ATTY. J. OSWALD B.

LORENZO
Former Labor Arbiter, NCR-NLRC; Professor
of Law and Pre-Bar Reviewer; President,
The Center for Law Advocacy and
Specialized Studies (CLASS); former
Assistant Secretary, DENR and POEA
Director for Licensing and Past President,
A- UPDATES ON LABOR RULES
AND JURISPRUDENCE

A-I – LEGALLY ALLOWABLE

HIRING POLICIES AND
PRACTICES
REGULAR EMPLOYMENT

Regular employment is
one where the
employee has been
engaged to perform
activities which are
necessary or desirable
CASUAL EMPLOYMENT
Casual employment is one
where the work or service to
be performed by the
employee is merely
incidental to the business of
the employer and such work
or
Service is for a definite
period made known to the
PROBATIONARY EMPLOYMENT

Probationary
employment is one
where the
employee is on
trial by employer
during which the
employer
 As a general rule, the
probationary period of
employment should not
exceed six (6) months
from the date of the
employee started
working. Applying
Article 13 of the Civil
Code, the probationary
 The standards should
be made known to the
employee at the start
of engagement. If
standards are not
made known to the
employee at start of
employment, he is
27, 2005. If there is no
stipulation on probationary
period, the employment is
deemed regular. (ATCI
Overseas Corporation vs.
CA, G.R. No. 143949,
August 9, 2001).

The permanent status of private

 He is a full time
teacher;
 He must have
rendered three
consecutive years of
service; and
 His service must have
been satisfactory.(UST
 An employee who
is allowed to work
after a
probationary
period is
considered a
PROJECT EMPLOYMENT
Project employment is
one where the
employment of an
employee has been fixed
for a specific project or
undertaking, the
completion or
termination of which has
SEASONAL EMPLOYMENT
 Seasonal employment is
one where the work or
service to be performed by
the employee is seasonal
in nature and the
employment is for the
duration of the season.
(Article 280, Labor Code).
Seasonal employee may
become regular employee
after one (1) year of
FIXED-TERM EMPLOYMENT
 Fixed-term employment
is one where the
employment of an
employee is covered by
a fixed contract of
employment.
 The two (2) criteria
under which fixed
 The fixed period of
employment was
knowingly and
voluntarily agreed
upon by the parties,
without any force,
duress or improper
pressure being
 It satisfactorily
appears that the
employer and
employee dealt with
each other on more
or less equal terms
with no moral
dominance whatever
The validity of fixed-period
employment has been
consistently upheld by the
Supreme Court starting with
Brent School vs. Zamora,
G.R. No. 48494, 2/5/90.
While their employment as
mixers, packers and
machine operators was
necessarily and desirable in
Consequently, there
could have been no
illegal dismissal when
their services were
terminated on
expiration of their
contracts. Contracts of
employment for a fixed
period terminate on
While the employees’
employment as chicken
dressers is necessary and
desirable in the usual
business of the employer,
they were employed on a
mere temporary basis, since
their employment was
limited to a fixed period.
Consequently, there was no
A.II – LEGALLY ALLOWABLE
FIRING POLICIES AND
PRACTICES

JUST CAUSES OF
TERMINATION
Serious misconduct or
willful disobedience by the
employee of the lawful
orders of his employer or
 Gross and habitual
neglect of the
employee of his duty;

 Fraud or willful breach

by the employee of
the trust reposed in
him by his employer
or his duly authorized
Commission of a crime or
offense by the employee
against his employer or
any immediate member of
his family or his duly
authorized representative;
(Article 282, Labor Code).

Violation of the Anti-

 Violation of the
Comprehensive Dangerous
Drug Law (Sec. 36 (d)
Republic Act No. 9165);
 Dismissal of an employee
pursuant to the demand of
the union from the
management to enforce
the closed-shop provision
of the CBA. (Article 248 (e),
An employer can be adjudged
guilty of unfair labor practice
for having dismissed its
employees in line with a
closed-shop provision of the
CBA if they were not given a
proper hearing or due
process. The discharge of an
employee from his
employment is null and void
where the employee was not
 Dismissal or loss of
employment status of union
officers and members who
knowingly participates in an
illegal activity/strike by
defying a Return-To-Work
Order (RTWO) of the
Secretary of Labor or of the
Commission. (San Juan de
Dios Education Foundation
Employees Union-Alliance of
Filipino Workers vs. San Juan
 Dismissal or loss of
employment status of
union officer who
knowingly participates
in an illegal strike.
(Art. 264 (a), Labor
Code; Gold City
Integrated Port
 Dismissal or loss of
employment status of any
worker or union officer
who knowingly
participates in the
commission of illegal acts
during strike. (Art. 264
(a), Labor Code.
 Ex. - Infliction of physical
injuries, assault, breaking
AUTHORIZED CAUSES OF
TERMINATION
Installation of labor-
saving devices;
 Redundancy- It exists
where the services of
an employee are in
excess of what is
 A position is redundant
where it is superfluous
and superfluity of a
position may be caused by
over hiring of workers,
decreased volume of
business or dropping of a
particular product line or
service activity previously
manufactured or
 Retrenchment to
prevent losses - It is
resorted to by an
employer primarily to
avoid or minimize
losses;
 Closure or cessation of
operation. (Art. 283,
Labor Code); backwages
 Notes: By jurisprudence, a closure of
establishment may include the following:

Transfer of a workplace to
a very far location beyond
the control of an employer
such as but not limited to
expiration of a lease
contract. (Chiniver Deco
 Sale of company;
 Merger;
 Bankruptcy;
 Insolvency
Closure due to serious
business losses or
financial reverses, the
employer is not obliged to
pay separation pay to his
employees. (North Davao
Mining Corporation vs.
NLRC, 254 SCRA 721;
Galaxie Steel Workers
Union v. NLRC, G.R. No.
Involuntary closure due to
CARP Program of DAR
where the employees are
the beneficiaries, the
employer is not obliged to
pay separation pay to his
employees. (NFL vs. NLRC/
Patalon Coconut Estate,
327 SCRA 158).
Disease (Article 284, Labor
Code)
A.III LABOR STANDARDS
BENEFITS
DEFINITION
Labor standards are
defined as the
minimum
requirements
prescribed by law
relating to wages,
 LEAVES WITH PAY
 SERVICE INCENTIVE LEAVE

A.1 - MANDATORY – FIVE (5)

DAYS SERVICE INCENTIVE
LEAVE WITH PAY (ART.
95)
A.2 – OPTIONAL – MORE
THAN FIVE (5) DAYS
SUCH AS 15 DAYS SICK
LEAVE AND 15 DAYS
• 3 – SERVICE REQUIREMENT
– 1 YEAR
A.4 – EXEMPTIONS:
SECTION I, RULE V, BOOK III
– RULES IMPLEMENTING
THE LABOR CODE
 GOVERNMENT
EMPLOYEES
 MANAGERIAL EMPLOYEES
 FIELD PERSONNEL
 ESTABLISHMENTS
EMPLOYING LESS THAN
TEN (10) WORKERS
(MEANS 1-9)
 THOSE WHO ARE
ALREADY ENJOYING
MATERNITY LEAVE

B.1 – 60 DAYS FOR

ORDINARY DELIVERY; 78
DAYS FOR CAESARIAN
DELIVERY;
B.2 – FIRST FOUR (4)
DELIVERIES EITHER
NORMAL, ABORTION OR
MISCARRIAGE;
B.3 – LEGITIMATE OR
B.4 – Service
requirement – the
pregnant woman must
have rendered service
of at least 6 months for
the last 12 months.

B.5 – The employer must

have paid at least 3
months of maternity
PATERNITY LEAVE
C.1 – 7 days for married
male employee, and
cohabiting or living
together as husband and
wife.
C.2 – First four (4) deliveries
either normal, abortion or
miscarriage (R.A. NO.
SOLO PARENT LEAVE
D.1 – 7 DAYS FOR SOLO PARENT
(MALE AND FEMALE)
D.2 – WHO IS A SOLO PARENT?
• A WOMAN WHO GIVES BIRTH
AS A RESULT OF RAPE;
• WIDOW OR WIDOWER;
• SPOUSE OF CONVICT IN JAIL;
• SPOUSE OF INSANE;
• SPOUSE AFTER LEGAL
SEPARATION WITH CUSTODY
OF CHILDREN;
 SPOUSE AFTER
DECLARATION OF NULLITY
OF MARRIAGE WITH
CUSTODY OF CHILDREN;

 SPOUSE ABANDONED FOR

AT LEAST ONE YEAR;

 UNMARRIED MOTHER OR
FATHER WITH CUSTODY
ANY PERSON WHO SOLELY
PROVIDES PASTORAL
CARE AND SUPPORT TO A
CHILD; AND

ANY FAMILY MEMBER

WHO ASSUMES
RESPONSIBILITY OF A
PARENT WHO ABANDONS.
BATTERED WOMAN LEAVE

E.1- 10 DAYS LEAVE

WITH PAY IN ADDITION
TO OTHER PAID LEAVES
UNDER THE LABOR
CODE, OTHER LAWS
AND COMPANY
BATTERED WOMAN Is one
who is a victim of any act
or series of acts of violence
committed by any person
which resulted to her
physical, sexual or
psychological suffering.
E.3. – TO APPLY FOR SUCH
LEAVE, THE WOMAN
Has to submit a
certification from
the barangay
captain or kagawad
or prosecutor or
the clerk of court
that an action
– Usage of the 10-day
leave is at the option
of the woman
employee. It shall
cover the day or days
when she will have to
attend to medical and
 LEAVES NOT AVAILED
OF ARE NON-
CUMULATIVE AND NOT
CONVERTIBLE TO CASH
(R.A. NO. 9262, THE
ANTI-VIOLENCE
AGAINST WOMEN AND
THEIR CHILDREN ACT
II – 13TH MONTH PAY
The purpose of 13th
month pay is to help the
plight of the working
masses to properly
celebrate Christmas and
New Year.
The employee must
have rendered service
with the company for at
 The minimum 13th
month pay required
by law shall not be
less than 1/12 of the
total basic salary
earned by an
employee within a
calendar year.
 The required 13th month
pay shall be paid not
later than December 24
each year. An employer,
however, may give to his
employees one half (1/2)
of the required 13th
month pay before the
opening of the regular
school year and the other
half on or before the 24th
 An employee who has
resigned, whose services
were terminated, and
who has retired at any
time before the time of
payment of the 13th
month pay is entitled to
this benefit in proportion
to the length of time he
worked during the year.
III – OVERTIME PAY
III.1 – Overtime work
means work performed
beyond 8 hours. (In
computing overtime pay,
a day is understood to
be 24-hour period
commences from the
 COMPENSATION:
1. Overtime work during
ordinary day = regular
hourly wage plus 25%
premium
2. Overtime work during
holiday or rest day – an
additional compensation
equivalent to the rate of
Undertime work on
any particular day
shall not be offset
by overtime work
on any other day.
(Art. 88)
IV – REST DAY/SPECIAL DAY
PAY
IV.1 – THE SPECIAL DAYS
ARE: NOVEMBER 1,
DECEMBER 31 (E.O. NO.
203, 6/30/87), AUGUST 21
(R.A. NO. 9256), 2.25.04),
OTHER SPECIAL DAYS
ENACTED BY CONGRESS,
AND PROCLAIMED BY THE
IV.2 – Work performed on
rest day – regular wage
plus 30% premium.
IV.3. – Work performed
on special day – regular
wage plus 30%
premium.
IV.4 – Work performed
during rest day falling
IV.5 – EXEMPTIONS:
SECTION II, RULE I, BOOK III
– RULES IMPLEMENTING
THE LABOR CODE
Government employees
 Domestic helpers
 Managerial employees
 Field personnel
 Workers paid by results
V. NIGHT SHIFT DIFFERENTIAL
PAY
V.1 – At least 10% premium
of his regular wage for
each hour of work
performed between 10:00
o’clock in the evening and
6:00 o’clock in the
morning of the following
day. (Art. 86).

V.2 – EXEMPTIONS:
Government employees
 Domestic helpers
 Managerial employees
 Field personnel
 Retail and service
establishments
employing not more
than five (5) workers
VI. HOLIDAYS WITH PAY
VI.1 – Every worker shall be
paid his regular wage
during regular holiday.

VI.2 – The eleven (11)

regular holidays are
January 1, Holy Thursday,
Good Friday, April 9, May 1,
June 12, last Sunday of
VI.3 – The employer may
require an employee to
work on regular holiday
but such employee shall
be paid compensation
equivalent to twice or
200% of his regular rate
(art. 94).
VI.4 – If the holiday work
VI.5 – The employee shall
be entitled to holiday
pay provided he works
on the day immediately
preceding a regular
holiday or when he is
on leave of absence
with pay, (SEC. 6, RULE
IV, BOOK III,
VI.6 - EXEMPTIONS:
SECTION I, RULE IV, BOOK III –
RULES IMPLEMENTING THE LABOR
CODE
GOVERNMENT EMPLOYEES
 DOMESTIC HELPERS
 MANAGERIAL EMPLOYEES
 FIELD PERSONNEL
 RETAIL AND SERVICE
ESTABLISHMENTS EMPLOYING
LESS THAN TEN (10) WORKERS
VI.7 - DOUBLE HOLIDAY – if
unworked – 200% -
if worked - 400% (Asian
Transmission Corporation
vs. CA, G.R. No. 144664,
3/15/04, 425 SCRA 478).
VII. RETIREMENT PAY
Retirement benefits
are intended to help the
employee enjoy the
remaining years of his
life, lessening the
burden of worrying his
financial support, and
are a form of reward for
VII.1 – In general –
optional – 60 years old;
compulsory – 65 years
old; (ART. 287, R.A. NO.
7641)
VII.2 – Underground
mining – optional – 50
years old; compulsory –
VII.3 – Minimum length of
service – AT LEAST 5 YEARS
VII.4 – Retirement benefit –
½ month pay for every
year of service a fraction of
at least 6 months being
considered as one (1)
whole year.

VII.5 – THE TERM “1/2

15 DAYS SALARY
5 DAYS EQUIVALENT OF
SERVICE INCENTIVE LEAVE
1/12 OF THE 13TH MONTH
PAY
(FACTORS IN OBTAINING
1/12 OF THE 13TH MONTH
PAY:
391.5/12/12 = 2.71
365/12/12 = 2.53 (MONTHLY
RATE EMPLOYEES)
314/12/12 = 2.18 (DAILY
RATE EMPLOYEES)
262/12/12 = 1.81
(EMPLOYEES WHO WORK
FIVE (5) DAYS PER WEEK)
MOST COMMON = 15 + 5 +
2.18 = 22.18 DAYS FOR
EVERY YEAR OF SERVICE.
VII.6 – EXEMPTIONS:
Section 2. Rule II – Rules
implementing the New
Retirement Law (R.A. No.
7641)
GOVERNMENT EMPLOYEES
 DOMESTIC HELPERS
 RETAIL, SERVICE AND
AGRICULTURAL
ESTABLISHMENTS EMPLOYING
VIII. SERVICE CHARGES
VIII.1 – Shall apply to
hotels, restaurants and
similar establishments.
VIII.2 – DISTRIBUTION
RATE:
85% FOR ALL
COVERED EMPLOYEES.
IX.3 EXEMPTIONS:
Barangay Micro
Business Enterprises
whose total assets
exclusive of land shall
not be more than P3 M
after issuance of
Certificate of Authority
by the City/Municipality
SEPARATION PAY
It is a statutory right
designed to provide
the employee with
the wherewithal
during the period he
is looking for another
X.1 – An employee is
entitled to separation
pay equivalent to his
one (1) month pay for
every year of service. A
fraction of at least six
(6) months being
considered as one whole
year. If his separation
INSTALLATION BY THE
EMPLOYER OF LABOR-
SAVING DEVICES AND
REDUNDANCY, AS WHEN
THE POSITION OF THE
EMPLOYEE HAS BEEN
FOUND TO BE
SURPLUSAGE OR
UNNECESSARY IN THE
 X.2 – An employee is
entitled to separation
pay equivalent to one
(1) month pay, or one
(1) month pay
whichever is higher for
every year of service a
fraction of at least six
months being
considered as one whole
 RETRENCHMENT TO
PREVENT LOSSES, i.e.
REDUCTION OF
PERSONNEL;
 CLOSURE OR CESSATION OF
OPERATION OR
UNDERATAKING OF AN
ESTABLISHMENT NOT
 When the employee
is suffering from a
disease not curable
within a period of six
(6) months and his
continued
employment is
prejudicial to his
X.3 – PROCEDURE –
Serve a written notice
on the workers and
the regional director
of the department of
labor and employment
having jurisdiction
over the place of
B- STEPS FOR DEALING A
PROBLEM EMPLOYEE
An ideal employee is
one who will help
solve an existing
problem and will not
add any problem to
his employer.
Conversely, an
B.1 - DISCIPLINARY PROCESS

Establish performance
standards and work rules;
 Communicate the rules to
employees;
 Evaluate employee
performance and identify
violations of the rules;
 Conduct investigation;
 Inform the union if
company is unionized;
B.2 – CIRCUMSTANCES AFFECTING
LIABILITY
Justifying;
Qualifying;
Exempting;
Mitigating;
Aggravating.
Note: Good performance, long
tenure, first offense are
mitigating factors while
recidivism is an aggravating
B.3 – DISCIPLINARY ACTIONS
Oral or written warning;
Reprimand
Fines (economic
sanctions);
Demotion;
Suspension;
Dismissal
 STEPS TO TAKE BEFORE
FIRING AN EMPLOYEE
C.1 – The procedure for
termination of
employment based on
just causes as defined
in Article 282 of the
Code:
1. A written notice
served to the
employee specifying
the ground or
grounds for
termination, and
giving to said
employee reasonable
2. A hearing or
conference during
which the employee
concerned, with
assistance of counsel
if the employee so
desires, is given the
opportunity to
3. A written notice of
termination served on
the employee indicating
that upon due
consideration of all the
circumstances, grounds
have been established to
justify his termination.
In case of termination,
For termination of
employment based on
authorized causes as
defined in Article 283 of the
Code, the requirements of
due process shall be
deemed complied with
upon service of a written
notice to the employee and
the appropriate Regional
Office of the Department at
If the termination is
brought by the
completion of the
contract or phase
thereof, no prior notice
is required. If the
termination is brought
about by the failure of
an employee to meet the
standards of the
Any decision taken
by the employer shall
be without prejudice
to the right of the
worker to contest the
validity or legality of
his dismissal by filing
a complaint with the
During the hearing of
the termination cases
based on just causes,
the employer may place
the worker concerned
under preventive
suspension if his
continued employment
poses a serious and
The law requires that the employer must
furnish the worker sought to be
dismissed with two written notices
before termination of employment can
be legally affected:

1. Notice which apprises

the employee of the
particular acts or omissions
 2. Subsequent notice
which informs the
employee of the
employer’s decision to
dismiss him. Failure to
comply with the
requirements taints the
dismissal with illegality.
This procedure is
 C.2 – LEGAL IMPLICATION
IF THE TERMINATION OF
AN EMPLOYEE IS WITHOUT
COMPLIANCE OF THE DUE
PROCESS REQUIREMENT
If the dismissal is based
on a just cause under
Article 282 but the
employer failed to
comply with the notice
requirement, the
sanction to be imposed
upon him should be
tempered (P30,000.00)
If the dismissal is based on
an authorized cause under
Article 283 but the
employer failed to comply
with the notice
requirement, the sanction
should be stiffer
(P50,000.00) because the
dismissal process was
initiated by the employer’s
exercise of his
D-I – WAGE ISSUES
Wage mean the
remuneration capable
of being expressed in
terms of money which
is payable by an
employer to an
employee for services
rendered. (Article 97
1. The minimum wage rates
in every region of the
country shall be those
prescribed by the Regional
Tripartite wages and
Productivity Board
(RTWPB). (Art. 99, Labor
Code)
2. The employer may not
3. An employer cannot be
forced to distribute
bonuses which it can no
longer afford to pay. To
hold otherwise would be
to penalize an employer
for his past generosity.
Bonus is an act of grace
and cannot be
4. The payment of wages by
an employer to an
employee shall be in legal
tender. (Art. 102, Labor
Code).

5. The wages shall be paid at

least once every two (2) weeks
or twice a month at intervals
not exceeding sixteen (16)
6. The payment of wages
shall be made at or near the
place or undertaking. The
payment o wages through
automated teller machines
is allowed. (Art. 104, Labor
Code).

7. The wages shall be paid

directly to the workers to
whom they are due except
D-2 – WAGE DEDUCTIONS

No employer shall make

any deduction from the
wages of his employees
except:

1. In cases where the worker is

insured with his consent by
the employer, and the
deduction is to recompense
the employer for the amount
2. Union dues;
3. Value of meals and other
facilities;
4. Debt of an employee to
the employer where such
has become due and
demandable;
5. Withholding tax;
6. SSS, Philhealth and Pag-
8. Loss or damage;
provided the
responsibility of an
employee has been
clearly shown; with
opportunity to be heard;
and the deduction is fair,
reasonable, does not
exceed the actual loss or
 SUPREME COURT DECISIONS
ON LEGAL AND ILLEGAL
DISMISSAL AND OTHER
ISSUES ON LABOR

1. ATTITUDE PROBLEM – A
VALID GROUND FOR
An employee who
cannot get along with
his co-employees is
detrimental to the
company for he can
upset and strain the
working environment.
Without the necessary
teamwork and synergy,
When personal differences
between employees and
management affect the
work environment, the
peace of the company is
affected. Thus, an employee
attitude problem is a valid
ground for his termination.
It is a situation analogous to
loss of trust and confidence
 2. SHOWING DISRESPECT
AND MAKING OFFENSIVE
REMARKS AGAINST
SUPERIOR ARE GROUNDS
FOR TERMINATION.
 The showing of
disrespect and
making offensive
remarks against his
superior is a valid
ground for
termination which is
tantamount to serious
 In falsely accusing a
superior for robbery,
the offense
committed was libel,
not slander (Torreda
v. Toshiba
Information
Equipment, Inc., G.R.
 The utterance of
obscene, insulting or
offensive words
against a superior
constitutes gross
misconduct, which is
one of the grounds to
terminate the
 3. POSTING NOTICE OF
CLOSURE ON BULLETIN
BOARD IS NOT
COMPLIANCE OF DUE
PROCESS.
- The mere posting on the
company bulletin board does
not meet the requirement
under Article 283 of serving
a written notice on the
workers. In order to meet
the purpose of informing the
employees of the specific
date of termination or
closure of business
operations at least one
4. Refusal to render
overtime work to meet
the production
deadline is considered
insubordination (R.B.
Michael Press v. Galit,
G.R. No. 153510,
5. The employer may be
liable for damages if he
fails to report to the SSS
within five (5) days the
entry in the logbook,
the sickness, injury or
death he deems to be
work-connected under
Articles 205 and 206 of