University of Santo Tomas

Faculty of Civil Law

LABOR LAW
Pre-week Notes 2017
ACADEMICS COMMITTEE

SECRETARY GENERAL: CAMILLE ANGELICA B. GONZALES

EXECUTIVE COMMITTEE: EMNIE VALERIE B. DURAN, IRVIN L. PALANCA, MARIELLA
A. MARASIGAN, LARA NICOLE T. GONZALES

LABOR LAW COMMITTEE

COMMITTEE HEAD: LOVERLY A. BARQUEZ

SUBJECT HEADS: MERRI GRACE L. SARMIENTO, MARIUS D. SUMIRA, GENA MYRTLE P.
TERRE
MEMBERS: CHARLENE S. ACOSTA, JESSAMYN D. DIMALIBOT, GINALYNN MARRIEL A.
DE TORRES, RONE ANNE JOY D. GOMEZ, LORD BIEN G. LELAY, GEMMA F. TIAMA

ATTY. MARK KEVIN U. DELLOSA

ADVISER
 UST LAW PRE-WEEK NOTES 2017

LABOR LAW Compassion and mercy subordinate to justice for all:

FUNDAMENTAL PRINCIPLES AND POLICIES Before there can be an occasion for compassion,
sympathy and mercy, there must be justice for all.(SMC
v. NLRC, G.R. No. 117055, March 29, 2006).
Labor
The Employees Compensation Law (P.D. 626) operates
on the principle of social justice, but sympathy to the
It is the exertion by human beings of physical or mental
workers should also be placed in a sensible equilibrium
efforts, or both, towards the production of goods and
with the stability of the ECC trust fund (Aquino v. SSS,
services.
G.R. No. 149256, July 21, 2006).
The State affirms labor as a primary social economic
e.g. An Ee who was validly dismissed may still be given
force. It shall protect the rights of workers and promote
severance pay.
their welfare (1987 Constitution, Art. II, Sec. 18).
Q: What is the quantum of evidence required in
Declaration of basic policy
labor case? (2012 BAR)
It is the policy of the State to:
A: Such amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.
1. Afford full protection to labor,
(Tancirco vs. GSIS, G.R. No. 132916, Nov. 16, 2001)
2. Promote full employment,
3. Ensure equal work opportunities regardless of
SOCIAL JUSTICE
sex, race, or creed and,
4. Regulate the relations between workers and Ers.
The State shall promote social justice in all phases of
(Art. XIII, Sec. 3).
national development (1987 Constitution, Art. II, Sec. 10).
5. Assure the rights of workers to self-organization,
collective bargaining, security of tenure, just and
Q: May social justice as a guiding principle in labor
humane conditions of work (LC), Art. 3).
law be so used by the courts in sympathy with the
working man if it collides with the Equal Protection
Protection to labor
clause of the Constitution? (2003 BAR)
In affording full protection to labor, this Court must
A: YES. The State is bound under the Constitution to
ensure equal work opportunities regardless of sex, race
afford full protection to Labor. When conflicting
or creed giving maximum aid and protection to labor,
interests collide, they are to be weighed on the scales of
promoting their welfare and reaffirming it as a primary
social justice (Fuentes v. NLRC, 266 SCRA 24, January 2,
social economic force in furtherance of social justice and
1997)
national development. (Angelina Francisco v. NLRC. G.R.
No. 170087, August 31, 2006).
Limitations in invoking the principle of social justice
CONSTRUCTION IN FAVOR OF LABOR
1. Not to undermine property rights resulting in
confiscation (Guido v. Rural Progress Adm, L-2089,
In case of doubt, all labor legislation and labor contracts
October 31, 1949). It should not tolerate usurpation
shall be construed in favor of the safety and decent living
of property, public or private.
for the laborers (Art. 1702, NCC).
2. May only protect the laborers who come to court
with clean hands (Phil. Long Distance Telephone Co.
All doubts in the implementation and interpretation of
v. NLRC, G.R. No. 80609, August 23, 1988) and their
the provision of the Labor Code, including its
motives blameless (Gustilo v. Wyeth Phils., G.R. No.
implementing rules and regulations, shall be resolved in
149629, October 4, 2004).
favor of labor (Art, 4, LC).
3. Never result to an injustice or oppression of the Er
(Phil. Geothermal Inc. v. NLRC, G.R. No. 106370,
But protection to labor does not mean oppression or
September 8, 1994).
destruction of capital. The Er’s act will be sustained
4. If it is used to shield wrongdoings. It cannot be
when it is in the right. Eastern Shipping Lines v. POEA,
permitted to be the refuge of scoundrels (PNCC v.
166 SCRA 523 (1998)
NLRC, G.R. No. 83320, Feb. 9, 1989).
.
Concept of liberal approach in interpreting the labor
LABOR LAW
code and its IRR
Labor law
All doubts in the implementation and interpretation of
the provisions thereof, including its IRR, are to be
The law that defines State policies on labor and
resolved in favor of labor.
employment and governs the rights and duties of the
employer (Er) and employees (Ee) with respect to:
Compassionate justice
1. The terms and conditions of employment; and
The Constitution does not condone wrong doing by the
2. Labor disputes arising from collective bargaining or
Ee. However, it urges a moderation of the sanctions that
other concerted activity respecting such terms and
maybe applied to him in the light of the many
conditions.
disadvantages that weigh heavily on him like an
albatross on his neck. (Gandara Mill Supply and Milagros
Classification of labor laws
Sy v. NLRC and Silvestre Germano, G.R. 126703, December
29, 1998).

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 LABOR LAW AND SOCIAL LEGISLATION
1. Labor Standards – Prescribes the terms and
conditions of employment as affecting wages or
monetary benefits, hours of work, cost of living
allowances, and occupational health, safety and
welfare of the workers. It provides economic
benefits to the workers who are actually working.
e.g. 13th month pay
2. Labor Relations – Defines and regulates the status,
rights and duties, and the institutional mechanisms,
that govern the individual and collective
interactions of Ers, Ees or their representatives. It is
concerned with the stabilization of relations of Ers
and Ees and seeks to forestall and adjust the
differences between them by the encouragement of
CB and the settlement of labor disputes through
conciliation, mediation and arbitration.
e.g. Collective Bargaining Negotiations
3. Social Legislation – All laws passed by the State to
promote public welfare. It includes statutes
intended to enhance the welfare of the people even
where there is no Er-Ee relationship. It provides
economic benefits to workers who are at work
because of the hazards of employment.
e.g. GSIS Law, SSS Law, Philhealth benefits, Agrarian
Laws
Q: How do the provisions of the law on labor
relations interrelate, if at all, with the provisions
pertaining to labor standards? (2003 BAR)
A: The law on Labor Relations provides for rights and
procedures by which workers may obtain from their Er
benefits which are over and above the minimum terms
and conditions of employment set by labor standards
law. Labor Standards law alone does not guarantee
lasting industrial peace. It is assured through Labor
Relations law which enables workers to obtain better
benefits guaranteed by labor standards laws and by
providing for a mechanism to settle disputes between
the Er and his Ees.
Labor legislation v. Social legislation
Labor legislation Social legislation
1. Refers to labor 1. Refers to Social Security
statutes like Labor Laws
Relations Law and 2. Those laws that provide
Labor Standards
particular kinds of
2. Focuses on the protection or benefits to
rights of the society or segments
worker in the thereof in furtherance of
workplace social justice
NOTE: All Labor laws are social legislations, but not all
social legislations are labor laws.
SOURCES OF LABOR LAWS
1. LC and other related special legislation [including
their respective Implementing Rules and
Regulations (IRR)]
2. Contracts
3. Collective Bargaining Agreement (CBA)
4. Company practices
5. Company policies
2
Contract of labor
It is a consensual, nominate, principal, and commutative
contract whereby one person, called the Er,
compensates another, called the laborer, worker or Ee,
for the latter’s service.
Essential characteristics of a contract of labor
1. Er freely enters into a contract with the Ee;
2. Er can select who his Ee will be;
3. Er can dismiss the Ee; the Ee in turn can quit his job;
4. Er must give remuneration; and
5. Er can control and supervise the conduct of the Ee.
Contracts are subject to police power of the State
Labor contracts are placed on a higher plane than
ordinary contracts; these are imbued with public
interest (Leyte Geothermal Power Progressive Employees
Union-ALU-TUCP v. Philippine National Oil Company-
Energy Development Corporation, G.R. No. 170351, March
30, 2011).
The relation between the capital and the labor are not
merely contractual. They are so impressed with public
interest that labor contracts must yield to the common
good (Art. 1700, NCC).
Prohibitions on contract of labor:
No law impairing the obligation of contracts shall be
passed (1987 Constitution, Art. III, Sec. 10).
No involuntary servitude in any form shall exist except
as a punishment for a crime whereof the party shall have
been duly convicted. (1987 Constitution, Art. III, Sec.
18(2)).
No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid
(NCC, Art. 1703).
The CBA operating as a source of law
The CBA is the norm of conduct between Er and Ees and
compliance therewith is mandated by the express policy
of the law. (DOLE Philippines, Inc., v. Pawis ng
Makabayang Obrero (PAMAO-NFL), G.R. No. 146650,
January 13, 2003 in citing E. Razon, Inc. v. Secretary of
Labor and Employment, G.R. No. 85867, May 13, 1993)
Requisites before past company practices would be
considered as a source of labor law
There must be:
1. Voluntarily institution by Er without any legal
compulsion
2. A passage of time. It should have been done over a
long period of time, and must be shown to have been
consistent and deliberate (American Wire and Cable
Daily Rated Employees Union v. American Wire and
Cable Co., Inc., G.R. No. 155059, April 29, 2005).
NOTE: No passage of time is required for a company
policy to become a source of labor law.
Basic rights of workers guaranteed by the
constitution
 UST LAW PRE-WEEK NOTES 2017

1. Security of tenure Such rules and regulations shall become effective 15

2. Living wage days after announcement of their adoption in
3. Just and humane working conditions newspapers of general circulation (Art. 5, LC).
4. Share in the fruits of production
5. Self-organization RECRUITMENT AND PLACEMENT
6. Collective bargaining
7. Collective negotiations RECRUITMENT OF LOCAL AND MIGRANT WORKERS
8. Engage in peaceful concerted activities, including
the right to strike Recruitment and placement
9. Participate in policy and decision making processes
(Art. XIII, Sec. 3). 1. Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers;
LABOR CODE and
2. Includes referrals, contact services, promising or
Applicability of the labor code advertising for employment, locally or abroad,
whether for profit or not [Art. 13(b), LC].
GR: All rights and benefits granted to workers under the
LC shall apply alike to all workers, whether agricultural Article 13(b) contains a proviso that states “Provided,
or non-agricultural. that any person which, in ay manner, offers or promises
for a fee, employment to two or more person shall be
XPNs: deemed engaged in recruitment. This proviso merely
lays down a rule of evidence. The number of person
1. Government Ees dealt with is not an essential ingredient of the act of
2. Ees of government corporations created by special recruitment and placement of workers. Any of the act
or original charter mentioned in Article 13 (b) will constitute recruitment
3. Foreign governments and placement even if only one prospective worker is
4. International agencies involved (Chan, 2017).
5. Corporate officers/ intra-corporate disputes which
fall under P.D. 902-A and now fall under the PRIVATE SECTOR PARTICIPATION IN THE
jurisdiction of the regular courts pursuant to the RECRUITMENT AND PLACEMENT OF WORKERS
Securities Regulation Code.
6. Local water district except where NLRC’s Entities in the private sectors that can participate in
jurisdiction is invoked. recruitment and placement of workers
7. As may otherwise be provided by the LC (See: Art.
82 of the LC) 1. Shipping or manning agents or representatives
2. Private recruitment offices
Original charter or manner of creation test 3. Public employment offices
4. Construction contractors if authorized by the DOLE
It is determined by the manner of their creation. and Construction Industry Authority.
5. Persons that may be authorized by the SLE
Government 6. Private employment agencies (Sec. 1, Rule VII, Book
Corporation I, IRR of the LC).
Incorporated under
TRAVEL AGENCIES PROHIBITED FROM
RECRUITMENT AND PLACEMENT
Corporation Code Special (original) charter
from Congress Prohibition on travel agencies and sales agencies of
airline companies to recruit

covered by LC subject to Civil Service rules
Agency that exercises the “rule-making power”
granted in the labor code
The Department of Labor and Employment (DOLE) thru
the Secretary of Labor and Employment (SLE) and other
government agencies charged with the administration
and enforcement of the LC or any of its parts shall
promulgate the necessary IRRs (Art. 5, LC).
They are prohibited from engaging in the business of
recruitment and placement of workers for overseas
employment whether for profit or not.
ILLEGAL RECRUITMENT, ART. 38 (LOCAL), SEC. 6,
MIGRANT WORKERS ACT, R.A. 8042
Difference between the prohibited acts under LC
and R.A. 8042 or the Overseas Filipinos and
Overseas Migrant Workers Act, as amended by R.A.
10022

Limitations to the “rule-making power” granted to LC R.A. 8042, as amended by

the SLE and other government agencies RA 10022
1. Illegal Illegal recruitment under Sec.
1. It must be issued under the authority of law recruitment 6 means any recruitment
2. It must not be contrary to law and the Constitution under Art. 38 of activity committed by non-
LC licensees/ non-holders of
Effectivity of rules and regulations 2. Prohibited acts authority or prohibited acts
under Art. 34 of (same as Art. 34, LC)
LC

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 LABOR LAW AND SOCIAL LEGISLATION

Added to the following in the person posing as a recruiter, whether locally or abroad.
list of prohibited acts: (People v. Laogo, G.R. no. 176264, January 10, 2011)
1. Failure to actually deploy
without valid reason; By themselves, procuring a passport, airline ticket and
2. Failure to reimburse foreign visa for another individual, without more, can
expenses incurred by the hardly qualify as recruitment activities. (Darvin v. CA
worker in connection and People of the Philippines, GR No. 125044, July 13,
with his/her 1998)
documentation and
processing for purposes Bersamin Cases:
of deployment;
3. To allow a non-Filipino Q: Sometime in November and December 2000 in
citizen to head or manage Pangasinan, Edith Abat, not being a licensee or
a licensed recruitment/ holder of authority, performed recruitment
manning agency. activities in a large scale by recruiting Maria,
Jocelyn, Sonny, Baltazar, Letecia, Pablito, Tarcila,
LICENSE v. AUTHORITY Caroline and Percy to a supposed job in Taiwan, for
a fee, without first securing the necessary license or
License requirement in the business of recruitment permit to do the same. The RTC convicted her of the
and replacement crime of large scale illegal recruitment. Is Edith
guilty of such crime?
The business of recruitment and replacement is
regulated by law by requiring them to obtain license and A: YES. The acts committed by the accused constituted
authority. illegal recruitment in large scale, whose essential
elements are the following: (a) The accused engages in
LICENSE AUTHORITY acts of recruitment and placement of workers defined
A document issued by A document issued by the under Article 13(b) of the Labor Code or in any
DOLE authorizing a DOLE authorizing a person prohibited activities under Article 43 of the Labor Code;
person or entity to or association to engage in (b) The accused has not complied with the guidelines
operate a private recruitment and placement issued by the Secretary of Labor and Employment,
employment agency. activities as a private particularly with respect to the securing of license or an
recruitment entity. authority to recruit and deploy workers, either locally or
overseas; and (c) The accused commits the unlawful acts
CHARACTERISTICS OF A LICENSE against three or more persons individually or as a group.
The State competently established that the accused,
1. License or authority are non-transferable (Art. 29, despite having no license or authority to recruit and
LC). License or authority is granted on the basis of deploy workers, either locally or overseas, had
personal qualifications of the grantee. Thus, it is represented to the complainants that she could secure
beyond the commerce of man. their employment in Taiwan either as factory workers
2. Prospective in application (People v. Chua, G.R. No. or as computer operators at a monthly salary of
128280, 4 April 2001) NT$45,000.00 each; and that the complainants had
3. It is place-specific. Engaging in recruitment relied on her representation and given her the amounts
activities in places other than that specified in the she had demanded in the expectation of their placement.
license is prohibited. [Sec. 143, II (s), Revised POEA And, in order to make her representation more
Rules and Regulations Governing the Recruitment convincing, she had also told the complainants about her
and Employment of Landbased Overseas Filipino being related to the Philippine Ambassador to Taiwan,
Workers of 2016] as well as to President Ramos and President Estrada.
XPN: Provincial recruitment pursuant to a special (People v. Abat, G.R. No. 168651, March 16, 2011)
recruitment authority
Q: The Makati City Prosecutor filed two separate
ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT informations charging Maricar, Harleta, Marissa and
Berna with (1) illegal recruitment and (2) estafa.
Illegal recruitment is committed when two (2) elements Only Maricar was arrested and prosecuted, while
concur: First, the offender does not have the required the three other accused remained at large. The RTC
license or authority to engage in the recruitment and acquitted Maricar in the case for estafa but
placement of workers. Second, the offender undertook convicted her in the case for illegal recruitment
(1) recruitment and placement activity defined under committed in large scale. Maricar appealed to the
Article 13(b) of the Labor Code or (2) any prohibited higher courts, arguing that she is not an employee of
practice under Art. 34 of the same code (People v. Gloria Harvel (the recruitment agency) and that the private
Bartolome, G.R. No. 129486, July 4, 2008, VELASCO CASE). complainants did not directly transacted their
overseas work application with her but to the other
Way to prove illegal recruitment accused. Is the contention of Maricar correct?

To prove illegal recruitment, it must be shown that the A: NO. The nature of the obligation of the co-
accused, without being duly authorized by law, gave conspirators in the commission of the crime requires
complainants the distinct impression that he had the solidarity, and each debtor may be compelled to pay the
power or ability to send them abroad for work, such that entire obligation. Under Article 2194 of the Civil Code,
the latter were convinced to part with their money in joint tortfeasors are solidarily liable for the resulting
order to be employed. It is important that there must at damage. Private complainants commonly testified that
least be a promise or offer of an employment from the Maricar was the one who conducted

4
 UST LAW PRE-WEEK NOTES 2017
orientations/briefings on them; informed them, among
others, on how much their salary would be as caregivers
in Japan; and what to wear when they finally will be
deployed. She also represented herself as the one
expediting the release of applicants’ working visa for
Japan. It would not be an excuse for any of the joint
tortfeasors to assert that her individual participation in
the wrong was insignificant as compared to those of the
others. Joint tortfeasors are not liable pro rata. Hence,
Maricar’s liability towards the victims of their illegal
recruitment was solidary, regardless of whether she
actually received the amounts paid or not, and
notwithstanding that her co-accused, having escaped
arrest and untried. (People v. Velasco, et. al, G.R. No.
195668, 25 June 2014)
ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE
A. Illegal recruitment in large scale
Illegal recruitment in large scale is committed against
three or more persons individually or as a group.
A conviction for large scale illegal recruitment must be
based on a finding in each case of illegal recruitment of
three or more persons having been recruited,
whether individually or as a group.
When the LC speaks of illegal recruitment ‘committed
against three or more persons individually or as a group,
it must be understood as referring to the number of
complainants in each case who are complainants
therein; otherwise, prosecution for single crimes of
illegal recruitment can of large scale illegal recruitment.
(People v. Hernandez, GR No. 1052014, March 9, 1995)
Bersamin Cases:
Q: Bayker was convicted of illegal recruitment in
large scale for having been proved that she lacked
the authority or license to engage in recruitment
and placement, had promised to certain individuals
employment abroad and had then received money
from them. Further, she was also found guilty of
estafa for misrepresenting about her power and
authority to deploy a person for overseas
employment, thereby inducing him to part with his
money. Does the conviction of Bayker for illegal
recruitment committed in large scale precluded her
personal liability for estafa under Article 315(2)(a)
of the Revised Penal Code on the ground of double
jeopardy?
A: NO. The conviction of the Bayker for illegal
recruitment committed in large scale did not preclude
her personal liability for estafa under Article 3l5(2)(a)
of the Revised Penal Code on the ground of double
jeopardy. An illegal recruiter can be held liable for the
crimes of illegal recruitment committed in large scale
and estafa without risk of being put in double jeopardy,
provided that the accused has been so charged under
separate informations. The elements of estafa as
charged are, namely: (1) the accused defrauded another
by abuse of confidence or by means of deceit; and (2) the
offended party, or a third party suffered damage or
prejudice capable of pecuniary estimation. In contrast,
the crime of illegal recruitment committed in large scale,
as indicated, requires different elements. Double
jeopardy could not result from prosecuting and
convicting the accused-appellant for both crimes
5
considering that they were entirely distinct from each
other not only from their being punished under different
statutes but also from their elements being different.
(People v. Bayker, G.R. No. 170192, February 10, 2016)
Q: Spouses Owen and Beatriz Cagalingan
represented themselves, to five (5) aspiring
persons, as having a capacity to contract, enlist, hire,
and transport Filipino workers for employment in
Macau, China for a fee. The private complainants
were asked money on different occasions for
documentation and processing fee. The accused
spouses no longer showed up thereafter even on the
day of the supposed departure of the complainants.
Hence, one of the complainants reported the
incident and upon verification with POEA they
learned that the accused spouses were not licensed
recruiters. The complainants charged the spouses
Cagalingans with Illegal Recruitment in Large Scale
before the RTC and were likewise indicted for three
(3) counts of estafa. Were the acts of the accused
spouses considered “recruitment and placement of
workers” defined under the Labor Code, which, if
unlawful constitutes illegal recruitment?
A: YES. It was proven that the acts of the accused
constituted “recruitment and placement” defined under
Article 13(b) of the Labor Code. The complainants
testified that they were induced, offered, and promised
by the accused employment in Macau, China for two
years for a fee and made to believe that they were
authorized to hire them. Moreover, they paid the
accused for documentation and processing fees, yet,
they were unable to go abroad. Said acts proved that the
accused engaged in “recruitment and placement
activities.” It was proved by private complainants that
accused spouses were not licensed neither authorized to
engage in recruitment activities as substantiated by
POEA’s Certification and testimony by the OIC-POEA
who issued the same; the acts were unlawful exercise of
“recruitment and placement” activities under the Labor
Code; and, lastly, they are five (5) complainants against
whom accused spouses are alleged to have recruited.
(People of the Philippines v. Owen Marcelo Cagalingan
and Beatriz Cagalingan, GR No. 198664, November 23,
2016)
B. Illegal recruitment committed by a syndicate
Illegal recruitment is committed by a syndicate if it was
carried out by a group of three or more persons
conspiring or confederating with one another.
NOTE: “Illegal recruitment in large scale” pertains to the
number of victims while “syndicated illegal recruitment”
pertains to the number of recruiters.
To commit syndicated illegal recruitment, three
elements must be established: (1) the offender
undertakes either any activity within the meaning of
recruitment and placement defined under Article 13(b),
or any of the prohibited practices enumerated under
Art. 34 of the Labor Code; (2) he has no valid license or
authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and
(3) the illegal recruitment is committed by a group of
three (3) or more persons conspiring or confederating
with one another. When illegal recruitment is
committed by a syndicate or in large scale, i.e., if it is
committed against three (3) or more persons
 LABOR LAW AND SOCIAL LEGISLATION
individually or as a group, it is considered an offense
involving economic sabotage (People v. Gallo et al., G.R.
No. 187730, June 29, 2010, VELASCO CASE).
Q: What qualifying circumstances will convert
“illegal recruitment” to economic sabotage thus
subjecting its perpetrators to a penalty of life
imprisonment and a fine of at least P500, 000.00?
A: An illegal recruitment is considered to have evolved
into economic sabotage when it is committed by a
syndicate or committed in large scale. Illegal
recruitment is deemed to have been committed by a
syndicate when the recruitment is carried out by a group
of three or more persons conspiring and/or
confederating with one another in carrying out any act
under Art. 38. On the other hand, it is deemed committed
in large scale if it is committed against three or more
persons individually or as a group.
LIABILITIES
LOCAL RECRUITMENT AGENCY and FOREIGN
EMPLOYER
Solidary Liability of the local recruitment agency
A Local Recruitment Angency shall be jointly and
severally liable with its principal or foreign-based Er for
any violation of the recruitment agreement and
violation of contracts of employment. [Sec. 10(a)(2), Rule
V, Book I, IRR]
Liability of corporate officers, directors or partners
if the recruitment/ placement agency is a juridical
being
If the recruitment/placement agency is a juridical being,
the corporate officers, directors or partners as the case
may be, shall themselves be jointly and solidarily liable
with the corporation or partnership for the claims and
damages. (Becmen Service Exporter and Promotion v.
Cuaresma, G.R. Nos. 182978-79, April 7, 2009)
Money claims under Migrant Workers Act
Consistent with the policy encouraging amicable
settlement of labor disputes, Sec. 10 of R.A. 8042 allows
resolution by compromise of cases filed with the NLRC.
Any compromise/amicable settlement or voluntary
agreement on money claims inclusive of damages shall
be paid within four months from the approval of the
settlement by the appropriate authority.
Bersamin Case:
Q: For and in behalf of Baleen Marine, Pentagon
International Shipping Services, Inc. (Pentagon), a
licensed domestic private manning agencies
engaged in the recruitment of seafarers. Pentagon
hired Madrio and Rubiano as chief officer and
second engineer, respectively. When their 10-month
contract expired, they were repatriated to the
Philippines. Alleging non-payment and
underpayment of wages, and claiming damages and
attorney's fees, they separately brought claims
against Pentagon and the owners and managers of
Baleen Marine. Pentagon denied liability,
countering that it had ceased to be the manning
6
agency of Baleen Marine effective October 1, 1998.
JDA Inter-Phil, the new local agent for Baleen
Marine's vessels, insisted that although it had
applied with the POEA for the transfer and
accreditation of Baleen Marine's vessels in its favor,
it withdrew the application and did not execute an
affidavit of assumption and responsibility as
required; that, consequently, Pentagon continued to
be jointly and severally liable with Baleen Marine
for the money claims of Madrio and Rubiano. Was
there a valid substitution of the manning agent from
Pentagon to IDA Inter-Phil?
A: NO. Before a transfer of accreditation can be effected,
the transferee agency should likewise have to comply
with the requirements for accreditation contained in
Section 2, Rule I, Book III of the Rules and Regulations
Governing Overseas Employment. The POEA can act on
the transfer of accreditation only after all the
requirements shall have been submitted. In light of the
foregoing, there was no effective transfer of agency from
Pentagon to JDA Inter-Phil. Even assuming arguendo
that JDA Inter--Phil did not withdraw its application for
accreditation with the POEA, there was still no valid
transfer of agency to speak of in the first place because
JDA Inter-Phil did not submit the required authenticated
special power of attorney and manning agreement. The
minutes of the October 9, 1998 meeting could not, by
any stretch of the imagination, supplant this mandatory
requirement.
It is relevant to observe that Pentagon cannot feign
ignorance of Section 10, paragraph 2, of the Migrant
Workers' Act of 1995 to the effect that its liabilities
would continue during the entire period or duration of
the employment contract, and would not be affected by
any substitution, amendment or modification of the
contract made either locally or in a foreign country. The
provisions of the POEA Rules and Regulations to the
effect that the manning agreement extends up to and
until the expiration of the employment contracts of the
employees recruited and employed pursuant to the
recruitment agreement are also clear enough. As such,
Pentagon is not exempt from its liabilities and
responsibilities towards Madrio and Rubiano.
(PENTAGON INTERNATIONAL SHIPPING SERVICES v. CA,
ET AL., G.R. No. 169158, 01 July 2015)
THEORY OF IMPUTED KNOWLEDGE
Theory of Imputed Knowledge
This theory refers to a cognizance of a circumstance or
fact attributed to a party because of its position, or its
relationship with or responsibility for another party.
A rule in insurance law that any information material to
the transaction, either possessed by the agent at the
time of the transaction or acquired by him before its
completion, is deemed to be the knowledge of the
principal, at least so far as the transaction is concerned,
even though in fact the knowledge is not communicated
to the principal at all. (Leonor v. Filipinas Compania, 48
OG 243, January 10, 1950)
The theory of imputed knowledge ascribes the
knowledge of the agent to the principal not the other
way around. The knowledge of the principal-foreign Er
cannot, therefore, be imputed to its agent. (Sunace v.
NLRC, G.R. No. 161757, January 25, 2006)
 UST LAW PRE-WEEK NOTES 2017
SOLIDARY LIABILITY
Liability of the private employment agency and the
principal or foreign-based employer
They are jointly and severally liable for any violation of
the recruitment agreement and the contracts of
employment.
NOTE: This solidary liability imposed by law against
recruitment agencies and foreign Ers is meant to assure
the aggrieved worker of immediate and sufficient
payment of what is due him. (Becmen Service Exporter
and Promotion v. Cuaresma, G.R. Nos. 182978-79, April 7,
2009)
The joint and several liabilities of the private
employment agency and the principal or foreign-based
employer shall continue during the entire perior or
duration of the employment contract and shall not be
affected by any substitution, amendment, or
modification made locally or in foreign country of the
said contract. (Sec. 10, RA No. 8042, as amended by Sec. 7
of RA No. 10022)
PRETERMINATION OF CONTRACT
OF MIGRANT WORKER
Basis in computing an employee’s compensation in
case of premature termination of contract
All the salaries for the entire unexpired portion of their
employment contracts, irrespective of the stipulated
term or duration thereof. (Serrano v. Gallant Maritime
Services, GR No. 167614, March 24, 2009)
The provision of R.A. No. 10022 providing that, “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” was
declared UNCONSTITUTIONAL in the case of Sameer
Overseas Placement Agency, Inc. v. Joy C. Cabiles (GR
No. 170139, August 05, 2014) reiterating the doctrine
laid down by the Court in Serrano v. Gallant Maritime
Services (GR No. 167614, March 24, 2009).
DIRECT HIRING
Direct hiring
It is when an Er hires a Filipino worker for overseas
employment without going through the POEA or entities
authorized by the SLE.
Ban on direct hiring
GR: An Er may only hire Filipino worker for overseas
employment through POEA or entities authorized by
DOLE.
XPNs: Direct hiring by:
1. International organizations
2. Name hires
7
3. Members of the diplomatic organizations
4. Other Ers as may be allowed by DOLE
Rationale for the Ban
This is to ensure that such employment is fully regulated
by the government through its agencies.
EMPLOYMENT OF NON-RESIDENT ALIENS
Non-residents alien may be hired if an Alien
Employment permit is issued to a non-resident alien or
to the applicant employer after a determination of the
non-availability of a person in the Philippines who is
competent, able and willing at the time of application
to perform the services for which the alien is desired
(Art. 40, Title II, LC).
But Alien Employment Permit is not exclusive
requirement for a foreign natioal to work in the
Philippines. It is only one of the requirements in the
issuance of a work visa (9g Visa) to legally employed in
the Philippines.
9G Visa (Pre-arranged Employment Visa)
The Visa required for foreign nationals who are
proceeding to Philippines to engage in any lawful
occupation, whether for wages or salary or other forms
of compensation (Sec. 9g, Philippine Immigration Act of
1940)
For Resident Aliens, they are required to to secure an
Alien Employment Registration Certificate.
Article 40 of the LC applies only to “non-resident aliens”
not to long-time resident of the country. (GMC v. Torres,
G.R. No. 9366, April 22, 1991)
Employment of aliens in entities engaged in
nationalized activities
GR: Aliens may not be employed or engaged in
nationalized activities
XPNs:
1. Secretary of Justice specifically authorizes the
employment of technical personnel;
2. Aliens are elected members of the board of directors
or governing body of corporations or associations
engaging in partially nationalized activities shall be
allowed in proportion to their allowable
participation or share in the capital of such entities
[Sec. 2(A), Anti-Dummy Law, as amended by P.D.
715]; or
3. Enterprises registered under the Omnibus
Investment Code in case of technical, supervisory or
advisory positions, but for a limited period.
Persons required to obtain employment permit
GR: All non-resident foreign nationals who intend to
engage in gainful employment in the Philippines.
XPNs:
1. Diplomatic services and foreign government
officials;
 LABOR LAW AND SOCIAL LEGISLATION

2. Officers and staff of international organizations and Under the 1987 Constitution, only a judge may issue
their legitimate spouses; search warrants or warrants of arrest. Hence, Art. 38(c)
3. Members of governing board who have voting rights of the LC is unconstitutional inasmuch as it gives the SLE
only; the power to issue search warrants and warrants of
4. Those exempted by special laws; arrest. The labor authorities must go through the
5. Owners and representatives of foreign principals judicial process. (Salazar v. Achacoso, G.R. No. 81510,
who interview Filipino applicants for employment March 14, 1990)
abroad;
6. Aliens whose purpose is to teach, present and/or PHILIPPINE OVERSEAS EMPLOYMENT
conduct research studies; ADMINISTRATION (POEA)
7. Resident aliens. (D.O. 75-06, Series of 2006)
While Section 2(c),Republic Act (R.A.) No. 8042 states
Duration of the employment permit that the State does not promote overseas employment
as a means to sustain economic growth, the State
GR: Minimum of 1 year recognizes the vital role of overseas Filipino workers to
the nation’s economy and development. Aware that
XPN: If the employment contract, consultancy services, overseas workers are vulnerable to exploitation, the
or other modes of engagement provides otherwise, State sought to protect the interests and well-being of
which in no case shall exceed 5 years [DOLE D.O. 97-09, these workers with creation of specialized bodies such
Revised Rules for the Issuance of Employment Permits to as the POEA under the direct supervision of the DOLE
Foreign Nationals (2009)]. Secretary. (Republic of the Philippines v.Humanlink
Manpower Consultants, Inc., G.R. No. 205188, April 22,
REGULATION AND ENFORCEMENT 2015)

SUSPENSION OR CANCELLATION OF Jurisdiction of the LA v. POEA

LICENSE OR AUTHORITY
JURISDICTION
Person who can suspend or cancel license or Labor Arbiter POEA
authority Original and exclusive
Original and exclusive jurisdiction over:
The Secretary of Labor and Employment is vested with jurisdiction over all
power to suspend or cancel any license or authority to claims arising out of 1. All cases which are
recruit employees for overseas employment. Er-Ee relationship or administrative in character
by virtue of any law or relating to licensing and
REGULATORY AND VISITORIAL POWERS OF THE contract involving registration of recruitment
DOLE SECRETARY OFWs including and employment agencies
claims for:
Regulatory powers of the SOLE 2. Disciplinary Action cases
1. Actual and other special cases,
1. Restrict and regulate the recruitment and 2. Moral which are administrative in
placement activities of all agencies 3. Exemplary character, involving Ees,
2. Issue orders and promulgate rules and regulations 4. Other forms of principals, contracting
damages (Sec. 10, partners and Filipino
Visitorial power R.A. 8042). migrant workers (Rule VII,
Book VII, POEA Rules).
1. Access to Er’s records and premises at any time of
the day or night, whenever work is being Repatriation of a worker
undertaken;
2. To copy from said records; and GR: The repatriation of the:
3. Question any Ee and investigate any fact, condition
or matter which may be necessary to determine 1. Worker and the transport of his personal belongings
violations or which may aid in the enforcement of – shall be the primary responsibility of the agency
the LC and of any labor law, wage order, or rules and which recruited or deployed the worker overseas.
regulation issued pursuant thereto. 2. Remains and transport of the personal belongings of
a deceased worker and all costs attendant thereto –
NOTE: The determination of the existence of an shall be borne by the principal and/or the local
employer-employee relationship by the DOLE must be agency.
respected. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be XPNs:
rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer-employee 1. If the termination of employment is due solely to the
relationship, force the referral of the matter to the fault of the worker, the principal/ Er or agency shall
NLRC. If the DOLE makes a finding that there is an not be responsible for the repatriation of the former
existing employer-employee relationship, it takes and/or his belongings.
cognizance of the matter, to the exclusion of the NLRC 2. In cases of war, epidemic, disaster or calamities,
(People’s Broadcasting Service v. Secretary of DOLE, G.R. natural or man-made, and other similar event, and
No. 179652, March 6, 2012, VELASCO CASE). where the principal or recruitment agency cannot
be identified, the Overseas Workers Welfare
SOLE cannot issue search warrants or warrants of Administration, in coordination with appropriate
arrest

8
 UST LAW PRE-WEEK NOTES 2017

international agencies, shall take charge of the managerial staff are not Book V. Supervisors,
repatriation (Sec. 15, R.A. 8042). covered by the provision unlike managers, are
of Articles 82-96 Book III allowed to form, join or
Mandatory repatriation of underage migrant (Art. 82, LC). assist the labor union of
workers fellow supervisors. (Art.
255, LC, as renumbered)
Upon discovery or being informed of the presence of
migrant workers whose ages fall below the minimum Field Personnel refers to to non-agricultural
age requirement for overseas deployment, the employees who regularly perform their duties away
responsible officers in the foreign service shall without from the principal place of business or branch office of
delay repatriate said workers and advise the DFA the employer AND whose actual work in the field cannot
through the fastest means of communication available of be determined with reasonable certainty (Art. 82, LC).
such discovery and other relevant information. The
license of a recruitment/manning agency which The reasons for excluding an outside saleman from the
recruited or deployed an underage migrant worker shall application of the Eight Hour Labor Law are fairly
be automatically revoked and shall be imposed a fine of apparent. He works away from his employer’s place of
not less than P500,000 but not more than P1,000,000. business, is not subject to the personal supervision of his
(Sec. 9, R.A. 10022) employer and his employer has no way of knowing the
number of hours he work per day. (San Miguel Brewery
LABOR STANDARDS Inc. v. Democratic Labor Organization, G.R. No. L-18353,
July 31, 1963)
COVERAGE/ EXCLUSIONS
PRINCIPLES IN DETERMINING HOURS WORKED
The following employees are not entitled to overtime
pay, premium pay for rest days and holidays, night shift Compensable Hours Worked
differential pay, holiday pay, service incentive leave and
service charges. Hours worked shall include:

GF-MOM-WPD: a. all time during which an employee is required to be

on duty or to be at a prescribed workplace;
1. Government employees b. all time during which an employee is suffered or
2. Field personnel permitted to work. (Art. 84, LC)
3. Managerial employees
4. Officers and members of the managerial Instances of working time (Poquiz, page 180)
staffMembers of the family of the employer who are
dependent on him for support a. Time spent by the employee for the benefit of the
5. Workers paid by resultsPersons in the personal employer whether such service is necessary or not
service of another; ad such as serving coffee to visitors.
6. Domestic helpers (Secs. 1 and 2, Rule I, Book III, Rules b. Travel time which is in connection with the work of
Implementing the Labor Code.) the employee; otherwise, it is not considered as
working time.
Difference of a “Managerial Employee” in Book III c. Waiting time spent by an employee shall be
and Book V considered as working time if waiting is an integral
part of this work or the employee is required or
Book III Book V engaged by the employer to wait. In effect, he is
Managerial Employees Managerial Employee is under the absolute control of the employer such
refer to those whose one who is vested with that the employee is effectively deprived of the time
primary duty consists of teh powers or to attend other personal pursuits. (Arica v. NLRC,
the management of the prerogative to lay down 170 SCRA 776)
establishment in which and execute d. Sleeping time is compensable working time if the
they are employed or of a management policies nature of the employee's work allows sleeping
department or and/or to hire, transfer, without interrupting or prejudicing the
subdivision thereof, and suspend, lay-off, recall, performance of his work.
to other officers or discharge, assign or e. Time spent by the Union's officers in the collective
members of the discipline employees. bargaining table is not compensable working time,
managerial staff (Art. 82, Supervisory employees unless it is as provided in the CBA.
LC). are those who, in the f. Rest periods running from five to twenty minutes is
interest of the employer, considered as compensable hours worked (Sec. 7,
NOTE: The definition of effectively recommend Rule I, Book III, Rules Implementing the Labor Code)
the managerial such managerial action if
employees includes the exercise of such NORMAL HOURS OF WORK
managerial staf and authority is not merely
supervisors. routinary or clerical in The normal hours of work of any employee shall not
nature but requires the exceed eight (8) hours a day (Art. 83, LC).
use of independent
judgment (Art. 219 (m), The eight-hour work requirement does not, however,
as renumbered). preclude the employer in the exercise of its
The managerial Only managerial management prerogatives to reduce the number of
employees and officers employees are not working hours, provided that there is no diminution of
and members of the entitled to the benefits of existing benefits.

9
 LABOR LAW AND SOCIAL LEGISLATION
XPNs to 8-hour work requirement:
1. Health personnel
GR: 8 hours for 5 days (40-hour workweek), exclusive of
time for meals.
XPN: Where the exigencies of the service require that
such personnel work for 6 days or 48 hours, they shall
be entitled to an additional compensation of at least
30% of their regular wage for work on the 6th day (LC,
Art. 83).
Health personnel covered by the 40-hour workweek
a. Those in cities and municipalities with a population
of at least 1 million; or
b. Those in hospitals and clinics with a bed capacity of
at least 100.
2. Compressed workweek
A reduction of the number of regular working days
(RWD) is valid where the arrangement is resorted to by
the Er to prevent serious losses due to causes beyond his
control, such as when there is a substantial slump in the
demand for his goods or services or when there is a lack
of raw materials. There is one main consideration in
determining the validity of reduction of working hours –
that the company was suffering from losses. (Linton
Commercial v. Hellera, G.R. No. 163147, October 10,
2007).
Conditions where a "compressed workweek"
schedule may be legally authorized as an exception
to the "8-hour a day" requirement under the LC
(2005 BAR)
1. The Ee voluntarily agrees to it
2. There is no diminution in their weekly or monthly
take home pay or fringe benefits
3. The benefits are more than or at least
commensurate or equal to what is due to the Ees
without the compressed work week
4. OT pay will be due and demandable when they are
required to work on those days which should have
ceased to be working days because of the
compressed work week schedule.
5. No strenuous physical exertion or that they are
given adequate rest periods.
6. It must be for a temporary duration as determined
by the DOLE.
Power Interruption/ Brown-outs
Brown-outs of short duration but not exceeding twenty
(20) minutes shall be treated as worked or compensable
hours whether used productively by the employees or
not.
Brown-outs running for more than twenty (20) minutes
may not be treated as hours worked provided ANY of the
following conditions are present:
1. The employees can leave their workplace or go
elsewhere whether within or outside the work
premises; or
2. The employees can use the time effectively for their
own interest (Chan, 2017, p. 112)
10
MEAL BREAKS
It shall be the duty of the every employer to give his
employees not less than sixty (60) minutes time-off for
their regular meals. (Art. 85, LC)
Being time-off, it is not compensable hours worked. The
employee is free to do anything he wants, except to
work. If he required to work while eating, he should be
compensated thereof.
Shortening of Meal Periods
A meal period of not less than 20 minutes may be given
by the employer providded that such shoter meal period
is credited as compensable hours worked of the
employee:
a. Where the work is non-manual in nature or does not
involve strenous physical extension;
b. Where the establishment regularly operates for not
less than 16 hours a day;
c. In case of actual or impending emergencies or when
there is urgent work to be performed on
machinerie, equipments or installations to avoid
serious losses which the employer would otherwise
suffer; and
d. Where the work is necessary to prevent serious loss
of perishable goods.
Efffect of Shortening of Meal Period to less than 20
minutes
The law does not allow that meal period shall be
shortened to less than 20 minutes. If so reduced, the
same shall no longer be considered as meal time but
merely as rest period or coffee breaks and, therefore,
becomes compensable working time.
WAITING TIME
Waiting time considered as working time
1. It is considered working time if waiting is an
integral part of his work; or
2. The Ee is required or engaged by the Er to wait
(engaged to wait)
The controlling factor is whether waiting time spent in
idleness is so spent predominantly for the Er’s benefit or
for the Ee’s.
OVERTIME WORK, OVERTIME PAY
Overtime Work and Overtime Pay
Work may be performed beyond eight hours a day
provided that the employee is paid for the overtime
work, an additional compensation equivalent to to his
regular wage plus at least 25% thereof. Work performed
beyong 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
30% thereof (Art. 87, LC).
Q: Is an employee entitled to overtime pay for work
rendered in excess of eight hours, despite the fact
that his employment contract specifies a 12-hour
workday at a fixed monthly salary rate that is above
the legal minimum rate?
 UST LAW PRE-WEEK NOTES 2017
A: YES. The contract in question is in violation of
pertinent labor laws. And the provisions of the latter
prevail over the terms of the contract. (Pesala v. NLRC,
G.R. No. 105963, 22 August 1996)
Undertime cannot Offset 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
additional compensation. (Art. 88, LC)
Where a worker incurs undertime hours during his
regular daily work, said undertime hours should not be
offset against the overtime hours on the same day or on
any other day. (Azucena, page 233)
The right to overtime pay cannot be waived. The right is
intended for the benefit of the laborers and employees.
Any stipulation in the contract that the labourer shall
work beyond eight hours without additional
compensation for the extra hours is contrary to law and
null and void.
XPNs:
1. When the alleged waiver of overtime pay is in
consideration of benefits and privileges which may
be more than what will accrue to them in overtime
pay, the waiver may be permitted. (Azucena, page
228)
2. Compressed workweek
NOTE:Any work performed beyond 12 hours a day
or 48 hours a week shall be subject to OT premium
Q: The employment contract requires work for more
than 8 hours a day with a fixed wage inclusive of OT
pay. Is that valid?
A: It depends.
1. When the contract of employment requires work for
more than 8 hours at specific wages per day,
without providing for a fixed hourly rate or that the
daily wages include OT pay, said wages cannot be
considered as including OT compensation (Manila
Terminal Co. v. CIR, et al., 91 Phil., 625).
2. However, the employment contract may provide for
a “built-in” OT pay. Because of this, non-payment of
OT pay by the employer is valid(Engineering
Equipment v. Minister of Labor, G.R. No. L-64967,
September 23, 1985).
Q: LKG Garments Inc. makes baby clothes for export.
As part of its measures to meet its orders, LKG
requires its employees to work beyond eight (8)
hours everyday, from Monday to Saturday. It pays its
employees an additional 35% of their regular
hourly wage for work rendered in excess of eight (8)
hours per day. Because of additional orders, LKG
now requires two (2) shifts of workers with both
shifts working beyond eight (8) hours but only up to
a maximum of four (4) hours. Carding is an
employee who used to render up to six (6) hours of
overtime work before the change in schedule. He
complains that the change adversely affected him
because now he can only earn up to a maximum of
four (4) hours worth of overtime pay. Does Carding
11
have a cause of action against the company? (2015
BAR)
A: NO. A change in work schedule is a management
prerogative of LKG. Thus, Carding has no cause of action
against LKG if, as a result of its change to two (2) shifts,
he now can only expect a maximum of four (4) hours
overtime work. Besides, Art. 97 of the Labor Code does
not guarantee Carding a certain number of hours of
overtime work. In Manila Jockey Employees’ Unionv.
Manila Jockey Club (517 SCRA 707), the Supreme Court
held that the basis of overtime claim is an employee’s
having been “permitted to work”. Otherwise, as in this
case, such is not demandable.
NIGHT WORK (R.A. 10151)
NIGHT SHIFT DIFFERENTIAL
Every employee shall be paid 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. (Art. 86, LC)
The burden of proving a claim for night differential pay
rests on the Er. Non-payment of this benefit, to which an
Ee is by law entitled, is a negative allegation which need
not be supported by the evidence. (National
Semiconductor HK Distribution, Ltd. V. NLRC and Santos,
G.R. No. 123520, June 26, 1998)
Pregnant women and nursing mothers may be
allowed to work at night
They are allowed if a competent physician, other than
the company physician, shall certify their fitness to
render night work, and specify, in the case of pregnant
Ees, the period of the pregnancy that they can safely
work.
Waiver of night differential pay in against public policy,
except when it will result to higher or better benefits.
Night differential and overtime pay
When the tour of duty of an employee falls at night time,
the receipt of overtime pay will not preclude the right to
night differential pay. The latter is payment for work
done during the night and the other is payment for the
excess of the regular eight-hour work. (NARIC v NARIC
Workers Union, G.R. No. L-12075, May 29, 1959)
REST PERIODS
Weekly Rest Period
It shall be the duty of the 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.
The employer shall determine and schedule the weekly
rest day of his employees subject to:
1. CBA; and
2. Rules and regulations of the SOLE
The Er shall respect the preference of the employees as
to their weekly rest day when such preference is based
on religious grounds. (Art. 91, LC)
 LABOR LAW AND SOCIAL LEGISLATION

Rest day cannot offset by regular workday. (Lagatic v. employees should be paid 300% of the basic wage for
NLRC, G.R. No 121004, January 28, 1998) both holidays provided he worked on that day or was on
leave of absence with pay or was on authorized absence
HOLIDAY PAY/PREMIUM PAY on the day prior to the regular holiday

Regular holiday and special day distinguished SERVICE CHARGES

a. A covered employee who does not report for work
during regular holidays is paid 100% of his regular
wage. On the other hand, a covered employee who
fails to report for work on a special day (special
holiday) is not entitled to any compensation under
the principle of "no work, no-pay."
b. A covered employee who reports for work on
regular holidays is entitled to 200% of his regular
wage. While, a covered employee who works on
special days (special holidays) is paid an additional
compensation of not less than 30% of his basic pay
or a total of 130%. If the worker has suffered to
work on special days (special holidays) which falls
on his scheduled rest day, he is entitled to an
additional pay equivalent to at least 50% over his
basic pay or a total of 150%.
Double holiday pay
If two regular holidays fall on the same day (such as
Good Friday falling on Araw ng Kagitingan (April 9), the
These are charges collected by hotels, restaurants and
similar establishments at the rate of 85% for covered
Ees equally distributed among them, and 15% for the
management to answer for losses and breakages.
Covered employees
GR: All Ees are covered, regardless of their position,
designation, and employment status, irrespective of the
method by which their wages are paid.
NOTE: Applies only to hotels, restaurants and similar
establishment collecting service charges.
XPN: Managerial Ees
If it is abolished, the share of the covered Ees shall be
considered integrated in their wages on the basis of the
average monthly share of each Ees for the past 12
months immediately preceding the abolition

13th MONTH PAY

It is based on wage but not part of wage.It is imposed as a ‘minimum service requirement’ that the employee should have
worked for atleast one month during a calendar year.

Equivalent forms of the 13th month pay Things not proper substitutes for 13th month pay

1. Christmas Bonus 1. Free rice

2. Midyear Bonus 2. Electricity
3. Profit Sharing Scheme 3. Cash and stock dividends
4. Other Cash bonuses amounting to not less than 4. Cost-of-living Allowance (P.D. 851, Sec. 3)
1/12 of its basic salary

NOTE: It must always be in the form of a legal tender.

Persons covered by P.D. 851

1. Employees
General Rule Exception
All rank-and-file Ees are covered by P.D. 851 regardless Government Ees;
of the amount of basic salary that they receive in a month,
if their Ers are not otherwise exempted from paying the -Ees paid purely on commission basis;
13th month pay. Such Ees are entitled to the 13th month
pay regardless of said designation of employment status, -Ees already receiving 13th month pay
and irrespective of the method by which their wages are
paid. NOTE: Managerial employees are not entitled to 13th
month pay.(House of Sara Lee v. Rey, G.R. No. 149013,
Provided, that they have worked for at least 1 month, August 31, 2006)
during a calendar year
But, managerial employees may receive 13th month pay,
if such payment has been a company practice
Other types of employment entitled to 13th month pay

1. Part-time Employee(Item 5[b], Revised Guidelines of PD 851);

2. Extras;
3. Casual Employee; and
4. Seasonal Employee (BWC Opinion, December 19, 1987)
2. Employers
General Rule Exception

12
 UST LAW PRE-WEEK NOTES 2017

1. The Government and any of its political subdivisions, including GOCCs;

All Ers are covered by PD 581 XPN to XPN: Corporations operating essentially as privated subsidiaries of the
Government

2. Ers already paying their Ees 13th month pay or more in a calendar year ir
its equivalent at the time of the issuance of the Revised Guidelines;
3. Ers of those who are paid on purely basis of:
a. Commission;
b. Boundary; or
c. Task; and
d. Fixed amount for performing a specific work

Note: Irrespective of the time consumed in the performance thereof.

XPN: where the workers are paid on a piece-rate basis, in which case, the employer
shall be covered by the Revised Guidelines insofar as the workers are concerned.

Note: ‘Piece-Rate Workers’ refers to those who are paid a standard amount for
every piece or unit of work produced that is more or less regularly replicated
without regard to the time spent in producing the same.

4. Distressed Ers:
a. Currently incurring substantial losses; or
b. In the case of non-profit institutions and organizations, where their
income, whether from donations, contributions, grants and other
earnings from any source, has consistently declined by more than
40% of their normal income for the last 2 years, subject to the
provision of Sec. 7 of P.D. 851

RETIREMENT PAY

Persons Covered Not Covered

All Ees in the private sector:
1. Regardless of their position, designation or 1. Ees of the National Government and its political
status; and subdivisions, including GOCCs (if they are covered by
2. Irrespective of the method by which their the Civil Service Law);
wages are paid; 2. Ees of retail, service, and agricultural establishments
3. Part-time Ees; or operations employing not more than 10 Ees
4. Ees of service and other job contractors;
5. Domestic Helpers or Persons in the personal
service of another;
6. Underground mine workers(R.A. 8558);
7. Ees of GOCCs organized under the
Corporation Code (without original charters)

ELIGIBILITY
Age specified in (if there is an agreement) If no agreement or in absence of retirement plan
1. CBA; 6. Optional – Upon reaching 60 years old provided that Ee
2. Employment contract; has rendered 5 years of service.; or
3. Retirement plan (IRR, Book VI, Rule II, Sec. 3); or 7. Compulsory – 65 years old, regardless of years of service
4. Optional retirement age of 50years old for
underground mining Ees
5. (compulsory: 60years old)(R.A. 8558)
Superiority of Benefits Rule
Once the Ee retires, it is not Article 287 that is controlling but the retirement plan under the CBA or other applicable
employment contract. (Chan, 2014)

Article 287 becomes relevant only in the matter of ensuring that the retirement benefits are not less than whose
provided therein.(Elegir v. PAL, Inc., G.R. No. 181995, July 16, 2012)

Computation of retirement benefits in the absence of an applicable agreement or retirement plan

A retiree is entitled to a retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at
least 6 months being considered as 1 whole year (R.A. 7641).(BAR 2001)

Note: Unlike the public sector, there is no law allowing for commutation of unused or accrued sick leave credits in the
private sector. Commutation in the private sector is allowed only by way of voluntary endowment by an employer
through company policy or by a Collective Bargaining Agreement (CBA). (Paloma v. PAL, G.R. No. 148415, July 14, 2008)

13
 LABOR LAW AND SOCIAL LEGISLATION
WAGES
“No Work, No Pay” Principle (Fair day’s wage for a
fair day’s labor); Basis of payment.
GR: If there is no work performed by the Ee, without the
fault of the Er, there can be no wage or pay.
XPNs: The laborer was able, willing and ready to work
but was:
1. Prevented by management;
2. Illegally locked out;
3. Illegally suspended;
4. Illegally dismissed
5. Illegally prevented from working (Aklan Electric
Coop. v. NLRC, G.R. No. 129246, January 10, 2000).
Bonus
GR: The payment of bonus is a management function,
not a demandable and enforceable obligation, which
cannot be enforced upon the employer who may not be
obliged to assume the onerous burden of granting
bonuses or other benefits aside from the employee’s
basic salaries or wages. (Philippine National
Construction Corporation v. NLRC, G.R. No. 128345, May
18, 1999)
XPN: Bonuses can be demanded as a matter of right if:
a. given without any condition; hence, part of the wage
or salary (Atok Big Wedge Mining Co., Inc. v. Atok Big
Wedge Mutual Benefit Assn., G.R. No. L-7349 , July 19,
1955)
b. grant thereof is a result of an agreement such as the
CBA (Grey v. Insular Lumber, G.R. No. L-45144, April
3, 1939)
c. given on account of company policy or practice
(Claparols v. CIR, G.R. No. L-3082, July 31, 1975)
d. grant is mandated by law
e. Bonus is not considered part of wages if it is paid
only upon realization of profits or amount of
production or output. (Atok Big Wedge Mining Co.,
Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No.
L-7349 , July 19, 1955)
Voluntary and contractual bonuses can be credited for
the purpose of determining liability for the 13 th month
pay.
Bersamin Cases:
Q: Netlink Computer, Inc. hired Eric as account
manager with the task to canvass and source clients
and convince them to purchase its products and
services. He was able to generate sales worth
P35,000,000.00, more or less, from which he earned
commissions amounting to P993,558.89 and
US$7,588.30. He then requested payment of his
commissions, but Netlink refused and only gave him
partial cash advances chargeable to his
commissions. Eric was refused entry into the
company premises by the security guard pursuant
to a memorandum detailing his infractions of the
company’s attendance policy, which prompted him
to file a complaint for illegal dismissal. Since the
courts favored Eric, he sought for payment of the
commissions. Netlink contested that the
14
commission in US should be paid using the exchange
rate at the time of sale and not at the time of
payment. Should the commissions in US dollars be
paid using the exchange rate at the time of sale?
A: NO. The rate of exchange at the time of payment, not
the rate of exchange at the time of the sales, controls.
This conforms to the principle of non-diminution of
benefits, which has been incorporated in Article 100 of
the Labor Code. As a general rule, all obligations shall be
paid in Philippine currency. However, the contracting
parties may stipulate that foreign currencies may be
used for settling obligations, pursuant to RA 8183. Since
there was no written contract between Netlink and Eric
stipulating that the latter’s commissions should be paid
in US dollars and since Netlink had the practice of paying
its sales agents in US dollars for their US dollar-
denominated sales, he has the right to be paid in such
foreign currency. (Netlink Computer, Inc. v. Delmo, G.R.
No. 160827, 18 June 2014)
Q: Defensor is employed as Group Publisher in
MMPI. In the belief that her proposal for a special
incentive scheme had been approved and
implemented for the year 1999 by Yap (MMPI’s
Executive VP), she filed a complaint against MMPI
for non-payment of bonus and incentive
compensation with damages, specifically
demanding the payment of sales commissions, 14th
month pay, and her share in the incentive scheme
for the advertising and sales staff. The LA dismissed
the complaint. The NLRC denied the appeal for lack
of merit. Hence, Defensor filed a motion for
reconsideration and a supplement to the motion for
reconsideration. In the supplement, she included a
motion to admit additional evidence, i.e., the
affidavit of one Lie Tabingo aimed to rebut the
MMPI’s claim that its gross revenue was only P31,
947, 677.00 and did not reach the minimum P35
million necessary for the grant of the Defensor’s
outright commissions and the special incentive
bonus for the sales staff, inclusive of Defensor. The
NLRC denied Defensor’s motions for
reconsideration. The CA initially affirmed NLRC’s
resolution but later on overturned its decision. The
CA opined that the NLRC had committed a grave
abuse of discretion in finding that there had been no
special incentive scheme approved and
implemented for 1999, and in disallowing the
respondent from presenting additional evidence
that was crucial in establishing her claim about
MMPI’s gross revenue.
a) Is Defensor entitled to the commissions and the
incentive bonus being claimed?
b) Confronted with the conflicting claims on MMPI’s
gross revenue realized in 1999, must Defensor’s
evidence (Lie Tabingo’s affidavit) be given more
weight?
A: a) NO. Due to the nature of the bonus or special
incentive being a gratuity or act of liberality on the part
of the giver, Defensor could not validly insist on the
schedule proposed in her memorandum of April 5, 1999
considering that the grant of the bonus or special
incentive remained a management prerogative.
However, the Court agrees with the CA’s ruling that the
petitioners had already exercised the management
prerogative to grant the bonus or special incentive. At no
instance did Yap flatly refuse or reject the respondent’s
 UST LAW PRE-WEEK NOTES 2017
request for commissions and the bonus or incentive.
This is plain from the fact that Yap even "bargained"
with the respondent on the schedule of the rates and the
revenues on which the bonus or incentive would be
pegged. What remained contested was only the schedule
of the rates and the revenues.
b) YES. The degree of proof required in labor cases is not
as stringent as in other types of cases. This liberal
approach affords to the employee every opportunity to
level the playing field in which her employer is pitted
against her. Here, on the one hand, were Tabingo’s
memorandum and affidavit indicating that MMPI’s
revenues in 1999 totaled P36, 216, 624.07, and, on the
other, the audit report showing MMPI’s gross revenues
amounting to only P31, 947, 677.00 in the same year.
That the audit report was rendered by the auditing firm
of Punongbayan & Araullo did not make it weightier
than Tabingo’s memorandum and affidavit, for only
substantial evidence – that amount of relevant evidence
which a reasonable mind might accept as adequate to
justify a conclusion was required in labor adjudication.
Moreover, whenever the evidence− presented by the
employer and that by the employee are in equipoise, the
scales of justice must tilt in favor of the latter.For
purposes of determining whether or not the petitioners’
gross revenue reached the minimum target of P35
million, therefore, Tabingo’s memorandum and affidavit
sufficed to positively establish that it did, particularly
considering that Tabingo’s memorandum was made in
the course of the performance of her official tasks as a
traffic clerk of MMPI. In her affidavit, too, Tabingo
asserted that her issuance of the memorandum was
pursuant to MMPI’s year-end procedures, an assertion
that the petitioners did not refute. (MMPI v. Defensor,
G.R. No. 162021, June 16, 2014)
WAGE v. SALARY
The distinction between salary and wage in Gaa v. Court
of Appeals, G.R. No. L-44169 December 3, 1985, was only
for the purpose of Art. 1708 of the Civil Code which
mandates that "laborer's wages shall not be subject to
execution or attachment except for debts incurred for
food, shelter, clothing and medical attendance." In labor
law, the distinction is only a matter of semantics. It is
settled that wage and salary are synonymous. Likewise,
the term "pay" is also synonymous with wage and salary.
(Equitable PCI v Sadac, G.R. No. 164772, 8 June 2006)
MINIMUM WAGE DEFINED,
MINIMUM WAGE SETTING
Minimum wage
Statutory minimum wage is the lowest wage rate fixed
by law that an Er can pay his workers.
a. From Er’s standpoint – a minimum wage is
economically feasible if it will not prevent the
industry from operating efficiently and
prosperously over the long run (Dir. Harry Kantor’s
analysis of Senate Bill No. 202 and House Bill No.
1732);
b. From Ee’s standpoint – an economically feasible
minimum wage should be as nearly adequate to
maintain the minimum standard of living necessary
for the health, efficiency and general well-being of
employees.
15
Persons exempted from the coverage of fixing a
minimum wage
1. Homeworkers engaged in needle-work;
2. Workers employed in any establishment duly
registered with the National Cottage Industries and
Development Authority, provided that such
workers perform the work in their respective
homes;
3. Workers in a duly registered cooperative when so
recommended by the Bureau of Cooperative
Development and upon approval of the SLE (IRR of
LC, Book III, Rule VII, Sec. 2).
4. Workers of a barangay micro business enterprise
(R.A. 9178).
Minimum wage non-negotiable; non waivable
The minimum wage fixed by law is mandatory; thus it is
non-waivable and non-negotiable. The enactment is
compulsory in nature in order to ensure decent living
conditions (PAM Co. v, PAMEA-FFW, 51 SCRA 98).
Wage deductions
GR: No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his
employees (LC, Art. 113).
XPNs:
1. Deductions under Art. 113 of the LC for insurance
premiums.
2. Union dues in cases where the right of the worker
or his union to check-off has been recognized by the
Er or authorized in writing by the individual worker
concerned (LC, Art. 113).
3. Deductions for SSS, PhilHealth and Pag-ibig
premiums
4. Taxes withheld pursuant to the Tax Code
5. Deductions under Art. 114 of the LC for loss or
damage to tools, materials or equipment supplied
by the employer when the latter is engaged in such
trades, occupations or businesses where the
practice of making deductions or requiring deposits
is a recognized one or is necessary or desirable as
determined by SLE
6. Deductions made with the written authorization of
the Ee for payment to a third person (IRR, Book III,
Rule VIII, Sec 13).
7. Deductions as disciplinary measures for habitual
tardiness (Opinion dated March 10, 1975 of the
Labor Secretary).
8. Agency fees under Art. 248(e)of the LC
9. Deductions for value of meals and facilities freely
agreed upon
10. In case where the Ee is indebted to the Er where
such indebtedness has become due and demandable
(NCC, Art. 1706).
11. In court awards, wages may be subject of execution
or attachment, but only for debts incurred for food,
shelter, clothing, and medical attendance (NCC, Art.
1703).
12. Salary deduction of a member of a legally
established cooperative (R.A. 6938; LC, Art. 59).
NON-DIMINUTION OF BENEFITS
Diminution of benefits is the unilateral withdrawal by
the employer of benefits already enjoyed by the
 LABOR LAW AND SOCIAL LEGISLATION

employees. There is diminution of benefits when it is obliterate the distinction embodied in such wage
shown that: structure based on skills, length of service or other
logical bases of differentiation. (Art. 124, LC)
1. the grant or benefit is founded on a policy or has
ripened into a practice over a long period; It is the disappearance or virtual disappearance of pay
2. the practice is consistent and deliberate; differentials between lower and higher positions in an
3. the practice is not due to error in the construction enterprise because of compliance with a wage order.
or application of a doubtful or difficult question of (P.I. Manufacturing v. P.I. Manufacturing Supervisors and
law; and Foreman, G.R. No. 167217, February 4, 2008)
4. the diminution or discontinuance is done
unilaterally by the employer. Wage distortion is non-strikeable. WD is neither a
deadlock in collective bargaining nor ULP.
An erroneously granted benefit may be withdrawn
without violating the prohibition against nondiminution Bersasmin Case:
of benefits.
Q: Pursuant to the enactment of Republic Act No.
Benefit acquired through company practice 6727 on June 9, 1989, the RTWPB-NCR issued Wage
Order No. NCR-07 on October 14, 1999 imposing an
An employee can demand as a matter of right benefits increase of P25.50/day on the wages of all private
granted by the employer for a considerable, long period sector workers and employees in the NCR and
of time as the same may ripen into a company pegging the minimum wage rate in the NCR at
practice.(Globe Mackay v. NLRC, 163 SCRA 71) P223.50/day. However, Section 2 and Section 9 of
Wage Order No. NCR-07 exempted certain sectors
FACILITIES v. SUPPLEMENTS and industries from its coverage. Feeling aggrieved
by their non-coverage by the wage adjustment, the
Facilities Supplements Alliance of Progressive Labor (APL) and the Tunay
Includes articles and Extra renumeration or na Nagkakaisang Manggagawa sa Royal (TNMR)
services for the benefit of special privileges or filed an appeal with the NWPC assailing Section 2(A)
the employee or his benefits given to or and Section 9(2) of Wage Order No. NCR-07. They
family but does not received by the laborers contended that neither the NWPC nor the RTWPB-
include tools of trade or over and above their NCR had the authority to expand the non-coverage
articles or services ordinary earnings or and exemptible categories under the wage order;
primary for the benefit of wages. hence, the assailed sections of the wage order
the employer or should be voided. NWPC upheld the validity of
necessary to the conduct Section 2(A) and Section 9(2) of Wage Order No.
of employer’s business. NCR-07. The NWPC denied the appeal of APL and
TNMR for its lack of merit. It also denied TNMR’s
Supplements not part of wages motion for reconsideration. However, the CA
granted the petition for certiorari, holding that the
Supplements are extra remunerations or benefits given powers and functions of the NWPC and RTWPB-NCR
to an employee such as vacation leave pay, overtime pay as set forth in Republic Act No. 6727 did not include
in excess of the legal rate, profit-sharing benefits, sick the power to grant additional exemptions from the
pension, retirement and death benefits, family adjusted minimum wage.
allowances, Christmas bonus, war-risk or cost-of-living
bonuses or other bonuses other than those paid as a) Did RTWPB-NCR have the authority to provide
reward for extra output or time spent on the jobs (Atok additional exemptions from the minimum wage
Big Wedge Mining Co., G.R. No. L-7349 , July 19, 1955). adjustments embodied in Wage Order No. NCR-07?
Since they are not considered as part of wages, their
value cannot be deducted from the cash wage of an b) Did Wage Order No. NCR-07 comply with the
employee. requirements set by NWPC Guidelines No. 01, Series
of 1996?
Requirements for deducting values for facilities
A: a) YES. Under the guidelines, the RTWPBs could issue
1. Proof must be shown that such facilities are exemptions from the application of the wage orders as
customarily furnished by the trade long as the exemptions complied with the rules of the
2. The provision of deductible Facilities must be NWPC. In its rules, the NWPC enumerated four
voluntarily accepted in writing exemptible establishments, but the list was not
3. The Facilities must be charged at fair and exclusive. The RTWPBs had the authority to include in
reasonable value (Mabeza v. NLRC, G.R. No. 118506, the wage orders establishments that belonged to, or to
April 18, 1997). exclude from the four enumerated exemptible
categories. If the exempted category was one of the
WAGE DISTORTION/RECTIFICATION listed ones, the RTWPB issuing the wage order must see
to it that the requisites stated in Section 3 and Section 4
Concept of Wage Distortion (WD) of the NWPC Guidelines No. 01, Series of 1996 were
complied with before granting fully or partially the
Contemplates a situation where an increase in application of an establishment seeking to avail of the
presecribed wage rates results in the elimination or exemption. On the other hand, if the exemption was
severe contraction of the intentional quantitative outside of the four exemptible categories, like here, the
difference in wage or salary rates between and among exemptible category should be: (1) in accord with the
employee groups in an establishment as to effectively rationale for exemption; (2) reviewed/approved by the

16
 UST LAW PRE-WEEK NOTES 2017
NWPC; and (3) upon review, the RTWPB issuing the
wage order must submit a strong and justifiable reason
or reasons for the inclusion of such category.
In creating the RTWPBs, Congress intended to
rationalize wages, firstly, by establishing full time
boards to police wages round-the-clock, and secondly,
by giving the boards enough powers to achieve this
objective. In Employers Confederation of the Phils. v.
National Wages and Productivity Commission, this Court
all too clearly pronounced that Congress meant the
RTWPBs to be creative in resolving the annual question
of wages without Labor and Management knocking on
the doors of Congress at every turn. The RTWPBs are the
thinking group of men and women guided by statutory
standards and bound by the rules and guidelines
prescribed by the NWPC. In the nature of their functions,
the RTWPBs investigate and study all the pertinent facts
to ascertain the conditions in their respective regions.
Hence, they are logically vested with the competence to
determine the applicable minimum wages to be
imposed as well as the industries and sectors to exempt
from the coverage of their wage orders.
b) YES. Wage Order No. NCR-07 is presumed to be
regularly issued in the absence of any strong showing of
grave abuse of discretion on the part of RTWPB-NCR.
The presumption of validity is made stronger by the fact
that its validity was upheld by the NWPC upon review.
(NWPC v. APL, G.R. No. 150326, March 12, 2014)
LEAVES
SERVICE INCENTIVE LEAVE
Service incentive leave (SIL)
It is 5-days leave with pay for every Ee who has
rendered at least 1 year of service. It is commutable to
its money equivalent if not used or exhausted at the end
of the year.
“At least 1 year of service”: Service for not less than 12
months, whether continuous or broken reckoned from
the date the Ee started working, including authorized
absences and paid regular holidays unless the working
days in the establishment as a matter of practice or
policy, or that provided in the employment contract is
less than 12 months, in which case said period shall be
considered as one year. (Sec. 3, Rule V, Book III, IRR)
Where the leave benefit is other than service incentive
leave and is a result of an individual/collective
agreement or employer practice or policy, its equivalent
if unused shall be computed as stipulated in the
agreement or policy. (In re: Maxim's Tea House, Opinion
of the Bureau of Working Conditions, 8 March 1988)
A part-time worker is entitled to service incentive leave
whether the service within 12 months is continuous or
broken or where the working days in the employment
contract as a matter of practice or plicy is less than 12
months.
Establishments employing less than 10 Ees are
exempted by the LC and the Implementing Rules from
paying SIL. The clear policy of the LC is to include all
establishments, except a few classes, under the coverage
of the provision granting SIL to workers. (Murillo v. Sun
Valley Realty, Inc., G.R. No. L-67272 June 30, 1988)
17
Commutability of SIL to monetary equivalent
It is commutable if not used at the end of the year. It is
aimed primarily at encouraging workers to work
continuously and with dedication to the company.
MATERNITY LEAVE
Governing Law: R.A. No. 8292 (Social Security Act)
Maternity Leave is the period of time which may be
availed of by a woman employee, married or unmarried,
to undergo and recuperate from childbirth, miscarriage,
or complete abortion during which she is permitted to
retain her rights and benefits flowing from her
employment.
Requirements in order that maternity benefits may
be claimed
1. The female member should be employed at the time
of delivery, miscarriage or abortion;
2. She must have notified SS through her employer;
and
3. She has paid at least three months of maternity
contributions within the 12-month period
immediately before the semester of contingency
Entitlement to maternity leave benefits is not dependent
on the civil status of the pregnant woman. Entitlement
to maternity benefi forecloses entitlement to sick
benefit.
Maternity leave benefits excluded in the computation of
13th month pay.
Self-employed members not entitled to maternity leave
benefits since Voluntary or self-employed members
have no employers to remit such contributions.
However, if they have qualifying contributions using the
new contribution schedule, they shall be entitled to
maternity benefits.
PATERNITY LEAVE
Governing Law: R.A. No. 8187 (Paternity Leave Act of
1996)
Patenity leave covers a married male employee allowing
him not to report for work for seven (7) CALENDAR
DAYS but continues to earn the compensaation thereof,
on the condition that his spouse has delivered a child or
suffered miscarriage for purposes of enabling him to
effectively lend support to his wife in her period of
recovery and/or in the nursing of the newly-born child.
This leave applies only to the first four deliveries of the
LEGITIMATE SPOUSE with whom he is cohabiting.
In the event it is not availed of, such leave is not
convertible to cash. (RA 8187)
PARENTAL LEAVE FOR SOLO PARENTS
Governing Law: R.A. No. 8972 (The Solo Parent’s
Welfare Act of 2000)
Parental leave
 LABOR LAW AND SOCIAL LEGISLATION

Leave benefits granted to a solo parent to enable No-spouse employment policy may or may not
him/her to perform parental duties and responsibilities violate provisions of the LC
where physical presence is required.
GR: It may not facially violate Art. 136 of the LC but it
In addition to leave privileges under existing laws, creates a disproportionate effect and the only way it
parental leave of not more than 7 working days every could pass judicial scrutiny is by showing that it is
year shall be granted to any solo parent Ee who has reasonable despite the discriminatory and
rendered service of at least 1 year. (Sec. 8, RA 8972) disproportionate effect.

Conditions for entitlement of parental leave XPN: Bona fide occupational qualification rule (BFOQR)

1. He or she must fall among those referred to as a solo
parent
2. Must have the actual and physical custody of the
child or children
3. Must have at least rendered service of one year to
his or her employer
4. He or she must remain a solo parent
LEAVES FOR VICTIMS OF VIOLENCE AGAINST
WOMEN and their CHILDREN (R.A. 9262)
A female Ee who is a victim of violence (physical, sexual,
or psychological) is entitled to a paid leave of 10 days in
addition to other paid leaves (R.A. 9262, Anti- VAWC Act).
This is known as the battered woman leave.
NOTE: There must be a finding of any BFOQ to justify an
Er’s no spouse employment rule, the Er must prove two
factors:
1. That the employment qualification is reasonably
related to the essential operation of the job
involved; and
2. That there is a factual basis for believing that all or
substantially all persons meeting the qualification
would be unable to properly perform the duties of
the job (Star Paper v. Simbol, G.R. No. 164774, April
12, 2006).
ANTI-SEXUAL HARASSMENT ACT
(R.A. 7877)

SPECIAL LEAVE BENEFIT FOR WOMEN The definition of sexual harassment does not
require a categorical demand or request for sexual
A woman Ee having rendered continuous aggregate favor
employment service of at least 6 months for the last 12
months shall be entitled to a special leave benefit of 2 It may be discerned, with equal certitude, from the acts
months with full pay based on her gross monthly of the offender.
compensation following surgery caused by
gynaecological disorders (Sec. 18, R.A. 9710, Magna Likewise, it is not essential that the demand, request or
Carta of Women) requirement be made as a condition for continued
employment or for promotion to a higher position. It is
WOMEN WORKERS enough that the respondent’s acts result in creating an
intimidating, hostile or offensive environment for the
Discriminatory Acts Against Women Ees employee (Domingo v. Rayala, G.R. No. 155831, February
18, 2008).
Re: terms and Stipulating as condition
conditions of or continuation of Nothing under R.A. 7877 shall preclude the victim of
employment on employment work, education or training-related Sexual Harassment
account of sex from instituting a separate and independent action for
a. Discrimination in That a woman Ee shall not damages and other affirmative relief.
pay; get married, or
b. Discrimination in An act of Sexual Harassment may give rise to civil,
employment That upon marriage, such criminal and administrative liability on the part of the
opportunity; woman Ee shall be deemed offender, each proceeding independently of the others.
c. Discrimination in resigned or separated
hiring; Prescription of action: The civil, criminal and
d. Discrimination in administrative action shall prescribe in 3 years.
dismissal
(Poquiz, 2012) EMPLOYMENT OF MINOR WORKERS;ACT AGAINST
CHILD LABOR (R.A. 9231) AND CHILD ABUSE LAW
NOTE: Discrimination in any form from pre- (R.A. 7610)
employment to post-employment, based on the actual,
perceived or suspected HIV status of an individual is GR:
unlawful (Philippine AIDS Prevention and Control Act of
1998, R.A. 8504). 1. No person under 18 years of age will be allowed to
be employed in an undertaking which is hazardous
Standard of reasonable test or deleterious in nature.
2. No Er shall discriminate against any person in
The Er has the burden of proof to prove the existence of respect to terms and conditions of employment on
a reasonable business necessity that would justify an account of his age.
employment policy. (Star Paper Corp. v. Simbol, G.R. No.
164774, April 12, 2006). XPNs:

STIPULATION AGAINST MARRIAGE A. Below 15 yrs. Old

18
 UST LAW PRE-WEEK NOTES 2017
1. The child works directly under the sole
responsibility of his parents or legal guardian and
where only members of the family are employed,
subject to the following conditions:
a. Employment does not endanger the child’s
safety, health and morals
b. Employment does not impair the child’s normal
development
c. Er-parent or legal guardian provides the child
with the primary and/or secondary education
prescribed by the Department of Education
2. The child’s employment or participation in public
entertainment or information through cinema,
theater, radio or television is essential provided:
a. Employment contract is concluded by the
child’s parents or legal guardian,
b. With the express agreement of the child
concerned, if possible, and
c. The approval of DOLE, the following must be
complied with:
i. The employment does not involve
advertisement or commercials promoting
alcoholic beverages, intoxicating drinks,
tobacco and its by-products or exhibiting
violence
ii. There is a written contract approved by
DOLE
iii. The conditions provided in the first instance
are met
B. Above 15 but below 18 – May be employed in any
non-hazardous work
C. Above 18 – No prohibition
Q: Determine whether the following minors should
be prohibited from being hired and from
performing their respective duties indicated
hereunder:
a. A 17-year old boy working as miner at the
Walwadi Mining Corporation.
b. An 11-year old boy who is an accomplished
singer and performer in different parts of the
country.
c. A 15-year old girl working as a library assistant
in a girls' high school.
d. A 16-year old girl working as model promoting
alcoholic beverages.
e. A 17-year old boy working as a dealer in a
casino. (2006 BAR)
A:
a. YES. He should be prohibited from being hired and
from performing the duties of a miner because such
constitutes hazardous work under D.O. No. 04
Series of 1999. Art. 139(c) of LC expressly prohibits
the employment of persons below 18 years of age in
an undertaking which is hazardous or deleterious in
nature as determined by the SLE.
b. NO. He should not be prohibited from being hired
and from performing as a singer. Under Art. VIII Sec.
12(2) of R.A. 7619 as amended by R.A. 7658, this
constitutes an exception to the general prohibition
against the employment of children below 15 years
19
of age, provided that the following requirements are
strictly complied with:
1. The Er shall ensure the protection, health safety
and morals of the child
2. The Er shall institute measures to prevent the
child’s exploitation or discrimination taking
into account the system and level of
remuneration, and the duration and
arrangement of working time; and
3. The Er shall formulate and implement, subject
to the approval and supervision of competent
authorities, a continuing program for training
and skill acquisition of the child. Moreover, the
child must be directly under the sole
responsibility of his parents or guardian and his
employment should not in any way interfere
with his schooling.
c. NO. She should not be prohibited from working as a
library assistant because the prohibition in the LC
against employment of persons below 18 years of
age merely pertains to employment in an
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by the
SOLE. Working as a library assistant is not one of
undertakings identified to be hazardous under D.O.
No 04 Series of 1999.
d. YES. She should be prohibited from working as a
model promoting alcoholic beverages. R.A. 7610
categorically prohibits the employment of child
models in all commercials or advertisements
promoting alcoholic beverages and intoxicating
drinks, among other things.
e. YES. He should be prohibited from working as a
dealer in casino, because Art. 140 of the LC prohibits
the employment of persons below 18 years of age in
an undertaking which is hazardous or deleterious in
nature identified in the guidelines issued by the SLE.
Working as a dealer in a casino is classified as
hazardous under D.O. No. 04 Series of 1999 as it
exposes children to physical, psychological or
sexual abuses.
EMPLOYMENT OF HOUSEHELPERS and
HOMEWORKERS
Covered Not Covered
All kasambahay 1. Service providers
engaged in domestic 2. Family drivers
work, whether on a 3. Children under foster
live-in or live-out family arrangement
arrangement (BAR 2015); and
4. Any other person who
performs work
occasionally or
sporadically and not on
an occupational and
regular basis.
Domestic workers cannot acquire regularity of
employment under RA 10361
All the indicia of regularity of employment remain
absent in the employment of domestic helpers. (Chan,
2017)
XPN: The Supreme Court already held that the mere fact
that the househelper is working in relation to or in
connection with its business warrants the conclusion
that such househelper or domestic servant is and should
be considered as a regular employee. (Remington
 LABOR LAW AND SOCIAL LEGISLATION

Industrial Sales Corp. v. Castaneda, G.R. 169295-96, Highly technical

November 20, 2006) Semi- industries and
skilled/Industrial only in
Coverage
The kasambahay is entitled to a total daily rest period occupations industrial
of at least 8 hours. The Er cannot require the occupation
kasambahay to work beyond 16 hours at any given There is a list of
workday in return for an equivalent hourly rate. The learnable trades No list
eight-hour rest period must be observed. List
by TESDA
Requires Requires
The kasambahay is entitled to 13th month pay after 1 Written learnership apprenticeship
month of service. agreement agreement agreement
Prior Not required. Only Requires TESDA
GR: The Er shall pay the SSS premium, and PHILHEALTH TESDA inspection from approval for
and PAG-IBIG contributions of the kasambahay approval TESDA is required validity

XPN: If the wage of the kasambahay is Php 5,000.00 or PERSONS WITH DISABILITY
more, the kasambahay will pay his/her share in the (R.A. 7277 as amended by R.A. 9442)
premiums/contributions.
No PWD shall be denied access to opportunities for
Househelpers v. Homeworkers sutable employment. Handicaped workers are entitled to
not less than seventy-five percent (75%) of the applicable
HOUSE HELPERS HOMEWORKERS adjusted minimum wage. (Article 80, LC)
Performs in or about his
own home any processing Persons with disability (PWD)
or fabrication of goods or
Minister to the personal materials, in whole or in Those whose earning capacity is impaired by:
needs and comfort of his part, which have been 1. Physical deficiency
Er in the latter’s home furnished directly or 2. Age
indirectly, by an Er and 3. Injury
sold thereafter to the 4. Disease
latter. 5. Mental deficiency
6. Illness
APPRENTICES AND LEARNERS
NOTE: Low I.Q. does not make a worker ‘handicapped’
Learnership v. Apprenticeship (2000 BAR)

BASIS Learnership Apprenticeship TERMINATION OF EMPLOYMENT

Training on the
job in semi-skilled Training in EMPLOYER-EMPLOYEE RELATIONSHIP
and other trades which are
industrial apprenticeable, FOUR- FOLD TEST
occupation or that is, practical
trades which are training on the The four–fold test (indicia of determination):
non- job
apprenticeable supplemented 1. Selection and engagement of the employee;
Nature
and which may be by related 2. Payment of wages;
learned thru theoretical 3. Power of dismissal; and
practical training instruction for 4. Power of control (Azucena, Vol. I).
on the job in a more than 3
relatively short months. Among the four, the control test assumes primacy in the
period of time. overall consideration. The power of control is the right
Duration Min: 3 months to control not only the end to be achieved but also the
Max: 3 months
(training) Max: 6 months means to be used in reaching such end. (Locsin v. PLDT,
With commitment G.R. No. 185251, October 2, 2009)
to employ the
learner as a Not every form of control establishes employer-
Commitm No commitment
regular Ee if he employee relationship. A demarcation line should be
ent to to hire
desires upon drawn between: (a) rules that merely serve as guidelines
employ which only promote the result, and (b) rules that fix the
completion of
learnership methodology and bind or restrict the party hired to the
Considered a use of such means or methods. Under the first category,
regular Ee if pre- there exists no employer-employee relationship. In the
termination second category, it has the effect of establishing
In case of employer-employee relationship (Insular life v. NLRC,
occurs after2 Worker not
pre- 179 SCRA 439; Consulta v. CA, G.R. No. 145443, March 18,
months of considered as
terminatio 2005).
training and the regular Ee.
n of con
dismissal is
tract Two-tiered test
without fault of
the Learner.

20
 UST LAW PRE-WEEK NOTES 2017
1. The putative Er’s power to control the Ee with
respect to the means and methods by which the
work is to be accomplished (Four-fold test);
2. The underlying economic realities of the activity or
relationship (economic reality test).
Application of the four-fold test and the two-tiered
test
Present Philippine law recognizes a two-tiered test. The
first tier of the test is the four-fold test. The second tier
is the economics of the relationship test. But the latter
test is used if and only if there is going to be harshness
in the results because of the strict application of the
four-fold test. It is especially appropriate in this case
where there is no written agreement or terms of
reference to base the relationship on and due to the
complexity of the relationship. (Francisco v. NLRC, G.R.
No. 170087, August 31, 2006).
Bersamin Case:
Q: Charlie maintained that BCC and its President,
Terrance, employed him as comptroller starting
from September 1995 to handle the financial aspect
of BCCs business; that on October 1995, the security
guards of BCC, acting upon the instruction of
Terrance, barred him from entering the premises of
BCC where he then worked; that his attempts to
report to work in November and December 1995
were frustrated because he continued to be barred
from entering the premises of BCC; and that he filed
a complaint in December 1995 for illegal dismissal,
reinstatement with full backwages, non-payment of
wages, damages and attorney’s fees. BCC and
Terrance countered that Charlie was not their
employee but the employee of Sobien Food
Corporation (SFC), the major creditor and supplier
of BCC; and that SFC had posted him as its
comptroller in BCC to oversee BCC’s finances and
business operations and to look after SFC’s interests
or investments in BCC. Is Charlie an employee of
BCC?
A: NO. It can be deduced that BCC and Terrance did not
exercise the power of control over him, because he
thereby acted for the benefit and in the interest of SFC
more than of BCC. In addition, Charlie presented no
document setting forth the terms of his employment by
BCC. Charlie admitted that he did not receive his salary
for the three months of his employment of BCC.
Moreover, his name did not appear in the payroll of BCC
despite him having approved the payroll as comptroller.
Lastly, the confusion about the date of his alleged illegal
dismissal provides another indicium of the insincerity of
Charlie’s assertion of employment by BCC. The wide gap
between October 19, 1995 and December 12, 1995
cannot be dismissed as a trivial inconsistency
considering that the several incidents affecting the
veracity of his assertion of employment by BCC earlier
noted transpired in that interval. (Jao v. BCC Products
Sales Inc. and Ty, G.R. No. 163700, April 18, 2012)
KINDS OF EMPLOYMENT
PROBATIONARY EMPLOYMENT
Probationary employment
Employment where the Ee, upon his engagement:
21
1. Is made to undergo a trial period;
2. During which the Er determines his fitness to
qualify for regular employment; and
3. Based on reasonable standards made known to the
Ee at the time of engagement (IRR, Book VI, Rule I,
Sec 6).
Rules on probationary employment
1. Er shall make known to the Ee at the time he is hired,
the standards by which he will qualify as a regular
Ee;
2. An Ee allowed to continue work after the
probationary period shall be considered a regular
Ee;
3. During the probationary period, the Ee enjoys
security of tenure; his services can only be
terminated for just or authorized causes and when
he fails to qualify as a regular Ee in accordance with
reasonable standards made known by the Er to the
Ee at the time of his engagement (ICMC v. NLRC, G.R.
No. 72222, January 30, 1989; LC, Art. 281).
GR: It shall not exceed 6 months.
XPNs:
1. Covered by an Apprenticeship or Learnership
agreement stipulating a different period
2. Voluntary agreement of parties (especially when
the nature of work requires a longer period)
3. The Er gives the Ee a second chance to pass the
standards set (Mariwasa Manufacturing, Inc. v.
Leogardo, Jr., G.R. No. 74246, January 26, 1989).
4. When the same is required by the nature of the
work, e.g. the probationary period set for
professors, instructors and teachers is 3
consecutive years of satisfactory service pursuant
to DOLE Manual of Regulations for Private Schools.
5. When the same is established by company policy.
NOTE: After the lapse of the probationary period (6
months), Ee becomes regular.
The Er and Ee may validly agree to extend the
probationary period beyond six months. Such an
extension may be lawfully agreed upon. Extension is
allowed only when:
1. Nature of the job requires extensive training, or
2. If it is a company policy that the period of
probationary employment should be an extended
period
Double or successive probation is NOT allowed.
The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in
accordance with reasonable standards made known by
the employer to the employee at the time of his
engagement. If the probationary employee is being
terminated for just cause, he must, of course, be given
due process before his termination. (Enchanted
Kingdom, Inc. v. Verzo G.R. No. 209559, December 09,
2015)
REGULAR EMPLOYMENT
TYPES OF REGUAR EMPLOYMENT
 LABOR LAW AND SOCIAL LEGISLATION

NATURE OF WORK YEARS OF SERVICE 1. There is a continuous rehiring of project Ee’s even
An employment shall be Any Ee who has rendered after cessation of a project; and
deemed to be regular at least one year of service, 2. The tasks performed by the alleged “project Ee” are
where the Ee has been whether such service is vital, necessary and indispensable to the usual
engaged to perform continuous or broken, shall business or trade of the Er (D.M. Consunji, Inc. v.
activities which are usually be considered a regular Ee JAMIN, G.R. No. 192514, April 18, 2012).
necessary or desirable in with respect to the activity
the usual business or trade in which he is employed The length of time during which the Ee was continuously
of the Er, the provisions of and his employment shall re-hired is not controlling, but merely serves as a badge
written agreements to the continue while such of regular employment.
contrary notwithstanding activity exists [IRR, Book
and regardless of the oral VI, Rule I, Sec. 5 (b)]. A work pool may exist although the workers in the pool
agreements of the parties do not receive salaries and are free to seek other
[IRR, Book VI, Rule I, Sec. 5 employment during temporary breaks in the business,
(a)]. provided that the worker shall be available when called
to report for a project. Although primarily applicable to
Mode of compensation is not determinative of regular seasonal workers, this set-up can likewise be
regular employment: While the Ees mode of applied to project workers insofar as the effect of
compensation was on a “per piece basis” the status and temporary cessation of work is concerned. This is
nature of their employment was that of regular beneficial to both the Er and Ee for it prevents the unjust
Ees.(Labor Congress of the Phils v. NLRC, G.R. No. 123938, situation of “coddling labor at the expense of capital”
May 21, 1998). and at the same time enables the workers to attain the
status of regular Ees (Maraguinot v. NLRC, G.R. No.
PROJECT EMPLOYMENT 120969, January 22, 1998).

Project employment is employment that has been fixed Bersamin Cases:

for a specific project or undertaking the completion for
which has been determined at the time of engagement
of the Ee (IRR, Book VI, Rule I, Sec. 5(a)]. The period is not
the determining factor, so that even if the period is more
than 1 year, the Ee does not necessarily become regular.
Repeated hiring on a project-to-project basis is
considered necessary and desirable to the business of
the Er. The Ee is regular. (Maraguinot v. NLRC, G.R. No.
120969, July 22, 1998).
Requisites in determining whether an Ee is a project
Ee
Q: Innodata Philippines, Inc. (Innodata) hired
Jamais, Matuguinas, and Cruz together with nine (9)
others as project employees with functions
desirable and necessary to it. The positions and
durations of engagements were clearly stated and
explained in the respective contracts they signed.
Upon expiration of their contract, the petitioners
filed a complaint before the Labor Arbiter for illegal
dismissal claiming Innodata made it appear that
they had been hired as project employees to prevent
their regularization. Were the petitioners regular or
project employees?

1. The project Ee was assigned to carry out a specific
project or undertaking, (Gadia v. Sykes Asia, Inc., G.R.
No. 209499, January 28, 2015); and
2. The duration and scope of which were specified at
the time the Ee was engaged for that project (ETS v.
CA. G.R. No. 157680, October 8, 2008)
3. The Ee must have been dismissed every after
completion of his project or phase
4. Report to the DOLE of Ee’s dismissal on account of
completion of contract to satisfy due process
requirements. [Policy Inst. No. 20; D.O. 19 (1997)].
The principal test for determining whether one is a
"project employee," as distinguished from "regular
employee," is whether he was assigned to carry out
"a specific project or undertaking," the duration and
scope of which were specified at the time the
employee was engaged for that project. (Equipment
Technical Services (Ets) & Joseph James Dequito V. Ca,
Alex Albino, Et.Al. G.R. No. 157680, October 8, 2008,
Velasco, Jr., J.)
Work Pool
Requisites to acquire regular Ee status of project Ee
or a member of work pool
The following must concur to acquire a status of a
regular Ee status:
A: They were project employees. A fixed term
agreement, to be valid, must strictly conform to the
requirements and conditions provided in Article 280 of
the Labor Code. The fixed period of employment must be
knowingly and voluntarily agreed upon by the parties,
without any force, duress, or improper pressure being
brought to bear upon the employee and absent any
other circumstances vitiating his consent, or it must
satisfactorily appear that the employer and employee
dealt with each other on more or less equal terms with
no moral dominance exercised by either party. The
contracts of the petitioners indicated the duration of
their engagement as well as their respective project
assignments. There is no indication that they were made
to sign the contracts against their will neither did they
refute Innodata’s assertion that it did not employ force
or fraudulently manipulate petitioners into signing the
contracts. Hence, petitioners knowingly agreed to the
terms and voluntarily signed the same. Further, the
necessity and desirability of work performed by the
employees are not determinants in term employment,
but rather the “day certain” voluntarily agreed upon by
the parties. (Alumaymay O. Jamias, et al. v. NLRC, GR No.
159350, March 9, 2016)
Q: Rogelio Bello brought a complaint for illegal
dismissal and damages against DMCI and/or Rachel
Consunji. He claimed that DMCI had employed him
as a mason without any interruption from February
1, 1990 until October 10, 1997; that his job as a

22
 UST LAW PRE-WEEK NOTES 2017
mason had been necessary and desirable in the
usual business or trade of DMCI; that at that time of
his dismissal, DMCI’s projects had not yet been
completed. DMCI contended that Bello had only
been a project employee, as borne out by his
contract of employment and appointment papers.
Was Rogelio Bello a regular employee?
A: He was a regular employee. In the context of the
law, Bello was a project employee of DMCI at the
beginning of their employer-employee relationship. The
project employment contract they then entered into
clearly gave notice to him at the time of his engagement
about his employment being for a specific project or
phase of work. He was also thereby notified of the
duration of the project, and the determinable
completion date of the project. However, the history of
Bello’s appointment and employment showed that he
performed his tasks as a mason in DMCI’s various
constructions projects. Bello’s position was
undoubtedly a function necessary and desirable to the
business or trade of one engaged in the construction
industry like DMCI. His being hired as a mason by DMCI
in not one, but several of its projects revealed his
necessity and desirability to its construction business. It
is settled that the extension of the employment of a
project employee long after the supposed project has
been completed removes the employee from the scope
of a project employee and makes him a regular
employee. (DM Consunji Corporation v. Rogelio P. Bello,
GR No. 159371, July 29, 2013)
SEASONAL EMPLOYMENT
Seasonal employment
Employment where the job, work or service to be
performed is seasonal in nature and the employment is
for the duration of the season [IRR, Book VI, Rule I, Sec.5
(a)].
NOTE: For Seasonal Ees, their employment legally ends
upon completion of the project or the season. The
termination of their employment cannot and should not
constitute an illegal dismissal (Mercado v. NLRC, G.R. No.
79869, September 5, 1991).
Seasonal Ees as Regular Ees
Seasonal Ees can be considered regular Ees. Seasonal
workers who are repeatedly engaged from season to
season performing the same tasks are deemed to have
acquired regular employment. During off-season, the
relationship of Er-Ee is not severed; the Seasonal Ee is
merely considered on LOA without pay. (Hacienda
Fatima v. National Federation of Sugarcane Workers-
Food and General Trade, G.R. No. 149440, January 28,
2003).
CASUAL EMPLOYMENT
Casual employment
1. It is an employment where the Ee is engaged in an
activity which is not usually necessary or desirable
in the usual business or trade of the Er, Provided:
such employment is neither Project nor Seasonal
(LC, Art. 281). He performs only an incidental job in
relation to the principal activity of the Er.
23
2. An Ee is engaged to perform a job, work or service
which is merely incidental to the business of the Er,
and such job, work or service is for a definite period
made known to the Ee at the time of engagement
[IRR, Book Vi, Rule I, Sec. 5 (b)].
Casual Ee becoming a regular Ee
If he has rendered at least 1 year of service, whether
such service is continuous or broken, he is considered as
regular Ee with respect to the activity in which he is
employed and his employment shall continue while such
activity exists.
FIXED TERM EMPLOYMENT
Term employment
A contract of employment for a definite period
terminates by its own terms at the end of such period.
(Brent School v. Zamora, G.R. No. L-48494, February 5,
1990)
Decisive determinant in term employment
It is the day certain agreed upon by the parties for the
commencement and the termination of their
employment relation. A day certain being understood to
be that which must necessarily come, although it may
not be known when and not whether the work is usually
necessary and desirable to the business of the Er.
JOB CONTRACTING
Job contracting (independent contracting/
subcontracting)
"Contracting" or "subcontracting" refers to an
arrangement whereby a principal agrees to farm out to
a contractor the perfomance or completion of specific
job or work within a definite or predetermined period,
regardless of whether such job or work is to be
performed or completedd within or outside the
premises of the principal. (Sec. 3c, DOLE D.O. No. 174 s.
2017)
Conditions in order to be considered as legitimate
job contracting or subcontracting
1. The contractor must be registered in accordance
with these Rules and carries a distinct and
independent business and undertakes to perform
the job, work or service on its own responsibility,
according to its own manner and method, and free
from control and direction of the principal in all
matters connected with the performance of the
work except as to the results thereof;
2. The contractor has substantial capital and/or
investment; and
3. The Service Agreement ensures compliance with all
the rights and benefits under Labor Laws (DO 18-A,
Sec. 4).
Labor-only contracting
There is labor-only contracting when:
1. The contractor does not have substantial capital, or;
 LABOR LAW AND SOCIAL LEGISLATION

a. The contractor or subcontractor does not have Permissible, subject only

investments in the form of tools, equipment, Prohibited byLaw to certain conditions
machineries, work premises, among others,
AND The contractor has
b. the contractor or subcontractor’s Ees recruited Has no substantial capital
substantial capital or
and placed are performing activities which are or investment
investment
usually necessary or desirable to the operation
of the company, or directly related to the main
business of the principal within a definite or INDEPENDENT LABOR-ONLY
FACTOR
predetermined period, regardless of whether CONTRACTOR CONTRACTOR
TEST
such job, work or service is to be performed or
Nature of The business of No separate
completed within or outside the premises of the
business an independent business
principal; OR
contractor is independent and
entirely distinct from the
2. The contractor does not exercise the right to control
separateand principal. May be
over the performance of the work of the Ee (Sec. 5,
distinct from the a “cabo” or an in-
DOLE D.O. No. 174 s. 2017)
business of the house agency
principal prohibited under
5-5-5 Scheme or “Endo”
DO 18-02
The “5-5-5” or “endo” workers refers to the hiring Substantial Has substantial The only
practice that is deliberately resorted to prevent workers capital OR capital or investment is
from acquiring regular status by reason of length of investment investment. bringing
service of at least 6 months and one day. Under a individuals to
subcontracting arrangement, this is done through: work

a. repeated short-term arrangements (e.g., “5 months, Control Control as to Control as to

5 months”, “5-5-5”, or less) by one principal through
the same contractor, or under different contractors,
or
b. repeated short-term arrangements (e.g., “5 months,
5 months”, “5-5-5”, or less) through a Service
Agreement of short duration under the same
contractor, or different contractors.
Section 7(A)[7) of DOLE Department Order No 18-A
series of 2011 makes subcontracting a prohibited
activity when it is done through repeated hiring of
workers for a 5 to 6 months employment contract under
the same employer or Service Agreement of the same
duration
In case of violation, the Contractor’s Certificate of
Registration can be cancelled, after due process, and the
worker becomes regular employee of the principal, and
all benefits due to him/her shall be the liability of the
principal. (http://www.blr.dole.gov.ph/frequently-
asked-questions/36-issues-and-concerns)
Labor-onlycontracting v. Job contracting
LABOR-ONLY JOB CONTRACTING
CONTRACTING
No Er-Eerelationship exist
between the Er and the
contractor's Ees except
Er is treated as direct Er of when the contractor
the person recruited in all
or subcontractor fails to
instances
paythewagesofthe Ees
only RESULTS BOTH results
but not the and means
means
Effect VALID VOID
Q: Clean Manpower Inc. (CMI) had provided
janitorial services to the National Economic
Development Authority (NEDA) since April 1988. Its
service contract was renewed every three months.
However, in the bidding held on July 1992, CMI was
disqualified and excluded. In 1993, six janitors of
CMI formerly assigned at NEDA filed a complaint for
underpayment of wages. Both CMI and NEDA were
impleaded as respondents for failure to comply with
NCR Wage Orders Nos. 01 and 02, which took effect
on November 1, 1990 and January 2, 1992,
respectively.
Should NEDA, a government agency subject to
budgetary constraints, be held liable solidarily with
CMI for the payment of salary differentials due the
complainants? Cite the legal basis of your answer.
(2004, 2014 BAR)
A:YES, NEDA should be impleaded as a defendant. Art.
106 provides that in the event that the contractor or
subcontractor fails to pay the wages the wages of his
employees, 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 the employees directly employed by him.

Liability is limited (shall Essence of the prohibition on labor-only

be solidarily liable with Er contracting: It gives rise to confusion as to who is the
only when the Er fails to real Er of the workers and who is liable to their claims.
comply with Liability extends to all
It also deprives workers of the opportunity to become
requirements as to those provided under the
regular Ees.
unpaid wages and other Labor Standards law
labor standards Bersamin Case:
violations)

24
 UST LAW PRE-WEEK NOTES 2017
Q: Superior Packaging Corp. engaged the services of
Lancer Staffing and Services Network, Inc., wherein
Balagsay et al. were engaged for four months to do
tasks such as loading, unloading, and segregation of
corrugated boxes. Balagsay et al. filed a complaint
before the DOLE against Superior Packaging Corp.
and its President Cesar Luz for violation of labor
standard laws. During the inspection, DOLE found
several labor standards violations. DOLE denied
Superior Packaging Corp.’s motion for
reconsideration that Balagsay et al. are Lancer, Inc.’s
employees; it also ruled that even if they were
Lancer Staffing and Services Network, Inc.’s
employees, the principal is still jointly and severally
liable with the contractor to contractual employees
to the extent of the work performed when the
contractor fails to pay its employees’ wages. Is the
DOLE correct in ruling that Superior Packaging
Corp. is solidarily liable with Lancer Staffing and
Services Network, Inc.?
A: YES. Lancer Staffing and Services Network, Inc. was
not an independent contractor but was engaged in
"labor-only contracting"; hence, Superior Packaging
Corp. was considered an indirect employer of
respondents and liable to the latter for their unpaid
money claims. A finding that a contractor is a "labor-
only" contractor is equivalent to declaring that there is
an employer-employee relationship between the
principal and the employees of the supposed contractor,
and the "labor only" contractor is considered as a mere
agent of the principal, the real employer. The former
becomes solidarily liable for all the rightful claims of the
employees. Superior Packaging Corp., therefore, being
the principal employer and Lancer, being the labor-only
contractor, are solidarily liable for respondents’ unpaid
money claims. (SUPERIOR PACKAGING CORP. v.
BALAGSAY ET AL., G.R. No. 178909, 10 October 2012)
DISMISSAL FROM EMPLOYMENT
In cases of regular employment, substantive due process
(Security of Tenure) is when the Er shall not terminate
the services of an Ee except for a just cause or when
authorized by the LC on Termination of Employment
(LC, Art. 279).
In every employee dismissal case, the employer bears
the burden of proving the validity of the employee's
dismissal.
Types of dismissal
1. Dismissal for a just cause with due process
2. Dismissal for authorized cause with due process
3. Dismissal for health reasons with due process
4. Dismissal without just or authorized cause with due
process
5. Dismissal for just or authorized cause without due
process (belated due process rule)
JUST CAUSES
Just causes for termination
1. Serious misconduct or willful disobedience by the
Ee of the lawful orders of his Er or representative in
connection with his work;
2. Gross and habitual neglect by the Ee of his duties;
25
3. Fraud or willful breach by the Ee of the trust
reposed in him by his Er or duly organized
representative;
4. Commission of a crime or offense by the Ee against
the person of his Er or any immediate member of his
family or his duly authorized representative;
5. Other causes analogous to the foregoing (LC, Art.
282).
Serious misconduct or willful disobedience
Elements of serious misconduct:
1. It must be serious or of such a grave and aggravated
character;
2. Must relate to the performance of the Ees’ duties;
3. Ee has become unfit to continue working for the Er
(CBTL Philippines, Inc. v. Arenas 
 G.R. No. 208908,
March 11, 2015).
Examples of serious misconduct:
1. Sexual Harassment
2. Fighting within the company premises
3. Uttering obscene, insulting or offensive words
against a superior
4. Falsification of time records
5. Gross immorality
Bersamin Case:
Q: On May 18, 1998, Del Rosario, one of Northwest
Airline’s Manila based flight attendants, was
assigned at the Business Class Section of Northwest
Flight NW 26 bound for Japan. A verbal
confrontation which escalated into a heated
argument ensued between Del Rosario and Gamboa,
another flight attendant assigned in the same flight.
A Notice of Removal from Service was sent to Del
Rosario informing her of her dismissal from the
service pending an investigation of the fighting
incident between her and Gamboa. On June 19,
1998, Del Rosario was informed of her termination
from the service on the grounds of serious
misconduct and willful disobedience. Northwest
stated that based on the results of the investigation,
Del Rosario and Gamboa had engaged in a fight on
board the aircraft, even if there had been no actual
physical contact between them; and that because
fighting was strictly prohibited by Northwest to the
point that fighting could entail dismissal from the
service even if committed for the first time.
Consequently, Del Rosario filed a complaint for
illegal dismissal against Northwest. Was the
misconduct serious as to merit Del Rosario’s valid
dismissal?
A: NO. Misconduct or improper behavior, to be a just
cause for termination of employment, must: (a) be
serious; (b) relate to the performance of the employee’s
duties; and (c) show that the employee has become unfit
to continue working for the employer. The fight between
Del Rosario and Gamboa should be so serious that it
entailed the termination of her employment even if it
was her first offense. xxx In several rulings where the
meaning of fight was decisive, the Court has observed
that the term fight was considered to be different from
the term argument.In People v. Asto, for instance, the
Court characterized fight as not just a merely verbal
tussle but a physical combat between two opposing
 LABOR LAW AND SOCIAL LEGISLATION
parties. xxx The incident involving Del Rosario and
Gamboa could not be justly considered as akin to the
fight contemplated by Northwest. The understanding of
fight as one that required physical combat was absent
during the incident of May 18, 1998. Moreover, even
assuming arguendo that the incident was the kind of
fight prohibited by Northwest's Rules of Conduct, the
same could not be considered as of such seriousness as
to warrant Del Rosario's dismissal from the service. The
gravity of the fight, which was not more than a verbal
argument between them, was not enough to tarnish or
diminish Northwest's public image. (Northwest Airlines
v. Del Rosario, G.R. No. 157633, September 10, 2014)
Requisites of willful disobedience:
1. The Ees assailed conduct must have been willful or
intentional, the willfulness being characterized by a
wrongful and perverse attitude.
2. The disobeyed orders, regulations or instructions of
the Er must be:
a. Reasonable and lawful
b. Sufficiently known to the Ee
c. In connection with the duties which the Ee has
been engaged to discharge (SLMC v. Sanchez
G.R. No. 212054, March 11, 2015).
There is no law that compels an Ee to accept a promotion
for the reason that a promotion is in the nature of a gift
or reward, which a person has the right to refuse. The
exercise of the Ee of the right to refuse a promotion
cannot be considered in law as insubordination or
willful disobedience (PT&T Corp. v. CA, G.R. No. 152057,
September, 29, 2003).
Bersamin Case:
Q: Dongon is a former truck helper leadman of Rapid
Movers, which is engaged in the hauling and
trucking business. Dongon’s area of assignment is
the Tanduay Otis Warehouse, where his job is to
load and unload Rapid Movers’ trucks. Dongon, with
his driver Villaruz, was within the vicinity of
Tanduay and they tried to get some goods to be
distributed by the clients. However, the security
guard noticed that Villaruz was not wearing an ID.
Dongon said that they will obtain the required
permission from management to warrant the
delivery of the goods, but instead, Dongon lent
Villaruz his ID. They were able to get the goods from
the warehouse. Realizing this misrepresentation,
the security guard reported this to management,
which later on dismissed Dongon after conducting
an investigation. Was Dongon’s dismissal lawful?
A: NO. Willfulness must be attended by a wrongful and
perverse mental attitude rendering the employee’s act
inconsistent with proper subordination. In any case, the
conduct of the employee that is a valid ground for
dismissal under the Labor Code constitutes harmful
behavior against the business interest or person of his
employer. It is implied that in every act of willful
disobedience, the erring employee obtains undue
advantage detrimental to the business interest of the
employer. Under the foregoing standards, the
disobedience attributed to Dongon could not be justly
characterized as willful within the contemplation of
Article 296 of the Labor Code. He neither benefitted
from it, nor thereby prejudiced the business interest of
26
Rapid Movers. There could be no wrong or perversity on
his part that warranted the termination of his
employment based on willful disobedience. It is true that
an employer is given a wide latitude of discretion in
managing its own affairs. The broad discretion includes
the implementation of company rules and regulations
and the imposition of disciplinary measures on its
employees. But the exercise of a management
prerogative like this is not limitless, but hemmed in by
good faith and a due consideration of the rights of the
worker. (DONGON v. RAPID MOVERS AND FORWARDERS
CO., INC., G.R. No. 163431, 28 August 2013)
Gross and habitual negligence
An employee who was grossly negligent in the
performance of his duty, though such negligence
committed was not habitual, may be dismissed
especially if the grossly negligent act resulted in
substantial damage to the company. (LBC Express vs.
Mateo, G.R. No. 168215, June 9, 2009)
Failure to observe prescribed standards of work or to
fulfill reasonable work assignments due to inefficiency
may constitute just cause for dismissal. Such inefficiency
is understood to mean failure to attain work goals or
work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing
unsatisfactory results
Bersamin Case:
Q: A clog-up occurred at the kettle sheet guide where
Victor Albina (Albina), Vicente Uy (Uy), and Alex
Velasquez (Velasquez) were on duty working in
their assigned areas. As a consequence, 20 GI sheets
were clogged up inside the kettle causing damage to
Sugarsteel. On the same day, a memorandum was
issued by the Mr. Yapjoco, the manager, requiring
Albina, Uy, and Velasquez to submit written
explanations on the aforementioned incident and
why no action shall be taken against them for gross
negligence. They submitted their respective
explanations. In another memorandum, Mr. Yapjoco
informed all the petitioners to attend a conference
in connection with the incidents. Later on, they were
sent individual notices of suspension pending final
decision relativce to the incident. Mr. Yapjoco again
sent individual notices of termination of
employment of Albina, Uy, and Velasquez on the
ground of gross neglect of duty. Were they illegally
dismissed?
A: YES. There was no showing that there was gross
negligence on the part of the workers. In order to
warrant the dismissal of the employee for just cause,
Article 282 (b) of the Labor Code requires the negligence
to be gross and habitual. Gross negligence is the want of
even slight care, acting or omitting to act in a situation
where there is duty to act, not inadvertently but willfully
and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected.
Habitual neglect connotes repeated failure to perform
one's duties for a period of time, depending upon the
circumstances. Obviously, a single or isolated act of
negligence does not constitute a just cause for the
dismissal of the employee. This was the first offense of
the workers and there was no evidence showing that
there was habitual neglect on their part thus the just
cause was not concluded. (Sugarsteel Industrial, Inc. and
 UST LAW PRE-WEEK NOTES 2017
Ben Yapjoco v. Victor Albina, Vicente Uy, and Alex
Velasquez, GR No. 168749, June 6, 2016)
Loss of trust and confidence
It applies only to cases involving:
a. Ees occupying positions of trust and confidence
- confidential and managerial Ee’s
Distinction should be made between managerial and
rank and file employees. With respect to rank-and-file
personnel, loss of trust and confidence, as ground for
valid dismissal, requires proof of involvement in the
alleged events while for managerial employees, the
mere existence of a basis for believing that such
employee has breached the trust of his employer would
suffice for his dismissal (Grand Asian Shipping Lines, Inc.
v. Wilfred Galvez, G.R. No. 178184, Jan. 29, 2014).
b. Ees routinely charged with the care and custody
of the Er’s money or property – To this class
belong those who, in the normal and routine
exercise of their functions, regularly handle
significant amounts of money or property (Mabeza
v. NLRC, G.R. No. 118506, April 18, 1997).
Bersamin Case:
Q: Lagahit was a Sales Manager employed at Pacific
Concord Container Lines. On November 8, 2002, she
received a text message from Cuenca, the company’s
Branch Manager, informing her that she (Lagahit) is
no longer connected with the company. On the same
day, Lagahit also learned that Cuenca had
disseminated notices, flyers and memos informing
all clients of Pacific Concord that she was no longer
connected with the company as of that date. Lagahit
later on filed a complaint for constructive dismissal.
In its answer, the Pacific Concord contends that the
dismissal of Lagahit was valid. It asserts that Lagahit
had betrayed the trust and confidence reposed in
her when she applied for other employment during
office hours and using company resources. Is the
company correct?
A: NO. Article 282(c) of the Labor Code authorizes an
employer to dismiss an employee for committing fraud,
or for willful breach of the trust reposed by the
employer. For this to be a valid ground for the
termination of the employee, the employer must
establish that: (1) the employee must be holding a
position of trust and confidence; and (2) the act
complained against would justify the loss of trust and
confidence. Lagahit’s position as sales manager did not
immediately make her a managerial employee. The
actual work that she performed, not her job title,
determined whether she was a managerial employee
vested with trust and confidence. Her employment as
sales manager was directly related with the sales of
cargo forwarding services of ABC Company, and had
nothing to do with the implementation of the
management’s rules and policies. Her act of searching
for gainful employment opportunities elsewhere should
be considered as inappropriate for being made during
office hours but the same did not constitute willful
breach of trust and confidence of the employer. The loss
of trust and confidence contemplated under Article
282(c) of the Labor Codeis not ordinary but willful
breach of trust. The cause of the loss of trust must be
27
work-related as to expose the employee as unfit to
continue working for the employer. (Lagahit vs Pacific,
G.R. No. 177680, January 13, 2016)
Abandonment as a just cause for termination
Two (2) factors must be present:
1. The failure to report for work, or absence without
valid or justifiable reason; and
2. A clear intention to sever Er-Ee relationship, with
the 2nd element as the more determinative factor,
being manifested by some overt acts(Sta. Catalina
College v. NLRC, G.R. No. 144483, November 19,
2003).
Mere absence or failure to work, even after notice to
return, is not tantamount to abandonment. The filing by
an employee of a complaint for illegal dismissal with a
prayer for reinstatement is proof enough of his desire to
return to work, thus, negating the employer’s charge of
abandonment. (Essencia Q. Manarpiis v. Texan
Philippines, Inc., Richard Tan And Catherine P. Rialubin-
Tan G.R. No. 197011, January 28, 2015, Villarama, Jr., J.)
Commission of a crime or offense
When an offense is committed by the Ee against the
person of his Er or any immediate member of his family
or his duly authorized representative, conviction of a
crime involving moral turpitude is not analogous
thereto as the element of relation to his work or to his Er
is lacking.
Analogous cases
To fall within the ambit of “analogous cases” the act or
omission must have an element similar to those found in
the specific just cause enumerated under Art. 282.
(International Rice Research Institute v. NLRC, G.R. No.
97239, May 12, 1993).
Previous offenses may be so used as a valid justification
for dismissal from work ONLY if the infractions are
related to the subsequent offense upon which the basis
the termination of employment is decreed (Stellar
Industrial Service Inc. v. NLRC, G.R. No. 117418. Jan. 24,
1996).
Q: Cheryll Leus was a non-teaching personnel
employed in St. Scholastica’s College Westgrove
(SSCW). Cheryll and her boyfriend conceived a child
out of wedlock. SSCW dismissed her on the ground
that her pregnancy out of wedlock constitutes
disgraceful and immoral conduct and ran counter to
the moral principles that SSCW stands for and
teaches its students. Does pregnancy out of wedlock
(without a legal impediment to marry) constitutes
immoral conduct as a ground for dismissal
contemplated by law?
A: NO. It is not the totality of the circumstances
surrounding the conduct per se that determines
whether the same is disgraceful or immoral, but the
conduct that is generally accepted by society as
respectable or moral. If the conduct does not conform to
what society generally views as respectable or moral,
then the conduct is considered as disgraceful or
immoral. Tersely put, substantial evidence must be
presented, which would establish that a particular
 LABOR LAW AND SOCIAL LEGISLATION
conduct, viewed in light of the prevailing norms of
conduct, is considered disgraceful or immoral. Thus, the
determination of whether a conduct is disgraceful or
immoral involves a two-step process: first, a
consideration of the totality of the circumstances
surrounding the conduct; and second, an assessment of
the said circumstances vis-à-vis the prevailing norms of
conduct, i.e., what the society generally considers moral
and respectable. There is still a necessity to determine
whether the petitioner’s pregnancy out of wedlock is
considered disgraceful or immoral in accordance with
the prevailing norms of conduct. To stress, pre-marital
sexual relations between two consenting adults who
have no impediment to marry each other, and,
consequently, conceiving a child out of wedlock, gauged
from a purely public and secular view of morality, does
not amount to a disgraceful or immoral conduct (Leus v.
SSCW, G.R. No. 187226, January 28, 2015).
In termination disputes or illegal dismissal cases, the
employer has the burden of proving that the dismissal is
for just and valid causes. The employer is bound to
adduce clear, accurate, consistent, and convincing
evidence to prove that the dismissal is legal. (Edi-
Staffbuilders International, Inc. vs. National Labor
Relations Commission and Eleazar S. Gran G.R. No.
145587, October 26, 2007, Velasco, Jr., J.)
Bersamin Cases:
Q: Minex Import Corp. is engaged in the retail of
semi-precious stones, sold in kiosks or stalls located
in various shopping centers within Metro Manila. It
employed Concepcion as a salesgirl, and she was
subsequently made into a supervisor. One day,
Concepcion and her salesgirls conducted a cash
count from the sales proceeds including those from
the preceding Friday and Saturday and determined
the total value to be P50,912.00. Concepcion
wrapped the cash in a plastic bag and deposited it in
the drawer of the locked wooden cabinet of the
kiosk. The next day, Concepcion reported to the
assistant manager that the money was missing.
Concepcion was immediately placed under arrest
and was detained for a day. She then filed a
complaint for illegal dismissal before DOLE, while
Minex filed a complaint for qualified theft against
her. After the preliminary investigation, the
assistant prosecutor found probable cause and
recommended the filing of information against the
petitioner.
As to the complaint for illegal dismissal, the Labor
Arbiter (LA) ruled in favor of Concepcion, which was
reversed by the NLRC, finding that the petitioner had
in fact abandoned her job after being found to have
stolen the proceeds of sale. The ruling of NLRC was
sustained by the CA.
(a) Was there just cause for Concepcion’s dismissal?
(b) Was due process observed in terminating her
employment?
A: (a) YES. The court ruled numerous times that neither
conviction beyond reasonable doubt for a crime against
the employed nor acquittal after the criminal
prosecution was indispensable. Nor was a formal charge
in court for the acts prejudicial to the interest of the
employer a pre-requisite for a valid dismissal, as the
quantum of proof prescribed for dismissing an
28
employee is substantial evidence unlike in the case of
convicting an accused which is proof beyond reasonable
doubt. Indeed, the finding or probable cause for
qualified theft is sufficient to justify her termination for
loss of confidence.
(B) NO. Notwithstanding the presence of just cause,
Minex failed to afford Concepcion of the due process
required for termination such as reasonable
opportunity to explain her side, to set a hearing or
conference for the employee concerned and a written
notice consisting of grounds which justified her
termination. In light of the circumstances, Minex is
obliged to pay Concepcion an indemnity in the form of
nominal damages of P30, 000. Where the dismissal is for
a just cause, as in the instant case, the lack of statutory
due process should not nullify the dismissal, or render it
illegal, or ineffectual. However, the employer should
indemnify the employee for the violation of his statutory
rights, as ruled in Reta v. National Labor Relations
Commission. The indemnity to be imposed should be
stiffer to discourage the abhorrent practice of “dismiss
now, pay later,” which we sought to deter in the Serrano
ruling. The sanction should be in the nature of
indemnification or penalty and should depend on the
facts of each case, taking into special consideration the
gravity of the due process violation of the employer.
(CONCEPCION v. MINEX, G.R. No. 153569, 24 January
2012)
AUTHORIZED CAUSES
Authorized causes of termination by the Er:
1. Installation of labor-saving devices
(automation/robotics)
2. Redundancy (superfluity in the performance of a
particular work) – Exists where the services of an Ee
are in excess of what is reasonably demanded by the
actual requirements of the enterprise (Wiltshire File
Co., Inc. v. NLRC, G.R. No. 82249, February 7, 1991).Er
must be in good faith in abolishing redundant
position and has fair and reasonable criteria in
ascertaining what positions are to be declared
redundant.
3. Reorganization
4. Retrenchment – Er must be in good faith, has Proof
of expected or actual losses, and uses fair and
reasonable criteria in ascertaining who would be
retained among the Ees, such as status, efficiency,
seniority, physical fitness, age, and financial
hardship of certain workers (FASAP v. PAL, G.R. No.
178083, October 2, 2009)
Actual losses need not set in prior to retrenchment.
(Cajucom VII v. TP Phils Cement Corp., et al, G.R. No.
149090, February 11, 2005).
Bersamin Case:
Q: Realuyo worked as a pianist at the Legend Hotel’s
Tanglaw Restaurant from September 1992 with an
increased rate of P750/night. He was only allowed
to perform from 7-10 pm for three to six times a
week. He was also required to conform to the
venue’s motif and had been subjected to the rules on
employee’s representation checks and chits. On July
9, 1999, the management terminated his service
effective at the end of the month, in view of their
cost-cutting measure. Realuyo filed a complaint for
alleged unfair labor practice, constructive illegal
 UST LAW PRE-WEEK NOTES 2017
dismissal, and other monetary claims. Legend Hotel
denied the existence of employer-employee
relationship, insisting that Realuyo was only a talent
engaged to provide live music at the hotel and that
the economic crisis that had hit the country
constrained the management to dispense with his
service.
(a) Was there employer-employee relationship
between Legend Hotel and Realuyo?
(b) Was the termination valid?
A: (a) YES. Firstly, Realuyo was undeniably employed as
a pianist of Legend Hotel, as the latter actually wielded
the power of selection at the time it entered into the
service contract. Secondly, Realuyo’s remuneration,
albeit denominated as talent fees, is within the ambit of
the term wages in the context of the Labor Code. Thirdly,
Legend Hotel clearly exercised the power of control over
the respondent as regards the time of performance,
place, costume and the fact that he is subjected to the
rules on employee’s representation checks and chits.
Lastly, the memorandum informing Realuyo of the
discontinuance of his service showed that Legend Hotel
had the power to dismiss him from employment.
(b) NO. Legend Hotel failed to submit evidence of the
losses of its business operation. Its bare statement fell
short to prove that retrenchment is reasonably
necessary to avert such losses. Thus, by failure to
present sufficient and convincing evidence to prove the
existence of substantial loss, Realuyo’s termination due
to retrenchment is not allowed. (LEGEND HOTEL v.
REALUYO, G.R. No. 153511, 18 July 2012)
5. Closing or cessation of operation of the
establishment or undertaking– Must be done in
good faith and not for the purpose of circumventing
pertinent labor laws.
Payment of separation pay is required only where
closure is neither due to serious business losses nor
due to an act of Government (North Davao Mining
Corp v. NLRC, G.R. No. 112546, Mar. 13, 1996; NFL v.
NLRC, G.R. No. 127718, March 2, 2000).
Bersamin Case:
Q: Ronaldo San Miguel had been a checker/customs
representative of Zera Brokerage Corp. Sometime
on January 1994, he and other employees were
informed that Zeta would cease operations, and that
all affected employees, including him, would be
separated. Zeta informed him through a letter, of his
termination effective March 31, 1994. He allegedly
accepted his separation pay subject to the standing
offer to be hired to his former position by petitioner.
On April 15, 1994 he was summarily terminated.
Hence San Miguel filed a complaint for unfair labor
practice, illegal dismissal, non-payment of salaries
and moral damages against Zeta. For its part, Zeta
contended that the dismissal is for a just cause,
cessation of business operations. San Miguel
contends that Zeta did not cease operation due to
dissolution because the amendments of the article
of incorporation were for the purpose of changing
the corporate name, broadening the primary
functions, and increasing capital stock. Was the
dismissal due to the alleged cessation of business
valid?
29
A: NO. The cessation of business operations by Zeta
was not a bona fide closure to be regarded as a valid
ground for the termination of employment of San
Miguel. The change of name is not a change of the
corporate being. The amendments in the articles of
incorporation of Zeta to change the corporate name to
Zuellig Freight and Cargo Systems did not produce its
dissolution as a corporation. Thus, Zuellig is bound to
respect and honor Zeta’s obligation especially with the
employees’ security of tenure. (Zuellig Freight and Cargo
Systems v. NLRC and Ronaldo V. San Miguel, GR No.
157900, July 266, 2013)
6. Disease – (1) Must be incurable within 6 months
and the continued employment is prohibited by law
or prejudicial to his health as well as to the health of
his co-Ees (2) with a certification from the public
health officer that the disease is incurable within 6
months despite due to medication and treatment.
The burden of proving compliance with these
requisites is on the employer. Non-compliance
leads to the conclusion that the dismissal was illegal
(Fuji Television Network v. Espiritu, G.R. No. 204944-
45, Dec. 03, 2014).
Other authorized causes
1. Total and permanent disability of Ee
2. Valid application of union security clause
3. Expiration of period in term of employment
4. Completion of project in project employment
5. Failure in probation
6. Relocation of business to a distant place
7. Defiance of return-to work-order
8. Commission of Illegal acts in strike
9. Violation of contractual agreement
10. Retirement
Steps required in termination of an Ee’s
employment for authorized causes:
1. Written Notice to DOLE 30 days prior to the
intended day of termination.
Purpose: To enable it to ascertain the veracity of the
cause of termination.
2. Written notice to Ee concerned 30 days prior the
intended date of termination.
3. Payment of separation pay
There is no obligation to pay separation pay:
a. When the closure of the business is due to serious
business loss
b. when the closure is due to an act of the Government.
c. Where closure of business is by compulsion of law
because closure of business is not attributed to Er’s
will. (e.g.: the land where the building is situated
was declared covered by the Comprehensive
Agrarian Reform Law)
When an employee is placed under "floating status" for
more than six months, he is considered to have been
constructively dismissed. (Vicente C. Tatel V. Jlfp
Investigation Security Agency, Inc., Jose Luis M.
Pamintuan, and Paolo C. Turno G.R. No. 206942, February
25, 2015, Perlas-Bernabe, J.)
 LABOR LAW AND SOCIAL LEGISLATION

DUE PROCESS 1. A written noticeshould be served to the Ee

TWIN NOTICE REQUIREMENT
Two-fold requirements of a valid dismissal for a just
cause
1. Substantive – It must be for a just cause.
2. Procedural – There must be notice and hearing.
Twin requirements of procedural due process [Art.
277(b), LC]
1. Notice – “Twin-notice rule”
a. First notice – Necessity of first notice to inform
the worker of the violation and preparation for
the defense (Pre-notice)
b. Last notice – To give the worker a notice of the
Er’s final decision (Post notice)
2. Hearing – Two fundamental rules:
a. Hearing means ample opportunity to be heard
b. What the law prohibits is total absence of
opportunity to be heard
 If ample opportunity to be heard is given,
there is no violation.
 Position paper – A position paper is a valid
alternative because not all cases are of
litigation concerns. It should suffice in
matters that only involve a question of law.
Procedure to be observed by the Er for the
termination of employment based on any of the just
causes for termination
specifying the ground/s for termination and giving
the said Ee reasonable opportunity to explain.
“Reasonable opportunity” under the Omnibus Rules
means every kind of assistance that management must
accord to the employees to enable them to prepare
adequately for their defense. This should be construed
as a period of at least five (5) calendar days from receipt
of the notice to give the employees an opportunity to
study the accusation against them, consult a union
official or lawyer, gather data and evidence, and decide
on the defenses they will raise against the complaint.
(R.B. Michael Press And Annalene Reyes Escobia v. Nicasio
C. Galit, G.R. No. 153510, February 13, 2008, Velasco, Jr.,
J).
2. A hearing or conferenceshould be held during which
the Ee concerned, with the assistance of counsel, if
the Ee so desires, is given the opportunity to
respond to the charge, provide for his evidence and
present the evidence offered against him.
3. A written notice of termination – If termination is
the decision of the Er, it should be served on the Ee
indicating that upon due consideration of all the
circumstance, grounds have been established to
justify his termination.
In Agabon v. NLRC, G.R. No. 158693, November 17, 2004,
it was held that when dismissal is for just or authorized
cause but due process was not observed, the dismissal
should be upheld. The Er, however, should be held liable
for damages.

Procedural Due Process under Art. 282-284 of the LC as applied in the Agabon Case
Art. 282 Art. 283 Art. 284
The Er must give the Ee a notice The Er must give the Ee and the Er may terminate the services of his
specifying the grounds for which DOLE written notices 30 days prior Ee.
dismissal is sought, a hearing or an to the effectivity of his separation.
opportunity to be heard and after hearing
or opportunity to be heard, a notice of the
decision to dismiss.
The requirement under Art. 277 (b) of Worker is an inactive party in the There is no hearing requirement in
notice and hearing applies only in Art. cause for termination. Only notice diseases but there is notice
282 because the Er is accusing the worker with DOLE and notice to worker is requirement to worker, but no
that the latter committed an act or required. No need for a hearing notice to DOLE.
omission constituting a cause for because due process is found in LC
termination of his employment. (Art. 283) not in Constitution
according to Agabon.

NOTE: in Art. 277 (b) in relation

to Art. 283, if the closure of
business will result in a mass
layoff and serious labor
dispute, the SLE can
enjoin the Er as regards
mass termination

Possible Situations Effect of termination Liability of ER

NO Liability
a. With Just or Authorized Cause
VALID
b. With Due Process NOTE: Separation Pay if for
Authorized Cause
a. Without Just or Authorized Cause Reinstatement + Full
INVALID
b. With Due Process Backwages

30
 UST LAW PRE-WEEK NOTES 2017
a. Without Just or Authorized Cause
INVALID
b. Without Due Process
a. With Just or Authorized Cause
VALID
b. Without Due Process
NOTE: The Agabon ruling was modified by JAKA Food Processing v. Pacot, G.R. No. 151378, March 28, 2005 where it was
held that:
1. If based on just cause(LC, Art. 282) but the Er failed to comply with the notice requirement, the sanction to be imposed
upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the Ee;
and
2. If based on authorized causes(LC, Art. 283) but the Er failed to comply with the notice requirement, the sanction
should be stiffer because the dismissal process was initiated by Er’s exercise of his management prerogative.
Bersamin Case:
Q: De Jesus worked at Supersonic from 1976 to 2001
as a Sales Promotion Officer where she solicited
clients for Supersonic and sold plane tickets to
travel agencies on credit. Supersonic dismissed De
Jesus in 2001 because she failed to account for a
total of $36,168.39 which had already been paid by
the clients to her, but which she did not turn over to
Supersonic. Despite repeated demands, De Jesus
failed to account for the money, which Supersonic
stated is a presumption of her misappropriation of
the money. Supersonic said that De Jesus was aware
of her dismissal and that she even promised to pay
the obligation by off-setting the amount from her
retirement benefits. However, she still failed to do
so, thus Supersonic filed a complaint for estafa,
while De Jesus filed a complaint for illegal dismissal.
The Labor Arbiter declared that the dismissal was
valid, but ineffectual because it did not comply with
the procedure under the Labor Code. Was De Jesus’s
dismissal valid even if Supersonic did not comply
with the two-notice rule?
A: YES. Supersonic had not complied with the two-
written notice rule. The law affording to her due process
as an employee imposed on Supersonic as the employer
the obligation to send to her two written notices before
finally dismissing her. This requirement of two written
notices is enunciated in Article 277 of the Labor Code.
Relying on Serrano, the violation by Supersonic of the
two-written notice requirement rendered ineffectual
the dismissal of De Jesus for just cause under Article 282
of the Labor Code, and entitled her to be paid full
backwages from the time of her dismissal until the
finality of its decision. Although Agabon, being
promulgated only on November 17, 2004, ought to be
prospective, not retroactive, in its operation because its
language did not expressly state that it would also
operate retroactively, the Court has already deemed it to
be the wise judicial course to let its abandonment of
Serrano be retroactive as its means of giving effect to its
recognition of the unfairness of declaring illegal or
ineffectual dismissals for valid or authorized causes but
not complying with statutory due process. Under
Agabon, the new doctrine is that the failure of the
employer to observe the requirements of due process in
favor of the dismissed employee (that is, the two-written
31
NOTE: If Reinstatement not
possible —Separation Pay
Reinstatement + Full
Backwages
NOTE: If Reinstatement not
possible—Separation Pay
Liable for noncompliance
With procedural requirements
NOTE: Separation Pay if for
Authorized Cause
notices rule) should not invalidate or render ineffectual
the dismissal for just or authorized cause. The Agabon
Court still deplored the employer's violation of the
employee's right to statutory due process by directing
the payment of indemnity in the form of nominal
damages, the amount of which would be addressed to
the sound discretion of the labor tribunal upon taking
into account the relevant circumstances. Thus, the
Agabon Court designed such form of damages as a
deterrent to employers from committing in the future
violations of the statutory due process rights of
employees, and, at the same time, as at the very least a
vindication or recognition of the fundamental right
granted to the employees under the Labor Code and its
implementing rules. (DE JESUS v. AQUINO, NLRC, and
SUPERSONIC SERVICES, INC., G.R. No. 164662, 18
February 2013)
RELIEFS FOR ILLEGAL DISMISSAL
1. Reinstatement without loss of seniority rights
2. Full backwages
3. Separation pay in lieu of reinstatement
4. Damages, including Attorney’s fees
Bersamin Cases:
Q: Magtanggol Mendoza was employed as a
technician by VSL Service Center (VSL), a single
proprietorship owned and managed by petitioner
Valentin Lozada. When (VSL) renamed to LB&C
Services Corporation (LB&C), respondent was asked
to sign a new employment contract, to which he did
not accede and was later on advised by LB&C
Executive Officer not to report for work and wait for
a call from the company regarding his work
schedule; however, he did not receive any call.
Mendoza filed a complaint against LB&C for illegal
dismissal which the Labor Arbiter upheld and
ordered the satisfaction of the monetary award
which includes the levy of petitioner’s real property
or family home. LB&C moved for the lifting of the
levy because the real property levied upon is
petitioner’s family home and that the Labor Arbiter
did not adjudge the petitioner as jointly and
solidarily liable for the obligation of LB&C in favor of
Magtanggol. May the petitioner be made jointly and
 LABOR LAW AND SOCIAL LEGISLATION
solidarily liable for the obligation of LB&C as owner
thereof?
A: NO. The Court explained the doctrine laid down ni AC
Ransom relative to the personal liability of the officers
and agents of the employer based on the strength of the
definition of an employer in Article 212(c) (now Article
212[e]) of the Labor Code, however, the governing law
on personal liability of directors or officers for debts of
the corporation is still Section 31 of the Corporation
Code. The latter provides for the application of the
doctrine of piercing the corporate veil. In the absence of
malice, bad faith, or a specific provision of law making a
corporate officer liable, such corporate officer cannot be
made personally liable for corporate liabilities. The
petitioner may have acted in behalf of LB&C Services
Corporation but the corporation’s failure to operate
could not be hastily equated to bad faith on his part.
Unless the closure is clearly demonstrated to be
deliberate, malicious, and in bad faith, the general rule
that a corporation has, by law, a personality separate
and distinct from its owners should hold sway. In view
of the dearth of evidence indicating that the petitioner
had acted deliberately, maliciously, or in bad faith in
handling the affairs of LB&C Service Corporation, and
such acts had eventually resulted in the closure of its
business, he could not be validly held to be jointly and
solidarily liable with LB&C Services Corporation.
(Valentin S. Lozada v. Magtanggol Mendoza, GR No.
196134, October 12, 2016)
Q: Malvar filed a complaint for illegal suspension
and illegal dismissal against KFPI and Bautista in the
National Labor Relations Commission (NLRC). The
Labor Arbiter found and declared her suspension
and dismissal illegal, and ordered her
reinstatement, and the payment of her full
backwages, inclusive of allowances and other
benefits, plus attorney’s fees. NLRC and CA affirmed
the decision of the Labor Arbiter. After the judgment
in her favor became final and executory Malvar
moved for the issuance of a writ of execution but the
execution failed due to questionable computation of
the award. Malvar requested for the 2nd issuance of
the writ of execution and was partially complied
with but with protest on the part of Kraft by filing a
TRO for further execution since the computation is
incorrect. CA ruled in favor of Kraft. Thus, Malvar
appealed. While her appeal was pending in this
Court, Malvar and Kraft entered into a compromise
agreement. Thereafter, Malvar filed an undated
Motion to Dismiss/Withdraw Case, praying that the
appeal be immediately dismissed/withdrawn in
view of the compromise agreement, and that the
case be considered closed and terminated. Before
the Court could act on Malvar’s Motion to
Dismiss/Withdraw Case, the Court received a so-
called Motion for Intervention to Protect Attorney’s
Rights from Malvar’s counsel. The counsel indicated
that Malvar’s precipitate action had baffled, shocked
and even embarrassed the Intervenor/counsel,
because it had done everything legally possible to
serve and protect Malvar’s interest. Can the Motion
for Intervention to protect attorney’s rights
prosper?
A: YES. A client has an undoubted right to settle her
litigation without the intervention of the attorney, for
the former is generally conceded to have exclusive
control over the subject matter of the litigation and may
at any time, if acting in good faith, settle and adjust the
32
cause of action out of court before judgment, even
without the attorney’s intervention. It is important for
the client to show, however, that the compromise
agreement does not adversely affect third persons who
are not parties to the agreement. By the same token, a
client has the absolute right to terminate the attorney-
client relationship at any time with or without cause. But
this right of the client is not unlimited because good faith
is required in terminating the relationship. It is basic
that an attorney is entitled to have and to receive a just
and reasonable compensation for services performed at
the special instance and request of his client. The
attorney who has acted in good faith and honesty in
representing and serving the interests of the client
should be reasonably compensated for his service.
NOTE: The compromise agreement will remain valid
despite the Motion for Intervention that was filed by the
counsel. (Czarina T. Malvar v. Kraft Food Phils., Inc.
and/or Bienvenido Bautista, Kraft Foods International GR
No. 183952, September 9, 2013)
Prescriptive period for filing an action for illegal
dismissal
An action for reinstatement by reason of illegal
dismissal is one based on an injury which may be
brought within 4 years from the time of dismissal
pursuant to Art. 1146 of the NCC (Azcor Manufacturing
v. NLRC, 303 SCRA 26).
REINSTATEMENT
PENDING APPEAL (ART. 223, LC)
Forms of reinstatement
1. Actual or physical –The Ee is admitted back to
work
2. Payroll – The Ee is merely reinstated in the payroll
Q: Is an illegally dismissed Ee entitled to
reinstatement as a matter of right?
A: GR:Yes.
XPNs:
Proceeds from an illegal dismissal wherein
reinstatement is ordered but cannot be carried out as
in the following cases:
1. Reinstatement cannot be effected in view of the
long passage of time or because of the realities of
the situation.
2. It would be inimical to the Ers’ interest.
3. When reinstatement is no longer feasible.
4. When it will not serve the best interest of the
parties involved.
5. Company will be prejudiced by reinstatement.
6. When it will not serve a prudent purpose.
7. When there is resultant strained relation
(applies to both confidential and managerial Ees
only).
8. When the position has been abolished (applies to
managerial, supervisory and rank-and-file Ees).
An order for reinstatement entitles an Ee to receive his
accrued backwages from the moment the reinstatement
order was issued up to the date when the same was
reversed by a higher court without fear of refunding
what he had received (Pfizer v. Velasco, G.R. 177467,
March 9, 2011).
 UST LAW PRE-WEEK NOTES 2017
An award or order for reinstatement is self-executory. It It refers to the relief given to an Ee to compensate him
does not require the issuance of a writ of execution for the lost earnings during the period of his dismissal.
(Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, It presupposes illegal termination.
October 6, 1997).
Q: What is the period covered by the payment of
Reinstatement presupposes that there shall be no
backwages?
demotion in rank and/or diminution of salary, benefits
and other privileges. If the position previously occupied
A: The backwages shall, from the time that wages are
no longer exists, the restoration shall be to a
unlawfully withheld until the time of actual
substantially equivalent position in terms of salary,
reinstatement or, if reinstatement is no longer feasible,
benefits and other privileges. (Alexander B. Banares v.
until the finality of judgment awarding backwages,
Tabaco Women's Transport Service Cooperative
cover the period from the date of dismissal of the Ee up
(Tawtrasco), Represented By Dir. Renol Barcebal, Et Al
to the date of:
G.R. No. 197353, April 1, 2013, Velasco, Jr., J.)
1. Actual reinstatement, or if reinstatement is no
SEPARATION PAY
longer feasible
2. Finality of judgment awarding backwages (Buhain v.
Separation pay can be viewed in 4 ways:
CA, G.R. 143709, July 2, 2002).
1. In lieu of reinstatement in illegal dismissal cases,
PREVENTIVE SUSPENSION
where Ee is ordered reinstated but reinstatement is
not feasible.
Preventive suspension
2. As Er’s statutory obligation in cases of legal
termination due to authorized causes under Arts.
During the pendency of the investigation, the Er may
283 and 284 of the LC.
place the Ee under preventive suspension leading to
3. As financial assistance, as an act of social justice and
termination when there is an imminent threat or a
even in case of legal dismissal under Art. 282 of the
reasonable possibility of a threat to the lives and
LC.
properties of the Er, his family and representatives as
4. As employment benefit granted in CBA or company
well as the offender’s co-workers by the continued
policy (Poquiz, 2005).
service of the Ee.
Separation pay in lieu of reinstatement when:
Duration of preventive suspension
1. Doctrine of Strained Relations (applies to
It should not last for more than 30 days. The Ee should
confidential and managerial Ees only)
be made to resume his work after 30 days. It can be
2. In case the position has been abolished (applies to
extended provided the Ee’s wages are paid after the 30-
both managerial and rank and file Ees)
day period.
In connection with security guards, Department Order
Bersamin Cases:
No.14 series of 2001 provides that if there is lack of
assignment then the security guard is entitled to
Q: Villa, a sales clerk working at Robina Farms, was
separation pay.
suspended for 10 days due to violation of company
rules on the timely issuance of the invoices. When
Rule on wages during reinstatement pending appeal
she reported back after her suspension, she was
advised by the management not to report back
Dismissed Ee whose case was favorably decided by the
anymore as her prior application for the early
LA is entitled to receive wages pending appeal upon
retirement plan was approved, which was latter on
reinstatement, which is immediately executory. Unless
disapproved. She was nonetheless given an
there is a restraining order, it is ministerial upon the LA
alternative to tender her resignation instead and to
to implement the order of reinstatement and it is
request for financial assistance. Not consenting
mandatory on the Er to comply therewith.
thereto, she signified her intention to return to work
but the company had prevented her from doing so
After the LA’s decision is reversed by a higher tribunal,
by confiscating her gate pass and informing her that
the Ee may be barred from collecting the accrued wages,
she had already been replaced by another employee.
if it is shown that the delay in enforcing the
Hence, Villa filed a complaint for illegal dismissal
reinstatement pending appeal was without fault on the
against Robina Farms. However, Robina Farms
part of the Er.
countered that her termination was valid pursuant
to an early retirement program to which Villa had
The test is two-fold: (1) there must be actual delay or the
previously applied for; that after serving the
fact that the order of reinstatement pending appeal was
suspension, she had returned to work and had
not executed prior to its reversal; and (2) the delay must
followed up her application for retirement but was
not be due to the Er’s unjustified act or omission. If the
informed that the management did not approve the
delay is due to the Er’s unjustified refusal, the Er may
benefits equivalent to 86% of her salary rate applied
still be required to pay the salaries notwithstanding the
for; and that disappointed with the outcome, she had
reversal of the LA’s decision (Garcia v. PAL, G.R. No.
then brought her complaint against the Robin
164856, August 29, 2009).
Farms.
BACKWAGES
a) Is the company guilty of illegal dismissal when it
did not immediately admit the respondent back to
Backwages
work after her suspension?

33
 LABOR LAW AND SOCIAL LEGISLATION
b) Can the employee’s prior application for an early
retirement be a valid defense by the company for
such dismissal?
A: a) YES. Ordinarily, after an employee has served her
suspension, she should be admitted back to work and to
continue to receive compensation for her services. In the
case at bar, after serving the 10-day suspension, Villa
was prevented from entering the premises of the
company. Such act alone amounts to illegal dismissal.
Moreover, the act of the management of advising her to
tender a resignation letter is a strong indication that the
company wanted to severe the employer-employee
relationship between them and that of Villa.
b) NO. In case of early retirement programs, the offer of
benefits must be certain while the acceptance to be
retired should be absolute. An employee who has not
freely given her assent to the retirement plan cannot be
validly dismissed based solely on her application for
such. The company is therefore guilty of illegal dismissal
when it prevented the employee from reporting back to
work because this runs afoul to the rule that an
employee, after serving her suspension, should be
admitted back to work and to continue to receive
compensation for her services.(Robina Farms v. Villa,
G.R. No. 175869, April 18, 2016)
Q: In 1989, Michael Amurao was hired as radio
broadcaster/production manager by Radio
Mindanao Network (RMN). After several years, RMN
decided to reformat and restructure the
programming of its station DWKC, thus, its
president met with Michael and other station
personnel to inform them of the management
decision; that the reformatting will affect their
employment; and that they would be paid their
retirement and other benefits. Michael and his
colleagues then received a letter terminating their
employment effective June 15, 2002. Though they
refused to sign the letters when it was served on
them, they later agreed to compromise with RMN.
Michael thus executed an Affidavit of Quitclaim and
Release. Months after receiving his benefits and his
execution of the quitclaim, Michael filed a complaint
against RMN for illegal dismissal with money claims
in the NLRC. Was the Affidavit of Release/Quitclaim
executed by Michael valid and binding?
A: YES. Not all quitclaims are per se invalid or against
public policy. A quitclaim is invalid or contrary to public
policy only: (1) where there is clear proof that the
waiver was wrangled from an unsuspecting or gullible
person; or (2) where the terms of settlement are
unconscionable on their face. In instances of invalid
quitclaims, the law steps in to annul the questionable
waiver. Indeed, there are legitimate waivers that
represent the voluntary and reasonable settlements of
laborers’ claims that should be respected by the Court as
the law between the parties. Where the party has
voluntarily made the waiver, with a full understanding
of its terms as well as its consequences, and the
consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a
valid and binding undertaking, and may not later be
disowned simply because of a change of mind. A waiver
is essentially contractual. (RMN v. AMURAO, G.R. No.
167225, October 22, 2014)
CONSTRUCTIVE DISMISSAL
34
Constructive dismissal
It occurs when there is cessation of work because
continued employment is rendered impossible,
unreasonable, or unlikely as when there is a demotion in
rank or diminution in pay or when a clear
discrimination, insensibility, or disdain by an Er
becomes unbearable to the Ee leaving the latter with no
other option but to quit (The University of Immaculate
Conception v. NLRC, G.R. No. 181146, January 26, 2011).
MANAGEMENT PREROGATIVE
Management prerogative
This prerogative flows from the established rule that
labor laws do not authorize the substitution of judgment
of the employer in the conduct of his business. The
employer can exercise this prerogative without fear of
liability as long as it is done in good faith for the
advancement of his interests, and not for the purpose of
defeating or circumventing the rights of the employees
under special laws or valid agreements. It is valid as long
as it is not performed in a malicious, harsh, oppressive,
vindictive or wanton manner, or out of malice or spite.
(Great Pacific Employees Union vs. Great Pacific Life
Assurance, G.R. No. 126717, February 11, 1999)
As long as the company’s exercise of the same is
exercised in good faith for the advancement of the
employer’s interest, and not for the purpose of defeating
or circumventing the rights of the employees under
special laws or valid agreements, the courts will uphold
them. (Capitol Medical Center, Inc. v. Meris, G.R. No.
155098, September 16, 2005)
Limitations on management prerogative
It is circumscribed by limitations found in:
1. Law,
2. CBA, or
3. General principles of fair play and justice
NOTE: It must be established that the prerogative being
invoked is clearly a managerial one.
DISCIPLINE
Er's right to discipline his Ees
The Er has the prerogative to instill discipline in his Ees
and to impose reasonable penalties, including dismissal,
on erring Ees pursuant to company rules and
regulations (San Miguel Corporation v. NLRC, G.R. No.
87277, May 12, 1989).
Limitation on the Er’s power to discipline
While management has the prerogative to discipline its
Ees and to impose appropriate penalties on erring
workers, pursuant to company rules and regulations,
however, such management prerogative must be
exercised in good faith for the advancement of the Er’s
interest and not for the purpose of defeating or
circumventing the rights of the Ees under special laws
and valid agreements. (PLDT v. Teves, G.R. No. 143511,
November 15, 2010).
TRANSFER OF EMPLOYEES
 UST LAW PRE-WEEK NOTES 2017
Employer’s right to transfer and reassign Ees
In the pursuit of its legitimate business interests,
especially during adverse business conditions,
management has the prerogative to transfer or assign
Ees from one office or area of operation to another
provided there is no demotion in rank or diminution of
salary, benefits and other privileges and the action is not
motivated by discrimination, bad faith, or effected as a
form of punishment or demotion without sufficient
cause. This privilege is inherent in the right of Ers to
control and manage their enterprises effectively.
Burden of proving that the transfer was reasonable:
The Er must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the Ee; nor
does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Should the Er fail
to overcome this burden of proof, the Ee’s transfer shall
be tantamount to constructive dismissal(Blue Dairy
Corporation v. NLRC, 314 SCRA 401).
CHANGE OF WORKING HOURS
Er’s right to change working hours
The working hours may be changed, at the discretion of
the company, should such change be necessary for its
operations, and that employees shall observe such rules
as have been laid down by the company. (Interphil
Laboratories Union-FFW vs. Interphil Laboratories, Inc.,
G.R. No. 142824, December 19, 2001)
POST-EMPLOYMENT BAN
Non-involvement Clause
A non-involvement clause is not necessarily void for
being in restraint of trade as long as there are
reasonable limitations as to time, trade, and place. It was
also stated in this case that the Labor Law validity of a
non-involvement clause depends upon the nature of
work of the subject employee. Since petitioner was the
Senior Assistant Vice-President and Territorial
Operations Head in charge of respondent’s Hong Kong
and ASEAN operations, she had been privy to
confidential and highly sensitive marketing strategies of
respondent’s business. To allow her to engage in a rival
business soon after she leaves would make respondent’s
trade secrets vulnerable especially in a highly
competitive marketing environment. In sum, we find the
non-involvement clause not contrary to public welfare
and not greater than is necessary to afford a fair and
reasonable protection to respondent. (Daisy Tiu vs.
Platinum Plans, G.R. No. 163512, February 28, 2007)
SOCIAL WELFARE LEGISLATION
SOCIAL SECURITY SYSTEM LAW (R.A. 8282)
COVERAGE
1. Compulsory Coverage
a. All Ees not over 60 years of age and their Ers;
b. Domestic helpers whose income is not less than
P 1000/month and not over 60 years of age and
their Ers;
Limitations:
35
i. Any benefit earned by the Ees under
private benefit plans existing at the time of
the approval of the Act shall not be
discontinued, reduced or otherwise
impaired;
ii. Existing private plans shall be integrated
with the SSS but if the Er under such plan is
contributing more than what is required
by this Act, he shall pay to the SSS the
amount required to him, and he shall
continue with his contributions less the
amount paid to SSS;
iii. Any changes, adjustments, modifications,
eliminations or improvements in the
benefits of the remaining private plan after
the integration shall be subject to
agreements between the Ers and the Ees
concerned; and
iv. The private benefit plan which the Er shall
continue for his Ees shall remain under the
Ers management and control unless there
is an existing agreement to the contrary
c. All self-employed – considered both an Er and
Ee
NOTE: A self-employed person is one whose
income is not derived from employment as well as
those mentioned in Sec. 9-A of the law [RA 8282, Sec.
8(s)].
d. All self-employed professionals;
e. Partners and single proprietors of business;
f. Actors and actresses, directors, scriptwriters
and news correspondents who do not fall
within the definition of the term “Ee”;
g. Professional athletes, coaches, trainers and
h. jockeys; AND
i. Individual farmers and fisherman. (R.A. 8282,
Sec. 9-A)
2. Voluntary
a. Spouses who devote full time to managing the
household and family affairs, unless they are
also engaged in other vocation or employment
which is subject to mandatory coverage; [R.A.
8282, Sec. 9(b)]
b. Filipinos recruited by foreign-based Ers for
employment abroad may be covered by the SSS
on a voluntary basis; (Sec. 9[c], R.A. 8282)
c. Ee separated from employment to maintain his
right to full benefits
d. Self-employed who realizes no income for a
certain month
3. By agreement
Any foreign government, international
organization, or their wholly-owned
instrumentality employing workers in the
Philippines, may enter into an agreement with the
Philippine government for the inclusion of such Ees
in the SSS except those already covered by their
respective civil service retirement systems.
NOTE: Seafarers are also covered by the SSS Law –
The result of the Memorandum of Agreement entered by
SSS and DOLE approved by the Social Security
Commission per the Commission's Resolution No. 437,
dated July 14, 1988 was that the Standard Contract of
 LABOR LAW AND SOCIAL LEGISLATION
Employment to be entered into between foreign
shipowners and Filipino seafarers is the instrument by
which the former express their assent to the inclusion of
the latter in the coverage of the Social Security Act. (Ben
Sta. Rita v. Court of Appeals, G.R. No. 119891, (1995).
SICKNESS BENEFITS
Sickness benefit
It is a daily allowance paid to a covered Ee who becomes
sick and is confined in a hospital for more than 3 days or
elsewhere with the Commission’s approval.
Reimbursement by SSS
GR: SSS shall reimburse the Er or pay the unemployed
member only for confinement within 1 year
immediately preceding the date the claim for benefit or
reimbursement is received by the SSS.
XPN: Confinement in a hospital in which case the claim
for benefit or reimbursement must be filed within 1 year
from the last day of confinement (R.A. 8282, Sec. 14[c]).
PERMANENT DISABILITY BENEFITS
Permanent disability benefit
It is a cash benefit paid to a member who becomes
permanently disabled, either partially or totally.
Permanent total disability
The following are deemed permanent total disabilities:
1. Complete loss of sight of both eyes;
2. Loss of two limbs at or above the ankle or wrists;
3. Permanent complete paralysis of two limbs;
4. Brain injury resulting to incurable imbecility or
insanity; and
5. Such cases as determined and approved by the SSS
[RA 8282, Sec. 13-A (d)].
The company-designated physician is expected to arrive
at a definite assessment of the seafarer’s fitness to work
or permanent disability within the period of 120 or 240
days. That should he fail to do so and the seafarer’s
medical condition remains unresolved, the seafarer
shall be deemed totally and permanently disabled
(Kestrel Shipping Co. v. Munar, G.R. No. 198501, Jan. 30,
2013).
The mere lapse of the 120-day period itself does not
automatically warrant the payment of permanent total
disability benefits. If the 120 days initial period is
exceeded and no such declaration is made because the
seafarer requires further medical attention, then the
temporary total disability period may be extended up to
a maximum of 240 days, subject to the right of the
employer to declare within this period that a permanent
partial or total disability already exists (Osg
Shipmanagement v. Pellazar, G.R. No. 198367, August 6,
2014).
RETIREMENT BENEFIT
Retirement benefit
It is a cash benefit paid to a member who can no longer
work due to old age.
36
Children of the retiree member who are entitled to
dependent’s pension
Only 5 minor children, beginning from the youngest, are
entitled to the dependent’s pension. No substitution is
allowed. Where there are more than 5 legitimate and
illegitimate children, the legitimate ones will be
preferred (RA 8282, Sec. 12-A).
Prescriptive period to claim the benefits
GR: 10 years from the date of contingency
The term “parents” in the phrase “dependent parents” in
the afore-quoted Article 167 (j) of the Labor Code is used
and ought to be taken in its general sense and cannot be
unduly limited to “legitimate parents” as what the ECC
did. The phrase “dependent parents” should, therefore,
include all parents, whether legitimate or illegitimate
and whether by nature or by adoption. When the law
does not distinguish, one should not distinguish. Plainly,
“dependent parents” are parents, whether legitimate or
illegitimate, biological or by adoption, who are in need
of support or assistance (Bartolome v. SSS, G.R. No.
192531, November 12, 2014).
Q: Due to the death of John Colcol, an employee of
Scanmar Maritime Services, Inc., Bernardina P.
Bartolome, John’s biological mother filed a claim for
death benefits with the Social Security System (SSS).
However, the SSS La Union office denied the claim
and ruled that Bartolome is not entitled to death
benefits of Colcol because she is no longer
considered as the parent of John Colcol as he was
legally adopted by Cornelio Colcol. On appeal, the
Employees’ Compensation Commission (ECC)
affirmed the decision of SSS. The ECC ruled that the
legal parent referred to by P.D. 626, as amended, as
the beneficiary, who has the right to file the claim, is
the adoptive father of the deceased and not herein
appellant. Is the biological mother entitled to
receive the benefits?
A: YES. The term "parents" in the phrase "dependent
parents" in Article 167 (j) of the Labor Code is used and
ought to be taken in its general sense and cannot be
unduly limited to "legitimate parents." (Bartolome v. SSS,
G.R. No. 192531, Nov. 12, 2014, J. Velasco)
Bersamin Case:
Q: Crisanto, a faculty member from 1960 to 2000
when his contract was no longer renewed, filed an
illegal dismissal case against Ateneo de Naga
University. Ateneo de Naga maintained that Crisanto
was a participant and regular contributor to the
Ateneo de Naga Employees Retirement Plan and
upon reaching the age of 60 on June 26, 1999, he was
deemed automatically retired, and that he had only
been allowed to teach thereafter on contractual
basis. During the pendency of the action, Cristiano
executed a receipt and quitclaim respecting his
benefits under the plan. Was Crisanto’s claim for the
payment of accrued salaries and benefits for the
period that he was not reinstated rendered moot
and academic by his receipt of the retirement
benefits and his execution of the corresponding
receipt and quitclaim?
A: NO. The execution of the receipt and quitclaim was
not a settlement of the Crisanto’s claim for accrued
 UST LAW PRE-WEEK NOTES 2017
salaries. The quitclaim was related only to the
settlement of the retirement benefits, which could not
be confused with the reliefs related to the complaint for
illegal dismissal. Retirement is of a different species
from the reliefs awarded to an illegally dismissed
employee. Ateneo de Naga is obliged to reinstate
Crisanto and to pay his wages during the period of
appeal of the LA’s favorable decision until such reversal
was made by the NLRC. (Castro v. Ateneo de Naga
University, et. al, G.R. No. 175293, 23 July 2014)
GSIS LAW (R.A. 8291)
COVERAGE
Coverage of life insurance, retirement and other
social security protection
GR: All members of the GSIS shall have life insurance,
retirement, and all other social security protections such
as disability, survivorship, separation, and
unemployment benefits (R.A. 8291, Sec. 3).
XPNs: The members of the following shall have life
insurance only:
1. The Judiciary; and
2. Constitutional Commissions
Compulsory coverage of life insurance
GR: All Ees receiving compensation who have not
reached the compulsory retirement age, irrespective of
employment status
XPNs: All members of the Armed Forces of the
Philippines and the Philippine National Police (PNP).
SEPARATION BENEFITS
Effects of separation from service with regard to
membership
A member separated from the service shall continue to
be a member and shall be entitled to whatever benefits
he has qualified to (once a member always a member).
NOTE: A member separated for a valid cause shall
automatically forfeit his benefits, unless the terms of
resignation or separation provide otherwise. In the case
of forfeiture, the separated employee shall be entitled to
receive only ½ of the cash surrender value of his
insurance.
RETIREMENT BENEFITS
Rule in case of extension of service in order to be
entitled for retirement benefits
The Supreme Court held that the head of the
government agency concerned is vested with
discretionary authority to allow or disallow extension of
the service of an official or Ee who has reached 65 years
old without completing the 15 years of government
service. However, this discretion is to be exercise
conformably with the provisions of Civil Service
Memorandum Circular No. 27, series of 1990 which
provides that the extension shall not exceed 1 year
(Rabor v. CSC, G.R. No. 111812, May 31, 1995).
PERMANENT DISABILITY BENEFITS
37
Total disability
Complete incapacity to continue with present
employment or engage in any gainful occupation due to
the loss or impairment of the normal functions of the
physical and/or mental faculties of the member
Instances when recovery is precluded
If the permanent disability was due to the following acts
of the subject Ee, recovery from the GSIS is precluded:
1. Grave misconduct
2. Notorious negligence
3. Habitual intoxication
4. Willful intention to kill himself or another
Q: Inocencio Vedad a seafarer employed by
Transocean after the pre-employment medical
examination (PEME) gave him a clean bill of health.
Before the expiry of his 10-month contract
Inocencio was repatriated for medical reasons. He
underwent tonsillectomy but was later found by a
histopathology report to be suffering from cancer of
the right tonsil. Transocean promised to shoulder
medical expenses but failed to do so thus the
procedure could not continue. Inocencio filed a
complaint before LA for permanent disability
benefits and sickness allowance. The LA awarded
permanent total disability benefits however NLRC
vacated LA ruling and awarded sickness allowance
equivalent to 120 days salary and reimbursement of
his medical expenses. The CA set aside the award for
sickness allowance but affirmed the grant for
reimbursement of medical expenses. Is Inocencio
entitled to sickness allowance and permanent total
disability benefits?
A: Inocencio is entitled to receive sickness allowance
from his repatriation for medical treatment, which is
equivalent to his basic wage for a period not exceeding
120 days or four months. The fact that Inocencio's
sickness was later medically declared as not work-
related does not prejudice his right to receive sickness
allowance, considering that he got ill while on board the
ship and was repatriated for medical treatment before
the end of his 10-month employment contract. Pending
the final determination by a third opinion pursuant to
the mechanism provided under the third paragraph of
Sec. 20(B)(3), the seafarer is still entitled to sickness
allowance but not to exceed 120 days.
However He is not entitled to receive permanent total
disability benefits. Tonsil cancer is not a work-related
illness. Inocencio carried the burden of showing by
substantial evidence that his cancer developed or was
aggravated from work-related causes. And failing to
seek a second opinion from a physician of his choice, the
company-designated doctor's certification must prevail.
In the absence of any duly medically proven work-
relatedness, Inocencio cannot be accorded permanent
total disability benefits. (Transocean Ship Management
v. Inocencio Vedad, G.R. No. 194490-91, March 20, 2013, J.
Velasco)
TEMPORARY DISABILITY BENEFITS
Temporary total disability
 LABOR LAW AND SOCIAL LEGISLATION
It accrues or arises when the impaired physical and/or
mental faculties can be rehabilitated and/or restored to
their normal functions [R.A. 8291, Sec. 2(t)].
SURVIVORSHIP BENEFITS
No presumption of Sham Marriages
The present GSIS law does not presume that marriages
contracted within three years before retirement or
death of a member are sham marriages contracted to
avail of survivorship benefits. The law acknowledges
that whether the surviving spouse contracted the
marriage mainly to receive survivorship benefits is a
matter of evidence. It no longer prescribes a sweeping
classification that unduly prejudices the legitimate
surviving spouse and defeats the purpose for which
Congress enacted the social legislation. (Alcantara, Book
II; GSIS v. Montesclaros, G.R. No. 146494, July 14, 2004)
Prescriptive period to claim the benefits
GR: 4 years from the date of contingency
XPNs: Life insurance and retirement (R.A. 8291, Sec. 28).
LIMITED PORTABILITY LAW (R.A. 7699)
Limited portability rule
A covered worker who transfers employment from one
sector to another or is employed on both sectors, shall
have creditable services or contributions on both
Systems credited to his service or contribution record in
each of the Systems and shall be totalized for purposes
of old-age, disability, survivorship, and other benefits in
either or both Systems (R.A. 7699, Sec. 3).
EMPLOYEES’ COMPENSATION
Employees’ compensation program
It is the program provided for in Arts. 166 to 208 of the
LC whereby a fund known as the State Insurance Fund is
established through premium payments exacted from
Ers and from which the Ees and their dependents in the
event of work-connected disability or death, may
promptly secure adequate income benefit, and medical
or related benefits.
Recovery from the State Insurance Fund does not
bar a claim for benefits under the SSS Law
As expressly provided for in Art. 173 of the LC, payment
of compensation under the State Insurance Fund shall
not bar the recovery of benefits under the SSS Law.
Bersamin Case:
Q: Ernesto, an overseas Filipino worker, suffered
multiple bone fractures on his left foot while
performing his work. He was then repatriated in the
Philippines, wherein he was treated for his bone
fractures for more than three months. Such injury
was reported to Wallem, Inc., the company he was
working for. However, during the time that he was
undergoing treatment for his bone fractures, he also
sought the service of another doctor for his eye
condition and underwent an eye surgery. Is Ernesto
entitled to claim disability benefits for both foot and
eye injuries?
38
A: NO. Ernesto is only entitled to claim for disability
benefits for his foot injury and not for his eye injury. It is
the employee’s duty to present substantial evidence
showing that he acquired the injury that resulted in his
disability during the term of his employment contract.
This proof is crucial when the injury was not reported
within the required period after the accident has
occurred. Since Ernesto did not report the eye injury and
did not present any proof having sustained such during
the term of his contract to the company, his eye injury
cannot be considered as work-related and hence not
compensable. (Wallem Maritime Services, Inc. v.
Tanawan, G.R. No. 160444, 29 August 2012)
LABOR RELATIONS
COVERAGE
Theory of increased risk
The term “sickness” as defined in Art. 167(l) of the LC is
a recognition of the theory of increased risk. To establish
compensability under the same, the claimant must show
substantial proof of work-connection, but what is
required is merely a reasonable work-connection and
not a direct causal relation. Proof of actual cause of the
ailment is not necessary. The test of evidence of relation
of the disease with the employment is probability and
not certainty. (Jimenez v. Employees’ Compensation
Commission, G.R. No. L-58176, Mar. 23, 1984; Panotes vs.
ECC, G.R. No. L-64802, Sept. 23, 1985)
Going and coming rule
GR: In the absence of special circumstances, an Ee
injured while going to or coming from his place of
work is excluded from the benefits of Workmen’s
Compensation Act.
XPNs:
1. Where the Ee is proceeding to or from his work on
the premises of the Er;
2. Proximity Rule—where the Ee is about to enter or
about to leave the premises of his Er by way of
exclusive or customary means of ingress and egress;
3. Ee is charged, while on his way to or from his place
of employment or at his home, or during this
employment with some duty or special errand
connected with his employment; and
4. Where the Er as an incident of the employment
provides the means of transportation to and from
the place of employment.
The POEA-SEC provides for a disputable presumption of
work-relatedness for non-POEA-SEC-listed
occupational disease and the resulting illness or injury
which he may have suffered during the term of his
employment contract. This disputable presumption is
made in the law to signify that the non-inclusion in the
list of compensable diseases/illnesses does not translate
to an absolute exclusion from disability benefits. In
other words, the disputable presumption does not
signify an automatic grant of compensation and/or
benefits claim; the seafarer must still prove his
entitlement to disability benefits by substantial
evidence of his illness' work-relatedness (Jebsen
Maritime v. Ravena, G.R. No. 200566, September 17,
2014).
 UST LAW PRE-WEEK NOTES 2017
RIGHT TO SELF ORGANIZATION
It is the right of workers and Ees to form, join or assist
unions, organizations or associations for purposes of CB
and negotiation and for mutual aid and protection. It
also refers to the right to engage in peaceful concerted
activities or to participate in policy and decision-making
processes affecting their rights and benefits.
Extent of the Right to Self-Organization
It includes the right:
1. To form, join and assist labor organizations for the
purpose of CB through representatives of their own
choosing; and
2. To engage in lawful and concerted activities for the
purpose of CB or for their mutual aid and protection
(Art. 246, LC).
WHO MAY UNIONIZE FOR PURPOSES OF
COLLECTIVE BARGAINING
1. All persons employed in commercial, industrial and
agricultural enterprises
2. Workers in religious, charitable, medical, or
educational institutions, whether operating for
profit or not
3. Supervisors
4. Security Guards
5. Workers of Cooperatives
Bersamin Case:
Q: Lepanto Consolidated Mining Co. is engaged in
large-scale mining in Benguet. Meanwhile, The
Lepanto Capataz Union (LCU) is a labor organization
duly registered before DOLE. Seeking to represent
139 capatazes, LCU filed a petition for consent
election before the Regional Office of DOLE. Lepanto
opposed the petition, alleging that LCU is in fact
filing a petition for certification election, because it
contests the status of the Lepanto Employees Union
(LEU) as the current collective bargaining agent, of
which the capatazes are already members. The Med-
Arbiter, granting the petition for consent election,
ruled that the capatazes form a separate bargaining
unit because they are not rank-and-file employees
and allowed the holding of the consent election. Was
the Med-Arbiter correct?
A: YES. The capatazes were performing functions totally
different from those performed by the rank-and-file
employees, and that the capatazes were "supervising
and instructing the miners, mackers and other rank-
and-file workers under them, assess[ing] and
evaluat[ing] their performance, mak[ing] regular
reports and recommend[ing] new systems and
procedure of work, as well as guidelines for the
discipline of employees."
The bargaining unit sought to be represented by LCU are
the capataze employees of Lepanto. There is no other
labor organization of capatazes within the employer
unit except herein LCU. Thus, Lepanto is an unorganized
establishment in so far as the bargaining unit of
capatazes is concerned. In any event, we affirm that
capatazes or foremen are not rank-and-file employees
because they are an extension of the management, and
as such they may influence the rank-and-file workers
under them to engage in slowdowns or similar activities
39
detrimental to the policies, interests or business
objectives of the employers. (LEPANTO CONSOLIDATED
MINING CO. v. THE LEPANTO CAPATAZ UNION, G.R. No.
157086, 18 February 2013)
WHO CANNOT FORM, JOIN, AND ASSIST LABOR
ORGANIZATIONS
Exceptions to Article 243, notwithstanding the all-
inclusive coveraage of “all persons”
1. High level or Managerial Government Ees (E.O. 180,
Sec. 3).
2. Ees of International organizations with functional
immunities
3. Managerial Ees – vested with the powers or
prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline Ees [LC, Art.
212 (m)].
Supervisory Ees shall not be eligible for
membership in a labor organization of the rank-
and-file Ees but may join, assist or form separate
labor organizations of their own; co-mingling is
prohibited.
However, rank and file and supervisors union
belonging to the same company can join the same
federation.
4. Members of the AFP including the police officers,
policemen, firemen, and jail guards (E.O. 180, Sec. 4).
5. Confidential Ees who have access to confidential
labor relations information.
6. Ees of cooperatives who are its members. However
they may form workers’ association.
7. Non-Ees
8. Government Ees, including GOCC’s with original
charters
9. Aliens without a valid working permit or aliens with
working permits but are nationals of a country
which do not allow Filipinos to exercise their right
of self-organization and to join or assist labor
organizations [LC, Art. 269; D.O. No. 9, Rule II, Sec. 2
(1997)].
XPN: Alien Ees with valid working permits issued by
the DOLE, if they are nationals of a country which
grants the same or similar rights to Filipino
workers, as certified by the DFA (reciprocity
clause).
Doctrine of Necessary Implication
While Art. 255 (as renumbered) of the Labor Code
singles out managerial employees as ineligible to join,
assist or form any labor organization, under the doctrine
of necessary implication, confidential employees are
similarly disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as that
which is expressed (National Association of Trade Unions
(NATU) – Republic Planters Bank Supervisors Chapter v.
Torres, G.R. No. 93468, Dec. 29, 1994).
CONFIDENTIAL EMPLOYEES
Definitions based from jurisprudence
They assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.
 LABOR LAW AND SOCIAL LEGISLATION
(Philips Industrial Development v. NLRC, G.R. No. 88957,
June 25, 1992).
Confidential Ees are defined as those who:
1. Assist or act in a confidential capacity,
2. Formulate, determine, and effectuate management
policies in the field of labor relations.
The two (2) criteria are cumulative, and both must be
met if an employee is to be considered a confidential
employee (Tunay na Pagkakaisa ng Manggawa sa Asia
Brewery vs. Asia Brewer, Inc., G.R. No. 162025, August 3,
2010).
Exception: Payroll master. The position of Payroll
Master does not involve dealing with confidential labor
relations information in the course of the performance
of his functions. (San Miguel Foods Inc. v. San Miguel
Corporation Supervisors and Exempt Union, G.R. No.
146206, August 1, 2011).
PROPER BARGAINING UNIT
It is a group of Ees of a given Er, comprised of all or less
than all of the entire body of the Ees which the collective
interest of all the Ees consistent with equity to the Er,
indicate to be best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining
provisions of the law.
Methods in determining the exclusive bargaining
representative
1. Request for SEBA Certification (DO No. 40-I-15 s. 2015)
which repealed Voluntary Recognition as a mode of
securing SEBA Status
2. Certification Election
3. Consent Election
4. Run-off Election
5. Re-run Election
REQUEST FOR SEBA CERTIFICATION
This is a new mode of determining SEBA. D.O. No. 40-I-
15, s. 2015 issued on September 07, 2015, has expressly
repealed the entire set of Rules applicable to Voluntary
Recognition in the Implementing Rules on Book V of the
Labor Code. (Chan, 2017)
Rationale for the Repeal
It is an absolute that in an inter-union or
certification/representation dispute, an employer is a
mere by-stander and not considered as a party thereto
with a concomitant right to oppose a petition for petition
for certification election. Being the sole and exclusive
concern and domain of the employees, the previous
mode of allowing the employer to extend “voluntary
recognition”to enable union to become a SEBA is
patently incongruous and self-contradictory rule that
runs diametrically opposed to the autonomous process
of choosing the SEBA. By allowing the employer to
extend “voluntary recognition” to a union, it is no longer
the employees but the employer who determines and
designates the SEBA when is suppose to be just a mere
“by-stander” in such determination and designation
process. (Chan, 2017)
Any legitimate labor organization may file a Request in
the DOLE Regional Office which issued its certificate for
40
registration or certificate of creation of chartered local,
as the case may be.
Effect of the Issuance of the Certification as SEBA
a. The certified union shall enjoy all the rights and
privileges of an exclusive bargaining agent of all the
employees in the covered bargaining unit.
b. Certification Bar Rule. The issuance of the SEBA
Certification as SEBA bars the filing of a petition election
by any labor organization for a period of one (1) year
from the date of issuance.
CERTIFICATION ELECTION
It is the process of determining through secret ballot the
sole and exclusive representative of the Ees in an
appropriate bargaining unit, for purposes of CB or
negotiation. [IRR, Book V, Rule I, Sec. 1 (h)]
Purpose of a certification election
It is a means of determining the worker’s choice of:
1. Whether they want a union to represent them for CB
or if they want no union to represent them at all.
2. And if they choose to have a union to represent
them, they will choose which among the contending
unions will be the sole and exclusive bargaining
representative of the Ees in the appropriate
bargaining unit.
Filing a petition for certification election (PCE)
The following may file a PCE:
1. Any LLO
2. A national union or federation which has already
issued a charter certificate to its local chapter
participating in the CE
3. A local chapter which has been issued a charter
certificate
4. An Er only when requested to bargain collectively in
a bargaining unit where no registered CBA exists
(IRR as amended by D.O. 40-F-03, Book V, Rule VIII,
Sec. 1).
In registration of federation or national union, the
20% membership requirement may not be
complied with
The registration requirement of submitting the names of
all its members comprising at least 20% of all the Ees in
the bargaining unit where it seeks to operate is
applicable only to registration of independent union. LC
merely requires for proof of affiliation of at least 10 local
chapters and the names and addresses of the companies
where they operate. No 20% membership requirement
is required for registration of a federation or national
union.
Double Majority rule (certification election)
1. Valid election – majority of eligible voters shall
have validly cast their votes (First Majority rule).
2. Winning Union – the winner who obtained
majority of the valid votes casts shall be declared as
the bargaining agent in the bargaining unit (Second
Majority rule).
Employer as a Bystander (Bystander Rule)
 UST LAW PRE-WEEK NOTES 2017
In all cases, whether the PCE is filed by an Er or a LLO,
the Er shall not be considered a party thereto with a
concomitant right to oppose a PCE. The Er’s
participation in such proceedings shall be limited to: (1)
being notified or informed of petitions of such nature;
and (2) submitting the list of Ees during the pre-election
conference should the Mediator-Arbiter act favorably on
the petition.
XPN: Er may file a petition for certification election
when requested to bargain collectively. But thereafter it
should not be allowed to have an active role in the CE; it
shall merely act as a bystander.
NOTE: Some of the Ees may not want to have a union;
hence, “no union” is one of the choices named in the
ballot. If “no union” wins, the company or the bargaining
unit remains un-unionized for at least 12 months, the
period is known as 12-month bar. After that period, a
PCE may be filed again.
Bersamin Case:
Q: The National Union of Workers in Hotel
Restaurant and Allied Industries-Heritage Hotel
Manila Supervisors Chapter filed a petition for
certification election, seeking to represent all the
supervisory employees of Heritage Hotel Manila.
Heritage Hotel filed its opposition, but such was
deemed denied when the Med-Arbiter issued his
order for the conduct of the certification election.
When the Union moved for the conduct of the pre-
election conference, the Hotel primarily filed its
comment on the list of employees submitted by the
Union and simultaneously sought the exclusion of
some from the list allegedly for occupying either
confidential or managerial positions. The Hotel
thereafter filed a petition for the cancellation of the
Union’s registration for failing to submit its annual
financial reports and an updated list of members as
required and a separate motion seeking either the
dismissal or suspension of the certification election
proceedings on the basis of its pending petition for
the cancellation of union registration. Should the
petition for the cancellation of union registration
based on mixed membership of supervisors and
managers in a labor union, and the non-submission
of reportorial requirements to the DOLE justify the
suspension of the proceedings for the certification
elections or even the denial of the petition for the
certification election?
A: NO. Basic in the realm of labor union rights is that the
certification election is the sole concern of the workers,
and the employer is deemed an intruder as far as the
certification election is concerned. Thus, the Hotel
lacked the legal personality to assail the proceedings for
the certification election, and should stand aside as a
mere bystander who could not oppose the petition, or
even appeal the Med-Arbiter’s orders relative to the
conduct of the certification election. Furthermore, the
actual functions of an employee, not his job designation,
determine whether the employee occupied a
managerial, supervisory or rank-and-file position. Mere
allegations sans substance would not be enough, most
especially because the constitutional right of workers to
self-organization would be compromised. Hence, the
conduct of the certification election is valid. (The
Heritage Hotel Manila v. Secretary of Labor and
Employment, et. al, G.R. No. 172132, 23 July 2014)
41
Five-year representation status of a bargaining
agent cannot be extended
While the parties may agree to extend the CBA’s original
five-year term together with all other CBA provisions,
any such amendment or term in excess of five years will
not carry with it a change in the union’s exclusive CB
status. Under Art. 253-A, LC, the exclusive bargaining
status cannot go beyond five years and the
representation status is a legal matter not for the
workplace parties to agree upon. (FVC Labor Union-
Philippine Transport and General Workers Organization
v. Sama-samang Nagkakaisang Manggagawa sa FVC-
Solidarity of Independent and General Labor
Organizations, G.R. No. 176249, November 27, 2009).
Any seeming infirmity in the application and admission
of union membership, most especially in cases of
independent labor unions, must be viewed in favor of
valid membership. (Eagle Ridge Golf & Country Club V.
Court Of Appeals And Eagle Ridge Employees Union
(Ereu) G.R. No. 178989, March 18, 2010, Velasco, Jr., J.)
GROUNDS FOR DENIAL OF PCE
In the following instances, PCE is barred:
1. Non-appearance – Non appearance of the
petitioner for two consecutive scheduled
conferences before the Mediator-Arbiter despite
notice
2. Unregistered Union
NOTE: A filing of a petition to cancel DOES NOT
SUSPEND the PCE. To serve as a ground for
dismissal, the legal personality of the petitioner
should have been revoked or cancelled with finality.
3. No Charter
4. Absence of Employment Relationship –
5. The 12 month Bar – Filing of a petition within one
(1) year from the date of the recording of the
voluntary recognition, or within the same period
from a valid certification, consent or run-off election
where no appeal on the results of the certification,
consent or run-off election is pending (One year bar
rule).
6. Negotiation or Deadlock
7. Existing CBA
8. Lack of Support – In an organized establishment,
the failure to submit the twenty five percent (25%)
signature requirement to support the filling of the
petition for the certification election (Failure to
submit 25% consent requirement rule).
NOTE: Petition for cancellation of registration is not a
bar to a PCE. No prejudicial question shall be
entertained in a PCE (D.O. 40-03).
When petition for certification election is filed
The proper time to file the PCE depends on whether the
certified bargaining unit has a CBA or not:
1. If it has no CBA, the petition may be filed anytime
outside the 12-month bar (certification year).
2. If it has CBA, it can be filed only within the last 60
days of the 5th year of the CBA.
NOTE: At the expiration of the freedom period, the Er
shall continue to recognize the majority status of the
incumbent bargaining agent where no PCE is filed.
 LABOR LAW AND SOCIAL LEGISLATION
Q: In what instance may a petition for certification
election be filed outside the freedom period of a
current collective bargaining agreement? (1997
BAR)
A: As a general rule in an establishment where there is a
CBA in force and effect, a PCE may be filed only during
the freedom period of such CBA. But to have that effect,
the CBA should have been filed and registered with the
DOLE (LC, Art. 231, 253-A and 256).
Alternative Answer: A PCE may be filed outside the
freedom period of a current CBA if such CBA is a new
CBA that has been prematurely entered into, meaning, it
was entered into before the expiry date of the old CBA.
The filing of the PCE shall be within the freedom period
of the old CBA which is outside the freedom period of the
new CBA that had been prematurely entered into.
Unorganized Establishment
An unorganized establishment is a bargaining unit with
no recognized or certified bargaining agent. It does not
necessarily refer to an entire company.
Requirement for certification election in
unorganized establishments
The certification election shall be automatically
conducted upon the filing of a PCE by a LLO.
Requisites for certification election in an Organized
Establishment
The Mediator-Arbiter is required to automatically order
the conduct of a CE by secret ballot in an organized
establishment as soon as the following requisites are
met:
1. A petition questioning the majority status of the
incumbent bargaining agent is filed before the DOLE
within the 60-day freedom period;
2. Such petition is verified;
3. The petition is supported by the written consent of
at least 25% of all the Ees in the bargaining unit (LC,
Art. 256; TUPAS-WFTU v. Laguesma, G.R. No. 102350,
June 30, 1994).
CONSENT ELECTION
It is an election voluntarily agreed upon by the parties,
with or without the intervention by the DOLE. [IRR,
Book V, Rule I, Sec.1 (h)]
NOTE: To afford an individual Ee-voter an informed
choice where a local/chapter is the petitioning union,
the local/chapter shall secure its certificate of creation
at least five working days before the date of the consent
election. (IRR as amended by DO 40-F03, Book V, Rule
VIII, Sec. 1)
RUN-OFF ELECTION
It is an election conducted when:
1. A CE which provides for three or more choices
results in none of the contending unions receiving a
majority of the valid votes cast, and
2. There are no objections or challenges which if
sustained can materially alter the results, provided
42
3. The total number of votes for all the contending
unions is at least 50% of the number of votes cast
(IRR, Book V, Rule X, Sec. 1).
4. None of the choices obtained the majority of the
valid votes cast (50%+ 1 second majority);
5. The two choices which garnered the highest votes
will be voted and the one which garners the highest
number of votes will be declared the winner
provided they get the majority votes of the total
votes cast.
Requirements for a run-off election
1. An election was conducted with three or more
choices
2. None of the contending union obtained the required
majority vote of 50% + 1 of the valid votes cast
3. There are no objections or challenges that can alter
the results materially
4. The number of votes received by all contending
unions when added together amounts to at least
50% of the total votes cast
NOTE: Thus if “no union” garnered the majority vote, no
run-off elections may be held.
Choices in a run-off election
The unions receiving the highest and 2nd highest number
of the votes cast (IRR, Book V, Rule X, Sec. 2).
NOTE: “No Union” is not a choice in the Run-off Election.
RE-RUN ELECTION
It is an election that takes place when
1. One choice receives a plurality of the vote and the
remaining choices results in a tie; or
2. All choices received the same number of votes.
NOTE: In both instances, the “no union” is also a choice.
UNION DUES AND SPECIAL ASSESSMENTS
Legitimate labor organizations are authorized to collect
reasonable amount of the following:
1. Membership fees
2. Union dues
3. Assessments
4. Fines
5. Contribution for labor education and research,
mutual death and hospitalization benefits, welfare
fun, strike fund and credit and cooperative
undertakings [LC, Art. 277 (a)]
6. Agency fees [LC, Art. 248 (e)]
Assessments
Payments used for a special purpose. Especially if
required only for a limited time.
Union dues
These are regular monthly contributions paid by the
members to the union in exchange for the benefits given
to them by the CBA and to finance the activities of the
union in representing the union.
Check-off
 UST LAW PRE-WEEK NOTES 2017
It is a method of deducting from an Ee’s pay at a
prescribed period, the amounts due the union for fees,
fines and assessments.
NOTE: Deductions for union service fees are authorized
by law and do not require individual check-off
authorizations.
Special assessments or extraordinary fees
These are assessments for any purpose or object other
than those expressly provided by the labor
organization’s Constitution and by-laws.
REQUIREMENTS FOR VALIDITY
GR: No special assessments, attorney’s fees, negotiation
fees or any other extraordinary fees may be checked off
from any amount due to an Ee without individual
written authorization duly signed by the Ee.
The authorization should specify the:
1. Amount
2. Purpose &
3. Beneficiary of the deduction.
XPNs:
1. For mandatory activities under the LC
2. For Agency Fees
3. When non-members of the union avail of the
benefits of the CBA:
a. Non-members may be assessed union dues
equivalent to that paid by union members;
b. Only by board resolution approved by majority
of the members in general meeting called for
the purpose.
Requisites for a valid levy of special assessment or
extraordinary fees
1. Authorization by a written resolution of the
majority of all members at the general membership
meeting duly called for that purpose;
2. Secretary’s record of the minutes of the meeting,
which must include the
a. List of members present
b. Votes cast
c. Purpose of the special assessments
d. Recipient of such assessments;
3. Individual written authorization to check-off duly
signed by the Ee concerned – to levy such
assessments. [LC, Art. 241 (n)]
NOTE: Substantial compliance of the requirements is
not enough in view of the fact that the special
assessment will diminish the compensation of union
members (Palacol v. Ferrer-Calleja, G.R. No. 85333)
AGENCY FEES
It is an amount equivalent to union dues, which a non-
union member pays to the union because he benefits
from the CBA negotiated by the union.
NOTE: Payment by non-union members of agency fees
does not amount to unjust enrichment because the
purpose of such dues is to avoid discrimination between
union and non-union members.
43
REQUISITES FOR ASSESSMENT
Requisites for assessment of agency fees
1. The Ee is part of the bargaining unit
2. He is not a member of the union
3. He partook of the benefits of the CBA
COLLECTIVE BARGAINING AGREEMENT
Collective Bargaining Agreement (Law of the Plant)
It is a contract executed upon request of either the Er or
the exclusive bargaining representative of the Ees
incorporating the agreement reached after negotiations
with respect to wages, hours of work, terms and
conditions of employment, including proposals for
adjusting any grievance or questions under the
agreement.
Filing for registration of collective bargaining
agreement
Within 30 days from execution of CBA, the parties
thereto shall submit the agreement to the Regional
Office which issued the certificate of registration/
certificate of creation of chartered local of the labor
union-party to the agreement.
Ratification of the CBA
G.R. The agreement negotiated by the employees' EBR
should be ratified or approved by the majority of all the
workers in the bargaining unit. The proper ratifying
group is not the majority union but the majority of all the
workers in the bargaining unit represented by the
negotiation. A CBA is valid between the parties, but
unless it will be ratified, it shall not be enforceable.
XPN. Ratification of the CBA by the employees is not
needed when the CBA is a product of an arbitral award
by a proper government authority [LC, Art. 263 (g)] or a
voluntary arbitrator (LC, Art. 262).
Zipper clause
It is a stipulation in a CBA indicating that issues that
could have been negotiated upon but not contained in
the CBA cannot be raised for negotiation when the CBA
is already in effect.
While the contracting parties may establish such
stipulations, clauses, terms and conditions, as they may
see fit, the right to contract is still subject to the
limitation that the agreement must not be contrary to
law or public policy. The requirement of a masteral
degree for tertiary education teachers is not
unreasonable. The operation of educational institutions
involves public interest. They may be required to take an
examination or to possess postgraduate degrees as
prerequisite to employment (University of the East v.
Pepanio, G. R. No. 193897, Jan. 23, 2013)
"Automatic renewal clause" or principle of hold over
or CBA continuity
Itrefers to that provision of the Labor Code (Article253)
which states that "It shall be the duty of both parties (to
a CBA) to keep the status quo and to continue in full
force and effect the terms andconditions of the existing
 LABOR LAW AND SOCIAL LEGISLATION
agreement during the 60-day (freedom) period and/or continued employment until they are promoted or
until a new agreementis reached by the parties." transferred out of the bargaining unit or the agreement
is terminated.
MANDATORY PROVISIONS OF THE CBA
Requisites for termination on account of
1. Grievance machinery enforcement of a union security clause in a
2. Voluntary Arbitration collective bargaining agreement
3. Wages
4. Hours of work In terminating the employment of an Ee by enforcing the
5. Family planning union security clause, the Er needs only to determine
6. Rates of pay and prove that:
7. Mutual observance clause
8. No Strike-No Lockout Clause 1. The union security clause is applicable;
9. Labor-Management Council 2. The union is requesting for the enforcement of the
10. Drug-free provision union security provision in the CBA; and
3. There is sufficient evidence to support the decision
A grievance may be brought directly to voluntary of the union to expel the Ee from the union.
arbitration without passing the grievance machinery as
it has been proven to be ineffective in the past or the UNFAIR LABOR PRACTICE (ULP)
parties inadvertently failed to include grievance
machinery in the CBA. ULP is not only an administrative or civil but also a
criminal act. But the criminal aspect of ULP can be filed
NOTE: In addition, the BLR requires that the CBA should only provided there was already a final verict by the
include a clear statement of the term of the CBA. Er’s Labor Arbiter on the administrative or civil aspect.
duty to bargain is limited to mandatory bargaining
subjects; as to other matters, he is free to bargain or not. Employer-employee relationship should exist in ULP.

UNION SECURITY Acts considered as Unfair Labor Practice (ULP)

Union security The act complained of must have a proximate and causal
connection with:
Union security is a generic term, which is applied to and
comprehends “closed shop,” “union shop,” 1. Exercise of the Right to Self-organization
“maintenance of membership,” or any other form of 2. Exercise of the Right to CB
agreement which imposes upon Ees the obligation to
acquire or retain union membership as a condition ULP OF EMPLOYERS
affecting employment.
Unfair labor practice committed by employers
Union security clause
1. Interference, restraint, coercion
A stipulation in CBA whereby the management 2. Yellow dog condition
recognizes that the memberships of Ees in the union 3. Contracting out of services
which negotiated said agreement should be maintained 4. Company unionism or captive unionism
and continued as a condition for employment or 5. Discrimination for or against union membership
retention of employment. The obvious purpose is to 6. Discrimination because of testimony
safeguard and ensure the continued existence of the 7. Violation of duty to bargain
union. 8. Payment by the Er of negotiation fees
9. Gross violation of CBA
Closed shop
NOTE: Whether the employee or employer alleges that
A closed shop may be defined as an enterprise in which, the other party committed ULP, it is the burden of the
by agreement between the Er and his Ees or their alleging party to prove such allegation with substantial
representatives, no person may be employed in any or evidence. Such principle finds justification in the fact
certain agreed departments of the enterprise unless he that ULP is punishable with both civil and/or criminal
or she is, becomes, and, for the duration of the sanctions. (USTFU v. UST et al. G.R. No. 180892, April 7,
agreement, remains a member in good standing of a 2009, Velasco, Jr., J.)
union entirely comprised of or of which the Ees in
interest are a part. 1st ULP: Interference
It is the act of Er to interfere with, restrain or coerce Ees
Union shop in the exercise of their right to self-organization.

There is union shop when all new regular Ees are
required to join the union within a certain period as a
condition for their continued employment.
Maintenance of membership shop
There is maintenance of membership shop when Ees,
who are union members as of the effective date of the
agreement, or who thereafter become members, must
maintain union membership as a condition for
Test of interference
Whether the Er has engaged in conduct which, it may
reasonably be said, tends to interfere with the free
exercise of the Ees right to self-organization.
Totality of Conduct Doctrine
Under this doctrine, expressions of opinion by an Er,
though innocent in themselves, frequently were held to
be culpable because of:

44
 UST LAW PRE-WEEK NOTES 2017
1. The circumstances under which they were uttered
2. The history of the particular Er’s labor relations or
anti-union bias
3. Their connection with an established collateral plan
of coercion or interference (The Insular Life
Assurance-NATU v. The Insular Life Co. Ltd, G.R. No.L-
25291, January 30, 1971).
2nd ULP: Yellow dog condition
It is to require as a condition of employment that a
person or an Ee shall not join a labor organization or
shall withdraw from one to which he belongs. Yellow
dog contracts are null and void.
3rd ULP: “Contracting out” as a form of ULP
It is to contract out services or functions being
performed by union members when such act will
interfere with, restrain or coerce Ees in the exercise of
their rights to self-organization.
Contracting out services
GR: Contracting out services by the ER is not ULP per se.
XPNs: The following are prohibited for being contrary to
law or public policy:
A. Contracting out of jobs, works or services when not
done in good faith and not justified by the exigencies of
the business such as the following:
1. Contracting out of jobs, works or services when the
same results in the termination or reduction of
regular employees and reduction of work hours or
reduction or splitting of the bargaining unit.
2. Contracting out of work with a “Cabo”.
3. Taking undue advantage of the economic situation
or lack of bargaining strength of the contractor’s
employees, or undermining their security of tenure
or basic rights, or circumventing the provisions of
regular employment, in any of the following
instances:
a. Requiring them to perform functions which
are currently being performed by the regular
employees of the principal; and
b. Requiring them to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank payroll; a
waiver of labor standards including minimum
wages and social or welfare benefits; or a
quitclaim releasing the principal, contractor or
from any liability as to payment of future
claims.
4. Contracting out of a job, work or service through an
in-house agency.
5. Contracting out of a job, work or service that is
necessary or desirable or directly related to the
business or operation of the principal by reason of a
strike or lockout whether actual or imminent.
6. Contracting out of a job, work or service being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their rights to self-organization as
provided in Art. 248 (c) of the LC, as amended.
7. Repeated hiring of employees under an
employment contract of short duration or under a
Service Agreement of short duration with the same
45
or different contractors, which circumvents the
Labor Code provisions on Security of Tenure.
8. Requiring employees under a subcontracting
arrangement to sign a contract fixing the period of
employment to a term shorter than the term of the
Service Agreement, unless the contract is divisible
into phases for which substantially different skills
are required and this is made known to the
employee at the time of engagement.
9. Refusal to provide a copy of the Service Agreement
and the employment contracts between the
contractor and the employees deployed to work in
the bargaining unit of the principal’s certified
bargaining agent to the sole and exclusive
bargaining agent (SEBA).
10. Engaging or maintaining by the principal of
subcontracted employees in excess of those
provided for in the applicable Collective Bargaining
Agreement (CBA) or as set by the Industry
Tripartite Council (ITC).
B. Contracting out of jobs, works or services analogous
to the above when not done in good faith and not
justified by the exigencies of the business. (D.O. 18-A, Sec.
7)
When Er’s contracting out is not ULP:
For business reasons such as decline in business, the
inadequacy of his equipment, or the need to reduce cost,
even if the Er’s estimate of his cost is based on a
projected increase attributable to unionization.
Run-away shop
It is an industrial plant moved by its owners from one
location to another to escape labor regulations or State
laws, but the term is also used to describe a plant
removed to a new location in order to discriminate
against employees at the old plant because of their union
activities. (Complex Electronics Employees Association v.
NLRC, G.R. No. 121315, July 19, 1999). Resorting to run-
away shop is ULP
4th ULP: Company-domination of union
Labor organization in which, in whole or in part, is Er-
controlled or Er-dominated. This is to initiate, dominate,
assist or otherwise interfere with the formation or
administration of any labor organization including
giving of financial or other support to it or its organizers
or supporters.
5th ULP: Discrimination as a form of ULP
It is to discriminate in regard to wages, hours of work
and other terms and conditions of employment in order
to encourage or discourage membership in any labor
organization.
Discrimination occurs when a union member, involved
in union activity, is treated differently from a non-union
worker.
Valid Discrimination: Union Security Clause
There is a form of encouragement of union membership
which is not considered ULP. This is where the
Management and Union enter into a CBA containing a
union security clause, which essentially requires
membership in the union so that an employee may
 LABOR LAW AND SOCIAL LEGISLATION
retain his job and the union’s existence is assured. In a
sense, there is discrimination when certain employees
are obliged to join a particular union. However, it is
discrimination favoring unionism, thus it is valid.
Q: Is notice and hearing required in case an
employee is dismissed pursuant to a union security
clause?
A: YES. Although a union security clause in a CBA may
be validly enforced and dismissal pursuant thereto may
likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the
enforcement of union security clauses which is the
sanctity and inviolability of contracts cannot erode one’s
right to due process.
6th ULP: Discrimination because of testimony
Er’s reprisal against a testifying Ee is ULP because,
furthermore, it violates the right to engage in concerted
activity, a right included in the right to self-organize.
7th ULP: Violation of the Duty to Bargain
When the act constitutes violation of the duty to bargain
collectively as prescribed in the LC it is considered ULP
in bargaining.
Surface bargaining – delaying the bargaining process by
the employer as it has no intention of signing a CBA with
the union.
Boulwarism – Delaying the submission by the employer
of its counter-proposal or submitting the proposal on a
take it or leave it bargaining.
8th ULP: Paid negotiation
It is the act of the Er to pay negotiation or attorney’s fees
to the union or its officers or agents as part of the
settlement of any issue in CB or any other dispute. It is
also prohibited for union officers or agents from asking
for or accepting such payments.
9th ULP: Violation of the CBA
Only when the violation is gross – There must be a
flagrant and/or malicious refusal to comply with the
economic provision of the CBA.
Reliefs available in ULP cases
1. Civil liability. NOTE: Recovery of civil liability in the
administrative proceedings shall bar recovery
under the Civil Code (LC, Art. 247).
2. Criminal liability. NOTE: No criminal prosecution
under this Title may be instituted without a final
judgment finding that a ULP was committed (LC, Art.
247).
3. Cease and desist order.
4. Affirmative order
5. Court may order the Er to bargain
6. CBA may be imposed upon an Er who refused to
bargain with the union of its Ees
7. Strike by union members
Q: Is the commission of an ULP by an employer
subject to criminal prosecution? (2005 Bar
Question)
46
A: YES. ULPs are not only violations of the civil rights of
both labor and management but are also criminal
offenses against the State which shall be subject to
prosecution and punishment (LC, Art.247; See also
B.P.Blg.386 as amended by R.A. 6715). However, the
criminal aspect can only be filed when the decision of
the labor tribunals, finding the existence of ULP, shall
have become final and executory.
ULP OF LABOR ORGANIZATIONS
It shall be ULP for labor organizations, its officers, agents
or representatives:
1. To restrain or coerce Ees in the exercise of their
rights to self-organization. However, a labor
organization shall have the right to prescribe its
own rules with respect to the acquisition or
retention of membership
2. To cause or attempt to cause an Er to discriminate
against an Ee, including discrimination against an
Ee with respect to whom membership in such
organization has been denied or to terminate an Ee
on any ground other than the usual terms and
conditions under which membership or
continuation of membership is made available to
other members
3. To violate the duty, or refuse to bargain collectively
with the Er, provided it is the representative of the
Ees
4. To cause or attempt to cause an Er to pay or deliver
or agree to pay or deliver any money or other things
of value, in the nature of an exaction, for services
which are not performed or not to be performed,
including the demand for fee for union negotiations
5. To ask for or accept negotiations or attorney's fees
from Ers as part of the settlement of any issue in
Collective Bargaining or any other dispute or
6. To violate a CBA (LC, Art. 248)
Blue-sky bargaining – Union submitting CBA proposal
containing economic demands that are ureasonable or
exaggerated.
Featherbedding activities – extortion of money ad things
for value for services rendered or unperformed by the
union.
Aspects of ULP
1. Civil aspect. LA together with claim for damages
arising from termination (ex: reinstatement)
2. Criminal aspect. Regular courts. Commenced only
upon final decision by LA that party commits ULP.
No simultaneous filing is allowed. There must be a final
decision first by the Labor Arbiter.
BOYCOTT
It is an attempt, by arousing a fear of loss, to coerce
others, against their will to withhold from one
denominated “unfriendly to labor” their beneficial
business intercourse. Boycott may be lawful or unlawful
depending on the means and methods employed, and
the ends intended to be accomplished.
Slowdown
It is a method by which one’s Ees, without seeking a
complete stoppage of work, retard production and
 UST LAW PRE-WEEK NOTES 2017
distribution in an effort to compel compliance by the Er
with the labor demands made upon him.
The following may declare a strike or lockout:
STRIKE
1.
It means any temporary stoppage of work by the
concerted action of Ees as a result of an industrial or
labor dispute [IRR, Book V, Rule I, Sec. 1(uu)].
2.
The term strike shall comprise not only concerted work
stoppages, but also slowdowns, mass leaves, sit-downs,
attempts to damage, destroy or sabotage plant
equipment and facilities and similar activities.
WHO MAY DECLARE A STRIKE OR LOCKOUT
Any certified or duly recognized bargaining
representative may declare a strike in cases of
bargaining deadlocks and ULP. The Er may declare
a lockout in the same cases.
In the absence of a certified or duly recognized
bargaining representative, any LLO in the
establishment may declare a strike but only on
grounds of ULP. [IRR as amended by D.O. 40-03, Book
V, Rule XXII, Sec. 6]

Different forms of strike Grounds for declaration of strike or lockout

1. Legal Strike– One called for a valid purpose and 1. Collective Bargaining Deadlock – economic
conducted through means allowed by law. 2. ULP act – political
2. Illegal Strike– One staged for a purpose not Conversion Doctrine
recognized by law, or if for a valid purpose,
conducted through means not sanctioned by law. It is when a strike starts as economic and later, as it
3. Economic Strike– One staged by workers to force progresses, it becomes a ULP, or vice versa.
wage or other economic concessions from the
employer which he is not required by law to grant Economic strike v. ULP strike
(Consolidated Labor Association of the Phil. vs.
Marsman, G.R. No. L-17038, July 31, 1964). ECONOMIC
BASIS ULP STRIKE
4. ULP Strike– One called to protest against the STRIKE
employer’s acts of unfair practice enumerated in Involuntary strike; the
Voluntary
Art. 248 of the LC, as amended, including gross LO is forced to go on
strike
violation of the CBA and union busting. strike because of the
because the
5. Slow Down Strike– One staged without the ULP committed
employee will
workers quitting their work but by merely against them by the
As to declare a
slackening or by reducing their normal work output. Er. It is an act of self-
nature strike to
6. Wild-Cat Strike – One declared and staged without defense since the Ees
compel
filing the required notice of strike and without the are being pushed to
management
majority approval of the total union membership. the wall and their only
to grant its
7. Sit Down Strike – One where the workers stop remedy is to stage a
demands
working but do not leave their place of work. strike.
The CB agent
LOCKOUT of the
appropriate
Either the CB agent or
It means any temporary refusal of an Er to furnish work Who will bargaining
the LLO in behalf of its
as a result of an industrial or labor dispute [LC, Art. 212 initiate unit can
members
(p)]. It is an Er’s act excluding Ees who are union declare an
members from the plant. economic
strike
Right to strike or lockout not absolute 30 days from
notice of
The exercise of these rights is subject to reasonable As to the strike before
restrictions pursuant to the police power of the State. cooling- the intended 15 days from the filing
off date of actual of the notice of strike
Instances where a strike or lockout cannot be period strike subject
declared to the 7-day
strike ban
1. Violations of CBAs, except flagrant and/or malicious The cooling-off period
refusal to comply with economic provisions. may be dispensed
2. Inter-union disputes No exception with, and the union
3. Intra-union disputes – mandatory may take immediate
4. Failure to file a notice of strike or lockout or without action in case of
As to the
necessary strike or lockout vote obtained and NOTE: Notice dismissal from
exception
reported to the Board. of strike and employment of their
to the
5. After assumption of jurisdiction by the Secretary strike vote officers duly elected in
cooling-
has been declared may be accordance with the
off
6. After certification or submission of the dispute to dispensed union’s constitution
period
compulsory or voluntary arbitration with; they and by-laws, which
7. There is already a pending case involving the same may strike may constitute union
grounds for the strike or lockout. immediately busting where the
8. Labor standards cases such as wage orders (IRR, as existence of the union
amended by D.O. 40-03, Book V, Rule XXII, Sec. 5). is threatened. It must

47
 LABOR LAW AND SOCIAL LEGISLATION
still observe the
mandatory 7-day
strike ban period
before it can stage a
valid strike
REQUISITES FOR A VALID STRIKE
AND VALID LOCKOUT
Requisites of a lawful strike / lockout
1. It must be based on a valid and factual ground;
2. A strike or lockout notice shall be filed with the
NCMB at least 15 days before the intended date of
the strike or lockout if the issues raised are unfair
labor practices, or at least 30 days before the
intended date thereof if the issue involves
bargaining deadlock.
3. In cases of dismissal from employment of union
officers duly elected in accordance with the union
constitution and by-laws, which may constitute
union busting where the existence of the union is
threatened, the 15-day cooling-off period shall not
apply and the union may take action immediately
after the strike vote is conducted and the result
thereof submitted to the DOLE.
4. Notice of conduct of strike vote 24 hours before the
intended strike vote is filed with the DOLE
(compliance with the 24-hour prior notice rule).
5. A strike must be approved by a majority vote of
the members of the union and a lockout must be
approved by a majority vote of the members of the
Board of Directors of the Corporation or Association
or of the partners in a partnership, obtained by
secret ballot in a meeting called for that purpose.
6. A strike or lockout vote shall be reported to the
NCMB-DOLE Regional Branch at least 7 days before
the intended strike or lockout subject to the cooling-
off period.
7. In the event the result of the strike/lockout ballot is
filed within the cooling-off period, the 7-day
requirement shall be counted from the day
following the expiration of the cooling-off
period (NSFW vs. Ovejera, G.R. No. 59743, May 31,
1982).
8. The dispute must not be the subject of an
assumption of jurisdiction by the President or the
SLE, a certification for compulsory arbitration, or
submission to compulsory or voluntary arbitration
or a subject of a pending case involving the same
grounds for the strike or lockout.
Cooling-off period
It is the period of time given by the NCMB to mediate and
conciliate the parties. It is the span of time allotted by
law for parties to settle their disputes in a peaceful
manner before staging a strike or lockout. The principles
of improved offer and reduced offer balloting apply
during the cooling-off period.
Preventive mediation case
It involves labor disputes which are the subject of a
formal or informal request for conciliation and
mediation assistance sought by either or both parties or
upon the initiative of the NCMB. [IRR, Book V, Rule I, Sec.
1 (mm)]
48
Tests in determining the legality of strike
The following must concur:
1. Purpose test – The strike must be due to either
bargaining deadlock and/or the ULP
2. Compliance with the procedural and substantive
requirements of the law. (See requisites of a valid
strike)
3. Means employed test – It states that a strike may
be legal at its inception but eventually be declared
illegal if the strike is accompanied by violence which
is widespread, pervasive and adopted as a matter of
policy and not mere violence which is sporadic and
which normally occurs in a strike area.
Enjoinment of strike
GR: No strikes arising from a labor dispute may be
enjoined.
XPNs:
1. Assumption order by SLE [LC, Art. 263(g)].
2. Enjoining or restraining any actual or threatened
commission of any unlawful act in any labor dispute
[LC, Art. 218(e)].
Bersamin Cases:
Q: Union officers of the Malayang Samahan ng mga
Manggagawa sa Balanced Foods, together with some
200 members, walked out of the Pinakamasarap
Corp.’s premises and proceeded to the barangay hall
to show support for Juanito, another union officer
who was charged with oral defamation by the
company’s personnel manager. The erring union
officers were preventively suspended and
terminated them after a month. The LA ruled that
the incident was an illegal walkout constituting ULP
and that all union officers had thereby lost their
employment. The NLRC sustained that there was an
illegal strike, however, it ruled that there was no
abandonment from work made by the union officers
and ordered their reinstatement without award of
backwages. Are the employees entitled to full
backwages from the time of the strike until their
reinstatement?
A: NO. The employees are not entitled to backwages
despite their reinstatement by virtue of the doctrine, “a
fair day’s wage for a fair day’s labor.” That backwages
are not granted to employees participating in an illegal
strike simply accords with the reality that they do not
render work for the employer during the period of the
illegal strike. If there is no work performed by the
employee there can be no wage or pay unless, of course,
the laborer was able, willing and ready to work but was
illegally locked out, suspended or dismissed or
otherwise illegally prevented from working. (Escario v.
NLRC, et. al, G.R. No. 160302, 27 September 2010)
Q: On January 18, 1993, HSBC announced its
implementation of a job evaluation program (JEP)
which was opposed by the HSBCEU (the Union), the
duly recognized collective bargaining agent of the
rank-and-file employees of HSBC, and demanded the
suspension of the JEP as it was allegedly an unfair
labor practice. The Union conducted a strike vote on
December 19, 1993 after HSBC accorded regular
status to the first person hired under the JEP. The
 UST LAW PRE-WEEK NOTES 2017
majority of the members of the Union voted in favor
of a strike. The following day, the Union served its
letter on HSBC in protest of the continued
implementation of the JEP, and insisted that HSBC's
modification of the salary structure under the JEP
constituted ULP. On December 22, 1993, at around
12:30 p.m., the Union's officers and members
walked out and gathered outside the premises of
HSBC's offices on Ayala Avenue, Makati and Ortigas
Center, Pasig. According to HSBC, the Union
members blocked the entry and exit points of the
bank premises, preventing the bank officers,
including the chief executive officer, from entering
and/or leaving the premises. On the same day, HSBC
filed its complaint to declare the strike illegal. In the
meantime, HSBC issued return-to-work notices to
the striking employees. Only 25 employees
complied and returned to work. Due to the
continuing concerted actions, HSBC terminated the
individual petitioners. The latter, undeterred, and
angered by their separation from work, continued
their concerted activities.
a) Was the strike legal and justified by invoking the
constitutional right of labor to concerted
actions?
b) Was the strike legal and justified by invoking
good faith?
c) Did the finding of illegal strike justify the
wholesale termination of the strikers from
employment?
d) Was there an illegal dismissal due to non-
compliance with due process?
A: a) NO. The Union could not justify their illegal strike
by invoking the constitutional right of labor to concerted
actions. Although the Constitution recognized and
promoted their right to strike, they should still exercise
the right within the bounds of law. The employment of
prohibited means in carrying out concerted actions
injurious to the right to property of others could only
render their strike illegal. Moreover, their strike was
rendered unlawful because their picketing which
constituted an obstruction to the free use of the
employer's property or the comfortable enjoyment of
life or property, when accompanied by intimidation,
threats, violence, and coercion as to constitute nuisance,
should be regulated. In fine, the strike, even if justified
as to its ends, could become illegal because of the means
employed, especially when the means came within the
prohibitions under Article 264(e) of the Labor Code.
b) NO. The Union's disregard of the procedural
requirements for conducting a valid strike negated their
claim of good faith. For their claim to be upheld, it was
not enough for them to believe that their employer was
guilty of ULP, for they must also sufficiently show that
the strike was undertaken with a modicum of obeisance
to the restrictions on their exercise of the right to strike
prior to and during its execution as prescribed by the
law. They did not establish their compliance with the
requirements specifically for the holding of the strike
vote and the giving of the strike notice.
c) NO. As a general rule, the mere finding of the illegality
of the strike does not justify the wholesale termination
of the strikers from their employment. To avoid
rendering the recognition of the workers' right to strike
illusory, the responsibility for the illegal strike is
individual instead of collective.The last paragraph of
Article 264(a) of the Labor Code defines the norm for
49
terminating the workers participating in an illegal
strike. Conformably with Article 264, we need to
distinguish between the officers and the members of the
union who participate in an illegal strike. The officers
may be deemed terminated from their employment
upon a finding of their knowing participation in the
illegal strike, but the members of the union shall suffer
the same fate only if they are shown to have knowingly
participated in the commission of illegal acts during the
strike. Article 264 expressly requires that the officer
must have knowingly participated in the illegal strike.
Thus, the termination of the employment of the 18
members of the Union was illegal for failure of HSBC to
prove that they had committed illegal acts during the
strike.
d) YES. The failure by HSBC to strictly observe the twin-
notice requirement resulted in the illegal dismissal.
However, the extent of its liability should depend on the
distinct circumstances of the employees. HSBC should
be held liable for two types of illegal dismissal — the
first type was made without both substantive and
procedural due process, while the other was based on a
valid cause but lacked compliance with procedural due
process. To the first type belonged the dismissal of the
18 employees initially identified by the NLRC, while the
second type included the rest of the petitioners. (HSBC
Employees Union, et al., v. NLRC, G.R. No. 156635, January
11, 2016)
PICKETING
Requisites of lawful picketing:
1. It should be peacefully carried out;
2. There should be no act of violence, coercion or
intimidation;
3. The ingress to (entrance) or egress from (exit) the
company premises should not be obstructed;
4. Public thoroughfares should not be impeded.
ASSUMPTION OF JURISDICTION BY THE SECRETARY
OF LABOR OR CERTIFICATION OF THE LABOR
DISPUTE TO THE NLRC FOR COMPULSORY
ARBITRATION
The SLE may assume jurisdiction over a labor dispute,
or certify it to the NLRC for compulsory arbitration, if, in
his opinion, it may cause or likely to cause a strike or
lockout in an industry indispensable to the national
interest. The President may also exercise the power to
assume jurisdiction over a labor dispute.
Effect of such assumption or certification of labor
dispute to the NLRC
a. on intended or impending strike or lockout–
automatically enjoined even if a Motion for
Reconsideration is filed;
b. on actual strike or lockout – strikers or locked out
Ees should immediately return to work and Er
should readmit them; and
c. on cases filed or may be filed – all shall be
subsumed/absorbed by the assumed or certified
case except when the order specified otherwise. The
parties to the case should inform the SLE of
pendency thereof.
Meaning of the phrase “under the same terms and
conditions”
 LABOR LAW AND SOCIAL LEGISLATION
GR: It contemplates actual reinstatement and not just
payroll reinstatement. This is in keeping with the
rationale that any work stoppage or slowdown in that
particular industry can be inimical to the national
economy.
XPN: Payroll reinstatement in lieu of actual
reinstatement but there must be showing of special
circumstances rendering actual reinstatement
impracticable, or otherwise not conducive to attaining
the purpose of the law in providing for assumption of
jurisdiction by the SLE in a labor dispute that affects the
national interest (Manila Diamond Hotel Ees Union v.
SLE, G.R. No. 140518, December 16, 2004).
the Labor Code, no strike or lockout shall be declared
after the assumption of jurisdiction by the Secretary.
Assumption and certification orders are executory in
character and are to be strictly complied with by the
parties even during the pendency of any petition
questioning their validity (Baguio Colleges Foundation v.
NLRC, 222 SCRA 604).
ILLEGAL STRIKE
Illegal Strike
A strike is illegal where:

Issues that the SLE may resolve when he assumes 1. It is contrary to specific prohibition of law, such as
jurisdiction over a labor dispute strike by Ees performing governmental functions;
2. Violates a specific requirement of law;
1. Issues submitted to the SLE for resolution and such 3. Declared for an unlawful purpose, such as inducing
issues involved in the labor dispute itself (St. the Er to commit ULP against non-union Ees;
Scholastica’s College v. Torres, G.R. No. 100158, June 4. Employs unlawful means in the pursuit of its
2, 1992). objective, such as widespread terrorism of non-
strikers;
2. SLE may subsume pending labor cases before LAs 5. Declared in violation of an existing injunction;
which are involved in the dispute and decide even 6. Contrary to an existing agreement, such as a no
issues falling under the exclusive and original strike clause or conclusive arbitration clause
jurisdiction of LAs such as the declaration of legality
or illegality of strike (Int’l. Pharmaceuticals v. SLE, It must be stressed, however, that with the enactment of
G.R. Nos. 92981-83, January 9, 1992). R.A. 6715 which took effect on March 21, 1989, the rule
now is that such requirements as the filing of a notice of
NOTE: The decision of the President or SLE is final and strike, strike vote, and notice given to the DOLE are
executory after receipt thereof by the parties. mandatory in nature. Thus, even if the union acted in
good faith in the belief that the company was committing
EFFECT OF DEFIANCE OF ASSUMPTION OR an unfair labor practice, if no notice of strike and a strike
CERTIFICATION ORDER vote were conducted, the said strike is illegal. Claim of
Good faith is not a valid excuse (defense) to dispense
The defiance by the union, its officers and members of with the procedural steps for a lawful strike (Grand
the SLE’s assumption of jurisdiction or certification Boulevard Hotel v. Dacanay, G.R. No. 153665, 18 July
order constitutes a valid ground for dismissal [LC, Art. 2003; Poquiz, Vol. II).
263(g)].
LIABILITY OF UNION OFFICERS v. LIABILITY OF
NOTE: The SLE may cite the defiant party in contempt ORDINARY WORKERS
pursuant to the power vested in him under the
provisions of the LC. Basis Union Ordinary worker
Officer
Q: In a labor dispute, the Secretary of Labor issued May be Cannot be
an "Assumption Order". Give the legal implications declared to terminated
of such an order. (2003 BAR) have lost his
employment NOTE: The LC
A: Under Art. 263(g) of the Labor Code, such assumption status protects ordinary,
shall have the effect of automatically enjoining the Knowingly rank-and-file
intended or impending strike or lockout as specified in participating union members
the assumption order. If one had already taken place at in an illegal who participated
the time of assumption, all striking or lockout employees strike in such a strike
shall immediately return to work and the employer shall from losing their
immediately resume operations and re-admit all jobs provided that
workers under the same terms and conditions they did not
prevailing before the strike or lockout. commit illegal acts
during the strike.
The Secretary of Labor and Employment may seek the Knowingly May be
May be terminated
assistance of law enforcement agencies to ensure participating terminated
compliance with this provision as well as with such in the
orders as he may issue to enforce the same. commission of
illegal acts
The mere issuance of an assumption order by the during strike
Secretary of Labor automatically carries with it a return- (Samahang Manggagawa Sa Sulpicio Lines, Inc.–Naflu et
to-work order, even if the directive to return to work is al. v. Sulpicio Lines, Inc., G.R. No. 140992, March 25, 2004).
not expressly stated in the assumption order. Those who
violate the foregoing shall be subject to disciplinary Rule on reinstatement of striking workers
action or even criminal prosecution. Under Art. 264 of

50
 UST LAW PRE-WEEK NOTES 2017
Striking Ees are entitled to reinstatement, regardless of LABOR ARBITER
whether or not the strike was the consequence of the
Er’s ULP because while out on strike, the strikers are not Jurisdiction of LA v. Jurisdiction of NLRC
considered to have abandoned their employment, but
rather have only ceased from their labor; the declaration 1. The NLRC has exclusive appellate jurisdiction on all
of a strike is not a renunciation of employment relation. cases decided by the LA.
2. The NLRC does not have original jurisdiction on the
Persons not entitled to reinstatement cases over which the LA have original and exclusive
jurisdiction.
1. Union officers who knowingly participate in the 3. The NLRC cannot have appellate jurisdiction if a
illegal strike claim does not fall within the exclusive original
2. Any striker or union who knowingly participates in jurisdiction of the LA.
the commission of illegal acts during the strike
Jurisdiction of LA v. Jurisdiction Regional Director
Employees who abandoned a legal strike but were
refused reinstatement can be awarded backwages LABOR ARBITER REGIONAL DIRECTOR
Original and exclusive Adjudication of Ee’s
Provided the following requisites are present: jurisdiction over the ff: claims for wages and
a. ULP benefits
1. The strike was legal
b. Termination disputes
2. There was an unconditional offer to return to work
c. Wages
as when the strikers manifested their willingness to
d. Rates of pay
abide by the CIR back-to-work order and even
sought the aid of competent authorities to effect e. Hours of work
their return f. Other terms of
3. The strikers were refused reinstatement such as employment, claims
when they have not been re-admitted to their for damages arising
former position (Philippine Marine Officers' Guild v. from Er-Ee
Compañia Maritima et al., G.R. Nos. L-20662 and L- relationship, legality
20662, March 27, 1971). of strikes and
lockouts, and
LIABILITY OF EMPLOYER g. All other claims
arising from Er-Ee
Entitlement of strikers to their backwages or strike relationship
duration pay involving an amount
exceeding Php
GR: Strikers are not entitled to their backwages or strike 5,000.00
duration pay even if such strike was legal. All other claims arising Limited to monetary
from Er-Ee relations claims
XPN: LA decides case within 30 Initiated by sworn
calendar days after complaints filed by any
1. Where the strikers voluntarily and unconditionally submission of the case by interested party
offered to return to work, but the Er refused to the parties for decision
accept the offer – Ers are entitled to backwages from All other claims arising Jurisdictional
the date their offer was made from Er-Ee relations requirements:
2. When there is a return-to-work order and the Ees including those of a. Complaint arises
are discriminated against other Ees, workers are persons in domestic or from Er-Ee
entitled to backwages from the date of household service, relationship
discrimination involving an amount b. Claimant is an Ee or
3. In case of a ULP strike, in the discretion of the exceeding P5,000, person employed in
authority deciding the case whether or not domestic or
4. When the Ees were illegally locked out and thus accompanied with a claim household service
compel them to stage a strike. for reinstatement or a HH
c. Complaint does NOT
REQUISITES FOR LABOR INJUNCTIONS include a claim for
reinstatement
GR: No temporary or permanent injunction or d. Aggregate money
restraining order in any case involving or growing out of claim of EACH
labor disputes shall be issued by any court (LC, Art. 254). claimant does NOT
exceed P5,000
XPNs: Appealable to NLRC Appealable to NLRC

1. Injunction power of the NLRC (LC, Art. 218) While a formal trial or hearing is discretionary on the
2. Prohibited activities during a strike or lockout (LC, part of the Labor Arbiter, when there are factual issues
Art. 264) that require a formal presentation of evidence in a
3. Assumption or certification power of the SLE in hearing, the Labor Arbiter cannot simply rely on the
national interest cases [LC, Art. 263(g)] position papers, more so, on mere unsubstantiated
claims of parties. (St. Martin Funeral Homes V. National
PROCEDURE AND JURISDICTION Labor Relations Commission, And Bienvenido Aricayos
G.R. No. 142351, November 22, 2006, Velasco, Jr. J.)

51
 LABOR LAW AND SOCIAL LEGISLATION
Bersamin Cases:
Q: Due to his dismissal as Vice-President for Finance
and Administration, Ricardo filed a complaint for
illegal suspension and dismissal against Matling
Corp. with the NLRC. Matling Corp. moved to dismiss
the complaint contending that NLRC has no
jurisdiction since the issue is an intra-corporate
dispute and that Matling’s President created such
position held by Ricardo. Does the LA have
jurisdiction over Coro’s illegal dismissal case?
A: YES. Rocardo was an employee, not a corporate
officer. The Board of Directors of Matling could not
validly delegate the power to create a corporate office to
the President, in light of Section 25 of the Corporation
Code requiring the Board of Directors itself to elect the
corporate officers. The office of Vice President for
Finance and Administration, as created by Matling’s
President pursuant to “By Law No. V,” was an ordinary,
not a corporate, office. The criteria for distinguishing
between corporate officers who may be ousted from
office at will, on one hand, and ordinary corporate
employees who may only be terminated for just cause,
on the other hand, do not depend on the nature of the
services performed, but on the manner of creation of the
office. (Matling Industrial and Commercial Corp., et. al v.
Coros, G.R. No. 157802, 13 October 2010)
Q: In 1993, MT Seadance docked at the port of
Brofjorden, Sweden to discharge oil.
Representatives of the International Transport
Federation boarded the vessel and found that the
wages of the crewmembers to be below the
prevailing rates. After ensuing negotiations,
Eastern, Ltd., owner of MT Seadance, and Agemar,
Inc. (manning agency) ended up paying the wage
differentials and immediately repatriated the
crewmembers to the Philippines. Subsequently,
Eastern, Ltd. and Agemar, Inc. filed a complaint for
disciplinary action based on breach of discipline and
for the reimbursement of the wage against the
repatriated crewmembers before the POEA, which
dismissed the complaint pursuant to RA 8042 that
vested the the original and exclusive jurisdiction to
hear and decide money claims involving Filipino
overseas workers to the LAs. Eastern, Ltd. and
Agemar, Inc. appealed before the NLRC, which
denied such appeal for lack of jurisdiction. Does the
NLRC have jurisdiction to review appeal cases
decided by POEA on matters pertaining to
disciplinary actions?
A: NO. NLRC had no appellate jurisdiction to review the
decision of POEA in disciplinary cases involving
overseas contract workers. Although RA 8042
transferred the original and exclusive jurisdiction to
hear and decide money claims involving overseas
Filipino workers from the POEA to the LAs, the law did
not remove from the POEA the original and exclusive
jurisdiction to hear and decide all disciplinary action
cases and other special cases administrative in character
involving such workers. The obvious intent of the law
was to have POEA focus its efforts in resolving all
administrative matters affecting and involving such
workers. (Eastern Meditteranean Maritime, Ltd. and
Agemar Manning Agency, Inc. v. Surio, et.al, G.R. No.
154213, 23 August 2012)
Q: Sim worked as the Italian Remittance Marketing
Consultant to the Frankfurt Representative Office of
52
REM Bank since 1990. In 1999, she was informed
that she was being dismissed due to loss of trust and
confidence for Sim’s mismanagement and
misappropriation of funds. Sim filed a complaint for
illegal dismissal, while REM Bank denied that there
exists an employer-employee relationship between
them. The LA dismissed the petition for want of
jurisdiction, which the NLRC affirmed. Were the LA
and the NLRC correct?
A: NO. It was wrong for the Labor Arbiter to rule that
"labor relations system in the Philippines has no extra-
territorial jurisdiction." Article 217 of the Labor Code
provides for the jurisdiction of the Labor Arbiter and the
National Labor Relations Commission. Moreover,
Section 10 of Republic Act (R.A.) No. 8042, or the
Migrant Workers and Overseas Filipinos Act of 1995,
provides that “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 damages. Also, Section 62
of the Omnibus Rules and Regulations Implementing
R.A. No. 8042 provides that the Labor Arbiters of the
NLRC shall have the original and exclusive jurisdiction
to hear and decide all claims arising out of 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 damages, subject to the
rules and procedures of the NLRC. Under these
provisions, it is clear that labor arbiters have original
and exclusive jurisdiction over claims arising from
employer-employee relations, including termination
disputes involving all workers, among whom are
overseas Filipino workers. (SIM v. NLRC and EQUITABLE
PCI-BANK, G.R. No. 157376, 2 October 2007)
NATIONAL LABOR RELATIONS COMMISSION
It is an administrative body with quasi-judicial functions
and the principal government agency that hears and
decides labor-management disputes; it is attached to the
DOLE solely for program and policy coordination.
EXCLUSIVE ORIGINAL JURISDICTION
a. Certified labor disputes causing or likely to cause
a strike or lockout in an industry indispensable to
national interest, certified to it by the SLE or the
President for compulsory arbitration
b. Injunction in ordinary labor disputes to enjoin or
restrain any actual or threatened commission of
any or all prohibited or unlawful acts or to require
the performance of a particular act in any labor
dispute which, if not restrained or performed
forthwith, may cause grave or irreparable
damage to any party
c. Injunction in strikes or lockouts under Art. 264 of
the LC
d. Contempt cases
EXCLUSIVE APPELLATE JURISDICTION
a. All cases decided by the LA under Art. 217(b) of
the LC and Sec. 10 of R.A.8042 (Migrant Worker’s
Act); and
 UST LAW PRE-WEEK NOTES 2017
b. Cases decided by the Regional Offices of DOLE in 2. Collective bargaining registry and
the exercise of its adjudicatory function under 3. Labor education.
Art.129 of the LC over monetary claims of
workers amounting to NOT more than P5000 and Original and exclusive jurisdiction of BLR
NOT accompanied by claim for reinstatement.
The BLR has original and exclusive jurisdiction over:
EFFECT OF NLRC’s REVERSAL OF LABOR ARBITER’S
ORDER OF REINSTATEMENT 1. Inter-union disputes
2. Intra-union disputes
Dismissed Ees may collect wages during the period 3. Other related labor relations disputes
between the LA’s order of reinstatement pending
appeal and the NLRC decision overturning that of NATIONAL CONCILIATION AND MEDIATION BOARD
the LA (NCMB)

The LC provides that the decision of the LA reinstating a Alternative modes of settlement of labor dispute
dismissed or separated Ee, insofar as the reinstatement
aspect is concerned, shall be immediately executory, 1. Voluntary Arbitration
pending appeal. 2. Conciliation
3. Mediation
Even if the order of reinstatement of the LA is reversed
on appeal, it is obligatory on the part of the Er to Nature of the proceedings
reinstate and pay the wages of the dismissed Ee during
the period of appeal until reversal by the higher court. The proceedings are non-litigious.

On the other hand, if the Ee has been reinstated during
the appeal period and such reinstatement order is
reversed with finality, the Ee is not required to
reimburse whatever salary he received for he is entitled
to such, more so if he actually rendered services during
the period (Pfizer v. Velasco, G.R. No. 177467, March 9,
2011).
Availability of judicial review of the NLRC’s decision
All labor disputes are required to be submitted to
mandatory conciliation-mediation
GR: All issues arising from labor and employment shall
be subject to mandatory conciliation-mediation. The LA
or the appropriate DOLE agency or office that has
jurisdiction over the dispute shall entertain only
endorsed or referred cases by the duly authorized
officer [Art. 228 (a), as amended by R.A. 103960].

Judicial review of NLRC’s decision is available through XPNs:

petitions for certiorari (Rule 65) which should be
initially filed with the CA in strict observance of the 1. Grievance machinery and Voluntary Arbitration, in
doctrine on the hierarchy of courts. The CA is which case, their agreement will govern
procedurally equipped to resolve unclear or ambiguous 2. When excepted by the SLE (Ibid.)
factual finding, aside from the increased number of its
component divisions (St. Martin Funeral Home v. NLRC, NOTE: Any or both parties involved in the dispute may
G.R. No. 130866, September 16, 1998). pre-terminate the conciliation-mediation proceedings
and request referral or endorsement to the appropriate
Injunction or temporary restraining order (TRO) DOLE agency or office which has jurisdiction over the
The power of the NLRC to enjoin or restrain any actual dispute, or if both parties so agree, refer the unresolved
or threatened commission from any or all prohibited or issues to voluntary arbitration (Art. 228 (b), as amended
unlawful acts under Art. 218 of LC can only be exercised by R.A. 10396).
in labor disputes.
CONCILIATION v. MEDIATION
Certified cases
CONCILIATION MEDIATION
These are cases certified or referred to the Commission Conceived of as a mild Mild intervention by a
for compulsory arbitration under Art. 263(g) of the LC form of intervention by neutral third party
involving national interest cases. a neutral third party
The conciliator- The conciliator-
A national interest dispute may be certified to the NLRC Mediator, relying on mediator, whereby he
even before a strike is declared since Art. 263(g) of the his persuasive starts advising the
LC does not require the existence of a strike, but only of expertise, who takes parties or offering
an industrial dispute [Government Service Insurance an active role in solutions or
System Employees Association (GSISEA), et al. v. Court of assisting parties by alternatives to the
Industrial Relations, G.R. No. L-18734, December 30, trying to keep problems with the end
1961]. disputants talking, in view of assisting
facilitating other them towards
Coverage of the BLR’s jurisdiction and functions procedural niceties, voluntarily reaching
carrying messages their own mutually
The BLR no longer handles all labor management back and forth acceptable settlement
disputes; rather its functions and jurisdiction are largely between the parties, of the dispute
confined to: and generally being a
good fellow who tries
to keep things calm
1. Union matters

53
 LABOR LAW AND SOCIAL LEGISLATION
and forward-looking in 2. Issue writs of execution for the enforcement of their
a tense situation orders, except in cases where the Er contests the
It is the process where It is when a 3rd party findings of the labor officer and raise issues
a disinterested 3rd studies each side of the supported by documentary proof which were not
party meets with dispute then makes considered in the course of inspection
management and proposals for the 3. Order stoppage of work or suspension of operation
labor, at their request disputants to consider. when non-compliance with the law or
or otherwise, during a The mediator cannot implementing rules and regulations poses grave
labor dispute or in CB make an award nor and imminent danger to health and safety of
conferences, and by render a decision workers in the workplace
cooling tempers, aids 4. Require Ers to keep and maintain such employment
in reaching an records as may be necessary in aid to the visitorial
agreement and enforcement powers
5. Conduct hearings within 24 hours to determine
Preventive mediation case whether:
a. An order for stoppage of work or suspension of
Preventive mediation case refers to the potential operations shall be lifted or not; and
labor dispute which is the subject of a formal or b. Er shall pay the concerned Ees their salaries in
informal request for conciliation and mediation case the violation is attributable to his fault (As
assistance sought by either or both parties or upon the amended by RA 7730); (Guico v. Secretary, G.R.
initiative of the NCMB to avoid the occurrence of an No. 131750, November 16, 1998).
actual labor dispute.
SLE can assume jurisdiction over a labor dispute
DOLE REGIONAL DIRECTORS
When there is a labor dispute causing or likely to cause
Money claims falling under the jurisdiction of the a strike affecting national interest, the SLE, on his own
DOLE Regional Directors initiative or upon petition by any of the parties, may
either assume jurisdiction or certify the dispute to the
Under Art. 129 of the LC, the RDs or any of the duly NLRC for compulsory arbitration.
authorized hearing officers of DOLE have jurisdiction
over claims for recovery of wages, simple money claims Cases within the appellate jurisdiction of the SLE
and other benefits, provided that:
1. Appeal from and adverse decision of the POEA (Sec.
1. The claim must arise from Er-Ee relationship; 1, Part VII, Rule V, 2003 POEA Rules and Regulations;
2. The claimant does not seek reinstatement; and Eastern Mediterranean Maritime Ltd. And Agemar
3. The aggregate money claim of each employee does Manning Agency Inc., v. Surio et. al., G.R. No. 154213,
not exceed Php 5,000.00. August 23, 2012).
2. Appeal the order or results of a certification election
Adjudicatory power of the Regional Director on the ground that the Rules and Regulations or
parts thereof established by the SLE for the conduct
The RD or any of his duly authorized hearing officers is of election have been violated (Art. 259, LC).
empowered through summary proceeding and after due 3. A review of cancellation proceedings decided by the
notice, to hear and decide cases involving recovery of BLR in the exercise of its exclusive and original
wages and other monetary claims and benefits, jurisdiction (Abbott Laboratories Philippines, Inc.
including legal interests. v. Abbott Laboratories Employees Union, G.R.
No.131374, January 26, 2000).
SECRETARY OF LABOR AND EMPLOYMENT
VISITORIAL AND ENFORCEMENT POWERS SLE has no appellate jurisdiction over decisions of RD
involving petitions for examinations of union accounts.
Powers of the SLE It is the BLR which exercises appellate jurisdiction in
such case (Barles v. Bitonio, G.R. No. 120270, June 16,
1. Visitorial powers 1999).
2. Enforcement powers
3. Appellate or power to review GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION
Visitorial power
Grievance
1. Access to Er’s records and premises at any time of
the day or night, whenever work is being Any question by either the Er or the union regarding the
undertaken interpretation or application of the CBA or company
2. To copy from said records personnel policies or any claim by either party that the
3. Question any Ee and investigate any fact, condition other party is violating any provision of the CBA or
or matter which may be necessary to determine company personnel policies.
violations or which may aid in the enforcement of
the LC and of any wage order, or rules and Grievance machinery
regulation issued pursuant thereto.
It refers to the mechanism for the adjustment and
Enforcement power resolution of grievances arising from the interpretation
or implementation of a CBA and those arising from the
It is the power of the SLE to:
1. Issue compliance orders

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 UST LAW PRE-WEEK NOTES 2017
interpretation or enforcement of company personnel
policies. It is part of the continuing process of CB.
Grievance procedure
It is the internal rules of procedure established by the
parties in their CBA with voluntary arbitration as the
terminal step, which are intended to resolve all issues
arising from the implementation and interpretation of
their CBA.
GR: Decisions of VA are final and executory after 10
calendar days from receipt of the copy of the award or
decision by the parties (Art. 262-A, LC).
XPN: Appeal to the CA via Rule 43 of the Rules of Court
within 15 days from the date of receipt of VA’s decision
(Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Ee’s, G.R.
No. 120319, October 6, 1995).
PRESCRIPTION OF ACTIONS

Subject Matter of Grievance SUBJECT PRESCRIPTIVE PERIOD

1 year from accrual of such
Any grievance arising from: ULP; otherwise forever
1. The interpretation or implementation of the CBA; ULP barred
and
(Art. 290, LC)
2. The interpretation or enforcement of company
personnel policies GR:3 years from the time the
cause of action accrued;
VOLUNTARY ARBITRATOR otherwise forever barred
Money Claims (Art. 291, LC)
Jurisdiction of the Voluntary Arbitrators
XPN: Promissory Estoppel
Generally, the arbitrator is expected to decide only those Within one year from the
questions expressly delineated by the submission All money claims
date of effectivity, in
agreement. Nevertheless, the arbitrator can assume accruing prior to
accordance with IRR;
that he has the necessary power to make a final the effectivity of
otherwise, they shall forever
settlement since arbitration is the final resort for the the LC
be barred
adjudication of the disputes (Ludo and Luym Corp. v.
Workmen’s
Saornido, G.R. No. 140960, January 20, 2003).
Compensation
Dec. 31, 1974 shall be filed not
claims accruing
Cases within the jurisdiction of VA later than Mar. 31, 1975
prior to the
before the appropriate
effectivity of the LC
Original and exclusive jurisdiction over: regional offices of the DOLE.
and between Nov.
(Art. 291, LC)
1, 1974-Dec. 31,
1. All unresolved grievances arising from the:
1974
a. Implementation or interpretation of the CBA After 3 years from the date of
b. Interpretation or enforcement of company submission of the annual
personnel policies financial report to the DOLE
or from the date the same
2. Wage distortion issues arising from the application Union funds should have been submitted
of any wage orders in organized establishments as required by law, whichever
3. Those arising from interpretation and comes earlier (Sec. 5, Rule II,
implementation of productivity incentive programs Book VII, Omnibus Rules
under R.A. 6971 Implementing the LC).
4. Violations of CBA provisions which are not gross in 3 years
character are no longer treated as ULP and shall be
resolved as grievances under the CBA XPN:
Criminal cases ULP – 1 year
NOTE: Gross violation of CBA provisions shall mean
flagrant and/or malicious refusal to comply with the under Labor Code Simple illegal recruitment – 5
economic provisions of such agreement. years
Syndicated illegal
5. Any other labor disputes upon agreement by the recruitment and large scale
parties including ULP and bargaining deadlock (Art. illegal recruitment – 20 years
262, LC). 4 years. It commences to run
Illegal Dismissal from the date of formal
How to initiate arbitration Cases dismissal [Mendoza v. NLRC,
G.R. No. 122481, (1998)].
1. Submission Agreement – Where the parties define
the disputes to be resolved
2. Demand notice – Invoking collective agreement
arbitration clause

REMEDIES

Decisions of voluntary arbitrators appealable

55