MAJOR TOPIC 1 the provisions of this Code, including its

GENERAL PROVISIONS implementing rules and regulations, shall be

resolved in favor of labor.”
A. BASIC POLICY ON LABOR
3. Follow this rule in interpreting and construing:
1. Under Article 3 of Labor Code: a. DOUBTS OR AMBIGUITIES IN LABOR
a) Full protection to labor; CONTRACTS such as employment contract
b) Promotion of full employment; and collective bargaining agreement (CBA);
c) Promotion of equal work opportunities b. DOUBTS OR AMBIGUITIES IN EVIDENCE in
regardless of sex, race or creed; labor cases.
d) Regulation of the relations between workers .
and employers; C. CONSTITUTIONAL AND CIVIL CODE
e) Protection of the rights of workers to: PROVISIONS RELATING TO LABOR
1. self-organization; LAW
2. collective bargaining;
3. security of tenure; and 1. Selected Constitutional Provisions.
4. just and humane conditions of work.  Under Article II (Declaration of Principles
and State Policies):
2. Under Article XIII, Section 3 of the Constitution: a. “Section 18. The State affirms labor as a
a) Full protection to labor, local and overseas, primary social economic force. It shall protect the
organized and unorganized; rights of workers and promote their welfare.”
b) Promotion of full employment;
c) Promotion of equality of employment This provision is invoked by the Supreme Court
opportunities for all; when it affirms the interest, rights and welfare of
d) Guarantee of the rights of all workers to: labor. Example: When the SC nullifies a patently
1. self-organization; illegal provision in an employment contract or
2. collective bargaining and negotiations; when it invalidates a Quitclaim executed by a
3. peaceful concerted activities, including the right worker because of unconscionably low
to strike in accordance with law; consideration.
4. security of tenure;
5. humane conditions of work;  Under Article III (Bill of Rights):
6. a living wage; a. Freedom of speech, of expression, or of the
7. participate in policy and decision-making press, or the right of the people peaceably to
processes affecting their rights and benefits as assemble and petition the government for redress
may be provided by law. of grievances.
e) Promotion of the principle of shared
responsibility between workers and employers THIS FREEDOM GUARANTEED UNDER
and the preferential use of voluntary modes in ARTICLE III, SECTION 4 OF THE
settling disputes, including conciliation, and shall CONSTITUTION IS RELEVANT ONLY IN
enforce their mutual compliance therewith to CONNECTION WITH PICKETING AND NOT IN
foster industrial peace. RELATION TO STRIKE WHICH HAS A
f) Regulation of the relations between workers DIFFERENT CONSTITUTIONAL BASIS
and employers, recognizing the right of labor to its (ARTICLE XIII, SECTION 3).
just share in the fruits of production and the right
of enterprises to reasonable returns to b. Right of public and private sector
investments, and to expansion and growth. employees to form unions, associations, or
societies for purposes not contrary to law shall
B. CONSTRUCTION IN FAVOR OF LABOR not be abridged.
THIS IS KNOWN AS “FREEDOM OF
1. Under Article 1702 of the Civil Code. ASSOCIATION.” THIS PROVISION IS THE
“Article 1702. In case of doubt, all labor legislation BASIS FOR THE EMPLOYEES’ RIGHT TO
and all labor contracts shall be construed in favor SELF-ORGANIZATION.
of the safety and decent living for the laborer.”
c. Non-impairment of obligations of contracts.
2. Article 4 of the Labor Code. THE CONCEPT OF THIS RIGHT IN POLITICAL
“Article 4. Construction in Favor of Labor. – All LAW IS SIMILAR IN LABOR LAW.
doubts in the implementation and interpretation of

1
d. Right to speedy disposition of cases in judicial, benefits as may be provided by law.
quasi-judicial or administrative bodies.
The State shall promote the principle of shared
THIS CAN BE INVOKED IN LABOR CASES AT responsibility between workers and employers
ALL LEVELS, to wit: and the preferential use of voluntary modes in
settling disputes, including conciliation, and
(1) Before quasi-judicial or administrative bodies, shall enforce their mutual compliance therewith to
such as: foster industrial peace.
a) Labor Arbiters, NLRC;
b) Med-Arbiters/BLR; The State shall regulate the relations between
c) DOLE Regional Directors/DOLE Secretary; and workers and employers, recognizing the right of
d) Voluntary Arbitrators. labor to its just share in the fruits of production
and the right of enterprises to reasonable returns
(2) Before judicial bodies, such as: to investments, and to expansion and growth.
a) Court of Appeals; and
b) Supreme Court, when labor cases reach these 2. Selected Civil Code Provisions.
higher level courts.  Article 1700 of the Civil Code:
“Art. 1700. The relations between capital and
e. Prohibition against involuntary servitude. labor are not merely contractual. They are so
THIS PRINCIPLE IS RELEVANT ONLY IN impressed with public interest that labor contracts
THREE (3) SITUATIONS: NAMELY: (1) must yield to the common good. Therefore, such
RESIGNATION AND (2) RETURN-TO-WORK contracts are subject to the special laws on labor
ORDER IN NATIONAL INTEREST CASES. THIS unions, collective bargaining, strikes and lockouts,
MEANS THAT: closed shop, wages, working conditions, hours of
labor and similar subjects.”
(1) AN EMPLOYEE HAS THE RIGHT TO
RESIGN SINCE HE CANNOT BE FORCED In Davao Integrated Port Stevedoring Services
TO WORK AGAINST HIS WILL; v. Abarquez, March 19, 1993. It was held that a
CBA, as a labor contract within the contemplation
(2) THE MOMENT AN ASSUMPTION OF of Article 1700 of the Civil Code, is not merely
JURISDICTION ORDER (AJO) IS ISSUED BY contractual in nature but impressed with public
THE DOLE SECRETARY IN NATIONAL interest, thus, it must yield to the common good.
INTEREST CASES, A STRIKER CAN BE
ORDERED TO RETURN TO WORK EVEN Similarly, an employment contract or any other
AGAINST HIS WILL IN CASE AT THE TIME OF labor contract is treated as not merely contractual
SUCH ISSUANCE OF THE AJO, THERE WAS in nature similar to an ordinary contract like a
ALREADY AN ON-GOING STRIKE; and lease contract because it is impressed with public
interest. Consequently, all labor laws are deemed
(3) WHEN EMPLOYEES ARE CALLED UPON read or incorporated therein even if not so
TO RENDER MILITARY OR CIVIC DUTY. expressly provided or stipulated in its provisions.

 Under Article XIII (Social Justice and  Article 1702 of the Civil Code. (See
Human Rights): discussion above of Article 1702 of the
Civil Code, in relation to Article 4 of the
Section 3. The State shall afford full protection to Labor Code regarding the rule on
labor, local and overseas, organized and interpretation and construction provisions
unorganized, and promote full employment and of law and labor contracts).
equality of employment opportunities for all.
------------oOo------------
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.
They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and decision-
making processes affecting their rights and SYLLABUS MAJOR TOPIC 2

2
 PRE-EMPLOYMENT the POEA, which include the act of reprocessing
workers through a job order that pertains to non-
A. ILLEGAL RECRUITMENT existent work, work different from the actual
overseas work, or work with a different employer
 Who may commit illegal recruitment? whether registered or not with the POEA;
Illegal recruitment may be committed by any of (d) To induce or attempt to induce a worker
the following already employed to quit his employment in order
(1) By Non-Licensee or Non-holder of authority; or to offer him another unless the transfer is
(2) By ANY PERSON, regardless of whether designed to liberate a worker from oppressive
a non-licensee, non-holder, licensee or holder of terms and conditions of employment;
authority, (e) To influence or attempt to influence any
person or entity not to employ any worker who
 What are illegal recruitment acts that has not applied for employment through his
can be committed by No. 1 above agency or who has formed, joined or supported,
(NON-LICENSEE or NON- HOLDER OF or has contacted or is supported by any union or
AUTHORITY)? workers' organization;
When what is committed by such NON- (f) To engage in the recruitment or placement of
LICENSEES or NON-HOLDERS OF AUTHORITY workers in jobs harmful to public health or morality
is any of the acts of recruitment allowed only to be or to the dignity of the Republic of the Philippines;
done by licensees or holders of authority such as (g) To fail to submit reports on the status of
the act of canvassing, enlisting, contracting, employment, placement vacancies, remittance of
transporting, utilizing, hiring, or procuring workers foreign exchange earnings, separation from jobs,
and includes referring, contract services, departures and such other matters or information
promising or advertising for employment abroad, as may be required by the Secretary of Labor and
whether for profit or not. Employment;
(h) To substitute or alter to the prejudice of the
In other words, had they possessed of worker, employment contracts approved and
license or authority, their commission of any of the verified by the DOLE from the time of actual
foregoing acts could have been valid and not signing thereof by the parties up to and including
constitutive of illegal recruitment. the period of the expiration of the same without
the approval of the DOLE;
NOTE: The non-licensee or non-holder of (i) For an officer or agent of a recruitment or
authority is presumed to be engaged in such placement agency to become an officer or
recruitment if he, in any manner, offers or member of the Board of any corporation engaged
promises for a fee employment abroad to two or in travel agency or to be engaged directly or
more persons. indirectly in the management of travel agency;
(j) To withhold or deny travel documents from
 What are acts of illegal recruitment applicant workers before departure for monetary
when committed by ANY PERSON, or financial considerations, or for any other
whether a NON-LICENSEE, NON- reasons, other than those authorized under the
HOLDER OF AUTHORITY or even by a Labor Code and its implementing rules and
LICENSEE or HOLDER OF regulations;
AUTHORITY? (k) Failure to actually deploy a contracted worker
(a) To charge or accept, directly or indirectly, any without valid reason as determined by the
amount greater than that specified in the schedule Department of Labor and Employment;
of allowable fees prescribed by the DOLE (l) Failure to reimburse expenses incurred by the
Secretary, or to make a worker pay or worker in connection with his documentation and
acknowledge any amount greater than that processing for purposes of deployment, in cases
actually received by him as a loan or advance; where the deployment does not actually take
(b) To furnish or publish any false notice or place without the worker's fault. Illegal recruitment
information or document in relation to recruitment when committed by a syndicate or in large scale
or employment; shall be considered an offense involving
(c) To give any false notice, testimony, economic sabotage; and
information or document or commit any act of (m) To allow a non-Filipino citizen to head or
misrepresentation for the purpose of securing a manage a licensed recruitment/manning agency.”
license or authority under the Labor Code, or for
the purpose of documenting hired workers with PROHIBITED ACTIVITIES IN RELATION TO

3
 ILLEGAL RECRUITMENT
 What is a “license” for overseas
 What are the PROHIBITED ACTIVITIES recruitment?
in connection with recruitment for “License” refers to the document issued by the
overseas employment? DOLE Secretary authorizing a person, partnership
Besides illegal recruitment, the law or corporation to operate a private recruitment or
additionally provides that it shall also be unlawful manning agency.
for any person or entity to commit the following
prohibited acts:  What is an “authority” for overseas
(1) Grant a LOAN to an overseas Filipino worker employment?
with interest exceeding eight percent (8%) per “Authority” refers to the document issued
annum, which will be used for payment of legal by the DOLE Secretary authorizing the officers,
and allowable placement fees and make the personnel, agents or representatives of a licensed
migrant worker issue, either personally or through recruitment or manning agency to conduct
a guarantor or accommodation party, post-dated recruitment and placement activities in a place
checks in relation to the said loan; stated in the license or in a specified place.
(2) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino worker ELEMENTS OF ILLEGAL RECRUITMENT
is required to avail of a LOAN only from
specifically designated institutions, entities or  What are the elements of illegal
persons; recruitment?
(3) Refuse to condone or renegotiate a LOAN The essential elements of illegal recruitment vary
incurred by an overseas Filipino worker after the in accordance with the following classifications:
latter's employment contract has been (1) Simple illegal recruitment;
prematurely terminated through no fault of his or (2) When committed by a syndicate; or
her own; (3) When committed in large scale.
(4) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino worker When illegal recruitment is committed under either
is required to undergo HEALTH EXAMINATIONS Nos. 2 or 3 above or both, it is considered an
only from specifically designated medical clinics, offense involving economic sabotage.
institutions, entities or persons, except in the case
of a seafarer whose medical examination cost is SIMPLE ILLEGAL RECRUITMENT
shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive  What are the 2 elements of simple
arrangement whereby an overseas Filipino worker illegal recruitment?
is required to undergo TRAINING, SEMINAR, (1) The offender has no valid license or authority
INSTRUCTION OR SCHOOLING of any kind only required by law to enable one to lawfully engage
from specifically designated institutions, entities or in recruitment and placement of workers; and
persons, except for recommendatory trainings (2) He undertakes either any activity within the
mandated by principals/shipowners where the meaning of “recruitment and placement” defined
latter shoulder the cost of such trainings; under Article 13(b), (see above enumeration) or
(6) For a SUSPENDED any prohibited practices (see above enumeration)
RECRUITMENT/MANNING AGENCY to engage under Article 34 of the Labor Code.
in any kind of recruitment activity including the
processing of pending workers' applications; and  Can a recruiter be a natural or juridical
(7) For a recruitment/manning agency or a foreign person?
principal/employer to pass on the overseas Yes.
Filipino worker or deduct from his or her salary the
payment of the cost of INSURANCE fees,  What are some relevant principles on
premium or other insurance related charges, as illegal recruitment?
provided under the compulsory worker's 1. Mere impression that a person could deploy
INSURANCE coverage. workers overseas is sufficient to constitute illegal
recruitment. But if no such impression is given,
the accused should not be convicted for illegal
recruitment.
2. Mere promise or offer of employment abroad
LICENSE VS. AUTHORITY amounts to recruitment.

4
3. There is no need to show that accused RECRUITEES = BY A SYNDICATE
represented himself as a licensed recruiter.  3 OR MORE RECRUITEES
4. Referrals may constitute illegal recruitment. REGARDLESS OF NO. OF
5. It is illegal recruitment to induce applicants to RECRUITERS = IN LARGE SCALE
part with their money upon false
misrepresentations and promises in assuring  When is illegal recruitment committed
them that after they paid the placement fee, jobs by a syndicate?
abroad were waiting for them and that they would If it is carried out by a group of three (3) or more
be deployed soon. persons conspiring or confederating with one
6. Recruitment whether done for profit or not is another.
immaterial.
7. The act of receiving money far exceeding the  Elements of illegal recruitment by a
amount as required by law is not considered as syndicate.
“recruitment and placement” as this phrase is The essential elements of the crime of illegal
contemplated under the law. recruitment committed by a syndicate are as
8. Actual receipt of fee is not an element of the follows:
crime of illegal recruitment. 1. There are at least three (3) persons who,
9. Conduct of interviews amounts to illegal conspiring and/or confederating with one another,
recruitment. carried out any unlawful or illegal recruitment and
10. Absence of receipt is not essential to hold a placement activities as defined under Article 13(b)
person guilty of illegal recruitment. or committed any prohibited activities under
11. Conviction for illegal recruitment may be made Article 34 of the Labor Code; and
on the strength of the testimonies of the 2. Said persons are not licensed or authorized to
complainants. do so, either locally or overseas.
12. Absence of documents evidencing the
recruitment activities strengthens, not weakens, The law does not require that the syndicate
the case for illegal recruitment. should recruit more than one (1) person in order
13. Only one person recruited is sufficient to to constitute the crime of illegal recruitment by a
convict one for illegal recruitment. syndicate. Recruitment of one (1) person would
14. Non-prosecution of another suspect is suffice to qualify the illegal recruitment act as
immaterial. having been committed by a syndicate.
15. Execution of affidavit of desistance affects
only the civil liability but has no effect on the  When is illegal recruitment considered
criminal liability for illegal recruitment. in large scale?
16. Defense of denial cannot prevail over positive If committed against three (3) or more persons
identification. Positive identification where individually or as a group.
categorical and consistent and not attended by
any showing of ill motive on the part of the  Elements of illegal recruitment in large
eyewitnesses on the matter prevails over alibi and scale.
denial. Between the categorical statements of the The elements of illegal recruitment in large scale,
prosecution witnesses, on the one hand, and bare as distinguished from simple illegal recruitment,
denials of the accused, on the other hand, the are as follows:
former must prevail. 1. The accused engages in the recruitment and
placement of workers as defined under Article
ILLEGAL RECRUITMENT AS A FORM OF 13(b) or committed any prohibited activities under
ECONOMIC SABOTAGE Article 34 of the Labor Code; and
2. The accused commits the same against three
 When is illegal recruitment considered (3) or more persons, individually or as a group.
a crime involving economic sabotage?
 Distinguished from illegal recruitment
1. When committed by a syndicate; or by a syndicate.
2. When committed in large scale. As distinguished from illegal recruitment
committed by a syndicate, illegal recruitment in
NOTE: THE FIGURE THREE (3) MAKES THE large scale may be committed by only one (1)
DIFFERENCE, THUS: person. What is important as qualifying element
 3 OR MORE RECRUITERS is that there should be at least three (3) victims of
REGARDLESS OF NO. OF such illegal recruitment, individually or as a group.

5
 3. A manager of a recruitment/manning agency is
 Recruitment in large scale or by a not a mere employee. As such, he receives job
syndicate is malum prohibitum and not applications, interviews applicants and informs
malum in se. them of the agency’s requirement of payment of
performance or cash bond prior to the applicant’s
ILLEGAL RECRUITMENT VS. ESTAFA deployment. As the crewing manager, he was at
the forefront of the company’s recruitment
 Can a person be charged and activities.
convicted separately for illegal
recruitment and estafa involving one THEORY OF IMPUTED KNOWLEDGE
and the same act of recruitment?
Yes. It is clear that conviction under the Labor  What is meant by this theory?
Code does not preclude conviction for estafa or Knowledge of the agent is deemed knowledge of
other crimes under other laws. the principal but not the other way around.

Some relevant principles: The theory of imputed knowledge is a rule

 Same evidence to prove illegal that any information material to the transaction,
recruitment may be used to prove estafa. either possessed by the agent at the time of the
 Conviction for both illegal recruitment and transaction or acquired by him before its
estafa is not double jeopardy. completion, is deemed to be the knowledge of the
principal, at least insofar as the transaction is
NATURE OF LIABILITY OF LOCAL concerned, even though the knowledge, in fact, is
RECRUITMENT AGENCY AND FOREIGN not communicated to the principal at all.
EMPLOYER
Sunace International Management Services,
 What is the nature of the liability Inc. v. NLRC2 - The High Court here has the
between local recruiter and its foreign opportunity to discuss the application of the theory
principal? of imputed knowledge. The OFW (Divina), a
The nature of their liability is “solidary” or “joint domestic helper in Taiwan, has extended her 12-
and several” for any and all claims arising out of month contract, after its expiration, for two (2)
the employment contract of OFWs. more years after which she returned to the
Philippines. It was established by evidence that
 Is the solidary liability of corporate the extension was without the knowledge of the
officers with the recruitment agency local recruitment agency, petitioner Sunace. The
“automatic” in character? Court of Appeals, however, affirmed the Labor
No. In order to hold the officers of the agency Arbiter’s and NLRC’s finding that Sunace knew of
solidarily liable, it is required that there must be and impliedly consented to the extension of
proof of their culpability therefor. Thus, it was held Divina’s 2-year contract. It went on to state that “It
in the 2013 case of Gagui v. Dejero,1 that while is undisputed that [Sunace] was continually
it is true that R.A. 8042 and the Corporation Code communicating with [Divina’s] foreign employer.”
provide for solidary liability, this liability must be It thus concluded that “[a]s agent of the foreign
so stated in the decision sought to be principal, ‘petitioner cannot profess ignorance of
implemented. Absent this express statement, a such extension as obviously, the act of the
corporate officer may not be impleaded and made principal extending complainant (sic) employment
to personally answer for the liability of the contract necessarily bound it.’”
corporation.
In finding that the application by the CA of
 What are some relevant principles on this theory of imputed knowledge was misplaced,
the persons liable for illegal the High Court ruled that this theory ascribes the
recruitment? knowledge of the agent, Sunace, to the principal,
1. Employees of a licensed recruitment agency employer Xiong, not the other way around. The
may be held liable for illegal recruitment as knowledge of the principal-foreign employer
principal by direct participation, together with his cannot, therefore, be imputed to its agent,
employer, if it is shown that he actively and Sunace. There being no substantial proof that
consciously participated in illegal recruitment. Sunace knew of and consented to be bound
2. Good faith and merely following orders of under the 2-year employment contract extension,
superiors are not valid defenses of an employee. it cannot be said to be privy thereto. As such,

6
Sunace and its owner cannot be held solidarily The claim of petitioner that it processed the
liable for any of Divina’s claims arising from the 2- contract of private respondent with the POEA only
year employment extension. As the New Civil after he had started working is also without merit.
Code provides: “Contracts take effect only Petitioner cannot use its own misfeasance to
between the parties, their assigns, and heirs, defeat his claim.
except in case where the rights and obligations
arising from the contract are not transmissible by  What is the effect of non-deployment of
their nature, or by stipulation or by provision of OFW to overseas employment?
law.” Petitioner-seafarer, in Santiago v. CF
Sharp Crew Management, Inc.2 was not deployed
TERMINATION OF CONTRACT OF MIGRANT overseas despite the signing of a POEA-approved
WORKER WITHOUT JUST OR VALID CAUSE employment contract. One of his contentions is
that such failure to deploy was an act designed to
 Can an OFW acquire regularity of prevent him from attaining the status of a regular
employment? employee. The Supreme Court, however,
No. The prevailing rule is that OFWs are disagreed and ruled that “seafarers are
contractual (fixed-term only), not regular, considered contractual employees and cannot be
employees. In fact, they can never attain considered as regular employees under the Labor
regularity of employment. The nature of their Code. Their employment is governed by the
employment is always fixed-term. contracts they sign every time they are rehired
and their employment is terminated when the
 What are some relevant principles? contract expires. The exigencies of their work
1. Indefinite period of employment of OFWs is not necessitate that they be employed on a
valid as it contravenes the explicit provision of the contractual basis.”
POEA Rules and Regulations on fixed-period
employment.  What is the doctrine of processual
2. OFWs do not become regular employees by presumption?
reason of nature of work, that is, that they are “Presumed-identity approach” or “processual
made to perform work that is usually necessary presumption” is an International Law doctrine
and desirable in the usual business or trade of the which dictates that where a foreign law is not
employer. The exigencies of their work pleaded or, even if pleaded, is not proved, the
necessitate that they be employed on a presumption is that foreign law is the same as
contractual basis. This notwithstanding the fact Philippine law. Thus, under this situation,
that they have rendered more than twenty (20) Philippine labor laws should apply in determining
years of service. the issues presented in a case.
3. Regular employment does not result from the
series of re-hiring of OFWs.  Is due process under Philippine law
4. The fixed-period employment of OFWs is not applicable to termination of
discriminatory against them nor does it favor employment of OFWs?
foreign employers. It is for the mutual interest of Yes. In the absence of proof of applicable foreign
both the seafarer and the employer why the law, OFWs are entitled to due process in
employment status must be contractual only or for accordance with Philippine laws.
a certain period of time.
5. The expiration of the employment contracts of  Is the Agabon doctrine applicable to
OFWs marks its ending. OFWs who are dismissed for cause but
without due process?
 What is the effect of hiring a seafarer Yes. The Agabon doctrine of awarding indemnity
for overseas employment but in the form of nominal damages in cases of valid
assigning him to local vessel? termination for just or authorized cause but
As held in OSM Shipping Philippines, Inc. v. without procedural due process also applies to
NLRC,1 the non-deployment of the ship overseas termination of OFWs.
did not affect the validity of the perfected
employment contract. After all, the decision to use  Who has the burden of proof to show
the vessel for coastwise shipping was made by that the dismissal of the OFW is legal?
petitioner only and did not bear the written Burden of proof devolves on both recruitment
conformity of private respondent. A contract agency and its foreign principal.
cannot be novated by the will of only one party.  Are OFWs entitled to the reliefs under

7
 the Labor Code? Placement Agency, Inc. v. Joy C. Cabiles,1
No. They are not entitled to such reliefs under answered this in the negative. The said provision
Article 279 as reinstatement or separation pay in was thus declared still unconstitutional and null
lieu of reinstatement or full back wages. and void despite its replication in R.A. No. 10022.
REASON: Because their employment is fixed-
term in nature. The nature of their claim therefore  What are some principles in regard to
is purely monetary, such as the payment of the monetary awards to OFWs?
salary for the unexpired portion of the 1. Monetary award to OFW is not in the nature of
employment contract in case their dismissal is separation pay or back wages but a form of
declared illegal. indemnity.
2. Only salaries are to be included in the
 What are the reliefs to which OFWs are computation of the amount due for the unexpired
entitled? portion of the contract. Overtime, holiday and
They are entitled to the reliefs provided under leave pay and allowances are not included.
Section 10 of R.A. No. 8042, as amended, to wit: However, this rule on exclusion of allowance does
not apply in case it is encapsulated in the basic
(1) All salaries for the unexpired portion of the salary clause.
contract; 3. Entitlement to overtime pay of OFWs. - As far
(2) Full reimbursement of placement fees and as entitlement to overtime pay is concerned, the
deductions made with interest at 12% per annum. correct criterion in determining whether or not
As pointed out above, all the reliefs available to sailors are entitled to overtime pay is not whether
an illegally dismissed OFW are always monetary they were on board and cannot leave ship beyond
in nature. the regular eight (8) working hours a day, but
whether they actually rendered service in excess
It must be noted that under the 2009 of said number of hours. An OFW is not entitled to
Serrano doctrine, (Serrano v. Gallant Maritime overtime pay, even if guaranteed, if he failed to
Services, Inc.,),3 an illegally dismissed OFW is present any evidence to prove that he rendered
now entitled to all the salaries for the entire service in excess of the regular eight (8) working
unexpired portion of their employment contracts, hours a day.
irrespective of the stipulated term or duration 4. In case of unauthorized deductions from OFW’s
thereof. The underlined phrase in Section 10 salary, he shall be entitled to the full
below has been declared unconstitutional in this reimbursement of the deductions made with
case: interest at 12% per annum. This is in addition to
the full reimbursement of his placement fee with
“In case of termination of overseas the same interest of 12% per annum plus his
employment without just, valid or authorized salaries for the unexpired portion of his
cause as defined by law or contract, or any employment contract if he is terminated without
unauthorized deductions from the migrant just, valid or authorized cause as defined by law
worker's salary, the worker shall be entitled to the or contract.
full reimbursement of his placement fee and the
deductions made with interest at twelve percent BAN ON DIRECT HIRING
(12%) per annum, plus his salaries for the
unexpired portion of his employment contract or  What is direct hiring?
for three (3) months for every year of the “Direct Hiring” refers to the process of directly
unexpired term, whichever is less.” hiring workers by employers for overseas
employment as authorized by the DOLE
However, R.A. No. 10022 (March 8, Secretary and processed by the POEA, including:
2010), which amended R.A. No. 8042 (Migrant 1. Those hired by international organizations;
Workers and Overseas Filipinos Act of 1995), has 2. Those hired by members of the diplomatic
replicated and re-enacted the same corps;
unconstitutional provision exactly as above 3. Name hires or workers who are able to secure
quoted. The question is: was the overseas employment opportunity with an
unconstitutionality of the above-underlined part of employer without the assistance or participation of
the provision cured by such replication or re- any agency.
enactment in the amendatory law?
 Does the POEA Administrator or the
The 2014 en banc case of Sameer Overseas DOLE Secretary or DOLE Regional

8
 Director have the power to issue c. Owners and representatives of foreign
closure order? principals whose companies are accredited by the
Yes. If upon preliminary examination or POEA, who come to the Philippines for a limited
surveillance, the DOLE Secretary, the POEA period and solely for the purpose of interviewing
Administrator or DOLE Regional Director is Filipino applicants for employment abroad;
satisfied that such danger or exploitation exists, a d. Foreign nationals who come to the Philippines
written order may be issued for the closure of the to teach, present and/or conduct research studies
establishment being used for illegal recruitment in universities and colleges as visiting, exchange
activity. or adjunct professors under formal agreements
between the universities or colleges in the
 Does the DOLE Secretary have the Philippines and foreign universities or colleges; or
power to issue warrant of arrest and between the Philippine government and foreign
search and seizure orders? government, provided that the exemption is on a
No. Salazar v. Achacoso, declared that the reciprocal basis;
exercise by the DOLE Secretary of his twin e. Permanent resident foreign nationals and
powers to issue arrest warrant and search and probationary or temporary resident visa holders
seizure orders provided under Article 38[c] of the under Section 13 (a-f) of the Philippine
Labor Code is unconstitutional. Only regular Immigration Act of 1940 and Section 3 of the Alien
courts can issue such orders. Social Integration Act of 1995 (R.A. 7917);
f. Refugees and Stateless Persons recognized by
B. EMPLOYMENT OF NON-RESIDENT DOJ pursuant to Article 17 of the UN Convention
ALIENS and Protocol Relating to status of Refugees and
Stateless Persons; and
 What is an ALIEN EMPLOYMENT g. All foreign nationals granted exemption by law.
PERMIT (AEP)?
AEP - a document issued by the DOLE Secretary  What are the categories of foreign
through the DOLE-Regional Director who has nationals EXCLUDED from securing
jurisdiction over the intended place of work of the AEP?
foreign national, authorizing the foreign national to a. Members of the governing board with voting
work in the Philippines. rights only and do not intervene in the
management of the corporation or in the day to
 Who are required to procure AEP? day operation of the enterprise.
All foreign nationals who intend to engage in b. President and Treasurer, who are part-owners
gainful employment in the Philippines are required of the company.
to apply for AEP. c. Those providing consultancy services who do
not have employers in the Philippines.
“Gainful employment” refers to a state or d. Intra-corporate transferee who is a manager,
condition that creates an employer-employee executive or specialist as defined below in
relationship between the Philippine-based accordance with Trade Agreements and an
company and the foreign national where the employee of the foreign service supplier for at
former has the power to hire or dismiss the least one (1) year continuous employment prior to
foreign national from employment, pays the deployment to a branch, subsidiary, affiliate or
salaries or wages thereof and has authority to representative office in the Philippines.
control the performance or conduct of the tasks  an Executive: a natural person within the
and duties. organisation who primarily directs the
management of the organisation and
 What are the categories of foreign exercises wide latitude in decision-making
nationals EXEMPTED from securing and receives only general supervision or
AEP? direction from higher level executives, the
a. All members of the diplomatic service and board of directors, or stockholders of the
foreign government officials accredited by and business; an executive would not directly
with reciprocity arrangement with the Philippine perform tasks related to the actual
government; provision of the service or services of the
b. Officers and staff of international organizations organisation;
of which the Philippine government is a member,  ii. a Manager: a natural person within
and their legitimate spouses desiring to work in the organisation who primarily directs the
the Philippines; organisation/department/subdivision and

9
 exercises supervisory and control
functions over other supervisory, A. CONDITIONS OF EMPLOYMENT
managerial or professional staff; does not 1. COVERAGE
include first-line supervisors unless
employees supervised are professionals;  Who are covered by the labor
does not include employees who primarily standards provisions of the Labor
perform tasks necessary for the provision Code?
of the service; or Employees in ALL establishments, whether
 iii. a Specialist: a natural person operated for profit or not, are covered by the law
within the organisation who possesses on labor standards.
knowledge at an advanced level of
expertise essential to the  Who are excluded?
establishment/provision of the service The following are excluded from the coverage of
and/or possesses proprietary knowledge the law on labor standards:
of the organisation's service, research a. Government employees;
equipment, techniques or management; b. Managerial employees;
may include, but is not limited to, c. Other officers or members of a managerial
members of a licensed profession. staff;
d. Workers paid by results;
All other intra-corporate transferees not e. Non-agricultural field personnel; and
within these categories as defined above are f. Members of the family of the employer.
required to secure an AEP prior to their
employment in the Philippines. 2. HOURS OF WORK
a. PRINCIPLES IN DETERMINING HOURS
e. Contractual service supplier who is a manager, WORKED
executive or specialist and an employee of a
foreign service supplier which has no commercial  What are compensable hours worked?
presence in the Philippines: The following shall be considered as
 who enters the Philippines temporarily to compensable hours worked:
supply a service pursuant to a contract a) All time during which an employee is required
between his/her employer and a service to be on duty or to be at the employer’s premises
consumer in the Philippines; or to be at a prescribed workplace; and
 ii. must possess the appropriate b) All time during which an employee is suffered
educational and professional or permitted to work.
qualifications; and
 iii. must be employed by the foreign “Fair day’s wage for a fair day’s labor,” remains
service supplier for at least one year prior the basic factor in determining the employees’
to the supply of service in the Philippines. wages and backwages.

f. Representative of the Foreign b. NORMAL HOURS OF WORK

Principal/Employer assigned in the Office of  What is the total normal hours of work
Licensed Manning Agency (OLMA) in accordance per day?
with the POEA law, rules and regulations. Eight (8) hours daily.

 What is the period of validity of an  What is overtime work?

AEP? Any work in excess of said eight (8) normal hours
One (1) year is the validity of an AEP. is considered overtime work.
Exception: When employment contract provides
otherwise but not to exceed three (3) years. The  May normal working hours be
AEP may be renewed subject to the conditions reduced?
imposed by law. Yes, provided that no corresponding reduction is
------------oOo------------ made on the employee’s wage or salary
equivalent to an 8- hour work day. In instances
where the number of hours required by the nature
of work is less than 8 hours, such number of
SYLLABUS MAJOR TOPIC 3 hours should be regarded as the employee’s full
LABOR STANDARDS working day.

10
  What are flexible working hours? d. NIGHT SHIFT DIFFERENTIAL
“Flexible work arrangements” refer to alternative (Article 86, Labor Code)
arrangements or schedules other than the  How is it reckoned and computed?
traditional or standard work hours, workdays and Night shift differential is equivalent to 10% of
workweek. The effectivity and implementation of employee's regular wage for each hour of work
any of the flexible work arrangements should be performed between 10:00 p.m. and 6:00 a.m. of
temporary in nature. the following day.

Under R.A. No. 8972, otherwise known as  What is the distinction between night
“The Solo Parents’ Welfare Act of 2000,” solo shift differential pay and overtime pay?
parents are allowed to work on a flexible When the work of an employee falls at night time,
schedule. The phrase “flexible work schedule” is the receipt of overtime pay shall not preclude the
defined in the same law as the right granted to a right to receive night differential pay. The reason
solo parent employee to vary his/her arrival and is the payment of the night differential pay is for
departure time without affecting the core work the work done during the night; while the payment
hours as defined by the employer. of the overtime pay is for work in excess of the
regular eight (8) working hours.
i. POWER INTERRUPTIONS/BROWNOUTS
 How is Night Shift Differential Pay
 What are the effects of power computed?
interruptions/brownouts? 1. Where night shift (10 p.m. to 6 a.m.) work is
The following are the effects of work interruption regular work.
due to brownouts: a. On an ordinary day: Plus 10% of the basic
a. Brown-outs of short duration but not exceeding hourly rate or a total of 110% of the basic hourly
twenty (20) minutes shall be treated as worked or rate.
compensable hours whether used productively by b. On a rest day, special day or regular holiday:
the employees or not. Plus 10% of the regular hourly rate on a rest day,
b. Brown-outs running for more than twenty (20) special day or regular holiday or a total of 110% of
minutes may not be treated as hours worked the regular hourly rate.
provided any of the following conditions are
present: 2. Where night shift (10 p.m. to 6 a.m.) work is
1. The employees can leave their overtime work.
workplace or go elsewhere whether within a. On an ordinary day: Plus 10% of the overtime
or without the work premises; or hourly rate on an ordinary day or a total of 110%
2. The employees can use the time of the overtime hourly rate on an ordinary day.
effectively for their own interest. b. On a rest day or special day or regular holiday:
c. In each case, the employer may extend the Plus 10% of the overtime hourly rate on a rest day
working hours of his employees outside the or special day or regular holiday.
regular schedules to compensate for the loss of
productive man-hours without being liable for 3. For overtime work in the night shift. Since
overtime pay. overtime work is not usually eight (8) hours,
the compensation for overtime night shift work is
c. MEAL PERIODS also computed on the basis of the hourly rate.
(Article 85, Labor Code) a. On an ordinary day. Plus 10% of 125% of
 What is the rule on time-off for regular basic hourly rate or a total of 110% of 125% of
meal? basic hourly rate.
Every employer is required to give his employees, b. On a rest day or special day or regular holiday.
regardless of sex, not less than one (1) hour (or Plus 10% of 130% of regular hourly rate on said
60 minutes) time-off for regular meals. days or a total of 110% of 130% of the applicable
regular hourly rate.
 Is meal break compensable?
Being time-off, it is not compensable hours e. OVERTIME
worked. In this case, the employee is free to do (Article 87, Labor Code)
anything he wants, except to work. If he is  What are some basic principles on
required, however, to work while eating, he should overtime work?
be compensated therefor. 1. Work rendered after normal eight (8) hours of
work is called “overtime work.”

11
2. In computing overtime work, "regular wage" or  What is built-in overtime pay?
"basic salary" means "cash" wage only without In case the employment contract stipulates that
deduction for the compensation includes built-in overtime pay
facilities provided by the employer. and the same is duly approved by the DOLE, the
3. "Premium pay" means the additional non-payment by the employer of any overtime pay
compensation required by law for work performed for overtime work is justified and valid.
within eight (8) hours on non-working days, such
as regular holidays, special holidays and rest  What is emergency overtime work?
days. (Article 89, Labor Code).
4. "Overtime pay" means the additional a. General rule.
compensation for work performed beyond eight The general rule is that no employee may be
(8) hours. compelled to render overtime work against his
5. Illustrations on how overtime is computed: will. The reason is that this will constitute
a. For overtime work performed on an involuntary servitude.
ORDINARY DAY, the overtime pay is plus b. Exceptions when employee may be compelled
25% of the basic hourly rate. to render overtime work:
b. For overtime work performed on a 1. When the country is at war or when any
REST DAY OR ON A SPECIAL DAY, the other national or local emergency has
overtime pay is plus 30% of the basic been declared by the National Assembly
hourly rate which includes 30% additional or the Chief Executive;
compensation as provided in Article 93 [a] 2. When overtime work is necessary to
of the Labor Code. prevent loss of life or property or in case
c. For overtime work performed on a of imminent danger to public safety due to
REST DAY WHICH FALLS ON A actual or impending emergency in the
SPECIAL DAY, the overtime pay is plus locality caused by serious accident, fire,
30% of the basic hourly rate which floods, typhoons, earthquake, epidemic or
includes 50% additional compensation as other disasters or calamities;
provided in Article 93 [c] of the Labor 3. When there is urgent work to be
Code. performed on machines, installations or
d. For overtime work performed on a equipment, or in order to avoid serious
REGULAR HOLIDAY, the overtime pay is loss or damage to the employer or some
plus 30% of the basic hourly rate which other causes of similar nature;
includes 100% additional compensation 4. When the work is necessary to prevent
as provided in Article 94 [b] of the Labor loss or damage to perishable goods;
Code. 5. When the completion or continuation of
e. For overtime work performed on a work started before the 8th hour is
REST DAY WHICH FALLS ON A necessary to prevent serious obstruction
REGULAR HOLIDAY, the overtime pay is or prejudice to the business or operations
plus 30% of the basic hourly rate which of the employer; and
includes 160% additional compensation. 6. When overtime work is necessary to
avail of favorable weather or
 What is the distinction between environmental conditions where
PREMIUM PAY and OVERTIME PAY? performance or quality of work is
“Premium pay” refers to the additional dependent thereon.
compensation required by law for work performed
within the eight (8) normal hours of work on non-  May an employee validly refuse to
working days, such as rest days and regular and render overtime work under any of the
special holidays. afore-said circumstances?
No. When an employee refuses to render
“Overtime pay” refers to the additional emergency overtime work under any of the
compensation for work performed beyond the foregoing conditions, he may be dismissed on the
eight (8) normal hours of work on a given day. An ground of insubordination or willful disobedience
employee is entitled to both premium pay and of the lawful order of the employer.
overtime pay if he works on a non-working day
and renders overtime work on the same day.

12
  Can overtime pay be waived? hourly rate on said day
No. The right to claim overtime pay is not subject
to a waiver. Such right is governed by law and not 2.How is premium pay for SPECIAL
merely by the agreement of the parties. (NON-WORKING) DAYS OR SPECIAL
HOLIDAYS computed?
f. COMPUTATION OF ADDITIONAL  If the employee did not work, the “no work, no
COMPENSATION (RATES ONLY) pay” principle shall apply, unless there is a
favorable company policy, practice, or CBA
1. How is premium pay for REGULAR granting payment on a special day.
HOLIDAYS computed?  If the employee worked, he/she shall be paid
 If the employee did not work, he/she shall an additional 30 percent of his/her daily rate
be paid 100 percent of his/her salary for on the first eight hours of work. Computation:
that day. Computation: (Daily rate + Cost [(Daily rate x 130%) + COLA).
of Living Allowance) x 100%. The COLA is  If the employee worked in excess of eight
included in the computation of regular hours (overtime work), he/she shall be paid
holiday pay. an additional 30 percent of his/her hourly rate
 If the employee worked, he/she shall be on said day. Computation: (Hourly rate of the
paid 200 percent of his/her regular salary basic daily wage x 130% x 130% x number of
for that day for the first eight hours. hours worked).
Computation: (Daily rate + COLA) x  If the employee worked during a special day
200%. The COLA is also included in that also falls on his/her rest day, he/she shall
computation of regular holiday pay. be paid an additional fifty percent of his/her
 If the employee worked in excess of eight daily rate on the first eight hours of work.
hours (overtime work), he/she shall be Computation: [(Daily rate x 150%) + COLA].
paid an additional 30 percent of his/her  If the employee worked in excess of eight
hourly rate on said day. Computation: hours (overtime work) during a special day
Hourly rate of the basic daily wage x that also falls on his/her rest day, he/she shall
200% x 130% x number of hours worked. be paid an additional 30 percent of his/her
 If the employee worked during a regular hourly rate on said day. Computation: (Hourly
holiday that also falls on his/her rest day, rate of the basic daily wage x 150% x 130% x
he/she shall be paid an additional 30 number of hours worked).
percent of his/her daily rate of 200
percent. Computation: (Daily rate + Simplified Computation:
COLA) x 200%] + (30% [Daily rate x a. If unworked -
200%)].  No pay, except if there is a company
 If the employee worked in excess of eight policy, practice, or collective bargaining
hours (overtime work) during a regular agreement (CBA) which grants payment
holiday that also falls on his/her rest day, of wages on special days even if
he/she shall be paid an additional 30 unworked.
percent of his/her hourly rate on said day.
Computation: (Hourly rate of the basic b. If worked -
daily wage x 200% x 130% x 130% x  First 8 hours – plus 30% of the daily rate
number of hours worked); of 100%
 Work in excess of 8 hours – plus 30% of
Simplified Computation: hourly rate on said day
a.If work is rendered on an employee’s
regular workday - c. If falling on the employee’s rest day and if
If unworked – 100% worked -
If worked – 1st 8 hours – 200%  First 8 hours – plus 50% of the daily rate
Work in excess of 8 hours – plus 30% of of 100%
hourly rate on said day  Work in excess of 8 hours – plus 30% of
hourly rate on said day
b.If it is an employee’s rest day -
If unworked – 100% 3. What are the effects of absences on the
If worked – first 8 hours – plus 30% of computation of holiday pay?
200% 1. Employees on leave of absence with pay -
Work in excess of 8 hours – plus 30% of entitled to holiday pay when they are on leave of

13
absence with pay.  What is the rule on deductibility of
2. Employees on leave of absence without pay on facilities and supplements?
the day immediately preceding the regular holiday Facilities are deductible from wage but not
- may not be paid the required holiday pay if they supplements.
have not worked on such regular holiday.
3. Employees on leave while on SSS or g. REST PERIODS
employee’s compensation benefits - Employers 1. WEEKLY REST DAY
should grant the same percentage of the holiday  What is the duration of weekly rest
pay as the benefit granted by competent authority period?
in the form of employee’s compensation or social It shall be the duty of every employer, whether
security payment, whichever is higher, if they are operating for profit or not, to provide each of his
not reporting for work while on such benefits. employees a rest period of not less than twenty-
4. When day preceding regular holiday is a non- four (24) consecutive hours after every six (6)
working day or scheduled rest day - should not be consecutive normal work days.
deemed to be on leave of absence on that day, in
which case, employees are entitled to the regular  Is the employer’s prerogative to
holiday pay if they worked on the day immediately determine the rest period of its
preceding the non-working day or rest day. employees subject to limitations?
Yes. The employer shall determine and schedule
FACILITIES VS. SUPPLEMENTS the weekly rest day of his employees subject to
 What are facilities? CBA and to such rules and regulations as the
“Facilities” include articles or services for the DOLE Secretary may provide. However, the
benefit of the employee or his family but does not employer shall respect the preference of
include tools of the trade or articles or services employees as to their weekly rest day when such
primarily for the benefit of the employer or preference is based on religious grounds.
necessary to the conduct of the employer’s
business. They are items of expense necessary 2.EMERGENCY REST DAY WORK
for the laborer’s and his family’s existence and  When can an employer require work on
subsistence which form part of the wage and a rest day?
when furnished by the employer, are deductible The employer may require any of its employees to
therefrom, since if they are not so furnished, the work on their scheduled rest day for the duration
laborer would spend and pay for them just the of the following emergency and exceptional
same. conditions:
a. In case of actual or impending emergencies
 What are supplements? caused by serious accident, fire, flood, typhoon,
The term “supplements” means extra earthquake, epidemic or other disaster or
remuneration or special privileges or benefits calamity, to prevent loss of life and property, or in
given to or received by the laborers over and case of force majeure or imminent danger to
above their ordinary earnings or wages. public safety;
b. In case of urgent work to be performed on
 What are the distinctions between machineries, equipment, or installations, to avoid
facilities and supplements? serious loss which the employer would otherwise
The benefit or privilege given to the employee suffer;
which constitutes an extra remuneration over and c. In the event of abnormal pressure of work due
above his basic or ordinary earning or wage is to special circumstances, where the employer
supplement; and when said benefit or privilege is cannot ordinarily be expected to resort to other
made part of the laborer’s basic wage, it is a measures;
facility. The criterion is not so much with the kind d. To prevent serious loss of perishable goods;
of the benefit or item (food, lodging, bonus or sick e. Where the nature of the work is such that the
leave) given but its purpose. Thus, free meals employees have to work continuously for seven
supplied by the ship operator to crew members, (7) days in a week or more, as in the case of the
out of necessity, cannot be considered as facilities crew members of a vessel to complete a voyage
but supplements which could not be reduced and in other similar cases; and
having been given not as part of wages but as a f. When the work is necessary to avail of
necessary matter in the maintenance of the health favorable weather or environmental conditions
and efficiency of the crew during the voyage. where performance or quality of work is
dependent thereon.

14
 however, are not covered by this benefit as they
h. HOLIDAYS are considered exempted employees:
1. Government employees, whether employed by
1. What are the regular and special holidays? the National Government or any of its political
(a) Regular Holidays subdivisions, including those employed in
New Year's Day - January 1 government-owned and/or controlled corporations
Maundy Thursday - Movable Date with original charters or created under special
Good Friday - Movable Date laws;
Eidul Fitr - Movable Date 2. Those of retail and service establishments
Eidul Adha - Movable Date regularly employing less than ten (10) workers;
Araw ng Kagitingan - Monday nearest April 9 3. Kasambahay and persons in the personal
Labor Day - Monday nearest May 1 service of another;
Independence Day - Monday nearest June 12 4. Managerial employees, if they meet all of the
National Heroes Day - Last Monday of August following conditions:
Bonifacio Day - Monday nearest 4.1. Their primary duty is to manage the
November 30 Christmas Day - December 25 establishment in which they are employed
Rizal Day - Monday nearest or of a department or subdivision thereof;
December 30 4.2. They customarily and regularly direct
the work of two or more employees
(b) Nationwide Special Holidays therein; and
Ninoy Aquino Day - Monday nearest August 21 4.3. They have the authority to hire or fire
All Saints’ Day - November 1 Feast of other employees of lower rank; or their
Immaculate suggestions and recommendations as to
Conception of Mary - December 8 hiring, firing, and promotion, or any other
Last Day of the Year - December 31 change of status of other employees are
given particular weight.
2. How many are the guaranteed paid regular 5. Officers or members of a managerial staff, if
holidays? they perform the following duties and
There are twelve (12) paid regular responsibilities:
holidays in a year. This is important for purposes 5.1. Primarily perform work directly related
of reckoning certain divisors and computation of to management policies of their employer;
employee benefits. The provision on holiday pay 5.2. Customarily and regularly exercise
is mandatory, regardless of whether an employee discretion and independent judgment;
is paid on a monthly or daily basis.1 5.3. (a) Regularly and directly assist a
proprietor or managerial employee in the
3. What is the Holiday Pay Rule? management of the establishment or
“Holiday pay” refers to the payment of the subdivision thereof in which he or she is
regular daily wage for any unworked regular employed; or (b) execute, under general
holiday.2 The Holiday Pay Rule, therefore, applies supervision, work along specialized or
to entitlement to holiday pay during regular technical lines requiring special training,
holidays and not during special non-working days. experience, or knowledge; or (c) execute,
Thus, every employee covered by the Holiday under general supervision, special
Pay Rule is entitled to the minimum wage rate assignments and tasks; and
(Daily Basic Wage and COLA). This means that 5.4. Do not devote more than twenty
the employee is entitled to at least 100% of his percent (20%) of their hours worked in a
minimum wage rate even if he did not report for workweek to activities which are not
work, provided he is present or is on leave of directly and closely related to the
absence with pay on the workday immediately performance of the work described in
preceding the holiday. Should the worker work on paragraphs 5.1, 5.2, and
that day, such work performed on that day would 5.3 above.
merit at least twice or two hundred percent 6. Field personnel and other employees
(200%) of the wage rate of the employee. whose time and performance are unsupervised by
the employer, including those who are engaged
4. What is the coverage of the Holiday on task or contract basis, purely commission
Pay Rule? Who are exempted employees? basis or those who are paid a fixed amount for
As a general rule, the holiday pay benefit performing work irrespective of the time
is applicable to all employees. The following, consumed in the performance thereof.

15
 i. SERVICE INCENTIVE LEAVE supervision, work along specialized or
technical lines requiring special training,
1. What is service incentive leave? experience, or knowledge; or (c) execute,
Every covered employee who has under general supervision, special
rendered at least one (1) year of service is entitled assignments and tasks; and
to a yearly service incentive leave of five (5) days 4.4. Do not devote more than twenty
with pay. percent (20%) of their hours worked in a
workweek to activities which are not
The term “at least one year of service” directly and closely related to the
should mean service within twelve (12) months, performance of the work described in
whether continuous or broken, reckoned from the paragraphs 4.1, 4.2, and 4.3 above;
date the employee started working, including 5. Field personnel and those whose time and
authorized absences and paid regular holidays, performance are unsupervised by the employer,2
unless the number of working days in the including those who are engaged on task or
establishment as a matter of practice or policy, or contract basis, purely commission basis, or those
that provided in the employment contract, is less who are paid a fixed amount for performing work
than twelve (12) months, in which case, said irrespective of the time consumed in the
period should be considered as one (1) year for performance thereof;
the purpose of determining entitlement to the 6. Those already enjoying this benefit;
service incentive leave benefit. 7. Those enjoying vacation leave with pay of at
least five (5) days; and
2. Who are excluded from its coverage? 8. Those employed in establishments regularly
All employees are covered by the rule on employing less than ten (10) employees.
service incentive leave except:
1. Government employees, whether employed by 3. Are KASAMBAHAYS entitled to SIL?
the National Government or any of its political Yes, but the grant of 5-day SIL to
subdivisions, including those employed in domestic workers or kasambahays is not based
government-owned and/or controlled corporations on Article 95 of the Labor Code but on the
with original charters or created under special following provision of R.A. 10361:
laws; “SEC. 29. Leave Benefits. – A domestic worker
2. Persons in the personal service of another; who has rendered at least one (1) year of service
3. Managerial employees, if they meet all of the shall be entitled to an annual service incentive
following conditions: leave of five (5) days with pay: Provided, That any
3.1. Their primary duty is to manage the unused portion of said annual leave shall not be
establishment in which they are employed cumulative or carried over to the succeeding
or of a department or subdivision thereof; years. Unused leaves shall not be convertible to
3.2. They customarily and regularly direct cash.”
the work of two or more employees
therein; and 4. Are unavailed service incentive leaves
3.3. They have the authority to hire or fire commutable to cash?
other employees of lower rank; or their Yes. The service incentive leave is commutable to
suggestions and recommendations as to its money equivalent if not used or exhausted at
hiring, firing, and promotion, or any other the end of
change of status of other employees are
given particular weight. j. SERVICE CHARGE
4. Officers or members of a managerial staff, if
they perform the following duties and 1. What is the newest law on service
responsibilities: charges?
4.1. Primarily perform work directly related R.A. No. 11360 which was approved on
to management policies of their employer; August 07, 2019. It amended Article 96 of the
4.2. Customarily and regularly exercise Labor Code. It thus now states:
discretion and independent judgment;
4.3. (a) Regularly and directly assist a "ART. 96. Service Charges. - All service charges
proprietor or managerial employee in the collected by hotels, restaurants and similar
management of the establishment or establishments shall be DISTRIBUTED
subdivision thereof in which he or she is COMPLETELY AND EQUALLY AMONG THE
employed; or (b) execute, under general COVERED WORKERS EXCEPT MANAGERIAL

16
EMPLOYEES. designation or employment status and
"In the event that the minimum wage is irrespective of the method by which their wages
increased by law or wage order, service charges are paid, are entitled to the 13th month pay
paid to the covered employees shall not be benefit. Managerial employees are not entitled to
considered in determining the employer's 13th month pay.
compliance with the increased minimum wage.
 What is the minimum period of service
"To facilitate resolution of any dispute required in a calendar year to be
between the management and the employees on entitled to 13th month pay?
the distribution of service charges, a grievance To be entitled to the 13th month pay benefit, it is
mechanism shall be established. If no grievance imposed as a minimum service requirement that
mechanism is established or if inadequate, the the employee should have worked for at least one
grievance shall be referred to the regional office of (1) month during a calendar year.
the Department of Labor and Employment which
has jurisdiction over the workplace for conciliation.  When should 13th month pay be paid?
It must be paid not later than December 24 of
"For purposes of this Article, managerial every year.
employees refer to any person vested with
powers or prerogatives to lay down and execute  Who are excluded from its coverage?
management policies or hire, transfer, suspend, The following employers are not covered by the
lay-off, recall, discharge, assign or discipline 13th month pay law:
employees or to effectively recommend such 1. The government and any of its political
managerial actions." subdivisions, including government-owned and
controlled corporations, except those corporations
2. What are the kinds of establishment operating essentially as private subsidiaries of the
covered by the law on service charge? government.
The rules on service charge apply only to 2. Employers already paying their employees 13th
establishments collecting service charges, such month pay or more in a calendar year or its
as hotels, restaurants, lodging houses, night equivalent at the time of the issuance of the
clubs, cocktail lounges, massage clinics, bars, Revised Guidelines.
casinos and gambling houses, and similar 3. Employers of those who are paid on purely
enterprises, including those entities operating commission, boundary, or task basis, and those
primarily as private subsidiaries of the who are paid a fixed amount for performing a
government. specific work, irrespective of the time consumed
in the performance thereof, except where the
3. Who are the employees covered by this workers are paid on piece-rate basis, in which
law? case, the employer shall be covered by the
With the latest amendatory law cited Revised Guidelines insofar as such workers are
above, all service charges collected by hotels, concerned. Workers paid on piece- rate basis
restaurants and similar establishments shall be shall refer to those who are paid a standard
distributed completely and equally among the amount for every piece or unit of work produced
covered workers except managerial employees. that is more or less regularly replicated without
regard to the time spent in producing the same.
4. Who are not covered?
Specifically excluded from coverage are  Are domestic workers or Kasambahays
managerial employees, referring to any person covered?
vested with powers or prerogatives to lay down Yes. They are now covered under the
and execute management policies or hire, Kasambahay Law.
transfer, suspend, lay-off, recall, discharge,
assign or discipline employees or to effectively  Are extras, casuals and seasonal
recommend such managerial actions. employees entitled to 13th month pay?
Yes, they are entitled thereto.
k. 13TH MONTH PAY
 Is 13th month pay part of wage?
 Who are covered by the 13th month 13th month pay which is in the nature of additional
pay law? income, is based on wage but not part of wage.
Only rank-and-file employees, regardless of their

17
  What is the minimum amount of the labor.
13th month pay?
The minimum 13th month pay should not be less  What are the attributes of wage?
than one-twelfth (1/12) of the total basic salary “Wage” has the following attributes:
earned by an employee within a calendar year. 1) It is the remuneration or earnings, however
designated, for work done or to be done or for
 What is meant by “basic salary” or services rendered or to be rendered;
“basic wage”? 2) It is capable of being expressed in terms of
“Basic salary” or “basic wage” contemplates work money, whether fixed or ascertained on a time,
within the normal eight (8) working hours in a day. task, piece or commission basis, or other method
This means that the basic salary of an employee of calculating the same;
for purposes of computing the 13th month pay 3) It is payable by an employer to an employee
should include all remunerations or earnings paid under a written or unwritten contract of
by the employer for services rendered during employment for work done or to be done or for
normal working hours. services rendered or to be rendered; and
4) It includes the fair and reasonable value, as
For purposes of computing the 13th determined by the DOLE Secretary, of board,
month pay, “basic salary” should be interpreted to lodging, or other facilities customarily furnished by
mean not the amount actually received by an the employer to the employee. “Fair and
employee, but 1/12 of their standard monthly reasonable value” shall not include any profit to
wage multiplied by their length of service within a the employer or to any person affiliated with the
given calendar year. employer.

B. WAGES  What is basic wage?

“Basic wage” means all the remuneration or
1. PAYMENT OF WAGES earnings paid by an employer to a worker for
 What is the basic distinction between services rendered on normal working days and
wage and salary? hours but does not include cost-of-living
The term “wage” is used to characterize the allowances, profit-sharing payments, premium
compensation paid for manual skilled or unskilled payments, 13th month pay or other monetary
labor. benefits which are not considered as part of or
integrated into the regular salary of the workers.
“Salary,” on the other hand, is used to describe
the compensation for higher or superior level of Further, as held in Honda Phils., Inc. v.
employment. Samahan ng Malayang Manggagawa sa Honda,
the following should be excluded from the
 What is the distinction in respect to computation of “basic salary,” to wit: payments for
execution, attachment or garnishment? sick, vacation and maternity leaves, night
In cases of execution, attachment or garnishment differentials, regular holiday pay and premiums for
of the compensation of an employee received work done on rest days and special holidays.
from work issued by the court to satisfy a
judicially-determined obligation, a distinction  What is minimum wage?
should be made whether such compensation is The minimum wage rates prescribed by law shall
considered “wage” or “salary.” Under Article 1708 be the basic cash wages without deduction
of the Civil Code, if considered a “wage,” the therefrom of whatever benefits, supplements or
employee’s compensation shall not be subject to allowances which the employees enjoy free of
execution or attachment or garnishment, except charge aside from the basic pay.
for debts incurred for food, shelter, clothing and
medical attendance. If deemed a “salary,” such  What is statutory minimum wage?
compensation is not exempt from execution or The term “statutory minimum wage” refers simply
attachment or garnishment. Thus, the salary, to the lowest basic wage rate fixed by law that an
commission and other remuneration received by a employer can pay his workers.
managerial employee (as distinguished from an
ordinary worker or laborer) cannot be considered  What is regional minimum wage rate?
wages. Salary is understood to relate to a position The term “regional minimum wage rates” refers to
or office, or the compensation given for official or the lowest basic wage rates that an employer can
other service; while wage is the compensation for pay his workers, as fixed by the Regional

18
Tripartite Wages and Productivity Boards employees to patronize any store or avail of the
(RTWPBs), and which shall not be lower than the services offered by any person.
applicable statutory minimum wage rates.
(2) WAGES NOT SUBJECT TO EXECUTION OR
 What are included/excluded in the term ATTACHMENT; EXCEPTION.
“wage rate”? The general rule is that laborer’s wages
The term "wage rate" includes cost-of-living are not subject to execution or attachment. The
allowances as fixed by the RTWPB, but excludes exception is when such execution or attachment
other wage-related benefits such as overtime pay, is made for debts incurred for food, shelter,
bonuses, night shift differential pay, holiday pay, clothing and medical attendance.
premium pay, 13th month pay, premium pay,
leave benefits, among others. (3) PROHIBITION ON DEDUCTIONS FROM
WAGES.
 Can COLA be integrated into the
minimum wage?  May employer deduct from wage of
Yes. The cost-of-living allowance (COLA) may be employees?
ordered integrated into the minimum wage by the The general rule is that an employer, by himself or
Regional Tripartite Wages and Productivity Board through his representative, is PROHIBITED from
(“RTWPB” or “Regional Board”). making any deductions from the wages of his
employees. The employer is not allowed to make
 What is COLA? unnecessary deductions without the knowledge or
COLA is not in the nature of an allowance authorization of the employees.
intended to reimburse expenses incurred by
employees in the performance of their official  Are there EXCEPTIONS to this rule?
functions. It is not payment in consideration of the Yes.
fulfillment of official duty. As defined, “cost of (a) In cases where the worker is insured with his
living” refers to “the level of prices relating to a consent by the employer, and the deduction is to
range of everyday items” or “the cost of recompense the employer for the amount paid by
purchasing the goods and services which are him as premium on the insurance;
included in an accepted standard level of (b) For union dues, in cases where the right of the
consumption.” Based on this premise, COLA is a worker or his union to check-off has been
benefit intended to cover increases in the cost of recognized by the employer or authorized in
living. writing by the individual worker concerned; and
(c) In cases where the employer is authorized by
 What is the “NO WORK, NO PAY” law or regulations issued by the DOLE Secretary.
principle? (d) Deductions for loss or damage under Article
The “no work, no pay” or “fair day’s wage for fair 114 of the Labor Code;
day’s labor” means that if the worker does not (e) Deductions made for agency fees from non-
work, he is generally not entitled to any wage or union members who accept the benefits under the
pay. The exception is when it was the employer CBA negotiated by the bargaining union. This
who unduly prevented him from working despite form of deduction does not require the written
his ableness, willingness and readiness to work; authorization of the non-bargaining union member
or in cases where he is illegally locked out or concerned;
illegally suspended or illegally dismissed, or (f) Deductions for value of meal and other
otherwise illegally prevented from working, in facilities;
which event, he should be entitled to his wage. (g) Deductions for premiums for SSS, PhilHealth,
employees’ compensation and Pag-IBIG;
2. PROHIBITIONS REGARDING WAGES (h) Withholding tax mandated under the National
(See Articles 112 to 119 of the Labor Code) Internal Revenue Code (NIRC);
(i) Withholding of wages because of the
(1) NON-INTERFERENCE BY EMPLOYER IN employee’s debt to the employer which is already
THE DISPOSAL BY EMPLOYEES OF THEIR due;
WAGES. (j) Deductions made pursuant to a court judgment
No employer is allowed to limit or against the worker under circumstances where
otherwise interfere with the freedom of any the wages may be the subject of attachment or
employee to dispose of his wages and no execution but only for debts incurred for food,
employer shall in any manner oblige any of his clothing, shelter and medical attendance;

19
(k) When deductions from wages are ordered by (8) RETALIATORY ACTIONS BY EMPLOYER.
the court; Article 118 of the Labor Code prohibits the
(4) PROHIBITION AGAINST DEPOSIT employer:
REQUIREMENT. (a) to refuse to pay the wages and benefits of an
Article 114 of the Labor Code prohibits the employee; or
employer to require that workers should make a (b) to reduce his wages and benefits; or
deposit from which deductions shall be made for (c) to discharge him from employment; or
the reimbursement of loss of tools, materials or (d) to discriminate against him in any manner; on
equipment supplied by him, or any damages account and by reason of said employee’s:
thereto. (1) act of filing any complaint or institution
of any proceeding under Title II [Wages],
PERMISSIBLE DEDUCTIONS FOR LOSS OR Book III of the Labor Code; or
DAMAGES. (2) act of testifying in said proceedings or
If the employer is engaged in a trade, when he is about to testify therein.
occupation or business where there is such
practice of making deductions or requiring (9) FALSE STATEMENT, REPORT OR
deposits to answer for the reimbursement of loss RECORD.
of or damage to tools, materials or equipment Article 119 of the Labor Code prohibits
supplied by the employer to the employee. any person, whether employer or not, to make
any false statement, report or record required to
(5) PROHIBITION ON WITHHOLDING OF be filed or kept in accordance with and pursuant
WAGES. to the provisions of the Labor Code, knowing such
Article 116 of the Labor Code prohibits statement, report or record to be false in any
any person, whether employer or not, directly or material respect.
indirectly, to withhold any amount from the wages
of a worker. Examples: Payrolls, time records, employment
records and production records, among others.
Under Article 1706 of the Civil Code,
withholding of the wages, except for a debt due, is
not allowed to be made by the employer. 3. WAGE DISTORTION; CONCEPT

Moreover, under Article 1709 of the same A. WAGE ORDER

Code, the employer is not allowed to seize or  What is a Wage Order?
retain any tool or other articles belonging to the The term “Wage Order” refers to the order
laborer. promulgated by the Regional Tripartite Wages
and Productivity Board (Regional Board) pursuant
(6) KICKBACKS. to its wage fixing authority.
Article 116 of the Labor Code also
prohibits “kickback” which consists in the act of  When is it proper to issue a Wage
any person, whether employer or not, directly or Order?
indirectly, to induce a worker to give up any part Whenever conditions in the region so warrant, the
of his wages by force, stealth, intimidation, threat Regional Board shall investigate and study all
or by any other means whatsoever, without the pertinent facts and based on the prescribed
worker’s consent. standards and criteria, shall proceed to determine
whether a Wage Order should be issued. Any
(7) PROHIBITION AGAINST DEDUCTION TO such Wage Order shall take effect after fifteen
ENSURE EMPLOYMENT. (15) days from its complete publication in at least
Article 117 of the Labor Code prohibits one (1) newspaper of general circulation in the
any person, whether the employer himself or his region.
representative or an intermediary, to require that a
deduction be made or to actually make any  What are the standards/criteria for
deduction from the wages of any employee or minimum wage fixing?
worker, for the benefit of such employer or his In the determination of regional minimum wages,
representative or an intermediary, as the Regional Board shall, among other relevant
consideration of a promise of employment or, factors, consider the following:
when already employed, for the continuation of (1) Needs of workers and their families
such employment or retention therein. 1) Demand for living wages;

20
 2) Wage adjustment vis-à-vis the either of the following:
consumer price index; 1. Elimination of the quantitative differences in the
3) Cost of living and changes therein; rates of wages or salaries; or
4) Needs of workers and their families; 2. Severe contraction of intentional quantitative
5) Improvements in standards of living. differences in wage or salary rates between and
among employee groups in an establishment as
(2) Capacity to pay to effectively obliterate the distinctions embodied
1) Fair return on capital invested and in such wage structure based on the following
capacity to pay of employers; criteria:
2) Productivity. a. Skills;
b. Length of service; or
(3) Comparable wages and incomes c. Other logical bases of differentiation.
1) Prevailing wage levels.
Wage distortion presupposes a
(4) Requirements of economic and social classification of positions and ranking of these
development positions at various levels. One visualizes a
1) Need to induce industries to invest in hierarchy of positions with corresponding ranks
the countryside; basically in terms of wages and other
2) Effects on employment generation and emoluments. Where a significant change occurs
family income; at the lowest level of positions in terms of basic
3) Equitable distribution of income and wage without a corresponding change in the other
wealth along the imperatives of economic and level in the hierarchy of positions, negating as a
social development. result thereof the distinction between one level of
position from the next higher level, and resulting
 What are the methods of fixing the in a parity between the lowest level and the next
minimum wage rates? higher level or rank, between new entrants and
There are two (2) methods, to wit: old hires, there exists a wage distortion. xxx. The
1. “Floor-Wage” method which involves the fixing concept of wage distortion assumes an existing
of a determinate amount to be added to the grouping or classification of employees which
prevailing statutory minimum wage rates. This establishes distinctions among such employees
was applied in earlier wage orders; and on some relevant or legitimate basis. This
2. “Salary-Cap” or “Salary-Ceiling” method where classification is reflected in a differing wage rate
the wage adjustment is to be applied to for each of the existing classes of employees.
employees receiving a certain denominated salary
ceiling. In other words, workers already being paid  What are the elements of wage
more than the existing minimum wage (up to a distortion?
certain amount stated in the Wage Order) are also The four (4) elements of wage distortion are as
to be given a wage increase. follows:
(1) An existing hierarchy of positions with
The “Salary-Cap” or “Salary-Ceiling” corresponding salary rates;
method is the preferred mode. (2) A significant change in the salary rate of a
lower pay class without a concomitant increase in
The distinction between the two (2) the salary rate of a higher one;
methods is best shown by way of an illustration. (3) The elimination of the distinction between the
Under the “Floor Wage Method,” it would be two levels; and
sufficient if the Wage Order simply set P15.00 as (4) The existence of the distortion in the same
the amount to be added to the prevailing statutory region of the country.
minimum wage rates; while in the “Salary-Ceiling
Method,” it would be sufficient if the Wage Order Normally, a company has a wage
states a specific salary, such as P250.00, and structure or method of determining the wages of
only those earning below it shall be entitled to the its employees. In a problem dealing with “wage
wage increase. distortion,” the basic assumption is that there
exists a grouping or classification of employees
b. WAGE DISTORTION that establishes distinctions among them on some
 What is wage distortion? relevant or legitimate bases.
“Wage distortion” contemplates a situation where
an increase in prescribed wage rates results in Involved in the classification of employees

21
are various factors such as the degrees of collective bargaining agreement (CBA), the
responsibility, the skills and knowledge required, employer is likewise under legal compulsion to so
the complexity of the job, or other logical basis of comply therewith.
differentiation. The differing wage rate for each of
the existing classes of employees reflects this On No. 3 above, please see discussion below.
classification.
4.1. COMPANY PRACTICE
 What is the formula for rectifying or
resolving wage distortion?  What is company practice?
Following is the formula for the correction of wage Company practice is a custom or habit shown by
distortion in the pay scale structures: an employer’s repeated, habitual customary or
Minimum Wage = % x Prescribed Increase = succession of acts of similar kind by reason of
Distortion Adjustment Actual Salary which, it gains the status of a company policy that
The above formula was held to be just and can no longer be disturbed or withdrawn.
equitable.
To ripen into a company practice that is
4. NON-DIMINUTION OF BENEFITS demandable as a matter of right, the giving of the
benefit should not be by reason of a strict legal or
 What is the applicability of the non- contractual obligation but by reason of an act of
diminution rule in Article 100 of the liberality on the part of the employer.
Labor Code?
Albeit Article 100 is clear that the principle of non-  What are the criteria that may be used
elimination and non-diminution of benefits apply to determine existence of company
only to the benefits being enjoyed “at the time of practice?
the promulgation” of the Labor Code, the Since there is no hard and fast rule which may be
Supreme Court has consistently cited Article 100 used and applied in determining whether a certain
as being applicable even to benefits granted after act of the employer may be considered as having
said promulgation. It has, in fact, been treated as ripened into a practice, the following criteria may
the legal anchor for the declaration of the be used to determine whether an act has ripened
invalidity of so many acts of employers deemed to into a company practice:
have eliminated or diminished the benefits of (1) The act of the employer has been
employees. done for a considerable period of time;
(2) The act should be done consistently
The 2014 case of Wesleyan University- and intentionally; and
Philippines v. Wesleyan University-Philippines (3) The act should not be a product of
Faculty and Staff Association,1 succinctly pointed erroneous interpretation or construction of
out that the Non-Diminution Rule found in Article a doubtful or difficult question of law or
100 of the Labor Code explicitly prohibits provision in the CBA.
employers from eliminating or reducing the (See the 2013 case of Vergara, Jr. v. Coca-Cola
benefits received by their employees. This rule, Bottlers Philippines, Inc.2)
however, applies only if the benefit is based on
any of the following: 1. THE ACT OF THE EMPLOYER HAS BEEN
(1) An express policy; DONE FOR A CONSIDERABLE PERIOD OF
(2) A written contract; or TIME.
(3) A company practice. If done only once as in the case of
Philippine Appliance Corporation (Philacor) v.
There is not much controversy if the CA,3 where the CBA signing bonus was granted
benefit involved is provided for under Nos. 1 and only once during the 1997 CBA negotiation, the
2 above. Thus, if it is expressly laid down in a same cannot be considered as having ripened
written policy unilaterally promulgated by the into a company practice.
employer, the employer is duty-bound to adhere
and comply by its own policy. It cannot be allowed In the following cases, the act of the
to renege from its commitment as expressed in employer was declared company practice
the policy. because of the considerable period of time it has
been practiced:
If the benefit is granted under a written (a) Davao Fruits Corporation v. Associated Labor
contract such as an employment contract or a Unions.4 - The act of the company of freely and

22
continuously including in the computation of the proper
13th month pay, items that were expressly computation of the cost-of-living allowance
excluded by law has lasted for six (6) years, (COLA) for monthly-paid employees. Petitioner
hence, was considered indicative of company corporation, pursuant to Wage Order No. 6
practice. (effective October 30, 1984), increased the COLA
(b) Sevilla Trading Company v. A. V. A. Semana.5 of its monthly-paid employees by multiplying the
- The act of including non-basic benefits such as P3.00 daily COLA by 22 days which is the number
paid leaves for unused sick leave and vacation of working days in the company. The union
leave in the computation of the employees’ 13th disagreed with the computation, claiming that the
month pay for at least two (2) years was daily COLA rate of P3.00 should be multiplied by
considered a company practice. 30 days which has been the practice of the
(c) The 2010 case of Central Azucarera de Tarlac company for several years. The Supreme Court,
v. Central Azucarera de Tarlac Labor Union- however, upheld the contention of the petitioner
NLU,6 also ruled as company practice the act of corporation. It held that the grant by the employer
petitioner of granting for thirty (30) years, its of benefits through an erroneous application of
workers the mandatory 13th month pay computed the law due to absence of clear administrative
in accordance with the following formula: Total guidelines is not considered a voluntary act which
Basic Annual Salary divided by twelve (12) and cannot be unilaterally discontinued.
Including in the computation of the Total Basic (b) TSPIC Corp. v. TSPIC Employees Union
Annual Salary the following: basic monthly salary; [FFW],3 where the Supreme Court reiterated the
first eight (8) hours overtime pay on Sunday and rule enunciated in Globe-Mackay, that an
legal/special holiday; night premium pay; and erroneously granted benefit may be withdrawn
vacation and sick leaves for each year. without violating the prohibition against non-
diminution of benefits. No vested right accrued to
2. THE ACT SHOULD BE DONE individual respondents when TSPIC corrected its
CONSISTENTLY AND INTENTIONALLY. error by crediting the salary increase for the year
The following cases may be cited to 2001 against the salary increase granted under
illustrate this principle: Wage Order No. 8, all in accordance with the
(a) Tiangco v. Leogardo, Jr.,1 where the employer CBA. Hence, any amount given to the employees
has consistently been granting fixed monthly in excess of what they were entitled to, as
emergency allowance to the employees from computed above, may be legally deducted by
November, 1976 but discontinued this practice TSPIC from the employees’ salaries.
effective February, 1980 insofar as non-working
days are concerned based on the principle of “no But if the error does not proceed from the
work, no pay.” The Supreme Court ruled that the interpretation or construction of a law or a
discontinuance of said benefit contravened Article provision in the CBA, the same may ripen into a
100 of the Labor Code which prohibits the company practice.
diminution of existing benefits.
Example:
3. THE ACT SHOULD NOT BE A PRODUCT OF (a) Hinatuan Mining Corporation and/or the
ERRONEOUS INTERPRETATION OR Manager v. NLRC,4 where the act of the
CONSTRUCTION OF A DOUBTFUL OR employer in granting separation pay to resigning
DIFFICULT QUESTION OF LAW OR employees, despite the fact that the Labor Code
PROVISION IN THE CBA. does not grant it, was considered an established
The general rule is that if it is a past error employer practice.
that is being corrected, no vested right may be
said to have arisen therefrom nor any diminution C. LEAVES
of benefit may have resulted by virtue of the 1. SERVICE INCENTIVE LEAVE
correction thereof. The error, however, must be (See discussion above under the topic of
corrected immediately after its discovery; CONDITIONS OF EMPLOYMENT)
otherwise, the rule on non-diminution of benefits
would still apply. 2. MATERNITY LEAVE

The following cases would illuminate this  What is the new 105-DAY EXPANDED
principle: MATERNITY LEAVE LAW (R.A. NO.
(a) Globe Mackay Cable and Radio Corporation v. 11210)?
NLRC,2 where the Supreme Court ruled on the On February 20, 2019, President Rodrigo Duterte

23
approved R.A. No. 11210, otherwise known as The maternity benefits shall be paid only for the
the “105-Day Expanded Maternity Leave Law.”5 first four (4) deliveries or miscarriages.
This is the prevailing law on maternity leave  Is an unmarried woman entitled to
benefit. maternity leave benefit under both old
and new law?
 Who are the women entitled to Yes. For as long as a woman is pregnant, she is
maternity leave? entitled to maternity leave benefit regardless of
All covered females, regardless of civil status, whether she is married or unmarried.
employment status, and the legitimacy of her
child, are entitled to maternity leave.
3. PATERNITY LEAVE
 What is the period of leave?
Under the old law: 60 days – for normal delivery;  What is paternity leave benefit?
and 78 days – for caesarian delivery “Paternity leave” covers a married male employee
allowing him not to report for work for seven (7)
Under the new law: CALENDAR days but continues to earn the
1. Paid leave benefit granted to a qualified female compensation therefor, on the condition that his
worker in both the PUBLIC SECTOR and the spouse has delivered a child or suffered
PRIVATE SECTOR (which is covered by the miscarriage for purposes of enabling him to
SSS, including those in the informal economy), for effectively lend support to his wife in her period of
recovery and/or in the nursing of the newly-born
child.

“Delivery” includes childbirth or any miscarriage.

“Spouse” refers to the lawful wife. For this

purpose, “lawful wife” refers to a woman who is
legally married to the male employee concerned.
“Cohabiting” refers to the obligation of the
husband and wife to live together.

 What is the covered total number of

deliveries?
Every married employee in the private and public
sectors is entitled to a paternity leave of seven (7)
calendar days with full pay for the first four (4)
deliveries of the legitimate spouse with whom he
is cohabiting.
the duration of:
Paternity leave benefits are granted to the
NOTE: This discussion on the 2019 new maternity
qualified employee after the delivery by his wife,
benefits law is being made here only for academic
without prejudice to an employer allowing an
purposes. It is highly unlikely that a question will
employee to avail of the benefit before or during
be asked on this in the 2019 bar exam because
the delivery, provided that the total number of
this law was passed way beyond the cut-off date
days should not exceed seven (7) calendar days
of June 30, 2018.
for each delivery.
 What is the amount granted under the
 Is an unavailed paternity leave benefit
old law?
convertible to cash?
Daily maternity benefit equivalent to 100% of her
No. In the event that the paternity leave benefit is
average daily salary credit for sixty (60) days or
not availed of, said leave shall not be convertible
seventy- eight (78) days in case of caesarian
to cash.
delivery/
4. SOLO PARENT LEAVE (R.A. No. 8972)
 What is the number of delivery or
miscarriage covered under the old
 What is the solo parent leave?
law?
This is the leave benefit granted to a male or

24
female solo parent to enable him/her to perform the death, abandonment, disappearance or
parental duties and responsibilities where his/her prolonged absence of the parents or solo parent.
physical presence is required.
 What is the effect of change of status
 How many days may be availed of as of the solo parent?
solo parent leave? A change in the status or circumstance of the
The solo parent leave shall not be more than parent claiming benefits under the law, such that
seven (7) WORKING days every year to a solo he/she is no longer left alone with the
parent who has rendered service of at least one responsibility of parenthood, shall terminate
(1) year, to enable him/her to perform parental his/her eligibility for these benefits.
duties and responsibilities where his/her physical
presence is required. This leave shall be non-  Who are considered children under
cumulative. this law?
"Children" refer to those living with and dependent
It bears noting that this leave privilege is an upon the solo parent for support who are
additional leave benefit which is separate and unmarried, unemployed and not more than
distinct from any other leave benefits provided eighteen (18) years of age, or even over eighteen
under existing laws or agreements. (18) years but are incapable of self- support
because of mental and/or physical
 Who is a solo parent? defect/disability.
The term "solo parent" refers to any individual
who falls under any of the following categories:  Is an unavailed parental leave
(1) A woman who gives birth as a result of rape convertible to cash?
and other crimes against chastity even without a No. In the event that the parental leave is not
final conviction of the offender: Provided, That the availed of, said leave shall not be convertible to
mother keeps and raises the child; cash unless specifically agreed upon previously.
(2) Parent left solo or alone with the responsibility
of parenthood due to death of spouse; 5. LEAVE BENEFITS FOR WOMEN WORKERS
(3) Parent left solo or alone with the responsibility UNDER R.A. 9710 AND R.A. 9262
of parenthood while the spouse is detained or is
serving sentence for a criminal conviction for at a. SPECIAL LEAVES FOR WOMEN WORKERS
least one (1) year; (R.A. No. 9710)
(4) Parent left solo or alone with the responsibility
of parenthood due to physical and/or mental  What is this special leave benefit?
incapacity of spouse as certified by a public A special leave benefit for women was granted
medical practitioner; under R.A. No. 9710, otherwise known as “The
(5) Parent left solo or alone with the responsibility Magna Carta of Women” [August 14, 2009]. Thus,
of parenthood due to legal separation or de facto any female employee in the public and private
separation from spouse for at least one (1) year, sector regardless of age and civil status shall be
as long as he/she is entrusted with the custody of entitled to a special leave of two (2) months with
the children; full pay based on her gross monthly
(6) Parent left solo or alone with the responsibility compensation subject to existing laws, rules and
of parenthood due to declaration of nullity or regulations due to surgery caused by
annulment of marriage as decreed by a court or gynecological disorders under the following terms
by a church as long as he/she is entrusted with and conditions:
the custody of the children; 1. She has rendered at least six (6) months
(7) Parent left solo or alone with the responsibility continuous aggregate employment service for the
of parenthood due to abandonment of spouse for last twelve (12) months prior to surgery;
at least one (1) year; 2. In the event that an extended leave is
(8) Unmarried mother/father who has preferred to necessary, the female employee may use her
keep and rear her/his child/children instead of earned leave credits; and
having others care for them or give them up to a 3. This special leave shall be non-cumulative and
welfare institution; non-convertible to cash.
(9) Any other person who solely provides parental
care and support to a child or children; “Gynecological disorders” refer to disorders that
(10) Any family member who assumes the would require surgical procedures such as, but
responsibility of head of family as a result of not limited to, dilatation and curettage and those

25
involving female reproductive organs such as the
vagina, cervix, uterus, fallopian tubes, ovaries, D. SPECIAL GROUPS OF EMPLOYEES
breast, adnexa and pelvic floor, as certified by a
competent physician. Gynecological surgeries 1. WOMEN
shall also include hysterectomy, ovariectomy, and a. DISCRIMINATION
mastectomy.
 What are acts of discrimination under
 Is this leave similar to maternity leave? the Labor Code?
No. This leave should be distinguished from (a) Payment of a lesser compensation, including
maternity leave benefit, a separate and distinct wage, salary or other form of remuneration and
benefit, which may be availed of in case of fringe benefits, to a female employee as against a
childbirth, miscarriage, complete abortion or male employee, for work of equal value; and
emergency termination of pregnancy. (b) Favoring a male employee over a female
employee with respect to promotion, training
A woman, therefore, may avail of this special opportunities, study and scholarship grants solely
leave benefit in case she undergoes surgery on account of their sexes.
caused by gynecological disorder and at the
same time maternity benefit as these two leaves  What are acts of discrimination under
are not mutually exclusive. the Magna Carta of Women?
R.A. No. 9710, otherwise known as “The Magna
b. LEAVE FOR VICTIMS OF VIOLENCE Carta of Women,” is a comprehensive women’s
AGAINST WOMEN AND CHILDREN (R.A. No. human rights law that seeks to eliminate
9262) discrimination against women by recognizing,
protecting, fulfilling and promoting the rights of
 What is this kind of leave? Filipino women, especially those in marginalized
This special leave is granted to a woman sector.
employee who is a victim under this law. It is for a
total of ten (10) Based on the definition of the term
“Discrimination Against Women” in R.A. No. 9710,
days of paid leave of absence, in addition to other the following are considered discriminatory acts:
paid leaves under the law. It is extendible when 1. Any gender-based distinction, exclusion, or
the necessity arises as specified in the protection restriction which has the effect or purpose of
order. Its purpose is to enable the woman impairing or nullifying the recognition, enjoyment,
employee to attend to the medical and legal or exercise by women, irrespective of their marital
concerns relative to said law. This leave is not status, on a basis of equality of men and women,
convertible to cash. of human rights and fundamental freedoms in the
political, economic, social, cultural, civil or any
 What is the requirement for its other field;
entitlement? 2. Any act or omission, including by law, policy,
At any time during the application of any administrative measure, or practice, that directly
protection order, investigation, prosecution and/or or indirectly excludes or restricts women in the
trial of the criminal case, a victim of Violence recognition and promotion of their rights and their
Against Women and their Children (VAWC) who access to and enjoyment of opportunities, benefits
is employed shall be entitled to said paid leave of or privileges;
up to ten (10) days. The Punong 3. A measure or practice of general application
Barangay/kagawad or prosecutor or the Clerk of that fails to provide for mechanisms to offset or
Court, as the case may be, shall issue a address sex or gender-based disadvantages or
certification at no cost to the woman that such an limitations of women, as a result of which women
action is pending, and this is all that is required for are denied or restricted in the recognition and
the employer to comply with the 10-day paid protection of their rights and in their access to and
leave. enjoyment of opportunities, benefits, or privileges;
or women, more than men, are shown to have
suffered the greater adverse effects of those
measures or practices; and
4. Discrimination compounded by or intersecting
with other grounds, status, or condition, such as
ethnicity, age, poverty or religion.

26
Additionally, women are guaranteed their right to prohibition against marriage embodied in the
decent work. The State shall progressively realize following stipulation in the employment contract
and ensure decent work standards for women that was held as valid:
involve the creation of jobs of acceptable quality “10. You agree to disclose to management any
in conditions of freedom, equity, security and existing or future relationship you may have,
human dignity. either by consanguinity or affinity with co-
employees or employees of competing drug
Additionally, women are guaranteed their companies. Should it pose a possible conflict of
right to decent work. The State shall progressively interest in management discretion, you agree to
realize and ensure decent work standards for resign voluntarily from the Company as a matter
women that involve the creation of jobs of of Company policy.”
acceptable quality in conditions of freedom,
equity, security and human dignity. based on this stipulation in the
employment contract is a valid exercise of
b. STIPULATION AGAINST MARRIAGE management prerogative. The prohibition against
personal or marital relationships with employees
 Is the prohibition against marriage of competitor companies upon its employees was
valid? held reasonable under the circumstances
Article 136 of the Labor Code considers as an because relationships of that nature might
unlawful act of the employer to require as a compromise the interests of the company. In
condition for or continuation of employment that a laying down the assailed company policy, the
woman employee shall not get married or to employer only aims to protect its interests against
stipulate expressly or tacitly that upon getting the possibility that a competitor company will gain
married, a woman employee shall be deemed access to its secrets and procedures. Simply put,
resigned or separated. It is likewise an unlawful the reason behind the validity of such a policy is
act of the employer, to actually dismiss, the avoidance of CONFLICT OF INTEREST.
discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her c. PROHIBITED ACTS
marriage.
 What are the prohibited acts against
 What are the relevant jurisprudence on women under the Labor Code?
prohibition against marriage? Article 137 of the Labor Code and its
1. Philippine Telegraph and Telephone Company implementing rule consider unlawful the followings
(PT&T) v. NLRC.1 - It was declared here that the acts of the employer:
company policy of not accepting or considering as 1. To discharge any woman employed by him for
disqualified from work any woman worker who the purpose of preventing such woman from
contracts marriage runs afoul of the test of, and enjoying maternity leave, facilities and other
the right against, discrimination afforded all benefits provided under the Labor Code;
women workers by our labor laws and by no less 2. To discharge such woman on account of her
than the Constitution. pregnancy, or while on leave or in confinement
2. Star Paper Corp. v. Simbol.2 - The following due to her
policies were struck down as invalid for violating pregnancy;
the standard of reasonableness which is being 3. To discharge or refuse the admission of such
followed in our jurisdiction, otherwise called the woman upon returning to her work for fear that
“Reasonable Business Necessity Rule”: she may again be pregnant;
“1. New applicants will not be allowed to be hired 4. To discharge any woman or any other
if in case he/she has [a] relative, up to [the] 3rd employee for having filed a complaint or having
degree of relationship, already employed by the testified or being about to testify under the Labor
company. Code; or
“2. In case of two of our employees (both singles 5. To require as a condition for or continuation of
[sic], one male and another female) developed a employment that a woman employee shall not get
friendly relationship during the course of their married or to stipulate expressly or tacitly that
employment and then decided to get married, one upon getting married, a woman employee shall be
of them should resign to preserve the policy deemed resigned or separated, or to actually
stated above.” dismiss, discharge, discriminate or otherwise
3. Duncan Association of Detailman-PTGWO v. prejudice a woman employee merely by reason of
Glaxo Welcome Philippines, Inc.3 In this case, the marriage.

27
 3. The above acts would result in an intimidating,
d. SEXUAL HARASSMENT (ANTI-SEXUAL hostile, or offensive environment for the
HARASSMENT ACT) (R.A. No. 7877) employee.

 What are the 3 situations contemplated  What are the duties of the employer in
under this law? regard to sexual harassment
R.A. No. 7877 declares sexual harassment complaints?
unlawful only in three (3) situations, namely: It is the duty of the employer to prevent or deter
(1) employment; the commission of acts of sexual harassment and
(2) education; and to provide the procedures for the resolution or
(3) training environment. prosecution of acts of sexual harassment.

 Can sexual harassment be committed The employer or head of office is required to:
also against a man? 1. Promulgate appropriate rules and regulations,
Yes. Sexual harassment is not the sole domain of in consultation with and jointly approved by the
women as men may also be subjected to the employees or students or trainees, through their
same despicable act. Said law does not limit the duly designated representatives, prescribing the
victim of sexual harassment to women. procedure for the investigation of sexual
harassment cases and the administrative
 Who are the persons who may be held sanctions therefor. The said rules and regulations
liable for sexual harassment? issued shall include, among others, guidelines on
Work, education or training-related sexual proper decorum in the workplace and educational
harassment is committed by any employer, or training institutions.
employee, manager, supervisor, agent of the 2. Create a committee on decorum and
employer, teacher, instructor, professor, coach, investigation of cases on sexual harassment. The
trainor, or any other person who, having authority, committee shall conduct meetings, as the case
influence or moral ascendancy over another in a may be, with officers and employees, teachers,
work or training or education environment, instructors, professors, coaches, trainors and
demands, requests or otherwise requires any students or trainees to increase understanding
sexual favor from another, regardless of whether and prevent incidents of sexual harassment. It
the demand, request or requirement for shall also conduct the investigation of alleged
submission is accepted by the object of said act. cases constituting sexual harassment.

Further, any person who directs or 2. MINORS

induces another to commit any act of sexual (R.A. 7610, as amended by R.A. 9231)
harassment as defined in the law, or who
cooperates in the commission thereof by another  Who is a “child” or “working child”?
without which it would not have been committed, For legal purposes, the term “child” refers to any
shall also be held liable under the law. person less than eighteen (18) years of age.

 How is sexual harassment committed A “working child” refers to any child engaged as
in a work-related or employment follows:
environment? i. when the child is below eighteen (18) years of
In a work-related or employment environment, age, in work or economic activity that is not “child
sexual harassment is committed when: labor;” and
1. The sexual favor is made a condition in the ii. when the child below fifteen (15) years of age:
hiring or in the employment, re-employment or (a) in work where he/she is directly under the
continued employment of said individual or in responsibility of his/her parents or legal guardian
granting said individual favorable compensation, and where only members of the child’s family are
terms, conditions, promotions, or privileges; or the employed; or
refusal to grant the sexual favor results in limiting, (b) in “public entertainment or information” which
segregating or classifying the employee which in refers to artistic, literary, and cultural
any way would discriminate, deprive or diminish performances for television show, radio program,
employment opportunities or otherwise adversely cinema or film, theater, commercial
affect said employee; advertisement, public relations activities or
2. The above acts would impair the employee’s campaigns, print materials, internet, and other
rights or privileges under existing labor laws; or media.

28
 work in one household on an occupational basis.

 What are the working hours of a child?  Who are EXCLUDED from its
The term “hours of work” includes (1) all time coverage?
during which a child is required to be at a The following are not covered:
prescribed workplace, and (2) all time during (a) Service providers;
which a child is suffered or permitted to work. (b) Family drivers;
Rest periods of short duration during working (c) Children under foster family arrangement; and
hours shall be counted as hours worked. (d) Any other person who performs work
The following hours of work shall be observed for occasionally or sporadically and not on an
any child allowed to work under R.A. No. 9231 occupational basis.
and its Implementing Rules:
(a) For a child below 15 years of age, the hours of  Who is a domestic worker or
work shall not be more than twenty (20) hours per kasambahay?
week, provided that the work shall not be more “Domestic worker” or “kasambahay” refers to any
than four (4) hours at any given day; person engaged in domestic work within an
(b) For a child 15 years of age but below 18, the employment relationship, whether on a live-in or
hours of work shall not be more than eight (8) live-out arrangement, such as, but not limited to,
hours a day, and in no case beyond forty (40) general househelp, "yaya", cook, gardener, or
hours a week; and laundry person, but shall exclude service
(c) No child below 15 years of age shall be providers, family drivers, children who are under
allowed to work between eight (8) o’clock in the foster family arrangement, or any person who
evening and six (6) o’clock in the morning of the performs domestic work only occasionally or
following day and no child 15 years of age but sporadically and not on an occupational basis.
below 18 shall be allowed to work between ten This term shall not include children who are under
(10) o’clock in the evening and six (6) o’clock in foster family arrangement which refers to children
the morning of the following day. who are living with a family or household of
relative/s and are provided access to education
 What is the prohibition of employing and given an allowance incidental to education,
minors in certain undertakings and I.e., "baon", transportation, school projects, and
advertisements? school activities.
No child below 18 years of age is allowed to be
employed as a model in any advertisement Because of these new terminologies prescribed in
directly or indirectly promoting alcoholic the law, the use of the term “househelper” may no
beverages, intoxicating drinks, tobacco and its by- longer be legally correct.
products, gambling or any form of violence or
pornography.  Is the employment contract required to
be in writing?
3. KASAMBAHAY Yes. The employment contract must be in writing
(R.A. No. 10361, otherwise known as and should contain the conditions set by law.
“Domestic Workers Act” or “Batas
Kasambahay” )  What are the rights and privileges of a
kasambahay?
 What is the coverage of the The rights and privileges of the Kasambahay are
Kasambahay Law? as follows:
R.A. No. 10361 applies to all domestic workers (a) Minimum wage;
employed and working within the country. It shall (b) Other mandatory benefits, such as the daily
cover all parties to an employment contract for the and weekly rest periods, service incentive leave,
services of the following Kasambahay, whether on and 13th month pay;
a live-in or live-out arrangement, such as, but not (c) Freedom from employers' interference in the
limited to: disposal of wages;
(a) General househelp; (d) Coverage under the SSS, PhilHealth and Pag-
(b) Yaya; IBIG laws;
(c) Cook; (e) Standard of treatment;
(d) Gardener; (f) Board, lodging and medical attendance;
(e) Laundry person; or (g) Right to privacy;
(f) Any person who regularly performs domestic (h) Access to outside communication;

29
(i) Access to education and training; 3. Mode of payment. - It should be paid in cash
(j) Right to form, join, or assist labor organization; and not by means of promissory notes, vouchers,
(k) Right to be provided a copy of the employment coupons, tokens, tickets, chits, or any object other
contract; than the cash wage as provided for under this Act.
(I) Right to certificate of employment; 4. Pay slip. – The employer shall at all times
(m) Right to terminate the employment; and provide the Kasambahay with a copy of the pay
(n) Right to exercise their own religious beliefs slip containing the amount paid in cash every pay
and cultural practices. The foregoing rights and day, and indicating all deductions made, if any.
privileges are discussed below. The copies of the pay slip shall be kept by the
employer for a period of three (3) years.
 What is the minimum wage of 5. Prohibition on interference in the disposal of
kasambahay? wages. – It shall be unlawful for the employer to
The minimum wage1 of the kasambahay as of interfere with the freedom of the Kasambahay in
December 2017 shall not be less than the the disposition of his/her wages, such as:
following: (a) Forcing, compelling, or obliging the
(a) ₱3,500 a month for those employed in the Kasambahay to purchase merchandise,
NCR; commodities or other properties from the
(b) ₱2,500 to ₱4,000 a month for those employed employer or from any other person; or
in chartered cities and first class municipalities; (b) Making use of any store or services of
and such employer or any other person.
(c) ₱1,800 to ₱3,000 a month for those employed 6. Prohibition against withholding of wages. – It
in other municipalities. shall be unlawful for an employer, directly or
indirectly, to withhold the wages of the
 Are the minimum wages subject to Kasambahay. If the Kasambahay leaves without
review by the RTWPBs or Regional any justifiable reason, any unpaid salary for a
Boards? period not exceeding fifteen (15) days shall be
Yes. After one (1) year from the effectivity of the forfeited. Likewise, the employer shall not induce
Kasambahay Law, and periodically thereafter, the the Kasambahay to give up any part of the wages
Regional Tripartite and Productivity Wage Boards by force, stealth, intimidation, threat or by any
(RTPWBs) shall review, and if proper, determine other means whatsoever.
and adjust the minimum wage rates of domestic
workers.”  What are important terms and
conditions of employment of
 What are some important principles on kasambahay?
wage of kasambahay? The following is a rundown of the basic terms and
A. Frequency of payment of wages. - The wages conditions that should be observed in the
of the Kasambahay shall be paid at least once employment of a Kasambahay:
a month. This is so because the minimum a. Employable age. - Children whose age is
wage rates are on a monthly basis. below 15 years are absolutely prohibited to work
B. The equivalent minimum daily wage rate of as Kasambahay.
the Kasambahay shall be determined by b. Normal daily hours of work. – Because R.A.
dividing the applicable minimum monthly rate No. 10361 does not contain any provision on the
by thirty (30) days. number of normal hours of work that a
C. The amount of the minimum wage depends Kasambahay should render in a day but merely
on the geographical area where the prescribes said daily rest period of eight (8) hours
Kasambahay works. per day, it may be concluded that the
D. Payment of wages: Kasambahay should work for at least a total of
sixteen (16) hours per day as normal hours of
1. To whom paid. - It should be made on time work. However, it must be noted that the Labor
directly to the Kasambahay to whom they are due Code does not contain any provision on the
in cash at least once a month. normal hours of work of househelpers. Article
2. Deductions, prohibition; when allowed. - The 1695 of the Civil Code, however, specifically
employer, unless allowed by the Kasambahay provides that househelpers shall not be required
through a written consent, shall make no to work for more than ten (10) hours a day. Since
deductions from the wages other than that which R.A. No. 10361, a special law, is the most recent
is mandated by law such as for SSS, PhilHealth piece of legislation, it should prevail over the
or Pag-IBIG contributions. general provision of the Civil Code.

30
c. Normal daily hours of work for working 9262), Special Protection of Children Against
child- kasambahay is eight (8) hours per day. Child Abuse, Exploitation and Discrimination Act
d. 13th month pay. - The Kasambahay who has (R.A. No. 7610) as amended by R.A. No. 9231,
rendered at least one (1) month of service is Anti-Trafficking in Persons Act of 2003 (R.A. No.
entitled to a 13th month pay which shall not be 9208), and other applicable laws.
less than one-twelfth (1/12) of his/her total basic l. Board, lodging and medical attendance. -
salary earned in a calendar year. The 13th month The employer shall provide for the basic
pay shall be paid not later than December 24 of necessities of the Kasambahay, to include the
every year or upon separation from employment. following:
e. Daily rest period. – The Kasambahay shall be (1) At least three (3) adequate meals a
entitled to an aggregate daily rest period of eight day, taking into consideration the
(8) hours. Kasambahay's religious beliefs and
f. Weekly rest period. - The Kasambahay shall cultural practices;
be entitled to at least twenty-four (24) consecutive (2) Humane sleeping condition that
hours of rest in a week. The employer and the respects the person's privacy for live-in
Kasambahay shall agree in writing on the arrangement; and
schedule of the weekly rest day but the (3) Appropriate rest and medical
preference of the Kasambahay, when based on assistance in the form of first-aid
religious grounds, shall be respected. medicines, in case of illnesses and
g. Service incentive leave. - A Kasambahay who injuries sustained during service without
has rendered at least one (1) year of service shall loss of benefits.
be entitled to an annual service incentive leave of m. Opportunities for education and training. -
at least five (5) days with pay. Any unused portion The Kasambahay shall be afforded the
of said annual leave shall not be cumulative or opportunity to finish basic education, which shall
carried over to the succeeding years. Unused consist of elementary and secondary education.
leaves shall not be convertible to cash. He/she may be allowed access to alternative
h. Social security benefits. - A Kasambahay learning systems and, as far as practicable,
who has rendered at least one (1) month of higher education or technical vocational education
service shall be covered by the Social Security and training.
System (SSS), Employees Compensation n. Membership in labor organization. - The
Commission (ECC), Philippine Health Insurance Kasambahay shall have the right to join a labor
Corporation (PhilHealth), and Home Development organization of his/her own choosing for purposes
Mutual Fund or Pag-IBIG, and shall be entitled to of mutual aid and collective negotiation.
all the benefits in accordance with their respective r. Health and safety. - The employer shall
policies, laws, rules and regulations. safeguard the safety and health of the
i. Obligation of employer to register and enroll Kasambahay in accordance with the standards
with SSS, PhilHealth, and Pag-IBIG. - As which the DOLE shall develop through the Bureau
employer of the Kasambahay, he/she shall of Working Conditions (BWC) and the
register himself/herself with, and enroll the latter Occupational Safety and Health Center (OSHC)
as his/her employee to the SSS, PhilHealth, and within six (6) months from the promulgation of this
Pag-IBIG. IRR. The said standards shall take into account
j. Deposits for loss or damage. - It shall be the peculiar nature of domestic work.
unlawful for the employer or any other person to s. Prohibition on debt bondage. - It shall be
require a Kasambahay to make deposits from unlawful for the employer or any person acting on
which deductions shall be made for the his/her behalf to place the Kasambahay under
reimbursement of loss or damage to tools, debt bondage. “Debt bondage” refers to the
materials, furniture and equipment in the rendering of service by the Kasambahay as
household. security or payment for a debt where the length
k. Standard of treatment. - The Kasambahay and nature of service is not clearly defined or
shall be treated with respect by the employer or when the value of the service is not reasonably
any member of the household. He/she shall not applied in the payment of the debt.
be subjected to any kind of abuse, including t. Assignment to non-household work. - The
repeated verbal or psychological, nor be inflicted employer shall not assign the Kasambahay to
with any form of physical violence or harassment work, whether in full or part-time, in a commercial,
or any act tending to degrade his/her dignity, as industrial or agricultural enterprise at a wage rate
defined under the Revised Penal Code, Violence lower than that provided for agricultural or non-
Against Women and their Children Law (R.A. No. agricultural workers.

31
 before the expiration of the contract for any of the
If so assigned, the Kasambahay will no longer be following causes:
treated as such but as a regular employee of the (1) Misconduct or willful disobedience by
establishment. the Kasambahay of the lawful order of the
employer in connection with the former's
 What are the rules on termination of work;
Kasambahay? (2) Gross or habitual neglect or
a. Pre-termination of employment. – The inefficiency by the Kasambahay in the
following rules shall be observed: performance of duties;
(1) In case the duration of employment is (3) Fraud or willful breach of the trust
specified in the contract, the Kasambahay reposed by the employer on the
and the employer may mutually agree Kasambahay;
upon notice to terminate the contract of (4) Commission of a crime or offense by
employment before the expiration of its the Kasambahay against the person of the
term. employer or any immediate member of the
(2) In case the duration is not determined employer's family;
by stipulation or by nature of service, the (5) Violation by the Kasambahay of the
employer or the Kasambahay may give terms and conditions of the employment
notice to end the employment relationship contract and other standards set forth
five (5) days before the intended under the law;
termination of employment. (6) Any disease prejudicial to the health of
the Kasambahay, the employer, or
b. Termination of employment initiated by the members of the household; and
Kasambahay. - The Kasambahay may terminate (7) Other causes analogous to the
the employment relationship at any time before foregoing.
the expiration of the contract for any of the
following causes: If the employer dismissed the
(1) Verbal or emotional abuse of the Kasambahay for reasons other than the above,
Kasambahay by the employer or any he/she shall pay the Kasambahay the earned
member of the household; compensation plus indemnity in the amount
(2) Inhuman treatment including physical equivalent to fifteen (15) days’ work.
abuse of the Kasambahay by the
employer or any member of the d. Invalid ground for termination. - Pregnancy
household; and marriage of the Kasambahay are not valid
(3) Commission of a crime or offense grounds for termination of employment.
against the Kasambahay by the employer
or any member of the household; e. Employment Certification. - Upon the
(4) Violation by the employer of the terms termination of employment, the employer shall
and conditions of the employment contract issue the Kasambahay, within five (5) days from
and other standards set forth in the law; request, a certificate of employment indicating the
(5) Any disease prejudicial to the health of nature, duration of the service and work
the Kasambahay, the employer, or description.
members of the household; and
(6) Other causes analogous to the 4. HOMEWORKERS
foregoing.
 What are important terms that should
If the Kasambahay leaves without cause, be noted in employment of
any unpaid salary due, not exceeding the homeworkers?
equivalent of 15 days’ work, shall be forfeited. In a. “Industrial homeworker” – It refers to a
addition, the employer may recover from the worker who is engaged in industrial homework.
Kasambahay deployment expenses, if any, if the b. “Industrial homework” – It refers to a system
services have been terminated within six (6) of production under which work for an employer or
months from employment. contractor is carried out by a homeworker at
his/her home. Materials may or may not be
c. Termination of employment initiated by the furnished by the employer or contractor. It differs
employer. - An employer may terminate the from regular factory production principally in that,
employment of the Kasambahay at any time it is a decentralized form of production where

32
there is ordinarily very little supervision or after the goods or articles have been collected
regulation of methods of work. from the workers.
c. “Home” - It means any nook, house, apartment  What are prohibited homeworks?
or other premises used regularly, in whole or in No homework shall be performed on the following:
part, as a dwelling place, except those situated 1. Explosives, fireworks and articles of like
within the premises or compound of an employer, character;
contractor/subcontractor and the work performed 2. Drugs and poisons; and
therein is under the active or personal supervision 3. Other articles, the processing of which requires
by or for the latter. exposure to toxic substances.
d. “Field personnel” – It refers to a non-
agricultural employee who regularly performs his
duties away from the principal place of business 5. NIGHT WORKERS (R.A. No. 10151)
or branch office of the employer and whose actual R.A. No. 10151 [June 21, 2011]
hours of work in the field cannot be determined
with reasonable certainty.  What is the new law on night work?
e. “Employer.” – It refers to any natural or a. Significance of the law.
artificial person who, for his own account or R.A. No. 10151 has repealed Article 130
benefit, or on behalf of any person residing [Nightwork Prohibition] and Article 131
outside the Philippines, directly or indirectly, or [Exceptions] of the Labor Code and accordingly
through any employee, agent, contractor, renumbered the same articles. Additionally, it has
subcontractor or any other person: inserted a new Chapter V of Title III of Book III of
1. delivers or causes to be delivered any goods, the Labor Code entitled “Employment of Night
articles or materials to be processed or fabricated Workers” which addresses the issue on nightwork
in or about a home and thereafter to be returned of all employees, including women workers.
or to be disposed of or distributed in accordance Chapter V covers newly renumbered Articles 154
with his direction; or up to 161 of the Labor Code.
2. sells any goods, articles or materials for the
purpose of having such goods or articles b. Coverage of the law.
processed in or about a home and then The law on nightwork applies not only to
repurchases them himself or through another after women but to all persons, who shall be employed
such processing. or permitted or suffered to work at night, except
those employed in agriculture, stock raising,
f. “Contractor” or “subcontractor” - It refers to fishing, maritime transport and inland navigation,
any person who, for the account or benefit of an during a period of not less than seven (7)
employer, delivers or causes to be delivered to a consecutive hours, including the interval from
homeworker, goods or articles to be processed in midnight to five o'clock in the morning, to be
or about his home and thereafter to be returned, determined by the DOLE Secretary, after
disposed of or distributed in accordance with the consulting the workers’ representatives/labor
direction of the employer. organizations and employers.
g. “Processing” - It refers to manufacturing,
fabricating, finishing, repairing, altering, packing, c. Night worker, meaning.
wrapping or handling in any way connected with "Night worker" means any employed
the production or preparation of an article or person whose work covers the period from 10
material. o'clock in the evening to 6 o'clock the following
morning provided that the worker performs no
 How is homework paid? less than seven (7) consecutive hours of work.
Immediately upon receipt of the finished goods or
articles, the employer is required to pay the d. Mandatory facilities.
homeworker or the contractor or subcontractor, as (1) Suitable first-aid and emergency facilities as
the case may be, for the work performed less the provided for under Rule 1960 (Occupational
corresponding homeworker’s share of SSS, Health Services) of the Occupational Safety and
PhilHealth and ECC premium contributions which Health Standards (OSHS);
should be remitted by the contractor or (2) Lactation station in required companies
subcontractor or employer to the SSS with the pursuant to R.A. No. 10028 (The Expanded
employer’s share. However, where payment is Breastfeeding Promotion Act of 2009);
made to a contractor or subcontractor, the (3) Separate toilet facilities for men and women;
homeworker should likewise be paid immediately (4) Facility for eating with potable drinking water;

33
and An “apprenticeship agreement” is an employment
(5) Facilities for transportation and/or properly contract wherein the employer binds himself to
ventilated temporary sleeping or resting quarters, train the apprentice and the apprentice in turn
separate for male and female workers, shall be accepts the terms of the training and agrees to
provided except where any of the following work for the employer for a recognized
circumstances is present: apprenticeable occupation, emphasizing the
i. Where there is an existing company rights, duties and responsibilities of each party.
guideline, practice or policy, CBA or any
similar agreement between management  What are important learnership-related
and workers providing for an equivalent or terms?
superior benefit; or “Learnership” refers to any practical training on
ii. Where the start or end of the night work learnable occupation which may or may not be
does not fall within 12 midnight to 5 supplemented by related theoretical instructions.
o'clock in the morning; or
iii. Where the workplace is located in an “Learner” refers to a person hired as a trainee in
area that is accessible 24 hours to public semi-skilled and other industrial occupations
transportation; which are non- apprenticeable and which may be
iv. Where the number of employees does learned through practical training on the job for a
not exceed a specified number as may be period not exceeding three (3) months, whether or
provided for by the DOLE Secretary in not such practical training is supplemented by
subsequent issuances. theoretical instructions.

e. Maternity leave benefits under existing laws “Learnership agreement” refers to the
cannot be diminished. employment and training contract entered into
between the employer and the learner.
6. APPRENTICES AND LEARNERS
 What are the distinctions between
 What are important apprenticeship- learnership and apprenticeship?
related terms?
“Apprenticeship” means practical training on the The following are the distinctions:
job supplemented by related theoretical
instructions involving apprenticeable occupations
and trades as may be approved by the DOLE
Secretary. It is a training within employment with
compulsory related theoretical instructions
involving a contract between an apprentice and
an employer or an enterprise on an approved
apprenticeable occupation.

An “apprentice” is a worker who is covered by a

written apprenticeship agreement with an
individual employer or any of the entities
recognized under the law. He is a person
undergoing training for an approved
apprenticeable occupation during an established
period and covered by an apprenticeship
agreement.

An “apprenticeable occupation” means any trade,

form of employment or occupation approved for
apprenticeship by the DOLE Secretary, which
requires for proficiency, more than three (3)
months of practical training on the job
supplemented by related theoretical instructions.
It is an occupation officially endorsed by a
tripartite body and approved for apprenticeship by
TESDA.

34
  How is the conflict in the age aberration of psychological, physiological, or
requirement for apprentices resolved? anatomical structure or function.
The age prescribed for apprentices under Article 3. “Disability” means (1) a physical or mental
59 is 14 years of age. impairment that substantially limits one or more
psychological, physiological or anatomical
However, the Implementing Rules set the functions of an individual or activities of such
age requirement at fifteen (15) years of age. individual; (2) a record of such an impairment; or
(3) being regarded as having such an impairment.
Notably, there is a difference in the age 4. “Handicap” refers to a disadvantage for a given
requirement between the 14-year old prescribed individual, resulting from an impairment or a
in the law and the 15- year old enunciated in the disability that limits or prevents the function or
Implementing Rules. Generally, the well-settled activity that is considered normal given the age
rule of legal hermeneutics dictates that if there is and sex of the individual.
a conflict between the law and its implementing 5. “Marginalized Persons with Disability” refer to
rule or regulation, the provision of the former persons with disability who lack access to
should prevail over the latter. The implementing rehabilitative services and opportunities to be able
rule cannot certainly operate to amend the law. to participate fully in socio-economic activities and
Consequently, the minimum age requirement who have no means of livelihood and whose
should have been fourteen (14) years of age incomes fall below the poverty threshold.
except for the fact that the age requirement in the
said Implementing Rules is based on and more  What is meant by EQUAL
congruent with latest legislation, more particularly, OPPORTUNITY FOR EMPLOYMENT?
the 2003 law, R.A. No. 9231,1 where it is provided Under the law, PWDs are entitled to equal
that: opportunity for employment. Consequently, no
(1) All persons under eighteen (18) years of age PWD shall be denied access to opportunities for
shall be considered as a “child”; and suitable employment. A qualified employee with
(2) Children below fifteen (15) years of age shall disability shall be subject to the same terms and
not be employed except if he/she falls under any conditions of employment and the same
of the exceptions mentioned and enumerated in compensation, privileges, benefits, fringe benefits,
the law. incentives or allowances as a qualified able-
bodied person.
Apprenticeship is not one of the
exceptions, therefore, this prohibition on Five percent (5%) of all casual emergency
employing an apprentice below the age of fifteen and contractual positions in the Departments of
(15) years applies to apprentices. Consequently, Social Welfare and Development, Health,
the proper age qualification is fifteen (15) years Education and other government agencies, offices
but not because of the Implementing Rules’ or corporations engaged in social development
provision as mentioned above but by reason of shall be reserved for PWDs.
R.A. No. 9231.
 Are PWDs eligible for apprenticeship
and learnership?
7. PERSONS WITH DISABILITIES Yes. Under R.A. No. 7277, it is provided that
 What is the applicable law to PWDs? subject to the provisions of the Labor Code, as
R.A. No. 7277,4 otherwise known as the “Magna amended, PWDs shall be eligible as apprentices
Carta for Disabled Persons.” The provisions on or learners; provided that their handicap is not as
handicapped workers found in the Labor Code much as to effectively impede the performance of
(Articles 78 to 81) are no longer applicable. job operations in the particular occupation for
which they are hired and provided further that
 What are important definitions related after the lapse of the period of apprenticeship, if
to PWDs? found satisfactory in the job performance, they
1. “Persons with Disability” or “PWD” are those shall be eligible for employment.
suffering from restriction or different abilities, as a
result of a mental, physical or sensory  What is the applicable wage rate to
impairment, to perform an activity in the manner PWDs?
or within the range considered normal for a Under R.A. No. 7277, the wage rate of PWDs is
human being. 100% of the applicable minimum wage.
2. “Impairment” refers to any loss, diminution or

35
a. DISCRIMINATION (i) Excluding PWD from membership in labor
unions or similar organizations.
 What are the forms of prohibited
discriminatory acts against PWDs in b. INCENTIVES FOR EMPLOYERS
terms of employment?
No entity, whether public or private, shall  What are the incentives for employers
discriminate against a qualified PWD by reason of who employ PWDs?
disability in regard to job application procedures, To encourage the active participation of the
the hiring, promotion, or discharge of employees, private sector in promoting the welfare of PWDs
employee compensation, job training, and other and to ensure gainful employment for qualified
terms, conditions and privileges of employment. persons with disability, adequate incentives shall
The following constitute acts of discrimination: be provided to private entities which employ
(a) Limiting, segregating or classifying a job PWDs.
applicant with disability in such a manner that
adversely affects his work opportunities; Private entities that employ PWDs who
(b) Using qualification standards, employment meet the required skills or qualifications, either as
tests or other selection criteria that screen out or a regular employee, apprentice or learner, shall
tend to screen out a PWD unless such standards, be entitled to an additional deduction from their
tests or other selection criteria are shown to be gross income equivalent to twenty-five percent
job-related for the position in question and are (25%) of the total amount paid as salaries and
consistent with business necessity; wages to persons with disability; provided,
(c) Utilizing standards, criteria, or methods of however, that such entities could present proof as
administration that: certified by the Department of Labor and
(1) have the effect of discrimination on the Employment (DOLE) that PWDs are under their
basis of disability; or employ and provided further that the employee
(2) perpetuate the discrimination of others with disability is accredited with the DOLE and the
who are subject to common administrative Department of Health as to his disability, skills
control. and qualifications.
(d) Providing less compensation, such as salary, Private entities that improve or modify their
wage or other forms of remuneration and fringe physical facilities in order to provide reasonable
benefits, to a qualified employee with disability, by accommodation for PWDs shall also be entitled to
reason of his disability, than the amount to which an additional deduction from their net taxable
a non-disabled person performing the same work income equivalent to fifty percent (50%) of the
is entitled; direct costs of the improvements or modifications.
(e) Favoring a non-disabled employee over a
qualified employee with disability with respect to ------------oOo------------
promotion, training opportunities, and study and
scholarship grants solely on account of the latter’s SYLLABUS MAJOR TOPIC 4
disability; SOCIAL WELFARE LEGISLATION
(f) Re-assigning or transferring an employee with
a disability to a job or position he cannot perform A. SSS LAW
by reason of his disability; (R.A. No. 8282)
(g) Dismissing or terminating the services of an
employee with disability by reason of his disability R.A. 8282, REPEALED BY R.A. 11199.
unless the employer can prove that he impairs the The 2019 Labor Law Syllabus still
satisfactory performance of the work involved to prescribed R.A. No. 8282 as the reference for the
the prejudice of the business entity; provided, discussion of the SSS Law. However, on
however, that the employer first sought to provide February 07, 2019, President Duterte approved
reasonable accommodations for persons with R.A. No. 11199,1 otherwise known as the “Social
disability; Security Act of 2018,” which expressly repealed2
(h) Failing to select or administer in the most R.A. No. 8282.
effective manner employment tests which This topic therefore will be discussed in
accurately reflect the skills, aptitude or other accordance with R.A. No. 8282 since the RA No
factor of the applicant or employee with disability 11199 was passed way beyond the cut-off date of
that such tests purports to measure, rather than June 30, 2019 by the Supreme Court Bar
the impaired sensory, manual or speaking skills of Examinations Committee.
such applicant or employee, if any; and

36
  Who are covered employers? A self-employed person shall be both employee
a. An employer or any person who uses the and employer at the same time.
services of another person in business, trade,
industry or any undertaking.  Who may be covered voluntarily?
b. A social, civic, professional, charitable and 1. Separated Members
other non-profit organizations which hire the A member who is separated from employment or
services of employees are considered ceased to be self-employed/OFW/non-working
“employers.” spouse and would like to continue contributing.
c. A foreign government, international
organization or its wholly-owned instrumentality 2. Overseas Filipino Workers (OFWs)
such as an embassy in the Philippines, may enter A Filipino recruited in the Philippines by a foreign-
into an administrative agreement with the SSS for based employer for employment abroad or one
the coverage of its Filipino employees. who legitimately entered a foreign country (i.e.,
tourist, student) and is eventually employed.
 Who are compulsorily covered
employees? 3. Non-working spouses of SSS members
a. A private employee, whether permanent, A person legally married to a currently employed
temporary or provisional, who is not over 60 years and actively paying SSS member who devotes full
old. time in the management of household and family
b. A domestic worker or kasambahay who has affairs may be covered on a voluntary basis,
rendered at least one (1) month of service. provided there is the approval of the working
c. A Filipino seafarer upon the signing of the spouse. The person should never have been a
standard contract of employment between the member of the SSS. The contributions will be
seafarer and the manning agency which, together based on 50 percent (50%) of the working
with the foreign ship owner, act as employers. spouse’s last posted monthly salary credit but in
d. An employee of a foreign government, no case shall it be lower than P1,000.
international organization or their wholly-owned
instrumentality based in the Philippines, which  What is the effective date of coverage?
entered into an administrative agreement with the For compulsory coverage:
SSS for the coverage of its Filipino workers. 1. For employer - Compulsory coverage of the
e. The parent, spouse or child below 21 years old employer shall take effect on the first day of his
of the owner of a single proprietorship business. operation or on the first day he hires employee/s.
The employer is given only 30 days from the date
 Are self-employed persons covered? of employment of employee to report the person
Yes. A self-employed person, regardless of trade, for coverage to the SSS.
business or occupation, with an income of at least 2. For employee - Compulsory coverage of the
P1,000 a month and not over 60 years old, should employee shall take effect on the first day of his
register with the SSS. Included, but not limited to, employment.
are the following self- employed persons: 3. For self-employed - The compulsory coverage
a. Self-employed professionals; of the self-employed person shall take effect upon
b. Business partners, single proprietors and board his registration with the SSS or upon payment of
directors; the first valid contribution, in case of initial
c. Actors, actresses, directors, scriptwriters and coverage.
news reporters who are not under an employer-
employee relationship; For voluntary coverage:
d. Professional athletes, coaches, trainers and 1. For an OFW – upon first payment of
jockeys; contribution, in case of initial coverage.
e. Farmers and fisherfolks; and 2. For a non-working spouse – upon first payment
f. Workers in the informal sector such as cigarette of contribution.
vendors, watch-your-car boys, hospitality girls, 3. For a separated member – on the month
among others. he/she resumed payment of contribution.

Unless otherwise specified, all provisions of the  Who are excluded employers?
law, R.A. No. 8282, applicable to covered Government and any of its political subdivisions,
employees shall also be applicable to the covered branches or instrumentalities, including
self-employed persons. corporations owned or controlled by the
Government with original charters.

37
 21 years of age.
 Who are excluded employees?
Workers whose employment or service falls under The dependent illegitimate children shall be
any of the following circumstances are not entitled to 50% of the share of the legitimate,
covered: legitimated or legally adopted children. However,
(1)Employment purely casual and not for the in the absence of the dependent legitimate,
purpose of occupation or business of the legitimated children of the member, his/her
employer; dependent illegitimate children shall be entitled to
(2) Service performed on or in connection with an 100% of the benefits
alien vessel by an employee if he is employed
when such vessel is outside the Philippines;  Who are secondary beneficiaries?
(3) Service performed in the employ of the The following are secondary beneficiaries:
Philippine Government or instrumentality or 1. The dependent parents, in the absence of the
agency thereof; primary beneficiaries.
(4) Service performed in the employ of a foreign 2. Any other person designated by the member as
government or international organization, or their his/her secondary beneficiary, in the absence of
wholly- owned instrumentality: Provided, however, all the foregoing primary beneficiaries and
That this exemption notwithstanding, any foreign dependent parents.
government, international organization or their
wholly-owned instrumentality employing workers B. GSIS LAW
in the Philippines or employing Filipinos outside of (R.A. No. 8291)
the Philippines, may enter into an agreement with
the Philippine Government for the inclusion of  Who are compulsorily required to
such employees in the SSS except those already become members of the GSIS?
covered by their respective civil service retirement 1. All government personnel, whether elective or
systems: Provided, further, That the terms of such appointive, irrespective of status of appointment,
agreement shall conform with the provisions of provided they are receiving fixed monthly
R.A. No. 8282 on coverage and amount of compensation and have not reached the
payment of contributions and benefits: mandatory retirement age of 65 years, are
Provided, finally, That the provisions of this Act compulsorily covered as members of the GSIS
shall be supplementary to any such agreement; and shall be required to pay contributions.
and 2. However, employees who have reached the
(5) Such other services performed by temporary retirement age of 65 or more shall also be
and other employees which may be excluded by covered, subject to the following rules:
regulation of the Social Security Commission. An employee who is already beyond the
Employees of bona-fide independent contractors mandatory retirement age of 65 shall be
shall not be deemed employees of the employer compulsorily covered and be required to pay both
engaging the service of said contractors. the life and retirement premiums under the
following situations:
 What are the classifications of a. An elective official who at the time of
benefits? election to public office is below 65 years
The SSS benefits may be classified into two (2) of age and will be 65 years or more at the
as follows: end of his term of office, including the
(a) Social security benefits: period/s of his re-election to public office
1) Sickness thereafter without interruption.
2) Maternity b. Appointive officials who, before
3) Retirement reaching the mandatory age of 65, are
4) Disability appointed to government position by the
5) Death and funeral. President of the Republic of the
(b) Employees’ compensation benefits. Philippines and shall remain in
government service at age beyond 65.
 Who are primary beneficiaries? c. Contractual employees including
The following are primary beneficiaries: casuals and other employees with an
1. The dependent spouse until he or she employee-government agency
remarries; relationship are also compulsorily
2. The dependent legitimate, legitimated or legally covered, provided they are receiving fixed
adopted, and illegitimate children who are not yet monthly compensation and rendering the

38
 required number of working hours for the coverage of the GSIS Law?
month. The following employees are excluded from
compulsory coverage:
 What are the classes of membership in (a) Uniformed personnel of the Armed Forces of
the GSIS? the Philippines (AFP), Philippine National Police
Membership in the GSIS is classified either by (PNP), Bureau of Fire Protection (BFP) and
type or status of membership. Bureau of Jail Management and Penology
(BJMP);
 As to type of members, there are regular (b) Barangay and Sanggunian Officials who are
and special members: not receiving fixed monthly compensation;
(a) Regular Members – are those employed by (c) Contractual Employees who are not receiving
the government of the Republic of the Philippines, fixed monthly compensation; and
national or local, legislative bodies, government- (d) Employees who do not have monthly regular
owned and controlled corporations (GOCC) with hours of work and are not receiving fixed monthly
original charters, government financial institutions compensation.
(GFIs), except uniformed personnel of the Armed
Forces of the Philippines, the Philippine National  What are the kinds of benefits under
Police, Bureau of Jail Management and Penology the GSIS Law?
(BJMP) and Bureau of Fire Protection (BFP), who The following are the benefits under the GSIS
are required by law to remit regular monthly Law:
contributions to the GSIS. (a) Compulsory Life Insurance Benefits under the
(b) Special Members – are constitutional Life Endowment Policy (LEP)
commissioners, members of the judiciary, (b) Compulsory Life Insurance Benefits under the
including those with equivalent ranks, who are Enhanced Life Policy (ELP)
required by law to remit regular monthly (c) Retirement Benefits
contributions for life insurance policies to the (d) Separation Benefit
GSIS in order to answer for their life insurance (e) Unemployment Benefit
benefits defined under RA 8291. (f) Disability Benefits
(g) Survivorship Benefits
 As to status of membership, there are (h) Funeral Benefits
active and inactive members.
(a) Active member – refers to a member of the  Who are beneficiaries under the GSIS
GSIS, whether regular or special, who is still in Law?
the government service and together with the There are two (2) kinds of beneficiaries under the
government agency to which he belongs, is GSIS Law as follows:
required to pay the monthly contribution. 1. Primary beneficiaries — The legal dependent
(b) Inactive member – a member who is spouse until he/she remarries and the dependent
separated from the service either by resignation, children.
retirement, disability, dismissal from the service, 2. Secondary beneficiaries — The dependent
retrenchment or, who is deemed retired from the parents and, subject to the restrictions on
service under this Act. dependent children, the legitimate descendants.

 When does membership become  Who are dependents under the GSIS
effective? Law?
The effective date of membership shall be the Dependents shall be the following:
date of the member’s assumption to duty on his (a) the legitimate spouse dependent for support
original appointment or election to public office. upon the member or pensioner;
(b) the legitimate, legitimated, legally adopted
 What is the effect of separation from child, including the illegitimate child, who is
the service? unmarried, not gainfully employed, not over the
A member separated from the service shall age of majority, or is over the age of majority but
continue to be a member, and shall be entitled to incapacitated and incapable of self-support due to
whatever benefits he has qualified to in the event a mental or physical defect acquired prior to age
of any contingency compensable under the GSIS of majority; and
Law. (c) the parents who are dependent upon the
member for support.
 Who are excluded from the compulsory

39
Gainful Occupation — Any productive activity that The following sectors are covered under the ECP:
provided the member with income at least equal 1. All public sector employees including those of
to the minimum compensation of government government-owned and/or controlled corporations
employees. and local government units covered by the GSIS;
2. All private sector employees covered by the
SSS; and
C. DISABILITY AND DEATH BENEFITS 3. Overseas Filipino workers (OFWs), namely:
1. LABOR CODE a. Filipino seafarers compulsorily covered
under the SSS.
 What is the State Insurance Fund b. Land-based contract workers provided that
[SIF]? their employer, natural or juridical, is engaged
The State Insurance Fund (SIF) is built up by the in any trade, industry or business undertaking
contributions of employers based on the salaries in the Philippines; otherwise, they shall not be
of their employees as provided under the Labor covered by the ECP.
Code.
 When is the start of coverage of
There are two (2) separate and distinct employees under the ECP?
State Insurance Funds: one established under the The coverage under the ECP of
SSS for private sector employees; and the other, employees in the private and public sectors starts
under the GSIS for public sector employees. The on the first day of their employment.
management and investment of the Funds are
done separately and distinctly by the SSS and the  What are the benefits under the ECP?
GSIS. It is used exclusively for payment of the The following are the benefits provided
employees’ compensation benefits and no under the Labor Code:
amount thereof is authorized to be used for any a. Medical Benefits
other purpose. b. Disability Benefits
1. Temporary total disability
 What are the agencies involved in the 2. Permanent total disability
implementation of the Employees 3. Permanent partial disability
Compensation Program (ECP)? c. Death Benefit
There are three (3) agencies involved in the d. Funeral Benefit
implementation of the Employees’ Compensation
Program (ECP). These are: (1) The Employees’ 2. POEA-STANDARD EMPLOYMENT
Compensation Commission (ECC) which is CONTRACT (POEA-SEC)
mandated to initiate, rationalize and coordinate
policies of the ECP and to review appealed cases I. MONETARY CLAIMS OF SEAFARERS FOR
from (2) the Government Service Insurance SICKNESS AND DISABILITY BENEFITS
System (GSIS) and (3) the Social Security
System (SSS), the administering agencies of the 1. APPLICABLE LAW IN CASES INVOLVING
ECP. THE POEA-SEC.
By express provision of Section 31 of the
Who are covered by the ECP? 2010 POEA-SEC, “[a]ny unresolved dispute,
a. General coverage. – The following shall be claim or grievance arising out of or in connection
covered by the Employees’ Compensation therewith, including the annexes thereof, shall be
Program (ECP): governed by the laws of the Republic of the
1. All employers; Philippines, international conventions, treaties and
2. Every employee not over sixty (60) years of covenants to which the Philippines is a signatory.”
age; This provision signifies that the terms agreed
3. An employee over 60 years of age who had upon by the parties pursuant to the POEA-SEC
been paying contributions to the System are to be read and understood in accordance with
(GSIS/SSS) prior to age sixty (60) and has not Philippine laws, particularly, Articles 197 [191],1
been compulsorily retired; and 198 [192]2 and 199 [193]3 of the Labor Code and
4. Any employee who is coverable by both the the applicable implementing rules and regulations
GSIS and SSS and should be compulsorily in case of any dispute, claim or grievance.
covered by both Systems.
2. OFW’S BENEFIT CLAIMS VIS-À-VIS
b. Sectors of employees covered by the ECP. - BENEFITS IN THE LABOR CODE.

40
 It must be underscored that the claims for cannot rest entirely on bare assertions and
disability, death and burial benefits involving presumptions. In order to establish compensability
OFWs over which the Labor Arbiters of the NLRC of a non-occupational disease, reasonable proof
have jurisdiction, are not the same as the claims of work-connection is sufficient - direct causal
against the State Insurance Fund under Title II, relation is not required. It is thus this probability of
Book IV of the Labor Code for the same benefits, connection, and not the ultimate degree of
over which the Employees’ Compensation certainty, that is the test of proof of compensation
Commission (ECC) has jurisdiction. proceedings.

3. THE LABOR CODE’S CONCEPT OF PTD 5. REQUISITES FOR COMPENSABILITY OF

APPLIES TO CLAIMS OF SEAFARERS. OCCUPATIONAL DISEASE.
Permanent total disability (PTD) means In order for an occupational disease and
the inability to do substantially all material acts the resulting disability or death to be
necessary to the prosecution of a gainful compensable, Section 32-A of the 2010 POEA-
occupation without serious discomfort or pain and SEC requires that all of the following conditions,
without material injury or danger to life. In as supported by substantial evidence, must be
disability compensation, it is not the injury per se established:
which is compensated but the incapacity to work. 1. The seafarer's work must involve the risks
The concept of this kind of disability under Article described in the POEA-SEC;
198 [192] of the Labor Code is applicable to the 2. The disease was contracted as a result of the
permanent total disability of seafarers. seafarer's exposure to the described risks;
3. The disease was contracted within a period of
Consequently, was ruled in Kestrel exposure and under such other factors necessary
Shipping,4 that it is now well-settled that the to contract it; and
provisions of the Labor Code and Amended Rules 4. There was no notorious negligence on the part
on Employees’ Compensation (AREC) of the seafarer.
implementing Title II, Book IV of the Labor Code
on disabilities are applicable to the case of 6. SEAFARER HAS BURDEN OF PROOF IN
seafarers such that the POEA-SEC is not the sole DISABILITY CLAIMS.
issuance that governs their rights in the event of The seafarer must still prove his
work-related death, injury or illness. entitlement to disability benefits by substantial
evidence of his illness' work-relatedness and that
4. REQUISITES FOR COMPENSABILITY OF the ailment was acquired during the term of his
INJURY OR ILLNESS. contract. He must show that he experienced
For disability to be compensable under health problems while at sea, the circumstances
Section 20 (A) of the 2010 POEA-SEC, two under which he developed the illness, as well as
elements must concur: the symptoms associated with it.
(1) The injury or illness must be work-related; and
(2) The work-related injury or illness must have 7. PRINCIPLE OF WORK-RELATEDNESS.
existed during the term of the seafarer's The principle of work-relatedness of an
employment contract. injury or illness means that the seafarer's injury or
illness has a possible connection to one's work,
The same provision defines a work- and thus, allows the seafarer to claim disability
related illness as "any sickness as a result of an benefits therefor.
occupational disease listed under Section 32-A of
[the POEA-SEC] with the conditions set therein The 2010 POEA-SEC defines a work-
satisfied." There should be a "reasonable linkage related injury as an "injury resulting in disability or
between the disease suffered by the employee death arising out of and in the course of
and his work." Meanwhile, illnesses not employment," and a work-related illness as "any
mentioned under Section 32 of the 2010 POEA- sickness resulting to disability or death as a result
SEC are disputably presumed as work-related. of an occupational disease listed under Section
Notwithstanding the presumption of work- 32-A of this Contract with the conditions set
relatedness of an illness under Section 20 (A) (4), therein satisfied.”
the seafarer must still prove by substantial
evidence that his work conditions caused or, at For illnesses not mentioned under Section
least, increased the risk of contracting the 32, the 2010 POEA-SEC creates a disputable
disease. This is because awards of compensation presumption in favor of the seafarer that these

41
illnesses are work-related. However, the to the deck to refit the caps. The next day, while
presumption does not necessarily result in an carrying a heavy basketful of fire hydrant caps,
automatic grant of disability compensation. The respondent felt a sudden snap on his back, with
claimant, on due process grounds, still has the pain that radiated down to the left side of his hips.
burden to present substantial evidence that his He immediately informed the ship captain about
work conditions caused or at least increased the his condition, and he was advised to take pain
risk of contracting the illness. This is because relievers. As the pain was initially tolerable, he
awards of compensation cannot rest entirely on continued with his work. After a few days, the pain
bare assertions and presumptions. In order to became severe, and respondent had difficulty
establish compensability of a non-occupational walking. The Court held that the snap on the back
disease, reasonable proof of work-connection is of respondent was not an accident, but an injury
sufficient – direct causal relation is not required. sustained by respondent from carrying the heavy
Thus, probability, not the ultimate degree of basketful of fire hydrant caps, which injury
certainty, is the test of proof in compensation resulted in his disability. The injury cannot be said
proceedings. to be the result of an accident, that is, an
unlooked for mishap, occurrence, or fortuitous
8. INJURY OR ILLNESS MUST OCCUR event, because the injury resulted from the
DURING TERM OF CONTRACT. performance of a duty. Although respondent may
As earlier quoted, Section 20 (A) of the not have expected the injury, yet, it is common
2010 POEA-SEC categorically reads: knowledge that carrying heavy objects can cause
back injury, as what happened in this case.
“The liabilities of the employer when the seafarer Hence, the injury cannot be viewed as unusual
suffers work-related injury or illness during the under the circumstances, and is not synonymous
term of his contract are as follows: xxx” with the term “accident” as defined above.

Based on this provision, an injury or 10. NON-COMPENSABILITY OF SELF-

illness is compensable when, first, it is work- INFLICTED INJURY.
related and, second, the injury or illness existed Section 20 (D) of the 2010 POEA-SEC is clear,
during the term of the seafarer’s employment viz.:
contract. The correct approach in adjudging “SECTION 20. COMPENSATION AND
claims of seafarers for death and disability BENEFITS
benefits is to determine whether the claimants xxx
have proven the requisites of compensability “D. No compensation and benefits shall be
under Section 32-A of the 2010 POEA-SEC. This payable in respect of any injury, incapacity,
provision states that for an occupational disease disability or death of the seafarer resulting from
and the resulting disability or death to be his willful or criminal act or intentional breach of
compensable, all of the following conditions need his duties; Provided, however, that the employer
to be satisfied: can prove that such injury, incapacity, disability or
(1) The seafarer's work must involve the risks death is directly attributable to the seafarer.”
described therein;
(2) The disease was contracted as a result of the From the above provision, the onus
seafarer's exposure to the described risks; probandi falls on the employer to establish or
(3) The disease was contracted within a period of substantiate its claim that the seafarer's injury was
exposure and under such other factors necessary caused by his willful or intentional act with the
to contract it; and requisite quantum of evidence.
(4) There was no notorious negligence on the part
of the seafarer.
II. EXISTENCE AND EXTENT OF SEAFARER’S
9. DISABILITY ARISING FROM ACCIDENT. DISABILITY, HOW DETERMINED AND
Raised as issue in NFD International,1 is DECLARED
whether or not the incident where respondent
figured should be classified as accident or an 1. PRE-EMPLOYMENT MEDICAL
injury. On May 16, 2003, when respondent had EXAMINATION (PEME); NON-
been on board the vessel M/V Shinrei for seven COMPENSABILITY OF DISABILITY FROM
months as Third Officer, the Captain and Chief PRE-EXISTING ILLNESS.
Officer ordered him to carry 25 fire hydrant caps Pursuant to Section 20 (A) of the 2010
from the deck to the engine workshop, then back POEA-SEC, the employer is liable for disability

42
benefits when the seafarer suffers from a work- or totally, as his condition is defined under the
related injury or illness during the term of his POEA-SEC and by applicable Philippine laws.
contract. In this regard, Section 20 (E) thereof However, if the 120-day period is exceeded and
mandates the seafarer to disclose all his pre- no definitive declaration is made because the
existing illnesses or conditions in his PEME; seafarer requires further medical attention, then
failing which shall disqualify him from receiving the temporary total disability period may be
disability compensation,2 viz.: extended up to a maximum of 240 days, subject
“SECTION 20. COMPENSATION AND to the right of the employer to declare within this
BENEFITS period that a permanent partial or total disability
xxx already exists.
“E. A seafarer who knowingly conceals a pre-
existing illness or condition in the Pre- But before the company-designated
Employment Medical Examination (PEME) shall physician may avail of the allowable 240-day
be liable for misrepresentation and shall be extended treatment period, he must perform some
disqualified from any compensation and benefits. significant act to justify the extension of the
This is likewise a just cause for termination of original 120-day period. Otherwise, the law grants
employment and imposition of appropriate the seafarer the relief of permanent total disability
administrative sanctions.” benefits due to such non-compliance.

At the outset, it bears to point out that Case law thus states that without a valid
Section 20 (E) of the 2010 POEA-SEC speaks of final and definitive assessment from the company-
an instance where an employer is absolved from designated physician within the 120-day/240-day
liability when a seafarer suffers a work-related period, the law already steps in to consider
injury or illness on account of the latter's willful petitioner's disability as total and permanent.
concealment or misrepresentation of a pre- Thus, a temporary total disability becomes total
existing condition or illness. Thus, the burden is and permanent by operation of law.
on the employer to prove such concealment of a Consequently, in a case where it was only after
pre-existing illness or condition on the part of the the lapse of more than six (6) months that the
seafarer to be discharged from any liability. In this company-designated physician issued a
regard, an illness shall be considered as pre- certification declaring the seafarer to be entitled to
existing if prior to the processing of the POEA a disability rating of Grade 10, going beyond the
contract, any of the following conditions is period of 120 days, without justifiable reason, the
present, namely: Court held that his disability was correctly
(a) The advice of a medical doctor on treatment adjudged to be permanent and total.
was given for such continuing illness or condition;
or b. Summary of Rules on the periods to assess
(b) The seafarer had been diagnosed and has the seafarer.
knowledge of such illness or condition but failed to The 2015 case of Elburg,1 and later
disclose the same during the PEME, and such reiterated in a number of cases,2 summarized the
cannot be diagnosed during the PEME. rules on the periods when the company-
designated physician must, as a duty, assess the
2. THE 120-DAY/240-DAY TREATMENT seafarer and issue a final medical assessment, as
PERIOD RULE. follows:
1. The company-designated physician must issue
a. Significance of the period. a final medical assessment on the seafarer’s
Pursuant to Section 20 (A) of the 2010 disability grading within a period of 120 days from
POEA-SEC, when a seafarer suffers a work- the time the seafarer reported to him;
related injury or illness in the course of 2. If the company-designated physician fails to
employment, the company-designated physician give his assessment within the period of 120 days
is obligated to arrive at a definite assessment of without any justifiable reason, then the seafarer’s
the former's fitness or degree of disability within a disability becomes permanent and total;
period of 120 days from repatriation. During the 3. If the company-designated physician fails to
said period, the seafarer shall be deemed on give his assessment within the period of 120 days
TEMPORARY TOTAL DISABILITY and shall with a sufficient justification (e.g., seafarer
receive his basic wage until he is declared fit to required further medical treatment or seafarer was
work or his temporary disability is acknowledged uncooperative3), then the period of diagnosis and
by the company to be permanent, either partially treatment shall be extended to 240 days. The

43
employer has the burden to prove that the Section 20 (B) (3) of the POEA-SEC are of a
company-designated physician has sufficient contrary opinion;
justification to extend the period; and (d) The company-designated physician
4. If the company-designated physician still fails to acknowledged that he is partially permanently
give his assessment within the extended period of disabled but other doctors who he consulted, on
240 days, then the seafarer’s disability becomes his own and jointly with his employer, believed
permanent and total, regardless of any that his disability is not only permanent but total
justification. as well;
(e) The company-designated physician
The above rule was further refined in the recognized that he is totally and permanently
2015 case of Marlow Navigation Philippines, Inc. disabled but there is a dispute on the disability
v. Osias,4 where the Court declared – and this is grading;
the current rule - as follows: (f) The company-designated physician determined
(1) that mere inability to work for a period of 120 that his medical condition is not compensable or
days does not entitle a seafarer to permanent and work- related under the POEA-SEC but his
total disability benefits; doctor-of-choice and the third doctor selected
(2) that the determination of the fitness of a under Section 20 (B) (3)2 of the POEA-SEC found
seafarer for sea duty is within the province of the otherwise and declared him unfit to work;
company- designated physician, subject to the (g) The company-designated physician declared
periods prescribed by law; him totally and permanently disabled but the
(3) that the company-designated physician has an employer refuses to pay him the corresponding
initial 120 days to determine the fitness or benefits; and
disability of the seafarer; and (h) The company-designated physician declared
(4) that the period of treatment may only be him partially and permanently disabled within the
extended to 240 days if a sufficient justification 120-day or 240-day period but he remains
exists such as when further medical treatment is incapacitated to perform his usual sea duties after
required or when the seafarer is uncooperative. the lapse of said periods.

For as long as the 120-day period under 3. POST-EMPLOYMENT MEDICAL

the Labor Code and the POEA-SEC and the 240- EXAMINATION.
day period under the IRR co-exist, the Court must
bend over backwards to harmoniously interpret a. Mandatory submission for post-employment
and give life to both of the stated periods. medical examination by a company-
Ultimately, the intent of our labor laws and designated physician.
regulations is to strive for social justice over the Section 20 (A) (3) of the 2010 POEA-SEC, reads:
diverging interests of the employer and the “COMPENSATION AND BENEFITS FOR
employee. INJURY OR ILLNESS
“The liabilities of the employer when the seafarer
c. Conditions required for the claim for total suffers work-related injury or illness during the
and permanent disability benefits to prosper. term of his contract are as follows:
In sum, according to the 2019 case of xxx
Torillos,1 in order for a seafarer’s claim for total “For this purpose, the seafarer shall
and permanent disability benefits to prosper, any submit himself to a post-employment medical
of the following conditions should be present: examination by a company-designated physician
(a) The company-designated physician failed to within three working days upon his return except
issue a declaration as to his fitness to engage in when he is physically incapacitated to do so, in
sea duty or disability even after the lapse of the which case, a written notice to the agency within
120-day period and there is no indication that the same period is deemed as compliance. In the
further medical treatment would address his course of the treatment, the seafarer shall also
temporary total disability, hence, justify an report regularly to the company-designated
extension of the period to 240 days; physician specifically on the dates as prescribed
(b) 240 days had lapsed without any certification by the company-designated physician and agreed
issued by the company designated physician; to by the seafarer. Failure of the seafarer to
(c) The company-designated physician declared comply with the mandatory reporting requirement
that he is fit for sea duty within the 120-day or shall result in his forfeiture of the right to claim the
240-day period, as the case may be, but his above benefits.”
physician of choice and the doctor chosen under

44
It is clear from the foregoing that for a seafarer’s
claim for disability to prosper, it is mandatory and “SECTION 20. COMPENSATION AND
must be strictly observed that within three (3) BENEFITS “COMPENSATION AND BENEFITS
working days from his repatriation, he is examined FOR INJURY OR ILLNESS
by a company- designated physician. Non-
compliance with this mandatory requirement “The liabilities of the employer when the seafarer
results in the forfeiture of the right to claim for suffers work-related injury or illness during the
compensation and disability benefits. term of his contract are as follows:
Consequently, the complaint filed by a non- . xxx
compliant seafarer should be dismissed outright. “If a doctor appointed by the seafarer disagrees
with the assessment, a third doctor may be
b. Exceptions. agreed jointly between the Employer and the
This rule is not absolute, however. It seafarer. The third doctor's decision shall be final
admits of exception as (1) when the seafarer is and binding on both parties.”
incapacitated to report to the employer upon his In other words, the referral to a third doctor is
repatriation; and (2) when the employer mandatory when:
inadvertently or deliberately refused to submit the (1) there is a valid and timely assessment
seafarer to a post-employment medical by the company-designated physician;
examination by a company-designated physician. and
(2) the appointed doctor of the seafarer
4. RIGHT OF SEAFARER TO SEEK A SECOND refuted such assessment.
OPINION.
6. MEDICAL ABANDONMENT AND
a. When right to seek second opinion accrues. PREMATURE FILING OF COMPLAINT FOR
The seafarer has the right to seek a DISABILITY CLAIM.
second opinion once the company-designated The act of a seafarer in refusing to
physician makes a definitive and final assessment undergo medical treatment or in refusing to
within the 120-day period; otherwise, no such continue his medical treatment with the company-
obligation devolves on the seafarer to consult his designated physician is called “medical
own doctor. abandonment” which would result in the denial of
his disability claim. Moreover, the filing of a
5. THE THIRD DOCTOR RULE - MANDATORY complaint for disability claim before the lapse of
PROCEDURE IN JOINTLY ENGAGING A THIRD the 120-day/240-day treatment period will result in
DOCTOR. its dismissal on the ground of prematurity as at
that point, the cause of action may be said to
a. Referral to a third-party doctor, when have not yet accrued as a matter of right.
required.
The conflicting findings of the company's 7. RULE IN CASE OF CONFLICT OF
doctor and the seafarer's physician often stir suits OPINIONS.
for disability compensation. As an extrajudicial In any case, the Supreme Court
measure of settling their differences, the POEA- underscored in Nazareno1 that “the bottomline is
SEC gives the parties the option of agreeing this: In a situation where the certification of the
jointly on a third doctor whose assessment shall company-designated physician would defeat the
break the impasse and shall be the final and OFW’s claim while the opinion of the independent
binding diagnosis. physicians would uphold such claim, the Court
adopts the findings favorable to the OFW. The law
While it is the company-designated doctor looks tenderly on the laborer. Where the evidence
who is given the responsibility to make a may be reasonably interpreted in two divergent
conclusive assessment on the degree of the ways, one prejudicial and the other favorable to
seafarer's disability and his capacity to resume him, the balance must be tilted in his favor
work within 120/240 days, the parties, however, consistent with the principle of social justice.”
are free to disregard the findings of the company
doctor as well as the chosen doctor of the 8. EFFECT OF MISREPRESENTATION ON
seafarer, in case they cannot agree on the DISABILITY CLAIMS.
disability gradings issued and jointly seek the Misrepresentation on the part of the
opinion of a third-party doctor pursuant to Section claimant would defeat the claim for total
20 (A) (3) of the 2010 POEA-SEC which states: permanent disability. In Ayungo,2 petitioner did

45
not disclose that he had been suffering from DURING TERM OF EMPLOYMENT.
hypertension and/or had been actually taking a. The death should happen during employment.
medications therefor (i.e., Lifezar) during his b. If death happens after termination of
PEME. As the records would show, the existence employment, no death benefits should, as a
of Ayungo’s hypertension was only revealed after general rule, be paid.
his repatriation, as reflected in the Medical Report c. Exception when death after termination of
dated March 26, 2008 and reinforced by employment is compensable.
subsequent medical reports issued by
Metropolitan Medical Center. To the Court’s mind, Section 32-A of the POEA-SEC considers the
Ayungo’s non-disclosure constitutes fraudulent possibility of compensation for the death of the
misrepresentation which, pursuant to Section 20 seafarer occurring after the termination of the
(E) of the 2000 POEA-SEC, disqualifies him from employment contract on account of a work-related
claiming any disability benefits from his employer. illness. But for death under this provision to be
compensable, the claimant must satisfy all of the
III. MONETARY CLAIMS OF SEAFARERS FOR following conditions:
DEATH BENEFITS (1) The seafarer's work must involve the risks
described in the POEA-SEC;
1. REQUISITES. (2) The disease was contracted as a result of the
To be entitled to death compensation seafarer's exposure to the described risks;
benefits from the employer, the death of the (3) The disease was contracted within a period of
seafarer: exposure and under such other factors necessary
(1) must be work-related; and to contract it; and
(2) must happen during the term of the (4) There was no notorious negligence on the part
employment contract. of the seafarer.

1.1. 1ST REQUISITE: DEATH MUST BE In fulfilling these requisites, substantial

WORK-RELATED. evidence must be presented which is more than a
mere scintilla; it must reach the level of relevant
a. Meaning of work-related death. evidence as a reasonable mind might accept as
While the 2010 and the earlier 2000 POEA-SEC sufficient to support a conclusion.
do not expressly define what a “work-related
death” means, it is evident from Part B (4) as d. Medical repatriation as an exception.
above-quoted that the said term refers to the The Supreme Court clarified in Canuel, that while
seafarer’s death resulting from a work- related the general rule is that the seafarer’s death should
injury or illness. This denotation complements the occur during the term of his employment, the
definitions accorded to the terms “work-related seafarer’s death occurring after the termination of
injury” and “work-related illness” under the 2010 his employment due to his medical repatriation on
POEA-SEC as follows: account of a work-related injury or illness
“Definition of Terms: constitutes an exception thereto. This is based on
“For purposes of this contract, the following terms a liberal construction of the 2000 POEA-SEC2 as
are defined as follows: impelled by the plight of the bereaved heirs who
xxx stand to be deprived of a just and reasonable
“16. Work-Related Illness - any sickness as a compensation for the seafarer’s death,
result of an occupational disease listed under notwithstanding its evident work-connection.
Section 32~A of this Contract with the conditions e. Non-medical repatriation cases where death
set therein satisfied. occurred after repatriation, hence, death benefits
“17. Work-Related Injury - injury arising out of and denied.
in the course of employment.
What is clear from the foregoing is that work- 2. DEATH CAUSED BY THE SEAFARER
related injury is one resulting in disability or death HIMSELF, NOT COMPENSABLE.
arising out of and in the course of employment. a. Death by suicide.
Thus, there is a need to show that the injury
resulting to disability or death must arise (1) out of In the following cases, the death by suicide was
employment; and (2) in the course of likewise held not compensable:
employment. (1) TSM Shipping (Phils.), Inc. v. De Chavez,3
where the seafarer was found dead inside his
1.2. 2ND REQUISITE: DEATH MUST OCCUR cabin bathroom hanging by the shower cord and

46
covered with blood. eligible to join, form or assist a labor
(2) Wallem Maritime Services, Inc. v. Pedrajas,4 organization?
where the seafarer hanged himself on the Upper Yes, but only among themselves. They
Deck B of the vessel with a rope tied to his neck. cannot join a rank-and-file union.
(3) Great Southern Maritime Services Corp. v.
Surigao,5 where the seafarer was found dead  Do alien employees have the right to
inside the bathroom of his hospital room with a join a labor organization?
belt tied around his neck. No, except if the following requisites are complied
(4) Maritime Factors, Inc. v. Hindang,6 where the with:
seafarer’s body was found hanging by a strap on (1) He should have a valid working permit issued
his neck in a kneeling position inside the locker by the DOLE; and
(wardrobe) of his cabin. (2) He is a national of a country which grants the
same or similar rights to Filipino workers OR
------------oOo------------ which has ratified either ILO Convention No. 87 or
ILO Convention No. 98 (ON THE RIGHT TO
SELF- ORGANIZATION OF WORKERS) as
SYLLABUS MAJOR TOPIC 5 certified by the Philippine Department of Foreign
LABOR RELATIONS Affairs (DFA).
A. RIGHT TO SELF-ORGANIZATION
 Do members of cooperatives have the
1. COVERAGE right to join, form or assist a labor
organization?
a. PERSONS WHO CAN EXERCISE RIGHT TO No, because they are co-owners of the
SELF-ORGANIZATION cooperative.

 Who are eligible to join, form or assist  What about employees of a

a labor organization for purposes of cooperative?
collective bargaining? Yes, because they have employer-employee
relationship with the cooperative.
o In the private sector:
1. All persons employed in commercial, industrial  What about members who are at the
and agricultural enterprises; same time employees of the
2. Employees of government-owned and/or cooperative?
controlled corporations without original charters No, because the prohibition covers employees of
established under the Corporation Code; the cooperative who are at the same time
3. Employees of religious, charitable, medical or members thereof.
educational institutions, whether operating for  Can employees of job contractors join,
profit or not; form or assist a labor organization?
4. Front-line managers, commonly known as Yes, but not for the purpose of collective
supervisory employees [See discussion below]; bargaining with the principal but with their direct
5. Alien employees [See discussion below]; employer – the job contractor.
6. Working children [See discussion below];
7. Homeworkers [See discussion below];  Are self-employed persons allowed to
8. Employees of cooperatives [See discussion join, form or assist a labor
below]; and organization?
9. Employees of legitimate contractors not with Yes, for their mutual aid and protection but not for
the principals but with the contractors collective bargaining purposes since they have no
employers but themselves. BUT AS AND BY
o In the public sector: WAY OF DISTINCTION, THEIR LABOR
All rank-and-file employees of all ORGANIZATION IS CALLED “WORKERS’
branches, subdivisions, instrumentalities, and ASSOCIATION.”
agencies of government, including government-
owned and/or controlled corporations with original This rule applies as well to ambulant,
charters, can form, join or assist employees’ intermittent and other workers, rural workers and
organizations of their own choosing. those without any definite employers.

 Are front-line managers or supervisors The reason for this rule is that these

47
persons have no employers with whom they can EMPLOYEE TO JOIN A UNION.
collectively bargain.
For example, not all secretaries to top
b. PERSONS WHO CANNOT EXERCISE RIGHT officials of the company may be considered as
TO SELF-ORGANIZATION confidential employees, unless they have access
to confidential information related to labor
 Who are the persons that are not relations, such as when they transcribe or
allowed to form, join or assist labor type/encode the counter-proposals of
organizations? management on the proposals of the SEBA in a
a. In the private sector. CBA negotiation. That access to such counter-
1. Top and middle level managerial employees; proposals is the type of access contemplated
and under this rule.
2. Confidential employees.
2. INELIGIBILITY OF MANAGERIAL
b. In the public sector. EMPLOYEES; RIGHT OF SUPERVISORY
The following are not eligible to form employees’ EMPLOYEES
organizations:
1. High-level employees whose functions are  Are managerial employees allowed
normally considered as policy-making or unionize?
managerial or whose duties are of a highly There are 3 types of managerial employees:
confidential nature; 1. Top Management
2. Members of the Armed Forces of the 2. Middle Management
Philippines; 3. First-Line Management (also called supervisory
3. Police officers; level)
4. Policemen;
5. Firemen; and The first two above are absolutely
6. Jail guards. prohibited; but the third, being supervisors, are
allowed but only among themselves.
CONFIDENTIAL EMPLOYEE RULE
 Are confidential employees allowed to
 Who are confidential employees? join, form or assist a labor
Within the context of labor relations, “confidential organization?
employees” are those who meet the following No, under the confidential employee rule.
criteria: “Confidential employees” are those who meet the
(1) They assist or act in a confidential capacity; following criteria:
(2) To persons or officers who formulate, (1) They assist or act in a confidential capacity;
determine, and effectuate management policies (2) To persons or officers who formulate,
specifically in the field of labor relations. determine, and effectuate management policies
The two (2) criteria above are cumulative and specifically in the field of labor relations. If not
both must be met if an employee is to be related to labor relations, an employee can never
considered a “confidential employee” that would be considered as confidential employee as would
deprive him of his right to form, join or assist a deprive him of his right to self-organization.
labor organization.
The two (2) criteria are cumulative and
 What is the doctrine of necessary both must be met if an employee is to be
implication? considered a “confidential employee” that would
Under the confidential employee rule, a deprive him of his right to form, join or assist a
rank-and-file employee or a supervisory labor organization.
employee, is elevated to the position of a
managerial employee, under another doctrine 3. EFFECT OF INCLUSION AS MEMBERS OF
called the DOCTRINE OF NECESSARY EMPLOYEES OUTSIDE OF THE BARGAINING
IMPLICATION, hence, he is treated as if he is a UNIT
managerial employee because of his access to
confidential information related to labor relations. COMMINGLING or MIXED MEMBERSHIP
THE DOCTRINE OF NECESSARY
IMPLICATION IS THEREFORE THE LEGAL  Is COMMINGLING or MIXED
BASIS FOR INELIGIBILITY OF CONFIDENTIAL MEMBERSHIP of supervisors and rank-

48
 and-file union in one union allowed? Is LOCAL CHAPTER/CHARTERED LOCAL
it a ground to cancel its registration? The federation or national union (also
No. It is not allowed. However, it bears noting that called “Mother Union”), acting for and in behalf of
in case there is commingling or mixed its affiliate, has the status of an agent while the
membership of supervisors and rank-and-file affiliate or local chapter/chartered local remains
employees in one union, the new rule enunciated the principal – the basic unit of the association.
in Article 256 [245-A] of the Labor Code, unlike in
the old law, is that it cannot be invoked as a 3. PURPOSE OF AFFILIATION
ground for the cancellation of the registration of The purpose of affiliation is to further
the union. The employees so improperly included strengthen the collective bargaining leverage of
are automatically deemed removed from the list of the affiliate. No doubt, the purpose of affiliation by
members of said union. In other words, their a local union with a mother union is to increase by
removal from the said list is by operation of law. collective action its bargaining power in respect of
the terms and conditions of labor.

4. NON-ABRIDGEMENT 4. RIGHT TO DISAFFILIATE.

(OF RIGHT TO SELF-ORGANIZATION) The right of the affiliate union to disaffiliate
from its mother federation or national union is a
1. LEGAL BASIS. constitutionally- guaranteed right which may be
Article 257 [246] speaks of the principle of invoked by the former at any time. It is axiomatic
non-abridgment of the right to self-organization as that an affiliate union is a separate and voluntary
follows: association free to serve the interest of all its
members - consistent with the freedom of
“Article 257 [246]. Non-Abridgment of association guaranteed in the Constitution.
Right to Self-Organization. – It shall be unlawful
for any person to restrain, coerce, discriminate 5. DISTINCTIONS AS TO AFFILIATION &
against or unduly interfere with employees and DISAFFILIATION.
workers in their exercise of the right to self- The following are the distinctions between
organization. Such right shall include the right to independently registered union and local
form, join, or assist labor organizations for the chapter/chartered local, insofar as their
purpose of collective bargaining through relationship with the federation or national union is
representatives of their own choosing and to concerned:
engage in lawful concerted activities for the same
purpose or for their mutual aid and protection,
subject to the provisions of Article 279 [264] of
this Code.”
More aptly, Article 257 [246] describes the
legal concept of the “right to self-organization,”
which, as a legal proposition, includes two (2)
basic rights, namely:
(1) “To form, join, or assist labor organizations for
the purpose of collective bargaining through
representatives of their own choosing;” and

(2) “To engage in lawful concerted activities for

the same purpose or for their mutual aid and
protection, subject to the provisions of Article 279
[264] of [the Labor] Code.”

5. AFFILIATION AND DISAFFILIATION

1. UNIONVIS-À-VIS ITS MEMBERS.

The relationship between the union and its
members is that of principal and agent, the former 6. SOME PRINCIPLES ON AFFILIATION.
being the agent while the latter, the principal.  Independent legal personality of an affiliate
union is not affected by affiliation.
2. MOTHER UNION VIS-À-VIS AFFILIATE OR  The affiliate union is a separate and distinct

49
 voluntary association owing its creation to the  What are the four tests to determine
will of its members. It does not give the appropriate bargaining unit?
mother union the license to act independently Based on jurisprudence, there are certain
of the affiliate union. tests which may be used in determining the
 The fact that the affiliate union is not a appropriate collective bargaining unit, to wit:
legitimate labor organization does not affect (1) Community or mutuality of interest doctrine;
the principal-agent relationship. (2) Globe doctrine or will of the members;
 Affiliate union becomes subject of the rules of (3) Collective bargaining history doctrine; and
the federation or national union. (4) Employment status doctrine.
 The appendage of the acronym of the
federation or national union after the name of 1. COMMUNITY OR MUTUALITY OF INTEREST
the affiliate union in the registration with the DOCTRINE.
DOLE does not change the principal-agent Under this doctrine, the employees sought
relationship between them. Such inclusion of to be represented by the collective bargaining
the acronym is merely to indicate that the agent must have community or mutuality of
local union is affiliated with the federation or interest in terms of employment and working
national union at the time of the registration. conditions as evinced by the type of work they
It does not mean that the affiliate union perform. It is characterized by similarity of
cannot independently stand on its own. employment status, same duties and
responsibilities and substantially similar
7. SOME PRINCIPLES ON DISAFFILIATION. compensation and working conditions.
 Disaffiliation does not divest an affiliate
union of its legal personality. St. James School of Quezon City v.
 Disaffiliation of an affiliate union is not an Samahang Manggagawa sa St. James School of
act of disloyalty. Quezon City.1 - Respondent union sought to
 Disaffiliation for purposes of forming a represent the rank-and-file employees (consisting
new union does not terminate the status of the motor pool, construction and transportation
of the members thereof as employees of employees) of petitioner-school’s Tandang Sora
the company. By said act of disaffiliation, campus. Petitioner-school opposed it by
the employees who are members of the contending that the bargaining unit should not
local union did not form a new union but only be composed of said employees but must
merely exercised their right to register include administrative, teaching and office
their local union. The local union is free to personnel in its five (5) campuses. The Supreme
disaffiliate from its mother union. Court disagreed with said contention. The motor
 Disaffiliation should be approved by the pool, construction and transportation employees
majority of the union members. of the Tandang Sora campus had 149 qualified
 Disaffiliation terminates the right to check- voters at the time of the certification election,
off federation dues. hence, it was ruled that the 149 qualified voters
should be used to determine the existence of a
quorum during the election. Since a majority or 84
C. BARGAINING UNIT out of the 149 qualified voters cast their votes, a
quorum existed during the certification election.
 What is a bargaining unit? The computation of the quorum should be based
A “bargaining unit” refers to a group of on the rank-and-file motor pool, construction and
employees sharing mutual interests within a given transportation employees of the Tandang Sora
employer unit, comprised of all or less than all of campus and not on all the employees in
the entire body of employees in the employer unit petitioner’s five (5) campuses. Moreover, the
or any specific occupational or geographical administrative, teaching and office personnel are
grouping within such employer unit. It may also not members of the union. They do not belong to
refer to the group or cluster of jobs or positions the bargaining unit that the union seeks to
within the employer’s establishment that supports represent.
the labor organization which is applying for
registration. Other cases:
(1) San Miguel Corporation v. Laguesma,
(a) TEST TO DETERMINE AN APPROPRIATE involving a petition of the union which seeks to
BARGAINING UNIT represent the sales personnel in the various
Magnolia sales offices in Northern Luzon.

50
Petitioner company, however, opposed it by
taking the position that each sales office should International School Alliance of Educators
constitute one bargaining unit. In disagreeing with [ISAE] v. Quisumbing.6 - The Supreme Court
this proposition of petitioner, the High Court said: ruled here that foreign-hired teachers do not
“What greatly militates against this position (of the belong to the bargaining unit of the local-hires
company) is the meager number of sales because the former have not indicated their
personnel in each of the Magnolia sales office in intention to be grouped with the latter for
Northern Luzon. Even the bargaining unit sought purposes of collective bargaining. Moreover, the
to be represented by respondent union in the collective bargaining history of the school also
entire Northern Luzon sales area consists only of shows that these groups were always treated
approximately fifty-five (55) employees. Surely, it separately.
would not be for the best interest of these
employees if they would further be fractionalized. 3. COLLECTIVE BARGAINING HISTORY
The adage ‘there is strength in number’ is the very DOCTRINE.
rationale underlying the formation of a labor This principle puts premium to the prior
union.” collective bargaining history and affinity of the
(2) San Miguel Corporation Supervisors and employees in determining the appropriate
Exempt Employees Union v. Laguesma,3 bargaining unit. However, the existence of a prior
involving the issue of validity of constituting as collective bargaining history has been held as
one CBU of employees working in San Miguel’s neither decisive nor conclusive in the
three (3) plants located in three (3) different determination of what constitutes an appropriate
places, namely: (1) in Cabuyao, Laguna, (2) in bargaining unit.
Otis, Pandacan, Metro Manila, and (3) in San
Fernando, Pampanga. It was declared that National Association of Free Trade Unions
geographical location is immaterial and therefore v. Mainit Lumber Development Company Workers
can be completely disregarded if the communal or Union.7 - It was ruled here that there is mutuality
mutual interest of the employees are not of interest among the workers in the sawmill
sacrificed. The distance among the 3 plants is not division and logging division as to justify their
productive of insurmountable difficulties in the formation of a single bargaining unit. This holds
administration of union affairs. Neither are there true despite the history of said two divisions being
regional differences that are likely to impede the treated as separate units and notwithstanding
operations of a single bargaining representative. their geographical distance from each other.
(3) Similar to this case is University of the
Philippines v. Ferrer-Calleja,4 where all non- 4. EMPLOYMENT STATUS DOCTRINE.
academic rank-and- file employees of the The determination of the appropriate
University of the Philippines in its various bargaining unit based on the employment status
campuses, to wit: (1) Diliman, Quezon City; (2) of the employees is considered an acceptable
Padre Faura, Manila; (3) Los Baños, Laguna; and mode. For instance, casual employees and those
(4) the Visayas, were allowed to participate in a employed on a day-to-day basis, according to the
certification election as one bargaining unit. Supreme Court in Philippine Land-Air-Sea Labor
Union v. CIR, 1 do not have the mutuality or
2. GLOBE DOCTRINE. community of interest with regular and permanent
This principle is based on the will of the employees. Hence, their inclusion in the
employees. It is called Globe doctrine because bargaining unit composed of the latter is not
this principle was first enunciated in the United justified. Confidential employees, by the very
States case of Globe Machine and Stamping nature of their functions, assist and act in a
Co.,5 where it was ruled, in defining the confidential capacity to, or have access to
appropriate bargaining unit, that in a case where confidential matters of, persons who exercise
the company’s production workers can be managerial functions in the field of labor relations.
considered either as a single bargaining unit As such, the rationale behind the ineligibility of
appropriate for purposes of collective bargaining managerial employees to form, assist or join a
or as three (3) separate and distinct bargaining labor union equally applies to them. Hence, they
units, the determining factor is the desire of the cannot be allowed to be included in the rank-and-
workers themselves. Consequently, a certification file employees’ bargaining unit. The rationale for
election should be held separately to choose this inhibition is that if these managerial
which representative union will be chosen by the employees would belong to or be affiliated with a
workers. union, the latter might not be assured of their

51
loyalty to the union in view of evident conflict of Rules on this mode, namely:
interest. The union can also become company- (1) Request for certification in unorganized
dominated with the presence of managerial establishment with only one (1) legitimate union;
employees in its membership. (2) Request for certification in unorganized
establishment with more than one (1)
C. BARGAINING REPRESENTATIVE legitimate labor organization; and
(A.K.A. SEBA OR BARGAINING AGENT) (3) Request for certification in organized
establishment. The foregoing scenarios are
 What is a SEBA? discussed below.
A Sole and Exclusive Bargaining Agent
(SEBA) or commonly referred to as “exclusive FIRST SCENARIO: Request for certification in an
bargaining representative” or “exclusive UNORGANIZED establishment with only one (1)
bargaining agent” refers to a legitimate labor legitimate union.
organization duly certified as the sole and a. Validation process.
exclusive bargaining representative or agent of all If the DOLE Regional Director finds the
the employees in a bargaining unit. establishment unorganized with only one (1)
legitimate labor organization in existence, he/she
 What are the modes of determining the should call a conference within five (5) working
sole and exclusive bargaining agent? days for the submission of the following:
The following are the modes: 1. The names of employees in the covered
1. Request for SEBA Certification; bargaining unit who signify their support for the
2. Certification election; SEBA certification, provided that said employees
3. Consent election; comprise at least majority of the number of
4. Run-off election; employees in the covered bargaining unit; and
5. Re-run election. 2. Certification under oath by the president of the
requesting union or local that all documents
(a) REQUEST FOR SEBA CERTIFICATION submitted are true and correct based on his/her
(Repealed and Replaced “VOLUNTARY personal knowledge.
RECOGNITION”)
The submission shall be presumed to be
 Is voluntary recognition still a proper true and correct unless contested under oath by
mode of selecting a SEBA? any member of the bargaining unit during the
No more, because of its repeal and being validation conference. For this purpose, the
replaced by the new mode called “REQUEST employer or any representative of the employer
FOR SEBA CERTIFICATION” per Department shall not be deemed a party-in-interest but only as
Order No. 40-I-15, Series of 2015, (Sept. 7, a bystander to the process of certification.
2015).
 What should the employer do if a If the requesting union or local fails to
request for recognition or a demand for complete the requirements for SEBA certification
CBA negotiation is made by a union during the conference, the Request should be
which has not been certified as the referred to the Election Officer for the conduct of
SEBA? certification election.
The employer so requested cannot now
extend voluntary recognition but may still validly b. Action on the submission – when SEBA
file a petition for certification election (PCE) under Certification should be issued.
Article 270 [258] of the Labor Code, in order to If the DOLE Regional Director finds the
determine if the requesting union has the majority requirements complete, he/she should issue,
support of the employees in the bargaining unit during the conference, a Certification as SEBA
which it seeks to represent or where it intends to enjoying the rights and privileges of an exclusive
operate. bargaining agent of all the employees in the
covered bargaining unit.
 What are the situations involved in this
new mode of “REQUEST FOR SEBA The DOLE Regional Director should
CERTIFICATION”? cause the posting of the SEBA Certification for 15
THREE SCENARIOS INVOLVING A REQUEST consecutive days in at least 2 conspicuous places
FOR CERTIFICATION. in the establishment or covered bargaining unit.
There are three (3) scenarios conceived under the

52
c. Effect of certification.
Upon the issuance of the Certification as b. Bar rules.
SEBA, the certified union or local shall enjoy all No certification election may be held under the
the rights and privileges of an exclusive following rules:
bargaining agent of all the employees in the 1. Statutory bar rule;
covered CBU. 2. Certification year bar rule;
3. Negotiations bar rule;
SECOND SCENARIO: Request for certification in 4. Bargaining deadlock bar rule; or
unorganized establishment with more than one (1) 5. Contract bar rule.
legitimate labor organization.
If the DOLE Regional Director finds the 1. STATUTORY BAR RULE.
establishment unorganized with more than one (1) The Labor Code does not contain any
legitimate labor organization, he/she should refer provision on this rule but the Rules to Implement
the same to the Election Officer for the conduct of the Labor Code embody a rule that bars the filing
certification election.3 The certification election of a PCE within a period of one (1) year from the
shall be conducted in accordance with the Rules. date of a valid conduct of a certification, consent,
run-off or re-run election where no appeal on the
THIRD SCENARIO: Request for certification in results thereof was made. If there was such an
organized establishment. appeal from the order of the Med-Arbiter, the
If the Regional Director finds the running of the one-year period is deemed
establishment organized, he/she should refer the suspended until the decision on the appeal has
same to the Mediator- Arbiter for the become final and executory.
determination of the propriety of conducting a
certification election. This is called the statutory bar rule which
finds its roots from a similar rule in the United
(b) CERTIFICATION ELECTION States. Thus, an election cannot be held in any
 What is certification election? bargaining unit in which a final and valid election
“Certification election” refers to the process of was concluded within the preceding 12- month
determining through secret ballot the sole and period.
exclusive bargaining agent of the employees in an
appropriate bargaining unit for purposes of 2. CERTIFICATION YEAR BAR RULE.
collective bargaining or negotiations. Under this rule, a petition for certification
election (PCE) may not be filed within one (1)
 Who may file a petition for certification year:
election? 1. From the date a union is certified as SEBA by
The petition may be filed by: virtue of a REQUEST FOR SEBA
1. A legitimate labor organization which may be: CERTIFICATION; or
(a) an independent union; or 2. From the date a valid certification, consent, run-
(b) a national union or federation which off or re-run election has been conducted within
has already issued a charter certificate to its local the bargaining unit.
chapter participating in the certification election; or If after this one year period, the SEBA did
(c) a local chapter which has been issued not commence collective bargaining with the
a charter certificate by the national union or employer, a PCE may be filed by a rival union to
federation. challenge the majority status of the certified
SEBA.
2. An employer, when requested by a labor
organization to bargain collectively and its 3. NEGOTIATIONS BAR RULE.
majority status is in doubt. Under this rule, no PCE should be
entertained while the sole and exclusive
 What are the rules prohibiting the filing bargaining agent (SEBA) and the employer have
of petition for certification election (bar commenced and sustained negotiations in good
rules)? faith within the period of one (1) year from the
a. General rule. date of a valid certification, consent, run-off or re-
The general rule is that in the absence of a CBA run election or from the date of voluntary
duly registered in accordance with Article 231 of recognition.
the Labor Code, a petition for certification election Once the CBA negotiations have
may be filed at any time. commenced and while the parties are in the

53
process of negotiating the terms and conditions of registration are falsified, fraudulent or tainted with
the CBA, no challenging union is allowed to file a misrepresentation.
PCE that would disturb the process and unduly 3. Where the CBA does not foster industrial
forestall the early conclusion of the agreement. stability, such as contracts where the identity of
the representative is in doubt since the employer
4. BARGAINING DEADLOCK BAR RULE. extended direct recognition to the union and
Under this rule, a PCE may not be concluded a CBA therewith less than one (1) year
entertained when a bargaining deadlock to which from the time a certification election was
an incumbent or certified bargaining agent is a conducted where the “no union” vote won. This
party has been submitted to conciliation or situation obtains in a case where the company
arbitration or has become the subject of a valid entered into a CBA with the union when its status
notice of strike or lockout. as exclusive bargaining agent of the employees
Kaisahan ng Manggagawang Pilipino has not been established yet.
[KAMPIL-KATIPUNAN] v. Trajano. - The 4. Where the CBA was registered before or during
bargaining deadlock- bar rule was not applied the last sixty (60) days of a subsisting agreement
here because for more than four (4) years after it or during the pendency of a representation case.
was certified as the exclusive bargaining agent of It is well-settled that the 60-day freedom period
all the rank-and-file employees, it did not take any based on the original CBA should not be affected
action to legally compel the employer to comply by any amendment, extension or renewal of the
with its duty to bargain collectively, hence, no CBA for purposes of certification election.
CBA was executed. Neither did it file any unfair
labor practice suit against the employer nor did it  What are the requisites for the validity
initiate a strike against the latter. Under the of the petition for certification
circumstances, a certification election may be election?
validly ordered and held. The following requisites should concur:
1. The union should be legitimate which means
5. CONTRACT BAR RULE. that it is duly registered and listed in the registry of
Under this rule, a PCE cannot be filed legitimate labor unions of the BLR or that its legal
when a CBA between the employer and a duly personality has not been revoked or cancelled
recognized or certified bargaining agent has been with finality.
registered with the Bureau of Labor Relations 2. In case of organized establishments, the
(BLR) in accordance with the Labor Code. Where petition for certification election is filed during (and
the CBA is duly registered, a petition for not before or after) the 60-day freedom period of a
certification election may be filed only within the duly registered CBA.
60-day freedom period prior to its expiry. The 3. In case of organized establishments, the
purpose of this rule is to ensure stability in the petition complied with the 25% written support of
relationship of the workers and the employer by the members of the bargaining unit.
preventing frequent modifications of any CBA 4. The petition is filed not in violation of any of the
earlier entered into by them in good faith and for four (4) bar rules [See above discussion thereof].
the stipulated original period.
 What are the two (2) kinds of majorities
 When contract bar rule does not apply. (DOUBLE MAJORITY RULE)?
The contract-bar rule does not apply in the The process of certification election requires
following cases: two (2) kinds of majority votes, viz.:
1. Where there is an automatic renewal provision 1. Number of votes required for the validity of the
in the CBA but prior to the date when such process of certification election itself. In order to
automatic renewal became effective, the have a valid certification election, at least a
employer seasonably filed a manifestation with majority of all eligible voters in the appropriate
the Bureau of Labor Relations of its intention to bargaining unit must have cast their votes.
terminate the said agreement if and when it is 2. Number of votes required to be certified as the
established that the bargaining agent does not collective bargaining agent. To be certified as the
represent anymore the majority of the workers in sole and exclusive bargaining agent, the union
the bargaining unit. should obtain a majority of the valid votes cast.
2. Where the CBA, despite its due registration, is
found in appropriate proceedings that: (a) it  What are some pertinent principles on
contains provisions lower than the standards fixed certification election?
by law; or (b) the documents supporting its •The pendency of a petition to cancel the

54
certificate of registration of a union participating in  How should certification election be
a certification election does not stay the conduct conducted in an unorganized
thereof. establishment?
• The pendency of an unfair labor practice case In case of a petition filed by a legitimate
filed against a labor organization participating in organization involving an unorganized
the certification election does not stay the holding establishment, the Med- Arbiter is required to
thereof. immediately order the conduct of a certification
• Direct certification as a method of selecting the election upon filing of a petition for certification
exclusive bargaining agent of the employees is election by a legitimate labor organization.
not allowed. This is because the conduct of a
certification election is still necessary in order to
arrive in a manner definitive and certain b.2. CERTIFICATION ELECTION IN AN
concerning the choice of the labor organization to ORGANIZED ESTABLISHMENT
represent the workers in a collective bargaining
unit.  What are the requisites for the conduct
• The “No Union” vote is always one of the of a certification election in an
choices in a certification election. Where majority organized establishment?
of the valid votes cast results in “No Union” The Med-Arbiter is required to automatically
obtaining the majority, the Med-Arbiter shall order the conduct of a certification election by
declare such fact in the order. secret ballot in an organized establishment as
• Only persons who have direct employment soon as the following requisites are fully met:
relationship with the employer may vote in the 1. That a petition questioning the majority status
certification election, regardless of their period of of the incumbent bargaining agent is filed before
employment. the DOLE within the 60-day freedom period;
2. That such petition is verified; and
3. That the petition is supported by the written
b.1. CERTIFICATION ELECTION IN AN consent of at least twenty-five percent (25%) of all
UNORGANIZED ESTABLISHMENT the employees in the bargaining unit.

 What is meant by “unorganized c. RUN-OFF ELECTION

establishment”?
As distinguished from “organized  What is a run-off election?
establishment,” an “unorganized establishment” is A “run-off election” refers to an election
an employer entity where there is no recognized between the labor unions receiving the two (2)
or certified collective bargaining union or agent. highest number of votes in a certification election
or consent election with three (3) or more unions
A company or an employer-entity, however, in contention, where such certification election or
may still be considered an unorganized consent election results in none of the contending
establishment even if there are unions in unions receiving the majority of the valid votes
existence therein for as long as not one of them is cast; provided, that the total number of votes for
duly certified as the sole and exclusive bargaining all contending unions, if added, is at least fifty
representative of the employees in the particular percent (50%) of the number of valid votes cast.
bargaining unit it seeks to operate and represent.
 When is it conducted?
Further, a company remains unorganized If the above conditions that justify the conduct
even if there is a duly recognized or certified of a run-off election are present and there are no
bargaining agent for rank-and-file employees, for objections or challenges which, if sustained, can
purposes of the petition for certification election materially alter the election results, the Election
filed by supervisors. The reason is that the Officer should motu proprio conduct a run-off
bargaining unit composed of supervisors is election within ten (10) days from the close of the
separate and distinct from the unionized election proceeding between the labor unions
bargaining unit of rank-and-file employees. receiving the two highest number of votes.
Hence, being unorganized, the 25% required
minimum support of employees within the ILLUSTRATION.
bargaining unit of the supervisors need not be To illustrate, in a certification election
complied with. involving four (4) unions, namely: Union A, Union
B, Union C, and Union D, where there are 100

55
eligible voters who validly cast their votes, and the A “consent election” refers to the process of
votes they each garnered are as follows: Union A determining through secret ballot the sole and
– 35; Union B – 25; Union C – 10; Union D - 15; exclusive bargaining agent (SEBA) of the
and No Union - 15, a run-off election may be employees in an appropriate bargaining unit for
conducted between Union A and Union B purposes of collective bargaining and negotiation.
because: It is voluntarily agreed upon by the parties, with or
(1) Not one of the unions mustered the majority without the intervention of the DOLE.
vote of 51 votes but Union A and Union B got the
first two highest number of votes;  What are the distinctions between consent
(2) If all the votes for the contending unions are election and certification election?
added up, it will result in at least 50% of the valid Consent election is but a form of certification
votes cast (Union A – 35; Union B – 25; Union C – election. They may be distinguished from each
10; Union D - 15 for a total of 85 or 85%); and other in the following manner:
(3) There are no objections or challenges which, if
sustained, can materially alter the results of the (1) The former is held upon the mutual agreement
election. of the contending unions; while the latter does not
require the mutual consent of the parties as it is
THE “NO UNION” CHOICE SHOULD NO conducted upon the order of the Med-Arbiter
LONGER BE INCLUDED. (Mediator-Arbiter).
For obvious reason, the choice of “No (2) The former may be conducted with or without
Union” should no longer be included in the run-off the control and supervision of the DOLE; while the
election. latter is always conducted under the control and
supervision of the DOLE.
d. RE-RUN ELECTION (3) The former is being conducted as a voluntary
mode of resolving labor dispute; while the latter,
1. MEANING OF RE-RUN ELECTION. although non- adversarial, is a compulsory
“‘Re-run election’ refers to an election method of adjudicating a labor dispute.
conducted to break a tie between contending (4) The former is given the highest priority; while
unions, including between ‘no union’ and one of the latter is resorted to only when the contending
the unions. It shall likewise refer to an election unions fail or refuse to submit their representation
conducted after a failure of election has been dispute through the former. This is so because
declared by the Election Officer and/or affirmed by under the Implementing Rules, as amended, even
the Mediator-Arbiter.” in cases where a PCE is filed, the Med-Arbiter
(Mediator-Arbiter), during the preliminary
2. GROUNDS CITED IN THE RULES FOR RE- conference and hearing thereon, is tasked to
RUN ELECTION. determine the “possibility of a consent election.” It
Based on the above-quoted rule, there are is only when the contending unions fail to agree to
2 situations contemplated thereunder that justify the conduct of a consent election during the
the conduct of a re-run election, to wit: preliminary conference that the Med-Arbiter
(1) To break a tie; or (Mediator-Arbiter) will proceed with the process of
(2) To cure a failure of election. certification election by conducting as many
hearings as he may deem necessary up to its
3. RULE IN CASE OF FAILURE OF ELECTION. actual holding. But in no case shall the conduct of
In failure of election, the number of votes the certification election exceed 15 days from the
cast in the certification or consent election is less date of the scheduled preliminary
than the majority of the number of eligible voters conference/hearing after which time, the PCE is
and there are no challenged votes that could considered submitted for decision.
materially change the results of the election. For (5) The former necessarily involves at least two
example, in a CBU composed of 100 employees, (2) or more contending unions; while the latter
the majority of 100, which is 51, should validly may only involve one (1) petitioner union.
cast their votes in the election; otherwise, if less (6) The former may be conducted in the course of
than 51 employees have validly cast their votes, the proceeding in the latter or during its pendency.
there is here a failure of election.

e. CONSENT ELECTION D. RIGHTS OF LABOR ORGANIZATION

 What is consent election? 1. CHECK-OFF, ASSESSMENT, AGENCY FEES

56
 diminish their compensation without their
1. REQUISITES FOR VALIDITY OF UNION knowledge or consent.
DUES AND SPECIAL ASSESSMENTS.
The following requisites must concur in 5. INDIVIDUAL WRITTEN AUTHORIZATION,
order for union dues and special assessments for WHEN NOT REQUIRED.
the union’s incidental expenses, attorney’s fees In the following cases, individual written
and representation expenses to be valid, namely: authorization is not required:
(a) Authorization by a written resolution of the a. Assessment from non-members of the
majority of all the members at a general bargaining agent of “agency fees” which should
membership meeting duly called for the purpose; be equivalent to the dues and other fees paid by
(b) Secretary’s record of the minutes of said members of the recognized bargaining agent, if
meeting; and such non-members accept the benefits under the
(c) Individual written authorizations for check-off CBA.
duly signed by the employees concerned. b. Deductions for fees for mandatory activities
such as labor relations seminars and labor
2. ASSESSMENT FOR ATTORNEY’S FEES, education activities.
NEGOTIATION FEES AND SIMILAR CHARGES. c. Deductions for withholding tax mandated under
The rule is that no such attorney’s fees, the National Internal Revenue Code.
negotiation fees or similar charges of any kind e. Deductions for withholding of wages because
arising from the negotiation or conclusion of the of employee’s debt to the employer which is
CBA shall be imposed on any individual member already due.
of the contracting union. Such fees may be f. Deductions made pursuant to a judgment
charged only against the UNION FUNDS in an against the worker under circumstances where
amount to be agreed upon by the parties. Any the wages may be the subject of attachment or
contract, agreement or arrangement of any sort to execution but only for debts incurred for food,
the contrary is deemed null and void. Clearly, clothing, shelter and medical attendance.
what is prohibited is the payment of attorney’s g. Deductions from wages ordered by the court.
fees when it is effected through forced h. Deductions authorized by law such as for
contributions from the workers from their own premiums for PhilHealth, SSS, Pag-IBIG,
funds as distinguished from the union funds. employees’ compensation and the like.

3. CHECK-OFF OF UNION DUES AND AGENCY FEES

ASSESSMENTS.
“Check-off” means a method of deducting 1. A NON-BARGAINING UNION MEMBER HAS
from the employee’s pay at prescribed periods, THE RIGHT TO ACCEPT OR NOT THE
any amount due for fees, fines or assessments. It BENEFITS OF THE CBA.
is a process or device whereby the employer, on There is no law that compels a non-
agreement with the union recognized as the bargaining union member to accept the benefits
proper bargaining representative, or on prior provided in the CBA. He has the freedom to
authorization from its employees, deducts union choose between accepting and rejecting the CBA
dues and assessments from the latter’s wages itself by not accepting any of the benefits flowing
and remits them directly to the union. therefrom. Consequently, if a non-bargaining
union member does not accept or refuses to avail
4. INDIVIDUAL WRITTEN AUTHORIZATION, of the CBA-based benefits, he is not under any
WHEN REQUIRED. obligation to pay the “agency fees” since, in effect,
The law strictly prohibits the check-off he does not give recognition to the status of the
from any amount due an employee who is a bargaining union as his agent.
member of the union, of any union dues, special
assessment, attorney’s fees, negotiation fees or 2. LIMITATION ON THE AMOUNT OF AGENCY
any other extraordinary fees other than for FEE.
mandatory activities under the Labor Code, The bargaining union cannot capriciously
without the individual written authorization duly fix the amount of agency fees it may collect from
signed by the employee. Such authorization must its non-members.
specifically state the amount, purpose and Article 248(e) of the Labor Code expressly
beneficiary of the deduction. The purpose of the sets forth the limitation in fixing the amount of the
individual written authorization is to protect the agency fees, thus:
employees from unwarranted practices that (1) It should be reasonable in amount; and

57
(2) It should be equivalent to the dues and other special assessments holds and applies only to the
fees paid by members of the recognized collective bargaining agent and not to any other union/s
bargaining agent. (called “Minority Union/s”).

Thus, any agency fee collected in excess

of this limitation is a nullity. 2. COLLECTIVE BARGAINING

3. NON-MEMBERS OF THE SEBA NEED NOT a. DUTY TO BARGAIN COLLECTIVELY

BECOME MEMBERS THEREOF.
The employees who are not members of 1. MEANING OF DUTY TO BARGAIN
the certified bargaining agent which successfully COLLECTIVELY.
concluded the CBA are not required to become The “duty to bargain collectively” means
members of the latter. Their acceptance of the the performance of a mutual obligation to meet
benefits flowing from the CBA and their act of and convene promptly and expeditiously in good
paying the agency fees do not make them faith for the purpose of negotiating an agreement
members thereof. with respect to wages, hours of work and all other
terms and conditions of employment, including
4. CHECK-OFF OF AGENCY FEES. proposals for adjusting any grievances or
“Check-off” of agency fees is a process or questions arising under such agreement and
device whereby the employer, upon agreement executing a contract incorporating such
with the bargaining union, deducts agency fees agreements if requested by either party but such
from the wages of non-bargaining union members duty does not compel any party to agree to a
who avail of the benefits from the CBA and remits proposal or to make any concession.
them directly to the bargaining union.
The duty does not compel any party to
5. ACCRUAL OF RIGHT OF BARGAINING agree blindly to a proposal nor to make
UNION TO DEMAND CHECK-OFF OF AGENCY concession. While the law imposes on both the
FEES. employer and the bargaining union the mutual
The right of the bargaining union to duty to bargain collectively, the employer is not
demand check-off of agency fees accrues from under any legal obligation to initiate collective
the moment the non- bargaining union member bargaining negotiations.
accepts and receives the benefits from the CBA.
This is the operative fact that would trigger such 2. TWO (2) SITUATIONS CONTEMPLATED.
liability. The duty to bargain collectively involves
two (2) situations, namely:
6. NO INDIVIDUAL WRITTEN 1. Duty to bargain collectively in the absence of a
AUTHORIZATION BY NON-BARGAINING CBA under Article 251 of the Labor Code.
UNION MEMBERS REQUIRED. 2. Duty to bargain collectively when there is an
To effect the check-off of agency fees, no existing CBA under Article 253 of the Labor Code.
individual written authorization from the non-
bargaining union members who accept the DUTY TO BARGAIN COLLECTIVELY WHEN
benefits resulting from the CBA is necessary. THERE IS ABSENCE OF A CBA

7. EMPLOYER’S DUTY TO CHECK-OFF 1. HOW DUTY SHOULD BE DISCHARGED

AGENCY FEES. WHEN THERE IS NO CBA YET.
It is the duty of the employer to deduct or The duty to bargain collectively when
“check-off” the sum equivalent to the amount of there has yet been no CBA in the bargaining unit
agency fees from the non-bargaining union where the bargaining agent seeks to operate
members' wages for direct remittance to the should be complied with in the following order:
bargaining union.” First, in accordance with any agreement
or voluntary arrangement between the employer
8. MINORITY UNION CANNOT DEMAND FROM and the bargaining agent providing for a more
THE EMPLOYER TO GRANT IT THE RIGHT TO expeditious manner of collective bargaining; and
CHECK-OFF OF UNION DUES AND Secondly, in its absence, in accordance
ASSESSMENTS FROM THEIR MEMBERS. with the provisions of the Labor Code, referring to
The obligation on the part of the employer Article 250 thereof which lays down the procedure
to undertake the duty to check-off union dues and in collective bargaining.

58
 Ice Cream Plant, refused to submit any counter-
proposal to the CBA proposed by its employees’
DUTY TO BARGAIN COLLECTIVELY WHEN certified bargaining agent. The High Court ruled
THERE IS A CBA that the employer had thereby lost its right to
bargain the terms and conditions of the CBA.
1. CONCEPT. Thus, the CBA proposed by the union was
When there is a CBA, the duty to bargain imposed lock, stock and barrel on the erring
collectively shall mean that neither party shall company.
terminate nor modify such agreement during its The Kiok Loy case epitomizes the classic
lifetime. However, either party can serve a written case of negotiating a CBA in bad faith consisting
notice to terminate or modify the agreement at of the employer’s refusal to bargain with the
least sixty (60) days prior to its expiration date. It collective bargaining agent by ignoring all notices
shall be the duty of both parties to keep the status for negotiations and requests for counter-
quo and to continue in full force and effect the proposals. Such refusal to send a counter-
terms and conditions of the existing agreement proposal to the union and to bargain on the
during the 60-day period and/or until a new economic terms of the CBA constitutes an unfair
agreement is reached by the parties. labor practice under Article 248(g) of the Labor
Code.
2. FREEDOM PERIOD.
The last sixty (60) days of the 5-year OTHER CASES AFTER KIOK LOY.
lifetime of a CBA immediately prior to its  Divine Word University of Tacloban v.
expiration is called the “freedom period.” It is Secretary of Labor and Employment,
denominated as such because it is the only time Sept. 11, 1992.
when the law allows the parties to freely serve a  General Milling Corporation v. CA, Feb.
notice to terminate, alter or modify the existing 11, 2004.
CBA. It is also the time when the majority status
of the bargaining agent may be challenged by
another union by filing the appropriate petition for b. COLLECTIVE BARGAINING AGREEMENT
certification election. (CBA)
1. CBA.
3. AUTOMATIC RENEWAL CLAUSE. A “Collective Bargaining Agreement” or
a. Automatic renewal clause deemed incorporated “CBA” for short, refers to the negotiated contract
in all CBAs. between a duly recognized or certified exclusive
Pending the renewal of the CBA, the bargaining agent of workers and their employer,
parties are bound to keep the status quo and to concerning wages, hours of work and all other
treat the terms and conditions embodied therein terms and conditions of employment in the
still in full force and effect during the 60-day appropriate bargaining unit, including mandatory
freedom period and/or until a new agreement is provisions for grievances and arbitration
negotiated and ultimately concluded and reached machineries. It is executed not only upon the
by the parties. This principle is otherwise known request of the exclusive bargaining representative
as the “automatic renewal clause” which is but also by the employer.
mandated by law and therefore deemed
incorporated in all CBAs. 2. ESSENTIAL REQUISITES OF COLLECTIVE
BARGAINING.
For its part, the employer cannot Prior to any collective bargaining
discontinue the grant of the benefits embodied in negotiations between the employer and the
the CBA which just expired as it is duty-bound to bargaining union, the following requisites must
maintain the status quo by continuing to give the first be satisfied:
same benefits until a renewal thereof is reached 1. Employer-employee relationship must exist
by the parties. On the part of the union, it has to between the employer and the members of the
observe and continue to abide by its undertakings bargaining unit being represented by the
and commitments under the expired CBA until the bargaining agent;
same is renewed. 2. The bargaining agent must have the majority
support of the members of the bargaining unit
4. KIOK LOY DOCTRINE. established through the modes sanctioned by law;
This doctrine is based on the ruling In and
Kiok Loy v. NLRC, 1 where the petitioner, Sweden 3. A lawful demand to bargain is made in

59
accordance with law.

3. SOME PRINCIPLES ON CBA. E. UNFAIR LABOR PRACTICE (ULP)

 CBA is the law between the parties during its
lifetime and thus must be complied with in 1. NATURE, ASPECTS
good faith.
 Being the law between the parties, any 1. WHEN AN ACT CONSTITUTES ULP.
violation thereof can be subject of redress in At the outset, it must be clarified that not
court. all unfair acts constitute ULPs. While an act or
 CBA is not an ordinary contract as it is decision of an employer or a union may be unfair,
impressed with public interest. certainly not every unfair act or decision thereof
 Automatic Incorporation Clause – law is may constitute ULP as defined and enumerated
presumed part of the CBA. under the law.
 The benefits derived from the CBA and the The act complained of as ULP must have
law are separate and distinct from each a proximate and causal connection with any of the
other. following rights:
 Workers are allowed to negotiate wage 1. Exercise of the right to self-organization;
increases separately and distinctly from 2. Exercise of the right to collective bargaining; or
legislated wage increases. The parties may 3. Compliance with CBA.
validly agree in the CBA to reduce wages and Sans this connection, the unfair acts do not fall
benefits of employees provided such within the technical signification of the term “unfair
reduction does not go below the minimum labor practice.”
standards.
 Ratification of the CBA by majority of all the 2. THE ONLY ULP WHICH MAY OR MAY NOT
workers in the bargaining unit makes the BE RELATED TO THE EXERCISE OF THE
same binding on all employees therein. RIGHT TO SELF-ORGANIZATION AND
 Employees entitled to CBA benefits. The COLLECTIVE BARGAINING.
following are entitled to the benefits of the The only ULP which is the exception as it
CBA: may or may not relate to the exercise of the right
(1) Members of the bargaining union; to self-organization and collective bargaining is
(2) Non-members of the bargaining union the act described under Article 248 [f], i.e., to
but are members of the bargaining unit; dismiss, discharge or otherwise prejudice or
(3) Members of the minority union/s who discriminate against an employee for having given
paid agency fees to the bargaining union; or being about to give testimony under the Labor
and Code.
(4) Employees hired after the expiration of
the CBA. 3. LABOR CODE PROVISIONS ON ULP.
 Pendency of a petition for cancellation of Under the Labor Code, there are only five
union registration is not a prejudicial question (5) provisions related to ULP, to wit:
before CBA negotiation may proceed. 1. Article 258 [247] which describes the concept
 CBA should be construed liberally. If the of ULPs and prescribes the procedure for their
terms of a CBA are clear and there is no doubt as prosecution;
to the intention of the contracting parties, the 2. Article 259 [248] which enumerates the ULPs
literal meaning of its stipulation shall prevail. that may be committed by employers;
3. Article 260 [249] which enumerates the ULPs
1. MANDATORY PROVISIONS OF CBA that may be committed by labor organizations;
4. Article 274 [261] which considers violations of
1. MANDATORY STIPULATIONS OF THE CBA. the CBA as no longer ULPs unless the same are
The Syllabus mentions 4 provisions that gross in character which means flagrant and/or
are mandatorily required to be stated in the CBA, malicious refusal to comply with the economic
to wit: provisions thereof.
1. Grievance Procedure; 5. Article 278(c) [263(c)] which refers to union-
2. Voluntary Arbitration; busting, a form of ULP, involving the dismissal
3. No Strike-No Lockout Clause; and from employment of union officers duly elected in
4. Labor-Management Council (LMC). accordance with the union constitution and by-
If these provisions are not reflected in the CBA, its laws, where the existence of the union is
registration will be denied by the BLR. threatened thereby.

60
 employees of their right to self-organize may fall
4. PARTIES WHO/WHICH MAY COMMIT ULP. within their meaning and coverage. According to
A ULP may be committed by an employer the Supreme Court in Insular Life Assurance Co.,
or by a labor organization. Article 259 [248] Ltd., Employees Association-NATU v. Insular Life
describes the ULPs that may be committed by an Assurance Co., Ltd.,1 the test of whether an
employer; while Article 260 [249] enumerates employer has interfered with or restrained or
those which may be committed by a labor coerced employees within the meaning of the law
organization. is whether the employer has engaged in conduct
On the part of the employer, only the which may reasonably tend to interfere with the
officers and agents of corporations, associations free exercise of the employees’ rights. It is not
or partnerships who have actually participated in necessary that there be direct evidence that any
or authorized or ratified ULPs are criminally liable. employee was in fact intimidated or coerced by
On the part of the union, only the officers, the statements or threats of the employer if there
members of governing boards, representatives or is a reasonable inference that the anti-union
agents or members of labor associations or conduct of the employer does have an adverse
organizations who have actually participated in or effect on the exercise of the right to self-
authorized or ratified the ULPs are criminally organization and collective bargaining.
liable.
2. TOTALITY OF CONDUCT DOCTRINE.
5. ELEMENTS OF ULP. In ascertaining whether the act of the
1. There should exist an employer-employee employer constitutes interference with, restraint or
relationship between the offended party and the coercion of the employees’ exercise of their right
offender; and to self-organization and collective bargaining, the
2. The act complained of must be expressly “totality of conduct doctrine” may be applied.
mentioned and defined in the Labor Code as an The totality of conduct doctrine means
unfair labor practice. that expressions of opinion by an employer,
Absent one of the elements aforementioned will though innocent in themselves, may be held to
not make the act an unfair labor practice. constitute an unfair labor practice because of the
circumstances under which they were uttered, the
6. ASPECTS OF ULP. history of the particular employer’s labor relations
Under Article 258 [247], a ULP has two (2) or anti-union bias or because of their connection
aspects, namely: with an established collateral plan of coercion or
1. Civil aspect; and interference. An expression which may be
2. Criminal aspect. permissibly uttered by one employer, might, in the
The civil aspect of an unfair labor practice mouth of a more hostile employer, be deemed
includes claims for actual, moral and exemplary improper and consequently actionable as an
damages, attorney’s fees and other affirmative unfair labor practice. The past conduct of the
reliefs. Generally, these civil claims should be employer and like considerations, coupled with an
asserted in the labor case before the Labor intimate connection between the employer’s
Arbiters who have original and exclusive action and the union affiliation or activities of the
jurisdiction over unfair labor practices. The particular employee or employees taken as a
criminal aspect, on the other hand, can only be whole, may raise a suspicion as to the motivation
asserted before the regular court. for the employer’s conduct. The failure of the
employer to ascribe a valid reason therefor may
justify an inference that his unexplained conduct
2. ULP BY EMPLOYERS in respect of the particular employee or
employees was inspired by the latter’s union
I. INTERFERENCE WITH, RESTRAINT OR membership and activities.
COERCION OF EMPLOYEES IN THE In General Milling, the Supreme Court
EXERCISE OF THEIR RIGHT TO SELF- considered the act of the employer in presenting
ORGANIZATION the letters from February to June 1993, by 13
1. TEST OF INTERFERENCE, RESTRAINT OR union members signifying their resignation from
COERCION. the union clearly indicative of the employer’s
The terms “interfere,” “restrain” and pressure on its employees. The records show that
“coerce” are very broad that any act of the employer presented these letters to prove that
management that may reasonably tend to have the union no longer enjoyed the support of the
an influence or effect on the exercise by the workers. The fact that the resignations of the

61
union members occurred during the pendency of condition of employment that they shall not join or
the case before the Labor Arbiter shows the belong to a labor organization, or attempt to
employer’s desperate attempt to cast doubt on the organize one during their period of employment or
legitimate status of the union. The ill-timed letters that they shall withdraw therefrom in case they
of resignation from the union members indicate are already members of a labor organization.
that the employer had interfered with the right of
its employees to self-organization. Because of 2. COMMON STIPULATIONS IN A YELLOW
such act, the employer was declared guilty of DOG CONTRACT.
ULP. A typical yellow dog contract embodies
the following stipulations:
3. INTERFERENCE IN THE EMPLOYEE’S (1) A representation by the employee that he is
RIGHT TO SELF-ORGANIZATION. not a member of a labor organization;
a. Interference is always ULP. (2) A promise by the employee that he will not join
The judicial dictum is that any act of a union; and
interference by the employer in the exercise by (3) A promise by the employee that upon joining a
employees of their right to self-organization labor organization, he will quit his employment.
constitutes an unfair labor practice. This is the
very core of ULP. The act of the employer in imposing such
In Hacienda Fatima v. National Federation a condition constitutes unfair labor practice under
of Sugarcane Workers – Food and General Article 248(b) of the Labor Code. Such stipulation
Trade,3 the Supreme Court upheld the factual in the contract is null and void.
findings of the NLRC and the Court of Appeals
that from the employer’s refusal to bargain to its 3. ORIGIN OF THE TERM “YELLOW DOG.”
acts of economic inducements resulting in the The term “yellow dog” traces its roots to
promotion of those who withdrew from the union, certain commentaries made by the labor press in
the use of armed guards to prevent the organizers the United States sometime in 1921. An example
to come in, and the dismissal of union officials is the following editor’s comment of the United
and members, one cannot but conclude that the Mine Workers' Journal: “This agreement has been
employer did not want a union in its hacienda - a well named. It is yellow dog for sure. It reduces to
clear interference in the right of the workers to the level of a yellow dog any man that signs it, for
self- organization. Hence, the employer was held he signs away every right he possesses under the
guilty of unfair labor practice. Constitution and laws of the land and makes
himself the truckling, helpless slave of the
It was likewise held in Insular Life1 that it employer.”2 Simply put, it is so-called “yellow dog”
is an act of interference for the employer to send because the employees were deemed to have to
individual letters to all employees notifying them cower before their "masters" to get a job.3
to return to work at a time specified therein,
otherwise new employees would be engaged to
perform their jobs. Individual solicitation of the
employees or visiting their homes, with the III. CONTRACTING OUT OF SERVICES AND
employer or his representative urging the FUNCTIONS
employees to cease their union activities or cease
striking, constitutes ULP. All the above- detailed 1. GENERAL RULE.
activities are ULPs because they tend to As a general rule, the act of an employer
undermine the concerted activity of the in having work or certain services or functions
employees, an activity to which they are entitled being performed by union members contracted
free from the employer's molestation. out is not per se an unfair labor practice. This is
so because contracting-out of a job, work or
b. Formation of a union is never a valid ground to service is clearly an exercise by the employer of
dismiss. its business judgment and its inherent
c. It is ULP to dismiss a union officer or an management rights and prerogatives. Hiring of
employee for his union activities. workers is within the employer’s inherent freedom
to regulate its business and is a valid exercise of
its management prerogative subject only to
II. YELLOW DOG CONTRACT special laws and agreements on the matter and
1. WHAT IS A YELLOW DOG CONTRACT? the fair standards of justice. The employer cannot
It is one which exacts from workers as a be denied the faculty of promoting efficiency and

62
attaining economy by a study of what units are
essential for its operation. It has the ultimate right
to determine whether services should be VI. FILING OF CHARGES OR GIVING OF
performed by its personnel or contracted to TESTIMONY
outside agencies.
1. CONCEPT.
2. WHEN CONTRACTING-OUT BECOMES ULP. Under paragraph [f] of Article 259 [248] of
It is only when the contracting out of a job, the Labor Code, it is an unfair labor practice for an
work or service being performed by union employer to dismiss, discharge or otherwise
members will interfere with, restrain or coerce prejudice or discriminate against an employee for
employees in the exercise of their right to self- having given or being about to give testimony
organization that it shall constitute an unfair labor under the Labor Code.
practice. Thus, it is not unfair labor practice to
contract out work for reasons of business decline, 2. THE ONLY ULP NOT REQUIRED TO BE
inadequacy of facilities and equipment, reduction RELATED TO EMPLOYEE’S EXERCISE OF
of cost and similar reasonable grounds. THE RIGHT TO SELF-ORGANIZATION AND
COLLECTIVE BARGAINING.
It must be underscored that Article 259(f)
IV. COMPANY UNION [248 (f)] is the only unfair labor practice that need
not be related to the exercise by the employees of
1. COMPANY INITIATED, DOMINATED OR their right to self-organization and collective
ASSISTED UNION. bargaining.
Paragraph [d] of Article 259 [248] In Itogon-Suyoc Mines, Inc. v. Baldo,3 it
considers it an unfair labor practice to initiate, was declared that an unfair labor practice was
dominate, assist or otherwise interfere with the committed by the employer when it dismissed the
formation or administration of any labor worker who had testified in the hearing of a
organization, including the giving of financial or certification election case despite its prior request
other support to it or its organizers or supporters. for the employee not to testify in the said
Such union is called “company union” as its proceeding accompanied with a promise of being
formation, function or administration has been reinstated if he followed said request.
assisted by any act defined as unfair labor
practice under the Labor Code.
VII. CBA-RELATED ULPs

V. DISCRIMINATION 1. THREE (3) CBA-RELATED ULPs.

Article 259 [248] enunciates three (3)
1. COVERAGE OF PROHIBITION. CBA-related unfair labor practices, to wit:
What is prohibited as unfair labor practice 1. To violate the duty to bargain collectively as
under the law is to discriminate in regard to prescribed in the Labor Code.
wages, hours of work, and other terms and 2. To pay negotiation or attorney’s fees to the
conditions of employment in order to encourage union or its officers or agents as part of the
or discourage membership in any labor settlement of any issue in collective bargaining or
organization. any other dispute.
3. To violate a collective bargaining agreement.
4. MATERIALITY OF PURPOSE OF ALLEGED
DISCRIMINATORY ACT.
In Manila Pencil Co., Inc. v. CIR,1 it was VII-A. PAYMENT OF NEGOTIATION AND
ruled that even assuming that business conditions ATTORNEY’S FEES
justify the dismissal of employees, it is a ULP of
employer to dismiss permanently only union 1. WHEN PAYMENT CONSIDERED ULP.
members and not non- unionists. Article 259 (h) [248(h)] of the Labor Code
In Manila Railroad Co. v. Kapisanan ng mga considers as an unfair labor practice the act of the
Manggagawa sa Manila Railroad Co.,2 the non- employer in paying negotiation fees or attorney’s
regularization of long-time employees because of fees to the union or its officers or agents as part of
their affiliation with the union while new the settlement of any issue in collective
employees were immediately regularized was bargaining or any other dispute.
declared an act of discrimination.

63
 a labor organization, its officers, agents or
VII-B. VIOLATION OF THE CBA representatives:
(1) To cause or attempt to cause an employer to
1. CORRELATION. discriminate against an employee, including
Article 259 (i) [248(i)] of the Labor Code discrimination against an employee with respect
should be read in relation to Article 261 thereof. to whom membership in such organization has
Under Article 261, as amended, violations of a been denied.
CBA, except those which are gross in character, (2) To terminate an employee’s union
shall no longer be treated as an unfair labor membership on any ground other than the usual
practice and shall be resolved as grievances terms and conditions under which membership or
under the CBA. Gross violations of CBA shall continuation of membership is made available to
mean flagrant and/or malicious refusal to comply other members.
with the economic provisions of such agreement.
III. DUTY OF UNION TO BARGAIN
2. CASE LAW. COLLECTIVELY
The act of the employer in refusing to implement
the negotiated wage increase stipulated in the 1. CONCEPT.
CBA, which increase is intended to be distinct and Under Article 260(c) [249 (c)], it is ULP for
separate from any other benefits or privileges that a duly certified sole and exclusive bargaining
may be forthcoming to the employees, is an unfair union, its officers, agents or representatives to
labor practice. refuse or violate the duty to bargain collectively
Refusal for a considerable number of years to with the employer. This is the counterpart
give salary adjustments according to the improved provision of Article 259(g) [248 (g)] respecting the
salary scales in the CBA is an unfair labor violation by the employer of its duty to bargain
practice. collectively.

2. PURPOSE.
3. ULP OF LABOR ORGANIZATIONS The obvious purpose of the law is to
ensure that the union will negotiate with
I. RESTRAINT AND COERCION OF management in good faith and for the purpose of
EMPLOYEES IN THE EXERCISE OF THEIR concluding a mutually beneficial agreement
RIGHT TO SELF-ORGANIZATION regarding the terms and conditions of their
employment relationship.
1. UNION MAY INTERFERE WITH BUT NOT
RESTRAIN OR COERCE EMPLOYEES IN THE
EXERCISE OF THEIR RIGHT TO SELF- IV. FEATHERBEDDING DOCTRINE
ORGANIZE. 1. CONCEPT.
Under Article 260(a) [249 (a)], it is ULP for Article 260(d) [249 (d)] is the
a labor organization, its officers, agents or “featherbedding” provision in the Labor Code.
representatives to restrain or coerce employees in Patterned after a similar provision in the Taft-
the exercise of their right to self-organization. Hartley Act,1 “featherbedding” or “make-work”
Compared to similar provision of Article 248(a) of refers to the practice, caused and induced by a
the Labor Code, notably lacking is the use of the union, of hiring more workers than are needed to
word “interfere” in the exercise of the employees’ perform a given work, job or task or to adopt work
right to self- organize. The significance in the procedures which is evidently senseless,
omission of this term lies in the grant of wasteful, inefficient and without legitimate
unrestricted license to the labor organization, its justifications since it is meant purely for the
officers, agents or representatives to interfere with purpose of employing additional workers than are
the exercise by the employees of their right to necessary.
self-organization. Such interference is not This is resorted to by the union as a
unlawful since without it, no labor organization response to the laying-off of workers occasioned
can be formed as the act of recruiting and by their obsolescence because of the introduction
convincing the employees is definitely an act of of machines, robots or new and innovative
interference. technological changes and improvements in the
workplace or as required by minimum health and
II. DISCRIMINATION safety standards, among other reasons. Its
Under Article 260(b) [249 (b)], it is ULP for purpose is to unduly secure the jobs of the

64
workers. 259(i) [248 (i)] regarding the employer’s act of
Because of these lay-offs, the unions are violating a CBA. But it must be noted that under
constrained to resort to some featherbedding Article 261 of the Labor Code, violation of the
practices. Accordingly, they usually request that CBA is generally considered merely a grievable
the technological changes be introduced issue. It becomes an unfair labor practice only if
gradually, or not at all, or that a minimum number the violation is gross in character which means
of personnel be retained despite such changes. that there is flagrant and/or malicious refusal to
They resort to some ways and methods of comply with the economic (as distinguished from
retaining workers even though there may be little non-economic) stipulations in the CBA. This
work left for them to do and perform. It therefore principle applies not only to the employer but to
unnecessarily maintains or increases the number the labor organization as well.
of employees used or the amount of time
consumed to work on a specific job, work or
undertaking. By so increasing the demand for VII. CRIMINAL LIABILITY FOR ULPs OF
workers, featherbedding obviously keeps wages LABOR ORGANIZATION
higher.
1. PERSONS LIABLE.
2. REQUISITES. Article 260 [249] is explicit in its provision
The requisites for featherbedding are as on who should be held liable for ULPs committed
follows: by labor organizations. It states that only the
(1) The labor organization, its officers, agents or officers, members of governing boards,
representatives have caused or attempted to representatives or agents or members of labor
cause an employer either: associations or organizations who have actually
(a) to pay or agree to pay any money, participated in, authorized or ratified unfair labor
including the demand for fee for union practices shall be held criminally liable.
negotiations; or
(b) to deliver or agree to deliver any things
of value; F. PEACEFUL CONCERTED ACTIVITIES
(2) Such demand for payment of money or A. FORMS OF CONCERTED ACTIVITIES
delivery of things of value is in the nature of an
exaction; and 1. FORMS OF CONCERTED ACTIVITIES.
(3) The services contemplated in exchange for the There are three (3) forms of concerted
exaction are not actually performed or will not be activities, namely:
performed. 1. Strike;
2. Picketing; and
3. Lockout.
V. DEMAND OR ACCEPTANCE OF
NEGOTIATION FEES OR ATTORNEY’S FEES 1. BY LABOR ORGANIZATION
1. Strike; and
1. CONCEPT. 2. Picketing.
Under Article 260(e) [249 (e)], it is ULP for 1. STRIKE.
a labor organization, its officers, agents or “Strike” means any temporary stoppage of
representatives to ask for or accept negotiation work by the concerted action of the employees as
fees or attorney’s fees from employers as part of a result of an
the settlement of any issue in collective industrial or labor dispute.
bargaining or any other dispute.
2. PICKETING.
VI. VIOLATION OF THE CBA “Picketing” is the act of workers in
peacefully marching to and fro before an
1. CONCEPT. establishment involved in a labor dispute
Under Article 260(f) [249 (f)], it is ULP for a labor generally accompanied by the carrying and
organization, its officers, agents or display of signs, placards and banners intended to
representatives to violate a CBA. inform the public about the dispute.

2. COUNTERPART PROVISION. 2. BY EMPLOYER

This is the counterpart provision of Article

65
1. LOCKOUT. Strike); and/or
“Lockout” means the temporary refusal by 2. Unfair labor practice (Political Strike).
an employer to furnish work as a result of an
industrial or labor dispute. A strike not based on any of these two
It consists of the following: grounds is illegal.
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by 2. SOME PRINCIPLES ON THE FIRST
the employer. REQUISITE.
3. The employer’s act of excluding employees  Violation of CBA, except when gross, is
who are union members. not an unfair labor practice, hence, may
not be cited as ground for a valid strike.
a. REQUISITES FOR A VALID STRIKE Ordinary violation of a CBA is no longer
1. PROCEDURAL BUT MANDATORY treated as an unfair labor practice but as a
REQUISITES FOR A VALID STRIKE. mere grievance which should be
A strike, in order to be valid and legal, processed through the grievance
must conform to the following procedural machinery and voluntary arbitration.
requisites:  Inter-union or intra-union dispute is not a
1st requisite - It must be based on a valid ground.
valid and factual ground;  Violation of labor standards is not a valid
2nd requisite - A notice of strike must be ground.
filed with the NCMB-DOLE;  Wage distortion is not a valid ground.
3rd requisite - A notice must be served to
the NCMB-DOLE at least twenty-four (24) hours II. SECOND REQUISITE: FILING OF A NOTICE
prior to the taking of the strike vote by secret OF STRIKE
balloting, informing said office of the decision to
conduct a strike vote, and the date, place, and 1. NOTICE OF STRIKE.
time thereof; No labor organization shall declare a
4th requisite - A strike vote must be strike without first having filed a notice of strike.
taken where a majority of the members of the
union obtained by secret ballot in a meeting called III. THIRD REQUISITE: SERVICE OF A 24-
for the purpose, must approve it; HOUR PRIOR NOTICE
5th requisite - A strike vote report should In Capitol Medical Center, Inc. v. NLRC, it
be submitted to the NCMB-DOLE at least seven was imposed as additional requisite that a 24-
(7) days before the intended date of the strike; hour notice must be served to the NCMB-DOLE
6th requisite - Except in cases of union- prior to the taking of the strike vote by secret
busting, the cooling-off period of 15 days, in case balloting, informing it of the union’s decision to
of unfair labor practices of the employer, or 30 conduct a strike vote as well as the date, place,
days, in case of collective bargaining deadlock, and time thereof.
should be fully observed; and
7th requisite - The 7-day waiting IV. FOURTH REQUISITE: CONDUCT OF A
period/strike ban reckoned after the submission of STRIKE VOTE
the strike vote report to the NCMB-DOLE should
also be fully observed in all cases. 1. MAJORITY APPROVAL OF THE STRIKE.
No labor organization shall declare a
All the foregoing requisites, although strike without the necessary strike vote first
procedural in nature, are mandatory and failure of having been obtained and reported to the NCMB-
the union to comply with any of them would DOLE. A decision to declare a strike must be
render the strike illegal. approved by a majority of the total union
membership in the bargaining unit concerned,
obtained by secret ballot in meetings or referenda
I. FIRST REQUISITE: EXISTENCE OF VALID called for that purpose. This process is called
AND FACTUAL GROUND/S “strike vote balloting.”

1. VALID GROUNDS. A STRIKE WITHOUT THE MAJORITY

The law recognizes only 2 grounds in SUPPORT OF THE UNION MEMBERS IS
support of a valid strike, viz.: CALLED A “WILDCAT STRIKE.”
1. Collective bargaining deadlock (Economic

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2. PURPOSE. branch of the NCMB.
The purpose of a strike vote is to ensure In cases of union-busting, only the 15-day
that the decision to strike broadly rests with the cooling-off period need not be observed; all the
majority of the union members in general and not other requisites must be fully complied with.
with a mere minority.
3. RECKONING OF THE COOLING-OFF
3. DURATION OF THE VALIDITY OF THE PERIODS.
MAJORITY APPROVAL OF A STRIKE. The start of the cooling-off periods should
The majority decision to stage a strike is be reckoned from the time the notice of strike is
valid for the duration of the dispute based on filed with the NCMB-DOLE, a copy thereof having
substantially the same grounds considered when been served on the other party concerned.
the strike vote was taken.
4. PURPOSE OF THE COOLING-OFF
V. FIFTH REQUISITE: SUBMISSION OF THE PERIODS.
STRIKE VOTE TO NCMB-DOLE The purpose of the cooling-off periods is
to provide an opportunity for mediation and
1. PURPOSE FOR REQUIRING A STRIKE conciliation of the dispute by the NCMB-DOLE
VOTE REPORT. with the end in view of amicably settling it.
The evident intention of the law in
mandatorily requiring the submission of the strike VII. SEVENTH REQUISITE: 7-DAY WAITING
vote report is to afford the NCMB of opportunity to PERIOD OR STRIKE BAN
verify the truth and veracity of the majority vote by
the union members in support of the intended 1. PURPOSE OF THE 7-DAY WAITING PERIOD
strike OR STRIKE BAN.
. The seven (7) day waiting period is
2. WHEN TO SUBMIT THE STRIKE VOTE intended to give the NCMB-DOLE an opportunity
REPORT. to verify whether the projected strike really carries
The strike vote report should be submitted the approval of the majority of the union
to the NCMB-DOLE at least seven (7) days before members.
the actual staging of the intended strike, subject to
the observance of the cooling-off periods provided 2. WAITING PERIOD/STRIKE BAN VS.
under the law. COOLING-OFF PERIOD.
The 7-day waiting period or strike ban is a
VI. SIXTH REQUISITE: OBSERVANCE OF THE distinct and separate requirement from the
COOLING-OFF PERIOD cooling-off period prescribed by law. The latter
cannot be substituted for the former and vice-
1. GENERAL RULE. versa.
The cooling-off periods provided under the The cooling-off period is counted from the
law before the intended date of the actual time of the filing of the notice of strike. The 7-day
mounting of the strike are as follows: waiting period/strike ban, on the other hand, is
1. In case of bargaining deadlock, the reckoned from the time the strike vote report is
cooling-off period is thirty (30) days from the filing submitted to the NCMB- DOLE.
of the notice of strike; or Consequently, a strike is illegal for failure
2. In case of unfair labor practice, the to comply with the prescribed mandatory cooling-
cooling-off period is fifteen (15) days from the off period and the 7-day waiting period/strike ban
filing of the notice of strike. after the submission of the report on the strike
vote.
2. EXCEPTION: IN CASE OF UNION-BUSTING.
In case of dismissal from employment of 3. BOTH MUST BE COMPLIED WITH
union officers (not ordinary members) duly elected SEPARATELY AND DISTINCTLY FROM EACH
in accordance with the union constitution and by- OTHER.
laws which may constitute union-busting because The requirements of cooling-off period
the existence of the union is threatened by reason and 7-day waiting period/strike ban must both be
of such dismissal, the 15-day cooling-off period complied with. The labor union may take the strike
does not apply and the union may take action vote and report the same to the NCMB-DOLE
immediately after the strike vote is conducted and within the statutory cooling-off period. In this case,
the results thereof duly submitted to the regional the 7-day waiting period/strike ban should be

67
counted from the day following the expiration of IN STRIKE.
the cooling- off period. A contrary view would With a slight, insignificant variation, the procedural
certainly defeat and render nugatory the salutary but mandatory requisites for a valid strike
purposes behind the distinct requirements of discussed above are substantially similar to those
cooling-off period and the waiting period/strike applicable for valid lockout. For purposes of ease
ban. and clarity, the same are presented as follows:
The NCMB Primer on Strike, Picketing  1st requisite - It must be based on a valid and
and Lockout,1 issued by the NCMB, the agency of factual ground;
government directly tasked with the  2nd requisite - A notice of lockout must be
implementation and enforcement of this particular filed with the NCMB-DOLE;
legal provision and requirement, is very clear on  3rd requisite - A notice must be served to the
this point, thus: NCMB-DOLE at least twenty-four (24) hours
“In the event the result of the prior to the taking of the lockout vote by
strike/lockout vote ballot is filed within the cooling- secret balloting, informing said office of the
off period, the 7-day requirement shall be counted decision to conduct a lockout vote, and the
from the day following the expiration of the date, place, and time thereof;
cooling-off period.”2  4th requisite - A lockout vote must be taken
In other words, the seven (7) days should be where a majority of the members of the
added to the cooling-off period of fifteen (15) Board of Directors of the corporation or
days, in case of unfair labor practice, or thirty (30) association or of the partners in a partnership
days, in case of collective bargaining deadlock obtained by secret ballot in a meeting called
and it is only after the lapse of the total number of for the purpose, must approve it;
days after adding the two (2) periods that the  5th requisite - A lockout vote report should
strike/lockout may be lawfully and validly staged. be submitted to the NCMB-DOLE at least
Example: In a case where the notice of seven (7) days before the intended date of
strike grounded on ULP is filed on March 1, 2018, the lockout;
and the strike vote is taken within the cooling-off  6th requisite - The cooling-off period of 15
period, say, on March 5, 2018 and the strike vote days, in case of unfair labor practices of the
report showing majority support for the intended labor organization, or 30 days, in case of
strike is submitted to the NCMB-DOLE the collective bargaining deadlock, should be
following day, March 6, 2018, the question is fully observed; and
when can the union legally stage the strike?  7th requisite - The 7-day waiting
Following the above principle, the answer period/lockout ban reckoned after the
obviously is on March 24, 2018 or any day submission of the lockout vote report to the
thereafter. This is so because the 15-day cooling- NCMB-DOLE should also be fully observed in
off period for ULP expires on March 16 and all cases.
adding the 7-day strike ban which “should be
counted from the day following the expiration of
the cooling-off period,” the 7th day would be on
March 23, 2018. Obviously, the strike cannot be
conducted on the 7th day but rather after the c. REQUISITES FOR LAWFUL PICKETING
lapse of the 7-day period; hence, it is only on
MARCH 24, 2018 onwards that the union may 1. THE REQUISITES FOR A VALID STRIKE
lawfully conduct the strike. ARE NOT APPLICABLE TO PICKETING.
The seven (7) requisites for a valid strike
4. SOME PRINCIPLES ON COOLING-OFF discussed above do not apply to picketing.
PERIOD AND 7-DAY WAITING PERIOD.
 Deficiency of even one (1) day of the 2. REQUISITES FOR LAWFUL PICKETING.
cooling-off period and 7-day strike ban is The most singular requirement to make
fatal. picketing valid and legal is that it should be
 One-day strike without complying with the peacefully conducted.
7-day strike ban is illegal. Based on the foregoing provision, the
requisites may be summed up as follows:
1. The picket should be peacefully carried out;
b. REQUISITES FOR A VALID LOCKOUT 2. There should be no act of violence, coercion or
intimidation attendant thereto;
1. SUBSTANTIALLY SIMILAR REQUISITES AS 3. The ingress to (entrance) or egress from (exit)

68
the company premises should not be obstructed; Union v. Coca-Cola Bottlers Phils., Inc.2 -
and Petitioners contend that what they conducted was
4. Public thoroughfares should not be impeded. a mere picketing and not a strike. In disagreeing
to this contention, the High Court emphasized that
3. RIGHT TO PICKET IS PROTECTED BY THE it is not an issue in this case that there was a
CONSTITUTION AND THE LAW. labor dispute between the parties as petitioners
Unlike a strike which is guaranteed under had notified the respondent of their intention to
the Constitutional provision on the right of workers stage a strike, and not merely to picket.
to conduct peaceful concerted activities under Petitioners’ insistence to stage a strike is evident
Section 3, Article XIII thereof, the right to picket is in the fact that an amended notice of strike was
guaranteed under the freedom of speech and of filed even as respondent moved to dismiss the
expression and to peaceably assemble to air first notice. The basic elements of a strike are
grievances under Section 4, Article III (Bill of present in this case: 106 members of petitioner
Rights) thereof. Union, whose respective applications for leave of
absence on September 21, 1999 were
4. EFFECT OF THE USE OF FOUL LANGUAGE disapproved, opted not to report for work on said
DURING THE CONDUCT OF THE PICKET. date, and gathered in front of the company
In the event the picketers employ premises to hold a mass protest action.
discourteous and impolite language in their picket, Petitioners deliberately absented themselves and
such may not result in, or give rise to, libel or instead wore red ribbons and carried placards
action for damages. with slogans such as: “YES KAMI SA STRIKE,”
“PROTESTA KAMI,” “SAHOD, KARAPATAN NG
5. PICKETING VS. STRIKE. MANGGAGAWA IPAGLABAN,” “CBA-’WAG
(a) To strike is to withhold or to stop work by the BABOYIN,”
concerted action of employees as a result of an
industrial or labor dispute. The work stoppage “STOP UNION BUSTING.” They marched
may be accompanied by picketing by the striking to and fro in front of the company’s premises
employees outside of the company compound. during working hours. Thus, petitioners engaged
(b) While a strike focuses on stoppage of work, in a concerted activity which already affected the
picketing focuses on publicizing the labor dispute company’s operations. The mass concerted
and its incidents to inform the public of what is activity obviously constitutes a strike. Moreover,
happening in the company being picketed. the bare fact that petitioners were given a Mayor’s
(c) A picket simply means to march to and fro in permit is not conclusive evidence that their
front of the employer’s premises, usually action/activity did not amount to a strike. The
accompanied by the display of placards and other Mayor’s description of what activities petitioners
signs making known the facts involved in a labor were allowed to conduct is inconsequential. To
dispute. It is but one strike activity separate and repeat, what is definitive of whether the action
different from the actual stoppage of work. staged by petitioners is a strike and not merely a
picket is the totality of the circumstances
Phimco Industries, Inc. v. Phimco surrounding the situation.
Industries Labor Association (PILA).1 - While the
right of employees to publicize their dispute falls Petitioner union in the 2011 case of Leyte
within the protection of freedom of expression and Geothermal Power Progressive Employees
the right to peaceably assemble to air grievances, Union-ALU-TUCP v. Philippine National Oil
these rights are by no means absolute. Protected Company – Energy Development Corporation,3
picketing does not extend to blocking ingress to contends that there was no stoppage of work;
and egress from the company premises. That the hence, they did not strike. Euphemistically,
picket was moving, was peaceful and was not petitioner union avers that it “only engaged in
attended by actual violence may not free it from picketing,” and maintains that “without any work
taints of illegality if the picket effectively blocked stoppage, [its officers and members] only
entry to and exit from the company premises. engaged in xxx protest activity.” The Supreme
Court, however, ruled that it was a strike and not
6. WHEN PICKET CONSIDERED A STRIKE. picketing or protest activity that petitioner union
In distinguishing between a picket and a staged. It found the following circumstances in
strike, the totality of the circumstances obtaining support of such finding:
in a case should be taken into account. (1) Petitioner union filed a Notice of Strike on
Santa Rosa Coca-Cola Plant Employees December 28, 1998 with the DOLE grounded on

69
respondent’s purported unfair labor practices, i.e., d) Legislated wage orders (wage
“refusal to bargain collectively, union busting and distortion).
mass termination.” On even date, petitioner Union 4) Without first having bargained collectively.
declared and staged a strike. 5) In violation of the “no strike, no lockout” clause
(2) The DOLE Secretary intervened and issued a in the CBA.
Return-to-Work Order dated January 4, 1999, 6) Without submitting the issues to the grievance
certifying the labor dispute to the NLRC for machinery or voluntary arbitration or failing to
compulsory arbitration. The Order indicated the exhaust the steps provided therein.
following facts: (1) filing of the notice of strike; (2) 7) While conciliation and mediation proceeding is
staging of the strike and taking control over on-going at the NCMB.
respondent’s facilities of its Leyte Geothermal 8) Based on issues already brought to voluntary
Project on the same day petitioner union filed the or compulsory arbitration.
notice of strike; (3) attempts by the NCMB to forge 9) During the pendency of a case involving the
a mutually acceptable solution proved futile; (4) in same ground/s cited in the notice of strike.
the meantime, the strike continued with no 10) In defiance of an assumption or certification or
settlement in sight placing in jeopardy the supply return-to-work order.
of much needed power supply in the Luzon and 11) In violation of a temporary restraining order or
Visayas grids. an injunction order.
(3) Petitioner union itself, in its pleadings, used 12) After the conversion of the notice of strike into
the word “strike.” a preventive mediation case.
(4) Petitioner union’s asseverations are belied by 13) Against the prohibition by law.
the factual findings of the NLRC, as affirmed by 14) By a minority union.
the CA thus: “The failure to comply with the 15) By an illegitimate union.
mandatory requisites for the conduct of strike is 16) By dismissed employees.
both admitted and clearly shown on record. 17) In violation of the company code of conduct
Hence, it is undisputed that no strike vote was which prohibits “inciting or participating in riots,
conducted; likewise, the cooling-off period was disorders, alleged strikes or concerted actions
not observed and that the 7-day strike ban after detrimental to [Toyota’s] interest,” The penalty for
the submission of the strike vote was not which is dismissal.
complied with since there was no strike vote 18) As protest rallies in front of government
taken.” offices such as in the following cases:
Toyota Motor Phils. Corp. Workers
In fine, petitioner union’s bare contention Association [TMPCWA] v. NLRC,1 where the
that it did not hold a strike cannot trump the Supreme Court ruled that the protest rallies
factual findings of the NLRC that petitioner union staged by the employees from February 21 to 23,
indeed struck against respondent. In fact, and 2001 in front of the offices of the Bureau of Labor
more importantly, petitioner union failed to comply Relations (BLR) and the DOLE Secretary
with the requirements set by law prior to holding a constitute illegal strike and not legitimate exercise
strike. of their right to peaceably assemble and petition
the government for redress of grievances. It was
d. WHEN IS A STRIKE CONSIDERED illegal for having been undertaken without
ILLEGAL? satisfying the mandatory pre-requisites for a valid
A strike is illegal if it is declared and strike under Article 263 of the Labor Code.
staged: The ruling in Toyota was cited in
1) Without complying with the procedural but Solidbank Corporation v. Gamier, 2 as basis in
mandatory requisites (See 7 requisites above). declaring the protest action of the employees of
2) For unlawful purpose such as to compel the petitioner Solidbank which was staged in front of
dismissal of an employee or to force recognition the Office of the DOLE Secretary in Intramuros,
of the union or for trivial and puerile purpose or to Manila, as constitutive of illegal strike since it
circumvent contracts and judicial orders. paralyzed the operations of the bank. The protest
3) Based on non-strikeable or invalid grounds action in this case was conducted because of the
such as: CBA deadlock.
a) Inter-union or intra-union disputes. 19) As welga ng bayan which is in the nature of a
b) Simple violation of CBA in contrast to general strike as well as an extended sympathy
gross violation thereof which is deemed strike.
ULP.
c) Violation of labor standards.

70
3. ASSUMPTION OF JURISDICTION (BY THE by the National Tripartite Industrial Peace Council
DOLE SECRETARY OR ALTERNATIVELY, AT (TIPC).”
HIS DISCRETION, CERTIFICATION OF THE Obviously, the above enumerated
LABOR DISPUTE TO THE NLRC FOR industries are not exclusive as other industries
COMPULSORY ARBITRATION) may be considered indispensable to the national
interest based on the appreciation and discretion
1. WHEN DOLE SECRETARY MAY ASSUME of the DOLE Secretary or as may be
OR CERTIFY A LABOR DISPUTE. recommended by TIPC.
Article 278(g) [263(g)] of the Labor Code
provides that when in the opinion of the DOLE 3. DIFFERENT RULE ON STRIKES AND
Secretary, the labor dispute causes or will likely to LOCKOUTS IN HOSPITALS, CLINICS AND
cause a strike or lockout in an industry MEDICAL INSTITUTIONS.
indispensable to the national interest, he is As a general rule, strikes and lockouts in
empowered to do either of 2 things: hospitals, clinics and similar medical institutions
1. He may assume jurisdiction over the labor should be avoided.
dispute and decide it himself; or In case a strike or lockout is staged, it
2. He may certify it to the NLRC for compulsory shall be the duty of the striking union or locking-
arbitration, in which case, it will be the NLRC out employer to provide and maintain an effective
which shall hear and decide it. skeletal workforce of medical and other health
This power may be exercised by the personnel whose movement and services shall be
DOLE Secretary even before the actual staging of unhampered and unrestricted as are necessary to
a strike or lockout since Article 278(g) [263(g)] insure the proper and adequate protection of the
does not require the existence of a strike or life and health of its patients, most especially
lockout but only of a labor dispute involving emergency cases, for the duration of the strike or
national interest. lockout.
The DOLE Secretary may immediately
2. WHAT CONSTITUTES A NATIONAL assume, within twenty four (24) hours from
INTEREST CASE? knowledge of the occurrence of such a strike or
The Labor Code vests in the DOLE lockout, jurisdiction over the same or certify it to
Secretary the discretion to determine what the NLRC for compulsory arbitration
industries are indispensable to the national .
interest. Accordingly, upon the determination by 4. SOME PRINCIPLES ON
the DOLE Secretary that such industry is ASSUMPTION/CERTIFICATION POWER OF
indispensable to the national interest, he has THE DOLE SECRETARY.
authority to assume jurisdiction over the labor  Prior notice and hearing are not required
dispute in the said industry or certify it to the in the issuance of the assumption or
NLRC for compulsory arbitration. certification order.
Past issuances of the DOLE Secretary  The DOLE Secretary may seek the
have not made nor attempted to mention assistance of law enforcement agencies
specifically what the industries indispensable to like the Philippine National Police to
the national interest are. It was only in ensure compliance with the provision
Department Order No. 40-H-13, Series of 2013, thereof as well as with such orders as he
that certain industries were specifically named, may issue to enforce the same.
thus:
“Section 16. Industries Indispensable to 5. RETURN-TO-WORK ORDER.
the National Interest. – For the guidance of the a. It is a STATUTORY PART AND PARCEL of
workers and employers in the filing of petition for assumption/certification order even if not
assumption of jurisdiction, the following expressly stated therein.
industries/services are hereby recognized as
deemed indispensable to the national interest: The moment the DOLE Secretary
a. Hospital sector; assumes jurisdiction over a labor dispute involving
b. Electric power industry; national interest or certifies it to the NLRC for
c. Water supply services, to exclude small water compulsory arbitration, such assumption or
supply services such as bottling and refilling certification has the effect of automatically
stations; enjoining the intended or impending strike or, if
d. Air traffic control; and one has already been commenced, of
e. Such other industries as may be recommended automatically prohibiting its continuation. The

71
mere issuance of an assumption or certification work out a satisfactory ad hoc solution to a
order automatically carries with it a return-to-work festering and serious problem.
order, even if the directive to return to work is not
expressly stated therein. It is thus not necessary
for the DOLE Secretary to issue another order 3.1. NATURE OF ASSUMPTION ORDER OR
directing the strikers to return to work. CERTIFICATION ORDER
It is error therefore for striking workers to
continue with their strike alleging absence of a 1. A POLICE POWER MEASURE.
return-to-work order since Article 263(g) is clear The power to issue assumption or
that once an assumption/certification order is certification orders is an extraordinary authority
issued, strikes are enjoined or, if one has already granted to the President and to his alter ego, the
taken place, all strikers should immediately return DOLE Secretary, the exercise of which should be
to work. strictly limited to national interest cases. It is in the
nature of a police power measure. This is done for
b. Nature of return-to-work order. the promotion of the common good considering
Return-to-work order is compulsory and that a prolonged strike or lockout can be inimical
immediately executory in character. It should be to the national economy. It is to protect the
strictly complied with by the parties even during NATIONAL INTEREST and not for the protection
the pendency of any petition questioning its of labor nor of capital.
validity in order to maintain the status quo while
the determination is being made. Filing of a
motion for reconsideration does not affect the 3.2. EFFECT OF DEFIANCE OF ASSUMPTION
enforcement of a return-to-work order which is OR CERTIFICATION ORDERS ON
immediately executory. EMPLOYMENT OF DEFIANT WORKERS

c. Some principles on return-to-work order. 1. DEFIANCE OF THE ORDER, A VALID

 The issue of legality of strike is immaterial GROUND TO DISMISS.
in enforcing the return-to-work order. The defiance by the union, its officers and
 Upon assumption or certification, the members of the Labor Secretary's assumption of
parties should revert to the status quo jurisdiction or certification order constitutes a valid
ante litem which refers to the state of ground for dismissal.
things as it was before the labor dispute or The following are the justifications:
the state of affairs existing at the time of 1. A strike that is undertaken after the issuance by
the filing of the case. It is the last actual, the DOLE Secretary of an assumption or
peaceful and uncontested status that certification order becomes a prohibited activity
preceded the actual controversy. and thus illegal. The defiant striking union officers
 To implement the return-to-work order, the and members, as a result, are deemed to have
norm is actual reinstatement. However, lost their employment status for having knowingly
payroll reinstatement in lieu of actual participated in an illegal strike.
reinstatement may properly be resorted to 2. From the moment a worker defies a return-to-
when special circumstances exist that work order, he is deemed to have abandoned his
render actual reinstatement impracticable job.
or otherwise not conducive to attaining the 3. By so defying, the workers have forfeited their
purposes of the law. right to be readmitted to work.

Example: 2. ALL DEFIANT STRIKERS, REGARDLESS OF

University of Sto. Tomas v. NLRC, where WHETHER THEY ARE OFFICERS OR
the teachers ordered to return to work could not ORDINARY MEMBERS, ARE DEEMED
be given back their academic assignments since DISMISSED.
the return-to-work order of the DOLE Secretary Once the DOLE Secretary assumes
was issued in the middle of the first semester of jurisdiction over a labor dispute or certifies it to the
the academic year. The Supreme Court affirmed NLRC for compulsory arbitration, such jurisdiction
the validity of the payroll reinstatement order of should not be interfered with by the application of
the NLRC and ruled that the NLRC did not commit the coercive processes of a strike or lockout. Any
grave abuse of discretion in providing for the defiance thereof is a valid ground for the loss of
alternative remedy of payroll reinstatement. It employment status.
observed that the NLRC was only trying its best to

72
3. PERIOD OF DEFIANCE OF THE RETURN- strike will result in the termination of all union
TO-WORK ORDER, NOT MATERIAL. officers who knowingly participated in the illegal
The length of time within which the return- strike. Unlike ordinary members, it is not required,
to-work order was defied by the strikers is not for purposes of termination, that the officers
significant in determining their liability for the legal should commit an illegal act during the strike.
consequences thereof. The following cases are However, absent any showing that the
illustrative of this rule: employees are union officers, they cannot be
a. University of San Agustin Employees’ Union- dismissed based solely on the illegality of the
FFW v. The CA.1 - The period of defiance was strike.
less than To illustrate how the “knowing
nine (9) hours from 8:45 a.m. to 5:25 p.m. on participation” of union officers may be ascertained
September 19, 2003. and established, the following factors were taken
b. Federation of Free Workers v. Inciong. 2 - The into account in another 2011 case, Abaria v.
period of defiance was only nine (9) days. NLRC,1 which led to the declaration that they
knowingly participated in the illegal strike:
4. SOME PRINCIPLES ON DEFIANCE OF THE (1) Their persistence in holding picketing activities
ASSUMPTION/CERTIFICATION ORDER. despite the declaration by the NCMB that their
 The assumption/certification order may be union was not duly registered as a legitimate labor
served at any time of the day or night. organization and notwithstanding the letter from
 No practice of giving 24 hours to strikers the federation’s legal counsel informing them that
within which to return to work. There is no their acts constituted disloyalty to the national
law or jurisprudence recognizing this federation; and
practice. (2) Their filing of the notice of strike and
 The defiant strikers could be validly conducting a strike vote despite the fact that their
replaced. union has no legal personality to negotiate with
 The refusal to acknowledge receipt of the their employer for collective bargaining purposes.
assumption/certification orders and other
processes is an apparent attempt to 2. Ordinary union members.
frustrate the ends of justice, hence, The mere finding or declaration of illegality of a
invalid. The union cannot be allowed to strike will not result in termination of ordinary
thwart the efficacy of the said orders union members. For an ordinary union member to
issued in the national interest through the suffer termination, it must be shown by clear
simple expediency of refusing to evidence that he has committed illegal acts during
acknowledge receipt thereof. the strike.

3.3. LIABILITY OF UNION OFFICERS FOR b. Reason for the distinction.

DECLARATION OF ILLEGALITY OF STRIKE The reason for this distinction is that the
union officers have the duty to guide their
3.4. LIABILITY OF ORDINARY WORKERS FOR members to respect the law. If instead of doing
COMMISSION OF ILLEGAL ACTS IN THE so, the officers urged the members to violate the
COURSE OF STRIKE law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or
1. PARTICIPATION IN LAWFUL STRIKE. sanction for their unlawful act. Their responsibility
An employee who participates in a lawful strike is as main players in an illegal strike is greater than
not deemed to have abandoned his employment. that of the ordinary union members and,
Such participation should not constitute sufficient therefore, limiting the penalty of dismissal only to
ground for the termination of his employment the former for their participation in an illegal strike
even if a replacement has already been hired by is in order.
the employer during such lawful strike.
c. Some principles on illegality of a strike.
2. PARTICIPATION IN ILLEGAL STRIKE.  The fact that the employees are
signatories to the CBA does not in itself
a. Distinction in the liability between union sufficiently establish their status as union
officers and ordinary union members. officers during the illegal strike. Neither
1. Union officers. were their active roles during the
The mere declaration of illegality of the bargaining negotiations be considered as

73
 evidence of their being union officers. issued by the DOLE Secretary or NLRC in
 Only the union officers during the period connection with the assumption of jurisdiction or
of illegal strike are liable. If the employees certification order under Article 263(g) of the
acted as union officers after the strike, Labor Code.
they may not be held liable and, therefore,
could not be terminated in their capacity This enumeration is not exclusive as
as such. jurisprudence abounds where the term “illegal
 Shop stewards are union officers, hence, acts” has been interpreted and construed to cover
they should be terminated upon the other breaches of existing laws.
declaration of the illegality of the strike. Liability for illegal acts should be
 Union officers may be dismissed despite determined on an individual basis. For this
the fact that the illegal strike was staged purpose, the individual identity of the union
only for 1 day or even for less than 10 members who participated in the commission of
hours. This holds true in cases of defiance illegal acts may be proved thru affidavits and
of the assumption/ certification order photographs. Simply referring to them as
issued in national interest cases. “strikers,” or “complainants in this case” is not
 If the dispositive portion of the decision enough to justify their dismissal.
failed to mention the names of union
officers, resort should be made to the text c. Some principles on commission of illegal
of the decision. acts in the course of the strike.
 No wholesale dismissal of strikers  Only members who are identified as
allowed. The employer cannot just having participated in the commission of
unceremoniously dismiss a hundred of its illegal acts are liable. Those who did not
employees in the absence of clear and participate should not be blamed therefor.
convincing proof that these people were  To effectively hold ordinary union
indeed guilty of the acts charged and members liable, those who participated in
then, afterwards, go to court to seek the commission of illegal acts must not
validation of the dismissal it whimsically only be identified but the specific illegal
executed. That certainly cannot be acts they each committed should be
allowed. described with particularity.
 If violence was committed by both
3. PARTICIPATION IN THE COMMISSION OF employer and employees, the same
ILLEGAL ACTS DURING A STRIKE. cannot be cited as a ground to declare the
strike illegal.
a. Legality or illegality of strike, immaterial.
As far as liability for commission of illegal ------------oOo------------
acts during the strike is concerned, the issue of
legality or illegality of the strike is irrelevant. As
long as the union officer or member commits an SYLLABUS MAJOR TOPIC 6
illegal act in the course of the strike, be it legal or
illegal, his employment can be validly terminated. POST EMPLOYMENT

b. Meaning of “illegal acts.” A. EMPLOYER-EMPLOYEE RELATIONSHIP

The term “illegal acts” under Article 264(a)
may encompass a number of acts that violate 1. TESTS TO DETERMINE EXISTENCE OF
existing labor or criminal laws, such as the EMPLOYER-EMPLOYEE RELATIONSHIP
following:
(1) Violation of Article 264(e) of the Labor Code Four-Fold Test
which provides that “[n]o person engaged in  What is the 4-fold test of existence of
picketing shall commit any act of violence, employer-employee relationship?
coercion or intimidation or obstruct the free 1. Selection and engagement of the employee;
ingress to or egress from the employer’s premises 2. Payment of wages or salaries;
for lawful purposes, or obstruct public 3. Exercise of the power of dismissal; or
thoroughfares.” 4. Exercise of the power to control the employee’s
(2) Commission of crimes and other unlawful acts conduct.
in carrying out the strike. These tests, however, are not fool-proof
(3) Violation of any order, prohibition, or injunction as they admit of exceptions.

74
 economic dependency of such individual. In other
 What is the control test or also known words, under the economic reality test, the
as the MEANS AND METHOD question to ask is - among the parties alleged to
CONTROL TEST? be the employer, to whom is the individual
The 4th test above, the control test, is the economically dependent?
controlling test which means that the employer Following the broader economic reality
controls or has reserved the right to control the test, the Supreme Court found petitioner in
employee not only as to the result of the work to Orozco v. The Fifth Division of the Hon. CA,5 who
be done but also as to the means and methods by is a columnist in the Philippine Daily Inquirer
which the same is to be accomplished. (PDI), not an employee of PDI but an independent
The three (3) terms: (1) means, (2) methods contractor. Thus:
and (3) results are the critical elements of the “Petitioner’s main occupation is not as a
control test, thus: columnist for respondent but as a women’s rights
Situation 1: If the employer controls the advocate working in various women’s
means and methods of performing the job, work organizations. Likewise, she herself admits that
or service, including the results thereof, then the she also contributes articles to other publications.
arrangement is one of employer-employee Thus, it cannot be said that petitioner was
relationship. dependent on respondent PDI for her continued
Situation 3: If the so-called employer does employment in respondent’s line of business.
not control such means and methods but is only “The inevitable conclusion is that
interested in the results thereof, then the petitioner was not respondent PDI’s employee but
arrangement is called “independent job an independent contractor, engaged to do
contracting” or “contractualization”, the party independent work.”
controlling the means and methods is called the
independent contractor and the party interested  Is it necessary to have a written
only in the results is called the contract of employment in order to
principal/client/indirect employer/statutory establish employer-employee
employer. relationship?
No. It may be an oral or written contract. A
Two-Tiered Test written contract is not necessary for the creation
 What is the 2-tiered test of employment and validity of the relationship.
relationship? The only exception is in the case of
The two-tiered test enunciated in Francisco v. Kasambahay where, under the Kasambahay Law,
NLRC,1 is composed of: it is required that the contract of employment
should be in writing.
(1) The putative employer’s power to control the
employee with respect to the means and
methods by which the work is to be 2. KINDS OF EMPLOYMENT
accomplished [control test]; and
(2) The underlying economic realities of the  What is the general classification of
activity or relationship [broader economic reality employment?
test]. There are five (5) classifications of
Employment relationship under the control employment:
test is determined under the same concept as (a) Regular employees referring to those who
discussed above, that is, by asking whether “the have been “engaged to perform activities which
person for whom the services are performed are usually necessary or desirable in the usual
reserves the right to control not only the end to be business or trade of the employer”;
achieved but also the manner and means to be (b) Project employees referring to those “whose
used in reaching such end.” employment has been fixed for a specific project
Under the economic reality test, the or undertaking, the completion or termination of
proper standard of economic dependence is which has been determined at the time of the
whether the worker is dependent on the alleged engagement of the employee”;
employer for his continued employment in that (c) Seasonal employees referring to those who
line of business. work or perform services which are seasonal in
These 2-tiered test applies to cases where nature, and the employment is for the duration of
there are several parties alleged to be employers the season;
of one individual. The determinant factor is (d) Casual employees referring to those who are

75
not regular, project, or seasonal employees; same calendar date of the 6th month following.”
(e) Fixed-term employees whose term is freely
and voluntarily determined by the employer and  May probationary period be extended?
the employee. NOTE: This is not provided in the Yes, but only upon the mutual agreement in
Labor Code. writing by the employer and the probationary
But in the 2019 Syllabus, the following employee.
were added to the enumeration of the Kinds of
Employment:  What is the effect of allowing a
1. Probationary probationary employee to work beyond
2. Security guards the probationary period?
3. Floating status He is considered a regular employee.

We shall therefore include a discussion on  What is the effect if there is no written

these three below. contract providing for probationary
employment?
 What is the default employment? If there is no written contract, the employee is
The default employment is regular considered a regular employee from day one of
employment. This means that generally, in the his employment.
absence of any specific agreement to the And even if there is one, he is deemed
contrary, the employer-employee relationship is regular if there is no stipulation on probationary
deemed to be regular in nature. Therefore, in period.
order to make the employment some other kind of
employment, such as project, seasonal, casual,  What is the distinction between
fixed-term or probationary, there must be a written probationary employment and fixed-
contract of employment stipulating the specific term employment?
kind of employment. The distinction lies in the intention of the
So, therefore, if there is no written parties. If the parties intend to make their
employment contract, the employment should be relationship regular after the lapse of the period,
deemed REGULAR. However, even if there is a say of 6 months, then what is contemplated is
written employment contract, if it is not clear that probationary employment; if there is no such
the parties have stipulated such other kinds of intention of the parties, then, what they have
employment (such as project, seasonal, casual, entered into is simply a fixed-term contract.
fixed-term or probationary), the employment
relationship will still be considered REGULAR
employment which, as earlier stated, is the default
employment.
 What are the grounds to terminate
a. PROBATIONARY EMPLOYMENT probationary employment?
 Is the period of 6 months in the law on Under Article 281, a probationary employee
probationary employment (Article 296 may be terminated only on three (3) grounds, to
[281], LC) the minimum or maximum wit:
period? 1. For a just cause; or
The answer is it is neither the minimum nor 2. For authorized cause; or
the maximum period of probationary employment. 3. When the probationary employee fails to qualify
The 6-month period is mentioned in the law for as a regular employee in accordance with
purposes of setting the standard period. Proof that reasonable standards made known by the
it is not the maximum is the case of Buiser v. employer to the employee at the start of the
Leogardo where the probationary period of 18 employment.
months was considered reasonable. In other
words, probationary period may be for a day, a  Is procedural due process required in
week, a month or several months, depending on termination of probationary
the reasonable discretion of management. employment?
Yes, but only in the case of Numbers 1 and 2
 How is probationary period, say, of 6 above.
months computed? Due process for Number 3 is different and
The 6-month probationary period should be unique in the sense that it requires simply the
reckoned “from the date of appointment up to the service of a written notice of termination, not

76
verbal, informing the probationary employee of
the termination of his probationary employment c. PROJECT EMPLOYMENT
and attaching thereto the result of the  What is the litmus test of project
performance evaluation conducted on him. As employment?
clearly pointed out above, it is a fundamental The litmus test of project employment, as
requirement that the reasonable standards distinguished from regular employment, is
expected of the employee during his probationary whether or not the project employees were
employment was made known to him at the time assigned to carry out a specific project or
of his engagement. Necessarily, at the termination undertaking, the duration and scope of which
thereof, the supposed performance evaluation were specified at the time the employees were
should be presented to him. As a matter of due engaged for that project.
process, an employee has the right to know A true project employee should be assigned
whether he has met the standards for which his to a project which begins and ends at determined
performance was evaluated. Should he fail, he or determinable times and be informed thereof at
also has the right to know the reasons therefor. the time of hiring.

 When should termination of  What are the 6 indicators of project

probationary employment be made? employment?
Termination to be valid must be done prior to Either one or more of the following
lapse of probationary period. Termination a day or circumstances, among others, may be considered
a few days after the lapse of the probationary as indicator/s that an employee is a project
period cannot be done without just or authorized employee:
cause as he has already become a regular 1. The duration of the specific/identified
employee by that time. undertaking for which the worker is engaged is
reasonably determinable.
b. REGULAR EMPLOYMENT 2. Such duration, as well as the specific
 How does one become a regular work/service to be performed, are defined in an
employee? employment agreement and is made clear to the
Under the Labor Code, regular employment employee at the time of hiring.
may be attained in either of three (3) ways, 3. The work/service performed by the
namely: employee is in connection with the particular
1. By nature of work. - The employment is project or undertaking for which he is engaged.
deemed regular when the employee has been 4. The employee, while not employed and
engaged to perform activities which are usually awaiting engagement, is free to offer his services
necessary or desirable in the usual business or to any other employer.
trade of the employer. 5. A report of the termination of employment in the
2. By period of service. - The employment is particular project/undertaking is submitted to the
reckoned as regular when the employee has DOLE Regional Office having jurisdiction over the
rendered at least one (1) year of service, whether workplace, within thirty (30) days following the
such service is continuous or broken, with respect date of his separation from work.
to the activity in which he is employed and his 6. An undertaking in the employment contract by
employment shall continue while such activity the employer to pay completion bonus to the
exists. project employee as practiced by most
3. By probationary employment. - The construction companies.
employment is considered regular when the
employee is allowed to work after a probationary  Is length of service material in
period. determining validity of project
employment?
 Is the manner or method of paying No. Length of service is not a controlling
wage material in determining regularity determinant of employment tenure.
of employment?
No. The manner and method of payment of  What are some principles on project
wage or salary is immaterial to the issue of employment?
whether the employee is regular or not. So, the 1. Project employees should be informed of their
fact that an employee is paid on a daily basis or status as such at inception of the employment
monthly basis is inconsequential on the regularity relationship.
issue. 2. There must be a written contract of project

77
employment stating the duration of the project G.R. No. 90653, Nov. 12, 1990. Private
employment as well as the particular work or respondent company is engaged in the
service to be performed. A written project manufacture of cultured milk which is sold under
employment contract is an indispensable the brand name “Yakult.” Petitioners were hired to
requirement. cut cogon grass and weeds at the back of the
3. Intervals in employment contracts indicate factory building used by private respondents.
project employment. They were not required to work on fixed schedule
4. Continuous, as opposed to intermittent, rehiring and they worked on any day of the week on their
shows that employee is regular. own discretion and convenience. They were held
5. “Project-to-project” basis of employment is to be casual employees because cutting cogon
valid. grass and weeds is but incidental to the principal
business of the company.
On termination of project employment.
1. Project employees enjoy security of tenure only  When does a casual employee become
during the term of their project employment. regular?
2. Project employees have presumably become Casual employee becomes regular after one year
regular employees if they are allowed to work of service by operation of law. The one (1) year
beyond the completion of the project or any phase period should be reckoned from the hiring date.
thereof to which they were assigned or after the Repeated rehiring of a casual employee makes
“day certain” which they and their employer have him a regular employee.
mutually agreed for its completion. Having
become regular employees, they can no longer be f. FIXED-TERM EMPLOYMENT
terminated on the basis of the completion of the
project or any phase thereof to which they were  What are the requisites in order for
deployed. fixed-term employment to be valid?
The two (2) requisites or criteria for the validity
d. SEASONAL EMPLOYMENT of a fixed-term contract of employment are as
follows:
 Can a seasonal employee become a 1. The fixed period of employment was knowingly
regular seasonal employee? and voluntarily agreed upon by the parties,
Yes, provided the following requisites are without any force, duress or improper pressure
complied with: being brought to bear upon the employee and
1. The seasonal employee should perform absent any other circumstances vitiating his
work or services that are seasonal in nature; and consent; or
2. They must have also been employed for 2. It satisfactorily appears that the employer and
more than one (1) season. employee dealt with each other on more or less
 Can a regular seasonal worker file an equal terms with no moral dominance whatever
illegal dismissal case in the event he is not hired being exercised by the former on the latter.
for the next season?
Yes. The reason is, being a regular seasonal  Is fixed-term employment valid if the
employee, the employer should re-hire him in the job is directly related to the principal
next season. During off-season, his employment business of the employer?
is deemed suspended and he is considered as Yes. Fixed-term employment is the only
being on leave of absence without pay. exception to the rule that one becomes regular if
he is made to perform activities directly related to
e. CASUAL EMPLOYMENT the principal business of the employer (Regularity
by virtue of nature of work)
 What is the most important Thus, it was ruled in Philippine Village Hotel v.
distinguishing feature of casual NLRC,1 that the fact that private respondents
employment? were required to render services necessary or
The most important distinction is that the desirable in the operation of petitioner’s business
work or job for which he was hired is merely for the duration of the one-month dry-run
incidental to the principal business of the operation period, did not in any way impair the
employer and such work or job is for a definite validity of their contracts of employment which
period made known to the employee at the time of specifically stipulated that their employment was
engagement. only for one (1) month.
Capule v. NLRC, Yakult Philippines, Inc.,

78
  When does a fixed-term employee direct connection or relation, except for the six (6)-
become regular? month period provided therein which has been
1. When he is allowed to work beyond the agreed held as the defining cut-off period that can be
fixed term. used as a consonant basis in determining the
2. When there are successive renewals of fixed- reasonableness of the length of time when an
period contracts. employee could be deprived of work under this
doctrine.
 What is the 555 Doctrine?
The 555 Doctrine is a scheme of the employer 3. “FLOATING” STATUS DOCTRINE AS
in hiring workers on a uniformly fixed 5-month APPLIED TO SECURITY GUARDS.
basis and replacing them upon the expiration of Applying Article 301 [286] by analogy, the
their contracts with other workers with the same Supreme Court has consistently recognized that
employment status circumvents their right to security guards may be temporarily sidelined by
security of tenure. their security agency as their assignments
primarily depend on the contracts entered into by
g. FLOATING STATUS the latter with third parties. This is called the
“floating status” doctrine which is based on and
1. A NEW TOPIC. justified under the said article. This status, as
The “Floating Status” Doctrine is a new applied to security guards, is the period of time
topic prescribed in the 2019 Syllabus. This topic is when security guards are in between assignments
included in the enumeration therein as one of the or when they are made to wait after being relieved
kinds of employment. This may bring about from a previous post until they are transferred to a
confusion since this doctrine, in no way, has new one. In security agency parlance, being
anything to do with the main topic of “Kinds of placed “off-detail” or on “floating” status means
Employment.” “waiting to be posted.”

2. LACK OF APPLICABLE PROVISION IN THE 4. INSTANCES WHICH JUSTIFY APPLICATION

LABOR CODE. OF DOCTRINE.
At the outset, it bears reiterating that “Floating status” takes place under any of
although placing an employee like a security the following circumstances:
guard on “floating” status (or sometimes called (1) When the security agency’s clients decide not
temporary “off-detail” status) is considered a to renew their contracts with the agency, resulting
temporary retrenchment measure, the Supreme in a situation where the available posts under its
Court, in Exocet v. Serrano,2 recognized the fact existing contracts are less than the number of
that there is similarly no provision in the Labor guards in its roster; or
Code which treats of a temporary retrenchment or (2) When contracts for security services stipulate
lay-off. Neither is there any provision which that the client may request the agency for the
provides for its requisites or its duration. replacement of the guards assigned to it even for
Nevertheless, since an employee cannot be laid- want of cause and there are no available posts
off indefinitely, the Court has applied Article 301 under the agency’s existing contracts to which the
[286] of the Labor Code by analogy to set the replaced security guards may be placed.
specific period of temporary lay-off to a maximum
of six (6) months. This provision states: As far as No. 2 above is concerned, the
“Article 301 [286]. When Employment Not Supreme Court has recognized the fact that
Deemed Terminated. – The bona-fide suspension clients of the security agency have the right to
of the operation of a business or undertaking for a request for the removal of any of the security
period not exceeding six (6) months, or the guards supplied by the latter to the former without
fulfillment by the employee of a military or civic need to justify the same. The reason for this is the
duty shall not terminate employment. In all such lack of any employment relationship between the
cases, the employer shall reinstate the employee security guards and the client.
to his former position without loss of seniority Also, under No. 2 above, a relief and
rights if he indicates his desire to resume his work transfer order may be issued by the security
not later than one (1) month from the resumption agency to the security guard concerned in order
of operations of his employer or from his relief to effect it. This order in itself does not sever
from the military or civic duty.” employment relationship between a security
Clearly from the foregoing article, the guard and his agency. And the mere fact that the
concept of “floating status” does not find any transfer would be inconvenient for the former

79
does not by itself make the transfer illegal. provided by law during the 6-month period
thereof.
5. APPLICABILITY TO OTHER EMPLOYEES. (2) As a general rule, “floating status” beyond 6
While the “floating status” rule is months amounts to illegal/constructive dismissal.
traditionally applicable to security guards who are This is so because “floating status” is not
temporarily sidelined from duty while waiting to be equivalent to dismissal so long as such status
transferred or assigned to a new post or client,1 does not continue beyond a reasonable time
Article 301 [286] has been applied as well to other which means six (6) months. After 6 months, the
industries when, as a consequence of the bona- employee should be recalled for work, or for a
fide suspension of the operation of a business or new assignment; otherwise, he is deemed
undertaking, an employer is constrained to put terminated.
employees on “floating status” for a period not (3) The security guard who refused to be re-
exceeding six (6) months. assigned may be dismissed for insubordination.
Thus, it may also be applied to employees (4) Multiple “floating status” amount to
of legitimate contractors or subcontractors under constructive dismissal.
a valid independent contracting or subcontracting (5) “Floating status” is distinct from preventive
arrangement under Article 106 of the Labor Code. suspension. In the case of “floating status,” the
The same form of dislocation and displacement employee is out of work because his employer
also affects their employees every time contracts has no available work or job to assign him to. He
of services are terminated by their clients or is thus left with no choice but to wait for at least
principals. In the meantime that the dislocated six (6) months before he could claim having been
employees are waiting for their next assignment, constructively dismissed, should his employer fail
they may be placed on “off detail” or “floating” to assign him to any work or job within said
status following the same concept applicable to period. In the case of preventive suspension, the
security guards. employee is out of work because he has
For example, in JPL Marketing committed a wrongful act and his continued
Promotions v. CA,3 this principle was applied to presence in the company premises poses a
merchandisers hired by petitioner company which serious and imminent threat to the life or property
is engaged in the business of recruitment and of the employer or of his co-workers. Without this
placement of workers. After they were notified of kind of threat, preventive suspension is not
the cancellation of the contract of petitioner with a proper. Further, the period of preventive
client where they were assigned and pending their suspension under the said provisions of the
reassignment to other clients, the merchandisers Implementing Rules should not exceed thirty (30)
are deemed to have been placed under “floating days.
status” for a period of not exceeding six (6) (6) A complaint filed before the lapse of the 6-
months under Article 301 [286]. Such notice, month period of floating status is premature, the
according to the Court, should not be treated as a employee not having been deemed constructively
notice of termination but a mere note informing dismissed at that point. Thus, a complaint filed
them of the termination of the client’s service twenty-nine (29) days after the security guard was
contract with petitioner company and their placed on floating status was declared as having
reassignment to other clients. The 30-day notice been prematurely filed.
rule under Article 298 [283] does not therefore (7) However, the filing of a complaint for
apply to this case. constructive dismissal prior to the lapse of the 6-
This was likewise applied to the case of: month period of “floating status” will not be held
(1) A bus driver in Valdez v. NLRC4 who was premature in cases where the intent to terminate
placed on floating status after the air-conditioning the employee is evident even prior to the lapse of
unit of the bus he was driving suffered a said period.
mechanical breakdown; and (8) No procedural due process is required before
(2) A Property Manager in Nippon Housing Phil., an employee is placed under “floating status.” The
Inc. v. Leynes,5 pending her assignment to reason is that there is no termination of
another project for the same position. employment to speak of at that point.

6. SOME PRINCIPLES ON “FLOATING h. SECURITY GUARDS

STATUS” DOCTRINE.
(1) When an employee like a security guard is 1. NEW TOPIC.
placed on a “floating” status, he is not entitled to The topic of Security Guards is newly
any salary, financial benefit or financial assistance introduced in the 2019 Syllabus. There is no

80
single provision in the Labor Code on security offices and organizations, whether private or
guards; hence, it is a source of wonder for the public, for their security needs as the Philippine
Syllabus to consider this topic under “Kinds of National Police (PNP) may approve.
Employment” alongside such topics as regular, (3) Contractor’s employees supplied or farmed out
casual, probationary, project, seasonal and fixed- to the Principal called:
term employments. Perhaps, the reason for its (a) "Security Guard" which refers to any
inclusion therein is for the bar candidate to be person who offers or renders personal
able to address the issue of the employment service to watch or secure a residence,
status of security guards and other private business establishment, building,
security personnel in relation to their employer, compound, any other area or property; or
the security agency, and to the principal/client, to inspects, monitors, or performs body
whom they have been assigned or farmed out. checks or searches of individuals or
baggage and other forms of security
2. DEPARTMENT ORDER NO. 150, SERIES OF inspection.
2016. (b) “Private Security Personnel” which
In any case, there is one issuance on refers to natural persons, including private
security guards which may be relevant for detectives, security consultants and
purposes of preparing for the bar exams and that security officers, employed by private
is, Department Order No. 150, Series of 2016, security agency or firm, to render
entitled “Revised Guidelines Governing the security and/or detective services.
Employment and Working Conditions of Security
Guards and other Private Security Personnel in Consequently, the following terms of job
the Private Security Industry” issued by the DOLE contracting equally apply to the employment of
Secretary on February 09, 2016. security guards:
More specifically, this Department Order (1) "Trilateral Relationship" which refers to the
was issued for the purpose of ensuring relationship in contracting or subcontracting
compliance with mandated employment benefits arrangement where there is a contract for a
and working conditions for security guards and specific security job, work, or service between the
other private security personnel in the private principal and the SSC/PSA, and a contract of
security industry. It applies to all private security, employment between the latter and its security
detective, investigative agencies or operators, guards. There are three (3) parties involved in
their principals or clients, and all companies these arrangements: the principal who decides to
employing security guards and other private farm out a security job, work, or service to a
security personnel. security service contractor; the SSC/PSA who has
the capacity to independently undertake the
performance of the security job, work, or service;
3. EMPLOYMENT OF SECURITY GUARDS – and the security guards and other private security
PERFECT EXAMPLE OF JOB CONTRACTING. personnel engaged by the SSC/PSA to
The employment of security guards is the accomplish the security job, work, or service.
perfect example of job contracting or commonly (2) “Service Agreement” which refers to the
known as “contractualization” where the following contract between the principal and the SSC/PSA
trilateral relationship between the following parties containing the terms and conditions governing the
exists: performance or completion of security service,
(1) “Principal” refers to any individual, company, job, or work being farmed out for a definite or
cooperative, or establishment, including predetermined period.
government agencies and government-owned
and controlled-corporations, who or which puts 4. CONTRACTUAL RELATIONSHIPS OF THE
out or farms out a security and/or detective job, TRIPARTITE PARTIES.
service, or work to a private Security Service The contractual relationships between and
Contractor (SSC). among the three (3) parties in the trilateral
(2) Contractor called “Security Service Contractor relationship are as follows:
(SSC)” or “Private Security Agency (PSA)” which (1) Between principal/client and SSC/PSA –
refers to any person, association, partnership, governed by the Security Agreement;
firm, or private corporation engaged in (2) Between SSC/PSA and security guards
contracting, recruitment, training, furnishing, or and other private security personnel –
posting of security guard and other private governed by the Employment Contract;
security personnel to individuals, corporations, (3) Between principal/client and security

81
guards and other private security personnel anytime without need to observe due process.
– NO CONTRACTUAL RELATIONSHIP
a. LEGITIMATE JOB CONTRACTING
5. DISCUSSION OF JOB CONTRACTING
BELOW EQUALLY APPLIES TO  What are the elements of legitimate job
EMPLOYMENT OF SECURITY GUARDS. contracting?
To avoid duplication and for simplicity in (NOTE: The following THREE (3) words
the discussion of this topic, the more are very important: MANNER & METHOD and
comprehensive discussion of job contracting RESULT in determining the elements of legitimate
below shall apply to and cover the employment of job contracting arrangement).
security guards. Consequently, we shall no longer
belabor the readers of this material with a (a) The contractor is engaged in a distinct and
separate disquisition of this topic. independent business and undertakes to perform
the job or work on its own responsibility,
according to its own manner and method;
2. LEGITIMATE SUBCONTRACTING VS. (b) The contractor has substantial capital to carry
LABOR-ONLY CONTRACTING out the job farmed out by the principal on his own
3. account, manner and method, investment in the
 What is meant by trilateral form of tools, equipment, machinery and
relationship? supervision;
As distinguished from employment (c) In performing the work farmed out, the
relationship which is “bilateral” in nature, involving contractor is free from the control and/or direction
as it does only two (2) parties, namely: (1) the of the principal in all matters connected with the
employer, and (2) the employee, in legitimate job performance of the work EXCEPT as to the result
contracting, it is “trilateral” in character, there thereto; and
being three (3) parties involved, to wit: (d) The Service Agreement ensures compliance
1. The principal who farms out a job, work or with all the rights and benefits for all the
service to a contractor; employees of the contractor under labor laws.
2. The contractor who has the capacity to
independently undertake the performance of the Absence of any of the foregoing requisites
job, work or service; and makes it a labor-only contracting arrangement.
3. The contractor’s workers engaged by the Therefore:
contractor and farmed out to the principal to  If the first party has control over the
accomplish the job, work or service. manner and method of performing the job
or work, including its result, and the
 What are the contracts involved in this second party who supplied the workers to
trilateral relationship? the first party to perform the job or work
Only two (2) contracts are involved, namely: has no such control over such manner
1) Service Agreement between the principal and and method, then the first party is the
the contractor wherein the obligation arising direct employer of the workers supplied by
therefrom is the second party to perform the job or
civil in nature and thus cognizable by the regular work and the second party shall not be
courts. considered as a legitimate “contractor” but
2) Employment contract between the contractor a “labor-only contractor.”
and its workers supplied to the principal.  Contrarily, if the first party has NO control
over the manner and method of
 Is there any employment relationship performing the job or work as such control
and/or contractual relationship thereover is reposed on the second party,
between the principal and the and the first party’s interest pertains only
contractor’s workers farmed out to the to the result of the performance of the job
principal? or work, then there exists here a
None. There is no employment relationship legitimate job contracting arrangement
nor any form of contractual relationship of where the first party is considered the
whatsoever nature between the principal and the principal and the second party, the
workers supplied by the contractor. Hence, the contractor.
principal can ask the contractor to remove any of
the latter’s employees assigned or farmed out to it Example:

82
 Principal – ABC University Yes. Legitimate job contracting may not only
Contractor – XYZ Security Agency be engaged by corporations, partnerships or
Contractor’s Employees – Security single proprietorships. Individuals may become
Guards assigned by Contractor to legitimate job contractors themselves for as long
Principal as they have SPECIAL SKILLS, TALENTS or
Scenario 1: If it is ABC University that EXPERTISE which are considered equivalent of
controls the manner and method of performing the the requirement regarding “INVESTMENT IN
job or work of XYZ Security Agency’s security TOOLS.”
guards (such as when it is ABC University, that
(1) sets the schedule of the Security Guards; (2)  Are individuals engaged as legitimate
makes the assignments to their respective posts; job contractors required to fulfill the
(3) monitors their attendance/absences; (3) requisites of legitimate job contracting
supervises their every action and performance of as afore-described?
their duties, and the like), then, ABC University is NO. They need not be registered as
the direct employer of the guards and the XYZ independent contractors with DOLE; they need
Security Agency is but a labor-only contractor. not have substantial capital (such as the P5
Million stated above). All that they are required is
Scenario 2: If it is XYZ Security Agency which to have their tools consisting of SPECIAL SKILLS,
controls such manner and method of performing TALENT or EXPERTISE.
the job or work of the Security Guards it assigned
to ABC University, and ABC University is  What are examples of individuals as
interested only in the result of the arrangement independent contractors?
(such as the safety of the students, teachers and 1. Sonza v. ABS-CBN Broadcasting Corporation1
employees, safeguard of school property and - TV and radio talents and others with special
premises, peace and tranquility inside its campus, talents and skills may not be employees but
etc.), then, there is here legitimate job contracting legitimate independent contractors.
arrangement where ABC University is the 2. Orozco v. The Fifth Division of the Honorable
principal, XYZ Security Agency is the Court of Appeals2 - A newspaper columnist is not
contractor, and the Security Guards, the an employee but an independent contractor of the
contractor’s employees. newspaper publishing the column.
3. Jose Mel Bernarte v. Philippine Basketball
 What is the amount of SUBSTANTIAL Association3 - Basketball referee is an
CAPITAL required under the new independent contractor.
Rules? 4. Semblante and Pilar v. CA, Gallera de
According to Department Order No. 174, Mandaue, et al.4 - Cockpit masiador and
Series of 2017 (issued on March 16, 2017), the sentenciador are independent contractors.
following consists of substantial capital: 5. Escasinas v. Shangri-la’s Mactan Island
1. In the case of corporations, partnerships or Resort5 - A doctor may be engaged as an
cooperatives – paid-up capital stocks/shares of at independent contractor.
least P5 Million; or
2. In the case of single proprietorship - a net worth b. LABOR-ONLY CONTRACTING
of at least P5 Million.  Is labor-only contracting allowed under
 NOTE: “Substantial capital” and the law?
“investment in tools, etc.” are two NO, it is absolutely prohibited.
separate requirements.
 What are the elements of labor-only
“Substantial capital” and “investment in tools, contracting?
equipment, implements, machineries and work (a) The contractor does not have either (i)
premises” should be treated as two (2) distinct SUBSTANTIAL CAPITAL or (ii) INVESTMENTS
and separate requirements in determining in the form of tools, equipment, machineries,
whether there is legitimate job contracting supervision, work premises, among others, AND
arrangement. It is enough that only one of these the contractor's employees recruited and placed
two requisites is complied with to make the job are performing activities which are directly related
contracting arrangement legitimate and valid. to the main business operation of the principal;
or
 May individuals engage in legitimate (b) The contractor does not exercise the right to
job contracting? control over the performance of the work of the

83
employee. 2017, (IN ADDITION TO LABOR-ONLY
NOTE: There is labor-only contracting CONTRACTING)?
even if only one of the two (2) elements above is The following are considered as such
present. Further, an unregistered contractor is (formerly called “PROHIBITIONS” under previous
presumed to be a labor-only contractor. Department Orders):
Registration as independent contractor should be
made with the DOLE. a) When the principal farms out work to a “Cabo”
which term refers to a person or group of persons
 What are the EFFECTS of labor-only or to a labor group which, under the guise of a
contracting? labor organization, cooperative or any entity,
1. The labor-only contractor will be treated as the supplies workers to an employer, with or without
agent or intermediary of the principal. Since the any monetary or other consideration, whether in
act of an agent is the act of the principal, the capacity of an agent of the employer or as an
representations made by the labor-only contractor ostensible independent contractor.
to the employees will bind the principal. b) Contracting out of job or work through an “In-
2. The principal will become the direct employer house Agency” which term refers to a contractor
as if it directly employed the workers supplied by which is owned, managed, or controlled, directly
the labor- only contractor to undertake the or indirectly, by the principal or one where the
contracted job or service. The principal will be principal owns/represents any share of stock, and
responsible to them for all their entitlements and which operates solely or mainly for the principal.
benefits under labor laws. c) Contracting out of job or work through an “In-
3. The principal and the labor-only contractor will house Cooperative” which merely supplies
be solidarily treated as the direct employer. workers to the principal. An “In-house
Cooperative” refers to a cooperative which is
 What are the distinctions between managed, or controlled directly or indirectly by the
legitimate job contracting and labor- principal or one where the principal or any of its
only contracting? officers owns/represents any equity or interest,
The chief distinctions between legitimate job and which operates solely or mainly for the
contracting, on the one hand, and the prohibited principal.
labor-only contracting, on the other, may be d) Contracting out of a job or work by reason of a
summed up as follows: strike or lockout, whether actual or imminent.
1. In the former, no employer-employee e) Contracting out of a job or work being
relationship exists between the contractual performed by union members and such will
employees of the job contractor and the principal; interfere with, restrain or coerce employees in the
while in the latter, an employer-employee exercise of their rights to self-organization as
relationship is created by law between the provided in Article 259 [248] of the Labor Code,
principal and the employees supplied by the as amended.
labor-only contractor. f) Requiring the contractor's/subcontractor's
2. In the former, the principal is considered only employees to perform functions which are
an “indirect employer”; while in the latter, the currently being performed by the regular
principal is considered the “direct employer” of the employees of the principal.
employees supplied by the labor-only contractor. g) Requiring the contractor's/subcontractor's
3. In the former, the solidary obligation of the employees to sign, as a precondition to
principal and the legitimate job contractor is only employment or continued employment, an
for a limited purpose, that is, to pay the wages of antedated resignation letter; a blank payroll; a
the contractor’s employees supplied to the waiver of labor standards including minimum
principal.. Other than this obligation of paying the wages and social or welfare benefits; or a
wages, the principal is not responsible for any quitclaim releasing the principal or contractor from
claim made by the contractor’s employees; while liability as to payment of future claims; or require
in the latter, the principal becomes solidarily liable the employee to become member of a
with the labor-only contractor to the latter’s cooperative.
employees in the same manner and extent that h) Repeated hiring by the
the principal is liable to employees directly hired contractor/subcontractor of employees under an
by him/her. employment contract of short duration.
i) Requiring employees under a
 What are OTHER ILLICIT FORMS OF contracting/subcontracting arrangement to sign a
EMPLOYMENT IN D.O. 174, Series of contract fixing the period of employment to a term

84
shorter than the term of the Service Agreement, the employee of the lawful orders of his employer
unless the contract is divisible into phases for or representative in connection with his work;
which substantially different skills are required (b) Gross and habitual neglect by the employee of
and this is made known to the employee at the his duties;
time of engagement. (c) Fraud or willful breach by the employee of the
j) Such other practices, schemes or employment trust reposed in him by his employer or duly
arrangements designed to circumvent the right of authorized representative;
workers to security of tenure. (d) Commission of a crime or offense by the
employee against the person of his employer or
 SAME EFFECT AS LABOR-ONLY any immediate member of his family or his duly
CONTRACTING. authorized representatives; and
The foregoing illicit acts do not constitute labor- (e) Other causes analogous to the foregoing.
only contracting but the effect is similar to labor-
only contracting in that the principal is deemed the (2) Article 279(a) [264(a)] - (Prohibited Activities)
direct employer of the contractor's employees. which provides for the termination of the following:
(a) Union officers who knowingly participate in an
B. TERMINATION BY EMPLOYER illegal strike and therefore deemed to have lost
their employment status.
 What is meant by TWO-FOLD DUE (b) Any employee, union officer or ordinary
PROCESS requirement? member who knowingly participates in the
Dismissal of employees requires the commission of illegal acts during a strike
observance of the two-fold due process (irrespective of whether the strike is legal or
requisites, namely: illegal), is also deemed to have lost his
1. Substantive aspect which means that the employment status.
dismissal must be for any of the (1) just causes
provided under the Labor Code or the company (3) Article 278(g) [263(g)] - (National Interest
rules and regulations promulgated by the Cases) where strikers who violate orders,
employer; or (2) authorized causes under the prohibitions and/or injunctions as are issued by
Labor Code; and the DOLE Secretary or the NLRC, may be
2. Procedural aspect which means that the imposed immediate disciplinary action, including
employee must be accorded both STATUTORY dismissal or loss of employment status.
DUE PROCESS AND CONTRACTUAL DUE
PROCESS. (4) Article 259(e) [248(e)] - (Union Security
Clause) where violation of the union security
 What is the distinction between JUST agreement in the CBA may result in termination of
CAUSES and AUTHORIZED CAUSES? employment. Under this clause, the bargaining
A dismissal based on a just cause means that union can demand from the employer the
the employee has committed a wrongful act or dismissal of an employee who commits a breach
omission; while a dismissal based on an of union security arrangement, such as failure to
authorized cause means that there exists a join the union or to maintain his membership in
ground which the law itself allows or authorizes to good standing therein. The same union can also
be invoked to justify the termination of an demand the dismissal of a member who commits
employee even if he has not committed any an act of disloyalty against it, such as when the
wrongful act or omission, such as installation of member organizes a rival union.
labor-saving devices, redundancy, retrenchment,
closure or cessation of business operations or  Is dismissal based on Company Code
disease. of Discipline or Company Rules and
Regulations illegal?
a. JUST CAUSES No.
 What are the just causes under the In Sampaguita Auto Transport Corporation v.
Labor Code? NLRC, the Supreme Court pronounced that the
The just causes in the Labor Code are Court of Appeals erred in ruling that the dismissal
found in the following provisions thereof: of private respondent, a bus driver of petitioner,
(1) Article 297 [282] - (Termination by the was illegal because the “grounds upon which
Employer) which provides for the following petitioners based respondent’s termination from
grounds: employment, viz.: ‘hindi lahat ng schedule
(a) Serious misconduct or willful disobedience by nailalabas,’ [‘]mababa ang revenue ng bus, laging

85
kasama an[g] asawa sa byahe’ and ‘maraming the instigator or aggressor and not the victim
naririnig na kwento tungkol sa kanya, nag-uutos who was constrained to defend himself
ng conductor para kumita sa hindi magandang should be dismissed.
paraan[,]’ xxx are not among those enumerated  Challenging superiors to a fight is a just
under Article 297 [282] of the Labor Code as just cause for termination.
causes for termination of employment.” The  Assaulting another employee is a just cause
irregularities or infractions committed by private for termination.
respondent in connection with his work as a bus  Utterance of obscene, insulting or offensive
driver constitute serious misconduct or, at the words constitutes serious misconduct.
very least, conduct analogous to serious  Gambling within company premises is a
misconduct, under the above-cited Article 297 serious misconduct.
[282] of the Labor Code. The requirement in the  Rendering service to business rival is a just
company rules that: ‘3. to obey traffic rules and cause to terminate employment.
regulations as well as the company policies. 4. to  Selling products of a competitor is a just
ensure the safety of the riding public as well as cause for termination.
the other vehicles and motorist (sic)’ is so  Organizing a credit union by employees in a
fundamental and so universal that any bus driver bank is a serious misconduct.
is expected to satisfy the requirement whether or  Deceiving a customer for personal gain is a
not he has been so informed. just cause for termination.
 Contracting work in competition with
employer constitutes serious misconduct.
I. SERIOUS MISCONDUCT  Intoxication which interferes with the
employee’s work constitutes serious
1. REQUISITES. misconduct.
For misconduct or improper behavior to  The act of a teacher in pressuring a
be a just cause for dismissal, the following colleague to change the failing grade of a
requisites must concur: student is serious misconduct.
1. It must be serious; and  Sexual harassment is a just ground to
2. It must relate to the performance of the dismiss.
employee’s duties; and  Sleeping while on duty is a ground for
3. It must show that he has become unfit to termination.
continue working for the employer.  Dismissal is too harsh a penalty for eating
while at work.
All the above three (3) requisites must concur.  Pilferage or theft of company-owned property
2.SOME PRINCIPLES ON SERIOUS is a just cause to terminate.
MISCONDUCT.  Theft of funds or property not owned by
 Serious misconduct implies that it must be of employer is not a ground to terminate.
such grave and aggravated character and not  Act of falsification is a valid ground to
merely trivial or unimportant. terminate employment.
 Simple or minor misconduct would not justify  Punching-in of time cards of other employees
the termination of the services of an is a just cause for termination.
employee.
 Possession or use of shabu or other drugs is II. INSUBORDINATION OR WILLFUL
a valid ground to terminate employment. DISOBEDIENCE OF LAWFUL ORDERS
 Immorality, as a general rule, is not a just
ground to terminate employment. The 1.REQUISITES.
exception is when such immoral conduct is One of the fundamental duties of an
prejudicial or detrimental to the interest of the employee is to obey all reasonable rules, orders
employer. and instructions of the employer. In order to
 Immoral act committed beyond office hours is validly invoke this ground, the following requisites
a valid ground to terminate employment. must be complied with, to wit:
 Sexual intercourse inside company premises 1.The employee’s assailed conduct must have
constitutes serious misconduct. been willful or intentional, the willfulness being
 The act of a 30-year old lady teacher in falling characterized by a wrongful and perverse attitude;
in love with a 16-year old student is not and
immoral. 2.The order violated must be based on a
 Fighting is a ground for termination but only reasonable and lawful company rule, regulation or

86
policy and made known to the employee and must  Tardiness or absenteeism, if habitual, may be
pertain to the duties for which he has been cited as a ground to terminate employment.
engaged to discharge.  Tardiness or absenteeism, if habitual, may be
tantamount to serious misconduct.
2.SOME PRINCIPLES ON INSUBORDINATION.  Absences or tardiness due to emergency,
 Making false allegations in complaint does ailment or fortuitous event are justified and
not constitute insubordination. may not be cited as just cause to terminate
 Failure to answer memo to explain employment.
constitutes willful disobedience.  Unsatisfactory or poor performance,
 Another notice is required in case of inefficiency and incompetence are
termination on the ground of failure to answer considered just causes for dismissal only if
memo to explain. they amount to gross and habitual neglect of
 Refusal to undergo random drug testing duties.
constitutes both serious misconduct and
insubordination.
 Refusal to render overtime to meet IV. ABANDONMENT OF WORK
production deadline constitutes
insubordination. 1.CONCEPT.
 Refusal to comply with a lawful transfer Abandonment is not provided for in the
constitutes insubordination. Labor Code but it is jurisprudentially considered a
form of neglect of duty; hence, a just cause for
termination of employment under Article 297(b)
III. GROSS AND HABITUAL NEGLECT OF [282(b)] of the Labor Code.
DUTIES
2.REQUISITES.
1.REQUISITES. To constitute abandonment, two (2)
The following are the requisites: elements must concur, namely:
(1)There must be negligence which is gross 1)The employee must have failed to report for
and/or habitual in character; and work or must have been absent without valid or
(2)It must be work-related as would make him justifiable reason; and
unfit to work for his employer. 2)There must have been a clear intention on the
part of the employee to sever the employer-
2.SOME PRINCIPLES ON GROSS AND employee relationship manifested by some overt
HABITUAL NEGLECT OF DUTIES. act.
 Simple negligence is not sufficient to
terminate employment. 3.SOME PRINCIPLES ON ABANDONMENT.
 The negligence must be gross in character  Mere absence is not enough to constitute
which means absence of that diligence that abandonment.
an ordinarily prudent man would use in his  Clear intention to sever employment
own affairs. relationship is necessary.
 As a general rule, negligence must be both  Due process in abandonment cases consists
gross and habitual to be a valid ground to only of the service of 2 notices to the
dismiss. employee, viz.:
 Habituality may be disregarded if negligence  a.First notice directing the employee to
is gross or the damage or loss is substantial. explain why he should not be declared
“Habitual negligence” implies repeated failure as having abandoned his job; and
to perform one’s duties for a period of time,  b.Second notice to inform him of the
depending upon the circumstances. employer’s decision to dismiss him on
 Actual damage, loss or injury is not an the ground of abandonment.
essential requisite.  No hearing is required to validly dismiss an
 Gross negligence may result to loss of trust employee for abandonment.
and confidence.  Notices in abandonment cases must be sent
 Absences, if authorized, cannot be cited as a to employee’s last known address per record
ground to terminate employment. of the company. The employer need not look
 Tardiness or absenteeism, if not habitual, for the employee’s current whereabouts.
cannot be cited as a ground to terminate  Immediate filing of a complaint for illegal
employment. dismissal praying for reinstatement negates

87
 abandonment.
 Lapse of time between dismissal and filing of V. FRAUD
a case is not a material indication of 1.REQUISITES.
abandonment. Hence, lapse of 2 years and 5 The following are the requisites of this
months or 20 months or 9 months or 8 ground:
months before filing the complaint for illegal 1. There must be an act, omission, or
dismissal is not an indication of concealment;
abandonment. Under the law, the employee 2.The act, omission or concealment involves a
has a 4-year prescriptive period within which breach of legal duty, trust, or confidence justly
to institute his action for illegal dismissal. reposed;
 Filing of a case to pre-empt investigation of 3.It must be committed against the employer or
the administrative case is tantamount to his/her representative; and
abandonment. 4.It must be in connection with the employees'
 When what is prayed for in the complaint is work.
separation pay and not reinstatement, the
filing of complaint does not negate 2.SOME PRINCIPLES ON FRAUD.
abandonment.  Failure to deposit collection constitutes fraud.
 It is abandonment when what is prayed for in  Lack of damage or losses is not necessary in
the complaint is separation pay and it was fraud cases. The fact that the employer did
only in the position paper that reinstatement not suffer losses from the dishonesty of the
was prayed for. dismissed employee because of its timely
 Employment in another firm coinciding with discovery does not excuse the latter from any
the filing of complaint does not indicate culpability.
abandonment.  Lack of misappropriation or shortage is
 Offer of reinstatement by employer during immaterial in case of unauthorized
proceedings before Labor Arbiter and refusal encashment of personal checks by teller and
by employee does not indicate abandonment cashier.
but more of a symptom of strained relations  Restitution does not have absolutory effect.
between the parties.
 An employee may be absolved from the
charge of abandonment of work but adjudged VI. WILLFUL BREACH OF TRUST AND
guilty of AWOL. These two grounds are CONFIDENCE
separate and distinct from each other.
 An employee who failed to report for work 1.REQUISITES.
after the expiration of the duly approved For the doctrine of loss of trust and
leave of absence is considered to have confidence to apply, the following requisites must
abandoned his job. be satisfied:
 An employee who failed to comply with the (1)The employee holds a position of trust and
order for his reinstatement is deemed to have confidence;
abandoned his work. (2)There exists an act justifying the loss of trust
 An employee who, after being transferred to and confidence, which means that the act that
a new assignment, did not report for work betrays the employer’s trust must be real, i.e.,
anymore is deemed to have abandoned his founded on clearly established facts;
job. (3)The employee’s breach of the trust must be
 An employee who deliberately absented from willful, i.e., it was done intentionally, knowingly
work without leave or permission from his and purposely, without justifiable excuse; and
employer for the purpose of looking for a job (4)The act must be in relation to his work which
elsewhere is deemed to have abandoned his would render him unfit to perform it.
work.
 Imprisonment or detention by military does 2.GUIDELINES.
not constitute abandonment. As a safeguard against employers who
 Absence to evade arrest is not a valid indiscriminately use “loss of trust and confidence”
justification. To do so would be to place an to justify arbitrary dismissal of employees, the
imprimatur on the employee’s attempt to Supreme Court, in addition to the above
derail the normal course of the administration elements, came up with the following guidelines
of justice. for the application of the doctrine:
(1)The loss of confidence must not be simulated;

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(2)It should not be used as a subterfuge for question and that mere uncorroborated
causes which are illegal, improper or unjustified; assertions and accusations by the employer
(3)It may not be arbitrarily asserted in the face of will not be sufficient. But as regards a
overwhelming evidence to the contrary; and managerial employee, the mere existence
(4)It must be genuine, not a mere afterthought, to of a basis for believing that he has breached
justify earlier action taken in bad faith. the trust of his employer would suffice for his
dismissal.
The foregoing guidelines have been  There must be “some basis” for the loss of
prescribed by the Supreme Court due to the trust and confidence which means that there
subjective nature of this ground which makes is reasonable ground to believe, if not to
termination based on loss of trust and confidence entertain the moral conviction, that the
prone to abuse. concerned employee is responsible for the
misconduct and that the nature of his
3.SOME PRINCIPLES ON THE DOCTRINE OF participation therein rendered him absolutely
LOSS OF TRUST AND CONFIDENCE. unworthy of trust and confidence demanded
 Employee’s position must be reposed with by his position.
trust and confidence.  Dismissal due to feng shui mismatch is not a
 “Position of trust and confidence” is one valid ground to lose trust and confidence.
where a person is entrusted with confidence  Command responsibility of managerial
on delicate matters, or with the custody, employees is a ground to dismiss.
handling, or care and protection of the  Confidential employee may be dismissed for
employer’s property. loss of trust and confidence.
 Two (2) classes of positions of trust. The first  Grant of promotions and bonuses negates
class consists of managerial employees or loss of trust and confidence.
those who, by the nature of their position, are  Long years of service, absence of derogatory
entrusted with confidential and delicate record and small amount involved are
matters and from whom greater fidelity to deemed inconsequential insofar as loss of
duty is correspondingly expected. They refer trust and confidence is concerned.
to those vested with the powers or  Dropping of criminal charges or acquittal in a
prerogatives to lay down and execute criminal case arising from the same act does
management policies and/or to hire, transfer not affect the validity of dismissal based on
suspend, lay-off, recall, discharge, assign or loss of trust and confidence.
discipline employees or to effectively  Full restitution does not absolve employee of
recommend such managerial actions. Their offense which resulted in the loss of trust and
primary duty consists of the management of confidence.
the establishment in which they are employed
or of a department or a subdivision thereof.
 The second class consists of fiduciary
rank-and-file employees who, though rank-
and-file, are routinely charged with the
custody, handling or care and protection of
the employer's money or property, or
entrusted with confidence on delicate
matters, and are thus classified as occupying
positions of trust and confidence. Included
under this class are “cashiers, auditors,
property custodians, or those who, in the
normal and routine exercise of their functions,
regularly handle significant amounts of [the
employer’s] money or property.”
 Rules on termination of managerial and
supervisory employees different from
those applicable to rank- and-file
employees. Thus, with respect to rank-and-
file personnel, loss of trust and confidence as
a ground for valid dismissal requires proof of
involvement in the alleged events in

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