LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
JUNE 19 2015 KJD
Inspirational speech
How do you get into the groove? There is no substitute to
immersion. You read. Cover the most important cases. If
you go further, that's when the vocabulary seeps into you.
Just like the soaking of barbeque- it takes time but eating it
is fast. That's what you do in law school- you soak it in. Or
as they say now, you suck up! That's the grind
There's no trumpets or medals. People with less
backgrounds than you have made it because they read.
Story: Classmate in law school 31 years ago who almost lost
his life in a storm while fishing. He was a boy in his uncle's
store at Calinan. He took up accounting and passed on his
second take. He was then no longer a boy but the auditor.
From an employer-employee relationship, he is now an
independent contractor. He traveled 32 kilometers everyday
to go to law school. He graduated regular, while still
working. He went to Manila for review but became sick and
failed the exam. He eventually passed and became a lawyer
and even a public officer.
There are no medals for that. There is no medal for the
grind. In law, you do not know something unless you have
read it. There are no geniuses in law, there are only hard
workers. There is nothing abstruse about the law, it's just
that there's so much of it.
If you are unattached or can do it without working then do
not change your lifestyle. Many people change it because
unbeknownst to them they have already given up. That is
why they change their life. Because it is a more acceptable
excuse to blame the relationship or work. Examine yourself.
Is that my state of mind?
You have to have a radical self-knowledge to hold yourself.
Law is not everything because you can be somebody else.
But if you want to be a lawyer... there are more and more
laws and cases to be read, it will not get easier. It is my duty
to remind you of the grind. Accept it. I do not mince words.
Accept the pain and try to fall in love with it. You can. Not
just with one subject, but with the whole law.
SOCIAL JUSTICE
You have taken up social justice in 1st year- in constitutional
law. It is found in the declaration of principles of state
policies in Article II. It is developed further in Article XIII of
the Constitution.
1
This is the springboard of labor law. Labor law is just an
application of social justice.
Social justice - in its essence, as it is used in the
Constitution, simply means the equalization of economic,
political and social opportunities with the special emphasis
on the duty of the state to tilt the balance of social forces by
favoring the disadvantaged in life (definition of Fr. Bernas in
his book)
Social justice first begins with the premise that our society is
basically, radically flawed. All is not well with our society.
Our society is sick. There is an imbalance which consists of:
too many are too poor and too few are too rich beyond what
they can use for their lifetimes. Because there is an
imbalance, there is social justice.
Social justice is a command, first of all in the legislature, to
pass laws in favor of the disadvantaged.
Who are these disadvantaged? They are name in the
Constitution: labor, subsistence fishermen, subsistence
farmers, cultural minorities, working women.
By singling out these sectors, what happens? They receive
the imprimatur from the Constitution of lawful classification.
In every law there is classification; you segregate a group
and you give a penalty, right or benefit.
EXAMPLE: Those who take the personal property belonging
to another without the consent of the other for personal gain
are thieves and they should go to jail. This is a classification.
Those who are working for a salary are workers (working
class) and they should receive benefits.
Because the classification is already predetermined in the
Constitution then these are not undue classification.
Ex. Women should not work at night (this law was effective
for 40 years) to defend the morals of women. The women
cried out and said why they are deprived of the 24-hour
work day and only males can work for 24 hours without any
prohibition? The Congress then removed it from the statute
books
There is a classification of working women in the
Constitution. Because these classifications are in the
Constitution, they can no longer be successfully attacked as
invalid legislation for being undue classification. Judicial
discretion has become limited because of the enumeration in
the Constitution.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Is it healthy to begin the fundamental law of the land on a
negative reading of our society? That our society is flawed?
Is it not better to look at our society and look at the
positive? After all, a majority of the citizens are poor. They
do not have social justice. This is actually a discussion for
legal philosophy. When you come to think of it, the concept
of law itself and our Constitution is that man has a tendency
to abuse. That is why government is broken up into 3
departments to balance it out. Only one can say what the
law is, the other must execute the law and the third branch
adjudicates controversies that arise out of it.
If you thought man was good then you just put it all
together into one such as the king. In the days of kings, the
king laid down the law, he executed and enforced that law
and he also judged those that were brought before him who
had broken the law. This was eliminated. Very few kingdoms
now work.
What is the premise behind law itself? It is the age-old
premise of Plato:
If have good men, really good men, dictatorship is the best
form of government. Only one will rule.
If the people are not so good then an oligarchy is deemed
best. A rule by the few.
But then if everybody is bad, then you have democracy.
That is the assumption derived. Social justice. Society is
fatally flawed. If we don’t do something about it, and it is so
fatally flawed, that it will explode and then we will become
an unviable society.
EXAMPLE: Countries in Sudan, etc. no ending war with
generations without nothing else but banditry, etc.
You must do something to correct this imbalance. How do
we do correct it? You pass laws. Those who have less in life
will have more in law. This is the summary of the 1973
Constitution. Is this not communism?
Karl Marx: To each according to his needs, from each
according to what he can afford.
Simple formula? What happened to communism? It folded
up. (refer to the article Capitalism's mysterious triumph)
Find out why Paul Krugman thinks communism failed.
In the Constitution, are mentioned working class, labor,
subsistence farmers, subsistence fishermen, cultural
minorities, working women. But you do not find in the
2
Constitution the traditional recipients of state aid: orphans,
feeble-minded, insane, widows, minors that are abused.
They are not there. Why are they not there? Did the
Constitution overlook them?
[Not related]
Rule in our language: If you repeat a word it becomes less
intensive that what it denotes when it is only one word.
Ex. Buang to buang-buang, balay to balay-balay
What word if repeated becomes more intensive than the
first? Ubo to ubo-ubo
The orphans, widows, insane, etc. are not in the Constitution
because they are the common features of old society and
they were taken care of by the traditional role of the state:
parens patriae. It is the fundamental fatherhood of the
State. When everybody else has lost his parents, and is in
need of somebody to take care of him. Who is the ultimate
caretaker? It is the State.
Before, it used to be the Crown, the king. The origins of
parens patriae is the middle ages. The king had an army or
the lord a castle. The middle ages was terminal, there were
so many brigands moving around who exploited the weak.
The subjects of the king had a right to demand the king to
protect them so they can run and hide in the castle of the
king. In return, the king had a right to tax them because he
protected them. This is not the sovereign power to tax. It is
the original version of a social contract: I protect you so
therefore you give me part of your produce.
What happened to that social contract? Come the French
Revolution, all those philosophers which the Church
condemned, because it knew no better then, said that no
one can rule society without the consent of the governed.
Now it must be the governed who would determine (xxx).
Industrial revolution happened shortly after that. What
happened in the industrial revolution?
Because the king owned all the lands and everybody else
were all tenants, peasants. When there was the invention of
the cotton gin, there was the invention of the weaving
machine. Before, you could only weave one thread at a time.
There were more and more possibilities for that technology.
Wool became a very precious commodity. Then you had the
enclosures; the king encircled so much land, put down so
many sheep and drove out people. There were no more
farms. The people went to the cities, to working factories to
weave cloth.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
That was the beginning of the working class. People who
had no land, who had no wealth but had only the brawn in
their arms and rented themselves out. They got paid to work
for others. That is why when you look at your Civil Code,
work is lease of services.
Karl Marx was scandalized: The workers are no better than
prostitutes, women who sell themselves and their honor for
money; that is the worker who rents himself out. Marx
wanted to abolish employment (Communist manifest- the
most read essay in the world. Read it! Workers of the world
unite, you have nothing to lose but your chair)
Why? It is work that gives value to material. When man
applies work to a tree, it becomes a chair, etc. You sold your
dignity to create the chair.
That is the beginning of labor law. It does not have a long a
tradition as Civil or Constitutional Law. It has a short
tradition but it is a very complicated tradition because in a
short span of time, there are so many changes that are
happening.
EXAMPLE: Uber - independent contracting until the California
court declared that there is employer-employee relationship.
It's model is now questionable
Who would ever think of that? That is less than 200 years.
The system of contracting and subcontracting agents. Work
itself has been sliced. Unsaon mana? Economies have to
move. In order to move, there's a progression of products.
Those who have the skills to make these products now,
tomorrow, for the improved product they no longer have the
skills. Unemployment is written into the modern economy.
Ex. Earthen pot or kolon to the pig-iron caldero (already
foundry or metal work) to rice cooker (electric circuitry) to
Pyrex (glass technology)
What happened to those who were in the foundry? Out of
work, unemployed.
You cannot have full employment. If you do then your
society is stagnant- it does not improve.
What does our Constitution state? It espouses the policy of
full employment. Is our Constitution advocating a stagnant
ground?
The Civil law is based on a society where everyone stands in
equal footing with the other. That is an artificial construct. In
the Roman society, more than half of the people there were
slaves but they were considered as not part of Roman
3
society. They had a different law: jus gentium. But the
citizens, those who were living in the city, they had jus
civiles. That is why it is called civil law. The law of the
civilized. Why did they become slaves? They did not know
law, reason.
It is not social justice since in social justice, the poor or rich,
the different classes, is a dangerous thing so it must be
remedied.
Who takes care of the orphans, the minors? It is the State
by virtue not of social justice but by parens partriae.
Who takes care of the disadvantaged sectors? It is still the
State but it is by virtue of social justice.
What is the difference between the two state actions? The
State reaching out to the orphan or the working class
1. In parens patriae- the State reaching out to the
orphans, widows, insane: it is by way of exception.
You do not assume that all children are orphans.
They only require state attention when they no
longer have parents. If you. State action if by way
of exception
2. In social justice- the State action is permanent, it is
continuous and consistent. It is a permanent
posture because they are addressing a structural
society.
Employee-employer relationship - a very small portion of
rendering service of another; it is a very narrow contract
Most rendering of service to another is not paid.
Ex. You mother doing household chores
Just like in contracts, most are implied and not expressed.
Final note: Disabuse your mind.
JUNE 26 2015 ZM
EMPLOYER-EMPLOYEE RELATIONSHIP
READ: Royal homes marketing corporation vs Alcantara 731
SCRA 147 (2014)
With the changing times it is crucial that you see how the
court thinks. There is so much rendition of service to
another. That is employer employee relationship; that you
work for another. You exert effort and you labor for another.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
If you labor for yourself you are not in an employer-
employee relationship. You are self employed. If you exert
effort by yourself and you do that every morning in that
small room, you are laboring but that is not the labor that is
talked about in the labor code.
You have to differentiate that because there are many
instances when there is rendition of service to another and it
is compensable but it is covered by different laws. In fact
most rendition of service to another is not compensated.
So many meals prepared, so many houses that are cleaned ,
so much laundry that are done by the parents for the
children of their family. It’s incorrect to say that this (labor
code) governs rendition of service to another. This is just a
very small part. The trick is you must know when this (labor
code) becomes applicable.
You walk down the street somebody asks you, you must be
able to tell if you are already employer whether the labor
code applies. It may not be the labor code but it may be
something else.
QUASI CONTRACTS
Like in the civil code we have quasi-contracts. It is not a
contract, it is a quasi-contract. It is as if it were a contract.
The person takes over an undertaking because it has been
abandoned by another person who has legal right to it. So
he abandons it then somebody takes over and then he finds
it intact or even blooming. And then he says now I can take
over because I own this. He cannot do that without paying
that someone who worked to keep this undertaking going.
This is the giving of service without his consent. That is
called a quasi contract and the basis for compensation to be
owing is the principle of unjust enrichment.
If he does not pay this guy who took over his welding shop
while he left for Saudi Arabia and he comes back and it is
intact, he will be enriching himself at the expense of the
person who worked. It is a principle enshrined in the civil
code and it is not by virtue of contract. The law applicable is
the civil code and not the labor code.
INDEPENDENT CONTRACTING
You are in Fatima that is further in buhangin whether there
are subdivisions and you want to be brought down here. You
have an android cell phone and you have this uber
application and you manipulate it and then there is someone
who will bring you down. You contact him, he gives the
price, you agree, and he brings you down. Suppose he
breaks down and you have already given the money then
4
there is a controversy. What law applies? Transportation? He
is not a common carrier. That is the problem and that
operates all over the world. That is, from my understanding,
independent contracting. Civil code applies and not the labor
code.
Importance of determining the law applicable and
the forum
It’s important to know the facts in these cases and the
differences so that you will know the forum to resolve. If it is
a labor case and it is a question of unpaid or underpaid
wages you go to the labor arbiter. But if it is an independent
contracting you got to the civil courts then the amount of
compensation is jurisdictional whether you go to city court or
in regional trial court. As far as the law that should be
applied, as far as the forum this is crucial.
Discussion about US Supreme Court decisions
In Kim et al vs burbon the issue is whether or not the
affordable care act of Obama is valid as to the subsidies that
the state is giving. It is not the congress who appropriated it
but the president. The Supreme court says yes. This is
crucial because this is the legacy of Obama.. Medicare is the
legacy of Johnson and SSS is the legacy of Roosevelt. This
universal affordable care is the legacy of Obama. This is the
second cases challenging the affordable care act. Next week
the Supreme Court will decide whether or not the same sex
marriage done in another state’s law will remain valid in 13
states that do not recognize same sex marriage. In the US
Supreme court, form the first Monday of October you will
know the cases they will handle for the next year. The rest is
dismissed.
Petition challenging BBL
I was asked by the archbishop of Davao what the chances of
these people (there are two archbishops there) are filing a
petition charging the BBL law. I told the bishop any first year
law student of Ateneo can tell you the outcome of that
petition. It is premature there is still no law and you are
already challenging that certain law. You are already telling
the congress not to legislate. That is the plenary power of
the congress. You studied that in constitutional law. There is
no controversy that is ripe. It is premature. Sure enough the
following day the SC says petition against BBL premature.
JURISPRUDENCE
1. LVN vs PHILIPPINE MUSICIANS GUILD (1 SCRA
132) 1961, En Banc
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
This is the most important case in labor jurisprudence. there
are landmark rulings there. And employer-employee
relationship is just the first one.
The musicians that are used by LVN wanted to form a union
so they filed a petition for certification election. The
response of LVN is that they deny the existence of
employer-employee relationship.
In the course of deciding the case, the SC goes into detail
about what determines employer-employee relationship.
In an earlier case, Viana vs alagadan the SC already gave
out the 4 requisites. So that is not why this (LVN) is a
landmark case.
Four requisites of ER-EE relationship
1. There is selection and hiring
2. There is payment of wages
3. There is power to dismiss
4. There is power of control
Power of control means that the putative employer has
the power to control or dictate to the one rendering service
not only the goal to be achieved but the means and manner
of achieving the goal.
But the Supreme court says the most important of these
tests is the power of control test. So much so that even if
the three are missing, if you have a pronounced appearance
of this power of control there can still be ER-EE relationship.
First requisite: Selection and Hiring
LVN says we make movies; we do not produce music. LVN
says when we make a movie, naturally a movie has music. It
is an addendum to the movie. We are not competent to do it
so we engaged the service of a musical director. We tell him
to provide music to it by reading the script. You should
judge what kind of music would be appropriate for this
movie.
The musical director will use standard music and pay all the
copyright or he will compose an original music. Then the
musical director will hire the musicians. Who does the
selection and hiring? The musical director and not LVN.
Second requisite: Payment of wages
It is the musical director who pays. Where does he get the
money? The musical director is paid a lump sum by LVN
because he knows the work of these musicians.
5
Third requisite: power to dismiss was not discussed but still
Why did the SC say that these people are employees
of the company and not of the musical director?
The power of control test has been passed and verified.
1. Each of these musicians are summoned by the
director but using call slip which says LVN music
company in its letter head.
2. The call slip says “we have a practice at this time be
there at the corner of rizal”. The bus of LVN picks
them up and not the musical director.
3. They are brought to the residence of musical
director but at the premises of LVN. They will be
practicing there.
4. The LVN feeds them meals so that they will stay at
the premises. Again, that is a badge of control.
5. FINALLY, when they do the final version of the
music that is appended into the film so that it will
forever accompany the film something happens; the
musical director is sidelined and the movie director
comes in and he takes over on how exactly the
piece of music is played. That is the essence of
power of control. To direct not only the goal, the
mood to be achieved but the manner and means of
achieving the goal. Then you are the employer and
there is ER-EE relationship.
Out of the four requisites, why does it not include
the rendition of service? Can there be employer-
employee relationship without rendition of service? There
can be because it is not included in the four requisites.
Is rendition of service essential in an er-ee
relationship?
It’s a common sense. Rendition of service to another-isn’t
that er-ee relationship? And yet legally speaking it is not
because if it were the moment the rendition of services
ceases, there is no actual rendition of service then there is
no er-ee relationship. But that is not the case. If an
employee goes on leave or vacation is that rendering
service? Yet he is considered still an employee.
The moment you sign a contract of employment, there is a
job description there and even if you haven’t rendered any
service there is already an er-ee relationship. Stick to the 4
requisites.
2. Vda. De Cruz vs Manila Hotel (cited by the SC in
the case of LVN)
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Vda de Cruz is the widow of Tirso Cruz I who is the
grandfather of Tirso Cruz III. Tirso Cruz I comes from a
family of performers. he was a member of a band. they
signed a contract with Manila Hotel they will play at the
lobby between certain hours. 6 in the evening to 9. It’s up to
them what to play but they were chosen because they have
the repertoire of music which manila hotel believe was xxx
to their visitors.
How they arrange the order of its music how they played it,
manila hotel did not care. Manila hotel only wanted them
there and they measure them by the presence of their
clientele.
Tirso Cruz I had a heart attack, brought to the hospital and
died. The wife says you have to pay me for workman’s
compensation because he is your employee.
Issue: Is tirso cruz an employee or not by virtue of that
contract?
SC said he is not because there was no power of control. He
was just called to play but the manner and means of
pleasing the clientele was not controlled by the hotel. It was
tirso who decided what to play how to play and what kind of
music he should play. That is his judgment. That is not
manila hotel’s. He is just told to please the clientele. That is
not control because control in order for an er-ee relationship
to exists must be as to the means and manner not only as to
the goal but also the means and the manner by which you
accomplish the goal.
3. Sterling products vs. Sol (decided two years after
LVN)
Sol is a radio monitor of Sterling products. She verifies
whether or not the advertisement that is contracted by an
advertiser with media is really complied with. She will listen
to the radio station but she is not informed when the
advertisement will air. She reports when she hears the
advertisement of sterling products and then the company
can verify as to whether of not the radio station is actually
playing according to the airtime it has paid.
The radio monitor does not work at the factory premises of
sterling products but stays at home. She just fix up the
form. Sol has an issue with the company with 13th month
pay. She says she is an employee. Sterling products says no,
you are not an employee but an independent contractor
because the power of control is not present because there is
a physical separation between us. You are at home. How
can control be exercised if there is physical separation.
6
Issue: is the power of control met even if there is physical
separation.
Even if she is doing something else like she is at home and
she has children to take care of and she cooks. Can she still
listen to the radio? Yes she can. Is that proof that there is
no possibility of legally complying with the requirement of
control. Does physical separation negate the power of
control test?
Held: Supreme Court says yes. The power of control test
can still be complied with even if there is physical
separation.
1. The radio that was given could not be tuned to just
any radio station but only to the radio station with
whom sterling products had contracts.
2. She had to fill up forms. She had to make reports of
these forms. Technically speaking, her hours were
controlled indirectly by the forms.
3.
4. Dy keh Beng vs international labor 90 SCRA 162
1970
Dy keh beng was a maker of kaings (baskets). These two
respondents were forming a labor union and wanted a
certification election in the workplace. Dy keh beng says
there is no er-ee relationship because we do not even know
these two. We have no record that they are our employees.
They are independent contractors. They make kaings in their
home and they deliver it to us and they we pay them. that’s
the end of our relationship. They are paid on a piece rate
basis. So they cannot be our employees.
Issues:
1. Is the piece rate basis pay determinative of the
legal characterization of the relationship? Does it
deny or affirm the existence of an er-ee
relationship?
2. Does the fact that you are paid on a piece rate
basis (pakyaw) negate the power of control test?
Dy keh beng’s claim: Because you are paid on pakyaw
basis there is no control. It is a sale and you relationship
with this person who does the labor is transactional. He
makes the basket, he delivers it to you, after you pay the
transaction is over. Its not er-ee relationship.
Held: SC looked at the problem in a different fashion.
1. As to the payment, piece rate payment does not
affirm nor deny er-ee relationship. Piece rate
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
payment proves payment. It does not prove any
relationship.
2. The SC says that there is no evidence that is
adduced that in fact control was exercised. That is
not essential to the power of control test. What is
essential is proof at least that there is a
reservation of the exercise of power of control.
The essence of the power of control test is you prove that
this putative employer has the right and could exercise
control and reserves the right. Actual proof or evidence that
he exercised control is not essential. There must have been
control because how could they accept kaings if it were not
according to their specification. SC says you must have some
specification which you communicated to them and they
followed and they when they deliver it must have been in
accordance with the specification and then you pay them.
there is the control because you specify the specifications of
the kaing.
Often cited outside that piece rate denies the existence of
er-ee relationship. No it does not. Piece rate payment does
not affirm nor negate the existence of er-ee relationship.
5. RJL Martinez Fishing vs. NLRC (1984)
We are talking here of navotas fish port before it was a fish
port. The fishing vessels that would go to the open sea and
catch fish and return, they would just wait and anchor in the
sea.
There were workers who would wait and unload the catch
from the ship. They unload it and there are refrigerated vans
waiting in the shore. Bidding was done by whispering before
unlike now it is already standardized.
Issue: Are those people who unload the catch from the
vessel employees of RJL Martinez?
RJL has more than 60 deep sea fishing boats. Not all of
them return everyday, only a given number. these people
unload the fishing vessel of RJL and then after that they also
unload other fishing boats. When they were not paid
premium pay for holidays they complained.
RJL’ argument: They are not their employees. They are
actually pakyaw workers. Our relationship with them begins
and end on the same day because they go to other vessels
to unload them. how could there be control we do not
control them. After unloading our vessel they go to other
vessels. So the control test is not met. Equivalently they are
saying that for the control test to be met it must be
continuous and unbroken.
7
Held:
The control test can be met even if there is no
chronological continuity. SC says why do you penalize
these workers if they do not have enough work for the
working day and they go to other ships to unload it. You
have the priority because once your ships arrives they
immediately unload it and after that the have nothing else to
do. Do you begrudge them because they tried to make use
of the time by unloading other ships? For the control test
to be met it is not necessary that the control is for
the entire working day; that the control must be
continuous and unbroken
From all these cases what can we conclude? We can
say that the control test is the most important test
and yet it is not the only test.
Example: The class. if I am considered putative employer
and you are the employees because when I say “in the
name of the father” the class already starts. When I say
“let’s take 5 minute break” you also take your break. When I
say resume, resume. Yes I have control but you are not my
employees because the control test is not the only test. But
it is the opposite. you are my employers because you paid
your tuition and I am complying with the contract of the
school to teach you.
So the control test is not the only test but it is the most
important test.
So much so that even if the three requisites are complied
with, if the control test is met in a pronounced manner,
there is er-ee relationship and all other factors remaining
constant. There is no other factor like you are not in the
government.
In the government there is no er-ee relationship
engagement in government is not based on contract
but on law. Even if the high ranking official controls your
time, your effort, the means, the manner there is no er-ee
relationship because what is paramount is the law to which
you can trace your position by appointment or election. The
law that created your position; that is the origin of your
position to which you can trace your right to be in the
position. Again, the control test is the most important
test but it is not the only test.
A peddler is not the same as a salesman. A peddler
already carries the commodity or goods that it sells. The
salesman still does not carry it. There is booking and there is
delivery. But if he sells mango in his bicycle he is a peddler.
The difference between a salesman and a peddler is license
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
wise. The salesman does not get any license from the
government. The peddler is licensed because every
afternoon the government collects from them and gives
them stamps. Sidewalk vendors are also considered
stationary peddlers.
6. Snow white ice cream vs Garcia 42 SCRA 295
Everyday Garcia reports to snow white ice cream. So snow
white supplies him the cart, the ice, the salt for the ice, and
the ice cream. He will sell it. One day Garcia lifted a hug
block of ice and the ice fell into his foot. He proceeded to
work and endured the pain as it was his job. A second
tragedy happened; his foot was again injured by a rusty
barbed wire. (Tetanus)
As he can’t walk the owner of snow white told him to fix the
other broken carts until such time he had high fever and was
rushed to the hospital. He eventually died.
His widow substituted him. Under the old workman’s
compensation law it was not yet employee’s compensation
but workman’s compensation, it was the duty of the
employer to obtain an insurance from a private insurer to
answer for third party liability arising from work related
sickness, injury or death. You have to be an employee
though to claim that insurance proceeds from the employer.
The widow claimed workman’s compensation.
Snow white’s argument: Snow white denied liability by
saying that he is not an employee because he is the one
who decides where to go. He is an independent peddler, he
is not an employee.
Held: He is an employee.
1. Why was he made to do repair works of the broken
carts even if he can’t walk? That means that he was
tied to the employer with certain permanency.
2. What happened if he could not say all the ice cream he
took? He could still return it to snow white ice cream;
this means that title has not yet passed to him with
respect to the ice drop. He does not own it and he can
return it. He is not therefore an independent peddler.
He is an employee. If he owns it then he is an
independent peddler; he need not return it to snow
white. That is the index of an independent
salesman; it is when you cannot return the
unsold goods. Title has passed to you and you are
therefore the owner thereof. (Most crucial)
8
Since Garcia could not do it he was an employee and
therefore snow white ice cream ahs to compensate him
the insurance proceeds for work-related death.
7. Mafinco trading vs ople (1976)
Instead of a cart you have a truck. Instead of ice cream, you
have soft drinks (pop cola) the salesman could choose
whether he would drive the truck himself or he would hire a
driver and a helper to load or unload the cola cases. He
signed a peddler’s contract with mafinco, the distributer of
pop cola.
Peddler’s contract contained a provision that he paid and
was in charge and responsible for the salaries of the driver
and the helper. That he had to procure the local license from
the mayor’s office for his peddling truck. He had to put up a
bond to secure the payment of the salary of his assistants.
He had to put up another bond to cover the value of the soft
drinks that he took from mafinco. Whatever he could not sell
he would go back to the warehouse and return it. The
following day he would get another set.
These salespeople wanted to for a union for purposes of
certification election. Mafinco trading said they are not our
employees; they are independent peddlers.
Is this case the same as snow white because the unsold
merchandise could still be returned. Before they signed the
peddler’s contract they were already employees of the old
pop cola company. It was later on that pop cola formed a
marketing corporation and they were attached to it by
contract.
Held: They are not employees. The characterization of the
relationship must be judged by what is contained in the four
corners of the peddler’s agreement. The agreement says
they are not employees. They pay the salaries of the helper
and the driver, e procures the license, he is in charge of the
maintenance of the vehicle owned by mafinco.
The decision does not say this but it is very important
that you reckon with the two bonds that the peddler
is obligated to post it.
Because he is obligated to post these two bonds, bonds
bond for the salaries, a bond to cover the salaries of
peddler’s employees and a bond to cover the amount of soft
drinks. What is a bond? What is a surety? What kind of
contract is that? It is in your obligations ad contracts. It is a
nominate contract in the civil code which is under the
jurisdiction of the regular courts. If the Supreme Court says
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
there is employer employee relationship then what happens?
If there is a controversy in the contract can he go to the
labor arbiter and submit those issues? the labor arbiter is a
forum of limited jurisdiction not of general jurisdiction. That
is the reason SC changes its rulings even if ostensibly it falls
under the same facts as snow white case.
8. Singapore Airlines vs judge chideri
Pilots under training in Singapore airlines, they spend a lot of
money. There is a theoretical part and second there is the
actual training and it involves using a flight simulator
especially if it is the latest passenger planes/ airbus. They
are putting up in Singapore a flight simulator. These pilots
that are recruited by the airlines sign an agreement.
You agree that the company would be spending this much
for your training as a pilot captain and you promise to stay
with the company for this number of years. If I was trained
for 4 months then I will stay with the company for at least
10 year.
You know that that is not enforceable because if you decide
to leave, you cannot be forced to remain in the company
because that is involuntary servitude. So how does the
company enforce it? The company provides in the contract a
provision of leave committed damages. There is a liquidated
damages depending on what year you will leave the
company, what is more is that you have to provide a surety,
someone acceptable to the company who will co-sign with
you as a surety.
What is the difference between a surety and a solidary
debtor? What is the difference between a surety and a
guarantor?
Solidary debtor is a co-signatory. Once the obligation is
due you can be made to answer for the entire thing. In
surety, the moment the obligation becomes due they
cannot yet approach you (under credit and transaction the
creditor can immediately claim from the surety regardless of
whether the principal debtor is insolvent or not). In
guarantor, the moment there is default you cannot yet be
approached because the guarantor has the benefit of
excussion. It must be proven that the principal debtor is
insolvent before you can collect from guarantor. The
guaranteed contract must be in writing.
The SC held in the Singapore airlines case that it is not an
er-ee relationship. It is a valid contract of liquidated
damages and the one that has jurisdiction is not the
labor arbiter but the regular courts. Because there
9
are this other subsidiary contracts of surety and
liquidated damages.
Put it in writing, put a subsidiary contract that is a
nominate contract under the civil code and you take
it away from the labor code.
Art. 82. Coverage. The provisions of this Title shall apply to
employees in all establishments and undertakings whether
for profit or not, but not to government employees,
managerial employees, field personnel, members of the
family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of
another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees
who regularly perform their duties away from the principal
place of business or branch office of the employer and
whose actual hours of work in the field cannot be
determined with reasonable certainty.
If you are given a problem you have to decide whether or
not it is a labor problem. You have to decide whether it is
government or private sector. If government, then civil
service. If private sector, labor tribunals. If there is a union,
voluntary arbitration. No union, labor arbiter. If it is the
interpretation or enforcement of a collective bargaining
agreement, nation conciliation xxx. You decide whether or
not it is er-ee relationship.
Even if you have decide that there is an er-ee relationship,
article 82 says there are 10 categories of workers that are
exempted from labor standards. They are exempted from
minimum wage, overtime pay, premium pay, holiday pay.
Government employees
They are not really exempted but they are excluded because
they are not employees. There is no problem if it is a
government employee of national government or local
government or any of its instrumentalities or agencies. The
problem comes when he is an employee of a GOCC with
original charter.
The 1987 constitution differs from the 1973 constitution in
that now it is provided that for him to be a government
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
employee he must be employed with a GOCC with original
charter. That means there must be a law passed by
congress creating that corporation. If it is a government
corporation or controlled by the government but without
that law, in other words that corporation was created by
complying with the corporation code. It is not created by law
but it is created in compliance with a general xxx he is not a
government employee. That is the general rule.
Until you come to these recent cases. The SC said that this
corporation has an original charter but this is a corporation
that is private. the corporation involved is the “Society for
the prevention of cruelty to animals in the Philippines” that is
a corporation founded by an act in 1903. This is one of the
first things that the Americans did here was to create this
society. It is not a republic act, it is not a commonwealth act
but it is an act. The controversy arose when the COA came
to audit the funds of the society. The COA discovered this
society through natgeo when they covered the dog meat
festival in Baguio.
SC said it might have an original charter but the charter test
only came about in 1987 and the charter test is used
prospectively. It cannot be used retrospectively. Is the
society a GOCC with original charter? Are the employees
public or private? private. it is an exception to the general
rule. Again, there are also other cases. Veterans federation
Philippines, boy scouts of the Philippines.
1. Gordon vs Liban
There is a constitutional provision which says that a senator
cannot during his tenure hold another position in the
government whether it is GOCC. Gordon was the chairman
and the Philippine National Red Cross (PNRC) is covered by
a law which created it. Is Gordon violating the constitutional
prohibition? There are two rulings there.
First ruling: SC says en band that PNRC is a sui generies
corporation. It is neither public nor private. It has itself to
decide whether it is private or public. If it is private it should
have incorporated itself under SEC. if it is public then it
should assert itself according to the law that created it.
Second Ruling: it is neither private nor public and it does
not have the obligation to make up its mind because its
essence is that “it lives in the twilight zone.”
It is private because in times of manmade calamities, war,
violence, it does not represent the government. It has
access to the belligerent forces, terrorist. If it is public then
it cannot do so.
10
It is public (government) because it deals with the very
heart of governmental function, in times of natural
calamities it is the government that should protect, defend
and comfort its people. That’s what the PNRC does. That is
government. Therefore it will remain in the twilight zone.
Bottom line is Gordon did not violate the prohibition in the
constitution.
JULY 3 2015 KJD
For purposes of labor standards, there are certain
employees, even if there is an employer-employee
relationship, that are excluded from Title I of Book III of the
Labor Code which is hours of work, rates of pay, premium
pay, overtime pay
Art. 82. Coverage. The provisions of this Title shall apply
to employees in all establishments and undertakings
whether for profit or not, but not to government employees,
managerial employees, field personnel, members of the
family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of
another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees
who regularly perform their duties away from the principal
place of business or branch office of the employer and
whose actual hours of work in the field cannot be
determined with reasonable certainty.
The enumeration of Article 82 of the LC is up to number 7.
8, 9 and 10 are by virtue of provisions in the IRR and
specific sections of special laws.
GOVERNMENT EMPLOYEES
Government employees are not exempted, they are
excluded. Government employees do not have employer-
employee relationship. If they are called employees, it is for
want of a better term.
You become a government employee either by appointment
or election. In the private sector, if you are suffered or
permitted to work, you become an employee. (memorize!
because it is found in many places in the labor code)
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Fr. Gus: It is bad English so easier to remember: "suffered
or permitted to work"
In the government sector, even if you have been preparing
the coffee of Mayor Duterte for 30 years, receiving
allowance, do you become a government employee by
acquisitive prescription? You don't. This person will not,
should not and cannot become an employee by prescription.
If it should, then God help the country, there will be a lot of
employees by mistake. Remember the dictum that the State
is not bound by the mistake of its officers.
Ex. (in bisaya) You asked your nephew-architect to build a
house and asked for a permit in the city hall. You buy the
materials, he will find the workers for this. Your neighbor
volunteered to do part of the work. However, the foreman
did not give him an envelope for salary. He claims that he
worked so he must be paid.
Issue: Does he have a right to be paid?
Answer: You have to pay him since you acquiesced or
agreed that he will work. The same is not the rule for
government employees but only in the private sector.
Art. 84. Hours worked. Hours worked shall include (a) all
time during which an employee is required to be on duty or
to be at a prescribed workplace; and (b) all time during
which an employee is suffered or permitted to work.
Under the Constitution, all employees that are employed in
the national government, divisions, instrumentalities,
agencies, including all GOCCs with original charter, are
government employees.
Case: Campo Redondo
There is now introduced in the 1987 Constitution as
distinguished from the 1973 Constitution, the charter test:
If a corporation has a charter then it is government owned
and controlled and therefore all those employees there are
government employees. The law creates the corporation
directly.
A charter is a law passed by Congress creating a
corporation. The other corporations are created by operation
of law, not created by law. Such as when a group of people
putting money together and put up constitutional by-laws in
and fulfill the requirements of the Corporation Code and
pass it to SEC, and SEC approves it, they are now a
corporation since they complied with the general enabling
act.
11
Are all employees in a government corporation with original
charter government employees?
1. Society for the Prevention of Cruelty to Animals
vs. CA
They have an original charter since an act created them.
SPCA was suddenly a recipient of grants from abroad
because they appeared in NatGeo for the Igorot and Ifugao
dog festival in barrios. COA alleged that they were created
by an act and wanted to audit them but SPCA did not want
to be audited.
The SC held that they are not a government corporation and
therefore COA cannot audit their funds. How about the
charter test? It is applicable prospectively and not
retroactively because it only came about in the 1987
Constitution.
2. Liban vs. Gordon
Luban says Gordon violated the constitutional prohibition
which prohibits any Senator or Congressman from holding
another government position other than his position since he
is the Chairman of Philippine National Red Cross. PNRC is
government because there is a law creating the PNRC.
There were 2 en banc decisions:
1st: The SC held that PNRC is neither private nor public. It is
up to them to make up their mind. If they want to be
private, they must draw up their by-laws and register with
SEC. If they want to be public, they take up the law and
commit themselves to being public.
2nd: Necessarily, the PNRC is private and public. It is public
because what it performs is governmental function to rescue
victims of natural and man-made calamities which is the
duty of the state. You cannot prevent it from doing this kind
of work. When there are rebels and belligerents, terrorists,
the PNRC is private and does not represent the state. That's
why they can go there, come in and check the victims. They
are accepted by the terrorists as neutral. In this regard, it is
private. It should not be forced to decide.
3. Boy Scouts of the Philippines (the only youth
organization run by adults)
It is created by an act by the US Congress just like SPCA.
The number one boy scout according to the law creating it is
the President of the Philippines, regardless of whether he is
a male or female.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
The SC declared that a carpenter who was dismissed in Mt.
Makiling cannot bring up his case with the labor arbiter
because he is a government employee, he can only go to
the Civil Service because his employer is the BSP, which an
GOCC with original charter.
If it is government- go to the Civil Service (only one)
If it is private - go to the Labor Arbiter, Med Arbiter, National
Conciliation and Mediation Board, Regional Tripartite Wage
Productivity Board, (the labor justice fora)
Government employees are an exclusion, they are not an
exception.
MANAGERIAL EMPLOYEES
"Managerial employees" refer to those whose primary duty
consists of the management of the establishment in which
they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial
staff.
In SC cases, they keep on repeating that the manager
exercises discretion. That is the hallmark of a manager. It
just does not follow that he makes the decision. This is
managerial employee proper.
There is a second group which is a member of the
managerial staff.
Ex. Suppose you are a cost accountant; everyday you do not
have anybody to command but just checking the cost of
goods sold in your computer. He/she makes love to the
computer the whole day. Does he exercise any discretion?
No, he does not. Yet, by definition, he is a managerial
employee because he is a member of the managerial staff.
He is not entitled to overtime, premium, holiday pay.
Supervisors do not manage a particular department but
assist in the management. They do not promote, demote,
suspend or discipline employees but they effectively
recommend (memorize!) the discipline, promotion, hiring
and firing. They are managerial employees.
Why are managerial employees exempt from hours of work
and rates of pay and other labor standard provisions?
Because they are not engaged for the time that they devote
but are engaged for their special qualification, for the results
that they produce, for the experience that they bring to a
particular undertaking.
12
This is why their pay is not monolithic; it has so many
divisions. As you go up higher in management, you have a
pay package. There is a big debate about executive pay
such as signing bonuses.
Ex. The Stanford graduate who went to Yahoo has bigger
salary than the owner of Alibaba (with sales of 250 billion
US) because it is hard to get qualifications. She cannot
complain about overtime or maternity leave of only 2 weeks.
It is not the title that makes you a manager, it is what you
do that makes you a manager.
Ex. Sanitation manager but is actually a janitor
FIELD PERSONNEL
This refers to non-agricultural employees who regularly
perform their duties away from the principal place of
business or branch office of the employer and whose actual
hours of work in the field cannot be determined with
reasonable certainty
DOMESTIC HELPER OR KASAMBAHAY
Fr. Gus: This is hogwash. They keep changing, the
international term is domestic. I hate nationalism. It is right
away undue classification. Once you build some right on the
basis of nationalism, you are discriminatory. Language has
never proven to be a (xxx). They subject students to study
Filipino but you are not tested on your Filipino when you
work but in English. That is the stupidest rule. There is no
Central Bank but only Bangko Sentral yet when we go to
international conferences, they put Central Bank which does
not exist in law but they are forced because nobody else can
understand. Stupidity is a widely shared commodity.
Although widely shared, it is found in greater concentration
in some than in others and the higher you climb the totem
pole of human organization, the greater the degree of
concentration.
JULY 10 2015 JM & CBP
Labor Standards are the statutory limits below which you
cannot stipulate in an employer-employee contract. So these
are markers, not benchmarks but minimum standards. You
have to be in employer-employee relationship in order to be
subject to these standards. But there are classes of workers
that are in employer-employee relationships which are
exempt or not included in the coverage of these standards.
We have seen the enumeration of these classes of workers
in Article 82 of The Labor Code.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
MANAGERIAL EMPLOYEES
The preliminary description of Managerial Employees is
found in Article 82 also. This is further elaborated in the
Implementing Rules, Book III, Rule 1, Section 2.
SECTION 2. Exemption. — The provisions of this Rule shall
not apply to the following persons if they qualify for
exemption under the conditions set forth herein:
xxx
(b) Managerial employees, if they meet all of the following
conditions:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a
department or sub-division thereof.
(2) They customarily and regularly direct the work of two or
more employees therein.
(3) They have the authority to hire or fire employees of
lower rank; or their suggestions and recommendations as to
hiring and firing and as to the promotion or any other
change of status of other employees, are given particular
weight.
(c) Officers or members of a managerial staff if they perform
the following duties and responsibilities
(1) The primary duty consists of the performance of work
directly related to management policies of their employer;
(2) Customarily and regularly exercise discretion and
independent judgment; and
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of the
management of the establishment in which he is employed
or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or (iii)
execute, under general supervision, special assignments and
tasks; and
(4) Who do not devote more than 20 percent of their hours
worked in a work week to activities which are not directly
and closely related to the performance of the work described
in paragraphs (1), (2) and (3) above.
xxx
13
Article 82, 2nd paragraph, defines Managerial Employees
as “those whose primary duty consists of the management
of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or
members of the managerial staff.”
TWO KINDS OF MANAGERIAL EMPLOYEES
1. Managerial employees-proper.
They clearly manage, lay down policies and direct the work
of certain people.
2. Members of the Managerial Staff
They do not direct and yet considered managerial
employees. It is usually because they deal with sensitive
managerial information that are related to employment. It is
for their special qualifications that they are engaged. In
other words, they are not engaged an employed for the time
they put in but for their special qualifications. You might be
engaged because of a special skill.
Example: A chicken sexer whose job is to sort 6,000 chicks
on a 5-hour period and uses their special ability to
distinguish the males from the females. What makes you a
first class chicken sexer? If you have less than 3 mistakes
per thousand. The best chicken sexers are the Koreans. A
chicken sexer is not a managerial employee; he is subject to
Labor Standards. But because of his special talent, he is no
longer paid on the time that he (completes his tasks?). He is
very highly paid and he can only work 5 days a week.
Is it possible you don’t manage anybody and you’re a
managerial employee?
YES, it is possible if you are a member of the managerial
staff.
Example: Financial Analyst, work with a computer and you
supply management with the sensitive data that they need
in order to make decisions. You are not covered by
overtime, premium pay and 13th month. You have a different
pay scale, a different remuneration package. Because you
are engaged for a special purpose and you have a special
qualification.
What makes you a manager?
Then and again, the Supreme Court says, it is not the title
that makes you a manager. It is the activity for which you
have been engaged to perform that makes you a manager.
You cannot be a manager in the primary sense if you do not
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
exercise independent judgment. That is the characteristic of
a manager in the primary sense, you exercise independent
judgment.
If your judgment, although independent is subject to
review, does that make you a managerial employee?
The Implementing Rules say YES. If you have effective
power to hire, fire, discipline, promote, demote, transfer;
that makes you a manager, that is the supervisory line. You
can recommend effectively.
FIELD PERSONNEL
Also in Article 82 and define there as “non-agricultural
employees who regularly perform their duties away from the
principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be
determined with reasonable certainty.”
Three Elements of Field Personnel
1. He is Non-agricultural
2. He performs his work away from the field office.
There’s a separation between him and the employer’s
premises.
3. His hours of work cannot be determined with reasonable
certainty.
The nature of his work is incapable of being determined as
to hours devoted to that work with certainty.
Is a Davao Power and Light Company repair crew,
are they field personnel?
1. They are non-agricultural.
2. They perform their work not within the Davao Light
principal office but away from it.
3. But their hours of work can be determined with
reasonable certainty. It might be difficult but it can be
determined. There can be all sorts of off-site supervision
measures. Naa na sa PLDT, Light and Power Company,
Refrigeration Maintenance work, daghan na. And they are all
subjected to off-site supervisory control. They are not field
personnel according to Article 82.
UNION OF FILIPINO EMPLOYEES VS VIVAR 205 SCRA
200 (1992)
14
What Article 82 means according to the SC in this case, the
real field personnel are the sales men or the sales personnel.
Their hours of work cannot be determined with reasonable
certainty.
Why are they (field personnel) excluded?
Because it would be unfair to the employer, if you just
consider them working even if you cannot see them. That is
why these people many times, the part of their pay are
reflected by the commission system. Their basic is nominal,
gamay ra. Or di ba tagaan lang silag transportation
allowance. Their commission reflects their industry. Tagaan
sila ug portion ana. That’s the mark of good compensation
system, when the compensation is directly related to (d nako
madunggan). The closer you can connect it, the better it is.
It is a clear message to the worker that it gives a good way
for the worker to organize his time because he is
concentrated on what to produce because that is related to
his compensation.
I just want to add this, your hours of work if you’re a sales
man may not be determined with reasonable certainty. But
even if you’re out of work, you met an accident, is that a
work-related accident?
General rule in social legislation: If the accident, death,
injury occurs at the workplace, during hours of work, it is
presumed to be work-related.
The sales man is not in work place. He has no work place.
The whole world is his work place. We say his hours of work
cannot be reasonably determined with certainty. And yet,
the SC has said in decided cases that that is work-related.
So in Labor Standards, it might not be clear. But in
employees’ compensation, it is clear. You are presumed to
be working.
MEMBERS OF THE FAMILY DEPENDENT ON
THE EMPLOYER FOR SUPPORT
ELEMENTS
1. You are a member of the family (daughter, son, father or
the mother.
2. You are dependent on your employer for support. You
work for your employer but you live with your employer.
They are excluded from Labor Standards: minimum wage,
overtime pay, premium pay, 13th month pay. Why? Because
there is already an underlining legal relationship which
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
antedates the er-ee relationship. Therefore, that is made to
prevail, otherwise it will be too confusing.
Example: A fellow who goes to his work place, a hardware
store, at 7:30 in the morning. The hardware store is owned
by his father. Is he dependent on his father for support? His
father lives on the 4th floor of the building, he lives in the 3rd
floor with his family. What time does he can work? His work
ends at 8:00 in the evening, he closes the hardware store.
You ask him, how much are you paid by your employer? He
would say, he does not have a regular salary. He cannot tell
what his salary is. Pero naa man siyay sakyanan. Kinsa man
mubayad sa gasoline ana? Muingon siya na na naa man koy
credit card. Kinsa may nagabayad anang credit card? It is
the employer, his father. So it might even turn out that this
guy who cannot tell exactly what his salary is, he might be
compensated more than the ordinary worker. Because of the
antecedent legal relationship of filiation which you saw in
Persons and Family Relations. Nauna na.
Again, members of the family, the reason why they are
exempted is the existence of a more fundamental
relationship covered by the Civil Code and the Family Code.
And it includes, husband, wife, parents and children, other
ascendants and descendants, brothers and sisters, whether
full or a half-blood.
Example: A physician who only has one employee, a nurse
receptionist. She is covered by Labor Standards. Now,
something develops, the physician marries the nurse
receptionist. She now becomes, all of a sudden, a member
of the family dependent on the employer for support. Can
the physician now say. ‘Day minyo naman ta, wa nakay
sweldo ha?’ Can the nurse receptionist take refuge from
Article 100 of the Labor Code?
Art. 100. Prohibition against elimination or diminution of
benefits. Nothing in this Book shall be construed to eliminate
or in any way diminish supplements, or other employee
benefits being enjoyed at the time of promulgation of this
Code.
This is one of the basic principles of er-ee relationship and of
remuneration. In our Labor Code and Labor Laws,
compensation can only go higher, it cannot go lower except
if you are in a collective bargaining agreement. Any new law
cannot be interpreted so as to lower your actual
compensation. Any new labor law can only keep you from
the same level or increase your compensation. It should
never diminish your benefits or wages. So pag-ingun niya,
15
minyo naman ta, wa nakay sweldo. Mahimu na? Naa nana
diri sa exceptions, Members of the Family. The law assumes
that now, her benefits will be even more because she is now
the wife of the employer. So her benefits will even increase.
Now, he will have to buy her a rose. That is the assumption
of law.
DOMESTICS AND PERSONS IN THE PERSONAL
SERVICE OF ANOTHER
Domestic is still in the statute books but there is now a new
law that has changed the name to Kasambahay. Why are
they exempted? Domestics are exempted because they have
long existed before the industrial revolution that gave birth
to Labor standards. They have the long history.
Domestics
Domestics are, by definition in the law, “those who perform
in the employer’s home, services usually necessary and
desirable for maintenance and enjoyment thereof, and
includes ministering to the personal comfort and
convenience of the members of the employer’s household”.
There must be a household, a family. If there is no family,
there is no domestic. If you’re single, technically there is no
domestic in your house, you cannot have it because there is
no household. What do you have? You have a person in the
personal service of another, that’s why these are separate
two categories. Why did I emphasize that?
APEX MINING VS NLRC 199 SCRA 278 (1991)
The SC ruled in that case, what makes you a domestic is not
the chores that you perform, it’s not your activity. You are a
domestic by virtue of who employs you.
FACTS: Apex Mining had an expatriate house where they put
in all the Japanese geologists, mining experts there. They
hire people to maintain the quarters of the Japanese
expatriate. They clean the rooms, they clean their beds,
wash the laundry, sometimes cook for them and they were
paid domestic rates. Until one of them complained. What did
the SC say?
RULING: The SC says they are industrial workers because
their employer is a mining company. They are not
domestics. So they are entitled to minimum wage. Not the
minimum wage of domestics (because the domestics have a
separate minimum wage now), but the minimum wage of
the industrial workers. So, you read that case.
Persons in the personal service of another
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Persons in the personal service also have a very long
tradition. How long? Since Middle Ages. Royalty had persons
in the personal service of another. Your Valet, your personal
assistant (mag-ilis nimu, mutabang nimu). In the Middle
East, among the Arabs, the Valet is also the personal
bodyguard. He will take a bullet for you, if there’s a grenade
there, he will throw his body on the grenade for you. That is
Valet - personal, trusted assistant. There’s a relational
intimacy there that cannot be reduced to labor statute. Many
persons in the personal service of another receive something
from the estate of their employers. Mao na, that is a whole
different tradition that is why it is excluded from labor
standards.
When A Domestic Ceases To Be One and Becomes a
Commercial Worker
Article 145. Assignment to Non-Household Work. “No
househelper shall be assigned to work in a commercial,
industrial or agricultural enterprise at a wage or salary rate
lower than that provided for agricultural or non-agricultural
workers as prescribed herein.
Scenario: A domestic is hired by a household. The house is
converted into a boarding house. The domestic is then made
to serve the boarders, do their laundry, etc.
Father’s Submission: The prohibition in Article 145 applies.
The domestic ceases to be a one because she is made to
work other than the services usually necessary and desirable
for maintenance and enjoyment of the home. Thus the
domestic is now a paid according to Article 145, at a wage
or salary rate NOT lower than that provided for agricultural
or non-agricultural workers as prescribed herein.
Another scenario: A domestic (a maid) is hired by a
household. She is hired by a business owner who owns a
boutique. One of the workers of the business owner was not
able to report for work. The domestic was made to work at
the boutique, performing the tasks of the absent worker—an
instant sales girl. The moment this happens, the domestic is
thus converted into a commercial-industrial worker with
minimum wage.
QUESTION: Suppose you have a commercial worker and
she is assigned to perform domestic tasks. Does she become
a domestic?
Scenario: A doctor hired a nurse receptionist. The doctor’s
wife called him that their housemaid eloped with their
neighbour. The doctor then sent his nurse receptionist to his
house to perform domestic tasks as a substitute to the
housemaid.
16
Does that transform the nurse’s being a commercial
worker to being a domestic?
No, it does not. The law only provides it one-way, from
domestic to commercial. It does not provide for the
opposite. Why? Because a conversion from being a
commercial worker to being a domestic will result in a
diminution of benefits and that is prohibited under the Labor
Code. There is this general prohibition against diminution of
wages and benefits.
Domestic work hours
Civil Code. Art. 1695. House helper shall not be required
to work more than ten hours a day. Every house helper
shall be allowed four days' vacation each month, with pay.
Minimum Wage and SSS Benefit under
the Kasambahay Law
SEC 24. Minimum Wage. – The minimum wage of domestic
workers shall not be less than the following:
(a) Two thousand five hundred pesos (P2,500.00) a month
for those employed in the National Capital Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for those
employed in chartered cities and first class municipalities;
and
(c) One thousand five hundred pesos (P1,500.00) a month
for those employed in other municipalities.
SEC. 30. Social and Other Benefits. – A domestic worker who
has rendered at least one (1) month of service shall be
covered by the Social Security System (SSS), the Philippine
Health Insurance Corporation (PhilHealth), and the Home
Development Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the pertinent
provisions provided by law.
Premium payments or contributions shall be shouldered by
the employer. However, if the domestic worker is receiving a
wage of Five thousand pesos (P5,000.00) and above per
month, the domestic worker shall pay the proportionate
share in the premium payments or contributions, as
provided by law.
Lower than 5,000, the premium is entirely paid for by the
employer.
Industrial, commercial and agricultural minimum wage are
always way ahead of the actual market wage. The wages set
by law are way head of the actual market wage. This is
because many who are willing to work for less than the
minimum wage.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
BUT, in the case of domestics, their minimum wage is
almost always behind the market wage. Pretty soon the
wage of domestics will lag from the market wage.
That’s the difference between domestic minimum wage and
statutory minimum wage.
Other rights of Domestics
Article 142. Contract of Domestic Service. “The original
contract of domestic service shall not last for more than two
(2) years but it may be renewed for such periods as may be
agreed upon by the parties.”
What if one is indebted to you with a money value
equivalent to his 5 years of service? You cannot oblige him
to serve against his will for 5 years just to pay for his debt.
Otherwise, that is a violation of the prohibition against
involuntary servitude.
The indebted worker can leave anytime. What happens to
the obligation? That is a money obligation that she has to
pay, but he cannot be made to pay by involuntary servitude.
It’s in the Bill of Rights. It cannot be legislated to take it out
from the system.
Scenario: You had somebody trained in a “special training”.
You spend a lot for his training, and he leaves you. What will
you do?
For example, a pilot of PAL. Pilots are trained expensively
with flight simulators. What will the employer do to cover
the loss in case the pilot leaves?
This is when you cite liquidated damages and a surety,
under the Civil Code and include it in the contract with the
pilot. There are stipulations where you agree to pay a
certain amount depending on the time/period of leaving.
There is also a surety. A person who will guarantee to pay in
case the pilot leaves. This is NOT involuntary servitude.
This is applicable in special trainings. In general trainings
provided by companies, there will be no problem because
you can easily be replaced.
What are the other rights?
If the domestic is less than 18 years old and has not finished
elementary education;
Article 146. Opportunity for Education. If the househelper
is under the age of eighteen (18) years, the employer shall
give him or her an opportunity for at least elementary
education. The cost of education shall be part of the
househelper’s compensation, unless there is a stipulation to
the contrary.
Article 147. Treatment of Househelpers. The employer
shall treat the househelper in a just and humane manner. In
17
no case shall physical violence be used upon the
househelper.
You cannot punish your househelper with his wrongdoings
by not letting him eat his lunch!
Article 148. Board, Lodging, and Medical Attendance. The
employer shall furnish the househelper, free of charge,
suitable and sanitary living quarters as well as adequate
food and medical attendance.
Article 149. Indemnity for Unjust Termination of Services.
If the period of household service is fixed, neither the
employer nor the househelper may terminate the contract
before the expiration of the term, except for a just cause. If
the househelper is unjustly dismissed, he or she shall be
paid the compensation already earned plus that for fifteen
(15) days by way of indemnity.
If the househelper leaves without justifiable reason, he or
she shall forfeit any unpaid salary due him or her not
exceeding fifteen (15) days.
Article 151. Employment Certification. “Upon the severance
of the household service relation, the employer shall give the
househelper a written statement of the nature and duration
of the service and his or her efficiency and conduct as
househelper.
This is a right that not even the most expert industrial
employees have. But this is a right that a domestic has
under the law. The right to an employment certification. If
the domestic demands it you must produce it.
And then under Article 150, they have the right to leave the
service with a five-day notice.
Article 150. Service of Termination Notice. If the duration
of the household service is not determined either in
stipulation or by the nature of the service, the employer or
the househelper may give notice to put an end to the
relationship five (5) days before the intended termination of
the service.
Read the Kasambahay Law. The Kasambahays can form
a UNION under the Implementing Rules. But in the letter of
the law itself, there is nothing that says anything about
such. TINONTO!
In the old definition the FAMILY DRIVER used to be part of
the Kasambahay. But now, they are excluded. They cannot
be domestics. The family driver is a regular commercial or
industrial worker.
PAKIAO POWERS
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
The other group of workers that is exempted from the labor
standards is the group of the pakiao workers.
Two kinds: There is the piece rate worker and the task-
based worker.
1. Piece-rate workers: based on output in uniform
units and is paid on a fixed sum per unit so that his
basic income is dependent on the industry that he
holds.
A pakiao worker does not have working hours. He is paid on
a per piece basis.
The problem is, many employers use the piece-rate system
to circumvent the minimum wage.
HOW IS THE RATE PER PIECE DETERMINED?
The piece rate is based on the productivity of the AVERAGE
WORKER, not the slowest nor the fastest. (IRR of Labor
Law)
If you are an average worker, the piece rate and your
productivity for 8 hours should be the same with the
minimum wage. If it is not the same, you are using the piece
rate to circumvent the minimum wage.
If you are on a piece-rate basis, how do you know that the
employer is using the piece rate to circumvent?
The law says that you must ask for a TIME AND MOTION
STUDY by the Regional Office.
Suppose, you are timed worker, you are paid for reporting to
work for 8 hours, can you be given a quota? You will not be
paid if you cannot finish a certain number of products.
For example in TIMEX, they are paid more than the
minimum ward, they are paid for the time of 8 hours but you
are given a quota. You are given a quota for purposes of
meeting disciplinary ends. If you will not meet the quota,
you are pulled out of the assembly line and you are
retrained. Your wage will be that again of a trainee. Is that
correct?
You can be given a quota if you are a timed-worker for
purposes of discipline BUT NOT for the purposes of
measuring compensation.
Remember: Piece-rate: NO TIME, just your finished pieces,
multiplied by the rate.
Does a piece-rate nature of work determine whether there is
an employer-employee relationship? NO.
18
In the case of DY KEH BENG vs. INTERNATIONAL LABOR
and MARINE UNION OF THE PHILIPPINES, G.R. No. L-32245
May 25, 1979, piece-rate work is not determinative of the
legal characterization of the employer-employee relationship.
2. Task-basis worker
Example: You engage with several workers to cement an
entire floor from “zero”.
All workers whther time-based, etc, they are covered by the
provisions on wages by the Labor Code.
Wages under the provision, are paid at least twice a month,
at intervals of not longer than 16 days.
ART. 103. Time of payment. - Wages shall be paid at
least once every two (2) weeks or twice a month at intervals
not exceeding sixteen (16) days. If on account of force
majeure or circumstances beyond the employer’s control,
payment of wages on or within the time herein provided
cannot be made, the employer shall pay the wages
immediately after such force majeure or circumstances have
ceased. No employer shall make payment with less
frequency than once a month.
The payment of wages of employees engaged to perform a
task which cannot be completed in two (2) weeks shall be
subject to the following conditions, in the absence of a
collective bargaining agreement or arbitration award:
(1) That payments are made at intervals not exceeding
sixteen (16) days, in proportion to the amount of work
completed;
Let us say you agreed with the floor workers that you will
pay them 3,000 pesos for the cementing of the entire floor.
After two weeks, the floor is not yet done, but only the
pouring of cement is all that is left to do. The workers then
ask for compensation.
Are you obliged to pay when you agreed on a completion
basis? YES. What is the basis of payment? It’s completion.
How far is the task from completion, 1/3, 2/3, 4/5? That is
the measure that you have to pay.
REMEMBER:
When there is no uniform units of output, it is TASK-BASIS.
Example: Drivers of Cargo Trucks to deliver goods. They are
paid on the task to deliver.
RETAIL AND SERVICE ESTABLISHMENTS
WITH NOT MORE THAN 5 EMPLOYEES
Example: Sari-sari stores
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Night-shift differentials are not applied if they employ less
than 5 employees. If you employ more than 5 employees,
you have to pay night-shift differential equivalent to 10% of
the regular pay, for the time from 10 PM to 6 AM.
ART. 86. Night shift differential. - Every employee shall
be paid a night shift differential of not less than ten percent
(10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the
morning.
SERVICE vs. RETAIL ESTABLISHMENT
“Retail Establishment” is one principally engaged in the sale
of
goods to end-users for personal or household use.
Example: Sari-sari Store
“Service Establishment” is one principally engaged in the
sale
of service to individuals for their own or household use and
is
generally recognized as such.
Example: Beauty Parlor, Massage Parlor
Problem:
You ordered an oyster soup in a restaurant. You realized
that there is a pearl at the bottom of the soup. The waiter
then said that the pearl does not belong to you. It belongs
to the restaurant.
Who has a better right to the pearl?
It depends on whether it is a service establishment. If it is a
service establishment, there is no take-out. It caters to the
nutritional satisfaction to the client. You leave everything
that is not essential to your nutritional satisfaction. Just like
the bones, the pearl cannot be eaten to satisfy you.
If the restaurant however caters also allows take-out, it
becomes a retail establishment.
JULY 24 2015 KRC & LKD
KASAMBAHAY LAW/ SPECIAL WORKERS
One of those exempted by law under Article 82.
Before article 100, the Labor Code is not renumbered. After
150 something, it has been renumbered. You will notice if
you use the same book as I do, Azucena (a lousy book) you
can see that article 82, 84 there is no parenthesis after the
article. But once we get to article 132, there’s already a
19
parenthesis. Article 130 there’s already a parenthesis. The
parenthesis is the OLD number.
So I might bring up the discussion on minimum wage
because lawyers are often labeled by the economist as
“ignoramous” (Not so sure with the word) with respect to
wages.
Can wages be legislated? When you put a minimum, and the
minimum wage is not the market wage, what happens?
Its like “Jaywalking” it is more observed in the breach
pedestrian road than it is observed. How many people follow
the pedestrian lanes? All you have to do is standby along
Recto and you can see all the students xxx late... Heres
comes a law student who says “This is not mala in se, this is
mala prohibita. I am not violating the law of God by crossing
the street because it is only wrong because the law prohibits
it. It’s not like killing your mother.” Killing your mother in
any culture is BAD. That is why there is a law because it is
Bad. Mala in se, killing the mother or the father constitutes
parricide.
But there are some culture though that they crushed the
head of the first born to feed it to their favorite pig. You see
it National Geographic somewhere in Papua New Guinea.
The favorite food of the pig is the brains of the babies. Why
is it pig getting the special treatment? Because it gives many
surviving piglets and Piglets is the currency of that particular
tribe. Their money is pigs, the more pigs you have, the
richer you are supposed to be. So they are willing to bashed
the head of their first born against the rock to give it to
these pigs so that they can produce many baby pigs, so that
they can be richer. Would you consider that Mala In Se, to
kill your own offsprings?
When you violate the minimum wage, is that morally wrong?
It is wrong because it is probihited, it is not? There’s a law.
Classical economist will say it cannot legislate. They will say
that the indication is that the Department of Labor has this
so called “Visitorial Powers with Inspection”. Article 128 and
129, the Department of Labor has the power to go in and
examine the workplace, to see if you are following the laws.
I will tell you a personal story. Ngadtong sa Una bag-o
pakong abogado, nagdamgo ka na dakpon ko ning mga
buang buang na employer na nagpapirma sa ilang mga
trabahante ug blank payroll. Very common, kanang mga
construction worker kay mga blank payroll mana sila.
Pagkapuno na diha, fill in the blanks, kung kinsa ang
naassign ibutang dinha, kanang mga thumbark,(Payts ra na)
but the sums written there like straight time pay, overtime
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
pay, they are not the actual amount given because they are
not following the minimum wage. How can you sue them
with money claims complaints, minimum wage violation?
You have to prove that they are asking you to sign blank
payrolls and that it is a product of falsification. That is
falsification.
You are required by law to keep those documents for
THREE (3) years because money claims complaints
prescribe in 3 years. The labor code so provides. But you
do not keep it only for 3 years but for FIVE (5) years.
WHY? Because the National Internal Revenue Code
requires your business transaction documents must
be kept for FIVE (5) Years. You will learn that in
taxation.
Now, you will look for somebody to get that blank payroll
kadtong gipirmahan na. How to do that? I finally found this
Boholano who is going back to Bohol is through with
Mindanao, pauli na siya gilaay na siya diri, muresign na siya
after sa payday. “Dong, ikaw may hero. Hulata na
makapirma tanan, ikaw ang katapusan mupirma, pagpirma
nimo diha, bunluta na diha tapos idagan!”. Mao na ang
ebidensya that they are paying the low minimum wage there
are using blank payrolls. Tuod man, gisakwit niya ug
minadagan siya! And now we have these proof, and let us
present this to the labor arbiter for money claims complaint.
That payroll that is blank, there is mark there JJ
construction, wala man diha. You can buy that from
Alemars, PaperTree. Naa man diha form, paliton rana nimo.
Paghuman ug filled up na ana tanan, timbrehan dayon na ug
JJ construction then they file it. You present that evidence to
the Labor Arbiter, that is the rule, Substantial evidence only.
But then they make it preponderance of evidence making all
these people who have signed there, say that’s not our
signature. They execute an affidavit, 100 of them. Niingon
ang Labor Arbiter na ayaw nalang kabalo ko unsa ng
affidavit. Too much evidence, no more, magpabaga ra na sa
records. Wala na pag abot sa 50, the Labor Arbiter will no
longer accept it.
Lets say ”We” this is my signature and I received a minimum
wage, I will not sign there, so you have this evidence of
Blank payroll but isa ra kabuok imong evidence unya against
50 people who sign that they did not sign here. Pildi ka. This
is in the actual ha. Dili ni commentario ni Azucena, sa actual
ni. Unsa man laban nimo?
INSPECTION UNDER ARTICLE 128
Art. 128. Visitorial and enforcement power.
20
1. The Secretary of Labor and Employment or his duly
authorized representatives, including labor regulation
officers, shall have access to employer’s records and
premises at any time of the day or night whenever work is
being undertaken therein, and the right to copy therefrom,
to question any employee and investigate any fact,
condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code
and of any labor law, wage order or rules and regulations
issued pursuant thereto.
2. Notwithstanding the provisions of Articles 129 and 217 of
this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the Secretary
of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance
orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings
of labor employment and enforcement officers or industrial
safety engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall issue
writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the
employer contests the findings of the labor employment
and enforcement officer and raises issues supported by
documentary proofs which were not considered in the
course of inspection. (As amended by Republic Act No.
7730, June 2, 1994).
An order issued by the duly authorized representative of
the Secretary of Labor and Employment under this Article
may be appealed to the latter. In case said order involves a
monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by
the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed
from. (As amended by Republic Act No. 7730, June 2,
1994)
3. The Secretary of Labor and Employment may likewise order
stoppage of work or suspension of operations of any unit or
department of an establishment when non-compliance with
the law or implementing rules and regulations poses grave
and imminent danger to the health and safety of workers in
the workplace. Within twenty-four hours, a hearing shall be
conducted to determine whether an order for the stoppage
of work or suspension of operations shall be lifted or not.
In case the violation is attributable to the fault of the
employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of
work or suspension of operation.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
4. It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders of
the Secretary of Labor and Employment or his duly
authorized representatives issued pursuant to the authority
granted under this Article, and no inferior court or entity
shall issue temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any case
involving the enforcement orders issued in accordance with
this Article.
5. Any government employee found guilty of violation of, or
abuse of authority, under this Article shall, after appropriate
administrative investigation, be subject to summary
dismissal from the service.
6. The Secretary of Labor and Employment may, by
appropriate regulations, require employers to keep and
maintain such employment records as may be necessary in
aid of his visitorial and enforcement powers under this
Code.
You ask the Department of Labor to inspect. They do not
need a warrant because they have the power to enter the
workplace at anytime of the day or night. Then they will
look, “where’s your payroll?” “Sus! Absent among payroll
master!” Dili mahimo. It means you can no longer present
your payroll as evidence. If you cannot produce it in the
inspection, you cannot produce it anymore. Then they will
interview.
“Ikaw dai, pila man dawat nimo?” Instructionan naman na
sila daan. Ingna na “minimum”.
“Minimum Sir”.
“Minimum daw. Pila man ang minimum?”
“Basta Minimum”
“Pila man ang minimum?”
Ibutang dayon na sa inspector. Tutored witness replies that
she receives minimum wage but she’s ignorant as to the
amount.
“Pila man jud dai imong ginadawat?”
“Sa pagkatinuod sir, 200 libre kaon.”
“300 na ang minimum. 200 ra. Kapila man ka mukaon diri?”
“Pagsulod namo 6 sa buntag, humana nami namahaw.
Paniudto, taz pag alas singko pag uli didto nasa balay
mukaon,.”
“Kas-a, 100 pesos imo kaon?”
“Di man sir.”
“Bugas sagulan ug mais. Depending on the ratio 40/60, gahi
na kayo na. maayo unta 70/30. Gawas pa ana taud2x imo
tiyan na naguok na kay gahi mana. Mao ng gikaon ni
Pacquiao mao gahi kaayog tiyan.”
21
The Regional director of Labor adopts the findings in toto.
Issues compliance order. JJ construction are hereby directed
to pay the deficiency minimum wages. Dili mana siya
makasulti na sayop na inyong mga gipanulti, di ara amo mga
payroll oh, amo na ipakita. NO MORE! It’s no longer
acceptable. You should have produced it because you are
required by law to have those records. You should have
produced it. “Nagbakasyon pa amo bookkeeper”, that is
NOT an excuse. Kana inyong work place, muundang ba diay
na ug trabaho kay nagbakasyon inyong presidente? Dili man
muundang inyong trabaho. Nganong muundang man mog
pakita sa inyong payroll ug wala diha inyong pay master,
pagkamagagamahom ba diay anang pay master kay
muundang man ang payroll.
If you don’t comply with the orders? What happen? Kana
man ang kuyaw because this Regional Director CAN ISSUE
WRITS OF EXECUTION. What is a writ of execution? Once a
judgment in a regular court becomes final and executory,
then the judge issues the writ of execution. “Sheriff you’re
hereby ordered to <seek>(not clear) all properties belonging
to this judgment to satisfy the final and executory decision”.
Kung sheriff ka, nakadawat ka, tan-aw ka sa nakadaug na
party, mangayo naka ug pangdocumentation bah, mangita
ka. Asa man imo pangitaon? Didto ka sa register of deeds,
naa ba siya yuta, sakupon nana nimo. Adto kag banko, naa
bay bank account diri? Mao nana. Attached! Ikaw, daku
kaayo ka na construction company, 10 ra ang nicomplain.
Pag execute nimo, ang imo bank account kay executed, and
180 worker dili masweldohan kay ang imong bank account
dili naka kalihok UNTIL you comply with the decision that
has become final and executory. Dali ra kaayo basta
Inspection. That is the good news.
You want to hear the bad news? The secretary of Labor
has suspended all inspections. From now on, NO more
inspection. Suspended Inspection. Why? Because every
xxx they can hurry out there, Carenderia ni Luz, Collasas
BBQ, kini tanan they are not paying the minimum wage.
Kana sila tanan. Ako, nakasuway nakog pangiha (file case)
ana. Ang kinagwapohan na ikiha, kanang multi-national
kay dili mana makadagan. Ikiha na nimo ang DOLE, COCA-
COLA dili mana sila makadagan. Pero kanang Mina’s
Carenderia, ikiha na nimo sila tanan, una pa lang, dili ka
kabalo kinsa ang tag-iya. Ibutang tanan, ikiha tanan. Kinsa
imong gidudahan, kinsay wala nimo nasiguro, ibutang diha.
Pero pangutan-on gani ka sa Bar, kinsa man imo ikiha? Who
the Lawful employer is. Pero sa practice, ikiha tanan when in
doubt. Ikiha tanan.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Afterwards, daug naka sa kaso, final and executory na.
Lipay kaayo ka. Kuyog ka sa sheriff. Pag abot nimo sa
carenderia, asa naman ang refrigerator? Wala na diha,
gisakwat na nila. Hain na ang gasul? Wala na diha. Wala kay
maexecute. Pero the Multi-National, dili na sila makadagan.
Mao na sila ang gwapo ikiha. Ako, nagpasalamat ko sa Ginoo
na naa na sila. Ang kamaldito nila, gamay ra kaayo compare
sa Carenderia ni Neneng ug daghan pa sila.
I would say, if you count all employers, not even 50%
complied with the industrial, commercial and agricultural
minimum wage. That is why the Department of Labor has
stopped inspection. The way they execute article 128 is
VOLUNTARY INSPECTIONS FOR COMPLIANCE. They
are urging employers to file a request for inspection and
then they will send an inspector over there and examine
your records, your workers and then after voluntary
submission for compliance, you will be issued a DIPLOMA.
You are Labor Standard’s minimum wage compliant. For
THREE (3) years you will not be inspected. For three
years it is conclusive that you have complied with the
minimum wage. The next time you will be inspected
voluntarily again is 3 years from the time of its date of
voluntary compliance.
Ingon ang DOLE, there are so many Labor Standards that
you have to comply with.
1.) As to the Minimum wage.
2.) As to health and safety (Occupational Health and
safety)
Painspection ka as to health and Safety afterward you get a
diploma and you put it in your wall. It is good for 3 years.
If you have a carenderia, you will not ask for an inspection
and pay for inspection fee of 300 pesos. Ngano man?
Because it IS NOT A HAZZARDOUS WORKPLACE. Unsa man
mamatay baka ana kay mapaso ka? It’s not a hazardous
workplace.
If it is a hazardous workplace. Let us say underground
mining, high temperature, boiler. Believe it or not, a dry
cleaning is a hazardous workplace certified by the
Department of Labor. Why? Because there it has a boiler, a
steam. Suwayi paaso anang steam, di ba kag-ang na imo
panit. Masecond degree burns ka ana muabot sa imong
tissue. That’s why it is a dangerous workplace. The one who
inspects a hazardous workplace is not a law student or a law
graduate of the Department of Labor. It is an ENGINEER.
Believe it or not there is a section in the university that is
pacified as hazardous workplace. Sige mo agi2x ana pero
22
wala mo kabalo na hazardous kaayo na. Kana sa engineering
diha, naa silay guba na boiler. Wala gud na nagtrabaho pero
every year that is inspected by the DOLE because that is
considered hazardous.
3.) Whether your workplace has instilled in its
culture the values international labor
organization protocols of gender equality.
Hain mana sa labor code? Mabuang nalang kag pangita ana
wala na sa Labor code. Ngano apil mana sa inspection. Naa
sa constitution. What does it say? International Treaties,
protocols form part of the local law if the Philippines is a
signatory. By virtue of treaties.
4.) Compliance with Non Discrimination by virtue of
race, color, nationality and sexual orientation
(LGBT).
Apil napud na sad sa mga protocol ron. Whether you are
compliant or not.
5.) Whether the place is free from human trafficking.
If there are minors that are working there, then you are
place that is trafficking with minors. Again protocols for
international. So you all the certificates that are now
available. All you have to do if you are and employer is to go
to the Department of Labor, you file a form requesting for
an inspection. They will come, take a look. If you pass, you
will get a certificate.
What if they suddenly discover na naay batang gamay didto
na galimpyo sa sapatos sa executive? Wala ka nipasar sa
trafficking. If you are discovered in this voluntary inspection,
wala ka mucomply, you are given a GRACE PERIOD.
Pagkanindot no, you are given 1 month, 2 months
depending to comply, to correct.
Hapit nata mahuman sa article 128. Muambak ta. What is
the point? The minimum wage of commercial, industrial and
agricultural workers is more observed in the breach.
Because it is TOO HIGH. The market wage is way too low.
The statutory minimum wage is too high. Muingon ka, mao
kana ang maayo. Aron musaka ang market wage, unahan na
daan ug taas na minimum wage. Wala raba jud na nahitabo
na ingnana. Dili raba jud na mahitabo.
Tan-awa sa China, in the 1950s, the rich chinese in the
Philippines used to get Chinese maids from Hongkong. Wala
pa mo kaabot anang mga karaang mga instik diri na
gagmay kaayo ug mga tiil. The custom in China is putson na
imong tiil pasapatuson ka ug puthaw. Daghan ka servant
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
mao ng makapagamay ka ug tiil. Tinunto. Asa man gikan
ilang maid? Sa Hongkong. Nangamatay naman mga tao sa
hongkong. Karon kinsa man nagpamaid didto?
Kita nasugod ta ug minimum wage diri kay 1954. Sila walay
minimum wage. Ngano mas taas ang sweldo sa ilang maid
didto kaysa mga teacher diri? When it comes to
kasambahay, the opposite is what is obtaining. The
minimum wage is way too low, the market wage is higher
than the minimum. The National Capital Region, the
minimum wage for housemaids according to the latest
release is Php 2500. Bunguton nalang ka didto sa Manila
kung makakita kag maid na magpasweldo ug 2500. Walay
magpasweldo, taas na kaayo. Maybe Php 3000,or Php 3500
makakuha kag maid.
Why is it like that when it comes to kasambahay? Why is the
market wage higher than the minimum wage? When in the
industrial and commercial set up is the opposite? What is
obtaining? You know why? Kanang mga union leaders naa
mana sila mga maid,pag ingon nila increasan
xxx…Nakadungog ba mo sa Gabriela na “ Mga maid
increasan ang sweldo!” nakadungog ba
mo sa Gabriela na nag ingon ana? Wala gyud baya. Naa
man silay maid. Tinuod pa na sila na nagdugo ang ilang
kasingkasing sa mga kabos , tinuod ban a sila? Kana ilang
unahon! Gakson na nila, agakon na nila ila na…
Kita mog union na nag organize ug maid? Kita ba mog union
na muingon ug “magkahiusa ta!ang maid na nagbarog xxx
bugkusa ang mga tukog makigkumbate”? WALA! Ngano
wala man? Wala man check off sa union dues. Ang union dili
mangolekta ug dues sa ilang miyembros, magolekta sila,
sagpaon sila sa ilang mga miyembro. Unsaon man nila
pangkolekta? Tangtangan na na ilang sweldo sa union dues.
Lisod man kaayo pag check sa union dues sa maid kadaghan
nila. Dili magsilbi ana.
The difference between the market wage and the statutory
wage is not something to redesign. As much as possible the
law should strike the market wage. But the economist say it
does if there is no need for the law. The next we xxx terror
taxes because they increase the effective. If you in income
tax, with holding tax, SSS, Pag-ibig, PhilHealth, those are all
payroll taxes. They increase wage. That should be where the
debate is, not arbitrary increase. Effective minimum wage in
China now is higher than our minimum wage that is in the
span of around 35-40 years. Wala na silay minimum wage.
They are the higher industrial, commercial wage than is
obtaining in the Philippines who had minimum wage since
23
1954. Alright, that is Kasambahay. That is the story of the
kasambahay.
WORKERS IN THE PERSONAL SERVICE OF
ANOTHER
What is the difference between kasambahay and
persons in the personal service of another?
Persons in the personal of another can serve even if those
who have no household. Why? Because the definition of
kasambahay is that it works for the personal comfort and
convenience of the employer and his household. So if you
have no household, you cannot be a kasambahay. Are you
saying that you are force to man another household just to
have a kasambahay? Yes! But if you want an equivalent of
kasambahay, you must hire persons in the personal service
of another. They are also exempt, the law says so.
Domestic helpers, wala na na ron. The terminology domestic
helper is now kasambahay then persons in the personal
service of another. They are also exempted because they
are antedate the labor code, they antedate the industrial
revolution. Kanang mga valet, chauffer, if you are a chauffer
unsa mga pasabot ana? Karon muingon tag Driver. Sa una
dili, karwahe mana sa una. Dili ka mamasahero. Imong
pasahero kay ang imo rang amo. Valet, unsa mana? You
are the personal assistant of your master. You assist him in
putting on his clothings. Kasamok ana. But if you are true
royalty, you cannot move without your valet. Butler, that is a
person in the personal service of another. Andam sa imong
pagkaon, andam sa imong kape, pila kagrano ang imong
kape, pila ra katulo sa cream na ibutang sa imong kape. Siya
man una mutilaw, kay kung hiloan ka, siya man una
mamatay , dili naka mukaon sa imong pagkaon. No
minimum wage. No holiday pay. No overtime pay. They are
exempted. They are not covered.
Is there employer-employee relationship? Yes there is. But
they are not included to those who have minimum wage.
What is the reason that they are not included?
Pagkamakalulooy naman nila pero ngano dili pa man apilon
sa minimum wage. Because under their ancient protocols
they have a different and even better arrangement than
others. Those in personal service of another might be in a
better arrangement. Ig kamatay sa ilang master, binlan pa
na sila ug inheritance, legacy ug unsa pa na.
Pagpakasal ni Prince William, naminyo mana siya kay Kate.
Pagkasal nila, nag ampo tawon si President Gloria Macapal
Arroyo na hatagan siay ug invitation. Wala man siya hatagi.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Kinsa man ang gihatagan ug invitation sa heads of state? Si
Obama. Ngano nakadawat man ang lagom nana? The first
line to receive are those of the British Commonwealth. Ilang
mga colonized place but they consider the US as partly part
of the Commonwealth. So dili lng to si Obama ang lagom na
tao. India apil pud. Si GMA nagpaabot tawon siya, wala man
siya.
Pero diay taga Bacolod nakakuha ug invitation. Who was the
nanny of Prince William, ilongga sa Bacolod. Second row
part of the family. First row, naa mga parents, mga igsuon.
Ikaduha row tua siya didto, person in the personal service of
another. What is the moral of the story? To get a wedding
invitation of a royalty, the british aisle you gotta get to wipe
the butt of prince William or some dignitaries there? Dili na
nimo mapalit. Nanny ka gud. That is the protocol and it
cannot be incorporated in the Labor code.
WORKERS WHO ARE PAID BY RESULTS
Pakyaw workers. I’m not inventing that word. That is the
labor code terminology. Pakyao workers, you can use that in
answering the bar examination. You just the use spelling of
the Labor Code.
2 kinds of Pakyaw workers:
1.) Those that are paid in the piece-rate basis.
(PIECE-RATE)
2.) Those that are paid on the basis of results. (TASK-
BASIS)
What is the differentiation between the task basis
pakyaw worker and a Piece rate?
Necessary to piece rate basis is the output of the worker is
uniform units and the payment is a fixed price on a per unit
basis, that’s why its called piece rate.
Task basis there is no unit, there is an accomplish task and
you are paid on the basis of completion.
In the wages provision it says that workers must be paid
twice a month at intervals not lasting longer than 60 days,
this wages provision, covers all workers in a piece rate or
task basis. Now if you are a task basis worker and you are
paid upon completion of the task.
But 2 weeks have gone by and you have not completed the
task, and the workers are already asking for payment, are
they entitled to the pay? The answer is YES!
24
How much are they entitled? Are they going to pay the full
price even if the task has not been finished?
You will pay them on the basis of completion. 2/3 finished,
they get 2/3 of the price. ½ finished, they get ½. That is
the meaning of basis of provision.
You have to xxx that in our practice. Papakyaw gani ka,
muagwanta ka sa trabaho sa pakyaw kay lamulamuon ra na
ang trabaho. Gawas pa ana downan na nimog daku, usahay
dili na sila mubalik.
It seems that the task basis completion measure does not
square with our culture. Hapit na mahuman, bayran nimog
¾, gamay nalang kaayo ilang buhatunon, pagkaLunes wala
naman sila nangbalik, gamay nalang man nabilin. That is
why you have to remove it in the labor code. The idea is to
make them supply something more than just labor. Because
once they supply more than just labor like some raw
material it becomes independent contracting, it is no longer
just task basis work. Kanang mga karpintero or mason bah,
imong ingnon na nganha ko magpalit sa imo ug graba ha,
kamo na supply sa graba, that is the material. What is the
contribute, not just the labor but also the material, it is
taken out of the labor code. Then you can institute
something like retention amount.
What is RETENTION AMOUNT?
In construction practice, 10% of the agreed upon price can
be retain even after the completion of the project. What is
reason? For defects that may arise after there has been
completion. Imperfections of the work that has to remedied,
after there has been a turn over, you will claim the retention
amount. You wait for 1 week, ok na, ihatag and retention
amount. Remember, that is NOT labor code. That is already
independent contracting. Mao na ang buhaton. I’m
telling you this because your commentator will not tell you
that. Azucena will not tell you that.
Fishermen crew, those in the fishing vessel that go deep
sea, they are not entitled to extra rate for overtime. They
are entitled to payment of overtime beyond 8 hours but not
straight time pay.
Health personnel as to the Work Week
The ordinary worker, industrial, commercial and agricultural
worker, their work week is 6 days, the law says 6 calendar
days to which you are entitled to 24 hours of rest day. But if
you are a health personnel and you are working in the city
with a population of atleast 1 million, or the city less than 1
million but the health institution you are working is atleast
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
100 bed capacity, then your work week is only 5 days. You
are not be made to work a 6 day. If you do work on the 6th
day, you will work for a premium and it is 30% more than
your straight time pay.
Health personnel, basta 1 Million ang population, or the
hospital or the health institution is licensed for atleast 100
bed capacity, then you can work for 5 days a week and then
you are already entitle to rest day. If you are made to work,
30% additional compensation to you straight time pay.
Art. 83. Normal hours of work. The normal hours of
work of any employee shall not exceed eight (8) hours a
day.
Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in hospitals
and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for
five (5) days a week, exclusive of time for meals, except
where the exigencies of the service require that such
personnel work for six (6) days or forty-eight (48) hours, in
which case, they shall be entitled to an additional
compensation of at least thirty percent (30%) of their
regular wage for work on the sixth day. For purposes of this
Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or
clinic personnel.
Let’s go to the actual rights of * starting from 83, actual
labor standards rights. It says normal hours of work must
not exceed 8 hours. Normal hours of work shall not exceed 8
hours. Why is it formulated that way? The normal hours of
work shall not exceed 8 hours for each working day. What is
the number of hours worked that merits you a full day’s
pay? The answer is what the law says: does not exceed 8
hours.
Can it be lower than 8 hours, yes! And it can be lower than
8 hours by company practice, not necessarily by company
rule. The company might say 8 hours of working time: 8 in
the morning to 12 noon, 1 hour meal period, you come back
at 1, and then you end at 5, so 4 hours in the morning, 4
hours in the afternoon. That’s what the policy is.
But then gradually, the company allows people to come back
to work at 2! Kay nganu man? Kay ang ang mga boss tua
man nag power lunch man. Dugay man kayo sila mamalik,
dugay sad ang mga alalay. Dugay jud sila mamalik. That last
for a year, or 2 years, what has happened? De facto, there is
25
now the decrease of the 8 hours, it is now 7 hours for the
full day’s pay. Unya maka ingon ba ang employer ana: “from
now you come back to work so you can work 8 hours”. Wa
na, no you cannot do that. You have amended the policy by
actual practice. That is why the law says shall not exceed 8
hours because you can actually lower that.
Now, the normal hours of work shall not exceed 8 hours a
day. What does day mean? Does it mean calendar day? It
means working day. Is working day identical to working day?
No! What is the difference? Ang day sa working day sa
Labor Code og ang calendar day, what is the difference?
According to the implementing rules Rule 1 section 1 etc.,
the law says the working day is a series of continuous 24
hours beginning each day at the same time at the first hour
of work. Beginning each day the first hour of work. The
calendar day begins 12:99 seconds, 1, tuyok ka diha
kaduha, that’s 24 hours. That is what calendar day is.
Working day begins on the first hour of work, 24 hours, and
that is 1 calendar day. Example, an ordinary office worker
has 8 hours work, 8 am na musulod. 1 2 3 4 = 4 hours, 1 2
3 4 = 4 hours, 8 hours! The law says you can only be made
to work 8 hours for a full day’s pay on one working day.
How is the 8 hours reckoned? It must be during the working
day. So 8 am, tuyok ka kausa, tuyok na sad kag balik, pag
abot nimo diri og 24 hours na.
Now, let’s change it. Supposed it’s a 3 shift basis, walay
pagkaputol na trabaho, 3 shifts. Kung 3 shifts ka gani
usually in industrial set up, you begin at 7 in the morning.
Human ka alas tres. Unya 3, human na sad ka ana 11, that’s
the second shift. Third shift is 11 to 7. Day shift, first shift.
Night shift, kanang 3 to 11 sa industrial. And then 11 to 7,
graveyard shift. Mao nay terminology. Sa health, di mana
sila muingon og graveyard. Ilaha day shift, afternoon shift,
unya ang katapusan, night shift. Di na sila muingon
graveyard. Mga nars diri, diba? Nightshift mana noh? Di man
mo muingon graveyard. Morning shift, afternoon shift, night
shift. Now, normally, kung 3 shifts, wa nay meal period. No
meal period.
When you show up first shift, kinanglan busog na ka ana.
Because there is no right to meals. If it is 8 to 12, 1 to 5,
single shift rana, kay office work, naa kay meal period. That
is a right. You can demand that you be given an hour to
consume your meals. That is labor standards right. But if it is
3 shift, there are no meal periods. Pag tungha nimo alas
syete sa buntag namahaw kana. Human ka alas tres. Naa ka
tingali break because Article 84 gives you rest periods, in
ordinary parlance it’s called coffee break. How long is that?
According to the implementing rules 5 min to 2o minutes.
That is the statutory length of rest period.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Now, to even up shifts, they normally have change of
assignments. Normally every month there is change of shift.
So, kung first shift ka 7 to 3, at the end of the month,
change shift ka. Diretso ka sa graveyard shift. So on that
day of your last day of the month of that shift 7 to 3, pag ka
ala onse ana, mubalik nasad ka. Pahulay ka gikan sa alas
tres adto sa ala onse. Pero pag alas onse report kana kay
last shift naman na, change of assignment. Now, for that
last day, you have already worked 8 hours, and the rule says
whole day’s pay. Pag balik nimo alas onse, that is still the
same working day because working day is 24 consecutive
hours beginning each day at the same time at the first hour
of work. So, that’s an additional 8 hours *. Your rate for that
* shift of the same day is * overtime. If you base on a
regular working day, that means you must pay 25% higher.
Plus night shift differential. Night shift differential is at least
10 percent more of your pay for working between ten
o’clock in the evening and six o’clock in the morning. So,
bayran ka ana, but the second day you report for the
graveyard shift, anha na magsugod na sad ang imung pag *
pay. Di na na overtime. And then ang working day na bag-o
is 11 for 24 hours then that is your basis for overtime *. *.
Art. 88. Undertime not offset by overtime. Undertime
work on any particular day shall not be offset by overtime
work on any other day. Permission given to the employee to
go on leave on some other day of the week shall not exempt
the employer from paying the additional compensation
required in this Chapter.
And there is a prohibition under article 88 against offsetting
undertime with overtime. What is an example of that? Let us
say you are an office worker. Your hours of work is 8 to 12,
and 1 to 5. One day, let us day it is a Tuesday, you were not
able to report at 8. Nganu man? Kay nabasahan nimo ang
sulat: “Dear Mrs. Cruz, we would like to inform you that your
son has punctured the buttocks of his classmate with his
sharpened pencil. Please come and settle this matter
tomorrow at 9 o’clock. Signed, respectfully yours Ms. Santos
– Principal”. So, dali dali kag adto, dala nimo imung anak,
kapila na nimo lusia. Storya mingaw. Alas diyes naka abot sa
imung opisina. Punch in ka sa bundy clock, 2 hours late. Wa
pa ka kainit sa imong lingkuranan, tindog na sad ka kay
meal period naman. Pag abot sa 5, “overtiman ni nato kay
ugma mag meeting ang board! Walay pauli! Kitang tanan
overtime!” Alas syete, human pauli ka. Pag tan-aw nimo sa
imung sweldo wa man kay overtime. Are you entitled to
overtime? No, you are not entitled because you just worked
8 hours. Alkanse ka duha ka oras, dungagan nimog duha ka
oras, de, otso oras, so you are not entitled to overtime.
26
Diba, because the basis for the determination if it is over the
8 hour period is the working day.
Kuntahay way overtime dinhi ang imong mga kauban, alas
singko sila papaulion. Sa dihang imung pag pauli kita nimo
ang supervisor, * “sir ayaw lang butangi, * bayran lang na
nako, ugma overtime kog duha ka oras aron sirado, ang
akong kulang na duha ka oras masuhipan overtime duha ka
oras”. All right? Not all right, that is prohibited by article 88,
prohibition against offsetting undertime with overtime. Why
is it prohibited? It is prohibited because your rate here, the 2
hours that you are undertime is straight time pay. You are
paid with an overtime in excess of 8 hours and this is with a
premium of 25% of working day. Alkanse ka. So that is
prohibited by law.
But why am I emphasizing this? Because there is this
program of Department of Labor that they call Truncated
Workweek. All of the workers have agreed so every day they
will render 2 hours overtime. In so doing they will have 50
hours of work already in a week, pagka Friday ana nila
human na sila, di na sila mubalik pagka Sabado. That is
illegal unless you amend the Labor Code. Just like the U.S.,
the basis for overtime is not working day but working week,
and you remove from the statute books the prohibition
against offsetting undertime with overtime.
Kung nag trabaho ka 8 to 7, 1 hour meal period, pila na ka
ka hours imong trabaho, 10 hours na. You work for 5 days,
50 hours. 50 hours, you don’t come back on Saturday,
Sunday is your rest day, save ka pamlite, basta musugot
lang ang tao ana, daghan mag savings ana. Usa ka sininaan
nimo sa usa ka adlaw, saved. Pamlite, saved. Baon nimo for
one day, saved. That is illegal because they have not
amended. That is the law.
Labor standards cannot be waived in the forward direction.
You cannot waive it. It is contrary to law to waive it, and yet
there is that system endorsed and propagated by the
Department of Labor. Karon, if you are asked in the bar
examination about a truncated work week, you should be
able to give the reason why it is illegal, because of the 8-
hour labor law. The 8 hour maximum period is based on the
working day, not the week. So every day you are doomed
overtime. Are you not paid overtime pay? You offset
undertime with overtime. That is the *.
Art. 84. Hours worked. Hours worked shall include (a) all
time during which an employee is required to be on duty or
to be at a prescribed workplace; and (b) all time during
which an employee is suffered or permitted to work.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Rest periods of short duration during working hours shall be
counted as hours worked.
Let us go to what is the determination of compensable
working hours. What is compensable working hours? 2 rules.
1st rule is used if you are inactive. What does it say? Article
84: Hours worked shall include (a) all time during which an
employee is required to be on duty or to be at a prescribed
workplace. Second rule: (b) all time during which an
employee is suffered or permitted to work. 2nd rule is the
rule that is used when the employee is actually working. 1st
rule is used when the worker is not productive. Example,
you are a computer games technician, naa sa mall, nay
gaming room didto para sa mga bata. Unsa man imong
trabaho? Pangayo ana. Imo nang ayuhon. What is your
working hours? 8 to 5, 1 hour meal period. Remember ha
technician ka, di man ka mangayo kung dili guba unless na
lang gub-on nimo. So, what are you doing the whole time?
Bag-o pa man, brand new, sige kag dula. Are you entitled to
pay? Is that compensable? Wa man kay gibuhat. Naa ba kay
gi ayo? Wa. Tabang kag pang guba. Why are you entitled?
You forgot the rule: all the time that you are required to be
at the prescribed place. Di man ka kahawa. Are you
productive? No, you are not, but you are entitled, because
you must be there. That rule is one you use if the worker is
not actually productive and it is the question of whether he
should be compensated or not.
Now, when you are actually working, let us say there is this
rule in the company: no overtime work unless if it is with
prior approval from the manager. Mao nay balaud. Unsa
mana? Agri business. Unsa may trabaho nimo? Tractor
operator. Tua ka sa field. Bagting na, warning. Kinse
minutos na, warning nana. Actually agriculture is between 6
in the morning to 3 in the afternoon. Why? Kay sa hapon,
ulan man na. Pag mag ulan na gani na, pasilong na, wala
nay manglihok ana. So, quarter to 3 pa, bagting na na aron
magpauli na mo sa motorpool. Pag igo nimo mupauli ka naa
na may na hugting diha, guba. Tawag dayun supervisor.
“Kinanglan ayuhon na nato na, palihukon nato kay kasab-an
ko, ibalik na sa motorpool, dili na pagab-ihan dinha.
Palihukon na nato”. Lapas naka alas tres. Naa kay memo: no
overtime unless there is prior approval.
Gi ayo nimo, start na sad, instructionan nimo imung helper
“start na sad!” “unsaun man ni pag start sir?” Ah tudluan
sad nimo pag start, helper man sya. Wa gihapon muandar.
Isa na mo ka oras, wa gihapon ma ayo. Di na gyud ma ayo.
Ingun “ipaguyod na lang ni nato!” Unsaun na man pag pa
guyod ana na wa naman ang driver sa laing tractor. Dagan
na pud ka didto sa motorpool kuha nimo, higot kag kable,
27
hantod alas singko na mo ka human. Tan-aw nimo sa imung
pay slip, wa man kay overtime. Nganung wa man kay
overtime? Because it says overtime is only with authorization
from the manager. Correct? Why is it wrong? It is wrong
because the law says: all the time during which an employee
is suffered or permitted to work. The order of the supervisor
is considered as an amending act *, because he is actually
working, and the work redounds to the benefit of the
employer. This is the thing that is used.
Another example, panday. Alas tres human na sila. Ang
panday, kuha niya iyang sapilya (wood shave), iyang
gitagtag, kwish! Kwish! Baid niya. Shiiiiiikkk! Tang tang tang
tang! Tsik tsik tsik tsik! Human na syag trabaho ha. Gabas
na sad: iiik! Iiik! Iiik! Iiik! Is he entitled to overtime? Is he
suffered or permitted to work? Wa mana sya nag trabaho.
Nag tuo sya nag trabaho siya. Ang iyang gi trabaho iya
mang tools. Lahi ang istorya kung cement mixer pa na. Ang
tag iya sa cement mixer ang employer. “Pwede pa na, usa
ka miksla!” Dali dali sila maski alas dos imedya na, alas tres
mahuman na silag trabaho, dali dali sila. Duha ka graba, tulo
ka sand, duha ka sakong semento. Trrroooonnnggg! Alas
tres na, human na unta. Naa pa may sobra, isemento.
Human, hugasan na nimo kay mukaging na, kay unsa may
gamitun nimo ugma? Buhos na sad ka. “Ayoha! Ayoha!”
Human, alas singko na. Is he entitled to overtime? Yes!
Suffered or permitted to work. That is the employer’s
equipment.
AUGUST 8 2015 PR
Art. 84. Hours worked. Hours worked shall include (a) all
time during which an employee is required to be on duty or
to be at a prescribed workplace; and (b) all time during
which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be
counted as hours worked.
1.) All the time that an employee is required to be in a
workplace;
2.) And all the time that the employee has suffered or
permitted to work.
And the which states ‘rest periods of short duration during
working hours shall be counted as hours worked an example
of that second paragraph os rest periods are coffee breaks.
Nota Bene:
Coffee Breaks - You are allowed to have coffee break but
you are not allowed to go out the prescribe workplace.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
There is a coffee corner or drinking fountain there, you can
have the break.
Rest periods - It should not exceed 20 minutes according
to the implementing rules. This happens during working
hours; and you are not productive because you leave your
actual work station but you are made to stay there; that is
why, that is compensable.
When we say hours worked, it is compensable. The issue
here compensability. Article 84 are rest periods.
Art. 85. Meal periods. Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of
every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.
Now, meal periods are not compensable but required. You
must be given 1 hour to take your meals Can an employer
do away with a meal period? And the answer is YES
provided the work is not manual in nature or whether
between two shifts the employee has given at least 20
minutes to consume his meals. If you are a construction
company, you cannot say we are in a hurry no more meal
periods. No, because the work is manual in nature.
I don’t know if you have noticed. Construction workers who
live in the province compared those who lie in Manila. Manila
is standard not here. What do I mean? Here they start early.
Normally they start at 7am if they start at 7am they will just
say “namainitna mi.” They have that corn coffee and they
take bahaw. Pagabot 10am dhanaxlamamahaw. Rest period
ilang meal period. 12nn lunch break. 2pm rest break.
3:30pm humanatrabaho, lung-ag. Pagabot 6pm panihapon.
Those are the standard eating habits of construction
workers. Dihapudxlamatulog. They go home to Samal but
they cannot go home every day because it is expensive.
Especially kung “ORNAL” which means “unskilled workers”.
If you are unskilled many companies will not pay you a
minimum wage because many want to work for even less.
Art. 86. Night shift differential. Every employee shall be
paid a night shift differential of not less than ten percent
(10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the
morning
It is premium pay. Now distinguish, overtime pay means
additional compensation for working in excess or for working
more than 8 hrs. PREMIUM PAY means additional
compensation paid for work done on days or times for work
28
which should not be done. For example you have no work
then you work.
The difference between overtime pay and premium
pay
Although BOTH are additional compensation, night shift
differential is that if you are made to work at 10pm to 6am.
And the premium pay for working at night is at not less than
10%, so it can be more but not less than 10%.
Art. 87. Overtime work. Work may be performed beyond
eight (8) hours a day provided that the employee is paid for
the overtime work, an additional compensation equivalent to
his regular wage plus at least twenty-five percent (25%)
thereof. Work performed beyond eight hours on a holiday or
rest day shall be paid an additional compensation equivalent
to the rate of the first eight hours on a holiday or rest day
plus at least thirty percent (30%) thereof.
Article 87 says work performed beyond 8 hours on a holiday
or rest day shall be paid an additional compensation
equivalent to the rate of the first hours on a holiday or rest
day plus at leat 30% thereof.
Art. 88. Undertime not offset by overtime. Undertime
work on any particular day shall not be offset by overtime
work on any other day. Permission given to the employee to
go on leave on some other day of the week shall not exempt
the employer from paying the additional compensation
required in this Chapter.
When you have offsetting you are talking about two days in
the very least, 1 day when you are under time and the
succeeding day when you are over time. No deduction for
what you work in exchange is worth more peso wise.
Art. 89. Emergency overtime work. Any employee may
be required by the employer to perform overtime work in
any of the following cases:
1. When the country is at war or when any other national
or local emergency has been declared by the National
Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or property
or in case of imminent danger to public safety due to an
actual or impending emergency in the locality caused by
serious accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
3. When there is urgent work to be performed on
machines, installations, or equipment, in order to avoid
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
serious loss or damage to the employer or some other
cause of similar nature;
4. When the work is necessary to prevent loss or damage
to perishable goods; and
5. Where the completion or continuation of the work started
before the eighth hour is necessary to prevent serious
obstruction or prejudice to the business or operations of
the employer.
6. Any employee required to render overtime work under this
Article shall be paid the additional compensation
required in this Chapter.
Any employee may be required by the employer to perform
overtime work in any of the following cases:
a. When the country is at war or when any other
national or local emergency has been declared by the
National Assembly or the Chief Executive;
b. When it is necessary to prevent loss of life or property
or in case of imminent danger to public safety due to
an actual or impending emergency in the locality
caused by serious accidents, fire, flood, typhoon,
earthquake, epidemic, or other disaster or calamity;
The one week nonstop of rain is considered as an
emergency.
c. When there is urgent work to be performed on
machines, installations, or equipment, in order to
avoid serious loss or damage to the employer or some
other cause of similar nature;
d. When the work is necessary to prevent loss or damage
to perishable goods; and
The Banana Industry , the bananas are counted in weeks,
and the inspectors come, you will be surprised because the
workers are illiterate. Something about bud injects. The
timing of the injection must be accurate because it will affect
the fertility of the bud. Even if it’s a rest day, they have to
harvest the Banana because the Bananas might get rotten.
Bananas are perishable. That is why they can mandate work
during holidays.
e. Where the completion or continuation of the work
started before the eighth hour is necessary to prevent
29
serious obstruction or prejudice to the business or
operations of the employer.
Art. 90. Computation of additional compensation. For
purposes of computing overtime and other additional
remuneration as required by this Chapter, the "regular
wage" of an employee shall include the cash wage only,
without deduction on account of facilities provided by the
employer.
Regular wage of an employee shall be on cash wage only
without deductions of account for facilities provided by the
employer. So the basis of this is:
Cash Wage = Regular Rate of Pay whether hourly or weekly
or monthly or daily x the no. of hours work or no. of days.
If a problem gives you a weekly rate so you have to divide it
6 days then divide the result by 8 hrs so that you’ll get the
hourly rate. That is the cash wage.
Overtime work on a regular working day is additional 25%.
So 1 hour overtime is 125%, you are paid regular rate plus
125%.
Premium pay for regular holiday is ARTICLE 94 but ARTICLE
94 (c ) is no longer controlling because of the law, now it is
the administrative code. So now there are already 10
holidays the 2 additional are Muslim holidays. The premium
pay for regular holidays is 100% so if you are paid to work
you should be paid 200%.
Art. 91. Right to weekly rest day.
1. It shall be the duty of every employer, whether
operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four
(24) consecutive hours after every six (6) consecutive
normal work days.
2. The employer shall determine and schedule the weekly
rest day of his employees subject to collective
bargaining agreement and to such rules and regulations
as the Secretary of Labor and Employment may provide.
However, the employer shall respect the preference of
employees as to their weekly rest day when such
preference is based on religious grounds.
When are you entitled to a rest day? If you are a regular
worker you are entitled to a weekly rest period after a
working week. What is a working week? 6 consecutive
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
working days up to which you are entitled 24 hours of rest,
no work. But if you are a health personnel, with a hospital of
110 capacity, 5 continuous days na lang. If you work on the
6th day you get premium pay of 30% because of
ARTICLE83. When can you be required to work on a rest
day?
Art. 92. When employer may require work on a rest
day. The employer may require his employees to work on
any day:
1. In case of actual or impending emergencies caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss of
life and property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious
loss which the employer would otherwise suffer;
3. In the event of abnormal pressure of work due to
special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous
operations and the stoppage of work may result in
irreparable injury or loss to the employer; and
6. Under other circumstances analogous or similar to the
foregoing as determined by the Secretary of Labor and
Employment.
Art.92 which is almost the same as ARTICLE 89.
Art. 93. Compensation for rest day, Sunday or holiday
work.
1. Where an employee is made or permitted to work on his
scheduled rest day, he shall be paid an additional
compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such
additional compensation for work performed on Sunday
only when it is his established rest day.
2. When the nature of the work of the employee is such
that he has no regular workdays and no regular rest
days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his
regular wage for work performed on Sundays and
holidays.
30
3. Work performed on any special holiday shall be paid an
additional compensation of at least thirty percent (30%)
of the regular wage of the employee. Where such
holiday work falls on the employee’s scheduled rest day,
he shall be entitled to an additional compensation of at
least fifty per cent (50%) of his regular wage.
4. Where the collective bargaining agreement or other
applicable employment contract stipulates the payment
of a higher premium pay than that prescribed under this
Article, the employer shall pay such higher rate.
What is the compensation of a Sunday? Additional rate of
30% of regular wage.
Now if an employee has no rest day according to ARTICLE
93 B, he shall be paid an additional compensation of 30%
for work on Sundays or holidays. For example for someone
who have no rest days: security guards and the so called
“lagare boys” (mag-dagan2x sa sine sasm, mall, nccc;
sakaybisikleta)
So if they work everyday, Sunday is presumed to be their
rest day. Alright, work performed on any
Special holiday, what is it? Declared by the president as a
nonworking holiday. Premium pay is 30% ARTICLE 93 D, if
the company provides a higher premium pay then it is
followed not the 30%. The
Art. 94. Right to holiday pay.
1. Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service
establishments regularly employing less than ten (10)
workers;
2. The employer may require an employee to work on any
holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; and
3. As used in this Article, "holiday" includes: New Year’s
Day, Maundy Thursday, Good Friday, the ninth of April,
the first of May, the twelfth of June, the fourth of July,
the thirtieth of November, the twenty-fifth and thirtieth
of December and the day designated by law for holding
a general election.
These are regular holidays (technical term) days listed in
the administrative code, if you work on that day then you
receive 200%. Article 94-c, you have to memorize these 10
days. Calendar holidays. Remember the term regular holiday
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
is a technical term. Only those listed in Article 94 are regular
holidays.
REGULAR HOLIDAYS
1.) New Year’s Day
2.) Maundy Thursday
3.) Good Friday
4.) the 9th of April
5.) the 12th of June
6.) the last Sunday of August
7.) November 1
8.) December 25
9.) December 30
10.) December 31
11.) the day designated by law for holding a general election
12.) May 1
JURISPRUDENCE
Wellington Investments Case (1995) 245 s 561 Chief
Justice Narvasa
The problem here is the regular holiday fell on a Sun which
is a rest day. Is Monday automatically a regular holiday?
SC said, if you are a monthly paid worker you are paid your
holiday. Because all days are accounted for, you received
the same monthly pay regardless of the days per month. So
the SC says, if you still demand additional pay you are
adding 1 more day to the calendar, which is a violation of
the rules of court. No you do not get extra pay.
Asian Transmission Corporation vs CA 2004 Justice
Morales
One day fell into the equivalent of 2 regular holidays. April 9
is Bataan Day and also was good Friday. 2 days regular
holiday fell on the same day. How much are they entitled?
double or only one? The sum total of holidays is a separate
right. You cannot be given less than 12 holidays in 1 year.
How do you reconcile this with Wellington? In wellington,
the people are monthly paid, here they are paid daily. Here
the rule is no work, no pay. Holidays and rest periods are
not paid here.
San Miguel Corporation vs CA (2002)
SC said: not only Muslims but also Christian employees are
entitled holiday pay on Muslim holidays. This applies in the
autonomous region. Muslims in Manila are also entitled
holiday pay during Christmas or Holy Week
31
Pls. memorize the regular holidays. Christmas, Rizal Day,
Holy Thursday, Good Friday (these are movable) while
Bataan Day, National Heroes Day, Labor Day, Independence
Day… there are 12 memorize them.
Art. 95. Right to service incentive leave.
1. Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive
leave of five days with pay.
2. This provision shall not apply to those who are already
enjoying the benefit herein provided, those enjoying
vacation leave with pay of at least five days and those
employed in establishments regularly employing less
than ten employees or in establishments exempted from
granting this benefit by the Secretary of Labor and
Employment after considering the viability or financial
condition of such establishment.
3. The grant of benefit in excess of that provided herein
shall not be made a subject of arbitration or any court
or administrative action.
The next benefit is service incentive leaves. Applicable to
restaurants, hotels and similar establishment. It is 5 days
leave with pay. If you are already granted 15 day vacation,
you are not granted the leave with pay and also sick leave.
So take note that the labor standard is not 15 day vacation
leave but 15 days sick leave. The standard is 5 days leave is
all purpose. Service Incentive Leave tells you that the labor
code, labor standards does not provide for sick leave, does
not provide for vacation leave. So where did we get the 15
days vacation leave and 15 days sick leave? Where did we
get that? That is taken from the“prerogative” of the
employer. There is nothing in the labor code that says sick
leave and vacation leave. Now, under article 95, if you have
served 1 calendar year, you are entitled to 5 days service
incentive leave with pay, and way back in the 1970s under
Secretary of the DOLE said, and it has been affirmed by the
SC that, this 5 days service incentive leave Is commutable to
cash.
Now how about the regular vacation leave or sick leave that
are given by your employer, is that commutable to cash?
Unless that employer specifically declares that it is
commutable to cash, then it is not.
Is it good policy to make it commutable to cash?
Experienced human resource experts will tell you that if you
start commuting to cash sick leave benefits, you will have
big problem in your hand. “mga tao bisan gipanghilantan,
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
mutungha sa trabaho, ahh!, aron dili nya mawala ang cash
value anang ilang sick leave” . Remember, do not commute
to cash sick leave benefits, MAYBE vacation leave but not
sick leave.
Now, suppose you work, you have been engaged for a term,
let us say 10 months work so you are a contractual, are you
entitled to service incentive leave? If you say no, because
the law says you are entitled to a yearly service incentive
leave and it should apply only to those who have rendered
at least 1 year of service, is it not iniquitous to those who
have been working for only 10 months?
That is why the Bureau of Working Conditions says that it is
proportionately available to those who do not complete the 1
year. 1 whole year = 5 (Service Incentive Leave) then if you
work for only 8 months, then you are entitled
proportionately.
Can you take the cash equivalent? Yes. How about the cash
equivalent of the 15 day vacation leave? Unless the
employer adapts the grant. Do companies grant
commutation as a practice. But no company grants sick
leave. Bisag masakiton muanha, so it is not a wise practice
to make it commutable to cash.
10 months on a contractual basis. So how much are you
entitled?
5/10=x/10 = proportionate service incentive.
In the implementing rules, how can you forfeit your regular
holiday pay, if you are not present on the next preceding
working day, let’s say Holy Thursday, Good Friday,
Wednesday pa mu-absent naka. You are not entitled. WHY?
because you absented yourself on the next preceding day.
Reason: They do not want the employees to decide, you
might compromise the work schedules. So you forfeit the
regular holiday pay.
Now, is everybody entitled to service incentive leave? Those
who are already receiving more than the 5 day incentive
leave is no longer entitled.
Art. 96. Service charges. All service charges collected by
hotels, restaurants and similar establishments shall be
distributed at the rate of eighty-five percent (85%) for all
covered employees and fifteen percent (15%) for
management. The share of the employees shall be equally
distributed among them. In case the service charge is
abolished, the share of the covered employees shall be
considered integrated in their wages.
32
Service charges are given by restaurants and hotels. Service
charges apply only to hotels, restaurants, and similar
establishments. They must be registered in the official
receipts as a separate item. Service charge, if you have that
service charge let us say 10% or 15% of your bill and that is
itemized there; you cannot get rid of it, why? Because the
law provides that 85% of that must be given to the rank and
file workers, distributed evenly and the 15% goes to the
employer or to the managerial employees.
An example, Shakeys, naanasila service charge 12%.
According to ARTICLE 96, 85% of the charge is divided to
the service 15% to the management. Remember this is
mandatory of the restaurant owner. If the owner decides to
discontinue, he must maintain the average share of the
establishment because that is the matter of right of the
employees. Say, fine dining.. dayongilangaw. Turo2x naka.
Same attendants, your waiters must continue to receive
their average share of the service charge even though no
more service charge.
Art. 97. Definitions. As used in this Title:
1. "Person" means an individual, partnership, association,
corporation, business trust, legal representatives, or any
organized group of persons.
2. "Employer" includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and shall include the government and all its
branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and
institutions, as well as non-profit private institutions, or
organizations.
3. "Employee" includes any individual employed by an
employer.
4. "Agriculture" includes farming in all its branches and,
among other things, includes cultivation and tillage of
soil, dairying, the production, cultivation, growing and
harvesting of any agricultural and horticultural
commodities, the raising of livestock or poultry, and any
practices performed by a farmer on a farm as an
incident to or in conjunction with such farming
operations, but does not include the manufacturing or
processing of sugar, coconuts, abaca, tobacco,
pineapples or other farm products.
5. "Employ" includes to suffer or permit to work.
6. "Wage" paid to any employee shall mean the
remuneration or earnings, however designated, capable
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis,
or other method of calculating the same, which is
payable by an employer to an employee under a written
or unwritten contract of employment for work done or
to be done, or for services rendered or to be rendered
and includes the fair and reasonable value, as
determined by the Secretary of Labor and Employment,
of board, lodging, or other facilities customarily
furnished by the employer to the employee. "Fair and
reasonable value" shall not include any profit to the
employer, or to any person affiliated with the employer.
Now, take a look at the definition of Wage, its kilometric.
Article 97(f)- "Wage" paid to any employee shall mean the
remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or
other method of calculating the same, which is payable by
an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair
and reasonable value, as determined by the Secretary of
Labor and Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit to
the employer, or to any person affiliated with the employer.
Most of the commentators would say that the definition
brings out an essential item aspect of wage. Wage must be
cash wage but I dare say that cash is an inaccurate term.
Actually, what is meant by the is legal tender, “it must be
paid in legal tender”, so the question is what is their
difference? Let us say that your rate is Php 3,000 ever 15th
day. On the 15th day, your employer gives you 1 sack of 1
centavo coin as payment for you. Is that not cash? That is
cash but that is not legal tender. Under the new Central
Bank Act, coins of 20 centavos or less, it is only legal tender
uptoPhp 20.00. And 25 centavo and above is legal tender
upto 50 pesos. So, he can pay 1 centavo coin but upto 20
pesos only. The rest must be in other coins and other bills
because. Civil law teaches you that cash is legal tender but
not all cash are legal tender. If you say, you buy a a piece of
property worth 10 million and the vendee brings cash, the
vendor might refuse because cash is diffiulct to count. The
GENERAL RULE: WAGE MUST BE PAID IN LEGAL TENDER.
Exemptions: Facilities – includes of board, lodging, or other
facilities customarily furnished by the employer to the
employee. The IR says that facilities may be resorted to
under certain conditions.
What are those conditions?
33
1. It must be customary for that industry or job. An
example would be, if you are a waiter, part of the
wage are the meals that are given to you. The meals
are given free as part of the wage. The problem is,
the law says it must be fair and reasonable value, that
is why, each regional office puts out the standard
value for meals that the employer must charge. The
value in Region XI is 20 pesos. You cannot exceed
because it will prevent the employer from profiting
from it. Part of the wage is non-cash and It is meals.
So, it must be accepted and practiced by a particular
industry.
2. It must be fair and reasonable as determined by the
secretary of labor.
3. It must be accepted in writing.
4. The employer must not gain peculiarly.
This goes back all the way to the first minimum wage law in
1954. what was the minimum wage in 1954? The first
minimum wage law. Believe it or not the minimum wage
then was 4 pesos a day. ‘di na gani na kaigo ug pamlite run
paingon bankerohan’ but it was four pesos a day at that
time.
JURISPRUDENCE
Philippines Steam Navigation v CIR,
Phil. steam navigation could not implement it, they had a
hard time to implement it so they decided to give free meals
of their employees. The crew of the ship they are given free
meals. They counted the meals and they said that they have
already complied with the minimum wage. The crewmen
complained, they said ‘you cannot do that because it was
not counted before.’ The Philippine Steam Navigation said
we are not counting it so we can comply with the minimum
wage law. The question for sailors, is it facilities or is it
supplement? The SC said in this case, it is supplemented,
because you are giving it for the benefit of the employer. It
is not for the benefit of the sailors. O muingon sila na sila
nikaon, silly busog, that is for their benefit yes, BUT if you
do not give it, go pasgdang lang nimo sila, unya mag luto-
luto na sila, you will have as many fires as there are sailors
in your ship, which is very dangerous. Isn’t that? That is why
you have to provide meals for your crew in a ship and
therefore it is NOT a facility.
Mabeza v NLRC
 LABOR STANDARDS 2015 34
FROM THE LECTURES OF FR. A.L. NAZARENO

this case is about a chamber maid who was made to stay in

a small inn in Baguio City. She was given a room just above
the garage and she was given free meals because she also
served meals. All of a sudden there was a wage order
increasing the minimum wage. The Inn owner then said we
are computing your meals now as part of the wage that you
receive and after the computation, they said we have
complied with the wage order. Now, issue are those meals
and lodging facilites or are they supplement? Because the
maid complained with the labor arbiter that she was
underpaid. This is where the SC validated the requirements
of the implementing rules.

Before you can give facilities:

1.) It must be customary in the work or the occupation of

the employee.

2.) There must be prior written consent on the part of the

employer.

3.) Fair and reasonable value.

4.) No pecuniary benefit in that regard enjoyed by the

employer or any person connected to

So that is requisite for wage. We will later on see one of the

departments of wage is that it be given in cash. Wages must
be paid in cash. Actually it is not cash, wages must be paid
in legal tender. The law says cash but what the law means is
legal tender because if it is just cash it is possible to pay
your employees, let us say 15-30, pag ka 15 kuwaon nimo
imuhang sweldo isa ka sak0 ka dako ug 1 centavo’s, unya
ingnon nimo kuwa-a ni’ One centavo coins, one sack, that is
your salary for the 15th, is that allowable? Mu tawag ka pag
taxi aron masakay nimo any isa ka sak0, and then pag
deposit nimo ana, the bank will not accept them because it
will take them all day to count it. Now, why is that not
allowed? Because coins five centavos or less is legal tender
only up to 20 pesos and coins 20 centavos and above, is
legal tender only up to 50 pesos. So what the law means is
legal tender not just cash. Not all cash is legal tender but all
legal tender is cash. Checks are only legal tender after they
have been encashed, isn’t that? In themselves a check, you
cannot force a creditor to accept a payment through check
because the definition of legal tender is that which you can
compel the creditor to accept as payment of an obligation.
In the DOLE handbook, all there is to know about special leaves
have been included even the leaves that are now considered as
part of Labor Law, for instance, VAWC Leave. It is not Labor
Legislation since it is related more to Family Law and the rights
associated with family conflicts. The worker can apply for leave
and the employer must grant it as it is provided by law. Just read
the handbook, all kinds of leaves were there.
Let us discuss prohibition against non-payment of minimum
wage. It must be realized that the Minimum Wage Law, the
latest amendment of which is RA 6727 has increased the penalty
for non-payment of minimum wage. The non-payment of
minimum wage can be a criminal offense. If you have
complaints, you raise it with the prosecutor and the prosecutor
can file a case. It is a special law so intent is not necessary
because it is mala prohibita, not mala in se. In fact, Fr. Antonio
Samson (Former ADDU President) was charged with violation of
non-payment of minimum wage in 1986 because the government
increased the minimum wage by a wage order in the middle of
the school year where the tuition fee of the students were fully-
budgeted so the school will comply on the next year, so the
Union filed a criminal suit. Jurisprudence illustrates convictions
for non-payment of minimum wage. One, the punishment or
penalty meted out has been only fine, not imprisonment.
However, you must know that non-payment of minimum wage is
a criminal offense in the Philippines.
There are so many points of controversy when it comes to
minimum wage. Classical economics is normally against
legislating of wages. When you legislate wages, you are already
taking over the function of the market. In a free market, the
determination as to the proper wage is according to what Adam
Smith says, the invisible hand. The legislated industrial,
commercial and even agricultural wage rate in the Philippines is
really above the market wage. Those who can comply are those
with big concerns like multinationals but normally, the normal
employers cannot comply. Thus, the Minimum Wage Law is being
observed in the breached than in compliance.
For example, in Davao del Norte, Oriental and Sur, P250 is the
minimum wage of an unskilled agricultural worker. However, the
small farmers, like a grower of bananas, cannot pay that much.
For example in de-leafing banana, the banana grower with 3
hectares of plantation will hire a worker and provide him meals,
the cash wage is relatively lesser, otherwise, the wage is greater
but he must bring his own food. If the said grower provided
meals for free, usually, the wage given is lower than P200.
Remember, if you file underpayment or non-payment of wages,
it is a money claim and it prescribes in 3 years.
The first basic right is the payment of minimum wage. If could be
higher but it cannot be lower than the minimum wage law. The
same is established by wage orders issued by the Regional
Tripartite Wage and Regulatory Board (RTWPB) created by RA
6727. The provisions of which are now in Article 120-127 of the
Labor Code. The reason why RTWPB determines wage orders is
that standards of living, cost of living, etc are different according
to regions. If you are on NCR, the minimum wage is already
P400 (more or less). For industrial or commercial workers, it is
the same. If for agricultural, it is subject to other rate. In NCR,
there are higher standards of living, therefore, the higher
minimum wage. The other regions are lower. Those are the
reasons of the law and you can find it in the “whereas” clauses.
But the real reason is Congress did not want to be pressured by
labor group and all other advocacy groups if they retain the
power to determine minimum wage because Manila has the
greatest concentration of people in the Philippines and they are
afraid that people charged with emotions might protest against
them. So the Congress delegated the power to RTWRB. They do
that in the end as self-defense to protect the Congressmen. It is
for their own good, not for the people. Just like the price of rice,
it is determined as to the level affordable in Manila. Because
once the ordinary man in Manila cannot afford the price of rice,
there might be a revolution since the people will gather there
and people in greater Manila almost reaching 12 million now.
Does the other farmers all over the Philippines are considered?
No. He does not get the value of his craft. They are not
considered since they are scattered, separated and they cannot
ransack the Congress. But the people in Manila can do it.
According to Classical Economics, let the market define its wages
but the government is already intervening not only on minimum
wage but also the so-called payroll taxes, like SSS, Pag-ibig,
PhilHealth. There is nominal wage which is the minimum wage
and according to law, there is effective wage (Just look it up).
For the longest time, Singapore has no minimum wage up to
now, they do not have SSS. They passed a law-Sue Your
Sons/Daughters Law. It provides that as you grow old, it is your
sons or daughters who will take care of you and not the state. It
should not be the employer since he only pays your labor and
not in any obligation to see to it that your body and soul are still
together. Even though they do not have minimum wage, their
wages are much higher that our minimum wage which is already
in existence since 1954. Also, Hongkong does not have minimum
wage. In 1950’s, those people from China went here in the
Philippines working domestically on rich Chinese people.
However, anything reversed today, wages therein are greater
than here. Here is why the communist would say that you cannot
legislate a contractual reality.
Art. 100. Prohibition against elimination or diminution of benefits.
Nothing in this Book shall be construed to eliminate or in any
way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.
You cannot take away what you have given once. If you have
given benefits to your employee, you cannot take it away from
him or her. Benefits and wages in the Labor Code can only
increase. It cannot decrease according to law except when
there is collective bargaining agreement but it cannot go lower
than the minimum wage. The rule on non-diminution is applied
twice in the Labor Code since Article 127 has also this non-
diminution of benefits.
Art. 127. Non-diminution of benefits. No wage order issued by
any regional board shall provide for wage rates lower than the
statutory minimum wage rates prescribed by Congress. (As
amended by Republic Act No. 6727, June 9, 1989)
The RTWPB can never lower wages. It can only issue orders that
increases wage rates. Sometimes, they do not give wage order
that ostensibly increases the wages. They give what is called
Emergency Cost of Living Allowance (ECOLA). It is an item given
to workers to compensate for loss in purchasing power due to
inflation. It is not part of the computation of overtime pay,
thirteenth month pay and holiday pay but you see it every time
you receive the basic wage. Sometimes, the wage order will just
provide that the ECOLA is not integrated in the basic wage.
Technically speaking, you receive the same amount, but for the
employer, it becomes more burdensome because the ECOLA
raises you to a level where your contributions to SSS and Pag-
ibig will increase. Ostensibly, there is really no increase. Although
the working man does not mind it as he receives the money, but
then, it has effects in payroll taxes.
The topic on rationalization of wages will be discussed as we go
to Article 120-127.
Art. 101. Payment by results. The Secretary of Labor and
Employment shall regulate the payment of wages by results,
including pakyao, piecework, and other non-time work, in order
to ensure the payment of fair and reasonable wage rates,
preferably through time and motion studies or in consultation
with representatives of workers’ and employers’ organizations.
It told you already that in Dy Kei Beng case, the piece rate basis
of payment, neither affirms nor denies the existence of
employer-employee relationship. As an item of evidence, it is a
proof of payment and not proof that there is employer-employee
relationship. The arrangement of payment based on a piece rate
system is neutral if there is employer-employee relationship.
Supposed you are under piece rate and there is employer-
employee relationship, then, you begin to suspect that hiring you
is a means to escape the payment of minimum wage because
the yardstick for the determination of the rate is the average
worker and not the fastest worker or the slowest worker.
How do you know that hiring you under a piece rate system is
not to circumvent the law? The law says that the reasonableness
of piece rate system is determined by time and motion studies.
You go to the Regional Director of Labor and ask to conduct time
and motion studies to determine the reasonableness of the rate
that you are receiving. The landmark case is Red V Coconut vs
CIR. Before when still there were no machines, the mode of
processing coconut is through piece rate workers. The Supreme
Court says that if you are in a piece rate basis, you are not a
time worker and you are paid according to the rate of every
piece. Piece rate is normally for unskilled workers. But for the
highly skilled workers, they are not paid on a piece rate basis.
The piece rate system is just used to find out whether they are
efficient. For example, the critical stage of a port is the crane
operator, they are highly skilled and paid higher than the
manager of the port. In this case, it requires higher sensitive and
being expect in measuring. Thus, it cannot be paid on piece rate
basis because they are highly skilled. But if you are making hats,
you can do any other domestic work like taking care of the
young at the same time. The latter is not considered as skilled.
Thus, the employer will pay you on a piece rate basis because
you are not considered as skilled.
Once you have that study from the industrial engineers of the
DOLE, you know more or less where you are. You have prima
facie evidence that there is cause of action. If you work 8 hours
a day, there is a number of hats that you can make if you are an
average worker based on the finding on the time and motion
study. Then, you can go the Labor Arbiter and file underpayment
or non-payment of wages.
Art. 102. Forms of payment. No employer shall pay the wages of
an employee by means of promissory notes, vouchers, coupons,
tokens, tickets, chits, or any object other than legal tender, even
when expressly requested by the employee.
Payment of wages by check or money order shall be allowed
when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because of special
circumstances as specified in appropriate regulations to be issued
by the Secretary of Labor and Employment or as stipulated in a
collective bargaining agreement.
Prohibition against payment of wages other than cash should be
interpreted as prohibition against payment of wages other than
legal tender. You may be paid in cash but it is not the legal
tender. If this happens, it would be possible for your employer to
pay you a sack of 1 centavo coins since it is still cash. One of the
exceptions is facilities. Also, there is now a memorandum which
universalizes the payment through ATM.
Art. 103. Time of payment. Wages shall be paid at least once
every two (2) weeks or twice a month at intervals not exceeding
sixteen (16) days. If on account of force majeure or
circumstances beyond the employer’s control, payment of wages
on or within the time herein provided cannot be made, the
employer shall pay the wages immediately after such force
majeure or circumstances have ceased. No employer shall make
payment with less frequency than once a month.
The payment of wages of employees engaged to perform a task
which cannot be completed in two (2) weeks shall be subject to
the following conditions, in the absence of a collective bargaining
agreement or arbitration award:
1. That payments are made at intervals not exceeding
sixteen (16) days, in proportion to the amount of work
completed;
2. That final settlement is made upon completion of the
work.
Piece rate workers are covered by this. You cannot just say just
because you are under a piece rate basis, you have the right to
demand payment at the end of the day. If you are an employee
and then, you are paid in an interval basis of at least twice a
month, not longer than 16 days. If you are not, then you can
demand payment right away. If you are paid at the proper
interval, it is an index that you are an employee. But if at the end
of the day, you are paid means you just deliver the goods and
your transaction is only the basis of your relationship. Clearly,
your labor is on a piece rate basis.
Art. 104. Place of payment. Payment of wages shall be made at
or near the place of undertaking, except as otherwise provided
by such regulations as the Secretary of Labor and Employment
may prescribe under conditions to ensure greater protection of
wages.
The general rule is prohibition against the payment of wages
away from the workplace. The exceptions are:
(1) For greater protection of wages. Example, you live in a
hazardous neighborhood workplace and there are a lot
of thieves, hold uppers and bad people. So you are not
paid in the workplace and the paying be done
somewhere else where you will be safe.
(2) If the workplace is near gambling area, night club, etc
(See IRR). The employer can choose not to pay you
there but in some other place. The wives of the workers
are in favor of it.
There is an implementing rule Section 2 Book 8 of Rule 3 which
provide on when does payment in banks allowed but it is now
passé because of ATM. It says when you pay in terms of the
bank:
1. The bank must be within 1 kilometer radius from the
workplace.
2. The time in going to the bank should be considered as
compensable working time.
3. Transportation must be given from the bank and to the
bank.
It applies before but not now because of ATM. ATM is accepted
now as a form of disbursing salaries. The only caveat is that the
owner of the bank account from which you withdraw ATM is
owned by the company so that you can have it in zero balance
because if it is yours, you will be required to have a maintaining
balance. The company must own the account for the
disbursement of wages through ATM. For ATM, the worker must
withdraw the entirety because all that is there is entirely his. It is
the employer’s duty to maintain the ATM.
Art. 105. Direct payment of wages. Wages shall be paid directly
to the workers to whom they are due, except:
In cases of force majeure rendering such payment impossible or
under other special circumstances to be determined by the
Secretary of Labor and Employment in appropriate regulations, in
which case, the worker may be paid through another person
under written authority given by the worker for the purpose; or
Where the worker has died, in which case, the employer may pay
the wages of the deceased worker to the heirs of the latter
without the necessity of intestate proceedings. The claimants, if
they are all of age, shall execute an affidavit attesting to their
relationship to the deceased and the fact that they are his heirs,
to the exclusion of all other persons. If any of the heirs is a
minor, the affidavit shall be executed on his behalf by his natural
guardian or next-of-kin. The affidavit shall be presented to the
employer who shall make payment through the Secretary of
Labor and Employment or his representative. The representative
of the Secretary of Labor and Employment shall act as referee in
dividing the amount paid among the heirs. The payment of
wages under this Article shall absolve the employer of any
further liability with respect to the amount paid.
The rule is prohibition against payment other than the employee.
Exceptions are in terms of force majeure and death of an
employee. In terms of force majeure they can write a power of
attorney. For example, there is a storm and the worker needs to
attend his family. He send his son and write that the bearer is my
son and you can give my salary to him which instrument was
signed the worker. It needs not to be notarized. In terms of the
death of an employee, when he dies and he has accrued wages,
the same does not belong to his estate because the entire sum
of his wage is needed for survival of the employee and his
family. So, it is very simple to dispose the accrued wages which
accrue up to the time of his death. When he works from August
1 and he died on August 14, the employer will look at the files
and look for the heirs of the deceased and after that, the
employer ascertains their identity. If there is a minor, the natural
parent is assumed to be the guardian. Then, they are tasked to
meet the representative of the DOLE. After ascertaining the
identity of the heirs, the employer can release the accrued wage.
Later on, when there is somebody who will show up, the
employer is relieved with any liability as he complied with what
the law requires.
However, this does not cover items owing to the employee which
is not paid. Example, suppose the employer has a system of
provident fund wherein the employee contributes and the
employer does his counterpart. The employee obtained accrued
shares in the said fund say, P30,000. It cannot be disposed of
under Article 105 because that is not paid. It will form part of the
estate under succession. This is the time where up to such
amount, there will be an execution of affidavit of estate
settlement out for court. Then, it is published, succession will
take over.
Article 112 NON-INTERFERENCE IN DISPOSAL OF WAGES – No
employer shall limit or otherwise interfere with the freedom of
any employee to dispose of his wages. He shall not in any
manner force, compel, or oblige his employees to purchase
merchandise, commodities or other properties from the employer
or from any other person, or otherwise make use of any store or
service of such employer or any other person.
The idea is that an employee is completely free on what
he can or would do with his wages. This is the reason why in
remote workplaces like mines or agri-business establishments the
employer cannot run the cooperative that provides the basic
necessity. Layo man kayo tua pa didto sa Camp 5 sa Tadeco.
Layo kayo ka. Nanginahanglan ka ug asin kay nahutdan ka.
Muadto pa ka sa Panabo aron lang mupalit ka ug asin ug asukar.
Ang pliti nimo mas mahal pa kaysa sa asin ug asukar. Mao na
nay Coop, kay wa may maninda didto. Gamay raman kayo. There
should be a canteen. The employer cannot run the canteen
because he will be interfering in the disposal of wages. So what
is normally done is that the workers run the Coop. Kasagaran the
officers of the Coop run away with the Coop’s money. Why?
Because they do not own it if people do not own the thing they
will not take care of it. Example, ang plaza maski kinsa ang
makasud diha. Tan-awa magdugay ban g bangko sa plaza.
What happens is that the wife of the employer runs the
Coop. That is not interference because the wife is another
person. Mag-vale dayon. Posporo. Tunga sa kilo na mantika.
Suka. Vetsin pa jud na. Wan a gani ng Vetsin, ajinomoto na. Naa
diay na pagkacarcinogenic. Imo ng kuhaon gikan sa canteen.
Here is a company let us say Nestle the head office is
located next to the warehouse. Naa man jud tay damaged goods.
Only the container is damaged. Fork lift operator ka unya alas
dos na sa kadlawon. Mabunggo nimo mao na malumping tong
mga lata. Now the company knows that no supermarket will
accept these. Kinsa may mupili anang lupyak. Unsa ka ha? I-
discount 50% paliton sa mga employee tapos ang employer “ako
na lang niideduct sa imong sweldo.” “Kabaw man mi na wan a
maunsa.” This cannot be done. That is interference. Kinahanglan
i-release nimo ang sweldo unya sila na lang ang mupalit because
of you deduct it automatically that is interference. From the
personnel point of view that is also malpractice. That will
encourage breakage. Mao na ang nahitabo atong sa Alcantara
baligya man nila plywood ilahang quality control dili musugot ug
hiwi hiwi. Baligya nila sa employees. Himo sila balay. Tuyuon na
hiwi ang tabas sa plywood. Bad policy. That is not labor code but
personnel related.
Article 113. Wage deduction. No employer, in his own behalf or
in behalf of any person, shall make any deduction from the
wages of his employees, except:
In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance;
For union dues, in cases where the right of the worker or his
union to check-off has been recognized by the employer or
authorized in writing by the individual worker concerned; and
In cases where the employer is authorized by law or regulations
issued by the Secretary of Labor and Employment.
The rule is that you cannot deduct anything in wages unless that
is allowed by law. What are the deductions allowed by law under
113?
1. Union dues. When there is a CBA. As to Check off;
2. Those deductions that are for industrial insurance
premiums. There are insurance companies that offer life
insurance to a company who can muster a group of
workers minimum number. They give special discounts.
High-end insurance ordinary low insurance at special
premiums the worker must consent in writing;
3. Deductions specially allowed not allowed but enforced by
law.
 Withholding tax;
 Contributions to the SSS;
 Contributions to the PHIC;
 Contributions to the Pag ibig.
These are allowed deductions to your salary. Aside from
these no other deductions. What about deductions from deposit?
There are certain jobs that require deposit. Can you give an
example? Cashiers. Cashiers are required to post a bond. Diba?
Payroll master. They are required to put up a bond. Another
clear example is a bank teller. If there is a shortage diba the
teller answers for it. Kaluoy. Ayaw kaluy-i kay diba taga adlaw
naay shortage. What do you do? The Supreme Court for these
deposits to be deducted the following must be present:
1. The job must be such that is usual to have deposits in cases
of culpable loss or damage. What are those kind of work?
Waiter ka? That is accepted in the industry mubayad ka sa
imong buak. Dili gani ka pabayron daghan nag buak.
Buhatong Frisbee.
2. The worker must be given a hearing as to his defense. As to
the cause.
3. It must be proven by substantial evidence that he really is
the cause.
4. He cannot be made responsible for more than the actual
loss or damage. It must be actual
5. He cannot be deducted of more than 1/5 of his wage. 1/5 of
his weekly wage. 20%.
What is an example when a worker is made to answer
for more than the actual damage. You are familiar with this.
Mcdo delivery. Jollibee. Kinsa may gadeliver ana? Ilahang
empleyado. They are given charge with the motorcycle. Pizza? In
Agdao. kanang balikbayan na gikan sa Saudi. Nag-order ug pizza.
Ang empleyado sa Shakey’s parking iyahang motor sa iskenita.
Pag-abot didto. Hatagan siya ug tip. Dollar lipay kayo siya.
Paggawas wa naman ang motor pagbalik niya. Lipay siya sa
iyahang tip pero ang shakey’s wa na lipay. Imbestigahan siya.
Did you apply the safety measure? Ngano naa may poste diha
wala man nimo gigaid naa man kay lock. Kay kung gikawat to
unya gihigot na nimo sa poste pagkuha nadala hasta poste. Di na
nimo sala wa na kay liability kay gi-observe man nimo ang
measure. Wala man kay gadali man ka sa imohang tip. Dedukan
ka. Pero pila man? Acquisition cost ang gi-deduct. No. Is that the
actual damage? No that is not. The actual damage is acquisition
cost less Accumulated Depreciation. Mao na ang actual. Very
important that the requisites are followed. Maluoy ka. There are
certain occupations. Let us say tellering. Mashort ka diha.
Dedukan. The industry in their study found that negative
reinforcement … what works is positive reinforcement. You have
a shortage allowance. Wa gani kay shortage imo na na after 3
months. Palit ka ug bag ug sapatos. Naa kay incentive.
Article 114. Deposits for loss or damage. No employer shall
require his worker to make deposits from which deductions shall
be made for the reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer, except when
the employer is engaged in such trades, occupations or business
where the practice of making deductions or requiring deposits is
a recognized one, or is necessary or desirable as determined by
the Secretary of Labor and Employment in appropriate rules and
regulations.
Article 115. Limitations. No deduction from the deposits of an
employee for the actual amount of the loss or damage shall be
made unless the employee has been heard thereon, and his
responsibility has been clearly shown.
So that is deductions from wages. In the case of FIVE J Taxi vs
NLRC. You know from our er-ee relationship. Taxis under the
boundary system are employees of the operator. There is a
system that you must meet the boundary. Full gasoline pagkuha
nimo dapat pag balik nimo full ghapon. Then ibalik nimo ang
boundary ang remainder imo na. They deduct what is called a
shortage allowance sinking fund. Pila man na Php 20 kuhaan. Put
under your account. It is suppose to answer for the day you
become short. Imo ra gihapon kwarta pero gitapigan. Washing.
Nalimpyo dapat limpyo pag-uli. Agi ka didto sa washing dedukan
ug Php 50. The taxi people complained to the Labor Arbiter. Are
these deductions valid? What was the ruling. The deduction for
sinking fund is illegal. You cannot do that. You answer for the
shortage when it occurs. Second, the deductions for washing are
valid. If you receive the taxi clean you have to make sure that
when you upon return it must be clean. On the matter of the car
wash payments, the labor arbiter had this to say in his decision:
"Anent the issue of illegal deductions, there is no dispute that as
a matter of practice in the taxi industry, after a tour of duty, it is
incumbent upon the driver to restore the unit he has driven to
the same clean condition when he took it out, and as claimed by
the respondents (petitioners in the present case), complainant(s)
(private respondents herein) were made to shoulder the
expenses for washing, the amount doled out was paid directly to
the person who washed the unit, thus we find nothing illegal in
this practice, much more to consider the amount paid by the
driver as illegal deduction in the context of the law."
Consequently, private respondents are not entitled to
the refund of the P20.00 car wash payments they made. It will
be noted that there was nothing to prevent private respondents
from cleaning the taxi units themselves, if they wanted to save
their P20.00. Also, as the Solicitor General correctly noted, car
washing after a tour of duty is a practice in the taxi industry, and
is, in fact, dictated by fair play.
Article 116. Withholding of wages and kickbacks prohibited. It
shall be unlawful for any person, directly or indirectly, to withhold
any amount from the wages of a worker or induce him to give up
any part of his wages by force, stealth, intimidation, threat or by
any other means whatsoever without the worker’s consent.
Article 117. Deduction to ensure employment. It shall be
unlawful to make any deduction from the wages of any employee
for the benefit of the employer or his representative or
intermediary as consideration of a promise of employment or
retention in employment.
This is very common in works with low-level workers.
Daghan illiterate. Sa construction. Sa field. Gagmay na bapor dili
container ship mga inter-island boats lang. Lukdo-lukdo lang man
na sila. Alsa-alsa. I don’t know if you really observe dili na sila
dagko ug lawas pero maka-alsa sila ug dagko kaayo. Ang sikreto
ana liog. Maayo mu-balance. Ginatrain na sila sa probinsya. Alsa
ug tubig. Musod ka diha kadaghanan last resort na na. Illiterate
pa ka gikan ka pa sa prisohan. Pagdakoay na sila sa patik. If you
intend to get in there go to your kapatas. Siya’y magpasulod
nimo. Thumbark nimo pangayoon niya pagpakita sa payroll.
Then the kapatas can take advantage of you. “Gusto pa ka
mutrabaho sunod semana?” Muhatag ka sa imohang kapatas
para maensure ang imong employment next week. That is the
circumstance that the law seeks to prevent. That they should be
free from withholding. There are so many unscrupulous people.
Manghagad siya sa “siga-palong.” Di jud siya mubayad maski
sige siya ug kanta. Unsa man na indirect violation of the
prohibition against withholding and kickbacks.
Article 118. Retaliatory measures. It shall be unlawful for an
employer to refuse to pay or reduce the wages and benefits,
discharge or in any manner discriminate against any employee
who has filed any complaint or instituted any proceeding under
this Title or has testified or is about to testify in such
proceedings.
If an employee files a complaint against the employer or
testifies against the employer in favor of another such employer
cannot retaliate. The employer cannot even bring the employee
in a situation where he/she is disciplined.
Article 119. False reporting. It shall be unlawful for any person
to make any statement, report, or record filed or kept pursuant
to the provisions of this Code knowing such statement, report or
record to be false in any material respect.
 They make their employees sign a blank payroll.
Paghuman ug pirma fill out the blanks dayon. Mao na ang
trabaho sa bookkeeper. Pero sa labor force lain. Niadto bago
pako abogado. Unsaon man nako pagkuha nianang mga blank
payroll ha. Naay worker mupauli na sa Bohol nagresign na siya.
Una ka muresign sultii ko ha. Paglinya nimo ari ka sa katapusan
bunluta dayon ang payroll. Kusog man ka mudagan noh?
Gilabnot niya. Tapos, midagan siya. File ug complaint.
Underpayment of wages. Attached. False reporting. Di man na
amo ana ang employer. Kay wa man diay letterhead didto. RLJ
construction. Ginatukod pa ng Victoria Plaza. Sirado na karon.
Wa man diay silay ilahang payroll. Ang buhaton nila kay mupalit
ug payroll sa papertree. Alemars. Fill out the blanks. Anha pa nila
i-stamp. Pahimo diha sa side walk. Before the Labor Arbiter, they
produce affidavits. “I never signed the payroll na di mao.” “Husto
ang gbayad sa ako ug wa ko nipirma anang payroll.” Unya usa
lang imong ebidensya. Prepoderance of evidence ba. Their
affidavits against my evidence. Unsaon man nimo pagpildi niini.
Labor inspection lang makapildi. The director of Labor sends his
officer to the workplace. They will make interview. Pila may
minimum? They will just say basta minimum. That is the only
way you can beat false reporting. What should the payroll
contain?
1. period covered;
2. the rate of pay (monthly, daily, hourly)-straight time
pay;
3. the amount due regular to the regular week;
4. the additional pay;
5. the deductions;
6. the take home pay.
Why is it important? Because in the complaint for non-
payment all the worker has to do is to allege the non-payment.
Then the burden shifts to the employer to prove that he has
paid. The burden of proof is with the employer. That he has paid.
Kung wa kay payroll slip. Unya mu-complain nag employee na
gibayran siya. Unsa man imong panubag. Gibayran tika uy. Bisag
unsaon nimo. O bayran na sad nimo ug usab upt o 3 years.
Because the payroll is the best evidence of payment. You cannot
escape that.
RA 10653
AN ACT ADJUSTING THE 13TH MONTH PAY AND OTHER
BENEFITS CEILING EXCLUDED FROM THE COMPUTATION
OF GROSS INCOME FOR PURPOSES OF INCOME
TAXATION, AMENDING FOR THE PURPOSE SECTION
32(B), CHAPTER VI OF THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:
SECTION 1. Section 32(B), Chapter VI of the National Internal
Revenue Code of the Philippines (Republic Act No. 8424) is
hereby amended as follows:
“SEC. 32. Gross Income. —
“x x x
“(B) Exclusions from Gross Income. — The following items shall
not be included in gross income and shall be exempt from
taxation under this Title:
“xxx
“(7) Miscellaneous Items. — “xxx
“(e) 13th Month Pay and Other Benefits. — Gross benefits
received by officials and employees of public and private
entities: Provided, however, That the total exclusion under this
subparagraph shall not exceed eighty-two thousand pesos
(P82,000) which shall cover:
“xxx
“(iv) Other benefits such as productivity incentives and Christmas
bonus: Provided, That every three (3) years after the effectivity
of this Act, the President of the Philippines shall adjust the
amount herein stated to its present value using the Consumer
Price Index (CPI), as published by the National Statistics Office
(NSO).”
SEC. 2. Implementing Rules and Regulations. — The Secretary of
Finance shall promulgate the necessary rules and regulations for
the faithful and effective implementation of the provisions of this
Act: Provided, That, the failure of the Secretary of Finance to
promulgate the said rules and regulations shall not prevent the
implementation of this Act upon its effectivity.
SEC. 3. Repealing Clause. — All laws, orders, issuances, circulars,
rules and regulations or parts thereof which are inconsistent with
the provisions of this Act are hereby repealed or modified
accordingly.
SEC. 4. Separability Clause. — If any provision of this Act is
declared unconstitutional or invalid, other parts or provisions
hereof not affected thereby shall continue to be in full force and
effect.
SEC. 5. Effectivity. — This Act shall take effect fifteen (15) days
following its publication in at least two (2) newspapers of general
circulation.
13th month pag wa nilampas ug 30k used to be exempt.
Now PNOY increased it to 82k. The boy girl Henares. It must be
13th month pay any other bonus is not included even if given
during Christmas. The burden of proof to show that it is 13 th
month pay is the one who claim exemption. May include other
bonuses as long as it does not go beyond 30k. Different times
different administration.
September 11, 2015
There are four special topics on our discussion on Wages:
I. WAGE RATIONALIZATION ACT
Article 120 -127 is the special section on the Wage
Rationalization Act.
II. VISITORIAL POWERS
Article 128 -129 speaks of the visitorial powers of the Secretary
and recovery of wages, simple money claims and benefits.
The question of jurisdiction was discussed recently by the SC in
the celebrated case of People’s Broadcasting Service Bombo
Radyo Inc v Secretary of Labor. The SC rendered a decision
in this regard twice. The first decision was dated May 8, 2009.
That decision was penned by Justice Tinga. Subsequently on
March 6, 2012 on motion for reconsideration the SC issued a
resolution in the same case reversing its ruling in 2009.
Compare these decisions and analyze what made the SC change
its decision. In the first decision the court says that the Secretary
of Labor’s representative does not have jurisdiction in the
exercise visitorial powers to determine the existence of ER-EE
relationship. Who has this power? It’s the Labor Arbiter. Now, if
the issue of ER-EE relationship is raised in a case before the
Regional Director of Labor representing the Secretary of Labor in
the exercise of visitorial powers, then the Regional Director
should yield to the Labor Arbiter. He should indorse the case to
the Labor Arbiter. There is a vigorous dissent by the former
Secretary of Labor who is Justice Brion. So 3 years later there is
a resolution reversing the decision.
PEOPLES BROADCASTING (BOMBO RADYO
PHILS., INC.) vs. THE SECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT,
THE REGIONAL DIRECTOR, DOLE REGION VII,
and JANDELEON JUEZAN
May 8, 2009 2nd Division Tinga
Art 128 is quite explicit that the visitorial and
enforcement powers of the DOLE comes into play
only in cases when the relationship of employer-
employee still exists.
Necessarily, the DOLEs power does not apply in
two instances, namely: (a) where the employer-
employee relationship has ceased; and (b)
where no such relationship has ever existed.
Where employer-employee relationship no longer
exists by reason of the fact that it has already been
severed, claims for payment of monetary benefits fall
within the exclusive and original jurisdiction of the
labor arbiters. Accordingly, if on the face of the
complaint, it can be ascertained that employer-
employee relationship no longer exists, the case,
whether accompanied by an allegation of illegal
dismissal, shall immediately be endorsed by the
Regional Director to the appropriate branch of the
National Labor Relations Commission (NLRC).
In the first situation, the claim has to be referred to
the NLRC because it is the NLRC which has
jurisdiction in view of the termination of the
employer-employee relationship. The same procedure
has to be followed in the second situation since it is
the NLRC that has jurisdiction in view of the absence
of employer-employee relationship between the
evidentiary parties from the start.
Clearly the law accords a prerogative to the NLRC
over the claim when the employer-employee
relationship has terminated or such relationship has
not arisen at all. The reason is obvious. In the second
situation especially, the existence of an employer-
employee relationship is a matter which is not easily
determinable from an ordinary inspection, necessarily
so, because the elements of such a relationship are
not verifiable from a mere ocular examination.
It can be assumed that the DOLE in the exercise of its
visitorial and enforcement power somehow has to
make a determination of the existence of an
employer-employee relationship. Such prerogatival
determination, however, cannot be coextensive
with the visitorial and enforcement power
itself. Indeed, such determination is merely
preliminary, incidental and collateral to the DOLEs
primary function of enforcing labor standards
provisions. The determination of the existence of
employer-employee relationship is still
primarily lodged with the NLRC. This is the
meaning of the clause in cases where the relationship
of employer-employee still exists in Art. 128 (b).
The existence of an employer-employee relationship
is a statutory prerequisite to and a limitation on the
power of the Secretary of Labor, one which the
legislative branch is entitled to impose. The rationale
underlying this limitation is to eliminate the prospect
of competing conclusions of the Secretary of Labor
and the NLRC, on a matter fraught with questions of
fact and law, which is best resolved by the quasi-
judicial body, which is the NRLC, rather than an
administrative official of the executive branch of the
government. If the Secretary of Labor proceeds to
exercise his visitorial and enforcement powers absent
the first requisite, as the dissent proposes, his office
confers jurisdiction on itself which it cannot otherwise
acquire.
A mere assertion of absence of employer-employee
relationship does not deprive the DOLE of jurisdiction
over the claim under Article 128 of the Labor Code. At
least a prima facie showing of such absence of
relationship, as in this case, is needed to preclude the
DOLE from the exercise of its power. The Secretary of
Labor would not have been precluded from exercising
the powers under Article 128 (b) over petitioner if
another person with better-grounded claim of
employment than that which respondent had.
Respondent, especially if he were an employee, could
have very well enjoined other employees to complain
with the DOLE, and, at the same time, petitioner
could ill-afford to disclaim an employment relationship
with all of the people under its aegis.
Without a doubt, petitioner, since the inception of this
case had been consistent in maintaining that
respondent is not its employee. Certainly, a
preliminary determination, based on the evidence
offered, and noted by the Labor Inspector during the
inspection as well as submitted during the
proceedings before the Regional Director puts in
genuine doubt the existence of employer-employee
relationship. From that point on, the prudent recourse
on the part of the DOLE should have been to refer
respondent to the NLRC for the proper dispensation
of his claims.
PEOPLES BROADCASTING (BOMBO RADYO
PHILS., INC.) vs. THE SECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT,
THE REGIONAL DIRECTOR, DOLE REGION VII,
and JANDELEON JUEZAN
March 6, 2012 En Banc Velasco
It is conceded that if there is no employer-employee
relationship, whether it has been terminated or it has
not existed from the start, the DOLE has no
jurisdiction. Under Art. 128(b) of the Labor Code, as
amended by RA 7730, the first sentence reads,
Notwithstanding the provisions of Articles 129 and
217 of this Code to the contrary, and in cases where
the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly
authorized representatives shall have the power to
issue compliance orders to give effect to the labor
standards provisions of this Code and other labor
legislation based on the findings of labor employment
and enforcement officers or industrial safety
engineers made in the course of inspection. It is clear
and beyond debate that an employer-employee
relationship must exist for the exercise of the visitorial
and enforcement power of the DOLE.
The question now arises, may the DOLE make a
determination of whether or not an employer-
employee relationship exists, and if so, to what
extent? YES
The prior decision of this Court in the present case
accepts such answer, but places a limitation upon the
power of the DOLE, that is, the determination of the
existence of an employer-employee relationship
cannot be co-extensive with the visitorial and
enforcement power of the DOLE. But even in
conceding the power of the DOLE to determine the
existence of an employer-employee relationship, the
Court held that the determination of the existence of
an employer-employee relationship is still primarily
within the power of the NLRC, that any finding by the
DOLE is merely preliminary.
This conclusion must be revisited. No limitation in the
law was placed upon the power of the DOLE to
determine the existence of an employer-employee
relationship. No procedure was laid down where the
DOLE would only make a preliminary finding, that the
power was primarily held by the NLRC. The law did
not say that the DOLE would first seek the NLRCs
determination of the existence of an employer-
employee relationship, or that should the existence of
the employer-employee relationship be disputed, the
DOLE would refer the matter to the NLRC. The DOLE
must have the power to determine whether or not an
employer-employee relationship exists, and from
there to decide whether or not to issue compliance
orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730.
The determination of the existence of an employer-
employee relationship by the DOLE must be
respected. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be
rendered nugatory if the alleged employer could, by
the simple expedient of disputing the employer-
employee relationship, force the referral of the matter
to the NLRC.
If the DOLE makes a finding that there is an existing
employer-employee relationship, it takes cognizance
of the matter, to the exclusion of the NLRC. The
DOLE would have no jurisdiction only if the employer-
employee relationship has already been terminated,
or it appears, upon review, that no employer-
employee relationship existed in the first place.
To recapitulate, if a complaint is brought before
the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor
legislation, and there is a finding by the DOLE
that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to
the exclusion of the NLRC. If the DOLE finds that
there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint
is filed with the DOLE, and it is accompanied by a
claim for reinstatement, the jurisdiction is properly
with the Labor Arbiter, under Art. 217(3) of the Labor
Code, which provides that the Labor Arbiter has
original and exclusive jurisdiction over those cases
involving wages, rates of pay, hours of work, and
other terms and conditions of employment, if
accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is
still an existing employer-employee
relationship, the jurisdiction is properly with
the DOLE. The findings of the DOLE, however, may
still be questioned through a petition for certiorari
under Rule 65 of the Rules of Court.
Can the Inspection Division of the DOLE can go at anytime of the
day or night to a workplace as long as it is open? Remember
they do not need a warrant.
Yes as long as it is open. But if the workplace is closed, they do
not have the authority. They now need a warrant.
In the course of the years the DOLE has found out that there are
so many violations on this so it embarked on a new practice of
voluntary compliance. How do you do that? Read Department
Order 115-11 (issued 2011) and Department Order 115-A (issued
2012). It is a system by which they encourage workplaces to
comply by the law. After they have been found to be compliant
they will be issued a certificate of compliance and for three years
they will not be inspected.
There are 4 kinds of compliances:
1. General labor standards laws compliance
2. Basic occupational safety and health
3. Child labor laws and regulations
4. Non-violation of human trafficking and compliance of special
requirements for working women
So you take a look at what laws are to be complied with. The
tripartite team (representative from government, employer and
employees sector) will inspect for compliance.
III. CONTRACTING AND SUB-CONTRACTING
Art. 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person
for the performance of the former’s work, the
employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or subcontractor fails
to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such
employees to the extent of the work performed under
the contract, in the same manner and extent that he
is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of
workers established under this Code. In so prohibiting
or restricting, he may make appropriate distinctions
between labor-only contracting and job contracting as
well as differentiations within these types of
contracting and determine who among the parties
involved shall be considered the employer for
purposes of this Code, to prevent any violation or
circumvention of any provision of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him.
DO 18-02 – The latest IRR with respect to contracting and sub-
contracting.
Now, in this particular DO there is a list of prohibited practices.
Make sure you memorize these prohibitions in Sec 6
Using the in-house contractor – Kanang sa Gaisano ug SM
nagbuhat silag contractor (manpower agency) and then that is
where they get their employees. The law says if your contracting
agency serves only one employer that is an in-house contractor –
that is a violation of the law.
Contracting out with a “cabo”
Contracting out a job not done in bad faith
IV. ATTORNEY’S FEES
Art. 111. Attorney’s fees.
In cases of unlawful withholding of wages, the
culpable party may be assessed attorney’s fees
equivalent to ten percent of the amount of wages
recovered.
It shall be unlawful for any person to demand or
accept, in any judicial or administrative proceedings
for the recovery of wages, attorney’s fees which
exceed ten percent of the amount of wages recovered
TRADERS ROYAL BANK MPLOYEES UNION-
INDEPENDENT vs. NATIONAL LABOR
RELATIONS COMMISSION and EMMANUEL
NOEL A. CRUZ
March 7, 1997 2nd Division Regalado
There are two commonly accepted concepts of
attorney's fees, the so-called ordinary and
extraordinary. In its ordinary concept, an attorney's
fee is the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to
the latter. The basis of this compensation is the fact
of his employment by and his agreement with the
client.
In its extraordinary concept, an attorney's fee is an
indemnity for damages ordered by the court to be
paid by the losing party in a litigation. The basis of
this is any of the cases provided by law where such
award can be made, such as those authorized in
Article 2208, Civil Code, and is payable not to the
lawyer but to the client, unless they have agreed that
the award shall pertain to the lawyer as additional
compensation or as part thereof.
In the first place, the fees mentioned here are the
extraordinary attorney's fees recoverable as indemnity
for damages sustained by and payable to the
prevailing part. In the second place, the ten percent
(10%) attorney's fees provided for in Article 111 of
the Labor Code and Section 11, Rule VIII, Book III of
the Implementing Rules is the maximum of the award
that may thus be granted. Article 111 thus fixes only
the limit on the amount of attorney's fees the
victorious party may recover in any judicial or
administrative proceedings and it does not even
prevent the NLRC from fixing an amount lower than
the ten percent (10%) ceiling prescribed by the article
when circumstances warrant it.
Art. 111 of the Labor Code, as amended, clearly
declares movant's right to a ten (10%) per cent of the
award due its client.
As already stated, Article 111 of the Labor Code
regulates the amount recoverable as attorney's fees
in the nature of damages sustained by and awarded
to the prevailing party. It may not be used therefore,
as the lone standard in fixing the exact amount
payable to the lawyer by his client for the legal
services he rendered. Also, while it limits the
maximum allowable amount of attorney's fees, it does
not direct the instantaneous and automatic award of
attorney's fees in such maximum limit.
It, therefore, behooves the adjudicator in questions
and circumstances similar to those in the case at bar,
involving a conflict between lawyer and client, to
observe the above guidelines in cases calling for the
operation of the principles of quasi-contract and
quantum meruit, and to conduct a hearing for the
proper determination of attorney's fees. The criteria
found in the Code of Professional Responsibility are to
be considered, and not disregarded, in assessing the
proper amount.
KAISAHAN AT KAPATIRAN NG MGA
MANGGAGAWA AT KAWANI SA MWC-EAST
ZONE UNION and EDUARDO BORELA, vs
MANILA WATER COMPANY, INC
Nov 16, 2011 2nd Division Brion
Article 111 of the Labor Code, as amended,
contemplates the extraordinary concept of attorneys
fees and that Article 111 is an exception to the
declared policy of strict construction in the award of
attorneys fees. Although an express finding of facts
and law is still necessary to prove the merit of the
award, there need not be any showing that the
employer acted maliciously or in bad faith
when it withheld the wages.
Settled is the rule that in actions for recovery of
wages, or where an employee was forced to litigate
and, thus, incur expenses to protect his rights and
interests, a monetary award by way of attorneys fees
is justifiable under Article 111 of the Labor Code;
Section 8, Rule VIII, Book III of its Implementing
Rules; and paragraph 7, Article 2208 of the Civil
Code. The award of attorneys fees is proper, and
there need not be any showing that the employer
acted maliciously or in bad faith when it withheld the
wages. There need only be a showing that the lawful
wages were not paid accordingly.
In the present case, we find it undisputed that the
union members are entitled to their AA benefits and
that these benefits were not paid by the Company.
That the Company had no funds is not a defense as
this was not an insuperable cause that was cited and
properly invoked. As a consequence, the union
members represented by the Union were compelled
to litigate and incur legal expenses. On these bases,
we find no difficulty in upholding the NLRCs award of
ten percent (10%) attorneys fees.
Is the award of attorney’s fees proper when there is no
allegation that wages were maliciously withheld?
No you do not need to prove actual malice. The fact that it was
due and it was not given, you are entitled to attorney’s fees
because you are forced to litigate to recover what is rightfully
yours.
T & H SHOPFITTERS CORPORATION/GIN
QUEEN CORPORATION, STINNES HUANG, BEN
HUANG AND ROGELIO MADRIAGA, Petitioners,
vs. T & H SHOPFITTERS CORPORATION/GIN
QUEEN WORKERS UNION, ELPIDIO ZALDIVAR,
DARIOS GONZALES, WILLIAM DOMINGO,
BOBBY CASTILLO, JIMMY M. PASCUA,
GERMANO M. BAJO, RICO L. MANZANO, ALLAN
L. CALLORINA, ROMEO BLANCO, GILBERT M.
GARCIA, CARLOS F. GERILLO, EDUARDO A.
GRANDE, EDILBRANDO MARTICIO, VIVENCIO
SUSANO, ROLANDO GARCIA, JR., MICHAEL
FABABIER, ROWELL MADRIAGA, PRESNIL
TOLENTINO, MARVIN VENTURA, FRANCISCO
RIVARES, PLACIDO TOLENTINO AND ROLANDO
ROMERO, Respondents.
February 26, 2014 3rd Division Mendoza
Anent the issue on the award of attorney’s fess, the
applicable law concerning the grant thereof in labor
cases is Article 11120 of the Labor Code. Pursuant
thereto, the award of 10% attorney’s fees is limited to
cases of unlawful withholding of wages. In this case,
however, the Court cannot find any claim or proof
that petitioners unlawfully withheld the wages of
respondents. Consequently, the grant of 10%
attorney’s fees in favor of respondents is not justified
under the circumstances. Accordingly, the Court
deems it proper to delete the same
There can be no award for attorney’s fees when the case that
was filed was unfair labor practice. In other words the company
altered its practice of giving wages because of union activity
There is paper written by a law student in UST analyzing the
history of Art 110 which is worker preference in case of
bankruptcy
This preference is the subject of a protocol signed by more than
150 countries – The ILO Protocol was signed in 1950 and it was
only implemented in the Phil in 198( and yet even when it was
passed the SC in subsequent rulings said that this application is
subject to so many conditions so that there is really no
preference. According to the SC Art 110 has to be read together
with all the other provisions of law like the Civil Code and FRIA
which determines the concurrence and preference of credits.
Before this can be applicable there must be an in rem ruling by
the court that the employer is bankrupt. And it is applicable only
to the “free property” or property that is not subject to a
previous mortagage or action. So even after an amendment and
reenactment of this principle the court continuously maintained
that this is really not a preference at all as the ostensive wording
says. The law says : (Art 110)

Side note on Gynecological Leave: Not simply emanated but tied

to the reproductive organs or tissues. You undergo an operation
you can claim gynecological leave up to 30 days.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
SEPTEMBER 18, 2015 JPN & CKF
MANPOWER / PRE-EMPLOYMENT BOOK I OF
THE LABOR CODE
Now, which requirement the recruitment and placement of
workers covers up to thirty nine. Article 39, from Article 12
Statement of Objectives to Article 39. Now, the word
“Caution”, so many of the provisions between Art 12 to 39
have been repealed.
First, by Republic Act 8042 which became effective in 1995,
the Migrant Workers and Overseas Filipino’s Act of 1995.
Subsequently, RA 8042 was amended, drastically amended
by RA 10022 which became effective May 9, 2010.
SAMEER Overseas Placement Agency Incorporated
vs. Cabiles, L-170139 August 5, 2014, En Banc,
penned by Justice Leonen,
Justice Leonen is the most recent addition to the Supreme
Court. Justice Leonen is the former dean of the UP Law
School and he is the Principal Author of the Infamous BLL
because he brought this agreement to BLL and as his price
he was appointed to the Supreme Court and he comes up
with this en banc decision. His En Banc decision has
something to do with the very controversial provision in
10022. Now, this case I gave it to the 2014 Batch who took
the bar examination, notice that this is August 5, 2014
decision so it’s already beyond the cut off. Cut off for the Bar
examination is March 2014 for the October decision. I
nevertheless took it upon myself to give it to those who
were taking the bar. Cause it’s an unusual decision and I
just consider it very tempting to the bar examiner to ask it.
They said it’s a cut off but many times they violate. (Father
talking about the questions in the bar exam) And sure
enough it came out. That’s why our batch as a class the
Ateneo de Davao scored the highest in Labor because
something like three cases here came out. Chamba!
Now, why is this case very important?
First of all it violates the political principle or you learned in
political law, breach of judicial review. You know very well
that the text of the law, its provision is ultimately what the
Supreme Court says and becomes part of the law of the
land. The SC always refrains from rendering WON a law is
constitutional because it does not want to take over the job
of the legislation. You know the legislative power is plenary
1
in nature. There is no such thing as a law that cannot be
amended, congress has plenary powers.
But then it is the SC’s power to measure that law WON it is
in conformity with the constitution. Now, when does the
court do that? The court does that we are told in political
law that when it has no longer any choice. It can interpret
that provision in such a manner as to escape. Holding it as
the constitution, the court could do that because as the SC
said, it behoves of this court to assume a becoming modesty
with regard to correcting a co-equal branch of the
government. So unless there is a case that is an actual case
and this provision of law is applicable to this case. And not
only that, there is own choice what to interpret the
application.
The interpretation is the very lis mota according to political
law. No other choice, then the Supreme Court is forced to
render the law as unconstitutional. Now, sure enough that is
very clear, you must have a justiciable case before you can
render a law unconstitutional. Here there is law, justiciable
case because the applicable law is an old law before this law
became effective 10022. And yet that call renders 10022 as
unconstitutional. Dakpan si Leonen. And it is unanimous,
and there is a dissenting opinion, and there’s no case ha, the
case admittedly happened before the law became effective.
And yet, uses this law as it’s unconstitutional because of this
case, when the law is not yet effective, it’s the old 8042 is
still applicable. Why is that? You can see why see it is very
tempting. Why did the examiner would use this? Because it
is unprecedented.
Leonen does this, you could really see his strength of
scholarship because there was a shimming of case like this
and the SC in division said we cannot hold this omission of
10022 to unconstitutional because it was not yet in effect
when this case happened. So when we leave it to another
case the court said that in division here comes Leonel
appointed and this case happens in Leonel’s, this court holds
this provision as unconstitutional. Why is that? Because the
provision in question was already held unconstitutional in
8042. And then Congress, legislate it again incorporates it
10022 without any change. It does not, so it is a completely
identical provision of the law re-enacted in a new law when
before it was already held unconstitutional.
Now what is that controversial provision, that is Section 10
of RA 8042, subsequently re-enacted in Section 7 of RA
10022. That particular provision provides that an
illegally terminated overseas contract worker, an
Page 1 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
OCW, is entitled, if he is illegally terminated, he is
entitled to among other benefits, his salaries of the
unexpired portion of his employment contract or for
three months of every year of the unexpired term
whichever is less.
In the case rendering this provision unconstitutional under
section of 10 of RA 8042, the SC says this is unconstitutional
because this is discriminatory. If you are locally employed
you are entitled to full back wages, you are entitled
reinstatement. If you cannot be reinstated, there your
separation benefits, including one month salary for every
year of your complete service is counted. Now just because
you’re an overseas worker you are given a choice. Unexpired
portion of your contract or three months of every year or
unexpired term whichever is best. Why should you get less
just because you are an overseas contract employee, it is
discriminatory.
Now, what is the reason why court judges this as
unconstitutional even if there is no application to this case?
Because this is still governs by 8042, this is the reasoning
(ratio decidendi) given by Leonen:
(1) When a law or a provision of law is null, because it is
inconsistent with the constitution. The nullity cannot be
cured by reincorporating or re-enactment of the same or a
similar law or provision. A law or provision of law that has
already been declared unconstitutional remains as such
unless circumstances so change as to warrant a reverse
conclusion, nothing has changed it is the same, therefore it
is still unconstitutional;
(2) the new law puts overseas workers in the same
vulnerable position as they were prior to the said ruling
which render unconstitutional, failure to reiterate the very
ratio decidendi of that case will result on the same untold
economic hardships that the reading of the constitution
intended to avoid, obviously we cannot countenance other
expenses for further litigation that were reduce the hard
earned wages as well as add to the indignity of having been
deprived protection of our laws simply because our
precedence has not been followed. So those are the reasons
given by the SC while it made an exception, title of the case
is SAMEER Overseas Placement Agency Inc vs Cabiles,
August 5, 2014, En Banc ruling by Justice Leonen.
RECRUITMENT AND PLACEMENT
PROVISIONS: CONTINUING VIOLATION OF
WTO
2
A few points with respect to recruitment and placement, this
whole body of laws is a continuing violation of WTO. This is
a continuing violation of WTO. Nobody has brought as here
to the international court, WTO. But most countries have
already come to an agreement just like “Finance Camp???”
which no longer knows any boarders. Labor should no longer
have any restrictions as to its mobility. You should be able to
work anywhere in the world where you are qualified to work.
Kung nakahiba-o pa lang ta sa balaod, bisag asa lang unta
ta mutrabaho.
You know in the Philippines, the practice of law requires
citizenship. Di ka ka-take ug bar if you are not a citizen. But
in the United States and many other jurisdictions, you do not
need citizenship you do not need to be a resident or citizen
of the United States to take the uniform bar examination of
California or bar examination of New York, there’s a faculty
member who just passed the New York bar examination.
Nagtuon lang siya dinhi, palit siya review material, mas
sayon pa mupasar ka sa New York kesa sa bar dinhi sa
Philippines. Lima ra aka subjects, Obligations and Contracts,
Family law, criminal justice, civil procedure which is federal
state procedure, you have the fifty state legal ethics exam
which you can take anytime. There’s no labor law, no
corporation law. Ang risk lang, when you take the New York
bar, you will not know what subject you will take today, you
will only know the last subject. They say they will only
approve if you are a graduate of UP, Ateneo or San Beda,
they have many questions if it’s other.
So anywhere in the world, you should be able to work. But
this law, there are many requirements to be able to work
outside.
PROHIBITION AGAINST DIRECT HIRING
General Rule: The law prohibits so called direct hiring, a
foreign employer cannot hire you directly.
Exception: you are an organization with personality under
international law, the World Health, UNICEF, all these
different International organizations with personality under
international law. They can have their embassies, they can
hire directly.
But that is violated many times, what they do is after they
have a direct hiring and for foreign employer they report at
the POEA grants an exception. So, you can now, you should
be able to work anywhere. Why do I say this? because you
know RA 8042, that was amended by RA 10022 the latest,
Page 2 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
there is a proviso there which says, that this law is only
good for five years, after which there will no longer be
licensing or issuing of permits of recruitment and placement
agencies. Now, that particular provision has just been
glossed over and deregulations continue. Why is that?
Because the Philippines under legislature still feels the need
that our nationals working outside continue to need
protection. Very difficult to provide protection because our
labor laws are only municipal law they are not effective
beyond the territorial jurisdiction of the Philippines.
So they have devised schemes by which the foreign
principals are still made liable for under treatment of our,
how do they do that? By making placement agencies, the
recruitment agencies liable so they can really whip the
foreign principals, that is what they do. That is the plan, the
structure. How could you made the foreign principals liable?
by going after the placement agencies.
So the placement agencies must be licensed or must have
permits. License if you are fee charging, you required to
have a license. If you are not fee charging then you need a
permit.
You need authority; according to Article 13
(f) Authority means a document issued by the Department
of Labor authorizing a person or association to engage in
recruitment and placement activities as a private recruitment
entity.
A private recruitment entity is in Art 13
(e) means any person or association engaged in the
recruitment and placement of workers, locally or overseas,
without charging, directly or indirectly, any fee from the
workers or employers.
So, what government is in charge of placement and
recruitment? That is the POEA. They issue, they give
permits and they also cancel permits. It’s not the POEA that
cancels; it’s the Secretary of Labor. The POEA can suspend,
the POEA has what they called, Visitorial Powers over
placement and recruitment agencies. It means that at any
time of the day or night as long as these recruitment
agencies are open, they can come in, ask for their contract,
and ask for their list of principals, all the requirements of
licensure of recruitment agencies.
Now, there are prohibitions of course in engaging in
recruitment and placement. You are required to have
3
Filipino capital of at least 70% Filipino, 30% foreign
is allowed. Remember in the constitution, what is a Filipino
corporation? For purposes of holding property? 60-40. But
here it’s 70—30.
PEOPLE WHO CANNOT ENGAGE IN
RECRUITMENT OR PLACEMENT
Then, there are certain people that cannot engage in
recruitment or placement. Like those that are employed in
the Department of Labor, they cannot be engage directly or
indirectly in the recruitment or placement. What else? If you
have a business which is a travel agency. In selling plane
tickets on going abroad, tours etc., you cannot be allowed to
be granted a permit or license in recruitment and placement.
Why is that? What do you think? Problem sa complaints
overseas contract workers, tagaan nimo ticket, lupad lang
sila pag abot mo didto wa diay trabaho, human na ticket
bayad na sila. So to forestall that, you cannot be engaged in
the travel business and also engaged in recruitment and
placement.
Then you will see here that you have to put up several kinds
of bonds. If you are a recruitment agency you have to put
up this specific amount to answer for liabilities arising from
the contracts of overseas employment that you facilitate and
the SC said that this bond is not answerable for any other
obligation caused in that decided case, the placement
agency had a debt with a travel agency for the tickets that
were bought on a overseas workers that been deployed and
the placement agency was not able to pay the plane tickets.
The travel agency went to the court and ask for the
attachment of the bond, the SC said you cannot be unpaid
travel agent that issued plane tickets to the recruitment
agency. You cannot execute for that because that bond has
a specific purpose that is to answer for liabilities of the
overseas.
MANDATORY REMITTANCE OF SALARIES
Before, you can be deploy Filipinos overseas, they must
make sure that there is compliance with the so called
“mandatory remittance of your salaries.” So, the
overseas contract worker is made to open an account that is
respected by the foreign principal upon the guarantee of the
recruitment agencies. And a certain percentage of your pay
is remitted to your dependents. What percentage? It varies
according to your work. The highest percentage is the
seaman. Kung seaman gani ka, taas kaayo imong mandatory
remittance, I think it is 60%. If you’re a land based contract
Page 3 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
worker, I think it’s only 40% because you will need to spend
for your xxx. But if you’re a seaman, naa man ka sa bapor,
libre imong kaon.
PRACTICE OF TWO CONTRACTS
Now take note that this applies even to domestics, you’re a
domestic you go to Hong Kong, you still sign this
undertaking, and your employer is registered because all
contracts of overseas employment must be registered with
the POEA, and approved by the POEA. Now, what can you
say about the so called this practice of two contracts. Pa-
signon ka’g contracts in accordance with international
standards, and then you sign a second contract by which
you as overseas worker commit yourself to return part of the
salary and you sign in the first contract, and both contracts
are registered with the POEA.
This is very common, the first contract is in accordance with
IPF Rules, the IPF is the biggest union of seamen. And they
have control over first class ports abroad, (example of sosyal
ports given by father) why is it important if they are in
control? Because they verify contracts; they have
representatives who appreciate and they ask the captain we
want to see your contracts. So normally the captain must
have the copy of the first contract, not the second. Kay if
second iyang ihatag, then it will lower the IPF standards. But
then the IPF has a way of determining whether this contract
are in fact followed because they know these two contracts,
they start interviewing the crewman, receiver themselves.
The moment IPF learns that there is violation, they will
demand immediate correction. The captain cannot do that
immediate correction because it does not have money. He
will go to his agent because he has an agent whenever he
reaches his port. Why does the captain have an agent? How
does he refer with his ship? Kinahanglan siya’g gasoline,
tubig, supply? Unsa ma malengke siya didto wa siya
kahibao, mugunggo siya’g Athens di kahibao ug Greek? So
kinahanglan naa jud siya’y agent, manning agent. Adto na
siya’g mudagan ug kwarta. The manning agent cannot
produce the money, that is the deficit, the second contract.
What happens is?
The IPF will order a point officer. Nobody will touch the
ship; the ship cannot unload and the ship cannot be loaded.
Even if the ship captain will say sige surrender na ko, sibat
na ko, nobody among the, what is this, will even, leave,
retire the ship. (father talking about the boat na dagko).
Unsa ng buhaton sa kapitan daw? Mao na ang expression na
4
“cut and ?” putlon ang mga pisi, wala naman siya, so nobdy
will service the ship.
That is what happens, now, the issue was brought to the
Supreme Court, 1990s there was this ship, Virgin
Shipping, three cases. It involved, virgin shipping, ni-a na
dinhi, naa na sa Sasa. Ng virgin shipping naga cut lang man
ug saging didto sa Japan, agent na agent, Virgin shipping.
They were involved in this system of two contracts. First
contract, in accordance with IPF. The second contract, you
remit. Pero actually in implementing the two contracts ang
ihatag nalang nimo katong exact, ikaduhang contract. now,
both contracts are registered with the POEA, the POEA
accedes to that because the pressure of the manning
agencies. Now in the 1950s, the Philippines had a greater
share of this seamen’s ??? Mas daghan Pilipino kasakay
niadto comparatively of the available positions. Mas daghan
Pilipino, kay ngano? English man. But then there was
competition, nanulod na ning mga lain-lain na nationalities.
They are willing to receive very much lower because the
starting point is already very low. Anything higher than that
is better. Niadto 1950s, gwapo kaayo’g benefits ang mga
seamen, besides their monthly salary, they are given 1
bottle of whisky and 1 ream of cigarettes every week. That
was standard before, karon wa na na
Kung muingon ka na it’s a major source of employment, you
know there are two priests from tagum who are chaplains in
Liverpool, London. And there, there are about 3 to 5 ships
that dock everyday; unsa man ila buhaton? Sakay na sila
dira then mag misa sila kay kada bapor naa man Pilipino.
And the archbishop of London is paying the archdiocese of
tagum to have these two priests there. So it’s a big, very big
source of employment, that’s one of the reasons why dollar
inward remittances is closer now to 30billion dollars a year.
That’s more than 2 billion dollars a month in remittances.
That’s one of the biggest industries in the Philippines,
kanang Call center wa na katunga ani.
Now, when these (Verjen) Virgin shipping trilogy of
cases was decided. First it was decided in division and it
says that the first contract is valid and the 2nd contract is not
valid. Then there was a 2nd case decided by the Supreme
Court in division and the 2nd case said, the 2nd contract is
valid, the 1st contract is not.
So Virgin Shipping asked for a decision en banc. The
ponente of the decision en banc was justice Hugo Gutierrez.
And in his decision said the basic argument why they are
asked to close our eyes to this irregularity of the 1st contract
Page 4 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
being supplanted by a 2nd contract is the age old axiom that
“you should not kill the goose that lays the golden eggs”.
Overseas employment is the source of so much dollar
remittances here in the Philippines, supporting us. If we
don’t play along with this labor matter now, we might lose
the market. Kay daghan pa lain country na mas mudawat
ani na contract at a lower price.
Then Hugo Gutierrez says this court holds that it is the first
contract that should be upheld and anything less or
detracting from the first contract is void.
Now, has that practice stopped? No, it has not stopped,
which tells you again that it’s very difficult for law to amend
the prevailing market wage. Since up to now it continues.
Kay naa man mga substandard ships, mga karaang bapor.
MIGRANT WORKERS AND OVERSEAS
FILIPINOS ACT OF 1995
REPUBLIC ACT No. 10022
AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE
KNOWN AS THE MIGRANT WORKERS AND OVERSEAS
FILIPINOS ACT OF 1995, AS AMENDED, FURTHER
IMPROVING THE STANDARD OF PROTECTION AND
PROMOTION OF THE WELFARE OF MIGRANT WORKERS,
THEIR FAMILIES AND OVERSEAS FILIPINOS IN DISTRESS,
AND FOR OTHER PURPOSES
Let us now go to Republic Act 10022 and its salient
provisions. This is a question and and answer drawn up by
Del Rosario (?). Now, there is also this particular area on
compulsory insurance which is mandated by 10022. The
recruiter or the recruitment company or manning agency is
required to make the principal for the principal to obtain
compulsory insurance for each overseas Filipino worker that
they hire and it must involve insurance covering accidental
death or natural death or total disability (?). And the
insurance must also cover repatriation cost so this is one of
the added features of 10022.
MEDICAL EXAMINATION
Now, there is there controversy of seamen overseas
contract workers that need to undergo medical
examination. Before you are deployed you have to take a
medical examination, the question is who pays for that
medical examination? It is already very clear under 10022
that if the principal or the recruitment agency requires a
5
specific medical doctor or medical institution to conduct the
medical examination then it must answer for the payment
but if what is required is just the specific medical
examination and they do not require a specific doctor or
medical institution/hospital then the OCW is free to look for
his own doctor and it is he who pays for the same.
Now, you may think that that is already well settled but it is
not. Why? Because for OCW’s that are already immigrants
they have another physical examination. What is that? The
physical examination required by the country of work (?) and
they have their designated physicians. You see when you
migrate to Canada, Australia, Norway or Finland they have
their own medical examination and they have their own
accredited doctors or medical institutions here in the
country. Di man mo pwede mag pangita kung binsang
kinsay Doctora lang dinha, di man nimo ma himo na. They
are strict kay basin ikaw pa lang mubayad ug binsang kinsay
doctora diha unya pa pirmahon nimo na cleared ka sa
medical exam. O diba? Now, these kinds of medical
examinations are not covered by 10022 why? Because you
are talking about the medical examination required by the
foreign principal and not the embassy and the embassy
cannot decide on that. The US embassy which has a specific
accredited doctor the POEA cannot subject them to these
provisions.
Section 23. A new Section 37-A. of Replublic Act No. 8042,
as amended, is hereby added to read as follows:
"SEC. 37-A. Compulsory Insurance Coverage for Agency-
Hired Workers.
- In addition to the performance bond to be filed by the
recruitment/manning agency under Section 10, each migrant
worker deployed by a recruitment/manning agency shall be
covered by a compulsory insurance policy which shall be
secured at no cost to the said worker. Such insurance policy
shall be effective for the duration of the migrant worker's
employment and shall cover, at the minimum:
"(a) Accidental death, with at least Fifteen thousand United
States dollars (US$10,000.00) survivor's benefit payable to
the migrant worker's beneficiaries;
"(c) Permanent total disablement, with at least Seven
thousand five hundred United States dollars (US$7,500.00)
disability benefit payable to the migrant worker. The
following disabilities shall be deemed permanent:
Page 5 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
total, complete loss of sight of both eyes; loss of two(2)
limbs at or above the ankles or wrists; permanent complete
paralysis of two (2) limbs; brain injury resulting to incurable
imbecility or insanity;
"(d) Repatriation cost of the worker when his/her
employment is terminated without any valid cause, including
the transport of his or her personal belongings. In case of
death, the insurance provider shall arrange and pay for the
repatriation or return of the worker's remains. The insurance
provider shall also render any assistance necessary in the
transport including, but not limited to, locating a local
licensed funeral home, mortuary or direct disposition facility
to prepare the body for transport, completing all
documentation, obtaining legal clearances, procuring
consular services, providing necessary casket or air transport
container, as well as transporting the remains including
retrieval from site of death and delivery to the receiving
funeral home;
"(e) Subsistence allowance benefit, with at least One
hundred United States dollars (US$100.00) Per month for a
maximum of six (6) months for a migrant worker who is
involved in a case or litigation for the protection of his/her
rights in the receiving country; "
(f) Money claims arising from employer's liability which may
be awarded or given to the worker in a judgment or
settlement of his or her case in the NLRC. The insurance
coverage for money claims shall be equivalent to at least
three (3) months for every year of the migrant worker's
employment contract; "In addition to the above coverage,
the insurance policy shall also include:
"(g) Compassionate visit. When a migrant worker is
hospitalized and has been confined for at least seven (7)
consecutive days, he shall be entitled to a compassionate
visit by one (1) family member or a requested individual.
The insurance company shall pay for the transportation cost
of the family member or requested individual to the major
airport closest to the place of hospitalization of the worker.
It is, however, the responsibility of the family member or
requested individual to meet all visa and travel document
requirements;
"(h) Medical evacuation. When an adequate medical facility
is not available proximate to the migrant worker, as
determined by the insurance company's physician and/or a
consulting physician, evacuation under appropriate medical
6
supervision by the mode of transport necessary shall be
undertaken by the insurance provider; and
"(i) Medical repatriation. When medically necessary as
determined by the attending physician, repatriation under
medical supervision to the migrant worker's residence shall
be undertaken by the insurance provider at such time that
the migrant worker is medically cleared for travel by
commercial carrier.
If the period to receive medical clearance to travel exceeds
fourteen (14) days from the date of discharge from the
hospital, an alternative appropriate mode of transportation,
such as air ambulance, may be arranged. Medical and non-
medical escorts may be provided when necessary. "Only
reputable private insurance companies duly registered with
the Insurance Commission (IC) , which are in existence and
operational for at least Five hundred million pesos
(P500,000,000.00) to be determined by the IC, and with a
current year certificate of authority shall be qualified to
provide for the worker's insurance coverage. Insurance
companies who have directors, partners, officers, employees
or agents with relatives, within the fourth civil degree of
consanguinity or affinity, who work or have interest in any of
the licensed recruitment/manning agencies or in any of the
government agencies involved in the overseas employment
program shall be disqualified from providing this workers'
insurance coverage.
"The recruitment/manning agency shall have the right to
choose from any of the qualified insurance providers the
company that will insure the migrant worker it will deploy.
After procuring such insurance policy, the
recruitment/manning agency shall provide an authenticated
copy thereof to the migrant worker. It shall then submit the
certificate of insurance coverage of the migrant worker to
POEA as a requirement for the issuance of an Overseas
Employment Certificate (OEC) to the migrant worker.
In the case of seafarers who are insured under policies
issued by foreign insurance companies, the POEA shall
accept certificates or other proofs of cover from
recruitment/manning agencies: Provided, That the minimum
coverage under sub-paragraphs (a) to (i) are included
therein.
ILLEGAL RECRUITMENT
So alright? Now, 10022 has expanded illegal recruitment.
You know there are two kinds of illegal recruitment. If there
is anything that you should study very well here it should be
Page 6 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
illegal recruitment. Why? Because that is the one that is
usually asked in the bar examination. High profile man dyud
nang illegal recruitment. Now, the definition of illegal
recruitment is still here. The basic definition it is in the law,
38 but it has been expanded by 8042 and it has been further
expanded by 10022. 10022 now makes it illegal recruitment
even if you are a licensed recruiter before since your license
is location specific you will be allowed to recruit within which
your license allows you to do so. If within Pasay city so you
put up an office in Pasay and outside of Pasay City you
cannot recruit if you do, that is only a violation of your
license but now under 10022 that is illegal recruitment so
you can be subjected to criminal action.
Now, two kinds of illegal recruitment ordinary illegal
recruitment and illegal recruitment that constitutes
economic sabotage —— and therefore that has the
maximum penalty of life imprisonment. Now, when is illegal
recruitment constituting economic sabotage it happens when
you recruit three or more or when you recruit only one but
in conspiracy with three or more persons. (Large scale and
syndicate) If your target is 6 3 (?) that is three or more,
then it is already economic sabotage. If there are three of
you who are working in tandem to recruit just one that is
also economic sabotage and therefore carries the penalty of
life imprisonment. Now, this is the basis on which you will
gage the kind of illegal recruitment.
JURISDICTION AS TO CRIMINAL AND
ADMINISTRATIVE CASES
Remember it is the regular courts that has jurisdiction over
criminal cases as to the administrative aspect the POEA no
longer has jurisdiction it is the labor arbiter. Where? As to
the residence of the victim or the one the labor arbiter has
jurisdiction over the place that has any of the elements of
illegal recruitment occurred. Pa pirma ka sa contrata didto sa
Manila pwede ka didto mu file sa labor arbiter the choice is
always to the victim.
ILLEGAL RECRUITMENT AND PROHIBITED ACTS
Section 5, perting taa-sa ni. Section 5 of RA 10022 amended
section 6 of RA 8042.
Section 5. Section 6 of Republic Act No. 8042, as amended,
is hereby amended to read as follows:
"SEC. 6. Definition. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring
7
workers and includes referring, contract services, promising
or advertising for employment abroad, whether for profit or
not, when undertaken by non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall likewise
include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or
holder of authority:
"(a) To charge or accept directly or indirectly any amount
greater than that specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to
make a worker pay or acknowledge any amount greater
than that actually received by him as a loan or advance;
"(b) To furnish or publish any false notice or information or
document in relation to recruitment or employment;
"(c) To give any false notice, testimony, information or
document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor
Code, or for the purpose of documenting hired workers with
the POEA, which include the act of reprocessing workers
through a job order that pertains to nonexistent work, work
different from the actual overseas work, or work with a
different employer whether registered or not with the POEA;
"(d) To include or attempt to induce a worker already
employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a worker
from oppressive terms and conditions of employment;
"(e) To influence or attempt to influence any person or
entity not to employ any worker who has not applied for
employment through his agency or who has formed, joined
or supported, or has contacted or is supported by any union
or workers' organization;
"(f) To engage in the recruitment or placement of workers in
jobs harmful to public health or morality or to the dignity of
the Republic of the Philippines;
"(h) To fail to submit reports on the status of employment,
placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary
of Labor and Employment;
Page 7 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
"(i) To substitute or alter to the prejudice of the worker,
employment contracts approved and verified by the
Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of
the Department of Labor and Employment;
"(j) For an officer or agent of a recruitment or placement
agency to become an officer or member of the Board of any
corporation engaged in travel agency or to be engaged
directly or indirectly in the management of travel agency;
"(k) To withhold or deny travel documents from applicant
workers before departure for monetary or financial
considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing rules
and regulations;
"(l) Failure to actually deploy a contracted worker without
valid reason as determined by the Department of Labor and
Employment;
"(m) Failure to reimburse expenses incurred by the worker
in connection with his documentation and processing for
purposes of deployment, in cases where the deployment
does not actually take place without the worker's fault.
Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving
economic sabotage; and
"(n) To allow a non-Filipino citizen to head or manage a
licensed recruitment/manning agency.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or
more persons individually or as a group.
"In addition to the acts enumerated above, it shall also be
unlawful for any person or entity to commit the following
prohibited acts:
"(1) Grant a loan to an overseas Filipino worker with interest
exceeding eight percent (8%) per annum, which will be used
for payment of legal and allowable placement fees and make
the migrant worker issue, either personally or through a
guarantor or accommodation party, postdated checks in
relation to the said loan;
8
"(2) Impose a compulsory and exclusive arrangement
whereby an overseas Filipino worker is required to avail of a
loan only from specifically designated institutions, entities or
persons;
"(3) Refuse to condone or renegotiate a loan incurred by an
overseas Filipino worker after the latter's employment
contract has been prematurely terminated through no fault
of his or her own;
"(4) Impose a compulsory and exclusive arrangement
whereby an overseas Filipino worker is required to undergo
health examinations only from specifically designated
medical clinics, institutions, entities or persons, except in the
case of a seafarer whose medical examination cost is
shouldered by the principal/shipowner;
"(5) Impose a compulsory and exclusive arrangement
whereby an overseas Filipino worker is required to undergo
training, seminar, instruction or schooling of any kind only
from specifically designated institutions, entities or persons,
except fpr recommendatory trainings mandated by
principals/shipowners where the latter shoulder the cost of
such trainings;
"(6) For a suspended recruitment/manning agency to
engage in any kind of recruitment activity including the
processing of pending workers' applications; and
"(7) For a recruitment/manning agency or a foreign
principal/employer to pass on the overseas Filipino worker or
deduct from his or her salary the payment of the cost of
insurance fees, premium or other insurance related charges,
as provided under the compulsory worker's insurance
coverage.
"The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical
persons, the officers having ownership, control,
management or direction of their business who are
responsible for the commission of the offense and the
responsible employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the
prohibited acts under this section, the Secretary of Labor
and Employment, the POEA Administrator or their duly
authorized representatives, or any aggrieved person may
initiate the corresponding criminal action with the
appropriate office. For this purpose, the affidavits and
testimonies of operatives or personnel from the Department
of Labor and Employment, POEA and other law enforcement
Page 8 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
agencies who witnessed the acts constituting the offense
shall be sufficient to prosecute the accused.
"In the prosecution of offenses punishable under this
section, the public prosecutors of the Department of Justice
shall collaborate with the anti-illegal recruitment branch of
the POEA and, in certain cases, allow the POEA lawyers to
take the lead in the prosecution. The POEA lawyers who act
as prosecutors in such cases shall be entitled to receive
additional allowances as may be determined by the POEA
Administrator.
"The filing of an offense punishable under this Act shall be
without prejudice to the filing of cases punishable under
other existing laws, rules or regulations."1avvp
"Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or
more persons individually or as a group.
So there are also aggravating circumstances. If the one
committing it is a government official, it is aggravating.
Foreigner? aggravating which merits the maximum penalty.
So how about letter h? "(h) To fail to submit reports on the
status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures
and such other matters or information as may be required
by the Secretary of Labor and Employment.” That is illegal
recruitment. O, tan-awa na ha, pagka-ta-asa sa definition sa
illegal recruitment.
‘It shall likewise include the following acts, whether
committed by any person, whether a non-licensee,
non-holder, licensee or holder of authority’. So you
see you can commit, before you cannot commit once you
have a license but now even if you have a license you can
commit.’
TWO KINDS OF ILLEGAL RECRUITMENT
1.) Ordinary or Simple illegal recruitment: Simple illegal
recruitment or illegal recruitment covers any recruitment
activity by non-licenses or non-holders of authority. It
includes the commission of prohibited practices by licenses
or holders of authority.
2.) Illegal recruitment considered as an offense involving
economic sabotage which can be further classified into two:
9
a.) Illegal recruitment committed by a syndicate-
when it is committed by a group of three (3) or more
persons conspiring or confederating with one another.
b.) Illegal recruitment committed in a large scale-
committed against three (3) or more persons.
LEGAL ASSISTANCE FUND
Now another addition is this so called legal assistance fund.
If you are an OCW and it is in a place where there is a
pronounced presence of Filipino overseas workers like Hong
Kong, Taiwan all those places. The Filipino consulate or
embassy must be open 24 hours a day everyday. Why? So
that any OCW in trouble can have access to the official office
and that is now a requirement. Again, if you are arrested
and brought to a jail you report to the embassy and the
embassy is obliged to procure a local lawyer to assist you
not just a lawyer from the embassy. Who will answer for the
legal fees of the lawyer? The legal assistance fund as
provided under RA 10022.
OVERSEAS WELFARE FUND
Now, if there is an emergency man made or natural. For
instance an 8.3 earthquake unya nag ka tidal wave unya naa
man dyud Filipino didto gusto na siya mapa uli, wala man
siyay kwarta now it is the overseas welfare fund that must
provide him with money. These are the provisions ha
MANDATORY REPATRIATION
Now, if you are a minor and you are discovered there
dancing in Tokyo, an entertainer the law says mandatory
repatriation. If you are a minor found in these hospitality
industries abroad, mandatory repatriation. It is the fund that
will shoulder your transportation.
Section 8. The first paragraph of Section 13 of Republic Act
No. 8042, as amended is hereby amended to read as
follows:
"SEC. 13. Free Legal Assistance; Preferential Entitlement
Under the Witness Protection Program. - A mechanism for
free legal assistance for victims of illegal recruitment shall be
established in the anti-illegal recruitment branch of the POEA
including its regional offices. Such mechanism shall include
coordination and cooperation with the Department of
Justice, the Integrated Bar of the Philippines, and other
nongovernmental organizations and volunteer groups."
Page 9 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
Section 9. Section 16 of Republic Act No. 8042, as amended,
is hereby amended to read as follows: "SEC. 16. Mandatory
Repatriation of Underage Migrant Workers. - Upon discovery
or being informed of the presence of migrant workers whose
ages fall below the minimum age requirement for overseas
deployment, the responsible officers in the foreign service
shall without delay repatriate said workers and advise the
Department of Foreign Affairs through the fastest means of
communication available of such discovery and other
relevant information. The license of a recruitment/manning
agency which recruited or deployed an underage migrant
worker shall be automatically revoked and shall be imposed
a fine of not less than Five hundred thousand pesos (Php
500,000.00) but not more than One million pesos (Php
1,000,000.00). All fees pertinent to the processing of papers
or documents in the recruitment or deployment shall be
refunded in full by the responsible recruitment/manning
agency, without need of notice, to the underage migrant
worker or to his parents or guardian. The refund shall be
independent of and in addition to the indemnification for the
damages sustained by the underage migrant worker. The
refund shall be paid within thirty (30) days from the date of
the mandatory repatriation as provided for in this Act."
Section 18. Section 25 of Republic Act No. 8042, as
amended, is hereby amended to read as follows:
"SEC. 25. Legal Assistance Fund. - There is hereby
established a legal assistance fund for migrant workers,
hereinafter referred to as the Legal Assistance Fund, in the
amount of one hundred million pesos (P100,000,000.00) to
be constituted from the following sources. "Fifty million
pesos (50,000,000.00) from the Contingency Fund of the
President; "Thirty million pesos (30,000,000.00) from the
Contingency Fund of the President Social Fund; "Twenty
million pesos (20,000,000.00) from the Welfare Fund for
Overseas Workers established under Letter of Instructions
No. 537 as amended by Presidential Decree Nos. 1694 and
1809;
Section 19. Section 26 of Republic Act No. 8042, as
amended, is hereby amended to read as follows:
"SEC. 26. Uses of the Legal Assistance Fund. - The Legal
Assistance Fund created under the preceding section shall
be used exclusively6 to provide legal services to migrant
workers and overseas Filipinos in distress in accordance with
the guidelines, criteria and procedures promulgated in
accordance with Section 24 ( a ) herof. The expenditures to
10
be charged against the Fund shall include the fees for the
foreign lawyers to be hired by the Legal Assistant for Migrant
Workers Affairs to represent migrant workers facing charges
or in filing cases against erring or abusive employers abroad,
bail bonds to secure the temporary releases and other
litigation expenses: Provided, That at the end of every year,
the Department of Foreign Affairs shall include in its report
to Congress, as provided for under Section 33 of this Act,
the status of the Legal Assistance Fund, including the
expenditures from the said fund duly audited by the
Commission on Audit (COA): Provided, further, That the
hiring of foreign legal counsels, when circumstances warrant
urgent action, shall be exempt from the coverage of
Republic Act No. 9184 or the Government Procurement Act.
POEA’S POWER TO BAR DEPLOYMENT
Now, what are these places where deployment is forbidden.
Does the POEA have the authority to bar deployment
because the other right that is put against that right of the
POEA is the right to travel isn’t it? Don’t you have the
freedom to assume the risks and go to Afghanistan or Iraq
of where the ISIS is operating in Syria. Now if you are
prohibited and you go there mandatory expatriation. But
then how do they land there? Initially legitimate man ilang
pag-adto sa Jedda or sa Kuwait. Pa abot sa Kuwait naa man
recruiter didto muingon na nay trabaho didto sa Afghanistan
o sukol ka? Mu drive lang ka pa adto sa Afghanistan mu
convoy mo, Pilipino pa imo mu sukol dyud na. mao na nay
problema ana they have to be rescued because that is
mandated by 10022. The SC has upheld the power of the
POEA to suspend deployment in so called critical places even
when there is no man made or natural calamities. What are
these? Places where there are so many incidents of human
trafficking. In this case, the POEA will suspend deployment.
You know the ones who challenged that are the manning
agencies before the SC and the court dismissed. The SC said
‘you the manning agency, you are not the real party
in interest, agents lang mo dapat mu file ana are
those OCW’s. You cannot therefore question the
prohibition for deployment because it is not your right to
travel that is jeopardized agente lang na sa travel data kato
lang ang mu travel. Diba? Di mana correct, remedial law
lang ang ni igo.
Section 4. Section 5 of Republic Act No. 8042, as amended,
is hereby amended to read as follows:
Page 10 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
"SEC. 5. Termination or Ban on Deployment. -
Notwithstanding the provisions of Section 4 hereof, in
pursuit of the national interest or when public welfare so
requires, the POEA Governing Board, after consultation with
the Department of Foreign Affairs, may, at any time,
terminate or impose a ban on the deployment of migrant
workers."
COMPROMISE AGREEMENT
So there is in the question and answer touching on the
implementation of the compromise agreement because a
compromise agreement of money claims under 10022 can
no longer be open-ended there is a definite day in other
words the compromise agreement has a reglementary
period. I don’t think it can be longer than one month
because in the discussion of the bill in Congress there were
so many testimonies as to empty victories of OCW’s. They
already won, there was already a compromise and the
recruitment agency will say they have no money and they
will enter into a compromise but the agency will not pay, the
agreement did not materialize that cannot be anymore there
is now a time frame and it must be complied with. So alright
we are ready for examination.
Section 7. Section 10 of Republic Act No. 8042, as amended,
is hereby amended to read as follows:
"SEC. 10. Money Claims. - Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral,
exemplary and other forms of damage. Consistent with this
mandate, the NLRC shall endeavor to update and keep
abreast with the developments in the global services
industry. "The liability of the principal/employer and the
recruitment/placement agency for any and all claims under
this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and
shall be a condition precedent for its approval. The
performance bond to de filed by the recruitment/placement
agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily
11
liable with the corporation or partnership for the aforesaid
claims and damages. "Such liabilities shall continue during
the entire period or duration of the employment contract
and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said
contract.
"Any compromise/amicable settlement or voluntary
agreement on money claims inclusive of damages under this
section shall be paid within thirty (30) days from approval of
the settlement by the appropriate authority.
"In case of termination of overseas employment without
just, valid or authorized cause as defined by law or contract,
or any unauthorized deductions from the migrant worker's
salary, the worker shall be entitled to the full reimbursement
if his placement fee and the deductions made with interest
at twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever
is less. "In case of a final and executory judgement against a
foreign employer/principal, it shall be automatically
disqualified, without further proceedings, from participating
in the Philippine Overseas Employment Program and from
recruiting and hiring Filipino workers until and unless it fully
satisfies the judgement award. "Noncompliance with the
mandatory periods for resolutions of case provided under
this section shall subject the responsible officials to any or all
of the following penalties:
"(a) The salary of any such official who fails to render his
decision or resolution within the prescribed period shall be,
or caused to be, withheld until the said official complies
therewith;
"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold
any appointive public office for five (5) years. "Provided,
however, That the penalties herein provided shall be without
prejudice to any liability which any such official may have
incurred under other existing laws or rules and regulations
as a consequence of violating the provisions of this
paragraph."
EMPLOYMENT OF NON-RESIDENT ALIENS
We might as well add Title II employment of non-resident
aliens. In other words foreigners. If you have a visa in the
Philippines as a permanent resident like Father Malik you do
not need a work permit. The work permit is separate
Page 11 of 12
 LABOR STANDARDS 2015 12
FROM THE LECTURES OF FR. A.L. NAZARENO

and distinct from a working visa that was the contention

decided in the case of Cone vs Secretary. Who is Cone he
is a basketball coach and when he first came to the
Philippines the PBA questioned his coming in and then they
brought out the fact that he did not have a working permit.
His defense was I have a working visa Mr. Uytengsu of
Alaska procured a working visa for me therefore I can work.

The SC said there is a difference. The working visa is your

right to work but you have to have a permit to work and it
is employer specific. You cannot transfer from one employer
to another your work permit is as good as the employer
written there or specified there you cannot transfer. Cone is
the winningest coach in basketball, way Pilipino maka pildi
ana. Now, in order to get this working permit there must be
a certification that no Filipino is available for this particular
job. How do you certify to that?

This is the equivalent to the US the labor certification visa.

Mag advertise sila na aning klase lang ang specification of
worker nga gina pangita and they cannot find a successful
applicant then they will go the immigration and say we
certify that there is no willing taker and therefore the
foreigner is allowed. And when the foreigner comes here he
must train to Filipinos who will later on pick up his
certification. That is the system for employment of non-
resident aliens. But you know there are so many of them I
don’t think it can be enforced there are so many non-
resident aliens that are working in jobs where Filipinos can
work. Mu-adto lang gan ka diha sa Magsaysay oh daghan
kayo ug mga tao na dili kabalo mu english o tagalog, bisaya.
O unya naga trabaho man na sila diha wa na ka kamao kung
unsa man na sila Koreano ba Intsik o unsay man kay dili
man pud mu sulti nag sige na lang sila tudlo2x sa ilang mga
assistant diha. Do you think they have working permits.
Okay, so our exam will be up to Article 42.

Page 12 of 12
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
DATE NOT SPECIFIED MB & LKD
TERMINATION LAW
One day ago, yesterday, a new implementing rules of Book
VI of the Labor Code on termination came into effect. So,
here it is, fresh from the oven, Department Order No.
147-15, series of 2015, eleven pages. It was issued by
Secretary Rosalinda Dimapilis-Baldoz, Secretary of Labor.
When was it issued? September 7, 2015. It was published
for 15 days in the newspaper of general circulation, then it
became effective.
I would like to point out to you, the rules and regulations of
the Labor Code says, the department of labor and
employment and other government agencies charged with
the administration and enforcement of this Code or any of its
parts shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become
effective 15 days from the announcement of their adoption
in a newspaper of general circulation. Who promulgates the
implementing rules of this law? The law says it is the
Department of Labor and Employment. Who in the
Department of Labor and Employment? It should be the
Secretary. That is why Rosalinda Dimapilis-Baldoz, the
secretary signed it. Somebody has to assume responsibility,
especially if it is the executive branch of government. In
your political law, you know that, eventually, issuances like
this is the issuance of the President. Why? Because the
Secretary of Labor is just an alter ego of the President.
There are no other executives, there can only be one
executive, and that is the President. You see, I will give you
a copy of this, two (2) copies aron dili mo mag-away, [father
distributes hand-outs].
Alright, we are taking up termination, Book VI. I am willing
to bet that when you become a lawyer, your first case in
labor would be termination because that is 90% of the
cases. So, my suggestion to you is to know your termination
law by the back of your hand, that is if you have some
feeling for the marginalized and the people who crawl on the
streets. But, if you are going to be gravitating in the
stratosphere of corporate transactions, probably, you can
afford not to know termination law, but now and then, you
will bump into labor law. Just know your termination law.
During the bar examination, termination law is only a third
priority. First priority is labor relations, that is 60% of the
questions in the bar examination, then labor standards, then
termination. When it comes to practice, baliktad, termination
is the priority.
1
Now, since I began teaching, in 1984, many of you will claim
"I was not yet born in 1984", good for you, you are still
riding by the sunrise and I am already by the western bay,
going to the sunset. I was saying that, unlike the general
characterizations before that an unlawful or illegal
termination is a violation of due process, it cannot be
violation of due process. The due process clause of the
constitution, it is Section 1, Article III of the Constitution, no
person shall be deprived of life, liberty, and property,
without due process of law nor shall any person be denied of
the equal protection clause. That is your right vis-a-vis the
state, is it not?
These rights under the Bill of Rights of the Constitution is
your right vis-a-vis the State. When you are terminated in
private employment, the one who terminates you is not the
state, it is your employer, so, how can it be in violation of
due process? All the decisions of the Supreme Court keep on
saying, violation of due process, constitutional rights,
security of tenure etc. They keep repeating that. Finally, in
the year 2000, en banc decision of Serrano vs NLRC,
the Supreme Court finally said, it is not a violation of
due process. Errors like these has a tendency to persist, so
much so, that even after the pronouncement of the Supreme
Court en banc, the Court still continues to say, violation of
due process, it is not, it is just a violation of the
statutory requirement in the Labor Code. The Labor
Code requires that before you can terminate a
regular employee, there must be substantive cause,
the same as due process, substantive cause, there
must be cause. Second, there must be a procedure.
What is that? It is provided in the statute and if you violate
that, then the exercise of the employer of that prerogative of
terminating you is wrongful and therefore can be a cause of
action.
Now, the most important feature of this new implementing
rule is section 10, it says, condition precedent to
compulsory arbitration. The proceeding for illegal
termination is compulsory arbitration, you go to the Labor
Arbiter. It says:
Section 10. Condition Precedent to Compulsory
Arbitration. No Labor Arbiter shall take cognizance of the
complaint for illegal dismissal unless there is a referral from
the Desk Officer pursuant to the Implementing Rules and
Regulations of Republic Act No. 10396.
The Congress has subsequently decreed the so-called
provincial labor offices. Aside from the Regional Director
of Labor Office, there are now, provincial labor
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
offices. There are so-called desk officers. Kung mag
complain gani ka kay gipahawa ka, mu adto ka niya, then he
will examine, if you are an employee that is illegally
terminated, ipatawag niya ang employer, and then there
might be compromise. If you do not pass through the
desk officer, the desk officer recommends or
indorses, you cannot file a complaint for illegal
dismissal, that is now the procedure. Before you can go
straight to the Labor Arbiter, fill in the blanks ra ana ang
form, the complaint is already an affidavit, who will notarize
it, the Labor Arbiter will notarize it unya illegal dismissal na,
attached to it are the money claims, box-box ra na,
thirteenth month pay, overtime pay, wa ka kabay-ri sa
imung double time, check ra na, check, check, check. Why is
this so? Why is there a change in procedure? Because the
Labor Arbiter Office is crammed with so many illegal
dismissal cases. Technically speaking, it is a contractual
violation, one of the parties is a worker who is not in equal
footing with the employer.
In actual characterization, these poor workers may make
the government his collection agent. He has more right to
make the government his collection agent because he is
deprived, he is marginalized. Kung pangutan-on tika kung
naka agi ka anang mga mossimo, mga baligya diha sa
pintura shop. Mamaligya anang door-to-door, unsa man na
ilang buhaton, they practically bring down next to zero their
collection cost everyday, why? Because before you are given
products to sell, you will be required to open an account in
the bank, checking account, then they will make you sign a
trust receipts agreement, and the proceeds are only yours
for physical custody, you have to bring it to them, if you do
not turn over the proceeds, what will happen? Estafa.
Kanang estafa, bouncing checks na kay, you signed post
dated checks and they have it in their possession, and what
are they doing in effect? They are making the government
their collection agents. Now, who has a better right to make
the government a collection agency? The employee. You
go to social justice, you go to the shibboleth of the 1987
constitution. It says, those who have less in life, should have
more in law. That is from the social justice point of view.
When you consider the reality now, what is the reality? The
reality now is that, the Supreme Court is moving away
from espousing security of tenure and I am giving you
the paper that proves my point because Serrano vs NLRC,
now says it is not violation of due process and after its
pronouncement, it puts down reasons why is it so, the
Supreme Court now says, issued another decision in 2004,
Agabon vs NLRC, another en banc ruling, penned by
Justice Ynares-Santiago, the Supreme Court now says,
2
four possibilities, four situations, an employee is
dismissed and there is just and authorized cause plus
procedural requirements that are observed, the dismissal is
valid. That is the first situation. Second situation, there
is no just or authorized cause and procedural requirements
are observed, the dismissal is illegal. Third situation, there
is no just or authorized cause and no procedural
requirements are observed, the dismissal is also illegal. The
fourth situation is, there is just or authorized cause but
the due process requirement of the Labor Code is not
observed, the dismissal is valid, but the employer for
violating the procedural requirements is fined. If there is no
just cause, it is just 30,000, if there is no procedural
requirement for the authorized cause, the fine is
higher, 50,000, because in authorized causes, when
you are separated, you are separated with benefits.
So, the amount of the fine for authorized causes is
fixed by Jaka Food Processing Corporation vs COA, en
banc ruling, a 2005 case, after the Agabon ruling in
2004. I will give you all the notes and its citations.
Now, there comes the ruling in 2009, Perez and Doria vs
PTNT, another en banc ruling, penned by Chief
Justice Corona before he was impeached. You know
before, here the Labor Code says, the employee who is
sought to be dismissed must be given ample opportunity to
be heard and to adduce evidence for and in his behalf and
together with the help of the counsel he so wishes or some
assistant from somebody else. That is what the red letter of
the law says. The implementing regulations say, that he
must be given a hearing or investigation. In the Labor Code,
it says ample opportunity to be heard while the
implementing rule says hearing or investigation. So, which is
correct? Is the employer obliged to grant a hearing or is it
some other form of ample opportunity akin to due process?
This was decided by Corona in Perez and Doria vs PTNT.
These are the principles he laid down, 2009 case, after the
Labor Code was already implemented for 30 years, since
November 1, 1974, kron pa nigawas, the Supreme Court
says, the following are the guiding principles in
connection with the hearing requirement in dismissal
cases: (1) ample opportunity to be heard means any
meaningful opportunity (verbal or written) given to the
employee to answer the charges against him and submit
evidence in support of his defense, whether in a hearing,
conference or some other fair, just and reasonable way.
Kung ikaw personal manager ka sa kumpanya, buhatan ka
ug suwat, nakasala ka, you are hereby directed to explain in
writing why you should not be dismissed for the following
offense written in the disciplinary book of the company, then
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
you are given 72 hours to submit your reply, that is ample
opportunity already, you do not need an investigation, (2) a
formal hearing or conference becomes mandatory only when
requested by the employee in writing or substantial
evidentiary disputes exist or a company rule or practice
requires it, or when similar circumstances justify it, and
finally (3) the ample opportunity to be heard standard in the
Labor Code prevails over the hearing or conference
requirement in the implementing rules and regulations. So,
alright, that is the major change brought about by this
ruling.
Now, side by side by this, the Supreme Court has begun
cutting down from the generosity of the Court. You know, in
1974, right after the Labor Code came into effect, it was
martial law, and the main ponente was the guy by the name
of Justice Enrique Fernando, he was magna cum laude in
UP, but he did not place in the Bar Examination, he always
cite so many references from the United States in his
decisions where he took up his graduate studies, together
with the philosophy of Marcos in bringing about Martial Law,
he concocted what he called compassionate justice, so,
he is fond of holding dogma, theories, legal constitution that
justice for the workingman should not be according
to reason or according to law but should be
according to the compassionate heart, not secundum
rationem but secundum caritatem, which gave birth
to the notion of compassionate justice. Pag release ng
order ng court, so you are legally dismissed, but then the
Labor Arbiter will say, in the name of compassion, we will
award him with financial assistance, nasibak siya sa trabaho,
kalu-oy sad, hatagan na lang siya ug financial assistance,
many decisions like that quoting Justice Fernando, but the
Supreme Court put an end to that in 2010 wherein
the award of financial assistance to workers that are
dismissed for cause were terminated. The Labor Arbiter
who awarded financial assistance to an employee who was
terminated for authorized cause was again censured. You go
over it because this is a drastic change in paradigm.
The notes I gave you cover basically the grounds for
termination that are additional to what is here in the Labor
Code. If you are dismissed because of a just cause,
that means it is a cause that you are responsible for.
If you are terminated, then you are terminated for an
authorized cause, something which you are not
responsible for, but because there is a major change in
the workplace, such as the introduction of labor machineries
makes you redundant, so you are terminated. You are not
dismissed. When you say terminated, wala ka'y sala. The
Supreme Court mixed those two terminologies – termination
3
and dismissal. But, in the US, termination and dismissal are
separate and distinct. Pag na terminate ka, wala ka'y sala,
pag dismissed gani, sad-an ka, tapos pag dismissed wala
ka'y benefits, termination na'ay benefits. The procedural
requirements for dismissal have all been reviewed. These
new implementing rules, Department Order 147-15, this is
already a very good syllabus for just and authorized cause
and if you follow it correctly and you read the cases cited in
the footnotes, as it provides the requisites for dismissal of
serious disobedience, serious misconduct, it is all here and if
you read then you will have very good background on
termination law.
There are other just and authorized causes enumerated
other than what was provided in the Labor Code such as the
issue on exogamy which refers to tribal rules on
marriage. The corporation says, “if two of you get married,
then one of you must resign, the both of you cannot stay”, is
that valid? There is a decided case. The company can also
say, as a rule, that if you marry an employee of a
competitor, then you have to resign because there is a
danger that might leaked out industrial skills, is that valid?
There is also a decided case. That is not in the Labor Code.
Again, if ABS-CBN has a rule, you are an announcer on the
radio, once you file your certificate of candidacy, [JOKE
TIME: I will never forget my English Professor, emphasis on
the first syllable “brotha” *Father jokes about the
pronunciation of “candidacy”* You go through horrible and
tortious oral english courses and you experience being the
most insignificant creature, then you are proud of your
english especially when you speak before a judge *Father
also jokes about the pronunciation of “flammable”*].
The different requisites for the different grounds are all
marked in the notes I gave you. When can you have serious
disobedience? When can you have serious misconduct?
When do you have habitual negligence? All grounds are
there. When is there redundancy? When is there lay-off, etc?
It is all here. All you have to do is go through this and read
the latest cases. Naa pa ko'y 2014 nga notes diri, only a few
pages, read that.
There is a case that keeps on coming back which is an
example of serious misconduct, it is a case about a teacher
who was dismissed for an authorized cause, the teacher
having an affair with a high school student, fourteen years
her junior, when she was investigated, the school said this is
a bad example and so the teacher was dismissed. The
teacher filed an illegal dismissal case, the school was upheld
by the Labor Arbiter. The NLRC affirmed the decision of the
Labor Arbiter. Finally, the case went to the Supreme Court.
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
The Supreme Court says, this is not a question of serious
misconduct, but this is a question of somebody falling in love
and they got married, they did not do anything improper in
the school. Then, the Supreme Court quotes the philosopher
Pascal, “the heart has its reasons, which reason itself does
not know”. But, pag-abot sa BAR examination, balihon nila,
this time the professor is a male and not a female, ang
teacher nga lalaki, iyang giminyo-an ang iyang studyante
nga babae, fourteen years his junior. Sa previous case,
babae man ang teacher, what if lalaki ang teacher? You
think the ruling is the same? Bisan pa mag ampo ka, dili
gihapon ka ma check ana kung wala ka nagbasa sa facts.
Lahi na man ang facts, basa-basa pud sa facts. Lalaki na
man ang teacher, dili na man babae. I think you cannot
apply that same doctrine of Pascal, since the facts are
already different, take note, gender is important. So, you go
over, I tell you, if you go over these implementing rules, if
you go over the requisites and these cases, you will know
your termination and dismissal law under the Labor Code.
You go over my notes and you have a complete grasp of
termination.
If you are hired by a high-tech company, one of the
conditions is that if you resign in the company, you cannot
join the competitor company or you cannot start a business
which is similar to or in competition with the company you
previously worked for a given time period, is that valid? It is
not valid. There is also a decided case. How about expenses
for training? The employer trains you, spends for your
training, and then there is an agreement that for every year
of training, you should stay with the company that has
trained you for certain years, is that valid? We ask the
government, and yet the government has no power to
enforce this. You know well, that it is grossly violated. The
government may say that two-thirds (2/3) of the graduates
of Philippine Science have not complied with their
requirement that they will take up STEM courses after they
finish in Philippine Science, STEM means, Science,
Technology, Engineering or Math. What they do is that they
leave the Philippines, they go out, and they do not come
back, and they sign with their parents as surety because
they are minors when they sign the agreement. Also, if you
are a PMA, you must serve the country three years, unya na
train na ka pagka pilot, gamay ra man na ang training, tapos
pa lupad na ka ug eroplano, if you have a basic salary of
150,000, nganong mudawat ra man ka ug suweldo nga
20,000 lang ang buwan, ma patay pa ka sa Abu Sayyaf, is
that valid? The ruling of the Court is that there is a
prohibition in the Constitution against involuntary servitude.
That is the rule, there is always a surety component. The
moment there is a surety component, then it is lifted
4
from the Labor Code and would fall on the
jurisdiction of the regular courts and the agreements
there shall be considered as liquidated damages.
REALITY SHIFTS ON SECURITY OF TENURE
There is a so-called comparative paradigm shift as to
security of tenure. The first reality is this typical change from
the so-called frictional unemployment to what is now called
by the economists as structural unemployment. This classical
frictional unemployment is accepted by economics as
unintelligible simply because the economy is always
changing. The example I would like to cite is the regular
receptacles used to cook rice. Before Magellan came into the
Philippines, there were already earthen pots that was used
to cook rice. This went on for years until the brick iron
cauldron was invented. What happened to the clay pot
makers? They were aborted, but it was not amenable to
them to adopt an income workers with other country. But,
there was a shift from cauldron to let us say, aluminum
receptacles that is used to cook rice in an electric stove.
Aluminum is being used to undergo a complicated process.
Now, once the aluminum pot is replaced by a rice cooker, at
any one point therefore, there must be a group of people
that are out of work simply because the economy is
evolving. So, why does the constitution provide that the
state must secure the right of all the people to be employed
when there is frictional unemployment. Even from that
school alone, you cannot achieve 100% full employment.
There will always be unemployment. Now, you take the shift
in technology, all professions across the board now shift, ni
adtong architect ka, drawing drawing ka, kron wala na,
auto-CAD na, you can now study computer-aided design.
Kung accountant ka, tag-as kaayo nga papel imung gamiton,
mga trial balances nimu, wala na 'yan, naa na'y mga
programs for that and that cuts across everything. You can
see in the new rules now that you can file your complaint
with the Labor Arbiter. Take note, they allow it now in these
new rules. It seems that the phase at which technology is
now changing, the nature of work makes it quite difficult to
espouse security of tenure. If you want, I will put here a
reference. I do not know if you are familiar with N. Gregory
Mankiw. He is one of the youngest who became PhD in
Harvard, but he flunked law school. He did not made it in
the 1st semester in law school, hagbong siya, na discourage
siya, wala na siya nagpadayon, he studied economics. His
textbook is being used in over 200 colleges and universities
in the US.
Now, the other underlining reality is the nature of work as it
has changed. Work can now be broken up, assembled or
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
disassembled, the basis of which can be done in the
different parts of the world. Work now knows no boundaries,
no nationality, no ethnic loyalty. Work tends to go where the
workers have the highest productivity, efficiency, and
quality. That work always moves its way around the globe is
not an exception but the rule that work moves is not the
result of evil intentions of men and women for economics is
not a morality play, it is not a happy story in which virtue is
rewarded and vice is punished. The market economy is a
system for organizing activity, a pretty good system most of
the time though not always, with special moral significance.
The rich don't necessarily deserve their wealth and the poor
certainly do not deserve their poverty. Nonetheless, they
accept the system with considerable inequality because
systems without any inequality do not work. Cuba does not
work, Sweden works. Bisag mu ingon pa 'mo social justice,
equal opportunity, tan-awa ra gud nang lumba sa dagan,
mag linya 'mo, pareha 'mo ug starting point, equal
opportunity man, pero ang result ana di man gyud equal,
naa man gyud mu labaw, kay ngano man? Ang uban taas ug
tiil, ang uban mugbo ug tiil, ang uban paspas mo dagan, dali
ra ma ka abot sa finish line, ang uban hatagan ng Ginoo ug
grasya nga kusog musikad, di man gyud mahitabo nga ma
equal, so you see, equal opportunity, but the result is never
equal. So, forget about demanding equality. You can only
demand equal starting line, but you cannot enforce equality.
That is why they say, kung pobre ka, and you do not have
talent, wala gyud ka ma abot ana kung di ka kabalo mu
diskarte, pero kung naa ka'y utok, naa ka'y abilidad, ibutang
ka didto, frustrated ka, mahimo kang revolutionary, mao
nang prisohon ka, dili man ka magsilbi. That is a basic
reality. I would like to tell you that production, creation of
goods and services is as much a difficult challenge as
distribution, as providing for those who need. That is a
need, to provide for those who need, you have to do that
because some people could not take care of themselves. So,
there must be an existing system, but if you forget the
imaginary pie, the increasing productivity, then you will
suffer the constraints of those who are feeble-minded just
like in communist countries. Mao nang gi ingon nila, if by 20,
you are not a communist, you do not have a heart. If by 40,
you are still a communist, you do not have brains.
The third point of reality is that security of tenure has not
found any visible or viable hope in any post-industrial
economic system. Perhaps because neither logic nor
rationality recommends it. Consider this, if the fundamental
principle of filiation does not give rise to security of support
for man, are your parents obliged to support you until you
die, kay gikan ka man sa ilang bilahan? If your parents do
not have that obligation, then why are you asking the
5
employer the indefinite obligation to keep you at work, when
your relationship is basically transactional. It is a transaction,
you hire labor then you pay labor. It means work, not a
social institution. So, governments should so arrange its
educational system and training programs so that its citizens
could have multiple skills and career options because it is
more reasonable, more logical, more doable to have attained
a security of employment or employability than security of
tenure. Di ka mag huna huna nga mao na lang ni akoa, kay
jogger man ko, mao ra gyud ni akong skill, unsa man
mahitabo nimu, kung ma arthritis ka, you must have another
skill, you must have multiple skills ready. You must think of
employability and not just security of tenure. You must think
of your productive life in phases. Kung di na ka makalihok
kay na paralyze ka, would you still be productive?
Productivity is man's destiny, it is not leisure, it is not rest.
You will never have pride in telling that you are vacationing
in Bali, sun bathing yourself, NOOOO!!! You have pride in
telling how much you have studied and how difficult it was.
That is what you take pride in telling and re-telling. Man is
made for work, not for leisure. Man has leisure in order to
work because work defines man. Remember that when you
are so stoop down studying law. Unsa man ni? Nganong
nagpatunto man ko dinhi? REMEMBER THAT!!! In the end,
security of employability is the new aim, not security
of tenure.
CONSTITUTIONALITY OF THE “whichever is less”
CLAUSE UNDER RA 8042 AND RA 10022
I am giving you recent Supreme Court rulings because there
are decisions here that are very important. It will also give
you a clue on how the Supreme Court decides. I am
referring specially to a very important case, Sameer
Overseas Placement Agency Inc. vs Cabiles, en banc
decision, August 5, 2014, penned by Justice Leonen,
the youngest member of the Court. Now, what is
extraordinary about this case is the particular provision that
was first placed in RA 8042 (Migrant Worker's Act), that an
illegally dismissed OCW (Overseas Contract Workers),
whether it is sea-based or land-based. The employer who
is found to be guilty of illegal dismissal has a choice
that the separation pay is the remaining salaries for
the unexpired portion in the contract or three months
for every year of the unexpired term, whichever is
less. So, the separation benefits of somebody who is an
illegally terminated OCW's, the law says Section 10 of RA
8042, the salaries for the unexpired portion of the
employment contract or for three months for every
year of the unexpired term, whichever is less. That
was subsequently declared by the Supreme Court as
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
unconstitutional. Serrano vs Gallant Maritime
Services, declared that as unconstitutional. But,
Congress subsequently re-enacted the same provision word
for word, enacted it in RA 10022. Now, Sameer Overseas
Placement Agency Inc. vs Cabiles, was a case of illegal
termination of an OCW, but it occurred before RA 10022
take into effect. So, there is no question, that the illegally
dismissed OCW will be given full benefits of the unexpired
portion. But, how about the law? Justice Leonen not only
declared the worker as illegally dismissed and therefore
entitled to the full schedule of salaries of the unexpired
portion of the contract, but he also declared the law that is
not applicable to the case as unconstitutional. But, it was
already declared as unconstitutional, but it was re-enacted.
The law was not applicable in this case because it was only
re-enacted after this case happened. But, he said that we
can declare this law as unconstitutional. So, it is a political
question. There exists here ratio decidendi, two points:
(1) when a law or a provision of law is null because it is
inconsistent with the constitution, the nullity cannot be
cured by reincorporation or re-enactment of the same or a
similar law or provision. A law or a provision of law that has
already been declared unconstitutional remains as such
unless circumstances have so changed as to warrant a
reverse conclusion, and (2) the new law puts our overseas
workers in the same vulnerable position as they were prior
to the Serrano ruling. Failure to reiterate the very ratio
decidendi of that case will result in the same untold
economic hardships that our Constitution intended to avoid.
Obviously, we cannot countenance added expenses for
further litigation thatwill reduce their hardearned wages as
well as add to the indignity of having been deprived of the
protection of our laws simply because our precedents have
not been followed.
Then, I included here an earlier case, February 8, 2012,
Skippers United Pacific Incorporated vs Nathaniel
Doza et al. Again, an OCW that was illegally dismissed but
he is covered by an old law that was already declared
unconstitutional. So, he was given full benefits. Then, the
ponente says, nevertheless, since the termination occurred
on January 1999, before the passage of the amendatory act
RA 10022, we shall apply RA 8042 as amended without
touching on the constitutionality of Section 7 of RA 10022.
Justice Brion on earlier occasion is tasked to decide on the
case, but Brion did not. Brion is number 1 in the BAR
examination, valedictorian of his class, ateneo de manila.
That is why Justice Leonen swayed the entire Court to
declare unconstitutional a law that is not even applicable to
the facts because the facts occurred before the law was
enacted. Read all these cases.
6
SEPARATION PAY
Is separation pay taxable? It depends. This is the rule now
from the BIR point of view. If the separation is not due to
your control as an employee, the benefits are not taxable,
for example if you have reached retirement age. The
retirement benefits that you received, as a general rule, is
not taxable. If you are retrenched due to cessation or
closure of the operations of the company, the benefits you
received is not due to your own faults. But, let us say that
you availed of an early retirement incentive plan, whatever
you get from that is taxable. The only exception is, if what
you receive comes from a retirement fund that is registered
with the internal revenue. Before you can put up a plan, you
must register it with the national internal revenue bureau
and then they will keep track of it, and then the employer
makes contributions to that fund and the contributions are
tax deductible, in other words, charged to expenses, and
then that is tax free. The recipients do not pay income tax.
But then, the BIR has a new ruling. If you retire or you
are separated and you receive separation pay more
than what the law grants you, as to the excess, you
will be taxed. There was a case ruled by Kim Henares, the
petitioner was the comptroller of a standard charter bond,
he retires, he then receives retirement pay from the
retirement fund, so tax free. But then, as a gesture of
gratitude, the company allowed him to take the company car
that he had used for only two years, now, what did they do?
The title of the car is under the company, so the company
executed and signed a deed of sale and paid for 100 pesos.
That is how the title of the car was transferred. The BIR
taxed him on the fair market value of the car because it is in
excess of what retirement benefits is. Retirement benefits
being one-half month (1/2) for every year of service
plus five (5) days service incentive leave plus one-
twelfth (1/12) thirteenth month pay. Retirement is
an authorized cause for termination and then there is
a benefit. The benefit defined by law is one-half month
(1/2) for every year of service plus five (5) days service
incentive leave plus one-twelfth (1/12) thirteenth month
pay, you multiply that with the number of work days. For
daily wage workers, I think it is 22.3 days wages for every
year of service. That is a free benefit, not taxable. You know
I used to do this, pag mu retire ka, mu separate ka sa
trabaho, ang imung benefits kuha-an man sa BIR, unsaon
man ni nako aron di ko ma tax? Kung gusto ka nga dili ma
tax, makig-sulti ko sa imung employer, gusto ka nga dili siya
maka tax, o sige ako ning himuon, mag file na siya ug illegal
dismissal in the Labor Arbiter, so it is already docketed, then
the Labor Arbiter will call a conference, then the parties will
 LABOR STANDARDS 2015 7
FROM THE LECTURES OF FR. A.L. NAZARENO

compromise, then you move on judgment based on
compromise. The Labor Arbiter actually renders a judgment
and the Labor Arbiter then makes an accomplishment report
and then he will read the amount. So, the amount is by
virtue of a judgment of the labor tribunal and
therefore it is not taxable.
According to the SC, the objective of the law is to put the
employee in equal footing with the employer. The employer
is powerful, and he has the resources. The employee is
insignificant. He is just alone. So, he is given a chance by
the law to stand in equal footing. So he does not have any
obligation to reimburse even if the decision is overturned.

REINSTATEMENT PENDING APPEAL What is more, the SC said if by any chance he is unpaid his
salary because he is not reinstated actually or payroll wise,
The labor issue in termination with respect to
and the original decision is there was illegal dismissal and he
Reinstatement pending appeal.
should be reinstated that is reversed, what happens to the
period when he should have received salary because
If you have the case of termination and the labor arbiter
constructive actual reinstatement? What happens? The SC
rules that there has been illegal termination, there are
says the employer still has the obligation to pay him those
substantial rights with respect to the employee pending
wages in the interim, even if there is reversal. Even if the
appeal by the employer. What is that? The ruling of the SC
Court already knows that he is, the decision in his favor is
according to the red letter of the law, the employer has a
reversed, he should still be paid because that is his right
choice whether or not to reinstate the employee adjudged to
under substantive law. So you ask the question now, is this
be illegally dismissed, either actually reinstated *, or he is
remedial law or is this substantive law? It seems that the SC
just reinstated payroll wise, means he just reports every 15th
thinks that actual or constructive reinstatement is substantial
and 30th and he is paid his salaries. Now you say this is
right, it is not remedial right. It is substantial right. So much
unfair, but this is the law. You know before, that was not the
so that the SC says that there is no need for a motion for
case. So many employees were adjudged as illegally
execution of this immediate reinstatement pending appeal.
dismissed by the labor arbiter, but they have to wait for so
Kadawat kag decision, employee ka ‘uy! Illegally dismissed
long because the employer appeals, between the employer
ko!’ unsa may subod nimong buhatun? Thinking that it is
and the employee, the employee does not stand in equal
remedial law, you file a motion for execution, because the
footing, he does not have the resources. So what does he do
choice is the employer’s, isn’t it? Whether he should elect
when he does not have a job? Now, Congress thought about
actual reinstatement, or payroll reinstatement, it is his
that, and they passed this new law that once there is a
choice. Do you still have to file motion for execution, no, you
finding of illegal dismissal, the first instance, the labor
do not have to, according to the SC.
arbiter, he must already be reinstated. That is the rule,
either payroll wise, or actual reinstatement.
How do you execute it then? Together with the decision of
the LA is appended a compliance annexed ‘I hereby certify
What happens if the NLRC overturns that decision? The
that I am reinstating him actually or just electing payroll
moment the NLRC overturns that decision, the reinstatement
reinstatement” then you put ‘compliance’, you sign it, verify
stops. The employee decides to go to the CA, but he is no
under oath, then you return it to the court, to the LA so the
longer entitled to reinstatement pending appeal. He no
LA knows exactly what your choice is. That is why in that
longer receives wages because he is no longer restored.
celebrated case of Pioneer Texturizing Corp. v. NLRC 345
That is the rule.
Phil 1057 (1997), the SC said that the reinstatement pending
appeal is self-executory, meaning, that it does not require a
The issue is like this: supposed the employee is just
writ of execution, much less a motion for its issuance. This is
reinstated payroll wise, in other words, he is just like one of
the basis for the current NLRC ROP that leaves the
those city hall employees that just show up every 15th and
enforcement of the reinstatement order to the employer who
30th to collect the salary. He is not actually working. What
is given an annex where it states that “it is the duty to
happens when the NLRC overturns the original decision of
submit a compliance report within 10 days from receipt of
the LA? Does he have an obligation to reimburse the
the decision as to whether or not you are reinstating him
employee? That was the decision of the SC in division saying
actually or you are reinstating him payroll wise”. The LA
that he has a duty to reimburse. But a few months later, the
issues writ of execution only when the employer disobeys
SC en banc reversed the decision. The employee has no
the above directed, or refuses to reinstate the dismissed
obligation at all to reimburse, even if he did not work for the
employee. That is rule 9 section 6 of the NLRC rules. The
salary which he received. He has no obligation if the final
NLRC has its own rules just like the Rules of Court.
outcome was an overturning of that decision. Why?
 LABOR STANDARDS 2015
FROM THE LECTURES OF FR. A.L. NAZARENO
The one decision of the SC in division which ordered
reimbursement is Genuino v. NLRC 539 SCRA 342 (12/4/07).
This was repealed by decision of the SC en banc Garcia et al
v. PAL (1/20/09) en banc decision penned by Justice Carpio-
Morales. That is the state of affairs now, immediate
reinstatement. You are an employee now, mayo nang usa ra
kabuok. Ma pareha ka sa PAL, 700 stewards and
stewardesses laid off, initial finding of the LA, illegal
dismissal, sugod nag bayad si Lucio Tan. 700 sitting pretty,
wa pa nila ipa reinstate actually. Sila na sad mag hari2 sa
union, so wa niya pa reinstate. Sitting pretty. Doble ang
gasto ni Lucio Tan. Nag bayad pa sya sa actually serving
stewards and stewardesses, gibayran pa jud niya ang na
reinstated. In the end, the finding was mali ang LA. What
happened to the 2 years’ salary? Charge it to experience,
kay wa man mabalik. Mao na ang problema. Walay
problema kung usa ra. Kung daghan, sakit na. So, that’s the
* part of termination, immediate reinstatement.
There was only one time, five years ago when it was
brought out in the bar examination, reimbursement, after
that, no more, they have not * it, because termination has
now become a major problem by the NLRC. That’s why they
instituted this new DO 147-15, because the LA’s dockets are
clogged with termination cases. It is not only industrial,
commercial, agricultural workers that are filing termination,
including kasambahay na. So, they have solved to limit
termination by instituting this so-called single-entry
assistance desk officer (SEADO). He becomes the gate-
keeper. They make rulings, kay di man ka makalusot didto
sa LA unless they endorse. They endorse, these desk
officers, because of this DO. And so there arises an issue: is
the DOL by issuing this DO, are they amending the IRR of
the NLRC, and they also amend the red letter of substantive
law that original and exclusive jurisdiction of termination
cases is LA. Ang nahitabo karon, ang SEADO naman ang
original jurisdiction, kay sya na ang mag buot.
Sa lupong tagapamayapa, if one of the parties is a juridical
officer (not sure) and corporation, you don’t have to go to
the barangay, pero dinhi walay exception! If the employer is
a corporation, does not matter, you still have to go to them.
Because it is mandatory conciliation, mediation of
termination disputes. So, they do not say this is
jurisdictional, they say it is a condition precedent to
compulsory arbitration, but actually, they are the gate
keepers. You cannot go to the LA unless you go first to the
desk officer.
8
“No LA shall take cognizance of the complaint for the illegal
dismissal unless there is a referral from the desk officer
pursuant to the IRR” does that not make it jurisdictional?
Just a play of words, noh, condition precedent, jurisdictional.
That’s like, ah later on you will find out unfair labor practice.
Unfair labor practice can ripen into a criminal offense, yet
you cannot file a criminal case unless you have finished the
civil aspect. But then when you file a criminal case, you
cannot use any of the evidence or proceedings or findings of
the civil aspect as part of the proceeding. Di pareha sa fiscal
ba, mu file kag case, naa pa sa fiscal, whatever evidence is
presented there, you can make that on use in the
proceedings in the main.
You can use it, isn’t that? Karun the determination is to
whether or not the evidence of strong, and you examine and
cross examine the different witnesses, murder case, on that
hinges as to whether he is allowed bail diba. You can already
use part of that in the proceedings before the regular court.
That is not the same in unfair labor practice. That is not the
same in here. You are taking criminal procedure, you already
know that the proceedings in the fiscal, you can point it in
the criminal case, you can use whatever is taken up there in
the fiscal, and use it in the regular court. But here, that is
not the case.
You know, what really ties up all your law? It is procedure.
When you study procedure, do not forget your substantive
law, because anha ka makakitag hanger para sa imung mga
sinina nga substantive law. Anha makita nimo sa procedure.
If you cannot hanger it, pareha ka anang mga commerce
students. They have as much law as you have. Pero wa jud
silay mahimo. Gakuha mana silag oblicon, nego, taxation,
gamayng damages. Daghan kayo na silag law, corporation
law. Kuha na sila tanan, pero ignorante lang gihapon. They
do not know what to do with it. Unsaun man nila ang law?
Sa asa man sila mag sugod? Unsa man ang complaint na
ilang i-file? Wa man silay procedure. Wa man silay kalibutan
sa remedial law. The law comes alive in remedial law. It’s
the most abstract, but if you use the substantive law that
you have learned, that is how you will remember.
You know, this is out of my topic, because this concerns
about public officers. I told you that the trend in private
sector is no more guarantee to the employees that are
dismissed for cause. Wa nay financial assistance. Nakasala
ka, goodbye. Di na ka pareho sa una na tagaan pa kag
financial assistance. But you know what, there is an en banc
decision 10/4/11, this is in the public sector, Cesar S.
Dumduma v. CSC GR 182606 en banc decision. Pulis ni sya.
Mangawkaw nga pulis ba. Clearly, but what did the Court
 LABOR STANDARDS 2015 9
FROM THE LECTURES OF FR. A.L. NAZARENO

do? Gitagaan syag financial assistance 50k, already proven to discuss that hole. Sometimes, that hole never sees the
na nangawat, that is why there are a couple of dissenting light of day. It has to be elucidated for our education. It has
opinions. Dissenting opinion of Brion, it says here to be, because, in the final analysis, that is the only
“Nevertheless, the Court recognizes that petitioner was once corrective of the Court. Students who analyze it, tear it
an outstanding member of the police force. He risked life apart. The SC is always correct because it is final. It is not
and limb serving the citizenry of Region 8 with total final because it is correct. The logic is * non logical. Nag una
dedication and hard work. His service record shows that, ang karwahe kaysa kabayo. It is correct because it is final,
since his original appointment in 1979, he patiently rose no more, you cannot reverse it.
through the ranks until he was promoted to SPO4 in 1991.
While justice exhorts that petitioner suffer the full penalties
imposed by law, temperance cries out that he be
recognized for whatever good he has done prior to
his mistake. Thus, the Court deems proper, on a pro hac
vice basis, to extend financial assistance of P50, 000.00 to
petitioner, which amount shall be taken from his forfeited
retirement benefits. This award in no sense mitigates his
offense but is made solely out of equity and humanitarian
considerations”.

What is the reason nganung tagaan syag 50k? Kay dugay

iyang serbisyo nga malimpyo kuno. That’s the same
reasoning in PLDT v. NLRC and Abucay. Telephone operator
sya sa PLDT, unya, daghan man nangitag linya niadto, ingun
sya “diri nako, tagai kog 30k, naa kay linya”. Hatag syag
30k, tubuan na lang *, wa gyud ka kwag linya. Gisumbong
siya sa PLDT, giimbestiga, kick out. Now, the LA pitied him
because for 11 years kuno, was yay sala. Karun ra sya
nakasala. Therefore, he should be given financial assistance.
That is what the LA did, affirmed by the NLRC, then they
went to the SC. The SC en banc, this is a landmark case, SC
says, “the eleven years that he did not nothing is not
mitigating, that is aggravating”. Sa ato pa, onse ka ka tuig
naga kuhag gatong sa PLDT, ang PLDT man ang nag pakaun
nimo, unya imo syang gibawsan, gidunggab nimo sa likod.
That is aggravating. The same SC says that it is aggravating
in the private sector, and in the public sector in 2011 all of a
sudden it becomes a matter of temperance. Unsa manang
temperance? Di man na kaluoy. Temperance, nagpugong
ang SC sa iyang kasuko. “Temperance cries out that he
be recognized for whatever good he has done prior to
his mistake”. That is aggravating in the private sector. In
the public sector, it seems under this en banc decision, it is
mitigating. Public service ni. Baling2 ang SC. Murag dili
daang matuwid. Sanga2 ang daan. That’s why I give you a
copy of this.

You might think I am too harsh of the SC. If you are the SC
you are the highest diba. Let us say, who will know that my
pants has a hole in the seat of my pants? If you are the SC,
you have already climbed the coconut tree, so everybody
sees the hole in your pants, and for our education, we have