5 2024 Golden Notes Labor Law and Social Legislations

University of Santo Tomas
FACULTY OF CIVIL LAW (1734)
LABOR LAW AND

SOCIAL LEGISLATIONS
2024 GOLDEN NOTES

FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS
MANILA
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ANGELA BEATRICE S. PEÑA CIVIL LAW
MICHAELA THELMA B. BRAVO TAXATION LAW
CAMILLE RAZEN D. SUMERA CRIMINAL LAW

LABOR LAW AND
PAULINNE STEPHANY G. SANTIAGO
SOCIAL LEGISLATION
PHILLINE KATE M. DUGAYO LEGAL AND JUDICIAL ETHICS
POLITICAL LAW AND
SARAH MAY D. MEDALLE
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DIANNE TRICIA M. INIEGO COMMERCIAL LAW
MARY GENELLE S. CLEOFAS REMEDIAL LAW
EXECUTIVE COMMITTEE
ALEA CHAIRMANE A. LOQUINARIO

COVER DESIGN ARTIST
LABOR LAW AND SOCIAL
LEGISLATIONS COMMITTEE 2024
JOHN EZEQUIEL S. LONGUI
LABOR LAW SUBJECT HEAD
MEMBERS
RANJILL JAMBEE U. SY MARIA ISABEL GALLEGO
LORRAINE MARIE D. TUMOLVA LLYRA M. SEMANA
STEPHEN NICOLE R. ARAN MARY CLAIRE G. LABANGCO
JOHN MARK M. ANCERO AUDRICE C. SERRANO
ADVISERS
DEAN SALVADOR A. POQUIZ

COMMISSIONER LEONARD VINZ O. IGNACIO
UNIVERSITY OF SANTO TOMAS
ACADEMIC OFFICIALS
ATTY. NILO T. DIVINA REV. FR. ISIDRO C. ABAÑO, O.P.
DEAN REGENT
ATTY. ARTHUR B. CAPILI

FACULTY SECRETARY
ATTY. ELGIN MICHAEL C. PEREZ

LEGAL COUNSEL
UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC
JUDGE PHILIP A. AGUINALDO

SWDB COORDINATOR
LENY G. GADIANA, R.G.C.

GUIDANCE COUNSELOR
OUR DEEPEST APPRECIATION TO OUR
MENTORS AND INSPIRATION
Dean Jacqueline O. Lopez-Kaw, DCL
Dean Salvador A. Poquiz
Commissioner Leonard Vinz Ochoa Ignacio
Labor Arbiter Benedict G. Kato
Atty. Arnold E. Cacho
Atty. Irvin Joseph Fabella
Atty. Ian Jerny E. De Leon
Atty. Roland L. Marquez
Atty. Alwyn Faye B. Mendoza
Atty. Cesar E. Santamaria, Jr.
For being our guideposts in understanding the intricate sphere of Labor Law and
Social Legislations.
-Academics Committee 2024
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REVIEW MATERIAL SHALL BE
BORNE BY THE USER
LABOR LAW AND SOCIAL LEGISLATIONS
Table of Contents
I. FUNDAMENTAL PRINCIPLES AND CONCEPTS ................................................................................................................. 1
A. SOURCES OF LABOR LAWS ............................................................................................................................................... 1

1. 1987 CONSTITUTION .................................................................................................................................................... 1
2. CIVIL CODE........................................................................................................................................................................ 4
3. LABOR CODE .................................................................................................................................................................... 5
4. DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) ISSUANCES .............................................................. 7
5. JURISPRUDENCE ............................................................................................................................................................. 7
B. STATE POLICIES ................................................................................................................................................................... 8
1. LABOR AS PRIMARY SOCIAL ECONOMIC FORCE (Sec. 18, Art. II, 1987 Constitution)............................ 8
2. FULL PROTECTION TO LABOR (Sec. 3, Art. XIII, 1987 Constitution) ........................................................... 8
3. SECURITY OF TENURE (Sec. 3, Art. XIII, 1987 Constitution) ......................................................................... 9
4. SOCIAL JUSTICE (Sec. 10, Art. II, 1987 Constitution; Art. 218, LC, as renumbered by DOLE D.A. No.
01-2015) ................................................................................................................................................................................ 9
5. EQUAL WORK OPPORTUNITIES (Sec. 3, Art. XIII, 1987 Constitution; Art. 3, LC) ................................... 9
6. RIGHT TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING (Sec. 3, Art. XIII, 1987
Constitution; Arts. 3 and 253, LC) .............................................................................................................................. 10
7. CONSTRUCTION IN FAVOR OF LABOR (Art. 4, LC; Art. 1702, NCC) ............................................................. 17
II. RECRUITMENT AND PLACEMENT OF WORKERS ........................................................................................................20
A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS (Art. 13, LC) ............................ 20
1. REGULATORY AUTHORITIES ................................................................................................................................... 21
a. DEPARTMENT OF MIGRANT WORKERS (Secs. 4-6, R.A. No. 11641) ..................................................... 21
The POEA created under E.O. No. 247, as amended, and all the entities, agencies and units are
consolidated and merged, and hereby constituted as the Department of Migrant Workers
(DMW). (Sec. 4, R.A. No. 11641) ............................................................................................................................ 21
b. DOLE SECRETARY; REGULATORY AND VISITORIAL POWERS (Arts. 33, 36, and 37, LC) ............... 25
2. REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES ................................................................ 25
a. BAN ON DIRECT HIRING; EXCEPTIONS (Art. 18, LC) ................................................................................. 25
b. ENTITIES AND PERSONS PROHIBITED FROM RECRUITING (Art. 26, LC; Sec. 6(j), R.A. No. 8042,
as amended by R.A. No. 10022; Sec. 3, Rule 1, Part II, Revised POEA Rules 2016 for Land-Based
Workers) ........................................................................................................................................................................ 26
c. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY (Art. 29, LC) .................................................... 28
d. SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY (Art. 35, LC; Secs. 101 and 104,
Rule I, Part III, Revised POEA Rules 2016 for Land-Based Workers)....................................................... 29
e. PROHIBITED PRACTICES – (Art. 34, R.A. No. 8042, as amended by Sec. 6, R.A. No. 10022; Sec.
76, Rule X, Part I, POEA Rules 2016 for Land-Based Workers) .................................................................. 35
f. ILLEGAL RECRUITMENT ........................................................................................................................................ 38
i. ELEMENTS AND TYPES (Art. 38, LC; Sec. 6, R.A. No. 8042, as amended by R.A. No. 10022) .... 41
ii. ILLEGAL RECRUITMENT VS. ESTAFA (Sec. 6, R.A. No. 8042, as amended by R.A. No. 10022;
Art. 315(2)(a), RPC) .............................................................................................................................................. 42
g. SOLIDARY LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN EMPLOYER (Sec. 10, R.A.
No. 8042, as amended by R.A. No. 10022; Theory of Imputed Knowledge) .......................................... 43
h. TERMINATION OF CONTRACT OF MIGRANT WORKERS (Sec. 10, R.A. No. 8042, as amended by
R.A. 10022) .................................................................................................................................................................... 46
B. EMPLOYMENT OF NON-RESIDENT ALIENS (Arts. 40-42, LC; Secs. 1-3 and 12-14, as amended by
DOLE D.O. No. 221-21; Secs. 1-3 and 7-8, DOLE D.O. No. 205-19)........................................................................ 49
2024 GOLDEN NOTES
III. EMPLOYER-EMPLOYEE RELATIONSHIP ....................................................................................................................... 56
A. EMPLOYER-EMPLOYEE RELATIONSHIP ....................................................................................................................56

1. TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP (Sec. 3, Rule I-A, DOLE D.O. No.
147-15).................................................................................................................................................................................58
2. KINDS OF EMPLOYMENT (Arts. 295-296, LC) ...................................................................................................63
a. REGULAR ....................................................................................................................................................................63
b. CASUAL ........................................................................................................................................................................69
c. PROBATIONARY........................................................................................................................................................70
d. PROJECT .....................................................................................................................................................................78
e. SEASONAL ...................................................................................................................................................................81
f. FIXED-TERM ...............................................................................................................................................................82
3. RELATED CONCEPTS ...................................................................................................................................................85
a. FLOATING STATUS (Art. 301, LC; DOLE D.O. No. 215-20)..........................................................................85
b. EMPLOYMENT SUBJECT TO A SUSPENSIVE CONDITION ...........................................................................88
IV. LABOR STANDARDS ............................................................................................................................................................. 95
A. CONDITIONS OF EMPLOYMENT ...................................................................................................................................95

1. COVERED EMPLOYEES; EXCEPTIONS (Art. 82, LC; Secs. 1-2, Rule I, Book III, Omnibus Rules
Implementing the Labor Code) ...................................................................................................................................95
2. HOURS OF WORK .........................................................................................................................................................98
a. NORMAL HOURS OF WORK (Arts. 83-84, LC; Secs. 3-4, Rule I, Book III, Omnibus Rules
Implementing the Labor Code) ..............................................................................................................................98
b. MEAL PERIODS (Art. 85, LC; Sec. 7, Rule I, Book III, Omnibus Rules Implementing the Labor
Code) ............................................................................................................................................................................. 105
c. NIGHT-SHIFT (Art. 86, LC; Secs. 1-6, Rule II, Book III, Omnibus Rules Implementing the Labor
Code) ............................................................................................................................................................................. 106
d. OVERTIME WORK (Arts. 87-90, LC; Secs. 8-10, Rule I, Book III, Omnibus Rules Implementing
the Labor Code) ......................................................................................................................................................... 107
e. COMPRESSED WORK WEEK, FLEXIBLE WORK ARRANGEMENT, ALTERNATIVE WORK
ARRANGEMENTS, TELECOMMUTING PROGRAM (DOLE D.A. No. 02-04; DOLE D.A. No. 02-09; DOLE
D.A. No. 04-10; Secs. 3-5, R.A. No. 11165) ........................................................................................................ 113
f. NON-COMPENSABLE HOURS.............................................................................................................................. 116
3. REST PERIODS (Arts. 91-93, LC; Secs. 1-9, Rule III, Book III, Omnibus Rules Implementing the
Labor Code) ..................................................................................................................................................................... 116
4. HOLIDAYS (Art. 94, LC; Secs. 1-11, Rule IV, Book III, Omnibus Rules Implementing the Labor
Code) .................................................................................................................................................................................. 118
5. SERVICE CHARGES (Art. 96, LC; Secs. 1-7, Rule VI, Book III, Omnibus Rules Implementing the
Labor Code; R.A. No. 11360; DOLE D.O. No. 206-19; DOLE L.A. No. 14-19) ............................................... 120
6. OCCUPATIONAL SAFETY AND HEALTH STANDARDS LAW (Secs. 4-6, 8 and 12, R.A. No. 11058) .. 121
B. WAGES................................................................................................................................................................................ 124
1. COMPONENTS AND EXCLUSIONS ......................................................................................................................... 124
a. WAGES (Art. 97(f), LC) ....................................................................................................................................... 124
b. FACILITIES .............................................................................................................................................................. 125
c. SUPPLEMENTS ....................................................................................................................................................... 126
d. BONUS ...................................................................................................................................................................... 127
e. 13TH MONTH PAY (P.D. No. 851; Revised Guidelines on The Implementation of the 13th Month
Pay Law) ....................................................................................................................................................................... 127
f. HOLIDAY PAY (Art. 94, LC; Secs. 1-7, Rule IV, Book III, Omnibus Rules Implementing the Labor
Code) ............................................................................................................................................................................. 134
2. PRINCIPLES ................................................................................................................................................................. 139
a. NO WORK, NO PAY ................................................................................................................................................ 139
b. EQUAL PAY FOR EQUAL WORK ......................................................................................................................... 140
c. FAIR WAGE FOR FAIR WORK ............................................................................................................................. 140
d. NON-DIMINUTION OF BENEFITS (Art. 100, LC) ......................................................................................... 141
3. PAYMENT OF WAGES ................................................................................................................................................ 143
4. PROHIBITIONS REGARDING WAGES ................................................................................................................... 145
5. WAGE DISTORTION (Art. 124, LC) ....................................................................................................................... 148
6. MINIMUM WAGE (Art. 99, LC; Secs. 7, 9 and 15, Rule VII, Book III, Omnibus Rules Implementing
the Labor Code) .............................................................................................................................................................. 152
C. LEAVES ............................................................................................................................................................................... 153
1. SERVICE INCENTIVE LEAVES (Art. 95, LC; Secs. 1-6, Rule V, Book III, Omnibus Rules Implementing
the Labor Code) .............................................................................................................................................................. 153
2. LEAVES UNDER SPECIAL LAWS ............................................................................................................................. 155
a. EXPANDED MATERNITY LEAVE (R.A. No. 11210) ...................................................................................... 156
b. PATERNITY LEAVE (R.A. No. 8187, as amended by R.A. No. 11210) ................................................... 164
c. SOLO PARENT LEAVE (R.A. No. 8972, as amended by R.A. No. 11861) .............................................. 165
d. GYNECOLOGICAL LEAVE (R.A. No. 9710) ...................................................................................................... 168
e. BATTERED WOMAN LEAVE (R.A. No. 9262) ................................................................................................ 170
D. SPECIAL GROUPS OF EMPLOYEES ............................................................................................................................ 171
1. WOMEN (Arts. 130 and 132-136, LC) ................................................................................................................. 171
2. MINORS (R.A. No. 7610, as amended by R.A. No. 9231) .............................................................................. 175
3. KASAMBAHAYS (R.A. No. 10361) ......................................................................................................................... 182
4. HOMEWORKERS (Arts. 151-153, LC) ................................................................................................................. 190
5. NIGHT WORKERS (Arts. 154-161, LC)................................................................................................................ 192
6. APPRENTICES AND LEARNERS (Arts. 58-60 and 73-74, LC) ...................................................................... 194
7. PERSONS WITH DISABILITIES (R.A. No. 7277, as amended by R.A. No. 9442, R.A. No. 10070, and
R.A. No. 10524) ............................................................................................................................................................... 196
E. SEXUAL HARASSMENT IN THE WORK ENVIRONMENT (R.A. No. 7877); SAFE SPACES ACT (R.A. No.
11313, Art IV) ...................................................................................................................................................................... 199
F. DISCRIMINATORY PRACTICES .................................................................................................................................... 206
1. AGE (R.A. No. 10911) ................................................................................................................................................ 206
2. GENDER AND MARITAL STATUS (R.A. No. 9710) ............................................................................................ 207
3. PREGNANCY (Sec. 23(c), R.A. No. 10354) ......................................................................................................... 209
4. ILLNESS (DOLE D.A. No. 05-10; DOLE D.O. No. 73-05) .................................................................................. 209
5. SOLO PARENTS (Sec. 7, R.A. No. 8972, as amended by R.A. No. 11861) ................................................. 209
6. PERSONS WITH DISABILITY (R.A. No. 7277, as amended) ........................................................................ 210
V. SOCIAL WELFARE BENEFITS ........................................................................................................................................... 213
A. SSS LAW (R.A. No. 8282, as amended by R.A. No. 11199) ............................................................................... 213
1. BENEFITS; COVERAGE AND EXCLUSIONS .......................................................................................................... 214
2. DEPENDENTS AND BENEFICIARIES .................................................................................................................... 225
B. GSIS LAW (R.A. No. 8291) ........................................................................................................................................... 228
1. BENEFITS; COVERAGE AND EXCLUSIONS .......................................................................................................... 228
2024 GOLDEN NOTES
2. DEPENDENTS AND BENEFICIARIES .................................................................................................................... 236
C. LIMITED PORTABILITY LAW (R.A. No. 7699) ....................................................................................................... 237
D. DISABILITY AND DEATH BENEFITS; LABOR CODE AND CIVIL CODE .......................................................... 238
E. CLAIMS OF SEAFARERS; 2010 STANDARD TERMS AND CONDITIONS GOVERNING THE OVERSEAS
EMPLOYMENT OF FILIPINO SEAFARERS ON-BOARD OCEAN-GOING SHIPS (Secs. 20, 32 and 32-A) .... 246
VI. MANAGEMENT PREROGATIVE ..................................................................................................................................... 264
A. OCCUPATIONAL QUALIFICATIONS ........................................................................................................................... 267

B. PRODUCTIVITY STANDARDS ..................................................................................................................................... 268
C. CHANGE OF WORKING HOURS .................................................................................................................................. 269
D. TRANSFER OF EMPLOYEES ........................................................................................................................................ 271
E. DISCIPLINE OF EMPLOYEES ....................................................................................................................................... 272
F. GRANT OF BONUSES AND OTHER BENEFITS ........................................................................................................ 273
G. CLEARANCE PROCESS ................................................................................................................................................... 275
H. POST-EMPLOYMENT RESTRICTIONS ...................................................................................................................... 275
VII. POST-EMPLOYMENT ....................................................................................................................................................... 277
A. TERMINATION OF EMPLOYMENT BY EMPLOYER............................................................................................... 277

1. JUST CAUSES (Art. 297, LC; DOLE D.O. No. 147-15) ....................................................................................... 279
2. AUTHORIZED CAUSES (Arts. 298-299, LC; DOLE D.O. No. 147-15) .......................................................... 294
3. DUE PROCESS REQUIREMENTS (Art. 292 (b), LC; DOLE D.O. No. 147-15) ............................................ 306
B. TERMINATION OF EMPLOYMENT BY EMPLOYEE ............................................................................................... 310
A. RESIGNATION VS. CONSTRUCTIVE DISMISSAL (Art. 300, LC) ................................................................... 311
B. ABANDONMENT ........................................................................................................................................................ 317
C. PREVENTIVE SUSPENSION (Secs. 3-4, Rule XIV, Book V, Omnibus Rules Implementing the Labor
Code) ....................................................................................................................................................................................... 317
D. RELIEFS FROM ILLEGAL DISMISSAL (Art. 294, LC) ............................................................................................ 318
E. RETIREMENT (Art. 302, LC) ....................................................................................................................................... 333
VIII. LABOR RELATIONS ........................................................................................................................................................ 340
A. RIGHT TO SELF-ORGANIZATION............................................................................................................................... 340

1. COVERAGE AND ELIGIBILITY FOR MEMBERSHIP; EXCEPTIONS (Arts. 253-255, LC; Secs. 1-2, Rule
II, DOLE D.O. No. 40-03) ............................................................................................................................................... 340
2. DOCTRINE OF NECESSARY IMPLICATION (CONFIDENTIAL EMPLOYEES) ............................................. 341
3. BARGAINING UNIT (Sec. 1(e), Rule I, DOLE D.O. No. 40-03) ...................................................................... 341
a. COMMINGLING OR MIXED MEMBERSHIP .................................................................................................... 345
b. INCLUSION AS MEMBERS OF EMPLOYEES OUTSIDE THE BARGAINING UNIT (Art. 256, LC) ..... 346
4. REGISTRATION OF UNIONS, CHARTERING, CANCELLATION OF REGISTRATION (Arts. 240, 241, 245
and 247, LC) ..................................................................................................................................................................... 347
5. SOLE AND EXCLUSIVE BARGAINING AGENT (SEBA) (Sec. 1(u), Rule I, DOLE D.O. No. 40-03);
MODES TO ACQUIRE STATUS (DOLE D.O. No. 40-I-15) ..................................................................................... 348
a. SEBA CERTIFICATION (Sec. 1, Rule I, DOLE D.O. No. 40-03, as amended by DOLE D.O. No. 40-J-
22) .................................................................................................................................................................................. 349
b. CERTIFICATION AND CONSENT ELECTION (Rules VII and VIII, DOLE D.O. No. 40-03, as
amended) .................................................................................................................................................................... 350
c. BARS TO HOLDING OF CERTIFICATION ELECTION ................................................................................... 354
(Sec. 14, Rule VIII and Sec. 7, Rule XVII, , DOLE D.O. No. 40-03, as amended; Sec. 14(e), Rule III,
Book V, Omnibus Rules Implementing the Labor Code) ............................................................................. 354
d. FAILURE OF ELECTION, RUN-OF ELECTION, RE-RUN ELECTION (Secs. 17-19, Rule IX, DOLE D.O.
No. 40-03, as amended) .......................................................................................................................................... 359
6. EMPLOYER AS A MERE BYSTANDER RULE (Sec. 1, Rule IX, DOLE D.O. No. 40-03, as amended) ... 360
B. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS ............................................................................................ 360
1. CHECK OFF, ASSESSMENT, AND AGENCY FEES (Arts. 250 (n), (o) and 259 (e), LC; Sec. 1, Rule XIII,
DOLE D.O. No. 40-03) .................................................................................................................................................... 367
2. COLLECTIVE BARGAINING ..................................................................................................................................... 369
a. PROCEDURE IN BARGAINING (Art. 261, LC) ................................................................................................ 370
b. DUTY TO BARGAIN COLLECTIVELY (Arts. 262-264, LC) ......................................................................... 371
c. ECONOMIC PROVISIONS AND CONDITIONS ................................................................................................. 372
d. NON-ECONOMIC PROVISIONS AND CONDITIONS ...................................................................................... 373
e. MANDATORY PROVISIONS IN A COLLECTIVE BARGAINING AGREEMENT ........................................ 375
f. FREEDOM PERIOD ................................................................................................................................................. 375
g. UNION SECURITY CLAUSE .................................................................................................................................. 376
C. UNFAIR LABOR PRACTICES ........................................................................................................................................ 376
1. BY EMPLOYERS (Art. 259, LC) ............................................................................................................................... 377
2. BY LABOR ORGANIZATIONS (Art. 260, LC) ....................................................................................................... 383
D. PEACEFUL CONCERTED ACTIVITIES ....................................................................................................................... 386
1. STRIKES, PICKETING, AND LOCKOUTS (Art. 278, LC; Rule XIII, Book V, Omnibus Rules
Implementing the Labor Code) ................................................................................................................................ 387
2. ASSUMPTION OF JURISDICTION BY SECRETARY OF LABOR AND EMPLOYMENT (Art. 278 (g), LC;
DOLE D.O. No. 40-H-13) ............................................................................................................................................... 406
IX. JURISDICTION AND REMEDIES ..................................................................................................................................... 410
A. LABOR ARBITER............................................................................................................................................................. 410

1. JURISDICTION (Arts. 124 and 224, LC; Sec. 10, R.A. No. 8042, as amended by R.A. No. 10022; Sec.
1, Rule V, 2011 NLRC Rules of Procedure, as amended) .................................................................................. 410
2. MODE OF APPEAL TO THE NLRC (Rule VI, 2011 NLRC Rules of Procedure, as amended) .............. 415
3. REINSTATEMENT AND/OR EXECUTION PENDING APPEAL (Art. 229, LC; Sec. 12, Rule IX, 2011
NLRC Rules of Procedure, as amended) ................................................................................................................ 419
B. NATIONAL LABOR RELATIONS COMMISSION....................................................................................................... 424
1. JURISDICTION ............................................................................................................................................................. 429
a. ORIGINAL (Arts. 225 (d), (e) and 278 (g), LC; Sec. 1, Rule XII, 2011 NLRC Rules of Procedure, as
amended)..................................................................................................................................................................... 429
b. APPELLATE (Art. 129, LC; Sec. 1, Rule VI, 2011 NLRC Rules of Procedure, as amended)........... 429
2. MODE OF APPEAL AND REQUISITES .................................................................................................................. 429
C. COURT OF APPEALS; REQUISITES (Rule 65, ROC) ............................................................................................. 430
D. SUPREME COURT; REQUISITES (Rule 45, ROC) .................................................................................................. 431
E. BUREAU OF LABOR RELATIONS; JURISDICTION AND PROCEDURE (Rule XI, DOLE D.O. No. 40- 03)
................................................................................................................................................................................................... 432
F. NATIONAL CONCILIATION AND MEDIATION BOARD (E.O. No. 126, as amended by E.O. No. 251);
CONCILIATION V. MEDIATION ........................................................................................................................................ 435
G. DOLE REGIONAL DIRECTORS; JURISDICTION (Arts. 128-129, LC; Secs. 2 and 3(a), Rule X, Book III,
Omnibus Rules Implementing the Labor Code) ...................................................................................................... 440
H. DOLE SECRETARY .......................................................................................................................................................... 443
1. VISITORIAL AND ENFORCEMENT POWERS (Arts. 128 and 289, LC) ....................................................... 445
2024 GOLDEN NOTES
2. POWER TO SUSPEND EFFECTS OF TERMINATION (Art. 292 (b), LC) ...................................................... 447
I. VOLUNTARY ARBITRATOR; JURISDICTION AND PROCEDURE (Arts. 274-277, LC; Revised Procedural
Guidelines in the Conduct of Voluntary Arbitration Proceedings) .................................................................. 449
J. PRESCRIPTION OF ACTIONS ....................................................................................................................................... 455
1. MONEY CLAIMS (Art. 306, LC) .............................................................................................................................. 455
2. ILLEGAL DISMISSAL (Art. 1146, NCC) ................................................................................................................ 455
3. UNFAIR LABOR PRACTICES (Art. 305, LC) ........................................................................................................ 457
4. ILLEGAL RECRUITMENT (Sec. 12, R.A. No. 8042, as amended) ................................................................ 457
SUMMARY OF PRESCRIPTION OF ACTIONS ................................................................................................................... 457
SUMMARY OF JURISDICTIONS ............................................................................................................................................ 458
LEGEND Secretary of Labor and
SOLE -
Bona Fide Occupational Employment
BFOQ -
Qualification ULP - Unfair Labor Practice
BLR - Bureau of Labor Relations UT - Undertime
CB - Collective Bargaining VA - Voluntary Arbitrator
CBA - Collective Bargaining Agreement VR - Voluntary Recognition
CBN - Collective Bargaining Negotiation WD - Wage Distortion
CE - Certification Election WRD - Weekly Rest Day
Department of Labor and
DOLE -
Employment
DMW - Department of Migrant Workers
Ee - Employee I. FUNDAMENTAL PRINCIPLES AND CONCEPTS
Er - Employer
GBOSH - Gender-Based Online Harrassment
GBSH - Gender-Based Harrassment
Implementing Rules and A. SOURCES OF LABOR LAWS
IRR -
Regulations
LA - Labor Arbiter
LC - Labor Code
LLO - Legitimate Labor Organization 1. 1987 CONSTITUTION
LOA - Leave of Absence
MH - Muslim Holiday Declaration of Principles and State Policies
NCC - New Civil Code
National Conciliation and 1. Sec. 9, Art. II – The State shall promote a just
NCMB -
Mediation Board and dynamic social order that will ensure the
National Labor Relations prosperity and independence of the nation and
NLRC -
Commission free the people from poverty through policies
NSD - Night Shift Differential that provide adequate social services, promote
OFW - Overseas Filipino Worker full employment, a rising standard of living, and
OT - Overtime an improved quality of life for all.
PCE - Petition for Certification Election
Pre-Employment Medical 2. Sec. 10, Art. II – The State shall promote social
PEME -
Examination justice in all phases of national development.
Philippine Overseas Employment
POEA -
Administration 3. Sec. 14, Art. II - The State recognizes the role of
PPD - Permanent Partial Disability women in nation-building, and shall ensure the
PTD - Permanent Total Disability fundamental equality before the law of women
RD - Regional Director and men.
RH - Regular Holiday
Regional Tripartite Wages and Law: R.A. No. 9710 – Magna Carta of Women
RTWPB -
Productivity Boards
RW - Regular Wage 4. Sec. 18, Art. II – The State affirms labor as a
RWD - Regular Working Day primary social economic force. It shall protect
Sole and Exclusive Bargaining the rights of workers and promote their welfare.
SEBA -
Agent
SEnA - Single Entry Approach 5. Sec. 20, Art. II – The State recognizes the
SLB - Special Leave Benefit indispensable role of the private sector,
SIL - Service Incentive Leave encourages private enterprise, and provides
incentives to needed investments.
1 U N I V E R SI T Y O F SA N TO TO M A S
2024 GOLDEN NOTES
Bill of Rights It shall guarantee the rights of all workers to
self-organization, collective bargaining and
1. Sec. 1, Art. III - No person shall be deprived of negotiations, and peaceful concerted activities,
life, liberty, or property without due process of including the right to strike in accordance with
law, nor shall any person be denied the equal law. They shall be entitled to security of tenure,
protection of the laws. humane conditions of work, and a living wage.
They shall also participate in policy and
2. Sec. 4, Art. III – No law shall be passed abridging decision-making processes affecting their
the freedom of speech, of expression, or of the rights and benefits as may be provided by law.
press, or the right of the people peaceably to The State shall promote the principle of shared
assemble and petition the government for responsibility between workers and Ers and the
redress of grievances. preferential use of voluntary modes in settling
disputes, including conciliation, and shall
3. Sec. 8, Art. III – The right of the people, enforce their mutual compliance therewith to
including those employed in the public and foster industrial peace.
private sectors, to form unions, associations, or
societies for purposes not contrary to law shall The State shall regulate the relations between
not be abridged. workers and Ers, recognizing the right of labor
to its just share in the fruits of production and
Law: E.O. No. 180 s. 1987 providing guidelines the right of enterprises to reasonable returns to
for the exercise of the right to organize of investments, and to expansion and growth.
government Ees, creating a Public Sector Labor
Management Council and for other purposes. 3. Sec. 13, Art. XIII – The State shall establish a
special agency for disabled persons for their
4. Sec. 10, Art. III – No law impairing the rehabilitation, self-development and self-
obligation of contracts shall be passed. reliance and their integration into the
mainstream of society.
5. Sec. 16, Art. III – All persons shall have the right
to a speedy disposition of their cases before all Law: R.A. No. 7277 – Magna Carta for Disabled
judicial, quasi-judicial, or administrative bodies. Person
6. Sec. 18(2), Art. III – No involuntary servitude in 4. Sec. 14, Art. XIII – The State shall protect
any form shall exist except as a punishment for working women by providing safe and healthful
a crime whereof the party shall have been duly working conditions, taking into account their
convicted. maternal functions, and such facilities and
opportunities that will enhance their welfare
Social Justice and Human Rights and enable them to realize their full potential in
the service of the nation.
1. Sec. 2, Art. XIII – The promotion of social justice
shall include the commitment to create Law: R.A. No. 9710 – Magna Carta of Women
economic opportunities based on freedom of
initiative and self-reliance. Q: Are the constitutional provisions on labor
self-executing?
2. Sec. 3, Art. XIII – The State shall afford full
protection to labor, local and overseas, A: The constitutional mandates of protection to
organized and unorganized, and promote full labor and security of tenure may be deemed as self-
employment and equality of employment executing in the sense that these are automatically
opportunities for all. acknowledged and observed without need for any
enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee
U N I V E R SI T Y O F S A N TO T O M AS 2
2024 GOLDEN NOTES
the full exercise of the rights embodied therein, and Restrictions to Management Rights
the realization of ideals therein expressed, would be
impractical, if not unrealistic. The espousal of such Management rights are never absolute. Under the
view presents the dangerous tendency of being Constitution, the right to own and operate economic
overbroad and exaggerated. (Agabon v. NLRC, G.R. enterprises is subject to the duty of the State to
No. 158693, 17 Nov. 2004) promote distributive justice and to intervene when
the common good so demands.
Basic Rights of Workers Guaranteed by the Management rights are subject to limitations
Constitution provided by:
1. Security of tenure; 1. Law;

2. Living wage; 2. Contract, whether individual or collective;
3. Share in the fruits of production; and
4. Just and humane working conditions; 3. General principles of fair play and justice.
5. Self-organization;
6. Collective bargaining; Balancing of Rights between Labor and Capital
7. Collective negotiations;
8. Engage in peaceful concerted activities, 1. It should not be deduced that the basic policy is
including the right to strike; and in favor of labor to prejudice capital. The basic
9. Participate in policy and decision-making policy is to balance or to coordinate the rights
processes. (Sec. 3, Art. XIII, 1987 Constitution) and interests of both workers and Ers. (Azucena,
2016)
Rights of Management
Arts. 3 and 4 of the Labor Code (LC) explicitly
It should not be supposed that every labor dispute recognize shared responsibility of the Ers and
will be automatically decided in favor of labor. workers and the right of enterprise to
Management also has its own rights which are reasonable returns on investment and to
entitled to respect and enforcement in the interest expansion and growth. (Ibid.)
of simple fair play. (Sosito v. Aguinaldo Development
Corp., G.R. No. 48926, 24 Dec. 1987) 2. In employment bargaining, there is no doubt
that the Er stands on higher footing than the Ee.
NOTE: The Secretary of Labor (SOLE) is duly The law must protect labor, at least, to the
mandated to equally protect and respect not only extent of raising him to equal footing in
the laborer, but also the management. bargaining relations with capital and to shield
him or her from abuses brought about by the
Fundamental Management Rights (S-P-I-T) necessity for survival. (Sanchez v. Harry Lyons
Construction Inc., G.R. No. L-2779, 18 Oct. 1950)
1. Right to Select Ees;
2. Right to Prescribe rules; 3. Yet, the Constitution has not overlooked the
3. Right to reasonable return on Investments; rights of capital. The State is mandated to
and regulate the relations between workers and Ers.
4. Right to Transfer or discharge Ees.
While labor is entitled to a just share in the
Management has the right to regulate all aspects of fruits of production, the enterprise has the right
employment which include, among others, work not only to reasonable returns on investments,
assignment, working methods and place, and but also to expansion and growth. (Sec. 3, Art.
manner of work. (Marsman & Co., Inc. v. Sta. Rita, G.R. XIII, 1987 Constitution)
No. 194765, 23 Apr. 2018)
2024 GOLDEN NOTES
Q: What are the salient features of the protection allowing contractualization in all areas needed
to labor provision of the Constitution? (1998 in the employer’s business operations.
BAR) However, to soften the impact of these new
measures, the law requires that all employers
A: The salient features of the Protection to Labor shall obtain mandatory unemployment
provision of the Constitution are as follows: insurance coverage for all their employees.
1) Extent of Protection – Full protection to The constitutionality of the two (2) laws is
labor; challenged in court. As Judge, how will you rule?
(2009 BAR)
2) Coverage of Protection – Local and
overseas, organized and unorganized; A: If I were the Judge, I would rule against the
constitutionality of the first law and rule in favor of
3) Employment Policy – Full employment and the constitutionality of the second law. As to the
equality of employment opportunities for first innovative measure, which abolishes the
all; security of tenure clause in the LC, is
unconstitutional as it goes against the
Guarantees: constitutional provision granting workers the right
to security of tenure under Sec. 3, Art. XIII, of the
4) Unionism and Method of Determination 1987 Constitution.
of Conditions of Employment – Right of all
workers to self-organization, CBNs; As to the second innovative measure, which allows
contractualization in all areas needed in the
5) Concerted Activities – Right to engage in employer’s business operations, is constitutional.
peaceful concerted activities, including the There is no constitutional prohibition against
right to strike in accordance with law; contractualization. However, the new law cannot
prejudice employees who have acquired security of
6) Working Conditions – Right to security of tenure.
tenure, humane conditions of work, and a
living wage;
2. CIVIL CODE
7) Decision Making Processes – Right to

participate in policy and decision-making 1. Art. 19 – Every person must, in the exercise of
processes affecting their rights and benefits his rights and in the performance of his duties,
act with justice, give everyone his due, and
as may be provided by law; and
observe honesty and good faith.
8) Share in Fruits of Production –
This is known as the “Principle of Abuse of
Recognition of right of labor to its just share
in fruits of production. (Sec. 3, Art. XIII, 1987 Rights.”
Constitution)
2. Art. 1700 – The relations between capital and
Q: In her State of the Nation Address (SONA), the labor are not merely contractual. They are so
impressed with public interest that labor
President stressed the need to provide an
contracts must yield to the common good.
investor-friendly business environment so that
the country can compete in the global economy Therefore, such contracts are subject to the
special laws on labor unions, collective
that now suffers from a crisis bordering on
bargaining, strikes and lock outs, closed-shop,
recession. Responding to the call, Congress
passed two innovative legislative measures, wages, working conditions, hours of labor, and
similar subjects.
namely: (1) a law abolishing the security of
tenure clause in the Labor Code; and (2) a law
2024 GOLDEN NOTES
3. Art. 1701 – Neither capital nor labor shall act if the death or personal injury arose out of and
oppressively against the other or impair the in the course of the employment. The employer
interest or convenience of the public. is also liable for compensation if the employee
contracts any illness or disease caused by such
This is known as the “Principle of Non- employment or as the result of the nature of the
Oppression.” employment. If the mishap was due to the
employee's own notorious negligence, or
4. Art. 1702 – In case of doubt, all labor legislation voluntary act, or drunkenness, the employer
and all labor contracts shall be construed in shall not be liable for compensation. When the
favor of the safety and decent living for the employee's lack of due care contributed to his
laborer. death or injury, the compensation shall be
equitably reduced.
5. Art. 1703 – No contract which practically
amounts to involuntary servitude, under any 14. Art. 1712 – If the death or injury is due to the
guise whatsoever, shall be valid. negligence of a fellow worker, the latter and the
employer shall be solidarily liable for
6. Art. 1704 – In collective bargaining, the labor compensation. If a fellow worker's intentional
union or members of the board or committee or malicious act is the only cause of the death or
signing the contract shall be liable for non- injury, the employer shall not be answerable,
fulfillment thereof. unless it should be shown that the latter did not
exercise due diligence in the selection or
7. Art. 1705 – The laborer’s wages shall be paid in supervision of the plaintiff's fellow worker.
legal currency.
3. LABOR CODE
8. Art. 1706 – Withholding of the wages, except
for a debt due, shall not be made by the
Presidential Decree (P.D.) No. 442, otherwise known
employer.
as the “Labor Code of the Philippines”, is a decree
instituting a Labor Code, thereby revising and
9. Art. 1707 – The laborer’s wages shall be a lien
consolidating labor and social laws to afford
on the goods manufactured or the work done.
protection to labor, promote employment and
human resources development, and ensure
10. Art. 1708 – The laborer’s wages shall not be
subject to execution or attachment, except for industrial peace based on social justice. It is a
debts incurred for food, shelter, clothing, and charter of human rights and a bill of obligations for
every working man.
medical attendance.
11. Art. 1709 – The employer shall neither seize Date of Effectivity
nor retain any tool or other articles belonging
to the laborer. P.D. No. 442 was signed into law on 01 May 1974 and
took effect on 01 Nov. 1974, six (6) months after its
promulgation.
12. Art. 1710 – Dismissal of laborers shall be
subject to the supervision of the Government,
Declaration of Basic Policy
under special laws.
13. Art. 1711 – Owners of enterprises and other The State shall:
1. Afford full protection to labor;
employers are obliged to pay compensation for
2. Promote full employment;
the death of or injuries to their laborers,
workmen, mechanics, or other employees, even 3. Ensure equal work opportunities regardless of
sex, race, or creed;
though the event may have been purely
accidental or entirely due to a fortuitous cause,
2024 GOLDEN NOTES
4. Regulate the relations between workers and Ee is to file a complaint before the Department of
Ers; and Foreign Affairs (DFA). (Duka, 2016)
5. Assure the rights of workers to self-
organization, collective bargaining, security of 5. Corporate officers/intra-corporate disputes
tenure, and just and humane conditions of under P.D. No. 902-A and now falls under the
work. (Art. 3, LC) jurisdiction of the regular courts pursuant to
the Securities Regulation Code (SRC);
Rule-Making Power Granted by the Labor Code
6. Local water district, except where the NLRC’s
The Department of Labor and Employment (DOLE) jurisdiction is invoked; and
through the SOLE and other Government agencies
charged with the administration and enforcement of 7. As may otherwise be provided by the LC.
the LC or any of its parts shall promulgate the
necessary IRRs. (Art. 5, LC) Test to Determine the Applicability of the LC to
GOCCs
Limitations to the Rule-Making Power Granted
by the Labor Code When a GOCC is created by a special charter, it is
subject to the provisions of the Civil Service Law.
1. It must be issued under the authority of law; while those incorporated under the general
2. It must not be contrary to law and the corporation law are subject to the provisions of the
Constitution; and LC. (PNOC-EDC v. Leogardo, G.R. No. 58494, 05 July
3. It must not go beyond the law itself. 1989)
A rule or regulation promulgated by an Labor Dispute between Government Ees

administrative body to implement a law in excess of
its rule-making power is void. (Azucena, 2016) It is the Public Sector Labor-Management Council,
not the DOLE, which shall hear the dispute. (Sec. 15,
An administrative interpretation which takes away E.O. No. 180, 01 June 1987)
a benefit granted in the law is ultra vires, that is,
beyond one’s power. (CBTC Employees Union v. Clave, Applicability without Er-Ee Relationship
G.R. No. L-49582, 07 Jan. 1986)
The LC may apply even if the parties are not Ers and
Applicability of Labor Code Ees of each other. It is not correct to say that
employment relationship is a pre-condition to the
GR: All rights and benefits granted to workers under applicability of the Code (e.g., illegal recruitment,
the LC shall apply alike to all workers, whether misuse of POEA license). (Azucena, 2016)
agricultural or non-agricultural. (Art. 6, LC)
Likewise, in legitimate independent job-
XPNs: contracting arrangements under Art. 106 of the LC,
1. Government Ees; in case of non-payment of the wages of the agency
2. Ees of government-owned and controlled Ees and other monetary benefits under the Service
corporations (GOCCs) created by special or Contract, said monetary claims shall be the joint
original charter; and solidary liability of the principal and the job
3. Foreign governments; contractor. So too, in security of tenure cases where
4. International agencies; the agency Ees are claiming that they are regular
Ees already of the principal where they occupy core
NOTE: International organizations and positions and performing functions which are
intergovernmental bodies are not covered by the necessary and desirable in the usual business or
Philippine Labor Laws. The remedy of the aggrieved trade of the principal who likewise gets to exercise
control and supervision over them. (Cacho, 2022)
2024 GOLDEN NOTES
Extraterritorial Application of LC attendants at the moment they got married. Is
the policy valid? Explain your answer. (2017
Whether employed locally or overseas, all Filipino Bar)
workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to A: The policy is NOT VALID. It violates the provision
the contrary notwithstanding. This is in keeping on stipulations against marriage under Art. 136
with the basic public policy of the State to afford (now Art. 134) of the LC, which provides that: “It
protection to labor, promote full employment, shall be unlawful for an employer to require as a
ensure equal work opportunities regardless of sex, condition of employment or continuation of
race, or creed, and regulate the relations between employment that a woman employee shall not get
workers and Ers. For the State assures the basic married, or to stipulate expressly or tacitly that
rights of all workers to self-organization, collective upon getting married, a woman employee shall be
bargaining, security of tenure, and just and humane deemed resigned or separated, or to actually
conditions of work. (PNB v. Cabansag, G.R. No. dismiss, discharge, discriminate, or otherwise
157010, 21 June 2005) prejudice a woman employee merely by reason of
her marriage."
GR: The general rule is that Philippine laws apply
even to overseas employment contracts. (IPAMS v.
4. DEPARTMENT OF LABOR AND
De Vera, G.R. No. 205703, 07 Mar 2016)
EMPLOYMENT (DOLE) ISSUANCES
Rationale: This rule is rooted in the constitutional

provision of Sec. 3, Art. XIII that the State shall afford Power to Promulgate Rules and Regulations
full protection to labor, whether local or overseas.
The DOLE and other government agencies charged
Hence, even if the OFW has his employment abroad,
it does not strip him of his rights to security of with the administration and enforcement of the LC
or any of its parts shall promulgate the necessary
tenure, humane conditions of work and a living
implementing rules and regulations. (Art. 5, LC)
wage under our Constitution. (Ibid.)
Date of Effectivity
XPN: The parties may agree that a foreign law shall
govern the employment contract, provided that:
Such rules and regulations shall become effective
fifteen (15) days after announcement of their
1. It is expressly stipulated in the overseas
employment contract that a specific foreign adoption in newspapers of general circulation.
law shall govern; (Ibid.)
2. The foreign law invoked must be proven before Examples of DOLE Issuances
the courts pursuant to the Philippine rules on
1. Joint Circulars,
evidence;
2. Department Orders,
3. The foreign law stipulated in the overseas 3. Guidelines,
4. Implementing Rules and Regulations,
employment contract must not be contrary to
law, morals, good customs, public order, or 5. Labor Advisory,
6. Memorandum Circulars,
public policy of the Philippines; and
7. Joint Advisories, and
4. The overseas employment contract must be 8. Joint Memorandums.
processed through the POEA. (Ibid.)
Q: One of Pacific Airline's policies was to hire

only single applicants as flight attendants, and
considered as automatically resigned the flight
2024 GOLDEN NOTES
5. JURISPRUDENCE relationship. (e.g., GSIS Law, SSS Law, PhilHealth,
Agrarian Laws)
Judicial decisions applying to or interpreting the

Labor Legislation vs. Social Legislation
laws or the Constitution shall form a part of the legal
system of the Philippines. (Art. 8, NCC)
Labor Legislation Social Legislation
Governs effects of
Directly affects
employment (e.g.
B. STATE POLICIES employment (e.g.
compensation for
wages)
injuries)
Refers to labor statutes
1. LABOR AS PRIMARY SOCIAL ECONOMIC like Labor Relations Refers to Social
FORCE Law and Labor Security Laws
(Sec. 18, Art. II, 1987 Constitution) Standards Law
Focuses on the
Focuses on the rights of
The State affirms labor as a primary social economic particular part of the
the worker in the
force. It shall protect the rights of workers and society or segment
workplace
promote their welfare. (Sec. 18, Art. II, 1987 thereof.
Constitution)
NOTE: All labor laws are social legislation, but not
Labor all social legislation is labor law. Social legislation as
a concept is broader while labor laws are narrower.
It is the exertion by human beings of physical or (Duka, 2016)
mental efforts, or both, towards the production of
goods and services. (Poquiz, 2012)
2. FULL PROTECTION TO LABOR
(Sec. 3, Art. XIII, 1987 Constitution)
Labor Law as Social Legislation
Labor laws, foremost of which is the LC, are pieces The State shall afford full protection to labor, local
of social legislation. They are means for effecting and overseas, organized, and unorganized, and
social justice, pursuant to the constitutional promote full employment and equality of
recognition of labor as a primary social economic employment opportunities for all. (Sec. 3(1), Art.
force, and to the constitutional mandates for the XIII, 1987 Constitution)
State to protect the rights of workers and promote
their welfare, and for Congress to give highest Due to labor’s economic dependence upon the
priority to the enactment of measures that protect capital, it is considered the weaker factor of
and enhance the right of all the people to human production and therefore needs protection from the
dignity, and reduce social, economic, and political State. (Poquiz, 2018)
inequalities. (Rivera v. Genesis Transport Service,
Inc., G.R. No. 215568, 03 Aug. 2015) Limitation of Protection
Social Legislation The Constitutional policy to provide full protection

to labor is not meant to be a sword to oppress
It refers to all laws passed by the State to promote employers. The commitment of the Court to the
public welfare. Social legislation involves laws that cause of labor does not prevent it from sustaining
provide specific type of protection or benefits to the employer when it is in the right. The law
society or segments thereof in furtherance of social protecting the rights of the laborer authorizes
justice. It includes statutes intended to enhance the neither oppression nor self-destruction of the
welfare of the people even where there is no Er-Ee
2024 GOLDEN NOTES
employer. (Agabon v. NLRC, G.R. No. 158693, 17 Nov. rights is preconditioned, it does not refer to mere
2004) existence but to a secure quality of life, which is
inextricably woven to a person's right to work and
right to earn a living. (Lagamayo v. Cullinan Group,
3. SECURITY OF TENURE
Inc., G.R. No. 227718, 11 Nov. 2021)
(Sec. 3, Art. XIII, 1987 Constitution)
They shall be entitled to security of tenure, humane 4. SOCIAL JUSTICE

conditions of work, and a living wage. (Sec. 3(2), Art. (Sec. 10, Art. II, 1987 Constitution; Art. 218, LC,
XIII, 1987 Constitution) as renumbered by DOLE D.A. No. 01-2015)
No worker shall be dismissed except for a just or The State shall promote social justice in all phases of
authorized cause provided by law and after due national development. (Sec. 10, Art. II, 1987
process. (Art. 294, LC) Constitution)
Security of Tenure is the right not to be removed It is the policy of the State to promote free trade
from one’s job without valid cause and valid unionism as an instrument for the enhancement of
procedure. It extends to regular as well as non- democracy and the promotion of social justice and
regular employment. (Kiamco v. NLRC, G.R. No. development. (Art. 218, LC)
129449, 29 June 1999)
Social Justice
Right to Labor as a Property Right
It is "neither communism, nor despotism, nor
One's employment, profession, trade, or calling is a atomism, nor anarchy," but the humanization of laws
property right, of which a worker may be deprived and the equalization of social and economic forces
only upon compliance with due process by the State so that justice in its rational and
requirements. (Rance v. NLRC, G.R. No. 68147, 30 objectively secular conception may at least be
June 1988) approximated. (Calalang v. Williams, G.R. No. 47800,
02 Dec. 1940)
The Constitutional guarantee of security of tenure is
an act of social justice. When a person has no Social justice means the promotion of the welfare of
property, his job may possibly be his only all the people, the adoption by the Government of
possession or means of livelihood. Therefore, he measures calculated to insure economic stability of
should be protected against any arbitrary all the competent elements of society, through the
deprivation of his job. (Ibid.) maintenance of a proper economic and social
equilibrium in the interrelations of the members of
A profession, trade or calling is a property right the community, constitutionally, through the
within the meaning of our constitutional adoption of measures legally justifiable, or extra-
guarantees. One cannot be deprived of the right to constitutionally, through the exercise of powers
work and the right to make a living because these underlying the existence of all governments on the
rights are property rights, the arbitrary and time-honored principle of salus populi est suprema
unwarranted deprivation of which normally lex. (Ibid.)
constitutes an actionable wrong.
5. EQUAL WORK OPPORTUNITIES
To Filipino workers, the rights guaranteed under the
(Sec. 3, Art. XIII, 1987 Constitution; Art. 3, LC)
foregoing constitutional provision translate to
economic security and parity85 that inevitably
The State shall afford full protection to labor, local
determine their quality of life. While the right to life
under Art. III, Sec. 1 guarantees essentially the right and overseas, organized, and unorganized, and
to be alive — upon which the enjoyment of all other promote full employment and equality of
2024 GOLDEN NOTES
employment opportunities for all. (Sec. 3(1), Art. 6. RIGHT TO SELF-ORGANIZATION AND
XIII, 1987 Constitution) COLLECTIVE BARGAINING
(Sec. 3, Art. XIII, 1987 Constitution; Arts. 3 and
The State shall afford protection to labor, promote 253, LC)
full employment, ensure equal work opportunities
regardless of sex, race, or creed, and regulate the
The State shall guarantee the rights of all workers to
relations between workers and Ers. (Art. 3, LC)
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
Prohibition on Discrimination on Account of Sex
including the right to strike in accordance with law.
(Sec. 3(2), Art. XIII, 1987 Constitution)
It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms
The State shall assure the right of workers to self-
and conditions of employment solely on account of
organization, collective bargaining, security of
her sex.
tenure, and just and humane conditions of work.
(Art. 3, LC)
The following are acts of discrimination:
All persons employed in commercial, industrial, and

a. Payment of a lesser compensation, including
agricultural enterprises and in religious, charitable,
wage, salary or other form of remuneration
medical, or educational institutions, whether
and fringe benefits, to a female employee as
operating for profit or not, shall have the right to
against a male employee, for work of equal
self-organization and to form, join, or assist labor
value; and
organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent, and
b. Favoring a male employee over a female
itinerant workers, self-employed people, rural
employee with respect to promotion, training
workers, and those without any definite employers
opportunities, study, and scholarship grants
may form labor organizations for their mutual aid
solely on account of their sexes. (Art. 133, LC)
and protection. (Art. 253, LC)
Magna Carta for Disabled Persons

Right to Self-Organization
No disabled person shall be denied access to

It refers to the right of workers and Ees to form, join,
opportunities for suitable employment. A qualified
or assist unions, organizations, or associations for
disabled employee shall be subject to the same
purposes of collective bargaining and/or for mutual
terms and conditions of employment and the same
aid and protection, including the right to engage in
compensation, privileges, benefits, fringe benefits,
peaceful concerted activities and participate in
incentives, or allowances as a qualified able-bodied
policy-decision making processes affecting their
person. (Sec. 5, R.A. No. 7277)
rights and benefits.
Equal Work Opportunities vs. Equal Protection

NOTE: Contracting and subcontracting
Clause
arrangements are expressly allowed by law and are
subject to regulation for the promotion of
Under the Constitution of the United States, the
employment and the observance of the rights of
assurance of equality in employment and work
workers to just and humane conditions of work,
opportunities regardless of sex, race, or creed is also
security of tenure, self-organization, and collective
given by the equal protection clause of the Bill of
bargaining. Labor-only contracting shall be
Rights. (Shauf v. Court of Appeals, G.R. No. 90314, 27
prohibited. (Sec. 1, D.O. No. 18-02 s. 2002)
Nov. 1990)
2024 GOLDEN NOTES
Extent of the Right to Self-Organization purposes of collective bargaining: Provided,
that said aliens are nationals of a country
It includes at least two (2) rights: which grants the same or similar rights to
Filipino workers; (Art. 284, LC) (Principle of
1. The right to form, join, or assist labor Reciprocity)
organizations; and
4. Ees of government corporations established
2. The right to engage in lawful concerted under the Corporation Code shall have the
activities. (Art. 257, LC) right to organize and to bargain collectively
with their respective Ers. All other Ees in the
Purpose of Exercise of Right to Self-Organization civil service shall have the right to form
associations for purposes not contrary to law.
1. Collective bargaining; and (Art. 254, LC)
2. Mutual aid and protection. (Ibid.)
Q: Is the formation of workers’ association for
NOTE: Workers organize for self-advancement and mutual aid and protection (instead of a union for
the desire for job security, substituting “rule of law” purposes of collective bargaining) limited only
for the arbitrary power by the boss, and sense of to ambulant, intermittent, and itinerant
participation in the business enterprise. (Azucena, workers, self-employed people, rural workers,
2016) and those without any definite Ers?
Non-Abridgment of Right to Self-Organization A: NO. The right to self-organization includes the

right to form a union, workers' association, and
The right to form, join, or assist a union is labor management councils.
specifically protected by the Constitution and such
right shall not be abridged. Art. 257 of the LC More often than not, the right to self-organization
empathically relates to the policy of the State to connotes unionism. Workers, however, can also
promote and emphasize the primacy of free form and join a workers' association as well as
collective bargaining and negotiations, free trade Labor Management Councils (LMC).
unionism, and free and voluntary organization of a
strong and united labor movement. (Chan, 2019) The right to form a union or association or to self-
organization comprehends two notions, to wit: (a)
Who May Form a Labor Organization the liberty or freedom, that is, the absence of
restraint which guarantees that the Ee may act for
1. All persons employed in Commercial, himself without being prevented by law; and (b) the
Industrial, and Agricultural enterprises and in power, by virtue of which an Ee may, as he pleases,
Religious, Charitable, Medical, or Educational join or refrain from joining an association.
institutions, whether operating for profit or (Samahan ng Manggagawa sa Hanjin Shipyard v.
not; (Art. 253, LC) (CIA-CREM) BLR, G.R. No. 211145, 14 Oct. 2015)
2. Ambulant, Intermittent, and Itinerant workers,

Self-employed people, Rural workers and
those Without any definite Ers may form labor
organizations for their mutual aid and
protection; (Ibid.) (AI2R-WiSe)
3. Aliens working in the country with valid

permits issued by the DOLE may exercise the
right to self-organization and join or assist
labor organizations of their own choosing for
2024 GOLDEN NOTES
Collective Bargaining vs. Dealing with Employer 2. No person shall obstruct, impede, or interfere
with by force, violence, coercion, threats or
COLLECTIVE intimidation, any peaceful picketing by
DEALING WITH ER
BARGAINING employees during any labor controversy or in
A right that may be the exercise of the right to self-organization or
A generic description
acquired by a labor collective bargaining, or shall aid or abet such
of interaction between
organization after obstruction or interference.
Er and Ees concerning
registering itself with
grievances, wages,
the DOLE and after 3. No employer shall use or employ any strike
work hours, and other
being recognized or breaker, nor shall any person be employed as a
terms and conditions
certified by DOLE as strike-breaker.
of employment, even if
the exclusive
the Ees’ group is not
bargaining 4. No public official or employee, including
registered with the
representative of the officers and personnel of the New Armed Forces
DOLE. (Azucena, 2013)
Ees. (Azucena, 2013) of the Philippines or the Integrated National
Police, or armed person, shall bring in,
Prohibitions on Collective Bargaining introduce, or escort in any manner, any
individual who seeks to replace strikers in
1. No labor organization or employer shall declare entering or leaving the premises of a strike area,
a strike or lockout without first having or work in place of the strikers. The police force
bargained collectively in accordance with Title shall keep out of the picket lines unless actual
VII of this Book or without first having filed the violence or other criminal acts occur therein:
notice required in the preceding Art. or without Provided, That nothing herein shall be
the necessary strike or lockout vote first having interpreted to prevent any public officer from
been obtained and reported to the Ministry. taking any measure necessary to maintain
peace and order, protect life and property,
No strike or lockout shall be declared after and/or enforce the law and legal orders.
assumption of jurisdiction by the President or
the Minister or after certification or submission 5. No person engaged in picketing shall commit
of the dispute to compulsory or voluntary any act of violence, coercion or intimidation or
arbitration or during the pendency of cases obstruct the free ingress to or egress from the
involving the same grounds for the strike or employer's premises for lawful purposes, or
lockout. obstruct public thoroughfares. (Art. 279, LC)
Any worker whose employment has been Q: Juicy Bar and Night Club allowed by tolerance
terminated as a consequence of any unlawful 50 Guest Relations Officers (GROs) to work
lockout shall be entitled to reinstatement with without compensation in its establishment
full backwages. Any union officer who under the direct supervision of its Manager from
knowingly participates in an illegal strike and 8:00 P.M. To 4:00 A.M. everyday, including
any worker or union officer who knowingly Sundays and holidays. The GROs, however, were
participates in the commission of illegal acts free to ply their trade elsewhere at anytime, but
during a strike may be declared to have lost his once they enter the premises of the night club,
employment status: Provided, That mere they were required to stay up to closing time.
participation of a worker in a lawful strike shall The GROs earned their keep exclusively from
not constitute sufficient ground for termination commissions for food and drinks, and tips from
of his employment, even if a replacement had generous customers. In time, the GROs formed
been hired by the employer during such lawful the Solar Ugnayan ng mga Kababaihang lnaapi
strike. (SUKI), a labor union duly registered with DOLE.
Subsequently, SUKI filed a petition for
Certification Election in order to be recognized
2024 GOLDEN NOTES
as the exclusive bargaining agent of its 6. Ees of international organizations,
members. Juicy Bar and Night Club opposed the 7. Foreign workers, and
petition for Certification Election on the singular 8. Religious objectors.
ground of absence of employer-employee
relationship between the GROs on one hand and Managerial Employee
the night club on the other hand. May the GROs
form SUKI as a labor organization for purposes One who is vested with powers or prerogatives to
of collective bargaining? Explain briefly. (2012 lay down and execute management policies and/or
BAR) to hire, transfer, suspend, lay-off, recall, discharge,
assign, or discipline Ees. (Art. 219(m), LC)
A: YES. The GROs worked under the direct
supervision of the Night Club Manager for a Types of Managers
substantial period of time. Pursuant to Art. 138,
with or without compensation, the GROs are 1. First line managers (supervisors) – direct
deemed as employees. As such, they are entitled to operations of Ees and not supervise other
all the rights and benefits granted to managers (e.g., foreman);
employees/workers under the Constitution and
other labor legislation including the right to form 2. Middle managers – direct activities of other
labor organizations for purposes of collective managers (e.g., plant managers); and
bargaining. (Sec. 3, Art. XIII, 1987 Constitution; Art.
243, LC) 3. Top management – overall management of
organization (e.g., SVP, President). (United Pepsi
NOTE: All persons employed in commercial, Cola Supervisory Union v. Laguesma, G.R. No.
industrial, and agricultural enterprises and in 122226, 25 Mar. 1998)
religious, charitable, medical, or educational
institutions, whether operating for profit or not, Ineligibility of Managerial Employees
shall have the right to self-organization and to form,
join, or assist labor organizations of their own Managerial Ees are not eligible to join, assist or form
choosing for purposes of collective bargaining. any labor organization. (Art. 255, LC)
Ambulant, intermittent, and itinerant workers, self-
employed people, rural workers, and those without The mere fact that an Ee is designated as “manager”
any definite employers may form labor does not ipso facto make him one. Designation
organizations for their mutual aid and protection. should be reconciled with the actual job description
(Art. 253, LC) of the Ee for it is the job description that determines
the nature of employment. Thus, if the Ee does not
Employee for Purposes of Union Membership participate in policy making but are given ready
policies to execute and standard oractices to
Any Ee, whether employed for a definite period or observe, thus having little freedom of action, they
not, shall, beginning on his first day of service, be are not managerial Ees. (NWSA v. NWSA, 11 SCRA
considered as an Ee for purposes of membership in 766)
any labor union. (Art. 292(c), LC)
NOTE: The rationale for the inhibition is that if
Employees Restricted to Form, Join, or Assist managerial Ees would belong to or be affiliated with
Labor Organizations a union, the latter might not be assured of their
loyalty to the union in view of evident conflict of
1. Managerial Ees, interests. The union can become company-
2. Supervisory Ees, dominated with the presence of managerial Ees in
3. Confidential Ees (in the field of labor relations), the union membership. (Bulleting Publishing Co., Inc.
4. Ee-members of a cooperative, v. Hon. Sanchez, G.R. No. 74425, 07 Oct. 1986)
5. Government Ees,
2024 GOLDEN NOTES
Managerial Ees cannot be allowed to share in the Examples of confidential Ees who could not
concessions obtained by the labor union through unionize:
collective negotiation. Otherwise, they would be
exposed to the temptation of colluding with the 1. Bank cashiers
union during the negotiations to the detriment of 2. Accounting personnel
the Er. (Azucena, 2016) 3. Radio and telegraph operators who have
access to confidential information
Supervisory Employee 4. Personnel staff
One who, in the interest of the Er, effectively Human Resource Assistants and Personnel
recommend such managerial actions if the exercise Assistants are Considered Confidential
of such authority is not merely routinary or clerical Employees
in nature but requires the use of independent
judgment. (Art. 219(m), LC) As a Human Resource Assistant, the scope of one’s
work necessarily involves labor relations,
NOTE: Supervisory Ees are allowed to organize, but recruitment and selection of Ees, access to Ees'
they cannot form, join, or assist a rank-and-file personal files and compensation package, and
union. (Azucena, 2016) human resource management. (San Miguel Foods
Inc. v. San Miguel Corporation Supervisors and
Security guards are not included in the Exempt Union, G.R. No. 146206, 01 Aug. 2011)
disqualification. (Sec. 6, D.O. 150-16, s. 2016)
As regards a Personnel Assistant, one's work
Confidential Employees in the Field of Labor includes the recording of minutes for management
Relations during CB negotiations, assistance to management
during grievance meetings and administrative
One who assists and acts in a confidential capacity investigations, and securing legal advice for labor
to, or has access to confidential matters of, persons issues from the petitioner’s team of lawyers, and
who exercise managerial functions in the field of implementation of company programs. (Ibid.)
labor relations. (Philips Industrial Development v.
NLRC, G.R. No. 88957, 25 June 1992) Therefore, in the discharge of their functions, both
gain access to vital labor relations information
NOTE: The phrase “in the field of labor relations” is which outrightly disqualifies them from union
important because it stresses the labor nexus, that membership. (Ibid.)
is, the confidentiality of the position should relate to
labor relations matters. Payroll Masters are Not Confidential Employees
Doctrine of Necessary Implication A confidential Ee is one entrusted with confidence

on delicate, or with the custody, handling or care and
The reason for ineligibility of managerial Ees to protection of the Er’s property. Confidential Ees,
form, assist, or join a labor union equally applies to such as accounting personnel, should be excluded
confidential Ees. While the Labor Code singles out from the bargaining unit, as their access to
managerial Ees as ineligible to join, under the confidential information may become the source of
doctrine of necessary implication, confidential Ees undue advantage. (Ibid.)
are similarly disqualified. (NATU - Republic Planters
Bank Supervisors Chapter v. Hon. Torres, G.R. No. However, such fact does not apply to the position of
93468, 29 Dec. 1994) Payroll Master and the whole gamut of Ees who has
access to salary and compensation data. The
position of Payroll Master does not involve dealing
with confidential labor relations information in the
course of the performance of his functions. Since
2024 GOLDEN NOTES
the nature of his work does not pertain to company The right to self-organization of government Ees
rules and regulations and confidential labor pertains to all branches, subdivisions,
relations, it follows that he cannot be excluded from instrumentalities, and agencies of the Government,
the subject bargaining unit. (Ibid.) including GOCCs with original charters. (Sec. 1, E.O.
No. 180)
Employee-Member of a Cooperative
Government Ees’ Right to Organize is for a
An Ee of a cooperative who is also a member and co- Limited Purpose
owner thereof cannot invoke the right to collective
bargaining, for an owner cannot bargain with The right of government Ees to “form, join, or assist
himself or his co-owners. (San Jose Electric Service Ees’ organizations of their own choosing” under E.O.
Cooperative, Inc. v. Ministry of Labor, G.R. No. 77231, No. 180 is not regarded as existing or available “for
31 May 1989) purposes of collective bargaining,” but simply “for
the furtherance and protection of their interests.”
NOTE: Even if Ee-members of a cooperative cannot (Arizala v. CA, G.R. No. L-43633-34, 14 Sept. 1990)
form a union, they may, however, form an
association for their mutual aid and protection as Only terms and conditions not fixed by law may be
Ees. (Azucena, 2016) the subject of negotiation by the duly recognized
Ees’ organization of government Ees and the
Q: A, an Ee of XYZ Cooperative, owns 500 shares appropriate government authorities. Terms and
in the cooperative. He has been asked to join the conditions of employment that are fixed by law are
XYZ Cooperative Ees Association. He seeks your excluded from negotiation. (Sec. 13, E.O. No. 180)
advice on whether he can join the association.
What advice will you give him? (2010 BAR) Matters that are declared to be “not negotiable” are
matters “that require appropriation of funds” and
A: A cannot join XYZ Cooperative Ees Association “those that involve the exercise of management
because owning shares makes him a co-owner prerogatives.” Considered negotiable are such
thereof. An Ee-member of a cooperative cannot join matters as schedule of vacation, leaves, etc.
a union and bargain collectively with his cooperative (Azucena, 2016)
for an owner cannot bargain with himself and his co-
owners. (Cooperative Rural Bank of Davao City v. Q: Royal Savings Bank (RSB), organized and
Calleja, G.R. No. 143616, 09 May 2001) incorporated as a thrift bank entered into a
Memorandum of Agreement with Commercial
Government Employees Bank of Manila to rehabilitate and infuse capital
into RSB. RSB was renamed ComSavings Bank
Ees of government corporations established under (CB). In 1987, the GSIS transferred its holdings
the Corporation Code shall have the right to from Commercial Bank of Manila to Boston
organize and to bargain collectively with their Bank. CB was not included in the transfer. Due to
respective Ers. All other Ees in the civil service shall Boston Bank’s acquisition of Commercial Bank
have the right to form associations for purposes not of Manila, the GSIS took over the control and
contrary to law. (Art. 254, LC) management of CB.
Government Employees have the Right to Self- Sometime in 2001, CB changed its name to GSIS
Organization Family Bank. On 06 June 2011, President Aquino
signed into law R.A. No. 10149, or the GOCC
The highest law of the land guarantees to Governance Act of 2011. The law created the
government Ees the right to organize and to Governance Commission for Government-
negotiate, but not the right to strike. (Azucena, 2016) Owned or Controlled Corporations (Governance
Commission). On 20 Dec. 2013, counsel for the
GSIS Union sent GSIS Family Bank a demand
2024 GOLDEN NOTES
letter for the payment of Christmas bonus to its NOTE: In the public sector, there are only two levels
members, as stipulated in their CBA. The GSIS of position: high level and rank-and-file.
Family Bank's refused to negotiate a new CBA.
Thus, the GSIS Union filed a Complaint before Q: How does the government employees’ right to
the NCMB. They aimed to compel GSIS Family self-organization differ from that of the
Bank to abide by the provisions of their existing employees in the private sector? (1996 BAR)
CBA.
A: In the public sector, E.O. No. 180, the purpose of
Can the GSIS Family Bank, a non-chartered self-organization is stated as for the furtherance and
government-owned or controlled corporation, protection of their interest. In the private sector, Art.
enter into a CBA with its Ees? 243 (now 253) of the LC states, for the purpose of
collective bargaining, and for the purpose of
A: NO. R.A. No. 10149 directed the Governance enhancing and defending their interests and for
Commission to develop a Compensation and their mutual aid and protection. Furthermore, no
Position Classification System, to be submitted for less than the Constitution itself guarantees that all
the President's approval, which shall apply to all workers have the right to self- organization. (Sec. 3,
officers and Ees of government-owned or controlled Art. XIII, 1987 Constitution)
corporations, whether chartered or non-chartered.
On 22 Mar. 2016, President Aquino issued E.O. No. Employees of International Organizations
203, which approved the compensation and
classification standards and the Index of GR: International organizations are immune from
Occupational Services Framework developed and Philippine jurisdiction. (i.e., ICMC, IRRI, ADB) Thus,
submitted by the Governance Commission. a certification election cannot be conducted in an
international organization which has been granted
When it comes to collective bargaining agreements immunity from local jurisdiction. (ICMC v. Hon. Pura
and collective negotiation agreements in GOCCs, E.O. Calleja, G.R. No. 89331, 28 Sept. 1990)
No. 203 unequivocally stated that while it
recognized the right of workers to organize, bargain, XPN: However, the international organization has
and negotiate with their Ers, the Governing Boards the discretion to waive its immunity. Without such
of all covered GOCCs, whether Chartered or non- express waiver, the NLRC or its labor arbiters have
chartered, may not negotiate with their officers and no jurisdiction over international organizations,
Ees the economic terms of their CBAs. (GSIS Family even in cases of alleged illegal dismissal of any of its
Bank Ees Union v. Secretary Villanueva, G.R. No. Ees. (Callado v. IRRI, G.R. No. 106483, 22 May 1995)
210773, Jan. 23, 2019)
Foreign Workers
Members of AFP, Police Officers, Policemen,
Firemen, and Jail Guards GR: Foreigners are prohibited from engaging in all
forms of trade union activities.
Sec. 4 of E.O. No. 180 excludes members of AFP,
police officers, policemen, firemen, and jail guards XPN: However, an alien working in the country with
from unionizing for reasons of security and safety. a valid working permit may exercise the right to self-
organization if they are nationals of a country which
High-Level Government Employees grants the same or similar right to Filipino workers.
One whose functions are normally considered Q: Do the following workers have the right to
policy determining, managerial, or one whose self-organization? Reasons/basis.
duties are highly confidential in nature. They cannot
join the organization of rank-and-file government a. Employees of non-stock, non-profit
Ees. (Sec. 3, E.O. No. 180) organizations?
2024 GOLDEN NOTES
A: Even employees of non-stock non-profit right not to be compelled to become union members
organizations have the right to self-organization. has been upheld. However, if the worker is not a
This is explicitly provided for in Art. 243 (now 253) "religious objector" and there is a union security
of the LC. A possible exception, however, are clause, he may be required to join the union if he
employee members of non-stock, non-profit belongs to the bargaining unit. (Reyes v. Trajano, G.R.
cooperatives. No. 84433, 2 June 1992)
b. Alien employees? NOTE: The right to join a union includes the right to
abstain from joining any union. (Victoriano v.
A: Alien employees with valid work permits may Elizalde Rope Worker’s Union, G.R. No. L-25246, 12
exercise the right to self-organization on the basis of Sept. 1974)
parity or reciprocity, that is, if Filipino workers in
the aliens' country are given the same right. (Art. The right of self-organization embraces not only the
269 (now Art. 284), LC) right to form, join or assist labor organizations, but
the concomitant, converse right not to form, join or
Religious Objectors; Iglesia Ni Cristo Members assist any labor union. (Reyes v. Trajano, G.R. No.
84433, 02 June 1992)
Members of religious sects cannot be compelled or
coerced to join labor unions even when said unions
7. CONSTRUCTION IN FAVOR OF LABOR
have closed-shop agreements with the Ers. Free
(Art. 4, LC; Art. 1702, NCC)
exercise of religious belief is superior to contract
rights. In case of conflict, the latter must yield to the
All doubts in the implementation and interpretation
former. (Victoriano v. Elizalde Rope Worker’s Union,
of the provisions of the LC, including its IRRs, shall
G.R. No. L-25246, 12 Sept. 1974)
be resolved in favor of labor. (Art. 4, LC)
Religious Objectors can Form and Join their Own
In case of doubt, all labor legislation and all labor
Union
contracts shall be construed in favor of the safety
and decent living for the laborer. (Art. 1702, NCC)
Recognition of the tenets of a sect should not
infringe on the basic right to self-organization
granted by the Constitution to workers, regardless In case of doubt in the interpretation or application
of laws, it is presumed that the lawmaking body
of religious affiliation. (Kapatiran sa Meat and
Canning Division v. Hon. Pura Calleja, G.R. No. L- intended right and justice to prevail. (Art. 10, NCC)
82914, 20 June 1988)
NOTE: The rule of construction in favor of labor
NOTE: Religious objectors also have the right to vote applies only in case there is doubt. If the contractual
in a certification election. (Reyes v. Trajano, G.R. No. provision is clear, then it must be applied in
accordance with its expressed terms. (Poquiz, 2018)
84433, 02 June 1992)
Q: Do workers have a right not to join a labor Protection to Labor

organization? (2000 BAR)
When the conflicting interests of labor and capital
are weighed on the scales of social justice, the
A: YES. The constitutional right to self-organization
heavier influence of the latter must be counter-
has two aspects, the right to join or form labor
organizations and the right not to join said balanced by sympathy and compassion the law must
accord the underprivileged worker. This is in line
organization. (Victoriano v. Elizalde Rope Worker’s
with the express mandate of the LC and the principle
Union, G.R. No. L-25246, 12 Sept. 1974)
that those with less in life should have more in law.
(Eastern Shipping Lines v. POEA, G.R. No. 76633, 18
Moreover, if they are members of a religious group
Oct. 1998)
whose doctrine forbids union membership, their
2024 GOLDEN NOTES
between the evidence presented by the Er and
It is a time-honored rule that in controversies the evidence presented by the Ees, the doubt
between a laborer and his master, doubts must be resolved in favor of the Ees, consistent
reasonably arising from the evidence, or in the with the LC's policy to afford protection to labor.
interpretation of agreements and writing, should be Are the Ees correct?
resolved in the former’s favor. The policy is to extend
the doctrine to a greater number of Ees who can A: YES. Under the law, where both parties in a labor
avail themselves of the benefits under the law, which case have not presented substantial evidence to
is in consonance with the policy of the State to give prove their allegations, evidence will be considered
maximum aid and protection to labor. (Lepanto in equipoise. In such a case, the scales of justice are
Consolidated Mining Co. v. Dumapis, G.R. No. 163210, tilted in favor of labor. (Hubilla v. HSY Marketing Ltd.,
13 Aug. 2008) Co., G.R. No. 207354, 10 Jan. 2018)
We need to protect labor because there is no doubt Q: What is the concept of liberal approach in
that the Er stands on higher footing than the Ee. interpreting the Labor Code and its IRRs in favor
First, there is greater supply than demand for labor. of labor? (2006 BAR)
Secondly, the need for employment by labor comes
from vital and even desperate necessity. A: The State is bound under the Constitution to
Consequently, the law must protect labor at least to afford full protection to Labor and when conflicting
the extent of raising him to equal footing in interests collide, they are to be weighed on the
bargaining relations with capital and to shield him scales of social justice. The law should accord more
from abuses brought about by the necessity for sympathy and compassion to the less privileged
survival. (Sanchez v. Harry Lyons Construction, Inc., workingman. (Fuentes v. NLRC, G.R. No. 110017, 02
G.R. No. L-2779, 18 Oct. 1950) Jan. 1997)
Q: Several Ees of Novo Jeans filed a case of illegal However, it should be borne in mind that social
dismissal against Novo Jeans. However, Novo justice ceases to be an effective instrument for the
Jeans argued that they were able to present the “equalization of the social and economic forces” by
First Notice of Termination of Employment sent the State when it is used to shield wrongdoing.
to Ees, asking them to explain their sudden (Corazon Jamer v. NLRC, G.R. No. 112630, 05 Sept.
absence from work without proper 1997)
authorization. In contrast, the Ees alleged that
there were only sample letters of the Notices, Q: Clarito, an employee of Juan, was dismissed
and there was no evidence to prove that the for allegedly stealing Juan’s wristwatch. In the
Notices were sent to them at their last known illegal dismissal case instituted by Clarito, the
addresses. They insist that if doubt exists Labor Arbiter, citing Art. 4 of the Labor Code,
ruled in favor of Clarito upon finding Juan’s A: NO. The NLRC is not correct. It is a well-settled
testimony doubtful. doctrine that if doubts exist between the evidence
presented by the employer and the employee, the
On appeal, the NLRC reversed the Labor Arbiter scale of justice must be tilted in favor of the latter. It
holding that Art. 4 applies only when the doubt is a time-honored rule that in controversies
involves “implementation and interpretation” of between laborer and master, doubts necessarily
the Labor Code provisions. The NLRC explained arising from the evidence, or in the implementation
that the doubt may not necessarily be resolved of the agreement and writing should be resolved in
in favor of labor since this case involves the favor of the laborer. (Nicario v. NLRC, G.R. No.
application of the Rules on Evidence, not the 125340, 17 Sept. 1998)
Labor Code. Is the NLRC correct? Reasons.
(2017, 2009 BAR)
2024 GOLDEN NOTES
Compassionate Justice
The social justice policy mandates a compassionate

attitude towards the working class in its relation to
management. In calling for protection to labor, the
Constitution does not condone wrongdoing by the
Ee. However, it urges moderation of the sanctions
that maybe applied to him or her in the light of the
many disadvantages that weigh heavily on him or
her like an albatross on his neck. It is disregarding
rigid rules and giving due weight to all equities of
the case. (Gandara Mill Supply v. NLRC, G.R. No.
126703, 29 Dec. 1998)
Labor law determinations are not only secundum

rationem (according to reason) but also secundum
caritatem (according to charity). (Paz v. Northern
Tobacco Redrying Co., Inc., G.R. No. 199554, 18 Feb.
2015)
The law must protect labor, at least to the extent of

raising him to equal footing in bargaining relations
with capital and to shield him or her from abuses
brought about by the necessity for survival.
(Azucena, 2016)
2024 GOLDEN NOTES
This proviso was intended neither to impose a
II. RECRUITMENT AND PLACEMENT OF condition on the basic rule nor to provide an
WORKERS exception thereto but merely to create a
presumption. The presumption is that the
individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two or
more persons to whom, in consideration of a fee, an
A. RECRUITMENT AND PLACEMENT OF LOCAL
offer or promise of employment is made in the
AND MIGRANT WORKERS
(Art. 13, LC) course of the canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring of
workers. (People v. Panis, G.R. L-58674-77, 11 July
1986)
Recruitment and Placement
The definition of “recruitment and placement”

It refers to: (C-E-T-C-H-U-P-C-R-A-P)
under Art. 13(b) of the LC includes promising or
advertising for employment, locally or abroad,
1. Any act of Canvassing, Enlisting, Transporting,
whether for profit or not, provided, that any person
Contracting, Hiring, Utilizing, or Procuring
or entity which, in any manner, offers or promises
workers; and
for a fee, employment to two or more persons shall
be deemed engaged in recruitment and placement.
2. Includes Contract services, Referrals,
(People v. Racho, G.R. No. 227505, 02 Oct. 2017)
Advertising, or Promising for employment,
locally or abroad, whether for profit or not.
NOTE: Regardless of the number of persons dealt
(Art. 13(b), LC)
with, recruitment and placement are still
constituted. The proviso merely lays down a rule of
Persons Deemed Engaged in Recruitment and
evidence that where a fee is collected in
Placement
consideration of a promise or offer of employment
to two (2) or more prospective workers, the
Any person or entity which, in any manner, offers or
individual or entity dealing with them shall be
promises for a fee, employment to two or more
deemed to be engaged in the act of recruitment and
persons shall be deemed engaged in recruitment
placement. The words “shall be deemed” create that
Thus, the Code applies to any recruitment or Registration of Private Employment Agency
placement, whether for profit or not. The reference
in the Code that any person who offers employment 1. Citizenship Requirement
to “two or more persons” as being engaged in
recruitment and placement does not mean that a. For single proprietorship – the applicant
there must be at least two persons involved as this must be a resident Filipino Citizen.
reference is merely evidentiary. Any person may be
charged with illegal recruitment if they already b. For partnership or domestic corporation –
charged fees even if they have not yet obtained at least 75% of the authorized capital stock
employment for the applicant. (People v. Peredo, G.R. must be owned and controlled by resident
No. 211197, 28 Sept. 2016) Filipino citizens;
2. Capital Requirement
a. For single proprietorship – the applicant

must have a minimum net worth of one
million pesos (P1,000,000.00).
2024 GOLDEN NOTES
b. For partnership or domestic corporation – Seafarer
the applicant must have a minimum paid-
up capital of one million pesos An OFW who is engaged in employment in any
(P1,000,000.00), 75% of which must be capacity on board a merchant marine vessel plying
owned by resident Filipinos as evidenced international waters or other sea-based craft of
by the Articles of Partnership or similar category. For purposes of this Act, it shall
Incorporation. (Sec. 1, Art. II, DOLE D.O. 217 include fishers onboard commercial fishing vessels
s. 2020) on international waters or as defined under relevant
maritime conventions, cruise ship personnel, yacht
Overseas Filipino Worker (OFW)/Migrant crew, those serving on mobile offshore and drilling
Worker units in the high seas, and other persons similarly
situated. (Sec. 3(j), R.A. No. 11641)
A Filipino who is to be engaged, is engaged, or has
been engaged in remunerated activity in a country NOTE: Those employed in non-mobile vessels or
of which he or she is not an immigrant, citizen, or fixed structures, even if the said vessels/structures
permanent resident or is not awaiting are located offshore or in the middle of the sea,
naturalization, recognition, or admission, whether cannot be considered as seafarers under the law. (V
land-based or sea-based regardless of status; People Manpower Phils., Inc. v. Buquid, G.R. No.
excluding a Filipino engaged under a government- 222311, 10 Feb. 2021)
recognized exchange visitor program for cultural
and educational purposes. For purposes of this Ethical Recruitment
provision, a person engaged in remunerated activity
covers a person who has been contracted for It refers to the lawful hiring of workers in a fair and
overseas employment but has yet to leave the transparent manner that respects and protects their
Philippines, regardless of status, and includes dignity and human rights. (Sec. 3(b), R.A. No. 11641)
“Overseas Contract Workers.” The term “OFW” is
synonymous to “Migrant Worker.” (Sec. 3(f), R.A. No.
1. REGULATORY AUTHORITIES
11641)
a. DEPARTMENT OF MIGRANT WORKERS

Balik-Manggagawa
(Secs. 4-6, R.A. No. 11641)
1. An OFW who is returning to the same employer;
The POEA created under E.O. No. 247, as amended,
2. An OFW who changed employer in the same and all the entities, agencies and units are
consolidated and merged, and hereby constituted as
jobsite provided he/she can show proof of
his/her new employment contract duly verified the Department of Migrant Workers (DMW). (Sec. 4,
by POLO; R.A. No. 11641)
3. Undocumented/Irregular workers like tourists, Consolidation and Merger of Agencies and

dependents, students, businessmen who Functions
became OFWs and have partially served their
duly verified employment contracts; The following agencies are hereby consolidated
and merged into and constituted as the
Department, and their powers and functions
4. An OFW who will transfer to another
jobsite/country with the same employer, subsumed to the Department which shall assume
and perform all their powers and functions:
provided that the worker shall subsequently
have another contract to be verified by the
POLO in the receiving post. (Sec. 29, DOLE A.O. 1. The POEA, as created under the E.O. No. 247
and R.A. No. 8042, as amended;
168-13)
2024 GOLDEN NOTES
2. The Office of the Undersecretary for Migrant Powers and Functions of the DMW
Workers' Affairs (OUMWA) of the DFA as
provided under R.A. No. 8042, as amended; 1. Formulate, recommend, and implement
national policies, plans, programs, and
3. All Philippine Overseas Labor Offices (POLO) guidelines that will ensure the protection of
under the DOLE; OFWs, including their safe, orderly and
regular migration, then promotion of their
4. The International Labor Affairs Bureau interests, the timely and effective resolution
(ILAB) under the DOLE; of their problems and concerns, and their
effective reintegration into Philippine
5. The National Reintegration Center for OFWs society;
(NRCO) under the OWWA;
2. Regulate the recruitment, employment, and
6. The National Maritime Polytechnic (NMP) deployment of OFWs;
under the DOLE; and
3. Investigate, initiate, sue, pursue, and help
7. The Office of the Social Welfare Attaché prosecute, in cooperation with the
(OSWA) under the DSWD. (Sec. 19, R.A. No. Department of Justice (DOJ) and the Inter-
11641) Agency Council Against Trafficking (IACAT),
illegal recruitment and human trafficking
Mandate of the DMW cases as defined under Republic Act No. 8042,
as amended by Republic Act No. 10022,
1. It shall absorb all the powers, functions and otherwise known as the Migrant Workers and
mandate of the POEA and all the entities Overseas Filipinos Act of 1995, as amended,
enumerated in Sec. 19 hereof. and as provided under Republic Act No. 9208,
as amended by Republic Act No. 10364,
2. It shall be the primary agency under the otherwise known as the Anti-Trafficking in
Executive Branch of the government tasked Persons Act, and other existing laws and
to protect the rights and promote the welfare other issuances. In the performance of its
of OFWs, regardless of status and of the functions, the Department Secretary and his
means of entry into the country of or her authorized deputy shall have the
destination. power:
3. It shall formulate, plan, coordinate, promote, a. to issue subpoena or subpoena duces

administer, and implement policies, and tecum to any person for investigation for
undertake systems for regulating, managing, illegal recruitment or trafficking in
and monitoring the overseas employment of persons cases as defined under Republic
Filipino workers and reintegration of OFWs, Act No. 9208, as amended, and other
while taking into consideration the national existing laws and other issuances; and
development programs formulated by the hold or cite any person in contempt as
National Economic and Development may be provided by the implementing
Authority (NEDA). rules and regulations;
b. to administer oaths upon cases under
4. It shall also promote the empowerment and investigation; and
protection of Filipinos working overseas by c. to have access to all public records and to
empowering and training them to gain records of private parties and concerns,
appropriate skills and by ensuring access to in accordance with law;
continuous training and knowledge
development. (Sec. 5, R.A. No. 11641) 4. Protect and promote the welfare, well-being,
and interests of the families of OFWs in
2024 GOLDEN NOTES
accordance with this Act, consistent with the 9. Encourage and enhance information and
constitutional policy of upholding the resource sharing among related agencies, and
sanctity of the family as a basic autonomous develop an electric database to improve
social institution and of valuing the vital role services for OFWs in accordance with Sec. 18
of youth in nation-building; of this Act;
5. Support and assist the Department of Foreign 10. Regulate the operations of private
Affairs (DFA) and relevant government recruitment and manning agencies involved
agencies in building strong and harmonious in the deployment of OFWs abroad to protect
partnerships with counterpart and relevant the interests and well-being of these workers;
agencies in foreign countries in order to
facilitate the implementation of strategies 11. Foster the professionalization, promote
and programs for the protection and ethical recruitment practices, and ensure
promotion of the rights and well-being of compliance with legal and ethical standards,
OFWs and their families, and to continuously training, and capacity-building of private
monitor economic, political and labor recruitment and manning agencies;
developments therein;
12. Establish a 24/7 Emergency Response and
6. Support and assist the DFA in the negotiation Action Center Unit and media and social
of bilateral and multilateral agreements, media monitoring center to respond to the
initiatives and programs, including emergency needs of OFWs and their families;
intergovernmental processes, which
primarily concern labor migration; 13. Perform all the powers, functions, and
responsibilities assigned to all agencies,
7. Represent, in coordination with and under offices, or units to be transferred to, or
the guidance of the DFA, interests pertaining absorbed by, the Department pursuant to the
to OFWs in bilateral, regional, and consolidation mandated by this Act;
multilateral fora and international bodies. A
written authorization shall be secured by the 14. Require private recruitment and manning
Department from the President, through the agencies to provide comprehensive
Secretary of Foreign Affairs, prior to any insurance to the OFWs they deploy in
international meeting or negotiation of a accordance with the law: Provided, That with
treaty or executive agreement on any subject respect to OFWs deployed through other
matter within its mandate; arrangements, a substantially similar benefit
shall be provided to the concerned OFW;
8. Provide, in cooperation with the Department
of Education (DepEd), the Department of 15. Develop and create a training institute that
Trade and Industry (DTI), the Commission on will provide substantive, analytical and
Higher Education (CHED), the Technical strategic leadership training programs meant
Education and Skills Development Authority to equip employees of the Department,
(TESDAT), the Maritime Industry Authority especially those who will be working
(MARINA), and other government agencies, overseas, with necessary knowledge and
civil society organizations, nongovernmental skills, such as, but not limited to, the language,
organizations and the private sector, customs, traditions, and laws of the host
trainings aimed at promoting the global countries where OFWs are located, with due
competitiveness of OFWs, as well as job regard to the training services being provided
matching services to persons desiring to by the Foreign Service Institute of the DFA.
become OFWs; The training shall also include effective
means and methods in handling the concerns
of OFWs;
2024 GOLDEN NOTES
Jurisdiction of the POEA
16. Develop and create an institute for advanced
and strategic studies on migration and The POEA shall exercise original and exclusive
development, which shall, among others, jurisdiction over:
conduct advanced, strategic and up-to-date
studies and research on global migration and 1. All administrative pre-employment/
development trends; recruitment violation cases which are
administrative in character, involving or arising
17. In coordination with the DFA, conduct out of violations of Rules and Regulations
regular, timely and relevant political and relating to licensing and registration, including
security risk assessment of the conditions in refund of fees collected from the workers or
the receiving country, including adequate violation of the conditions for issuance of
evacuation plans that will be communicated license or authority to recruit workers; and
with all migrant workers thereat, not only for
deployment purposes but more especially in 2. Administrative disciplinary action cases
cases of emergencies which will require swift involving Ers, principals, contracting partners,
actions including, but not limited to, possible and OFWs processed by the POEA. (Sec. 6, Rule
evacuation of our migrant workers; X, Omnibus Rules and Regulations Implementing
R.A. No. 8042, as amended by R.A. No. 10022)
18. Create a system for the blacklisting of
persons, both natural and juridical, including NOTE: Petitioners’ adamant insistence that the
local and foreign recruitment agencies, their NLRC should have appellate authority over the
agents, and employers, who are involved in POEA’s decision in the disciplinary action because
trafficking as defined in Sec. 16(h), second their complaint against respondents was filed in
paragraph of Republic Act No. 9208, as 1993 was unwarranted. Although Sec. 10 of R.A. No.
amended. The Department shall create and 8042, transferred the original and exclusive
update a database of blacklisted persons jurisdiction to hear and decide money claims
which will be shared within the concerned involving overseas Filipino workers from the POEA
agencies of the Department and with the to the Labor Arbiters, the law did not remove from
IACAT. It shall also establish a monitoring the POEA the original and exclusive jurisdiction to
system for cases involving trafficking and hear and decide all disciplinary action cases and
illegal recruitment of OFWs; and other special cases administrative in character
involving such workers. It is that the NLRC had no
19. Perform such other functions as may be appellate jurisdiction to review the decision of the
necessary to achieve the objectives of this Act. POEA in disciplinary cases involving overseas
contract workers. In conclusion, we hold that
The exercise of the powers and functions of the petitioners should have appealed the adverse
Department shall in no way limit, restrict, or decision of the POEA to the SOLE instead of to the
diminish the pursuit of an independent foreign NLRC (Eastern Mediterranean Maritime Ltd. v. Surio,
policy or the conduct of foreign relations and G.R. 154213, 23 Aug. 2012)
treaty negotiations by the DFA.
The obvious intent of R.A. No. 8042 was to have
Protection of the rights and promotion of the POEA focus its efforts in resolving all administrative
welfare of overseas Filipinos is a pillar of matters affecting and involving such workers. This
Philippine foreign policy. The DFA shall continue intent was even expressly recognized in the
providing assistance to other Filipino nationals Omnibus Rules and Regulations Implementing the
not covered under this Act. (Sec. 6, R.A. No. 11641) Migrant Workers and Overseas Filipinos Act of 1995
promulgated on 29 Feb. 1996. (Ibid.)
2024 GOLDEN NOTES
Q: A seafarer was prevented from leaving the III and is hereby authorized to issue orders and
port of Manila and refused deployment without promulgate rules and regulations to carry out the
valid reason, but whose POEA-approved objectives and implement the provisions of Title III.
employment contract provides that the (Art. 36, LC)
employer-employee relationship shall
commence only upon the seafarer's actual Visitorial Power
departure from the port in the point of hire. Is he
entitled to relief? The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the
A: NO. A distinction must be made between the premises, books of accounts and records of any
perfection of the employment contract and the person or entity covered by Title III, require it to
commencement of the employer-employee submit reports regularly on prescribed forms, and
relationship. The perfection of the contract, which act on violation of any provisions of Title III.
in this case coincided with the date of execution
thereof, occurred when the seafarer and the Power to Terminate, Suspend, or Impose Total
shipping company agreed on the object and the Ban on Deployment of Migrant Workers
cause, as well as the rest of the terms and conditions
therein. The commencement of the employer- The Secretary of DMW, may, at any time, terminate,
employee relationship would have taken place had suspend, or impose a total ban on the deployment of
the seafarer been actually deployed from the point migrant workers, when upon his or her assessment,
of hire. Thus, even before the start of any employer- after consultation with the advisory board on
employee relationship, contemporaneous with the migration and development and the Secretary of the
perfection of the employment contract was the birth DFA in consonance with Republic Act No. 8042, as
of certain rights and obligations, the breach of which amended, the conditions in the receiving country or
may give rise to a cause of action against the erring region are inimical and not protective of the best
party. Thus, if the reverse had happened, that is the interest, welfare, and safety of migrant workers.
seafarer failed or refused to be deployed as agreed (Sec. 8(k), R.A. No. 11641)
upon, he would be liable for damages. (Santiago v.
C.F. Sharp Crew Management, Inc., G.R. No. 162419,
2. REGULATION OF RECRUITMENT AND
10 July 2007)
PLACEMENT ACTIVITIES
b. DOLE SECRETARY; REGULATORY AND

VISITORIAL POWERS a. BAN ON DIRECT HIRING; EXCEPTIONS
(Arts. 33, 36, and 37, LC) (Art. 18, LC)
Reports on Employment Status Direct Hiring
It occurs when an Er hires a Filipino worker for

Whenever the public interest requires, the Secretary
of Labor may direct all persons or entities within the overseas employment without going through the
coverage of Title II to submit a report on the status POEA or entities authorized by the SOLE.
of employment, including job vacancies, details of
job requisitions, separation from jobs, wages, other
terms and conditions and other employment data.
(Art. 33, LC)
Regulatory Power
The Secretary of Labor shall have the power to

restrict and regulate the recruitment and placement
activities of all agencies within the coverage of Title
2024 GOLDEN NOTES
Ban on Direct Hiring 3. To ensure full regulation of employment to
avoid exploitation.
GR: No Er may hire a Filipino worker for overseas
employment except through the Boards and entities Q: TRUE or FALSE. As a general rule, direct hiring
authorized by the SOL (Art. 18, LC) of OFWs is not allowed. (2010 BAR)
XPNs: A: TRUE. Art. 15 of the LC provides that no

employer may hire a Filipino worker for overseas
Direct hiring by: (M-I-H-O) employment except through the Boards and entities
authorized by the DOLE except direct-hiring by
1. Members of the diplomatic corps; members of the diplomatic corps, international
organizations and such other employers as may be
2. International organizations; allowed by the DOLE.
3. Heads of state and government officials with the Another exception is ‘‘Name Hire,” which refers to a
rank of at least deputy minister; or worker who is able to secure an overseas
employment opportunity with an employer without
4. Other Ers as may be allowed by the SOLE, such the assistance or participation of any agency. (2009-
as: 2017 UST FCL Bar Q&A)
a. Those provided in (a), (b), and (c) who bear NOTE: The obligation to register its personnel with
a lesser rank, if endorsed by the POLO or the POEA belongs to the officers of the agency not its
Head of Mission in the absence of the POLO; employees. (People v. Chowdury, G.R. No. 129577-80,
15 Feb. 2000)
b. Professionals and skilled workers with duly
executed/authenticated contracts b. ENTITIES AND PERSONS PROHIBITED
containing terms and conditions over and FROM RECRUITING
above the standards set by the POEA. The (Art. 26, LC; Sec. 6(j), R.A. No. 8042, as amended
number of professional and skilled OFWs by R.A. No. 10022; Sec. 3, Rule 1, Part II, Revised
hired for the first time by the Er shall not POEA Rules 2016 for Land-Based Workers)
exceed five (5). For the purpose of
determining the number, workers hired as a Land-Based Overseas Workers
group shall be counted as one; or
1. Travel agencies and sales agencies of airline
c. Workers hired by a relative/family member companies;
who is a permanent resident of the host
country. (Sec. 124, Rule II, Part III, Revised 2. Officers or members of the board of any
POEA Rules And Regulations Governing the corporation or members in a partnership
Recruitment and Employment of Land-Based engaged in the business of a travel agency;
OFWs of 2016)
3. Corporations and partnerships, when any of its
Purposes of the Prohibition on Direct Hiring officers, members of the board or partners, is
also an officer, member of the board, or partner
1. To ensure the best possible terms and of a corporation or partnership engaged in the
conditions of employment for the worker; business of a travel agency;
2. To assure the foreign Er that he hires only 4. Persons, partnerships, or corporations which
qualified Filipino workers; and have derogatory records, such as but not
limited to those:
2024 GOLDEN NOTES
a. Certified to have derogatory record or of a corporation or partnership engaged in the
information by the NBI or by the Anti- business of a travel agency;
Illegal Recruitment Branch of the POEA;
5. Individuals, partners, officers or directors of an
b. Against whom probable cause or prima insurance company who make, propose or
facie finding of guilt for illegal recruitment provide an insurance contract under the
or other related cases exists; compulsory insurance coverage for agency-
hired OFW;
c. Convicted for illegal recruitment or other
related cases and/or crimes involving 6. Sole proprietors, partners or officers and
moral turpitude; and members of the board with derogatory records,
such as, but not limited to the following:
d. Agencies whose licenses have been
previously revoked or cancelled by the a. Those convicted, or against whom probable
POEA for violation of R.A. No. 8042, as cause or prima facie finding of guilt is
amended by R.A. No. 10022, P.D. 442 as determined by a competent authority, for
amended, and their IRRs. illegal recruitment, or for other related
crimes or offenses committed in the course
4. Any official or Ee of the DOLE, POEA, OWWA, of, related to, or resulting from, illegal
DFA, and other government agencies directly recruitment, or for crimes involving moral
involved in the implementation of R.A. 8042 turpitude;
and/or any of his/her relatives within the
fourth civil degree of consanguinity or b. Those agencies whose licenses have been
affinity; and revoked for violation of R.A. No. 8042, as
amended, P.D. 442 (LC), as amended, and
5. Persons or partners, officers, and directors of R.A. No. 9208 (Trafficking in Persons Act of
corporations whose licenses have been 2003), as amended, and their IRRs;
previously cancelled or revoked for violation
of recruitment laws. (Sec. 2, Rule I, Part II, c. Those agencies whose licenses have been
POEA Rules and Regulations Governing the cancelled, or those who, pursuant to the
Recruitment and Employment of Land-Based Order of the Administrator, were included
Overseas Workers) in the list of persons with derogatory
record for violation of recruitment laws and
Sea-Based Overseas Workers regulations; and
1. Travel agencies and sales agencies of airline 7. Any official or Ee of the DOLE, POEA, OWWA,
companies; DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI,
PNP, Civil Aviation Authority of the Philippines
2. Officers or members of the board of any (CAAP), international airport authorities, and
corporation or members in a partnership other government agencies directly involved in
engaged in the business of a travel agency; the implementation of R.A. No. 8042, as
amended, and/or any of his/her relatives
3. The applicant is presently an incorporator, within the 4th civil degree of consanguinity or
director or key officer of at least five (5) licensed affinity. (Sec. 3, Rule I, Part II, 2016 Revised POEA
manning agencies; Rules and Regulations Governing the
Recruitment and Employment of Seafarers)
4. Corporations and partnerships, when any of its
officers, members of the board or partners, is
also an officer, member of the board, or partner
2024 GOLDEN NOTES
Illegal Recruitment abroad. Should the application be approved?
(2006 BAR)
It shall likewise include, whether committed by any
person, whether a non-licensee, non-holder, A: NO. The application should be disapproved,
licensee or holder of authority, for an officer or because it is prohibited by Art. 26 of the LC, which
agent of a recruitment or placement agency to provides that travel agencies and sales agencies of
become an officer or member of the Board of any airline companies are prohibited from engaging in
corporation engaged in travel agency or to be the business of recruitment and placement of
engaged directly or indirectly in the management of workers for overseas employment, whether for
travel agency. (Sec. 6(j), R.A. No. 8042, as amended by profit or not.
R.A. No. 10022)
Sec. 3, Rule I, Part II POEA Rules and Regulations
Prohibition on Travel Agencies and Sales Governing the Recruitment and Employment of Land-
Agencies of Airline Companies to Recruit Based Workers also disqualifies any entity having a
common director or owner of travel agencies and
They are prohibited from engaging in the business sales agencies of airlines, including any business
of recruitment and placement of workers for entity, from the recruitment and placement of
overseas employment, whether for profit or not, due Filipino workers overseas, whether they derive
to conflict of interest. (Art. 26, LC) profit or not.
Purpose for Prohibiting Travel Agencies c. NON-TRANSFERABILITY OF

LICENSE OR AUTHORITY
This is because travel agencies are under the (Art. 29, LC)
supervisory powers of the Department of Tourism
(DOT), not the DOLE. Otherwise, confusion may The grant of a license is a governmental act by the
arise to the detriment and disadvantage of an DOLE based on personal qualifications, and
overseas applicant-worker or may lead to citizenship and capitalization requirements. (Arts.
exploitation of the applicant-worker who will be at 27-28, LC)
the economic mercy of the travel agency or sales
agencies of airline company from the time his No license to engage in recruitment and placement
papers are processed to the time he departs. It shall be used directly or indirectly by any person
cannot be discounted that travel agencies can other than the one in whose favor it was issued or at
facilitate with the airlines the issuance of the any place other than that stated in the license or
worker's plane ticket. (Poquiz, 2018) authority be transferred, conveyed or assigned to
any other person or entity. Any transfer of business
Moreover, illegal recruitment activities can be address, appointment or designation of any agent or
traced to travel agencies that facilitate papers of job- representative including the establishment of
seekers for overseas. They could do a dirty job of additional offices anywhere shall be subject to the
legalizing the travel on tourist-visas with the prior approval of the DOLE. (Art. 29, LC)
assurance that the same could be converted into
work-visas in the country of employment. (Ibid.)
Q: WTTA is a well-known travel agency and an

authorized sales agent of PAL. Since majority of
its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities.
It stated in its application that its purpose is not

for profit but to help Filipinos find employment
2024 GOLDEN NOTES
The SOLE has the power under Art. 35 of the LC to
d. SUSPENSION OR CANCELLATION OF apply the penalties of suspension and cancellation
LICENSE OR AUTHORITY of license and authority. The SOLE also has the
(Art. 35, LC; Secs. 101 and 104, Rule I, Part III, authority, under Art. 36 of the LC, not only to restrict
Revised POEA Rules 2016 for Land-Based and regulate the recruitment and placement
Workers) activities of all agencies, but also to promulgate
rules and regulations to carry out the objectives and
License vs. Authority implement the provisions governing said activities.
Pursuant to this rule-making power, the SOLE
LICENSE AUTHORITY authorized the POEA to conduct the necessary
It means a document It means a document proceedings for the suspension or cancellation of
issued by DOLE issued by DOLE license or authority of any agency or entity for
authorizing a person or authorizing a person or certain enumerated offenses. (Trans Action Overseas
entity to operate a association to engage Corp. v. Secretary of Labor, G.R. No. 109583, 05 Sept.
private employment in recruitment and 1997)
agency. (Art. 13(d), LC) placement activities as
a private recruitment Thus, the Court concludes that the power to
entity. (Art. 13(f), LC) suspend or cancel any license or authority to recruit
Ees for overseas employment is concurrently vested
NOTE: In other words, “license” is issued to a with the POEA and the SOLE. (Ibid.)
person, partnership or corporation operating a
private employment agency. Whereas “authority” is Suspension of Accreditation by the POLO
issued to the employees, officers, agents or
representatives of said private employment agency. The POLO may suspend accreditation based on any
of the following grounds:
Two Kinds of Illegal Recruiter
1. Unjustified refusal to assist/repatriate
1. Licensee – performs any of the prohibited distressed Overseas Filipino Worker/s;
practices enumerated under Sec. 6 of R.A. 8042,
as amended by R.A. No. 10022. 2. Deliberate violation/non-compliance of the
principal/employer with its contractual
2. Non-licensee – any person, corporation, or obligations to its hired Overseas Filipino
entity: Worker/s;
a. Which has not been issued a valid 3. Continued processing and deployment of the
license or authority to engage in Overseas Filipino Workers for the
recruitment and placement by the principal/employer will lead to the further
SOLE; or exploitation of any or all of its applicants and
Overseas Filipino Workers or pose imminent
b. Whose license or authority has been danger to the lives and safety of its Overseas
suspended, revoked, or cancelled by Filipino Worker/s; or
the POEA or the SOLE.
4. When found to have hired and employed an
Jurisdiction of SOLE and POEA Administrator Overseas Filipino Worker who is either a minor
The SOLE and the POEA Administrator are vested or below the prescribed minimum age
with power to suspend or cancel any license or requirement. (Sec. 101, Rule I, Part III, Revised
authority to recruit Ees for overseas employment. POEA Rules 2016 for Land-based Workers)
(Art. 35, LC)
2024 GOLDEN NOTES
Revocation of Accreditation and Registration Registration (Art. 247, LC). There was also failure of
due process as no hearing was conducted prior to
The POLO or the Administration shall automatically the cancellation. (Art. 245, LC)
revoke the accreditation of a principal/employer on
any of the following grounds: As to the DOLE order imposing the travel ban, it
should be upheld because it is a valid exercise of
1. Expiration of the principal’s/employer’s police power to protect the national interest (Sec. 3,
business license or cessation of business or Art. XIII, 1987 Constitution) and on the rule making
recruitment activity, after a period of one (1) authority of the SOLE. (Art. 5, LC; Phil. Association. of
year from expiration or cessation; Service Exporters v. Drilon, G.R. No. 81958, 30 June
1988)
2. Upon written mutual agreement by the
principal/employer and the licensed
recruitment agency to terminate the
agreement;
3. When the principal/employer is meted the

penalty of disqualification from participation in
the overseas employment program; and
4. Failure to comply with the undertaking

submitted as requirement for accreditation.
(Sec. 104, Rule I, Part III, Revised POEA Rules
2016 for Land-based Workers)
Q: Concerned Filipino contract workers in the

Middle East reported to the DFA that XYZ, a
private recruitment and placement agency, is
covertly transporting extremists to terrorist
training camps abroad. Intelligence agencies of
the government allegedly confirmed the report.
Upon being alerted by the DFA, the DOLE issued
orders cancelling the licenses of XYZ, and
imposing an immediate travel ban on its recruits
for the Middle East. XYZ appealed to the Office of
the President to reverse and set aside the DOLE
orders, citing damages from loss of employment
of its recruits, and violations of due process
including lack of notice and hearing by the DOLE.
The DOLE, in its answer, claimed the existence of
an emergency in the Middle East which required
prompt measures to protect the life and limb of
OFWs from a clear and present danger posed by
the ongoing war against terrorism. Should the
DOLE orders be upheld or set aside? (2004 BAR)
A: The DOLE order cancelling the licenses of XYZ

should be set aside. A report that an agency is
covertly transporting extremists is not a valid
ground for cancellation of a Certificate of
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Grounds for Suspension or Cancellation of License
LAND-BASED OVERSEAS WORKERS SEA-BASED OVERSEAS WORKERS
Serious offenses – Cancellation of license
Attempting to deploy or deploying a seafarer who is

Deploying underage workers; below 18 years old or below the minimum age
requirement;
Engaging in acts of misrepresentation for the Engaging in acts of misrepresentation for the
purpose of securing a license or renewal thereof, purpose of securing a license or renewal thereof,
such as giving false information or documents; such as giving false information or documents;
Engaging in the recruitment or placement of Engaging in the recruitment or placement of

workers in jobs harmful to public health or morality workers in jobs harmful to public health or morality
or to dignity of the Republic of the Philippines; or to the dignity of the Republic of the Philippines;
Transfer or change of ownership of a single Transfer or change of ownership, directly or

proprietorship licensed to engage in overseas indirectly, of a single proprietorship licensed to
employment; engage in overseas employment;
Charging or accepting directly or indirectly any

amount greater than that specified in the schedule Charging or accepting directly or indirectly any
of allowable fees prescribed by the Secretary, or amount of money, goods or services, or any fee or
making a worker pay any amount greater than that bond for any purpose from an applicant seafarer;
actually received by him as a loan or advance.
Charging or collecting placement fee for

Charging, imposing or accepting, directly or
deployment to countries where the prevailing
indirectly, under any guise whatsoever, any amount
system, either by law, policy or practice do not allow
of money as payment for the insurance premium for
the charging or collection of placement and
compulsory insurance coverage;
recruitment fees; and
Allowing a non-Filipino citizen to head or manage a

__
licensed manning agency;
Collecting any amount as payment for processing,

or documentation costs not prescribed by the rules,
__ or an amount greater than the actual
documentation costs, as covered by official receipts
issued by entities where payments were made; and
2024 GOLDEN NOTES
Falsifying or altering travel documents of an

__ applicant seafarer in relation to recruitment and
deployment.
Engaging in acts of misrepresentation for the

purpose of processing workers through a job order
that pertains to non-existent work, work different
__
from the actual overseas work, or work with a
different Er whether accredited or not with the
POEA;
Engaging in any acts of misrepresentation in

connection with recruitment and placement of
__ workers, such as furnishing or publishing any false
notice, information or document in relation to
recruitment or employment;
Less serious offenses – Suspension or cancellation
Failure to comply with the undertaking to provide Failure to comply with any of the undertakings
Pre-Departure Orientation Seminar to workers submitted to the Administration.
Non-compliance with any other undertaking in

Default on contractual obligations to the
connection with the issuance or renewal of the
principal/Er.
license
Withholding of seafarer's salaries or remittances,

Withholding of workers' salaries or remittances
SSS contributions and loan amortization or
without justifiable reasons or shortchanging of
shortchanging/reduction thereof without
remittances
justifiable reasons.
Obstructing or attempting to obstruct inspection by Obstructing or attempting to obstruct inspection by

the Secretary, the Administrator or their duly the Secretary, the Administrator or their duly
authorized representatives authorized representatives.
Appointing or designating agents, representatives Appointing or designating agents, representatives

or Ees without prior approval from the or Ees without notice to the Administration within
Administration the period prescribed under the Rules.
2024 GOLDEN NOTES
Substituting or altering to the prejudice of the Substituting or altering to the prejudice of the
worker, employment contracts approved and seafarer, employment contracts approved and
verified by the Department from the time of actual verified by the Administration, from the time of
signing thereof by the parties up to and including actual signing thereof by the parties up to and
the period of the expiration of the same without the including the period of expiration of the same,
approval of the Department without the approval of the Administration.
Withholding or denying travel or other pertinent

Withholding or denying travel or other pertinent
documents from an applicant seafarer for monetary
documents from workers for reasons other than
or financial considerations, or for any other
those authorized under existing laws and
reasons, other than those authorized under the LC
regulations.
and its implementing Rules and Regulations.
Allowing persons who are otherwise disqualified to Allowing persons who are otherwise disqualified
participate in the overseas employment program from participating in the overseas employment
under existing laws, rules and regulations to program under existing laws, rules and regulations
participate in the management and operation of the to participate in the management and operation of
agency the agency.
Failure to reimburse expenses incurred by the Failure to reimburse expenses incurred by the
worker in connection with his documentation and seafarer in connection with his documentation and
processing for purposes of deployment, where processing for purposes of deployment, where
deployment does not take place without the deployment does not take place without the
worker's fault seafarer's fault.
Impose a compulsory and exclusive arrangement

whereby a seafarer is required to undergo health
Deploying workers whose employment and travel examinations (PEME), training, seminar, instruction
documents were not processed by the or schooling of any kind only from specifically
Administration or those agencies authorized by it. designated institutions, entities, or clinics, as the
case may be, unless the cost is shouldered by the
principal/Er or licensed manning agency.
Impose a compulsory and exclusive arrangement

Deploying workers to principals not accredited or whereby a seafarer is required to avail of a loan
registered by the Administration. from a specifically designated institution, entity, or
person.
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Granting a loan to a seafarer with interest exceeding

Charging, imposing or accepting directly or
eight percent (8%) per annum which will be used
indirectly, any amount of money goods or services,
for payment of legal and allowable fees and making
or any fee or bond for any purpose whatsoever
the seafarer issue, either personally or through a
before employment is obtained for an applicant
guarantor or accommodation party, post-dated
worker.
checks in relation to the said loan.
Refuse to condone or renegotiate a loan incurred by

Collecting any fee from a worker without issuing the
the seafarer after the latter's employment contract
appropriate receipt clearly showing the amount
has been prematurely terminated through no fault
paid and the purpose for which payment was made
of his/her own.
Engaging in acts of misrepresentation in connection

with recruitment and placement of workers, such as Failure to submit reports on serious incidents
furnishing or publishing any false notice, involving piracy, death, missing seafarer, serious
information or document in relation to recruitment illness and injury requiring repatriation.
or employment
Engaging in recruitment activities in places other

Falsifying or altering travel documents of applicant
than that specified in the license without previous
worker in relation to recruitment activities
authorization from the Administration.
Light offenses – Light offenses –

Reprimand/suspension/cancellation Reprimand/suspension
For the owner, partner, or officer/s of any licensed

For the owner, partner, or officer/s of any licensed
manning agency to become an officer or member of
agency to become an officer or member of the Board
the Board of any corporation or partnership
of any corporation or partnership engaged directly
engaged directly or indirectly in the management of
or indirectly in the management of a travel agency
a travel agency.
Inducing or attempting to induce an already Inducing or attempting to induce an already

employed worker to transfer from or leave his contracted seafarer to transfer from or leave
employment for another unless the transfer is his/her employment for another unless the transfer
designed to liberate a worker from oppressive is designed to liberate a seafarer from oppressive
terms and conditions of employment terms and conditions of employment.
Influencing or attempting to influence any person

or entity not to employ any seafarer who has not
Influencing or attempting to influence any person
applied for employment through his agency or who
or entity not to employ any worker who has not
has formed, joined or supported, or has contacted
applied for employment through his agency
or is supported by any union or seafarer's
organization.
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Failure to deploy a worker within the prescribed Failure to actually deploy a contracted seafarer
period without valid reason within the prescribed period without valid reason.
Coercing workers to accept prejudicial Coercing a seafarer to accept prejudicial

arrangements in exchange for certain benefits that arrangements in exchange for certain benefits that
rightfully belong to the workers rightfully belong to them.
Disregard of orders, notices and other legal Disregard of orders, notices and other legal
processes issued by the Administration processes issued by the Administration.
Failure to submit reports related to overseas

recruitment and employment within the specified
time as may be required by the Secretary or the
Failure to submit reports on the status of the
Administration Violation of other pertinent
employment of seafarers, placement vacancies,
provisions of the Code and other relevant laws,
remittance of foreign exchange earnings,
rules and regulations, guidelines and other
departures, and such other matters or information
issuances on recruitment and placement of workers
as may be required by the Secretary or the
for overseas employment and the protection of
Administration, such as resignation and separation
their welfare. (Sec. 1, Rule IV, Part VI, POEA Rules and
from jobs of office staff members.
Regulations Governing the Recruitment and
Employment of Land-Based Overseas Workers; R.A.
No. 8042, as amended by R.A. No. 10022)
Violation of other pertinent provisions of the Code

and other relevant laws, rules and regulations,
guidelines and other issuances on recruitment and
placement of seafarer for overseas employment and
__
the protection of their welfare. (Sec. 123, Rule III,
Part V, Revised POEA Rules and Regulations 2016
Governing the Recruitment and Employment of
Seafarers)
e. PROHIBITED PRACTICES – Prohibited Practices

(Art. 34, R.A. No. 8042, as amended by Sec. 6, R.A.
No. 10022; Sec. 76, Rule X, Part I, POEA Rules It shall be unlawful for any individual, entity,
2016 for Land-Based Workers) licensee, or holder of authority:
Illegal recruitment is not limited to performing acts 1. Charging or accepting, directly or indirectly, any
of recruitment without a license. It may also be amount greater than that specified in the
perpetrated by a non-licensee by committing any of schedule of allowable fees prescribed by the
the prohibited acts provided in Art. 34 of the LC. SOLE, or to make a worker pay any amount
greater than that actually received by him as a
loan or advance;
2024 GOLDEN NOTES
2. Furnishing or publishing any false notice or those authorized under the LC and its IRRs. (Art.
information or document in relation to 34, LC)
Illegal Recruitment
3. Giving any false notice, testimony, information
or document or commit any act of 1. It shall mean any act of canvassing, enlisting,
misrepresentation for the purpose of securing a contracting, transporting, utilizing, hiring, or
license or authority under the LC; procuring workers and includes referring,
contract services, promising or advertising for
4. Inducing or attempting to induce a worker employment abroad, whether for profit or not,
already employed to quit his employment in when undertaken by non-licensee or non-
order to offer him to another unless the transfer holder of authority contemplated under Art.
is designed to liberate the worker from 13(f) of the LC of the Philippines:
oppressive terms and conditions of
employment; 2. Provided, that any such non-licensee or non-
holder who, in any manner, offers or promises
5. Influencing or attempting to influence any for a fee employment abroad to two or more
person or entity not to employ any worker who persons shall be deemed so engaged.
has not applied for employment through his
agency; 3. It shall likewise include the following acts,
whether committed by any person, whether a
6. Engaging in the recruitment or placement of non-licensee, non-holder, licensee or holder of
workers in jobs harmful to public health or authority:
morality or to the dignity of the Republic of the
Philippines; a. To charge or accept directly or indirectly any
amount greater than that specified in the
7. Obstructing or attempting to obstruct schedule of allowable fees prescribed by the
inspection by the SOLE or by his duly Secretary of Labor and Employment, or to
authorized representatives; make a worker pay or acknowledge any
amount greater than that actually received
8. Failing to file reports on the status of by him as a loan or advance;
employment, placement vacancies, remittance
of foreign exchange earnings, separation from b. To furnish or publish any false notice or
jobs, departures and such other matters or information or document in relation to
information as may be required by the SOLE; recruitment or employment;
9. Substituting or altering employment contracts c. To give any false notice, testimony,

approved and verified by the DOLE from the information or document or commit any act
time of actual signing thereof by the parties up of misrepresentation for the purpose of
to and including the periods of expiration of the securing a license or authority under the
same without the approval of the SOLE; Labor Code, or for the purpose of
documenting hired workers with the POEA,
10. Becoming an officer or member of the board of which include the act of reprocessing
any corporation engaged in travel agency or to workers through a job order that pertains to
be engaged directly or indirectly in the nonexistent work, work different from the
management of a travel agency; and actual overseas work, or work with a
different employer whether registered or
11. Withholding or denying travel documents from not with the POEA;
applicant workers before departure for
monetary or financial considerations other than
2024 GOLDEN NOTES
d. To include or attempt to induce a worker
already employed to quit his employment in k. Failure to actually deploy a contracted
order to offer him another unless the worker without valid reason as determined
transfer is designed to liberate a worker by the Department of Labor and
from oppressive terms and conditions of Employment;
employment;
l. Failure to reimburse expenses incurred by
e. To influence or attempt to influence any the worker in connection with his
person or entity not to employ any worker documentation and processing for purposes
who has not applied for employment of deployment, in cases where the
through his agency or who has formed, deployment does not actually take place
joined or supported, or has contacted or is without the worker's fault. Illegal
supported by any union or workers' recruitment when committed by a syndicate
organization; or in large scale shall be considered an
offense involving economic sabotage; and
f. To engage in the recruitment or placement of
workers in jobs harmful to public health or m. To allow a non-Filipino citizen to head or
morality or to the dignity of the Republic of manage a licensed recruitment/manning
the Philippines; agency.
g. To fail to submit reports on the status of n. Illegal recruitment is deemed committed by

employment, placement vacancies, a syndicate if carried out by a group of three
remittance of foreign exchange earnings, (3) or more persons conspiring or
separation from jobs, departures and such confederating with one another. It is deemed
other matters or information as may be committed in large scale if committed
required by the Secretary of Labor and against three (3) or more persons
Employment; individually or as a group.
h. To substitute or alter to the prejudice of the In addition to the acts enumerated above, it shall
worker, employment contracts approved also be unlawful for any person or entity to commit
and verified by the Department of Labor and the following prohibited acts:
Employment from the time of actual signing
thereof by the parties up to and including the a. Grant a loan to an overseas Filipino worker
period of the expiration of the same without with interest exceeding eight percent (8%)
the approval of the Department of Labor and per annum, which will be used for payment
Employment; of legal and allowable placement fees and
make the migrant worker issue, either
i. For an officer or agent of a recruitment or personally or through a guarantor or
placement agency to become an officer or accommodation party, postdated checks in
member of the Board of any corporation relation to the said loan;
engaged in travel agency or to be engaged
directly or indirectly in the management of b. Impose a compulsory and exclusive
travel agency; arrangement whereby an overseas Filipino
worker is required to avail of a loan only
j. To withhold or deny travel documents from from specifically designated institutions,
applicant workers before departure for entities or persons;
monetary or financial considerations, or for
any other reasons, other than those c. Refuse to condone or renegotiate a loan
authorized under the Labor Code and its incurred by an overseas Filipino worker
implementing rules and regulations; after the latter's employment contract has
2024 GOLDEN NOTES
been prematurely terminated through no Code, to be undertaken by non-licensed or non-
fault of his or her own; holders of authority, shall be deemed illegal and
punishable. (Art. 38(a), LC)
d. Impose a compulsory and exclusive
arrangement whereby an overseas Filipino Persons Liable for Illegal Recruitment
worker is required to undergo health
examinations only from specifically The persons criminally liable for illegal recruitment
designated medical clinics, institutions, are the principals, accomplices and accessories. In
entities or persons, except in the case of a case of juridical persons, the officers having
seafarer whose medical examination cost is ownership, control, management or direction of
shouldered by the principal/shipowner; their business who are responsible for the
commission of the offense and the responsible
e. Impose a compulsory and exclusive employees/agents thereof shall be liable.
arrangement whereby an overseas Filipino
worker is required to undergo training, The following are examples of employees held liable
seminar, instruction or schooling of any kind as principal in Illegal Recruitment:
only from specifically designated
institutions, entities or persons, except fpr 1. Clerk;
recommendatory trainings mandated by 2. Secretary;
principals/shipowners where the latter 3. Cashier;
shoulder the cost of such trainings; 4. Operations Manager;
5. Crewing Manager;
f. For a suspended recruitment/manning 6. General Manager;
agency to engage in any kind of recruitment 7. Overseas Marketing Director or Manager; and
activity including the processing of pending 8. Vice-President or Treasurer or Assistant
workers' applications; and General Manager
g. For a recruitment/manning agency or a Prohibited Acts in Recruitment and Placement

foreign principal/employer to pass on the
overseas Filipino worker or deduct from his 1. Overcharging – To charge or accept, directly or
or her salary the payment of the cost of indirectly, any amount greater than that
insurance fees, premium or other insurance specified in the schedule of allowable fees
related charges, as provided under the prescribed by the SOLE, or to make a worker
compulsory worker's insurance coverage. pay or acknowledge any amount greater than
(Sec. 6, R.A. No. 8042, as amended by R.A. No. that actually received by him as a loan or
10022; Sec. 76, Rule X, Part I, Revised POEA advance;
Rules 2016 for Land-based Workers)
2. False Notice – To furnish or publish any false
f. ILLEGAL RECRUITMENT notice or information or document in relation to
Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers 3. Misrepresentation to Secure License – To give
and includes referring, contract services, promising any false notice, testimony, information or
or advertising for employment abroad, whether for document or commit any act of
profit or not, when undertaken by non-licensee or misrepresentation for the purpose of securing a
non-holder of authority. (Sec. 6, R.A. No. 8042, as license or authority under the LC, or for the
amended by R.A. No. 10022) purpose of documenting hired workers with the
POEA, which include the act of reprocessing
Any recruitment activities, including the prohibited workers through a job order that pertains to
practices enumerated under Art. 34 of the Labor nonexistent work, work different from the
2024 GOLDEN NOTES
actual overseas work, or work with a different
Er whether registered or not with the POEA; 11. Failure to Deploy – To fail to actually deploy a
contracted worker without valid reason as
4. Inducing Worker to Quit – To induce or determined by the DOLE;
attempt to induce a worker already employed to
quit his employment in order to offer him to 12. Failure to Reimburse – To fail to reimburse
another, unless the transfer is designed to expenses incurred by the worker in connection
liberate the worker from oppressive terms and with his/her documentation and processing for
conditions of employment; purposes of deployment, in cases where the
deployment does not actually take place
5. Inducement Not to Employ – To influence or without the worker’s fault;
attempt to influence any person or entity not to
employ any worker who has not applied for 13. Non-Filipino Manager – To allow a non-
employment through his agency or who has Filipino citizen to head or manage a recruitment
formed, joined or supported, or has contacted agency;
or is supported by any union or workers'
organization; 14. Imposition of Excessive Interest – To grant a
loan to an OFW with interest exceeding 8% per
6. Recruitment for Harmful Jobs – To engage in annum, which will be used for payment of legal
the recruitment or placement of workers in jobs and allowable placement fees and make the
harmful to public health or morality or to the migrant worker issue, either personally or
dignity of the Republic of the Philippines; through a guarantor or accommodation party,
postdated checks in relation to the said loan;
7. Failure to submit reports - To fail to submit
reports on the status of employment, placement 15. Specifying a Loan Entity – To impose a
vacancies, remittance of foreign exchange compulsory and exclusive arrangement
earnings, separation from jobs, departures and whereby an OFW is required to avail of a loan
such other matters or information as may be only from specifically designated institutions,
required by the SOLE; entities, or persons;
8. Contract Substitution – To substitute or alter to 16. Non-Renegotiation of Loan – To refuse to

the prejudice of the worker, employment condone or renegotiate a loan incurred by an
contracts prescribed by the Department from OFW after his employment contract has been
the time of actual signing thereof by the parties prematurely terminated through no fault of his
up to and including the period of the expiration or her own;
of the same without the approval of the DOLE;
17. Specifying a Medical Entity – To impose a
9. Involvement in Travel Agency – For an officer compulsory and exclusive arrangement
or agent of a recruitment or placement agency whereby an OFW is required to undergo health
to become an officer or member of the Board of examinations only from specifically designated
any corporation engaged in travel agency or medical clinics, institutions, entities or persons,
insurance or to be engaged directly or indirectly except in the case of a worker whose medical
in the management of a travel agency or examination cost is shouldered by the principal;
insurance agency;
18. Specifying a Training Entity – To impose a
10. Withholding of Documents – To withhold or compulsory and exclusive arrangement
deny travel documents from applicant workers whereby an OFW is required to undergo
before departure for monetary or financial training, seminar, instruction or schooling of
considerations, or for any other reasons, other any kind only from specifically designated
than those authorized under the LC and its IRR; institutions, entities or persons, except for
2024 GOLDEN NOTES
recommendatory trainings mandated by impression that appellant had the ability to facilitate
principals where the latter shoulder the cost of their applications and, eventually, deploy them for
such trainings; employment abroad. (People of the Philippines V.
Oliver Imperio Y Antonio, G.R. No. 232623, 05 Oct.
19. Violation of Suspension – For a suspended 2020)
recruitment/manning agency to engage in any
kind of recruitment activity including the Q: A crew agreement was entered into by Nerry
processing of pending workers' applications; Balatongan and Philimare Shipping and
and Equipment Supply for the employment of the
former as a seaman on board the vessel "Santa
20. Collection of Insurance Premium – For a Cruz” which was approved by the National
recruitment/manning agency or a foreign Seaman's Board (NSB). While on board vessel,
principal/ Er to pass on the OFW or deduct from the parties entered into a supplementary
his or her salary the payment of the cost of contract of employment providing for accident
insurance fees, premium or other insurance and death benefits. Balatongan met an accident
related charges, as provided under the in Egypt, and subsequently at the Makati
compulsory worker's insurance coverage. (Sec. Medical Center. The medical certificate was
6, R.A. No. 8042, as amended by R.A. No. 10022) issued describing his disability as "permanent
in nature." He demanded payment for his claim
Q: Juan informed Pedro that the former’s aunt in for total disability, as provided for in the
the U.S. was hiring a data encoder. Due to Juan’s contract of employment, but his claim was
representations, Pedro forwarded his resume. denied. Can the second contract of employment
Juan requested Pedro to make referrals in which be enforced against Philimare despite the
the latter recommended five Filipinos. Despite absence of NSB verification or approval?
the applicants' repeated inquiries, and the lapse A: YES. The supplementary contract of employment
of a considerable length of time, appellant failed was entered into between petitioner and private
to secure overseas employment for them as respondent to modify the original contract of
promised. Are the elements of Illegal employment. The reason why the law requires that
Recruitment in Large Scale present? the POEA should approve and verify a contract
under Art. 34(i) of the LC is to ensure that the Ee
A: YES. R.A. No. 8042, a non-licensee or non-holder shall not be placed in a disadvantageous position
of authority is liable for Illegal Recruitment when and that the same are within the minimum
the following elements concur: (1) the offender has standards of the terms and conditions of such
no valid license or authority required by law to employment contract set by the POEA.
enable him to lawfully engage in recruitment and However, there is no prohibition against stipulating
placement of workers; and (2) the offender in a contract more benefits to the Ee than those
undertakes any of the activities within the meaning required by law. Thus, in this case wherein a
of “recruitment and placement” under Art. 13(b) of “supplementary contract” was entered into
the LC or any of the prohibited practices affording greater benefits to the Ee than the
enumerated under Art. 34 of the LC (now Sec. 6 of previous one, and although the same was not
R.A. No 8042). In the case of Illegal Recruitment in submitted for the approval of the POEA, the same
Large Scale, a third element is added: that the should still be considered to be valid and
offender commits any of the acts of recruitment and enforceable. (Seagull Maritime Corp. v. Balatongan,
placement against three or more persons, G.R. No. 82252, 28 Feb. 1989)
individually or as a group.
Here, Juan is a non-licensee or non-holder of
authority. And five complainants who corroborated
each other on material points, all positively
identified Juan as the person who promised them
overseas employment. Juan gave them the distinct
2024 GOLDEN NOTES
of necessary license from POEA. (People v.
i. ELEMENTS AND TYPES Alzona, G.R. No. 132029, 30 July 2004)
(Art. 38, LC; Sec. 6, R.A. No. 8042, as amended by
R.A. No. 10022) Prescription of action: 20 years. (Sec. 12, R.A.
No. 8042, as amended by R.A. No. 10022)
Elements of Illegal Recruitment
NOTE: “Illegal recruitment in large scale”
1. The offender undertakes any of the activities pertains to the number of victims, while
within the meaning of “recruitment and “syndicated illegal recruitment” pertains to the
placement” under Art. 13(b) of the LC, or any of number of recruiters.
the prohibited practices enumerated under
Art. 34 of the LC; and Illegal Recruitment as Economic Sabotage
2. The offender has no valid license or authority Illegal recruitment, when committed by a syndicate
required by law to enable him to lawfully or in large scale, shall be considered an offense
engage in recruitment and placement of involving economic sabotage. (Art. 38(b), LC)
workers. (People v Chua, G.R. No. 187052, 13
Sept. 2012) Illegal Recruitment in Large Scale
Types of Illegal Recruitment In People v. Calonzo (G.R. Nos. 115150-55, 27 Sept.

1996), illegal recruitment in large scale is
1. Simple – It is committed where a licensee/non- committed when a person:
licensee or holder/non-holder of authority
undertakes either any recruitment activities (a) undertakes any recruitment activity
defined under Art. 13(b), or any prohibited defined under Art. 13(b) or any prohibited
practices enumerated under Sec. 6 of R.A. No. practice enumerated under Art. 34 of the
8042, as amended by R.A. No. 10022. LC;
Prescription of action: 5 years. (Sec. 12, R.A. (b) does not have a license or authority to
No. 8042, as amended by R.A. No. 10022) lawfully engage in the recruitment and
placement of workers; and
NOTE: Where illegal recruitment is proved, but
the elements of large scale and syndicate are (c) commits the same against three (3) or more
absent, the accused can be only convicted of persons, individually or as a group.
simple illegal recruitment. (People v. Segun, G.R.
No. 119076, 25 Mar. 2002) NOTE: Illegal Recruitment in Large Scale must be
understood as referring to the number of
2. Illegal Recruitment as Economic Sabotage – It complainants in each case. Not complaints.
is economic sabotage when complex illegal
recruitment is committed. Illegal Recruitment Committed by a Syndicate
a. Syndicated – committed by a syndicate if It is carried out by a group of three (3) or more

carried out by a group of three (3) or more persons conspiring and/or confederating with one
persons in conspiracy or confederation another in carrying out any unlawful or illegal
with one another; transaction, enterprise or scheme. (People v.
Agustin, G.R. No. 113161, 29 Aug. 1995.)
b. Large Scale or qualified – committed
against three (3) or more persons
individually or as a group despite the lack
2024 GOLDEN NOTES
Non-Licensee or Non-Holder of Authority malum prohibitum. An affidavit of desistance does
not extinguish criminal liability.
Any person, corporation or entity which has not
been issued a valid license or authority to engage in The Code applies to any recruitment or placement,
recruitment and placement by the SOLE, or whose whether or not for profit. The reference in the Code
license or authority has been suspended, revoked or that any person who offers employment to “two or
cancelled by the POEA or the Secretary. There is no more persons” as being engaged in recruitment and
need to show that the accused represented himself placement does not mean that there must be at least
as a licensed recruiter. (People v. Ballesteros, G.R. two persons involved as this reference is merely
Nos. 116905-908, 06 Aug. 2002) evidentiary. Any person may be charged with illegal
recruitment if they already charged fees even if they
Liability of the Officers have not yet obtained employment for the applicant.
In case of juridical persons, the officers having Distinct Impression Rule

ownership, control, management or direction of
their businesses who are responsible for the When the offender was engaged in recruitment
commission of the offense shall be criminally liable activities as to commit the crime of illegal
therefor. Failure to reimburse the expenses recruitment, it must be shown that the distinct
incurred by the worker in connection with his impression that offender had the power or ability to
documentation and processing for purposes of send the offender party abroad for work such that
deployment, in cases where the deployment does the latter was convinced to part with her money in
not actually take place without the worker’s fault, order to be so employed. (Darvin v. CA, G.R No.
amounts to illegal recruitment under Sec. 6(m) of 125044, 13 Jul. 1998)
the law. (Sec. 6, R.A. No. 8042)
ii. ILLEGAL RECRUITMENT VS. ESTAFA
Liability of the Employee (Sec. 6, R.A. No. 8042, as amended by R.A. No.
10022; Art. 315(2)(a), RPC)
An employee of a company or corporation engaged
in illegal recruitment may be held liable as principal, A person may be charged and convicted separately
together with his employer, if it is shown that he or of Illegal Recruitment under the Labor Code and
she actively and consciously participated in illegal Estafa under the RPC. (People v. Turda, G.R. Nos.
recruitment. 97044-46, 06 July 1994)
Thus, in cases of non-registration of agents or Elements of Estafa

representatives appointed by a licensed
recruitment agency, it must be proved that such 1. Accused defrauded another by abuse of
agents or representatives were aware of failure to confidence or by means of deceit; and
register their names with the POEA and that they
actively engaged in recruitment despite this 2. Damage or prejudice capable of pecuniary
knowledge. estimation is caused to the offended party or
third person.
As a rule, the obligation to register its personnel
with the POEA belongs to the officers of the agency.
A mere employee of the agency cannot be expected
to know the legal requirements for its operation.
(People v. Chowdury, G.R. No. 129577-80, 15 Feb.
2000)
NOTE: Good faith is not a defense in illegal

recruitment. (Sec. 6, R.A. 8042) Illegal recruitment is
2024 GOLDEN NOTES
Illegal Recruitment vs. Estafa is malum prohibitum, in which there is no necessity
to prove criminal intent, whereas estafa is malum in
ILLEGAL se, in the prosecution of which, proof of criminal
ESTAFA
RECRUITMENT intent is necessary. (Sy v. People, G.R. No. 183879, 14
Malum prohibitum Malum in se Apr. 2010)
It is not required that it
be shown that the Q: Toston was charged with illegal recruitment
Accused defrauded
recruiter wrongfully and estafa. Records reveal that Mary Ann dealt
another by abuse of
represented himself as with Toston in the latter's capacity as an Ee of
confidence or by
a licensed recruiter. Steadfast. The records reveal that Mary Ann was
means of deceit.
found to be medically unfit for overseas
NOTE: It is enough that deployment, contrary to the representations
NOTE: It is essential
the victims were made to Mary Ann by Gutierrez. However, the
that the false statement
deceived as they relied prosecution did not present proof
or fraudulent
on the that Toston knew about the result of Mary Ann's
representation
misrepresentation and medical examination or that he was privy to
constitutes the very
scheme that caused Gutierrez' concealment of this fact from Mary
cause or the only
them to entrust their Ann. Will the charges prosper?
motive which induces
money in exchange of
the complainant to
what they later A: NO. The charges will not prosper. As to the charge
part with the thing of
discovered was a vain of illegal recruitment, Toston did not personally
value.
hope of obtaining represent himself as a licensee or holder of
employment abroad. authority but only as an Ee.
Q: Bugo, by means of false pretenses and As to the charge of estafa, the element of fraud by
fraudulent representation, convinced Dado to abuse of confidence or deceit with respect
give the amount of P120,000.00 for processing to Toston is negated by the fact that, at the time of
the latter’s papers so that he can be deployed to the act complained of, Toston was an Ee of a validly
Japan. Dado later on found out that Bugo had licensed recruitment agency. (Toston y Hular v.
misappropriated, misapplied and converted the People, G.R. No. 232049, 03 Mar. 2021)
money for her own personal use and benefit. Can
Dado file the cases of illegal recruitment and g. SOLIDARY LIABILITY OF LOCAL
estafa simultaneously? RECRUITMENT AGENCY AND FOREIGN
EMPLOYER
A: YES. Illegal recruitment and estafa cases may be (Sec. 10, R.A. No. 8042, as amended by R.A. No.
filed simultaneously or separately. The filing of 10022; Theory of Imputed Knowledge)
charges for illegal recruitment does not bar the
filing of estafa, and vice versa. Bugo’s acquittal in the Solidary Liability
illegal recruitment case does not prove that she is
not guilty of estafa. It refers to the liability of the principal/employer
and the recruitment/manning agency, for any and
Illegal recruitment and estafa are entirely different all claims arising out of the implementation of the
offenses and neither one necessarily includes or is employment contract involving Filipino workers for
necessarily included in the other. A person who is overseas deployment. If the recruitment/manning
convicted of illegal recruitment may, in addition, be agency is a juridical being, the corporate officers and
convicted of estafa under Art. 315(2) of the RPC. In directors and partners, as the case may be, shall
the same manner, a person acquitted of illegal themselves be jointly and severally liable with the
recruitment may be held liable for estafa. Double corporation or partnership for the aforesaid claims
jeopardy will not set in because illegal recruitment and damages.
2024 GOLDEN NOTES
In overseas employment, either the local agency or under the agreement, do not at all end, but the same
the foreign employer may be sued by the OFW. This extends up to and until the expiration of the
way, the OFW is assured that someone — the foreign employment contracts of the employees. (Catan v.
employer's local agent — may be made to answer NLRC, G.R. No. 77279, 15 Apr. 1988)
for violations that the foreign employer may have
committed. (Sameer Overseas Placement Agency, Inc. Q: Mr. A signed a one-year contract with XYZ
v. Cabiles, G.R. No. 170139, 05 Aug. 2014.) Recruitment Co. for deployment as welding
supervisor for DEF, Inc. located in Dubai. The
Liability of the Principal and Recruitment employment contract, which the POEA
Agency approved, stipulated a salary of $600.00 a
month. Mr. A had only been in his job in Dubai
The liability of the principal/employer and the for six (6) months when DEF, Inc. announced
recruitment/placement agency for any and all that it was suffering from severe financial losses,
claims under this Sec. shall be joint and several. (Sec. thus, intended to retrench some of its workers,
10, R.A. No. 8042, as amended by R.A. No. 10022) among them Mr. A. DEF, Inc. hinted, however,
that employees who would accept a lower salary
The agency which deployed that employees whose could be retained.
employment contracts were adjudged illegally
terminated, is jointly and solidarily liable with the Together with some other Filipino workers, Mr.
principal for the money claims awarded to the A agreed to a reduced salary of $400.00 a month,
employees which consist of payment of the salaries thus, continued with his employment.
due to the OFWs corresponding to the unexpired
portion of their contract as well as the Assuming that the reduction was invalid, may
reimbursement for their placement fees. (Poquiz, Mr. A hold XYZ recruitment Co. liable for
2018) underpayment of wages? Explain. (2019 BAR)
This joint and solidary liability imposed by law A: YES, Mr. A. may hold XYZ Recruitment Co. liable
against recruitment agencies and foreign employers for the payment of his wages under the rule that a
is meant to assure the aggrieved worker of recruiter is solidarily liable for breach of the terms
immediate and sufficient payment of what is due and conditions of the POEA-approved employment
him. (Becmen Service Exporter and Promotion v. Sps. contract. (Sec.1(f), Rule II, Book 11, POEA Rules and
Cuaresma, G.R. Nos. 182978-79 & 184298-99, 07 Apr. Regulations; Datuman v. First Cosmopolitan
2009) Manpower and Promotion Services, Inc., G.R. 156029,
14 Nov. 2008)
The solidary liability of the principal and the
recruitment agency exists for the whole duration of Liability of the Local Recruitment Agency
the employment contract and shall not be affected
by any substitution, amendment or modification GR: A local recruitment agency shall be jointly and
made locally or in a foreign country. (Sec. 10, R.A. No. solidarily liable with its principal or foreign-based
8042, as amended) employer for any violation of the recruitment
agreement and violation of contracts of
NOTE: Severance of relations between the local employment. (Sec. 10(a)(2), Rule V, Book I, IRR)
agent and foreign principal does not affect the
liability of the foreign principal. The obligations In applying for a license to operate a private
covenanted in the recruitment agreement entered employment agency for overseas recruitment and
into by and between the local agent and its foreign placement, an applicant is required to submit a
principal are not coterminous with the term of such verified undertaking. In that document, the agency
agreement so that if either or both of the parties assumed all responsibilities for the proper use of its
decide to end the agreement, the responsibilities of license and the proper implementation of the
such parties towards the contracted employees employment contracts with the workers it recruited
2024 GOLDEN NOTES
and deployed for overseas employment. (Royal Exporter and Promotion v. Sps. Cuaresma, G.R. Nos.
Crown Internationale v. NLRC, G.R. No. 78085, 16 Oct. 182978-79 & 184298-99, 07 Apr. 2009)
1989)
Liability of the Foreign Employer
XPN: Where the workers themselves insisted for the
recruitment agency to send them back to their A foreign corporation which, though unlicensed
foreign employer despite their knowledge of its agents, recruits workers in the country, may be sued
inability to pay their wages, the agency is absolved in and found liable by Philippine courts (e.g., direct
from liability. (Feagle Construction Corp. v. Gayda, hiring by a foreign firm without participation of
G.R. No. 82310, 18 June 1990) POEA). (Azucena, 2016)
Q: Santosa Datuman was deployed to Bahrain Theory of Imputed Knowledge

after paying the required placement fee.
However, her Er took her passport and instead of A rule in insurance law that any information
working as a saleslady, she was forced to work as material to the transaction, either possessed by the
a domestic helper contrary to the agreed salary agent at the time of the transaction or acquired by
approved by POEA. She worked without him before its completion, is deemed to be the
compensation for two years because of her Ers’ knowledge of the principal, at least so far as the
continued failure and refusal to pay her salary transaction is concerned, even though in fact, the
despite demand. When she finally returned to knowledge is not communicated to the principal at
the Philippines, she filed a complaint against the all. (Leonor v. Filipinas Compania, 48 O.G. 243, 10 Jan.
local agency that recruited her. Should the suit 1950; Rovels Enterprises, Inc. v. Ocampo, G.R. No.
prosper? 136821, 17 Oct. 2002)
The Theory of Imputed Knowledge teaches that the
A: YES. Under Sec. 1(f), Rule II, Book II of the 1991 knowledge of the agent is knowledge of the
POEA Rules and Regulations, the local agency shall principal, employer, not the other way around.
assume joint and solidary liability with the There being no substantial proof that the previous
employer for all claims and liabilities which may agent knew of and consented to be bound under the
arise in connection with the implementation of the employment contract extension, it cannot be said to
contract, including but not limited to payment of be privy thereto. (Sunace International
wages, health and disability compensation, and Management Services, Inc. v. NLRC, et al., G.R. No.
repatriation. Private employment agencies are held 161757, 25 Jan. 2006)
jointly and severally liable with the foreign-based
employer for any violation of the recruitment Q: Sunace International Management Services
agreement or contract of employment, to assure the (Sunace), deployed to Taiwan Montehermozo as
aggrieved worker of immediate and sufficient a domestic helper under a 12-month contract
payment of what is due him. This is in line with the effective 01 Feb. 1997. The deployment was with
policy of the state to protect and alleviate the plight the assistance of a Taiwanese broker, Edmund
of the working class. (Datuman v. First Cosmopolitan Wang, President of Jet Crown International Co.,
Manpower, G.R. No. 156029, 14 Nov. 2008) Ltd. After her 12-month contract expired on 01
Feb. 1998, Montehermozo continued working
Liability if the Recruitment Agency is a Juridical for her Taiwanese Er for two more years, after
Being which she returned to the Philippines on 04 Feb.
2000.
If the recruitment or placement agency is a juridical
being, the corporate officers, directors or partners Shortly after her return she filed a complaint
as the case may be, shall themselves be jointly and before the NLRC against Sunace, one Perez, the
solidarily liable with the corporation or partnership Taiwanese broker, and the Er-foreign principal
for the claims and damages. (Becmen Service alleging that she was jailed for three months and
that she was underpaid. Should Sunace be held
2024 GOLDEN NOTES
liable for the underpayment for the additional unsafe living conditions with crowded and
two years that she worked for her Taiwanese Er poorly ventilated quarters, leading to frequent
under the theory of imputed knowledge? illnesses and the spread of communicable
diseases. Noteworthy is that the workers were
A: NO. The Theory of Imputed Knowledge ascribes compelled to work overtime without receiving
the knowledge of the agent, Sunace, to the principal compensation.
Taiwanese Er, not the other way around. The
knowledge of the principal-foreign Er cannot, Subsequently, they discovered that they only had
therefore, be imputed to its agent Sunace. There tourist visas, and that TKC was hiding them from
being no substantial proof that Sunace knew of and the authorities because they did not have work
consented to be bound under the two-year permits. They reported their living and working
employment contract extension, it cannot be said to conditions to their broker, but their grievances
be privy thereto. As such, it and its owner cannot be were unheeded. Hence, Calma sent an email to
held solidarily liable for and of Montehermozo’s the editorial of the Manila Sumbungan Daily in
claims arising from the two-year employment asking for assistance. Later on, the TKC's human
extension. (Sunace International Management relations officer summoned them and
Services, Inc. v. NLRC, G.R. No. 161757, 25 Jan. 2006) questioned them about the email sent to the
Manila Sumbungan Daily. As a result of such
h. TERMINATION OF CONTRACT OF MIGRANT events, their supervisor informed them that
WORKERS they were terminated and being processed for
(Sec. 10, R.A. No. 8042, as amended by R.A. repatriation. With that said, XYZ Corp assured
10022) them that they would be sent home, however
they were only sent home after two months
Governing Law while their food supply was cut-off.
R.A. No. 8042, as amended by R.A. No. 10022 This prompted Klee et al. to file a complaint for
governs the money claims of OFWs, not the Labor illegal dismissal and money claims against XYZ
Code. Corp. and Johnny Juan, as administrators. As the
case reached the Labor Arbiter (LA), its decision
Jurisdiction found that the Klee et al. were constructively
dismissed due to the unbearable and
It is the LA or the NLRC which has jurisdiction over unfavorable working conditions set by the
illegal dismissal or money claims cases of OFWs. employer.
Reliefs such as reinstatement with full backwages or However, records show that before the filing of
separation pay are not applicable to OFWs because the complaint with the LA, a complaint with
of the contractual nature of their employment. Philippine Overseas Employment
Administration (POEA) was filed by Klee et al.,
An OFW may, however, claim placement fee, salaries against XYZ Corp. having the same set of facts
he would have earned had he not been illegally that was filed in the LA. The POEA complaint was
dismissed, moral and exemplary damages, and dismissed, and the dismissal was affirmed by the
attorney’s fees. Department of Labor and Employment (DOLE)
upon appeal.
Q: XYZ Corp. (XYZ) hired Skus T. Klee (Klee),
Baby K. Calma (Calma), and Ree Zal D. Park With the simultaneous filing of cases by the
(Park), as construction workers for three years petitioners, will such an act cause a conflict of
in Pontianak, Indonesia for its principal, The jurisdiction between the LA and POEA?
Kween Construction (TKC). Upon arrival in
Indonesia, the workers' passports were
confiscated by a broker, and they were housed in
2024 GOLDEN NOTES
A: NO. There is no conflict between the jurisdiction Q: Terry was a seafarer engaged by ABC Corp. for
of the LA and POEA in trying, hearing, and deciding and in behalf of its foreign principal, DEF Corp.
the case brought by Klee et al. as an Able Seaman on board the vessel MV Geest
Trader for a contract period of 10 months. Terry
The Migrant Workers and Overseas Filipinos Act of later on felt severe abdominal pain, backache,
1995, as amended by Republic Act (RA) No. 10022, chest pain and coughs. Due to the absence of
provides that the LA shall have original and medical facilities at the port clinic, he did not
exclusive jurisdiction to hear and decide the claims receive the proper medical assistance and did
arising out of an employer-employee relationship or not undergo any laboratory test. He was then
by virtue of any law or contract involving Filipino repatriated to the Philippines due to his medical
workers for overseas deployment including claims condition. Terry was referred to the company-
for actual, moral, exemplary, and other forms of designated physician and company specialists
damage. On the other hand, Rule X of the and was advised to return for further treatment.
Implementing Rules and Regulations of RA No. However, Terry went home to Aklan and was
10022 provides that the POEA exercises confined twice in a clinic and was diagnosed
administrative jurisdiction arising out of violations with functional dyspepsia and then with
of rules and regulations and administrative pancreatic cancer. After his discharge, Terry was
disciplinary jurisdiction over employers, principals, bedridden at home until his death in April 2013.
contracting partners, and overseas Filipino workers. His death certificate indicated that he died due
The jurisdiction of these administrative bodies does to cardio-respiratory failure with filed a
not in any way intersect as to warrant the complaint for death benefits, payment for burial
application of the doctrine of primary jurisdiction. expenses, reimbursement of medical expenses,
In the case at bar, while Klee et al. alleged the same airfare expense, damages and attorney's fees,
set of facts and the same affidavits were submitted against DEF Corp. on the ground that the cause
before the LA and the POEA, the complaints raised of his death, pancreatic cancer, is a work-related
different causes of action. The LA complaint illness. Is the death of Terry compensable?
involved the issue of illegal dismissal and various
money claims, while the POEA complaint involved A: NO. To be entitled to benefits under Sec. 20-A, the
administrative disciplinary liability for violation of seafarer must show that (1) he suffered an illness;
the 2002 POEA Rules and Regulations Governing the (2) during the term of his or her employment
Recruitment and Employment of Land Based contract; (3) he or she complied with the
Overseas Workers. Thus, the doctrine of primary procedures prescribed under Sec. 20-A of the
jurisdiction does not apply. Moreover, a review of applicable POEA-SEC; (4) his or her illness is one of
the respective jurisdictions of the POEA and the LA the enumerated occupational diseases or that his
reveals that these administrative bodies do not have illness or injury is otherwise work-related; and (5)
concurrent jurisdiction. (U.R Employed International he or she complied with the four conditions
Corporation and Pamela T. Miguel v. Mike A. Pinmiliw, enumerated under Sec. 32-A of the POEA-SEC for an
Murphy P. Pacya, Simon M. Bastog, G.R. No. 225263, occupational disease or a disputably-presumed
16 Mar. 2022, as penned by J. M.V. Lopez) work-related disease to be compensable: 1) The
seafarer's work must involve the risks described
Entitlement to Salary for the Unexpired Portion herein; 2) The disease was contracted as a result of
the seafarer's exposure to the described risks; 3)
In case of termination of overseas employment The disease was contracted within a period of
without just, valid, or authorized cause as defined by exposure and under such other factors necessary to
law or contract, the worker shall be entitled to all his contract it; and 4) There was no notorious
salaries for the entire unexpired portion of the negligence on the part of the seafarer.
employment contract regardless of the duration of
his employment. In this case, the heirs established that Terry suffered
an illness during the term of his employment
contract. However, he failed to comply with the
2024 GOLDEN NOTES
procedures prescribed under the POEA-SEC, However, Sec. 7 of RA 10022 amended Sec. 10 of the
particularly Sec. 20-B(2), which requires the Migrant Workers Act, and once again reiterated the
seafarer must submit himself to a post-employment provision as above quoted. Nonetheless, the Court in
medical examination within three days upon his the en banc case of Sameer Overseas Placement
return. Agency, Inc. v. Joy C. Cabiles still declared such as
unconstitutional despite its replication. (G.R. No.
Pancreatic cancer is not an occupational disease. 170139, 05 Aug. 2014)
Case law has held that for a disease not included in
the list of compensable diseases to be compensable, Q: Serrano, a seafarer, was hired by Gallant
the seafarer still has to establish, by substantial Maritime and Marlow Navigation Co. for 12
evidence that his illness is or was work-related. months as Chief Officer. On the date of his
Terry’s pancreatic cancer is not work-related and departure, he was constrained to accept a
therefore, not compensable because he or his heirs downgraded employment contract for the
failed to prove, by substantial evidence, its work- position of Second Officer, upon the assurance
relatedness, and his compliance with the that he would be made Chief Officer after a
parameters that the law has set out with regard to month. It was not done; hence, he refused to stay
claims for disability and death benefits. (Marlow on as Second Officer and was repatriated to the
Navigation Phils. V. Heirs of Antonio Beato, G.R. No. Phils. He had served only 2 months & 7 days of
233897, 09 Mar. 2022) his contract, leaving an unexpired portion of 9
months & 23 days.
NOTE: An OFW, having been illegally dismissed, is
entitled to her salary for the unexpired portion of Serrano filed with the LA a Complaint against
the employment contract. (Sameer Overseas Gallant Maritime and Marlow for constructive
Placement v. Cabilles GR 170139, 05 Aug. 2014) dismissal and for payment of his money claims.
The LA rendered a favorable decision to Serrano
Relief of a Worker When Terminated Without awarding him $8,770.00, representing his salary
Valid Cause for 3 months of the unexpired portion of his
contract of employment applying R.A. No. 8042,
1. Full reimbursement of his placement fee with Sec 10(5):
12% interest per annum; and
Money Claims. - In case of termination of
2. Salaries for the unexpired portion of his overseas employment without just, valid
employment contract. (R.A. No. 8042, as or authorized cause as defined by law or
amended by R.A. No. 10022) contract, the workers shall be entitled to
the full reimbursement of his placement
NOTE: The three-month option is declared fee with interest of 12% per annum, plus
unconstitutional for violating the equal protection his salaries for the unexpired portion of his
clause and the substantive due process rule in the employment contract or for 3 months for
Constitution. (Serrano v. Gallant Maritime Services every year of the unexpired term,
Inc. and Marlow Navigation Company, Inc., G.R. No. whichever is less.
167614, 24 Mar. 2009)
Is the subject clause constitutional?
This shall be given retroactive effect, because an
unconstitutional clause in the law confers no rights, A: NO. The subject clause contains a “suspect
imposes no duties, and affords no protection. The classification” in that, in the computation of the
unconstitutional provision is inoperative, as if it monetary benefits of fixed-term Ees who are
were not passed into law at all. (Skippers United illegally discharged, it imposes a three-month cap
Pacific, Inc. v. Doza, G.R. No. 175558, 08 Feb. 2012) on the claim of OFWs with an unexpired portion of
one year or more in their contracts, but none on the
claims of other OFWs or local workers with fixed-
2024 GOLDEN NOTES
term employment. The subject clause singles out placement fees, the amount shall be subject to a
one classification of OFWs and burdens it with a 12% interest per annum. This implied stipulation
peculiar disadvantage. The clause is a violation of has the effect of removing awards for
the right of Serrano to equal protection and right to reimbursement of placement fees from Circular No.
substantive due process, for it deprives him of 799’s coverage.
property, consisting of monetary benefits, without
any existing valid governmental purpose. However, if judgment did not become final and
executory before 01 July 2013 and there was no
Thus, Serrano is entitled to his salaries for the entire stipulation in the contract providing for a different
unexpired period of nine months and 23 days of his interest rate, other money claims under Sec. 10 of
employment contract, pursuant to law and R.A. No. 8042 shall be subject to the six percent (6%)
jurisprudence prior to the enactment of R.A. No. interest per annum in accordance with Circular No.
8042. (Serrano v. Gallant Maritime Services & 799. (Sameer Overseas Placement Agency v. Cabiles,
Marlow Navigation Co., Inc., G.R. No. 167614, 24 Mar. G.R. No. 170139, 05 Aug. 2014)
2009)
Q: Joy was deployed to work for Taiwan Wacoal,

B. EMPLOYMENT OF NON-RESIDENT ALIENS
Co. Ltd. on 26 June 1997 for 1 year. She alleged (Arts. 40-42, LC; Secs. 1-3 and 12-14, as amended
that Sameer Overseas Agency required her to by DOLE D.O. No. 221-21; Secs. 1-3 and 7-8, DOLE
pay a placement fee of P70,000.00. On 14 July D.O. No. 205-19)
1997, Mr. Huwang of Wacoal informed Joy,
without prior notice, that she was terminated
and was given a salary from 26 June to 14 July Employment Permit of Non-resident Aliens
1997 only.
Any alien seeking admission to the Philippines for
Joy filed a complaint for illegal dismissal with employment purposes and any domestic or foreign
the NLRC. She asked for the return of her employer who desires to engage an alien for
placement fee, the withheld amount for employment in the Philippines shall obtain an
repatriation costs, payment of her salary for 23 employment permit from DOLE.
months as well as moral and exemplary
damages. An employment permit may be issued to:
1. A non-resident alien; or
The NLRC ruled that Joy was illegally dismissed
and awarded her three months’ worth of salary, 2. The applicant employer, after a determination
the reimbursement of the cost of her of the non-availability of a person in the
repatriation, and attorney’s fees. Should Joy be Philippines who is competent and able and
awarded three months’ worth of salary and willing at the time of application to perform the
reimbursement of the cost of her repatriation? services for which the alien is desired. (Art. 40,
LC)
A: NO. Joy is entitled to her salary for the unexpired
portion of her contract, in accordance with Sec. 10 NOTE: For an enterprise registered in preferred
of R.A. No. 8042. Since she started working on 26 areas of investments, said permit may be issued
June 1997 and was terminated from employment on upon recommendation of the government agency
14 July 1997, Joy is entitled to her salary from 15 charged with the supervision of said registered
July 1997 to 25 June 1998. enterprise. (Ibid.)
Furthermore, there is an implied stipulation in

contracts between the placement agency and the
overseas worker that in case the overseas worker is
adjudged as entitled to reimbursement of his or her
2024 GOLDEN NOTES
Prohibition and Penal Sanctions the Codified Visa Rules and Regulations of 2002
of the DFA;
After the issuance of employment permit, the alien
shall not transfer to another job or change his or her 2. Foreign nationals exempted under Sec. 7 of the
employer without prior approval of the SOLE. JMC No. 001, series of 2019; and
Any non-resident alien who shall take up 3. Foreign nationals required to secure AEP. (Sec.
employment in violation of the Art. 41 of the LC and 3, DOLE D.O. No. 2015-19)
its IRRs shall be punished in accordance with the
provision of Arts. 289 and 290 of the LC. In addition, The Alien Employment Permit (AEP)
the alien worker shall be subject to deportation
after service of his sentence. (Art. 41, LC) It is not an exclusive authority for a foreign national
to work in the Philippines. It is just one of the
Submission of List requirements in the issuance of a work visa to
legally engage in gainful employment in the country.
Any employer employing non-resident foreign The foreign national must obtain the required
nationals on the effective date of this Code shall Special Temporary Permit (STP) from the
submit a list of such nationals to the Secretary of Professional Regulation Commission (PRC) in case
Labor within thirty (30) days after such date the employment involves practice of profession and
indicating their names, citizenship, foreign and local Authority to Employ Alien from the DOJ where the
addresses, nature of employment and status of stay employment is in a nationalized or partially
in the country. The Secretary of Labor shall then nationalized industry and Department of
determine if they are entitled to an employment Environment and Natural Resources (DENR) in case
permit. (Sec. 42, LC) of mining. (DOLE D.O. No. 186-17)
Certificate of No Objection (CNO) Persons Required to Obtain Alien Employment

Permit
The following categories of foreign nationals shall
secure CNO from DOLE before they are issued with GR: All foreign nationals who intend to engage in
work-related visas, permits and authorities by gainful employment in the Philippine shall apply for
concerned agencies: Alien Employment Permit (AEP). (Sec. 1, DOLE D.O.
No. 186-17)
1. Personnel, participants, trainees, professors,
technicians, and fellows entitled to 47(a)(2) NOTE: Gainful employment shall refer to a state or
visa under certain entities and programs of the condition that creates an Er-Ee relationship
Codified Visa Rules and Regulations of 2002 of between the Philippine-based employer and the
the DFA. foreign national where the former has the power to
hire or dismiss the foreign national from
2. Foreign nationals employed and/or seconded in employment, pays the salaries or wages thereof and
a foreign enterprise that has existing has authority to control the performance or conduct
agreement, understanding or document of of the tasks and duties. (Ibid.)
similar nature with the Philippine government
agency/ies. (Sec. 2, DOLE D.O. No. 205-19) XPNs: The following categories of foreign nationals
are exempt from securing an employment permit:
Persons Exempted from Securing CNO from
DOLE 1. All members of the diplomatic service and
foreign government officials accredited by and
1. Scholars, students, volunteers and personnel of with reciprocity arrangement with the
International Organizations entitled to 47 (a) Philippine government;
(2) visa under certain entities and programs of
2024 GOLDEN NOTES
2. Officers and staff of international organizations 3. Those providing consultancy services who do
of which the Philippine government is a not have Ers in the Philippines;
member, and their legitimate spouses desiring
to work in the Philippines; 4. Intra-corporate transferee who is a manager,
executive or specialist as defined below in
3. Owners and representatives of foreign accordance wih Trade Agreements and an
principals whose companies are accredited by employee of the foreign service supplier for at
the POEA, who come to the Philippines for a least (1) year continuous employment prior to
limited period and solely for the purpose of deployment to a branch, subsidiary, affiliate or
interviewing Filipino applicants for representative office in the Philipppines:
employment abroad;
a. Executive - a natural person within the
4. Foreign nationals who come to the Philippines organisation who primarily directs the
to teach, present and/or conduct research management of the organisation and
studies in universities and colleges as visiting, exercises wide latitude in decision making
exchange or adjunct professors under formal and receives only general supervision or
agreements between the universities and direction from higher level executives, the
colleges in the Philippines and foreign board of directors, or stockholders of the
universities or colleges; or between the business; an executive would not directly
Philippine government and foreign perform tasks related to the actual
government, provided that the exemption is on provision of the service or services of the
a reciprocal basis; organisation;
5. Permanent resident foreign nationals and b. Manager - a natural person within the
probationary or temporary resident visa organisation who primarily directs the
holders under Sec. 13(a-f) of the Philippine organization or department or subdivision
Immigration Act of 1940 (C.A. 613) and Sec. 3 of and exercises supervisory and control
the Alien Social Integration Act of 1995 (R.A. No. functions over other supervisory,
7919); managerial or professional staff; does not
include first line supervisors unless
6. Refugees and stateless persons recognized by employees supervised are professionals;
the Department of Justice (DOJ) pursuant to Art. does not include employees who primarily
17 of the UN Convention and Protocol Relating perform tasks necessary for the provision
to status of Refugees and Stateless Persons; and of the service; or
7. All foreign nationals granted exemption by law. c. Specialist - a natural person within the
(Sec. 2, DOLE D.O. No. 186-17) organisation who possesses knowledge at
an advanced level of expertise essential to
Persons Excluded from Securing an AEP the establishment or provision of the
service and/or possesses proprietary
The following are excluded from securing an AEP: knowledge of the organisation's service,
research equipment, techniques or
1. Members of the governing board with voting management; may include, but is not
rights only and do not intervene in the limited to, members of a licensed
management of the corporation or in the day to profession.
day operation of the enterprise;
NOTE: All other intra-corporate transferees not
2. President and treasurer, who are part-owner of within these categories as defined above are
the company; required to secure an AEP prior to their
employment in the Philippines.
2024 GOLDEN NOTES
Procedure in the Processing of Applications for
5. Contractual service supplier who is a manager, AEP
executive or specialist and an Ee of a foreign
service supplier which has no commercial 1. All applications for AEP shall be filed and
presence in the Philippines; and processed at the DOLE Regional Office or Field
Office having jurisdiction over the intended
a. One who enters the Philippines temporarily place of work.
to supply a service pursuant to a contract
between his/her employer and a service 2. In the case of foreign nationals to be assigned in
consumer in the Philippines; related companies, applications may be filed in
the Regional Office or Field Office having
b. must possess the appropriate educational jurisdiction over any of the applicant's intended
and professional qualifications; and places of work.
c. must be employed by the foreign service 3. Additional position of the foreign national in the
supplier for at least one (1) year prior to the same company or subsequent assignment in
supply of service in the Philippines. related companies during the validity or
renewal of the AEP will be subject for
6. Representative of the Foreign Principal/Er publication requirement. A change of position
assigned in the Office of Licensed Manning or Er shall require an application for new AEP.
Agency (OLMA) in accordance with the POEA
law, rules and regulations. (Sec. 3, DOLE D.O. No. 4. At any given time, only one AEP shall be issued
186-17) to a foreign national. (Sec. 5, D.O. 186-17)
NOTE: All foreign nationals excluded from securing Documentary Requirements

AEP shall secure a Certificate of Exclusion from the
Regional Office. (Sec. 4, DOLE D.O. No. 186-17) A duly accomplished application form with the
following complete documentary requirements
Validity of AEP must be submitted:
GR: The AEP shall be valid for the position and the 1. Photocopy of Passport with valid visa, except
company for which it was issued for a period of one for temporary visitor's visa in case of renewal
(1) year. or Certificate of Recognition for Refugees or
Stateless Persons;
XPN: The employment contract, or other modes of
engagement provide otherwise, which in no case 2. Original copy of notarized appointment or
shall exceed three (3) years. (Sec. 10, D.O. 186-17) contract of Employment enumerating the
duties and responsibilities, annual salary, and
Renewal of AEP other benefits of the foreign national;
An application for renewal of AEP shall be filed not 3. Photocopy of Mayor's Permit to operate
earlier than 60 days before its expiration. In case the business, in case of locators in economic zones,
foreign national needs to leave the country or in Certification from the PEZA or the Ecozone
other similar circumstances that will hinder the Authority that the company is located and
filing of renewal within this prescribed period, the operating within the ecozone, while in case of a
application may be filed earlier. (Sec. 11, D.O. 186- construction company, photocopy of license
17) from PCAB or D.O. 174-17 Registration should
be submitted in lieu of Mayor's Permit; and
2024 GOLDEN NOTES
4. Business Name Registration and Application Objection
Form with DTI or SEC Registration and GIS;
Any objection or information against the
5. If the position title of the foreign national is employment of the foreign national relative to labor
included in the list of regulated professions, a market test must be filed with the Regional Office
Special Temporary Permit (STP) from the PRC; within thirty (30) days after publication.
and
The DOLE Regional Office shall refer to the DOLE's
6. If the Er is covered by the Anti-Dummy Law, an Philjobnet and PESO Employment Information
Authority to Employ Foreign National (ATEFN) System (PEIS), the PRC Registry of Professionals,
from the DOJ or from the DENR in case of and the Technical Education and Skills
mining. Development Authority (TESDA) Registry of
Certified Workers to establish availability or non
Processing Periods availability of able and qualified Filipino worker.
1. Applications for new AEP - within three Grounds for Denial of Application for New or
(3) working days after publication and Renewal of AEP
payment of required fees and fines, if there
are any. An application for AEP or the renewal thereof may
be denied by the Regional Director (RD) based on
2. Applications for renewal of AEP – within any of the following grounds:
one (1) day after receipt. (Sec. 8, D.O. 186-
17) 1. Misrepresentation of facts in the application
including fraudulent misrepresentation (i.e.,
Publication Requirement false statement that has a negative effect in the
evaluation of the application made knowingly,
The DOLE Regional Office shall publish in a or without belief in its truth, or recklessly
newspaper of general circulation all applications for whether it is true or false);
new AEPs, change or additional position in the same
company, or subsequent assignment in related 2. Submission of falsified documents;
companies within two (2) working days from
receipt of application. 3. Conviction to a criminal offense or a fugitive
from justice in the country or abroad;
The same shall be published on the DOLE website
and posted in the PESO. Such publication and 4. Grave misconduct in dealing with or ill
posting shall be for a period of thirty (30) days and treatment of workers;
shall contain the name, position, Er and address, a
brief description of the functions to be performed by 5. Availability of a Filipino who is competent, able
the foreign national, qualifications, monthly salary and willing to do the job intended for or being
range, and other benefits, if there are any. performed by the foreign national based on
data in the PEIS, PRC Registry of Professional
It shall also indicate in the same notice of and TESDA Registry of Certified Workers;
publication that any person in the Philippines who
is competent, able and willing at the time of 6. Worked without valid AEP for more than a year;
application to perform the services for which the or
foreign national is desired may file an objection at
the DOLE Regional Office. (Sec. 7, D.O. 186-17) 7. Application for renewal with an expired visa or
with a temporary visitor's visa. (Sec. 12, DOLE
D.O. No. 186-17)
2024 GOLDEN NOTES
NOTE: The RD shall issue an Order denying the A foreign national whose AEP has been denied or
application for new or renewal of AEP which shall cancelled due to misrepresentation of facts or
have the effect of forfeiture of the fees paid by the submission of falsified documents with the intent to
applicant. deceive, conceal or omit to state material facts and,
by reason of such omission or concealment, the
Grounds for Cancellation or Revocation of AEP Department was prompted to approve/issue the
AEP that would not otherwise have been
1. Non-compliance with any of the requirements approved/issued, shall be disqualified to reapply
or conditions for which the AEP was issued; within a period of five (5) years. (Sec. 14, D.O. 186-
17)
2. Misrepresentation of facts in the application
including fraudulent misrepresentation (i.e., Er’s or foreign national's representatives, and/or
false statement that has a negative effect in the agents acting in behalf of the applicant found to have
evaluation of the application made knowingly, filed fraudulent application for AEP for three (3)
or without belief in its truth, or recklessly counts shall be barred from filing application for a
whether it is true or false); period of five (5) years after due process. (Sec. 15,
D.O. 186-17)
3. Submission of falsified or tampered documents;
Appeal
4. Meritorious objection or information against
the employment of the foreign national; The aggrieved foreign national or his authorized
representative may file an appeal with the SOLE
5. Foreign national has been convicted of a within ten (10) days after receipt of the copy of
criminal offense or a fugitive from justice; denial/cancellation/revocation order.
6. Er terminated the employment of foreign The decision of the SOLE shall be final and executory
national; and unless a motion for reconsideration is filed within
ten (10) days after receipt of the decision. No second
7. Grave misconduct in dealing with or ill motion for reconsideration shall be allowed. (Sec.
treatment of workers. (Sec. 13, DOLE D.O. No. 16, DOLE D.O. No. 186-17)
186-17)
Q: The DOLE issued an alien employment permit
NOTE: In such cases, the RD shall issue an Order for Earl Cone, a U.S. citizen, as sports consultant
cancelling or revoking the AEP. and assistant coach for GMC. Later, the Board of
Special Inquiry of the Commission on
Q: What is the effect of denial, cancellation, or Immigration and Deportation approved Cone’s
revocation of AEP? application for a change of admission status
from temporary visitor to pre-arranged Ee. A
A: A foreign national whose AEP has been denied or month later, GMC requested that it be allowed to
cancelled is disqualified to reapply within a period employ Cone as full-fledged coach. The DOLE
of ten (10) years in case the grounds for denial or Regional Director granted the request.
cancellation is any of the following:
The Basketball Association of the Phils.
a. Conviction of criminal offense or fugitive appealed the issuance of said permit to the SOLE
from justice in the country or abroad; or who cancelled Cone’s employment permit
because GMC failed to show that there is no
b. Grave misconduct in dealing with or ill person in the Philippines who is competent and
treatment of workers. willing to do the services nor that the hiring of
Cone would redound to the national interest. Is
the act of the SOLE valid?
2024 GOLDEN NOTES
A: YES. GMC’s claim that hiring a foreign coach is an

Er’s prerogative has no legal basis. Under Art. 40 of
the LC, an Er seeking employment of an alien must
first obtain an employment permit from the DOLE.
GMC’s right to choose who to employ is limited by
the statutory requirement of an employment
permit. (GMC v. Torres, G.R. No. 93666, 22 Apr. 1991)
2024 GOLDEN NOTES
NOTE: A self-employed person shall be both an Ee
III. EMPLOYER-EMPLOYEE RELATIONSHIP and Er at the same time.
Existence of an Employment Relationship
Employment relationship is determined by law and

A. EMPLOYER-EMPLOYEE RELATIONSHIP not by contract. (Insular Life Assurance Co. Ltd. v.
NLRC, G.R. No. 119930, 12 Mar. 1998)
Employer NOTE: Taxi or jeepney drivers under the “boundary”

system are Ees of the taxi or jeepney
Any person, natural or juridical, domestic, or owners/operators, as well as passenger bus drivers
foreign, who carries on in the Philippines any trade, and conductors are Ees. (Jardin v. NLRC and
business, industry, undertaking or activity of any Goodman Taxi, G.R. No. 119268, Feb. 23, 2000)
kind and uses the services of another person, who is
under his orders as regards the employment, except Er-Ee Relation as a Question of Law (Stipulation
the Government and any of its political subdivisions, that No Er-Ee Relationship Exists)
branches or instrumentalities, including GOCCs.
The existence of an Er-Ees relation is a question of
The Er may be a natural or juridical person. It may law and being such, it cannot be made the subject of
be a single proprietor, a partnership or a agreement. (Tabas v. California Manufacturing Co.,
corporation. Inc., G.R. No. 80680, 26 Jan. 1989)
Er includes any person acting in the interest of an Er, It is axiomatic that the existence of an Er-Ee
directly or indirectly. The term shall not include any relationship cannot be negated by expressly
labor organization or any of its officers or agents repudiating it in the management contract and
except when acting as Er. (Art. 219(e), LC) providing therein that the Ee is an independent
contractor when the terms of the agreement clearly
Employee show otherwise. For, the employment status of a
person is defined and prescribed by law and not by
Any person who performs services for an Er in what the parties say it should be. In determining the
which either or both mental and physical efforts are status of the management contract, the Four-Fold
used and who receives compensation for such Test on employment has to be applied. (Insular Life
services, where there is an Er-Ee relationship. (R.A. Assurance Co. Ltd. v. NLRC, G.R. No. 119930, 12 Mar.
No. 8282, Social Security Law) 1998)
Only a natural person can qualify as an Ee. Natural Er-Ee Relation as a Question of Fact
persons may include Filipino citizens and
foreigners. The existence of an Er-Ee relationship depends
upon the facts of each case. (Social Security System v.
Ee includes any person in the employ of an Er. The CA, G.R. No. 100388, 14 Dec. 2000)
term shall not be limited to the Ees of a particular Er,
unless the Code so explicitly states. It shall include Q: Romel is working as a pianist in the
any individual whose work has ceased as a result of restaurant of a hotel for almost 7 years. During
or in connection with any current labor dispute or his employment, he was given a time for his
because of any unfair labor practice if he has not performance fixed at 7-10pm for 3-6x a week;
obtained any other substantially equivalent and the manager requires him to conform with the
regular employment. (Art. 219(f), LC) venue’s motif and is subjected to the rules and
regulations of the Ees of the hotel. His salary was
given every night. His services were terminated
as a cost-cutting measure. He filed for illegal Nevertheless, Baron filed a Third-Party
dismissal. As a defense, the hotel management Complaint against ASIA.
alleged that there can be no illegal dismissal as
Er-Ee relationship is absent. Is the defense of the Is there an Er-Ee relationship between the
hotel tenable? Baron, on one hand, and the ASIA security
guards, on the other hand? Explain briefly. (1999
A: NO. Romel is an Ee of the hotel. The issue of BAR)
whether or not an Er-Ee relationship existed
between petitioner and respondent is essentially a A: YES. As a general rule, the security guards of a
question of fact. The factors that determine the issue private security guard agency are the Ees of the
include who has the power to select the Ee, who latter and not of the establishment that has entered
pays the Ee’s wages, who has the power to dismiss into a contract with the private security guard
the Ee, and who exercises control of the methods agency for security services. But under the facts in
and results by which the work of the Ee is the question, Baron Hotel appears to have hired the
accomplished. (Legend Hotel v. Realuyo, G.R. No. security guards, paid their wages, had the power to
153511, 18 July 2012) promote, suspend or dismiss the security guards
and the power of control over them. In other words,
Q: ASIA executed a one (1)-year contract with the the security guards were under orders of Baron
Baron Hotel for the former to provide the latter Hotel as regard to their employment. Thus, Baron
with 20 security guards to safeguard the persons Hotel is the Er of the security guards.
and belongings of hotel guests, among others.
The security guards filled up Baron application Q: Assuming that ASIA is the Er, is the act of ASIA
form and submitted the executed forms directly in placing the security guards on "floating
to the Security Department of Baron. The pay status" lawful? Why?
slips of the security guards bore Baron's logo
and showed that Baron deducted the amounts A: YES. It is lawful for a private security guard
for SSS premiums, medicare contributions and agency to place its security guard on a "floating
withholding taxes from the wages of the security status" if it has no assignment to give to said security
guards. The assignments of security guards, who guards. But if the security guards are placed on a
should be on duty or on call, promotions, "floating status" for more than six (6) months, the
suspensions, dismissals and award citations for security guards may consider themselves as having
meritorious services were all done upon been dismissed.
approval by Baron's chief security officer. After
the expiration of the contract with ASIA, Baron Q: What property right is conferred upon an Ee
did not renew the same and instead executed once there is an Er-Ee relationship? Discuss
another contract for security services with briefly. (2006 BAR)
another agency. ASIA placed the affected
security guards on "floating status" on "no work A: Once an Er-Ee relationship is established, such
no pay" basis. employment is treated, under our constitutional
framework, as a property right. When a person has
Having been displaced from work, the ASIA no property, his job may possibly be his only
security guards filed a case against Baron for possession or means of livelihood and those of his
illegal dismissal, OT pay, minimum wage dependents. When a person loses his job, his
differentials, vacation leave and sick leave dependents suffer as well. The worker should,
benefits, and 13th month pay. Baron denied therefore, be protected and insulated against any
liability alleging that ASIA is the Er of the arbitrary deprivation of his job. (Philips
security guards and therefore, their complaint Semiconductors, Inc. v. Fadriquela, G.R. No. 141717,
for illegal dismissal and payment of money 14 Apr. 2004)
claims should be directed against ASIA.
2024 GOLDEN NOTES
1. TESTS TO DETERMINE EMPLOYER-
EMPLOYEE RELATIONSHIP The control test calls merely for the existence of the
(Sec. 3, Rule I-A, DOLE D.O. No. 147-15) right to control the manner of doing the work, not
the actual exercise of the right. (Zanotte Shoes v.
NLRC, G.R. No. 100665, 13 Feb. 1995)
Four-Fold Test (Select(a)-Wag-Dis-Co)
Kinds of Control Exercised by an Employer

Factors determining the existence of an Er-Ee
relationship:
Not every form of control will have the effect of
1. Selection and engagement of the Ee;
establishing an Er-Ee relationship. Thus, a line
2. Payment of Wages;
should be drawn between:
3. Power of Dismissal; and
4. Power of Control, or the Control Test.
a. Rules that merely serve as guidelines, which
(Azucena, 2016)
aims only to promote the result. In such case,
no Er-Ee relationship exists; and
NOTE: It is the so-called “control test” that is
the most important element. Absent the power
b. Rules that fix the methodology and bind or
to control the Ee with respect to the means and
restrict the party hired to the use of such
methods by which his work was to be
means or methods. These addresses both the
accomplished, there is no Er-Ee relationship
result and the means employed to achieve it
between the parties. (Continental Marble Corp.,
and hence, Er-Ee relationship exists. (Insular
et.al v. NLRC, G.R. No. 43825, 09 May 1988)
Life Assurance Co. v. NLRC, G.R. 84484, 15 Nov.
1989)
Control Test
The main determinant therefore is whether the

The control test assumes primacy in the overall
rules set by the Er are meant to control not just the
consideration. There is an Er-Ee relationship when
results but also the means and methods. (Orozco v.
the person for whom the services are performed
CA, G.R. 155207, 13 Aug. 2008)
reserves the right to control not only the end
achieved but also the manner and means used to
NOTE: However, in certain cases the control test is
achieve that end. (Television and Production
not sufficient to give a complete picture of the
Exponents, Inc. v. Servaña, G.R. No. 167648, 28 Jan.
relationship between the parties, owing to the
2008)
complexity of such a relationship where several
The power of control refers to the existence of
positions have been held by the worker. The better
power and not necessarily to the actual exercise
approach is to adopt the two-tiered test. (Francisco
thereof. It is not essential for the Er to actually
v. NLRC, G.R. No. 170087, 31 Aug. 2006)
supervise the performance of duties of the Ee; it is
enough that the Er has the right to wield that power.
Q: Peter started working as the caretaker of Uno
(Republic v. Asiapro Cooperative, G.R. No. 172,101, 23
Beach in 1993. Peter worked from 5 a.m. to 9
Nov. 2007)
p.m. every day and received a weekly allowance.
In 2001, Peter married Mariel. Later Peter work
Exclusivity of service, control of assignments and
in the fishpond business owned by the parents of
removal of agents under private respondents’ unit,
Owner. Peter and Mariel worked for Uno Beach
collection of premiums, furnishing of company
until July 2008 when they were notified that
facilities and materials as well as capital described
their services were no longer needed. Peter and
as Unit Development Fund are but hallmarks of the
Mariel filed a complaint for illegal dismissal,
management system where there can be no
underpayment of benefits, claim for damages,
escaping the conclusion that one is an Ee of the
and attorney's fees against Owner. However,
insurance company. (Insular Assurance Co., Ltd., v.
Owner claimed that Peter and Mariel were not
NLRC, G.R. No. 119930, 12 Mar. 1998)
employees but are industrial partners and thus,
2024 GOLDEN NOTES
there was no employer-employee relationship. engagement of the employee or the power to hire;
Are Peter and Mariel was illegally dismissed? (2) the payment of wages; (3) the power to dismiss;
and (4) the power to control the employee.
A: YES. Based on record, there is no proof that a
partnership existed between Peter or Mariel, and In the case at bar, it was not shown that the Ee's
Owner in relation to the beach resort. No directly received their premiums and salaries from
documentary evidence was submitted by Dos to E. In fact, Ee's did not submit their pay slips and
even suggest a partnership. The records also show related documents. The Ee's also admitted that it
that all the elements of an employer-employee was one of the employer who terminated their
relationship are present. Uno Beach engaged the services. There was no evidence that Ee wielded
services of Pedro as caretaker and Maricel as a such authority. Lastly, concerning the power of
storekeeper. While Owner did not personally engage control, there was no proof that E issued orders and
the services of Peter, he nonetheless retained his instructions to Simbajon, et al. or that he supervised
services. Owner paid their wages in the form of and monitored the proper performance of their
allowances and commissions. Finally, and most work.
importantly, Owner had the power to control their
conduct in the performance of their duties. The E further substantiated his claim that he was a mere
existence of control is manifestly shown by Owner lessor of the restaurant with Contracts of Lease and
express admission that he left the entire business Tax Returns showing his income solely on building
operation of the Resort to Peter and Mariel. rentals. He likewise presented the Certificate of
Registration of the Business Name, Mayor’s Permit,
While Peter and Mariel are to a large extent allowed and Certificate of Registration with the Bureau of
to carry out their respective duties as caretaker and Internal Revenue which were all issued in the other
storekeeper on their own, this does not negate the owner's name. These certifications were executed in
existence of control. It was Owner himself, who gave the performance of official duty of the government
Peter and Mariel immense flexibility in the agencies concerned and can be relied upon as
performance of their duties. This, alone, clearly evidence of the facts stated therein. Thus, they are
shows that Dos had control over the conduct of validly dismissed. (Salazar v. Simbajon, G.R. No.
Peter and Mariel in performing their duties. (Dusol 202374, 30 June 2021, as penned by J. M.V. Lopez)
v. Lazo G.R. No. 200555, 20 Jan 2021, as penned by J.
M.V. Lopez) Resident Physicians as Ees of Hospital
Q: Esperanza Restaurant employed A and the Under the "control test", an employment
other Ee's for various years. However, the relationship exists between a physician and a
management began harassing them after they hospital if the hospital controls both the means and
formed a union. Later, F one of the owner of the the details of the process by which the physician is
restaurant, informed the employees regarding to accomplish his task.
the last day of their employment as the business
was closing due to bankruptcy. However, E Where a person who works for another does so
denied employment relationship and claimed more or less at his own pleasure and is not subject
that F and G were the owners of Esperanza and to definite hours or conditions of work, and is
he was merely the lessor of the building where compensated according to the result of his efforts
the business operates. Among others, he and not the amount thereof, the element of control
presented contracts of lease as evidence. Was A is absent. (Calamba Medical Center, Inc. v. NLRC, et
and the other employees was validly dismissed? al., G.R. No. 176484, 25 Nov. 2008)
A: YES. In a case for Illegal Dismissal cannot prosper

absent an employment relationship between the
parties. Applying the four-fold test of employment
relationship, namely: (1) the selection and
2024 GOLDEN NOTES
XPNS: A resident physician is not an Ee of the Q: Genesis entered into a Career’s Agent
hospital if: Agreement with EmoLife Insurance Company, a
domestic corporation engaged in insurance
1. There is a training agreement between the business. The Agreement provides that the
doctor and hospital; and agent is an independent contractor and nothing
2. The training program is duly accredited by the therein shall be construed or interpreted as
DOH whose training program is also accredited creating an Er-Ee relationship. It further
by the PRC. provides that the agent must comply with three
requirements: (1) compliance with the
Q: Dr. Crisostomo entered into a retainer regulations and requirements of the company;
agreement with AB Hotel and Resort whereby he (2) maintenance of a level of knowledge of the
would provide medical services to the guests company's products that is satisfactory to the
and employees of AB Hotel and Resort, which, in company; and (3) compliance with a quota of
turn, would provide the clinic premises and new businesses. However, EmoLife insurance
medical supplies. He received a monthly company terminated Genesis’ services. Genesis
retainer fee of ₱60,000.00, plus a 70% share in filed an illegal dismissal complaint alleging
the service charges from AB Hotel and Resort's therein that an Er-Ee relationship exists and that
guests availing themselves of the clinic's he was illegally dismissed. Is he an Ee of the
services. The clinic employed nurses and allied Insurance Company?
staff, whose salaries, SSS contributions and
other benefits he undertook to pay. AB Hotel and A: NO. Genesis is not an Ee of EmoLife Insurance
Resort issued directives giving instructions to Company. Generally, the determinative element is
him on the replenishment of emergency kits and the control exercised over the one rendering the
forbidding the clinic staff from receiving cash service. The concept of “control” in LC has to be
payments from the guests. In time, the nurses compared and distinguished with “control” that
and the clinic staff claimed entitlement to rights must necessarily exist in a principal-agent
as regular employees of AB Hotel and Resort, but relationship. The Er controls the Ee both in the
the latter refused on the ground that Dr. results and in the means and manner of achieving
Crisostomo, who was their employer, was an this result. The principal in an agency relationship,
independent contractor. Rule, with reasons. e.g., insurance agent, on the other hand, also has the
(2017 BAR) prerogative to exercise control over the agent in
undertaking the assigned task based on the
A: I will rule in favor of AB Hotel and Resort. Dr. parameters outlined in the pertinent laws.
Crisostomo was an independent contractor and the
nurses and clinic staff are his employees. Dr. In the present case, the Agreement fully serves as
Crisostomo had the power of selection and grant of authority to Genesis as EmoLife’s insurance
engagement of the nurses and clinic staff; he also agent. This agreement is supplemented by the
paid their wages and SSS contributions. Most company’s agency practices and usages, duly
importantly, he exercises control over the nurses accepted by the agent in carrying out the agency.
and clinical staffs’ conduct in dispensing medical Foremost among these are the directives that the
services to the guests and personnel of the resort. principal may impose on the agent to complete the
The fact that AB Hotel and Resort gave instructions assigned tasks, to the extent that they do not involve
to Dr. Crisostomo regarding replenishment of the means and manner of undertaking these tasks.
emergency kits and forbidding his staff from
receiving cash payments from guests is of no The law likewise obligates the agent to render an
consequence. They are nothing more but guidelines account; in this sense, the principal may impose on
which will not create an employer-employee the agent specific instructions on how an account
relationship (Insular Life Co., Ltd. v. NLRC, G.R. No. shall be made, particularly on the matter of
84484, 15 Nov. 1989) expenses and reimbursements. To these extents,
control can be imposed through rules and
2024 GOLDEN NOTES
regulations without intruding into the labor law
concept of control for purposes of employment. 5. The amount of initiative, skill, judgment, or
(Gregorio Tongko v. ManuLife Insurance Company, foresight required for the success of the
G.R. No. 167622, 29 June 2010) claimed independent enterprise;
Economic Dependence (Two-Tiered Test) 6. The permanency and duration of the

relationship between the worker and Er; and
This two-tiered test provides us with a framework
of analysis, which would take into consideration the 7. The degree of dependency of the worker upon
totality of circumstances surrounding the true the Er for his continued employment in that
nature of the relationship between the parties. This line of business.
is especially appropriate in this case where there is
no written agreement or terms of reference to base Evidence of Employment
the relationship on and due to the complexity of the
relationship based on the various positions and No particular form of evidence (e.g., ID, Voucher, SSS
responsibilities given to the worker over the period Registration, Memorandum) is required to prove the
of the latter’s employment. (Francisco v. NLRC, G.R. existence of such relationship. Any competent and
No. 170087, 31 Aug. 2006) relevant evidence to prove the relationship may be
admitted. (Domasig v. NLRC, G.R. No. 118101, 16 Sept.
Elements 1996)
1. The putative Er’s power to control the Ee with Absence of Name in the Payroll
respect to the means and methods by which
the work is to be accomplished (Four-fold In Opulencia Ice Plant v. NLRC (G.R. No. 98368, 15
Test); and Dec. 1993), the Supreme Court disagreed with the
Er’s argument that the absence of the complainant’s
2. The underlying economic realities of the name in the payroll disapproved his being an Ee.
activity or relationship. (Economic Reality
Test). It held that, “if only documentary evidence would be
required to show that relationship, no scheming Er
Proper Standard for Economic Dependence would ever be brought before the bar of justice, as
no Er would wish to come out with any trace of
The proper standard is whether the worker is illegality he has authored considering that it should
dependent on the alleged Er for his continued take much weightier proof to invalidate a written
employment in that line of business. instrument.”
The determination of the nature of the relationship Thus, since the Er-Ee relationship in this case was
between Er and Ee depends upon the circumstances sufficiently proven by testimonial evidence, the
of the whole economic activity, such as: absence of time sheet, time record or payroll
became inconsequential. (Azucena, 2016)
1. The extent to which the services performed
are an integral part of the Er’s business; Mode of Compensation is Not Determinative of
Er-Ee Relationship
2. The extent of the worker’s investment in
equipment and facilities; The presence or absence of Er-Ee relationship is not
determined by the basis of the Ee’s compensation.
3. The nature and degree of control exercised by The compensation, whether called wage, salary,
the Er; commission or other name, may be computed on the
basis of time spent on the job or it may be based on
4. The worker’s opportunity for profit and loss; the quality and/or quantity of the work done. It may
2024 GOLDEN NOTES
further be dependent on skills possessed, seniority Boundary-Hulog System
earned, or performance and initiative shown by the
Ee. Under the boundary-hulog scheme, a dual juridical
relationship was created: that of Er-Ee and vendor-
Payment by result is a method of compensation and vendee. The boundary system is a scheme by an
does not define the essence of the relation. It is a owner or operator engaged in transporting
method of computing compensation, not a basis for passengers as a common carrier to primarily govern
determining the existence or absence of employer- the compensation of the driver, that is, the latter’s
employee relationship. (Tan v. Lagrama, G.R. No. daily earnings are remitted to the owner/operator
151228, 15 Aug. 2002) less the excess of the boundary which represents the
driver’s compensation. Under this system, the
Piece-rate, boundary, and pakyaw are merely owner or operator exercises control and
methods of pay computation and do not prove supervision over the driver. (Villamaria v. CA and
whether the payee is an Ee or not. (Azucena, 2016) Bustamante, G.R. No. 165881, 19 Apr. 2006)
Q: Africa, et al. are engaged as garbage truck The boundary-hulog contract between the jeepney
drivers to collect garbage from different cities owner and the jeepney driver does not negate the
and transport the same to the designated Er-Ee relationship between them. (Azucena, 2016)
dumping site. They filed separate cases against
Expedition for illegal dismissal for having been Q: To ensure road safety and address the risk-
prevented from entering the premises of taking behavior of bus drivers, the LTFRB issued
Expedition without cause or due process. They Memorandum Circular 2012-001 requiring all
claimed that they were regular Ees and were Public Utility Bus (PUB) operators to secure
required to work a minimum of 12 hours a day, Labor Standards Compliance Certificates under
seven days a week, even on holidays, and were pain of revocation of their existing certificates of
not paid the minimum wage, holiday or public convenience or denial of an application
premium pay, overtime pay, SIL pay and 13th for a new certificate. The DOLE likewise issued
month pay. Department Order (D.O.) No. 118-12 elaborating
on the part-fixed-part-performance-based
Expedition denied that respondents were its Ees compensation system referred to in the said
claiming that respondents were not part of the memorandum circular. Petitioners assail the
company’s payroll but were being paid on a per- constitutionality of the department order and
trip basis. They claimed that respondents were memorandum circular, arguing that these
not under their direct control and supervision issuances violate petitioners' rights to non-
as they worked on their own. Are the impairment of obligation of contracts, due
respondents Ees of Expedition? process of law, and equal protection of the laws.
Respondents counter that the department order
A: YES. Applying the four-fold test, Africa, et al. were and memorandum circular are valid issuances
engaged/hired by Expedition as garbage truck promulgated by the DOLE and the LTFRB in the
drivers. It is undeniable that they receive exercise of their quasi-legislative powers. Are
compensation from Expedition for the services that the department order and memorandum
they rendered to the latter. The fact that they were circular constitutional?
paid on a per trip basis is irrelevant because this was
merely the method of computing the proper A: YES. D.O. 118-12 and M.C. 2012-001 are in the
compensation due to them. Also, Expedition’s nature of social legislations to enhance the
power to dismiss was apparent when work was economic status of bus drivers and conductors, and
withheld from the respondent. Finally, Expedition to promote the general welfare of the riding public.
has the power of control over respondents in the D.O. 118-12 was issued to grant bus drivers and
performance of their work. (Expedition Construction conductors minimum wages and social welfare
Corp. v. Africa, G.R. No. 228671, 14 Dec. 2017) benefits. Further, petitioners repeatedly admitted
2024 GOLDEN NOTES
that in paying their bus drivers and conductors, they 2. KINDS OF EMPLOYMENT
employ the boundary system or commission basis, (Arts. 295-296, LC)
payment schemes which cause drivers to drive
recklessly. Not only does D.O. 118-12 aim to uplift the
1. As to the Labor Code Book VI
economic status of bus drivers and conductors; it
a. Regular
also promotes road and traffic safety. (Provincial Bus
b. Project
Operators Association of the Philippines v. DOLE and
c. Seasonal
LTFRB, G.R. No. 202275, 17 July 2018)
d. Casual
e. Probationary
Labor Union and Unregistered Association as
f. Fixed-term
Employer
2. On the basis of salary component
The mere fact that the respondent is a labor union
does not mean that it cannot be considered as an Er
a. Monthly-paid – Where the salary covers
of the persons who work for it. Much less should it
all the days of the month including the
be exempted from the very labor laws which it
rest days and holidays;
espouses as labor organization. (Bautista v. Inciong,
G.R. No. L-52824, 16 Mar. 1988)
b. Daily-paid – Where the salary only
covers the day or days worked.
Application of the Four-Fold Test and the Two-
Tiered Test
NOTE: Daily-paid or monthly-paid refers to the
inclusiveness of the salary, not the frequency or
Present Philippine law recognizes a two-tiered test.
intervals of payments.
The first tier of the test is the Four-Fold Test. The
second tier is the Economics of the Relationship
a. REGULAR
Test. But the latter test is used if and only if there is
going to be harshness in the results because of the
Those who are hired for activities which are
strict application of the four-fold test. (Francisco v.
necessary or desirable in the usual business of the
NLRC, G.R. No. 170087, 31 Aug. 2006)
Er. (Abad, Jr., 2015)
Art. 295 Presupposes Employment Relationship

Types of Regular Employment
Art. 295 applies where the existence of Er-Ee

1. As to nature of work – An employment shall
relationship is not the issue of the dispute. If the
be deemed to be regular where the Ee has
issue is whether or not the claimant is an Ee, the
been engaged to perform activities which are
tests of employment relationship shall be resorted
usually necessary or desirable in the usual
to.
business or trade of the Er, the provisions of
written agreements to the contrary
Art. 295 limits itself to differentiating four kinds of
notwithstanding and regardless of the oral
employment arrangement: regular, project,
agreements of the parties. (Sec. 5(a), Rule I,
seasonal, and casual. The article presupposes that
Book VI, IRR)
employment relationship exists between the
parties. (Azucena, 2016)
2. As to length of service – Any Ee who has
rendered at least one (1) year of service,
whether such service is continuous or
broken, shall be considered a regular Ee with
respect to the activity in which he is
employed, and his employment shall continue
2024 GOLDEN NOTES
while such activity exists. (Sec. 5(b), Rule I, qualification that the Ee must first be issued a
Book VI, IRR) regular appointment or must first be formally
declared as such before he can acquire a
NOTE: Regularization is not a management regular status. (Aurora Land Projects Corp. v.
prerogative; rather, it is the nature of employment NLRC, G.R. No. 114733, 02 Jan. 1997)
that determines it. It is a mandate of the law. (PAL v.
Pascua, G.R. No. 143258, 15 Aug. 2003) Repeated rehiring and the continuing need for
the Ee’s services are sufficient evidence of the
What determines regularity or casualness is not the necessity and indispensability of his services
employment contract, written or otherwise, but the to the Er’s business or trade. (Baguio Country
nature of the job. (Policy Instruction No. 2) Club Corporation v. NLRC, G.R. No. 102397, 04
Sept. 1992)
The practice of entering employment contracts
which would prevent the workers from becoming 3. When the terms of employment contract were
regular should be struck down as contrary to public not dealt with on equal terms, Ee’s left no
policy and morals. (Universal Robina Corp. v. choice but to affix signature of conformity on
Catapang, G.R. No. 164736, 14 Oct. 2005) each renewal of her contract as already
prepared by her employer. Moreover, the
Tests to Determine Regular Employment practice of repeatedly extending Ee's 3-month
contract for four years is a circumvention of
1. The primary standard of determining regular the acquisition of regular status. It is indicative
employment is the reasonable connection of the necessity and desirability of Ee’s work in
between the particular activity performed by Er’s business. (Dumpit-Murillo v. Court of
the Ee to the usual trade or business of the Er. Appeals G.R No 164652, 08 June 2007)
The test is whether the former is usually
necessary or desirable in the usual business or Riders of E-Commerce Platform Considered
trade of the Er. (De Leon v. NLRC, G.R. No. 70705, Regular Employees
21 Aug. 1989)
They are not merely a platform where parties can
NOTE: The connection can be determined by transact; they also offer the delivery of the items
considering the nature of the work performed from the sellers to the buyers. Delivery eases the
and its relation to the scheme of the particular transaction between the sellers and buyers and is an
business or trade in its entirety. (Highway integral part of Er’s business.
Copra Traders v. NLRC, G.R. No. 108889, 30 July
1988) The Er has different route managers to supervise
the delivery of the products from the sellers to the
2. Also, the performance of a job for at least a year buyers. Thus, it has taken steps to facilitate not only
is sufficient evidence of the job’s necessity if the transaction of the seller and buyer in the online
not indispensability to the business. This is the platform but also the delivery of the items.
rule even if its performance is not continuous (Ditiangkin v. Lazada e-Services Philippines Inc, G.R.
and merely intermittent. The employment is No. 246892, 21 Sept. 2022)
considered regular, but only with respect to
such activity and while such activity exists. Q: A was hired in a sugar plantation performing
(Universal Robina Corp. v. Catapang, G.R. No. such tasks as weeding, cutting and loading
164736, 14 Oct. 2005) canes, planting cane points, fertilizing and
cleaning the drainage. Because his daily
NOTE: The status of regular employment presence in the field was not required, A also
attaches to the casual Ee on the day worked as a houseboy at the house of the
immediately after the end of his first year of plantation owner. For the next planting season,
service. The law does not provide the the owner decided not to hire A as a plantation
2024 GOLDEN NOTES
worker but as a houseboy instead. Furious, A A: YES. There are several principles to be
filed a case for illegal dismissal against the considered in this case. First, a worker is presumed
plantation owner. Decide with reason. (2010 a regular employee, unless the employer establishes
BAR) that (1) the employee was hired under a contract
specifying that the employment will last only for a
A: A is a regular seasonal employee. Therefore, he specific undertaking, the termination of which is
cannot be dismissed without just or valid cause. determined at the time of engagement; (2) there
was indeed a project undertaken; and (3) the
The primary standard for determining regular parties bargained on equal terms, with no vices of
employment is the reasonable connection between consent.
the particular activity performed by the employee in
relation to the usual trade or business of the Second, if considered a regular employee, security
employer (Pier 8 Arrastre & Stevedoring Services, of tenure already attaches, and the subsequent
Inc., et al. v. Jeff B. Boclot, G.R. No. 173849, 28 Sept. execution of project employment contracts will
2007). Considering that A, as plantation worker, simply be considered a continuation in their regular
performs work that is necessary and desirable to the engagement.
usual business of the plantation owner, he is
therefore a regular seasonal employee and is Third, even if initially engaged as a project
entitled to reinstatement upon onset of the next employee, such nature of employment may ripen
season unless he was hired for the duration of only into regular status if (1) there is a continuous
one season. (Hacienda Bino v. Cuenca, G.R. No. rehiring of project employees even after the
150478, 15 Apr. 2005) cessation of a project; and (2) the tasks performed
Converting A to a mere houseboy at the house of the by the alleged "project employee'; are vital,
plantation owner amounts to an act of severing his necessary and indispensable to the usual business
employment relations as its plantation worker or trade of the employer.
(Angeles v. Fernandez, G.R. No. 160213, 30 Jan. 2007)
Fourth, regularized construction workers are
NOTE: The primary standard, therefore, of subject to the "no work, no pay" principle, such that
determining regular employment is the reasonable the employer is not obligated to pay them a salary
connection between the particular activity when "on leave." And finally, submission of
performed by the employee in relation to the usual termination reports to the DOLE Field Office "may
business or trade of the employer. (Pier 8 Arrastre & be considered" only as an indicator of project
Stevedoring Services, Inc., et al. v. Jeff B. Boclot, G.R. employment; conversely, non-submission does not
No. 173849, 28 Sept. 2007) automatically grant regular status.
Q: A was employed as “Electrician 3” on a per Applying the principles just laid down, the Court
project basis during the NYK Project. A found that Carpio was a regular employee of Modair,
memorandum was issued in lieu of the from the time of his engagement in 1998 until the
completion of the project which effectively completion of the NYK Project in 2013. (Carpio v.
terminated his employment contract. Despite Modair Manila Co. LTD. Inc., G.R. No. 239622, 21 June
executions of quitclaim instruments, A still filed 2021, as penned by J. M.V Lopez)
a case of illegal dismissal and regularization. He
contends that he attained regular status due to Seafarers are Not Regular Employees
his repeated employment and he was illegally
dismissed because his employer terminated his Seafarers cannot be considered as regular Ees. The
employment despite the availability of projects contract which they sign every time they are hired
after the completion of the NYK Project. Is A governs their employment. Their employment is
illegally dismissed? terminated when the contract expires. Their
employment is fixed for a certain period. (Ravago v.
Esso Eastern Maritime Ltd., G.R. No. 158324, 15 Mar.
2024 GOLDEN NOTES
2005) In case of OFWs, Art. 295 of the LC does not Q: Various camera operators were engaged by
apply. and rendered services directly to GMA Network,
Inc. and received compensation for such. They
Q: L. Natividad Poultry Farms is a business were subsequently dismissed by GMA which led
engaged in livestock and poultry production them to file a complaint for “illegal dismissal,
which employed several workers as livestock non-payment of salary or wages, and
feed mixers or as maintenance personnel. regularization,” claiming that they were regular
Ees of GMA because as camera operators, they
The workers filed complaints for illegal performed functions that were necessary and
dismissal against L. Natividad, asserting that desirable to its business as a television and
they are regular Ees, having been continuously broadcasting company. They also claimed that
employed by L. Natividad for a period ranging they were illegally dismissed for lack of just or
from more than one (1) year to 17 years. They authorized cause. On the other hand, GMA
stress that L. Natividad provided all the tools, argues that they were not their Ees, and that
equipment, and materials they used as even if they were, they could not have attained
maintenance personnel and then gave them regular status considering their failure to
specific tasks and supervised their work. render “at least one year of service” as required
by law.
The CA ruled that petitioners cannot be
considered as regular Ees because there was no a) Is there an Er-Ee relationship between
reasonable connection between the nature of the camera operators and GMA?
their carpentry and masonry work and
respondents' usual business in poultry and A: YES. To determine the existence of an Er-Ee
livestock production, sale, and distribution. Are relationship, case law has consistently applied the
the petitioners regular Ees of L. Natividad? four-fold test, to wit: (a) the selection and
engagement of the Ee; (b) the payment of wages; (c)
A: YES. The necessity or desirability of the work the power of dismissal; and (d) the Er’s power to
performed by an Ee can be inferred from the length control the Ee on the means and methods by which
of time that an Ee has been performing this work. If the work is accomplished, this being deemed as the
an Ee has been employed for at least one (1) year, he most crucial and determinative indicator of the
or she is considered a regular Ee by operation of law. presence or absence of an Er-Ee relationship.
Likewise, if an Ee has been on the job for at least one
(1) year, even if the performance of the job is In applying the four-fold test in this case, (a) the
intermittent, the repeated and continuous need for camera operators were engaged by and rendered
the Ee's services is sufficient evidence of the services directly to GMA; (b) they received
indispensability of his or her services to the Er's compensation for their services; (c) they were
business. dismissed by GMA; and (d) they were subject to
GMA’s control and supervision on the following
Thus, even if the Court of Appeals is of the opinion grounds: (a) their recordings and shoots were never
that carpentry and masonry are not necessary or left to their own discretion and craft; (b) they were
desirable to the business of livestock and poultry required to follow the work schedules which GMA
production, the nature of their employment could provided to them; (c) they were not allowed to leave
have been characterized as being under the second the work site during tapings, which often lasted for
paragraph of Art. 280. Thus, petitioners' service of days; (d) they were also required to follow company
more than one (1) year to respondents has made rules like any other Ee; (e) they were provided the
them regular Ees for so long as the activities they equipment they used during tapings; and (f) they
were required to do subsist. (Mario Abuda v. L. were assigned supervisors to monitor their
Natividad Poultry Farms, G.R. No. 200712, 04 July performance and guarantee their compliance with
2018) company protocols and standards.
2024 GOLDEN NOTES
b) Assuming the existence of an Er-Ee Contract of Perpetual Employment
relationship, were the camera operators
regular Ees of GMA? It deprives management of its prerogative to decide
whom to hire, fire, and promote and renders inutile
A: YES. Under Art. 295 of the LC, there are two ways the basic precepts of labor relations.
to attain regular employment status: (1)
employment shall be deemed to be regular where It is contrary to public policy and good customs, as
the Ee has been engaged to perform activities which it unjustly forbids the Er from terminating the
are usually necessary or desirable in the usual services of an Ee despite the existence of a just or
business or trade of the Er, notwithstanding the valid cause.
provisions of written agreement and regardless of
the oral agreement of the parties; and (2) any casual Since the relation between capital and labor are not
Ee who has rendered at least one year of service, merely contractual, impressed as they are with so
whether such service is continuous or broken, shall much public interest that the same should yield to
be considered a regular Ee with respect to the common good. (Philippine Telegraph and Telephone
activity in which he is employed and his Co. v. NLRC, G.R. No. 118978, 23 May 1997)
employment shall continue while such activity
exists. Q: Moises was employed by La Tondeña at the
maintenance section of its Engineering
Only casual Ees performing work that is neither Department paid on a daily basis through petty
necessary nor desirable to the usual business and cash vouchers. His work consisted mainly of
trade of the Er are required to render at least one painting company building and equipment and
year of service to attain regular status. Ees who other odd jobs relating to maintenance. After a
perform functions which are necessary and service of more than 1 year, Moises requested
desirable to the usual business and trade of the Er that he be included in the payroll of regular
attain regular status from the time of engagement. workers, instead of being paid through petty
Here, the camera operators were never casual Ees cash vouchers. Instead, La Tondeña dismissed
because they performed functions that were Moises and claimed that Moises was contracted
necessary and desirable to the usual business of on a casual basis specifically to paint certain
GMA; hence, they did not need to render a year’s company buildings and that its completion
worth of service to be considered Ees. (Henry terminated Moises’ employment. Can Moises be
Paragele, et al. v. GMA Network, Inc., G.R. No. 235315, considered as a regular Ee?
13 July 2020)
A: YES. The law demands that the nature and
Domestic Helpers and House helpers entirety of the activities performed by the Ee be
considered. Here, the painting and maintenance
The mere fact that the house helper or domestic work given to Moises manifests a treatment
servant is working within the premises of the consistent with a maintenance man and not just a
business of the employer and in relation to or in painter, for if his job was only to paint a building,
connection with its business, warrants the there would be no basis for giving him other work
conclusion that such househelper or domestic assignments in-between painting activities. It is not
servant is and should be considered as a regular tenable to argue that the painting and maintenance
employee of the employer and not as a mere family work of Moises are not necessary in La Tondena’s
househelper or domestic servant. (Apex Mining Co., business of manufacturing liquors; otherwise, there
Inc. v. NLRC, G.R. No. 94951, 22 Apr. 1991) would be no need for the regular maintenance
section of the company’s engineering department.
(De Leon v. NLRC, G.R. No. 70705, 21 Aug. 1989)
2024 GOLDEN NOTES
Q: A total of 43 Ees who are deaf-mutes were incur. The only rights and obligations between
hired and re-hired on various periods by Far us are those set forth in this agreement. This
East Bank and Trust Co. as money sorters and agreement cannot be amended or modified in
counters through a uniformly worded any way except with the duly authorized consent
agreement called “Employment Contract for in writing of both parties.” Is Efren Paguio a
Handicapped Workers.” The company regular Ee of Metromedia Times Corporation?
disclaimed that these Ees were regular Ees and A: YES. He performed activities which were
maintained, among others, that they are a necessary and desirable to the business of the Er,
special class of workers, who were hired and that the same went on for more than a year. He
temporarily under a special employment was an account executive in soliciting
arrangement which was a result of overtures advertisements, clearly necessary and desirable, for
made by some civic and political personalities to the survival and continued operation of the business
the Bank. Should the deaf-mute Ees be of the corporation.
considered as regular Ees?
The law, in defining their contractual relationship,
A: YES. The renewal of the contracts of the does so, not necessarily or exclusively upon the
handicapped workers and the hiring of others leads terms of their written or oral contract, but also
to the conclusion that their tasks were beneficial based on the nature of the work of Efren has been
and necessary to the bank. It also shows that they called upon to perform. A stipulation in an
were qualified to perform the responsibilities of agreement can be ignored as and when it is utilized
their positions; their disability did not render them to deprive the Ee of his security of tenure. (Paguio v.
unqualified or unfit for the tasks assigned to them. NLRC, G.R. No. 147816, 09 May 2003)
The Magna Carta for Disabled Persons mandates
that a qualified disabled Ee should be given the same Q: Super Comfort Hotel employed a regular pool
terms and conditions of employment as a qualified of “extra waiters” who are asked to report for
able-bodied person. The fact that the Ees were duty when the Hotel’s volume of business is
qualified disabled persons necessarily removes the beyond the capacity of the regularly employed
employment contracts from the ambit of Art. 80. waiters to undertake. Pedro has been an “extra
Since the Magna Carta accords them the rights of waiter” for more than 10 years. He is also called
qualified able-bodied persons, hence, they are upon to work on weekends, on holidays, and
covered by Art. 295 of the LC. (Bernardo v. NLRC, G.R. when there are big affairs at the hotel. What is
No. 122917, 12 July 1999) Pedro’s status as an Ee under the LC? (2008 BAR)
NOTE: The repeated rehiring of workers and the A: Pedro has acquired the status of a regular Ee.
continuing need for their services clearly attest to Pedro was engaged to perform activities which are
the necessity or desirability of their services in the necessary or desirable in the usual business or trade
regular conduct of the business or trade of the of the Er. Moreover, Pedro has been “extra waiter”
company. (Magsalin & Coca-Cola v. N.O.W.M., G.R. No. for more than ten years. Under the law, any Ee who
148492, 09 May 2003) has rendered service for at least one year, whether
such service is continuous or broken, shall be
Q: Metromedia Times Corp. entered, for the fifth considered a regular Ee with respect to the activity
time, into an agreement with Efren Paguio, in which he is employed, and his employment shall
appointing him to be an account executive of the continue while such activity exists. (Art. 295, LC)
firm. He was to solicit advertisements for “The
Manila Times.” The written contract between the
parties provided that, “You are not an Ee of the
Metromedia Times Corp. nor does the company
have neither any obligations towards anyone
you may employ, nor any responsibility for your
operating expenses or for any liability you may
2024 GOLDEN NOTES
Bus Drivers and Conductors are Considered and such job, work or service is for a definite period
Regular Employees made known to the Ee at the time of engagement.
(Sec. 5(b), Rule I, Book VI, IRR)
Bus drivers and/or conductors are considered
regular employees because: (1) they are directed to Employment is casual when it is irregular,
transport their passengers at a specified time and unpredictable, sporadic, and brief in nature, and
place; (2) they are not given the discretion to select outside the usual business of the Er. (Caro v.
and contract with prospective passengers; (3) their Rilloraza, G.R. No. L-9569, 30 Sept. 1997)
actual work hours could be determined with
reasonable certainty and their average trips per Casual Ee becoming a Regular Ee
month; and (4) the respondents supervised their
time and performance of duties. If he has rendered at least one (1) year of service,
whether such service is continuous or broken, he is
Bus companies put checkers, who are assigned at considered as regular Ee with respect to the activity
tactical places along the travel routes that are plied in which he is employed, and his employment shall
by their buses. The drivers and/or conductors are continue while such activity exists.
required to be at the specific bus terminals at a
specified time. In addition, there are always A casual Ee is only casual for one (1) year, and it is
dispatchers in each and every bus terminal, who the passage of time that gives him a regular status.
supervise and ensure prompt departure at specified (KASAMMA-CCO v. CA, G.R. No. 159828, 19 Apr. 2006)
times and arrival at the estimated proper time. The purpose is to give meaning to the constitutional
guarantee of security of tenure and right to self-
Obviously, these drivers and/or conductors cannot organization. (Mercado v. NLRC, G.R. No. 79868, 05
be considered as field personnel because they are Sept. 1991)
under the control and constant supervision of the
bus companies while in the performance of their NOTE: The scheme of the employer in hiring
work. (Dasco v. PHILTRANCO, G.R No. 211141, 29 June workers on a uniformly fixed contract basis of 5
2016) months and replacing them upon the expiration of
their contracts with other workers with the same
b. CASUAL employment status was found to have been
designed to prevent “casual” employees from
Casual employment attaining the status of a regular employee. (Pure
Foods Corporation v. NLRC, G.R. No. 122653, 12 Dec.
It is an employment where the Ee is engaged in an 1997)
activity which is not usually necessary or desirable
in the usual business or trade of the Er, provided, Q: Yakult Phils. is engaged in the manufacture of
that such employment is neither Project nor cultured milk. The workers were hired to cut
Seasonal. (Art. 295, LC) He performs only an cogon grass and weeds at the back of the factory
incidental job in relation to the principal activity of building used by Yakult. They were not required
the Er. to work on fixed schedule, and they worked on
any day of the week on their own discretion and
NOTE: But despite the distinction between regular convenience. The services of the workers were
and casual employment, every Ee shall be entitled to terminated by Yakult before the expiration of
the same rights and privileges and shall be subject the 1-year period.
to the same duties as may be granted by law to
regular Ees during the period of their actual May casual or temporary Ees be dismissed by the
employment. Er before the expiration of the 1-year period of
employment?
An Ee is engaged to perform a job, work or service
which is merely incidental to the business of the Er,
2024 GOLDEN NOTES
A: YES. The usual business or trade of Yakult Phils.
is the manufacture of cultured milk. The cutting of c. PROBATIONARY
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business Probation
of the Yakult.
It is the period during which the Er may determine
The workers are casual Ees. Nevertheless, they may if the Ee is qualified for possible inclusion in the
be considered regular Ees if they have rendered regular force. (Holiday Inn Manila v. NLRC, G.R. No.
services for at least one (1) year. When, as in this 109114, 14 Sept. 1993)
case, they were dismissed from their employment
before the expiration of the one (1) year period, they It is usually a six-month period during which the Er
cannot lawfully claim that their dismissal was observes the performance and conduct of the Ee. If
illegal. (Capule, et al. v. NLRC, G.R. No. 90653, 12 Nov. he passes the agreed standard, he will be retained as
1990) a regular Ee. If he fails, his tentative employment
ends.
Casual vs. Project Employee
There is probationary employment where the Ee
CASUAL EE PROJECT EE upon his engagement is made to undergo a trial
period during which the Er determines his fitness to
Employed for a
qualify for regular employment based on reasonable
specific project or
Engaged to perform a standards made known to him at the time of
undertaking where
job, work or service engagement. (Tamson’s Enterprises, Inc. v. CA, G.R.
the completion or
which is incidental to No. 192881, 16 Nov. 2011)
termination of which
the business of the Er
is determined at the
and the definite period Probationary Employment
time of his
of his employment is
engagement.
made known to him at Employment where the Ee, upon his engagement:
the time of his
His work need not be
engagement. 1. Is made to undergo a trial period;
incidental to the
business of the Er
2. During which the Er determines his fitness
His employment may to qualify for regular employment; and
His continued
exceed one year
employment after the
without necessarily 3. Based on reasonable standards made
lapse one year makes
making him a regular known to the Ee at the time of engagement.
him a regular Ee.
Ee. (Sec. 6, Book VI, Rule I, IRR)
Job is coterminous
NOTE: In all cases involving Ees engaged on
with a specific project
probationary basis, the Er shall make known to the
or phase thereof. It is
Ee the standards under which he will qualify as a
required that a
regular Ee at the time of his engagement. (Sec. 6(d),
No termination report termination report be
Book VI, Rule I, IRR)
required. submitted at the
nearest employment
Requisites for a Valid Probationary Employment
office upon
completion of the
1. There must be a written contract;
project or phase.
2. The contract must spell out that the Ee will go

through a probationary period of employment
for a specified number of months;
2024 GOLDEN NOTES
position.
3. The contract must specify reasonable standards
on the basis of which his performance will be Alcaraz filed a complaint for illegal dismissal
evaluated; and damages against Abbott and its officers. She
claimed that she should have already been
4. There must be an assessment of the considered as a regular and not a probationary
performance of the probationary Ee in relation Ee given Abbott’s failure to inform her of the
to the standards; and reasonable standards for her regularization
upon her engagement as required under Art.
5. The result of the assessment must be 295 of the Labor Code.
communicated to the Ee.
Further, she claims that her performance was
Rules on Probationary Employment not discussed with her in line with the
procedure of Abbot. Was Alcaraz sufficiently
1. Er shall make known to the Ee at the time he is informed of the reasonable standards to qualify
hired, the standards by which he will qualify as her as a regular Ee?
a regular Ee;
A: YES. An Er is deemed to have made known the
NOTE: Where no standards are made known to standards that would qualify a probationary Ee to
the Ee at that time, he shall be deemed a regular be a regular Ee when it has exerted reasonable
Ee. (Sec. 6(d), Rule VIII-A, Book VI, IRR) efforts to apprise the Ee of what he is expected to do
or accomplish during the trial period of probation.
2. Probationary employment must have been In this case, Abbott clearly conveyed to Alcaraz her
expressly agreed upon; without such explicit duties and responsibilities as Regulatory Affairs
agreement, the employment is considered Manager prior to, during the time of her
regular; engagement, and the incipient stages of her
employment. Hence, Alcaraz was validly terminated
3. An Ee allowed to continue work after the from her employment.
probationary period shall be considered a
regular Ee; Nonetheless, despite the existence of a sufficient
ground to terminate Alcaraz’s employment and
4. During the probationary period, the Ee enjoys Abbott’s compliance with the Labor Code
security of tenure; his services can only be termination procedure, it is readily apparent that
terminated for just or authorized causes. Abbott breached its contractual obligation to
Alcaraz when it failed to abide by its own procedure
Q: Alcaraz signed an employment contract with in evaluating the performance of a probationary Ee.
Abbott for the position of Medical and Since this procedure was not followed, the dismissal
Regulatory Affairs Manager which stated that was therefore procedurally infirm rendering Abbot
she was to be placed on probation for a period of liable for nominal damages. (Abbott Laboratories v.
six (6) months. In line with this, she received an Alcaraz, G.R. No. 192571, 23 July 2013)
email containing Abbott’s organizational chart
and a job description of her work. Further, Period of Probationary Employment
during Alcaraz’s pre-employment orientation,
she was briefed on her duties and GR: It shall not exceed six (6) months from the date
responsibilities as Regulatory Affairs Manager. of the commencement of employment.
Abbot has a procedure which requires that the
Ee’s performance must be discussed and XPNs:
reviewed with the Ee two times. Later on,
Alcaraz was terminated for allegedly failing to
meet the regularization standards for the said
2024 GOLDEN NOTES
1. Covered by an Apprenticeship or Learnership Instances When Extension of Probationary
agreement stipulating a different period (Art. Period is Allowed
296, LC); or
Extension is allowed only when:
2. When the parties to an employment contract
may agree otherwise, such as: 1. Nature of the job requires extensive training; or
a. When the same is established by company 2. If it is a company policy that the period of
policy; or probationary employment should be an
extended period.
b. When the same is required by the nature of
work to be performed by the Ee. (Busier v. NOTE: The extension of period should always be
Leogardo, Jr., G.R. No. L-63316, 31 July 1984) reasonable; Such that, the nature of the work so
requires and that it is the amount of time required
e.g., The probationary period set for for an ordinary worker to learn the job.
professors, instructors and teachers is three
consecutive years of satisfactory service Rationale of the Prohibition on Double or
pursuant to DOLE Manual of Regulations for Successive Probation
Private Schools.
The evil sought to be prevented is to discourage
NOTE: By voluntarily agreeing to such an scheming Ers from using the system of double or
extension, the Ee waived any benefit successive probation to circumvent the mandate of
attaching to the completion of the period if he the law on regularization and make it easier for
still failed to make the grade during the them to dismiss their Ees. (Holiday Inn Manila v.
period of extension. (Mariwasa Mfg. Inc. v. NLRC, G.R. No. 109114, 14 Sept. 2003)
Hon. Leogardo, G.R. No. 74246, 26 Jan. 1989)
Q: Michelle Miclat was employed on a
3. The Er gives the Ee a second chance to pass the probationary basis as marketing assistant by
standards set. (Mariwasa Manufacturing, Inc. v. Clarion Printing House but during her
Leogardo, Jr., G.R. No. 74246, 26 Jan. 1989) employment she was not informed of the
standards that would qualify her as a regular Ee.
NOTE: Period of probation shall be reckoned from 30 days after, Clarion informed Miclat that her
the date the Ee started working. (Sec. 6(b), Book VI, employment contract had been terminated
Rule I, IRR) Probationary Ees may be dismissed for without any reason. Miclat was informed that
cause before end of the probationary period. her termination was part of Clarion’s cost-
After the lapse of the probationary period 6 months, cutting measures. Is Miclat considered as a
Ee becomes regular. regular Ee and hence entitled to its benefits?
Purpose of the Probation Period A: YES. In all cases of probationary employment, the
Er shall make known to the Ee the standards under
The purpose of the probation period is to afford the which he will qualify as a regular Ee at the time of
Er an opportunity to observe the fitness of a his engagement. Where no standards are made
probationary Ee at work. known to the Ee at that time, he shall be deemed a
regular Ee. In the case at bar, she was deemed to
have been hired from day one as a regular Ee.
(Clarion Printing House Inc., v. NLRC, G.R. No. 148372,
27 June 2005)
2024 GOLDEN NOTES
Obligation of the Er to his Probationary Ees already a regular Ee of the company under Art. 295
of the LC.”
There is obligation on the part of Er to inform
standards for regularization at the time of How to resolve the conflict between the Alcira
engagement. The failure to inform has the effect that and Mitsubishi Motors case:
upon the expiry of the probationary employment,
with or without the period provided for in the 1. Statutory Construction – The latter case
contract, the worker is deemed to be regular. prevails (Mitsubishi Motors); or
Q: Middleby Phils. Corp. hired Alcira as 2. Rule more favorable to the Ee – Use the
engineering support services supervisor on a computation which would amount to
probationary basis for six months. Apparently granting the subject Ee regular
unhappy with Alcira’s performance, Middleby employment status (Based on
terminated his services. Alcira contends that he Constitutional and statutory provisions for
was already a regular Ee when his employment the liberal interpretation of labor laws).
was terminated. According to Alcira’s
computation, since Art. 13 of the NCC provides Instances When a probationary Ee is deemed to
that 1 month is composed of 30 days, 6 months be a Regular Ee
totaling 180 days, then his 180th day would fall
on 16 Nov. 1996 making him a regular Ee before 1. If he is allowed to work after a probationary
his termination. Is the contention of the period. (Art. 295, LC)
petitioner in the computation of six months 2. If no standards, under which he will qualify as a
correct? regular Ee, are made known to him at the time
of his engagement. (Rule I, Book VI, IRR)
A: NO. The computation of the six (6) month
probationary period is reckoned from the date of Grounds for Terminating Probationary
appointment up to the same calendar date of the Employment (J-A-FaR)
sixth month following. In short, since the number of
days in each month was irrelevant, Alcira was still a 1. Just causes
probationary Ee when Middleby opted not to 2. Authorized causes; or
“regularize” him on 20 Nov. 1996. (Alcira v. NLRC, 3. When he Fails to qualify as a Regular Ee in
G.R. No. 149859, 09 June 2004) accordance with reasonable standards made
known by the Er to the Ee at the time of his
NOTE: In Mitsubishi Motors v. Chrysler Phils. Labor engagement. (ICMC v. NLRC, G.R. No. 72222, 30
Union (G.R. No. 148738, 29 June 2004), the SC ruled Jan. 1989; Art. 295, LC)
in this wise:
NOTE: If pre-termination of probationary contract
“Applying Art. 13 of the NCC, the probationary is due to the valid causes, the Er is not liable to pay
period of 6-months consists of 180 days. This is in the monetary value of the unexpired portion of the
conformity with Art. 13(1) of the NCC. The number employment.
of months in the probationary period (6 months),
should then be multiplied by the number of days While probationary Ees do not enjoy permanent
within a month (30 days). Hence, the period of 180 status, they are afforded the security of tenure
days. As clearly provided in Art. 13, in computing a protection of the Constitution. Consequently, they
period, the first day shall be excluded and the last cannot be removed from their positions unless for
day included. Thus, the 180 days commenced on 27 cause. Such constitutional protection, however, ends
May 1996, and ended on 23 Nov. 1996. The upon the expiration of the period stated in their
termination letter dated 25 Nov. 1996 was served probationary contract of employment. Thereafter,
on Paras only on 26 Nov. 1996. He was, by then the parties are free to renew the contract or not.
(CSA v. NLRC, G.R. No. 87333, 06 Sept. 1991)
2024 GOLDEN NOTES
Limitations on the Er’s Power to Terminate a remaining in his probationary appointment, the
Probationary Employment Contract hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
1. The power must be exercised in accordance Hotel Corp. v. NLRC, G.R. No. L-53453, 22 Jan. 1986)
with the specific requirements of the contract;
Period of Probationary Employment of Private
2. If a particular time is prescribed, the School Teachers
termination must be within such time and if
formal notice is required, then that form must The probationary employment of academic teaching
be used; personnel shall not be more than a period of six (6)
consecutive semesters or nine (9) consecutive
3. The Er’s dissatisfaction must be real and in good trimesters of satisfactory service, as the case may
faith, not feigned to circumvent the contract or be. (Sec. 117, The Manual of Regulations for Private
the law; and Higher Education)
4. There must be no unlawful discrimination in NOTE: An academic teaching personnel, who does
the dismissal. (Manila Hotel Corporation v. not possess the minimum academic qualifications
NLRC, G.R. No. L-53453, 22 Jan. 1986) under Secs. 35 and 36 of the Manual of Regulations
for Private Higher Education shall be considered as
NOTE: The probationary Ee is entitled to procedural a part-time Ee and, therefore, cannot avail of the
due process prior to dismissal from service. status and privileges of a probationary employment.
A part-time Ee cannot acquire a regular permanent
Q: Ron Cruz was employed as gardener by status, and, hence, may be terminated when a
Manila Hotel on “probation status” effective 22 qualified teacher becomes available. (Manual of
Sept. 1976. The appointment signed by Cruz Regulations for Private Higher Education)
provided for a 6-month probationary period. On
20 Mar. 1977, or a day before the expiration of Full-Time Teacher
the probationary period, Cruz was promoted to
lead gardener position. On the same day, Cruz’ One whose total working day is devoted to school,
position was “abolished” by Manila Hotel no other regular remunerative employment, and is
allegedly due to economic reverses or business paid on a regular monthly basis regardless of the
recession, and to salvage the enterprise from number of teaching hours.
imminent danger of collapse. Was Cruz illegally
dismissed? In college, the normal teaching load of a full-time
instructor shall be 18 hours a week.
A: YES. There is no dispute that as a probationary
Ee, Cruz had but limited tenure. Although on Professors and instructors are independent
probationary basis, however, Cruz still enjoys the contractors. They are compensated for their
constitutional protection on security of tenure. services by wages and salaries, rather than share of
During his tenure of employment, therefore, or profits; they cannot substitute others to do their
before his contract expires, Cruz cannot be removed work without the consent of the university and can
except for cause as provided for by law. be laid off if their work is unsatisfactory. All these
indicate that the university has control over their
What makes Cruz’ dismissal highly suspicious is that work and that they are, therefore, Ees and not
it took place at a time when he needed only but a day independent contractors. (Feati University v. Hon.
to be eligible as a regular Ee. That he is competent Jose S. Bautista, and Feati University Faculty Club-
finds support in his being promoted to a lead PAFLU, G.R. No. L-21278, 27 Dec. 1966)
gardener in so short span of less than six (6)
months. By terminating his employment or
abolishing his position with but only one day
2024 GOLDEN NOTES
Requirement of Full-Time Academic Personnel Q: Colegio de San Agustin (CSA) hired Gela Jose
or Teacher as a grade school classroom teacher on a
probationary basis for SY ‘84–‘85. Her contract
1. Possesses at least the minimum academic was renewed for SY’s ‘85-‘86 and ‘86-‘87. On 24
qualifications prescribed by the Department; Mar. 1987, the CSA wrote the Gela that "it would
be in the best interest of the students and their
2. Paid monthly or hourly, based on the regular families that she seeks employment in another
teaching loads as provided for in the policies, school or business concern for next school year."
rules and standards of the Department and the Notwithstanding the said notice, the CSA still
school; paid Gela her salary for 15 Apr. to 15 May 1987.
On 06 Apr. 1987, Gela wrote the CSA and sought
3. Total working day of not more than eight (8) reconsideration but she received no reply.
hours a day is devoted to the school; Thereafter, she filed a complaint for illegal
dismissal. Was Gela illegally dismissed?
4. Has no other remunerative occupation
elsewhere requiring regular hours of work that A: NO. The Faculty Manual of CSA underscores the
will conflict with the working hours in the completion of three (3) years of continuous service
school; and at CSA before a probationary teacher acquires
tenure. Hence, Gela cannot claim any vested right to
5. Not teaching full-time in any other educational a permanent appointment since she had not yet
institution; and achieved the prerequisite three (3) year period
under the Manual of Regulation for Private Schools
6. Academic personnel must have rendered three and the Faculty Manual of CSA.
(3) consecutive years of service for those
elementary and secondary levels, six (6) In the instant case where the CSA did not wish to
consecutive regular semesters in the tertiary renew the contract of employment for the next
level and nine (9) consecutive trimesters for school year, Gela has no ground to protest. She was
those in the tertiary level where collegiate not illegally dismissed. Her contract merely expired.
courses are offered on a trimester basis (Sec. 92, (CSA v. NLRC, G.R No. 87333, 06 Sept. 1991)
Manual of Regulations for Private Higher
Education) Q: During their probationary employment,
eight Ees were berated and insulted by their
NOTE: All teaching personnel who do not meet the supervisor. In protest, they walked out. The
foregoing qualifications are considered part-time. supervisor shouted at them to go home and
(Sec. 45, Manual of Regulations for Private Higher never to report back to work. Later, the
Education) personnel manager required them to explain
why they should not be dismissed from
Legal Requisites for Acquisition by a Teacher of employment for abandonment and failure to
Permanent Employment qualify for the positions applied for. They filed a
complaint for illegal dismissal against their Er.
1. The teacher is a full-time teacher; As the Labor Arbiter, how will you resolve the
case? (2006 BAR)
2. Must have rendered three (3) consecutive years
of services; and A: As the LA, I will resolve the case in favor of the
eight probationary Ees due to the following:
3. Such service must be satisfactory. (Jocelyn
Herrera-Manaois v. St. Scholastica’s College, G.R. 1. Probationary Ees also enjoy security of tenure.
No. 188914, 11 Dec. 2013) (Biboso v. Victoria Milling, G.R. No. L-44360, 31
Mar. 1977)
2024 GOLDEN NOTES
2. In all cases involving Ees on probationary renewed. Arlene argued that since she taught at
status, the Er shall make known to the Ee at the HNU for more than six consecutive regular
time he is hired, the standards by which he will semesters, she already attained the status of a
qualify for the positions applied for. regular Ee pursuant to the Manual of
Regulations for Private School Teachers. Thus,
3. The filing of the complaint for illegal dismissal she claimed that her employment was illegally
effectively negates the Er’s theory of terminated. Is Arlene’s contention correct?
abandonment. (Rizada v. NLRC, G.R. No. 96982,
21 Sept. 1999) A: NO. A private school teacher acquires permanent
status when the following requisites are met: 1) The
4. The order to go home and not to return to work teacher serves full-time; 2) he/she must have
constitutes dismissal from employment. rendered three consecutive years of service; and 3)
such service must have been satisfactory.
5. The eight (8) probationary Ees employment
were terminated without just cause and While Arlene has rendered three consecutive years
without due process. of satisfactory service, she was, however, not a full-
time teacher at the College of Nursing of HNU. Only
In view of the foregoing, I will order reinstatement a full-time teaching personnel can acquire regular
to their former positions without loss of seniority or permanent status. The three-year or one-year
rights with full back wages, plus damages and clinical practice experience is a minimum academic
attorney’s fees. requirement to qualify as a faculty member in a
College of Nursing, and is therefore, required for one
Q: Arlene started working as a Casual or to be considered as a full-time faculty of such.
Assistant Clinical Instructor for two semesters
in HNU's College of Nursing while awaiting the Arlene failed to meet the required minimum clinical
results of her Nursing Board Examination. She practice experience under the law and the relevant
alleged that upon her hiring, HNU did not inform regulations. Since she failed to provide substantial
her of the standards for the evaluation of her evidence, her work experience cannot be
satisfactory completion of her probationary considered as "clinical practice." Being unqualified
period. In the second semester of S.Y. 1994- as a nursing faculty from the start, Arlene cannot
1995, she was hired as a full-time Clinical possibly be considered a full-time faculty and thus,
Instructor until S.Y. 1998-1999, and was could not, even after rendering satisfactory service
assigned at the Medical Ward. During the second for three years, be entitled to permanency.
semester of S.Y. 1998-1999, she was transferred Therefore, her stint as a clinical instructor from
to the Guidance Center as a Nursing Guidance 1994-1997 cannot even be considered as
Instructor handling guidance, education, and compliance with the clinical practice experience
graduate school courses. At this time, she was requirement for the purpose of determining
elected as Municipal Councilor of Carmen, whether or not she is a full-time faculty when she
Bohol. was employed again as a clinical instructor from
2004-2007.
Upon her reelection as Municipal Councilor for
the 2001-2004 term, she took a leave of absence The fixed-term contracts presented as evidence
from HNU. Arlene rejoined HNU and was given a would reveal that the parties intended that their Er-
full-time load for the S.Y. 2004-2005. For S.Y. Ee relationship would last only for a specific period.
2005-2006 and 2006-2007, Arlene signed Even if no written fixed-term contract was
contracts for term/semesteral, employment. presented, judicial notice can be made upon the fact
that teachers' employment contracts are for a
However, in a notice, HNU informed Arlene that specific semester or term. For the second requisite
her contract of employment, which would have of a valid fixed-term contract, Arlene was on equal
expired on 31 March 2007, will no longer be footing with HNU. She was an honors graduate and
2024 GOLDEN NOTES
has stellar qualifications. Moreover, she is an elected the bounds of the law and provides quality
public official and appears to be quite popular, given education by hiring only qualified teaching
that she has won as municipal councilor multiple personnel.
times and even placed number one in terms of votes
garnered. These facts would make apparent that As the Court held in Escorpizo v. University of Baguio
Arlene is not a mere run-of-the-mill Ee, and that she (G.R. No. 121962, 30 Apr. 1999), a school CBA must
certainly has the capability to be on equal footing in be read in conjunction with statutory and
dealing with her Er when it came to her employment administrative regulations governing faculty
terms. qualifications. Such regulations form part of a valid
CBA without need for the parties to make express
Thus, petitioner was validly contracted for a fixed reference to it. While the contracting parties may
term. The expiry of her latest contract on 31 March establish such stipulations, clauses, terms and
2007 effectively ended the Ee-Er relationship she conditions, as they may see fit, the right to contract
had with HNU. No dismissal, whether illegal or not, is still subject to the limitation that the agreement
ever happened. Therefore, she is not entitled to any must not be contrary to law or public policy. (Son v.
of the reliefs sought. (Arlene Palgan v. Holy Name UST, G.R. No 211273, 18 Apr. 2018)
University, et.al., G.R. No. 219916, 10 Feb. 2021)
Q: In 2010, Guagua National Colleges
Q: UST has a CBA with the Union. The CBA (petitioner) implemented a 15% tuition fee
requires a master’s degree for a professor to be increase for the school year 2010-2011. After
tenured. The CBA, however, also provides that “If deducting scholarship expenses and making
he does not finish his degree in five (5) semesters, provisions for dropouts, unpaid accounts, and
he shall be separated from service at the end of contingencies, the net tuition fee incremental
the fifth semester; however, if he is made to serve proceeds (TIP) of petitioner amounted to Php
the University further, in spite of the lack of a 4,579,923.00. Pursuant to Sec. 5(2) of R.A. No.
master's degree, he shall be deemed to have 6728, petitioner allocated 70% of the TIP, or Php
attained tenure”. Is the stipulation conferring 3,205,946.00, as follows: (1) 13th month pay and
tenureship despite the lack of master’s degree cash gift - P 91,709.00; (2) honorarium – Php
valid? 286,497.00; (3) clothing and family assistance –
Php 191,225.00; (4) SSS, PHIC, and HDMF
A: NO. When the CBA was executed between the contribution - P 67,413.00; and (5) Retirement
parties in 2006, they had no right to include therein benefit fund contribution - P 2,569,102.00.
the provision relative to the acquisition of tenure by Respondents Guagua National Colleges Faculty
default, because it is contrary to, and thus violative Labor Union and Guagua National Colleges Non-
of the 1992 Revised Manual of Regulations for Private Teaching and Maintenance Labor Union
Schools that was in effect at the time. As such, said demanded that the 70% of the TIP be allocated
CBA provision is null and void, and can have no to the salaries of the Ees. As basis for their
effect as between the parties. “A void contract is demand, respondents quoted Sec. 182(b) of the
equivalent to nothing; it produces no civil effect; and 2010 Revised Manual, which states that the
it does not create, modify or extinguish a juridical increase in tuition or other school fees, as well
relation.” as new fees shall be subject to the condition,
among others, that no increase in tuition or
It cannot be said either that by agreeing to the other school fees or charges shall be approved
tenure by default provision in the CBA, UST is unless 70% of the proceeds is allocated for
deemed to be in estoppel or have waived the increase in salaries or wages of the members of
application of the requirement under CHED the faculty and all other Ees of the school
Memorandum Order No. 40-08. Such a waiver is concerned. Is the contention of the respondents
precisely contrary to law. Moreover, a waiver would correct?
prejudice the rights of the students and the public,
who have a right to expect that UST is acting within
2024 GOLDEN NOTES
A: NO. The guidelines issued under DECS Order No.
15, series of 1992 on the allocation of the 70% d. PROJECT
incremental proceeds under R.A. No. 6728
restricted the scope of "other benefits" by limiting Project
its applicability to "wage related benefits," which the
law itself does not require. The term "other A "project" has reference to a particular job or
benefits" should not refer only to other wage- undertaking that may or may not be within the
related benefits. Well settled is the doctrine that in regular or usual business of the Er. In either case, the
case of conflict, the law prevails over the project must be distinct, separate, and identifiable
administrative regulations implementing it. To be from the main business of the Er, and its duration
valid, a rule or regulation must conform and be must be determined or determinable. (PAL v. NLRC,
consistent with the provisions of the enabling to G.R. No. 125792, 09 Nov. 1998)
statute. As such, it cannot amend the law either by
abridging or expanding its scope. Project Employment
Sec. 5(2) of R.A. No. 6728 clearly states that a tuition Project employment is employment that has been
fee increase is allowed if 70% of the amount fixed for:
subsidized allotted for tuition fee or of the tuition
fee increases shall go to the payment of salaries, 1. Specific undertaking – A specific project or
wages, allowances, and other benefits of teaching undertaking the completion; or
and non-teaching personnel. The law does not
qualify the term "other benefits" to refer only to 2. Time-bound – Termination of which has been
"wage-related benefits." Hence, the allocation of a determined at the time of engagement of the Ee.
portion of the 70% TIP for the Ees' retirement plan, (Sec. 5(a), Book VI, Rule I, IRR)
which is clearly intended for the benefit of the Ees,
fall under the category of "other benefits" as The period is not the determining factor, so that
provided under the law. even if the period is more than one (1) year, the Ee
does not necessarily become regular.
Moreover, on 04 Feb. 2011, then DepEd Secretary
Luistro issued DepEd Order No. 11 s. 2011. It NOTE: Where the employment of a project Ee is
amended Sec. 182 of the 2010 Revised Manual of extended long after the supposed project has been
Private Schools to conform to the provision of Sec. finished, the Ees are removed from the scope of
5(2) of R.A. No. 6728, among others, to include other project Ees and considered as regular Ees.
benefits in the allocation of the allowed tuition fee
increase, apart from the payment of salaries, wages, Repeated hiring on a project-to-project basis is
and allowances of members of the faculty and other considered necessary and desirable to the business
school Ees. Thus, Guagua National Colleges' of the Er. The Ee is deemed regular. (Maraguinot v.
allocation of a portion of the 70% net tuition fee NLRC, G.R. No. 120969, 22 July 1998)
incremental proceeds for contribution to the
retirement plan of its Ees is VALID. (Guagua The litmus test to determine whether an individual
National Colleges v. Guagua National Colleges Faculty is a project employee lies in setting a fixed period of
Labor Union, G.R. No. 213730, 23 June 2021) employment involving a specific undertaking which
completion or termination has been determined at
the time of the particular Ee’s engagement. (Leyte
Geothermal Power Progressive Employees Union v.
PNOC-EDC, G.R. No. 170351, 30 Mar. 2011)
Q: In a case for illegal dismissal, the issue is

whether the respondents were regular Ees and
were illegally dismissed. The respondents were
2024 GOLDEN NOTES
continuously hired by the company and assigned requisite of project employment that the
to different projects from the beginning of their completion or termination of such project or
employment in 1990 until their termination in undertaking be determined at the time of
1993. They also claimed that they were not engagement?
limited to performing work as cement cutters,
but they also cleaned canals and pipes, fixed A: NO. It is enough that Herma Shipyard gave the
tools, and other related work at the company. approximate or target completion date in the
Are the respondents regular Ees? project employment contract. Given the nature of its
business and the scope of its projects which take
A: YES. The principal test in determining whether months or even years to finish, Herma Shipyard
an Ee is a project Ee is whether he/she is assigned cannot be expected to give a definite and exact
to carry out a "specific project or undertaking," the completion date. It can only approximate or
duration and scope of which are specified at the estimate the completion date. What is important is
time the Ee is engaged in the project, or where the that the Ees were apprised at the time of their
work or service to be performed is seasonal in engagement that their employment is coterminous
nature and the employment is for the duration of the with the specific project and the purpose of the
season. A true project Ee should be assigned to a extension is only to complete the same specific
project which begins and ends at determined or project, and not to keep them employed even after
determinable times and be informed thereof at the the completion thereof. (Herma Shipyard Inc. v.
time of hiring. Oliveros et al., G.R. No. 208936, 17 Apr. 2017)
Clearly, the presentation of service contracts Indicators of Project Employment in the

between the Er and their client (even if it shows the Construction Industry
duration of the project), in lieu of the Ees' individual
employment contracts, does not establish that the Either one or more of the following circumstances,
latter are project Ees. There was no other among others, may be considered as indicators that
substantial evidence offered to prove that an Ee is a project Ee:
respondents were informed at the time of their
hiring, that they were project Ees. Moreover, 1. The duration of the specific/identified
petitioner's failure to file termination reports at the undertaking for which the worker is engaged is
end of each project was an indication that reasonably determinable;
respondents were regular Ees. (Jovero v. Cerio, G.R.
No. 202466, 23 June 2021) 2. Such duration, as well as the specific
work/service to be performed, is defined in an
Q: Herma Shipyard, Inc., (HERMA) is engaged in employment agreement, and is made clear to
the business of shipbuilding and repair. Several the Ee at the time of hiring;
of its Ees occupy various positions. In support of
their employment is a contract of employment NOTE: Absent any other proof that the project
denominated as Kasunduang Paglilingkod, Ees were informed of their status as such, it
which classifies them as a project-based Ee only. will be presumed that they are regular Ees.
The Ees were informed at the time of their
engagement that their status is only a project Ee 3. The work/service performed by the Ee is in
and their duration of specific project or connection with the particular project/
undertaking. undertaking for which he is engaged;
However, under Paragraph 10 of their 4. The Ee, while not employed and awaiting
employment contract, it allows the extension of engagement, is free to offer his services to any
the Ees’ employment until the completion of the other Er;
specific work. Is the extension agreement under
the employment contract violation of the second
2024 GOLDEN NOTES
5. The termination of his employment in the to be performed and that such is made clear to them
particular project/undertaking is reported to at the time of hiring. As such, they are regular Ees
the DOLE Regional Office having jurisdiction falling under the classification of non-project Ees.
over the workplace within 30 days following the
date of his separation from work, using the Requisites to Acquire Regular Ee Status of
prescribed form on Ee’s terminations, Project Ee
dismissals or suspensions; or
1. There is a continuous rehiring of project Ee’s
6. An undertaking in the employment contract by even after cessation of a project; and
the Er to pay completion bonus to the project Ee
as practiced by most construction companies. 2. The tasks performed by the alleged “project Ee”
(D.O. 19-93; Hanjin Heavy Industries v. Ibañez, are vital, necessary, and indispensable to the
G.R. No. 170181, 26 June 2008) usual business or trade of the Er. (D.M. Consunji,
Inc. v. JAMIN, G.R. No. 192514, 18 Apr. 2012)
Requisites in Determining Whether an Ee is a
Project Ee NOTE: The length of time during which the Ee was
continuously rehired is not controlling, but merely
1. Designation of named Ees as “Project Ees”; serves as a badge of regular employment.
2. The project Ee was assigned to carry out a “Day Certain” Rule

specific project or undertaking;
It states that a project employment that ends on a
3. The duration and scope of which were specified certain date does not end on an exact date but upon
at the time the Ee was engaged for that project the completion of the project.
(Imbuido v. NLRC, G.R. No. 114734, 31 May
2000); Q: Diosdado, a carpenter, was hired by Building
Industries Corporation (BIC), and assigned to
4. The Ee must have been dismissed every after build a small house in Alabang. His contract of
completion of his project or phase; and employment specifically referred to him as a
"project Ee," although it did not provide any
5. Report to the DOLE of Ee’s dismissal on account particular date of completion of the project. Is
of completion of contract. (D.O. 19-1993) the completion of the house a valid cause for the
termination of Diosdado’s employment? (2009
Types of Ees in the Construction Industry BAR)
1. Project Ees - those employed in connection A: YES. The completion of the house should be a
with a particular construction project or phase; valid cause for termination of Diosdado’s
and employment, although the employment contract
may not state a particular date.
2. Non-project Ees - those employed by a
construction company without reference to a However, if it did not specify that the termination of
particular project. the parties’ employment relationship was to be on a
“day certain”—the day when the phase of work
NOTE: In the case of Exodus International would be completed—the Ee can be considered to
Construction Corporation v. Guillermo Biscocho, (G.R. have been a regular Ee. (Filipinas Pre-Fabricated
No. 166109, 23 Feb 2011), when one project is Building Systems, v. Puente, G.R. No. 153832, 18 Mar.
completed, Ees were automatically transferred to 2005)
the next project. There was no employment
agreement given to the Ees which clearly spelled out NOTE: To satisfy due process requirements, under
the duration of their employment, the specific work DOLE D.O. No. 19, Series of 1993, the Er is required
2024 GOLDEN NOTES
to report to the relevant DOLE Regional Office the status. (Filipinas Pre-Fabricated Building Systems,
fact of termination of project Ees as a result of the Inc. v. Puente, G.R. No. 153832, 18 Mar. 2005)
completion of the project or any phase thereof in
which one is employed. In the case of Alcatel v. Relos, while the Ee performed
tasks that were clearly vital, necessary, and
Entitlement to Separation Pay indispensable to the usual business or trade of the
company, he was not continuously rehired after the
GR: Project Ees are not entitled to separation pay if cessation of every project.
their services are terminated as a result of the
completion of project. Alcatel did not rehire the Ee until after a lapse of 33
months, for the PLDT 1342 project. Alcatel's
XPN: If the projects they are working on have not yet continuous rehiring of respondent in various
been completed when their services are terminated; capacities was done entirely within the framework
project Ees also enjoy security of tenure during the of one and the same project – the PLDT 1342
limited time of their employment. (De Ocampo v. project. This did not make the Ee a regular Ee of
NLRC, G.R. No. 81077, 06 June 1990) Alcatel as he was not continuously rehired after the
cessation of a project. (Alcatel v. Relos, G.R. No.
Q: Roger Puente was hired by Filsystems, Inc., 164315, 03 July 1999)
initially as an installer and eventually promoted
to mobile crane operator, and was stationed at e. SEASONAL
the company’s premises. Puente claimed in his
complaint for illegal dismissal, that his work was Seasonal Employment
continuous and without interruption for 10
years, and that he was dismissed from his Employment where the job, work, or service to be
employment without any cause. performed is seasonal in nature and the
employment is for the duration of the season. (Sec.
Filsystems on its part averred that Puente was a 5(a), Book VI, Rule I, IRR)
project Ee in the company’s various projects,
and that after the completion of each project, his An employment arrangement where an Ee is
employment was terminated, and such was engaged to work during a particular season on an
reported to the DOLE. Is Roger Puente a regular activity that is usually necessary or desirable in the
Ee? usual business or trade of the Er.
A: NO. Puente is a project Ee. The contracts of NOTE: For Seasonal Ees, their employment legally
employment of Puente attest to the fact that he was ends upon completion of the project or the season.
hired for specific projects. His employment was The termination of their employment cannot and
coterminous with the completion of the projects for should not constitute an illegal dismissal. (Mercado
which he had been hired. Those contracts expressly v. NLRC, G.R. No. 79869, 05 Sept. 1991)
provided that his tenure of employment depended
on the duration of any phase of the project or on the One-year duration on the job is pertinent in deciding
completion of the construction projects. whether a casual Ee has become regular or not, but
Furthermore, the company regularly submitted to it is not pertinent to a Seasonal or Project Ee.
DOLE reports of the termination of services of Passage of time does not make a seasonal worker
project workers. Such compliance with the regular or permanent. (Ibid.)
reportorial requirement confirms that Puente was a
project Ee. During off-season, the relationship of Er-Ee is not
severed; the Seasonal Ee is merely considered on
The mere rehiring of Puente on a project-to-project LOA without pay. Seasonal workers who are
basis did not confer upon him regular employment repeatedly engaged from season to season
performing the same tasks are deemed to have
2024 GOLDEN NOTES
acquired regular employment. (Hacienda Fatima v. store their palay and to have the same milled as the
National Federation of Sugarcane Workers-Food and need arises. Thus, the milling operations are not
General Trade, G.R. No. 149440, 28 Jan. 2003) seasonal.
Seasonal Ees as Regular Ees Finally, considering the number of years that they
have worked, the lowest being six (6) years, the
Seasonal Ees can be considered regular Ees. The fact workers have long attained the status of regular Ees
that Seasonal Ees do not work continuously for one as defined under Art. 295. (Tacloban Sagkahan Rice
whole year but only for the duration of the season Mill v. NLRC, G.R. No. 73806, 21 Mar. 1990)
does not detract from considering them in regular
employment. Seasonal workers who are called to Entitlement to Separation Pay
work from time to time and are temporarily laid off
during off-season are not separated from service in When the business establishment is sold which
that period, but merely considered on leave until re- effectively terminates the employment of the
employed. seasonal Ees, the latter would be entitled to
separation pay.
If the Ee has been performing the job for at least a
year, even if the performance is not continuous and NOTE: “Month pay” shall be understood, in this
merely intermittent, the law deems repeated and regard, as average monthly pay during the season
continuing need for its performance as sufficient they worked. (Abad, Jr., 2015)
evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment f. FIXED-TERM
will be considered regular, but only with respect to
such activity and while such activity exists. (Benares Term Employment
v. Pancho, G.R. No. 151827, 29 Apr. 2005)
A contract of employment for a definite period
It is not enough that they perform work or services terminates by its own terms at the end of such
that are seasonal in nature. They must have also period. (Brent School v. Zamora, G.R. No. L-48494, 05
been employed only for the duration of one season. Feb. 1990)
Q: Carlito Codilan and Maximo Docena had been Term employment is not a circumvention of the law
working for the rice mill for 25 years, while on security of tenure if it follows the requisites laid
Eugenio Go, Teofilo Trangria, and Reynaldo down by the Brent ruling. (Romares v. NLRC, G.R. No.
Tulin have been working for 22, 15, and 6 years 122327, 19 Aug. 1998)
respectively.
The defined period must be a genuine condition of
The operations of the rice mill continue to the job and not merely to avoid regular status of the
operate and do business throughout the year Ee. (Azucena, 2016)
even if there are only two or three harvest
seasons within the year. This seasonal Decisive Determinant in Term Employment
harvesting is the reason why the company
considers the workers as seasonal Ees. Is the It is the day certain agreed upon by the parties for
company correct in considering the Ees as the commencement and the termination of their
seasonal Ees? employment relation.
A: NO. The fact is that big rice mills such as the one
owned by the company continue to operate and do
business throughout the year even if there are only
two or three harvest seasons within the year. It is a
common practice among farmers and rice dealers to
2024 GOLDEN NOTES
Fixed Term Employment the contracts they sign every time they are rehired,
and their employment is terminated when the
It is an employment where a fixed period of contract expires. It is an accepted maritime industry
employment was agreed upon: practice that employment of seafarers is for a fixed
period only.
1. Knowingly and voluntarily by the parties; and
Domestic Seafarers are Not Contractual
2. Without any force, duress or improper Employees
pressure being brought to bear upon the Ee
and business of Er. (Philips Semiconductor v. Seamen employed in domestic shipping are entitled
Fadriquela, G.R. No. 141717, 14 Apr. 2004) to security of tenure, can become permanent Ees,
and can be terminated only for just or authorized
Fixed-Term Employment vs. Project causes. Domestic seafarers are covered by the LC,
Employment including its Book VI.
Both employments are time bound or for a certain Q: Darrell was hired as an athletic director in
period – as agreed upon at the time of engagement. Amorita School for a period of five years. As
However, in project employment, the Ee is tasked to such, he oversees the work of coaches and
do specific undertaking, which is not present in related staff involved in intercollegiate or
fixed-term employment. interscholastic athletic programs. However, he
was not rehired upon the expiration of said
Brent Doctrine period. Darrell questions his termination
alleging that he was a regular Ee and could not
Art. 295 of the LC does not prohibit an employment be dismissed without valid cause.
contract with a fixed period, provided it is entered
into by the parties without any force, duress, or a) Is he a regular Ee?
improper pressure being brought to bear upon
either party, particularly the Ee and absent any A: NO. Darrell is not a regular Ee but an Ee under a
other circumstances vitiating consent; or where it fixed-term contract. While it can be said that the
satisfactorily appears that the Er and Ee dealt with services he rendered were usually necessary and
each other on more or less equal terms with no desirable to the business of the school, it cannot also
moral dominance whatever being exercised by the be denied that his employment was for a fixed term
former over the latter. Such employment for a of five years. The decisive determinant in fixed-term
defined period is allowed even where the duties of employment should not be the activities that the Ee
the Ee consist of activities usually necessary or is called upon to perform, but the day certain agreed
desirable in the usual business of the Er. upon by the parties for the commencement and
termination of their employment relation. (Brent
There can of course be no quarrel with the School Inc. v. Zamora, G.R. No. 48494, 05 Feb. 1990)
proposition that where, from the circumstances, it is
apparent that periods have been imposed to b) Will Darrell automatically become a
preclude acquisition of tenurial security by the Ee, regular Ee if he is rehired by the school
they should be struck down or disregarded as for another definite period of
contrary to public policy, morals, etc. (Brent School, employment?
Inc. v. Zamora, G.R. No. L-48494, 5 Feb. 1990)
A: NO. The decisive determinant in term
Overseas Seafarers are Contractual Employees employment is the day certain agreed upon by the
parties for the commencement and termination of
The employment of overseas seafarers is governed their employment relationship, a day certain being
by the POEA Standard Employment Contract for understood to be that which must necessarily come,
Filipino Seamen. Their employment is governed by although it may not be known when and not
2024 GOLDEN NOTES
whether the work is usually necessary and desirable hired. Lina claims she has been illegally
to the business of the Er. terminated and seeks separation pay. If you
were the Labor Arbiter handling the case, how
Q: Does the “Reasonable Connection Rule” apply would you decide? (2014 BAR)
in fixed term employment for a fixed-term Ee to
be eventually classified as a regular Ee? A: I will dismiss Lina's complaint. Lina is a
contractual Ee, and the length of her employment is
A: NO. It should be apparent that this settled and determined by the contracts she entered. Here, her
familiar notion of a period, in the context of a employment was terminated at the expiration of the
contract of employment, takes no account at all the contract. (Millares, et al. v. NLRC G.R. No. 110524, 29
nature of the duties of the Ee; it has absolutely no July 2002)
relevance to the character of his duties as being
usually necessary and desirable to the usual Use of Seaman’s Book Does Not Detract from
business of the Er, or not. Being Land-Based Workers
Q: Dean Jose and other Ees are holding The employees, Offshore Oilriggers, averred that
administrative positions as dean, department while the company made them use passports for
heads, and institute secretaries. In the overseas contract workers whenever they departed
implementation of the Reorganization, for, and returned from, overseas employment, they
Retrenchment and Restructuring program were also instructed to use their Seaman's Book
effective 01 Jan. 1984, Dean Jose and other Ees upon reaching port for transfer to, and while aboard,
were retired but subsequently rehired. Their the oilrig. The employees claimed that this practice
appointment to their administrative positions entitled them to the benefits granted by law to both
as dean, department heads, and institute land-based workers and seafarers.
secretaries had been extended by the company
from time to time until the expiration of their They have nothing to do with manning vessels or
last appointment on 31 May 1988. Were Dean with sea navigation. Their use of the Seaman's Book
Jose and other Ees illegally dismissed? does not detract from the fact that they are truly
land-based workers. (Agga v. NLRC, G.R. No. 123882,
A: NO. Petitioners were dismissed by reason of the 16 Nov. 1998)
expiration of their contracts of employment.
Petitioners' appointments as dean, department Those Employed in Non-mobile Vessels or Fixed
heads, and institute secretaries were for fixed terms Structures Cannot Be Considered as Filipino
of definite periods as shown by their respective Seafarers
contracts of employment, which all expired on the
same date, May 31, 1988. The validity of A “worker” means any member of the labor force,
employment for a fixed period has been whether employed or unemployed. (Art. 13(a), LC)
acknowledged and affirmed by the SC. (Blancaflor v.
NLRC, G.R. No. 101013, 02 Feb. 1993) A “seaman" as any person employed in a vessel
engaged in maritime navigation. (Art. 13(g), LC)
Q: Lina has been working as a steward with a
Miami, U.S.A.-based Loyal Cruise Lines for the It is implied from the above definition that the
past 15 years. She was recruited by a local capability of a vessel to engage in maritime
manning agency, Macapagal Shipping, and was navigation is crucial in determining whether one
made to sign a 10-month employment contract can be considered as a "seaman" (the term used
every time she left for Miami. Macapagal prior to the more gender-neutral "seafarer") under
Shipping paid for Lina’s round-trip travel the ambit of our LC.
expenses from Manila to Miami. Because of a
food poisoning incident which happened during It must be emphasized that notwithstanding the
her last cruise assignment, Lina was not re- evolution of how the POEA defines a "seafarer," the
2024 GOLDEN NOTES
same should still be read with Art. 13(g) of the LC, Floating Status
which contains the legal definition that may not be
expanded or limited by mere administrative rules or 1. Labor Code
regulations. Indeed, all the definitions mentioned
would all point to the fact that in order to be When Employment not Deemed Terminated
considered a seaman or seafarer, one would have to
be, at the very least, employed in a vessel engaged in The bonafide suspension of the operation of a
maritime navigation. Thus, it is clear that those business or undertaking for a period not
employed in non-mobile vessels or fixed structures, exceeding 6 months, or the fulfillment by the
even if the said vessels/structures are located employee of a military or civic duty shall not
offshore or in the middle of the sea, cannot be terminate employment. In all such cases, the
considered as seafarers under the law. employer shall reinstate the employee to his
former position without loss of seniority rights
Mandatory Remittance of Foreign Exchange if he indicates his desire to resume his work not
Earnings later than one (1) month from the resumption
of operations of his employer or from his relief
It shall be mandatory for all Filipino workers abroad from the military or civic duty. (Art. 301, LC)
to remit a portion of their foreign exchange earnings
to their families, dependents, and/or beneficiaries NOTE: The floating status of an Ee should last
in the country in accordance with rules and only for a legally prescribed period of time.
regulations prescribed by the Secretary of Labor. When that floating status of an Ee lasts for more
than 6 months, he may be considered to have
been illegally dismissed from the service. Thus,
3. RELATED CONCEPTS
he is entitled to the corresponding benefits for
his separation. (Agro Commercial Security
a. FLOATING STATUS Services Agency, Inc. v. NLRC, G.R. Nos. 82823-24,
(Art. 301, LC; DOLE D.O. No. 215-20) 31 July 1989)
An employment is not deemed terminated when: 2. DOLE D.O. 174-17 (Manpower Services)
1. There is a bona fide suspension of the

Effect of Termination of Employment
operation of a business or undertaking for
a period not exceeding six (6) months; or,
Where the termination results from the
expiration of Service Agreement, or from the
2. The fulfilment by the Ee of a military or completion of the phase of the job or work for
civic duty. (Art. 301, LC)
which the employee is engaged, the latter may
opt to wait for re-employment within three (3)
During this period, the Ee is considered on “floating months to resign and transfer to another
status,” which is also known as temporary lay-off,
contractor-employer. Failure of the contractor
temporary off-detail, or temporary retrenchment. to provide new employment shall entitle the
Since the lay-off is only temporary, the employment employee to separation benefits, as may be
status of the Ee is not deemed terminated, but
provided by law or the Service Agreement,
merely suspended. (Dela Cruz v. NLRC, G.R. No. whichever is higher, without prejudice to
119536, 17 Feb. 1997) his/her entitlement to completion bonuses or
other emoluments. Furthermore, the mere
expiration of the Service Agreement shall not be
deemed as a termination of employment of the
contractor’s/subcontractor’s employee, who
are the regular employees of the latter.
2024 GOLDEN NOTES
3. DOLE D.O. No. 150-16 (Private Security guard with work assignment within one (1) month
Guards) after the six-month period.
Reserved Status Q: Loque was hired as a security guard by

Seventh Fleet Security Services, Inc. Loque filed
If after a period of six (6) months, the Security a complaint for constructive dismissal, and
Service Contractor/Private Security Agency argued that since he was placed on floating
cannot provide work or give an assignment to status period of more than six months, he is
the reserved security guard, the latter can be deemed to have been constructively dismissed.
separated from service and shall be entitled to To avoid liability for constructive dismissal,
separation pay. An assignment of the security Seventh Fleet asserted that it had directed Loque
guard and other private security personnel as a "to report to Seventh Fleet's office for posting
reliever for less than one-month shall not be within 48 hours" through the letters dated 14
considered as an interruption of the six (6) May 2014 and 28 May 2014. Seventh Fleet
months period. (Sec. 10.3, DOLE D.O. No. 150-16) faulted Loque for not complying with its
directive. On the other hand, Loque claimed that
NOTE: No security guard and other private he went to Seventh Fleet's office to report for
security personnel can be placed in a workpool work on two occasions — on 19 May 2014 and 11
or on reserved status in any of the following July 2014, but he was barred from entering the
situations: premises of Seventh Fleet. The Labor Arbiter
found Seventh Fleet guilty of illegal constructive
a. After expiration of a service agreement, dismissal. The NLRC reversed the ruling of the
if there are other principals where LA and held that placing Loque on floating status
he/she can be assigned; was a valid exercise of Seventh Fleet's
management prerogative. Is the NLRC correct?
b. As a measure to constructively dismiss
the security guard; and A: NO. While there is no specific provision in the LC
governing the "floating status" or temporary "off-
c. As an act of retaliation for filing any detail" of Ees, the Court, applying Art. 286 (now Art.
complaint against the employer for 301) of the LC by analogy, considers this situation as
violation of labor laws, among others. a form of temporary retrenchment or lay-off.
Conformably with Art. 301, the placement of an Ee
Reinstatement of Ee on Floating Status on "floating status" must not exceed six months.
Otherwise, the Ee may be considered constructively
The Er may suspend business operations or the Ee dismissed. The burden of proving that there are no
may be relieved on the performance of his work posts available to which the security guard can be
when there is a need to perform civic or military assigned rests on the Er. However, the mere lapse of
duty, provided that the period in both instances six months in "floating status" should not
should not last for a period beyond six (6) months. automatically result to constructive dismissal. The
After the Er has resumed operations of the Ee has peculiar circumstances of the Ee's failure to assume
fulfilled his civic or military duty, then he must be another post must still be inquired upon.
recalled to work within a month. Otherwise, the Ee
shall be considered terminated, and the Er will have In this case, Seventh Fleet was not able to show that
to pay separation pay. Loque was not barred from entering its premises.
The letters sent by Seventh Fleet to Loque are in the
NOTE: If the Er does not pay him separation pay, nature of general return to work orders. Such
then that will amount to constructive dismissal. general return to work orders will not absolve
Seventh Fleet since jurisprudence requires not only
Floating status cannot last beyond 6 months. After 6 that the Ee be recalled to the agency's office, but that
months, the Er must be able to provide the security the Ee be deployed to a specific client before the
2024 GOLDEN NOTES
lapse of six months. Considering that Loque was Suspension of Employment Relationship
placed on floating status for more than six months
without being deployed to a specific assignment, The employer-employee relationship shall be
and that the letters sent by Seventh Fleet are bereft deemed suspended in case of suspension of
of any reference to any specific client or indication operation of the business or undertaking of the
that he would be assigned to a specific client, Loque employer for a period not exceeding six (6) months,
is therefore deemed constructively dismissed. It unless the suspension is for the purpose of defeating
follows then that Loque could not have abandoned the rights of the employees under the Code, and in
his employment with Seventh Fleet, for case of mandatory fulfillment by the employee of a
abandonment is incompatible with constructive military or civic duty. The payment of wages of the
dismissal. (Seventh Fleet Security Services, Inc. v. employee as well as the grant of other benefits and
Loque, G.R. No. 230005, 22 Jan. 2020) privileges while he is on suspended employment or
on a military or civic duty shall be subject to existing
Q: Juan was alleged to have made disrespectful laws and decrees and to the applicable individual or
remarks to a superior Ee in TelTel business collective bargaining agreement and voluntary
process outsourcing company. He was placed in employer practice or policy.
preventive suspension. A company investigation
was conducted and found that Juan is not liable. In case of declaration of war, pandemic and similar
However, he was moved to another position on national emergencies, the employer and the
another branch but eventually told to go back employees, through the union, if any, or with the
again to the original branch. But this time, he assistance of the department of labor and
was told that the company still needed to find an employment, shall meet in good faith for the
account for him. He was told that he was purpose of extending the suspension of
considered as a “floater” and he will not get paid employment for a period not exceeding six (6)
unless his floating status has been lifted. In his months: provided, that the employer shall report to
desire to keep his job and to receive his salary, the department of labor and employment, through
Juan exhausted his earned vacation leaves. Juan the regional offices, the extension of suspension of
alleged that he had been constructively employment ten (10) days prior to the effectivity
dismissed. Is TelTel correct? thereof subject to inspection; provided, however,
that the employees shall not lose employment if
A: NO. The floating status principle does not find they find alternative employment during the
application in the instant case. While it may be extended suspension of employment except in cases
argued that the nature of the call center business is of written, unequivocal and voluntary resignation;
such that it is subject to seasonal peaks and troughs provided further, that should retrenchment be
because of client pullouts, changes in clients' necessary before or after the expiration of the
requirements and demands, and a myriad other extension of suspension of employment, the
factors, still, the necessity to transfer Juan to affected employee shall be entitled to separation
another practice/account does not depend on pay as prescribed by the labor code, company
TelTel's third party-client/contracts. When the policies or collective bargaining agreement,
controversy arose, TelTel had several clients in its whichever is higher; provided, finally, that the
roster to which it can easily assign Juan as Quality retrenched employees shall have priority in the re-
Analyst without any hindrance. (Telus International hiring if they indicate their desire to resume their
Philippines, Inc And Michael Sy v. Harvey De Guzman, work not later than one (1) month from the
G.R. No. 202676, 04 Dec. 2019) resumption of operations.
This notwithstanding, by mutual agreement of the

employer and the employees, through the union, if
any, or with the assistance of the department of
labor and employment, employees may be recalled
to work or retrenched subject to the requirement of
2024 GOLDEN NOTES
notice and separation pay, anytime before the obligation is void. Art. 1182 of the Civil Code of the
expiration of the extension of suspension of Philippines reads: “When the fulfillment of the
employment. condition depends upon the sole will of the debtor,
the conditional obligation shall be void. If it depends
The extension of suspension of employment shall upon chance or upon the will of a third person, the
not affect the right of the employees to separation obligation shall take effect in conformity with the
pay. The first six (6) months of suspension of provisions of this Code.”
employment shall be included in the computation of
the employees' separation pay. (Sec. 12, DOLE D.O. In this regard, the Supreme Court stressed in
No. 215-20) Romero v. CA (G.R. No. 107207, 23 Nov. 1995): “We
must hasten to add, however, that where the so-
b. EMPLOYMENT SUBJECT TO A SUSPENSIVE called "potestative condition" is imposed not on the
CONDITION birth of the obligation but on its fulfillment, only the
condition is avoided, leaving unaffected the
Void Potestative Condition obligation itself.
In Gemudiano, Jr. v. Naess Shipping Philippines, Inc. Clearly, the condition set forth in the Addendum is
(G.R. No. 223825, 20 Jan. 2020), the Addendum to the one that is imposed not on the birth of the contract
contract of employment provides: "the employment of employment since the contract has already been
relationship between the Employer on one hand and perfected, but only on the fulfillment or
the Seaman on the other shall commence once the performance of their respective obligations, i.e., for
Master has issued boarding confirmation to the the seafarer to render services on board the ship
seaman." and for the shipowners to pay him the agreed
compensation for such services. A purely
Relying on this provision, the shipowners insist that potestative imposition, such as the one in the
there is no employer-employee relationship Addendum, must be obliterated from the face of the
between them and the seafarer and that the labor contract without affecting the rest of the
arbiter had no jurisdiction over the seafarer's stipulations considering that the condition relates
complaint. True, the parties to a contract are free to to the fulfillment of an already existing obligation
adopt such stipulations, clauses, terms and and not to its inception.
conditions as they may deem convenient provided
such contractual stipulations should not be contrary Moreover, the condition imposed for the
to law, morals, good customs, public order or public commencement of the employment relations
policy. But such is not the case here. offends the principle of mutuality of contracts
ordained in Art. 1308 of the Civil Code which states
The stipulation contained in the Addendum is a that contracts must bind both contracting parties,
condition which holds in suspense the performance and its validity or compliance cannot be left to the
of the respective obligations of the seafarer and the will of one of them. The Supreme Court is thus
shipowners under the contract of employment, or constrained to treat the condition as void and of no
the onset of their employment relations. It is a effect, and declare the respective obligations of the
condition solely dependent on the will or whim of parties as unconditional. Consequently, the
the shipowners since the commencement of the employer-employee relationship between the
employment relations is at the discretion or seafarer and the shipowners should be deemed to
prerogative of the latter's master of the ship through have arisen as of the agreed effectivity date of the
the issuance of a boarding confirmation to the contract of employment.
seafarer. The Supreme Court in Naga Telephone Co.,
Inc. v. CA (G.R. No. 107112, 24 Feb. 1994), referred to
this kind of condition as a "potestative condition,"
the fulfillment of which depends exclusively upon
the will of the debtor, in which case, the conditional
2024 GOLDEN NOTES
exercise of the right to self-organization, security of
B. LEGITIMATE CONTRACTING VS. LABOR-ONLY tenure, and social welfare benefits. (Petron
CONTRACTING Corporation v. ARMZ Caberte, G.R. No. 182255, 15
(Arts. 106-109, LC; DOLE D.O. No. 174-17; DOLE June 2015)
D.C. No. 01-17; E.O. No. 51, Series of 2018)
Substantial Capital
It refers to paid-up capital stocks/shares of at least

LEGITIMATE LABOR-ONLY
P5 Million in the case of corporations,
SUBCONTRACTING CONTRACTING
partnerships, and cooperatives. P5 Million net
1. The contractor or worth in the case of a single proprietorship. (Sec.
subcontractor carries 3(L), DOLE D.O. No. 174 s. 2017)
on a distinct and
independent business The law does not require both substantial capital
and undertakes to and investments, it is sufficient that either of the
perform the job, work two is complied with. (Neri v. NLRC, G.R. Nos.
or service on its own 97008-09, 23 July 1993)
1. The contractor or
account and under its
subcontractor does not
own responsibility Burden of proof to prove that he/it has substantial
have substantial
according to its own capital or investment rests on the contractor
capital or investment
manner and method, himself. (Guarin v. NLRC, G.R. No. 86010, 03 Oct.
to perform the job,
and free from the 1989)
work or service under
control and direction
its own account and
of the principal in all NOTE: In legitimate Job Contracting, the principal
responsibility; and
matters connected is jointly and severally liable with the contractor
with the performance for the payment of unpaid wages. (Arts. 106, 107 &
2. The Ees recruited,
of the work except as to 10, LC)
supplied, or placed by
the results thereof;
such contractor or
subcontractor are Independent Contractor
2. The contractor or
performing activities
subcontractor has An independent contractor is one who carries on a
which are directly
substantial capital or distinct and independent business and undertakes
related to the main
investment; and to perform the job, work, or service on their own
business of the
principal. (Sasan v. account and under their own responsibility
3. The Service according to their own manner and method, free
NLRC, G.R. No. 176240,
Agreement ensures from the control and direction of the principal in all
17 Oct. 2008)
compliance with all the matters connected with the performance of the
rights and benefits for work except as to the results thereof. (Chavez v.
all the Ees of the NLRC, G.R. No. 146530, 17 Jan. 2005.)
contractor or
subcontractor under NOTE: Independent contractors often present
the labor laws. (Sec. 8, themselves to possess unique skills, expertise, or
D.O. No. 174, s. 2017) talent to distinguish them from ordinary Ees. (Sonza
v. ABS-CBN, G.R. No. 138051, 10 June 2004)
Legitimate Subcontracting
When hired by reason of her peculiar talents, skills,
The agreement between the principal and the personality, and celebrity status proved the
contractor or subcontractor assures the presence of one of the elements of an independent
contractual Ees' entitlement to all labor and contractor. (Tiangco v. ABS-CBN Broadcasting
occupational safety and health standards, free Corporation, G.R No. 200432 Dec. 6, 2021)
2024 GOLDEN NOTES
Employee vs. Independent Contractor
An independent contractor is not under the
compulsory coverage of the SSS. He may be covered INDEPENDENT
EMPLOYEE
as a self-employed person (Sec. 8(j), RA 11199) CONTRACTOR
As to their Existence
Indirect or Statutory Employer
Existence of an
One who enters a contract with an independent Existence of an Er-Ee Independent
contractor for the performance of any work, task, relationship is Contractorship is
determined by law. determined by the
job, or project not directly related to the Er’s
business. (Baguio v. NLRC, G.R. Nos. 79004-08, 04 Oct. contract.
1991) As to the Exercise of Control
Er exercises the right
NOTE: No Er-Ee relationship exists between the of control not only the
owner of the project and the Ees of the independent Only the result of their
end achieved, but also
contractor. (Baguio v. NLRC, G.R. Nos. 79004-08, 04 work is subject to the
to manner and means
Oct. 1991) The principal Er is considered only an Er’s control.
used to achieve that
indirect Er. (PCI Automation Center, Inc. v. NLRC, G.R. end.
No. 115920, 29 Jan. 1996)
As to Wages
What is contracted is the performance and Payment given to an

completion of a designated job, and not just the Wages should comply independent
supplying of people to do the job. with the minimum contractor is
wage established by compensation that is
Major Laws Applicable to Work Relationship the law. agreed upon in the
contract.
1. Between the Principal and Contractor – The
Civil Code and pertinent Commercial Laws As to Payment of Contributions
2. Between Contractor and his Ees – the Labor Er is required to pay

The independent
Code and Special Labor Laws. for Ee’s contributions,
contractor pays for his
such as Pag-IBIG,
own contribution.
NOTE: Between the principal and the contractor’s PhilHealth, and SSS.
Ees, no Er-Ee relationship exists; the contractor,
being himself a businessman, is the Er. But the As to Termination
contractor may in turn become a contractee if he
contracts with a contractor. Ee may be terminated Other valid grouds may
only due to reasons be indicated in the
Er-Ee relationship may be declared to exist between stated in the LC. contract.
the principal and the contractor’s workers where
the contracting arrangement is not legitimate.
Labor-Only Contracting (LOC)
It refers to an arrangement where the contractor,

who does not have substantial capital or investment
in the form of tools, equipment, machineries, work
premises, among others, supplies workers to an Er
and the workers recruited are performing activities
which are directly related to the principal business
of such Er. (Art. 106, LC)
2024 GOLDEN NOTES
right to control the performance of the employees'
It is a prohibited act, an arrangement where the work
contractor or subcontractor merely recruits,
supplies, or places workers to perform a job, work Here, the only evidence on record to support PPI
or service for a principal. and CBMI's claim of legitimate job contracting
are the certificates of registration, financial
NOTE: In labor-only contracting, there is really no statements, and service agreements. But the
contracting and no contractor. There is only a Court had consistently ruled that a certificate of
representative to gather and supply people to the registration as an independent contractor is not
principal. (Azucena, 2016) conclusive evidence of such status. Such
registration merely prevents the legal
A finding that a contractor is a “labor-only” presumption of being a labor-only contractor
contractor is equivalent to declaring that there is an from arising. The financial statements presented
Er-Ee relationship between the principal and the to prove that CBMI had substantial capital
Ees of the “labor-only” contractor. (San Miguel Corp. likewise did not suffice to classify it as an
v. MAERC Integrated Systems, G.R. No. 144672, 10 July independent contractor. Consequently, PPI and
2003) CBMI are solidarily liable for A’s illegal dismissal
and monetary claims. (Rico Pali Conjusta v. PPI
NOTE: A finding that a contractor is a labor-only Holdings, Inc., G.R. No. 252720, 22 August 2022, as
contractor, as opposed to permissible job penned by J. M.V Lopez)
contracting, is equivalent to declaring that there is
an Er-Ee relationship between the principal and the Confirming Elements
Ees of the supposed contractor, and the labor-only
contractor is considered as a mere agent of the To have labor-only contracting, the essential
principal, the real Er. (Allied Banking Corporation v. element of supplying workers to another is not
Reynold Calumpang, G.R. No. 219435, 17 Jan. 2018) enough. To it must be added either one of two
confirming elements:
Q: A was hired by PPI Holdings but whose
employment was later transferred to CBMI, a 1. Lack of substantial capital or investment and
manpower agency. CMBI eventually terminated performance of activities directly related or
A after 14 years of service. A then filed an illegal usually necessary or desirable to the principal’s
dismissal case against PPI, arguing that he was a main business; or
regular employee for the aforementioned
duration. Was A the direct employer of Conjusta? 2. The contractor does not exercise control over
the performance of the Ees. (Azucena, 2016)
A: NO. CBMI is a labor-only contractor, thus
considered as a mere agent of PPI, which in turn was NOTE: If the essential element is absent, there can
deemed to be A employer. The following must be be no LOC. And even if the essential element is
considered in determining whether CBMI was a present, but confirming element one or two is
legitimate job contractor or was engaged in labor- absent, there is still no LOC. (Azucena, 2016)
only contracting: (a) registration with the proper
government agencies; (b) existence of substantial Trilateral Relationship
capital or investment; (c) service agreement that
ensures compliance with all the rights and benefits In legitimate contracting, there exists a trilateral
under labor laws; (d) nature of the activities relationship under which there is a contract for a
performed by the employees, i.e., if they are usually specific job, work or service between the principal
necessary or desirable to the operation of the and the contractor or subcontractor, and a contract
principal 's company or directly related to the main of employment between the contractor or
business of the principal within a definite subcontractor and its workers. (Azucena, 2016)
predetermined period; and (e) the exercise of the
2024 GOLDEN NOTES
work except as to the result thereto; and
NOTE: There is no employer-employee relationship
between the contractor and principal who engages 4. The Service Agreement ensures compliance
the contractor’s services, but there is an employer- with all the rights and benefits for all the
employee relationship between the contractor and employees of the contractor or subcontractor
workers hired to accomplish the work for the under the labor laws.
principal.
Bilateral Relationship
There are three parties involved in these
arrangements: Jurisprudence has recognized another kind of
independent contractor: individuals with unique
1. Principal (Contractee) – It refers to any Er, skills and talents that set them apart from ordinary
whether a person or entity, including employees. There is no trilateral relationship in this
government agencies and government-owned case because the independent contractor himself or
and controlled corporations, who/which puts herself performs the work for the principal. In other
out or farms out a job, service, or work to a words, the relationship is bilateral. (Fuji Television
contractor. Network, Inc. v. Espiritu, G.R. Nos. 204944-45, 03 Dec.
2014)
2. Contractor or subcontractor – It refers to any
person or entity, including a cooperative, Other Examples of Independent Contractor
engaged in a legitimate contracting or
subcontracting agreement providing either 1. Columnist (Orozco v. Court of Appeals, G.R. No.
services, workers or combination of services to 155207, 13 Aug. 2008)
a principal under a Service Agreement;
2. Masiador and Sentenciador (Semblante v. Court
3. Contractual workers – Includes one employed of Appeals, G.R. No. 196426, 15 Aug 2011)
by a contractor to perform or complete a job,
work or service pursuant to a Service 3. Basketball referees (Bernarte v. Philippine
Agreement with a principal. (DOLE D.O. No. 174 Basketball Association, G.R. No. 192084, 14 Sept.
s. 2017) 2011)
Factors for a Contractor to be Considered as a Contractor or Subcontractor to Furnish a Bond

Legitimate Job Contractor
An Er or indirect Er may require the contractor or
1. The contractor or subcontractor is engaged in a subcontractor to furnish a bond equal to the cost of
distinct and independent business and labor under contract, on the condition that the bond
undertakes to perform the job or work on its will answer for the wages due the Ees should the
own responsibility, according to its own manner contractor or subcontractor fail to pay the same.
and method; (Art. 107, LC)
2. The contractor or subcontractor has substantial NOTE: Where the Er fails to require the posting of
capital to carry out the job farmed out by the the bond, he must be liable for whatever the
principal on his account, manner and method, contractor may have incurred to his Ees, without
investment in the form of tools, equipment, prejudice to its right of reimbursement from the
machinery and supervision; contractor for whatever amount paid. (Baguio v.
NLRC, G.R. Nos. 79004-08, 04 Oct. 1991)
3. In performing the work farmed out, the
contractor or subcontractor is free from the
control and/or direction of the principal in all
matters connected with the performance of the
2024 GOLDEN NOTES
Job Contracting vs. Labor-Only Contracting Constructors Accreditation Board (PCAB) of the
Construction Industry Authority of the
LABOR-ONLY Philippines (CIAP).
JOB CONTRACTING
CONTRACTING
3. Private Security Agency - Except for the
The Er or principal is registration requirement as provided in DO No.
treated as direct Er of 174, s. 2017, contracting or subcontracting
The Er or principal is
the contractor’s Ees in arrangement in the private security industry
merely an indirect Er,
all instances. shall be governed by DO No. 150, s. 2016.
by operation of law, of
his contractor’s Ees.
(Contractor = agent of 4. Other Contractual Relationships – DOLE D.O.
the Er) No. 174. s. 2017 does not contemplate to cover
contractual relationship such as in contract of
sale or purchase, contract of lease, contract of
The statute creates an
The law creates an Er- carriage, contract growing or growership
Er-Ee relationship for a
Ee relationship for a agreement, toll manufacturing, contract of
comprehensive
limited purpose. management, operation and maintenance, and
purpose.
such other contracts governed by the NCC and
special laws.
The principal becomes The principal becomes
solidarily liable. The solidarily liable with Extent of Er’s Liability in Invalid Contracting
liability, however, does the contractor not only
not extend to the for unpaid wages but Where the contracting is found to be labor-only
payment of backwages also for all the rightful contracting, the liability is immediately and directly
or separation pay of claims of the Ees under imposed upon the principal. The principal
Ees who are illegally the Labor Code and shoulders all the obligations of an Er, not just the
dismissed. ancillary laws. payment of wages. The liability becomes direct and
total as that of a directly hiring Er.
Allowed by law Prohibited by law
Extent of Principal’s Liability in Legitimate
Presence of substantial Absence of substantial Contracting
capital or investment. capital or investment.
The contractor or subcontractor shall be considered
the Er of the contractual Ee for purposes of
DOLE D.O. No. 174 s. 2017 enforcing the provisions of the LC and other social
legislation.
It is not applicable to trilateral relationship which
characterizes contracting or subcontracting The principal shall be solidarily liable with the
arrangement. Including: contractor in the event of any violation of any
provisions of the Labor Code, including the failure to
1. BPO/KPO - It does not contemplate to cover pay wages. (D.O. No. 18-02)
information-technology enabled services
involving an entire or specific business process Wages and Money Claims
such as Business Process Outsourcing (BPO) or
Knowledge Process Outsourcing (KPO). (DOLE If the contractor or subcontractor fails to pay the
D.O. No. 01, s. 2017) wages of his Ees in accordance with the Code, the Er
shall be jointly and severally liable with the
2. Construction Industry - Licensing and exercise contractor or subcontractor to such Ees to the
of regulatory powers over the construction extent of the work performed under the contract, in
industry is lodged with the Philippine
2024 GOLDEN NOTES
the same manner and extent that he is liable to Ees workforce of 2,000 workers who make different
directly employed by him. (Art. 107, LC) lanterns daily for the whole year. Because of
increased demand, Star Crafts entered into a
NOTE: Where no Er-Ee relationship exists between contractual arrangement with People Plus, a
the parties and no issue is involved which may be service contractor, to supply the former with I 00
resolved by reference to the Labor Code, other labor workers for only 4 months, August to November,
statutes or any collective bargaining agreement, it is at a rate different from what they pay their
the Regional Trial Court that has jurisdiction. regular employees. The contract with People
Plus stipulates that all equipment and raw
Other Violations materials will be supplied by Star Crafts with the
express condition that the workers cannot take
The court has interpreted the liability of the any of the designs home and must complete
principal under Art. 109 as a qualified or limited their tasks within the premises of Star Crafts.
liability. Is there an employer-employee relationship
between Star Crafts and the 100 workers from
Liability People Plus? Explain. (2015 BAR)
1. For failure to pay the minimum wage or the A: YES. People Plus is a labor-only-contractor
service incentive leave or other benefits – because it is not substantially capitalized. Neither
The principal is equally liable with the does it carry on an independent business in which it
contractor as if the principal were the direct Er. uses its own investment in the form of tools,
equipment, machineries or work premises. Hence, it
2. With punitive character – Such as an award is just an agent or recruiter of workers who perform
for backwages and separation pay because of work directly related to the trade of Star Crafts.
an illegal dismissal of the contractor’s Ee, the Since both the essential element and the conforming
liability should be solely that of the contractor, element of labor-only contracting are present, Star
in the absence of proof that the principal Crafts becomes the employer of the supplied
conspired with the contractor in the worker.
commission of the illegal dismissal.
As principal, Star Crafts will always be an employer
NOTE: The contractor’s liability for underpaid in relation to the workers supplied by its contractor.
wages and unpaid overtime work could be enforced Its status as employer is either direct or indirect
against the surety bond posted by the contractor as depending on whether the contractor is legitimate
required by the principal. The law’s aim in imposing or not. Thus, even if People Plus were a legitimate
indirect liability upon the principal is to assure job contractor, still Star Crafts will be treated as a
payment of monetary obligations to the workers. statutory employer for purposes of paying the
This aim is accomplished through the principal’s workers’ unpaid wages and benefits.
requiring the posting of a bond. After satisfying from
the bond the unpaid wages and overtime pay, the NOTE: A labor-only contractor is not substantially
contractor cannot recover from the principal if the capitalized and does not carry on an independent
principal has already handed over to the contractor business in which it uses its own investment in the
the amount covering the wages, or the pay increase form of tools, equipment, machineries or work
mandated by a wage order. (Rosewood Processing, premises. (Art. 106, LC)
Inc. v. NLRC, G.R. Nos. 116476-84, 21 May 1998)
Q: Star Crafts is a lantern maker based in

Pampanga. It supplies Christmas lanterns to
stores in Luzon, Metro Manila, and parts of
Visayas, with the months of August to November
being the busiest months. Its factory employs a
2024 GOLDEN NOTES
argued that Mrs. B did not avail of any service
IV. LABOR STANDARDS incentive leave at the end of her one (1) year of
service and hence, not entitled to the said
monetary claim. Assuming that Mrs. B is instead
a clerk in X's company with at least 30 regular
employees, will her monetary claim prosper?
A. CONDITIONS OF EMPLOYMENT Explain. (2019 BAR)
A: YES. The money claim will prosper. A clerk is not

1. COVERED EMPLOYEES; EXCEPTIONS one of those exempt employees under Art. 82 of the
(Art. 82, LC; Secs. 1-2, Rule I, Book III, Omnibus Labor Code. It shall apply to employees in all
Rules Implementing the Labor Code) establishments and undertakings whether for profit
or not, but not to government employees,
managerial employees, field personnel, members of
GR: Title I, Book III of the LC deals with hours of
the family of the employer who are dependent on
work, weekly rest periods, holidays, service
him for support, domestic helpers, persons in the
incentive leaves and service charges. It covers all Ees
personal service of another, and workers who are
in all establishments, whether for profit or not. (Art.
paid by results as determined by the SOLE in
82, LC)
appropriate regulations. (Art. 82, LC)
XPNs: (G-F-M-O-M-P-W-D)
Government Employees
1. Government Ees;
2. Field personnel;
The terms and conditions of their employment are
3. Managerial Ees;
governed by the Civil Service Law.
4. Officers and members of the managerial staff;
5. Members of the family of the Er who are
In case of GOCCs with original charters, terms and
dependent on him for support;
conditions of employment may be governed by such
6. Persons in the personal service of another; and
legislated charters. Whereas, GOCCs without
7. Workers paid by results(Secs. 1 and 2, Rule I,
original charters and created under the Corporation
Book III, IRR); and
Code are governed by the LC. (Poquiz, 2012)
8. Domestic helpers.
Managerial Employees
The aforementioned Ees are not entitled to overtime
pay, premium pay for rest days and holidays, night
A managerial Ee is one who is vested with powers or
shift differential pay, holiday pay, service incentive
prerogatives to lay down or execute management
leave, and service charges. (Poquiz, 2012)
policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline Ees, or to
Q: Mrs. B, the personal cook in the household of
effectively recommend such managerial actions. All
X, filed a monetary claim against her employer,
Ees not falling within this definition are considered
X, for denying her service incentive leave pay. X
rank and file Ees. (PMTI-ULGWF v. Ferrer-Calleja, G.R.
No. 85915, 17 Jan. 1990) 3. They have the authority to hire or fire Ees of
lower rank; or their suggestions and
1. Their primary duty consists of the management recommendations as to hiring and firing and as
of the establishment in which they are to the promotion or any other change of status
employed or of a department or subdivision of other Ees, are given particular weight. (Sec.
thereof; 2(b), Rule I, Book III, IRR)
2. They customarily and regularly direct the work They are employed as such by virtue of their special
of two or more Ees therein; and training or expertise, experience or knowledge and
2024 GOLDEN NOTES
for positions which require the exercise of
independent judgment and discretion. They are not Managerial Employees under Art. 82(2) vs. Art.
subject to the rigid observance of regular office 212(m)
hours, as the true worth of their services do not
depend so much on the time they spend in office, but ART. 82(2), BOOK III, ART. 212(M), BOOK V,
more on the results of their accomplishments. For LABOR STANDARDS LABOR RELATIONS
these types of workers, it is not feasible to provide As to definition
fixed hourly rate of pay or maximum hours of labor.
Those whose primary
(UPSU v. Laguesma, G.R. No. 122226, 25 Mar. 1998)
duty consists of the Vested with the powers
management of the or prerogative to lay
Officers or Members of Managerial Staff
establishment in which down and execute
they are employed or management policies,
1. Their primary duty consists of the performance
of a department or and/or to hire, transfer,
of work directly related to management policies
subdivision thereof, suspend, lay-off, recall,
of their Er;
and to the other discharge, assign, or
officers or members of discipline Ees.
2. They customarily and regularly exercise
the managerial staff.
discretion and independent judgment;
As to application
3. They regularly and directly assist a proprietor
or a managerial Ee whose primary duty consists Used only for purposes
Used only for purposes
of the management of the establishment in of Book V (i.e., forming,
of Book III (i.e.,
which he is employed or subdivision thereof; or joining and assisting of
working conditions,
execute under general supervision work along unions, certification
rest periods, and
specialized or technical lines requiring special election, and, collective
benefits)
training, experience, or knowledge; or execute, bargaining)
under general supervision, special assignments,
As to inclusion of supervisors
and tasks; and
Supervisors are
members of the
4. They do not devote more than 20% of their Supervisors are not
managerial staff. In
hours worked in a work week to activities which managerial Ees under
effect, supervisor is a
are not directly and closely related to the Book V. (Azucena, 2016)
manager for purposes
performance of the work described above. (Sec.
of Book III.
2(c), Rule I, Book III, IRR)
Domestic Servants or Persons in the Personal

NOTE: Officers and members of a managerial staff
Service of Another
(such as project engineers) are considered
managerial Ees for they customarily and regularly
1. Perform such services in the Er's home which
exercise discretion and independent judgment, that
are usually necessary or desirable for the
is, their powers are not subject to evaluation, review
maintenance and enjoyment thereof; or
and final action by the department heads and other
higher executives of the company. (Franklin Baker
2. Minister to the personal comfort, convenience,
Co. of the Philippines v. Trajano, G.R. No. 75039, 28
or safety of the Er as well as the members of his
Jan. 1988)
Er's household. (Sec. 2(d), Rule I, Book III, IRR)
Test of Supervisory or Managerial Status
NOTE: They are not covered by this Title because
terms and conditions of employment are governed
It depends on whether a person possesses authority
by the provisions of R.A. No. 10361, otherwise
that is not merely routinary or clerical in nature but
one that requires use of independent judgement.
2024 GOLDEN NOTES
known as the Batas Kasambahay or Domestic Rule in Case of Drivers/Bus Conductors
Workers Act.
It is of judicial notice that along the routes that are
A laundrywoman in staff houses of a company or plied by these bus companies, there are its
within the premises of the business of the Er, not inspectors assigned at strategic places who board
actually serving the family of the Er, is a regular Ee. the bus and inspect the passengers, the punched
She is not included in the definition of domestic tickets, and the conductor's reports. There is also
servants. (Apex Mining Co. Inc. v. NLRC, G.R. No. the mandatory once-a-week car barn or shop day,
94951, 22 Apr. 1991) where the bus is regularly checked as to its
mechanical, electrical, and hydraulic aspects,
Field Personnel whether or not there are problems thereon as
reported by the driver and/or conductor. They too,
Field personnel refer to non-agricultural Ees who: must be at specific places at specified times, as they
generally observe prompt departure and arrival
1. Regularly perform their duties away from the from their point of origin to their point of
principal place of business or branch office of destination. In each and every depot, there is always
the Er; and the dispatcher whose function is precisely to see to
it that the bus and its crew leave the premises at
2. Whose actual hours of work in the field cannot specific times and arrive at the estimated proper
be determined with reasonable certainty. (Sec. time. He cannot be considered field personnel.
2(d), Rule I, Book III, IRR) (Autobus Transport System, Inc. v. Bautista, G.R. No.
156367, 16 May 2005)
They are exempted from the coverage due to the
nature of their functions which requires Members of the Family
performance of service away from the principal
place of business. Hence, they are free from the They are exempted from the coverage, for the
personal supervision of the Er and the latter cannot support given by the Er may exceed the benefit for
determine with reasonable certainty the actual which an Ee is entitled under appropriate labor
number of hours of work expended for the Er's provisions. To cover them under Art. 82 may create
interest. labor problems that would eventually break-up the
family, which is the evil sought to be prevented.
The definition of a "field personnel" is not merely (Poquiz, 2012)
concerned with the location where the Ee regularly
performs his duties but also with the fact that the Two Categories of Workers Paid by Results
Ee’s performance is unsupervised by the Er. In order
to conclude whether an Ee is a field Ee, it is also 1. Those whose time and performance are
necessary to ascertain if actual hours of work in the supervised by the Er; and
field can be determined with reasonable certainty
by the Er. In so doing, an inquiry must be made as to NOTE: Here, there is an element of control and
whether or not the Ee’s time and performance are supervision over the manner as to how the
constantly supervised by the Er. (Autobus Transport work is to be performed. A piece-rate worker
Systems Inc. v. Bautista, G.R. No. 156367, 16 May belongs to this category especially if he
2005) performs his work in the company premises.
e.g., Outside sales personnel, agents on commission 2. Those whose time and performance are
basis, or insurance field agents (San Miguel Brewery, unsupervised.
Inc. v. Democratic Labor Union, G.R. No. L-18353, 31
July 1963); meter readers, medical representatives. NOTE: Here, the Er control is over the result of
(Duka, 2016) the work. Workers on “pakyao” and “takay”
2024 GOLDEN NOTES
basis belong to this group. (Lambo v. NLRC, G.R. 2. Compressed workweek (CWW) – An
No. 111042, 26 Oct. 1999) alternative arrangement whereby the normal
workweek is reduced to less than six (6) days
Payment of this type of worker is determined by but the total number of normal work hours per
the results of the work performed or the week shall remain at forty-eight (48) hours. The
number of units produced, not the number of normal workday is increased to more than eight
hours used in the completion of the job, or the (8) hours without corresponding overtime
time spent in production. (Poquiz, 2012) premium. (D.O. No. 02-04, s. 2004)
Tailors and similar workers hired in the NOTE: Department Orders providing for maximum
tailoring establishment, although paid weekly hours of work for bus drivers, movie workers, sea
wages on piece-work basis, are Ees and not farers, where there is a compressed work week
independent contractors, and accordingly, as arrangement in place, and children Ees are also
regular Ees paid on piece-rate basis, they are subjected to a maximum number of work hours per
not entitled to overtime pay, holiday pay, day.
premium pay for holiday/rest day, and service
incentive leave pay. (Villuga v. NLRC, G.R. No. Rationale of the EIGHT (8)-Hour Labor
75038, 23 Aug. 1993)
1. To safeguard the health and welfare of the
An Ees who are engaged on a task or contract laborer;
basis, purely commission basis, or those paid by
results, are not automatically excluded by that 2. To minimize unemployment by utilizing
fact alone. To be excluded, the Ee must also fall different shifts; (Manila Terminal Co., Inc. v. CIR,
under the classification of field personnel. G.R. No. L-4148, 16 July 1952) and
3. To afford the Ees adequate time to lead richer

2. HOURS OF WORK
and more fruitful, meaningful lives and to be
able to participate intelligently in public
a. NORMAL HOURS OF WORK concerns.
(Arts. 83-84, LC; Secs. 3-4, Rule I, Book III,
Omnibus Rules Implementing the Labor Code)
NOTE: Normal hours of work may be shortened or
compressed. Neither does it follow that a person
GR: The normal hours of work of any Ee shall not
who does not observe normal hours of work cannot
exceed eight (8) hours a day. (Art. 83, LC)
be deemed an Ee.
NOTE: There is no hard limit on the maximum hours

In Cosmopolitan Funeral Homes, Inc. v. Maalat (G.R.
of work that may be rendered by an Ee. However,
No. 86693, 02 July 1990), the Er similarly denied the
work rendered beyond the eight-hour limit would existence of an Er-Ee relationship, as the claimant
not be considered normal. It would be overtime, and
according to it, was a "supervisor on commission
thus subject to additional pay to entitled Ees. basis" who did not observe normal hours of work.
The SC declared that there was an Er-Ee
XPNs:
relationship, noting that "the supervisor, although
1. Health personnel – Including resident compensated on a commission basis, is exempt from
physicians, nurses, nutritionists, dietitians, the observance of normal hours of work for his
pharmacists, social workers, laboratory
compensation is measured by the number of sales
technicians, paramedical technicians, he makes." (Lazaro v. SSS, G.R. No. 138254, 30 July
psychologists, midwives, attendants and all
2004)
other hospital or clinic personnel. (Art. 83, LC);
and
2024 GOLDEN NOTES
The eight-hour work requirement does not, Broken Hours
however, preclude the Er in the exercise of its
management prerogatives to reduce the number of Minimum normal eight (8) working hours fixed by
working hours, provided that there is no diminution law need not be continuous to constitute the legal
of existing benefits. (Poquiz, 2012) working day. It may mean broken hours of say, 4
hours in the morning and 4 hours in the evening or
The right to fix the work schedules of the Ee rests variation thereof provided the total of 8 hours is
principally on their Er. (Sime Darby Pilipinas v. NLRC, accomplished within the work day. (Chan, 2017)
G.R. No. 119205, 15 Apr. 1998)
Hours Worked
Management is free to regulate, according to its own
discretion and judgment, all aspects of employment, Working time is one during which an Ee is actually
including hiring, work assignments, working working. It may include an instance when an Ee is
methods, time, place and manner of work, processes not actually working but he is required to be present
to be followed, supervision of workers, working in the Er’s premises. Thus, the fact that he is
regulations, transfer of Ees, work supervision, layoff required to be present although not actually doing
of workers and discipline, dismissal, and recall of any work, is still deemed working time. (Poquiz,
workers. (Manila Jockey Club Ees Labor Union v. 2012)
Manila Jockey Club, Inc., G.R. No. 167760, 07 Mar.
2007) When Hours Worked are Compensable
Work day 1. Ee is required to be on duty or to be at a

prescribed workplace;
It is the 24-hour period which commences from the
time the Ee regularly starts to work. 2. Ee is suffered or permitted to work;
Illustration: If the worker starts to work at 8 am 3. Rest periods of short duration during working
today, the work day is from 8 am today up to 8 am hours which shall not be more than 20 minutes;
tomorrow. (Azucena, 2016) and
Part-Time Work 4. Meal periods of less than 20 minutes. (Sec. 7,

Rule I, Book III, IRR)
It is not prohibited to have normal hours of work of
less than eight (8) hours a day. What the law NOTE: Travel time, when beneficial to the Er, is
regulates is work hours exceeding eight (8) – it compensable. (Rada v. NLRC, G.R. No. 96078, 09 Jan.
prescribes the maximum but not the minimum. 1992)
NOTE: Under Art. 124, as amended by R.A. No. 6727, Principles in Determining Hours Worked
wage proportionate to part-time work is
recognized. The wage and benefits of a part-time 1. All hours which the Ee is required to give to his
worker are in proportion to the number of hours Er regardless of whether or not such hours are
worked. spent in productive labor or involve physical or
mental exertion.
Illustration: If an Ee earns P300.00 for an eight-
hour work, he shall then get P150.00 for work done 2. Rest period is excluded from hours worked,
in four (4) hours. even if Ee does not leave his workplace, it being
enough that:
a. He stops working;
b. May rest completely; or
2024 GOLDEN NOTES
c. May leave his workplace, to go 3. When Ee is required to remain on call in the Er’s
elsewhere, whether within or outside premises or so close thereto that he cannot use
the premises of the workplace. the time effectively and gainfully for his own
purpose. (Sec. 5, Rule I, Book III, IRR, LC)
3. All time spent for work is considered hours
worked if: NOTE: An Ee who is not required to leave word at
his home or with company officials where he may
a. The work performed was necessary; be reached is not working while on call. (Sec. 5(b),
Rule I, Book III, IRR, LC)
b. If it benefited the Er; or
The controlling factor is whether waiting time
c. The Ee could not abandon his work at spent in idleness is so spent predominantly for the
the end of his normal working hours Er’s benefit or for the Ee’s.
because he had no replacement;
Q: Gil Bates, a computer analyst and
d. Provided, the work was with the programmer of Hard Drive Company, works
knowledge of his Er or immediate eight hours a day for five days a week at the
supervisor. main office providing customers information
technology assistance. On Saturdays, however,
4. The time during which an Ee is inactive by the company requires him to keep his cellular
reason of interruptions in his work beyond his phone open from 8:00 A.M. to 5:00 P.M. so that
control shall be considered working time: the Management could contact him in case of
heavy workload or emergency problems
a. If the imminence of the resumption of needing his expertise.
the work requires the Ees presence at
the place of work; or May said hours on Saturdays be considered
compensable working hours “while on call”? If
b. If the interval is too brief to be utilized so, should said compensation be reported to
effectively and gainfully in the Ees own the Social Security System (SSS)? (2004 BAR)
interest. (Sec. 4, Rule I, Book III, IRR, LC)
A: YES. Said hours on Saturdays should be
Q: Can the number of hours of work be reduced considered as compensable working hours "while
by an Er? on call." Under the IRR of the LC, an employee who
is not required to leave word at his home or with
A: YES. However, financial losses must be shown company officials as to where he may be reached is
before a company can validly opt to reduce the work not working while on call. But in the question, Gil
hours of its Ees because the Ees would suffer a Bates was required to keep his cell phone open
reduction in pay if their work hours are unilaterally from 8:00 A.M. to 5:00 P.M. Therefore, Bates should
reduced by the Er. (Linton Commercial Co., Inc. v. be considered as working while on call if he cannot
Heller, G.R. No. 163147, 10 Oct. 2007) use effectively and gainfully for his own purpose
the time from 8:00 A.M. to 5:00 P.M. on Saturdays
Waiting Time when he is required to keep his cellphone open.
It shall be considered as working time if: The compensation actually received by Bates for
working while on call on Saturdays should be
1. Waiting is an integral part of this work; reported to the SSS because under the Social
Security Law, compensation means "all actual
2. The Ee is required or engaged by the Er to wait; remuneration for employment."
or
2024 GOLDEN NOTES
Engaged to Wait vs. Waiting to be Engaged Working Conditions of Seafarers Onboard Ships
Engaged in Domestic Shipping)
WAITING TO BE
ENGAGED TO WAIT
ENGAGED Audio-Visual Production Workers
Waiting is an integral
Idle time is not
part of the job. The Waiting Time shall be considered as actual working
working time. It is not
time spent waiting is time if:
compensable.
compensable.
1. The worker is required to standby; and
NOTE: The idle time that an employee may spend
for resting and during which he may leave the spot 2. Restricted to the confines of the workplace
or place of work though not the premises of his premises. (DOLE-FDCP Joint Memorandum
employer, is not counted as working time only Circular No. 001-20)
where the work is broken or is not continuous.
(National Development Co. v. Court of Industrial NOTE: All on-call workers engaged for their services
Relations, G.R. No. L-15422, 30 Nov. 1962) who are outside the premises of the set or location
shall likewise be compensated in the event of
Health Personnel in the Private Healthcare cancellation not less than twenty-four (24) hours
Industry immediately preceding the scheduled shoot. (Ibid.)
Waiting time such as endorsement period, spent by Preliminary (Before Work) and Postliminary
health personnel shall be considered as working (after Actual Work) Activities Deemed
time if: Performed during Working Hours and
Compensable
1. He or she is required or engaged by the
employer to wait; 1. Where such activities are controlled by the Er or
required by the Er; and
2. He or she is required to remain on call in the
employer's premises or so close thereto that he 2. Pursued necessarily and primarily for the Er's
cannot use the time effectively and gainfully for benefit. (31 Am. Jur. 882-883)
his own purpose; or
NOTE: Ees are entitled to portal pay for time spent
3. An employee is not required to leave word at his on incidental activities before or after the regular
home or with company officials where he may working period. (CCHI, Labor Law Course, 318)
be reached is not working while on call. (Sec. 7,
DOLE D.O. No. 182-17 Guidelines Governing the Thirty (30)-Minute Assembly Time
Employment and Working Conditions of Health
Personnel in the Private Healthcare Industry) It is long practiced and institutionalized by mutual
consent of the parties under the CBA cannot be
Seafarers considered waiting time of the Ees if they are not
subject to the absolute control of the company
Waiting time shall not be considered as during this period. (Arica v. NLRC, G.R. No. 78210,
compensable working time if: 28 Feb. 1989)
1. The seafarer is completely relieved from

his/her duty; and
2. Can use the time effectively for his/her own

purpose. (Sec. 5, DOLE D.O. No. 129-13, Rules and
Regulations Governing the Employment and
2024 GOLDEN NOTES
Thirty (30)-Minute Assembly Time When Not Illustration:
Compensable Travel from main workplace (5:00PM) to jobsite A
(6:00PM) to jobsite B (7:00PM) to jobsite C
The 30-minute assembly time is not compensable, (8:00PM) to main workplace (9:00PM) is
given the following reasons: compensable.
1. The assembly is routinary and non- But, if instead of travelling back to the main
complicated; workplace, Ee decides to go home from jobsite C,
travel time from 8 PM is no longer compensable,
2. The Ees’ houses are situated on the same area because it would already fall under the category of
as the workplace; and work to home travel.
3. The Ees were not subjected to disciplinary Travel Away from Home
action should they fail to report in the assembly
time. GR:
Therefore, the 30-minute assembly time was not 1. Travel that requires an overnight stay on the
primarily intended for the interest of the Er, but part of the Ee when it cuts across the Ees
ultimately for the Ees to indicate their availability or workday is clearly working time.
unavailability for work during workdays. (Ibid.)
2. The time is not only hours worked on regular
Travel Time from Home to Work workdays but also during corresponding
working hours on non-working days. Outside of
GR: Normal travel from home to work is not these regular working hours, travel away from
working time. home is not considered working time.
XPNs: XPN: During meal period or when Ee is permitted to

sleep in adequate facilities furnished by the Er.
1. Emergency call outside his regular working
hours where he is required to travel to his “Facilities”
regular place of business or some other work
site; Articles or services provided by the employer for the
benefit of the employee or his/her family but shall
2. Done through a conveyance provided by the Er; not include tools of the trade of articles or services
primarily for the benefit of the employer or
3. Done under the supervision and control of the necessary to the conduct of the employer's business.
Er; and (Sec. 4(e), DOLE D.O. No. 126-13)
4. Done under vexing and dangerous NOTE: The term shall include transportation
circumstances. furnished to the employee between his home and
work where the travel time does not constitute
hours worked compensable under the LC and other
Travel that is All in a Day’s Work law. (Sec. 4(e)(4), DOLE D.O. No. 126-13)
It is the time spent in travel as part of the Ees Sleeping Time

principal activity (e.g., Travel from job site to job site
during the work day, must be counted as working A worker sleeping may be working. Whether
hours). sleeping time allowed an Ee will be considered as
part of his working time will depend upon the
express or implied agreement of the parties. In the
2024 GOLDEN NOTES
absence of an agreement, it will depend upon the equipment that may result in case of power
nature of the service and its relation to the working interruption. (DOLE P.I. 36, 1978)
time.
The days when work was not required and no work
Sleeping Time When Compensable could be done because of shutdown due to electrical
power interruptions, lack of raw materials and
1. it is subject to serious interruption; or repair of machines, are not deemed hours worked.
2. takes place under conditions substantially less (Durabit Recapping Plant Company v. NLRC, G.R. No.
desirable than would be likely to exist at the Ee’s 76746, 27 July 1987)
home.
When a CBA contains a reporting time-off provision
Sleeping Time When Not Compensable wherein Ees who have reported for work but are
unable to continue because of emergencies such as
It is not working time if there is an opportunity for typhoons, flood, earthquake, and transportation
comparatively uninterrupted sleep under fairly strike shall also mean to include brownout or power
desirable conditions. (Azucena, 2010) outage because the key element of the provision is
that Ees who have reported for work are unable to
Power Interruptions Not Exceeding 20 Minutes continue working because of the incident. Hence,
are Compensable Ees who were prevented to continue their work due
to brownout should also be remunerated. (Supreme
Brownouts of short duration but not exceeding 20 Steel Corporation v. Nagkakaisang Manggagawa ng
minutes shall be treated as worked or compensable Supreme Independent Union, G.R. No. 185556, 28
hours whether used productively by the Ees or not. Mar. 2011)
(DOLE P.I. 36-78)
Time spent during which an Ee is inactive by reason
Power Interruptions Exceeding 20 Minutes May of interruptions beyond his control is working time,
Not be Compensable such as twenty-minute electric power failure or
machine breakdowns. The pay for this non-
Brownouts running for more than 20 minutes may productive time is known as idle-time pay. Where
not be treated as hours worked provided that any of the work is broken or is not continuous, the idle
the following conditions are present: time that an Ee may spend for rest is not counted as
working time. (NDC v. CIR, G.R. No. L-53961, 30 June
1. The Ees can leave their workplace or go 1987)
elsewhere whether within or without the work
premises; or Lectures, Meetings, Training-Programs, and
Similar Activities
2. The Ees can use the time effectively for their
own interest. (Durabuilt Recapping Plant v. Attendance at lectures, meetings, training programs
NLRC, G.R. No. 76746, 27 July 1987) and similar activities need not be counted as
working time if the following criteria are met:
NOTE: In each case, the Er may extend the working
hours of his Ees outside the regular schedules to 1. Attendance is outside of the Ee's regular
compensate for the loss of productive man-hours working hours;
without being liable for overtime pay. (Chan, 2017)
2. Attendance is in fact voluntary; and
Industrial enterprises with one or two workshifts
may adopt any of the workshifts prescribed for 3. The Ee does not perform any productive work
enterprises with three workshifts to prevent during such attendance. (Sec. 6, Rule I, Book III,
serious loss or damage to materials, machineries, or IRR, LC)
2024 GOLDEN NOTES
Attending CBA Negotiations When Compensable Hours of Work of Health Personnel
1. There is an agreement for the compensability in GR: Eight (8) hours for five (5) days (40-hour
the parties’ ground rules; workweek), exclusive of time for meals.
2. There is an established policy allowing XPN: Where the exigencies of the service require
compensability; and that such personnel work for six (6) days or 48
hours, they shall be entitled to an additional
3. When it is done during regular work hours with compensation of at least 30% of their regular wage
the agreement of the Er. for work on the 6th day. (Art. 83, LC)
Grievance Meeting Health Personnel Covered by the 40-Hour

Workweek
GR: Time spent in adjusting grievance between Er
and Ees during the time Ees are required by the Er 1. Those in cities and municipalities with a
to be on the premises is compensable. population of at least one (1) million; or
XPN: When a bona fide union is involved and there 2. Those in hospitals and clinics with a bed
is a CBA, policy, and practice to contrary. capacity of at least 100.
Strikes NOTE: Art. 83(2) of the LC does not require

hospitals to pay the Ees a full weekly salary with
GR: Not compensable. paid two (2) days off. (San Juan de Dios Ees
Association-AFW, et al. v. NLRC, G.R. No. 126383, 28
XPN: If there is an agreement to allow “strike Nov. 1997)
duration pay” provided under the company policy,
practice or CBA. Resident Physicians on Duty Beyond the 40-
Hour Workweek Limitation
Hearing, Arbitration, or Conciliation
GR: The customary practice of requiring resident
Not compensable because it is hardly fair for an Ee physicians beyond the 40 hours of work per week is
or laborer to fight or litigate against his Er and not permissible and violates the limitation under
eventually consider it as hours worked. (JP Art. 83 of the LC.
Heilbronn Co. v. National Labor Union, G.R. No. L-
5121, 30 Jan. 1953) XPN: If there is a training agreement between the
resident physician and the hospital and the training
Semestral Break of Teachers program that is duly accredited or approved by
appropriate government agency.
Semestral break of teachers are considered as
compensable hours worked for it is a form of an Work Hours of Seamen or Seafarers
interruption beyond their control. (University of
Pangasinan Faculty Union v. NLRC, G.R. Nos. 64821- Seamen are required to stay on board their vessels
23, 29, Jan. 1993) by the very nature of their duties, and it is for this
reason that, in addition to their regular
NOTE: Payment of compensation is given only to compensation, they are given free living quarters
regular full-time teachers. (Duka, 2016) and subsistence allowances when required to be on
board.
It could not have been the purpose of the law to

require their Ers to pay them overtime even when
2024 GOLDEN NOTES
they are not actually working, otherwise, every
sailor on board a vessel would be entitled to b. MEAL PERIODS
overtime for 16 hours each day, even if he had spent (Art. 85, LC; Sec. 7, Rule I, Book III, Omnibus
all those hours resting or sleeping in his bunk, after Rules Implementing the Labor Code)
his regular tour of duty.
Duration
The correct criterion in determining whether or not
sailors are entitled to overtime pay is not, therefore, Every Er shall give his Ees not less than sixty (60)
whether they were on board and cannot leave ship minutes or one (1) hour time-off for regular meals.
beyond the regular eight (8) working hours a day, (Art. 85, LC)
but whether they actually rendered service in
excess of said number of hours. As a general rule, Ees are entitled to at least one
hour time-off for regular meals which can be taken
A laborer need not leave the premises of the factory, inside or outside company premises.
shop or boat in order that his period of rest shall not
be counted, it being enough that he “cease to work,” Rationale for Meal Breaks
may rest completely and leave or may leave at his
will the spot where he actually stays while working, For a full one-hour undisturbed lunch break, the Ees
to go somewhere else, whether within or outside can freely and effectively use this hour not only for
the premises of said factory, shop or boat. If these eating, but also for their rest and comfort which are
requisites are complied with, the period of such rest conducive to more efficiency and better
shall not be counted. (Luzon Stevedoring Co. v. Luzon performance in their work. Since the Ees are no
Marine Department Union, G.R. No. L-9265, 29 Apr. longer required to work during this one-hour lunch
1975) break, there is no more need for them to be
compensated for this period. (Sime Darby Pilipinas,
Maximum Hours Of Work Inc. v. NLRC, G.R. No. 90426, 15 Dec. 1989)
Certain workers may not be required to work Meal Period When Compensable
beyond a certain number of work hours a day.
1. When it is predominantly spent for the Er’s
1. Public Utility Bus drivers and conductors – 12 benefit; or
hours per 24-hour period. (D.O. 118- 12, s. 2012) 2. When it is less than 60 minutes.
2. Movie and television industry worker/ talent NOTE: Where during a meal period, the laborers are
– shall not exceed eight (8) hours in a day. required to stand by for emergency work, or where
the meal hour is not one of complete rest, such is
If required to work beyond eight (8) hours – considered overtime. (Pan American World Airways
the maximum actual hours of work shall not System v. Pan American Ees Association, G.R. No. L-
exceed 12 hours in any 24-hour period; 16275, 23 Feb. 1961) Rest periods or coffee breaks
running from 5 to 20 minutes shall be considered as
If aged 60 years old and above – shall not compensable working time. (Sec. 7, Rule I, Book III,
exceed eight (8) hours per day; IRR, LC)
NOTE: The hours of work of children in the Meal Periods During Overtime Work When
industry must be in accordance with R.A. No. Compensable
9231 and its IRR. (D.O. 65-04, s. 2004)
Meal periods provided during overtime work are
3. Seafarers onboard ships engaged in domestic compensable since the one (1)-hour meal period
shipping – 14 hours per 24-hour period or 77 (non-compensable) is not given during OT work
hours per seven (7) days. (D.O. 129-13, s. 2013) because the latter is usually for a short period and
2024 GOLDEN NOTES
to deduct from the same would reduce to nothing 5. Overtime pay will become due and demandable
the Ees’ OT work. Thus, the one-hour break for after the new time schedule; and
meals during OT should be treated as compensable.
6. Arrangement is of Temporary duration.
Shortened Meal Periods When Compensable (O-
P-E-N) NOTE: Ee requested for the shorter meal time so
that they can leave work earlier than the previously
1. Work is Non-manual in nature or does not established schedule.
involve strenuous physical exertion;
The implementing rules allow the mealtime to be
2. Establishment regularly Operates less than less than 60 minutes, under specified cases but in no
sixteen (16) hours a day; case shorter than 20 minutes. (Sec. 7, Rule I, Book III,
IRR, LC)
3. Work is necessary to prevent serious loss of
Perishable goods; and If the so called “mealtime” is less than twenty (20)
minutes, it becomes only a rest period and is
4. Actual or impending Emergency or there is considered working time. (Azucena, 2016)
urgent work to be performed on machineries
and equipment to avoid serious loss which the c. NIGHT-SHIFT
Er would otherwise suffer. (Sec. 7, Rule I, Book (Art. 86, LC; Secs. 1-6, Rule II, Book III, Omnibus
III, IRR, LC) Rules Implementing the Labor Code)
NOTE: The meal hour was not one of complete rest Night-Shift Differential (NSD)
but a work hour because for its duration, the
laborers had to be on ready call. (Pan American Every Ee shall be paid a night shift differential of not
World Airways System v. Pan American Ees less than 10% of his regular wage for each hour of
Association, G.R. No. L-16275, 23 Feb. 1961) work performed between 10:00 PM and 6:00 AM.
(Art. 86, LC)
Shortened Meal Periods When Not Compensable
(S-A-D-B-O-T) GR: All Ees are entitled to NSD.
1. Work of the Ees does not involve Strenuous XPNs: (Go-Re-Do-Ma-Fi)

physical exertion and they are provided with
adequate coffee breaks in the morning and 1. Those of the Government and any of its political
afternoon; subdivisions, including GOCCs;
2. Ees voluntarily Agree in writing and are willing 2. Those of Retail and service establishments
to waive OT pay for the shortened meal period; regularly employing not more than five (5)
workers;
3. No Diminution in the salary and other fringe
benefits of the Ees which are existing before the 3. Domestic helpers and persons in the personal
effectivity of the shortened meal period; service of another;
4. Value of the Benefits derived by the Ees from the 4. Managerial Ees as defined in Book Three of the
proposed work arrangements is equal to or Labor Code; and
commensurate with the compensation due
them for the shortened meal period as well as 5. Field personnel and other Ees whose time and
the OT pay for 30 min. as determined by the Ees performance are unsupervised by the Er,
concerned; including those who are engaged on task or
contract basis, purely commission basis, or
2024 GOLDEN NOTES
those who are paid a fixed amount for Night Differential in Overtime Pay
performing work irrespective of the time
consumed in the performance thereof. (Sec 1, If work done between 10:00PM and 6:00AM is
Rule II, Book III, IRR, LC) overtime work, then the ten percent (10%) NSD
should be based on the overtime rate.
NOTE: Where the night-time work of an Ee overlaps
with overtime work, the receipt of overtime pay When the tour of duty of an Ee falls at nighttime, the
does not preclude the receipt of night differential receipt of overtime pay will not preclude the right to
pay. The latter is night pay, while the former is night differential pay. The latter is payment for work
payment beyond eight-hour work. (Poquiz, 2012) done during the night and the other is payment for
the excess of the regular eight-hour work. (NARIC v.
Rationale of NSD NARIC Workers Union, et al., G.R. No. L-12075, 29 May
1959)
The philosophy behind the provision is to give
premium to night work when an Ee is supposed to d. OVERTIME WORK
be sleeping. Working at night is violative of the law (Arts. 87-90, LC; Secs. 8-10, Rule I, Book III,
of nature for it is the period for rest and sleep. An Ee Omnibus Rules Implementing the Labor Code)
who works at night has less stamina and vigor, thus,
he can easily contract a disease. (Association of It is the service rendered in excess of and in addition
International Shipping Lines, Inc. v. United Harbor to eight (8) hours on ordinary working days. (Caltex
Pilots' Association of the Philippines, Inc., G.R. No. Regular Employees at Manila Office v. Caltex
172029, 06 Aug. 2008) Philippines, G.R. No. 111359, 15 Aug. 1995)
Work done at night places has a greater burden on NOTE: It is not enough that the hours worked fall on
the worker. It is more strenuous and onerous than disagreeable or inconvenient hours. The hours
work done during the day. Therefore, it deserves worked must be in excess of eight (8) hours worked
greater or extra compensation. (Shell Co. v. NLU, G.R. during the prescribe daily work period, or the forty
No. L-1309, 26 July 1948) (40) hours worked during the regular work week
from Monday to Friday.
Non-Waivability of NSD
Overtime Pay
GR: Waiver of NSD is against public policy. (Mercury
Drug Co., Inc. v. Dayao, et al., G.R. No. L-30452, 30 It is the additional compensation of at least 25% on
Sept. 1982) the regular wage for the service or work rendered
or performed in excess of eight (8) hours a day by
XPN: Waiver is allowed if it will result in higher or Ees or laborers in employment covered by the eight
better benefits to Ees. (8)-hour Labor Law. (Art. 87, LC)
Burden of Proof of Payment It is based on regular base pay excluding money

received by Ee in different concepts such as
The burden of proving that payment of NSD has Christmas bonus and other fringe benefits. It is
been made rests upon the party who will suffer if no computed by multiplying the overtime hourly rate
evidence at all is presented by either party. by the number of hours in excess of eight. (Azucena,
(National Semiconductor (HK) Distribution, Ltd. v. 2016)
NLRC and Santos, G.R. No. 123520, 26 June 1998)
NOTE: Express instruction from the Er to the Ee to
render OT work is not required for the Ee to be
entitled to OT pay. It is sufficient that the Ee is
permitted or suffered to work. (Azucena, 2016)
However, written authority after office hours during
2024 GOLDEN NOTES
rest days and holidays are required for entitlement whether they actually rendered service in excess of
to compensation. said number of hours.
Rationale for Overtime Pay Overtime Pay vs. Premium Pay
Ee is made to work longer than what is OVERTIME PAY PREMIUM PAY

commensurate with his agreed compensation for
the statutory fixed or voluntarily agreed hours of Additional
labor he is supposed to do. (PNB v. PEMA and CIR, compensation for work
G.R. No. L-30279, 30 July 1982) performed within 8
hours on days when
The reason the law requires additional Additional normally he should not
compensation for work beyond the normal working compensation for work be working (on non-
day is to encourage Ers to dispense with such work, performed beyond 8 working days, such as
thus providing Ees an opportunity to satisfy their hours on ordinary days rest days and special
mental, moral, and spiritual needs. They may have (within the worker’s days). But additional
more hours to devote to reading, amusement, and 24-hour workday). compensation for work
other recreational activities necessary for their rendered in excess of 8
well-being. Moreover, they could share longer hours hours during these
in the company of their family, attending to spiritual days is also considered
or religious needs. Law on overtime will surely ease OT pay.
unemployment problem, for Ers will be constrained
to employ additional Ees to work in other shifts
He shall be paid an
necessary for the operation of the business. (Shell
additional
Co. v. NLU, G.R. No. L-1309, 26 July 1948)
compensation of at
least 30% of his
Condition for Entitlement to Overtime Pay
regular wage.
Entitlement to overtime pay must first be supported
He shall be entitled to
by sufficient proof that said overtime work was
additional
actually performed before an Ee may avail of said
compensation for work
benefit. (Cagampan v. NLRC, G.R. Nos. 85122-24, 22
performed on Sunday
Mar. 1991) He shall be paid an
only when it is
additional
established as a rest
An Ee is entitled to overtime pay for work rendered compensation for the
day.
in excess of eight (8) hours, despite the fact that his overtime work in the
employment contract specifies a 12-hour workday amount equivalent to
When the nature of the
at a fixed monthly salary rate that is above the legal his regular wage plus
work has no regular
minimum rate. The provisions of the pertinent labor at least 25%. (Art. 87,
workdays and no
laws prevail over the terms of the contract. (PESALA LC)
regular rest days, he
v. NLRC, G.R. No. 105963, 22 Aug. 1996)
shall be paid an
additional
Overtime Pay of Worker Aboard a Vessel
compensation of at
least 30% of his
In National Shipyards and Steel Corporation v. CIR
regular wage for work
(G.R. No. L-17068, 30 Dec. 1961), the Court held that
performed on Sundays
the correct criterion in determining whether or not
and holidays. (Art 93,
sailors are entitled to overtime pay is not, therefore,
LC)
whether they were on board and cannot leave ship
beyond the regular eight working hours a day, but
2024 GOLDEN NOTES
Overtime Pay Rates doubt as to whether he actually rendered work
on a given date and time. Did Zonio sufficiently
OVERTIME PAY RATES prove his entitlement to monetary claims?
During a A: YES. Admittedly, the logbook is only a personal

Additional compensation of
regular record of Zonio and other security guards. It is not
25% of the regular wage
working day verified or countersigned by respondents. Anyway,
the fact that the entries are not verified or
Rate of the first 8 hours worked countersigned will not militate against Zonio. The
on plus at least 30% of the entries in the logbook are prima facie evidence of
regular wage (RW): Zonio's claim. Prima facie evidence is such evidence
as, in the judgment of the law, is sufficient to
A. If done on a special establish a given fact, or the group, or chain of facts
holiday OR rest day: constituting the party's claim or defense, and which
During a 30% of 130% of RW if not rebutted or contradicted, will remain
holiday or sufficient. Evidence which, if unexplained or
rest day B. If done on a special uncontradicted, is sufficient to sustain a judgment in
holiday AND rest day: favor of the issue it supports, but which may be
30% of 150% of RW contradicted by other evidence. Respondents
dispute the veracity of the entries in the logbook,
C. If done on a regular yet, they did not proffer evidence to rebut them, or
holiday: show that they paid Zonio for the services he
30% of 200% of RW rendered on the dates and the hours indicated in the
logbook. The best evidence for respondents would
have been the payrolls, vouchers, payslips, daily
Basis of Computation of Overtime Pay time records, and the like, which are in their custody
and absolute control. However, respondents did not
Regular wage which includes the cash wage only, present any of these. This failure gives rise to the
without deduction on account of the facilities presumption that either they do not have them, or if
provided by the Er. (Art. 90, LC) they do, their presentation is prejudicial to their
cause. (Reggie Orbista Zonio v. 1st Quantum Leap
Prima Facie Evidence of Overtime Pay Security Agency, Inc. and Romulo Q. Par, G.R. No.
224944, 05 May 2021, as penned by J. M.V Lopez)
Q: Respondent security agency did not pay Zonio
for overtime work, work rendered on holidays Waiver of Overtime Pay
and rest days, as well as 13th month pay, service
incentive leave, and night shift differential. GR: The right to overtime pay cannot be waived.
Zonio, along with some of his colleagues, The right is intended for the benefit of the laborers
received a memorandum suspending them for and Ees. Any stipulation in the contract that the
sleeping while on duty. Zonio filed a complaint laborer shall work beyond eight hours without
against respondents for illegal suspension and additional compensation for the extra hours is
nonpayment of overtime pay, holiday and rest contrary to law as well as null and void. (Azucena,
day premiums pay, and night shift differentials 2016)
pay. To support his allegations. Zonio submitted
in evidence photocopies of the entries in the The right of the laborer to overtime compensation
logbook, signed by incoming and outgoing cannot be waived expressly or impliedly. Where the
security guards and were not countersigned by contract of employment requires work for more
their supervisor or any authorized than eight hours at a specified wage per day, without
representative. His claim was denied because providing for a fixed hourly rate or that the daily
the evidence Zonio adduced raises serious wages include overtime pay, said wages cannot be
2024 GOLDEN NOTES
considered as including overtime compensation than eight (8) hours a day, in lieu of OT, the
required under the Eight-hour Labor Law. (Manila provisions of the contract of employment of Danilo
Terminal Co., Inc. v. CIR, G.R. No. L-4148, 16 July 1952) are not violative of any labor law because they
instead improve upon the present provisions of
XPNs: pertinent labor laws.
1. When the alleged waiver of overtime pay is in Q: The employment contract requires work for
consideration of benefits and privileges which more than eight (8) hours a day with a fixed
may be more than what will accrue to them in wage inclusive of OT pay. Is that valid?
overtime pay, the waiver may be permitted.
(Azucena, 2016) A: NO. When the contract of employment requires
work for more than eight hours at specific wages per
2. Compressed Workweek (CWW) arrangement. day, without providing for a fixed hourly rate or that
the daily wages include OT pay, said wages cannot
Q: Socorro is a clerk-typist in Hospicio de San be considered as including OT compensation.
Jose, a charitable institution dependent for its (Manila Terminal Co. v. CIR, G.R. No. L-4148, 16 July
existence on contributions and donations from 1952)
well-wishers. She renders work 11 hours a day
but has not been given OT pay since her place of However, in cases of built-in OT pay in Government-
work is a charitable institution. Is Socorro Approved Contracts. When the OT pay was already
entitled to overtime pay? Explain briefly. (2002 provided in the written contract with a built-in OT
BAR) pay and signed by the director of the bureau of
employment services and enforced by the Er, non-
A: YES. Socorro is entitled to OT pay. She does not payment of OT pay by the Er is valid. (Engineering
fall under any of the exceptions to the coverage of Equipment, Inc. v. Minister of Labor, G.R. No. L-64967,
Art. 82, under the provisions of hours of work. The 23 Sept. 1985)
LC is equally applicable to non-profit institutions. A
covered Ee who works beyond eight (8) hours is Overtime Rate Subject to Stipulation
entitled to OT compensation.
GR: The premium for work performed on the Ee’s
Q: Danilo Flores applied for the position of rest days or on special days or regular holidays are
driver in the motor-pool of Gold Company, a included as part of the regular rate of the Ee in the
multinational corporation. Danilo was informed computation of OT pay for any OT work rendered on
that he would frequently be working overtime as said days, especially if the Er pays only the minimum
he would have to drive for the company's OT rates prescribed by law.
executives even beyond the ordinary 8-hour
work day. He was provided with a contract of XPN: Ees and Er may stipulate in their collective
employment wherein he would be paid a agreement the payment of OT rates higher than
monthly rate equivalent to 35 times his daily those provided by law and exclude the premium
wage, regular sick and vacation leaves, 5 day- rates in the computation of OT pay. Such agreement
leave with pay every month and time off with pay may be considered valid only if the stipulated OT
when the company's executives using the cars do pay rates will yield to the Ees not less than the
not need Danilo's service for more than eight minimum prescribed by law.
hours a day, in lieu of overtime. Are the above
provisions of the contract of employment in Overtime Pay in a CWW Scheme
conformity with, or violative of, the law?
Any work performed beyond twelve (12) hours a
A: Except for the provision that Danilo shall have day or forty-eight (48) hours a week shall be subject
time off with pay when the company's executives to OT premium. (D.A. 02-04, s. 2004)
using the cars do not need Danilo's service for more
2024 GOLDEN NOTES
Built-in Overtime Pay or Composite/Package Emergency Overtime Work
Pay
It is not per se illegal, but there should have been GR: The Ee may not be compelled to work more than
express agreement to that effect. Such arrangement, eight (8) hours a day.
if there be any, must appear in the manner required
by law on how overtime compensation must be XPN: Compulsory Overtime (Wa-D-U-P-Fa-C)
determined. (Damasco v. NLRC, et al., G.R. No.
115755, 04 Dec. 2000) 1. When the country is at War or when any other
national or local emergency has been declared
Requisites for a Valid Built-in Overtime Pay by Congress or the Chief Executive;
(Base pay with Integrated Overtime Pay)
2. When overtime work is necessary to prevent
1. A clear written agreement knowingly and freely loss of life or property, or in case of imminent
entered into by the Ee; and Danger to public safety due to actual or
impending emergency in the locality caused by
2. The mathematical result shows that the agreed serious accident, fire, floods, typhoons,
legal wage rate and the overtime pay, computed earthquake, epidemic or other disaster or
separately are equal or higher than the separate calamities;
amounts legally due. (Azucena, 2016)
3. When there is Urgent work to be performed on
Overload Work vs. Overtime Work machines, installations, or equipment, in order
to avoid serious loss or damage to the Er or
Where a teacher is engaged to undertake actual some other causes of similar nature;
additional teaching work after completing his
regular teaching load, such additional work is 4. When the work is necessary to prevent loss or
referred to as overload. damage to Perishable goods;
When the overload is performed within eight (8) 5. When overtime work is necessary to avail of
hours normal working day, such overload pay is Favorable weather or environmental conditions
considered part of the basic pay for the purpose of where performance or quality of work is
computing 13th month pay. "Overload work" is dependent thereon; or
sometimes misunderstood as synonymous to
"overtime work." The two terms are not the same. 6. When the Completion or continuation of work
Overtime work is work rendered in excess of the started before the 8th hour is necessary to
normal working hours of eight in a day. On the other prevent serious obstruction or prejudice to the
hand, since overload work may be performed either business or operations of the Er.
within or outside eight hours in a day, overload work
may or may not be overtime work. (DOLE's NOTE: The Ee may still refuse to render overtime
Explanatory Bulletin on Inclusion of Teacher's even if compelled, although not without disciplinary
Overload in Computing 13th Month Pay) consequence for his refusal that could constitute
insubordination, a potential ground for termination
of employment. An Ee may not be compelled to
render overtime work; overtime work is voluntary.
(Art. 89, LC; Sec. 10, IRR, LC)
Q: Is the foregoing enumeration exclusive?
A: YES. In cases not falling within any of these

enumerated in this Sec., no Ee may be made to work
2024 GOLDEN NOTES
beyond eight (8) hours a day against his will. (Sec. action against LKG if, as a result of its change to two
10, Rule I, Book III, IRR, LC) (2) shifts, he now can only expect a maximum of four
(4) hours overtime work. Besides, Art. 87 of the LC
Q: Is mandatory overtime involuntary does not guarantee Carding a certain number of
servitude? hours of overtime work. In Manila Jockey Ees’ Union
v. Manila Jockey Club, Inc. (G.R. No. 167760, 07 Mar.
A: NO. The Ee may still refuse to render overtime 2007), the SC held that the basis of overtime claim is
even if compelled, although not without disciplinary an Ee’s having been “permitted to work.” Otherwise,
consequence for his refusal that could constitute as in this case, such is not demandable.
insubordination, a potential ground for termination
of employment. Q: After working from 10 A.M. to 5 P.M. on a
Thursday as one of 5,000 employees in a beer
Petitioner’s attempt to brush aside his refusal to factory, A hurried home to catch the early
render overtime work as inconsequential when evening news and have dinner with his family. At
Graphics, Inc.’s order for him to do so is justified by around 10 P.M. of the same day, the plant
Graphics, Inc.’s contractual commitments to its manager called and ordered A to fill in for C who
clients. Such an order is legal under Art. 89 of the LC missed the second shift. (2010 BAR)
and the petitioner’s unexplained refusal to obey is
insubordination that merits dismissal from service. (a) May A validly refuse the plant manager’s
(Realda v. New Age Graphics Inc., G.R. No. 192190, 25 directive? Explain.
Apr. 2012)
A: YES. A may validly refuse to fill in for C. A may not
NOTE: The working hours may be changed, at the be compelled to perform overtime work considering
discretion of the company, should such change be that the plant manager’s directive is not for an
necessary for its operations, and that employees emergency overtime work, as contemplated under
shall observe such rules as have been laid down by Art. 89 of the LC.
the company. Manila Jockey Employees’ Union v.
Manila Jockey Club (G.R. No. 167760, 7 Mar. 2007) (b) Assuming that A was made to work from
11 P.M. on Thursday until 2 A.M. on
Q: LKG Garments Inc. makes baby clothes for Friday, may the company argue that,
export. As part of its measures to meet its since he was two (2) hours late in
orders, LKG requires its Ees to work beyond coming to work on Thursday morning,
eight (8) hours everyday, from Monday to he should only be paid for work
Saturday. It pays its Ees an additional 35% of rendered from 1 A.M. to 2 A.M.? Explain?
their regular hourly wage for work rendered in
excess of eight (8) hours per day. Because of A: NO. Undertime is not offset by overtime. (Art. 88,
additional orders, LKG now requires two (2) LC)
shifts of workers with both shifts working
beyond eight (8) hours but only up to a Prohibition Against Offsetting
maximum of four (4) hours. Carding is an Ee who
used to render up to six (6) hours of overtime Where a worker incurs undertime hours during his
work before the change in schedule. He regular daily work, said undertime hours should not
complains that the change adversely affected be offset against the overtime hours on the same day
him because now he can only earn up to a or on any other day. (Art. 88, LC)
maximum of four (4) hours’ worth of overtime
pay. Does Carding have a cause of action against Offsetting of undertime work by overtime work,
the company? (2015 BAR) whether on the same or on another day is prohibited
by jurisprudence and by statute. (Azucena, 2016)
A: NO. A change in work schedule is a management
prerogative of LKG. Thus, Carding has no cause of
2024 GOLDEN NOTES
Q: A case against an employer company was filed
charging it with having violated the prohibition 2. In firms using substances, or operating in
against offsetting undertime for overtime work conditions that are hazardous to health, a
on another day. The complainants were able to certification is needed from an accredited safety
show that, pursuant to the Collective Bargaining organization or the firm’s safety committee that
Agreement (CBA), employees of the union had work beyond 8 hours is within the limit or levels
been required to work “overtime” on Saturday of exposure set by DOLE’s occupational safety
but were paid only at regular rates of pay on the and health standards; and
thesis that they were not required to complete,
and they did not in fact complete, the eight-hour 3. The DOLE Regional Office is duly notified. (Ibid.)
work period daily from Monday through Friday.
Given the circumstances, the employer CWW When Valid (Te-H-N-C-S)
contended that the employees were not entitled
to overtime compensation, i.e., with premium 1. Temporary;
rates of pay. Decide the controversy. (2003 BAR) 2. It is a more Humane solution instead of a
retrenchment of personnel;
A: Art. 88 of the LC provides that undertime work on 3. There is Notice and consultations with the
any particular day shall not be offset by overtime workers and supervisors;
work on any other day. The CBA, the law between 4. A Consensus is reached on how to deal with
the parties and the Union has shown that the deteriorating economic conditions; and
employees are required to render overtime work on 5. It is sufficiently proven that the company was
Saturdays, thus the contention of the employer is Suffering from losses.
not tenable. The employer cannot use the undertime
incurred from Monday through Friday to offset the NOTE: Under the Bureau of Working Conditions’
overtime on Saturday. Hence, the employees are bulletin, a reduction of the number of regular
entitled to overtime compensation, i.e., premium working days (RWDs) is valid where the
rates of pay on Saturday. arrangement is resorted to by the Er to prevent
serious losses due to causes beyond his control,
e. COMPRESSED WORK WEEK, FLEXIBLE WORK such as:
ARRANGEMENT, ALTERNATIVE WORK
ARRANGEMENTS, TELECOMMUTING PROGRAM 1. When there is a substantial slump in the
(DOLE D.A. No. 02-04; DOLE D.A. No. 02-09; DOLE demand for his goods or services; or
D.A. No. 04-10; Secs. 3-5, R.A. No. 11165)
2. When there is a lack of raw materials. Linton
Compressed Work Week (CWW) Commercial Co., Inc. v. Heller, G.R. No. 163147, 10
Oct. 2007)
It is a scheme where the normal workweek is
reduced to less than six (6) days but the total Q: Under what conditions may a "compressed
number of 48 work hours per week shall remain. work week" schedule be legally authorized as
an exception to the "eight-hour a day"
The normal workday is increased to more than eight requirement under the LC? (2005 BAR)
hours, but not to exceed 12 hours, without
corresponding overtime premium. The concept can A: A CWW schedule may be authorized under the
be adjusted accordingly depending on the normal following conditions:
workweek of the company. (D.A. No. 02-04, s. 2004)
1. The Ee voluntarily agrees to it;
Requisites of CWW
2. There is no diminution in their weekly or
1. The scheme is expressly and voluntarily monthly take home pay or fringe benefits;
supported by majority of the Ees;
2024 GOLDEN NOTES
3. The benefits are more than or at least
commensurate or equal to what is due to the NOTE: Under these FWAs, the Ers and the Ees are
Ees without the compressed work week; encouraged to explore alternative schemes under
any agreement and company policy or practice in
4. OT pay will be due and demandable when they order to cushion and mitigate the effect of the loss
are required to work on those days which of income of the Ees. (D.A. 02-09, s. 2009)
should have ceased to be working days
because of the compressed work week Administration of FWAs
schedule;
The parties shall be primarily responsible for the
5. No strenuous physical exertion or that they are administration of the FWAs. In cases there are
given adequate rest periods; and differences in the interpretation, the guidelines are
as follows:
6. It must be for a temporary duration as
determined by the DOLE. 1. The differences shall be treated as grievances
under the applicable grievance mechanism of
Flexible Work Arrangements (FWAs) the company;
These are alternative schedules or arrangements 2. Absent such grievance mechanism or

other than the standard and traditional workweeks. inadequate mechanism, it shall be referred to
Flexible Work Arrangements are recommended the Regional office which has jurisdiction over
over the outright closure of the business or the the workplace; and
termination of the services of its Ees. (D.A. 002-09, s.
2009) 3. The employers are required to keep and
maintain the documentary requirements
Types of FWAs proving that the flexible work arrangement was
voluntarily adopted. (DOLE D.O. 002-09)
1. Compressed Workweek
Notice Requirement
2. Reduction of Workdays – Refers to one where
the normal workdays per week are reduced but Prior to its implementation, the Er shall notify the
should not last for more than six months; DOLE through the Regional Office which has
jurisdiction over the workplace, of the adoption of a
3. Rotation of Workers - Refers to one where the FWA. The notice shall be in the Report Form
Ees are rotated or alternately provided work attached to D.A. 02-09, s. 2009.
within the workweek;
Alternative Work Arrangement
4. Forced Leave - Refers to one where the Ees are
required to go on leave for several days or D.A. 17-B-20, s. 2020 was issued in order to to assist
weeks utilizing their leave credits, if there are Ers to resume their business operations while
any; preserving the employment of their workers under
the enhanced community quarantine, general
5. Broken-time schedule - Refers to one where community quarantine or other quarantine
the work schedule is not continuous but the arrangements.
work-hours within the day or week remain; and
Alternative Work Schemes
6. Flexi-holidays schedule - Refers to one where
the Ees agree to avail the holidays at some other Alternative Work Schemes/Flexible Work
days provided there is no diminution of existing Arrangements are temporary in nature and shall be
benefits as a result of such arrangement.
2024 GOLDEN NOTES
adopted for as long as the Public Health Crisis exists. Telecommuting Act
(Sec. 4, Labor Advisory No. 17-B, s. 2020)
It refers to a work arrangement that allows an
1. Transfer - Ees are transferred to another employee in the private sector to work from an
branch or outlet of the same Er; alternative workplace with the use of
telecommunication and/or computer technologies.
2. Assignment - Ees are assigned to another (Sec. 3, R.A. No. 11165)
function or position in the same or other branch
or outlet of the same Er; Telecommuting Agreement
3. Job rotation - Ees are alternately required to The Er and Ees shall adhere to and be guided by the
work within the workweek; mutually agreed policy or telecommuting
agreement, which stipulates for the following
4. Reduction of workdays - Normal workdays per provisions, including but not limited to:
week are reduced;
1. Eligibility;
5. Partial closure - Some units or departments of 2. Applicable code of conduct and performance
the establishment are continued while other evaluation and assessment;
units or departments are closed; and 3. Appropriate alternative workplace/s;
4. Use and cost of equipment;
6. Other work arrangements, including 5. Work days and/or hours;
adjustment of wage and wage-related benefits 6. Conditions of employment, compensation, and
of the Ees. (D.A. 17-B-20, s. 2020) benefits particularly those unique to
telecommuting Ees;
Wages and Wage-Related Benefits 7. Non-diminution of benefits;
8. Occupational safety and health;
Ers and Ees may agree voluntarily to temporarily 9. Observance of data privacy policy;
adjust Ees’ wage and wage-related benefits as 10. Dispute settlement; and
provided for in existing employment contract, 11. Termination or change of work arrangement.
company policy or CBA. (Sec. 4, R.A. No. 11165)
The adjustments in wages and/or wage-related Termination of Telecommuting Arrangement

benefits shall not exceed six (6) months or the
period agreed upon in the CBA, if any. After such The Er or Ees may terminate or change the
period, Ers and Ees shall review their agreement telecommuting work arrangement, in accordance
and may renew the same. (Sec. 5, D.A. 17-20, s. 2020) with the telecommuting policy or agreement,
without prejudice to employment relationship and
Reporting Requirement working conditions of the Ee, at no cost to the latter.
Ers shall report the adopted alternative working Telecommuting Program

schemes and other work arrangements including
the adjustment of wage and wage-related benefits An Er in the private sector may offer a
of the Ees, if any, and submit a duly certified copy of telecommuting program to its Es on a voluntary
all agreements to the DOLE Regional Office having basis or as a result of collective bargaining, if any,
jurisdiction over their principal place of business. and upon such terms and conditions as they may
(Sec. 6, D.A. 17-20, s. 2020) mutually agree upon. (Sec. 3, D.O. 202-19)
NOTE: Such terms and conditions shall not be less

than the minimum labor standards set by law, and
shall include compensable work hours, minimum
2024 GOLDEN NOTES
number of work hours, overtime, rest days, opportunity to meet with colleagues on a regular
entitlement to leave benefits, social welfare benefits, basis and allowing access to the regular workplace
and security of tenure. and company information.
Fair Treatment Data Protection
The Er shall ensure that telecommuting Ees are To ensure the protection of data used and processed
given the same treatment as that of comparable Ees by the telecommuting Ee for professional purposes,
working at the Er's premises. All telecommuting Ees the Er shall be responsible for strictly taking the
shall be covered by the same set of applicable rules appropriate measures, which are not limited to:
and existing CBA, if any. They shall also: 1. Disabling of hardware,
2. Universal Serial Bus (USB) access, and
1. Receive a rate of pay, including overtime and 3. External cloud-based storage can be taken by
night shift differential, and other similar the Er.
monetary benefits not lower than those
provided in applicable laws, and/or CBA; For this purpose, the provisions of the Data Privacy
Act of 2012 shall have suppletory effect. (Sec. 5, D.O.
2. Have the right to rest days, regular holidays, and 202-19)
special nonworking days;
Notice and Monitoring
3. Have the same or equivalent workload and
performance standards as those of comparable The Er shall notify the DOLE on the adoption of a
workers at the Er's premises; provided that the telecommuting work arrangement, by
parties may mutually agree to different accomplishing the DOLE prescribed report form and
performance standards that may be more submitting the same in print or digital copy, to the
appropriate given the location of the Ee is not at nearest DOLE Field or Provincial Office having
the premises of the Er; jurisdiction over the area where the principal office
is located.
4. Without additional cost, have the same access to
training and career development opportunities If the Er has branches or operational units outside
as those of comparable workers at the Er's the region of its principal office, each branch or
premises, and be subject to the same appraisal operational unit shall also submit its respective
policies covering these workers, including the report to the nearest DOLE Field or Provincial Office
qualification provided on the preceding item; having jurisdiction over the branch or operational
unit. (Sec. 7, D.O. 202-19)
5. Without additional cost, receive appropriate
training on the technical equipment at their f. NON-COMPENSABLE HOURS
disposal, and the characteristics and conditions
of telecommuting; and
3. REST PERIODS
(Arts. 91-93, LC; Secs. 1-9, Rule III, Book III,
6. Have the same collective rights as the workers
Omnibus Rules Implementing the Labor Code)
at the Er's premises, including access to safety
and health services when necessary, and shall
not be barred from communicating with Right to Weekly Rest Day (WRD)
worker's representatives. (Sec. 4, D.O. 202-19) Every Er shall give his Ees a rest period of not less
than twenty-four (24) consecutive hours after every
The Er shall also ensure that measures are taken to six (6) consecutive normal workdays. (Sec. 3, Rule III,
prevent the telecommuting Ee from being isolated Book III, IRR, LC)
from the rest of the working community in the
company by giving the telecommuting Ee the
2024 GOLDEN NOTES
Rest day Not Necessarily Sunday or Holiday XPNs to XPN (no. 3): Er may schedule the WRD of
his choice for at least two (2) days in a month if the
All establishments and enterprises may operate or preference of the Ee will inevitably result in:
open for business on Sundays and holidays provided
that the Ees are given the weekly rest day and the 1. Serious prejudice to the operations of the
benefits provided under the law. (Sec. 2, Rule III, undertaking; and
Book III, IRR, LC)
2. The Er cannot normally be expected to resort to
Scope of WRD other remedial measures. (Sec. 4(2), Rule III,
Book III, IRR)
It shall apply to all Ers whether operating for profit
or not, including public utilities operated by private NOTE: The Er is mandated to respect the choice of
persons. (Sec. 1, Rule III, Book III, IRR, LC) its Ee as to their rest day based on religion.
Q: A Ladies Dormitory run or managed by a Right of the Ee to Know the Schedule of their
charitable non-profit organization claims that it WRDs
is exempt from the coverage of the Weekly Rest
Period provision of the Labor Code. Is the claim Er shall make known the rest period by means of:
valid? (1998 BAR) 1. Written notice;
2. Posted conspicuously in the workplace; and
A: NO. The claim is not valid. The provisions on 3. At least one week before it becomes effective.
weekly rest periods in the LC cover every employer, (Sec. 5, Rule III, Book III, IRR)
whether operating for profit or not. (Art. 91, LC)
Emergency Rest Day Work
Weekly rest periods shall apply to all Employers
whether operating for profit or not, including public GR: The Ee cannot be compelled by the Er to work
utilities operated by private persons. (Sec. 1, Rule III, on his rest day.
Book III, IRR)
XPNs:
Person Who Determines the WRD 1. In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
GR: Er shall determine and schedule the WRD of his earthquake, epidemic, or other disaster or
Ee. calamity to prevent loss of life and property, or
imminent danger to public safety;
XPNs: (C-SO-R)
2. In cases of urgent work to be performed on the
1. CBA; machinery, equipment, or installation to avoid
2. Rules and regulations as the SOLE may provide; serious loss which the Er would otherwise
and suffer;
3. Preference of Ee based on Religious grounds –
Ee shall make known his preference in writing 3. In the event of abnormal pressure of work due
at least 7 days before the desired effectivity of to special circumstances, where the Er cannot
the initial rest day so preferred. (Sec. 4(1), Rule ordinarily be expected to resort to other
III, Book III, IRR, LC) measures;
4. To prevent loss or damage to perishable goods;
NOTE: Instead of ordinary loss, it must be

serious. There must be loss and not just
damage.
2024 GOLDEN NOTES
required to work more than satisfy the required
5. Where the nature of the work requires weekly rest day.
continuous operations and the stoppage of
work may result in irreparable injury or loss to
4. HOLIDAYS
the Er; and
(Art. 94, LC; Secs. 1-11, Rule IV, Book III, Omnibus
Rules Implementing the Labor Code)
6. Under other circumstances analogous or
similar to the foregoing as determined by the
SOLE. (Art. 92, LC) Legal Holiday
It is a day designated or set apart by the legislature,

Q: Is the aforementioned list exclusive?
for a purpose within the meaning of the term
"holiday" to commemorate an important event.
A: YES. No Ee shall be required against his will to
work on his scheduled rest day except under
circumstances provided in Art. 92. Where an Ee Regular Holidays (RHs)
volunteers to work on his rest day under other
GR: They are compensable whether worked or
circumstances, he shall express such desire in
writing, subject to the rule regarding additional unworked subject to certain conditions. They are
also called “legal holidays.”
compensation.
Employee Volunteers to Work on his Rest Day XPN: A legal holiday falling on a Sunday creates no
legal obligation for the Er to pay extra, aside from
Under Other Circumstances
the usual holiday pay, to its monthly-paid Ees.
He may be allowed to do so, provided he shall (Wellington Investment and Manufacturing Corp. v.
Trajano, G.R. No. 114698, 03 July 1995)
express it in writing subject to additional
compensation. (Sec. 6(2), Rule III, Book III, IRR, LC)
Q: Lawyer Antonio Martin recently formed a law

partnership with five other lawyer-friends of
his. They hired two office secretaries, an
accounting clerk-cashier, one bookkeeper, and
two messengers. You are among three associate
attorneys. The workweek is Monday to Friday.
There is no vacation leave, but sick leave is 15
days for every year of continuous and
satisfactory service.
Managing partner Martin is preparing a set of

personnel policies in terms and conditions of
employment for the staff and has asked you to
give him a brief memo on the questions listed
below. Should the law firm schedule a rest day
for the employees, including you? (1987 BAR)
A: NO. There is no need under the LC to schedule a

rest day. Under the Code, it requires an employer to
provide each of his employees a weekly rest day
after every six consecutive normal work days. Here,
the work week is such that it is for five (5) days. The
Saturdays and Sundays when the employees are not
2024 GOLDEN NOTES
Regular Holidays and Special Holidays and cessation of work is due to business reverses,
the Er may not pay the Ees during such period.
HOLIDAY DATE
Muslim Holidays (MHs)
REGULAR HOLIDAYS
(E.O. No. 292, as amended by R.A. No. 9849)
1. Amun Jadid (New Year) – falls on the first day
New Year’s Day January 1
of the first lunar month of Muharram;
Araw ng Kagitingan Monday nearest April 9
Maundy Thursday Movable date 2. Maulid-un-Nabi (Birthday of the Prophet
Good Friday Movable date Muhammad) falls on the 12th day of the third
lunar month of Rabi-ul-Awwal; and
Labor Day Monday nearest May 1
Independence Day June 12 3. Lailatul Isra Wal Mi'raj (Nocturnal Journey
National Heroes Day Last Monday of August and Ascension of the Prophet Muhammad) –
falls on the 27th day of the seventh lunar month
Eid’l Fitr Movable date
of Rajab. (Art. 169, P.D. No. 1083)
Eid’l Adha Movable date
Monday nearest NOTE: Muslim holidays shall be officially observed
Bonifacio Day
November 30 in the Provinces of Basilan, Lanao del Norte, Lanao
Christmas Day December 25 del Sur, Maguindanao, North Cotabato, Sultan
Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and
Monday nearest
Rizal Day Zamboanga del Sur, and in the Cities of Cotabato,
December 30
Iligan, Marawi, Pagadian, and Zamboanga and in
SPECIAL (NON-WORKING) HOLIDAYS
such other Muslim provinces and cities as may
(E.O. No. 292, as amended by R.A. No. 9849, as
hereafter be created. Upon proclamation by the
further amended by R.A. No. 10966)
President of the Philippines, Muslim holidays may
Monday nearest
Ninoy Aquino Day also be officially observed in other provinces and
August 21
cities. (Art. 170, P.D. No. 1083)
All Saints Day November 1
Feast of Immaculate Determination of Eid’l Fitr and/or Eid’l Adha
December 8
Conception of Mary
Last day of the year December 31 The proclamation declaring a national holiday for
the observance of Eid’l Fitr and/or Eid’l Adha shall
Other holidays declared by law and ordinance
be issued:
NOTE: Every worker shall be paid his regular daily 1. After the approximate date of the Islamic
wage during regular holidays; the computation of holiday has been determined in accordance
which is determined by a legal formula which is not with the:
changed by the fact that there are two holidays a. Islamic Calendar (Hijra);
falling on one day. (Asian Transmission Corp. v. Court b. Lunar Calendar; or
of Appeals, G.R. No. 144664, 15 Mar. 2004) c. Upon astronomical calculations,
whichever is possible or convenient;
For movable days, the President shall issue a and
proclamation, at least six (6) months prior to the
holiday concerned, the specific date that shall be 2. The Office of Muslim Affairs shall inform the
declared as a non-working day. (R.A. No. 9492) Office of the President on which day the holiday
shall fall. (Proc. 295, s. 2011)
RH falling within temporary or periodic shutdown
and temporary cessation of work are compensable.
However, if the temporary or periodic shutdown
2024 GOLDEN NOTES
Christian Ee Working Within the Muslim Area
Cannot be Compelled to Work During Muslim A: The employee will receive 200% of his regular
Holiday daily wage when both regular holidays fall on the
same day and he does not work. The law provides
All workers, Muslims and Christians, working that he shall receive his regular daily wage for each
within the Muslim area are entitled to holiday pay regular holiday. The employee will receive 100% for
on Muslim holidays. (SMC v. CA, G.R. No. 146775, 30 Araw ng Kagitingan and 100% for Good Friday. If he
Jan. 2002) works on that day, he is entitled to 400% of his
regular daily wage, otherwise, there will be a
Muslim Ee Working Outside the Muslim Area diminution of benefits. (Asian Transmission Corp. v.
Cannot be Compelled to Work During the Court of Appeals, G.R. No. 144664, 15 Mar. 2004)
Observance of the MH
NOTE: Medical representatives who do not obtain
GR: Muslim Ees shall be excused from work during prodictivity allowances by virtue of generated sales
MH without diminution of salary or wages. are excluded from “basic salary” for the purposes of
XPN: Those who are permitted or suffered to work the computation of 13th month pay. (Philippine
on MH are entitled to at least 100% basic pay + Duplicators, Inc. v. NLRC G.R. No. 110068, 15 Feb.
100% as premium of their basic pay. (Ibid.) 1995)
Rule as to Payment of Regular Muslim Holidays Q: Nico is a medical representative engaged in

the promotion of pharmaceutical products and
There is no distinction between Muslims and non– medical devices for Northern Pharmaceuticals,
Muslims as regards payment of benefits for Muslim Inc. He regularly visits physicians' clinics to
holidays. Muslims throughout the Philippines are inform them of the chemical composition and
also entitled to holiday pay on Christian holidays benefits of his employer's products. At the end of
declared by law as regular holidays. Wages and every day, he receives a basic wage of Php 700.00
other emoluments granted by law are determined plus a Php 150.00 “productivity allowance.” For
on the basis of the criteria laid down by laws and purposes of computing Nico's 13th month pay,
certainly not on the basis of the worker's faith or should the daily “productivity allowance” be
religion. The law on holiday pay knows no religion. included? (2018 BAR)
(Ibid.)
A: NO. The second paragraph of Sec. 5(a) of the
Holiday Swapping Revised Guidelines Implementing the 13th Month
Pay Law states that “employees who are paid a fixed
In the event the holiday falls on a Wednesday, the or guaranteed wage plus commission are also
holiday will be observed on the Monday of that entitled to the mandated 13th month pay, based on
week. their total earnings during the calendar year, i.e., on
both their fixed or guaranteed wage and
If the holiday falls on a Sunday, the holiday will be commission.”
observed on the Monday that follows. However, the Court in Philippine Duplicators, Inc. v.
NLRC (G.R. No. 110068, 15 Feb. 1995), declared the
Q: During the open forum following your lecture aforesaid provision as null and void with respect to
before members of various unions affiliated those medical representatives who do not obtain
with a labor federation, you were asked the productivity allowances by virtue of generated
following question: sales. Such allowances are in the nature of profit-
sharing bonuses or commissions that should be
Araw ng Kagitingan and Good Friday are among properly excluded from the ambit of the term “basic
the 10 paid regular holidays under Art. 94 of the salary” for purposes of computing 13th month pay
LC. How much will an employee receive when due to employees.
both holidays fall on the same day? (2005 BAR)
2024 GOLDEN NOTES
5. SERVICE CHARGES Service Charge vs. Tips
(Art. 96, LC; Secs. 1-7, Rule VI, Book III, Omnibus
Rules Implementing the Labor Code; R.A. No. SERVICE CHARGE TIPS
11360; DOLE D.O. No. 206-19; DOLE L.A. No. 14- Voluntary payments
Collected by the
19) made by the customers
management from the
to the Ees for excellent
customers.
These are charges collected by hotels, restaurants, service.
and similar establishments distributed completely
and equally among the covered workers except Tips
managerial Ees. (Art. 96, LC, as amended by Sec. 1,
R.A. No. 11360) Tips are handled similarly as service charges.
Pooled tips should be monitored, accounted for, and
Covered Employees distributed in the same manner as the service
charges.
GR: All Ees are covered, regardless of their position, A waiter must drop in a tip box the tips he received.
designation, and employment status, irrespective of Otherwise, he commits “tip pocketing,” a serious
the method by which their wages are paid. offense of dishonesty that may cost them their job.
NOTE: Applies only to hotels, restaurants, and other Rule if Service Charge Is Abolished
similar establishment such as but not limited to
lodging houses, nightclubs cocktails lounge, If it is abolished, the share of the covered Ees shall
massage clinics, bars, casinos and gambling houses be considered integrated in their wages on the basis
and sports clubs (DOLE D.O 242, s. 2024) of the average monthly share of each Ees for the past
twelve (12) months immediately preceding the
XPN: Managerial Ees (Sec. 2, Rule VI, Book III, IRR, abolition. (Sec. 5, Rule V, Book III, IRR, LC)
LC)
NOTE: Service charges form part of the award in
Distribution of Service Charges illegal dismissal cases.
Previously, all service charges collected by covered Compliance with Minimum Wage
Ers are required to be distributed at the rate of 85%
for all covered Ees and 15% for management. Service charges paid to the covered Ees shall not be
considered in determining the Er’s compliance with
R.A. No. 11360 amended Art. 96 of the LC wherein the the increased minimum wage. (Art. 96, LC, as
former provides that all service charges collected by amended by Sec. 1, R.A. No. 11360)
hotels, restaurants and similar establishments shall
be distributed completely and equally among the 6. OCCUPATIONAL SAFETY AND HEALTH
covered workers except managerial Ees. STANDARDS LAW
(Secs. 4-6, 8 and 12, R.A. No. 11058)
Frequency of Distribution
Occupational Safety and Health Standards Law

The period is not less than once every two (2) weeks
(OSHSL)
or twice a month at intervals not exceeding 16 days.
(Sec. 4, IRR, R.A. No. 11360)
Under this law, the Er is required to observe safety
standards and provide safety devices. On the part of
the Ee, the Implementing Rules require proper use
of these safeguards and devices. (Azucena, 2021)
2024 GOLDEN NOTES
Coverage as personal protective equipment (PPE) and
machine guards;
GR: This Act shall apply to all establishments,
projects, sites, including Philippine Economic Zone 6. Allow workers and their safety and health
Authority (PEZA) establishments, and all other representatives to participate actively in the
places where work is being undertaken in all process of organizing, planning, implementing
branches of economic activity and evaluating the safety and health program to
improve safety and health in the workplace; and
XPN: Public sector. (Sec. 2, R.A. No. 11058)
7. Provide, where necessary, for measures to deal
Covered Workplaces with emergencies and accidents including first-
aid arrangements. (Sec. 4(a), R.A. No. 11058)
Covered workplaces refer to establishments,
projects, sites and all other places where work is Worker’s Duties
being undertaken wherein the number of Ee, nature
of operations, and risk or hazard involved in the Every worker shall:
business, as determined by the SOLE, require
compliance with the provisions of this Act. (Sec. 1. Participate in ensuring compliance with OSH
3(c), R.A. No. 11058) standards in the workplace.
Duties of the Employer 2. Make proper use of all safeguards and safety
devices furnished for the worker's protection
Every Er, contractor or subcontractor, if any, and any and that of others and shall observe
person who manages, controls or supervises the instructions to prevent accidents or imminent
work being undertaken shall: danger situation in workplace.
1. Furnish the workers a place of employment free 3. Observe the prescribed steps to be taken in
from hazardous conditions that are causing or cases of emergency.
are likely to cause death, illness or physical
harm to the workers; 4. Report to the supervisor any work hazard that
may be discovered in the workplace. (Sec. 4(b),
2. Give complete job safety instructions or R.A. No. 11058)
orientation to all the workers especially to
those entering the job for the first time, Any Other Person’s Duties
including those relating to familiarization with
their work environment; It shall be the duty of any person, including the
builder or contractor who visits, builds, renovates,
3. Inform the workers of the hazards associated or installs devices or conducts business in any
with their work health risks involved to which establishment or workplace to comply with the
they are exposed to, preventive measures to provisions of this Act and all other regulations
eliminate or minimize the risks, and steps to be issued by the SOLE. (Sec. 4(c), R.A. No. 11058)
taken in cases of emergency;
NOTE: Whenever two (2) or more undertakings are
4. Use only approved devices and equipment for engaged in activities simultaneously in one (1)
the workplace; workplace, it shall be the duty of ALL engaged to
collaborate in the application of OSH standards and
5. Comply with OSH standards including training regulations. (Sec. 4(d), R.A. No. 11058)
medical examination and where necessary,
provision of protective and safety devices such
2024 GOLDEN NOTES
Workers’ Right to Know
A: YES. There is no dispute that our public health
The right to safety and health at work shall be workers are entitled to hazard allowances under
guaranteed. All workers shall be appropriately Sec. 21 of R.A. No. 7305. However, the IRR of R.A. No.
informed by the Er about all types of hazards in the 7305 provides: Public health workers shall be
workplace, provided access to training and compensated hazard allowances equivalent to at
education on chemical safety, electrical safety least five percent (5%) for health workers with
mechanical safety, and ergonomical safety. (Sec. 5, salary grade 20 and above. This may be granted on
R.A. No. 11058) a monthly, quarterly or annual basis. The public
health workers exposed to high risk hazard may
Workers’ Right to Refuse Unsafe Work receive a hazard pay not exceeding 5% higher than
those prescribed above.
The worker has the right of refusal to work without
threat or reprisal from the Er if, as determined by Accordingly, the Court ruled that the DOH exceeded
the DOLE, an imminent danger situation exists in its limited power of implementing the provisions of
the workplace that may result in illness, injury, or RA No. 7305 in fixing an exact amount of hazard pay
death and corrective actions to eliminate the danger for public health workers with SG 20 and above. The
have not been undertaken by the Er. (Sec. 6, R.A. No. DOH AO was void on its face for being ultra vires
11058) unreasonable insofar as it conflicts with RA No.
7305. It is hornbook that an administrative agency,
Workers’ Right to Personal Protective like the DOH, cannot amend an act of Congress.
Equipment (PPE) Moreover, while the Court sustained the
disallowance as the fixed amount of hazard pay
Every Er, contractor or subcontructor, if any, shall granted was based on a void administrative
provide his workers, free of charge, protective issuance, the Court found sufficient justification to
equipment for their eyes, face, hands and feet, and excuse the health Ee’s liability on equitable grounds.
free, and lifeline, safety belt or harness, gas or dust They were entitled to the grant of hazard pay under
respirators or masks, protective shields whenever the law. The clear, direct, and reasonable connection
necessary by reason of the hazardous work process of the fair amount of hazard allowances to the actual
or environment, chemical, radiological, mechanical performance of Ee’s official work could not be
and other irritants or hazards capable of causing denied. It was only the DOH's irregular
injury or impairment in the function of any part of implementation of such grant that caused the
the body through absorption, inhalation or physical disallowance of the overpayments. Thus, the Court
contact. could not brush aside the deplorable inequity that
will be caused to Ee’s. if ordered to refund the
NOTE: The cost of the PPE shall be part of the safety disallowed amounts, which were purposely given to
and health program which is a separate pay item compensate for the life-threatening risks that they
pursuant to Sec. 20 of this Act. (Sec. 8, R.A. No. had to endure in the performance of their duties and
11058) service to the public. (Abrenica v. Commission on
Audit, G.R. No. 218185, 14 Sept. 2021, as penned by
Q: A group of health employees received a fixed J. M.V. Lopez)
amount of hazard pay which was not in accord
with Sec. 21 of RA 7305 otherwise known as The
Magna Carta of Public Health Workers which
prescribed hazard allowances to be equivalent
to at least 5% of the monthly basic salary of
health workers within SG 20 and above.
However, those paid beyond 5% of the workers’
basic salary were disallowed. Was the hazard
pay properly disallowed?
2024 GOLDEN NOTES
Agricultural Work
B. WAGES
It refers to all farming activities in all its branches
and includes among others, the cultivation and
tillage of the soil, production, cultivation, growing
1. COMPONENTS AND EXCLUSIONS and harvesting of any agricultural or horticultural
commodities, dairying, raising of livestock or
a. WAGES poultry, the culture of fish and other aquatic
(Art. 97(f), LC) products in farms or ponds, and any activities
performed by a farmer or on a farm as an incident to
“Wage” is the remuneration or earnings, however or in conjunction with such farming operations, but
designated, capable of being expressed in terms of does not include the manufacturing and/or
money, whether fixed or ascertained on a time, task, processing of sugar, coconut, abaca, tobacco,
piece, or commission basis, or other method of pineapple, aquatic or other farm products. (Art. 97
calculating the same, payable by an Er to an Ee (d), LC)
under a written or unwritten contract of
employment: Wage vs. Salary
1. For work done or to be done, or for services WAGE SALARY

rendered or to be rendered; and
Applies to the
compensation for
2. Includes fair and reasonable value of board, Denotes a higher
manual labor, skilled,
lodging, or other facilities customarily degree of employment
or unskilled, paid at
furnished by the Er to the Ee as determined by or a superior grade of
stated times, and
SOLE. services and implies a
measured by the day,
position of office.
week, month, or
NOTE: “Fair and reasonable value” shall not include
season.
any profit to the Er or to any person affiliated with
the Er. (Art. 97(f), LC)
Suggestive of a larger
Indicates considerable
Twin Attributes of Wages and more important
pay for a lower and less
service. (Gaa v. CA, G.R.
responsible character
1. Cash wage takes the form of ready money paid No. L-44169, 03 Dec.
of employment.
by the Er for services rendered by the Ee. 1985)
2. Facilities are articles or services customarily

NOTE: In many situations, however, the words
given for the benefit of the Ee and are
"wages" and "salary" are synonymous. (Azucena,
voluntarily accepted by him.
2021)
NOTE: The term “wages” also covers all benefits of

“Wages” Include Sales Commissions
the Ee under the CBA such as severance pay,
educational allowance, accrued vacation leave
In as much as the words “wage,” “pay,” and “salary”
earned but not enjoyed, as well as workmen's
have the same meaning, and commission is included
compensation awards and unpaid salaries for
in the definition of “wage,” the logical conclusion is,
services rendered. (PNB v. Cruz, G.R. No. 80593, 18
in the computation of the separation pay, the salary
Dec. 1989)
base should also include the earned sales
commissions. (Songco et al. v. NLRC, G.R. Nos. 50999-
51000, 23 Mar. 1990)
2024 GOLDEN NOTES
Requirements for Deducting Values for Facilities
b. FACILITIES
1. Proof must be shown that such facilities are
Facilities as Part of Wages customarily furnished by the trade;
“Facilities” shall include articles or services for the NOTE: It is important to determine when
benefit of the Ee or his family but shall not include facilities are customarily furnished or not, for
tools of the trade or articles or service primarily for the fair and reasonable value of facilities not
the benefit of the Er or necessary to the conduct of customarily furnished cannot be charged
the Er’s business. (Sec. 5, Rule VII-A, Book III, IRR) against the cash wage.
Facilities are items of expense necessary for the For example, a messenger who slept in the
laborer's and his family's existence and subsistence office cannot be charged by the Er for housing
so that by express provision of law, they form part of allowance because the office is not a regular
the wage and when furnished by the Er are sleeping quarter. On the other hand, housing
deductible therefrom, since if they are not so quarters are common in a mining industry;
furnished, the laborer would spend and pay for hence, the latter can charge its Ees for housing
them just the same. (Our Haus Realty Development quarter. (Mabeza v. NLRC, G.R. No. 118506, 18
Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014) Apr. 1997)
e.g., Rice ration, housing, recreational facilities,
medical treatment to dependents, school facilities, 2. The provision of deductible facilities must be
cost of light, water, fuel, meals, or snacks (Atok Big voluntarily accepted in writing by the Ee; and
Wedge Mutual Benefit Association v. Atok Big Wedge
Mining Co., G.R. No. L-7349, 19 Jul. 1955; Mayon Hotel 3. The facilities must be charged at fair and
v. Adana, G.R. No. 157634, 16 May 2005) reasonable value. (Ibid.)
Facilities Exclude Profit NOTE: Where the facilities are given free of charge
by the Er and there is no prior agreement to deduct
The value of facilities should not be more than the the cost of said facilities from the wages of the Ees,
actual cost to the Er of the board, lodging, or other the Er cannot subsequently charge the cost of the
facilities customarily furnished by him to his Ees. facilities or otherwise avail of the order. (Sec. 2(g),
The "fair and reasonable value" does not include any Rule IV, DO 126-13)
profit to the Er or to any persons affiliated with the
Er. Voluntary Acceptance of Facilities
Significance of Determination of Facilities Acceptance of facilities is voluntary, for to compel

Beneficial to Er or Ee the Ee to accept such facilities against his will would
be violative of the fundamental right of Ee to the free
It is significant to determine when articles or disposal of his wage guaranteed under Art. 112.
services are beneficial to an Ee because those (Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997)
articles or services which are advantageous to the
Ee cannot be charged against the cash wage of an Ee.
Articles or tools of the trade that are primarily for
the benefit of the Er or necessary to the conduct of
his business cannot be deducted from the Er's
wages because they are not considered as facilities.
2024 GOLDEN NOTES
the wages even though it clearly works to the Er’s
c. SUPPLEMENTS greater convenience or advantage.
FACILITIES SUPPLEMENT Under the purpose test, substantial consideration

As to their Nature must be given to the nature of the Er’s business in
Extra remuneration or relation to the character or type of work performed
Items of expense
benefits by the Ees involved. (Our Haus Realty Development
As to their Inclusion to Wage Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014)
Forms part of the wage Independent of wage
As to their Deductibility Tips Not Part of Wages; Element of Compulsion
Deductible from the in Tipping
Not wage deductible
wage
To whose Benefit Wage is the remuneration directly paid by the Er to
For the benefit of the Granted for the an Ee. On the other hand, tips are paid directly to an
worker and his family convenience of the Er Ee by the customer; hence, they fall short of the
definition provided in Art. 97.
Supplements Not Part of Wages
Although a tip denotes a voluntary act, it lacks the
Supplements are extra remunerations or benefits essential element of a gift, that is, the free bestowing
of a gratuity without consideration. Despite its
given to or received by laborers over and above their
apparent voluntariness, there is an element of
ordinary earnings or wages.
compulsion in tipping. (Ace Navigation Co., Inc. v.
C.A., G.R. No. 140364. 15 Aug. 2000)
Since they are not considered as part of wages, their
value cannot be deducted from the cash wage of an
Ee. Status of Food and Lodging, or the Electricity and
Water Consumed by a Hotel Worker
Examples are vacation leave pay, overtime pay in
These are supplements. Considering, therefore, that
excess of the legal rate, profit-sharing benefits, sick
hotel workers are required to work different shifts
pension, retirement and death benefits, family
allowances, Christmas bonus, war-risk or cost-of- and are expected to be available at various odd
hours, their ready availability is a necessary matter
living bonuses or other bonuses other than those
in the operations of a small hotel.
paid as reward for extra output or time spent on the
jobs. (Atok Big Wedge Mining Co. v. Atok Big Wedge
Furthermore, granting that meals and lodging were
Mutual Benefit Assoc., G.R. No. L-7349, 19 Jul. 1955)
provided and indeed constituted facilities, such
Criterion in Determining Whether an Item is a facilities could not be deducted without the Er
complying first with certain legal requirements.
Supplement or Facility
(Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997)
The criterion in making a distinction between the
Q: Gamma Company pays its regular Ees P350.00
two not so much lies in the kind (food, lodging) but
a day and houses them in a dormitory inside its
the purpose (Mabeza v. NLRC, G.R. No. 118506, 18
Apr. 1997) factory compound in Manila. Gamma Company
also provides them with three full meals a day. In
the course of a routine inspection, a DOLE
If it is primarily for the Ee’s gain, then the benefit is
a facility; if its provision is mainly for the Er’s Inspector noted that the workers' pay is below
the prescribed minimum wage of P426.00 plus
advantage, then it is a supplement. Again, this is to
ensure that Ees are protected in circumstances P30.00 allowance, and thus required Gamma
Company to pay wage differentials.
where the Er designates a benefit as deductible from
2024 GOLDEN NOTES
Gamma Company denies any liability, explaining
that after the market value of the company- d. BONUS
provided board and lodging are added to the
Ees' P350 cash daily wage, the Ees' effective daily Rule on Demandability and Enforceability of
rate would be way above the minimum pay Bonus
required by law. The company counsel further
points out that the Ees are aware that their food A bonus is an amount granted and paid ex gratia to
and lodging form part of their salary and have the employee.
long accepted the arrangement. Is the
company's position legally correct? (2013 BAR) It cannot be forced upon the employer who may not
be obliged to assume the onerous burden of
A: NO. The following requisites were not complied granting bonuses or other benefits aside from the
with: employees’ basic salaries or wages. If there is no
profit, there should be no bonus.
1. Proof that such facilities are customarily
furnished by the trade; If profit is reduced, bonus should likewise be
reduced, absent any agreement making such bonus
2. The provision of deductible facilities is part of the compensation of the employees. (Chan,
voluntarily accepted by the Ee; and, 2019)
3. The facilities are charged at a fair and e. 13TH MONTH PAY

reasonable value. Mere availment is not (P.D. No. 851; Revised Guidelines on The
sufficient to allow deduction from Ee’s wages. Implementation of the 13th Month Pay Law)
(Mayon Hotel & Restaurant v. Adarna, G.R. No.
157634, 16 May 2005) 13th Month Pay or its Equivalent
Gratuity It is a form of monetary benefit equivalent to the

It is something given freely or without recompense; monthly basic compensation received by an Ee,
a gift; something voluntarily given in return for a computed pro-rata according to the number of
favor or services. months within a year that the Ee has rendered
service to the Er. (DOLE’s BWC issues Q & A on 13th
Gratuity pay is not intended to pay a worker for month pay)
actual services rendered. It is a money benefit given “Its equivalent”
to the workers whose purpose is to reward them in
return for a satisfactory work and efficient service Jurisprudence has interpreted the term “its
to the company. equivalent” to approximate the legal requirement in
all respects. If the grant is at variance with the law,
While it may be enforced once it forms part of a it is regarded as a contractual obligation distinct
contractual undertaking, the grant of such benefit is from the legal obligation.
not mandatory so as to be considered a part of labor
standard law unlike salary, cost-of-living- The grant must reflect the same intent as the law,
allowances, holiday pay, leave benefits, etc., which namely, magnanimity. If the bonus is provided in
are covered by the Labor Code. (Azucena, 2016) graduated amounts depending on the length of
service of Ees, its purpose is to give bigger awards to
long-service Ees, which is a purpose not found in the
law. Hence the provision is meant to be in addition
to the legal requirement. (United CNC Textile
Workers Union v. Valenzuela, G.R. No. 70763, 30 Apr.
1987; Universal Corn Products v. NLRC, G.R. No. L-
60337, 21 Aug. 1987)
2024 GOLDEN NOTES
Illustration:
Formula and Computation of 13th Month Pay Using the basic wage in the NCR at Php 570.00 per
day and a six-day workweek or an equivalent
Monthly Basic Salary of P14,867.50.
( 570×313�12 months�):
Where: January no absence P14,867.50
February no absence P14,867.50
March no absence P14,867.50
NOTE: The minimum wage in NCR is Php 570.00. company
April no salary
(Wage Order No. NCR-23) shutdown
company
May no salary
As to the number of days worked per year: shutdown
5 days leave
June P14,867.50
1. 393.80 – For those who are required to work w/pay
everyday, including Sundays or rest days, company
July no salary
special days, and regular holidays; shutdown
company
August no salary
2. 313 – For those who do not work and are not shutdown
considered paid on Sundays or rest days; 10 days leave
September P9,167.50
w/o pay
3. 261 – For those who do not work and are not October no absence P14,867.50
considered paid on Saturdays and Sundays or 1 day leave w/o
November P14,297.50
rest days pay
December no absence P14,867.50
Total basic salary earned
P112,670.00
for the year
P112,670.00�12 months� = Php 9,389.17 is the

proportionate 13th month pay (2022 Handbook on
Worker’s Statutory Monetary Benefits)
Basic Salary
Includes all remunerations or earnings paid by the

Er to an Ee for services rendered including cost-of-
living allowances.
It does not include all allowances and monetary

benefits which are not considered or integrated as
part of the regular or basic salary such as:
1. Cash equivalent of unused vacation and sick

leave credits;
2. Overtime pay;
3. Premium pay;
4. Night Shift Differential;
5. Holiday pay; and
6. Commissions
2024 GOLDEN NOTES
XPN: If it is an integral part of the basic salary. otherwise exempted from paying the 13th
(Philippine Duplicators, Inc. v. NLRC, G.R. No. 110068, month pay. Such Ees are entitled to the 13th
15 Feb. 1995) month pay regardless of said designation of
employment status, and irrespective of the
These salary-related benefits should be included in method by which their wages are paid.
the computation of the 13th moth pay if by individual
or collective agreement, company practice or policy, Provided, that they have worked for at least
the same are treated as part of the basic salary of the one month, during a calendar year. (Revised
Ees. Guidelines on the Implementation of the 13th
Month Pay Law)
Time of Payment of 13th Month Pay
XPNs:
Under P.D. No. 851, all Ers are required to pay all a. Government Ees;
their rank-and-file Ees, a 13th month pay not later b. Ees paid purely on commission basis;
than Dec. 24 of every year. c. Ees already receiving 13th month pay;
d. Managers; and
Absence of CBA Provision Not a Bar in Giving 13th e. Seafarers.
Month Pay
NOTE: Managerial Ees may receive 13th month
The absence of an express provision in the CBA pay if they are granted under an employment
obligating the Er to pay the members of a union 13th contract or a company policy or practice.
month pay is immaterial. Notwithstanding therefore (Chan, 2019)
the absence of any contractual agreement, the
payment of a 13th month pay, being a statutory 2. Ers
grant, is mandatory and is deemed incorporated in
the CBA. GR: All Ers are covered by P.D. No. 581.
Nature of 13th Month Pay XPNs:

a. The Government and any of its political
Such is in the nature of additional income granted to subdivisions, including GOCCs;
Ees who are not receiving the same. (Agabon v.
NLRC, G.R. No. 158693, 17 Nov. 2004) XPN to this XPN: Corporations
operating essentially as private
It is based on wage but not part of wage. (Central subsidiaries of the Government.
Azucarera de Tarlac v. Central Azucarera de Tarlac
Labor Union-NLU, G.R. No. 188949, 26 Jul. 2010) b. Ers already paying their Ees 13th
month pay or more in a calendar year
Minimum Period of Service Required in its equivalent at the time of the
issuance of the Revised Guidelines;
It is imposed as a “minimum service requirement”
that the Ee should have worked for at least one (1) c. Ers of those who are paid on purely
month during a calendar year. (No. X(A), DOLE basis of:
Handbook on Workers Statutory Monetary Benefits) i. Commission;
Persons Covered by P.D. No. 851 NOTE: Bus drivers and conductors
1. Ees who are paid a fixed or guaranteed
minimum wage, in case their
GR: All rank-and-file Ees are covered by PD commission be less than the
851 regardless of the amount of basic salary statutory minimum, are entitled to a
that they receive in a month, if their Ers are not 13th-month pay equivalent to 1/12
2024 GOLDEN NOTES
of their total earnings during the kasambahay is entitled to 13th month pay as
calendar year. (Philippine provided by law. (Sec. 25, Art. IV, R.A. No. 10361,
Agricultural Commercial and otherwise known as the “Domestic Workers Act”)
Industrial Workers Union v. NLRC,
G.R. No. 107994, 14 Aug. 1995) Options of Covered Ers
ii. Boundary; or 1. Pay 1/2 of the 13th month pay required before
iii. Task; and the opening of the regular school year and the
iv. Fixed amount for performing a other half on or before the 24th day of
specific work irrespective of the December of every year.
time consumed in the
performance thereof. 2. In any establishment where a union has been
recognized or certified as the CB agent of the Ee,
XPN: Where the workers are paid the periodicity or frequency of payment of the
on a piece-rate basis, in which case, 13th month pay may be the subject of
the Er shall be covered by the agreement.
Revised Guidelines insofar as the
workers are concerned. Other Types of Employment Entitled to 13th
Month Pay
NOTE: Piece-Rate Workers refer to
those who are paid a standard 1. Part-time Ee; (Item 5(b), Revised Guidelines of
amount for every piece or unit of PD 851)
work produced that is more or less 2. Extras;
regularly replicated without regard 3. Casual Ee; and
to the time spent in producing the 4. Seasonal Ee. (BWC Opinion, 19 Dec. 1987)
same.
Q: What would be your advice to your client, a
d. Distressed Ers: manufacturing company, who asks for your legal
i. Currently incurring substantial opinion on whether or not the 13th Month Pay
losses; or Law covers a casual Ee who is paid a daily wage?
(1998 BAR)
ii. In the case of non-profit
institutions and organizations, A: I will advise the manufacturing company to pay
where their income, whether the casual Ee 13th Month Pay if such casual Ee has
from donations, contributions, worked for at least one month in a calendar year.
grants, and other earnings from The law on 13th Month Pay provides that Ees are
any source, has consistently entitled to the benefit of said law regardless of their
declined by more than 40% of designation or employment status.
their normal income for the last
two (2) years, subject to the NOTE: Ees are entitled to the 13 th month pay
provision of Sec. 7 of P.D. 851. benefits regardless of their designation and
irrespective of the method by which their wages are
Domestic Workers or Kasambahays paid. (Jackson Building-Condominium Corp. v. NLRC,
G.R. No. 112546, 14 Mar. 1996)
Previously, not covered by 13th month pay law are
Ers of household helpers and persons in the Equivalent Forms of the 13th Month Pay
personal service of another in relation to such
workers. However, the Batas Kasambahay or 1. Christmas Bonus;
Domestic Workers Act is now explicit in its 2. Midyear Bonus;
commandment that a domestic worker or 3. Profit Sharing Scheme; and
2024 GOLDEN NOTES
4. Other Cash bonuses amounting to not less than Company make in order to exclude from
1/12 of its basic salary the 13th month pay all earnings and
remunerations other than the basic pay?
Where an employer pays less than 1/12th of the
employee's basic salary, the employer shall pay A: The company should include sales commissions
the difference. (DOLE Philippines v. Hon. based on the settled rule. (Songco v. NLRC, G.R.
Leogardo and Associated Labor Union, G.R. No. L- No. L-50999, 23 Mar. 1990)
60018, 23 Oct. 1982)
Adjudicated Claims
NOTE: It must always be in the form of a legal tender.
Non-payment of the 13th month pay provided by P.D.
Things Not Proper Substitutes For 13th Month 851 and the rules of NLRC shall be treated as money
Pay claims cases.
1. Free rice; NOTE: Difference of opinion on how to compute the

2. Electricity; 13th month pay is non-strikeable and a strike held
3. Cash and stock dividends; and on that ground is illegal. (Isalama Machine Works
4. Cost-of-living Allowance. (Sec. 3, P.D. 85) Corp. v. NLRC, G.R. No. 10016, 02 Mar. 1995)
Q: Concepcion Textile Co. included the OT pay, The following Ees may or may not be entitled to
night-shift differential pay, and the like in the 13th month pay
computation of its Ees’ 13th month pay.
Subsequently, with the promulgation of the 1. Ee paid by results – Entitled to 13th month
decision of the SC in the case of SMC v. Inciong pay;
(G.R. No. L-49774, 24 Feb. 1981) holding that
these other monetary claims should not be NOTE: Ees paid a fixed or guaranteed wage
included in the computation of the 13th Month plus commission are also entitled to the
Pay, Concepcion Textile Co. sought to recover mandated 13thmonth pay, based on their total
under the principle of solutio indebiti the earnings during the calendar year, i.e., on both
overpayment of the Ees’ 13th month pay, by their fixed or guaranteed wage and
debiting against future 13th month payments commission.
whatever excess amounts it had previously
made. 2. Those with Multiple Ers – Government Ees
working part time in a private enterprise,
a) Is the Company's action tenable? including private educational institutions, as
well as Ees working in two or more private
A: NO. The Company's action is not tenable. The firms, whether full or part time basis, are
principle of solutio indebiti which is a civil law entitled to the required 13th month pay from all
concept is not applicable in labor law. (Davao Fruits their private Ers regardless of their total
Corp. v. NLRC, et al., G.R. No. 85073, 24 Aug. 1993) earnings from each or all their Ers; (Revised
After the 1981 SMC ruling, the Court decided the Guidelines on the Implementation of 13th Month
case of Philippine Duplicators Inc. v. NLRC (G.R. No. Pay Law)
110068, Nov. 15, 1995). Accordingly, management
may undertake to exclude sick leave, vacation leave, 3. Private School Teachers, including faculty
maternity leave, premium pay for regular holiday, members of universities and colleges –
night differential pay, and cost of living allowance. Entitled regardless of the number of months
they teach or are paid within a year, if they
b) With respect to the payment of the have rendered service for at least one (1)
13th month pay after the SMC ruling, month within a year;
what arrangement, if any, must the
2024 GOLDEN NOTES
4. Resigned or Separated Ees – If resigned or a) Is Dennis entitled to 13th month pay
separated from work before the time of and service incentive leave (SIL) pay?
payment of 13th month pay, entitled to Explain.
monetary benefits in proportion to the length
of time he started working during the calendar A: NO. A taxi driver paid under the “boundary
year up to the time of resignation or system” is not entitled to a 13th month pay and a
termination of service (Pro-rated 13th month SIL pay. Hence, his retirement pay should be
pay); (Sec. 6, DOLE Revised Guidelines on 13th computed solely on the basis of his salary.
Month Pay) and Specifically, Sec. 3(e) of the Rules and Regulations
Implementing P.D. 851 excludes from the obligation
5. Ees who are paid a fixed or guaranteed wage of 13th Month Pay “Employers of those who are
plus commission – also entitled to the 13th- paid on… boundary” basis. On the other hand, Sec.
month pay, based on their earnings during the 1(d), Rule V, Book III of the Omnibus Rules provides
calendar year (i.e., on both their fixed or that those “employees whose performance is
guaranteed wage and commission). unsupervised by the employer” are not entitled to
SIL. A taxi driver paid under the Boundary System
NOTE: In the consolidated cases of Boie Takeda is an “unsupervised” employee.
Chemicals, Inc. v. Dionisio de la Serna, (G.R. No. 92174,
10 Dec. 1993), and Philippine Fuji Xerox Corporation NOTE: A taxi driver is an “unsupervised employee”
v. Cresenciano Trajano and Philippine Fuji Xerox Ees and if paid under the “boundary system” is not
Union, (G.R. No. 102552, 10 Dec. 1993), the Court entitled to a 13th month pay and a SIL. (Sec. 3 (e) of
ruled that commissions, while included in the the Rules and Regulations Implementing P.D. 851
generic term wage, are not part of "basic and, Sec. 1(d), Rule V, Book III of the Omnibus Rules)
salary/wage" and therefore, should not be included
in computing the 13th month pay. b) Since he was not given his 13th
month pay and SIL pay, should Dennis
Thus, in remunerative schemes consisting of a fixed be paid upon retirement, in addition to
or guaranteed wage plus commission, the fixed or the salary equivalent to 15 days for
guaranteed wage is patently the “basic salary” for every year of service, the additional 2.5
this is what the Ee receives for a standard work days representing one-twelfth (1/12) of
period. Commissions are given for extra efforts the 13th month pay as well as the five
exerted in consummating sales or other related (5) days representing the service
transactions. They are, as such, additional pay, incentive leave for a total of 22.5 days?
which this Court has made clear do not form part of Explain.
the “basic salary.” (Boie-Takeda Chemicals Inc v. Dela
Serna, 10 Dec. 1993; Handbook on Workers’ Statutory A: NO. Since he is not entitled to 13th month pay
Monetary Benefits, Bureau of Working Conditions, and SIL, his retirement pay should be computed
2016) solely on the basis of his salary. (R&E Transport v.
Latag, G.R. No. 155214, 13 Feb. 2004; 2009-2017 UST
Q: Dennis was a taxi driver who was being paid FCL Bar Q&A)
on the “boundary” system basis. He worked
tirelessly for Cabrera Transport Inc. for NOTE: Taxi drivers do not receive fixed wages thus,
fourteen (14) years until he was eligible for the basis for computing their benefits should be the
retirement. He was entitled to retirement average daily income and retirement pay should be
benefits. During the entire duration of his computed on the sole basis of his salary. (R&E
service, Dennis was not given his 13th month Transport v. Latag, G.R. No. 155214, 13 Feb. 2004)
pay or his service incentive leave pay. (2012
BAR) Q: TRX, a local shipping firm, maintains a fleet of
motorized boats plying the island barangays of
AP, a coastal town. At day's end, the boat
2024 GOLDEN NOTES
operators/crew members turn over to the boat (Kamaya Point Hotel v. NLRC, G.R. No. 75289, 31 Aug.
owner their cash collections from cargo fees and 1989)
passenger fares, less the expenses for diesel fuel,
food, landing fees and spare parts. XPN: A bonus, however, becomes a demandable or
enforceable obligation when it is made part of the
Fifty percent (50%) of the monthly income or wage or salary or compensation of the Ee. If it is
earnings derived from the operations of the additional compensation which the Er promised
boats are given to the boatmen by way of and agreed to give without any conditions imposed
compensation. Deducted from the individual for its payment, such as success of business or
shares of the boatmen are their cash advance greater production or output, then it is part of the
and peso value of their absences, if any. Are wage. But if it is paid only if profits are realized or if
these boatmen entitled to overtime pay, holiday a certain level of productivity is achieved, it cannot
pay, and 13th month pay? (2004 BAR) be considered part of the wage.
A: NO. If the boatmen are considered employees, XPN to the XPN: Where it is not payable to all but
like jeepney drivers paid on a boundary system only to some Ees and only when their labor becomes
because they are workers who are paid by results. more efficient or more productive, it is only an
Said workers, under the LC are not entitled, among inducement for efficiency, a prize therefore, not a
others, to overtime pay and holiday pay. part of the wage. (Metro Transit Organization, Inc. v.
In accordance with the IRR of the 13th Month Pay NLRC, G.R. No. 116008, 11 July 1995)
Law, however, the boatmen are entitled to the 13th
month pay. Workers who are paid by results are to Q: ETPI (company) entered into a collective
be paid their 13th month pay. bargaining agreement with ETEU (union). A side
agreement of the said CBA provided that
NOTE: Boatmen are considered employees paid on company confirms that the 14th, 15th and
a boundary system and are not entitled to Holiday 16th month bonuses (other than 13th month pay)
pay and overtime pay but are entitled to 13th month are granted. The company then planned to defer
pay. (Azucena, 2016) the payment of the 14th, 15th and 16th month
bonuses due continuing deterioration of
Application of Pro-Ration of 13th Month Pay company’s financial position. The union
opposed and filed a preventive mediation
GR: Pro-ration of 13th month pay applies only in complaint before the NCMB. May the company
cases of resignation or separation from work. validly postpone the payment of said bonuses?
Computation should be based on length of service
and not on the actual wage earned by the worker. A: NO. A reading of the provision reveals that the
(Honda Phils. v. Samahan ng Manggagawa sa Honda, same provides for the giving of 14th, 15th and
G.R. No. 145561, 15 June 2005) 16th month bonuses without qualification. There
were no conditions specified in the CBA Side
XPN: Ees who are paid a guaranteed minimum wage Agreements for the grant of the benefits contrary to
or commissions earned are entitled to 13th Month the claim of ETPI that the same is justified only
Pay based on total earnings. (Philippine Agricultural when there are profits earned by the company. In
Commercial and Industrial Workers Union v. NLRC, fine, the payment of these bonuses was not related
G.R. No. 107994, 14 Aug. 1995) to the profitability of business operations. Verily, by
virtue of its incorporation in the CBA Side
14th Month Pay Not Legally Demandable Agreements, the grant of 14th, 15th and 16th month
bonuses has become more than just an act of
GR: The granting of 14th month pay is a management generosity on the part of ETPI, but a contractual
prerogative and is not legally demandable. It is obligation it has undertaken. (ETPI v. ETEU, G.R. No.
basically a bonus and is gratuitous in nature. 185665, 08 Feb. 2012)
2024 GOLDEN NOTES
Commission in Relation to 13th Month Pay
f. HOLIDAY PAY
1. The salesman’s commissions, comprising a pre- (Art. 94, LC; Secs. 1-7, Rule IV, Book III, Omnibus
determined percent of the selling price of the Rules Implementing the Labor Code)
goods sold by each salesman, were properly
included in the term basic salary for purposes of Holiday Pay
computing their 13th month pay. These
commissions are not overtime payments, nor Holiday Pay is a one-day pay given by law to an Ee
profit-sharing payments nor any other fringe even if he does not work on a regular holiday.
benefit. Thus, the salesmen's commissions, (Azucena, 2016)
comprising a pre-determined percent of the
selling price of the goods sold by each salesman, The payment of the regular daily wage for any
were properly included in the term “basic salary” unworked regular holiday. (Handbook on Workers’
for purposes of computing their 13th -month Statutory Monetary Benefits, Bureau of Working
pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No. Conditions, 2016)
110068, 15 Feb. 1995)
It is a premium given to Ees pursuant to the law even
2. The so-called commission received by medical if he has not been suffered to work on a regular
representatives of Boie Takeda Chemicals or by holiday. It is limited to the 12 regular holidays, also
the rank-and-file Ees of Phil. Fuji Xerox were called legal holidays listed by law. The Ee should not
excluded from the term basic salary because have been absent without pay on the working day
these were paid as productivity bonuses. Such proceeding the regular holiday.
bonuses closely resemble profit sharing,
payments and have no clear, direct, and Persons Entitled to Holiday Pay
necessary relation to the amount of work
actually done by each individual Ee. (Boie-Takeda GR: All Ees are entitled. (Sec. 1, Rule IV, Book III, IRR)
Chemicals, Inc. v. Dela Serna, G.R. No. 92174, 10
Dec. 1993) XPNs:
1. Government Ees and any of its political
Productivity Bonus vs. Sales Commissions subdivisions, including GOCCs (with original
charter);
A productivity bonus is something extra for which
no specific additional services are rendered by any 2. Retail and service establishments regularly
Ee and hence not legally demandable, absent a employing less than ten (10) workers;
contractual undertaking to pay it.
3. Domestic helpers and persons in the personal
Sales commissions, on the other hand, such as those service of another;
paid in Duplicators, are intimately related to or
directly proportional to the extent or energy of an 4. Ee engaged on task or contract basis or purely
Ee's endeavors. Commissions are paid upon the commission basis;
specific results achieved by a salesman-Ee. It is a
percentage of the sales closed by a salesman and 5. Members of the family of the Er who are
operates as an integral part of such salesman's basic dependent on him for support;
pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No.
110068, 15 Feb. 1995) 6. Managerial Ees and other members of the
managerial staff;
7. Field personnel and other Ees whose time and

performance are unsupervised by the Er; and
2024 GOLDEN NOTES
8. Ees paid Fixed amount for performing work compensation system of employment. (Poquiz,
irrespective of the time consumed in the 2012)
performance thereof. (Ibid.)
Regular Holiday vs. Special Holiday
Retail Establishments
REGULAR HOLIDAY SPECIAL HOLIDAY
They are engaged in the sale of goods to end users If unworked
for personal or household use. (e.g., Grocery)
Compensable, subject
Not compensable
to certain conditions
Service Establishments
If worked
They are engaged in the sale of services to Additional 30%
Rate is 200% of the
individuals for their own or household use. (e.g., TV premium pay of 100%
regular rate
repair shop) RW
Not exclusive; law or
Exemption of Retail or Service Establishments Limited to the 12
ordinance may provide
holidays provided in
for other special
MINIMUM WAGE HOLIDAY PAY/SIL the LC.
holidays.
Applies to Applies to
establishments establishments Formula to Compute Wage on Holidays
employing not more employing less than 10
than 10 Ees. Ees. 1. Regular Holiday
a. If it is Ee’s regular workday
Granted by the LC. May
Has to be obtained by be availed of without
i. Unworked – 100%; or
applying for it with the the need of a prior
Regional Wage Board. application for
ii. Worked:
exemption.
1. First 8 hours – 200%
2. Excess of 8 hours – plus 30% of
Purpose of Holiday Pay hourly rate on said day.
To secure the payment of undiminished monthly b. If it is Ee’s rest day

income undisturbed by any work interruption. In
other words, although the worker is forced to take a i. Unworked – 100%; or
rest, he earns what he should earn, that is, his
holiday pay. (JRC v. NLRC, G.R. No. 65482, 01 Dec. ii. Worked:
1987)
1. First 8 hours – plus 30% of
Holiday pay is primarily aimed at benefiting the 200%
daily-paid workers whose income is circumscribed
by the principle of “no-work, no pay.” Prior to the 2. Excess of 8 hours –plus 30% of
enactment of the LC, daily paid workers were not hourly rate on said day. (M.C.
paid for unworked regular holidays. No. 01, s. 2004)
On the other hand, monthly-paid Ees do not suffer

any reductions in pay for not working during such
holidays. The law on holiday pay is, thus, conceived
to be the countervailing measure to partially offset
the disadvantages inherent in the daily
2024 GOLDEN NOTES
Regular Holiday Special Holiday

Unworked Unworked
GR: No Pay.
100%
Regular Worked XPN: favorable

Workday First 8 hrs Excess of 8 hrs 1. company policy
2. practice
plus 30% of
3. CBA
200% hourly rate on Regular
said day Workday
granting payment of wages on
Unworked special days even if unworked
Worked
100%
First 8 hrs Excess of 8 hrs
Worked plus 30% of plus 30% of
Rest Day First 8 hrs First 8 hrs daily wage rate hourly rate on
of 100% said day
plus 30% of
plus 30% of Unworked
hourly rate on
200%
said day None
Worked
2. For declared Special Holidays, such as Special Rest Day First 8 hrs First 8 hrs
Non-Working Day, Special Public Holiday, Special plus 50% of the plus 30% of
National Holiday in addition to the 3 nationwide daily rate of hourly rate on
special non-working days: 100% said day
a. If it is Ee’s regular workday

3. For those declared as Special Working
i. Unworked – no pay unless there is Holidays, the following rules shall apply:
a favorable company policy,
practice or CBA granting payment a. For work performed, an Ee is entitled only
of wages on special days even if to his basic rate.
unworked.
b. No premium pay is required since work
ii. Worked: performed on said days is considered work
1. First 8 hours – plus 30% of on ordinary working days.
daily wage rate of 100%
2. Excess of 8 hours – plus 30% of Important Condition that Should be Met in Order
hourly rate on said day to Avail/Receive the Single Holiday Pay
b. If it is Ee’s rest day and worked: The Ee should not have been absent without pay on
i. First 8 hours – plus 50% of the daily the working day immediately preceding the RH.
rate of 100%
ii. Excess of 8 hours - plus 30% of
hourly rate on said day.
2024 GOLDEN NOTES
Monthly Paid vs. Daily Paid Ees Field Personnel

Field personnel are not entitled to holiday pay.
MONTHLY PAID EEs DAILY PAID EEs
The law requires that the actual hours of work in the
One whose wage or
field be reasonably ascertained. Field Personnel’s
salary is being paid One whose wage or
actual hours of work in the field cannot be
every day of the month, salary is being paid
determined with reasonable certainty. (Union of
including rest days, only on those days he
Filipro Ees v. Vivar, Jr., et al., G.R. No. 79255, 20 Jan.
Sundays, regular or actually worked,
1992)
special days, although except in cases of
he does not regularly regular or special days,
Part-Time Worker
work on these days. although he does not
regularly work on
If the work is partial, the pay should also be partial.
Not excluded from these days.
(Azucena, 2016)
benefit of holiday pay.
(In Re: United South Dock handlers, Inc., Opinion of The amount of holiday pay of a part-timer is to be
the Bureau of Working Conditions, 23 Nov. 1987) determined on a case-to-case basis. The basis is any
of the following, whichever yields the highest
HOLIDAY PAY OF CERTAIN EMPLOYEES amount:
1. The regular wage per day;
Private School Teachers (Faculty Members of
Colleges and Universities) 2. The basic wage on the working day preceding
the regular holiday if the Ee is present or on
1. RH during semestral vacations – not entitled leave with pay on the last working day
to holiday pay. immediately prior to the regular holiday;
2. RH during Christmas vacation – entitled to
holiday pay. 3. The average of his basic wages for the last seven
working days for Ees who are paid by results; or
Christmas breaks do not represent a break in
the academic calendar. It is something that falls 4. The basic wage on the particular holiday, if
within the semester. While a semestral break is worked. (DOLE Explanatory Bulletin on Part-
a break in the middle of the academic calendar. Time Employment, 02 Jan. 1996)
Hourly-Paid Teachers Piece-Rate Workers
No pay on regular holidays including Christmas and A piece-rate Ee is entitled to holiday pay.
semestral vacations, but with pay on special public
holidays and other no-class days when classes are Where a covered Ee is paid by results or output, his
called off or shortened on account of floods, holiday pay shall not be less than his average daily
typhoons, rallies and the like, whether extension earnings for the last seven (7) actual work days
days be ordered or not. (Jose Rizal College v. NLRC, immediately preceding the regular holiday.
G.R. No. 65482, 01 Dec. 1987)
Provided, Holiday pay shall not be less than the
In case of extensions, said faculty teachers shall statutory minimum wage rate. (Sec. 8, Rule IV, Book
likewise be paid their hourly rates should they teach III, IRR)
during said extensions. (ibid.)
In the event extensions are called for, they are also

entitled to their pay for the extended days.
2024 GOLDEN NOTES
Seasonal Workers Kagitingan), the Ees should be paid 400% of the
basic wage for both holidays, provided he worked on
Seasonal workers may not be paid the required that day or was on leave of absence with pay or was
Holiday pay during off-season where they are not at on authorized absence on the day prior to the
work. (Sec. 8, Rule IV, Book III, IRR) regular holiday.
The employment relationship is deemed to be Holiday pay is a statutory benefit demandable under
suspended during the off-season for seasonal the law. Since a worker is entitled to the enjoyment
workers. of 10 paid regular holidays (Art. 94, LC), the fact that
two holidays fall on the same date should not
Workers having No Regular Work Days operate to reduce to nine the ten-holiday pay
benefits a worker is entitled to receive. (Asian
They shall be entitled to holiday pay. (Sec. 8, Rule IV, Transmission Corp v. CA, G.R. No 144664, 25 Mar.
Book III, IRR) 2004)
Q: Are the school faculty who according to their When two RHs fall on the same day, the following
contracts are paid per lecture hour entitled to rates apply:
unworked holiday pay?
A:
1. If during RH, NO. Art. 94 of the LC is silent with
respect to faculty members paid by the hour
who because of their teaching contracts are
obliged to work and consent to be paid only for
work actually done (except when an emergency
or a fortuitous event or a national need calls for
the declaration of special holidays). (Jose Rizal Concept of Successive Regular Holidays
College v. NLRC, G.R. No. 65482, 01 Dec. 1987)
2. If during special public holidays, YES. The law

and the IRR governing holiday pay are silent as
to payment on special public holidays. Be it
noted that when a special public holiday is
declared, the faculty member paid by the hour
is deprived of expected income, and it does not
matter that the school calendar is extended in
view of the days or hours lost, for their income
that could be earned from other sources is lost Conditions for an Ee to be Entitled to Two (2)
during the extended days. Successive Holiday Pays
Similarly, when classes are called off or On the day immediately preceding the first RH, he
shortened on account of typhoons, floods, must be:
rallies, and the like, these faculty members must 1. Present (worked); or,
likewise be paid, whether or not extensions are
ordered. (Ibid.) 2. On leave of absence (LOA) with pay. (Sec. 10,
Rule IV, Book III, IRR)
Double Holiday Pay
If two regular holidays fall on the same day (such as

Maundy Thursday or Good Friday falling on Araw ng
2024 GOLDEN NOTES
If the Above Stated Conditions are Not Met
2. The regular holiday during the cessation of
He must work on the first RH to be entitled to operation of an enterprise due to business
holiday pay on the second RH. (ibid.) reverses as authorized by the SOLE may not be
paid by the Er. (Sec. 7, Rule IV, Book III)
Effects of Absences
Deferment of Holiday Pay (for year 2020)
1. All covered Ees shall be entitled to holiday pay
when they are on LOA with pay on the workday In various labor advisories issued by the DOLE in
immediately preceding the regular holiday. Ees 2020, namely, Advisories 13A, 15, 20, 22, 25, 27, and
who are on LOA without pay on the day 29, the DOLE authorized the deferment, not
immediately preceding a regular holiday may exemption, of the payment of holiday pay on
not be paid the required holiday pay if they do account of the national emergency arising from the
not work on such regular holiday. COVID-19 situation.
2. Ers shall grant the same percentage of the In Advisory 31, the DOLE has ordered the Ers who
holiday pay as the benefit granted by competent chose to defer holiday payment to make payment of
authority in the form of Ee’s compensation or those holiday pay on or before 31 Dec. 2020.
social security payment, whichever is higher, if
the Ees are not reporting for work while on such Worker's Faith/Religion on Religion-Related
leave benefits. Holiday
3. Where the day immediately preceding the Wages and other emoluments granted by law to the
holiday is a non-work day in the establishment working man are determined on the basis of the
or the scheduled rest day of the Ee, he/she shall criteria laid down by laws and certainly not on the
not be deemed to be on LOA on that day, in basis of the worker's faith or religion. (San Miguel
which case he/she shall be entitled to the Corporation v. Court of Appeals, G.R. No. 146775, 30
holiday pay if he/she worked on the day Jan. 2002)
immediately preceding the non-work day or
rest day.
2. PRINCIPLES
4. Where there are two (2) successive regular

a. NO WORK, NO PAY
holidays, like Maundy Thursday and Good
Friday, an Ee may not be paid for both holidays
if he/she absents himself/herself from work on “No Work, No Pay” Principle (Fair Day’s Wage
for a Fair Day’s Labor)
the day immediately preceding the first holiday,
unless he/she works on the first holiday, in
which case he/she is entitled to his/her holiday GR: If there is no work performed by the Ee, without
the fault of the Er, there can be no wage or pay.
pay on the second holiday. (Handbook on
Workers’ Statutory Monetary Benefits, Bureau of Burden of economic loss suffered by Ee shall not be
Working Conditions, 2016) shifted to the Er.
Effects of Business Closure on Holiday Pay XPNs: When the laborer was able, willing and ready
to work but was:
1. In case of temporary or periodic shutdown and
temporary cessation of work of an 1. Prevented by management;
2. Illegally locked out;
establishment, as when a yearly inventory or
3. Illegally suspended;
when the repair or cleaning of machineries and
equipment is undertaken, the regular holidays 4. Illegally dismissed; and
falling within the period shall be compensated.
2024 GOLDEN NOTES
5. Illegally prevented from working. (Aklan and ready to work but was prevented by
Electric Coop. v. NLRC, G.R. No. 129246, 10 Jan. management or was illegally locked out, suspended
2000) or dismissed. Where the Ee's dismissal was for a just
cause, it would neither be fair nor just to allow the
b. EQUAL PAY FOR EQUAL WORK Ee to recover something he has not earned and
could not have earned. (PAL v. NLRC, G.R. No. 55159,
“Equal Pay for Equal Work” Principle 22 June 1989)
Persons who work with substantially equal Thus, where the failure of workers to work was not
qualifications, skill, effort and responsibility, under due to the Er's fault, the burden of economic loss
similar conditions, should be paid similar salaries. suffered by the Ees should not be shifted to the Er.
Ees holding the same position and rank are Each party must bear his own loss. (Azucena, 2021)
presumed to be performing equal work. The rule
equal pay for equal work applies whether the Ee is Backwages Not Granted to Dismissed Employees
hired locally or abroad. (International School who Participated in an Illegal Strike even if Later
Alliance of Educators v. Quisumbing, G.R. No. 128845, Reinstated
01 June 2000)
Conformably with the long honored principle of a
Application of Title fair day's wage for a fair day's labor,employees
dismissed for joining an illegal strike are not
GR: The Title on Wages of the LC applies to all Ees. entitled to backwages for the period of the strike
even if they are reinstated by virtue of their being
XPNs: merely members of the striking union who did not
commit any illegal act during the strike. (Escario v.
1. Farm tenancy or leasehold; NLRC, G.R. No. 124055, 08 Jun 2000)
2. Household or domestic helpers, including NOTE: In Philippine Diamond Hotel and Resort, Inc.
family drivers and persons working in the v. Manila Diamond Hotel Employees Union (G.R. No.
personal service of another; 158075, 30 June 2006), the Court laid down the
exceptions to this rule. Jurisprudential law, however,
3. Home workers engaged in needlework or in any recognizes several exceptions to the "no backwages
cottage industry duly registered in accordance rule," to wit: when the employees were illegally
with law; (Art. 98, LC) and locked to thus compel them to stage a strike; when
the employer is guilty of the grossest form of ULP;
4. Workers in any duly registered cooperatives when the employer committed discrimination in the
when so recommended by the Bureau of rehiring of strikers refusing to readmit those against
Cooperative Development and upon approval of whom there were pending criminal cases while
the SOLE. admitting non-strikers who were also criminally
charged in court; or when the workers who staged a
NOTE: Workers of a registered BMBE are only voluntary ULP strike offered to return to work
exempted from the Minimum Wage Law, not from unconditionally but the employer refused to
the Title on Wages of the LC. (R.A. No. 9178) reinstate them. Not any of these or analogous
instances is, however, present in the instant case.
c. FAIR WAGE FOR FAIR WORK Respondent urges this Court to apply the
exceptional rule enunciated in Philippine Marine
A fair day's wage for a fair day's labor continues to Officers' Guild v. Compania Maritima and similar
govern the relation between labor and capital and cases where the employees unconditionally offered
remains a basic factor in determining Ees' wages. to return to work, it arguing that there was such an
If there is no work performed by the Ee there can be offer on its part to return to work but the Hotel
no wage or pay unless the laborer was able, willing screened the returning strikers and refused to
2024 GOLDEN NOTES
readmit those whom it found to have perpetrated NOTE: If the error is not corrected in a
prohibited acts during the strike. reasonable time, it ripens into a company
policy and Ees can demand it as a matter of
It must be stressed, however, that for the exception right.
in Philippine Marine Officers' Guild to apply, it is
required that the strike must be legal. Diminution Of Benefits When Present
None of the exceptions mentioned above is existing 1. The grant or benefit is founded on a policy or
in these cases and, as found by the Court, both has ripened into a practice over a long period of
strikes conducted by the union were illegal. Thus, time;
the listed employees are not entitled to backwages
despite the CA's order of reinstatement. (Bigg's, Inc. 2. the practice is consistent and deliberate;
v. Boncacas, G.R. Nos. 200487 & 200636, 06 Mar.
2019) 3. the practice is not due to error in the
construction or application of a doubtful or
d. NON-DIMINUTION OF BENEFITS difficult question of law; and
(Art. 100, LC)
4. the diminution or discontinuance is done
GR: Nothing in the LC shall be construed to unilaterally by the employer." (Nippon Paint
eliminate or in any way diminish supplements, or Philippines, Inc. v. NIPPEA, G.R. No. 229396 30
other Ee benefits being enjoyed at the time of the Jun. 2021)
promulgation of the Code. (Art. 100, LC)
NOTE: The Non-Diminution Rule, however, applies
A company practice favorable to the employees had only if the benefit is based on an express policy, a
indeed been established and the payments made written contract, or has ripened into a practice. To
pursuant thereto, ripened into benefits enjoyed by be considered a practice, it must be consistently and
them. And any benefit and supplement being deliberately made by the Er over a long period of
enjoyed by the employees cannot be reduced, time. (Wesleyan University-Philippines v. Wesleyan
diminished, discontinued or eliminated by the University-Faculty and Staff Assn., G.R. No. 181806, 12
employer (Sevilla Trading Company v. A.V.A. Tomas Mar. 2014)
Semana, G.R. No. 152546, 28 Apr. 2004)
With regard to the length of time, the Court held that
XPNs: jurisprudence has not laid down any rule requiring
a specific minimum number of years. (Sevilla
1. Correction of error; Trading Co. v. Semana, G.R. No. 152456, 28 Apr. 2004)
2. Contingent benefit or conditional bonus;
3. Wage order compliance; However, in Supreme Steel Corp. v. NMS-IND-APL
4. Benefits on reimbursement basis; (G.R. No. 185556, 28 Mar. 2011), the Court held that,
5. Reclassification of position; “While it is true that jurisprudence has not laid
6. Negotiated benefits; and down any rule requiring a specific minimum
number of years in order for a practice to be
NOTE: Benefits initiated through negotiation considered as a voluntary act of the Er, under
between Er and Ees, such as those contained in existing jurisprudence on this matter, an act carried
a CBA are not within the prohibition of Art. 100 out within less than a year would certainly not
because, as products of bilateral contract, they qualify as such.”
can only be eliminated or diminished
bilaterally. (Azucena, 2016)
7. Productivity incentives
2024 GOLDEN NOTES
Purpose of Non-Diminution of Benefits Ees the same or better terms and conditions of
employment. Ee benefits derived from law are
The philosophy behind the law is to prohibit Ers exclusive of benefits arrived at through negotiation
from reducing benefits already enjoyed by Ees. A and agreement unless otherwise provided by the
contrary rule will corrupt the Er's mind to abuse and agreement itself or by law. (Meycauayan College v.
exploit Ees, prostituting the social justice and Hon. Drilon G.R. No. 81144, 07 May 1990)
protection to labor clauses enshrined in the
fundamental charter. Any allowance/wage granted under the collective
bargaining agreement cannot be credited to similar
Thus, a change of method of payment of wages from form of benefit that may thereafter be ordained by
monthly to daily will not be allowed if it would result the government through legislation. Such portion of
in reduction of pay. However, if the method the contract is the "stoplock" gate or known in its
introduced would augment the worker's pay it will technical term as the “non-chargeability” clause.
be valid. Reclassification of position of Ees pursuant (Marcopper Mining Corp. v. NLRC, G.R. No. 103525, 29
to reorganization, without affecting their Mar. 1996)
compensation is not covered by the proscription.
(Opinion of the SOLE, 07 Oct. 1975) This doctrine was resounded in this manner: the
CBA provides, "It is hereby agreed that these salary
An agreement reducing certain labor standards increases shall be exclusive of any wage increase
benefits such as overtime and premium pay violates that may be provided by the law as a result of any
Art. 100. Provisions of existing laws are deemed economic change."
part of a contract. (Republic Planters Bank v. NLRC,
G.R. No. 117460, 06 Jan. 1997) The Court ruled that the above provision in the CBA
is clear that the salary increases shall not include
However, if there is an impelling reasonable any wage increase that may be provided by law as a
justification of the diminution or reduction because result of economic change. The CBA needs no
of an emergency, exigency, or business losses, such interpretation as it is not ambiguous. Thus, the wage
diminution or reduction would be valid, provided, it increase granted by the petitioner to its Ees under
is duly approved by the SOLE or his duly authorized the CBA cannot be considered as creditable benefit.
representative pursuant to Art. 233. (Poquiz, 2012) (Mindanao Steel Corp. v. Minsteel Free Workers
Organization, G.R. No. 130693, 04 Mar. 2004; UKCEU-
Bonus Treated as Not Part of Wages PTGWO v. Kimberly Clark Phils, G.R. No. 162957, 06
Mar. 2006)
Bonus is not considered part of wages if it is paid
only upon realization of profits or amount of Benefit Acquired Through Company Practice
production or output. (Atok Big Wedge Mining Co.,
Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No. An Ee can demand as a matter of right benefits
L-5276, 03 Mar. 1953) granted by the Er for a considerable and long period
of time, as the same may ripen into a company
Where the bonus is not payable to all but only to practice.
some Ees and only when their labor becomes more
efficient or more productive, it is only an If it is a past error that is being corrected, no vested
inducement for efficiency, a prize therefore, not a right may be said arisen nor any diminution of
part of the wage. (Poquiz, 2012) benefit under Art. 100 of the Labor Code may be said
to have resulted by virtue of the correction. (Globe
Stoplock Gate or Non-chargeability Clause Mackay v. NLRC, G.R. No. 74156, 29 June 1988)
Having entered into an agreement with its Ees, an Er

may not be allowed to renege on its obligation under
a CBA should, at the same time, the law grants the
2024 GOLDEN NOTES
Instances of Violation of the Rule on Non- XPNs: Payment of wages by check or money order
Diminution of Benefits shall be allowed if:
1. It is customary on the date of the effectivity of
Withdrawal of the following would amount to the Code;
diminution of Ee’s existing benefits:
2. Necessary because of special circumstances as
1. Enjoyment of the privilege of commutation of specified in the regulation issued by the SOLE;
sick leave benefits into cash equivalent as a
company practice; (Davao Integrated Port 3. Stipulated in the CBA; (Art. 102, LC) or
Stevedoring Services v. Abarquez, G.R. No.
102132, 19 Mar. 1993) 4. Where the following conditions are met:
a. There is a bank or other facility for
2. Grant of resignation benefits to a Branch encashment within a radius of one (1)
Manager on the basis of company practice of kilometer from the workplace;
applying expired CBA concluded by the
supervisory union; (Republic Planters Bank, v. b. The Er or any of his agents or
NLRC, G.R. No. 79488, 30 Sept. 1988) and representatives does not receive any
pecuniary benefit directly or indirectly
3. Giving of special bonus as the company's long from the arrangement;
and regular practice. (Meralco v. Quisumbing,
G.R. No. 127598, 27 Jan. 1999) c. The Ees are given reasonable time
during banking hours to withdraw
their wages from the bank which time
3. PAYMENT OF WAGES
shall be considered as compensable
(Arts. 102-105, LC; Secs. 1-7 and 10-14, Rule VIII,
hours worked if done during working
Book III, Omnibus Rules Implementing the Labor
hours; and
Code)
d. The payment by check is with the

Forms of Payment written consent of the Ees concerned if
there is no collective agreement
GR: As a general rule, wages shall be paid in legal
authorizing the payment of wages by
tender. (Sec. 1, Rule VIII, Book III, IRR of LC) bank checks. (Sec. 2, Rule VIII, Book III,
No Er shall pay the wages of an Ee by means of:
IRR of LC)
1. Promissory notes;
2. Vouchers; Q: Benito is the owner of an eponymous clothing
3. Coupons;
brand that is a top seller. He employs a number
4. Tokens;
of male and female models who wear Benito's
5. Tickets; clothes in promotional shoots and videos. His
6. Chits; or
deal with the models is that Benito will pay them
7. Any object other than legal tender. with 3 sets of free clothes per week. Is this
arrangement allowed? (2015 BAR)
NOTE: This prohibition applies even when
expressly requested by the Ee. A: NO. The arrangement is not allowed. The models
are Benito’s employees. As such, their services are
However, payment of wages and other monetary
required to be paid only in legal tender, even when
benefits through electronic money (e-money) is expressly requested by the employee otherwise
now allowed (DOLE Labor Advisory No. 26, Series of
(Art. 102, LC). Hence, no lawful deal in this regard
2020)
can be entered into by and between Benito and his
models. The three (3) sets of clothes, regardless of
2024 GOLDEN NOTES
value, are in kind and are therefore not in the form 3. Under any other analogous circumstances;
prescribed by law. Provided, that the time spent by the Ees in
collecting their wages shall be considered as
Time of Payment compensable hours worked.
GR: Wages shall be paid: NOTE: No Er shall pay his Ees in any bar, night or
day club, drinking establishment, massage clinic,
1. At least once every two (2) weeks; or dance hall, or other similar places or in places where
2. Twice a month at intervals not exceeding 16 games are played with stakes of money or things
days. representing money except in the case of persons
employed in said places. (Sec. 4, Rule VIII, Book III,
XPNs: IRR of LC)
1. On account of force majeure or circumstances Requisites of Payment Through Banks

beyond the Er’s control, payment shall be made
immediately after such force majeure or 1. Shall be made upon written permission of the
circumstances have ceased; majority of the Ees or workers concerned;
2. If engaged to perform a task which cannot be 2. With 25 or more Ees; and

completed in two (2) weeks shall be subject to
the following conditions, in the absence of a 3. Located within one (1) kilometer radius from a
CBA or arbitration award: commercial, savings, or rural bank. (Sec. 7, R.A.
No. 6727)
a. That payments are made at intervals
not exceeding 16 days, in proportion to NOTE: Payment shall be made within the period of
the amount of work completed; payment of wages fixed by the Labor Code.
b. That final settlement is made upon Requisites of Payment Through Automated

completion of the work. (Art. 103, LC) Teller Machine (ATM)
Place of Payment 1. The ATM system of payment is with the written

consent of the Ees concerned;
GR: At or near the place of undertaking. (Art. 104,
LC) 2. The Ees are given reasonable time to withdraw
their wages from the bank facility which time, if
XPN: Payment in a place other than the workplace done during working hours, shall be considered
shall be permissible only under the following compensable hours worked;
circumstances:
3. The system shall allow workers to receive their
1. When payment cannot be effected at or near the wages within the period or frequency and in the
place of work by reason of the deterioration of amount prescribed under the Labor Code, as
peace and order conditions, or by reason of amended;
actual or impending emergencies caused by
fire, flood, epidemic or other calamity rendering 4. There is a bank or ATM facility within a radius
payment thereat impossible; of one (1) kilometer to the place of work;
2. When the Er provides free transportation to the 5. Upon request of the concerned Ees, the Er shall
Ees back and forth; and issue a record of payment of wages, benefits and
deductions for a particular period;
2024 GOLDEN NOTES
6. There shall be an additional expense and no c. Upon presentation of the affidavit to the
diminution of benefits and privileges because of Er, he shall make payment to the heirs as
the ATM system of payment; and representative of the SOLE. (Sec. 6, Rule
VIII, Book III, IRR of LC)
7. The Er shall assume responsibility in case the
wage protection provisions of law and
4. PROHIBITIONS REGARDING WAGES
regulations are not complied with under the
(Arts. 112-119, LC; DOLE L.A. No. 11-14)
arrangement. (DOLE Labor Advisory, Series of
1996)
Non-Interference in Disposal of Wages
Direct Payment of Wages
Er shall not limit or interfere with the freedom of
any Ee to dispose of his wages. He shall not force,
GR: Wages shall be paid directly to the workers to
compel or oblige his Ees to purchase merchandise,
whom they are due. (Art. 105, LC)
commodities or other property from any other
person, or otherwise make use of any store services
XPNs:
of such Er or any other person. (Art. 112, LC)
1. Payment through another person may be made
in cases of force majeure which renders the
Civil Code Provisions on Non-Interference in
payment impossible, provided that such person
is under written authority given by the worker Disposal of Wages
for the purpose;
1. Art. 1705 – The laborer's wages shall be paid in
2. Where the Er is authorized in writing by the Ee legal currency.
to pay his wages to a member of his family; 2. Art. 1706 – Withholding of the wages, except
for a debt due, shall not be made by the Er.
3. Where payment to another person of any part 3. Art. 1707 – The laborer's wages shall be a lien
of the Ee's wages is authorized by existing law, on the goods manufactured or the work done.
4. Art. 1708 – The laborer's wages shall not be
including payments for the insurance premiums
of the Ee and union dues where the right to subject to execution or attachment, except for
debts incurred for food, shelter, clothing and
check-off has been recognized by the Er in
medical attendance.
accordance with a collective agreement or
authorized in writing by the individual Ees 5. Art. 1709 – The Er shall neither seize nor retain
any tool or other articles belonging to the
concerned; (Sec. 5, Rule VIII, Book III, IRR of LC;
laborer.
Art. 105, LC) or
Q: Tarcisio was employed as operations

4. In case of death of the Ee, the Er may pay the
manager and received a monthly salary of
wages to the heirs without the necessity of
intestate proceedings. When the heirs are of P25,000.00 through his payroll account with DB
Bank. He obtained a loan from Roberto to
age, they shall:
purchase a car. Tarcisio failed to pay Roberto
a. Execute an affidavit attesting to their when the loan fell due. Roberto sued to collect
and moved to garnish Tarcisio’s payroll account.
relationship to the deceased and the fact
that they are his heirs to the exclusion of The latter vigorously objected and argued that
all other persons; salaries were exempt from garnishment. Is
Tarcisio correct? Explain your answer. (2017
b. In case any of the heirs is a minor, such BAR)
affidavit shall be executed in his behalf by
A: NO. Tarcisio is not correct. Under Art. 1708 of the
his natural guardian or next of kin;
NCC, only wages, which are the compensation paid
for manual skilled or unskilled labor, are exempt
2024 GOLDEN NOTES
from garnishment. Here, the subject of garnishment g. Deductions for loss or damage, provided that
is Tarcisio’s salary as a managerial employee, which requisites provided are satisfied; (Art. 114,
is not considered as wages. Hence, Tarcisio’s salary LC)
may be garnished.
h. Deductions made with the written
Wage Deduction authorization of the Ee for payment to a
third person; (Sec. 13, Rule VIII, Book III, IRR
GR: No Er, in his own behalf or on behalf of any of LC)
person, shall make any deduction from the wages of
his Ees. (Art. 113, LC) i. Deductions as disciplinary measures for
habitual tardiness; (Opinion dated 10 Mar.
XPNs: 1975 of the SOLE)
1. Where the worker is insured with his consent j. Agency fees. (Art. 259(e), LC)
by the Er; and
The law prohibits the Er from making deductions
2. For union dues, in cases where the right of the from the wages of an Ee. The evil sought to be
worker or his union to check off has been prevented is to forestall the commission of
recognized by the Er or authorized in writing by unwarranted practices of Ers by making
the individual worker concerned. (Art. 113, LC) unnecessary deductions without Ee's knowledge or
authorization. (Galvadores v. Trajano, G.R. No. 70067,
NOTE: Art. 241(o) of the LC provides that 15 Sept. 1986)
special assessments may be validly checked-off
if there is an individual written authorization Deductions for Absences and Tardiness
duly signed by every Ee. (Principle of No-Work No-Pay)
3. In cases where the Er is authorized by law or Deductions for unpaid absences are allowed. An Er
regulations issued by the SOLE: will not be liable for violation of the prohibition
against wage deduction for absences or tardiness
a. Deductions for value of meals and facilities incurred by the Ee.
freely agreed upon; (Azucena, 2016)
Check-off
b. In case where the Ee is indebted to the Er
where such indebtedness has become due It is a system by which union dues and other
and demandable; (Art. 1706) assessments are deducted from the Ee's wage by the
Er upon authorization from the worker or by
c. In court awards, wages may be subject of mandate of the law. (Poquiz, 2012)
execution or attachment, but only for debts
incurred for food, shelter, clothing, and Duration of Check-Off
medical attendance; (Art. 1703)
The Ees' check-off authorization even if declared
d. Taxes withheld pursuant to the Tax Code; irrevocable, is good only as the Ees remain members
of the union concerned, because as such members
e. Salary deduction of a member of a legally they were obliged to pay the corresponding dues
established cooperative; (Sec. 59, R.A. No. and assessments to their union.
6938)
The moment they are separated from and left the
f. Deductions for SSS, PhilHealth and Pag-IBIG union and joined another labor organization, they
premiums; were no longer obliged to pay said dues and
assessments. There would be no longer any reason
2024 GOLDEN NOTES
or occasion for the company to continue making Prohibition Against Deposit Requirement
deductions. (Phil. Federation of Petroleum Workers v.
CIR, G.R. No. L-26346, 27 Feb. 1971) GR: While deductions from the Ees’ wages may be
made for cash bonds or deposits, the Er, however, is
Compulsory Check-Off not allowed to unilaterally impose upon its Ees the
giving of cash bonds or deposits.
Check-off may be enforced with the consent of the
Er or by authority in writing by the Ees. XPN: If the Er proved and established that it falls
under any of the following:
When the union and the Er agree, the attitude of the
Ees is immaterial. When the Ees duly authorize the 1. That it is engaged in such trades, occupations or
check-off, the Er's consent is unnecessary, and its business were the practice of making
recognition of the right is obligatory. (A.L. Ammen deductions or requiring deposits is a recognized
Trans. Co. v. BITEMAA, 91 Phil 649, 25 July 1952) one; or
Agency Fees 2. That the cash bond or deposit is necessary or

desirable as determined by the DOLE Secretary
It is an amount equivalent to the union dues, which in appropriate rules and regulations.
a non-union member pays to the union because he
benefits from the CBA negotiated by the union. In the case of Nina Jewelry v. Montecillo (G.R. No.
188169, 28 Nov. 2011), the court ruled that the
Deduction to Ensure Employment petitioners should first establish that the making of
deductions from the salaries is authorized by law, or
The employment contract provides for 25% regulations issued by the SOLE. Further, the posting
deduction from Ee's salary representing the Er's of cash bonds should be proven as a recognized
share in procuring job placement for him. The practice in the jewelry manufacturing business, or
provision in the contract was contested, but the Er alternatively, the petitioners should seek for the
argued that the Ee was already estopped in determination by the SOLE through the issuance of
complaining about the deduction. The Supreme appropriate rules and regulations that the policy the
Court declared the employment contract illegal and former seeks to implement is necessary or desirable
iniquitous, thus, null and void. (Commando Security in the conduct of business.
Agency v. NLRC, G.R. No. 95844, 20 July 1992)
Prohibition on Withholding of Wages
Reduction of Workdays; Effect on Wages
It shall be unlawful for any person, directly or
In situations where the Er has to reduce the number indirectly, to withhold any amount from the wages
of regular working days to prevent serious losses, of a worker. (Art. 116, LC)
such as when there is a substantial slump in the
demand for his goods or services or when there is Although management prerogative refers to the
lack of raw materials, the Er may deduct the wages right to regulate all aspects of employment, it cannot
corresponding to the days taken off from the be understood to include the right to temporarily
workweek, consistent with the principle of “no withhold salary/wages without the consent of the
work, no pay.” This is without prejudice to an Er. To sanction such an interpretation would be
agreement or company policy which provides contrary to Art. 166 of the Labor Code. (SHS
otherwise. (Handbook on Workers’ Statutory Perforated Materials, Inc. v. Diaz, G.R. No. 185814, 13
Monetary Benefits, 2016) Oct. 2010)
As an exception, Ers usually withhold the release of

the last salary and benefits of terminated or
2024 GOLDEN NOTES
resigning Ees prior to or pending their compliance against deposits for loss or damage. (DOLE
with certain clearance procedure. Department Order No. 150, Series of 2016)
Clearance procedures are instituted to ensure that Requisites for Payment of Loss and Damage
the properties, real or personal, belonging to the Er
but are in the possession of the separated Ee, are 1. It is clearly shown that the Ee is responsible for
returned to the Er before the Ee’s departure. (Milan the loss or damage;
v. NLRC and Solid Mills, Inc., G.R. No. 202961, 04 Feb.
2015) 2. The Ee is given reasonable opportunity to show
cause why deduction should not be made;
Other Prohibitions
3. The total amount of such deductions is fair and
1. Inducing a worker to give up any part of his reasonable and shall not exceed the actual loss
wages by force, intimidation, stealth, threat, or or damage; and
by any other means whatsoever without his
consent; (Art. 116, LC) 4. The deduction from the wages of the Ee does
not exceed 20% of his wages in a week. (Sec. 11,
2. To make deductions from wages for the benefit Rule VIII, Book III, IRR of LC)
of the Er or his representative as consideration
of a promise of Employment or retention in
5. WAGE DISTORTION
employment; (Art. 117, LC)
(Art. 124, LC)
3. Refusal by Er to pay or reduce wages or benefits

in discrimination of any Ee who has filed any Wage distortion is a situation where an increase in
prescribed wage results in the elimination or severe
complaint or instituted any proceedings under
the code or has testified or about to testify; (Art. contraction of intentional quantitative differences in
118, LC) or wage or salary rates between and among Ee groups
in an establishment as to effectively obliterate the
4. Unlawful for any person to make any statement, distinctions embodied in such wage structure based
on skills, length of service or other logical bases of
report, or record filed or kept pursuant to the
differentiation. (Art. 124, LC)
Code knowing such statement, report or record
to be false in any material aspect. (Art. 119, LC) It is the disappearance or virtual disappearance of
pay differentials between lower and higher
positions in an enterprise because of compliance
Deposit for Loss or Damage
with a wage order. (P.I. Manufacturing v. P.I.
Manufacturing Supervisors and Foreman, G.R. No.
GR: Er shall not require his worker to make deposits
167217, 04 Feb. 2008)
from which deductions shall be made for the
reimbursement of loss of or damage to tools,
NOTE: Wage distortion presupposes an increase in
materials, or equipment supplied by the Er. (Art.
114, LC) the compensation of the lower pay class in an office
hierarchy without a corresponding raise for high
level Ees in the same region of the country, resulting
XPN: Er is engaged in such trade or business where
the practice of making deductions or requiring in the elimination or severe diminution of the
deposits is a recognized one or is necessary or distinction between the two groups or classes.
(Prubankers Association v. Prudential Bank & Trust
desirable as determined by the SOLE in appropriate
rules and regulations. Company, G.R. No. 131247, 25 Jan. 1999)
NOTE: Security guards and other private security

personnel in the private security industry are now
also included in the exception in the prohibition
2024 GOLDEN NOTES
Elements of Wage Distortion Causes of Wage Distortion
1. An existing hierarchy of positions with 1. Government decreed increases in minimum

corresponding salary rates; wages;
2. A significant change or increase in the salary 2. Merger of two companies (with differing
rate of a lower pay class without a classifications of Ees and different wage rates)
corresponding increase in the salary rate of a where the surviving company absorbs all the
higher one; Ees of the dissolved corporation; or
3. The elimination of the distinction between the 3. The effectivity dates of wage increases given to
two (2) groups or classes; and each of the two classes of Ees (rank-and-file and
supervisory) had not been synchronized in
4. The wage distortion exists in the same region of their respective CBAs. (Metro Transit Org., Inc. v.
the country. (Alliance Trade Unions v. NLRC, G.R. NLRC, G.R. No. 116008, 11 July 1995)
No. 140689, 17 Feb. 2004)
Where a significant change occurs at the lowest level
In mandating an adjustment, the law did not require of positions in terms of basic wage without a
that there be an elimination or total abrogation of corresponding change in the other level in the
quantitative wage or salary differences. A severe hierarchy of positions, negating as a result thereof
contraction is enough. (Metrobank v. NLRC, G.R. No. the distinction between one level of position from
102636, 10 Sept. 1993) the next higher level, and resulting in a parity
between the lowest level and the next higher level
Wage distortion does not arise when a wage order or rank, between new entrants and old hires, there
gives Ees in one branch of a bank higher exists a wage distortion. (Prubankers Association v.
compensation than that given to their counterparts Prudential Bank & Trust Company, G.R. No. 131247,
in other regions occupying the same pay scale who 25 Jan. 1999)
are not covered by said wage order. In short, the
implementation of wage orders in one region but Cases Not Representative of Wage Distortion
not in others does not in itself necessarily result in
wage distortion. (Prubankers Association v. 1. Where the hierarchy of positions based on
Prudential Bank & Trust Company, G.R. No. 131247, skills, length of service and other logical bases
25 Jan. 1999) of differentiation was preserved; (Ibid.)
Wage distortion is applied to voluntary and 2. A disparity in wages between Ees holding
unilateral increases by the Er in fixing hiring rates similar positions but in different regions;
which is inherently a business judgment
prerogative, then the hands of the Er would be 3. Where the disparity was simply due to the fact
completely tied even in cases where an increase in that the Ees had been hired on different dates
wage of a particular group is justified due to a re- and were thus receiving different salaries;
evaluation of the high productivity of a particular (Manila Mandarin Ees Union v. NLRC, G.R. No.
group, or as in the present case, the need to increase 108556, 19 Nov. 1996)
the competitiveness of Bankard’s hiring rate. An Er
would be discouraged from adjusting the salary 4. That an Ee was initially hired at a position level
rates of a particular group of Ees for fear that it carrying a hiring rate higher than the rates of
would result to a demand by all Ees for a similar others;
increase, especially if the financial conditions of the
business cannot address an across-the-board 5. That an Ee failed to meet the cut-off date in the
increase. (Bankard Ees Union-Workers Alliance grant of yearly CBA increase; or
Trade Unions v. NLRC, G.R. No. 140689, 17 Feb. 2004)
2024 GOLDEN NOTES
6. That the Ee had been promoted while the others
were not. 3. Percentile Approach;
Two (2) Methods of Adjusting Minimum Wage
1. Floor wage method – involves the fixing of a

determinate amount to be added to the
prevailing statutory minimum wage rates. On 4. Philippine Construction Supply Formula;
the other hand,
2. Salary-ceiling method – the wage adjustment

was to be applied to employees receiving a
certain denominated salary ceiling. In other Where:
words, workers already being paid more than
the existing minimum wage (up to a certain
amount stated in the Wage Order) are also to be
given a wage increase. (Norkis Free and Ind.
Workers Union v. Norkis Trading Co., Inc., G.R. No. 5. Jimenez, Ofreneo, Delas Alas Jr. (JODA)
157098, 30 Jun. 2005) Formula;
Formula in determining “distortion adjustment”
Where:
Wa = old daily minimum wage
The above standard formula has been applied by the
Wb = daily wage of employee
RTWPB to correct wage or pay-scale structures in
where Wb > Wa, or Wb is above Wa)
cases of wage distortion as an appropriate measure
Wc = new daily minimum wage
acceptable to the parties. (Poquiz, 2018, citing
= Wa + mandated wage increase
Metropolitan Bank and Trust Co. Employees Union
ALU-TUCP v. NLRC, G.R. No. 102363, 10 Sept. 1993)
6. Wirerope Formula; and
Advisory Formula in Correcting the Effects of the
Wage Order on the Existing Wage Structure
(Wage Distortion)
7. Bagtas Approach.
1. Pineda Formula;
2. Pineda-Cruz-So Formula; Q: Bankard, Inc. approved a New Salary Scale

which increased the hiring rates of new Ees. The
Bankard Ees Union pressed the company for an
increase in the salary of its old regular Ees. The
company refused to do so.
The union filed a Notice of Strike on the ground

Where: Exponent is represented by n of discrimination for it claimed that a wage
2024 GOLDEN NOTES
distortion exists, and the company refused to Labor Unions-TUCP v. NLRC, et al., G.R. No. 109328, 16
negotiate to correct the distortions. Is there a Aug. 1994)
wage distortion brought about by the New Salary
Scale? To compel Ers simply to add on legislated increases
in salaries or allowances without regard to what is
A: NO. The union cannot legally obligate Bankard to already being paid would be to penalize Ers who
correct the alleged “wage distortion” as the increase grant their workers more than the statutory
in the wages and salaries of the newly hired was not prescribed minimum rates of increases. Clearly, this
due to a prescribed law or wage order. If the would be counter-productive so far as securing the
compulsory mandate under Art. 124 to correct wage interest of labor is concerned. (Metro Bank & Trust
distortion is applied to voluntary and unilateral Co. Ees Union v. NLRC, G.R. No. 102636, 10 Sept. 1993)
increases by the Er in fixing hiring rates which is
inherently a business judgment prerogative, then Settlement of Wage Distortion
the hands of the Er would be completely tied even in
cases where an increase in wages of a particular The application of wage increases brought about by
group is justified due to a re-evaluation of the high Wage Orders issued by the Board may result in
productivity of a particular group or the need to distortions in the wage structure within the
increase the competitiveness of Bankard’s hiring establishment. The Er and the workers are
rate. mandated by law to resolve such wage distortion
problems in the following manner:
An Er would be discouraged from adjusting the
salary rates of a particular group of Ees for fear that ORGANIZED UNORGANIZED
it would result to a demand by all Ees for a similar ESTABLISHMENT ESTABLISHMENT
increase, especially if the financial conditions of the (with union) (without union)
business cannot address an across-the-board
increase. (Bankard Ees Union-Workers Alliance The Er and the union The Er and the workers
Trade Unions v. NLRC, G.R. No. 140689, 17 Feb. 2004) shall negotiate to shall endeavor to
correct distortion. correct the distortion.
Negotiated Wage Increases to Correct Wage
Distortion; Its Interest and Validity
Any dispute shall be
The law recognizes the validity of negotiated wage Any dispute shall be
resolved through a
increases to correct wage distortion. The legislative settled through the
grievance procedure
intent is to encourage the parties to solve the NCMB.
under the CBA.
problem of wage distortion through voluntary
negotiations or arbitration, rather than strikes,
lockouts, or other concerted activities of the Ees or If it remains If it remains
the management. unresolved, it shall be unresolved within 10
dealt with through days it shall be referred
Unilateral grant of wage increase on the part of an voluntary arbitration. to the NLRC.
Er is recognized as a means of correcting wage
distortions including wage adjustments under a
collective bargaining agreement. Recognition and The NLRC shall
The dispute will be
validation of wage increases given by Ers after conduct continuous
resolved within 10
unilaterally or because of CBNs for the purpose of hearings and decide
days from the time the
correcting wage distortions are in keeping with the the dispute within 20
dispute was referred to
public policy of encouraging Ers to grant wage and days from the time the
voluntary arbitration.
allowance increases to their Ees which are higher same was referred.
than the minimum rates of increases prescribed by
statute or administrative regulation. (Associated
2024 GOLDEN NOTES
The pendency of the dispute arising from a wage 6. MINIMUM WAGE
distortion shall not in any way delay the (Art. 99, LC; Secs. 7, 9 and 15, Rule VII, Book III,
applicability of any wage increase prescribed Omnibus Rules Implementing the Labor Code)
pursuant to the provisions of law or Wage order.
(Sec. 7, Chapter III, IRR of R.A. No. 6727)
Regional Minimum Wage
NOTE: Correction of wage distortion may be done

It refers to the lowest basic wage rates an Er can pay
by re-establishing a substantial or significant gap
his works, as fixed by the Regional Tripartite Wages
(not precisely the same amount) between the wage
and Productivity Boards (RTWBPs), and which shall
rates of the differing classes of Ees. (Azucena, 2016)
not be lower than the applicable statutory minimum
wage rates. (Sec. 4(k), Rule 1, NWPC Guidelines No.
Q: How should a wage distortion be settled?
01, s. 2007)
A: Any dispute arising from wage distortion shall be

Statutory Minimum Wage
resolved through the grievance procedure as
provided in the applicable collective bargaining
It is the lowest wage rate fixed by law that an Er can
agreement and, if the dispute remains unresolved,
pay his workers. (IRR, R. A. No. 6727) It is
then through voluntary arbitration.
compensation which is less than such minimum rate
is considered an underpayment that violates the
In cases where there are no collective bargaining
law. (Azucena, 2016)
agreements or recognized labor unions, the
employers and workers shall endeavor to correct
Purpose
such wage distortions. Any dispute arising
therefrom shall be settled through the National
The purpose of minimum wage law is “to set barrier
Conciliation and Mediation Board and, if it remains
below which wages may not fall, in order to develop
unresolved after 10 calendar days of conciliation,
competition on a high level of efficient rather than
the issue of wage distortion shall be referred to the
competition on a low level of wages.”
appropriate branch of the NLRC. (R.A. No. 6727,
The minimum must be fair and just. The “minimum
Wage Rationalization Act, amending, among others,
wage” can by no means imply only the actual
Art. 124 of the LC)
minimum. Some margin or leeway must be provided
over and above the minimum to take care of
Non-Strikeablity of Wage Distortion
contingencies, such as an increase of prices of
commodities and increase in wants, and to provide
Wage Distortion is non-strikeable. The legislative
means for a desirable improvement in his mode of
intent that solution of the problem of wage
living. (Atok Big Wedge Mining Co., Inc. v. Atok Big
distortions shall be sought by voluntary
Wedge Mutual Benefit Association, G.R. No. L-5276,
negotiation or arbitration, and not by strikes,
03 Mar. 1953)
lockouts, or other concerted activities of the Ees or
management, is made clear in R.A. No. 6727 issued
Inability of an Employer to Pay is Immaterial
on 07 July 1989. (Ilaw at Buklod ng Manggagawa v.
NLRC, G.R. No. 91980, 27 Jun.1991)
The Er cannot exempt himself from liability to pay
minimum wages because of poor financial condition
of the company, the payment of minimum wages not
being dependent on the Er’s ability to pay.
If, in fact, the Er cannot pay a subsistence wage, then
he should not continue his operation unless he
improves his methods and equipment so as to make
the payment of the minimum wage feasible for him,
otherwise, the Er is wasting the toil of the workers
2024 GOLDEN NOTES
and the material resources used in the employment. Cooperative Development and upon approval of
(Azucena, 2021) the SOLE. (Sec. 3, Rule VII, Book III, IRR);
Non-Applicability of Estoppel 5. Ees of retail and service establishments

regularly employing not more than 10 Ees; (Sec.
The acceptance of by an Ee of the wages paid him 4, R.A. No. 6727)
without objections does not give rise to estoppel
precluding him from suing for the difference 6. Workers in a duly registered cooperative when
between the amount received and the amount he so recommended by the Bureau of Cooperative
should have received pursuant to a valid minimum Development and upon approval of the SOLE;
wage law. (Sec. 2, Rule VII, Book III, IRR)
In other words, the law gives the Ee the right to be 7. Workers of a BMBE.
paid at least the minimum wage. Such legal right
cannot be waived or given away even if he does not NOTE: Retail and service establishments must file
complain at the time he receives a wage below the an application for exemption with the duly
minimum. (Azucena, 2016) appropriate Regional Board.
Minimum Wage Non-Negotiable and Non- Additional Exemptions

Waivable
The NWPC Guidelines on Exemption from wage
The minimum wage fixed by law is mandatory, thus, orders adds categories of exemptible enterprises
it is non-waivable and non-negotiable. The such as
enactment is compulsory in nature to ensure decent 1. distressed establishments,
living conditions. (PAM Co. v. PAMEA-FFW, G.R. No. L- 2. new business enterprises, and
35254, 29 Jan. 1973) 3. establishments adversely affected by natural
calamities.
XPNs to the Coverage of Minimum Wage:
Wage Orders issued by the wage boards under Arts.
1. Household or domestic helpers, including 99 and 122 may provide for other exemptions from
family drivers and persons in the personal the Minimum Wage Law. (Azucena, 2016)
service of another;
NOTE: Household or domestic workers are only

C. LEAVES
exempt from the minimum wage prescribed by
wage orders. R.A. No. 10361, otherwise known
as “Batas Kasambahay,” which prescribes the
minimum wage for household or domestic 1. SERVICE INCENTIVE LEAVES
helpers. (Art. 95, LC; Secs. 1-6, Rule V, Book III, Omnibus
Rules Implementing the Labor Code)
2. Homeworkers engaged in needle-work;
Service Incentive Leave (SIL)
3. Workers employed in any establishment duly
registered with the National Cottage Industries It is a five-day leave with pay for every Ee who has
and Development Authority provided that such rendered at least one year of service whether
workers perform the work in their respective continuous or broken. (Art. 95, LC)
homes;
4. Workers in any duly registered cooperative

when so recommended by the Bureau of
2024 GOLDEN NOTES
Purpose of the law
c. They have the authority to hire or fire
The stipulation in the contract for the allowance of a other Ees of lower rank; or their
vacation to Ees is merely a recognition by suggestions and recommendations as to
management and labor that a short interval of hiring, firing, and promotion, or any
complete rest and relaxation from daily routine with other change of status of other Ees are
the benefit of full pay is essential to the mental and given particular weight.
physical well-being of the workmen. (Bencio v.
Joseph Bouder, Inc., 24 So. 2d 398; A.L.R. 2d 352; 4. Field personnel and those whose time and
Sunripe Coconut Products v. NLU, 97 Phil. 691, 18 Oct. performance is unsupervised by the Er,
1955) including those who are engaged on:
“At least 1 year of service” a. Task or contract basis;

b. Purely commission basis; or
Service for not less than 12 months, whether c. Those who are paid a fixed amount for
continuous or broken, reckoned from the date the performing work irrespective of the
Ee started working, including authorized absences time consumed in the performance
and paid regular holidays unless the working days thereof;
in the establishment as a matter of practice or policy,
or that provided in the employment contract is less 5. Those who are already enjoying this benefit;
than 12 months, in which case said period shall be
considered as one year. (Sec. 3, Rule V, Book III, IRR) 6. Those enjoying vacation leave with pay of at
least five (5) days; and
Right to SIL
7. Those employed in establishments regularly
GR: Every Ee who has rendered at least one (1) year employing less than 10 Ees. (Sec. 1, Rule V, Book
of service shall be entitled to a yearly SIL of five (5) III, IRR)
days with pay. Leave pay means an Ee gets paid
despite absence from work. (Azucena, 2016) NOTE: Ees engaged on task or contract basis or paid
on purely commission basis are not automatically
XPNs: exempted from the grant of SIL, unless they fall
1. Government Ees, whether employed by the under the classification of field personnel.
National Government or and any of its political
subdivisions, including those employed in If required to be at specific places at specific times,
GOCCs with original charters or created under Ees including drivers cannot be said to be field
special laws; personnel despite the fact that they are performing
work away from the principal office of the Ee; as
2. Domestic helpers and persons in the personal such they are entitled to SIL. (Autobus Transport
service of another; Systems v. Bautista, G.R. No. 156367, 16 May 2005)
3. Managerial Ees, if they meet all of the following Teachers of Private Schools on Contract Basis
conditions: are Entitled to SIL
a. Their primary duty is to manage the In Cebu Institute of Technology v. Ople (G.R. No.
establishment in which they are 70203, 18 Dec. 1987), teaching personnel cannot be
employed or of a department or deemed as field personnel which refers to “non-
subdivision thereof; agricultural Ees who regularly perform their duties
away from the principal place of business or branch
b. They customarily and regularly direct the office of the Er and whose actual hours of work in
work of two or more Ees therein; and
2024 GOLDEN NOTES
the field cannot be determined with reasonable notwithstanding the Ees’ failure to allege the exact
certainty.” (Art. 82(3), LC) number of Ees in the corporation. (Murillo, et al. v.
Sun Valley Realty, Inc., G.R. No. 67272, 30 June 1988)
Part-time Workers are Entitled to the Full
Benefit of the Yearly 5-Day SIL Entitlement of Terminated Ees to SIL
A part-time worker is entitled to SIL whether the 1. Illegally dismissed Ees – Entitled to SIL until
service within 12 months is continuous or broken or actual reinstatement; (Integrated Contractor
where the working days in the employment contract and Plumbing Works, Inc. v. NLRC, G.R. No.
as a matter of practice or policy is less than 12 152427, 09 Aug. 2005) and
months. The availment and commutation of the
same can be proportionate to the daily work 2. Legally dismissed Ees – The Ee who had not
rendered and the regular daily salary. (DOLE’s been paid SIL from the outset of employment is
Explanatory Bulletin on Part-time Employment, 02 entitled only to such pay after a year from
Jan. 1996) commencement of service until termination of
employment or contract. (JPL Marketing
Entitlement of Piece-Rate Workers To SIL Promotions v. CA, G.R. No. 151966, 08 July 2005)
Piece-rate workers are entitled to the full benefit of Commutability of SIL to Monetary Equivalent
the yearly five-day SIL. Under the SIL Law, the
exclusion from its coverage of workers who are paid GR: It is commutable if not used or exhausted at the
on a purely commission basis is only with respect to end of the year. (Sec. 5, Rule V, IRR) It is aimed
field personnel. Ees engaged on task or primarily at encouraging workers to work
contract basis or paid on purely commission basis continuously and with dedication to the company.
are not automatically exempted from the grant of
SIL, unless they fall under the classification of field XPN: R.A. No. 10361 grants SIL to domestic workers.
personnel. (Serrano v. Severino Santos, G.R. No. Their SIL need not be converted to cash or carried
187698, 09 Aug. 2010) over to succeeding years. (Art. 139, LC)
Entitlement of Ees With Salaries Above Basis for Cash Conversion

Minimum Wage To SIL
The basis shall be the salary rate at the date of
Ees with salaries above minimum wage are entitled commutation. The availment and commutation of
to SIL. The difference between the minimum wage the SIL may be on a pro-rata basis.
and the actual salary received by the Ees cannot be
deemed as their 13th month pay and SIL pay as such Prescription of SIL
difference is not equivalent to or of the same import
as the said benefits contemplated by law. (JPL Applying Art. 306 of the LC in light of the peculiarity
Marketing Promotions v. CA, G.R. No. 151966, 08 July of SIL, the three (3)-year prescriptive period
2005) commences, not at the end of the year when the Ee
becomes entitled to the commutation of his SIL, but
Burden of Proof of Employers from the moment the employer refuses to
remunerate its monetary equivalent if the employee
One of those excluded from the obligation to grant did not make use of said leave credits but instead
SIL are “establishments regularly employing less chose to avail of its commutation or upon
than ten workers.” When an Er claims that it falls termination of the Ees’ services, as the case may be.
within the exception, it is the Er’s duty, not of the (Autobus Transport Systems v. Bautista, G.R. No.
Ees, to prove that there are less than ten Ees in the 156367, 16 May 2005)
company. If it fails to discharge its task, the Er must
be deemed to be covered by the rule,
2024 GOLDEN NOTES
2. LEAVES UNDER SPECIAL LAWS Period in General
All covered female workers in government and the

a. EXPANDED MATERNITY LEAVE
private sector, including those in the informal
(R.A. No. 11210)
economy, regardless of civil status or the legitimacy
of her child, shall be granted 105 days maternity
105-Day Expanded Maternity Leave Law
leave with full pay and an option to extend for an
additional 30 days without pay. Provided, that in
R.A. No. 11210 or the Expanded Maternity Leave
case the worker qualifies as a solo parent under the
Law (EMLL) was signed into law on 20 Feb. 2019
"Solo Parents’ Welfare Act", the worker shall be
and took effect on 11 Mar. 2019.
granted an additional 15 days maternity leave with
full pay. (Sec. 3, R.A. No. 11210)
Maternity Leave Under the SSS vs. Expanded
Maternity Leave Law
Covered Female Workers
MATERNITY LEAVE
EMLL Under the EMLL, maternity leave applies to all
(SEC. 14-A OF
(R.A. No. 11210) qualified female workers in the:
R.A. NO. 8282)
1. Public sector;
Minimum of 105 days
2. Private sector; and
60 days for normal for live childbirth,
3. Informal economy;
delivery; regardless of mode of
delivery
NOTE: Informal economy refers to the self-
78 days for caesarean
employed, occasionally or personally hired,
delivery 60 days for miscarriage
subcontracted, paid and unpaid family workers
or ETP
in household, incorporated, and
Regardless of the civil
Child must be unincorporated enterprises, including home
status or legitimacy of
legitimate workers, micro-entrepreneurs and producers,
the child
and operators of sari-sari store (Sec. 3, R.A. No.
Regardless of 11210);
Limited to 4 childbirths frequency of
pregnancy
4. Voluntary contributors to the SSS; and
Full pay which consists 5. National athletes. (Sec. 1, Rule III, IRR of R.A. No.
Daily maternity benefit of basic salary and 11210)
equivalent to 100% of allowances as may be
her ADSC provided under NOTE: National athletes are those athletes
existing guidelines including :
Applicability a. PWDs who are Filipino citizens, members

of the national training pool, recognized
The expanded maternity leave applies to all and accredited by the Philippine Olympic
qualified female workers regardless of civil status, Committee (POC) and the Philippine
employment status, and the legitimacy of her child. Sports Commission (PSC)
(Sec. 3, R.A. No. 11210)
b. Athletes with disabilities (AWDs) who are
Maternity leave shall be granted to a qualified recognized and accredited by the National
female worker in every instance of pregnancy, Paralympic Committee of the Philippines
miscarriage, or emergency termination of and the PSC and whohave represented the
pregnancy regardless of frequency. (Sec. 4, Rule IV, country in international sports
IRR of R.A. No. 11210) competitions. (Sec. 1(l), Rule II, IRR of R.A.
No. 11210)
2024 GOLDEN NOTES
4. Paid maternity leave, allowances, and benefits
Benefits Granted Under the EMLL granted to female national athletes;
1. Paid leave benefit granted to a qualified female 5. Health care services for pre-natal, delivery,
worker in the public sector, for the duration of: postpartum, and pregnancy-related conditions
granted to female workers, particularly those
a. 105 days with full pay for live childbirth, who are neither voluntary nor regular members
regardless of the mode of delivery, and an of the SSS, as governed by the existing rules and
additional 15 days paid leave if the female regulations of the PhilHealth. (Sec. 2, Rule III,
worker qualifies as a solo parent under R.A. IRR of R.A. No. 11210)
No. 8972 or the “Solo Parents’ Welfare Act of
2000;” or Pregnancy
b. 60 days with full pay for miscarriage and It refers to the period from the conception up to the
emergency termination of pregnancy time before actual delivery or birth of a child. (Sec.
(ETP). 1(m), Rule II, IRR of R.A. No. 11210)
2. Paid leave benefit granted to a qualified female Miscarriage and Emergency Termination of
worker in the private sector covered by the SSS, Pregnancy
including those in the informal economy, for the
duration of: “Miscarriage” refers to pregnancy loss before the
20th week of gestation. (Sec. 1(k), Rule II, IRR of R.A.
a. Same as those provided under 1(a) or 1(b); No. 11210)
b. Employed female workers shall receive full “Emergency termination of pregnancy” (ETP) refers
pay which consists of: to pregnancy loss on or after the 20th week of
gestation, including stillbirth. (Sec. 1(c), Rule II, IRR
i. SSS maternity benefit computed based of R.A. No. 11210)
on their average monthly salary credit;
and Q: Is the option of the 30-day extension without
pay available to all qualified female workers?
ii. Salary differential to be paid by the Er,
if any. A: NO. The 30-day extension without pay is only
available in cases of live childbirth. Hence, if a female
3. An “option” to extend for an additional 30 days worker suffers miscarriage or ETP, she is not
without pay in case of live childbirth, provided entitled to such extension.
that:
Manner of Enjoyment of the Benefit
a. The Er shall be given due notice;
Enjoyment of maternity leave cannot be deferred
b. The same must be in writing; but should be availed of either before or after the
actual period of delivery in a continuous and
c. It must be given at least 45 days before the uninterrupted manner, and such that:
end of the female worker’s maternity leave;
and 1. In cases of live childbirth, 105 days maternity
leave with full pay shall be granted; or
d. No prior notice is necessary in the event of
a medical emergency, a subsequent notice 2. In cases of miscarriage or emergency
to the Er shall suffice. termination of pregnancy, 60 days maternity
2024 GOLDEN NOTES
leave shall be granted. (Sec. 2, Rule IV, IRR of R.A. Maternity Leave of a Female Worker with
No. 11210) Pending Administrative Case
NOTE: in all the above instances, the maternity The maternity leave benefits granted under R.A. No.
leave can be credited as combinations of prenatal 11210 and its IRR shall be enjoyed by a female
and postnatal leave as long as it does not exceed 105 worker in the public sector and in the private sector
days or 60 days, as the case may be. In no case shall even if she has a pending administrative case. (Sec.
postnatal leave be less than 60 days. (Ibid.) 6, IRR of R.A. No. 11210.)
Extended Maternity Leave Non-Diminution of Benefits
In cases of live childbirth, an additional maternity Nothing shall be construed as to diminish existing
leave of 30 days, without pay, can be availed of, at maternity benefits currently enjoyed whether or not
the option of the female worker, provided that the these are granted under CBAs or present laws if the
employer shall be given due notice. (Sec. 3, IRR of same are more beneficial to the female worker.
R.A. No. 11210)
Any other working arrangement which the female
Due notice to the employer must be in writing and worker shall agree to, during the additional
must be given at least 45 days before the end of the maternity leave period, shall be allowed provided
female worker's maternity leave. However, no prior that the female worker consented to in writing and
notice shall be necessary in the event of a medical shall primarily uphold her maternal functions and
emergency but subsequent notice shall be given to the requirements of postnatal care. (Sec. 7, IRR of
the employer. (Ibid.) R.A. No. 11210)
NOTE: The above period of extended maternity Security of Tenure

leave without pay shall not be considered as gap in
the service. (Ibid.) Those who avail of the benefits whether in the
public or private sector, shall be assured of security
Frequency of the Grant of tenure. As such, the exercise of this option by
them shall not be used as basis for demotion in
Maternity leave shall be granted to a qualified employment or termination. (Sec. 8, IRR of R.A. No.
female worker in every instance of pregnancy, 11210)
miscarriage, or ETP, regardless of frequency. (Sec. 4,
IRR of R.A. No. 11210) The transfer to a parallel position or reassignment
from one organizational unit to another in the same
Grant of Maternity Leave Benefits after agency or private enterprise shall be allowed
Termination of Employment. provided that it shall not involve a reduction in rank,
status, salary, or otherwise amount to constructive
Maternity leave with full pay shall also be granted dismissal. (Ibid.)
even if the childbirth, miscarriage, or ETP occurs not
more than 15 calendar days after the termination of Non-Discrimination
an Ee’s service, as her right thereto has already
accrued. However, such period is not applicable No employer whether in the public or private sector
when the employment of the pregnant woman shall discriminate against the employment of
worker has been terminated without just cause. women in order to avoid the benefits provided for in
(Sec. 5, Rule IV, IRR of R.A. No. 11210) this Rules. (Sec. 9, IRR of R.A. No. 11210)
2024 GOLDEN NOTES
Maternity Leave for Female Workers in the In Case the Employee Qualifies as a Solo Parent
Public Sector Under the Solo Parents’ Welfare Act
Any pregnant female worker in the government The Ee shall be paid an additional maternity benefit
service, regardless of employment status and length of 15 days. An additional maternity leave of 30 days,
of service is eligible. (Sec. 4, R.A. No. 11210; Sec. 1, without pay, can be availed of, at the option of the
Rule V, IRR of R.A. No. 11210) female worker. Provided that:
“Female Workers in the Public Sector” 1. The head of the agency shall be given due notice,
in writing, 45 days before the end of her
Those women in government service who hold maternity leave; and
public office by virtue of an appointment issued by
the propert appointing officer or authority or by 2. That no prior notice shall be necessary in the
way of election in: event of a medical emergency but subsequent
1. National Government Agencies (NGAs); notice shall be given to the head of the agency.
2. LGUs; (Sec. 4, R.A. No. 11210)
3. GOCCs;
4. State Universities and Colleges (SUCs); and NOTE: Maternity leave of sixty (60) days, with full
5. Local Universities and Colleges (LUCs). (Sec. pay, shall be granted for miscarriage or emergency
1(h), Rule II, IRR of R.A. No. 11210) termination of pregnancy.
“Employment Status in the Public Sector” Maternity Leave in the Teaching Profession
It refers to the status of appointment. It may be Female teachers may also avail of maternity leave
permanent, temporary, coterminous, fixed term, even during long vacations, i.e., summer and
casual, contractual, substitute, or provisional. (Sec. Christmas vacations, in which case both the
1(e), IRR of R.A. No. 11210) maternity leave benefits and the proportional
vacation pay (PVP) shall be granted. (Sec. 3, Rule V,
Notice of Pregnancy and Application for IRR of R.A. No. 11210)
Maternity Leave
Extended Maternity Leave
The female worker shall:
1. Give prior notice to the head of agency of her In cases of live childbirth, the female worker has the
pregnancy and her availment of maternity leave option to extend her maternity leave for an
at least 30 days in advance, whenever possible, additional 30 days without pay, or use her earned
specifying the effective date of the leave; and sick leave credits for extended leave with pay. In
case the sick leave credits are exhausted, the
2. Use the prescribed civil service form in the filing vacation leave credits may be used. (Sec. 4, IRR of
of the maternity leave application, supported by R.A. No. 11210)
a medical certificate. (Sec. 2, Rule V, IRR of R.A.
No. 11210) Manner of payment of Maternity Leave Benefits
The female worker shall be entitled to full pay

during maternity leave which shall be paid by the
agency. She shall have the option to receive full pay
either through lump sum payment or regular
payment of salary through agency payroll. A
clearance from money, property and work-related
accountabilities shall be secured by the female Ee.
(Sec. 5, IRR of R.A. No. 11210)
2024 GOLDEN NOTES
Consecutive Pregnancies and Multiple 2. She shall have notified her Er of her pregnancy
Childbirths and the probable date of her childbirth, which
notice shall be transmitted to the SSS in
In case of overlapping maternity benefit claims (e.g., accordance with the rules and regulations it
one miscarriage or emergency termination of may provide. (Sec. 1, Rule VI, IRR of R.A. 11210)
pregnancy after the other or followed by live
childbirth), the Ee shall be granted maternity NOTE: The failure of the pregnant female worker to
benefits for the two contingencies in a consecutive notify the Er shall not bar her from receiving the
manner. The female worker shall be paid only one maternity benefits, subject to guidelines to be
maternity benefit, regardless of the number of prescribed by the SSS. (Sec. 2(c), IRR of R.A. 11210)
offspring, per childbirth/delivery. (Sec. 6, IRR of R.A.
No. 11210) “Employment status in the private sector”
Q: Can local elected and appointed officials, like It referes to the type of employment which may be
barangay officials, avail of the extended regular, probationary, casual, project, or seasonal.
maternity leave? (Sec. 1(f), Rule II, IRR of R.A. 11210)
A: YES. The coverage of R.A. No. 11210 includes Amount of Benefit

female workers in the public sector, including the
LGUs. Their entitlement to maternity leave benefits The qualified Ee must receive full payment of the
is also granted under the Local Government Code of benefit which shall be advanced by the Er within 30
1991 and its IRR, and CSC-DBM Joint Circular No. 1, days from the filing of the maternity leave
s. 2004 (Leave Benefits of Barangay Officials). application. (Sec. 3, Rule VI, IRR of R.A. 11210)
Q: Can contract of service and job order workers In the case of self-employed female members,
in government avail of maternity leave under including those in the informal economy, OFWs and
R.A. No. 11210? voluntary SSS members, the SSS shall directly pay
the maternity benefit. (Ibid.)
A: YES. Female contract of service and job order
workers in the government are classified as female SSS Reimbursement
workers in the informal economy. They can claim
maternity leave benefits from the SSS if they have The SSS shall immediately reimburse the Er the
remitted to the SSS at least three (3) monthly maternity benefits advanced to the employed
contributions in the 12-month period immediately female member, only to the extent of 100% of her
preceding the semester of her childbirth, average daily salary credit (ADSC) for 105 days, 120
miscarriage, or ETP. (Sec. 1, Rule VII, IRR of R.A. No. days or 60 days, as the case may be, upon receipt of
11210) satisfactory and legal proof of such payment (Sec. 4,
IRR of R.A. 11210)
Maternity Leave For Female Workers In The
Private Sector NOTE: Average daily salary credit (ADSC) is the
result obtained by dividing the sum of the six (6)
To qualify for the grant of maternity leave benefit, highest monthly salary credits in the twelve-month
the female worker must meet the following period immediately preceding the semester of
requirements: contingency by one hundred eighty (180). (Sec.
1(vi), SSS Circular No. 2019-009)
1. She must have at least 3 monthly contributions
in the 12-month period immediately preceding
the semester of childbirth, miscarriage, or ETP;
and
2024 GOLDEN NOTES
Salary Differential When there is a certification from the
Bangko Sentral ng Pilipinas that it is under
GR: Ers from the private sector shall pay for the receivership or liquidation as provided in
difference between the full salary and the actual Sec. 30 of RA 7653, otherwise known as the
cash benefits received from the SSS. (Sec. 5, IRR of New Central Bank Act.
R.A. 11210)
2. Those retail/service establishments and other
XPNs: enterprises employing not more than 10
workers;
1. Those operating distressed establishments;
3. Those considered as micro-business
a. For corporation/cooperative enterprises and engaged in the production,
processing, or manufacturing of products or
When the actual net loss amounts to 25% of commodities including agro-processing,
total assets or when the trading, and services, whose total assets are not
corporation/cooperative registers capital more than three million pesos; and
deficiency, i.e. negative stockholders' equity
immediately preceding the application for 4. Those who are already providing similar or
exemption. more than the benefits herein provided under
an existing CBA or company policy. (Ibid.)
b. For sole proprietorship and partnership
NOTE: The XPNs shall be subject to an annual
When the accumulated net losses for the last submission of justification by the Er claiming
two (2) full accounting periods immediately exemption for the approval of the DOLE. (Ibid.)
preceding application for exemption
amounts to 20% or more of the total Bar to Recovery of Sickness Benefits
invested capital at the beginning of the
period under review or when the sole The payment of daily SSS maternity benefits shall
proprietorship or partnership registers be a bar to recovery of sickness benefits provided
capital deficiency, i.e. negative net worth as under R.A. No. 11199 or the Social Security Act of
of the last full accounting period 2018, for the same period for which daily maternity
immediately preceding application for benefits have been received. (Sec. 6, IRR of R.A.
exemption. 11210)
c. For Non-stock, non-profit organizations Consecutive Pregnancies and Multiple

Childbirths
When the accumulated net losses for the last
two (2) full accounting periods immediately In cases of consecutive pregnancies resulting in
preceding application for exemption overlapping maternity leaves and in cases of
amounts to 20% or more of the fund multiple childbirths, the following rules shall
balance/members' contribution at the govern:
beginning of the period or when an
establishment registers capital deficiency, 1. In case of the overlapping of two (2) maternity
i.e. negative fund balance/members; benefit claims, the female member shall be
contribution as of the last full accounting granted maternity benefits for the two
period or interim period, if any, immediately contingencies in a consecutive manner.
preceding application for exemption. However, the amount of benefit corresponding
to the period where there is an overlap shall be
d. For banks and quasi-banks deducted from the current maternity benefit
claim; and
2024 GOLDEN NOTES
month period immediately preceding the semester
2. The female member shall be paid only one of her childbirth, miscarriage, or ETP.
maternity benefit, regardless of the number of
offspring per childbirth or delivery. (Sec. 7, IRR Manner of payment: The SSS shall directly pay the
of R.A. 11210) maternity benefit.
Liability of the Employer NOTE: In the case of self-employed female

members, including OFWs and voluntary SSS
The Er shall pay to the SSS damages equivalent to members, the SSS shall directly pay the maternity
the benefits which she would otherwise have been benefit.
entitled to any of the following instances:
Allocation Of Maternity Leave Credits
1. Failure of the Er to remit to the SSS the required
contributions for the female worker; or 1. Allocation to the Child’s Father or
Alternative Caregiver
2. Failure of the Er to transmit to SSS the female
worker’s notification on the fact of pregnancy In case of live childbirth, a qualified female
and probable date of childbirth. (Sec. 8, Ibid.) worker entitled to maternity leave benefits may,
at her option, allocate up to 7 days of said
Dispute Resolution benefits to the child’s father, whether the same
is married to the female worker. (Sec. 1, Rule
Any dispute, controversy, or claim as regards the VIII, Ibid.)
grant of SSS maternity leave benefit under this
Rules shall be filed before the Social Security In case of death, absence, or incapacity of the
Commission (SSC). (Sec. 9, IRR of R.A. 11210) child’s father, the female worker may allocate to
an alternate caregiver, who may be any of the
Any dispute, controversy, or claim arising out of or following upon the election of the mother
relating to the payment of salary differential shall taking into account the best interests of the
be filed before the DOLE Field/Provincial/Regional child:
Office having jurisdiction over the workplace and
shall be subject to existing enforcement a. A relative within the fourth degree of
mechanisms of the DOLE. (Ibid.) consanguinity; or
Maternity Leave For Female Workers In The b. The current partner, regardless of sexual
Informal Economy orientation or gender identity of the
female worker sharing the same
“Female Workers in the Informal Economy” household. (Ibid.)
Those self-employed, occasionally or personally The option to allocate maternity leave credits
hired, subcontracted, paid and unpaid family shall not be applicable in case the female
workers in household incorporated and worker suffers miscarriage or ETP. (Ibid.)
unincorporated enterprises, including home
workers, micro-entrepreneurs and producers, and NOTE: The allocated benefit granted to the
operators of sari-sari stores. (Sec. 1(i), Rule II, IRR of child's father under this law is over and above
R.A. 11210) that which is provided under R.A. No. 8187, or
the "Paternity Leave Act of 1996." (Ibid.)
Coverage
2. Allocation for the SSS-Covered Female Ees
Condition: She must have remitted to the SSS at
least three (3) monthly contributions in the 12-
2024 GOLDEN NOTES
In case the female worker avails of the option to Death or Permanent Incapacity of the Female
allocate, the SSS shall pay her the amount of the Worker
maternity benefit corresponding to the period
not allocated. (Sec. 2, Ibid.) The balance of her maternity leave benefits, if any,
shall accrue to the child's father or to a qualified
As applicable, the father or, in his death, alternate caregiver as provided in the above
absence, or incapacity, the alternate caregiver paragraphs subject to the following conditions:
shall be granted by his employer a leave with
pay equivalent to a period from 1 to 7 days, 1. That the maternity leave benefits have not yet
which may be enjoyed either in a continuous or been commuted to cash, if applicable; and
in an intermittent manner not later than the
period of the maternity leave availed of. (Ibid.) 2. That a certified true copy of the death certificate
or medical certificate or abstract is provided to
The female Ee shall notify her Er of her option the employers of both the female worker and
to allocate with her application for maternity the child's father or alternate caregiver. (Sec. 4,
leave. The father or alternate caregiver, as the Ibid.)
case may be, shall notify the Er concerned of his
or her availment of the allocated leave and the 3. In case the maternity leave benefits of the
inclusive dates thereof (Ibid.) deceased or permanently incapacitated female
worker have already been paid to the latter in
NOTE: This written notice to the employers shall be full, the child's father or alternate caregiver
required even if the child's father or the alternate shall be entitled to enjoy the remaining
caregiver is employed in the public sector. (Ibid) unexpired leave credits of the female worker, if
there be any, without pay. (Ibid.)
3. Allocation of Maternity Leave Credits for
Female Workers in the Public Sector NOTE: such leave without pay shall not be
considered as a gap in the service of the child's
In case the female worker opts to allocate, she father or alternate caregiver, in both the public and
shall submit a written notice to the head of private sector. (Ibid.)
agency or the head of agency's authorized
representative, with her application for Maternity Leave for Female National Athletes
maternity leave. (Sec. 3, Ibid.)
In the event that a national athlete who is in the
The allocated maternity leave may be enjoyed roster of national athletes of the National Sports
by the child's father or the alternate caregiver Association (NSA) to which she is affiliated becomes
either in a continuous or in an intermittent pregnant, she will be referred to:
manner not later than the period of the
maternity leave availed of. (Ibid.) 1. A physician of the Philippine Sports
Commission (PSC); or
In case full pay has been given to the female 2. An obstetrician-gynecologist to determine her
worker, the child's father or the alternate fitness to continue training. (Sec. 1, Rule IX, Ibid.)
caregiver, as the case may be, shall only be
excused from work (leave without pay). (Ibid.) She will be allowed to participate in all team-related
activities, unless the physician advises that
NOTE: The leave without pay shall not be participation is not medically safe or should be
considered as a gap in the service. (Ibid.) limited. Upon medical advice, she shall go on
maternity leave until cleared to return to training.
(Ibid.)
2024 GOLDEN NOTES
She shall continue receiving her allowance and be Conditions for Entitlement to Paternity Leave
entitled to the same benefits while on maternity
leave prior to childbirth and up to six (6) months 1. He is a married male Ee at the time of the
after, unless she can resume sooner as advised by delivery of his child;
her physician, in which case, she will continue to
receive the same allowances and benefits she 2. He is cohabiting with his spouse at the time she
received prior to and during the pregnancy. (Ibid.) gives birth or suffers a miscarriage;
NOTE: a female national athlete employed in the NOTE: “spouse” refers to the lawful wife who is
public sector shall not receive double compensation a woman is is legally married to the male Ee
or benefits. (Ibid.) concerned. (Sec. 1(d), Revised IRRs of R.A. No.
8187)
b. PATERNITY LEAVE
(R.A. No. 8187, as amended by R.A. No. 11210) 3. He has applied for paternity leave within a
reasonable period of time from the expected
Paternity Leave date of delivery by his pregnant spouse, or
within such period as may be provided by
It refers to the leave benefits granted to a married company rules or by collective bargaining
male Ee allowing him not to report for work for 7 agreement; and
days but continue to earn compensation on the
condition that his spouse has delivered a child or 4. His wife has given birth or suffered a
suffered a miscarriage for purposes of enabling him miscarriage. (Sec. 3, IRR of R.A. No. 8187)
to effectively lend support to his wife in her period
of recovery and/or in the nursing of the newly-born NOTE: In case of miscarriage, prior application for
child. (Sec. 3, R.A. No. 8187; Sec. 1, Revised IRR of R.A. leave shall not be required. (Sec. 4, Revised IRRs of
No. 8187) R.A. No. 8187)
Non-Commutation of Benefits Crediting of Existing Benefits
In the event that the paternity leave benefit is not 1. If the existing paternity leave benefit under the
availed of, said leave shall not be convertible to cash. collective bargaining agreement, contract, or
(Sec. 7, IRR of R.A. No. 8187) company policy is greater than seven (7)
calendar days as provided for in R.A. No. 8187,
Concept of Paternity Leave Benefits the greater benefit shall prevail.
Every married male Ee in the private and public 2. If the existing paternity leave benefit is less than
sectors shall be entitled to a paternity leave of seven that provided in R.A. No. 8187, the Er shall
days with full pay for the first four (4) deliveries adjust the existing benefit to cover the
of the legitimate spouse with whom he is difference. (Sec. 9, Revised IRR of R.A. No. 8187)
cohabiting. (Sec. 2, R.A. No. 8187)
NOTE: Where a company policy, contract, or CBA
NOTE: If the spouses are not physically living provides for an emergency or contingency leave
together because of the workstation or occupation, without specific provisions on paternity leave, the
the male Ee is still entitled to the paternity leave Er shall grant to the Ee seven (7) calendar days of
benefit. (Handbook on Workers’ Statutory Monetary paternity leave. (Handbook on Workers’ Statutory
Benefits, Bureau of Working Conditions, 2020) Monetary Benefits, Bureau of Working Conditions,
2020)
The allocated benefit granted to the child's father

under the 105-Day Expanded Maternity Leave Law
2024 GOLDEN NOTES
is over and above that which is provided under R.A. The HRD manager of the assurance firm denied
No. 8187, or the "Paternity Leave Act of 1996." his application, on the ground that Weto had
already used up his entitlement under the law.
Availment of the Paternity Leave May be After Weto argued that he has a new wife who will be
the Delivery giving birth for the first time, therefore, his
entitlement to paternity leave benefits would
Paternity leave may be availed after the delivery begin to run anew. Whose contention is correct,
without prejudice to an Er’s policy of allowing the Weto or the HRD manager? (2005 BAR)
Ee to avail of the benefit before or during the
delivery, provided that the total number of days A: The contention of Weto is correct. The law
shall not be more than seven (7) days for each provides that every married male is entitled to a
covered delivery. (Handbook on Workers’ Statutory paternity leave of 7 days for the first 4 deliveries of
Monetary Benefits, 2020) the legitimate spouse with whom he is cohabiting
with. The fact that Jovy is his second wife and that
Q: Because of the stress in caring for her four (4) Weto had four children with his first wife is
growing children, Tammy suffered a miscarriage immaterial. The important fact is that this is the first
late in her pregnancy and had to undergo an child of Jovy with Weto. The law did not distinguish,
operation. In the course of the operation, her therefore, we should not distinguish.
obstetrician further discovered a suspicious-
looking mass that required the subsequent The paternity leave was intended to enable the
removal of her uterus (hysterectomy). After husband to effectively lend support to his wife in her
surgery, her physician advised Tammy to be on period of recovery and/or in the nursing of the
full bed rest for six (6) weeks. Meanwhile, the newly born child. (Sec. 3, RA. No. 8187) To deny Weto
biopsy of the sample tissue taken from the mass this benefit would be to defeat the rationale for the
in Tammy's uterus showed a beginning law. Moreover, the case of Weto is a gray area and the
malignancy that required an immediate series doubt should be resolved in his favor.
of chemotherapy once a week for four (4) weeks.
What can Roger, Tammy's second husband and c. SOLO PARENT LEAVE
the father of her two (2) younger children, claim (R.A. No. 8972, as amended by R.A. No. 11861)
as benefits under the circumstances? (2013
BAR) Parental Leave
A: Under R.A. No. 8187 or the Paternity Leave Act of It refers to leave benefits granted to a solo parent to
1996, Roger can claim paternity leave of seven (7) enable the performance of parental duties and
days with full pay if he is lawfully married to Tammy responsibilities where physical presence is required
and cohabiting with her at the time of the or beneficial to the child (Sec. 3(e), R.A. No. 8972, as
miscarriage. amended by R.A. No. 11861)
Q: Mans Weto had been an Ee of Nopolt In addition to leave privileges under exiting laws, a
Assurance Company for the last ten (10) years. forfeitable and noncumulative parental leave of not
His wife of six (6) years died last year. They had more than seven (7) working days with pay every
four (4) children. He then fell in love with Jovy, year shall be granted to any solo parent employee,
his co-Ee, and they got married. In October this regardless of employment status, who has rendered
year, Weto's new wife is expected to give birth to service of at least six (6) months. (Sec. 8, Ibid.)
her first child. He has accordingly filed his
application for paternity leave, conformably NOTE: the parental leave benefit may be availed of
with the provisions of the Paternity Leave Law by the solo parent employees in the government and
which took effect in 1996. the private sector. (Ibid.)
2024 GOLDEN NOTES
Children or Dependents e. Legal separation or de facto separation for
at least 6 months, and the solo parent is
1. Those living with and dependent upon the solo entrusted with the sole parental care and
parent for support who are unmarried, support of the child or children;
unemployed and 22 years old or below; or
f. Declaration of nullity or annulment of
2. Those over 22 years old but who are unable to marriage, as decreed by a court recognized
fully take care or protect themselves from by law, or due to divorce, subject to existing
abuse, neglect, cruelty, exploitation, or laws, and the solo parent is entrusted with
discrimination because of a physical or mental the sole parental care and support of the
disability or condition. (Sec. 3(b), R.A. No. 8972, child or children; or
as amended by R.A. No. 11861)
g. Abandonment by the spouse for at least six
NOTE: this definition shall only apply for purposes (6) months;
of availing the benefits under this Act. (Ibid.)
2. Spouse or any family member of an OFW, or the
Spouse guardian of the child or children of an OFW.
Provided:
It refers to a husband or wife by virtue of a valid
marriage or a partner in a common-law relationship a. That the said OFW belongs to the low/semi-
as defined under Art. 147 of the Family Code. (Sec. skilled worker category and is away from
3(f), Ibid.) the Philippines for an uninterrupted period
of 12 months; and
Categories of Solo Parent
b. That the OFW, his or her spouse, family
1. A parent who provides sole parental care and member, or guardian of the child or
support of the child or children due to: children of an OFW falls under the
requirements of this Sec.;
a. Birth as a consequence of rape, even
without final conviction. Provided: 3. Unmarried mother or father who keeps and
rears the child or children;
i. That the mother has the sole parental
care and support of the child or 4. Any legal guardian, adoptive or foster parent
children; and who solely provides parental care and support
to a child or children;
ii. That the solo parent under this category
may still be considered a solo parent 5. Any relative within 4th civil degree of
under any of the categories in this Sec.; consanguinity or affinity of the parent or legal
guardian who assumes parental care and
b. Death of the spouse; support of the child or children as a result of the
death, abandonment, disappearance or absence
c. Detention of the spouse for at least 3 of the parents or solo parent for at least six (6)
months or service of sentence for a criminal months; or
conviction;
NOTE: In cases of solo grandparents who are
d. Physical or mental incapacity of the spouse senior citizens but who have the sole parental
as certified by a public or private medical care and support over their grandchildren who
practitioner; are unmarried, or unemployed and twenty-two
(22) years old or below, or those twenty-two
(22) years old or over but who are unable to
2024 GOLDEN NOTES
fully take care or protect themselves from 3. Absence of a valid and legal marriage between
abuse, neglect, cruelty, exploitation, or the mother and father of a child or dependent
discrimination because of a physical or mental does not automatically entitle either individual
disability or condition, they shall be entitled to to the benefits under this Act if the factual
the benefits of this Act in addition to the circumstances demonstrate that parental care
benefits granted to them by R.A. No. 9257 or the and support are shared; and
Expanded Senior Citizens Act of 2003.
4. When a solo parent ceases to be such by reason
6. A pregnant woman who provides sole parental of change of status and circumstances, the said
care and support to the unborn child or solo parent shall be ineligible to avail of the
children. (Sec. 4, Ibid.) benefits under this Act. (Sec. 16, R.A. No. 8972,
as amended by R.A. No. 11861)
Work Discrimination
Flexible Work Schedule
No Er shall discriminate against any solo parent Ee
with respect to terms and conditions of employment It refers to a work arrangement granted to solo
on account of his or her status. Ers may enter into parent employee to vary the arrival and departure
agreements with their solo parent Ees for a time in the workplace without affecting the core
telecommuting program, as provided in R.A. No. work hours as defined by the employer. (Sec. 3(c),
11165 or the Telecommuting Act. (Sec. 7, Ibid.) R.A. No. 8972, as amended by R.A. No. 11861)
NOTE: That said solo parent employees shall be The Er shall provide for a flexible work schedule for
given priority by their employer. (Ibid.) solo parents. Provided, that the same shall not affect
individual and company productivity: Provided,
Non-Conversion of Parental Leave further, that any Er may request exemption from the
above requirements from the DOLE on certain
If the parental leave is not availed of, said leave shall meritorious grounds.
not be convertible to cash unless specifically agreed
upon previously. However, if said leave were denied In the case of Ees in the government service, flexible
an Ee because of non-compliance with the working hours will be subject to the discretion of
provisions of these Rules by an Er, the the head of the agency. In no case shall the weekly
aforementioned leave may be used a basis for the working hours be reduced in the event the agency
computation of damages. (Sec. 20, Art. V, IRR of R.A. adopts the flexible working hours schedule format
No. 8972) (flexi-time). In the adoption of flexi-time, the core
working hours shall be prescribed taking into
Limitation and Termination of the Benefits of a consideration the needs of the service. (Sec. 16, Art.
Solo Parent V, IRR, of R.A. No. 8972)
1. Only a solo parent exercising sole parental care Crediting of Existing Leave
and support of the child or children is entitled
to claim the benefits of solo parent under this If there is an existing or similar benefit under a
Act; company policy, or a CBA or a collective negotiation
agreement, the same shall be credited as such. If the
2. The solo parent shall not lose his or her status same is greater than the seven (7) days provided for
as solo parent if the other parent provides in R.A. No. 8972, the greater benefit shall prevail.
occasional assistance and/or seasonal gifts that (Sec. 21, Art. V, IRR of R.A. No. 8972)
do not meet the legal requirement of support
under the Family Code;
2024 GOLDEN NOTES
d. GYNECOLOGICAL LEAVE 2. that after the surgery or appropriate

(R.A. No. 9710) recuperating period, the female employee shall
immediately file her application using the
A woman Ee having rendered continuous aggregate prescribed form. (Ibid.)
employment service of at least six (6) months for the
last 12 months shall be entitled to a special leave Gross Monthly Compensation
benefit (SLB) of two (2) months with full pay based
on her gross monthly compensation following It refers to the monthly basic pay plus mandatory
surgery caused by gynecological disorders. (Sec. 18, allowances fixed by the regional wage boards. (Sec.
R.A. No. 9710) 7(L), IRR of R.A. No. 9710)
Conditions for Entitlement Gynecological Disorders
Any female Ee in the public and private sector It refer to disorders that would require surgical
regardless of age and civil status shall be entitled to procedures such as, but not limited to, dilatation and
a special leave of two (2) months with full pay based curettage and those involving female reproductive
on her gross monthly compensation subject to organs such as the vagina, cervix, uterus, fallopian
existing laws, rules and regulations due to surgery tubes, ovaries, breast, adnexa and pelvic floor, as
caused by gynecological disorders under such terms certified by a competent physician. For purposes of
and conditions: the Act and these Rules and Regulations,
gynecological surgeries shall also include
1. She has rendered at least six (6) months hysterectomy, ovariectomy, and mastectomy. (Sec.
continuous aggregate employment service for 7(M), Ibid.)
the last 12 months prior to surgery;
Frequency of Availment
2. She has filed an application for special leave;
and A female Ee can avail of the special leave benefit for
every instance of surgery due to gynecological
3. She has undergone surgery due to disorder for a maximum total period of two (2)
gynecological disorders as certified by a months per year. (Sec. 6, D.O. 112-A-12)
competent physician. (Sec. 2, D.O. 112-A-12)
NOTE: SLB and SSS maternity benefit are mutually
Application for Special Leave exclusive, as such a female Ee may avail the special
leave benefit in case she undergoes surgery caused
The female Ee shall file her application for leave by gynecological disorder even on maternity leave.
with her Er within a reasonable period of time from However, where the woman Ee undergone surgery
the expected date of surgery, or within such period due to gynecological disorder during her maternity
as may be provided by company rules and leave, she is entitled only to the difference between
regulations or by CBA. (Sec. 3, Ibid.) the SLB and the maternity benefit. (Sec. 9, D.O. 112-
A-12)
Application When Not Necessary
Worker Not Required to Consume the Entire
In cases requiring emergency surgical procedure, Period of Special Leave
prior application for leave shall not be necessary
provided: Q: Atty. Panga-Vega, Secretary of the House of
Representatives Electoral Tribunal, applied for
1. That the employer shall be notified verbally or the special leave benefit under R.A. No. 9710 as
in written form within a reasonable period of she was under-going to undergo hysterectomy. A
time; and month later, after the procedure, she presented
2024 GOLDEN NOTES
a medical certificate that she was already fit to Mode of Payment
work and sought to resume her duties and
functions. However, the HRET directed Panga- The SLB is a leave privilege. The woman Ee shall not
Vega to consume her 2-month special leave. Is report for work for the duration of the leave but she
Panga-Vega required to consume the entire 2- will still receive her salary covering said period. The
month special leave? Er, in its discretion, may allow said Ee to receive her
pay for the period covered by the approved leave
A: NO. She is not required to consume the entire before or during the surgery. The computation of
two-month special leave, as the rules on maternity her pay shall be based on her prevailing salary at the
leave can apply suppletorily. Similar to the special time of the surgery. (Sec. 11, D.O. 112-A-12)
leave benefit under R.A. No. 9710, a maternity leave
under the Omnibus Rules on Leave seeks to protect Non-Commutation of the Benefit
the health and welfare of women, specifically of
working mothers, as its primary purpose is to afford The SLB shall be non-cumulative and non-
them some measures of financial aid, and to grant convertible to cash unless otherwise provided by a
them a period of rest and recuperation in CBA. (Sec. 12, D.O. 112-A-12)
connection with their pregnancies. Nothing in RA
No. 9710 and the CSC Guidelines bar this more Crediting of Existing or Similar Benefits
humane interpretation of the provision on special
leave benefit. (HRET v. Panga-Vega, G.R. No. 228236, The existing or similar benefits under a company
27 Jan. 2021, as penned by J. M.V. Lopez) policy or CBA shall be considered as compliance,
unless the company policy, practice, or CBA provides
Special Leave Benefit (SLB) vs. SSS Sickness otherwise. In case the company policy, practice or
Benefit CBA provides lesser benefits, the company shall
grant the difference. (Sec. 10, D.O. 112-A-12)
SPECIAL LEAVE SSS SICKNESS
BENEFIT BENEFIT Q: Because of the stress in caring for her four (4)
Granted in accordance growing children, Tammy suffered a miscarriage
with the SSS law or RA late in her pregnancy and had to undergo an
Granted in accordance
1161 as amended by operation. In the course of the operation, her
with R.A. No. 9710.
RA 8282. (Sec. 7, D.O. obstetrician further discovered a suspicious-
112-A-12) looking mass that required the subsequent
removal of her uterus (hysterectomy). After
SLB vs. Existing Statutory Leaves surgery, her physician advised Tammy to be on
full bed rest for six (6) weeks. Meanwhile, the
The SLB cannot be taken from statutory leaves (i.e., biopsy of the sample tissue taken from the mass
five-day SIL, Leave for Victims of VAWC, Parental in Tammy's uterus showed a beginning
Leave for Solo Parents). The benefit is in addition to malignancy that required an immediate series
the leave benefits granted by existing laws. (Sec. 8, of chemotherapy once a week for four (4) weeks.
D.O. 112-A-12) What benefits can Tammy claim under existing
social legislation? (2013 BAR)
NOTE: If there are existing or similar benefits under
a company policy or CBA providing similar or equal A: Assuming she is employed, Tammy is entitled to a
benefit to what is mandated by law, the same shall special leave benefit of two months with full pay
be considered as compliance unless the company (Gynecological Leave) pursuant to R.A. No. 9710 or
policy, practice or CBA provides otherwise. (Sec. 10, the Magna Carta of Women. She can also claim
DO 112-A-12) Sickness Leave Benefit in accordance with the SSS
Law as SLB and SSS maternity benefit are mutually
exclusive. (Sec. 9, D.O. 112-A-12)
2024 GOLDEN NOTES
leave, and on the same year, once again applied for
e. BATTERED WOMAN LEAVE another 10-day VAWC leave after suffering domestic
(R.A. No. 9262) abuse, this time in the hands of her new partner.
Accordingly, the concerned private business
Violence Against Women and Their Children organization sought clarification on whether the
said female employee is still entitled to another 10-
It refers to any act or a series of acts committed by day VAWC leave based on the obtaining
any person against a woman who is his wife, former circumstances.
wife, or against a woman with whom the person has
or had a sexual or dating relationship, or with whom Based on the provisions cited above, women who
he has a common child, or against her child whether are victims of any act or series of acts which
legitimate or illegitimate, within or without the constitute as VAWC, committed by any person are
family abode, which result in or is likely to result in entitled to a 10-day VAWC leave with pay.
physical, sexual, psychological harm or suffering, or
economic abuse including threats of such acts, As provided under Sec. 42 of the IRR to the VAWC
battery, assault, coercion, harassment or arbitrary Law, a victim of VAWC who is employed shall be
deprivation of liberty. (Sec. 3(a), R.A. No. 9262) entitled to a 10-day VAWC leave with pay at any time
during the application of any protection order,
Leave Entitlement investigation, prosecution and/or trial of the
criminal case, extendible when the necessity arises
It allows the victim of violence, which may be as specified in the protection order. The only
physical, sexual, or psychological, to apply for the requirement is the submission by the victim of a
issuance of a protection order. If such victim is an Ee, certification issued by the Punong
she is entitled to a paid leave of up to 10 days in Barangay/kagawad or prosecutor or the Clerk of
addition to other paid leaves under the LC, other Court, as the case may be, that such an action is
laws, and company policies. pending.
The Ee has to submit a certification from the Punong The VAWC Law provides that the criminal act may
Barangay or Kagawad, prosecutor, or clerk of court be done by any person against a woman victim. By
that an action under R.A. No. 9262 has been filed and using the term "any person," the VAWC Law
is pending. effectively protects women from abuses by different
persons (i.e., husband, partner or boyfriend), as long
For government Ees, in addition to the certification, as there is a confluence of all the elements of the
the Ee concerned must file an application for leave crime. Thus, if there is a separate incident of
citing R.A. No. 9262 as basis. violence against the woman victim by a different
person, which occurs within the same year, the
NOTE: Ee can file for an extended leave from her Er woman victim is entitled to a separate 10-day VAWC
if the ten-day leave is not enough and when the leave.
necessity arises as specified in the protection order
issued by the barangay or court. Moreover, according to Sec. 4 of the VAWC Law, the
law shall be liberally construed to promote the
DOJ Opinion on R.A. No. 9262 or the “Anti- protection and safety of victims of VAWC.
Violence Against Women and Their Children Act
of 2004” (VAWC Law) Penalties for Violation
It appears that the query stemmed from an inquiry Any Er who shall prejudice the right of the person
made by a private business organization regarding under this Sec. shall be penalized in accordance with
the application of the 10-day VAWC leave as the provisions of the Labor Code and Civil Service
provided in Sec. 43, to an employee who has Rules and Regulations. Likewise, an Er who shall
previously filed for and availed of the 10-day VAWC prejudice any person for assisting a co-Ee who is a
2024 GOLDEN NOTES
victim under this Act shall likewise be liable for ensure the smooth transition of work to their
discrimination. successor, otherwise, the Ee is given no work and is
directed to have no contact with clients or
Noncumulative/ Non-Conversion to Cash continuing Ees. During the period of garden leave,
Ees continue to be paid their salary and any other
The availment of the 10-day leave shall be at the contractual benefits as if they were rendering their
option of the woman Ee, which shall cover the days services to the employer. (Mejila v. Wrigley
that she has to attend to medical and legal concerns. Philippines, Inc., G.R. Nos. 199469 & 199505, 11 Sept.
Leaves not availed of are noncumulative and not 2019)
convertible to cash.
Q: Can an Ee apply for the 10-day leave from her

D. SPECIAL GROUPS OF EMPLOYEES
Er just because of a black eye or any
manifestation of abuse?
A: NO. The 10-day leave under the VAWC may only 1. WOMEN
be availed of if the victim has applied for any (Arts. 130 and 132-136, LC)
protection order with the intention to file a case
against the assailant. Other Laws protecting women Workers
Compassionate Leave 1. The State recognizes the role of women in

nation-building and shall ensure the
Time permitted away from work given as a feeling fundamental equality before the law of women
or showing of sympathy and sadness for the and men. (Sec. 14, Art. II, 1987 Constitution)
suffering or bad luck of employees and wanting to
help them. It is granted because of unusual 2. The State shall protect working women by
distressing circumstances affecting an employee. providing safe and healthful working
conditions, taking into account their maternal
NOTE: The term “Compassionate leave” has not yet functions, and such facilities and opportunities
been defined under the Philippine laws and that will enhance their welfare and enable them
jurisprudence. to realize their full potential in the service of the
nation. (Sec. 14, Art. XIII, 1987 Constitution)
Bereavement Leave
3. R.A. No. 6725 or “An Act Strengthening the
Bereavement leave and other death benefits are Prohibition on Discrimination against
granted to an Ee to give aid to, and if possible, lessen Women with Respect to Terms and Conditions
the grief of, the said Ee and his family who suffered of Employment” – which explicitly prohibits
the loss of a loved one. (Continental Steel discrimination against women with respect to
Manufacturing Corp. v. Montaño, G.R. No. 182836, 13 terms and conditions of employment,
Oct. 2009) promotion, and training opportunities.
Garden Leaves 4. R.A. No. 6955 or “An Act to Declare Unlawful

the Practice of Matching Filipino Women for
The practice of the Er directing an Ee not to attend Marriage to Foreign Nationals on Mail Order
work during the period of notice of resignation or Basis” – which bans the “mail-order-bride”
termination of the employment is colloquially practice for a fee and the export of female labor
known as “garden leave” or “gardening leave.” The to countries that cannot guarantee protection to
Ee might be given no work or limited duties, or be the rights of women workers.
required to be available during the notice period to,
for example, assist with the completion of work or
2024 GOLDEN NOTES
5. R.A. No. 7192 or “Women in Development and Facilities for Women under the Labor Code
Nation Building Act” – affords women equal The SOLE shall establish standards that will ensure
opportunities with men to act and to enter into the safety and health of women employees. In
contracts, and for appointment, admission, appropriate cases, he shall, by regulations, require
training, graduation, and commissioning in all any employer to:
military or similar schools.
1. Provide seats proper for women and permit
6. R.A. No. 7322 or “An Act Increasing Maternity them to use such seats when they are free from
Benefits in Favor of Women Workers in the work and during working hours, provided they
Private Sector” can perform their duties in this position
without detriment to efficiency;
7. R.A. No. 7877 or “Anti-Sexual Harassment Act”
2. To establish separate toilet rooms and
8. R.A. No. 8042 or the “Migrant Workers and lavatories for men and women and provide at
Overseas Filipinos Act of 1995” – which least a dressing room for women;
prescribes as a matter of policy, the deployment
of migrant workers, with emphasis on women, 3. To establish a nursery in a workplace for the
only in countries where their rights are secure. benefit of the women employees therein; and
(Philippine Telegraph and Telephone Co. v. NLRC,
G.R. No. 118978, 23 May 1997) 4. To determine appropriate minimum age and
other standards for retirement or termination
9. R.A. No. 11210 or the “105-Day Extended in special occupations such as those of flight
Maternity Leave Law” attendants and the like. (Art. 130, LC)
10. R.A. No. 9710 or “the Magna Carta of Women;” Discrimination

and
1. Discrimination with respect to the terms and
11. R.A. No. 9262 or the “Anti-Violence against conditions of employment solely on account of
Women and Children” sex.
State Policy on Non-Discrimination Against a. Discrimination in pay – Payment of a lesser

Women compensation including wage, salary or
other forms of remuneration and fringe
The State condemns discrimination against women benefits, to a female Ee as against a male Ee;
in all its forms and pursues by all appropriate means
and without delay the policy of eliminating b. Discrimination in employment
discrimination against women in keeping with the opportunity – favoring a male Ee over a
Convention on the Elimination of All Forms of female Ee with respect to promotion,
Discrimination Against Women (CEDAW) and other assignment, transfer, training opportunities,
international instruments consistent with study and scholarship grants solely on
Philippine law. The State shall accord women the account of their sexes (Art. 134, LC);
rights, protection, and opportunities available to
every member of society. (Sec. 2, R.A. No. 9710 or the c. Discrimination in hiring – favoring a male
Magna Carta of Women) applicant with respect to hiring where the
particular job can equally be handled by a
The State shall take steps to review and, when woman;
necessary, amend and/or repeal existing laws that
are discriminatory to women within three (3) years d. Discrimination in dismissal – favoring a
from the effectivity of this Act. (Sec. 12, R.A. No. male Ee over a female Ee with respect to
9710) dismissal of personnel or the application of
2024 GOLDEN NOTES
the “last in, first out principle” or other discrimination against women Ees which is declared
retrenchment policy of the Er. (Poquiz, 2012) to be unlawful by the Labor Code.
2. Stipulating, whether as a condition for For an Er to commit Sexual Harassment, he—as a

employment or continuation of employment: person of authority, influence or moral
ascendancy—should have demanded, requested or
a. That a woman Ee shall not get married; or otherwise required a sexual favor from his Ee
whether the demand, request or requirement for
b. That upon marriage, such woman Ee shall be submission is accepted by the object of said act.
deemed resigned or separated. (Art. 134, LC)
and Stipulation Against Marriage
3. Dismissing, discriminating or otherwise It shall be unlawful for the Er to:

prejudice a woman Ee by reason of her being
married. (Ibid.) 1. Require as a condition of employment or
continuation of employment that a woman Ee
Standard of Reasonable Test shall not get married;
Under the standard reasonable test, the Er has the 2. Stipulate expressly or tacitly that upon getting
burden of proof to prove the existence of a married, a woman Ee shall be deemed resigned
reasonable business necessity that would justify an or separated; or
employment policy. (Star Paper Corp. v. Simbol, G.R.
No. 164774, 12 Apr. 2006) 3. Actually dismiss, discharge, discriminate or
otherwise prejudice a woman Ee merely by
Expanded Breastfeeding Promotion Act of 2009 reason of her marriage. (Art. 134, LC)
Nursing Ees shall be granted break intervals in No-Spouse Employment Policy

addition to the regular time-off for meals to
breastfeed or express milk. These intervals, which It is a policy banning spouses from working in the
shall include the time it takes an Ee to get to and same company. Generally, spouses are allowed to
from the workplace lactation station, shall be work in the same company, provided it is not in the
counted as compensable hours worked. (Sec. 12, IRR same department, where there is direct supervision
of R.A. No. 10028) or control. In case spouses are in the same
department, one of them may be reassigned to
The DOLE may adjust the same provided hat such another department.
intervals shall not be less than a total of 40 minutes
for every eight (8)-hour working period. (Ibid.) NOTE: The XPN of BFOQ occurs when the Er can
prove that reasonable demands of the business
Q: Can an individual, the sole proprietor of a require a distinction based on marital status and
business enterprise, be said to have violated the there is no better or acceptable policy which would
Anti-Sexual Harassment Act of 1995 if he clearly better accomplish the business purpose.
discriminates against women in the adoption of
policy standards for employment and There must be a finding of any BFOQ to justify an
promotions in the enterprise? Explain. (2003 Er’s no-spouse employment rule. There must be a
BAR) compelling business necessity for which no
alternative exists other than the discriminating
A: When an Er discriminates against women in the practice.
adoption of policy standards for employment and
promotion in his enterprise, he is not guilty of
Sexual Harassment. Instead, the Er is guilty of
2024 GOLDEN NOTES
Importance of the BFOQ
Q: An international flight stewardess of PAL was
1. To ensure that the Ee can effectively perform his discharged from service, on account of her
work; marriage. PAL contends that Art. 134 of the
Labor Code applies only to women Ee in
2. So that the no-spouse employment rule will not ordinary occupations. Is the termination legal?
impose any danger to business.
A: NO. The termination is not legal and the policy of
Q: Glaxo, a company which has a policy against PAL against marriage is patently illegal. Requiring
Ees having relationships with the Ees of its that prospective flight attendants must be single and
competitors, employed Tecson as a medical that they will be automatically separated from the
representative. Tecson married Bettsy, a Branch service once they marry was declared void, it being
coordinator in one of Glaxo’s competitors. violative of the clear mandate in Art. 134 of the LC
Tecson was then transferred to another area but with regard to discrimination against married
he did not accept such transfer. Is the policy of women. Art. 134 is not intended to apply only to
Glaxo valid and reasonable so as to constitute women employed in ordinary occupations, or it
the act of Tecson as willful disobedience? should have categorically expressed so. The
sweeping intendment of the law be it on special or
A: YES. The prohibition against personal or marital ordinary occupations. (Zialcita, v. PAL, RO4-3-3398-
relationships with Ees of competitor companies 76, 20 Feb. 1997)
upon Glaxo’s Ees is reasonable under the
circumstances because relationships of that nature Prohibited Acts
might compromise the interest of the company.
Glaxo does not impose an absolute prohibition It shall be unlawful for any Er to:
against relationships between its Ees and those of
competitor companies. Its Ees are free to cultivate 1. Deny any woman Ee benefits provided by law;
relationships with and marry persons of their own
choosing. What the company merely seeks to avoid 2. Discharge any woman for the purpose of
is a conflict of interest between the Ee and the preventing her from enjoying any of the benefits
company that may arise out of such relationships. provided by law;
Furthermore, the prohibition forms part of the
employment contract and Tecson was aware of such 3. Discharge such woman on account of her
restrictions when he entered into a relationship pregnancy, or while on leave or in confinement
with Bettsy. (Duncan Assoc. Of Detailman-PTGWO v. due to her pregnancy; and
Glaxo Wellcome Phil. Inc., G.R. No. 162994, 17 Sept.
2004) 4. Discharge or refuse the admission of such
woman upon returning to her work for fear that
Q: May a woman worker be dismissed on the she may again be pregnant. (Art. 135, LC)
ground of dishonesty for having written ‘’single”
on the space for civil status on the application Discharging a Woman Due to Pregnancy
sheet, contrary to the fact that she was married?
The following are prohibited acts in connection with
A: Art. 136 (now Art. 134) of the LC explicitly the pregnancy of a woman Ee:
prohibits discrimination merely by reason of
marriage of a female Ee. The policy of not accepting 1. To discharge her on account of her pregnancy;
or disqualifying from work any woman worker who
contracts marriage is afoul of the right against 2. To discharge her while she is on leave due to her
discrimination provided to all women workers by pregnancy;
our labor laws and by our Constitution. (PT&T Co. v.
NLRC, G.R. No. 118978, 23 May 1997)
2024 GOLDEN NOTES
3. To discharge her while she is confined due to Persons Covered Under the Classification of
her pregnancy; Certain Women Workers
4. To discharge her upon returning to work for Any woman who is permitted or suffered to work:
fear that she may again be pregnant; (Art. 135,
LC) 1. With or without compensation;
5. To refuse her admission upon returning to work 2. In any night club, cocktail lounge, massage
for fear that she may again be pregnant; (Sec. 13, clinic, bar or similar establishment;
Rule XII, Book III, Rules to Implement the LC)
3. Under the effective control or supervision of the
6. Expulsion and non-readmission of women Er for a substantial period of time; and
faculty/female student due to pregnancy
outside of marriage. (Sec. 13(c), R.A. No. 9710) 4. Shall be considered as an Ee of such
establishment for purposes of labor and social
Series of Absences Due to Pregnancy and its legislation. (Art. 136, LC)
Related Ailments Not a Ground to Dismiss Ee
2. MINORS
The court agreed that in concluding that
(R.A. No. 7610, as amended by R.A. No. 9231)
respondent’s sickness was pregnancy-related and
therefore, the petitioner cannot terminate
Child Labor
respondent’s services because in doing so,
petitioner will be violating Art. 137 (now Art. 135)
of the LC. (Del Monte Philippines, Inc. v. Velasco, G.R. Any work or economic activity performed by a child
that subjects him or her to any form of exploitation
No. 153477, 06 Mar. 2007)
or is harmful to his or her health and safety or
Q: Can an Er dismiss an Ee on the ground of physical, mental, or psychosocial development. (Sec.
2, DOLE D.O. No. 65-04)
deliberately concealing her pregnancy and
incurring absences without official leave?
Working Child
A: NO. Her absence was justified considering that
she had just delivered a child, which can hardly be Any child engaged as follows:
considered a forbidden act, a dereliction of duty;
1. When the child is below 18 years of age in a
much less does it imply wrongful intent on the part
of the Ee. (Lakpue Drug, Inc. v. Belga, G.R. No. 166379, work or economic activity that is not child
labor; or
20 Oct. 2005)
Penalty for Commission of the Prohibited Acts 2. When the child is below 15 years of age:
Mentioned
a. In work where he/she is directly under
The offender would be subject to the penalties the responsibility of his/her parents or
legal guardian and where only members
provided under Art. 287 of the LC, the general
penalty clause under said code. of the child’s family are employed; or
b. In public entertainment or information.

Fine: Not less than P1,000 nor more than
P10,000; or (Ibid.)
Imprisonment: not less than three (3)

months or more than three years, or both,
at the discretion of the court.
2024 GOLDEN NOTES
Instances When the State can Intervene on concerned, if possible, and the
Behalf of the Child approval of the DOLE; and
1. When the parent, guardian, teacher or person ii. The following requirements in all
having care or custody of the child fails or is instances are strictly complied with:
unable to protect the child against abuse,
exploitation and discrimination; or 1. The Er shall ensure the protection,
health, safety, morals, and normal
2. When such acts are committed against the child development of the child;
by the said parent, guardian, teacher or person
having care and custody over the child. (Sec. 2, 2. The Er shall institute measures to
R.A. No. 7610) prevent the child's exploitation or
discrimination taking into account
Employment of Children the system and level of
remuneration, and the duration and
1. No person under 18 years of age is allowed to arrangement of working time; and
be employed in an undertaking which is
hazardous or deleterious in nature. 3. The Er shall formulate and
implement, subject to the approval
2. No Er shall discriminate against any person and supervision of competent
with respect to terms and conditions of authorities, a continuing program for
employment on account of his age. (Art. 138, LC) training and skills acquisition of the
child. (Sec. 12, R.A. No. 7610, as
3. Children below fifteen (15) years of age shall amended by R.A. No. 9231)
not be employed, except:
NOTE: Where any such child may be employed, the
a. When a child works directly under the sole employer shall first secure, before engaging such
responsibility of his/her parents or legal child, a work permit from the DOLE which shall
guardian and where only members of ensure observance of the above requirements.
his/her family are employed. Such (Ibid.)
employment must:
For purposes of this Article, the term "child" shall
i. neither endangers his/her life, safety, apply to all persons under 18 years of age.
health, and morals, nor impairs his/her
normal development; and Prohibition on the Employment of Children in
Certain Advertisements
ii. That the parent or legal guardian shall
provide the said child with the No child below 18 years of age shall be employed as
prescribed primary and/or secondary a model in any advertisement directly or indirectly
education; or promoting:
b. Where a child's employment or 1. alcoholic beverages;

participation in public entertainment or 2. intoxicating drinks;
information through cinema, theater, radio, 3. tobacco and its byproducts;
television or other forms of media is 4. gambling or any form of violence; or
essential. Provided that: 5. pornography.
i. The employment contract is concluded

by the child's parents or legal guardian,
with the express agreement of the child
2024 GOLDEN NOTES
Hours of Work of a Working Child
4. Work which, by its nature or circumstances in
1. Below 15 years of age – may be allowed to which it is carried out, is hazardous or likely to
work for not more than 20 hours a week. be harmful to the health, safety or morals of
children, such that it:
NOTE: The work shall not be more than four (4)
hours at any given day; a. Debases, degrades or demeans the intrinsic
worth and dignity of a child as a human
2. 15 years of age but below 18 – shall not be being; or
allowed to work for more than 8 hours a day,
and in no case beyond forty (40) hours a week; b. Exposes the child to physical, emotional or
sexual abuse, or is found to be highly
3. Below 15 years of age – shall not be allowed to stressful psychologically or may prejudice
work between 8:00 P.M. and 6:00 A.M. of the morals; or
following day; and
c. Is performed underground, underwater or
4. 15 years of age but below 18 – shall be allowed at dangerous heights; or
to work between ten o'clock in the evening and
six o'clock in the morning of the following day. d. Involves the use of dangerous machinery,
(Sec. 2-A, Ibid.) equipment and tools such as power-driven
or explosive power-actuated tools; or
NOTE: Sleeping time as well travel time of a child
engaged in public entertainment or information e. Exposes the child to physical danger such
from his/her residence to his/her workplace shall as, but not limited to the dangerous feats of
not be included as hours worked without prejudice balancing, physical strength or contortion,
to the application of existing rules on employees or which requires the manual transport of
compensation. (Sec. 15, DOLE D.O. No. 65-04) heavy loads; or
Prohibition Against Worst Forms of Child Labor f. Is performed in an unhealthy environment

exposing the child to hazardous working
No child shall be engaged in the worst forms of child conditions, elements, substances, co-agents
labor. The phrase “worst forms of child labor” shall or processes involving ionizing, radiation,
refer to any of the following: fire, flammable substances, noxious
components and the like, or to extreme
1. All forms of slavery (Anti-Trafficking of Persons temperatures, noise levels, or vibrations; or
Act of 2003) or practices similar to slavery such
as sale and trafficking of children, debt bondage g. Is performed under particularly difficult
and serfdom and forced or compulsory labor, conditions; or
including recruitment of children for use in
armed conflict; h. Exposes the child to biological agents such
as bacteria, fungi, viruses, protozoans,
2. The use, procuring, offering of a child for nematodes and other parasites; or
prostitution, for the production of pornography
or for pornographic performances; i. Involves the manufacture or handling of
explosives and other pyrotechnic products.
3. The use, procuring, offering or exposing of a (Sec. 12-D, R.A. No. 9231); and
child for illegal or illicit activities, including the
production and trafficking of dangerous drugs 5. Employing child models in all commercials or
and volatile substances prohibited under advertisements promoting alcoholic beverages,
existing laws;
2024 GOLDEN NOTES
intoxicating drinks, tobacco and its by-products Duty of The Employer Before Engaging a Minor
and violence. (Sec. 14, RA 7610) Into Employment
Persons Who Can File a Complaint For Unlawful The Er shall first secure a work permit from the
Acts Committed Against Children DOLE which shall ensure observance of the
requirements. (Sec. 12, R.A. No. 7160)
1. Offended party;
Working Child Permit When Required
2. Parents or guardians;
If a child below 15 years of age:
3. Ascendants or collateral relatives within the 3rd
degree of consanguinity; 1. Will be engaged in public entertainment or
information regardless of his/her role in a
4. Officer, social worker or representative of a project. This includes projects which are non-
licensed child-caring institution; profit, advocacy materials or political
advertisements; or
5. Officer or social worker of DSWD;
2. Is a foreign national and will be engaged in
6. Barangay chairman of the place where the public entertainment in the PH;
violation occurred, where the child is residing
or employed; or, 3. Will be engaged as regular extra or as part of a
crowd and is included in the script or
7. At least three concerned, responsible citizens storyboard;
where the violation occurred. (Sec. 27, R.A. No.
7610, as amended by R.A. No. 9231) 4. Has been selected for a project after undergoing
auditions, workshops or VTR screenings; or
Jurisdiction Over Offenses Punishable Under
R.A. No. 9231 5. Has been selected as semi-finalist in a singing,
dance or talent contest for a television show.
The Family Courts shall have original jurisdiction (DOLE Circular No. 2, s. 2018)
over all cases involving offenses punishable under
this Act. (Sec. 16-A, R.A. No. 7610, as amended by R.A. Working Child Permit When Not Required
No. 9231)
If a child below 15 years of age:
Normal Development of the Child
1. A spot extra or is cast outright on the day of
It refers to physical, emotional, mental, and spiritual filming or taping of a project;
growth of a child within a safe and nurturing 2. Will join auditions or VTR screenings;
environment where he/she is given adequate 3. Part of the audience of a live television show
nourishment, care and protection and the unless the child’s participation is expected;
opportunity to perform tasks appropriate at each 4. Picked or chosen as contestant from the
stage of development. audience of a live television show;
5. A contestant for a TV show but has not yet been
1. The child is provided with at least the selected as a semi-finalist;
mandatory elementary or secondary education; 6. A recipient of gift-giving activities in TV;
and 7. A participant in school-related performance;
2. The Er secures a work permit for the child. 8. A participant in sports activities, trainings, or
(Secs. 8 to 12, Ibid.) workshops; or
9. Will be featured in a documentary material.
(Ibid.)
2024 GOLDEN NOTES
Issuance of Work Certificates or Permits to shall render a semi-annual accounting of the fund to
Children At Least 15 But Below 18 Years of Age the DOLE. The child shall have full control over the
When Not Required trust fund upon reaching the age of majority. (Sec.
12-C, R.A. No. 7610)
The issuance of a DOLE Certificate to youth aged 15
to below 18 years of age is not required by law. No Hazardous Workplaces
Er shall deny the opportunity to any such youth
applying for employment merely on the basis of lack 1. Nature of work exposes the workers to
of work permit or certificate of eligibility for dangerous environmental elements,
employment. Any young person aged 15 to below 18 contaminants or work conditions;
years of age may present a copy of this DOLE
advisory to any Er, job provider, government 2. Workers are engaged in construction work,
authority, or his/her representative when seeking logging, firefighting, mining, quarrying,
employment or anytime during employment. (DOLE blasting, stevedoring, dock work, deep-sea
D.A. No. 01-08) fishing, and mechanized farming;
Regulation of Working Hours of a Child 3. Workers are engaged in the manufacture or

handling of explosives and other pyrotechnic
It includes: products; or
1. All time during which a child is required to be at 4. Workers use or are exposed to heavy or power-
a prescribed workplace; and driven tools.
2. All time during which a child is suffered or Non-Hazardous Work

permitted to work.
It is any work or activity in which the Ee is not
Rest periods of short duration during working hours exposed to any risk which constitutes an imminent
shall be counted as hours worked. (Sec. 3, Chapter 1, danger to his safety and health.
Ibid.)
Hazardous Work and Activities
Ownership, Usage and Administration of the
Working Child’s Income The following work and activities are hereby
declared hazardous to persons below 18 years of
The wages, salaries, earnings and other income of age:
the working child shall belong to him/her in
ownership and shall be set aside primarily for 1. Work which exposes children to physical,
his/her support, education or skills acquisition and psychological or sexual abuse;
secondarily to the collective needs of the family
provided, that not more than 20% of the child's Examples are lewd shows (stripteasers,
income may be used for the collective needs of the burlesque dancers, and the like), cabarets, bars
family. (Sec. 12-B, R.A. No. 7610) (KTV, karaoke bars), dance halls, bath houses
and massage clinics, escort service, or gambling
Trust Fund to Preserve Part of the Working halls and places.
Child’s Income
2. Work underground, under water, at
The parent or legal guardian of a working child dangerous heights or at unguarded heights
below 18 years of age shall set up a trust fund for at of two meters and above, or in confined
least 30% of the earnings of the child whose wages places;
and salaries from work and other income amount to
at least P200,000.00 annually, for which he/she
2024 GOLDEN NOTES
Examples are mining, deep sea fishing/diving, NOTE: Persons between 15 and 18 years of age
installing and repairing of telephone, telegraph may be allowed to engage in domestic or
and electrical lines; cable fitters, painting household service, subject in all cases to the
buildings, window cleaning, or fruit picking limitations prescribed in Nos. 1 to 5 above. (Sec. 4,
involving climbing. Ibid.)
3. Work with dangerous machinery, equipment Q: You were asked by a paint manufacturing
and tools, or which involves manual company regarding the possible employment as
handling or transport of heavy loads; a mixer of a person aged 17, who shall be directly
under the care of the section supervisor. What
Examples are logging, construction, quarrying, advice would you give? Explain briefly. (2002
operating agricultural machinery in BAR)
mechanized farming, metal work and welding,
driving or operating havy equipment, operating A: The paint manufacturing company cannot hire a
or setting motor-driven machines, operating person who is aged 17. Art. 137(c) of the LC provides
power-driven tools, stevedoring, working in that a person below 18 years of age shall not be
airport hangars, working in warehouses, or allowed to work in an undertaking which is
working in docks. hazardous or deleterious in nature as determined
by the SOLE. Paint manufacturing has been
4. Work in unhealthy environment which may classified by the SOLE as hazardous work.
expose children to hazardous processes;
Q: A spinster schoolteacher took pity on one of
Examples are manufacture or handling of her pupils, a robust and precocious 12-year-old
pyrotechnics, tanning, pesticide spraying, boy whose poor family could barely afford the
blacksmithing, hammersmiths, forging, cost of his schooling. She lives alone at her house
extracting lard and oil, tiling and greasing of near the school after her housemaid left. In the
heavy machinery, fiber and plastic preparing, afternoon, she lets the boy do various chores as
bleaching, dyeing, and finishing of textiles using cleaning, fetching water and all kinds of errands
chemicals, embalming and as undertakers, after school hours. She gives him rice and Php
painting and as finishers in metal craft 30.00 before the boy goes home at 7 every night.
industries, applying of adhesive/solvent in The school principal learned about it and
footwear, handicraft, and woodwork industries, charged her with violating the law which
brewing and distilling of alcoholic beverages, prohibits the employment of children below 15
recycling of batteries and containers or years of age. In her defense, the teacher stated
materials used or contaminated with chemicals, that the work performed by her pupil is not
working in abattoirs or slaughterhouses, hazardous, and she invoked the exception
garbage collecting, handling of animal manure provided in the Department Order of DOLE for
in poultry houses or as fertilizers in farming, the engagement of persons in domestic and
working in hospitals or other health care household service. Is her defense tenable?
facilities, assisting in laboratories and x-ray (2004 BAR)
work, welding, working in furnaces and kilns,
in discotheques, or in video arcades A: NO. Under Art. 137 of the LC on “minimum
employable age,” no child below 15 years of age shall
5. Work under particularly difficult conditions be employed except when he works directly under
such as work for long hours or during the the sole responsibility of his parents or guardian,
night, or work where the child is the provisions of the alleged department order of
unreasonably confined to the premises of DOLE to the contrary notwithstanding. A mere
the Er. (Sec. 3, D.O. No. 04 Series of 1999) department order cannot prevail over the express
prohibitory provisions of the LC.
2024 GOLDEN NOTES
Q: Iya, 15 years old, signed up to model a clothing below 15 years of age, provided that the following
brand. She worked from 9am to 4 pm on requirements are strictly complied with:
weekdays and 1pm to 6pm on Saturdays for two
(2) weeks. She was issued a child working 1. The Er shall ensure the protection, health safety
permit under R.A. No. 9231. Which of the and morals of the child;
following statements is the most accurate?
(2012 BAR) 2. The Er shall institute measures to prevent the
child’s exploitation or discrimination taking
a) Working permit for Iya’s employment is into account the system and level of
not required because the job is not remuneration, and the duration and
hazardous; arrangement of working time; and
b) Her work period exceeds the required
working hours for children aged 15 years 3. The Er shall formulate and implement, subject
old; to the approval and supervision of competent
c) To require a 15-year-old to work without authorities, a continuing program for training
obtaining the requisite working permit is and skill acquisition of the child. Moreover, the
a form of child labor; child must be directly under the sole
d) Iya, who was engaged in a work that is not responsibility of his parents or guardian and his
child labor, is a working child. employment should not in any way interfere
with his schooling.
A: d). Iya, who was engaged in a work that is not
child labor, is a working child. (Sec. 12-A) c) A 15-year-old girl working as a library
assistant in a girls' high school.
Q: Determine whether the following minors
should be prohibited from being hired and from A: NO. She should not be prohibited from working
performing their respective duties indicated as a library assistant because the prohibition in the
hereunder: (2006 BAR) LC against employment of persons below 18 years
of age merely pertains to employment in an
a) A 17-year-old boy working as miner at undertaking which is hazardous or deleterious in
the Walwadi Mining Corporation. nature as identified in the guidelines issued by the
SOLE. Working as a library assistant is not one of
A: YES. He should be prohibited from being hired undertakings identified to be hazardous under D.O.
and from performing the duties of a miner because No. 04 Series of 1999.
such constitutes hazardous work as it is a work
underground under D.O. No. 04 Series of 1999. Art. d) A 16-year-old girl working as model
137(c) of LC expressly prohibits the employment of promoting alcoholic beverages.
persons under 18 years of age in an undertaking
which is hazardous or deleterious in nature as A: YES. She should be prohibited from working as a
determined by the SOLE. model promoting alcoholic beverages. R.A. No. 7610
categorically prohibits the employment of child
b) An 11-year-old boy who is an models in all commercials or advertisements
accomplished singer and performer in promoting alcoholic beverages and intoxicating
different parts of the country. drinks, among other things.
A: NO. He should not be prohibited from being hired e) A 17-year-old boy working as a dealer
and from performing as a singer. Under Sec. 12(2), in a casino. (2006 BAR)
Art. VIII of R.A. No. 7610, as amended by R.A. No.
7658, this constitutes an exception to the general A: YES. He should be prohibited from working as a
prohibition against the employment of children dealer in casino, because Art. 137(c) of the LC
prohibits the employment of persons below 18
2024 GOLDEN NOTES
years of age in an undertaking which is hazardous Debt Bondage
or deleterious in nature identified in the guidelines
issued by the SOLE. Working as a dealer in a casino It refers to the rendering of service by the domestic
is classified as hazardous under D.O. No. 04 Series of worker as security or payment for a debt where the
1999 as it exposes children to physical, length and nature of service is not clearly defined or
psychological or sexual abuses. when the value of the service is not reasonably
applied in the payment of the debt. (Sec. 4, R.A. No.
10361)
3. KASAMBAHAYS
(R.A. No. 10361)
Children under Foster Family Arrangement
Persons covered by R.A. No. 10361 Otherwise Those children who are living with a family or
Known as “Batas Kasambahay”
household of relative/s and are provided access to
education and given an allowance incidental to
All kasambahay engaged in domestic work, whether education (i.e., “baon,” transportation, school
on a live-in or live-out arrangement, such as, but not
projects, and school activities).
limited to, the following:
NOTE: The foster family and foster care
1. General househelp;
arrangements should be in compliance with the
2. Nursemaid or Yaya; procedures and requirements as prescribed by R.A.
3. Cook; No. 10165 or the Foster Care Act of 2012.
4. Gardener;
5. Laundry person; Q: Soledad, a widowed schoolteacher, takes
6. Working children or domestic workers 15 years under her wing one of her students, Kiko, 13
old and above but below 18 years of age; or
years old, who was abandoned by his parents
7. Any person who regularly performs domestic and has to do odd jobs in order to study. She
work in one household on an occupational basis allows Kiko to live in her house, provides him
(live-out arrangement). (Sec. 4(d), R.A. No.
with clean clothes, food, and a daily allowance of
10361) 200 pesos. In exchange, Kiko does routine
housework, consisting of cleaning the house and
Persons Not Covered by Batas Kasambahay
doing errands for Soledad.
1. Service providers;
One day, a representative of the DOLE and the
2. Family drivers;
DSWD came to Soledad's house and charged her
3. Children under foster family arrangement; and with violating the law that prohibits work by
4. Any other person who performs work
minors. Soledad objects and offers as a defense
occasionally or sporadically and not on an
that she was not requiring Kiko to work as the
occupational and regular basis. (Sec. 2, Rule 1, chores were not hazardous. Further, she did not
IRR of R.A. No. 10361)
give him chores regularly but only intermittently
as the need may arise. Is Soledad's defense
NOTE: Sec. 4(d) of the Kasambahay Law pertaining meritorious? (2015 BAR)
to who are included in the enumeration of domestic
or household help cannot also be interpreted to A: YES. Soledad’s defense is meritorious. Sec. 4(d) of
include family drivers because the latter category of the Kasambahay Law (R.A. No. 10361) provides that
worker is clearly not included. (Atienza v. Saluta, G.R.
the term “Domestic Worker” shall not include
No. 233413, 17 June 2019) children who are under foster family arrangement
and those who are provided access to education and
given an allowance incidental to education (i.e.,
“baon”, transportation, school projects and school
activities).
2024 GOLDEN NOTES
Examples of Persons Performing Work Modes of Hiring a Kasambahay
Occasionally or Sporadically and Not on an
Occupational Basis An Er can hire directly or indirectly through private
employment agencies (PEAs) registered with the
1. A janitress doing irregular laundry work for a DOLE regional offices. (Sec. 1, Rule II, IRR of R.A. No.
household during rest day; 10361) The Er, whether the kasambahay is hired
through a PEA or a third party, shall shoulder the
2. A construction worker doing casual gardening expenses for hiring. The kasambahay shall not be
job for a household; or charged of any cost of the recruitment, placement,
or finder’s fee. (Sec. 2, Rule II, IRR of R.A. No. 10361)
3. A hospital nurse or a student doing baby-sitting
job. (Q&A on Batas Kasambahay, DOLE) NOTE: The Er, whether directly hired or through
PEA, shall pay the expenses that are directly used for
Employable Age for a Kasambahay the transfer of the kasambahay from place of origin
to the place of work. The Er can be reimbursed of the
The age should be 15 years old and above. deployment expenses when the kasambahay
unreasonably leaves the Er within six (6) months
NOTE: The employment of children 15 years old and from the time he/she started work. (Sec. 3, Rule II,
above but below 18 years of age may be made under IRR of R.A. No. 10361)
the following conditions:
If a kasambahay is hired thru a PEA, the agency is
1. They shall not be allowed to work for more allowed to collect Service Fee from the Er.
than eight (8) hours a day, and in no case
beyond 40 hours a week; Pre-Employment Requirements
2. They shall not be allowed to work between 10 Prior to the execution of the employment contract,
P.M. to 6 A.M. of the following day; the Er may require the following from the
kasambahay:
3. They shall not be allowed to do hazardous
work or likely to be harmful to the health, 1. Medical certificate or health certificate issued
safety or morals of children, as defined under by a local government health officer;
existing laws and regulations; and 2. Barangay and police clearance;
3. NBI clearance; and
4. They shall not be denied access to education 4. Duly authenticated birth certificate or, if not
and training. (Sec. 2, Rule VI, IRR of R.A. No. available, voter’s ID baptismal record, or
10361) passport showing the kasambahay’s age. (Sec.
12, R.A. No. 10361)
NOTE: The consent of the parent/guardian of
working children is required in the employment NOTE: All expenses made pursuant to the availment
contract. of pre-employment requirements, should be
shouldered by the Er. The foregoing requirements
Employer’s Household are mandatory when the employment of the
kasambahay is facilitated through a private
Household refers to the immediate family members employment agency.
or other occupants of the house who are directly and
regularly provided services by the kasambahay. (Sec. It is not a requirement for a kasambahay to be
4(f), R.A. No. 10361) trained and certified by TESDA prior to
employment. However, the kasambahay is
encouraged to undergo competency assessment
and be certified by TESDA. Training is not a
2024 GOLDEN NOTES
requirement for competency assessment. (Q&A on 3. Accumulating rest days not exceeding 5 days; or
Batas Kasambahay, DOLE) 4. Other similar arrangements. (Sec. 21, R.A. No.
10361)
Recruitment and Finder’s Fees
NOTE: If the kasambahay is below 18 years old, the
Regardless of whether the domestic worker was employment contract shall be signed by his/her
hired through a private employment agency or a parent or lawful guardian on his/her behalf. (Sec. 5,
third party, no share in the recruitment or finder’s Rule II, IRR of R.A. No. 10361)
fees shall be charged against the domestic worker by
the said private employment agency or third party. Registration of the Kasambahay
(Sec. 13, R.A. No. 10361)
The Er is required to register the kasambahay in the
Contract between the Er and Kasambahay Registry of Domestic Workers in the barangay
Should be Written and Should Contain where the Er resides. For this purpose, the DILG, in
Conditions Set by Law coordination with the DOLE, shall formulate a
registration system. (Sec. 17, R.A. No. 10361)
The Er and the kasambahay shall enter into a written
contract of employment in a language or dialect NOTE: The registration of the kasambahay is free of
understood by them. charge.
NOTE: The contract need not be notarized. The Domestic Workers Cannot Acquire Regularity of
Punong Barangay or his/her designated officer may Employment under RA 10361
attest to the contract and serve as witness to its
execution. GR: All the indicia of regularity of employment
remain absent in the employment of domestic
Contents of the Employment Contract helpers. (Chan, 2017)
1. Duties and responsibilities of the kasambahay XPN: The mere fact that the househelper is working
which include the responsibility to render within the premises of the business of the Er and in
satisfactory service at all times; relation to or in connection with the business, as in
2. Period of employment; staff houses for its guest or even for its officers and
3. Compensation; Ees, warrants the conclusion that such househelper
4. Authorized deductions; is and should be considered as a regular Ee.
5. Hours of work and proportionate additional (Remington Industrial Sales Corp. v. Castaneda, G.R.
payment; No. 169295-96, 20 Nov. 2006)
6. Rest days and allowable leaves;
7. Board, lodging and medical attention; NOTE: Such a case must be based on its factual
8. Agreements on deployment expenses, if any; antecedents.
9. Loan agreement, if any;
10. Termination of employment; and Q: Linda was employed by Sectarian University
11. Any other lawful condition agreed upon by both (SU) to cook for the members of a religious order
parties. (Sec. 5, Rule II, IRR of R.A. No. 10361) who teach and live inside the campus. While
performing her assigned task, Linda accidentally
Domestic Worker and the Employer are Not burned herself. Because of the extent of her
Deprived from Agreeing on: injuries, she went on medical leave. Meanwhile,
SU engaged a replacement cook. Linda filed a
1. Offsetting a day of absence with a particular rest complaint for illegal dismissal, but her Er SU
day; contended that Linda was not a regular Ee but a
2. Waiving a particular rest day in return for an domestic househelp. Decide. (2014 BAR)
equivalent daily rate of pay;
2024 GOLDEN NOTES
A: The Er's argument that Linda was not a regular Ee Basic Necessities of a Kasambahay
has no merit. The definition of domestic servant or
househelper contemplates one who is employed in 1. At least three (3) adequate meals a day, taking
the Er’s home to minister exclusively to the personal into consideration the kasambahay’s religious
comfort and enjoyment of the Er’s family. The beliefs and cultural practices;
Supreme Court already held that the mere fact that
the househelper is working in relation to or in 2. Humane sleeping condition that respects the
connection with its business warrants the person’s privacy for live-in arrangement; and
conclusion that such househelper or domestic
servant is and should be considered as a regular Ee. 3. Appropriate rest and basic medical assistance,
(Apex Mining Co., Inc. v. NLRC, G.R. No. 94951, 22 Apr. including first-aid medicine, in case of illness
1991) Here, Linda was hired not to minister to the and injuries sustained during service without
personal comfort and enjoyment of her Er's family loss of benefits. (Sec. 13, Rule IV, IRR of R.A. No.
but to attend to other Ees who teach and live inside 10361)
the campus.
NOTE: For the Kasambahay under live-out
Mandatory Benefits of a Kasambahay arrangement, he/she shall be provided space for
rest and access to sanitary facility. Though not part
1. Monthly minimum wage; of the “basic necessities” required to be provided
2. Daily rest period of eight (total) hours; by the Er to the kasambahay, shampoo, soap,
3. Weekly rest period of 24 (uninterrupted) hours; toothpaste etc. may be provided gratuitously.
4. Five days annual service incentive leave with
pay; Monthly Minimum Wage of a Kasambahay
5. 13th month pay;
6. SSS benefit; MONTHLY
7. PhilHealth benefit; and MINIMUM WAGE
OTHER
8. Pag-IBIG benefit. IN CITIES AND
MUNICIPALITIES
1ST CLASS
Other Rights and Privileges of a Kasambahay MUNICIPALITIES
NCR P6,500
1. Freedom from Er’s interference in wage CAR P4,900
disposal; I P5,500
2. Standard of treatment; II P5,500
3. Board, lodging, and medical attendance; III P5,000 P4,500
4. Right to privacy; IV - A P6,000 P5,000
5. Access to outside communication; IV - B P5,500
6. Access to education and training; V P5,000
7. Right to be provided a copy of the employment
VI P5,000
contract;
VII P5,500 P4,500
8. Right to Certificate of Employment;
VIII P5,500 P5,000
9. Right to form, join, or assist labor organization;
IX P4,600 P4,100
10. Right to terminate employment based on just
X P5,000 P5,000
cause; and
XI P4,500
11. Right to exercise religious beliefs and cultural
XII P5,000 P4,500
practices. (Sec. 1, Rule IV, IRR of RA 10361)
XIII P5,000
(Current Monthly Minimum Wage for Domestic
Workers as per National Wages and Productivity
Commission)
2024 GOLDEN NOTES
NOTE: The law provides a mechanism for increasing 24 Consecutive Hours of Rest in A Week
the minimum wage of the kasambahay. The Regional
Tripartite Wages and Productivity Boards (RTWPB) Kasambahays are also entitled to at least 24
may review, and if proper, determine and adjust the consecutive hours of rest in a week. The Er and the
minimum wage. (Sec. 24, R.A. No. 10361) The RTWPB kasambahay shall agree in writing on the schedule
shall coordinate with TESDA on the wage review and of the weekly rest day. The Er shall respect the
adjustment based on the kasambahay’s competency preferred weekly rest day of the kasambahay on
level, in line with the thrust to professionalize the religious grounds. (Sec. 21, Ibid.)
domestic service sector.
Q: Can the Er shorten the 24-hour rest day
Payment of Wages period of the kasambahay
Wages shall be in cash and be paid at least once a A: NO. However, the kasambahay and the Er may
month. (Secs. 3-4, Rule IV, IRR of R.A. No. 10361) agree to shorten the rest day, provided the Er pays
for the hours worked during the shortened rest day.
NOTE: The Er shall, at all times, provide the (Q&A on Batas Kasambahay, DOLE)
kasambahay with a copy of the pay slip every pay
day containing the amount paid and all deductions Five (5)-Day Annual SIL
made, if any. The copies of the pay slip shall be kept The kasambahay can avail the five (5)-day annual
by the Er for a period of three (3) years. (Sec. 26, SIL after one (1) year of service.
R.A. No. 10361)
NOTE: Any unused portion of the SIL shall not be
Payment of wages by means of promissory, cumulative or carried over to the succeeding years.
voucher, coupon, token, ticket, chit, or anything Unused leaves shall not be convertible to cash.
other than the cash wage is prohibited. (Sec. 3, Rule
IV, IRR of R.A. No. 10361) Other Agreements that the Er and the
Kasambahay Can Enter into Relative to the
Daily Rest Period Latter’s Weekly Rest Day and SIL
The kasambahay is entitled to a total daily rest 1. Offsetting a day of absence with a particular rest
period of at least eight (8) hours. (Sec. 20, R.A. No. day;
10361) 2. Waiving a particular rest day in return for an
equivalent daily rate of pay;
Prohibition of Work Beyond 16 Hours 3. Accumulating rest days not exceeding 5 days;
4. Adding the accumulated rest days (max. of 5
The Er cannot require the kasambahay to work days) to the five-day SIL; and
beyond 16 hours at any given workday in return for 5. Waiving a particular SIL in return for an
an equivalent hourly rate. The eight-hour rest equivalent daily rate of pay.
period must be observed.
13th month pay
NOTE: This provision of special law is inconsistent
with Art. 1695 of the Civil Code which prohibits The kasambahay is entitled to 13th month pay after
more than ten (10) hours of work of a househelper. one (1) month of service.
Nevertheless, applying the rules on statutory
construction, in case of conflict between a general Computation of the 13thmonth Pay
law and special law, the special law prevails.
In computing the 13th month pay, the total basic
wage received in a given calendar year shall be
divided by 12. The amount derived shall be paid not
2024 GOLDEN NOTES
later than December 24 or upon separation from Provisions Protecting Ers of a Kasambahay
employment. (Sec. 8, Rule IV, IRR of R.A. No. 10361)
1. Prohibition against privileged information;
SSS, PhilHealth, and PAG-IBIG
2. Er may require certain pre-employment
The kasambahay is covered by SSS, PhilHealth and documents prior to engagement;
Pag-IBIG after one (1) month of service.
3. Ers are assured of quality services through
Q: Supposing that in exchange for non- DOLE-TESDA training, assessment, and
membership, the kasambahay agrees with the Er certification of kasambahay;
to receive the premiums and contributions in
addition to his/her salary. Is this allowed? 4. Forfeiture of 15-day unpaid salary should the
kasambahay leave the residence of the Er
A: NO. Under the SSS, PhilHealth, and PAG-IBIG laws, without any justifiable reason; and
the Er has the obligation to register the kasambahay
and deduct and remit the required premiums and 5. Right to terminate the employment on
contributions. The Er shall incur certain liabilities, justifiable grounds. (Q&A on Batas Kasambahay,
including criminal prosecution, if he fails or refuses DOLE)
to comply with his/her obligations. (Q&A on Batas
Kasambahay, DOLE) Grounds for Termination of Contract by the
Kasambahay
Kasambahay Avails of Certain Loan Privileges
from PAG-IBIG Fund Which Require the Payment 1. Verbal or emotional abuse of the kasambahay by
of Additional or Upgraded Contributions the Er or any member of the household;
Said additional or upgraded contributions shall be 2. Inhuman treatment including physical abuse of
shouldered solely by the kasambahay. (Sec. 9, Art. IV, the kasambahay by the Er or any member of the
IRR of R.A. No. 10361) household;
Er’s Liability in Case the Kasambahay Refuses to 3. Commission of a Crime or offense against the
Be a Member of SSS, PhilHealth, and PAG-IBIG kasambahay by the Er or any member of the
household;
The Er is still liable under the SSS, PhilHealth, and
PAG-IBIG laws in case the kasambahay refuses 4. Violation by the Er of the terms and conditions
membership with those agencies, because it is of the employment contract and other
mandatory and non-negotiable. (Q&A on Batas standards set forth under the law;
Kasambahay, DOLE)
5. Any disease prejudicial to the health of the
Person Liable to Pay the SSS premium, kasambahay, the Er, or member/s of the
PhilHealth and PAG-IBIG Contributions of the household; and
Kasambahay
6. Other causes analogous to the foregoing. (Sec.
GR: The Er shall pay the SSS premium, PhilHealth, 33, R.A. No. 10361)
and PAG-IBIG contributions of the kasambahay
Grounds for Termination of Contract by the Er
XPN: If the wage of the kasambahay is P5,000.00 or
more, the kasambahay will pay his/her share in the 1. Misconduct or willful disobedience by the
premiums/contributions. (Sec. 9, Rule IV, IRR of R.A. kasambahay of the lawful order of the Er in
No. 10361) connection with the former’s work;
2024 GOLDEN NOTES
2. Gross or habitual neglect or inefficiency by the Liabilities of a Kasambahay Who Leaves
kasambahay in the performance of duties; His/Her Er Without Justifiable Reason
3. Fraud or willful breach of the trust reposed by 1. Forfeiture of wage equivalent to 15 days work;
the Er on the kasambahay; and
2. Reimbursement of the deployment expenses, if
4. Commission of a crime or offense by the the employment contract is terminated within
kasambahay against the person of the Er or any 6 months from employment. (Sec. 32, R.A. No.
immediate member of the Er’s family; 10361)
5. Violation by the kasambahay of the terms and Q: Can the Er inspect the belongings of the
conditions of the employment contract and kasambahay before he/she leaves the
other standards set forth under the law; household in case of termination of
employment?
6. Any disease prejudicial to the health of the
kasambahay, the Er, or member/s of the A: NO. The Er cannot inspect the belongings of the
household; and kasambahay. However, the Er and the kasambahay
can agree in their employment contract that an
7. Other causes analogous to the foregoing. (Sec. inspection can be made before he/she leaves the
34, R.A. No. 10361) household. (Q&A on Batas Kasambahay, DOLE)
NOTE: Neither the domestic worker nor the Er may Q: If there is non-payment or underpayment of
terminate the contract before the expiration of the wage and other labor-related concerns, where
term except for grounds provided for in Secs. 33 can the kasambahay seek assistance?
and 34 of the Batas Kasambahay.
A: The kasambahay can go to a Kasambahay Desk
The domestic worker and the Er may mutually Officer situated in their respective barangays or the
agree upon written notice to pre-terminate the nearest DOLE field/provincial/regional office.
contract of employment to end the employment (Q&A on Batas Kasambahay, DOLE)
relationship. (Sec. 32, Ibid.)
Replacement of Kasambahay Hired through
Termination of Contract If the Duration of PEAs
Service Is Not Determined in the Contract
Within one (1) month from the day the
The kasambahay or the Er may terminate the Kasambahay reported for work, the Er shall be
contract any time if the duration of service is not entitled to a qualified replacement at no additional
determined in the contract. Either the Er or the cost of any if the ff. grounds occurred:
kasambahay may give notice to end the working
relationship five (5) days before the intended date 1. The kasambahay is found to be suffering from
of the termination of service. (Sec. 32, R.A. No. an incurable or contagious disease, or mental
10361) illness as certified by a competent or
government physician;
Effect of Unjust Dismissal by the Er
2. The kasambahay abandons the job without
The kasambahay shall receive the following if justifiable cause, voluntarily resigns, commits
he/she is unjustly dismissed by the Er: theft or any other analogous acts prejudicial to
1. Outright payment of earned wage; and the Er or his/her family; or
2. Indemnity benefit in the form of wage
equivalent to 15 days work. (Q&A on Batas 3. The kasambahay is physically or mentally
Kasambahay, DOLE) incapable of discharging the minimum
2024 GOLDEN NOTES
requirements of the job, as specified in the Unlawful Acts under the Batas Kasambahay
employment contract. (Sec. 4, Rule III, IRR of
R.A. No. 10361) 1. Employment of children below 15 years of age;
2. Withholding of the kasambahay’s wages;
NOTE: The Er shall be entitled to a refund of 3. Interference in the disposal of the kasambahay’s
seventy-five (75%) of the deployment expenses or wages;
fees paid to the PEA, if the latter failed to provide a 4. Requiring kasambahay to make deposits for loss
qualified replacement after a lapse of one (1) or damage;
month from receipt of the request for replacement. 5. Placing the kasambahay under debt bondage;
and
Responsibilities of the PEAs under the Law 6. Charging another household for temporarily
performed tasks. (Sec. 1, Rule XII, IRR of R.A. No.
1. Ensure that the kasambahay is qualified as 10361)
required by the Er;
NOTE: Unlawful acts are punishable with an
2. Secure the best terms and conditions of administrative fine ranging from P10,000 to
employment for the kasambahay; P40,000 to be imposed by the DOLE Regional
Offices.
3. Ensure that the employment agreement
between the kasambahay and the Er stipulates Other Remedies for Unlawful Acts
the terms and conditions of employment and
all the benefits in accordance with the IRR; The aggrieved party may file the appropriate civil or
criminal action before the regular courts.
4. Provide a pre-employment orientation briefing
to the kasambahay and the Er about their Remedy for Abused or Exploited Kasambahay
rights and responsibilities in accordance with
the IRR; The law mandates the conduct of immediate rescue
of abused or exploited kasambahay by the municipal
5. Ensure that the kasambahay is not charged or or city social welfare officer or a social welfare
required to pay any recruitment or placement officer from DSWD, in coordination with the
fees; concerned barangay officials. (Sec. 1, Rule X, IRR of
R.A. No. 10361)
6. Keep copies of employment contracts and
agreements pertaining to recruited The law sets out that crimes or offenses committed
kasambahay, which shall be made available under the Revised Penal Code and other criminal
during inspections or whenever required by laws shall be filed with the regular courts. (Sec. 3,
the DOLE or local government officials; Rule X, IRR of R.A. No. 10361)
7. Assist the kasambahay in filing his/her Parties who can Report the Abuse Committed
complaints or grievances against the Ers; Against a Kasambahay
8. Cooperate with government agencies in rescue 1. Offended kasambahay;

operations involving abused or exploited 2. Parents or guardians of the offended
kasambahay; and kasambahay;
3. Ascendants, descendants or collateral relatives
9. Assume joint and solidary liability with the Er within the fourth (4th) civil degree of
for payment of wages, wage-related and other consanguinity or affinity;
benefits, including monthly contribution for 4. Social workers from the LSWDOs or the DSWD
SSS, PhilHealth, and Pag-IBIG membership. Field Office;
(Sec. 3, Rule III, IRR of R.A. No. 10361)
2024 GOLDEN NOTES
5. Police officers from the Women and Children 4. HOMEWORKERS
Protection Desks; (Arts. 151-153, LC)
6. Barangay Officials;
7. Lawyer, counselor, therapist, or healthcare
Homeworkers
provider of the offended kasambahay; or
8. At least two (2) concerned responsible citizens
They are those who perform in or about his own
of the city or municipality where the abuse
home any processing or fabrication of goods or
occurred and who has personal knowledge of
materials, in whole or in part, which have been
the offense committed. (Sec. 3, Rule X, IRR of
furnished directly or indirectly, by an Er and sold
R.A. No. 10361)
thereafter to the latter.
Q: Albert, a 40-year-old Er, asked his domestic

NOTE: D.O. No. 05-92, DOLE (04 Feb. 1992)
helper, Inday, to give him a private massage.
amended Rule XIV of the IRR.
When Inday refused, Albert showed her Art. 141
of the Labor Code, which says that one of the
Industrial Homework
duties of a domestic helper is to minister to the
Er’s personal comfort and convenience. Is
It is a system of production under which work for an
Inday’s refusal tenable? (2009 BAR)
Er or contractor is carried out by a homeworker at
his/her home. Materials may or may not be
A: YES. Inday’s refusal to give her Er a “private
furnished by the Er or contractor.
massage” is in accordance with law because the
nature of the work of a domestic worker must be in
It differs from regular factory production principally
connection with household chores. Massaging is not
in that it is a decentralized form of production
a domestic work.
where there is ordinarily very little supervision or
regulation of methods of work. (Sec. 2(a), DOLE D.O.
Q: NBC has a rest house and recreational facility
No. 05-92)
in the highlands of Tagaytay City for the use of its
top executives and corporate clients. The rest
Home
house staff includes a caretaker, two cooks and a
laundrywoman. All of them are reported to the
It means any room, house, apartment or other
SSS as domestic or household Ees of the
premises used regularly, in whole or in part, as
resthouse and recreational facility and not of
dwelling place, except those situated within the
NBC. Can NBC legally consider the caretaker,
premises or compound of an employer, contractor
cooks and laundrywoman as domestic Ees of the
or subcontractor and the work performed therein is
rest house and not of NBC? (2000 BAR)
under the active or personal supervision by or for
the latter. (Sec. 2(c), Ibid.)
A: NO. They are not domestic Ees. They are the Ees
of NBC because the rest house and recreational
facility are business facilities which are for use of
NBC’s top executives and clients. (Traders Royal
Bank v. NLRC, G.R. No. 127864, 22 Dec. 1999)
NOTE: A house help, a laundrywoman, a driver,

houseboy or gardener working in staff houses of a
company who attends to the needs of the company’s
guests is not a househelper or domestic servant. He
is an industrial worker who must be paid the
industrial rate.
2024 GOLDEN NOTES
House helpers vs. Homeworkers (2017 BAR) Liability of the Er if the Contractor or
Subcontractor Fails to Pay the Wages or Earnings
HOUSE HELPERS HOMEWORKERS of his Ees
Performs in or about his Er shall be jointly and severally liable with the
own home any contractor or subcontractor to the workers of the
processing or latter to the extent that such work is performed
Ministers to the fabrication of goods or under such contract, in the same manner as if the
personal needs and materials, in whole or in Ees or homeworkers were directly engaged by the
comfort of his Er in the part, which have been Er. (Sec. 11, D.O. No. 05-92)
latter’s home furnished directly or
indirectly, by an Er and Right of Industrial Homeworkers to Form Labor
sold thereafter to the Organizations
latter.
D.O. No. 05-92 (04 Feb. 1992), replacing Rule XIV of
the IRR Book III of the LC, authorizes the formation
Er of a Homeworker
and registration of labor organization of industrial
homeworkers. It also makes explicit the Ers duty to
It includes any person, natural or artificial who, for
pay and remit SSS, PhilHealth and ECC premiums.
his account or benefit, or on behalf of any person
(Secs. 3, DOLE D.O. No. 05-92)
residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor or
Payment for Homework
any other person:
Immediately upon receipt of the finished goods and
1. Delivers or causes to be delivered, any goods,
articles, the Er is required to pay the homeworker
articles or materials to be processed or
for the work performed less corresponding
fabricated in or about a home and thereafter to homeworkers’ share of SSS, MEDICARE, and ECC
be returned or to be disposed of or distributed
premium contributions, which shall be remitted by
in accordance with his directions; or
the contract/subcontractor or Er to the SSS with the
Ers’ share. (Sec. 6, DOLE D.O. No. 05-92)
2. Sells any goods, articles, or materials to be
processed or fabricated in or abut a home and
However, where payment is made to a contractor or
then repurchases them after such processing or
subcontractor, the homeworker shall likewise be
fabrication, either by himself or through some
paid immediately after the goods or articles have
other person. (Sec. 2(d), D.O. No. 05-92)
been collected from the workers. (Ibid.)
Duty of the Er in Case He Contracts with Another

Conditions for Payment of Work
in the Performance of His Work
The Er may require the homeworker to redo the
It shall be the duty of the Er to provide in such
work which has been improperly executed without
contract that the Ees or homeworkers of the having to pay the stipulated rate again.
contractor and the latter’s subcontractor shall be
paid in accordance with the LC. (Sec. 11, D.O. No. 05-
An Er, contractor, or subcontractor need not pay the
92) homeworker for any work which has been done on
goods and articles which have been returned for
reasons attributable to the fault of the homeworker.
(Sec. 9, D.O. No. 05-92)
2024 GOLDEN NOTES
Q: Josie is the confidential secretary of the
Standard Rates for Homeworkers Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
At the initiative of the Department or upon petition where the Chairman of the Board can still have
of any interested party, SOLE or his representative access to her services, the bank allows her to
shall establish the standard output rate (SOR) or work in her residence during her leave. For this
standard minimum rate through any of the purpose, the bank installed a fax machine in her
following procedures: residence, and gave her a cellphone and a
beeper. Is Josie a homeworker under the law?
1. Time and motion studies; Explain. (2000 BAR)
2. Individual/collective agreement between the
ER and its workers as approved by SOLE; and A: NO. She is actually an office worker. She is not an
3. Consultation with representatives of employers industrial homeworker who accepts work to be
and workers organization. (Sec. 7, D.O. No. 05- fabricated or processed at home for a contractor,
92) which work, when finished, will be returned to, or
repurchased by said contractor. (Art. 155, LC)
Prohibitions for Homework
5. NIGHT WORKERS
The following shall be prohibited as homework:
(Arts. 154-161, LC)
1. Explosives, fireworks and similar articles;

Night Work
2. Drugs and poisons; and
3. Other articles, the processing of which requires
exposure to toxic substances. (Sec. 13, D.O. No. Night work is at least seven (7) consecutive hours of
work between 10:00 PM and 6:00 AM. (Sec. 2, D.O.
05-92)
No. 119-12)
Conditions for Deduction from Homeworker’s
Night Worker
Earnings
Any employed person whose work covers the period

GR: The Er, contractor or subcontractor shall not
from ten o’clock in the evening to six o’clock the
make any deduction from the homeworker’s
earnings for the value of materials which have been following morning, provided that the worker
performs no less than 7 consecutive hours of work.
lost, destroyed, soiled or otherwise damage.
(Sec. 2, D.O. No. 119-12)
XPN: Unless the following conditions are met:
NOTE: R.A. No. 10151 inserted Chapter V (Arts. 154-
161) under Book 3, Title III of the LC.
1. The homeworker is clearly shown to be
responsible for the loss or damage;
Persons Covered by the Provisions on Night
2. The homeworker is given reasonable
opportunity to show cause why deductions Work
should not be made;
GR: All persons who shall be employed or permitted
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual loss or suffered to work at night.
or damages; and
XPN: Those employed in agriculture, stock raising,
4. The deduction is made at such rate that the
amount deducted does not exceed 20% of the fishing, maritime transport and inland navigation,
during a period of not less than seven (7)
homeworker’s earnings in a week. (Sec. 8, D.O.
consecutive hours, including the interval from
No. 05-92)
midnight (12am) to five o’clock in the morning
(5am), to be determined by the SOLE after
2024 GOLDEN NOTES
consulting the workers’ representatives/ labor Separation from Employment of a Worker Found
organizations and Ers. (Art. 154, LC as added by RA Medically Unfit for Night Work
10151 approved on June 21, 2011) (Art. 154, LC as
added by R.A. No. 10151 approved on 21 June 2011) The provisions of D.O. No. 119-12 allow the
application of Art. 298 to a worker who is found
Right of the Workers to Health Assessment unfit for night work if his transfer to another
(daytime) job is not practicable. Art. 298 authorizes
GR: At their request, workers shall have the right to the separation of an Ee suffering from a disease. For
undergo health assessment without charge and to an Ee found unfit for night work, the Er’s ultimate
receive advice on how to reduce or avoid health recourse, therefore, may be employment
problems associated with their work: termination based on an authorized cause.
(Azucena, 2016)
1. Before taking up an assignment as a night
worker; Temporarily Unfit for Night Work
2. At regular intervals during such an assignment; A night worker certified as temporarily unfit for
and night work for a period of not less than six (6)
months shall be given the same protection against
3. If they experience health problems during such dismissal or notice of dismissal as other workers
an assignment which are not caused by factors who are prevented from working for health reasons.
other than the performance of night work. (Art. (Sec. 5, D.O. No. 119-12)
155, LC)
Employability of Women for Night Work
NOTE: Findings of such assessments shall not be
transmitted to others without the workers’ consent Measures shall be taken to ensure that an
and shall not be used to their detriment. alternative to night work is available to women
workers who would otherwise be called upon to
XPN: Finding of unfitness for night work. (Art. 155, perform such work:
LC)
1. Before and after childbirth, for a period of at
Worker Found to be Medically Unfit for Night least 16 weeks, which shall be divided between
Work the time before and after childbirth;
Night workers who are certified by competent 2. For additional periods, in respect of which a
physician as unfit for night work due to health medical certificate is produced stating that said
reasons shall be transferred, whenever practicable, additional periods are necessary for the health
to a similar job for which they are fit to work. of the mother or child:
If such transfer to a similar job is not practicable, or a. During pregnancy;

the workers are unable to render night work for a
continuous period of not less than 6 months upon b. During a specified time beyond the period,
the certification of a competent public health after childbirth is fixed pursuant to number
authority, these workers shall be granted the same 1, the length of which shall be determined
company benefits as other workers who are unable by the DOLE after consulting the labor
to work, or to secure employment during such organizations and Ers. (Art. 158, LC)
period. (Sec. 5, D.O. No. 119-12)
2024 GOLDEN NOTES
During the Periods Referred in Art. 158 transportation from the work premises to the
nearest point of their residence subject to
1. A woman worker shall not be dismissed or exceptions and guidelines to be provided by the
given notice of dismissal, except for just or DOLE. (Art. 156, LC)
authorized causes provided for in the Code that
are not connected with pregnancy, childbirth
6. APPRENTICES AND LEARNERS
and childcare responsibilities.
(Arts. 58-60 and 73-74, LC)
2. A woman worker shall not lose the benefits

Apprentice
regarding her status, seniority, and access to
promotion which may attach to her regular
night work position. (Ibid.) A person undergoing training for an approved
apprenticeable occupation during an established
period assured by an apprenticeship agreement.
Pregnant Women and Nursing Mothers May Be
Allowed to Work at Night (Sec. 4(k), R.A. No. 7796)
Apprenticeship
They are allowed only if a competent physician,
other than the company physician, shall certify their
Training within employment with compulsory
fitness to render night work, and specify, in the case
of pregnant Ees, the period of the pregnancy that related theoretical instructions involving a contract
they can safely work. (Ibid.) between an apprentice and an Er on an approved
apprenticeable occupation for a duration not
Protection of Night Workers exceeding six (6) months. (Sec. 4(j), R.A. No. 7796)
Apprenticeable Occupation
The law protects the night workers by requiring:
Any trade, form of employment or occupation which
1. The provision of certain facilities such as requires more than three (3) months of practical
training on the job supplemented by related
sleeping or lactation quarters and means of
transport; theoretical instruction. (Art. 58(c), LC)
Learner
2. Conduct of medical examination to determine
fitness for night work; and,
A person hired as a trainee in industrial occupations
which are non-apprenticeable and which may be
3. Observance of legal process to decide
appropriate action where a worker is found learned through practical training on the job not
exceeding three (3) months, whether or not such
unfit for night work. Such process includes
practical training is supplemented by theoretical
transfer of worker to day work, if practicable,
and, only as a last recourse separation from instructions. (Sec. 1, Rule VII, Book II, Omnibus Rules
Implementing the Labor Code)
employment.
Mandatory Facilities Learnership
1. Suitable first-aid facilities, including Any practical training on a learnable occupation

arrangements where such workers, where which may or may not be supplemented by related
theoretical instructions for a period not exceeding
necessary, can be taken immediately to a place
for appropriate treatment. three (3) months. (TESDA Circular, No. 120, Series of
2020)
2. Safe and healthful working conditions and
adequate or reasonable facilities, i.e., sleeping
or resting quarters in the establishment, and
2024 GOLDEN NOTES
Qualifications of an Apprentice years of age may only be employed in non-
hazardous occupations. (Ibid.)
1. Must be at least fifteen (15) years of age;
provided that those who are at least fifteen but Learners may be hired in semi-skilled and other
not more than eighteen (18) years of age may be industrial occupations which are
eligible for apprenticeship only in non- registered/recognized learnable occupations as
hazardous occupations approved by TESDA or in non-apprenticeable
occupations. (Ibid.)
2. Be physically fit for the occupation in which the
apprentice intends to be trained; Wages of Apprentices
3. Possess good moral character, vocational Wage shall not start below 75% of the applicable
aptitude, and capacity for apprenticeship as minimum wage, benefits entitled to an apprentice
determined by the enterprise; under existing laws and other benefits depending
on the enterprise’s capability, be it in cash or in kind
4. Have the ability to comprehend and follow oral that an apprentice may enjoy. (Ibid.)
and written instructions;
Wages of Learners
5. Not be a graduate of any apprenticeship
program of the registered company provider; Wage shall not start below 75% of the applicable
and minimum wage, benefits entitled a learner under
existing laws, including accident and disability
6. Have met the specific requirements of the insurance policy and other benefits depending on
Training Regulations. (Ibid.) the enterprise’s capability, be it in cash or in kind
that a learner may enjoy. (Ibid.)
Qualifications of Ers/Enterprises
Working Conditions of Apprentices and
1. Any entity, whether or not organized for profit, Learners
may establish or sponsor apprenticeship or
learnership programs and employ 1. Apprentices and learners who are below 18
apprentices/learners. years of age shall not be allowed to work for
more than 8 hours a day, and in no case beyond
2. Any enterprise with ten (10) or more regular 40 hours a week. They shall not be allowed to
workers and is duly registered with the work between 10 P.M. and 6 A.M. of the
appropriate government authorities. following day. They shall not also be engaged in
hazardous workplaces and conditions.
3. The number of apprentices to be accepted by
the participating enterprise shall not be more 2. Apprentices and learners who are 18 years of
than twenty percent (20%) of its total regular age and above can work overtime, provided
workforce. (Ibid.) there is no available regular worker on the job.
The time spent on overtime work shall be duly
NOTE: Only Ers in highly technical industries may credited to their training hours based on the
employ apprentices and only in apprenticeable approved Training Plan. An apprentice or
occupations approved by TESDA. (Ibid.) learner may render training beyond the normal
daily training hours provided the following
Qualifications of a Learner minimum requirements are present:
Any unemployed person who is fifteen (15) years a. The night training is rendered within the
old and above may apply for Learnership with any required period consistent with existing
participating enterprise. Those below eighteen (18) laws, rules, and regulations;
2024 GOLDEN NOTES
Disability
b. The apprentice/learner shall be paid a
night shift differential of not less than 10% 1. A physical or mental impairment that
of the minimum wage in the region for each substantially limits one or more psychological,
hour of work performed between 10 P.M. physiological or anatomical function of an
and 6 A.M. individual or activities of such individual;
c. The apprentice/learner shall be entitled to 2. A record of such an impairment; or

an Overtime Pay, if applicable;
3. Being regarded as having such an impairment.
d. The apprentice/learner should not be (Sec. 4(c), Ibid.)
below 18 years old; and
Handicap
e. The minimum requirements above are
agreed or may be improved by the It refers to a disadvantage for a given individual
company, the training provider, and the resulting from an impairment or a disability, that
labor union. limits or prevents the functions or activity, that is
considered normal given the age and sex of the
NOTE: There can be an apprenticeship program individual. (Sec. 4(d), Ibid.)
prior to probationary employment, provided that
the job involved is highly-technical. (Art. 281, LC) Qualified Disabled Employee
It provides for Equal Opportunity for Employment

7. PERSONS WITH DISABILITIES
by stating that no disabled person shall be denied
(R.A. No. 7277, as amended by R.A. No. 9442, R.A.
access to opportunities for suitable employment.
No. 10070, and R.A. No. 10524)
A qualified disabled Ee shall be subject to the same

R.A. No. 7277 or the Magna Carta for Disabled
terms and conditions of employment and the same
Persons ensures equal opportunities for disabled compensation, privileges, benefits, fringe benefits,
persons and prohibits discrimination against them.
incentives or allowances as a qualified able-bodied
person. (Sec. 5, R.A. No. 7277)
Persons with Disability (PWDs)
A qualified individual with disability is an individual
Those whose earning capacity is impaired by:
with disability who, with or without reasonable
1. Physical deficiency; accommodation, can perform the essential
2. Age;
functions of the employment position that such
3. Injury;
individual holds or desires. (Sec. 4(l), R.A. No. 7277)
4. Disease;
5. Mental deficiency; or
NOTE: Consideration shall be given to the Er’s
6. Illness. judgment as to what functions of job are essential,
and if an Er has prepared a written description
Impairment
before advertising or interviewing applicants for the
job. (Sec. 4(l), R.A. No. 7277)
It refers to any loss, diminution or aberration of
psychological, physiological, or anatomical
structure of function. (Sec. 4(b), R.A. 7277)
2024 GOLDEN NOTES
Employment of PWDs shall be reserved for PWDs (Sec. 5, R.A. No.
7277);
1. When their employment is necessary to prevent
curtailment of employment opportunities; and XPN: BFOQ
2. When it will not create unfair competition in 2. Sheltered employment - The Government shall
labor costs or lower working standards. (Art. endeavor to provide them work if suitable
79, LC) employment for disabled persons cannot be
found through open employment; (Sec. 6, R.A.
Employment Period of PWD No. 7277)
There is no minimum or maximum duration. It 3. Apprenticeship - PWD may be hired as

depends on the agreement, but it is necessary that apprentices or learners if their disability is not
there is a specific duration stated. such as to effectively impede the performance of
job operations in the particular occupations for
PWDs Can Be a Regular Employees which they are hired (Art. 81, LC);
PWDs can be a regular Ee if work is usually 4. Vocational rehabilitation - To develop the

necessary or desirable in the usual business of the skills and potentials of disabled workers and
Er. (Bernardo v. NLRC, G.R No. 122917, 12 July 1999) enable them to compete in the labor market;
(Sec. 9, R.A. No. 7277);
Persons Who May Employ PWDs
5. Vocational guidance and counselling – The
Ers in all industries, provided, the disability is not DSWD shall implement measures providing and
such as to effectively impede the performance of job evaluating vocational guidance and counselling
operations in the particular occupation for which to enable disabled persons to secure, retain and
they are hired. (Sec. 7, R.A. No. 7277) advance in employment. (Sec. 10, R.A. No. 7277);
Not All Workers with a Disability are Considered Wage Rate (2013 BAR)
Disabled Workers
GR: Handicapped workers are entitled to not less
The mere fact that a worker has a disability does not than 75% of the applicable adjusted minimum wage.
make him a disabled worker because his disability (Art. 80, LC)
may not impair his efficiency or the quality of his
work. If despite his disability he can still efficiently XPN: All qualified handicapped workers shall
perform his work, he would be considered a receive the full amount of the minimum wage rate
qualified disabled worker entitled to the same prescribed herein pursuant to R.A. No. 7277. (Wage
treatment as qualified able-bodied workers. Order No. NCR-18)
(Bernardo v. NLRC, G.R No. 122917, 12 July 1999)
NOTE: Generally, if a PWD is hired as an apprentice
Rights and Privileges of PWDs or learner, he shall be paid not less than 75% of the
applicable minimum wage.
1. Equal opportunity for employment - No PWD
shall be denied access to opportunities for XPN: If the PWD, however is hired as a learner and
suitable employment. Five percent (5%) of all employed in piece or incentive-rate jobs during the
casual emergency and contractual positions in training period, he shall be paid 100% of the
the DSWD, Health, Education, Culture and applicable minimum wage. (Chan, 2017)
Sports, and other government agencies, offices
or corporations engaged in social development
2024 GOLDEN NOTES
Incentives for Employers Who Are Employing Persons with Disability vs. Differently Abled
Disabled Workers
PWDs DIFFERENTLY ABLED
1. Entitled to an additional deduction, from their Covers all activities or
gross income, equivalent to 25% of the total Covers only workers.
endeavors.
amount paid as salaries and wages to disabled
persons; Refers to all suffering
from restriction of
NOTE: Such entities must present proof different abilities as a
certified by DOLE that disabled persons are Earning capacity is result of mental,
under their employment, and the disabled Ee is impaired by age or physical, sensory
accredited with the DOLE and the DOH as to his physical, mental impairment to perform
disability, skills, and qualifications. deficiency, or injury an activity in the
manner or within
2. Private entities that improve or modify their range considered for
physical facilities in order to provide reasonable human being.
accommodation for disabled persons shall also
be entitled to an additional deduction from Basis: Loss/ Basis: Range of activity
their net taxable income, equivalent to 50% of impairment of earning which is normal for a
the direct costs of the improvements or capacity. human being.
modifications. (Sec. 8, R.A. No. 7277)
Restriction due to
Loss due to injury or
The financial incentive, if any, granted by law to impairment of mental,
physical or mental
SPQ Garments whose cutters and sewers in its physical, and/or
defect or age.
garments-for-export operations are 80% sensory defect.
staffed by deaf and deaf-mute workers is If hired, entitled to
additional deduction from its gross income 75% of minimum
equivalent to 25% of amount paid as salaries to If qualified, entitled to
wage.
persons with disability (2013 BAR). all terms and
conditions as qualified
Subject to definite
Basis: Magna Carta for Disabled Persons able-bodied person.
periods of
employment.
No restrictions on
Employable only when
employment.
necessary to prevent
curtailment of
Must get equal
employment
opportunity and no
opportunity.
unfair competition.
Q: Ana Cruz has a low IQ. She has to be told at

least three times before she understands her
daily work assignment. However, her work
output is at least equal to the output of the least
efficient worker in her work section. Is Mr. Cruz
a handicapped worker? Explain. (2000 BAR)
A: NO. Low IQ does not make the worker

“handicapped” in the contemplation of law.
2024 GOLDEN NOTES
Handicap means such physical or mental infirmity Kinds
that impairs capacity to work. The deficiency may
also be due to age or injury. (Article 78, LC) 1. Quid Pro Quo (“This for that”) – doer asks for
something in exchange for something; and
Q: A bank hired several handicapped workers to
count and sort out currencies. The handicapped 2. Hostile Environment
workers knew that the contract was only for a
period of six-months and the same period was Sexual Harassment in a Work-Related or
provided for in their employment contracts. Employment Environment
After six months, the bank terminated their
employment on the grounds that their contract Elements:
has expired. This prompted the workers to file
with the Labor Arbiter a complaint for illegal 1. The sexual favor is made as a condition in the
dismissal. Will their action prosper? Why or why hiring or in the employment, re-employment or
not? (2012 BAR) continued employment of said individual, or in
granting said individual favorable
A: YES. According to Magna Carta for Persons with compensation, terms, conditions, promotions,
Disability, it guarantees to disabled workers the or privileges; or the refusal to grant the sexual
right of able-bodied workers, one of which is the favor results in limiting, segregating or
right to regularization by reason of the nature of classifying the Ee which in a way would
work concerned. (Sec. 5, R.A. No. 7277) discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said
Ee (Quid Pro Quo Sexual Harassment);
E. SEXUAL HARASSMENT IN THE WORK
ENVIRONMENT (R.A. No. 7877); SAFE SPACES 2. The above acts would impair the Ees’ rights or
ACT (R.A. No. 11313, Art IV) privileges under existing labor laws; or
3. The above acts would result in an intimidating,

Requisites (Demand-IAM-WET) hostile, or offensive environment for the Ee.
(Hostile Environment Harassment).
1. Act is committed in a Work, Education, or
Training-related environment; Sexual Harassment in an Education or Training-
Related Environment
2. The doer, the harasser, is any person who has
Authority, Influence or Moral ascendancy over Elements:
another; and
1. Sexual harassment is employed:
3. Doer Demands or requests, or requires a
sexual favor from the victim. a. Against one who is under the care,
custody or supervision of the offender;
It does not matter whether such demand is or
accepted or not. (Sec. 3, R.A. No. 7877)
b. Against one whose education, training,
NOTE: Based on the Congressional deliberations, apprenticeship or tutorship is
Anti-Sexual Harassment Law aims to punish the entrusted to the offender;
harasser without regard to gender. (Azucena, 2016)
2. When sexual favor is made a condition to the
giving of a passing grade, or the granting of
honors and scholarships, or the payment of a
2024 GOLDEN NOTES
stipend, allowance or other benefits, privileges, Duty of the Er or Head of Office Towards the End
or considerations; or
1. Promulgate appropriate rules and regulations
3. When sexual advances result in an intimidating, in consultation with and jointly approved by the
hostile or offensive environment for the Ee or students or trainees, through their duly
student, trainee or apprentice. designated representatives, prescribing the
procedure for the investigation or Sexual
NOTE: While the provision states that there must be Harassment cases and the administrative
a “demand, request or requirement of a sexual sanctions therefore.
favor”, it is not necessary that it be articulated in a
categorical manner. It may be discerned, with equal NOTE: Administrative sanctions taken against
certitude, from the acts of the offender. the alleged harasser shall not be a bar to
prosecution in the proper courts for unlawful
Likewise, it is not essential that the demand, request acts of Sexual Harassment.
or requirement be made as a condition for
continued employment or for promotion to a higher The said rules and regulations issued shall
position. It is enough that the respondent’s acts include, among others, guidelines on proper
result in creating an intimidating, hostile or decorum in the workplace and educational or
offensive environment for the Ee. (Domingo v. training institutions;
Rayala, G.R. No. 155831, 18 Feb. 2008)
2. Create a committee on decorum and
Beso-Beso Fashion investigation of cases on Sexual Harassment;
and
In the case of Aquino v. Acosta (A.M. No. CTA-01-1, 02
Apr. 2002), the Supreme Court absolved Judge 3. The Er or head of office, education or training
Acosta of liability under the Sexual Harassment law institution shall disseminate, or post a copy of
in greeting complainant with a kiss on the cheek in this Act for the information of all concerned.
a ‘beso-beso’ fashion, where most of the kissing (Sec. 4, R.A. No. 7877)
incidents were done on festive and special
occasions. The Court held that what respondent Extent of Liability of the Employer or Head of
judge committed were casual gestures of friendship Office
and camaraderie, nothing more, nothing less, and
that there is no indication that respondent was Er shall may be solidarily liable for damages arising
motivated by malice or lewd design. However, the from the acts of Sexual Harassment committed in
Court admonished Judge Acosta not to commit the employment, education, or training
similar acts against complainant or other female Ees environment, provided that:
of the CTA, otherwise, his conduct may be construed
as tainted with impropriety. 1. The Er or head of office, educational or training
institution is informed of such acts by the
Duties of the Er or Head of Office in a Work- offended party; and
Related, Education or Training Environment
2. No immediate action is taken thereon. (Sec. 5,
1. Prevent or deter the commission of acts of R.A. No. 7877)
Sexual Harassment; and
2. Provide the procedures for the resolution,

settlement or prosecution of acts of Sexual
Harassment. (Sec. 4, R.A. No. 7877)
2024 GOLDEN NOTES
Independent Action for Damages When May be To be sure, employers are given wider latitude of
Filed discretion in terminating the employment of
managerial employees on the ground of lack of trust
Nothing under this Act shall preclude the victim of and confidence. (Villarama v. NLRC G.R. No. 106341,
work, education or training-related sexual 02 Sept. 1994)
harassment from instituting a separate and
independent action for damages and other Indifference or Insensibility to Complaints of
affirmative relief. (Sec. 6, R.A. No. 7877) Sexual Harassment Victims is a Ground for
Constructive Dismissal
Three-Fold Liability Rule in Sexual Harassment
Cases The Supreme Court emphasizes that statements
suggesting that a case is weak because there are no
An act of sexual harassment may give rise to civil, witnesses or bruises are highly insensitive to
criminal, and administrative liability on the part of victims of sexual harassment. In stating that a
the offender, each proceeding independently of the sexual harassment case is hard to prove without
others. witnesses or physical manifestations of force,
employers discourage their employees from coming
Prescription of Action forward with sexual harassment incidents. They
foster an environment in which employees feel that
Any action arising from the violation of the their word cannot be taken against the word of the
provisions of this act shall prescribe in three (3) perpetrator. In making these statements, the
years. (Sec. 7, R.A. No. 7877) employer lends more credence to the perpetrator,
even without the latter having been questioned or
Managerial Employee Who Commits Sexual having submitted a written explanation. It allows
Harassment Can Be Dismissed For Lack of Trust the employee to feel that the sexual harassment
and Confidence complaint's resolution had already been pre-
determined against him or her.
The managerial employee did not give due regard to
his subordinate’s feeling and acted in chauvinistic Indifference to complaints of sexual harassment
disdain of her honor. He failed to act accordingly as victims may no longer be tolerated. Recent social
a good father of the family. He actively facilitated the movements have raised awareness on the continued
commission of immoral conduct. prevalence of sexual harassment, especially in the
workplace, and has revealed that one of the causes
Sexual harassment abounds in all sick societies. It is of its pervasiveness is the lack of concern, empathy,
reprehensible enough but more so when inflicted by and responsiveness to the situation. Many times,
those with moral ascendancy over their victims. We victims are blamed, hushed, and compelled to
rule that it is a valid cause for separation from accept that it is just the way things are, and that they
service. should either just leave or move on.
A managerial employee is bound by a more exacting In recognizing the need to address these concerns,
work ethics. He failed to live up to this higher the State's policy against sexual harassment has
standard of responsibility when he succumbed to been strengthened through Republic Act No. 11313,
his moral perversity. And when such moral otherwise known as the Safe Spaces Act. This law
perversity is perpetrated against his subordinate, he has expanded the definition of gender-based sexual
provides a justifiable ground for his dismissal for harassment in the workplace and has added to the
lack of trust and confidence. It is the right, nay, the duties of an employer as to its prevention,
duty of every employer to protect its employees deterrence, and punishment. It explicitly requires
from oversexed superiors. that complaints be investigated and resolved within
10 days or less upon its reporting. It likewise
expressly provides for the liability of employers and
2024 GOLDEN NOTES
duties of co-workers as to sexual harassment. The remarks did not give due regard to the applicant’s
law likewise specifies the confidentiality of feelings, and it is a chauvinistic disdain of her honor,
proceedings, and the issuance of a restraining order justifying the finding of Sexual Harassment.
for the offended person. Moreover, it allows local (Villarama v. NLRC, G.R. No. 106341, 02 Sept. 1994)
government units to impose heavier penalties on
perpetrators. Q: Pedrito Masculado, a college graduate from
the province, tried his luck in the city and landed
Insensibility to a sexual harassment case is a ground a job as a utility/maintenance man at the
for constructive dismissal. In this instance, it cannot warehouse of a big shopping mall. After working
be denied that the employee was compelled to leave as a casual Ee for 6 months, he signed a contract
her employment because of the hostile and for probationary employment for 6 months.
offensive work environment created and reinforced Being well-built and physically attractive, his
by the offender and the employer. She was thus supervisor, Mr. Hercules Barak, took special
clearly constructively dismissed. (LBC Express-Vis, interest to befriend him.
Inc. v. Palco, G.R. No. 217101, 12 Feb. 2020)
When his probationary period was about to
Q: A Personnel Manager, while interviewing an expire, he was surprised when one afternoon
attractive female applicant for employment, after working hours, Mr. Barak followed him to
stared directly at her for prolonged periods, the men’s comfort room. After seeing that no one
albeit in a friendly manner. After the interview, else was around, Mr. Barak placed his arm over
the manager accompanied the applicant to the Pedrito’s shoulder and softly said: “You have
door, shook her hand and patted her on the great potential to become a regular Ee and I
shoulder. He also asked the applicant if he could think I can give you a favorable
invite her for dinner and dancing at some future recommendation. Can you come over to my
time. Did the Personnel Manager, by the above condo unit on Saturday evening so we can have a
acts, commit sexual harassment? Reason. (2000 little drink? I’m alone, and I’m sure you want to
BAR) stay longer with the company.”
A: YES. The Personnel Manager is in a position to Is Mr. Barak liable for sexual harassment
grant or not to grant a favor (a job) to the applicant. committed in a work-related or employment
Under the circumstances, inviting the applicant for environment? (2000 BAR)
dinner or dancing creates a situation hostile or
unfriendly to the applicant's chances for a job if she A: YES. The elements sexual harassment are all
turns down the invitation. (Sec. 3(a)(3), R.A. No. present. The act of Mr. Barak was committed in a
7877) workplace. Mr. Barak, as supervisor of Pedrito
Masculado, has authority, influence and moral
Q: In the course of an interview, another female ascendancy over Masculado.
applicant inquired from the same Personnel
Manager if she had the physical attributes Given the specific circumstances mentioned in the
required for the position she applied for. question, like Mr. Barak following Masculado to the
comfort room, etc. Mr. Barak was requesting a
The Personnel Manager replied: "You will be sexual favor from Masculado for a favorable
more attractive if you will wear micro-mini recommendation regarding the latter's
dresses without the undergarments that ladies employment. It is not impossible for a male, who is
normally wear." Did the Personnel Manager, by a homosexual, to ask for a sexual favor from another
the above reply, commit an act of sexual male.
harassment?
Q: Nena worked as an Executive Assistant for
A: YES. The remarks would result in an offensive or Nesting, CEO of Nordic Corporation. One day,
hostile environment for the Ee. Moreover, the Nesting called Nena into his office and showed
2024 GOLDEN NOTES
her lewd pictures of women in seductive poses juridical, and whether private or public, who
which Nena found offensive. Nena complained exercises fundamental control over the work,
before the General Manager who, in turn, regardless of the term or duration of
investigated the matter and recommended the agreement; (Sec. 3(b), R.A. No. 11313)
dismissal of Nesting to the Board of Directors.
Before the Board of Directors, Nesting argued, NOTE: For the purpose of this law, a person who
that since the Anti-Sexual Harassment Law is detailed to an entity under a subcontracting
requires the existence of "sexual favors," he or second agreement shall be considered an Ee.
should not be dismissed from the service since
he did not ask for any sexual favor from Nena. Is 3. Er - Refers to a person who exercises control
Nesting correct? (2018 BAR) over an Ee; (Sec. 3(c), R.A. No. 11313)
A: NO. Nesting’s argument on lack of sexual favor is NOTE: For the purpose of this law, the status or
incorrect. While his actions require further proof of conditions of the Ee’s employment or
being a “sexual favor” in terms of criminal liability engagement shall be disregarded.
under R.A. 7877, his employment may still be
terminated under Art. 297 of the Labor Code. 4. Gender - A set of socially ascribed
characteristics, norms, roles, attitudes, values,
In Villarama v. NLRC and Golden Donuts (G.R. No. and expectations identifying the social behavior
106341, 02 Sept. 1994), the Supreme Court held that of men and women, and the relations between
a managerial employee is bound by more exacting them; (Sec. 3(d), R.A. No. 11313)
work ethics, with a high standard of responsibility.
Sexual harassment of a subordinate amounts to 5. Gender-based online sexual harassment - An
“moral perversity” which provides a justifiable online conduct targeted at a particular person
ground for dismissal due to lack of trust and that causes or likely to cause another mental,
confidence. emotional or psychological distress, and fear of
personal safety, sexual harassment acts
Under the Safe Spaces Act, the crime of gender- including unwanted sexual remarks and
based sexual harassment in the workplace includes comments, threats, uploading, or sharing of
“a conduct of sexual nature and other conduct- one’s photos without consent, video and audio
based on sex affecting the dignity of a person, which recordings, cyberstalking and online identity
is unwelcome, unreasonable, and offensive to the theft; (Sec. 3(e), R.A. No. 11313)
recipient, whether done verbally, physically or
through the use of technology such as text 6. Gender identity and/or expression - The
messaging or electronic mail or through any other personal sense of identity as characterized,
forms of information and communication systems.” among others, by manner of clothing,
inclinations, and behavior in relation to
Safe Spaces Act masculine or feminine conventions. A person
may have a male or female identity with
This Act provides for the following definitions: physiological characteristics of the opposite sex
in which case this person is considered
1. Catcalling – The unwanted remarks directed transgender; (Sec. 3(f), R.A. No. 11313)
towards a person, commonly done in the form
of wolf-whistling and misogynistic, 7. Stalking - A conduct directed at a person
transphobic, homophobic, and sexist slurs; (Sec. involving the repeated visual or physical
3(a), R.A. No. 11313) proximity, non-consensual communication, or a
combination thereof that cause or will likely
2. Ee - Refers to a person, who in exchange for cause a person to fear for one’s own safety or
remuneration, agrees to perform specified the safety of others, or to suffer emotional
services for another person, whether natural or distress. (Sec. 3(h), R.A. No. 11313)
2024 GOLDEN NOTES
identity and/or expression do not conform with
8. Cyberstalking - A form of stalking that is their sex assigned at birth. (Sec. 4(o), IRR of R.A.
committed through an electronic medium in No. 11313)
which online communication takes place. (Sec.
4(c), IRR of R.A. No. 11313) NOTE: The Safe Spaces Act does not undo or
abandon the definition of sexual harassment under
9. Homophobic remarks or slurs - Any the Anti-Sexual Harassment Law of 1995. The
statements in whatever form or however gravamen of the offenses punished under the Safe
delivered, which are indicative of fear, hatred, or Spaces Act is the act of sexually harassing a person
aversion towards persons who are perceived to on the basis of his/her sexual orientation, gender
be or actually identify as lesbian, gay, bisexual, identity and/or expression, while that of the offense
queer, pansexual and such other persons of punished under the Anti-Sexual Harassment Act of
diverse sexual orientation, gender identity or 1995 is abuse of one's authority, influence or moral
expression, or towards any person perceived to ascendancy so as to enable the sexual harassment of
or actually have experienced same-sex a subordinate. (Escandor v. People of the Philippines,
attraction; (Sec. 4(i), IRR of R.A. No. 11313) G.R. No. G.R. No. 211962, 06, Jul. 2020)
10. Misogynistic remarks or slurs - Any Gender-Based Sexual Harassment (GBSH) in the
statements in whatever form or however Workplace
delivered, that are indicative of the feeling of
hating women or the belief that men are The crime of GBSH in the workplace includes the
inherently better than women; (Sec. 4(l), IRR of following:
R.A. No. 11313)
1. An act or series of acts involving any unwelcome
11. Public spaces - Streets and alleys, roads, sexual advances, requests or demand for sexual
sidewalks, public parks, buildings, schools, favors or any act of sexual nature, whether done
churches, public washrooms, malls, internet verbally, physically or through the use of
shops, restaurants and cafes, transportation technology such as text messaging or electronic
terminals, public markets, spaces used as mail or through any other forms of information
evacuation centers, government offices, and communication systems, that has or could
common carriers, public utility vehicles (PUVs) have a detrimental effect on the conditions of an
as well as private vehicles covered by app-based individual’s employment or education, job
transport network services, other recreational performance or opportunities;
spaces such as, but not limited to, cinema halls,
theaters and spas, bars and clubs, resorts and 2. A conduct of sexual nature and other conduct-
water parks, hotels and casinos, and all other based on sex affecting the dignity of a person,
areas, regardless of ownership, openly which is unwelcome, unreasonable, and
accessible or offered to be accessed by the offensive to the recipient, whether done
public. (Sec. 4(m), IRR of R.A. No. 11313) verbally, physically or through the use of
technology such as text messaging or electronic
12. Sexist remarks or slurs - Statements in mail or through any other forms of information
whatever form or however delivered, that are and communication systems;
indicative of prejudice, stereotyping, or
discrimination on the basis of sex, typically 3. A conduct that is unwelcome and pervasive and
against women. (Sec. 4(n), IRR of R.A. No. 11313) creates an intimidating, hostile or humiliating
environment for the recipient. (Sec. 16, R.A. No.
13. Transphobic remarks or slurs - Any 11313)
statements in whatever form or however
delivered, that are indicative of fear, hatred or NOTE: GBSH may also be committed between
aversion towards persons whose gender peers and those committed to a superior
2024 GOLDEN NOTES
officer by a subordinate, or to a teacher by a g. Guarantee confidentiality to the greatest
student, or to a trainer by a trainee. (Ibid.) extent possible;
Workplaces include all sites, locations, spaces, 4. Provide and disseminate, in consultation with
where work is being undertaken by an Ee all persons in the workplace, a code of conduct
within or outside the premises of the usual or workplace policy which shall:
place of business of the Er. (Sec. 18, IRR of R.A.
No. 11313) a. Expressly reiterate the prohibition on GBSH;
Duties of Employers b. Describe the procedures of the internal

mechanism created under Sec. 17(c) of this
Ers or other persons of authority, influence or moral Act; and
ascendancy in a workplace shall have the duty to
prevent, deter, or punish the performance of acts of c. Set administrative penalties. (Sec. 17, R.A. No.
gender-based sexual harassment in the workplace. 11313)
Towards this end, the Er or person of authority,
influence or moral ascendancy shall: NOTE: In case of non-compliance in the
public sector by the Er of their duties herein
1. Disseminate or post in a conspicuous place a provided, an Ee may file an administrative
copy of this Act to all persons in the workplace; complaint with the CSC.
2. Provide measures to prevent gender-based In case the Er is a presidential appointee,

sexual harassment in the workplace, such as the elective official or official of the AFP, an
conduct of anti-sexual harassment seminars; administrative complaint may be filed with
appropriate offices with such jurisdictions,
3. Create an independent internal mechanism or a such as the Office of the President or Office
Committee on Decorum and Investigation of the Ombudsman. (Sec. 19, IRR, of R.A. No.
(CODI) to investigate and address complaints of 11313)
gender-based sexual harassment which shall:
Duties of Ees and Co-Workers
a. Adequately represent the management, the
Ees from the supervisory rank, the rank-and- Ees and co-workers shall have the duty to:
file Ees, and the union, if any;
1. Refrain from committing acts of GBSH;
b. Designate a woman as its head and not less
than half of its members should be women; 2. Discourage the conduct of GBSH in the
workplace;
c. Be composed of members who should be
impartial and not connected or related to the 3. Provide emotional or social support to fellow
alleged perpetrator; Ees, co-workers, colleagues or peers who are
victims of gender-based sexual harassment;
d. Investigate and decide on the complaints and
within 10 days or less upon receipt thereof;
4. Report acts of GBSH witnessed in the
e. Observe due process; workplace. (Sec. 18, R.A. No. 11313)
f. Protect the complainant from retaliation;

and
2024 GOLDEN NOTES
Liability of Employers 1. AGE
(R.A. No. 10911)
In addition to liabilities for committing acts of
GBSH, Ers may also be held responsible for:
Prohibited Forms of Discrimination For An
Employer
1. Non-implementation of their duties under
Sec. 17 of the law, as provided in the penal
1. Print or publish, or cause to be printed or
provisions; or
published, in any form of media, including the
internet, any notice of advertisement relating to
2. Not taking action on reported acts of GBSH
employment suggesting preferences,
committed in the workplace. (Sec. 19, IRR of
limitations, specifications, and discrimination
R.A. No. 11313)
based on age;
Independent Action for Damages

2. Require the declaration of age or birth date
during the application process;
Nothing shall preclude the victim of work-related
GBSH from instituting a separate and
3. Decline any employment application because of
independent action for damages and other
the individual’s age;
affirmative relief. (Sec. 23, IRR of R.A. No. 11313)
4. Discriminate against an individual in terms of
compensation, terms and conditions or
F. DISCRIMINATORY PRACTICES privileges of employment on account of such
individual’s age;
The State shall afford protection to labor, promote 5. Deny any Ee’s or worker’s promotion or
full employment, insure equal work opportunities opportunity for training because of age;
regardless of sex, race or creed and regulate the 6. Forcibly lay off an Ee or worker because of old
relations between workers and Ers. The State shall age; or
assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just 7. Impose early retirement on the basis of such
and humane conditions of work. (Art. 3, LC) Ee’s or worker’s age; (Sec. 5, R.A. No. 10911)
Discrimination NOTE: An Er may set age limitations in

employment if:
It is the unequal treatment of employees, which is
proscribed as an unfair labor practice by Art. 248(e) a. Age is a BFOQ reasonably necessary in the
(now Art. 259) of the LC. It is the failure to treat all normal operation of a particular business
persons equally when no reasonable distinction can or where the differentiation is based on
be found between those favored and those not reasonable factors other than age;
favored. (International School Alliance of Educators
v. Quisumbing, G.R. No. 128845, 01 June 2000) b. The intent is to observe the terms of a bona
fide seniority system that is not intended to
In the workplace, where the relations between evade the purpose of this Act;
capital and labor are often skewed in favor of capital,
inequality and discrimination by the employer are c. The intent is to observe the terms of a bona
all the more reprehensible. (Ibid.) fide Ee retirement or a voluntary early
retirement plan consistent with the
purpose of this Act: Provided, that such
retirement or voluntary retirement plan is
2024 GOLDEN NOTES
in accordance with the LC, as amended, and
other related laws; or It includes any act or omission, including by law,
policy, administrative measure, or practice, that
d. The action is duly certified by the SOLE in directly or indirectly excludes or restricts women in
accordance with the purpose of R.A. No the recognition and promotion of their rights and
10911; (Sec. 6, R.A. No. 10911.) their access to and enjoyment of opportunities,
benefits, or privileges. (Sec. 4(b), R.A. No. 9710)
Prohibited Forms of Discrimination For A Labor
Contractor Or Subcontractor Acts of Discrimination Under the Labor Code
If any, to refuse to refer for employment or It shall be unlawful for any Er to discriminate
otherwise discriminate against any individual against any woman Ee with respect to terms and
because of such person’s age. (Sec. 5(b), R.A. No. conditions of employment solely on account of her
10911) sex. (Art. 133, LC)
Prohibited Forms of Discrimination For A Labor The following are acts of discrimination under the
Organization LC:
1. To deny membership to any individual because 1. Payment of a lesser compensation, including

of such individual’s age; wage, salary or other form of remuneration and
fringe benefits, to a female Ee as against a male
2. To exclude from its membership any individual Ee, for work of equal value; and
because of such individual’s age; or
2. Favoring a male Ee over a female Ee with
3. To cause or attempt to cause an Er to respect to promotion, training opportunities,
discriminate against an individual in violation study, and scholarship grants solely on account
of this Act; (Sec. 5(c), R.A. No. 10911) of their sexes. (Art. 133, LC)
Prohibited Forms of Discrimination For A 3. Stipulating as a condition of employment or

Publisher continuation of employment that a woman Ee
shall not get married, or stipulating expressly or
To print or publish any notice of advertisement tacitly that upon getting married, a woman Ee
relating to employment suggesting preferences, shall be deemed resigned or separated, or to
limitations, specifications, and discrimination based actually dismiss, discharge, discriminate, or
on age. (Sec. 5(d), R.A. No. 10911) otherwise prejudice a woman Ee merely by
reason of her marriage; (Art. 134, LC)
2. GENDER AND MARITAL STATUS
4. Denying any woman Ee the benefits provided in
(R.A. No. 9710)
the Code or to discharge any woman employed
by him for the purpose of preventing her from
Discrimination Against Women enjoying any of the said benefits;
It refers to any gender-based distinction, exclusion, 5. Discharging such woman on account of her
or restriction which has the effect or purpose of pregnancy, or while on leave of in confinement
impairing or nullifying the recognition, enjoyment,
due to her pregnancy; and
or exercise by women, irrespective of their marital
status, on a basis of equality of men and women, of
6. Discharging or refusing the admission of such
human rights and fundamental freedoms in the
woman upon returning to her work for fear that
political, economic, social, cultural, civil, or any she may again be pregnant; and (Art. 135, LC)
other field.
2024 GOLDEN NOTES
NOTE: As long as a woman Ee’s ailment is
related to her pregnancy, her sickness cannot be 3. Expulsion or non-readmission of women faculty
a ground for termination because to do so will due to pregnancy ouside of marriage; (Sec.
be a violation of Art. 135 of the LC which 13(c), R.A. No. 9710)
prohibits an Er to discharge an Ee on account of
pregnancy. (Del Monte Philippines, Inc. v. Velasco, 4. Failure to provide a woman Ee a special leave
G.R. No. 153477, 06 Mar. 2007) benefit of two (2) months with full pay based on
her gross monthly compensation following
Classification of Certain Women Workers surgery caused by gynecological disorders,
provided that said woman Ee has rendered
Any woman who is permitted or suffered to work, continuous aggregate employment service of at
with or without compensation, in any night club, least six (6) months for the last twelve (12)
cocktail lounge, massage clinic, bar or similar months; and (Sec. 18, R.A. No. 9710)
establishment, under the effective control or
supervision of the employer for a substantial period 5. Failure of the State to ensure women migrant
of time as determined by the Secretary of Labor and worker’s opportunity to undergo skills training
Employment, shall be considered as an employee of before taking a foreign job, gender-sensitive
such establishment for purposes of labor and social training and seminars, and equal opportunities
legislation. (Art. 136, LC) based on merit and fitness.
Measure or Practice of General Application as a The Right to Choose Marriage

Form of Discrimination
Any measure or practice of general application is The doctrine of management prerogative gives an
considered as discrimination against women if: employer the right to “regulate, according to his own
discretion and judgment, all aspects of employment,
1. It fails to provide for mechanisms to offset or including hiring, work assignments, working
address sex or gender-based disadvantages or methods, the time, place and manner of work, work
limitations of women; supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of
2. As a result, women are denied or restricted in employees.”
the recognition and protection of their rights
and in their access and enjoyment of However, in Capin-Cadiz v. Brent Hospital and
opportunities, benefits, or privileges; or Colleges, Inc. (G.R. No. 187417, 24 Feb. 2016), the
Court held that it is unlawful for Ers to require as a
3. Women, more than men, are shown to have condition for employment or continuation of
suffered the greater adverse effects of those employment that a woman employee shall not get
measures or practices. (Art. 136, LC) married as well as dismissal of a woman employee
by reason of her marriage.
Discriminatory Practices Under R.A. No. 9710
It is unlawful for employers to require as a condition
The following are forms of discrimination against for employment or continuation of employment that
women in relation to employment: a woman employee shall not get married. (Art. 134,
LC) Illegal the dismissal of a woman employee
1. Failure of the State to increase the recruitment because of a condition in her contract that she
and training of women in government services remains single during her employment. (Philippine
that cater to women victims of gender-related Telegraph and Telephone Company v. NLRC, G.R. No.
offenses; 118978, 23 May 1997)
2. Discrimination in the employment in the field of

military, police, and other similar services;
2024 GOLDEN NOTES
The Right to Bear and Rear a Child Outside of discrimination ratified by the Philippines. They
Marriage shall not be discriminated against, from pre- to post-
employment, including hiring, promotion, or assign.
The Labor Code prohibits the discriminatory act of (DOLE D.A. No. 05-10)
discharging a woman on account of her pregnancy.
In the constitutional right to personal liberty and NOTE: Prohibition includes based on suspicion,
privacy, the employee and other women similarly being compelled to disclose their Hepatitis B status
situated are free to be single mothers by choice. This and other related medical information and declared
cannot be curtailed in the workplace through unfit to work without appropriate medical
discriminatory policies against pregnancy out of evaluation and counseling.
wedlock.
Tuberculosis Prevention in the Workplace
Special Leave Benefit for Women
The TB policy shall be made an integral part of the
A woman employee having rendered continuous enterprise’s occupational safety and health
aggregate employment service of at least six (6) program. The workplace health and safety
months for the last twelve (12) months shall be committee shall be responsible for overseeing the
entitled to a special leave benefit of two (2) months implementation of the TB policy (Sec. B-2, DOLE
with full pay based on her gross monthly Order 73-05).
compensation following surgery caused by
gynecological disorders. (Sec. 18, R.A. No. 9710)
5. SOLO PARENTS
NOTE: Gynecological Disorder refer to disorders
(Sec. 7, R.A. No. 8972, as amended by R.A. No.
that would require surgical procedures such as, but
11861)
not limited to, dilatation and curettage and those
involving female reproductive organs such as the
vagina, cervix, uterus, fallopian tubes, ovaries, Work Discrimination Prohibited
breast, adnexa and pelvic floor, as certified by a
No Er shall discriminate against any solo parent Ee
competent physician. It shall also include
hysterectomy, ovariectomy, and mastectomy. (Sec. with respect to terms and conditions of employment
on account of his/her status. (Sec. 7, R.A. No. 8972)
1(b), DOLE D.O. No. 112-11)
Solo Parent
3. PREGNANCY
(Sec. 23(c), R.A. No. 10354) Any individual who falls under any of the following
categories:
Discrimination Prohibited
1. A woman who gives birth as a result of rape and
Pregnancy or the number of children shall not be a other crimes against chastity even without a
ground for non-hiring or termination from final conviction of the offender. Provided, that
employment. (Sec. 23(c), R.A. No. 10354) the mother keeps and raises the child;
2. Parent left solo or alone with the responsibility

4. ILLNESS
of parenthood due to death of spouse;
(DOLE D.A. No. 05-10; DOLE D.O. No. 73-05)

Discrimination against Hepatitis B Prohibited
of parenthood while the spouse is detained or is
serving sentence for a criminal conviction for at
There shall be no discrimination of any form against least one (1) year;
workers on the basis of their Hepatitis B status
consistent with international agreements on non-
2024 GOLDEN NOTES
4. Parent left solo or alone with the responsibility Maternity Leave for Solo Parents
of parenthood due to physical and/or mental
incapacity of spouse as certified by a public The amount of daily allowance is equivalent to
medical practitioner; 100% of the member’s ADSC for a compensable
period of 120 days for solo parents under R.A. No.
5. Parent left solo or alone with the responsibility 8972 or Solo Parents’ Welfare Act.
of parenthood due to legal separation or de
facto separation from spouse for at least one (1)
6. PERSONS WITH DISABILITY
year, as long as he/she is entrusted with the
(R.A. No. 7277, as amended)
custody of the children;
6. Parent left solo or alone with the responsibility Persons with Disability (PWDs)
of parenthood due to declaration of nullity or
Persons with disability or disable persons are those
annulment of marriage as decreed by a court or
by a church as long as he/she is entrusted with suffering from restriction of different abilities, as a
result of a mental, physical or sensory impairment,
the custody of the children;
to perform an activity in the manner or within the
of parenthood due to abandonment of spouse range considered normal for a human being. (Sec.
4(a), R.A. No. 7277)
for at least one (1) year;
8. Unmarried mother/father who has preferred to Impairment

keep and rear her/his child/children instead of
having others care for them or give them up to a It is any loss, diminution, or aberration of
welfare institution; psychological, physiological, or anatomical
structure or function. (Sec. 4(b), R.A. No. 7277)
9. Any other person who solely provides parental
care and support to a child or children; and Disability
10. Any family member who assumes the Disability shall mean:
responsibility of head of family as a result of the
1. a physical or mental impairment that
death, abandonment, disappearance or
prolonged absence of the parents or solo substantially limits one or more psychological,
physiological or anatomical function of an
parent. (Sec. 3, R.A. No. 8972)
individual or activities of such individual;
NOTE: A change in the status or circumstance of the
2. a record of such an impairment; or
parent claiming benefits under Solo Parents Welfare
Act of 2000, such that he or she is no longer left alone
with the responsibility of parenthood, shall 3. being regarded as having such an impairment.
(Sec. 4(c), R.A. No. 7277)
terminate his or her eligibility for these benefits.
(Sec. 3(11), R.A. No. 8972)
Handicap
Flexible Work Schedule
It refers to a disadvantage for a given individual,
The employer shall provide for a flexible working resulting from an impairment or a disability, that
limits or prevents the function or activity, that is
schedule for solo parents provided that the same
shall not affect individual and company productivity. considered normal given the age and sex of the
individual. (Sec. 4(d), R.A. No. 7277)
Provided, further, that any employer may request
exemption from the above requirements from the
DOLE on certain meritorious grounds. (Sec. 6, R.A.
No. 8972)
2024 GOLDEN NOTES
Sheltered Employment c. Government officials investigating
compliance with this Act shall be provided
It refers to the provision of productive work for relevant information on request; and
persons with disability through workshops
providing special facilities, income-producing d. The results of such examination are used
projects or homework schemes with a view to giving only accordance with this Act. (Sec. 33, R.A.
them the opportunity to earn a living thus enabling No. 7277)
them to acquire a working capacity required in open
industry. (Sec. 4(i), R.A. No. 7277) Discrimination on Employment
Qualified Individual with a Disability This law prohibits any entity, whether public or
private, to discriminate against a qualified PWDs in
An individual with a disability who, with or without regard to job application procedures, the hiring,
reasonable accommodations, can perform the promotion, or discharge of employees, employee
essential functions of the employment position that compensation, job training, and other terms,
such individual holds or desires. However, conditions, and privileges of employment. (Sec. 32,
consideration shall be given to the employer's R.A. No. 7277)
judgment as to what functions of a job are essential,
and if an employer has prepared a written Discriminatory Acts during Pre-Employment
description before advertising or interviewing
applicants for the job, this description shall be 1. Limiting, segregating or classifying a disabled
considered evidence of the essential functions of the job applicant in such a manner that adversely
job. (Sec. 4(l), R.A. No. 7277) affects his work opportunities; and
Employment Entrance Examination 2. Screening out disabled persons through

qualification standards, employment tests or
Upon an offer of employment, a disabled applicant other selection criteria;
may be subjected to medical examination, on the
following occasions: XPN: Said qualification standards are BFOQ.
1. All entering Ees are subjected to such an Discriminatory Acts during Employment
examination regardless of disability; and
1. Using standards, criteria, or methods of
2. Information obtained during the medical administration that either effectively
condition or history of the applicant is collected discriminates on the basis of disability, or
and maintained on separate forms and in perpetuate the discrimination of others who are
separate medical files and is treated as a subject to common administrative control;
confidential medical record. Provided, however,
that: 2. Providing less remuneration or benefits to a
a. Supervisors and managers may be qualified disabled Ee due to his disability, than
informed regarding necessary restrictions the amount to which a non-disabled person
on the work or duties of the Ees and performing the same work is entitled;
necessary accommodations;
3. Favoring a non-disabled Ee over a qualified
b. First aid and safety personnel may be disabled Ee with respect to promotion, training
informed, when appropriate, if the opportunities, study and scholarship grants,
disability might require emergency solely on account of the latter’s disability;
treatment;
2024 GOLDEN NOTES
4. Re-assigning or transferring a disabled Ee to a
job position he cannot perform by reason of his
disability;
5. Failing to select or administer in the effective

manner employment tests which accurately
reflect the skills, aptitude or other factor of the
disabled applicant or Ee that such test purports
to measure, rather than the impaired sensory,
manual or speaking skills of such applicant or
Ee, if any; and
6. Excluding disabled persons from membership

in labor unions or similar organizations. (Sec.
32, R.A. No. 7277)
Discriminatory Acts in Dismissing an Employee
Dismissing or terminating the services of a disabled

Ee by reason of his disability unless the Er can prove
that he impairs the satisfactory performance of the
work involved to the prejudice of the business
entities. Provided, however, That the Er first sought
provide reasonable accommodations for disabled
persons. (Sec. 32(g), R.A. No. 7277)
2024 GOLDEN NOTES
Benefits Received Under SSS Law are Not Part of
V. SOCIAL WELFARE BENEFITS the Estate of a Member
Benefits receivable under the SSS Law are in the

nature of a special privilege or an arrangement
secured by the law pursuant to the policy of the
A. SSS LAW State to provide social security to the workingman.
(R.A. No. 8282, as amended by R.A. No. 11199)
The benefits are specifically declared not
transferable and exempt from tax, legal processes,
and liens. (SSS v. Davac, et al., G.R. No. L-21642, 30
Declaration of Policy July 1966)
It is the policy of the State to establish, develop, Effective Date of SSS Coverage
promote, and perfect a sound and viable tax-exempt
social security system suitable to the needs of the EFFECTIVE DATE OF SSS COVERAGE
people throughout the Philippines which shall
On the first day of
promote social justice through savings, and ensure Er
operation
meaningful social security protection to members
On the first day of
and their beneficiaries against the hazards of Ee
employment
disability, sickness, maternity, old age, death, and
Upon registration with
other contingencies resulting in loss of income or
the SSS; registration
financial burden. Towards this end, the State shall Self-employed
shall mean payment of
endeavor to extend social security protection to
first contribution
Filipino workers, local or overseas, and their
First day of
beneficiaries. (Sec. 2, R.A. No. 11199) Sea-based OFW
employment
Based on the provisions
NOTE: The enactment of the SSS law is a legitimate
Land-based OFW of the Agreement and
exercise of police power. It affords protection to
covered under BLAs its implementing
labor and is in full accord with the constitutional
arrangement
mandate on the promotion of social justice. The
Land-based OFW Applicable month and
funds contributed to the System created by the law
NOT covered under year of the first
are not public funds, but funds belonging to the
BLAs contribution payment
members which are merely held in trust by the
Voluntary coverage Applicable month and
Government. (Roman Catholic Archbishop of Manila
of land-based year of the first
v. SSS, G.R. No. L-15045, 20 Jan. 1961)
overseas Filipinos contribution payment.
As a general rule, the determination of the existence (Rule 15, IRR, R.A. No. 11199)
or non-existence of an employer-employee
relationship for the purpose of determining the Effect of Separation of the Employee on the
coverage in the SSS shall be within the sole Obligation to Contribute and Remit
jurisdiction of the Commission. (SSS Office Order
2017-032) The effects are as follows:
SSS Premiums are Not Taxes 1. His Er’s obligation to contribute arising from
that employment shall cease at the end of the
The funds contributed to the System belong to the month of separation.
members who will receive benefits, as a matter of
right, whenever the hazards provided by the law 2. The separated Ee shall be credited with all
occur. (CMS Estate, Inc. v. SSS, G.R. No. 26298, 28 Sept. contributions paid on his/her behalf and is
1984) entitled to the social security benefits in
2024 GOLDEN NOTES
accordance with issued guidelines and the continue paying contributions under the same
provisions of the Social Security Act of 2018. rules and regulations applicable to a separated
Ee member.
3. The separated Ee may continue to pay his/her
contributions voluntarily to maintain his/her 3. No retroactive payment of contributions shall
right to full benefit. (Sec. 11, R.A. No. 11199) be allowed. (Sec. 11, R.A. No. 11199)
4. Any contribution paid in advance by the Er but Q: A textile company hires 10 carpenters to
not due shall be credited or refunded to said Er. repair the roof of its factory which was
(Sec. 22, R.A. No. 11199) destroyed by typhoon “Bening.” Are the
carpenters subject to compulsory coverage
The above rule recognizes the “once a member, under the SSS Law? Why?
always a member” principle.
A: NO. The employment is purely casual and not for
Legal Compensation the purpose of the occupation or business of the Er.
Their engagement is occasioned by the passage of
It is clear in Art. 113 of the LC that no employer, in the typhoon; they are not hired on a regular basis.
his own behalf or on behalf of any person, shall
make any deduction from the wages of his Q: Don Luis, a widower, lived alone in a house
employees, except in cases where the employer is with a large garden. One day, he noticed that the
authorized by law or regulations issued by the SOLE, plants in his garden needed trimming. He
among others. The Omnibus Rules Implementing remembered that Lando, a 17-year-old out-of-
the LC, meanwhile, provides that deductions from school youth, had contacted him in church the
the wages of the employees may be made by the other day looking for work. He contacted Lando
employer when such deductions are authorized by who immediately attended to Don Luis’ garden
law, or when the deductions are with the written and finished the job in three days. (2014 BAR)
authorization of the employees for payment to a
third person. Thus, any withholding of an a) Is there an Er-Ee relationship between
employee's wages by an employer may only be Don Luis and Lando?
allowed in the form of wage deductions under the
circumstances provided in Art. 113 of the LC, as well A: YES. There is an Er-Ee relationship between Don
as the Omnibus Rules implementing it. Further, Art. Luis and Lando. Firstly, Lando, who was looking for
116 of the LC clearly provides that it is unlawful for work finally rendered personal services for Don
any person, directly or indirectly, to withhold any Luis. Secondly, Lando could not have been the
amount from the wages of a worker without the master of his time, means and methods under the
worker's consent. (PLDT v. Estrañero, G.R. No. circumstances.
192518, 15 Oct. 2014)
b) Does Don Luis need to register Lando
Effect of the Interruption of Business or with the SSS?
Professional Income
A: NO. Don Luis does not need to register Lando
1. If the self-employed member realizes no income with the SSS because he is a purely casual Ee, hence
in any given month, he/she shall not be outside SSS coverage. Neither should he report
required to pay his/her contributions for that Lando for SSS coverage under the Batas
month. Kasambahay Law because, although a gardener, he
is an occasional or sporadic Ee. Therefore, he is not
NOTE: No self-employment income, no a kasambahay who is entitled to SSS coverage. (Sec.
obligation to pay. 2, R.A. No. 10361)
2. A self-employed member may be allowed to
2024 GOLDEN NOTES
1. BENEFITS; COVERAGE AND EXCLUSIONS covered either as employed, self-employed, OFW
and non-working spouse. (Sec. 1, Rule 25, IRR, R.A.
No. 11199)
Benefits under the SSS Act
Qualifying Conditions (Un-P-U-N)

1. Sickness Benefits;
2. Permanent Disability Benefits;
1. The member is Unable to work due to sickness
3. Maternity Leave Benefits;
or injury and is confined either in a hospital or
4. Retirement Benefits;
at home for at least four (4) days.
5. Death Benefits;
6. Funeral Benefits; and
2. The member has Paid at least 3 months of
7. Unemployment Insurance or Involuntary
contributions within the 12-month period
Separation Benefits.
immediately before the semester of sickness or
injury.
Non-Transferability of Benefits
3. The member has Used all company sick leaves

Benefits payable are not transferable and no power
with pay for the current year and has duly
of attorney or other document executed by those
notified his Er.
entitled thereto in favor of any agent, attorney or
any other person for the collection thereof on their
4. The member must Notify the SSS by filing a
behalf shall be recognized, except when the payees
sickness benefit application if he is separated
are physically unable to collect personally such
from employment, a self-employed or voluntary
benefits. (Sec. 15, R.A. No. 11199)
member, including OFW-member. (Sec. 2, Rule
25, IRR, R.A. No. 11199)
Q: On her way home from work, Mikaela, a
machine operator in a sash factory, decided to
NOTE: No contributions paid retroactively by self-
watch a movie in a movie house. However, she
employed, voluntary member, or OFWs shall be used
was stabbed by an unknown assailant. When she
in determining his/her eligibility to sickness benefit
filed a claim for benefits under the law, it was
wherein the date of payment is within or after the
denied on the ground that her injury is not work-
semester of contingency.
connected. Is the denial legal? Why?
A: NO. It is not necessary for the enjoyment of

benefits under the SSS Law that the injury be work-
connected. What is important is membership in the
SSS and not the causal connection of the work of the
Ee to his injury or sickness.
NOTE: Claims based on work-connected injuries or

occupational diseases are covered by the State
Insurance Fund.
Sickness benefit
It is a daily cash allowance paid by the Er to the

member who is unable to work due to sickness or
injury for each day of compensable confinement or
a fraction thereof, or by the SSS, if such person is
unemployed or is self-employed, an OFW, or
Voluntary Member (VM) who has been previously
2024 GOLDEN NOTES
Notification Requirement (Sec. 14, R.A. No. 11199)
SICKNESS OR OFWs are given 35 calendar days in filing sickness

CONFINE- INJURY THAT benefits. This applies only for confinement
MENT OCCURRED elsewhere as defined by the SSS. (Sec. 3, Rule 25, IRR,
HOSPITAL
ELSEWHERE, WHILE R.A. No. 11199)
CONFINE-
AS MAY BE WORKING OR
MENT
DEFINED BY WITHIN THE Amount of Benefit
THE SSS PREMISES OF
THE ER The amount of the member’s daily Sickness Benefit
Notification by Ee to Er allowance is equivalent to 90% of his Average Daily
Salary Credit (ADSC). (Sec. 14, R.A. No. 11199)
The Ee shall
Limitations on the Grant of Sickness Benefit
notify the Er of
the sickness or
1. A member may be granted a maximum sickness
injury in the
Not benefit of 120 days in one calendar year;
prescribed Not necessary
necessary
manner within
2. The sickness benefit shall be paid for not more
5 calendar days
than 240 days on account of the same illness or
after the start
confinement;
of confinement
3. An unused portion of the allowable 120 days
Notification by Er to SSS sickness benefit cannot be carried forward nor
added to the total number of compensable days
The Er shall allowable in the following year; and
The Er shall
inform the
notify the SSS of
SSS of such 4. Compensable confinement shall begin only
The Er shall in such sickness
confinement after all sick leaves of absence with full pay to
turn notify the or injury in the
in the the credit of Ee-member shall have been
SSS within 5 prescribed
prescribed exhausted, if applicable. (Sec. 14, R. A. No. 11199;
calendar days manner within
manner Sec. 6, Rule 25, IRR, R. A. No. 11199)
after receipt of 5 calendar days
within one 1
notice from Ee. after onset of
year from Compensable Confinement
sickness or
date of
injury
discharge. 1. It begins on the 1st day of sickness; and
2. Payment of such allowances shall be promptly
(Secs. 3-4, Rule 25, IRR, R.A. No. 11199) made by the Er:
Rule on Notification of Self-employed Member a. Every regular payday or on the 15th and last
day of each month; and
GR: The unemployed or SE member, land-based
OFW, or voluntary member including non-working b. In case of direct payment by the SSS - as long
spouse, shall directly notify the SSS of the as such allowances are due and payable. (Sec.
confinement in the prescribed manner within five 14(b), R. A. No. 11199)
(5) calendar days after the start of confinement.
XPN: When such confinement is in a hospital,

notification to the SSS in the prescribed manner
shall be within one (1) year from date of discharge.
2024 GOLDEN NOTES
Requirements for an Employer to Claim availed of simultaneously.
Reimbursement of the Sickness Benefit
Requisites
1. 100% of daily benefits shall be reimbursed by
SSS if the following requirements are satisfied: 1. Sickness/injury and disability are not related.
a. Receipt of SSS of satisfactory proof of such 2. Member meets all the qualifying conditions for
payment and legality thereof; and the grant of sickness and disability benefits.
(Sec. 6(xii), Rule 25, IRR, R. A. No. 11199)
b. The Er has notified the SSS of the
confinement within five (5) calendar days Q: Because of the stress in caring for her four (4)
after receipt of the notification from the Ee growing children, Tammy suffered a miscarriage
member. late in her pregnancy and had to undergo an
operation. In the course of the operation, her
2. Er shall be reimbursed only for each day of obstetrician further discovered a suspicious-
confinement starting from the 10th calendar day looking mass that required the subsequent
immediately preceding the date of notification removal of her uterus (hysterectomy). After
to the SSS if the notification to the SSS is made surgery, her physician advised Tammy to be on
beyond five (5) calendar days after receipt of full bed rest for six (6) weeks.
the notification from the Ee member. (Sec. 14(c),
R.A. No. 11199) Meanwhile, the biopsy of the sample tissue
taken from the mass in Tammy's uterus showed
Reimbursement by SSS a beginning malignancy that required an
immediate series of chemotherapy once a week
GR: SSS shall reimburse the Er or pay the for four (4) weeks. What benefits can Tammy
unemployed member only for confinement within claim under existing social legislation? (2013
one year immediately preceding the date the claim BAR)
for benefit or reimbursement is received by the SSS.
A: Assuming she is employed, Tammy is entitled to a
XPN: Confinement in a hospital, in which case the special leave benefit of two months with full pay
claim for benefit or reimbursement must be filed (Gynecological Leave) pursuant to R.A. No. 9710 or
within one year from the last day of confinement. the Magna Carta of Women. She can also claim
(Sec. 14(c), R.A. No. 11199) Sickness Leave benefit in accordance with the SSS
Act.
Instances When the Employer or the
Unemployed Member is Not Entitled to Permanent Disability Benefit
Reimbursement
It is a cash benefit granted to a member who
1. Where the Er failed to notify the SSS of the becomes permanently disabled, either partially or
confinement; totally. (Sec. 1, Rule 23, IRR, R.A. No. 11199)
2. In the case of the unemployed, where he failed Permanent Total Disability (PTD)
to send the notice directly to the SSS except
when the confinement is in a hospital; and The following are deemed permanent total
disabilities:
3. Where the claim for reimbursement is made
after one year from the date of confinement. 1. Complete loss of sight of both eyes;
(Sec. 14, R.A. No. 11199) 2. Loss of two limbs at or above the ankle or
wrists;
NOTE: Sickness and disability benefits may be 3. Permanent complete paralysis of two limbs;
2024 GOLDEN NOTES
4. Brain injury resulting to incurable imbecility or Amount of Benefit
insanity; and
5. Such cases as determined and approved by the 1. The minimum monthly Disability Pension is:
SSS. (Sec. 13-A(d), R.A. No. 11199)
a. P1,000 if the member has less than ten
Permanent Partial Disability (PPD) Credited Years of Service (CYS);
b. P1,200 if with at least 10 CYS; and
If disability occurs after 36 monthly contributions c. P2,400 with at least 20 CYS. (Sec. 2,
have been paid prior to the semester of disability, Rule 18, IRR of RA 11199)
the benefit shall be the monthly pension for
permanent total disability payable not longer than 2. If qualified, the member is granted a monthly
the period designated in the schedule in Sec. 3, Rule Disability Pension, plus P5,000 monthly
23 of the IRR of R.A. No. 11199. The monthly pension Supplemental Allowance. (Sec. 7, Rule 23, IRR,
benefit shall be given in lump sum if it is payable for R. A. No. 11199)
less than 12 months.
3. Dependent’s Pension (for total disability),
NOTE: For the purpose of adjudicating retirement, which is 10% of the member’s basic monthly
death and permanent total disability pension pension, or P250, whichever is higher. (Sec. 12-
benefits, contributions shall be deemed paid for the A, R.A. No. 11199)
months during which the member received partial
disability pension. NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to
Types of Permanent Disability Benefits dependent’s pension. No substitution is
allowed.
1. Percentage of the lump sum benefit – available
if the permanent partial disability occurs before 4. Plus P1,000 additional benefit effective
36 monthly contributions have been paid prior January 2017. (Sec. 12 (c), R.A. No. 11199)
to the semester of disability;
5. 13th month pension, which is payable every
2. Monthly pension – available if the permanent December to total disability pensioners; for
partial disability occurs after 36 contributions, partial disability pensioners, 13th month
payable in accordance with the schedule. (Sec. pension shall be paid provided that pension
13-A, R. A. No. 11199) duration is at least 12 months. (Sec. 8, Rule 23,
IRR, R. A. No. 11199)
NOTE: The monthly pension benefit for PPD will be
given in lump sum if it is payable in less than 12 Effect of the Death of a Pensioner with PTD
months. (Ungos, 2013)
1. Primary beneficiaries are entitled to receive
Qualifying Conditions monthly pension as of the date of disability.
1. The member has paid at least one month 2. If there are no primary beneficiaries and the
contribution before the semester of disability. pensioner dies within 60 months from the start
of his monthly pension – secondary
2. To qualify for a monthly disability pension, the beneficiaries shall be entitled to a lump sum
member must have paid at least 36 monthly benefit equivalent to the total monthly pensions
contributions prior to the semester of disability. corresponding to the balance of the five-year
guaranteed period excluding the dependents’
3. If less than 36 monthly contributions, he is pension. (Sec. 13-A, R.A. No. 11199)
granted a lump sum amount. (Sec. 13-A, R.A. No.
11199) Surviving Spouse Entitled to SSS Pension Even if
2024 GOLDEN NOTES
Marriage Was Contracted After Spouse’s Qualifying Conditions
Disability
1. The member has paid at least three (3) monthly
The Court has voided the provision in the Social contributions within the 12-month period
Security Act that disqualifies as primary immediately preceding the semester of her
beneficiaries those who become the legitimate childbirth or miscarriage.
spouse of the pensioner only after the latter suffered
permanent total disability declared void the proviso 2. If employed, she must have notified her Er of
“as of the date of disability” in Sec. 13-A(c) of R.A. No. her pregnancy and the probable date of her
8282, or the Social Security Act of 1997 (Social childbirth.
Security Law), for being contrary to the due process
and equal protection clauses of the Constitution 3. She must directly notify the SSS if she is
unemployed, a self-employed or voluntary
The Social Security Law was enacted pursuant to the member, non-working spouse, including OFW-
policy of the State to promote social justice and member. (Sec. 14-A, R.A. No. 11199)
provide protection to the workers and their
beneficiaries against the hazards of contingencies, Amount of Benefit
such as disability and death, resulting in loss of
income or financial burden. As a social welfare The amount of daily allowance is equivalent to
legislation, the Social Security Law should be 100% of the member’s ADSC for a compensable
liberally construed in favor of the intended period of:
beneficiary, for it is only by giving the law a liberal
construction that the constitutional policy 1. 105 days for normal or caesarian section
concerning promotion of social justice is realized, delivery;
held the Court.
2. 120 days for solo parents under R.A. No. 8972
Sec. 13-A(c) of the law violates the Constitution’s or Solo Parents’ Welfare Act; or
due process clause. Reiterating its 2004 ruling in
GSIS, Cebu City Branch v. Montesclaros, the Court 3. 60 days for miscarriage or emergency
held that retirement benefits, including SSS pension, termination of pregnancy (ETP). (R.A. No. 11210
are protected property interest given that these are or the Expanded Maternity Leave Law)
compulsory contributions that formed part of one’s
compensation, rather than a mere gratuity. (Dolera NOTE: The Maternity Benefit is granted regardless
v. SSS, G.R. No. 253940, 24 Oct. 2023) of member’s civil status and frequency of pregnancy.
Effect of Retirement or Death of a Pensioner Q: A, single, has been an active member of the
with a Partial Disability SSS for the past 20 months. She became
pregnant out of wedlock and on her 7th month
If the pensioner with partial disability retires or of pregnancy, she was informed that she would
dies, the disability pension shall cease upon his have to deliver the baby through caesarean
retirement or death. (Sec. 13-A, R.A. No. 11199) section because of some complications. Can A
claim maternity benefits? If yes, how many days
Maternity Benefit can she go on maternity leave? If not, why is she
not entitled? (2010 BAR)
Maternity Leave Benefit is a daily cash allowance
granted to female members who gave birth via A: YES. The Expanded Maternity Leave Law applies
normal delivery or caesarean section or suffered to all female workers regardless of civil status, as
miscarriage, regardless of civil status or legitimacy long as the requirements under the law on notices
of the child. (Sec. 1, Rule 26, IRR, R.A. No. 11199) and payment, among others, have been satisfied.
2024 GOLDEN NOTES
Since there is no indication that A is a solo parent, years old and separated from
she is entitled to 100% of her average salary credit employment or has ceased to be self-
for 105 days. employed.
Q: Luisa is an unwed mother with three children XPNs:

from different fathers. In 2004, she became a i. An underground mineworker whose
member of the SSS. That same year, she suffered date of actual retirement is not
a miscarriage of a baby out of wedlock from the earlier than 13 Mar. 1998 but not
father of her third child. She wants to claim later than 27 Apr. 2016 – at least 55
maternity benefits under the SSS Act. Is she years old; and
entitled to claim? (2015 BAR)
ii. An underground or a surface
A: YES. Provided that Luisa has reported to her Er mineworker whose date of actual
her pregnancy and date of expected delivery and retirement in not earlier than 27
paid at least 3 monthly contributions during the 12- Apr. 2016 – 50 years old.
month period immediately preceding her
miscarriage, then she is entitled to maternity b. Technical Retirement – At least 65 years
benefits under the Expanded Maternity Leave Act, old.
regardless of frequency. As to the fact that she got
pregnant outside wedlock, as in her past three XPNs:
pregnancies, this will not bar her claim because the i. An underground mineworker or
SSS is non-discriminatory. surface mineworker – At least 60
years old; and
Retirement Benefit
NOTE: Effective 27 Apr. 2016
The Retirement Benefit is a monthly pension or
lump sum granted to a member who can no longer ii. In the case of a racehorse jockey – At
work due to old age. (Sec. 1, Rule 21, IRR, R. A. No. least 55 years old. (Sec. 2, Rule 21,
11199) IRR of R. A. No. 11199)
Types of Retirement Benefit NOTE: Effective 24 May 2016
1. Monthly Pension – Lifetime cash benefit paid to Requisites for Entitlement to Lump Sum Benefit
a retiree who has paid at least 120 monthly
contributions to the SSS prior to the semester of 1. At least sixty (60) years old at the time of
retirement. retirement;
2. Does not qualify for pension benefits under
2. Lump Sum Amount – Granted to a retiree who par. (a) of Sec. 12-B;
has not paid the required 120 monthly 3. Must be separated from employment; and
contributions. 4. Is not continuing payment of contribution to
the SSS on his own. (Sec. 5, Rule 21, IRR, R. A. No.
Qualifying Conditions 11199)
1. A member must have at least 120 monthly Amount of Benefit

contributions prior to semester of retirement;
and 1. If qualified, the member is granted a monthly
Retirement Plan Pension.
2. Age Requirement:
2. The retiree has the option to receive the first
a. Optional Retirement – Has reached 60 18th months pension in lump sum, discounted at
2024 GOLDEN NOTES
a preferential rate to be determined by the SSS. secondary beneficiaries shall be entitled to a
This option can be exercised only upon lump sum benefit equivalent to the total
application of the first retirement claim, and the monthly pension corresponding to the balance
Dependent’s Pension is excluded from the of the five-year guaranteed period, excluding
advanced 18 months pension. (Sec. 3, Rule 21, the dependent’s pension and additional benefit
IRR of R. A. No. 11199) allowance.
3. The minimum monthly Retirement Pension is: 3. If there are no primary and secondary
beneficiaries, the lump sum payment in the
a. P1,200 if the member has 120 months amount specified in the preceding paragraph
contribution or at least ten (10) CYS; or shall form part of his/her estate and shall be
b. P2,400 if with at least 20 CYS. paid to his/her legal heirs in accordance with
the law of succession. (Sec. 8, Rule 21, IRR, R. A.
4. Plus P1,000 additional benefit effective Jan. No. 11199)
2017. (Sec. 12(c), R. A. No. 11199)
Death Benefit
5. Dependent’s Pension (for total disability),
which is 10% of the member’s basic monthly It is a cash benefit either in monthly pension or lump
pension, or P250, whichever is higher. (Sec. 12- sum paid to the beneficiaries of a deceased member.
A, R. A. No. 11199) (Sec. 1, Rule 22, IRR, R. A. No. 11199)
NOTE: Only five dependent minor children, Entitlement to Death Benefits

beginning from the youngest, are entitled to
dependent’s pension. No substitution is 1. Upon death of a member who has paid at least
allowed. 36 monthly contributions prior to the semester
of death:
6. 13th month pension, which is payable every
December plus additional benefits. (Sec. 4, Rule a. Primary beneficiaries shall be entitled to the
21, IRR, R. A. No. 11199) monthly pension; or
Consequence of the Re-Employment or b. If there are no primary beneficiaries,

Resumption to Work of a Retired Pensioner secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to 36 times the
The monthly pension of a retired member who monthly pension.
resumes employment and is less than 65 years old
will be suspended. He and his Er will again be 2. Upon death of a member who has not paid the
subject to compulsory coverage. (Sec. 13-A, R.A. No. required 36 monthly contributions prior to the
11199) semester of death, the primary or secondary
beneficiaries shall receive lump sum benefit,
Death of a Retired Member whichever is higher between the equivalent of:
Upon the death of a retired member: a. The monthly pension multiplied by the
number of monthly contributions paid to the
1. His/her primary beneficiaries, as of the date of SSS; or
his/her retirement, shall be entitled to receive
100% of the monthly pension. b. 12 times the monthly pension. (Sec. 13, R.A.
No. 11199)
2. If the retired member has no primary
beneficiaries and dies within 60 months from
the start of his/her monthly pension, his/her
2024 GOLDEN NOTES
Amount of Benefit member’s paid contributions and CYS. (Sec. 2, Rule
24, IRR, R. A. No. 11199)
1. Monthly death pension to the member’s
primary beneficiary is granted a monthly death Qualifying Conditions
pension.
1. The Ee-member was reported for coverage by
2. Lump sum amount to secondary beneficiaries his Er;
in the absence of primary beneficiaries, or to
legal heirs in the absence of secondary 2. A self-employed member/OFW/non- working
beneficiaries. spouse who had at least one contribution
payment;
3. Dependent’s Pension (for total disability) is
10% of the member’s basic monthly pension, or 3. A voluntary member who was previously
P250, whichever is higher. (Sec. 12-A, R.A. No. covered either as employed/self-
11199) employed/OFW and has at least one (1)
contribution payment;
NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to 4. The Ee-member was subject to compulsory
dependent’s pension. No substitution is coverage but was not reported for coverage by
allowed. Er.
4. Plus P1,000 additional benefit effective January Unemployment Benefit

2017. (Sec. 12(c), R.A. No. 11199)
Also known as unemployment insurance or
5. The minimum monthly Death Pension is P1,000 involuntary separation benefit, it is a cash benefit
if the member had less than ten CYS; P1,200 if granted to covered Ees, including kasambahays and
with at least ten CYS; and P2,400 with at least OFWs (sea-based or land-based) who are
20 CYS. involuntarily separated from employment. (Sec. 14-
B, R.A. No. 11199)
Cause of Death Must Be an Occupational Disease
Qualifying Conditions
In order for the beneficiary of an Ee to be entitled to
death benefits under the SSS, the cause of death 1. Not over sixty (60) years old at the time of
must be a sickness listed as an occupational disease involuntary separation, except;
by ECC; or any other illness caused by employment,
subject to proof that the risk of contracting the same a. In the case of underground mineworker or
is increased by the working conditions. (Bañez v. surface mineworker which must not be
SSS, G.R. No. 189574, 18 July 2014) over 50 years old; or
Funeral Benefit b. In the case of racehorse jockey, not over 55

years old.
A funeral grant equivalent to P12,000.00 shall be
paid, in cash or in kind, to help defray the cost of 2. Has paid at least thirty-six (36) monthly
funeral expenses upon the death of a member or contributions, twelve (12) months of which
retiree. (Sec. 13-B, R.A. No. 11199) should be in the eighteen (18) month period
immediately preceding the unemployment or
NOTE: Starting 01 Aug. 2015, the amount of the involuntary separation;
funeral grant was increased to a variable amount
ranging from a minimum of P20,000.00 to a 3. Involuntarily separated from employment
maximum of P40,000.00, depending on the provided that such separation did not arise
2024 GOLDEN NOTES
from fault or negligence of the Ee and which time of the approval of the SSS Act shall not
may be attributed to any of, but not limited to, be discontinued, reduced or otherwise
the following: impaired;
a. Installation of labor-saving devices; b. Private benefit plans which are existing and
b. Redundancy; in force at the time of compulsory coverage
c. Retrenchment to prevent loss; shall be integrated with the plan of the SSS,
d. Closure or cessation of operation; or and if the Er's contribution to his/her
e. Disease/illness. (Sec. 2, Rule 27, IRR, R. A. private plan is more than that required of
No. 11199) him/her in the SSS Act:
Amount of Benefit i. He/She shall pay to the SSS only the

contribution required of him/her;
The benefit is granted through a one- time payment,
and the claim must be filed within a year from the ii. He/She shall continue his/her contribution
date of involuntary separation. to such private plan less his/her
contribution to the SSS so that the Er's total
The unemployment insurance or involuntary contribution to his/her benefit plan and to
separation benefit is a monthly cash payment the SSS shall be the same as his/her
equivalent to 50% of the AMSC for a maximum of contribution to his/her private benefit plan
two (2) months, subject to the rules and regulations before the compulsory coverage.
that the Commission may prescribe. (Sec. 1, Rule 27,
IRR, R. A. No. 11199) c. Any changes, adjustments, modifications,
eliminations or improvements in the
Compulsory Coverage benefits to be available under the
remaining private plan shall be subject to
1. All Ees not over 60 years of age and their Ers; agreements between the Ers and Ees
concerned;
2. Domestic helpers whose income is not less than
P1,500 per month and not over 60 years of age d. The private benefit plan which the Er shall
and their Ers; continue for his/her Ees shall remain under
the Er's management and control unless
NOTE: The minimum wage of domestic workers there is an existing agreement to the
is now P1,500 to P2,500 in NCR pursuant to Sec. contrary; and
24 of R.A. No. 10361 or Batas Kasambahay Law.
e. Nothing in the SSS Act shall be construed as
Per R.A. No. 10361, a domestic worker who has a limitation to the right of Ers and Ees to
rendered at least one (1) month of service shall agree on and adopt benefits which are over
be covered by the Social Security System (SSS), and above those provided under the SSS
the Philippine Health Insurance Corporation Act. (Sec. 9, R.A. No. 11199; Sec. 2, Rule 13,
(PhilHealth), and the Home Development IRR of R.A. No. 11199)
Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the 3. Self–employed persons as may be determined
pertinent provisions provided by law. by the Commission.
The following rules shall govern the covered Ees NOTE: A self-employed person is one whose
with private benefit plans: income is not derived from employment, as well
as those mentioned in Sec. 9-A of the law (Sec.
a. The benefit already earned by the Ees 8(s), R.A. No. 11199):
under private benefit plans existing at the
2024 GOLDEN NOTES
a. All self-employed professionals; NOTE: Ees of bona fide independent contractors
shall not be deemed Ees of the Er engaging the
b. Partners and single proprietors of business; service of said contractors.
c. Actors and actresses, directors, Q: The owners of FALCON Factory, a company

scriptwriters, and news correspondents engaged in the assembling of automotive
who do not fall within the definition of the components, decided to have their building
term “employee”; renovated. Fifty (50) persons, composed of
engineers, architects, and other construction
d. Professional athletes, coaches, trainers, and workers, were hired by the company for this
jockeys; and purpose. The work was estimated to be
completed in 3 years. The workers contended
e. Individual farmers and fisherman. (Sec. 9-A, that since the work would be completed after
R.A. No. 11199) more than 1 year, they should be subject to
compulsory coverage under the Social Security
4. All sea-based and land-based Overseas Filipino Law. Do you agree with their contention?
Workers (OFWs) not over 60 years of age. Explain your answer fully. (2002 BAR)
NOTE: Land-based OFWs are compulsory A: NO. Under Sec. 8(j) of R.A. No. 1161, as amended,
members of the SSS and are considered in the employment of purely casual and not for the
same manner as self-employed persons, until a purpose of the occupation or business of the Er is
Bilateral Labor Agreement (BLA) shall have excepted from compulsory coverage. An
been entered into. (Sec. 9-B(c), R.A. No. 11199) employment is purely casual if it is not for the
purpose of occupation or business of the Er.
NOTE: Manning agencies are agents of their
principals and are considered as Ers of sea- In the problem given, Falcon Factory is a company
based OFWs. (Sec. 9-B(b), R.A. No. 11199) engaged in the assembly of automotive components.
The 50 persons (engineers, architects, and
Exclusions from Coverage construction workers) were hired by Falcon Factory
to renovate its building. The work to be performed
The following are excluded from compulsory by these 50 people is not in connection with the
coverage under the SSS Act: purpose of the business of the factory. Hence, the
employment of these 50 persons is purely casual.
1. Services where there is no Er-Ee relationship in They are, therefore, excepted from the compulsory
accordance with existing labor laws, rules, coverage of the SSS law.
regulations, and jurisprudence;
Voluntary Coverage
2. Services performed in the employ of the
Philippine Government or instrumentality or 1. Spouses who devote full time to managing the
agency thereof; household and family affairs;
3. Services performed in the employ of a foreign XPN: They are also engaged in other vocation or
government or international organization, or employment which is subject to mandatory
their wholly-owned instrumentality; and coverage. (Sec. 9(b), R.A. No. 11199);
4. Such other services performed by temporary 2. An OFW upon the termination of his/her
and other Ees which may be excluded by employment overseas (Sec. 9-B(f), R.A. No.
regulation of the Commission. (Sec. 8, (j), R.A. 11199);
No. 11199)
3. A covered Ee who was separated from
2024 GOLDEN NOTES
employment who continues to pay his/her Primary Beneficiaries
contributions;
The primary beneficiaries of the member are the
4. Self-employed who realizes no income for a following:
certain month; and
1. The dependent spouse, until he or she
5. Filipino permanent migrants, including Filipino remarries; and
immigrants, permanent residents and
naturalized citizens of their host countries. (Sec. 2. The dependent legitimate, legitimated, or
9-B(g), R.A. No. 11199) legally adopted children and the illegitimate
children. (Sec. 12, IRR of the R.A. No. 11199)
By Agreement
NOTE: Where there are legitimate or
GR: Any foreign government, international illegitimate children, the former shall be
organization, or their wholly owned instrumentality preferred. Dependent illegitimate children shall
employing workers in the Philippines or employing be entitled to 50% of the share of the legitimate,
Filipinos outside of the Philippines. legitimated or legally adopted children. In the
absence of the dependent legitimate,
XPN: Those already covered by their respective civil legitimated or legally adopted children of the
service retirement systems. member, his/her dependent illegitimate
children shall be entitled to 100% of the
benefits. (Ibid.)
2. DEPENDENTS AND BENEFICIARIES
Secondary Beneficiaries
Dependents
In the absence of primary beneficiaries, the
The dependents shall be the following: secondary beneficiaries are as follows:
1. The legal spouse entitled by law to receive 1. Dependent parents; or

support from the member;
2. In the absence of dependent parents, any other
person/s designated and reported by the
2. The legitimate, legitimated or legally adopted, member to the SSS. (Sec. 8(k), R.A. No. 11199)
and illegitimate child who is
NOTE: The person designated by the member
a. Unmarried; shall be someone who has a right to claim for
b. not gainfully employed; and
support from the deceased member under the
c. has not reached 21 years of age; or
Family Code, including dependent children who
d. if over 21 years of age, he is congenitally have reached the age of majority. (Sec. 13, IRR of
or while still a minor has been
R.A. No. 11199)
permanently incapacitated and
incapable of self-support, physically or Q: John died in an accident while performing his
mentally; and
duties as an electrician on board a vessel. At the
time of his demise, he was childless and
3. The parent who is receiving regular support unmarried, predeceased by his adoptive parent
from the member. (Sec. 8(e), R.A. No. 11199)
Cornelio during his minority, and survived only
by his biological parent Bernardina. Bernardina
filed a claim for death benefits, but the SSS
rejected her claim because she is no longer
considered a primary beneficiary, because she is
no longer John’s legitimate parent due to his
2024 GOLDEN NOTES
legal adoption by Cornelio. Is the SSS correct? Dependent Spouse
A: NO. The term "parents" in the phrase "dependent He/she is the legitimate spouse dependent for
parents" ought to be taken in its general sense and support upon the member or pensioner. If a wife is
cannot be unduly limited to "legitimate parents.” already separated de facto from her husband, she
The phrase "dependent parents" should, therefore, cannot be said to be "dependent for support" upon
include all parents, whether legitimate or the husband, absent any showing to the contrary.
illegitimate and whether by nature or by adoption. Conversely, if it is proved that the husband and wife
When the law does not distinguish, one should not were still living together at the time of his death, it
distinguish. Plainly, "dependent parents" are would be safe to presume that she was dependent
parents, whether legitimate or illegitimate, on the husband for support, unless it is shown that
biological or by adoption, who are in need of she is capable of providing for herself. (SSS v. Aguas,
support or assistance. G.R. No. 165546, 27 Feb. 2006)
The biological parent has the right to the benefits Q: Bonifacio and Elena Dycaico lived together as
stemming from John’s death as a dependent parent husband and wife without the benefit of
given the adoptive parent’s untimely demise during marriage. In June 1989, Bonifacio was
John’s minority. It is true that the adoption decree considered retired and began receiving his
severed the relation between John and his biological monthly pension from the SSS. Bonifacio
parent, effectively divesting the latter’s status of a married Elena on 06 Jan. 1997. He continued to
legitimate parent, and consequently, that of being a receive the monthly pension until he passed
secondary beneficiary. However, it should be noted away on 19 June 1997. Elena filed with the SSS an
that parental authority should be deemed to have application for survivor’s pension, but it was
reverted in favor of the biological parent upon death denied on the ground that under Sec. 12-B(d) of
of the adoptive parent during the adoptee’s the SSS Law, the primary beneficiaries who are
minority. entitled to survivor’s pension are those who
qualify as such as of the date of retirement of the
Thus, the death benefits under the Ees’ deceased member. Hence, Elena, who was not
Compensation Program shall accrue solely to the then the legitimate spouse of Bonifacio as of the
surviving biological parent, John’s sole remaining date of his retirement, could not be considered
beneficiary. (Bartolome v. SSS, G.R. No. 192531, 12 his primary beneficiary. Is Elena entitled to
Nov. 2014) claim survivor’s pension?
Dependent for Support A: YES. The proviso as of the date of his retirement
in Sec. 12-B (d) of R.A. No. 8282, which qualifies the
The entitlement to benefits as a primary beneficiary term primary beneficiaries, is unconstitutional for it
requires not only legitimacy but also dependence violates the due process and equal protection
upon the member Ee. (SSS v. Favila, G.R. No. 170195, clauses of the Constitution. The classification of
28 Mar. 2011) dependent spouses on the basis of whether their
respective marriages to the SSS member were
NOTE: The Court defined a “dependent” as one who contracted prior to or after the latter’s retirement
derives his or her main support from another. for the purpose of entitlement to survivor’s pension
Meaning, relying on, or subject to, someone else for does not rest on real and substantial distinctions. It
support; not able to exist or sustain oneself, or to is too sweeping because the proviso effectively
perform anything without the will, power, or aid of disqualifies the dependent spouses—whose
someone else. respective marriages to the retired SSS member
were contracted after the latter’s retirement—as
primary beneficiaries and unfairly lumps all these
marriages as sham relationships or were contracted
solely for the purpose of acquiring benefits accruing
2024 GOLDEN NOTES
upon the death of the other spouse. purpose. In this regard, the SSS Branch
concerned shall conduct an appropriate
The proviso runs afoul of the due process clause as investigation to satisfy this requirement; and
it outrightly deprives the surviving spouses, whose
respective marriages to the retired SSS members 3. The spouse must have been dependent for
were contracted after the latter’s retirement, of support upon the retiree-pensioner during the
their survivor’s benefits. There is outright existence of marriage. (SSS Office Order No.
confiscation of benefits due such surviving spouses 2010-02)
without giving them an opportunity to be heard.
(Dycaico v. SSS, G.R. No. 161357, 30 Nov. 2005) Q: Antonio and Gloria de los Santos, both
Filipinos, got married in 1964. In 1983, Gloria
NOTE: The reckoning point in determining the left Antonio and went to the United States.
beneficiaries of the deceased should be the time of In 1986, she filed for divorce against Antonio in
the latter’s death. (SSS v. De Los Santos, G.R. No. California. The divorce was granted.
164790, 29 Aug. 2008)
In 1987, Antonio married Cirila de los Santos.
Qualification of Spouse-Beneficiary For her part, Gloria married Larry Thomas
Constant, an American citizen, in the US. In 1999,
To ensure a uniform implementation of the Dycaico Antonio died of respiratory failure. Cirila
v. SSS case (G.R. No. 161357, 30 Nov. 2005), the SSS applied for and began receiving his SSS pension
issued the following guidelines: benefit.
1. The spouse must have been legally married to On 21 Dec. 1999, Gloria filed a claim for
the retiree-pensioner at the time of death. Antonio’s death benefits with the SSS. Her claim
was denied on the ground that she was not a
2. If the marriage was celebrated after the qualified beneficiary of Antonio. She contended
retirement of the member, any of the following that her marriage to Larry Constant was not the
circumstances is present: subsequent marriage contemplated under SSS
Law that would disqualify her as a beneficiary;
a. The spouses were living together as husband that the decree of divorce issued by a foreign
and wife without legal impediment to marry state involving Filipino citizens has no validity
each other prior to the retirement of the and effect under Philippine law. Is Gloria still
member; or qualified as a primary beneficiary of Antonio
under the SSS Law?
b. The surviving spouse was reported as
beneficiary-spouse in the SSS Forms prior to A: NO. Although Gloria was the legal spouse of the
the retirement of the member; or deceased, she is still disqualified to be his primary
beneficiary under the SSS Law for she fails to fulfill
c. A child was born during the existence of the the requirement of dependency upon her deceased
marriage between the retiree-pensioner and husband Antonio. (SSS v. De Los Santos, G.R. No.
the surviving spouse; or 164790, 29 Aug. 2008)
d. Before marriage, a child was born during the Q: Rodolfo, an SSS member, was survived by the
time the spouses were living together as following: his legal wife Editha, who was now
husband and wife without legal impediment cohabiting with another man; another wife
to marry each other; or Yolanda, whom Rodolfo married and with whom
he had four illegitimate children, who are now
e. The marriage between the surviving spouse over 21 years old; and another common-law
and retiree-pensioner is established to have wife, Gina, with whom he had two illegitimate
been contracted not for any fraudulent minor children. All wives filed a claim before the
2024 GOLDEN NOTES
SSS for death benefits. Who among the claimants
are qualified and/or disqualified as
B. GSIS LAW
beneficiaries? (R.A. No. 8291)
A: Yolanda is disqualified because the marriage

between her and Rodolfo was null and void because
of a prior subsisting marriage contracted with 1. BENEFITS; COVERAGE AND EXCLUSIONS
Editha.
Benefits under the GSIS Act
Editha is disqualified, because even if she was the
legal wife, she was not qualified to the death benefits 1. Separation benefits;
since she herself admitted that she was not 2. Unemployment or involuntary separation
dependent on her deceased husband for support benefits;
inasmuch as she was cohabiting with another man. 3. Retirement benefits;
Gina is disqualified, being a common-law wife. 4. Permanent disability benefits;
5. Temporary disability benefits;
Since the wives are disqualified and because the 6. Survivorship benefits;
deceased has no legitimate child, it follows that the 7. Funeral benefits;
dependent illegitimate minor children of the 8. Life insurance; and
deceased shall be entitled to the death benefits as 9. Such other benefits and protection as may be
primary beneficiaries. The SSS Law is clear that for extended to them by the GSIS such as loans.
a minor child to qualify as a “dependent,” the only
requirements are that he/she must be below 21 Entitlement of a Member to Separation Benefits
years of age, not married nor gainfully employed.
Yolanda’s children are disqualified for being over 21 A member who has rendered a minimum of three
years old. (3) years of creditable service shall be entitled to
separation benefits upon resignation or separation
In this case, the minor illegitimate children of Gina under the following terms:
are the only qualified beneficiaries of Rodolfo.
(Signey v. SSS, G.R. No. 173582, 28 Jan. 2008) 1. A member with at least 3 years of service but
less than 15 years – Cash payment equivalent
Social Security Law is Not a Law on Succession to 100% of the average monthly compensation
for every year of service the member has paid
It is not the heirs of the Ee but the designated contributions:
beneficiaries who are to receive the social security
benefits. It is only when the beneficiary is the estate, a. Not less than P12, 000.00; and
or when there is no designated beneficiary, or if the b. Payable upon reaching sixty (60) years of
designation of beneficiary is void, that the Social age or upon separation, whichever comes
Security System is required to pay the Ee’s heirs. later. (Sec. 11(a), R.A. No. 8291)
(Ungos, 2013)
2. A member with at least 15 years of service
and less than 60 years of age at the time of
resignation or separation:
a. Cash payment equivalent to 18 times the

Basic Monthly Pension (BMP), payable at
the time of resignation or separation; and
b. An old-age pension benefit equals to the

BMP, payable monthly for life upon
2024 GOLDEN NOTES
reaching the age of 60. (Sec. 11(b), R.A. No. that the nature of their work and their relations with
8291) their superiors as well as the public would impose
upon them. (Beronilla v. GSIS, G.R. No. L-21723, 26
Effects of Separation from Service with Regard Nov.1970)
to Membership
Conditions for Entitlement to Retirement
A member separated from the service shall continue Benefits
to be a member and shall be entitled to whatever
benefits he/she qualifies for. (Once a member, 1. A member has rendered at least 15 years of
always a member.) service;
NOTE: A member separated for a valid cause shall 2. He is at least 60 years of age at the time of
automatically forfeit his benefits, unless the terms of retirement; and
resignation or separation provide otherwise. In case
of forfeiture, the separated Ee shall be entitled to 3. He is not receiving a monthly pension benefit
receive only one-half (1/2) of the cash surrender from permanent total disability. (Sec. 13-A, R.A.
value of his insurance. No. 8291)
Unemployment Benefits NOTE: Where the Ee retires and meets the eligibility
requirements, he acquires a vested right to benefits
It will consist of monthly cash payments equivalent that is protected by the due process clause. Retirees
to 50% of the average monthly compensation. enjoy a protected property interest whenever they
A member who has rendered at least fifteen (15) acquire a right to immediate payment under pre-
years of service will be entitled to separation existing law. Thus, a pensioner acquires a vested
benefits instead of unemployment benefits. right to benefits that have become due as provided
under the terms of the public Ees’ pension statute.
Conditions for Entitlement to Unemployment No law can deprive such person of his pension rights
Benefits without due process of law, that is, without notice
and opportunity to be heard. (GSIS v. De Leon, G.R.
1. The recipient must be a permanent Ee at the No. 186560, 17 Nov. 2010)
time of separation;
2. His separation was involuntary due to the Options of the Retiree with Regard to his or her
abolition of his office or position resulting from Retirement Benefits
reorganization; and
3. He has been paying the contribution for at least The retiree may get either of the following:
one (1) year prior to separation. (Sec. 12, R.A.
No. 8291) 1. Lump sum payment equivalent to 60 months of
the BMP payable at the time of retirement and
Rationale of Compulsory Retirement an old-age pension benefit equal to BMP
payable for life, starting upon the expiration of
The compulsory retirement of government officials the five (5) years covered by the lump sum; or
and Ees upon reaching the age of 65 years is
founded on public policy which aims to maintain 2. Cash payment equivalent to 18 times his BMP
efficiency in the government service and at the same and monthly pension for life payable
time, give the retiring public servants the immediately. (Sec. 13(a), R.A. No. 8291)
opportunity to enjoy during the remainder of their
lives the recompense, for their long service and
devotion to the government, in the form of a
comparatively easier life, freed from the rigors of
civil service discipline and the exacting demands
2024 GOLDEN NOTES
Rule in Case of Extension of Service in Order to
be Entitled for Retirement Benefits Benefits for PTD
The Supreme Court held that the head of the 1. A member is entitled to the monthly income
government agency concerned is vested with benefit for life equivalent to the BMP effective
discretionary authority to allow or disallow from the date of disability when:
extension of the service of an official or Ee who has
reached 65 years old without completing the 15 a. He is in the service at the time of the
years of government service. However, this disability; or
discretion is to be exercised conformably with the
provisions of Civil Service Memorandum Circular No. NOTE: If at the time of disability, he was in
27, s. of 1990 which provides that the extension shall the service and has paid a total of at least
not exceed one (1) year. (Rabor v. CSC, G.R. No. 180 monthly contributions, in addition to
111812, 31 May 1995) the monthly income benefit, he shall
receive a cash payment equivalent to 18
Disability times his BMP. (Sec. 16(a), R.A. No. 8291)
Any loss or impairment of the normal functions of b. If separated from service:

the physical and/or mental faculty of a member,
which reduces or eliminates his/her capacity to i. He has paid at least 36 monthly
continue with his/her current gainful occupation or contributions within 5 years immediately
engage in any other gainful occupation. (Sec. 2(q), preceding his disability; or
R.A. No. 8291)
ii. He has paid a total of at least 180 monthly
Total Disability contributions prior his disability. (Sec.
16(a), R.A. No. 8291)
Complete incapacity to continue with present
employment or engage in any gainful occupation NOTE: A member cannot enjoy the monthly
due to the loss or impairment of the normal income benefit for permanent disability and the
functions of the physical and/or mental faculties of old-age retirement simultaneously.
the member. (Sec. 2(r), R.A. No. 8291)
2. If the member does not satisfy the conditions
Types of Permanent Disability above but has rendered at least 3 years of
service, he shall be advanced the cash payment
1. Permanent Total Disability (PTD) – Accrues or equivalent to 100% of his average monthly
arises when recovery from any loss or compensation for each year of service he has
impairment of the normal functions of the paid contributions, but not less than
physical and/or mental faculty of a member P12,000.00, which should have been his
which reduces or eliminates his capacity to separation benefit. (Sec. 16(b), R.A. No. 8291)
continue with his current gainful occupation or
engage in any other gainful occupation is Disabilities Deemed as PTD
medically remote. (Sec. 2(q) and (s), R.A. No.
8291) 1. Complete loss of sight of both eyes;
2. Loss of two (2) limbs at or above the ankle or
2. Permanent Partial Disability (PPD) – Accrues wrist;
or arises upon the irrevocable loss or 3. Permanent complete paralysis of two limbs;
impairment of certain portion/s of the physical 4. Brain injury resulting in incurable imbecility or
faculties, despite which the member is able to insanity; and
pursue a gainful occupation. (Sec. 2(u), R.A. No. 5. Such other cases as may be determined by the
8291) GSIS. (Sec. 16(d), R.A. No. 8291)
2024 GOLDEN NOTES
Benefits for PPD NOTE: A member cannot enjoy TTD benefit and sick
leave pay simultaneously.
A member is entitled to cash payment in accordance
with the schedule of disabilities to be prescribed by Benefits for Temporary Disability
GSIS, if he satisfies the given conditions of either (1)
or (2) of Sec. 16(a) of R.A. No. 8291. 1. Member is entitled to 75% of his current daily
compensation for each day or fraction thereof of
Disabilities Deemed as PPD total disability benefit, to start not earlier than
the 4th day but not exceeding 120 days in one
1. Complete and permanent loss of the use of: calendar year after exhausting all his sick leave
a. Any finger credits and collective bargaining agreement
b. Any toe (CBA) sick leave benefits, if any. Provided, that:
c. One arm
d. One hand a. He was in the service at time of disability;
e. One foot or
f. One leg
g. One or both ears b. If separated, he has rendered at least 3
h. Hearing of one or both ears years of service and has paid at least 6
i. Sight of one eye monthly contributions in the year
preceding his disability. (Sec. 18(a), R.A. No.
2. Such other cases as may be determined by the 8291)
GSIS. (Sec. 17(b), R.A. No. 8291)
2. TTD benefits shall in no case be less than P70.00
Suspension of Payment of Benefits a day. (Sec. 18(b), R.A. No. 8291)
1. In case a member is re-employed; NOTE: An application for disability must be filed

2. Member recovers from disability as determined with the GSIS within four (4) years from the date of
by the GSIS; or the occurrence of the contingency.
3. Fails to present himself for medical examination
when required by the GSIS. (Sec. 16(c), R.A. No. Persons Entitled to Survivorship Benefits
8291)
Upon the death of a member or pensioner, his
Instances When Recovery is Precluded beneficiaries shall be entitled to survivorship
benefits. Such benefit shall consist of:
If the permanent disability was due to the following
acts of the subject Ee: 1. The basic survivorship pension which is 50% of
the BMP; and
1. Grave misconduct;
2. Notorious negligence; 2. The dependent children’s pension not
3. Habitual intoxication; or exceeding 50% of the BMP. (Sec. 20, R.A. No.
4. Willful intention to kill himself or another. (Sec. 8291)
15, R.A. No. 8291)
NOTE: The dependent children shall be entitled to
Temporary Total Disability (TTD) the survivorship pension as long as there are
dependent children and, thereafter, the surviving
It accrues or arises when the impaired physical spouse shall receive the basic survivorship pension
and/or mental faculties can be rehabilitated and/or for life or until he or she remarries.
restored to their normal functions. (Sec. 2(t), R.A. No.
8291)
2024 GOLDEN NOTES
Conditions for the Primary Beneficiaries to be 2. In the absence of secondary beneficiaries, the
Entitled to BMP benefits under this paragraph shall be paid to
his legal heir. (Sec. 21(c), R.A. No. 8291)
Upon the death of a member, the primary
beneficiaries shall be entitled to: Payment of Survivorship Pension
1. Survivorship pension – Provided, that the After the end of the guaranteed 30 months, the
deceased: beneficiaries are still entitled to survivorship
benefits. The survivorship pension shall be paid as
a. Was in the service at the time of his follows:
death; or
1. When the dependent spouse is the only
b. If separated from the service, has survivor, he/she shall receive the basic
rendered at least three (3) years of survivorship pension for life or until he or she
service at the time of his death and has remarries;
paid 36 monthly contributions within the
five-year period immediately preceding 2. When only dependent children are the
his death; or has paid a total of at least survivors, they shall be entitled to the basic
180 monthly contributions prior to his survivorship pension for as long as they are
death. qualified, plus the dependent children’s pension
equivalent to 10% of the BMP for every
2. The survivorship pension plus a cash dependent child not exceeding five (5), counted
payment equivalent to 100% of his average from the youngest and without substitution; or
monthly compensation for every year of
service – that the deceased was in the service at 3. When the survivors are the dependent spouse
the time of his death with at least 3 years of and the dependent children, the dependent
service; or spouse shall receive the basic survivorship
pension for life or until he/she remarries, and
3. A cash payment equivalent to 100% of his the dependent children shall receive the
average monthly compensation for each year dependent children’s pension. (Sec. 21(b), R.A.
of service he paid contributions, but not less No. 8291)
than P12,000.00 – that the deceased has
rendered at least three (3) years of service prior Benefits that the Beneficiaries are Entitled to
to his death but does not qualify for the benefits upon the Death of the Pensioner
under item (1) or (2) of this paragraph. (Sec.
21(a), R.A. No. 8291) 1. Upon the death of an old-age pensioner or a
member receiving the monthly income benefit
Secondary Beneficiaries for permanent disability, the qualified
beneficiaries shall be entitled to the
In the absence of primary beneficiaries, the survivorship pension; and
secondary beneficiaries shall be entitled to:
2. When the pensioner dies within the period
1. The cash payment equivalent to 100% of his covered by the lump sum, the survivorship
average monthly compensation for each year of pension shall be paid only after the expiration
service he paid contributions, but not less than of such period. (Sec. 22, R.A. No. 8291)
P12,000.00 – Provided, That the member is in
the service at the time of his death and has at Q: Gary Leseng was employed as a public school
least three (3) years of service; or teacher at the Marinduque High School. On 27
Apr. 1997, a memorandum was issued by the
school principal designating Gary to prepare the
2024 GOLDEN NOTES
model dam project, which will be the official When she learned of Odeck's death, Zhop filed a
entry of the school in the search for Outstanding claim with the GSIS for death benefits. However,
Improvised Secondary Science Equipment for her claim was denied because: (a) when Odeck
Teachers. Gary complied with his superior's was killed, he was on leave; and (b) she was not
instruction and took home the project to enable the dependent spouse of Odeck when he died.
him to finish before the deadline. While working
on the model dam project, he came to contact Resolve with reasons whether GSIS is correct in
with a live wire and was electrocuted. The death denying the claim. (2005 BAR)
certificate showed that he died of cardiac arrest
due to accidental electrocution. A: YES. GSIS is correct in denying the claim. Under
the law, a dependent is one who is a legitimate
Bella (Gary’s common-law wife) and Jobo (his spouse living with the Ee. (Art. 173(i), LC) In the
only son) filed a claim for death benefits with the problem given, Zhop had been abandoned by Odeck
GSIS, which was denied on the ground that Gary’s who was then living already with another woman at
death did not arise out of and in the course of the time of his death. Moreover, Odeck was on leave
employment, and therefore not compensable when he was killed. The 24-hour duty rule does not
because the accident occurred in his house and apply when the policeman is on vacation leave.
not in the school premises. Is Bella entitled to file (Employees’ Compensation Commission v. CA, G.R. No.
a claim for death benefits with the GSIS? Why? 121545, 14 Nov. 1996)
(1991 BAR)
Taking together jurisprudence and the pertinent
A: NO. Bella is not entitled to receive survivorship guidelines of the ECC with respect to claim for death
benefits because she is not considered as a benefits, namely: (a) That the Ee must be at the
beneficiary. Bella is a common-law wife and not a place where his work requires him to be; (b) That
legal dependent spouse. The beneficiaries of a the Ee must have been performing his official
member of the GSIS are entitled to the benefits functions; and (c) That the injury is sustained
arising from the death of said member. Death elsewhere, the Ee must have been executing an
benefits are called survivorship benefits under the order for the Er, it is not difficult to understand then
GSIS Law. why Zhop’s claim was denied by the GSIS. (Tancinco
v. GSIS, G.R. No. 132916, 16 Nov. 2001)
Q: Is the cause of death of Gary (cardiac arrest
due to accidental electrocution in his house) In the present case, Odeck was resting at his house
compensable? Why? when the incident happened; thus, he was not at a
place where his work requires him to be. Although
A: YES. To be compensable under the GSIS Law, the at the time of his death Odeck was performing a
death need not be work-connected. In the case police function, it cannot be said that his death
presented, although the accident happened in Gary’s occurred elsewhere other than the place where he
house, it is still considered work-connected since was supposed to be because he was executing an
Gary only heeded to the memorandum issued by the order for his Er.
school principal and complied with the instruction of
his superior to work on the model dam project. Q: Luis, a PNP officer, was off duty and resting at
home when he heard a scuffle outside his house.
Q: Odeck, a policeman, was on leave for a month. He saw two of his neighbors fighting and he
While resting in their house, he heard two of his rushed out to pacify them. One of the neighbors
neighbors fighting with each other. Odeck shot Luis by mistake, which resulted in Luis'
rushed to the scene intending to pacify the death. Marian, Luis' widow, filed a claim with the
protagonists. However, he was shot to death by GSIS seeking death benefits. The GSIS denied the
one of the protagonists. Zhop, a housemaid, was claim on the ground that the death of Luis was
Odeck's surviving spouse whom he had not service related as he was off duty when the
abandoned for another woman years back. incident happened. Is the GSIS correct? (2015
2024 GOLDEN NOTES
BAR) 2. A member who has been separated from the
service but is entitled to future separation or
A: NO. The GSIS is not correct. Luis, a policeman, just retirement benefits;
like a soldier, is covered by the 24-Hour Duty Rule.
He is deemed on round-the-clock duty unless on 3. A member who is a pensioner (excluding
official leave, in which case his death outside survivorship pensioners); or
performance of official peace-keeping mission will
bar death claim. In this case, Luis was not on official 4. A retiree who is at the time of his retirement
leave and he died in the performance of a was of pensionable age, at least 60 years old,
peacekeeping mission. Therefore, his death is who opted to retire under R.A. No. 1616. (An act
compensable. further amending Sec. 12, C.A. 186, as amended,
by prescribing two other modes of retirement
No Presumption of Sham Marriages and for other purposes).
The present GSIS law does not presume that Classes of Life Insurance Coverage Under the
marriages contracted within three (3) years before GSIS Law
retirement or death of a member are sham
marriages contracted to avail of survivorship 1. Compulsory Life Insurance; and
benefits. The law acknowledges that whether the 2. Optional Life Insurance.
surviving spouse contracted the marriage mainly to
receive survivorship benefits is a matter of evidence. NOTE: The plans may be endowment or ordinary
It no longer prescribes a sweeping classification that life.
unduly prejudices the legitimate surviving spouse
and defeats the purpose for which Congress enacted Compulsory Life Insurance Coverage
the social legislation. (Alcantara, Book II; GSIS v.
Montesclaros, G.R. No. 146494, 14 July 2004) All Ees including the members of the Judiciary and
the Constitutional Commissioners, but excluding
Funeral Benefits Members of the AFP, PNP, BFP and BJMP, shall, under
such terms and conditions as may be promulgated
The funeral benefit is in the amount of P18,000. It is by the GSIS, be compulsorily covered with life
intended to defray the expenses incident to the insurance, which shall automatically take effect as
burial and funeral of the deceased member, follows:
pensioner, or retiree under R.A. No. 660, R.A. No.
1616, P.D. 1146, and R.A. No. 8291. It is payable to the 1. Those employed after the effectivity of this Act,
members of the family of the deceased, in the order their insurance shall take effect on the date of
which they appear: their employment;
1. Legitimate spouse; 2. For those whose insurance will mature after the
2. Legitimate child who spent for the funeral effectivity of this Act, their insurance shall be
services; or deemed renewed on the day following the
3. Any other person who can show maturity or expiry date of their insurance; and
unquestionable proof that he has borne the
funeral expenses of the deceased. 3. For those without any life insurance as of the
effectivity of this Act, their insurance shall take
Payment of Funeral Benefits effect following said effectivity. (Sec. 24, R.A. No.
8291)
Funeral benefits will be paid upon the death of:
1. An active member;
2024 GOLDEN NOTES
Optional Life Insurance Coverage XPNs: The members of the following shall have life
insurance only:
1. A member may at any time apply for himself
and/or his dependents an insurance and/or 1. The Judiciary; and
pre-need coverage embracing: 2. The Constitutional Commissions. (Ibid.)
a. Life; Compulsory Coverage of Life Insurance

b. Memorial plans;
c. Health; GR: All Ees receiving compensation who have not
d. Education; reached the compulsory retirement age,
e. Hospitalization; or irrespective of employment status.
f. Other plans as maybe designed by GSIS
XPNs: All members of the Armed Forces of the
2. Any Er may apply for group insurance coverage Philippines (AFP) and the Philippine National Police
for its Ees. (Sec. 26, R.A. No. 8291) (PNP).
Prescriptive Period to Claim the Benefits NOTE: An Ee who is already beyond the mandatory
retirement age of 65 shall be compulsorily covered
GR: Four (4) years from the date of contingency. and be required to pay both the life and retirement
premiums under the following situations:
XPNs: Life insurance and retirement (Sec. 28, R.A.
No. 8291) 1. An elective official who, at the time of election
to public office is below 65 years of age will be
Coverage of GSIS more than 65 at the end of his term of office,
including the period/s of his re-election to
The GSIS covers all Ees irrespective of employment public office thereafter without interruption.
status, who are employed with:
2. Appointive officials who, before reaching the
1. The national government, its political mandatory age of 65, are appointed to
subdivisions, branches, agencies, or government position by the President of the
instrumentalities; Republic of the Philippines and shall remain in
government service at an age beyond 65.
2. GOCCs;
3. Contractual Ees, including casuals and other
3. Government financial institutions with original Ees with an Ee-government agency relationship
charters; are also compulsorily covered, provided they
are receiving fixed monthly compensation and
4. Constitutional commissions; and rendering the required number of working
hours for the month. (Chan, 2014)
5. The judiciary.
Classification of Members for the Purpose of
Coverage of Life Insurance, Retirement and Benefit Entitlement
Other Social Security Protection
1. Active Members
GR: All members of the GSIS shall have life
insurance, retirement, and all other social security a. Still in the service and are paying
protections such as disability, survivorship, integrated premiums; covered for the
separation, and unemployment benefits. (Sec. 3, R.A. entire package benefits and privileges
No. 8291) being extended by GSIS.
2024 GOLDEN NOTES
2. Policyholders 2. Contractual Ees who have no Er-Ee relationship
with the agencies they serve;
a. Covered for life insurance only;
b. Can avail of policy loan privilege only; 3. Uniformed members of the AFP, the Bureau of
and Fire Protection, and the Bureau of Jail
c. May also apply for housing loans. Management and Penology (BJMP) whose
d. Judiciary and Constitutional coverage by the GSIS has ceased effective June
Commissions 24, 1997; and
3. Separated Members 4. Uniformed members of the PNP whose

coverage by the GSIS has ceased effective 01
a. Former active members who have been Feb. 1996. (Sec. 2.4, IRR of R. A. No. 8291)
separated from the service;
2. DEPENDENTS AND BENEFICIARIES
b. Still covered by the GSIS under the
principle of “once a member, always a
Dependents
member”;
1. Legitimate spouse dependent for support upon

c. Entitled to receive future benefits
under P.D. 1146 in the event of the member or pensioner;
compensable contingency such as old
2. Unmarried and not gainfully employed
age (attainment of age 60 years),
disability, survivorship and death; and legitimate, legitimated, legally adopted, or
illegitimate child, or over the age of majority but
incapacitated or incapable of self-support due
d. Not entitled to any loan privilege.
to mental or physical defect acquired prior to
4. Retired Members age of majority; and
a. Former active members who have 3. Parents dependent upon the member for
support. (Sec. 2(f), R.A. No. 8291)
retired from the service and are
already enjoying the corresponding
retirement benefits applied for; and Beneficiaries
1. Primary beneficiaries
b. Not entitled to any loan privilege,
except stock purchase loan. (Sec. 2.2,
a. Legal dependent spouse, until he/she
Rule II, IRR of R.A. No. 8291)
remarries; and
Exclusions b. Dependent children. (Sec. 2(g), R.A. No.
8291)
The following are not considered members of the
GSIS for purposes of this Act: 2. Secondary beneficiaries
1. Ees who have separate retirement schemes a. Dependent parents; and

under special laws and are therefore covered by b. Legitimate descendants, subject to
restrictions on dependent children. (Sec.
their respective retirement laws, such as the
members of the Judiciary, Constitutional 2(h), R.A. No. 8291)
Commissions, and other similarly situated
government officials;
2024 GOLDEN NOTES
retirement benefits. In the event the Ees transfer
from the private sector to the public sector, or vice-
C. LIMITED PORTABILITY LAW
(R.A. No. 7699) versa, their creditable employment services and
contributions are carried over and transferred as
well.
Purpose
Totalization
R.A. No. 7699 was enacted to enable those from the
It refers to the process of adding up the periods of
private sector who transfer to the government
service or from the government service to the private creditable services or contributions under each of
sector to combine their years of service and the Systems, SSS or GSIS, for the purpose of eligibility
and computation of benefits. (Sec. 2(e), R.A. No. 7699)
contributions which have been credited with the SSS
or GSIS, as the case may be, to satisfy the required All services rendered or contributions paid by a
number of years of service for entitlement to the member personally or paid by the Ers to either
System shall be considered in the computation in the
benefits under the applicable laws. (Chan, 2019)
computation of benefits, which may be claimed from
either or both Systems. (Sec. 2, Rule V, IRR, R.A. No.
Coverage
7699)
Applies to all worker-members of the GSIS and/or
NOTE: The amount of benefits to be paid by one
SSS who transfer from the public sector to private
System shall be in proportion to the services
sector or vice-versa, or who wish to retain their
membership in both Systems. (Sec. 1, Rule 1, IRR, R.A rendered/periods of contribution made to that
System. (Sec. 2, Rule V, IRR, R.A. No. 7699)
No. 7699)
Portability Totalization Shall Apply in the Following

Instances:
It refers to the transfer of funds for the account and
benefit of a worker who transfers from one system to 1. If a worker is not qualified for any benefits from
both System;
the other. (Sec. 2(b), R.A. No. 7699)
Limited Portability Rule 2. If a worker in the public sector is not qualified

for any benefits in the GSIS; or
A covered worker who transfers employment from
one sector to another or is employed on both 3. If a worker in the private sector is not qualified
for any benefits from the SSS.
sectors, shall have creditable services or
contributions on both Systems credited to his
NOTE: For purposes of computation of benefits,
service or contribution record in each of the
totalization shall apply to all cases so that the
Systems and shall be totalized for purposes of old-
age, disability, survivorship, and other benefits in contributions made by the worker-member in both
Systems shall provide maximum benefits which
either or both Systems. (Sec. 3, R.A. No. 7699)
otherwise will not be available. In no case shall the
All contributions paid by such member personally, contribution be lost or forfeited. (Sec 3, Rule V, IRR,
R.A. N. 7699)
and those that were paid by his Ers to both Systems
shall be considered in the processing of benefits,
which he can claim from either or both Systems. Overlapping periods of creditable services in both
Systems shall be credited only one for purposes of
(Sec. 4, R.A. No. 7699)
totalization. (Sec. 7, Rule V, IRR, R.A. 7699)
NOTE: This is advantageous to the SSS and GSIS
If after the totalization, the worker-member still
members for purposes of death, disability or
does not qualify for any benefit, the member will
2024 GOLDEN NOTES
then get whatever benefits correspond to his/her member shall claim said benefit from the
contributions in either or both Systems. (Sec. 4, Rule System where he was last a member; and
V, IRR, R.A. No. 7699) f. Such other benefits common to both
System that may be availed of through
Creditable Services totalization. (Sec. 1(j), Rule III, IRR, R.A. No.
7699)
1. For the public sector, the following shall be
considered creditable services: The System or Systems responsible for the payment
of money benefits due to a covered worker shall
a. All previous services rendered by an release the same within 15 working days from
official/Ee pursuant to an appointment receipt of the claim, subject to the submission of the
whether permanent, provisional or required documents and availability if the complete
temporary; Ee/Er records in the System. (Sec. 2, Rule IV, IRR, R.A.
No. 7699)
b. All previous services rendered by an
official/Ee pursuant to a duly approved Q: Luisito has been working with Lima Land for
appointment to a position in the Civil 20 years. Wanting to work in the public sector,
Service with compensation or salary; Luisito applied for and was offered a job at
Livecor. Before accepting the offer, he wanted to
c. The period during which an official/Ee was consult you whether the payments that he and
on authorized sick leave of absence without Lima Land had made to the Social Security
exceeding one year; System (SSS) can be transferred or credited to
the Government Service Insurance System
d. The period during which an official or Ee (GSIS). What would you advise? (2014 BAR)
was out of the service as a result of illegal
termination of his service as finally decided A: YES. Under R.A. No. 7699, otherwise known as
by the proper authorities; and the Limited Portability Law, one may combine his
years of service in the private sector represented by
e. All previous services with compensation or his contributions to the SSS with his government
salary rendered by elective officials. (Sec. service and contributions to the GSIS. The
1(f), Rule III, IRR, R.A. No. 7699) contributions shall be totalized for purposes of old-
age, disability, survivorship and other benefits in
2. For private sector, the periods of contribution case the covered member does not qualify for such
shall refer to the periods during which a person benefits in either or both Systems without
renders services for an Er with compensation or totalization.
salary and during which contributions were
paid to SSS. (Sec. 1(g), Rule III, IRR R.A. No. 7699)
D. DISABILITY AND DEATH BENEFITS; LABOR
NOTE: A self-employed person shall be considered CODE AND CIVIL CODE
an Ee and Er at the same time. (Sec. 1(g), Rule III, IRR,
R. A. No. 7699)
Employees’ Compensation Program (ECP)
The benefits covered under the law are the
following:
The State shall promote and develop a tax-exempt
ECP whereby the Ees and their dependents, in the
a. Old-age benefit;
event of work-connected disability or death, may
b. Disability benefit; promptly secure adequate income benefit and
c. Survivorship benefit; medical related benefits. (Art. 172, LC)
d. Sickness benefit;
e. Medicare benefit, provided that the
2024 GOLDEN NOTES
The Employees’ Compensation Program (ECP) is a NOTE: An accident may be considered to have risen
government program that provides a package of out of and in the course of employment when it
benefits to all workers and/or their beneficiaries in happened:
the event of a work-related sickness, injury, disability
or death. (Handbook Workers’ Statutory Monetary 1. At the workplace;
Benefits, 2023) 2. While performing official functions;
3. Outside of the workplace, but performing an
Compensable Disease order/ instruction of the employer;
4. When going to or coming home from work;
A sickness is considered compensable if the same is while ministering to personal comfort;
included in the ECC’s List of Occupational Diseases 5. While in a company shuttle bus; or
and the conditions for its compensability are met. 6. During a company sponsored activity.
(Handbook Workers’ Statutory Monetary
Increased – Risk Theory Benefits, 2023)
If the conditions were not satisfied and/or the No compensation will be allowed to an employee or
claimed ailment is not included in the list, proof must the dependents if the injury, sickness, disability or
be shown that the risk of contracting the disease is death is due to:
increased by the working conditions. (Handbook
Workers’ Statutory Monetary Benefits, 2023) 1. Drunkenness;
2. Willful intention to injure or kill himself or
NOTE: The conditions for the compensability of another; or
COVID-19 are the following: 3. Notorious negligence. (Handbook Workers’
Statutory Monetary Benefits, 2023)
1. There must be a direct connection between the
offending agent or event and the worker based Going and Coming Rule
on epidemiologic criteria and occupational risk;
GR: In the absence of special circumstances, an Ee
2. The tasks assigned to the worker would require injured in, going to, or coming from his place of work
frequent face-to-face and close proximity is excluded from the benefits of workmen's
interactions with the public or with confirmed compensation acts. (Iloilo Dock & Engineering Co. v.
cases for healthcare workers; Workmen's Compensation Commission, G.R. No. L-
26341 27 Nov. 1968, 135 PHIL 95-122)
3. Transmission occurred in the workplace; or
XPNs:
4. Transmission occurred while commuting to and
from work. (Handbook Workers’ Statutory 1. Where the Ee is proceeding to or from his work
Monetary Benefits, 2023) on the premises of his Er;
Compensable Injury 2. Where the Ee is about to enter or about to leave

the premises of his Er by way of the exclusive or
An injury is considered compensable when the same customary means of ingress and egress also
takes place within the period of employment, at a known as the Proximity Rule;
place where the employee may reasonably be in the
performance of his duties, and while he is fulfilling 3. Where the Ee is charged, while on his way to or
those duties or engaged in doing something from his place of employment or at his home, or
incidental thereto, or where he is engaged in the during his employment, with some duty or
furtherance of the employer’s business. special errand connected with his employment;
and
2024 GOLDEN NOTES
4. Where the Ee, as an incident of the employment, (De La Rea v. Employees' Compensation Commission,
provides the means of transportation to and G.R. No. L-66129, 17 Jan. 1986)
from the place of employment. (Iloilo Dock &
Engineering Co. v. Workmen's Compensation State Insurance Fund
Commission, G.R. No. L-26341, 27 Nov. 1968)
The State Insurance Fund (SIF) is built up by the
Q: Rosa was granted vacation leave by her contributions of Ers based on the salaries of their
employer to spend three weeks in Africa with Ees as provided under the LC. (Chan, 2019)
her family. Prior to her departure, the General
Manager of the company requested her to visit It is exclusively used for payment of the Ee’s
the plant of a client of the company in Zimbabwe compensation benefits and no amount thereof is
in order to derive best manufacturing practices authorized to be used for any other purpose. (Art.
useful to the company. She accepted the request 185, LC)
because the errand would be important to the
company and Zimbabwe was anyway in her Prohibition Against Er’s Deprivation
itinerary. It appears that she contracted a
serious disease during the trip. Upon her return, No contract, regulation or device whatsoever shall
she filed a claim for compensation, insisting that operate to deprive the employee or his dependents
she had contracted the disease while serving the of any part of the income benefits, and medical or
interest of her employer. related services, except as otherwise provided.
Under the Labor Code, the sickness or death of NOTE: Existing medical services being provided by
an employee, to be compensable, must have the employer shall be maintained and continued to
resulted from an illness either definitely be enjoyed by his employees. (Sec. 5, Rule VII,
accepted as an occupational disease by the Amended Rules on EC)
Employees' Compensation Commission, or
caused by employment subject to proof that the Beneficiaries under the Labor Code
risk of contracting the same is increased by
working conditions. 1. Primary Beneficiaries
Is the serious disease Rosa contracted during a. The legitimate spouse until he remarries;
her trip to Africa compensable? Explain your and
answer. (2017 BAR)
b. Legitimate, legitimated, legally adopted or
A: NO. For sickness and the resulting disability to be acknowledged natural children, who are
compensable, the sickness must be the result of an unmarried not gainfully employed, not over
occupational disease listed under Annex A of the 21 years of age, or over 21 years of age
Amended Rules on Employees’ Compensation with provided that he is incapacitated and
the condition set therein satisfied; otherwise, proof incapable of self-support due to physical or
must be shown that the risk of contracting the mental defect, which is congenital or
disease is increased by the working condition. The acquired during minority.
burden of proof is upon Rosa. No proof was
presented by Rosa to substantiate the foregoing. NOTE: A dependent acknowledged natural child
Moreover, it is required that the sickness and the shall be considered as a primary beneficiary only
resulting injury must have arisen out of or in the when there are no other dependent children who are
course of employment. In the present case, Rosa qualified and eligible for monthly income benefit;
contracted the disease while on vacation leave. provided finally, that if there are two or more
Consequently, the disease contracted by her in acknowledged natural children, they shall be
Africa during her vacation leave is not compensable. counted from the youngest and without substitution,
but not exceeding five (5). (Sec. 1(b), Rule XV,
2024 GOLDEN NOTES
Amended Rules on Ees’ Compensation (EC))
The purpose of the law in providing benefits to the
2. Secondary beneficiaries injured or sick Ee during temporary disability is to
compensate him for what he might have earned
a. The legitimate parents wholly dependent during the period while his injury or sickness is
upon the Ee for regular support; and being medically treated. (Chan, 2019)
b. The legitimate descendants and illegitimate Kinds of Disability

children who are unmarried, not gainfully
employed, and not over 21 years of age, or There are three (3) kinds of disability benefits under
over 21 years of age provided that he is the Labor Code:
incapacitated and incapable of self- support
due to physical or mental defect which is 1. Temporary Total Disability (Art. 197, LC)
congenital or acquired during minority. 2. Permanent Total Disability (Art. 198, LC)
(Sec. 1(c), Rule XV, Amended Rules on EC) 3. Permanent Partial Disability (Art. 199, LC)
Prescriptive Period NOTE: The compensation for the disabilities is not

mutually exclusive. For instance, recovery of
No claim for compensation shall be given due course compensation for temporary total disability or
unless said claim is filed with the System within permanent partial disability shall not preclude
three (3) years from the time the cause of action recovery for permanent total disability. (Chan, 2019)
accrued. (Sec. 6(a), Rule VII, Amended Rules on EC)
Temporary Total Disability (TTD)
Reckoning Date of the Three-Year Prescriptive
Period A disability resulting from injury or sickness that
prevents the Ee from performing his work for a
1. Sickness – from the time the Ee lost his earning continuous period not exceeding 120 days, or where
capacity. the injury or sickness still requires medical
attendance beyond 120 days but not to exceed 240
NOTE: The three (3) years have to be counted days from the onset of disability. (Handbook Workers’
from the time the Ee lost his earning capacity, Statutory Monetary Benefits, 2022; Sec. 2(a), Rule VII,
not from the time the illness was discovered. Amended Rules on EC)
(ECC v. Sanico, G.R. No. 134028, 17 Dec. 1999)
Conditions for Entitlement
2. Injury – from the time it was sustained.
An Ee shall be entitled to an income benefit for
3. Death – from the time of death of the covered Ee. temporary total disability if all the following
(Sec. 6(a), Rule VII, Amended Rules on EC) conditions are satisfied:
Disability Benefits 1. He has been duly reported to the System;

2. He sustains the temporary total disability as a
Disability refers to the loss or impairment of a result of the injury or sickness; and
physical or mental function resulting from injury or 3. The System has been duly notified of the injury
sickness. (Art. 173(n), LC) or sickness which caused his disability.
Otherwise known as “loss of income benefits,” it is NOTE: His Er shall be liable for the benefit if such
the disability, or the incapacity to work, which is illness or injury occurred before the Ee is duly
being compensated and not the illness or the injury. reported for coverage to the System. (Sec. 1, Rule X,
(Handbook Workers’ Statutory Monetary Benefits, Amended Rules on EC)
2022)
2024 GOLDEN NOTES
Period of Entitlement Permanent Total disability means disablement of an
Ee to earn wages in the same kind of work, or work
The income benefit equivalent to 90% of his average of similar nature that he was trained for or
daily salary credit shall be paid beginning on the first accustomed to perform, or any kind of work which a
day of such disability. If caused by an injury or person of his mentality and attainment could do.
sickness, it shall not be paid longer than 120 (Philippine Transmarine Carriers, Inc. v. NLRC, G.R.
consecutive days except when such injury or No. 123891, 28 Feb. 2001)
sickness still requires medical attendance beyond
120 days but not to exceed 240 days from onset of NOTE: In disability compensation, it is not the injury
disability, in which case, benefit shall be paid. per se which is compensated but the incapacity to
work. (Bejerano v. ECC, G.R. No. 84777, 30 Jan. 1992)
However, the System may declare the total and
permanent status at any time after 120 days of Conditions for Entitlement
continuous temporary total disability as may be
warranted by the degree of actual loss or An Ee is entitled to an income benefit for permanent
impairment of physical or mental functions as total disability if all of the following conditions are
determined by the System. (Sec. 2(a), Rule X, satisfied:
Amended Rules on EC)
1. He has been duly reported to the System;
NOTE: An Ee shall submit to the System a monthly
medical report on his disability certified by his 2. He sustains the permanent total disability as a
attending physician, otherwise, his benefit shall be result of the injury or sickness; and
suspended until such time that he complies with
this requirement. (Sec. 5, Rule IV, Amended Rules on 3. The System has been duly notified of the injury
EC) or sickness which caused his disability.
Effect of Relapse of Illness NOTE: His Er shall be liable for the benefit if such
illness or injury occurred before the Ee is duly
After the Ee has fully recovered from an illness as reported for coverage to the System. (Rule XI,
duly certified to by the attending physician, the Amended Rules on EC)
period covered by any relapse he suffers, or
recurrence of his illness, which results in disability Total Disabilities Deemed Permanent
and is determined to be compensable, shall be
considered independent of, and separate from, the The following total disabilities shall be considered
period covered by the original disability in the permanent:
computation of his income benefit for temporary
total disability. (Sec. 2(b), Rule X, Amended Rules on 1. Temporary total disability lasting continuously
EC) for more than 120 days, except as otherwise
provided for under the rules on temporary total
Permanent Total Disability (PTD) disability;
A disability resulting from injury or sickness that 2. Complete loss of sight of both eyes;
prevents the Ee from performing any gainful
occupation for a continuous period exceeding 120 3. Loss of two limbs at or above the ankle or wrist;
days, except when the disability not exceeding 240
days from the onset of disability is declared as 4. Permanent complete paralysis of two limbs;
temporary total disability. (Sec. 2(b), Rule VII,
Amended Rules on EC) 5. Brain injury resulting in incurable imbecility and
insanity; and
2024 GOLDEN NOTES
6. Such cases as determine by the System and Permanent Partial Disability (PPD)
approved by the Commission. (Sec. 1, Rule XI,
Amended Rules on EC) A disability resulting from injury or sickness in
which the Ee suffers a permanent partial loss of the
Period of Entitlement use of any part of his body. (Sec. 2(c), Rule VII,
Amended Rules on EC)
The full monthly income benefit shall be paid for all
compensable months of disability. (Sec. 2(a), Rule XI, NOTE: An Ee’s disability may not manifest fully at
Amended Rules on EC) one precise moment in time but rather over a period
of time. It is possible that an injury which at first
After the benefit under the EC shall have ceased as considered as temporary may later become
provided under the preceding paragraph, and if the permanent, or who suffers a partial disability
Ee is otherwise qualified for benefit for the same becomes totally and permanently disabled for the
disability under another law administered by the same cause. (GSIS v. CA, G.R. No. 117572, 29 Jan. 1998)
System, he shall be paid a benefit in accordance with
the provisions of that law. This paragraph applies to Conditions for Entitlement
contingencies which occurred prior 01 May 1978.
(Sec. 2(b), Rule XI, Amended Rules on EC) An Ee is entitled to an income benefit for permanent
partial disability if all of the following conditions are
NOTE: Except as otherwise provided for in other satisfied:
laws, decrees, orders or letter of instructions, the
monthly income benefit shall be guaranteed for five 1. He has been duly reported to the System;
(5) years and shall be suspended under any of the
following conditions: 2. He sustains the permanent partial disability as a
result of the injury or sickness; and
1. Failure to present himself for examination at
least once a year upon notice by the System; 3. The System has been duly notified of the injury
or sickness which caused his disability.
2. Failure to submit a quarterly medical report
certified by his attending physician; NOTE: His Er shall be liable for the benefit if such
3. Complete or full recovery from his permanent reported for coverage to the System.
disability; or
An Ee entitled to income benefits shall continue to
4. Upon being gainfully employed. (Sec. 2(c), Rule receive benefits thereunder even if he is gainfully
XI, Amended Rules on EC) employed and receiving his wages or salary. (Sec.
1(b), Rule XII, Amended Rules on EC)
Benefit for Dependent Children
Each dependent child, not exceeding five (5),

counted from the youngest and without
substitution, shall be entitled to ten percent of the
monthly income benefit of the Ee. This rule,
however, shall not apply to causes of action which
accrued before 1 May 1978. (Sec. 4, Rule XI, Amended
Rules on EC)
2024 GOLDEN NOTES
Period of Entitlement 5. Loss of more than one joint shall be considered
a loss of the whole finger or toe;
The monthly income benefit shall be paid beginning
on the first month of such disability, but no longer 6. Loss of only the first joint shall be considered a
than the designated number of months in the loss of one-half of the whole finger or toe; and
following schedule: (Art. 199, LC)
7. Other permanent partial disabilities shall be
COMPLETE AND NUMBER OF determined by the Medical Officer of the
PERMANENT LOSS OF MONTHS System.
THE USE OF
One thumb 10 Death Benefits
One index finger 8
One middle finger 6 Compensable death refers to death which is the
One ring finger 5 result of a work-related injury or sickness. (Chan,
One little finger 3 2019)
One big toe 6
Any toe 3 Income benefits received by the beneficiaries of the
One hand 39 deceased Ee whose death was caused by a work-
One arm 50 related injury or sickness.
One foot 31
Said income benefits shall be paid at the beginning of
One leg 46
the month of death of the member and will continue
One ear 10
as long as they are entitled thereto. (Handbook
Both ears 20
Workers’ Statutory Monetary Benefits, 2023)
Hearing of one ear 10
Hearing of both ears 50
Conditions for Entitlement
Sight of one eye 25
The beneficiaries of a deceased Ee shall be entitled
A worker who sustained work-related injuries that to an income benefit if all of the following conditions
resulted in functional loss and/or physical loss of any are satisfied:
part of this body shall be granted Temporary Total
Disability (TTD) and Permanent Partial Disability 1. The Ee has been duly reported to the System;
(PPD) benefits successively. Any earlier
compensation for TTD that may have been paid to an 2. He died as a result of an injury or sickness; and
injured worker shall not be deducted from the PPD
benefit that may be later granted to him. 3. The System has been duly notified of his death,
as well as the injury or sickness which caused his
NOTE: Under Sec. 2(b), Art. XII, Amended Rules on EC: death.
1. Loss of a wrist shall be considered a loss of a
hand; NOTE: His Er shall be liable for the benefit if such
2. Loss of an elbow shall be considered a loss of reported for coverage to the System.
the arm;
If the Ee has been receiving monthly income benefit
3. Loss of an ankle shall be considered a loss of the for PTD at the time of his death, the surviving spouse
foot; must show that the marriage has been validly
subsisting at the time of his disability. In addition, the
4. Loss of a knee shall be considered a loss of the cause of death must be a complication or natural
leg; consequence of the compensated PTD. (Sec. 1, Art.
XIII, Amended Rules on EC)
2024 GOLDEN NOTES
Period of Entitlement equally redistributed to the remaining wives;
and
1. For Primary Beneficiaries
3. The qualified dependent children not exceeding
a. The monthly income benefit shall be paid 5 beginning with the youngest and without
beginning at the month of death and shall substitution, who are entitled to dependent’s
continue to be paid as long as the pension, shall be counted from among the
beneficiaries are entitled thereto. With collective number of children of the wives of the
respect to the surviving legitimate spouse, Muslim and not counted from the children of
the qualification is that he/she has not each wife of the Muslim. (Board Resolution No.
remarried. For dependent children, the 14-07-34, 29 July 2014)
qualifications are that they must be:
Presumptive Death
i. Unmarried;
ii. Not gainfully employed; and Under ECC Circular No. 15-01-20, 20 Jan. 2015, the
iii. Over 21 years of age provided he/she is following are the series of events which should be
incapable of self-support due to a considered in the grant of EC benefits:
physical or mental defect which is
congenital or acquired during minority. 1. The word “missing” refers to unknown fate or
there is no trace of whereabouts of a worker, Ee,
b. The monthly income benefit shall be and uniformed personnel while he/she is in the
guaranteed for five (5) years which in no performance of his/her duties during the
case shall be less than P15,000.00. calamities or fatal events;
Thereafter, the beneficiaries shall be paid
the monthly income benefit for as long as 2. The worker, Ee, or uniformed personnel was not
they are entitled thereto. (Sec. 2(A), Rule XIII, seen or heard from after the lapse of four years
Amended Rules on EC) from the occurrence of the incident;
2. For Secondary Beneficiaries: 3. The disappearance of the worker, Ee, or

uniformed personnel gives rise to presumption
The income benefit shall be 60 times the of death; and
monthly income benefit of a primary beneficiary,
which in no case be less than P15,000.00, which 4. The death of the worker, Ee, or uniformed
shall likewise be paid in monthly pension. (Sec. personnel arises out of and in the course of
2(B), Rule XIII, Amended Rules on EC) employment.
NOTE: If the deceased has no beneficiaries at the Period of Filing in Case of Presumptive Death
time of his death, the death benefit shall accrue to the
Ees Compensation Fund. (Sec. 2(C), Rule XV, Amended The beneficiaries may file their claims for EC death
Rules on EC) with funeral benefits within the three-year
prescriptive period from the time the missing
In relation thereto, the following are the guidelines person has been presumed dead after the lapse of
on the grant of EC death benefits to qualified wives four years from the occurrence of the incident. (Sec.
and children beneficiaries of Muslims: 6(b), Rule VII, Amended Rules on EC)
1. The basic monthly pension shall be divided

equally among the surviving wives;
2. Upon the death or remarriage of any of the

wives, her basic monthly pension shall be
2024 GOLDEN NOTES
32-A of this Contract with the conditions set therein
satisfied while work-related injury is any injury
E. CLAIMS OF SEAFARERS; 2010 STANDARD
TERMS AND CONDITIONS GOVERNING THE arising out of and in the course of employment.
OVERSEAS EMPLOYMENT OF FILIPINO (2010 POEA-SEC)
SEAFARERS ON-BOARD OCEAN-GOING SHIPS
(Secs. 20, 32 and 32-A) Kinds of Disability
1. Permanent disability is the inability of a

For an occupational disease and the resulting worker to perform his job for more than 120
disability or death to be compensable, all of the days, regardless of whether or not he loses the
following conditions must be satisfied: use of any part of his body.
1. The seafarer's work must involve the risks 2. Total disability means the disablement of an Ee
described in Sec. 32-A of the POEA-SEC; to earn wages in the same kind of work of
similar nature that he was trained for,
2. The disease was contracted as a result of the accustomed to perform, or any kind of work
seafarer's exposure to the described risks; which a person of his mentality and attainments
could do.
3. The disease was contracted within a period of
exposure and under such other factors A total disability does not require that the Ee be
necessary to contract it; and completely disabled, or totally paralyzed. What
is necessary is that the injury must be such that
4. There was no notorious negligence on the part the Ee cannot pursue his or her usual work and
of the seafarer. (Romana v. Magsaysay Maritime earn from it. A total disability is considered
Corporation, G.R. No. 192442, 09 Aug. 2017) permanent if it lasts continuously for more than
120 days.
Burden of Proof in Disability Claims on the
Seafarer Liabilities of the Employer When the Seafarer
Suffers Work-Related Injury or Illness During
The seafarer must still prove his entitlement to the Term of His or Her Contract
disability benefits by substantial evidence of his
illness' work-relatedness and that the ailment was 1. The Er shall continue to pay the seafarer his
acquired during the term of his contract. wages during the time he is on board the ship;
He must show that he experienced health problems 2. If the injury or illness requires medical and/or
while at sea, the circumstances under which he dental treatment in a foreign port, the Er shall be
developed the illness, as well as the symptoms liable for the full cost of such medical, serious
associated with it. (Chan, 2019). dental, surgical and hospital treatment as well as
board and lodging until the seafarer is declared
Elements of a Compensable Injury fit to work or to be repatriated.
1. The injury or illness is work-related; and NOTE: However, if after repatriation, the
2. It occurred during the term of the seafarer’s seafarer still requires medical attention arising
contract. (Toquero v. Crossworld Marine from said injury or illness, he shall be so
Services, G.R. No. 213482, 26 June 2019) provided at cost to the Er until such time he is
declared fit or the degree of his disability has
Principle of Work-Relatedness been established by the company-designated
physician;
Work-related illness pertains to any sickness as a
result of an occupational disease listed under Sec.
2024 GOLDEN NOTES
3. The seafarer shall also receive sickness
allowance from his Er in an amount equivalent to 3. The seafarer shall submit himself to a post-
his basic wage computed from the time he signed employment medical examination by a
off until he is declared fit to work or the degree company-designated physician within three
of disability has been assessed by the company- working days upon his return.
designated physician.
XPN: When he is physically incapacitated to do
NOTE: so, in which case, a written notice to the agency
a. The period within which the seafarer within the same period is deemed as
shall be entitled to his sickness compliance.
allowance shall not exceed 120 days.
NOTE: In the course of the treatment, the seafarer
b. Payment of the sickness allowance shall shall also report regularly to the company-
be made on a regular basis, but not less designated physician specifically on the dates as
than once a month. prescribed by the company-designated physician
and agreed to by the seafarer. (Sec. 20-A(3), 2010
4. The seafarer shall be entitled to reimbursement POEA-SEC)
of the cost of medicines prescribed by the
company-designated physician; Effect of Failure to Comply with the Mandatory
Reporting Requirement
5. In case a seafarer is disembarked from the ship
for medical reasons, the Er shall bear the full cost Failure of the seafarer to comply with the
of repatriation in the event the seafarer is mandatory reporting requirement upon return shall
declared: result in the forfeiture of his entitlement to
disability compensation. (Sec. 20-A(3), 2010 POEA-
a. Fit for repatriation; or SEC)
b. Fit to work but the employer is unable to Q: L was hired as an assistant cook by C.F. Sharp.
find employment for the seafarer on Before boarding the vessel, L underwent a Pre-
board his former ship or another ship of Employment Medical Examination (PEME).
the employer; and When asked whether L had a previous medical
condition, including ear trouble and deafness, L
6. In case of permanent total or partial disability of ticked the box. Even so, he was found fit to work.
the seafarer caused by either injury or illness, the On one occasion, L suffered an injury, leading to
seafarer shall be compensated in accordance lower back pain. On another occasion, L went
with the schedule of benefits enumerated in Sec. off-balance and fell face down on the floor. L was
32 of the POEA-Standard Employment Contract. brought to a clinic due to a severe lower back
(Sec. 20(a) 2010 POEA-SEC) pain. Eventually, L was repatriated to the
Philippines. After undergoing lumbar spine
In Case Treatment of the Seafarer is on an Out- magnetic resonance imaging (MRI) and physical
Patient Basis as Determined by the Company- therapies, the attending physician issued a
Designated Physician medical certificate stating, among others, that
he had Neuromyelitis optica.
1. The company shall approve the appropriate
mode of transportation and accommodation; L then sought the medical opinion of another
physician who found that he was unfit for duty
2. The reasonable cost of actual traveling expenses as a seafarer in whatever capacity due to
and/or accommodation shall be paid subject to herniated disc at L5-S1, thus L’s complaint for
liquidation and submission of official receipts permanent total disability benefits.
and/or proof of expenses; and
2024 GOLDEN NOTES
C.F. Sharp submits that L is disqualified from fetched by his Er, he just went straight home to
claiming the same because he materially Bataan. His wife informed Grieg PH that he could
concealed a pre-existing medical condition in not personally report to the office due to his
his PEME. They claimed that L was earlier medical condition. Caraan got himself examined,
diagnosed with acute otitis media and had where it was revealed that there is a mass in his
instituted a claim for disability benefits with his left kidney. Upon transfer to the National Kidney
former employee. Is L entitled to his claim? and Transplant Institute (NKTI), his left kidney
was surgically removed, where it was confirmed
A: YES. L’s acute otitis media does not fall under any that he had renal cell carcinoma. Is Caraan
of the conditions constituting a pre-existing illness. entitled to disability benefits?
Under the definition of terms of the 2010 POEA-SEC,
an illness shall be considered as pre-existing if prior A: YES. Under Sec. 20(B) of the POEA-SEC, these are
to the processing of the POEA contract, any of the the requirements for compensability: (1) the
following conditions are present: (a) The advice of a seafarer must have submitted to a mandatory Pre-
medical doctor on treatment was given for such Employment Medical Examination (PEME) within
continuing illness or condition; or (b) The seafarer three working days upon return; (2) the injury must
had been diagnosed and has knowledge of such an have existed during the term of the seafarer's
illness or condition but failed to disclose the same employment contract; and (3) the injury must be
during pre-employment medical examination work-related.
(PEME), and such cannot be diagnosed during the
PEME. When he arrived in the Philippines, Caraan was
already ill and no longer in good physical condition
Here, the first condition was not applicable because to go back to Manila for treatment. Immediately,
it presupposes that the seafarer is advised to petitioner was subjected to a series of laboratory
undergo treatment for a continuing illness or tests to properly diagnose his ailment.
condition. The specific details on L’s ear illness,
whether it was already healed or needed further The treatment by the health card-accredited doctors
treatment, are unclear. Due to insufficient evidence, served the equivalent post-employment medical
it was doubtful whether L still had acute otitis media examination to show that petitioner's illness existed
with perforated tympanic membrane when he during his employment. It is undisputed that Caraan
underwent the PEME. The second condition was had been with Grieg PH since 2006. Caraan’s illness,
also not applicable. The phrase "and such cannot be renal cell carcinoma, could not have occurred
diagnosed during the PEME" excluded L’s acute overnight after repatriation. In the case of
otitis media as a pre-existing illness. Further, Sec. petitioner, his kidney cancer gradually progressed
20(E) of the 2010 POEA-SEC is likewise inapplicable while he was employed with Grieg PH until it
because L’s prior ear illness is unrelated to his manifested when petitioner complained of pain in
present medical conditions. (Mutia v. C.F. Sharp urinating and discharging blood in his urine. Hence,
Crew Mgt., Inc., G.R. No. 242928, 27 June 2022, as at any time during his 8-year employment with
penned by J.M.V Lopez) Grieg PH, petitioner was already suffering from this
illness while at sea.
Q: Caraan’s duties as a motorman on board MV
Star Loen involved strenuous physical activities Petitioner had likewise proved that his working
for his 18-hour shift, and exposed him to all conditions aggravated his kidney ailment. As found
kinds of noxious gases, harmful fumes and by the arbitrators, petitioner had sufficiently
excessive noise while inside the engine room. established that his working conditions on board
Due to his working conditions and dietary the vessel increased the risk of contracting kidney
provision, he experienced pain while urinating disease. Grieg PH failed to dispute this and did not
and discharged blood in his urine. Eventually, he even offer any controverting evidence. (Caraan v.
was declared unfit to work and medically Grieg Philippines, Inc., G.R. No. 252199, 05 May 2021)
repatriated to the Philippines. Instead of being
2024 GOLDEN NOTES
Q: Gonzales, while on board the general cargo Philippines, Inc. v. Gonzales, G.R. No. 228296, 26 July
vessel Star Florida, experienced "shortness of 2017)
breath, pain in his left leg, fatigue, fever and
headaches." The following month, his past Q: Manansala’s services were engaged by
symptoms returned with the added symptom of Marlow Navigation Phils., Inc, for him to serve as
black tarry stools. He was initially diagnosed a fitter on a vessel. Before boarding the vessel,
with "pancytopenia suspect aplastic anemia." Manansala underwent a Pre-Employment
This caused his further medical attention as Medical Examination (PEME). In his
Gonzales was repatriated in the Philippines. examination, Manansala was required to
disclose information regarding all existing and
The company physicians opined that Gonzales' prior medical conditions. Manansala's
leukemia was not work-related. He sought a examination certificate indicates that he denied
second opinion from an independent physician, having hypertension and diabetes, specifically
Dr. Emmanuel Trinidad, who certified that his answering "NO."
leukemia was work-related. Gonzales claimed
disability benefits against Grieg Philippines, Inc. On 30 May 2010, while on board the vessel,
but the latter denied the same on the ground Manansala suffered a stroke. Because of this,
that Gonzales was not able to substantially prove Manansala was repatriated on 08 June 2010. He
the relation between his illness and his former was confined at the De Los Santos Medical
position as an Ordinary Seaman. Center from 10 June 2010 to 23 June 2010,
under the primary care of company-designated
Can Gonzales claim disability benefits against physician, Dr. Barrairo. While under Dr.
Grieg Philippines, Inc.? Barrairo's care, he "repeatedly denied that he
had any past history of diabetes and
A: YES. Settled is the rule that for illness to be hypertension."
compensable, it is not necessary that the nature of
the employment be the sole and only reason for the On 21 Oct. 2010, Manansala filed a Complaint
illness suffered by the seafarer. It is sufficient that against the respondents for total and permanent
there is a reasonable linkage between the disease disability benefits. Two months after he filed his
suffered by the Ee and his work to lead a rational complaint, Dr. San Luis, issued a medical opinion
mind to conclude that his work may have stating that Manansala must be considered
contributed to the establishment or, at the very permanently disabled. The same opinion
least, aggravation of any pre-existing condition he indicated that Manansala admitted to having
might have had. had a long history of hypertension and diabetes.
Is Manansala entitled to total and permanent
Gonzales was able to satisfy the conditions under disability benefits occasioned by work-related
the Sec. 32-A of the 2000 POEA-SEC and establish a illnesses?
reasonable linkage between his job as an Ordinary
Seaman and his leukemia. Gonzales provided his A: NO. Manansala is not entitled to total and
functions as an Ordinary Seaman aboard Star permanent disability benefits. Sec. 20(E) of the
Florida. Among others, his tasks included removing POEA-SEC bars the compensability of disability
rust accumulations and refinishing affected areas of arising from pre-existing illness when attended by
the ship with chemicals and paint to retard the an Ee’s fraudulent misrepresentation. Petitioner
oxidation process. This meant that he was knowingly and fraudulently misrepresented himself
frequently exposed to harmful chemicals which as not afflicted with hypertension and diabetes
could have also contributed to Gonzales' leukemia. during his PENE and after repatriation while being
It is also not disputed that he contracted leukemia treated by the company-designated physician.
only while he was onboard Star Florida since he was (Manansala v. Marlow Navigation Phils., Inc., G.R. No.
certified to be fit for sea duty prior to boarding and 208314, 23 Aug. 2017)
his leukemia was not genetic in nature. (Grieg
2024 GOLDEN NOTES
Q: D applied for shipboard employment with (PAL Maritime Corporation v. Dalisay, G.R. Nos.
Sulpicio Lines, which directed him to undergo a 218115 and 218179, 27 Jan. 2021, as penned by
pre-employment medical examination (PEME) J.M.V Lopez)
in its accredited clinic. During his examination,
D declared that he had no history of any ailment Q: Julius Ceasar (Ceasar) worked for Atlantic
other than a "Varicocelectomy". Thus, D was Ocean Manning, Inc. (Atlantic Manning) for 15
declared fit to work and was deployed aboard years. In 2010, he entered into a nine (9)-month
the vessel M/V Costa Concordia. While on duty, D employment contract with Atlantic Manning, on
experienced back pain, leading to his behalf of its foreign principal, Super Tanker
repatriation to the Philippines and diagnosis of Corporation (Super Tanker), to serve as a Fitter
low back pain secondary to disc protrusion. onboard the MegaStar Aquarius vessel. Ceasar
However, Sulpicio Lines later discovered that was found fit when he underwent a pre-medical
Dalisay had previously filed a claim for employment examination. Thus, on January 15,
permanent disability benefits with another 2010, he boarded MegaStar Aquarius.
employer for the same ailment, and was
awarded compensation. Sulpicio Lines While onboard the ship, Ceasar was performing
discontinued D's medical treatment, alleging an overhaul in the engine and fixing the
malicious concealment of a pre-existing illness. hydraulic machine when the hose accidentally
D sought medical attention from other detached and hit his left eye. He reported the
physicians which declared him unfit to work. incident to the Chief Engineer, but his request for
Accordingly, D filed a complaint for permanent a medical examination was denied because the
and total disability benefits. vessel was about to leave for the next port. On
September 27, 2010, Ceasar collapsed while
Should D be awarded sickness allowance and changing the fuel injector in the engine room,
attorney’s fee despite his concealment of a pre- and his supervisor issued an Incident Report
existing illness? regarding the incident. The ship captain
referred him to an offshore physician, Dr. Anna
A: NO. Under Sec. 20(A) of the 2010 POEA-SEC, a Delvey. Ceasar underwent a magnetic resonance
seafarer is entitled to several compensation and imaging (MRI) of his brain with attention to the
benefits for any work-related illness or injury that left eye in Texas, USA. According to the attending
he may have suffered during the term of the doctor, Dr. Joshua Mojica (Mojica), the MRI
contract. However, Sec. 20(E) of the 2010 POEA-SEC showed an eye injury to Ceasar.
is likewise explicit that a seafarer who knowingly
conceals a pre-existing illness or condition shall be However, Dr. Delvey indicated in the health
disqualified from claiming any compensation and insurance claim form that Ceasar’s illnesses
benefits. Jurisprudence provides that knowing were not work-related. A few days later Ceasar
concealment involves bad faith. The falsity or non- was repatriated, and he reported to the office of
disclosure of the truth must be for a malicious Atlantic Manning two days upon arrival. Ceasar
purpose or coupled with intent to deceive and to requested for medical treatment but was not
profit from deception. It must also be intentional. referred to a company-designated physician. His
requests were repeatedly denied. This
Here, D knowingly concealed his pre-existing illness. prompted him to file a complaint against
The fact that he passed the PEME could not excuse Atlantic Manning for payment of permanent
his willful concealment nor can it preclude Sulpicio total disability benefits, sickness allowance,
Lines from rejecting his claims. Taken together, D damages, and attorney's fees. Was Ceasar
was disqualified from all benefits including sickness entitled to disability benefits?
allowance. Accordingly, D was not also entitled of
attorney’s fee. To award attorney's fees despite the A: YES. Ceasar is entitled to disability benefits.
seafarer's malicious concealment would be Citing Sec. 20(A) of the POEA-SEC, there are two
tantamount to rewarding his fraudulent conduct.
2024 GOLDEN NOTES
elements on compensability of a seafarer's injury or 2. 240 days had lapsed without any certification
illness: issued by the company-designated physician;
1. The injury or illness must be work-related; and 3. The company-designated physician declared
2. The work-related injury or illness must have that he is fit for sea duty within the 120-day or
existed during the term of the seafarer's 240-day period, as the case may be, but his
employment contract. physician of choice and the doctor chosen under
Sec. 20-B(3) of the POEA-SEC are of a contrary
The grant of permanent total disability benefits opinion;
does not require a state of absolute helplessness. It
is enough that there is an inability to substantially 4. The company-designated physician
pursue his gainful occupation as seafarer without acknowledged that he is partially permanently
serious discomfort or pain and without material disabled but other doctors who he consulted, on
injury or danger to life. This incapacity, coupled with his own and jointly with his Er, believed that his
the company-designated physician's abdication of disability is not only permanent but total as
the duty to declare the seafarer's fitness or unfitness well;
to work within the prescribed periods under the
POEA-SEC, converts the latter's disability to 5. The company-designated physician recognized
permanent and total by operation of law. It is not the that he is totally and permanently disabled but
injury per se that is compensated but the incapacity there is a dispute on the disability grading;
to work.
6. The company-designated physician determined
In this case, Ceasar’s nine-month employment that his medical condition is not compensable
contract is from January 15, 2010 to October 15, or work-related under the POEA-SEC but his
2010. On September 27, 2010, Ceasar was found doctor-of-choice and the third doctor selected
unconscious on board the vessel. Before his under Sec. 20-B(3) of the POEA-SEC found
repatriation , he was brought to an offshore hospital otherwise and declared him unfit to work;
in Texas, USA and the MRI findings indicated an eye
injury. There, he was diagnosed to be suffering from 7. The company-designated physician declared
posterior retinae partial tear, sinusitis, him totally and permanently disabled but the Er
hyperlipidemia, and acute gastroduodenitis. Clearly, refuses to pay him the corresponding benefits;
Ceasar suffered from an illness during the term of and
his employment contract as his condition was not
the same as when he boarded MegaStar Aquarius. 8. The company-designated physician declared
(Celestino M. Junio v. Pacific Ocean Manning, Inc. et him partially and permanently disabled within
al., G.R. No. 220657, 16 March 2022, as penned by J. the 120-day or 240-day period but he remains
M.V. Lopez) incapacitated to perform his usual sea duties
after the lapse of said periods. (C.F. Sharp Crew
When a Seafarer May be Allowed to Pursue an Management, Inc. v. Taok, G.R. No. 193679, 18
Action for Total or Permanent Disability July 2012)
Benefits
Q: Mabunay was hired by Sharpe Sea as an oiler
1. The company-designated physician failed to for a period of nine months. A day after
issue a declaration as to his fitness to engage in boarding, Mabunay slipped and hit his back on
sea duty or disability even after the lapse of the the purifier while he was cleaning. When he
120-day period and there is no indication that awoke, his back was numb and he had difficulty
further medical treatment would address his getting up. Despite the persistent pain in his
temporary total disability, hence, justify an back, Mabunay continued working for two days,
extension of the period to 240 days; until the Chief Engineer allowed him to have a
medical checkup when the ship docked in
2024 GOLDEN NOTES
Nanjing, China. He was declared unfit to work by seafarer's degree of disability within a period of 120
his attending physician and was eventually or 240 days from repatriation. Clearly, Dr. Cruz, Dr.
repatriated. Castillo, or any other company-designated physician
failed to issue respondent either a fit-to-work
On 30 Apr. 2009, Mabunay reported to Sharpe certification or a final disability rating after his
Sea's office and was told to report to a company- operation and before the lapse of 240 days from his
designated physician. He was diagnosed with repatriation.
"Cervical Spondylosis; Thoracolumbar
Spondylosis; and Mild chronic compression Nonetheless, even if this Court accepted petitioners'
fracture". The doctor recommended that explanation on the belated submission of the
Mabunay undergo a discectomy. On 24 Nov. disability rating into evidence, it is worthy to note
2009, Mabunay underwent surgery and was that Dr. Cruz only issued an interim disability rating.
observed that he "tolerated the procedure well." It has been settled in Magsaysay Maritime Corp. v.
Mabunay filed a complaint against Sharpe Sea, Cruz (G.R. No. 204769, 06 June 2016) that an interim
Monte Carlo, and Florem for the payment of his disability grading is merely an initial prognosis and
total disability benefits Mabunay sought the does not provide sufficient basis for an award of
opinion of a third doctor who opined that he was disability benefits. (Sharpe Sea Personnel, Inc. v.
unfit to work as a seaman in his present Mabunay, Jr., G.R. No. 206113, 06 Nov. 2017)
condition.
Q: Seafarer Tonio worked for Blue corp. and Red
The LA ruled in Mabunay's favor and directed Crew Manila, Inc. since 1998. In February 2011,
Sharpe Sea to pay him permanent and total he was rehired as a Cook AB under a 6-month
disability benefits. It rejected Sharpe Sea's claim contract. While on board the vessel, Tonio
that its company-designated physicians experienced coughing and excruciating pain in
assessed Mabunay with a disability rating of his umbilical and waist area. He was later
Grade 8 since it was not supported by the diagnosed with constipation and umbilical
records. The NLRC upheld the LA's findings that hernia and was repatriated to Manila. Tonio
the records were bereft of evidence to support underwent surgery for his umbilical hernia, but
Sharpe Sea's claim. his lower back pain persisted but the Company
designated physician diagnosed it as something
On 29 Nov. 2011, the NLRC modified its decision attributable to aging and declared him fit-to-
by reducing the award of US$60,000.00 it earlier work. Tonio sought medical evaluation from his
granted to Mabunay, to US$16,795.00, own physician, who diagnosed him with a
corresponding to a Grade 8 disability rating. The "central broad-based disc herniation." Tonio
NLRC noted that Sharpe Sea attached a medical eventually filed a claim for full disability
report dated 18 Aug. 2009 from Dr. Cruz, which benefits. Can Tonio claim compensation even
supported its claim that a company-designated though it is not connected to the cause of his
physician had diagnosed Mabunay with a Grade medical repatriation?
8 disability. Is Mabunay entitled to permanent
and total disability benefits? A: YES. Under the POEA-SEC, company-designated
physician is primarily responsible to determine the
A: YES. With the company-designated physicians' disability grading or fitness to work of seafarers.
failure to issue either a fit-to-work certification or a Nonetheless, to be conclusive and binding, the
final disability rating within the prescribed periods, medical assessment or report of the company-
respondent's disability was rightfully deemed to be designated physician must be complete and definite
total and permanent. for the purpose of ascertaining the degree of the
seafarer's disability benefits. A final and definite
A company-designated physician is expected to disability assessment must truly reflect the extent of
come up with a definite assessment of a seafarer's the sickness or injuries of the seafarer, and his, or
fitness or lack of fitness to work or to determine the her capacity to resume work as such. Failing which,
2024 GOLDEN NOTES
the disability benefits awarded might not be contract, which is usually after the seafarer has
commensurate with the prolonged effects of the disembarked from the vessel.
injuries suffered by the seafarer.
In the case at bar, Mark's contract was from
Here, the company-designated physician only December 8, 2011, to September 8, 2012. On March
attended to Tonio’s umbilical hernia. Surgery was 11, 2012, Mark suffered pain and symptoms while
performed to relieve him of his abdominal pain. he is on board the vessel. Mark on May 21, 2012 was
However, the company-designated physician medically repatriated and was diagnosed with
completely ignored Tonio’s lower back pain despite Severe Acute Cholangitis (SAC) two days after
his own initial recommendation for the conduct of a disembarkation. Clearly, his illness manifested or
lumbosacral MRI, and the subsequent finding that was discovered during the term of his contract. His
he indeed has back issues consisting of broad-based medical condition is disputably presumed as work-
herniated disc. The issuance of a fit-to-work related although not listed as an occupational
certification to Tonio’s, without first addressing, or disease. A bare claim that the illness is not work-
without any definite declaration as to his back related, or that the seafarer is fit for sea duties is
ailment, is an abdication of the company-designated insufficient.
doctor's obligation under the POEA-SEC. This
effectively transforms the temporary total disability Considering that the company physician's medical
to permanent total disability, regardless of the evaluation of the seafarer fell short of the
disability grade. (Blue Manila, Inc. v. Jamias, G.R. Nos. parameters provided by law and jurisprudence,
230919 & 230932, 20 Jan. 2021, as penned by J. M.V. Mark is deemed totally and permanently disabled as
Lopez) of the date of the expiration of the 120-day period
counted from his repatriation. There could no
Q: Z Shipmanagement, Inc. hired Mark as an longer be any issue on whether his illness is work-
oiler. Mark was deployed on board a vessel for a related or not. (Bacabac v. NYK FIL Shipmanagement
period of nine months. In 2012, Mark felt dizzy Inc., G.R. No. 228550, 28 June 2021, as penned by J.
and suffered abdominal pain while performing M.V. Lopez)
his duties inside the engine room. When the
vessel arrived at the port in Chile, Mark vomited Rules on the Required Definite Medical
blood and was brought to the nearest clinic. It Assessment Within 120/240 Days
was found that his kidney’s were not functioning
well. He had dialysis thrice to restore his normal 1. The company-designated physician must issue
kidney function. He likewise underwent surgery a final medical assessment on the seafarer's
to remove stones in his bile duct. Mark was disability grading within a period of 120 days
confined for more than two months or from from the time the seafarer reported to him;
March 15 to May 19, 2012. On May 21, 2012,
Mark was medically repatriated. In September 2. If the company-designated physician fails to
2012, Bacabac filed against the NSI, et al. a give his assessment within the period of 120
complaint for total and permanent disability days, without any justifiable reason, then the
benefits, sickness allowance, reimbursement of seafarer's disability becomes permanent and
medical and hospital expenses. Is Mark entitled total;
to such claim?
3. If the company-designated physician fails to
A: YES. The Court clarified that a seafarer give his assessment within the 120 days with a
complaints for disability benefits arise from (1) sufficient justification (e.g., seafarer required
injury or illness that manifests or is discovered further medical treatment or seafarer was
during the term of the seafarers contract, which is uncooperative), then the period of diagnosis
usually while the seafarer is on board the vessel or and treatment shall be extended to 240 days.
(2) illness that manifests or is discovered after the The Er has the burden to prove that the
2024 GOLDEN NOTES
company-designated physician has sufficient operation on his knee and declared him unfit for
justification to extend the period; and duties on board. He was operated and medically
repatriated in December 2006. On February 14,
4. If the company-designated physician still fails to 2007, he was assessed to be fit to work.
give his assessment within the extended period
of 240 days, then the seafarer's disability After almost two years, Gatchalian filed a
becomes permanent and total, regardless of any complaint for total disability benefits against
justification. Doehle-Philman, et al. anchoring his claim on a
medical certificate issued by Dr. Chua who
NOTE: Case law states that without a valid final and diagnosed him with Traumatic Arthritis and
definitive assessment from the company-designated assessed him with permanent partial disability.
physician within the 120/240-day period, the law Can Gatchalian claim total and permanent
already steps in to consider petitioner's disability as disability benefit from Doehle-Philman, et al.?
total and permanent. Thus, a temporary total
disability becomes total and permanent by A: NO. Before a seafarer may claim permanent total
operation of law. (Gamboa v. Maunlad Trans., Inc., disability benefits from his employer, it must first be
G.R. No. 232905, 20 Aug. 2018) established that the company designated physician
failed to issue a declaration as to the seafarer's
A TTD lasting continuously for more than 120 days, fitness to engage in sea-duty or disability grading
except as otherwise provided, is considered as a within the 120-day or 240-day period reckoned
total and permanent disability. The exception from the time the seafarer reported to the company-
pertains to a situation when the sickness "still designated physician.
requires medical attendance beyond 120 days but
not to exceed 240 days" in which case the temporary In this case, it was undisputed that the company-
total disability period is extended up to a maximum designated doctor arrived at the assessment that
of 240 days. Gatchalian was fit to work after he was subjected to
examinations, operations, and therapy over the
However, for the company-designated physician to course of three months. Thereafter, the company-
avail of the extended 240-day period, he must first appointed physician issued a final assessment that
perform some significant act to justify an extension; Jose was fit to work on February 14, 2007, which
otherwise, the seafarer's disability shall be was well within the 120-day period prescribed by
conclusively presumed to be permanent and total. law. Given the timely fit-to-work assessment, there
(Talaroc v. Arpaphil Corporation, G.R. No. 223731, 30 was no basis for Gatchalian to claim total and
Aug. 2017) permanent disability benefits from the Doehle-
Philman, et al. (Doehle-Philman Manning Agency,
Q: Gatchalian had been working as Chief Cook Inc. v. Gatchalian, G.R. No. 207507, 17 Feb. 2021, as
for Doehle-Philman Manning Agency, Inc. penned by J.M.V. Lopez)
(Doehle-Philman), and its principal Doehle
(IOM) Ltd. (Doehle) since 2002. Q: A, a seafarer, figured in an accident while
climbing the stairs on board. A company-
Later, he signed a nine-month contract to serve designated physician attended his situation and
as Chief Cook onboard M/V Independent diagnosed A with bone fractures and injuries. He
Endeavor and boarded the vessel on July 17, was then removed from the pool of seafarers by
2006. He reported to the ship captain that his employers. A sought a second medical
sometime in August 2006, he figured in an opinion which found him permanently disabled
accident when his left foot slipped forward and unfit to return to sea duty. Is A entitled to
causing his right kneecap to hit the iron deck permanent and total disability benefits?
and took the full weight of his fall. Dr. Erven
assessed him with "Tear Medial Menuscus A: YES. Sec. 20(A)(3) of the POEA-SEC emphasizes
Fractured Osteofy" and recommended that when a seafarer suffers a work-related injury
2024 GOLDEN NOTES
or illness in the course of employment, it is the shall pertain only to the declaration of fitness to
company-designated physician who is obligated to work or the degree of disability. It does not cover
arrive at an assessment of the seafarer's fitness, the determination of whether the disability is work-
which would become the basis for seeking related.
monetary benefits. However, the company-
designated physician only has limited time to assess NOTE: The Third Physician Rule has no application
the seafarer’s fitness. when the company-designated physician exceeds
the 120-day treatment period without making a
The Court underscored that the assessment of the final, categorical and definitive assessment. (Alpines
company-designated physician of the seafarer's v. Elburg Shipmanagement Phil., Inc., G.R. No. 202114,
fitness to work or permanent disability within the 09 Nov. 2016)
period of 120 or 240 days must be definite. Failure
to observe such a period would entail the seafarer’s Guidelines in Cases Where a Seafarer Claiming
disability to be permanent and total. It is incumbent Disability Benefits Requests for a Third-Doctor
upon the company-designated physician to Referral
adequately establish the disability ratings of
seafarers in a conclusive medical assessment. 1. A seafarer who receives a contrary medical
finding from his/her doctor must send to the Er,
In this case, it cannot be considered that the Final within a reasonable period, a written request to
Report is definite and conclusive because despite refer the conflicting medical findings to a third
being discharged from a physical therapy program, doctor, to be mutually agreed upon by the
he was still given home instructions for further parties, and whose findings shall be final and
treatment. Neither was there a clear indication as to binding between the parties;
what kind of rehabilitation was necessary, nor a
specific period within which to abide with such 2. The written request must be accompanied by or
home instructions. (Reyes v. Magsaysay Mitsui OSK must indicate the contents of the medical report
Marine Inc., G.R. No. 209756, 14 June 2021, as from his/her doctor. Otherwise, the written
penned by J. M.V Lopez) request shall be considered invalid and as if
none had been requested;
Third-Doctor Referral
3. In case there was no valid request for a third
If the physician appointed by the seafarer disagrees doctor referral from the seafarer, the Er may opt
with the company-designated physician's to ignore the request or to refuse to assent,
assessment, the opinion of a third doctor may be either verbal or written, to such request
agreed jointly between the Er and the seafarer to be without violating the pertinent provision of the
the decision final and binding on them. (Sec. 20(a) POEA-SEC;
2010 POEA-SEC)
NOTE: If a complaint is subsequently filed by
In determining whose decision prevails, a party’s the seafarer against the Er before the labor
non-availment of his/her right to seek a second or tribunal, and the parties, after a directive from
even a third opinion results in the prevalence of the the LA pursuant to NLRC En Banc Resolution No.
company-designated doctor’s certification. 008-14, fail to secure the services of a third
(Gargallo v. Dohle Seafront Crewing, G.R. No. 215551, doctor, the labor tribunals shall hold the
17 Aug. 2016) findings of the company-designated physician
final and binding.
In Leonis Navigation Co., Inc. v. Obrero (G.R. No.
192754, 07 Sep. 2016), the Court clarified that the XPN: unless the same is found to be biased (i.e.,
referral to a third physician in case of contrasting lacking in scientific basis or unsupported by the
medical opinions between the company-designated medical records of the seafarer). In such a case,
physician and the seafarer-appointed physician the inherent merits of the respective medical
2024 GOLDEN NOTES
findings shall be considered by the tribunals or the parties to mutually agree as to the third
court. doctor, the labor tribunals should make
conclusive between the parties the findings of
NOTE: If, however, the parties were able to the seafarer’s physician of choice, unless the
secure the services of a third doctor during same is clearly biased, i.e., lacking in scientific
mandatory conference, the latter’s assessment basis or unsupported by the medical records of
of the seafarer’s medical condition should be the seafarer. In such a case, the inherent merits
considered final and binding. of the respective medical findings and the
totality of evidence shall be considered by the
4. In case of a valid written request from the labor tribunals or courts;
seafarer for a third doctor referral, the Er must,
within 10 days from receipt, send a written NOTE: If, however, the failure to refer the
reply stating that the procedure shall be seafarer’s condition to a third doctor after
initiated by the employer. After a positive directive from the LA was due to the fault of the
response from the Er, the parties are given a seafarer, then the labor tribunals and the courts
period of 15 days to secure the services of a should make conclusive between the parties the
third doctor and an additional period of 30 days findings of the company-designated physician,
for the third doctor to submit his/her except when the company-designated
assessment. The assessment of the third doctor physician’s medical conclusion is found to have
shall be final and binding; been issued with a clear bias in favor of the Er
(i.e., lacking in scientific basis, or unsupported
NOTE: In case, however, the parties fail to by the medical records of the seafarer) as held
mutually agree as to the third doctor, a in Dionio v. Trans-Global Maritime Agency Inc.
complaint for disability benefits may be filed by (G.R. No. 217362, 19 Nov. 2018). When such
the seafarer against the Er. The labor tribunals exception applies, the inherent merits of the
shall then consider and peruse the inherent respective medical findings shall be considered
merits of the respective medical findings of the by the tribunals or court.
parties’ doctors before making a conclusion as
to the condition of the seafarer. 8. If, despite the Er’s failure to respond to the
seafarer’s valid request for a third doctor, the
5. If, however, the Er ignores the written request parties, during mandatory conference, were
of the seafarer, or sends a written reply to the able to secure the services of a third doctor, and
seafarer refusing to initiate the referral to a the latter was able to make a reassessment on
third doctor procedure, or sends a written reply the seafarer’s condition, the third doctor’s
giving its assent to the request beyond 10 days findings should be final and binding between
from receipt of the written request of the the parties. In such a case, the Er’s refusal to
seafarer, the Er is considered in violation of the respond to the seafarer’s valid request for a
POEA-SEC. The seafarer may now institute a third doctor referral should be considered
complaint against his or her employer; immaterial. (Bunayog v. Foscon Shipment, Inc.,
G.R. No. 253480, 04 May 2023)
6. Upon the filing of the complaint and during the
mandatory conference, the LA shall give the
parties a period of 15 days to secure the Q: PTCI hired San Juan on several occasions as
services of a third doctor and an additional Chief Cook from 24 Feb. 1992 to 15 May 2008. He
period of 30 days for the third doctor to submit was re-hired on 26 Aug. 2009 to work aboard a
his/her reassessment; vessel. Prior to his embarkation, San Juan
underwent a routine Pre-Employment Medical
7. If the services of a third doctor were not secured Examination where he declared that he suffered
on account of the employer’s refusal to give from "hypertension treated with medication."
heed to the LA’s request or due to the failure of He was given cardiac clearance and was certified
2024 GOLDEN NOTES
as "fit to work" by PTCI's company-designated x-ray and was diagnosed with lumbar disc
physicians. prolapse. According to the Injury/Illness Report,
his condition required a specialist treatment
San Juan performed hard manual labor and and possible operation. Dr. Watson declared
engaged in strenuous physical activities for 12 Esteva to have a temporary total disability and
hours a day. He suffered fatigue, shortness of unfit for work and recommended immediate
breath, and severe headaches. On 23 Jan. 2010, repatriation. Wilhelmsen Ship Management also
he signed off from the vessel and was medically wrote a letter requesting that Esteva be
repatriated to the Philippines. He was referred examined by the company-designated physician
to the company-designated physicians, who in the Philippines. Esteva returned to the
certified on 20 Apr. 2010 and 30 Apr. 2010 that Philippines and reported to his Er.
San Juan was fit for duty.
The company-designated physician, Dr. Cruz-
However, he was not rehired by PTCI. Hence, he Balbon, issued a Medical Certificate indicating
filed a complaint, seeking payment of his that Esteva was given medications for Pott's
permanent disability benefits and sickness disease, a form of tuberculosis of the spine. She
allowance. Subsequently, he sought a second prescribed that Esteva take at least one (1) year
medical opinion from Dr. Pascual, who certified of treatment.
that he was "medically unfit to work in any
capacity as seaman." In the Medical Certificate, Esteva's suggested
disability grading was Grade 8, with 2/3 loss of
Should the contrary findings of San Juan's own lifting power. Esteva consulted another doctor,
physician be upheld over the fit-to-work Dr. Reyes-Paguia, who issued another Medical
certifications issued by PTCI's company- Certificate. Esteva consulted another doctor, Dr.
designated physicians? Raymundo, an orthopedic surgeon. The
physician issued a Medical Report which showed
A: NO. Settled is the rule that when a seafarer Esteva to be ambulatory but walking with a limp
sustains a work-related illness or injury while on and his condition will no longer allow him to
board the vessel, his fitness or unfitness for work return as an able-bodied seaman.
shall be determined by the company-designated
physician, and that "in case of conflicting medical Estava filed a Complaint for total and permanent
assessments between the company-designated disability benefits. Is Esteva entitled to total
physician and the seafarer's own physician, referral disability benefits?
to a third doctor is mandatory. In the absence of a
third doctor's opinion, it is the medical assessment A: YES. The entitlement of an overseas seafarer to
of the company-designated physician that should disability benefits is governed by law, the
prevail." employment contract, and the medical findings. Sec.
In this case, San Juan pursued his claim without 20(3) of the POEA states that “…if a doctor appointed
observing the laid-out procedure. Instead of setting by the seafarer disagrees with the assessment, a
into motion the process of selecting a third doctor, third doctor may be agreed jointly between the Er
he preempted the mandated procedure by filing the and the seafarer. The third doctor's decision shall be
instant complaint for permanent total disability final and binding on both parties.”
benefits (Philippine Transmarine Carriers, Inc. v.
Almario San Juan, G.R. No. 207511, 05 Oct. 2020) As the one contesting the company-designated
physician's findings, it is the seafarer's duty to
Q: Smith Bell Manning hired Esteva as a seafarer signify the intention to resolve the conflict through
for 9 months. He underwent the prescribed the referral to a third doctor. If the seafarer does not
medical examination and was pronounced fit to contest the findings and fails to refer the assessment
work. While he was onboard the vessel, Esteva to a third doctor, the company can insist on its
began to suffer severe back pains. He underwent disability rating even against a contrary opinion by
2024 GOLDEN NOTES
another physician. Securing a third doctor's opinion If the maritime compensation complaint was filed
is the duty of the Ee, who must actively or expressly prior to 06 Oct. 2008, the rule on the 120-day
request it. period, during which the disability assessment
should have been made in accordance with Crystal
Here, petitioner failed to signify his intention to Shipping, Inc. v. Natividad (G.R. NO. 154798, 20 Oct.
resolve the conflicting assessments of the company- 2005), that is, the doctrine then prevailing before
designated physician and his chosen physicians. the promulgation of Vergara on 06 Oct. 2008,
Instead, he immediately filed the claim for stands; if, on the other hand, the complaint was filed
permanent disability benefits. Clearly, petitioner from 06 Oct. 2008 onwards, the 240-day rule
failed to comply with the mandatory rule on referral applies. (Orient Hope Agencies, Inc. v. Jara, G.R. No.
to a third doctor. 204307, 06 June 2018)
However, absent a final, definite disability Q: After suffering an Epileptic Seizure with post-
assessment from a company-designated physician, fit neurological deficit, Atraje was repatriated to
the mandatory rule on a third doctor referral will the Philippines and was referred to the
not apply here. company-designated doctor for further medical
evaluation and treatment. After completing his
Hence, petitioner cannot be faulted for not referring treatment, Atraje continued to suffer from
the assessment to a third doctor at the time he filed shoulder and neck pain. Thus, he consulted an
his Complaint. There was no medical assessment independent specialist who declared him
from a company-designated physician to contest permanently unfit to resume his duties as a
then as it had not been timely disclosed to him. seaman.
Thus, petitioner's failure to refer the assessment to
a third doctor is not fatal to his disability claim. Atraje later filed a complaint for permanent and
Hence, petitioner is entitled to total and permanent total disability benefits against his Ers. The
disability benefits (Esteva v. Wilhelmsen Smith Bell latter argued that since Atraje failed to comply
Manning, G.R. No. 225899, 10 July 2019) with the third doctor rule, the assessment of the
company-designated doctor should prevail.
Q: Jara was hired by Orient Hope as an engine
cadet on board M/V Orchid Sun. On its way to Meanwhile, the Panel of Voluntary Arbitrators
Oman, M/V Orchid Sun sank off Muscat on 12 noted that while Atraje initiated submitting to
July 2007. Jara sustained leg injuries. On 29 May examination by a third doctor, there was silence
2008, the company-designated physician on the part of his Ers. Hence, it held that Atraje
suggested that his disability grading is Grade 11. could not be faulted anymore if the appointment
On 06 Mar. 2008, Jara filed a complaint with the of a third physician was deemed waived in this
Labor Arbiter, insisting that he was entitled to case.
total permanent disability benefits amounting Does non-compliance with the third doctor rule
to US$60,000.00. Is Jara entitled to permanent prejudice Atraje’s claim for disability benefits?
and total disability compensation considering
that there was a Grade 11 disability grading A: NO. Under Sec. 20-A(3) of the 2010 POEA-SEC, “If
given by the company-designated physician? a doctor appointed by the seafarer disagrees with
the assessment, a third doctor may be agreed jointly
A: YES. The Court finds that the company- between the Er and the seafarer. The third doctor’s
designated physician’s failure to issue a final and decision shall be final and binding on both parties.”
definitive medical assessment within the 240-day The assessment refers to the declaration of fitness
extended period transformed the respondent’s to work or the degree of disability, as can be gleaned
disability to permanent and total. from Sec. 20-A(3)(1). It presupposes that the
company-designated physician came up with a
In Island Overseas Transport Corporation v. Beja (G.R. valid, final, and definite assessment on the seafarer’s
No. 203115, 07 Dec. 2015), this Court clarified that:
2024 GOLDEN NOTES
fitness or unfitness to work before the expiration of Considering that Ventura failed to observe the
the 120- or 240-day period. conflict-resolution procedure provided under the
2010 POEA-SEC, the Court is inclined to uphold the
In this case, the third doctor-referral provision does opinion of the company-designated physician that
not apply because there is no definite disability Ventura's illnesses were not work-related, hence,
assessment from the company-designated not compensable.
physicians. (Magsaysay Mol Marine, Inc. v. Atraje,
G.R. No. 229192, 23 July 2018) Q: Toquero was employed by Crossworld as a
fitter for a vessel for seven months. He
Q. Teodoro Ventura, Jr. was employed by underwent a pre-employment medical
Crewtech Shipmanagement Philippines, Inc. as examination and was declared fit for sea duty.
Chief Cook on board the vessel MV Maria Cristina While on board the vessel, Toquero was
Rizzo. Ventura complained that he was having a assaulted by his fellow seafarer, Fong.
hard time urinating that was accompanied by
lower abdominal pain. He was medically According to Toquero, he and Fong were
repatriated and referred to the company- instructed by the master of the vessel to check
designated physician who diagnosed Ventura's and repair a generator. While repairing,
illnesses to be "Cystitis with Cystolithiases and Toquero advised Fong not to remove the flanges
Benign Prostatic Hyperplasia (BPH)," which he which his irked Fong, and recalled their prior
declared to be not work-related. altercation and challenged him to a fistfight. He
ignored Fong and continued working when
Prior to the expiration of the 240-day period suddenly Fong hit the back of his head with a
reckoned from his repatriation, Ventura claimed large metal spanner, knocking him unconscious.
that he was verbally informed by the company- He was given first aid treatment at the ship
designated physician that it would be his last clinic, where his vital signs were monitored.
check-up session and that subsequent
consultations would be for his own account. Toquero's assessment showed that his physical
Ventura was compelled to seek an independent discomfort was due to trauma and skull defect.
physician of his choice, Dr. Tan, who declared His Medical Evaluation Report read that
him to be permanently disabled. Toquero became incapacitated because of the
serious head injury that he incurred on board;
Ventura filed a complaint for total permanent he has a large bone defect which may pose
disability benefits. Crewtech argued that the further damage to his brain; contusion of the
failure to observe the procedure for the joint brain tissue also occurred at the site of the skull
appointment of a third doctor negates the claim fracture. At this time, he is no longer allowed to
for the disability benefits. Is Ventura entitled? engage in heavy physical activities. The ship's
environment is also dangerous to him because of
A. NO. While the seafarer is not irrevocably bound the unsteady state of the vessel when sailing at
by the findings of the company-designated high seas. Dizziness may set anytime and may
physician as he is allowed to seek a second opinion result to fall, which may cause further
and consult a doctor of his choice, Sec. 20-A(3) irreparable injury.
thereof further provides that any disagreement in
the findings may be referred to a third doctor jointly Because of the impediment, he is permanently
agreed upon by the parties, whose findings shall be unfit to return to work as a seaman in any
final and binding between them. The non- capacity and considered for total permanent
observance of the requirement to have the disability. Is Toquero's injury compensable?
conflicting assessments determined by a third
doctor would mean that the assessment of the A: YES. A disability is compensable under the POEA-
company-designated physician prevails. SEC if two elements are present:
2024 GOLDEN NOTES
1. The injury or illness must be work-related; and had a brief psychotic episode. Subsequently, the
2. The injury or illness must have existed during company-designated physician issued a Grade 6
the term of the seafarer's employment contract. Disability Assessment. Cayabyab thus filed a
complaint for total and permanent disability
Hence, a claimant must establish the causal benefits. Months after the filing of the complaint,
connection between the work and the illness or Cayabyab a second opinion from his personal
injury sustained. physician, Dr. Elias D. Adamos, who declared him
to be suffering from total and permanent
Here, the two (2) elements of a work-related injury disability.
are present. Not only was petitioner's injury work-
related, but it was also sustained during the term of The LA awarded Cayabyab total and permanent
his employment contract. His injury, therefore, is disability benefits. On the other hand, the NLRC
compensable. held that VMC is liable to pay Cayabyab only
partial disability benefits corresponding to
Respondents' argument that the claim is precluded Grade 6 rating under the Amended POEA-SEC.
because the injury is due to the willful acts of On appeal, the CA upheld the findings of the
another seafarer is untenable. The POEA-SEC company-designated physician who classified
disqualifies claims caused by the willful or criminal Cayabyab's mental disorder as a partial
act or intentional breach of duties done by the disability with a Grade 6 rating; thus, awarding
claimant, not by the assailant. It is highly unjust to the payment of Grade 6 disability benefits to
preclude a seafarer's disability claim because of the Cayabyab under their CBA
assailant's willful or criminal act or intentional
breach of duty. (Toquero v. Crossworld Marine Can Cayabyab claim partial disability benefits
Services, G.R. No. 213482, 26 June 2019) under the CBA?
Q: Ventis Maritime Corporation (VMC) hired A: NO. Cayabyab cannot claim partial disability
Cayabyab on behalf of its foreign principal, St. benefits under the alleged CBA.
Paul Maritime Corporation (SPMC), to work as a
wiper on board one of its vessels. Cayabyab There are three (3) requisites which a seafarer
underwent a Pre-Employment Medical declared to be suffering from a disability, whether
Examination (PEME) where he was declared fit permanent or partial, must prove to establish his or
for sea duty. In fulfilling his work, Cayabyab her entitlement to superior disability benefits under
claimed he skipped meals to assist other crew the CBA:
members. He also experienced erratic sleeping
patterns aggravated by poor nutrition. He began 1. The existence of the CBA;
talking to himself and recited bible verses out of
nowhere. He was then bought to a psychiatric 2. The seafarer's employment contract is covered
clinic where he was diagnosed with by the CBA, i.e., the CBA is in effect or had not
Occupational Stress Disorder and recommended yet lapsed at the time of the seafarer's
his immediate repatriation on the ground of employment; and
"acute psychosis.”
3. That the seafarer complied with the conditions
Upon Cayabyab's arrival in the Philippines, VMC stipulated in the CBA, i.e., prove that the
referred him to the company-designated seafarer's injury arose from an accident while
physician, who endorsed him to a psychiatrist at on board the vessel.
the Philippine General Hospital (PGH). The
psychiatrist prescribed him medication for Cayabyab cannot claim disability benefits under the
schizophrenia and advised him to return to CBA owing to the following reasons: (1) He failed to
work. During his follow-up check-up on said prove its existence; (2) He failed to establish that his
date, the psychiatrist declared that Cayabyab employment contract is covered by the supposed
2024 GOLDEN NOTES
CBA; and (3) He failed to adduce evidence to show NOTE: The benefits mentioned above shall be
that his disability arose from an accident. separate and distinct from, and will be in addition to
whatever benefits which the seafarer is entitled to
The award of compensation and disability benefits under Philippine laws from the SSS, OWWA, ECP,
cannot rest on speculations, presumptions, and PHIC and Home Development Mutual Fund (Pag-
conjectures. While the CBA is a labor contract that IBIG Fund). (Sec. 20-B(3), 2010 POEA–SEC)
must be logically and liberally construed in favor of
Filipino seafarers, still the rule is that "justice is in Other Liabilities of the Employer When the
every case for the deserving, to be dispensed with in Seafarer Dies as a Result of Work – Related
the light of established facts, the applicable law, and Injury or Illness During the Term of Employment
existing jurisprudence. (O-R-B)
Thus, Cayabyab is entitled to disability benefits 1. The Er shall pay the deceased’s beneficiary all
corresponding to Grabe 6 disability rating under the outstanding Obligations due the seafarer under
Amended POEA-SEC, and not the CBA. (Ventis this Contract;
Maritime Corporation v. Cayabyab, G.R. No. 239257,
21 June 2021, as penned by J. M.V Lopez) 2. The Er shall transport the Remains and
personal effects of the seafarer to the
Death Benefits Philippines at Er’s expense except if the death
occurred in a port where local government laws
GR: The seafarer’s death should occur during the or regulations do not permit the transport of
term of his employment. such remains.
XPN: The seafarer’s death occured after the In case death occurs at sea, the disposition of
termination of his employment due to his medical the remains shall be handled or dealt with in
repatriation on account of a work-related injury or accordance with the master’s best judgment.
illness. (Sec. 20(B), 2010 POEA-SEC) In all cases, the Er/master shall communicate
with the manning agency to advise for
Work-Related Death of the Seafarer During the disposition of seafarer’s remains; and
Term of their Contract
3. The Er shall pay the beneficiaries of the seafarer
The Er shall pay his beneficiaries the Philippine the Philippine currency equivalent to the
currency equivalent to: amount of $1,000 for Burial expenses at the
exchange rate prevailing during the time of
1. The amount of $50,000; and payment. (Sec. 20-B(4), 2010 POEA-SEC)
2. An additional amount of $7,000 to each child
under the age of 21 but not exceeding four (4) When is There No Compensation and Benefits to
children, at the exchange rate prevailing during be Payable in Respect of an Injury, Incapacity,
the time of payment. (Sec. 20-B(1), 2010 POEA– Disability or Death of a Seafarer
SEC)
The injury, disability, or death of a seafarer is caused
Where Death is Caused by Warlike Activity by his:
While Sailing Within a Declared War Zone or
War Risk Area 1. Willful or criminal act; or
2. Intentional breach of his duties.
The compensation payable shall be doubled. The Er
shall undertake appropriate war zone insurance NOTE: The Er must prove that such injury,
coverage for this purpose. incapacity, disability, or death is directly
attributable to the seafarer.
2024 GOLDEN NOTES
Q: Rodolfo L. Racelis was recruited and hired by Invalid Side Agreement
respondent United Philippine Lines, Inc. (UPL)
for its principal, respondent Holland America An agreement that diminishes an Ee’s pay and
Lines, Inc. (HAL) to serve as "Demi Chef De benefits as contained in the POEA-approved
Partie" on board the vessel MS Prinsendam. contract is void, unless such subsequent agreement
is approved by the POEA. (Azucena, 2016)
In the course of his last employment contract,
Rodolfo experienced severe pain in his ears and Prescription of Action
high blood pressure causing him to collapse All claims arising from this contract shall be made
while in the performance of his duties. He within three (3) years from the date the cause of
consulted a doctor in Argentina and was action arises, otherwise the same shall be barred.
medically repatriated for further medical (Sec. 30, 2010 POEA SEC)
treatment.
Q: On 28 Feb. 2006, Magsaysay Maritime
Upon arrival in Manila, he was immediately Corporation (Magsaysay), the local manning
brought to Medical City, Pasig City, where he was agent of Princess Cruise Lines, Limited, hired
seen by a company-designated physician, Dr. Bernardine De Jesus as an Accommodation
Gerardo Legaspi, and was diagnosed to be Supervisor for the cruise ship Regal Princess.
suffering from Brainstem (pontine) Cavernous On 09 Mar. 2006, Bernardine boarded Regal
Malformation. He underwent surgery twice for Princess and he eventually disembarked 10
the said ailment but developed complications months later, or on 16 Jan. 2007, after his
and died. Rodolfo’s surviving spouse sought to contract of employment ended. Bernardine was
claim death benefits but to no avail. soon diagnosed with Aortic Aneurysm and on 15
Is petitioner entitled to death benefits? Mar. 2007, he had a coronary angiography.
A: YES. The POEA-SEC provides that the On 21 Mar. 2007, he underwent a Left
beneficiaries of a deceased seafarer may be able to Axillofemoral Bypass. He died on 26 Mar. 2007.
claim death benefits for as long as they are able to Cynthia, Bernardine’s widow claimed that her
establish that (a) the seafarer’s death is work- husband suffered chest pains while he was still
related, and (b) such death had occurred during the aboard the Regal Princess. She claimed that he
term of his employment contract. had reported his condition, but he was not
provided with medical attention. Furthermore,
While it is true that Brainstem (pontine) Cavernous he had also asked for medical attention upon his
Malformation is not listed as an occupational repatriation, but his request was once again
disease under Sec. 32-A of the 2000 POEA-SEC, Sec. denied.
20-B(4) of the same explicitly provides that the Er’s
liabilities when the seafarer suffers work-related Is Bernardine’s widow is entitled to death
injury or illness include those illnesses not listed in benefits?
Sec. 32 and are disputably presumed as work
related. A: YES. Sec. 32-A of the POEA-SEC acknowledges the
possibility of “compensation for the death of the
Also, while the general rule is that the seafarer’s seafarer occurring after the employment contract
death should occur during the term of his on account of a work-related illness” if the following
employment, the seafarer’s death occurring after conditions are met:
the termination of his employment due to his
medical repatriation on account of a work-related 1. The seafarer's work must involve the risks
injury or illness constitutes an exception thereto. described herein;
2. The disease was contracted as a result of the

seafarer's exposure to the described risks;
2024 GOLDEN NOTES
3. The disease was contracted within a period of

exposure and under such other factors
necessary to contract it; and
4. There was no notorious negligence on the part

of the seafarer.
Both labor tribunals found that Bernardine first

experienced chest pains while he was still onboard
the cruise ship, i.e., during the term of his
employment contract. It was likewise established
that while Bernardine requested medical attention
when he started to feel ill and upon his repatriation,
his requests were repeatedly ignored.
This Court concurs with the LA’s observation that it

was improbable for Bernardine to have developed
and died from a cardio-vascular disease within the
two short months following his repatriation.
(Magsaysay Maritime Corporation v. De Jesus, G.R. No.
203943, 30 Aug. 2017)
2024 GOLDEN NOTES
the first time in history when its US and
VI. MANAGEMENT PREROGATIVE European customers shifted their huge orders to
China and Bangladesh. The management
informed its Ees that it could no longer afford to
GR: Management prerogative is the right of the Er to provide transportation shuttle services.
regulate all aspects of employment, such as: Consequently, it announced that a normal fare
would be charged depending on the distance
1. Freedom to prescribe work assignments; traveled by the workers availing of the service.
2. Working methods
3. Processes to be followed; Was the Little Hands Garments Company within
4. Regulation regarding transfer of Ees; its rights to withdraw this benefit which it had
5. Supervision of their work, lay-off and discipline; unilaterally been providing its Ees? (2005 BAR)
and
6. Dismissal and recall of work. (Goya, Inc. v. Goya, A: YES. This is a management prerogative which is
Inc, Ees Union-FFW, G.R. No. 170054, 21 Jan. not due any legal or contractual obligation. The facts
2013) of the case do not state the circumstances through
which the shuttle service may be considered as a
NOTE: It presupposes the existence of an Er-Ee benefit that ripened into a demandable right.
relationship. (Ibid.)
There is no showing that the benefit has been
So long as the company’s prerogatives are exercised deliberately and consistently granted, i.e., with the
in good faith for the advancement of the Er’s interest Er’s full consciousness that despite its not being
and not for the purpose of defeating or bound by law or contract to grant it, it just the same
circumventing the rights of the Ees under special granted the benefit.
laws or under valid agreements, the SC will uphold
them. (San Miguel Brewery Sales Force Union v. Ople, Limitations on Management Prerogative
G.R. No. 53515, 08 Feb. 1989)
The exercise of managerial prerogative is not
An Er is free to regulate, according to his best unlimited. It is circumscribed by limitations found in
discretion and best business judgement, all aspects law, a CBA, employment contract or the general
of employment, from hiring to firing, except in cases principles of fair play and justice.
of unlawful discrimination or those which may be
provided by law. (Philippine Telegraph and The exercise of management prerogative is limited
Telephone Co. v. NLRC, G.R. No. 118978, 23 May 1997) such that:
The prerogative accorded management cannot 1. The Er must be motivated by good faith; and
defeat the very purpose for which our labor laws
exist: to balance the conflicting interests of labor 2. It should not be resorted to circumvent the law
and management, not to tilt the scale in favor of one or must not have been the result of malicious or
over the other, but to guaranty that labor and arbitrary actions. (MERALCO v. Quisumbing, G.R.
management stand on equal footing when No. 127598, 22 Feb. 2000)
bargaining in good faith with each other. (Unicorn
Safety Glass, Inc. v. Basarte, G.R. No. 154689, 25 Nov. Security of Tenure Vis-à-vis Management
2004) Prerogative
Q: Little Hands Garment Company, an It is the inherent prerogative of an Er to transfer and

unorganized manufacturer of children’s apparel reassign its Ees to meet the requirements of its
with around 1,000 workers, suffered losses for
business. Be that as it may, the prerogative of the accorded to management cannot defeat the very
management to transfer its Ees must be exercised purpose for which labor laws exist – to balance the
without grave abuse of discretion. The exercise of conflicting interests of labor and management, not
the prerogative should not defeat an Ees's right to to tilt the scale in favor of one over the other, but to
security of tenure. The Er’s privilege to transfer its guarantee that labor and management stand on
Ees to different workstations cannot be used as a equal footing when bargaining in good faith with
subterfuge to rid itself of an undesirable worker. each other.
(Veterans Security Agency v. Vargas, G.R. No. 159293,
16 Dec. 2005) A line must be drawn between management
prerogatives regarding business operations per se
The Ee’s right to security of tenure takes and those which affect the rights of Ees. In treating
precedence over the Er’s management prerogative. the latter, management should see to it that its Ees
Thus, an Er’s management prerogative includes the are at least properly informed of its decisions and
right to terminate the services of an Ee, but this modes of actions. Such management prerogative
management prerogative is limited by the Labor may be availed of without fear of any liability so long
Code, which provides that the Er can terminate an as it is exercised in good faith for the advancement
employee only for a just cause or when authorized of the Er’s interest and not for the purpose of
by law. This limitation on management prerogative defeating or circumventing the rights of Ees under
is because no less than the Constitution recognizes special laws or valid agreement and are not
and guarantees an employee’s right to security of exercised in a malicious, harsh, oppressive,
tenure. (Art. 279 [now 294], LC; Sec. 3, Art. XIII, 1987 vindictive or wanton manner or out of malice or
Constitution) spite. (PAL v. NLRC, G.R. No. 85985, 13 Aug. 1993)
Management prerogative is circumscribed by NOTE: It must be established that the prerogative

limitations found in: being invoked is clearly a managerial one.
1. Law; Criterion in the Exercise of Management

2. CBA; Prerogative
3. Employment contract;
4. Employer policy or practice; and The only criterion to guide the exercise of
5. General principles of fair play and justice. management prerogative is that the policies, rules,
and regulations on work-related activities of the
Management Prerogative is Inferior to the Ee’s must always be fair and reasonable and the
State’s Police Power corresponding penalties, when prescribed,
commensurate to the offense involved and to the
Management prerogatives are inferior to the State degree of the infraction.
police power. Such prerogatives and the exercise
thereof should be: The company's management prerogative shall be
exercised in good faith for the advancement of the
1. Without abuse of discretion; and employer's interest and not for the purpose of
2. Done in good faith and with due regard to the defeating or circumventing the rights of the
rights of labor. employees under special laws or under valid
agreements.
The Er’s inherent right to discipline is, however,
subject to reasonable regulation by the State in the
exercise of its police power. (ALU-TUCP v. NLRC, G. R.
No. 120450, 10 Feb. 1999)
Ineluctably, the exercise of management

prerogatives is not absolute. The prerogatives
2024 GOLDEN NOTES
Q: Is withholding an Ee’s salary a valid exercise filed his Complaint for illegal dismissal against
of management prerogative? Airborne. Airborne argued that Padilla was
placed on floating status for only two (2)
A: NO. Any withholding of an Ee’s wages by an Er months; and he was directed to report to
may only be allowed in the form of wage deductions Airborne’s office however, he failed to comply
under the circumstances provided in Art. 113 of the and went on absence without leave instead, thus
LC: there was no constructive dismissal. Is Airborne
correct?
1) The worker is insured;
2) For union dues; and A: NO. Under law, the period of temporary off-detail
3) In cases authorized by law or regulation for security guards must not exceed six (6) months.
issued by the SOLE. Beyond this, a security guard’s floating status shall
be tantamount to constructive dismissal. Also, the
In the absence of the following circumstances, security guard must be assigned to a specific or
withholding thereof is thus unlawful. (SHS particular client. A general return-to-work order
Perforated Materials, Inc. v. Diaz, G.R. 185814, 13 Oct. does not suffice. Here, the series of letters requiring
2010) Padilla to report to the head office does not suffice.
Jurisprudence is consistent in its disapproval of
Q: May a MERALCO Ee invoke the remedy of writ general return-to-work orders as a justification for
of habeas data available where his Er decides to failure to timely render assignments to security
transfer his workplace on the basis of copies of guards. (Padilla v. Airborne, G.R. No. 210080, 22 Nov.
an anonymous letter posted therein, imputing to 2017)
his disloyalty to the company and calling for him
to leave, which imputation it investigated but Compassionate Ground
fails to inform him of the details thereof?
It refers to incidence of death of an immediate
A: NO. The writs of amparo and habeas data will not member of the seafarer's family which includes his
issue to protect purely property or commercial parents, spouse and children if the seafarer is
concerns nor when the grounds invoked in support married or his parents if the seafarer is single.
of the petitions therefore are vague or doubtful. (Amended Standard Terms and Conditions Governing
Employment constitutes a property right under the the Overseas Employment of Filipino Seafarer On-
context of the due process clause of the Constitution. board Ocean-going Ships)
The writ of habeas data directs the issuance of the
writ only against public officials or Ees, or private Compassionate Visit
individuals or entities engaged in the gathering,
collecting, or storing of data or information When a seafarer is hospitalized and has been
regarding an aggrieved party’s person, family or confined for at least seven (7) consecutive days, he
home; and that MERALCO (or its officers) is clearly shall be entitled to a compassionate visit by one (1)
not engaged in such activities. (MERALCO v. Lim, G.R. family member or a requested individual. The
No. 184769, 05 Oct. 2010) employer shall pay for the transportation cost of the
family member or requested individual to the major
Q: Padilla was hired by Airborne as a security airport closest to the place of hospitalization of the
guard. He allegedly rendered continuous service seafarer. It is, however, the responsibility of the
for 24 years, but he was relieved from his post family member or requested individual to meet all
and was advised to wait for his re-assignment visa and travel document requirements. (Ibid.; R.A.
order. Later, he received a letter from Airborne No. 8042, as amended by R.A. No. 10022)
directing him to report for assignment. He called
Airborne’s office but was told that he had no
assignment yet. After more than six (6) months
not having been deployed or re-assigned, Padilla
2024 GOLDEN NOTES
qualification is not at all relevant to the job that is to
be performed, then one is guilty of discrimination.
A. OCCUPATIONAL QUALIFICATIONS
The petitioner is only a non-teaching personnel; her

interaction with SSCW’s students is very limited. It
Bona Fide Occupational Qualification Rule
is thus quite impossible that her pregnancy out of
(BFOQ)
wedlock caused such a grave scandal, as claimed by
SSCW, as to warrant her dismissal. (Leus v. St.
The Er has the prerogative to impose certain
Scholastica’s College Westgrove, G.R. No. 187226, 28
qualifications based on such criteria as race, sex,
Jan. 2015)
age, national origin, civil or marital status, physical
appearance (such as a requirement on “pleasing
SSCW, as Er, undeniably has the right to discipline its
personality” or height and weight) and the like.
Ees and, if need be, dismiss them if there is a valid
(Chan, 2019)
cause to do so. However, there is no cause to dismiss
the petitioner. Her conduct is not considered by law
Where the job itself necessarily requires a particular
as disgraceful or immoral. Further, the respondents
question qualification, then the job applicant or
themselves have admitted that SSCW, at the time of
worker who does not possess it may be disqualified
the controversy, does not have any policy or rule
on that basis. This will not be unlawful
against an Ee who engages in pre-marital sexual
discrimination. (Azucena, 2016)
relations and conceives a child as a result thereof.
There being no valid basis in law or even in SSCW’s
E.g., One whose job is to preach the teachings of a
policy and rules, SSCW’s dismissal of the petitioner
religious sect must himself/herself be a member of
is despotic and arbitrary and, thus, not a valid
that sect; or where the job itself necessarily requires
exercise of management prerogative. (Ibid.)
a male, then the female is disqualified as when the
job is to haul or saw logs in logging operations.
Q: Fil-Aire Aviation Company (FIL-AIRE) is a new
airline company recruiting flight attendants for
Justifications to BFOQ
its domestic flights. It requires that the applicant
be single, not more than 24 years old, attractive,
To justify a BFOQ, the Er must prove two (2) factors:
and familiar with three major Visayan dialects,
(Fa-Re)
viz: Ilongo, Cebuano, and Waray. Lourdes, 23
years old, was accepted as she possessed all the
1. That the employment qualification is
qualifications.
reasonably Related to the essential operation of
the job involved; and
After passing the probationary period, Lourdes
disclosed that she got married when she was 18
2. That there is a Factual basis for believing that all
years old, but the marriage was already in the
or substantially all persons meeting the
process of being annulled on the ground that her
qualification would be unable to properly
husband was afflicted with a sexually
perform the duties of the job. (Star Paper v.
transmissible disease at the time of the
Simbol, G.R. No. 164774, 12 Apr. 2006)
celebration of their marriage. As a result of this
revelation, Lourdes was not hired as a regular
Reasonable Necessity Rule
flight attendant. Consequently, she filed a
complaint against FIL-AIRE, alleging that the
It is also known as the “test of reasonableness of the
pre-employment qualifications violate relevant
company policy”. There must be a business
provisions of the LC and are against public
necessity for ERs to require certain attributes
policy. Is the contention of Lourdes tenable?
possessed by a person in relation to the job it is to
Discuss fully. (2012, 1995 BAR)
be done or performed. Accordingly, if the standard
2024 GOLDEN NOTES
A: YES. The contention of Lourdes is tenable. When
she was not hired as a regular flight attendant by 4. The action is duly certified by the DOLE
FIL-AIRE because she disclosed that she got married Secretary after consultation with the
when she was 18 years old, the airline company stakeholders in accordance with the purpose of
violated the provision of the Labor Code, which the Rules.
states: “It shall be unlawful for an employer to
require as a condition of employment or NOTE: An Er who invokes the qualifications as
continuation of employment that a woman provided herein, shall submit a report prior to its
employee shall not get married, or to stipulate implementation to the DOLE Regional Office which
expressly or tacitly that upon getting married, a has jurisdiction over the workplace.
woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, The submission of the report shall be a presumption
discriminate or otherwise prejudice a woman that the age limitation is in accordance with the
employee merely by reason of her marriage." Rules unless proven otherwise by the court. Failure
to submit said report shall give rise to the
The company’s policy of not accepting married presumption that the employer is not allowed to set
women for employment is not only in derogation of age limitation. (Sec 6, R.A. No. 10911)
the provisions of Art. 136 of the LC on the right of a
woman to be free from any kind of stipulation
against marriage in connection with her
B. PRODUCTIVITY STANDARDS
employment, but it likewise assaults good morals
and public policy, tending as it does to deprive a
woman of the freedom to choose her status, a
The Er has the prerogative to prescribe the
privilege that by all accounts inheres in the
standards of productivity which may be used as:
individual as an intangible and inalienable right.
(PT&T Company v. NLRC and Grace de Guzman, G.R.
1. Incentive scheme - Employees who surpass the
No. 118978, 23 May 1997)
productivity standards or quota are usually
given additional benefits; and
Age Qualification
2. Disciplinary scheme - Employees may be

GR: It shall be unlawful for an Er to set age
sanctioned or dismissed for failure to meet the
limitations in employment.
productivity standards or quota. (Chan)
XPNs:
Q: May an employer impose productivity
standards for its workers?
1. Age is a BFOQ reasonably necessary in the
normal operation of a particular business or
A: YES. An Er is entitled to impose productivity
where the differentiation is based on
standards for its workers. In fact, non-compliance
reasonable factors other than age;
may be visited with a penalty even more severe than
demotion. The practice of a company in laying off
2. The intent is to observe the terms of bona fide
workers because they failed to make the work quota
seniority system that is not intended to evade
has been recognized in this jurisdiction. Failure to
the purpose of the Rules;
meet the sales quota assigned to each of them
constitutes a just cause for their dismissal,
3. The intent is to observe the terms of a bona fide
regardless of the permanent or probationary status
employee retirement or a voluntary early
of their employment.
retirement plan consistent with the purpose of
the Rules; Provided, That such retirement or
Likewise, failure to observe prescribed standards of
voluntary retirement plan is in accordance with
work or to fulfill reasonable work assignments due
the LC, and other related laws; or
2024 GOLDEN NOTES
to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean Nonetheless, if by voluntary practice or policy, the
failure to attain work goals or work quotas, either by Er, for a considerable period of time, has been
failing to complete the same within the allotted paying his Ees’ wages due for eight (8) hours work
reasonable period, or by producing unsatisfactory although the work shift is less than eight (8) hours
results. (Realda v. New Age Graphics, Inc., G.R. No. (e.g., seven hours) it cannot later on increase the
192190, 25 Apr. 2012) working hours without an increase in the pay of the
Ees affected. An Er is not allowed to withdraw a
This management prerogative of requiring benefit which he has voluntarily given.
standards may be availed of so long as they are
exercised in good faith for the advancement of the Q: Sime Darby Pilipinas issued a memorandum
Er’s interest. (Leonardo v. NLRC, G.R. Nos. 125303 & implementing a new work schedule. It
126937, 16 June 2000) eliminated the 30-minute paid “on call” lunch
break of its monthly salaried Ees and instead
provided for a 10-minute break time and one
hour lunch break. The Ees felt adversely affected
C. CHANGE OF WORKING HOURS
by the memorandum and filed before the LA a
complaint for unfair labor practice.
Employer’s Right to Change Working Hours

The LA dismissed the complaint on the ground
that the change in the work schedule constituted
The working hours may be changed, at the
a valid exercise of management prerogative.
discretion of the company, should such change be
necessary for its operations, and that Ees shall
Is changing the work schedule of the Ees a valid
observe such rules as have been laid down by the
exercise of management prerogative?
company. (Interphil Laboratories Union-FFW v.
Interphil Laboratories, Inc., G.R. No. 142824, 19 Dec.
A: YES. The right to fix the work schedules of the Ee
2001)
rests principally on their Er. The petitioner, as the Er,
cites as reason for the adjustment the efficient
Management retains the prerogative, whenever
conduct of its business operations and improved
exigencies of the service so require, to change the
production. Management retains the prerogative,
working hours of its Ees. The exercise of
whenever exigencies of the service so require, to
management prerogative, however, is not absolute
change the working hours of its Ees.
as it must be exercised in good faith and with due
regard to the rights of labor. (Royal Plant Workers
So long as such prerogative is exercised in good faith
Union v. Coca-Cola Bottlers Phil., Inc., G.R. No. 198783,
for the advancement of the Er’s interest and not for
15 Apr. 2013)
the purpose of defeating and circumventing the
rights of the Ees under special laws or under valid
Q: May the normal hours fixed in Art. 83 of the LC
agreements, this court will uphold such exercise.
be reduced by the Er? Explain.
(Sime Darby Pilipinas v. NLRC, G.R. No. 119205, 15
Apr. 1998)
A: YES. Art. 83 of the LC provides that the normal
hours of work of an Ee shall not exceed eight (8)
Flexible Working Arrangement (FWA)
hours a day. This implies that the Er, in the exercise
of its management prerogatives, may schedule a
Flexible Work Arrangements refer to alternative
work shift consisting of less than eight (8) hours.
arrangements or schedules other than the
And following the principle of “a fair day’s wage for
traditional or standard work hours, work days, and
a fair day’s labor,” the Er is not obliged to pay an Ee,
work week.
working for less than eight (8) hours a day, the
wages due for eight (8) hours.
2024 GOLDEN NOTES
It is anchored on a voluntary basis and conditions adopted for as long as the Public Health Crisis exist.
mutually acceptable to both the Er and the Ees (D.A. (Sec. 4, Labor Advisory No. 17-B, s. 2020)
No. 02-09)
Types of Flexible Working Arrangements
Effectivity and Implementation
Type Definition
The effectivity and implementation of any of the One where the normal
FWA shall be temporary in nature, subject to the workweek is reduced
prevailing conditions of the company. (L.A. No. 09, s. to less than six (6) days
2020) but the total number of
work-hours of 48
Purposes of Adoption of FWA: hours per week shall
Compressed Work remain.
1. To act as a coping mechanism and a remedial Week (CWW)
measure in times of economic difficulties and The normal workday is
national emergencies than resort to outright increased to more than
termination of the Ees’ services or to total eight (8) hours but not
closure of the establishment. to exceed 12 hours,
without corresponding
2. To reduce business costs and help in saving jobs overtime pay.
while maintaining competitiveness and One where the normal
productivity in industry. (D.A. No. 02-09) work days per week
Reduction of
are reduced but should
Q: What are the Alternative Work Schemes to Workdays
not last for more than
prevent termination of employment or closure six (6) months.
of business during the COVID-19 Pandemic? One where the Ees are
rotated or alternately
A: As an alternative to termination of employment Rotation of Workers
provided work within
or closure of business, any or a combination of the the workweek.
following may be adopted: One where the Ees are
required to go on leave
1. Transfer of employees to another branch or for several days or
outlet of the same employer; Forced Leave
weeks utilizing their
2. Assignment of employees to other function or leave credits, if there
position in the same or other branch or outlet of are any.
the same employer;
One where the work
3. Reduction of normal workdays per day or week;
schedule is not
4. Job rotation alternately providing workers with Broken-time
continuous but the
work within the workweek or within the Schedule
work-hours within the
month;
day or week remain.
5. Partial closure of establishment where some
One where the Ees
units or departments of the establishment are
agree to avail the
continued while other units or departments are
holidays at some other
closed; and
days, provided that
6. Other feasible work arrangements considering
Flexi-holidays there is no diminution
specific peculiarities of different business
of existing benefits as a
requirements.
result of such
arrangement.
The above Alternative Work Schemes/Flexible Work
Arrangements are temporary in nature and shall be
2024 GOLDEN NOTES
NOTE: The Ers and the Ees are encouraged to Conditions for a Valid Exercise by the Employer
explore alternative schemes under any agreement of its Right to Transfer Employees
and company policy or practice to cushion and
mitigate the effect of the loss of income of the Ees. The transfer should:
(D.A. No. 02-09)
1. Not be unreasonable, inconvenient, or
Work from Home (WFH) or Telecommuting prejudicial to the Ee; and
Work Arrangement
2. Not involve a demotion in rank, diminution in
Establishments are highly encouraged to adopt a salaries, benefits and other privileges
WFH or telecommuting arrangement when feasible. concerning the transfer.
Ees are provided with adequate support to perform
the assigned task or job. (Sec. 3, Labor Advisory No. Employer’s Right to Transfer and Reassign
17-B, s. 2020) Employees
Entitlement of Separated Employees In the pursuit of its legitimate business interests,

especially during adverse business conditions,
Ees who are separated from employment due to management has the prerogative to transfer or
authorized causes shall be entitled to the final pay assign Ees from one office or area of operation to
without prejudice to other benefits provided for by another provided there is no demotion in rank or
the law, company policy, or CBAs. (Sec. 6, L.A. 17, s. diminution of salary, benefits and other privileges
2020) and the action is not motivated by discrimination,
bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is
inherent in the right of Ers to control and manage
D. TRANSFER OF EMPLOYEES
their enterprises effectively.
NOTE: The right of Ees to security of tenure does not

Transfer
give them vested rights to their positions to the
extent of depriving management of its prerogative
It is a movement from one position to another which
to change their assignments or to transfer them.
is of equivalent rank, level or salary, without break
(Endico v. Quantum Foods Distribution Center, G.R.
in service.
No. 161615, 30 Jan. 2009)
Demotion
GR: Refusal of an Ee to transfer, when such transfer
is valid, is guilty of insubordination or willful
It involves a situation where an Ee is relegated to a
disobedience of an Er’s lawful order. (e.g., refusal to
subordinate or less important position constituting
transfer due to parental obligations, additional
a reduction to a lower grade or rank, with a
expenses, inconvenience, hardship and anguish)
corresponding decrease in duties and
responsibilities, and usually accompanied by a
XPNs:
decrease in salary.
Unless the transfer is: (Q-O-P-A-A)

Promotion
1. A transfer that was directed by the Er under

The advancement from one position to another with
Questionable circumstances;
an increase in duties and responsibilities as
2. A transfer to Overseas assignment;
authorized by law, and usually accompanied by an
3. A transfer consequent to Promotion;
increase in salary.
4. A transfer to Avoid conflict of interest; or
2024 GOLDEN NOTES
5. A transfer from one position to another teach Economics in another Department. Was
occasioned by the Abolition of the position. Manalo constructively dismissed?
(Chan, 2019)
A: NO. Transferring Ees, to the extent that it is done
When Transfer is Deemed to be Constructive fairly and in good faith, is a valid exercise of
Dismissal management prerogative and will not, in and of
itself, sustain a charge of constructive dismissal. In
A transfer is deemed to be constructive dismissal this case, the acts committed by Manalo run afoul
when three conditions concur: from the principles of integrity and objectivity
governing ethics and education in the accountancy
1. When the transfer is unreasonable, profession as mandated by the International
inconvenient or prejudicial to the Ee; Federation of Accountants. Relevant as it is, ethical
behavior takes on even greater significance in the
2. When the transfer involves a demotion in rank education and training of individuals who are
or diminution of salaries, benefits and other prospective members of the profession.
privileges; and Professionals who concurrently take on the role of
educators act as gatekeepers to the esteemed ranks
3. When the Er performs a clear act of of a profession or as channels of skills and
discrimination, insensibility, or disdain towards knowledge. (Manalo v. Ateneo De Naga University, et
the Ee, which forecloses any choice by the latter al., G.R. No. 185058, 09 Nov. 2015)
except to forego his continued employment.
Burden of Proving that the Transfer was
Q: May the employer exercise his right to Reasonable
transfer an employee and compel the latter to
accept the same if said transfer is coupled with The Er must be able to show that the transfer is not
or is in the nature of promotion? unreasonable, inconvenient, or prejudicial to the Ee;
nor does it involve a demotion in rank or a
A: NO. There is no law that compels an Ee to accept diminution of his salaries, privileges and other
promotion. Promotion is in the nature of a gift or a benefits. Should the Er fail to overcome this burden
reward which a person has a right to refuse. When of proof, the Ee’s transfer shall be tantamount to
an Ee refused to accept his promotion, he was constructive dismissal. (Blue Dairy Corporation v.
exercising his right and cannot be punished for it. NLRC, G.R. No. 129843, 14 Sept. 1999)
While it may be true that the right to transfer or
reassign an Ee is an Er’s exclusive right and the
prerogative of management, such right is not
E. DISCIPLINE OF EMPLOYEES
absolute. (Dosch v. NLRC and Northwest Airlines, G.R.
No. 51182, 05 July 1983)
Components to the Right to Discipline

Q: Manalo is a faculty member of the
Accountancy Department of Ateneo de Naga
1. Right to discipline;
University's College of Commerce and also, part-
2. Right to dismiss;
time Manager of the Ateneo de Naga Multi-
3. Right to determine who to punish;
Purpose Cooperative. The Grievance Committee
4. Right to promulgate rules and regulations;
of the University found her in “fraud in issuance
5. Right to impose penalty (proportionality rule);
of official receipts, collection of cash without
6. Right to choose which penalty to impose; and
documented remittance to the cooperative, use
7. Right to impose heavier penalty than what the
of inappropriate forms of documents cash
company rules prescribe. (Chan, 2019)
receipts” and, thus, recommended her
dismissal.” Instead of dismissing Manalo, the
University President transferred Manalo to
2024 GOLDEN NOTES
Employer’s Right to Discipline their Employees for 31 years already and the incident was his first
offense. Besides, the value of the squid heads was a
The Er has the prerogative to instill discipline in his negligible sum of P50.00 and the company
Ees and to impose reasonable penalties, including practically lost nothing since the squid heads were
dismissal, on erring Ees pursuant to company rules considered scrap goods and usually thrown away.
and regulations. (San Miguel Corp. v. NLRC, G.R. No. Moreover, the ignominy he suffered when he was
78277, 12 May 1989) imprisoned over the incident, and his preventive
suspension for one (1) month was enough
Company policies and regulations are, unless shown punishment for his infraction.
to be grossly oppressive or contrary to law, generally
binding and valid on the parties. (China Banking Q: A, a flight attendant of XYZ Airlines for over 17
Corp. v. Borromeo, G.R. No. 156515, 19 Oct. 2004) years was dismissed for committing serious
misconduct by removing company property
Limitation on the Employer’s Power to without authorization, particularly a 1.5L of
Discipline bottled water and a couple of magazines. Was A
illegally dismissed?
While management has the prerogative to discipline
its Ees and to impose appropriate penalties on A: YES. While the company laid down the penalties
erring workers, pursuant to company rules and for violation of its policies. The evaluation of an Ee's
regulations, however, such management infraction should be dealt with fairness and reason.
prerogative must be exercised in good faith for the All surrounding circumstances must be considered,
advancement of the Er’s interest and not for the and the penalty must be commensurate to the
purpose of defeating or circumventing the rights of violation committed by an Ee. Termination of the
the Ees under special laws and valid agreements. services of an Ee should be the Er's last resort
(PLDT v. Teves, G.R. No. 143511, 15 Nov. 2010) especially when other disciplinary actions may be
imposed, considering the Ee's long years of service
The attainment of a harmonious labor- in the company, devoting time, effort and invaluable
management relationship and the existing state service in line with the Er's goals and mission.
policy of enlightening workers concerning their
rights as Ee’s’ demand no less than the observance During A’s span of employment of 17 years, she did
of transparency in managerial moves affecting Ee’s not commit any infraction or was ever sanctioned
rights. (Philippine Airlines. Inc. v. NLRC, et al., G.R. except in the incident subject of the present
No. 85985, 13 Aug. 1993) controversy. To impose a penalty as grave as
dismissal for a first offense and considering the
Rule on Proportionality value of the property allegedly taken would be too
harsh under the circumstances. Therefore, A was
Infractions committed by an Ee should merit only illegally dismissed from service. (Salvacion A.
the corresponding penalty demanded by the Lamadrid v. Cathay Pacific Airways Limited And
circumstance. The penalty must be commensurate Vivian Lo, G.R. No. 200658, 23 June 2021)
with the act, conduct or omission imputed to the
employee. (Holcim Philippines, Inc. v. Obra G.R. No.
220998, 08 Aug. 2016)
F. GRANT OF BONUSES AND OTHER BENEFITS
In Sagales v. Rustan's Commercial Corporation (G.R.

NO. 166554, 27 Nov. 2008), the dismissal of a Chief
Bonus
Cook who tried to take home a pack of squid heads,
which were considered as scrap goods and usually
A bonus is an amount granted and paid to an Ee or
thrown away, was found to be excessive. The
his industry and loyalty which contributed to the
Supreme Court took into consideration the fact that
success of the Er’s business and made possible the
the Chief Cook had been employed by the company
2024 GOLDEN NOTES
realization of profits. It is an act of generosity Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No.
granted by an enlightened Er to spur the Ee to L-5276, 03 Mar. 1953)
greater efforts for the success of the business and
realization of bigger profits. Where the bonus is not payable to all but only to
some Ees and only when their labor becomes more
GR: The payment of bonus is a management efficient or more productive, it is only an
function, not a demandable and enforceable inducement for efficiency, a prize therefore, not a
obligation, which cannot be enforced upon the Er part of the wage. (Poquiz, 2012)
who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside Heacock Ruling
from the Ee’s basic salaries or wages. (Philippine
National Construction Corporation v. NLRC, G.R. No. “Even if a bonus is not demandable for not forming
128345, 18 May 1999) part of the wage, salary, or compensation of the Ee,
the same may nevertheless be granted on equitable
XPNs: Given for a long period of time, provided that: considerations” (Heacock Co. v. NLRC, G.R. No. L-
11135, 30 Apr. 1958)
1. Consistent and deliberate – Er continued
giving benefit without any condition imposed Prohibition Against Elimination or Diminution
for its payment; of Benefits
2. Er knew he was not required to give benefit; Nothing in this Book shall be construed to eliminate
or in any way diminish supplements, or other
3. Nature of benefit is not dependent on profit; employee benefits being enjoyed at the time of the
promulgation of this Code. (Art. 100, LC)
4. Made part of the wage or compensation agreed
and stated in the employment contract; NOTE: Ee benefits contemplated by Art. 100 are
those which are capable of being measured in terms
5. It was promised to be given without any of money or those privileges to the Ee with
conditions imposed for its payment in which monetary equivalents.
case it is deemed part of the wage; and
When a grant of a benefit is made subject to a
6. It has ripened into practice. (Marcos v. NLRC, condition and such condition prevails, the rule on
G.R. No. 111744, 08 Sept. 1995) non-diminution finds no application. (Coca-Cola
Bottlers Philippines, Inc., v. Iloilo Coca-Cola Plant
NOTE: If one enters into a contract of employment Employees Labor Union, G.R. No. 195297, 05 Dec.
under an agreement that he shall be paid a certain 2018)
salary by the week or some other stated period and,
in addition, a bonus, in case he serves for a specified Elimination or Diminution of Benefits May
length of time, there is no reason for refusing to Constitute Constructive Dismissal or Indicate
enforce the promise to pay the bonus, if the Demotion.
employee has served during the stipulated time, on
the ground that it was a promise of a mere gratuity. Constructive dismissal is an involuntary resignation
(Ibid) resorted to when continued employment is
rendered impossible, unreasonable or unlikely;
Bonus Not Treated as Part of Wages when there is a demotion in rank and/or a
diminution in pay; or when a clear discrimination,
Bonus is not considered part of wages if it is paid insensibility or disdain by an Er becomes
only upon realization of profits or amount of unbearable to the Ee. (Phil. Wireless Inc. v. NLRC, G.R.
production or output. (Atok Big Wedge Mining Co., No. 112963, 20 July 1999).
2024 GOLDEN NOTES
Q: The projected bonus for the Ees of Suerte Co.
was 50% of their monthly compensation. 3. Non-poaching clause – When the Ee is
Unfortunately, due to the slump in the business, prevented from enticing his former Er’s staff
the president reduced the bonus to 5% of their away from the business, the aim is to prevent
compensation. Can the company unilaterally the Ee from taking key Ees with him to his new
reduce the amount of bonus? (2002 BAR) employment or business.
A: YES. The granting of a bonus is a management Factors to Consider To Enforce a Restrictive

prerogative, something given in addition to what is Covenant
ordinarily received by or strictly due the recipient.
An Er cannot be forced to distribute bonuses when 1. Whether the covenant protects a legitimate
it can no longer afford to pay. To hold otherwise business interest of the Er;
would be to penalize the Er for his past generosity.
(Producers Bank of the Phil. v. NLRC, G.R. No. 100701, 2. Whether the covenant creates an undue burden
28 Mar. 2001) on the Ee;
3. Whether the covenant is injurious to the public
welfare;
G. CLEARANCE PROCESS
4. Whether the time and territorial limitations
contained in the covenant are reasonable; and
A standard procedure among public or private Ers

5. Whether the restraint is reasonable from the
of requiring the Ee to return the Er’s real or personal
standpoint of public policy. (Rivera v. Solidbank
properties before the Ee’s departure. (Chan, 2019).
Corp., G.R. No. 163269, 19 Apr. 2006)
GR: Ers are prohibited from withholding wages

Non-Involvement Clause
from employees. (Art. 116, LC)
A non-involvement clause is not necessarily void for

XPN: Pending the Ee’s return of the Er’s properties,
being in restraint of trade if there are reasonable
the Er may withhold the former’s terminal pay and
limitations as to time, trade, and place. In this case,
benefits. (Milan v. NLRC, G.R. No. 202961, 4 Feb.
the non-involvement clause has a time limit: two
2015)
years from the time petitioner’s employment with
respondent ends. It is also limited as to trade, since
it only prohibits petitioner from engaging in any
H. POST-EMPLOYMENT RESTRICTIONS pre-need business akin to respondent’s. (Tiu v.
Platinum Plans, Phils., Inc., G.R. No. 163512, 28 Feb.
2007)
Types of Restrictive Covenants
More significantly, since petitioner was the Senior
1. Non-compete clause – When the Ee is Assistant Vice-President and Territorial Operations
prevented from directly competing or working Head in charge of respondent’s Hongkong and
for a competitor of his former Er, or when the Ee Asean operations, she had been privy to confidential
is prevented from setting up a competing and highly sensitive marketing strategies of
business. respondent’s business. To allow her to engage in a
rival business soon after she leaves would make
2. Non-solicitation clause – When a duty is respondent’s trade secrets vulnerable especially in
imposed on the Ee not to approach his former a highly competitive marketing environment. In
Er’s customers or prospective customers, or sum, we find the non-involvement clause not
when the Ee is prevented from taking contrary to public welfare and not greater than is
customers/clients of his former Er.
2024 GOLDEN NOTES
necessary to afford a fair and reasonable protection
to respondent. (Ibid.)
Q: TRUE or FALSE. Answer TRUE if the statement

is true, or FALSE if the statement is false. Explain
your answer in not more than two (2) sentences.
An employment contract prohibiting
employment in a competing company within one
year from separation is valid. (2009 BAR)
A: TRUE. An employment contract prohibiting

employment in a competing company within a
reasonable period of one year from separation is
valid. The Er has the right to guard its trade secrets,
manufacturing formulas, marketing strategies, and
other confidential programs and information.
Q: Genesis Fulgencio had been working for

Solidbank Corporation since 1977. He later on
applied for retirement. Solidbank required
Genesis to sign an undated Undertaking where
he promised that “he will not seek employment
with a competitor bank or financial institution
within one (1) year from 28 Feb. 1995, and that
any breach of the Undertaking or the provisions
of the Release, Waiver and Quitclaim would
entitle Solidbank to a cause of action against him
before the appropriate courts of law.” Equitable
Banking Corporation (Equitable) employed
Genesis.
Is the post-retirement employment ban

incorporated in the Undertaking which Genesis
executed upon his retirement unreasonable,
oppressive, hence, contrary to public policy?
A: NO. There is a clear and obvious distinction

between restraints on competitive employment in
employment contracts and in pension plans. The
strong weight of authority holds that forfeitures for
engaging in subsequent competitive employment,
included in pension retirement plans, are valid, even
though unrestricted in time or geography. The
reasoning behind this conclusion is that the
forfeiture, unlike the restraint included in the
employment contract, is not a prohibition on the
employee’s engagement in competitive work but is
merely a denial of the right to participate in the
retirement plan if he does so engages. (Rivera v.
Solidbank Corp., G.R. No. 163269, 19 Apr. 2006)
2024 GOLDEN NOTES
Just Cause vs. Authorized Cause
VII. POST-EMPLOYMENT
JUST CAUSE AUTHORIZED CAUSE
A just cause dismissal Authorized cause
implies that the Ee has dismissal is a form of
committed, or is guilty terminating the Er-Ee
A. TERMINATION OF EMPLOYMENT BY of, some violation relationship with a
EMPLOYER
against the Er, that is, liability on the part of the
the Ee has committed Er to pay separation pay
some serious as mandated by law. It
2-Fold Requirement for Lawful Dismissal misconduct, is guilty of does not necessarily
fraud against the Er or imply delinquency or
1. Substantive – legality or illegality of the act of he has neglected his culpability on the part of
dismissal (just and authorized causes) duties such as the Ee. Instead, the
abandonment. Thus, dismissal process is
2. Procedural – legality or illegality of the manner the Ee himself initiated initiated by the Er's
of dismissal (due process; notice and hearing) the dismissal process. exercise of his
Payment of separation management
Employee’s Right to Contest DismissalAny pay, as a rule, is not prerogative such as
decision taken by the Er shall be without prejudice required in just cause installation of labor-
to the right of the worker to contest the validity or dismissal. However, saving devices, closure of
legality of his dismissal by filing a complaint with where the Ee is business, or
the regional branch of the NLRC. (Art. 292 (b), LC) dismissed for causes implementing a
other than serious retrenchment program.
Burden of Proof misconduct or those (Jaka Food v. Pacot, G.R.
reflecting on his moral No. 151378, 28 Mar.
The burden of proving that the termination was for character, separation 2005)
a valid or authorized cause shall rest on the pay may be allowed as
employer. (Art. 292 (b), LC) a measure of social
justice. (Poquiz, 2012)
Principle of Totality of Infractions
The totality of infractions or the number of

NOTE: The existence of any of the just or authorized
violations committed during the period of
causes enumerated in Arts. 297 and 298 of the LC
employment shall be considered in determining the
does not automatically result in the dismissal of the
penalty to be imposed upon an erring employee. The
Ee. The Er must decide whether it would dismiss the
offenses committed by petitioner should not be
Ee, impose a lighter penalty, or perhaps even
taken singly and separately. Fitness for continued
condone the offense committed by an erring Ee. In
employment cannot be compartmentalized into
deciding, the Er may take into consideration the Ee's
tight little cubicles of aspects of character, conduct
past offenses. (Santos v. Integrated Pharmaceutical,
and ability separate and independent of each other.
Inc., G.R. No. 204620, 11 July 2016)
(Merin v. NLRC, G.R. No. 171790, 17 Oct. 2008)
Q: Aldovino and her co-applicants applied for
After all, the record of an Ee is a relevant
work at Gold and Green Manpower, a local
consideration in determining the penalty that
manning agency. Eventually, they were hired as
should be meted out since an Ee's past misconduct
sewers for Dipper Semi-Conductor, a Taiwan-
and present behavior must be taken together in
based company. Their respective employment
determining the proper imposable penalty. (Cebu
contracts provided an eight (8)-hour working
People’s Multi-Purpose Cooperative v. Carbonilla, G.R.
day, a fixed monthly salary, and entitlement to
No. 212070, 27 Jan. 2016)
overtime pay, among others. Once Aldovino and
2024 GOLDEN NOTES
her co-workers arrived in Taiwan, Gold and process. A valid dismissal must comply with
Green Manpower took all their travel substantive and procedural due process: there must
documents, including their passports. They be a valid cause and a valid procedure. The Er must
were then made to sign another contract that comply with the two (2)-notice requirement, while
provides that they would be paid on a piece-rate the Ee must be given an opportunity to be heard.
basis instead of a fixed monthly salary. Because Here, petitioners were only verbally dismissed,
they were paid on a piece-rate basis, they without any notice given or having been informed of
received less than the fixed monthly salary any just cause for their dismissal.
stipulated in their original contract. When
Aldovino and her co-workers inquired, Dipper With their right to substantive and procedural due
Semi-Conductor refused to disclose the schedule process denied, petitioners were illegally dismissed
of payment on a piece-rate basis. from service. (Aldovino v. Gold and Green Manpower,
G.R. No. 200811, 19 June 2019)
Aldovino and her co-workers filed a Complaint
against their Ers, Dipper Semi-Conductor and Q: Joy was deployed to work for Taiwan Wacoal,
Sage International before a local court in Co. Ltd. on 26 June 1997 for one year. Sameer
Taiwan. The parties met before the Bureau of Overseas Placement Agency claims that on 14
Labor Affairs for a dialogue. There, Dipper Semi- July 1997, Mr. Huwang from Wacoal informed
Conductor ordered Aldovino and her co- Joy, without prior notice, that she was
workers to return to the Philippines as it was no terminated and that she should prepare for
longer interested in their services. All of them immediate repatriation. Hence, Joy filed a
returned to the Philippines. complaint with the NLRC claiming that she was
illegally dismissed.
They eventually filed before the Labor Arbiter a
case for illegal termination, underpayment of The NLRC declared that Joy was illegally
salaries, human trafficking, illegal signing of dismissed, ruling that Sameer Overseas
papers, and other money claims. Respondents Placement Agency failed to prove that there
argued that petitioners were not illegally were just causes for termination. Sameer
dismissed and that they voluntarily returned to Overseas Placement Agency counters that there
the Philippines. Were petitioners illegally was just cause for termination because there
dismissed? was a finding of Wacoal of Joy’s inefficiency,
negligence in her duties, and failure to comply
A: YES. Under the LC, Ers may only terminate with the work requirements of her foreign Er.
employment for a just or authorized cause and after Therefore, it claims that Joy’s dismissal was
complying with procedural due process valid. Was Joy illegally dismissed?
requirements. Arts. 297 and 300 of the LC
enumerate the causes of employment termination A: YES. Security of tenure for labor is guaranteed by
either by Ers or by Ees, respectively. In illegal our Constitution. With respect to the rights of
dismissal cases, the burden of proof that Ees were Overseas Filipino Workers (OFW), we follow the
validly dismissed rests on the Ers. Failure to principle of lex loci contractus (law of the place
discharge this burden means that the dismissal is where the contract is made). By our laws, overseas
illegal. Filipino workers may only be terminated for a just
or authorized cause and after compliance with
A review of the records here shows that the procedural due process requirements. Joy’s
termination of petitioners' employment was dismissal less than one year from hiring and her
effected merely because respondents no longer repatriation on the same day show not only failure
wanted their services. This is not an authorized or on the part of Sameer Overseas Placement Agency
just cause for dismissal under the LC. Employment to comply with the requirement of the existence of
contracts cannot be terminated on a whim. just cause for termination – they patently show that
Furthermore, petitioners were not accorded due the Ers did not comply with the due process
2024 GOLDEN NOTES
requirement. The abruptness of the termination 1. JUST CAUSES
negated any finding that she was properly notified (Art. 297, LC; DOLE D.O. No. 147-15)
and given the opportunity to be heard. Her
constitutional right to due process of law was
It is a termination initiated by the Ee. This is an
violated. (Sameer Overseas Placement Agency v.
exercise of management prerogative; however, it
Cabiles, G.R. No. 170139, 05 Aug. 2014)
must not be exercised with abuse of discretion.
Threefold Liability Rule

While the law provides for a just cause to dismiss an
Ee, the Er still has the discretion whether it would
The "threefold liability rule" holds that the wrongful
exercise its right to terminate the employment or
acts or omissions of a person may give rise to civil,
not. (Santos v. Integrated Pharmaceutical, Inc., G.R.
criminal and administrative liability, which may
No. 204620, 11 July 2016)
proceed independently of one another, as in fact, the
quantum of evidence required in each case is
Basis
different. (Ramiscal, Jr. v. COA, G.R. No. 213716, 10
Oct. 2017)
As a measure of self-protection against acts inimical
to its interest, a company has the right to dismiss its
Q: Rico has a temper and, in his work as Division
erring Ees. An Er cannot be compelled to continue
Manager of Matatag Insurance, frequently loses
employing an Ee guilty of acts inimical to the Er's
his temper with his staff. One day, he physically
interest, justifying loss of confidence in him. (Yabut
assaulted his staff member by slapping him. The
v. Meralco, G.R. No. 190436, 16 Jan. 2012)
staff member sued him for physical injuries.
Matatag insurance decided to terminate Rico,
Just Causes for Termination
after notice and hearing, on the ground of loss of
trust and confidence. Rico claims that he is
1. Serious misconduct or willful disobedience by
entitled to the presumption of innocence
the Ee of the lawful orders of his Er or
because he has not yet been convicted. Comment
representative in connection with his work;
on Matatag’s action in relation to Rico’s
argument. (2015 BAR)
2. Gross and habitual neglect of duties by the Ee;
A: Matatag Insurance does not have to await the

3. Fraud or willful breach by the Ee of the trust
result of the criminal case before exercising its
reposed in him by his Er or duly organized
prerogative to dismiss. Dismissal is not affected by a
representative;
criminal case. Under the Threefold Liability Rule, a
single act may result in three liabilities, two of which
4. Commission of a crime or offense by the Ee
are criminal and administrative. To establish them,
against the person of his Er or any immediate
the evidence of the crime must amount to proof
member of the latter’s family or his duly
beyond reasonable doubt; whereas the evidence of
authorized representative; or
the ground for dismissal is substantial evidence
only. In this regard, the company has some basis
5. Other causes analogous to the foregoing. (Art.
already for withholding the trust it has reposed on
297, LC)
its manager. Hence, Rico’s conviction need not
precede the employee’s dismissal.
Serious Misconduct
It is an improper or wrong conduct; the

transgression of some established and definite rule
of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and
not mere error in judgment. To be serious within the
2024 GOLDEN NOTES
meaning and intendment of the law, the misconduct
must be of such grave and aggravated character and A: YES. A teacher exclaiming, "Anak ng puta" after
not merely trivial or unimportant. (Villamor Golf having encountered a student is an unquestionable
Club v. Pehid, G.R. No. 166152, 04 Oct. 2005) act of misconduct. However, whether it is serious
misconduct that warrants the teacher's dismissal
Requisites of Serious Misconduct will depend on the context of the phrase's use.
1. There must be misconduct; While uttering an expletive out loud in the spur of
the moment is not grave misconduct per se, the
2. The misconduct must be of such grave and refusal to acknowledge this mistake and the attempt
aggravated character; to cause further damage and distress to a minor
student cannot be mere errors of judgment.
3. It must relate to the performance of the Ee’s Petitioner's subsequent acts are willful, which
duties; and negate professionalism in his behavior. They
contradict a professor's responsibility of giving
4. There must be showing that the Ee becomes primacy to the students' interests and respecting
unfit to continue working for the Er. (Sec. 5.2 (a), the institution in which he teaches. In the interest of
D.O. No. 147-15) self-preservation, petitioner refused to answer for
his own mistake; instead, he played the victim and
Examples are: sought to find fault in a student who had no ill
motive against him. Indeed, had he been modest
a. Sexual harassment; enough to own up to his first blunder, petitioner's
b. Fighting within the company premises; case would have gone an entirely different way.
c. Uttering obscene, insulting, or
offensive words against a superior; b) Did his dismissal constitute unfair
d. Falsification of time records; or labor practice?
e. Gross immorality.
A: NO. In Great Pacific Life Ees Union v. Great Pacific
Q: Delos Reyes was a university professor and Life Assurance Corporation, the Court discussed that
the president of the university’s Faculty and Ees if the unfair treatment does not relate to or affect the
Union, a duly registered labor union. An workers' right to self-organize, it cannot be deemed
administrative complaint for grave misconduct unfair labor practice. A dismissal of a union officer
was filed against him for using expletives at is not necessarily discriminatory, especially when
Paula Mae, a minor student at the university, that officer committed an act of misconduct. In fact,
when the latter was holding the doorknob on union officers are held to higher standards.
her way out of the faculty room, while he held
the doorknob on the other side. When Paula Mae In this case, petitioner’s dismissal, which was
stepped aside, Delos Reyes allegedly exclaimed brought about by his personal acts, does not
the words “anak ng puta” and walked on without constitute unfair labor practice as provided under
any remorse, causing emotional trauma to Paula the LC. Dismissing him was not meant to violate the
Mae. right of the university Ees to self-organize. Neither
was it meant to interfere with the Union's activities.
Delos Reyes denied the accusations against him Finally, petitioner cannot raise the defense that he
and filed a counter-complaint against Paula Mae was the Union's president; this does not make him
for maligning and tarnishing his established immune from liability for his acts of misconduct.
reputation in the university. A hearing was held (Adamson University Faculty and Employees Union v.
and later, Delos Reyes was issued a Notice of Adamson University, G.R. No. 227070, 09 Mar. 2020)
Dismissal.
Q: Escando, upset at his transfer to the washer
a) Was Delos Reyes validly dismissed? section, repeatedly uttered “Gago ka” and
2024 GOLDEN NOTES
threatened bodily harm to his superior Mr. respectable or moral. Substantial evidence must be
Andres. Is the utterance of the obscene words presented to prove that such conduct is considered
and threats of bodily harm gross and willful immoral. The two-step process to determine
misconduct? whether the conduct is immoral:
A: YES. The repeated utterances by Escando of 1. Consideration of the totality of the

obscene, insulting, or offensive words against a circumstances surrounding it; and
superior were not only destructive of the morals of 2. Assessment of said circumstances based on the
his co-Ees and a violation of the company rules and prevailing norms of conduct.
regulations, but also constitute gross misconduct,
which is one of the grounds provided by law to Pre-marital sexual relations between two
terminate the services of an Ee. (Autobus Workers consenting adults who have no impediment to
Union v. NLRC, G.R. No. 117453, 26 June 1998) marry each other, and, consequently, conceiving a
child out of wedlock, does not amount to a
Q: Samson made insulting and obscene disgraceful or immoral conduct.
utterances towards the General Manager saying,
“Si EDT bullshit yan, sabihin mo kay EDT yan” The SC further held that “when the law refers to
among others during the Christmas party. Are morality, it necessarily pertains to public and
the utterances towards the General Manager secular morality and not religious morality. And
gross misconduct? [F]or a conduct to be considered disgraceful or
immoral, it must be ‘detrimental to those conditions
A: The alleged misconduct of Samson when viewed upon which depends the existence and progress of
in its context is not of such serious and grave human society’ and not because the conduct is
character as to warrant his dismissal. Samson made prescribed by the beliefs of one religion or the
the utterances and obscene gestures at an informal other.” (Leus v. SSCW, G.R. No. 187226, 28 Jan. 2015)
Christmas gathering and it is to be expected during
this kind of gatherings, where tongues are often A teacher engaging in an extra-marital affair with
loosened by liquor of other alcoholic beverages, that another married person is a serious misconduct, if
Ees freely express their grievances and gripes not an immoral act. But a teacher falling in love with
against their Ers. Ees should be allowed wider her pupil and, subsequently, contracting a lawful
latitude to freely express their sentiments during marriage with him, though there is a disparity in
these kinds of occasions, which are beyond the their ages and academic level cannot be considered
disciplinary authority of the Er. (Samson v. NLRC, as a defiance of contemporary social mores. (Chua-
G.R. No. 121035, 12 Apr. 2000) Qua v. Clave. G.R. No. 49549, 30 Aug. 1990)
Q: Cheryll Leus was a non-teaching personnel Q: Jose and Erica, former sweethearts, both
employed in St. Scholastica’s College Westgrove worked as sales representatives for Magna, a
(SSCW). Cheryll and her boyfriend conceived a multinational firm engaged in the manufacture
child out of wedlock. SSCW dismissed her on the and sale of pharmaceutical products. Although
ground that her pregnancy out of wedlock the couple had already broken off their
constitutes disgraceful and immoral conduct relationship, Jose continued to have special
and ran counter to the moral principles that feelings for Erica. One afternoon, Jose chanced
SSCW stands for and teaches its students. Does upon Erica riding in the car of Paolo, a co-Ee and
pregnancy out of wedlock (without a legal Erica's ardent suitor; the two were on their way
impediment to marry) constitute immoral back to the office from a sales call on Silver Drug,
conduct as a ground for dismissal contemplated a major drug retailer. In a fit of extreme jealousy,
by law? Jose rammed Paolo's car, causing severe injuries
to Paolo and Erica. Jose's flare up also caused
A: NO. It is an immoral conduct if such does not heavy damage to the two company-owned cars
conform to what society generally views as they were driving. As lawyer for Magna, advise
2024 GOLDEN NOTES
the company on whether just and valid grounds misdeclaration of the amount in the bus ticket
exist to dismiss Jose. (2013 BAR) receipts and failure to remit the correct amount
clearly violated Genesis' policies and amounted
A: Jose can be dismissed for serious misconduct, to serious misconduct, fraud, and willful breach
violation of company rules and regulations, and of trust; thereby justifying his dismissal. Was
commission of a crime against the Er’s Rivera terminated with just cause?
representatives. For misconduct to be serious and
therefore a valid ground for dismissal, it must be of A: NO. Absent any other supporting evidence, the
grave and aggravated character and not merely error in a single ticket issued by petitioner can
trivial or unimportant and connected with the work hardly be used to justify the inference that he has
of the Ee. committed serious misconduct or has acted in a
manner that runs afoul of his Er's trust. Terminating
Q: Assuming this time that Magna dismissed Jose his employment on these unfounded reasons is
from employment for cause and you are the manifestly unjust. The social justice suppositions
lawyer of Jose, how would you argue the position underlying labor laws require that the statutory
that Jose's dismissal was illegal? (2013 BAR) grounds justifying termination of employment
should not be read to justify the view that bus
A: The offense committed by Jose did not relate to conductors should, in all cases, be free from any kind
the performance of his duties. For misconduct or of error. Not every improper act should be taken to
improper behavior to be a just cause for dismissal, justify the termination of employment. (Rivera v.
it: Genesis Transport Service Inc., and Moises, G.R. No.
215568, 03 Aug. 2015)
1. Must be serious;
2. Must relate to the performance of the Ee’s Willful Disobedience or Insubordination
duties; and
3. Must show that the Ee has become unfit to There is willful disobedience when there is wanton
continue working for the Er. disregard to follow orders of the Er.
Based on the forgoing guidelines, it can be Willful is characterized by a wrongful perverse

concluded that Paolo was not guilty of serious mental attitude rendering the Ee’s act inconsistent
misconduct. He was not performing official work at with the proper subordination (Lakpue Drug Inc. v.
the time of the incident. (Lagrosas v. Bristol Myers Belga, G.R. No. 166379, 20 Oct. 2005)
Squibb, G.R. No. 168637/170684, 12 Sept. 2008)
Additionally, there was no compliance with the The Ee’s disobedience must relate to substantial
rudimentary requirements of due process. matters, not merely to trivial or unimportant
matters. Disobedience to be considered willful must
Q: Rivera, a bus conductor of Genesis, was be resorted to without regard to its consequences.
dismissed on account of a discrepancy in the (DOLE Manual; BLTB Co. v. CA, G.R. No. L-38482, 18
amount he declared on bus ticket receipts. He June 1976; Family Planning Org. of the Phil. Inc. v.
reported and remitted the amount of P198.00 NLRC, G.R. No. 75907, 23 Mar. 1992)
instead of the admittedly correct amount of
P394.00 worth of bus ticket receipts. He averred Requisites of Willful Disobedience or
that it was an honest mistake, which he was Insubordination
unable to correct because the bus encountered
mechanical problems. 1. There must be disobedience or
insubordination;
Contending that this termination was arbitrary
and not based on just causes for terminating 2. The disobedience or insubordination must be
employment, he filed a complaint for illegal willful or intentional characterized by a
dismissal. Genesis claimed that Rivera's wrongful and perverse attitude;
2024 GOLDEN NOTES
an Ee who disobeys an order transferring him from
3. The order violated must be reasonable, lawful, one job or one location to another. The disobedience
and made known to the Ee; and and the consequent dismissal may or may not be
valid depending on the presence of the two
4. The order must pertain to the duties which he requisites. Disobedience of a valid transfer order
has been engaged to discharge. (Sec. 5.2(b), D.O. may justify dismissal; disobedience of an invalid
No. 147-15) transfer does not. (Azucena, 2016)
Valid Transfer NOTE: The refusal to obey a valid transfer order

constitutes willful disobedience of a lawful order of
GR: Management has the right to transfer or an Er. Ees may object to, negotiate, and seek redress
reassign an Ee. The right of the Er to transfer the Ees against Ers for rules or orders that they regard as
in the interest of the efficient and economic unjust or illegal. However, until and unless these
operation of its business cannot be seriously rules or orders are declared illegal or improper by
challenged. competent authority, the Ees ignore or disobey them
at their peril. But transfer should not result in
XPN: Where the transfer is vitiated by improper demotion of rank, which is tantamount to
motive and is merely a disguised attempt to remove constructive dismissal. (Manila Pavilion Hotel v.
or punish the Ee sought to be transferred. Delada, G.R. No. 189947, 25 Jan. 2012)
(Associated Labor Unions v. NLRC, G.R. Nos. 76916-
17, 31 Mar. 1983) Disobedience of an Inconvenient Transfer
Invalid Transfer GR: Inconvenience to the Ee does not necessarily

invalidate a transfer order.
The right to transfer personnel should not be used
as a subterfuge by the Er to rid himself of an NOTE: The transfer from one city to another within
undesirable worker. Nor when the real reason is to the country is valid if there is no bad faith on the part
penalize an Ee for his union activities and thereby of the Er. (Homeowners Savings and Loan
defeat his right to self-organization. (Pocketbell Association, Inc. v. NLRC, G.R. No. 97067, 26 Sept.
Philippines, Inc. v. NLRC, G.R. No. 106843, 20 Jan. 1996)
1995)
XPN: Inconvenience caused by unreasonableness of
In case of a constructive dismissal, the Er has the the transfer order makes the order itself invalid, and
burden of proving that the transfer and demotion of disobedience thereof is not a reason to dismiss the
an Ee are for valid and legitimate grounds such as worker.
genuine business necessity. Particularly, for a
transfer not to be considered a constructive An Er cannot legally be compelled to continue with
dismissal, the Er must be able to show that such the employment of a person admittedly guilty of
transfer is not unreasonable, inconvenient, or gross negligence in the performance of his duties. In
prejudicial to the Ee; nor does it involve a demotion this case, no amount of good intent, or previous
in rank or a diminution of his salaries, privileges, conscientious performance of duty, can assuage the
and other benefits. Failure of the Er to overcome this damage Mateo caused LBC when he failed to
burden of proof, the Ee's demotion shall no doubt be exercise the requisite degree of diligence required of
tantamount to unlawful constructive dismissal. him under the circumstances.(LBC Express v. Mateo.
(SIMIFRU v. Baya, G.R. No. 188269, 17 Apr. 2017) G.R. No. 168215, 09 June 2009)
Disobeying an Order to Transfer NOTE: The reasonableness and lawfulness of a rule,

order, or instruction depend on the circumstances
The requisites for willful disobedience must be availing in each case. Reasonableness pertains to the
observed with greater prudence before dismissing kind or character of directives and commands and
2024 GOLDEN NOTES
to the manner through which they are made. When she reported for training the next day,
(Escobin et al. v. NLRC et al., G.R. No. 118159, 15 Apr. Mariphil was informed that she could not be
1998) certified to handle calls for Bank of America due
to her failure to complete the training. From
Q: Is refusal to a promotion by an Ee an act of then on, she was placed on "floating status" and
insubordination or willful disobedience? was not given any work assignment. After a
month, the HR Manager tendered her
A. NO. There is no law that compels an Ee to accept resignation from work, effective upon receipt of
a promotion because a promotion is a gift or reward, the letter. Hence, Mariphil filed a complaint for
which a person has the right to refuse. The exercise constructive dismissal against ICT. Did ICT
of the Ee of the right to refuse a promotion cannot constructively dismiss Mariphil?
be considered in law as insubordination or willful
disobedience. (PT&T Corp. v. CA, G.R. No. 152057, 29 A: YES. In causing respondent's transfer, petitioner
Sept. 2003) clearly acted in bad faith and with discrimination,
insensibility, and disdain; the transfer was effected
Q: Escobin’s group were security guards based in as a form of punishment for her raising a valid
Basilan. They were placed in floating status and grievance related to her work. Furthermore, said
were asked to report for reassignment in Metro transfer was obviously unreasonable, not to
Manila by PISI. Upon failure to report or respond mention contrary to experience, logic, and good
to such directives, they were ordered dismissed business sense. This being the case, the transfer
from employment by PISI for willful amounted to constructive dismissal. The managerial
disobedience. Did the failure to report to Manila prerogative to transfer personnel must be exercised
amount to willful disobedience? without grave abuse of discretion, bearing in mind
the basic elements of justice and fair play. (ICT
A: NO. The reasonableness of the rule pertains to the Marketing Services, Inc. v. Mariphil L. Sales. G.R. No.
kind or character of directives and commands and 202090, 09 Sept. 2015)
to the manner through which they are made. In this
case, the order to report to the Manila office fails to Gross and Habitual Neglect Of Duties
meet this standard. The order to report to Manila
was inconvenient, unreasonable, and prejudicial to It implies a want or absence of or failure to exercise
Escobin’s group since they are heads of families diligence that an ordinary prudent man would use
residing in Basilan and they were not given in his own affairs.
transportation money or assurance of availability of
work in Manila. (Escobin v. NLRC, G.R. No. 118159, 15 Significantly, in order to constitute a just cause for
Apr. 1998) the Ees’ dismissal, the neglect of duties must not
only be gross but also habitual. Thus, the single or
Q: ICT Marketing Services, Inc. hired respondent isolated act of negligence does not constitute a just
Mariphil as its Customer Service Representative cause for the dismissal of the Ee. (National
(CSR) and assigned her to its Capital One Bookstore v. CA, G.R. No. 146741. 27 Feb 2002)
account. Later, Mariphil became a regular Ee.
Later on, Mariphil wrote to ICT’s Vice President Degree of Negligence as a Just Cause for
complaining about supposed irregularities in Termination
the handling of funds entrusted to ICT by
Washington Mutual. However, no action appears GR: Gross and habitual negligence.
to have been taken on her complaint. Mariphil
was then transferred to the Bank of America 1. Gross neglect has been defined as the want or
account where she was required to attend a absence of or failure to exercise slight care or
training seminar for six days. On the third day of diligence, or the entire absence of care. It
training, Mariphil was unable to attend. evinces a thoughtless disregard of
consequences without exerting any effort to
2024 GOLDEN NOTES
avoid them. (NBS v. Court of Appeals. G.R. No. be held accountable for the losses of petitioner
146741, 27 Feb. 2002) due to the aforementioned shortage and why no
appropriate action should be taken against
2. Habitual neglect implies repeated failure to them." Dolora and Merlinda were initially served
perform one’s duties over a period of time, with notices of suspension, followed by their
depending upon the circumstance. (JGB and termination from employment, allegedly for
Associates v. NLRC, G.R. No. 10939, 07 Mar. 1996) gross and habitual neglect of duty. Is there just
cause for the dismissal of Dolora and Merlinda?
XPN: An Ee who was grossly negligent in the
performance of his duty, though such negligence A: YES. In any case, while the rule is that a single or
committed was not habitual, may be dismissed isolated act of negligence is not sufficient to
especially if the grossly negligent act resulted in constitute a just cause for the dismissal of the Ee, the
substantial damage to the company. (LBC Express v. same, however, is not absolute. An infraction, even if
Mateo. G.R. No. 168215, 09 June 2009) not habitual, may warrant a dismissal under
appropriate circumstances. In this case, the Court
NOTE: To justify the dismissal of an Ee for neglect of finds, under the circumstances pertaining herein,
duties, it does not seem necessary that the Er show that it was just and reasonable for petitioner to
that he has incurred actual loss, damage or dismiss respondents even, assuming, that it was the
prejudice by reason of the Ee’s conduct. It is first time that they committed the infraction. The
sufficient that the gross and habitual neglect by the Court considers two important factors. First is the
Ee of his duties tends to prejudice the Er’s interest quantity and the substantial amount or value of the
since it would be unreasonable to require the Er to merchandise lost, amounting to P509,044.00.
wait until he is materially injured before removing Second, respondents' position is necessarily one of
the cause of the impending evil. (DOLE Manual, Sec. trust and confidence. Petitioner cannot legally be
4343.01 (27)) compelled to continue with the employment of
respondents who are entrusted with the care,
Q: Antiola, as assorter of baby infant dress for custody, and safekeeping of high-end cosmetic
Judy Phils., erroneously assorted and packaged products, but who just committed gross negligence
2,680 dozens of infant wears. Antiola was which resulted to missing assigned products
dismissed from employment for this infraction. amounting to an enormous amount of around half a
Does the single act of misassortment constitute million pesos. Clearly, respondents' continued
gross negligence? tenure is patently inimical to the petitioner's
business interest. (Rustan’s Commercial Corporation
A: NO. Such neglect must not only be gross but also v. Raysag, G.R. No. 219664, 12 May 2021)
habitual in character. Hence, the penalty of dismissal
is quite severe considering that Antiola committed Failure in Performance Evaluations
the infraction for the first time. (Judy Phils. v. NLRC,
G.R. No. 111934, 29 Apr. 1998) As a general concept, “poor performance” is
equivalent to inefficiency and incompetence in the
Q: Dolora and Merlinda are Ees of Rustan’s performance of official duties. The fact that an Ee’s
Makati, assigned as Inventory Specialists at the performance is found to be poor or unsatisfactory
Cosmetics, Perfumeries & Toiletries (CP & T) does not necessarily mean that the Ee is grossly and
stockroom of Rustan’s Department Store. When habitually negligent of his duties. Gross negligence
there was shortage in the inventory of the CP&T implies a want or absence of or failure to exercise
merchandise, Rustan’s sent Notices to Explain to slight care of diligence or the entire absence or care.
Dolora and Merlinda in reference to a report He evinces a thoughtless disregard of consequences
provided concerning the variance in the without exerting any effort to avoid them. (Eastern
inventory of concerned beauty cosmetics Overseas Employment Center Inc. v. Bea, G.R. 143023,
merchandise. Accordingly, Dolora and Merlinda 29 Nov. 2005)
were required "to explain why they should not
2024 GOLDEN NOTES
“Unsatisfactory Rating” can be a just cause for Abandonment as a Just Cause for Termination
dismissal only if it amounts to gross and habitual
neglect of duties. (Azucena, 2016) It means deliberate and unjustified refusal of an Ee
to resume his employment.
Requisites of Poor Performance as a Ground for
Termination Requirements for a Valid Finding of
Abandonment
1. Er must prove that it has set standards of
performance expected of the Ee; To establish abandonment, the Er must prove that:
2. The standards must have been made known to 1. The Ee must have failed to report for work or
the Ee; must have been absent without valid or
justifiable reason; and
3. These standards must be reasonable and in
connection with the Ee’s work; and 2. That there must have been a clear intention on
the part of the Ee to sever the Er-Ee relationship
4. There must be proof that the Ee failed to meet manifested by some overt act. (Philippine
the standards despite the given reasonable National Bank v. Bulatao, G.R. No. 200972,
opportunity to meet the same. December 11, 2019)
Inefficiency as a Just Cause for Dismissal How to Prove Abandonment
Failure to observe prescribed standards of work or Abandonment is proven when the Er has shown that
to fulfill reasonable work assignments due to the Ee deliberately and unjustifiably refused to
inefficiency may constitute just cause for dismissal. resume his employment without any intention of
Such inefficiency is understood to mean failure to returning. There must be a concurrence of the
attain work goals or work quotas, either by failing to intention to abandon and some overt acts from
complete the same within the allotted reasonable which an Ee may be deduced as having no more
period, or by producing unsatisfactory results. intention to work. The law, however, does not
(Buiser v. Leogardo, G.R. No. L-63316, 31 July 1984) enumerate what specific overt acts can be
This ground is considered analogous to those considered as strong evidence of the intention to
enumerated under Art. 297. (Skippers United Pacific sever the Ee-Er relationship. (Sta. Catalina College v.
v. Magud, G.R. No. 166363, 15 Aug. 2006) NLRC, G.R. No. 144483, 19 Nov. 2003)
Q: Gamido was a quality control inspector of VH NOTE: In case of abandonment, the ER is still
Manufacturing. Gamido was allegedly caught by required under the law to notify the Ee of his
the company Pres. Dy Juanco of sleeping and was termination. There is still a need to observe the two-
dismissed from employment. Did Gamido’s act notice rule and opportunity to be heard
of sleeping on the job constitute a valid cause of requirement. (New Puerto Commercial v. Lopez, G.R.
dismissal? NO. 169999, 26 July 2010)
A: NO. Sleeping on the job as a valid ground for Q: Mejila, a barber at Windfield Barber Shop,
dismissal only applies to security guards whose had an altercation with a fellow barber, which
duty necessitates them to be always awake and resulted in his subsequent turning over the
watchful. Gamido’s single act of sleeping further duplicate keys of the shop to the cashier, took
shows that the alleged negligence or neglect of duty away all his belongings therefrom, and worked
was neither gross nor habitual. (VH Manufacturing at different barbershop. Mejila then filed an
v. NLRC, G.R. No. 130957, 19 Jan. 2000) illegal dismissal case but did not seek
reinstatement as a relief. Did Mejila commit
abandonment?
2024 GOLDEN NOTES
A: YES. Mejila’s acts such as surrendering the shop’s through job orders. He worked from Monday to
keys, not reporting to the shop anymore without any Saturday, but there were times when he was
justifiable reason, his employment in another required to work on Sundays. Leron received his
barber shop, and the filing of a complaint for illegal wages at the end of every week but he never
dismissal without praying for reinstatement clearly received standard benefits such as 13th month
show that there was a concurrence of the intention pay, service incentive leave, rest day pay, holiday
to abandon and some overt acts from which it may pay, and overtime pay. Later, Leron was
be inferred that the Ee concerned has no more dismissed, thus, he filed a complaint for illegal
interest in working. (Jo v. NLRC, G.R. No. 121605, 02 dismissal. Demex justifies Leron’s dismissal on
Feb. 2000) the ground of abandonment, arguing that
Leron’s unauthorized absences, non-compliance
Q: The Ees averred that they were underpaid and with the return-to-work notices, and alleged act
filed a complaint for money claims against the Er of crumpling the first return-to-work notice are
before the LA. As a result of their complaint, they indicators of his intention to sever his
were relieved from their posts and were not employment. Was there a valid dismissal?
given new assignments despite the lapse of six
months. On the other hand, the Er maintains A: NO. The dismissal was invalid because Demex’s
that the Ees were not dismissed but were merely evidence does not clearly establish a case of
transferred to a new post and voluntarily abandonment. It failed to prove the second element
abandoned their jobs when they failed to report of abandonment. Abandonment of work has been
for duty in the new location. Upon termination, construed as a “clear and deliberate intent to
the Ee moved to file a joint complaint for illegal discontinue one's employment without any
dismissal. Is there a valid indication of intention of returning back." To justify the dismissal
abandonment from work? of an Ee on this ground, two (2) elements must
concur, namely: "(a) the failure to report for work or
A: NO. For abandonment of work to fall under Art. absence without valid or justifiable reason; and (b)
297 of the LC, as gross and habitual neglect of duties a clear intention to sever the Er-Ee relationship."
there must be the occurrence of two elements: first,
there should be a failure of the Ee to report for Mere failure to report to work is insufficient to
works without a valid or justifiable reason and support a charge of abandonment. The Er must
second, there should be a showing that the Ee adduce clear evidence of the Ee's "deliberate,
intended to sever the Er-Ee relationship, the second unjustified refusal to resume employment,'' which is
element being the more determinative factor as manifested through the Ee's overt acts. (Demex v.
manifested by overt acts. Leron, G.R. No. 204288, 08 Nov. 2017)
The Er cannot simply conclude knowledge that an Q: Santos and Salmasan were employed by King
Ee is ipso facto notified of a transfer when there is Chef. On 25 Dec. 2011, Santos rendered only a
no evidence to indicate that the Ee had knowledge half day work without prior authorization.
of the transfer order. Hence, the failure of an Ee to Salmasan, on the other hand, did not report at
report for work at the new location cannot be taken all. They claimed that in view thereof, they were
against him as an element of abandonment. In dismissed from employment. They averred that
addition to these tests for valid transfer, there when they tried to report for work, their chief
should be proper and effective notice to the Ee cook told them that they were already
concerned. It is the Er’s burden to show that the Ee terminated.
was duly notified of the transfer. (Alert Security and
Investigation Agency, Inc. v. Pasawilan, G.R. No. King Chef through his General Manager averred
182397, 14 Sept. 2011) that Santos and Salmasan violated the
memorandum informing the Ees of King Chef
Q: Leron was hired as a weaver by Demex. He is that no absences would be allowed on Dec. 25,
paid on a piece-rate basis and is contracted 26, 31 and Jan. 1 unless justified. After
2024 GOLDEN NOTES
petitioners failed to report for work on 25 Dec. negligence. (School of the Holy Spirit of Quezon City
2011, and returned the following day merely to v. Taguiam, G.R. No. 165565, 14 July 2008)
get their share in the accrued tips, they allegedly
went on absence without leave (AWOL) for the Requisites of Fraud or Willful Breach of Trust
rest of the Christmas season. Rule on the
contention of King Chef’s General Manager on 1. There must be an act, omission, or
the matter of AWOL. concealment;
A: The contention of King Chef’s General Manager is 2. The act, omission, or concealment involves a
unmeritorious. For the claim that Santos and breach of legal duty, trust, or confidence justly
Salmasan went AWOL, the Er must prove that first, reposed;
the Ee "failed to report for work for an unjustifiable
reason," and second, the "overt acts showing the Ee's 3. It must be committed against the Er or his/her
clear intention to sever their ties with their Er." representative; and
In the present case, was no showing here that Santos 4. It must be in connection with the Ee’s work.
and Salmasan’s absences were due to unjustifiable (Sec. 5.2 (d), DO No. 147-15)
reason, or that petitioners clearly intended to
terminate their employment. Thus, there is no Examples are:
abandonment present. (Santos, Jr. v. King Chef, G.R.
No. 211073, 11 Dec. 2020) a. Head supervisor initiating and leading
a boycott
Gross Negligence vs. Habitual Neglect b. Habitual absence of managerial Ee
c. Failure of cashier to account for the
The former connotes want of care in the shortage of company funds
performance of one’s duties while the latter implies d. Complicity in the attempt to cover up
repeated failure to perform one’s duties over a pilferage of the company’s toll
period of time, depending upon the circumstances. collections
(Azucena, 2016) e. Stealing company property
f. Using double or fictitious requisition
Fraud slips in order to withdraw company
materials
Fraud, in its general sense, is deemed to comprise
anything calculated to deceive, including all acts, Loss of Confidence
omissions, and concealment involving a breach of
legal or equitable duty, trust, or confidences justly There is loss of confidence when the Er has
reposed, resulting in damage to another, or by which reasonable ground or has reason to believe that the
an undue and unconscientious advantage is taken of Ee is responsible for the misconduct and the nature
another. Deceit is a species of fraud. (Galvez v. CA, of his participation renders him unworthy of the
G.R. No. 187919, 25 Apr. 2012) trust and confidence demanded by his position.
Proof beyond reasonable doubt it not required.
Willful Breach of Trust (Jerusalem v. Keppel Monte Bank, G.R. No. 169564, 06
Apr. 2011)
A breach is willful if it is done intentionally,
knowingly, and purposely without justifiable excuse,
as distinguished from an act done carelessly,
thoughtlessly, heedlessly, and inadvertently. (Austria
v. NLRC, G.R. No. 124382, 06 Aug. 1999) But loss of
trust or confidence can be based on gross
2024 GOLDEN NOTES
Requisites of Loss of Confidence some of the rigid guaranties available to
ordinary workers. (Manese v. Jollibee Foods
1. There must be an act, omission or concealment; Corporation, G.R. No. 1704 54, 11 Oct. 2012)
2. The act, omission or concealment justifies the b. Ees routinely charged with the care and
loss of trust and confidence of the employer to custody of the Er’s money or property – To
the employee; this class belong cashiers, auditors, property
custodians, etc., or those who, in the normal
3. The employee concerned must be holding a and routine exercise of their functions,
position of trust and confidence; regularly handle significant amounts of
money or property. (Mabeza v. NLRC, G.R. No.
4. The loss of trust and confidence should not be 118506, 18 Apr. 1997)
simulated;
2. The loss of trust and confidence must be based
5. It should not be used as a subterfuge for causes on willful breach.
which are improper, Illegal, or unjustified; and
A breach is willful if it is done intentionally,
6. It must be genuine and not a mere afterthought knowingly, and purposely without justifiable
to justify an earlier action taken in bad faith. excuse, as distinguished from an act done
(Sec. 5.2 (d), DO No. 147-15) carelessly, thoughtlessly, heedlessly, or
inadvertently. (Dela Cruz v. NLRC, G.R. No.
Loss of Trust and Confidence as a Just Cause for 119536, 17 Feb. 1997)
Termination
3. The act constituting the breach must be “work-
1. It applies only to cases involving: related” such as would show the Ee concerned
to be unfit to continue working for the Er.
a. Ees occupying positions of trust and (Gonzales v. NLRC, G.R. No. 131653, 26 Mar.
confidence (confidential and managerial 2001)
Ee’s) – To this class belong managerial Ees,
i.e., those vested with the powers or 4. It must be substantial and founded on clearly
prerogatives to lay down management established facts sufficient to warrant the Ee’s
policies and/or to hire, transfer, suspend, separation from employment. (Sulpicio Lines
lay-off, recall, discharge, assign or discipline Inc. v. Gulde, G.R. No. 149930, 22 Feb. 2002)
Ees or effectively recommend such
managerial actions. 5. Fraud must be committed against the Er or his
representatives.
Position of trust and confidence is one where
a person is entrusted with confidence on Examples are:
delicate matters, or with the custody,
handling, or care and protection of the Er’s a. Falsification of timecards
property. (Pandoy v. NLRC, G.R. No. 67664, 20 b. Theft of company property
May 1992) and/or funds. (Gonzales v. NLRC, c. Unauthorized use of company vehicle
G.R. No. 131653, 26 Mar. 2001)
NOTE: The treatment of rank-and-file personnel
NOTE: The mere existence of a basis for the and managerial Ees in so far as the application of the
loss of trust and confidence justifies the Doctrine of Loss of Trust and Confidence is
dismissal of the managerial Ee because concerned is different. As regards managerial Ees,
when an Ee accepts a promotion to a such as Caoile, mere existence of a basis for
managerial position or to an office requiring believing that such Ee has breached the trust of his
full trust and confidence, such Ee gives up
2024 GOLDEN NOTES
Er would suffice for his dismissal. (Caoile v. NLRC, (Lufthansa Technik Philippines, Inc. v. Cuizon, G.R. No.
G.R. No. 115491, 24 Nov. 1998) 184452, 12 Feb. 2020
Guidelines for the Doctrine of Loss of Confidence Q: Is pecuniary gain a necessary element of
to Apply termination on account of loss of trust?
1. Loss of confidence should not be simulated A: NO. Even the return of misappropriated funds
(reasonable basis for loss of trust and will not negate valid dismissal for breach of trust.
confidence); The Court has held that misappropriation of
company funds, although the shortage has been
2. Not used for subterfuge for causes which are fully restored, is valid ground to terminate the
improper and/or illegal or unjustified; services of an Ee of the company for losss of trust
and confidence. (Santos v. San Miguel Corporation,
3. Not arbitrarily asserted in the face of G.R. No. 149416, 14 Mar. 2003)
overwhelming evidence to the contrary;
Q: Mary June CELIZ worked as Chief of Sales
4. Must be genuine, not a mere afterthought to concurrent with her position as Senior
justify earlier action taken in bad faith; and Operations Manager with CORD, INC. Celiz then
asked that she be allowed to resign. However,
5. The Ee involved holds a position of trust and upon clearance, the Accounting Department said
confidence. (Ramos v. Court of Appeals, G.R. No. that CELIZ needs to account the unliquidated
145405, 29 Jun. 2004) advances amounting to P713,471.00. She
liquidated her advances, but her accounting fell
Q: A, a duty manager was dismissed for alleged short of P445,272.93. Upon her failure to
loss of trust and confidence in his ability to account her advances, CORD, INC. dismissed
perform his duties. This is based on the fact of CELIZ for serious breach of trust and confidence.
his willful concealment of an accidental light-up CELIZ filed for illegal dismissal. Is the dismissal
aircraft and failure to observe the safety of CELIZ due to breach of trust and confidence
guidelines and precautions with respect to valid?
aircraft towing, where he allegedly misinformed
his immediate supervisor on a report “based on A: YES. The dismissal of CELIZ due to breach of trust
his personal findings.” Was A illegally and confidence was valid. In cases of dismissal for
dismissed? breach of trust and confidence, proof beyond
reasonable doubt of an Ee's misconduct is not
A: YES. The requisites for dismissal on the ground required. It is sufficient that the Er had reasonable
of loss of trust and confidence are: (1) the Ee ground to believe that the Ee is responsible for the
concerned must be holding a position of trust and misconduct, which renders him unworthy of the
confidence; (2) there must be an act that would trust and confidence demanded by his position. The
justify the loss of trust and confidence; and (3) such Court, upon review of the records of the case, found
loss of trust relates to the Ee's performance of that contrary to CELIZ’s contention, there was
duties. substantial evidence showing that the subject cash
advances were properly attributed to CELIZ and that
In the instant case, petitioners failed to substantially she failed to liquidate the same. In short, there was
prove the second requisite (i.e., there must be an act just cause to dismiss her from the service. (Celiz v.
that would justify the loss of trust and confidence). Cord Chemicals, Inc., G.R. No. 200352, 20 July 2016)
The facts that he transmitted in the report were the
most precise information that he could gather at
that time. He could not immediately conclude that
there was an accidental light-up because the same
had to be eventually confirmed using a boroscope.
2024 GOLDEN NOTES
Q: Is “Attitude Problem” a just cause to dismiss breached the trust and confidence of the Er is
an Ee? sufficient for managerial Ees.
A: YES. An Ee’s attitude problem is a valid ground A formal hearing only becomes mandatory in
for termination. It is a situation analogous to loss of termination cases when so required under company
trust and confidence that must be duly proved by rules or when the Ee requests for it. "To be heard"
the Er. Similarly, compliance with the twin does not mean verbal argumentation alone because
requirement of notice and hearing must also be one may be heard just as effectively through written
proven by the Er. (Azucena, Vol. II, 2016; Heavylift explanations, submissions or pleadings. In this case,
Manila v. CA, G.R. No. 154410, 20 Oct. 2005) respondent complied with all the requirements of
procedural due process in terminating petitioner's
Q: Mac was employed as a part-time teacher and employment, it furnished a show cause memo
comptroller of Elysen College. A committee was stating the specific grounds for dismissal and
created to formulate a new "ranking system for required him to answer the charges by submitting a
non-academic Ees for school year 2020-2021. He written explanation. (Yolando Bravo v. Urios College
then directed to arrange a salary adjustment Now Father Saturnino Urios University, G.R. No.
schedule for the new ranking system to the 198066, 07 June 2017)
committee organized.
Q: Salvacion A. Lamadrid was a cabin crew of
Later, he obtained his Ee ranking slip which Cathay Pacific, serving the airlines for about 17
showed his evaluation score and the change of years. On 19 May 2007, Donald Lal (Lal), Airport
his rank "from office head to middle manager- Services Officer of Cathay in Sydney Airport,
level IV', this was prepared however without received a report from Customer Officer Mary
prior approval from the Human Resource Greiss (Mary) that some crew members of
Department. On 25 July 2020, Elysen College Cathay flight CX 139, including Lamadrid, were
notified Mac of its decision to terminate his caught in possession of goods after alighting
services for serious misconduct and loss of trust from the aircraft. Mary handed to Lal a plastic
and confidence. bag containing a 1.5 liter Evian water bottle and
a pile of magazines confiscated from Lamadrid
Upon receipt of the termination letter that reads as well as the photocopy of the latter's passport.
"For this reason, you are advised to explain or Cathay Pacific asked Lamadrid to explain.
show cause why your employment with Elysen
College will not be terminated for Serious Lamadrid denied the allegations against her. She
Misconduct due to intentional misclassification claimed that the Hello magazine which was
or miscomputation of your salary and some Ees confiscated from her was not Cathay's property.
named hereunder, thereby causing prejudice She clarified that she brought and declared the
not only to the school but also to said Ees as bottle of Evian water as her own. She denied
well", Mac immediately filed before Executive having committed serious misconduct, and
LA. Was Mac illegally dismissed? demanded that the items taken from her be
preserved following a fair and transparent
A: NO. Mac was validly dismissed based on loss of investigation. Cathay then informed Lamadrid of
trust and confidence. Mac was not an ordinary rank- the termination of her services effective
and-file Ee. His position of responsibility on delicate immediately for committing serious misconduct
financial matters entailed a substantial amount of by removing company property without
trust from respondent. The preparation of the authorization. According to Cathay, it could no
payroll is a sensitive matter requiring attention to longer repose its trust and confidence on
detail. The alleged misconduct for loss of trust and petitioner considering the seriousness of her
confidence is sufficient to warrant the dismissal of violation. Hence, Lamadrid instituted a
fiduciary rank-and-file Ees. However, mere complaint for illegal dismissal. Was Lamadrid
existence of a basis for believing that the Ee has illegally dismissed?
2024 GOLDEN NOTES
A: YES. Lamadrid's position as a Senior Purser is as the element of relation to his work or to his Er is
imbued with trust and confidence. Ees can be lacking.
terminated only for just or authorized cause. Art
297 (now Art. 282) of the LC enumerates the just Requisites of Commission of a Crime or Offense
causes for dismissal, among others, fraud, or willful
breach by the Ee of the trust reposed in him by his 1. There must be an act or omission
Er or duly authorized representative. punishable/prohibited by law; and
Lamadrid's infraction was clearly a case of 2. The act or omission was committed by the Ee
misconduct considering that it is a dereliction of against the person of the Er, any immediate
duty, willful in character, and implies wrongful member of his/her family, or his/her duly
intent and not mere error in judgment. It evidently authorized representative. (Sec. 5.2(f), D.O. No.
eroded Cathay's trust and confidence in her. 147-15)
However, while the weight of evidence points to
Lamadrid's infraction of company policy, it should An Er’s immediate family shall refer to the
also be considered that this is Lamadrid's first spouse, ascendants, descendants or legitimate,
infraction in her 17 years of service in the airline natural, or adopted brothers or sisters of the Er
which involved a mere bottle of water. Concededly, or of his relative by affinity in the same degrees,
the company laid down the penalties for violation of and those by consanguinity within the fourth
its policies; however, the evaluation of an Ee's civil degree. (Art. 11(2), RPC)
infraction should be dealt with fairness and reason.
Simply put, all surrounding circumstances must be NOTE: A criminal case need not be filed.
considered, and the penalty must be commensurate Commission of acts constituting a crime itself is
to the violation committed by an Ee. Termination of sufficient. (National Labor Union, Inc. v. Standard
the services of an Ee should be the Er's last resort Vacuum Oil Company. G.R. No. L-48170, 10 Oct. 1941)
especially when other disciplinary actions may be
imposed, considering the Ee's long years of service Conviction Not a Condition Sine Qua Non
in the company, devoting time, effort, and invaluable
service in line with the Er's goals and mission, as in The conviction of an Ee in a criminal case is not
Lamadrid's case. indispensable to warrant his dismissal by his Er.
(Starlite Plastic Industrial Corporation v. NLRC. G.R.
During Lamadrid's span of employment, she did not No. 78491, 16 Mar. 1989)
commit any infraction or was ever sanctioned
except in the incident subject of the present Rationale: The quantum of evidence needed is
controversy. To impose a penalty as grave as merely substantial evidence to terminate an Ee
dismissal for a first offense and considering the under these grounds.
value of the property allegedly taken would be too
harsh under the circumstances. Therefore, Criminal Complaint Separate and Distinct from
Lamadrid was illegally dismissed from service. the Labor Complaint
(Lamadrid v. Cathay Pacific Airways Limited, G.R. No.
200658, 23 June 2021) A reading of Labor Arbiter Madriaga's decision
shows that he merely based the resolution of the
Commission of a Crime or Offense complaint for illegal dismissal from the verdict of
acquittal in the criminal case against Nicolas. This
This refers to an offense committed by the Ee reliance in the result of the criminal case, however,
against the person of his Er or any immediate leaves much to be desired. The criminal case for
member of his family or his duly authorized estafa and the complaint for illegal dismissal deal
representative and thus, conviction of a crime with two different issues cognizable by two different
involving moral turpitude is not analogous thereto tribunals. Indeed, these two cases respectively
require distinct and well-delineated degrees of
2024 GOLDEN NOTES
proof. Examples of Analogous Cases
Under the law, proof beyond reasonable doubt is 1. Violation of company rules and regulations;
required to sustain a criminal conviction, an 2. Immorality, Drunkenness or Fighting inside
inapplicable requirement in a labor complaint. In the premise;
fact, and as correctly ruled by the NLRC, the 3. Gross inefficiency;
judgment in a criminal case has no binding or 4. Illegally diverting Er’s products;
conclusive effect in a labor case. Conviction of an 5. Failure to heed an order not to join an illegal
employee in a criminal case is not indispensible to picket;
warrant an employees dismissal. Thus, we feel that 6. Violation of safety rules and code of discipline;
the Labor Arbiter erred in basing his decision 7. Theft of company property;
exclusively on the outcome of the criminal case. 8. Theft of property owned by co-Ee;
9. Failure to attain work quota; and
The Labor Arbiter is duly bound to make his findings 10. Attitude problem. (Chan, 2019)
of facts after the presentation and due consideration
of all the pertinent circumstances and evidence of NOTE: To fall within the ambit of “analogous cases”
the case. And this is precisely what Rule V, Sec. 16 of the act or omission must have an element like those
the NLRC Rules of Procedures requires. We thus find found in the specific just causes enumerated under
the NLRC's order remanding the case to the Art. 297. (International Rice Research Institute v.
Arbitration Branch of origin to thresh out pertinent NLRC, G.R. No. 97239, 12 May 1993)
factual matter no usually renewable in a special civil
action for certiorari, as in this case, to be untainted Past Offenses
with grave abuse of discretion. (Nicolas v. NLRC, G.R.
No. 113948, 05 July 1996) Previous offenses may be used as a valid
justification for dismissal from work only if the
Analogous Causes infractions are related to the subsequent offense
upon which the basis the termination of
For an act to be included in analogous cases of just employment is decreed. (Stellar Industrial Service
causes of termination, it must be due to the Inc. v. NLRC, G.R. No. 117418. 24 Jan. 1996)
voluntary and/or willful act or omission of the Ee.
(Nadura v. Benguet Consolidated, G.R. No. L-17780, Doctrine of Incompatibility
24 Aug. 1962)
Where the Ee has done something that is contrary
Requisites of Analogous Cases or incompatible with the faithful performance of his
duties, his Er has a just cause for terminating his
1. There must be an act or omission similar to employment. (Manila Chauffeur’s League v.
those specified just causes; and Bachrach Motor Co., G.R. No. L-47071, 29 June 1940)
2. The act or omission was voluntary and/or Doctrine of Commensurate Penalty or

willful on the part of the Ees. (Sec. 5.2 [g], D.O. “Proportionality Rule”
No. 147-15)
In this regard, it is a hornbook doctrine that
NOTE: No act or omission shall be considered as infractions committed by an Ee should merit only
analogous cause unless expressly specified in the the corresponding penalty demanded by the
company rules and regulations or policies. (Sec. 5.2 circumstance. The penalty must be commensurate
[g], D.O. No. 147-15) with the act, conduct or omission imputed to the Ee
and must be imposed in connection with the
disciplinary authority of the Er. (Sagales v. Rustans
Commercial Corporation, G.R. No. 166554, 27 Nov.
2008)
2024 GOLDEN NOTES
Factors that Can Be Considered Due Process Requirements
1. Length of service; As defined in Arts. 298 and 299 of the LC, the
2. Gravity of the offense; requirements of due process shall be deemed
3. Nature of the position; complied with upon service of a written notice:
4. Nature of the business;
5. First offense rule; 1. To the Ee
6. Totality of infractions; 2. To the appropriate DOLE Regional Office at least
7. Principle of charity, compassion and thirty days before the effectivity of the
understanding; and termination, specifying the ground or grounds
8. Principle of equity. for termination.
Q: Mapili works as a bus conductor for Authorized Causes of Termination by the

Philippine Rabbit Bus Lines, Inc. While on duty Employer
en route from Manila to Pangasinan, a PRBLI
field inspector caught Mapili extending a free 1. Installation of labor-saving devices;
ride to a co-Ee’s wife. Noting that this was 2. Redundancy;
already the third time that Mapili committed the 3. Retrenchment ;
said violation, the company terminated his 4. Closing or cessation of operation of the
employment. Is Mapili illegally dismissed? establishment or undertaking; and
5. Disease.
A: NO. It is apparent that the bus conductor is aware
that the infraction he committed constituted a grave Installation of Labor-Saving Devices or
offense, but he persisted in committing the same out Automation
of gratitude to the passenger. Hence, there was a
deliberate intent on the part of the petitioner to Automation is a management prerogative of
commit the violation. An Ee’s propensity to commit replacing manpower with machine power in order
repetitious infractions evinces wrongful intent, to effect more economy and greater efficiency in
making him undeserving of the compassion method of production.
accorded by law to labor; thus, dismissal of said Ee
would be justified. (Jerry Mapili v. Philippine Rabbit Requisites for a Valid Automation
Bus Lines, Inc., G.R. No. 172506, 27 July 2011)
1. There must be introduction of machinery,
Guidelines to Determine the Validity Of equipment or other devices;
Termination
2. The introduction must be done in good faith;
Validity of termination per se is determined by
compliance with two-notice rule, hearing 3. The purpose for such introduction must be valid
(opportunity to be heard), and the presence of a just such as to save on cost, enhance efficiency and
or authorized cause. other justifiable economic reasons;
4. There is no other option available to the Er than

2. AUTHORIZED CAUSES
the introduction of machinery, equipment or
(Arts. 298-299, LC; DOLE D.O. No. 147-15)
device and the consequent termination of
employment of those affected thereby; and
Authorized causes are initiated by the Er’s exercise
of management prerogative, who shall be liable to
5. There must be fair and reasonable criteria in
pay separation pay as mandated by law. It does not
selecting Ees to be terminated. (Sec. 5.4 (a), D.O.
usually require delinquency or culpability on the No. 147-15)
part of the Ee.
2024 GOLDEN NOTES
Robotics Requisites of Redundancy
It is the switch from “men” employment to 1. There must be superfluous positions or services
‘mechanical’ employment. of Ees;
The purpose for such installation must be valid such 2. The positions or services are in excess of what
as to save on cost, enhance efficiency, and other is reasonably demanded by the actual
justifiable economic reasons. (Chan, 2019) requirements of the enterprise to operate in an
economical and efficient manner;
Reduction of the number of workers in a company’s
factory made necessary by the introduction of 3. There must be good faith in abolishing
machinery in the manufacture of its products is redundant positions;
justified. There can be no question as to the right of
the manufacturer to use new labor-saving devices 4. There must be fair and reasonable criteria in
with a view to affect more economy and efficiency in selecting the Ees to be terminated; and
its method of production. (Philippine Sheet Metal
Workers’ Union v. CIR. G.R. No. L-2028; 28 Apr. 1949) 5. There must be an adequate proof of redundancy
such as but not limited to the new staffing
Redundancy patters, feasibility studies or proposal, on the
viability of the newly created positions, job
It is the superfluity in the performance of a description and the approval by the
particular work. It exists where the services of an Ee management of the restructuring.
are in excess of what is reasonably demanded by the
actual requirements of the enterprise. Procedure
Redundancy in an Er’s personnel does not 1. Written notice served on both the Ees and the
necessarily or even ordinarily refer to duplication of DOLE at least one (1) month prior to separation
work. The characterization of services as no longer from work;
necessary or sustainable and therefore properly
terminable, was an exercise of business judgment on 2. Payment of separation pay equivalent to at least
the part of the Er. The Er has no legal obligation to one (1) month pay or to at least one (1) month
keep in its payroll more Ees that are necessary for pay for every year of service, whichever is
the operation of its business. (Wiltshire File Co., Inc. higher;
v. NLRC, G.R. No. 82249, 07 Feb. 1991) 3. Good faith in abolishing redundant position;
and
NOTE: A position is redundant when it is
superfluous. Superfluity is the outcome of some 4. Fair and reasonable criteria in ascertaining
factors: what positions are to be declared redundant.
(SPI Technologies v. Mapua, G.R. No. 191154, 07
1. Overhiring of workers; Apr. 2014)
2. Decline in volume of business;
3. Closure of a particular product line of an NOTE: Fair and reasonable criteria may include
economic activity previously engaged by the Er; the following, but not limited to:
and
4. Phasing out of service activity priorly a. Less preferred status, e.g., temporary
undertaken by the business. (Chan, 2019) Ee
b. Efficiency
c. Seniority (Golden Thread Knitting
Industries, Inc. v. NLRC, G.R. No. 119157,
11 Mar. 1999)
2024 GOLDEN NOTES
Q: Matiere SAS hired Acosta as Technical Matiere SAS complied with the first and second
Assistant. Uner the Employment Agreement requisites; notifying both Acosta and DOLE at least
Acosta was tasked to: (1) Prepare reports a month prior planned redundancy and providing
regarding Woodfields Consultants, Inc. (WCI) Acosta computation of his separation pay. However,
consultants; (2) Be the intermediary between the third and fourth requisites are wanting. To
the operators in WCI and the management; (3) establish good faith, the company must provide
Attend coordination meetings; (4) Evaluate substantial proof that the services of the Ees are in
billings; (5) Follow the SIT and prepare reports; excess of what is required of the company, and that
and (7) Site visits. fair and reasonable criteria were used to determine
the redundant positions. Here, Matiere SAS' only
Later, Matiere SAS sent a letter to Acosta basis for declaring Acosta's position redundant was
informing him that his employment contract that his function, which was to monitor the delivery
will end on 31 July 2013 due to the cessation of of supplies, became unnecessary upon completion
the company’s delivery operations and the of the shipments.
diminution of activities and that it cannot find
any reinstatement at the office. He also received However, upon scrutiny, the Employment
a calculation of his separation pay. On 26 June Agreement itself contradicts Matiere SAS'
2013, Matiere SAS informed DOLE that it would allegation. Under Acosta's job description listed in
have to terminate five (5) of its workers which his tasks as a technical assistant, there was no
includes Acosta. Matiere SAS also filed an mention of monitoring shipments. If his work
Establishment Employment Report, citing pertains mainly to the delivery of supplies, it should
redundancy and the completion of delivery of have been specifically stated in his job description.
supplies as its reasons for dismissing its Ees. There was no basis for respondents to consider his
position irrelevant when the shipments had been
Acosta filed a complaint to NLRC for illegal completed.
dismissal alleging that the declaration of
redundancy of his position was not based on fair Matiere SAS also failed to show that they used fair
and reasonable criteria pointing out that he, the and reasonable criteria in determining what
most senior engineer, was dismissed while the positions should be declared redundant. Although
other engineers remained. Was Acosta validly Acosta was among the five (5) Ees dismissed, he
dismissed on the ground of redundancy? cannot be similarly situated with the other Ees since
his duty is not limited to the monitoring of
A: NO. Redundancy is recognized as one of the deliveries. Accordingly, this Court declares
authorized causes for dismissing an Ee under the LC petitioner to have been illegally dismissed. (Acosta
as provided under Art. 298. v. Matiere SAS and Philippe Gouvary, G.R. No. 232870,
03 June 2019)
For the implementation of a redundancy program to
be valid, the Er must comply with the following Redundancy in Bad Faith
requisites: (1) written notice served on both the Ees
and the Department of Labor and Employment at The Ee was terminated on the ground of
least one month prior to the intended date of redundancy. But it was found out that the Er had
retrenchment; (2) payment of separation pay been hiring new Ees while it was firing the old ones,
equivalent to at least one month pay or at least one negating the claim of redundancy. (General Milling
month pay for every year of service, whichever is Corp., v. V.L. Viajar, G.R. No. 181738, 30 Jan. 2013)
higher; (3) good faith in abolishing the redundant
positions; and (4) fair and reasonable criteria in NOTE: Jurisprudence provides that “basic is the
ascertaining what positions are to be declared principle that good faith is presumed and he who
redundant and accordingly abolished. alleges bad faith has the duty to prove the same.” By
imputing bad faith to the actuations of [the Er], [the
Ee] has the burden of proof to present substantial
2024 GOLDEN NOTES
evidence to support the allegation of unfair labor in terms of salaries and wages to prevent
practice. (Culili v. Eastern Telecommunications Phil., bankruptcy of the company. (Poquiz, 2018)
G.R. No. 165381, 09 Feb. 2011)
Cutting of expenses includes the reduction of
Q: Pantoja was assigned at SCA Corporation’s personnel; it is a management prerogative, a means
Paper Mill No. 4, the section that manufactures to protect and preserve the Er’s viability and ensure
the company’s industrial paper products. In a his survival. To be an authorized cause it must be
Notice of Transfer, SCA informed Pantoja of its effected in good faith and for the retrenchment,
reorganization plan and offered him a position which is after all a drastic recourse with serious
at Paper Mill No. 5 under the same terms and consequences for the livelihood of the Ee is or
conditions of employment in anticipation of the otherwise laid-off. (Poquiz, 2018)
eventual closure and permanent shutdown of
PM No. 4 due to financial difficulties brought Two Kinds of Losses Justifying Retrenchment
about by the low volume of sales and orders.
However, Pantoja rejected the offer of transfer. A 1. Incurred Losses – refer to losses that have
notice of termination of employment was sent to already occurred, thus are reflected in the
Pantoja as his position was declared redundant financial statements
by the closure of PM No. 4. SCA informed the
DOLE of its reorganization and partial closure. 2. Expected or Future Losses – refer to losses that
Petitioner filed a complaint for illegal dismissal have not yet occurred, thus are not reflected in
assailing his termination as without any valid the financial statements.
cause. Was the petitioner illegally dismissed?
Thus, in Waterfront Cebu City Hotel v. Jimenez, (G.R.
A: NO. Exercising its management prerogative and No. 174214, 13 June 2012), the Court held that
sound business judgment, SCA decided to cut down retrenchment must be reasonably necessary and
on operational costs by shutting down one of its likely to prevent business losses which, if already
paper mills. The abolishment of PM No. 4 was a incurred, are not merely de minimis, but substantial,
business judgment arrived at in the face of the low serious, actual and real, or if only expected, are
demand for the production of industrial paper at the reasonably imminent as perceived objectively and in
time. Despite an apparent reason to implement a good faith by the employer. (Sanoh Fulton Phils. v.
retrenchment program as a cost-cutting measure, Bernardo Tagohoy, G.R. No. 187214, 14 Aug. 2012).
SCA, however, did not out rightly dismiss the
workers affected by the closure of PM No. 4 but gave Proof of actual losses or possible imminent losses is
them an option to be transferred to posts of equal the most singular distinctive requisite of
rank and pay. SCA did not proceed directly to retrenchment, which the installation of labor-saving
retrench. This is an indication of good faith on SCA’s device and redundancy do not have. (Chan, 2019)
part as it exhausted other possible measures other
than retrenchment. (Pantoja v. SCA Hygiene Products Preventive Retrenchment is Allowed
Corporation, G.R. No. 163554, 23 Apr. 2010)
“To prevent losses” justifies retrenchment. Such
NOTE: The losses which the company may suffer or phrase means that retrenchment or termination of
is suffering may be proved by financial statements the services of some Ees is authorized to be
audited by independent auditor. (Asian Alcohol undertaken by the Er sometime before the losses
Corporation v. NLRC, G.R. No. 131108, 25 Mar. 1999) anticipated are sustained or realized. It is not the
intention of the lawmaker to compel the Er to stay
Retrenchment his hand and keep all his Ees until sometime after
losses shall have been materialized. (Lopez Sugar
It is the reduction of personnel usually due to poor Corporation v. Federation of Free Workers, G.R. Nos.
financial returns to cut down on costs of operations 75700-01 Aug. 1990)
2024 GOLDEN NOTES
Standards of Preventive Retrenchment Criteria in Selecting Employees to Be
Retrenched
1. The losses expected should be substantial and
not merely de minimis in extent; The substantial There must be fair and reasonable criteria to be
loss apprehended must be reasonably used in selecting Ees to be dismissed such as:
imminent; 1. Less preferred status;
2. Efficiency rating;
2. It must be reasonably necessary and likely to 3. Seniority (Phil. Tuberculosis Society, Inc. v.
effectively prevent the expected losses; and, National Labor Union, G.R. No. 115414, 25 Aug.
1998)
3. Alleged losses if already realized, and the 4. Contribution to income (Talam v. NLRC, G.R. No.
expected imminent losses sought to be 175040, 06 Apr. 2010)
forestalled, must be proven by sufficient and
convincing evidence. (Lopez Sugar Corporation “Last In First Out” (L-I-F-O) Rule
v. Federation of Free Workers, G.R. Nos. 75700-01
Aug. 1990) It applies to termination of employment in the same
line of work. What is contemplated in the LIFO rule
Causes of Retrenchment is that when there are two or more Ees occupying
the same position in the company affected by the
1. Lack of Work; retrenchment program, the last one employed will
2. Business Recession; necessarily be the first one to go. (Maya Farms Ees
3. Fire; and Organization v. NLRC, G.R. No. 106256, 28 Dec. 1994)
4. Conservatorship.
“Last In First Out” Rule Mandatory
Requisites of a Valid Retrenchment
GR: In cases of installation of labor-saving devices,
1. Written notice served on both the Ee and the redundancy and retrenchment, the LIFO rule shall
DOLE at least one (1) month prior to the apply.
intended date of retrenchment;
XPN: When an Ee volunteers to be separated from
2. Payment of separation pay equivalent to at least employment. (DOLE D.O. No. 147-15, Series of 2015)
one month pay or at least one-half (1/2) month
pay for every year of service, whichever is Q: Due to mounting losses, the former owners of
higher; Asian Alcohol Corporation sold its stake in the
company to Prior Holdings. Upon taking control
3. Good faith in effecting retrenchment; of the company, Prior Holdings, to prevent
losses, implemented a reorganization plan and
4. Proof of expected or actual losses; other cost-saving measures including the
retrenchment of 117 Ees some of which are
5. To show that the Er first instituted cost members of the union and the majority held by
reduction measures in other measures in other non-union members.
areas of production before undertaking
retrenchment as a last resort; and Some retrenched workers filed a complaint for
illegal dismissal alleging that the retrenchment
6. The Er used fair and reasonable criteria in was a subterfuge for union busting activities.
ascertaining who would be retained among the Was the retrenchment made by Asian Alcohol
Ees, such as status, efficiency, seniority, physical valid and justified?
fitness, age, and financial hardship of certain
workers. (FASAP v. PAL, G.R. No. 178083, 02 Oct. A: YES. Even though the bulk of the losses were
2009) suffered under the old management and continued
2024 GOLDEN NOTES
only under the new management, ultimately the A firm which faces serious business decline and
new management of Prior Holdings will absorb such losses is entitled to close its business in order to
losses. The law gives the new management every avoid further economic loss, and a court has no
right to undertake measures to save the company power to require such firm to continue operating at
from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R. a loss. (Unicorn Safety Glass v. Basarte, G.R. No.
No. 131108, 25 Mar. 1999) 154689, 25 Nov. 2004)
Retrenchment vs. Redundancy It must be done in good faith and not for the purpose
of circumventing pertinent labor laws.
Retrenchment involves losses, closures, or cessation
of operations of establishment or undertaking due A change of business ownership does not create an
to serious business or financial losses or reverses. obligation on the part of the new owner to absorb
Whereas redundancy results from the fact that the the Ees of the previous owner, unless expressly
position of the Ee has become superfluous, even if assumed. Labor contracts being in personam, are
the business has not suffered reverses. generally not enforceable against a transferee.
(Fernando v. Angat Labor Union, G.R. No. L-17896, 30
RETRENCHMENT REDUNDANCY May 1962)
Involves losses,
closures, or cessation Closure contemplated is a unilateral and voluntary
Does not involve losses
of operations of act on the part of the Er to close the business
or the closing or
establishment or establishment.
cessation of operations
undertaking due to
of the establishment.
serious business losses Kinds of Closure
Results from the fact
or financial reverses.
that the position of the
1. Partial Closure – although grounded on
Ee has become
In preventive economic losses, partial closure is a form of
superfluous, an excess
retrenchment, retrenchment.
of what is actually
retrenchment may be
needed, even if the
undertaken by the Er The requirements are:
business has not
before losses are
suffered reverses.
sustained. a. Written notice to the EE and to the DOLE
at least one month before the intended
date of termination;
Evidence to Prove Losses
b. Separation pay equivalent to at least 1/2
Alleged losses if already realized and the expected month pay for every year of service; and
imminent losses must be proved by sufficient and
convincing evidence. (Uichico v. NLRC, G.R. No. c. Cessation of business is bona fide in
121434, 02 June 1997) character.
Evidence presented in NLRC Proceedings must have 2. Total Closure due to economic reverses or
modicum of admissibility. (Azucena, 2016) losses
Financial Statements must be audited by The requirements are:

independent external auditors, and for GOCCs,
financial statements must be audited by the a. Written notice to the EE and to the DOLE
Commission on Audit. (Chan, 2019) at least 1 month before the intended date
of termination; and
Closure of Business
2024 GOLDEN NOTES
b. Cessation of business is due to serious Basis for computation: latest salary rate, unless
economic reverses or losses. reduced by the Er to circumvent the law, in which
case, it shall be based on the rate before its
Requisites of Closure of Business deduction. (Sec. 10, Book IV, Rule I, IRR)
1. Written notice served on both the Ees and the No Obligation to Pay Separation Pay
DOLE at least 1 month prior to the intended
date of closure; 1. When the closure of the business is due to
serious business loss; and
2. Payment of separation pay equivalent to at least
one month pay or at least 1/2 month pay for 2. Where closure of business is by compulsion of
every year of service, whichever is higher, law because closure of business is not
except when closure is due to serious business attributed to Er’s will. (e.g., the land where the
losses; building is situated was declared covered by the
Comprehensive Agrarian Reform Law)
3. Good faith;
Q: Galaxie Steel Corp. decided to close down
4. No circumvention of the law; and because of serious business losses. It filed a
written notice with the DOLE informing its
5. No other option available to the Er. intended closure and the termination of
employment. It posted the notice of closure on
Test for the Validity of Closure or Cessation of the corporate bulletin board.
Establishment or Undertaking
a) Does the written notice posted by
To be a valid ground for termination the following Galaxie on the bulletin board
must be present: sufficiently comply with the notice
requirement under Art. 298 of the LC?
1. There must be a decision to close or cease
operation of the enterprise by the management; A: NO. In order to meet the purpose, service of the
written notice must be made individually upon each
2. The decision was made in good faith; and Ee of the company. However, the SC held that where
the dismissal is for an authorized cause, non-
3. There is no other option available to the Er compliance with statutory due process should not
except to close or cease operations. (Sec. 5.4(d), nullify the dismissal, or render it illegal, or
D.O. No. 147, Series of 2015) ineffectual. Still, the Er should indemnify the Ee, in
the form of nominal damages, for the violation of his
Examples are: right to statutory due process. (Galaxie Steel
Workers Union v. NLRC, G.R. No. 165757, 17 Oct.
a. Relocation of business 2006)
b. Sale in good faith
b) Are Galaxie Ees entitled to separation
Payment of Separation Pay in Case of Closure pay?
Payment of separation pay is required only where A: NO. Galaxie had been experiencing serious
closure is neither due to serious business losses nor financial losses at the time it closed business
due to an act of government. (North Davao Mining operations. Art. 298 of the LC governs the grant of
Corp v. NLRC, G.R. No. 112546, 13 Mar. 1996; NFL v. separation benefits "in case of closures or cessation
NLRC, G.R. No. 127718, 02 Mar. 2000) of operation" of business establishments "not due to
serious business losses or financial reverses."
2024 GOLDEN NOTES
Where, the closure then is due to serious business In contrast with asset sales, in which the assets of
losses, the LC does not impose any obligation upon the selling corporation are transferred to another
the Er to pay separation benefits. (Galaxie Steel entity, the transaction in stock sales takes place at
Workers Union v. NLRC, G.R. No. 165757, 17 Oct. the shareholder level. Because the corporation
2006) possesses a personality separate and distinct
from that of its shareholders, a shift in the
Obligation of a Transferee to Absorb the Ees of composition of its shareholders will not affect its
the Old Corporation existence and continuity. Thus, notwithstanding
the stock sale, the corporation continues to be the
GR: There is no law requiring a bona fide purchaser employer of its people and continues to be liable
of assets of an on-going concern to absorb in its for the payment of their just claims. Furthermore,
employ the Ee’s of the transferor. the corporation or its new majority shareholders
are not entitled to lawfully dismiss corporate
XPNs: employees absent a just or authorized cause.
(SME Bank, Inc. v. De Guzman, G.R. Nos. 184517 &
1. When the transaction between the parties is 186641, 08 Oct. 2013)
colored or clothed with bad faith. (Sundowner
Dev’t Corp. v. Drilon, G.R. No. 82341, 06 Dec. Q: Zienna Corporation (Zienna) informed the
1989) Department of Labor and Employment
Regional Director of the end of its operations.
2. Where the transferee was found to be merely an To carry out the cessation, Zienna sent a Letter
alter ego of the different merging firms. Request for Intervention to the NLRC for
(Filipinas Port Services, Inc. v. NLRC, G.R. No. permission and guidance in effecting payment
97237, 16 Aug. 1991) of separation benefits for its fifty (50)
terminated employees.
3. Where the transferee voluntarily agrees to do
so. (Marina Port Services, Inc. v. Iniego, G.R. No. Each of the terminated employees executed a
77853, 22 Jan. 1990) Quitclaim and Release before Labor Arbiter
Nocomora, to whom the case was assigned.
Successor-Employer Doctrine After the erstwhile employees received their
separation pay, the Labor Arbiter declared the
The Successor Employer Doctrine refers to a sale or labor dispute dismissed with prejudice on the
transfer in ownership of an entity that has been ground of settlement. Thereafter, Zienna sold
done in bad faith or to defeat the rights of labor. In all of its assets to Zandra Company (Zandra),
such a case, it is as if there have been no changes in which in turn hired its own employees.
Ee-Er relationship between the seller and its Ee. The
buyer becomes a "successor employer" and is Nelle, one of the fifty (50) terminated
obliged to absorb the displaced Ees. (Philippine employees, filed a case for illegal dismissal
Airlines, Inc. v. NLRC, G.R. No. 125792, 9 Nov. 1998) against Zienna. She argued that Zienna did not
cease from operating since the corporation
Asset Sales vs. Stocks Sales subsists as Zandra. Nelle pointed out that
aside from the two companies having
In asset sales, the rule is that the seller in good essentially the same equipment, the managers
faith is authorized to dismiss the affected Ees, but and owners of Zandra and Zienna are likewise
is liable for the payment of separation pay under one and the same.
the law. The buyer in good faith, on the other
hand, is not obliged to absorb the Ee affected by For its part, Zienna countered that Nelle is
the sale, nor is it liable for the payment of their barred from filing a complaint for illegal
claims. dismissal against the corporation in view of
her prior acceptance of separation pay.
2024 GOLDEN NOTES
owner, to assist them in incorporating DMI and
Is Nelle correct in claiming that she was after such undertaking; Sps. SMITH transferred
illegally dismissed? (2016 BAR) their rights in DMI in favor of Sps. LEE.
A: NO. In SME Bank v. De Guzman (G.R. Nos. Now, Sps. LEE contends that DMI had a separate
184517 and 186641, 08 Oct. 2013), there are two and distinct personality from the officers
(2) types of corporate acquisitions: asset sales comprising it. Hence, they cannot be held
and stock sales. In asset sales, the corporate entity personally liable for the judgment awards. Is the
sells all or substantially all of its assets to another contention of Sps. LEE tenable?
entity. In stock sales, the individual or corporate
shareholders sell a controlling block of stock to A: NO. As a general rule, a corporation has a
new or existing shareholders. separate and distinct personality from its
stockholders, and from other corporations it may be
Asset sales happened in this case; hence, Zienna is connected with.
authorized to dismiss its Ees, but must pay
separation pay. The buyer, Zandra, is not obliged to However, such personality may be disregarded, or
absorb the Ees affected by the sale, nor is it liable for the veil of corporate fiction may be pierced by
the payment of their claims. The most that Zandra attaching personal liability against responsible
may do, for reasons of public policy and social person if the corporation’s personality, is used to
justice, is to give preference in hiring qualified defeat public convenience, justify wrong, protect
separated personnel of Zienna. fraud or defend crime, or is used as a device to
defeat the labor laws.
Merger of Corporations
Here, petitioners should be held personally liable
The merger of a corporation does not operate to for having controlled DMI and actively participated
dismiss the Ees of the corporation absorbed by the in its management, and for having used it to evade
surviving corporation. This is in keeping with the legal obligations to respondents.
nature and effects of a merger as provided under
law and the constitutional policy protecting the While it is true that one’s control does not by itself
rights of labor. The employment of the absorbed Ees result in the disregard of corporate fiction; however,
subsists. Necessarily, these absorbed Ees are not considering the irregularity in the incorporation of
entitled to separation pay. (The Philippine DMI, then there is sufficient basis to hold that such
Geothermal, Inc. Ees Union v. Unocal Philippines, Inc. corporation was used for an illegal purpose,
(now known as Chevron Geothermal Philippines including evasion of legal duties to its Ees. (Dutch
Holdings, Inc.), G.R. No. 190187, 28 Sept. 2016) Movers Inc. v. Lequin, G.R. No. 210032, 25 Apr. 2017)
Piercing the Veil of Corporate Fiction Q: Crisologo was employed by petitioner NEC
System Integrated Construction Phils., Inc.
Q: The Dutch Movers, Inc., (DMI), informed their (NESIC) as Manager of Communication Facilities.
Ees that it would cease its hauling operation for A cost-cutting measure was implemented,
no reason and it did not file any notice of specifically terminating all project and
business closure before the DOLE. Their Ees contractual Ees and withholding some of the Ees’
filed an illegal dismissal case against DMI. Thus, benefits.
Ees prayed that officers named in DMI’s Article
of Incorporation be impleaded and be held Notwithstanding with the cost cutting measures
solidarily liable with DMI in paying the NESIC still incurred financial losses and
judgment awards. announced retrenchment which caused sign
respondent’s dismissal. He however voluntarily
However, Sps. Smith, officers named in the AOI, sign quitclaim and receipt of separation pay.
merely lent their names to spouses LEE, alleged Upon learning that NESIC employed other
2024 GOLDEN NOTES
person to fill the vacancy in the company Closure vs. Retrenchment
respondent filed a case for illegal dismissal. Will
the case prosper?
CLOSURE RETRENCHMENT
A: NO. Not all waivers and quitclaims are invalid as

against public policy. If the agreement was As to their Definition
voluntarily entered into and represents a
The complete cessation The reduction of
reasonable settlement, it is binding on the parties
of business operations personnel on account
and may not later be disowned simply because of a
or of a department of the losses incurred
change of mind. done in the exercise of which are substantial
management and actual or
It is only where there is clear proof that the waiver prerogative and for reasonably imminent;
was wangled from an unsuspecting or gullible economic reasons. or have increased
person, or the terms of settlement are
through a period of
unconscionable on its face, that the law will step in
time; and that the
to annul the questionable transaction. (NEC System
condition of the
Integrated Construction Phils., Inc. v. Crisologo, G.R.
company is not likely to
No. 201535, 05 Oct. 2015)
improve in the near
future.
As to their Purpose
To prevent further To cut down on costs of

financial drain upon an operations in terms of
Er who cannot pay salaries and wages
anymore his Ees since because of losses in
business has already operation of a business
stopped occasioned by lack of
work and considerable
reduction in the
volume of business
As to the Payment of Separation Package
Er is not obligated for LC provides for the

the payment of payment of separation
separation package if package in case of
there is closure of retrenchment to
business due to serious prevent losses.
losses.
2024 GOLDEN NOTES
Substantive Elements for Disease as a Ground 2. A Certification to that effect must be issued by a
for Dismissal competent public health authority. (Omanfil
International Manpower Development Corp. v.
1. An Ee has been found to be suffering from any Mesina, G.R. No. 217169, 04 Nov. 2020)
disease, whether contagious or not;
Procedure in Terminating Employment on the
2. His continued employment is prohibited by law Ground of Disease
or prejudicial to his health or to the health of his
co-Ees; and (Sec. 8, Book VI, Rule I, IRR) 1. The Er shall not terminate his employment
unless:
3. A competent public health authority certifies
that the disease is of such nature or at such a a. There is a certification by a competent
stage that it cannot be cured within a period of public health authority; and
six months even with proper medical
treatment; b. That the disease is of such nature or at such
a stage that it cannot be cured within a
4. Payment of separation pay equivalent to at least period of six (6) months even with proper
one month salary or to one-half month salary medical treatment.
for every year of service, whichever is greater, a
fraction of six months being considered as one NOTE: In terminating employment on the
whole year. (Jiao, v. NLRC, Global Business Bank, ground of disease, the Er must comply with
G.R. No. 182331, 18 Apr. 2012) the twin-notice rule.
NOTE: The requirement for a medical certification In Sy v. CA (G.R. No. 127263, 12 Apr. 2000)
cannot be dispensed with; otherwise, it would and Manly Express, Inc. v. Payong, Jr. (G.R.
sanction the unilateral and arbitrary determination No. 167462, 25 Oct. 2005), the Court finally
by the Er of the gravity or extent of the Ee’s illness pronounced the rule that the Er must
and thus defeat the public policy on the protection furnish the Ee two written notices in
of labor. (Manly Express v. Payong, G.R. No. 167462, terminations due to disease, namely:
25 Oct. 2005)
i. The notice to apprise the Ee of the
A medical certificate issued by the company’s own ground for which his dismissal is
physician is not a certificate by “competent public sought; and
health authority.” (Cebu Royal Plant [San Miguel
Corporation] v. Deputy Minister of Labor, G.R. No. ii. The notice informing the Ee of his
58639, 12 Aug. 1987) dismissal, to be issued after the Ee has
been given reasonable opportunity to
Requisite for a Valid Dismissal on the Ground of answer and to be heard on his
Disease defense.
The Court held that for a dismissal on the ground of NOTE: These rulings reinforce the State
disease to be considered valid, two (2) requisites policy of protecting the workers from being
must concur: (6-C) terminated without cause and without
affording them the opportunity to explain
1. The Ee suffers from a disease which cannot be their side of the controversy. (Deoferio v.
cured within six (6) months and his/her Intel Technology, G.R. No. 202996, 18 June
continued employment is prohibited by law or 2014)
prejudicial to his/her health or to the health of
his/her co-Ees, and 2. If the disease or ailment can be cured within the
period, the Er shall not terminate the Ee’s
2024 GOLDEN NOTES
employment but shall ask the Ee to take a leave. The requirements of a medical certificate are
The Er shall reinstate such Ee to his former mandatory. Only where there is a prior certification
position immediately upon the restoration of from a competent public authority that the disease
his normal health. (Sec. 8, Book VI, Rule I, IRR) afflicting the Ee sought to be dismissed is of such
nature or at such stage that it cannot be cured within
HIV-Positive Status/AIDS Not a Ground for six (6) months even with proper medical treatment
Termination that the latter could be validly terminated from his
job. (Tan v. NLRC, G.R. No. 116807, 14 Apr. 1997)
Discrimination in any form from pre-employment to
post-employment, including hiring, promotion, or Q: Anna Ferrer has been working as a
assignment, based on the actual, perceived or bookkeeper at Great Foods, Inc., which operates
suspected HIV status of an individual is prohibited. a chain of high-end restaurants throughout the
Termination from work on the sole basis of actual, country, since 1970 when it was still a small
perceived, or suspected HIV status is deemed eatery at Binondo. In the early part of the year
unlawful. (Sec. 35, R.A. No. 8504) 2003, Anna, who was already 50 years old,
reported for work after a week-long vacation in
NOTE: An employee shall not be terminated on the her province. It was the height of the SARS scare,
basis of actual, perceived or suspected: and management learned that the first
confirmed SARS death case in the Phils, a
1. HIV status; “balikbayan” nurse from Canada, is a townmate
2. Hepatitis B status; of Anna.
3. Has or had Tuberculosis; (Sec. 6, DOLE D.O. No.
147-15) and Immediately, a memorandum was issued by
4. COVID-19. (Sec. 5, Omnibus Guidelines on the management terminating the services of Anna
Implementation of Community Quarantine in the on the ground that she is a probable carrier of
Philippines, Inter-Agency Task Force on SARS virus and that her continued employment
Emerging Infectious Diseases) is prejudicial to the health of her co-Ees. Is the
action taken by the Er justified? (2004 BAR)
Disability Not a Ground for Termination
A: The Er’s act of terminating the employment of
GR: Dismissing or terminating the services of a Anna is not justified. There is no showing that said
disabled Ee by reason of his disability is not a valid Ee is sick with SARS, or that she associated or had
ground. contact with the deceased nurse. They are merely
town mates. Furthermore, there is no certification
XPN: The Er can prove that he impairs the by a competent public health authority that the
satisfactory performance of the work involve to the disease is of such a nature or such a stage that it
prejudice of the business entities provided, cannot be cured within a period of six (6) months
however, that the Er first sought provide reasonable even with proper medical treatment. (IRR, Book VI,
accommodations for disabled persons. Rule 1, Sec. 8)
Entitlement to Reinstatement The Court held that for a dismissal on the ground of
disease to be considered valid, two requisites must
An Ee suffering from a disease is entitled to a concur: (a) the Ee suffers from a disease which
reinstatement, provided he presents a certification cannot be cured within six months and his/her
by a competent public health authority that he is fit continued employment is prohibited by law or
to return to work. (Cebu Royal Plant v. Deputy prejudicial to his/her health or to the health of
Minister, G.R. No. L-58639, 12 Aug. 1987) his/her co-Ees, and (b) a certification to that effect
must be issued by a competent public health
Medical Certificate as Mandatory Requirement authority. (Omanfil International Manpower
2024 GOLDEN NOTES
Development Corp. v. Mesina, G.R. No. 217169, 04 Nov. the notice to give the Ees an opportunity to
2020) study the accusation against them, consult
a union official or lawyer, gather data and
Other Authorized Causes evidence, and decide on the defenses they
will raise against the complaint. (King of
1. Total and permanent disability of Ee; Kings Transport Inc. v. Mamac, G.R. No.
2. Valid application of union security clause; 166208, 29 June 2007)
3. Expiration of period in term of employment;
4. Completion of project in project employment; b. Post-notice – The notice informing the Ee
5. Failure in probation; of the Er’s decision to dismiss him which
6. Relocation of business to a distant place; notice must come only after the Ee is given
7. Defiance of return-to work-order; a reasonable period from receipt of the first
8. Commission of Illegal acts in strike; notice within which to answer the charge,
9. Violation of contractual agreement; and and ample opportunity to be heard and
10. Retirement. defend himself.
2. Hearing (opportunity to be heard) – The

3. DUE PROCESS REQUIREMENTS
worker may answer the allegations against him
(Art. 292 (b), LC; DOLE D.O. No. 147-15)
in the notice of dismissal within a reasonable
period from receipt of the notice of dismissal
Twin Notice Requirement with the ample opportunity to be heard.
The Two-Notice Rule requires that: 3. Judgement/Decision to Dismiss – It should be

in writing and should clearly state all the
1. There must be a notice stating the ground for
reasons for dismissal.
termination and requiring the Ee to explain his
side; and Under the Perez Doctrine, the two-notice-and-a-
2. There must be a notice for the termination
hearing rule was not imposed because hearing may
itself. now be dispensed. The Supreme Court held that
what is important is that the parties are given the
Procedural Requirements of Dismissal for Just
opportunity to be heard unless they request in
Causes writing for a hearing. What is required is that the
complainant is given the opportunity to be heard.
1. Notice (Two-notice rule) – the Er is required to
(Perez v. Philippine Telegram and Telephone
furnish an Ee who is to be dismissed with two Company, G.R. 152048, 07 Apr. 2009)
(2) written notices before such termination:
Where the Er had a valid reason to dismiss the Ee
a. Pre-notice – the notice to apprise the Ee of but failed to comply with the procedural due
the particular acts or omissions for which
process requirement, the dismissal may be upheld
dismissal is sought and is considered as the but the Er will be penalized to pay an indemnity to
proper charge; the Ee. (Wenphil Corp. v. NLRC, G.R. No. 80587, 08 Feb.
1989)
NOTE: The first written notice to be served
on the Ees should contain the specific The above-cited doctrine was reinstated in the case
causes or grounds for termination against
of Agabon v. NLRC (G.R. No. 158693, 17 Nov. 2004). In
them, and a directive that the Ees are given cases involving dismissals for cause but without
the opportunity to submit their written
observance of the twin requirements of notice and
explanation within a reasonable period.
hearing, the better rule is to abandon the Serrano
This should be construed as a period of at doctrine and to follow Wenphil by holding that the
least five (5) calendar days from receipt of
dismissal was for just cause but imposing sanctions
2024 GOLDEN NOTES
on the Er. Such sanctions, however, must be stiffer relevant circumstances. (Agabon v. NLRC, G.R. No.
than that imposed in Wenphil. 158693, 17 Nov. 2004)
NOTE: The burden of proving that the termination Q: The illegal dismissal case was referred to the
was for a valid or authorized cause shall rest on the LA. Is a formal hearing or trial required to satisfy
Er. (Art. 292(b), LC) the requirement of due process?
Q: The Rural Bank of San Rafael (Bulacan), Inc. A: NO. Trial-type hearings are not required in labor
(RBSR) issued Reyes two show cause orders and cases, and these may be decided on verified position
put him on preventive suspension for neglect of papers, with supporting documents and their
duty. This is due to Reyes’s refusal to certify a affidavits. The holding of a formal hearing or trial is
report, reasoning that no independent discretionary with the labor arbiter and is
investigation was conducted. Was Reyes illegally something that the parties cannot demand as a
dismissed? matter of right. It is entirely within his authority to
decide a labor case before him, based on the
A: YES. The Court cannot help but notice the position papers and supporting documents of the
muddled and vague charges against him. parties, without a trial or formal hearing.
Specifically, it cannot be determined with
reasonable certainty on what grounds the charges The requirements of due process are satisfied when
pressed against Reyes were based on, and which the parties are given the opportunity to submit
ones were proven. The Court finds that respondents position papers wherein, they are supposed to
failed to comply with the due process requirements attach all the documents that would prove their
in dismissing Reyes. In the present case, there is no claim in case it be decided that no hearing should be
question that Reyes' refusal to certify the Report on conducted or was necessary. (Shoppes Manila, Inc. v.
Crimes and Losses was intentional. This is clearly NLRC, G.R. No. 147125, 14 Jan. 2004)
disobedience. However, the Court find that the same
is not attended by a wrongful and perverse mental NOTE: It is not necessary for the affiants to appear
attitude which warrants the ultimate penalty of and testify and be cross-examined by the counsel for
dismissal. the adverse party. It is sufficient that the documents
submitted by the parties have a bearing on the issue
A review of the findings will reveal that Reyes at hand and support the positions taken by them.
refused to certify said report based on his honest (C.F. Sharp & Co., Inc. v. Zialcita, G.R. No. 157619, 17
assessment that the report cannot be completely July 2006)
validated for lack of material data and evidence.
(Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. The essence of due process is simply an opportunity
No. 230597, March 23, 2022,) to be heard, or as applied to administrative
proceedings, an opportunity to explain one’s side or
Indemnity in the Form of Nominal Damages an opportunity to seek a reconsideration of the
action or ruling complained of. (PLDT v. Bolso, G.R.
An Er is liable to pay indemnity in the form of No. 159701, 17 Aug. 2007)
nominal damages to an Ee who has been dismissed
if, in effecting such dismissal, the Er fails to comply Burden of Proof in Termination Cases
with the requirements of due process.
The burden of proof rest upon the Er to show that
The violation of the petitioners' right to statutory the dismissal of the Ee is for a just cause, and failure
due process by the private respondent warrants the to do so would necessarily mean that the dismissal
payment of indemnity in the form of nominal is not justified, consonant with the constitutional
damages. The amount of such damages is addressed guarantee of security of tenure.
to the sound discretion of the court, considering the
2024 GOLDEN NOTES
Due process refers to the process to be followed; duty is correspondingly expected. (ALU-TUCP v.
burden of proof refers to the amount of proof to be NLRC, G.R. No. 120450, 10 Feb. 1999)
adduced. In money claims, the burden of proof as to
the amount to be paid the Ees rests upon the Er Hearing Not an Indispensable Part of Due
since he is in custody of documents that would be Process
able to prove the amount due, such as the payroll.
Sec. 2(d), Rule I of the IRR of Book VI of the LC
Degree of Proof Required provides that the so-called standards of due process
outlined therein shall be observed “substantially,”
In illegal dismissal cases, the Er is burdened to prove not strictly. This is a recognition that while a formal
just cause for terminating the employment of its Ee hearing or conference is ideal, it is not an absolute,
with clear and convincing evidence to give flesh and mandatory or exclusive avenue of due process.
blood to the guaranty of security of tenure granted (Perez v. PT&T, G.R. No. 152048, 29 Apr. 2009)
by the Constitution to Ees under the LC. (Duty Free
Phils. Services, Inc. v. Tria, G.R. No. 174809, 27 June Ample Opportunity to be Heard
2012)
While “ample opportunity to be heard” may in fact
Guidelines in Determining Whether the Penalty include an actual hearing, it is not limited to formal
Imposed on Ee is Proper hearing. In other words, the existence of an actual
formal “trial type” hearing, although preferred, is
1. Gravity of the offense; not absolutely necessary to satisfy the Ee’s right to
2. Position occupied by the Ee; be heard.
3. Degree of damage to the Er;
4. Previous infractions of the same offense; and In summary the following are the guiding principles
5. Length of service. (ALU-TUCP v. NLRC, G.R. No. in connection with the hearing requirement in
120450, 10 Feb. 1999; PAL v. PALEA, G.R. No. L- dismissal cases:
24626, 28 June 1974)
1. “Ample opportunity to be heard” means any
Q: Felizardo was dismissed from Republic Flour meaningful opportunity (verbal or written)
Mills-Selecta Ice Cream Corporation for given to Ees to answer the charges against him
dishonesty and theft of company property for and submit evidence in support of his defense,
bringing out a pair of boots, 1 piece aluminum whether in a hearing, conference or some other
container and 15 pieces of hamburger patties. Is fair, just and reasonable way.
the penalty of dismissal commensurate with the
offense committed? 2. A formal hearing or conference becomes
mandatory only when requested by the Ee in
A: There is no question that the Er has the inherent writing or subtantial evidentiary disputes exists
right to discipline its Ees which includes the right to or a company rule or practice requires it, or
dismiss. However, this right is subject to the police when similar circumstances justify it.
power of the State. As such, the Court finds that the
penalty imposed upon Felizardo was not 3. The “ample opportunity to be heard” standard in
commensurate with the offense committed the LC prevails over the “hearing conference”
considering the value of the articles he pilfered and requirement in the IRR. (Perez, et.al. v. Philippine
the fact that he had no previous derogatory record Telegraph and Telephone, Co., et.al., G.R. No.
during his two (2) years of employment in the 152048, 07 Apr. 2009)
company.
Moreover, Felizardo was not a managerial or
confidential Ee in whom greater trust is reposed by
management and from whom greater fidelity to
2024 GOLDEN NOTES
Liability for Nominal Damages When Due not afford Rowena ample opportunity to
Process is Not Observed intelligently respond to the accusations hurled
against her as she was not given a reasonable period
It was held that when dismissal is for just or of at least five days to prepare for her defense.
authorized cause, but due process was not
observed, the dismissal should be upheld. (Agabon Failure to comply strictly with the requirements-of
v. NLRC, G.R. No. 158693, 17 Nov. 2004) procedural due process for dismissing an Ee will not
render such dismissal ineffectual if it is based on a
The Er, however, should be held liable for non- just or an authorized cause.
compliance with the procedural requirements of
due process in the form of damages. The Er, however, must be held liable for nominal
damages for non-compliance with the requirements
Q: Integrated Pharma, engaged the services of of procedural due process. (Santos v. Integrated
Rowena as "Clinician," tasked with the duty of Pharmaceutical, Inc., G.R. No. 204620, 11 July 2016)
promoting and selling Integrated Pharma's
products.
Rowena received a memorandum from her

immediate supervisor stating the charges
against her relative to her failure to remit her
collections and to return the CareSens POP
demonstration unit to the office, at a specified
time, habitual tardiness, and her act of
deliberately misdeclaring or overstating her
actual travelling expense. In the same
memorandum, she was required to submit a
written explanation within 24 hours.
Rowena, however, refused to accept said

memorandum. Subsequently, Rowena received
through registered mail another memorandum,
but already denominated as Termination of
Employment. Rowena thus filed a complaint for
illegal dismissal. Is the dismissal valid despite
Rowena not being accorded due process?
A: YES. If the dismissal is based on a just cause

under Art. 297 of the LC, as in this case, the Er must
give the Ee two written notices and conduct a
hearing. The first written notice is intended to

apprise the Ee of the particular acts or omissions for
which the Er seeks her dismissal; while the second
is intended to inform the Ee of the Er's decision to
terminate him.
In the present case, Integrated Pharma presented

two first written notices charging Rowena with
various offenses. Both notices, however, fell short of
the requirements of the law. Integrated Pharma did
2024 GOLDEN NOTES
PROCEDURAL DUE PROCESS UNDER ARTS. 297-299 OF THE LC

AS APPLIED IN THE AGABON CASE
Art. 297 Art. 298 Art. 299
The Er must give the Ee a notice
specifying the grounds for which
dismissal is sought a hearing or an The Er must give the Ee and the
Er may terminate the services of
opportunity to be heard and after DOLE written notices 30 days prior
his Ee.
hearing or opportunity to be to the effectivity of his separation.
heard, a notice of the decision to
dismiss.
Worker is an inactive party in the
cause for termination.
Only notice with DOLE and notice

The requirement under Art. 292 to worker is required. No need for
(b) of notice and hearing applies a hearing because due process is
There is no hearing requirement in
only in Art. 297 because the Er is found in LC (Art. 298) not in
diseases but there is notice
accusing the worker that the latter Constitution according to Agabon.
requirement to worker, but no
committed an act or omission
notice to DOLE.
constituting a cause for NOTE: in Art. 292 (b) in relation to
termination of his employment. Art. 298, if the closure of business
will result in a mass layoff and
serious labor dispute, the SOLE can
enjoin the Er as regards mass
termination
EFFECT OF
POSSIBLE SITUATION LIABILITY OF EMPLOYER
TERMINATION
N Liability
a) With Just or Authorized Cause
VALID
b) With Due Process
NOTE: Separation Pay if for Authorized Cause.
Reinstatement + Full Backwages

a) Without Just or Authorized
Cause INVALID
NOTE: If Reinstatement not possible —Separation
b) With Due Process
Pay
Reinstatement + Full Backwages

a) Without Just or Authorized
Cause INVALID
NOTE: If Reinstatement not possible —Separation
b) Without Due Process
Pay
Liable for noncompliance with procedural

a) With Just or Authorized Cause requirements
VALID
b) Without Due Process
NOTE: Separation Pay if for Authorized Cause
2024 GOLDEN NOTES
B. TERMINATION OF EMPLOYMENT BY d. Other causes analogous to any of the

EMPLOYEE foregoing.
NOTE: If resignation is not voluntary, the same can

be deemed to be a constructive dismissal.
A. RESIGNATION VS. CONSTRUCTIVE DISMISSAL
(Art. 300, LC)
Withdrawal of Resignation
Two (2) Types of Resignation Resignation is withdrawable even if the Ee has

called it irrevocable. (Custodio v. Ministry of Labor
1. Voluntary Resignation; and and Employment, G.R. No. 643174, 19 July 1990) But
2. Involuntary Resignation or Constructive after it is accepted or approved by the Er, its
Dismissal. withdrawal needs the Er’s consent. (Azucena, 2016)
Resignation Intention to Resign
1. With written notice - An Ee may terminate An Ee may be deemed to have resigned from his
without just cause the Er-Ee relationship by position, and such resignation may be accepted and
serving a written notice on the Er at least one made effective by the management, although the Ee
(1) month in advance. (Art. 300(a), LC) did not mention the word “resign” and/or
“resignation.” (Azucena, 2016)
NOTE: The Er upon whom no such notice was
served may hold the Ee liable for damages. (Art. Resignation Pay
300[a], LC)
GR: An Ee who voluntarily resigns from
The Er has no control over resignations and so, employment is not entitled to separation pay.
the notification requirement was devised in
order to ensure that no disruption of work XPNs:
would be involved by reason of the resignation. 1. There is a stipulation for payment of such in the
(Intertrod Maritime, Inc. v. NLRC, G.R. No. 81087, employment contract or CBA; or
19 June 1991)
2. Payment of the amount is sanctioned by
2. Without written notice – An Ee may put an end established employment practice or policy.
to the relationship without serving any notice (Travelaire & Tours Corp. v. NLRC, G.R. No.
on the Er for any of the following just causes. 131523, 20 Aug. 1998)
(Art. 300(b), LC):
Q: Can the Er require an Ee to serve a written
a. Serious insult by the Er or his notice more than the 30-day period under the LC
representative on the honor and person prior to the effectivity of his resignation?
of the Ee;
A: YES. The LC provides that an Ee may terminate
b. Inhuman and unbearable treatment without just cause the Er-Ee relationship by serving
accorded the Ee by the Er or his a written notice on the Er at least one (1) month in
representative; advance. (Art. 300(a), LC)
c. Commission of a crime or offense by the

Er or his representative against the
person of the Ee or any of the immediate
members of his family; and
2024 GOLDEN NOTES
Resignation vs. Constructive Dismissal 2016 petitioner handed his resignation letter
dated 05 Aug. 2016 to Line Manager, Kristine
CONSTRUCTIVE Gorospe. Petitioner learned that there would be
RESIGNATION
DISMISSAL a restructuring in the company where the
As to Definition displaced workers would receive a lump sum
It occurs when there is severance payment. Petitioner's position was
cessation of work included in the positions to be affected by the
because continued restructuring program.
It is the voluntary act of employment is
an Ee who “finds rendered impossible, On 01 Sept. 2016, petitioner checked if the
himself in a situation unreasonable, or Resignation Acceptance Form (RAF) had already
where he believes that unlikely as when there been accomplished. He learned that it has not
personal reasons is a demotion in rank yet been signed by Gorospe. Petitioner sent an
cannot be sacrificed in or diminution in pay or email to Roscoe Pineda (Pineda), Head of Risk
favor of the exigency of when a clear Service, to inform him that he was formally
the service, then he has discrimination, withdrawing his resignation. Pineda replied to
no other choice but to insensibility, or disdain the email stating that petitioner's resignation
disassociate himself by an Er becomes would take effect the following day. However,
from his employment.” unbearable to the Ee Pineda suggested for petitioner to speak to the
(Intertrod Maritime, leaving the latter with Human Resources (HR) to confirm if retraction
Inc. v. NLRC, G.R. No. no other option but to was still possible.
81087, 19 June 1991) quit (The University of
Immaculate Conception On 06 Sept. 2016, the head of HR, Nicola Hutton
v. NLRC, G.R. No. (Hutton), sent petitioner an email informing
181146, 26 Jan. 2011) him that his resignation had already been
As to Voluntariness accepted and that he could no longer withdraw
it. The predicament prompted petitioner to file
Involuntary or forced a complaint for illegal dismissal and recovery of
Voluntary monetary claims against respondent. Petitioner
resignation
contended that even if he had tendered his
resignation, it was validly revoked prior to
As to Entitlement to Separation Pay
respondent's acceptance thereof.
Not entitled to
separation pay unless Was there an acceptance of petitioner's
it is a company practice Entitled to either resignation prior to the retraction thereof?
or provided in the CBA. reinstatement or
(Hanford Philippines separation pay and A: NO. Acceptance of a resignation tendered by an
Inc. v. Shirley Joseph, backwages Ee is necessary to make the resignation effective. In
G.R. No. 158251, 31 this case, no such acceptance was shown.
Mar. 2005)
Petitioner had validly retracted his resignation prior
As to Burden of Proof to its effective date and respondent's acceptance
thereof. Indeed, Gorospe's act of "triggering" the
Burden of proving Burden of proving
ELA, following petitioner's tender of resignation,
voluntariness is on the constructive dismissal
cannot at all be taken as respondent's acceptance of
Er. is on the Ee.
the resignation. Even respondent itself claimed that
the ELA was just proof that it, through Gorospe, had
Q: ANZ Global Services and Operations Manila, acted on the resignation letter. That it was not an act
Inc. (respondent) hired John Roger Nino S. of acceptance on the part of respondent of
Vergara (petitioner) as Risk Manager. On 05 Aug. petitioner's resignation is proven by the nature and
2024 GOLDEN NOTES
contents of the email dated 19 Aug. 2016 about ELA. Shortening the Resignation’s 30-Day Period of
The email sender was PeopleAssist@anz.com, Effectivity Does Not Prove Forced Resignation
addressed to Gorospe, with subject "For action: Ee
Leaving Advice next steps." The 30-day notice requirement for an Ee’s
resignation is for the benefit of the Er who has the
The "company emails," presented as proof that discretion to waive such period. Its purpose is to
petitioner's resignation had been accepted also lack afford the Er enough time to hire another Ee if
merit. Like the affidavits of Hutton and Gorospe, the needed and to see to it that there is proper turn-over
emails prior to 06 Sept. 2016 contain nothing that of the tasks which the resigning Ee may be handling.
would suggest that respondent had accepted (Ibid.)
petitioner's resignation. Pineda's email to petitioner
on 05 September 2016 is informative. If the ELA The rule requiring an Ee to stay or complete the 30-
constituted as respondent's acceptance of day period prior to the effectivity of his resignation
petitioner's resignation, as respondent insists, then becomes discretionary on the part of the
why would Pineda, in his email, suggest to petitioner management as an Ee who intends to resign may be
to talk to Hutton to see if retraction was still allowed a shorter period before his resignation
possible? This, and all the other circumstances becomes effective. (Phimco Industries v. NLRC, G.R.
considered, only shows that 05 Sept. 2016, there No. 118041, 11 June 1997) Shortening the required
was still no acceptance on the part of respondent of period for the resigning Ee from 30 days to 15 days
petitioner's resignation. (Gergara v. ANZ Global does not prove forced or constructive dismissal.
Services and Operations Manila, Inc., G.R. No. 250205, (Hechanova v. Atty. Matorre, G.R. No. 198261, 16 Oct.
17 Feb. 2021) 2013)
Constructive Dismissal Act of Tearing Timecards Constitutes

Constructive Dismissal
It is an Er’s act amounting to dismissal but made to
appear as if it were not. It is a dismissal in disguise. A daily time record is a mandatory requirement for
(Uniwide Sales Warehouse Club v. NLRC, G.R. No. inclusion in the payroll, and in the absence of an
154503, 29 Feb. 2008) employment agreement, it constitutes evidence of
employment. The tearing of timecards confirms Er’s
Constructive dismissal does not always involve vindictive nature and oppressive conduct, as well as
fortright dismissal or diminution in rank, his reckless disregard for Ees’ rights. The act of
compensation, benefit and privileges. There may be tearing timecards may be considered an outright –
constructive dismissal if an act of clear not only symbolic – termination of employment
discrimination, insensibility, or disdain by an Er relationship, a categorical indication of an Ee’s
becomes so unbearable on the part of the Ee that it dismissal from employment. (Ang v. San Joaquin,
could not foreclose any choice by him except to G.R. No. 185549, 07 Aug. 2013)
forego his continued employment. (Hyatt Taxi
Services, Inc. v. Catinoy, G.R. No. 143204, 26 June Relief Entitled to Illegally or Constructively
2001) Dismissed Employees
Burden of Proof on the Employee An illegally or constructively dismissed Ee is entitled

to: (1) either reinstatement, if viable, or separation
The Ee who is complaining of constructive dismissal pay, if reinstatement is no longer viable; and (2)
has the burden of proof “to prove that her backwages. These two reliefs are separate and
resignation was not voluntary, but was actually a distinct from each other and are awarded
case of constructive dismissal, with clear, positive, conjunctively. (Robinsons Galleria v. Ranchez, G.R. No.
and convincing evidence.” (Hechanova v. Atty. 177937, 09 Jan. 2011)
Matorre, G.R. No. 198261, 16 Oct. 2013)
2024 GOLDEN NOTES
Q: Monica is a customer associate in LBC Danao. LBC’s insensibility to Monica’s sexual harassment
Arturo, her immediate superior, started sexually case is a ground for constructive dismissal. In this
harassing her. On 05 May 2010, she reported the instance, it cannot be denied that Monica was
incident to the LBC Head Office. On 14 May 2010, compelled to leave her employment because of the
sensing that management did not immediately hostile and offensive work environment created and
act on her complaint, Monica resigned. She reinforced by Arturo and LBC. She was thus clearly
asserted that she was forced to quit since she no constructively dismissed. (LBC Express-Vis, Inc. v.
longer felt safe at work. On 15 June 2010, Monica Monica C. Palco, G.R. No. 217101, 12 Feb. 2020)
was served a copy of a Notice to Explain. On 20
July 2010, LBC held the administrative hearing Q: Donna Jacob sought employment with First
for the incident. On the same day, Monica filed a Step Manpower International Services, Inc. as a
Complaint for Illegal Dismissal against the household service worker. When First Step
company. On 27 Sept. 2010, the area head of LBC accepted her application, she signed a two-year
Cebu sent a letter addressed to Arturo contract where she would be deployed to Riyadh,
containing a suspension with last warning. Kingdom of Saudi Arabia. Jacob narrated several
events that caused her to only stay in her Er for
LBC argues that it should not be held liable for only three (3) months. First is that her male Er
constructive dismissal. It argues that it cannot had attempted to rape her while she was
be held liable for the hostile work environment washing the dishes, and when she reported such
that Monica experienced because it was Arturo matter to her female Er, the latter did not believe
who committed the acts subject of her her, and another event is when her female Er hit
complaint. It asserts that four (4) months is not her with a shoe that was “violently thrown at
an unreasonable period to resolve a sexual her.” Unable to take this, she escaped her Ers and
harassment complaint. Is LBC liable for met Bermido, a fellow Filipina worker, that was
constructive dismissal? being maltreated by her Ers as well.
A: YES. Constructive dismissal occurs when an Er Jacob and Bermido filed a case before the Labor
makes an Ee's continued employment impossible, Arbiter for constructive illegal dismissal,
unreasonable, or unlikely, or has made an Ee's maltreatment, and nonpayment of wages for the
working conditions or environment harsh, hostile unexpired portion of their contract with claims
and unfavorable, such that the Ee feels obliged to of moral and exemplary damages, medical
resign from his or her employment. One of the ways expenses, and attorney's fees. The Complaint
by which a hostile or offensive work environment is filed was directed against First Step and its
created is through the sexual harassment of an Ee. President, Elnor Tapnio, as well as against
Under Sec. 5 of the Anti-Sexual Harassment Act, the Jacob's foreign Er, Muhammad. Jacob insisted on
Er is only solidarily liable for damages with the having been constructively dismissed because
perpetrator in case an act of sexual harassment was her working environment allegedly became so
reported, and it did not take immediate action on the intolerable that she was impelled to leave her
matter. job. Was she constructively dismissed?
There is no showing that LBC acted on Monica’s A: YES. Constructive dismissal does not always
report before they issued Arturo a Notice to Explain. entail a "forthright dismissal or diminution in rank,
Thus, the formal investigation is deemed to have compensation, benefit and privileges." Pertinent in
commenced only 41 days after the incident was the case at hand, there can also be constructive
reported. LBC likewise offered no explanation as to dismissal in cases where "an act of clear
why it took another month before it held an discrimination, insensibility, or disdain by an Er
administrative hearing for the case. Worse, it took becomes so unbearable on the part of the Ee that it
LBC another two months to resolve the matter. could foreclose any choice by him [or her] except to
forego his [or her] continued employment."
2024 GOLDEN NOTES
To gauge if constructive dismissal exists, the test is company. Is the offer for reinstatement as a new
whether a reasonable person in the Ee's standing Ee a constructive dismissal?
was impelled to surrender his or her post under the
given situation. It is a dismissal in disguise because A: YES. Flores’ re-employment as a new Ee would be
the doing equates to a "dismissal but made to very prejudicial to him as it would mean a demotion
appear as if it were not." Hence, the law “recognizes in rank and privileges and the retirement benefits
and resolves this situation in favor of Ees in order to for his previous 18 years of service with the
protect their rights and interests from the coercive company would simply be considered as non-
acts of the Er." existent. It amounts to constructive dismissal. (JAM
Transportation Co., Inc. v. Flores, G.R. No. 82829, 19
It is discernable from petitioner's declaration that Mar. 1993)
the controversy emanated from the lewd actuations
of her male foreign Er. To avert a commotion, she Q: Quinanola was transferred from the position
reported the matter to her female Er but of Executive Secretary to the Executive Vice
unfortunately, she was merely discredited and even President and General Manager to the
blamed for the incident. From then on, petitioner's Production Dep’t as Production Secretary.
female foreign Er treated her differently. Jacob was Quinanola rejected the assignment and filed a
subjected to physical and verbal harm that she was complaint for illegal dismissal due to
left with no other choice but to relinquish her constructive dismissal. Did the transfer of
employment. Certainly, the treatment petitioner Quinanola amount to constructive dismissal?
experienced in the hands of her foreign Ers fostered
a hostile and unbearable work setting which A: NO. Quinanola’s transfer was reasonable since it
impelled her not only to leave her Ers but also, as in did not involve a demotion in rank or a change in her
petitioner's words, to escape (“Tumakas”). place of work nor a diminution in pay, benefits, and
privileges. It did not constitute constructive
The conclusion is all too clear that there exists a dismissal. Furthermore, an Ee’s security of tenure
well-grounded fear on her part prompting her to run does not give him a vested right in his position as
away despite having been employed overseas for would deprive the company of its prerogative to
barely two (2) months. The cessation of petitioner's change his assignment or transfer him where he will
employment was not of her own doing but was be most useful. (Philippine Japan Active Carbon Corp.
brought about by unfavorable circumstances v. NLRC, G.R. No. 83239, 08 Mar. 1999)
created by her foreign Ers. To put in simply, if
petitioner failed to continue her job, it was because Q: Sangil was a utility man/assistant steward of
she refused to be further subjected to the ordeal the passenger cruise vessel Crown Odyssey
caused by her Ers' conduct. (Donna Jacob v. First Step under a one-year contract. Sangil suffered head
Manpower Int’l Services, Inc., G.R. No. 229984, 08 July injuries after an altercation with a Greek
2020) member of the crew. He informed the captain
that he no longer intends to return aboard the
Q: Flores, a conductor of JAM Transportation Co., vessel for fear that further trouble may erupt
Inc., had an accident where he had to be between him and the other Greek crewmembers
hospitalized for a number of days. Upon of the ship. Was Sangil constructively dismissed?
reporting back to the company, he was told to
wait. For several days, this continued and he was A: YES. There is constructive dismissal where the
promised a route assignment which did not act of a seaman in leaving ship was not voluntary but
materialize. Upon speaking to Personnel was impelled by a legitimate desire for self-
Manager Medrano, he was told that he will be preservation or because of fear for his life.
accepted back to work but as a new Ee. Flores Constructive dismissal does not always involve
rejected the offer because it would mean diminution in pay or rank but may be inferred from
forfeiture of his 18 years of service to the an act of clear discrimination, insensibility, or
disdain by an Er may become unbearable on the part
2024 GOLDEN NOTES
of the Ee that it could foreclose any choice by him assignment by Twinstar. In comparison, Twinstar
except to forego his continued employment. (Ibid.) was able to establish that Dela Torre went on
absence without leave on or about 21 Jan. 2011 and
Q: In October 1988, Dela Torre R. Dela Torre was that it had subsequently sent several notices to Dela
employed as a security guard by Twinstar Torre. Dela Torre himself admitted declining the
Professional Protective Services, Inc. (Twinstar). assignment offered to him by the Twinstar within
He was deployed at the Las Haciendas in Tarlac six (6) months from the time he was placed on
City and was paid a daily wage of P 240.00. floating status. Dela Torre's flimsy claim that he did
Sometime in January 2011, Dela Torre sought not understand the question of the LA and the
assistance from the program of a certain Mr. Minutes of the said hearing, as both were in the
Tulfo to complain about the underpayment of English language, would seem like a desperate
his salaries. On 24 Jan. 2011, Commander attempt to feign ignorance in order to retract such
Cesario Guhilde directed Dela Torre to report to statements.
Twinstar's office in Quezon City. Upon reporting
to the office the next day, he was informed by The circumstances would show the stubborn
Twinstar's administrative officer that he was unwillingness of Dela Torre to return to work
being placed on floating status. Dela Torre despite being required by Twinstar to report to
alleged that he was on floating status for more work multiple times within six (6) months from
than six (6) months which prompted him to file January 21, 2011, even assuming arguendo that he
a complaint for to illegal dismissal and non- was indeed placed on floating status. Thus, Twinstar
payment of separation pay. Was Dela Torre had just cause to terminate Dela Torre's
illegally dismissed? employment. Be this as it may, the Court found that
Twinstar was remiss in following the due process
A: NO. There is no illegal dismissal that took place in required by law and that Dela Torre should be
this case. There is constructive dismissal when an entitled to nominal damages as will be discussed
Er's act of clear discrimination, insensibility or below. (Dela Torre v. Twinstar Professional Protective
disdain becomes so unbearable on the part of the Ee Services, Inc., G.R. No. 222992, 23 June 2021)
to foreclose any choice on his part except to resign
from such employment. It exists where there is Security Guard Must Be Assigned to a Particular
involuntary resignation because of the harsh, Client
hostile, and unfavorable conditions set by the Er.
The standard for constructive dismissal is "whether The Supreme Court held that a Security Guard must
a reasonable person in the Ee's position would have be assigned to a specific or particular client. A
felt compelled to give up his employment under the general return-to-work order does not suffice.
circumstances.”
However, it must be emphasized that “not every Petitioner was last deployed on 04 October 2010.
inconvenience, disruption, difficulty, or Thus, it was incumbent upon respondent to show
disadvantage that an Ee must endure sustains a that he was redeployed within six (6) months from
finding of constructive dismissal.” What is vital is the the said date. Otherwise, petitioner would be
weighing of the evidence presented and a deemed to have been constructively dismissed.
consideration of whether, given the totality of
circumstances, the Er acted fairly in exercising a A perusal of the records, however, reveals that aside
prerogative. from respondent's bare assertions that petitioner
was suspended, which the latter had denied, there
Applying the foregoing standards to this case, Dela was no evidence of the imposition of said penalty.
Torre utterly failed to prove that he was Respondent could have easily produced documents
constructively dismissed. He never presented any to support its contention that petitioner had been
evidence, aside from his self-serving allegations, suspended, considering that employers are required
that he was forced to be on floating status for more to observe due process in the discipline of
than six (6) months without being given new employees.
2024 GOLDEN NOTES
preventive suspension leading to termination when
Respondent could not rely on its letter requiring there is an imminent threat or a reasonable
petitioner to report back to work to refute a finding possibility of a threat to the lives and properties of
of constructive dismissal. The letters, dated 05 the Er, his family and representatives as well as the
November 2010 and 03 February 2011, which were offender’s co-workers by the continued service of
supposedly sent to petitioner merely requested him the Ee. (Sec. 8, Rule XXIII, Book V, IRR)
to report back to work and to explain why he failed
to report to the office after inquiring about his Duration of Preventive Suspension
posting status. More importantly, there was no proof
that petitioner had received the letters. (Ibon v. It should not last for more than 30 days. The Ee
Genghis Khan Security Services, G.R. No. 221085, 19 should be made to resume his work after 30 days. It
June 2017) can be extended provided the Ee’s wages are paid
after the 30-day period.
In Tatel v. JLFP Investigation and Security Agency,
Inc. (G.R. No. 206942, 09 Dec. 2015), the Court This period is intended only for the purpose of
initially found that the security guard was investigating the offense to determine whether he is
constructively dismissed notwithstanding the to be dismissed or not. It is not a penalty.
employer's letter ordering him to report back to
work. It expounded that in spite of the report-to- Preventive suspension exceeding 30 days will
work order, the security guard was still amount to constructive dismissal.
constructively dismissed because he was not given
another detail or assignment. On motion for NOTE: If more than one (1) month, the Ee must be
reconsideration, however, the Court reversed its reinstated or reinstated in the payroll. Officers are
ruling after it was shown that the security guard was liable only for the offense committed if done with
in fact assigned to a specific client, but the latter malice.
refused the same and opted to wait for another
posting. Q: Cantor and Pepito were preventively
suspended pending application for their
A holistic analysis of the Court's disposition in JFLP dismissal by Manila Doctor’s Hospital after
Investigation reveals that: (1) an employer must being implicated by one Macatubal when they
assign the security guard to another posting within refused to help him when he was caught stealing
six (6) months from his last deployment, otherwise, x-ray films from the hospital. Was the preventive
he would be considered constructively dismissed; suspension of Cantor and Pepito proper?
and (2) the security guard must be assigned to a
specific or particular client. A general return-to- A: NO. Where the continued employment of an Ee
work order does not suffice. poses a serious and imminent threat to the life and
property of the Er or on his co-Ees, the Ees’
preventive suspension is proper. In this case, no
B. ABANDONMENT
such threat to the life and property of the Er or of
their co-Ees’ is present and they were merely
implicated by Macatubal. (Manila Doctors Hospital v.
C. PREVENTIVE SUSPENSION NLRC, G.R. No. L-64897, 28 Feb. 1985)
(Secs. 3-4, Rule XIV, Book V, Omnibus Rules
Implementing the Labor Code) Q: Karina Santos is a famous news anchor
appearing nightly in the country’s most watched
newscast. She is surprised, after one newscast,
Preventive Suspension to receive a notice of hearing before the station’s
Vice-President for Human Resources and calls
It means that during the pendency of the the VP immediately to ask what was wrong.
investigation, the Er may place the Ee under Karina is told over the phone that one of her
2024 GOLDEN NOTES
crew filed a complaint against her for verbal Q: Does the offer to reinstate the illegally
abuse and that management is duty bound to dismissed Ee affect the liability of the erring Er?
investigate and give her a chance to air her side.
Karina objects and denies that she had ever A: NO. Sincere or not, the offer of reinstatement
verbally assaulted her crew. The VP then could not correct the earlier illegal dismissal of the
informed her that pending the investigation she Ee. The Er incurred liability under the LC from the
will be placed on a 30-day preventive suspension moment an Ee was illegally dismissed, and the
without pay and that she will not be allowed to liability did not abate as a result of the Er’s
appear in the newscast during this time. Is the repentance. (Ranara v. NLRC, G.R. No. 100969, 14
preventive suspension of Karina valid? Discuss Aug. 1992)
the reasons for your answer. (2015 BAR)
Q: Juan was hired by business process
A: NO. The preventive suspension of Karina is not outsourcing corporation Teletech as technical
valid. The Er may place an Ee under preventive support representative and was assigned to the
suspension if his/her continued employment would Accenture account. Teletech's human resource
pose a serious and imminent threat to the life or office informed Juan that he would be
property of the Er or of his/her co-Ees. These transferred to the Telstra account upon
requirements are not present here. successfully passing the training, assessment
and examination. Teletech gave him a copy of
the Transfer Agreement and informed him that
his refusal to take the examinations would
D. RELIEFS FROM ILLEGAL DISMISSAL
(Art. 294, LC) result in the termination of his services on the
ground of redundancy. Juan refused to undergo
training and take the examinations under the
Remedies of Employee in Case of Illegal belief that he was entitled to security of tenure.
He was dismissed. Is Juan's dismissal on grounds
Dismissal
of redundancy proper?
In case where the worker is illegally terminated, his
A: NO. To successfully invoke a valid dismissal due
remedies are: (Re-F-D-I-S)
to redundancy, there must be: (1) a written notice
1. Reinstatement without loss of seniority rights served on both the Ees and the DOLE at least one
month prior to the intended date of termination of
NOTE: Actual reinstatement or payroll employment; (2) payment of separation pay
reinstatement; equivalent to at least one month pay for every year
of service; (3) good faith in abolishing the redundant
2. Full backwages positions; and (4) fair and reasonable criteria in
ascertaining what positions are to be declared
redundant and accordingly abolished. Moreover,
NOTE: Full backwages means no deduction;
the company must provide substantial proof that
the services of the Ees are in excess of what is
3. Separation pay in lieu of reinstatement;
required of the company.
4. Damages, including Attorney’s fees; and
Teletech fails to convincingly show the alleged
decline in Accenture's business and that the
5. 6% Legal Interest on monetary award.
expected volume of calls for its Accenture account
would not materialize. In other words, redundancy
was not proven. Teletech should have presented any
document proving the decline in Accenture's
volume of calls for the past months, or affidavits of
the Accenture and Teletech officers who determined
2024 GOLDEN NOTES
that business was slowing down and their basis computed at two (2) months for his services for
thereof. (Teletech Customer Care Management two (2) years. Nielo averred that he could not be
Philippines, Inc v. Marui Gerona, Jr., G.R. No. 219166, entitled to separation pay considering that he
November 10, 2021) voluntarily resigned. Remoticado then filed a
complaint for illegal dismissal claiming that he
Q: PAL dismissed strike leader Capt. Gaston, as a was told to stop reporting for work due to a
result of which, the Union resolved to undertake "debt at the canteen" and thereafter was
the grounding of all PAL planes and the filing of prevented from the company’s premises. Was
applications for “protest retirement” of there an illegal dismissal?
members who had completed 5 years of
continuous service, and “protest resignation” for A: NO. There can be no illegal termination when
those who had rendered less than 5 years of there was no termination. Before the Er must bear
service in the company. PAL acknowledged the burden of proving that the dismissal was legal,
receipt of said letters and among the pilots the Ee must first establish by substantial evidence
whose “protest resignation or retirement” was the fact of his dismissal from service. If there is no
accepted by PAL were Enriquez and Ecarma. dismissal, then there can be no question as to the
legality or illegality thereof. Petitioner insists on his
Before their readmission, PAL required version of events, that is, that on Dec. 23, 2010, he
Enriquez and Ecarma to accept 2 conditions, was told to stop reporting for work on account of his
namely: that they sign conformity to PAL’s letter supposed indebtedness at the canteen. This bare
of acceptance of their retirement and or insistence, however, is all that petitioner has. He
resignation, and that they submit an application failed to present convincing evidence. (Remoticado
for employment as new Ees without protest or v. Typical Construction Trading Corp., G.R. No.
reservation. As a result of this, their seniority 206529, 23 Apr. 2018)
rights were lost. Are the pilots entitled to the
restoration of their seniority rights? Q: On July 1986, Arriola was employed as a
correspondent assigned in Olongapo City and
A: NO. An Ee has no inherent right to seniority. He Zambales under Pilipino Star Ngayon, Inc.
only has such rights as may be based on a contract, (Pilipino Star). Sometime in November 2002,
statute, or an administrative regulation relative after his column was removed from publication,
thereto. Seniority rights which are acquired by an Ee Arriola never returned for work. Three years
through long-time employment are contractual and later, Arriola filed an illegal dismissal complaint
not constitutional. The discharge of an Ee thereby against Pilipino Star stating that he was
terminating such rights would not violate the “arbitrarily dismissed.”
Constitution.
Arguing that he was a regular Ee, Arriola
When the pilots tendered their respective contended that his rights to security of tenure
retirement or resignation and PAL immediately and due process were violated. On the other
accepted them, both parties mutually terminated hand, Pilipino Star claims that he was never
the contractual employment relationship between dismissed, in fact, they tried calling and sending
them thereby curtailing whatever seniority rights him messages to report for work but to no avail
and privileges the pilots had earned through the until such time that they discovered that Arriola
years. (Enriquez v. PAL, G.R. No. L-51382, 29 Dec. transferred to a rival newspaper publisher. The
1986) Labor Arbiter dismissed the case stating that
there was no illegal dismissal for Arriola was the
Q: Remoticado was absent for 14 days without one who abandoned his work. Is the Labor
an official leave. He then informs Nielo, HR Arbiter correct in dismissing the complaint?
officer, that he was resigning due to personal
reasons. After receiving his final pay, he A: YES. Pilipino Star Ngayon, Inc. did not illegally
protested that he was entitled to separation pay dismiss Ariolla. The removal of Arriola’s column
2024 GOLDEN NOTES
from Pilipino Star’s newspaper is not tantamount to Reinstatement of an Employee in Payroll When
a termination of his employment as his job is not Actual Reinstatement is No Longer Possible
dependent on the existence of the column.
Moreover, a newspaper publisher has the 1. When the Er believes that there was a valid
management prerogative to determine what cause for dismissal; or
columns to print in its newspaper. Furthermore, it
took him three years to file the complaint of illegal 2. When Er does not want to see anymore an
dismissal which is a clear intention to sever his unwanted face in the company premise because
employment with Pilipino Star Ngayon, Inc. (Arriola it may demoralize Ees.
v. Pilipino Star Ngayon, Inc., G.R. No. 175689, 13 Aug.
2014) NOTE: An order of reinstatement by the LA is not
the same as actual reinstatement of a dismissed or
Reinstatement separated Ee, however it is immediately executory
even pending appeal. Thus, until the Er continuously
It is the restoration of the Ee to the state from which fails to implement the reinstatement aspect of the
he has been unjustly removed or separated without decision of the LA, their obligation to the illegally
loss of seniority rights and other privileges. The dismissed Ee, insofar as accrued backwages and
person reinstated assumes the position he had other benefits are concerned, continues to
occupied prior to his dismissal, and is, ordinarily, accumulate. It is only when the illegally dismissed
entitled only to the last salary in that position. Ee receives the separation pay (in case of strained
(Azucena, 2016) relations) that it could be claimed with certainty
that the Er-Ee relationship has formally ceased
Reinstatement presupposes that the previous thereby precluding the possibility of reinstatement.
position from which one had been removed still (Triad Security & Allied Services, Inc. v. Ortega, G.R.
exists, or that there is an unfilled position which is No. 160871, 06 Feb. 2006)
substantially equivalent or of similar nature as the
one previously occupied by the Ee. Q: Is an illegally dismissed Ee entitled to
reinstatement as a matter of right?
Forms of Reinstatement
A: YES.
1. Actual or physical – The Ee should be
reinstated to his position which he occupies XPNs: Proceeds from an illegal dismissal wherein
prior to his illegal dismissal under the same reinstatement is ordered but cannot be carried out
terms and conditions prevailing prior to his as in the following cases:
dismissal or separation or, if no longer available,
to a substantially equivalent position. 1. Reinstatement cannot be effected in view of the
long passage of time or because of the realities
2. Payroll – The Ee is merely reinstated in the of the situation;
payroll. The Ee although not admitted back to
work, would nevertheless be included in the 2. It would be inimical to the Er’s interest;
payroll and entitled to receive salary and other
benefits as if she were in fact working. (Azucena, 3. When reinstatement is no longer feasible;
2016)
4. When it will not serve the best interest of the
NOTE: Er is given the option to reinstate either parties involved;
actual or in payroll.
5. Company will be prejudiced by reinstatement;
6. When it will not serve a prudent purpose;
2024 GOLDEN NOTES
7. When there is resultant strained relation; or ministerial upon the LA to implement the order of
reinstatement and it is mandatory on the Er to
NOTE: applies to both confidential and comply therewith.
managerial Ees only.
NOTE: After the LA’s decision is reversed by a higher
8. When the position has been abolished. tribunal, the Ee may be barred from collecting the
accrued wages, if it is shown that the delay in
NOTE: Applies to managerial, supervisory and enforcing the reinstatement pending appeal was
rank-and-file Ees. without fault on the part of the Er.
In such cases, it would be more prudent to order Two-Fold Test

payment of separation pay instead of reinstatement.
(Quijano v. Mercury Drug Corporation, G.R. No. 1. There must be actual delay or the fact that the
126561, 08 July 1998) order of reinstatement pending appeal was not
executed prior to its reversal; and
Order of Reinstatement
2. The delay must not be due to the Er’s unjustified
An order of reinstatement entitles an Ee to receive act or omission. If the delay is due to the Er’s
his accrued backwages from the moment the unjustified refusal, the Er may still be required
reinstatement order was issued up to the date when to pay the salaries notwithstanding the reversal
the same was reversed by a higher court without of the LA’s decision. (Garcia v. PAL, G.R. No.
fear of refunding what he had received. (Pfizer v. 164856, 29 Aug. 2009)
Velasco, G.R. No. 177467, 09 Mar. 2011)
Q: May the Court order the reinstatement of a
Art. 229 vs. Art. 294 dismissed Ee even if the prayer of the complaint
did not include such relief?
ART. 229 ART. 294
A: YES. So long as there is a finding that the Ee was
May be availed of as Presupposes that the illegally dismissed, the court can order the
soon as the LA renders judgment has already reinstatement of an Ee even if the complaint does
a judgment declaring become final and not include a prayer for reinstatement, unless of
that the dismissal of executory. course the Ee has waived his right to reinstatement.
the Ee is illegal and By law, an Ee who is unjustly dismissed is entitled to
ordering said Consequently, there is reinstatement among others. The mere fact that the
reinstatement. It may nothing left to be done complaint did not pray for reinstatement will not
be availed of even except the execution prejudice the Ee, because technicalities of law and
pending appeal thereof. procedure are frowned upon in labor proceedings.
(Pheschem Industrial Corp. v. Moldez, G.R. No.
116158, 09 May 2005)
NOTE: An award or order for reinstatement is self-
executory. It does not require the issuance of a writ
NOTE: Reinstatement ordered by LA is self-
of execution. (Pioneer Texturizing Corp. v. NLRC, G.R.
executory as provided under Art. 229 while the one
No. 118651, 06 Oct. 1997)
by the NLRC is not because it awaits the issuance of
a writ of execution under Art. 230. (Azucena, 2016)
Reinstatement Pending Appeal
Q: A complaining Ee obtained a favorable

A dismissed Ee whose case was favorably decided by
decision in an illegal dismissal case. The LA
the LA is entitled to receive wages pending appeal
ordered her immediate reinstatement. The Er
upon reinstatement, which is immediately
opted payroll reinstatement pending appeal.
executory. Unless there is a restraining order, it is
The NLRC ruled that the dismissal was valid. The
2024 GOLDEN NOTES
Er stopped the payroll reinstatement. The Ee directed him to transfer to Bay 38 to supervise
elevated the case to the CA, and eventually to the the commencement of loading operations.
SC. The SC upheld the dismissal. Is the Ee entitled Pursuant to said instruction, Reyes left the four
to continued payroll reinstatement after the (4) APPs to complete lashing operations at Bay
NLRC decision? 30 and proceeded to Bay 38 where a loading
operation was about to start and the crane was
A: NO. The Ee is not entitled to continued payroll already positioned.
reinstatement. The decision of the NLRC on appeals
from decisions of the LA shall become final and In a Notice to Explain with Preventive
executory after ten (10) calendar days from receipt Suspension, the ATI informed Reyes that his
thereof by the parties. That the CA may take failure to ensure that the safeguards for works
cognizance of and resolve a petition for certiorari for on board the vessel were faithfully observed
the nullification of the decisions of the NLRC on constitutes probable violation under Sec. 2.2 of
jurisdictional and due process considerations does the CTOP (neglect of work, incompetence,
not affect the statutory finality of the NLRC decision. inefficiency, negligence, failure to perform
Since the NLRC decision which upheld the dismissal duties and/or responsibilities, or failure to
became final, the Er was correct in stopping the observe standard operating procedures, in any
payroll reinstatement of the Ee. (Bago v. NLRC, G.R. case resulting in injury or death) and may merit
No. 170001, 04 Apr. 2007) the penalty of dismissal. Is Reyes, Jr. illegally
dismissed?
Q: What happens if there is an Order of
Reinstatement but the position is no longer A: NO. Indeed, as pointed out by the CA, ATI failed to
available? present clear, accurate, positive, and convincing
evidence that there is just cause to terminate Reyes'
A: The Ee should be given a substantially equivalent employment. First, Reyes merely followed the rules
position. If no substantially equivalent position is in the performance of his job. In fact, his transfer to
available, reinstatement should not be ordered Bay 38 was by instructions of the EC Planner.
because that would in effect compel the Er to do the Second, his transfer to Bay 38 was necessary
impossible. In such a situation, the Ee should merely because a quay crane has already been
be given a separation pay consisting of one (1) prepositioned and loading operation was about to
month salary for every year of service. (Grolier Int’l commence.
Inc. v. ELA, G.R. No. 83523, 31 Aug. 1989)
Reinstatement cannot be barred especially when
Q: Eteliano Reyes, Jr. was employed by Asian the Ee has not indicated an aversion to returning to
Terminals, Inc. (ATI) as Supervisor III/Foreman work or does not occupy a position of trust and
on Board who shall be responsible in ensuring confidence or has no say in the operation of the Er's
that shift vessel operations are carried in business. Here, aside from the fact that this issue
accordance with ATI standards. He first went to was only raised for the first time, there is also no
Bay 30, but he had to leave the All Purpose compelling evidence presented to support the
Personnel (APP) tasked to finish the lashing conclusion that the parties' relationship has gone so
operations as he needed to supervise the sour to render reinstatement impracticable. Also,
loading operations at Bay 38. Reyes has not demonstrated unwillingness to be
reinstated and the existence of a confidential
With a twist of fate, an accident occurred at Bay relationship between him, as a supervisory Ee, and
30 wherein a lashing bar fell on the pier apron ATI, has not been established. For lack of evidence
hitting Manuel Quiban a vessel security guard. on record, it appears that his position was not a
As expected, ATI directed Reyes to explain why sensitive position as would require complete trust
he should not be penalized for negligence. In his and confidence, and where personal ill will would
response, Reyes clarified that while completing foreclose his reinstatement. (Asian Terminals, Inc. v.
the lashing operations at Bay 30, "EC Planner" Reyes, Jr., G.R. No. 240507, 28 Apr. 2021)
2024 GOLDEN NOTES
Backwages Q: What is the basis of awarding backwages to an
illegally dismissed Ee?
It refers to the relief given to an Ee to compensate
him for the lost earnings during the period of his A: The payment of backwages is generally granted
dismissal. It presupposes illegal termination. on the ground of equity. It is a form of relief that
(Azucena, 2016) restores the income that was lost by reason of the
unlawful dismissal; the grant thereof is intended to
NOTE: Entitlement to backwages of the illegally restore the earnings that would have accrued to the
dismissed Ee flows from law. Even if he does not ask dismissed Ee during the period of dismissal until it
for it, it may be given. The failure to claim backwages is determined that the termination of employment
in the complaint for illegal dismissal is a mere is for a just cause. It is not private compensation or
procedural lapse which cannot defeat a right damages but is awarded in furtherance and
granted under substantive law. (St. Michael’s effectuation of the public objective of the LC. Nor is
Institute v. Santos, G.R. No. 145280, 04 Dec. 2001) it a redress of a private right but rather in the nature
of a command to the Er to make public reparation
The award of backwages and/or separation pay due for dismissing an Ee either due to the former’s
to illegally dismissed employees shall include all unlawful act or bad faith. (Tomas Claudio Memorial
salary increases and benefits granted under the law College Inc., v. CA, G.R. No. 152568, 16 Feb. 2004)
and other government issuances, Collective
Bargaining Agreements, employment contracts, Q: What is the period covered by the payment of
established company policies and practices, and backwages?
analogous sources which the employees would have
been entitled to had they not been illegally A: The backwages shall, from the time that wages
dismissed except salary increases and other benefits are unlawfully withheld until the time of actual
which are contingent or dependent on variables reinstatement or, if reinstatement is no longer
such as an employee's merit increase based on feasible, until the finality of judgment awarding
performance or longevity or the company's financial backwages, cover the period from the date of
status shall not be included in the award. dismissal of the Ee up to the date of:
In Dumapis v. Lepanto Consolidated Mining 1. Actual reinstatement, or if reinstatement is no

Company (G.R. No. 204060, 15 Sept. 2020), the longer feasible;
Supreme Court declared that, the time has come to
settle these contradictions, once and for all. Verily, 2. Finality of judgment awarding backwages.
the Court now ordains the uniform rule that the (Buhain v. CA, G.R. No. 143709, 02 July 2002)
award of backwages and/or separation pay due to
illegally dismissed employees shall include all salary The backwages to be awarded should not be
increases and benefits granted under the law and diminished or reduced by earnings elsewhere
other government issuances, Collective Bargaining during the period of his illegal dismissal. The reason
Agreements, employment contracts, established is that the Ee while litigating the illegality of his
company policies and practices, and analogous dismissal must earn a living to support himself and
sources which the employees would have been his family. (Bustamante v. NLRC, G.R. No. 111651, 15
entitled to had they not been illegally dismissed. On March 1996; Buenviaje v. CA, G.R. No. 147806, 12 Nov.
the other hand, salary increases and other benefits 2002)
which are contingent or dependent on variables
such as an employee's merit increase based on Full Backwages
performance or longevity or the company's financial
status shall not be included in the award. The LC points to "full backwages" as meaning
exactly that, i.e., without deducting from backwages,
the earnings derived elsewhere by the concerned Ee
2024 GOLDEN NOTES
during the period of his illegal dismissal. (Buenviaje was too severe a penalty considering that she had
v. CA, G.R. No. 147806, 12 Nov. 2002) served the employer company for 21 years, it was
her first offense, and her leave to study the French
NOTE: The award of backwages is computed based language would ultimately benefit the employer
on a 30-day month. who no longer had to spend for translation services.
Even so, other than ordering the employee’s
Period Covered by Full Backwages reinstatement, we awarded the said employee
From the date of illegal dismissal to the Ee’s date of backwages limited to a period of two years, given
actual reinstatement. that the employer acted without malice or bad faith
in terminating the employee’s services.
Limited Backwages
While in the aforementioned cases of illegal
Art. 294 of the LC, as amended, is not absolute, and dismissal, we ordered the employees’
its application has been qualified and/or limited by reinstatement, but awarded only limited backwages
our jurisprudence, viz: “Foremost is the case of in recognition of the employer’s good faith, there
Agabon v. NLRC (G.R. No. 158693, 17 Nov. 2004), were also instances when we only required the
which definitively settled that where there is valid employer to reinstate the dismissed employee
or authorized cause for the dismissal of the without any award for backwages at all.
employee, but the employer failed to comply with
statutory due process in effecting the same, the The employee in Itogon-Suyoc Mines, Inc. v. NLRC
dismissal is not illegal. Logically, if there is no illegal (G.R. No. L-54280, 30 Sept. 1982), was found guilty of
dismissal in such a case, then we can deduce that the breach of trust for stealing high-grade stones from
dismissed employee cannot avail himself of the his employer. However, taking into account the
rights under Art. 279 of the LC, i.e., reinstatement employee’s 23 years of previously unblemished
and full backwages. What the employee can demand service to his employer and absent any showing that
from the employer, according to Agabon, is the his continued employment would result in the
payment of nominal damages as indemnification for employer’s oppression or self-destruction, we
the violation of the former’s statutory rights. considered the employee’s dismissal a drastic
punishment. We deemed that the ends of social and
In San Miguel Corporation v. Javate, Jr. (G.R. No. compassionate justice would be served by ordering
54244, 27 Jan. 1992), we affirmed the consistent the employee reinstated but without backwages in
findings and conclusions of the LC, NLRC, and CA view of the employer’s obvious good faith.
that the employee was illegally dismissed since he
was still fit to resume his work; but the employer’s Similarly, in San Miguel Corporation v. Secretary of
liability was mitigated by its evident good faith in Labor (G.R. No. L-39195, 26 May 1975), the
terminating the employee’s services based on the employee was dismissed after he was caught buying
terms of its Health, Welfare and Retirement Plan. from his co-workers medicines that were given
Hence, the employee was ordered reinstated to his gratis to them by the employer company, and re-
former position without loss of seniority and other selling said medicines, in subversion of the
privileges appertaining to him prior to his dismissal, employer’s efforts to give medical benefits to its
but the award of backwages was limited to only one workers. We likewise found in this case that the
year considering the mitigating circumstance of employee’s dismissal was too drastic a punishment
good faith attributed to the employer. in light of his voluntary confession that he
committed trafficking of company-supplied
In another case, Dolores v. NLRC (G.R. No. 87673, 24 medicines out of necessity, as well as his promise
Jan. 1992), the employee was terminated for her not to repeat the same mistake. We ordered the
continuous absence without permission. Although employee’s reinstatement but without backwages,
we found that the employee was indeed guilty of again, in consideration of the employer’s good faith
breach of trust and violation of company rules, we in dismissing him.
still declared the employee’s dismissal illegal as it
2024 GOLDEN NOTES
Reference may also be made to the case of Manila employee's fault, is not, as a general rule, entitled to
Electric Company v. NLRC (G.R. No. 78763 12 July separation pay. The non-grant of such right to
1989), wherein the employee was found responsible separation is pay premised on the reason that an
for the irregularities in the installation of electrical erring employee should not benefit from their
connections to a residence, for which reason, his wrongful acts. Under Sec. 7, Rule I, Book VI of the
services were terminated by the employer’s Omnibus Rules Implementing the LC, such
company. We, however, affirmed the findings of the dismissed employee is nonetheless entitled to
NLRC and the Labor Arbiter that the employee whatever rights, benefits, and privileges he may
should not have been dismissed considering his 20 have under the applicable individual or collective
years of service to the employer without any agreement with the employer or voluntary
previous derogatory record and his being awarded employer policy or practice.
in the past two commendations for honesty. We thus
ruled that the employee’s reinstatement is proper, As an exception, case law allows the grant of
without backwages, bearing in mind the employer’s separation pay or financial assistance to a legally-
good faith in terminating his services. dismissed employee as a measure of social justice or
on grounds of equity.
Separation Pay in lieu of Reinstatement
In Philippine Long Distance Telephone Co. v. NLRC
GR: Separation pay is not a usual consequence of (G.R. No. 80609, 23 Aug. 1988), the Court allowed the
illegal dismissal because if there is a finding of illegal grant when the employee was validly dismissed for
dismissal, the Ee shall be entitled to reinstatement causes other than serious misconduct or those
and backwages. reflecting on his moral character. The payment of
separation pay and reinstatement are exclusive
XPNs: Separation pay takes the place of remedies. The payment of separation pay replaces
reinstatement in the following instances: the legal consequences of reinstatement to an
employee who was illegally dismissed. To award
1. When Ee’s previous position or its substantial separation pay in lieu of reinstatement to an
equivalent position is not anymore existing, i.e., employee who was never dismissed by his employer
occupied by another Ee or the business is would only give imprimatur to the unacceptable act
already closed; and of an employee who is facing charges related to his
employment, but instead of addressing the
2. When there is an application of the doctrine of complaint against him, he opted to file an illegal
strained relations. dismissal case against his employer.
In Claudia’s Kitchen, Inc. v. Tanguin (G.R. No. 221096, In sum, separation pay is only awarded to a
28 June 2017), the Supreme Court pointed out the dismissed employee in the following instances:
rule, and the exception thereto, in awarding
separation pay in lieu of reinstatement to an 1. In case of closure of establishment under Art.
employee who was not dismissed from his 298 [formerly Art. 283] of the LC;
employment, legally or illegally. 2. In case of termination due to disease or sickness
under Art. 299 [formerly Art. 284] of the LC;
The grant of separation pay in lieu of reinstatement 3. As a measure of social justice in those instances
has no legal basis. Separation pay is warranted when where the employee is validly dismissed for
the cause for termination is not attributable to the causes other than serious misconduct or those
employee's fault, such as those provided in Arts. 298 reflecting on his moral character;
and 299 of the LC, as well as in cases of illegal 4. Where the dismissed employee's position is no
dismissal where reinstatement is no longer feasible. longer available;
On the other hand, an employee dismissed for any of 5. When the continued relationship between the
the just causes enumerated under Art. 297 of the employer and the employee is no longer viable
same Code, being causes attributable to the due to the strained relations between them; or
2024 GOLDEN NOTES
6. When the dismissed employee opted not to be 4. In case of termination, when it is mandated to
reinstated, or the payment of separation be paid under a CBA or explicit company policy.
benefits would be for the best interest of the
parties involved. Doctrine of Strained Relations
In all of these cases, the grant of separation pay It is when the Er can no longer trust the Ee and vice
presupposes that the employee to whom it was versa or there were imputations of bad faith to each
given was dismissed from employment, whether other, reinstatement could not effectively serve as a
legally or illegally. In fine, as a general rule, remedy. This rule applies only to positions which
separation pay in lieu of reinstatement could not be require trust and confidence. (Globe Mackay v. NLRC,
awarded to an employee whose employment was G.R. No. 82511, 03 Mar. 1992)
not terminated by his employer.
NOTE: Under the circumstances where the
In Dee Jay's Inn and Cafe v. Raneses (G.R. No. 191823, employment relationship has become so strained to
05 Oct. 2016), the Court wrote that in ‘a case where preclude a harmonious working relationship and
the employee was neither found to have been that all hopes at reconciliation are naught after
dismissed nor to have abandoned his/her work, the reinstatement, it would be more beneficial to accord
general course of action is for the Court to dismiss the Ee backwages and separation pay.
the complaint, direct the employee to return to
work, and order the employer to accept the Need to Be Proven Before the Doctrine Of
employee.’ Strained Relations Can Be Applied
There were cases, however, wherein the Court 1. The Ee concerned occupies a position where he
awarded separation pay in lieu of reinstatement to enjoys the trust and confidence of his Er; and
the employee even after a finding that there was
neither dismissal nor abandonment. 2. That it is likely if the Ee is reinstated, an
atmosphere of antipathy and antagonism may
In Nightowl Watchman & Security Agency, Inc. v. be generated as to adversely affect the efficiency
Lumahan (G.R. No. 212096, 14 Oct. 2015), the Court and productivity of the Ee concerned. (Ibid.)
awarded separation pay in view of the findings of
the NLRC that respondent stopped reporting for Requisites of the Doctrine of Strained Relations
work for more than ten (10) years and never
returned, based on the documentary evidence of 1. It must be alleged and proved by the Er;
petitioner.
2. The evidence that should sustain the
The circumstances in this case, however, does not application of strained relations should be more
warrant an application of the exception. Thus, the than just the illegal dismissal case that has been
general rule that no separation pay may be awarded filed by the Ee; and
to an employee who was not dismissed obtains in
this case. In this regard, it is only proper for Tanguin NOTE: There must be independent evidence
to report back to work and for the petitioners to showing that the relations have been strained.
accept her, without prejudice to the on-going
investigation against her. 3. The position must involve a position of trust and
confidence.
Instances When Separation Pay Must Be Paid
Q: Does the strained relations rule always bar
1. Termination due to authorized causes; reinstatement in all cases?
2. Separation pay in lieu of reinstatement;
3. By way of financial assistance; and A: NO. The rule should be applied on a case-to-case
basis, based on each case’s peculiar conditions and
2024 GOLDEN NOTES
not universally. Otherwise, reinstatement can never A: NO. Romeo is considered resigned. Romeo’s
be possible simply because some hostility is various pleadings support his intention of not
invariably engendered between the parties as a returning to work on the ground that his health is
result of litigation. That is human nature. (Anscor failing. Moreover, Romeo did not ask for
Transport v. NLRC, G.R. No. 85894, 28 Sept. 1990) reinstatement and rejected AAA Company’s offer for
Besides, no strained relations should arise from a him to return to work. This is tantamount to
valid and legal act of asserting one's right; resignation. Resignation is defined as the voluntary
otherwise, an Ee who shall assert his right could be act of an Ee who finds himself in a situation where
easily separated from the service, by merely paying he believes that personal reasons cannot be
his separation pay on the pretext that his sacrificed in favor of the exigency of the service, and
relationship with his Er had already become he has no other choice but to disassociate himself
strained. (Globe Mackay v. NLRC, G.R. No. 82511, 03 from his employment. Romeo is not entitled to
Mar. 1992) separation pay. There is no provision in the LC which
grants separation pay to voluntarily resigning Ees.
Q: Delfin and Luisito are licensed drivers of In fact, the rule is that an Ee who voluntarily resigns
public utility jeepneys owned by Moises Capili. from employment is not entitled to separation pay,
When Capili assumed ownership and operation except when it is stipulated in the employment
of the jeepneys, the drivers were required to sign contract or CBA, or it is sanctioned by established Er
individual contracts of lease of the jeepneys. The practice or policy. Hence, Romeo is not entitled to
drivers gathered the impression that signing the separation pay in the absence of a Labor provision
contract was a condition precedent before they and a stipulation in his employment contract or CBA.
could continue driving. The drivers stopped (Villaruel v. Yeo Han Guan, G.R. No. 169191, 01 June
plying their assigned routes and a week later 2011)
filed with the LA a complaint for illegal dismissal
praying not for reinstatement but for separation Q: Two groups of seasonal workers claimed
pay. Are the respondents entitled to separation separation benefits after the closure of Phil.
pay? Tobacco processing plant in Balintawak and the
transfer of its tobacco operations to Candon,
A: NO. When the drivers voluntarily chose not to Ilocos Sur. Phil. Tobacco refused to grant
return to work anymore, they must be considered as separation pay to the workers belonging to the
having resigned from their employment. The first batch, because they had not been given
common denominator of those instances where work during the preceding year and, hence, were
payment of separation pay is warranted is that the no longer in its employ at the time it closed its
Ee was dismissed by the Er. (Capili v. NLRC, G.R. Balintawak plant. Likewise, it claims exemption
117378, 26 Mar. 1997) from awarding separation pay to the second
batch, because the closure of its plant was due to
Q: Romeo has been an Ee of AAA Company from "serious business losses," as defined in Art. 298
1993 to 1999 but was unable to report to work of the LC.
due to some illness. Romeo claimed that he was
offered by AAA of Php 15,000 separation pay, on Both labor agencies held that the two groups
the contrary AAA claimed Romeo was never were entitled to separation pay equivalent to ½-
terminated and even told the latter that Romeo month salary for every year of service, provided
could go back to work anytime but Romeo that the Ee worked at least 1 month in a given
clearly manifested that he was no longer year. Is the separation pay granted to an illegally
interested in returning to work and instead dismissed Ee the same as that provided under
asked for separation pay. Is Romeo terminated Art. 298 of the LC in case of retrenchment to
or considered resigned? Is Romeo entitled to prevent losses?
separation pay?
A: NO. The separation pay awarded to Ees due to
illegal dismissal is different from the amount of
2024 GOLDEN NOTES
separation pay provided for in Art. 298 of the LC. Moreover, the Court reiterates that GOCCs, like
Proceeding from the above, Phil. Tobacco is liable for Transco, are government entities created by special
illegal dismissal and should be responsible for the law. The terms and conditions of employment of its
reinstatement of the first group and the payment of employees are different from the rules of
their backwages. However, since reinstatement is no employment in private practice. The Labor Code
longer possible as Phil. Tobacco have already closed recognizes that the terms and conditions of
its Balintawak plant, members of the said group employment of all government employees,
should instead be awarded normal separation pay including those of GOCCs, are governed by the Civil
(in lieu of reinstatement) equivalent to at least one Service Law, rules and regulations, as well as the
(1) month pay, or one month pay for every year of specific charters for those GOCCs created by virtue
service, whichever is higher. of a special law. (National Transmission Corporation
(Transco) v. COA, G.R. No. 246173, 22 June 2021, as
It must be stressed that the separation pay being penned by J. M.V Lopez.)
awarded to the first group is due to illegal dismissal;
hence, it is different from the amount of separation Q: Does separation pay apply in cases of legal
pay provided for in Art. 298 in case of retrenchment dismissal?
to prevent losses or in case of closure or cessation of
the Er’s business, in either of which the separation A: YES. Separation pay is warranted when the cause
pay is equivalent to at least one (1) month or one- for termination is not attributable to the Ee's fault,
half (1/2) month pay for every year of service, such as those provided in Arts. 298 and 299 of the
whichever is higher. (Phil. Tobacco Flue-Curing & Labor Code, as well as in cases of illegal dismissal
Redrying Corp. v. NLRC, G.R. No. 127395, 10 Dec. where reinstatement is no longer feasible. On the
1998) other hand, an Ee dismissed for any of the just
causes enumerated under Art. 297 of the same Code,
Q: Transco, a GOCC, was privatized to NGCP, being causes attributable to the Ee's fault, is not, as
which resulted to several employee separation a general rule, entitled to separation pay. As an
that was granted with separation pay. Some exception, case law allows the grant of separation
disbursements for the payment of these pay or financial assistance to a legally-dismissed Ee
separation benefits were disallowed in audit for as a measure of social justice or on grounds of
the separated employees are contractual equity. (Claudia’s Kitchen, Inc. v. Tanguin, G.R. No.
employees or these disbursements represent 221096, June 28, 2017)
the excess in the separation pay given which
resulted from the rounding-off method. Was the Damages
rounding-off method used by Transco proper for
the computation of the separation pay? When the termination of the services of an
employee is attended by fraud or bad faith on the
A: NO. The additional separation pay in this case, part of the employer as when the latter knowingly
which resulted from the rounding-off of the length made false allegations of a supposed valid cause
of service, remains to be illegal and unjustified when none existed, moral and exemplary damages
because Transco failed to adduce proof of the may be awarded in favor of the former. (Lirag Textile
required presidential approval. Neither can Transco Mills, Inc. v. CA, GR No. L-30786, 14 Apr. 1975)
finds support from Art. 287, now Art. 302, of the
Labor Code, as amended, to legitimize such Moral Damages
additional separation pay. This provision
specifically pertains to retirement pay, not Moral damages may be awarded to compensate one
separation pay. The Court cannot equate the for diverse injuries such as mental anguish,
benefits of retirement pay from that of separation besmirched reputation, wounded feelings, and
pay since they serve distinct purposes. social humiliation. It is however not enough that
such injuries have arisen; it is essential that they
have sprung from a wrongful act or omission of the
2024 GOLDEN NOTES
defendant which was the proximate cause thereof Attorney’s Fees
e.g., breach of contract. (Suario v. BPI, G.R. No. 50459,
25 Apr. 1989) In employment termination cases, attorney’s fees
are not recoverable where there is no sufficient
NOTE: There should be proof of bad faith on the part showing of bad faith on the part of private
of the Er for moral damages to be awarded. respondent (Er) there must always be a factual basis
for the award of attorney’s fee. (Pepsi Cola Products,
Exemplary damages et al. v. E.V. Santos, G.R. No. 165968, 14 Apr. 2008)
It may be awarded only if the dismissal was shown Q: What is the condition before attorney’s fees
to have been effected in a wanton, oppressive or can be awarded?
malevolent manner. (Cocoland Development Corp. v.
NLRC and Mago, G.R. No. 98458, 17 July 1996) A: If there is unlawful withholding of wages and
benefits, then there is going to be an award of 10%
Nominal Damages of the monetary award by way of Attorney’s Fees.
In the determination of the amount of nominal Since the Ee was illegally dismissed, and by virtue of
damages which is addressed to the sound discretion the illegal dismissal, he was deprived of wages and
of the court, several factors are taken into account: benefits that he should have gotten if he was not
illegally dismissed. The award of ten percent (10%)
1. The authorized cause invoked; becomes automatic in illegal dismissal cases.
2. The number of Ees to be awarded; Therefore, there is no need to prove bad faith in so
far as attorney’s fees is concerned.
3. The capacity of the Ers to satisfy the awards,
taken into account their prevailing financial NOTE: Attorney’s fees is dependent on the question
status as borne by the records; of whether there is unlawful withholding of wages
and benefits or not. And that is, precisely because,
4. The Er’s grant of other termination benefits in there is a finding of illegal dismissal. (Art. 111, LC) It
favor of the Ees; is not dependent on bad faith, but is automatic when
there is a finding of illegal dismissal. Art. 111 is an
5. Whether there was a bona fide attempt to exception to the declared policy of strict
comply with the notice requirements as construction in the awarding of attorney’s fees.
opposed to giving no notice at all. (Industrial Although an express finding of facts and law is still
Timber Corp. et al. v. Ababan, et al., G.R. No. necessary to prove the merit of the award, there
164518, March 30, 2006) need not be any showing that the employer acted
maliciously or in bad faith when it withheld the
6. The Er’s financial, medical, and/or moral wages. There need only be a showing that the lawful
assistance to the sick Ee; and wages were not paid accordingly
7. The flexibility and leeway that the Er allowed Commonly Accepted Concepts of Attorney's Fees
the sick Ee in performing his duties while
attending to his medical needs. (Deoferio v. Intel In its ordinary concept, an attorney's fee is the
Technology Phil., G.R. No. 202996, 18 June 2014) reasonable compensation paid to a lawyer by his
client for the legal services he has rendered to the
NOTE: Actual damages cannot be awarded because latter. The basis of this compensation is the fact of
that is already represented by the backwages his employment by and his agreement with the
payable to the Ee. That is the actual damages he client.
suffered.
2024 GOLDEN NOTES
In its extraordinary concept, attorney's fees are so conducted as to make it merely an
deemed indemnity for damages ordered by the instrumentality, agency, conduit or adjunct of
court to be paid by the losing party in a litigation. another corporation. (Sarona v. NLRC, G.R. No.
185280, 18 Jan. 2012)
Liabilities of Corporate Officers
NOTE: For the piercing-the-veil doctrine to apply, it
It is basic that a corporation is invested by law with is of no consequence if the entity is single
a personality separate and distinct from those of the proprietorship. It is the act of hiding behind the
persons composing it as well as from that of any personalities of juridical entities that the equitable
other legal entity to which it may be related. piercing doctrine was formulated to address and
(Asionics Phil. v. NLRC, G.R. No. 124950, 19 May 1998) prevent. (Ibid.)
The mere fact that the officer is part of the family In labor cases, particularly, corporate directors and
corporation does not mean that all its acts are officers are solidarily liable with the corporation for
imputed to him directly and personally, in the the termination of employment of corporate Ees
absence of a showing that he acted without or in done with malice or in bad faith. (Uichico v. NLRC,
excess of his authority or was motivated by personal G.R. No. 121434, 02 June 1997)
ill-will against the Ee. (Sweet Lines, Inc. v. NLRC, G.R.
No. 79975, 16 Mar. 1989) When Er Corporation is No Longer Existing and
Unable to Satisfy Judgement in favor of Ee
GR: Officers of a corporation are not personally
liable for their official acts unless it is shown that The Supreme Court ruled that although as a rule, the
they have exceeded their authority. officers and members of a corporation are not
personally liable for acts done in the performance of
XPN: Where the incorporators and directors belong their duties, this rule admits of exceptions, one of
to a single family, the corporation and its members which is when the employer corporation is no
can be considered as one in order to avoid its being longer existing and is unable to satisfy the judgment
used as an instrument to commit injustice, or to in favor of the employee, the officers should be held
further an end subversive of justice. The shield of liable for acting on behalf of the corporation. Here,
corporate fiction shall be pierced when it is the corporation does not appear to exist anymore.
deliberately and maliciously designed to evade (Restaurante Las Conchas v. Llego, G.R. No. 119085,
financial obligations to Ees. (Pabalan v. NLRC, G.R. 09 Sept. 1999)
No. 898799, 20 Apr. 1990) Officers, then, become
personally liable. In A.C. Ransom Labor Union-CCLU v. NLRC (G.R. No.
69494, 29 May 1987), the Supreme Court declared
Only Three Basic Areas Where Doctrine of that since RANSOM is an artificial person, it must
Piercing the Corporate Veil Applies have an officer who can be presumed to be the
employer, being the "person acting in the interest of
1. Defeat public convenience as when the (the) employer" RANSOM. The corporation, only in
corporate fiction is used as a vehicle for the the technical sense, is the employer.
evasion of an existing obligation;
The responsible officer of an employer corporation
2. Fraud cases or when the corporate entity is can be held personally, not to say even criminally,
used to justify a wrong, protect fraud, or defend liable for non-payment of back wages. This is the
a crime; or policy of the law: xxx if the policy of the law were
otherwise, the corporation employer can have
3. Alter ego cases, where a corporation is merely devious ways of evading payment of backwages.
a farce since it is a mere alter ego or business
conduit of a person, or where the corporation is In the instant case, it would appear that RANSOM, in
so organized and controlled and its affairs are 1969, foreseeing the possibility or probability of
2024 GOLDEN NOTES
payment of back wages to the 22 strikers, organized Our finding is that she is in fact and legal effect the
ROSARIO to replace RANSOM, with the latter to be corporation, being not only its president and
eventually phased out if the 22 strikers win their general manager but also its owner.
case. RANSOM actually ceased operations on 01 May
1973, after the 19 December 1972 Decision of the A corporation can only act through its officers and
Court of Industrial Relations was promulgated agents. That is why the cease and desist order was
against RANSOM. directed to the "officers and agents" of A.C. Ransom,
which was actually found guilty of unfair labor
In Gudez v. NLRC (G.R. No. 83023, 23 Mar. 1990), practice. But that case clearly also holds that any
there is no dispute herein that respondent Crisologo decision against the company can be enforced
is in fact the president of respondent corporation, against the officers in their personal capacities
RAPSA. Neither is there any doubt that respondent should the corporation fail to satisfy the judgment
RAPSA had closed its business upon the order of the against it. The quoted portion of that decision
Philippine Constabulary and that as a consequence explaining the basis for such ruling makes that clear.
thereof the services of petitioner employees were Agreeably with the ruling in A.C. Ransom Labor
terminated without awarding them separation pay Union–CCLU it was held in another case that where
as required under the Labor Code. It is significant to the employer corporation is no longer existing and
note that the respondent corporation had ceased to [is] unable to satisfy the judgment in favor of the
exist when the Labor Arbiter rendered its decision employee, the officer should be held liable for acting
holding respondent Crisologo jointly and severally on behalf of the corporation. (Valderrama v. NLRC,
liable with respondent corporation for the money G.R. No. 98239, 25 Apr. 1996)
claims of its employees.
Q: Mario comes from a family of coffee bean
Moreover, records show that on 25 September 1987, growers. Deciding to incorporate his fledgling
which is the same day when the Labor Arbiter's coffee venture, he invites his best friend, Carlo,
decision was promulgated, RAPSA filed a petition to join him. Carlo is hesitant because he does not
for voluntary insolvency with the Regional Trial have money to invest but Mario suggests a
Court of Makati. The foregoing circumstances make scheme where Carlo can be the Chief Marketing
it more necessary to hold respondent Crisologo Agent of the company, earning a salary and
liable for the claims due to petitioners; otherwise, commissions. Carlo agrees, and the venture is
any decision that would be rendered in favor of the formed. After one year, the business was so
latter would be useless and ineffective for there successful that they were able to declare
would be no one against whom it can be enforced. dividends. Mario is so happy with Carlo's work
that he assigns 100 shares of stock to Carlo as
Thus, where the employer corporation is no longer part of the latter's bonus.
existing and unable to satisfy the judgment in favor
of the employee, the officers should be held liable for Much later on, it is discovered that Carlo had
acting on behalf of the corporation. (Lim v. NLRC, G.R. engaged in unethical conduct, which caused
79907, 16 Mar. 1989; Sweet Lines, Inc. v. NLRC, G.R. embarrassment to the company. Mario is forced
79975, 16 Mar. 1989) to terminate Carlo, but he does so without giving
Carlo the opportunity to explain.
Similarly, in Carmelcraft Corporation v. NLRC (G.R.
No. 90634-35, 06 June 1990), the Court finds also Carlo filed a case against Mario and the company
untenable the contention of Carmen Yulo that she is for illegal dismissal. Mario objected on the
not liable for the acts of the petitioner company, ground that the Labor Arbiter had no
assuming it had acted illegally, because the jurisdiction over the case as it would properly be
Carmelcraft Corporation is a distinct and separate considered as an intracorporate controversy
entity with a legal personality of its own. Yulo claims cognizable by the RTC. Further, Mario claimed
she is only an agent of the company carrying out the that because Carlo's dismissal was a corporate
decisions of its board of directors. We do not agree. act, he cannot be held personally liable.
2024 GOLDEN NOTES
any large-scale commercial enterprise. To award
What is the rule on the personal liability of labor claims on this presumption would be unfair,
corporate officers for a corporate act declared to unreasonable, and unconscionable. When awarding
be unlawful? (2015 BAR) labor claims, the tribunal must also consider the
type of establishment employing the laborer.
A: Corporate officers are not, as a general rule,
personally liable for the corporate acts they perform The NLRC computed respondent's backwages,
in behalf of the corporation they represent. They salary differentials, 13th month pay, and separation
are, however, personally liable for their corporate pay based on the prevailing minimum wage. As a
acts if they acted with malice or bad faith. (Girly Ico result, respondent was awarded a total of
v. Systems Technology Institute, Inc., G.R. No. 185100, P678,804.69; an amount petitioner claims is six
09 July 2014; 2009-2017 UST FCL Bar Q&A) times the inventory value of her sarisari store.
Liability Of Barangay Micro Business Considering that petitioner's store is a barangay

Enterprises (BMBEs) micro business enterprise and considering further
the discussion on the informality of a sarisari store
BMBEs are exempted from the coverage of operation, petitioner is exempt from the payment of
the Minimum Wage Law. (Sec. (7)(8), R.A. No. 9178) minimum wage. Thus, the judgment award should
be recomputed as a matter of equity.
The protection of labor, however, must be balanced
with the protection of establishments whose Constructive Dismissal Cases
clientele mainly consists of the working class and
the urban poor. When awarding labor claims, the In constructive dismissal cases, it is the Ee who
tribunal must also consider the type of bears the burden of proof since it is the Ee who is
establishment employing the laborer. alleging that he is being placed under circumstances
that is unbearable to him. It is incumbent upon the
Workers in the informal sector are no less deserving Ee to prove those circumstances that proves that
of protection than those in the formal sector. there is constructive dismissal.
However, labor tribunals must always find a way to
balance the rights and interests of even those that In constructive dismissal, it is often referred to as
are often overlooked and underserved. It cannot dismissal in disguise because there is really no
expect a tindahan with minuscule profits to apply actual dismissal. It is the Ee who has no other choice
the same labor conditions as a multi-national due to circumstances that push her to relinquish her
corporation. (Cabug-os v. Espina, G.R. No. 228719, 08 employment. Therefore, the burden of proof is not
Aug. 2022) with the Er but with the Ee. The basic rule is that
whoever alleges something must prove it.
Q: In the case above, petitioner employes two
tinderas. The SC affirmed that there was illegal Indeed, in illegal dismissal cases, the burden of
dismissal. Is the owner of the sari-sari store proof is on the Er in proving the validity of dismissal.
liable for the amount awarded? However, the fact of dismissal, if disputed, must be
duly proven by the complainant.
A: NO. A sari-sari store is a retail establishment
regulated by Barangay Micro Business Enterprises The rule is that one who alleges a fact has the burden
Act of 2002. Among the benefits granted by law to of proving it; thus, petitioners were burdened to
registered barangay micro business enterprises is prove their allegation that respondents dismissed
the exemption from the coverage of the Minimum them from their employment. It must be stressed
Wage Law. Considering a sarisari store's ubiquity that the evidence to prove this fact must be clear,
and the State's recognition of the informality of its positive, and convincing. The rule that the Er bears
operations, it is baffling why the NLRC and the CA the burden of proof in illegal dismissal cases finds
would treat petitioner's sarisari store as it would no application here because the respondents deny
2024 GOLDEN NOTES
having dismissed the petitioners. (Italkarat 18, Inc. the scheme employed by Aciee, Inc. to avoid their
v. Gerasmio, G.R. No. 221411, 28 Sept. 2020) legal obligations. It was shown that Aciee, Inc. and
Gecher Corp. are using their respective distinct
Actual Illegal Dismissal Cases corporate personalities in bad faith to frustrate and
render impossible the execution of the judgment
In actual illegal dismissal cases, the Er has the award in favor of Marion. Bad faith on the part of the
burden to really prove that there is just or corporations was demonstrated when motor
authorized cause or the Ee is validly terminated. vehicles registered under the name of Aciee, Inc.
were suddenly transferred to Gecher Corp. while its
NOTE: In actual illegal dismissal cases, there is appeal remained pending. (Eduardo Gilbert Dinoyo,
really termination done by the Er. Therefore, the v. Undaloc Construction Company, Inc., G.R. No.
burden of proof is on the Er to show that the 249638, 23 June 2021)
termination is legal and valid.
Legal Interest
Q: Marion filed a complaint for illegal dismissal
against Aciee, Inc. and were awarded a total of P4 It is now well-settled that generally, legal interest
million in backwages, money claims, moral and may be imposed upon any unpaid wages, salary
exemplary damages, and attorney's fees. Marion differential, merit increases, productivity bonuses,
filed a motion to treat Gecher Corporation one separation pay, back wages on other monetary
and the same with Aciee, Inc. because the said claims, and benefits awarded illegally dismissed
corporations are using their respective distinct employees. Its grant, however, remains
corporate personalities in bad faith to frustrate discretionary upon the courts. (Conrado A. Lim v.
and render impossible the execution of the HMR Philippines, G.R. No. 189871, 13 Aug. 2013)
judgment award in favor of Marion. Aciee, Inc.
allegedly transferred the motor vehicles
registered under the name of the former, to
E. RETIREMENT
Gecher Corp while its appeal remained pending. (Art. 302, LC)
The RTC has observed a pattern adopted by the
officers of Aciee, Inc. of creating run-away
companies every time their companies are Retirement
embroiled in labor cases to deliberately
circumvent the law, and evade their obligations
It is the withdrawal from office, public station,
to their Ees. Can the veil of corporate fiction be business, occupation, or public duty. (Brion v. South
pierced? Phil. Union Mission of the Seventh Day Adventist
Church, G.R. No. 135136, 19 May 1999)
A: YES. In the case of Guillermo v. Uson (G.R. No.
198967, 07 Mar. 2016), the Court stressed that the
It is the result of a bilateral act of the parties, a
veil of corporate fiction can be pierced, and
voluntary agreement between the Er and the Ee
responsible corporate directors and officers or even whereby the latter after reaching a certain age
a separate but related corporation, may be
agrees and/or consents to sever his employment
impleaded and held answerable solidarily in a labor
with the former. (Ariola v. Philex Mining Corp, G.R.
case, even after final judgment and on execution, so No. 147756, 09 Aug. 2005)
long as it is established that such persons have
deliberately used the corporate vehicle to unjustly
evade the judgment obligation, or have resorted to
fraud, bad faith or malice in doing so.
In this case, factual circumstances necessitate the

application of the doctrine of piercing the veil of
corporate fiction as there is evidence establishing
2024 GOLDEN NOTES
Persons Covered by Retirement Benefit The retirement pay payable under Art. 302, as
amended, is apart from the retirement benefit
All Ees in the private sector: claimable by the qualified Ee under the social
security law. This has to be so because R.A. No. 7641
1. Regardless of their position, designation or in its Sec. 2 states that, “Nothing in this Act shall
status; deprive any Ee of benefits to which he may be
entitled under existing law or company policies or
2. Irrespective of the method by which their wages practices.” (Azucena, 2016)
are paid (Sec. 1, Rule II, Book VI, IRR);
NOTE: A taxi driver paid according to the "boundary
3. Part-time Ees; system" is not entitled to the 13th month and the SIL
pay, hence, his retirement pay should be computed
4. Ees of service and other job contractors; on the sole basis of his salary. (R&E Transport, Inc. v.
Latag, G.R. No. 155214, 13 Feb. 2004)
5. Domestic helpers or persons in the personal
service of another (D.O. No. 20, s. 1994); Persons Not Covered by Retirement Benefits
6. Underground mine workers (RA 8558); and 1. Ees of the National Government and its political
subdivisions, including GOCCs (if they are
7. Ees of GOCCs organized under the Corporation covered by the Civil Service Law); and
Code (without original charters) (Postigo v.
Philippine Tubercolosis Society, Inc., G.R. No. 2. Ees of retail, service, and agricultural
155146, 24 Jan. 2006) establishments or operations employing not
more than ten (10) Ees. (Sec. 2, Rule II, Book VI,
Retirement Benefits Under the LC IRR)
The retirement benefit provided under the Labor Kinds of Retirement Schemes
Code is one-half (½) month pay for every year of
service which shall include: 1. Compulsory and contributory in nature;
1. 15 days salaries; 2. One set up by the agreement between the Er and

2. 1/12 of the 13th month pay; (30 days / 12 = 2.5 Ees in the CBA or other agreements between
days) and them (other applicable employment contract);
3. Cash equivalent of 5 days incentive leave. and
NOTE: All in all, 22.5 days for every year of service. 3. One that is voluntarily given by the Er, expressly
This will apply in the absence of any agreement in as announced company policy or impliedly as in
the CBA or employment contract providing for the failure to contest the Ee’s claim for
retirement benefits, or even if there is an agreement, retirement benefits. (Gerlach v. Reuters Limited
but such is inferior to those benefits under the Labor Phils., G.R. No. 148542, 17 Jan. 2005)
Code.
Retroactive application of Art. 302 of the LC (on
This is the minimum. The retirement pay package retirement) as amended by R.A. No. 7641
can be improved upon by voluntary company policy,
or particular agreement with the Ee, or through a Art. 302 of the LC, as amended by R.A. No. 7641 can
CBA. (Azucena, 2016) be applied retroactively, provided that:
A fraction of at least six (6) months shall be 1. The claimant for retirement benefits was still
considered as one whole year. (Art. 302, LC) the Ee of the Er at the time the statute took
effect; and
2024 GOLDEN NOTES
Retirement benefits are intended to help the Ee
2. The claimant was in compliance with the enjoy the remaining years of his life, lessening
requirements for eligibility under the statute the burden of worrying for his financial support,
for such retirement benefits. (PSVSIA v. NLRC, and are a form of reward for his loyalty and
G.R. No. 115019, 14 April 1997) service to the Er. (Aquino v. NLRC, G.R. No.
87653, 11 Feb. 1992)
Provisions of the Retirement Plan Binding as
Part of the Employment Contract Q: Riingen alleged that she joined Western Union
as Marketing Director in 2005. She retired from
The retirement plan forms part of the employment Western Union on 31 Aug. 2016. In June 2016,
contract since it is made known to the Ees and Riingen informally expressed her interest in
accepted by them, and such plan has an express availing of the early retirement package under
provision that the company has the choice to retire the Ees' Retirement Plan through an e-mail sent
an Ee regardless of age, with 20 years of service, said to Jocelyn Flordeliza, Western Union's Manager
policy is within the bounds contemplated by the LC. for Human Relations in the Philippines.
Moreover, the manner of computation of retirement According to such Plan, the Ees of Western Union
benefits depends on the stipulation provided in the are given the option to retire upon reaching the
company retirement plan. (Progressive Development age of 50 with at least 10 years of service.
Corporation v. NLRC, G.R. No. 138826, 30 Oct. 2000)
Flordeliza replied to Riingen's query and
Retirement Age forwarded a computation of the latter's
retirement benefits prepared by Laura
It is the age of retirement that is specified in the: Manganotti, Western Union's Senior Manager
for Compensation and Benefits. Flordeliza
1. CBA; confirmed that the retirement benefits of
2. Employment contract; Riingen is free from tax. Riingen formalized her
3. Retirement plan (Sec. 3, Rule II, Book VI, IRR); intent to retire by 31 Aug. 2016. Flordeliza sent
or to Riingen a revised computation of the latter's
4. Optional retirement age for underground retirement package reiterating that "As the age
mining Ees. [of Riingen] is not more than 50, the lump sum is
not taxable." However, Manganotti informed
Retirement Age in the Absence of a Retirement Riingen that her retirement benefits are not tax-
Plan or Other Applicable Agreement free. Manganotti explained that Western Union's
Retirement Plan does not match certain
1. Optional – Upon reaching 60 years old provided requirements that would grant the tax
that Ee has rendered five (5) years of service. exemption to qualified retirees.
The option to retire upon reaching the age of 60 On the day of her retirement, Western Union's
years or more but not beyond 65 is the exclusive external auditor informed Riingen that Western
prerogative of the Ee if there is no provision on Union failed to register its Ees' Retirement Plan
retirement in a CBA or any other agreement or in accordance with the requirements of the
if the Er has no retirement plan. (Capili v. NLRC, Bureau of Internal Revenue (BIR). Western
G.R. No. 117378, 26 March 1997) Union withheld from Riingen the amount of
P4,243,191.80 as tax liability. Riingen prayed
2. Compulsory – 65 years old, regardless of years that the amount withheld by Western Union
of service. (Sec. 4, Rule II, Book VI, IRR) corresponding to the tax should be returned to
her. In addition, she asked the LA to award moral
Retirement benefits not mandated by law may damages, exemplary damages, and attorney's
be granted by agreement of the Ees and their Er fees. For its part, Western Union countered that
or as a voluntary act on the part of the Er. Riingen's early retirement benefit is subject to
2024 GOLDEN NOTES
withholding tax in accordance with the retirement benefits since Cesario never applied
provisions of the National Internal Revenue for during lifetime. It asserted that even
Code since the Ees' Retirement Plan did not meet assuming Cesario was already qualified to apply
the requirements for tax exemption under for optional retirement three (3) years prior to
Revenue Regulations (RR) No. 1-68, as amended. his death, he never did. Is UDMC correct?
Should Western Union refund to Riingen the
amount of taxes withheld from her retirement A: NO. Under the law, retirement benefits are the
pay? property interests of the retiree and his or her
beneficiaries. The CBA does not prohibit the Ee’s
A: YES. According to Art. 1431 of the NCC, "through beneficiaries from claiming retirement benefits if
estoppel, an admission or representation is the retiree dies before the proceeds could be
rendered conclusive upon the person making it and released. Here, UDMC’s optional retirement plan is
cannot be denied or disproved as against the person premised on length of service, not upon reaching a
relying thereon." There are three kinds of estoppels, certain age. In any case, the CBA does not mandate
to wit: (1) estoppel in pais; (2) estoppel by deed; and that an application must first be filed by the Ee
(3) estoppel by laches. Under estoppel in pais, a before the right to the optional retirement benefits
person is considered in estoppel if by his conduct, may vest. Thus, this ambiguity should be resolved in
representations, admissions or silence when he favor of the retiree. Leonila, being the surviving
ought to speak out, whether intentionally or spouse, is entitled to claim the optional retirement
through culpable negligence, "causes another to benefits on his behalf. (UDMC v. Bernadas, G.R. No.
believe certain facts to exist and such other 209468, 13 Dec. 2017)
rightfully relies and acts on such belief, as a
consequence of which he would be prejudiced if the Five (5)-Year Service Requirement Only Applies
former is permitted to deny the existence of such in the Absence of a Retirement Plan
facts."
Being in a nature of “minimum requirement,” the
In this case, although Western Union, in the strict parties cannot stipulate a period higher than five (5)
sense, did not make any promise to Riingen and the years since this will run counter to the law. (Chan,
other Ees that the early retirement benefit under the 2014)
Ees' Retirement Plan is tax-free so as to fall under
the doctrine of promissory estoppel, nevertheless, The minimum length of service includes authorized
the conduct, representations, and silence of Western absences and vacations, regular holidays, and
Union and its responsible officers, before, during, mandatory fulfillment of a military or civic duty.
and subsequent to Riingen's application to avail of (Sec. 4.4, Rule II, Book VI, IRR)
the early retirement option under the Plan led her to
believe that the benefit she will receive under the Employee Must Have Met the Conditions of
Plan is free of tax. (Ringen v. Western Union Financial Eligibility as Condition Precedent
Services (Hong Kong) Limited, Philippines
Representative Office, G.R. No. 252716, 03 Mar. 2021) Although retirement plan forms part of the
employment contract, before a right to retirement
Q: Cesario started working as an orderly in benefits or pension vests in an Ee, he must have met
United Doctors Medical Center’s (UDMC) the stated conditions of eligibility with respect to
housekeeping department. UDMC and its rank- the nature of employment, age, and length of
and-file Ees had a CBA, under which, rank-and- service. This is a condition precedent to his
file Ees were entitled to optional retirement acquisition of rights thereunder. (Brion v. South Phil.
benefits. Leonila, representing her deceased Union Mission of the Seventh Day Adventist Church,
husband, filed a Complaint for payment of G.R. No. 135136, 19 May 1999)
retirement benefits against UDMC. However,
UDMC argued that Leonila does not have legal NOTE: SC ruled that the conditions of eligibility for
capacity to apply for Cesario’s optional retirement must be met at the time of retirement at
2024 GOLDEN NOTES
which juncture the right to retirement benefits or hand, do not necessarily exclude each other.
pension, if the Ee is eligible, vests in him. (Ibid.) (University of the East v. UE Faculty Association, G.R.
No. 74007, 31 July 1987)
Compulsory Retirement Age Below 60 Allowed
by Mutual Agreement NOTE: Company policy or CBA may make
Separation Pay and Retirement Benefit mutually
Art. 302 permits Er and Ee to fix the applicable exclusive. In the absence of a categorical provision
retirement age at below 60. The same is legal and in the Retirement Plan and the CBA that an
enforceable so long as the parties agree to be employee who receives separation pay is no longer
governed by such CBA. (Pantranco North Express v. entitled to retirement benefits, the employee is
NLRC, G.R. No. 95940, 24 July 1996) entitled to the payment of both benefits pursuant to
the social justice policy. (Aquino v. NLRC, G.R. No.
NOTE: For retirement at an earlier age to be valid, it 87653, 11 Feb. 1992)
must be shown that the Ee’s participation in the plan
is voluntary. (Jaculbe v. Siliman University, G.R. No. Q: After thirty (30) years of service, Beta
156934, 16 March 2007) Company compulsorily retired Albert at age 65
pursuant to the company’s Retirement Plan.
When Provisions on Retirement Under the LC Albert was duly paid his full retirement benefits
Cannot Be Applied of one (1) month pay for every year of service
under the Plan. Thereafter, out of compassion,
1. If there is a provision on retirement in the CBA, the company allowed Albert to continue working
or in the employment contract; and and paid him his old monthly salary rate, but
without the allowances that he used to enjoy.
2. Such provision on retirement benefits provides After five (5) years under this arrangement, the
for benefits at par or greater than the benefits company finally severed all employment
granted under the Labor Code. relations with Albert; he was declared fully
retired in a fitting ceremony but the company
Different Retirement Age for Mine Workers did not give him any further retirement benefits.
Under R.A. No. 8558 Albert thought this treatment unfair as he had
rendered full service at his usual hours in the
The optional retirement age of underground mine past five (5) years. Thus, he filed a complaint for
workers is 50 years of age, while the compulsory the allowances that were not paid to him, and for
retirement age is 60 years old. (Sec. 2, D.O. No. 167, s. retirement benefits for his additional five (5)
2016) working years, based either on the company’s
Retirement Plan or the Retirement Pay Law,
Rule for Extension of Service of Retiree Upon whichever is applicable.
Reaching the Compulsory Retirement Age
a) After Albert’s retirement at age 65,
Upon the compulsory retirement of an Ee or official should he be considered a regular Ee
in the public or private service, his employment is entitled to all his previous salaries and
deemed terminated. The matter of extension of benefits when the company allowed
service of such Ee or official is addressed to the him to continue working?
sound discretion of the Er. (UST Faculty Union v.
NLRC, G.R. No. 89885, 6 Aug. 1990) A: NO. He would be considered a contractual Ee,
not a regular Ee. His salaries and benefits will be in
Retirement Benefits Aside from Separation Pay accordance with the stipulations of the contract he
signed with the company.
Separation pay arising from forced termination on The present case is similar to a case decided by the
one hand, and benefits given as a contractual right Supreme Court in Rivera v. United Laboratories.
due to many years of faithful service, on the other (G.R. No. 155639, 22 Apr. 2009), where the Court
2024 GOLDEN NOTES
held that the company, in employing a retired Ee Funds Therefor and for Other Purposes. However,
whose knowledge, experience, and expertise the the Court disagrees.
company recognized, as an Ee or as a consultant, is
not an illegality; on the contrary, it is a recognized Sec. 1 of RA 9946 yields two instances of retirement
practice in this country. available to a magistrate — first, a compulsory
retirement at 70 years old; and second, an optional
b) Is he entitled to additional retirement retirement upon reaching 60 years of age. The
benefits for the additional service he following legal requisites must concur for the
rendered after age 65? (2013 BAR) optional retirement of a magistrate and the
consequent entitlement to the benefits under R.A.
A: NO. He cannot compulsorily retire twice in the No. 9946:
same company.
1. That the retiree be a magistrate, i.e., a Justice of
Q: Should retirement benefits, other gratuities, the Supreme Court, the Court of Appeals, the
and survivorship pension be accorded to Mrs. Sandiganbayan, or of the Court of Tax Appeals,
Corona as the spouse of the late Chief Justice or a judge of the trial courts, shari'a court, or of
Corona despite the latter's ouster by any other judicial court;
impeachment?
2. That the retiring magistrate has rendered at
A: YES. An impeached public officer whose civil, least 15 years of service in the judiciary, in any
criminal, or administrative liability was not other branch of the government, or in both;
judicially established may be considered
involuntarily retired from service and is entitled to 3. That the retiring magistrate be at least 60 years
the retirement benefits provided under R.A. Nos. of age at the time of retirement; and
9946 and 8291.
4. That the last 3 years of public service by the
Retirement is the termination of one's own retiring magistrate be continuously rendered in
employment or career, especially upon reaching a the Judiciary.
certain age or for health reasons. Retirement then
may be voluntary or involuntary. Retirement is The requirements are straightforward and have all
voluntary when one decides upon one's own been satisfactorily complied with by the late Chief
unilateral and independent volition to permanently Justice. (Re: Letter of Mrs. Ma. Cristina Roco Corona
cease the exercise of one's occupation. Retirement is Requesting the Grant of Retirement and Other
deemed involuntary when one's profession is Benefits to the Late Former Chief Justice Renato C.
terminated for reasons outside the control and Corona and her Claim For Survivorship Pension as his
discretion of the worker. Impeachment resulting in Wife Under Republic Act No. 9946, A.M. No. 20-07-10-
removal from holding office falls under the column SC, 21 Jan. 2021)
on involuntary retirement.
Retirement Coverage of Racehorse Jockeys
The Court deems Chief Justice Corona to have been
involuntarily retired from public service due to the ALL professional racehorse jockeys who are duly
peculiar circumstances surrounding his removal licensed by the Philippine Racing Commission
byimpeachment, without forfeiture of his (PHILRACOM) (Sec. 1, D.O. 169, s. 2017)
retirement benefits and other allowances.
Requirements
The OCA posits that the late Chief Justice failed to
qualify under R.A. No. 9946 or An Act Granting 1. Age - In the absence of a retirement plan or
Additional Retirement, Survivorship, and Other other applicable agreement providing for
Benefits to Members of the Judiciary, Amending for retirement benefits of racehorse jockeys, any
the Purpose R.A. No. 910, as Amended, Providing
2024 GOLDEN NOTES
such employee shall be compulsorily retired
upon reaching the age of 55 years;
2. Service - He/she has served for at least 5 years

as racehorse jockey; and
3. He/she has paid additional premiums to the

SSS. (Sec. 2.1, D.O. 169, s. 2017)
NOTE: The racehorse jockey shall be entitled to

receive such retirement benefits as he/she may have
earned under existing laws and any CBA and other
agreements.
Employee's retirement benefits under any CBA and

other agreement shall not be less than those
provided under this Rule.
If such benefits are less, the employer shall pay the

difference between the amount due the employer
under this Rule and that provided under the
collective bargaining agreement or other applicable
employment contract. (Sec. 3.1, D.O. 169, s. 2017)
2024 GOLDEN NOTES
see to it that its Ees are at least properly informed of
VIII. LABOR RELATIONS its decisions or modes of action especially if the
implementation of the provisions may result in the
deprivation of an Ee's means of livelihood which is a
property right. (PAL v. NLRC, G.R. No. 85985, 13 Aug.
1993)
A. RIGHT TO SELF-ORGANIZATION
The right of the people, including those employed in
the public and private sectors, to form unions,
Labor Relations associations, or societies for purposes not contrary
to law, shall not be abridged. (Sec. 8, Art. III, 1987
It refers to the interactions xbetween Er and Ees or Constitution)
their representatives and the mechanism by which
the standards and other terms and conditions of Declaration of Policy
employment are negotiated, adjusted, and enforced.
(Azucena, 2016) The State aims to promote:
The term denotes all aspects of Er-Ee relationship 1. Free collective bargaining and negotiations,
which involve concerted action on the part of the including voluntary arbitration, mediation, and
workers. It is usually associated with all the conciliation, as modes of settling labor or
ramifications of unionism, collective bargaining and industrial disputes;
negotiations, and concerted activities such as strike,
picket, mass leave, etc. (Poquiz, 2018) 2. Free trade unionism;
Constitutional Provisions in Relation to Labor 3. Free and voluntary organization of a strong and
Relations united labor movement;
Sec. 3, Art. XIII guarantees to all workers, among 4. Enlightenment of workers concerning their
others, their right to: rights and obligations as union members and as
Ees;
1. Self-organization
5. Adequate administrative machinery for the
2. Peaceful concerted activities including the right expeditious settlement of labor or industrial
to strike in accordance with law; and peace;
3. Participate in policy-decision making processes 6. Stable but dynamic and just industrial peace;
affecting their rights and benefits as may be
provided by law. 7. Participation of workers in decision and policy
making processes affecting their rights, duties,
Right to Participate in Policy and Decision- and welfare; and
Making Process Not Absolute
8. Truly democratic method of regulating the
A scrutiny of the policy must be made if the same is relations between the Ers and Ees by means of
purely business oriented and concerns the agreements freely entered into through
management aspect of the business of the company collective bargaining.
or if the policy has repercussions on the Ee's right to
security of tenure. A line must be drawn between
management prerogatives regarding business
operations per se and those which affect the rights
of the Ees. In treating the latter, management should
1. COVERAGE AND ELIGIBILITY FOR to exercise their right to self-organization and
MEMBERSHIP; EXCEPTIONS collective bargaining as guaranteed in the
(Arts. 253-255, LC; Secs. 1-2, Rule II, DOLE D.O. Constitution and existing laws.
No. 40-03)
9. Employees of legitimate contractors- not with
the principal’s but with the contractors (Chan,
Eligible to Join, Form or Assist a Labor
2019)
Organization in the Private Sector
XPNs:
1. All persons employed in commercial industrial
and agricultural enterprises
1. Top and middle level managerial employees;
and
2. Employees of government-owned and/or
2. Confidential employees (Chan, 2019)
controlled corporations without original
charters established under the Corporation
Eligible to Join, Form or Assist a Labor
Code
Organization in the Public Sector
3. Employees of religious, charitable, medical or

In the public sector, all rank – and – file employees
education institutions, whether operating for
of all branches, subdivisions, instrumentalities, and
profit or not
agencies of government, including government –
owned and/or controlled corporations with original
4. Fron-line managers, commonly known as
charters, can form, join or assist labor organizations
supervisory employees
called “employees’ organization” of their own
choosing. (Chan, 2019)
5. Alien employees
XPNs:
NOTE: For an alien employee to exercise his
right to self- organization, he should have
1. High level employees whose functions are
complied the following:
normal considered as policy making or
managerial or whose duties are of a highly
a. A valid working permit issued by DOLE
confidential naturel
2. Members of the Armed Forces of the Philippines
b. A national of a country which grants the
3. Police officers;
same or similar rights to Filipino workers
4. Policemen
5. Firemen; and
6. Working children
6. Jail guards. (Chan, 2019)
7. Homeworkers
2. DOCTRINE OF NECESSARY IMPLICATION
8. Members or Employees of cooperatives (CONFIDENTIAL EMPLOYEES)
NOTE: Members of a cooperative have no right The Doctrine of Necessary Implication states that
to form or join labor organization for purposes what is implied in a statute is as much a part thereof
of collective bargaining for being themselves co- as that which is expressed. While Art. 255 of the
owners of cooperative. This covers employees Labor Code singles out managerial Ees as ineligible
of the cooperative who are at the same time to join, assist and form any labor organization,
members thereof. under the doctrine of necessary implication,
confidential Ees are similarly disqualified. (NATU -
However, those who are not members or co- Republic Planters Bank Supervisors Chapter v. Hon.
owners thereof are concerned, they are entitled Torres, G.R. No. 93468, 29 Dec. 1994)
2024 GOLDEN NOTES
3. BARGAINING UNIT 8. Common supervision and determination of
(Sec. 1(e), Rule I, DOLE D.O. No. 40-03) labor-relations policy;
9. History of CB;
10. Desires of the affected Ees; or
The law does not mention any specific mode of
11. Extent of union organization. (Cox, Bok &
determining what constitutes a bargaining unit. The
Gorman, Labor Law, 1977)
basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally
NOTE: The fact that the three plants are located in
the combination which will best assure to all Ees the
three different places, namely, in Cabuyao, Laguna,
exercise of their collective bargaining rights.
in Otis, Pandacan, Metro Manila, and in San
(International School v. Quisumbing, G.R. No. 128845,
Fernando, Pampanga is immaterial. Geographical
1 June 2000)
location can be completely disregarded if the
communal or mutual interests of the Ees are not
Tests to Determine the Appropriate Bargaining
sacrificed. (Azucena, 2016)
Unit
Q: Samahang Tunay, a union of rank-and-file Ees,

1. Community or mutuality of interest
lost in a certification election at Solam Company
2. Will of the Ees or “Globe Doctrine”
and has become a minority union. The majority
3. Collective bargaining history
union now has a signed CBA with the company
4. Similarity of employment status
and the agreement contains Maintenance of
Membership Clause.
Commonality or Mutuality of Interest
What can Samahang Tunay still do within the

Under this doctrine, the Ees sought to be
company as a union considering that it still has
represented by the collective bargaining agent must
members who continue to profess continued
have community or mutuality of interest in terms of
loyalty to it? (2013 BAR)
employment and working conditions as evidenced
by the type of work they perform. This is
A: As a legitimate labor organization, it can continue
characterized by similarity of employment status,
to represent its members on non-CBA-related
same duties, and responsibilities and substantially
matters. (Art. 248, LC)
similar compensation and working conditions. (San
Miguel Corp. Ees Union-PTGWO v. Confesor, G.R. No.
Q: A registered labor union in UP, ONAPUP, filed
111262, 19 Sept. 1996)
a petition for certification election among the
non-academic Ees. The university did not
Factors Considered in Determining the
oppose, however, another labor union, the All UP
Substantial or Mutuality Interest Doctrine
Workers Union assents that it represents both
academic and non-academic personnel and
1. Similarity in the scale and manner of
seeks to unite all workers in one union. Do Ees
determining earnings;
performing academic functions need to
2. Similarity in employment benefits, hours of
comprise a bargaining unit distinct from that of
work, and other terms and conditions of
the non-academic Ees?
employment;
3. Similarity in the kinds of work performed;
A: YES. The mutuality of interest test should be
4. Similarity in the qualifications, skills, and
taken into consideration. There are two classes of
training of Ees;
rank-and-file Ees in the university – those who
5. Frequency of contract or interchange among the
perform academic functions such as the professors
Ees;
and instructors, and those whose function are non-
6. Geographical proximity;
academic who are the janitors, messengers, clerks
7. Continuity and integration of production
etc. Thus, not much reflection is needed to perceive
processes;
that the mutuality of interest which justifies the
2024 GOLDEN NOTES
formation of a single bargaining unit is lacking NOTE: The policy should yield to the right of Ees to
between the two classes of Ees. (U.P. v. Ferrer-Calleja, form a union for purposes not contrary to law, self-
G.R. No.96189, 14 July 1992) organization, and to enter into CB negotiations.
Will of the Employees or “Globe Doctrine” Two (2) corporations cannot be treated as a single
bargaining unit, even if their businesses are related.
This principle is based on the desires of the Ees. In (Indophil Textile Mill Workers Union v. VA Calica, G.R.
defining the appropriate bargaining unit, the No. 96490, 03 Feb. 1992)
determining factor is the desire of the workers
themselves. While the desires of Ees with respect to NOTE: The proliferation of unions in an Er unit is
their inclusion in bargaining unit is not controlling, merely discouraged as a matter of policy. However,
it is a factor which would be taken into if there are compelling reasons which would deny a
consideration in reaching a decision. (Globe Machine certain class of Ees the right to self-organization for
& Stamping Co., 3 NLRB 294, 1937) purposes of collective bargaining, then it would be
allowed.
“One-company, One-union” Policy
In Case Of Two (2) Companies With Related
It is the policy of the BLR to encourage the formation Businesses Not Necessarily Treated as a Single
of an Er unit. In other words, one Er enterprise BU
should constitute only one bargaining unit because
the more solid the Ees are, the stronger their It is erroneous to treat two companies as a single
bargaining capacity. bargaining unit when these companies are
indubitably distinct entities with separate juridical
GR: All the rank-and-file Ees with substantially the personalities.
same interests and who invoke the right to self-
organization are part of a single unit so that they can Subsidiaries and Spin-off Corporations
deal with their Er with just one and potent voice.
The Ees’ bargaining power is strengthened thereby. Subsidiaries or corporations formed out of former
(General Rubber and Footwear Corporation v. BLR, divisions of a mother company following a re-
G.R. No. 74262, 29 Oct. 1987) organization may constitute a separate bargaining
unit.
XPNs:
NOTE: In determining an appropriate bargaining
1. Supervisory Ees – allowed to form their own unit, the test of grouping is mutuality or
unions apart from the rank-and-file Ees; commonality of interests. Considering the spin-offs,
the companies would have their respective and
2. Craft Unit – bargaining unit composed of Ees of distinctive concerns in terms of the nature of work,
the company with the same occupation, such as wages, hours of work, and other conditions of
pilots as distinguished from ground personnel; employment. Interests of Ees in the different
companies per force differ. (San Miguel Corp. Union
3. Plant Unit – bargaining unit composed of Ees in v. San Miguel Corp., Magnolia Corp., G.R. No. 111262,
a particular plant of the company, such as the 19 Sept. 1996)
company’s Cebu plant as distinguished from its
Ilocos plant.
The main consideration in a plant unit is

geographical, while it is occupational in a craft unit.
(Alcantara, 2008)
2024 GOLDEN NOTES
The Four-Factor Analysis seeking recognition as the rank-and-file
bargaining agent, filed a petition for the
The US National Labor Relations Board continues to cancellation of the registration of rank-and-file
apply a four-factor analysis in determining whether Ees labor union on the ground that A and her
two or more Ers constitute a single Er: colleagues have remained to be members of
rank-and-file Ees labor union. Is the petition
1. Interrelations of operation; meritorious? Explain. (2010 BAR)
2. Centralized control of labor relations;
3. Common management; and A: NO. The inclusion as union members of Ees
4. Common ownership (Azucena, 2016) outside the bargaining unit shall not be a ground for
the cancellation of the registration of the union. Said
Importance of Distinguishing the CBU from the Ees are automatically deemed removed from the list
Union of membership of said union.
1. In a CE, the voters are the whole bargaining unit, There are only three grounds for the cancellation of
whether union or non-union members; union registration: (R-E-V)
2. In CBA ratification, the voters are the whole 1. Misrepresentation, false statement, or fraud in
bargaining unit, not just the union members; connection with the adoption or Ratification of
the constitution and by-laws or amendments
3. In strike voting, the voters are the members of thereto, the minutes of ratification, and the list
the union, not the whole bargaining unit. of members who took part in the ratification;
(Azucena, 2016)
2. Misrepresentation, false statements, or fraud in
Grounds for Cancellation of Union Registration connection with the Election of officers,
(R-E-V) minutes of the election of officers, and the list of
voters;
1. Misrepresentation, false statement, or fraud in
connection with the adoption or Ratification of 3. Voluntary dissolution by the members. (Art.
the constitution and by-laws or amendments 247, LC)
thereto, the minutes of ratification, and the list
of members who took part in the ratification; Collective Bargaining History Doctrine
2. Misrepresentation, false statements, or fraud in This principle puts premium to the prior collective
connection with the Election of officers, bargaining history and affinity of the Ees in
minutes of the election of officers, and the list of determining the appropriate bargaining unit.
voters; However, the existence of a prior collective
bargaining history has been held as neither decisive
3. Voluntary dissolution by the members. (Art. nor conclusive in determination of what constitutes
247, LC) an appropriate bargaining.
Q: Company XYZ has two recognized labor Bargaining History Not a Decisive Factor in the
unions, one for its rank-and-file Ees and the Determination of Appropriateness of Bargaining
other for its supervisory Ees. Of late, the Unit
company instituted a restructuring program by
virtue of which A, a rank-and-file Ee and officer While the existence of a bargaining history is a factor
of rank-and-file Ees’ labor union, was promoted that may be reckoned with in determining the
to a supervisory position along with four other appropriate bargaining unit, the same is not decisive
colleagues, also active union members and/or or conclusive. Other factors must be considered. The
officers. Labor Union KMJ, a rival labor union test of grouping is community or mutuality of
2024 GOLDEN NOTES
interests. This is because the basic test of an Q: A registered labor union in UP, ONAPUP, filed
asserted bargaining unit’s acceptability is whether a petition for certification election among the
or not it is fundamentally the combination which non-academic Ees. The university did not
will best assure to all Ees the exercise of their CB oppose, however, another labor union, the All UP
rights. (Democratic Labor Association v. Cebu Workers Union assents that it represents both
Stevedoring Company, Inc., G.R. No. L-10321, 28 Feb. academic and non-academic personnel and
1958) seeks to unite all workers in one union. Do Ees
performing academic functions need to
Employment Status Doctrine comprise a bargaining unit distinct from that of
the non-academic Ees?
The determination of the appropriate bargaining
unit based on the employment status of the Ees is A: YES. The mutuality of interest test should be
considered as an acceptable mode. (Chan, 2019) taken into consideration. There are two classes of
rank-and-file Ees in the university – those who
a. COMMINGLING OR MIXED MEMBERSHIP perform academic functions such as the professors
and instructors, and those whose function are non-
The Separation of Union Doctrine prohibits a academic who are the janitors, messengers, clerks
situation where the supervisory union and the rank- etc. Thus, not much reflection is needed to perceive
and-file union operating within the same that the mutuality of interest which justifies the
establishment are both affiliated with one and the formation of a single bargaining unit is lacking
same federation or national union. This is because between the two classes of Ees. (U.P. v. Ferrer-Calleja,
of the possible conflict of interest which may arise G.R. No.96189, 14 July 1992)
between the supervisors and rank-and-file Ees, in
the areas of collective bargaining and strike. (Atlas Q: Union filed a petition for certification election
Lithographic Services, Inc. v. Hon. Laguesma, G.R. No. among the rank-and-file Ees of three security
96566, 06 Jan. 1992) However, with the agencies including the Veterans Security. The
amendement of Art. 255 by R.A. No. 9481, the law latter opposed alleging that the three security
now allows a rank-and-file union and a supervisory agencies have separate and distinct corporate
union to operate within the same bargaining unit to personalities. May a single petition for
join the one and the same federation or national certification election be filed by a labor union in
union. the three corporations instead of filing three
separate petitions?
Unions formed independently by the supervisory
and rank-and-file Ees in a company may legally A: YES. The following are indications that the three
affiliate with the same federation. The fact that the agencies do not exist and operate separately and
two (2) groups of workers are employed by the distinctly from each other with different corporate
same company and are affiliated with one and the direction and goals:
same federation is not sufficient to justify the
conclusion that they are one. (Adamson & Adamson, 1. Veterans Security failed to rebut the fact that
Inc. v. CIR, G.R. No. L-35120, 31 Jan. 1984) they are managed through the Utilities
Management Corporation with all their Ees
The law does not mention any specific mode of drawing their salaries and wages from the said
determining what constitutes a bargaining unit. The entity;
basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally 2. The agencies have common and interlocking
the combination which will best assure to all Ees the incorporators and officers;
exercise of their collective bargaining rights.
(International School v. Quisumbing, G.R. No. 128845, 3. They have a single mutual benefit system and
1 June 2000) followed a single system of compulsory
retirement;
2024 GOLDEN NOTES
self-organization. Such right shall include the right
4. They could easily transfer security guards of to form, join, or assist labor organizations for the
one agency to another and back again by simply purpose of collective bargaining through
filling-up a common pro-forma slip; representatives of their own choosing and to engage
in lawful concerted activities for the same purpose
5. They always hold joint yearly ceremonies such or for their mutual aid and protection, subject to the
as the PGA Annual Awards Ceremony; and provisions of Art. 264 of the Labor Code. (Art. 257,
LC)
6. They continue to be represented by one
counsel. An Ee cannot invoke an absolute right to union
membership. The right to self-organization and
Hence, the veil of corporate fiction of the three collective bargaining comprehends at least two
agencies should be lifted for the purpose of allowing broad notions, namely:
the Ees of the three agencies to form single union. 1. Liberty or freedom - i.e., the absence of legal
As a single bargaining unit, the Ees need not file restraint, whereby an Ee may act for himself
three separate PCE. (Philippine Scout Veterans without being prevented by law; and
Security and Investigation Agency v. SOLE, G.R. No.
92357, 21 July 1993) 2. Power - whereby an Ee may, as he pleases, join
or refrain from joining an association.
b. INCLUSION AS MEMBERS OF EMPLOYEES
OUTSIDE THE BARGAINING UNIT It is, therefore, the Ee who should decide for himself
(Art. 256, LC) whether or not he should join an association; and
should he choose to join, he himself makes up his
The inclusion as union members of Ees outside the mind as to which association he would join; and
bargaining unit shall not be a ground for the even after he has joined, he still retains the liberty
cancellation of the registration of the union. Said Ees and the power to leave and cancel his membership
are automatically deemed removed from the list of with said organization at any time. (Victoriano v.
membership of said union. (Art. 256, LC) Elizalde Rope Worker’s Union, G.R. No. L-25246, 12
Sept. 1974)
Under this provision, the inclusion as union
members of Ees outside the bargaining unit is not a Right to Union Membership Not Absolute
ground for the cancellation of the registration of the
union. The Ees improperly included are An Ee cannot invoke an absolute right to union
automatically deemed removed from the list of membership. Though granted by the Constitution, it
members of said union by operation of law. is subject to regulation by the State. An example of
Therefore, if supervisory Ees are included as this is it has been mandated by law that no labor
members of a rank-and-file union, they are deemed organization shall knowingly admit as member or
automatically removed from the roster of members continue in membership, any individual who
of the said union and vice versa. (Chan, 2019) belongs to a subversive organization or who is
engaged directly or indirectly in any subversive
NOTE: Mixed membership is now deemed a activity.
prohibited ground for cancellation of union
registration. (Sec. 6, Rule XIV, Book V, IRR) Freedom of Choice
Non-Interference with Workers’ Right to Self- An Ee has the right to join or not join a labor union.
Organization As such, a member of a labor union may leave and
cancel his membership at any time.
It shall be unlawful for any person to restrain,
coerce, discriminate against, or unduly interfere However, this is not the case where there is a valid
with Ees and workers in their exercise of the right to union security clause in the CBA such as a closed-
2024 GOLDEN NOTES
shop or union-shop arrangement between organization upon issuance of the certificate of
management and the union. Here, the Ee concerned registration (Art. 240, LC)
is duty-bound to keep his union membership for the
duration of the CBA as a condition for his continued Requirements for the Issuance of the Certificate
employment. If such membership in the union of Independent Registration of Labor
which is the collective bargaining agent is validly Organizations
terminated, he may likewise be dismissed from his
employment. The only exception to this is when the 1. Fifty pesos (50.00) registration fee;
Ee objects to such membership on the ground of
religious belief. 2. The names of its officers their addresses, the
principal address of the labor organization, the
Right to Join a Union Acquired from First Day of minutes of the organizational meetings and the
Employment list of the workers who participated in such
meetings;
Any Ee, whether employed for a definite period or
not shall, beginning on his first day of service, be 3. In case the applicant is an independent union,
considered an Ee for purposes of membership in any the names of all its members, comprising at
labor union. (Art. 292(c), LC) least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate;
Union Members Who are Not Employees Do Not
Possess the Right to Join Union 4. If the applicant union has been in existence of
one or more years, copies of its annual financial
If the union members are not Ees, no right to reports; and
organize for purposes of collective bargaining, nor
to be certified as bargaining agent can be 5. Four copies of the constitution and by law of the
recognized. The question of whether Er-Ee applicant union, minutes of its adoption or
relationship exists is a primordial consideration ratification, and the list of the members who
before extending labor benefits under the participated in it. (Art. 240, LC)
workmen’s compensation, social security,
PhilHealth, termination pay, and labor relations law. NOTE: Trade union center may register as a
Failure to establish this juridical relationship legitimate labor organization but Art. 241 of the LC
between the union members and the Er affects the does not allow chartering of a local
legality of the union itself. It means the ineligibility chapter/chartered local.
of the union members to present a petition for
certification election as well as to vote therein. An independent labor organization, federation,
(Singer Sewing Machine Company v. Drilon, G.R. No. national union, industry union and trade union
91307, 24 Jan. 1991) center acquires full legal personality upon issuance
of a Certificate of Registration by the BLR (Chan,
2019)
4. REGISTRATION OF UNIONS, CHARTERING,
CANCELLATION OF REGISTRATION
Chartering of Local Chapter/Chartered Local
(Arts. 240, 241, 245 and 247, LC)
A duly registered federation or national union may

Independent Registration directly create a local chapter by issuing a charter
certificate indicating the establishment of the local
A federation, national union or industry or trade chapter. The chapter shall acquire legal personality
union center or an independent union shall acquire
only for purposes of filing a petition for certification
legal personality and shall be entitled to the rights
election from the date it was issued a charter
and privileges granted by law to legitimate labor certificate. (Art. 241, LC)
2024 GOLDEN NOTES
NOTE: It will acquire legal personality only for Grounds for Cancellation of Union Registration
purposes of filing a petition for certification election (R-E-V)
XPNs: 1. Misrepresentation, false statement, or fraud in

connection with the adoption or Ratification of
The chapter shall be entitled to all other rights and the constitution and by-laws or amendments
privileges of a legitimate labor organization only thereto, the minutes of ratification, and the list
upon the submission of the following documents in of members who took part in the ratification;
addition to its charter certificates:
2. Misrepresentation, false statements, or fraud in
1. The names of the chapter’s officers, their connection with the Election of officers,
addresses, and the principal office of the minutes of the election of officers, and the list of
chapter; and voters;
2. The chapter’s constitution and by-laws: 3. Voluntary dissolution by the members. (Art.
Provided, that where the chapter’s constitution 247, LC)
and by-laws are the same as that of the
federation or the national union, this fact shall Bargaining History Not a Decisive Factor in the
be indicated accordingly. determination of Appropriateness of Bargaining
Unit
The additional supporting requirements shall
be certified under oath by the secretary or While the existence of a bargaining history is a factor
treasurer of the chapter and attested by its that may be reckoned with in determining the
president (Art. 241, LC) appropriate bargaining unit, the same is not decisive
or conclusive. Other factors must be considered. The
NOTE: Local chapter or chartered local acquires test of grouping is community or mutuality of
personality in two (2) stages: interests. This is because the basic test of an
asserted bargaining unit’s acceptability is whether
a. First stage – Partial legal personality or not it is fundamentally the combination which
which it acquires upon the issuance to it of will best assure to all Ees the exercise of their CB
a Charter Certificate by a federation or rights. (Democratic Labor Association v. Cebu
national union Stevedoring Company, Inc., G.R. No. L-10321, 28 Feb.
1958)
b. Second stage – Full legal personality
which is accorded to a local
5. SOLE AND EXCLUSIVE BARGAINING AGENT
chapter/chartered local only upon
(SEBA) (Sec. 1(u), Rule I, DOLE D.O. No. 40-03);
submission to the DOLE of its Charter
MODES TO ACQUIRE STATUS (DOLE D.O. No. 40-
Certificate and the documents mentioned
I-15)
in Art. 241 of the LC.
No independent registration is required for Organized Establishment

it to acquire legal personality. Hence, no
similar Certificate of Registration is issued. It is an enterprise where there exists a recognized or
The subsequent issuance of the Certificate certified sole and exclusive bargaining agent.
of Creation of Chartered Local by the DOLE
is not material to its acquisition of legal Unorganized establishment
personality but the submission of the
It is an enterprise where no union has yet been duly
documents mentioned in Article 241 (Chan,
2019) recognized or certified as bargaining representative.
2024 GOLDEN NOTES
Bargaining Representative of the Employees for 3. The CBU majority are members of the union.
Purposes of Collective Bargaining
Documentary Requirements
The labor organization designated or selected by the
majority of the Ees in an appropriate collective The Request should indicate:
bargaining unit shall be the exclusive representative 1. The name and address of the requesting
of the Ees in such unit for the purpose of CB. legitimate labor organization;
However, an individual Ee or group of Ees shall have
the right at any time to present grievances to their 2. The name and address of the company where it
Er. (Art. 267, LC) operates;
Methods of Determining the Exclusive 3. The bargaining unit sought to be represented;

Bargaining Representative
4. The approximate number of the Ees in the
1. Sole and Exclusive Bargaining Agent (SEBA) bargaining unit; and
Certification;
2. Certification Election; and 5. The statement of the existence/non-existence
3. Consent Election. of other labor organization/CBA.
a. SEBA CERTIFICATION Where to File the Request

(Sec. 1, Rule I, DOLE D.O. No. 40-03, as amended
by DOLE D.O. No. 40-J-22) Any legitimate labor organization may file a Request
in the DOLE Regional Office which issued its
This is a new mode of determining sole and certificate for registration or certificate of creation
exclusive bargaining agent provided for under D.O. of chartered local, as the case may be.
No. 40-I-15, s. 2015 which has expressly repealed the
entire set of Rules applicable to Voluntary Action on the Request
Recognition in the IRR on Book V of the LC. (Chan,
2017) Within one (1) day from the submission of the
Request, the DOLE Regional Director should:
It is a process where a union requests the DOLE
Regional Director to recognize and certify the union 1. Determine whether the request is compliant
as the Sole and Exclusive Bargaining Agent (SEBA) with the documentary requirements and
of the Barganing Unit (BU) it purports to represent whether the bargaining unit sought to be
for purposes of collective bargaining with the Er. represented is organized or not; and
Rationale for the Repeal 2. Request a copy of the payroll for purposes of
SEBA certification.
By allowing the Er to extend “voluntary recognition”
to a union, it is no longer the Ees but the Er who If the DOLE Regional Director finds the Request
determines and designates the SEBA when it is deficient, he should advise the requesting union or
supposed to be just a mere “by-stander” in such local to comply within 10 days from notice. Non-
determination and designation process. (Chan, compliance shall be deemed withdrawal of the
2017) request. (Sec. 3, D.O. 40-1-15)
Conditions
1. The bargaining unit is not unionized;

2. The requesting union is the only union in that
bargaining unit; and
2024 GOLDEN NOTES
Scenarios Contemplated by the Rules on Request for a period of one (1) year from the date of
for Sole and Exclusive Bargaining Agent issuance.
Certification
Unorganized – More Than One Legitimate Labor
1. Request certification in unorganized Organization
establishment with only one legitimate union.
If the DOLE Regional Director finds that the
2. Request for certification in unorganized establishment unorganized with more than one
establishment with more than one legitimate legitimate labor organization, he should refer the
labor organization same to the Election Officer for the conduct of
certification election. (Sec. 3, D.O. No. 40-1-15)
3. Request for certification in organized
establishment Organized
Unorganized – Only One Legitimate Union If the DOLE Regional Director finds that the
establishment organized, he should refer the same
The DOLE Regional Director shall call a conference to the Mediator-Arbiter for the determination of the
within 5 working days for the submission of the propriety of conducting a certification election.
following:
Effect if Request is Denied
1. The names of Ees in the covered bargaining unit
who signify their support for the SEBA It may be referred to an election officer for the
certification, provided that said Ees comprise at conduct of a certification election.
least majority of the number of Ees in the
covered bargaining unit; and Effect if Request is Granted
2. Certification under oath by the President that Then the certified union shall enjoy the rights and
all documents submitted are true and correct privileges of an EBA for the BU.
based on his/her personal knowledge.
b. CERTIFICATION AND CONSENT ELECTION
If the requesting union or local fails to complete the (Rules VII and VIII, DOLE D.O. No. 40-03, as
requirements for the SEBA certification during the amended)
conference, the Request should be referred to the
Election Officer for the conduct of certification Certification Election
election.
It is the process of determining through secret ballot
If the DOLE Regional Director finds that the the sole and exclusive representative of the Ees in an
requirements are complete, he shall issue, during appropriate bargaining unit, for purposes of
the conference, a Certification as SEBA. collective bargaining or negotiation. (Sec. 1(h), Rule
I, Book V, IRR)
Effect of the Issuance of the Certification as SEBA
NOTE: The process is called certification election
1. The certified union shall enjoy all the rights and because it serves as the official, reliable, and
privileges of an exclusive bargaining agent of all democratic basis for the BLR to determine and
the Ees in the covered bargaining unit. certify the union that shall be the exclusive
bargaining representative of the Ees for the purpose
2. Certification Bar Rule – The issuance of the of bargaining with the Er.
SEBA Certification as SEBA bars the filing of a
petition for election by any labor organization
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Nature of Certification Election
NOTE: The Court has repeatedly stressed that the
A CE is not a litigation but merely an investigation of holding of a certification election is based on a
a non-adversarial fact-finding character in which statutory policy that cannot be circumvented. The
BLR plays a part of a disinterested investigator workers must be allowed to freely express their
seeking merely to ascertain the desire of the Ees as choice in a determination where everything is open
to the matter of their representation. (Airline Pilots to their sound judgment and the possibility of fraud
Association of the Philippines v. CIR, G.R. No. L-33705, and misrepresentation is eliminated. (Progressive
15 Apr. 1977) Development Corporation v. SOLE, G.R No. 96425, 4
Feb. 1992)
Certification proceedings directly involve only two
issues: Filing a Petition for Certification Election (PCE)
1. Proper composition and constituency of the The following may file a PCE:
bargaining unit; and
1. Any LLO;
2. Veracity of majority membership claims of the
competing unions so as to identify the one 2. A National Union or Federation which has
union that will serve as the bargaining already issued a charter certificate to its local
representative of the entire bargaining unit. chapter participating in the CE;
(Azucena, 2016)
3. A local chapter which has been issued a charter
Purpose of a Certification Election certificate; or
It is a means of determining the worker’s choice of: 4. An Er only when requested to bargain
collectively in a bargaining unit where no
1. Whether they want a union to represent them registered CBA exists. (Sec. 1, Rule VIII, Book V,
for CB or if they want no union to represent IRR)
them at all.
NOTE: A national union or federation filing a
2. And if they choose to have a union to represent petition in behalf of its local/chapter shall not be
them, they will choose which among the required to disclose the names of the local/chapter’s
contending unions will be the sole and exclusive officers and members, but shall attach to the
bargaining representative of the Ees in the petition the charter certificate it issued to its
appropriate bargaining unit. local/chapter. (Sec. 1, Rule VIII, Book V, IRR as
amended by D.O. 40-F-03)
Q: There are instances when a certification
election is mandatory. What is the rationale for 20% Membership Requirement May Not Be
such a legal mandate? Complied With in Registration of Federation or
National Union
A: According to the LC, in any establishment where
there is no certified bargaining agent, a certification The registration requirement of submitting the
election shall automatically be conducted by the names of all its members comprising at least 20% of
Med-Arbiter upon the filing of a petition by a all the Ees in the bargaining unit where it seeks to
legitimate labor organization. In the above- operate is applicable only to registration of
described situation, a certification election is made independent union. LC merely requires for proof of
mandatory because if there is no certified affiliation of at least 10 local chapters and the names
bargaining agent as determined by a certification and addresses of the companies where they operate.
election, there could be no collective bargaining in No 20% membership requirement is required for
the said unorganized establishment. (Art. 269, LC) registration of a federation or national union.
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If there is a CBA, the petition may only be filed
NOTE: Under the LC and the Rules, the power within the “freedom period” of the representational
granted to labor organizations to directly create a aspect of the CBA.
chapter or local through chartering is given to a
federation or national union only, not to a trade NOTE: Freedom period refers to the last 60 days
union center. (SMCEU v. San Miguel Packaging immediately preceding the expiration of CBA.
Products Ees Union, G.R. No. 171153, 12 Sept. 2007) (Tanduay Distillery Labor Union v. NLRC, G.R. No.
75037, 30 Apr. 1987)
If the petition for certification election was filed by
the federation which is merely an agent, the petition Q: In what instance may a petition for
is deemed to be filed by the chapter, the principal certification election be filed outside the
which must be a legitimate labor organization. The freedom period of a current collective bargaining
chapter cannot merely rely on the legitimate status agreement? (1997 BAR)
of the mother union.
A: As a general rule, in an establishment where there
Equity of the Incumbent is a CBA in force and effect, a PCE may be filed only
during the freedom period of such CBA, but to have
The incumbent bargaining agent shall automatically that effect, the CBA should have been filed and
be one of the choices in the certification election as registered with the DOLE. (Arts. 237, 265, and 268,
forced intervenor. (Rule VIII, Sec. 8, DO 40-03) LC)
The incumbent bargaining agent will not file a PCE Thus, a CBA that has not been filed and registered
because it will not contest its own status as the with the DOLE cannot be a bar to a CE and such
bargaining representative. election can be held outside the freedom period of
such CBA.
It does not lose its representative status; it remains
the sole bargaining representative until it is Where to File the PCE
replaced by another. Until so replaced, it has the
right to retain the recognition by the Er. A petition for certification election shall be filed
with the Regional Office which issued the
No Union as a Choice petitioning union’s certificate of registration or
certificate of creation of chartered local.
The right to join a union includes the right not to
join. (Victoriano v. Elizalde Rope Workers Union, G.R. The petition shall be heard and resolved by the Med-
L-25246, 12 Sept. 1974) In view of this, the “no Arbiter.
union” choice should always be included in the
certification election. If the “no union” option wins, NOTE: The filing or pendency of any inter/intra-
the statutory bar rule shall apply. Thus, there will be union dispute and other related labor relations
no SEBA and no new PCE can be filed within one (1) dispute is not a prejudicial question to any petition
year from the conduct of certification elections. for certification election and shall not be a ground
for the dismissal of a petition for certification
Time to File PCE election or suspension of proceedings of
certification election. (Sec. 2, Rule XI of D.O. 40-03)
It would depend if the Bargaining Unit has a CBA or
none.
If there is none, the petition may be filed anytime

except within the 12 months of a previous election,
if any.
2024 GOLDEN NOTES
Med-Arbiter’s Action on the Petition Requisites For Certification Election in an
Organized Establishment
Hold a Preliminary Conference:
The Mediator-Arbiter is required to automatically
1. To determine whether the PCE should be order the conduct of a CE by secret ballot in an
processed or dismissed; organized establishment as soon as the following
requisites are met:
2. To determine the BU that will participate in the
election and the identity of the contending 1. A petition questioning the majority status of the
unions; and incumbent bargaining agent is filed before the
DOLE within the 60-day freedom period;
3. To determine the possibility of holding a
“consent election.” 2. Such petition is verified; and
a. If the unions agree, the PCE will no longer 3. The petition is supported by the written
be heard and the unions will instead consent of at least 25% of all the Ees in the
prepare for the consent election. (There is bargaining unit. (Art. 268, LC; TUPAS-WFTU v.
implied waver of the bars) Laguesma, G.R. No. 102350, 30 June 1994)
b. If the unions fail to agree, hearings would Filing of 25% Consent Signatures in the Petition
be conducted. for Certification Election
Conduct of Hearings Ideally, the signature should be filed together with

the petition. However, it may be filed after the
After the last hearing, the Med-Arbiter shall issue a petition within a reasonable period of time.
formal order denying or granting the petition.
Effect if the Petition for Certification Election
Requisites For Certification Election in an was Not Accompanied by the Requisite 25%
Unorganized Establishment Consent Signatures
An unorganized establishment is a bargaining unit Under the Implementing Rules, absence or failure to
with no recognized or certified bargaining agent. It submit the written consent of at least 25% of all the
does not necessarily refer to an entire company. Ees in the bargaining unit to support the petition is
a ground for denying the said petition.
NOTE: It may happen that the rank-and-file unit has
a bargaining agent while the supervisory unit still Notwithstanding the provision of the IRR that
does not have such agent; thus, the former is already failure to submit the required 25% consent
an “organized establishment” while the latter signatures is a ground for the denial of the petition,
remains, in the same company, an unorganized the Supreme Court ruled that, it is within the
establishment. discretion of the Med-Arbiter whether to grant or
deny the petition despite absence of the required
The certification election shall be automatically 25% written consent. (Port Workers Union v.
conducted upon the filing of a PCE by a LLO. Bienvenido Laguesma, G.R. Nos. 94929-30, 18 Mar.
1992)
If the petition, however, is accompanied by the 25%

consent signatures, then the holding of the CE
becomes mandatory. (California Manufacturing
Corp. v. Laguesma, G.R. No. 97020, 8 June 1992)
2024 GOLDEN NOTES
Consent Signatures of at Least 25% of the
Employees in the Bargaining Unit May Not Be c. BARS TO HOLDING OF CERTIFICATION
Submitted Simultaneously with the Filing of the ELECTION
Petition for Certification Election (Sec. 14, Rule VIII and Sec. 7, Rule XVII, , DOLE
D.O. No. 40-03, as amended; Sec. 14(e), Rule III,
The administrative rule requiring the simultaneous Book V, Omnibus Rules Implementing the Labor
submission of the 25% consent signatures upon the Code)
filing of PCE should not be strictly applied to
frustrate the determination of the legitimate No certification election may be held under the
representative of the workers. Accordingly, the following rules:
Court held that the mere filing of a PCE within the
freedom period is sufficient basis for the issuance of 1. Certification year bar rule;
an order for the holding of a CE, subject to the 2. Negotiations bar rule;
submission of the consent signatures within a 3. Bargaining deadlock bar rule; or
reasonable period from such filing. (Port Workers 4. Contract bar rule.
Union of the Phils. v. Laguesma, G.R. Nos. 94929-30,
18 Mar. 1992) Certification Year Bar Rule
Duty of Fair Representation Under this rule, a petition for certification election
may not be filed within one (1) year from the date a
The winning union in the certification election valid certification, consent, run-off, or re-run
becomes the EBA of all the workers in the BU and election has been conducted within the bargaining
shall represent even the members of the minority unit. This is also called as the 12-month Bar rule.
union. The same ban applies if “No Union” won in the
previous election.
Consent Election
NOTE: In case of failure of elections, a re-run
It is an election that is voluntarily agreed upon by election will be held within six (6) months. Also,
the parties with or without the intervention of DOLE when the election held is invalid.
for the purpose of determining the EBA.
XPN: When there is a failure of election, when the
Certification Election vs. Consent Election number of votes cast in a certification or consent
election is less than the majority of the number of
CERTIFICATION CONSENT eligible votes and there is no material challenged
ELECTION ELECTION votes.
Voluntarily agreed
upon by the parties Failure of election does not bar the holding of
Ordered by DOLE
with or without the another certification or consent election within six
intervention of DOLE (6) months.
c. BARS TO THE HOLDING OF CERTIFICATION NOTE: If an election had been held but No Union
ELECTION won, a PCE may be filed again but only after 12
(Sec. 14, Rule VIII, and Sec. 7, Rule XVII, DOLE D.O. months.
No. 40-03, as amended; Sec. 14 (e), Rule III, Book
V, Omnibus Rules Implementing the Labor Code) If a union has won, such union and the Er must
within 12 months start negotiating a collective
GR: In the absence of a CBA duly registered in agreement.
accordance with Art. 237 of the Labor Code, a
petition for certification election may be filed at any
time. (Sec. 1, Rule VIII, Book V, IRR)
2024 GOLDEN NOTES
Negotiation Bar Rule Labor Code. Where the CBA is duly registered, a
petition for certification election may be filed within
Under this rule, no petition for certification election the 60-day freedom period prior to its expiry.
should be entertained while the sole and exclusive
bargaining agent and the Er have commenced and The purpose of this rule is to ensure stability in the
sustained negotiations in good faith within the relationship of the workers and the Er by preventing
period of one (1) year from the date of a valid frequent modifications of any CBA entered into by
certification, consent, run-off, re-run, or from the them in good faith and for the stipulated original
date of voluntary recognition. period.
Once the CBA negotiation have commenced and NOTE: To bar a certification election, it is no longer
while the parties are in the process of negotiating necessary that the CBA be “certified”; it is enough
the terms and conditions of the CBA, no challenging that it is registered in accordance with Art. 237.
union is allowed to file a petition for certification (Azucena, 2016)
election that would disturb the process and unduly
forestall the early conclusion of the agreement. Requisites of Contract Bar
If after the lapse of 12 months and they failed to 1. It must contain substantial terms and
commence the negotiation, the Ees’ wish to have a conditions of employment sufficient to stabilize
CBA is defeated. Hence, another union can petition the bargaining relationship;
again for a certification election to replace the
unproductive bargaining agent. (Azucena, 2016) 2. It must be signed by the parties; and
Bargaining Deadlock Bar Rule 3. The effective date and expiration date must be
readily discernible on the face of the contract.
Under this rule, a petition for certification election
may not be entertained when a bargaining deadlock Contract Bar Rule Applied on Extended CBA
to which an incumbent or certified bargaining agent Under Deadlock
is a party has been submitted to conciliation or has
become the subject of a valid notice of strike or No petition for certification election may be filed
lockout. before the onset of the freedom period nor after
such period. The old CBA is extended until a new one
NOTE: The Er’s continuing act of evading is signed.
negotiation with the certified bargaining union is
tantamount to a bargaining deadlock. It shall be the duty of both parties to keep the status
quo and to continue in full force and effect the terms
Artificial Deadlock and conditions of the existing agreement during the
60-day period and/or until a new agreement is
A deadlock pre-arranged or preserved by collusion reached by the parties.
of the Er and the majority union. Signs of Artificial
Deadlock include failure of the union to resort to Where the Contract Bar Rule Does Not Apply
conciliation, failure to charge the Er ULP, or failure
to file a notice of strike despite the deadlock. 1. Where there is an automatic renewal provision
in the CBA but prior to the date when such
Contract Bar Rule automatic renewal became effective, the Er
seasonably filed a manifestation with the
Under this rule, a petition for certification election Bureau of Labor Relations of its intention to
may not be filed when a CBA between the Er and a terminate the said agreement if and when it is
duly recognized or certified bargaining agent has established that the bargaining agent does not
been registered with the BLR in accordance with the
2024 GOLDEN NOTES
represent anymore the majority of the workers a duly issued Charter Certificate upon filing of
in the bargaining unit; PCE; (Sec. 14(b), Rule VIII of D.O. 40-F-03)
2. Where the CBA, despite its due registration, is 4. When a PCE is filed before or after the freedom
found in appropriate proceedings that: period of a duly registered CBA, provided that
the 60-day period based on the original CBA
a. it contains provisions lower than the shall not be affected by any amendment,
standards fixed by law; or extension or renewal of the CBA; (Sec. 14(c),
b. the documents supporting its registration Rule VIII of D.O. 40-F-03)
are falsified, fraudulent, or tainted with
misrepresentation; 5. Filing of a petition within one (1) year from the
date of recording of voluntary recognition, or
3. Where the CBA does not foster industrial within the same period from a valid
stability, such as contracts where the identity of certification, consent, or run-off election where
the representative is in doubt since the Er no appeal on its results is pending; (Sec. 14(d),
extended direct recognition to the union and Rule VIII of D.O. 40-F-03)
conducted a CBA therewith less than one (1)
year from the time a certification election was 6. When a duly certified union has commenced
conducted where the “no union” vote won. This and sustained negotiations with the Er in
situation obtains in a case where the company accordance with Art. 250 of LC within the one-
entered into a CBA with the union when its year period referred in the preceding number;
status as exclusive bargaining agent of the Ees (Sec. 14(e), Rule VIII of D.O. 40-F-03)
has not been established yet; and
7. Absence of Er-Ee relationship between all the
4. Where the CBA was registered before or during members of the petitioning union and the
the last 60 days of a subsisting agreement or establishment where the proposed bargaining
during the pendency of a representation case. It unit is sought to be represented; (Sec. 14(h),
is well-settled that the 60-day freedom period Rule VIII of D.O. 40-F-03)
based on the original CBA should not be affected
by any amendment, extension, or renewal of the Q: Does the filing of a petition for
CBA for purposes of certification election. cancellation of registration of union cause
the suspension or dismissal of a PCE?
Other Grounds for Denial
A: NO. An order to hold a certification election
The Med-Arbiter may either approve or disapprove is proper despite the pendency of the petition
the PCE. The disapproval or denial of the petition for cancellation of the registration certificate of
has to be based on the grounds specified by the law: the respondent union. The rationale for this is
that at the time the respondent union filed its
1. Non-appearance – When petitioner does not petition, it still had the legal personality to
appear in two (2) successive conferences called perform such act absent an order directing the
by the Med-Arbiter, despite notice, the petition cancellation. (Association of Court of Appeals
may be dismissed; Ees v. Ferrer-Calleja, G.R. No. 94716, 15 Nov.
1991)
2. Illegitimacy/Unregistered union – When the
petitioning union or national union or NOTE: The finality of a decision cancelling the
federation is not listed in DOLE’s list of LLOs or certificate of registration of a LLO would not
if its registration has been cancelled; retroact to the time of its issuance of the
certificate. Meaning, despite the fact that a PCE
3. When there is a failure on the part of a local is filed during the pendency of a trial ruling
chapter, national union or federation to submit over the legitimacy of a labor union, the filing
2024 GOLDEN NOTES
for said petition was done when it still had Effect of Withdrawal of Signature by the
legal personality. Additionally, the legitimacy Employees
of the legal personality of a LLO cannot be
collaterally attacked. It must be done in a Critical factor to consider is when the withdrawal
separate action. (Legend International Resorts happened:
Limited v. Kilusang Manggagawa Ng Legenda,
G.R. No. 169754, 23 Feb. 2011) 1. If it is made before the filing, the withdrawal is
presumed voluntary and affects the propriety of
8. Illegitimacy – No charter – When the local or the petition.
chapter, or the national union or federation
fails to submit a duly issued charter certificate 2. If it is made after the filing, the withdrawal is
of the chapter at the time the union files its deemed involuntary and does not cause the
PCE, it will cause the dismissal of the PCE; dismissal of the petition.
9. Absence of employment relationship – Ees’ Appeal of Grant or Denial of PCE

right to unionize is founded on the existence of
Er-Ee relationship. If there is none, there It would depend if the establishment is organized or
would be no basis; and unorganized:
NOTE: Med-Arbiter can determine Er-Ee 1. In case of organized establishment, it is

relationship. Med-Arbiter has the authority to appealable.
determine existence of Er-Ee relationship in a
PCE. 2. In case of unorganized establishment, it is not
appealable, except if the petition is denied.
10. Lack of support (25% signature
requirement) – When the union filing a PCE NOTE: The filing or pendency of any inter/intra-
does not have the support of 25% of the union dispute and other related labor relations
bargaining unit manifested through their dispute is not a prejudicial question to any petition
signatures, the PCE may be denied. for certification election and shall not be a ground
for the dismissal of a petition for certification
Without this minimum support, the challenge election or suspension of proceedings of
to the incumbent union looks like a nuisance. It certification election. (Sec. 2, Rule XI of D.O. 40-03)
must appear that a sizeable portion of the Ees
desire to have a union. Double Majority Rule (Certification Election)
This requirement only applies to organized 1. Valid election (First Majority rule) – Majority
establishments. In unorganized of eligible voters shall have validly cast their
establishments, it is merely directory. votes.
NOTE: The 25% requirement may be relaxed 2. Winning Union (Second Majority rule) – The
by the Med-Arbiter and order the holding of winner who obtained majority of the valid votes
the certification election precisely for the cast shall be declared as the bargaining agent in
purpose of ascertaining which of the the bargaining unit.
contending unions shall be the EBA.
Q: Can the Bureau of Labor Relations certify a
union as the exclusive bargaining representative
after showing proof of majority representation
thru union membership cards without
conducting an election?
2024 GOLDEN NOTES
A: The Bureau of Labor Relations cannot certify a
union as the exclusive collective bargaining c) Should Union A be declared the winner?
representative after showing proof of majority
representation through union membership cards A: NO. Union A should not be declared the winner
without conducting a certification election. The LC because it failed to garner majority of the valid
in Arts. 268, 269, and 270 provides only for a votes. The majority of 500 votes, representing valid
certification election as the mode for determining votes, is 251 votes. Since Union A received 200 votes
the exclusive collective bargaining representative if only, it did not win the election. (Ibid.)
there is a question of representation in an
appropriate bargaining unit. d) Suppose the election is declared
invalid, which of the contending unions
NOTE: Under the so-called “double majority rule” should represent the rank-and-file Ees?
for there to be a valid certification election, the
majority of the employees in the bargaining unit A: NONE of the participating unions can represent
must have voted and the winning union must have the rank-and-file employees for purposes of
garnered majority of the valid votes cast. collective bargaining because none of them enjoys
(NUWHRAI-Manila Pavilion Hotel Chapter v. SOLE, majority representative status. (Ibid.)
G.R. NO. 181531, 31 July 2009)
e) Suppose that in the election, the unions
Q: Liwayway Glass had 600 rank-and-file Ees. obtained the following votes: A-250;
Three rival unions A, B, and C ‒ participated in B-150; C-50; 40 voted “no union”; and
the certification election ordered by the Med- 10 were segregated votes. Should Union
Arbiter. 500 Ees voted. The unions obtained the A be certified as the bargaining
following votes: A-200; B-150; C-50; 90 Ees voted representative? (2014 BAR)
“no union”; and 10 were segregated votes. Out of
the segregated votes, four (4) were cast by A: If the 10 votes were segregated on the same
probationary Ees and six (6) were cast by grounds, Union A cannot still be certified as the
dismissed Ees whose respective cases are still on bargaining representative because its vote of 250 is
appeal. still short of the majority vote of 251. However, if the
10 votes were validly segregated, majority vote
a) Should the votes of the probationary and would be 246 votes. Since Union A received more
dismissed Ees be counted in the total than majority vote then it won the election. (Ibid.)
votes cast for the purpose of determining
the winning labor union? Q: May an organization which carries a mixture
of rank-and-file and supervisory Ees possess any
A: YES. The segregated votes should be counted as of the rights of a legitimate labor organization,
valid votes. Probationary employees are not among including the right to file a petition for
the employees who are ineligible to vote. Likewise, certification election for the purpose of
the pendency of the appeal of the six dismissed collective bargaining?
employees indicates that they have contested their
dismissal before a forum of appropriate jurisdiction; A: YES. While there is a prohibition against the
hence, they continue to be employees for purposes mingling of supervisory and rank-and-file Ees in one
of voting in a certification election. (D.O. 40-03; Kato, labor organization, the Labor Code does not provide
2022) for the effects thereof. Thus, the Court held that after
a labor organization has been registered, it may
b) Was there a valid election? exercise all the rights and privileges of a legitimate
labor organization. Any mingling between
A: YES. The certification election is valid because it supervisory and rank-and-file Ees in its
is not a barred election and majority of the eligible membership cannot affect its legitimacy for that is
voters cast their votes. (Kato, 2022) not among the grounds for cancellation of its
2024 GOLDEN NOTES
registration, unless such mingling was brought When to be Conducted
about by misrepresentation, false statement, or
fraud under Art. 239 of the Labor Code. (Republic v. If conditions that justify the conduct of a run-off
Kawashima Textile, G.R. No. 160352, 23 July 2008) election are present and there are no objections or
challenges which, if sustained, can materially alter
d. FAILURE OF ELECTION, RUN-OF ELECTION, the election results, the Election Officer should motu
RE-RUN ELECTION proprio conduct the run-off election within ten (10)
(Secs. 17-19, Rule IX, DOLE D.O. No. 40-03, as days from the close of the election proceeding
amended) between the labor unions receiving the two highest
number of votes cast.
Failure of Election
Requirements for a Run-Off Election
There exists a failure of election in the following
instances: 1. A valid election took place because majority of
the CBU members voted;
1. Where the number of votes cast in a
certification or consent election is less than 2. The election presented at least three choices,
the majority of the number of eligible voters
and there is no material challenged votes – In e.g., Union One, Union Two, and No Union,
this case, the failure of election shall not bar the meaning, there are at least two union
filing of a motion for the immediate holding of “candidates;”
another certification or consent election within 3. Not one of the unions obtained the majority
six (6) months from date of declaration of valid votes;
failure of election; and
4. The total number of votes for all the unions is at
2. When there is a tie – The next election must be least 50% of the votes cast; and
held within a period of ten (10) days from the
last election in order to determine or break the 5. There is no unresolved challenge of voter or
tie. election process. (Azucena, 2016)
Run-off Election NOTE: Thus, if “no union” garnered the majority

vote, no run-off elections may be held.
It refers to an election between the labor union
receiving the two highest votes in a certification Choices in a Run-Off Election
election or consent election with three or more
unions in contention, where such certification The unions receiving the highest and 2nd highest
election or consent election results in none of the number of the votes cast. (Sec. 2, Rule X, Book V, IRR)
contending unions receiving the majority of the
valid votes cast; provided, that the total number of NOTE: “No Union” is not a choice in the Run-off
votes for all contending unions, if added is at least Election.
50% of the number of valid votes cast. (Art. 268, LC)
Posting of Notice for Run-Off Election
Qualification of Voters in the Run-Off Election
The notice should be posted by the Election Officer
The same voters list used in the certification at least five (5) days before the actual date. (Sec. 1,
election shall be used in the run-off election. Rule X, Book V, IRR)
2024 GOLDEN NOTES
Re-Run Election
B. RIGHTS OF LEGITIMATE LABOR
There are three instances of Re-Run: ORGANIZATIONS
1. Failure of certification election declared by the
election officer;
2. Tie between two unions; or
Labor Organization
3. Tie between a union and no union.
It means any union or association of Ees which
In both instances, the “no union” is also a choice.
exists in whole or in part for the purpose of
collective bargaining or of dealing with Ers
6. EMPLOYER AS A MERE BYSTANDER RULE concerning terms and conditions of employment.
(Sec. 1, Rule IX, DOLE D.O. No. 40-03, as (Art. 219(g), LC)
amended)
It is created for mutual aid, interest, cooperation,
Employer as a Bystander (Bystander Rule) protection, or other lawful purposes. (Sec. 1, Rule I,
Book V, IRR as amended by D.O. No. 40-04)
In all cases, whether the PCE is filed by an Er or an
LLO, the Er shall not be considered a party thereto It is a generic term as it can refer to a “union” or
with a concomitant right to oppose a PCE. The only “association of Ees,” registered or not. The purposes
purpose of the proceeding is to determine which may also be broad such as “collective bargaining” or
organization will represent the Ees in bargaining “mutual aid” or “cooperation” or other lawful
with the Er. The choice of representative is the purpose. (Azucena, 2016)
exclusive concern of the Ees.
Union
Limitation of Employer’s Participation in Such
Proceedings It refers to “any labor organization in the private
sector organized for collective bargaining and for
1. Being notified or informed of petitions of such other legitimate purpose. (Samahan ng
nature; and Manggagawa sa Hanjin Shipyard v. Bureau of Labor
Relations, G. R. No. 211145, 14 Oct. 2015)
2. Submitting the list of Ees during the pre-
election conference should the Mediator- Worker’s Association
Arbiter act favorably on the petition. (Republic v.
Kawashima Textile, G.R. No. 160352, 23 July An organization of workers formed for the mutual
2008) aid and protection of its members or for any
legitimate purpose other than collective bargaining.
NOTE: Er may file a petition for certification election (Ibid.)
when requested to bargain collectively, but it should
thereafter not be allowed to have an active role in Legitimate Labor Organization
the CE; it shall merely act as a bystander.
It means any labor organization duly registered with
Possible Recourse of Employer the DOLE, and includes any branch or local thereof.
(Art. 219 (h), LC)
If the Er believes that the union has inappropriate
membership because it includes rank-and-file with Bargaining Representative
managerial/supervisory Ees, the Er’s recourse is not
to oppose the PCE, but to file a separate petition to It means a legitimate labor organization or any
cancel the union’s registration. (Azucena, 2016) officer or agent of such organization, whether or not
employed by the Er. (Art. 219 (j), LC)
2024 GOLDEN NOTES
Company Union Affiliation/Disaffiliation from National Union or
Federation
It refers to any labor organization whose formation,
function or administration has been assisted by any A local union may affiliate with or disaffiliate from a
act defined as unfair labor practice by the Labor federation. This is an exercise of the right of
Code. (Art. 219(i), LC) association recognized by the Constitution.
Two (2) Basic Purposes of a Labor Organization Between the chapter and the federation, affiliation
or disaffiliation is a contractual relation. Hence, even
1. For collective bargaining; and if disaffiliation is a matter of right, the local must
2. For dealing with the Er. comply with the obligations under the CBL such as
manner and period of notice.
Modes of Creating a Labor Organization
Affiliate
1. Independent registration; (Art. 240, LC) and
2. Chartering of local chapter/chartered local (Art. An affiliate refers to:
241, LC) 1. An independently registered union that enters
into an agreement of affiliation with a
Registration with the DOLE federation or national union; or
A labor organization may be registered or not. If 2. A chartered local which applies for and is
registered, it is considered a “legitimate labor granted an independent registration but does
organization” (LLO). However, a labor organization not disaffiliate from its mother federation or
is not “illegitimate” just because it is unregistered. It national union.
is still a lawful organization but it has no legal
personality to demand collective bargaining with Reportorial Requirements in Affiliation
the Er. (Azucena, 2016)
The report of affiliation of independently registered
NOTE: Registration with the DOLE makes a labor labor unions with a federation or national union
organization legitimate in the sense that it is clothed shall be accompanied by the following documents:
with legal personality to claim the representational
and bargaining rights enumerated in Art. 251 and 1. Resolution of the labor union's board of
Art. 267 or to strike and picket under Art. 278. directors approving the affiliation;
(Azucena, 2013)
2. Minutes of the general membership meeting
It is the fact of being registered with DOLE that approving the affiliation;
makes a labor organization legitimate. Registration
under the corporation law before the Securities and 3. The total number of members comprising the
Exchange Commission (SEC) only has the effect of labor union and the names of members who
giving it juridical personality to represent itself in approved the affiliation; and
regular courts but it does not grant the rights and
privileges of a legitimate labor organization. (Phil. 4. The certificate of affiliation issued by the
Land-Sea-Air Labor Union, Inc. v. CIR, G.R. No. L- federation in favor of the independently
25711, 29 Oct. 1975) registered labor union; and written notice to the
Er concerned if the affiliating union is the
incumbent bargaining agent. (Sec. 7, Rule III,
D.O. 40-03)
2024 GOLDEN NOTES
Reasons for Affiliation Disaffiliation Must Be by Majority Decision
1. Secure support or assistance especially during Disaffiliation must be decided by the entire
the formative stage of unionization; membership through secret balloting in accordance
with Art. 250(d). An individual member or any
2. Utilize expertise in preparing and pursuing number of members may disaffiliate from the union
bargaining proposals; and during the “freedom period” but disaffiliating the
union itself from the mother union must be
3. To marshal mind and manpower in the course supported by the majority of the members. If done
of a group action such as a strike. (Azucena, by a minority, even during the freedom period, the
2016) act may constitute disloyalty. They may be expelled
from the union or may be removed from their
NOTE: The sole essence of affiliation is to increase, employment because of the union security clause.
by collective action, the common bargaining power
of local unions for the effective enhancement and Limitation to Disaffiliation
protection of their interests. (Azucena, 2016)
To disaffiliate is a right, but to observe the terms of
Independently Registered Union Required to affiliation is an obligation. (Azucena, 2016)
Report Affiliation with the Regional Office
Disaffiliation should be in accordance with the rules
A union affiliating with a federation or national and procedures stated in the Constitution and by-
union is required to report such affiliation to the laws of the federation. A local union may disaffiliate
Regional Office that issued its certificate of with its mother federation, provided that there is no
registration. enforceable provision in the federation’s
constitution preventing disaffiliation of a local
Disaffiliation of Local Union from the Federation union. (Tropical Hut Ees Union v. Tropical Hut, G.R.
Nos. L-43495-99, 20 Jan. 1990)
GR: A labor union may disaffiliate from the mother
union to form an independent union only during the A prohibition to disaffiliate in the Federation’s
60-day freedom period immediately preceding the constitution and by-laws is valid because it is
expiration of the CBA. intended for its own protection.
XPN: Even before the onset of the freedom period, Effect of Disaffiliation
disaffiliation may still be carried out, but such must
be effected by the majority of the union members in 1. Union Dues – the obligation of an Ee to remit
the bargaining unit. union dues to the mother is coterminous with
the affiliation or membership of its local. The
Disaffiliation must be decided by the entire dues must now be remitted to the local.
membership through secret balloting in accordance
with Art. 250(d). This happens when there is a 2. Existing CBA – the CBA continues to bind the
substantial shift in allegiance on the part of the members of the new or disaffiliated and
majority of the members of the union. In such a case, independent union up to the CBA’s expiration
however, the CBA continues to bind the members of date based on the “Substitutionary Doctrine.”
the new or disaffiliated and independent union to
determine the union which shall administer the Revocation of Charter
CBA. (ANGLO-KMU v. Samahan ng Manggagawang
Nagkakaisasa Manila Bay Spinning Mills at J.P. Coats, A federation may revoke the charter issued to a
G.R. No. 118562, 05 July 1996) local/chapter by serving a verified notice of
revocation, copy furnished to the Bureau, on the
ground of disloyalty or such other grounds as may
2024 GOLDEN NOTES
be specified in the constitution and by-laws of the Effect of Revocation
federation. (Sec. 5, Rule VIII, Book V, IRR)
GR: The revocation shall divest the local/chapter of
Effect of Revocation of Chartered Local Union its legal personality upon receipt of the notice by the
Bureau.
INDEPENDENTLY
UNREGISTERED
REGISTERED XPN: If the local/chapter has acquired independent
Mode to Affiliate registration.
Effect of Cancellation of Registration of

By application with the Federation or National Union on
federation for the Locals/Chapters
issuance of a charter
By signing contract of
certificate to be GR: The cancellation shall operate to divest its
affiliation.
submitted to the locals/chapters of their status as legitimate labor
Bureau of Labor organizations.
Relations
XPN: Locals/chapters are covered by a duly
registered CBA.
Effect of Disaffiliation to the Union (local)
Would cease to be an NOTE: In the latter case, locals/chapters shall be
Would not affect its LLO and would no allowed to register as independent unions. If they
being an LLO and longer have the legal fail to register, they shall lose their legitimate status
therefore, it would personality and the upon the expiration of the CBA.
continue to have legal rights and privileges
personality and to granted by law to LLO, Q: PSEA is a local union in Skylander Company
possess all rights and unless the local chapter which is affiliated with PAFLU. PSEA won the
privileges of LLO. is covered by its duly certification election among the rank-and-file
registered CBA. Ees of the Skylander Company but its rival union
PSEA-WATU protested the results. Pending the
Effect of Disaffiliation to the CBA
resolution of such controversy, PSEA
disaffiliated with PAFLU and hence affiliated
An existing CBA would
with NCW which was supported by its members.
continue to be valid as The CBA would
May a local union disaffiliate with its mother
the labor organization continue to be valid up
federation pending the settlement of the status
can continue to its expiration date.
as the sole and exclusive bargaining agent?
administering the CBA.
A: YES. The pendency of an election protest does not
Entitlement to Union Dues after Disaffiliation
bar the valid disaffiliation of the local union which
Union dues may no was supported by the majority of its members. The
Labor organization right of a local union to disaffiliate with the
longer be collected as
entitled to the union federation in the absence of any stipulation in the
there would no longer
dues and not the Constitution and by-laws of the federation
be any labor union that
federation from which prohibiting disaffiliation is well settled. Local
is allowed to collect
the labor organization unions remain as the basic unit of association, free
such union dues from
disaffiliated. to serve their own interest subject to the restraints
the Ees.
imposed by the Constitution and by-laws of national
federation and are free to renounce such affiliation
upon the terms and conditions laid down in the
2024 GOLDEN NOTES
agreement which brought such affiliation to 4. To own property, real or personal; (Property
existence. Rights)
In the case at bar, no prohibition existed under the 5. To sue and be sued in its registered name;
Constitution and by-laws of the federation. Hence, (Property Rights)
the union may freely disaffiliate with the federation.
(Philippine Skylanders v. NLRC, G.R. No. 127374, 31 6. To undertake all other activities designed to
Jan. 2002) benefit the organization and its members; and
(Art. 251, LC) (Property Rights)
Substitutionary Doctrine
7. To collect reasonable membership fees, union
This doctrine holds that the Ees cannot revoke the dues, assessments, fines, and other
validly executed collective bargaining contract with contributions. (Art. 292(a), LC) (Right to Collect
their Er by the simple expedient of changing their Union Dues)
bargaining agent. The new agent must respect the
contract. The Ees, through their new bargaining Rights and Conditions of Membership in
agent, cannot renege on the collective bargaining Legitimate Labor Organizations
contract, except to negotiate with the management
for the shortening thereof. (Elisco-Elirol Labor The rights of union members may be summarized as
Union, G.R. No. L-41955, 29 Dec. 1977) follows: (D-I-M-Pol)
The Substitutionary Doctrine, however, cannot be a. Political right;

invoked to support the contention that a newly b. Right over Money matters;
certified collective bargaining agent automatically c. Right to Information; and
assumes all the personal undertakings—like the no- d. Deliberative and decision-making right.
strike stipulation here—in the collective bargaining
agreement made by the deposed union. When EBR Political Right
bound itself and its officers not to strike, it could not
have validly bound all the other rival unions existing The member’s right to vote and be voted for, subject
in the bargaining units in question. (Benguet to lawful provisions on qualification and
Consolidated Inc v. BCI Ees and Workers Union- Paflu, disqualifications.
G.R. No. L-24711, 30 Apr. 1968)
Right over Money Matters
Rights of Labor Organizations
The member’s right:
A legitimate labor organization shall have the right: 1. Against excessive fees;
1. To act as the representative of its members for 2. Against unauthorized collection of
the purpose of collective bargaining; (Right of contributions or disbursements;
Representation) 3. To require adequate records of income and
expenses;
2. To be certified as the exclusive representative of 4. Of access to financial records;
all the Ees in an appropriate bargaining unit for 5. Vote on officer’s compensation; and
purposes of collective bargaining; 6. Vote on proposed special assessment and be
deducted a special assessment only with the
3. To be furnished by the Er with annual audited member’s written authorization.
financial statements, including the balance
sheet and the profit and loss statement; (Right
to Information)
2024 GOLDEN NOTES
Right to Information arbitrary or impetuous reasons may amount to ULP
by the union.
The member’s right to be informed about the:
Election of Union Officers
1. Organization’s constitution and by-laws;
2. Collective bargaining agreement; and Q: What positions should be filled up, when, and
3. Labor laws. how should the election be done?
Deliberative and Decision-Making Right A: It depends on the union’s constitution and by-
laws or the agreement among the members. In the
The member’s right to participate in deliberations absence thereof, the Implementing Rules of Book V
on major policy questions and decide them by secret shall apply.
ballot.
NOTE: Officers are elected by the members through
Q: When, how, and under what conditions does secret ballot voting.
an Ee become a union member?
Eligibility of Voters
A: The answer depends on the union’s constitution
and by-laws. The LC gives a labor organization the Only union members can take part in the election of
right to prescribe its own rules for acquisition or union officers. The election takes place at intervals
retention of membership. Nonetheless, an Ee is of five (5) years, which is the term of office of the
already qualified for union membership starting on union officers. (Azucena, 2016)
his first day of service. (Azucena, 2016)
Election under the Implementing Rules
Membership in the Union Does Not Necessarily
Mean Coverage in the CBA The incumbent president should create an election
committee within 60 days before expiration of the
Inclusion or coverage in the CBA depends on the term of incumbent officers. The Rules specify the
stipulations in the CBA itself. It is the CBA which composition of the election committee as well as its
defines its coverage as agreed by the parties. powers and duties.
Qualifying for union membership does not
necessarily mean inclusion in the coverage of the If the officers with expired term do not call an
CBA. election, the remedy is for at least 30% of the
members to file a petition with the DOLE Regional
Membership in the CBU Does Not Mean Office. (Sec. 2, Rule XII, Book V, IRR)
Membership in the Union
Union Officer Must Be an Employee
Inclusion or membership in the union depends on
the union’s constitution and by-laws. No person who is not an Ee or worker of the
company or establishment where a union operates
Inclusion in the CBU depends on the determination shall be elected or appointed as an officer of such
of its appropriateness. union. Only an Ee may be a union officer.
Expulsion of a Union Member
A member of a union may be expelled but only for a

valid cause and by following the procedure outlined
in the constitution and by-laws. A member is
entitled to due process. Expulsion of a member for
2024 GOLDEN NOTES
Disqualification of Union Officers reasonable opportunity to pay dues, including a
grace period during which dues may be paid
The following are disqualified to become union without any loss of rights. It should be noted
officers: however, that it cannot create special classes of non-
voting members.
1. Those convicted of a crime involving moral
turpitude; Obtaining Relief with the Union
2. Those who belong to a subversive organization;
or GR: First, redress must be sought with the union
3. Those engaged directly or indirectly in any itself in accordance with the constitution and by-
subversive activity. laws.
Frustration over Incumbent Officers of Union When the intra-union remedy fails, a case can be
Does Not Justify Disregard of Union’s filed with the Bureau of Labor Relations.
Constitution and By-Laws
XPN: When the exhaustion of remedies with the
Frustration over the performance of the incumbent union would practically amount to a denial of
officers, as well as their fears of a fraudulent election justice. Then, it cannot be insisted upon as a
to be held under the latter’s supervision, could not condition to the right to invoke the aid of the court.
justify the imposition of their own will on the union.
The organizations shall have the right to draw up 30% Requirement
their own constitution and rules and to elect their
representatives in full freedom, free from any GR: At least 30% of the members are required to
interference from public authorities. The union report a violation of labor organization procedures.
members should respect the constitution and rules
they themselves draw up equally so. The CBL is the XPN: When such violation affects only one or two
fundamental law that governs the relationship members, then only one or two members would be
between and among the members of the union. (UST enough to report such violation.
Faculty Union v. Bitonio, Jr., G.R. No. 131235, 16 Nov.
1999) Visitorial Power of SOLE to Inquire into the
Financial Activities of Labor Organizations
Due Process in Impeachment of Union Officers
SOLE is authorized to inquire into the financial
Despite practical difficulties in complying with the activities of any labor organization to determine
procedure laid down in the constitution and by- compliance or non-compliance with the laws and to
laws, the impeachment procedure contained therein aid in the prosecution of any violation thereof.
must be substantially complied with. (Litton Mills
Ees Association v. Ferrer-Calleja, G.R. No. 78061, 24 It is initiated on the basis of:
Nov. 1988)
1. A Complaint under oath; and
Q: Can a labor organization prescribe rules and 2. Supported by 20% of the membership.
regulation with respect to voting?
Dues and Assessments which the Union May
A: YES. It may require reasonable period of prior Collect
membership (such as six months or a year). It may
also condition the exercise of right to vote on the Legitimate labor organizations are authorized to
payment of dues since paying dues is a basic collect reasonable amounts of the following:
obligation of membership. However, this is subject 1. Membership fees;
to two (2) qualifications: (a) it must be applied 2. Union dues;
uniformly; and (b) members must be afforded a 3. Assessments;
2024 GOLDEN NOTES
4. Fines; Bargaining Agreement (CBA) constitutes unfair
5. Contribution for labor education and research, labor practice, not an intra-union dispute.
mutual death and hospitalization benefits,
welfare fund, strike fund, and credit and The process of check-off, which involves the
cooperative undertakings; (Art. 292(a), LC) and deduction of fees from the employees and the
6. Agency fees. (Art. 259(e), LC) subsequent remittance of the collected amount to
the bargaining representative, assures the latter of
continuous funding. “Without such funds, the union,
1. CHECK OFF, ASSESSMENT, AND AGENCY FEES
in this case MPLO, would not be effective in
(Arts. 250 (n), (o) and 259 (e), LC; Sec. 1, Rule
discharging its duties and responsibilities as the
XIII, DOLE D.O. No. 40-03)
exclusive bargaining representative of its members.”
(South Cotabato Integrated Port Services, Inc. v.
Check-Off
Officer-in-Charge Romeo Montefalco, Jr., G.R. No.
235569, 13 Dec. 2023)
It is a method of deducting from the Ee’s pay at
prescribed periods, any amount due for fees, fines,
Jurisdiction over Check-Off Disputes
or assessments. It is a process or device whereby the
Er, on agreement with the union recognized as the Being an intra-union dispute, the Regional Director
proper bargaining representative, or on prior
of DOLE has jurisdiction over check off disputes.
authorization from its Ees, deducts union dues and (Art. 250(p), LC)
assessments from the latter’s wages and remits
them directly to the union.
Assessments
Requirements for a Valid Check-Off Payments used for a special purpose. Especially if
required only for a limited time. (Azucena, 2016)
1. Authorization by a written resolution of the
majority of all the members at a general Requisites to Collect Special Assessment
membership meeting duly called for the
purpose; GR: No special assessments, attorney’s fees,
negotiation fees, or any other extraordinary fees
2. Secretary’s record of the minutes of said
may be checked-off from any amount due to an Ee
meeting; and unless there is:
3. Individual written authorizations for check-off

1. Authorization by a written resolution of the
duly signed by the Ees concerned. majority of all members at the general
membership meeting duly called for that
NOTE: Under Art. 113, one of the lawful deductions
purpose;
from Ee’s wage is for “union dues, in cases where the
right of the worker or his union to check-off has
2. Secretary’s record of the minutes of the
been recognized by the Er or authorized in writing meeting; and
by the individual worker concerned.” (Azucena,
2016)
3. Individual written authorization for check-off
duly signed by the Ee concerned. (Art. 250, LC;
Employer’s Unlawful Withholding of Union Fees ABS-CBN Supervisors Ees Union Members v. ABS-
Constitutes Unfair Labor Practice
CBN Corp., G.R. No. 106518, 11 Mar. 1999)
A complaint charging the employer for non-

NOTE: The authorization should specify the:
remittance of collected union member dues by
virtue of a check-off provision in the Collective a. Amount;
b. Purpose; and
2024 GOLDEN NOTES
c. Beneficiary of the deduction. NOTE: Payment by non-union members of agency
fees does not amount to unjust enrichment because
XPNs: the purpose of such dues is to avoid discrimination
between union and non-union members. The source
1. For mandatory activities under the LC; of Agency Fee is not contractual but is based from
2. For Agency Fees; quasi-contract.
3. When non-members of the union avail of the
benefits of the CBA: Requisites for Assessment of Agency Fees
a. Non-members may be assessed union 1. The Ee is part of the bargaining unit;

dues equivalent to that paid by union 2. He is not a member of the union; and
members; and 3. He partook of the benefits of the CBA.
b. Only by board resolution approved by NOTE: The individual authorization required under
majority of the members in general Art. 250(n) shall not apply to non-members of the
meeting called for the purpose. recognized CB agent with regard to assessment of
agency fees.
Effect of Failure to Strictly Comply with the
Requirements Set by Law The Ee's acceptance of benefits resulting from a
collective bargaining agreement justifies the
It shall invalidate the questioned special deduction of agency fees from his pay and the
assessments. Substantial compliance with the union's entitlement thereto. In this aspect, the legal
requirements is not enough in view of the fact that basis of the union's right to agency fees is neither
the special assessment will diminish the contractual nor statutory, but quasi-contractual
compensation of union members. (Palacol v. Ferrer- deriving from the established principle that non-
Calleja, G.R. No. 85333, 26 Feb. 1990) union Ees may not unjustly enrich themselves by
benefiting from employment conditions negotiated
Union Dues by the bargaining union. (Holy Cross of Davao College
v. Hon. Joaquin, G.R. No. 110007, 18 Oct. 1996)
These are regular monthly contributions paid by the
members to the union in exchange for the benefits Limitation on the Amount of Agency Fee
given to them by the CBA and to finance the
activities of the union in representing the union. The bargaining union cannot capriciously fix the
amount of agency fees it may collect from its non-
Nature and Purpose of Union Dues members. Art. 248(e) of the LC expressly sets forth
the limitation in fixing the amount of the agency
Union dues are the lifeblood of the union. All unions fees, thus:
are authorized to collect reasonable membership
fees, union dues, assessments, fines, and other 1. It should be reasonable in amount; and
contributions for labor education and research, 2. It should be equivalent to the dues and other
mutual death and hospitalization benefits, welfare fees paid by members of the recognized
fund, strike fund, and credit and cooperative collective bargaining agent.
undertakings. (Art. 292(a), LC)
Q: A is employed by XYZ Company where XYZ Ees
Agency Fees Union (XYZ-EU) is the recognized exclusive
bargaining agent. Although A is a member of
It is an amount equivalent to union dues, which a rival union XYR-MU, he receives the benefits
non-union member pays to the union because he under the CBA that XYZ-EU had negotiated with
benefits from the CBA negotiated by the union. the company. XYZ-EU assessed A, a fee
equivalent to the dues and other fees paid by its
2024 GOLDEN NOTES
members but A insists that he has no obligation Nature
to pay said dues and fees because he is not a
member of XYZ–EU and he has not issued an The CBA is the law between the contracting parties
authorization to allow the collection. Explain and the Collective Bargaining representative and the
whether his claim is meritorious. Er-company. Compliance with a CBA is mandated by
the expressed policy to give protection to labor.
A: NO. The fee exacted from A takes the form of an (Vicente Almario v. Philippine Airlines, Inc., G.R. No.
agency fee which is sanctioned by Art. 259(e) of the 170928, 11 Sept. 2007)
LC. The collection of agency fees in an amount
equivalent to union dues and fees from Ees who are NOTE: Unilateral changes in the implementation of
not union members is recognized under the LC. The the provisions of the CBA cannot be allowed without
union may collect such fees even without any the consent of both contracting parties. (Wesleyan
written authorization from the non-union member University-Philippines v. WUP Faculty and Staff
Ees, if said Ees accept the benefits resulting from the Association, G.R. No. 181806, 12 Mar. 2014)
CBA. The legal basis of agency fees is quasi-
contractual. (Del Pilar Academy v. Del Pilar Academy Purpose
Ees Union, G.R. No. 170112, 30 Apr. 2008)
The goal of collective bargaining is the making of
Union Dues vs. Agency Fees agreements that will stabilize business conditions
and fix fair standards of working conditions. (P.I.
UNION DUES AGENCY FEES Manufacturing, Incorporated v. P.I. Manufacturing
From whom collected Supervisors and Foremen Association, G.R. No.
167217, 04 Feb. 2018)
Collected by the union
from non-members Coverage
Collected from union belonging to the same
members bargaining unit who The benefits of a collective bargaining agreement
receive the benefits are extendible to all employees regardless of their
under the CBA. membership in the union because to withhold the
same from the non- members would be to
Need for written authorization discriminate against them. Moreover, when a union
bids to be the bargaining agent, it voluntarily
Can be assessed even
There must be an assumes the responsibility of representing all the
without the
individual written employees in the appropriate unit. Such non-
authorization of the Ee
authorization by members are neither "free-riders" nor should they
concerned.
individual members. be made to pay on the principle of quasi-contract.
(National Brewery & Allied Industries Labor Union of
the Philippines v. San Miguel Brewery, Inc., G.R. No. L-
2. COLLECTIVE BARGAINING
18170, 31 Aug. 1963).
Collective Bargaining Agreement (CBA) Q: A Government-Owned and-Controlled

Corporation (GOCC) executed a renegotiated
It refers to a contract executed upon request of collective bargaining agreement (CBA) with its
either the Er or the exclusive bargaining supervisory employees’ union. The Governance
representative of the Ees – incorporating the Commission for Government-Owned and-
agreement reached after negotiations with respect Controlled Corporations (GCG) opined that the
to wages, hours of work, and all other terms and CBA was in violation of Sec. 9 of Executive Order
conditions of employment, including proposals for No. 7, which imposed a moratorium on increases
adjusting any grievances or questions under such in the salaries, allowances, incentives and other
agreement. benefits in GOCCs unless specifically authorized
2024 GOLDEN NOTES
by the President of the Republic of the removes the authority of GOCCs to determine their
Philippines. The union filed a complaint against own compensation system.
the GOCC before the National Conciliation and
Mediation Board (NCMB) for failure to The law authorizes the GCG to develop a
implement the CBA. The Court of Appeals compensation and position classification system
affirmed the arbitrator’s findings in granting the applicable to all GOCCs officers and employees,
additional benefits and explained that EO No. 7 whether under the SSL or exempt, for approval of
does not apply to CDC since it is a GOCC without the President. The GCG did not give its favorable
original charter, as well as to ACSP because it is recommendation to the GOCC and its union before
composed of supervisory employees. Were the they renegotiated the CBA for additional benefits.
terms and conditions of government (Clark Development Corporation and Governance
employment fixed in the collective bargaining Commission for GOCCs v. Association of CDC
agreement valid? Supervisory Personnel Union, G.R. No. 207853, 30
March 2022, as penned by J. M.V. Lopez)
A: NO. The terms and conditions of government
employment fixed in the collective bargaining a. PROCEDURE IN BARGAINING
agreement are invalid. Settled is the rule that the (Art. 261, LC)
right of government employees to self-organization
is not as extensive as in the right of private When a party desires to negotiate an agreement:
employees. Likewise, the right of government 1. It shall serve a written notice upon the other
employees to collective bargaining and negotiation party with a statement of proposals;
is subject to limitations. Only the terms and
conditions of government employment not fixed by 2. Reply by the other party shall be made within
law can be negotiated. ten (10) calendar days with counter proposals;
EO No. 7, Series of 2010, directed the rationalization 3. In case of differences, either party may request
of the compensation and position classification for a conference which must be held within 10
system in all GOCCs, and imposed a moratorium on calendar days from receipt of request;
increases in the rates of salaries, and the grant of
new increases in the rates of allowances, incentives 4. If not settled, NCMB may intervene and shall
and other benefits, except salary adjustments, are exert all efforts to settle disputes amicably, and
hereby imposed until specifically authorized by the encourage the parties to submit the dispute to a
President. voluntary arbitrator; and
The Court explained that the clause “until 5. If not resolved, the parties may resort to any
specifically authorized by the President” is not in the other lawful means, either to settle the dispute
nature of an exception. Rather, the clause provides or submit it to a voluntary arbitrator.
for the situation where the President, under the
same authority by which the moratorium is NOTE: During the conciliation proceeding in the
imposed, deems it proper to lift the moratorium. NCMB, the parties are prohibited from doing any act
The use of the preposition before the phrase which may disrupt or impede the early settlement of
specifically authorized by the President denotes disputes. (Art. 261(d), LC)
that the moratorium continues up to a particular
time. Ratification of the CBA
In this case, the Court takes judicial notice that the GR: The agreement negotiated by the Ees' EBR
President never lifted the moratorium from the time should be ratified or approved by the majority of all
it was issued on September 8, 2010. As such, the the workers in the bargaining unit. The proper
economic terms of the CBA executed on March 20, ratifying group is not the majority union but the
2012, are void for violating the law. RA No. 10149
2024 GOLDEN NOTES
majority of all the workers in the bargaining unit govern. (MERALCO v. Hon. Sec. of Labor, G.R. No.
represented by the negotiation. 127598, 1 Aug. 2000)
XPN: Ratification of the CBA by the Ees is not needed Q: Does the hold-over principle apply to an
when the CBA is a product of an arbitral award by a imposed CBA/arbitral award?
proper government authority (Art. 278(g) LC) or a
voluntary arbitrator. (Art. 275, LC) A: YES. The Hold-over Principle applies to an
imposed CBA. The law does not provide for any
Q: What is the automatic renewal clause of exception nor qualification on which economic
collective bargaining agreements? (2008 BAR) provisions of the existing agreement are to retain its
force and effect. Likewise, the law does not
A: The automatic renewal clause means that distinguish between a CBA duly agreed upon by the
although the CBA has expired, it continues to have parties and an imposed CBA. (General Milling
legal effects as between the parties until a new CBA Corporation – ILU v. General Milling Corp., G.R. No.
has been entered. (Pier & Arrastre Stevedoring 193723, 20 July 2011)
Services, Inc. v. Confessor, G.R. No. 110854, 13 Feb.
1995) b. DUTY TO BARGAIN COLLECTIVELY
The rationale of such clause is to make it the duty of (Arts. 262-264, LC)
the parties to keep the status quo and to continue in
full effect the terms and conditions of the existing The duty to bargain collectively means the
agreement until a new agreement is reached by the performance of a mutual obligation to meet and
parties. (Principle of CBA Continuity) (Art. 264, LC) convene promptly and expeditiously in good faith
for the purpose of:
Q: What is the Lock, Stock, and Barrel Rule?
1. Negotiating an agreement with respect to
A: When the Er refuses to submit any counter- wages, hours of work, and all other terms and
proposal, the Er had lost its right to bargain the conditions of employment;
terms and conditions of employment. Consequently,
all the terms and conditions of the CBA as proposed 2. Including proposals for adjusting any
by the SEBA are deemed approved and accepted grievances or questions arising under such
lock, stock, and barrel by the Er. (Kiok Luy v. NLRC agreement;
G.R. No. L-54334, 22 Jan. 1986)
3. Executing a contract incorporating such
Hold-Over Principle agreements if requested by either party but
such duty does not compel any party to agree to
It shall be the duty of both parties to keep the status a proposal or to make any concession (Art. 263,
quo and to continue in full force and effect the terms LC); and
and conditions of the existing agreement during the
60-day period and/or until a new agreement is 4. Negotiation over the terms of a new contract or
reached by the parties. Despite the lapse of the proposed modifications, when an existing
formal effectivity of the CBA, the law still considers agreement is validly opened for negotiations.
the same as continuing in force and effect until a (Azucena, 2016)
new CBA shall have been validly executed.
(MERALCO v. Hon. Sec. of Labor, G.R. No. 127598, 1 When There is No CBA
Aug. 2000)
In the absence of an agreement or other voluntary
NOTE: During the interregnum between the arrangement providing for a more expeditious
expiration of the economic provisions of the CBA manner of collective bargaining, it shall be the duty
and the date of effectivity of the arbitral award, it is of Er and the representatives of the Ees to bargain
understood that the hold- over principle shall
2024 GOLDEN NOTES
collectively in accordance with the provisions of the
LC. (Art. 262, LC) c. ECONOMIC PROVISIONS AND CONDITIONS
When There is a CBA Term/Duration of a CBA
When there is a CBA, the duty to bargain collectively, 1. Economic and Non-Economic Aspect – may last
in addition to Art. 263, shall mean that neither party for a maximum period of three (3) years after
shall terminate nor modify such agreement during the execution of the CBA.
its lifetime.
2. Representation Aspect – may last for five (5)
However, either party can serve a written notice to years. It refers to the identity and majority
terminate or modify the agreement at least 60 days status of the union that negotiated the CBA as
prior the expiration of its fifth year. the exclusive bargaining representative.
NOTE: It shall be the duty of both parties to keep the 60-Day Freedom Period (Representative Aspect)
status quo and to continue in full force and effect the During the 60-day freedom period:
terms and conditions of the existing agreement
during the 60-day period and/or until a new 1. A labor union may disaffiliate from the mother
agreement is reached by the parties’ automatic union to form a local or independent union only
renewal clause. (Art. 264, LC) during the 60-day freedom period immediately
preceding the expiration of the five-year term of
Jurisdictional Preconditions of Collective the CBA;
Bargaining
2. Either party can serve a written notice to
1. Possession of the status of majority terminate or modify agreement at least 60 days
representation of the Ees’ representative; prior to the expiration of the five-year term of
2. Proof of majority representation; and the CBA; and
3. A demand to bargain. (Associated Labor Unions
(ALU) v. Hon. Ferrer-Calleja, G.R No. 77282, 5 3. A PCE may be filed.
May 1989)
60–Day Notice Period (Non-representative
NOTE: An Er’s duty to recognize and bargain aspect)
collectively with a union does not arise until the
union requests the Er to bargain. The freedom period under Arts. 265 & 268 is
different from the other 60-day period mentioned in
Q: When should bargaining begin and when Art. 264. The latter speaks of the right of the parties
should it end? to propose modifications to the existing CBA, as an
exception to the rule that the CBA cannot be
A: It begins when the three (3) jurisdictional modified during its lifetime, within 60 days prior the
preconditions are present. The collective bargaining expiration of its economic/non-economic aspect.
should begin within the 12 months following the This 60-day period does not and cannot refer to the
determination and certification of the Ees’ exclusive representative status of the incumbent union since
bargaining representative. The period is known as the acquisition or loss of representative status is to
certification year. be resolved through CE.
The law encourages expeditious and good-faith Q: How should the CBA be interpreted?
negotiations but fixes no time limit for completion
of the negotiation. The law dictates no deadline. It A: As a contract and the governing law between the
depends upon the will and agreement of the parties, the general rules of statutory construction
negotiating panels. (Azucena, 2016) apply in the interpretation of its provisions
2024 GOLDEN NOTES
(NUWHRAIN-APL-IUF v. Phil Plaza Holdings, G.R. No. 30 Nov. 2021. The earliest day would be 02 Oct.
177524, 23 July 2014) 2021. (UPLC Suggested Answers)
In case of doubt, all labor legislation and labor NOTE: All other provisions of the CBA shall be
contracts should be construed in favor of the safety negotiated not later than three (3) years after its
and decent living of the laborer. (Art. 1702, NCC) execution. The "representation aspect" refers to the
identity and majority status of the union that
All doubts should be resolved in favor of labor. (Art. negotiated the CBA as the exclusive bargaining
4, LC) representative of the appropriate bargaining unit
concerned. "All other provisions" simply refers to
Q: Is the 10-year suspension of the CBA the rest of the CBA, economic as well as non-
unconstitutional and contrary to public policy? economic provisions, except representation. (SMCU-
A: NO. The assailed PAL-PALEA agreement was the PTGWO v. Hon. Confesor, G.R. No. 111262. 19, Sept.
result of voluntary collective bargaining 1996.)
negotiations undertaken in the light of the severe
financial situations faced by the Er. It is a valid d. NON-ECONOMIC PROVISIONS AND
exercise of the freedom to contract. (Rivera v. CONDITIONS
Espiritu, G.R. No. 135547, 23 Jan. 2002)
Registration
Q: On 01 Dec. 2018, GHI Co., an organized
establishment, and Union J, the exclusive Within 30 days from execution of CBA, the parties
bargaining agent therein, executed a five-year thereto shall submit the agreement to the DOLE
collective bargaining agreement (CBA) which, Regional Office where the bargaining union is
after ratification, was registered with the registered or where it principally operates. Multi-Er
Bureau of Labor Relations. collective bargaining agreements shall be filed with
the Bureau.
When can the union ask, at the earliest, for the
renegotiation of all the terms of the CBA, except NOTE: Failure to register the CBA does not make it
its representation aspect? Explain. (2019 BAR) invalid or unenforceable. Once it is duly entered into
and signed by the parties, a CBA becomes effective
A: It can ask for the renegotiation of the terms of the as between the parties whether or not it has been
CBA within sixty (60) days prior to the expiration of certified by the BLR. (Liberty Flour Mills Ees
its economic period, viz., from 02 Oct. 2018 until 30 Association v. Liberty Flour Mills, G.R. Nos. 58768-70,
Nov. 2021. 29 Dec. 1989) However, its non-registration renders
the contract-bar rule inoperative.
According to Art. 265 of the LC, all other provisions
of the CBA shall be renegotiated not later than three Requirements for Registration
(3) years after its execution. Any agreement of such
other provisions of the CBA entered into within six The application for CBA registration shall be
(6) months from the date of expiry of the term of accompanied by the original and two duplicate
such other provisions as fixed in such CBA, shall copies of the following requirements:
retroact to the day immediately following such date.
If any such agreement is entered into beyond six 1. Duly accomplished and notarized Application
months, the parties shall agree on the duration of Form;
retroactivity thereof. In case of a deadlock in the
renegotiation of the CBA, the parties may exercise 2. Original and 2 duplicate signed copies of the
their rights under this Code. CBA which must be certified under oath by the
representatives of the Er/s and labor union/s
Hence, they may submit the demand for concerned;
renegotiation at any time between 02 Oct. 2021 to
2024 GOLDEN NOTES
3. Statement that the CBA was posted in at least Zipper Clause
two (2) conspicuous places in the
establishment/s concerned for at least five (5) It is a stipulation in a CBA indicating that issues that
days before its ratification; and could have been negotiated upon but not contained
in the CBA cannot be raised for negotiation when the
4. Statement that the CBA was ratified by the CBA is already in effect. All matters not included in
majority of the Ees in the bargaining unit of the the agreement shall be deemed to have been raised
Er/s concerned. and disposed of as if covered.
A CBA is not an ordinary contract but one impressed
NOTE: The following documents must be certified with public interest, only provisions embodied in
under oath by the representative of the Er and the the CBA should be so interpreted and complied with.
labor union. No other document shall be required in Where a proposal raised by a contracting party does
the registration of the CBA. not find print in the CBA, it is not a part thereof and
the proponent has no claim whatsoever to its
Q: What is the effect for non-compliance with the implementation under the Zipper Clause. (SMTFM-
requirement of posting? UWP v. NLRC, G.R. No. 113856, 07 Sept. 1998)
A: In one case, the CBA was not posted for at least Effectivity
five days in two conspicuous places in the
establishment before ratification, to enable the The effectivity date depends on whether the CBA is
workers to clearly inform themselves of its the first CBA or a renegotiated CBA:
provisions. Moreover, the CBA submitted to the
MOLE (now SOLE) did not carry the sworn 1. First CBA – Effectivity date depends upon the
statement of the union secretary, attested by the agreement of the parties.
union president, that the CBA had been duly posted
and ratified, as required by Sec. 1, Rule 9, Book V of NOTE: The determining point is the date the
the IRR. These requirements being mandatory, non- parties agreed, not the date they signed.
compliance therewith rendered the said CBA
ineffective. (Associated Trade Unions v. Trajano, G.R. 2. Renegotiated CBA – If within six (6) months
No. L-75321, 20 Jun. 1988) from the expiry date of the old CBA, then the
new CBA starts to take effect on the date
NOTE: In case of denial by the Regional Office, it is following such expiry date. If beyond six (6)
appealable to the Bureau within ten (10) days. In months, the retroaction date will have to be
case of denial by the Bureau, it is appealable to the agreed upon by the parties.
Secretary of Labor and Employment.
NOTE: The date is important particularly in relation
Effectivity of an Arbitral Award to wage increase because a long retroaction period
will mean sizeable back pay to Ees.
CBA arbitral awards granted after six (6) months
from the expiration of the last CBA, shall retroact to CBA arbitral awards granted after six months from
such time agreed upon by both parties. Absent such the expiration of the last CBA shall retroact to such
an agreement, the award shall retroact to the first time agreed upon by the Er and Ees of their union.
day after the six-month period following the Absent such an agreement as to the retroactivity, the
expiration of the last day of CBA. award shall retroact to the first day after the six-
month period following the expiration of the last day
In the absence of a CBA, the Secretary’s of BA should there be one. In the absence of a CBA
determination of the date of retroactivity as part of the Secretary’s determination of the date of
his discretionary powers over arbitral awards shall retroactivity as part of his discretionary powers
control. (Manila Electric Co. v. Quisumbing, G.R. No. over tribunal awards shall control. (Manila Electric
127598, 22 Feb. 2000)
2024 GOLDEN NOTES
Co. v. Quisumbing, G.R. No. 127598, 01 ugust 1, 2000], Examples of matters considered as mandatory
391 PHIL 769-779) subjects of bargaining:
Retroaction should be agreed upon by the parties. If 1. Wages and other types of compensation
no agreement is made to that effect, prospective including merit increases;
application will apply. Art. 265, which leaves to the 2. Working hours and working days, including
parties the determination of retroactivity, refers to work shifts;
negotiation concluded by the party beyond six 3. Vacations and holidays;
months, but it does not restrict the effectivity date of 4. Bonuses;
arbitral awards by the Secretary of Labor. (Azucena, 5. Pensions and retirement plants;
2016) 6. Seniority;
7. Transfer;
Q: Company A and Union B had a 3-year CBA that 8. Lay-offs;
expired on June 12, 1990. Negotiations proved 9. Ee workloads;
futile, so the unresolved issues were referred to 10. Work rules and regulations;
an Arbiter who rendered a decision on 15 Mar. 11. Rent of company houses; and
1992 retroactive to 14 Dec. 1990. Is the Arbiter's 12. Union security arrangements.
decision providing for retroactivity tenable or
not? Why? (2001 BAR) CBA should include the mandatory provisions such
as grievance procedure, “no strike-no lockout”
A: The referral of the unresolved issues of the clause, cooperative scheme, and Labor Management
collective bargaining negotiations to an Arbiter is Council (LMC). (Abad, 2015)
not within the jurisdiction of the Arbiter. But
assuming that the unresolved issues in the CBNs No Duty to Agree Even on Mandatory Subjects
were properly referred to the Arbiter pursuant to
Art. 275 of the Labor Code that states that a The law speaks of a duty to bargain but not of an
Voluntary Arbitrator may hear and decide any labor obligation to agree. The law does not compel
dispute, including bargaining deadlocks, the agreements between Ers and Ees, and neither party
Arbiter's decision providing for retroactivity is is legally obligated to yield even on a mandatory
tenable. Exercising his compulsory arbitration bargaining subject. (Azucena, 2016)
power, the Arbiter could decide the issue of
retroactivity in any way which is not contrary to law, f. FREEDOM PERIOD
morals, good customs, public order or public policy.
Freedom Period
But in the case Manila Electric Co v. Secretary of
Labor Leonardo Quisumbing (G.R. No. 127598, 22 The last sixty (60) days of the 5-year lifetime of a
Feb. 2000), the Supreme Court said that an arbitral CBA immediately prior to its expiration is called the
award should retroact to the first day after the six- “freedom period.” It is denominated as such because
month period following the expiration of the last it is the only time when the law allows the parties to
day of the CBA that was being renegotiated. freely serve a notice to terminate, alter or modify the
existing CBA. It is also the time when the majority
e. MANDATORY PROVISIONS IN A COLLECTIVE status of the bargaining agent may be challenged by
BARGAINING AGREEMENT another union by filing the appropriate petition for
certification election. (Chan, 2019)
For a matter to be subject to mandatory collective
bargaining, it must materially or significantly affect
the terms or conditions of employment.
2024 GOLDEN NOTES
A: YES. Dismissing or prejudicing an Ee for giving
g. UNION SECURITY CLAUSE testimony (regardless of the subject of the
testimony) under Art. 259(f) of the LC.
Union Security Clause
LPs are not only violations of the civil rights of both
It is applied to and comprehends “closed shop,” labor and management but are also criminal
“union shop,” “maintenance of membership” or offenses against the State. (Art. 258, LC)
other forms of agreement which impose upon
employees the obligation to acquire and retain Elements of ULP
membership in the SEBA as a condition sine qua non
for their continued employment. 1. Existence of Er-Ee relationship between the
offender and offended party; and
This allows the parties thereto to enter into an 2. Act is expressly defined in the Code as ULP.
agreement compulsorily requiring membership of
the covered employees in the sole and exclusive NOTE: A showing of prejudice to public interest is
bargaining agent (SEBA) which successfully not a requisite for ULP charges to prosper. (Standard
negotiated the CBA, as a condition for their Chartered Bank Ees Union v. Hon. Confessor, G.R. No.
continued employment (Chan, 2019) 114974, 16 Jun. 2014)
NOTE: Compulsory membership in the SEBA cannot ULP has two aspects, namely:
be enforced are as follows: 1. Civil; and
2. Criminal.
1. In the case of employees who, at the time of the
signing of the CBA, were already members of NOTE: Lawmakers intended acts of ULP to be
another union; or prosecuted in the same manner as criminal offenses
because it is an offense against a public right or
2. Religious objectors (Ibid.) interest.
Q: Is the commission of an unfair labor practice

by an employer subject to criminal
C. UNFAIR LABOR PRACTICES
prosecution?
A: YES. The second paragraph of Art. 258 of the LC

Unfair Labor Practice (ULP)
expressly so provides. The last paragraph of Art. 258
provides that no criminal prosecution for unfair
It means any unfair labor practice as expressly
labor practice may be made without a prior final
defined by the Labor Code. (Art. 219(k), LC)
judgment in an unfair labor practice administrative
case (filed before the LA of the NLRC pursuant to
ULP has a technical meaning. It only refers to acts
Art. 224(a)(1)) of the LC. And even with such final
that violate the right of Ees to self-organization and
judgment in an administrative case, still, the final
the observance of the CBA. Thus, not all unfair acts
judgment would not be binding in the criminal case.
constitute as unfair labor practice. Without the
Neither would such final judgment be considered as
element of self-organization, an act, no matter how
evidence in the criminal case. At best, it would only
unfair, cannot be considered as unfair labor practice.
serve as proof of compliance of the required prior
exhaustion of administrative complaint.
Q: Is there an exception where ULP is committed
even if the act is not a violation of an Ee’s right to
self-organization?
2024 GOLDEN NOTES
Q: What is the condition precedent before Civil Aspect vs. Criminal Aspect of ULP
criminal prosecution of ULP may be made?
CIVIL ASPECT CRIMINAL ASPECT
A: There should be a finality of judgment in a labor Persons liable
case finding that the respondent indeed committed
ULP. Officers and agents of Officers and agents
Er or labor who participated or
NOTE: The judgment in the labor case cannot be organizations authorized the act
used as evidence in the criminal case. It should be Jurisdiction
noted that the evidence required in labor RTC or MTC, as the case
proceedings is only substantial evidence while Labor Arbiter may be. (Concurrent
criminal cases need proof beyond reasonable doubt. jurisdiction)
Thus, the criminal charge needs to be proven
Prescriptive period
independently from the labor case.
One (1) year from One (1) year from
Q: Lazara Corporation (LC) and Lazara accrual of the ULP act accrual of the ULP act
Employees Union (LEU) forged a collective Quantum of proof
bargaining agreement (CBA). During the
freedom period, a certification election was Beyond reasonable
Substantial evidence
conducted where LEU lost to Samahan ng doubt
Manggagawa sa Lazara (SML), a rival union in the
same establishment. SML then sent a letter to LC All ULP Acts Must Be Included in a Single Charge
demanding for renegotiation of the existing CBA.
LC refused to renegotiate the CBA claiming its A charge of ULP must include all acts of ULP.
validity for two more years. SML filed a notice of Splitting the cause of action is not allowed to
strike against LC on the ground of Unfair Labor prevent harassing the Er with subsequent charges.
Practice for the alleged refusal of the latter to
comply with its duty to bargain collectively. Is 1. BY EMPLOYERS
the notice of strike meritorious? Explain briefly. (Art. 259, LC)
(2023 BAR)
The following are the ULP committed by Ers:
A: YES. Refusal to collectively bargain is an unfair
labor practice under Art. 259 of the Labor Code. The
1. Interference, restraint, or coercion;
fact that the certification election was conducted
2. Yellow dog contract;
during the freedom period meant that the 5-year
3. Contracting out of services;
political life of the CBA was about to expire. Hence,
4. Company unionism;
LC’s insistence that it had two (2) more years of life
5. Discrimination for or against union
was baseless since the freedom period is not the last
membership;
60 days of the 3-year economic life of the CBA. This
6. Discrimination because of testimony;
said, its refusal to collectively bargain was
7. Violation of duty to bargain;
unjustifiable. (Kato, 2024)
8. Paid negotiation; and
9. Gross violation of the CBA.
NOTE: The enumeration of ULP under Art. 259 is

not exclusive.
2024 GOLDEN NOTES
Interference, Restraint, or Coercion Expression of opinion by the Er, though innocent in
themselves, was frequently held to be culpable
To interfere with, restrain, or coerce Ees in the because of the circumstances under which they
exercise of their right to self-organization. (Art. were uttered.
259(a), LC)
Prohibiting Organizing Activities is ULP
ULP Can Be Committed Even if Union is Not
Registered It is unlawful to prohibit solicitation of union
membership in the company whether it is working
An Er who interferes with the formation of a labor or non-working time.
union and retaliation against the Ees’ exercise of
their right to Self-Organization is guilty of ULP. Illegal Dismissal May Be Considered as ULP
(Samahan ng mga Manggagawa sa Bandolino-LMLC
v. NLRC, G.R. No. 125195, 17 July 1997) When there is a showing that the illegal dismissal
was dictated by anti-union motives, the same
Q: Is persistent interrogation by an Er to elicit constitutes as ULP. If not, then there is no ULP. The
information about what happened in union proper remedy would be an action for reinstatement
meetings and activities considered as ULP? with backwages and damages.
A: YES, it may be deemed as coercive. In order not to NOTE: The dismissal of an employee by the
become coercive, the Er must: company pursuant to a labor union's demand in
accordance with a union security agreement does
1. Communicate to the Ee the purpose of the not constitute unfair labor practice. (MSMG-UWP v.
questioning; NLRC, G.R. No. 113907, 28 Feb. 2000)
2. Assure the Ee that no reprisal would take place; Lockout or Closure May Amount to ULP
and
The lockout or closure must be for the purpose of
3. The questioning must occur in a context free interfering with an Ees’ exercise of their right. An
from Er hostility to union organization. honest closing of one’s plant is not a violation of the
law.
Test of Interference
NOTE: Proof of Er’s state of mind is often very
Whether the Er has engaged in conduct which it may difficult unless it is expressed. However, it may be
reasonably be said tends to interfere with the free proven by circumstantial evidence.
exercise of Ees’ rights.
Other examples of interference, restraint, or
Direct Evidence of Interference Not Necessary coercion:
Direct evidence is not necessary if there is a 1. Using violence or intimidation to restrain or

reasonable inference that the anti-union conduct of coerce Ees to exercise their right to self-
the Er does have an adverse effect on self- organization.
organization and collective bargaining.
2. Espionage and surveillance of Ees by the Er
Totality of Conduct Doctrine since it is a form of “pressure.”
An Er’s remarks must be evaluated not only based 3. Inducing Ees with economic benefits to restrain
on their implications, but against the background of or coerce them in their exercise of their right to
and in conjunction with collateral circumstances. self-organization.
2024 GOLDEN NOTES
4. Mass layoff of union members by the company Requisites of a Yellow Dog Condition (R-P-P)
pursuant to a subterfuge or a fake reduction
effort when it has been making profits. 1. A Representation by the Ee that he is not a
(Madrigal and Company, Inc. v. Zamora, G.R. No. member of a labor union;
L-48237, 30 Jun. 1987)
2. A Promise by the Ee not to join a labor union;
In Case of Sale in Bad Faith and
When the sale of a business enterprise was attended 3. A Promise by the Ee that, upon, joining a labor
with bad faith, labor contracts, despite being in union, he will quit his employment.
personam, becomes enforceable against the
transferee. The transferee is in the position of tort- Contracting Out
feasor, having been a party likewise responsible for
the damage inflicted on the members of the To contract out services or functions being
aggrieved union and therefore cannot justly escape performed by union members when such will
liability. As successor-in-interest of the vendor, he interfere with, restrain, or coerce Ees in the exercise
becomes responsible for all the rights and of their right to self-organization. (Art. 259(c), LC)
obligations of his predecessor.
Q: Is contracting out per se ULP?
Q: Kim, owner of the factory, called the workers
who are also members of the union to a meeting. A: NO. Contracting out, itself, is not ULP. It is the ill
He requested them to resign from the union and intention that makes it so when it is motivated by a
withdraw their claims filed before the NLRC desire to prevent his Ees from organizing and
years before. The requests were rejected. selecting a collective bargaining representative, get
rid of union men, or escape his statutory duty to
Later, Kim executed a deed purporting to convey bargain collectively with his Ees’ bargaining
the factory to Yu Guat. When the factory representative.
reopened, the members of the union were not
readmitted and those who left the union were If the contracting out is done for a legitimate
allowed to work. The union members filed a business reason such as decline in business,
complaint for ULP against Kim. Decide. inadequacy of equipment, or need to reduce cost, it
is a valid exercise of management prerogative.
A: YES. The sale of the factory was simulated, and a
device resorted merely to get rid of the Ees who NOTE: To be considered as valid outsourcing, it
were members of the union. (Moncada Bijon Factory must be (1) motivated by good faith; and (2) must
v. CIR, G.R. No. L-16037, 29 Apr. 1964) not have been resorted to circumvent the law.
Yellow Dog Contract Contracting Out Restricted in the CBA
To require as a condition of employment that a When a CBA is entered into, the terms of the
person or an Ee shall not join a labor organization or agreement is binding on both parties. The company
shall withdraw from one to which he belongs. (Art. did not have to agree to such a stipulation. Or it
259(b), LC) could have reserved the right to effect a dissolution
and reassignment. It did not do so. (Shell Oil
A Yellow Dog Condition is a promise exacted from Workers’ Union v. Shell Company of the Philippines,
workers as a condition of employment that they are G.R. No. L-28607, 31 May 1971)
not to belong to, or attempts to foster, a union during
their period of employment.
2024 GOLDEN NOTES
Runaway Shop 3. Er encouragement and assistance; and
4. Supervisory assistance.
Refers to business relocation animated by anti-
union animus. It is a plant moved to a new location Discrimination For or Against Union
in order to discriminate against Ees at the old plant Membership
because of their union activities.
To discriminate in regard to wages, hours of work,
Q: Complex Electronics Corporation informed its and other terms and conditions of employment in
Ees that it was closing down its operations since order to encourage or discourage membership in
it was incurring losses and promised to give any labor organization. (Art. 259(e), LC)
notice and retrenchment pay. The Ees asked for
a higher retrenchment pay but the company Discrimination vs. Classification
refused. The machines and equipment were
pulled out from the company premises and were Discrimination is different from classification. For
transferred to the premises of Ionics Circuit, Inc. instance, it is common management practice to
The union of the Ees filed a complaint for ULP classify jobs and grant them varying levels of pay or
against the company alleging that Ionics Circuit benefits package. These are valid differentiations
is a runaway shop since it has the same that recognize differences in job requirements or
President and Board of Directors with Complex contributions. They are not necessarily
Electronics. Is the contention tenable? discrimination classifiable as ULP.
A: NO. The mere fact that one or more corporations Test of Discrimination
are owned or controlled by the same or single
stockholder is not sufficient ground for disregarding Whenever benefits or privileges given to one is not
separate corporate personalities. It is not enough given to the other under similar or identical
reason to pierce the veil of corporate fiction of the conditions when directed to encourage or
corporation. The closure was not motivated by discourage union membership.
union activities of the Ees, but rather by necessity
since it can no longer engage in production. NOTE: Existence of a union security clause is a form
(Complex Electronics Ees Association v. NLRC, G.R. No. of valid discrimination. It is a discrimination
121315, 19 July 1999) favoring unionism.
Company Unionism Discrimination Due to Testimony
To initiate, dominate, assist, or otherwise interfere Dismissing or prejudicing an Ee who is about to give
with the formation or administration of any labor or has given testimony under the Labor Code.
organization, including the giving of financial or
other support to it or its organizers or supporters. NOTE: The subject matter of the testimony is
(Art. 259(d), LC) anything under the Labor Code.
Forms of Company Domination ULP Also Applies to Refusal to Testify
1. Initiation of the company union idea by: The article also applies to refusal to testify because
it is analogous to giving of testimony. (Mabeza v.
a. Outright formation by the Er or his NLRC, G.R. No. 118506, 18 Apr. 1997)
representatives; or
b. Managerially motivated formation of Violation of Duty to Bargain
union;
It refers to acts that violate the duty to bargain
2. Financial support to the union; collectively as prescribed by the Code.
2024 GOLDEN NOTES
Four (4) Forms of ULP in bargaining (F-E-B-G) 5. The union seeks recognition for an
appropriately large unit;
1. Failure or refusal to meet and convene;
2. Evading mandatory subjects of bargaining; 6. The union seeks to represent some persons who
3. Bad faith in bargaining; and are excluded under the LC;
4. Gross violation of the CBA.
7. The rank-and-file includes supervisors;
Failure or Refusal to Meet and Convene
8. The demand for recognition and bargaining is
This occurs when the Er refuses or fails to meet and made within the year following a certification
convene with the majority of his Ees. To bargain in election in which the clear choice was no union,
good faith, an Er must not only meet and confer with and no ad interim significant change has taken
the union which represents his Ees but must also place in the unit; or
recognize the union for the purpose of CB. (Azucena,
2010) 9. The union makes unlawful bargaining demand.
Effect of Refusal of Management to Give Counter- Evading Mandatory Subjects of Bargaining

Proposals to the Union’s Demands
There is no duty to agree even on mandatory
The failure of the Er to submit its counter-proposals subjects. The law speaks of a duty to bargain but not
to the demands of the bargaining union does not, by of an obligation to agree.
itself, constitute refusal to bargain. (Philippine
Marine Radio Officers Association v. CIR, G.R. Nos. L- Voluntary Benefits
10095 & L-10115, 31 Oct. 1957)
Q: In consideration of the impending expiration
However, when the Er refuses to submit an answer of the existing collective bargaining agreement,
or reply to the written bargaining proposals of the which includes a retirement plan, between
certified bargaining union, ULP is committed. Nestle and Union, the latter informed the former
of their intent to open a new collective
NOTE: While the law does not compel the parties to bargaining negotiation for the succeeding years.
reach an agreement, it contemplates that both However, Nestle underscored its position that
parties will approach the negotiation with an open unilateral grants such as the retirement plan
mind and make a reasonable effort to reach a are, by their very nature, not proper subjects of
common ground of agreement. They should the CBA negotiations. The Union argues that the
negotiate in good faith. (Kiok Loy v. NLRC, G.R. No. retirement plan remains to be a CBA item. May
54334, 22 Jan. 1986) the Union demand that an existing voluntary
benefit such as the retirement plan be discussed
Acts Not Deemed Refusal to Bargain and included in the CBA?
1. Adoption of an adamant bargaining position in A: YES. As the benefit was already subject of the
good faith; existing CBA, the members of Union were only
exercising their prerogative to bargain or
2. Refusal to bargain over demands for renegotiate for the improvement of the terms of the
commission of ULP; Retirement Plan just like they would for all the other
economic, as well as non-economic benefits
3. Refusal to bargain during period of illegal previously enjoyed by them. Precisely, the purpose
strike; of collective bargaining is the acquisition or
attainment of the best possible covenants or terms
4. There is no request for bargaining; relating to economic and non-economic benefits
granted by Ers and due the Ees. The Labor Code has
2024 GOLDEN NOTES
imposed as a mutual obligation of both parties, this agreement. It is also called “shadow boxing” or
duty to bargain collectively. (Union of Filipro Ees v. “apparent bargaining.”
Nestle Philippines, G.R. No. 158930-31, 03 Mar. 2008)
It is the act of “going through the motions of
Impasse in Bargaining negotiating” without any legal intent to reach an
agreement. (Standard Chartered Bank v. Confessor,
Where the subject of a dispute is a mandatory G.R. No. 114974, 16 Jun. 2004)
bargaining subject, either party may bargain to an
impasse if he bargains in good faith. Surface Bargaining is a question of intent of the
party concerned and usually, such intent can only be
Where the subject is non-mandatory, a party may inferred from the totality of the challenged party’s
not insist on bargaining to the point of impasse. His conduct both at and away from the bargaining table.
insistence may be construed as evasion of duty to A concrete example is the withholding of the Er of
bargain. the audited financial statement requested by the
union.
Deadlock
NOTE: Blue-sky bargaining and Surface bargaining
It is synonymous with impasse or a standstill which are allowed in the beginning of negotiations. But
presupposes reasonable effort at good faith when during the negotiations, you have not moved a
bargaining but despite noble intentions, does not bit in your position and you impose a “take-it-or-
conclude an agreement between the parties. leave-it” position to the other party, then such
amounts to boulwarism which is already bargaining
Remedies In Case of Deadlock in bad faith.
The parties, during renegotiation, may: Blue Sky Bargaining
1. Call upon the NCMB to intervene for the It is defined as making exaggerated or unreasonable
purpose of conducting conciliation or proposals. It connotes demands from the union
preventive mediation; which the Er has no capacity to give. Whether or not
the union is engaged in blue-sky bargaining is
2. Refer the matter for voluntary arbitration or determined by the evidence presented by the union
compulsory arbitration; or as to its economic demands. Thus, if the union
requires exaggerated or unreasonable economic
3. Declare a strike or lockout upon compliance demands, then it is guilty of ULP. (Standard
with the legal requirements. Chartered Bank v. Confessor, G.R. No. 114974, 16 Jun.
2004)
NOTE: This remedy is a remedy of last resort.
Boulwarism
Bad Faith in Bargaining
It is a violation of good faith in bargaining. It
The following are bad faith in bargaining: includes the failure to execute the CBA.
1. Surface Bargaining;
2. Blue Sky Bargaining; and It is the tactic of making a "take-it-or-leave-it" offer
3. Boulwarism. in a negotiation, with no further concessions or
discussion. It is also known as the “Take-It-or-Leave-
Surface Bargaining It Bargaining.”
It is defined as "going through the motions of

negotiating" without any legal intent to reach an
2024 GOLDEN NOTES
Gross Violation of the CBA Q: ABC Corporation offered, among other
benefits, a ₱l6.00/day wage increase to their Ees.
The allegations in the complaint should show prima To receive the benefits, Ees had to sign a waiver
facie the concurrence of two things, namely: that said that the new CBA shall only be effective
on Jan. 1, 2008. Realizing that the waiver was an
1. Gross violation of the CBA, as opposed to simple unfair labor practice, some members of XYZ
violations of the CBA which are only grievance union refused to sign. XYZ Union and its
matters; and members who refused to sign the waivers filed a
complaint for unfair labor practices against ABC
2. The violation pertains to the economic Corporation. Further, XYZ Union members who
provisions of the CBA. (Silva v. NLRC, G.R. No. did not sign the waiver demanded a wage
110226, June 1997) increase enjoyed by those who signed. The Court
found ABC Corp guilty of unfair labor practice
Paid Negotiation but denied the claim for wage increase as there
was no provision in the existing CBA pertaining
The act of Er of paying negotiation or attorney’s fees to the said increase. XYZ Union appealed
to the union or its officers as part of the settlement alleging that the wage increase was integrated in
of any issue in collective bargaining or any other the salary of those who signed the waivers and
dispute. are currently receiving ₱32.00/day more than
those who did not sign. Should the wage increase
Sweetheart Contract given to the Ees who signed the waiver be
awarded to the Ees who did not?
It is when a labor organization asks for or accepts
negotiations or attorney’s fees from Ers as part of A: YES. Generally, the CBA controls the relationship
the settlement of any issue in CB or any other between the parties. Any benefit not included in it is
dispute. The resulting CBA is considered as a not demandable. However, considering the peculiar
“sweetheart contract,” which is a CBA that does not circumstances in this case, the requested wage
substantially improve the Ees’ wages and benefits increase should be granted. Accordingly, it is illegal
and whose benefits are far below than those to continue denying the petitioners the wage
provided by law. It is an incomplete or inadequate increase that was granted to Ees who signed the
CBA. waivers. To rule otherwise will perpetuate the
discrimination against Ees who did not sign. All the
Gross Violation of the CBA consequences of the unfair labor practice must be
addressed. The grant of the P32.00/day wage
It is the flagrant and/or malicious refusal by a party increase is not an additional benefit outside the CBA
to comply with the economic provisions of the CBA. of 2009. By granting this increase to those who did
NOTE: If the violation of the CBA is not gross, it is not sign, the Court is eliminating the discrimination
not ULP but a mere grievance. against them, which was a result of respondent's
unfair labor practice. (Sonedco Workers Free Labor
Individual Bargaining Considered as ULP Union v. Universal Robina Corporation, G.R. No.
220383, 05 July 2017)
When the Er attempts to negotiate with individual
workers rather than with the certified bargaining
agent, it is considered as ULP. (Insular Life Assurance
Co., Ltd., Ees Assoc.-NATU v. Insular Life Assurance Co.,
Ltd., G.R. No. L-25291, 30 Jan. 1971)
NOTE: There is no legal prohibition for an Ee to

bargain with his Er.
2024 GOLDEN NOTES
2. BY LABOR ORGANIZATIONS Union-Induced Discrimination
(Art. 260, LC)
This pertains to the attempt of the labor
organization to cause an Er to grant advantages to:
Persons Criminally Liable in Case of ULP by
Labor Organization
1. Members over non-members;
2. Members in good standing over suspended or
1. Officers;
expelled members;
2. Members of governing board; and
3. Members of the executive board over more
3. Representatives, agents, members of the labor
senior Ees; or
organization who actually participated,
4. Members of one union over members of
authorized, or ratified the ULP act.
another union.
ULP Committed by Labor Organizations

Arbitrary Use of Union Security Clause
1. Restraint or coercion;
Unions are not entitled to arbitrarily exclude
2. Union-induced discrimination;
qualified applicants for membership, and a closed-
3. Refusal to bargain;
shop provision would not justify the Er in
4. Featherbedding or Make-Work Arrangements;
discharging, or a union in insisting upon the
5. CBA deal with Er; and
discharge of an Ee whom the union thus refuses to
6. Gross violation of CBA.
admit to membership, without any reasonable
ground therefor. (Salunga v. CIR, G.R. No. L-22456, 27
Restraint or Coercion
Sept. 1967)
Interference by a Labor Organization is not ULP. A

A union member may not be expelled from her
labor organization can interfere with Ees’ right to
union, and consequently from her job, for personal
self-organization as long as it does not amount to
or impetuous reasons or for causes foreign to the
restraint or coercion. Interfering in the exercise of
closed-shop agreement and in a manner
right to organize is itself a function of self-
characterized by arbitrariness and whimsicality.
organizing. (Azucena, 2016)
(Manila Mandarin Ees Union v. NLRC, G.R. No. 76989,
29 Sept. 1987)
NOTE: Under the first ULP committed by an Er, there
is Interference, Restraint, or Coercion. However,
Not Disloyalty to Ask Help from Another Union
under the first ULP committed by a labor
organization, the word “interference” is left out,
The mere act of seeking help from another union
leaving only “restraint or coercion.” The omission is
cannot constitute disloyalty. It is an act of self-
deliberate. (Azucena, 2016)
preservation of workers who, driven to desperation,
found shelter in another union who took the cudgels
Labor Organization Cannot Coerce Members to
for them. (Rance v. NLRC, G.R. No. L-68147, 30 Jun.
Participate in Strike
1988)
A labor organization violates the law when it

Q: Noya was employed by Slord. The
restrains or coerces an Ee in the exercise of his right
employment was governed by a CBA effective
to refuse to participate in or recognize a strike.
until 15 Apr. 2014. The CBA contained a closed-
shop agreement. Sometime in 2013, Noya tried
to form a new union which was eventually
formed and registered on 20 Feb. 2014. NLM –
Katipunan, the exclusive bargaining
representative, on the strength of the
testimonies and affidavit signed by the other
2024 GOLDEN NOTES
members that Noya was actively seeking requirements of notice and hearing, the validity of
signature to form a new union, terminated the the dismissal shall be upheld, but the Er shall be
membership of Noya after due proceeding. ordered to pay nominal damages. (Slord
Development Corp v. Noya, G.R. No. 232687, 04 Feb.
Thereafter, NLM – Katipunan requested Slord to 2019)
terminate Noya’s employment. After notifying
Noya of the decision of NLM – Katipunan and Refusal to Bargain
showing him the documents, Slord terminated
the employment of Noya. Could Noya be It is the act of a union in refusing or violating its duty
dismissed on the ground he solicited signature to bargain collectively by entering negotiations with
to form a new union? a fixed purpose of not reaching an agreement or
signing a contract.
A: YES. Case law recognizes that dismissal from
employment due to the enforcement of the union NOTE: It is intended to ensure that unions approach
security clause in the CBA is another just cause for the bargaining table with the same attitude of
termination of employment. willingness to agree as the law requires of
management.
To validly terminate the employment of an Ee
through the enforcement of the union-security Featherbedding Or Make-Work Arrangements
clause, the following requisites must concur:
To cause or attempt to cause an Er to pay or deliver
1. The union security clause is applicable; or agree to pay or deliver any money or other things
for value, in the nature of an exaction, for services
2. The union is requesting for the enforcement of which are not performed or not to be performed,
the union security provision in the CBA; and including the demand for fee for union negotiations.
(Art. 260 (d), LC)
3. There is sufficient evidence to support the
decision of the union to expel the Ee from the Featherbedding
union.
refers to an Ee practice which creates or spreads
All requisites are present. In Tanduay Distillery employment by unnecessarily maintaining or
Labor Union v. NLRC (G.R. Nos. 75037 & 75055 30 Apr. increasing the number of Ees used, or the amount of
1987), the Court ruled that the organization by time consumed, to work on a particular job.
union members of a rival union outside the freedom
period, without first terminating their membership NOTE: The practices are found to be economically
in the union and without the knowledge of the wasteful and without any legitimate Ee justification.
officers of the latter union, is considered an act of (Azucena, 2016)
disloyalty, for which the union members may be
sanctioned. This requirement ceases to be binding CBA Deal with Employer
only during the 60-day freedom period immediately
preceding the expiration of the CBA. However, the Er Accepting for or accepting some “fee” from the Er as
must furnish the Ee with two (2) written notices part of CBA or dispute settlement.
before the termination of employment can be
effected: (1) the first apprises the Ee of the Gross Violation of the CBA
particular acts or omissions for which his dismissal
is sought; and (2) the second informs the Ee of the It is the flagrant and/or malicious refusal by a party
Er's decision to dismiss him. Slord failed to do so. to comply with the economic provisions of the CBA.
It is settled that in cases involving dismissals for just NOTE: If the violation of the CBA is not gross, it is
cause but without observance of the twin not ULP but a mere grievance.
2024 GOLDEN NOTES
Reliefs available in ULP cases (Dis-Cease-O-A)
D. PEACEFUL CONCERTED ACTIVITIES
1. Cease and Desist Order
2. Affirmative Order
3. Order to Bargain; or Mandated CBA
Forms of Concerted Activities
4. Disestablishment of the Company-Dominated
Union
1. Legal Strike – One called for a valid purpose
and conducted through means allowed by law.
Cease and Desist Order
2. Illegal Strike – One staged for a purpose not

A prohibitive order requiring a person found to be
recognized by law, or if for a valid purpose,
committing ULP to cease and desist from such ULP
conducted through means not sanctioned by
and take affirmative action that will effectuate the
law.
policies of the law, including, but not limited to
reinstatement with or without back pay and
3. Economic Strike/Bargaining Strike – One
including rights of Ees prior to dismissal, including
staged by workers to force wage or other
seniority.
economic concessions from the Er which he is
not required by law to grant.
Affirmative Order
(Consolidated Labor Association of the Phil. v.
Marsman, G.R. No. L-17038, 31 July 1964)
It is an order directing either the reinstatement of
the discharged Ee without prejudice to their rights
4. ULP Strike – One called to protest the Er’s acts
or, if new laborers have been hired, the dismissal of
of unfair practice enumerated in Art. 259 of the
the hired laborers to make room for the returning
LC, as amended, including gross violation of the
Ee.
CBA and union busting.
Order to Bargain
5. Slow Down Strike – An industrial action in
which Ees perform their duties but seek to
It is an order to compel the respondent to bargain
reduce productivity or efficiency in their
with the bargaining agent. It can also be an
performance of these duties.
imposition of a collective bargaining contract upon
an Er who refuses to bargain with the union of its
6. Mass Leaves – An action wherein the Ees
Ees which is known as “Mandated CBA.”
simultaneously filed leaves of absence based on
various reasons such as, inter alia, vacation and
Disestablishment
sick leaves.
It is an order directing the Er to withdraw all

7. Wild-Cat Strike – A strike action undertaken by
recognition from the dominated labor union and to
Ees without filing the required notice of strike
disestablish the same.
and without the majority approval of the total
union membership.
ULP case is not subject to compromise
8. Sit Down Strike – A strike during which

In view of the public interest involved, they are not
workers occupy their place of employment and
subject to compromise. (E.G. Gochangco Workers
refuse to work or allow others to work until
Union v. NLRC, G.R. Nos. L-67158-62, 30 May 1988)
such time that the strike is settled.
9. Overtime Boycott – Involves the act of workers

in refusing to render overtime work in violation
2024 GOLDEN NOTES
of the CBA resorted to as it means to coerce the has been fulfilled and other voluntary modes of
Er to yield to their demands. dispute settlement have been tried and exhausted.
10. Boycott of Products – Involves the concerted Right to Strike or Lockout Not Absolute
refusal to patronize an Er’s goods and services
and to persuade others to a like refusal. The exercise of these rights is subject to reasonable
restrictions pursuant to the police power of the
11. Walk-out Strike – A form of strike where the State. It has been held that the right to strike,
Ees leave their workplace and establish because of the more serious impact upon the public
themselves outside the plant and refuse access interest, is more vulnerable to regulation than the
to the owners and other Ees who want to work. right to organize and select representatives for
purposes of CB. (NFSW v. Ovejera, et al. G.R. No. L-
12. Primary Strike – Directed against the Er 59743, 31 May 1982)
because of a labor dispute with him.
1. STRIKES, PICKETING, AND LOCKOUTS
13. Secondary Strike – Directed against the Er with
(Art. 278, LC; Rule XIII, Book V, Omnibus Rules
primary labor dispute connected by-product or
Implementing the Labor Code)
employment with the Er of the secondary
strikers.
Strike
14. Sympathy Strike – A strike staged to make
It means any temporary stoppage of work by the
common cause with strikers in other
establishments, without any dispute between concerted action of Ees as a result of an industrial or
the strikers and their Er. In a sympathy strike, labor dispute. (Sec. 1(uu), Rule I, Book V, IRR)
there is no connection of product or
employment with the primary labor dispute. The right to strike, while constitutionally
This distinguishes a secondary strike and a recognized, is not without legal constrictions. Art.
279(a) of the LC, as amended, provides that no strike
sympathy strike.
or lockout shall be declared after assumption of
jurisdiction by the President or the SOLE or after
15. General Strike – Directed against all the Ers,
certification or submission of the dispute to
participated in by the workmen, irrespective of
the Ers for whom they are working. compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for
the strike or lockout. The court has consistently
16. Particular Strike – Directed solely against the
strikers’ Er. ruled that once the SOLE assumes jurisdiction over
a labor dispute, such jurisdiction should not be
interfered with by the application of the coercive
NOTE: For purposes of determining whether or not
a certain activity is “concerted,” it is essential that processes of a strike or lockout. A strike that is
undertaken despite the issuance by the Secretary of
the activities of the Ee should be collective in nature.
Labor of an assumption order and/or certification is
Express Statutory Recognition of the Workers’ a prohibited activity and thus illegal. (Solidbank
Corporation v. Gamier/Solid Bank Union, G.R. No.
Right to Strike and the Er’s Right to Lockout
159460, 15 Nov. 2010)
The right to strike is a constitutional and legal right
NOTE: The fact that the conventional term “strike”
of the workers in the same manner that the Ers have
the inherent and statutory right to lockout, all was not used by the striking Ees to describe their
common course of action is inconsequential, since
within the context of labor relations and collective
the substance of the situation and not its
bargaining. It is a means of last resort and
presupposes that the duty to bargain in good faith appearance will be deemed controlling. (Toyota
2024 GOLDEN NOTES
Motor Phils. Corp. Workers Association v. NLRC, G.R. Grounds for a Valid Strike
Nos. 158786 & 158789, 19 Oct. 2007)
The law recognizes two (2) grounds for the valid
Purpose of a Strike exercise of the right to strike or lockout, namely:
A strike is a coercive measure resorted to by 1. Collective Bargaining Deadlock (CBD); and

laborers to enforce their demands. The idea behind 2. Unfair Labor Practices (ULP) - Includes
a strike is that a company engaged in a profitable flagrant and/or malicious refusal to comply
business cannot afford to have its production or with the economic provisions of the CBA.
activities interrupted, much less, paralyzed. (Phil.
Can Co. v. CIR, G.R. No. L-3021, 13 July 1950) NOTE: If the violation of the CBA is gross, it will
amount to unfair labor practice, which is a ground
“Striking Employee” Still an Employee for a valid strike. If the violation is not gross, it will
just be a grievance falling under the grievance
During a strike the Er-Ee relationship is not machinery of the CBA.
terminated but merely suspended as the work
stoppage is not permanent but only temporary. Summarized Requirements of a Valid Strike
Thus, a striking Ee is still an Ee. However, the effects
of employment are suspended, hence a striking Ee, The requirements for a valid strike are as follows:
as a rule, is not entitled to his wage during the strike.
(Azucena, 2016) 1. Filing of Notice of Strike;
2. Observance of the cooling-off period:
Elements of a Strike
a. 30 days for bargaining deadlock, and
1. Existence of established relationship between b. 15 days for ULP;
the strikers and the person or persons against
whom the strike is called; 3. Notice of strike vote meeting within 24 hours
before the intended vote;
2. Existence of an Er-Ee relationship; 4. Strike vote;
5. Report of the strike vote; and
3. Existence of a labor dispute and the utilization 6. Observance of the 7-day waiting period.
by labor of the weapon of concerted refusal to
work as a means of persuading, or coercing The legal requirements of a valid strike are as
compliance with the working men’s demands; follows:
4. Employment relation is deemed to continue 1. No labor union may strike on grounds involving
although in a state of belligerent suspension; inter-union and intra-union disputes.
5. Temporary work stoppage; 2. In cases of bargaining deadlocks, the duly

certified or recognized bargaining agent may
6. Work stoppage is done through concerted file a notice of strike with the Department of
action; and Labor and Employment at least 30 days before
the intended date thereof. In cases of unfair
7. The striking group is a legitimate labor labor practice, the period of notice shall be 15
organization; in case of a bargaining deadlock, it days and in the absence of a duly certified or
must be the Ees’ sole bargaining representative. recognized bargaining agent, the notice of
strike may be filed by any legitimate labor
organization in behalf of its members.
3. However, in case of dismissal from employment
2024 GOLDEN NOTES
of union officers duly elected in accordance establishment may declare a strike but only on
with the union constitution and by-laws, which grounds of ULP. (Sec. 6, Rule XXII, Book V, IRR as
may constitute union busting where the amended by D.O. 40-03)
existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union NOTE: A strike conducted by a minority union is
may take action immediately. patently illegal because no labor dispute which will
justify the conduct of a strike may exist between the
4. A decision to declare a strike must be approved Er and a minority union. (United Restaurors v. Torres,
by a majority of the total union membership in et al., G.R. No. L-24993, 18 Dec. 1968)
the bargaining unit concerned, obtained by
secret ballot in meetings or referenda called for Grievance
that purpose.
Any question by either the Er or the union regarding
5. In every case, the union shall furnish the the interpretation or application of the CBA or
Department of Labor and Employment the company personnel policies or any claim by either
voting at least seven (7) days before the party that the other party is violating any provision
intended strike subject to the cooling-off period of the CBA, or company personnel policies.
herein provided.
Grievance Machinery
6. No labor organization shall declare a strike
without first having bargained collectively; The mechanism for the adjustment and resolution of
without first having filed the notice required or grievances arising from the interpretation or
without the necessary strike vote first having implementation of a CBA and those arising from the
been obtained and reported to the Department interpretation or enforcement of company
of Labor and Employment. personnel policies. It is part of the continuing
process of CB.
7. No strike shall be declared after assumption of
jurisdiction by the President or the Secretary or NOTE: The Court has ruled that the grievance
after certification or submission of the dispute procedure provided in the CBA should be adhered to
to compulsory or voluntary arbitration or by the parties. Refusal or failure to do so is a ULP
during the pendency of cases involving the because the grievance procedure is part of the
same grounds for the strike. continuous process of collective bargaining.
(Azucena, 2016)
8. In a strike, no person engaged in picketing
should commit any act of violence, coercion or Q: What is the effect of absence of a grievance
intimidation or obstruct the free ingress to or machinery under the CBA, being considered as a
egress from the employer’s premises for lawful mandatory provision of the CBA?
purposes, or obstruct public thoroughfares.
A: The CBA cannot be registered with the DOLE
Declaration of a Strike Regional Office.
The following may declare a strike or lockout: NOTE: Despite non-registration, the CBA will not be
rendered invalid or unenforceable as between
1. Any certified or duly recognized bargaining parties, but the contract bar rule will be inoperative.
representative may declare a strike in cases of
bargaining deadlocks and ULP. The Er may Grievance Procedure
declare a lockout in the same cases.
The internal rules of procedure established by the
2. In the absence of a certified or duly recognized parties in their CBA with voluntary arbitration as
bargaining representative, any LLO in the the terminal step, which are intended to resolve all
2024 GOLDEN NOTES
issues arising from the implementation and cooling-off period shall not apply and the union
interpretation of their CBA. may act immediately after the strike vote is
conducted and the result thereof submitted to
In the absence of applicable provisions in the CBA, a the appropriate Regional Branch of the NCMB
grievance committee shall be created within ten with due observance with the seven (7) day
(10) days from signing of the CBA. strike ban.
Regarding procedure in handling grievances, in the 2. At least 30 days before the intended date
absence of a specific provision in the CBA or existing thereof if the issues involve bargaining
company practice prescribing for the procedures in deadlock.
handling grievance, the following shall apply:
Those Who May File Notice of Strike
1. An Ee shall present his grievance or complaint,
orally or in writing to the shop steward. Only an LLO can legally hold a strike. (Bukluran ng
Manggagawa sa Clothman Knitting v. CA, G.R. No.
2. If the grievance is valid, the shop steward shall 158158, 17 Jan. 2005)
immediately bring the complaint to the Er’s
immediate supervisor. At this level, parties shall 1. In establishments with certified bargaining
exert efforts to settle the grievance. agent
3. If no settlement is reached, the grievance shall a. Any certified or duly recognized bargaining
be referred to the grievance committee which representative may file a notice or declare a
shall have 10 days to decide the case. (Sec. 2, D.O. strike in cases of ULP; and
No. 40-03)
b. If the reason for the intended strike is
Cases Falling Under the Jurisdiction of the bargaining deadlock, only the bargaining
Grievance Machinery union has the legal right to file a notice of
strike.
Any grievance arising from:
NOTE: The Er may file a notice or declare
1. The interpretation or implementation of the lockout or request for preventive mediation in
CBA; and the same cases.
2. The interpretation or enforcement of company
personnel policies. 2. In establishments with no certified
bargaining agent - Any LLO in the
Filing a Notice of Strike establishment may file a notice, request
preventive mediation, or declare a strike but
It should be filed with the DOLE, specifically the only on grounds of ULP.
Regional Branch of the NCMB, copy furnished the Er.
NOTE: A union, instead of filing a notice of
Time to File strike, may request NCMB to do preventive
mediation, but the union must be the certified
1. At least 15 days before the intended strike or or duly recognized bargaining agent. (Insular
lockout if the issues raised are ULP. Hotel Ees Union-NFL v. Waterfront Insular Hotel
Davao, G.R. No. 174040-41, 22 Sept. 2010)
NOTE: In case of union busting where the
existence of the union is threatened because of
the dismissal from employment of union
officers duly elected in accordance with the
union constitution and by-laws, the 15-day
2024 GOLDEN NOTES
Contents of Notice of Strike their disputes in a peaceful manner before staging a
strike or lockout. The principles of improved offer
1. Name and addresses of Er; and reduced offer balloting apply during the
2. Union involved; cooling-off period.
3. Nature of the industry to which the Er belongs;
4. Number of union members; NOTE: During the said period, the NCMB-DOLE is
5. Workers in the bargaining unit; directed to exert all efforts at the mediation and
6. Other relevant dates; conciliation to affect a voluntary settlement during
7. In case of bargaining deadlocks, unresolved the cooling-off period. The cooling-off period is
issues, written proposals of the union, counter- designed to afford the parties the opportunity to
proposals of the Er and proof of request for amicably resolve the dispute with the assistance of
conference to settle differences; and the NCMB Conciliator/Mediator.
8. In case of ULP, the acts complained of and the
efforts taken to resolve the dispute. Cooling-off Periods Provided by Law
NOTE: NCMB shall inform the concerned party in 1. In cases of CBD, the cooling-off period is 30
case notice does not conform to the requirements. days;
2. In cases of ULP, the period shall be 15 days.
Q: Adarna Manufacturing Company (AMC) and
Adarna Employees Union (AEU) entered into NOTE: In the case of union busting, as defined in Art.
collective bargaining negotiations but reached 278(c), the cooling-off period need not be observed.
an impasse. AEU then filed a notice of strike
before the National Conciliation and Mediation Start of Cooling-off Period
Board, which immediately conducted
conciliation meetings to avert the strike. Fifteen The start of the cooling-off period should be
days after the filing of the notice, and despite the reckoned not on the date the union or Er prepared
conciliation proceedings, AEU staged a strike the notice of strike or lockout but from the time the
with the participation of 50% of its members. Is notice of strike or lockout is filed with the NCMB, a
the strike legal? Briefly explain. (2023 BAR) copy of said notice having been served on the other
party concerned.
A: NO. The strike is not legal. It is understood that The mere filing of the notice with NCMB, without
when the NCMB summoned the parties to proof of valid service thereof to the other party
conciliation proceedings, its notice to that end concerned, shall not trigger the running of the
converted the union’s notice of strike to preventive cooling-off period.
mediation. The legal effect of such conversion was
the dropping of the union’s pre-strike notice from Notice of Strike Vote Meeting to NCMB Within 24
the roll of strike notices. Therefore, if minded to Hours Before the Intended Vote
pursue the strike, it should have served a strike
notice anew. The union shall furnish the regional branch of the
NCMB the notice of the meeting for the strike vote at
Therefore, AEU’s non-compliance with the least 24 hours before the intended vote.
prescribed pre-termination procedure in the form of
omitting to serve a new notice of strike rendered its Strike Vote
strike illegal (Procedure Test). (Kato, 2024)
A strike must be approved by a majority vote of the
Observance of the Cooling-off Period members of the union and a lockout must be
approved by a majority vote of the members of the
The Cooling-off Period is the period given by the Board of Directors of the Corporation or Association
NCMB to mediate and conciliate the parties. It is the or of the partners in a partnership, obtained by a
span of time allotted by law for the parties to settle secret ballot in a meeting called for that purpose.
2024 GOLDEN NOTES
Purpose of Strike Vote
Strike Vote Report
To ensure that the decision to strike broadly rests
with the majority of the union members in general, The result of the strike vote should be reported to
and not with a mere minority, at the same time, to the NCMB at least seven (7) days before the
discourage wildcat strikes, union bossism, and even intended strike subject to the cooling-off period.
corruption. (No. 07, Primer on Strike, Picketing and
Lockout) A strike staged without the submission of the result
of the strike-vote is illegal. (Samahan ng
Participation of the NCMB in the Taking of Strike Manggagawa sa Moldex Products v. NLRC, G.R. No.
Vote or Lockout Vote 119467, 01 Feb. 2000)
The Regional Branch of the NCMB may, at its own Waiting period vs. Cooling-off period
initiative or upon request of any affected party,
supervise the conduct of the secret balloting. The COOLING-OFF
WAITING PERIOD
union / Er must give notice at least 24 hours prior PERIOD
to the conduct of the voting to give the NCMB
Period counted from
sufficient time to decide if it will supervise the
Period reckoned from the time of the filing of
voting and in the event it does, to prepare.
the time the strike vote the notice of strike or
report is submitted to lockout up to the
Seven (7)-Day Waiting Period or Strike Ban
the NCMB, DOLE. intended or actual
staging thereof.
The seven (7)–day waiting period is intended to give
the DOLE an opportunity to verify whether the The requirement on
projected strike really carries the imprimatur of the the 7-day waiting
majority of the union members in addition to the period or strike ban,
cooling-off period before the actual strike. together with the In case of union-
requirement on the busting, the law allows
NOTE: Failure to comply with the aforesaid conduct of strike vote the complete disregard
requirements makes the strike illegal. Consequently, and submission of the of the cooling-off
the officers of the union who participated therein result thereof to the period.
are deemed to have lost their employment status. NCMB, should still be
(Bukluran ng Manggagawa sa Clothman Knitting, complied with in case
etc. v. CA, et al., G.R. No. 158158, 17 Jan. 2005) of union-busting.
Cooling-off and waiting period may be

Effect of the 7-day waiting period if the vote
done simultaneously.
balloting is taken within the cooling-off period
The 7–day requirement shall be counted from the NOTE: If the dispute remains unsettled after the
day following the expiration of the cooling-off lapse of the cooling-off period and the seven-day
period. (No. 06 Primer on Strike, Picketing and waiting period, the labor union may strike.
Lockout)
Q: Is the Strike Vote still necessary in case of

union-busting?
A: YES. The time requirement of 15 days for the

filing of the Notice of Strike shall be dispensed with
but the strike vote requirement, being mandatory in
character, shall “in every case” be complied with.
2024 GOLDEN NOTES
Legal Strike vs. Illegal Strike procedural steps for a lawful strike. (Grand
Boulevard Hotel v. Dacanay, G.R. No. 153665, 18 July
LEGAL STRIKE ILLEGAL STRIKE 2003)
One staged for a
purpose not It is not enough that the union believed that the Er
One called for a valid
recognized by law, or if committed acts of ULP when the circumstances
purpose and
for a valid purpose, clearly negate even prima facie showing to sustain
conducted through
conducted through such belief. (National Union of Workers in Hotels,
means allowed by law.
means not sanctioned Restaurants and Allied Industries v. NLRC, G.R. No.
by law. 122561, 06 Mar. 1998)
Tests in Determining the Legality of Strike Employees Who Staged an Illegal Strike are Not
Entitled to Backwages
The following must concur:
Contemplating two causes for the dismissal of an Ee
1. Purpose test – The strike must be due to either – (a) unlawful lockout, and (b) participation in an
bargaining deadlock and/or the ULP. illegal strike – Art. 279(a) authorizes the award of
full backwages only when the termination of
2. Compliance with the procedural and employment is a consequence of an unlawful
substantive requirements of the law. lockout.
3. Means employed test – It states that a strike As a general rule, backwages are granted to
may be legal at its inception but eventually be indemnify a dismissed Ee for his loss of earnings
declared illegal if the strike is accompanied by during the whole period that he is out of his job.
violence which is widespread, pervasive, and Considering that an illegally dismissed Ee is not
adopted as a matter of policy and not mere deemed to have left his employment, he is entitled
violence which is sporadic and which normally to all the rights and privileges that accrue to him
occurs in a strike area. from the employment. That backwages are not
granted to Ees participating in an illegal strike
Good Faith Strike No Longer a Valid Defense simply accords with the reality that they do not
render work for the Er during the period of the
A strike may be considered legal when the union illegal strike under the principle of a fair day’s wage
believed that the respondent company committed for a fair day’s labor.
unfair labor acts and the circumstances warranted
such belief in good faith although subsequently such With respect to backwages, the principle of “fair
allegation of unfair labor practices is found out as day’s wage for a fair day’s labor” remains as the
not true. (PICEWO-FFW v. People’s Industrial and basic factor in determining the award thereof. If
Commercial Corp., G.R. No. L-37687, 15 Mar. 1982) there is no work performed by the Ee, there can be
no wage or pay unless, of course, the laborer was
However, with the enactment of R.A. No. 6715 which able, willing, and ready to work but was illegally
took effect on 21 Mar. 1989, the rule now is that such locked out, suspended, dismissed or otherwise
requirements as the filing of a notice of strike, strike illegally prevented from working. However, for this
vote, and notice given to the DOLE are mandatory in exception to apply, it is required that the strike be
nature. legal. (Olisa v. Escario, G.R. No. 160302, 27 Sept. 2010)
Thus, even if the union acted in good faith in the

belief that the company was committing an unfair
labor practice, if no notice of strike and a strike vote
were conducted, the said strike is illegal. Claim of
good faith is not a valid excuse to dispense with the
2024 GOLDEN NOTES
Different Type of Strikes
Work stoppages of
workers of one
REASON FOR ITS company to exert
DEFINITION
ILLEGALITY pressure on their Er so
Sit down Strike that the latter will in There is no labor
turn bring pressure dispute involved.
Characterized by a upon the Er of another
temporary work company with whom
Amounts to a criminal
stoppage of workers another union has a
act because of the Ees
who seize or occupy labor dispute.
trespass on the
property of the Er or
premises of the Er. General Strike (Cause-Oriented Strike)
refuse to vacate the
premises of the Er.
A type of political
Wildcat Strike sympathetic strike and
It fails to comply with therefore there is
A work stoppage that It is a political rally.
certain requirements neither a bargaining
violates the labor
of the law, to wit: deadlock nor any ULP.
contract and is not
notice of strike, vote, (e.g., Welga ng bayan)
authorized by the
and report on strike
union membership. Quickie Strike
vote.
Slowdown Strike Brief and
Failure to comply with
Ees work on their own unannounced
Strike on an notice requirements
terms; while the Ees temporary work
installment plan. An and etc.
continue to work and stoppage.
activity by which
remain in their
workers, without
positions and accept Prohibited Acts During a Strike
complete stoppage of
wages paid to them,
work, retard
they, at the same time, 1. The term “illegal acts” under Art. 279(a) may
production or their
select what part of encompass several acts that violate existing
performance of duties
their allotted tasks labor or criminal laws, such as:
and functions to
they care to perform
compel management
on their own volition a. Any act of violence, coercion or
to grant their
or refuse openly or intimidation, or obstruct the free ingress to
demands.
secretly. or egress from the Er’s premises for lawful
Sympathetic Strike purposes or obstruct public thoroughfares.
(Art. 279(e), LC)
Work stoppages of
workers of one
b. Commission of crimes and other unlawful
company to make There is no labor
acts in carrying out the strike; and
common cause with dispute between the
other strikers or other workers who are
c. Violation of any order, prohibition, or
companies without joining the strikers
injunction issued by the SOLE or NLRC in
demands or and the latter’s Er.
connection with the assumption of
grievances of their
jurisdiction or certification order under
own against the Er.
Art. 278(g) of the LC.
Secondary Strike
2024 GOLDEN NOTES
2. No Er shall employ any strike-breaker that shall in the termination of all union officers who
interfere with any peaceful picketing by Ees knowingly participated in the illegal strike.
during any labor controversy. (Art. 279, LC) Unlike ordinary members, it is not required, for
purposes of termination, that the officers
3. No public official or Ee, including officers and should commit an illegal act during the strike.
personnel of the Armed Forces of the However, absent any showing that the Ees are
Philippines, or armed person, shall bring in, union officers, they cannot be dismissed solely
introduce, or escort in any manner, any on the illegality of the strike. Further, the fact
individual who seeks to replace strikers in that they are union officers is not sufficient – it
entering or leaving the premises of a strike area, should be proven that they participated.
or work in place of the strikers. (Art. 279(d), LC)
To illustrate how the “knowing participation”
The involvement of the police during strikes, of union officers may be ascertained, the
lockouts, or labor disputes in general shall be following are considered:
limited to the maintenance of the peace and
order, enforcement of laws and legal orders of a. Their persistence in holding picketing
duly constituted authorities, and the activities despite the declaration by the
performance of specific functions as may be NCMB that their union was not duly
provided by law. registered as a legitimate labor
organization and notwithstanding the
Requisites for Police letter from the federation’s legal counsel
informing them that their acts constituted
1. Should always be in uniform with proper name disloyalty to the national federation; and
cloth;
b. Their filing of notice of strike and
2. Shall observe strict neutrality in dealing with conducting a strike vote even though their
both parties. They shall not bring in, introduce, union has no legal personality to negotiate
or escort any individual who seeks to replace with their Er for collective bargaining
the strikers; purposes. (Abaria v. NLRC, G.R. No. 154113,
07 Dec. 2011)
3. Shall not be stationed in the
picket/confrontation line; and 2. Ordinary union members – The mere finding
or declaration of illegality of a strike will not
4. Shall maintain themselves outside a 50-meter result in termination of ordinary union
radius from the picket/confrontation or in such members. For an ordinary union member to
public thoroughfare for the purpose of insuring suffer termination, it must be shown by clear
free flow of traffic. evidence that he has committed illegal acts
during the strike.
Participation in Lawful Strike
Reason for the Distinction
Mere participation of a worker in a lawful strike
shall not constitute sufficient ground for Union officers have the duty to guide their members
termination of his employment, even if a to respect the law. If instead of doing so, the officers
replacement had been hired by the Er during such urged the members to violate the law, their
lawful strike. (Art. 279, LC) dismissal from the service is just a penalty for their
unlawful act. Their responsibility, as main players in
Liability for Participation in Illegal Strike an illegal strike, is greater than that of an ordinary
union member’s and, therefore, limiting the penalty
1. Union officers – The mere finding or of dismissal only to the former for their
declaration of illegality of the strike will result participation in an illegal strike is in order.
2024 GOLDEN NOTES
Q: The Ees of Arabella’s Bakeshop formed a a) Were the strikes staged by the union
union called as AB Union and was certified by members illegal?
the DOLE as a legitimate labor organization. On
19 Feb. 2022, members of the union, headed by A: YES. In a strike grounded on unfair labor practice,
its president, Arturo Lopez, staged a sit-down the following are the requirements: (1) the strike
strike at Arabella’s Bakeshop allegedly because may be declared by the duly certified bargaining
of Arabella’s Bakeshop officers who are agent or legitimate labor organization; (2) the
interfering in their union activities and for conduct of the strike vote in accordance with the
threatening to terminate union members from notice and reportorial requirements to the NCMB
employment. and subject to the seven (7)-day waiting period; and
(3) notice of strike filed with the NCMB and copy
A Notice of Strike was made to the NCMB on the furnished to the Er, subject to the 15-day cooling-off
same day. Due to this, Arabella’s Bakeshop period.
issued a memorandum ordering the preventive
suspension of striking union members and to In cases of union busting, the 15-day cooling-off
explain within 24 hours from notice their period shall not apply. The union did not file the
actions. However, said union members failed to requisite Notice of Strike and failed to observe the
comply hence were dismissed. cooling-off period. To legitimize the strike on 19 Feb.
2022, the union filed a Notice of Strike on the same
Another strike was staged by the union day. This cannot be considered as compliance with
members on 05 Mar. 2022 to which Arabella’s the requirement, as the cooling-off period is
Bakeshop presented evidence of prohibited acts mandatory. As to the second strike, it was illegal
conducted by the union members such as violent because prohibited acts were committed by the
and disruptive acts. They prevented ingress and union members against Art. 279 of the Labor Code.
egress of Ees and customers to and from the (Bigg’s Inc. v. Jay Boncacas, G.R. No. 200487, 06 Mar.
company’s premises. They also stopped 2019)
Arabella’s Bakeshop’s vans from making b) Were the union officers and Ees
deliveries by throwing stones at the vans which validly dismissed?
caused injury to the driver as well as damage to
vehicles and to the guardhouse. They shouted at A: YES. The dismissal of union officers was valid, but
customers using megaphones to prevent them the dismissal of Ees who did not commit prohibited
from going to the bakeshop. acts during the strike was invalid. For union
members, what is required is that they knowingly
The strike was later stopped when both parties participated in the commission of illegal acts during
agreed to compulsory arbitration. The union the strike for there to be sufficient ground for
members argued that their second strike was termination of employment. For union officers,
not illegal because they were dismissed prior however, it suffices that they knowingly participated
thereto. Thus, the commission of any prohibited in an illegal strike. (Ibid.)
acts during the second strike cannot be used as
a justification for their illegal dismissal on 19 c) Should backwages be awarded to
Feb. 2022. They prayed for reinstatement, dismissed Ees?
including the union officers, with payment of
backwages. Arabella’s Bakeshop argued that A: NO. Backwages are not granted to dismissed Ees
there was a sit-down strike staged by the union who participated in an illegal strike even if they are
members as it was the Ees who refused to later reinstated. In Escario v. NLRC, the Court held:
perform their respective jobs during the first Conformably with the long-honored principle of a
shift of the day. Also, it argued that they are not fair day’s wage for a fair day’s labor, Ees dismissed
entitled to backwages because the strike that for joining an illegal strike are not entitled to
they conducted was illegal. backwages for the period of the strike even if they
2024 GOLDEN NOTES
are reinstated by virtue of their being merely negotiation and declared a strike without a
members of the striking union who did not commit notice of strike or a vote. AILU members locked
any illegal act during the strike. (Ibid.) in the LB management panel by barricading the
doors and possible exits (including windows and
Liability for Participation in the Commission of fire escapes). LB requested the DOLE to assume
Illegal Acts During a Strike jurisdiction over the dispute and to certify it for
compulsory arbitration.
1. The legality or illegality of a strike is immaterial
as far as liability for commission of illegal acts The SOLE declined to assume jurisdiction,
during the strike is concerned. If the union finding that the dispute was not one that
officer or member commits an illegal act during involved national interest. LB then proceeds to
the strike, be it legal or illegal, his employment terminate all of the members of the bargaining
can be validly terminated. agent on the ground that it was unlawful to: (1)
barricade the management panel in the
2. Liability for illegal acts should be determined on building, and (2) participate in an illegal strike.
an individual basis. For this purpose, the (2015 BAR)
individual identity of the union members who
participated in the commission of illegal acts a) Was the Secretary of Labor correct
may be proven through affidavits and in declining to assume jurisdiction
photographs. over the dispute?
A: YES. The refusal of the Secretary to assume

Q: Can the SOLE restrain the Er from imposing jurisdiction is valid. Art. 263(g) (now Art. 278) of
sanctions against the union officers who the LC leaves it to his sound discretion to determine
knowingly participated in the illegal strike? if national interest is involved. Assumption power is
full and complete. It is also plenary and
A: NO. If the strike is declared illegal, the SOLE discretionary (Philtranco Service Enterprises, Inc. v.
cannot restrain or enjoin the Er from imposing the Philtranco Workers Union-AGLO, G.R. No. 180962, 26
appropriate sanctions against the union officers Feb. 2014). Thus, if in his opinion national interest is
who knowingly participated in the illegal strike and not involved, then the company cannot insist that he
against any striking Ee who committed illegal acts assume jurisdiction.
during the strike. Since the strike is illegal, the Er has
the right to take disciplinary action against the b) Was LB justified in terminating all
union officers who participated in it and against any those who were members of AILU on
member who committed illegal acts during the the two grounds cited?
strike. (PAL v. SOLE, G.R. No. 88210, 23 Jan. 1991)
A: If dismissal is based on illegal strike, the company
Q: The Alliance of Independent Labor Unions has to file a complaint for illegal strike first. Once the
(AILU) is a legitimate labor federation which strike is declared by final judgment to be illegal, it
represents a majority of the appropriate can dismiss the union officers. As to members, their
bargaining unit at the Lumens Brèwery (LB). dismissal must be based on their having committed
While negotiations were ongoing for a renewal illegalities on the occasion of their illegal strike.
of the collective bargaining agreement (CBA),LB Since the company prematurely and
handed down a decision in a disciplinary case indiscriminately dismissed the AILU members then
that was pending which resulted in the their dismissal is illegal.
termination of the AILU's treasurer and two
other members for cause. AILU protested the If dismissal is based on the unlawful acts of
decision, claiming that LB acted in bad faith and barricading to lock the AILU members, LB was
asked that LB reconsider. LB refused to justified in terminating the Ees. Art. 264(a) of the LC
reconsider. AILU then walked out of the authorizes the employer to declare the loss of
2024 GOLDEN NOTES
employment status of “any worker” or union officer
who knowingly participates in the commission of The responsibility for the illegal acts committed
illegal acts during a strike. during the strike must be on an individual and not
on a collective basis. (First City Interlink
Effects on Union Officer vs. Ordinary Worker Transportation Co., Inc. v. Roldan-Confesor, G.R. No.
Resulting from Participation in Illegal Strike or 106316, 05 May 1997)
Illegal Acts during Strike
Q: X was dismissed for joining an illegal strike
UNION OFFICER ORDINARY WORKER but was reinstated because he is only a member
Knowingly participated in illegal strike of the union who did not commit any illegal act.
Is X entitled for backwages for the period of
Cannot be terminated
strike?
NOTE: The LC protects

A: NO. Conformably with the long-honoured
ordinary, rank-and-file
principle of “a fair day’s wage for a fair day’s labor,”
May be declared to union members who
Ees dismissed for joining illegal strike are not
have lost his participated in such a
entitled to backwages for the period of the strike
employment status. strike from losing their
even if they are reinstated by virtue of their being
jobs, provided that
merely members of the striking union who did not
they did not commit
commit any illegal act during the strike. (Escario v.
illegal acts during the
NLRC, G.R. 124055, 08 June 2000)
strike.
Knowingly participating in the commission of Rule on Strikes in Hospitals

illegal acts during strike
It shall be the duty of the striking Ees or locking out
May be terminated May be terminated Er to provide and maintain an effective skeletal
workforce of medical and health personnel for the
Rule on Reinstatement of Striking Workers duration of the strike or lockout.
Striking Ees are entitled to reinstatement, SOLE may immediately assume jurisdiction within
regardless of whether or not the strike was the 24 hours from knowledge of the occurrence of such
consequence of the Er’s ULP because while out on strike or lockout and certify it to the NLRC for
strike, the strikers are not considered to have compulsory arbitration.
abandoned their employment, but rather have only
ceased from their labor. The declaration of a strike is Q: More or less 1,400 Ees of the company staged
not a renunciation of employment relation. a mass walk-out, allegedly without anybody
leading them as it was a simultaneous,
Persons Not Entitled to Reinstatement immediate and unanimous group action and
decision, to protest the non-payment of their
1. Union officers who knowingly participate in the salaries and wages. The SOLE, who found the
illegal strike; and strike to be illegal, granted the clearance to
terminate the employment of those who were
2. Any striker or union who knowingly instigators in the illegal strike. Was the decision
participates in the commission of illegal acts of the Secretary in granting the clearance
during the strike. correct?
NOTE: Those union members who have joined an A: NO. A mere finding of the illegality of a strike
illegal strike but have not committed any illegal act should not be automatically followed by wholesale
shall be reinstated but without backwages. dismissal of the strikers from their employment.
While it is true that administrative agencies
2024 GOLDEN NOTES
exercising quasi-judicial functions are free from the Guild v. Compañia Maritima, G.R. Nos. L-20662 &
rigidities of procedure, it is equally well-settled that L-20663, 27 Mar. 1971)
avoidance of technicalities of law or procedure in
ascertaining objectively the facts in each case should Separation Pay in lieu of Reinstatement in Strike
not, however, cause denial of due process. (Bacus v. Cases
Ople, G.R. No. L-56856, 23 Oct. 1984)
In strike cases, the award of separation pay in lieu of
Q: Two days after the union struck, the SOLE reinstatement is proper only when the strikers did
ordered the striking workers to return to work not participate in the commission of illegal acts in
within 24 hours. But the striking union failed to the course thereof.
return to work and instead they continued their
pickets. As a result, violence erupted in the Entitlement of Strikers to their Backwages or
picket lines. The service bus ferrying non- Strike Duration Pay
striking workers was stoned causing injuries to
its passengers. Threats, defamation, illegal GR: Strikers are not entitled to their backwages or
detention, and physical injuries also occurred. strike duration pay even if such strike was legal.
The company was directed to accept back all
striking workers, except the union officers, shop XPNs:
stewards, and those with pending criminal 1. Where the strikers voluntarily and
charges. Was the SOLE correct in not including unconditionally offered to return to work, but
the union officers, shop stewards, and those with the Er refused to accept the offer – Ees are
pending criminal charges in the return-to-work entitled to backwages from the date their offer
order? was made;
A: NO. To exclude union officers, shop stewards, and 2. When there is a return-to-work order and the
those with pending criminal charges in the directive Ees are discriminated against other Ees,
to the company to accept back the striking workers workers are entitled to backwages from the
without first determining whether they knowingly date of discrimination;
committed illegal acts would be tantamount to
dismissal without due process of law. (Telefunken 3. In case of a ULP strike, in the discretion of the
Semiconductors Ees Union-FFW v. SOLE, G.R. Nos. authority deciding the case; and
122743 & 127215, 12 Dec. 1997)
4. When the Ees were illegally locked out and thus,
Employees Who Abandoned a Legal Strike But compelled them to stage a strike.
Were Refused Reinstatement Can Be Awarded
Backwages If the strike is illegal, no backwages should be paid.
Thus, where the strike was declared illegal,
Provided the following requisites are present: petitioner union members who were found not to
1. The strike was legal; have participated in the commission of illegal acts
during the strike were ordered reinstated to their
2. There was an unconditional offer to return to former positions but without backwages. If
work as when the strikers manifested their reinstatement is no longer possible, they should
willingness to abide by the CIR back-to-work receive separation pay of one (1) month for every
order and even sought the aid of competent year of service in accordance with existing
authorities to affect their return; and jurisprudence. With respect to the union officers,
their mere participation in the illegal strike
3. The strikers were refused reinstatement such as warrants their dismissal. (Arellano University Ees
when they have not been re-admitted to their and Workers Union v. CA, G.R. No. 139940, 19 Sept.
former position. (Philippine Marine Officers' 2006)
2024 GOLDEN NOTES
Liability of Employer for Reinstatement of Picketing
Strikers
It is a concerted activity of workers consisting in
1. Reinstatement (without backwages) of peacefully marching to and from, before an
ordinary rank-and-file union members who did establishment involved in a labor dispute, generally
not participate in the commission of illegal acts accompanied by the carrying and display of signs,
during the conduct of the illegal strike may be placards and banners intended to inform the public
ordered. about the dispute. (Chan, 2017)
2. Terminate strikers who committed illegal acts Right to Picket as a Means of Communicating the
during a strike. They are not entitled to be Facts of a Labor Dispute
reinstated. Additionally, they may be held
criminally liable therefor. It is a phase of the freedom of speech guaranteed by
the Constitution. Picketing, if peacefully carried out,
3. Forfeit reinstatement of strikers who failed to cannot be curtailed even in the absence of Er-Ee
report for work without proper justification and relationship. (PAFLU v. Cloribel, G.R. No. L-25878, 28
despite the order reinstating them to their job. Mar. 1969)
4. Pay backwages, reckoned from the Labor Requisites for Lawful Picketing
Arbiter’s issuance of the reinstatement order up
to its reversal by the NLRC, if Er fails to reinstate 1. It should be peacefully carried out;
strikers who were ordered reinstated by the
Labor Arbiter. 2. There should be no act of violence, coercion, or
intimidation;
Q: By reason of a deadlock in collective
bargaining, the union, after the lapse of the 3. The ingress to (entrance) or egress from (exit)
cooling-off period, declares a strike. The strike is the company premises should not be
peaceful but fruitless; the management is obstructed; and
adamant. So after 60 days, the strikers abandon
their strike and offer to return to work. Is the 4. Public thoroughfares should not be impeded.
company bound to re-admit them? Why?
Effect of the Absence of Employer-Employee
A: YES. By going on strike, the Ees are not deemed Relationship on Picketing
to have abandoned their work; they are merely
utilizing a weapon given to them by law to seek If peacefully carried out, picketing cannot be
better terms and conditions of employment and to prohibited even in the absence of Ee-Er relationship.
protect their rights. An Er who refuses to re-admit (PAFLU v. CFl, G.R. No. L-49580, 17 Jan. 1983)
the strikers, excepting those who have forfeited
their employment status because of illegal acts Right to Picket Not an Absolute Right
committed during the strike, would be
discriminating against them for having exercised While peaceful picketing is entitled to protection as
their right to engage in a concerted action; it an exercise of free speech, the courts are not without
commits a ULP. (Cromwell Commercial Ees and power to confine or localize the sphere of
Laborers Union v. CIR, G.R. No. L-19778, 30 Sept. communication or the demonstration to the parties
1964) to the labor dispute, including those with related
interests, and to insulate establishments or persons
with no industrial connection or having interest
totally foreign to the context of the dispute.
(Liwayway Pub., Inc. v. Permanent Concrete Workers
Union, G.R. No. L-25003, 23 Oct. 1981)
2024 GOLDEN NOTES
Effect of the Use of Foul Language during the
While workers have the right to peaceful picketing, Conduct of the Picket
no person engaged in picketing is allowed to commit
any act of violence, coercion, or intimidation or to In the event the picketers employ discourteous and
obstruct the free ingress to or egress from the Er’s impolite language in their picket, such may not
premises for lawful purposes, or to obstruct public result in, or give rise to libel or action for damages.
thoroughfares. (Chan, 2017)
When Picket Considered a Strike
Moving Picket
In distinguishing between a picket and a strike, the
The right granted to striking workers is merely a totality of the circumstances obtaining in a case
pedestrian right. It does not create the additional should be considered.
rights of squatting or assembly on the portion of Er’s
land. Any such squatting or assembly would exceed Strike vs. Picketing
the scope of the public’s easement and would
constitute enjoinable trespass. STRIKE PICKETING
To march to and from
Untruthful Picketing To withhold or to stop
the Er’s premises,
work by concerted
usually accompanied
Such act is tantamount to unlawful picketing which action of Ees because of
by the display of
is enjoinable even though the purpose is valid. It is an industrial or labor
placards and other
the act of employing false statements, falsehood, dispute. The work
signs making known
defamation, and other misrepresentations. stoppage may be
the facts involved in a
accompanied by
labor dispute. It is a
Other Unlawful Picketing Acts picketing by the
strike activity separate
striking Ees outside of
and different from
1. Use of abusive and threatening language the company
actual stoppage of
towards patrons of the place or business; compound.
work.
2. Use of violence and intimidation; or Focuses on publicizing

the labor dispute and
3. Vandalisms and other acts of a less terroristic its incidents to inform
Focuses on stoppage of
nature which causes physical discomfort to the the public of what Is
work.
Er’s customers. happening in the
company struck
Right to Picket Protected by the Constitution and against.
the Law
Q: PHIMCO argues that the strike staged by its
Unlike a strike which is guaranteed under the Ees was illegal as they committed the prohibited
Constitutional provision on the right of workers to acts under Art. 279(e) of the LC such as blocking
conduct peaceful concerted activities under Sec. 3, the ingress and egress of the company premises.
Art. XIII thereof, the right to picket is guaranteed The Ees, on the other hand, submit that the
under the freedom of speech and of expression and picket was peaceful, and no human barricade
to peaceably assemble to air grievances under Sec. blocked the company premises. May a peaceful
4, Art. III thereof. picketing of Ees be held illegal?
A: YES. Despite the validity of the purpose of a strike

and compliance with the procedural requirements,
a strike may still be held illegal where the means
2024 GOLDEN NOTES
employed are illegal. The means become illegal moving to and fro before all points of entrance to
when they come within the prohibitions under Art. and exit from said establishment,” then the
264(e) of the LC. Protected picketing does not picketing is protected, if it is peaceful.
extend to blocking ingress to and egress from the
company premises, and, the fact that the picket was In the question given, however, since the striking
moving, was peaceful and was not attended by union is picketing the company's outside outlets
actual violence may not free it from taints of who are not company owned but independent
illegality if the picket effectively blocked entry to dealers, the picketing is not in a strike area, thus the
and exit from the company premises. (PHIMCO picketing is not protected by the Code.
Industries, Inc. v. PHIMCO Industries Labor
Association, G.R. No. 170830, 11 Aug. 2010) Q: The workers engaged in picketing activity in
the course of a strike.
Q: Following a deadlock in collective bargaining,
the AC-AC Labor Union filed a notice of strike a) Will picketing be legal if non-
with the Department of Labor and Employment employees of the strike-bound
and, thirty (30) days later, went on strike and employer participate in the activity?
picketed the gates of the UP-UP Company,
paralyzing its operations. The company is A: YES, the picketing is legal even though non-
engaged in telecommunications, including the employees join it. Picketing is a form of the exercise
supply of cellular phone equipment, with a of freedom of speech. Picketing, provided it is held
nationwide network of facilities. peacefully, is a constitutional right. The disputants
in a legal dispute need not be employer-employee of
In a petition with the DOLE, the company each other. (De Leon v. National Labor Union, G.R. No.
questioned the legality of the strike and asked L-7586, 30 Jan. 1957)
for compulsory arbitration. The Secretary of the
DOLE certified the dispute to the NLRC for NOTE: Picketing peacefully carried out is not illegal
compulsory arbitration and ordered the even in the absence of employer-employee
company to readmit the workers pending the relationship for peaceful picketing is a part of a
arbitration. The workers returned and were freedom of speech guaranteed by the Constitution.
readmitted by the company but five (5) (De Leon v. National Labor Union, G.R. No. L-7586, 30
technicians were temporarily reassigned to the Jan. 1957)
warehouse while five (5) others were reinstated
on payroll only. The company justified its acts as b) b) Can picketing activity be curtailed
an exercise of management prerogative. when illegal acts are committed by
the picketing workers in the course
During the strike, may the striking union picket of the activity?
the company's outside outlets although they are
not company-owned but independent dealers? A: NO, the picketing activity itself cannot be
(1991 BAR) curtailed. What can be curtailed are the illegal acts
being done in the course of the picket. However, if
A: Peaceful picketing conducted by employees in a this is a “national interest" case under Art. 263(g),
strike area during any labor controversy is given [now 278(g)], the strike or work stoppage may be
protection by the Labor Code. stopped by the Secretary’s assumption of
jurisdiction or certification of the case to the
Thus, if the place being picketed is a strike area National Labor Relations Commission.
which is defined by the LC as “the establishment, (Nagkakaisang Mangagawa sa Cuison Hotel v.
warehouses, depots, plants or offices, including the Libron, G.R. No. L-64336, 31 Aug. 1983; Free
sites or premises used as runaway shops, of the Telephone Workers Union v. PLDT, G.R. No. L-31390,
employer struck against, as well as the immediate 15 Apr. 1988)
vicinity actually used by picketing strikers in
2024 GOLDEN NOTES
NOTE: The peaceful picketing authorized cannot in the strike. The Union denied it engaged in an
countenance acts of illegality. (Nagkakaisang illegal strike and countered that the Hotel
Mangagawa sa Cuison Hotel v. Libron, G.R. No. L- committed a ULP and a breach of the freedom of
64336, 31 Aug. 1983) speech.
Regular courts have no jurisdiction over actions for Was the picketing legal? Was the mass action of
the recovery of damages in connection with labor the Union officials and members an illegal
disputes. (Free Telephone Workers Union v. PLDT, G.R. strike? Explain. (2016 BAR)
No. L-31390, 15 Apr. 1988)
A: NO. The picket was illegal. The right to picket as a
Q: Asia Union (Union) is the certified bargaining means of communicating the facts of a labor dispute
agent of the rank-and-file employees of Asia is a phase of freedom of speech guaranteed by the
Pacific Hotel (Hotel). constitution (De Leon v. National Labor Union, G.R.
No. L-7586, 30 Jan. 1957). But this right is not
The Union submitted its Collective Bargaining absolute. Art. 278 of the LC provides that no person
Agreement (CBA) negotiation proposals to the engaged in picketing shall obstruct the free ingress
Hotel. Due to the bargaining deadlock, the to or egress from the employer's premises for lawful
Union, on 20 Dec. 2014, filed a Notice of Strike purposes or obstruct public thorough fares. The acts
with the National Conciliation and Mediation of the union members in blocking the entrance and
Board (NCMB). Consequently, the Union exit of the hotel which caused it to shut down
conducted a Strike Vote on 14 Jan. 2015, when it temporarily makes the picket illegal.
was approved.
The actions of all the union members in cropping or
The next day, waiters who are members of the shaving their head is deemed an illegal strike. In
Union came out of the Union office sporting National Union of Workers in the Hotel Restaurant
closely cropped hair or cleanly shaven heads. and Allied Industries (NUWHRAINAPL-IUF) Dusit
The next day, all the male Union members came Hotel Nikko Chapter v. Court of Appeals (G.R. No.
to work sporting the same hair style. The Hotel 163942, 11 Nov. 2008), the Supreme Court ruled that
prevented these workers from entering the the act of the Union was not merely an expression of
premises, claiming that they violated the their grievance or displeasure but was, indeed, a
company rule on Grooming Standards. calibrated and calculated act designed to inflict
serious damage to the hotel's grooming standards
On 16 Jan. 2015, the Union subsequently staged which resulted in the temporary cessation and
a picket outside the Hotel premises and disruption of the hotel's operations. This should be
prevented other workers from entering the considered as an illegal strike.
Hotel. The Union members blocked the ingress
and egress of customers and employees to the NOTE: Picketing peacefully carried out is not illegal
Hotel premises, which caused the Hotel severe even in the absence of Er-Ee relationship, for
lack of manpower and forced the Hotel to peaceful picketing is a part of the freedom of speech
temporarily cease operations resulting to guaranteed by the Constitution. (De Leon v. National
substantial losses. Labor Union, G.R. No. L-7586, 30 Jan. 1957)
On 20 Jan. 2015, the Hotel issued notices to Lockouts

Union members, preventively suspending them
and charging them with the following offenses: It means any temporary refusal of an Er to furnish
(1) illegal picket; (2) violation of the company work as a result of an industrial or labor dispute.
rule on Grooming Standards; (3) illegal strike; (Art. 219(p), LC)
and (4) commission of illegal acts during the
illegal strike. The Hotel later terminated the
Union officials and members who participated
2024 GOLDEN NOTES
Elements of Lockout Mandatory Procedural Requirements
1. Temporary refusal to furnish work by the Er; The requirements for a valid lockout are as follows:
and
2. Occasioned by an industrial or labor dispute. 1. Filing of Notice of Lockout by the Er to the
(Chan, 2017) NCMB;
NOTE: The lockout must be for a lawful purpose and 2. Observance of the cooling-off period:
carried out through lawful means. A lockout is a. 30 days for bargaining deadlock, and
unlawful where it is declared in order to defeat b. 15 days for ULP;
organizational and bargaining rights of Ees.
(Dingsalan v. NLU, G.R. No. L-14183, 28 Nov. 1959) 3. Notice of lockout vote meeting within 24 ours
before the intended vote;
Lockout consists of the following: 4. Lockout vote;
a. Shutdowns 5. Report of the lockout vote; and
b. Mass Retrenchment and dismissals 6. Observance of the 7-day waiting period.

initiated by the Er
Filing of Notice of Lockout
c. Dismissals without previous written
clearance from the Secretary of Labor or his A notice of lockout should be filed with the NCMB,
duly authorized representative. (Sec. 3, P.D. copy furnished the union.
823, as amended by P.D. 849)
In bargaining deadlocks, the notice shall be filed at
d. Er’s act of excluding Ees who are union least 30 days before the intended date thereof. In
members. (Complex Electronics Ees cases of unfair labor practice, the period of notice
Association v. NLRC, G.R. No. 121315, 19 July shall be 15 days.
1999)
The notice shall state, among others:
Grounds for Lockout 1. Names and addresses of the Er and the union
involved;
1. Collective bargaining deadlock; or
2. The nature of the industry to which the Er
2. Unfair Labor Practice act. (D.O. No. 40-03, as belongs;
amended by D.O. No. 40A-03)
3. The number of union members and of the
NOTE: No strike or lockout may be declared on workers in the bargaining unit; and
grounds involving inter-union and intra-union
dispute or without first having filed a notice of strike 4. Such other relevant data as may facilitate the
or lockout or without the necessary strike or lockout settlement of the dispute, such as a brief
vote having been obtained and reported to the statement or enumeration of all pending labor
Board. (Sec. 5, Rule XXII, Book V, IRR) disputes involving the same parties. (Sec. 8, Rule
XXII, Book V, IRR)
NOTE: In cases of bargaining deadlocks, the notice

shall, as far as practicable, further state:
a. The unresolved issues in the

bargaining negotiations;
2024 GOLDEN NOTES
b. The written proposals of the union; called for the purpose. (Sec. 10, Rule XXII, Book V,
c. The counter-proposals of the Er; and IRR)
d. The proof of a request for conference to
settle the differences. (Sec. 8, Rule XXII, The regional branch of the NCMB may, at its own
Book V, IRR) initiative or upon request of any affected party,
supervise the conduct of the secret balloting.
In cases of unfair labor practices, the notice shall, as
far as practicable, state the acts complained of and Report of the Lockout Vote
the efforts taken to resolve the dispute amicably.
(Sec. 8, Rule XXII, Book V, IRR) The Er shall furnish the regional branch of the NCMB
the results of the voting at least 7 days before the
Observance of the Cooling-Off Period intended lockout, subject to the cooling-off period.
A cooling-off period must be observed, i.e., a time NOTE: If the vote is filed within the cooling-off
gap is required to cool-off tempers between the period, the seven-day waiting period shall be
filing of notice and the actual execution of lockout. counted from the day the following the expiration of
the cooling-off period. In effect, the seven days are
Upon receipt of the notice, the regional branch of added to the 15-day of 30-day cooling off period.
the NCMB shall exert all efforts at mediation and
conciliation to enable the parties to settle the Observance of the 7-Day Waiting Period
dispute amicably. It may, upon agreement of the
parties, treat a notice as a preventive mediation The 7-day waiting period/lockout ban reckoned
case. It shall also encourage the parties to submit after the submission of the lockout vote report to the
the dispute to voluntary arbitration. NCMB-DOLE should be fully observed in all cases.
NOTE: During the proceedings, the parties shall not Should the dispute remain unsettled after the lapse
do any act which may disrupt or impede the early of the said period, the Er may lock out its workers.
settlement of the dispute. They are obliged, as part The regional branch of the NCMB shall continue
of their duty, to bargain collectively in good faith and mediating and conciliating. (Sec. 11, Rule XXII, Book
to participate fully and promptly in the conciliation V, IRR)
meetings called by the regional branch of the NCMB.
(Sec. 9, Rule XXII, Book V, IRR) Lockout Amounting to ULP
A lockout notice, upon agreement of the parties, may A lockout, actual or threatened, as a means of
be referred to alternative modes of dispute dissuading the Ees from exercising their rights, is
resolution, including voluntary arbitration. (Ibid.) clearly an ULP. However, to hold an Er guilty, the
evidence must establish that the purpose was to
Notice of Lockout Vote interfere with the Ees exercise of their rights.
The Er shall furnish the regional branch of the NCMB In an unfair labor practice proceeding which arises
a notice of meeting for the lockout vote at least 24 out of a lockout used as a weapon during a labor-
hours before such meeting. management dispute, an Er’s legal position is
improved if it appears that he did not lock out his
Lockout Vote Ees during the early stages of negotiations, and did
not employ the lockout to for acceptance of his
A decision to declare a lockout must be approved by terms. (NLRB v. Brown, 380 U.s. 278, 29 Mar. 1965).
a majority of the Board of Directors of the Er,
corporation or association or the partners in a
partnership obtained by a secret ballot in a meeting
2024 GOLDEN NOTES
Lockout vs. Shutdown the need to implement some measures to suppress
any act which will hinder the company's essential
Lockout is different from shutdown in the sense that productions is indispensable for the promotion of
in a lockout the plant continues to operate; whereas the common good. Under this situation, the
in a shutdown, the plant ceases to operate. (Ungos, Secretary's certification order for compulsory
2021) arbitration which was intended for the immediate
formulation of an already delayed CBA was proper.
A shutdown is the willful act of the Er himself (Union of Filipro Ees v. NLRC, G.R. No. 91025, 19 Dec.
following a complete lockout as contrasted to the 1990)
compulsory stoppage of operations as a result of a
strike and walkout. It can be truly said that all Requisites for Assumption of Jurisdiction
shutdowns are lockouts but not all lockouts
constitute shutdowns. (Sta. Mesa Slipways The SOLE may assume jurisdiction over the dispute
Engineering v. CIR, G.R. No. L-4521, 18 Aug. 1952) and decide it, or certify the same to the NLRC for
compulsory arbitration, provided, that any of the
following conditions is present:
2. ASSUMPTION OF JURISDICTION BY
SECRETARY OF LABOR AND EMPLOYMENT
1. Both parties have requested the SOLE to assume
(Art. 278 (g), LC; DOLE D.O. No. 40-H-13)
jurisdiction over the labor dispute; or
When DOLE Secretary May Assume or Certify a 2. After a conference called by the SOLE on the
Labor Dispute
propriety of its issuance, motu proprio or upon
a request or petition by either parties to the
Art. 278(g) of the LC provides that when in the labor dispute. (Sec. 15, Rule XXII, Book V, IRR)
opinion of the SOLE, the there exists a labor dispute
causing or will likely cause a strike or lockout in an Effect of Assumption
industry indispensable to the national interest, he is
empowered to either:
The assumption or certification by the SOLE has the
effect of automatically enjoining the intended or
1. Assume jurisdiction over the labor dispute and
impending strike or lockout as specified in the
decide it himself; or
assumption or certification order.
2. Certify it to the NLRC for compulsory

Effect of Assumption if a Strike or Lockout Has
arbitration, in which case, it will be the NLRC
Already Taken Place
which shall hear and decide it.
If a strike or lockout has already taken place at the
The Secretary may act at his own initiative or upon
time of assumption or certification:
petition by any of the parties. (Azucena, 2016)
1. The striking or locked Ees shall immediately
The assumption of jurisdiction by the Secretary of return to work; and
Labor over labor disputes causing or likely to cause
a strike or lockout in an industry indispensable to
2. The Er shall immediately resume operations
the national interest is in the nature of a police and readmit all workers under the same terms
power measure. It cannot be denied that the private and conditions prevailing before the strike or
respondent is engaged in an undertaking affected
lockout. (Art. 278(g), LC)
with public interest being one of the largest
manufacturers of food products. The compelling
The SOLE or the Commission may seek the
consideration of the Secretary's assumption of
assistance of law enforcement agencies to ensure
jurisdiction is the fact that a prolonged strike or compliance with this provision as well as with such
lockout is inimical to the national economy and thus,
orders as he may issue to enforce the same.
2024 GOLDEN NOTES
workforce of medical and other health personnel
NOTE: Notwithstanding the foregoing, parties to the whose movement and services shall be unhampered
case may agree at any time to submit the dispute to and unrestricted as are necessary to insure the
the Secretary of Labor or his/her duly authorized proper and adequate protection of the life and
representative as Voluntary Arbitrator or to a duly health of its patients, most especially in emergency
accredited Voluntary Arbitrator or to a panel of cases, for the duration of the strike or lockout.
Voluntary Arbitrators. (As created by D.O. No. 40-G-
03-10, and amended by D.O. No. 040-H-13) The SOLE may immediately assume, within 24 hours
from knowledge of the occurrence of such a strike or
Prior Notice Not Required for Assumption of lockout, jurisdiction over the same or certify it to the
Jurisdiction NLRC for compulsory arbitration.
The discretion to assume jurisdiction may be Decision on the Assumed Labor Dispute
exercised by the SOLE without the necessity of prior
notice or hearing given to any of the parties’ Within five (5) days from the issuance of the
disputants. The rationale justifiably rests on his assumption or certification order, a preliminary
consideration of the exigency of the situation in conference or hearing shall immediately be
relation to national interests. conducted by the Office of the Secretary of Labor
and Employment, the NLRC, or the voluntary
Actual Strike or Lockout Not a Condition for the arbitrator or panel of voluntary arbitrators as the
Exercise of the Power case may be.
Art. 278(g) of the LC does not require the existence The decision of the SOLE, the NLRC, or Voluntary
of a strike or lockout. All that is required is the Arbitrator or Panel of Voluntary Arbitrators shall be
existence of a labor dispute likely to cause a strike or rendered within 30 calendar days from submission
lockout. of the case for resolution and shall be final and
executory 10 calendar days after receipt thereof by
Extent of the Powers of the President during the parties. (Sec. 18, Rule XXII, Book V, Omnibus Rules
Strikes/Lockouts Implementing the Labor Code)
1. May determine the industries which are, in his Issues the SOLE May Resolve When he Assumes
opinion, indispensable to national interest; and Jurisdiction over a Labor Dispute
2. May intervene at any time and assume Power of SOLE is plenary and discretionary. (St.
jurisdiction over any such labor dispute in order Luke’s Medical Center v. Torres, G.R. No. 99395, 29
to settle or terminate the same. (Art. 278(g), LC) June 1993)
NOTE: The decision of the President or SOLE is final As the term "assume jurisdiction" connotes, the
and executory after receipt thereof by the parties. intent of the law is to give the Labor Secretary full
authority to resolve all matters within the dispute
Different Rule on Strikes and Lockouts in that gave rise to or which arose out of the strike or
Hospitals, Clinics, and Medical Institutions lockout; it includes and extends to all questions and
controversies arising from or related to the dispute,
As a general rule, strikes and lockouts in hospitals, including cases over which the labor arbiter has
clinics, and similar medical institutions should be exclusive jurisdiction. (Tabangao Shell Refinery Ees
avoided. Association v. Pilipinas Shell Petroleum Corp, G.R. No.
170007, 07 Apr. 2014)
In case a strike or lockout is staged, it shall be the
duty of the striking union or locking-out Er to
provide and maintain an effective skeletal
2024 GOLDEN NOTES
JEffects of Defiance NOTE: The SOLE’s order, directing all striking
workers to return to work within 24 hours, except
Non-compliance with the certification order of the those who were terminated due to redundancy, will
Secretary of Labor and Employment shall be be inconsistent with the established policy of the
considered as an illegal act committed in the course State of enjoining the parties from performing acts
of the strike or lockout and shall authorize the that undermine the underlying principles embodied
Commission to enforce the same under pain of in Art. 278(g) of the LC.
immediate disciplinary action, including dismissal,
or loss of employment status, or payment by the Art. 128 vs. Art. 129
locking-out Er of backwages, damages and other
affirmative relief, even criminal prosecution against ART. 128 ART. 129
the liable parties. (Sec. 4, Rule VIII, 2011 NLRC Rules As to the nature and subject of the
of Procedure) proceedings
Limits the proceedings
It covers enforcement
Q: Several employees and members of Union A to monetary claims
of labor legislation in
were terminated by Western Phone Co. on the which involve only
general.
ground of redundancy. After complying with the labor standards laws.
necessary requirements, the Union staged a As to the workers involved
strike and picketed the premises of the company.
It applies to present or
The management then filed a petition for the
past Ees at the time the
Secretary of Labor and Employment to assume
complaint is filed,
jurisdiction over the dispute. Without the Ees still in the service
provided there is no
benefit of a hearing, the Secretary issued an
demand for
Order to assume jurisdiction and for the parties
reinstatement.
to revert to the status quo ante litem.
As to the jurisdictional limits
Under the same set of facts the Secretary issued
The law fixes no The amount of money
an Order directing all striking workers to return
maximum monetary claim per claimant
to work within 24 hours, except those who were
amount for the exercise should not exceed
terminated due to redundancy. Was the Order
of enforcement power. P5,000.00.
legal? Explain. (2010 BAR)
As to the officers designated
A: NO. The SOLE’s order will be inconsistent with SOLE or any of his duly
the established policy of the State of enjoining the Vested upon a regional
authorized
parties from performing acts that undermine the director or any duly
representatives who
underlying principles embodied in Art. 278(g) of the authorized hearing
may or may not be a
LC. officer of the DOLE.
regional director.
As the to appeal
In this case, excepting the employees terminated
due to redundancy from those who are required to Appealable to the
Appealable to the SOLE.
return-to-work, which was the very labor dispute NLRC.
that sparked the union to strike, the SOLE comes
short of his duty under Art. 278(g) to maintain
status quo or the terms and conditions prevailing
before the strike. In fact, the Secretary could be
accused of disposing of the parties’ labor dispute
without the benefit of a hearing, in clear derogation
of due process of law
2024 GOLDEN NOTES
Power of SOLE under Art. 277(b) vs. under Art.
May be exercised in
263(g)
cases of termination of
employment for as
POWER OF SOLE May only be exercised
long any of the two
POWER OF SOLE UNDER ART. 263(g) in industries
grounds mentioned in
UNDER ART. 277(b) ASSUMPTION OF indispensable to the
Art. 277(b) exists,
JURISDICTION national interest.
irrespective of the
As to the applicability nature of the business
of the Er.
It is applicable to all
labor disputes, As to the remedy
It involves only the irrespective of the
issue of termination of grounds therefor, Automatic return to
employment which provided such labor work of the strikers or
may cause a serious disputes will cause or locked-out Ees, if the
labor dispute or is in likely to cause strikes strike or lock-out is on-
implementation of a or lockouts in going at the time of the
Immediate
mass lay-off. industries issuance of the
reinstatement pending
indispensable to the assumption or
resolution of the
national interest. certification order of
termination case
the enjoining of the
which the LA has
As to the requirement of preliminary strike or lockout, if one
exclusive jurisdiction.
determination of the existence of has not taken place,
prima facie evidence pending the resolution
of the issues raised in
Requires the conduct
the notice of strike or
of preliminary
lockout.
determination of the
Does not require such
existence of prima facie
preliminary prima
evidence that the
facie determination. In
termination may cause
fact, prior notice and
a serious labor dispute
hearing are not
or is in implementation
required before the
of a mass lay-off to be
SOLE may issue an
conducted by
assumption or
appropriate official of
certification order.
DOLE before whom the
termination dispute is
pending.
As to the involvement of a strike or lockout
“Serious labor dispute” Labor dispute referred

contemplated may or to will cause or likely to
may not involve a cause a strike or
strike or lockout. lockout.
As to the industry or nature of

the business involved
2024 GOLDEN NOTES
4. Claims for actual, moral, exemplary and other
IX. JURISDICTION AND REMEDIES forms of damages arising from the Er-Ee
relations;
5. Cases arising from any violation of Art. 264

(now Art. 274) of this Code, including questions
A. LABOR ARBITER involving the legality of strikes and lockouts;
and
1. JURISDICTION 6. Except claims for Ees Compensation, Social

(Arts. 124 and 224, LC; Sec. 10, R.A. No. 8042, as Security, Medicare and maternity benefits, all
amended by R.A. No. 10022; Sec. 1, Rule V, 2011 other claims arising from Er-Ee relations,
NLRC Rules of Procedure, as amended) including those of persons in domestic or
household service, involving an amount
exceeding P5,000.00 regardless of whether
Nature of jurisdiction of Labor Arbiters (LAs)
accompanied with a claim for reinstatement.
LAs only have original and exclusive jurisdiction.

7. Money claims arising out of Er-Ee relationship
They have no appellate jurisdiction.
or by virtue of any law and contract, involving a
Filipino worker for overseas deployment,
The cases that the LA can hear and decide are
including claims for actual, moral, exemplary
employment related. Where no Er-Ee relationship
and other forms of damages as well as
exists between the parties and no issue is involved
employment termination of OFWs;
which may be resolved by reference to the LC, other
labor statutes, or any CBA, it is the RTC that has
8. Wage distortion disputes in unorganized
jurisdiction. (Lapanday Agricultural Dev’t. Corp v. CA,
establishments not voluntarily settled by the
G.R. No. 112139, 31 Jan. 2000)
parties pursuant to R.A. 6727 as reflected in Art.
124;
The LA has jurisdiction over controversies involving
Ers and Ees only if there is a “reasonable causal
9. Enforcement of compromised agreements
connection” between the claim asserted and the Er-
when there is non-compliance by any of the
Ee relations. Absent such link, the complaint is
parties pursuant to Art. 233 of the LC, as
cognizable by the regular court. (Eviota v. CA, G.R.
amended;
No. 152121, 29 July 2003)
10. Contested cases under the exception clause of

Original and Exclusive Jurisdiction of LA
Art. 128(b) of the LC; and
The LA has original and exclusive jurisdiction over

11. Other cases as may be provided by law.
the following cases:
NOTE: Claims for Employment Compensation,

1. Unfair labor practice cases;
Social Security, PhilHealth and maternity benefits do
not fall under the jurisdiction of the LA because
2. Termination disputes or illegal dismissal
these fall under the jurisdiction of other government
complaints;
agencies mandated by law.
3. If accompanied with a claim for reinstatement,

Although the provision speaks of exclusive and
those cases that workers may file involving
original jurisdiction of LAs, the cases enumerated
wages, rates of pay, hours of work and other
may instead be submitted to a voluntary arbitrator
terms and conditions of employment;
by agreement of the parties under Art. 275 of the LC.
The law prefers voluntary over compulsory its regional office, the Bureau of Labor
arbitration. Relations, the NLRC or a labor attaché in a
foreign country. Such official shall assist the
Compromise Agreements parties regarding the execution of the quitclaim
and waiver. This compromise settlement
Any compromise settlement, including those becomes final and binding under Art. 227 of the
involving labor standard laws, voluntarily agreed LC. (EDI-Staffbuilders International, Inc. v. NLRC,
upon by the parties with the assistance of the Bureau G.R. No. 145587, 26 Oct. 2007)
or the regional office of the DOLE, shall be final and
binding upon the parties. The NLRC or any court, Exceptions to the Original and Exclusive
shall not assume jurisdiction over issues involved Jurisdiction of LAs
therein except in case of non-compliance thereof or
if there is prima facie evidence that the settlement 1. In assumed cases - When the SOLE or the
was obtained through fraud, misrepresentation, or President exercises his power under Art. 278(g)
coercion. (Art. 233, LC) of the LC to assume jurisdiction over national
interest cases and decide them himself.
Requisites for Validity and Enforceability of
Quitclaims and Waivers of Employees 2. In certified cases - When the NLRC exercises its
power of compulsory arbitration over similar
1. A fixed amount as full and final compromise national interest cases that are certified to it by
settlement; the SOLE pursuant to the exercise by the latter
of his certification power under Art. 263(g).
2. The benefits of the employees if possible with
the corresponding amounts, which the 3. In cases arising from CBA - When the cases
employees are giving up in consideration of arise from the interpretation or
the fixed compromise amount; implementation of CBAs and from the
interpretation or enforcement of company
3. A statement that the employer has clearly personnel policies which shall be disposed of by
explained to the employee in English, Filipino, the LA by referring the same to the grievance
or in the dialect known to the employees — machinery and voluntary arbitration, as may be
that by signing the waiver or quitclaim, they provided in said agreements.
are forfeiting or relinquishing their right to
receive the benefits which are due them 4. In cases submitted for voluntary arbitration -
under the law; and When the parties agree to submit the case to
voluntary arbitration before a VA or panel of
4. A statement that the employees signed and VAs who, under Arts. 274 and 275 of the LC, are
executed the document voluntarily, and had also possessed of original and exclusive
fully understood the contents of the jurisdiction to hear and decide cases mutually
document and that their consent was freely submitted to them by the parties for arbitration
given without any threat, violence, duress, and adjudication.
intimidation, or undue influence exerted on
their person. Q: May a money claim arising from
implementation of the CBA be filed with a labor
It is advisable that the stipulations be made in arbiter?
English and Tagalog or in the dialect known to
the employee. There should be two witnesses to A: The original and exclusive jurisdiction of the LA
the execution of the quitclaim who must also under Art. 224(c) for money claims is limited only to
sign the quitclaim. The document should be those arising from statutes or contracts other than a
subscribed and sworn to under oath preferably CBA. The Voluntary Arbitrator or Panel of Voluntary
before any administering official of the DOLE or Arbitrators will have original and exclusive
2024 GOLDEN NOTES
jurisdiction over money claims “arising from the Q: Malcaba has been employed with ProHealth
interpretation or implementation of the CBA, and since it started in 1997. He was initially the Vice
those arising from the interpretation or President for Sales until he became the
enforcement of company personnel policies,” under President in 2005. Malcaba alleged that Del
Art. 274. (San Jose v. NLRC, G.R. No. 121227, 17 Aug. Castillo, the Chair of the Board of Directors and
1998) Chief Executive Officer, did acts that made his job
difficult. He asked to take a leave on 23 Oct 2007.
Extent of the Jurisdiction of the LA if There are When he attempted to return on 05 Nov. 2007,
Unresolved Matters Arising from the Del Castillo insisted that had already resigned
Interpretation of the CBA and had his things removed from his office. He
attested that he was paid a lower salary in
GR: LAs have no jurisdiction over unresolved or December 2007 and his benefits were withheld.
unsettled grievances arising from the interpretation On 07 Jan. 2008, Malcaba tendered his
or implementation of the CBA and those arising resignation effective 01 Feb. 2008.
from the interpretation or enforcement of company
personnel policies. Does the LA or the NLRC have jurisdiction over
petitioner Malcaba’s termination dispute
XPN: Actual termination disputes. considering the allegation that he was a
corporate officer, and not a mere Ee?
NOTE: Where the dispute is just in the
interpretation, implementation, or enforcement A: NO. Under the LC, the LA exercises original and
stage of the termination, it may be referred to the exclusive jurisdiction over termination disputes
grievance machinery set up by the CBA or by between an employer and an employee while the
voluntary arbitration. Where there was already NLRC exercises exclusive appellate jurisdiction over
actual termination, i.e., violation of rights, it is the cases provided in Art. 244.
already cognizable by the LA. (Maneja v. NLRC, G.R.
No. 124013, 05 June 1998) Under Sec. 25 of the Corporation Code, the President
of a corporation is considered a corporate officer.
Q: Who has jurisdiction over intra-corporate The dismissal of a corporate officer is considered an
controversies? intra-corporate dispute, not a labor dispute.
(Nicanor Malcaba v. Prohealth Pharma Philippines,
A: The RTC. In Matling Industrial and Commercial Inc., G.R. No. 209085, 06 June 2018)
Corporation v. Coros (G.R. No. 157802, 13 Oct. 2010),
the Court distinguished between a “regular Q: Mario comes from a family of coffee bean
employee” and a “corporate officer” for purposes of growers. Deciding to incorporate his fledgling
establishing the true nature of a dispute or coffee venture, he invites his best friend, Carlo,
complaint for illegal dismissal and determining to join him. Carlo is hesitant because he does not
which body has jurisdiction over it. Succinctly, it was have money to invest but Mario suggests a
explained that “the determination of whether the scheme where Carlo can be the Chief Marketing
dismissed officer was a regular employee or Agent of the company, earning a salary and
corporate officer unravels the conundrum” of commissions. Carlo agrees, and the venture is
whether a complaint for illegal dismissal is formed. After one year, the business was so
cognizable by the LA or by the RTC. In case of the successful that they were able to declare
regular employee, the LA has jurisdiction otherwise, dividends. Mario is so happy with Carlo's work
the RTC exercises the legal authority to adjudicate.” that he assigns 100 shares of stock to Carlo as
(Cosare v. Broadcom Asia, Inc., G.R. No. 201298, 05 part of the latter's bonus.
Feb. 2014)
Much later on, it is discovered that Carlo had
engaged in unethical conduct, which caused
embarrassment to the company. Mario is forced
2024 GOLDEN NOTES
to terminate Carlo, but he does so without giving NOTE: Reinstatement pending appeal is applicable
Carlo the opportunity to explain. only to the reinstatement order issued by the LA.
Writ of execution is required when reinstatement is
Carlo filed a case against Mario and the company ordered by the NLRC on appeal, or subsequently by
for illegal dismissal. Mario objected on the the CA or Supreme Court, as the case may be.
ground that the Labor Arbiter had no
jurisdiction over the case as it would properly be Art. 223 vs. Art. 224
considered as an intracorporate controversy
cognizable by the RTC. Further, Mario claimed ART. 223 ART. 224
that because Carlo's dismissal was a corporate The SOLE or any
act, he cannot be held personally liable. (2015 Regional Director, the
BAR) Commission or any LA,
or med-arbiter or
As the Labor Arbiter assigned to this case, how voluntary arbitrator
would you resolve the jurisdiction question. may, motu proprio or
on motion of any
A: The LA has jurisdiction over Carlo’s illegal interested party, issue
dismissal complaint as he was hired by Mario on a a writ of execution on a
“salary and commission” basis. In Grepalife v. Judico judgment within 5
(G.R. No. 73887, 21 Dec. 1989) it was held that a years from the date it
worker who is paid on a salary plus commission becomes final and
basis is an employee. While regular courts have executory.
jurisdiction over Mario’s corporate act of severing
Art. 223 of the LC
ties with Carlo, the Labor Arbiter, pursuant to Art. Consequently, under
provides that
224(a)(2) of the LC, has jurisdiction over Carlo’s Rule III of the NLRC
reinstatement is
illegal dismissal complaint. Manual on the
immediately executory
Execution of Judgment,
even pending appeal
Labor Arbiter Conducts Compulsory Arbitration it is provided that if the
only when the LA
execution be for the
himself ordered the
Compulsory arbitration is the process of settlement reinstatement of any
reinstatement.
of labor disputes by a government agency which has person to a position,
the authority to investigate and make an award an office or an
binding on all the parties. employment, such writ
shall be served by the
Under the LC, it is the LA who is clothed with the sheriff upon the losing
authority to conduct compulsory arbitration on party or upon any
cases involving termination disputes. (PAL v. NLRC, other person required
G.R. No. 55159, 22 Dec. 1989) by law to obey the
same, and such party
Ministerial Duty of LA to Implement or person may be
Reinstatement Orders punished for contempt
if he disobeys such
Unless there is a restraining order, it is ministerial decision or order for
upon the LA to implement the order of reinstatement.
reinstatement and it is mandatory on the Er to (Mt. Carmel College v. Resuena, G.R. No. 173076, 10
comply therewith. (Garcia v. PAL, G.R. No. 164856, 20 Oct. 2007)
Jan. 2009)
2024 GOLDEN NOTES
Effect of Appeal to the Order of Reinstatement by 2. Payroll reinstatement: The Wenphil Rule
the LA
The period for computing the backwages due to
In any event, the decision of the LA reinstating a the dismissed Ees during the period of appeal
dismissed or separated employee, in so far as the should end on the date that a higher court
reinstatement aspect is concerned, shall be reversed the labor arbitration ruling of illegal
immediately executory, even pending appeal. dismissal. (Wenphil Corporation v. Abing, G.R.
207983, 07 Apr. 2014)
The employee shall either be admitted back to work
under the same terms and conditions prevailing Q: Where do you appeal the decision, award, or
prior to his dismissal or separation or, at the option order of the Labor Arbiter?
of the employer, merely reinstated in the payroll.
The posting of a bond by the employer shall not stay A: To the NLRC, within the reglementary period of
the execution for reinstatement provided herein. ten (10) calendar days from receipt.
(Art. 229, LC; Baronda v. CA, G.R. No. 161006, 14 Oct.
2015) Jurisdiction of the Regional Directors
Instances When Writ of Execution of LA’s The DOLE Regional Directors have original and
Reinstatement Order is Still Required exclusive jurisdiction over:
The following are the instances when a writ of 1. Labor standards enforcement cases under Art.
execution should still be issued immediately, even 128;
pending appeal, by the Labor Arbiter to implement
his order of reinstatement: 2. Small money claims cases arising from labor
standards violations in the amount not
1. When the Er disobeys the prescribed directive exceeding P5,000.00 and not accompanied with
to submit a report of compliance within ten (10) a claim or reinstatement under Art. 129;
calendar days from receipt of the decision; or
3. Occupational safety and health violation;
2. When the Er refused to reinstate the dismissed
Ee. 4. Registration of unions and cancellation thereof,
cases filed against unions and other labor
The LA shall motu proprio issue a corresponding relations related cases;
writ to satisfy the reinstatement wages as they
accrue until actual reinstatement or reversal of the 5. Complaints against private recruitment and
order of reinstatement. (Sec. 19, Rule V, NRLC 2011 placement agencies for local employment; and
Rules and Procedures)
6. Cases submitted for voluntary arbitration in
Effect of Reversal of Reinstatement Order their capacity as Ex- Officio Voluntary
Arbitrators under D.O. No. 83 - 07, Series of 2007.
1. Actually reinstated: The Bergonio Rule
After reversal of LA’s decision, the Er’s duty to

reinstate the dismissed Ee in the actual service
or in the payroll is effectively terminated. The
Ee, in turn is not required to return the wages
that he had received prior to the reversal of the
LA’s decision. (Bergonio Jr. v. South East Asian
Airlines, 21 Apr. 2014)
2024 GOLDEN NOTES
No. 179652, 06 Mar.
LABOR ARBITER REGIONAL DIRECTOR 2012)
Money claims
Claims arising from Er- 2. MODE OF APPEAL TO THE NLRC
Ee Ee relations: Any matter involving the (Rule VI, 2011 NLRC Rules of Procedure, as
recovery of wages and amended)
1. Aggregate amount other monetary claims
exceeding five and benefits, arising
Grounds for Filing an Appeal
thousand pesos from Er-Ee relations;
(P5,000.00); provided that:
The appeal may be entertained only on any of the
2. Regardless if following grounds:
accompanied with a 1. There is no claim for
claim for reinstatement; and
1. If there is prima facie evidence of abuse of
reinstatement. discretion on the part of the LA or RD;
2. Aggregate of money
claim does not
2. If the decision, award or order was secured
exceed P5,000.00.
through fraud or coercion, including graft and
(Art. 129, LC, as
corruption; and
amended)
3. If made purely on questions of law; or
Issuance of labor injunction
4. If serious errors in the findings of facts are
Labor Arbiter cannot NLRC can issue an
raised which, if not corrected, would cause
issue an injunctive writ. injunctive writ.
grave or irreparable damage or injury to the
Exercise of jurisdiction; Requisites appellant. (Sec. 2, Rule VI, NLRC 2011 Rules of
LA may exercise RD is not divested of its Procedure)
jurisdiction pursuant to jurisdiction under Art.
Art. 128(b) if: 128(b) if: Requirements to Perfect an Appeal before the
NLRC
1. The Er contests the 1. The Er-Ee
findings of the labor relationship should 1. Filed within the reglementary period of 10
regulations officer still exist; calendar days from receipt if it involves a
and raises issues decision, award, or order of the LA, or 5
thereon; 2. The findings in calendar days from receipt if it involves a
question were decision or resolution of the RD;
2. In order to resolve made in the course
such issues; there is of inspection by 2. Verified by the appellant himself in accordance
need to examine labor inspectors; with Sec. 4, Rule 7 of the ROC, as amended;
evidentiary matters; and
and 3. In the form of a memorandum of appeal which
The Ees have not yet shall state the grounds relied upon and
Such matters are not initiated any claim or arguments in support thereof, the relief prayed
verifiable in the normal complaint with the for, and with a statement of the date the
course of inspection (Ex- DOLE Regional Director appellant received the appealed decision,
Bataan Veterans Security under Art. 129, or the LA resolution or order;
Agency v. Secretary of under Art. 224 (People’s
Labor, G.R. No. 152396, 20 Broadcasting Service v. 4. In three legibly typewritten or printed copies;
Nov. 2007) Secretary of DOLE, G.R.
5. Accompanied by:
2024 GOLDEN NOTES
a. Proof of payment of the required
appeal fee; A: NO. Sec. 6, Rule VI of the 2011 NLRC Rules provides
b. Posting of a cash or surety bond as that an appeal may be perfected by the appellant-Er
provided in Sec. 6 of this Rule; only by the posting of a bond in the equivalent
c. A certificate of non-forum shopping; amount of the full monetary award granted to the
and appellee-Ee. The perfection of an appeal in the
d. Proof of service upon the other parties. manner and within the period set by law is not only
(Sec. 4, Rule VI, NLRC 2011 Rules of mandatory but jurisdictional. Consequently, there
Procedure) should be no implied approval of a jurisdictional
requirement that has not been complied with.
NOTE: Mere notice of appeal without complying Otherwise, the ground of lack of jurisdiction
with the requisites shall not stop the running of the becomes a waivable defect in procedure. Whether
period for perfecting an appeal. the NLRC accepts or rejects the appellant’s motion
to reduce the bond, the ruling must be unequivocal,
While Art. 229 of the LC and Sec. 3(a), Rule VI of the and such ruling must be issued before or at the time
then New Rules of Procedure of the NLRC require the the NLRC resolves the appeal by final judgment.
party intending to appeal from the LA’s ruling to Failure to do so shall render the NLRC liable for
furnish the other party a copy of his memorandum grave abuse of discretion for having ruled on an
of appeal, the Court has held that the mere failure to appeal without acquiring jurisdiction over the same,
serve the same upon the opposing party does not and the judgment it had issued shall be vacated as
bar the NLRC from giving due course to an appeal. null and void. (Pacific Royal Basic Foods, Inc. v. Noche,
et al., G.R. No. 202392, 04 Oct. 2021)
Such failure is only treated as a formal lapse, an
excusable neglect, and, hence, not a jurisdictional Forms of the Appeal Bond
defect warranting the dismissal of an appeal.
Instead, the NLRC should require the appellant to It shall either be in the form of cash deposit or surety
provide the opposing party copies of the notice of bond equivalent in amount to the monetary award,
appeal and memorandum of appeal. (Lei Sheryll exclusive of damages and attorney’s fees. (Sec. 6,
Fernandez v. Botica Claudio, G.R. No. 205870, 13 Aug. Rule VI, NLRC 2011 Rules of Procedure)
2014)
Period within which a Cash or Surety Bond Shall
Perfection of Appeal Mandatory and Be Valid And Effective
Jurisdictional
From the date of deposit or posting, until the case is
The perfection of appeal within the period and in the finally decided, resolved, or terminated, or the
manner prescribed by the law is jurisdictional and award satisfied. This condition shall be deemed
non-compliance with the legal requirements is fatal incorporated in the terms and conditions of the
and has the effect of rendering the judgment final surety bond and shall be binding on the appellants
and executor, hence, unacceptable. and the bonding company. (Sec. 6, Rule VI, NLRC
2011 Rules of Procedure)
Q: In appealing its case, PRBFI filed a motion to
reduce bond before the NLRC, but the latter Effect if the Bond is Verified to be Irregular or
never acted on it. Instead, the NLRC resolved the Not Genuine
case on all its substantial points. Would an
implied approval of a motion to reduce bond, i.e., The Commission shall cause the immediate
the NLRC’s disposal of the appeal by final dismissal of the appeal, and censure or cite in
decision, suffice as a grant of the PRBFI’s motion contempt the responsible parties and their
to reduce bond, which is a presupposed counsels, or subject them to reasonable fine or
requirement before the Er’s appeal is deemed penalty. (Sec. 6, Rule VI, NLRC 2011 Rules of
perfected? Procedure)
2024 GOLDEN NOTES
Further, Art. 227 of the same Code authorizes the
NOTE: The appellee shall verify the regularity and NLRC to use every and all reasonable means to
genuineness of the bond and immediately report ascertain the facts in each case speedily and
any irregularity to the NLRC. objectively, without regard to technicalities of law or
procedure. In the case before us, the NLRC opined
Q: Respondents seasonably filed a that it is in the best interest of justice that the appeal
memorandum of appeal and posted a surety be allowed so that the case could be resolved on its
bond in an amount equivalent to the monetary merits. (Tolentino-Prieto v. Elvas, G.R. No. 192369, 09
award of the LA, but the bond turned out to be Nov. 2016)
spurious upon verification of the petitioner.
Upon being informed of the spuriousness of the Motion to Reduce Bond
bond, the respondents dismissed their counsel
of record who was allegedly responsible for its GR: No motion to reduce the bond shall be
submission and hired another lawyer who entertained.
submitted a genuine bond. Both the NLRC and
the CA found good faith on the part of XPNs: Only when there are:
respondents, stating that the filing of the alleged
fake bond was without their knowledge and that 1. Meritorious grounds; and
they did not purposely post a spurious bond. Are 2. Upon posting of a bond in reasonable amount in
the NLRC and CA correct in allowing the appeal? relation to the monetary award.
A: YES. While posting of an appeal bond is NOTE: The mere filing of a motion to reduce the
mandatory and jurisdictional, we sanction the bond without complying with the requisites in the
relaxation of the rule in certain meritorious cases. preceding paragraphs shall not stop the running of
the period to perfect an appeal. (Sec. 6, Rule VI, NLRC
These cases include instances in which: 2011 Rules of Procedure)
1. There was substantial compliance with the
Rules; McBurnie Guidelines
2. Surrounding facts and circumstances constitute On the matter of the filing and acceptance of
meritorious grounds to reduce the bond; motions to reduce appeal bond, as provided in Sec.
6, Rule VI of the 2011 NLRC Rules of Procedure, as
3. A liberal interpretation of the requirement of an amended, the Supreme Court in the case of
appeal bond would serve the desired objective McBurnie v. Ganzon (G.R. No. 178034, 13 Oct. 2013)
of resolving controversies on the merits; or promulgated the following guidelines that shall be
observed:
4. The appellants, at the very least, exhibited their
willingness and/or good faith by posting a 1. The filing of a motion to reduce appeal bond
partial bond during the reglementary period. shall be entertained by the NLRC subject to the
following conditions:
The first and second instances are present in this
case. As correctly found by the CA, respondents a. There is meritorious ground; and
substantially complied with the rules as shown by b. A bond in reasonable amount is posted;
their lack of intention to evade the requirement of
an appeal bond. We adhere to a strict application of NOTE: The requirement on the existence of a
Art. 229 of the LC when appellants do not post an "meritorious ground" delves on the worth of the
appeal bond at all; but here an appeal bond was parties' arguments, taking into account their
filed. The strict application of the rules is therefore respective rights and the circumstances that
uncalled for. attend the case. The condition was emphasized
in University Plans Inc. v. Solano (,G.R. No.
2024 GOLDEN NOTES
170416 22 June 2011), wherein the Supreme statements, while simultaneously posting a surety
Court held that while the NLRC's Revised Rules bond which is more than 10% of the full judgment
of Procedure "allows the [NLRC] to reduce the award, the bond may be reduced, and the appeal is
amount of the bond, the exercise of the considered perfected. (Philippine Touristers, Inc. v.
authority is not a matter of right on the part of MAS Transit Workers Union-ANGLO-KMU, G.R. No.
the movant, but lies within the sound discretion 201237, 03 Sept. 2014)
of the NLRC upon a showing of meritorious
grounds." By jurisprudence, the merit referred In Sara Lee v. Macatlang (G.R. No. 180147, 04 June
to may pertain to an appellant's lack of financial 2014), the Court deemed it reasonable to reduce the
capability to pay the full amount of the bond, amount of the appeal bond from P2.9 Billion to P725
the merits of the main appeal such as when Million. The Court provided that such already
there is a valid claim that there was no illegal considers that the award, if not illegal, is
dismissal to justify the award, the absence of an extraordinarily huge and no insurance company
employer-employee relationship, prescription would be willing to issue a bond for such big money.
of claims, and other similarly valid issues that The amount of P725 Million is also approximately
are raised in the appeal. For the purpose of 25% of the basis above calculated. It is a balancing
determining a "meritorious ground", the NLRC of the constitutional obligation of the state to afford
is not precluded from receiving evidence, or protection to labor which, specific to this case, is
from making a preliminary determination of the assurance that in case of affirmance of the award,
merits of the appellant's contentions. recovery is not negated; and on the other end of the
spectrum, the opportunity of the Er to appeal. By
2. For purposes of compliance with condition no. reducing the amount of the appeal bond in this case,
(2), a motion shall be accompanied by the the Ees would still be assured of at least substantial
posting of a provisional cash or surety bond compensation, in case a judgment award is affirmed.
equivalent to 10% of the monetary award On the other hand, management will not be
subject of the appeal, exclusive of damages and effectively denied of its statutory privilege of appeal.
attorney’s fees; In line with Sara Lee and the objective that the
appeal on the merits to be threshed out soonest by
3. Compliance with the foregoing conditions shall the NLRC, the appeal bond posted by the respondent
suffice to suspend the running of the ten-day in the amount of P100,000.00 which is equivalent to
reglementary period to perfect an appeal from around 20% of the total amount of monetary bond
the Labor Arbiter’s decision to the NLRC; is sufficient to perfect an appeal. With the Er’s
demonstrated good faith in filing the motion to
4. The NLRC retains its authority and duty to reduce the bond on demonstrable grounds coupled
resolve the motion to reduce the bond and with the posting of the appeal bond in the requested
determine the final amount of bond that shall be amount, as well as the filing of the memorandum of
posted by the appellant, still in accordance with appeal, the right of the Er to appeal must be upheld.
the standards of “meritorious grounds” and This is in recognition of the importance of the
“reasonable amount”; and remedy of appeal, which is an essential part of our
judicial system and the need to ensure that every
5. If the NLRC denies the motion to reduce bond or party litigant is given the amplest opportunity for
requires a bond that exceeds the amount of the the proper and just disposition of his cause freed
provisional bond, the appellant shall be given a from the constraints of technicalities. (Balite v. SS
fresh period of ten (10) days from notice of the Ventures, G.R. No. 195109, 04 Feb. 2015)
NLRC order within which to perfect the appeal
by posting the required appeal bond.
NOTE: When the appellant Er prayed for the

reduction of the bond in view of serious liquidity
problems evidenced by audited financial
2024 GOLDEN NOTES
Motion for Reconsideration (MR) of the NLRC the Code. NLRC affirmed that Cristobal’s
Decision Required before Certiorari May Be retirement benefits should not be computed in
Availed accordance with Art. 287 of the Code as Cristobal
was not yet 60 years old when he retired on 10
A motion for reconsideration shall be filed before a Mar. 1999. Accordingly, Cristobal is only entitled
petition for certiorari to enable NLRC to correct its to receive retirement benefits from the 1967
mistakes. Otherwise, NLRC’s decision becomes final PAL-ALPAP Retirement Plan in an amount equal
and executory. to P5,000.00 for every year of service.
Remedy in Case of Denial of the MR Cristobal filed his Motion for

Reconsideration, seeking reconsideration of the
If the motion is denied, the aggrieved party may file reduction of retirement benefits. NLRC denied
a petition for certiorari under Rule 65 of the ROC not Cristobal’s Motion for Reconsideration, deeming
later than 60 days from notice of the judgment, it a second motion for reconsideration of its 31
order, or resolution. In case a motion for May 2011 Decision. Was the Motion for
reconsideration or new trial is timely filed, whether Reconsideration filed by Cristobal assailing the
such motion is required or not, the 60-day period NLRC 31 May 2011 Decision a prohibited second
shall be counted from notice of the denial of said motion for reconsideration?
motion. No extension of time to file the petition shall
be granted except for compelling reason and in no A: NO. The Amended Decision is an entirely new
case exceeding 15 days. (Sec. 4, Rule 65, Rules of decision which supersedes the original decision, for
Court) which a new motion for reconsideration may be
filed again. Here, the NLRC 31 May 2011 Decision
Q: Cristobal became a pilot for PAL on 16 Oct. substantially modified its 30 Sept. 2010 Decision.
1971. In May 1998, in line with a downsizing Thus, the petitioner was not precluded from seeking
program of PAL, Cristobal applied for leave reconsideration of the new decision of the NLRC,
without pay to enter into a four (4)-year contract and it was clearly an error for the Court of Appeals
with EVA Air. Cristobal advised PAL of his intent to find that the petitioner’s petition
to retire. In response, PAL advised him that he for certiorari was filed out of time on that ground.
was deemed to have lost his employment (Cristobal v. PAL, G.R. No. 201622, 04 Oct. 2017)
status. Thus, on 12 May 1999, Cristobal filed a
complaint with the NLRC.
3. REINSTATEMENT AND/OR EXECUTION
PENDING APPEAL
The LA found Cristobal’s dismissal illegal. On the
(Art. 229, LC; Sec. 12, Rule IX, 2011 NLRC Rules of
matter of retirement benefits, the LA noted PAL’s
Procedure, as amended)
claim that Cristobal could only be entitled to a
retirement pay of P5,000.00 per year, pursuant
to the Philippine Airlines, Inc.-Airline Pilots It is the restoration of the Ee to the state from which
he has been unjustly removed or separated without
Association of the Philippines (PAL-ALPAP)
Retirement Plan of 1967. However, he found that loss of seniority rights and other privileges. The
Cristobal’s retirement benefits should not be person reinstated assumes the position he had
occupied prior to his dismissal, and is, ordinarily,
less than the amount provided under the law. He
is entitled to a retirement pay in the amount of entitled only to the last salary in that position.
P1,575,964.30. NLRC affirmed the LA Decision. (Azucena, 2016)
Later, Cristobal filed a Motion for Partial Reinstatement presupposes that the previous
position from which one had been removed still
Reconsideration while PAL also filed a motion
exists, or that there is an unfilled position which is
for reconsideration, claiming that it was error to
find that Cristobal was illegally dismissed and to substantially equivalent or of similar nature as the
one previously occupied by the Ee.
base his retirement benefits on Art. 287 of
2024 GOLDEN NOTES
Forms of Reinstatement him because the employment relationship between
them was never actually severed.”
1. Actual or physical – The Ee should be
reinstated to his position which he occupies Employer Can Reinstate an Employee in Payroll
prior to his illegal dismissal under the same When Actual Reinstatement is No Longer
terms and conditions prevailing prior to his Possible
dismissal or separation or, if no longer available,
to a substantially equivalent position. 1. The Er believes that there was a valid cause for
dismissal; or
2. Payroll – The Ee is merely reinstated in the
payroll. The Ee although not admitted back to 2. Er does not want to see anymore an unwanted
work, would nevertheless be included in the face in the company premises because it may
payroll and entitled to receive salary and other demoralize Ees.
benefits as if she were in fact working. (Azucena,
2016) NOTE: An order of reinstatement by the LA is not
the same as actual reinstatement of a dismissed or
NOTE: Er is given the option to reinstate either separated Ee, however it is immediately executory
actually or in payroll. even pending appeal. Thus, until the Er continuously
fails to implement the reinstatement aspect of the
Distinction between Reinstatement When There decision of the LA, their obligation to the illegally
is No Dismissal and Reinstatement under Art. dismissed Ee, insofar as accrued backwages and
294 other benefits are concerned, continues to
accumulate. It is only when the illegally dismissed
The case of Rodriguez v. Sintron Systems, Inc. is Ee receives the separation pay (in case of strained
instructive, viz: “Indeed, in cases where the parties relations) that it could be claimed with certainty
failed to prove the presence of either dismissal of the that the Er-Ee relationship has formally ceased
employee or abandonment of his work, the remedy thereby precluding the possibility of reinstatement.
is to reinstate such employee without payment of (Triad Security & Allied Services, Inc. et al v. Ortega,
backwages. G.R. No. 160871, 06 Feb. 2006)
There is, however, a need to clarify the import of the GR: An illegally dismissed Ee is entitled to
term "reinstate" or "reinstatement" in the context of reinstatement as a matter of right.
cases where neither dismissal nor abandonment
exists. The Court has clarified that "reinstatement," XPNs:
as used in such cases, is merely an affirmation that
the employee may return to work as he was not Proceeds from an illegal dismissal wherein
dismissed in the first place. It should not be reinstatement is ordered but cannot be carried out
confused with reinstatement as a relief proceeding as in the following cases:
from illegal dismissal as provided under Art. 294
[279] of the LC. 1. Reinstatement cannot be effected in view of the
long passage of time or because of the realities
Reinstatement under the aforequoted provision of the situation;
restores the employee who was unjustly dismissed
to the position from which he was removed, that is, 2. It would be inimical to the Ers’ interest;
to his status quo ante dismissal. In the present case,
considering that there has been no dismissal at all, 3. When reinstatement is no longer feasible;
there can be no reinstatement as one cannot be
reinstated to a position he is still holding. Instead, 4. When it will not serve the best interest of the
the Court merely declares that the employee may go parties involved;
back to his work and the employer must then accept
2024 GOLDEN NOTES
5. Company will be prejudiced by reinstatement; Ee Voluntarily Chooses Not to Return to Work
Considered as Having Resigned from
6. When it will not serve a prudent purpose; Employment
7. When there is a resultant strained relation In HSY Marketing Ltd. Co. v. Villastique (G.R. No.
(applies to both confidential and managerial 219569 17 Aug. 2016), the Supreme Court held that
Ees only); or if the employee voluntarily chooses not to return to
work, he must then be considered as having
8. When the position has been abolished. (Applies resigned from employment, viz: “Notably, the
to managerial, supervisory, and rank-and-file reinstatement ordered here should not be
Ees). construed as a relief proceeding from illegal
dismissal; instead, it should be considered as a
NOTE: In such cases, it would be more prudent to declaration or affirmation that the employee may
order payment of separation pay instead of return to work because he was not dismissed in the
reinstatement. (Quijano v. Mercury Drug first place.
Corporation, G.R. No. 126561, 08 July 1998)
For this reason, the Court agrees with petitioner that
Q: Is there any violation of the “No work, No pay” the LA, the NLRC, and the CA erred in awarding
in payroll reinstatement? separation pay in spite of the finding that
respondent had not been dismissed. Properly
A: GENERALLY, YES. However, since it is the speaking, liability for the payment of separation pay
mandate of the law, although it is harsh, there is no is but a legal consequence of illegal dismissal where
violation under the dictum of dura lex sed lex. reinstatement is no longer viable or feasible. As a
(Poquiz, 2018) relief granted in lieu of reinstatement, it goes
without saying that an award of separation pay is
The option in Art. 229 of the LC is exclusively granted inconsistent with a finding that there was no illegal
to the Er. The event that gives rise for its exercise is dismissal. This is because an employee who had not
not the reinstatement decree of a LA but the writ for been dismissed, much less illegally dismissed,
its execution commanding the Er to reinstate the Ee, cannot be reinstated.
while the final act which compels the Er to exercise
the option is the service upon it of the writ of Moreover, as there is no reinstatement to speak of,
execution when, instead of admitting the Ee back to respondent cannot invoke the doctrine of strained
his work, the Er chooses to reinstate the Ee in the relations to support his prayer for the award of
payroll only. separation pay.
This option is based on practical considerations. The The award of separation pay cannot be justified
Er may insist that the dismissal of the Ee was for a solely because of the existence of "strained
just and valid cause and the latter's presence within relations" between the employer and the employee.
its premises is intolerable by any standard; or such It must be given to the employee only as an
presence would be inimical to its interest or would alternative to reinstatement emanating from illegal
demoralize the co-Ees. dismissal. When there is no illegal dismissal, even if
the relations are strained, separation pay has no
Thus, while payroll reinstatement would in fact be legal basis. Besides, the doctrine on "strained
unacceptable because it sanctions the payment of relations" cannot be applied indiscriminately since
salaries to one not rendering service, it may still be every labor dispute almost invariably results in
the lesser evil compared to the intolerable presence "strained relations;" otherwise, reinstatement can
in the workplace of an unwanted. Ee. (Maranao never be possible simply because some hostility is
Hotel v. NLRC, G.R. No. 110027, 16 Nov. 1994) engendered between the parties as a result of their
disagreement. That is human nature. (Capili v. NLRC,
G.R. No. 120802, 17 June 1997)
2024 GOLDEN NOTES
withheld from him up to the time of his actual
In fine, petitioner is ordered to reinstate respondent reinstatement. (Art. 294, LC)
to his former position without the payment of
backwages. If respondent voluntarily chooses not to Issuance of Writ
return to work, he must then be considered as
having resigned from employment. This is without The LA shall motu proprio issue a corresponding
prejudice, however, to the willingness of both writ to satisfy the reinstatement wages as they
parties to continue with their former contract of accrue until actual reinstatement or reversal of the
employment or enter into a new one whenever they order of reinstatement. (Sec. 12, Rule XI, 2011 NLRC
so desire.” Rules of Procedure)
Order of Reinstatement Session Delights Doctrine
An order for reinstatement entitles an Ee to receive The doctrinal case of Session Delights Ice Cream and
his accrued backwages from the moment the Fast Foods v. CA (G.R. No. 172149, 08 Feb. 2010)
reinstatement order was issued up to the date when sheds much light in the case at hand. The re-
the same was reversed by a higher court without computation of the consequences of illegal dismissal
fear of refunding what he had received. (Pfizer v. upon execution of the decision does not constitute
Velasco, G.R. No. 177467, 09 Mar. 2011) an alteration or amendment of the final decision
being implemented. The illegal dismissal ruling
Art. 229 vs. Art. 294 stands; only the computation of monetary
consequences of this dismissal is affected and this is
Art. 229 Art. 294 not a violation of the principle of immutability of
May be availed of as Presupposes that the final judgments.
soon as the LA renders judgment has already
a judgment declaring become final and Reinstatement Pending Appeal
that the dismissal of executory.
the Ee is illegal and A dismissed Ee whose case was favorably decided by
ordering said Consequently, there is the LA is entitled to receive wages pending appeal
reinstatement. It may nothing left to be done upon reinstatement, which is immediately
be availed of even except the execution executory. Unless there is a restraining order, it is
pending appeal thereof. ministerial upon the LA to implement the order of
reinstatement and it is mandatory on the Er to
comply therewith.
NOTE: An award or order for reinstatement is self-
executory. It does not require the issuance of a writ
NOTE: After the LA’s decision is reversed by a higher
of execution. (Pioneer Texturizing Corp. v. NLRC, G.R. tribunal, the Ee may be barred from collecting the
No. 118651, 06 Oct. 1997) accrued wages, if it is shown that the delay in
enforcing the reinstatement pending appeal was
Security of Tenure without fault on the part of the Er.
In cases of regular employment, the employer shall

Two-Fold Test
not terminate the services of an employee except for
a just cause of when authorized by this Title. An 1. There must be actual delay or the fact that the
employee who is unjustly dismissed from work shall order of reinstatement pending appeal was not
be entitled to reinstatement without loss of executed prior to its reversal; and
seniority rights and other privileges and to his FULL
BACKWAGES, inclusive of allowances, and to his 2. The delay must not be due to the Er’s unjustified
other benefits or their monetary equivalent act or omission. If the delay is due to the Er’s
computed from the time his compensation was
unjustified refusal, the Er may still be required
2024 GOLDEN NOTES
to pay the salaries notwithstanding the reversal
of the LA’s decision. (Garcia v. PAL, G.R. No. Q: What happens if there is an Order of
164856, 29 Aug. 2009) Reinstatement but the position is no longer
available?
Q: May the Court order the reinstatement of a
dismissed Ee even if the prayer of the complaint A: The Ee should be given a substantially equivalent
did not include such relief? position. If no substantially equivalent position is
available, reinstatement should not be ordered
A: YES. So long as there is a finding that the Ee was because that would in effect compel the Er to do the
illegally dismissed, the court can order the impossible. In such a situation, the Ee should merely
reinstatement of an Ee even if the complaint does be given a separation pay consisting of one (1)
not include a prayer for reinstatement unless the Ee month salary for every year of service. (Grolier Int’l
has waived his right to reinstatement. By law, an Ee Inc. v. ELA, G.R. No. 83523, 31 Aug. 1989)
who is unjustly dismissed is entitled to
reinstatement among others. The mere fact that the Q: Eteliano Reyes, Jr. was employed by Asian
complaint did not pray for reinstatement will not Terminals, Inc. (ATI) as Supervisor III/Foreman
prejudice the Ee, because technicalities of law and on Board who shall be responsible in ensuring
procedure are frowned upon in labor proceedings. that shift vessel operations are carried in
(Pheschem Industrial Corp. v. Moldez, G.R. No. accordance with ATI standards. He first went to
116158, 09 May 2005) Bay 30, but he had to leave the All Purpose
Personnel (APP) tasked to finish the lashing
NOTE: Reinstatement ordered by LA is self- operations as he needed to supervise the
executory as provided under Art. 229 while the one loading operations at Bay 38.
by the NLRC is not because it awaits the issuance of
a writ of execution under Art. 230. (Azucena, 2016) With a twist of fate, an accident occurred at Bay
30 wherein a lashing bar fell on the pier apron
Q: A complaining Ee obtained a favorable hitting Manuel Quiban a vessel security guard.
decision in an illegal dismissal case. The LA As expected, ATI directed Reyes to explain why
ordered her immediate reinstatement. The Er he should not be penalized for negligence. In his
opted payroll reinstatement pending appeal. response, Reyes clarified that while completing
The NLRC ruled that the dismissal was valid. The the lashing operations at Bay 30, "EC Planner"
Er stopped the payroll reinstatement. The Ee directed him to transfer to Bay 38 to supervise
elevated the case to the CA, and eventually to the the commencement of loading operations.
SC. The SC upheld the dismissal. Is the Ee entitled Pursuant to said instruction, Reyes left the four
to continued payroll reinstatement after the (4) APPs to complete lashing operations at Bay
NLRC decision? 30 and proceeded to Bay 38 where a loading
operation was about to start and the crane was
A: NO. The Ee is not entitled to continued payroll already positioned.
reinstatement. The decision of the NLRC on appeals
from decisions of the LA shall become final and In a Notice to Explain with Preventive
executory after 10 calendar days from receipt Suspension, the ATI informed Reyes that his
thereof by the parties. That the CA may take failure to ensure that the safeguards for works
cognizance of and resolve a petition for certiorari for on board the vessel were faithfully observed
the nullification of the decisions of the NLRC on constitutes probable violation under Sec. 2.2 of
jurisdictional and due process considerations does the CTOP (neglect of work, incompetence,
not affect the statutory finality of the NLRC decision. inefficiency, negligence, failure to perform
Since the NLRC decision which upheld the dismissal duties and/or responsibilities, or failure to
became final, the Er was correct in stopping the observe standard operating procedures, in any
payroll reinstatement of the Ee. (Bago v. NLRC, G.R. case resulting in injury or death) and may merit
No. 170001, 04 Apr. 2007)
2024 GOLDEN NOTES
the penalty of dismissal. Is Reyes, Jr. illegally of the Labor Arbiter and declared that Juanito’s
dismissed? dismissal was valid. The reversal ultimately
became final.
A: NO. Indeed, as pointed out by the CA, ATI failed to
present clear, accurate, positive, and convincing May Mandarin Company recover the backwages
evidence that there is just cause to terminate Reyes' and other benefits paid to Juanito pursuant to
employment. First, Reyes merely followed the rules the decision of the LA in view of the reversal by
in the performance of his job. In fact, his transfer to the NLRC? Rule, with reasons. (2017 BAR)
Bay 38 was by instructions of the EC Planner.
Second, his transfer to Bay 38 was necessary A: NO. Mandarin Company may not recover the
because a quay crane already been prepositioned backwages and other benefits paid to Juanito.
and the loading operation was about to commence.
Reinstatement cannot be barred especially when In Garcia v. Philippine Airlines, Inc. (G.R. No. 164856,
the Ee has not indicated an aversion to returning to 20 Jan. 2009), the Supreme Court held that a
work or does not occupy a position of trust and reinstated employee need not refund the backwages
confidence or has no say in the operation of the Er's and other benefits paid pursuant to an order of
business. Here, aside from the fact that this issue reinstatement by the Labor Arbiter. The rationale is
was only raised for the first time, there is also no to help the employee make both ends meet during
compelling evidence presented to support the the pendency of the appeal and to prevent a
conclusion that the parties' relationship has gone so situation where the dismissed employee will not
sour to render reinstatement impracticable. Also, spend the reinstatement wages for fear of refunding
Reyes has not demonstrated unwillingness to be the same if the decision of the Labor Arbiter is
reinstated and the existence of a confidential subsequently reversed.
relationship between him, as a supervisory Ee, and
ATI, has not been established. For lack of evidence
on record, it appears that his position was not a
B. NATIONAL LABOR RELATIONS COMMISSION
sensitive position as would require complete trust
and confidence, and where personal ill will would
foreclose his reinstatement. (Asian Terminals, Inc. v.
National Labor Relations Commission (NLRC)
Reyes, Jr., G.R. No. 240507, 28 Apr. 2021)
It is an administrative body with quasi-judicial

Refund Doctrine
functions and the principal government agency that
hears and decides labor-management disputes. It is
The refund doctrine easily demonstrates how a
attached to the DOLE solely for program and policy
favorable decision by the LA could harm, more than
coordination only.
help, a dismissed employee. (Garcia v. Philippine
Airlines, Inc., G.R. No. 164856, 20 Jan. 2009)
Essentially, NLRC continues to act collegially,
whether it performs administrative or rule-making
Q: Juanito initiated a case for illegal dismissal
functions or exercises appellate jurisdiction to
against Mandarin Company. The Labor Arbiter
review decisions and final orders of the Labor
decided in his favor, and ordered his immediate
Arbiters. (Azucena, 2016)
reinstatement with full backwages and without
loss of seniority and other benefits. Mandarin
Powers and Functions of the NLRC
Company did not like to allow him back in its
premises to prevent him from influencing his co-
1. NLRC En Banc
workers to move against the interest of the
company; hence, it directed his payroll
a. Rule Making Power – To promulgate rules
reinstatement and paid his full backwages and
and regulations governing the hearing and
other benefits even as it appealed to the NLRC. A
disposition of cases before it and its
few months later, the NLRC reversed the ruling
2024 GOLDEN NOTES
regional branches, as well as those h. Power to Issue Injunction or T.R.O - The
pertaining to its internal functions and such Commission has injunction power or,
rules and regulations as may be necessary simply, the power to command that an act be
to carry out the purposes of this Code; (Art. done or not done. Art. 225(e) explains the
225, LC) injunctive power of the Commission and the
prerequisites for its exercise. (Azucena,
b. Power to Issue Compulsory Processes – 2016)
Under Art. 225 (b) of the LC, the Commission
has the power to administer oaths, summon NOTE: The NLRC shall have exclusive appellate
parties, and issue subpoena ad jurisdiction over all cases decided by labor
testificandum and duces tecum; (Azucena, arbiters as provided in Art. 217(b) of the LC. In
2016) short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and,
c. Power to Investigate and Hear Disputes therefore, it cannot entertain the private
within its Jurisdiction – Under Art. 225 (c) respondents' petition for injunction which
of the LC, the Commission has the power to challenges the dismissal orders of petitioner.
conduct investigations for the Art. 218(e) of the LC does not provide blanket
determination of a question, matter, or authority to the NLRC or any of its divisions to
controversy within its jurisdiction; and issue writs of injunction, considering that Sec. 1
proceed to hear and determine the disputes; of Rule XI of the New Rules of Procedure of the
(Azucena, 2016) NLRC makes injunction only an ancillary
remedy in ordinary labor disputes. (PAL Inc v.
d. Contempt Power – Under Art. 225 (d) of the NLRC, G.R. No. 120567, 20 Mar. 1998)
LC and Rule 11 of the NLRC 2011 Rules of
Procedure, the Commission has the power to 2. NLRC Division (Eight Divisions with three
hold any person in direct or indirect members)
contempt; (Azucena, 2016)
a. Adjudicatory;
e. Power to Conduct Ocular Inspection - b. Exercises all other powers, functions and
Under Art. 226 of the LC, the chairman, any duties; and
commissioner, labor arbiter or their duly c. Has exclusive appellate jurisdiction over
authorized representatives may, at anytime cases within their respective territorial
during working hours: jurisdiction.
i. Conduct an ocular inspection on any Allocation of Powers between NLRC En Banc and
establishment, building, ship or vessel, its Divisions
place or premises, including any work, The Commission shall sit en banc only for purposes
material implement, machinery, of promulgating rules and regulations governing the
appliance or any object therein; and hearing and disposition of cases before any of its
divisions and regional branches and formulating
ii. Ask any Ee, laborer or any person, as policies affecting its administration and operations.
the case may be, for any information or RA 7700 requires an en banc decision so that a case
data concerning any matter or question within the jurisdiction of one division may be heard
relative to the object of the and decided by another division whose docket can
investigation. (Azucena, 2016) accommodate the additional workload. (Azucena,
2016)
f. Adjudicatory Power: Original
g. Adjudicatory Power: Appellate
2024 GOLDEN NOTES
Individual Commissioner Does Not Have Q: Philippine News Network (PNN) engages the
Adjudicatory Power services of Anya, a prominent news anchor from
a rival station, National News Network (NNN).
The law lodges the adjudicatory power on each of the NNN objects to the transfer of Anya claiming that
eight divisions, neither on the individual she is barred from working in a competing
commissioners nor on the whole commission. The company for a period of three years from the
“division” is a legal identity, not the person who sits expiration of her contract. Anya proceeds to sign
in it. Hence, an individual commissioner has no with PNN which then asks her to anchor their
adjudicatory power, although of course, he can nightly newscast. NNN sues Anya and PNN before
concur or dissent in deciding a case. the NLRC, asking for a labor injunction. Anya and
PNN object claiming that it is a matter cognizable
Adjudication of cases by the NLRC by a regular court and not the NLRC. Is NNN’s
remedy correct? Why or why not?
1. The NLRC adjudicates cases by division - The
Commission shall exercise its adjudicatory and A: NO. The NLRC has no jurisdiction because of the
all other powers, functions and duties through following reasons: (1) As to PNN, there is no Er-Ee
its divisions. (Art. 220, LC) relationship between itself and NNN; hence, the
NLRC cannot hear and resolve their dispute
2. Two votes requirement - The presence of a (Reasonable Causal Connection (RCC) Rule); (2) As
majority of all the members of the Commission to Anya, the injunctive power of the NLRC is
en banc or of a Division, as the case may be, shall ancillary in nature; hence, it requires a principal
constitute a quorum. The vote of the majority of case, which is absent. Besides, the dispute between
the members constituting a quorum shall be her and PNN is not resolvable solely through the
necessary to pronounce a decision or resolution. application of the Labor Code, other labor statutes,
CBA or employment contract.
NOTE: Whenever the required membership in a
division is not complete and the concurrence of Q: Some disgruntled members of Bantay Labor
the Commissioners to arrive at judgment or Union filed with the Regional Office of the DOLE a
resolution cannot be obtained, the Chairman written complaint against their union officers for
shall designate such number of additional mismanagement of union funds. The RD
Commissioners from the other divisions as may dismissed their complaint. Hence, they elevated
be necessary. (Art. 220, LC) the RD’s decision to the NLRC. The union officers
moved to dismiss on the ground of lack of
3. It shall be mandatory for the division to meet for jurisdiction. Are the union officers correct? Why?
purposes of consultation.
A: YES. The union officers are correct in claiming
NOTE: The conclusion of a division on any case that the NLRC has no jurisdiction over the appealed
submitted to it for decision should be reached in ruling of the RD. In Barles v. Bitonio (G.R. No. 120220,
consultation before the case is assigned to a 16 June 1999), the SC ruled that “appellate authority
member for the writing of the opinion. (Art. 220, over decisions of the RD involving examination of
LC) union account is expressly conferred on the BLR
under the Rule of Procedure on Mediation-
4. A certification that a consultation has been Arbitration.”
conducted, signed by the presiding
commissioner of the division, shall be issued. A Q: May the NLRC or the courts take
copy of which shall be attached to the record of jurisdictional cognizance over compromise
the case and served upon the parties. (Art. 220, agreements or settlements involving labor
LC) matters?
2024 GOLDEN NOTES
A: NO. Any compromise agreement, including those handling labor management relations; and
involving labor standards laws, voluntarily agreed 4. Preferably a resident of the region where he is to
upon by the parties with the assistance of the hold office. (Art. 222, LC)
Bureau or the regional office of DOLE, shall be final
and binding upon the parties. The NLRC or any court Qualifications of an Executive Labor Arbiter
shall not assume jurisdiction over issues involved
therein except in case of non-compliance thereof or 1. Member of the Philippine Bar;
if there is prima facie evidence that the settlement 2. Engaged in the practice of law in the Philippines
was obtained through fraud, misrepresentation, or for at least 10 years;
coercion. (Art. 227, LC) 3. At least 5 years of experience or exposure in
handling labor management relations. (Art. 222,
Composition of the NLRC LC)
The Commission may sit en banc or in eight (8) Terms of Office of the Chairman, Commissioners,
divisions, each composed of three (3) members. and Labor Arbiters
(Art. 220, LC)
They shall hold office during good behavior until
1. Chairman; and they reach the age of 65 unless removed for causes
2. 23 Members. as provided by law or become incapacitated to
discharge the function of his office. Provided,
a. 8 members each of whom shall be however, that the President of the Philippines may
chosen only from among the nominees extend the services of the Commissioners and Las up
of the workers and Er organization to the maximum age of 70 years upon the
respectively; recommendation of the Commission en banc. (Art.
222, LC)
b. The Chairman and the 7 remaining
members shall come from the public Certified Cases
sector, with the latter to be chosen
preferably from among the incumbent It is the declared policy of certification of labor
LAs; and disputes for compulsory arbitration to ensure and
maintain industrial peace based on social justice
c. Upon assumption into office, the and national interest by having a full, complete and
members nominated by the workers immediate settlement or adjudication of all labor
and Ers organization shall divest disputes between the parties, as well as issues that
themselves of any affiliation with or are relevant to or incidents of the certified issues.
interest in the federation or association (Rule VIII, NLRC Rules of Procedure)
to which they belong. (Art. 220, LC)
These are cases certified or referred to the
NOTE: There is no need for the COA to confirm the Commission for compulsory arbitration under Art.
positions in the NLRC. Such requirement has no 263(g) of the LC dealing about national interest
constitutional basis. (Calderon v. Carale, G.R. No. cases. (Sec. 2, Rule VIII, NLRC Rules of Procedure)
91636, 23 Apr. 1992)
A national interest dispute may be certified to the
Qualifications of the Chairman and the NLRC even before a strike is declared since Art.
Commissioners 263(g) of the LC does not require the existence of a
strike, but only of an industrial dispute. (Government
1. Member of the Philippine Bar; Service Insurance System Ees Association (GSISEA) v.
2. Engaged in the practice of law in the Philippines Court of Industrial Relations, G.R. No. L-18734, 30
for at least 15 years; Dec. 1961)
3. At least 5 years of experience or exposure in
2024 GOLDEN NOTES
Effects of Certification of Labor Disputes
NOTE: Same effect of certification to the NLRC as in
The certification of a labor dispute to the NLRC has cases assumed directly by DOLE Secretary. The
the following effects: effects described above are also applicable when the
DOLE Secretary directly assumes jurisdiction over a
1. On intended or impending strike or lockout – labor dispute affecting industries imbued with
Upon certification, the intended or impending national interest and decides it himself.
strike is automatically enjoined,
notwithstanding the thing of any motion for Function of the NLRC in Certified Cases
reconsideration of the certification order or the
non-resolution of any such motion which may When sitting in a compulsory arbitration certified to
have been duly submitted to the SOLE; by the SOLE, the NLRC is not sitting as a judicial
court but as an administrative body charged with
2. On actual strike or lockout – If a work the duty to implement the order of the SOLE. As an
stoppage has already taken place at the time of implementing body, its authority does not include
the certification, all striking or locked out Ees the power to amend the Secretary’s order. (UST v.
shall immediately return to work and the Er NLRC, G.R. No. 89920, 18 Oct. 1990)
shall immediately resume operations and
readmit all workers under the same terms and Effect of Defiance from the Certification Order
conditions prevailing before the strike or
lockout; Non-compliance with the certification order of the
SOLE shall be considered as an illegal act committed
3. On cases already filed or may be filed – All during the strike or lockout and shall authorize the
cases between the same parties, except where Commission to enforce the same under pain of
the certification order specifies otherwise the immediate disciplinary action, including dismissal
issues submitted for arbitration which are or loss of employment status or payment by the
already filed or may be filed and are relevant to locking-out Er of backwages, damages and/or other
or are proper incidents of the certified case, affirmative relief, even criminal prosecution against
shall be considered subsumed or aborted by the the liable parties. (Sec. 4, Rule VIII, NLRC 2011 Rules
certified case, and shall be decided by the of Procedure)
appropriate Division of the Commission;
The Commission may also seek the assistance of law
4. On other pending cases – The parties to a enforcement agencies to ensure compliance and
certified case, under pain of contempt, shall enforcement of its orders and resolutions. (Ibid.)
inform their counsels and the Division
concerned of all cases pending with the Procedure in Deciding Certified Cases
Regional Arbitration Branches and the
Voluntary Arbitrators relative or incident to the 1. When there is no need to conduct a clarificatory
certified case before it; and hearing, the Commission shall resolve all
certified cases within 30 calendar days from
5. On which Division should take cognizance of receipt by the assigned Commissioner of the
the certified case in case entity has several complete records, which shall include the
workplaces in different regions - Whenever a position papers of the parties and the order of
certified labor dispute involves a business the Secretary of Labor and Employment
entity with several workplaces located denying the motion for reconsideration of the
indifferent regions, the Division having certification order, if any.
territorial jurisdiction over the principal office
of the company shall acquire jurisdiction to 2. Where a clarificatory hearing is needed, the
decide such labor dispute, unless the Commission shall, within five (5) calendar days
certification order provides otherwise. from receipt of the records, issue a notice to be
2024 GOLDEN NOTES
served on the parties through the fastest means
available, requiring them to appear and submit b. APPELLATE
additional evidence, if any. All certified cases (Art. 129, LC; Sec. 1, Rule VI, 2011 NLRC Rules of
shall be resolved by the Commission within Procedure, as amended)
sixty (60) calendar days from receipt of the
complete records by the assigned The NLRC shall have exclusive appellate jurisdiction
Commissioner. over:
3. No motion for extension or postponement shall 1. Decisions, awards, or orders of the Labor
be entertained. (Sec. 5, Rule VIII, NLRC 2011 Arbiter over:
Rules of Procedure)
a. Cases covered by Art. 224(b);
b. Cases covered by Sec. 10 of Migrant
1. JURISDICTION
Worker’s Act; and
c. Cases decided under Art. 124 on wage
a. ORIGINAL
distortion in non-unionized
(Arts. 225 (d), (e) and 278 (g), LC; Sec. 1, Rule XII,
establishment;
2011 NLRC Rules of Procedure, as amended)
2. Denial of the claim of the third-party claimant
The NLRC has exclusive original jurisdiction over where property was levied by the Sheriff of LA
the following cases: (In2Cert-CoVe)
3. Cases decided by the Regional Offices of DOLE
1. Certified labor disputes causing or likely to in the exercise of its adjudicatory function
cause a strike or lockout in an industry under Art. 129 of the LC over monetary claims
indispensable to national interest, certified to it
of workers amounting to not more than P5,000
by the SOLE or the President of the Philippines and not accompanied by claim for
for compulsory arbitration; reinstatement; and
2. Injunction in ordinary labor disputes to enjoin 4. Decision by the LA in contempt cases. (Art.
or restrain any actual or threatened
225(d), LC)
commission of any or all prohibited or unlawful
acts or to require the performance of a
particular act in any labor dispute which, if not 2. MODE OF APPEAL AND REQUISITES
restrained or performed forthwith, may cause
grave or irreparable damage to any party; Remedy of Aggrieved Party from the NLRC
Decision
3. Injunction in strikes or lockouts under Art. 279
of the LC; Judicial review of NLRC’s decision is available
through a petition for certiorari (Rule 65, ROC)
4. Contempt cases; and which should be initially filed with the CA in strict
observance of the doctrine on the hierarchy of
5. Verified petitions (Sec. 3, Rule XII, 2011 NLRC courts as the appropriate forum for the relief
Rules of Procedure) desired. The CA is procedurally equipped to resolve
unclear or ambiguous factual finding, aside from the
increased number of its component divisions. (St.
Martin Funeral Home v. NLRC, G.R. No. 130866, 16
Sept. 1998)
2024 GOLDEN NOTES
Gadia v. Sykes Asia, Inc., G.R. No. 209499, 28 Jan.
2015)
C. COURT OF APPEALS; REQUISITES
(Rule 65, ROC)
Period When the Petition for Certiorari Should
Be Filed with the Court of Appeals
Court of Appeals
Under Sec. 4, Rule 65 (as amended by A.M. No. 00-2-
GR: Decisions of the DOLE secretary, NLRC, and BLR 03-SC) of the Rules of Civil Procedure, the petition
must be filed within 60 days from notice of the
in its appellate jurisdiction, are NOT appealable to
the CA as per the St. Martin Ruling (G.R. No. 130866, judgment or from notice of the resolution denying
16 Sept. 1998). However, their decisions may be the petitioner’s motion for reconsideration. This
amendment is effective 1 Sept. 2000 but being
elevated to the CA via petition for certiorari under
Rule 65. curative may be given retroactive application.
(Narzoles v. NLRC, G.R. No. 141959, 29 Sept. 2000)
XPN: Orders or awards of the VA may be appealed to
the CA via Petition for Review under Rule 43. The petition must be filed within 60 days from
notice of the judgment or from notice of the
resolution denying the petitioner’s motion for
Requisites for Filing a Petition for Certiorari
reconsideration. (Sec. 4, Rule 65 [as amended by A.M.
No. 00-2-03-SC] of the Rules of Civil Procedure)
1. Allegation that such tribunal, board or officer
has acted:
NOTE: The above-mentioned amendment is
effective 01 Sept. 2000 but being curative may be
a. Without or in excess its or his
given retroactive application. (Narzoles v. NLRC, G.R.
jurisdiction, or
b. With grave abuse of discretion No. 141959, 29 Sept. 2000)
amounting to lack or excess of
Computation of Period for Filing
jurisdiction; and
The period within which a petition for certiorari

2. There is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law; against a decision of the NLRC may be filed should
be computed from the date counsel of record of the
party receives a copy of the decision or resolution,
NOTE: In order for the special civil actions for
certiorari and prohibition under Rule 65 of the and not from the date the party himself receives a
ROC to prosper, there must be a showing that copy thereof. (Ginete v. Sunrise Manning Agency, G.R.
No. 142023, 21 June 2001)
there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.
NOTE: Reglementary period referred to calendar
(Pichay, Jr. v. The Law Department, G.R. No.
and not working days. (Pacana v. NLRC, G.R. No.
258393, 04 Jan. 2022) Hence, a Motion for
Reconsideration must have been filed before 83513, 18 Apr. 1989)
the DOLE Secretary, NLRC, or BLR Director, as
Q: An employee filed a complaint against his
the case may be.
employer before the National Labor Relations
Commission (NLRC). The labor arbiter decided
Q: When may grave abuse of discretion may be
the case in favor of the employee. The employer
ascribed to the NLRC?
received a copy of the decision on 10 Apr. 1984.
April 20 being a Good Friday and the following
A: In labor disputes, grave abuse of discretion may
be ascribed to the NLRC when, inter alia, its findings Saturday having been declared a non-working
and the conclusions reached thereby are not public holiday by the President, the employer
filed his appeal with the NLRC from the said
supported by substantial evidence. (Ma. Charito C.
decision on 23 Apr. 1984.
2024 GOLDEN NOTES
same action or proceeding at any time during its
Assuming the decision of the labor arbiter is pendency.
affirmed by the NLRC. What is the recourse of
the employer? State the nature of the action, the Policy of the Supreme Court Regarding Appeals
court which has jurisdiction over the action, and in Labor Cases
the period within which the same must be filed.
The Supreme Court is very strict regarding appeals
A: In the exercise of its appellate jurisdiction over filed outside the reglementary period for filing the
decisions of labor arbiters, a decision of the National same. To extend the period of the appeal is to delay
Labor Relations Commission is final and executory the case, a circumstance which could give the Er the
after 10 calendar days from receipt thereof by the chance to wear out the efforts and meager resources
parties. (Art. 223, LC) of the worker that the latter is constrained to give up
for less than what is due him. (Firestone Tire and
In view of the above provision, the employer in the Rubber Co. of the Philippines v. Firestone Tire and
case in the question who is aggrieved by the Rubber Co. Ees Union, G.R. No. 75363, 04 Aug. 1992)
decision of the NLRC should file a petition for
certiorari with the Supreme Court under Rule 65 of Q: The Labor Arbiter ruled in favor of Brown and
the Rules of Court within 60 days from receipt of the declared his dismissal illegal, holding. that
decision which is the subject of the petition for Brown was regular Ee. On appeal, the NLRC
certiorari. affirmed the LA decision. Through a petition for
Certiorari with the CA, the CA ruled that Brown
was legally dismissed. According to the CA, there
was no showing that Brown was prevented from
D. SUPREME COURT; REQUISITES
(Rule 45, ROC) returning or was deprived of work. Brown was
not dismissed but was only informed of the
complaints against him.
Appeal from a Judgment, or Final Order or
Resolution of the CA In turn, Brown filed a Petition in the Supreme
Court under Rule 45. Brown contends that
A party desiring to appeal may file with the Supreme Marswin failed to discharge its burden to prove
Court a verified petition for review on certiorari that he committed abandonment. On the other
hand, Marswin (Er) counters that the Court
under Rule 45 within 15 days from notice of the
judgment, final order or resolution appealed from. should not give due course to the Petition
(Sea Power Shipping Enterprises, Inc. v. CA, G.R. No. because it raises factual issues which are not
within the ambit of a petition under Rule 45 of
138270, 28 June 2001)
the Rules of Court. Should the petition under
Rule 45 be given due course?
NOTE: Filing of petition with Supreme Court under
Sec.1, Rule 45, Rules of Court — A party desiring to
appeal by certiorari from a judgment, final order or A: YES. As a rule, the Court is not a trier of facts and
only questions of law may be raised in a petition
resolution of the CA, the Sandiganbayan, the CTA,
under Rule 45. A departure from this rule is
the RTC, or other courts, whenever authorized by
law, may file with the Supreme Court a verified nevertheless allowed where the factual findings of
the CA are contrary to those of the lower courts or
petition for review on certiorari. The petition may
tribunals. Here, the findings of the CA vary with
include an application for a writ of preliminary
injunction or other provisional remedies and shall those of the NLRC and LA. As such, the Court deems
it necessary to review the records and determine
raise only questions of law, which must be distinctly
set forth. The petitioner may seek the same which findings and conclusion truly conform to the
provisional remedies by verified motion filed in the evidence adduced by the parties. (Ernesto Brown v.
Marswin Marketing Inc., G.R. No. 206891, 15 Mar.
2017)
2024 GOLDEN NOTES
Summary of Remedies rendered in labor cases by appropriate officers and
tribunals of the DOLE.
File a petition for review on certiorari under
Rule 45 before the SC XPN: A separate civil action for recovery of
ownership of the property would not constitute
File a petition for certiorari under Rule 65 interference with the powers or processes of the LA
before the CA and NLRC which rendered the judgment to enforce
and execute upon the levied properties. (Azucena,
2016)
File a MR before the NLRC
File an appeal to the NLRC

E. BUREAU OF LABOR RELATIONS;
(Art. 229)
JURISDICTION AND PROCEDURE
(Rule XI, DOLE D.O. No. 40- 03)
Decision of Labor Arbiter
MR is not allowed
(Sec. 5, Rule V, NLRC 2011 Rules) Coverage of the BLR’s Jurisdiction and Functions
Writ of Execution The BLR no longer handles all labor management

disputes. Its functions and jurisdiction are largely
It is a court order to carry out, to implement, a final confined to:
judgment. (Azucena, 2016)
1. All inter-union and intra-union conflicts; (Art.
The issuance of a writ of execution is a matter of 226, LC)
right on the part of the prevailing party once a
judgment becomes final and executory. The issuance 2. All disputes, grievances or problems arising
thereof is a ministerial duty on the part of the Labor from or affecting labor-management relations
Arbiter. (ABC Manpower Agency, Inc. v. Villena, G.R. in all workplaces, except those arising from the
No. 243680 (Notice), 04 Mar. 2019) implementation or interpretation of collective
bargaining agreements. (Art. 226, LC)
Q: Who may issue writ of execution in labor
cases 3. Complaints involving federations, national
unions, industry unions, its officers or member
A: A writ of execution may be issued by the following organizations (Sec. 4, Rule XI, Book V, Omnibus
officials: Rules)
1. Secretary of Labor and Employment; 4. Petition for the conduct of election of officers in
2. DOLE Regional Director; the case of federations, national or industry
3. NLRC; unions and trade union centers. (Sec. 2, Rule XII,
4. Labor Arbiter; Book V, Omnibus Rules)
5. Med-Arbiter;
6. Voluntary Arbitrator; and 5. A request for examination of books of accounts
7. Panel of Arbitrators (Azucena, 2016) of federations or national unions and trade
union centers pursuant to Art. 274. (Sec. 3, Rule
Injunction Against LA/NLRC Decision XIII, Book V, Omnibus Rules)
GR: A regular court has no jurisdiction to hear and

decide questions which arise and are incidental to
the enforcement of decisions, orders or awards
2024 GOLDEN NOTES
Jurisdiction over Labor Management Problems 4. Validity/invalidity of union affiliation or
or Disputes is Also Exercised by Other Offices disaffiliation;
1. DOLE Regional Offices; 5. Validity/invalidity of acceptance/ non-

2. Office of the Secretary of Labor; acceptance for union membership;
3. NLRC;
4. POEA; 6. Validity/invalidity of voluntary recognition;
5. OWWA;
6. SSS-ECC; 7. Opposition to application for union or CBA
7. RTWPB; registration;
8. NWPC; and
9. Regular courts over intra-corporate disputes. 8. Violations of or disagreements over any
provision of the constitution and by-laws of
Mediator-Arbiter union or workers’ association;
An officer in the Regional Office or Bureau 9. Disagreements over chartering or registration

authorized to hear, conciliate, and decide of labor organizations or the registration of
representation cases or assist in the disposition of CBAs;
intra or inter-union disputes.
10. Violations of the rights and conditions of
Kinds of Cases within BLR’s Jurisdiction membership in a union or workers’ association;
The BLR has original and exclusive jurisdiction over: 11. Violations of the rights of LLO, except
1. Inter-union disputes; interpretation of CBAs;
2. Intra-union disputes; and
3. Other related labor relations disputes. 12. Validity/invalidity of impeachment/
expulsion/suspension or any disciplinary
Inter-Union Disputes action meted against any officer and member,
including those arising from non-compliance
1. Validity/invalidity of SEBA, certification with the reportorial requirements under Rule V;
election, consent election, run-off election or re- and
run election.
13. Such other disputes or conflicts involving the
2. Such other disputes or conflicts involving the rights to self-organization, union membership
rights to self-organization, union membership and collective bargaining
and collective bargaining between and among
legitimate labor organizations. (Sec. 1, Rule XI, a. Between and among LLO; and
Book V, IRR, as amended by D.O. 40-F-03) b. Between and among members of a
union or workers’ association. (Sec. 1,
Intra-Union Disputes Rule XI, Book V, IRR as amended by D.O.
40-F-03)
1. Conduct or nullification of election of union and
workers’ association officers; Coverage of the Phrase “Other Related Labor
Relations Disputes”
2. Audit/accounts examination of union or
workers’ association funds; 1. Any conflict between:
a. A labor union and the Er;
3. Deregistration of CBAs; b. A labor union and a group that is not a
LO; or
2024 GOLDEN NOTES
c. A labor union and an individual who is 5. Lack of jurisdiction of the investigating body;
not a member of such union; action for the administrative agency is patently
illegal, arbitrary and oppressive;
2. Cancellation of registration of unions and
worker’s associations filed by individual/s 6. Issue is purely a question of law;
other than its members, or group that is not a
LO; and 7. Where the administrative agency had already
prejudged the case; and
3. A petition for Interpleader involving labor
relations. (Sec. 2 Rule XI, Book V, IRR as 8. Where the administrative agency was
amended by D.O. 40-F-03) practically given the opportunity to act on the
case but it did not.
Filing a Complaint or Petition Involving
Intra/Inter-Union Disputes Appeal of a Decision in Inter/Intra-Union
Dispute
A legitimate labor organization or its members may
file a complaint or petition involving intra/inter- A decision in an inter/intra-union dispute may be
union disputes. (Sec. 5, Rule XI, Book V, IRR as appealed, upon compliance with the following rules:
1. Formal Requirements
Filing a Complaint or Petition if the Issue
Involves the Entire Membership a. Under oath
b. Consist of a memorandum of appeal
The complaint must be signed by at least 30% of the c. Based on either of the following
entire membership of the union. grounds:
i. Grave abuse of discretion;
Filing a Complaint or Petition if the Issue ii. Gross violation of the rules;
Involves a Member Only iii. With supporting arguments and
evidence.
Only the affected member may file the complaint.
(Rule XI, Sec. 5, Book V, IRR, as amended by D.O. 40-F- 2. Period – Within 10 days from receipt of
03) decision. (Sec. 16, Rule XI, Book V, IRR as
GR: Redress must first be sought within the union
itself in accordance with its constitution and by- 3. To whom appealable
laws.
a. BLR – If the case originated from the
XPNs: Med-Arbiter/Regional Director
b. SOLE – If the case originated from the
1. Futility of intra-union remedies; BLR
2. Improper expulsion procedure; 4. Where Filed – Regional Office or to the BLR,

where the complaint originated. Records are
3. Undue delay in appeal as to constitute transmitted to the BLR or Sec. within 24 hours
substantial injustice; from the receipt of the memorandum of appeal.
(Sec. 17, Rule XI, Book V, IRR as amended by D.O.
4. The action is for damages; 40-F-03)
2024 GOLDEN NOTES
Extent of Authority of the Bureau of Labor Q: Some disgruntled members of Bantay Labor
Relations Union filed with the Regional Office of the DOLE
a written complaint against their union officers
1. It may hold a referendum election among the for mismanagement of union funds. The
members of a union for the purpose of Regional Director did not rule in the
determining whether or not they desire to be complainants' favor. Not satisfied, the
affiliated with a federation. complainants elevated the Regional Director's
decision to the NLRC. The union officers moved
2. But the BLR has no authority to: to dismiss on the ground of lack of Jurisdiction.
Are the union officers correct? Why? (2001 BAR)
a. Order a referendum among union
members to decide whether to expel or A: YES. NLRC has no jurisdiction over the appealed
suspend union officers; ruling since the appellate authority over decisions
of the Regional Director involving examination of
b. Forward a case to the Trade Union union accounts is expressly conferred upon the
Congress of the Philippines for Bureau of Labor Relations of DOLE by the Rule of
arbitration and decision. Procedure on Mediation Arbitration. (Barles v.
Bitonio, G.R. No. 120270, 16 June 1999)
Administrative Functions of the Bureau of Labor
Relations
F. NATIONAL CONCILIATION AND MEDIATION
1. Regulation of the labor unions; BOARD (E.O. No. 126, as amended by E.O. No.
2. Keeping the registry of labor unions; 251); CONCILIATION V. MEDIATION
3. Maintenance of a file of the CBA; and
4. Maintenance of a file of all settlements or final
decisions of the SC, CA, NLRC, and other National Conciliation and Mediation Board
agencies on labor disputes. (NCMB)
Effects of Filing or Pendency of Inter/Intra- The NCMB refers to the agency attached to the DOLE
Union Dispute and Other Labor Relations principally in-charge of the settlement of labor
Disputes disputes through conciliation, mediation, and of the
promotion of voluntary approaches to labor dispute
1. The rights, relationships, and obligations of the prevention and settlement.
party-litigants against each other and other
parties-in-interest prior to the institution of Q: Is NCMB a quasi-judicial agency?
the petition shall continue to remain during
the pendency of the petition and until the date A: NO. The NCMB cannot be considered a quasi-
of the decision rendered therein. Thereafter, judicial agency. (Tabigue v. International Copra
they shall be governed by the decision ordered. Export Corp., G.R. No. 183335, 23 Dec. 2009) Thus, its
ruling cannot be elevated to, and be cognizable by,
2. The filing or pendency of any inter/intra union the Court of Appeals.
disputes is not a prejudicial question to any
petition for certification election; hence it shall Rule 43 of the Rules of Court applies only to awards,
not be a ground for the dismissal of a petition judgments, final orders, or resolutions of or
for certification of election or suspension of authorized by any quasi-judicial agency in the
the proceedings for the certification of exercise of its quasi-judicial functions. Hence, the
election. (Sec. 3, Rule XI, Book V, IRR as amended NCMB’s decision, not having been rendered by a
by D.O. 40-F-03) quasi-judicial body, cannot be elevated to the Court
of Appeals under the said rule.
2024 GOLDEN NOTES
NCMB’s Functions Conciliator-Mediator
The following are NCMB's functions, as enumerated An officer of the NCMB whose principal function is
in Sec. 22 of E.O. No. 126 or the Reorganization Act of to assist in the settlement and disposition of labor
the Ministry of Labor and Employment, viz: management disputes through conciliation and
mediation, including the promotion and
1. Formulate policies, programs, standards, encouragement of voluntary approaches to labor
procedures, manuals of operation and disputes prevention and settlement. (Sec. 1(k), Rule
guidelines pertaining to effective mediation and I, Book V, IRR as amended by D.O. 40-F-03)
conciliation of labor disputes;
Alternative Modes of Settlement of Labor
2. Perform preventive mediation and conciliation Dispute (M-A-C)
functions;
1. Mediation;
3. Coordinate and maintain linkages with other 2. Voluntary Arbitration; and
sectors or institutions, and other government 3. Conciliation.
authorities concerned with matters relative to
the prevention and settlement of labor disputes; Nature of the Proceedings
4. Formulate policies, plans, programs, standards, The proceedings are non-litigious.

procedures, manuals of operation and
guidelines pertaining to the promotion of All labor disputes are required to be submitted
cooperative and non-adversarial schemes, to mandatory conciliation-mediation
grievance handling, voluntary arbitration and
other voluntary modes of dispute settlement; GR: All issues arising from labor and employment
shall be subject to mandatory conciliation-
5. Administer the voluntary arbitration program; mediation. The LA or the appropriate DOLE agency
maintain/update a list of voluntary or office that has jurisdiction over the dispute shall
arbitrations; compile arbitration awards and entertain only endorsed or referred cases by the
decisions; duly authorized officer. (Art. 228(a), LC, as amended
by R.A. No. 103960)
6. Provide counseling and preventive mediation
assistance particularly in the administration of XPNs:
collective agreements;
1. Grievance machinery and Voluntary
7. Monitor and exercise technical supervision over Arbitration, in which case, their agreement will
the Board programs being implemented in the govern; and
regional offices; and 2. When excepted by the SOLE. (Ibid.)
8. Perform such other functions as may be NOTE: Any or both parties involved in the dispute
provided by law or assigned by the Minister. may pre-terminate the conciliation-mediation
(Tabigue v. International Copra Export Corp., G.R. proceedings and request referral or endorsement to
No. 183335, 23 Dec. 2009) the appropriate DOLE agency or office which has
jurisdiction over the dispute, or if both parties so
NOTE: The NCMB’s conciliation and mediation agree, refer the unresolved issues to voluntary
functions are discharged by its Conciliator- arbitration. (Art. 228(a), LC as amended by R.A. No.
Mediators. (Poquiz, 2018) 103960)
2024 GOLDEN NOTES
Q: Nelson complained before the DOLE Regional Arbitration
Office about Needy Corporation's failure 10 pay
his wage increase amounting to PhP5,000.00 as It is the submission of a dispute to an impartial
mandated in a Wage Order issued by the person for determination, based on evidence and
Regional Tripartite Wages and Productivity arguments of the parties. The arbiter’s decision or
Board. Consequently, Nelson asked the DOLE to award is enforceable upon the disputants. It may be
immediately Issue an Order sustaining his voluntary, by agreement, or compulsory which is
money claim. To his surprise, he received a required by statutory provision. (Luzon Dev’t Bank v.
notice from the DOLE to appear before the Ass’n of Luzon Dev’t Bank Ees, G.R. No. 120319, 06 Oct.
Regional Director for purposes of conciliating 1995)
the dispute between him and Needy
Corporation. When conciliation before the Voluntary Arbitration
Regional Director failed, the latter proceeded to
direct both parties to submit their respective Voluntary arbitration involves the reference of a
position papers in relation to the dispute. Needy dispute to an impartial body, the members of which
Corporation argued that since Nelson was are chosen by the parties themselves, which parties
willing to settle for 75% of his money claim freely consent in advance to abide by the arbitral
during conciliation proceedings, only a award issued after proceedings where both parties
maximum of 75% of the said money claim may had the opportunity to be heard. The basic objection
be awarded to him. (2018 BAR) is to provide a speedy and inexpensive method of
settling disputes by allowing the parties to avoid the
a) Was DOLE's action to conduct formalities, delay, expense and aggravation which
mandatory conciliation in light of commonly accompany ordinary litigation especially
Nelson's complaint valid? litigation which goes through the entire hierarchy of
courts. (Hi-Precision Steel Center, Inc. v. Lim Kim Steel
A: YES. In relation R.A. 10396 or the "Mandatory Builders, Inc., G.R. No. 110434, 13 Dec. 1993)
Conciliation-Mediation Law", Art. 234 of the LC
provides that "all issues arising from labor and Court Cannot Fix Resort to Voluntary Arbitration
employment shall be subject to mandatory
conciliation-mediation. The Labor Arbiter or Resort to VA dispute should not be fixed by the court
appropriate DOLE agency or office that has but by the parties relying on their strengths and
jurisdiction over the dispute shall entertain only resources.
endorsed or referred cases by the duly authorized
officer." Parties to Labor Relations Cases
b) Should the Regional Director
sustain Needy Corporation's 1. Ee’s organization
argument? 2. Management
3. The public
A: NO. Art. 239 of the LC provides that the
information and statements given in confidence at NOTE: Er and Ees are active parties while the public
the conciliation-mediation proceedings shall be and the State are passive parties. (Poquiz, 2006)
treated as privileged communication and shall not
be used as evidence in any arbitration proceeding, Tripartism
except when there is a waiver of confidentiality. In
the present case, Nelson's willingness to settle for It is the representation of three sectors in policy-
75% of his money claim may not be used against making bodies of the government. These are:
him in the money claims case before the Regional 1. The public or the government;
Director due to the confidentiality rule. 2. The Ers; and
3. The workers.
2024 GOLDEN NOTES
NOTE: Workers cannot insist that they be by the parties thereof in order to foster industrial
represented in the policymaking in the company. peace. (Sec. 3, Art. VIII, 1987 Constitution)
Such kind of representation in the policy-making
bodies of private enterprises is not ordained, not NOTE: A similar provision is echoed in the
even by the Constitution. What is provided for is Declaration of Policy under Art. 211(a) of the LC,
workers' participation in policy and decision- as amended.
making process directly affecting their rights,
benefits, and welfare. Persons Who Can Avail of Conciliation and
Mediation Services of the NCMB
Conciliation vs. Mediation
Any party to a labor dispute, either the union or
CONCILIATION MEDIATION management, may seek the assistance of NCMB or
any of its Regional Branches by means of formal
An intervention by a An intervention by a request for conciliation and preventive mediation.
neutral third party neutral third party Depending on the nature of the problem, a request
may be filed in the form of consultation, notice of
preventive mediation, or notice of strike or
The conciliator relies on
lockout.
his persuasive expertise
The mediator starts
and takes an active role
advising the parties or Where to File a Request for Conciliation and
in assisting parties by
offering solutions or Mediation
trying to keep
alternatives to the
disputants talking,
problems with the An informal or formal request for conciliation and
facilitating other
end in view of mediation service can be filed at the NCMB
procedural niceties,
assisting them Central Office or any of its Regional Branches.
carrying messages back
towards voluntarily
and forth between the
reaching their own There are at present 14 regional offices of the
parties, and generally
mutually acceptable NCMB which are strategically located all over the
being a good fellow who
settlement of the country for the convenient use of prospective
tries to keep things calm
dispute. clients.
and forward-looking in
a tense situation.
Preventive Mediation
It is the process where a It refers to the potential labor dispute which is the
It is when a third- subject of a formal or informal request for
disinterested third
party studies each conciliation and mediation assistance sought by
party meets with
side of the dispute either or both parties or upon the initiative of the
management and labor,
then makes proposals NCMB to avoid the occurrence of an actual labor
at their request or
for the disputants to dispute. (DOLE DO No. 40-03, s. 2003)
otherwise, during a
consider.
labor dispute or in CB
The mediator cannot How to Initiate Preventive Mediation
conferences, and by
make an award nor
cooling tempers, aids in
render a decision. Preventive mediation proceeding may be initiated in
reaching an agreement.
two (2) ways:
Legal Basis of Conciliation and Mediation 1. By filing a notice or request of preventive

mediation, as distinguished from a notice of
The State shall promote... the preferential use of strike/lockout; or
voluntary modes of settling disputes including
conciliation and shall ensure mutual compliance
2024 GOLDEN NOTES
2. By conversion of the notice of strike/lockout notice or declare a lockout or request for preventive
into a preventive mediation case. mediation in the same cases.
Authority to Convert a Notice of Strike/Lockout In the absence of a certified or duly recognized

into a Preventive Mediation Case bargaining representative, any LLO in the
establishment may file a notice, request preventive
The NCMB has the authority to convert a notice of mediation or declare a strike, but only on grounds of
strike or lockout filed by the union/Er into a ULP. (Sec. 3, Rule IV, NCMB Manual of Procedure)
preventive mediation case under any of the
following circumstances: NOTE: Only a certified or duly recognized
bargaining agent may file a notice or request for
1. When the issues raised in the notice of preventive mediation. If the notice was filed not by
strike/lockout are not strike-able in character; the Union but by its individual members, the NCMB
had no jurisdiction to entertain it. (Insular Hotel Ees
2. When the party which filed the notice of Union-NFL v. Waterfront Insular Hotel Davao, G.R.
strike/lockout voluntarily asks for the Nos. 174040-41, 22 Sept. 2010)
conversion;
Filing of Notice or Request for Preventive
3. When both parties to a labor dispute mutually Mediation Cannot Be Filed by the Federation
agree to have it subjected to preventive
mediation proceeding. The notice or request for preventive mediation
cannot be filed by the Federation on behalf of its
NOTE: Such authority is in pursuance of the NCMB’s local/chapter. A local union does not owe its
duty to enable the parties to settle their dispute existence to the federation with which it is affiliated.
amicably and in line with the State policy of favoring It is a separate and distinct voluntary association
voluntary modes of settling labor disputes. owing its creation to the will of its members.
Conversion of a Notice of Strike or Notice of Mere affiliation does not divest the local union of its
Lockout into a Preventive Mediation Case own personality; neither does it give the mother
Results in its Dismissal federation the license to act independently of the
local union. It only gives rise to a contract of agency,
Once the notice of strike is converted into a where the former acts in representation of the latter.
preventive mediation case, the notice is deemed Hence, local unions are considered principals while
dropped from the dockets as if no notice of strike the federation is deemed to be merely their agent.
has been filed. (National Union Bank Employees v. Philnabank
Employees Association, G.R. No. 174287, 12 Aug.
Since there is no more notice of strike to speak 2013)
about, any strike subsequently staged by the union
after the conversion is deemed not to have complied Valid Issues for a Notice of Strike/Lockout or
with the requirements of a valid strike and therefore Preventive Mediation
illegal. The same rule applies in the case of lockout
by an Er. A notice of strike or lockout may be filed on grounds
of ULP acts, gross violation of the CBA, or deadlock
Persons Who May File a Notice for Preventive in CBAs. A complaint on any of the above grounds
Mediation must be specified in the NCMB Form or the proper
form used in the filing of the complaint.
Any certified or duly recognized bargaining
representative may file a notice or declare a strike In case of preventive mediation, any issue may be
or request for preventive mediation in cases of brought before the NCMB Central Office or its
bargaining deadlocks and ULPs. The Er may file a regional offices for conciliation and possible
2024 GOLDEN NOTES
settlement through a letter. This method is Conciliation is so pervasive in application that, prior
preferable than a notice of strike/lockout because to a compulsory arbitration award, the parties are
of the non-adversarial atmosphere that pervades encouraged to continue to exhaust all possible
during the conciliation conferences. avenues of mutually resolving their dispute,
especially through conciliation and mediation
Advantages that Can Be Derived from services.
Conciliation and Mediation Services
Benefits the Parties Can Have in Appearing
Conciliation and mediation are non-litigious/non- during Conciliation Conferences
adversarial, less expensive, and expeditious. Under
this informal set-up, the parties find it more Generally speaking, any party appearing during
expedient to fully ventilate their respective scheduled conciliation conferences has the
positions without running around with legal advantage of presenting its position on the labor
technicalities and, in the course thereof, afford them controversy. The issue raised in the complaint can
wider latitude of possible approaches to the be better ventilated with the presence of the
problem. concerned parties. Moreover, the parties can
observe a norm of conduct usually followed in like
Parties Bound by the Agreement Entered forum.
The parties are bound to honor any agreement

entered by them. It must be pointed out that such
G. DOLE REGIONAL DIRECTORS; JURISDICTION
an agreement came into existence as a result of (Arts. 128-129, LC; Secs. 2 and 3(a), Rule X, Book
painstaking efforts among the union, management, III, Omnibus Rules Implementing the Labor
and the Conciliator-Mediator. Therefore, it is only Code)
logical to assume that the Conciliator assigned to
the case has to follow up and monitor the
implementation of the agreement. Jurisdiction of the DOLE Regional Directors
(RDs)
Conciliation and Mediation Service are Still
Possible during an Actual Strike or Lockout The DOLE RDs have original and exclusive
jurisdiction over:
It is possible to subject an actual strike or actual
lockout to continuing conciliation and mediation 1. Labor standards enforcement cases; (Art. 128,
services. In fact, it is at this critical stage that such LC)
conciliation and mediation services be fully given a
chance to work out possible solution to the labor 2. Small money claims cases arising from labor
dispute. With the ability of the Conciliator- standards violations in the amount not
Mediator to put the parties at ease and place them exceeding P5,000.00 and not accompanied with
at a cooperative mood, the final solution/s of the a claim or reinstatement; (Art. 129, LC)
issues involved may still be settled.
3. Occupational safety and health violation; (Rule
Possibility of Remanding the Dispute Already 6, Rules on the Disposition of Labor Standards
Been Assumed or Certified to the NLRC to Cases in the Regional Offices)
Conciliation and Mediation
4. Complaints against private recruitment and
The parties are not precluded from availing the placement agencies for local employment;
services of an NCMB Conciliator-Mediator as the (DOLE DO No. 141-14, s. 2014)
duty to bargain collectively subsists until the final
resolution of all issues involved in the dispute.
2024 GOLDEN NOTES
5. Cases submitted for voluntary arbitration in
their capacity as Ex - Officio Voluntary The proceedings before the Regional Office shall be
Arbitrators (DO No. 83 - 07, s. 2007) summary and non-litigious in nature. (Sec. 12, Rules
on the Disposition of Labor Standards Cases in the
6. Applications for registration of independent Regional Offices)
labor unions, chartered locals, workers'
associations. (Sec. 1, Rule III, Book V, Omnibus Money claims should be filed within three (3) years
Rules) from the time the cause of action accrued. (Art. 306,
LC)
7. Requests for SEBA certification (Sec. 1, Rule VII,
Book V, Omnibus Rules) Q: Inggo is a drama talent hired on
"participation basis" by DJN Radio Company. He
8. Petitions for certification election. worked from 8:00 a.m. until 5:00 p.m., six days a
week, on a gross rate of P80.00 per script,
9. Complaints or petitions involving labor unions earning an average of P20,000.00 per month.
with independent registrations, chartered Inggo filed a complaint before the DOLE against
locals, workers' associations, its officers or DJN Radio for illegal deduction, non-payment of
members (Sec. 4, Rule XI, Book V, Omnibus service incentive leave, and 13th month pay,
Rules) among others. On the basis of the complaint, the
DOLE conducted a plant level inspection. The
10. Petitions for cancellation of registration of DOLE Regional Director issued an order ruling
labor unions with independent registration, that Inggo is an employee of DJN Radio and that
chartered locals and workers association (Sec. Inggo is entitled to his monetary claims in the
4, Rule XI, Book V, Omnibus Rules) total amount of P30,000.00. DJN Radio elevated
the case to the Secretary of Labor who affirmed
11. Petitions for deregistration of collective the order. The case was brought to the Court of
bargaining agreements (Sec. 4, Rule XI, Book V, Appeals. The radio station contended that there
Omnibus Rules) is no employer-employee relationship because it
was the drama directors and producers who
12. Dispute over conduct of election of officers of paid, supervised, and disciplined him. Moreover,
labor organizations (Sec. 2, Rule XII, Book V, it argued that the case falls under the
Omnibus Rules) jurisdiction of the NLRC and not the DOLE
because Inggo's claim exceeded P5,000.00.
Money Claims Falling Under the Jurisdiction of (2016 BAR)
the DOLE Regional Directors
a) If the DOLE finds that there is an
Under Art. 129 of the LC, the RDs have jurisdiction employee-employer relationship,
over claims for recovery of wages, simple money does the case fall under the
claims and other benefits, provided that: jurisdiction of the Labor Arbiter
considering that the claim of Inggo is
1. The claim must arise from Er-Ee relationship; more than P5,000.00. Explain.
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each Ee does not A: NO. As held in the case of Meteoro v. Creative
exceed P5,000.00. Creatures, Inc. (G.R. No. 171275, 13 July 2009), the
visitorial and enforcement powers of the Secretary,
NOTE: In the absence of any of the above requisites, exercised through his representatives, encompass
it is the LA who shall have the jurisdiction over the compliance with all labor standards laws and other
claims arising from Er-Ee relations, except claims labor legislation, regardless of the amount of the
for Ee’s compensation, SSS, PhilHealth, and claims filed by workers; thus, even claims exceeding
maternity benefits, pursuant to Art. 217. P5,000.00. (2009-2017 UST FCL Bar Q&A)
2024 GOLDEN NOTES
NOTE: Jurisprudence provides the elements under alien is desired.” Thus, AB should be issued the
the exception clause: abovementioned employment permit so that AB can
assume as Vice President of the Telecommunication
1. That the employer contests the findings of the Company.
labor regulations officer and raises issues
thereon; Appeal to the NLRC
2. That in order to resolve such issues, there is a Any decision or resolution of the RD or hearing
need to examine evidentiary matters; and officer may be appealed, within five (5) calendar
days from receipt of a copy of said decision or
3. That such matters are not verifiable in the resolution, to the NLRC. The NLRC shall resolve the
normal course of the inspection. (Meteoro v. appeal within ten (10) calendar days from the
Creative Creatures, Inc. (G.R. No. 171275, 13 July submission of the last pleading. (Art.129, LC)
2009)
Visitorial Power of Regional Directors
Adjudicatory Power of the Regional Director
The visitorial and enforcement powers empowered
The RD or any of his duly authorized hearing officers the SOLE, or his or her authorized representative, to:
is empowered through summary proceeding and (1) access the Er's records and premises at any time
after due notice, to hear and decide cases involving of the day or night, so long as work is being
the recovery of wages and other monetary claims undertaken; (2) issue compliance orders to give
and benefits, including legal interests. effect to the labor standards provisions of the Labor
Code; and (3) order work stoppage or suspend an
A Regional Director exercises both visitorial and establishment's operations when noncompliance
enforcement power over labor standard cases, and with labor standards poses grave and imminent
is therefore empowered to adjudicate money claims, danger to the health and safety of workers. (Ang v.
provided there still exists an Er-Ee relationship, and Avila, G.R. No. 222889, 26 Feb. 2020
the findings of the regional office is not contested by
the Er concerned. (Maternity Children's Hospital v. Authorized Representatives of the SOLE
Secretary of Labor, G.R. No. 78909, 30 June 1989)
The Regional Directors shall be the duly authorized
Q: AB, a non-resident American, seeks entry to representatives of the SOLE in the administration
the country to work as Vice-President of a local and enforcement of labor standards within their
telecommunications company. You are with the respective territorial jurisdictions. (Sec. 3, Rules on
Department of Labor and Employment (DOLE). the Disposition of Labor Standards Cases in the
What permit, if any, can the DOLE issue so that Regional Offices)
AB can assume as Vice-President in the
telecommunications company? Discuss fully. Q: Uniden contracted the services of Nationwide
Security to provide the former security guard
A: Art. 40 of the LC states that “Any alien seeking services. However, upon exercise of the Regional
admission to the Philippines for employment Director’s enforcement and visitorial powers it
purposes and any domestic or foreign employer found Uniden violated several labor standard
who desires to engage an alien for employment in laws. Thus, the RD directed Nationwide Security
the Philippines shall obtain an employment permit and Uniden liable to solidarily pay 40 security
from the DOLE. The employment permit may be personnel including Ceprado, Sebial, Olivar,
issued to a nonresident alien or to the applicant Villegas, and Manato. Nationwide Security filed a
employer after a determination of the non- motion for reconsideration of the order, which
availability of a person in the Philippines who is granted by the RD. On appeal, the SOLE reversed
competent, able, and willing at the time of the RD. It ruled that Ceprado, Jr. et al. were
application to perform the services for which the deprived of their right to due process for
2024 GOLDEN NOTES
Nationwide Security’s failure to serve the such a connection with the other claims can the
motion for reconsideration to the former. Is the claim for damages be considered as arising from Er-
SOLE correct? Ee relations.
A: YES. Motions for reconsideration not served on In the present case, Ubana’s claim for damages is not
the adverse party do not toll the running of the related to any other claim under Art. 217, other
reglementary period for filing an appeal. Upon lapse labor statutes, or collective bargaining agreements.
of the reglementary period, the judgment sought to (SSS v. Debbie Ubana, G.R. No. 200114, 24 Aug. 2015)
be reconsidered becomes immutable. Sec. 19, Rule II
of the Rules on the Disposition of Labor Standards Q: Are claims of drivers and conductors who
Cases in the Regional Offices allows an aggrieved were hired by DLTB in various dates that the
party to file a motion for reconsideration of the start of their employment they have not received
Order of the Regional Office. their 13th month pay, incentive leave, rest per
day, OT pay and ECOLA with daily salaries way
In this case, respondent filed a Motion for below the prevailing minimum wage is violation
Reconsideration of Regional Director Martinez's 19 of DOLE D.O. No. 118-12?
Apr. 2001 Order. (Alejandro Ceprado, Jr. v.
Nationwide Security and Allied Services, Inc., G.R. No. A: Drivers and Conductors are entitled to their
175198, 23 Sept. 2015) claims since the complaint is brought before the
DOLE to which it should give effect to the Er-Ee
Q: Debie Ubana filed a civil case for damages relationship regardless of jurisdiction (Del Monte
against DBP Services Corporation, Social Land Transport Bus, Co. v. Armenta, G.R. No. 240144,
Security System (SSS), and the SSS Retirees 03 Feb. 2021)
Association before the RTC. She alleged that she
was required to work for SSS continuously under
different assignments and was constantly
H. DOLE SECRETARY
assured that she was being absorbed into the SSS
plantilla. However, she was never absorbed into
SSS plantilla until she resigned because of the
SOLE has jurisdiction over the following cases:
prejudicial treatment and false promises by SSS.
The latter, in its answer, contends that RTC has
1. Assumption of jurisdiction over cases where
no jurisdiction because the claim arose from and
labor disputes are likely to cause a strike or
Er-Ee relationship and that it is cognizble by
lockout in an industry indispensable to national
NLRC. The RTC assumed jurisdiction on the
interes in the exercise of its Power of
ground that the claim of damages was based on
Assumption of Jurisdiction; (D.O. 40-G03, S
Civil Code Provision which was affirmed by CA
2010)
on the appeal of SSS. Does the RTC have
jurisdiction over the case?
2. Visitorial powers to over Ers; (Art. 128, LC)
A: YES. The RTC has jurisdiction over the case. Labor

3. Issue a writ of execution on a judgment; and
arbiters and the NLRC have jurisdiction to award not
(Art. 224, LC)
only reliefs provided by labor laws, but also
damages governed by the Civil Code. However, these
4. Suspend the effects of the termination pending
reliefs must still be based on an action that has a
resolution of the dispute in the event of a prima
reasonable causal connection with the Labor Code,
facie finding by the appropriate official of the
other labor statutes, or collective bargaining
Department of Labor and Employment before
agreements. Claims for damages under Art. 224(4)
whom such dispute is pending that the
must have a reasonable causal connection with any
termination may cause a serious labor dispute
of the claims provided for in the article in order to
be cognizable by the labor arbiter. Only if there is
2024 GOLDEN NOTES
or is in implementation of a mass lay-off. (Art. indispensable to the national interest based on the
277 (b), LC) appreciation and discretion of the SOLE or as may
be recommended by TIPC.
Requisites for Power of Assumption of
Jurisdiction Q: Under what conditions may the Secretary of
Labor or his duly authorized representative
1. Parties requested the SOLE to assume inquire into the financial activities or legitimate
jurisdiction; or labor organizations?
2. After a conference called by the Office of the A: The LC authorizes the SOLE or his duly
SOLE on the propriety of its issuance, motu authorized representative to inquire into the
proprio or upon a request or petition by either financial activities of any labor organization on the
party to the labor dispute. (Sec. 15, Book V, IRR basis of a complaint under oath, supported by 20%
Rule XXII, IRR, as amended by D.O. No. 40-H-13 s of the membership, in order to determine
2013) compliance or noncompliance with the law and to
aid in the prosecution of any violation thereof. (Art.
Q: Who has unlimited discretion to determine 289, LC)
what industries are considered indispensable to
national interest? Q: Liwanag Corporation is engaged in the power
generation business. A stalemate was reached
A: during the collective bargaining negotiations
between its management and the union. After
1. President of the Philippines; and following all the requisites provided by law, the
2. Secretary of Labor and Employment union decided to stage a strike. The
management sought the assistance of the
Industries Considered as Indispensable to the Secretary of Labor and Employment, who
National Interest assumed jurisdiction over the strike and issued
a return-to-work order. The union defied the
The LC vests in the SOLE the discretion to determine latter and continued the strike. Without
what industries are indispensable to the national providing any notice, Liwanag Corporation
interest. Accordingly, upon the determination by the declared everyone who participated in the
SOLE that such industry is indispensable to the strike as having lost their employment. Was
national interest, he has authority to assume Liwanag Corporation’s action valid? (2014 BAR)
jurisdiction over the labor dispute.
A: YES. A strike that is undertaken despite the
The following industries/services are deemed issuance by the SOLE of an assumption or
indispensable to the national interest: certification order becomes an illegal act committed
in the course of a strike. It rendered the strike illegal.
1. Hospital sector; The Union officers and members, as a result, are
2. Electric power industry; deemed to have lost their employment status for
3. Water supply services, to exclude small water having knowingly participated in an illegal act.
supply services such as bottling and refilling (Union of Filipro Employees v. NLRC, G.R. No. 91025;
stations; 19 Dec. 1990) Such kind of dismissal under Art. 264
4. Air traffic control; can immediately be resorted to as an exercise of
5. Such other industries as may be recommended management prerogative. (Biflex v. Filflex Industrial,
by the NTIPC; and G.R. NO. 155679, 19 Dec. 2006)
6. Banking institutions. (Azucena, 2016)
NOTE: The above enumerated industries are NOT

exclusive as other industries may be considered
2024 GOLDEN NOTES
Appellate Jurisdiction union's certificate of registration may be
appealed to the SLE whose decision on the
1. Appeal from and adverse decision of the POEA. matter shall be final and unappealable.
(2003 POEA Rules and Regulations, Rule V, Part (Ibid.)
VII, Sec. 1; Eastern Mediterranean Maritime Ltd.
And Agemar Manning Agency Inc., v. Surio, G.R. NOTE: The certificate of registration of any
No. 154213, Aug. 23, 2012) legitimate labor organization including labor
federations or national unions may be cancelled by
2. Appeal the order or results of a certification the Bureau or the Regional Office on any of the
election on the ground that the Rules and following grounds:
Regulations or parts thereof established by the
SLE for the conduct of election have been a. Violation of Arts. 234, 237, and 239 of the
violated. (Art. 259, LC) Code;
3. A review of cancellation proceedings decided by b. Failure to comply with Art. 238 of the Code;
the BLR in the exercise of its exclusive and and
original jurisdiction. (Abbott Laboratories
Philippines, Inc. v. Abbott Laboratories Ees Union, c. Violation of any of the provisions of Art. 241
G.R. No. 131374, Jan. 26, 2000) of the Code.
4. Appeals from the order/decision of the Med- NOTE: SOLE has no appellate jurisdiction over
Arbiter involving certification election. (Sec. 25, decisions of RD involving petitions for examinations
Rule VII, Book IX, Omnibus Rules) of union accounts. It is the BLR which exercises
appellate jurisdiction in such case. (Barles v. Bitonio,
5. The decision of the Bureau Director in the G.R. No. 120270, June 16, 1999)
exercise of his/her original jurisdiction
involving inter/intra union disputes may be Some Principles on Assumption or Certification
appealed to the Office of the Secretary Power of the DOLE Secretary
NOTE: The SOLE has no jurisdiction over decisions Prior notice and hearing are NOT required in the
of the BLR rendered in the exercise of its appellate issuance of the assumption or certification order.
power to review the decision of the RD in a petition
to cancel the union's certificate of registration, said The SOLE may seek the assistance of law
decisions being final and unappealable. (Ibid.) enforcement agencies like the Philippine National
Police to ensure compliance with the provision
Secs. 7 to 9 of Rule II, Book V of the IRR of the LC thereof as well as with such orders as he may issue
provides for two situations: to enforce the same.
a. The first situation involves a petition for Assumption or certification orders are immediately
cancellation of union registration which is executory and are to be strictly complied with even
filed with a Regional Office. A decision of a during the pendency of a motion for reconsideration
Regional Office cancelling a union's or petition questioning its validity. (St. Scholastica’s
certificate of registration may be appealed to College v. Torres, G.R. No. 100158, 02 June 1992)
the BLR whose decision on the matter shall
be final and unappealable; and This extraordinary authority given to the Secretary
of Labor is aimed at arriving at a peaceful and
b. The second situation involves a petition for speedy solution to labor disputes, without
cancellation of certificate of union jeopardizing national interests. (Steel Corporation v.
registration which is filed directly with the SCP Employees Union, G.R. Nos. 169829-30, 16 Apr.
BLR. A decision of the BLR cancelling a 2008)
2024 GOLDEN NOTES
1. VISITORIAL AND ENFORCEMENT POWERS 4. Inquire into the financial activities of LLO and
(Arts. 128 and 289, LC) examine their books of accounts upon the filing
of the complaint under oath and duly supported
by the written consent of at least 20% of the
Visitorial Powers and Enforcement Powers
total membership of the LO concerned.
The DOLE issued D.O. No. 57-04, also called the

Enforcement Power
Labor Standards Enforcement Framework (LSEF).
The framework comprises three approaches:
It is the power to:
1. Self-assessment;
2. Inspection; and
1. Issue compliance orders;
3. Advisory service.
2. Issue writs of execution for the enforcement of

Visitorial Power
their orders, except in cases where the Er
contests the findings of the labor officer and
It constitutes:
raise issues supported by documentary proof
which were not considered in the course of
1. Access to Er’s records and premises at any time
inspection;
of the day or night, whenever work is being
undertaken;
3. Order stoppage of work or suspension of
operation when non-compliance with the law or
2. Right to copy from said records; and
implementing rules and regulations poses grave
and imminent danger to health and safety of
3. Right to question any Ee and investigate any
workers in the workplace;
fact, condition or matter which may be
necessary to determine violations, or which
4. Require Ers to keep and maintain such
may aid in the enforcement of the LC and of any
employment records as may be necessary in aid
wage order, or rules and regulation issued
to the visitorial and enforcement powers; and
pursuant thereto.
5. Conduct hearings within 24 hours to determine

Instances Where the Visitorial Power of the SOLE
whether:
May Be Exercised Under the LC
a. An order for stoppage of work or

It is the power to:
suspension of operations shall be lifted or
not; and
1. Inspect books of accounts and records of any
person or entity engaged in recruitment and
b. Er shall pay the concerned Ees their
placement, require it to submit reports
salaries in case the violation is attributable
regularly on prescribed forms and act in
to his fault. (Guico v. Secretary, G.R. No.
violations of any provisions of the LC on
131750, 16 Nov. 1998)
recruitment and placement. (Art. 37, LC)
Violations Under Art. 128 of the LC

2. Have access to Er’s records and premises to
determine violations of any provisions of the LC
1. To obstruct, impede, delay, or otherwise render
on recruitment and placement. (Art. 128, LC)
ineffective the orders of the SOLE or his
authorized representatives; and
3. Conduct industrial safety inspections of
establishments. (Art. 165, LC)
2. Any government Ee found guilty of, or abuse of
authority, shall be subject to administrative
2024 GOLDEN NOTES
investigation and summary dismissal from strike in establishments affecting national interest,
service. not just the company.
Limitations to Other Courts Reinstatement Pending Resolution of the

Termination Dispute
In relation to enforcement orders issued under Art.
128 of the LC, no inferior court or entity shall: Suspension of the effects of termination will
necessarily result in the immediate reinstatement of
1. Issue temporary or permanent injunction or the terminated Ees. An order of reinstatement
restraining order; or pending resolution of the case may thus be issued by
2. Assume jurisdiction over any case. the SOLE pursuant to this power.
Instances When Enforcement Power May Not Be SOLE Can Assume Jurisdiction over a Labor
Used Dispute
1. Case does not arise from the exercise of When there is a labor dispute causing or likely to
visitorial power; cause a strike affecting national interest, the SOLE,
on his own initiative or upon petition by any of the
2. When Er-Ee relationship ceased to exist at the parties, may either assume jurisdiction or certify the
time of the inspection; and dispute to the NLRC for compulsory arbitration.
3. If Er contests the finding of the Labor NOTE: Art. 263(g) of the LC is both an extraordinary
Regulation Officer and such contestable issue is and a pre-emptive power to address an
not verifiable in the normal course of extraordinary situation (a strike or lockout in an
inspection. industry indispensable to the national interest). The
term “assume jurisdiction” connotes the intent of
NOTE: The Supreme Court revisited the Bombo the law to give the SOLE full authority to resolve all
Radyo Ruling of 2009 and modified it in March 2012 matters within the dispute that gave rise to or which
through an en banc resolution. The Court now arose out of the strike or lockout—it includes and
concedes that DOLE has the authority to determine extends to all questions and controversies arising
the existence of an Er-Ee relationship, “subject to from or related to the dispute, including cases over.
judicial review, not review by NLRC”. (Bagong Pagkakaisa ng Manggagawa ng Triumph
International v. Secretary of the DOLE, G.R. No.
167401, 05 July 2010)
2. POWER TO SUSPEND EFFECTS OF
TERMINATION
Assumption of Jurisdiction Can Be Exercised
(Art. 292 (b), LC)
without the Necessity of Prior Notice or Hearing
Given to Any of the Party Disputants
The SOLE may suspend the effects of the
termination pending resolution of the dispute upon The rationale for the SOLE’s assumption of
prima facie finding by the appropriate official of the jurisdiction can justifiably rest on his own
DOLE before whom such dispute is pending that the
consideration of the exigency of the situation in
termination may cause serious labor dispute or is in relation to the national interests. (Capitol Medical
implementation of a mass layoff. (Art. 277(b), LC) Center v. Trajano, G.R. No. 155690, 30 June 2005)
NOTE: Art. 277(b) of LC is applicable on suspension

of the effects of termination if there is a showing that
the termination may cause serious labor dispute
within the company while Art. 263(g) of LC on
assumption of jurisdiction is applicable in cases of
2024 GOLDEN NOTES
Delegated Administrative Supervision papers (before the National Conciliation and
Mediation Board and before the Secretary
SOLE has administrative supervision over the NLRC, himself) on the validity of the union's strike and
its regional branches, and all its personnel to: on the wage and other economic issues
(including the retirement issue), the DOLE
1. To further improve the rate of disposition of Secretary ruled on the validity of the strike and
cases; and on the disputed CBA issues, and ordered the
parties to execute a CBA based on his rulings.
2. To enhance existing measures for the
prevention of graft and corruption in the NLRC. Did the Secretary of Labor exceed his
(E.O. No. 204, s. 2003) jurisdiction when he proceeded to rule on the
parties' CBA positions even though the parties
NOTE: The Secretary was tasked to: did not fully negotiate on their own? (2013 BAR)
a. enhance existing measures within the A: The power of the SOLE under Art. 263(g) of the LC
agency, or initiate new ones, to prevent is plenary. He can rule on all issues, questions, or
graft and corruption, and including such controversies arising from the labor dispute,
measures as management audits, including the legality of the strike, even those over
performance evaluations, and inspections which the Labor Arbiter has exclusive jurisdiction.
to determine compliance with policies, (Bagong Pagkakaisa ng mga Manggagawa sa
standards, and guidelines; and Triumph International v. Secretary, G.R. Nos. 167401
and 167407, 05 July 2010; 2009-2017 UST FCL Bar
b. to investigate, on its own or upon Q&A)
complaint, matters invoking disciplinary
action against any presidential appointees NOTE: The term “assume jurisdiction” connotes the
in the NLRC in accordance with existing law intent of the law is to give the SOLE full authority to
and regulations. resolve all matters within the dispute that gave rise
to, or which arose out of the strike or lockout. It
Q: Philippine Electric Company is engaged in includes and extends to all questions and
electric power generation and distribution. It is controversies arising from or related to the dispute,
a unionized company with Kilusang Makatao as including cases over which the labor arbiter has
the union representing its rank-and-file exclusive jurisdiction. (Bagong Pagkakaisa ng mga
employees. During the negotiations for their Manggagawa sa Triumph International v. Secretary,
expired CBA, the parties duly served their G.R. Nos. 167401 and 167407, 05 July 2010)
proposals and counter-proposals on one
another. The parties, however, failed to discuss Remedy of the Aggrieved Party
the merits of their proposals and counter-
proposals in any formal negotiation meeting The remedy of an aggrieved party in a decision or
because their talks already bogged down on the resolution of the SOLE is to timely file a motion for
negotiation ground rules, i.e., on the question of reconsideration as a precondition for any further or
how they would conduct their negotiations, subsequent remedy, and then seasonably file a
particularly on whether to consider retirement special civil action for certiorari under Rule 65 of the
as a negotiable issue. 1997 Rules on Civil Procedure. (Pildtranco Service
Enterprises, Inc. v. PHILTRANCO Worker’s
Because of the continued impasse, the union Association, G.R. No. 180962, 26 Feb. 2014)
went on strike. The Secretary of Labor and
Employment immediately assumed jurisdiction
over the dispute to avert widespread electric
power interruption in the country. After
extensive discussions and the filing of position
2024 GOLDEN NOTES
Powers of SOLE Regarding Voluntary Arbitration 4. Any official that may be authorized by the SOLE
to act as VA upon the written request and
The SOLE may authorize any official to act as agreement of the parties to a labor dispute. (Art.
Voluntary Arbitrator upon the written request and 262, LC)
agreement of the parties to a labor dispute. (Art.
212(n), LC) NOTE: Labor Arbiters can be designated as
voluntary arbitrators. There is nothing in the law
He shall also approve, upon recommendation of the that prohibits LAs from also acting as voluntary
NCMB the guidelines in administering the Voluntary arbitrators if the parties agree to have him hear and
Arbitration Fund. (Art. 276(f), LC) decide their dispute. (Manila Central Line Free
Workers Union v. Manila Central Line Corp., G.R. No.
109383, 15 June, 1998)
I. VOLUNTARY ARBITRATOR; JURISDICTION
AND PROCEDURE Powers of a VA
(Arts. 274-277, LC; Revised Procedural
Guidelines in the Conduct of Voluntary 1. Hold hearings;
Arbitration Proceedings) 2. Receive evidence; and
3. Take whatever action necessary to resolve the
dispute including efforts to effect a voluntary
Jurisdiction of the Voluntary Arbitrators (VAs) settlement between parties. (Art. 262-A, LC)
Generally, the arbitrator is expected to decide only
those questions expressly delineated by the Alternative Answer to Powers of a Voluntary
submission agreement. Nevertheless, the arbitrator Arbitrators
can assume that he has the necessary power to make
a final settlement since arbitration is the final resort 1. Adjudicatory power; (No. 64, NCMB Primer on
for the adjudication of the disputes. (Ludo and Luym Grievance Settlement and Voluntary Arbitration)
Corp. v. Saornido, G.R. No. 140960, 20 Jan. 2003)
2. Compulsory power; (No. 80, NCMB Primer on
Q: What would be the nature of the power of the Grievance Settlement and Voluntary Arbitration)
voluntary arbitrators in so far as the case
submitted for voluntary arbitration is 3. Power to conciliate and mediate; (No. 65, NCMB
concerned? Primer on Grievance Settlement and Voluntary
Arbitration)
A: The VA may decide on those issues submitted to
him for voluntary arbitration. However, he may also 4. Power to encourage the parties to enter into a
resolve matters that are related to the issues in stipulation of facts; (Rule V, NCMB Revised
order to avoid multiplicity of suits. Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings) and
Voluntary Arbitrator
5. Power to issue writ of execution. (Sec. 3, NCMB
1. Any person accredited by the NCMB as such; Revised Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings; Poquiz,
2. Any person named or designated in the CBA by 2018)
the parties to act as their VA;
3. One chosen with or without the assistance of

the NCMB, pursuant to a selection procedure
agreed upon in the CBA;
2024 GOLDEN NOTES
Original and Exclusive Jurisdiction of VAs NOTE: Gross violation of CBA provisions shall
mean flagrant and/or malicious refusal to
1. All unresolved grievances arising from the: comply with the economic provisions of such
agreement. Total disregard of the CBA
a. Implementation or interpretation of constitutes ULP. (Ees’ Union of Bayer v. Bayer
the CBA; and Phil. G.R. No. 162943, 06 Dec. 2010)
b. Interpretation or enforcement of
company personnel policies 5. Any other labor disputes upon agreement by
the parties including ULP and bargaining
NOTE: Under Art. 217, it is clear that a LA has deadlock. (Art. 275, LC)
original and exclusive jurisdiction over
termination disputes. However, under Art. NLRC and DOLE Cannot Entertain Disputes,
261, a VA has original and exclusive Grievances, or Matters Under the Exclusive and
jurisdiction over grievances arising from the Original Jurisdiction of the Voluntary Arbitrator
interpretation or enforcement of company
policies. As a general rule then, termination They must immediately dispose and refer the same
disputes should be brought before a LA, to the grievance machinery or voluntary arbitration
except when the parties unmistakably provided in the CBA.
express that they agree to submit the same to
voluntary arbitration. (Negros Metal The parties may choose to submit the dispute to
Corporation v. Armelo Lamayo, G.R. No. voluntary arbitration proceedings before or at the
186557, 25 Aug. 2010) As long as the stage of compulsory arbitration proceedings.
termination is still an unresolved grievance,
meaning there is no actual termination yet or Original and Exclusive Power over Unresolved
serving of notice of dismissal, it may still be Grievance Appellate in Nature
subject to the jurisdiction of the VA. Pursuant to Art. 273 and in relation to Art. 274, all
grievances which are not settled within 7 calendar
The reference to a Grievance Machinery and days from the date of its submission for resolution
Voluntary Arbitrators for the adjustment or to the last step of the grievance machinery shall
resolution of grievances arising from the automatically be referred to voluntary arbitration in
interpretation or implementation of their the CBA. (Poquiz, 2018)
CBA and those arising from the interpretation
or enforcement of company personnel NOTE: The VA’s original and exclusive power over
policies is mandatory. (Sanyo Philippine unresolved grievance is appellate in nature. (Poquiz,
Workers Union v. Canizares, G.R. No. 101619, 8 2018)
July 1992)
Jurisdiction over actual Termination Disputes
2. Wage distortion issues arising from the and Complaints for Illegal Dismissal
application of any wage orders in organized
establishments; The LA has jurisdiction over actual termination
disputes and complaints for illegal dismissal filed by
3. Those arising from the interpretation and workers pursuant to the union security clause and
implementation of productivity incentive not the grievance machinery.
programs under R.A. No. 6971;
Voluntary Arbitration as the “Master Procedure”
4. Violations of CBA provisions which are not
gross in character are no longer treated as ULP In labor-management relations voluntary
and shall be resolved as grievances under the arbitration is master procedure in the sense that all
CBA; and kinds of labor disputes may be submitted to, settled,
2024 GOLDEN NOTES
or resolved through voluntary arbitration by Who Will Designate the Voluntary Arbitrator or
voluntary agreement of the parties. Panel in Case the Parties Fail to Select
As a master procedure, voluntary arbitration takes It is the NCMB that shall designate the VA panel
precedence over other dispute settlement devices. based on the selection procedure provided by the
When a labor arbiter, for instance, is presented with CBA. (Manila Central Line Free Workers Union v.
a case falling under his “original and exclusive” Manila Central Line Corp., G.R. No. 109383, 15 June,
jurisdiction, the parties may withdraw it from him, 1998)
no matter at what stage it may be, if the parties
mutually decide to bring the dispute instead to Effect of the Award of Voluntary Arbitrator
voluntary arbitration.
The decision or award of the VA acting within the
NOTE: The proper subjects of voluntary arbitration scope of its authority shall determine the rights of
are really those unresolved grievances arising from the parties and their decisions shall have the same
the interpretation or implementation of the CBA and legal effects as judgment of the courts. Such matters
those arising from the interpretation or on fact and law are conclusive.
enforcement of company personnel policies. But
there is nothing that prevents the parties from NOTE: Arbitral award is not subject to ratification of
submitting from voluntary arbitration any other the Ees.
labor disputes. Thus, even if it is a termination case,
bargaining deadlock case, or ULP case, they can Both the Employer and the Bargaining
submit it for voluntary arbitration by voluntary Representative of the Employees are Required to
agreement of the parties. Go Through the Grievance Machinery
Procedure It is but logical, just, and equitable that whoever is

aggrieved should initiate settlement of grievance
Arbitration is initiated by: through the grievance machinery. To impose
compulsory procedure on Ers alone would be
1. Submission Agreement – Where the parties oppressive of capital.
define the disputes to be resolved;
Voluntary Arbitration vs. Compulsory
2. Demand/notice to arbitrate – Invoking Arbitration
collective agreement arbitration clause
VOLUNTARY COMPULSORY
Procedure for Choosing Voluntary Arbitrator/ ARBITRATION ARBITRATION
Panel Process of settlement
Referral of a dispute by
of labor disputes by a
1. The parties in a CBA shall designate in advance the parties.
government agency.
a VA/panel, preferably from the listing of
qualified VAs duly accredited by the NCMB; and Appointment of the
Arbitrator is the Labor
Arbitrator by the
Arbiter or NLRC.
2. Include in the agreement a procedure for the parties.
selection of such VA or panel of VAs, preferably
from the listing of qualified VAs duly accredited NOTE: Before or at any stage of the compulsory
by the NCMB. (Art. 260(3), LC) arbitration process, parties may opt to submit their
dispute to VA.
2024 GOLDEN NOTES
Cost of Voluntary Arbitration and Voluntary Motion for Reconsideration
Arbitrator’s Fee
As a general rule, pursuant to Sec. 7, Rule XIX of D.O.
The parties to a CBA shall provide a proportionate No. 40-03, a decision, order, resolution, or award of
sharing scheme on the cost of VA. the VA shall not be subject of a motion for
reconsideration. However, this rule cannot stand in
The fixing of fee of VA, shall consider the following a petition for a writ of certiorari because such
factors: petition inherently requires having filed a motion
1. Nature of the Case; for reconsideration. (Azucena, 2016)
2. Time consumed in hearing the case;
3. Professional standing of the VA; NOTE: The propriety of filing a motion for
4. Capacity to pay of the parties; and reconsideration was confirmed in Coca-Cola Bottlers
5. Fees provided for in the Revised Rules of Court. Phil. v. Coca-Cola. (G.R. No. 155651, 28 July 2005)
(Art. 277, LC)
Mode of Appeal from VA to CA
Nature of Power of the Voluntary Arbitrator
GR: A decision or award of a voluntary arbitrator is
Arbitrators by the nature of their functions act in a appealable to the CA via petition for review under
quasi-judicial capacity. (BP 129, as amended by RA Rule 43, not Rule 65. (Samahan ng Mangagawa sa
9702) Where a question of law is involved or there HYATT v. Bacungan, G.R. No. 149050, 25 Mar. 2009)
is abuse of discretion, courts will not hesitate to pass
upon review of their acts. The SC explained in the case of Nippon Paint Union
v. CA (G.R. No. 159010, 19 Nov. 2004) that it is not
NOTE: Voluntary Arbitration proceedings are non- Rule 65 because a petition for certiorari under that
litigious or non-adversary in nature. (Poquiz, 2018) Rule lies only where there is “no appeal” and “no
plain, speed, and adequate remedy in the ordinary
Decisions of Voluntary Arbitrators are course of law.” Certiorari is not a substitute for a
Appealable lapsed appeal.
GR: Decisions of VA are final and executory after 10 XPNs: The Court cited situations when a petition for
calendar days from receipt of the copy of the award certiorari, despite availability of appeal, may be
or decision by the parties. (Art. 262-A, LC) entertained, such as:
XPN: Decisions of VA may still be subject to judicial 1. When public welfare and advancement of public
review. policy dictates;
NOTE: Art. 262-A deleted the word “unappealable” 2. When the broader interest of justice so
from Art. 263. It makes the voluntary arbitration requires;
award final and executory after 10 calendar days
from receipt of the copy of the award or decision by 3. When the writs issued are null and void; or
the parties. Presumably, the decision may still be
reconsidered by the VA based on a motion for 4. When the questioned order amounts to an
reconsideration duly filed during that period. oppressive exercise of judicial authority.
(Albert Teng v. Alfredo Pahagac, G.R. No. 169704, 17 (Azucena, 2016)
Nov. 2010)
2024 GOLDEN NOTES
Period of Appeal is 10 days Not 15 days parties the opportunity to move for a
reconsideration from the voluntary arbitrator's
In Coca-Cola Bottlers PH, Inc. Sales Force Union v. decision consistent with the principle of
Coca-Cola Bottlers PH., Inc, (G.R. No. 155651, 28 July exhaustion of administrative remedies. On 21
2005), the Court declared that the decision of the VA May 2018, the CA denied the motion. The CA
had become final and executory because it was cited the ruling in Philippine Electric Corp.
appealed beyond the 10-day reglementary period. (PHILEC) v. CA that a party may choose to
Despite Rule 43 providing for a 15-day period to reconsider or appeal the voluntary arbitrator's
appeal, the SC ruled that the VA’s decision must be decision within 10 calendar days from notice.
appealed before the CA within 10 calendar days Yet, the Union filed its appeal beyond the 10-day
from receipt of decision. The 10-day period to reglementary period. Specifically, the Union
appeal under LC being a substantive right, this received the denial of its motion for
period cannot be diminished, increased, or modified reconsideration on 27 Nov. 2017 but filed a
through the Rules of Court because the Rules of petition for review before the CA only on 12 Dec.
Court are subordinate to the statute. 2017 or five days late. Is the dismissal proper?
NOTE: A VA by the nature of his functions acts in A: NO. Under Art. 276 of the LC, the award or
quasi-judicial capacity. There is no reason why the decision of voluntary arbitrators shall be final and
VA’s decisions involving interpretation of law should executory after ten (10) calendar days from notice.
be beyond the SC’s review. Administrative officials On the other hand, Rule 43 of the Rules of Court
are presumed to act in accordance with law, yet the provides that an appeal from the judgment or final
SC will not hesitate to pass upon their work where a orders of voluntary arbitrators must be made within
question of law is involved or where a showing of 15 days from notice. With these, the Court has
abuse of authority or discretion in their official acts alternatively used the (10) day or 15-day
is properly raised in petitions for certiorari. reglementary periods. In Guagua National Colleges
(Continental Marble Corporation v. NLRC, G.R. No. L- v. CA (G.R. No. 188492, 28 Aug. 2018), the Court en
43825, 09 May 1988) banc settled the confusion and clarified that the ten
(10) day period in Art. 276 should be understood as
Q: On 22 Sept. 2017, the voluntary arbitrator the time within which the adverse party may move
held that Lumbre, et al., are not entitled to the for a reconsideration from the decision or award of
salary increases since they had executed the voluntary arbitrators. Thereafter, the aggrieved
quitclaims upon their retirement. Dissatisfied, party may appeal to the CA within 15 days from
the Union moved for a reconsideration. On 09 notice pursuant to Rule 43 of the Rules of Court.
Nov. 2017, the arbitrator denied the motion for Here, the records reveal that the Union received the
lack of merit. On 27 Nov. 2017, the Union voluntary arbitrator's resolution denying its motion
received a copy of the voluntary arbitrator's for reconsideration on 27 Nov. 2017. As such, the
resolution. On 12 Dec. 2017, the Union elevated Union had 15 days or until 12 Dec. 2017 within
the case to the Court of Appeals (CA) through a which to perfect an appeal. Verily, the Union filed a
Petition for Review under Rule 43 docketed as petition for review well within the prescribed
CA-G.R. CEB-SP No. 11429. period. The CA erred in dismissing the petition
outright based solely on procedural grounds. Thus,
On 08 Mar. 2018, the CA dismissed the petition. a remand of the case for a resolution on the merits
The CA explained that the voluntary arbitrator's is warranted. (DORELCO Employees Union-ALU-TUCP
ruling is not subject to a motion for v. Don Orestes Romualdez Electric Cooperative. Inc.,
reconsideration and becomes final and G.R. No. 240130, 15 Mar. 2021, as penned by J.M.V.
executory unless appealed within 10 calendar Lopez)
days from notice. The Union sought
reconsideration invoking the pronouncement in Q: PSSLU had an existing CBA with Sanyo Phils.,
Teng v. Pahagac (G.R. No. 169704, 17 Nov. 2010) Inc. with a union security clause which provides
that the 10-day period gave the aggrieved that: “all members of the union covered by this
2024 GOLDEN NOTES
agreement must retain their membership in of company personnel policies but is a termination
good standing in the union as condition of dispute which comes under the jurisdiction of the
his/her continued employment with the LA. The dismissal of X is not an unresolved
company.” On account of anti-union activities, grievance. Neither does it pertain to interpretation
disloyalty and for joining another union, PSSLU of company personnel policy. (Maneja v. NLRC, G.R.
expelled 12 Ees from the union. As a result, No. 124013, 05 June 1998)
PSSLU recommended the dismissal of said Ees
pursuant to the union security clause. Sanyo Q: Sime Darby Salaried Ees Association-ALU
approved the recommendation and considered (SDSEA-ALU) wrote petitioner Sime Darby
the said Ees dismissed. Thereafter, the Pilipinas (SDP) demanding the implementation
dismissed Ees filed with the Arbitration Branch of a performance bonus provision identical to
of the NLRC a complaint for illegal dismissal. the one contained in their own CBA with SDP.
Does the voluntary arbitrator have jurisdiction Subsequently, SDP called both respondents
over the case? SDEA and SDEA-ALU to a meeting wherein SDEA
explained that it was unable to grant the
A: NO. The VA has no jurisdiction over the case. performance bonus. In a conciliation meeting,
Although the dismissal of the Ees concerned was both parties agreed to submit their dispute to
made pursuant to the union security clause voluntary arbitration. Their agreement to
provided in the CBA, there was no dispute arbitrate stated, among other things, that they
whatsoever between PSSLU and Sanyo as regards were "submitting the issue of performance
the interpretation or implementation of the said bonus to voluntary arbitration." Does the
union security clause. Both PSSLU and Sanyo are voluntary arbitrator have the power to pass
united and have come to an agreement regarding the upon the question of whether to grant the
dismissal of the Ees concerned. Thus, there is no performance bonus and to determine the
grievance between the union and management amount thereof?
which could be brought to the grievance machinery.
The dispute is between PSSLU and Sanyo. The A: YES. In their agreement to arbitrate, the parties
dispute, therefore, does not involve the submitted to the VA the “issue of performance
interpretation or implementation of a CBA. (Sanyo bonus.” The language of the agreement to arbitrate
Philippines Workers Union-PSSLU v. Canizares, G.R. may be seen to be quite cryptic. There is no
No. 101619, 08 June 1992) indication at all that the parties to the arbitration
agreement regarded the “issue of performance
Q: X was employed as a telephone operator of bonus” as a two-tiered issue, only one tier of which
Manila Midtown Hotel. She was dismissed from was being submitted to arbitration. Possibly, Sime
her employment for committing the following Darby’s counsel considered that issue as having dual
violations of offenses subject to disciplinary aspects and intended in his own mind to submit only
actions, namely: falsifying official documents one of those aspects to the VA, if he did, however, he
and culpable carelessness-negligence or failure failed to reflect his thinking and intent in the
to follow specific instructions or established arbitration agreement. (Sime Darby Phils. v.
procedures. X then filed a complaint for illegal Magsalin, G.R. No. 90426, 15 Dec. 1989)
dismissal with the Arbitration branch of the
NLRC. The Hotel challenged the jurisdiction of Q: Apalisok, production chief for RPN Station,
the Labor Arbitrator on the ground that the case was dismissed due to her alleged hostile,
falls within the jurisdictional ambit of the arrogant, disrespectful, and defiant behavior
grievance procedure and voluntary arbitration towards the Station Manager. She informed RPN
under the CBA. Does the LA have jurisdiction that she is waiving her right to resolve her case
over the case? through the grievance machinery provided in
the CBA. The voluntary arbitrator resolved the
A: YES. The LA has jurisdiction. The dismissal of X case in the Ee’s favor.
does not call for the interpretation or enforcement
2024 GOLDEN NOTES
On appeal, the CA ruled in favor of RPN because
it considered Apalisok’s waiver to file her NOTE: It does not cover “money claims” consequent
complaint before the grievance machinery as a to an illegal dismissal, such as backwages and
relinquishment of her right to avail herself of the damages due to illegal dismissal. (Protective
aid of the voluntary arbitrator. The CA said that Maximum Security Agency, Inc. vs. Fuentes, G.R. No.
the waiver had the effect of resolving an 169303, 11 Feb. 2015)
otherwise unresolved grievance, thus the
decision of the VA should be set aside for lack of GR: 3 years from the time the cause of action
jurisdiction. Is the ruling of the CA correct? accrued; otherwise forever barred (Art. 306, LC)
A: NO. Art. 262 of the LC provides that upon XPN: Promissory Estoppel
agreement of the parties, the VA can hear and decide
all other labor disputes. The Ees waiver of her Promissory Estoppel
option to submit her case to grievance machinery
did not amount to relinquishing her right to avail It may arise from the making of a promise, even
herself of voluntary arbitration. Contrary to the though without consideration, if it was intended
finding of the CA, voluntary arbitration as a mode of that the promise should be relied upon. If in fact it
settling the dispute was not forced upon RPN. Both was relied on, a refusal to enforce it would virtually
parties indeed agreed to submit the issue of validity sanction the perpetration of fraud or would result in
of the dismissal of petitioner to the jurisdiction of other injustice. It presupposes the existence of a
the VA by the Submission Agreement duly signed by promise on the part of one against whom estoppel is
their respective counsels. The VA had jurisdiction claimed. The promise must be plain and
over the parties’ controversy. (Apalisok v. RPN, G.R. unambiguous and sufficiently specific so that the
No. 138094, 29 May 2003) court can understand the obligation assumed and
enforce the promise according to its terms.
NOTE: To make out a claim of promissory estoppel,

J. PRESCRIPTION OF ACTIONS
a party bears the burden of establishing the
following elements:
Prescriptive Period
1. A promise was reasonably expected to induce
action or forbearance;
Refers to the length of time within which an action
or complaint can be filed. After that period the
2. Such promise did, in fact, induce such action or
complaint will not prosper, it will be dismissed.
forbearance; and
(Azucena, 2021)
3. The party suffered detriment as a result.

1. MONEY CLAIMS (Accessories Specialists v. Alabanza, G.R. No.
(Art. 306, LC) 168985, 23 June 2008)
Coverage Elements of Promissory Estoppel
All money claims arising from Ee-Er relations 1. A promise was reasonably expected to induce
accruing during the effectivity of the Labor Code action or forbearance;
(Art. 306, LC)
2. Such promise induce action or forbearance; and
Art. 306 cover claims for OT pay, holiday pay, SIL,
salary differentials, and illegal deductions by an Er. 3. The party suffered detriment as a result.
It also covers money claims arising from seafarer’s (Poquiz, 2018)
contract. (Azucena, 2021)
2024 GOLDEN NOTES
2. ILLEGAL DISMISSAL Effect of Filing Then Withdrawing a Complaint
(Art. 1146, NCC)
The filing of the illegal dismissal complaint
interrupts the running of the prescriptive period. If
Actions based on injury to rights prescribe in four
such complaint, however, is dismissed or voluntarily
(4) years under Art. 1146 of the NCC rather than
withdrawn, the dismissal or voluntary withdrawal is
three (3) years as provided for under the LC. An
effectively erased.
action for damages involving a plaintiff separated
from his employment for alleged unjustifiable cause
Q: Workers were terminated in
is one for injury to the rights of the plaintiff and
October/November 1997. They filed illegal
must be brought within four (4) years. (Callanta v.
dismissal complaint in May 1998 but withdraw
Carnation Phils., 145 SCRA 268; Teekay Shipping
it voluntarily in March 1999. Few years later,
Phils., Inc. v. Concha, G.R. No. 185463, 22 Feb. 2012).
however, they again filed the same kind of
complaint in June 2002 or almost five years after
Simply stated, when one is arbitrarily and unjustly
their dismissal in 1997. Is the complaint filed
deprived of his job or means of livelihood, the action
out of time?
instituted to contest the legality of one's dismissal of
employment constitutes, in essence, an action
A: YES. The four (4)-year period to file an illegal
predicated upon an injury to the rights of the
dismissal complaint had lapsed. The eight-month
plaintiff, as contemplated under Art. 1146 of the
period during which their cases were pending
NCC, which must be brought within four (4) years.
should not be excluded from the four (4)-year
(Callanta v. Carnation Philippines, Inc., G.R. No.
prescriptive period. (Montero v. Times
70615, 28 Oct. 1986)
Transportation, G.R. No. 190828, 16 Mar. 2015)
Prescriptive Period Not Suspended by Criminal

Laches
Case
Laches or sleeping on one’s right, can defeat an
action such as a complaint for illegal dismissal,
The filing of the criminal case against the Ee does
because if one has a right to assert, he should assert
not have the effect of suspending or interrupting the
it in due time. (Azucena, 2016)
prescriptive period for the filing of an action for
illegal dismissal. An action for illegal dismissal is an
NOTE: Laches cannot be taken against the
administrative case which is entirely separate and
complainant if there is a valid reason for the delay in
distinct from a criminal action for estafa. Each may
filing the action. When an employee was dismissed,
proceed independently of the other. (Pepsi Cola
and the matter of his dismissal was then referred to
Bottling Company v. Guanzon, G.R. No. 81162, 19 Apr.
the grievance machinery pursuant to the provision
1989)
in the existing collective bargaining agreement, and
the grievance machinery had a final meeting after
Backwages and Damages by Reason of Illegal
quite a long while thereafter, the complaint for
Dismissal
illegal dismissal was then filed, the action was not
barred by laches, as the pendency of the matter
Claims for backwages, damages, and attorney's fees
before the grievance machinery affected the
arising from the Ee's claim of illegal dismissal shall
ripeness of the cause of action for illegal dismissal.
prescribe in 4 years, NOT the three (3)-year period
(Radio Communications of the Philippines, Inc., v.
for filing money claims under Art. 306 of the LC.
NLRC, G.R No. 102958, 25 June 1993)
(Arriola v. Pilipino Star Ngayon, G.R. No. 175689, 13
August 2014)
2024 GOLDEN NOTES
Elements of Laches Unfair labor practices prescribe in one (1) year from
the date of commission, otherwise, they shall be
1. Conduct of the defendant or one under whom forever barred. However, the running of the one-
he claims, giving rise to the situation of which year period is interrupted during the pendency of
the complaint is made and for which the the labor case (Art. 305, LC)
complaint seeks remedy;
4. ILLEGAL RECRUITMENT
2. Delay in asserting the complaint’s rights. The
(Sec. 12, R.A. No. 8042, as amended)
complainant having had knowledge or notice of
the part of the defendant’s conduct and having
Illegal recruitment cases under this Act shall
the opportunity to institute the suit;
prescribe in five (5) years.
3. Lack of knowledge or notice on the part of the
However, illegal recruitment cases involving
defendant that the complainant would assert
the right on which he bases his suit; and economic sabotage shall prescribe in 20 years. (Sec.
12, Migrant Workers and Overseas Filipinos Act of
1995, R.A. 8042)
4. Injury or prejudice to the defendant in the event
relief is accorded to the complainant, or the suit
NOTE: R.A. 8042 only applies to Migrant Workers.
is not held to be barred. (RCPI v. NLRC, G.R. No.
102958, 25 June 1993) Illegal recruitment for local employment is subject
to the provisions of the LC, in particular, Art. 305(1),
to wit: “offenses penalized under this Code x x x
3. UNFAIR LABOR PRACTICES shall prescribe in three (3) years.”
(Art. 305, LC)
2024 GOLDEN NOTES
SUMMARY OF PRESCRIPTION OF ACTIONS
Rules Regarding the Prescriptive Period Provided for Under the LC and Special Laws on Labor
SUBJECT PRESCRIPTIVE PERIOD
Criminal Offenses penalized under 3 years from the date of commission or discovery thereof
the LC and its IRR (People v. Duque, G.R. 100285, 13 Aug. 1992)
1 year from the accrual of such ULP; otherwise forever

ULP
barred (Art. 305, LC)
Money Claims, including incremental GR: 3 years from the time the cause of action accrued;
proceeds arising from tuition fees under otherwise forever barred (Art. 306, LC)
PD 451 (MLQU Association v. MLQU, G.R.
No. 82312, 19 Apr. 1989) XPN: Promissory Estoppel
All money claims accruing prior to the Within 1 year from the date of effectivity, in accordance with
effectivity of the LC IRR; otherwise, they shall forever be barred
4 years. It commences to run from the date of formal

Illegal Dismissal
dismissal. (Mendoza v. NLRC, G.R. No. 12248, 05 Mar. 1998)
4 years – Since an award of backwages is merely consequent

to a declaration of illegal dismissal. (Arriola v. Pilipino Star
Claim for backwages
Ngayon, Inc. and Miguel G. Belmonte, G.R. No. 175689, 13 Aug.
2014)
Workmen’s Compensation claims accruing
They shall be filed not later than Mar. 31, 1975 before the
prior to the effectivity of the LC and
appropriate regional offices of the DOLE. (Art. 291, LC)
between 01 Nov. 1974-31 Dec. 1974
Reinstatement 4 years (Callanta v. Carnation, G.R. No. 70615, 28 Oct. 1986)
Simple Illegal Recruitment 5 years (RA 8042)
Syndicated or Large-scale Illegal
20 years (RA 8042)
Recruitment
After 3 years from the date of submission of the annual

financial report to the DOLE or from the date the same should
Union funds
have been submitted as required by law, whichever comes
earlier. (Sec. 5, Book VII, Rule II, IRR)
20 years from the time of delinquency is known or the

SSS Violations assessment is made or the benefit accrues as the case may be
(RA 8282; Lo v. CA, G.R. No. 128667, 17 Dec. 1999)
GR: 4 years
GSIS Benefits
XPN: Life and retirement benefits – Imprescriptible
Ee’s Compensation Claims 3 years from accrual of cause of action
2024 GOLDEN NOTES
SUMMARY OF JURISDICTIONS
SOLE vs. RD vs. LA
VISITATION AND
ENFORCEMENT POWER REGIONAL DIRECTOR LABOR ARBITER
OF THE SOLE
LA exercises original and exclusive
jurisdiction on cases involving :
Enforcement of labor legislation in 1. ULP;

general, such as: 2. Termination disputes;
Under Art. 129 of the LC, the 3. Wages;
1. Inspection of establishments; Regional Director has jurisdiction 4. Rates of pay;
and over money claims not exceeding 5. Hours of work;
P5,000 arising from Er-Ee 6. Other terms of employment,
2. Issuance of orders to compel relationship where the claimant claims for damages arising from
compliance with labor does not seek reinstatement. Er-Ee relationship, the legality
standards, wage orders and of strikes and lockouts; and
other labor laws. 7. All other claims arising from Er-
Ee relationship involving an
amount exceeding Php
5,000.00.
LA decides the case within 30

Proceeding is an offshoot of Initiated by sworn complaints filed
calendar days after submission of
routine inspections. by any interested party.
the case by the parties for decision.
Appealable to Secretary of Labor.

(In case compliance order is issued Appealable to NLRC Appealable to NLRC
by Regional Office)
2024 GOLDEN NOTES
Original and Exclusive Jurisdiction of SEC vs. Regular Trial Courts
SEC REGULAR TRIAL COURTS

1. Intra-corporate controversies - the controversy
must pertain to any of the following
relationships:
Between the corporation partnership or

associations and:
a. the public;
b. its stockholders, partners, members or
officers;
c. the State as far as its franchise permit or
license to operation is concerned; and
No longer have jurisdiction over intra-corporate d. among stockholders, partners or associates
controversies by virtue of PD 902-A. amongst themselves. (Mailand v. Movilla,
G.R. No. 118088, 23 Nov. 1995)
2. Money claims not arising from or not in

connection with employment; (Azucena, 2016)
3. Actions filed by 3rd parties being affected by the

strike of people who are not the Ees; and
(Azucena, 2016)
4. Criminal acts done in a strike. (Azucena, 2016)
2024 GOLDEN NOTES
Labor Arbiter vs. NLRC
LA NLRC
Original and Exclusive Jurisdiction
1. ULP cases;
2. Termination disputes or illegal dismissal

complaints;
3. If accompanied with a claim for reinstatement,

those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment;
4. Claims for actual, moral, exemplary and other

forms of damages arising from the Er-Ee
relations; 1. Certified labor disputes causing or likely to cause
a strike or lockout in an industry indispensable to
5. Cases arising from any violation of Art. 264 (now national interest, certified to it by the SOLE or the
Art. 274) of this LC, including questions involving President of the Philippines for compulsory
the legality of strikes and lockouts; and arbitration;
6. Except claims for Ees Compensation, Social 2. Injunction in ordinary labor disputes to enjoin or
Security, Medicare and maternity benefits, all restrain any actual or threatened commission of
other claims arising from Er-Ee relations, any or all prohibited or unlawful acts or to
including those of persons in domestic or require the performance of a particular act in any
household service, involving an amount labor dispute which, if not restrained or
exceeding P5,000.00 regardless of whether performed forthwith, may cause grave or
accompanied with a claim for reinstatement. irreparable damage to any party;
7. Money claims arising out of Er-Ee relationship or
by virtue of any law and contract, involving a 3. Injunction in strikes or lockouts under Art. 279 of
Filipino worker for overseas deployment, the LC; and
including claims for actual, moral, exemplary and
other forms of damages as well as employment 4. Contempt cases.
termination of OFWs;
5. Verified petitions (Sec. 3, Rule XII, 2011 NLRC
8. Wage distortion disputes in unorganized Rules of Procedure)
establishments not voluntarily settled by the
parties pursuant to R.A. 6727 as reflected in Art.
124;
9. Enforcement of compromised agreements when

there is non-compliance by any of the parties
pursuant to Art. 233 of the LC, as amended;
10. Contested cases under the exception clause of

Art. 128(b) of the LC; and
11. Other cases as may be provided by law.
2024 GOLDEN NOTES
Appellate Jurisdiction
1. Decisions, awards, or orders of the LA over:
a. Cases covered by Art. 224 (b);

b. Cases covered by Sec. 10 of Migrant
Worker’s Act; and
c. Cases decided under Art. 124 on wage
distortion in non-unionized
establishment;
2. Denial of the claim of the third party claimant

No appellate jurisdiction.
where property was levied by the Sheriff of LA;
3. Cases decided by the Regional Offices of DOLE in

the exercise of its adjudicatory function under
Art. 129 of the LC over monetary claims of
workers amounting to not more than P5,000 and
not accompanied by claim for reinstatement; and
4. Decision by the LA in Contempt contempt cases.

(Art. 225(d), LC)
2024 GOLDEN NOTES
DOLE Regional Director vs. DOLE Secretary
DOLE REGIONAL DIRECTOR DOLE SECRETARY

1. Labor standards enforcement cases; (Art. 128, LC)
2. Small money claims cases arising from labor

standards violations in the amount not exceeding
P5,000.00 and not accompanied with a claim or
reinstatement; (Art. 129, LC)
3. Occupational safety and health violation; (Rule 6,

Rules on the Disposition of Labor Standards Cases in
the Regional Offices)
4. Complaints against private recruitment and

placement agencies for local employment; (DOLE
DO No. 141-14, s. 2014)
1. Disputes causing or likely to cause a strike or

5. Cases submitted for voluntary arbitration in their
lockout in an industry indispensable to the
capacity as Ex- Officio Voluntary Arbitrators (DO
national interest
No. 83 - 07, s. 2007)
2. Visitorial powers to over Ers; (Art. 128, LC)

6. Applications for registration of independent labor
unions, chartered locals, workers' associations.
3. Issue a writ of execution on a judgment; and (Art.
(Sec. 1, Rule III, Book V, Omnibus Rules)
224, LC)
7. Requests for SEBA certification (Sec. 1, Rule VII,

4. Suspend the effects of the termination pending
Book V, Omnibus Rules)
resolution of the dispute in the event of a prima
facie finding by the appropriate official of the
8. Petitions for certification election.
DOLE before whom such dispute is pending that
the termination may cause a serious labor dispute
9. Complaints or petitions involving labor unions with
or is in implementation of a mass lay-off. (Art. 277
independent registrations, chartered locals,
(b), LC)
workers' associations, its officers or members (Sec.
4, Rule XI, Book V, Omnibus Rules)
10. Petitions for cancellation of registration of labor

unions with independent registration, chartered
locals and workers association (Sec. 4, Rule XI, Book
V, Omnibus Rules)
11. Petitions for deregistration of collective bargaining

agreements (Sec. 4, Rule XI, Book V, Omnibus Rules)
and
12. Dispute over conduct of election of officers of labor

organizations (Sec. 2, Rule XII, Book V, Omnibus
Rules)
2024 GOLDEN NOTES
1. Appeal from and adverse decision of the POEA.
(2003 POEA Rules and Regulations, Rule V, Part VII,
Sec. 1; Eastern Mediterranean Maritime Ltd. And
Agemar Manning Agency Inc., v. Surio, G.R. No.
154213, Aug. 23, 2012)
2. Appeal the order or results of a certification

election on the ground that the Rules and
Regulations or parts thereof established by the
SLE for the conduct of election have been violated.
(LC, Art. 259)
3. A review of cancellation proceedings decided by

No appellate jurisdiction. the BLR in the exercise of its exclusive and original
jurisdiction. (Abbott Laboratories Philippines, Inc.
v. Abbott Laboratories Ees Union, G.R. No. 131374,
Jan. 26, 2000)
4. Appeals from the order/decision of the Med-

Arbiter involving certification election. (Sec. 25,
Rule VII, Book IX, Omnibus Rules)
5. The decision of the Bureau Director in the exercise

of his/her original jurisdiction involving
inter/intra union disputes may be appealed to the
Office of the Secretary
2024 GOLDEN NOTES
Voluntary Arbitrator vs. Bureau of Labor Relations
VA BLR
1. All inter-union and intra-union conflicts; (Art. 226,
LC)
2. All disputes, grievances or problems arising from

or affecting labor-management relations in all
1. Disputes concerning CBA implementation or workplaces, except those arising from the
personnel policy enforcement (Azucena, 2016) implementation or interpretation of collective
bargaining agreements; (Art. 226, LC)
2. Disputes regarding ULPs and bargaining
deadlocks; (Azucena, 2016)
3. Complaints involving federations, national unions,
3. Money claims arising from a “interpretation and industry unions, its officers or member
implementation of a CBA, and those arising from organizations; (Sec. 4, Rule XI, Book V, Omnibus
the interpretation or enforcement of company Rules)
personnel policies. (Del Monte v. Saldivar, G.R. No.
158620, 11 Oct. 2006) and 4. Petition for the conduct of election of officers in the
case of federations, national or industry unions and
4. Illegal dismissal cases that are submitted before it trade union centers; (Sec. 2, Rule XII, Book V,
by the parties upon agreement. Ominibus Rules)
5. A request for examination of books of accounts of

federations or national unions and trade union
centers pursuant to Art. 274. (Sec. 3, Rule XIII, Book
V, Omnibus Rules)
Decisions/order of Med-arbiter or Regional Director

No appellate jurisdiction. relating to inter-union and intra-union conflicts (Sec.
15, Rule XI, Book V, Omnibus Rules)

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University of Santo Tomas

FACULTY OF CIVIL LAW (1734)

LABOR LAW AND

2024 GOLDEN NOTES

Address: Academics Committee

Tel. No: (02) 8731-4027

Released in the Philippines, 2024.

2024 UST LAW REVIEW

RAIAH CASSANDRA O. GUITAN

ANGELA BEATRICE S. PEÑA CIVIL LAW

MICHAELA THELMA B. BRAVO TAXATION LAW

CAMILLE RAZEN D. SUMERA CRIMINAL LAW

MARY GENELLE S. CLEOFAS REMEDIAL LAW

ALEA CHAIRMANE A. LOQUINARIO

LORRAINE MARIE D. TUMOLVA LLYRA M. SEMANA

STEPHEN NICOLE R. ARAN MARY CLAIRE G. LABANGCO

JOHN MARK M. ANCERO AUDRICE C. SERRANO

DEAN SALVADOR A. POQUIZ

ATTY. ARTHUR B. CAPILI

ATTY. ELGIN MICHAEL C. PEREZ

JUDGE PHILIP A. AGUINALDO

LENY G. GADIANA, R.G.C.

Dean Jacqueline O. Lopez-Kaw, DCL

Dean Salvador A. Poquiz

Commissioner Leonard Vinz Ochoa Ignacio

Labor Arbiter Benedict G. Kato

Atty. Arnold E. Cacho

Atty. Irvin Joseph Fabella

Atty. Ian Jerny E. De Leon

Atty. Roland L. Marquez

Atty. Alwyn Faye B. Mendoza

Atty. Cesar E. Santamaria, Jr.

THE RISK OF USE OF THIS BAR

A. SOURCES OF LABOR LAWS ............................................................................................................................................... 1

II. RECRUITMENT AND PLACEMENT OF WORKERS ........................................................................................................20

III. EMPLOYER-EMPLOYEE RELATIONSHIP ....................................................................................................................... 56

A. EMPLOYER-EMPLOYEE RELATIONSHIP ....................................................................................................................56

IV. LABOR STANDARDS ............................................................................................................................................................. 95

A. CONDITIONS OF EMPLOYMENT ...................................................................................................................................95

V. SOCIAL WELFARE BENEFITS ........................................................................................................................................... 213

VI. MANAGEMENT PREROGATIVE ..................................................................................................................................... 264

A. OCCUPATIONAL QUALIFICATIONS ........................................................................................................................... 267

VII. POST-EMPLOYMENT ....................................................................................................................................................... 277

A. TERMINATION OF EMPLOYMENT BY EMPLOYER............................................................................................... 277

VIII. LABOR RELATIONS ........................................................................................................................................................ 340

A. RIGHT TO SELF-ORGANIZATION............................................................................................................................... 340

IX. JURISDICTION AND REMEDIES ..................................................................................................................................... 410

A. LABOR ARBITER............................................................................................................................................................. 410

1. Security of tenure; 1. Law;

7) Decision Making Processes – Right to

A rule or regulation promulgated by an Labor Dispute between Government Ees

Rationale: This rule is rooted in the constitutional

Q: One of Pacific Airline's policies was to hire

Judicial decisions applying to or interpreting the

Social Legislation The Constitutional policy to provide full protection

They shall be entitled to security of tenure, humane 4. SOCIAL JUSTICE

All persons employed in commercial, industrial, and

Magna Carta for Disabled Persons

No disabled person shall be denied access to

Equal Work Opportunities vs. Equal Protection