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Labor legislation statues, regulations & jurisprudence governing relations bet

capital & labor, by providing for certain standards of terms & conditions of
EENT or providing a legal framework w/in w/c these terms & conditions & the
EENT relationship may be negotiated, adjusted & administered.
2 Divisions of Labor Legislation
1. Labor Standards sets out the minimum terms, conditions & benefits of
EENT that EERS must provide or comply w/ & to w/c EES are entitled as a
matter of legal right.
- minimum requirements prescribed by existing laws, rules &
regulations relating to wages, hrs of work, cost-of-living allowance and other
monetary & welfare benefits, including occupational safety & health standards.
- material or substance to be processed
2. Labor Relations defines the status, rights & duties and the institutional
mechanisms, that govern the indiv & collective interactions of EERS, EES, or
their representatives.
- mechanism that processes the substance

Labor physical toil although it does not necessarily exclude the application of
skill (thus skilled & unskilled labor)
Skill the familiar knowledge of any art/science, united w/ readiness & dexterity
in execution/performance or in the application of the art/science to practical
purposes.
Work (broader than labor) covers all forms of physical/mental exertion, or
both combined, for the attainment of some obj other than
recreation/amusement per se.
Worker (broader than EE) may refer to self-employed people & those

working in the service & under the control of another, regardless of rank, title,
or nature of work.
- any member of the labor force whether employed/unemployed

Employee a salaried person working for another who controls or supervises the
means, manner or method of doing the work.

Labor Law & Social Legislation


Social legislation includes laws that provide particular kinds of
protection/benefits to society in furtherance of social justice.
Labor laws are necessarily social legislation

Social Justice as the Aim


Social justice humanization of laws & the equalization of social & economic
forces by the State so that social justice in its rational & objectively secular
conception may at leas be approximated
- promotion of the welfare of the ppl, the adoption by the Govt of
measures calculated to insure economic stability of all the component
elements of society through the maintenance of proper economic & social
equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers underlying the existence of all
govts.
1987 Consti: protects the rights of workers & promote their welfare
Basic rights of workers guaranteed by the Constitution
1. to organize themselves
2. to conduct collective bargaining/negotiation w/ mgt;
3. to engage in peaceful concerted activities, including to strike in
accordance w/ law; and
4. to participate in policy & decision-making processes affecting rights &
benefits

Other Consti provisions that protect the Rs/promote the welfare of workers
R to form unions, assocs or societies for purposes not contrary to law
R of self-org even for govt EES.. No officer/Ee of the Civil Service shall
be removed/suspended

for cause. Temporary EES of the Govt shall be

given such protection as may be provided by law


Regular farmworkers shall have the R to own directly/collectively the
lands they till. Landless farmworkers may be resettled by the govt in its
own agri estates.
Continuing program of urban land reform & housing
Protection for working women taking into acct their maternal functions, etc
Labor sector is entitled to seats to party list
Goal: more equitable distribution of opportunities, income

& wealth.

Agency to promote the viability & growth of cooperatives as instruments


for social justice & economic devt

Govt shall increase the salary scales of the other officials & EES
Career civil service EES shall be entitled to separation pay & retirement
benefits, OR may be considered for reemployment in the govt
Consti prol-labor, but recognizes the indispensable role of the private sector,
encourages private enterprise and provides incentives to needed investments
Police Power as the Basis
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the power of the govt to enact laws, w/in Constitutional limits to promote
the order, safety, health, morals & general welfare of society

power inherent in govt to protect itself & all its constituents, & for this
purpose to hold the govt immune so far as necessary, from any limitatins
imposed in the past.

An imposition of restraint upon liberty or property in order to foster the


common good.

Birth of the LC
Blas Ople -

father of the LC

LC designed to be a dynamic & growing body of laws w/c will reflect


continually the lessons of practical application & experience
7 Principles Underlying the code

1. Labor relations must be made both responsive & responsible to national


devt
2. Labor laws/labor relations during a period of national emergency must
substitute rationality for confrontation;

strikes or lockouts give way to a

rational process w/c is arbitration


3. Laggard justice in the labor field is injurious to the workers, the EERS &
the public; labor justice can be made expeditious w/o sacrificing due
process.
4. Manpower devt & EENT must be regarded as a major dimension of labor
policy, for there can be no real equality of bargaining power under
conditions of severe mass unemployment.
5. There is a global labor market available to qualified Filipinos, esp those
who are unemployed or whose EENT is tantamount to unemployment
bcoz of their very little earnings.
6. Labor laws must command adequate resources & acquire a capable
machinery for effective & sustained implementation; when labor laws
cannot be enforced, both EERS & the workers are penalized, & only a
corrupt few (those who are in charge of implementation) may get the
reward they dont deserve.
7. There shld be popular participation in national policy-making through what
is now called tripartism.

Some Labor Laws before the Passage of the Code


Act #1874: EERS Liability Act,
Act #2549: prohibited payment of wages in non-cash form
Act #2071: prohibiting slavery/involuntary servitude
R #1054: requiring emergency medical treatmt for EES
CA # 444: 8-hr labor law
CA #103 created the Court of Industrial Relations (CIR)
Pd #21 created the NLRC ( to investigate, decide & settle all disputes
bet EERS & EES
RA # 875: The Industrial Peace Act (the Magna Carta of Labor)

RA #946: Blue Sunday Law forbids commercial, industrial or agri


enterprises to open on any Sunday, Xmas Day, New Years Day, Holy
Thurs & Good Friday.
RA #1787: The Termination Pay Law enumerated the just causes for
terminating an EENT w/o a definite period and allowed EERS to separate
an EE by serving a 15-day notice per yr of service or, by paying an
equivalent separation pay.

Significance of Other Laws


1. Foreign Decisions numerous LC provisions are substantially similar to
the Industrial Peace Act
2. The Civil Code describes the nature of labor mgt relations:
The relations bet capital & labor are not merely contractual. They are so
impressed w/ public interest that labor contracts must yield to the
common good.

such contracts are subj. to the special laws on labor

unions, collective bargaining, strikes & lockouts, closed shop, wages,


working conditions, hrs of labor & similar subjs. Art 1700
Neither capital nor labor shall act oppressively against the other, or
impair the interest or convenience of the public Art 1701.
3. RPC punishes the use of violence or threats by either EER or EE.

4. Special Laws (SSS law, GSIS law, Agrarian Reform law, the 13th-month
pay law, the Magna Carta for Public Health Workers)

Art 3. [Declaration of Basic Polici] The State shall afford protection to labor,
promote full EENT, ensure equal work opportunities regardless of sex, race
or creed, and regulate the relations bet workers & EERS. The State shall
assure the rights of workers to self-org, collective bargaining, security of
tenure, and just & humane conditions of work.
Balanced Approach shared responsibility. Worker & EER sectors are
interdependent.

Art4. [Construction in Favor of Labor] All doubts in the implementation &


interpretation of the provisions of this Code, including its IRRs, shall be
resolved in favor of labor.
Interpretation & Construction policy is to extend the decrees applicability to a
greater number of EES to enable them to avail of the benefits under the law
(Liberal approach is adopted)
Concern for the Lowly Worker SC reaffirms its concern for the lowly worker
who, often at his EERs mercy, must look up to the law for his protection.
(Reason: the EER stands on higher footing than the EE: (1,) There is greater
supply than demand for labor; (2) the need for EENT by labor comes from
vital & even desperate necessity.)
Mgt Rights entitled to respect & enforcement in the interest of simple fair play.
1. R to manage, control, and use his property & conduct business in a

manner satisfactory to himself (just discrimination in the rate of wages


paid to the skillful & to the unskillful, to the efficient & inefficient.)

2. R to prescribe rules (they become part of the contract of EENT)


3. R to select EES & to decide when to engage them, except as restricted
by statute or valid contract, at a wage & under conditions agreeable to
them.
4. R to transfer & discharge EES in order to minimize expenses & to insure
stability of the business & even to close the business, provided it is done
in good faith & due to causes beyond control.
Art 5. [Rules & Regulations] the DOLE & other govt agencies charged w/ the
administration & enforcement of this Code or any of its parts shall promulgate
the necessary IRRs. Such RRs shall become effective 15 days after
announcement of their adoption in the newspapers of gen. circulation.

Art 6. [Applicability] All Rs & benefits granted to workers under this Code shall,
except as may otherwise be provided herein, apply alike to all workers,
whether agricultural or non-agricultural.
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also applies to a govt corp incorporated under the Corporation Code.

Test WON a govt-owned/-controlled corp is subj to CS Law is the


manner of its creation. Govt corps created by special charter are subj to
its provisions, while those incorporated under the gen Corp Law are not
w/in the coverage of the CS law.
PNOC-EDC incorp under the Corp Law

subj to LC

NHA incorp under Act 1459, the former corp law

LC

Govt agencies Ees covered by CS Law

CH. 2: EMANCIPATION OF TENANTS


Art 7 [Statement of Objectives] it has become imperative to start reformation
w/ the emancipation of the tiller of the soil from his bondage.
Art 8: [Transfer of Lands to Tenant-workers] tenant-farmers on private agri
lands primarily devoted to rice & corn under a sys of share crop or lease

tenancy whether classified as landed estate or not shall be deemed owner of


apportion constituting a family-size farm of 5 hectares if not irrigated & 3
hectares if irrigated..
In all cases, the landowners may retain an area of not more than 7
hectares if such landowner is cultivating such area or will now cultivate it.
Art 9. [Determination of Land Value] For the purpose of determining the cost of
the land to be transferred to the tentant-farmer, the value of the land shall be
equivalent to 2 & times the average harvest of 3 normal crop yrs
immediately preceding the promulgation of PD 27 (OCT 21, 1972).
The total cost of the land, including interest at the rate of 6% per annum,
shall be pd by the tenant in 15 yrs of 15 equal annual amortizations.
In case of default, the amortizations due shall be pd by the farmers
cooperative in w/c the defaulting tenant-farmer is a member, w/ the coop
having a right of recourse against him.
The govt shall guarantee such amortizations w/ shares of stock in govtowned & -controlled corps.

Art 10. [Conditions of Ownership] No title to the land acquired by the tenantfarmer under PD 27 shall be actually issued to him unless & until he has
become a full-fledged member of a duly recognized farmers coop.
Title to the land acquired pursuant to PD 27 or the Land Reform
Program of the Govt shall not be transferable except by hereditary succession
or to the Govt in accdance w/ the provisions of PD 27, the Code of Agrarian
Reforms & other existing laws & regulations.
Art 11. [Implementing Agency] The Dept of Agrarian Reform shall promulgate the
necessary rules & regulations to implement the provisions of this Chapter.
*Land for the landless battlecry dramatizing the increasingly urgent demand of
the dispossessed for a plot of earth as their place under the sun.
*CARP Law signed by Cory, declaring full land ownership in favor of the
beneficiaries of the PD 27.
Share tenancy abolished, put the agricultural leasehold sys in its stead, geared
towards eventual ownership of land by its tillers
Consti -

State shall undertake an Agrarian Reform Program, and encourage &

undertake the just distribution of all agri lands, subj to such priorities &
reasonable retention limits as the Congress may prescribe,
Compensation scheme: Sec 18 of CARP: Title to all expropriated properties shall
be transferred to the State only upon full payment of compensation of their
respective owners.
Retention Limits provided for by RA 6657 :

as otherwise provided.. no

person may own/retain directly/indirectly, any public/private agri land, the size
of w/c shall vary accdg to factors governing a viable family-sized farm, such
as commodity produced, terrain, infrastructure, & soil fertility as determined by
the Presidential Agrarian Reform Council (PARC).
3 hectares may be awarded to each child of the landowner, subj to the ff
qualifications: (1.) he is at least 15 y/o, and (2) he is actually tilling the land
or directly managing the farm; Provided, that landowners whose lands have
been covered b PD 27 shall be allowed to keep the area originally retained
by them thereunder; Provided further, that orig homestead grantees or direct

compulsory heirs who still own the org homestead at the time of the approval
of this Act shall retain the same areas as long as the continue to cultivate
said homestead.
Lands not covered
1. Lands obtained through homestead patent:
Homestead Act gives a needy citizen a piece of land where he may
build a modest house for himself & family & plant what is necessary for
subsistence & for the satisfaction of lifes other needs.
- superior over the rights of tenants
2. Residential Subdivisions not considered agricultural. An agricultural leasehold
cannot be established on land w/c has ceased to be devoted to cultivation or
farming bcoz of its conversion into a residential subd.
3. Livestock, poultry & Swine raising lands: Sec 2 of RA 6657 w/c includes

private agri lands devoted to commercial livestock, poultry & swine raising in
the definition of commercial farms is invalid. They are covered by the
agrarian reform prog of the State.

The Greatest BlessingThe Worst Crime Frederick Taylor


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an increased output invariably gives more work to more men, & never in
the history of the world has it more than temporarily, and then for only a
very short time, diminished by the number of men at work in any trade

The Greatest Exploiter Blas Ople


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unemployment is the greatest exploiter of labor. Mass unemployment


tends to leave the EER all-powerful and the worker defenseless

More Capital Means More Jobs Adam Smith


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2 kinds of funds: (1) the Revenue w/c is over & above what is
necessary for the maintenance; and (2) the Stock w/c is over & above
shat is necessary for the EENT of their masters.

The demand for those who live by wages

necessarily increases w/ the

increase of the revenue & stock of every country and cannot increase
w/o it. The increase of revenue & stock is the increase of national wealth.
An Exploited Class J. Reynato Puno
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Overseas workers constitute an exploited class. Their unfortunate


circumstance makes them easy prey to avaricious EERs. They will work
under subhuman conditions & accept salaries below the minimum.

9% of Filipinos are Based OverseasPh Star

RA 6657 Comprehensive Agrarian Reform Program

Aim: A more equitable distribution & ownership of land, w/ due regard to the
rights of landowners to just compensation & to the ecological needs of the
nation
Basis: the R of farmers & regular farm workers, who are landless, to own
directly or collectively the lands they till or, in the case of other farm workers,
to receive a share of the fruits thereof
The State:
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shall respect the R of small landowners & shall provide incentives for
voluntary land-sharing

shall recognize the R of farmers, farm workers & landowners, as well as


cooperatives & other independent farmers org, to participate in the
planning, org, & mgt of the program & shall provide support to agriculture
though tech & research & financial, production, marketing & other support
services

may resettle landless farmers & farm workers in its own agricultural
estates

shall encourage the formation & maintenance of economic-sized family


farms to be constituted by indiv beneficiaries & small landowners

shall protect the Rs of subsistence fishermen to the preferential use of


communal marine & fishing resources both inland & offshore

shall provide support to such fishermen thru appropriate tech & research,
adequate financial, production & marketing assistance

shall protect offshore fishing grounds of subsistence fishermen against


foreign intrusion. Fisherworkers shall redeive a just share from their labor
in the utilization of marine & fishing resources

owners of agri land have the oblig to cultivate directly or thru labor
admin the lands they own & thereby make the land productive.

Shall provide incentives to landowners to invest the proceeds of the


agrarian reform prog to promote industrialization, EENT & privatization of
pub sector enterprises

May lease undeveloped lands of pub domain to qualified entities for the
devt of capital-intensive farms, traditional & pioneering crops esp those
for export (subj. to Rs of beneficiaries)

Definitions
1. Agrarian Reform the redistribution of lands, regardless of crops/fruits
produced, to farmers & regular farm workers who are landless,
irrespective of tenurial arrangemt, to include the totality of factors &
support services designed to lift the economic status of the beneficiaries
and all other arrangemts alternative to the physical redistribution of lands
(production or profit-sharing, labor admin, distribution of shares of stock)
2. Agriculture, Agricultural Enterprise or Agricultural Activity the cultivation
of the soil, planting of crops, growing of fruit trees, incl. the harvesting of
such farm products, & other farm activities
3. Agricultural land land devoted to agricultural activity, and NOT classified
as mineral, forest, residential, commercial or industrial land
4. Agrarian Dispute any controversy relating to tenurial arrangements,

whether leasehold, tenancy, stewardship or otherwise, over lands devoted


to agri
- including disputes concerning farm workers assocs,

or representation of persons in negotiating, fixing, maintaining, changing


or seeking to arrange terms of conditions of such tenurial arrangements
- including controversy relating to compensation of
lands acquired under this Act & other terms & conditions of transfer of
ownership from landowners to farm workers, tenants & other agrarian
reform beneficiaries
5. Idle / Abandoned Land any agricultural land not cultivated, tilled or
developed to produce any crop nor devoted to any specific economic purpose
continuously for a period of 3 yrs immediately prior to the receipt of notice of
acquisition by the govt
- but does NOT include land that has become permanently or
regularly devoted to non-agricultural purposes
- does NOT include land w/c has become unproductive by reason
of force majeure or F event
6. Farmer a natural person whose primary livelihood is cultivation of land or
the production of agri crops either by himself, or primarily w/ the assistance

of his immediate farm household, whether the land is owned by him, or by


another person under a leasehold or tenancy agreement
7. Farmworker a netural person who renders service for value as an EE or
laborer in an agricultural enterprise or farm
8. Regular Farmworker a natural person who is employed on a permanent
basis by an agricultural enterprise or farm
9. Season Farmworker a natural person who is employed on a recurrent,
periodic or intermittent basis by an agricultural enterprise or farm
h. Cooperatives orgs composed primarily of small agri producers, farmers,
farmworkers or other agrarian reform beneficiaries who voluntarily organize
themselves for the purpose of pooling land, human, technological, financial or
other economic resources & operated on the principle of one member, one
vote. ( a juridical person may be a member of a coop, w/ the same Rs &
duties as a natural person.
Scope: all public & private agricultural lands, incl. other lands of the pub domain
suitable for agriculture
1. All alienable & disposable lands of the pub domain devoted to or suitable
for agriculture
2. All lands of the pub domain in excess to the specific limits as determined
by Congress
3. All other lands owned by the Govt devoted to or suitable for agri
4. All private lands devoted to or suitable for agri regardless of the agri
products raised/can be raised thereon
Schedule of Implementation: w/in 10 yrs from effectivity
Retention Limits: no person may own or retain, directly, any pub or private
agricultural land, the size of w/c shall vary accdg to factors governing a viable
family-sized farm
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landowner may retain only 5 hectares.

3 hectares: each child of landowner, that is 15y/o, and is actually tilling


the land or directly managing the farm

landowners whose lands have been covered by PD 27 shall be allowed


to keep the area originally retained by them thereunder

the original homestead grantees or direct compulsory heirs who still own
the orig homestead shall retain the same areas as long as they continue
to cultivate said homestead

the R to choose the area to be retained belongs to the landowner.


However: (a) in case the area selected by landowner is tenanted, the
tenant shall have the option whether to remain therein, be a beneficiary
of the same, or another agri land w/ similar/comparable features; (b) in
case the tenant chooses to remain in the retained ares, he shall be
considered a leaseholder & shall lose his R as a leaseholder to the land
retained by the landowner. The tenant must exercise this option w/in 1 yr
fr the time the landowner manifests his choice of the area for retention.

Upon Acts effectivity, any sale, disposition, lease, mgt contract or


transfer of position of private lands executed by the orig landowner in
violation of this Act shall be null & void. Provided, that those executed
prior to this Act shall be valid only when registered w the Reg of Deeds
w/in 3 months after effectivity.

Presidental Agrarian Reform Council (PARC) shall provide the implementing


rules
- upon recommendation by the Provincial Agrarian Reform
coordinating Committee, may declare certain provinces/regions as priority land
reform areas

Multinational Corps all lands of the pub domain leased, held, or possessed by
multi corps or assocs, and other lands owned by the govt, or govt-owned/controlled corps, assocs, institutions or entities, devoted to existing &
operational agribusiness or agro-industrial enterprises, operated by multicorps
shall be programmed for acquisition & distribution immediately upon effictivity
Ancestral Lands shall include, but not limited to, lands in the actual,
continuous & open possession & occupation of the community and its
members, provided that the Torrens System shall be respected

shall be protected to ensure their economic, social & cultural well-being

in the autonomous regions, the respective legislature may enact their own
laws on ancestral domain subj to the provisions of the Consti, this Act
and other national laws.

Exemptions & Exclusions


1. Lands actually, directly & exclusively used for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds, watersheds
and mangroves
2. Private lands actually, directly & exclusively used for prawn farms &
fishponds (provided that said prawn farms & fishponds have not been
distributed and Cert of Land Ownership Award issued to ARP.
3. Lands actually, directly & exclusively used & found to be necessary for
national defense, school sites & campuses, incl experimental farm
stations operated by pub/private schools for educational purposes, seeds
and seedlings research and pilot production center, church sites &
convents apputenat therety, mosque sites & Islamic centers appurtenant
thereto, communal burial grounds & cemeteries, penal colonies & penal
farms actually worked by inmates, got & private research & quarantine
centers and all lands w/ 18% slope and over,

except those already

developed
Procedure for Acquisition of Private Lands
1. After having identified the land, the landowners & beneficiaries, DAR shall
send its notice to acquire the land to the owners;
2. w/in 30 days from date of receipt, landowners shall inform the DAR of
his acceptance/rejection of the offer;
a. if landowner accepts the offer, the LBP shall pay the landowner of
the purchase price of the land w/in 30 days after he executes &
delivers a deed of transfer in favor of the Govt and surrenders
the Cert of Title
b. in case of rejection or failure to reply, DAR shall conduct
summary admin proceedings to determine compensation of the
land
3. upon receipt of the landowner of the payment, or in case of rejection or
no response fr the landowner, upon the deposit w/ an accessible bank or

the compensation, the DAR shall take immediate possession of the land
& shall request the Register of Deeds to issue a TCT in the name of the
RP.
4. Any party who disagrees w/ the decision may bring the matter to the
court

Determination of Just Compensation


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cost of acquisition of the land

current value of like properties,

its nature, actual used and income

the sworn valuation by the owner,

tax declarations

assessment made by the govt assessors

Incentives for voluntary offers of sale addtl 5% cash


Priority of Qualified Beneficiaries
1. Agricultural lessees & share tenants
2. Regular farmworkers
3. Seasonal farmworkers
4. Other farm workers
5. Actual tillers/occupants of public lands
6. Collective or cooperatives of the above beneficiaries
7. Others directly working on the land
*Provided: children of landowners who are qualified shall be given preference in
the distribution of the land of their parents
*Provided further: actual tenant-tillers in the landholding shall not be
ejected/removed therefrom.

Transferability of Acquired lands by beneficiaries may not be sold, transferred


or conveyed

except thru hereditary succession, or to the govt, or to the

LBP, or to other qualified beneficiaries for 10 yrs


*Provided, that the children/spouse of the transferor shall have a R to
repurchase the land fr the govt/LBP w/in 2 yrs

Standing crops at the time of acquisition shall be retained by the landowner,


Dar shall give a reasonable time to harvest the same

Corporate Farms
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in case land cannot be divided directly, shall be owned collectively by the


worker-beneficiaries who shall form a workers cooperative or assoc w/c
will deal w/ the corp

indiv members of the coop shall be provided w/ homelots or small


farmlots for their family use taken fr the land owned by the coop

Production-sharing - pending final land transfer


Support Services
1. irrigation facilities
2. infrastructure devt & pub works projects
3. govt subsidies for the use of irrig facilities

RA 9700 Act Strengthening the CARP, extending the acquisition & distribution
of all agricultural lands, instituting necessary reforms, amending for the
purpose certain provisions of RA 6657
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State shall protect Filipino enterprises against unfair foreign competition &
trade practices

State recognizes that there is not enough agricultural land to be divided


& distributed to each farmer & regular farmworker so that each one can
own his economic-size family farm.

Answer: simultaneous industrialization aimed at developing a self-reliant &


independent national economy effectively controlled by Filipinos

State may, in the interest of national welfare or defense, establish &


operate vital industries

Implementation of the prog shall be community-based

State shall recognize & enforce the Rs of rural women to own & control
land

State shall provide incentives to landowners to invest the proceeds of the


agrarian reform prog to promote industrialization, EENT & privatization of
the pub sector enterprises

Added Definition
1. Rural women women who are engaged directly/indirectly in farming
and/or fishing as their source of livelihood, whether paid or unpaid,
regular or seasonal, or in food preparation, managing the household,
caring for the children, & other similar activities
2. Landless beneficiary one who owns less than 3 hectares of agri land

Added Exception to Retention Limits


- Provincial, city & mun govt units acquiring private agri lands by expropriation to
be used for actual, direct & exclusive pub purposes, such as roads & bridges,
pub markets, school sites, resettlement sites, local govt facilities, pub parks &
brgy plazas or squares consistent shall not be subj to the 5-hectare retention
limit
Order of Priority
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3 hectares each to the 1st 2 beneficiaries

only when these beneficiaries have rcvd 3 hectares each, shall the
remaining portion of the landholding, if any, be distributed to other
beneficiaries

Payment by Beneficiaries payable to LBP in 30 annual amortizations at 6%


interest per annum

Support shall be extended equally to women & men beneficiaries

Landicho v Sia
Facts:
3 parcels of land were originally owned by the Aragons, tenanted by the
late Arcadio Landicho from 1949 until his death in 1972, afterwhich, his

tenancy rights were succeded by his son, petitioner Francisco Landicho (the
other petitioners were Buenaventura (Franciscos son), and Federico
(Franciscos brother), helped him cultivate the land
in 1976, Francisco voluntarily surrendered his tenancy Rs over the land to
the Aragons through a notarized kasulatan for a consideration of P1,000,
but petitioners continued cultivating the land until 1987 when Francisco
executed another notarized kasulatan thru w/c he surrendered his tenancy
rights for a consideration of P3,000.
On the same day as the execution of the 1987 kasulatan, the lands were
sold by the Aragons for P50,000 to respondent Felix Sia, who in turn
converted the same to a residential subd w/o a DAR clearance and ejected
the petitioners therefrom.
Peitioners filed a protest before the DAR alleging that they are the tenants
of the lands and claimed that they are entitled to a disturbance
compensation. They alleged that they were fooled into signing over their
tenancy rights thru the machinations of the Aragons.
The respondents in their answer, denied such allegation and added that the
petitioners are barred by estoppel, laches and prescription
Issue 1: WON petitioners are tenants of the land
Held: A tenant is defined as a person who, himself and w/ the aid available
from w/in his immediate farm household, cultivates the land belonging to, or
possessed by another, w/ the latters consent for purposes of production,
sharing the produce w/ the landholder under the share tenancy system, or
paying to the landholder a price certain or ascertainable in produce or in
money or both, under the leasehold tenancy system
For a tenancy relationship to exist, all of the ff essential requisites must be
present:
1) the parties are the landowner & the tenant
2) the subj matter is agricultural land
3) there is consent bet the parties
4) the purpose is agricultural production
5) there is personal cultivation by the tenant
6) there is sharing of the harvests bet the parties

Under the definition, only Francisco possesses the requisites of a tenant.


Petitioners Federico and Buenaventura are not tenants because consent
(#3) by the landowners is lacking. They are merely farm helpers of
Francisco as part of his immediate farm household. There was also no
evidence to show that they gave a share of their harvest to the Aragons
(#6).
Issue 2: WON the respondents took advantage of Franciscos old age & illiteracy
and employed fraudulent schemes in order to deceive him into signing the
Kasulatans
Held: As the legal tenant of the lands, Francisco had voluntarily surrendered his
tenancy rights when he knowingly & freely executed the 1987 Kasulatan.
There was no showing of foul play, because the Kasulatan was in Filipino, a
language spoken & understood by Francisco and was couched in plain and
clear terms. Such kasulatan was also duly notarized and are considered as
public documents executed w/ all the legal formalities which afford it the legal
presumption of regularity and legality abent full, clear and convincing evidence
to the contrary.
Final ruling: Petitioners have no cause of action and the same has prescribed.

Portuguez v GSIS Family Bank and CA


Facts:
Petitioner was employed by the respondent bank as utility clerk in 1971.
Since then, he had been promoted repeatedly up to 1998 when he was
temporarily assigned as caretaker of the bank and designated as Acting
Asst. VP and OIC in June of 1998.
Respondent bank is a banking institution originally known as Royal
Savings Bank. In 1983-84, it underwent serious liquidity problems and
was placed under receivership by the Central Bank, which ordered its
closure in July of 1984. After 2 months, the respondent bank was
reopened under the control & mgt of Comsavings Bank.

In 1987, the GSIS acquired the interest of the respondent bank and took
over the control & mgt of the bank and renamed it as GSIS Family
Savings Bank.
The designation of the petitioner as OIC & caretaker was recalled,
however his appointment as Acting Asst VP was retained.
In line w/ its policy to attain financial stability, the respondent bank
adopted measures, one of w/c is an early retirement program.
In april of 2001, petitioner opted to avail himself of this retirement
package, (supposedly under protest) & received the amt of P1,342M as
retirement pay.
In july 2002, petitioner filed a complaint against resp bank for constructive
dismissal & underpayment of wages, 13th month pay & retirement benefits

before the Labor Arbiter. He alleged discrimination & unfair treatment, and
intense pressure on the part of the resp bank forced him to retire at the
prime of his life.

Issue 1: WON there was constructive dismissal


Held: No.
Constructive dismissal quitting because continued EENT is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank & a
dimunition in pay. May also mean an act of clear discrimination, insensibility
or disdain by an EER may become so unbearable on the part of the EE so
as to foreclose any choice on his part except to resign
Petitioner claims he was discriminated against as new hires were given higher
salaries than he was receiving.
Discrimination failure to treat all persons equally when no reasonable
distinction can be found bet those favored & those not favored. It must be
clearly established that (1) there is no reasonable distinction for classification
that can be obtained bet persons belonging to the same class, and (2)
persons belonging to the same class have not been treated alike

Petitioner failed to established that he possessed the same skills, competencies


& expertise as those newly hired to eliminate the possibility of substantial
distinction that may warrant unequal treatment bet them.
Petitioner contends that in cases of constructive dismissal, the burden of proof
rests on the EER to show that the EE was dismissed on a valid & just cause.
But this legal principle presupposes that there is indeed an involuntary
separation from EENT & the facts attendant to such forced separation was
clearly established, w/c the petitioner failed to do. It was him who availed of
the voluntary retirement program. And absent the showing of duress, the
presumption is that it was done by him voluntarily.
While the state promotes the utmost protection of labor against capital, it does
not mean that the working class is upheld in all labor dispute. The law also
recognizes the rights of management.

PRE-EMPLOYMENT
Art 12. It is the policy of the State:
1. to promote and maintain a state of full employment through improved
manpower training, allocation and utilization;

2. to protect every citizen desiring to work locally/overseas by securing for


him the best possible terms and condition of employment;

3. to facilitate a free choice of available employment by persons seeking


work in conformity with the national interest;
4. to facilitate & regulate the movement of workers in conformity w/ the
national interest;
5. to regulate the employment of aliens, including the establishment of a
registration and/or work permit system;
6. to strengthen the network of public employment offices and rationalize the
participation of the private sector in the recruitment and placement of
workers, locally and overseas, to serve national development objectives;
7. to insure careful selection of Filipino workers for overseas employment in
order to protect the good name of the PH abroad.

The DOLE
-

by Administrative Code of 1987 (EO 292)

the primary policy-making, programming, coordinating and administrative


entity of the Executive branch of the govt in the field of labor and
employment

Its Primary responsibilities:


1. The promotion of gainful EENT opportunities and the optimization of the
devt & utilization of the countrys manpower resources;
2. The advancement of workers welfare by providing for just and humane
working conditions and terms of EENT;
3. The maintenance of industrial peace by promoting harmonious, equitable
and stable EENT, relations that assure protection for the Rs of all
concerned parties.

RECRUITMENT & PLACEMENT OF WORKERS


Art 13. Definitions
Worker any member of the labor force whether employed or unemployed.
Recruitment & placement any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referrals,
contract services, promising or advertising for EENT, locally or abroad,

whether for profit or not: provided, that any person or entity w/c, in any
manner, offers or promises for a fee EENT to 2/more persons shall be
deemed engaged in recruitment & placement
Private fee-charging EEnt Agency any person/ entity engaged in the
recruitment & placement of workers for a fee w/c is charged directly/indirectly
from the workers or employers or both
License a document issued by the DOLE authorizing a person/entity to operate
a private EENT agency
Private recruitment entity any person/assoc engaged in the recruitment &
placement of workers, locally/overseas without charging, directly/indirectly any
fee from the workers or employers.
Authority a document issued by the DOLE authorizing a person/assoc to
engage in recruitment & placement activities as a private recruitment entity
Seaman any person employed in a vessel engaged in maritime navigation
Overseas EENT EENT of a worker outside the PH
Emigrant any person, worker or otherwise, who emigrates to a foreign country
by virtue of an immigrant visa or resident permit to its equivalent in the
country of destination

Art 14. EMPLOYMENT PROMOTION


The Sec of Labor shall have the power & authority:

1. to organize & establish new EENT offices in addition to existing EENT


offices under the DOLE as the need arises;
2. to organize & establish a nationwide job clearance & information system
to inform applicants registering w/ a particular EENT office of job
opportunities in other parts of the country as well as job opportunities
abroad;
3. to develop & organize a program that will facilitate occupational industrial
and geographical mobility of labor and provide assistance in the
relocation of workers from one area to another; and
4. to require any person, establishment, org, or institution to submit such
EENT information as may be prescribed by the Sec of Labor.
Bureau of Local Employment (BLE) assigned the effective allocation of
manpower resources in local
Ph Overseas Employment Administration (POEA) for overseas employment

Art 15. BUREAU OF EMPLOYMENT SERVICES (now BLE)


-

primarily responsible for developing & monitoring a comprehensive EENT


program.

Powers & Duties:


1. To formulate & develop plans & programs to implement the EENT
promotion objectives of this Title;
2. To establish & maintain a registration and/or licensing system to regulate
private sector participation in the recruitment & placement of workers,
locally & overseas, and to secure the best possible terms & conditions of
EENT for Filipino contract workers and compliance therewith under such
rules & regulations as may be issued by the DOLE;
3. To formulate & develop EENT programs designed to benefit
disadvantaged groups & communities;
4. To establish & maintain a registration and/or work permit system to
regulate the EENT of aliens;
5. To develop a labor market information system in aid of proper manpower
and development planning;

6. To develop a responsible vocational guidance & testing system in aid of


proper human resources allocation; and
7. To maintain a central registry of skills, except seamen

Original & Exclusive Jurisdiction of the regional offices of DOLE


-

over all matters/cases involving EE-EER relations including money claims,


arising out of or by virtue of any law or contracts involving Filipino
workers for overseas EENT

except seamen: Provided, thet the Bureau

of Employment Services (BES) (now BLE) may, in the case of the NCR,
exercise such power, whenever the DOLE deems it appropriate.
The decisions of the regional offices of the BES if so authorized by the Sec
of DOLE shall be appealable to the NLRC upon the same grounds provided
in Art 233 hereof.
The decisions of the NLRC shall be final & unappealable.
Minister of Labor has the power to impose & collect fees, based on rates
recommended by the BES. Such fees shall be deposited in the National
Treasury as a special acct of the General Fund, for the promotion of the
objectives of the BES, subj to the provisions of Sec 40 of PD 1177.
PD 850 replaced BES w/ BLE, and created POEA
AO 186 made licensing of local recruitment agencies and the issuance
of work permits to non-resident aliens and EENT registration certificates
to resident aliens a function of the regional offices of DOLE
RA 8795 required the establishment of a Public Employment Service
Office (PESO) in capital towns, cities and other strategic areas
o

PESO - serves as EENT service & information center


-

Regularly obtains lists of job vacancies from EERS,


publicizes them, invites and evaluates applicants, and
refers them for probable hiring

Provides training and educational guidance and EENT


counseling services

Also renders special services to the public such as holding


of jobfairs, livelihood and self-employment bazaars

Special credit assistance for placed overseas workers

Special program for EENT of students (SPES) during


summer or semestral breaks

Work appreciation seminars & conferences and

Hiring of workers in infrastructure projects (WHIP)

Ra 6885 created WHIP, a program w/c requires the DPWH and private
contractors to hire 30% of skilled and 50% unskilled labor requirements
from the area where the project is being undertaken

Art 16. PRIVATE RECRUITMENT:


GR: No person/entity other than the public EENT offices, shall engage in the
recruitment & placement of workers.
: Exceptions
1. Public EEnt offices

2. Private recruitment entities


3. Private EENT agencies
4. Shipping or manning agents or representatives
5. The POEA
6. Construction contractors if authorized to operate by DOLE and the
Construction Industry Authority
7. Members of the diplomatic corps although hirings done by them have to
be processed through the POEA
8. Other persons/entities as may be authorized by the Sec of DOLE

Art 17. OVERSEAS EMPLOYMENT DEVT BOARD


POEA has taken over the functions of the Overseas Employment Development
Board (OEDB) and the National Seamen Board (NSB)

OFW a Filipino worker who is to be engaged, is engaged or has been


engaged in a renumenerated activity in a country of which he/shee is not a
legal resident
2 Classifications
1. Land-based contract workers other than a seaman including workers
ingaged in offshore activities whose occupation requires that majority of
his working/gainful hrs are spent on land
2. Sea-based those employed in a vessel engaged in maritime navigation
Principal Functions of the POEA
1. Formulation, implementation and monitoring of overseas employment of
Filipino workers;
2. Protection of their rights to fair and equitable employment practices;
3. Deployment of Filipino workers through govt-to-govt hiring
Regulatory Functions
1. Regulate private sector participation in the recruitment & overseas
placement of workers through its licensing and registration system;
2. Formulate & implement, in coordination w/ appropriate entities concerned,
when necessary, a system for promoting and monitoring the overseas
EEnt of Filipino workers taking into consideration their welfare and the
domestic manpower requirements;
3. Inform migrant workers not only of their rights as workers but also of
their rights as human beings;
4. Instruct and guide the workers how to assert their rights and provide the
available mechanism to redress violation of their rights;
5. In the recruitment & placement of workers to service the requirements for
trained and competent Filipino workers of foreign govts and their
instrumentalities, and such other employers as public interest may require,
deploy only to countries:
a. Where the PH has concluded Bilateral labor agreements or
arrangements;
b. Observing and/or complying w/ the international laws and
standards of migrant workers;
c.

Guaranteeing to protect the rights of Filipino migrant workers.

Adjudicatory Functions
1. Administrative cases involving violations of licensing rules & regulations
and registration of recruitment and EEnt agencies/entities; and
2. Disciplinary action cases and other special cases w/c are administrative
in character, involving employers, principals, contracting partners and
Filipino migrant workers.
Jurisdiction of POEA
1. all cases w/c are administrative in character, involving or arising out of
violations of rules & regulations relating to licensing & registration of
recruitment and employment agencies/entities; and
2. disciplinary action cases and other special cases w/c are administrative in
character, involving EERS, principals, contracting partners and Filipino
migrant workers
3. NO jurisdiction to enforce foreign judgment (must be brought before the
regular courts). POEA is an administrative (not a court), exercising
adjudicatory or quasi-judicial functions
4. NO jurisdiction over torts
Grounds for Disciplinary Action
1. Commission of a felony punishable by Ph laws or by the laws of the
host country;
2. Drug addiction/possession or trafficking of prohibited drugs;
3. Desertion or abandonment;
4. Drunkenness, esp where the laws of the host country prohibit intoxicating
drinks;
5. Gambling, esp where the laws of the host country prohibits the same;
6. Initiating/joining a strike or work stoppage where thelaws of the host
country prohibit strikes or similar actions;

7. Creating trouble at the worksite or in the vessel;


8. Embezzlement of company funds or of moneys and properties of a fellow
worker entrusted for delivery to kins or relatives in the PH;
9. Theft/robbery;
10. Prostitution;
11. Vandalism or destroying company property;

12. Gunrunning or possession of deadly weapons;


13. Unjust refusal to depart for the worksite after all employment and travel
documents have been duly approved by the approp govt agency/ies; and
14. Violation/s of the laws and sacred practices of the host country and
unjustified breach of govt-approved EENT contract by a worker
COMPROMISE AGREEMENT
-consistent w/ the policy encouraging amicable settlement of labor disputes Sec
10 of RA 8042 allows resolution by compromise of cases filed w/ the NLRC
- any compromise agreement on money claims inclusive of damages shall be
paid w/in 4 months from the approval of the settlement
Penalties for Non-compliance of the mandatory period for resolution of
cases
1. The salary of such official who fails to render his decision/resolution
w/in the prescribed pd shall be, or caused to be, withheld until such
official complies therewith;
2. Suspension for not more than 90 days; or
3.

Dismissal w/ disqualification to hold any appointive public office for 5


yrs

EER/EE Relations Cases


Millares & Lagda v NLRC: SC: seafarers are contractual EES
Premature Termination of Contract
If EE is terminated before end of contract w/o just cause, EERS will be ordered
to pay their salaries corresponding to the unexpired portion of their EENT
contract
Pretermination Under RA 8042
A worker dismissed from overseas EENT w/o just cause as defined by
law/contract is entitled to full reimbursement of his placement fee w/ interest

at 12% per annum, plus the salary for the unexpired portion of their EENT
contract.
Due Process required to terminate employment
Ex: in case of seamen must be given written notice of the charges against
him, and afforded a formal investigation where he can defend himself or thru
a representative before he can be dismissed & disembarked. The EER is
required to furnish him w/ 2 notices: (1) written notice of charge; and (2)
written notice of dismissal
Contracted but not Deployed: Perfected Contract
Death benefits of Seafarers
-

entitled to death and other benefits under w/c ever is higher (foreign law
or Ph law)

entitled to death benefits if death occurs during the term of his contract
of employment, even if death is not work-related

death is caused by

their own doing


Disability loss or impairment of a physical or mental function resulting from
injury/sickness
Permanent disability the inability of a worker to perform his job for more than
120 days, regardless of WON he loses the use of any part of his body
Total Disability disablement of an EE to earn wages in the same kind of work
of similar nature that he was trained for or accustomed to perform, or any
kind of work w/c a person of his mentality and attainments could do. It does
not mean absolute helplessness.
In disability compensation, it is not the injury w/c is compensated, but rather it is
the incapacity to work resulting in the impairment of ones earning capacity
Disability benefits by seamen a matter governed not only by medical findings
but by law & contract

- shall be paid beginning on the 1st day of such disability. If caused by

an injury/sickness it shall not be paid longer than 120 consec days

except

where such injury/sickness still requires medical attendance beyond 120 days

but not to exceed 240 days from onset of disability in w/c case benefit for
temporary total disability shall be paid.
In case of differing medical assessment
a.) when a seafarer sustains a work-related illness/injury while on board, his
fitness/unfitness to work shall be determined by the company-designated
physician.
b.) If the physician appointed by the seafarer disagrees w/ the company-

designated physicians assessment, the opinion of a 3rd doctor may be


agreed jointly bet the EER and the seafarer to be the decision final and
binding on them

Agencies Given the Duty to promote the welfare & rights of migrant workers:
1. DFA
2. DOLE
3. POEA
4. OWWA Overseas Workers Welfare Administration provides social &
welfare services including insurance coverage, legal assistance, placement
assistance and remittance services to Filipino overseas workers. Under
RA8042, it shall provide the Filipino migrant worker & his faily assistance
in the enforcement of contractual obligs by agencies, entities and/or their
principals;
5. RPM - Re-Placement and Monitoring Center develops livelihood
programs for the returning workers to reintegrate the returning migrant
workers to the Ph society;
6. NLRC tasked w/ the settlement/adjudication of labor disputes

Art 18: BAN ON DIRECT HIRING


GR: Direct hiring of Filipino workers for overseas EENT is not allowed
Exceptions:
1. Members of Diplomatic corps;
2. International organizations;
3. Other employers as may be allowed by DOLE; and
4. Name hires individual workers who are able to secure contracts for
overseas EENT on their own efforts and representations w/o
assistance/participation of any agency. Their hiring nonetheless, shall pass
through the POEA for processing purposes
Rationale of the Prohibition
1. To assure the best possible terms & conditions of work to the EE; and
2. To assure the foreign EER that he hires only qualified Filipino workers
Art 19: COMMISSION ON FILIPINO OVERSEAS
CFO attached to the DFA; replaced the Office of Emigrant Affairs.
-

assists in the formulation of policies affecting Filipinos overseas and


formulates an integrated program that promotes the welfare of Filipinos
overseas

Art 21. FOREIGN SERVICE ROLE AND PARTICIPATION


-

necessary to monitor the status of OFWs in their respective areas of


assignment and insure that they are not exploited or abused by their
foreign principal EERS

Art 22. MANDATORY REMITTANE OF FOREIGN EXCHANGE EARNINGS


- All OFWs are required to remit a portion of their foreign exchange earnings
ranging from 50% - 80% depending on the workers kind of job, to their
families, dependents, and/or beneficiaries.
Seamen/Mariners 80%
Workers for Filipino Contractors & Construction companies 70%
Professionals whose EENT contract provide for lodging facilities 70%
Professionals w/o Board & Lodging 50%
Domestic and other service workers 50%

Exceptions to Mandatory Remittance


1. Fil servicemen working in US military installations;
2. Where the workers immediate family members, dependents, or
beneficiaries are residing w/ him abroad;
3. Immigrants and Fil professionals and EEs working w/ UN agencies or
specialized bodies
Effects of Failure to Remit
1. Workers who fail to comply w/ the mandatory remittance reqment shall be
suspended/excluded from the list of eligible workers for overseas EENT.
Subsequent violations shall warrant his repatriation.
2. EERS who fail to comply shall be excluded from the overseas EENT
program. Private EENT agencies/entities shall face cancellation or
revocation of their licenses or authority to recruit, w/o prejudice to other
liabilities under existing laws and regulations

CH 2: REGULATION OF RECRUITMENT & PLACEMENT ACTIVITIES


Art 25: PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT &
PLACEMENT OF WORKERS
Private Sectors that can participate
1. Private EENT agencies;
2. Private recruitment agencies;
3. Shipping or manning agencies;
4. Such other persons as may be authorized by the Sec of DOLE; and
5. Construction contractors w/ a duly issued authority to operate private
recruitment entities
Qualifications for Participation
1. Citizenship requirement
a. Filipino citizens; or
b. Corporations, partnerships or entities at least 75% of the
authorized and voting capital stock of w/c is owned & controlled
by Filipino citizens.
2. Capitalization

a. Private EENT agency for local EENT


i. For single proprietorship or partnership minimum net
worth of 200k pesos
ii. For corporations a minimum paid up capital of 5ook
pesos
b. Private recruitment or manning agency for overseas EENT
i. For single proprietorship or partnership P2M minimum
capital
ii. For corps P2M minimum paid up capital, Provided, that
those w/ existing licenses shall, w/in 4 yrs from effectivity
hereof, increase their capitalization or paid-up capital, as
the case may be, to P2M at the rate of 250K every yr.
3. Those not otherwise disqualified by law or other govt regulations to
engage in the recruitment & placement of workers for overseas EENT
Disqualified from Recruitment & Placement of Workers for Overseas EEnt
whether for profit or not
1. Travel agencies & sales agencies of airline companies;
2. Officers/members of the board of any corp or members in a partnership
engaged in the business of a travel agency;
3. Corps & partnerships, when any of its officers, members of the board or
partners, is also an officer, member of the board or partner of a corp or
partnership engaged in the business of a travel agency (interlocking
officers)
4. Persons, partnerships or corps which have derogatory records, such as
but not limited to:
a. Those certified to have derogatory record/info by the NBI or by
the Anti-illegal Recruitment Branch of the POEA;
b. Those against whom probable cause or prima facie finding of guilt
for illegal recruitment or other related cases exists;
c.

Those convicted of cases and/or crimes involving moral turpitude;

d. Those agencies whose licenses have been previously cancelled or


revoked by POEA for violation of RA 8042, PD 442 as amended
and their IRR as well as the Labor Codes IRR

e. Officials/EES of the DOLE or other govt agencies directly involved


in overseas EENT program and their relatives w/in the 4th degree
of consanguinity or affinity; and
f.

Those whose License have been previously cancelled o revoked

Art 29: NON-TRANSFERABILITY OF LICENSE AUTHORITY


1. It may be used only b the one in whose favor it was issued; hence, it
cannot be assigned, conveyed or transferred to any other person/entity.
2. It must be used only in the place stated in the license. Thus, could only
undertake recruitment & placement activities in the region where the
license was granted.
3. The recruitment & placement activities must be undertaken at their
authorized official addresses.
4. Provincial recruitment and/or job fairs may be allowed only when
authorized by POEA in writing.
* Change of ownership of single proprietorship licensed to engage in overseas
EENT shall cause the automatic revocation of the license.
Art 30: BONDS
The Sec of Labor shall promulgate a schedule of fees for the registration of all
applicants for license or authority.
Art 31. BONDS
All applicants for license/authority shall post such cash and surety bonds as
determined by the Sec of Labor including escrow deposits.
Purposes:
1. To guarantee compliance w/ prescribed recruitment procedures, rules &
regulations, and terms & conditions of EENT; and
2. To ensure prompt & effective recourse against such companies when
held liable for applicants/workers claim
Exemption from Garnishment
Cash bond filed by applicants for license/authority is not subj to
garnishment by a judgment creditor of the agency.
Should the bond/deposit in escrow or any part thereof be garnished, the
same should be replenished by the agency w/in 15 days from notice

from the POEA. Failure to replenish the same w/in the said pd shall
cause the suspension of the license
Note: POEA has the power to enforce liability under cash & surety bonds.
Art 32: FEES TO BE PAID BY WORKERS
The applicant can be charged w/ fees only after he has obtained EENT
or has actually commenced EENT
Fees paid shall always be covered w/ the approp receipt clearly showing
the amount paid.
POEA has the power to:
1. Suspend/cancel the license; and
2. Order the refund/reimbursement of such illegally collected fees
Prohibition on Charging Fees
1. Placement fees cannot be collected from a hired worker until he has
signed the EENT contract & shall be covered by receipts clearly showing
the amt paid
2. Manning agencies shall not charge any fee from seafarer-applicants for
its recruitment & placement services. All expenses for hiring seamen shall
be shouldered by foreign shipping principals.
3. No other fees/charges, including processing fees shall be imposed against
any worker.
Art 34 & Section 6 RA 8042: PROHIBITED PRACTICES:
It shall be unlawful for any indiv, entity, licensee or holder of authority:
1. To charge greater amt than that specified in the schedule of allowable
fees (illegal exaction);
2. To furnish any false info in relation to recruitment/EENT (false
information);
3. To give any false notice, testimony, etc. or commit any act of
misrepresentation to secure a license or authority (false statements);
4. To induce or attempt to induce a worker to quit his job in lieu of another

offer unless it is designed to liberate the worker from oppressive terms of


EENT (pirating);

5. To influence of attempt to influence any person/entity no to employ any


worker who has not applied for EENT through his agency (influencing not
to employ);

6. To engage in the recruitment/placement of jobs harmful to public health,


morality or to the dignity of the PH (harmful jobs);
7. To obstruct or attempt to obstruct inspection by the Labor Sec or his
authorized reps (obstruct inspection);
8. To fail to file reports on the status of EENT, placement, etc. and such
other matters as may be required by the Sec of Labor (failure to comply
w/ rules & regulations);
9. To substitute or alter EENT contracts w/o the approval of the Sec of
Labor (alteration of contracts);
10. To become an officer or member of the board of any corp engaged in
the mgt of a travel agency; and
11. To withhold travel docs from applicant workers before departure for
unauthorized monetary considerations (withholding documents).

Art 35: SUSPENSION AND/OR CANCELLATION OF LICENSE OR AUTHORITY


Non License or Non-Holder of Authority any person/corp/entity w/c has not
been issued a valid license or authority to engage in recruitment & placement
by the Sec of Labor, or whose license or authority has been suspended,
revoked or cancelled by the POEA and the Secretary.
Grounds for Revocation of License
1. Incurring an accumulated 3 counts of suspension by an agency based on
final and executor orders w/in the validity period of its license;
2. Violation/s of the conditions of license;
3. Engaging in acts of misrepresentation for the purpose of securing a
license or renewal thereof; and
4. Engaging in the recruitment or placement of workers to jobs harmful to
the public health or morality or to the dignity of the RP
Grounds for Suspension/Cancellation of License
1. The acts prohibited under Art 34;
2. Charging a fee before the worker is employed or in excess of the
authorized amt;

3. Doing recruitment in places outside its authorized area;


4. Deploying workers w/o processing through the POEA; and
5. Publishing job announcements w/o POEAs prior approval
Jurisdiction
The DOLE Sec and the POEA Admin have concurrent jurisdiction to suspend or
cancel a license
Liability of Recruitment Agency
Solidarily liable w/ the foreign principal for unpaid salaries of a worker it
recruited. Before recruiting, the agency is required to submit a doc
containing its power to sue and be sued jointly and solidarily w/ the
principal or foreign-based employer for any of the violations of the
recruitment agreement, and the contracts of employment
Note: The recruitment agency may still be sued even if agency agreement
bet recruitment agency & principal is already severed if no notice of the
termination was given to the EE
Exception to Liability of Recruitment agency
When workers themselves insisted for the recruitment agency to send
them back to their foreign EER despite their knowledge of its inability to
pay their wages
Contract by Prncipal
Even if it was the principal of the manning agency who entered into
contract w/ the EE, the manning agent in the PH is jointly & solidarily
liable w/ the principal

Suability of Foreign Corps


A foreign corp that, thru unlicensed agents, recruits workers in the
country may be suid in and found liable by Ph courts

CH 3: MISCELLANEOUS PROVISIONS (as amended by RA 8042)

Illegal Recruitment any act of (CETCHUP) canvassing, enlisting, transporting,


contracting, utilizing, or procuring workers and includes (CRAP) contract
services, referrals, or advertising, promising for employment abroad, whether
for profit or not, when undertaken by a non-licensee or non-holder of
authority; Provided that any such non-licensee or non-holder of authority who
in any manner, offers or promises for a fee employment abroad to 2 or more
persons shall be deemed so engaged. Also includes the act of reprocessing
workers through a job order that pertains to nonexistent work, work different
from the actual overseas work, or work w/ a different EER whether registered
or not w/ the POEA
It shall likewise include the commission of the ff prohibited acts whether
committed by a non-licensee or non-holder of authority or a licensee or a
holder of authority:
1. Those prohibited practices under Art 34;
2. Failure to actually deploy w/o valid reason as determined by
DOLE;
3. Failure to reimburse expenses incurred by the worker in
connection w/ his documentation & processing for purposes of
deployment, in cases where the deployment does not actually
take place w/o the workers fault; and
4. Recruitment & placement activities of agents or representatives
appointed by a licensee, whose appointments were not

previously authorized by the POEA shall likewise constitute


illegal recruitment.
Elements of Illegal Recruitment
1. The offender is a licensee/non-licensee or holder/non-holder of authority
engaged in the recruitment & placement of workers; and
2. The offender undertakes either any recruitment activities devided under
Art 13 (b) or any prohibited practices in Art 34
Simple Illegal Recruitment Where a person:
1. undertakes any recruitment activity defined under Art 13(b) or any
prohibited practice enumerated under Arts 34 & 38 of the LC; and
2. does not have a license or authority to lawfully engage in the recruitment
& placement of any workers.

Illegal Recruitment in Large Scale further requires a 3rd element:


3. The offense is committed against 3/more persons, individually or as a
group

Illegal Recruitment as Economic Sabotage:


1. When illegal recruitment is committed by a syndicate (when 3/more
persons conspire or confederate w/ one another in carrying out an
unlawful or illegal transaction, enterprise or scheme);
2. When illegal recruitment is committed in a large scale (if committed
against 3/more persons individually or as a group
Consequences of Conviction
1. Automatic revocation of license/authority;
2. Forfeiture of the cash & surety bonds;
3. Conviction for the crime of estafa, if found guilty thereof
Illegal Recruitment vs Estafa
Illegal recruitment is malum prohibitum,
whereas estafa is malum in se (criminal intent necessary for conviction)
a person may be charged & convicted for both
Acts Constituting Estafa
- the accused represented themselves to complainants to have the capacity to
send workers abroad although they did not have any authority or license,
enabling them to obtain placement fee
Venue of criminal action arising from Illegal Recruitment
The complainant may, at his option file at the RTC of the province/city:
a.) where the offense was committed; or
b.) where the offended party resides at the time of the commission of the
offense
Prescriptive Period

Imprisonment Fine

Simple

5 yrs

Economic Sabotage

20 yrs

12-20 yrs
Life

P1-2M

P2-5M

Note: Max penalty if the person illegally recruited is less than 18 y/o or
committed by a non-licensee or non-holder of authority
Absence of receipts evidencing payment, not fatal to prosecutions case for
illegal recruitment as long as the witnesses can positively show through
their respective testimonies that the accused is the one involved in prohibited
recruitment
Liability of Local EEnt agency solidarily liable w/ the foreigh principal for
unpaid salaries of a worker recruited. Before recruiting, the agency is required
to submit a doc containing its power to sue and be sued jointly and solidarily
w/ the principal or foreign-based EER for any of the violations of the
recruitment agreement and the contracts of EEnt
Liability of Company Engaged in Illegal Recruitment may be held as principal,
together his EER, if it is shown that he actively & consciously participated in

illegal recruitment

Issuance of search warrant/warrant of arrest


Art 38 is unconstitutional inasmuch as it gives the Sec of Labor the
power to issue search or arrest warrants
The

exception is in cases of deportation whom the President or the

Commissioner of Immigration may order arrested, following a final roder


of deportation
Note: the Sec of Labor may order closure of illegal recruitment
establishments because it is only administrative & regulatory in nature
TITLE 2: EMPLOYMENT OF NON-RESIDENT ALIENS
Alien Employment Permit (AEP) required for entry into the country for
employment purposes and is issued after determination of the non-availability
of a person in the pH who is competent, able and willing at the time of
application to perform the services for w/c the alien is desired
All foreign nationals who intend to engage in gainful EENT in the PH
shall apply for AEP

Employment Permit Required


1. all foreign nationals seeking admission to the PH for the purpose of
EENT;
2. all non-resident foreign nationals already working in the PH;
3. non-resident foreign nationals admitted to the PH on non-working visas
and who wish to seek EENT; and
4. missionaries or religious workers who intend to engage in gainful EENT.

Note: AEP should be secured regardless of the source of compensation and


duration of the EENT, whether the EENT is part-time or temp

An AEP is issued based on the ff:


1. Compliance by the applicant EER or the foreign national w/ the
substantive & documentary requirements;
2. Determination of DOLE Sec that there is no available Filipino national
who is competent, able and willing to do the job for the EER; and
3. Assessment of the DOLE Sec that the EENT of the foreign national will
redound to national benefit
Note: Understudy Training Program is no longer a requirement in the
issuance of AEP and the EEr has now the option to implement transfer of
technology
Requisite for EENT of Resident Aliens:
Immigrants & resident aliens are not required to secure a working permit.
They are required to secure their Alien Employment Registration Cert
(AERC)
Exemption from Permit
1. All members of the Diplomatic service and foreign govt officials accredited
by and w/ reciprocity arrangement w/ the Ph govt;
2. Officers and staff of international orgs of w/c the PH is a member, and
their legitimate spouses desiring to work in the PH;
3. Foreign nationals elected as members of Governing Board who do not
occupy any other position, but have only voting rights in the corp;
4. All foreign nationals granted exemption by law;

5. Owners & representatives of foreign nationals whose companies are


accredited by the POEA who come to the PH for a limited period and
solely for the purpose of interviewing Filipino applicants for EENT abroad;
6. Foreign nationals who come to the PH to teach, present and/or conduct
research studies in univs and colleges as visiting, exchange or adjunct
professors under formal agreements bet the univs or colleges in the PH
an foreign univs or colleges; or bet the Ph govt and foreign govt;
provided that the exemption is on a reciprocal basis; and
7. Resident foreign nationals.
Grounds for denial of Application of AEP
1. Misrepresentation of facts in the application;
2. Submission of falsified docs;
3. The foreign national has a derogatory record; or
4. Availability of a Fil who is competent, able and willing to the job intended
for the alien.
Grounds for suspension of AEP
1. The continued stay of the foreign national my result in damage to the
interest of the industry of the country; and
2. the EENT of the alien is suspended by the EER or by the order of the
court
Grounds for revocation of AEP
1. Non-compliance w/ any of the requirement/conditions for w/c the AEP
was issued;
2. Misrepresentation of facts in the application;
3. Submission of falsified docs;
4. Meritorious objection or information against the EENT of foreign national
as determined by the Regional Dir;
5. Foreign national has a derogatory record; and
6. EER has terminated the EENT of the foreign national.
Validity of EENT Permit
1 yr,

unless the EENT contract, consultancy services or other modes of

engagement provides otherwise, w/c shall in no case exceed 5yrs

fine for working w/o or with an expired AEP P10K for every year or a
fraction thereof.
Rule on Nationalized Business
GR: Foreigners may NOT be employed in certain nationalized business.
Anti-Dummy Law 2-A prohibits the EENT of aliens in entities engaged in
business whose exercise or enjoyment is reserved only to Fils or to
corporations or assocs whose capital should be at least 60% Fil-owned
Exceptions:
1. Where the Sec of Justice specifically authorizes the EEnt of technical
personnel;
2. Aliens who are members of the Board of directors of corps in proportion
to their allowable participation in the capital of such entities; and
3. Enterprises registered under the Omnibus Investment Code in case of
technical, supervisory or advisory positions, but for a limited pd.
Art 41. PROHIBITION AGAINST TRANSFER OF EENT
1. Aliens shall not transfer to another job or change his EER w/o prior
approval of the Sec of Labor;
2. Non-resident aliens shall not take up EENT in violation of the provisions
of the Code.
Note: Violations of the abovementioned acts will subj the alien to the
punishment in Art 289 & 290 and to deportation after service of sentence

BOOK 2: HUMAN RESOURCES


TITLE 1: NATIONAL MANPOWER DEVT PROGRAM
CH 1: NATIONAL POLICIES & ADMINISTRATIVE MACHINERY FOR THEIR
IMPLEMENTATION
Art 43-56 TECHNICAL EDUCATION AND SKILLS DEVT AUTHORITY (TESDA)
- replaced the National Manpower & Youth Council under RA 7796
Statement of Goals & Objectives
1. To attain international competitiveness;
2. To meet demands for quality middle-level manpower;
3. To disseminate scientific & technical knowledge base;
4. To recognize & encourage the complementary roles of pub & private
institutions; and

5. To inculcate desirable values.


Middle-level Manpower
1. Those who have acquired practical skills & knowledge through formal or
non-formal educ & training equivalent to at least a secondary educ but
preferably a post-secondary educ w/ a corresponding degree/diploma; or
2. Skilled workers who have become highly competent in their trade or craft
as attested by industry.
TITLE 2: TRAINING & EMPLOYMENT OF SPECIAL WORKERS
CH1: TYPES OF SPECIAL WORKERS
1. Apprentice
2. Learner
3. Handicapped
Art 57 STATEMENT OF OBJECTIVES FOR THE TRAINING & EENT OF
SPECIAL WORKERS
1. To help meet the demand of the economy for trained manpower;
2. To establish a national apprenticeship program; and
3. To establish apprenticeship standards for the protection of apprentices.
Art 58: DEFINITION OF TERMS
Apprenticeship practical training on the job supplemented by related theoretical
instruction, for a highly skilled or technical instruction for a period of 3-6
months
Apprentice a person undergoing training for an approved apprenticeable
occupation during an established period assured by an apprenticeship agreemt
Apprenticeable Occupation an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the TESDA (no longer the Sec of Labor)
Apprenticeship Agreement an EENT contract wherein the EER binds himself to
train the apprentice and the apprentice in turn accepts the terms of training
On-the-job training practical work experience through actual participation in
productive activities given to or acquired by an apprentice
Highly technical industries a trade, business, enterprise, industry or other
activity, w/c is engaged in the application of advanced technology

Art 59: QUALIFICATIONS OF APPRENTICES


1. At least 15 y/o, provided that if below 18 y/o, he shall not be eligible for
hazardous occupation;
2. Physically fit for the occupation in w/c he desires to be trained;
3. Possess vocational aptitude and capacity for the particular occupation as
established through appropriate tests; and
4. Possess the ability to comprehend and follow oral & written instructions.
Note: Total physical fitness is not required of the apprentice-applicant unless
it is essential to the expeditious and effective learning of the occupation.
Only physical defects w/c constitute real impediments to effective perf as
determined by the plant apprenticeship committee may dispqualify an
applicant
Art 60: EMPLOYMENT OF APPRENTICES
Qualifications to be met by EER:
1. Only EERS in highly technical industries may employ apprentices; and
2. Only in apprenticeable occupations as determined by the TESDA.
Requisites for a Valid apprenticeship
1. Qualifications of apprentice are met;
2. Apprentice earns not less than 75% of the prescribed minimum salary;
3. Apprenticeship agreemt duly executed & signed;
4. Apprenticeship program must be approved by the TESDA; otherwise the
apprentice shall be deemed a regular EE;
5. Period of apprenticeship shall not exceed 6 months
Note: at the termination of the apprenticeship, the EER is not required to
continue the EENT
There is no valid apprenticeship if:
1. The agreemt submitted to the TESDA was made long after the workers
started undergoing apprenticeship;
2. The work performed by the apprenticeship was different from those
allegedly approved by TESDA;
3. The workers undergoing apprenticeship are already skilled workers;
4. The workers were required to continue undergoing apprenticeship beyond
6mos.

Art 61: CONTENTS OF APPRENTICESHIP AGREEMENT


1. Full name & address of the contracting parties;
2. Date of birth of the apprentice;
3. Name of trade, occupation or job in w/c the apprentice shall be trained
and the dates on w/c such training will begin and will proximately end;
4. Approp number of hrs of OJT w/ compulsory theoretical instruction w/c
the apprentice shall undergo during his training;
5. Schedule of the work processes of the trade/occupation in w/c the
apprentice shall be trained and the approx. time to be spent on the job
in each process;
6. Graduated scale of wages to be paid to the apprentice;
7. Probationary pd of the apprentice during wc either party ay summarily
terminate their agreemt; and
8. A clause that if the EER is unable to fulfill his training oblig, he may
transfer the agreemt, w/ the consent of the apprentice to any other EER
who is willing to assume such oblig.
Working Hrs shall not exceed the max number of hrs prescribed by law, if any,
for a worker of his age and sex. Time spent in compulsorily theoretical
instruction shall be considered hrs of work. An apprentice not otherwise
barred by law from working 8hrs may be requisted by his EER to work
overtime and paid accordingly.
Art 62: SIGNING OF APPRENTICESHIP AGREEMENT
Who signs:
1. The apprentice, if of age, otherwise, by his parent or guardian, or in the
latters absence, by an authorized rep of TESDA; and
2. EER or his duly authorized rep
Art 63: VENUE OF APPRENTICESHIP PROGRAM
1. Within the sponsoring firm, establishment or entity; or
2. Within a DOLE training center or other public training institutions; or
3. Initial training in trade fundamentals in a training center or other
institutions w/ subsequent actual work participation w/in the sponsoring
firm or entity during the final stage of training.

Art 64: SPONSORING OF APPRENTICESHIP PROGRAMS


BY:
1. The plant, shop or premises of the EER or firm concerned if the
apprenticeship program is organized by an indiv EER or firm;
2. The premises of one or several firms designated for the purpose by the
organizer of the program if such organizer is an assoc of EERS, civic
group and the like; and
3. DOLE Training Center or other public training institutions w/ w/c the
TESDA has made approp arrangements.
Art 65-67: VIOLATION OF APPRENTICESHIP AGREEMENT
Art 65: Investigation of violation of apprenticeship agreement
1. Either party to an agreemt may terminate the same after the probationary
pd only for a valid cause.
2. Action may be initiated upon complaint of any interested person or upon
DOLEs own initiative.

Valid Cause to terminate agreement


1. By the EER:
a. Habitual absenteeism in OJT and related theoretical instructions;
b. Willful disobedience of company rules or insubordination to lawful
order of a superior;
c.

Poor physical condition, permanent disability or prolonged illness


w/c incapacitates the apprentice from working;

d. Theft or malicious destruction of company property and/or


equipment
e. Poor efficiency or perf on the job or in the classroom for a
prolonged period despite warnings duly given to the apprentice;
and
f.

Engaging in violence or other forms of gross misconduct inside


the EERs premises

2. By the apprentice:

a. Substandard or deleterious working conditions w/in the EERs


premises;
b. Repeated violations by the EER of the terms of the apprenticeship
agreemt;
c.

Cruel or inhumane treatment by the EER or his subordinates;

d. Personal problem s/c in the opinion of the apprentice shall


prevent him from a satisfactory perf of his job; and
e. Bad health or continuing illness.
Art 66: Appeal
The decision of an authorized agency of the DOLE may be appealed to
the Sec of Labor w/in 5 days form rcpt of the adverse decision.
The decision of the Sec of Labor shall be final & executor.
Art 67 Exhaustion of Administrative Remedies
1. The exhaustion of administrative remedies is a condition precedent to the
institution of action.
2. The plant apprenticeship committee shall have initial responsibility for
settling differences arising out of apprenticeship agreements.
Art 68: APTITUDE TESTS

ANTONIO M. SERRANOVS.GALLANT MARITIME SERVICES, INC.


FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services,
Inc. and Marlow Navigation Co., Inc., under a POEA-approved contract of
employment for 12 months, as Chief Officer, with the basic monthly salary of
US$1,400, plus $700/month overtime pay, and 7 days paid vacation leave per
month.
On the date of his departure, Serrano was constrained to accept a downgraded
employment contract upon the assurance and representation of respondents that
he would be Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make Serrano Chief Officer.
Hence, Serrano refused to stay on as second Officer and was repatriated to the
Philippines, serving only two months and 7 days, leaving an unexpired portion of
nine months and twenty-three

days.

Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was
declared illegal.
On appeal, the NLRC modified the LA decision based on the provision of RA
8042.

Serrano filed a Motion for Partial Reconsideration, but this time he questioned
the constitutionality of the last clause in the 5th paragraph of Section 10 of RA
8042.
ISSUES:
1. Whether or not the subject clause violates Section 10, Article III of the
Constitution on non-impairment of contracts;
2. Whether or not the subject clause violate Section 1, Article III of the
Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a
protected sector.
HELD:
On the first issue.
The answer is in the negative. Petitioners claim that the subject clause unduly
interferes with the stipulations in his contract on the term of his employment and
the fixed salary package he will receive is not tenable.
The subject clause may not be declared unconstitutional on the ground that it
impinges on the impairment clause, for the law was enacted in the exercise of
the police power of the State to regulate a business, profession or calling,
particularly the recruitment and deployment of OFWs, with the noble end in view
of ensuring respect for the dignity and well-being of OFWs wherever they may
be employed.
On the second issue.
The answer is in the affirmative.
To Filipino workers, the rights guaranteed under the foregoing constitutional
provisions translate to economic security and parity.

Upon cursory reading, the subject clause appears facially neutral, for it applies to
all OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis--vis OFWs
with employment contracts of one year or more;
Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;
The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is
violative of the right of petitioner and other OFWs to equal protection.
The subject clause or for three months for every year of the unexpired term,
whichever is less in the 5th paragraph of Section 10 of Republic Act No. 8042
is DECLARED UNCONSTITUTIONAL.
People of the Philippines (petitioner) v Jamilosa (repondent)
GR No. 169076

January 23, 2007

Callejo, Sr.,:
FACTS:

Sometime in the months of January to February, 1996, representing to

have the capacity, authority or license to contract, enlist and deploy or transport
workers for overseas employment, did then and there, willfully, unlawfully and
criminally

recruit,

contract

and

promise

to

deploy,

for

fee

the

herein

complainants, namely, Imelda D. Bamba, Geraldine M. Lagman and Alma E.


Singh, for work or employment in Los Angeles, California, U.S.A. in Nursing
Home and Care Center.
Prosecution presented three witnesses, namely Imelda Bamba, Geraldine
Lagman and Alma Singh.

According to Bamba, she met the appellant on a bus. She was on her
way to SM North Edsa where she was a company nurse.

Appellant introduced

himself as a recruiter of workers for employment abroad. Appellant told her he


could help her get employed as nurse. Appellant gave his pager number and
instructed her to contact him is shes interested. Sometime in January 1996,
appellant fetched her at her office, went to her house and gave him the
necessary documents and handed to appellant the amount of US$300.00 and the
latter showed her a photocopy of her supposed US visa. However, the appellant
did not issue a receipt for the said money. Thereafter, appellant told her to
resign from her work because she was booked with Northwest Airlines and to
leave for USA on Feb, 1996. On the scheduled departure, appellant failed to
show up. Instead, called and informed her that he failed to give the passport
and US visa because she had to go to province because his wife died. Trying
to contact him to the supposed residence and hotel where he temporarily resided,
but to no avail.
Winess Lagman testified that she is a registered nurse. In January 1996,
she went to SM North Edsa to visit her cousin Bamba. At that time Bamba
informed her that she was going to meet to appellant. Bamba invited Lagman to
go with her. The appellant convinced them of his ability to send them abroad.
On their next meeting, Lagman handed to the latter the necessary documents
and an amount of US$300.00 and 2 bottles of black label without any receipt
issued by the appellant. Four days after their meeting, a telephone company
called

her

because

her

number

was

appearing

in

appellants

cell

phone

documents. The caller is trying to locate him as he was a swindler. She became
suspicious and told Bamba about the matter. One week before her scheduled
flight, appellant told her he could not meet them because his mother passed
away.
Lastly, Alma Singh, who is also a registered nurse, declared that she first
met the appellant at SM North Edsa when Imelda Bamba introduced the latter to
her. Appellant told her that he is an undercover agent of FBI and he could fix
her US visa. On their next meeting, she gave all the pertinent documents.
Thereafter, she gave P10,000 to the appellant covering half price of her plane
ticket.

They

paged

the

appellant

through

his

beeper

to

set

up

another

appointment but the appellant avoided them as he had many things to do.
The accused Jamilosa testified on direct examination that he never told
Bamba that he could get her a job in USA, the truth being that she wanted to

leave SM as company nurse because she was having a problem thereat. Bamba
called him several times, seeking advices from him. He started courting Bamba
and went out dating until latter became his girlfriend. He met Lagman and Singh
thru Bamba. As complainants seeking advice on how to apply for jobs abroad,
lest he be charged as a recruiter, he made Bamba, Lagman and Singh sign
separate certifications, all to effect that he never recruited them and no money
was involved. Bamba filed an illegal recruitment case against him because they
quarreled and separated.
RTC rendered judgment finding accused guilty beyond reasonable doubt
of illegal recruitment in large scale.
ISSUE: Illegal Recruitment in a large scale?
HELD: Recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers, and includes
referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not. Provided, That any person or entity which, in
any manner, offers or promises for a fee employment to two or more persons
shall be deemed engaged in recruitment and placement.
Illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for profit or
not, when undertaken by a non-licensee or non-holder of authority. Provided,
That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed
so engaged.
To prove illegal recruitment in large scale, the prosecution is burdened to
prove three (3) essential elements, to wit: (1) the person charged undertook a
recruitment activity under Article 13(b) or any prohibited practice under Article 34
of the Labor Code; (2) accused did not have the license or the authority to
lawfully engage in the recruitment and placement of workers; and (3) accused
committed the same against three or more persons individually or as a group.
As gleaned from the collective testimonies of the complaining witnesses which
the trial court and the appellate court found to be credible and deserving of full
probative weight, the prosecution mustered the requisite quantum of evidence to
prove the guilt of accused beyond reasonable doubt for the crime charged.
Indeed, the findings of the trial court, affirmed on appeal by the CA, are

conclusive

on

this

Court

absent

evidence

that

the

tribunals

ignored,

misunderstood, or misapplied substantial fact or other circumstance.


The failure of the prosecution to adduce in evidence any receipt or document
signed by appellant where he acknowledged to have received money and
liquor does not free him from criminal liability. Even in the absence of money
or other valuables given as consideration for the "services" of appellant, the
latter is considered as being engaged in recruitment activities.
It can be gleaned from the language of Article 13(b) of the Labor Code
that the act of recruitment may be for profit or not. It is sufficient that the
accused promises or offers for a fee employment to warrant conviction for
illegal recruit
CONDITIONS OF EMPLOYMENT
WORKING CONDITIONS & REST PERIODS
Art 82. COVERAGE

a. ALL employees in all establishments & undertakings whether for


profit or not
b. Such standards apply only if there exists EER-EE relationship

EXCEPTIONS on Conditions of EEnt


i.

Government employees

EES of govt agencies & govt

corps
ii.

Managerial employees those whose primary duty


consists of the mgt of the establishment in w/c they are
employed or of a dept/subd thereof, and to other
officers/members of the managerial staff

- under the direct supervision of the EER, and assist in the planning,
organizing, staffing, directing controlling, communicating and in making
decisions in attaining the companys set goals & objectives
a. Includes supervisiors (only as regards Art 82)
likewise responsible for the effective & efficient
operation of their respective depts
iii.

Field personnel non-agricultural employees who


regularly perform their duties away from the principal
place of business or branch office of the employer and
whose actual hours of work in the field cannot be
determined w/ reasonable certainty

c.

those whose performance of their job/service is not supervised by the


ER or his rep, the workplace being away from the principal office and
whose hours & days of work cannot be determined w reasonable
certainty; hence they are paid specific amount for rendering specific
service or performing specific work.
a.

drivers that are required to be at specific places at


specific times are not field personnel

b.

in case of fishermen although performing non-agri work


away from the office, the fact that they have no choice but
to remain on board the vessel, they are still under
constant supervision by the ER thru the vessels
patron/master

iv.

Employers family members who are dependent on him


for support

v.

Domestic helpers

house personnel hired by a ranking company official, a foreigner, but


paid for by the company itself, to maintain a staff house provided for the
official regular EE
vi.

Persons in the personal service of another

vii.

Workers paid by result per piece/per task

- laborer/EE w/ no fixed salary, wag, or renumeration but receiving a


compensation from his ER an uncertain & variable amount depending
upon the work done or the result of said work (piece work), irrespective
of the time employed
EER-EE Relationship is not dependent upon the agreement of the parties. The
characterization by law prevails over that in the contract.

the existence of

an EER-EE relshp is not a matter of stipulation but a question of law


d. depends on the facts of each case
Core/Non-core Jobs
e. EER-EE relship may comver core/non-core activities of the EERs
business.
f.

The kind of work is not the definitive test of whether the worker
is an EE or not.

Employer any person, natural or juridical, domestic or foreign, who carries on


in the PH any trade, business, industry, undertaking or activity of any kind
and uses the services of another person who is under his order as regards
employment
Employee any person who performs services for an EER in w/c either or both
mental & physical efforts are used and who receives compensation for such
services, where there is an EER-EE relationship
TESTS OF EENT Relship:
i.

Right of Control Test where the person for whim the


services are performed reserves a right to control not

only the end to be achieved but also the means to be


sued in reaching such end.

Plus: the courts added the existing economic conditions prevailing bet the parties
(like payrolls) in determining the existence of EER-EE Relship.
ELEMENTS OF EE-EER RELSHIP (Four-fold Test)
i.
ii.
iii.
iv.

the selection and engagement of the EE;


the payment of wages;

the power of dismissal;

the employers power to control the EE w/ respect to the

means & methods by w/c the work is to be


accomplished (most important)

Independent contractors can employ others to work & accomplish contemplated


result w/o consent of contractee, while EE cannot substitute another in his
place w/o consent of his EER.
2. The Economic Dependence Test observes the need to consider the existing
conditions bet the parties
Best approach: Apply the two-tiered test involving:
1. the putative employers power to control the EE w/ respect to the means
and methods by w/c the work is to be accomplished; and
2. the underlying economic realities of the activity or relationship

a. the extent to w/c the services performed are an integral part of


the employers business;
b. to the extent of the workers investment in equipment and
facilities;
c.

the nature and degree of control exercised by the employer;

d. the workers opportunity for profit and loss;


e. the amount of initiative, skill, judgment or foresight required for the
success of the claimed independent enterprise;
f.

the permanency and duration of the relationship between the


worker and the employer; and

g. the degree of dependency of the worker upon the employer for


his continued employment in that line of business
Standard of economic dependence whether the worker is dependent on the
alleged employer for his continued employment in that line of business
Evidence of employment
i.

id card

ii.

vouchers of salaries

iii.

sss

iv.

memorandum

registration

Absence of EEs name in payroll does not mean he is not an EE


Mode of Compensation not a test of EEnt status; pakyaw basis does not
mean workers are independent contractors
Independent contractors- generally rely on their own resources
* Unions and unregistered associations can be EERs of the persons who work
for them
GR: An employee is not a contractor; a contractor is not an employee.
GR: While EE-ER relationship exists bet a job contractor and the workers that
he hires, no such relationship exists bet those workers and the job contractee,
the contractors client.
Labor-only contractor serve as an agent of the true employer by merely
recruiting & supplying people (prohibited).

Conditions of Employment laid down by law or by contract concluded


individually w/ an EE or collectively w/ a group
g. may also arise from established practice in the enterprise
2 Kinds of Employment Conditions
a. Statutory provided for by law
b. Voluntary initiated by the ER unilaterally or by contractual
stipulation
An employer is free to regulate, accdg to his own discretion & judgment, all
aspects of EENT, including hiring, work assignments, working methods, time,
place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of EES, work supervision,
lay-off of workers and discipline, dismissal and recall of workers.
h. Employers have the right to exercise management prerogatives to
strengthen his business competitiveness

unlawful/ unjust/unfair;

so long as they are exercised in GF for the advancement of his


interest and not for the purpose of defeating/circumventing the Rs
of the EES
a. May devise & implement new salary scales applicable only
to future EES. (salary distortion)
Members/Officers of the Managerial Staff: Duties & Responsibilities
1. Their primary duty consists of the performance of
work directly related to mgt policies of their ER;
2. They customarily & regularly exercise discretion and
independent judgment;
3. They regularly & directly assist the managerial EE
whose primary duty consists of the mgt of a dept
of the establishment in w/c they are employed;
4. They execute, under gen supervision, work along
specialized/technical lines requiring special training,
experience or knowledge;
5. They execute, under gen supervision, special
assignments and tasks; and they do not devote
more than 20% of their hours worked in a workweek to activities w/c are not directly & clearly
related to the performance of their work

Art 83. NORMAL HOURS OF WORK


i.

Purpose of

shall not exceed 8 hrs/day

8-hr Labor law not only to safeguard the health & welfare of the

laborer/EE, but in a way to minimize unemployment by forcing ERs, in cases


where more than 8-hr operation is necessary, to utilize different shifts to
laborers/EEs working only for 8 hrs each
Part-time Work not prohibited. (What the law regulates is work exceeding 8hrs)
GR: Wage & benefits of a part-timer are in proportion to the number of hrs
worked.
Work hrs of Health Personnel
Health personnel shall include, but not limited to, resident physicians, nurses,
nutritionists, dieticians, pharmacists, social workers, lab technicians,
paramedics, psychologists, midwives, attendants, and all other hospital & clinic
personnel like medical secretaries
Resident physicians customary practice to work for 24 hrs a day violates the
limitations in Art 83.

when they are under training program/agreement bet

the residents and the hospital accredited by the govt


Hospital EEs are entitled to a full weekly salary w/ apid 2 days off if they
have completed the 40hr/5day workweek (7days pay for 5 days work)
Health personnel in Govt service covered by RA 7305
12-hr Workshift with Overtime

- through a contract freely entered into, workshift may exceed 8hrs w/


corresponding overtime pay.

Art 84. HOURS WORKED shall include:


1. all time during w/c an EE is required to be on duty or to be at a
prescribed workplace, and
2. all time during w/c an EE is suffered or permitted to work
Rest periods of short duration during work hrs shall be counted as hours
worked
Principles in Determining Hours Wrked
1. All hrs are hrs worked w/c the EE is required to
give to his ER, regardless of WON such hrs are
spent in productive labor or involve physical/mental
exertion;
2. An EE need not leave the premises of the
workplace in order that his rest period shall not be
counted, it being enough that he stops working,
may rest completely and may leave his workplace,
to go elsewhere, whether w/in or outside the
premises of his workplace;
3. If the work performed was necessary, or it
benefited the ER, or the EE could not abandon his
work at the end of his normal working hrs because
he had no replacement, all time spent for such
work shall be considered as hrs worked, if the
work was w/in the knowledge of his ER/immediate
supervisor;
4. The time during w/c an EE is inactive by reason of
interruptions in his work beyond his control shall be
considered time either if the imminence of the
resumption of work requires the EEs presence at
the place of work or if the interval is too brief to

be utilized effectively & gainfully in the EEs own


interest.

Pre/Postliminary Activities
j.

Preliminary (before work) and postliminary (after actual work)


activities are deemed performed during working hrs, where such
activities are controlled/required by the ER and are pursued
necessarily & primarily for the ERs benefit

Waiting Time
k.

whether waiting time constitutes working time depends on the


circumstances on each particular case

l.

controlling factor is WON time spent in idleness is so spent


predominantly for the ERs benefit or for the EEs
1. Engaged to Wait waiting time spent by EE shall
be considered as working time if waiting is
considered an integral part of his work or if the EE
is required/engaged by an ER to wait
2. Waiting to Engage idle time is not work time

Working While Eating


GR: EE must be completely relieved from duty for the purpose of eating regular
meals. The meal time is not compensable if he is completely free from duties
during his meal period even though he remains in the workplace.
EE is not relieved if he is required to perform his duties whether
active/inactive, while eating (ex. Stand-by for emergency work)
Working While Sleeping
GR: Sleeping time may be considered working time if it is subj to serious
interruption or takes place under conditions substantially less desirable than
would be likely to exist at the EEs home.
if there is an opportunity for comparatively uninterrupted sleep under fairly
desirable conditions, event though EE is required to remain on or near the
ERs premises and must hold himself in readiness for a call to action ENT.

m. depends upon the express/implied agreement of the parties, or in


absence of an agreement, upon the nature of the service and its
relation to the working time.
On Call
n. although EE can rest completely and may not be actually at work,
if they are required to be in their place of work before/after the
regular working hrs and w/in the call of their ERs, the time they
stay in the place of work sould not be discounted from their
working hrs
o. EE cannot use the time effectively for his own purposes is
working while on call.
p. Not on call: EE is not required to remain on the ERs premises
but is merely required to leave work at his home or w/ company
officials where he may be reached
q. Public health workers On call status refers to a condition when
public health workers are called upon to respond to urgent or
immediate need for health/medical assistance or relief work during
emergencies such that he/she cannot devote the time for his/her
own use.
With Cellular phone or Other Contact Device
r.

if EE is kept w/in reach through a cell phone, he is NOT on


call

Travel Time time spent walking, riding, or traveling to/from place of work
a. Travel from home to work not worktime

when EE receives an

emergency call outside his regular working hrs and is required to


travel to his regular place of business or some other
worksite working time
b. Travel that is all in a days work time spent by an EE in travel
as part of his principal activity
c.

hrs worked

Travel away from home travel that keeps an EE away from home
overnight

worktime when it cuts across the EEs workday

Lectures, Meetings and Training Programs not worktime if:

a. Attendance is outside of the EEs regular working hrs;


b. Attendance is in fact voluntary; and
c.

The EE does not perform any productive work during such


attendance.

* must meet all criteria


Grievance Meeting time spent in adjusting grievance bet ER & Ee during the
time the EEs are required by the ER to be on the premises
if a bona fide union is involved

hrs worked

depends on the CBA or the custom

practice under the CBA


Semestral Break hrs worked by teachers in private schools
WORK HOURS OF SEAMEN
s.

they need not leave the boat in order that his rest period not be
counted

Requisites for non-counted rest period


a. he ceases to work
b. may rest completely
c.

leave or may leave at his will the spot where he actually stays
while working, to go somewhere else, whether w/in or outside the
ship

HOURS WORKED: EVIDENCE & DOUBT


GR: When an ER alleges that his EE works less than the normal hrs of ENT as
provided for in law, he bears the burden of proving his allegation w/ clear &
satisfactory evidence

Art 85. MEAL PERIODS


t.

must be at least 60minutes time-off for regular meals

GR: not compensable


Exceptions:
1. where the lunch period or mealtime is predominantly spent for the ERs
benefit

(considered overtime) ;or

2. where it is less than 60 minutes (but not less than 20minutes) must be
with full pay when:
1. where work is non-manual (does not involve strenuous physical exertion);
2. where the establishment regularly operates not less than 16hrs a day
3. in cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss
w/c the ER would otherwise suffer;
4. where the work is necessary to perevent serious loss of perishable goods
c.

If less than 20 minutes it becomes only a rest period and is


thus considered work time

Note: Meal periods during overtime work is not given to workers performing
OT bcoz OT is usually for a short period

Shortened Meal Break Upon EEs request


u. EEs may request that their meal pd be shortened so that they can leave
work earlier

not compensable

Requisites
1. EEs voluntarily agree in writing and waive their OT pay;
2. No diminution in the salary and other fringe benefits of the EEs already
existing;
3. Work is not physically strenuous and they are provided w/ adequate coffee
breaks in the morning & afternoon;
4. Value of benefits is equal to the compensation due them;
5. OT pay will become due and demandable if they are permitted/made to work
beyond 4:30 pm; and
6. The arrangement is of temporary duration.
Note: The 8-hr work period does not include the meal break. EEs may leave
the company premises as long as they return to their posts on time.
Art 86 NIGHT SHIFT DIFFERENTIAL

- at least 10% of his regular wage for each hr of work performed bet 10PM
and 6AM
- given as premium for working at a time for sleep & rest

in addition to the exceptions in Art 82, NSD is n/a to EEs of retail and
service establishments regularly employing 5 employees and below

if work done from 10pm-6am is OT work, then the 10% night shift
differential should be based on the OT rate

- not waivable (founded on public policy)


- the receipt of OT pay will not preclude payment of NSD pay
- burden of proof of payment of NSD - ER
Art 87. OVERTIME WORK
Overtime Pay additional compensation for work performed beyond 8hrs w/in
the workers 24-hr workday regardless whether the work covers 2 calendar
days
Basis cash wage only, w/o any deduction
Rates
1. OT on a regular work day at least 25% thereof
2. OT on a holiday or rest day at least 30% thereof
* CBA may stipulate higher OT pay rate
Actual Work Days as Divisor

PALEA v PAL (1976) PALEA & PAL Supervisors Assoc (PALSA),

commenced an action v PAL in the CIR praying that the latter be ordered to
revise the method of computing the basic daily & hourly rates of its monthlysalaried EEs and necessarily to pay them their accrued salary differentials
PALs Formula:
monthly salary x 12/365 days in a yr = Basic daily rate
basic daily rate/8 Basic hourly rate
Proposed Formula:
Monthly salary x 12/actual working days = BDR
BDR/8 = BHR

Paid Unworked days of a monthly-paid EE

- ER may stipulate that EEs monthly salary constitutes payment for all the
days of the month incl rest days & holidays if when converted into its
daily equivalent would still meet minimum wage

legal

How work day is counted


A day the 24-hr period w/c commences from the time the EE regularly starts
to work
- regardless of the day of the week or hr of the day
- any work in excess of the 8hrs w/in the 24-hr pd is considered as OT
regardless of whether the work covers 2 calendar days
- any work in excess of 8 hrs not falling w/in the 24-hr pd is not considered
as OT work
a. Broken Hrs of Work the minimum normal working hrs

need not be

continuous to constitute as the legal working day of 8 hrs as long as the 8


hrs is w/in a work day
b. Work in Different Shifts in a Work day work in excess of 8hrs w/in a work
day is considered as OT regardless of whether this is performed in a work
shift other than at w/c the EE regularly works
EEs shift is 10pm-6am. He is asked to take a shift of another EE who is
absent from 2pm-10pm (his regular work day would be from 10pm-10pm)
the 2nd shift is considered OT because it is still w/in his work day

GR: An express instruction from the ER to the EE to render OT work is not


required for the EE to be entitled to OT pay. It is sufficient that the EE is

permitted or suffered to work. Neither is an express approval by a supervisor


needed.

: On rest days & holidays, written authority after office hrs is required for the
EE to be entitled to compensation

A verbal instruction to render OT work prevails over a memorandum


prohibiting such work.
OT claim is not justified for days where no work was required and no
work could be done (i.e. brownout, machine repair, lack of rawmats)
OT Work of Seamen whether or not the sailors are entitled to OT pay is not
whether they were on board and cannot leave ship beyond the regular 8

working hrs a day, but whether they actually rendered service in excess of 8
hrs

OT work must be proven by factual & legal basis


Action to Recover Compensation
- estoppel & laches cannot be invoked against EEs bcoz that would be
contrary to the spirit of the 8-hr Labor Law, under w/c the laborers
cannot waive their R to extra compensation
- OT pay in arrears retroacts to the date when services were actually
rendered
GR: Waiver or quitclaim not a waiver of OT pay. Any stipulation in the
contract that the laborer shall work beyond the regular 8 hrs w/o addtl
compensation for the extra hrs is contrary to law and null and void
Waiver of OT Pay
GR: OT pay cannot be waived expressly or impliedly. Any contrary stipulation is
null and void.
Exeptions
1. When the waiver is made in consideration of benefits & privileges w/c may be
more than what will accrue to them in OT pay; and
2. Compressed workweek

(CWW) the number of work days is reduced but the

number of work hrs in a day is increased to more than 8, but no OT pay


may be claimed.
Requisites of Compressed Workweek to be valid:
1. The scheme is expressly and voluntarily supported by majority of the EEs
affected;
2. In firms using substances, or operating in conditions that are hazardous to
health, a certification is needed from an accredited safety org or the
firms safety committee that work beyond 8hrs is w/in the limits/levels of
exposure set by DOLEs occupational safety & health standards;
3. The DOLE Regional Office is notified.
Effects of a Compressed Workweek
1. Unless there is a ore favorable practice existing in the firm, work
beyond 8hrs will not be compensable by OT premium, provided the

total number of hrs worked per day shall not exceed 12hrs. (Work
performed beyond 12hrs a day or 48hrs a week

OT)

2. EEs under a CWW scheme are entitled to meal periods of at least


60 minutes. The R of EEs to restday, holiday pay, rest day pay or
leave in accdance w/ law/CBA/company practice shall not be impaired.
3. Adoption of the CW scheme shall in no case result in diminution of
existing benefits. Reversion to the normal 8-hr work day shall not
constitute diminution of benefits. (Reversion is considered a legitimate
exercise of mgt prerogative, provided that the ER shall give the EEs
prior notice of such reversion w/in a reasonable period of time.
* EE may validly waive the R to OT under a CWW program, provided he
did so voluntarily, w/ full understanding of what he was doing and in
consideration for the quit claim is credible & reasonable.
Note: EEs promoted from rank-and-file to supervisory lose their OT pay and
other benefits under Art 82-96
Illustrations of OT Computations
1. Regular Workdays
Reg Basic Wage + 25% thereof
2. Legal or Regular Holidays
Holiday Wage Rate (200%) + 30% thereof
3. Rest Days or Special Holidays
Rest day/Special Holiday wage rate (130%) + 30% thereof
4. Scheduled Rest Day w/c is also a Special Holiday
Rest day & special holiday wage rate (150%) + 30% thereof
5. Scheduled rest day w/c is also a legal or regular holiday
Rest day & legal holiday wage rate (260%) + 30% thereof
6. Double holiday
Double holiday wage rate (400%) + 30% thereof
EE will receive 200% of his regular daily wage when both regular
holidays fall on the same day and he does not work (Law provides
that he shall get his regular daily wage of each regular holiday)
100% of Araw ng Kagitingan, 100% Good Friday. If he works on
that day, he gets 400%
OT pay integrated in Basic Salary (composite/package pay/all-inclusive salary)
not illegal nor unusual for executives or managers

But for non-managerial EEs, there must be:


1. A clear written agreement
2. Agreed legal wage rate and OT pay computed separately are equal or
higher than the separate amounts legally due
FLEXIBLE WORK ARRANGEMENTS
- alternative work arrangements or schedules other than the traditional or
standard work hrs, workdays or workweek. ERs may adopt them after
due consultation w/ EEs, taking into acct the adverse consequence of the
situation on the performance and financial condition of the company.
- Its effectivity and implementation shall be temporary.
- Should be threshed out by the ER and EE
- DOLE Reg Ofc must be notified prior to implementation
- In addition to CWW, the FWAs include:
1. Reduction of workdays where normal workdays per week are
reduced but should not last for more than 6 months
2. Rotation of workers where the EEs are rotated/alternately
provided work w/in the workweek
3. Forced leave EEs are required to go on leave for several days
or weeks, utilizing their leave credits if there are any
4. Broken-time schedule the work schedule is not continuous but
the number of hrs w/in the day or week is not reduced
5. Flexi-holiday schedule Ees agree to avail themselves of the
holidays at some other days, provided that there is no diminution
of existing benefits as a result of such arrangement
Art 88. UNDERTIME NOT OFFSET BY OVERTIME

- Whether on the same day or any other day is prohibited by law


- Permission given to the EE to go on leave o some other day of the week
shall not exempt ER from paying the addtl compensation

Reason: EEs hourly rate is not equivalent to OT rate


Proper method: Deduct the UT from the accrued leave, if any
Art 89. EMERGENCY OT WORK

GR: EEs cannot be compelled to render OT work against their will


Exceptions:

1. In times of war or any national or local emergency declared by


Congress/Chief Exec;
2. To prevent loss or damage to life or property due to emergencies and
force majeure;
3. When there is urgent work needed on machines & equipment;
4. When work is necessary to preserve perishable goods;
5. To prevent serious obstruction or prejudice to the business or operations of
the ER; and
6. When it is necessary to avail of favorable weather or environmental
conditions where performance or quality f work is dependent thereon.
Art 90. COMPUTATION OF ADDTL COMPENSATION
cash wage excludes noncash value of facilities

- if only cash wage is the basis of OT rate, it is unfair to the worker


because as defined in Art 97, wage includes the value of facilities,
hence the value of facilities should not be excluded when computing OT
pay
-

OT rate should be based on the regular wage (include the value of


facilities)

Ch. 2 WEEKLY REST PERIODS


Art 91. RIGHT TO WEEKLY REST DAY

Duration: at least 24 consecutive hrs after every 6 consecutive normal work days
- all establishments & enterprises may operate or open for business on Sundays
& holidays provided that the EEs are given the weekly rest day & the
benefits provided under the law
Who Determines: The ER determines and schedules the weekly rest period subj
to the ff:
1. CBA;
2. Rules & regulations issued by the Sec of Labor; and
3. EEs preference based on religious grounds. (When such preference will
prejudice the business of the ER, and no other remedial measures are

available, the weekly rest pd may be scheduled to meed the EEs choice
for at least 2 days a month
Art 92. WHEN THE ER MAY REQUIRE WORK ON A REST DAY
GR: The ER may not require the EEs to work on a rest day
: Exceptions
1. In cases of urgent work to be performed on the machinery, equipment or
installation;
2. To prevent loss or damage to perishable goods;
3. In case of actual/impending emergencies caused by force majeure to
prevent loss of life and property, or imminent danger to public safety;
4. Where the nature of work requires continuous operations and the stoppage
of work may result in irreparable injury/loss to the ER;
5. In the event of abnormal pressure of work due to special circumstances,
where the ER cannot ordinarily be expected to resort to other measures;
and
6. Under the circumstances analogous to the foregoing as determined by the
Sec of Labor.
Note: The failure to work during an EEs rest day does not justify disciplinary
sanction of outright dismissal, more so when justifiable grounds exist for the
said failure.
Note: When an EE volunteers to work on his rest day under other circumstances,
he may be allowed to do so, provided he expresses such desire in writing
and he is paid the addtl compensation for working on his rest day
Art 93. COMPENSATION FOR REST DAY, SUNDAY OR HOLIDAY WORK
Premium pay or Differential compensation addtl compensation for work
rendered by the EE on days when normally he should not be working such
as special holidays and weekly rest days
Note: This article does not prohibit a CBA stipulation for higher benefits
Formulas to Compute Wages on Holidays
1. For REGULAR HOLIDAYS
a. If it is an EEs regular workday
i. If unworked 100%

ii. If worked

1. 1st 8hrs 200%


2. excess of 8hrs Plus 30% of hourly rate of said
day

b. if it is an EEs rest day


i. if unworked 100%
ii. if worked

1. 1st 8hrs plus 30% of 200%


2. excess of 8 hrs plus 30% of hourly rate of said
day

2. For declared SPECIAL DAYS such as Special Non-Working Day, Special


Public Holiday, Special National Holiday and nationwide special days
a. If unworked no pay, unless there is a favorable company policy,
practice or CBA granting payment of wages on special days even
if unworked
b. If worked

i. 1st 8hrs plus 30% of the daily rate of 100%

ii. excess of 8hrs plus 30% of hourly rate on said day


c.

Falling on the EEs rest day and if worked

i. 1st 8hrs plus 50% of the daily rate of 100%

ii. excess of 8hrs plus 30% of hourly rate on said day


3. For those declared as SPECIAL WORKING HOLIDAY
- for work performed an EE is entitled only to his basic rate
List of Special Days
Proc. 459
A. Regular Holidays
1. New Years Day
2. Maundy Thursday
3. Good Friday
4. Araw ng Kagitingan
5. Labor Day
6. Independence Day
7. National Heroes Day
8. Bonifacio Day
9. Christmas Day

10. Rizal Day


B. Special (Non-working)Days
1. Black Saturday
2. Ninoy Aquino Day
3. All Saints Day
4. Nov 2
5. Dec 24
6. Last Day of the Year
C. Special Holiday (for all schools)
EDSA Revolution Anniversary
D. Local Holiday
Those declared by law or ordinance
Regular Holiday

Special Day

Compensable even if

Not compensable if

unworked subj to certain

unworked

conditions
Limited to the list

Not exclusive since a

enumeration

law or ordinance may


provide for other special
holidays

Rate is 200% of the

Rate is 130% of the

regular rate if worked

regular wage if worked

Addtl Compensation for Work on a Rest day, Sunday or Holiday


Day

Rate of Addtl
Compensation

Work on a scheduled

30% of regular wage

rest day
No regular workdays

30% of regular wage for

and no specific rest

work performed on

days

Sundays & holidays

Work on Sunday when

30%

it is his established rest


day
Work on special holiday

30%

Work on special holiday

50%

falling on scheduled rest


day
Work on regular holiday

260% of regular wage

falling on scheduled rest


day

Art 94. RIGHT TO HOLIDAY PAY

Holiday pay a days pay given by law to an EE even if he does not work on
a regular holiday.
- It is limited to the regular/legal holidays listed by law.
- EE should not have been absent w/o pay on the working day preceding
the regular holiday
Note: In addition to the

Exceptions in Art 82, Holiday pay is n/a to EEs of

retail and service establishments regularly employing 10 workers or less


Rule on Compensability compensable whether worked or unworked subj to
certain conditions.
Legal holiday falling on a Sunday does not create an addtl oblig for
the ER to pay extra, aside from the usual holiday pay to its montly
paid EEs
Holiday pay of Monthly paid EEs
GR: for the company w/ a 6-day working schedule, the divisor 314 already
means that the legal holidays are included in the monthly pay of the EE. The
divisor is arrived at by subtracting all Sundays from the total number of
calendar days in a yr
GR: for a company w/ a 5-day working schedule, the divisor 261 means that the
holiday pay is already included in the montly salary of the EE
Holiday pay of Teaching Personnel Paid per Lecture Hr
- not entitled to payment of holiday pay since they are paid by the hrs
worked; and no class days means no work for them

- entitled to their regular hourly rate on days declared as special holidays or


when classes are called off or shortened on acct of typhoons, floods
rallies, and the like
Double Holiday Pay (Araw ng Kagitingan & Good Friday on the same day)
1. 200% of the basic wage
a. entitled even if said holiday is unworked
b. to give EE only 100% would reduce the number of holidays under
the law
2. 400% if he worked on 2 regular holidays falling on the same day
3. 520% if he worked on 2 regular holidays falling on the same day and at
the same time falling on a scheduled rest day
Single Holiday Rule: provided that the EE
1. worked;
2. was on leave w/ pay; or
3. was on authorized absence on the day prior to the regular holiday.
Successive Regular Holidays: to be entitled to 2 successive holidays, the EE
must:
1. be present on the day immediately preceding the first holiday; or
2. be on leave w/ pay.
Otherwise, he must work on the first holiday to be entitled to holiday
pay on the second regular holiday

Effects of Business Closure on Holiday Pay


If regular holiday occurs during:
1. Temporary or periodic shutdown and temporary cessation of work of an
establishment

the regular holidays falling w/in the period shall be

compensated.
2. Cessation of operation of an enterprise due to business reverses as
authorized by the Sec of Labor

the regular holiday may not be paid by

ER
Ch 95. RIGHT TO SERVICE INCENTIVE LEAVE (SIL)

Concept: 5 days leave w/ pay for every EE who has rendered at least 1 yr of
service
1 yr of service service w/in 12 months, whether continuous or broken,
reckoned from the date the EE started working including authorized absences
and paid regular holidays unless the number of working days in the
establishment as a matter of practice/policy is less than 12 months
SIL is N/A to the ff:
1. EEs of the Govt
2. Domestic helpers

and persons in the personal service of another;

3. Managerial EEs
4. Field personnel whose performance is unsupervised or those who are paid
a fixed amt for performing work irrespective of the time consumed in the
performance thereof
5. Those already enjoying the said benefits
6. Those already enjoying vacation leave w/ pay for at least 5 days;
7. Those employed in establishments regularly employing less than 10 EEs
* EEs engaged on task/contract basis or paid purely commission basis are
not automatically exempted from the SEL unless they fall under the
classification of field personnel.
Conversion to Monetary Equivalent
SIL is COMMUTABLE or convertible to cash if not used or exhausted at the end
of the yr
Basis of conversion: the salary rate at the date of commutation
ALSO Entitled to SIL
1. EE illegally dismissed
2. Part-time workers
3. Piece-rate workers:
a. Working inside the premises of ER & thus are under direct
supervision of the ER

entitled

b. Working outside the premises of the ER whose hours of work


cannot be ascertained w/ reasonable certainty and thus are not
under the direct supervision of the ER

not entitiled

EEs w/ salaries above Min Wage: the difference bet the min wage and the

actual salary received by the EEs cannot be deemed as their 13th month pay
and SIL pay

Vacation & Sick Leave


- not statutorily required but is a matter of management discretion or CBA
GR: Benefits are non-cumulative and non-commutative; must be enjoyed by
the EE w/in 1yr otherwise forfeited
: when the labor law contract or the established practice of the ER provides
otherwise

SIL

VL/SL

Mandatory Art 95

Voluntary grant (ERs


policy or CBA)

Intended to alleviate the

Intended to afford a

economic condition of

laborer a chance to get

the workers for it acts

a much needed rest to

as replacement for

replenish his energy

regular income that

and renew his efficiency

would not be earned


during such instance
Cannot be waived

Must be demanded in
its opportune time;
silence is waiver

Commutable

Not commutable

Parental (Solo-parent) Leave


- not more than 7 working days every yr
- rendered to an EE who has rendered service at least 1yr
- no ER shall discriminate against any solo parent EE w/ respect to terms &
conditions of ENT on acct of his/her status
- a change in the status/circ of the parent claiming benefits under this Act
such that he/she is no longer alone w/ responsibility of parenthood shall
terminate his/her eligibility for these benefits

- not convertible to cash unless otherwise agreed


Battered woman leave
- female EE who is a victim of violence is entitled to paid leave of 10 days
in addition to other paid leaves.
- Extendible when necessity arises
- EE has to submit certification from the punong brgy, kagawad, prosecutor
or clerk of court than an action under RA 9262 has been filed and is
pending
Maternity & Paternity Leave
Art 96. SERVICE CHARGES

Concept: All service charges collected by hotels, restaurants, and similar


establishments shall be distributed as follows:
1. 85% for all covered EEs to be equally distributed among them
2. 15% for disposition by mgt to answer for losses and breakages and
distribution to EEs receiving more than P2k amonth at the discretion of
the mgt in the latter case
Coverage: only to hotels, restaurants, and similar
- all EEs are covered, regardless of their position, designation, ENT status,
irrespective of the method by w/c their wages are paid,

except

managerial EEs
Distribution distributed to paid EEs at least once every 2 weeks or 2x a month
at interval of at least 16 days
Rule in case of abolition
- in case the service charge is abolished, the share of the covered EEs
shall be considered integrated in their wages
- the basis of the amt to be integrated shall be the average share of each
EE for the past 12 months immediately preceding the abolition
Pooled Tips
- where an establishment does not collect service charges but has a
practice/policy of pooling tips given voluntarily by its customers, the pooled
tips should be monitored, accounted for and distributed in the same manner
as the service charges

Title 2 WAGES
Ch 1
Art 97. Definitions

Person an individual, partnership, assoc, corp, business trust, legal rep, or any
organized group of persons

Employer any person acting directly/indirectly in the interest of an ER in


relation to an EE & shall include the Govt & all its branches, subd, &
instrumentalities, all govt-owned/-controlled corps & institutions, as well as
non-profit private institutions/orgs.
Employee -

any indiv employed by an ER

Agriculture includes farming in all its branches, and among other things,
includes the cultivation & tillage of soil, dairying, the production, cultivation,
growing & harvesting of any agricultural & horticultural commodities, the
raising of livestock or poultry, and any practices performed by a famer on a
farm as an incident to or in conjunction with such farming operations, but
does not include the manufacturing or processing of sugar, coconuts, abaca,
tobacco, pineapples or other farm products.
Employ includes to suffer or permit to work
Wage paid to any EE; shall mean the renumeration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, w/c is payable by and ER to an EE under a
written/unwritten contract of ENT for work done or to be done, or for services
rendered and includes the fair and reasonable value, as determined by the
Sec of Labor, of board, lodging, or other facilities customarily furnished by the
ER ro the EE.

Includes commissions the recompense compensation/reward of an

agent, salesman, executor, trustee, receiver, factor, broker or bailee,


when the same is calculated as a percentage on the amt of his
transactions or on the profit of the principal

Sonco v NLRC: Zuelig was made to pay the terminated EE (due to

retrenchment), separation pay based not only on the basic salary, but
also on the commissions, transpo & emergency living allowances.
Even if commissions were in the form of incentives or encouragement,
still these commissions are direct renumerations for services rendered
w/c contributed to the increase of income of the ER.

The nature of

work of a salesman & the reason for such type of renumeration for
services rendered demonstrate that commissions are part of their wage
or salary. (Some salesmen do not receive any basic salary but

depend on commissions & allowances or commissions alone, although


an EE-ER relationship exists).
Includes facilities or commodities fair & reasonable value of board,

lodging, or other facilities customarily furnished by the ER to the EE.


An ER may provide, for instance, food & housing to his EEs but he
may deduct their values from the EES wages to be determined by
the Sec of Labor.
Snacks

70%

- deducted from wages (must be authorized in writing)

30% - subsidized by the ER


Lodging facility the cost of operation & maintenance, including
adequate depreciation plus amt of capital invested by the ER, provided
that if the total is more than the fair rental value ( or the fair price of
the commodities or facilities offered for sale)

Fair rental value -shall be the reasonable cost of the operation &
maintenance.
Rate of depreciation & depreciated amt those arrived at under good
accounting practices
Good accounting practices shall NOT include accounting practices
w/c have been rejected by the BIR for IT purposes
Depreciation shall include obsolescence
In order that the cost of facilities furnished by the ER may be
charged against an EE, his acceptance of such facilities must be

voluntary

Excludes allowances -

Fair & reasonable value shall NOT include any profit to the ER or to any
person affiliated w/ the ER
WAGES

SALARY

Compensation for

Denotes a higher

manual labor,

degree of ENT, or a

skilled/unskilled, paid at

superior grade of

stated times, and

services, and implies a

measured by the day,

position or office

week, month, or season


Indicates considerable

Suggestive of a larger

pay for a lower and less

and more permanent or

responsible character of

fixed compensation for

ENT

more important service

Has a less extensive

Compensation of clerks,

meaning than salary;

officers of pub corps,

being ordinarily restricted

and pub offices

to sums paid as hire or


reward to domestic or
menial servants and to
sums paid to artisans,
mechanics, laborers, and
other EEs of like class
In many situations, however, and as the SC states,
they are in essence synonymous

FACILITIES
Include articles or
services for the benefit
of the EE or his family
but shall NOT include
tools of the trade or
articles or service
primarily for the benefit
of the ER or necessary
to the conduct of the

SUPPLEMENTS

ERs business
Wage-deductible

Not wage-deductible

Benefit/privilege part of

Benefit/privilege given to

the laborers basic

the EE w/c constitutes

wages,

an extra renumeration
above & over his basic
or ordinary earning or
wage

The distinction bet a facility & a supplement is in


the purpose, (not the kind) of the item.

State Marine Corp & Royal Line, Inc. v Cebu Seamen s Assoc, inc: The
vessel

crew were provided w/ free meals by the ship owners (petitioner), not

part of their wages but as a necessary matter in the maintenance of the


health & efficiency of the crew during the voyage. They should not be
deducted from their wages. The deductions should be returned to them.

Atok-Big Wedge Assoc v Atok-Big Wedge: Supplements constitute extra

renumeration or special privileges or wages, while facilities on the other hand,


are items of expense necessary for the laborers & his familys existence &
substinence, so that by express provision of law, they form part of the wage
and when furnished by the ER are deductible therefrom, since if they are not
so furnished, the laborer would spend and pay for them just the same.
Requirements for Deducting Value of Facilities

1. Proof must be shown that such facilities are customarily furnished by the
trade (ex. Company policy or guideline showing that the meal & lodging
are part of the salary);
2. The provision of deductible facilities must be voluntarily accepted in
writing by the EE;
3. Facilities must be charged at fair & reasonable value.

Mabeza v NLRC: The ER failed to meet any of the requirements. More

significantly, the food & lodging or the electricity & water consumed by the
EE were not facilities, but supplements. Hotel workers are required to work
different shifts and are expected to be available at various odd hours, their
ready availability is a necessary matter in the operations of respondents hotel.

Gratuity - Given freely or w/o recompense; a gift; something voluntarily given in


return for a favor or services; a bounty; a tip.
-

gratuity pay is not intended to pay a worker for actual services rendered.
It is a money benefit given to the workers whose purpose is to reward
EEs who have rendered satisfactory & efficient service to the company.

Not mandatory &

not part of labor standard law

A fair days wage for fair days labor. if there is no work performed by the
EE, there can be no wage or pay

unless the laborer was able, willing and

ready to work but was prevented by the mgt or was illegally locked out,
suspended or dismissed.
Equal pay for equal work. EEs working in the PH, if they are performing

similar functions & responsibilities under similar working conditions, should be


paid under the principle of equal pay for equal work.

International School Alliance of Educators v Quisumbing: IS hires as

members of the faculty, 1)foreign-hires and 2) local-hires. The school grants


foreign-hires salary of 25% more than that of local-hires due to a) the
dislocation factor, and b) limited tenure. SC: If an ER accords EEs the same
position & rank, the presumption is that these EEs perform equal work. There
is no showing that foreign-hires perform 25% more efficiently or effectively
than the local-hires. Both groups have similar functions & responsibilities w/c
they perform under similar working conditions. The dislocation factor and
limited tenure cannot serve as valid bases for the distinction in salary rates,
and are adequately compensated by certain benefits accorded them w/c are
not enjoyed by local-hires (housing, transpo, shipping, taxes, home leave
allowance).
Agricultural Work

Industrial Work

Work on the soil and its

When the harvests are

harvests

processed into finished


product or transformed
to another product

Lower rate

Higher rate

(Agricultural EEs)

(industrial EEs)

Agricultural Activities

Preparation of the soil, planting of ramie stalks and transporting them


to the stripping sheds, stripping the fibers w/ the use of decorticating
machines run by electricity, drying the wet fibers, passing them
through the brusher to cleanse them of impurities and baling the fiers
for the market
Planting & harvesting sugar cane & other chores incidental to ordinary
farming operations
Tillage of the soil, raising of crops including discovery of plant pests
and their eradication by means of insecticides
Fishpond business

farmhands employed to cultivate the vegetable garden of a non-

agricultural corp are not agricultural workers


Art 98. This title shall NOT apply to:
1. Farm tenancy or leasehold;
2. Domestic service
3. Persons working in their respective homes in needle work or
4. In any cottage industry duly registered in accordance w/ law.
Ch 2 MINIMUM WAGE RATES
Art 99. The minimum wage rates for agricultural and non-agricultural EEs and
workers in each and every region of the country shall be those prescribed
by the Regional Tripartite Wages and Productivity Boards
Statutory Minimum Wage the lowest wage rate fixed by law that an ER can
pay his workers. Compensation w/c is less than such minimum rate is
considered an underpayment that violates the law.
-

determined for each region by the regional wage boards

provided w/ margin to take care of contingencies, such as increase of

prices of commodities and increase in wants and to provide means for a


desirable improvement in EEs mode of living (A persons needs increase
as his means increase.)

Effects:
1. benefits all wage earners by setting a floor below w/c their pay cannot
fall
2. raises the standard of competition among ERs, since it would protect
the fair-minded ER from the competition of the ER who pays his
workers a wage below subsistence;
3. is a prereq to the adoption of the SSS, w/c requires contributions from
EEs themselves
Ability to pay immaterial
-

ER cannot exempt himself from liability to pay minimum wages because of


poor financial condition of the company

Lack of funds is not a valid defense because the payment of minimum


wage is a mandatory statutory obligation

EEs not estopped to sue for difference in amount of wages


- the acceptance by an EE of the wages paid him w/o objection does not give
rise to estoppel precluding him from suing for the difference bet the amt
received and the amt he should have received pursuant to a valid minimum
wage law
Exemptions to the coverage of the Rule on minimum wages
1. Household or domestic helpers, including family drivers

and persons in

the personal service of another;


2. Homeworkers engaged in needle-work;
3. Workers employed in any establishment duly registered w/ the National
Cottage Industries and Devt Authority in accordance w/ RA 3470 provided
that such workers perform the work in their respective homes;
4. Workers in any duly registered cooperative when so recommended by the
Bureau of Cooperative Devt and upon approval by the Sec of DOLE,

provided however, that such recommendation shall be given only for the
purpose of making the cooperative viable and upon finding and

certification of said Bureau supported by adequate proof, that the


cooperative cannot resort to other remedial measures w/o serious loss or
prejudice to its operation except through its exemption from the
requirements of the Rules. The exemption shall be subj to such terms &
conditions and for such period of time as the Sec of Labor may prescribe.
5. Barangay Micro Business Enterprises (BMBE) (under RA 9178/BMBE
Law), provided that all EEs covered under this Act shall be entitled to

the same benefits given to any regular EE such as social security and
health care benefits. BMBEs are also exempt from income tax.
BMBE any business entity or enterprise engaged in the production,
processing or manufacturing of products or commodities, including
agro-processing, trading and services, whose total assets including
those arising from loans but exclusive of the land on w/c the particular
business entitys office, plant and equipment are situated, shall not be
more than P3M. (comprises no less than 90% of Ph ERs)
6. Retail Service Establishments (by virtue of RA 6727/Wage Rationalization
Act)
a.

regularly employing not more than 10 workers; and

b. upon application w/ and as determined by the Regional Board in


accordance w/ the RRs of the Commission.
If not granted, EEs shall receive the approp compensation due them
+ 1% interest per month retroactive to the effectivity of the Act.
Burden of proving such exemption rests on the ER.
7. Other exemptions by provisions of Wage Orders by the Regional
Tripartite Wage & Productivity Board

Art 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF


BENEFITS
So that the rule against diminution of supplements/benefits may apply, it must be
shown that:
1. The grant of the benefit is founded on a policy or has ripened into a
practice over a long period;
2. The practice is consistent and deliberate;

3. The practice is not due to error in the construction or application of a


doubtful or difficult question of law; and
4. The diminution or discontinuance is done unilaterally by the ER.
Food/Meal Allowance

Cebu Autobus Co v United Cebu Autobus EEs Assoc: the company

used to pay its drivers and conductors, aside from their regular salary,
a certain percentage of their daily wage, as allowance for food.
Discontinued by ER upon effectivity of Minimum Wage Law. CIR:
company practice

Nonconributory Retirement Plan

Nestle PH Inc. v NLRC: The fact that the retirement plan is

noncontributory, does not make it a nonissue in the CBA negotiations.


The EEs have a vested right over the existing benefits voluntarily
granted to them by their ER. The latter may not unilaterally withdraw,
eliminate or diminish such benefits.

Monthly Emergency Allowance

R. Tiangco & V. Tiangco v Hon. Leogardo: ERs, fishing operator and

fishbroker, discontinued paying the batillos (who work by unloading the


fish from the vessels

dependent on arrival of the vessels, hence they

work only a few days a month averaging 4 hrs a day) a fixed monthly
emergency allowance (which they had been paid as a matter of
practice/verbal agreement)
Full 13

th

illegal.

month pay

Arco Metal Products v Samahan ng Manggagawa: ER cannot shrink

away from its responsibility by merely claiming that its acts of giving full
13th month pay to EEs who have not worked for the full year is a
mistake. It has become practice.

Exceptions to the Non-Diminution Rule


1. Correction of error;

2. Negotiated benefits;
3. Wage order compliance;
4. Benefits on reimbursement basis;
5. Reclassification of position;
6. Contingent benefits or conditional bonus; and

7. Productivity incentives.

Not established practice; Mistake in App of Law

Globe Mackay v NLRC: ER had been computing the COLA by multiplying


P3/day by 30 days. Upon effectivity of Wage Order #6, and in virtue

thereof, it used 22 days or actual days of work. Union disagreed and


claimed 30 days basis as company practice. SC: Not voluntary company
practice. To be considered as such, it should have been practiced over
a long pd of time, and must be shown to have been consistent &
deliberate and not merely an erroneous application of the law.

Samahang Manggagawa sa Top Form v NLRC: Granted that the ER had


granted an across-the-board wage increase pursuant to RA 6727, that

single instance may not be considered an established company practice.


Negotiated benefits benefits initiated through negotiation bet ER & EEs,
such as CBAs, are not w/in the prohibition of Art 100 because, as
products of bilateral contract, they can only be eliminated or diminished
bilaterally. What the law forbids is elimination/modification done unilaterally
by the ER.
Wage Order Compliance the giving of across-the-board salary increases
so as to rectify a salary distortion caused by compliance w/ a wage order
cannot be said to have ripened into a company practice.

Pag-asa Steel Works v CA: To ripen into a company practice that is

demandable as a matter of right, the giving of the increase should not only
be by reason of a strict legal (as Wage Order) or contractual oblig (CBA),
but by reason of an act of liberality on the part of the ER.
Benefit on Reimbursement Basis
o

Per diem allowance a daily allowance given for each day when
an EE is away from his home base; intended to cover their cost
of lodging & subsistence when on duty outside of their permanent
station if the EE did not leave his permanent station and spent
nothing for meals & lodging outside thereof, then he is not
entitled to per diem as there is nothing to be reimbursed

Monthly ration of gas given to certain managerial EEs is not part


of their basic salary.

its temporary revocation does not

constitute a diminution of the EEs fringe benefits.


o

The elimination of an existing benefit in exchange for an equal or


better one does not violate Art 100.

Reclassification of Position; Promotion


o

from rank-and-file to supervisory - the position holders lose OT


pay and other benefits but Art 100 is not violated.

But, promotion & position reclassification must be done in GF.

National Sugar Refineries Corp v NLRS & NBSR Union : ER

implemented a Job Evaluation program affecting all EEs. Respondents were


reclassified from rank-and-file to supervisory/managerial positions. Because of
that, they lost their OT, rest day & holiday pay but it was also shown that
they received upward adjustments in basic pay & allowances. SC: This
reclassification is in essence a promotion w/c is one of the jurisprudentially
recognized exclusive prerogatives of mgt, provided in is done in GF. Union
failed to prove BF on the part of the ER.
Promotion the advancement from one position to another with an increase
in duties & responsibilities as authorized by law and usually accompanied by
an increase in salary
Contingent/Conditional Benefits; Bonus

Art 100 is n/a to a benefit whose grant depends on the existence of


certain conditions, so that the benefit is no demandable if those
preconditions are absent.

Bonus an amt granted & paid to an EE for his industry & loyalty w/c
contributed to the success of the ERs business and made possible the
realization of profits. It is an act of generosity.
- it is not a demandable and enforceable oblig. BUT! It is so when it is
made a part of the wage/salary. In such a case, the latter would be a fixed
amt and the former would be a contingent one dependent upon the realization
of profit

WON bonus forms part of wages: depends on the circs and conditions for its
payment.
a. If it is an addtl compensation w/c the ER promised and agreed to
give w/o any conditions imposed for its payment, such as success of
business or greater production or output, then it is part of the wage.

b. If it is paid only if profits are realized on a certain amt of productivity


achieved, it cannot be considered part of the wages.
c.

Where it is not payable to all but only to laborers and only when the
laborer becomes more efficient or more productive, it is only an
inducement for efficiency, a prize therefor, not a part of the wage.

Luzon Stevedoring Corp case: An ER cannot be forced to distribute

bonuses w/c it can no longer afford to pay. To hold otherwise would


be to penalize the ER for his past generosity.

American Wire & Cable Daily Rated EEs Union v AWC Co Inc & the

CA: For a bonus to be enforceable, it must have been promised by the ER


and expressly agreed by the parties, or it must have had a fixed amt and
had been a long and regular practice on the part of the ER.
Equity or Long Practice as Basis of Bonus
-

Ph Education Co. Inc v CIR: even if a bonus is not demandable for not

being part of the salary of the EE, the bonus may nevertheless be
granted on equitable consideration.
-

Marcos v NLRC:if one enters into a contract of ENT under an agreemt

that he shall be paid a certain salary by the week or some other stated

period and, in addition, a bonus, in case he serves for a specified length


of time, there is not reason for refusing to enforce the promise to pay the
bonus, if the EE has served during the stipulated time, on the ground that
it was a promise of mere gratuity.
Services Rendered as Basis of Bonus
-

EEs whose ENT has been terminated may still demand paymt of service
under company policy and of the bonuses. The R is not defeated by a
release & quitclaim

LG Marcos v NLRC & Insular Life: The fact that an EE has signed a

satisfaction receipt for his claims does not necessarily result in the waiver
thereof. The law does not consider as valid any agreement whereby a
worker agrees to receive less compensation than what he is entitled to

recover. A deed of release or quitclaim cannot bar an EE from demanding


benefits to w/c he is legally entitled.
No Profit, No Bonus
-

Traders Royal Bank v NLRC: The matter of giving the EEs bonuses

over & above their lawful salaries & allowances is entirely dependent on
the profits, if any, realized by the bank from its operations during the past
year. Since the fiscal condition having declined, the bank may not be
forced to distribute bonuses w/c it can no longer afford to pay and, in
effect, be penalized for its past generosity to its EEs.
Productivity Incentives -

bonus that comes from productivity gain, or

improved output without increasing input


-

RA 6971: EEs share is in the nature of salary bonus proportionate to


increases in current productivity over the average for the preceding 3
consecutive yrs

Not gratuitous; it is a benefit claimable only on the basis of predefined


output level

Contingent/conditional; if they are not given because the preconditions are


absent,

Art 100 is not violated

commitment to the contrary.

except perhaps if there is contractual

PD 851: 13TH MONTH PAY


-

adds 1-month pay to the usual 12-month earnings. BUT, does not change
the EEs basic wage. Hence, OT pay, restday pay, SSS contributions &
other roll-up or add-on payroll costs do not increase.

Requires at least 1 month service during the calendar yr

SCOPE: all rank-and-file EEs, regardless or salary rate.

managerial &

supervisory EEs
-

EXCEPTION: ERs who are already paying their EEs a 13 thMP or its

equivalent are not covered by the decree. (the intent of the law was to
grant addtl income to EEs not already rcving the same

th

not to all EEs

but only to the unfortunate ones who are not paid a 13 month salary or
what amounts to it, by whatever name called)
its Equivalent shall include Xmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than 1/12 of the
basic salary. When an ER pays less than 1/12 of the EEs basic salary, the
ER shall pay the difference. -

Dole PH Inc v Leogardo

shall not include cash & stock dividends, COLAs, & all other allowances
regularly enjoyed by the EEs, as well as nonmonetary benefits (food, free
electricity, etc)

Framanlis Farms Inc. v Minister of Labor: Such benefits in the form of food

or free electricity are not the proper substitute for the 13thMP required by law.
Neither may year-end rewards for loyalty & service be considered in lieu of
13thMP
If the bonus was included in or considered as the equivalent of the 13thMP,
there would be no need for a specific provision of such bonus in the CBA.

But if the CBA did provide for a bonus in graduated amts depending on the
length of service, for example, the intention is clear that the bonus provided

in the CBA was meant to be in addition to the legal requirement of 13thMP.

13thMP deemed incorporated in the CBA, employment contract.


of an express provision obligating the ER to pay

th

The absence

13 MP to the EEs is

immaterial
14th MP basically a bonus, and
-

gratuitous;

mgt prerogative & cannot be forced upon the ER; not legally demandable

Exclusions in the Computation of 13th MP

13thMP = 1/12 of the basic salary of the EE w/in a calendar year


Q: What does basic salary include?

A: Basic salary shall include all renumerations or earnings paid by an ER to an


EE for services rendered

Not included (fringe benefits)

COLAs granted pursuant to PD 525/LOI 174,


profit-sharing payments and all allowances and
monetary benefits w/c are not considered or integrated as part of the
regular or basic salary of the EE
OT Pay

Fringe benefits all allowances & monetary benefits w/c are not
considered/integrated as part of the basic salary

The items excluded by the decree may be included through established

practice or agreement binding on the ER

Q: Are commissions included in the computation?


A: It depends.
1. If the commissions may properly be considered part of the basic
salary, they should be included in computing the 13 THMP

Ph Duplicators Inc v NLRC: the sales commission earned by the

sales men constitute part of their compensation, considering that the


ER pays them a small fixed/guaranteed wage; the greater part being
composed of the sales/incentive commissions earned on actual sales
closed by them
Sales commissions are intimately related or directly proportional to the
extent or energy of an EEs endeavors; paid upon the specific results

achieved by a salesman-EE; it is a percentage of the sales closed by a


salesman & operates as an integral part of such salesmans bsic pay.

2. If they are NOT integral part of the basic salary, then they shld be
excluded.

Boie-Takeda Case: the commissions paid to medreps were excluded

from the term basic salary because these were paid to them as

productivity bonuses. They are generally tied to the productivity or


capacity for revenue production of a corp; such bonuses closely
resemble profit-sharing payments and have no clear direct or
necessary relation to the amt of work actually done by each indiv EE.
The commissions pd by Boie to its medreps could not have been
sales commissions. Medreps are not salesmen; they do not effect any
sale of any article at all. They are EEs engaged in the promotion of
pharmaceutical products or med devices manufactured by their ER.
They promote such products by visiting identified physicians & inform
such physicians orally/w/ the aid of brochures, of the existence &
chem composition of the pharma product. The addts payments given
to them were not in fact commissions but rather in the nature of profitsharing bonuses.

Guaranteed wage/commission EEs whose income is guaranteed by way of


wages and/or commissions are entitled to a 13thMP based on their earnings
that include commissions.

Ph Agricultural Commercial & Industrial Workers Union v NLRC: the bus

drivers & conductors of respondent transic co. (allegedly paid on purely

commission basis) are entitled to 13thMP on both their fixed & guaranteed
wage and commission

in the case of a bus conductor paid on commission only as supported by


his pay slips w/c indicated the varying amount of commissions he received
each trip

not included in 13THMP

Q: Is Teachers Overload Pay Included?


A: Yes. It is considered part of their basic pay for the purposes of computing
13thMP

GR: Payments for overload work w/in 8 hrs form part of the basic wage, &
therefore are to be included in the computation of 13thMP.
Overload the load in excess of the normal load of private school teachers as
prescribed by the DECS or the policies, rules & standard of particular private
schools.
Normal load- 8hrs per working day
Overload work

Overtime work

Overtime work

Overload work

Work rendered in

May be performed either

excess of the normal

w/in or outside 8 hrs in

working hrs of 8 in a

a day

day
Proportionate 13thMP
-

an EE who has resigned or was dismissed at any time before the time
for payment of the 13thMP is entitled to this monetary benefit in

proportion to the length of time he worked during the year .

unless

otherwise stipulated in the CBA

Distressed Employer exempted from paying 13thMP upon prior authorization


from the Sec of DOLE

Difference of opinion in the computation of 13 thMP is a nonstrikeable issue.


strike held on this ground is illegal.

Govt Employees not covered by 13thMP

Seafarers not covered by 13thMP; because they are contractual, not regular
EEs. Their ENT is governed by their Contract of Enlistment w/c was approved
by the POEA. It does not provide for 13thMP.

Art 101. PAYMENT BY RESULTS (Piecework)


The Sec of Labor shall regulate the payment of wages by results, including
pakyao, piecework and other noontime work, in order to ensure the
payment of fair & reasonable wage rates, preferably through time & motion
studies or in consultation w/ reps of workers & ERs orgs.
Workers paid by results workers whose pay is calculated not on the basis of
time spent on the job but of the quantity & quality or the kind of work they
turn out. (nontime work).
-

stress is placed on the unit of work produced or the quantity thereof

a uniform amount is paid per unit accomplished

Categories of Piece-rate workers


A. As to presence of control

1. those whose time & performance is supervised by the ER;

piece-rate workers, esp when they work in company premises (shoes,


handicraft, garment)

2. those whose time & performance is unsupervised by the ER.

Pakyaw & takay basis commonly practiced in the agricultural


industry (planting, harvesting per hectare of land)

Pakyaw

Piece-rate

More aptly used when

Common where the

the job/work to be

output may easily be

performed is in

counted or measured

bulk/volumes w/c are


difficult to quantify
*Payment by result is not determinative of EE-ER Relship. It is merely a method
of compensation and does not define the essence of the relation.
Basis of Output Rate; Process to set the Standard

1. On petition of any interested party, or upon its initiative, the DOLE shall

use all available reps of ERs & workers orgs, to determine whether the
EEs in any industry/enterprise are being compensated in accordance w/
the min wage reqmts

2. The basis for the establishment of rates per pc, output or contract work
shall be the performance of an ordinary worker of min skill/ability.
3. An ordinary worker of min skill/ability is the average worker of the lowest
producing group representing 50% of the total # of EEs engaged in
similar ENT in a particular establishment,

excluding learners, apprentices

& handicapped workers employed therein.


4. Where the output rates established by the ER do not conform w/ the
standards prescribed herein, or w/ the rates prescribed by the DOLE in
an approp order, the EEs shall be entitled to the diff bet the amt to w/c
they are entitled to receive under such prescribed standards/rates and
that actually paid them by the ER.

B. As to Rate of Payment

1. Those who are paid piece rates w/c are prescribed in Piece Rate Orders
issued by DOLE

# of pieces x rate per pc


-

these workers are not covered by the Rule on Hours of Work (no
premium & OT pay)
2. Those who are paid output rates w/c are prescribed by the ER and are
not yet approved by the DOLE.
# of pcs x rate per pc as determined by the ER.
a.) If the resulting amt is

than the statutory min daily rate in rel to

the # of hrs worked, the worker will rcv such amt.


b.) BUT, if the amt is less than the applicable legal rate, it is
possible that the rates per pc are not in accordance w/ the
standards. In that case, the ER is required by law to pay the
difference.

Entitlement of Piece-Rate Workers to NSD and SIL


a. Unsupervised no OT/SIL

b. Supervised entitled to OT/SIL


-

The yearly commutation/cash conversion of the SIL should be based on their


average daily earnings earned during the yr by the actual number of working
days or the statutory min rate, whichever is higher.
GR: the amt earned during the year may exclude COLA, OT pay, and
premium pay, holiday pay, NSD and company fringe benefits

there is

agreement to the contrary


Illustration of the computation
Total wages earned for 1 yr 12 = ave monthly
earning
AME

30*** = Daily Earnings

DE x 5 = five-day incentive pay


***

should be the actual days of work in a month

Entitlement to Holiday Pay


-

shall not be less than his average daily earnings for the last 7 actual

working days immediately preceding the regular holiday. Provided however,


that in no case shall the holiday pay be less than the applicable statutory
min wage rate
Entitlement to 13thMP

GR: PD 851 exempts from payment of 13thMP ERs of those who are paid a
fixed amt for performing specific work, irrespective of time consumed in the
perf thereof,

except where the workers are paid on piece-work basis (those who are paid a
standard amt for every pc/unit of work produced that is more/less regularly

replicated, w/o regard to the time spent in producing the same) in w/c case
the ER shall grant the 13thMP to such EEs.

The piece-rate worker should have rendered at least 1 month work/service


during the calendar yr.
Not Entitled to HP,ND, SIL, 13thMP
1. Field personnel

2. Unsupervised employees

3. Engaged on task/contract basis


4. Purely commission basis
5. Paid a fixed amt for performing work irrespective of the time consumed
Not Entitled to OT Pay

1. Paid on piece-work
2. Paid on takay
3. Paid on pakyaw

4. Paid on task basis if their output rates are in accordance w/ the

standards under Sec 8 Rule 7 Book 3, or where such rates have been
fixed by the Sec of Labor

Benefits Payable to Piece-Rate Workers


1. Statutory minimum wage (MW)

2. Yearly service incentive leave of 5 days w/ pay (SIL)


3. Night shift differential (ND)
4. Holiday pay (HP)
5. Meal & rest periods (Meal/rest)
6. Overtime pay (conditional) (OT)
7. Premium pay (conditional) (PP)
8. 13thMonth pay (13th)

9. other benefits granted by law, by indiv/CBA or company policy/practice


(CBA)
BWC Guidelines Summary

The rate-per-pc to be paid to a worker should be submitted to DOLE for


approval.
DOLE decides whether the outpu-and-pay proposal of the ER

fairly &

reasonably meets the legal MW, based on the output of ave. workers
doing same products under comparable conditions.
If DOLE approves the proposal it becomes the standard (quota). Because
the DOLE-approved standard is presumed fair & reasonable, a piece-rater
who does not reach the quota will earn less than the legal MW and not
w/ the pay formula. In such case the ER need not make up the diff bet
the legal MW and the wage actually earned.
On the other hand, if the outpu-and-pay scheme has not been approved
by DOLE, or does not conform w/ DOLE-issued orders, then the ER may

be required to pay the shortfall bet the actual earning and the prescribed
MW.
The piece-rate pay formula needs DOLEs approval so ast to protect the
workers right to be paid or to earn at least the MW, and at the same
time, to help the ER obtain the corresponding work ouput.
Ch 3 PAYMENT OF WAGES
Art 102. FORMS OF PAYMENT
Proof of Wage payment ER has burden of proof
The IRs require every ER to keep a payroll. Among other things, it must show
the length of time to be paid, the pay rate, the amt actually paid, and so on.
AND the EE should sign the payroll.
ER cannot pay his workers by means of:
1. Promissory notes
2. Vouchers
3. Coupons
4. Tokens
5. Tickets
6. Chits
7. Any obj other than legal tender
Even when expressly requested by the EE.
GR: Payment by legal tender
: Payment by check or money order may be allowed if the same is:
1. Customary on the date of effectivity of the LC;

2. Necessary because of special circs as determined by the Sec of Labor;


3. Stipulated in the CB; or
4. Where the ff conditions are met
a. There is a bank or other facility for encashment w/in 1km radius;
b. The ER, or any of his agents or reps, does not rcv any pecuniary
benefit directly/indirectly from the arrangement;
c.

The EEs are given reasonable time during banking hrs to


withdraw their wages from the bank w/c time shall be considered
as compensable hours worked if done during working hrs; and

d. The payment by check is w/ the written consent of the EEs


concerned if there is no CBA authorizing the payment of wages
by bank checks.
Art 103. TIME OF PAYMENT
GR:
1. At least once every 2 weeks; or
2. Twice a month at intervals not exceeding 16 days.
:
1. In case of force majeure or other circs beyond the ERs control, payment
must be made immediately after such occurrence has ceased.
2. If engaged to perform a task w/c cannot be completed in 2 weeks and in
the absence of CBA or arbitration award:
a. Payment shall be made at intervals not exceeding 16 days, in
proportion to the amt of work completed;
b. That final settlement is made upon completion of work.
Art 104. PLACE OF PAYMENT

GR: At or near the place of undertaking


:
1. When payment cannot be effected at or near the place of work by
reason of deterioration of peace & order conditions, or by reason of
actual or impending emergencies caused by fire, flood or other calamity
rendering paymt thereat impossible;
2. When the ER provides for free transpo to the EEs back and forth; and
3. Under any other analogous circs.
Prohibition: No ER shall pay his EEs in a bar, night or day club, drinking
establishment, massage clinic, dance hall or other similar places or in places
where games are played w/ stakes of money or thins representing money
except in the case of persons employed in such places.
Requisites for Payment thru Banks (Wage Rationalization Act)

1. There must be written permission of the majority of the EEs concerned in


an establishment;
2. The establishment must have 25/more EEs; and
3. The establishment must be located w/in 1 km radius to the bank

Requisites of Payment thru ATM

1. The ATM sys of paymt is w/ the written consent of the EE concerned;


2. The EEs are given reasonable time to withdraw their wages from the
bank facility w/c, if done during working hrs, shall be considered as
compensable hrs worked;
3. The sys shall allow the EE to rcv their wage w/in the period & the amt
prescribed under the LC;
4. There is a bank/ATM facility w/in 1km radius from the workplace;
5. Upon the request of the concerned EE, the ER shall issue a record
evidencing paymt of wages, benefits & deductions for a particular pd;
6. The ATM sys of paymt shall neither result in diminution of benefits &
privileges of the EE nor shall the latter incur addtl expenses in the
process; and
7. The ER shall assume full responsibility in case the wage protection
provisions of law & regulations are not complied w/ under the arrangemt

Art 105. DIRECT PAYMENT OF WAGES

GR: Wages shall be paid directly to the workers to whom they are due.
: Exceptions
1. Payment through another person

a. In case of force majeure rendering such payment impossible


provided said person is under written authority given by the
worker for the purpose;
b. When authorized under existing law, including payments for
insurance premiums of the EE and union dues where the R to
check-off has been recognized by the ER in accordance w/ a
CBA or authorized in writing by the indiv EEs concerned.

2. Payment through the heirs of the worker


-

in case the worker has died, ER may pay wages of the deceased worker
to the heirs of the latter w/o the necessity of intestate proceedings.
Procedure

1) Claimants shall execute an affidavit attesting their relshp to the


deceased and the fact that they are his heirs, to the exclusion of
all others (Affidavit of Next of Kin);
2) In case of a minor heir, affidavit shall be executed on his behalf
by his natural guardian or next of kin;
3) Affidavit shall be presented to the ER who shall make paymt
through the Sec of Labor or his rep;
4) The rep shall act as referee in dividing the amt paid among the
heirs; and
5) Payment of wages under this Art shall absolve the ER of any
further liability w/ respect to the amt paid.
3. Payment through a family member of the workers family

- where the ER is authorized in writing by the EE to pay his wages to a


member of his family
Summary of Legal Prohibitions on Wages

1) Payment of wages in non-cash form;


2) Payment of wages in night and day clubs, bars & other similar places;
3) Non-diminution of wages; and
4) Non-interference by the ERs in the EEs disposition of their wages.

Summary of Rules on Payment of Wages


What

Legal Tender.

must be

promissory notes, vouchers,

paid

coupons, tokens, tickets, chits, or


any other obj other than legal
tender

When

Once every 2 weeks, or


Twice a month at intervals of at
least 16 days

Where

At or near the place of undertaking

How

Directly to the EE

Art 106. CONTRACTOR OR SUBCONTRACTOR

Types of Contractors under the Law

1. Job Contracting or Subcontracting an arrangement whereby a principal


agrees to put out or farm out with a contractor or subcontractor the
performance or completion of a specific job, work or service w/in a definite or
predetermined period, regardless or whether such job, work, or service is t be
performed or completed w/in or outside the premises of the principal
Existence of Trilateral Relationship

-under this legitimate contracting the ff CONTRACTS exist:


a. Contract for specific job, work or service bet the principal & the
contractor/subcontractor; and
b. Contract of ENT bet the contractor/subcontractor and its workers.
Hence, the PARTIES involved are:
1. Principal;
2. Contractor/subcontractor; and
3. Contractual workers
Laws applicable between:
1. Principal & Contractor

Civil Code & pertinent commercial laws

2. Contractor & his EEs

Labor Code & special labor laws

3. Principal & contractors EEs

no EE-ER Relationship

BUT ER-EE Relship will exist bet the Principal & the Workers where the
contracting arrangement is not legitimate, as in labor-only contracting
Elements of Independent Contractor Job Contracting

1. The sub/contractor carries on a distinct and independent business and


undertakes to perform the job on his own account and under his own

responsibility, according to its own manner and method and free from the
control & direction of the principal in all matters connected w/ the
performance of the work except to the results thereof;

2. The sub/contractor has substantial capital or investment in tool, equipment


and machineries, work premises and other materials necessary in the
conduct of his business;

3. The agreement bet the principal and sub/contractor assures the

contractual EEs entitlement to all labor & health standards, free exercise
of the R to self-org, security of tenure and social & welfare benefits;

4. Must be properly registered as such in accordance w/ DO #18-02. (The


absence of registration only gives rise to the presumption that the

contractor is engaged in labor-only contracting a presumption that can be


refuted.)
2. Labor-only Contracting an arrangement where the sub/contractor merely
recruits, supplies or places workers to perform a job, work or service for a
principal, and ANY of the ff ELEMENTS is present:
a. Lack of substantial capital/investment AND performance of activities
directly related to the principals business (confirming element); or

b. The contractor does not exercise the right of control over the
performance of the contractual EE (confirming element);

c.

The arrangement is merely to recruit, supply or place workers to perform


a job, work, or service for a principal (Essential Element)
LOC = Essential Element + either or both confirming element/s

Labor-only contracting is wrong & prohibited bcoz it is an attempt to evade the


obligs of an EEr:
a) To respect EEs R to unionize;
b) R to ENT standards;
c) R to security of tenure

Substantial capital capital stocks and subscribed capitalization in the case of


corps, tools, equipment, implements, machineries and work premises, actually
& directly used by the sub/contractor in the performance or completion of the
job, work or service contracted out.
-

the law does not require both substantial capital and investment in the
form of tools, equipment, machineries, etc.

Right to control refers to the right reserved to the person for whom the service
of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner & means to be used in reaching that end

Insular life v NLRC: exclusive servicing esp springing from a

regulation issued by the Insurance Commission, and not from an intention by


the alleged ER, does not necessarily mean being under the control or ENT of
the entity being served. The relship may still be classified as independent
contractorship because the element of control is absent.
- EEs may resign from their jobs to become contractors to their
former ER, but the latter should cease controlling the means & method of
doing the work allegedly contracted, otherwise, the result is LOC.

Summary of Prohibited Labor Contracting


1. Labor-only contracting;

2. Contracting that terminates the ENT of regular EEs, or reduces their work
hrs, or reduces/splits a bargaining unit, if such contracting out is not
done in GF & not justified by business exigencies;
3. Contracting w/ a Cabo person/s or labor group w/c, in the guise of a
labor org, supplies workers to an ER w/ or w/o any monetary or other
consideration whether in the capacity of an agent of the ER or as an
ostensible independent contractor;
4. Contracting w/ in-house agency;
5. Contracting because of a strike/lockout;
6. Contracting that constitutes ULP under Art 248.

JOB CONTRACTING

LABOR-ONLY
CONTRACTING

The ER/principal is

The ER/principal is

merely an indirect ER,

treated as direct ER of

by operation of law, of

the contractors EEs in

his contractors EEs

all instances (contractor

is deemed agen of the


ER)
The law creates an ER-

The statute creates an

EE relshp for a limited

ER-EE relshp for a

purpose, i.e. to ensure

comprehensive purpose,

that the EEs are paid

i.e. to prevent a

their wages

circumvention of labor
laws

The principal becomes

The principal becomes

solidarily liable w/ the

solidarily liable w/ the

contractor in the even

contractor not only for

the latter fails to pay

unpaid wages but also

the EEs wages and for

for all the rightful claims

violation of labor

of the EEs under the

standard laws. The

LC AND ANCILLARY

liability, however does

LAWS

not extend to the paymt


of backwages or
separation pay of EEs
who are illegally
dismissed

Permissible

Prohibited by law

Presence of substantial

None

capital or investment
Note: The principal shall be SOLIDARILY liable w/ the contractor in the event of
any violation of any provision of the LC, including failure to pay wages. This
will not prevent the principal from claiming reimbursement from the contractor.
Note: The principal shall be deemed the ER of the contractual EE in any of the
ff cases as declared by competent authority:
1. Labor-only contracting; and
2. Contracting arrangement falling w/in the prohibitions

Art 107. INDIRECT ER any person, partnership, assoc or corp w/c not being
n ER, contracts w/ an independent contractor for the perf of any work, task,
job or proj.
4 Features of Legitimate Contracting

1. Parties a principal (contractee) enters into a contract w/ a contractor, or


if the principal is himself a contractor, he enters into contact w/ a subcontractor. A contracted job may be subcontracted, partly or wholly,
unless prohibited in the contract.
2. Specific job the contract calls for the performance or completion of a
specific job, work or service;
3. Period such job, work or service is to be performed or completed w/in
a definite or predetermined period; and
4. Location the contracted job, work or service may be performed or
completed inside or outside the premises of the principal

An independent contractor is one who exercises:


1. Independent ENT;
2. Contracts to do a pc of work accdg to his own methods; and
3. Is not subj to control of ER

result

The labor contractor is legit if:


1. He is a job contractor; and
2. Is properly registered w/ DOLE as the same
Judicial Notice of Job Contracting
-

The Court has already taken judicial notice of the general practice
adopted in several gort & private institutions and industries of hiring
independent contractors to perform special services. These services range
from janitorial, security and even technical or other specific services. While
these services may be considered directly related to the principal business

of the ER, nevertheless, they are not necessary in the conduct of the
principal business of the ER.
A manpower company may be a LOC in one case but an independent
contractor in another.

Coca-cola Bottlers Ph v Hingpit: Lipercon was adjudged to be a LOC

in a previous case (Guarin v Lipercon), for lacking the substantial capital. But

not so in the present case, where it has been able to establish its characted as
an independent contractor. Aside form hiring its own EEs and paying the workers
their salaries, it also exercised supervision & control over them, w/c is the most
important aspect in determining ER-EE Relshp.

Art 108. POSTING OF BOND


-

An ER or indirect ER may require the sub/contractor to furnish a bond


equal to the cost of labor under contract, on condition that the bond will
answer for the wages due the EEs should the sub/contractor, as the case
may be fail to pay the same.

Where the ER fails to require the contractor to post a bond, the ER must
answer for whatever liabilities the contractor may have incurred to his EEs.
This is w/o prejudice to its seeking reimbursement from the contractor for
whatever amt it will have to pay the EEs.

Art 109. SOLIDARY LIABILITY

The provision of existing laws to the contrary notwithstanding, every ER or


indirect ER shall be held responsible w/ his sub/contractor for any violation of
any provision of the LC. For purposes of determining the extent of their civil
liability under this Ch, they shall be considered as direct ERs.
The existence of ER-EE Relshp is a precondition to entitlement to labor
standards & labor relatios Rs.

Extent of Principals Liability in Legitimate Contracting


-

solidarily liable in the event of any violation of any provisions of the LC


1. For wages and money claims if the sub/contractor fails to pay the
wages of his EEs in accdance w/ the LC, the ER shall be jointly &
severally (solidarily) liable w/ his contractor to such EEs to the extent
of work performed under the contract, in the same manner & extent
that he is liable to EEs directly employed by him.
He cannot escape this liability even if he has paid the workers
wage rate in accordance w/ the contract w/ the contractor. The EEs
are not privy to the contract. Also, the labor standard legislations are
considered written in every contract. Similarly, legislated wage
increases are deemed amendments to the contract. Thus, ERs cannot
hide behind their contracts in order to evade their or their contractors
liability for noncompliance w/ the statutory min wage, w/o prejudice to
his R to recover whatever amount he paid from the contractor.
2. a) Reimbursement the joint & several liability of the contractor & the
principal under Arts 106, 107 & 109 of the LC is mandated to assure
compliance of the provisions including the statutory min wage. The
contractor is made liable by virtue of his status as the direct ER; and
the principal is made the indirect ER of the contractors EEs for
purposes of paying the EEs their wages should the contractor fail to
do so.
- where no ER-EE Relshp exists bet the parties, as to
reimbursement bet the principal & the contractor, the RTC has
jurisdiction
b)

Payment before Reimbursement but one may seek

reimbursement only AFTER it has paid the EEs.


c) For Other Violations qualified or limited liability; if the liability is
for failure to pay the min wage, or the SIL, or other benefits derived
from or provided for by law, the principal is equally liable w/ the
contractor as if the principal were the direct ER.

BUT,

if the liability is invested w/ punitive character, such as an

award for backwages & separation pay because of an illegal dismissal


of the contractors EE, the liability should be solely that of the
contractor in absence of proof that the principal conspired w/ the
contractor in the commission of the illegal dismissal.
Rights of Contractual EEs (EEs of a legitimate contractor)
1. Safe & healthful working conditions;

2. Labor standards such as SIL, rest days, OT Pay, holiday pay, 13thMP,
& separation pay;
3. SS & welfare benefits;
4. Self-orgs, CB and peaceful concerted action; and
5. Security of tenure.
Certain conditions required expressly stipulated in the ENT Contract
1. Specific description of the job, work or service to be performed by the
contractual EE;
2. The place of work and terms & conditions of ENT, uncluding a statement
of the wage rate applicable to the indiv contractual EE; and
3. The term/duration of ENT, w/c shall be coextensive w/ the contract of the
principal & contractor or w/ the specific phase for w/c the contractual EE
is engaged, as the case may be.
The sub/contractor shall inform the contractual EE of the foregoing terms &
conditions on or before the 1st day of his ENT.

Security of Tenure:
a. in cases of termination of ENT prior to the expiration of the contract bet
the principal

& the sub/contractor, the R of the contractual EE to

separation pay or other related benefits shall be governed by applicable


laws & jurisprudence on termination of ENT.
b. Where the termination results from expiration of contract bet the principal
& the contractor, or from completion of the phase of the job for w/c the
EE is engaged

not entitled to separation pay.

however, this shall be

w/o prejudice to completion bonuses or other emoluments, incl retirement


pay as may be provided by law/contract bet the principal & the contractor.

Security of tenure requires procedural due process for termination of ENT.


No security of tenure for casual EEs.
Registration of Contractors
Requirements:
1. Submission of annual reports
a. Sworn undertaiking that the sss, Home Devt Mutual Fund,
PhilHealth, EEs Compensation Commission (ECC), and BIR
remittances
2. They are subj to routine inspection by the DOLE
Effect of Nonregistration:
GR: The absence of registration gives rise to the presumption that the contractor
is engaged in LOC,
But, if the contractor directly supervises the workers & imposes disciplinary
action, he qualifies as a legit contractor despite nonregistration w/ DOLE.

Art. 110. WORKER PREFERENCE IN CASE OF BANKRUPTCY

Workers shall enjoy first preference as regards their unpaid wages &

other monetary claims, any provision of law to the contrary notwithstanding.


Unpaid wages earned by EEs before the declaration of bankruptcy or

judicial liquidation of the ERs business shall be given first preference &
shall be paid in full before other creditors may establish any claim to
share in the assets of the employer.
Not only unpaid wages, but also other monetary claims to w/c even

claims of the govt must be deemed subordinate.


n/a in case the ER-corp is under rehabilitation.
Conditions:
1. Formal declaration of insolvency or bankruptcy;
2. General judicial liquidation proceedings of the ERs business; and
3. Filing of claims by workers.
Art 111. ATTORNEYS FEES
Rules:

1. In cases of unlawful withholding of wages, the culpable party may be


assessed attys fees equivalent to 10% of the amt of wages recovered.
2. It shall be unlawful for any person to demand or accept, in any judicial
or admin proceedings for the recovery of the wages, attys fees w/c
exceed 10% of the amt of wages recovered.
Concepts of Attys Fees
a. Ordinary reasonable compensation paid to a lawyer by his client for the
legal services he has rendered.
b. Extraordinary indemnity for damages ordered by the court to be paid by
the losing party in a litigation, and is not to be paid to the lawyer but to
the client, unless they have agreed that the award shall pertain to the
lawyer as an addtl compensation or as a part there of.

GR: Awarded attys fee may not exceed 10%,


but bet lawyer & client quantum meruit may apply.
Quantum meruit as much as he deserves.
Basis:
1. The time spent & the extent of services rendered or required;
2. The novelty & difficulty of the questions involved;
3. The importance of the subject matter;
4. The skill demanded;
5. The probability of losing other ENT as a result of acceptance of the
proferred IBP chapter to w/c the lawyer belongs;
6. The amt involved in the controversy and the benefits resulting to the
client from the services;
7. The contingency of certainty of compensation;
8. The character of ENT, whether occasional or established; and
9. The professional standing of the lawyer.

2 Kinds of Cases where Attys Fees may be Assessed:


1. Cases arising from unlawful withholding of wages; and

2. Cases arising from CBAs.

3. Claims for death benefits ( Heirs of Aniban) : Art 111 does not limit the

award of attys fees to cases of unlawful withholding of wages only. What


it explicitly prohibits is the award of attys fees w/c exceed 10% of the
amt of wages recovered.

Non-lawyers not entitled to Attys Fees


GR: Although the law allows non-lawyers to appear before the NLRC or any
Labor Arbiter, this does not mean that they are entitled to attys fees.
Entitlement to attys fees presupposes the existence of ER-EE Relshp, and
this cannot exist unless the clients rep is a lawyer.
Union Service Fee non-lawyers may represent their org or members. The
said labor federations & local unions have a valid claim to attys fees.
PAO lawyers are disqualified from being awarded attys fees.

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