidenceofdeductionsofcontributionstotheplan
after1988.Twoindicators,however,tellusthatno
suchcoveragetookplace.Thefirstisthattheterms
of the retirement plan, before and after its 1992
amendment, continued to exclude those who have
rendered 30 years of service or have reached 60
years of age. Therefore, the plan could not have
coveredher.Thesecondistheabsenceofevidence
of, or of any demand for, any reimbursement of
whatRiverawouldhavepaidascontributionstothe
plan had her coverage and deductions continued
after 1988. Thus, the Court concludes that her
renewed service did not have the benefit of any
retirement plan coverage. (Rivera v. United
Laboratories,Inc.,G.R.No.155639,April22,2009)
Q:Isaspecialretirementplandifferentfromthose
contemplatedundertheLCasagreeduponbythe
partiesvalid?
A: Yes. A pilot who retires after 20 years of service

or after flying 20,000 hours would still be in the
prime of his life and at the peak of his career,
comparedtoonewhoretiresattheageof60years
old. Based on this peculiar circumstance that PAL
pilots are in, the parties provided for a special
scheme of retirement different from that
contemplated in the LC. Conversely, the provisions
of Art. 287 of the LC could not have contemplated
thesituationofPAL'spilots.Rather,itwasintended
for those who have no more plans of employment
after retirement, and are thus in need of financial
assistance and reward for the years that they have
rendered service. (PAL v. Airline Pilots Assn of the
Phils.,G.R.No.143686,Jan.15,2002)
Q: In 55, Hilaria was hired as a grade school

teacher at the Sta. Catalina College.In 70, she
applied for and was granted a 1 yr LOA without
pay due to the illness of her mother.After the
expiration in 71 of her LOA, she had not been
heard fromby Sta. Catalina.In the meantime, she
was employed as a teacher at the San Pedro
ParochialSchoolduringSY8081andattheLiceo
deSanPedro,duringSY8182.In82,sheapplied
anewatSta.Catalinawhichhiredher.OnMar22,
97, during the 51
st
Commencement Exercises of
Sta. Catalina, Hilaria was awarded a Plaque of
Appreciation for 30 yrs of service and P12,000 as
gratuity pay. On May 31, 97, Hilaria reached the
compulsory retirement age of 65. Sta. Catalina
pegged her retirement benefits at
P59,038.35.Deducted was the amount of P12,000
representing the gratuity pay which was given to
her.
Should the gratuity pay be deducted from the

retirementbenefits?
A: No. As for the ruling of the CA affirming that of

the NLRC that the P12,000 gratuity pay earlier
awardedtoHilariashouldnotbedeductedfromthe
retirement benefits due her, the same is in order.
Gratuity pay is separate and distinct from
retirement benefits. It is paid purely out of
generosity.
Q: What is the difference between gratuity pay

andretirementbenefits?
A:
GRATUITYPAY RETIREMENTBENEFITS
Itispaidtothe
beneficiaryforthepast
servicesorfavor
renderedpurelyoutof
thegenerosityofthe
giverorgrantor.Itisnot
intendedtopayaworker
foractualservices
renderedorforactual
performance.Itisa
moneybenefitorbounty
giventotheworker,the
purposeofwhichisto
rewardEeswhohave
renderedsatisfactory
servicetothecompany.
Areintendedtohelpthe
Eeenjoytheremaining
yearsofhislife,releasing
himfromtheburdenof
worryingforhisfinancial
support,andareaformof
rewardforhisloyaltyto
theEr.(Sta.Catalina
CollegeandSr.Loreta
Oranza,vs.NLRCand
HilariaTercera,G.R.No.
144483.November19,
2003,J.CarpioMorales)
b.RetirementpayunderRA7641visvisretireent
benefitsunderSSSandGSISlaws
Q: What is retirement pay under the LC in relation
toretirementbenefitsunderSSSandGSISlaws?


102
LABORLAWTEAM:
A:
Social
SecurityLaw
Revised
Government
Service
InsuranceAct
Employees
Compensation
Act
Compulsory
upon all E e s
n o t ov e r 6 0
years of age
andtheirErs.
1.Filipinos
recruited in
the Phils. by
foreign based
Ers for
employment
abroad may be
covered by the
SSS on a
voluntary
basis.
2.
Compulsory
upon all self
employed
persons
earning P1,800
or more per
annum.
Compulsory for
all permanent
Ees below 60
years of age
upon
appointment to
permanent
status, and for
all elective
officials for the
duration of their
tenure.
1. Any person,
whether elected
or appointed, in
the serviceof an
Er is a covered
Ee if he receives
compensation
forsuchservice.
Compulsory upon
all Ers and their
Ees not over 60
years of age;
Provided, that an
Ee who isover 60
years of age and
paying
contributions to
qualify for the
retirement or life
insurance benefit
administered by
the System shall
be subject to
compulsory
coverage.
Note: The Ees Compensation Commission shall ensure

adequate coverage of Filipino Ees employed abroad,
subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS
including the members of the AFP, and any person
employed as casual, emergency, temporary, substitute
or contractual, or any person compulsorily covered by
theSSSarecoveredbytheEesCompensationProgram.
(1997BarQuestion)
MANAGEMENT PREROGATIVE

103
E.MANAGEMENTPREROGATIVE
Q:WhatisManagementPrerogative?
A:
GR: It is the right of an Er to regulate,
according to his own discretion and judgment,
allaspectsofemployment,including:
1. Hiring
2. Workassignments
3. Workingmethods
4. Time,placeandmannerofwork
5. Toolstobeused
6. Processestobefollowed
7. Supervisionofworkers
8. Workingregulations
9. TransferofEes
10. Worksupervision
11. Layoffofworkers
12. Discipline
13. Dismissal
14. Recallofworkers
XPNs:Otherwiselimitedbyspeciallaws.
Note: So long as a companys prerogatives are

exercised in good faith for the advancement of the
Ersinterest and not for the purpose of defeating or
circumventing the rights of the Ees under special laws
or under valid agreements, the Supreme Court will
upholdthem.
Q: 1. An exclusive school for girls, run by a

religious order, has a policy of not employing
unwedmothers,womenwithliveinpartners,and
lesbians. Is the policy violative of any provision of
theLConemploymentofwomen?
2. The same school dismissed 2 female faculty

membersonaccountofpregnancyoutofwedlock.
Did the school violate any provision of the LC on
employmentofwomen?
A:
1. No,thepolicydoesnotviolatetheLC.The
practiceisavalidexerciseofmanagement
function. Considering the nature and
reason for existence of the school, it may
adopt such policy as will advance its
laudable objectives. In fact, the policy
accordswiththeconstitutionalpreceptof
inculcating ethical and moral values in
schools. The school policy does not
discriminate against women solely on
account of sex (Art. 135, LC) nor are the
actsprohibitedunderArt.137oftheLC.
2. No, because to tolerate pregnancy out of

wedlockwill be a blatantcontradiction of
the school's laudable mission which, as
already stated, accords with high
constitutional precepts. This answer does
not contradict the ruling in ChuaQua
wheretheteachermerelyfellinlovewith
a bachelor student and the teacher, also
single, did not get pregnant out of
wedlock.(2000BarQuestion)
Q:LittleHandsGarmentCompany,anunorganized
manufacturer of children's apparel with around
1,000workers,sufferedlossesforthe1stfirsttime
in history when its US and European customers
shiftedtheirhugeorderstoChinaandBangladesh.
ThemanagementinformeditsEesthatitcouldno
longer afford to provide transportation shuttle
services. Consequently, it announced that a
normal fare would be charged depending on the
distance traveled by the workers availing of the
service.
WastheLittleHandsGarmentsCompanywithinits
rights to withdraw this benefit which it had
unilaterallybeenprovidingtoitsEes?
A: Yes, because this is a management prerogative

which is not due any legal or contractual
obligation. The facts of the case do not state the
circumstances through which the shuttle service
may be considered as a benefit that ripened into a
demandable right. There is no showing that the
benefit has been deliberately and consistently
granted, i.e. with the employers full consciousness
that despite itsnot being bound by law or contract
to grant it, it just the same granted the benefit.
(2005BarQuestion)
1.DISCIPLINE
Q:DiscussbrieflytheErsrighttodisciplinehisEes.
A: The Er has the prerogative to instill discipline in

his Ees and to impose reasonable penalties,
including dismissal, on erring Ees pursuant to
company rules and regulations. (San Miguel
Corporationv.NLRC,G.R.No.87277,May12,1989)
Q: Is the power of the Er to discipline his Ees

absolute?
A: No. While management has the prerogative to

discipline its Ees and to impose appropriate
penalties on erring workers, pursuant to company
rules and regulations, however, such management
prerogativesmustbeexercisedingoodfaithforthe
advancement of the Ers interest and not for the
purposeofdefeatingorcircumventingtherightsof
the Ees under special laws and valid agreements.


LABORLAWTEAM:
104
(PLDT vs. Teves, G.R. No. 143511, November 10,
2010)
Q: May the Er be compelled to share with its Ees

the prerogative of formulating a code of
discipline? Is a code of discipline unilaterally
formulatedbytheErenforceable?
A:TheErhastheobligationtosharewithitsEesits
prerogativeofformulatingacodeofdiscipline.This
is in compliance with the States policy stated in
Article 211 of the Labor Code, to ensure the
participation of workers in decision and policy
making processes affecting their rights, duties and
welfare. The exercise of management prerogatives
has, furthermore, never been considered to be
boundless. This obligation is not dispensed with by
a provision in the collective bargaining agreement
recognizing the exclusive right of the Er to make
andenforcecompanyrulesandregulationstocarry
outthefunctionsofmanagementwithouthavingto
discuss the same with the union and much less
obtain the latters conformity thereto. A code of
discipline unilaterally formulated and promulgated
by the Er would be unenforceable. (Philippine
Airlines, Inc. vs. NLRC et al., G.R. No. August 13,
1993.)
2.TRANSFEROFEMPLOYEES
Q: Discuss briefly the Ers right to transfer and

reassignEes.
A:Inthepursuitofitslegitimatebusinessinterests,
especially during adverse business conditions,
management has the prerogative to transfer or
assign Ees from one office or area of operation to
another provided there is no demotion in rank or
diminution of salary, benefits and other privileges
and the action is not motivated by discrimination,
bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is
inherent in the right of Ers to control and manage
theirenterpriseseffectively.
Note: The right of Ees to security of tenure does not

givethemvestedrightstotheirpositionstotheextent
of depriving management of its prerogative to change
their assignments or to transfer them. (Endico v.
Quantum Foods Distribution Center, G.R. No. 161615,
Jan.30,2009)
Q: May the Er exercise his right to transfer an Ee

and compel the latter to accept the same if said
transfer is coupled with or is in the nature of
promotion?
A:No.ThereisnolawthatcompelsanEetoaccept
promotion,asapromotionisinthenatureofagift
or a reward, which a person has a right to refuse.
When an Ee refused to accept his promotion, he
wasexercisinghisrightandcannotbepunishedfor
it.Whileitmaybetruethattherighttotransferor
reassign an Ee is an Ers exclusive right and the
prerogative of management, such right is not
absolute. (Dosch vs. NLRC and Northwest Airlines,
G.R.No.51182,July5,1983)
Q: Who has the burden of proving that the

transferwasreasonable?
A: TheErmustbeabletoshowthatthetransferis
notunreasonable,inconvenientorprejudicialtothe
Ee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other
benefits.ShouldtheErfailtoovercomethisburden
of proof, the Ees transfer shall be tantamount to
constructive dismissal. (Blue Dairy Corporation v.
NLRC,314SCRA401[1999])
3.PRODUCTIVITYSTANDARD
Q:MayanErimposeproductivitystandardsforits
workers?
A: Yes. An Er is entitled to impose productivity

standards for its workers, and in fact, non
compliance may be visited with a penalty even
more severe than demotion. The practice of a
company in laying off workers because they failed
tomaketheworkquotahasbeenrecognizedinthis
jurisdiction. Failure to meet the sales quota
assigned toeach of them constitute a just cause of
their dismissal, regardless of the permanent or
probationarystatusoftheiremployment.Failureto
observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency
may constitute just cause for dismissal. Such
inefficiency is understood to mean failure to attain
work goals or work quotas, either by failing to
complete the same within the allotted reasonable
period, or by producing unsatisfactory results. This
management prerogative of requiring standards
may be availed of so long as they are exercised in
goodfaithfortheadvancementoftheErsinterest.
(Leonardovs.NLRC,G.R.No.125303,June16,2000)
4.GRANTOFBONUS
Q:Whatisabonus?
A:ItisanamountgrantedandpaidtoanEeforhis
industry and loyalty which contributed to the
success of the Ers business and made possible the
realizationofprofits.
Q:Canbonusbedemanded?
MANAGEMENT PREROGATIVE

105
A:
GR: Bonus is not demandable as a matter of
right. It is a management prerogative given in
addition to what is ordinarily received by or
strictly due to recipient. (Producers Bank of the
Phil.v.NLRC,G.R.No.100701,March28,2001)
XPNs:Givenforalongperiodoftime
1. Consistent and deliberate Er continued
giving benefit without any condition
imposedforitspayment
2. Er knew he was not required to give
benefit
3. Nature of benefit is not dependent on
profit
4. Made part of the wage or compensation
agreed and stated in the employment
contract.
Q: The projected bonus for the Ees of Suerte Co.

was 50% of their monthly compensation.
Unfortunately, due to the slump in the business,
the president reduced the bonus to 5% of their
compensation. Can the company unilaterally
reducetheamountofbonus?Explainbriefly.
A: Yes. The granting of a bonus is a management

prerogative, something given in addition to what is
ordinarily received by or strictly due the recipient.
An Er cannot be forced to distribute bonuses when
it can no longer afford to pay. To hold otherwise
would be to penalize the Er for his past generosity.
(Producers Bank of the Phil. v NLRC, G.R. No.
100701,March28,2001).(2002BarQuestion)
5.CHANGEOFWORKINGHOURS
Q: Discuss briefly the Ers right to change working

hours.
A:Wellsettledistherulethatmanagementretains
theprerogative,wheneverexigenciesoftheservice
sorequire,tochangetheworkinghoursofitsEes.
Q: May the normal hours fixed in Article 83 be

reducedbytheEr?Explain.
A: The present article provides that the normal

hours of work of an Ee shall not exceed eight (8)
hoursaday.ThisimpliesthattheEr,intheexercise
of its management prerogatives, may schedule a
work shift consisting of less than eight hours. And
following the principle of a fair days wage for a
fair days labor, the Er isnot obliged to pay anEe,
working for less than eight hours a day, the wages
due for eight hours. Nonetheless, if by voluntary
practice or policy, the Ee for a considerable period
oftimehasbeenpayinghisEeswagesdueforeight
hours work although the work shift less than eight
hours (e.g. seven) it cannot later on increase the
workinghourswithoutanincreaseinthepayofthe
employees affected. An Er is not allowed to
withdraw a benefit which he has voluntarily given.
AnErisnotallowedtowithdrawabenefitwhichhe
hasvoluntarilygiven.
6.MARITALDISCRIMINATION
Q: Is a company policy prohibiting marriage

betweencoworkersvalid?
A: There must be a finding of a bona fide

occupational qualification (BFOQ) to justify an Ers
No Spouse Rule. There must be a compelling
business necessity for which no alternative exists
other than the discriminating practice. (Star Paper
vs.Simbol,G.R.No.164774,April12,2006)
Q: What are the factors that the Er must prove

inordertojustifyBFOQ?
A:TheErmustprove2factors:
1. That the employment qualification is
reasonably related to the essential
operationofthejobinvolved;and
2. That there is a factual basis for believing
that all or substantially all persons
meeting the qualification would be
unable to properly perform the duties of
thejob.(StarPaperetal.vs.Simbol,G.R.
No.164774,April12,2006)
Q: Peds was employed by Glaxo as medical

representativewhohasapolicyagainstEeshaving
relationships against competitors Ees. Peds
marriedJali,aBranchcoordinatorofAstra,Glaxos
competitor.Pedswastransferredtoanotherarea.
Peds did not accept such transfer. Is the policy of
Glaxo valid andreasonableso as to constitute the
actofPedsaswillfuldisobedience?
A: The prohibition against personal or marital

relationships with Ees of competitorscompanies
upon Glaxos Ees is reasonable under the
circumstances because relationships of that nature
might compromise the interest of the company.
Glaxo does not impose an absolute prohibition
against relationships between its Ees and those of
competitor companies.ItsEesarefreetocultivate
relationships with and marry persons of their own
choosing.Whatthecompanymerelyseekstoavoid
is a conflict of interest between the Ee and the
company that may arise out of such relationships.
Furthermore, the prohibition forms part of the
employment contract and Peds was aware of such


106
LABORLAWTEAM:
restrictions when he entered into a relationship

withJali.(DuncanAssociationofDetailmanPTGWO
v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep.
17,2004)
7.POSTEMPLOYMENTBAN
Q: Genesis Fulgencio had been working for

Solidbank Corporation since 1977. He later on
appliedforretirement.SolidbankrequiredGenesis
to sign an undated Undertaking where he
promised that "[he] will not seek employment
with a competitor bank or financial institution
within one (1) year from February 28, 1995, and
that any breach of the Undertaking or the
provisions of the Release, Waiver and Quitclaim
would entitle Solidbank to a cause of action
againsthimbeforetheappropriatecourtsoflaw.
Equitable Banking Corporation (Equitable)
employed Genesis. Is the postretirement
employment ban incorporated in the Undertaking
which Genesis executed upon his retirement is
unreasonable, oppressive, hence, contrary to
publicpolicy?
A: No. There is a distinction between restrictive

covenants barring an Ee to accept a post
employment competitive employment or restraint
ontradeinemploymentcontractsandrestraintson
postretirement competitive employment in
pensionandretirementplanseitherincorporatedin
employment contracts or in collective bargaining
agreements between the Er and the union of Ees,
or separate from said contracts or collective
bargaining agreements which provide that an Ee
who accepts post retirement competitive
employment will forfeit retirement and other
benefits or will be obliged to restitute the same to
theemployer.Thestrongweightofauthorityisthat
forfeitures for engaging in subsequent competitive
employment included in pension and retirement
plans are valid even though unrestricted in time or
geography. A postretirement competitive
employment restriction is designed to protect the
EragainstcompetitionbyformerEewhomayretire
and obtain retirement or pension benefits and, at
thesametime,engageincompetitiveemployment.
(Rivera vs. Solidbank, G.R. No. 163269, April 19,
2006)
8.LIMITATIONSINITSEXERCISE
Q: Is the exercise of management prerogative

unlimited?
A:No.Itiscircumscribedbylimitationsfoundin:
1. Law,
2. CBA,or
3. Generalprinciplesoffairplayandjustice
Furthermore, a line must be drawn between

management prerogatives regarding business
operations per se and those which affect the rights
of Ees. In treating the latter, management should
see to it that its Ees are at least properly informed
of its decisions and modes of actions. So long as a
companys prerogatives are exercised in good faith
fortheadvancementoftheErsinterestandnotfor
the purpose of defeating or circumventing the
rights of the Ees under special laws or under valid
agreements, the Supreme Court will uphold them.
(PAL v. NLRC, G.R. No. 85985, Aug. 13, 1993; San
Miguel Brewery Sales v9. Ople, G.R. No. 53515,
February8,1989)
Note:Itmustbeestablishedthattheprerogativebeing
invokedisclearlyamanagerialone
SOCIAL LEGISLATION

107
F.SOCIALLEGISLATION
Q:WhatisSocialLegislation?
A: It consists of statutes, regulations and

jurisprudence that afford protection to labor,
especially to working women and minors, and is in
fullaccordwiththeconstitutionalprovisionsonthe
promotion of social justice to insure the well being
andeconomicsecurityofallthepeople.
1.SOCIALSECURITYLAW
(RA8282)
Q:Whatisthepolicyobjectiveintheenactmentof
(SSS)Law?
A:ItisthepolicyoftheStatetoestablish,develop,
promoteandperfectasoundandviabletaxexempt
SSSsuitabletotheneedsofthepeoplethroughout
the Phils., which shall promote social justice and
provide meaningful protection to members and
their beneficiaries against the hazards of disability,
sickness, maternity, old age, death, and other
contingenciesresultinginlossofincomeorfinancial
burden.(Sec.2)
TheenactmentofSSSlawisalegitimateexerciseof
thepolicepower.Itaffordsprotectiontolaborand
is in full accord with the constitutional mandate on
the promotion of social justice. (Roman Catholic
ArchbishopofManilav.SSS,G.R.No.15045Jan.20,
1961)
Q:Arethepremiumsconsideredastaxes?
A: No. 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, Inc., v. SSS, G.R. No.
26298Sep.28,1984)
Q:ArebenefitsreceivedunderSSSLawpartofthe
estateofamember?
A:No.BenefitsreceivableundertheSSSLawarein
the nature of a special privilege or an arrangement
secured by the law pursuant to the policy of the
State to provide social security to the workingman.
The benefits are specifically declared not
transferable and exempt from tax, legal processes
and liens. (SSS v. Davac, et. al., G.R. No.21642, July
30,1966)
Q:Howaredisputessettled?
A:
DISPUTESETTLEMENT
Social
Security
Commission
(SSC)
Disputesinvolving:
1. Coverage
2. Benefits
3. Contributions
4. Penalties
5. Anyothermatterrelated
thereto.
Note: Disputes within the mandatory

period of 20 days after the submission of
evidence.(Sec.5a)
Decision, in the absence of appeal, shall

be final and executory 15 days after date
ofnotification.(Sec.5b)
CA/SC
DecisionsofSSCshallbeappealableto:
1.CAquestionsoflawandfact(Sec.
5c)
2.SCquestionsoflaw.(Sec.5c)
Execution
ofdecision
SSCmay,motupropriooronmotionof
any interested party, issue a writ of
execution to enforce any of its
decisions or awards, after it has
becomefinalandexecutory.(Sec.5d)
Q: Can the SSC validly reevaluate the findings of

the RTC, and on its own, declare the latters
decisiontobebereftofanybasis?
A: No. It cannot review, much less reverse,

decisions rendered by courts of law as it did in the
caseatbarwhenitdeclaredthattheCFIOrderwas
obtained through fraud and subsequently
disregardedthesame,makingitsownfindingswith
respecttothevalidityofBailonandAlicesmarriage
on the one hand and the invalidity of Bailon and
Teresitasmarriageontheother.Ininterferingwith
and passing upon the CFI Order, the SSC virtually
acted as an appellate court. The law does not give
theSSCunfettereddiscretiontotriflewithordersof
regular courts in the exercise of its authority to
determine the beneficiaries of the SSS. (SSS vs.
Teresita Jarque Vda. De Bailon, G.R. No. 165545,
Mar.24,2006,J.CarpioMorales)
Q:Whoisanemployer(Er)?
A: Any person, natural or juridical, domestic or

foreign, who carries into the Phils. any trade,
business, industry, undertaking or activity of any
kindandusestheservicesofanotherpersonwhois
under his orders as regards the employment,
except the Government and any of its political
subdivisions, branches or instrumentalities,
including corporations owned or controlled by the
Government: Provided, That a selfemployed
person shall be both Ee and Er at the same time.
(Sec8[c])


LABORLAWTEAM:
108
Q:Whoisanemployee(Ee)?
A: Any person who performs services for an Er in

whicheitherorbothmentalandphysicaleffortsare
used and who receives compensation for such
services, where there is an ErEe relationship:
Provided,Thataselfemployedpersonshallbeboth
EeandEratthesametime.(Sec.8[d])
Q:Whatisemployment?
A:GR:AnyserviceperformedbyanEeforhisEr.
XPNs:
1. Employmentpurelycasualandnotforthe
purpose of occupation or business of the
Er;
2. Service performed on or in connection
with an alien vessel by an Ee if he is
employedwhensuchvesselisoutsidethe
Phils;
3. Service performed in the employ of the
Phil. Government or instrumentality or
agencythereof;
4. Service performed in the employ of a
foreign government or international
organization, or their whollyowned
instrumentality:
5. Such other services performed by
temporary and other Ees which may be
excluded by regulation of the SSC. Ees of
bona fide independent contractors shall
notbedeemedEesoftheErengagingthe
servicesofsaidcontractors.(Sec.8[j])
Q:Whatisacontingency?
A: The retirement, death, disability, injury or

sicknessandmaternityofthemember.
a.Coverage
Q:WhoarecoveredbySSS?
A:
1. CompulsoryCoverage
a. All Ees not over 60 years of age and
theirErs;
b. Domestic helpers whose income is
not less than P 1000/month and not
over60yearsofageandtheirErs;
Limitations:
a. Any benefit earned by the Ees
under private benefit plans
existing at the time of the
approval of the Act shall not be
discontinued, reduced or
otherwiseimpaired;
b. Existing private plans shall be
integrated with the SSS but if
the Er under such plan is
contributing more than what is
required by this Act, he shall
pay to the SSS the amount
required to him, and he shall
continue with his contributions
lesstheamountpaidtoSSS;
c. Any changes, adjustments,
modifications, eliminations or
improvementsinthebenefitsof
theremainingprivateplanafter
the integration shall be subject
to agreements between the Ers
andtheEesconcerned;and
d. The private benefit plan which
the Er shall continue for his Ees
shall remain under the Ers
managementandcontrolunless
there is an existing agreement
tothecontrary
c. All selfemployed considered both
anErandEe
d. Professionals;
e. Partners and single proprietors of
business;
f. Actors and actresses, directors,
scriptwriters and news
correspondents who do not fall
within the definition of the term
Ee;
g. Professional athletes, coaches,
trainersandjockeys;AND
h. Individual farmers and fisherman.
(Sec.9)
2. Voluntary
a. Spouses who devote full time to
managing the household and family
affairs, unless they are also engaged
in other vocation or employment
which is subject to mandatory
coverage;(Sec.9[b])
b. Filipinos recruited by foreignbased
Ers for employment abroad may be
covered by the SSS on a voluntary
basis;(Sec.9[c])
c. Ee separated from employment to
maintainhisrighttofullbenefits
d. Selfemployed who realizes no
incomeforacertainmonth
3. ByAgreement
Any foreign government, international
SOCIAL LEGISLATION

109
instrumentality employing workers in the
Phils., may enter into an agreement with
the Phil. government for the inclusion of
such Ees in the SSS except those already
covered by their respective civil service
retirementsystems.
Q: When is the compulsory coverage deemed

effective?
A:
1. Employeronthefirstdayofoperation
2. Employeeonthedayofhisemployment
3. Compulsory coverage of selfemployed
uponhisregistrationwiththeSSS
Q:Whatistheeffectofseparationofanemployee
fromhisemploymentundercompulsorycoverage?
A:
1. His Ers obligation to contribute arising
from that employment shall cease at the
endofthemonthofseparation,
2. But said Ee shall be credited with all
contributions paid on his behalf and
entitled to benefits according to the
provisionsofR.A.9282.
3. He may, however, continue to pay the
totalcontributionstomaintainhisrightto
fullbenefit.(Sec.11)
Note: The above provision recognizes the once a

member,alwaysamemberrule.
Q:Whatistheeffectofinterruptionofbusinessor
professionalincome?
A: Iftheselfemployedmemberrealizesnoincome
inanygivenmonth:
1. He shall not be required to pay

contributionsforthatmonth.
2. Hemay,however,beallowedtocontinue
payingcontributionsunderthesamerules
and regulations applicable to a separated
Eemember:
3. Provided, that no retroactive payment of
contributions shall be allowed other than
asprescribedunderSec.22A.(Sec.11A)
Q: On her way home from work, Asteria

Benedicta, a machine operator in a sash factory,
enters a movie house to relax. But she is stabbed
by an unknown assailant. Her claim for benefits
under the SSS Law is denied on the ground that
her injury is not workconnected. Is the denial
legal?Why?
A: No. It is not necessary, for the enjoyment of

benefits under the SSS Law that the injury is work
connected.Whatisimportantismembershipinthe
SSS and not the causal connection of the work of
theEetohisinjuryorsickness.
Claims based on workconnected injuries or

occupational diseases are covered by the State
InsuranceFund.
b.Exclusionsfromcoverage
Q: Enumerate the kindsof employment which are

exceptedfromcompulsorycoverageundertheSSS
Law.
A:UnderSection8(j)ofR.A.1161,asamended,the
following services or employments are excepted
fromcoverage:
1. Employmentpurelycasualandnotforthe
purpose of occupation or business of the
employer;
2. Service performed on or in connection

with an alien vessel by an employee if he
is employed when such vessel is outside
thePhilippines;
3. Service performed in the employ of the

Philippine Government or instrumentality
oragencythereof;
4. Service performed in the employ of a

foreign government or international
instrumentality:
Provided, however,That this exemption

notwithstanding,anyforeigngovernment,
internationalorganizationortheirwholly
owned instrumentality employing
workers in the Philippines or employing
Filipinos outside of the Philippines, may
enter into an agreement with the
Philippine Government for the inclusion
ofsuchemployeesintheSSSexceptthose
already covered by their respective civil
service retirement systems:Provided,
further,Thatthetermsofsuchagreement
shall conform with the provisions of this
Act on coverage and amount of payment
of contributions and benefits:Provided,
finally,ThattheprovisionsofthisActshall
besupplementarytoanysuchagreement;
and


LABORLAWTEAM:
110
5. Such other services performed by
temporary and other employees which
may be excluded by regulation of the
Commission. Employees ofbona
fideindependent contractors shall not be
deemed employees of the employer
engagingtheserviceofsaidcontractors.
c.Benefits
Q:WhatarethebenefitsundertheSSSAct?
A:
1. MonthlyPension
2. RetirementBenefits
3. DeathBenefits
4. DisabilityBenefits
5. FuneralBenefits
6. SicknessBenefits
7. MaternityBenefits
Q: Are the benefits provided for in the SSS Law

transferable?
A: Benefits provided for in the SSS Law are not

transferable and no power of attorney or other
document executed by those entitled thereto in
favorofanyagent,attorneyoranyotherpersonfor
the collection thereof on their behalf shall be
recognized,exceptwhentheyarephysicallyunable
to collect personally such benefits. (Sec.15, R.A.
1161,asamended)
Q:WhatarethereportorialrequirementsoftheEr
andselfemployed?
A:
1. Er Report immediately to SSS the names,
ages, civil status, occupations, salaries and
dependentsofallhiscoveredEes
2. SelfemployedReporttoSSSwithin30days
fromthefirstdayofhisoperation,hisname,
age, civil status, occupation, average
monthlynetincomeandhisdependents
MonthlyPension
Q:Howmuchisthemonthlypension?
A:
1. The monthly pension shall be the highest
ofthefollowingamounts:
a. Thesumofthefollowing:
ii. P300.00;plus
iii. 20% of the average monthly
salarycredit;plus
iv. 2% of the average monthly
salary credit for each credited
year of service in excess of 10
years;or
b. 40% of the average monthly salary
credit;or
c. P1,000.00, provided that the
monthly pension shall in no case be
paidforanaggregateamountofless
thansixty(60)months(Sec.12[a])
2. MinimumPension
a. P1,200.00 members with at least
10creditedyearsofservice
b. P2,400.00 for those with 20 credited
yearsofservice.(Sec.[b])
Q:Whatwillhappentothemonthlypensionofa
retireeincaseofdeath?
A:
1. Upon the death of the retired member,
hisprimarybeneficiariesasofthedateof
his retirement will get 100% of his
monthly pension plus the dependent's
pensionforeachchild.
Note: The above phrase primary

beneficiaries (as of the date of his
retirement) was declared unconstitutional
bytheSCinDycaicov.SSSandSSC(G.R.No.
16137, June 6, 2006) because it is in
violation of the equal protection, due
processandsocialjustice.
2. Ifhedieswithin60monthsfromthestart
of his pension and he has no primary
beneficiaries, his secondary beneficiaries
willreceivealumpsumbenefitequivalent
to the difference of 60 multiplied by the
monthly pension and the total monthly
pensions paid by the SSS excluding the
dependent'spension.(Sec.12B[d])
Q: Bonifacio and Elena are living together as

husband and wife without the benefit of
marriage. Bonifacio declared Elena and their
children as his primary beneficiaries in his self
employed data record in SSS. A few months prior
to his death, Bonifacio married Elena.Is Elena
entitledtothesurvivorspension?
A: Yes, she is considered primary beneficiary of

Bonifacio. The phrase Upon the death of the
retired member, his primary beneficiaries as of the
date of his retirement will get 100 per cent of his
monthly pension xxx of Sec. 12B d of RA 8282 is
unconstitutional because it violates the: (1) equal
protection clause because it impermissibly
discriminates against dependent spouses whose
SOCIAL LEGISLATION

111
respective marriages to the SSS members were
contracted after the latters retirement; (2) due
process clause because it outrightly deprives
spouses who married the SSS members after their
retirement of the survivors pension, a property
interest, without giving them opportunity to be
heard;and(3)socialjustice.
Further, the survivorship pension applied for was

classifiedasdeathbenefits.Hence,thecontingency
that gives rise to the entitlement of Elena is the
death of Bonifacio and nothis retirement. (Dycaico
v.SSS,G.R.No.16137,June6,2006)
Q: When is the monthly pension and dependents

pensionsuspended?
A:
1. Uponthereemploymentorresumptionof
selfemployment
2. Recovery of the disabled member from
hispermanenttotaldisability
3. Failuretopresenthimselfforexamination
at least once a year upon notice by the
SSS.(Sec.13A[b])
RetirementBenefit
Q:Whatisaretirementbenefit?
A:Itisacashbenefitpaidtoamemberwhocanno
longerworkduetooldage.
Q:Whatarethetypesofretirementbenefits?
A:
1. Monthly Pension Lifetime cash benefit
paidtoaretireewhohaspaidatleast120
monthly contributions to the SSS prior to
thesemesterofretirement.
2. Lump Sum Amount Granted to a retiree
who has not paid the required 120
monthlycontributions.
Q:Whoareentitledforretirementbenefits?
A:
1. Amemberwho
a. has paid at least 120 monthly
contributions priorto the semester of
retirement;
b. atleast60yearsold;and
c. already separated from employment
orhasceasedtobeselfemployed,OR
2. At least 65 years old, shall be entitled for

as long as he lives to the monthly
pension;(Sec12B[a])
3. Amember
a. At least 60 years old at retirement;
and
b. Doesnotqualifyforpensionbenefits
underparagraph(a)aboveentitled
to a lump sum benefit equal to the
total contributions paid by him and
onhisbehalf;
c. Must be separated from
employment and is not continuing
payment of contributions to the SSS
onhisown.(Sec.12B[b])
Q: What happens when the retirement pensioner

isreemployedorresumesselfemployment?
A: The monthly pension of a retirement pensioner

whoresumesemploymentandislessthan65years
old will be suspended. He and his Er will again be
subjecttocompulsorycoverage.(Sec.12B[c])
Q: Are the children of a retiree member entitled

tothedependent'spension?
A:Yes(Sec.12[A]).However,only5minorchildren,
beginning from the youngest, are entitled to the
dependents' pension. No substitution is allowed.
Where there are more than 5 legitimate and
illegitimate children, the legitimate ones will be
preferred.
Q: For how long will the dependent child receive

thepension?
A: Until the child reaches 21 years of age, gets

married,getsemployedandearnsP300amonthor
more,ordies.
However, the dependent's pension is granted for

lifetochildrenwhoareover21yearsold,provided
theyareincapacitatedandincapableofselfsupport
duetophysicalormentaldefectwhichiscongenital
oracquiredduringminority.
DeathBenefit
Q: When is a beneficiary entitled to death

benefits?
A:
1. Upondeathofamember,ifhehaspaidat
least 36 monthly contributions prior to
thesemesterofdeath:
a. primary beneficiaries shall be
entitledtothemonthlypension;or
b. If there are noprimary beneficiaries,
secondary beneficiaries shall be


LABORLAWTEAM:
112
entitled to a lump sum benefit
equivalent to 36 times the monthly
pension.
2. Upon death of a member If he has not
paid the required 36 monthly
contributions prior to the semester of
death:
a. Primary or secondary beneficiaries
shall be entitled to a lump sum
benefit equivalent to the monthly
pensionmultipliedbythenumberof
monthly contributions paid to the
SSS:or
b. 12 times the monthly pension,
whicheverishigher.(Sec.13)
DisabilityBenefit
Q:Whatisadisabilitybenefit?
A: It is a cash benefit paid to a member who

becomes permanently disabled, either partially or
totally.
Q: What is the difference between death benefits

andPermanentTotalDisabilitybenefits?
A:
DeathBenefits PTDBenefits
Requisite
atleast36monthlycontributions
Benefitspayabletowhom
PrimaryBeneficiaries Member
Failuretomake36monthlypayments
Benefitsshallbeinlumpsumequivalenttothe
monthlypensiontimesthenumberofmonthly
contributionspaidtoSSSor12timesthemonthly
pension,whicheverishigher.
Q: What is the effect of the death of the PTD

pensioner?
A:
1. Primary beneficiaries are entitled to
receivemonthlypensionasofthedateof
disability.
2. No primary beneficiaries and he dies
within 60 months from the start of his
monthlypensionsecondarybeneficiaries
shall be entitled to a lump sum benefit
equivalent to the total monthly pensions
corresponding to the balance of the 5
year guaranteed period excluding the
dependentspension.(Sec.13A[c])
Q: What is the effect of retirement or death to

partialdisabilitypension?
A: Disability pension shall cease upon his

retirementordeath.(Sec13A[j])
FuneralBenefit
Q:Whatisthefuneralbenefit?
A:AfuneralgrantequivalenttoP12,000.00shallbe
paid, in cash or in kind, to help defray the cost of
expenses upon the death of a member or retiree.
(Sec.13B)
SicknessBenefit
Q:Whatissicknessbenefit?
A: Itisadailycashallowancepaidforthenumber
ofdaysamemberisunabletoworkduetosickness
orinjury.
Q: What are the requirements to be entitled for

sicknessbenefit?
A:
1. The member paid at least 3 monthly
contributions in the 12month period
immediately preceding the semester of
sicknessorinjury
2. Confined for more than 3 days in a
hospital or elsewhere with the approval
oftheSSS
3. He has used all current company sick
leaveswithpayforthecurrentyear
4. Notified his Er or the SSS, if he is a
separated, voluntary or selfemployed
member
Q:Whowillpaysicknessbenefits?andhowmuch
isthebenefit?
A:TheErshallpaythe:
1. Ee for each compensable confinement or
fractionthereofor
2. SSS if member is selfemployed daily

sickness benefit equivalent to 90% of his
average daily salary credit, subject to the
followingconditions:
a. In no case shall the daily sickness
benefitbepaidlongerthan120days
in 1 calendar year, nor shall any
unused portion of the 120 days of
sickness benefit granted be carried
forward and added to the total
number of compensable days
allowableinthesubsequentyear;
SOCIAL LEGISLATION

113
b. Notpaidformorethan240dayson
account of the same confinement;
and
c. Ee member shall notify his Er of the
fact of his sickness or injury within 5
calendar days after the start of his
confinement unless such
confinement:
i. isinahospital
ii. the Ee became sick or was
injured while working or
within the premises of the Er
(notification to the Er not
necessary);
3. If the member is unemployed or self

employed, he shall directly notify the SSS
ofhisconfinementwithin5calendardays
after the start thereof unless such
confinementisinahospitalinwhichcase
notificationisalsonotnecessary;
4. Where notification is necessary,

confinement shall be deemed to have
started not earlier than the 5th day
immediately preceding the date of
notification.(Sec.14[b])
Note: The law does not require that sickness must be

relatedtothedutiesofthebeneficiaries.
Q: When will compensable confinement

commence?
A:
1. Beginsonthe1stdayofsickness
2. Payment of such allowances shall be
promptlymadebytheEr:
a. every regular payday or on the 15
th
andlastdayofeachmonth,
b. incaseofdirectpaymentbytheSSS
as long as such allowances are due
andpayable.(Sec.14[b])
Q:WhataretherequirementsinorderthatErmay
claimreimbursementofthesicknessbenefit?
A:
1. 100% of daily benefits shall be
reimbursed by SSS if the following
requirementsaresatisfied:
a. Receipt of SSS of satisfactory proof
ofsuchpaymentandlegalitythereof:
b. The Er has notified the SSS of the
confinement within 5 calendar days
after receipt of the notification from
theEemember:
2. Er shall be reimbursed only for each day

of confinement starting from the 10
th
calendar day immediately preceding the

date of notification to the SSS if the
notification to the SSS is made beyond 5
calendar days after receipt of the
notificationfromtheEemember.(Sec.14
[c])
Q:WhenwillreimbursementbemadebySSS?
A:GR: SSS shall reimburse the Er or pay the

unemployed member only for confinement
within1yearimmediatelyprecedingthedatethe
claimforbenefitorreimbursementisreceivedby
theSSS
XPN:Confinementinahospitalinwhichcasethe
claimforbenefitorreimbursementmustbefiled
within 1 year from the last day of confinement.
(Sec.14[c])
MaternityBenefit
Q:Whatisthematernitybenefit?
A: The maternity benefit is a daily cash allowance

granted to a female member who was unable to
workduetochildbirthormiscarriage.
Q: What are the qualifications for entitlement to

thematernitybenefit?
A:
1. She has paid at least three monthly
contributionswithinthe12monthperiod
immediately preceding the semester of
herchildbirthormiscarriage.
2. She has given the required notification of
her pregnancy through her employer if
employed, or to the SSS if separated,
voluntaryorselfemployedmember.
Q: Is the voluntary or selfemployed member also

entitledtothematernitybenefit?
A: Yes, A voluntary or a selfemployed member is

entitled to the maternity benefit provided that she
meetsthequalifyingconditions.
Q:Howmuchisthematernitybenefit?
A: The maternity benefit is equivalent to 100 per

cent of the members average daily salary credit
multiplied by 60 days for normal delivery or
miscarriage,78daysforcaesareansectiondelivery.
Q:Howisthematernitybenefitcomputed?


LABORLAWTEAM:
114
A:
1. Exclude the semester of contingency
(deliveryormiscarriage).
Note: Semester refers to two consecutive

quarters ending in the quarter of
contingency. Quarter refers to three
consecutive months ending March, June,
SeptemberorDecember.
2. Count12monthsbackwardsstartingfrom
the month immediately before the
semesterofcontingency.
3. Identify the six highest monthly salary

creditswithinthe12monthperiod.
Note: Monthly salary credit means the

compensation base for contributions
benefitsrelatedtothetotalearningsforthe
month.
4. Addthesixhighestmonthlysalarycredits
togetthetotalmonthlysalarycredit.
5. Divide the total monthly salary credit by

180 days to get the average daily salary
credit. This is equivalent to the daily
maternityallowance.
6. Multiplythedailymaternityallowanceby
60 (for normal delivery or miscarriage) or
78days(forcaesareansectiondelivery)to
getthetotalamountofmaternitybenefit.
Q:Whatisthedifferenceofcompensabilityunder
theLaborLawandtheSocialSecurityLaw?
A: The claims are different as to their nature and

purpose. (Ortega vs. Social Security Commission,
G.R.No.176150,June25,2008)
LABORLAW SOCIALSECURITYLAW
Purpose
Governs compensability
of:
1. workrelated
disabilities
2. when there is loss
of income due to
workconnected
or work
aggravated injury
orillness.
Benefits are intended to
provide insurance or
protection against the
hazards or risks of
disability, sickness, old
age or death, inter alia,
irrespective of whether
theyarosefromorinthe
course of the
employment.
Nature
A disability is total and
permanentifasaresultof
the injury or sickness the
Ee is unable to perform
Disability may be
permanent total or
permanentpartial.
anygainfuloccupationfor
a continuous period
exceeding 120 days
regardless of whether he
losestheuseofanyofhis
bodyparts.
d.Beneficiaries
Q:Whoareprimarybeneficiaries?
A:
1. The dependent spouse until he or she
remarries
2. The dependent legitimate, legitimated or

legallyadopted,andillegitimatechildren,:
Provided, That the dependent illegitimate
children shall be entitled to 50% of the
share of the legitimate, legitimated or
legallyadoptedchildren.
Q:Whoaresecondarybeneficiaries?
A: In the absence of primary beneficiaries, the

dependentparents.
In the absence of all the foregoing, any other

person designated by the member as his or her
secondarybeneficiary.(Sec.8[k])
Q:Whoareconsidereddependents?
A:
1. The legal spouse entitled by law to
receivesupportfromthemember;
2. The legitimate, legitimated, or legally
adopted,andillegitimatechildwho:
a. Isunmarried,
b. Notgainfullyemployed,and
c. Hasnotreached21yearsofage,orif
over 21 years of age, he is
congenitallyorwhilestillaminorhas
been permanently incapacitated and
incapable of selfsupport, physically
ormentally.
3. The parent who is receiving regular
supportfromthemember.
Q:Whatismeantbydependentforsupport?
A: The entitlement to benefits as a primary

beneficiary requires not only legitimacy but also
dependence upon the member Ee. (Gil v. SSC CA
GRSP.37150,May8,1996)
Ifawifewhoisalreadyseparateddefactofromher
husband cannot be said to be "dependent for
support"uponthehusband,absentanyshowingto
SOCIAL LEGISLATION

115
the contrary. Conversely, if it is proved that the
husband and wife were still living together at the
timeofhisdeath,itwouldbesafetopresumethat
she was dependent on the husband for support,
unless it is shown that she is capable of providing
forherself.(SSSv.Aguas,G.R.No.165546,Feb.27,
2006)
Q: Who is entitled to the benefits of an SSS

member who was survived not only by his legal
wife,whoisnotdependentuponthemember,but
alsobytwocommonlawwiveswithwhomhehad
illegitimateminorchildren?
A: The illegitimate minor children shall be entitled

to the death benefits as primary beneficiaries
because the legal wife is not dependent upon the
member.TheSSSLawisclearthatforaminorchild
to qualify as a dependent the only requirements
are that he/she must be below 21 yrs. of age, not
marriednorgainfullyemployed.(Signeyv.SSS,G.R.
No.173582,Jan.28,2008)
Q:Whatiscompensation?
A: All actual remuneration for employment,

including the mandated cost of living allowance, as
well as the cash value of any remuneration paid in
anymediumotherthancashexceptthatpartofthe
remuneration received during the month in excess
ofthemaximumsalary.
Q: The owners of FALCON Factory, a company

engaged in the assembling of automotive
components, decided to have their building
renovated. (50) persons, composed of
engineers, architects and other construction
workers, were hired by the company for this
purpose. The work was estimated to be
completed in 3 years. The Ees contended that
since the work would be completed after more
than1year,theyshouldbesubjecttocompulsory
coverage under the Social Security Law. Do you
agree with their contention? Explain your answer
fully.
A: No. Under Sec. 8 (j) of R.A. 1161, as amended,

employment of purely casual and not for the
purpose of the occupation or business of the
employer are excepted from compulsory coverage.
An employment is purely casual if it is not for the
purposeofoccupationorbusinessoftheEr.
In the problem given, Falcon Factory is a company

engaged in the assembly of automotive
components. The 50 persons (engineers, architects
and construction workers) were hired by Falcon
Factory to renovate its building. The work to be
performed by these 50 people is not in connection
with the purpose of the business of the factory.
Hence, the employment of these 50 persons is
purely casual. They are, therefore, excepted from
the compulsory coverage of the SSS law. (2000 Bar
Question)
2.GSIS
(R.A.8291)

Q: What are the purposes behind the enactment
oftheGSISAct?
A: To provide and administer the following social

securitybenefitsforgovernmentemployees(Ee):
1. Compulsorylifeinsurance
2. Optionallifeinsurance
3. Retirementbenefits
4. Disability benefits to workrelated
contingencies;and
5. Deathbenefits
Q: Who are considered employers (Er) under the

GSISAct?
A:
1. NationalGovernment
2. Its political subdivisions, branches,
agencies,instrumentalities
3. GOCCs, and financial institutions with
originalcharters
4. Constitutional Commissions and the
Judiciary(Sec.2[c])
Q:CanSSSEesbecoveredbyGSIS?
A:Yes.
Q:WhoisanEmployeeormember?
A:Anyperson,receivingcompensationwhileinthe
service of an Er, whether by election or
appointment,irrespectiveofstatusofappointment,
including barangay and sanggunian officials. (Sec.
2[d])
Q:Whatiscompensation?
A: The basic pay or salary received by an Ee,

pursuant to his or her election or appointment,
excluding per diems, bonuses, OT pay, honoraria,
allowances and any other emoluments received in
addition to the basic pay which are not integrated
intothebasicpayunderexistinglaws.(Sec.2[i])
Q: Baradero is a member of the Sangguniang

BayanoftheMunicipalityofLaCastellana,Negros


LABORLAWTEAM:
116
Occ.andispaidonaperdiembasis.Ontheother
hand, Belo a ViceGovernor of Capiz is in a hold
over capacity and is paid on a per diem basis. Are
the services rendered by Baradero and Belo on a
per diem basis creditable in computing the length
ofserviceforretirementpurposes?
A: Yes. The traditional meaning of per diem is a

reimbursement for extra expenses incurred by the
public official in the performance of his duties.
Under this definition the per diem is intended to
coverthecostoflodgingandsubsistenceofofficers
and employees when the latter are on a duty
outside of their permanent station. On the other
hand, a per diem could rightfully be considered a
compensation or remuneration attached to an
office.
The per diems paid to Baradero and Belo were in

the nature of compensation or remuneration for
their services as Sangguniang Bayan and Vice
Governor, respectively, rather than a
reimbursement for incidental expenses incurred
whileawayfromtheirhomebase.
If the remuneration received by a public official in

theperformanceofhisdutiesdoesnotconstitutea
mere allowance for expenses but appears to be
hisactualbasepay,thennoamountofcategorizing
the salary as a per diem would take the
allowances received from the term service with
compensation for the purpose of computing the
number of years of service in government. (GSIS v.
CSC,G.R.Nos.98395and102449,June19,1995)
Q:WhatarethesourcesoffundsoftheGSIS?
A: It comes from the monthly contributions of the

coveredEesandErs.(Sec.5)
The contributions of the Ees are deducted and

withheld by the Er each month from the monthly
salaryoftheformerandareremittedbythelatter,
together with its own share, to the System within
the first 10 days of each calendar month following
themonthtowhichthecontributionsapply.(Sec.6)
Q: What is the penalty in case of delayed

remittanceornonremittanceofcontributions?
A: The unremitted contributions shall be charged

interests as prescribed by the GSIS Board of
Trustees but shall not be less than 2% simple
interest per month from due date to the date of
paymentbytheemployersconcerned.
a.Coverage
Q: What government Ees are subject to coverage

undertheGSIS?
A:
GR: All Ees receiving compensation who have
not reached the compulsory retirement age,
irrespectiveofemploymentstatus.
XPNs:
1. Uniformedmembersofthe:
a.AFP;and
b.PNP.
2. Contractuals who have no Er and Ee
relationshipwiththeagenciestheyserve.
Q: Who are covered by life insurance, retirement

andothersocialsecurityprotection?
A:
GR: All members of the GSIS shall have life
insurance, retirement, and all other social
security protections such as disability,
survivorship, separation, and unemployment
benefits.(Sec.3)
XPNs:Membersof:
1. Thejudiciary;and
2. Constitutional commissions who shall
havelifeinsuranceonly.
b.Exclusionsfromcoverage
Q: Who, under the GSIS, are excluded from the

coverage?
A:
1. Ees who have separate retirement
schemes (members of the Judiciary,
Constitutional Commissions and others
similarlysituated)
2. Contractual Ees who have no ErEe with
theagenciestheyserve
3. Uniformed members of the AFP, BJMP,
whose coverage by the GSIS has ceased
effectiveJune24,1997
4. Uniformed members of the PNP whose
coveragebytheGSIShasceasedeffective
February1,1996.(Sec.2.4,RuleII,IRR)
Q:Forthepurposeofbenefitentitlement,howare
themembersclassified?
A:
1. Activemembers
a. Still in the service and are paying
integratedpremiums.
SOCIAL LEGISLATION

117
b. Covered for the entire package
benefits and privileges being
extendedbyGSIS.
2.Policyholders
a. Coveredforlifeinsuranceonly
b. Canavailofpolicyloanprivilegeonly
c. Mayalsoapplyforhousingloans
d. Judiciary and Constitutional
Commissions
3. RetiredMembers
a. Former active members who have
retired from the service and are
already enjoying the corresponding
retirementbenefitsappliedfor
b. Not entitled to any loan privilege,
except stock purchase loan (Sec. 2.2,
RulesII,IRR)
c.Benefits
Q: What are the benefits provided by the GSIS

Act?
A:
1. Separation
2. Unemploymentorinvoluntaryseparation
3. Retirement
4. Permanentdisability
5. Temporarydisability
6. Survivorship
7. Funeral
8. LifeInsurance
9. Such other benefits and protection as
may be extended to them by the GSIS
suchasloans.
Q:WhatarethebenefitsunderP.D.1146(Revised
GSIS Act of 1977) that may be granted to the
separatedmembersofthePNP,BJMPandBFP?
A:GR:
1. Oldagebenefit
2. Permanentdisabilitybenefit
3. Survivorshipbenefit
4. Funeralbenefit
5. Retirementbenefit
XPN:Judiciary(Lifeinsuranceonlytaxexempt)
Q: What are the reportorial requirements of the

Er?
A: Er must report to GSIS the names, employment

status, positions, salaries of the employee and such
othermatterasdeterminedbytheGSIS.
SeparationBenefits
Q: When will a member be entitled to separation

benefits and what comprises these separation
benefits?
A: A member who has rendered a minimum of 3

years creditable service shall be entitled to
separation benefit upon resignation or separation
underthefollowingterms:
1. A member with at least 3 years but less

than 15 years: Cash payment equivalent
to 100% of the AMC for every year of
service the member has paid
contributions:
a. notlessthanP12,000.00
b. Payable upon reaching 60 years of
age or upon separation, whichever
comeslater.
2. A member with less than 15 years of

service and less than 60 years of age at
thetimeofresignationorseparation:
a. Cashpaymentequivalentto18times
the basic monthly pension (BMP),
payableatthetimeofresignationor
separation
b. An oldage pension benefit equal to
the basic monthly pension, payable
monthly for life upon reaching the
ageof60.
Q:Whataretheeffectsofseparationfromservice
withregardtomembership?
A: A member separated from the service shall

continue to be a member and shall be entitled to
whateverbenefitshehasqualifiedto.
Note: A member separated for a valid cause shall

automatically forfeit his benefits, unless the terms of
resignationorseparationprovideotherwise.
Inthecaseofforfeiture,theseparatedemployeeshall
be entitled to receive only of the cash surrender
valueofhisinsurance.
UnemploymentBenefits

unemploymentbenefits?
A:
1. The recipient must be a permanent
employeeatthetimeofseparation;
2. Hisseparationwasinvoluntaryduetothe
abolitionofhisofficeorpositionresulting
fromreorganization;and


LABORLAWTEAM:
118
3. He has been paying the contribution for
atleast1yearpriortoseparation.
Q:Whatwillconsistofanunemploymentbenefit?
A: It will consists of cash payment equivalent to

50%oftheaveragemonthlycompensation
Note:Amemberwhohasrenderedatleast15yearsof
service will be entitled to separation benefits instead
ofunemploymentbenefits.
RetirementBenefits
Q:Whataretheconditionsinordertobeentitled
toretirementbenefits?
A:
1. Amemberhasrenderedatleast15years
ofservice;
2. He is at least 60 years of age at the time
ofretirement;and
3. He is not receiving a monthly pension
benefit from permanent total disability.
(Sec.13A)
Q: What is therule in case of extension of service

inordertobeentitledforretirementbenefit?
A:ThedoctrineinCenavs.CSC(G.R.No.97419,July
3, 1992), was modified in Rabor vs. CSC, (G.R. No.
111812,May31,1995),wheretheSCheldthat:The
head of the government agency concerned is
vested with discretionary authority to allow or
disallowextensionoftheserviceofanofficialorEe
who has reached 65 years old without completing
the15yearsofgovernmentservice.However, this
discretion is to be exercise conformably with the
provisions of Civil Service Memorandum Circular
No. 27, series of 1990 which provides that the
extensionshallnotexceed1year.
Q:Whatisthereasonforcompulsoryretirement?
A: The compulsory retirement of government

officials and Ees upon their reaching the age of 65
yearsisfoundedonpublicpolicywhichaimsbyitto
maintain efficiency in the government service and
atthesametimegivetotheretiringpublicservants
the opportunity to enjoy during the remainder of
their lives the recompense, for their long service
and devotion to the government , in the form of a
comparatively easier life, freed from the rigors of
civil service discipline and the exacting demands
that the nature of their work and their relations
with their superiors as well as the public would
impose upon them. (Beronilla v. GSIS, G.R. No.
21723,Nov.26,1970)
Q:Whataretheoptionsoftheretireewithregard
tohisorherretirementbenefits?
A:Theretireemaygeteitherofthefollowing:
1. Lump sum equivalent to 6 months of the

basic monthly pension (BMP) payable at
the time of retirement and an oldage
pensionbenefitequaltoBMPpayablefor
life, starting upon the expiration of the 5
yearscoveredbythelumpsum;or
2. Cash payment equivalent to 18 times his
BMPandmonthlypensionforlifepayable
immediately.(Sec.13[a])
PermanentDisabilityBenefits
Q:Whatisdisability?
A: Any loss or impairment of the normal functions

ofthephysicaland/ormentalfacultyofamember,
which reduces or eliminates his/her capacity to
continuewithhis/hercurrentgainfuloccupationor
engageinanyothergainfuloccupation.
Q:Whatistotaldisability?
A: Complete incapacity to continue with present

employment or engage in any gainful occupation
due to the loss or impairment of the normal
functionsofthephysicaland/ormentalfacultiesof
themember.
Q:Whatispermanenttotaldisability(PTD)?
A: Accrues or arises when recovery from

impairment mentioned in Sec.2(q) (defining
disability)ismedicallyremote.
Q:Whatispermanentpartialdisability(PPD)?
A: Accrues or arises upon the irrevocable loss or

impairment of certain portions of the physical
faculties, despite which the member is able to
pursueagainfuloccupation.
Q:Whataretheconditionsinordertobeentitled
forpermanentdisabilitybenefits?
A: The permanent disability was not due to any of

theff:
1. Gravemisconduct
2. Notoriousnegligence
3. Habitualintoxication
4. Willfulintentiontokillhimselforanother
SOCIAL LEGISLATION

119
Q: What are the two types of permanent
disability?
A:
1. Permanent total disability (PTD) accrues
or arises when recovery from any loss or
impairment of the normal functions of
the physical and/or mental faculty of a
member which reduces or eliminates his
capacity to continue with his current
gainfuloccupationorengageinanyother
gainful occupation is medically remote.
[Section2(q)and(s)]
2. Permanent partial disability (PPD)

accrues or arises upon the irrevocable
lossorimpairmentofcertainportion/sof
the physical faculties, despite which the
member is able to pursue a gainful
occupation.(Sec.2[u])
PTD PPD
Causes
1. Completelossofsight
ofbotheyes
2. Lossof2limbsator
abovetheankleor
wrist
3. Permanentcomplete
paralysisof2limbs
4. Braininjuryresulting
inincurableimbecility
orinsanity
5. Suchothercasesas
maybedetermined
bytheGSIS
Complete and
permanent loss of the
useof:
1.Anyfinger
2.Anytoe
3.Onearm
4.Onehand
5.Onefoot
6.Oneleg
7.Oneorbothears
8.Hearingofoneorboth
ears
9.Sightofoneeye
Such other causes as

determinedbyGSIS
Benefits
1.Amemberisentitledto
the monthly income
benefit for life equivalent
totheBMPwhen:
a. Heisintheservice
at the time of the
disabilityor
b. If separated from
service
c. He has paid at
least 36 monthly
contributions
within 5 years
immediately
preceding his
disability
d. Hehaspaidatotal
of at least 180
monthly
A member is entitled to
cash payment in
accordance with the
scheduleofdisabilitiesto
be prescribed by GSIS, if
he satisfies the given
conditions of either (1)
or(2)ofSec.16(a).
contribution prior
hisdisability
e. He is not receiving
oldageretirement
pensionbenefits
2.Ifthememberdoesnot
satisfy the conditions
abovebuthasrenderedat
least 3 years service, he
shallbeadvancedthecash
payment equivalent to
100% of his average
monthlycompensationfor
each year of service he
has pad contributions but
not less than P12,000.00
which should have been
his separation benefit (he
shall no longer receive
separationbenefits)
Q: When will the payment of these benefits be

suspended?
A:
1. Incaseamemberisreemployed;or
2. Member recovers from disability as
determinedbytheGSIS;or
3. Fails to present himself for medical
examination when required by the GSIS.
(Sec.16[c])
Q: Manioso was suffering from several diseases

from1959to1994whenheworkedasAccounting
ClerkIattheBudgetCommissionuptothetimehe
was transferred and promoted to the DENR as
Senior Bookkeeper. On 95, he was
hospitalized.The results of his examinations
showed that he was suffering from Acute
Myocardial Infarction and Hypertensive Vascular
Disease. From Jan May 95 when he compulsory
retired from government service and after serving
for36yrs,henolongerreportedforwork.Hissick
leave covering said period was duly approved. In
the meantime, Manioso filed a claim for income
benefits with the GSIS which found his ailments
workrelated. He was granted Temporary Total
Disability benefits for 2 months.He was later
grantedPermanentPartialDisabilitybenefitsfor8
months. It appears that he appealed for more
disability benefits with the GSIS which subjected
him to a series of medical tests. In 97, he was
brought to the PGH several times due to Chronic
Renal Infection 2 to Obstructive Uropathy 2 to
Staghorn Calculi (L) and Benign Prostatic
Hypertrophy;DiabetesMellitusNeprophaty,Stage
IV, and Hypertensive Nephrosclerosis. He then
filed a request with the GSIS for additional
disability benefits, claiming that the ailments for


LABORLAWTEAM:
120
which he was hospitalized several times in 97
developed from his workrelated illnesses. The
GSISdisapprovedManiososrequest.
Do Maniosos ailments which later developed fall

underthecategoryofpermanenttotaldisability?
A: Yes. Under Art. 192 (c) of P.D. No. 442, as

amended (the LC), the following disabilities are
deemed total and permanent:(1) Temporary total
disability lasting continuously for more than 120
days. Under Section 2(b), Rule VII of the Amended
Rules on Ees Compensation, [a] disability is total
and permanent if as a result of the injury or
sickness the Ee is unable to perform any gainful
occupation for a continuous period exceeding 120
days,exceptasotherwiseprovidedunderRuleXof
these Rules. In the case at bar, Manioso was on
sick leave from Jan 11, 95 up to his date of
retirement on May 15, 95 or for a period of more
than 120 days. Surely, the DENR, in approving his
more than 120 days leave must have passed upon
his Medical Certificate relative to his ailments.
Maniosos disability having lasted for more than
120 days, he is entitled to PTD benefits. (Manioso,
v.GSIS,G.R.No.148323,Apr.29,2005)
Q: Does Maniosos retirement from service

preventhimfromentitlementtoPTDbenefits?
A: No. Benefits due an Ee due to workrelated

sickness shall be provided until he becomes
gainfully employed, or until his recovery or death.
None of these are present in Maniosos case. It
would be an affront to justice if Manioso, a
government Ee who had served for 36 years, is
deprived of the benefits due him for workrelated
ailments that resulted in his Permanent Total
Disability. (Manioso v. GSIS, G.R. No. 148323, Apr.
29,2005)
TemporaryDisabilityBenefits
Q:Whendoestemporarytotaldisabilityarises?
A: It accrues or arises when the impaired physical

and/ormentalfacultiescanberehabilitatedand/or
restoredtotheirnormalfunctions.(Sec2[t])
Q: What benefits are given for temporary

disability?
A:
1. Member is entitled to 75% of his current
daily compensation for each day or
fractionthereofoftotaldisabilitybenefit,
to start at the 4
th
day but not exceeding
120daysinonecalendaryearwhen:
a. Hehasexhaustedallsickleaves
b. CBAsickleavebenefits
Provided,that:
i. He was in the service at time of
disability;or
ii. If separated, he has rendered at
least 3 years of service and has
paid at least 6 monthly
contributions in the year
precedinghisdisability
2. The temporary total disability benefits
shallinnocasebelessthanP70aday.
Note: A member cannot enjoy the temporary total

disabilitybenefitandsickleavepaysimultaneously.
AnapplicationfordisabilitymustbefiledwiththeGSIS
within 4 years from the date of the occurrence of the
contingency.
SurvivorshipBenefits
Q:Whoareentitledtosurvivorshipbenefits?
A: Upon the death of a member or pensioner, his

beneficiaries shall be entitled to survivorship
benefits.Suchbenefitshallconsistof:
1. The basic survivorship pension which is

50%ofthebasicmonthlypension;and
2. The dependent childrens pension not
exceeding 50% of the basic monthly
pension
Q: Under what conditions are the primary

beneficiaries entitled to the basic monthly
pension?
A: Upon the death of a member, the primary

beneficiariesshallbeentitledto:
1. Survivorship pension: Provided, That the

deceased:
a. was in the service at the time of his
death;or
b. if separated from the service, has
rendered at least 3 years of service
atthetimeofhisdeathandhaspaid
36 monthly contributions within the
fiveyear period immediately
preceding his death; or has paid a
total of at least 180 monthly
contributionspriortohisdeath;or
2. The survivorship pension plus a cash

payment equivalent to 100% of his
average monthly compensation for every
year of service: Provided, That the
deceasedwasintheserviceatthetimeof
SOCIAL LEGISLATION

121
his death with at least 3 years of service;
OR
3.Acashpaymentequivalentto100%ofhis
average monthly compensation for each
year of service he paid contributions, but
not less than P12,000.00: Provided, That
the deceased has rendered at least 3
years of service prior to his death but
does not qualify for the benefits under
item (1) or (2) of this paragraph. [Sec. 21
(a)]
Q:Aftertheendoftheguaranteed30months,are
the beneficiaries still entitled to any survivorship
benefits?
A: Yes. The survivorship pension shall be paid as

follows:
1. When the dependent spouse is the only

survivor, he/she shall receive the basic
survivorshippensionforlifeoruntilheor
sheremarries;
2. When only dependent children are the

survivors, they shall be entitled to the
basic survivorship pension for as long as
they are qualified, plus the dependent
childrens pension equivalent to 10% of
the basic monthly pension for every
dependentchildnotexceeding5,counted
from the youngest and without
substitution;
3. When the survivors are the dependent

spouse and the dependent children, the
dependent spouse shall receive the basic
survivorship pension for life or until
he/she remarries, and the dependent
children shall receive the dependent
childrenspension.(Sec.21[b])
Note: The dependent children shall be entitled to the

survivorship pension as long as there are dependent
children and, thereafter, the surviving spouse shall
receive the basic survivorship pension for life or until
heorsheremarries.
Q: When are secondary beneficiaries entitled to

survivorshipbenefits?
A: In the absence of primary beneficiaries, the

secondarybeneficiariesshallbeentitledto:
1. The cash payment equivalent to 100% of

his average monthly compensation for
each year of service he paid
contributions, but not less than
P12,000.00:Provided,Thatthememberis
intheserviceatthetimeofhisdeathand
hasatleast3yearsofservice;or
2. Intheabsenceofsecondarybeneficiaries,
the benefits under this par. shall be paid
tohislegalheirs.(Sec.21[c])
Q:Whatarethebenefitsthatthebeneficiariesare
entitledtouponthedeathofthepensioner?
A:
1. Upon the death of an oldage pensioner
or a member receiving the monthly
income benefit for permanent disability,
the qualified beneficiaries shall be
entitled to the survivorship pension
defined in Sec. 20 of this Act, subject to
theprovisionsofpar.(b)ofSec.21.
2. When the pensioner dies within the
period covered by the lump sum, the
survivorship pension shall be paid only
aftertheexpirationofthesaidperiod.
Q: Gary Leseng was employed as a public school

teacherattheMarinduqueHigh.OnApril27,1997,
a memorandum was issued by the school principal
designating Gary to prepare the model dam
project, which will be the official entry of the
school in the search for Outstanding Improvised
Secondary Science Equipment for Teachers. Gary
compliedwithhissuperior'sinstructionandtook
home the project to enable himto finish before
the deadline. While working on the model dam
project, he came to contact with a live wire and
was electrocuted. The death certificate showed
that he died of cardiac arrest due to accidental
electrocution.
Bella (Garys commonlaw wife) and Jobo (his

onlyson)filedaclaimfordeathbenefitswiththe
GSISwhichwasdeniedonthe groundthatGarys
death did not arise out of and in the course of
employment and therefore not compensable
because the accident occurred in his house and
not in the school premises. Is Bella entitled to
file a claim for death benefits with the GSIS?
Why?
A: The beneficiaries of a member of the GSIS are

entitled to the benefits arising from the death
of said member. Death benefits are called
survivorship benefits under the GSIS Law. Not
being a beneficiary, Bella is not entitled to receive
survivorship benefits. She is not a beneficiary
because she is a commonlaw wife and not a legal
dependentspouse.(1991BarQuestion)
Q: Is the cause of death of Gary (cardiac arrest


LABORLAWTEAM:
122
due to accidental electrocution in his house)
compensable?Why?
A:Yes.TobecompensableundertheGSISLaw,the
deathneednotbeworkconnected.
Q: Abraham, a policeman, was on leave for a

month.Whilerestingintheirhouse,heheardtwo
of his neighbors fighting with each other.
Abraham rushed to the scene intending to
pacify the protagonists.However,hewasshotto
death by one of the protagonists. Eva Joy, a
housemaid, was Abraham's surviving spouse
whom he had abandoned for another woman
years back. When she learned of Abraham's
death, Eva Joy filed a claim with the GSIS for
death benefits. However, her claim was denied
because:(a)whenAbrahamwaskilled,hewason
leave; and (b) she was not the dependent
spouse of Abraham when he died. Resolve with
reasons whether GSIS is correct in denying the
claim.
A: Yes, because under the law, a dependent is one

whoisalegitimatespouselivingwiththeEe.
(Art. 167 [i], LC) In the problem given, Eva Joy had
been abandoned byAbrahamwhowasthenliving
already with another woman at the time of his
death.
Moreover, Abraham was on leave when he was

killed. The 24hour duty rule does not apply when
the policeman is on vacation leave. (ECC v. CA, G.R.
No. 121545, Nov. 14, 1996) Taking together
jurisprudence and the pertinent guidelines of the
ECC with respect to claims for death benefits,
namely:
1. That the Ee must be at the place where

hisworkrequireshimtobe;
2. That the Ee must have been performing
hisofficialfunctions;and
3. That if the injury is sustained elsewhere,
theEemusthavebeenexecutinganorder
for the Er, it is not difficult to understand
then why Eva Joy's claim was denied by
the GSIS. (Tancinco v. GSIS, G.R. No.
132916,Nov.16,2001)
In the present case, Abraham was resting at his

house when the incident happened; thus, he was
not at the place where his work required him to
be.AlthoughatthetimeofhisdeathAbrahamwas
performing a police function, it cannot be said
that his death occurred elsewhere other than the
place where he was supposed to be because he
was executing an order for his Er. (2005 Bar
Question)
FuneralBenefits
Q:Whatcomprisesthefuneralbenefit?
A:CashnotlessthanP12,000tobeincreasedtoat
least P18,000 after 5 years (specifically year 2002).
The amount shall be determined and specified by
theGSISthroughaninformationcirculardistributed
to all Ers for posting at their premises. (Sec. 23,
par.1)
Q:Whenwillitbepaid?
A:Uponthedeathof:
1. Anactivemember
2. A member who has been separated from
the service but is entitled to future
separationorretirementbenefits
3. A member who is a pensioner (excluding
survivorshippensioners)
4. A retiree who is at the time of his
retirement was of pensionable age, at
least 60 years old, who opted to retire
under RA 1616 (An act further amending
Sec.12, C.A. 186, as amended, by
prescribingtwoothermodesofretirement
andforotherpurposes).
LifeInsurance
Q:Whataretheclassesoflifeinsurancecoverage?
A:
1. Compulsorylifeinsurance
2. Optionallifeinsurance
Note:Theplansmaybeendowmentorordinarylife.
Q: When does compulsory life insurance coverage

takeeffect?
A: All Ees including the members of the Judiciary

and the Constitutional Commissioners except for
MembersoftheAFP,thePNP,BFPandBJMP,shall,
under such terms and conditions as may be
promulgated by the GSIS, be compulsorily covered
with life insurance, which shall automatically take
effectasfollows:
1. Those employed after the effectivity of

this Act, their insurance shall take effect
onthedateoftheiremployment;
2. For those whose insurance will mature
after the effectivity of this Act, their
insurance shall be deemed renewed on
the day following the maturity or expiry
dateoftheirinsurance;
SOCIAL LEGISLATION

123
3. For those without any life insurance as of
the effectivity of this Act, their insurance
shalltakeeffectfollowingsaideffectivity.
Q: When may a member obtain optional life

insurancecoverage?
A:
1. A member may at any time apply for
himself and/or his dependents an
insurance and/or preneed coverage
embracing:
a. Life
b. Memorialplans
c. Health
d. Education
e. Hospitalization
f. Other plans as maybe designed by
GSIS
2. Any employer may apply for group

insurancecoverageforitsemployees.
Q:WherecanGSISloansbeinvestedin?
A:
1. In direct housing loans to members and
group housing projects secured by first
mortgage giving priority to the low
incomegroups
2. In short and medium term loans to
members such as salary, policy,
educational, emergency stock purchase
plan,andothersimilarloans
Q: What is the prescriptive period to claim the

benefits?
A:
GR:4Yearsfromthedateofcontingency
XPN:Lifeinsuranceandretirement(Sec.28)
Q: What is the process for the adjudication of

claimsanddisputesregardingtheGSISbenefits?
A: The quasijudicial functions of the GSIS shall be

vestedinitsBoardofTrustees.
1. The GSIS, in appropriate cases, or any

person whose rights are or may be
prejudiced by the operations or
enforcement of R.A. 8291 and other laws
administered by the GSIS, may file a
petition before the GSIS either personally
orthroughcounsel.
2. Within 15days from receipt of the notice
of decision or award, the aggrieved party
mayappealthedecisionoftheGSISBoard
of Trustees to the CA. Appeal shall be
taken by filling a verified petition for
review with the CA. (Sec 1 to 5, Rule 43,
RulesofCourt)
3. When no appeal is perfectedand there is
no order to stay by the Board, by the CA
orbytheSC,anydecisionorawardofthe
Board shall be enforced and executed in
thesamemannerasdecisionsoftheRTC.
Note: Thesocialsecuritybenefitsshallbe
exempt from attachment, garnishment,
execution, levy or other processes issued
by the courts, quasijudicial bodies or
administrative agencies including the
Commission on Audit, disallowances, and
from all financial obligations of the
members.
Q: May a member enjoy the benefitsprovided for

in the Revised GSIS Act simultaneous with similar
benefits provided under other laws for the same
contingency?
A:Wheneverotherlawsprovidesimilarbenefitsfor
the same contingencies covered by this Act, the
memberwhoqualifiestothebenefitsshallhavethe
optiontochoosewhichbenefitswillbepaidtohim.
However,ifthebenefitsprovidedbythelawchosen
are less than the benefits provided under this Act,
theGSISshallpayonlythedifference.(Sec.55)
d.Beneficiaries
Q:Whoaretheconsideredbeneficiaries?
A:
1. Primarybeneficiaries
a. The legal dependent spouse until
he/sheremarriesand
b. Thedependentchildren.(Sec.2[g])
2. Secondarybeneficiaries
a. Thedependentparentsand
b. Subject to the restrictions on
dependent children, the legitimate
descendants.(Sec.2[h])
Q:Whoareconsidereddependents?
A:
1. Legitimate spouse dependent for support
uponthememberorpensioner;
2. Legitimate, legitimated, legally adopted
child,includingtheillegitimatechild,
a. whoisunmarried,


LABORLAWTEAM:
124
b. notgainfullyemployed,
c. not over the age of majority, or if
over the age of majority,
incapacitated and incapable of self
support due to a mental or physical
defect acquired prior to age of
majority;and
3. Parents dependent upon the member for
support.(Sec.2[f])
3.LIMITEDPORTABILITYLAW
(RA7699)
Q:WhatistheLimitedPortabilityRule?
A: A covered worker who transfers employment

fromonesectortoanotherorisemployedonboth
sectors, shall have creditable services or
contributions on both Systems credited to his
service or contribution record in each of the
Systems and shall be totalized for purposes of old
age, disability, survivorship, and other benefits in
eitherorbothSystems.(Sec.3)
All contributions paid by such member personally,

and those that were paid by his employers to both
Systems shall be considered in the processing of
benefits which he can claim from either or both
Systems.(Sec.4)
Q:How are the "portability" provisions of R.A.No.

7699 beneficial or advantageous to SSS and GSIS
members in terms of their creditable employment
servicesintheprivatesectororthegovernment,as
the case may be, for purposes of death, disability
orretirement?
A: Portability provisions of R.A. No. 7699 shall

benefit a covered worker whose creditable
services or contributions in both systems credited
tohisserviceorcontributionrecordineachofthe
system and shall be totalized for purposes of old
age, disability, survivorship and other benefits.
(Sec. 3)
The "portability" provisions of R.A. 7699 allow the

transferoffundsfortheaccountandbenefitofthe
workerwhotransfersfromonesystemtoanother.
This is advantageous to the SSS and GSIS members

for purposes of death, disability or retirement
benefits. In the event the employees transfer from
theprivatesectortothepublicsector,orviceversa,
their creditable employment services and
contributions are carried over and transferred as
well.(2005BarQuestion)
4.EMPLOYEESSCOMPENSATION
Q: Discuss briefly the Employees Compensation

Program(ECP).
A: It is the program provided for in Article 166 to

208 of the Labor Code whereby a fund known as
the State Insurance Fund (SIF) is established
through premium payments exacted from Ers and
from which the Ees and their dependents in the
event of workconnected disability or death, may
promptly secure adequate income benefit, and
medicalorrelatedbenefits.
Coverage
Q:WhoaresubjecttocoverageundertheECP?
A: ErsandtheirEesnotoversixty(60)yearsofage
are subject to compulsory coverage under this
program.
TheErmaybelongtoeitherthe:
1. Public sector covered by the GSIS, comprising

the National Government, including GOCCs,
Philippine Tuberculoses Society, the Philippine
NationalRedCros,andthePhilippineVeterans
Bank;and
2. Private sector covered by the SSS, comprising
all Ers other than those defined in the
immediatelyprecedingparagraph.
TheEemaybelongtoeitherthe:
1. Public sector comprising the employed

workers who are covered by the GSIS,
including the members of the AFP, elective
officials who are receiving regular salary and
any person employed as casual emergency,
temporary,substituteorcontractual;
2. Private sector comprising the employed
workerswhoarecoveredbytheSSS.
Q:Whendoescompulsorycoveragetakeeffect?
A:
1. Employeronthefirstdayofoperation
2. Employeeonthedayofhisemployment
Q:WhatisanOccupationalDisease?
A: One which results from the nature of the

employment, and by nature is meant conditions
which all Ees of a class are subject and which
produce the disease as a natural incident of a
particular occupation, and attach to that
SOCIAL LEGISLATION

125
occupationahazardwhichdistinguishesitfromthe
usual run of occupations and is in excess of the
hazardattendingtheemploymentingeneral
To be occupational, the disease must be one

wholly due to causes and conditions which are
normalandconstantlypresentandcharacteristicof
theparticularoccupation.
Q:WhatisSickness?
A: It means any illness definitely accepted as an

occupational disease listed by the Commission or
anyillnesscausedbyemployment,subjecttoproof
thattheriskofcontractingthesameisincreasedby
workingconditions(Art.167(l),LC).
Q:DiscussbrieflythetheoryofIncreasedRisk.
A:ThetermsicknessasdefinedinArticle167(l)of
the Labor Code is a recognition of the theory of
increased risk. To establish compensability under
thesame,theclaimantmustshowsubstantialproof
of workconnection, but what is required is merely
a reasonable workconnection and not a direct
causalrelation.Proofofactualcauseoftheailment
isnotnecessary.Thetestofevidenceofrelationof
thediseasewiththeemploymentisprobabilityand
notcertainty.(Jimenezv.EmployeesCompensation
Commission, G.R. No. L58176, March 23, 1984;
Panotesvs.ECC,G.R.No.L64802,March29,1984)
Q: May an illness not listed by the Employees

Compensation Commission as an occupational
diseasebecompensable?
A: Where the illness is not listed by the Employees

Compensation Commission as an occupational
disease, it must be established that the risk of
contracting the same is increased by working
conditions.
Q: What defenses may be interposed by the State

Insurance Fund (SIF) against a claim for
compensation made by a covered Ee or his
dependents?
A:Thefollowingdefensesmaybesetup:
1. Injury is not workconnected or the

sicknessisnotoccupational
2. Disability or death was occasioned by the
Eesintoxication,wilfulintentiontoinjure
orkillhimselforanother,orhisnotorious
negligence(Art.172,LC)
3. Nonoticeofsickness,injuryordeathwas
giventotheEr(Art.206,LC)
4. Claim was filed beyond three (3) years
fromthetimethecauseofactionaccrued
(Art.201,LC,asamendedbyP.D.1921)
Note: Notorious negligence is equivalent to gross

negligence; it is something more than mere
carelessnessorlackofforesight.
Q: Abraham Dino works as a delivery man in a

construction supply establishment owned by
Abraham Julius. One day, while Dino was making
reportsonhisdelivery,hehadanaltercationwith
Julius; irked by the disrespectful attitude of Dino,
JuliuspulledouthisgunandshotDino,hittinghim
in the spinal column and paralyzing him
completely.Juliuswasprosecutedfortheact.
1. Is the disability suffered by Abraham Dino

compensable?
2. IfAbrahamDinorecoverscompensationfrom
the SIF, can he still recover from Abraham
Juliusdamagesinthecriminalcase?Why?
A:
1. Yes.TheinjurywassustainedbyAbrahamDino
in his place of work and while in the
performanceofhisofficialfunctions.
2. No. Under Article 173 of the Labor Code, as

amendedbyP.D.1921,theliabilityoftheState
Insurance Fund under the Employees
Compensation Program shall be exclusive and
in place of all other liabilities of the Er to the
Ee or his dependents or anyone otherwise
entitled to recover damages on behalf of the
Eeorhisdependents.
Q: Socrates Benjie, a truck driver employed by a

local construction company, was injured in an
accident while on assignment in one of his
employers project in Iraq. Considering that his
injury was sustained in a foreign country, is
SocratesBenjieentitledtobenefitsundertheECP?
A:Yes.Filipinosworkingabroadintheserviceofan
Er, domestic or foreign, who carries on in the
Philippines any trade, business, industry,
undertaking or activity of any kind, are covered by
theECP.(Rule1,Section5,ECCRules;Art.169,LC)
Q: What is the Going and Coming Rule? Is this

ruleabsolute?
A: GR: In the absence of special circumstances, an

Ee injured while going to or coming from his place
ofworkisexcludedfromthebenefitsofWorkmens
CompensationAct.
XPNS:


LABORLAWTEAM:
126
1. WheretheEeisproceedingtoorfromhis
workonthepremisesoftheEr;
2. Proximity Rulewhere the Ee is about to
enter or about to leave the premises of
his Er by way of exclusive or customary
meansofingressandegress;
3. Eeischarged,whileonhiswaytoorfrom
his place of employment or at his home,
or during this employment with some
dutyorspecialerrandconnectedwithhis
employment;and
4. Where the Er as an incident of the
employment provides the means of
transportation to and from the place of
employment.
Q:WhoareentitledtobenefitsundertheECP?
A: The covered Ee, his dependents, and in case of

hisdeath,hisbeneficiaries.
Q:WhoarethedependentsoftheEe?
A:
1. Legitimate, legitimated, legally adopted
or acknowledged natural child who is
unmarried, not gainfully employed, and
not over twentyone (21) years of age or
over twentyone (21) years of age
provided he is incapacitated and
incapableofselfsupportduetoaphysical
or mental defect which is congenital or
acquiredduringminority;
2. LegitimatespouselivingwiththeEe;and
3. ParentsofsaidEewhollydependentupon
himforregularsupport.(Art.167(i),LC,as
amendedbyP.D.1921)
Q:Whoareincludedinthetermbeneficiaries?
A: "Beneficiaries" means the dependent spouse

untilheremarriesanddependentchildren,whoare
the primary beneficiaries. In their absence, the
dependent parents and subject to the restrictions
imposed on dependent children, the illegitimate
children and legitimate descendants who are the
secondary beneficiaries;Provided, that the
dependent acknowledged natural child shall be
consideredasaprimarybeneficiarywhenthereare
nootherdependentchildrenwhoarequalifiedand
eligibleformonthlyincomebenefit.(Art.167,LC,as
amendedbySec.I,P.D.1921)
Q: What are the benefits which may be enjoyed

undertheSIF?
A:
1. MedicalBenefits
2. DisabilityBenefits
3. DeathBenefits
4. FuneralBenefits
MedicalBenefit
Q: What are the conditions of entitlement to

MedicalServices?
A: For an Ee to be entitled to medical services, the

followingconditionsmustbesatisfied:
1. He has been duly reported to the System
(SSSorGSIS);
2. He sustains a permanent disability as a
resultofaninjuryorsickness;and
3. TheSystemhasbeennotifiedoftheinjury
orsicknesswhichcausedhisdisability.
DisabilityBenefit
Q:Whataredisabilitybenefits?
A: They are income benefits in case of temporary

total disability, permanent total disability and
permanentpartialdisability
Q: What are the disabilities that are considered

totalandpermanent?
A: The following disabilities shall be deemed total

andpermanent:
1. Temporary total disability lasting
continuously for more than one hundred
twenty days, except as otherwise
providedforintheRules;
3. Completelossofsightofbotheyes;
4. Lossoftwolimbsatorabovetheankleor
wrist;
5. Permanent complete paralysis of two
limbs;
6. Brain injury resulting in incurable
imbecilityorinsanity;and
7. Such cases as determined by the Medical
Director of the System and approved by
theCommission.(Art.192(c),LC)
Q: May a permanent partial disability be

converted to permanent total disability after the
Eesretirement?Why?
A:Yes.Thisisinlinewiththesocialjusticeprovision
in the Constitution. A persons disability may not
manifest itself fully at one precise moment in time
but rather over a period of time. And disability
should not be understood more on its medical
significancebutonthelossofearningcapacity.
SOCIAL LEGISLATION

127
Q: May permanent total disability arise although
the Ees does not lose the use of any part of his
body?
A: Yes. Where the Ee is unable, by reason of the

injury or sickness, to perform his customary job for
more than 120 days, permanent total disability
arises. (Ijares vs. CA, G.R. No. 105854, August 26,
1999)
DeathBenefit

deathbenefits?
A: The beneficiaries of a deceased Ee shall be

entitled to an income benefit if all of the following
conditionsaresatisfied:
1. The Ee has been duly reported to the

System;
2. He died as a result of an injury or
sickness;and
3. The System has been duly notified of his
death, as well as the injury or sickness
whichcausedhisdeath.
Q: For how long are the primary beneficiaries

entitledtothedeathbenefits?
A:
1. Dependent Spouseuntil he or she
remarries.
2. Dependent Childrenuntil they get
married, or find gainful employment, or
reachtwentyone(21)yearsofage.
3. Dependent Child suffering from physical
or mental defectuntil such defect
disappears.
Q: If an Ee suffers disability or dies before he is

duly reported for coverage to the System (SSS or
GSIS),whowillbeliableforthebenefits?
A: The Er (Sec.1, Rule X; Sec.1, Rule XI; Sec. 1, Rule

XII;Sec.1,RuleXIII;ECCRules)
FuneralBenefit
Q:Whatisthefuneralbenefit?
A: A funeral benefit of P10, 000.00 shall be paid

upon the death of a covered Ee or permanently
totallydisabledpensioner.
Q: When is an Er liable to pay a penalty to the

StateInsuranceFund(SIF)?
A: In case the employee's injury or death was due

to the failure of the employer to comply with any
law, or to install and maintain safety devices, or
takeotherprecautionsforthepreventionofinjury,
saidemployershallpaytotheStateInsuranceFund
a penalty of twentyfive percent of the lump sum
equivalent of the income benefit payable by the
System to the employee. All employers, especially
those who should have been paying a rate of
contribution higher than required of them under
thisTitle,areenjoinedtoundertakeandstrengthen
measures for the occupational health and safety of
theiremployee.(Art.200,LC)
Q:Whoarerequiredtomakecontributionstothe
SIF?
A: Contributions under this Title shall be paid in

their entirety by the employer and any contract or
device for the deduction of any portion thereof
from the wages or salaries of the employees shall
benullandvoid.(Art.183(c),LC)
The Republic of the Philippines guarantees the

benefits prescribed under this Title, and accepts
general responsibility for the solvency of the State
InsuranceFund.Incaseofanydeficiency,thesame
shall be covered by supplemental appropriation
fromthenationalgovernment.(Art.184,LC)
Q: When does the right to compensation or

benefit for loss or impairment of an Ees earning
capacity due to workrelated illness or injury
arise?
A: It arises or accrues upon, and not before, the

happening of the contingency. Hence, an Ee
acquires no vested right to a program of
compensation benefits simply because it was
operative at the time he became employed. (San
Miguel Corporation vs. NLRC, G.R. No. 57473,
August15,1988)
Q: Does recovery from the SIF bar a claim for

benefitsundertheSSSLaw?Why?
A:No,asexpresslyprovidedforinArticle173ofthe
Labor Code, payment of compensation under the
SIF shall not bar the recovery of benefits underthe
SSS Law, Republic Act No. 1161, as amended.
Benefits under the SIF accrueto the Ees concerned
duetohazardsinvolvedandaremadeaburdenon
the employment itself. On the other hand, social
security benefits are paid to SSS members by
reason of their membership therein for which they
contribute their money to a general fund. (Maao
Sugar Central Co., Inc. vs. CA, G.R. No. 83491,
August27,1990)

LABORLAWTEAM:
128
G.LABORRELATIONSLAW
1.RIGHTTOSELFORGANIZATION
a.Whomayunionizeforpurposesofcollective
bargaining
Q: What is the extent of the right to self

organization?
A:Itincludestheright:
1. To form, join and assist labor

organizations for the purpose of
collective bargaining (CB) through
representatives of their own
choosing;and
2. To engage in lawful and concerted
activitiesforthepurposeofCBorfor
theirmutualaidandprotection.(Art.
246)
Q: Who are the persons/Ees eligible to join a

labororganization(LO)forpurposesofCB?
A:Theentitiescoveredareallpersonsemployedin:
1. Commercial industrial, and agricultural
enterprises;and
2. In religious, charitable, medical or
educational institutions whether
operatingforprofitornot.(Art.243)
Q: Who are the persons/Ees eligible to join a

labororganizationformutualaidandprotection?
A:Thefollowingenjoytherighttoselforganization
formutualaidandprotection:
1. Ambulantworkers
2. Intermittentworkers
3. Itinerantworkers
4. Selfemployedpeople
5. Ruralworkers
6. Those without and definite Ers. (Art.
243)
Q:Whoarethepersons/Eesnotgrantedtheright
toselforganization:
A:
1. High level or Managerial Government
Ees.(Sec.3,E.O.180)
2. Ees of International organizations with
immunities. (ICMC v. Calleja, G.R. No.
85750,Sep.28,1990)
3. ManagerialEmployees.(Art.212ofLC)
4. Members of the AFP including the police
officers, policemen, firemen, and jail
guards.(Sec.4,E.O.180)
5. Confidential Employees. (Metrolab
Industries Inc. v. Confesor, G.R. No.
108855,Feb.28,1996)
6. Employees of cooperatives who are its
members. (Benguet Elec. Coop. v. Ferrer
Calleja, G.R. No. 79025, Dec. 29, 1989);
However they may form workers
association. (NEECO Ees Assoc. v. NLRC,
G.R.No.16066,Jan.24,2000)
7. NonEes.(RosarioBros.v.Ople,G.R.No.
L5390,July31,1984)
8. Govt Ees, including GOCCs with original
charters. (Arizala v. CA, G.R. Nos. 43633
34,Sep.14,1990)
9. Aliens without a valid working permit or
aliens with working permits but are
nationalsofacountrywhichdonotallow
Filipinos to exercise their right of self
organization and to join or assist labor
organizations. (Art. 269 of LC; D.O. No. 9
[1997],RuleII,Sec.2)
b.BargainingUnit
Q:Whatisabargainingunit?
A:ItisagroupofEesofagivenEr,comprisedofall
orlessthanalloftheentirebodyoftheEeswhich
thecollectiveinterestofalltheEesconsistentwith
equitytotheemployer,indicatetobebestsuitedto
servethereciprocalrightsanddutiesoftheparties
under the collective bargaining provisions of the
law.
Q:Whatisanappropriatebargainingunit?
A: 1.Agroupofemployees(Ees)
2. Ofagivenemployer
3. Comprised of all or less than all of the
entirebodyofEes
4. WhichthecollectiveinterestofalltheEes
consistentwithequitytotheEr
5. Indicate to be best suited to serve the
reciprocal rights and duties of the parties
underthecollectivebargainingprovisions
ofthelaw.
(1)Testtodeterminetheconstituencyofan
appropriatebargainingunit
Q:Whatarethefactorsconsideredindetermining
theappropriatenessofabargainingunit?
A:
1. WilloftheEes.(GlobeDoctrine)
LABOR RELATIONS LAW

129
2. AffinityandunityoftheEesinterest,such
as substantial similarity of work and
duties, or similarity of compensation and
working conditions. (Substantial Mutual
InterestRule)
3. Priorcollectivebargaininghistory
4. Similarity of employment status. (SMC v.
Laguesma, G.R. No. 100485, Sep. 21,
1994)
Q:Whatarethefactorsconsideredindetermining
thesubstantialmutualinterestdoctrine?
A: 1. Similarity in the scale and manner of

determiningearnings
2. Similarity in employment benefits, hours
of work, and other terms and conditions
ofemployment
3. Similarityinthekindsofworkperformed
4. Similarity in the qualifications, skills and
trainingofEes
5. Frequency of contract or interchange
amongtheEes
6. Geographicalproximity
7. Continuity and integration of production
processes
8. Common supervision and determination
oflaborrelationspolicy
9. HistoryofCB
10. DesiresoftheaffectedEesor
11. Extentofunionorganization
Q:AregisteredlaborunioninUP,ONAPUP,fileda
petition for certification election (PCE) among the
nonacademicEes.Theuniversitydidnotoppose,
however,anotherlaborunion,theAllUPWorkers
Union assents that it represents both academic
andnonacademicpersonnelandseekstouniteall
workers in 1 union. Do Ees performing academic
functions need to comprise a bargaining unit
distinctfromthatofthenonacademicEes?
A: Yes. The mutuality of interest test should be
taken into consideration. There are two classes of
rankandfileEesintheuniversitythatis,thosewho
perform academic functions such as the professors
andinstructors,andthosewhosefunctionarenon
academic who are the janitors, messengers, clerks
etc.Thus,notmuchreflectionisneededtoperceive
that the mutuality of interest which justifies the
formation of a single bargaining unit is lacking
between the two classes of Ees. (U.P. v. Ferrer
Calleja,G.R.No.96189,July14,1992)
Q:Isthebargaininghistoryadecisivefactorinthe
determination of appropriateness of bargaining
unit?
A:No.Whiletheexistenceofabargaininghistoryis
a factor that may be reckoned with in determining
the appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be
considered. The test of grouping is community or
mutuality of interests. This is so because the basic
testofanassertedbargainingunitsacceptabilityis
whetherornotitisfundamentallythecombination
whichwillbestassuretoallEestheexerciseoftheir
CB rights. (Democratic Labor Assn v. Cebu
Stevedoring Company, Inc., G.R. No. L10321, Feb.
28,1958)
Q:Whatisoneunion,onecompanypolicy?
A:GR:ItistheproliferationofunionsinanErunit.
Suchisdiscouragedasamatterofpolicyunless
therearecompellingreasonswhichwoulddeny
a certain class of Ees to the right to self
organization for purposes of collective
bargaining(CB).
XPNs:
1. Supervisory Ees who are allowed to form
their own unions apart from the rank
andfileEesand
2. ThepolicyshouldyieldtotherightofEes
to form union for purposes not contrary
tolaw,selforganizationandtoenterinto
CBnegotiations.
Note: Two companies cannot be treated into a single

bargaininguniteveniftheirbusinessesarerelated.
Subsidiaries or corporations formed out of former

divisions of a mother company following a re
organization may constitute a separate bargaining
unit.
Q: Union filed a PCE among the rank and file Ees

of three security agencies including the Veterans
Security.Thelatteropposedallegingthatthethree
security agencies have separate and distinct
corporatepersonalities.MayasinglePCEfiledbya
labor union in the three corporations instead of
filing3separatepetitions?
A: Yes. The following are indications that the 3
agencies do not exist and operate separately and
distinctly from each other with different corporate
direction and goals: 1) Veterans Security failed to
rebut the fact that they are managed through the
Utilities Management Corp with all their Ees
drawing their salaries and wages from the said
entity; 2) that the agencies have common and
interlocking incorporators and officers;3) that they
haveasinglemutualbenefitsystemandfolloweda
single system of compulsory retirement. 4) they
could easily transfer security guards of one agency


LABORLAWTEAM:
130
to another and back again by simply fillingup a
common proforma slip; 5) they always hold joint
yearly ceremonies such as the PGA Annual Awards
Ceremony; and 6) they continue to be represented
byonecounsel.
Hence, the veil of corporate fiction of the 3
agencies should be lifted for the purpose of
allowing the Ees of the 3 agencies to form single
union.Asasinglebargainingunit,theEesneednot
file 3 separate PCE. (Philippine Scout Veterans
Security and Investigation Agency v. SLE, G.R. No.
92357,July21,1993)
(2)VoluntaryRecognition
Q: What are the 3 methods of determining the
bargainingrepresentative?
A:
1. Voluntaryrecognition
2. Certificationelectionwithorwithoutrun
off
3. Consentelection
Q:Whatisvoluntaryrecognition(VR)?
A:Theprocess bywhicha legitimatelaborunionis
recognized by the employer (Er) as the exclusive
bargaining representative or agent in a bargaining
unit, reported with the Regional Office. (Sec. 1
[bbb],RuleI,BookV,IRR)
Q:WhataretherequirementsforVR?
A: The notice of VR shall be accompanied by the
originalcopyand2duplicatecopiesofthefollowing
reqts:
1. JointstatementunderoathofVR
2. Certificate of posting of joint statement

for 15 consecutive days in at least 2
conspicuous places in the establishment
ofthebargainingunit
3. Certificateofposting
4. Approximate number of Ees in the

bargaining unit and the names of those
whosupportedtherecognition
5. Statementthatthelaborunionistheonly
LLOoperatingwithinthebargainingunit.
Note: Where the notice of voluntary recognition is

sufficient in form, number and substance and where
thereisnoregisteredlaborunionoperatingwithinthe
bargaining unit concerned, the Regional Office,
through the Labor Relations Division shall, within 10
daysfromreceiptofthenotice,recordthefactofVRin
its roster of legitimate labor unions and notify the
laborunionconcerned.
Q:Whatarethethree(3)conditionstovoluntary
recognition(VR)?
A:VRrequires3concurrentconditions:
1. VR is possible only in an unorganized
establishment.
2. Onlyoneunionmustaskforrecognition.If
there 2 or more unions asking to be
recognized, the Er cannot recognize any
of them; the rivalry must be resolved
throughanelection.
3. The union voluntarily recognized should

be the majority union as indicated by the
fact that members of the bargaining unit
did not object to the projected
recognition. If no objection is raised, the
recognitionwillproceed,theDOLEwillbe
informed and CBA recognition will
commence. If objection is raised, the
recognition is barred and a certification
election or consent election will have to
takeplace.
Note: In an organized establishment, voluntary

recognitionisnotpossible.ApetitiontoholdaCEhas
tobefiledwithinthefreedomperiodwhichmeansthe
last 60 days of the 5
th
year of the expiring CBA. The
petition may be filed by any Legitimate Labor
Organization(LLO),butthepetitionmusthavewritten
support of at least 25% of the Ees in the bargaining
unit.
Q:WhereandwhentofilethepetitionforVR?
A: Within 30 days from such recognition, Er shall

submit a notice of VR with the Regional Office
which issued the recognized labor unions
certificate of registration or certificate of creation
ofacharteredlocal.
Q: What are the effects of recording of fact of
voluntaryrecognition(VR)?
A:
1. The recognized labor union shall enjoy
therights,privilegesandobligationsofan
existing bargaining agent of all the
employees(Ees)inthebargainingunit.
2. It shall also bar the filing of a petition for
certification election by any labor
LABOR RELATIONS LAW

131
organization for a period of 1 year from
thedateofentryofVR.
(3)CertificationElection
Q:Whatiscertificationelection(CE)?
A: It is the process of determining through secret
ballot the sole and exclusive representative of the
Ees in an appropriate bargaining unit, for purposes
ofCBornegotiation.(Sec.1[h],RuleI,BookV,IRR)
Note:TheprocessiscalledCEbecauseitservesasthe
official, reliable and democratic basis for the BLR to
determine and certify the union that shall be the
exclusive bargaining representative of the Ees for the
purposeofbargainingwiththeEr.
Q:Whatisthenatureofcertificationelection?
A: A certification election is not a litigation but

merely an investigation of a nonadversarial fact
finding character in which BLR plays a part of a
disinterested investigator seeking merely to
ascertain the desire of the employees as to the
matter of their representation. (Airline Pilots Assn
of the Philippines v. CIR, G.R. No. L33705, April 15,
1977)
Q:Whatisthepurposeofacertificationelection?
A:Itisameansofdeterminingtheworkerschoice
of:
1. Whether they want a union to represent

them for collective bargaining or if they
wantnouniontorepresentthematall.
2. And if they choose to have a union to
represent them, they will choose which
among the contending unions will be the
sole and exclusive bargaining
representative of the employees in the
appropriatebargainingunit.
Q: What are the issues involved in a certification

proceeding?
A: Certification proceedings directly involve two
issues:
1. Proper composition and constituency of
thebargainingunit;and
2. The veracity of majority membership
claims of the competing unions so as to
identity the one union that will serve as
the bargaining representative of the
entirebargainingunit.
Note:SomeoftheEesmaynotwanttohaveaunion;
hence, no union is one of the choices named in the
ballot. If no union wins, the company or the
bargaining unit remains ununionized for at least 12
months, the period is known as 12month bar. After
thatperiod,apetitionforaCEmaybefiledagain.
Q:Distinguishtherequisitesforapetitionfor
certificationelectionbetweenanorganizedandan
unorganizedestablishment.
A:
Art.256.ORGANIZED Art.257.UNORGANIZED
Bargainingagent
Present None
Petitionfiled
Hastobeaverified
petition
Noneedtobeverified
FreedomPeriod
NopetitionforCEexcept
within60daysbeforethe
expirationoftheCBA.
(SeeArt.253&253A)
Notapplicable.No
freedomperiod.Petition
canbefiledanytime.
Substantialsupportrule
Mustbedulysupported
by25%ofallthe
membersofthe
appropriatebargaining
unit(ABU).
Percentagebase:all
membersofanABU.
Nosubstantialsupport
rule.
Why?Intentionoflawis
tobringintheunion,to
implementpolicybehind
Art.211(a).
Note: The approval of the PCE in an unorganized

bargaining unit is NEVER appealable, the reason being
thatthelawwantstheununionizedtobeunionized.
Q: Should the consent signatures of at least 25%
of the Ees in the bargaining unit be submitted
simultaneously with the filing of the petition for
certificationelection(PCE)?
A: No, the administrative rule requiring the

simultaneous submission of the 25% consent
signatures upon the filing of PCE should not be
strictlyappliedtofrustratethedeterminationofthe
legitimate representative of the workers.
Accordingly,theCourtheldthatthemerefilingofa
PCEwithinthefreedomperiodissufficientbasisfor
the issuance of an order for the holding of a CE,
subjecttothesubmissionoftheconsentsignatures
within a reasonable period from such filing. (Port
Workers Union of the Phils. v. Laguesma, G.R. Nos.
9492930,Mar.18,1992)
Q: Who may file a petition for certification

election(PCE)?
A:
1. Anylegitimatelabororganization(LLO)


LABORLAWTEAM:
132
2. A national union or federation which has
already issued a charter certificate to its
localchapterparticipatingintheCE
3. A local chapter which has been issued a
chartercertificate
4. An Er only when requested to bargain
collectively in a bargaining unit where no
registered CBA exists. (Sec. 1, Rule VIII,
BookV,IRRasamendedbyD.O.40F03)
Note:Anationalunionorfederationfilingapetitionin
behalf of its local/chapter shall not be required to
disclose the names of the local/chapters officers and
members, but shall attach to the petition the charter
certificate it issued to its local/chapter. (Sec. 1, Rule
VIII,BookV,IRRasamendedbyD.O.40F03)
Q: May an employee intervene in the petition for

certificationelection(PCE)?
A: Yes, for the purpose of protecting his individual

right. (Sec. 1, Rule VIII, Book V, IRR as amended by
D.O.4003)
Q:WhereisPCEfiled?
A: It shall be filed with the Regional Office which

issued the petitioning union's certificate of
registration/certificate of creation of chartered
local.(ImplementingRules,asamendedbyD.O.40
03)
Q:WhoshallhearandresolvethePCE?
A:TheMediatorArbiter.
Q:WhentofilePCE?
A: The proper time to file the PCE depends on

whether the Certified Bargaining Unit has a CBA or
not:
1. IfithasnoCBA,thepetitionmaybefiled
anytime outside the 12month bar
(certificationyear).
2. IfithasCBA,itcanbefiledonlywithinthe
last60daysofthe5
th
yearoftheCBA.
Note: At the expiration of the freedom period, the Er

shall continue to recognize the majority status of the
incumbentbargainingagentwherenoPCEisfiled.
Q: Distinguish union election from certification

election.
A:
UNIONELECTION CERTIFICATIONELECTION
Heldpursuanttothe
unionsconstitutionand
Theprocessisordered
andsupervisedbyDOLE
bylaws
Righttovoteisenjoyed
onlybyunionmembers
AllEeswhetherunionor
nonunionmemberswho
belongtotheappropriate
bargainingunitcanvote
Winnersofunionelection
becomeofficersand
representativesofthe
uniononly
ThewinnerinaCEisan
entity,aunion,which
becomesthe
representativeofthe
wholebargainingunit
thatincludeseventhe
membersofthedefeated
unions.
Note: Both in CE and union election, the prescribed

proceduresshouldbefollowed.
Q:Cana"nounion"wininacertificationElection
(CE)?
A:Yes.BecausetheobjectiveinaCEistoascertain
the majority representation of the bargaining
representative, if the Ees desire to be represented
at all by anyone. Hence, no union is one of the
choicesinaCE.(2006BarQuestion)
AlternativeAnswer:
No.AnounioncannotwininaCE.Thepurposeofa
CE is to select an excusive bargaining agent and a
no union vote would precisely mean that thevoter
isnotchoosinganyofthecontendingunions.Ifthe
nounion votes constitute a majority of the valid
votes cast, this fact will all the more mean that no
union won in CE. A oneyear bar will consequently
stop the holding of another CE to allow the Er to
enjoyindustrialpeaceforatleastoneyear.
Q: In what instance may a PCE be filed outside
the freedom period of acurrentCBA?
A: As a general rule, in an establishment where
there is a CBA in force and effect, a PCE may be
filed only during the freedom period of such CBA.
But to have that effect, the CBA should have been
filedandregisteredwiththeDOLE.(Art.231,253A
and256,LC).(1997BarQuestion)
Thus,aCBAthathasnotbeenfiledandregistered
with the DOLE cannot be a bar to a CE and such
electioncanbeheldoutsidethefreedomperiodof
suchCBA.
AlternativeAnswer:
APCEmaybefiledoutsidethefreedomperiodof
a current CBA ifsuch CBA isa new CBA that has
been prematurely entered into, meaning, it was
entered into before the expiry date of the old
CBA. The filing of the PCE shall be within the
LABOR RELATIONS LAW

133
freedomperiodoftheoldCBAwhichisoutsidethe
freedom period of the new CBA that had been
prematurelyenteredinto.
Q: Are probationary employees (Ees) entitled to
voteinaCE?Why?
A: Yes, in a CE, all rankandfile Ees in the
appropriate bargaining unit (ABU) are entitled to
vote. This principle is clearly stated in Art. 255 of
the LC which states that the "labor organization
designatedorselectedbythemajorityoftheEesin
such unit shall be the exclusive representative of
the Ees in such unit for the purpose of collective
bargaining(CB)."
CB covers all aspects of the employment relation
and the resultant CBA negotiated by the certified
unionbindsallEesinthebargainingunit.Hence,all
rankandfileEes,probationaryorpermanent,have
a substantial interest in the selection of the
bargaining representative. The LC makes no
distinction as to their employment status as basis
for eligibility to vote in the petition for CE. The
law refers to "all" the Ees in the bargaining unit.
All they need to be eligible to vote is to belong
to the "bargaining unit" (Airtime Specialists, Inc. v.
FerrerCalleja, G.R. No. 8061216, Dec. 29, 1989).
(1999BarQuestion)
Q:Whatisdirectcertification?
A: It is the process whereby the MedArbiter
directly certifies a labor organization of an
appropriate bargaining unit (ABU) of a company
after a showing that such petition is supported by
atleastamajorityoftheEesinthebargainingunit.
Q: Does the failure of SAMAFIL (an independent
union) to prove its affiliation with NAFLUKMU
federation affect its right to file a PCE as an
independentunion?
A: No, as a LLO, it has the right to file a PCEon its
own beyond question. Its failure to prove its
affiliation with the NAFLUKMU cannot affect its
right to file said PCE as an independent union. At
the most, its failure will result in an ineffective
affiliationwithNAFLUKMU.Despiteaffiliation,the
local union remains the basic unitfree to serve the
common interest of all its members and pursue its
own interests independently of the federation.
(Samahan ng mga Manggagawa sa Filsystems v.
SLE,G.R.No.128067,June5,1998)
Q: May illegally dismissed Ees of the company
participateinthecertificationelection(CE)?
A: Yes, it is now wellsettled that Ees who have
been improperly laid off but who have at present
an unabandoned right to or expectation of re
employment,areeligibletovoteinCEs.Thus,and
to repeat, if the dismissal is under question, as in
the case now at bar whereby a case of illegal
dismissal and/or ULP was filed, the Ees concerned
could still qualify to vote in the elections. (Phil.
Fruits & Vegetables Industries v. Torres, G.R. No.
92391,July3,1992)
Q:Isdirectcertification(DC)stillallowed?
A: No. Even in a case where a union has filed a
petition for CE, the mere fact that there was no
opposition does not warrant a DC. More so in a
casewhentherequiredproofisnotpresentedinan
appropriate proceeding and the basis of the DC is
the unions selfserving assertion that it enjoys the
support of the majority of the Ees, without
subjecting such assertion to the test of competing
claims. (Samahang Manggagawa sa Permex v.
Secretary,G.R.No.107792,Mar.2,1998)
Q:WhatarethegroundsfordenyingthePCE?
A:
1. The petitioning union or federation is not
listed in the DOLEs registry of legitimate
labor unions or that its registration
certificate legal personality has been
revokedorcancelledwithfinality
2. Failure of a local chapter or national
union/federation to submit a duly issued
charter certificate upon filing of the
petition
3. The petition was filed before or after the
FREEDOM PERIOD of a duly registered
CBA; provided that the 60day period
based on the original CBA shall not be
affectedbyanyamendment,extensionor
renewaloftheCBA;(contractbarrule)
4. The petition was filed within 1 year from
entry of voluntary recognition or within
thesameperiodfromavalidcertification,
consentorrunoffelectionandnoappeal
ontheresultsofthecertification,consent
or runoff election is pending; (12month
bar;certificationyearbarrule)
5. A duly certified union has commenced
and sustained negotiations with the Er in
accordancewithArt.250oftheLCwithin
the1yearperiod.(negotiationbarrule)
6. There exists a bargaining deadlock which
had been submitted to conciliation or
arbitration or had become the subject of
avalidnoticeofstrikeorlockouttowhich
an incumbent or certified bargaining
agentisaparty.(deadlockbarrule)


LABORLAWTEAM:
134
7. In case of an organized establishment,
failure to submit the 25% support reqt
forthefilingofthePCE.
8. Nonappearance of the petitioner for 2
consecutive scheduled conferences
before the medarbiter despite due
notice,and
9. AbsenceofErEerelationshipbetweenall
themembersofthepetitioningunionand
the owner of the establishment where
the proposed bargaining unit is sought to
berepresented.(Sec.14[a],RuleVIII,Book
V,IRR,asamendedbyD.O.40F03)
Q: What is a prohibited ground for the

denial/suspension of the petition for certification
election?
A: The inclusion as union members of Ees outside
the bargaining unit. Said Ees are automatically
deemed removed from the list of membership of
saidunions.
Q: Does the filing of a petition to cancel the
petitioners registration cause the suspension or
dismissalofthepetitionforcertificationelection?
A: No. To serve as a ground for dismissal of a PCE,
the legal personality of the petitioner should have
beenrevokedorcancelledwithfinality.
Q: UNIDAD, a labor organization claiming to
represent the majority of the rank and file
workers of BAGSAK Toyo Manufacturing Corp.
(BMTC), filed a petition for CE during the
freedom period obtaining in said corp.
Despite the opposition thereto by SIGAW
Federation on the ground that UNIDAD was not
possessedwithalltheattributesofaduly
registered union, the MedArbiter issued an order
calling for a CE on July 25, 2001. This order was
promulgated and served on the parties on July
12, 2001. On July 14, 2001, UNIDAD submitted
and served the required documents for its
registration as an independent union, which
documentswereapprovedbytheDOLEonJuly15,
2001.
During the elections, UNIDAD won over SIGAW.
SIGAW questioned UNIDAD's victory on the
ground that UNIDAD was not a duly registered
union when it filed the petition for a CE. Shall
SIGAWscaseprosperornot?Why?
A: No, SIGAW's case will not prosper. The
application of technicalities of procedural reqts
in CE disputes will serve no lawful objective or
purpose. It is a statutory policy that no obstacles
shouldbeplacedontheholdingofaCE,(Samahang
ng Manggagawa sa Pacific Plastic vs. Laguesma,
G.R. No. 111245, Jan. 31, 1997) and that the law is
indisputablypartialtotheholdingofaCE.(Western
Agusanvs.TrajanoG.R.No.65833,May6,1991)
At any rate, UNIDAD completed all the reqts for
union registration on July 14,2001,andlegitimate
union status was accorded on July 15, 2000, or at
least10daysbeforethescheduleddateforholding
theCE.(2001BarQuestion)
Q:Whatismeantbycontractbarrule?
A: Contractbar rule means that while a valid and
registered CBA is subsisting, the BLR is not allowed
toholdanelectioncontestingthemajoritystatusof
the incumbent union except during the 60day
period immediately prior to its expiration, which
periodiscalledthefreedomperiod.
Note: In the absence of such timely notice or filing of
petition, the contract executed during the automatic
renewalperiodisabartoCE.
There shall be no amendment, alteration, or
terminationofanyoftheprovisionsoftheCBAexcept
to givenoticeof onepartysintention to amend, alter
and terminate the provisions within the freedom
period.
Q: What are the requirements in order to invoke
thecontractbarrule?
A:TheexistingCBAmust:
1. Beinwritingandsignedbyallcontracting
parties
2. Contain the terms and conditions of
employment
3. Cover employees in an appropriate
bargainingunit
4. Beforareasonableperiodorduration
5. Beratified
6. BeregisteredwiththeBLR;and
7. The violation of the contract bar rule or
the existence of a duly registered CBA
mustbespeciallypleadedasadefense.
Q: What is theeffect of an invalid or unregistered

CBA?
A: There is no bar and therefore a certification

electionmaybeheld.
Note: Registration of CBA only puts into effect the

contractbarrulebuttheCBAitselfisvalidandbinding
evenifunregistered.
Q: What are the exceptions to the contract bar

rule?
LABOR RELATIONS LAW

135
A:
1. TheCBAisunregistered
2. TheCBAisinadequateandincomplete
3. The CBA was hastily entered into
(Doctrineofprematureextension)
4. Withdrawal of affiliation from the
contracting union brought about by
schismormassdisaffiliation
5. Contract where the identity of the
representative is in doubt. (ALU v. Ferrer
Calleja,G.R.No.85085,Nov.6,1989)
6. CBAenteredintobetweentheErandthe
union during the pendency of a petition
for CE (Vassar Industries Ees Union v.
Estrella,G.R.No.L46562,Mar.31,1978)
7. CBA conducted between the Er and the
unionisnotbartoacertificationelection
filed by another union and said CBA can
be renegotiated at the option of the new
bargainingagent.(ATUv.Hon.Noriel,G.R.
No.L48367,Jan.16,1979)
8. ACBAregisteredwithfalsifiedsupporting
documents
9. CBA was concluded in violation of an
order enjoining the parties from entering
into a CBA until the issue of
representationisresolved
10. Petition is filed during the 60day
freedomperiod.
Note: Basic to the contract bar rule is the proposition

thatthedelayoftherighttoselectrepresentativescan
bejustifiedonlywherestabilityisdeemedparamount.
Excepted from the contract bar rule are certain types
of contracts which do not foster industrial stability,
such as contracts where the identity of the
representative is in doubt. Any stability derived from
such contracts must be subordinated to the Ees
freedom of choice because it does not establish the
type of industrial peace contemplated by law.
(Firestone Tire & Rubber Company Ees Union v.
Estrella,G.R.No.L4551314,Jan.6,1978)
Q: Can the BLR certify a union as the exclusive

bargaining representative after showing proof of
majority representation thru union membership
cardswithoutconductinganelection?
A: No. The LC (In Arts. 256, 257 and 258) provides
only for a CE as the mode for determining
theexclusivecollectivebargaining representative
if there is a question of representation in an
appropriatebargainingunit.(1998BarQuestion)
Q:Whendoesdeadlockarise?
A: It arises when there is an impasse, which
presupposes reasonable effort at good faith
bargaining which, despite noble intentions, did not
concludeinanagreementbetweentheparties.
Q:Whatisdeadlockbarrule?
A: A petition for certification election (PCE) cannot
be entertained if, before the filing of the PCE, a
bargaining deadlock to which an incumbent or
certified bargaining agent is a party, had been
submitted to conciliation or arbitration or had
becomethesubjectofavalidstrikeorlockout.
Q: What are the indications of a genuine
deadlock?
A:
1. Thesubmissionofthedeadlocktoathird
partyconciliatororarbitrator;and
2. The deadlock is the subject of a valid
noticestrikeorlockout.
Q:CapitolMedicalCenterEesAssociationAlliance
of Filipino Workers (CMCEAAFW) emerged as the
certified representative of the rankandfile Ees at
Capitol Medical Center (CMC). Due to CMCs
refusal to bargain collectively, CMCEAAFW filed a
noticeofstrikeandlateronstagedthestrikeafter
complying with the other legal reqts. The SLE
assumed jurisdiction over the case and issued an
order certifying the same to the NLRC for
compulsory arbitration. During all of these events
Capitol Medical Center Alliance of Concerned
employees (Ees)Unified Filipino Service Workers
filedapetitionforCEamongtheregularrankand
fileEesofCMC.ThepetitionforCEwasdismissed
and the CMC was directed to negotiate with
CMCEAAFW.WasthedismissalofthePCEproper?
A: Yes, if the law proscribes the conduct of a CE

when there is a bargaining deadlock submitted to
conciliationorarbitration,withmorereasonshould
itnotbeconductedif,despiteattemptstobringan
Er to the negotiation table by the certified
bargaining agent, there was "no reasonable effort
ingoodfaith"ontheErtobargaincollectively.
Thecircumstancesinthiscaseshouldbeconsidered
as similar in nature to a "bargaining deadlock"
whennoCEcouldbeheld.Thisisalsotomakesure
that no floodgates will be opened for the
circumvention of the law by unscrupulous Ers to
prevent any certified bargaining agent from
negotiating a CBA. Sec. 3, (Rule VIII), Book V of the
IRRshouldbeinterpretedliberallysoastoincludea
circumstance where a CBA could not be concluded
due to the failure of one party to willingly perform
its duty to bargain collectively. (Capitol Medical
Center Alliance of Concerned Ees v. Laguesma, G.R.
No.118915,Feb.4,1997)


LABORLAWTEAM:
136
Q:Shouldthecertificationelectionproceedingsbe
suspended in view of the pending case for
cancellation of the unions certificate of
registration?
A:No,thependencyofacancellationcaseisnota
ground for the dismissal or suspension of a
representation proceeding considering that a
registeredlabororganization(LO)continuestobea
legitimateoneentitledtoalltherightsappurtenant
thereto until a final valid order is issued cancelling
suchregistration.
Once a LO attains the status of a LLO it begins to
possess all of the rights and privileges granted by
law to such organizations. As such rights and
privileges ultimately affect areas which are
constitutionallyprotected,theactivitiesinwhichLO,
associations and unions are engaged directly affect
the public interest and should be zealously
protected. (Progressive Devt Corp. v. SLE, G.R. No.
115077,April18,1997)
Q:Whatisnegotiationbarrule?
A: A PCE cannot be entertained if, before the filing

of the PCE, the duly recognized or certified union
has commenced negotiations with the Er in
accordancewithArt.250oftheLC.
Q:Whatiscertificationyearrule?
A: No PCE may be filed within one year from the

date of a valid certification, consent, or runoff
electionorfromthedateofvoluntaryrecognition.
(4)RunoffElection
Q:Whatisarunoffelection?
A:Anelectionconductedwhen:
1. An election which provides for 3 or more
choices results in none of the contending
unions receiving a majority of the valid
votescast,and
2. There are no objections or challenges
whichifsustainedcanmateriallyalterthe
results,provided
3. The total number of votes for all the
contending unions is at least 50% of the
numberofvotescast.(Sec.1,RuleX,Book
V,IRR)
4. Not one of the choices obtained the
majority of the valid votes cast (50%+ 1
secondmajority);
5. The two choices which garnered the
highest votes will be voted and the one
which garners the highest number of
votes will be declared the winner
provided they get the majority votes of
thetotalvotescast.
Q:Whoarethechoicesinarunoffelection?
A: Theunionsreceivingthehighestand2
nd
highest
number of the votes cast. (Sec.2, Rule X, Book V,
IRR)
Note: No Union shall not be a choice in the runoff

election
(5)RerunElection
Q:WhendoesRerunElectiontakeplace?
A: 1.Ifonechoicereceivesapluralityofthe
voteandtheremainingchoicesresultsina
tie;or
2.Ifallchoicesreceivedthesamenumber
ofvotes.
Note:Inbothinstances,thenounionisalsoachoice.
(5)ConsentElection
Q:Whatisaconsentelection?
A: An election voluntarily agreed upon by the

parties, with or without the intervention by DOLE.
(Sec.1[h],RuleI,BookV,IRR)
Note: To afford an individual employeevoter an
informed choice where a local/chapter is the
petitioning union, the local/chapter shall secure its
certificate of creation at least 5 working days before
thedateoftheconsentelection.(Sec.1,RuleVIII,Book
V,IRRasamendedbyDO40F03)
Q: What are the requisites before a labor union
canbedeclaredawinner(doublemajorityrule)?
A:
1. Majority of the eligible voters cast their
votes.
2. Majorityofthevalidvotescastisforsuch
union.
Q:Howtodeterminethedoublemajorityrule?
A:
1. Indeterminingtheeligiblevotescast(first
majority)includespoiledballots
2. In determining valid votes (second
majority), eliminate spoiled ballots but
includedthechallengedvotes.
LABOR RELATIONS LAW

137
Q: A certification election was conducted among
the rankandfile Ees of Holiday Inn Manila
Pavilion Hotel. In view of the significant number
of segregated votes, contending unions, National
UnionofWorkersinHotels,RestaurantsandAllied
IndustriesManila Pavilion Hotel Chapter
(NUWHRAINMPHC) and Holiday Inn Manila
Pavilion Hotel Labor Union (HIMPHLU), referred
the case back to the MedArbiter to decide which
among those votes would be opened and tallied.
11 votes were initially segregated because they
were cast by dismissed Ees, albeit the legality of
their dismissal was still pending before the CA. 6
othervotesweresegregatedbecausetheEeswho
cast them were already occupying supervisory
positions at the time of the election. Still 5 other
votes were segregated on the ground that they
were cast by probationary Ees and, pursuant to
the existing CBA, such Ees cannot vote.
NUHWHRAINMPHC further avers that HIMPHLU,
which garnered 169 votes, should not be
immediatelycertifiedasthebargainingunit,asthe
opening of the 17 segregated ballots would push
the number of valid votes cast to 338, hence, the
169 votes which HIMPHLU garnered would be 1
vote short of the majority which would then
become170.
Was HIMPHLU able to obtain the required
majority for it to be certified as the exclusive
bargainingagent?
A: No, it is wellsettled that under the double
majority rule for there to be a valid certification
election, majority of the bargaining unit must have
voted and the winning union must have garnered
majorityofthevalidvotescast.
Following the ruling that all the probationary Ees
votes should be deemed valid votes while that of
the supervisory Ees should be excluded, it follows
thatthenumberofvalidvotescastwouldincrease.
Under Art. 256 of the LC, the union obtaining the
majorityofthevalidvotescastbytheeligiblevoters
shall be certified as the sole exclusive bargaining
agent of all the workers in the appropriate
bargainingunit.Thismajorityis50%+1,inthiscase
at least 170. HIMPHLU obtained 169, clearly it was
not able to obtain a majority vote. (NUWHRAIN
MPHCv.SLE,G.R.No.181531,July31,2009)
Q: Distinguish certification election, consent
election, direct certification, and runoff and re
runelections.
A:
Purpose
Participationof
MedArbiter
CertificationElection
Todeterminethesole
andexclusivebargaining
agentofalltheEesinan
appropriatebargaining
unitforthepurposeof
collectivebargaining.
RequirespetitionforCE
filedbyaunionorEr.A
MedArbitergrantsthe
petitionandanelection
officerisdesignatedby
regionaldirectorto
supervisetheelection.
Note:MedArbitermay
determineifthereisErEe
relationshipandifthe
votersareeligible.
ConsentElection
Todeterminetheissueof
majorityrepresentation
ofalltheworkersinthe
appropriateCBunit
mainlyforthepurposeof
determiningthe
administratoroftheCBA
whenthecontracting
unionsufferedmassive
disaffiliationandnotfor
thepurposeof
determiningthe
bargainingagentfor
purposeofCB.
Heldbyagreementofthe
unionswithorwithout
theparticipationofthe
MedArbiter.
DirectCertification
ALOisdirectlycertified
asanappropriate
bargainingunitofa
companyuponshowing
thatpetitionissupported
byatleastamajorityof
theEesinthebargaining
unit.
Note:Directcertificationis
nolongerallowed.
MedArbiterdirectly
certifiesthatalabor
unionistheexclusiveCB
representativeoftheEes
ofanappropriate
bargainingunitwithout
holdingaCE,butmerely
onthebasisofevidence
ofinsupportofthe
unionsclaimthatisthe
choiceofthemajorityof
theEes.
RunOffElection
Takesplacebetweenthe
unionswhoreceivedthe
twohighestnumberof
votesinaCEwith3or
morechoices,wherenot
oneoftheunions
obtainedthemajorityof
thevalidvotescast,
providedthetotalunion
votesisatleast50%of
thevotescast.
RerunElection
Takes place in 2
instances:
1. Ifonechoicereceivesa
plurality of the vote
and the remaining
choices results in a tie;
or
2. If all choices received
the same number of


LABORLAWTEAM:
138
votes.
In both instances, the no

unionisalsoachoice.
Note: Petition for cancellation of registration is not a

bar to a PCE. No prejudicial question shall be
entertained in a petition for certification election.
(D.O.4003)
(7)AffiliationandDisaffiliationoftheLocalUnion
fromtheMotherUnion
Q:Howisalocalchaptercreated?
A: A duly registered federation or national union
may directly create a local/ chapter by issuing a
chartercertificateindicatingtheestablishmentofa
local/chapter.
1. Thechaptershallacquirelegalpersonality
only for purposes of filing a petition for
certificationelectionfromthedateitwas
issuedachartercertificate
2. The chapter shall be entitled to all other
rights and privileges of a legitimate labor
organization (LLO) only upon the
submissionofthefollowingdocumentsin
additiontoitschartercertificate:
a. Names of the chapters officers,
their addresses, and the principal
officeofthechapter
b. Chaptersconstitutionandbylaws
c. Where the chapters constitution
and bylaws are the same as that of
thefederationorthenationalunion,
this fact shall be indicated
accordingly
3. The genuineness and due execution of
thesupportingrequirementsshallbe:
a. Certifiedunderoathbythesecretary
ortreasurerofthelocal/chapter,and
b. Attestedtobyitspresident(Sec.2[e],
Rule III, Book V, IRR, as amended by
D.O.40F03)
Note: Under the LC and the rules, the power granted

to LOs to directly create a chapter or local through
chartering is given to a federation or national union
only, not to a trade union center. (SMCEU v. San
Miguel Packaging Products Ees Union, G.R. No.
171153,Sep.12,2007)
Q:Whereistheapplicationforregistrationfiled?
A:
1. Independent labor unions, chartered
locals or workers associations It is filed
with the Regional Office (RO). where the
applicant principally operates. It shall be
processedbytheLaborRelationsDivision
attheRO.
2. Federations, national unions or workers

association operating in more than one
regionItisfiledwiththeBLRoftheRO,
butshallbeprocessedbytheBLR.
Q:WhatisthedutyoftheBLRafteraLOhadfiled
the necessary papers and documents for
registration?
A:ItbecomesmandatoryfortheBLRtocheckifthe
reqts under Art. 234 of the LC have been
sedulously complied with. If its application for
registration is vitiated by falsification and serious
irregularities,especiallythoseappearingontheface
oftheapplicationandthesupportingdocuments,a
LO should be denied recognition as a LLO.
(ProgressiveDevtCorp.PizzaHutv.Laguesma,G.R.
No.115077,April18,1997)
Q: Within what period should the BLR act on the
applicationssubmittedbeforeit?
A: It shall act on all applications for registration
within10mdaysfromreceipteitherby:
1. Approving the application and issuing the

certificate of registration/acknowledging
thenotice/report;or
2. Denyingtheapplication/noticeforfailure
of the applicant to comply with the
requirementsforregistration/notice(D.O.
4003,RuleIV,Sec.4,seriesof2003)
Note:Allrequisitedocumentsshallbe:
1. Certified under oath by the secretary or
treasurer of the organization, as the case
maybeand
2. AttestedtoitbyitsPresident.
Q:MaytheBLRreviewtheissuanceofacertificate
ofregistration?
A: No. The BLR has the duty to review the

application for registration not the issuance of a
certificateofregistration.
Q: Why is a lesser requirement imposed for a

charteredlocal?
A: Theintentofthelawinimposinglesserreqtsin
the case of branch or local of a registered
federation or national union is to encourage the
affiliation of a local union in order to increase the
local unions bargaining power respecting terms
and conditions of labor. (Progressive Devt Corp v.
SLE,G.R.No.96425,Feb.4,1992)
LABOR RELATIONS LAW

139
Q:Whataretherequirementsbeforeafederation
canbeissuedacertificateofregistration?
A: The application for registration of federations
and national unions shall be accompanied by the
followingdocuments:
1. A statement indicating the name of the
applicant labor union, its principal
address,thenameofitsofficersandtheir
respectiveaddresses;
2. The minutes of the organizational

meeting(s) and the list of Ees who
participatedinthesaidmeeting(s);
3. The annual financial reports if the

applicant union has been in existence for
1 or more years, unless it has not
collectedanyamountfromthemembers,
in which case a statement to this effect
shallbeincludedintheapplication;
4. Theapplicantunion'sconstitutionandby
laws, minutes of its adoption or
ratification, and the list of the members
whoparticipatedinit.Thelistofratifying
members shall be dispensed with where
the constitution and bylaws was ratified
or adopted during the organizational
meeting(s). In such a case, the factual
circumstances of the ratification shall be
recorded in the minutes of the
organizationalmeeting(s);
5. The resolution of affiliation of at least 10

LLOs, whether independent unions or
charteredlocals,eachofwhichmustbea
duly certified or recognized bargaining
agentintheestablishmentwhereitseeks
tooperate;and
6. The name and addresses of the

companies where the affiliates operate
and the list of all the members in each
company involved. (D.O. 4003, Rule, III,
Sec.2B,seriesof2003)
Q:Whataretherequirementsforaffiliation?
A: The report of affiliation of independently

registered labor unions with a federation or
national union shall be accompanied by the
followingdocuments:
1. Resolution of the labor union's board of
directorsapprovingtheaffiliation;
2. Minutes of the general membership
meetingapprovingtheaffiliation;
3. Thetotalnumberofmemberscomprising
the labor union and the names of
memberswhoapprovedtheaffiliation;
4. The certificate of affiliation issued by the
federation in favor of the independently
registeredlaborunion;and
5. Written notice to the employer
concerned if the affiliating union is the
incumbent bargaining agent. (D.O. 4003,
Rule,III,Sec.7,seriesof2003)
Q:Whatistheeffectofaffiliation?
A:Thelaborunionthataffiliateswithafederationis
subjecttothelawsoftheparentbodyunderwhose
authority the local union functions. The
constitution, bylaws and rules of the mother
federation,togetherwiththecharteritissuestothe
local union, constitutes an enforceable contract
between them and between the members of the
subordinate union inter se. Thus, pursuant to the
constitution and bylaws, the federation has the
right to investigate andexpel members of the local
union. (Villar v. Inciong, G.R. No. L5028384, April
20,1983)
Q: May a local union disaffiliate from the

federation?
A:
GR: A labor union may disaffiliate from the
mother union to form an independent union
only during the 60day freedom period
immediately preceding the expiration of the
CBA.
XPN: Even before the onset of the freedom
period,disaffiliationmaystillbecarriedout,but
such disaffiliation must be effected by the
majority of the union members in the
bargainingunit.
Note:Thishappenswhenthereisasubstantialshiftin
allegianceon the part ofthe majority of the members
of the union. In such a case, however, the CBA
continues to bind the members of the new or
disaffiliated and independent union up to determine
the union which shall administer the CBA may be
conducted. (ANGLOKMU v. Samahan ng
Manggagawang Nagkakaisa sa Manila Bay Spinning
MillsatJ.P.Coats,G.R.No.118562,July5,1996)
Q:Whatisthelimitationtodisaffiliation?
A: Disaffiliation should be in accordance with the
rulesandproceduresstatedintheconstitutionand
bylaws of the federation. A local union may
disaffiliatewithitsmotherfederationprovidedthat
thereisnoenforceableprovisioninthefederations


LABORLAWTEAM:
140
constitution preventing disaffiliation of a local
union. (Tropical Hut Ees Union v. Tropical Hut, G.R.
Nos.L4349599,Jan.20,1990)
Note: A prohibition to disaffiliate in the Federations
constitutionandbylawsisvalidbecauseitisintended
foritsownprotection.
Q:Whatistheeffectofcancellationofregistration
ofafederationoranationalunion?
A:
GR: It shall operate to divest its locals/chapters
oftheirstatusasLLO.
XPN: Locals/chapters retain status as LLO if
theyarecoveredbyadulyregisteredCBA.
Note Locals or chapters who retained status as LLO
shall be allowed to register as independent unions. If
they fail to register, they shall lose their legitimate
statusupontheexpirationoftheCBA.
Q: PSEA is a local union in Skylander company
which is affiliated with PAFLU. PSEA won the
certification election among the rank and file Ees
oftheSkylandercompanybutitsrivalunionPSEA
WATU protested the results. Pending the
resolution of such controversy, PSEA disaffiliated
with PAFLU and hence affiliated with NCW which
was supportedby its members. May a local union
disaffiliatewithitsmotherfederationpendingthe
settlement of the status as the sole and exclusive
bargainingagent?
A: Yes. The pendency of an election protest does
not bar the valid disaffiliation of the local union
which was supported by the majority of its
members.
The right of a local union to disaffiliate with the
federation in the absence of any stipulation in the
constitution and bylaws of the federation
prohibiting disaffiliation is well settled. Local
unions remain as the basic unit of association, free
toservetheirowninterestsubjecttotherestraints
imposedbytheconstitutionandbylawsofnational
federationandarefreetorenouncesuchaffiliation
upon the terms and conditions laid down in the
agreement which brought such affiliation to
existence.Inthecaseatbar,noprohibitionexisted
under the constitution and bylaws of the
federation. Hence, the union may freely disaffiliate
with the federation. (Philippine Skylanders v. NLRC,
G.R.No.127374,Jan.31,2002)
Q: Distinguish between an independently
registeredandunregisteredcharteredlocalunion.
A:
CHARTEREDLOCALUNION
Independently
Registered
Unregistered
Howtoaffiliate?
Bysigningcontractof
affiliation
Byapplicationofwiththe
federationforthe
issuanceofacharter
certificatetobe
submittedtotheBLR
EffectofDisaffiliationtotheunion(local)
Wouldnotaffectitsbeing
aLLOandthereforeit
wouldcontinuetohave
legalpersonalityandto
possesallrightsand
privilegesofLLO.
WouldceasetobeLLO
andwouldnolonger
havethelegalpersonality
andtherightsand
privilegesgrantedbylaw
toLLO,unlessthelocal
chapteriscoveredbyits
dulyregisteredCBA.
EffectofDisaffiliationtotheCBA
AnexistingCBAwould
continuetobevalidas
theLOcancontinue
administeringthenCBA.
TheCBAwouldcontinue
tobevalid.Thelocal
chapterwillnotloseits
personality,unlessit
registersanew.
EntitlementtounionduesafterDisaffiliation
LOentitledtotheunion
duesandnotthe
federationfromwhich
theLOdisaffiliated.
Unionduesmayno
longerbecollectedas
therewouldnolongerbe
anylaborunionthatis
allowedtocollectsuch
unionduesfromtheEes.
Q:Whatistheformofthedecisionofthedenialof
applicationforregistration?
A:Itshallbe:
1. Inwriting
2. Stating in clear terms the reason for the
decision
3. Applicantunionmustbefurnishedacopy
ofsaiddecision.
Q:Isthedenialofregistrationappealable?
A:Yes.
1. Decisions of the Regional Office shall be
appealabletotheBLRandCA.
2. The BLRs decisions on cases appealed
from Regional Director are final and not
appealabletotheSLE.
3. Decisions of the BLR denying the
registration of a LO (federation or
national union) is appealable to the SLE
within 10 days from receipt of the
decision,ongroundsof:
a. Graveabuseofdiscretion;or
b. Grossincompetence.
4. DecisionofSLEappealabletoCA.
LABOR RELATIONS LAW

141
Q: How is appeal taken with regard to denial or
cancellationofregistration?
A:
DENIALORCANCELLATIONOFREGISTRATION
ByRegionaloffice ByBLR
Transmitrecordswithin24hours
fromreceiptoftheMemoofAppeal
BLRwilldecideonthe
matterwithin20days
fromreceiptofthe
records
SLEdecidesonthematter
within20daysfrom
receiptofrecords
AppealtoCAviaRule65
Note: Appeal is by memo of appeal within 10 days

fromreceiptofnotice.
Q:Whocancelsthecertificateofregistration?
A: The certificate of registration of any LLO,
whether national or local, may be cancelled by the
BLR, after due hearing, only on the grounds
specifiedinArt.239.(asamendedbyR.A.9481)
Q: What is theeffect of a petition for cancellation
orofunionregistration?
A: It shall not suspend the proceedings for
certification election (CE) nor shall it prevent the
filingofCE.
In case of cancellation, nothing herein shall restrict
the right of the union to seek just and equitable
remediesintheappropriatecourts.
Q: Where is a petition for cancellation of
registration or application for voluntary
dissolutionfiled?
A:
1. For legitimate independent labor unions,
local/chapter and workers association
It shall be filed with the Regional Office
which issued its certificate of registration
orcreation.
2. For federations, national or industry and
tradeunioncentersItshallbefiledwith
the BLR. (Sec. 1, Rule XIV, Book V, IRR as
amendedbyD.O.40F03)
Q: Who may file a petition for cancellation of

registration?
A:
1. For legitimate individual labor union,
charteredlocalandworkersassociation
Any partyininterest may file a petition
for cancellation of registration if the
groundis:
a. Failure to comply with any of the
reqtsunderArt.234,237and238of
theLC.
b. Violation of any provision under Art.
239,LC.
2. For federations, national or industry

unions, trade union centers Only
members of the labor organization (LO)
concerned may file if the grounds are
actions involving violations of Art. 241,
subjecttothe30%rule.
Q:Whatistheeffectofcancellationofregistration
if the cancellation is made in the course of the
proceedings?
A: Where a labor union is a party in a proceeding
and later it loses its registration permit in the
course or during the pendency of the case, such
union may continue as party without need of
substitution of parties, subject however to the
understanding that whatever decision may be
renderedwillbebindingonlyuponthosemembers
of the union who have not signified their desire to
withdrawfromthecasebeforeitstrialanddecision
onthemerits.
Note: Rationale: Principle of agency is applied the
Eesaretheprincipals,andtheLOismerelyanagentof
the former, consequently, the cancellation of the
unions registration would not deprive the consenting
memberEesoftheirrighttocontinuethecaseasthey
areconsideredastheprincipals.
Q: What are the groundsfor cancellationof union
registration?
A:
1. Misrepresentation, false statement or
fraudinconnectionwiththe:
a. Adoption or application of the
constitution and bylaws or
amendmentsthereto
b. Minutesofratificationand
c. Listofmemberswhotookpartinthe
ratification;
d. Electionofofficers
e. Minutes of the election of officers
and
f. Listofvoters(Art.239asamended)
2. Voluntary dissolution by the members.

(asamendedbyR.A.9481)
Note:Apronouncementastothelegalityofthestrike
isnotwithinthemeaningofArt.239oftheLC.


LABORLAWTEAM:
142
Q: What are the prohibited grounds for
cancellationofunionregistration?
A:
1. TheinclusionasunionmemberofEeswho
are outside the bargaining unit shall not
be a ground to cancel the union
registration. The ineligible Ees are
automatically deemd removed from the
list of membership of the union as.(Art.
245AasamendedbyRA9481)
2. The affiliation of the rankandfile and
supervisory unions operating within the
same establishment to the same
federationornationalunionshallnotbea
ground to cancel registration of either
union. (Sec. 6, Rule XIV, Book V, as
insertedbyD.O.40F03)
Q: How is voluntary cancellation of registration

made?
A: Registration may be cancelled by the

organizationitselfprovided:
1. At least of its general membership

votes to dissolve the organization, in a
meetingdulycalledforthatpurpose;and
2. An application to cancel registration is

thereafter submitted by the board of the
organization,attestedbyitspresident.
Q: What are the reportorial requirements

required to be submitted by a legitimate labor
organization(LLO)?
A: The following documents are required to be

submittedtoBLRbytheLLOconcerned:
1. Within 30 days from adoption or
ratification of the constitution and by
laws(CBL)oramendmentsthereto:
a. CBLoramendmentsthereto
b. Minutesofratification
c. Listofmemberswhotookpartinthe
ratification of the constitution and
bylaws;
2. Within 30 days from date of election or
appointment:
a. Listofelectedandappointedofficers
and agents entrusted with the
handingofunionfunds
b. Minutesofelectionofofficers
c. Listofvoters
3. Annual financial report within 30 days
afterthecloseofeveryfiscalyear
4. List of members at least once a year or
wheneverrequiredbytheBureau.(Sec.1,
Rule V, Book V, IRR, as amended by D.O.
40F03)
Note: Failure to submit reportorial requirements is no

longer a ground for cancellation but shall subject the
erring officers or members to suspension, expulsion
from membership, or any appropriate penalty (Art.
242A,asinsertedbyR.A.9481).
Q:Whatisthesuccessorininterestdoctrine?
A:
GR: It is when an Er with an existing CBA is
succeeded by another Er, the successorin
interest who is the buyer in good faith has no
liability to the Ees in continuing employment
and the bargaining agreement because these
contractsareinpersonam.
XPNs:
1. When the successorininterest expressly
assumesanobligation;
2. The sale is a device to circumvent the
obligation;or
3. Thesaleortransferismadeinbadfaith.
(a)SubstitutionaryDoctrine
Q:Whatisthesubstitutionarydoctrine?
A: It is where there occurs a shift in the Ees union
allegiance after the execution of a collective
bargaining (CB) contract with the Er, the Ees can
change their agent (labor union) but the CB
contract which is still subsisting continues to bind
the Ees up to its expiration date. They may
however, bargain for the shortening of said
expirationdate.
Note: The Er cannot revoke the validly executed CB
contract with their Er by the simple expedient of
changing their bargaining agent. The new agent must
respectthecontract.(BenguetConsolidatedInc.v.BCI
EesandWorkersUnionPAFLU,G.R.No.L24711,April
30,1968)
It cannot be invoked to support the contention that a
newlycertifiedCBagentautomaticallyassumesallthe
personalundertakingsoftheformeragentliketheno
strikeclauseintheCBAexecutedbythelatter.
(8)UnionDuesandSpecialAssessments
(a)UnionDues
Q:Whatareuniondues?
A: These are regular monthly contributions paid by

the members to the union in exchange for the
LABOR RELATIONS LAW

143
benefits given to them by the CBA and to finance
theactivitiesoftheunioninrepresentingtheunion.
Q:Whatischeckoff?
A:ItisamethodofdeductingfromanEespayata
prescribed period, the amounts due the union for
fees,finesandassessments.
Deductionsforunionservicefeesareauthorizedby
law and do not require individual checkoff
authorizations.
Q:Whatisthenatureandpurposeofcheckoff?
A:Unionduesarethelifebloodoftheunion.
All unions are authorized to collect reasonable
membership fees, union dues, assessments and
fines and other contributions for labor education
and research, mutual death and hospitalization
benefits, welfare fund, strike fund and credit and
cooperativeundertakings.(Art.277[a])
Q:Whataretherequisitesofavalidcheckoff?
A:
GR: No special assessments, attys fees,
negotiationfeesoranyotherextraordinaryfees
maybecheckedofffromanyamountduetoan
employee (Ee) without individual written
authorizationdulysignedbytheEe.
Theauthorizationshouldspecificallystatethe:
1. Amount
2. Purpose&
3. Beneficiaryofthededuction.
XPNs:
1. FormandatoryactivitiesundertheLC
2. Foragencyfees
3. When nonmembers of the union avail of
thebenefitsoftheCBA:
a. Nonmembers may be assessed
unionduesequivalenttothatpaidby
unionmembers;
b. Only by board resolution approved
by majority of the members in
general meeting called for the
purpose.
(b)SpecialAssessments
Q: What are special assessments or extraordinary

fees?
A:Theseareassessmentsforanypurposeorobject
other than those expressly provided by the labor
organizationsconstitutionandbylaws.
Q: What are the requisites for a valid levy of
specialassessmentorextraordinaryfees?
A:
1. Authorization by a written resolution of
themajorityofallmembersatthegeneral
membership meeting duly called for that
purpose;
2. Secretarys record of the minutes of the
meeting,whichmustincludethe:
a. Listofmemberspresent
b. Votescast
c. Purposeofthespecialassessments
d. Recipientofsuchassessments;
3. Individual written authorization to check
off duly signed by the Ee concerned to
levysuchassessments.
Q: What is the effect of failure to strictly comply

therequirementssetbylaw?
A: It shall invalidate the questioned special

assessments. Substantial compliance of the
requirementsisnotenoughinviewofthefactthat
the special assessment will diminish the
compensationofunionmembers.(Palacolv.Ferrer
Calleja,G.R.No.85333,Feb.26,1990)
Q:Whohasjurisdictionovercheckoffdisputes?
A: Being an intraunion dispute, the Regional
Director of DOLE has jurisdiction over check off
disputes.
Q:Distinguishcheckofffromspecialassessments.
A:
Checkoff SpecialAssessment
Howapproved
(UnionDues)
Byobtainingtheindividual
writtenauthorizationduly
signedbytheEewhich
mustspecify:
1. Amount
2. Purpose
3. Beneficiary
Bywrittenresolution
approvedbymajorityof
allthemembersatthe
meetingcalledforthat
purpose.
Exceptiontosuchrequirement


LABORLAWTEAM:
144
(Agencyfees)
Notnecessarywhen:
1. Formandatoryactivities
undertheLC
2. Foragencyfees
3. Whennonmembersof
theunionavailofthe
benefitsoftheCBA:
a. Saidnonmembers
maybeassessed
unionduesequivalent
tothatpaidbyunion
members;
b. OnlybyBoard
resolutionapproved
bymajorityofthe
membersingeneral
meetingcalledforthe
purpose
Noexception;written
resolutionismandatory
inallinstances.
Q: Are Ees who are members of another union

consideredfreeriders?
A: No. When the union bids to become the
bargaining agent, it voluntarily assumes the
responsibilityofrepresentingalltheEes.
(9)AgencyFees
Q:Whatisanagencyfee?
A:Itisanamountequivalenttouniondues,whicha
nonunion member pays to the union because he
benefitsfromtheCBAnegotiatedbytheunion.
Note:AgencyfeecannotbeimposedonEesalreadyin
the service and are members of another union. If a
closed shop agreement cannot be applied to them,
neither may an agency fee, as a lesser form of union
security, be imposed to them. Payment by nonunion
membersofagencyfeesdoesnotamounttoanunjust
enrichment basically the purpose of such dues is to
avoid discrimination between union and nonunion
members.
Q: What are the requisites for assessment of Agency
fees(Art.248[e],LC)?
A:
1. Theemployeeispartofthebargainingunit
2. Heisnotamemberoftheunion
3. HepartookofthebenefitsoftheCBA
Note:TheindividualauthorizationrequiredunderArt.
242, par. O of the LC shall not apply to the non
members of the recognized collective bargaining
agent.
Q:Distinguishunionduesfromagencyfees.
A:
UnionDues AgencyFee
Isdeductedfrom
membersforthe
paymentofuniondues
Isdeductedfromnon
membersofthe
bargainingagent(union)
fortheenjoymentofthe
benefitsundertheCBA.
Maynotbededucted
fromthesalariesofthe
unionmemberswithout
thewrittenconsentof
theworkersaffected.
Maybedeductedfrom
thesalaryoftheEes
withouttheirwritten
consent.
2.RIGHTTOCOLLECTIVEBARGAINING
Q:Whatiscollectivebargaining(CB)?
A:
1. It is the process of negotiation by an
organization or group of workmen, in
behalfofitsmembers,withtheemployer
(Er), concerning wages, hours of work,
and other terms and conditions of
employmentand
2. Thesettlementofdisputesbynegotiation
between an Er and the representative of
hisemployees(Ee)
3. It is the obligation to meet and convene

promptly and expeditiously in good faith
for the purpose of negotiating an
agreement with respect to wages, hours
of work and all other terms and
conditions of employment including
proposals for adjusting any grievances or
questions arising under such agreement
and executing a contract incorporating
such agreements if requested by either
partybutsuchdoesnotcompelanyparty
to agree to a proposal or to make any
concession.(Art.252,LC)
Note:
GR: No court or administrative agency or official
shall havethe powerto set or fixwages,ratesof
pay,hoursofwork,orothertermsandconditions
ofemployment
XPNs:AsotherwiseprovidedundertheLC:
1. National Wages and Productivity
Commission and RTWPB as to wage fixing.
(Art.99and122,LC)
2. NCMB and NLRC as to wage distortion.
(Art.124,LC)
3. SLE and President of the Philippines as to
certification and assumption of powers
overlabordisputes.(Art.236[g],LC)
LABOR RELATIONS LAW

145
Q:Whatisthepurposebehindthisrule?
A: It is to encourage a truly democratic method of

regulatingtherelationsbetweentheemployersand
employees by means of agreements freely entered
intothroughCB.
Q:WhoarethepartiestoaCB?
A:
1. Employer
2. Employees, represented by the exclusive
bargainingagent
Q: What are the jurisdictional preconditions in

collectivebargaining?
A:
1. Possession of the status of majority
representation of the employees
representative in accordance with any of
the means of selection or designation
providedfortheLaborCode
2. Proofofmajorityrepresentation
3. AdemandtobargainunderArt.250(a)of
the LC. (Kiok Loy v. NLRC, G.R. No. L
54334,Jan.22,1986)
a.DutytoBargainCollectively
Q: When does the duty of the employer (Er) to

bargaincollectivelyarise?
A:OnlyaftertheunionrequeststheErtobargain.If
thereisnodemand,theErcannotbeindefault.
Note: Where a majority representative has been

designated, it is an ULP for the Er, as a refusal to
collectively bargain, to deal and negotiate with the
minority representative to the exclusion of the
majorityrepresentative.
Wherethereisalegitimaterepresentationissue,there
is no duty to bargain collectively on the part of the Er
(LakasngmgaManggagawangMakabayanv.Marcelo
Enterprises,G.R.No.L38258,Nov.19,1982)
Q: What is a collective bargaining agreement

(CBA)?
A: It is a contract executed upon request of either

theEror theexclusivebargainingrepresentativeof
the Ees incorporating the agreement reached after
negotiations with respect to wages, hours of work,
terms and conditions of employment, including
proposals for adjusting any grievance or questions
undertheagreement.
Note: The certification of the CBA by the BLR is not

required to make such contract valid. Once it is duly
enteredintoandsignedbytheparties,aCBAbecomes
effectiveasbetweenthepartieswhetherornotithas
been certified by the BLR. (Liberty Flour Mills Ees
Association v. Liberty Flour Mills, G.R. Nos. 5876870,
Dec.29,1989)
Q:Whatisazipperclause?
A: It is a stipulation in a CBA indicating that issues

that could have been negotiated upon but not
contained in the CBA cannot be raised for
negotiationwhentheCBAisalreadyineffect.
A CBA is not an ordinary contract but one impressed

with public interest, only provisions embodied in the
CBA should be so interpreted and complied with.
Where a proposal raised by a contracting party does
not find print in the CBA, it is not a part thereof and
the proponent has no claim whatsoever to its
implementation. (SMTFMUWP v. NLRC , G.R. No.
113856,Sept.7,1998)
Q:Whenshallbargainingcommence?
A: It commences within 12 months after the

determinationandcertificationoftheEesexclusive
bargainingrepresentative.(certificationyear)
Q:WhatistheprocedureinCB?
A:Whenapartydesirestonegotiateanagreement:
1. It shall serve a written notice upon the

otherpartywithastatementofproposals
2. Reply by the other party shall be made
within10dayswithcounterproposals
3. In case of differences, either party may
request for a conference which must be
heldwithin10calendardaysfromreceipt
ofrequest
4. If not settled, NCMB may intervene and
encourage the parties to submit the
disputetoavoluntaryarbitrator
5. If not resolved, the parties may resort to
any other lawful means (either to settle
the dispute or submit it to a voluntary
arbitrator).
Note:DuringtheconciliationproceedingintheNCMB,
the parties are prohibited from doing any act which
may disrupt or impede the early settlement of
disputes.(Art.250[d],LC)
Q:WhatarethestagesinCB?
A:


LABORLAWTEAM:
146
1. Preliminary process: Sending a written
notice for negotiation which must be
clearandunequivocal
2. Negotiationprocess.
3. Execution process: The signing of the
agreement
4. Publication for at least 5 days before
ratification
5. Ratification by the majority of all the
workers in the bargaining unit
represented in the negotiation (not
necessaryincaseofarbitralaward)
6. Registrationprocess.
7. Administration process: The CBA shall be
jointly administered by the management
andthebargainingagentforaperiodof5
years.
8. InterpretationandApplicationprocess.
Q: Does a petition for cancellation of a unions

certificate of registration involve a prejudicial
questionthatshouldfirstbesettledbeforeparties
couldberequiredtocollectivelybargain?
A: No. A pending cancellation proceeding is not a

bar to set mechanics for collective bargaining (CB).
If a certification election may still be held even if a
petition for cancellation of a unions registration is
pending,moresothattheCBprocessmayproceed.
The majority status of the union is not affected by
the cancellation proceedings. (Capitol Medical
Centerv.Trajano,G.R.No.155690,June30,2005)
Q: What is the duty to bargain collectively when
thereisnoCBA?
A:Itistheperformanceofamutualobligation:
1. To meet and convene promptly and
expeditiouslyingoodfaith(GF)
2. For the purpose of negotiating an
agreement with respect to wages, hours
of work and all other terms and
conditionsofemployment
3. Including proposals for adjusting any
grievances or questions arising under
suchagreement;and
4. To execute a contract incorporating such
agreements if requested by either party.
(Art.252)
Q:Whatarethelimitationstothedutytobargain
collectively?
A:
1. Such duty does not compel any party to
agree to a proposal or to make any
concession.
2. Parties cannot stipulate terms and
conditions of employment which are
below the minimum reqts prescribed by
law.
Q:Mayeitherpartybargaintoanimpasse?
A:Itdepends:
1. Where the subject of a dispute is a

mandatory bargaining subject, either
party may bargain to an impasse as long
ashebargainsinGF.
2. Where the subject is nonmandatory, a

party may not insist in bargaining to the
point of impasse. His instance may be
construedasevasionofdutytobargain.
Q:Whatisthetestofbargaininginbadfaith?
A: There is no perfect test of good faith (GF) in

bargaining. The GF or BF is an inference to be
drawnfromthefactsandislargelyamatterforthe
NLRCsexpertise.ThechargeofBFshouldberaised
whilethebargainingisinprogress.
Note:WiththeexecutionoftheCBA,BFcannolonger
be imputed upon any of the parties thereto. All
provisions in the CBA are supposed to have been
jointly and voluntarily incorporated therein by the
parties. This is not a case where private respondent
exhibited an indifferent attitude towards CB because
the negotiations were not the unilateral activity of
petitionerunion. TheCBAisgood enoughthatprivate
respondent exerted reasonable effort of GF
bargaining. (Samahang Manggagawa sa Top Form
ManufacturingUnited Workers of the Phils v. NLRC,
G.R.No.113856,Sept.7,1998)
Q: Does an Ers steadfast insistence to exclude a

particular substantive provision in the
negotiations for a CBA constitute refusal to
bargainorbargaininginBF?
A: No. This is no different from a bargaining

representatives perseverance to include one that
they deem of absolute necessity. Indeed, an
adamant insistence on a bargaining position to the
point where the negotiations reach an impasse
doesnotestablishbadfaith.Obviously,thepurpose
ofCBisthereachingofanagreementresultingina
contract binding on the parties; but the failure to
reach an agreement after negotiations have
continued for a reasonable period does not
establish a lack of good faith. The statutes invite
and contemplate a collective bargaining contract,
but they do not compel one. The duty to bargain
does not include the obligation to reach an
LABOR RELATIONS LAW

147
agreement. While the law makes it an obligation
for the Er and the Ees to bargain collectively with
each other, such compulsion does not include the
commitmenttoprecipitatelyacceptoragreetothe
proposals of the other. All it contemplates is that
both parties should approach the negotiation with
an open mind and make reasonable effort to reach
a common ground of agreement. (Union of Filipro
Ees v. Nestle Phils., G.R. Nos. 15893031, Mar. 3,
2008)
Q:Whatisadeadlock?
A: It is synonymous with impasse or a standstill

which presupposes reasonable effort at GF
bargaining but despite noble intentions does not
concludeanagreementbetweentheparties.
Q: In case of deadlock in the renegotiation of the

CBA, what are the actions that may be taken by
theparties?
A:Thepartiesmay:
1. Call upon the NCMB to intervene for the

purpose of conducting conciliation or
preventivemediation;
2. Referthematterforvoluntaryarbitration
orcompulsoryarbitration;
3. Declare a strike or lockout upon
compliance with the legal reqts (This
remedyisaremedyoflastresort).
Q: May economic exigencies justify refusal to

bargain?
A: No. An employer is not guilty of refusal to

bargain by adamantly rejecting the unions
economicdemandswhereheisoperatingataloss,
on a low profit margin, or in a depressed industry,
as long as he continues to negotiate. But financial
hardship constitutes no excuse for refusing to
bargaincollectively.
Q: What is the duty to bargain collectively when

thereisaCBA?
A:
1. When there is a CBA the duty to bargain
collectively shall also mean that neither
party shall terminate nor modify such
agreementduringitslifetime.
2. Either party can serve a written notice to
terminate or modify the agreement at
least60dayspriortoitsexpirationdate.
3. Itshallbethedutyofbothpartiestokeep
the status quo and to continue in full
forceandeffectthetermsandconditions
of the existing agreement during the 60
day period and/or until a new agreement
isreachedbytheparties.(Art.253,LC)
Q:WhatistheautomaticrenewalclauseofCBAs?
A:AlthoughaCBAhasexpired,itcontinuestohave
legaleffectsasbetweenthepartiesuntilanewCBA
has been entered into (Pier & Arrastre Stevedoring
Services, Inc. v. Confessor, G.R. No. 110854,
February 13, 1995). This is so because the law
makes it a duty of the parties to keep the status
quo and to continue in full effect the terms and
conditions of the existing agreement until a new
agreement is reached by the parties. (Art. 253, LC).
(2008BarQuestion)
Q: What may be done during the 60day freedom

period?
A:
1. A labor union may disaffiliate from the
mother union to form a local or
independentuniononlyduringthe60day
freedom period immediately preceding
theexpirationoftheCBA.
2. Either party can serve a written notice to
terminate or modify agreement at least
60dayspriortoitsexpirationperiod.
3. A petition for certification election may
befiled.
Q:WhentofileCBA?
A:Within30daysfromexecutionofCBA.
Q:Whataretherequirementsforregistration?
A: The application for CBA registration shall be

accompaniedbytheoriginaland2duplicatecopies
ofthefollowingreqts:
1. CBA
2. A statement that the CBA was posted in
at least 2 conspicuous places in the
establishment concerned for at least 5
daysbeforeitsratification
3. Statement that the CBA was ratified by
the majority of the Ees in the bargaining
unit.
Note: The following documents must be certified

under oath by the representative of the Er and the
labor union. No other document shall be required in
theregistrationoftheCBA.
Q:Whatisasingleenterprisebargaining?


LABORLAWTEAM:
148
A: It involves negotiation between one certified
labor union and one Er. Any voluntarily recognized
or certified labor union may demand negotiations
with its Er for terms and conditions of work
coveringEesinthebargainingunitconcerned.
Q:WhatisamultiErbargainingscheme?
A: It involves negotiation between and among

severalcertifiedlaborunionsandErs.
Q:WhatisthedurationofaCBA?
A:
1. Withrespecttotherepresentationaspect
(referstotheidentityandmajoritystatus
of the union that negotiated the CBA as
the exclusive bargaining representative):
5years
2. Withrespecttoallotherprovisions(refers
to the rest of the CBA, economic as well
as noneconomic provisions other than
representationalprovisions):3yearsafter
theexecutionoftheCBA
Q:WhataretheeconomicprovisionsofaCBA?
A:
1. Wages
2. Familyplanning
3. Effectivityoftheagreement
4. Other terms and conditions of
employment
Q: What are the noneconomic provisions of a

CBA?
A:
1. Coverageofthebargainingunit
2. Unionsecurityclauses
3. Management prerogatives and/or
rights/responsibilitiesofemployees
4. Grievance machinery and voluntary
arbitration
5. Nostrikenolockoutprovision
Q:Whatistheeffectivityandretroactivitydateof
othereconomicprovisionsoftheCBA?
A:
1. If the CBA is the very first for the
bargainingunit,thepartieshavetodecide
theCBAeffectivitydate.
2. Thosemadewithin6monthsafterdateof
expiry of the CBA are subject to
automatic retroaction to the day
immediatelyfollowingthedateofexpiry.
3. Those not made within 6 months, the

parties may agree to the date of
retroaction.
Note: This rule applies only if there is an existing

agreement. If there is no existing agreement, there is
no retroactive effect because the date agreed upon
shallbethestartoftheperiodofagreement.
Art. 253A on retroactivity does not apply if the

provisions were imposed by the SLE by virtue of
arbitration. It applies only if the agreement was
voluntarilymadebytheparties.
Q:MaytheeconomicprovisionsofanexistingCBA
be extended beyond the 3 year period as
prescribed by law in the absence of a new
agreement?
A:Yes.Undertheprincipleofholdover,untilanew
CBAhasbeenexecutedbyandbetweentheparties,
they are duty bound to keep the status quo and
mustcontinueinfullforceandeffectthetermsand
conditionsoftheexistingagreement.Thelawdoes
not provide for any exception or qualification as to
which of the economic provisions of the existing
agreement are to retain force and effect.
Therefore, it must be encompassing all the terms
and condition in the said agreement. (New Pacific
Timberv.NLRC,G.R.No.124224,Mar.17,2000)
Q: Mindanao Terminal Company and respondent
union has an existing CBA which was about to
expire. Thus, negotiations were held regarding
certain provisions of the CBA which resulted in a
deadlock. Thus the union filed a notice of strike.
During the conference called by the NCMB the
company and the union were able to agree on all
of the provisions of the CBA except for one.
However, the last unresolved provision was
subsequently settled but no CBA was signed.
Hence,intherecordsoftheMediationArbiter,all
issues were settled before the lapse of the 6
month period after the expiration of the old CBA.
Does the signing of the CBAdetermine the date it
wasenteredintowithinthe6monthperiod?
A: No. The signing of the CBA does not determine
whethertheagreementwasenteredintowithinthe
6 month period from the date of expiration of the
old CBA. In the present case, there was already a
meeting of the minds between the company and
the union prior to the end of the 6 month period
after the expiration of the old CBA. Hence, such
meeting of the mind is sufficient to conclude that
anagreementhasbeenreachedwithinthe6month
period as provided under Art. 253A of the LC.
LABOR RELATIONS LAW

149
(Mindanao Terminal and Brokerage Services Inc., v.
Confessor,G.R.No.111809,May5,1997)
Q:WhenistheeffectivityofaCBAarbitralaward
concludedbeyond6monthsfromtheexpirationof
theoldCBA?
A: The CBA arbitral awards granted 6 months from
theexpirationofthelastCBAshallretroacttosuch
time agreed upon by both the Er and the union.
Absent such agreement as to retroactivity, the
awardshallretroacttothe1
st
dayafterthe6month
period following the expiration of the last day of
the CBA should there be one. In the absence of a
CBA, the SLEs determination of the date of
retroactivity as part of his discretionary powers
over arbitral award shall control. (Manila Electric
Company v. Quisumbing, G.R. No. 127598, Feb. 22
andAug.1,2000)
Q: PAL was suffering from a worsened financial
condition resulting to a retrenchment which
downsized its labor force by more than 1/3
thereby affecting numerous union members.
Hence, the union went on strike. The PAL offered
that shares of stock be transferred to its Ees but
the union refused. Thus, PAL claimed it has no
alternative left but to close. Hence, the union
PALEA offered that the CBA be suspended for 10
yearsandtowaivesomeoftheeconomicbenefits
in the CBA provided they remain the certified
bargaining agent. PAL agreed and resumed
operations. Is the agreement to suspend the CBA
for 10 years abdicated the workers right to
bargain?
A: No. The primary purpose of a CBA is to stabilize
labormanagement relations in order to create a
climateofasoundandstableindustrialpeace.The
assailed agreement was the result of the voluntary
CB negotiations undertaken in the light of severe
financialsituationfacedbyPAL.
Q: Is the agreement in conflict with Art. 253A of
theLC?
A: No. There is no conflict between the agreement
and Art. 253A of the LC for the latter has a 2fold
purpose namely: a) to promote industrial stability
and predictability and b) to assign specific time
tables wherein negotiations become a matter of
right and requirement. In so far as the first
purpose, the agreement satisfies the first purpose.
Asregardthesecondpurpose,nothinginArt.253A
prohibits the parties from waiving or suspending
the mandatory timetables and agreeing on the
remediestoenforcethesame.
Q: Does the agreement violate the 5 year
representation limit as provided under Art. 253A
oftheLC?
A:No.Forunderthesaidarticle,therepresentation
limit of the exclusive bargaining agent applies only
when there is an existing CBA in full force and
effect. In this case, the parties agreed to suspend
the CBA and put in abeyance the limit on
representation.(Riverav.Espiritu,G.R.No.135547,
Jan.23,2002)
b.MandatoryprovisionsoftheCBA
Q:WhatarethemandatoryprovisionsoftheCBA?
A:
1. Grievancemachinery
2. Voluntaryarbitration
3. Wages
4. Hoursofwork
5. Familyplanning
6. Ratesofpay
7. Mutualobservanceclause
Note: In addition, the BLR requires the CBA should

includeaclearstatementofthetermsoftheCBA.
Ersdutytobargainislimitedtomandatorybargaining
subjects; as to other matters, he is free to bargain or
not.
Q: How are cases arising from the

Interpretation or implementation of CBAs
handledanddisposed?
A: They are disposed through the grievance

machinery and if not resolved by the grievance
machinery,throughvoluntaryarbitration.(1995Bar
Question)
Q:Whatisgrievance?
A: It is any question by either the employer or the

union regarding the interpretation or
implementation of any provision of the CBA or
interpretation or enforcement of company
personnelpolicies.(Sec.1[u],RuleI,BookV,IRR)
Q: What provisions must the parties include in a

CBA?
A:
1. Provisions that will ensure the mutual
observanceofitstermsandconditions.
2. A machinery for adjustment and
resolutionofgrievancesarisingfromthe:
a. Interpretation/implementation of
theCBAand


LABORLAWTEAM:
150
b. Interpretation/ enforcement of
company personnel policies. (Art.
260,par.1).
(1)GrievanceProcedure
Q:Whatisgrievancemachinery?
A: It refers to the mechanism for the adjustment

and resolution of grievances arising from the
interpretation or enforcement of company
personnel policies. It is part of the continuing
processofcollectivebargaining(CB).
Note: It is a must provision in any CBA and no

collective agreement can be registered in the absence
ofsuchprocedure.
Q:Howisgrievancemachineryestablished?
A:
1. Agreementbytheparties
2. A grievance committee composed of at
least 2 representatives each from the
members of the bargaining unit and the
employer, unless otherwise agreed upon
bythepartiesshallbecreatedwithin10
daysfromthesigningofCBA
Note: Although Art. 260 of the Labor Code mentions

parties to a CBA, it does not mean that a grievance
machinerycannotbesetupinaCBAlessenterprise.In
any workplace where grievance can arise, a grievance
machinerycanbeestablished.
Q:Whatisgrievanceprocedure?
A: It refers to the internal rules of procedure

establishedbythepartiesintheirCBAwhichusually
consists of successive steps starting at the level of
the complainant and his immediate supervisor and
ending, when necessary, at the level of the top
union and company officials and with voluntary
arbitrationastheterminalstep.
Q: What will happen to grievances submitted to

the grievance machinery which are not settled
within 7 calendar days from the date of their
submission?
A:Theyshallautomaticallybereferredtovoluntary
arbitration prescribed in the CBA. (Art. 260, par.2,
LaborCode)
Either party may serve notice upon the other of its

decisiontosubmittheissuetovoluntaryarbitration
(VA):
1. If the party upon whom such notice is
served fails/refuses to respond within 7
daysfromreceipt,VA/paneldesignatedin
the CBA shall commence arbitration
proceedings
2. If the CBA does not designate or if the
parties failed to name the VA/panel, the
regional branch of NCMB appoints
VA/panel
(2)VoluntaryArbitration
Q:Whatisvoluntaryarbitration?
A: It refers to the mode of settling labor

managementdisputesbywhichthepartiesselecta
competent, trained and impartial third person who
shall decide on the merits of the case and whose
decision is final and executory. (Sec.1 [d], Rule II,
NCMBRevisedProceduralGuidelinesintheConduct
ofVoluntaryArbitrationProceedings,Oct.15,2004)
Q: What is the difference between compulsory

andvoluntaryarbitration?
A: Compulsory arbitration is a system whereby the

parties to a dispute are compelled by the
government to forego their right to strike and are
compelled to accept the resolution of their dispute
through arbitration by a 3
rd
party. The essence of
arbitrationremainssincearesolutionofadisputeis
arrived at by resort to a disinterested third party
whose decision is final and binding on the parties,
but in compulsory arbitration, such a third party is
normallyappointedbythegovernment.
Under voluntary arbitration, on the other hand,

referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in their
collective agreement, to an impartial third person
for a final and binding resolution. Ideally,
arbitration awards are supposed to be complied
with by both parties without delay, such that once
an award has been rendered by an arbitrator,
nothing is left to be done by both parties but to
complywiththesame.Afterall,theyarepresumed
to have freely chosen arbitration as the mode of
settlement for that particular dispute. Pursuant
thereto, they have chosen a mutually acceptable
arbitrator who shall hear and decide their case.
Above all, they have mutually agreed to be bound
by said arbitrator's decision. (Luzon Devt Bank v.
AssnofLuzonDevtBankEes,G.R.No.120319,Oct.
6,1995)
Q: What is the basis for voluntary arbitration and

itsrationale?
A: The State shall promote the principle of shared

responsibility between workers and employers and
LABOR RELATIONS LAW

151
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster
industrialpeace(Sec.3,Art.XIII,1987Constitution).
(3)NoStrikeNoLockoutClause
Q:When doesthe No StrikeNo Lockout clause in

theCBAapply?
A: The no strikeno lockout clause in the CBA

applies only to economic strikes. It does not apply
toULPstrikes.Hence,ifthestrikeisfoundedonan
unfair labor practice of the employer, a strike
declared by the union cannot be considered a
violationofthenostrikeclause.(MasterIronLabor
Unionv.NLRC,G.R.No.92009,Feb.17,1993)
(4)LaborManagementCouncil
Q: What is the role of the Department of Labor

and Employment in the creation of Labor
ManagementCouncils?
A:TheDepartmentshallpromotetheformationof
labormanagement councils in organized and
unorganized establishments to enable the workers
to participate in policy and decisionmaking
processes in the establishment, insofar as said
processes will directly affect their rights, benefits
and welfare, except those which are covered by
collective bargaining agreements or are traditional
areasofbargaining.
The Department shall promote other labor

management cooperation schemes and, upon its
own initiative or upon the request of both parties,
may assist in the formulation and development of
programs and projects on productivity,
occupational safety and health, improvement of
quality of work life, product quality improvement,
andothersimilarschemes.(Sec.1,RuleXXI,BookV,
IRR)
Q: How is the representative in the Management

CouncilSelected?
A: In organized establishments, the workers

representatives to the council shall be nominated
by the exclusive bargaining representative. In
establishments where no legitimate labor
organizationexists,theworkersrepresentativeshall
be elected directly by the employees at large. (Sec.
2,RuleXXI,BookV,IRR)
c.ULPinCollectiveBargaining
Q:WhataretheformsofULPinbargaining?
A:
1. Failuretomeetandconvene
2. Evading the mandatory subjects of
bargaining.
3. Bad faith in bargaining (boulwarism),
including failure to execute the CBA if
requested
4. GrossviolationoftheCBA
5. SurfaceBargaining
6. Blueskybargaining
Note: Violations of CBA, except those which are gross

in character, shall no longer be treated as ULP but a
grievance under CBA. (Art. 261, LC, Silva v. NLRC, G.R.
No.110226,June191997)
Q:Whenisthererefusaltobargain?
A:Aunionviolatesitsdutytobargaincollectivelyby
entering negotiations with a fixed purpose of not
reachinganagreementorsigningacontract.
Q:Whatisfeatherbedding/makeworkactivities?
A:Itreferstothepracticeoftheunionoritsagents
in causing or attempting to cause an employer (Er)
to pay or deliver or agree to pay or deliver money
or other things of value, in the nature of an
exaction, for services which are not performed or
not to be performed, as when a union demands
that the Er maintain personnel in excess of the
lattersrequirements.
Note:Itisnotfeatherbeddingiftheworkisperformed
nomatterhowunnecessaryoruselessitmaybe.
Q:Whatisthesweetheartdoctrine?
A:ItiswhenaLOasksfororacceptsnegotiationsor
attysfeesfromemployersaspartofthesettlement
ofanyissueinCBoranyotherdispute.
Note:TheresultingCBAisconsideredasasweetheart
contract a CBA that does not substantially improve
theemployeeswagesandbenefitsandwhosebenefits
arefarbelowthanthoseprovidedbylaw.
Q:Whatisblueskybargaining?
A: It is defined as making exaggerated or
unreasonableproposals.
Note:Whetherornottheunionisengagedinbluesky
bargainingisdeterminedbytheevidencepresentedby
the union as to its economic demands. Thus, if the
unionrequiresexaggeratedorunreasonableeconomic
demands, then it is guilty of ULP. (Standard Chartered
Bankv.Confessor,G.R.No.114974,June16,2004)


LABORLAWTEAM:
152
Q:Whendoesboulwarismoccur?
A: It occurs when employer (Er) directly bargains
withtheemployee(Ee)disregardingtheunion;the
aim was to deal with the labor union through Ees
ratherthanwiththeEesthrutheunion.Ersubmits
itsproposalsandadoptsatakeitorleaveitstand.
d.UnfairLaborPractice
(1)ULPofEmployers
Q: What are the ULP that may be committed by

Ers?
A:
1. Interference
2. Yellowdogcondition
3. Contractingout
4. Companyunionism
5. Discrimination for or against union
membership
6. Discriminationbecauseoftestimony
7. Violationofdutytobargain
8. Paidnegotiation
9. GrossviolationofCBA
(a)Interference
Q:Whatismeantbyinterference?
A:TheactofErtointerferewith,restrainorcoerce
Eesintheexerciseoftheirrighttoselforganization.
Q:Whatisthetestofinterference?
A:WhethertheErhasengagedinconductwhich,it
mayreasonablybesaid,tendstointerferewiththe
freeexerciseoftheEesrighttoselforganization.
Note: Direct evidence that an Ee was in fact intended

orcoercedbythestatementsofthreatsoftheErisnot
necessaryifthereisareasonableinterferencethatthe
antiunion conduct of the Er does have an adverse
effect on selforganization and CB. (The Insular Life
AssuranceNATU v. The Insular Life Co. Ltd, G.R. No.L
25291,Jan.30,1971)
Q:Whatisthetotalityofconductdoctrine?
A: Itstatesthat theculpability of Ers remarks is to

be evaluated not only on the basis of their
implications, but against the background of and in
conjunctionwithcollateralcircumstances.
Under this doctrine, expressions of opinion by an

Er,thoughinnocentinthemselves,frequentlywere
heldtobeULPbecauseof:
1. Thecircumstancesunderwhichtheywere
uttered
2. The history of the particular Ers labor
relationsorantiunionbias
3. Their connection with an established
collateralplanofcoercionorinterference.
(The Insular Life AssuranceNATU v. The
Insular Life Co. Ltd, G.R. No.L25291, Jan.
30,1971)
Q: Phil. Marine Officers Guild (PMOG) is a union

representing some of Philsteams officers and
CebuSeamensAssociation(CSA)isanotherunion
representing some of Philsteams officers. PMOG
sentalettertoPhilsteamrequestingforCBbutthe
company asked the former to first prove it
represents the majority. Simultaneously,
Philsteam interrogated its captains, deck officers
andengineerswhileCSAlikewisesentitsdemands
to Philsteam. The company recognized CSA as
representingthemajorityandenteredintoaCBA.
Hence PMOG declared a strike. PMOG was
subjected to vilification and Philsteams pier
superintendent participated in the solicitation of
membership for CSA. Is the company guilty of
ULP?
A: Yes. Although the company is free to make

interrogationsastoitsEesunion,thesameshould
be for a legitimate purpose and must not interfere
withtheexerciseofselforganizationotherwiseitis
considered as ULP. Moreover, Philsteams
supervisoryEesstatementthatPMOGisamoney
making union,which is made to appear to besaid
in behalf of the union and the participation of the
companys pier superintendent in soliciting
membership for the competing union, is ULP for
interfering with the exercise of the right to self
organization. (Philsteam and Navigation v.
Philippine Marine Officers Guild, G.R. Nos. L20667
andL20669,Oct.29,1965)
Q:Whatisalockout?
A: It means any temporary refusal of an Er to

furnish work as a result of an industrial or labor
dispute.(Art.212[p])
Q:WhendoeslockoutorclosureamounttoULP?
A: A lockout, actual or threatened, as a means of

dissuading the Ees from exercising their rights is
clearly an ULP. However, to hold an Er guilty, the
evidence must establish that the purpose was to
interferewiththeEesexerciseoftheirrights.
Q: What are other examples of acts of

interference?
LABOR RELATIONS LAW

153
A:
1. Outrightandunconcealedintimidation
2. In order that interrogation would not be
deemedcoercive:
a. The Er must communicate to the Ee
thepurposeofquestioning
b. Assure him that no reprisal would
takeplace
c. ObtainEeparticipationvoluntarily
d. Must be free from Er hostility to
unionorganization
e. Mustnotbecoerciveinnature
3. IntimidatingexpressionsofopinionbyEr
Note: An Er who interfered with the right to self

organization before a union is registered can be held
guilty of ULP. (Samahan ng mga Manggagawa sa
BandolinoLMLC v. NLRC, G.R. No. 125195, July 17,
1997)
It is the prerogative of the company to promote,

transfer or even demote its Ees to other positions
when the interests of the company reasonably
demand it. Unless there are circumstances which
directlypointtointerferencebythecompanywiththe
Ees right to selforganization, the transfer of an Ee
shouldbeconsideredaswithintheboundsallowedby
law. (Rubberworld Phils. v. NLRC, G.R. No. 75704, July
19,1989)
(b)YellowDog
Q:Whatisayellowdogcondition?
A:Itistorequireasaconditionofemploymentthat
apersonoranEeshallnotjoinalabororganization
orshallwithdrawfromonetowhichhebelongs.
Q:Whatisayellowdogcontract?
A:Itisapromiseexactedfromworkersascondition
of employment that they are not to belong to or
attempt to foster a union during their period of
employment.
Q:Isyellowdogcontractvalid?
A:No.Itisnullandvoidbecause:
1. It is contrary to public policy for it is
tantamounttoinvoluntaryservitude.
2. It is entered into without consideration
for Ees in waiving their right to self
organization.
3. Ees are coerced to sign contracts
disadvantageoustotheirfamily.
Note: This is one of the cases of ULP that may be

committedintheabsenceofanErEerelationship.
Q:Whatarethe3usualprovisionsunderayellow
dogcontract?
A:
1. ArepresentationbytheEethatheisnota
memberofalaborunion.
2. A promise by the Ee not to join a labor
union.
3. A promise by the Ee that upon joining a
laborunion,hewillquithisemployment.
(c)ContractingOut
Q:WhatiscontractingoutasaformofULP?
A: It is to contract out services or functions being

performed by union members when such will
interferewith,restrainorcoerceEesintheexercise
oftheirrightstoselforganization.
Q: Does it mean that an Er cannot contract out
work?
A:
GR:ContractingoutservicesisnotULPperse.
XPNs:ItisULPonlywhentheff.exists:
1. The services contracted out are being
performedbyunionmembers;and
2. Such contracting out interferes with,
restrains, or coerce Ees in the exercise of
theirrighttoselforganization.
Note: When the contracting out is being done for

business reasons such as decline in business,
inadequacyofequipmentortoreducecost,thenitisa
validexerciseofmanagementprerogative.
Q: Company "A" contracts out its clerical and

janitorial services. In the negotiations of its
CBA, the union insisted that the company may no
longer engage in contracting out these types of
services, which services the union claims to be
necessary in the company's business, without
prior consultation. Is the union's stand valid or
not?Forwhatreason(s)?
A: The union's stand is not valid. It is part of

management prerogative to contract out any
work,task,joborprojectexceptthatitisanULP to
contract out services or functions performed
by union members when such will interfere
with,restrainorcoerceEesintheexerciseoftheir
rights to selforganization. (Art. 248[c] of the LC).
(2001BarQuestion)
Q:Whatisarunawayshop?


LABORLAWTEAM:
154
A:Itisanindustrialplantmovedbyitsownersfrom
onelocationtoanothertoescapelaborregulations
or State laws or to discriminate against Ees at the
oldplantbecauseoftheirunionactivities.
Q:IsresortingtorunawayshopULP?
A: Yes. Where a plant removal is for business

reasonsbuttherelocationishastenedbyantiunion
motivation, the early removal is ULP. It is
immaterial that the relocation is accompanied by a
transfer of title to a new employer (Er) who is an
alteregooftheoriginalEr.
(d)CompanyUnionism
Q:Whatisacompanyunion?
A: Any labor organization whose formation,

functionoradministrationhasbeenassistedbyany
actdefinedasULP.(Art.212[i])
Q:Whataretheformsofcompanyunionism?
A:
1. Initiationofthecompanyunionideaby:
a. Outright formation by Er or his
representatives
b. Ee formation on outright demand or
influencebyErand
c. Manageriallymotivatedformationby
Ees
2. Financialsupporttotheunionby:
a. Erdefraysunionexpenses
b. Pays attys fees to the attorney who
drafted the Constitution or bylaws
oftheunion.
3. Er encouragement assistance
Immediately granting of exclusive
recognition as bargaining agent without
determining whether the union
representsthemajorityoftheemployees
4. Supervisory assistance Soliciting

membership, permitting union activities
during work time or coercing Ees to join
the union by threats of dismissal or
demotion
Q: What is meant by the act of company

dominationofunion?
A: This is to initiate, dominate, assist or otherwise

interfere with the formation or administration of
any labor organization including giving of financial
or other support to it or its organizers or
supporters.
Q: Why is company unionism/captive unionism a

formofULP?
A: It is considered ULP because the officers will be

beholdentotheErsandtheywillnotlookafterthe
interestofwhomtheyrepresent.
(e)Discriminationfororagainstunionmembership
Q: What is meant by discrimination as a form of

ULP?
A: It is to discriminate in regard to wages,hours of

work and other terms and conditions of
employment in order to encourage or discourage
membershipinanylabororganization.
Q:WhenisadischargeofanEediscriminatory?
A: For the test of determining whether or not a

discharge is discriminatory, it is necessary that the
underlyingreasonforthedischargebeestablished.
The fact that a lawful cause for discharge is

available is not a defense where the Ee is actually
discharged because of his union activities. If the
discharge is actually motivated by lawful reason,
thefactthattheEeisengagedinunionactivitiesat
thetimewilllieagainsttheErandpreventhimfrom
the exercise of business judgment to discharge an
Ee for cause. (Phil. Metal Foundries Inc. v. CIR, G.R.
Nos.L3494849,May15,1979)
Q: Jobo has 3 hotels, the Taal Vista Lodge, Manila

Hotel and the Pines Hotel. Among the 3, Pines
HotelhadmoreEesandtheonlyonewithalabor
organization(LO).Whenthebonuswasdistributed
among the 3 hotels, Pines Hotel Ees received the
leastamountcomparedtotheEesofManilaHotel
and Taal Vista Lodge. Did the company commit
ULP?
A:Yes.Thesharingofthebonusesisdiscriminatory
andsuchconstituteULP.ThePinesHotelEeswould
bereceivingfewerbonusescomparedtotheEesof
Taal Vista Lodge and Manila Hotel where neither
has a LO nor does the complainant union has a
member. Taking into account that Pines Hotel is
realizingprofitcomparedtothatofTaalVista.Same
analogyappliesinthesalaryincrease.(ManilaHotel
Co. v. Pines Hotel Ees Assn, G.R. No.L30139, Sep.
28,1972)
Q:Whencantherebeavaliddiscrimination?
LABOR RELATIONS LAW

155
A: The employer is not guilty of ULP if it merely
complies in good faith with the request of the
certified union for the dismissal of employees
expelled from the union pursuant to the union
security clause in the CBA. (Soriano v. Atienza, G.R.
No.L68619,Mar.16,1989)
Q: A profit sharing scheme was introduced by the
companyforitsmanagersandsupervisorswhoare
notmembersoftheunion,hencedonotenjoythe
benefitsoftheCBA.Therespondentunionwanted
to participate with the scheme but was denied by
the company due to the CBA. Subsequently the
company distributed the profit sharing to the
manager, supervisors and other nonunion
memberEes.Asaresulttheunionfiledanoticeof
strike alleging ULP. Is the nonextension of the
profit sharing scheme to union members
discriminatoryandanULP?
A: No. There can be no discrimination when the
Eesarenotsimilarlysituated.Thesituationofunion
members is different and distinct from nonunion
members because only union members enjoy the
benefit under the CBA. The profit sharing scheme
was extended to those who do not enjoy the
benefits of the CBA. Hence, there is no
discriminationandULPisnotcommitted.(Wiseand
Co.,Inc.v.NLRC,G.R.No.L87672,Oct.13,1989)
Q: Is dismissal of an Ee pursuant to a union
securityclauseaformofULP?
A: No. Union security clauses in the CBA, if freely
and voluntarily entered into, are valid and binding.
Thus, the dismissal of an Ee by the company
pursuant to a labor unions demand in accordance
with a union security agreement does not
constitute ULP. (Malayang Samahan ng mga
Manggagawa sa M. Greenfield v. Ramos, G.R. No.
113907,Feb.28,2000)
A union member who is employed under an
agreement between the union and his Er is bound
by the provisions thereof since it is a joint and
several contract of the members of the union
enteredintobytheunionastheiragent.(Manalang
v.ArtexDevt,G.R.No.L20432,Oct.30,1967)
Q: Is notice and hearing required in case an Ee is
dismissedpursuanttoaunionsecurityclause?
A: Yes. Although a union security clause in a CBA
may be validly enforced and dismissal pursuant to
thereto may likewise be valid, this does not erode
the fundamental requirement of due process. The
reason behind the enforcement of union security
clauses which is the sanctity and inviolability of
contractscannoterodeonesrighttodueprocess.
Notwithstanding the fact that the dismissal was at
theinstanceofthefederationandthatitundertook
toholdthecompanyfreefromanyliabilityresulting
from such dismissal, the company may still be held
liable if it was remiss in its duty to accord the
wouldbe dismissed Ees their right to be heard on
thematter.
Q: Mabeza and her coEes were asked by the
company to sign an affidavit attesting to the
latters compliance with pertinent labor laws.
Mabeza signed the affidavit but refused to swear
toitsveracitybeforetheCityprosecutor.Mabeza
then filed a LOA which was denied by
management. After sometime, she attempted to
returntoworkbutthecompanyinformedhernot
toreportforworkandcontinuewithherunofficial
leave.DidthecompanycommitULP?
A: Yes. The act of compelling an Ee to sign an
instrument indicating the Ers compliance with
Laborlawswhichthecompanymighthaveviolated
together with the act of terminating or coercing
those Ees to cooperate is an act of ULP. This is
analogous with Art. 248 (f) of the LC which
provides: to dismiss, discharge or otherwise
prejudice or discriminate against an Ee for having
given or being about to give testimony under this
Code. For in not giving a positive testimony in
favor of the Er, Mabeza reserved not only her right
to dispute the claim but also to work for better
terms and condition. (Mabeza v. NLRC, G.R No.
118506,April18,1997)
(f)ViolationofDutytoBargain
Q: What is violation of the duty to bargain as a
kindofULP?
A: This is the act of violating the duty to bargain
collectivelyasprescribedintheLC.
Q:WhataretheformsofULPinbargaining?
A:
1. Failureorrefusaltomeetandconvene
2. Evading the mandatory subject of
bargaining
3. Badfaith(BF)bargaining,includingfailure
toexecutetheCBAifrequested
4. GrossviolationoftheCBA
Note: A companys refusal to make counterproposal,

if considered in relation to the entire bargaining
process, may indicate BF and this is especially true
where the unions request for a counter proposal is
left unanswered. (Kiok Loy v. NLRC, G.R. No. L54334,
Jan.22,1986)


LABORLAWTEAM:
156
Q:WhataretheexamplesofULPinbargaining?
A:
1. Delaying negotiations by discussing
unrelatedmatters
2. Refusaltoacceptrequesttobargain
3. Rejecting a unions offer to prove its
majorityclaim
4. Shutdowntoavoidbargaining
5. Engaginginsurfacebargaining
Q: Balmar Farms Ees Association (BFEA) is

affiliated with Associated Labor Union (ALU). ALU
won in the certification election held in the
company. Thus, ALU sent its proposal for a CBA,
but the company refused to act on it alleging that
BEA is the sole and exclusive bargaining
representativeandthatBFEAthroughitspresident
had sent a letter informing the company of its
disaffiliation with ALU. Is the company guilty of
ULPforrefusingtobargaincollectively?
A: Yes. ALU is the certified exclusive bargaining

representative after winning the certification
election. The company merely relied on the letter
of disaffiliation by BFEAs president without proof
and consequently refusing to bargain collectively
constitutes ULP. Such refusal by the company to
bargain collectively with the certified exclusive
bargainingrepresentativeisaviolationofitsdutyto
collectively bargain which constitutes ULP. (Balmar
Farmsv.NLRC,G.R.No.73504,Oct.15,1991)
Q: The Kilusang Kabisig, a newlyformed labor
union claiming to represent a majority of the
workers in the Microchip Corp., proceeded to
present alistofdemandstothemanagementfor
purposes of collective bargaining (CB). The
Microchips Corp.,amultinationalcorp.engagedin
the production of computer chips for export,
declined to talk with the union leaders,
alleging that they had not as yet presented any
proof of majority status. The Kilusang Kabisig
then charged Microchip Corp. with ULP, and
declared a "wildcat" strike wherein means of
ingress and egress were blocked and remote and
isolated acts of destruction and violence were
committed. Was the company guilty of an ULP
when it refused to negotiate with the Kilusang
Kabisig?
A: No. It is not an ULP not to bargain with a union
which has not presented any proof of its majority
status. The LC imposes on an Er the duty to
bargain collectively only with a legitimate labor
organizationdesignatedorselectedbythemajority
oftheEesinanappropriateCBunit.ItisnotaULP
for an Er to ask a union requesting to bargain
collectively that such union first show proof of its
beingamajorityunion.(1997BarQuestion)
Q:Whatissurfacebargaining?
A: It is the act of going through the motions of
negotiating without any legal intent to reach an
agreement. It involves the question of whether or
not the Ers conduct demonstrates an unwillingness
to bargain in good faith or is merely hard
bargaining. (Standard Chartered Bank v. Confessor,
G.R.No.114974,June16,2004)
Note: Occurs when the Er constantly changes its
positionovertheagreement.
(g)PaidNegotiation
Q:Whatismeantbypaidnegotiationasaformof
ULP?
A:Itistheactoftheemployertopaynegotiationor
attys fees to the union or its officers or agents as
part of the settlement of any issue in collective
bargainingoranyotherdispute.
(h)GrossViolationofCBA
Q: When is the violation of CBA considered as
ULP?
A:OnlywhentheviolationisgrossTheremustbe
a flagrant and/or malicious refusal to comply with
theeconomicprovisionoftheCBA.
Note: Allthe ULP acts musthavea relation to theEes
exercise of their right to selforganization. Antiunion
orantiorganizationmotivemustbeprovedbecauseit
isadefinitionalelementofULP.
If violation is not gross, it is not ULP but a grievance
under CBA. The grossly violate phrase is an
amendmentbyR.A.6715.
Q:AcomplaintforULPwasfiledbyaprosecutorof
the CIR against Alhambra company, upon the
charges of the union that 15 of its members
employedasdriversandhelpersarediscriminated
for being deprived of the benefits under the CBA
with no justifiable reason other than union
membership.IsthecompanyguiltyofULP?
A: Yes. The refusal to extend the benefits and
privileges under the CBA to Ees constitutes ULP.
Failure on the part of the company to live up in
good faith to the terms of the CBA is a serious
violation of the duty to collectively bargain which
again amounts to ULP. The 15 drivers and helpers
are found to be Ees of the company, hence, the
benefit and privileges under the CBA should be
LABOR RELATIONS LAW

157
extendedtothem.(AlhambraIndustriesv.CIR,G.R.
No.L25984,Oct.30,1970)
Q:WhatarethereliefsavailableinULPcases?
A:Thefollowingreliefsmaybeavailedof:
1. Ceaseanddesistorder
2. Affirmativeorder
3. Courtmayordertheemployertobargain.
CBAmaybeimposed.
4. Strikebyunionmembers
Note:ULPcasesarenotsubjecttocompromiseinview
of the public interest involve. The relation between
capital and labor is not merely contractual. They are
impressed with public interest that labor contracts
mustyieldtocommongood.
Q: Is the commission of an ULP by an employer

subject to criminal prosecution?
A: Yes, because ULPs are not only violations of the

civil rights of both labor and management but are
also criminal offenses against the State which shall
be subject to prosecution and punishment. (Art.
247 LC; See also B.P. Blg. 386 as amended by R.A.
6715).However,thecriminalaspectcanonlybe
filed when the decision of the labor tribunals,
finding the existence of ULP, shall have become
finalandexecutory.(2005BarQuestion)
(2)ULPofLaborOrganizations
Q:WhataretheULPofLOs?
A: It shall be ULP for a LO, its officers, agents or
representatives:
1. To restrain or coerce Ees in the exercise
of their rights to selforganization.
However, a LO shall have the right to
prescribeitsownruleswithrespecttothe
acquisitionorretentionofmembership
2. To cause or attempt to cause an Er to
discriminate against an Ee, including
discrimination against an Ee with respect
to whom membership in such
organization has been denied or to
terminateanEeonanygroundotherthan
the usual terms and conditions under
which membership or continuation of
membership is made available to other
members
3. To violate the duty, or refuse to bargain
collectively with the Er, provided it is the
representativeoftheEes
4. TocauseorattempttocauseanErtopay
or deliver or agree to pay or deliver any
money or other things of value, in the
nature of an exaction, for services which
are not performed or not to be
performed, including the demand for fee
forunionnegotiations
5. Toaskfororacceptnegotiationsorattys
feesfromErsaspartofthesettlementof
any issue in collective bargaining (CB) or
anyotherdisputeor
6. ToviolateaCBA.
Q:IsinterferencebyaLOanULP?
A: No,becauseinterferencebyaLOintheexercise
of the right to organize is itself a function of self
organizing.
Q: What are examples of interference which does

notamounttoULP?
A:
1. Union campaigns for membership even
amongmembersofanotherunion
2. Filing by a union of a petition to dislodge
anincumbentbargainingunion
3. A bargaining union, through a union
security clause, requires an incoming
employeetojointheunion.
Q:MayaunioncoerceEestojoinastrike?
A:No.Aunionviolatesthelawwhen,torestrainor
coerce nonstrikers from working during the strike,
it:
1. Assaultsorthreatenstoassaultthem
2. Threatensthemwiththelossoftheirjobs
3. Blocks their ingress to or egress from the
plant
4. Damages nonstrikers automobiles or
forcesthemoffthehighway
5. Physicallypreventingthemfromworking
6. Sabotages the Ers property in their
presence, thereby creating an
atmosphereoffearorviolence
7. Demonstrates loudly in front of a non
strikers residence with signs and shouts
accusingthenonstrikerofscabbing
8. Holdingthenonstrikeruptoridicule
9. Seeking public condemnation of the non
striker
Q: What is a case of union induced discrimination

bylabororganization(LO)?
A: This pertains to the arbitrary use of union

securityclause.
A union member may not be expelled from the
union, and consequently from his job, for personal


LABORLAWTEAM:
158
andimpetuousreasonsorforcausesforeigntothe
closed shop agreement. (Manila Mandarin Ees
Unionv.NLRC,G.R.No.76989,Sep.29,1987)
Laborunionsarenotentitledtoarbitrarilyexclude
qualified applicants for membership and a closed
shop applicants provision will not justify the
employerindischarging,oraunionininsistingupon
thedischargeofanemployeewhomtheunionthus
refuses to admit to membership without any
reasonable ground thereof. (Salunga v. CIR, G.R.
No.L22456,Sep.27,1967)
Q:Whenisthererefusaltobargain?
A:Aunionviolatesitsdutytobargaincollectivelyby
entering negotiations with a fixed purpose of not
reachinganagreementorsigningacontract.
3.RIGHTTOPEACEFULCONCERTEDACTIVITIES
Q: What is the constitutional basis of strikes,
lockoutsandotherconcertedactivities?
A: The State shall guarantee the rights of all
workers to selforganization, collective bargaining
andnegotiations,andpeacefulconcertedactivities,
including the right to strike in accordance with law
(Sec.3,Art.XIII,1987Constitution).
Note: The law does not look with favor upon strikes
and lockouts because of their disturbing and
perniciouseffectsuponthesocialorderandthepublic
interests; to prevent or avert them and to implement
Sec.6,Art.XIVoftheConstitution,thelawhascreated
severalagencies,namely:theBLR,theDOLE,theLabor
Management Advisory Board, and the CIR. (Luzon
Marine Devt Union v. Roldan, G.R. No. L2660, May
30,1950)
Q:Whatisaconcertedaction?
A: It is an activity undertaken by 2 or more
employees,byoneonbehalfoftheothers.
Q:Areallconcertedactionsstrikes?
A:Notallconcertedactivitiesarestrikes.Theymay
only be protest actions they do not necessarily
cause work stoppage by the protesters. A strike in
contrast is always a group action accompanied by
workstoppage.
Q: The Ees wrote and published a letter to the
bank president, demanding his resignation on the
grounds of immorality, nepotism, favoritism and
discrimination in the appointment and promotion
ofbankEes.Thebankdismissedthe8Eesonthe
alleged libelous letter. Were the Ees engaged in a
concertedactivity?
A: Yes, assuming that they acted in their individual

capacities when they wrote the letter, they were
nonetheless protected, for they were engaged in a
concertedactivity,intheirrightofselforganization
that includes concerted activity for mutual aid and
protection.Anyinterferencemadebythecompany
willconstituteasULP.
Thejoininginprotestsordemands,evenbyasmall
group of Ees, if in furtherance of their interests as
such is a concerted activity protected by the
Industrial Peace Act. It is not necessary that union
activity be involved or that collective bargaining be
contemplated. (Republic Savings Bank v. CIR, G.R.
No.L20303,Oct.31,1967)
Q:Whatisastrike?
A:Itmeansanytemporarystoppageofworkbythe
concerted action of employees as a result of an
industrial or labor dispute. (Sec.1 [uu], Rule I, Book
V,IRR)
It shall comprise not only concerted work

stoppages, but also slowdowns, mass leaves,
sitdowns, attempt to damage, destroy or sabotage
plantequipmentandfacilities,andsimilaractivities.
(Samahang Manggagawa sa Sulpicion Lines v.
SulpicioLines,Inc.,G.R.No.140992,Mar.25,2004)
Q:Whatisthepurposeofastrike?
A: A strike is a coercive measure resorted to by

laborerstoenforcetheirdemands.Theideabehind
a strike is that a company engaged in a profitable
business cannot afford to have its production or
activities interrupted, much less, paralyzed. (Phil.
CanCo.v.CIR,G.R.No.L3021,July13,1950)
Q:Whatisalockout?
A: It means any temporary refusal of an employer

to furnish work as a result of an industrial or labor
dispute.(Art.212[p])
Q:Whatispicketing?
A:Itistheactofmarchingtoandfrotheemployers
premises which is usually accompanied by the
display of placard and other signs, making known
thefactsinvolvedinalabordispute.
The right to picket as a means of communicating

the facts of a labor dispute is a phase of the
freedomofspeechguaranteedbytheConstitution.
If peacefully carried out, it can not be curtailed

LABOR RELATIONS LAW

159
evenintheabsenceofErEerelationship.(PAFLUv.
Cloribel,G.R.No.L25878,Mar.28,1969)
Q:Istherighttopicketanabsoluteright?
A: No, while peaceful picketing is entitled to

protectionasanexerciseoffreespeech,thecourts
are not without power to confine or localize the
sphere of communication or the demonstration to
the parties to the labor dispute, including those
with related interests, and to insulate
establishments or persons with no industrial
connection or having interest totally foreign to the
context of the dispute. (Liwayway Pub., Inc. v.
Permanent Concrete Workers Union, G.R. No. L
25003,Oct.23,1981)
Therighttopeacefulpicketingshallbeexercisedby
the workers with due respect for the rights of
others.No person engaged in picketing shall
commit any act of violence, coercion or
intimidation.Stationary picket, the use of means
like placing of objects to constitute permanent
blockade orto effectively close points of entry or
exitincompanypremisesareprohibitedbylaw.
Q:Whoisastrikebreaker?
A: Any person who obstructs, impedes, or

interfereswithbyforce,violence,coercion,threats,
or intimidation any peaceful picketing affecting
wages, hours or conditions of work or in the
exercise of the right of selforganization or
collectivebargaining.(Art.212[r])
Q:Whatisastrikearea?
A:Itmeanstheestablishment,warehouses,depots,
plants or offices, including the sites or premises
used as runaway shops, of the Er struck against, as
well as the immediate vicinity actually used by
picketing strikers in moving to and fro before all
points of entrance to and exit from said
establishment.(Sec.1[vv],RuleI,BookV,IRR)
Q:Whatisaninternaluniondispute?
A:Itincludesalldisputesorgrievancesarisingfrom
anyviolationofordisagreementoveranyprovision
oftheconstitutionandbylawsofaunion,including
any violation of the rights and conditions of union
membershipprovidedforinthisLC.(Art.212[q])
Q:Whatisaboycott?
A: It is an attempt, by arousing a fear of loss, to
coerce others, against their will to withhold from
one denominated unfriendly to labor their
beneficialbusinessintercourse.
Q:Whatisaslowdown?
A: It is a method by which ones employees,
without seeking a complete stoppage of work,
retard production and distribution in an effort to
compel compliance by the employer with the labor
demandsmadeuponhim.
Q: Does an overtime boycott or work
slowdown by the employees constitute a strike
and hence a violation of the CBAs No strike, no
lockoutclause?
A: Yes, the concept of a slowdown is a "strike on

the installment plan."It is a willful reduction in the
rateofworkbyconcertedactionofworkersforthe
purpose of restricting the output of the employer
(Er), in relation to a labor dispute; as an activity by
which workers, without a complete stoppage of
work, retard production or their performance of
duties and functions to compel management to
granttheirdemands.
Such a slowdown is generally condemned as

inherentlyillicitandunjustifiable,becausewhilethe
employees (Ees) "continue to work and remain at
theirpositionsandacceptthewagespaidtothem,"
they at the same time "select what part of their
allotted tasks they care to perform of their own
volition or refuse openly or secretly, to the Er's
damage, to do other work;" in other words, they
"work on their own terms." (Interphil Laboratories
Ees UnionFFW v. Interphil Laboratories, Inc., G.R.
No.142824,Dec.19,2001)
Q:Whatarethecharacteristicsofastrike?
A:
1. ExistenceofanErEerelationship
2. Existenceofalabordispute
3. Employment relation is deemed to
continuealthoughinastateofbelligerent
suspension
4. Temporaryworkstoppage
5. Workstoppageisdonethroughconcerted
action
6. The striking group is a legitimate labor
organization; in case of a bargaining
deadlock, it must be the employees sole
bargainingrepresentative
Q: PAL dismissed strike leader Capt. Gaston as a

result of which the Union resolved to undertake
the grounding of all PAL planes and the filing of
applications for protest retirement of members
whohadcompleted5yearsofcontinuousservice,
and protest resignation for those who had
rendered less than 5 years of service in the
company. PAL acknowledged receipt of said
letters and among the pilots whose protest


LABORLAWTEAM:
160
resignation or retirement was accepted by PAL
wereEnriquezandEcarma.
Before their readmission, PAL required Enriquez

and Ecarma to accept 2 conditions, namely: that
they sign conformity to PALs letter of acceptance
of their retirement and or resignation and that
theysubmitanapplicationforemploymentasnew
employees(Ees)withoutprotestorreservation.As
aresultofthistheirseniorityrightswerelost.
Are the pilots entitled to the restoration of their

seniorityrights?
A: No, an Ee has no inherent right to seniority. He

hasonlysuchrightsasmaybebasedonacontract,
statute, or an administrative regulation relative
thereto. Seniority rights which are acquired by an
Ee through longtime employment are contractual
and not constitutional. The discharge of an Ee
thereby terminating such rights would not violate
the Constitution. When the pilots tendered their
respective retirement or resignation and PAL
immediately accepted them, both parties mutually
terminated the contractual employment
relationship between them thereby curtailing
whatever seniority rights and privileges the pilots
hadearnedthroughtheyears.
Q:DoestheactionoftheEesofPALfallunderthe
ambitofconcertedactionsprotectedbylaw?
A: No, the pilots mass action was not a strike

because Ees who go on strike do not quit their
employment. Ordinarily, the relationship of Er and
Ee continues until one of the parties acts to sever
the relationship or they mutually act to accomplish
thatpurpose.Astheydidnotassumethestatusof
strikers, their protest retirement/resignation was
not a concerted activity which was protected by
law. (Enrique v. Zamora, G.R. No. L51382, Dec. 29,
1986)
Q:Whatisalabordispute?
A: Any controversy or matter concerning terms or

conditions or representation of persons in
negotiating, fixing, maintaining, changing or
arrangingthetermsandconditionsofemployment,
regardlessofwhetherornotthedisputantsstandin
the proximate relation of Ers and Ees. (Gold City
Integrated Port Services, Inc. v. NLRC, G.R. No.
103560,July6,1995)
Q: When is a person or entity considered as

participatingorinterestedinalabordispute?
A:
1. Ifreliefissoughtagainsthimorit,and
2. He or it is engaged in the same industry,
trade, craft, or occupation in which such
disputeoccurs,or
3. Hasadirectorindirectinteresttherein,or
4. Is a member, officer, or agent of any
association composed in whole or in part
of employees or employers engaged in
suchindustry,trade,craft,oroccupation.
Q:LiwaywayPublicationInc.isasecondsublessee
of a part of the premises of the Permanent
Concrete Products, Inc. It has a bodega for its
newsprint in the sublet property which it uses for
its printing and publishing business. The daily
supply of newsprint needed to feed its printing
plant is taken from its bodega. The Ees of the
Permanent Concrete Products Inc. declared a
strike against their company. The union members
picketed, stopped and prohibited Liwayways
trucks from entering the compound to load
newsprintfromitsbodega.
Does the lower court have jurisdiction to issue a

writ of preliminary injunction considering that
there was a labor dispute between Permanent
ConcreteProducts,Inc.andtheunion?
A: Yes, Liwayway Publication Inc. is not in anyway

relatedtothestrikingunionexceptforthefactthat
it is the sub lessee of a bodega in the companys
compound.
The business of Liwayway is exclusively the

publication of magazines which has absolutely no
relation or connection whatsoever with the cause
of the strike of the union against their company,
muchlesswiththeterms,conditionsordemandsof
the strikers. Liwayway is merely a 3
rd
person or an
innocent bystander. (Liwayway Pub., Inc. v.
Permanent Concrete Workers Union, G.R. No. L
25003,Oct.23,1981)
Q: Because of financial problems, the company

decidedtotemporarilyshutdownitsoperationsat
the dyeing and finishing division. It notified the
DOLE of the shutdown. Raymund Tomaroy with
16 members of the union staged a picket in front
ofthecompanyscompound,carryingplacards.He
demanded a resumption of work and 13
th
month
pay. The company filed a petition to declare the
strike illegal. The union argues that they did not
stage a strike, for considering that the dyeing and
finishing division of the company was shut down,
itcouldnothavecausedaworkstoppage.Wasthe
actionoftheunionastrike?
LABOR RELATIONS LAW

161
A:Yes,theconcertedeffortsofthemembersofthe
union and its supporters caused a temporary work
stoppage.Theallegationthattherecanbenowork
stoppagebecausetheoperationinthedivisionhad
been shut down is of no consequence. It bears
stressing that the other divisions were fully
operational. (Bukluran ng Manggagawa sa
Clothman Knitting Corp. v. CA, G.R. No. 158158,
Jan.17,2005)
a.FormsofConcertedActivities
Q:Whatarethetypesofstrike?
A:
1. Economic strike used to secure the
economic demands such as higher wages
and better working conditions for the
workers
2. ULP strike protest against ULP of
management
Q:Distinguishbetweenaneconomicstrikeandan
ULPstrike.
A:
ECONOMICSTRIKE ULPSTRIKE
Astonature
Voluntarystrike
becausetheEewill
declareastriketo
compel
managementto
grantitsdemands
Involuntarystrike;theLO is
forcedtogoonstrikebecause
oftheULPcommittedagainst
thembytheEr.Itisanactof
selfdefensesincetheEesare
beingpushedtothewalland
theironlyremedyistostagea
strike
Whowillinitiate
TheCBagentof
theappropriate
bargainingunitcan
declarean
economicstrike
EithertheCBagentortheLLOin
behalfofitsmembers
Astothecoolingoffperiod
30daysfrom
noticeofstrike
beforethe
intendeddateof
actualstrike
subjecttothe7
daystrikeban
15daysfromthefilingofthe
noticeofstrike
Astotheexceptiontothecoolingoffperiod
Noexception
mandatory
Note:noticeof
strikeandstrike
votemaybe
dispensedwith;
theymaystrike
immediately
Thecoolingoffperiodmaybe
dispensedwith,andtheunion
maytakeimmediateactionin
caseofdismissalfrom
employmentoftheirofficers
dulyelectedinaccordancewith
theunionsconstitutionandby
laws,whichmayconstitute
unionbustingwherethe
existenceoftheunionis
threatened.Itmuststillobserve
themandatory7daystrikeban
periodbeforeitcanstagea
validstrike
Q:Whatarethedifferentformsofstrike?
A:
1. Legal Strikeone called for a valid purpose
and conducted through means allowed by
law.
2. Illegal Strikeone staged for a purpose not
recognizedbylaw,orifforavalidpurpose,
conducted through means not sanctioned
bylaw.
3. Economic Strike one staged by workers to
force wage or other economic concessions
from the employer which he is not
required by law to grant
(Consolidated Labor Association
of the Phil. vs. Marsman, G.R. No. L
17038,July31,1964)
4. ULPStrikeonecalledtoprotestagainstthe
employers acts of unfair practice
enumerated in Article 248 of the Labor
Code, as amended, including gross
violation of the collective bargaining
agreement(CBA)andunionbusting.
5. Slow Down Strikeone staged without the
workers quitting their work but by merely
slackening or by reducing their normal
workoutput.
6. WildCat Strikeone declared and staged
without filing the required notice of strike
and without the majority approval of the
recognizedbargainingagent.
7. Sit Down Strikeone where the workers
stop working but do not leave their place
ofwork.
b.Whomaydeclareastrikeorlockout
Q:Whomaydeclareastrikeorlockout?
A:
1. Any certified or duly recognized
bargaining representative may declare a
strike in cases of bargaining deadlock
and unfair labor practice. Likewise, the
employer may declare a lockout in the
samecases.
2. In the absence of a certified or duly
recognized bargaining representative,
any legitimate labor organization in the
establishment may declare a strike but
only on the ground of unfair labor
practice. (Section 2, Rule XIII Book V,


LABORLAWTEAM:
162
Omnibus Rules Implementing The Labor
Code,asamended).
c.Requisitesforavalidstrike/lockout
Q:Whataretherequisitesofalawfulstrike/
lockout?
A: The requirements for a valid strike or

lockoutareasfollows:
1. Itmustbebased onavalidandfactual
ground;
2. A strike or lockout NOTICE shall be filed

with the National Conciliation and
Mediation Board (NCMB) at least 15 days
before the intended date of the strike or
lockout if the issues raised are unfair
labor practices, or at least 30 days
beforethe intended date thereof if the
issueinvolvesbargainingdeadlock.
3. Incasesofdismissalfromemploymentof
union officers duly elected in accordance
with the union constitution and bylaws,
which may constitute UNION BUSTING
where the existence of the union is
threatened, the 15day coolingoff period
shall not apply and the union may take
actionimmediatelyafterthestrikevoteis
conducted and the result thereof
submitted to the Department of Labor
andEmployment.
4. A strike must be approved by a majority
vote of themembers of the Union and a
lockout must be approved by a majority
vote of the members of the Board of
Directors of the Corporation or
Association or of the partners in a
partnership,obtainedbysecretballotina
meetingcalledforthatpurpose.
5. AstrikeorlockoutVOTEshallbereported
to the NCMBDOLE Regional Branch at
least7daysbeforetheintendedstrikeor
lockoutsubjecttothecoolingoffperiod.
6. In the event the result of the
strike/lockout ballot is filed within the
coolingoffperiod,the7dayrequirement
shall be counted from the day following
the expiration of the coolingoff
period. (NSFW vs. Ovejera, G.R. No.
59743,May31,1982)
Incaseofdismissalfromemploymentof
unionofficerswhichmayconstituteunion
busting, the time requirement for the
filing of the Notice of Strike shall be
dispensed with but the strike vote
requirement, being mandatory in
character, shall in every case be
compliedwith.
7. Thedisputemustnotbethesubjectofan
assumption of jurisdiction by the
President or the Secretary of Labor and
Employment, a certification for
compulsory arbitration, or submission to
compulsoryorvoluntaryarbitrationnora
subject of a pending case involving the
samegroundsforthestrikeorlockout.
Q:Whatarethevalidgroundsfordeclaringa
strikeorlockout?
A: The law recognizes 2 grounds for the valid

exerciseoftherighttostrikeorlockout,namely:
1. Collective Bargaining Deadlock (CBD)

economic;
2. UnfairLaborPractice(ULP)political
Note:Itispossibletochangeaneconomicstrikeintoa
ULP strike. (Consolidated Labor Assn of the Phils. v.
MarsmanandCo.,G.R.No.L17038,July31,1964)
Violations of CBA must be gross to be considered as

ULP.
Q:Whatisconversiondoctrine?
A: It is when a strike starts as economic and later,

asitprogresses,itbecomesaULP,orviceversa.
Q:Canastrikebeconvertedintoalockout?
A:No,astrikecannotbeconvertedintoapureand
simple lockout by the mere expedient of filing
before the trial court a notice of offer to return to
work during the pendency of the labor dispute
between the union and the employer. (Rizal
Cement Workers Union v. CIR, G.R. No. L18442,
Nov.30,1962).
Q: Give examples of strike and explain their

legality.
A:
1. Sitdown strike Characterized by a
temporaryworkstoppageofworkerswho
seize or occupy property of the Er or
refusetovacatethepremisesoftheEr.
LABOR RELATIONS LAW

163
Illegal Amounts to a criminal
act because of the Ees trespass
onthepremisesoftheEr
2. Wildcat strike A work stoppage that
violates the labor contract and is not
authorizedbytheunion.
Illegal Because it fails to
comply with certain reqts of
the law, to wit: notice of strike,
voteandreportonstrikevote
3. SlowdownStrikeonaninstallmentplan;
an activity by which workers, without
complete stoppage of work, retard
productionortheirperformanceofduties
and functions to compel management to
granttheirdemands
Illegal Ees work on their own

terms;whiletheEescontinueto
work and remain in their
positionsandacceptwagespaid
to them, they at the same time
select what part on their
allotted tasks they care to
performontheirownvolitionor
refuseopenlyorsecretly
4. Sympathetic strike Work stoppages of

workers of one company to make
common cause with other strikers or
other companies without demands or
grievancesoftheirownagainsttheEr
Illegal There is no labor

dispute between the workers
whoare joining the strikers and
thelattersEr
5. Secondary strike Work stoppages of

workers of one company to exert
pressureontheirErsothatthelatterwill
in turn bring pressure upon the Er of
another company with whom another
unionhasalabordispute
Illegal There is no labor

disputeinvolved.
Note: A strike can validly take

place only in the presence of and
in relation to a labor dispute
betweenErandEe.
6. Welga ng bayan (Cause Oriented Strikes)

A political strike and therefore there is
neitherabargainingdeadlocknoranyULP
IllegalItisapoliticalrally
7. Quickie strikes brief and unannounced

temporaryworkstoppage
Illegal failure to comply with notice

requirementsandetc.
Q: Two unions, joined a welga ng bayan. The

unions, led by their officers, staged a work
stoppagewhichlastedforseveraldays,prompting
FILFLEX and BIFLEX Corporations to file a petition
to declare the work stoppage illegal for failure to
comply with procedural reqts. Whether the Ees
committedanillegalworkstoppage?
A:Yes.Ees,whohavenolabordisputewiththeirEr
but who, on a day they are scheduled to work,
refuse to work and instead join a welga ng bayan
commit an illegal work stoppage. There being no
showing that the two unions notified the
corporations of their intention, or that they were
allowed by the corporations, to join the welga ng
bayan, their work stoppage is beyond legal
protection.(BIFLEX Phils. Inc. Labor Union (NAFLU)
vs.FILFLEXIndustrialandManufacturingCorp.,G.R.
No.155679,Dec.19,2006)
Q:Whatarethetestsindeterminingthelegalityof
strike?
A:Thefollowingmustconcur:
1. Purpose test the strike must be due to
either bargaining deadlock and/or the
ULP
2. Compliance with the procedural and
substantive reqts of the law. (See
requisitesofavalidstrike)
3. Means employed test It states that a
strike may be legal at its inception but
eventually be declared illegal if the strike
is accompanied by violence which is
widespread, pervasive and adopted as a
matter of policy and not mere violence
whichissporadicwhichnormallyoccurin
astrikearea.
Q:Whataretheinstanceswhenastrikeorlockout
cannotbedeclared?
A:Nonstrikableissues:
1. CBAviolationsnotgrossincharacter
2. Grounds involving inter/intraunion
disputes
3. When there is no notice of strike or
lockout or without the strike or lockout
vote


LABORLAWTEAM:
164
4. After assumption of jurisdiction by the
SLE
5. After certification or submission of
dispute to compulsory or voluntary
arbitration or during the pendency of
cases involving the same grounds for
strikeorlockout
6. Labor standards cases such as wage
orders. (Guidelines governing Labor
Relations [Oct. 19, 1987] issued by Sec.
Drilon.SeealsoArt.261,LC)
Q: What are the procedural and substantive

requisitesbeforeastrikemaybedeclared?
A:
1. Notice of strike filed with the NCMB
taking into consideration the coolingoff
period
Note: The failure of the union to serve the

company a copy of the notice of strike is a
clearviolationofSection3,RuleXXII,BookV
of the Rules Implementing the LC. The
Constitutional precepts of due process
mandate that the other party be notified of
the adverse action of the opposing party.
(Filipino Pipe and Foundry Corp. v. NLRC,
G.R.No.115180,Nov.r16,1999)
2. 30/15 day Coolingoff period before the

intended date of actual strike notice of
strike is filed with the NCMB taking into
consideration the coolingoff period, at
least:
a. 30 days before the intended strike

forbargainingdeadlocks;
b. 15 days before the intended strike
forULP
3. Strikevote
a. Thedecisiontodeclareastrikemust
be approved by a majority of the
total union membership in the
bargainingunitconcerned.
b. It must be obtained by secret ballot
throughmeetingsorreferendacalled
forthepurpose.
c. Its purpose is to ensure that the
intendedstrikeisamajoritydecision.
The report on the strike vote must
besubmittedtoDOLEatleast7days
beforetheintendedstrikesubjectto
thecoolingoffperiod.
d. The regional branch may supervise
theconductofthesecretballotingat
its own initiative or upon request of
anyparty.
4. Furnish the regional branch of the NCMB

with a notice to conduct a strike vote, at
least 24hours before the meeting for
such purpose (Sec. 10, Rule XXII of the
OmnibusRulesoftheNLRC).
5. 7Day strike ban a 7day waiting period

before the date of the purported strike
(within which the union intending to
conduct a strike must at least submit a
report to DOLE as to the result of the
strikevote)
Note: TogiveDOLEanopportunitytoverify
whether the projected strike really carries
the imprimatur of the majority of the union
members in addition to the coolingoff
period before the actual strike. (Lapanday
Workers Union, et.al. v. NLRC, G.R. Nos.
9549497,Sep.7,1995)
Q:Whatisacoolingoffperiod?
A: It is the period of time given the NCMB to

mediate and conciliate the parties. It is the span of
time allotted by law for parties to settle their
disputes in a peaceful manner before staging a
strikeorlockout.
Note: Coolingoff and waiting period may be done

simultaneously.
Q: What is the effect of noncompliance with the

requisitesofastrike?
A:Thestrikemaybedeclaredillegal.
Q: What is the purpose of giving notice of the

conduct of a strike vote to the NCMB at least 24
hoursbeforethemeetingforthesaidpurpose?
A:
1. Inform the NCMB of the intent of the
uniontoconductastrikevote;
2. Give the NCMB ample time to decide on
whether or not there is a need to
supervise the conduct of the strike vote
to prevent any acts of violence and or
irregularities;
3. Ample time to prepare for the
deployment of the requisite personnel.
(Capitol Medical Center v. NLRC, G.R. No.
147080,April26,2005)
Q:Isanostrike/lockoutclauselegal?
LABOR RELATIONS LAW

165
A: Yes,butitisapplicableonlytoeconomicstrikes,
not ULP strikes. As a provision in the CBA, it is a
valid stipulation although the clause may be
invokedbyanemployer(Er)onlywhenthestrikeis
economic in nature or one which is conducted to
force wage or other concessions from the Er that
arenotmandatedtobegrantedbythelawitself.It
would be inapplicable to prevent a strike which is
grounded on ULP. (Panay Electric Co. v. NLRC, G.R.
No. 102672, Oct. 4, 1995; Malayang Samahan ng
mgaManggagawasaGreenfieldv.Ramos,G.R.No.
113907,Feb.28,2000)
Q:Whatisapreventivemediationcase?
A: It involves labor disputes which are the subject

of a formal or informal request for conciliation and
mediation assistance sought by either or both
parties or upon the initiative of the NCMB. (Sec. 1
[mm],RuleI,BookV,IRR)
Note: The regional branch may treat the notice as

preventive mediation case upon agreement of the
parties.
Q:Whatarethecontentsofthenoticeofstrikeor
lockout?
A:
1. NameandaddressesofEr
2. Unioninvolved
3. Nature of the industry to which the Er
belongs
4. Numberofunionmembers
5. Workersinthebargainingunit
6. Otherrelevantdate
7. In case of bargaining deadlocks:
unresolved issues, written proposals of
the union, counterproposals of the Er
and proof of request for conference to
settledifferences
8. In case of ULP: The acts complained of,
and the efforts taken to resolve the
dispute
Note: NCMB shall inform the concerned party in case

noticedoesnotconformwiththereqts.
Q:Whatactionwilltheboardtakeonthenoticeof
strikeofstrikeorlockout?
A:
1. Upon receipt of notice, the regional
branch of the Board shall exert all efforts
at mediation and conciliation to enable
thepartiestosettlethedisputeamicably.
It shall also encourage the parties to
submit the dispute to voluntary
arbitration.
2. The regional branch of the NCMB may,
upon agreement of the parties, treat a
noticeasapreventivemediationcase.
3. During the proceedings, the parties shall
not do any act which may disrupt or
impede the early settlement of the
dispute. They are obliged, as part of their
duty to bargain collectively in good faith
and to participate fully and promptly in
conciliation meetings called by the
regionalbranchoftheNCMB.
4. A notice, upon agreement of the parties,
may be referred to alternative modes of
dispute resolution, including voluntary
arbitration.
Q:Wasthestrikeheldbytheunionlegalbasedon
the fact that the notice of strike only contained
generalallegationsofULP?
A: No. Rule XIII Sec. 4 Book V of the Implementing

RulesoftheLCprovides:IncasesofULP,thenotice
of strike shall as far as practicable, state the acts
complainedofandtheeffortstoresolvethedispute
amicably. (Tiu v. NLRC, G.R. No. 123276, Aug. 18,
1997)
Q: NFSW, the bargaining agent of Central
Azucarera de la Carlota (CAC) rank and file
employees, filed a notice of strike based on non
payment of the 13
th
month pay and 6 days
thereafter they held the strike. A day after the
commencement of the strike, a report of the
strikevote was filed by NFSW with MOLE. CAC
filed a petition to declare the strike illegal due to
noncompliance with the 15day cooling of period
andthestrikewasheldbeforethelapseof7days
from the submission to the MOLE of the result of
thestrikevote.WasthestrikeheldbyNFSWlegal?
A:No.ThecoolingoffperiodinArt.264(c)andthe
7day strike ban after the strikevote report
prescribed in Art. 264 (f) were meant to be
mandatory. The law provides that the labor union
may strike should the dispute remain unsettled
untilthelapseoftherequisitenumberofdaysfrom
thefilingofthenotice,thisclearlyimpliesthatthe
union may not strike before the lapse of the
coolingoffperiod.Thecoolingoffperiodisforthe
Ministry of Labor and Employment to exert all
efforts at mediation and conciliation to effect a
voluntarysettlement.
The mandatory character of the 7day strike ban is
manifest in the provision that in every case the
unionshallfurnishtheMOLEwiththeresultsofthe
voting at least 7 days before the intended strike.
Thisperiodistogivetimetoverifythatastrikevote


LABORLAWTEAM:
166
was actually held. (NFSW v. Ovejera, G.R. No. L
59743,May31,1982)
Q:FilTransitEesUnionfiledanoticeofstrikewith
the BLR because of alleged ULP of the company.
Because of failure to reach an agreement the
union went on strike. Several employees (Ees)
were dismissed because of the strike. The union
filedanothernoticeofstrikeallegingULP,massive
dismissalofofficersandmembers,coercionofEes
and violation of workers rights to self
organization. The Ministry of Labor and
Employment, after assuming jurisdiction over the
dispute, ordered all striking Ees including those
who were dismissed to return to work. The
company however countered that no strike vote
had been obtained before the strike was called
and the resultof the strike vote was not reported
to Ministry of Labor and Employment. Was the
strikeheldbytheunionillegalforfailuretoholda
strikevote?
A: Yes, there is no evidence to show that a strike
vote had in fact been taken before a strike was
called. Even if there was a strike vote held, the
strike called by the union was illegal because of
nonobservance by the union of the mandatory 7
day strike ban counted from the date the strike
voteshouldhavebeenreportedtotheDOLE.(First
City Interlink Transportation Co., Inc. v. Confessor,
G.R.No.106316,May5,1997)
Q: The company conceived and decided to
retrench its Ees and selected about 40 Ees to be
dismissedbecauseofthelackofwork.Becauseof
this about 200 Ees during breaktime boarded
buses and went to the Ministry of Labor but they
wereadvisedtoreturntowork.
Upon returning to the companys premises, the
Ees were only allowed to stay in the canteen and
were not given work because according to the
company the machines were undergoing repairs.
Are the Ees entitled to reinstatement and
backwages?
A:TheEesareentitledtoreinstatementbutnotto
backwages. Both parties being in pari delicto,
having conducted an illegal strike and lockout
respectively, there must be a restoration of the
status quo ante and must bring the parties back to
their respective positions prior to the illegal strike
and lockout which shall be done by reinstating the
remaining Ees. However, it is the general rule that
strikersarenotentitledtobackwages.Theprinciple
of no work, no pay is applicable in view of the
finding of the illegality of the strike. (Philippine
InterFashion,Incv.NLRC,G.R.No.L59847,Oct.18,
1982)
Q: What are the exceptions tothe no backwages
ruleofstrikers?
A:
1. When the Ees were illegally locked thus
compellingthemtostageastrike
2. WhentheErisguiltyofthegrossestform
ofULP
3. When the Er committed discrimination in
therehiringofstrikersrefusingtoreadmit
those against whom there were pending
criminalcaseswhileadmittingnonstrikers
who were also criminally charged in
court;
4. When the workers who staged a
voluntary ULP strike offered to return to
work unconditionally but the Er refused
toreinstatethem.(ManilaDiamondHotel
vs.ManilaDiamondHotelEesUnion,G.R.
No.158075,June30,2006)
d.AssumptionofJurisdictionbytheSecretaryof
LabororCertificationoftheLabordisputetothe
NLRCforcompulsoryarbitration
Q: Discuss the assumption of jurisdiction by the
Secretary of Labor and Employment (SLE) on
strikes/lockouts.
A:
1. Discretionary
a. If in his opinion there exists a labor
dispute causing or likely to cause a
strike or lockout in an industry
indispensabletothenationalinterest.
b. He may certify the same to the NLRC
forcompulsoryarbitration
c. Effect Automatically enjoins the
intended or impending strike/lockout
but if one has already taken place, all
striking or locked out Ees shall
immediatelyreturntoworkandtheEr
shall immediately resume operations
and readmit all workers under the
same terms and conditions prevailing
before the strike or lockout (Trans
Asia Shipping Lines, Inc.Unlicensed
Crews Ees Union v. CA, G.R. No.
145428,July7,2004)
Note: A motion for reconsideration does not

suspend the effects as the assumption order
isimmediatelyexecutory.
2. Mandatory(within24hours)
a. In labor disputes adversely affecting
the continued operation of hospitals,
clinicsormedicalinstitutions.
LABOR RELATIONS LAW

167
b. Mayassumejurisdictionorcertifyitto
theNLRCforcompulsoryarbitration
c. DutyofstrikingunionorlockingoutEr
to provide and maintain an effective
skeletal workforce of medical and
other health personnel, where
movement and service shall be
unhampered and unrestricted as are
necessary to insure the proper and
adequate protection of the life and
health of its patients most especially
emergency cases for the duration of
thestrikeorlockout(Art.263[g])
Q: What does the phrase under the same terms

andconditionscontemplate?
A:
GR: It contemplates only actual reinstatement.
This is in keeping with the rationale that any
work stoppage or slowdown in that particular
industry can be inimical to the national
economy.
XPN: Payroll reinstatement in lieu of actual

reinstatement but there must be showing of
special circumstances rendering actual
reinstatement impracticable, or otherwise not
conducivetoattainingthepurposeofthelawin
providing for assumption of jurisdiction by the
SLE in a labor dispute that affects the national
interest. (Manila Diamond Hotel Ees Union v.
SLE,G.R.No.140518,Dec.16,2004)
Q:WhatareissuesthattheSLEmayresolvewhen
heassumesjurisdictionoveralabordispute?
A:
1. IssuessubmittedtotheSLEforresolution
and such issues involved in the labor
dispute itself. (St. Scholasticas College v.
Torres,G.R.No.100158,June2,1992)
2. SLE may subsume pending labor cases
before LAs which are involved in the
dispute and decide even issues falling
under the exclusive and original
jurisdiction of LAs such as the declaration
of legality or illegality of strike (Intl.
Pharmaceuticals v. SLE, G.R. Nos. 92981
83,Jan.9,1992)
Note: Power of SLE is plenary and discretionary. (St.

Lukes Medical Center v. Torres, G.R. No. 99395, June
29,1993)
Q: Is it necessary for the SLE to issue a returnto

workorderinanassumptionorder?
A: No, the mere issuance of an assumption order

automatically carries with it a returntowork order
althoughnotexpresslystatedtherein.(TSEUFFWv.
CA,G.R.Nos.14301314,Dec.18,2000)
Q: What is the extent of the powers of the

Presidentduringstrikes/lockouts?
A:
1. May determine the industries, which are
in his opinion indispensable to national
interest
2. May intervene at any time and assume
jurisdictionoveranysuchlabordisputein
order to settle or terminate the same.
(Art.263[g])
Note: The decision of the President/SLE is final and

executoryafterreceiptthereofbytheparties.
Q: May a return to work order be validly issued

pending determination of the legality of the
strike?
A: Yes. Where the return to work order is issued

pending the determination of the legality of the
strike, it is not correct to say that it may be
enforced only if the strike is legal and may be
disregarded if illegal. Precisely, the purpose of the
return to work order is to maintain the status quo
while the determination is being made. (Sarmiento
v.Tuico,G.R.Nos.7527173,June27,1988)
e.NatureofAssumptionOrderorCertification
Order
Q: What is the nature of the power of SLE under

Art.263(g)?
A:Theassumptionofjurisdictionisinthenatureof
a police power measure. This is done for the
promotion of the common good considering that a
prolonged strike or lockout can be inimical to the
national economy. The SLE acts to maintain
industrial peace. Thus, his certification for
compulsory arbitration is not intended to impede
the workers right to strike but to obtain a speedy
settlementofthedispute.(PhiltreadWorkersUnion
v.Confesor,G.R.No.117169,Mar.12,1997)
Art.263(g)doesnotinterferewiththeworkersright
to strike but merely regulates it, when in the
exercise of such right national interest will be
affected. The LC vests upon the SLE the discretion
to determine what industries are indispensable to
nationalinterest.
Q: What is the nature of assumption and

certificationordersoftheSecretaryofLabor?


LABORLAWTEAM:
168
A: The underlying principle embodied in Art. 264

(g) on the settlement of labor disputes is that
assumptionandcertificationordersareexecutorin
character and are strictly complied with by the
parties even during the pendency of any petition
questioning their validity. This extraordinary
authoritygiventotheSecretaryofLaborisaimedat
arriving at a peaceful and speedy solution to labor
disputes,withoutjeopardizingnationalinterests.

Q: A notice of strike was filed by the PSBA Ees
UnionFFW,allegingunionbusting,coercionofEes
and harassment on the part of PSBA. The
conciliation being ineffective, the strike pushed
through.AcomplaintforULPandforadeclaration
of illegality of the strike with a prayer for
preliminary injunction was filed by PSBA against
theunion.
While the cases were pending, a complaint was

filed in the RTC of Manila by some PSBA students
against PSBA and theunion, seeking toenjointhe
union and its members from picketing and from
barricading themselves in front of the schools
main gate. A TRO was then issued by the RTC,
which the union opposed on the ground that the
case involves a labor dispute over which the RTC
had no jurisdiction. The Acting SLE later on
assumed jurisdiction over the labor dispute and
ordered the striking Ees to return to work. Was
the SLE correct in ordering the striking Ees to
returntowork?
A: Yes. In the opinion of the Acting SLE, the labor

dispute adversely affected the national interest,
affecting as it did 9,000 students. He is authorized
by law to assume jurisdiction over the labor
dispute, after finding that it adversely affected the
nationalinterest.Thispowerisexpresslygrantedby
Art.263(g)oftheLC,asamendedbyB.P.Blg.227.
Q:DoestheRTChavejurisdictiontodecideonthe
casefiledbythePSBAstudents?
A: No, the RTC was without jurisdiction over the

subject matter of the case filed by some PSBA
students, involving as it does a labor dispute over
which the labor agencies had exclusive jurisdiction.
That the regular courts have no jurisdiction over
labor disputes and to issue injunctions against
strikes is wellsettled. (PSBA v. Noriel, G.R. No.
80648,Aug.15,1988)
Q: Members of the union learned that a

redundancy program would be implemented by
thecompany.ThereuponitfiledaNoticeofstrike
on the grounds of ULP. A number of conciliation
meetings were conducted but to no avail so the
union staged a strike while the company
terminated 383 union members from service
pursuant to its redundancy program. Pursuant to
Art. 263(g) of the LC the SLE certified the labor
dispute for compulsory arbitration. Accordingly
the SLE enjoined the strike staged by the union
andallstrikingworkersweredirectedtoreturnto
work within 24 hours except for those who were
terminatedduetoredundancy.
Was the SLE correct in excepting from the return

towork order those who were terminated due to
redundancy?
A: No, Art. 263(g) is clear and unequivocal in

stating that all striking or lockout Ees shall
immediately return to work and the Er shall
immediately resume operations and readmit all
workers under the same terms and conditions
prevailing before the strike or lockout. Records of
the case would show that the strike occurred one
day before the members of the union were
dismissed due to alleged redundancy. Thus the
abovementioned article directs that the Er must
readmit all workers under the same terms and
conditions prevailing before the strike. (PLDT v.
Manggagawa ng Komunikasyon sa Pilipinas, G.R.
No.162783,July14,2005)
f.EffectofdefianceofAssumptionorCertification
Order
Q:What is the effect of defiance to the return to

workorder?
A:Itshallbeconsideredanillegalactcommittedin
the course of the strike or lockout and shall
authorize the SLE or the NLRC, as the case maybe,
to enforce the same under pain or loss of
employment status or entitlement to full
employment benefits from the lockingout Er or
backwages, damages and/or other positive and/or
affirmative reliefs, even to criminal prosecution
against the liable parties. (Sec. 6, Rule IX, of the
New Rules of Procedure of the NLRC; St.
Scholasticas College v. Torres, G.R. No. 100158,
June2,1992)
g.IllegalStrike
Q:Whenisastrikeillegal?
A:
1. Contrary to specific prohibition of law,
such as strike by employees (Ees)
performinggovernmentalfunctions;
2. Violatesaspecificreqtoflaw;
LABOR RELATIONS LAW

169
3. Declaredforanunlawfulpurpose,suchas
inducingtheemployer(Er)tocommitULP
againstnonunionEes;
4. Employsunlawfulmeansinthepursuitof
its objective, such as widespread
terrorismofnonstrikers;
5. Declared in violation of an existing
injunction;
6. Contrary to an existing agreement, such
as a no strike clause or conclusive
arbitrationclause
Q:Whatisgoodfaith(GF)strikedoctrine?
A:Astrikemaybeconsideredlegalwheretheunion
believed that the company committed ULP and the
circumstances warranted such belief in GF,
although subsequently such allegations of ULP are
found out as not true. (Bacus v. Ople, GR No. L
56856, Oct. 23, 1984, Peoples Industrial and
CommercialEes andOrganization(FFW)v.Peoples
Industrial and Commercial Corp., G.R. No.37687,
Mar.15,1982)
Q: What is the effect of the GF of strikers on the

legalityofstrike?
A:
GR:AstrikegroundedonULPisillegalifnosuch
actsactuallyexist.
XPN: Even if no ULP acts are committed by the

Er,iftheEesbelieveinGFthatULPactsexistso
as to constitute a valid ground to strike, then
the strike held pursuant to such belief may be
legal. Where the union believed that the Er
committed ULP and the circumstances
warranted suchbelief in GF, the resulting strike
may be considered legal although,
subsequently, such allegations of ULP were
found to be groundless. (NUWHRAINInterim
Juntav.NLRC,G.R.No.125561,Mar.6,1998)
(1)LiabilityofOfficersoftheUnionandOrdinary
Workers
Q: Should separation pay and backwages be

awardedtotheparticipantsofanillegalstrike?
A: No backwages will be awarded to union

members as a penalty for their participation in the
illegalstrike.Asfortheunionofficers,forknowingly
participating in an illegal strike, the law mandates
that a union officer may be terminated from
employmentandtheyarenotentitledtoanyrelief.
(GoldCityIntegratedPortServices,Inc.v.NLRC,G.R.
No.86000,Sep.21,1990)
Q: What is the rule on reinstatement of striking

workers?
A:Strikingemployeesareentitledtoreinstatement,
regardless of whether or not the strike was the
consequence of the employers ULP because while
out on strike, the strikers are not considered to
haveabandonedtheiremployment,butratherhave
only ceased from their labor; the declaration of a
strikeisnotarenunciationofemploymentrelation.
Q:Whoarenotentitledtoreinstatement?
A:
1. Union officers who knowingly participate
intheillegalstrike
2. Any striker or union who knowingly
participates in the commission of illegal
actsduringthestrike
Note:Thoseunionmemberswhohavejoinedanillegal
strike but have not committed any illegal act shall be
reinstatedbutwithoutbackwages.
Theresponsibilityfortheillegalactscommittedduring
the strike must be on an individual and not on a
collective basis. (First City Interlink TransportationCo.,
Inc.v.Confesor,G.R.No.106316,May5,1997)
Q: Are strikers entitled to their backwages or

strikedurationpay?
A:
GR:No,evenifsuchstrikewaslegal.
XPN:
1. Where the strikers voluntarily and
unconditionallyofferedtoreturntowork,
but the employer refused to accept the
offerworkersareentitledtobackwages
fromthedatetheirofferwasmade
2. Whenthereisareturntoworkorderand
the Ees are discriminated against other
Ees, workers are entitled to back wages
fromthedateofdiscrimination
3. IncaseofaULPstrike,inthediscretionof
theauthoritydecidingthecase
Q:Whatistheruleinstrikesinhospitals?
A:
1. It shall be the duty of the striking
employees or lockingout employer to
provideandmaintainaneffectiveskeletal
workforce of medical and health
personnelforthedurationofthestrikeor
lockout.
2. SLE may immediately assume jurisdiction
within 24 hours from knowledge of the


LABORLAWTEAM:
170
occurrence of such strike or lockout
certify it to the NLRC for compulsory
arbitration.
Q:Moreorless1400Eesofthecompanystageda
mass walkout,allegedly without anybody leading
them as it was a simultaneous, immediate and
unanimous group action and decision, to protest
thenonpaymentoftheirsalariesandwages.The
MinisterofLaborandEmploymentwhofoundthe
strike to be illegal granted the clearance to
terminate the employment of those who were
instigatorsintheillegalstrike.Wasthedecisionof
the Minister of Employment in granting the
clearancecorrect?
A: No, a mere finding of the illegality of a strike

should not be automatically followed by wholesale
dismissal of the strikers from their employment.
While it is true that administrative agencies
exercisingquasijudicialfunctionsarefreefromthe
rigiditiesofprocedure,itisequallywellsettledthat
avoidance of technicalities of law or procedure in
ascertaining objectively the facts in each case
should not, however, cause denial of due process.
(Bacusv.Ople,G.R.No.L56856,Oct.23,1984)
Q: 2 days after the union struck, the SLE ordered

the striking workers to return to work within 24
hours. But the striking union failed to return to
work and instead they continued their pickets. As
a result, violence erupted in the picket lines. The
service bus ferrying nonstriking workers was
stonedcausinginjuriestoitspassengers.Threats,
defamation,illegaldetention,andphysicalinjuries
also occurred. The company was directed to
accept back all striking workers, except the union
officers, shop stewards, and those with pending
criminal charges. Was the SLE correct in not
including the union officers, shop stewards and
thosewithpendingcriminalchargesinthereturn
toworkorder?
A:No,toexcludeunionofficers,shopstewardsand
thosewithpendingcriminalchargesinthedirective
tothecompanytoacceptbackthestrikingworkers
without first determining whether they knowingly
committed illegal acts would be tantamount to
dismissal without due process of law. (Telefunken
Semiconductors Ees UnionFFW v. SLE, G.R. No.
122743&127215,Dec.12,1997)
(2)WaiverofIllegalityofStrike
Q: When is there a waiver of the illegality of a

strikebytheemployer?
A: When an employer accedes to the peaceful

settlement brokered by the NLRC by agreeing to
accept all employees who had not yet returned to
work, it waives the issue of the illegality of the
strike. (Reformist Union v. NLRC, G.R. No.
120482,Jan.27,1997)
j.Injunctions
Q:Whatisaninjunction?
A: It is an order or a writ that commands a person
to do or not to do a particular act. It may be a
positive (mandatory) or a negative (prohibitory)
command.
(1)RequisitesforLaborInjunctions
Q: May thecourt or quasijudicial entity issueany
injunctionduringstrikes/lockouts?
A:GR:Nocourtorentityshallenjoinanypicketing,
strikeorlockout,oranylabordispute.
XPN:
1. When prohibited or unlawful acts are
being or about to be committed that will
causegrave or irreparable damage to the
complainingparty.(Art.218[e])
2. Onthegroundofnationalinterest
3. The SLE or the NLRC may seek the
assistanceoflawenforcementagenciesto
ensure compliance with this provision as
well as with such orders as he may issue
toenforcethesame(Art.263[g])
(2)InnocentBystanderRule
Q: What must an innocent bystander satisfy

beforeacourtmayenjoinalaborstrike?
A:Theinnocentbystandermustshow:
1. Compliance with the grounds specified in

Rule58oftheRulesofCourt,and
2. That it is entirely different from, without
any connection whatsoever to, either
party to the dispute and, therefore, its
interestsaretotallyforeigntothecontext
thereof. (MSF Tire & Rubber v. CA, G.R.
128632,Aug.5,1999)
Q:MaytheRTCtakecognizanceofthecomplaint
where the same is but an incident of a labor
dispute?
A: No, where the subject matter of the 3

rd
party
claim is but an incident of the labor case, it is a
matter beyond the jurisdiction of the RTC, such
LABOR RELATIONS LAW

171
courts have no jurisdiction to act on labor cases or
various incidents arising therefrom, including the
executionofdecisions,awardsororders.
A party, by filing its 3

rd
party claim with the deputy
sheriff, it submitted itself to the jurisdiction of the
NLRCactingthroughtheLA.
The broad powers granted to the LA and to the

NLRCbyArt.217,218and224oftheLCcanonlybe
interpreted as vesting in them jurisdiction over
incidents arising from, in connection with or
relatingtolabordisputes,asthecontroversyunder
consideration, to the exclusion of the regular
courts.TheRTC,beingacoequalbodyoftheNLRC,
has no jurisdiction to issue any restraining order or
injunctiontoenjointheexecutionofanydecisionof
the latter. (Deltaventures v. Cabato, G.R. No.
118216,Mar.9,2000)
Q:TheemployerfiledwiththeRTCacomplaintfor
damages with preliminary mandatory injunction
againsttheunion,themainpurposeofwhichisto
dispense the picketing of the members of the
union. The union filed a motion to dismiss on the
ground of lack of jurisdiction. The RTC denied the
motion to dismiss and enjoined the picketing, it
said that mere allegations of ErEe relationship
does not automatically deprive the court of its
jurisdiction and even the subsequent filing of
charges of ULP, as an afterthought, does not
deprive it of its jurisdiction. Was the issuance by
theRTCoftheinjunctionproper?
A:No,theconcertedactiontakenbythemembers
of the union in picketing the premises of the
departmentstore,nomatterhowillegal,cannotbe
regarded as acts not arising from a labor dispute
over which the RTCs may exercise jurisdiction.
(Samahang Manggagawa ng Liberty Commercial v.
Pimentel,G.R.No.L78621,Dec.2,1987)

LABORLAWTEAM:
172
H.PROCEDUREANDJURISDICTION
1.LABORARBITER
a.Jurisdiction
Q:Whatisthedistinctionbetweenthejurisdiction
of the labor arbiter (LA) and the National Labor
RelationsCommission(NLRC)?
A:
1. The NLRC has exclusive appellate
jurisdictiononallcasesdecidedbytheLA.
2. The NLRC does not have original
jurisdiction on the cases over which the
LAhaveoriginalandexclusivejurisdiction.
3. The NLRC cannot have appellate
jurisdiction if a claim does not fall within
the exclusive original jurisdiction of the
LA.
Q: What is the nature of jurisdiction of labor

arbiters(LAs)?
A:Itisoriginalandexclusive.LAshavenoappellate
jurisdiction.
Q:Whatarethecasesfallingunderthejurisdiction
oflaborarbiters(LAs)?
A: Exclusive and original jurisdiction to hear and
decidethefollowingcasesinvolvingallworkers:
1. ULPcases
2. Terminationdisputes
3. If accompanied with a claim for
reinstatement, those that workers file
involving wages, rates of pay, hours of
work and other terms and conditions of
employment
4. Claims for actual, moral, exemplary and
other forms of damages arising from Er
Eerelations
5. Cases arising from any violation of Art.
264, including questions involving the
legalityofstrikesandlockouts;
6. Except claims for Employment
Compensation, Social Security, Philhealth
and maternity benefits, all other claims
arising from ErEe relations, including
those of persons in domestic or
household service, involving an amount
exceeding P5000 regardless of whether
accompanied with a claim for
reinstatement
7. Monetary claims of overseas contract
workersarisingfromErEerelationsunder
the Migrant Workers Act of 1995 as
amendedbyRA10022
8. Wage distortion disputes in unorganized
establishments not voluntarily settled by
thepartiespursuanttoRA6727
9. Enforcement of compromise agreements
when there is noncompliance by any of
the parties pursuant to Art. 227 of the
LaborCode(LC),asamended;and
10. Othercasesasmaybeprovidedbylaw
Note: Although the provision speaks of exclusive and

original jurisdiction of LAs, the cases enumerated may
instead be submitted to a voluntary arbitrator by
agreementofthepartiesunderArt.262oftheLC.The
lawprefersvoluntaryovercompulsoryarbitration.
Q:Whatisthenatureofthecaseswhichthelabor
arbiter(LA)mayresolve?
A: The cases that an LA can hear and decide are

employment related. Where no ErEe relationship
exists between the parties and no issue is involved
which may be resolved by reference to the LC,
other labor statutes, or any collective bargaining
agreement, it is the RTC that has jurisdiction.
(Lapanday Agricultural Devt. Corp v. CA, G.R. No.
112139,Jan.31,2000)
The LA has jurisdiction over controversies involving
Ers and Ees only if there is a reasonable causal
connectionbetweentheclaimassertedandtheEr
Ee relations. Absent such link, the complaint is
cognizable by the regular court. (Eviota v. CA, G.R.
No.152121,July29,2003)
Q: Do labor arbiters exercise concurrent
jurisdictionwiththeNLRC?
A:Yes,withrespecttocontemptcases.
Q: What are the cases referred to grievance
machineryandvoluntaryarbitration?
A:Disputesarisingfromthe:
1. Interpretation or implementation of the

CBA
2. Interpretation or enforcement of
companypersonnelpolicies
Q: What is the extent of the jurisdiction of the

labor arbiter (LA) if there are unresolved matters
arisingfromtheinterpretationoftheCBA?
A:
GR: LAs have no jurisdiction over unresolved or
unsettled grievances arising from the
interpretation or implementation of the CBA
and those arising from the interpretation or
enforcementofcompanypersonnelpolicies.
PROCEDURE AND JURISDICTION

173
XPN:Actualterminationdisputes
Note: Where the dispute is just in the interpretation,

implementation or enforcement stage of the
termination, it may be referred to the grievance
machinery set up by the CBA or by voluntary
arbitration. Where there was already actual
termination, i.e., violation of rights, it is already
cognizable by the LA. (Maneja v. NLRC, G.R. No.
124013,June5,1998)
Q: Does the use of the word may in the

provisions of the Grievance Procedure allow the
alternativeofsubmittingthecasebeforethelabor
arbiter(LA)?
A: Yes. The use of the word may shows the

intention of the parties to reserve the right to
submit the illegal termination dispute to the
jurisdiction of the LA, rather than to a voluntary
arbitrator. Petitioner validly exercised his option to
submithiscasetoaLAwhenhefiledhiscomplaint
before the proper government agency. In other
words, the CA is correct in holding that voluntary
abitration is mandatory in character if there is a
specific agreement between the parties to that
effect.Itmustbestressedhoweverthat,inthecase
at bar, the use of the word may shows the
intention of the parties to reserve the right of
recourse to LAs. (Vivero v. CA, G.R. No. 138938,
Oct.24,2000)
Q:Whatarethecaseswhichdonotfallunderthe
jurisdictionofthelaborarbiters(LA)?
A:LAshavenojurisdictionovertheff:
1. Foreign governments (JUSMAGPhils. v.
NLRC,G.R.No.108813,Dec.15,1994)
2. Intl agencies (Lasco v. NLRC, G.R. Nos.
109095109107,Feb.23,1995)
3. Intracorporate disputes which fall under
P.D. 902A and now falls under the
jurisdictionoftheregularcourtspursuant
to the new Securities Regulation Code
(Nacpil v. IBC, G.R. No. 144767, Mar. 21,
2002)
4. Executing money claims against
government (Dept of Agriculture v. NLRC,
G.R.No.104269,Nov.11,1993)
5. Cases involving GOCCs with original
charters which are governed by civil
servicelaw,rulesorregulations(Art.IXB,
Sec.2,No.1,1987Constitution)
6. Local water district (Tanjay Water District
v. Gabaton, April 17, 1989) except where
NLRC jurisdiction is invoked (Zamboanga
City Water District v. Buat, G.R. No.
104389,May27,1994)
7. The aggregate money claim does not
exceed P5000 and without claim for
reinstatement(RajahHumabonHotel,Inc.
v. Trajano, G.R. Nos. 10022223, Sep.14,
1993)
8. Claim of employee (Ee) for cash prize
under the Innovation Program of the
company, although arising from ErEe
relationship, is one requiring application
of general civil law on contracts which is
within the jurisdiction of the regular
courts(SMCv.NLRC,G.R.No.80774,May
31,1988)
9. Cause of action based on quasidelict or
tort which has no reasonable connection
with any of the claims enumerated in
Art.217 of the LC (Ocheda v. CA, G.R. No.
85517,Oct.16,1992)
10. Complaint arising from violation of
training agreement (Singapore Airlines v.
Pano,G.R.No.L47739,June22,1983)
Q: FASAP, the sole and exclusive bargaining
representative of the flight attendants, flight
stewards and pursers of PAL, and respondent PAL
entered into a CBA incorporating the terms and
conditions of their agreement for the years 01
05. Sec. 144, Part A of the CBA provides that
compulsoryretirementshallbe55forfemalesand
60 for males. They filed an action with the RTC
claiming that the CBA provision is discriminatory
andhenceunconstitutional.TheRTCissuedaTRO.
The appellate court ruled that the RTC has no
jurisdictionoverthecaseatbar.WhetherRTChas
jurisdictionoverthepetitioners'actionchallenging
the legality of the provisions on the compulsory
retirementagecontainedintheCBA?
A: Yes. The subject of litigation is incapable of

pecuniary estimation, exclusively cognizable by the
RTC, pursuant to Sec. 19 (1) of BP Blg. 129, as
amended.Beinganordinarycivilaction,thesameis
beyondthejurisdictionoflabortribunals.
Not every controversy or money claim by an

employee (Ee) against the employer (Er) or vice
versa is within the exclusive jurisdiction of the LA.
Actions between Ees and Er where the ErEe
relationship is merely incidental and the cause of
action precedes from a different source of
obligation is within the exclusive jurisdiction of the
regular court. Here, the ErEe relationship between
the parties is merely incidental and the cause of
action ultimately arose from different sources of
obligation, i.e., the Constitution and CEDAW.
(Halaguena vs. PAL Incorporated, G.R. No. 172013,
Oct.2,2009)


LABORLAWTEAM:
174
Q: Who has the exclusive appellate jurisdiction

overallcasesdecidedbyLaborArbiters?
A:TheNLRC.
Q:Whatistheeffectofperfectionofanappealon
execution?
A: The perfection of an appeal shall stay the

execution of the decision of the Labor Arbiter on
appeal,exceptexecutionforreinstatementpending
appeal.
Note:TheprovisionofArt.223isclearthatanaward
by the LA for reinstatement shall be immediately
executor even pending appeal and the posting of a
bond by the employer shall not stay the executionfor
reinstatement.(PioneerTexturizingCorp.v.NLRC,G.R.
No.118651,Oct.16,1997)
b.Effectofselfexecutingorderofreinstatementon
backwages
Q: May dismissed employees (Ees) collect their

wages during the period between the Labor
Arbiters (LAs) order of reinstatement pending
appeal and the NLRC decision overturning that of
theLA?
A: Yes. Par. 3 of Art. 223 of the Labor Code
provides that the decision of the LA reinstating a
dismissed or separated Ee, insofar as the
reinstatement aspect is concerned, shall
immediatelybeexcutory,pendingappeal.
theemployer(Er)toreinstateandpaythewagesof
the dismissed Ee during the period of appeal until
reversal by thehigher court. On the other hand, if
during the period. (Pfizer v. Velasco, G.R. No.
177467,March9,2011)
Unless there is a restraining order, it is ministerial
upon the LA to implement the order of
reinstatement and it is mandatory on the Er to
complytherewith.(Garciav.PAL,G.R.No.164856,
Jan.20,2009)
c.RequirementstoperfectappealtoNLRC
Q:HowisanappealfromLAtoNLRCperfected?
A:
1. Theappealisperfected:
a. Filed within the reglementary period
providedinSec.1ofthisRules
b. Verified by the appellant himself in
accordancewithSec.4,Rule7ofthe
RulesofCourt,asamended
c. In the form of a memorandum of
appealwhichshallstatethegrounds
relied upon and the arguments in
support thereof, the relief prayed
for,andwithastatementofthedate
the appellant received the appealed
decision,resolutionororder
d. In 3 legibly typewritten or printed
copies
e. Accompaniedby(i)proofofpayment
of the required appeal fee; (ii)
posting of a cash or surety bond as
provided in Sec. 6 of this Rule; (iii) a
certificate of nonforum shopping;
and (iv) proof of service upon the
otherparties.
2. Mere notice of appeal without complying

withtheotherrequisitesaforestatedshall
not stop the running of the period for
perfectinganappeal.
Q: Is the posting of an appeal bond required for

theperfectionofanappealfromaLaborArbiters
(LAs)decisioninvolvingmonetaryaward?
A:Yes.IncasethedecisionoftheLAortheRegional
Director involves a monetary award, an appeal by
the employer may be perfected only upon the
posting of a bond. (Sec.6, Rule VI, NLRC 2005 Rules
ofProcedure)
Q:Whataretheformsoftheappealbond?
A: It shall either be in the form of cash deposit or

surety bond equivalent in amount to the monetary
award, exclusive of damages and attorney's fees.
(Sec.6,RuleVI,NLRC2005RulesofProcedure)
Q:Whomayissueasuretybond?
A: It shall be issued by a reputable bonding

companydulyaccreditedbytheCommissionorthe
SC,andshallbeaccompaniedbyoriginalorcertified
truecopiesof:
1. A joint declaration under oath by the Er,

his counsel, and the bonding company,
attestingthatthebondpostedisgenuine,
andshallbeineffectuntilfinaldisposition
ofthecase.

175
2. AnindemnityagreementbetweentheEr
appellantandbondingcompany;
3. Proof of security deposit or collateral
securingthebond:provided,thatacheck
shall not be considered as an acceptable
security;
4. A certificate of authority from the
InsuranceCommission;
5. CertificateofregistrationfromtheSEC;
6. Certificate of authority to transact surety
businessfromtheOfficeofthePresident;
7. Certificate of accreditation and authority
fromtheSC;and
8. A notarized board resolution or
secretary's certificate from the bonding
company showing its authorized
signatoriesandtheirspecimensignatures.
(Sec. 6, Rule VI, NLRC 2005 Rules of
Procedure)
Note: The appellant shall furnish the appellee with a

certifiedtruecopyofthesaidsuretybondwithallthe
abovementionedsupportingdocuments.
Q: What is the period within which a cash or

suretybondshallbevalidandeffective?
A: From the date of deposit or posting, until the

case is finally decided, resolved or terminated, or
theawardsatisfied.Thisconditionshallbedeemed
incorporated in the terms and conditions of the
suretybond,andshallbebindingontheappellants
and the bonding company. (Sec. 6, Rule VI, NLRC
2005RulesofProcedure)
Q: What is theeffect if thebondis verifiedby the

NLRCtobeirregularornotgenuine?
A: The Commission shall cause the immediate

dismissal of the appeal, and censure or cite in
contempt the responsible parties and their
counsels, or subject them to reasonable fine or
penalty. (Sec.6, Rule VI, NLRC 2005 Rules of
Procedure)
Note: The appellee shall verify the regularity and

genuineness of the bond and immediately report any
irregularitytotheNLRC.
Q:Maythebondbereduced?
A:
GR:No.
XPN: On meritorious grounds, and only upon the

posting of a bond in a reasonable amount in
relationtothemonetaryaward.
Note: The mere filing of a motion to reduce bond

withoutcomplyingwiththerequisitesinthepreceding
paragraphs shallnot stoptherunningof theperiodto
perfect an appeal (Sec. 6, Rule VI, NLRC 2005 Rules of
Procedure).
Q: Company "A", within the reglementary
period, appealed the decision of a Labor Arbiter
directing the reinstatement of an Ee and
awarding backwages. However, A's cash bond
wasfiledbeyondthe ten day period. Shouldthe
NLRCentertaintheappeal?Why?
A:No,theNLRCshouldnotentertaintheappeal,as
the same was not perfected for failure to file a
bond. In ABA vs. NLRC, G.R. No.122627, July 18,
1999, the SC ruled: "An appeal bond is
necessary...the appeal may be perfected only
upon the posting of cash or surety bond issued
by a reputable bonding company duly accredited
bytheCommissionintheamountequivalenttothe
monetary award in the judgment appealed from."
(2001BarQuestion)
Q: Is a motion for reconsideration (MR) of the
NLRC decision required before certiorari may be
availedof?
A: Yes. A MR is required to enable NLRC to correct
its mistakes. If no MR is filed, NLRCs decision
becomesfinalandexecutory.
Q:WhatistheremedyincaseofdenialoftheMR?
A:Ifthemotionisdenied,theaggrievedpartymay
file a petition for certiorari not later than 60 days
fromnoticeofthejudgment,orderorresolution.In
case a motion for reconsideration or new trial is
timely filed, whether such motion is required or
not,the60dayperiodshallbecountedfromnotice
of the denial of said motion. No extension of time
to file the petition shall be granted except for
compelling reason and in no case exceeding 15
days.(Sec.4,Rule65,RulesofCourt.)
Q:Whatistheeffectifnoserviceofsummonswas
made?
A: In the absence of service of summons or a valid
waiver thereof, the hearings and judgment
renderedbythelaborarbiterisnullandvoid.
Q:Whatiscompulsoryarbitration?
A: Theprocessofsettlementoflabordisputesbya
government agency which has the authority to
investigate and make an award binding on all the
parties.


LABORLAWTEAM:
176
Q: Can the Labor Arbiter (LA) conduct compulsory
arbitration?
A: Yes. Under the Labor Code, it is the LA who is
clothed with the authority to conduct compulsory
arbitration on cases involving termination disputes
[Art.217,P.D.442,asamended].(PALv.NLRC, G.R.
No.55159,Dec.22,1989)
Q:Whataretherulesonvenueoffilingcases?
A:
1. All cases which the Labor Arbiters (LAs)
have authority to decide may be filed in
the Regional Arbitration Branch (RAB)
having jurisdiction over the workplace of
thecomplainant/petitioner.
Note: Workplace is understood to be the

place or localitywhere the employee (Ee) is
regularly assigned when the cause of action
arose.ItshallincludetheplacewheretheEe
issupposedtoreportbackafteratemporary
detail,assignmentortravel.
In case of field Ees, as well as ambulant or
itinerant workers, their workplace is where
theyare
a.Regularlyassigned
b. Supposed to regularly receive their
salariesandwages
c.Receivetheirworkinstructionsfrom
d. Reporting the results of their
assignmenttotheiremployers(Er)
2. Where 2 or more RABs have jurisdiction

over the workplace, the first to acquire
jurisdictionshallexcludeothers.
3. Improper venue when not objected to

before filing of position papers shall be
deemedwaived.
4. Venue may be changed by written
agreement of the parties or when the
NLRCortheLAsoorders,uponmotionby
theproperpartyinmeritoriouscases.
5. ForOverseasContractWorkerswherethe
complainant resides or where the
principal office of the respondent Er is
located,attheoptionofthecomplainant.
Note: The Rules of Procedure on Venue is

merely permissive, allowing a different
venue when the interest of substantial
justice demands a different one. (Dayag v.
Canizares,GR.No.124193,Mar.6,1998)
2.NATIONALLABORRELATIONSCOMMISSION
(NLRC)
Q:WhatistheNLRC?
A: It is an administrative body with quasijudicial
functionsandtheprincipalgovernmentagencythat
hearsanddecideslabormanagementdisputes;itis
attachedtotheDOLEsolelyforprogramandpolicy
coordinationonly.
Q: How are the powers and functions of the NLRC
allocated?
A:
1. EnBanc
a. Promulgating rules and regulations
and governing the hearings and
disposition of cases before any of its
divisionsandregionalbranches.
b. Formulating policies affecting its
administrationandoperations.
c. On temporary or emergency basis, to
allow cases within the jurisdiction of
anydivisiontobeheardanddecided
by any other division whose docket
allows the additional workload and
such transfer will not expose litigants
tounnecessaryadditionalexpense.
2. Division(8Divisionswith3members)
a. Adjudicatory;
b. All other powers, functions and
duties;
c. Exclusive appellate jurisdiction over
cases within their respective
territorialjurisdiction.
Q: Does an individual Commissioner have

adjudicatorypower?
A: No. The law lodges the adjudicatory power on

each of the eight divisions, not on the individual
commissioners nor on the whole commission. The
division is a legal entity, not the person who sits
in it. Hence, an individual commissioner has no
adjudicatory power, although of course, he can
concurordissentindecidingacase.
a.Jurisdictions
Q: What are the two kinds of jurisdiction of the

NLRC?
A:
1. ExclusiveOriginalJurisdiction
a. Certified labor disputes causing or
likely to cause a strike or lockout in
anindustryindispensabletonational

177
interest, certified to it by the
Secretary of Labor or the President
forcompulsoryarbitration
b. Injunction in ordinary labor disputes
to enjoin or restrain any actual or
threatened commission of any or all
prohibited or unlawful acts or to
require the performance of a
particular act in any labor dispute
which,ifnotrestrainedorperformed
forthwith, may cause grave or
irreparabledamagetoanyparty
c. Injunction in strikes or lockouts
underArt.264oftheLaborCode(LC)
d. Contemptcases
2. ExclusiveAppellateJurisdiction
a. All cases decided by the Labor
Arbiters under Art. 217(b) of the LC
and Sec. 10 of R.A.8042 (Migrant
WorkersAct);and
b. Cases decided by the Regional
Offices of DOLE in the exercise of its
adjudicatory function under Art.129
of the LC over monetary claims of
workersamountingtonotmorethan
P5000andnotaccompaniedbyclaim
forreinstatement.
Q:WhatisthecompositionoftheNLRC?
A:
1. Chairman
2. 23Members
a. 8memberseach,shallbechosenonly
from among the nominees of the
workers and employers (Er)
organizationrespectively.
b. The Chairman and the 7 remaining
members shall come from the public
sector, with the latter to be chosen
preferably from among the
incumbentLaborArbiters.
c. Upon assumption into office, the
members nominated by the workers
and Ers organization shall divest
themselves of any affiliation with or
interest in the federation or
associationtowhichtheybelong.
Note: There is no need for the Commission on

Appointments to confirm the positions in the NLRC.
Suchrequirementhasnoconstitutionalbasis.(Calderon
v.Carale,GR.No.91636,April23,1992)
Q:HowdoestheNLRCadjudicatecases?
A:
1. The NLRC adjudicates cases by division. A
concurrence of 2 votes is needed for a
validjudgment.
Note:Whenevertherequiredmembershipin
a division is not complete and the
concurrence of the Commissioners to arrive
at judgment or resolution cannot be
obtained, the Chairman shall designate such
number of additional Commissioners from
theotherdivisionsasmaybenecessary.
2. It shall be mandatory for the division to

meetforpurposesofconsultation.
Note: The conclusion of a division on any

case submitted to it for decision should be
reached in consultation before the case is
assigned to a member for the writing of the
opinion.
3. Acertificationthataconsultationhasbeen
conducted, signed by the presiding
commissioner of the division, shall be
issued(copyattachedtotherecordofcase
andservedupontheparties).
Q:WhatarethequalificationsoftheChairmanand
theCommissioners?
A:
1. MemberofthePhilippineBar
2. Engaged in the practice of law in the
Philippinesforatleast15years
3. At least 5 years experience or exposure in
handlinglabormanagementrelations
4. Preferably a resident of the region where
heistoholdoffice
Q: What are the qualifications of an Executive

LaborArbiter?
A:
1. MemberofthePhilippineBar
2. Engaged in the practice of law in the
Philippinesforatleast10years
3. At least 5 years experience or exposure in
handlinglabormanagementrelations
Q: What is the term of office of the Chairman,

CommissionersandLaborArbiters(LAs)?
A: They shall hold office during good behavior until

they reach the age of 65 unless removed for causes
as provided by law or become incapacitated to
dischargethefunctionofhisoffice.
Provided, however, that the President of the

Philippines may extend the services of the
Commissioners and LAs up to the maximum age of
70 years upon the recommendation of the


LABORLAWTEAM:
178
Commissionenbanc.
Q: Some disgruntled members of Bantay

Labor Union filed with the Regional Office of the
DOLE a written complaint against their union
officers for mismanagement of union funds. The
Regional Director (RD) did not rule in the
complainants' favor. Not satisfied, the
complainants elevated the RDs decision to the
NLRC. The union officers moved to dismiss on the
groundoflackofjurisdiction.Aretheunionofficers
correct?Why?
A:Yes,theunionofficersarecorrectinclaimingthat
the NLRC has no jurisdiction over the appealed
ruling of the RD. in Barles v. Bitonio, G.R. No.
120220,June16,1999,theSCruled:
Appellate authority over decisions of the RD
involvingexaminationofunionaccountsisexpressly
conferred on the Bureau of Labor Relations (BLR)
under the Rule of Procedure on Mediation
Arbitration.
Sec. 4. Jurisdiction of the BLR (b) The BLR shall
exercise appellate jurisdiction over all cases
originating from the RD involving complaints for
examinationofunionbooksofaccounts.
The language of the law is categorical. Any
additional explanation on the matter is
superfluous."(2001BarQuestion)
Q:Company"A"andUnion"B"couldnotresolve
their negotiations for a new CBA. After
conciliation proceedings bef ore t he NCMB
proved futile, B went on strike. Violence during
the strike prompted A to file charges against
strikermembers of B for their illegal acts. The
SLE assumed jurisdiction, referred the strike to
the NLRC and issued a returntowork order.
The NLRC directedthe parties to submit their
respective position papers and documentary
evidence. At the initial hearing before the NLRC,
the parties agreed to submit the case for
resolution after the submission of the position
papersandevidence.
Subsequently, the NLRC issued an arbitral award

resolving the disputed provisions of the CBA and
ordered the dismissal of certain strikers for
having knowingly committed illegal acts during
the strike. The dismissed employees elevated
their dismissal to the CA claiming that they
were deprived of their right to due process and
that the affidavits submitted by A were self
serving and of no probative value. Should the
appeal prosper? State the reason(s) for your
answerclearly.
A:Theappealshouldnotprosper.TheSC,inmany
cases, has ruled that decisions made by the NLRC
maybebasedonpositionpapers.Inthequestion,it
isstatedthatthepartiesagreedtosubmitthecase
for resolution after the submission of position
papers and evidence. Given this fact, the striker
membersofBcannotnowcomplainthattheywere
denied due process. They are in estoppel. After
voluntarily submitting a case and encountering an
adversedecisiononthemerits,itistoolateforthe
loser to question the jurisdiction or power of the
court. A party cannot adopt a posture of double
dealing. (Marquez vs. Secretary of Labor, G.R. No.
80685,March16,1989).(2001BarQuestion)
Q: Is barangay conciliation available in labor

cases?
A: No. Labor cases are not subject to barangay

Conciliation since ordinary rules of procedure are
merely suppletory in character visvis labor
disputes which are primarily governed by labor
laws. (Montoya v. Escayo, G.R. No. 8221112, Mar.
21,1989)
Q:WhatarethepowersoftheNLRC?
A:
1. Rule making power promulgation of
rulesandregulations:
a. Governing disposition of cases
before any of its division/regional
offices.
b. Pertainingtoitsinternalfunctions
c. Asmaybenecessarytocarryoutthe
purposesoftheLaborCode.
2. Power to issue compulsory processes
(administer oaths, summon parties, issue
subpoenas)
3. Power to investigate matters and hear
disputes within its jurisdiction
(adjudicatory power original and
appellatejurisdictionovercases)
4. Contemptpower
5. OcularInspection
6. Powertoissueinjunctionsandrestraining
orders
b.EffectofNLRCreversalofLaborArbitersorderof
reinstatement
Q: May dismissed employees (Ees) collect their

wages during the period between the Labor
Arbiters (LAs) order of reinstatement pending
appeal and the NLRC decision overturning that of
theLA?

179
A: Yes. Par. 3 of Art. 223 of the Labor Code
provides that the decision of the LA reinstating a
dismissed or separated Ee, insofar as the
reinstatement aspect is concerned, shall
immediatelybeexcutory,pendingappeal.
theemployer(Er)toreinstateandpaythewagesof
the dismissed Ee during the period of appeal until
reversal by the higher court. On the other hand, if
during the period. (Pfizer v. Velasco, G.R. No.
177467,March9,2011)
c.RequirementstoperfectappealtoCourtof
Appeals
Q: Is judicial review of the NLRCs decision
available?
A: Yes, through petitions for certiorari (Rule 65)
which should be initially filed with the CA in strict
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief
desired.TheCAisprocedurallyequippedtoresolve
unclear or ambiguous factual finding, aside from
the increased number of its component divisions.
(St.MartinFuneralHomev.NLRC,G.R.No.130866,
Sep.16,1998)
Q: Within what period should the petition for

certioraribefiledwiththeCourtofAppeals?
A: Under Section 4, Rule 65 (as amended by A.M.

No.00203SC)of the Rules ofCivil Procedure, the
petition must be filed within sixty (60) days from
notice of the judgment or from notice of the
resolution denying the petitioners motion for
reconsideration. This amendment is effective
September1,2000,butbeingcurativemaybegiven
retroactiveapplication.(Narzolesv.NLRC,G.R.No.
141959,Sep.29,2000)
The period within which a petition for certiorari

against a decision of the NLRC may be filed should
be computed from the date counsel of record of
the party receives a copy of the decision or
resolution,andnotfromthedatethepartyhimself
receives a copy thereof. Article 224 of the Labor
Code, which requires that copies of final decisions,
orders or awards be furnished not only the partys
counselofrecordbutalsothepartyhimselfapplies
to the execution thereof and not to the filing of an
appeal or petition for certiorari. (Ginete v. Sunrise
ManningAgency,G.R.No.142023,June21,2001)
Q: What is an injunction or a temporary

restrainingorder(TRO)?
A: Orders which may require, forbid, or stop the

doingofanact.ThepoweroftheNLRCtoenjoinor
restrain the commission of any or all prohibited or
unlawfulactsunderArt.218ofLaborCodecanonly
beexercisedinalabordisputes.
Note: A restraining order is generally regarded as an

order to maintain the subject of controversy in status
quountilthehearingofanapplicationforatemporary
injunction. (BF Homes v. Reyes, G.R. No. L30690
November19,1982)
Q:WhomayissueaTRO?
A:
1. President(Art.263[g])
2. SecretaryofLabor(Art.263[g])
3. NLRC(Art.218)
Note: Art. 218 of the Labor Code limits the grant of

injunctive power to the NLRC. The LA is excluded
statutorily. Hence, no NLRC Rules can grant him that
power.
Q: What is the procedure for the issuance of

restrainingorder/injunction?
A:
1. Filingofaverifiedpetition
2. Hearingafterdueandpersonalnoticehas
been served in such manner as the
Commissionshalldirectto:
a. All known persons against whom
reliefissought
b. Also the Chief Executive or other
public officials of the province or
city within which the unlawful acts
have been threatened or
commercial charged with the duty
to protect the complainants
property.
3. Reception at the hearing of the
testimonies of the witnesses with
opportunity for crossexamination, in
support of the allegations of the
complaint made under oath as well as
testimonyinoppositionthereto.
4. Finding of fact of the Commission to the
effectthat:
a. Prohibited or unlawful acts have
been threatened and will be
committed,orhavebeenandwillbe
continued unless restrained, but no


LABORLAWTEAM:
180
injunction or TRO shall be issued on
account of any threat, prohibited or
unlawful act, except against the
persons, association or organization
makingthethreatorcommittingthe
prohibitedorunlawfulactoractually
authorizing or ratifying the same
afteractualknowledgethereof.
b. The substantial and irreparable
injurytothecomplainantsproperty.
Note: Irreparable Injury an injury
which cannot be adequately
compensated in damages due to the
natureoftheinjuryitselforthenature
of the right or property injured or
when there exist no pecuniary
standard for the measurement of
damages.
c. That as to each item of relief to be
granted, greater injury will be
inflicted upon the complainant by
the denial of the relief than will be
inflicted upon the defendants by the
grantingoftherelief.
d. That complainant has no adequate
remedyatlaw
Note: Adequate remedy one that
affords relief with reference to the
matter in controversy and which is
appropriate to the particular
circumstances of the case if the
remedy is specifically provided by law.
(PALv.NLRC,GR.No.120567,Mar.20,
1998)
e. Thatpublicofficerschargedwiththe
duty to protect complainants
property are unable or unwilling to
furnishadequateprotection.
5. Postingofabond.
3.BUREAUOFLABORRELATIONS(BLR)MED
ARBITERS
a.Jurisdiction
Q: What is covered by the BLRs jurisdiction and

functions?
A: The BLR no longer handles all labor

management disputes; rather its functions and
jurisdictionarelargelyconfinedto:
1. Unionmatters
2. Collectivebargainingregistryand
3. Laboreducation.
Note:Jurisdictionoverlabormanagementproblemsor
disputesisalsoexercisedbyotheroffices:
1. DOLERegionalOffices
2. OfficeoftheSecretaryofLabor
3. NLRC
4. POEA
5. OWWA
6. SSSECC
7. RTWPB
8. NWPC
9. Regular courts over intracorporate
disputes.
Q:Whoisamediatorarbiter?
A: An officer in the Regional Office or Bureau

authorized to hear, conciliate and decide
representation cases or assist in the disposition of
intraorinteruniondisputes.
Q: What kinds of cases fall within BLRs

jurisdiction?
A: The BLR has original and exclusive jurisdiction

over:
1. Interuniondisputes
2. Intrauniondisputes
3. Otherrelatedlaborrelationsdisputes
Q: What is the coverage of inter/intraunion

disputes?
A:Theyshallinclude:
1. Conduct or nullification of election of

unionandworkersassociationofficers
2. Audit/accounts examination of union or
workersassociationfunds
3. Deregistration of collective bargaining
agreements(CBAs)
4. Validity/invalidity of union affiliation or
disaffiliation
5. Validity/invalidity of acceptance/ non
acceptanceforunionmembership
6. Validity/invalidityofvoluntaryrecognition
7. Opposition to application for union or
CBAregistration
8. Violations of or disagreements over any
provision of the constitution and bylaws
ofunionorworkersassociation
9. Disagreements over chartering or
registration of labor organizations or the
registrationofCBAs;
10. Violations of the rights and conditions of
membership in a union or workers
association;
11. Violationsoftherightsoflegitimatelabor
organizations (LLO), except interpretation
ofCBAs;
12. Validity/invalidity of impeachment/
expulsion/suspension or any disciplinary
action meted against any officer and
member, including those arising from

181
noncompliance with the reportorial
requirementsunderRuleV;
13. Such other disputes or conflicts involving
the rights to selforganization, union
membershipandCB
a. BetweenandamongLLOand
b. Between and among members of a
unionorworkersassociation.(Sec.1,
Rule XI, Book V, IRR as amended by
D.O.40F03)
Q: What is covered by the phrase other related

laborrelationsdisputes?
A:
1. Anyconflictbetween:
a.Alaborunionandtheemployer(Er);or
b.Alaborunionandagroupthatisnota
labororganization(LO);or
c. Alaborunionandanindividualwhois
notamemberofsuchunion
2. Cancellation of registration of unions and
workers associations filed by individual/s
other than its members, or group that is
notaLO.
3. ApetitionforInterpleaderinvolvinglabor
relations. (Sec. 2, Rule XI, Book V, IRR as
amendedbyD.O.40F03)
Q: Who may file a complaint or petition involving

intra/interuniondisputes?
A: A legitimate labor organization or its members.

(Sec.5,RuleXI,D.O.4003)
Q: What if the issue involves the entire

membership?
A:Thecomplaintmustbesignedbyatleast30%of
theentiremembershipoftheunion.
Q:Whatiftheissueinvolvesamemberonly?
A: Only the affected member may file the

complaint.(Sec.5,RuleXI,D.O.4003)
Note:
GR: Redress must first be sought within the union
itself in accordance with its constitution and by
laws
XPNs:
1. Futilityofintraunionremedies;
2. Improperexpulsionprocedure;
3. Undue delay in appeal as to constitute
substantialinjustice;
4. Theactionisfordamages;
5. Lackofjurisdictionoftheinvestigatingbody;
action for the administrative agency is
patentlyillegal,arbitraryandoppressive;
6. Issueispurelyaquestionoflaw;
7. Where the administrative agency had
alreadyprejudgedthecase;and
8. Where the administrative agency was
practically given the opportunity to act on
thecasebutitdidnot.
Q: May a decision in an inter/intraunion dispute

beappealedfrom?
A:Yes.
Q:Withinwhatperiodmayanappealtoadecision
of the medarbiter or regional director in an
inter/intrauniondisputebefiled?
A: The decision may be appealed by any of the

parties within 10 days from receipt thereof. (Sec.
16,RuleXI,D.O.4003)
Q:Towhomisthedecisionappealable?
A:Thedecisionisappealabletothe:
1. Bureau of Labor Relations (BLR): if the
case originated from the MedArbiter or
RegionalDirector;
2. SLE:ifthecaseoriginatedfromtheBLR.
Q: What is the extent of the Bureau of Labor

Relations(BLRs)authority?
A:
1. Itmayholdareferendumelectionamong
the members of a union for the purpose
ofdeterminingwhetherornottheydesire
tobeaffiliatedwithafederation.
2. ButtheBLRhasnoauthorityto:
a. Order a referendum among union

memberstodecidewhethertoexpel
orsuspendunionofficers.
b. Forward a case to the Trade Union
Congress of the Philippines for
arbitrationanddecision.
Q: Is Katarungang Pambarangay applicable to

labordisputes?
A: No. Art. 226 of the LC grants original and

exclusive jurisdiction over the conciliation and
mediationofdisputesgrievancesorproblemsinthe
regionalofficesoftheDOLE.ItistheBureauandits
divisions (now the NCMB) and not the Barangay
Lupong Tagapamayapa which are vested by law
with original and exclusive authority to conduct


LABORLAWTEAM:
182
conciliation and mediation proceedings on labor
controversies before endorsement to the
appropriatelaborarbiterforadjudication.
Note: ConciliationMediation is now done by the

NCMB,notBureauLaborRelations.
Q: What are the administrative functions of the

BureauLaborRelations(BLR)?
A:
1. Regulationofthelaborunions
2. Keepingtheregistryoflaborunions
3. MaintenanceofafileoftheCBA
4. Maintenanceofafileofallsettlementsor
final decisions of the SC, CA, NLRC and
otheragenciesonlabordisputes
Q: What are the effects of filing or pendency of

inter/intrauniondisputeandotherlaborrelations
disputes?
A:
1. Therightsrelationshipsandobligationsof
the partylitigants against each other and
other partiesininterest prior to the
institution of the petition shall continue
to remain during the pendency of the
petitionanduntilthedateofthedecision
rendered therein. Thereafter, the rights,
relationshipsandobligationsoftheparty
litigants against each other and other
partiesininterest shall be governed by
thedecisionordered.
2. The filing or pendency of any inter/intra

union disputes is not a prejudicial
question to any petition for certification
election, hence it shall not be a ground
for the dismissal of a petition for
certification of election or suspension of
the proceedings for the certification of
election.(Sec.3,RuleXI,DO4003)
Q: State the rules on appeal in intra/interunion

disputes.
A:
1. FormalRequirements
a. Underoath
b. Consistofamemorandumofappeal.
c. Based on either of the following
grounds:
i. Graveabuseofdiscretion
ii. Grossviolationoftherules
iii. With supporting arguments and
evidence
2. Period within 10 days from receipt of
decision.
3. Towhomappealable
a. BLRifthecaseoriginatedfromthe
MedArbiter/RegionalDirector.
b. SLE if the case originated from the
BLR.
4. Where Filed Regional Office or to the
BLR, where the complaint originated
(records are transmitted to the BLR or
Sec. within 24 hours from the receipt of
the memorandum of appeal). (Rule XI,
D.O.4003)
4.NATIONALCONCILIATIONANDMEDIAITON
BOARD(NCMB)
Q: What are the alternative modes of settlement
oflabordisputeunderArt.211oftheLaborCode?
A:
1. VoluntaryArbitration
2. Conciliation
3. Mediation
a.Conciliationvs.Mediation
Q:WhatisConciliatonandMediation?
A:
CONCILIATION MEDIATION
Is conceived of as a
mild form of
intervention by a
neutralthirdparty
Is a mild intervention
by a neutral third
party
The conciliator
Mediator, relying on
his persuasive
expertise, who takes
an active role in
assisting parties by
trying to keep
disputants talking,
facilitating other
procedural niceties,
carrying messages
back and forth
between the parties,
andgenerallybeinga
goodfellowwhotries
to keep things calm
and forwardlooking
inatensesituation
The conciliator
mediator, whereby
hestarts advising the
parties or offering
solutions or
alternatives to the
problems with the
end in view of
assisting them
towards voluntarily
reaching their own
mutually acceptable
settlement of the
dispute
It is the process
whereadisinterested
3rd party meets with
management and
labor, at their
requestorotherwise,
during a labor
dispute or in
Itiswhena3rdparty
studies each side of
the dispute then
makes proposals for
the disputants to
consider. The
mediator cannot
make an award nor

183
collective bargaining
conferences, and by
cooling tempers, aids
in reaching an
agreement
renderadecision
Conciliation is conceived of as a mild form of

intervention by a neutral third party, the
ConciliatorMediator, relying on his persuasive
expertise, who takes an active role in assisting
parties by trying to keep disputants talking,
facilitating other procedural niceties, carrying
messages back and forth between the parties,
and generally being a good fellow who tries to
keep things calm and forwardlooking in a tense
situation.
It is the process where a disinterested 3

rd
party
meetswithmanagementandlabor,attheirrequest
orotherwise,duringalabordisputeorincollective
bargaining conferences, and by cooling tempers,
aidsinreachinganagreement.
Mediationisamildinterventionbyaneutralthird
party, the ConciliatorMediator, whereby he starts
advising the parties or offering solutions or
alternativestotheproblemswiththeendinviewof
assisting them towards voluntarily reaching their
ownmutuallyacceptablesettlementofthedispute.
It is when a 3
rd
party studies each side of the
dispute then makes proposals for the disputants to
consider. The mediator cannot make an award nor
renderadecision.
Q:WhatistheLegalBasisofConciliationand
Mediation?
A:Article13,Section3,ofourNewConstitution
provides:
The State shall promote xxx the preferential
use of voluntary modes of setting disputes
including conciliation and shall ensure mutual
compliance by the parties thereof in order to
fosterindustrialpeace.
Note: A similar provision is echoed in the

Declaration of Policy under Article 211 (a) of the
LaborCode,asamended.
Q:WhocanavailofConciliationandMediation
ServicesoftheNCMB?
A:Anypartytoalabordispute,eithertheunion
or management, may seek the assistance
of NCMB or any of its Regional Branches by
means of formal request for conciliation and
preventive mediation. Depending on the nature
of the problem, a request may be filed in the
form of consultation, notice of preventive
mediationornoticeofstrike/lockout.
Q: Where can a request for Conciliation and

Mediationbefiled?
A:Aninformalorformalrequestforconciliation
and mediation service can be filed at the NCMB
Central Office or any of its Regional Branches.
There are at present fourteen (14) regional
offices of the NCMB which are strategically
located all over the country for the convenient
useofprospectiveclients.
b.PreventiveMediation
Q:WhatisPreventiveMediationCases?
A: Refer to the potential labor disputes which

are the subject of a formal or informal request
for conciliation and mediation assistance sought
byeitherorbothpartiesorupontheinitiativeof
theNCMBtoavoidtheoccurrenceofactuallabor
disputes.
Q: What are the valid issues for a notice of

strike/lockoutorpreventivemediationcase?
A: A notice of strike or lockout maybe filed on

ground of unfair labor practice acts, gross
violation of the CBA, or deadlock in collective
bargaining. A complaint on any of the above
ground must be specified in the NCMB Form or
theproperformusedinthefilingofcomplaint.
In case of preventive mediation, any issue

maybebroughtbeforetheNCMBCentralOffice
oritsregionalofficesforconciliationandpossible
settlementthroughaletter.Thismethodismore
preferable than a notice of strike/lockout
because of the nonadversarial atmosphere that
pervadesduringtheconciliationconferences.
Q: What advantage can be derived from

conciliationandmediationservices?
A: Conciliation and mediation is non

litigious/nonadversarial, less expensive, and
expeditious. Under this informal setup, the
parties find it more expedient to fully ventilate
their respective positions without running
around with legal technicalities and, in the
course thereof, afford them a wider latitude of
possibleapproachestotheproblem.
Q: Are the parties bound by the agreement

enteredintobythem?


LABORLAWTEAM:
184
A:Certainly,thepartiesareboundtohonorany
agreement entered into by them. It must be
pointed out that such an agreement came into
existenceasaresultofpainstakingeffortsamong
the union, management, and the Conciliator
Mediator. Therefore, it is only logical to assume
that the Conciliator assigned to the case has to
followupandmonitortheimplementationofthe
agreement.
Q: Is conciliation and mediation service still

possibleduringactualstrikeorlockout?
A: Definitely, it is possible to subject an actual

strikeoractuallockouttocontinuingconciliation
and mediation services. In fact, it is at this
criticalstagethatsuchconciliationandmediation
services by fully given a chance to work out
possible solution to the labor dispute. With the
ability of the ConciliatorMediator to put the
parties at ease and place them at a cooperative
mood, the final solutions of all the issues
involvedmayyetbeeffectedandsettled.
Q:Whenthedisputehasalreadybeenassumed
or certified to the NLRC, is it also possible to
remand the same to conciliation and mediation
services?
A: Yes, the parties are not precluded from

availing the services of an NCMB Conciliator
Mediator as the duty to bargain collectively
subsists until the final resolution of all issues
involved in the dispute. Conciliation is so
pervasive in application that, prior to a
compulsory arbitration award, the parties are
encouraged to continue to exhaust all possible
avenues of mutually resolving their dispute,
especially through conciliation and mediation
services.
Q: What benefit can the parties have in

appearingduringconciliationconferences?
A: Generally speaking, any party appearing

during scheduled conciliation conferences has
the advantage of presenting its position on the
labor controversy. The issue raised in the
complaint can be better ventilated with the
presence of the concerned parties. Moreover,
the parties can observe a norm of conduct
usuallyfollowedinlikeforum.
c.Artbitration
Q:Whatisarbitration?
A: It is the submission of a dispute to an impartial

person for determination on the basis of evidence
andargumentsoftheparties.Thearbitersdecision
orawardisenforceableuponthedisputants.Itmay
be voluntary (by agreement) or compulsory
(requiredbystatutoryprovision).(LuzonDevtBank
v. Assn of Luzon Devt Bank Employees, G.R. No.
120319,Oct.6,1995)
Q:Canthecourtfixresorttovoluntaryarbitration
(VA)?
A:ResorttoVAdispute,shouldnotbefixedbythe
court but by the parties relying on their strengths
andresources.
Q:Whoarethepartiestolaborrelationscases?
A:
1. Employeesorganization
2. Management
3. Thepublic
Note: Employer and Ees are active parties while the

publicandtheStatearepassiveparties.(Poquiz,2006,
p.3)
Q:Whatistheconceptoftripartism?
A:Itistherepresentationof3sectors.Theseare:
1. Thepublicorthegovernment
2. Theemployers
3. Theworkers
inpolicymakingbodiesofthegovt.
Q: Can workers insist that they be represented in

thepolicymakinginthecompany?
A: No. Such kind of representation in the policy

making bodies of private enterprises is not
ordained, not even by the Constitution. What is
provided for is workers participation in policy and
decisionmaking process directly affecting their
rights,benefits,andwelfare.
5.DOLEREGIONALDIRECTORS
a.SmallMoneyClaims
Q: What is the rule on the recovery of simple

moneyclaims?
A:
1. The aggregate money claim of each
employee (Ee) or househelper (HH) does
notexceedP5,000.
2. TheclaimispresentedbyanEeorperson
employed in the domestic or household
serviceorHH.

185
3. TheclaimarisesfromErEerelationship.
4. The claimant does not seek
reinstatement.
Note: In the absence of any of the ff. requisites, it is

the labor arbiter (LA) who shall have the jurisdiction
over the claims arising from ErEe relations, except
claims for Ees compensation, SSS, Philhealth, and
maternity benefits, pursuant to Art.217 of the Labor
Code.
The proceedings before the Regional Office shall be

summaryandnonlitigiousinnature.
Q:WhatistheadjudicatorypoweroftheRegional
Director(RD)?
A: The RD or any of his duly authorized hearing

officerisempoweredthroughsummaryproceeding
and after due notice, to hear and decide cases
involving recovery of wages and other monetary
claimsandbenefits,includinglegalinterests.
Q:Anairlinewhichfliesboththeinternationaland
domestic routes requested the SLE to approve the
policy that all female flight attendants upon
reaching age 40 with at least 15 years of service
shall be compulsorily retired; however, flight
attendants who have reached age 40 but have not
worked for 15 years will be allowed to continue
workinginordertoqualifyforretirementbenefits,
but in no case will the extension exceed 4 years.
Does the SLE have the authority to approve the
policy?
A: Yes. Art.132 (d) of the Labor Code provides that

theSLEshallestablishstandardsthatwillensurethe
safety and health of women employees including
the authority to determine appropriate minimum
age and other standards for retirement or
termination in special occupations such as those of
flightattendantsandthelike.(1998BarQuestion)
Q: What is the difference between the power of

SecretaryofLaborandEmployment(SLE),Regional
Director(RD)andLaborArbiter(LA)?
A:
Art.128
VPandEPof
SLE
Art.129
RD
Art.217(a)(6)
LA
Inspectionof
establishments
andissuance
ofordersto
compel
compliance
withlabor
standards,
wageorders
Adjudicationof
Eesclaimsfor
wagesand
benefits
LAexercises
originaland
exclusive
jurisdiction
andother
laborlaws
Enforcement
oflabor
legislationin
general
Limitedto
monetaryclaims
Allotherclaims
arisingfromEr
Eerelations
Proceedingis
anoffshootof
routine
inspections
Initiatedby
sworncomplaints
filedbyany
interestedparty
LAdecidescase
within30
calendardays
after
submissionof
thecasebythe
partiesfor
decision
No
jurisdictional
reqts
Jurisdictional
reqts:
1)Complaint
arisesfromErEe
relationship
2)Claimantisan
Eeorperson
employedin
domesticor
household
serviceoraHH
3)Complaint
doesNOTinclude
aclaimfor
reinstatement
4)Aggregate
moneyclaimof
EACHclaimant
doesnotexceed
P5,000
1)Allother
claimsarising
fromErEe
relations
2)Including
thoseof
personsin
domesticor
household
service
3)Involvingan
amount
exceeding
P5,000
4)Whetheror
not
accompanied
withaclaimfor
reinstatement
Appealableto
SLE(Incase
compliance
orderisissued
byRegional
Office)
Appealableto
NLRC
Appealableto
NLRC
6.DOLESECRETARY
a.VisitorialandEnforcementPowers
Q:Whatarethe3kindsofpowersoftheSecretary
ofLaborandEmployment(SLE)?
A:
1. Visitorialpowers
2. Enforcementpowers
3. Appellateorpowertoreview
Q:Whatconstitutevisitorialpower?


LABORLAWTEAM:
186
A:
1. Access to employers records and
premises at any time of the day or night,
wheneverworkisbeingundertaken
2. Tocopyfromsaidrecords
3. Question any employee and investigate
any fact, condition or matter which may
be necessary to determine violations or
which may aid in the enforcement of the
Labor Code and of any labor law, wage
order, or rules and regulation issued
pursuantthereto.
Q: Give 4 instances where the visitorial power of

theSLEmaybeexercisedundertheLaborCode.
A:Powerto:
1. Inspect books of accounts and records of

any person or entity engaged in
recruitment and placement, require it to
submit reports regularly on prescribed
forms and act in violations of any
placement.(Art.37)
2. Have access to employers records and
premises to determine violations of any
placement.(Art.128)
3. Conduct industrial safety inspections of
establishments.(Art.165)
4. Inquire into the financial activities of
legitimate labor organizations (LLO) and
examinetheirbooksofaccountsuponthe
filing of the complaint under oath and
duly supported by the written consent of
at least 20% of the total membership of
theLOconcerned.
Q:Whatisenforcementpower?
A:ItisthepoweroftheSLEto:
1. Issuecomplianceorders
2. Issue writs of execution for the
enforcement of their orders, except in
cases where the employer (Er) contests
the findings of the labor officer and raise
issues supported by documentary proof
which were not considered in the course
ofinspection
3. Order stoppage of work or suspension of
operation when noncompliance with the
laworimplementingrulesandregulations
poses grave and imminent danger to
health and safety of workers in the
workplace
4. Require Ers to keep and maintain such
employmentrecordsasmaybenecessary
in aid to the visitorial and enforcement
powers
5. Conduct hearings within 24 hours to
determinewhether:
a. An order for stoppage of work or
suspension of operations shall be
liftedornot;and
b. Er shall pay employees concerned
their salaries in case the violation is
attributabletohisfault.(Asamended
by RA 7730; Guico v. Secretary, G.R.
No.131750,Nov.16,1998)
Q:WhataretheviolationsunderArt.128?
A:
1. Obstruct, impede, delay or otherwise
renderineffectivetheordersoftheSLEor
hisauthorizedrepresentatives
2. Any government employee found guilty
of, or abuse of authority, shall be subject
to administrative investigation and
summarydismissalfromservice.
Q:Whatarethelimitationstoothercourts?
A: In relation to enforcement orders issued under

Art.128,noinferiorcourtorentityshall:
1. Issue temporary or permanent injunction

orrestrainingorderor
2. Assumejurisdictionoveranycase
Q: What are the instances when enforcement

powermaynotbeused?
A:
1. Case does not arise from the exercise of
visitorialpower
2. WhenErEerelationshipceasedtoexistat
thetimeoftheinspection
3. If employer contests the finding of the
Labor Regulation Officer and such
contestable issue is not verifiable in the
normalcourseofinspection
b.PowertoSuspendEffectsofTerminationArt.277
(b),LC
Q: Does the DOLE Secretary have the power to

suspendtheeffectsoftermination?
A:Yes,underArticle277(b)oftheLaborCode,the
Secretary of Labor may suspend the effects of the
terminationpendingresolutionofthedisputeinthe
event of a prima facie finding by the appropriate

187
official of the Department of Labor and
Employment before whom such dispute is pending
that the termination may cause serious labor
disputeorisinimplementationofamasslayoff.
7.VOLUNTARYARBITRATORS
a.SubmissionAgreement
Q:Howisarbitrationinitiated?
A:
1. Submission agreement Where the
partiesdefinethedisputestoberesolved
2. Demand notice Invoking collective
agreementarbitrationclause
Q:Whoisavoluntaryarbitrator(VA)?
A:
1. Any person accredited by the NCMB as
such
2. Any person named or designated in the
CBAbythepartiestoactastheirVA
3. One chosen with or without the
assistance of the NCMB, pursuant to a
selection procedure agreed upon in the
CBA
4. Anyofficialthatmaybeauthorizedbythe
SLEtoactasVAuponthewrittenrequest
and agreement of the parties to a labor
dispute.(Art.212[n])
Q:Whatarethepowersofavoluntaryarbitrator?
A:
1. Holdhearings
2. Receiveevidence
3. Take whatever action necessary to
resolve the dispute including efforts to
effect a voluntary settlement between
parties.(Art.262A)
Q: How is a voluntary arbitrator (VA)/panel

chosen?
A:
1. The parties in a CBA shall designate in
advance a VA/panel, preferably from the
listing of qualified VAs duly accredited by
theNCMB,or
2. Include in the agreement a procedure for
the selection of such VA or panel of VAs,
preferably from the listing of qualified
VAs duly accredited by the NCMB.
(Art.260,par.3)
Q: Who will designate the voluntary arbitrator

(VA)/panelincasethepartiesfailtoselectone?
A: ItistheNCMBthatshalldesignatetheVA/panel
based on the selection procedure provided by the
CBA. (Manila Central Line Free Workers Union v.
Manila Central Line Corp., G.R. No. 109383, June
15,1998)
Q: May Labor Arbiters (LA) be designated as

voluntaryarbitrators(VA)?
A:Yes.ThereisnothinginthelawthatprohibitsLAs
fromalsoactingasVAsaslongasthepartiesagree
to have him hear and decide their dispute. (Manila
Central Line Free Workers Union v. Manila Central
LineCorp.,G.R.No.109383,June15,1998)
Q: What falls under the jurisdiction of Voluntary

Arbitrators(VA)?
A: Generally, the arbitrator is expected to decide

only those questions expressly delineated by the
submission agreement. Nevertheless, the
arbitrator can assume that he has the necessary
power to make a final settlement since arbitration
is the final resort for the adjudication of the
disputes. (Ludo and Luym Corp. v. Saornido, G.R.
No.140960,Jan.20,2003)
Q:WhatcasesarewithinthejurisdictionofVA?
A:Originalandexclusivejurisdictionover:
1. All unresolved grievances arising from

the:
a. Implementation or interpretation of
theCBA
b. Interpretation or enforcement of
companypersonnelpolicies
2. Wage distortion issues arising from the

application of any wage orders in
organizedestablishments
3. Those arising from interpretation and

implementation of productivity incentive
programsunderR.A.6971
4. ViolationsofCBAprovisionswhicharenot
grossincharacterarenolongertreatedas
ULP and shall be resolved as grievances
undertheCBA
Note:GrossviolationofCBAprovisionsshall
mean flagrant and/or malicious refusal to
comply with the economic provisions of
suchagreement.


LABORLAWTEAM:
188
5. Anyotherlabordisputesuponagreement
by the parties including ULP and
bargainingdeadlock.(Art.262)
Q: May the NLRC and DOLE entertain

disputes/grievances/matters under the exclusive
and original jurisdiction of the voluntary
arbitrator?
A:No.Theymustimmediatelydisposeandreferthe
same to the grievance machinery or voluntary
arbitrationprovidedintheCBA
The parties may choose to submit the dispute to

voluntary arbitration proceedings before or at the
stageofcompulsoryarbitrationproceedings.
Q: What is the effect of the award of voluntary

arbitrator(VA)?
A:ThedecisionorawardoftheVAactingwithinthe
scope of its authority shall determine the rights of
the parties and their decisions shall have the same
legal effects as judgment of the courts. Such
mattersonfactandlawareconclusive.
Q: Are both the employer and the bargaining

representative of the employees required to go
through the grievance machinery in case a
grievancearises?
A: Yes, because it is but logical, just and equitable

that whoever is aggrieved should initiate
settlement of grievance through the grievance
machinery. To impose compulsory procedure on
employersalonewouldbeoppressiveofcapital.
Q: Who has jurisdiction over actual termination

disputes and complaints for illegal dismissal filed
byworkerspursuanttotheunionsecurityclause?
A: The Labor Arbiter and not the grievance

machinery.
Q:Whatisthenatureofthepowerofavoluntary
arbitrator?
A: Arbitrators by the nature of their functions, act

in a quasijudicial capacity (BP 129, as amended by
R.A. 9702); where a question of law is involved or
thereisabuseofdiscretion,courtswillnothesitate
topassuponreviewoftheiracts.
b.Rule43,RulesofCourt
Q: Are decisions of voluntary arbitrators (VAs)

appealable?
A:GR:DecisionsofVAarefinalandexecutoryafter
10 calendar days from receipt of the copy of the
awardordecisionbytheparties.(Art.262A)
XPNs:
1. Appeal to the CA via Rule 43 of the Rules
of Court within 15 days from the date of
receipt of VAs decision. (Luzon Devt
Bank v. Assn of Luzon Devt Bank Ees,
G.R.No.120319,Oct.6,1995)
2. If decision of CA is adverse to a party,
appeal to the SC via Rule 45 on pure
questionsoflaw.
Note:AVAbythenatureofherfunctionsactsinquasi
judicial capacity. There is no reason why the VAs
decisions involving interpretation of law should be
beyond the SCs review. Administrative officials are
presumedtoactinaccordancewithlawandyettheSC
will not hesitate to pass upon their work where a
question of law is involved or where a showing of
abuse of authority or discretion in their official acts is
properly raised in petitions for certiorari. (Continental
Marble Corporation v. NLRC, G.R. No. L43825, May 9,
1988)
Q: PSSLU had an existing CBA with Sanyo Phils.,

Inc. which contains a union security clause which
provides that: all members of the union covered
by this agreement must retain their membership
ingoodstandingintheunionasconditionofhis/
her continued employment with the company.
On account of antiunion activities, disloyalty and
for joining another union, PSSLU expelled 12
employees (Ees) from the Union. As a result,
PSSLU recommended the dismissal of said Ees
pursuant to the union security clause. Sanyo
approvedtherecommendationandconsideredthe
said Ees dismissed. Thereafter, the dismissed Ees
filed with the Arbitration Branch of the NLRC a
complaintforillegaldismissal.
Does the voluntary arbitrator (VA) have

jurisdictionoverthecase?
A: No, the VA has no jurisdiction over the case.

Although the dismissal of the Ees concerned was
made pursuant to the union security clause
provided in the CBA, there was no dispute
whatsoever between PSSLU and Sanyo as regards
the interpretation or implementation of the said
union security clause. Both PSSLU and Sanyo are
united and have come to an agreement regarding
the dismissal of the Ees concerned. Thus there is
no grievance between the union and management
whichcouldbebroughttothegrievancemachinery.
The dispute is between PSSLU and Sanyo, on the
one hand, and the dismissed union members, on
the other hand. The dispute therefore, does not

189
involve the interpretation or implementation of a
CBA. (Sanyo Philippines Workers UnionPSSLU v.
Canizares,G.R.No.101619,July8,1992)
Q: X was employed as telephone operator of

Manila Midtown Hotel. She was dismissed from
her employment for committing the following
violations of offenses subject to disciplinary
actions, namely: falsifying official documents and
culpable carelessnessnegligence or failure to
follow specific instructions or established
procedures. X then filed a complaint for illegal
dismissalwiththeArbitrationbranchoftheNLRC.
The Hotel challenged the jurisdiction of the Labor
Arbitrator (LA) on the ground that the case falls
within the jurisdictional ambit of the grievance
procedure and voluntary arbitration under the
CBA.
DoestheLAhavejurisdictionoverthecase?
A: Yes, the LA has jurisdiction. The dismissal of X

doesnot call for the interpretation or enforcement
of company personnel policies but is a termination
dispute which comes under the jurisdiction of the
LA. The dismissal of X is not an unresolved
grievance.Neitherdoesitpertaintointerpretation
ofcompanypersonnelpolicy.(Manejav.NLRC,G.R.
No.124013,June5,1998)
Q: Sime Darby Salaried Employees (Ees)

AssociationALU (SDSEAALU) wrote petitioner
Sime Darby Pilipinas (SDP) demanding the
implementationofaperformancebonusprovision
identical to the one contained in their own CBA
with SDP. Subsequently, SDP called both
respondent SDEA and SDEAALU to a meeting
wherein the former explained that it was unable
to grant the performance bonus. In a conciliation
meeting, both parties agreed to submit their
dispute to voluntary arbitration. Their agreement
to arbitrate stated, among other things, that they
were "submitting the issue of performance bonus
tovoluntaryarbitration."
Doesthevoluntaryarbitrator(VA)havethepower
to pass upon not only the question of whether to
grant the performance bonus or not but also to
determinetheamountthereof?
A: Yes, in their agreement to arbitrate, the parties

submitted to the VA the issue of performance
bonus.Thelanguageoftheagreementtoarbitrate
may be seen to be quite cryptic. There is no
indication at all that the parties to the arbitration
agreement regarded the issue of performance
bonusasatwotieredissue,onlyonetierofwhich
was being submitted to arbitration. Possibly, Sime
Darbys counsel considered that issue as having
dual aspects and intended in his own mind to
submit only one of those aspects to the VA, if he
did, however, he failed to reflect his thinking and
intent in the arbitration agreement. (Sime Darby
Phils.v.Magsalin,G.R.No.90426,Dec.15,1989)

Q:Apalisok,productionchiefforRPNStation,was
dismissed due to her alleged hostile, arrogant,
disrespectful, and defiant behavior towards the
Station Manager. She informed RPN that she is
waiving her right to resolve her case through the
grievance machinery as provided in the CBA. The
voluntary arbitrator (VA) resolved the case in the
employees(Ees)favor.
Onappeal,theCAruledinfavorofRPNbecauseit
considered the waiver of petitioner to file her
complaint before the grievance machinery as a
relinquishment of her right to avail herself of the
aidoftheVA.TheCAsaidthatthewaiverhadthe
effect of resolving an otherwise unresolved
grievance, thus the decision of the VA should be
setasideforlackofjurisdiction.Istherulingofthe
CAcorrect?
A: No. Art. 262 of the Labor Code provides that

uponagreementoftheparties,theVAcanhearand
decideallotherlabordisputes.
Contrary to the finding of the CA, voluntary

arbitration as a mode of settling the dispute was
not forced upon respondents. Both parties indeed
agreed to submit the issue of validity of the
dismissal of petitioner to the jurisdiction of the VA
by the Submission Agreement duly signed by their
respective counsels. The VA had jurisdiction over
thepartiescontroversy.
The Ees waiver of her option to submit her case to

grievance machinery did not amount to
relinquishing her right to avail herself of voluntary
arbitration.(Apalisokv.RPN,G.R.No.138094,May
29,2003)
8.COURTOFAPPEALS
Q: Is judicial review of the NLRCs decision

available?
A: Yes, through petitions for certiorari (Rule 65)

which should be initially filed with the CA in strict
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief
desired.TheCAisprocedurallyequippedtoresolve
unclear or ambiguous factual finding, aside from
the increased number of its component divisions.


LABORLAWTEAM:
190
(St.MartinFuneralHomev.NLRC,G.R.No.130866,
Sep.16,1998)
Note:Rule65,Section1,RulesofCourt
Petition for CertiorariWhen any tribunal, board or

officerexercisingjudicialorquasijudicialfunctionshas
acted without or in excess of its or his jurisdiction, or
with grave abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts
with certainty and prayingthat judgmentberendered
annulling or modifying the proceedings of such
tribunal,board or officer, andgrantingsuchincidental
reliefsaslawandjusticemayrequire.
The petition shall be accompanied by a certified true

copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents
relevant and pertinent thereto, and a sworn
certificationofnonforumshoppingasprovidedinthe
thirdparagraphofsection3,Rule46.
Q: Within what period should the petition for

certioraribefiledwiththeCourtofAppeals?
A: Under Section 4, Rule 65 (as amended by A.M.

No.00203SC)oftheRulesofCivilProcedure,the
petition must be filed within sixty (60) days from
notice of the judgment or from notice of the
resolution denying the petitioners motion for
reconsideration. This amendment is effective
September1,2000,butbeingcurativemaybegiven
retroactiveapplication.(Narzolesv.NLRC,G.R.No.
141959,Sep.29,2000)
The period within which a petition for certiorari

against a decision of the NLRC may be filed should
be computed from the date counsel of record of
the party receives a copy of the decision or
resolution,andnotfromthedatethepartyhimself
receives a copy thereof. Article 224 of the Labor
Code, which requires that copies of final decisions,
orders or awards be furnished not only the partys
counselofrecordbutalsothepartyhimselfapplies
to the execution thereof and not to the filing of an
appeal or petition for certiorari. (Ginete v. Sunrise
ManningAgency,G.R.No.142023,June21,2001)
9.SUPREMECOURT
Q: How does a party appeal from a judgment, or

finalorderorresolution,oftheCourtofAppeals?
A: A party desiring to appeal may file with the

Supreme Court a verified petition for review on
certiorari under Rule 45 within fifteen (15) days
from notice of the judgment, final order or
resolution appealed from. (Sea Power Shipping
Enterprises, Inc. v. CA, G.R. No. 138270, June 28,
2001)
Note:Rule45,Section1,RulesofCourt:
FilingofpetitionwithSupremeCourt.Apartydesiring
to appeal by certiorari from a judgment, final order or
resolution of the Court of
Appeals,theSandiganbayan,theCourtofTaxAppeals,
the Regional Trial Court or other courts, whenever
authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition
may include an application for a writ of preliminary
injunctionorotherprovisionalremediesandshallraise
only questions of law, which must be distinctly set
forth. The petitioner may seek the same provisional
remediesbyverifiedmotionfiledinthesameactionor
proceedingatanytimeduringitspendency.
Q:GivethepolicyoftheSupremeCourtregarding
appealsinlaborcases.
A: The Supreme Court is very strict regarding

appeals filed outside the reglementary period for
filingthesame.Toextendtheperiodoftheappeal
is to delay the case, a circumstance which could
give the employer the chance to wear out the
efforts and meager resources of the worker that
the latter is constrained to give up for less than
what is due him. (Firestone Tire and Rubber Co. of
the Philippines v. FirestoneTire and Rubber Co.
EmployeesUnion,G.R.No.75363,Aug.4,1992)
10.PRESCRIPTIONOFACTIONS
Q:Givetherulesasregardstheprescriptiveperiod
providedforintheLaborCode(LC).
A:
SUBJECT PRESCRIPTIVEPERIOD
Offensespenalized
undertheLC
3years
ULP
One(1)yearfrom
accrualofsuchULP;
otherwiseforever
barred(Art.290)
MoneyClaims
3yearsfromthetime
thecauseofaction
accrued;otherwise
foreverbarred
Allmoneyclaims
accruingpriortothe
effectivityoftheLC
Withinone(1)year
fromthedateof
effectivity,in
accordancewithIRR;
otherwise,theyshall
foreverbebarred
Workmens
Compensationclaims
accruingpriortothe
Dec.31,1974shallbe
filednotlaterthanMar.
31,1975beforethe

191
effectivityoftheLCand
betweenNov.1,1974
Dec.31,1974
appropriateregional
officesofthe
DepartmentofLabor.
(Art.291)
IllegalDismissalCases
4years.Itcommences
torunfromthedateof
formaldismissal.
(Mendozav.NLRC,G.R.
No.122481,Mar.5,
1998)

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FUNDAMENTAL PRINCIPLES AND POLICIES

A: It is theexertion by human beings of physical or

A: The law governing the rights and duties of the

1. The terms and conditions of employment

A: Labor legislation is an exercise of police power.

Q: Is there any distinction between labor

Social legislation is a broad term and may include

Q: What are the constitutional mandates with

The State shall promote the principle of

2. Sec. 9, Art. II The State shall promote a

3. Sec. 10, Art II The State shall promote

4. Sec. 11, Art II The State values the

5. Sec. 13, Art. II The State recognizes the

6. Sec. 14, Art. II The State recognizes the

8. Sec. 20, Art. II The State recognizes the

9. Sec. 1, Art. III No person shall be

10. Sec. 4, Art. III No law shall be passed

11. Sec. 8, Art. III The right of the people,

12. Sec. 1, Art. XIII The Congress shall give

To this end, the State shall regulate the

13. Sec. 2, Art. XIII The promotion of social

14. Sec. 14, Art. XIII The State shall protect

Q: What are the basic rights of workers

A: The principle mandates capital and labor not to

A: The justification of labor laws is social justice.

e.g: Employee validly dismissed may still be given

Q: How should doubts in the implementation and

Q: What is the concept of liberal approach in

A: The workers' welfare should be the paramount

MicaMara Company assails the validity of these

Q: What are the reasons for affording greater

A: No. The law also recognizes that management

A: The Department of Labor and other govt

Q: What are the limitations to the rulemaking

A: GR: All rights and benefits granted to workers

Q: What are the policy objectives of our labor

Q: What are the tests on whether a controversy

2. As to subject matter The test depends

a. Organizational right disputes/ULP

FUNDAMENTAL PRINCIPLES AND POLICIES

Q: Who shall be the bargaining representative of

A: The Labor Organization designated or selected

Q: What is the extent of the workers right to

A: Such right refers not only to formulation of

Q: Explain the extent of the workers right to

A: No. In Manila Electric Company v. Quisumbing,

Q: May an Er solicit questions, suggestions and

1. The CB representative executes an

recognized as such. Whether the Union may

A: No. Art. 255 of the LC declares that only the

Q: Are probationary Ees allowed to vote at the

A: Yes. Under Art. 255 of the LC the labor

RECRUITMENT AND PLACEMENT

A: Any member of the labor force, whether

1. The accused gave the complainant the

Q: Who is deemed engaged in recruitment and

A: Any person or entity which, in any manner,

A: GR: No person or entity other than the public

A: They are individual workers who are able to

Q: What if employment is offered to only one

A: Immaterial. The number of persons dealt with is

A: It is any person or association engaged in the

A: Any person employed in a vessel engaged in