LABOR

LAW
 I. GENERAL PRINCIPLES
A. BASIC POLICY ON LABOR
Security of Tenure
The workers shall be entitled to security of tenure, humane conditions of work, and a living wage.

On Regular Employment On Other Kinds of Employment

Art. 294, Labor Code. Security of tenure shall also apply:
In case of regular employment, the employer shall not 1. Probationary Employment
terminate the services of an employee except for a just • However, termination of employment due
cause or when authorized under the Labor Code. to failure of the employee to qualify in
accordance with the standard of the
employer made known to the former at the
time of engagement may also be a ground
for termination of employment.

2. Project Employment & Employment covered

by Legitimate Contracting
• No employee shall be dismissed prior to the
completion of the project or phase thereof
for which the employee was engaged, or
prior to the expiration of the contract
between the principal and contractor, unless
o the dismissal is for just or
authorized cause subject to the
requirements of due process, or
o is brought about by the completion
of the phase of the project.

Social Justice
Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and
the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.

Limitations of Social Justice

Social justice should be used only to correct an injustice.

Laissez-Faire (free-market capitalism that opposes government intervention) is not fully embraced by the
Constitution. The Constitution is primarily a document of social justice, and although it has recognized the
importance of the private sector, it has not embraced fully the concept of laissez-faire or relied on pure market forces
to govern the economy.

Balancing of Interests
• Principle of Co-Determination refers to the right of workers to participate in the policy and decision-
making processes directly affecting their rights and benefits, without intruding into matters pertaining to
management prerogative.
• The State has the delicate task of balancing the interest between capital and labor. The law also
recognizes that management has rights, which are also entitled to respect and enforcement in the interest of
fair play.
• While labor laws should be construed liberally in favor of labor, we must be able to balance this with the
equally important right of the employer to due process. Art 11 sec 20 State recognizes
.
the
Art 11 sec 18
indispensable role of
• !!! NON-GOVERNMENTAL INTERFERENCE
.

↑ the private sector p

The rule is non-governmental interference. The government allows management and labor to negotiate

, ¥µµµµg-
and determine the terms of the contractual relationship – that is, the fixing of wages, et.al. through collective
bargaining but government sets the minimum standards, particularly on wages. This is the only
means by which the government intervenes – because under the Civil Code, the relationship between
management and labor is not merely contractual but one impressed with public interest. As such, the
government supports and assists the relationship, not to change it, but only to balance a relationship that is
inherently imbalanced. Although in some aspects of labor relations, the government has no power of
intervention at all e.g. constitutional provisions on voluntary modes of settling disputes. In this case the
government’s policy of regulation is not equivalent to policy of intervention. An example of this is drawing
up the CBA and modes of dispute resolution. In contrast, the government intervenes through issuance of
permits to strike, cease and desist orders or return to work orders.

µ #GETTHATBAR2022
FLORES · TARADJI
↳ between workers & employers
?⃝
Equal Work Opportunities
Art. 3, Labor Code
The State shall:
a. afford protection to labor,
b. promote full employment,
c. ensure equal work opportunities regardless of sex, race or creed, and
d. regulate the relations between workers and employers.

R.A. No. 10911 (An Act Prohibiting Discrimination Against Any Individual on Account of Age)
The State shall promote equal opportunities in employment for everyone. To this end, it shall be the policy of
the State to:
a. Promote employment of individuals on the basis of their abilities, knowledge, skills and qualifications rather
than their age.
b. Prohibit arbitrary age limitations in employment.
c. Promote the right of all employees and workers, regardless of age, to be treated equally in terms of
compensation, benefits, promotion, training and other employment opportunities.

Right to Self-Organization and Collective Bargaining

The State shall guarantee:
1. The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law.
2. The rights of all workers to
1. Self-organization
2. Collective bargaining and negotiations
3. Peaceful concerted activities
4. Strike in accordance with law.

B. CONSTRUCTION IN FAVOR OF LABOR

• All doubts in the implementation and interpretation of the provisions of this Code, including its implementing
rules and regulations, shall be resolved in favor of labor.
• In case of doubt, all legislation and all labor contracts shall be construed in favor of the safety and decent
living for the laborer.
• If doubts exist between the evidence presented by the employer and the employee, the scale of justice must
be tilted in favor of the latter.

Limitation of Construction in Favor of Labor

It is construed in favor of labor if there is a doubt as to the meaning of the legal and contractual provision. If the
provision is clear and unambiguous, it must be applied in accordance with its express terms.

CASE LAW
Cebu Royal Plant vs. Deputy Minister of Labor
• Ramon Pilones was removed due to “pulmonary tuberculosis minimal”. He filed for illegal dismissal. It was
found that the ailment was not certified as incurable within six months as to justify separation. Also,
the employer should have first obtained a clearance for termination of employment. Employer insists
he was a probationary employee. Court ruled that the employee should be reinstated. It is shown that
employee continued working as usual way beyond the six-month period of probation. Hence, he was on
permanent status at the time he was dismissed. The court reaffirms its concern for the lowly worker who,
often at the mercy of his employers, must look up to the law for his protection.

C. BURDEN OF PROOF AND QUANTUM OF EVIDENCE IN LABOR CASES

QUANTUM OF EVIDENCE
Substantial Evidence → that amount of relevant evidence, which a reasonable mind might accept as adequate to
justify a conclusion.

The burden of proof rests upon the party who asserts the affirmative of an issue.
Who has the burden of proof?
1. Existence of ER-EE Relationship: Employee
2. Fact of Dismissal: Employee
3. Validity of Dismissal: Employer

CASE LAW
1. Employer has burden of proof in alleging unfair labor practice
2. Employer that filed for revocation of union’s registration has the burden of proving fraud and
misrepresentation
3. Penalty imposed by employer to discipline employees should be commensurate to offense involved
#GETTHATBAR2022
FLORES · TARADJI
D. LEGAL BASIS UNDER THE 1987 CONSTITUTION, CIVIL CODE, AND LABOR CODE
WHAT IS THE STATE POLICY ON LABOR?
The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their
welfare (Art. II, Sec. 18). The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all
workers. (Art. XIII, Sec. 3(1))

1987 Constitution
1. Art. III, Sec. 1 Due Process
• Under the Labor Code, the requirements for the lawful dismissal of an employee by his employer are
two-fold: substantive and the procedural. Not only must the dismissal be for a valid or authorized
cause as provided by law, but the rudimentary requirements of due process, basic to which are
that an opportunity to be heard and to defend oneself must be observed before an employee may
be dismissed.
• One’s employment is a property right, and the wrongful interference therewith is an actionable
wrong.
2. Art. III, Sec. 4 Freedom of Speech and Right Peaceably to Assemble
• Wearing armbands and putting up placards to express one’s views without violating the rights of 3rd
parties are legal per se and even constitutionally protected.
3. Art. III, Sec. 8 Right to Form Unions
4. Art. III, Sec. 16 Right to Speedy Disposition of Cases
5. Art. III, Sec. 18(2) Right Against Involuntary Servitude
• The prohibition against involuntary servitude has been cited by the SC in some cases concerning
resignation of employees – that they cannot be compelled to work against their will and are free to
resign.
6. !!! Art. XIII, Sec. 3 Full Protection to Labor
• The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
• It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law
(COLLECTIVE RIGHTS OF WORKERS).
• They shall be entitled to security of tenure, humane conditions of work, and a living wage
(INDIVIDUAL RIGHTS OF WORKERS).
• They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.

7 Basic Rights of Workers Guaranteed by the Constitution: (WHOSE-CD)

1. To receive a living Wage
2. To work under Humane conditions
3. Right to Organize
4. To enjoy Security of tenure
5. To Engage in peaceful concerted activities, including strike in accordance with law
6. To conduct Collective bargaining or negotiation with management
7. To participate in policy and Decision-making processes affecting their rights and benefits as may be provided
by law

Civil Code
1. 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 and similar subjects.
2. Art. 1701.
• Neither capital nor labor shall act oppressively against the other or impair the interest or
convenience of the public.
3. Art. 1702.
• In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety
and decent living for the laborer.
4. Art. 1703.
• No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall
be valid.

#GETTHATBAR2022
FLORES · TARADJI
Labor Code
1. Art. 211.
•• Declaration of policy
• It is the policy of the State:
i. To promote and emphasize the primacy of free collective bargaining and negotiations,
including voluntary arbitration, mediation and conciliation as modes of settling labor or
industrial disputes
ii. To promote free trade unionism
iii. To foster the free and voluntary organization of a strong and united labor movement
iv. To promote the enlightenment of workers concerning their rights and obligations as union
members and as employees
v. To provide an adequate administrative machinery for the expeditious settlement of labor
or industrial disputes
vi. To ensure industrial peace and
vii. To ensure the participation of workers in decision and policy-making processes affecting
their rights, duties and welfare. ↳ includes STATE POLICIES
▪ Having a union in a company is an effective mechanism for the workers to participate
in decision-making processes at the company-level. But to enable workers to
participate in governmental decision-making processes, it is not enough to be part of
a union, the union should be interconnected to be united in a common advocacy.
• To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining. 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 provided under the Labor Code.

2. !!! Art. 290 as amended. Tripartism and Tripartite Conferences

• Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and
employers shall, as far as practicable, be represented in decision and policy-making bodies of the
government.
• The composition of the Regional Tripartite Wages and Productivity Board
1. Representatives of the Government
2. Representatives of workers or unions
3. Representatives of the employers
• The levels of the Tripartite Industrial Peace Council (TIPC):
1. At the national level NTIPC
2. At the regional level RTIPC –
geographically-based, i.e. per region AND industry-based, e.g. garments industry

NOTE: All the regional and industry-wide tripartite councils have to be connected together based
on the amendments on Art. 290, LC. ↳under a NTIPC .

CASE LAW
Phil. Blooming Mills Employees Assoc. vs. PBM
• PBMEO wanted to stage a mass demonstration at Malacanang, against alleged police abuses. PBM raised that
it would prejudice operations and said that at least one shift should be present on the day of the rally. PBMEO
went ahead with the rally and was charged with violation of the “no lockout-no strike” clause in the CBA.
Court ruled that the demonstration held by the employees was against alleged abuses of some Pasig
policemen, not against their employer. Said demonstration was completely an exercise of their freedom of
expression.

Philippine Airlines vs. NLRC

• PAL completely revised its Code of Discipline. PALEA filed a complaint with the NLRC for ULP, because the
Code was arbitrarily implemented without prior notice and discussion of such with the union. PAL raises
management prerogative. Court ruled that the exercise of managerial prerogatives is not unlimited. It
is circumscribed by limitations found in law, the CBA, or general principles of fair play and justice.
Management should see to it that its employees are at least properly informed of its decisions and modes of
action. Industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights.

#GETTHATBAR2022
FLORES · TARADJI
 II. RECRUITMENT AND PLACEMENT OF WORKERS
A. RECRUITMENT AND PLACEMENT
General Principles from both the Labor Code and the Migrant Workers Act:
i. The protection of labor and the promotion of full employment both locally and across. Among the
objectives would be the free choice of available employment.
ii. Full employment is realized through training, allocation and proper utilization in the human resources
in the country. There must be continuous training for people so that full employment can be realized.

DEPLOYMENT OF MIGRANT WORKERS

i. We adopt a policy of selective deployment; in that we deploy only to countries where the rights of Filipino
migrant workers are protected
ii. This is operationalized by the fact that the Philippines only deploy workers to receiving countries which
guaranty protection.
a. The receiving country must have labor and social laws protecting workers
b. That they have signed, ratified and adopted treaties, conventions and other resolutions relating to
the protection of migrant workers, or workers in general, including migrant workers; and
c. That countries that have concluded bilateral labor agreements with the Philippines for the protection
of Filipino migrant workers and have taken steps in enacting labor and social laws

DEPLOYMENT BANS
i. This is done in pursuit of national interest or when public policy or public welfare requires.
ii. It is now the POEA governing board which can terminate or impose a ban on the deployment of migrant
workers. This is after a consultation is done with the DFA.
iii. The validity of these deployment bans has been the subject of the case of PASEI v. Drilon wherein the Court
upheld the validity of the deployment ban of female domestic workers by taking judicial notice that the
female domestic workers from the Philippines suffered abuse and during that time were waiting for the
situation to improve in the receiving countries as to the treatment of our migrant workers.

RECRUITMENT AND PLACEMENT

• Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
• Includes referrals, contract services, promising or advertising for employment, locally or abroad, whether
for profit or not
• Any person or entity which, in any manner, offers or promises for a fee, employment to 2 or more persons
shall be deemed engaged in recruitment and placement.

NOTES:
i. The idea of having profit or not is not necessary as long any of the said acts were committed
ii. An act of referral, as explicitly mentioned, is part of recruitment as pronounced in the case of Rodolfo v.
People → it includes passing along or forwarding an applicant after an initial interview for employment
to a selected employer, placement or office.
iii. Promising employment is also part of recruitment. It is actually the perfection of the employment
contract that can give rise to illegal recruitment, EER need not arise for illegal recruitment to be had or
performed or consummated. We make this distinction, especially in overseas employment, because EER
begins at the time of deployment.
iv. In the case of People v. Panis (1990), it was being argued that there has to be at least two persons for
illegal recruitment to happen. But according to the Court, this two or more persons only creates a
disputable presumption that there is recruitment or placement that is happening because the number of
victims is really immaterial in the commission of the crime. Even if there is just one, there can or it can be
recruitment or placement already. But if there is two or more, there is that presumption that the person or
the entity is engaged in recruitment or placement.

#GETTHATBAR2022
FLORES · TARADJI
1. Illegal Recruitment and Other Prohibited Activities
ILLEGAL RECRUITMENT

LABOR CODE (ART. 38) MIGRANT WORKERS ACT (SEC. 6)

For local recruitment and employment For recruitment for overseas work
Conduct of recruitment activities without a license or authority
Commission of prohibited acts (Art. 34 of the LC) by Commission of prohibited acts (Sec. 6 of RA 8042)
a non-licensee or non-holder of authority by a non-licensee, non-holder of authority,
licensee, or holder of authority

PROHIBITED ACTS

Common to the Labor Code and MWA

1. Charge or accept any amount greater than allowed fees or to make worker pay an amount greater
than a loan
2. Furnish or publish false notice or information about recruitment or employment
3. Induce or attempt to induce worker to quit work in order to offer him another
• EXCEPTION: The transfer is designed to liberate a worker from oppressive terms and
conditions of employment.
4. Influence or attempt to influence any entity not to employ a worker who did not apply through
the agency
5. Recruitment or placement for jobs harmful to public health, morality, or dignity of the Philippines
6. Become an officer of BOD member of a travel agency
7. Give false notice, testimony, information, document, or do any misrepresentation to secure a license
or authority
8. Obstruct or attempt to obstruct inspection by SOLE or authorized representative
9. Contract substitution
10. Fail to file reports on status of employment, placement vacancies, remittances, separation from jobs,
departures, etc.
11. Withhold or deny travel documents from workers for monetary considerations.

NOTES:
❖ The receipt of payment after the expiration of recruitment license is not illegal recruitment if the acts
of recruitment or placement were done at the time that the license was still valid.
❖ Because illegal recruitment is a crime, there is need to prove guilt beyond reasonable doubt. In Darvin
v. CA, 1998, the Court said “by themselves, procuring a passport, airline tickets and foreign visa for
another individual, without more, can hardly qualify as recruitment activities.” The complainant must
prove the presence of the two elements of the crime of illegal recruitment.
I

Additional Prohibited Acts in the MWA

1. Failure to deploy without a valid reason
2. Failure to reimburse documentation and processing expenses in case of non-deployment, or any
other related expenses that the worker paid to the agency ↳ without worker's fault
3. Suspended agency engaging in recruitment activities
e.
g. force majeure

4. Allow a non-Filipino to head or manage a recruitment or manning agency

5. Agency or foreign employer deducting insurance related costs (compulsory coverage)
6. Grant a loan to an OFW to pay placement fees with an interest exceeding 8% per annum
(personally or through a guarantor)
7. Refusal to condone or renegotiate a loan after the employment contract is terminated without
fault of the OFW
8. Impose a compulsory arrangement whereby an OFW can only get from specific or designated
entities the following:
• Loans
• Health examination, except if this is shouldered by the principal;
• Training, seminar, instruction, schooling; except if this is shouldered by the principal.

a. Elements
The essential elements of illegal recruitment vary in accordance with the following classifications:
1. Simple illegal recruitment
2. When committed by a syndicate
3. When committed in large scale

#GETTHATBAR2022
FLORES · TARADJI
 b. Types of Illegal Recruitment
SIMPLE EONOMIC SABOTAGE
EH
Simple Illegal Recruitment Illegal Recruitment by a Syndicate Illegal Recruitment in Large Scale
For Local Workers 1. The offender undertakes 1. The offender undertakes
1. Person charged with the either any recruitment either any recruitment
crime must have activity (Art. 13), or any activity (Art. 13), or any
undertaken recruitment prohibited acts (Art. 34) prohibited acts (Art. 34)
activities as defined under 2. He has no valid license or 2. Has no valid license or
Art, 13(b) or prohibited authority authority
activities defined under Art. 3. Committed by a group of 3 3. Committed against 3 or
34 or more persons conspiring more persons individually
2. Said person does not have a or confederating with one or as a group
license or authority to do so another

For Migrant Workers

1. First Type
a. Person charged
undertakes any
recruitment activities
under Art. 13(b)
b. Said person does not
have a license or
authority to do so

2. Second Type
a. Person charged commits
any of the acts under
Sec. 6 of RA 8042
b. It is immaterial whether
he is a holder or not of
any license or authority

NOTES:
❖ JURISDICTION over illegal recruitment cases → RTC.
❖ VENUE → either:
o the place where the offense was committed; or
o the place where the victim resides at the time of the commission of the offense
▪ In Sto. Tomas v. Salac, the Court said that having alternative venues for a crime in the context
of illegal recruitment is allowed. It is the choice of the victim where to file the illegal
recruitment case.

PRESCRIPTIVE PERIODS AND PENALTIES

Under the Labor Code (Art. 39) → Covers only cases involving local employment

Simple IR Prohibited Acts IR – Economic All Cases

Sabotage
3 years
Licensee/Holder of Authority Life Imprisonment Committed by an alien – deportation without
Imprisonment –2 years - 5 years further proceedings

Non-Licensee/Non-Holder of Upon conviction – automatic revocation of license

Authority or registration
Imprisonment –4 years - 8 years

Licensee/Holder of Authority Fine – 100k

Fine –10k - 50k

Non-Licensee/Non-Holder of
Authority
Fine –20k - 100k

#GETTHATBAR2022
FLORES · TARADJI
Under the Migrant Workers Act, as amended by RA 10022 → Covers overseas employment

Simple IR IR- Economic Prohibited Acts All Cases

Sabotage
5 years 20 years Depends, if it Committed by an alien – deportation
amounts to Simple IR without further proceedings
or Economic
Sabotage. Upon conviction – automatic revocation
of license or registration. This applies
Imprisonment –12 Life imprisonment Imprisonment – 6 not only to placement agencies but also
years and 1 day - years and 1 day - 12 to lending institutions, training schools,
20 years years or medical clinics

Fine –1M - 2M Fine –2M - 5M Fine –500k - 1M

Maximum Penalty:
• Victim is less than
18 years old
• Committed by non-
licensee or non-
holder of authority

c. Illegal Recruitment vs. Estafa

Illegal Recruitment Estafa
Malum prohibitum Malum in se
Criminal intent of the accused is not necessary Criminal intent is imperative
Penalized under the Labor Code Penalized under the Revised Penal Code
Limited in scope → covers only acts constituting Wider in scope and covers deceits whether related or not
recruitment and placement, and acts identified as related to recruitment activities or not
prohibited.
Committed by any person who defrauds another by using
fictitious name, or falsely pretends to possess power,
influence, qualifications, property, credit, agency,
business or imaginary transactions, or by means of
similar deceits executed prior to or simultaneously with
the commission of the fraud

NOTES:
❖ A worker who suffers pecuniary damage, regardless of the amount, as a result of false pretenses resorted to
by a non-licensee or a non-holder of authority may file both an illegal recruitment and estafa case.
❖ A conviction for illegal recruitment under the Labor Code will not preclude the punishment for estafa under
the RPC. There is no double jeopardy.

REGULATION OF RECRUITMENT AND PLACEMENT

❖ Private sector participation – Generally, it is only the public sector office which can recruit people for
overseas employment. However, the private sector can participate under such guidelines and rules and
regulations issued by the Secretary of Labor.
❖ Travel agencies are prohibited from engaging in recruitment and placement, whether for profit or not. This
also includes the sales agencies of airlines.
❖ Citizenship requirement – must be generally owned by Filipinos. In case of juridical persons, the authorized
capital stock and the voting capital stock must be owned and controlled by Filipinos, 75%.
❖ Capitalization:
o Local Employment
▪ Single proprietorship: 1 million net worth
▪ Juridical entity: 1 million paid up capital
o Overseas Employment
▪ Single proprietorship: 5 million net worth
▪ Juridical entity: 5 million paid up capital
❖ The license or authority granted is non-transferrable.
o Any transfer of address and the appointment or designation of the agents of the agency, or the
establishment of office in different parts of the country requires the approval of the Secretary of
Labor.
❖ Registration fee can be imposed.
❖ Bond posted by the recruiter, as mentioned earlier, can either be a cash or a surety bond.

#GETTHATBAR2022
FLORES · TARADJI
❖ Fees - Any fees cannot be charged until the EE has obtained or commenced employment through the efforts
of the agency.
❖ Reports – failure to give reports can be a prohibited act under the law.
❖ Regulatory and Visitorial Powers of SOLE – power belongs to SOLE and POEA concurrently.
Why? POEA was also granted the power to suspend and cancel licenses or authority—pursuant to
the power of the SOLE to make rules under Article 36 of LC.

Scope of visitorial powers:

1. At any time, inspection of premises, Books of accounts and Records
2. Power to require submission of reports
3. Power to act on violations

NOTE: SOLE & POEA and labor officials DOES NOT HAVE POWER TO ISSUE WARRANTS. They have
to go to Courts to acquire the warrants.

2. Liability of Local Recruitment Agency and Foreign Employer

a. Solidary Liability
There exists solidary liability between the principal or employer and the recruitment or placement
agency, and this provision must be included in the overseas employment contract; otherwise, the
POEA will not approve the contract.

NOTES:
▪ The liability of the agency does not end even if the agency contract between the principal and
the agency is already severed. The obligation of the agency extends until the expiration of the
employment contract. (Catan v. NLRC, 1988)
▪ In cases of extension of the employment contract, the agency will not be liable anymore if it
did not know of the extension. The liability of the agency ends upon the expiration of the
original contract, unless it knows of such extension. (Sunace International v. NLRC, 2006)
▪ A recruiter is required to post a cash bond. This is to answer for all claims and liabilities
arising from or in connection with an overseas employment contract and to guarantee
compliance with Philippine labor law and the labor laws of the receiving state.
▪ Another reason for the posting of cash bond is because of the idea that it is difficult to go after
a foreign employer which probably does not have any property in the Philippines that you
can execute on. (Stronghold Insurance v. CA, 1992)
▪ Even if there was transfer of accreditation by the employer from 1 recruitment agency to
another, the liability of the original agency to employees remained intact because respondent
employees are not privy to such contract.

Instances a Local Recruitment Agency is Exempted from Solidary Liability

1. When the worker persuades the local representative of the principal or recruiter to send him
abroad to work despite the refusal of said representative or recruiter to accede to the request
due to the unstable condition in the area of work desired by signing a waiver rendering the
local representative or recruiter free from any liability
2. When the workers were recruited ostensibly under the name of the supposed recruitment
agency without the latter’s consent and knowledge.

b. Theory of Imputed Knowledge

The Theory of Imputed Knowledge ascribes the knowledge of the agent to the principal, not the
other way around. The knowledge of the principal-foreign employer cannot, therefor, be imputed to
its agent.

NOTE: In the case of Sunace International Management Services vs. NLRC, the agency was not aware
of or was ignorant of the employment extension between the principal and the employee. Hence, the
agency was free from any liability.

#GETTHATBAR2022
FLORES · TARADJI
3. Entities Prohibited from Recruiting
For Overseas Employment
1. Travel agencies and sales agencies of airline companies
2. Officers or members of the Board of any corporation or partners in a partnership engaged in the
business of a travel agency
3. Corporations and partnerships, where any of its officers, members or partners, is also an officer,
member or partner of a corporation or partnership engaged in the business of a travel agency
4. Individuals, partners, officers, or directors of an insurance company who make, propose, or provide
an insurance contract under the compulsory insurance coverage for agency-hired OFWs
5. Sole proprietors, partners or officers and members of the board with derogatory records, such as
but not limited to the following:
a. Those convicted or against whom probable cause or prima facie finding of guilt is
determined by a competent authority for illegal recruitment or for other related crimes
b. Those agencies whose licenses have been revoked
c. Those agencies whose licenses have been cancelled, or included in the list of persons with
derogatory record
6. Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, FO, NBI,
PNP, Civil Aviation Authority of the Philippines, international airport authorities, and other
government agencies directly involved in the implementation of the Migrant Workers Act and/or
his relatives within 4th civil degree of consanguinity or affinity.

For Local Employment

1. Those who have pending cases with probable cause or convicted of illegal recruitment, trafficking
in persons, anti-child labor law violation, or crimes involving moral turpitude
2. Those agencies, proprietors, partnerships, corporations whose licenses have been previously
revoked or cancelled by the DOLE under these Rules
3. Cooperatives whether registered or not under the Cooperative Act
4. Law enforcers and any official or employee of the DOLE
5. Current PEA licensed sole proprietors are prohibited from securing another license to engage in
local recruitment and placement
6. Sole proprietors, partnerships or corporations licensed to engage in private recruitment and
placement for local employment are prohibited from engaging in job contracting or subcontracting
activities
7. Technical-vocational institutions and other training institutions

4. Cancellation of License or Authority

LICENSE AUTHORITY
A document issued by the DOLE authorizing a A document issued by the DOLE authorizing a
person or entity to operate a private employment person or association to engage in recruitment and
agency. placement activities as a private recruitment
agency.

Who may suspend and/or cancel a license or authority?

The power to suspend or cancel any license or authority to recruit employees for overseas employment is
concurrently vested with the POEA and the SOLE.

GROUNDS FOR SUSPESION OR CANCELLATION OF LICENSE

1. Unjustified refusal to assist or repatriate distressed OFWs
2. Deliberate violation or non-compliance of the principal/employer with its contractual
obligations to its hired OFWs
3. Continued processing and deployment of the OFWs for the principal/employer will lead to the
further exploitation of any or all of its applicants and OFWs, or pose imminent danger to the
lives and safety of its OFWs
4. When found to have hired and employed an OFW who is either a minor or below the prescribed
minimum age requirement

GROUNDS FOR AUTOMATIC REVOCATION OF LICENSE

1. Expiration of the principal’s or employer’s business license or cessation of business or
recruitment activity after a period of 1 year from expiration or cessation
2. Upon written mutual agreement by the principal or employer and the licensed recruitment
agency to terminate the agreement
3. When the principal/employer is meted the penalty of disqualification from participation in the
overseas employment program
4. Failure to comply with the undertaking submitted as requirement for accreditation.
#GETTHATBAR2022
FLORES · TARADJI
5. Termination of Contract of Migrant Worker Without Just or Valid Cause
Aspects of Procedural Due Process in the Termination of Employment
1. Written notice of the charges against him. The employer is bound to furnish him 2 notices –
a. Written charge and
b. Written notice of dismissal in case that is the penalty imposed
2. Formal investigation where he can defend himself personally or thru a representative before he
can be dismissed and disembarked from the vessel

Remedies for Termination Without Just or Valid Cause

1. Full Reimbursement of placement fees with interest of 12% per annum
2. Salaries for unexpired portion of his employment contract
!!! Serrano v Gallant and Sameer Overseas Case → Prevailing Rule: The worker gets the entire
salary for the entire unexpired portion regardless of the length of the work contract. The
clause “or 3 months for every year of the unexpired term, whichever is less” was held
unconstitutional because it violates right to equal protection, and right to substantive due
process.
3. Exemplary, moral, and other forms of damages if the acts or omission of the employer is tainted
with bad faith, malice or fraud.

Remedies for Unauthorized Reduction of Salary

The worker shall be entitled to the refund of the deductions made, with interest of 12% per annum, from
the date the deduction was made.

REPATRIATION OF WORKER
• It shall be the primary responsibility of the agency, which recruited or deployed the worker overseas.
The repatriation of remains and transport of the personal belongings of a deceased worker and all
costs attendant thereto shall be borne by the principal and/or the local agency.
• In case of war, epidemic, disaster or calamities, and other similar events, and where the principal or
recruitment agency cannot be identified, the OWWA in coordination with appropriate international
agencies shall take charge of the repatriation.
• If the termination of employment is due solely to the fault of the worker, the principal or agency is
still under obligation to advance the costs of repatriation. This is without prejudice for recovery from
the worker should it be found later that the termination was due solely to the fault of such worker.

6. Ban on Direct Hiring

GR: No employer may hire Filipino workers for overseas employment
EXP: Through authorized agencies.
▪ Public employment agencies
▪ POEA
▪ Private agencies licensed
▪ Other persons authorized by SOLE.
PURPOSE: To avoid exploitation.

Exceptions
Direct hiring is allowed in the following cases:
1. Members of Diplomatic corps
2. International organizations
3. Heads of state and government officials with the rank of at least deputy minister
4. Other employers, as may be allowed by the SOLE
5. Name Hires – individuals able to secure contracts of employment without assistance from
agencies through their own efforts and representations.
NOTE: They still have to go through POEA processes.

#GETTHATBAR2022
FLORES · TARADJI
B. EMPLOYMENT OF NON-RESIDENT ALIENS
Alien Employment Permit (AEP) – required of ↳all aliens working in the country, whether resident or non-resident.
non resident only
-

!!! If it is a non-resident alien, there is an additional requirement: The ER must prove the non-availability
-

of a person in the country competent, able, and willing to perform such services.

Period of Validity of AEP

AEP shall be valid for the position and the company for which it was issued for a period of 1 year unless granted a
longer period vis-à-vis the employment duration, as stated in the employment contract, but in no case shall exceed
3 years.

RULES
• Only 1 AEP shall be issued to a foreign national, at any given time during its validity
• Failure to claim the AEP card within 10 working days shall be ground for revocation
• AEP shall remain valid until it expires for the same position despite the transfer of the company to another
location
• Existing AEP shall remain valid in case the foreign national has been transferred to related companies in
another region.
• In case of change in the foreign national’s position or employer, he shall be required to file a new application
for AEP and surrender the previously issued AEP card for nullification.

Prohibitions Against Transfer of Employment

The prohibitions against transfer of employment after the issuance of an employment permit are the following:
1. Aliens shall not transfer to another job or change his employer without prior approval of the SOLE
2. Non-resident aliens shall not take up employment in violation of the provisions of the Labor Code

NOTES:
• In McBurnie v. Ganzon (2013), the Supreme Court held that the non-existence of an AEP can be taken into
account in determining whether an EER exists. The lack or non-existence of an AEP, in this termination case,
militated against the claim that EER exists.
• One of the important principles in employing aliens was pronounced in International School Alliance v.
Quisumbing (2013), equal pay for equal work. Even if foreign hires have other benefits from local hires, in
terms of the work that they actually do, they should be paid equally because the nature of the work is the
same.
• It must be shown or established that there is no one in the country at all that is competent, able, willing
to perform such services before hiring a non-resident alien.
• In Article 70(c) of the Labor Code, when the services of foreign technicians are utilized by private companies,
these companies are actually required to set up appropriate apprenticeship programs.

#GETTHATBAR2022
FLORES · TARADJI
 III. LABOR STANDARDS
by operation of law
I not by parties agreement
'

1. Employer-Employee Relationship\
not dependent on compensation

EMPLOYER EMPLOYEE
Any person acting in the interest of an employer, Any person in the employ of an employer.
directly or indirectly.

It shall not include any labor organization or any of It shall include any individual whose work has
its officers or agents except when acting as ceased as a result of or in connection with any
employer. current labor dispute, or because of any unfair labor
practice if he has not obtained any other
substantially equivalent and regular employment.

NOTES:
• The employment status of a person is defined and prescribed by law and not by what the parties
say it should be.
• A written contract is not necessary for the creation and validity of the relationship.
• CONDITIONAL EMPLOYMENT → if a contract of employment is subject to a suspensive condition
(e.g., result of a background check), its effectivity shall take place only if and when the event which
constitutes the condition happens or is fulfilled.

2. Test to Determine Existence

FOUR-FOLD TEST TWO-TIERED TEST
HIRING 1. Selection and engagement of the employee As enunciated in Francisco v. NLRC, the two-tiered test
WAGES 2. Payment of wages or salaries is composed of
FIRING 3. Exercise of the power of dismissal 1. The putative employer’s power to control the
CONTROL 4. Exercise of the power to control the employee’s employee with respect to the means and
conduct ↳ LABOR LAW CONTROL methods by which the work is to be
accomplished (control test)
Means & Methods Control Test 2. The underlying economic realities of the
The 4th test, the control test, is the controlling test which activity or relationship (broader economic
means that the employer reality test)
1. controls or
2. has reserved the right to control the CONTROL TEST ECONOMIC REALITY
employee TEST
3. not only as to the result of the work to be done Same concept as The proper standard of
4. but also as to the means and methods by which discussed; whether the economic dependency is
the same is to be accomplished person for whom the whether the worker is
service are performed dependent on the alleged
NOTE: The control test call for the existence of the right reserved the right to employer for his
to control the manner of doing work, not the actual control not only the end continued employment
exercise of the right. to be achieved but also in that line of business
the manner and means to
Critical Elements of Control Test eb used in reaching such
1. Means end
2. Methods
3. Results
The 2-tier test applies where there are several parties
alleged to be employers of one individual

The determinant factor is economic dependency of

such individual. The question to ask is, among the
parties alleged to be the employer, to whom the
individual is economically dependent?

#GETTHATBAR2022
FLORES · TARADJI
GR: Contract of employment can be written or oral.
EXP: For Kasambahay, the contract of employment must be written.

Not every form of control will have the effect of establishing EER. The line should be drawn between:
(1) Rules that merely serve as guidelines towards the achievement of mutually desired results without
dictating the means or methods to be employed in attaining it. These aim only to promote the result. → No
EER exists
(2) Rules that control or fix the methodology and bind or restrict the party hired to the use of such means.
These address both the result and the means used to achieve it → EER exists

CASE LAW
Cases where EER exists Cases where NO EER exists
• Jeepney drivers on boundary basis • Farm workers are not employees of the sugar
• Drivers or helpers of salesmen are employees central
of the company • Once in the playing court, the referees exercise
• Employees of an unregistered association their own independent judgment, based on the
• Street-hired kargador rules of the game, as to when and how a call or
• Workers in move projects decision is to be made. There is freedom of
• “Talents” control.
• Salaried insurance agent, as distinguished from • Healthcare associate → the manner in which
registered agents on commission basis Consulta was to pursue these activities was not
• Tailors, seamstresses, servers, basters, subject to the control of Pamana. She failed to
plantsadoras paid on piece-rate basis show that she had to report for work at definite
• In-house counsel hours.
• Security guards, with respect to the security • Where the contractor PSI was the one that
agency selected, engaged and hired the security
• Control is manifested in the bundy cards guards, the latter cannot claim that PLDT, the
submitted by respondent in evidence. He was entity to which they were detailed to, is their
required to report daily and to observe definite employer.
work hours. • Jurisprudence has recognized another kind of
• Petitioner’s work was continuous for a period of independent contractor: individuals with
four years. This repeated engagement under unique skills and talents that set them apart
contract of hire is indicative of the necessity and from ordinary employees. There is no trilateral
desirability of the petitioner's work in ABC's relationship in this case because the
business. independent contractor himself or herself
• As cameramen/editors and reporters, performs the work for the principal. In other
words, the relationship is bilateral. [e.g. Sonza

I
petitioners were undoubtedly performing
functions necessary and essential to ABS-CBN’s case where by reason of his unique skills, talent
business of broadcasting television and radio and celebrity status, huge talent fees, and lack of
content. Thus, regular employees. control, he was considered an independent
contractor himself.]
✓ • Retainer fee arrangement does not give rise to
Production assistants ,
employment relationship. The employer may
drivers/cameramen ,
engage the services of a physician "on retained
talents
guards are NOI basis, nothing is there in the law which says that
.

security
employees medical practitioners so engaged be actually
They are .

hired as employees,
• Columnist was free to write her column in the
manner and style she was accustomed to and to
use whatever research method she deemed
suitable for her purpose. Thus, the fact that she
was told to submit only 2 or 3 pages of article
and to submit her articles on highly relevant and
significant issues on time, does not mean that
there is control over her. These factors are
inherent by the very nature of the newspaper
business itself.
• Where a person (doctor) who works for another
performs his job more or less at his own
pleasure, in the manner he sees fit, not subject
to definite hours or conditions of work, and is
compensated according to the result of his
efforts and not the amount thereof, no
employer-employee relationship exists.

#GETTHATBAR2022
FLORES · TARADJI
SPECIAL CASES
(1) Working Scholars
No EER between the students and school where:
1. There is written agreement between them under which the former agree to work for the latter in
exchange for the privilege to study free of charge
2. Provided, the students are given real opportunities, including such facilities as may be reasonable
and necessary t o finish their chosen courses under such agreement.

(2) Resident Physicians in Training

There is EER between the resident physicians and the training hospital, unless
1. There is a training agreement between them
2. The training program is duly accredited or approved by the appropriate government agency.

3. Employee vs. Independent Contractor

See discussion on independent contractors in Part VI (A)(2).

A. CONDITIONS OF EMPLOYMENT
1. Covered Employees
In general, in covers all employees (i.e., an EER exists).

Excluded Employees:
(1) Government Employees
(2) Managerial Employees
a. Their primary duty consists of the management of the establishment,
b. They customarily and regularly direct the work of 2 or more employees, and
c. They have the authority to hire or fire employees of lower rank, or their suggestions and
recommendations for hiring, firing and promotion are given particular weight.
(3) Supervisory Employees
a. Includes officers or members of a managerial staff
(4) Field Personnel
a. Non-agricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer, and whose actual hours of work in the field cannot be
determined with reasonable certainty.
(5) Members of the Family of the Employer (who are dependent on him for support)
(6) Domestic Helpers
(7) Persons in the personal service of another
(8) Workers who are paid by results

2. Hours of Work
1. All hours are hours worked regardless of whether such hours are spent in productive labor, so long
as he is required to be in the workplace
2. An employee need not leave the premises of the workplace in order that his rest period shall not be
counted, it being enough that he stops working, may rest completely and may leave his workplace.
3. The time during which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered working time either if:
a. The imminence of the resumption of work requires the employee’s presence at the place of
work or
b. The interval is too brief to be utilized effectively and gainfully in the employee’s own interest.
4. The following are considered compensable hours:
a. All time during which an employee is required to be on duty or to be at the employer’s
premises or to be at a prescribed workplace
b. All time during which an employee is suffered or permitted to work
c. Rest periods of short duration during working hours

a. Normal Hours of Work; Hours Worked

Normal Hours of Work → 8 hours per day, or 40 hours per week.

Exception to 8-Hour Law: Work Hours of Health Personnel

Health Personnel in:
1. Cities and municipalities with a population of at least 1 million or
2. Hospitals and clinics with a bed capacity of at least 100 shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where
the exigencies of the service require that such personnel work for 6 days or 48 hours.

#GETTHATBAR2022
FLORES · TARADJI
b. Meal Periods
GR: Meal periods are not compensable. Meal periods should not be less than 60 mins (1 hour).
EXP:
(1) Where the lunch period or meal time is predominantly spent for the employer’s benefit
(2) Meal periods of 1 hour are deemed compensable when the employee is on continuous
shift
(3) Shortened meal period of less than 1 hour must be compensable (but in no case should
the meal period be less than $2
30 minutes).

Meal period of not less than 20 minutes in the following cases are compensable hours worked:
(1) Where the work is non-manual work in nature or does not involve strenuous physical
exertion
(2) Where the establishment regularly operates not less than 16 hours a day
(3) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer and
(4) Where the work is necessary to prevent serious loss of perishable goods
NOTES:
• Rest periods or coffee breaks running from 5 to 20 minutes shall be considered compensable.
• To shorten mealtime to less than 20 minutes is not allowed. If it is less than 20 minutes, it
becomes only a rest period which is considered working time.

Other Factors Affecting Work Hours

1. Travel Time → travel from home to work and vice versa is not compensable (except when
employee is considered working at that time). Travel time from 1 job site to another is
compensable.
2. Waiting Time → if spent for the employer’s benefit, it is compensable.
3. Lecture, Meetings and Programs → if attendance is sanctioned by the employer, it is
compensable.

Brownouts or Power Interruptions

• Not exceeding 20 minutes → treated as hours worked
• More than 20 minutes → not treated as hours worked if (1) the employees can leave their
work place or (2) they can use the time effectively for their own interest.

c. Night Shift Differential

• Additional pay of at least 10% of hourly rate for work done between 10pm-6am, in
recognition of the fact that there are health implications when working at night
• NSD is computed on a per hour basis.
• If work done between 10pm-6am is OT work, the NSD should be based on the OT rate.

This benefit applies to ALL employees, except

1. Those of the government
2. Those of retail and service establishments regularly employing not more than 5 workers
3. Domestic helpers and persons in the personal service of another
4. Managerial employees
5. Field personnel and other employees whose time and performance is unsupervised by the
employer
6. Those who are engaged on task or contract basis, purely commission basis, or those who
are paid a fixed amount for performing work irrespective of the time consumed

#GETTHATBAR2022
FLORES · TARADJI
 d. Overtime Work
REGULAR DAY Regular wage + at least 25% thereof

“At least” – because it is the minimum provided by law; can be increased in

CBA/ employment contract

HOLIDAY/SPECIAL DAY/ REST Rate of holiday/SD/RD (130%) + at least 30% thereof

DAY
HOLDIAY WHICH FALLS ON A Rest day & Holiday Wage Rate (150%) + at least 30%
REST DAY
OT IS COMPUTED ON A PER HOUR You have to get the hourly rate and apply the applicable OT rate to that
BASIS hourly rate

MONTHLY-PAID EES Formula:

𝑴𝒐𝒏𝒕𝒉𝒍𝒚 𝒔𝒂𝒍𝒂𝒓𝒚 𝒙 𝟏𝟐
𝑻𝒐𝒕𝒂𝒍 𝒏𝒐. 𝒐𝒇 𝒅𝒂𝒚𝒔 𝒄𝒐𝒏𝒔𝒊𝒅𝒆𝒓𝒆𝒅 𝒑𝒂𝒊𝒅

It is permissible for the ER to stipulate that the monthly rate constitutes

payment for all days of the month, including RDs and Holidays, if the rate,
when converted by the increased divisor, would still be the minimum wage

If you use the increased divisor – kasi dibapagtumaas ang divisor, liliit ang
quotient – If the quotient would still be the minimun wage rate applicable,
then the use of that divisor is okay.

UNDERTIME NOT OFFSET BY OT Because it will constitute as an undue deprivation of extra pay.

The right to OT pay cannot be waived. BUT, when the alleged waiver of OT
pay is in consideration of benefits and privileges which may even exceed
the OT pay, the waiver may be permitted.

NOTES:
• Work on a Saturday does not necessarily constitute OT. It becomes OT when the work on a Saturday is in
excess of 40 hours in a calendar week
• Of course, on a daily basis, if you worked in excess of 8 hours, that is already OT.
• Conditions to be entitled to OT pay:
o Actual rendition of OT work
o Submission of sufficient proof that said work was actually performed
o OT work is with the knowledge and consent of the employer
• There is no need of express approval by a superior:
o If the work performed is necessary or that it benefitted the company or
o The employee could not abandon his work at the end of his 8-hr work because there was no
substitute ready to take his place.

COMPULSORY OT WORK [EMERGENCY OT WORK]

1. Country is at war / national or local emergency
2. OT work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due
to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons,
earthquake, epidemic, or other disaster or calamities.
3. Completion/continuation of work started before the 8th hour and is necessary to prevent serious
obstruction or prejudice to the business
4. Urgent work to be performed on machines, installations, or equipment, to avoid serious loss or damage to
the employer
5. Necessary to prevent loss or damage to perishable goods
6. Necessary to avail of favorable weather or environmental conditions

Composite or Package Pay

• This is an all-inclusive salary where the employee’s salary includes the overtime pay (OT pay is built-in).
• This is not illegal per se. There are 2 conditions for validity of such arrangement:
o There is a clear written arrangement knowingly and freely entered by the employee and
o The mathematical result shows that the agreed legal wage rate and the OT pay, computed separately,
are equal to or higher than the separate amounts legally due.

#GETTHATBAR2022
FLORES · TARADJI
SAMPLE COMPUTATION

Daily wage: 800/day

Hourly rate: 100/hr (800 ÷ 8 normal work hours)
To compute OT from 6pm-7pm: Multiply hourly rate to 25%. Don’t multiply 800 to 25%. Use the hourly rate.

Regular Day (100%) Rest Day (130%)

9am-6pm 800 1040
(normal work hrs.) (800*1.30 = 1040)
OT begins
6pm-7pm 125 169

Add 25% (OT rate on regular day) Add 30% (OT rate on rest day)
(100 * 1.25 = 125) (1040/8 hrs = 130 hourly rate)
(130 * 1.30 = 169)
7pm-8pm 125 169
8pm-9pm 125 169
9pm-10pm 125 169
NSD begins
10pm-11pm 137.50 185.90
(Applicable rate x 10% NSD) (125 * 1.10 = 137.5) (169 * 1.10 = 185.90)
11pm-12mn 137.50 185.90
Total 1,575 2,087.80

ANOTHER EXAMPLE
Daily wage: 800/day
Hourly rate: 100/hr (800 ÷ 8 normal work hours)

Regular day (100%) Rest Day (130%)

7pm-10pm 300 390
(regular rate) (7pm-10pm is 3 hrs (300*1.30 = 390)
3 hrs * 100 = 300)
Hourly rate is now 130.
NSD begins
10pm-11pm 110 143
(100 * 1.10 = 110) (130 * 1.10 = 143)
11pm-12mn BREAK BREAK
12mn-1am 110 143
1am-2am 110 143
2am-3am 110 143
3am-4am 110 143
OT begins
4am-5am 137.50 185.90
(applicable rate x OT rate) (110 * 1.25 = 137.50) (143 * 1.30) = 185.90)

5am-6am 137.50 185.90

Total 1,235 1,619.80

#GETTHATBAR2022
FLORES · TARADJI
 e. Compressed Work Week, Flexible Work Arrangement, Alternative Work
Arrangements, Telecommuting Program
DO No. 21-90, DOLE Advisory No. 2-09 and No. 02-04
Flexible Time Schedule → what is important is you are able to work 8 hours a day, regardless of the
time you commenced to work.

Flexible Holiday Schedule → an arrangement where the employee agrees to make the holiday on
another day, without diminution of holiday pay benefits.

Compressed Work Week (CWW)

Under this scheme, the number of workdays is reduced, but the number of work hours in a day is
increased to more than eight (8), but cannot exceed 12, but no overtime pay may be claimed.

Thus, a CWW scheme is an alternative arrangement wherein the normal workweek is reduced to less
than six (6) days but the total number of normal work hours per week shall remain at 48 hours. If
you exceed 12 hours, you can already claim for overtime pay.

Telecommuting Program (RA 11165) p work from home

A work from an alternative workplace with the use of telecommunications and/or computer
technologies. Employer should accord similar treatment in employees working on site and off-site in
terms of standard and benefit, no discrimination if no substantial difference in work.

3. Rest Periods
Every employer shall give his employees a rest period of not less than 24 consecutive hours after every 6
consecutive normal workdays.

Who determines the weekly rest days?

It is the employer, subject to the following:
1. Collective Bargaining Agreement
2. Rules and regulations issued by the Secretary of Labor
3. Employee’s preference based on religious grounds.
• The EE shall make known his preference to the ER in writing at least 7 days before the desired
effectivity of such rest day
• Can be compromised when the choice of the employee as to his rest day based on religious
grounds will inevitably result in serious prejudice or obstruction to the operations of the
undertaking and the ER cannot normally be expected to resort to other remedial measures,
the employer may so schedule the weekly rest day of his choice for at least 2 days in a
month.

Rest Day Schedule

• It is a written notice which must be posted conspicuously in the workplace at least 1 week before it becomes
effective
• Determination of RD is a management prerogative, subject only to the EE’s preference based on religious
grounds.

AUTHORIZED REST DAY WORK:

1. Urgent work to be performed on machines to avoid serious loss/damage to the ER
2. Actual/impending emergencies caused by serious accident, fore, flood, typhoon, earthquake, epidemic or
other disaster/calamity, to prevent loss of life/property, or in case of force majeure or imminent danger to
public safety
3. Abnormal pressure of work due to special circumstances, where the ER cannot ordinarily be expected to
resort to other measures
4. Prevent serious loss of perishable goods
5. Nature of the work is such that the employees have to workcontinuously for 7 days in a week or more, as
in the case of the crewmembers of a vessel to complete a voyage and in other similar cases; and
6. Analogous circumstances
7. Avail of favorable weather or environmental conditions where performance or quality of work is dependent
thereon.

#GETTHATBAR2022
FLORES · TARADJI
REST DAY PREMIUM

Work on scheduled Rest Day Regular wage + 30% of such regular wage
Work on Special Day Regular wage + 30% of such regular wage
Work Special day Regular wage + 50% of such regular wage
and Rest Day
Example: Ninoy Aquino Day which happens to be your scheduled RD
No regular workdays and no regular Additional 30% for work on Sundays and Holidays
RD
(due to nature of work)

NOTES:
• No work, no pay
• If an employee works on his designated rest day, he is entitled to a premium pay

4. Holidays
Holiday Pay
• Payment for regular daily wage for any unworked regular holiday.
• 100% of regular wage on regular holidays

Holiday Pay Premium

• Don’t confuse Holiday Pay with the Additional 100% if you worked on a regular holiday.
• This additional pay is called Holiday Pay Premium.
• This means, if you work on a regular holiday, you will receive:
100% Holiday Pay + 100% Holiday Pay Premium
If you do not work on a regular holiday, you will receive only 100% holiday pay.

Regular Holidays

100% of Regular Wage on (12) REGULAR HOLIDAYS

New Year’s Day (January 1) National Heroes Day (last Monday of August)
Maundy Thursday (movable) Eid’lFitr (movable)
Good Friday (movable) Eid’l Adha (movable)
Araw ng Kagitingan (April 9) Bonifacio Day (November 30)
Labor Day (May 1) Christmas Day (December 25)
Independence Day (June 12) Rizal Day (December 30)

Special Holidays
• Premium Pay for Special Days → Additional 30% of regular wage on special days, if worked.
• If you do not work on a special holiday, you don’t get any pay. But if you worked, you get 130% of your wage.
In other words, no work, no pay.

Additional 30% of Regular Wage on Special Days (Worked)

EDSA Revolution Anniversary (Feb 25 – for schools Feast of the Immaculate Conception (Dec 8)
only)
Ninoy Aquino Day (Aug 21) Last day of the year (Dec 31)
All Saints Day (Nov 1) Special Non-working Days
Special Public Holidays Chinese New year Special National Holidays

Muslim Holidays
• Muslim holidays, except Eid’ Fitr and Eid’l Adha, are observed only in specified areas:
o Amun Jadid (New Year)
o Maulid un-Nabi (Birthday of the Prophet Muhammad)
o Lailatul Isra Wal Miraj (Nocturnal Journey and Ascencion of Prophet Muhammad)
• Muslim employees working outside of the specified areas shall be excused from reporting for work during
the observance of the Muslim holidays recognized by law
• The President may, by proclamation, require employers in the private sector to excuse their Muslim
employees from working for work during Muslim holidays, without reduction in their usual compensation
• San Miguel v. CA (2002) - in designated areas where Muslim Holidays are celebrated or observed, both
Muslims and non-Muslims are excused from going to work, and you get paid holiday pay also during Muslim
holidays.

#GETTHATBAR2022
FLORES · TARADJI
 included
ENA

GUIDE – ON REGULAR HOLIDAYS:

• If regular holiday falls on a regular workday, and
o You don’t work, you get 100% of your daily rate.
▪ Except in retail and service establishments employing less than 10 workers.
o If you worked, you get 100% holiday pay, and you get an additional 100% as holiday pay premium—
that’s why you get 200% for the first 8 hours.
▪ If you worked overtime during a regular holiday, you get additional 30% of the hourly
rate—the hourly rate would be based on the 200%.
▪ If with NSD, use the applicable rate (holiday + OT rate)

• If the regular holiday falls on a rest day, and

o It’s unworked, you get 100% of the daily rate.
o If it is worked, you already get 200% but you add 30% because it is your rest day.
▪ If you work in excess of 8 hours, you determine the hourly rate, then multiply by 1.3, then
multiply by the number of hours work (hourly rate x 1.3 x # of OT hours worked).

GUIDE – ON SPECIAL DAYS:

• If you do not work, there is no pay.
o Except when there is a favorable company policy, practice or CBA granting payment of wages on
special days even if unworked.

• If you worked,
o The first 8 hours, you will get additional 30% of your daily rate.
o If you did OT, you get additional 30% based on the hourly rate.

• If you worked on a special day and it also falls on your rest day
o Your first 8 hours, you will get additional 50% of daily rate.
o If you did OT, it will be additional 30% of the hourly rate.

• If it’s a special working holiday, there’s no additional pay. (e.g., Chinese New Year)

#GETTHATBAR2022
FLORES · TARADJI
HOLIDAY PAY & ABSENCES
RULES ON ABSENCES:
1. If the employee is on leave of absence (LOA) with pay on such holiday - entitled to a holiday pay.
To be entitled to this pay, the day before the holiday he should have been present or on leave with pay.

2. If the employee is on LOA without pay on the day immediately preceding the regular holiday
Not entitled to the holiday pay.
Unless if you worked on such day, in which case you are entitled to holiday pay. (but not the holiday premium)

3. If the day preceding the regular holiday is a non-working day or the employee’s rest day
He is entitled to holiday pay if you worked on the day preceding such non-working or rest day.

200%
it worked .

• Holiday: June 12
o For you to get the 100% holiday pay on June 12, you have to be either present or on LOA with pay on
June 11 (the day before holiday).
▪ If you were present or on leave with pay on June 11, and you worked on June 12, that’s the
time that you get your 200%.
o If you are absent or on LOA without pay on June 11, you do not get holiday pay on June 12.
▪ If you are absent or on leave without pay on June 11, and you worked on June 12, you only
get 100% holiday pay—you do not get the premium.

• Holiday: May 1 (Labor Day) with rest day on April 30

o You have to be present or on leave with pay on April 29 (the day before your rest day) for you to be
entitled to your holiday pay on May 1.
▪ If you worked on May 1, you get 200%

DOUBLE AND SUCCESSIVE HOLIDAYS

RULES:
• Double Holiday
o Unworked, it becomes 200%
o Worked, it becomes 300%
• Successive Holidays
o Both holidays are paid.
o Reckon it on the rules of absences.
• Holiday falls on a Sunday, or on a Rest Day
o Unworked, no extra pay apart from the holiday pay that is required.
o Worked, then you will get the benefits

- -

200%

#GETTHATBAR2022
FLORES · TARADJI
GUIDE:
• Maundy Thursday is April 8, and Good Friday and Bataan Day fell on the same day which is April 9
o You have to be present on April 7, for you to have the unworked holiday pay of 100%, and 200% on
April 9. Why 200%? Because it is a double holiday.
▪ If you worked on Maundy Thursday, you will get 200%, on April 9, you will get 300%.
• If you are absent on April 7, and
o you did not work, you do not get any holiday pay.
o you worked on Maundy Thursday
▪ You will get 100%
Why? You waived your holiday pay premium for being absent/leave without pay on April 7.
But working on April 8, even if you forfeited your holiday pay, that will entitle you to holiday
pay for the next day, which is double holiday—if unworked, you get 200%, but if you worked,
you get 300%.
• If your rest day is on April 7
o You have to be present on April 6 for you to be entitled to holiday pay. Like as if you were present on
April 7.

HOLIDAY PAY OF CERTAIN EMPLOYEES

Private school teachers, faculty • They are not paid for regular holidays during semestral break, but
members of college and you pay them for holidays during the Christmas breaks.
universities • In case of class extensions or extension of the semester, you pay
them regular hourly rate if they worked.

Seasonal Employees • They do not receive holiday pay during off season when they are
not at work.
Seafarers • Any hours of work or duty including hours of watch keeping
performed on designated rest days and holidays shall be paid rest
day or holiday.
Employees paid by results or paid • Holiday pay shall not be less than his average earnings for the last
on piece-rate basis 7 actual working days preceding the regular holiday. Provided, in
no case shall the holiday pay be less than the applicable statutory
minimum wage rate.
Workers without regular working • Entitled to holiday pay if they worked on such holidays.
days

5. Service Charges
Service charges are considered part of the cost of the food, goods, or services ordered by the customers.
o All employees are covered except managerial employees.
o Typically charged by hotels, restaurants, those who largely provide service to the general public.
o !!! Not included in determining whether you are complying with the prescribed minimum wage

NOTE: Service charge is different from a tip which is given voluntarily by the customer. HOWEVER, where a
restaurant or establishment does not collect service charges, but has a practice or policy of monitoring and
pooling tips, the pooled tips should be monitored, accounted for, and distributed in the same manner as
service charges.

Distribution:
o 100% → equally among the covered employees (under RA 11360).
o Distributed once every 2 weeks, twice a month at intervals not exceeding 60 days

#
Abolition and Integration
o In case the service charge is abolished, the share of the covered employees shall be integrated into
their wages.
o The basis of the amount to be integrated shall be the average monthly share of each employee for the
past 12 months immediately preceding the abolition of withdrawal of the charges.

#GETTHATBAR2022
FLORES · TARADJI
 6. 13th Month Pay
COVERAGE
All employers are required to pay all their rank-and-file employees, a 13th month pay not later than
December 24 of every year, provided that they have worked for at least 1 month during a calendar year.

EXEMPTED EMPLOYERS
a. Government and any of its political subdivisions, including GOCCs
b. Employers already paying their employees 13th month pay or more in a calendar year or its
equivalent at the time of issuance of PD 851
• “Its equivalent” – includes Christmas bonus, mid-year bonus, cash bonuses and other
payments amounting to not less than 1/12 of the basic salary but shall not include cash and
stock dividends, COLA and all other allowances regularly enjoyed by the employee
• As to bonuses, determine the purpose.
i. If to reward loyalty, then it cannot be considered as equivalent to 13th month pay.
c. Employers of household helpers and persons in the personal service of another
d. Employers of those who are paid on commission, boundary, or task basis, and those who are paid
a fixed amount for performance of a specific work, irrespective of the time consumed in the
performance thereof.
• Except: PIECE RATE WORKERS are entitled to 13th month pay. This refers to employees who
are paid a standard amount for every piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent in producing the same.

COMPUTATION
1
12
of the total basic salary for the entire year. This is equivalent to a 1-month basic salary.
What is Basic Salary?
All remunerations or earnings paid by an employer to an employee for services rendered.
This shall not include the following:
1. Cost of living allowances (COLA),
2. Profit-sharing payments and
3. All allowances and monetary benefits (e.g., unused VL and sick leave credits, OT premium,
night differential and holiday pay) which are not considered or integrated as part of the
regular or basic salary of the employee. HOWEVER, the above should be included in the
computation if by individual or collective agreement, company practice or policy.

NOTE: If the employee was not able to work for the entire year (e.g., newly hired, or resigned), pay only the
proportionate amount. For example, if worked only for 6 months, then the total salary for 6 months divided by 12
will be the proportionate 13th month pay.

TIME OF PAYMENT
It shall be paid not later than December 24 of every year. An employer, however, may give to his or her employees
one-half (1/2) of the thirteenth-month pay before the opening of the regular school year and the remaining half on
or before December 24 of every year.

13th Month Pay for Certain Types of Employees

• Employees paid by results → entitled
• Those with multiple employers → entitled from all their private employers, regardless of their total
earnings from each or all of their employers
• Private school teachers → entitled, regardless of the number of months they teach or are paid within a
year, if they have rendered service for at least 1 month within a year

NOTES:
• The payment of 13th month pay is a statutory grant, and compliance therewith is mandatory. The benefit is
deemed written in every CBA.
• Food and other material things are not substitute for 13th month pay.
• 13th month pay is a non-strikeable issue

COMMISSION vis-à-vis 13th MONTH PAY

• If commissions are properly considered part of the basic salary → included in computing the 13th month pay
• If not part of basic salary → excluded.
a. Productivity bonuses are generally tied to the productivity or capacity for revenue production. Such
bonuses closely resemble profit-sharing payments. Thus, it must be excluded.
b. Sales commissions which are effectively an integral portion of the basic salary structure of an
employee, shall be included in determining his 13th month pay.

#GETTHATBAR2022
FLORES · TARADJI
CBA vis-à-vis 13th MONTH PAY
• Employers who are already paying their employees a 13th month pay or its equivalent are not covered by the
decree.
• An employer is not obliged to giver a 13th month salary in addition to other bonuses stipulated in a CBA
amounting to more than a month’s pay.

B. WAGES
1. Payment of Wages
Wages
• any 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,
• which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered.
• It includes the fair and reasonable value, as determined by DOLE Secretary, of board, lodging and other
facilities customarily furnished by the employer to the employee.

In Tan v. Lagrama case, Court ruled that payment by result (i.e. on a piece-rate basis) is a method of
compensation and does not define the essence of an EER. It is a method of computing compensation, not a
basis for determining the existence or absence of employer-employee relationship.

WAGE SALARY
Paid for skilled or unskilled manual labor. Paid to white collar workers and denote a higher
grade of employment.
Not subject to execution, garnishment, or Not exempt from execution, garnishment or
attachment, except for debts related to necessities. attachment.

Commissions vs. Productivity Bonuses

• Commissions earned by salesmen form part of their basic salary.
The salesmen’s commissions, comprising a predetermined percentage of the selling price of the
goods sold by each salesman, are properly included in the term basic salary for purposes of
computing the 13th month pay. The salesmen’s commissions are not overtime payments, nor profit-
sharing payments nor any other fringe benefit, but a portion of their salary structure.

• On the other hand, the commissions received by medical representatives are excluded from the term
basic salary.
These were paid to the medical representatives and rank-and-file employees as productivity bonuses
and such bonuses closely resemble profit-sharing payments. Thus, these are not part of wages.

NOTE: The determination on whether a commission is part of wages is largely dependent on whether such
commission is treated as “payment” because of the primary work of the employee. In case of sales agents,
the commissions, in essence, are part of their work—because selling is part of their job; as opposed to med
reps, selling is not really their primary job, thus not included.

RULES ON WAGES
1. TIME OF PAYMENT
At least once every 2 weeks or twice a month

2. PLACE OF PAYMENT
At or near the place of undertaking

Prohibited Place of Payment

Payment cannot be made in a bar, night or day club, drinking establishment, massage clinic, dance
hall, or other similar places or in places where games are played with stakes of money or things
representing money. Except for persons employed in the abovementioned places.

3. MEANS OF PAYMENT
Payment through:
• Checks (there must be bank within 1km radius)
• Banks (there must be bank within 1km radius)
• ATM (bank or ATM facility within 1km radius)

#GETTHATBAR2022
FLORES · TARADJI
 4. TO WHOM PAID
GR: Directly to the workers to whom they are due.
EXP:
1. Payment thru another person
O In case of force majeure, with written authority by the worker
O In cases authorized by law (insurance premiums or union dues)
2. Payment thru heirs of the worker (if worker died)
3. Payment thru member of worker’s family (when authorized in writing by the worker)

2. Prohibitions Regarding Wages

GR: Wage deduction is strictly prohibited.
EXP:
(1) With employee’s consent in writing
1. SSS payments
2. PhilHealth payments
3. Contributions to PAG-IBIG Fund
4. Value of means and other facilities
5. Payments to 3rd persons with employee’s consent and without pecuniary benefit
6. Deduction for unpaid absences
7. Deduction for facilities

(2) Without employee’s consent

1. Worker’s insurance acquired by the employer
2. Union dues where the right to check-off has been recognized by the employer or
authorized in writing by the employee
3. Withholding taxes
4. Cases where the employer is authorized by law or regulations issued by the Secretary of
Labor
5. Debts of the employee to the employer that have become due and demandable

(3) When authorized by law

1. Deposit for loss or breakage
2. In cases where the employee is indebted to the employer, where such indebtedness has
become due and demandable
3. Court judgment, but only for debts incurred for food, shelter, clothing, and medical
attendance

DEPOSITS FOR LOSS OR DAMAGE

GR: No employer shall require his worker to make deposits for the reimbursement of loss of or damage
to material, equipment, or tools supplied by the employer.

EXP: Art 114 Labor Code: When the trade, occupation or business of the employer recognizes or
considers the practice of making deductions or requiring deposits necessary or desirable

REQUISITES FOR VALID DEDUCTION FOR LOSS/DAMAGE

i. The employee concerned is clearly shown to be responsible for the loss or damage
ii. The employee is given reasonable opportunity to show cause why deduction should not be
made
iii. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or
damage
iv. The deduction from the wages of the employee does not exceed 20% of the employee's wages
in a week

OTHER PROVISIONS:
1. You cannot induce the employee to give up his wages by stealth, intimidation threat or by any other means
whatsoever without the worker’s consent.
2. Deduction from the wages of any employee for the benefit of the employer or his representative or
intermediary as consideration of a promise of employment or retention in employment.
3. Refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any
employee who has filed any complaint or instituted any proceeding under this Title or has testified or is
about to testify in such proceedings.
4. Make any statement, report, or record filed or kept pursuant to the provisions of this Code knowing such
statement, report or record to be false in any material respect.

#GETTHATBAR2022
FLORES · TARADJI
5. Laborer’s wages shall be paid in legal currency.
It is prohibited to pay using: promissory notes, vouchers, coupons, tokens, tickets, chits or any other object
other than legal tender.
6. Withholding of wages, except for a debt due, shall not be made by the employer
7. Laborer’s wages shall be a lien on the goods manufactured or the work done
8. Laborer’s wages shall not be subject to execution or attachment, except for debts incurred for food, shelter,
clothing and medical attendance
9. The employer shall neither seize nor retain any tool or other articles belonging to the laborer

3. Facilities vs. Supplements

FACILITIES SUPPLEMENTS
Facilities are necessary items of expense. Supplements are really extra remuneration.

Facilities are mainly for the benefit of the employee Supplements are for the benefit or convenience of
or employee’s family the employer

Facilities are deductible from wage Supplements are not deductible from wage

Facilities are considered part of the wages. Supplements are not part of the wages.
Consequently, these are not included in determining
whether you are complying with the minimum wage
rate.

CASE LAW
The food and lodging, or the electricity and water consumed by the petitioner were not facilities but
supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a
facility. 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 necessary matter in the operations of a small
hotel, such as the private respondent’s hotel.

Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be
deducted without the employer complying first with certain legal requirements. Without satisfying these
requirements, the employer simply cannot deduct the value from the employee’s wages:
1. Proof must be shown that such facilities are customarily furnished by the trade
2. The provision of deductible facilities must be voluntarily accepted in writing by the employee.
3. Facilities must be charged at fair and reasonable value.

NOTE: In determining whether a privilege is a facility or a supplement, the criterion is not so much its kind,
but its purpose.

4. Minimum Wage
Minimum Wage is set by
i. law or
ii. wage order issued by the Regional Tripartite Wages and Productivity Boards (RTWPB's)
iii. the rate which may be fixed by the employer provided the same is not lower than the legally
mandated minimum wage for agricultural or non-agricultural workers.

Criteria for fixing minimum wage:

1. The demand for living wages
2. Wage adjustment vis-à-vis the consumer price index
3. The cost of living and changes or increases therein
4. The needs of workers and their families
5. The need to induce industries to invest in the countryside
6. Improvements in standards of living
7. The prevailing wage levels
8. Fair return of the capital invested and capacity to pay of employers
9. Effects on employment generation and family income and
10. The equitable distribution of income and wealth along the imperatives of economic and social
development.

#GETTHATBAR2022
FLORES · TARADJI
 Two Methods of fixing the minimum wage rate:
FLOOR WAGE METHOD SALARY CAP/CEILING METHOD
Involves the fixing of a determinate amount to be The wage adjustment is to be applied to employees
added to the prevailing statutory minimum wage receiving a certain denominated salary ceiling. In
rates. other words, workers already being paid more
than the existing minimum wage (up to a certain
amount stated in the Wage Order) are also to be
given a wage increase.
NOTE: An “across-the board” minimum wage cannot be granted by the Regional Board. So you have to apply
one of these two methods to avoid an invalidity of the wage order.

WAGE ORDER
Ayn order issued by the Regional Board whenever the conditions in the region so warrant after studying and
investigating and studying all pertinent facts and based on the standards and criteria prescribed by the Labor Code.
• A wage order adjusts the minimum level but not the levels above the minimum. It does not mandate across
the board salary increase.
• A party aggrieved by a Wage Order may appeal to the National Wages and Productivity Commission
(NWPC) not later than 10 days from the date of the publication of the order. The appeal does not stay the
effect of the wage order (unless a surety bond is paid).

MINIMUM WAGE
The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically
feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of
the employees within the framework of the national economic and social development program.

DOUBLE INDEMNITY RULE

In case of violation of the minimum wage rate, apart from fine/imprisonment, the employer shall likewise pay double
the unpaid benefits due the employee.

All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive
i. not less than the prescribed wage rates per eight (8) hours of work a day, or
ii. a proportion thereof for working less than eight (8) hours.

5. Wage Distortion
A situation where an increase in prescribed wage rates results in the
• Elimination or severe contraction of intentional quantitative differences in wage or salary rates
• between and among employee groups in an establishment
• as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of
service or other logical basis of differentiation.

ELEMENTS OF WAGE DISTORTION

1. An existing hierarchy of positions with corresponding salary rates
2. A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one
3. The elimination of the distinction between the two levels
4. The existence of the distortion in the same region of the country

NOTES:
• For distortion to exist, the law does not require an elimination or total abrogation of quantitative wage
or salary difference. A severe contraction thereof is enough.
• Wage distortion involves comparison of jobs located in the same region. The comparison of salaries has
to be intra-region, not inter-region.
• The bank wanted to apply to all the branches across the country the minimum wage ordered in
particular regions—Prubankers Assoc. claimed that this constituted wage distortion. But the
Court said that because minimum wages are fixed on a regional basis because of different socio-
economic conditions, there can be NO wage distortion in this case, because all these four
elements should be met and the 4th element is wanting.
• The distortion that should be rectified refers to distortion arising from compliance with a government
wage order. It does not refer to distortion caused by salary revisions voluntarily initiated by the
employer, unless such a duty exists because of a CBA stipulation or company practice.
• There is no legal requirement that the gap previously existed be restored in precisely the same amount.
Correction of a wage distortion may be done by re-establishing a substantial or significant gap.

#GETTHATBAR2022
FLORES · TARADJI
 CORRECTION OF WAGE DISTORTION:
In an ORGANIZED establishment In an UNORGANIZED establishment
(meaning, there is a SEBA)
1. Employer and union shall negotiate to 1. The employer and employees shall
correct the distortion negotiate to correct the distortion
2. Any dispute arising should be resolved 2. Any dispute shall be settled through
through grievance procedure under CBA National Conciliation and Mediation
3. If dispute remains unresolved, through Board (NCMB)
voluntary arbitration. 3. If remains unresolved after 10 days of
conciliation, it shall be referred to the
NLRC.
4.
NOTE: Any issue involving wage distortion is not a valid ground or a strike or a lockout.

6. Non-Diminution of Benefits
GR: Art. 100: Prohibition against elimination or diminution of benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.

EXP: To correct an error. Otherwise, if the error is left uncorrected for a reasonable period of time, it ripens
into a company policy and employees can demand for it as a matter of right.

Article 100 is a transitory provision. In a series of cases, this is still used even for benefits that are enjoyed
after the enactment of the Labor Code, but if you go back to the wording of this provision, you will see that
this really pertains to benefits that are being enjoyed prior to the enactment of the Labor Code.

Non-Diminution Rule applies only if the benefit is based on an express policy, a written contract, or has
ripened into a practice. If it involves benefits enjoyed after enactment of the Labor Code, the claim for non-
diminution should not be premised on Art. 100 but at least be hinged on either:
1. A contractual obligation, either in the employment contract or in the CBA (for example, the
employer promised a certain salary or subsequent salary increase in the employment contract)
2. A company practice—but this must be proven.

CASE LAW:
Court ruled that there was no illegal diminution of petitioner’s benefits. Considering that petitioner did
not sign an employment contract, he can only anchor his claim on company practice. There is diminution
of benefits when the following are present in connection with company practice:
1. The practice is consistent and deliberate
2. The diminution or discontinuance is done unilaterally by the employer
3. The grant of the benefit is founded on a policy or has ripened into a practice over a long period
4. The practice is not due to error in the construction or application of a doubtful or difficult question
of law. (If it is due to error, it cannot be said to be a company practice)

The grant of service car and local driver to petitioner was based neither on express policy or a written
contract. It may also not be considered company practice. To be considered as a regular company practice, it
must be shown by substantial evidence that the giving of the benefit is done over a long period of time, and that
it has been made consistently and deliberately. Moreover, the benefit must be characterized by regularity
and voluntary and deliberate intent of the employer to grant the benefit over a considerable period
of time. The burden of proving that the benefit has ripened into practice rests in the employee.

As regards the Caltex card, Toyota consistently argued that the free gasoline that may be availed with it is
provided only to Japanese expatriates, and not to local hires like petitioner. There is likewise no showing that
petitioner's entitlement to the Caltex card is based on an express policy, a written contract, or company
practice.

Past Errors
If it is a past error that is being corrected, no vested right may be said to have arisen nor any diminution of
benefit under Art. 100 may be said to have resulted by virtue of the correction.

Benefits initiated thru negotiation between employer and employee (e.g., CBA), can only be eliminated or
diminished bilaterally. A union is not prohibited from offering and agreeing to reduce wages and benefits of
the employees during CBA negotiations.

#GETTHATBAR2022
FLORES · TARADJI
 Bonus
A benefit which is contingent or conditional. It is an amount granted voluntarily to an employee for his
industry and loyalty, which contributed to the success and realization of profits of the employer’s business.

GR: Bonus is not demandable as a matter of right. It is a management prerogative.

EXP:
(1) When it was promised to be given without any conditions imposed for its payment in
which case it is deemed part of the wage
(2) When it has ripened into practice

C. LEAVES

1. Service Incentive Leave

• Employees who are covered by this benefit are entitled to 5 days of SIL with pay
o If they have finished at least 1 year of service.
o NOTE: “at least 1 year of service” - service of not less than 12 months, whether continuous or
broken reckoned from the date that the employee started working including authorized absences
or paid holidays.
• If the workdays or the employment contract is for less than 12 months, it should be considered as 1.
• The nature of SIL is that it is commutable to cash at the end of the year if unused. (except
kasambahay)
• Curious Animal Doctrine → the 3-year prescriptive period for an action to claim SIL pay commences,
not at the end of the year when the employee becomes entitled to the commutation, but from the time
when the employer refuses to pay its monetary equivalent after demand.

SUMMARY OF SPECIFIC EXCLUSIONS FROM BENEFITS:

NOTE:
• With respect to those excluded from the specific benefits, the rules are the same except with respect to retail
or service establishments.
o For NSD, for the establishment to be excluded, the employee should be 5 and below
o For holiday pay, it should be 9 and below
o For SIL, it should be 9 and below.
• Under SIL, if the employer is already giving an equivalent benefit, meaning leaves with pay for at least 5 days,
that will exclude the employer from the coverage of SIL.
• Those employees who are engaged on task or contract-basis or purely commission basis, this phrase in
the rules should be read together with field personnel.
o If they are not field personnel, they are not excluded. Thus, entitled to SIL, NSD, and Holiday Pay.
o Contrast this with 13th month pay –
▪ In 13th month pay, those who are paid on commission basis or boundary basis, whether field
personnel or not, they are not entitled to 13th month pay.

#GETTHATBAR2022
FLORES · TARADJI
2. Expanded Maternity Leave [RA 11210 or The Expanded Maternity Leave Act]
Covered Employees
All covered female employees.
• Regardless of civil status (there is no need to be married for you to be entitled to this benefit)
• Regardless of employment status (part-time or probationary)
• Regardless of the legitimacy of the child (even if the child is illegitimate)

What are included under this Leave?

1. Full-pay for 105 days regardless of whether delivery is normal or through Cesarean Section
2. An additional 15 days with pay if she falls under the definition of solo parent
3. This can further be extended for another 30days without pay. Under this extension, notice to the
employer must be given.
4. In case of miscarriage or emergency termination of pregnancy, maternity leave is only for 60 days
for recovery benefit.

Who are eligible?

Employee who has at least 3 months contribution with SSS in the 12-month period immediately
preceding the semester of childbirth, miscarriage, or emergency termination of pregnancy.
e.g., You give birth in September, you count the one-year period from June, which is immediately preceding
the semester of childbirth (July-August-September). One year before June 2020, you should have at least 3
months contribution with the SSS. Employer must be notified on the availment of the maternity leave.

Conditions for entitlement

1. That the female worker shall have notified her employer of her pregnancy and the probable date of
her childbirth, which notice shall be transmitted to the SSS
2. The full payment shall be advanced by the employer within 30 days from the filing of the maternity
leave application
3. That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the
same period for which daily maternity benefits have been received
4. That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits
advanced to the female worker by the employer
5. That if a female worker should give birth or suffer miscarriage or emergency termination of
pregnancy without the required contributions having been remitted for her by her employer to the
SSS, the employer shall pay to the SSS damages equivalent to the benefits which said female member
would otherwise have been entitled to.

Salary Differential
• SSS maternity benefit is based on average daily salary credit.
• It is possible that the entire 105 days cannot be covered by the SSS benefit alone.
• RA 11210 states that the employer shall cover the difference between the full salary for the 105 or
60 days, as the case may be, and the actual benefit that is received from the SSS.

Allocation of Maternity Leave

• The 105 or 60 days, as the case may be, is a combination of pre- and post-natal care.
• The employee can choose when to avail the maternity leave so long as it will total to 105 or 60 days.
Provided, that the post-natal care must not be less than 60 days.
• 7 leave credits out of the 105 or 60 days may be given or allocated to the father of the child
regardless of if they are married.
o In the absence of the father, to an Alternate Caregiver
1. Relative within 4th degree of consanguinity or
2. A current partner of the woman in the same household, regardless of sexual
orientation, gender identity or expression.
o This is on top of paternity benefits under RA 8187. If you qualify under paternity leave
benefits and there is an allocation of 7-days under RA 11210, it totals to 14 days of leave
o There must be notice to the employer of the father or the alternate caregiver upon the
allocation of maternity leave

NOTE: The 4-time childbirth or miscarriage limit was removed under RA 11210. This means that a female
employee may avail of this benefit regardless of the number of children. However, the 4-time limit is still
subsisting for Paternity Leave under RA 8187.

#GETTHATBAR2022
FLORES · TARADJI
3. Paternity Leave
Covered Employees
Married male employees, regardless of their employment status, whose legal spouse gave birth or
miscarried.
• Only up to the 4th miscarriage or delivery.

Inclusions under Paternity Leave

7 days with pay

Purpose
To enable the father to give support to the wife and/or to help nurse the newborn child

Conditions for entitlement

1. Married to the woman at the time of the delivery
2. They must be cohabiting (except if occupation of one of the spouses requires that they are separated)
3. Application for the benefit within a reasonable period.
o Prior application for leave shall not be required in case of miscarriage.

Non-conversion to Cash
In the even that the paternity leave is not availed of, it shall not be convertible to cash, and shall not be
cumulative.

4. Parental Leave for Solo Parents

Covered Employees
1. Parents who are left alone with the responsibility of parenthood due to:
o spouse’s death
o spouse’s physical or mental incapacity certified by a physician
o legal separation or de facto separation for at least one year
o annulment of marriage
o abandonment for at least one year
o spouse is detained for at least one year
2. Unmarried parent who prefers to keep the child alone
3. Parents who solely provides for the parental care and support of the child
4. Parent who assumed responsibility after the abandonment, death, or prolonged absence of the other
parent
5. Victims of rape or other crimes who decide to keep the child

Purpose
Enable him/her to perform parental responsibilities which require physical presence.

Benefit
7 days full pay

Conditions for entitlement

1. Completed one year of service, continuous or broken
2. Notify employer within a reasonable period
3. Solo-parent ID must be presented.

Termination of Benefit (the only leave benefit which terminates)

When there is a change in status or circumstance where the solo parent is no longer left alone with the
responsibility of parenthood (i.e., marriage).

Non-Conversion to Cash
Unused parental leave is not convertible to cash unless otherwise provided by the CBA.

#GETTHATBAR2022
FLORES · TARADJI
 5. Leave Benefits for Women Workers under RA 9710 and RA 9262
RA 9262 (VAWC) RA 9710 (Magna Carta of Women)

Covered Employees Covered Employees

Wife, former wife or a woman who is dating or has Female employees regardless of age or civil status
sexual relationship with a man whom she has a who need to undergo surgery involving
common child with. gynecological disorders

The leave benefits under this law, generally, does not Gynecological disorders
apply to a child. However, it may be applicable if the Disorders that would require surgical procedures
child is already working under applicable child laws such as dilatation, surgeries involving female
reproductive organs (vagina, cervix, uterus,
fallopian tube, ovaries, breast, pelvic) certified by a
physician

Benefit Benefit
Maximum of 10 days full pay. It may be consumed 2 months full pay based on the gross monthly
continuously or staggered. compensation of the employee

Requirements Requirements
1. There must be a certification from the 1. At least 6 months aggregate service for the
Punong-Barangay, Prosecutor, or Clerk of last 12 months prior to the surgery
Court on the fact that an action under RA 2. The employee must apply for this leave
9262 is pending. with the employer within a reasonable time
2. The use of the 10-day leave is at the option which is provided for under company rules
of the employee or embodied in the CBA
3. It shall be used for the days that she need to 3. Must need to undergo surgery because of
attend to medical and legal concerns such gynecological disorder with
4. Leaves not availed of are non-cumulative certification from a competent physician.
and not convertible to cash.

NOTES:
1. Only the Service Incentive Leave is commutable to cash automatically if they are unused.
2. For Parental Leave or the Solo Parent leave, this is generally not commutable to cash unless the CBA provides
otherwise
3. These are minimum benefits. If there are better benefits under company rules or CBA, the better benefits
shall apply.

#GETTHATBAR2022
FLORES · TARADJI
D. SPECIAL GROUPS OF EMPLOYEES

1. Women
Sec. 2 of the Magna Carta for Women provides that the State condemns discrimination against women in
all its forms and pursues the policy of eliminating discrimination against women in keeping with the
Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).

a. Discrimination
What is discrimination Against women?
Refers to any gender-based distinction, exclusion, or restriction which has the effect or purpose
of impairing or nullifying the recognition, enjoyment, or exercise by women, irrespective of their
marital status, of human rights and fundamental freedoms.

Sec. 22 of the Maga Carta – Right Decent work

The State shall progressively realize and ensure decent work standards for women:
What are specific indicators of decent work?
1. Productive work that is fairly remunerative as family’s wage
2. Security in the workplace (Relate to work sexual harassment)
3. Social protection of the family
4. Better prospects for personal development and social integration
5. Freedom to express concerns
6. Freedom to organize and participate in decision making that affects their lives and
7. Equality of opportunity of treatment for all women and men.

Prohibition against discrimination particular to working women (Art. 133 of the Labor Code)
It is unlawful to discriminate solely on account of sex.
o It is unlawful to pay a lower salary, compared to a male employee for work of equal value. In
line with the principle of equal pay for equal value of work.
o Favoring a male employee for promotion purposes, for opportunity for training, for
scholarship grants, and other work-related benefits

NOTE: Article 133 contains a criminal liability, an employee may file a separate action for damages
and the criminal and civil action may proceed separately.

b. Stipulation Against Marriage

Art. 134 of the Labor Code– The Stipulation against marriage
It is unlawful to:
1. Require non-marriage as a condition of employment
2. It is also unlawful to stipulate termination upon marriage
3. Cannot also discharge or terminate by reason of marriage

CASE LAW:
Philippine Telegraph & Telephone Co. v. NLRC
• This is the case where the woman employee did not disclose, she was actually married,
because she knew of the company policy that married women cannot qualify to work for the
company.
• SC ruled that the policy is void ab initio for violating a law, Art 134 of the Labor Code.
Star Paper Corp. v. Simbol
• This is the case where there was a company policy that employees in the company cannot
develop “friendly relations with each other,” otherwise, one must resign.
• According to the Court, this is an invalid company policy because it does not relate to a bona
fide occupational qualification.
• “Friendly relation” does not only include boyfriend-girlfriend relationship, but it can also
pertain to marriage.

BONA FIDE OCCUPATIONAL QUALIFICATION

If the non-marriage policy can fall under a bona fide occupational qualification, then, that can be a
valid policy.

Duncan Association of Detailment v. Glaxo Wellcome

o What was involved in this case was a prohibition in marrying someone working in a
competitor company.
o SC upheld the validity of the policy, there is a valid reason for it and that the employer can
protect its trade secrets. The marriage is seen as a possibility that trade secrets may be leaked
to a competitor company.
#GETTHATBAR2022
FLORES · TARADJI
 Classification of Certain Women Workers
Any woman who is permitted or suffered to work, with or without compensation, in any night club,
cocktail lounge, massage clinic, bar or similar establishments under the effective control or
supervision of the employer for a substantial period off time as determined by the SOLE, shall be
considered as an employee of such establishment for purposes of labor and social legislation.

Women Night Workers

• There is no longer a prohibition against women night workers
• They are entitled to social security benefits
• They may be granted an extension of maternity leave
NOTE: Maternity leave is for 105 days. Should the woman desire to extend, the
extended leave is without pay
• They may be transferred to day work which must at least be 16 weeks divided before
and after childbirth

c. Prohibited Acts
Art. 137 Labor Code – Prohibited Acts
1. To deny any woman the benefits provided for under the Code
2. To discharge any woman employed by him for the purpose of preventing such woman from
enjoying the maternity leave, facilities and other benefits
3. To discharge such woman employee on account of her pregnancy, or while on leave or in
confinement due to her pregnancy
4. To discharge or refuse the admission of such woman upon returning to her work for fear that
she may be pregnant
5. To discharge any woman or child or any other employee for having filed a complaint or having
testified or being about to testify
6. To require as a condition for a continuation of employment that a woman employee shall not
get married or to stipulate expressly or tacitly that upon getting married, a woman employee
shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.

Discrimination due to Pregnancy

Leus v. St. Scholastica’s College Westgrove
o This is the case where an employee of St. Scholastica, a catholic institution, was being
terminated by reason of pregnancy out of wedlock, claiming that it was an immoral act.
o SC said, when matters involving employment is concerned, it is not religious morality that is
used, but secular morality (those which are reflected by our laws). The Court also noted that
there was no scandal caused to the institution by reason of such pregnancy. Thus, the
termination was invalid.
o Such policy is violative of the Magna Carta for Women. Because such kind of policy is
discriminatory against women.

#GETTHATBAR2022
FLORES · TARADJI
 2. Minors (RA 7610 as amended)
a. Child Labor vs. Working Child
Child work is legal whereas child labor is illegal.

b. Allowed Working Hours and Industries of a Working Child

BELOW 15 YEARS OLD 15 YEARS OLD TO BELOW 18 YEARS OLD
GR: Not employable. Allowed only in non-hazardous or non-deleterious
EXP: undertakings.
• Family Enterprise → when the child works
directly under the sole responsibility of his/her “Hazardous Workplaces”
parents or legal guardian and only members of • Nature of work exposes workers to dangerous
his family are employed. environmental elements, contaminants or work
conditions
Parents must ensure that safety, morals, • Workers are engaged in construction work,
normal development, and education of the child logging, firefighting, mining, etc.
are not affected. • Workers are engaged in manufacture or
handling of explosives
• Entertainment Industry → when the child’s • Exposed to or use of heavy power-driven
employment in public entertainment or machinery
information thru cinema, theater, radio or tv is • Workers use or are exposed to power-driven
essential. tools
①
The executed contract must show the express
agreement of the child, and that his or her
② safety and morals are not affected. There must
also be training for the child (skill acquisition).
③
In either case:
• The child must still be given access to primary
④ and secondary education
• The child cannot be made to work during
⑤ school days
• There must be a Working Child Permit from
⑥ DOLE.

Maximum of 4 hours per day or Maximum of 8 hours per day or 40 hours per week
20 hours per week.
Cannot work from 8PM-6AM Cannot work from 10PM-6AM

Ownership, Use and Administration of Child’s Income

• Income of the child belongs to the child. It is only administered by the parents
• The child’s income is for his or her education and skills acquisition.
• In case the child’s income is used for the collective needs of the family, it shall not constitute 20% of the
child’s income. (You cannot use the child as cash cow)

Trust Fund
• A trust fund is needed if the income of the child is at least 200K
• The trust fund must at least be 30% of the total income of the child
• Upon reaching the age of majority, the child shall have full control of the trust fund

c. Prohibited Acts
WORST FORMS OF CHILD LABOR Slavery
Prostitution or pornography
Illegal activities
Hazardous or harmful to health, safety, morals
HAZARDOUS WORK Degrades the dignity of the child
Exposure to abuse: physical, emotional, sexual
Exposure to physical danger (handling of explosives)
Dangerous work or workplace (underground mining or heights)

Prohibition on Certain Undertakings

No child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic beverages,
intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography.

#GETTHATBAR2022
FLORES · TARADJI
3. Kasambahay (RA 10361)
RA 10361 or the Batas Kasambahay covers only domestics workers WITHIN the country

Who is a Kasambahay?
Any person engaged in domestic work within an employment relationship such as general house help,
nursemaid or “yaya”, cook, gardener, or laundry person.
• It does not include:
o any person who performs domestic work only occasionally or sporadically and not on an
occupational basis.
o children who are under foster family arrangement and are provided access to education and
given an allowance incidental to education (e.g., baon, etc.)

CASE LAW
Apex Mining Case
• This case involves a laundry person who works for the company. The SC ruled that even if the work done
by the employee is similar to a kasambahay, he is treated to be an employee, and not a kasambahay.

Atienza Case
• Family drivers are not covered by the Labor Code or the Kasambahay Law
• This is by virtue of the exclusionary provision in the IRR of the Kasambahay Law
• What applies is the Civil Code

RIGHTS & PRIVILEGES

1. Standard of Treatment
The employer or any member of the household shall not subject a domestic worker or “kasambahay” to
any kind of abuse.

2. Board, Lodging and Medical Attendance

The employer shall provide for the basic necessities of the domestic worker to include at least three (3)
adequate meals a day and humane sleeping arrangements that ensure safety.

3. Guarantee of Privacy
Respect for the privacy of the domestic worker shall be guaranteed at all times.

4. Access to Outside Communication

The employer shall grant the domestic worker access to outside communication during free time.

5. Right to Education and Training

The employer shall afford the domestic worker the opportunity to finish basic education and may allow
access to alternative learning systems and, as far as practicable, higher education or technical and
vocational training.

6. Prohibition Against Privileged Information

All communication and information pertaining to the employer or members of the household shall be
treated as privileged and confidential, and shall not be publicly disclosed by the domestic worker during
and after employment.

EMPLOYMENT CONTRACT
An employment contract shall be executed by and between the domestic worker and the employer before
the commencement of the service in a language or dialect understood by both the domestic worker and the
employer.

NOTE: A kasambahay assigned to work in a commercial, industrial or agricultural enterprise will be entitled
to the applicable minimum wage for agricultural or non-agricultural workers.

MINIMUM WAGE
The minimum wage of domestic workers employed in the NCR shall not be less than P5,000

LEAVE BENEFITS
A domestic worker who has rendered at least 1 year of service shall be entitled to an annual service incentive
leave of 5 days with pay. Any unused portion shall not be cumulative or carried over to the succeeding years.
Unused leaves shall not be convertible to cash. [SIL in general is convertible to cash if unused. BUT, for
kasambahay, the law expressly prohibits conversion]

#GETTHATBAR2022
FLORES · TARADJI
 SOCIAL AND OTHER BENEFITS
A domestic worker who has rendered at least one (1) month of service shall be covered by SSS, PhilHealth
and Pag-IBIG, and shall be entitled to all the benefits in accordance with the law.
• GR: Premium payments shall be shouldered by the employer.
• EXP: If the domestic worker is receiving a wage of P5,000 and above per month, the domestic
worker shall pay the proportionate share in the premium payments or contributions.

REST PERIOD
• DAILY: 8 hours per day.
• WEEKLY: At least 24 consecutive hours of rest in a week.

13th MONTH PAY

The domestic worker is entitled to a 13th month pay as provided for by law.

RESCUE AND REHABILITATION OF ABUSED DOMESTIC WORKERS

Any abused or exploited domestic worker shall be immediately rescued by a municipal or city social welfare
officer or a social welfare officer from the DSWD in coordination with the concerned barangay officials.

GROUNDS FOR TERMINATION OF EER BY DOMESTIC WORKER

Termination initiated by the kasambahay must be for any of the following grounds:
1. Verbal and Emotional abuse
2. Inhumane treatment
3. Commission of a crime by the employer against the kasambahay
4. Violation by the employer of the terms and conditions of the employment contract and other
standards set by law.
5. In case of disease that is prejudicial to the health of the domestic worker, the employer or the other
members of the household or
6. Other cases analogous.

GROUNDS FOR TERMINATION OF EER BY EMPLOYER

Termination initiated by the employer must be for any of the following grounds:
1. Misconduct or willful disobedience of the kasambahay
2. Gross or habitual neglect or inefficiency
3. Fraud and willful breach of the trust reposed by the employer to the kasambahay
4. Commission of crime against the employer
5. Violation by the domestic worker of the terms and conditions of employment as well as other
standards set by law
6. Disease that is prejudicial to the health of the domestic worker or the employer or any member of
the household or
7. Other cases analogous therein.

RELIEF FOR UNJUST TERMINATION

If the domestic worker is unjustly dismissed, the domestic worker shall be paid the compensation already
earned plus the equivalent of 15 days work by way of indemnity.

.bg/-eiiirxDomestiuorHouseh0ldserviie
4%9%97%9
homewniinis
service in employer's If employee pveterminates
.

usually necessary wdesirabkefor

↳ work
themaintenanaeand enjoyment
thereof, and includes ministering
15
days of
tother personal comfort and
earned will be
convenience of members of employer's forfeited Still
.

household .

eptitledlortheoxcess .

#GETTHATBAR2022
FLORES · TARADJI
4. Homeworkers
Homeworkers are those who perform industrial homework for the employer or a contractor or
subcontractor.

INDUSTRIAL HOMEWORK
A system of production under which work for an employer or a contractor or subcontractor is carried out in
the employer’s home. The material may or may not be furnished by the employer, contractor or
subcontractor. It can be decentralized production wherein there is little supervision or regulation over the
work method.

RIGHTS AND BENEFITS OF HOMEWORKERS

1. They should be paid for their services.
2. They are covered by social benefits such as SSS.
If payment is made to the contractor or subcontractor, the homeworker must be paid after the goods or
articles are collected.

Deduction for materials loss or destroyed are generally not allowed, except:
1. The homeworker concerned is clearly shown to be responsible for the loss or damage
2. The employee is given reasonable opportunity to show cause why deductions should not be made
3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages
4. The deduction is made at such rate that the amount deducted does not exceed 20% of the
homeworker’s earnings in a week

PROHIBITIONS FOR HOMEWORKERS

What cannot be produce at home?
1. Explosives and fireworks
2. Drugs and poisons
3. Other articles – the processing of which requires exposure to toxic substances

EMPLOYERS OF HOMEWORKERS
Natural or artificial persons who act for their own account or on behalf of another and can be done directly
or indirectly, or through an agent.
• It includes those persons who deliver goods or articles for processing such as baskets. These
processed goods are later on distributed at the direction of such employer, or
• Those persons who sell goods/articles for processing then re-buys the final product after processing.

Why is it important to determine who are employers of homeworkers?

Because of solidary liability. In case of non-payment for services rendered of homeworkers, the contractor
and the employer can be held solidary liable.

5. Night Workers
Who are night workers?
Night workers are workers who are working at night between 10pm to 6am and their work hours should at
least be 7 consecutive hours for them to fall under the definition of night workers. In the repealed law, women
can now work at nighttime.

Exclusions
Those who work in agriculture, stock raising, maritime transport and naval navigation.

RIGHTS OF NIGHT WORKERS

Health Assessment must be done without charge. It must be done before assignment to night work to
determine fitness to work at night. It can also be done if they experience health problems.

The findings in these health assessments are confidential and not to be used for the employee’s detriment.
The only exception to this is that if the health assessment show that the employee is unfit for night work
then, that has to be disclosed to the employer.

MANDATORY FACILITIES FOR NIGHT WORKERS

1. First aid and emergency facilities
2. Lactation station for mothers
3. Separate toilets for men and women
4. Eating facility with potable water
5. Provision for transportation and ventilated quarters. Exception to this if there are better benefits in
the CBA or if the start and end of work does not fall between 12am to 5am or there is a nearby
accessible public transportation system near the workplace.

#GETTHATBAR2022
FLORES · TARADJI
 TRANSFER TO DAY WORK
It can be done if the employee is unfit for night work and it must be done in good faith and to a position
equivalent or similar to the position of the employee when she was doing a night work.

If the transfer is not practicable or the employee is unable to do night work for less than 6 months, the
employer must grant benefits like those granted to those employees who cannot go to work because of illness
and the same protection for dismissal such as due process.

6. Persons with Disabilities

Who are persons with disabilities?
Persons who are suffering from restrictions or different abilities resulting from either mental, physical or
sensory impairment, to perform an activity in the manner or within the range considered normal for a human
being.

When are persons with disabilities employable?

They are employable when employment is necessary to prevent curtailment of employment opportunities.
It does not create unfair competition in labor costs because the wage rate applicable is lower. It does not
impair or lower work standards.

Equal opportunity for employment

PWDs should not be denied access for suitable employment. They must be given the same terms and
conditions as those able-bodied individuals working in the same establishment.

APPLICABLE WAGE RATES

Article 80 of the LC provides that the applicable minimum wage is 75% of the statutory minimum wage in
case of PWDs.

NOTE: If the PWD can perform work in the same way as those able-bodied individuals even with the
disability, then the PWD will not fall within the ambit of Article 80. (e.g., if a person has disability with his/her
lower extremities yet the work done is clerical in nature like typing). Thus, he/she will be entitled 100% of
the statutory minimum wage. This is what you call a Qualified PWDs.

BENEFITS OF PWDS
20% discount and VAT exemption, educational assistance, SSS, HDMF, Philhealth, and GSIS benefits.

a. Discrimination
PWD Discrimination
1. Limiting, segregating or classifying applicants who are PWDs which affect their work
opportunities.
2. Using standards or tests that effectively screen-out PWDs except if it is a bonafide
occupational qualification.
3. Giving lesser compensation to qualified PWDs based in the case of Bernardo vs. NLRC.
4. Favoring non-PWDs in terms of promotions and training opportunities.
5. Transferring a PWD to a job he/she cannot perform because of his/her disability.
6. Dismissal due to a disability.
7. Failure to administer employment test that accurately reflect the skills or aptitude of a PWD.
8. Discrimination done by labor organization by excluding a PWD from joining a labor
organization.

Age discrimination
It is unlawful to decline an employment application or impose early retirement on the basis of the
worker’s age.

Unlawful acts of employers

1. To print or publish or cause to print or publish a notice of advertisements suggesting
preferences or limitations, or specifications based on age.
2. The employer cannot require declaration of birthdate or age during application. The
employer cannot deny the application solely on the basis of age.
3. Terms and conditions, or other privileges on account of the age.
4. Employers cannot deny promotion or training opportunities based on age.
5. Forcibly laying off on the basis of age.

Imposing an early retirement

Retirement is an agreement between an employer and employee. Thus, the employer cannot forcibly
impose an early retirement.

#GETTHATBAR2022
FLORES · TARADJI
 Exceptions as to age discrimination:
1. If the employer can prove that the age qualification is a bona fide occupational qualification.
2. If the intent is to observe bona fide seniority system, not intended to evade the purpose of
this law. In cases of retrenchment or redundancy, you opt to remove the younger employees
because you want to retain senior employees.
3. If the intent is to observe terms of bona fide voluntary retirement plan that is in accordance
with the law.
4. Any action certified by the SOLE to be in accordance with this law.

b. Incentives for Employers

1. Deduction from gross income → 25% of the salaries of PWDs.
2. Deductions from net taxable income → maximum of 50% of costs for facilities or
improvements for the PWDs such as access ramps or mini elevators.
3. Establishments which are giving discounts to PWDs can claim tax deductions on the net cost
of goods sold or services rendered.

E. SEXUAL HARASSMENT IN THE WORK ENVIRONMENT

1. Anti-Sexual Harassment Act (RA 7877)
Sexual Harassment has a limited definition. It can only be committed in the:
1. Workplace
WET 2. Educational institution or a
AIM
3. Training institution, and
perpetrator must be a person who has authority, influence or moral ascendancy over the offended party.

NOTES:
• It presupposes a superior-subordinate relationship. It can be a supervisor and a boss that commits
the sexual harassment against a lower ranking employee. Or in an educational or training institution,
it can be a teacher committing it against a student, or a coach committing it against an athlete.
• When committed? When the offender demands, request, or required sexual favors from the victim,
whether such is accepted or not.
• What we need to take note is that it results to a hostile, intimidating or an offensive
environment to the victim, or the employee, or the student or the trainee.
• This sexual harassment can be made as a condition for hiring or re-hiring, or better
compensation, or access to better opportunity for trainings or scholarship grants and other
work-related benefits. If it is in the context of a school or training institution, a passing grade
or a better treatment. [but this condition is not indispensable]
• RRA 7877 fails to consider that sexual harassment can also be perpetrated by someone other than
a superior or other than that of a superior-subordinate relationship.
• Prescriptive period is 3 years. %
employer is solidarity liable with the perpetrator
only when the incident is reported the employee
by
2. Safe Spaces Act (RA 11313) =
and
Gender based
-
Gender Based Harassment employer did not do anything
sexual harassment An unwelcomed sexual advance, requests, demands for sexual favors, done verbally, using technology or
in the workplace other forms of communication, and it has a detrimental effect in the workplace or in the training or
educational institution.
• What the Safe Spaces act took out is the subordinate-superior relationship. This element is no longer
needed to prosecute gender-based harassment. ↳ can be committed by anyone No need AIM
.
.

• What the Safe Spaces Act added is gender-based harassments in streets and public places
(restaurants or hotels, even includes private buildings which are commonly accessible to the general
public).
• The gender-based harassment can also be committed online. Which can be done through:
1. invasion of privacy
2. uploading photos or videos without the consent of the person who owns such video or photo
3. unauthorized recording or sharing of the victim’s photos or videos (which also includes false
reporting)

Committee on Decorum and Investigation or CODI

• This is the body which investigates and decides cases related to sexual harassment.
• The head of the CODI must be a woman and not less than half of the members must be women.
• The CODI must investigate and decide cases gender-based harassment or sexual harassment in
general, and it must be decided within 10 days.
• The committee must observe administrative due process.
• Must protect the victim from retaliation.
• Must also guarantee confidentiality of the proceedings.
#GETTHATBAR2022
FLORES · TARADJI
 IV. SOCIAL WELFARE LEGISLATION
A. SSS LAW (RA 11199)
B. GSIS LAW (RA 8291)

Coverage
SSS GSIS
A. COMPULSORY COVERAGE 1. All government EEs receiving
1. EEs and ERs who are not over 60 y/o, including kasambahays compensation who have not
or domestic workers reached the retirement age
2. Those who are self-employed, such as: irrespective of employment
a. Self-employed professionals, partners in partnerships, and status (whether regular or
single proprietors of businesses casual), so long as there is EER.
b. Actors, directors, scriptwriters, news correspondents, who
are not EEs 2. EEs already beyond the
c. Professional athletes, coaches, trainers and jockeys mandatory retirement age of
d. Individual farmers and fisherfolk 65 under the ff. conditions:
3. OFWs who are sea-based and land-based i. elective official, who, at
4. Farmer, fisherman or worker in the informal sector (IS) – an IS the time of election to
member is one whose income is irregular or seasonal and who may public office is below 65
be registered as a self-employed member under the SSS AkanSSSya y.o. and will be more
Program. than 65 y.o. at the end of
his term of office,
B. VOLUNTARY COVERAGE including period/s of his
1. Non-working spouses who are engaged in full-time management re-election to public
of the household office thereafter without
2. OFWs upon termination of their employment overseas interruption.
3. Filipino permanent migrants, including Filipino immigrants, ii. Appointive officials
permanent residents and naturalized citizens of their host who, before reaching
countries the mandatory age of
4. EE under compulsory coverage separated from employment who 65, are appointed to
continues to pay contribution government position by
5. Self-employed member who realizes no income in any given the President and shall
month continues to pay contribution remain in the
government service
C. COVERED BY AGREEMENT beyond 65 y.o.
Employees of foreign governments or international organizations,
including those foreign-owned institutions employing workers in the WHEN MEMBERSHIP TAKES
Philippines or Filipinos working outside the Philippines. These may enter EFFECT:
into an agreement with the Philippines for the inclusion in the SSS. The effective date of membership
shall be the date of the member’s
EXP: When these EEs are already covered in the civil service retirement assumption to duty on his original
system of such country. appointment or election to public
office.
WHEN COVERAGE TAKES EFFECT:
COMPULSORY COVERAGE
• ER – first day of operation
• EE – first day of employment
• Self-employed – upon registration with SSS
• OFWs
o Sea-based – first day of employment
o Land-based – through bilateral social security and labor
agreements BLA
NOTE: Compulsory coverage of land-based OFW NOT
covered under BLAs shall take effect on the applicable
month and year of the first contribution payment.

VOLUNTARY COVERAGE
• Land-based OFWs – on the applicable month and year of the first
contribution payment
• Non-working spouse – on the applicable month and year of the
first contribution payment
• Separated member – on the month the person resumed payment
of contribution

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
Exclusions
SSS GSIS
1. Purely casual employment 1. AFP, PNP, BFP, BJMP
2. Government employees (because they are 2. Contractual EEs (such as those who have
covered by the GSIS) signed contracts of service with the
3. Work in foreign governments or government)
international organizations unless there is an 3. Barangay and Sanggunian EEs not receiving
agreement with PH government for purposes of fixed monthly compensation
SSS coverage 4. EEs with no monthly regular work hours and
4. Temporary EEs (e.g., the principal does not not receiving fixed monthly compensation
have any liability for employees of contractors
since the responsibility belongs to the contractor
as their employer) or those excluded by SSS

NOTE: Previously, there was a provision pertaining to

those who were in foreign vessels (they used to be
excluded in the SSS), but this exclusion has been
removed by RA 11199.

Dependents
NOTE: It is important to define who dependents are to determine the beneficiaries.

1. Legal spouses entitled to support

2. Children, regardless of status
To remain as dependents, the children must be:
a. Unmarried
b. Age: SSS (has not reached 21); GSIS (has not reached the age of majority, i.e. 18)
c. Above specified age, but incapable of supporting himself/herself
3. Parent receiving support from the member

Beneficiaries
SSS GSIS
Primary ① Dependent spouse (until remarriage, in which case the spouse ceases to be a
beneficiary) and dependent children
②
NOTE: Also under SSS Law, a dependent spouse must not have cohabited or
entered into a “live-in” relationship before or after the death of a member.
Secondary Dependent parents Dependent parents and legitimate
descendants (subject to restrictions on
Absent primary and secondary dependent children)
beneficiaries, any person designated
by the member as a secondary
beneficiary
For death benefits – if no
beneficiaries, benefits will be paid to
legal heirs following succession laws

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
Benefits
SSS GSIS
Monthly pension
Retirement benefits
Disability benefits
*need not be work related
Death benefits
*need not be work related
Funeral benefits
Unemployment benefits

Under the SSS:

This includes unemployment insurance or involuntary separation benefits. This can be availed of as for
instance, when there are authorized causes for termination, such as retrenchment or redundancy.

Maternity benefits (amended by RA 11210, the Survivorship benefits

Expanded Maternity Leave Act) to 105 days.
*Maternity leave shall be granted to qualified female
workers in every instance of pregnancy, miscarriage,
or emergency termination of pregnancy regardless of
frequency

NOTE: Under R.A. 8187 (Paternity Leave Act), male

private and government employees in the
Philippines are entitled to seven days of paternity
leave with full pay for the first 4 deliveries of his
legitimate spouse with whom he is cohabiting.
Dependent’s pension Life insurance benefits
*may be compulsory or optional
Compulsory for all employees including members of
the Judiciary and Constitutional Commissioners, but
excluding members of the AFP, PNP, BFP and BJMP
Sickness benefits Loan grants
*need not be work related
Separation benefits

CASE LAW:
• HAVERIA, V. SOCIAL SECURITY SYSTEM, ET.AL, 2018 (CAGUIOA, J.):
Haveria was reported by the SSSEA as an employee, and he claims coverage as a compulsory member of the
SSS. The SSSEA, a labor organization, cannot be considered an employer under the law. The Labor
Code expressly excludes labor organizations from the definition of an employer, except when they directly
hire employees to render services for the union or association. Aside from his bare allegation that he was
an employee of the SSSEA, Haveria did not present any other fact to substantiate his claim of employment
with the SSSEA.

• PEOPLE V. TALAUE, 2021

GSIS Law penalizes the heads of the offices of the national government, its political subdivisions, branches,
agencies and instrumentalities and its personnel who are involved in the collection of premium
contributions, loan amortization and other accounts due the GSIS, who fail, refuse, or delay the payment,
turnover, or remittance to GSIS within 30 days from the time the same have become due and demandable.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
C. LIMITED PORTABILITY LAW
PURPOSE
To enable those EEs who transfer from the private to the public sector or from the public to the private sector, to
combine their years of service or to have their years of services credited to either system and satisfy the
required years of service to avail of such benefits.

COVERAGE
Worker-members of the GSIS and/or SSS who transfer from one sector to another and who wish to retain their
membership in both systems

ILLUSTRATION:
For death benefits, there is a need for 36 months’ worth of contribution prior to the death of the member. If
the transfer was just recent, the number of monthly contributions in the other system will be taken into
account in counting whether the 36 months of contribution was satisfied prior to the death to avail of the
death benefits.

BENEFITS POODS
1. Old-age benefit
2. Disability benefit
3. Survivorship benefit
4. PhilHealth or Medicare benefit, provided that the member shall claim said benefit from the system where he
was last a member
5. Other benefits common to both systems that may be availed of through totalization

PORTABILITY
• transfer of funds for the account and benefit of a worker who transfers from one system to the other.

TOTALIZATION
• process of adding up the periods of creditable services or contributions under each system for purposes of
eligibility and computation of benefits.
• The computation would be based on the contributions made to both systems, which shall provide the
maximum benefits which otherwise would not have been be available because the minimum number
considered was not met. In no case shall the contribution be lost or forfeited.

WHEN APPLICABLE
1. Worker does not qualify for any benefits from both systems.
2. Worker in the public sector is not qualified for any benefits in the GSIS; or
3. Worker in the public sector is not qualified for any benefits in the SSS.

NOTES:
• If a worker qualifies for benefits in both systems, totalization shall not apply because worker may avail
of the benefits without need of totalization.

• Overlapping periods in both systems shall be credited only once for purposes of totalization.

ILLUSTRATION:
EE who works in the government also teaches in a private educational institution. Because there is an
EER, she will be covered by both SSS and GSIS. During those periods, she has contributions under both
SSS and GSIS.

When, for example, there are 3 years where she worked in both public and private sectors – the
contributions during said 3-year period won’t be counted twice for purposes of totalization. Hence, if
there are 36 months, it will not be 36mos x 2. The overlapping periods of creditable services will only be
counted once, so 36 months only.

• !!! If after totalization the worker-member still does not qualify for any benefit listed above, the member
will then get whatever benefits correspond to his/her contributions in either or both systems.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
D. DISABILITY AND DEATH BENEFITS
Labor Code
Under the Labor Code, employees' compensation (EC) benefits are granted to employees or their dependents for
work- connected disability or death, or those resulting from accidents arising out of and in the course of
employment.

DISABILITY BENEFITS
Disability does not refer to the injury nor to the pain and suffering it has occasioned, but to the loss and impairment
of earning capacity. There is disability when there is a loss or diminution of earning power because of actual
absence from work due to injury or illness arising out of and in the course of employment.

Type of Disability Amount of Benefit Period of Entitlement

Temporary Total Disability equivalent of ninety 90% of the Average entitled to the benefit from the day
TTD Salary Credit (ASC), provided: of the start of the disability
1. The daily income benefit is not less
if as a result of the injury or than 10 pesos nor more than 90 It shall not be paid longer than 120
sickness, the employee is pesos, nor paid for a continuous consecutive days except where such
unable to perform any gainful period longer than 120 days. injury or sickness still requires
occupation for a continuous 2. The monthly income benefit shall medical attendance beyond 120
period not exceeding 120 be suspended if the employee fails days but not to exceed 240 days from
days to submit a monthly medical report onset of disability.
certified by its attending physician

Permanent Total Disability amount equivalent to the monthly income entitled to receive benefits monthly
PTD benefit, plus 10% thereof for each for 5 years
dependent child, but not exceeding 5,
if as a result of the injury or beginning with the youngest and without HOWEVER, the benefits may be
sickness the employee is substitution: Provided, that the monthly suspended if the employee:
unable to perform any gainful income benefit shall be the new amount of 1. is gainfully employed, or
occupation for a continuous the monthly benefit for all covered 2. recovers from his permanent
period exceeding 120 days pensioners. total disability, or
3. fails to present himself for
Instances considered to be examination at least once a
a permanent total year.
disability:
1. Temporary total
disability lasting
continuously for
more than 120 days
except as otherwise
provided for in the
Rules
2. Complete loss of
sight of both eyes
3. Loss of two limbs at
or above the ankle
or wrist
4. Permanent
complete paralysis
of two limbs
5. Brain injury
resulting in incurable
imbecility or insanity
and
6. Such cases as
determined by the
Medical Director of
the System and
approved by the
Commission

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
Permanent Partial based upon the degree of disability, as well as the lost body part.
Disability PPD
The body parts and the corresponding period of equivalent disability are:
if as a result of the injury or Body Part Months
One thumb 10
sickness the employee suffers One index finger 8
a permanent partial loss of One middle finger 6
the use of any part of his One ring finger 5
One little finger 3
body One big toe 6
One toe 3
One arm 50
One hand 39
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 50
Sight of one eye 25

In case of permanent disability less than the total loss of the member specified,
the same monthly income benefit shall be paid for a portion of the period
established for the total loss of the member in accordance with the proportion that
the partial loss bears to the total loss. If the result is a decimal fraction, the same
shall be rounded off to the next higher integer.

In cases of simultaneous loss of more than one member or a part thereof as

specified, the same monthly income benefit shall be paid for a period equivalent
to the sum of the periods established for the loss of the member or the part
thereof. If the result is a decimal fraction, the same shall be rounded off to the next
higher integer.

In cases of injuries or illnesses resulting in a permanent partial disability not

listed, the benefit shall be an income benefit equivalent to the percentage of the
permanent loss of the capacity to work.

NOTES:
1. Loss of a wrist = loss of the hand
2. Loss of an elbow = loss of the arm
3. Loss of an ankle = loss of a foot,
4. Loss of a knee = loss of the leg
5. Loss of more than one joint = loss of one-half of the whole finger or toe:
provided, that such a loss shall be either the functional loss of the use or
physical loss of the member

Distinguished from Permanent Total Disability

While PTD invariably results in an employee’s loss of work or inability to
perform his usual work, PPD on the other hand, occurs when an employee
loses the use of any particular anatomical part of his body which disables him
to continue with his former work.

The test of whether or not an employee suffers from PTD is a showing of the
capacity of the employee to continue performing his work notwithstanding the
disability he incurred. It does not mean an absolute helplessness but rather an
incapacity to perform gainful work which is expected to be permanent.

Conversion from PPD to PTD

It is possible that an injury which at first was considered partial disability may
become totally and permanently disabled from the same cause.

When Salary is Higher After the Injury

In a case where the employee filed a claim for PPD but the ECC denied the claim
because in fact his salary was higher than before, Court ruled that the fact of higher
earning capacity fact would not in itself necessarily affect the laborer’s claim. An
injured laborer’s incapacity for work is not to be measured solely by the wages he
receives, or his earning, after the injury, since the amount of such wages or
earnings may be affected by various extraneous matters or factors.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
DEATH BENEFITS
• Death is compensable only when it results from a work-related injury or sickness. If it did not occur
while in the performance of his duties, the claimant cannot be extended the death benefits under the law.

WHAT CONSTITUTES DEATH BENEFITS UNDER THE LABOR CODE

The System shall pay the primary beneficiaries upon the death of the covered employee an amount equivalent to his
monthly income, plus 10% for each dependent child, but not exceeding 5, beginning with the youngest and
without substitution provided that if he has no primary beneficiary, the System shall pay to his secondary
beneficiaries the monthly income benefit but not to exceed 60 months. The minimum death benefit shall not be
less than P15,000.00.

CONDITIONS TO ENTITLEMENT
The beneficiaries of a deceased employee shall be entitled to an income benefit if all of the following are satisfied:
1. The employee 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 which caused his death.
His employer shall be liable for the benefit if such death occurred before the employee is duly reported for
coverage to the System.

NOTES: If the employee has been receiving monthly income benefit for permanent total disability at the time of his
death, the surviving spouse must show that the marriage has been validly subsisting at the time of his disability. In
addition, the cause of death must be a complication or natural consequence of the compensated Permanent Total
Disability.

Primary Beneficiaries Secondary Beneficiaries

PERIOD OF ENTITLEMENT
The income benefit shall be paid beginning at the month The income benefit shall be 60 times the monthly
of death and shall continue to be paid for as long as the income benefit of a primary beneficiary which in no
beneficiaries are entitled thereto. case be less than P 15,000.00, which shall likewise be
paid in monthly pension.

MANNER OF PAYMENT
Death benefits are paid in the form of cash monthly For not more than 60 months to the secondary
pension for life to the primary beneficiaries, beneficiaries in case there are no primary beneficiaries
guaranteed for 5 years
In no case shall the total benefit be less than P15,000.
In no case shall the total benefit be less than P15,000.

AMOUNT OF BENEFITS
Monthly income benefit shall be equivalent to the Income benefit is payable in monthly pension which
monthly income benefit for PTD, which shall be shall not exceed the period of 60 months and the
guaranteed for five years, increased by ten percent for aggregate income benefit shall not be less than
each dependent child but not exceeding 5, beginning P15,000.00
with the youngest and without substitution.

The aggregate monthly benefit payable in the case of the

GSIS shall in no case exceed the monthly wage or salary
actually received by the employee at the time of his
death. The minimum income benefit shall not be less
than P15,000.00.

DEATH BENEFITS AFTER RETIREMENT ARE ALLOWED

Generally, the term “covered employees” refers to an employee who, at the time of his death, is still covered by the
GSIS. However, the IRR of the Employees’ Compensation Commission allow death benefits to those retired
employees. A claim for benefit for such death cannot be defeated by the mere fact of separation from service.

DEATH OF A PERSON RECEIVING PTD BENEFITS

Death benefit shall be paid to the beneficiaries if an employee, while receiving permanent total disability benefit,
dies.

!!! PRESCRIPTION OF CLAIMS

No claim for compensation shall be given due course unless said claim is filed with the System within 3 years from
the time the cause of action accrued.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
Philippine Overseas Employment Administration-Standard Employment Contract
COVERAGE
Rules provided under POEA-SEC cover all Filipino seafarers on board oceangoing ships
• NOTE: The employment contract between the employer and the seafarer shall commence upon the actual
departure of the seafarer from the PH airport or seaport in the point of hire and with the POEA approved
contract. It shall be effective until the seafarer's date of arrival at the point of hire upon termination of
his employment.
• As part of a seafarer's deployment for overseas work, he and the vessel owner or its representative local
manning agency are required to execute the POEA-SEC. Containing the standard terms and conditions of
seafarers' employment, the POEA-SEC is deemed included in their contracts of employment in foreign
ocean-going vessels
• Any amendment to the employment contract must have approval of the POEA, except when the
amendment is beneficial to the employee. Deductions or diminution of benefits in the side agreement is
invalid, unless subsequently approved by POEA.
• !!! The employer shall be liable when the seafarer suffers work-related injury or illness during the term
of his contract
REQUISITES
1. The seafarer's work must involve the risks described under Sec.32-A of POEA MC 10-2010
2. The disease was contracted as a result of-the seafarer's exposure to the described risks.
3. The disease was contracted within a period of exposure and under such other factors
necessary to contract it; and
4. There was no notorious negligence on the part of the seafarer.

WHEN COMPENSATION FOR DISABILITY OR DEATH NOT COMPENSABLE

No compensation and benefits shall be payable in respect of any injury, incapacity, disability, or death of the seafarer
resulting from his willful or criminal act or intentional breach of his duties, provided, however, that the employer
can prove that such injury, incapacity, disability or death is directly attributable to the seafarer

!!! LIABILITIES OF THE ER WHEN THE SEAFARER SUFFERS WORK-RELATED INJURY:

1. shall continue to pay the seafarer his wages during the time he is on board of the ship;
2. shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as well as
board and lodging until the seafarer is declared fit to work or repatriated;
3. seafarer shall also receive sickness allowance from his employer in the amount equivalent to his basic wage;
4. In case the seafarer is disembarked from the ship for medical reasons, the employer shall bear the full
repatriation in the event the seafarer is declared fit for repatriation or fit to work but the employer is unable
to find employment for the seafarer on board his former ship or another ship of the employer; and
5. In case of permanent total or partial disability of the seafarer caused by either injury or illness, the
seafarer shall be compensated in accordance with the schedule of benefits enumerated in Sec. 32-A (POEA
Memorandum Circular No. 10, Series of 2010)

Examples: The following diseases are considered as occupational when contracted under working conditions
involving the risks described herein (FIRST TYPE OF ILLNESS)–
OCCUPATIONAL DISEASE NATURE OF EMPLOYMENT
Dermatitis due to irritants and sensitizers use or handling of chemical agents which are skin
irritants and sensitizers
Cataract prolonged exposure to UV light or welding, wind
abrasion and sea breeze
Bronchial Asthma All of the following conditions must be met:
i. there is no evidence or history of asthma before
employment
ii. the allergen is present in the working conditions
iii. sensitivity test to allergens in the working
environment should yield positive results
iv. a provocative test should show positive results
IMPORTANT NOTE: Seafarer must prove both occupational disease and relation to nature of employment.

In case a seafarer seeks disability benefits not listed as an occupational disease under Section 32-A (SECOND
TYPE OF ILLNESS), the seafarer must prove the reasonable linkage between his disease and his work. The seafarer
must prove that his work may have contributed to the establishment or, at the very least, aggravation of any pre-
existing condition. To prove this reasonable linkage, it is imperative that the seafarer still must prove the following:
(i) the risks involved in his work
(ii) his illness was contracted as a result of his exposure to the risks
(iii) the disease was contracted within a period of exposure and under such other factors necessary to
contract it and
(iv) he was not notoriously negligent.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
WHAT CONSTITUTES DEATH BENEFITS AND COMPENSATION
In case of work-related death of the seafarer during the term of his contract, the employer shall pay his beneficiaries
the Philippine currency equivalent to the amount of US$50,000 and an additional amount of US$7,000 to each child
under the age of 21 but not exceeding 4 children, at the exchange rate prevailing during the time of payment.

Where the death is caused by warlike activity while sailing within a declared war zone or war risk, the compensation
shall be doubled.

!!! NOTE: The benefits mentioned shall be separate and distinct from and will be in addition to whatever benefit
which the seafarer is entitled under Philippine law.
e.g., Seafarer can claim both the benefits under POEA-SEC and those under SSS, ECC and PAG-IBIG.

SEAFARER KNOWINGLY CONCEALS PRE-EXISTING ILLNESS OR CONDITION

Is liable for misrepresentation and shall be disqualified from any compensation or benefit; this is likewise a just
cause for termination of employment and imposition of proper administrative sanctions

!!! RULES REGARDING COMPANY-DESIGNATED PHYSICIAN IN THE ISSUANCE OF A FINAL MEDICAL

ASSESSMENT:
1. Company designated physician must issue, a final medical assessment on the seafarer's disability grading
within a period of 120 days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the period of 120 days, without any
justifiable reason, then the seafarer's disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the period of 120 days with a
sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative),
then the period of diagnosis and treatment shall be extended to 240 days.
o The employer has the burden to prove that the company-designated physician has sufficient
justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within the extended period of 240 days,
then the seafarer's disability becomes permanent and total, regardless of any justification

!!! THIRD-DOCTOR OPINION RULE

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between
the Employer and the seafarer. The third doctor's decision shall be final and binding on both parties.

PRESCRIPTIVE PERIOD
All claims from this contract shall be made within 3 years from the date the cause of action arises.

CASE LAW (Chair’s Cases):

• MENEZ VS STATUS MARINE CORPORATION, 2018 (CAGUIOA, J.):
In order for the beneficiaries of a seafarer to be entitled to death compensation from the employer, it
must be proven that the death of the seafarer (1) is work-related; and (2) occurred during the term of
his contract. Here, the death of the husband occurred 2 months after the expiration of his contract, thus,
there was a failure to comply with the requirement that the death should have occurred during
the term of the contract. The only exception to this rule is when the death occurs after the employee's
medical repatriation, which is absent in this case as her husband was repatriated because of the
expiration of his contract.

• MALICDEM VS ASIA BULK TRANSPORT PHILS INC., 2019 (CAGUIOA, J.):

!!! POEA-SEC commands that the employee seeking disability benefits submit himself to post-
employment medical examination by a company-designated physician within 3 working days from his
repatriation. Non- submission to the company by the seafarer for post-employment medical
examination within 3 working days from repatriation results in the forfeiture of his
compensation and disability claims. Here, Malicdem cannot be awarded the total and permanent
disability benefits that he seeks.

• JEBSENS MARITIME, INC. V. MIRASOL, 2019 (CAGUIOA, J.):

A final, conclusive, and definite medical assessment must clearly state whether the seafarer is fit to work
or the exact disability rating, or whether such illness is work-related, and without any further
condition or treatment. It should no longer require any further action on the part of the company-
designated physician and it is issued by the company-designated physician after he or she has
exhausted all possible treatment options within the periods allowed by law. Here, the company-
designated physicians' failure to issue a final and definite assessment within the 120-day period without
any justification makes Mirasol entitled to permanent and total disability benefits. It was no longer
necessary for Mirasol to present evidence that his illness is work-related and compensable.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
• JULLEZA VS ORIENT LINE PHILIPPINES, 2019 (CAGUIOA, J.):
Julleza failed to comply with the conflict-resolution procedure under the CBA. Thus, while Julleza had the
right to seek a second and even a third opinion, the final determination of whose decision must
prevail must be done in accordance with an agreed procedure. It is the duty of the seafarer to signify
his intent to refer the conflict between the findings of the company-designated physician and that of his
own doctor to a third doctor. In this case, it is undisputed that Julleza suffered from lumbar spondylosis.
But the company-designated and the independent physicians arrived at different findings. Julleza did not
show any proof that he sent the medical report to respondents and signified to respondents that he would
like to refer the conflicting medical findings to a third doctor. Absent compliance with the conflict-
resolution procedure, the findings of the company-designated physician should prevail.

• MARITIME CORP., ET AL. V. SALENGA, 2020 (CAGUIOA, J.):

After his arrival in the Philippines, Salenga executed a Debriefing Sheet stating, among others, that he
had no complaints regarding the vessel and offered no suggestions to improve the working
conditions therein, and a Clearance Form certifying that he had worked inside the ship under
normal conditions and that he was declared physically fit thereafter. Given these admissions, his
illnesses cannot therefore be considered as illnesses that arose during the term of his contract.

• ABELLA VS. ABOSTA, 2021 (CAGUIOA, J.):

A verbal notice of the seafarer’s disability rating is not enough. The seafarer must be furnished a copy
of the final medical assessment issued by the company-designated physician in order to afford the
seafarer the opportunity to evaluate the same and decide whether he agrees with it or not. And if he does
not agree with it, he ought to bring the same to an independent doctor who can only get a better
understanding of the opinion of the company-designated physician through a copy of the latter’s medical
assessment.

• UNITED PHILIPPINE LINES V. RAMOS, 2021 (CAGUIOA, J.):

The company-designated physician is mandated to issue a medical certificate, which should be
personally received by the seafarer, or, if not practicable, sent to him/her by any other means
sanctioned by present rules. In this case, Ramos, was not provided with the assessment of the company
designated physician to contest. For failure to inform Ramos of his medical assessment within the
prescribed period, his disability grading is, by operation of law, total and permanent.

• PACIFIC OCEAN MANNING VS. CASTILLO, 2021 (CAGUIOA, J.):

The third doctor's medical report is final and conclusive on the parties. In this case, the medical report
was a final and conclusive assessment of Castillo's condition even if his treatment continued even after its
issuance. The continuation of treatment after the seafarer is found suffering from disability, does not
automatically negate the finality of the company-designated physician's diagnoses as there may be
illnesses, injuries, or other health conditions which require regular treatment, follow-up consultations,
rehabilitation, and maintenance medication.

!!! POEA-SEC expressly states that the disability shall be based exclusively on the disability ratings
under Section 32 and shall not be measured or determined by the number of days a seafarer is under
treatment or the number of days in which sickness allowance is paid.

In this case, POEA-SEC prevails over the CBA because Castillo's injury was not the result of an accident.
Section 26.1 of their CBA provides that the disability compensation scheme applies only when the
seafarer's disability or injury is caused by an accident. The cause of Castillo's disability, described
broadly as "bumping of the knee on the stair" cannot be considered an accident. Without any clarificatory
details as to how the incident occurred or events that transpired before and after the incident, the Court
cannot conclude that the same was an accident.

• MAGSAYSAY V. BUICO, 2019 (CAGUIOA, J.):

If a seafarer intends to contest the assessment by the company-designated physician, he has the duty to
observe the third doctor provision under the 2010 POEA-SEC. The failure by Buico to comply with the
requirement of referral to a third doctor is tantamount to a violation of terms under the POEA-
SEC. Consequently, without a binding third-party opinion, the final, accurate and precise findings of the
company-designated physician prevail over the conclusion of the seafarer's personal doctor.

• MANGUBAT, JR. VS DALISAY SHIPPING CORP., 2019 (CAGUIOA, J. ):

The standards to determine the validity of the assessment should be the same for the company-
designated physician, seafarer's physician, and the third doctor. Thus, in order for the seafarer to dispute
the assessment of the company-designated physician, the assessment of the seafarer's doctor should
state the seafarer's fitness to work or the disability rating. Given the lack of a valid and definite
assessment from the seafarer's doctor, the definite and valid assessment of the company-designated
physician stands and is binding on the seafarer.
#GETTHATBAR2022
FLORES · PEREZ · TARADJI
 V. LABOR RELATIONS
A. RIGHT TO SELF-ORGANIZATION
The 1987 Philippine Constitution protects the right to self-organization under Article XIII, Sec. 3. The right to self-
organization is protected. It should be guaranteed by the State including collective bargaining and
negotiations and peaceful concerted activities, including the right to strike in accordance with law.

CASE LAW:
S.S. Ventures International v. S.S. Ventures Labor Union (2008)
This case talks about the nature of fraud and misrepresentation that will constitute as grounds for cancellation of
union registration. Tthe ground for cancellation of union registration according to the Court must be of such nature
that the fraud and misrepresentation must be grave and compelling as to vitiate the consent of the members—
so this highlights the idea that the right to self-organization is actually a constitutionally protected right.

NUWHRAIN-Manila Pavilion Hotel Chapter v. Secretary (2009)

This case talks about the probationary employees not being allowed to vote in the certification election because it is
included in the CBA, but according to the Court, you cannot preclude probationary employees from voting in
certification elections because this is part and parcel of the right to self-organization and a CBA, even if it reflects the
will of the parties being signed by both parties, could not override the right to self-organization which is
constitutionally protected.

CONTENT AND PURPOSE OF THE RIGHT TO SELF-ORGANIZATION

The right to self-organization includes forming, joining or assisting labor organizations of their own choosing for the
purpose of:
(1) collective bargaining and
(2) mutual aid or protection.
The two purposes listed in the Labor Code highlight the two kinds of labor organizations: a union and a worker’s
association.

1. Who may join, form or assist labor organizations or workers’ associations

WORKER’S ASSOCIATIONS
Who can join?
• Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any
definite employers.
▪ To join a worker’s association, EER is not necessary.
▪ Samahan ng Manggagawa sa Hanjin Shipyard v. BLR
▪ The choice of the type of labor organizations to be formed is with the workers.
▪ The workers association included members who are not employees of Hanjin Shipyard. They were
either contracted out so there was no EER. But according to the Supreme Court, the choice as to what
kind of organization to form is with the workers. If they choose to form a worker’s association the
employer cannot interfere with that. But of course, if they chose to form a worker’s association,
there will be limitations—particularly they cannot engage in collective bargaining and sign a
collective bargaining agreement with the employer. “Mutual aid and protection” is actually
broad enough to cover anything that is short of collective bargaining.

LABOR UNIONS
Who can join?
• Generally, ALL employees.
whether
regular probationary etc
,
,
.

• For labor unions, EER is necessary.

• Why? Because all the things that a labor union can do, for example, engage in collective bargaining and sign
the collective bargaining agreement, file for an unfair labor practice case, conduct a strike—all these
presuppose an employer employee relationship.
• Co-mingling of employees is not allowed, but it is not a ground for cancellation of union registration.
#GETTHATBAR2022
FLORES · TARADJI
2. Restrictions
Supervisory Employees Alien Employees Government
Employees
They can organize a labor For an alien employee to exercise As found in the
organization or workers’ association his right to self-organize, the constitution, they have the
of their own. following requisites should be right to organization, but
complied with: without the right to strike.
They are, however, not allowed to (1) He should have a valid However, they should
become members of a labor union working permit issued by comply with the rules and
composed of rank-and-file employees. the DOLE regulations of Civil Service
• In case of mixed membership (2) He is a national of a country Commission, DOLE and
of supervisors and rank-and- which grants the same or Executive Order No. 180.
file employees, it cannot be a similar rights to Filipino
ground for the cancellation of workers.
the registration of the union.
The employees so improperly
included are automatically
deemed removed from the
list of members of said union.
Their removal is by operation
of law.

The following classes of employees are INELIGIBLE to join unions:

1. Managerial Employees
▪ Thus, it is important to distinguish between a managerial and a supervisory employee
because supervisory employees, can form, join or assist their own labor organization.
▪ Managerial employees are those who have the power to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, assign or discipline employees. Also, these
managerial employees act in the interest of the employer which is why they are not allowed
to unionize. Supervisory employees, on the other hand, are employees who are able to
effectively recommend such managerial actions. For them to be classified as supervisory
employees, the exercise of such authority is not merely routinary or clerical but requires the
use of independent judgment.

2. Confidential Employees
▪ Actually, you cannot find an express prohibition in the Labor Code pertaining to confidential
employees. But the case of Pepsi Cola vs. Secretary of Labor used the doctrine of necessary
implication. In this case, the Supreme Court said that the prohibition against confidential
employees stems from the prohibition against managerial employees – they work for the
interest of the employer.
▪ Who are confidential employees?
o A confidential employee is one who assists or acts in a confidential capacity in regard
to persons who formulate, determine, and effectuate management policies in the
field of labor relations. So, a few examples of the field of labor relations are:
recruitment and selection of employees, access to personal files of employees,
information about compensation package, human resource management. They are
also employees who assist the employer in the collective bargaining process and
collective bargaining negotiations. This includes a Personal Assistant who has
access to vital labor relations information.
▪ Confidential employees are ineligible to join unions because you do not want to give undue
advantage to either the employer or the union. Thus, you want the collective bargaining
negotiations to be a level playing field.
#GETTHATBAR2022
FLORES · TARADJI
 DISTINGUISH CONFIDENTIAL EMPLOYEES IN LABOR RELATIONS AND IN TERMINATION
CASES BECAUSE OF LOST OF TRUST AND CONFIDENCE.
▪ An employee who knows the trade/top secrets of the company, i.e. formula of a drug in a
pharmaceutical company, is considered to be a confidential employee in termination
cases. Thus, they are not prohibited to join unions. What is prohibited is confidential
employees who have access to labor relations information. In this case, knowledge of
trade/top secrets is not a labor relations information. Therefore, they can join labor
unions.
▪ Take note also, confidential employees can be supervisory and rank-and-file in position.
What matters is the nature of his job as it pertains to a labor relations position more than
the position of an employee in the hierarchy of the organization or company.
▪ The classification of whether an employee is managerial, supervisory, or confidential
must be proven and it cannot be solely on the basis of the job titles only. The Job title in
itself is not conclusive because a payroll master in company A and payroll master in
Company B might have access to different information. Their functions might slightly vary
so you have to be able to look at the nature of the job and job description of the employee.

3. Employee-Members of Cooperative
Cooperative members are co-owners of the cooperative. Thus, they are not allowed to join unions
because in case of bargaining negotiations, what hat are you wearing? Are you an employee or an
owner? If you are both an employee and a cooperative member at the same time, you cannot join a
union. But of course, if you are not a member of the cooperative and merely an employee, you can
join a union.

4. Employees of Embassies and International Organizations with

Diplomatic Immunity
In the case of ICMC vs. Ferrer Calleja (1990), the court said that if you allow the Union to have a
certification election, later on, there will be a chance the diplomatic immunity will be violated.
Assuming that a certification election is granted and during the bargaining negotiations there will
be a deadlock which will require them to submit before the administrative process of labor and in
that way, you are exposing the international organization to the domestic administrative
proceeding of the Philippines. This administrative proceeding is covered by diplomatic immunity
which covers civil, criminal and administrative proceedings. Thus, they cannot join unions.

#GETTHATBAR2022
FLORES · TARADJI
 3. Determination of Appropriate Bargaining Unit (ABU)
Bargaining Unit
A group of employees sharing mutual interest within a given employer unit composed of all or less than
all of the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit.
▪ Mutual interest
Most important factor in determining the appropriateness of the bargaining unit.
▪ All or less than all of the body of employees – there can be more than 1 bargaining unit in 1
enterprise.
o For example, the rank-and-file employees compose 1 bargaining unit, and the supervisory
employees compose 1 bargaining unit. It can also be possible that all of them are rank-and-
file. But later, when we go to the factors, to determine the appropriateness of the bargaining
unit, some of them may have or all of these rank-and-file employees, while they have the same
classification in terms of rank, they may have different interests, or they may have different
employment status.
▪ Occupational or geographical grouping
o This is not controlling. As a general rule, if there is mutual interest, the geographical
grouping will not be controlling in determining the appropriate bargaining unit.
o In the case of Erson Ang Lee doing business as Super Lamination, because the veil of corporate
fiction was pierced, the Court considered all the employees were doing the same thing,
basically, and noted that even if they belong to, or that they work in different places, they
were considered as one bargaining unit.
o It can be important, for instance, if you are of the same rank but you are in different places
and you probably have different benefits, for example, or there are additional job functions
for others. So, in that instance, probably you can argue that they should be separated into 2
bargaining units.

FACTORS TO DETERMINE THE APPROPRIATENESS OF THE BARGAINING UNIT

1. Globe Doctrine
▪ What the employees want. It is based on the will of the employees.
1. will of the Ees
▪ Do they want to be 1 bargaining unit only, so that their bargaining power will be stronger as
2. affinity and unity of the Ees interest there is strength in numbers? Or do they want to be a separate bargaining unit? This is
3. prior collective bargaining history
4. similarity of employment status considered. But, again, this is not the most controlling.

2. Affinity and unity of the employees’ interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule)
▪ This is the most controlling.
▪ This is the most important because different employee groups have different interests that
they would like to bring to the negotiation table. If you allow different employee groups to be
in the same bargaining unit, some interests may not be heard properly. For example, rank-
and-file employees do not have mutual interest with supervisory employees.

3. Prior Collective Bargaining History

▪ This is not controlling but it can be, in instances that there is mutuality of interests
▪ In the case of International School, where there were local and foreign hires. The Court, in
saying that the foreign hires consist of a different bargaining unit or form part of a different
bargaining unit from the local hires, took into account that in the prior collective bargaining
history, the foreign hires have been typically treated as a separate bargaining unit. So, that
will be helpful.

4. Similarity of Employment Status

▪ For instance, casual employees do not have the mutuality or community of interest with
regular and permanent employees. Hence, their inclusion in the bargaining unit composed of
the latter is not justified.
#GETTHATBAR2022
FLORES · TARADJI
BARGAINING UNIT vs. UNION vs. EXCLUSIVE BARGAINING REPRESENTATIVE
BARGAINING UNIT UNION EXCLUSIVE BARGAINING
REPRESENTATIVE
It is the biggest unit (e.g. in Any labor organization organized for The exclusive bargaining
the employer unit, there can collective bargaining and for other representative represents in the
be a bargaining unit for legitimate purposes. negotiating table the entire
rank-and-file, and one for bargaining unit, not just the
supervisory). members of the majority union.
Thus, the CBA will cover the entire
There can be more than one Bargaining Unit
(e.g. rank-and-file
bargaining unit.
(1) union in a bargaining BU)
unit. The EBR must have the legitimate
labor organization (LLO) status. So,
Union A Union B Union C
you have to take note of how it
becomes a legitimate labor
Assuming that there are more than one (1) organization. So, it has to have at the
union in that bargaining unit, you now have very least the legal personality to
to choose the exclusive bargaining file a petition for certification
representative among the existing unions election.
which will be certified as the SEBA.
So, at the very least, you shall have a
certificate of registration issued by
the DOLE or a charter certificate
issued by a duly registered
federation.

Effect of Inclusion of Employees Outside of the ABU

The inclusion as union members of employees outside the bargaining unit is not a ground for the cancellation
of the registration of the union. The employees so improperly included are automatically deemed removed
from the list of members of the said union by operation of law.

Separation of Unions Doctrine

This doctrine no longer applies. This prohibits the situation where the supervisory union and the rank-and-
file union operating within the same establishment are both affiliated with one and the same federation.
o The rule now is that rank-and-file union and supervisory union operating within the same
establishment may join the same federation or national union.

4. Non-Interference with Workers’ Rights to Self-Organization

Non-Abridgment of Right to Self-Organization
It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with
employees and workers in their exercise of the right to self-organization. Such right shall include the right to
form, join, or assist labor organizations for the purpose of collective bargaining through representatives of
their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid
and protection.

The right to self-organization includes 2 basic rights:

(1) To form, join or assist labor organizations for the purpose of collective bargaining through
representatives of their own choosing
(2) To engage in lawful concerted activities for the same purpose or for their mutual aid and
protection

#GETTHATBAR2022
FLORES · TARADJI
B. LEGITIMATE LABOR ORGANIZATIONS

1. Registration with the DOLE

TWO KINDS OF LABOR UNIONS
(1) Independent Labor Union
It must comply with the Union Registration Requirements:
1. 50.00php registration fee
2. Names of its officers, their addresses, the principal address of the labor organization, the minutes
of the organizational meetings and the list of the workers who participated in such meetings
3. Names of all its members comprising at 20% of all the employees in the bargaining unit where
it seeks to operate
4. If the applicant union has been in existence for 1 or more years, copies of its annual financial
reports
5. 4 copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it

NOTES:
▪ As to the 20% requirement → refers to the submission of the members of the union comprising
at least 20% of EEs in the bargaining unit it seeks to operate and not the 20% of the EEs in the
enterprise, when there are several bargaining units (e.g. there is a rank-and-file bargaining unit,
and there is a supervisory bargaining unit). BUT, if the enterprise has just one bargaining unit,
then this rule applies all the same.
▪ The 20% requirement should be reflected in the list of members
▪ Not necessarily required to be reflected in the minutes; in the meeting held, it is not necessary
that 20% of the members be present in such meeting.
▪ This is not a continuing requirement. It is sufficient that it is complied at the time of the
registration. Hence, after registration, the non-compliance with the 20% cannot be a ground for
cancellation of registration.
▪ The 20% is not applicable in the registration of chartered local.

!!! NOTE: Upon submission of the registration requirements or substantial compliance thereof, the DOLE
will now issue a Certificate of Registration, and upon the issuance of the Certificate of Registration,
the union will now have the legal personality to file for a petition for certification election and
conduct collective bargaining or engage in a strike etc.

(2) Chartered Local

The Chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon
the submission of the following documents in addition to its Charter Certificate:
1. The names of the chapter’s officers, their addresses, and the principal office of the chapter, and
2. The chapter’s constitution and bylaws, provided that where the chapter’s constitution and
bylaws are the same as that of the federation or national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under oath by the secretary or treasurer of the
chapter and attested by its president.

#GETTHATBAR2022
FLORES · TARADJI
 CHARTERING
The process of chartering starts by the issuance of a Charter Certificate by a Federation or National
Union.
▪ NOTE: Trade Union Centers cannot issue charter certificates. It is only a Federation or a
National Union which can issue a Charter Certificate.
Federation Trade union center
Aggregation of different labor unions. Confederations of labor federations.

Members: Labor Unions Members: Labor Federations

NOTES:
▪ Upon issuance of the Charter Certificate, the chartered local is now vested with limited
legal personality, enabling it to file for a petition for certification election.
▪ The submission of other requirements to the DOLE and Regional Office vests other rights and
privileges of the Legitimate Labor Organization (LLO) to the chartered local. If you have not
complied with these other requirements, you cannot engage in collective bargaining yet,
much less enter into a CBA, nor to exercise the right to strike. Certificate of Creation of a
Chartered Local shall be issued by the DOLE after compliance with all the requirements.

CHARTER CERTIFICATE CERTIFICATE OF CREATION OF A

CHARTERED LOCAL
Issued by a Federation or a National Issued by the Department of Labor and
Union Employment

What happens when the chartered local wins in a certification of election without a Certificate
of Creation of a Chartered Local?
D.O. No. 40-I-15 requires the submission of the other requirements not yet complied with within 5
days from the conclusion of the elections for the chartered local to be issued the Certificate of
Creation of a Chartered Local.

REGISTRATION OF FEDERATIONS AND NATIONAL UNIONS

Submit additional requirements to the Bureau of Labor Relations:
③ ②
i. Proof of affiliation of at least 10 chartered locals or chapters, each being a collective bargaining agent
ii. Names and addresses of companies where locals or chapters operate, and list of members in each
③company

Independent Registration Chartering

Acquires full legal personality upon issuance of a First Stage: Acquires partial legal personality upon
Certificate of Registration by the BLR. issuance of a Charter Certificate by a federation or
national union, for the limited purpose of filing PCE.

Second Stage: Acquires full legal personality only upon

submission to the DOLE of its Charter Certificate and
the additional registration documents under Art. 241.

NOTE: It acquires full legal personality upon

submission, not upon issuance of the Certificate of
Creation of Chartered Local.

#GETTHATBAR2022
FLORES · TARADJI
2. Cancellation of Registration
THE GROUNDS FOR CANCELLATION OF A UNION REGISTRATION
1. Misrepresentation, false statement or fraud pertaining to:
① a. the adoption or ratification of the CBA
%¥¥¥wqaaW% or amendments thereto
'

b. minutes of ratification, list of members who took part in the ratification, and
①c. those election of officers, minutes of the elections and list of voters.
NOTE: The fraud, misrepresentation or false statement must be !!! grave and compelling to amount
to a vitiation of consent of the members before they can be used as grounds for the cancellation of
union registration.

DHL Phil. United Rank and File Association v. Buklod ng Manggagawa ng DHL Phil. (22 July 2004)
The union, which was running for certification election, misrepresented that it was an independent
union that did not have any affiliation with a federation, when in fact, said union was affiliated with
a federation.
▪ The Court considered this as a material misrepresentation because accordingly had the
employees known of the fact that the said union was affiliated, they would not have voted for
the same and would have wanted an independent union, unaffiliated, to represent them.
Further evidence showed that the consent was vitiated when upon learning that the said
union was affiliated with a federation, a good number of resigned from that labor union and
formed their own.

COMMINGLING
i. It is a related issue because it is not a ground for cancellation, unless there is fraud
or misrepresentation.
ii. For example: fraud or misrepresentation in the list of members who took part in the
ratification submitted for union registration by knowingly including members who are
disqualified in joining a union, such as a managerial or supervisory employee with
rank-and-file employees or confidential employee, in order for the union to meet the
20% requirement for registration. In this case, there is a ground for cancellation
not because of commingling, but because there was fraud, misrepresentation
or false statement.
③
2. Voluntary Dissolution
a. Requires 2/3 votes of the total membership of the union and the vote has to be done in a meeting
called for such purpose.
b. This is not a ground for cancellation since it is a voluntary dissolution but has the same effect, the
union registration gets revoked.

3. Violation of rights and conditions of membership → considered modified by Art 245 & 247
.

grounds
.

the 3 above
only for cancellation
are .

4. Failure to submit periodic financial reports

▪ In the case of Heritage Hotel v. NUWHRAIN (2011), the Court held that the non-filing of the financial
statements is actually not a ground for cancellation of union registration. But it can still be found in
Article 250, par. (j) that upon failure to submit periodic financial reports, union registration can
be cancelled.
▪ The cancellation is not automatic. It is the BLR which will delist the labor organization from roster
of LLO if it has not received any response from the labor organization, regarding the reportorial
requirements that needs to be submitted. The cancellation or delisting does not come automatically;
procedures must be followed first.

#GETTHATBAR2022
FLORES · TARADJI
PETITION TO CANCEL UNION REGISTRATION
A petition to cancel union registration will not bar the filing of a petition for certification election because to be able
to file a petition for a certification election, it only needs the requisite legal personality. Thus, when you already have
Certificate of Registration or Charter Certificate, you can already file a petition for certification election.
• A petition to cancel union registration will also not suspend the certification election proceedings
because the union maintains legal personality until it is cancelled.
• In cases of collateral attacks, the legitimacy or legal personality of a labor union cannot be collaterally
attacked in a petition for certification election.

3. Affiliation/Disaffiliation from National Union or Federation

Principal-Agent Relationship
Mother Union (federation or national union) → agent
Affiliate or Local Chapter/Chartered Local) → principal
• The fact that it was the federation which negotiated the CBA does not make it the principal and the
affiliate or local union which it represents the agent.
• However, if it was the federation which negotiated all the CBAs in the establishment, the local chapter
cannot negotiate the renewal of the CBA without the consent and participation of the federation.
• In case of illegal strike, it is the local union, not the mother union, who is liable for damages.

Purpose of Affiliation → to further strengthen the collective bargaining leverage of the affiliate, to increase
by collective action its bargaining power.

Independently Registered Union Local Chapter or Chartered Local

The proof of relationship is a Contract of Affiliation. The proof of relationship is a Charter Certificate.
The affiliation does not affect in any way its Its legal personality is dependent upon and
independent legal personality. coterminous with its association with its creator –
the federation or national union.
In case of disaffiliation, it does not affect the legal In case of disaffiliation, it ceases to have any legal
personality. personality except if prior to disaffiliation, it has
secured independent registration.

4. Rights of Legitimate Labor Organizations

(1) To act as representative of its members for the purpose of collective bargaining
(2) To be certified as the exclusive representative of all the employees in an appropriate bargaining unit
for purposes of collective bargaining
(3) To be furnished by the employer, upon written request, with its annual audited financial
statements within 30 calendar days from the date of receipt of request, after the union has been duly
recognized or certified as the SEBA, or within 60 days before the expiration of the existing CBA, or during
the collective bargaining negotiation.
(4) To own property, real or personal, for the use and benefit of the labor organization and its members
(5) To sue and be sued in its registered name
(6) To undertake all other activities designed to benefit the organization and its members

#GETTHATBAR2022
FLORES · TARADJI
5. Rights and Conditions of Membership in Legitimate Labor Organizations
HIGHLIGHTED RIGHTS:
1. Right to vote
Pertains to the right to vote and elect officers of the union (this does not pertain to the right to vote
in the certification election):
i. Done by secret ballot
ii. Done in intervals of 5 years
iii. No other qualification for the members to be allowed to vote shall be imposed except that the
union member is in good standing with the union.

2. Funds can only be used for purposes in the Constitution and Bylaws (CBL), unless authorized
by majority of the members (written resolution).
Use of funds for other purposes to be valid → approval of majority of the members in a written
resolution.

3. Officers not paid compensation, except salaries and expenses under the CBL or authorized by
majority of the members in a written resolution.
Officers are get paid an allowance and stipend for doing union work limited to those as provided for
in the CBL.

4. Special assessment or other extraordinary fees must be authorized by majority of the

members in a written resolution.
Other than for activities mandated by the Labor Code, no special assessment or extraordinary fees
can be assessed to members, unless authorized by majority of the members in a written
resolution.

5. !!! Check off must have individual written authorization of the employee

GR: Principle of non-interference in the disposal of wages, the ER cannot interfere on how
the EEs used and disburse or spend their wages.

EXP: If allowed by law. For instance, Article 113 provides that union dues can be checked off or
automatically deducted by the ER from the salary of the EE to be turned over to the labor
organization.

NOTE: For check offs not expressly authorized by law e.g., check off for special assessment for a
training conducted for union members, the ER should state the purpose, amount, and/or
beneficiaries of the assessment checked off.

6. Check Off
A process whereby the employer, on agreement with the union certified as SEBA, or on prior authorization
from its employees, deducts union dues or agency fees from the latter’s wages and remits them directly to
the union.
• The right to check off of union dues or agency fees is available only to the SEBA. The minority union
has no such right.
• The right of the incumbent to checkoff and to collect dues is not affected by the pendency of a
representation case or an intra-union dispute.

Assessments
REQUISITES:
(1) Authorization by a written resolution of the majority of all the members at a general membership
meeting duly called for the purpose
(2) Secretary’s record of the minutes of said meeting
(3) Individual written authorization for check-off duly signed by the employees concerned

#GETTHATBAR2022
FLORES · TARADJI
 NOTE: Unlike in authorization for union dues and assessments, disauthorization does not require that it be
written individually. The fact that the disauthorization were collective in form is of no moment. There is
nothing in the law which requires that the disauthorization must be in individual form.

Union Dues
• These are dues charged to union members.
• As to checkoffs or deductions of union dues, there is a need for the prior individual written
authorization of each member.

Agency Fees
• Agency fees are charged to non-union members who belong in the same bargaining unit.
• They are union members who benefitted from the CBA negotiations done by the exclusive bargaining
representative (EBR). The EBR can then charge them with agency fees.
• No union dues are charged to them since they are not union members.
• As to checkoffs or deductions of agency fees, there is no need for the individual written
authorization from employees.
• The employees’ acceptance of the benefits in the CBA justifies the deduction as well as the union’s
entitlement to such fees.
• A non-SEBA member has right to accept or not the benefits of the CBA. Consequently, if he does not
accept or refuses to avail of the CBA-based benefits, he is not under any obligation to pay the agency
fees.
• The non-SEBA members who pa agency fees to the SEBA remain to be liable to pay union dues to
their own union.
• The agency fee should be:
(1) Reasonable in amount, and
(2) Equivalent to the dues and other fees paid by members of the SEBA

NOTES:
▪ No attorney’s fees or negotiation fees may be imposed on an individual member. Attorney’s fees or
negotiation fees, if they need to be charged, are charged to the funds of the union; these cannot be
charged to individual members.
▪ Apart from the union members being able to examine the books of account of the labor union, they can
also file a complaint with the Secretary of Labor who has the following powers:
i. The visitorial power to inquire into financial activities of the legitimate labor organization
ii. To examine the books of account and other records, and
iii. To prosecute those liable for the violation of laws, the Constitution and the by-laws of the
union.
However, the complaint must be supported by 20% of the union members. Note that the visitorial power
of the Secretary of Labor cannot be done during the freedom period nor 30 days before the election of
union officers.
▪ The other rights and conditions of membership would pertain to the union security clause.

7. Union Security Clause

It is a recognized exception to the general principle that the right to join includes the right not to join. It is
allowed because it favors unionism and opportunity to bond together to protect their rights.

One of the exceptions is religious objector → In the case of Victoriano vs. Elizalde Rope Factory, this case
involves members of the INC who invoked their freedom of religion since their religion does not allow
membership to unions. The court said that you cannot force them to join a union if they are invoking their
freedom of religion. In the case of Kapatiran vs. Ferrer-Calleja, the court said that if these INC members
wanted to form a union for themselves, they can do so.

For extensive discussion, see Part V (E)(2) ULP by the employer.

#GETTHATBAR2022
FLORES · TARADJI
C. BARGAINING REPRESENTATIVE
Sole and Exclusive Bargaining Agent (SEBA) refers to a legitimate labor union duly certified as the sole and
exclusive bargaining representative or agent of all the employees in a collective bargaining unit.

1. Modes to Acquire Status as Sole and Exclusive Bargaining Agent (SEBA)

a. Request for SEBA Certification
• SEBA certification is a creation of D.O. 40-I-15. (Note: Voluntary recognition was replaced with
SEBA Certification)
• The matter of choosing who the exclusive bargaining representative should be a matter
resolved by the employees themselves.
• You have to file a request for SEBA certification with the DOLE regional office which issued
the Certificate of Registration or the Certificate of Creation of a Chartered Local.
• A request for SEBA certification will only be entertained by the regional director when it is
an unorganized establishment and there is only 1 legitimate labor organization.
• The following must be submitted:
o The names of employees in the covered bargaining unit who signify the support for
SEBA certification, provided that said employees comprise at least majority of the
employees in the bargaining unit, and
o Certification under oath by the president of the requesting union that all documents
submitted are true and correct.
• Upon issuance of the Certification, the certified union shall enjoy all the rights and privileges
of an exclusive bargaining agent.

In an organized establishment, there exists an exclusive bargaining representative, hence, cannot request for a
SEBA certification anymore.

If there is more than one legitimate labor organization existing in that establishment, you cannot request for a SEBA
certification. The regional director will refer the matter to an election officer or the med-arbiter for the conduct of
a certification election.

NOTE: The matter of determining whether an establishment is organized or unorganized depends on the bargaining
unit. For example, in an establishment and there are two (2) bargaining units, as far as the rank-and-file bargaining
unit is concerned, there is already an exclusive bargaining representative, then that establishment is considered
organized. But if you consider the supervisory employees and they do not have an exclusive bargaining
representative yet, the establishment is still considered as unorganized for purposes of the supervisory employees.

b. Consent Election
Refers to the process, voluntarily and mutually agreed upon by the contending unions, of determining
through secret ballot the SEBA of the employees in an appropriate CBU for purposes of collective
bargaining with the employer. It is conducted with or without the intervention of the DOLE.

CONSENT ELECTION CERTIFICATION ELECTION

Held upon mutual agreement of contending Does not require mutual consent of the parties.
unions
May be conducted with or without the control Always conducted under the control and
and supervision of the DOLE. supervision of the DOLE
Voluntary mode of resolving labor dispute Compulsory method of adjudicating a labor
dispute
Given the highest priority Resorted to only when the contending unions
fail or refuse to submit their representation
dispute through consent election.

CERTIFICATION ELECTION vs. CONSENT ELECTION

Both essentially have the same process. However, in consent election, the parties, during the
preliminary conference, are asked “are you amenable to conduct a consent election?”
• If yes, you now jump to a preliminary conference – meaning you skipped a few steps. The
records will be forwarded by the med-arbiter to the regional director. Then the first free
election conference will be conducted within 10 days from the agreement.
• If no, then you follow the entire process.

#GETTHATBAR2022
FLORES · TARADJI
 Certification Election
Refers to the process of determining through secret ballot the SEBA of the employees in an
appropriate CBU for purposes of collective bargaining with the employer. A certification election is
conducted only upon the order of the Med-Arbiter of the BLR.

FILING OF PETITION FOR CERTIFICATION ELECTION (PCE)

• Who may file a PCE? Independent union charter
, ,

o Legitimate labor organization (LLO) or Federation or national union

o Employer when requested to bargain collectively where no registered CBA exists
(this is an exception to the Employer as A Mere Bystander Rule)
• Where to file?
At the Regional Office which issues the certificate of registration or the certification of a
chartered local.
• When to file?
GR: Anytime (after you have the LLO status). > Within the 60 day freedom period
-

EXP: When one of the bar rules exists.

ORGANIZED (ARTICLE 268) UNORGANIZED (ARTICLE 269)

BARGAINING AGENT
There exists an exclusive bargaining representative There is no exclusive bargaining representative
GRANT OF PETITION FOR CERTIFICATION ELECTION
Appealable Not appealable.

The med-arbiter shall automatically order the conduct

of a certification election upon the filing of a petition for
certification election.

NOTE: It is only the grant in an unorganized

establishment that is unappealable. If it is the denial of
a petition for certification of election, whether
organized or unorganized, or the grant of a PCE in an
organized establishment, all of these are appealable to
the SOLE.

Freedom period
No PCE except within the 60-day freedom period. This Not applicable. Can file petition anytime.
applies only to an organized establishment with a CBA.

Substantial Support Rule

If you want to contest the majority status of the Not applicable.
current representative, during the freedom period,
you can file the PCE but you need to have the
authorization of at least 25% of the bargaining unit.

Note: The 20% requirement is for the registration of

an independent union.

REQUISITES FOR PCE IN ORGANIZED ESTABLISHMENTS

1. A PCE questioning the majority status of the incumbent bargaining agent is filed before the Med-Arbiter
within the 60-day freedom period
2. Such PCE is verified and
3. The PCE is supported by the written consent of at least 25% of all the employees in the CBU.

PROCESS OF CERTIFICATION ELECTION

1. FILING
2. RAFFLE - After filing of PCE, the petition will be raffled to a Med-Arbiter
3. NOTICE OF PRELIMINARY CONFERENCE - After the raffle, the Med-Arbiter will issue a notice of preliminary
conference (which should be held within 10 days from the receipt of the petition for certification election)
and served within 3 working days from receipt of the PCE. No set number of hearings but should not exceed
15 days from the first conference of hearing. The petitioner should post the copy of the petition and notice
in 2 conspicuous places in the company premises 10 days before the election.
4. CONSENT ELECTION - During the preliminary conference, if they agree to consent election, you should jump
to pre-election conference. If they agree to consent election, it shall be raffled to an Election Officer
5. DECISION ON PCE - If they did not agree, a decision of the PCE will be made by the Med-Arbiter ten (10) days
from the last conference.

#GETTHATBAR2022
FLORES · TARADJI
 NOT VALID 6ROUND:S:

The Med-Arbiter has to look if the GROUNDS FOR DENIAL of PCE are present: ↳ Questions on legal personality
(1) Not listed in DOLE’s Registry of LLO (no collateral attack)
↳
(2) Failure to submit Chater Certificate commingling
(3) In organized establishments, failure to submit 25% consent signature requirement ↳ petition for cancellation
(4) Non-appearance in 2 consecutive scheduled conferences of union registration
(5) Absence of EER
(6) Violation of any of the Bar Rules

!!!TAKE NOTE:
Unorganized Establishment— the grant of PCE is unappealable

In cases where the decision is appealable (i.e. denial of a petition for certification of election, whether
organized or unorganized, or the grant of a PCE in an organized establishment), a Memorandum of
Appeal shall be filed with the Regional Director who transmits the records to the Office of the Secretary.
The other party has 10 days from receipt of the Memorandum of Appeal to make a reply. After that, a
decision will be made by the SOLE within 15 days from receipt of the entire records. 10 days after the
receipt of the decision of the SOLE by the parties, the decision becomes final and executory. No motion
for reconsideration may be entertained on this matter.

6. PRE-ELECTION CONFERENCE - If the PCE is granted, it will then be raffled to an Election Officer. Within
24hrs from receipt by the Election Officer of his assignment, the Election Officer will now conduct the pre-
election conference within 10 days from receipt of the assignment. During the pre-election conference, all
small details are discussed (when and where the election will be conducted and who will sit in the polling
place).
7. CERTIFICATION ELECTION - After the pre-election conference, you now proceed to the Certification
Election.
8. CANVASS OF VOTES - After the Certification Election, you will canvass the votes.
9. TRANSMIT TO MED-ARBITER - The votes will be transmitted by the Election Officer to the Med-Arbiter,
who will then issue an order proclaiming the results of the certification election. After the order of the Med-
Arbiter, this can be appealed to the SOLE, similar to how you appeal the decision in a PCE (i.e. by filing a
Memorandum of Appeal)
ELIGIBLE VOTER
DOUBLE MAJORITY RULE > voter
belonging to the ABU
FIRST MAJORITY: To have a valid certification election subject of a PEE .

SECOND MAJORITY: To declare the winning union that will be certified as SEBA >
DO 40 i 15
- -

↳ all employees who are

FIRST MAJORITY: 50% + 1 of the eligible voters members of the ABU

Majority of ALL eligible voters in the Bargaining Unit should case their votes. ¥E¥¥¥?Éin9 } cut off
-

EXAMPLE: 200 employees Inclusion / Exclusion Proceeding

Union A – 79
Union B – 35
↳
contending
union agree
who to include or exclude
No Union – 20
in the list of eligible voters
Challenged Votes – 5
.

Spoiled Ballots – 5

1. Determine the first majority, that is 50% + 1 of the eligible voters. [First Majority: 101]
So here, 200 is your base. You need to get at least 101 employees to vote in order to arrive at a valid election.
2. In determining the first majority, do not include the spoiled ballots (defaced, torn, or compromised ballots).
The voter shall surrender the spoiled ballot, and he or she shall be given a new one.
3. In determining the first majority, challenged votes will be counted because they remain to be a valid vote
unless there has been a final ruling that they are not eligible to vote.
4. NOTE: A dismissed employee who contested the legality of his dismissal shall be considered a qualified voter,
unless his dismissal was declared valid in a final judgment at the time of the conduct of the election.
5. QUALIFIED VOTERS [THE 3-MONTH RULE] → To be qualified to vote in the certification election, you have
to be a member of the bargaining unit at least 3 months prior to the filing of the PCE.

In this case, there are 139 [79 + 35 + 20 + 5 (challenged votes)] eligible voters – which is over and beyond 101. Thus,
there is a valid election.

What happens if it did not meet the first majority?

There will be failure of elections. A failure of elections shall not bar the filing of a motion for the immediate holding
of another election within six (6) months from the date of the declaration of failure of elections. Following this,
within that 6-month period, you can hold a re-run election. You just have to file a motion. There is no need to file a
new PCE.

#GETTHATBAR2022
FLORES · TARADJI
SECOND MAJORITY: 50% + 1 of the valid votes cast
Majority vote of the valid votes cast required in order to be chosen as the SEBA.

EXAMPLE: 200 employees

Union A – 79
Union B – 35
No Union – 20
Challenged Votes – 5
Spoiled Ballots – 5

1. Determine the second majority, that is 50% +1 of the valid votes cast
2. In determining the second majority, challenged votes are not counted initially when determining the
second majority
a. They shall only be counted if they are material as to affect the outcome of the election
b. For example, a supervisory employee who votes in the certification election of the rank-and-file
employees, he or she will be allowed to vote but his or her vote will be segregated in the second
majority
ABSTENTION
In this case, there are 134 (79 + 35 + 20) valid votes cast
↳ blank ballot
[SECOND MAJORITY: 68]
Thus, in this scenario, Union A (with 79 votes) wins. ↳ considered a valid vote
↳ NOT UNION ( not
a

vote to No
EXAMPLE: 200 employees a
negative
vote)
Union A – 40
Union B – 30 SPOILED
No Union – 80
↳ Not a valid vote
Assume that all of them are valid votes.
First majority (101) is met.
Second majority (50%+1 of 150 valid votes cast) is 76.
If we apply the first and second majority, No Union is the winner because it got 80, and in effect, the one-year
bar will apply.

If first majority is met and second majority is not met, the next step that you have to ask is can you go to a run-off
election?

c. Bars to the Holding of Certification or Consent Election

CONTRACT BAR The contract bar rule comes in when the CBA is registered. After it is registered,
the freedom period will now be observed and you cannot file a PCE except within
the last 60 days before the end of the 5-year representation term of the exclusive
bargaining representative.

During the 5-year effectivity of the CBA, except the 60-day Freedom Period.
STATUTORY BAR 1 year from actual date of a valid election.

This is to allow the SEBA to negotiate and come up with a CBA. This also applies
when there is no winner, meaning the “no union choice” won.

What happens when, after one year, there is still no CBA?

GR: Another union can already file a PCE.
EXP: When Deadlock Bar Rule exists.

When a union has already sustained collective bargaining negotiations in good

faith within the one-year period, but there is no CBA, you still cannot file a PCE.
CERTIFICATION YEAR BAR 1 year from issuance of SEBA Certification.
NEGOTIATIONS BAR Once the CBA negotiations have commenced and while the parties are engaged
in this process, no challenging union is allowed to file a PCE that would disturb
the negotiation process and unduly delay, preempt or forestall the prompt and
timely conclusion thereof.
COLLECTIVE BARGAINING No PCE can be allowed if CBD is submitted to a 3rd party for conciliation,
DEADLOCK BAR voluntary or compulsory arbitration, or if it is subject to a valid notice of strike
or lockout, even if the 1-year period had already lapsed.

There is CBD where there is failure in the collective bargaining negotiations

between the SEBA and the employer resulting in an impasse or stalemate.
#GETTHATBAR2022
FLORES · TARADJI
d. Failure of Election, Run-Off Election, Re-Run Election

RUN OFF ELECTION

Here, first majority (101) is met. There is a valid election.

Second majority (which is 50%+1 of 180) is 91. No one got 91.
If the second majority is not met, the first question to ask is: can you go to a run-off election?

REQUISITES OF RUN OFF ELECTION

1. There is a valid election
In scenario no. 3, there is a valid election because your minimum is 101 and 180 voted.

2. There are three or more choices including the “no union” choice
Thus, you need at least 2 unions plus the no union choice.

3. Not one of the choices obtained majority of the valid votes cast
Meaning, the second majority was not met, just like in scenario no. 3.

4. The contending unions received 50% of the@ votes cast. → includes spoiled and challenged
Take note that it pertains to “votes cast” and not to valid votes cast. votes

If you look at scenario no. 3, union A got 50 and union B got 60 = 110 out of the 180 votes
cast. The 180 votes is your base, so you need at least 90 (not 91 because what is requires is
only 50%). Thus, all the contending unions combined should get at least 90 votes for you to
qualify for a run-off election. Here, this is met because union A and union B combined got 110
votes.

5. No unresolved challenges on votes that will materially affect the results of the
elections.
Resolving all challenges that will materially affect the result of the elections before you conduct
the run-off elections.

!!! Take note that “no union” is NOT anymore, a choice in the runoff election. So, it will only be A and
B. Whoever gets more votes in the runoff election will win and will be proclaimed as the EBR.

RE-RUN ELECTION
New type of election introduced by DO 40-I-15.

WHEN CAN YOU DO A RE-RUN ELECTION

1. After failure of elections; or

2. When there is a tie

When there is a tie between two choices—a tie between two unions or more; or a tie between one
union and the “no union” choice.

When a tie happens, the election officer notifies the parties of such tie and the election officer will
cause the posting of the notice for a re-run election within 5 days from the conduct of the
certification, consent, or run off elections. The re-run election will be conducted within ten days after
the posting of the notice for the re-run election. The choice which garners the highest number of
votes will be declared the winner (Sec 16, DO 40-I-15, amending Section 15 of Rule IX.)

NOTE: DO 40-I-15 is not clear whether in a re-run election, you will take out the no union choice.

#GETTHATBAR2022
FLORES · TARADJI
EXAMPLE:
Scenario 4: 220 employees
Union A – 65
Union B – 65
No Union – 110
Total - 220

1. Let’s assume that there are 220 employees and all of them voted. Unions A and B get 65 votes each.
Because all voted, the first majority has been met. The second majority here is 110 + 1.
2. So, “no union” did not win. Here, you can have a re-run election because there is a tie between Union A
and Union B.
3. If you look at scenario no. 4, it looks like you can have a re-run because there is a tie. BUT, if you look at
it, 65 + 65 = 130—there can also be run-off election, because you have met all the valid requirements.

1. Let’s assume that out of the 500 employees, 300 voted. So, the first majority is met because you only need
251 to vote.
2. There are 10 challenged votes and 10 spoiled ballots.
The 10 spoiled ballots will be disregarded.
The 10 challenged votes will NOT materially affect the results because since 300 voted, your second majority
is 151. So, it is very far.

In Scenario No. 5:
✓ Valid election
✓ Three or more choices
× Second majority

The unions got at least 50% of the votes cast.

In counting the votes cast, you include the challenged votes because there is yet no ruling whether
the challenged votes cast are invalid or not. So, 310 is your base in determining whether the unions
got 50% of the votes. So, 50% of 310 is 155. In this case, Unions A, B and C got 170. Thus, you can go
to run off elections.

Now, here’s the question: Who goes to the run off elections?
(A) FIRST SCHOOL OF THOUGHT
It is necessary that A, B and C are included because the Code says the union who got the top 2
votes. The top 2 votes is interpreted as the 50 and 60, so three of them will go to the runoff
elections.

(B) SECOND SCHOOL OF THOUGHT

It is just A and B, because they are the 2 unions with the most number of votes. Atty. Quan
subscribes to this school of thought, because if A, B and C are involved, there is a chance that
there will be another tie. If it is only A and B, the process is easier. There is no decision yet by the
Supreme Court on this.

e. Employer as a Mere Bystander Rule

EMPLOYER AS A MERE BYSTANDER → employer is a non party in the
-

The employer’s participation shall be limited to:

(1) Notified of the filing of the petition;
POE even if it is the

(2) Furnish the list of employees during the pre-election conference petitioner himself
.

Exception where the employer can file the PCE NO SEBA)

(
When it is requested to bargain and there is no exclusive bargaining representative yet.
#GETTHATBAR2022
FLORES · TARADJI
 D. COLLECTIVE BARGAINING

1. Duty to Bargain Collectively, Bargaining in Bad Faith

The mutual obligation of both the employer and the employee to meet and convene promptly, and
expeditiously, and in good faith for the purpose of negotiating an agreement with respect to:
• Wages
mandatory
provisions µ • Hours of work and
• All other terms and conditions of employment
✓ and
any grievances or questions arising undersuch agreement
NOTES:
• The employer is not under any legal obligation to initiate collective bargaining negotiations
• The employer’s duty to bargain exists only with the SEBA.
• The ultimate purpose of collective bargaining is to reach an agreement resulting in a contract binding
the parties (i.e., to conclude a CBA).
• The failure to reach an agreement after negotiations does not establish a lack of good faith.
• !!! The duty to bargain collectively does not compel a party to agree to a proposal or to make
any concession, even if it pertains to mandatory provisions of a CBA. Because it is a contract, then
under contract law, an agreement should have a meeting of the minds, and if there is no meeting of
the minds, there will be no agreement, and there will be no contract.
• In Kiok Loy v. NLRC, the duty to bargain arises when the jurisdictional requirements are met:

Refusal to meet /
o Possession of majority status – how a SEBA is certified as an exclusive bargaining
representative
the SEBA o Proof of majority status – the certification from DOLE showing it is the SEBA, and
↳ the proposed CBA o Demand to bargain.
will be imposed
TAKE NOTE: The employer cannot recognize a union to become an exclusive bargaining
consequence representative anymore. Thus, voluntary recognition has already been removed by DO-14-I-15,
.

as a

replaced it with the process of request of SEBA certification.

• GR: Employer is a mere bystander. In a scenario when there is at least two union in a bargaining unit
(no SEBA yet in this case) and there is a demand to bargain:
o The duty to bargain does not arise yet and cannot accuse the employer of ULP. This gives
rise to the exception to the rule that the employer is a bystander. Here, the employer
may file a petition for certification election.
• Violation of the duty to bargain collectively constitutes Unfair Labor Practice.
• Essential Requisites of Collective Bargaining
1. Employer-employee relationship must exist
2. The bargaining agent must have the majority support of the members of the bargaining
unit
3. The bargaining unit being sought to be represented by the SEBA should be validly constituted
and established in accordance with law.
4. A lawful demand to bargain is made in accordance with law.

COLLECTIVE BARGAINING PROCESS

Summary:
1. Written Notice with Proposals
2. Reply with Counter Proposal (within 10 days)
3. Request for Conference (should differences arise) (begin not later than 10 days from date of request]
4. NCMB intervention upon request of either parties or at its own initiative
5. During the conciliation proceedings, the parties are prohibited from doing any acts that may disrupt or
impede settlement
6. Amicable settlement / voluntary arbitration

NOTES:
• BEFORE: Failure to reply does not constitute refusal to bargain which is an unfair labor practice. This
period is merely procedural in nature and not mandatory.
• RECENTLY: The procedure prescribed under Article 261 is mandatory because of the basic interest of the
State in ensuring lasting industrial peace. Thus, failure to reply within the 10-day period is indicative of its
bad faith or lack of interest in bargaining, thus ULP.
• No temporary or permanent injunction or restraining order in any case involving or growing out of labor
disputes shall be issued by any court or other entity.
• Negotiating a CBA in bad faith consisting of the employer’s refusal to bargain with the collective bargaining
agent by ignoring all notices for negotiations and requests for counterproposals. Such refusal to send a
counterproposal to the union and to bargain on the economic terms of the CBA constitutes an unfair labor
practice.
MULTI EMPLOYER BARGAINING
-

> voluntary SEBAS #GETTHATBAR2022

7 various employers & respective FLORES · TARADJI
> to standardize those belonging in the same industry
 2. Collective Bargaining Agreement
Refers to the negotiated contract between a duly recognized or certified exclusive bargaining agent of
workers and their employer, concerning wages, hours of work and all other terms and conditions of
employment in the appropriate bargaining unit, including mandatory provisions for grievances and
arbitration machineries.

NOTES:
• It is the law between the parties, and as such, they are bound not only to the fulfillment of what has
been expressly stipulated but also to all consequences which, according to their nature, may be in
keeping with good faith and mandate of the law. Being the law between the parties, any violation
thereof can be subject to redress in court.
• CBA is not an ordinary contract. It is impressed with public interest, thus it must yield to the common
good.
• Ratification by majority of al the workers in the bargaining unit makes the same binding on all
employees therein. It affects the entire membership in general.

A. IF THERE IS NO CBA YET

Any time after meeting the jurisdictional requirements the union can start bargaining after being granted
the status of SEBA.

NOTE: However, it should be done within one year (Certification Year Bar Rule), since if it is not done within
one year the status of SEBA can be questioned and a new certification election can be filed.

The duty to bargain collectively where no CBA exists involves the performance of a mutual obligation:
1. 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
2. To execute a contract incorporating such agreements, if requested by either party. (Labor Code, Art.
263) Essentially, the duty to bargain in this situation still requires the performance of the obligation
by the employer and the union to meet, convene and confer for collective purposes,

B. IF THERE IS ALREADY AN EXISTING CBA

Effect of Registration of the CBA: It will give rise to the Contract Bar Rule which will prohibit other unions to
file a certification election except the freedom period.

Without CBA (Art. 262) With CBA (Art. 264)

Duty to Bargain Collectively in the absence of CBA Duty to Bargain Collectively when there exists a
Collective Bargaining Agreement

In the absence of an agreement or other voluntary When there is a CBA, the duty to bargain collectively
arrangement providing for a more expeditious manner shall also mean that neither party shall terminate nor
of collective bargaining, it shall be the duty of modify such agreement during its lifetime.
(1) employer and
(2) the representatives of the employees However, either party can serve a written notice to
to bargain collectively in accordance with the terminate or modify the agreement at least 60 days prior
provisions of this Code. to its expiration date.

ORDER: It shall be the duty of both parties to keep the status

1. In accordance with any agreement or voluntary quo and to continue in full force and effect the terms
arrangement and conditions of the existing agreement during the
2. In accordance with the provisions of the Labor 60-day period and/or until a new agreement is reached
Code by the parties.

#GETTHATBAR2022
FLORES · TARADJI
 Mandatory Provisions
Those that the parties are compulsorily required to bargain if either party has made a proposal thereon.
1. Wages
2. Hours of work
3. Meal time
4. Time breaks
5. Overtime and other premiums
6. Commissions
7. Shift differentials
8. Paid holidays
9. Incentive pays
10. Paid leaves of absence
11. Fringe benefits
12. Separation or severance pay
13. Pensions and retirement benefits
14. Work schedules
15. Probationary period
16. Grievance procedure
17. Arbitration
18. Labor management council
19. No strike, no lockout clause
20. Union security clause
Under special laws:
21. Drug-free workplace policy
22. HIV/AIDS education and information program

NOTES:
• The benefits from the CBA are separate and distinct from the benefits granted by law. Workers are allowed
to negotiate wage increases separately from and in addition to legislated wage increases.
• Parties may validly agree in the CBA to reduce wages and benefits of employees, provided such reduction
does not go below the minimum standards.
• Employees Entitled to CBA Benefits
1. Members of the SEBA
2. Non-SEBA members but are covered by the collective bargaining unit
3. Members of the minority union/s who paid agency fees to the SEBA and
4. New employees hired after the conclusion of the CBA and during its effectivity or even after its
expiration.

GR: Those excluded are not entitled to CBA benefits. (such as confidential or managerial employees)
EXP:
(1) When CBA benefits are granted to managerial employees by reason of company policy/practice
(2) When adjustments are made to avoid distortion in the levels of wages or benefits

• Normally, the CBA is agreed upon. In this case, the CBA was done by imposition. The imposition of the CBA
was in the nature of an arbitral award. This is based on fairness, equity and social justice.
• Read the CBA in its entirety. Union leave will be subject to reasonable company rules. The CBA itself
recognize management prerogatives.
o While it is true that the union and its members have been granted union leave privileges under the
CBA, the grant cannot be considered separately from the other provisions of the CBA, particularly the
provision on management prerogatives where the CBA reserved for the company the full and complete
authority in managing and running its business. Nothing in the wordings of the union leave provision
removes from the company the right to prescribe reasonable rules and regulations to govern the
manner of availing of union leaves, particularly the prerogative to require prior approval.

#GETTHATBAR2022
FLORES · TARADJI
 3. Signing, Posting, Registration
SIGNING AND EXECUTION
The signing and execution of the CBA by the management and SEBA negotiating panels after a series of
negotiations.

PUBLICATION
Posting of a copy of the newly concluded CBA in at least 2 conspicuous places in the workplace, at least 5
days prior to ratification.

RATIFICATION
By at least a majority of all the employees covered by and included in the bargaining unit (not only of the
members of the SEBA)

REGISTRATION a

Registration with the BLR or DOLE Regional Office by submitting 5 copies and paying registration fee.
1. Copy of the CBA
2. Proof of Ratification

NOTE: The foregoing documents must be certified under oath by the representative of the employer and
the labor union. No other document shall be required in the registration of the CBA.

4. Term of CBA
Any CBA that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term
of 5 years.
(1) No petition questioning the majority status of the incumbent bargaining agent shall be entertained and
(2) No certification election shall be conducted by the DOLE
outside the 60-day period immediately before the date of expiry of such 5-year term of the CBA.

All other provisions of the CBA shall be renegotiated not later than 3 years after its execution.
↳ deadline for mandatory
Agreements entered into renegotiation
Within 6 months from the date of expiry of the term Beyond 6 months from the date of expiry of the term ↓
Any agreement on such other provisions of the CBA entered
refusal
If any such agreement is entered into beyond 6 months, the tomeet
into within 6 months from the date of expiry of the term of parties shall agree on the duration of retroactivity forth
such other provisions as fixed in such CBA, shall retroact to thereof. mandatory
the day immediately following such date. nego ,
the

In case of a deadlock in the renegotiation of the CBA, the proposed

automatic retroactivity parties may exercise their rights under this Code. asa

No automatic
retroactivity
will be
imposed .

→ parties will agree

LIFE OF THE CBA
→ without agreement/ prospective
application

example
:

3yearcBA.es/tendedforanother3years

todays
#GETTHATBAR2022
IHCBA
Todays 2nd CBA FLORES · TARADJI
POLITICAL ASPECT (Representation Term of the SEBA)
Period: 5 years (always 5 years)
Following this, in the sample timeline, it begins in 2013 and ends in 2018. The Freedom Period (which is the period
when you can file the PCE) will start 60 days prior to December 31, 2018.

ECONOMIC ASPECT
Period: Generally, 3 years
The 60 days under Art. 264 pertains to the signal when you can renegotiate the CBA. This is not the Freedom Period.

Article 264
Either parties can serve a written notice to terminate or modify the agreement at least 60 days prior the
expiration date.
• In the sample, the expiration date is 2016 (that is, 2013 to 2016).
• “At least”, meaning, it is only the minimum. It can be done earlier, or even upon the effectivity of the first
CBA, you can already renegotiate. However, the new CBA will only be effective after the expiration of the
first CBA, except when the employer agrees.

Freedom Period
The last 60 days of the 5-year lifetime of the CBA immediately preceding its expiration. It is the only time when the
law allows the parties to freely serve a notice to terminate, alter or modify the existing CBA. It is also the time when
the majority status of the SEBA may be challenged by another union by filing the appropriate petition for certification
election.

!!! AUTOMATIC RENEWAL CLAUSE (deemed incorporated in all CBAs)

Also known as the Hold Over Principle
Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the terms and conditions
embodied therein still in full force and effect during the 60-day freedom period and/or until a new agreement
is negotiated and ultimately concluded and reached by the parties. The economic aspect will continue to be
enforced.
• For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA which just
expired as it is duty-bound to maintain the status quo by continuing to give the same benefits until a renewal
thereof is reached by the parties.
• On the part of the union, it has to observe and continue to abide by its undertakings and commitments under
the expired CBA until the same is renewed.
NOTES:
• ALL the terms and conditions of the CBA are deemed automatically renewed.
• The Hold Over Principle or even the extension of the economic aspect of an existing CBA will not affect the
representation aspect. It only affects the economic provision.

Why is the representational aspect not affected by the extension of the economic provision?
It can become a circumvention of the law – there can be perpetual extension through continuous re-
negotiations, depriving the other unions to challenge its majority status. Plus, the economic provisions are
negotiated. The majority status is NOT negotiated with the employer. Employer is merely a bystander

What happens if there is no Petition for Certification Election filed within the Freedom Period?
The Majority Status of the current EBR will be maintained.

What if there is a PCE validly filed by another LLO during the freedom period and a new EBR comes into the
picture in January 2019. However, the second CBA is still existing from January 2017 until December 2019.
What will happen to the last 1-year period of the CBA?
It will subsist. The current CBA should be honored and it will still be effective even if there is already a new EBR.
Reason: It was entered into and signed by the an EBR who, however, was overthrown, and you have to find a new
one replacing the current bargaining representative.

!!! REMEMBER: You DO NOT renegotiate the representation aspect. If we let the renegotiation affect the freedom
period, it is as if you were able to negotiate also the majority status and that is against the spirit of the law. The
determination of who is an exclusive bargaining representative is a matter that is solely within the realm of the
employees in the bargaining unit.

#GETTHATBAR2022
FLORES · TARADJI
What if you were not able to finalize the CBA at the end of the 3-year period but you were able to finalize one
after the 3-year period, what will happen?
We have to reckon with Retroactivity Rule.
1. If you are able to finalize a new CBA within 6 months after the expiration, you will retroact this new CBA
to the 1st day following the expiration.
2. However, if you were able to finalize the CBA after 6 months, it has to be agreed upon by the parties.

For example, you are able to finalize a new CBA by April 2017 (within the 6-month period), the new CBA now will
retroact to January 1, 2017 (this is the General Rule).
If you finalized after the 6-month period, say July or August 2017, it will retroact depending on the agreement of the
parties.

ARBITRAL AWARD
An imposition by a government agency or instrumentality.

!!! Meralco v. Quisumbing (1991 and 2000)

In the 1991 Meralco case, Meralco and MEWA were re-negotiating their CBA, but were about to go into
deadlock. However, since Meralco is an industry indispensable for the national interest, the Secretary of
Labor assumed jurisdiction and issued an assumption order. It also issued awards to some of the economic
benefits that were subjects of the renegotiation.

In the 2000 Meralco case, SC explained what an arbitral award is and explained the rules on retroactivity.
The court said that Art. 265 really applies to an agreement. The rules on retroactivity were applied by
analogy because the arbitral award is an approximation of a CBA. It is considered so because had the
deadlock and the intervention not happened, they would have arrived at a CBA anyway.

CBA DEADLOCK
There is deadlock when there is failure in the collective bargaining negotiations between the SEBA and the
employer resulting in an impasse or stalemate on all or some of the issues subject of the negotiation. Despite efforts
to bargain in good faith, the parties have failed to resolve the issues.
• Who declares a deadlock? Either the SEBA or the employer may declare a deadlock. The filing of the notice
of strike (or of lockout) signals the formal declaration of a CBA deadlock.
• Rights of Parties in case of a deadlock
1. Submission of the deadlocked issue to conciliation and mediation by the NCMB.
a. NCMB may take cognizance either motu proprio or through filing of a notice of strike or lockout
or notice of preventive mediation by any of the parties
2. Declaration and actual staging of a strike by the union or lockout by the employer
3. Referral of case to compulsory or voluntary arbitration
4. In case of industries indispensable to the national interest, filing of a petition for assumption of
jurisdiction over the labor dispute or certification thereof to the NLRC for compulsory arbitration

#GETTHATBAR2022
FLORES · TARADJI
E. UNFAIR LABOR PRACTICE
1. Nature, aspects
ULP affects the right to self-organization. This is considered as inimical to the legitimate interest of both labor
and management. ULP is not only a violation of civil right but are also criminal offenses against the state.

The act complained of as a ULP must have a proximate and causal connection with:
(1) Exercise of the right to self-organization
(2) Exercise of the right to collective bargaining or
(3) Compliance with the CBA
*the only exception which does not relate to any of the above → to dismiss, discharge or prejudice or
discriminate against an employee for having given or being about to give testimony under the LC.

WHO COMMITS A ULP?

ULPs can be committed by either the ER or a LO.
▪ It can be committed by a LO as you have seen in the Mendoza case, it is a violation by the union of an
aspect of the right to self-organization of its union members when it did not act on the petition of the
union member and the result of that act was that the member was not able to run for a position in
the union and running for a position in a union is part and parcel of right to self-organization.
▪ HSBC Employees Union vs. NLRC 1997, the court said that the list of ULPs in the LC is not exhaustive
because you can foresee every and all acts that may affect the right to self-organization. If it will affect
the right to self-organization, you can still argue a case for ULP because is not exhaustive –the list is
not exhaustive in nature.

NOTE: For there to be ULP, there must be ER-EE relationship. It must be characterized as a ULP in the LC
but, that even if ER-EE relationship is required for ULP to exist, a dismissed EE who is contesting his
or her dismissal is still considered as an employee for purposes of filing an ULP case.

CRIMINAL ASPECT
Art. 258 makes mention that no criminal prosecution may be instituted without a final judgment by the
Labor Arbiter that a ULP was committed either by the ER or the LO. Wait for the finality of the labor case
before you can file a criminal case for ULP.

The prescriptive period is 1 year. It is one year from the accrual of the ULP. The 1-year prescriptive period
is tolled or interrupted while the administrative proceeding in the LA is on-going.

2. ULP committed by Employers

All these acts pertain to violation of the right to self-organization.
1. Interference with, restraint or coercion of employees in the exercise of their right to self-
organization
• Whether the employer has engaged in conduct which may reasonable tend to interfere with
the free exercise of the employees’ twin rights to self-organization and collective bargaining.
• The employer’s act must be motivated by ill will, bad faith or fraud, or was oppressive to
labor, or done in a manner contrary to morals, good customs, or public policy.

2. Yellow Dog Contract

• It is a contract of employment or at least a clause in the employment contract that tells
you that you will be hired so long as you do not join any LO or if you’re a member already,
you have to resign from that LU– that affects the right to self-organization.

3. Contracting out
• Generally, the act of an employer in having work or certain services being performed by
SEBA members contracted out is not per se ULP. Contracting out of a job is an exercise of
management prerogative.
• However, it is only when the contracting out of a job being performed by SEBA members
will interfere with, restrain or coerce employees in the exercise of their right to self-
organization that it shall constitute ULP.

4. Company domination union (Company Union)

• It is ULP to initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters.
• Generally, the pendency of a ULP case filed against a labor organization participating in
the certification election does not stay the holding thereof, however, the pendency of a
formal charge of company domination against one of the unions participating in the
certification election is a prejudicial question that bars the holding thereof.

#GETTHATBAR2022
FLORES · TARADJI
5. Art. 259(e)
a. Discrimination → it is ULP to discriminate in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or discourage membership in
any labor organization.
b. Union Security Clause → nothing in this Code or in any other law shall stop the parties
from requiring membership in a recognized collective bargaining agent as a condition for
continued employment.

Exceptions to compulsory membership in SEBA:

(1) Religious objectors
(2) Employees already members of a union other than the SEBA at the time the
union security agreement took effect
(3) Confidential employees who are excluded from the rank-and-file or supervisory
bargaining unit
(4) Supervisory employees who are excluded from becoming members of the rank-
and-file union
(5) Employees excluded from the coverage of the union security clause per express
mutual agreement of the parties as stipulated in the CBA

NOTE: This is not violative of the Constitution. Even if it impinges upon the employee’s
right of association, it is the State policy to promote unionism declared by the
Constitution. Ultimately, the individual employee will be benefited by that policy.

Common forms of Union Security Arrangements:

1. Closed-Shop Agreement → a scheme where no person is allowed to be
employed in any departments of the enterprise unless he is, becomes, and for the
duration of the agreement, remains a member in good standing of a SEBA entirely
comprised of or of which the employees in interest are a part.
2. Union-Shop Agreement → when all new regular employees are required to join
the SEBA within a certain period as a condition for their continued employment.
3. Modified Union-Shop Agreement → employees who are not SEBBA members
at the time of signing of CBA are not required to join. However, those who are
employed after the signing of the CBA are required to join the SEBA.
4. Bargaining for Members Only Agreement → this is not allowed in our
jurisdiction because the SEBA is required to represent not only its members but
all the employees covered by the collective bargaining unit.
5. Agency-Shop Agreement → there is no requirement for non-members of the
SEBA to become its members. However, it is required for the non-members to pay
agency fee as a condition for their continued employment.

c. Agency Fee → employees of an appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members, if such non—union members accept the benefits
under the CBA, provided that the individual authorization shall not apply to the non-
members.

6. Filing of charges or giving of testimony

• It is ULP to dismiss, discharge or otherwise prejudice or discriminate against an employee
for giving given or being about to give testimony under the Labor Code.
↳ e. g. reporting of violations of the company so he was dismissed
,

7. CBA-related ULPs
(1) To violate the duty to bargain collectively
• The failure of the employer to submit its counter-proposals to the demands of the SEBA
does not, by itself, constitute refusal to bargain as would amount to ULP.
• If the employer refuses to submit an answer or reply to the written bargaining proposals
of the SEBA, ULP is committed. It shows a lack o sincere desire to negotiate the CBA.
• While the law does not compel the parties to reach an agreement,, it does contemplate
that both parties will approach the negotiation with an open mind and make a reasonable
effort to reach a common ground of agreement.
• Failure of employer to provide updated financial information (after a written request by
the SEBA) constitutes ULP.
• Unilateral changes in wages and terms and conditions is ULP.
• Employer interference in the choice of union bargaining panel is ULP.
• Employer’s act of negotiating with union members individually is ULP.

#GETTHATBAR2022
FLORES · TARADJI
 • SURFACE BARGAINING → going through the motions of negotiating without any legal
intent to reach an agreement. It may only be committed by the employer. It demonstrates
unwillingness to bargain in good faith or is merely hard bargaining.

• BLUE-SKY BARGAINING → making exaggerated or unreasonable proposals. This can

only be committed by a SEBA.

• BOULWARISM → a negotiation tactic in which management opens the negotiation with

a generous offer that is not meant to be negotiated. It is an offer which is ultimate and to
which no further revisions will be made. This take it or leave it offer does not constitute
proper collective bargaining.

(2) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the
settlement of any issue in the collective bargaining
• Attorney’s fees, negotiation fees or similar charges should be paid from the union funds.
Thus, the act of the employer in paying these fees as part of the settlement of any issue
in collective bargaining constitutes ULP.

(3) To violate a CBA

• In order that the violation of CBA becomes ULP, the violation must:
o Be gross in nature AND
o Pertain to economic provisions of the CBA.
• Gross violation of CBA means flagrant and/or malicious refusal to comply with its
economic provisions.

CRIMINAL LIABILITY IN ULP CASES COMMITTED BY THE EMPLOYER

The criminal liability attaches to the responsible officers or agents of the corporation/
partnership/association, who participated in/authorized/ratified the act that constitutes ULP.

#GETTHATBAR2022
FLORES · TARADJI
3. ULP committed by Labor Organizations
1. Restraint and coercion of employees in the exercise of their right to self-organization
• Unlike in ULP by employer, mere interference by the union is not unlawful. (e.g.,
recruiting and convincing employees to join the union). It is the restraint or coercion
which constitutes ULP.
• An employee may or may not join a union.
• Even if there is an existing union security clause, the expulsion from the union would not
ipso facto nor ipso jure lead to expulsion from the job. There must be compliance with
the pre-requisites:
o It must be clearly shown that the act committed by the employee against the
union also constitutes a violation of such clause
o Under such clause, the union is granted the power to recommend to the employer
the errant employee’s termination, and the employer agrees to effect it after
compliance with due process.

2. Discrimination
• The act of the union to cause or attempt to cause (inducing or instigating) an employer
to discriminate against an employee
• An employee who has not become a member of the union because his membership
therein has been discriminatorily denied
• An employee who is already a member of the union but whose membership therein has
been discriminatorily terminated based on any ground other than the usual terms and
conditions.

3. Violation of duty of union to bargain collectively

• The requisites before a union may be held liable for ULP:
o The union is a duly certified SEBA and
o it violates the duty to bargain collectively, or it refuses to bargain collectively with
the employer.

4. FEATHERBEDDING or MAKE-WORK ARRANGEMENT

• A situation when the employees are trying to make it look like they need to spend more
time on a particular task which can be done in a shorter period of time. (Parang
pinapahaba mo ang working hours for an output that would have been done in a shorter
period of time.)
• To cause or attempt to cause an employer to pay 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 for union
negotiations.

5. Demand or acceptance of negotiation fees or attorney’s fees

• The reason for this policy is to prevent undue influence by the employer on the
independence of the union in its decision-making over any issues it may have with the
former.

6. Violation of the CBA

• The violation must be gross and pertains to the economic provisions of the CBA.

CRIMINAL LIABILITY IN ULP CASES COMMITTED BY LABOR ORGANIZATION

Attaches to officers of the labor organization who participated in/authorized/ratified acts which
constituted ULP.

NOTES:
▪ Labor-only contracting (LOC) is a violation of labor laws, but LOC in itself does not constitute ULP
unless LOC was committed in order to defeat the right to self-organization.
▪ Transfer is one of the management prerogatives. It is valid if it is exercised in good faith. It can
constitute ULP if the transfer is done in order to defeat the right to self-organization.

#GETTHATBAR2022
FLORES · TARADJI
F. PEACEFUL CONCERTED ACTIVITIES
Strike Any temporary stoppage of work by the concerted action of the employees as a result of an
industrial or labor dispute.
Picketing The act of workers in peacefully marching to and from before an establishment involved in a labor
↳to publicize the dispute generally accompanied by the carrying and display of signs, placards and banners intended
labor dispute .
to inform the public about the dispute.
Lockout The temporary refusal by an employer to furnish work as a result of an industrial or labor dispute.
It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer.
3. The employer’s act of excluding employees who are union members.

"Industrial or Labor Dispute” → any controversy concerning terms, tenure or conditions of employment, or
concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to
arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of
employer and employee.

1. Strikes
“Strike” means: (SCL) Who initiates the strike ?
1. any temporary stoppage of work
2. by the concerted action of the employees

p.iq?aitieindg1-n-nenceotoeri iea
3. as a result of an industrial or labor dispute.

Strikes encompasses the following:

1. slowdowns
2. mass leaves agent ) bargaining agent CSEBA]
3. overtime boycott
4. sit-downs
( SEBA any LLO .

5. Boycott of products or services

6. attempt to damage
7. destroy
Federationcannot
8. sabotage plant equipment and facilities
9. similar activities
fiteanotieeofstrike .

a. Grounds for Strike

b. Mandatory Procedural Requirements
REQUISITE PURPOSE
1 It must be based on a valid and factual ground: GOOD FAITH STRIKE DOCTRINE
1. ULP of the employer
2. Collective Bargaining Deadlock
f. ↳ a situation
strike
where a Union conducts a
onthebasisofwhatit believed
☆2 A notice of strike must be filed with the NCMB-DOLE. tobeanULP.ba/-euentuaHyitturnsoutnottobeulP .

3 A (24-hour prior) notice must be served to the NCMB- To determine WON there is a need to there still
↓
is

DOLE at least 24 hours prior to the taking of the strike vote supervise the conduct of the strike vote avas"¥ixe
by secret balloting, informing said office of the decision to to prevent any acts of violence and/or
.

conduct a strike vote, and the date, place, and time thereof. irregularities.

4 A strike vote must be taken where a majority of the To ensure that the decision to strike
members of the union obtained by secret ballot in a meeting broadly rests with the majority of the
called for the purpose, must approve it. union members in general and not
with a mere minority.
☆5 A strike vote report should be submitted to the NCMB- To afford the NCMB of opportunity to
DOLE at least 7 days before the intended date of the strike. verify the truth and veracity of the
majority vote by the union members in
support of the intended strike.
6 Except in cases of union-busting, the cooling-off period of 15 To provide an opportunity for
days (ULP) or 30 days (CBD) should be fully observed, and mediation and conciliation of the
fromtillrigofnotiieofstrike .
dispute by the NCMB-DOLE with the end
in view of amicably settling it.
7 The 7-day waiting period/strike ban reckoned after the To verify whether the projected strike
submission of the strike vote report to the NCMB-DOLE really carries the approval of the
should also be fully observed in all cases. majority of the union members.

All the foregoing requisites, although procedural in nature, are MANDATORY and failure of the union to comply with
any of them would render the strike illegal.
#GETTHATBAR2022
FLORES · TARADJI
DISCUSSION
1. It must be based on a valid and factual ground.

The law recognizes only 2 grounds in support of a valid strike:

1. Collective bargaining deadlock (Economic Strike)
2. Unfair labor practice (Political Strike).
A strike not based on any of these two grounds is illegal.

NOTES:
• The following are not valid grounds for a strike:
o Inter-union or intra-union dispute
o Violation of labor standards
o Wage distortion
o Ordinary violation of CBA
▪ Only gross violation of CBA constitutes an unfair labor practice.
▪ Ordinary violation of CBA is a mere grievance which should be processed thru the
grievance machinery and voluntary arbitration.

2. A notice of strike must be filed with the NCMB-DOLE.

No labor organization shall declare a strike without first having filed a notice of strike.

3. A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the taking of
the strike vote by secret balloting, informing said office of the decision to conduct a strike vote,
and the date, place, and time thereof.
The purpose of this 24-hour prior notice is:
• To inform the NCMB of the intent of the union to conduct a strike vote
• To give 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
• Should it decide to supervise, to give it ample time to prepare for the deployment of the requisite
personnel.

4. A strike vote must be taken where a majority of the members of the union obtained by secret
ballot in a meeting called for the purpose, must approve it. only the striking union
• A strike without the majority support of the union members is called a “wildcat strike.”
• Duration of the validity of the majority approval of a strike → The majority decision to stage
a strike is valid for the duration of the dispute based on substantially the same grounds
considered when the strike vote was taken.

5. A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of the strike.
• The evident intention of the law is to afford the NCMB of opportunity to verify the truth and
veracity of the majority vote by the union members in support of the intended strike.
• The strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the
actual staging of the intended strike, subject to the observance of the cooling-off periods provided
under the law.

6. Except in cases of union-busting, the cooling-off period of 15 days, in case of unfair labor practices
of the employer, or 30 days, in case of collective bargaining deadlock, should be fully observed.

GR:
Bargaining Deadlock Unfair Labor Practice
30 days 15 days
Reckoning of the cooling-off periods → from the time the notice of strike is filed with the NCMB.

EXP: Union Busting

In case of dismissal from employment of union officers (not ordinary members) duly elected in
accordance with the union constitution and by-laws which may constitute union-busting
because the existence of the union is threatened by reason of such dismissal, the 15-day cooling-
off period does not apply and the union may take action immediately after the strike vote is
conducted and the results thereof duly submitted to the regional branch of the NCMB.

NOTE: In cases of union-busting, only the 15-day cooling-off period need not be observed. All the
other requisites must be fully complied with.

#GETTHATBAR2022
FLORES · TARADJI
 7. The 7-day waiting period/strike ban reckoned after the submission of the strike vote report to
the NCMB-DOLE should also be fully observed in all cases.
• The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-
off period prescribed by law. The latter cannot be substituted for the former and vice-versa.
• The cooling-off period is counted from the time of the filing of the notice of strike. The 7-day
waiting period/strike ban is reckoned from the time the strike vote report is submitted.
• The requirements of cooling-off period and 7-day waiting period/strike ban must both be
complied with. The labor union may take the strike vote and report the same to the NCMB-DOLE
within the statutory cooling-off period. In this case, the 7-day waiting period/strike ban should
be counted from the day following the expiration of the cooling- off period.
• In other words, the 7 days should be added to the cooling-off period of 15 days or 30 days and it
is only after the lapse of the total number of days after adding the 2 periods that the
strike/lockout may be lawfully and validly staged.
• Deficiency of even 1 day of the cooling-off period and 7-day strike ban is fatal.
• One-day strike without complying with the 7-day strike ban is illegal.

Different types of Strikes

Type of Strike Rules

Strikes in hospital, clinics and • Striking union or lock-out employer should provide or maintain an
medical institutions effective skeletal workforce of medical personnel who shall be
unhampered and unrestricted to insure adequate protection of the
patients.
• DOLE Secretary may immediately assume within 24 hours from
knowledge and occurrence of strike OR
• Certify to NLRC for compulsory arbitration

Strike in Government Service Labor Code classifies employees in the government sector as:

1. Employees of GOCCs under the Corporation Code (Without Original

Charter), hence, covered by Labor Code.
• Possess and enjoy right to self-organization and to strike like
any employees in the private sector

2. Employees of Government and its political subdivisions or

instrumentalities, including GOCCs with original charters, hence,
covered by Civil Service Law.
• They possess right to self-organization BUT no right to strike

RATIO:
1. There is no express provision in the Constitution granting them the
right to strike.
2. In absence of a statute, public employees do not have the right to
engage in concerted work stoppages for any purpose.

#GETTHATBAR2022
FLORES · TARADJI
 c. Legal Strike vs. Illegal Strike
Legal Strike Illegal Strike
One called for a valid purpose and conducted One staged for a purpose not recognized by law, or if for a valid
through means allowed by law. purpose, conducted through means not sanctioned by law, or
one that did not follow the procedural requirements.

When is a STRIKE considered ILLEGAL?

A strike is illegal if it is declared and staged:
1. Without complying with the procedural but mandatory requisites (See 7 requisites above).
2. For unlawful purpose such as to compel the dismissal of an employee or to force recognition of the union
or for trivial and puerile purpose or to circumvent contracts and judicial orders.
3. Based on non-strikeable or invalid grounds such as:
a) Inter-union or intra-union disputes.
b) Simple violation of CBA in contrast to gross violation thereof which is deemed ULP.
c) Violation of labor standards.
d) Legislated wage orders (wage distortion).
4. Without first having bargained collectively.
5. In violation of the “no strike, no lockout” clause in the CBA.
6. Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust the
steps provided therein.
7. While conciliation and mediation proceeding is on-going at the NCMB.
8. Based on issues already brought to voluntary or compulsory arbitration.
9. During the pendency of a case involving the same ground/s cited in the notice of strike.
10. In defiance of an assumption or certification or return-to-work order.
11. In violation of a temporary restraining order or an injunction order.
12. After the conversion of the notice of strike into a preventive mediation case.
13. Against the prohibition by law.
14. By a minority union.
15. By an illegitimate union.
16. By dismissed employees.
17. In violation of the company code of conduct which prohibits “inciting or participating in riots, disorders,
alleged strikes or concerted actions detrimental to [Toyota’s] interest,” The penalty for which is dismissal.
18. As protest rallies in front of government offices

d. Prohibited Acts During Strike

Despite the validity of the purpose of a strike and compliance with the procedural requirements, a strike
may still be held illegal where the means employed are illegal.

The means become illegal:

must be pervasive and not isolated
↳ personal liability
1. Violation of Article 279(e) of the Labor Code
a. Commit any act of violence, coercion, or intimidation or
b. Obstruct the free ingress to or egress from the employer’s premises for lawful purposes
c. Obstruct public thoroughfares.
2. Commission of crimes and other unlawful acts in carrying out the strike
3. Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in
connection with the assumption of jurisdiction or certification order.
4. Other breaches of existing laws

NOTES:
• Whoever commits these acts (whether union officers or members) is answerable for the acts.
• Acts of violence justify the dismissal of the guilty strikers.
• Mere filing of charges against an employee for alleged illegal acts during a strike does not by itself
justify dismissal. The charges must be proved at an investigation duly called where the employee
shall be given an opportunity to defend himself.
• Where violence was committed on both sides (employer and employees) during a strike, such
violence cannot be a ground for declaring the strike as illegal.
• Liability for illegal acts should be determined on an individual basis. For this purpose, the
individual identity of the union members who participated in the commission of illegal acts may
be proved thru affidavits and photographs. Simply referring to them as “strikers,” or
“complainants in this case” is not enough to justify their dismissal.
• To effectively hold ordinary union members liable, those who participated in the commission of
illegal acts must not only be identified but the specific illegal acts they each committed should be
described with particularity.

#GETTHATBAR2022
FLORES · TARADJI
 e. Liability of Union Officers and Members for Illegal Strike and Illegal Acts
During Strike
Participation in Lawful Participation in Illegal Commission of Illegal
Strike Strike Acts
Union Officers Such participation should not The mere declaration of The legality of the strike
constitute sufficient ground for illegality of the strike will is irrelevant.
the termination of his result in the termination of
employment, even if a all union officers who The commission of an
replacement has already been knowingly participated in the illegal act in the course
hired by the employer during illegal strike. of the strike, be it legal
such lawful strike. or illegal, can result in
It is not required, for purposes the valid termination of
of termination, that the officers employment.
should commit an illegal act
during the strike.

However, absent any showing

that the employees are union
officers, they cannot be
dismissed based solely on the
illegality of the strike.

Union Member or Not deemed to have abandoned The mere finding or The legality of the strike
Ordinary his employment. declaration of illegality of a is irrelevant.
Workers strike will not result in
Such participation should not termination of ordinary union The commission of an
constitute sufficient ground for members. illegal act in the course
the termination of his of the strike, be it legal
employment, even if a To be validly terminated, it or illegal, can result in
replacement has already been must be shown by clear the valid termination of
hired by the employer during evidence that the employee has employment.
such lawful strike. committed illegal acts during
the strike.

Reason for distinction: The reason for this distinction is that the union officers are charged of the knowledge of the
validity of the strike. They have the duty to guide their members to respect the law.

NOTES:
• The fact that the employees are signatories to the CBA does not in itself sufficiently establish their status as
union officers during the illegal strike. Neither were their active roles during the bargaining negotiations be
considered as evidence of their being union officers.
• Only the union officers during the period of illegal strike are liable. If the employees acted as union
officers after the strike, they may not be held liable and, therefore, could not be terminated in their capacity
as such.
• Shop stewards are union officers; hence, they should be terminated upon the declaration of the illegality of
the strike. A shop steward is a person elected by workers, for example in a factory, to represent them in
dealings with management.
• Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day or even for
less than 10 hours. This holds true in cases of defiance of the assumption/ certification order issued in
national interest cases.
• No wholesale dismissal of strikers allowed. The employer cannot just unceremoniously dismiss a hundred of
its employees in the absence of clear and convincing proof that these people were indeed guilty of the acts
charged and then, afterwards, go to court to seek validation of the dismissal it whimsically executed.

#GETTHATBAR2022
FLORES · TARADJI
2. Picketing
“Picketing” is the act of workers in peacefully marching to and from before an establishment involved in a
labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to
inform the public about the dispute.

1. REQUISITES:
The most singular requirement to make picketing valid and legal is that it should be peacefully
conducted.
1. The picket should be peacefully carried out
2. There should be no act of violence, coercion or intimidation attendant thereto
3. The ingress to or egress from the company premises should not be obstructed; and
4. Public thoroughfares (road/path) should not be impeded.

2. The requisites for a valid strike are not applicable to picketing.

The 7 requisites for a valid strike discussed above do not apply to picketing.

3. Right to picket is protected by the constitution and the law.

Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to conduct
peaceful concerted activities under Section 3, Article XIII thereof, the right to picket is guaranteed under
the freedom of speech and of expression and to peaceably assemble to air grievances under Section
4, Article III (Bill of Rights) thereof.

4. Effect of the use of foul language during the conduct of the picket.
In the event the picketers employ discourteous and impolite language in their picket, such may not result
in, or give rise to, libel or action for damages.

5. Picketing vs. Strike

• To strike is to withhold or to stop work by the concerted action of employees as a result of an
industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking
employees outside of the company compound.
• While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its
incidents to inform the public of what is happening in the company being picketed.
• Picketing is but one strike activity separate and different from the actual stoppage of work.

CASE LAW
Phimco Industries, Inc. v. Phimco Industries Labor Association
• Protected picketing does not extend to blocking ingress to and egress from the company
premises. That the picket was moving, was peaceful and was not attended by actual violence may
not free it from taints of illegality if the picket effectively blocked entry to and exit from the
company premises.

Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc.
• The bare fact that petitioners were given a Mayor’s permit is not conclusive evidence that their
action/activity did not amount to a strike. The Mayor’s description of what activities petitioners
were allowed to conduct is inconsequential. What is definitive of whether the action staged by
petitioners is a strike and not merely a picket is the totality of the circumstances surrounding the
situation.

#GETTHATBAR2022
FLORES · TARADJI
3. Lockouts
“Lockout” means the temporary refusal by an employer to furnish work as a result of an industrial or labor
dispute.

Elements:
1. Temporary refusal to furnish work by the employer;
2. Occasioned by industrial or labor dispute

It consists of the following: (SMT)

1. Shutdowns
2. Mass retrenchment and dismissals initiated by the employer
3. The employer’s act of excluding employees who are union members.

a. Grounds for Lockout

b. Mandatory Procedural Requirements
1 It must be based on a valid and factual ground
1. ULP of the labor organization
2. Deadlock

2 A notice of lockout must be filed with the NCMB-DOLE

3 A (24-hour prior) notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior
to the taking of the lockout vote by secret balloting, informing said office of the decision to conduct a
lockout vote, and the date, place, and time thereof.

4 A lockout vote must be taken where a majority of the members of the Board of Directors of the
corporation or association or of the partners in a partnership obtained by secret ballot in a meeting
called for the purpose, must approve it.

5 A lockout vote report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of the lockout.

6 The cooling-off period of 15 days, in case of unfair labor practices of the labor organization, or 30
days, in case of collective bargaining deadlock, should be fully observed, and

7 The 7-day waiting period/lockout ban reckoned after the submission of the lockout vote report to
the NCMB-DOLE should also be fully observed in all cases.

4. Assumption of Jurisdiction by the DOLE Secretary

When in the opinion of the DOLE Secretary, the labor dispute causes or will likely cause a strike or lockout
in an industry indispensable to the national interest, he is empowered to do either of 2 things:
1. He may assume jurisdiction over the labor dispute and decide it himself; or
2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which
shall hear and decide it.
This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout.

What constitute a National Interest Case?

For the guidance of the workers and employers in the filing of petition for assumption of jurisdiction, the
following industries/services are hereby recognized as deemed indispensable to the national interest:
a. Hospital sector
b. Electric power industry
c. Water supply services, to exclude small water supply services such as bottling and refilling stations
d. Air traffic control and
e. Such other industries as may be recommended by the National Tripartite Industrial Peace Council
(NTIPC).
Obviously, these industries are not exclusive as other industries may be considered indispensable to the
national interest based on the appreciation and discretion of the DOLE Secretary.

NOTES:
• Prior notice and hearing are not required in the issuance of the assumption or certification order.
• The DOLE Secretary may seek the assistance of law enforcement agencies like the PNP to ensure
compliance with the provision thereof as well as with such orders as he may issue to enforce the
same.
#GETTHATBAR2022
FLORES · TARADJI
RETURN-TO-WORK ORDER
• It is a STATUTORY PART AND PARCEL of assumption/certification order even if not expressly stated
therein.
o The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest
or certifies it to the NLRC for compulsory arbitration, such assumption or certification has the effect
of automatically enjoining the intended or impending strike or, if one has already been
commenced, of automatically prohibiting its continuation.
o The mere issuance of an assumption or certification order automatically carries with it a return-to-
work order. It is thus not necessary for the DOLE Secretary to issue another order directing the
strikers to return to work. It is error therefore for striking workers to continue with their strike
alleging absence of a return-to-work order.

• Nature of Return-To-Work Order

o Return-to-work order is compulsory and immediately executory in character. It should be strictly
complied with by the parties even during the pendency of any petition questioning its validity in
order to maintain the status quo.
o Filing of a motion for reconsideration does not affect the enforcement of a return-to-work order
which is immediately executory.

NOTES:
• The issue of legality of strike is immaterial in enforcing the return-to-work order.
• To implement the return-to-work order, the norm is actual reinstatement (status quo ante order).
o Very Narrow Exception: Payroll reinstatement in lieu of actual reinstatement may
properly be resorted to when special circumstances exist that render actual
reinstatement impracticable or otherwise not conducive to attaining the purposes of the
law. (e.g., when the semester was already on-going, and the school had to hire other
employees already. The actual reinstatement would be detrimental to the students because
since there would be sudden change of professors)

GR: Back wages are granted to indemnify an illegally dismissed employee for his loss of earnings
during the whole period that he is out of his job.
EXP: Back wages are NOT granted to employees participating in an illegal strike.
EXP TO EXP: Employees terminated are entitled to back wages when:
(1) When the employees were willing to go back to work but the employer prevented
them to do so, AND
(2) The strike should be LEGAL.

NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER

• It is a POLICE POWER measure.
• The power to issue assumption or certification orders is an extraordinary authority granted to the President
and to his alter ego, the DOLE Secretary, the exercise of which should be strictly limited to national interest
cases. This is done for the promotion of the common good considering that a prolonged strike or lockout can
be inimical to the national economy.
• It is to protect the NATIONAL INTEREST and not for the protection of labor nor of capital. It is for the benefit
of the State protecting itself.

EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS

• The defiance by the union, its officers and members of the Labor Secretary's assumption of jurisdiction or
certification order constitutes a valid ground for dismissal.
o A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or certification
order becomes a prohibited activity and thus illegal.
o From the moment a worker defies a return-to-work order, he is deemed to have abandoned his job.
o By so defying, the workers have forfeited their right to be readmitted to work.
• All defiant strikers, officers or ordinary members, are deemed dismissed.
• Period of defiance of the return-to-work order, not material.

NOTES:
• The assumption/certification order may be served at any time of the day or night.
• No practice of giving 24 hours to strikers within which to return to work. There is no law or
jurisprudence recognizing this practice.
• The defiant strikers could be validly replaced.
• The refusal to acknowledge receipt of the assumption/certification orders and other processes is an
apparent attempt to frustrate the ends of justice, hence, invalid. The union cannot be allowed to thwart the
efficacy of the said orders issued in the national interest through the simple expediency of refusing to
acknowledge receipt thereof.

#GETTHATBAR2022
FLORES · TARADJI
5. Injunctions
GR: No temporary or permanent injunction or restraining order in any case involving or growing out of
labor disputes shall be issued by any court or other entity.

EXP: LA cannot issue injunctive writs

→
1. NLRC can enjoin or restrain an 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, if not
restrained or performed forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party.

Requirements for Injunction to Issue:

(1) Hearing of testimony of witnesses, with opportunity for cross-examination, in support of
verified complaint, and testimony in opposition thereto
(2) A finding of fat by the NLRC that:
a. Prohibited accts will be committed or have been committed and will be continued
unless restrained
b. Substantial and irreparable injury will follow
c. Greater injury will be inflicted upon complainant by the denial of relief than will
be inflicted upon defendants by the granting of the relief
d. Complainant has no adequate remedy
e. The public officers charged with the duty to protect complainant’s property are
unable or unwilling to furnish adequate protection
(3) Notice of hearing has been served to all persons against whom relief is sought and the
local chief executive
(4) Bond in an amount to be fixed by NLRC

2. NLRC can enjoin or restrain the commission of the prohibited acts.

3. Innocent Bystander Rule → the no-injunction rule does not apply in cases where the interests of
an innocent bystander are concerned. Thus, in a case where the Union declared a strike against
its employer and picketed the premises, preventing the peaceful passing of other persons not
connected with the employer, the Court upheld the injunction granted by a regular court.

#GETTHATBAR2022
FLORES · TARADJI
Dual Juridical Relationship
> boundary hulog scheme
-

>
IER and vendor-vendeekel-ation.nl'p
VI. TERMINATION OF EMPLOYMENT
A. SECURITY OF TENURE

1. Categories of Employment as to Tenure

skilled ↑ semi-skilled & other industrial occupations who are non apprenticeable
-

there must ← APPRENTICES AND LEARNERS MIN WAGE 75%

be an
.

There is no EER that exists in apprenticeship and learnership arrangements. If you go beyond the
apprenticeship apprenticeship and learnership period, you become a regular employee, not even a probationary employee.
agreement
& program Typically, in an apprenticeship arrangement, this involves skilled work. You can probably imagine operators
approved by of heavy machinery, as opposed to learnership arrangement which can cover learning how to do skirting or
SOLE .

↓ folding napkins, yung nag-aayos ng tables in catering.

absent this ,

there will be
With respect to duration, in apprenticeship, 3-6 months. In learnership, not exceeding 3 months. Again, there
is no EER, so long as these agreements are approved by the DOLE. Otherwise, if there is no approval of DOLE,
EER .

or no arrangement exists, or the arrangement exceeds the duration, then there is EER.

REGULAR An arrangement where the employee:

1. Has been engaged to perform tasks usually necessary or desirable to the
usual trade or business of the employer (by nature of work)
2. Has rendered at least 1 year of service, whether such service is continuous or
broken, with respect to the activity in which he is employed (by length of
service) or
3. Is allowed to work after a probationary period (by probationary
employment).

Test to Determine Regular Employment

➔ The reasonable connection between the particular activity performed by the
employee to the usual trade or business of the employer.
➔ The performance of a job for at least a year is sufficient evidence of the job’s
necessity if not indispensability to the business.

NOTES:
• If there is reasonable doubt as to the status of employment, the default
employment should always be regular.
• The phrase “to perform activities which are usually necessary or desirable in
the usual business or trade of the employer” includes performance of
peripheral jobs indirectly related to the principal business of the employer.
• No declaration or appointment papers is necessary to make one a regular
employee.

CASUAL This refers to those who are not regular, project or seasonal employees. There is
casual employment where:
↳ e.g. plumber (1) an employee is engaged to perform a work which is merely incidental to the
business of the employer, and
(2) such job, work or service is for a definite period made known to the
employee at the time of engagement.

GR: Activity performed is not usually necessary or desirable in the usual business
or trade of the employer, not project and not seasonal.

EXP: If he has rendered at least 1 year of service, whether such service is

continuous or broken, he is considered a regular employee with respect to
the activity in which he is employed and his employment shall continue while
such activity exists.

#GETTHATBAR2022
FLORES · TARADJI
PROBATIONARY Probationary employment exists where the employee, upon his engagement, is made
to undergo a trial period during which the employer determines his fitness to
qualify for regular employment based on reasonable standards made known to him
at the time of his engagement.

GR: Probationary employment shall not exceed 6 months from the date the
employee started working.
• When the employer renews a contract of employment after the lapse
of the 6-month probationary period, the employee thereby becomes a
regular employee.
EXP:
(1) Covered by an apprenticeship agreement stipulating a longer period
(2) Voluntary agreement of parties, especially when the nature of work requires
a longer period
(3) The employer gives the employee a second chance to pass the standards set
(4) When a longer period is required and established by company policy

NOTES:
• Double or successive probation is not allowed.
• The employer and employee may extend by agreement the probationary period
of employment beyond 6 months, but it cannot be ad infinitum.
• The regularization standards must be made known to the employee at the time
of his engagement. Failure to do so, the employee is deemed a regular employee.
• Except:
(1) When the job is self-descriptive (e.g., cooks, maids)
(2) Probationary managerial employee
(3) Probationary employees whose tasks involve application of
discretion and intellect (e.g., lawyers, artists).
• Probationary employee enjoys security of tenure. He can only be terminated
under any of the following grounds:
(1) Just causes
(2) Authorized causes
(3) When he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer or employee at the
time of his engagement.
• If the termination is for just or authorized cause, it may be done anytime during
probation.
• Termination, to be valid, must be done before the lapse of the probationary
period.
• If the cause of termination is failure to qualify as regular employee, there is no
requirement of notice and hearing.
• A probationary period cannot be stipulated within the fixed period of
employment.
• It cannot be stipulated that after hurdling probationary period, the employee
does not become regular but merely a project employee.
• The employment is deemed regular if the employment contract has no
stipulation on probationary period.
• A verbal contract of probationary employment is invalid.
• Regular workers of previous owner of business may be hired as probationary
employees of new owner.
• Probationary Period for Private School Teachers
(1) The teacher is full-time teacher
(2) The probationary period is 3 consecutive years
(3) Such service must have been satisfactory.

Who is a full-time teacher?

Requirements:
(1) Possess at least the minimum academic qualification prescribed
(master’s degree or a license for the profession taught)
(2) Paid monthly or hourly, based on regular teaching loads
(3) Total working day of not more than 8 hours a day is devoted to the
school
(4) No other remunerative occupation elsewhere requiring regular hours
of work that will conflict with the working hours in school
(5) Not teaching full-time in any other educational institution.

#GETTHATBAR2022
FLORES · TARADJI
 PROJECT One whose employment has been fixed for a specific project or undertaking, the
completion of which has been determined at the time of engagement of the
Gmayormaynot employee.
bewithinthe
usual REQUISITES:
regular (1) The employee was assigned to carry out a specific project or undertaking
business oftener (2) The duration and scope of which were specified at the time they were
→
engaged for such project.
description of completion stage Notnecessarily
employer -

company GR: Project employees are not regular employees. specific numberof
days .

EXP: Where the employment or project employees is extended long after the
supposed project has been finished.
MARAGUINOTFORMU# • Continuous re-hiring of project employees even after cessation of
① continuous rehiring project
② sametasksornatureoftasks • Tasks performed are vital, necessary and indispensable to the usual
under different projects business or trade of the employer.
③ tasksarevltal
,
necessary
and indispensable EXP TO EXP: Construction Industry.
④ initially a project employee
,

but eventually acquire NOTES:

regular status
.

• 1-year duration of work is pertinent only in casual employees, but not in

seasonal and project employees.
• If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required. The completion of work or project
automatically terminates employment.
• The termination of his employment in the particular project or undertaking is
reported to the Regional Office of the DOLE having jurisdiction over the
workplace, within 30 days following the date of his separation.
• Project employees enjoy security of tenure only during the term of their
project employment.
• Project employees presumably become regular employees if they are allowed
to work beyond the completion of the project or any phase thereof in which
they are employed.
• Work Pool Principle – refers to a group of workers from which an employer
(like a construction company) deploys or assigns to its various projects or any
phase thereof.
• Mere membership in the work pool does not result in the worker’s becoming
regular employees by reason of that fact alone. However, a project employee
who is a member of a work pool may attain regular status as a project
employee.

Project Fixed Term

Requires a particular project to The decisive determinant is not the
determine the beginning and end of activity that the employee is called
contract. upon to perform, but the day certain
agreed upon by the parties.
.
SEASONAL Work or services to be performed is seasonal in nature and the employment is for
the duration of the season. (e.g., farm workers)

NOTES:
• Regular Seasonal Employees → those who are repeatedly engaged to
perform the same tasks for more than 1 season.
o The nature of their relationship with the employer is such that during
off season, they are temporarily laid off, but re-employed during the
summer season or when their services may be needed.
o During off season, the EER is not severed, but they the seasonal
employee is merely considered on leave of absence without pay.
o REQUIREMENTS
(1) Should perform work that are seasonal in nature, and
(2) Should be employed for more than 1 season.
• When seasonal employees are free to contract their services with other farm
owners, they cannot be considered as regular seasonal employees.

#GETTHATBAR2022
FLORES · TARADJI
FIXED TERM REQUIREMENTS:
>
from jurisprudence
(1) The fixed period of employment was knowingly and voluntarily agreed upon
by the parties without any force, duress, or improper pressure or any other
circumstances vitiating his consent.
(2) It satisfactorily appears that the employer and the employee dealt with each
other on more or less equal terms.

RULES:
• The fact that an employee is engaged to perform activities that are usually
necessary or desirable in the usual trade or business of the employer does not
-

preclude the fixing of a period for a definite period. An employee can be a

-

regular employee with a fixed term contract.

• Notice of termination is not necessary.
• Employee is deemed regular if the contract failed to state the specific period
of employment
• Employees allowed to work beyond fixed term become regular employees.
• Successive renewals of fixed-period contracts will result to regular
employment.
• 555 Doctrine → the scheme of the employer in hiring workers on a uniformly
fixed 5-month basis and replacing them upon the expiration of their contracts
with other workers with the same employment status circumvents their right
to security of tenure.
• Termination prior to lapse of fixed term should be for a just or authorized
cause
• Liability for illegal dismissal of fixed employees is only for the salary for the
unexpired portion.
• OFWs can never acquire regular employment because they can only be
engaged on a fixed-term basis.

WORK-POOL Generally, employees may or may not be members of a work pool. A work pool refers
EMPLOYEES to a group of workers from which an employer like a construction company deploys
or assigns to its various projects or any phase/s thereof.

Types of Employees in the Construction Industry

1. Non-Project Employees → those employed without reference to any
particular construction project or phase. They are considered regular
employees.
2. Project Employees → those employed in connection with a particular
construction project or phase thereof and such employment is coterminous
with each project or phase of the project to which they are assigned.

Mere membership in the work pool does not result in the worker’s becoming regular
employees by reason of that fact alone. However, a project employee who is a member
of a work pool may attain regular status as a project employee.

SECURITY 3 Parties Involved:

GUARDS (1) Security Service Contractor (SSC) or Private Security Agency (PSA) as
the contractor or subcontractor
(2) Security Guards as the employees of SSC/PSA
(3) Principal or Client of SSC/PSA

Probationary Employment Regular Employment

Probationary period of newly hired (1) Security guard who is allowed
security guard shall not exceed 6 to work after the probationary
months. period
(2) In the absence of a valid
Their service may be terminated for probationary contract
failure to meet reasonable standards or (3) Repeated hiring-firing-rehiring
criteria made known by the SSC/PSA at scheme for short periods of
the time of their engagement, or for any time, the aggregate duration of
just cause contained in the probationary which is at least 6 months
contract.

#GETTHATBAR2022
FLORES · TARADJI
 Reserved Status or Floating Status
A security guard may be placed in a work pool or in reserved status due to lack of
service assignment after the expiration or termination of the Service Agreement with
the principal where he is assigned, or due to the temporary suspension of security
service operations, or due to valid relief from the current place of work and there is
no work assignment available.
• If after a period of 6 months, the SSC/PSA cannot provide work or give an
assignment to the reserved security guard, the latter can be separated from
service and shall be entitled to separation pay.
• An assignment of the security guard as a reliever for less than 1 month shall
not be considered as an interruption of the 6 months period.
• Temporary off-detail or the period the security guards are made to wait until
transferred or assigned does not constitute constructive dismissal, so long as
such status does not continue beyond 6 months.
• When a security guard is placed on a floating status, he or she does not
receive any salary or financial benefit provided by law.
• No security guard can be placed on reserved status in any of the following:
(1) After expiration of a service contract, if there are other principals where
he can be assigned
(2) As a measure to constructively dismiss the security guard
(3) As an act of retaliation for filing any complaint against the employer for
violation of labor laws

FLOATING While the floating status rule is traditionally applicable to security guards, this is
applied as well to other industries when, as a consequence of the bona fide
suspension of the operation of business or undertaking, the employer is constrained
to put employees on floating status for a period not exceeding 6 months. Thus, this is
also applicable to employees of legitimate contractors or subcontractors.
• Floating status beyond 6 months amounts to illegal or constructive dismissal.
• A complaint filed before the lapse of the 6-month period is premature.

CONDITIONAL EMPLOYMENT
There exists no EER because there are some requirements (condition precedent) which were not fulfilled.
In a contract with a suspensive condition, if the condition does not happen, the obligation does not come into
effect. Thus, until and unless petitioner complied with the satisfactory background check, there exists no
obligation on the part of ANZ to recognize and fully accord him the rights under the employment contract. .
Hence, no illegal dismissal to speak of because there was no employer-employee relationship.

2. Legitimate Subcontracting vs. Labor-Only Contracting

Article 106. Contractor or Subcontractor
Whenever an employer enters into a contract with another person for the performance of the former’s
work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in
accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor
to such employees to the extent of the work performed under the contract, in the same manner and
extent that he is liable to employees directly employed by him.

LEGITIMATE JOB CONTRACTING LABOR-ONLY CONTRACTING

No EER exists between the contractor’s employees and An EER exists between the principal and the employees
the principal supplied by the labor-only contractor.
The principal is considered only an indirect employer The principal is considered the direct employer
Joint and several obligation of the principal and the Joint and several obligation of the principal and the
legitimate job contractor is only for a limited purpose, labor-only contractor is for a comprehensive purpose,
that is, to ensure that the employees are paid their that is, to prevent circumvention of labor laws.
wages.
*the principal becomes solidarily liable with the labor-
*the principal becomes solidarily liable with the job only contractor with the latter’s employees in the same
contractor only for the payment of the employee’s wages manner and extent that the principal is liable to
whenever the contractor fails to pay the same. Other than employees directly hired by him/her.
this, the principal is not responsible for any other claims.
The legitimate job contractor undertakes to perform a The labor-only contractor merely provides, supplies,
specific job for the principal. and places personnel to work for the principal. z

#GETTHATBAR2022
FLORES · TARADJI
 a. Elements
LEGITIMATE JOB CONTRACTING ARRANGEMENT
This refers to an arrangement whereby a principal agrees to farm out to a contractor the performance
or completion of a specific job or work within a definite or predetermined period, regardless of
whether such work is to be performed or completed within or outside the premises of the principal.
PERMISSIBLE COMMUTING :
ELEMENTS:
1. The contractor is engaged in a distinct and independent business and undertakes to perform
the job or work on its own responsibility according to its own manner and method
2. The contractor has substantial capital to carry out the job farmed out by the principal on his
account, manner and method, investment in the form of tools, equipment, machinery and
supervision
3. In performing the work farmed out, the contractor is free from the control and/or direction of
the principal in all matters connected with the performance of the work, except as to the
result thereto
4. The Service Agreement ensures compliance with all the rights and benefits for all the
employees of the contractor under labor laws
Absence of any of the foregoing makes the arrangement a labor-only contracting arrangement.

Tests to Determine Existence of Legitimate Job Contracting Arrangement

1. Right of Control Test
2. Substantial Capital or Investment Test
3. Direct Relation to Principal’s Business Test
4. Legal Rights and Benefits Compliance Test

Right of Control Test Substantial Capital or Direct Relation to Legal Rights and
Investment Test Principal’s Business Benefits Compliance
Test Test
This addresses the issue of This addresses the issue of This addresses the issue This addresses the issue
whether the contractor’s whether the contractor has of whether the of whether the Service
manner and method of substantial capital or employees recruited, Agreement between the
performing the contracted investment in the form of supplied or placed by a principal and contractor
job, work, or service are tools, equipment, contractor are assures the employees
completely free from the machineries, work premises, performing activitiesof the latter farmed out
control and direction of and other materials which which are directly related to the former of their
the principal except as to are necessary in the conduct to the main business of entitlement to all labor
the result thereof. of its business. the principal. If yes, then and occupational safety
it is merely a labor-only and health standards,
If the principal (and not Substantial Capital contractor. free exercise of their
the legitimate contractor) (effective 2017. Prior to this, right to self-
actually controls the it was P3M) Where the contractor’s organization, security of
manner of the employees’ 1. Corporations, employees are tasked to tenure and social and
work, then it is merely a Partnerships or undertake activities welfare benefits.
labor-only contracting. Cooperatives – Paid usually necessary or
Control is manifested Up Capital of at least desirable in the usual A simple stipulation in
through the power to hire, P5M business or trade of the the Agreement on such
fire, pay, discipline and 2. Single Proprietorship principal, the contractor compliance would
impose penalties, or – Net Worth of at least is considered as a labor- suffice.
through actual P5M only contractor and such
supervision of employees are
performance. Per jurisprudence, considered as regular
substantial capital and employees of the
investment in tools, etc. principal.
should be treated as 2
distinct and separate factors
in determining whether
legitimate job contracting
exists. Thus, once a
contractor has duly proved
that it has substantial
capitalization, it need not
prove that it has investment
in tools, equipment, etc. (or
vice versa).

#GETTHATBAR2022
FLORES · TARADJI
[DO 174-17] Legitimate contracting is NOT applicable to:
1. BPO (Business Process Outsourcing)
2. KPO (Knowledge Process Outsourcing)
3. LPO (Legal Process Outsourcing)
4. IT Infrastructure Outsourcing
5. Application Development
6. Hardware/Software Support
7. Medical Transcription
8. Animation Services
9. Back Office Operations/Support

LABOR-ONLY CONTRACTING ARRANGEMENT

This refers to an arrangement where the contractor merely recruits, supplies or places workers to perform a job or
work for a principal, and the elements thereof are present. This is expressly prohibited under Article 106 of the
Labor Code. Possession of substantial capital
is NOT ENOUGH .

contractor,
ELEMENTS: ↳ to be legitimate
related to the main business
must also not
1. The contractor or subcontractor does not have substantial capital OR
2. The contractor or subcontractor does not have investments in the form of tools, equipment,
machineries, supervision and work premises OR
3. The contractor’s or subcontractor’s employees recruited and placed are performing activities
which are directly related to the main business operation of the principal OR
4. The contractor or subcontractor does not exercise the right to control over the performance of
the work of the employees.

NOTE: All the elements above need not be present. If the contractor enters into an arrangement
characterized by any one of the foregoing elements, it would be a case of labor-only contracting.

To determine whether a person or entity is a legitimate labor contractor, it is necessary to prove not only
substantial capital OR investment in tools, etc., but also that the work of the employee is directly related to
the work that the contractor is required to perform for the principal.

Burden of Proof
The law presumes that the contractor is engaged in labor-only contracting. Thus, it is upon the contractor to
prove that he is not so engaged.
• The burden is shifted to the principal when it is the principal which is claiming that the contractor is
a legitimate contractor. It is incumbent upon the principal, and not upon the contractor’s employees,
to prove that the contractor is an independent contractor.
• What prevents this legal presumption?
The DOLE Certificate of Registration and License as private recruitment and placement agency from
the DOLE, while not conclusive evidence of the status of the contractor as a legitimate job contractor,
prevent the legal presumption of it being a mere labor-only contractor from arising.

NOTE: The contractor shall be deemed registered only on the date of issuance of its
Certificate of Registration which shall be effective for 2 years, unless cancelled after due
process. Failure to register shall give rise to the presumption that the contractor is engaged
in labor-only contracting.

Posting of Bond
An employer may require the contractor to furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the employees should the contractor or subcontractor,
as the case may be, fail to pay the same.

Effects of Labor-Only Contracting

1. The labor-only contractor will be treated as the agent or intermediary of the principal. The act
of an agent is the act of the principal.
2. The principal will become the direct employer as if it directly employed the workers supplied by
the labor-only contractor to undertake the contracted job or service. It will be responsible for all
their entitlements and benefits under labor laws.
3. The principal and the labor-only contractor will be solidarily treated as the employer. This means
that the liability of the contractor will also be the liability of the principal.
4. The employees supplied by the contractor will become the regular employees of the principal.

NOTE: The Labor Code does NOT prohibit labor-only contracting. Art. 106 only gives the SOLE the power to issue
rules and regulations that will regulate or prohibit labor-only contracting. It is DO-174-17 which prohibits labor-
only contracting.
#GETTHATBAR2022
FLORES · TARADJI
 will bethe same wl LOC
ILLICIT FORMS OF EMPLOYMENT ARRANGEMENTS effect
1. Cabo
A person or group of persons or a labor group which, under the guise of a labor organization, cooperative or
any entity, supplies workers to an employer, with or without any monetary or other consideration, whether
in the capacity of an agent or as an ostensible independent contractor.

2. In-house agency
A contractor which is owned, managed or controlled, directly or indirectly, by the principal or one where the
principal owns any share of stock, and which operates solely or mainly for the principal.

3. In-house Cooperative
A cooperative which is managed or controlled, directly or indirectly, by the principal or one where the
principal owns any share of stock, and which operates solely or mainly for the principal.

4. Contracting by reason of an actual or imminent strike or lockout

5. Contracting out work of union members in restraint of the right to self-organization
6. Requiring contractor’s employees’ to perform work of regular employees
7. Waiver of labor standards or releasing principal or contractor from future liability
8. Repeated rehiring
9. Signing a contract for a shorter term than the actual duration (unless contract is severable)
10. Others designed to circumvent security of tenure

b. Trilateral Relationship
Principal Contractor Contractor’s Employees
Refers to the indirect employer or Refers to the direct employer of the Refers to those directly hired by the
statutory employer which contracts employees it supplies to the contractor as its employees, hence
with an independent contractor for principal to perform the principal’s as between them, there is EER.
the performance of any work, job, work, job, tsk or service.
task or service.

Kinds of Contracts in Trilateral Relationship

1. Service Contract between the principal and the contractor. This is governed by the Civil Code.
a. In the Service Agreement, the following must be included:
i. Specific description of job or work, its term or duration
ii. Place of work and terms and conditions
iii. Administrative fee of not less than 10% (but for Security Guards under SSC/PSA, 20%)
iv. Provision on issuance of bonds
2. Employment Contract between the contractor and its employees. This is governed by the Labor Code.

No Contractual Relationship between the Principal and the Contractor’s Employees

In legitimate contracting arrangement, there exists an EER only between the contractor and its employees it supplies
to the principal. The contractor’s employees remain its employees and do not become the employees of the principal
by virtue of the contracting arrangement.
EXP: For limited purpose liability –
(1) If the contractor fails to pay wages of its employees
(2) If it is a Labor Only Contracting

#GETTHATBAR2022
FLORES · TARADJI
c. Solidary Liability
Under the following circumstances, a principal shall no longer be treated as indirect but direct
employer and therefore it shall be deemed solidarily liable with the contractor:
1. In case of violation of any provision of the Labor Code, including the failure of the
contractor to pay wages of its employees supplied to the principal
NOTES:
• To hold the principal liable, there is no need to prove insolvency of the job
contractor.
• Even if the principal inadequately paid the contractor, the contractor cannot
exculpate itself by claiming that it has no fault since what was paid by the
principal was insufficient to defray the wages. As an employer, it is charged with
the knowledge of labor laws.
2. In case of labor-only contracting
3. In case of commission of any of the following acts:
a. Other illicit forms of employment arrangements
b. Violation of the rights of contractor’s or subcontractor’s employees
c. Violation of the required contracts under the Rules (Employment Contract and
Service Agreement)
4. In case the termination of employment is caused by the pre-termination of the Service
Agreement not due to authorized causes, the right of the contractor’s/subcontractor’s
employee to unpaid wages and other unpaid benefits including unremitted legal
mandatory contributions shall be borne by the party at fault, without prejudice to the
solidary liability of the parties to the Service Agreement
5. In case the principal has contracted with a delisted contractor, in which case, the principal
shall be considered the direct employer of all employees under the Service Agreement
6. In case of non-compliance with legally mandated wage increases wherein, under RA
6727, the principal is also considered solidarily liable with the contractor.

The term solidary liability shall refer to the liability of the principal, pursuant to:
1. Article 106 – regarding the liability of the principal, in the same manner and extent that
he/she is liable to his/her direct employees to the extent of the work performed under
the contract when the contractor fails to pay the wages of his/her employees
2. Article 109 – regarding any violation of any provision of the Labor Code
-

The contractor’s employees have the right to collect from either or both the principal or legitimate
contractor. ↳ applies if principal
only connived with contractor .

NOTES:
• When the contractor has already received from the principal the correct amount of wages
and benefits, but failed to turn them over to the workers, the contractor should solely bear
the liability for the underpayment of wages and non-payment of OT pay.
• In case the termination of employment is caused by the pre-termination of the Service
Agreement not due to authorized causes, the right of the contractor’s employee to unpaid
wages and other unpaid benefits, shall be borne by the party at fault, without prejudice to the
solidary liability of the parties (principal and contractor) to the Service Agreement.
• If the termination results from expiration of the Service Agreement, or from completion of the
phase of the job or work, the employee may opt to wait for re-employment within 3 months
to resign and transfer to another contractor-employer. Failure of the contractor to provide
new employment for the employee shall entitle the latter to payment of separation benefits
as may be provided by law or the Service Agreement, whichever is higher.

#GETTHATBAR2022
FLORES · TARADJI
 B. TERMINATION BY EMPLOYER
Two-fold aspects of due process requirement in termination by an employer of an employee are:
1. Substantive aspect, by which the dismissal must be for any of the just causes or authorized causes
2. Procedural aspect, rudimentary requirements of due process, notice and hearing must be observed

1. Substantive due process

The dismissal must be for any of the just causes or authorized causes
NOTE: In citing legal basis for the elements and definitions of the just and authorized causes, cite D.O. No. 147-15

A. Just causes (Art. 297)

An employer may terminate an employment for any of the following causes:
1. Serious misconduct
2. Willful disobedience (insubordination) by the employee of the lawful order of his employer or
representative in connection with his work
3. Gross and habitual neglect by the employee of his duties
4. Abandonment of work
5. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative
6. Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative
7. Other causes analogous to the foregoing PREMARITAL SEX /PREGNANCY
EXTRAMARITAL AFFAIR > cannot be dismissed based solely on this
> not directly related to work
immorality → must be based on secular view,
SERIOUS MISCONDUCT ( g. reckless driving)
>
e.
not religious morality
> except in certain circumstances (small cooperative)

The transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment
Possession of drugs , even it not work-related
'

ELEMENTS: transgression of some established &

,

>
if high on drugs, employee cannot function

f
definite rule of action
i. There must be misconduct
( serious)
ii. The misconduct must be of such grave and aggravated character well hence misconduct ,
.

iii. It must relate to the performance of employee’s duties WORK RELATED

-
-

iv. There must be showing that the employees becomes unfit to continue working for the employer

WILLFUL DISOBEDIENCE/INSUBORDINATION
The refusal to obey some order, which a superior is entitled to give and have obeyed. It is a willful or intentional
disregard of the lawful and reasonable instructions of the employer
e. g. teacher prohibited to teach in another school but she
taught anyway
ELEMENTS:
i. There must be disobedience or insubordination
lending of ID to
the driver-7 no ii. The disobedience must be willful or intentional characterized by a wrongful and perverse attitude
willful intent since iii. The order violated must be reasonable, lawful, and made known to the employee
it was for the benefit
ofthe employer iv. The order must pertain to the duties which he has been engaged to discharge

GROSS AND HABITUAL NEGLECT

Gross neglect – the absence of that diligence that an ordinarily prudent man would use in his/own affairs
Habitual neglect – the repeated failure to perform one’s duties over a period of time depending upon the
circumstances ☆ determine the
PAST1NFRAG10NS_ → can be taken into consideration to
penalty
ELEMENTS:
i. There must be neglect of duty
disregard of consequences
ii. The negligence must be both gross and habitual in character } thoughtless
without effort to avoid the same
iii. It must be work-related as would make him unfit to work for his employer
EXCEPTION: This will apply even if not habitual, as long as gross, the resultant damage is
considered (the value of the property, or when a life has been taken)

NOTE: Poor or unsatisfactory performance/rating of an employee does not necessarily mean that he is
guilty of gross and habitual neglect of duties

ABANDONMENT OF WORK

ELEMENTS:
i. Employee must have failed to report for work or absent without valid reason
ii. There is clear intention to sever the EER manifested by some over act

NOTE: Notices must be sent to employee’s last known address

#GETTHATBAR2022
FLORES · TARADJI
 FRAUD OR WILLFUL BREACH OF TRUST
Fraud – Any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed,
and is injurious to another
Breach of trust – Willful when it done intentionally, knowingly and purposely, without justifiable excuse

ELEMENTS:
i. There must be an act, omission, or concealment
ii. The act, omission, or concealment involves a breach of legal duty, trust, or confidence justly
reposed
iii. It must be committed against the employer or his/her representative
iv. It must be in connection with the employee’s work

LOSS OF CONFIDENCE
Condition arising from fraud or willful breach of trust. There is loss of confidence when the employer has reasonable
ground or has some basis to believe that the employee is responsible for misconduct and the nature of his
participation renders him unworthy of the trust and confidence demanded by his position. Proof beyond reasonable
doubt is not required

ELEMENTS:
i. There must be act, omission, or concealment
ii. The act, omission, or concealment justifies the loss of trust and confidence of the employer to the
employee
iii. The employee must be holding a position of trust and confidence
iv. The loss of trust and confidence should not be simulated
v. It should not be used as a subterfuge of causes which are improper, illegal, or unjustifiable
vi. It must be genuine and not a mere afterthought to justify an earlier actions taken in bad faith

EMPLOYEES HOLDING POSITION OF TRUST AND CONFIDENCE

i. Managerial employees – those vested with power to lay down management policies
ii. Supervisorial employees – those who, in the interest of the employer, effectively recommend such
managerial actions the exercise of which is not merely routinary or clerical in nature but requires the
use of independent judgment
iii. Those who, in the normal and routine exercise of their functions, regularly handle significant
amounts of money or property → FIDUCIARY RANK AND FIVE -
-

COMMISSION OF CRIME OR OFFENSE

ELEMENTS:
i. There must be an act or omission punishable or prohibited by law
ii. The act or omission must be voluntary and/or willful
iii. Committed against his employer, any immediate member of his employer’s family, or his
employer’s duly authorized representative

NOTE: Conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his
employer, and the fact that the criminal complaint has been dropped by the city fiscal is not binding and
conclusive upon the labor tribunal

ANALOGOUS CASES

ELEMENTS:
i. There must be an act or omission similar to those specified just causes
ii. The act or omission must be voluntary and/or willful on the part of the employees

NOTE: No act or omission shall be considered as analogous cause unless expressly specified in the
company rules and regulations or policies (D.O. No. 147-15)

OTHER CAUSES
i. Participation in Illegal Strike
ii. Commission of Illegal Acts during a Strike
iii. Violation of Assumption Order
iv. Violation of Union Security Clause in the CBA
↳ employer needs to determine and prove that :

do ① union security clause is applicable

if ③
to
failure
theses ② Union is requesting for enforcement of the uminsecun.ly provision
any
of with there is
#GETTHATBAR2022
sufficient evidence to support the union's
FLORES · TARADJI
decision to expel the employee
☒ gayer from the union .
DOCTRINE OF INCOMPATIBILITY
Where the employee has done something that is contrary or incompatible with the faithful performance of his
duties, his employer has a just cause for terminating his employment (Manila Chauffers League v. Bachrach Motor
Co., 1940)

B. Authorized causes (Arts. 298 and 299)

The employer may also terminate employment of any employee due to:
1. Installation of labor-saving devices
2. Redundancy
3. Retrenchment to prevent losses
4. Closing or the cessation of operation of the establishment or undertaking
5. Disease

INSTALLATION OF LABOR-SAVING DEVICES r

Reduction of the number of workers in any workplace made necessary by the introduction of labor-saving machinery
or devices

ELEMENTS: r> meaning '

nottodefeatsecuntyofbenuneor
ngntto self-organization

÷
i. There is good faith in effecting the termination
ii. The termination is a matter of last resort, there being no other option available after resorting to
cost-cutting measures
iii. 2 separate written notices are served on both the employee and the DOLE at least 1 month prior to
the intended date of termination
iv. Separation pay is paid (1 month or at least 1 month pay for every year of service)
v. Fair and reasonable criteria in ascertaining what positions are to be affected by the termination
vi. The purpose of such introduction must be valid such as to save cost, enhance efficiency, and other
justifiable economic reasons

REDUNDANCY
A condition when the services of an employee are in excess of what is reasonably demanded by the actual

↳
requirements of the enterprise or superfluous
cases of superfluity of
ELEMENTS:
positions or services
i.
- There is good faith in effecting the termination
ii. The termination is a matter of last resort, there being no other option available after resorting to
cost-cutting measures
iii. 2 separate written notices are served on both the employee and the DOLE at least 1 month prior to
the intended date of termination
iv. Separation pay is paid (1 month or at least 1 month pay for every year of service)
v. Fair and reasonable criteria in ascertaining what positions are to be affected by the termination

±
vi. There must be superfluous positions or services of employees
vii. The positions or services are in excess of what is reasonably demanded by the actual requirements
of the enterprise
viii. There must be an adequate proof of redundancy, such as but not limited to the new staffing pattern,
feasibility studies/proposal, on the viability of the newly created positions, job description and the
approval by the management of the restructuring

RETRENCHMENT
An economic ground for dismissing employees and is resorted to primarily to avoid or minimize business losses
↳
always-pwmiidonbvsme.is
ELEMENTS:
i.
losses either actuator imminent
,

There is good faith in effecting the termination

ii. The termination is a matter of last resort, there being no other option available after resorting to
cost-cutting measures
iii. 2 separate written notices are served on both the employee and the DOLE at least 1 month prior to
the intended date of termination
iv. Separation pay is paid (1 month or at least ½ month pay for every year of service)

E-
v. Fair and reasonable criteria in ascertaining what positions are to be affected by the termination
vi. The retrenchment must be reasonably necessary and likely to prevent business losses
vii. The losses, if already incurred, are not merely de minimis, but substantial or if only expected are
reasonably imminent
viii. The alleged losses must be proved by sufficient and convincing evidence
↳ financial statements summary # SEPARATION PAY
fora couple of years
#GETTHATBAR2022
.

orlmoperimooryzmoperyearofseru.ee
Imo

year of service
FLORES · TARADJI ✓ Installation of labor saving
-
✓Retrenchment
device ✓ Disease
✓
Redundancy
✓ closure notdueto business
losses
“LAST IN, FIRST OUT” RULE
When there are 2 or more employees occupying the same position in the company affected by the retrenchment
program, the last one employed will necessarily be the first one to go. It shall likewise apply in cases of
installation of labor-saving devices and redundancy, except when an employee volunteers to be separated from
employment

CLOSURE/CESSATION OF BUSINESS ( entire department ]

ELEMENTS: "" " " " ""° °""
NOT DUE TO SERIOUS BUSINESS LOSSES DUE TO SERIOUS BUSINESS LOSSES
i. There is good faith in effecting the i. There is good faith in effecting the
termination termination
ii. The termination is a matter of last ii. The termination is a matter of last
resort, there being no other option resort, there being no other option
available after resorting to cost-cutting available after resorting to cost-cutting
measures measures
iii. 2 separate written notices are served iii. 2 separate written notices are served
on both the employee and the DOLE at on both the employee and the DOLE at
least 1 month prior to the intended date least 1 month prior to the intended date
of termination of termination
iv. Separation pay is paid (1 month or at iv. No separation pay
least ½ month pay for every year of v. Fair and reasonable criteria in
service) ascertaining what positions are to be
v. Fair and reasonable criteria in affected by the termination
ascertaining what positions are to be vi. There must be a decision to close or
affected by the termination cease operation
vi. There must be a decision to close or vii. The decision was made in good faith
cease operation viii. Proof of serious business losses or
vii. The decision was made in good faith financial reverses

DISEASE
↳ the termination must beimttiated by the employer .

ELEMENTS:
i. An employee has been found to be suffering from any disease, whether contagious or not
ii. His continued employment is (1) prohibited by law or (2) prejudicial to his health, or to the health
of his co-employees mandatory
iii. A competent public health authority certifies that the disease is of such nature or at such a stage that
it cannot be cured within a period of 6 months
iv. Separation pay is paid (1 month or at least ½ month salary per every year of service)
SUSPENSION OF EFFECTS OF TERMINATION
2. Procedural due process > SOLE may do so when termination may
cause

a. Two-notice rule a serious labor dispute or is in implementation of a mass lay off

-

The Two-Notice Rule provides that in dismissing an employee, the employer has the burden of proving that the
former worker has been served two notices:
1. One to apprise him of the particular acts or omissions for which his dismissal is sought
2. The other to inform him of his employer’s decision to dismiss him

JUST CAUSES AUTHORIZED CAUSES

1. FIRST WRITTEN NOTICE BUSINESS-RELATED CAUSES
Show-cause notice Separate and simultaneous service of a written notice
Contains the specific causes or grounds for of the intended termination to both:
termination and ordering to submit written i. The employee to be terminated
explanation within 5 calendar days. It contains ii. The appropriate DOLE Regional Office
the detailed narration of facts At least 1 month before the intended date of the
termination specifying the ground/s therefor and the
2. HEARING
GENERAL RULE: No formal hearing is required
↳
undertaking to pay the separation pay
cannot be substituted by month worth ofsalary
look forjob
!'s:p!! !:L ,
"
but

It only requires a meaning opportunity to NOTICE TO DOLE – To enable it to ascertain the

answer the charges and submit evidence, veracity and truth of the cause of termination psycholog cally
.

whether in a hearing, or some other reasonable

way (ample opportunity to be heard and to NOTICE TO EMPLOYEE – To enable him to contest the
defend himself) factual bases of the management decision or good faith
of the termination before the DOLE

#GETTHATBAR2022
FLORES · TARADJI
i­
 Twin Notice Rule applicable
p to Disease
per JURISPRUDENCE
EXCEPTION: Hearing is required in the HEALTH-RELATED CAUSE
following cases: 1. FIRST WRITTEN NOTICE to apprise the
i. When requested by the employee in employee of the ground for which his dismissal
writing is sought
ii. When substantial evidentiary 2. SECOND WRITTEN NOTICE informing the
disputes exist employee of his dismissal to be issued after the
iii. When a company rule or practice employee has been given reasonable
requires it opportunity to answer and to be heard on his
iv. When similar circumstances justify it defense

3. SECOND WRITTEN NOTICE

Notice of termination
Indicates that all the circumstances involving
the charges have been considered, and the
grounds have been established to justify the
severance of his employment

RULES ON DISMISSAL
SUBSTATIVE DUE PROCESS PROCEDURAL DUE PROCESS STATUS OF DISMISSAL
(just or authorized cause)
✔ ✔ LEGAL
❌ ❌ ILLEGAL
❌ ✔ ILLEGAL
✔ ❌ LEGAL, but must pay NOMINAL
↳ vindication of
DAMAGES
Just Cause – P30,000
a
right violated

{
this is not
Authorized Cause – P50,000
hard&fast
rule
3. Illegal dismissal, reliefs therefrom ↳ subject to court discretion (several factors
The employer shall not terminate the services of an employee except for a just or authorized cause. Where there is
no showing of clear, valid, and legal cause of termination, the law considers it a case of illegal dismissal

RELIEFS
An illegally dismissed employee is entitled to the following:
1. Reinstatement without loss of seniority right and other privileges, or separation pay if no longer viable
2. Full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to his actual reinstatement
Take Note : If no illegal dismissal, no backwages
1-
A. REINSTATEMENT to equivalentB. BACKWAGES
f)
to same position

C. SEPARATION PAY
.

position
Reinstatement is a restoration to a Backwages, in general, are those SEPARATION PAY IN LIEU OF
of
state from which one has been granted on grounds of equity for REINSTATEMENT→ how much ? Imo per year service
removed or separated earnings which a worker or Separation pay in lieu of ↓
employees has lost due to his reinstatement is enunciated in actual
FORMS illegal dismissal jurisprudence in the event that service
1. Reinstatement of an actual reinstatement is not possible +
employee whose dismissal COMPONENTS or feasible years
is declared illegal by the 1. Salaries on wages computed pending
case
Labor Arbiter. This form of on the basic wage rate level WHEN AWARDED
reinstatement is self- at the time of illegal 1. When the Doctrine of
executory and must be dismissal, not the latest Strained Relations is
implemented during the current wage rate level ↳ increases order
per applicable
otherwage
-

pendency of the appeal 2. Allowances and must be

instituted by the employer benefits regularly granted to considered D. DOCTRINE OF
↓
and received by the
NOTE: If order is issued by statutory
STRAINED
& CBA employee:
the NLRC, it is not i. Emergency living RELATIONS
benefits Under the circumstances
immediately executory. To allowance and 13 th

be executed, there must be month pay where the relationship of

writ of execution ii. Fringe benefits employer to employee is so
(Panuncillo v. CAP iii. Transportation strained and ruptured as
Philippines) allowance to preclude harmonious
iv. Holiday pay, working relationship
vacation, and sick should reinstatement of the
employee be decreed, the
#GETTHATBAR2022
FLORES · TARADJI
 2. Reinstatement as a result of leaves and service latter should be afforded the
suspension of the effects of incentive leaves right to separation pay so
termination by the DOLE v. Just share in the that he can be spared the
Secretary in the event of service charge agony of having to work
prima facie finding by the vi. Gasoline, car, and anew with the employer
appropriate official of the representation under an atmosphere of
DOLE that the termination allowances antipathy and antagonism
may cause a serious labor vii. Any other regular and the employer does not
dispute or is in allowances and have to endure the
implementation of a mass benefits continued services of the
lay-off employee in whom it has
3. Reinstatement as a relief to NOTE: Earnings from other lost confidence (Esmalin v.
an employee whose sources, during period of NLRC, 1989)
dismissal is declared illegal dismissal, shall not be
in a final and executory deducted from the award 2. When reinstatement proves
judgment backwages. It cannot stop or impossible, impracticable,
4. Reinstatement by the fault employee from finding not feasible, or
employer its employees other sources of income unwarranted for varied
after resumption of its reasons and thus hardly in
operation after suspension RECKONING PERIOD the best interest of the
of operation for a period not From the time his compensation parties
exceeding 6 months, or was withheld up to the time of his 3. Where the employee
after rendition by the actual reinstatement ✓ decides not to be reinstated
employees of military and as when he does not pray
civic duty If reinstatement is no longer for reinstatement in his
possible, the backwages shall be complaint or position paper
KINDS computed from the time of their but asked for separation pay
1. Actual reinstatement – illegal terminations up to the instead
Employee shall be admitted finality of the decision, or reversal 4. Where reinstatement is
back to work by a higher court rendered moot and
2. Payroll reinstatement – academic due to
Employee is merely NOTE: supervening events, such
reinstated in the payroll • Remember reinstatement as death of the illegally
pending appeal order by dismissed employee,
NOTE: If it involves an LA because once issued, declaration of insolvency of
!
1 ! assumption or employee must be the employer, fire resulting
certification order (status reinstated and paid wages. in total destruction of the
quo ante order), there can be Otherwise, he shall be employer’s establishment,
no payroll reinstatement, entitled to backwages for or when the employer has
only actual reinstatement such period even if decision closed or ceases operation
is later on reversed by a 5. To prevent delay in the
What if the position previously higher tribunal execution of the decision
occupied is already filled up? • Any salaries paid (employee to the prejudice of private
The proper remedy would be to is working) during the time respondent
reinstate him to a substantially the case is going on, 6. Other circumstances such
equivalent position since it would employer cannot ask for as when reinstatement is
be unjustified for the employer to reimbursement even if inimical to the employer’s
dismiss the person hired to replace decision of the court is for interest, reinstatement does
the dismissed employee legal dismissal not serve the best interest of
• General wage increases the parties involved, or that
(company-given) not it will not serve any prudent
included, but wage increases purpose as when
per wage order must be supervening facts
considered because those transpired which made
are statutory benefits; execution unjust or
NLRC considers wage order unequitable
that the employee is covered
in computing final
backwages at end of finality

#GETTHATBAR2022
FLORES · TARADJI
D. Damages
The following are the penalties imposed for failure to observe procedural process:
Just causes – Not more than 30,000
Authorized causes – 50,000

E. Attorneys’ fees
ORDINARY CONCEPT EXTRAORDINARY CONCEPT
An attorney’s fee is the reasonable compensation paid Attorney’s fee is deemed an indemnity for damages
by the client to his lawyer in exchange for the legal ordered by the court to be paid by the losing party to
services rendered by the latter. The compensation is the winning party
paid for the cost and/or results of the legal services, as
agreed upon by the parties or as may be assessed by the In labor cases, attorney’s fees partake of the nature of
court an extraordinary award granted to the victorious party
as an indemnity for damages

As a general rule, it is payable to the client, not to his

counsel, unless the former agreed to give the amount to
the latter as an addition to, or part of the counsel’s
compensation

NOTE: Art. 111 sanctions the award of attorney’s fees in cases of the unlawful withholding of wages, wherein the
culpable party may be assessed attorney’s fees equivalent to 10% of the amount of wages recovered. The amount of
attorney’s fees shall not exceed 10% of the total monetary award, and the fees may be deducted from the amount
due the winning party

Does the availment of the free legal services offered by the PAO prevent the award of attorney’s fees to
employees?
No. Employees are entitled to attorney’s fees, notwithstanding their availment of the free legal services offered by
the PAO. The amount of attorney’s fees shall be award to the PAO as a token recompense to them for their provision
of free legal services to litigants who have no means of hiring a private lawyer. The costs of the suit, attorney’s fees,
and contingent fees imposed upon the adversary of the PAO clients shall be deposited in the National Treasury as
trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO (Our Haus
Realty Development Corporation v. Parian, 2014)

f. Liabilities of corporate officers

As a general rule, corporation are treated as separate and distinct legal entities from the natural persons composing
them. To hold a director or officer personally liable, the following requisites must be present:
1. The complaint must allege that the director or officer assented to the patently unlawful acts of the
corporation, or that the director or officer was guilty of gross negligence or bad faith, and
2. There must be proof that the director or officer acted in bad faith

G. Burden of proof
In illegal dismissal cases, the burden of proof is on the employer in proving the validity of dismissal. However, the
fact of dismissal, if disputed, must duly proven by the complainant. The rule is that the one who alleges a facts has
the burden of proving it

C. Termination by employee (Art. 300)

WITHOUT JUST CAUSE WITH JUST CAUSE
An employee may terminate without just cause the An employee may put an end to the relationship
employee-employer relationship by serving a without serving any notice on the employer for any of
1. written notice on the employment the following just causes:
2. At least 1 month in advance 1. Serious insult by the employer or his
3. The employer upon whom no such notice was representative on the honor and person of the
served may hold the employee liable for employee
damages 2. Inhuman and unbearable treatment
accorded the employee by the employer or his
NOTE: Acceptance by the employer is necessary representative
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the immediate
members of his family
4. Other causes analogous to any of the foregoing

#GETTHATBAR2022
FLORES · TARADJI
1. Resignation versus constructive dismissal
RESIGNATION CONSTRUCTIVE DISMISSAL
Definition/Nature Voluntary act of an employee who finds There is constructive dismissal when any or
himself in a situation where he believes that all of the following circumstances exist/s:
personal reasons cannot be sacrificed in 1. When continued employment is

:
favor of the exigency of the service so much rendered impossible,
that he has no other choice but to unreasonable, or unlikely
dissociate himself from his employment 2. When there is a demotion in rank
and/or diminution in pay
RESIGNATION IS WITHDRAWABLE 3. When a clear discrimination,
Resignation is withdrawable even if the insensibility, or disdain by an
employee has called it irrevocable. However, employer becomes unbearable to
once an employee resigns and his the employee that it could foreclose
resignation is accepted, he no longer has any any choice by him except to forego
right to the job his continued employment
4. When the suspension went beyond
✓must be unconditional the maximum period allowed by
law
✓ inconsistent w/
filing of an illegal BURDEN OF PROOF
NOTE : MOT PREROGATIVE TO TRANSFER EMPLOYEES

dismissal complaint The employee has the burden to prove first

the fact of dismissal by substantial
evidence. Only then when the dismissal is
established that the burden shifts to the
employer to prove that the dismissal was for
a just and/or authorized cause
Test of validity REQUISITES The test of constructive dismissal is whether
Concurrence of two things: a reasonable person in the employee’s
1. Intention of relinquishing an office, position would have felt compelled to give
and up his position under the circumstances
2. Accompanied by the act of
abandonment
Entitlement to Not entitled to separation pay unless Entitled to reinstatement without loss of
relief stipulated in an employment contract or seniority and payment of backwages
CBA or sanctioned by established employer
practice or policy

2. Abandonment
Abandonment of work is a form of neglect of duty. 2 elements must concur:
i. The employee must have failed to report for work or must have been absent without valid or
justifiable reason, and
ii. There must have been a clear intention on the part of the employee to sever the EER manifested by
some overt act form of penalty
Vs. SUSPENSION →:
part of mgt prerogative Cto discipline emp)
.

usually when termination istoo harsh

resorted to
D. Preventive suspension
'
.

'

must observe due process (twin notice role]

A disciplinary measure for the protection of the company’s property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent threat to the life or property
of the employer or of his co-workers

No preventive suspension shall last longer than 30 days. The employer may extend the period of suspension
provided that during the period of extension, he pays the wages and other benefits due to the worker
!! !
E. Floating status (Art. 301)
Employment shall not be deemed terminated when:
i. There is bona fide suspension of operation of a business for a period not exceeding 6 months, or
ii. The employee has to fulfill a military or civic duty

In both cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than 1 month from the resumption of operations of his employer
or from his relief from the military or civic duty

!!! NOTE: There is a specific D.O. for COVID where suspension is allowed for a period of 1 year, not 6 months

#GETTHATBAR2022
FLORES · TARADJI
APPLICATION
Floating status rule is applicable in the following instances:
1. Traditionally, to security guards who are temporarily sidelined from one duty while waiting to be
transferred or assigned to a new post or client, and
2. To other industries when, as a consequence of the bona fide suspension of operation or undertaking, an
employer is constrained to put employees on a “floating status” for a period not exceeding 6 months

NOTE:
• Within 6 months the employer must give another assignment which must be particular or specific
and cannot be a general return to work order
• For Security guards, the 6-month period can be found in D.O. 150-16 but take note that D.O. 174-17 (new
rule), where the floating status of employees covered by agencies that are under contracting-out is only
for 3 months. To determine whether 6 months or 3months is applicable, check the agency involved

F. Retirement
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 ↳ employer can lower retirement consents
age if employee
ENTITLED UNDER THE LABOR CODE EXEMPTED FROM THE LABOR CODE
1. Any employee in the private sector 1. Employees of the national government, its
2. Underground or surface mining employee political subdivisions, including GOCCs if they
3. Part-time employees are covered by the Civil Service Law
4. Employees of service and other job 2. Employees of retail, service, and agricultural
contractors establishments or operations regularly
5. Domestic helpers or persons in the personal employing not more than 10 employees
service of another

KINDS OF RETIREMENT SCHEMES

1. Compulsory and contributory in nature
2. One set up by the agreement of the employer and employee in the CBA or other agreement between them
3. One that is voluntarily given by the employer

APPLICATION OF ART. 302

Art. 302 applies only in situations where:
1. There is no CBA or other applicable employment contracts providing for the benefits for employees
2. There is CBA other applicable employment contracts providing for the benefits for employees, but such
benefits are below the requirements set by law

AGE REQUIREMENT
LABOR CODE RETIREMENT PLAN
a. Optional retirement – 60 years old Where the employers and employees are given free
b. Compulsory retirement – 65 years old hand to determine and agree upon the terms and
c. Underground or service mining employee – conditions of retirement, even less than 60 years of
50 years or more, but not beyond 60 years old age
(compulsory retirement)

NOTE: The employee must have served in the

establishment for at least 5 years

RETIREMENT PAY
A retiring employee is entitled to retirement pay equivalent to at least ½ month salary for every year of service,
a fraction of at least 6 moths being considered as 1 whole year

Hanuman
The term “one-month salary” in determining the minimum retirement pay due includes:
1. 15 days salary of the employee on his latest salary date
2. Cash equivalent of not more than 5 days of service incentive leave
3. 1/12 of 13th month pay due to the employer or 2.5 days, and
}
22.5 days
4. All other benefits that the employer and employee may agree upon # of years in
Rate ✗ 22.5 days ×
Daily service

NOTE: LC does not distinguish between a full time and a part time faculty member therefore, the part-time
employee is still entitled to retirement pay. But the base pay of part-time employee is lower than that of full
time employee hence, lower retirement pay than that of the full time

#GETTHATBAR2022
FLORES · TARADJI
 VII. MANAGEMENT PREROGATIVE
DOCTRINE OF MANAGEMENT PREROGATIVE
Every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods. the time, place and manner of work, work
supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees.

It must be upheld so long as they are exercised in good faith for the advancement of its interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or valid agreements.

For this reason, courts often decline to interfere in legitimate business decisions of employers. In fact, labor laws
discourage interference in employers’ judgment concerning the conduct of their business.

A. DISCIPLINE
COMPONENTS:
1. RIGHT TO DISCIPLINE
Employer's right to discipline, in general, is the prerogative of the employer to discipline its employees and
to impose appropriate penalties on erring workers pursuant to company rules and regulations. However,
this policy can be justified only if the disciplinary action is dictated by legitimate business reasons and is not
oppressive. The policies, rules and regulations must always be fair and reasonable, and the corresponding
penalties should be commensurate to the offense and to the degree of infraction.

2. RIGHT TO DISMISS
Right of employer to dismiss its erring employees is a measure of self-protection. An employer generally
can dismiss or lay-off an employee for just and authorized causes enumerated under the Labor Code, subject
to regulation by the State of its paramount police power.

3. RIGHT TO DETERMINE WHO TO PUNISH

The employer has the right to determine who to punish. The employer shall be accorded reasonable latitude
in determine who among its erring officers or employees should be punished, to what extent, and what
proper penalty to impose.

4. RIGHT TO PRESCRIBE COMPANY RULES AND REGULATIONS

The prerogative of an employer to prescribe reasonable rules and regulations is necessary or proper for the
conduct of its business and to provide certain disciplinary measures in order to implement said rules and to
assure that the same would be complied with.

The employee has the corollary duty to obey all reasonable rules, orders, and instructions of the employer;
and willful or intentional disobedience thereto, as a general rule, justifies termination of the contract of
service and the dismissal of the employee.

5. RIGHT TO IMPOSE PENALTY (Proportionality Rule)

The employer may lawfully impose appropriate penalties on erring workers pursuant to its company rules
and regulations. However, the reasonable proportionality rule should be observed.

REASONABLE PROPORTIONALITY RULE → infractions committed by an employee should merit only the
corresponding sanction demanded by the circumstances; the penalty must be commensurate with the gravity
of the offense, the act, conduct, or omission imputed to the employee and; imposed in connection with the
employers disciplinary authority

It is also within the employer’s management prerogative (1) to choose which penalty to impose, and (2) to
impose heavier penalty than what the company rules prescribe.

CASE LAW:
THE HERITAGE HOTEL, MANILA V. SIO, 2019 (CAGUIOA, J.):
Court found that the penalties of suspension imposed upon Sio were not without valid bases and were reasonably
proportionate to the infractions committed. The improper remarks hurled against valued guests and an employee of
a valued client, in the present case, pose a greater threat to the interest of an employer and all the more merits a
similar, if not graver, penalty. An employer enjoys wide latitude of discretion to regulate all aspects of employment,
including the prerogative to instill discipline in its employees and to impose penalties.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
B. TRANSFER OF EMPLOYEES
A movement
i. from one position to another of equivalent rank, level, or salary, without break in the service; or
ii. from one office to another within the same business establishment

In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that
its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer
is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of
proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

RIGHT TO TRANSFER EMPLOYEES INCLUDE:

1. Prerogative to Reorganize
2. Prerogative to Promote
3. Prerogative to Demote
4. Prerogative to Re-assign
Re-assignments made by management pending investigation of irregularities allegedly committed by an
employee fall within the ambit of management prerogative. The purpose of reassignments is no different
from that of preventive suspension which management could validly impose as a disciplinary measure for
the protection of the company's property pending investigation of any alleged malfeasance or misfeasance
committed by the employee.

LIMITATIONS ON THE TRANSFER OF EMPLOYEES

1. The transfer must not be motivated by discrimination or bad faith;
2. The managerial prerogative to transfer personnel cannot be used by the employer to rid himself of an
undesirable employee;
3. Transfer, even if due to promotion, cannot be done without employee's consent
4. The mere fact that it would be inconvenient does not, by itself, make the transfer illegal
5. The transfer of an employee should be considered as within the bounds allowed by law, unless there are
circumstances which directly point to interference by the company with the employees' right to self-
organization.

NOTES:
• The exercise of the prerogative to transfer employees is valid provided there is no demotion in rank or
diminution of salary and benefits.
• An employee who refuses to be transferred when such transfer is valid is guilty of insubordination or willful
disobedience of a lawful order of an employer.
• Refusal to transfer due to personal obligations, additional expenses, inconvenience, hardship and anguish is
not valid. An employee could not validly refuse lawful orders to transfer based on these grounds.

C. PRODUCTIVITY STANDARDS
An employer is entitled to impose productivity standards which may be used as:
1. An incentive scheme and/or
2. A disciplinary scheme.
This management prerogative of requiring standards may be availed of so long as they are exercised in good faith
for the advancement of the employer's interest

TIME AND MOTION STUDIES

A more scientific and preferred method of determining the standard output rates or piece rates. The basis for the
establishment of rates for piece, output, or contract work is the performance of an ordinary worker of minimum skill
or ability

EFFECT OF FAILURE TO OBSERVE PRODUCTIVITY OR WORK STANDARDS OF THE ER

Failure to 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.

CASE LAW:
Under Art. 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross
and habitual neglect of duties. Thus, the fact that an employee’s performance is found to be poor or unsatisfactory
does not necessarily mean that the employee 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 the entire absence of care.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
D. BONUS
An amount granted and paid ex gratia to the employee for his industry and loyalty which contributed to the success
of the employer's business and made possible the realization of profits; it is something given in addition to what is
ordinarily received by or strictly due the recipient, hence, generally, it cannot be demanded as a matter of right.
• If there is no profit, there should be no bonus.
• If the bonus is dependent upon the realization of profits, the bonus is not demandable and enforceable.

WHEN DEMANDABLE AND ENFORCEABLE:

While bonus does not form part of the wage/salary of the employees, it becomes demandable in the following cases:
1. Stipulated in the employment contract or CBA
2. Grant of bonus is a company policy or practice
3. When it is granted as an additional compensation which the employer agreed to give without any condition
and thus, must be deemed part of wage or salary

CASE LAW:
• There is unfair and unjust discrimination in the granting of salary adjustments where the evidence shows
that
1. The management paid the employees of the unionized branch;
2. Salary adjustments were granted to employees of one of its non-unionized branches although it was
losing in its operations; and
3. The total salary adjustments given every ten of its unionized employees would not even equal to the
salary adjustments given to one employee in the non 􏰨 unionized branch.

E. CHANGE OF WORKING HOURS

Management retains the prerogative, whenever exigencies of the service so require, to change the working hours of
its employees. So long as such prerogative is exercised in good faith for the advancement of the employer’s interest
and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold such exercise

F. BONA FIDE OCCUPATIONAL QUALIFICATIONS

Provides that employment may not be limited to persons of a particular sex, religion, or national origin unless the
employer can show that such is an actual qualification for performing the job.

To justify a BFOQ, the following must be proven: [Meiorin Test]

1. That the employer adopted the standard for a purpose rationally connected to the performance of
the job;
2. That the employer adopted the particular standard in an honest and good faith belief that it was
necessary to the fulfilment of that legitimate work-related purpose; and
3. That the standard is reasonably necessary in order to accomplish the legitimate work-related
purpose (REASONABLE BUSINESS NECESSITY RULE)

EXAMPLES OF BFOQ:
1. Mandatory retirement ages for bus drivers and airplane pilots for safety reasons
2. Churches requiring members of its clergy to be of a certain denomination and may lawfully bar from
employment anyone who is not a member
3. Use of models and actors for the purpose of authenticity or genuineness;
4. Requirement of emergency personnel to be bilingual, judged on the language competency
5. Weight standards of PAL
6. Prohibiting employees from marrying employees of any competitor company.

EXAMPLES OF INVALID OCCUPATIONAL QUALIFICATIONS:

1. Absolute prohibition on marriage without any justification.
2. Prohibition where in case of two employees of a company developed a friendly relationship during the course
of their employment and then decided to get married, one of them should resign.
3. Absolute prohibition on pregnancy.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
G. POST-EMPLOYMENT RESTRICTIONS
Right of the employer, in the exercise of its prerogative, to insist on an agreement with the employee for certain
prohibitions to take effect after the termination of their EER.

In determining whether the contract is reasonable or not, the trial court should consider the following
factors:
1. Whether the covenant protects a legitimate business interest of the employer;
2. Whether the covenant creates an undue burden on the employee;
3. Whether the covenant is injurious to the public welfare;
4. Whether the time and territorial limitations contained in the covenant are reasonable; and
5. Whether the restraint is reasonable from the standpoint of public policy.

BURDEN OF PROOF UPON THE EMPLOYER

The employer is burdened to establish that a restrictive covenant barring an employee from a competitive
employment after retirement or resignation is not unreasonable restraint of trade thus, unenforceable for
being repugnant to public policy. There must be limitation as to time, place and trade. A contract embodying such
prohibition that is limited as to time and trade is considered reasonable, and therefore, valid and enforceable.

Contracts involving restraint of trade are to be judged according to their circumstances or two principal grounds:
1. injury to the public by being deprived of restricted party's industry; and
2. injury to the party himself by being precluded from pursuing his occupation, and thus being prevented from
supporting himself and his family

EFFECT OF NON-COMPLIANCE WITH POST-EMPLOYMENT RESTRCITION

A non-competing clause, like a "Goodwill Clause", with a stipulation that a violation thereof makes the employee
liable to his former employer for liquidated damages, refers to post-employment relations of the parties. In
accordance with jurisprudence, breach of the undertaking is a civil law dispute, not a labor law case.
Obligations arising from contracts have the force of law between the contracting parties and should be complied
with in good faith (CIVIL CODE. Art. 1159).

EXAMPLES:
1. Non-Compete Clause → prohibition to start a similar business, or work in an entity engaged in similar
business
2. Confidentiality and Non-Disclosure Clause → prohibition to disclose to any person any information
concerning the business or affairs of his employment to the detriment of the employer
3. Non-Solicitation Clause → prohibition from soliciting or approaching from a person who has been a client,
a party or prospective party to an agreement with employer, or a representative or agent of any client for
the purpose of offering goods or services which are of the same type with that of the employer.
4. Non-Recruitment or Anti-Piracy Clause → prohibition on recruitment by of personnel or employees of the
employer after his termination
5. Inventions Assignment Clause (Intellectual Property Clause) → requires the employee to disclose in
confidence to the employer and to assign all inventions, improvements, or designs, etc., which the employee
may solely or jointly conceive or develop during the period of employment.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
H. CLEARANCE PROCEDURES
NOTE: An employer is no longer required to obtain a clearance from the Secretary of Labor in order to shut down
his establishment or to dismiss or terminate the employment of employees with at least one year. Batas Pambansa
Blg. 130, approved on. August 21, 1981, abolished the clearance requirement.

SPECIFIC PERIOD FOR THE RELEASE OF SEPARATED EEs’ FINAL PAY AND CERTIFICATE OF EMPLOYMENT
The DOLE issued guidelines (i.e. Labor Advisory No. 06, Series of 2020) which provides, that the final pay should be
released by the employer within 30 days from the date of separation or termination of employment, unless. there is
a more favorable company policy, individual or collective agreement thereto.
NOTE: Prior to this DOLE issuance, there was no specific period prescribed for the release of the separated
employees' final pay and certificate of employment.

HOWEVER, by exception, an employer may still delay the release of the separated employee's final pay beyond the
prescribed 30-day period such as when the employee refuses to complete the company’s clearance process or has
pending accountabilities with the company (e.g., unreturned company properties in the employee's possession).

FINAL PAY
Under LA 06-20, is defined as the sum or totality of all the wages or monetary benefits due the employee regardless
of the cause of the termination of employment, including but not limited to the following:
a. Unpaid earned salary
b. Cash conversion of unused SIL
c. Cash conversions of remaining unused vacation, sick or other leaves
d. Pro-rated 13th month pay
e. Separation pay, if applicable
f. Retirement pay, if applicable
g. Other types of compensation stipulated in an individual or collective agreement, if any and
h. Cash Bond/s or any kind of deposit/s due for return to the employee, if any.

CERTIFICATE OF EMPLOYMENT AS PART OF CLEARANCE PROCEDURE

A certificate from the employer specifying the dates of an employee's engagement and the termination of his/her
employment and the type or types of work in which he/she is employed.

NOTE: An employee whose employment is not yet terminated may also ask for a Certificate of Employment. Under
L.A. No. 06-20, the employer shall issue a certificate of employment within 3 days from the time of the request by the
employee.

I. LIMITATIONS ON MANAGEMENT PREROGATIVE; POLICE POWER OF THE STATE

1. Limitations imposed by:
a. Law
b. CBA
c. Employment contract
d. Employer policy
e. Employer practice and
f. General principles of fair play and justice and
2. It is subject to police power
3. Its exercise should be without abuse of discretion
4. It should be done in good faith, and with due regard to the rights of labor
5. It must be consistent with equity and substantial justice

CASE LAW:
• Metrolab Industries, Inc. v. Roldan-Confesor, 2013
A pharmaceutical company defended its termination of rank and file employees during a bargaining
deadlock, as an exercise of management prerogative. This was after the Labor Secretary had assumed
jurisdiction over the dispute and enjoined the parties from "any acts which might exacerbate the situation."
The Court disagreed with the company's defense, stating that the privilege is not absolute but subject to
limitations imposed by law. In this case, it is limited by Sec. 236(g), which gives the Secretary the power
to assume jurisdiction and resolve labor disputes involving industries indispensable to national
interest. The company's management prerogatives are not being unjustly curtailed but duly tempered by
the limitations set by law, taking into account its special character and the particular circumstances in the
case at bench.

#GETTHATBAR2022
FLORES · PEREZ · TARADJI
 VIII. JURISDICTION AND RELIEFS
A. MANDATORY CONCILIATION-MEDIATION, SENA
Single Entry Approach (SEnA) → refers to the administrative approach to provide accessible, speedy, impartial,
and inexpensive settlement procedure of all labor and employment issues through a 30-day mandatory
conciliation mediation.

EXCEPTIONS
1. Notices of strike/lockout or preventive mediation cases with the NCMB
2. Issues arising from the interpretation or implementation of the CBA and those arising from interpretation
or enforcement of company personnel policies which should be processed through the grievance
machinery.
3. Applications for exemption from Wage Orders with the National Wages and Productivity Commission
(NWPC)
4. Issues involving violations of:
a. Alien Employment Permit (AEP)
b. Private Employment Agency (PEA) Authority or License
c. Working Child Permit and violations of Anti-Child Labor Law
d. Registration under DO No. 18-A
e. Professional license issued by the PRC and violation of Professional Code of Conduct
f. Technical Education and Skills Development Authority (TESDA) accreditations
g. Other similar permits, licenses, or registrations issued by the DOLE or its attached agencies
5. Violations of POEA Rules and Regulations involving:
a. Serious offenses and offenses penalized with cancellation of license
b. Disciplinary actions against overseas workers/seafarers which are considered serious offenses or
which carry the penalty of delisting from the POEA registry at first offense
c. Complaints initiated by the POEA
d. Complaints against an agency whose license is revoked, cancelled, expired or otherwise delisted, and
e. Complaints categorized under the POEA Rules and Regulations as not subject to SEnA.
6. Issues on occupational safety and health standards involving imminent danger situation, dangerous
occurrences/disabling injury, and absence of personal protective equipment.

B. LABOR ARBITER (LA)

1. Money claims arising from EER, with claim for reinstatement
2. Money claims, with or without reinstatement, exceeding P5,000
a. Except claims for ECC, SSS, Medicare
b. If it does not exceed P5,000 and without reinstatement → go to DOLE RD
c. A kasambahay’s claim, regardless of amount → DOLE RD
3. ULP (civil aspect. RTC for the criminal aspect)
4. Termination Disputes
a. Unless parties submit to voluntary arbitration
5. Termination of Corporate EMPLOYEES (if OFFICER, go to Special Commercial Court)
6. Claims for damages (MENTAL) arising from EER ↳ CHECK THE BYLAWS
7. Cases arising from prohibited activities during strikes including legality of strikes
a. Unless SOLE assumes jurisdiction (assumption order)
8. Wage distortion cases in UNORGANIZED establishments after referral to NCMB, go to LA. (if ORGANIZED,
go to voluntary arbitrator)
9. Claims of OFWs arising out of EER or of a contract or law (here, EER is not required)
10. Enforcement of compromise agreements
11. Issuance of writ of execution to enforce decisions of Voluntary Arbitrators, in case of their absence or
incapacity, for any reason.

#GETTHATBAR2022
FLORES · TARADJI
 LA NLRC MR CA SC

• Appeal within 10 days • Within 10 days • Rule 65 Certiorari

• With cash or surety • Rule 45 Petition for
bond, if it involve/s Review
monetary award,
otherwise, the appeal
will not be perfected
• Execution of decision
pending appeal: Only in
LA decisions reinstating
dismissed employees in
labor cases.

Requisites to Perfect Appeal to NLRC

1. Filed within the reglementary period (10 days)
2. Memorandum of appeal under oath
3. Appeal fee
4. Cash, property, or surety bond, if judgment involves monetary award, equivalent to the monetary award,
exclusive of damages and attorney’s fees.
!!! GR: The bond is mandatory and jurisdictional. If no bond is posted, appeal is not perfected.
EXP: In exceptional circumstances (e.g., when the employer is undergoing insolvency
proceedings)

In the following cases, there is no need to post bond:

(1) No monetary award
(2) Monetary award is not specified in the decision
(3) In case of conflict between body and fallo of the decision, the latter should prevail.

also within 10 days together

Motion to Reduce Bond → with the appeal
GR: Motion to reduce bond does not toll the running of the period to perfect appeal.
EXP: The filing of a Motion to Reduce Appeal Bond shall be entertained by the NLRC subject to the
following conditions:
(1) There is meritorious ground
(2) A bond in a reasonable amount is posted (i.e., 10% of the monetary award)
Compliance with the conditions shall suffice to suspend the running of the 10-day period to appeal.
In case the NLRC denies the motion, the appellant shall be given a fresh period of 10 days to appeal
by posting the required appeal bond.
5. Proof of service to the adverse party

Execution Pending Appeal

as to WIn actual or payroll
>
,

1 it is the choice of employer

LA NLRC
If reinstatement is ordered by the LA, the decision is If reinstatement is ordered by NLRC on appeal, or
immediately executory even pending appeal. This is subsequently by the CA or SC, a writ of execution is
self-executing without need for a writ of execution. required.

NOTE: The posting of a bond shall not stay the execution of reinstatement. The unjustified refusal of employer to
reinstate an illegally dismissed employee entitles the employee to payment of his salaries.

Reversal of LA’s Reinstatement Order

• If the LA’s order of reinstatement is reversed by the NLRC, CA or SC, the reinstated employee is nonetheless
entitled to his reinstatement salaries or wages, whether or not such reinstatement is actual or payroll
reinstatement, from the time the employee is ordered reinstated up to the time than the NLRC, CA or SC
reverses the decision.
• However, if there is actual delay in the execution of the order of reinstatement, and such delay was not due
to the employer’s unjustified act or omission (e.g., it went under rehabilitation), the employer cannot be
held liable for the reinstatement salaries.

#GETTHATBAR2022
FLORES · TARADJI
C. NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. Exclusive Original Jurisdiction
a. Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of
unlawful acts
b. Injunction in strikes or lockouts
c. Certified labor dispute (industry indispensable to national interest)
d. Contempt cases
e. Petition to annul or modify the order or resolution of the LA
2. Exclusive Appellate Jurisdiction
a. Cases decided by the LA → Decision of NLRC is finaland unappealable Next remedy
. is Rule 65 .

b. Cases decided by the DOLE RD involving small money claims (not exceeding P5,000)
c. Contempt cases decided by LA

D. JUDICIAL REVIEW OF LABOR RULINGS

Court of Appeals Supreme Court

1. Rule 65 Petition within 60 days from the Rule 45 Petition for review on certiorari from the
decision of decision of CA.
a. DOLE Secretary
b. NLRC
c. BLR Director (in the exercise of its
appellate jurisdiction)
NOTE: MR must have been filed first. It is
mandatory or pre-requisite.

2. Rule 43 Petition for review from decision of

a. Voluntary Arbitrators or Panel of
Voluntary Arbitrators

#GETTHATBAR2022
FLORES · TARADJI
 E. BUREAU OF LABOR RELATIONS (BLR)
1. Interunion and intraunion conflicts
2. All disputes, grievances or problems arising from or affecting labor-management relations in all workplaces
a. EXCEPT those arising from interpretation or implementation of CBA:
➔ Go to grievance machinery then voluntary arbitration.

Original Jurisdiction
→ labor relations cases involving federations and national unions (application for registration or
revocation/cancellation of registration)

BLR SOLE CA SC

• Rule 65 Certiorari
• Rule 45 Petition for
Appellate Jurisdiction Review

→ cases involving independent unions and local chapters (application for registration or revocation/cancellation
of registration)
→ Primary jurisdiction is RD.
LABOR RELATIONS DIVISION IN NO /DOLE )
e RD/MED-
BLR MR SC
ARBITER CA

• For Med-Arbiters, while• NOTE: The decision of • Within 10 days • Rule 65 Certiorari
generally its decisions BLR in its appellate
• Rule 45 Petition for
are appealable to BLR, jurisdiction is not
Review
the only exception is appealable to DOLE.
inter-union disputes
which are appealable to
DOLE Secretary.
• For RD, only those
decisions in cases
relevant and related to
labor relations are
appealable to BLR.

Jurisdiction of RD and Med-Arbiter which is appealable to BLR Director:

Med-Arbiter Regional Directors
1. Inter-union disputes such as request for SEBA 1. Visitorial cases under Art. 289 (examination of
certification , petition for certification election, books of unions)
consent election, run-off election or re-run 2. Union-registration-related cases
election 3. Denial of registration of single-enterprise CBAs
2. Intra-union disputes or petitions for deregistration thereof
3. Other related labor relations disputes 4. Request for SEBA certification when made in
4. Injunction cases an unorganized establishment with only 1
5. Contempt cases legitimate union.

The following cases are appealable to DOLE Secretary

and not to BLR Director:
1. Visitorial cases under Art. 37 (inspection of
premises and books)
2. Visitorial cases under Art. 128 (inspection of
establishment to determine compliance with
labor standards)
3. Occupational safety and health violations
4. Cases related to private recruitment and
placement agencies for local employment
5. Decisions on small money claims not exceeding
P5,000 and not accompanied with a claim for
reinstatement.

#GETTHATBAR2022
FLORES · TARADJI
F. NATIONAL CONCILIATION AND MEDIATION BOARD
The NCMB is an agency attached to the DOLE principally in-charge of the settlement of labor disputes through
conciliation, mediation and voluntary arbitration.
1. Wage distortion cases in UNORGANIZED establishments (→ then go to LA).
2. Conciliation, mediation and voluntary arbitration cases
3. In UNORGANIZED establishments without CBA, the issue is submitted to NCMB for conciliation. If failed,
refer to NLRC.
4. Notice of strike or lockout
5. Notice for the conduct of strike or lockout vote
6. Continued conciliation and mediation even after declaration of strike or lockout

NOTE: Decisions of NCMB Conciliator-Mediator is not subject to appeal or certiorari because NCMB is not a quasi-
judicial body.

G. POEA
1. Grant licenses to recruitment agencies
2. Cancellation/suspension of License of Authority to recruit of Recruitment Agencies
3. Disciplinary action against OFWs

POEA SOLE MR CA SC

• Within 10 days if denial • Within 10 days • Rule 65 Certiorari

of motion to lift closure • Rule 45 Petition for
order (to reopen Review
employment agency).
• Within 15 days in other
cases.

POEA NLRC MR CA SC

• Appeal is to the NLRC in • Within 10 days • Rule 65 Certiorari

the following cases: • Rule 45 Petition for
(1) Violation of Review
overseas
employment
contracts
(2) Disciplinary cases
filed against
overseas contract
workers

#GETTHATBAR2022
FLORES · TARADJI
 H. DOLE REGIONAL DIRECTORS (RD)
*
1. Visitorial powers under Articles 37, 128 and 289.
2. Money claims without reinstatement AND does not exceed 5K (SIMPLE MONEY CLAIMS) ¥5K and below
3. Interunion and intra union disputes involving independent unions and chartered locals
4. Violations of the constitution and bylaws of unions
5. Money claims of a kasambahay
6. Union registration
7. Occupational Safety and Health violations
8. Matters pertaining to recruitment and placement for local employment
9. Request for SEBA certification by an UNORGANIZED establishment with only 1 LLO.

Decision of DOLE RD on money claims (not exceeding P5,000 and without claim for reinstatement)

RD → NLRC MR CA SC
↓
this is unique • Appeal to NLRC within 5 • Within 10 days • Rule 65 Certiorari
because you go days • Rule 45 Petition for
Review
out of the DOLE
Decisions of DOLE RD appealable to BLR
See discussion and diagram in Letter E.

Decisions of DOLE RD on any other matter

may be appealed to SOLE within 10 days.

RD → SOLE MR CA SC
↓
e.
g. issued
RD
• Rule 65 Certiorari
• Appeal to SOLE within • Within 10 days
compliance order .

10 days • Rule 45 Petition for

ihtleexerelseofviitmal Review
& enforcement powers .

I. DOLE SECRETARY
1. If the BLR Director inhibits himself in a case falling under the jurisdiction of the BLR, can be appealed to the
SOLE.
2. Inspections and investigations
3. Compliance orders for labor standards where EER exists
4. Work stoppage orders when non—compliance with the law poses grave or imminent danger to health and
safety of workers
5. Strikes or lockouts that involve national interest cases (assumption of jurisdiction or certification to NLRC)
6. Power to suspend effects of termination (if the termination may cause a serious labor dispute or
implementation of a mass layoff) Power to order stoppage of work or suspension of
7. Appellate jurisdiction: operations otanyunitor department
a. from BLR decisions where BLR exercises original jurisdiction ↳ non-compliance withtnelaworlrrl
b. from decisions of DOLE RD in certain cases poses grave & imminent danger to
c. from decisions of Med-Arbiters in inter-union disputes (representation or certification election health
conflicts) safety
d. from decisions of POEA in cases which are (1) administrative in character and (2) disciplinary of workers .

action cases, excluding money claims ↓

NOTE: Decisions of SOLE are subject to certiorari via Rule 65 to the CA, and from CA to SC via Rule 45. exception
☒ to NO
POWER OF SOLECORRD)
"""""" WNkN0
'

" "" """" * &

Pay

VMOMAIRENFONEM.gg?amm.,nm.g,-
.

enforcement power, Thus, entire

infection writ of compliance
order
disregard the FSTOOO to
pay
.

ort records or compliance limit .

↳ solmgastteprocessdoesnot
BUT
of the representative start from a complaint ,

fomtheexertieofthis
on
non-compliance power .

/ inspection)
↳
there mustbeaprimafacie
#GETTHATBAR2022 finding HEER before # is
FLORES · TARADJI
issuance of compliance order otherwise
void
.
.
 J. GRIEVANCE MACHINERY
Grievance Machinery → refers to the mechanism for the adjustment and resolution of grievances arising from the
interpretation or implementation of a CBA and those arising from the interpretation or enforcement of company
personnel policies.

Grievance or Grievable Issue → any question raised by either the employer or the union regarding any of the
following issues or controversies:
1. The interpretation or application of the CBA
2. The interpretation or enforcement of company personnel policies
3. Any claim by either party that the other party is violating any provisions of the CBA or company personnel
policies.

NOTES:
• In order to be grievable, the violations of the CBA should be simple or ordinary and not gross in character,
otherwise, they shall be considered as unfair labor practices, the jurisdiction of which belongs to the Labor
Arbiter.
o Gross Violation of CBA → flagrant and/or malicious refusal by a party thereto to comply with the
economic provisions thereof. If it is mere political provision, the same shall not be considered as
ULP.
• A CBA will not be registered with the DOLE if it does not contain a provision on grievance
procedure/machinery which is a must provision required of all CBAs.

K. VOLUNTARY ARBITRATOR
1. Grievances arising from implementation and interpretation of CBAs (if unresolved after grievance
machinery)
2. Interpretation and enforcement of company personnel policies
3. Wage distortion issues in ORGANIZED establishments (if UNORGANIZED, go to LA)
4. Interpretation and implementation of productivity incentive programs
5. -Any other disputes upon agreement by the parties
↳ any labor dispute → non labor disputes cannot be agreed upon
-

NOTE: Cases cognizable by VA but filed with the LA, DOLE RD or NCMB should be disposed of by referring them
to the VA. Cases cognizable by VA but filed with regular courts should be dismissed.

Grievance Voluntary
MR CA SC
Machinery Arbitrator
• Automatic elevation to • Within 10 days • Appeal via Rule 43
the voluntary arbitrator within 15 days • Rule 45 Petition for
in case not settled within Review
7 days

In case of illegal dismissal

found by VA and ordered
reinstatement → immediately executory
Game nite at LA)

#GETTHATBAR2022
FLORES · TARADJI
L. PRESCRIPTION OF ACTIONS

Money Claims Illegal Dismissal Unfair Labor Offenses under the Illegal
Practice Labor Code Recruitment
Within 3 years from Action for 1 year from the GR: 3 years from Simple Illegal
the time the cause of reinstatement time the acts the time the cause of Recruitment
action accrued. prescribes in 4 complained of were action accrued → 5 years
years. committed. Economic Sabotage
Money claims > back
wages ?
> money
ins
EXP: ULP cases → 20 years
include those >
separation pay HOWEVER, before a
>Nominal Damages
arising from: criminal case for
1. Law ULP can be filed
2. CBA with the
3. Incremental prosecutor’s office,
proceeds it is a pre-requisite
from tuition that a labor case for
increases ULP should first be
4. Overseas initiated. It is only
employment upon a finding of
of OFWs* guilt in the labor
case and after the
*The 1-year decision therein has
prescriptive period become final and
in Sec. 28 of POEA executory that the
Standard 1-year prescriptive
Employment period to prosecute
Contract was the criminal aspect
declared void starts to run.
because the Labor
Code prevails in NOTE: The final
governing decision in the labor
prescription of case cannot be used
money claims of as evidence of guilt
OFWs including in the criminal case
seafarers. because in the labor
case, the quantum of
evidence is merely
substantial
evidence.

For Actions involving Union Funds → a complaint for audit or examination of funds and books of accounts
prescribes within 3 years.

#GETTHATBAR2022
FLORES · TARADJI