Labor Law Part I

7/28/2019 Labor Law Part I

1/104

LABOR LAW

Notes and ReviewerLABOR LAW

Notes and Reviewer

artskywalker artskywalker

Part I

Introductory Materials

Section 1. Labor Law in General

1.1Labor Law Defined [S, R, J]

1. Labor Legislation Consists of statutes, regulations andjurisprudence governing the relations between capital andlabor by:

a. providing for certain terms and conditions of employmentor

b. providing a legal framework within which these terms andconditions and the employment relationships may be

negotiated

adjusted and administered.

2. Social Legislation Includes all laws that provide particularkinds of protection or benefits to society or segments thereofin furtherance of social justice. In that sense, labor laws arenecessarily social legislation.

promote public welfare

1.2Law Classification

1. Labor Standards Law That which sets out the minimumterms, conditions and benefits of employment that ERs mustprovide or comply with and to which EEs are entitled as amatter of legal right.Ex. 8-hour labor law

2. Labor Relations Law That which defines [S R D & IM]

the status, rights and duties

and the institutional mechanisms

that govern the individual and collective interaction of ERsEEs or their representatives.

Ex. Book V of Labor Code

3. Welfare Legislation designed to take care of contingewhich may affect workers, e.g. where there is loss of incfor research beyond the workers control. BENEFITS

* Social Security Law.

1.3History and Origin

1.4Basis for Enactment

1. Art. II, Sec.5, Const. :The maintenance of peace and othe protection of life, liberty, and property, and the promof general welfare are essential for the enjoyment by apeople of the blessing of democracy.

2. Art. II, Sec. 18, Const. : The State affirms labor as a pr

social economic force. It shall protect the rights of workerspromote their welfare.3. Art. XIII, Sec. I, Const. : The Congress shall give hig

priority to the enactment of measures that protectenhance the right of all the people to human dignity, resocial, economic and political inequalities, and remove cuinequities by equitably diffusing wealth and political powethe common good.

To this end, the State shall regulate the acquisition, owneuse, and disposition of property and its increments.

* Labor and social legislation are enacted pursuant to the ppower of the State. This is its inherent power to enact wholesand reasonable laws to promote order, safety, health, moralsgeneral welfare of society. In its exercise the state may inte

with personal liberty, with property and with businessoccupation. (Calalang vs. Williams).


2/104

LABOR LAW


Notes and Reviewer


* No longer may the due process clause and the freedom ofcontract be invoked to challenge labor and social legislation. Thishas long been discarded since the 1937 case of West CoastHotel vs. Parish (US) and the 1924 case of Pp. vs. Pomar(RP).

Labor relation laws enable workers to obtain from theiremployers more than the minimum benefits set by labor

standard laws

1.5Law and Worker

The SC reaffirms its concern for the lowly worker who, often at themercy of his ER, must look up to the law for protection. Fittingly,the law regards him with tenderness and even favor and alwayswith hope in his capacity to help in shaping the nations future. It isan error to take him for granted. (Cebu Royal Plant vs. DeputyMinister of Labor)

Section 2. Labor and the Constitution2.1Constitutional Provisions

1. Art. II, Sec. 9, Const. : The State shall promote a just anddynamic social order that will ensure the prosperity andindependence of the nation and free the people from povertythrough policies that provide adequate social services,promote full employment, a rising standard of living, and animproved quality of life for all.

2. Art. II, Sec. 10, Const. : The State shall promote socialjustice in all phases of national development.

3. Art. II, Sec. 13, Const. : The State recognized the role of theyouth in nation-building and shall promote and protect theirphysical, moral, spiritual, intellectual, and social well-being. .

4. Art. II, Sec. 14, Const. : The State recognizes the role ofwomen in nation-building, and shall ensure their fundamentalequality before the law of women and men.

5. Art. II, Sec. 18, Const. : The State affirms labor as aprimary social economic force. It shall protect the rights ofworkers and promote their welfare.

6. Art.XIII, Sec. 1, Const. : The Congress shall give highestpriority to the enactment of measures that protect andenhance the right of all the people to human dignity, reduce

social, economic, and political inequalities, and remove cuinequities by equitably diffusing wealth and political powethe common good.

To this end, the State shall regulate the acquisition, owneruse, and disposition of property and its increments.

7. Art. XIII, Sec. 3 (1st par), Const. : The State shall

afford full protection to labor, local and over

organized and unorganized, and

promote full employment and equality of employ

opportunities for all . . .

8. Art. XIII, Sec. 4, Const. : The State shall, by law, undean agrarian reform program founded on the right of farand regular farmworkers, who are landless, to win collector collectively the lands they till or, in the case of farmworkers, to receive a just share of the fruits thereof . .

9. Art. XIII, Sec. 11, Const. : The State shall adopintegrated and comprehensive approach to h

development which shall endeavor to make essential ghealth and other social services available to all the peopaffordable cost . . .

10. The present Constitution has gone further than the Constitution in guaranteeing vital social and economic righmarginalized groups of society, including labor. The framethe Constitution intended to give primacy to the rights of and afford the sector full protection regardless ofgeographical location of the workers and whether theyorganized or not (Globe Mackay vs. NLRC).

2.2Protection to Labor

1. Art. XIII, Sec. 3, Const. : The State shall affordprotection to labor, local and overseas, organizedunorganized, and promote full employment and equali

employment opportunities for all.

It shall guarantee the rights of all workers to 1)organization, 2) collective bargaining and negotiations, a


3/104

LABOR LAW


Notes and Reviewer


peaceful and concerted activities including the right to strike inaccordance with law.

They shall also participate in policy and decision-makingprocesses affecting their rights and benefits as may beprovided by law.

The State shall promote the principle of shared

responsibility between workers and ERs and the preferentialuse of voluntary modes in settling disputes, includingconciliation, and shall enforce mutual compliance therewith tofoster industrial peace.

The State shall regulate the relations between workersand ERs, recognizing the right of labor to its just share in thefruits of production and the right of enterprises to reasonablereturns in investment, expansion and growth.

1935 Const. : The State shall afford protection to labor, especiallyto working women and minors, and shall regulate the relationbetween landowner and tenant, and between labor and capital inindustry and in agriculture. The State may provide for compulsoryarbitration.

Three aggregates of power against which the individualemployee needs protection

1. collective labor - Union2. collective capital - management3. collective bargaining relationship

The law, while protecting the rights of laborers, does not

authorize the oppression or destruction of the employer

Laissez Faire

1. Laissez faire or the principle of free enterprise never found fullacceptance in this jurisdiction . . . (ACCFA vs. CUGCO)

2.3Labor Sector

1. Art. II, Sec. 18, Const. : The State affirms labor primary social economic force. It shall protect the righworkers and promote their welfare.

2.4 Policy Considerations Social Justice

1. Art. II, Sec. 10, Const. : The State shall promote sjustice in all phases of national development.

2. What does social justice envision? It envisions [E, R, C

a. equitable diffusion of wealth and political power focommon good;

b. regulation of the acquisition, ownership, use disposition of property and its increments;

c. and creation of economic opportunities based on freof initiative and self-reliance. (Art. XIII, Sec. 1 & 2, CoAlcantara)

Definition[H, E, P, A]

1. Social justice is neither communism nor despotism, nor atornor anarchy, but the humanization of laws and the equalizatisocial and economic forces so that justice in its rationa

objectively secular conception may at least be approximatemeans the promotion of the welfare of the people, the adoptiomeasures by the government to ensure economic stability the competent elements of society, through the exercise of pounderlying the existence of all governments on the time-honprinciple ofsalus populi est suprema lex. (Calalang vs. Willia

2. What does social justice guarantee?

Social justice does not champion division of property of econstatus; what it guarantees are equality of opportunity, equalpolitical rights, equality before the law, equality between vgiven and received, and equitable sharing of the socialmaterial goods on the basis of efforts exerted in their produc(Guido vs. RPA)

Those who have less in life should have more in law

Equal pay for equal wok


4/104

LABOR LAW


Notes and Reviewer


Limits of Use

* The policy of social justice is not intended to countenancewrongdoing simply because it is committed by the underprivileged.At best it may mitigate the penalty but it certainly will not condonethe offense. Those who invoke social justice may do so only if theirhands are clean and their motives blameless and not simplybecause they happen to be poor. (PLDT vs. NLRC)

2.5Specific Labor Rights

* Art. XIII, Sec. 3, Const. : [In the relation between workers andERs the following rights shall be assured by the State:

a. Rights to self-organizationb. Right to collective bargainingc. Right to collective negotiationsd. Right to peaceful and concerted Activities including the right to

strikee. Right to security of Tenuref. Right to just and humane Conditions of workg. Right to a living Wageh. Right to participate in policy and Decision-making processes

(WACT BOND)

Only to those that affect the rights of employees and have

repercussions on their right to security of tenure.

Protection to Labor

1. The law must protect labor, at least to the extent of raising himto equal footing in bargaining relations with capital and toshield him from abuses brought about by the necessity forsurvival. It is safe to presume, therefore, that an EE or laborerwho waives in advance any benefit granted him by law doesso, certainly not in his interest or through generosity but underthe forceful intimidation of urgent need; and hence, he couldnot have so acted, freely and voluntarily. (Sanchez vs. HarryLyons)

2.6Other Rights

1. Art. II, Sec. 10, Const. : No law impairing the obligation ofcontracts shall be passed.

*** Compassionate Justice

- disregarding rigid rules and giving due weight to alequities of the case

- years of service without derogatory record takenaccount

- harshness of penalty also taken into account

2. Art. III, Sec. 16, Const. : All persons shall have the righspeedy disposition of their cases before all judicial, q

judicial or administrative bodies.3. Art. III, Sec. 18 (2), Const. : No involuntary servitu

any form shall exist except as a punishment for a cwhereof the party shall have been duly convicted.

Labor as Property

The right of a person to his labor is deemed property withimeaning of the Constitutional guarantees. That is his mealivelihood. He cannot be deprived of his labor or work withoutprocess of law. (Phil. Movieworkers Assn. Vs. Premiere Product

Due Process Requirements

* The twin requirements of notice and hearing constitutes esseelements of due process in cases of EE dismissal: the requiremof notice is intended to inform the EE of the ERs intent to disand the reason for the proposed dismissal; upon the other hthe requirement of hearing affords the EE an opportunity to anhis ERs charges against him and accordingly to defend himtherefrom before dismissal is effected. Neither of therequirements can be dispensed with without running afoul oConstitution. (Century Textile vs. NLRC)

Liberty of Contract and State Interference

* Legislation appropriate to safeguard to peoples vital intemay modify or abrogate contracts already in effect. Reservatiessential attributes of sovereign power is read into contracts

postulate of the legal order. All contracts made with referenany matter that is subject to regulation under the police pmust be understood as made in reference to the possible exeof that power. (Abella/Had. Danao vs. NLRC) such was the when Art. 283 of the Labor Code granted severance pay to wo


5/104

LABOR LAW


Notes and Reviewer


who at the time of their employment were not entitled under thelaw to receive such pay. (Id.)

** Employees have a vested and demandable right over existingbenefits voluntarily granted to them by their employer.

MGT. Rights [C P S T]

1. Right to conduct business2. Right to prescribe rules3. Right to select employees4. Right to transfer and discharge employees

Waiver and Compromise

* Not all waivers and quitclaims are invalid as againstpublic policy

1. It is only when there is clear proof that the waiver was wangledan unsuspecting person, or the terms of settlement areunconscionable on its face, that the law will step in to annulthe questionable transaction.

2. But where it is shown that the person making the waiver did sovoluntarily, with full understanding of what he was doing, and

the consideration for the quitclaim is credible and reasonable,the transaction must be recognized as a valid and bindingundertaking. (Sicangco vs. NLRC)

3. Should a party fail or refuse to comply with the terms of a validcompromise or amicable settlement, the other party couldeither enforce the compromise by a writ of execution, orregard it as rescinded and to insist upon his original demand.(Morales vs. NLRC)

- Voluntary consideration not unconscionable- Waiver of future benefits is not valid and binding- The law does not consider as valid any agreement

a. to receive less compensation on what a worker isentitled to recover

b. to prevent him from demanding benefits to which he isentitled

* Instances when quitclaim, waiver or compromise is valid:

1. C, a national promoter salesman, with high educaattainment, tendered his resignation after a spot audit fout that he had a tentative shortage of Php49,005.59.unbelievable that C, occupying a responsible position, andhigh education attainment, can be rattled and confusedsigning a resignation letter, on account of a mere spot a(Callanta vs. NLRC)

2. Bank and EEs association, entered into a CBA providing fowithdrawal of the pending case of the association againsbank for non-payment of Php60.00 ECOLA. There is nothithe compromise which contravenes the law, morals, customs, public order, or public policy. (Monte de PiedadMOLE)

3. During pendency of appeal before the NLRC, workers exea voluntary affidavit before the Labor Arbiter declintention to withdraw appeal in lieu of payment of severpay. The affidavits executed voluntarily and knowingly in

presence of the Labor Arbiter has the effect and authorires judicata. (Olaybar vs. NLRC)

4. A number of EEs made quitclaims in exchange fordropping of charges of embezzlement of P25 million whic

EEs allegedly embezzled. The consideration for the waivadequate. (PBC vs. Echiveri)

Instances when quitclaim, waiver or compromise invalid

1. A worker hospitalized for several times for work-reaccidents was told by an immediate supervisor apersonnel officer to retire and execute a quitclaim orwould be dismissed and got nothing. The retirementquitclaim was made under threat of dismissal. (Alcantara

2. A messenger with 5 years employment resigned and execa quitclaim after being told by his manager to resign orcharges will be filed against him. The threat was unjust the messenger did not commit any unlawful act. Thereintimidation, which vitiated consent. (Guatson ToursNLRC)


6/104

LABOR LAW


Notes and Reviewer


3. A quitclaim of future benefits made by an EE at the time ofemployment (Alcantara)

4. After the CIR rendered a decision ordering the ER to pay wagedifferentials, the EEs executed a quitclaim waiving their rightsunder the decision. The quitclaim contravenes public policysince after a civil action is filed in court, the cause of actionmay not be subject of compromise unless the same is with

leave of court. ( Pampanga Sugar Devt. Vs. SugarWorkers Assn.)

5. A quitclaim executed by an OFW repatriated to the Philippinesbecause of an illness requiring surgical treatment inconsideration of the return travel fund. There was noconsideration since the EE regularly contributed to the fund.Besides, the quitclaim is negotiable and in congruous to thedeclared policy of the State to afford protection to labor and toassure the right of workers to security of tenure . (Cuales vs.NLRC)

6. ER appealed the decision of the POEA awarding $3,800.00disability benefits to worker. During pendency of appeal, theworker executed a quitclaim in exchange for Php18,000.00since at the time the worker needed money for medical

treatment. The law does not consider valid any agreement toreceive less compensation than what the workers shouldreceive. It was clear that the worker was forced to accept the

payment out of necessity.(PISC vs. NLRC)

7. After the finality of judgment awarding them severance pay,the workers executed a quitclaim before labor arbiter who hadno participation in the case. Such settlements must beapproved by the labor arbiter before whom the case is beingheard. (St. Gothard Pub vs. NLRC)

Quitclaims are ineffective to bar recovery of the full

measure of the workers rights

Dire Necessity is not an acceptable ground to annul

releases unless there is showing that

a. workers were forced to execute themb. the considerat ions for the quitc la ims where

unconscionably low

Management Prerogatives

1. Right to select and discharge employees with valid cause2. promulgate reasonable employment rules and regulation3. designation of work to employees4. transfer and promote employees5. control company operations

6. install money-saving devices7. re-clarify or abolish positions8. sell or close business

Drug Testing

G. R. : cannot right to privacy

Exception:

- if job or occupation involve public safety

Example:

a. bus drivers

b. security guards

Participation in Decision-making Process

Only if it affects his [R, D, W]:

a. rightsb. dutiesc. welfare

- not management prerogatives regarding busoperation

- must at least be informed

1. The law explicitly considers it a State Policy to ensurparticipation of workers in decision and policy-mprocesses affecting their rights, duties and welfare. Howevline must be drawn between management prerogaregarding business operations per se and those which a


7/104

LABOR LAW


Notes and Reviewer


the rights of EEs. in treating the latter, management shouldsee to it that EEs are at least properly informed of its decisionsor modes of action. (PAL vs. NLRC) In this respect, a legislationproviding a workers representation in the Board of Directors ofcorporations is not valid since the constitutional guaranty doesnot include the workers right to participate in themanagement of the enterprise. (Alcantara)

2. May the ER be compelled to share with its EEs the prerogativeof formulating a code of discipline? I a code of disciplineunilaterally formulated by the ER enforceable? Yes, the ER hasthe obligation to share with its EEs its prerogative offormulating a code of discipline since this will be affecting theirrights and benefits. A code of discipline unilaterally formulatedand promulgated by the ER would be unenforceable. (Id.)

Section 3. Labor and the Civil Code

3. 1 Role of Law

1. Art. 1700, NCC : The relation between capital and labor aremerely contractual. They are so impressed with public interestthat labor contracts must yield to common good. Therefore,such contracts are subject to special laws on labor unions,

collective bargaining, strikes, lockouts, closed shops, wages,working conditions, hours of labor and similar subjects.

3.2 ER-EE Standard of Conduct

* Art. 1701 : Neither capital nor labor shall act oppressivelyagainst the other, or impair the convenience of the public.


8/104

LABOR LAW


Notes and Reviewer


Fair Treatment

* The NCC states that every person must in the exercise of hisrights, and in the performance of his duties, act with justice, giveeveryone his due, and observe honesty and good faith. (AHSPhils. vs. NLRC)

Law Compliance

* The return-to-work order in this case not so much confers a rightas it imposes a duty and while as a right it may be waived, it mustbe discharged as a duty even against a workers will. Thus, it doesnot constitute a violation of the right against involuntary servitude.(Sarmiento vs. Tuico) This is differentiated from the instancewhere there is a mere breach of contractual stipulation. While theEE may be held liable for damages by virtue of the breach ofcontract, he may not be compelled to work against his will becausethis will be involuntary servitude. (Alcantara)

EE Obedience and Complaince ER Orders

* It is a recognized principle that company policies and regulationsare, unless shown to be grossly oppressive or contrary to law,generally binding and valid on the parties and must be complied

with until finally revised or amended unilaterally or preferablethrough negotiation or by a competent authority. (SMC vs.Ubaldo) Deliberate disregard or disobedience of rules, defiance ofmanagement authority by the EEs cannot be countenance. Untiland unless the rules or orders imposed by the ER are declared tobe illegal or improper by competent authority, the EEs ignore ordisobey them at their own peril. (GTE Directories vs. Sanchez)

ER Obligation

* An EE must be treated as a disdained subordinate but withrespect and fairness, if not affection and gratitude due to an equal

partner. (Lagniton vs. NLRC)

Section 4. The Labor Code of the Philippines

4.1 Decree Title * Art. 1 : Labor Code of the Philippines4.2 Effectivity * Art. 2 : 6 months after its promulgation.

4. 3 Applicability

1. Art. 6: All rights and benefits granted under this Code sexcept as many otherwise be provided, apply alike tworkers, whether agricultural, or non-agricultural.

2. Art. 276: The terms and conditions of employment ogovernment of all government EEs, including EEs of GOshall be governed by the Civil Service Law.

3. Art. IX-B, Sec. 2(1), Const. :The Civil Service embracbranches of Government, including GOCCs with orcharters.

Test-GOCC

1. The rule now is that only the GOCCs with original chacome under the Civil Service Law. (Cabrera vs. NLRC)

4.4 Implementing Rules

1. Art. 5: Implementing rules and regulations of the DOLEother government agencies of the Code shall become effec

* 15 days after announcement of their adoptionewspapers of general circulation.

Limitation Rule Making Power

1. * This power is limited to the promulgation of rulesregulations to effectuate policies of the Code. Such rulesregulations must conform to the terms and stanprescribed in the statute. They cannot supplant its plainexplicit command. (Alcantara)

* A rule or regulation promulgated by an administrative bsuch as the DOLE, to implement a law, in excess of its making authority is void. (Azucena)

2. Examples of void IRRs:

* IRR providing the 10-day period specified in Art. 223 refeworking days as stated in the article.


9/104

LABOR LAW


Notes and Reviewer


* An IRR providing that EEs paid by the month shall bepresumed to be paid for all days in the month, whether workedor not. In effect, will except EEs paid by the month from theenjoyment of the holiday pay benefit. (Insular Bank EEUnion vs. Inciong)

* IRR of RA 6715 excluding security guards from those allowedto join unions. (MERALCO vs. SOLE)

* IRR including commission in the computation of 13 th monthpay. Unduly expanded the concept of basic salary. (Boie-Takeda vs. De La Serna)

4.5 Policy Declaration

* Art. 3: The State shall (APERA)

1. Afford protection to labor2. Promote full employment3. Ensure equal work opportunities regardless of sex, race or

creed4. Regulate the relations between workers and ERs.5. Assure the rights of workers to self-organization, collective

bargaining, security of tenure, and just humane conditions of

work.

4.6 Law Interpretation

1. Art. 4 : All doubts in the implementation and interpretation ofthe provisions of this Code, including its implementing rulesand regulations, shall be resolved in favor of labor.

2. Art. 1702, NCC : In case of doubt, all labor legislation andlabor contracts shall be construed in favor of the safety anddecent living of the laborer.

In Favor Labor-Rationale

* This kind of interpretation gives meaning and substance to theliberal and compassionate spirit of the law. The policy is to extend

the decrees applicability to a greater number of EEs to enablethem to avail of the benefits under the law, in consonance with theStates avowed policy to give maximum aid and protection tolabor. (Abella vs. NLRC)

Liberal Construction

* Are the provisions violative of the equal protection clauseThe ER and the laborer do not stand on equal footing; to eequality, the latter must, be afforded protection. Insofar as contracts are concerned, the same are usually draftedprepared by the ER. All doubts in their provisions should therbe resolved against it. (Alcantara)

Doubt

* When these are 2 or more possible explanations regardinissue affecting workers rights, that which favors the worker be chosen. (Clemente vs. GSIS)

No doubt

* The provision in case of doubt does not apply where the pertprovisions of the Labor Code leave no room for doubt either ininterpretation or application. (Bonifacio vs. GSIS)

Sweeping Interpretation

* The Supreme Court cannot also adopt a sweeping interpretatof the law, lest it engages itself in judicial legislation. (Bravo vEEC)

Factual Consideration and Rationality

* The care and solitude in the protection and vindication oright of workingmen cannot justify disregard of relevant facschewal of rationality in the construction of the text of applicrules in order to arrive at disposition in favor of an EE. (PALNLRC)

Equity and Moral Consideration

* Considerations of equity and social justice cannot prevail agthe expressed provisions of labor laws. (Manning vs. NLRC)

Balancing Conflicting Claims


10/104

LABOR LAW


Notes and Reviewer


* The basic policy of the law is to balance or to coordinate therights and interests of both workers and ERs. It should not bededuced that the basic policy is to favor labor to prejudice capital.(Azucena)

4.7 Enforcement and Sanctions

1. Art. 217 (a) (2), (3), (4), (6): Jurisdiction of Labor Arbitersand the Commission

1. The Labor Arbiters shall have exclusive and originaljurisdiction, except as otherwise provided, the followingcases involving all workers: (unfair labor practice)

2. Termination disputes (qualified by Art. 261 which grantvoluntary arbitrators original and exclusive jurisdiction overall unresolved grievances arising from CBAs and companypersonnel policies);

3. Cases involving terms and conditions of employment, ifaccompanied with a claim for reinstatement (includingclaims of OFWs arising out of an ER-EE relationship,including claims for actual, moral and exemplary damages,as provided in Sec. 10, Migrant Workers Act);

4. Claims for actual, moral, exemplary and other damagesarising from the ER-EE relations;

5. Except claims for EEs Compensation, Social Security,Medicare and maternity benefits, all other claims, arisingfrom the ER-EE relations; including

- those of persons in domestic or household service,involving an amount exceeding Php5,000, regardlessof whether of whether accompanied with a claim forreinstatement.

6. Disputes arising from Art. 264 including legality of strikesand lockouts

2. Art. 128 : Visitorial and Enforcement Power of the Secretary ofLabor or his duly authorized representative.

1. Accesss to ERs records and premises at anytime of theday or night whenever work is being undertaken thereinand copy thereform;

2. Question any EE; and

3. Investigate any fact, condition or matter which manecessary to determine violations of this Code of any law, wage order or rules and regulations issued pursthereto.

* In cases where the relationship of ER-EE still existspower to issue Compliance Orders to give effect to the standard provisions of this Code and other social legislatio

Writs of execution to the appropriate authority shaissued for the enforcement of the said orders, excecases:

a. where the ER contests the findings of the employment and enforcement officer; and

b. raises issues supported by documentary profits wwere not considered in the course of inspection.

* Order Stoppage of work or suspension of operations ounit or department of an establishment when non-compliposes grave and imminent danger to the health and safeworkers in the workplace.

Within 24 hours, a hearing shall be conducted to deterwhether an order for the stoppage of work and suspeof operations shall be lifted or not.

In case the violation is attributable to the fault of thhe shall pay EEs their EEs their salaries or wages dsaid period.

* It shall be unlawful for any person to Obstruct, impede, dor otherwise render ineffective the order of the SecretaLabor.

* No inferior court shall issue a temporary or permainjunction or restraining order or otherwise assume jurisdiover any case involving the enforcement orders in accordwith this Article.

* Any government EE found guilty of violation, appropriate administrative investigation, be subjecSummary dismissal from the service.


11/104

LABOR LAW


Notes and Reviewer


* The Secretary of Labor may require ERs to keep andmaintain Employment records as may be necessary. (ASCONES)

3. Art. 129. Recovery of wages, simple money and otherbenefits.

* The Regional Director of the DOLE or any of the dulyauthorized hearing officers of the Department is empowered,through summary proceedings and after due notice, to hearand decide any matter involving the recovery of wages andother monetary claims and benefits, including legal interestowing to a person employed in domestic or household service:Provided

such complain does not include claim for reinstatement

aggregate money claims of each househelper does notexceed P5,000.00

* The complaint shall be resolved within 30 days from the dateof the filing of the same.

4. Art. 288 : Penalties and Jurisdiction -

a. Except, as otherwise provided in the Code, or unless theacts complained of hinges in a question or interpretationor implementation of ambiguous provisions of an existingCBA, any violation of this Code declared to be unlawful orpenal in nature shall be punished with:

a fine not less than P1,000.00 nor more thanP10,000.00.

or imprisonment of not less than 3 months nor morethan 3 years.

Or both such fine and imprisonment at the discretion ofthe court.In addition to such penalty any alien found guilty shallbe

summarily deported upon completion of service of

service.

b. Any criminal offense punished under this Code shall beunder the concurrent jurisdiction of the MTC and the RTC.

5. Art. 289 : The penalty (of the offenses listed in the Code) shall be imposed upon the guilty officer of officerscorporation, trust, firm, partnership, association pr entity wcommitted said offenses.

6. Art. 290. Prescription of Offensses -

* Offenses penalized under this Code and the IRRs 3 yea* Unfair labor practice 1 year from accrual of such ulabor practice.

7. Art. 291 : Prescription of Money Claims- All money carising from ER-EE relations accruing during the effectivthis Code 3 years from the time the cause of actiaccrued.

8. Art. 292 : Money claims specified in Art. 291shall bebefore the appropriate entity independently of the criaction that may be instituted in the proper courts.

Pending the final determination of the merit of money cfiled with the appropriate entity, no civil action shall bewith any court.

This provision shall not apply to EEs compensation cwhich shall be processed and determined strictly in accordwith the pertinent provisions of this Code.

Section 5. Work Relationship

5. 1 Work Relationship

ER and EE

1. Art. 97 (a) and (b) : Person means individual, partnerassociation, corporation, business trust, legal representor any organized group of persons.

(b) ER includes any person acting directly or indirectly iinterest of the ER in relation to an EE and shall includeGovernment and all its branches, subdivisions instrumentalities, all GOCCs and institutions, as well as profit private institutions, or organizations.


12/104

LABOR LAW


Notes and Reviewer


2. Art. 167 (f) and (g) : (f) ER means any person, natural orjuridical, employing the services of the EE.(g) EE means any person compulsory covered by theGSIS . . ., including members of the AFP, and any personemployed as casual, emergency, temporary, substitute orcontractual, or any person compulsory covered by the SSS. .

3. Art. 212 (e) and (f) : ER includes any person acting in theinterest of the ER directly or indirectly. The term shall notinclude any labor organization or any of its officers exceptwhen acting as an ER.(f) EE includes any person in the employ of an ER. The termshall not be limited to the EEs of a particular ER, unless thisCode explicitly states. It shall include any individual whosework has ceased as a result or in connection with any currentlabor dispute or because of unfair labor practice if he has notobtained any other substantially equivalent or regularemployment.

CLASSIFICATION

1. casual2. regular

3. emergency4. temporary5. substitute6. contractual

4. Is the purchaser of the assets of an ER corporation considereda successor ER of the latters EE? No. Labor contracts are notenforceable against a transferee of an enterprise, laborcontracts being in personam, thus binding only betweenparties.

ER-EE Relationship Independent Contractor and LaborContractor

1. Art. 106 : Contractor or subcontractor

a. Whenever an ER enters into a contract with anotherperson for the performance of the formers work, the EEsof the contractor and of the latters subcontractor, if any

shall be paid in accordance with the provisions ofCode.

In the event that the contractor or the subcontractorto pay the wages of his EE in accordance with this Cthe ER shall be jointly and severally be liable witcontractor or subcontractor to such EEs to the extethe work performed under the contract, in the smanner and extent that he is liable to EEs di

employed by him.

b. There is labor-only contracting where:

1. the person supplying in workers to an ER doehave [C,I]

substantial capital

[substantial] investment in the form of equipment, machineries, work premises, aothers

2. and the workers recruited and placed by such peare performing activities which are directly relatthe principal business of such ER.

In such cases, the person or intermediary shaconsidered merely as an agent of the ER who sharesponsible to the workers in the same manneextent as if the latter were directly employed by h

2. Sec. 9, Rule VIII, Book III, IRRs : (a) Any personundertakes to supply workers to an ER shall be deemed engaged in labor-only contracting where such person :

* Does not have

substantial capital

[substantial] investment in the form of tools, equipmmachineries, work premises and other materials; and

* The workers recruited and placed by such personperforming activities which are directly related to the prinbusiness or operations of the ER in which the workerhabitually employed.


13/104

LABOR LAW


Notes and Reviewer


Labor-only contracting as defined herein is hereby prohibitedand the person acting as contractor shall be considered merelyas an agent or intermediary of the ER who shall be responsibleto the workers in the same manner and extent as if the latterwere directly employed by him.

(c) For cases not falling under this Article, the Secretary ofLabor shall determine through whether or not the contracting

out is permissible in the light of the circumstances of each caseand after considering the operating needs of the ER and therights of the workers involved.

3. Art. 107 : Indirect ER The provisions of the immediatelypreceding Article shall likewise apply in any person,partnership, association or corporation which, not being an ER,contracts with an independent contractor for the performanceof any work, job or project.

4. Art. 109 : Every ER or indirect ER shall be held responsiblewith his contractor or subcontractor for any violation of theprovisions of this Code. For purposes of determining the extentof their civil liability under this Chapter, they shall beconsidered direct ERs.

5. Sec. 8, Rule VIII, Book III, IRRs : Job Contracting There isjob contracting permissible under the Code if the followingconditions are met:

1. The contractor carries on an independent business andundertakes the contract work [A R M - F]

a. on his own accountb. under his own responsibilityc. according to his own manner and methodd. free from the control and direction of his ER or principal

in all matters connected with the performance of thework except as to the results thereof; and

2. The contractor has

a. substantial capital or

b. [substantial] investment in the form of machineries, work premises, and other materials ware necessary in the conduct of his business.

*Where the ER-EE relationship has become ascertathe ER becomes bound by statutory requirempertaining, though not limited, to terms and conditioemployment, labor relations and post employm(Phone-Poulenc vs. NLRC) Nonetheless, whe

contractor fails to pay the wages of his EEs, the ERcontracted out the job to the contractor becomes joand severally liable with his contractor to the EEs olatter to the extent of the work performed undecontract as if such ER were the ER of the contraEEs. The law itself, establishes an ER-EE relatiobetween the ER and the job contractors EEs for a limpurpose i.e. in order to ensure that the latter get paiwages due them. A similar situation obtains where thea labor-only contracting. This time, however, fcomprehensive purpose: ER for purposes of this Codprevent any violation or circumvention of any provisithis Code. The law in effect holds both the ER andlabor only contractor responsible to the latters EEmore effective safeguarding of the EEs rights unde

Labor Code. (PBC vs. NLRC)

A. DETERMINATION

* In determining whether the relationship is that of ER anor one of independent contractor, each case musdetermined on its own facts and all the features orelationship must be considered. (Villaluga vs. NLRC)

** the existence of an ER-EE relationship is a question oand cannot be made the subject of agreement

* the nature of ones business is not determined by self-seappellations one attaches thereto but by the tests providestatute and prevailing case law

B. FACTORS

1. The existence of ER-EE relationship is determinethe following elements namely:


14/104

LABOR LAW


Notes and Reviewer


a. the Selection and engagement of the EEsb. the payment of Wagesc. the power of Dismissal; andd. the power to control the EEs conduct

(WEDS) although the latter is the most important element.(Rosario Brothers vs. Ople) No particular form ofevidence is required to prove the existence of an ER-EErelationship. Any competent and relevant evidence toprove the relationship may be admitted (Opulencia vs.NLRC)

2. Is there an ER-EE relationship?

* Workers under a pakiao agreement arranged by G whomPRC considered as an independent contractor. ER givesorders to G, on where to store the copra, when to bringout, how much to load and where, and what class of coprato handle. The equipment used is owned by PRC. Yes. PRChas direct control over the handling of the copra. Thecontrol test is satisfactorily met.

* Piece workers subject to specifications. Yes. The fact thatthe making of the basket is subject to Dys specifications

indicates the existence of control. (Dy Koh Beng vs.ILMU)

* Tailors, pressers, stitchers and similar workers employedby COD on a piece-work basis. The EEs are governed bythe companys regulations i.e. 8-hour workday, recordingof attendance etc Furthermore, a master cutterdistributes job orders equally, supervises the work andsees to it that they were finished as soon as possible. Yes.The workers conduct in the performance of their work wascontrolled by the company(Rosario vs. Ople)

* Cargadores and pahinantes recruited by SMC through alabor contractor who are governed by the regulations ofthe SMC whose work consisted of loading, unloading,pilling or palleting empty bottles and wooden shells from

company trucks and warehouses. Yes. The evidence firmlyestablishes the control exercised by the SMC. (BLUM vs.Zamora)

* Shoe shiners who had their own customers but shproceeds with company. No. The company doesexercise any degree of control or supervision ovework. The shoe shiner is a partner in trade. (BesaTrajano)

* Vendees of cigarettes who are governed byregulations of the vendor company i.e. definite territory, requirement to submit daily, weekly and mo

reports, etc. Yes. Vendor company had control ovevendee. (SSS vs. CA)

*I. S, a prominent social figure, had an agreementTWS to act as branch manager; The agreement prothat she would be entitled to a part of the commissiosale of tickets; and that she would share in the expensmaintaining the office. She was also a signatory to a agreement covering the branchs premises, holding hesolidarily liable for the prompt payment of rentals. Nowas not subject to the control by TWS. The serrendered by I.S must have been done by her pursuancontract of agency. (Sevilla vs. CA)

* A plant manager hired by a marble company which

about to close in a few months time due to buslosses. The company had no control over the former, eas to hours of work or method of accomplishing the w

The former was entitled to a percentage of the net pof the company for that period. No. Manager was mer

party to a joint venture. (CMC vs. NLRC)

* Fishermen-crew of a trawl fishing vessel subjecontrol and supervision of the owner of the vesseconduct of fishing operations; time to report to fishing etc Yes. (Ruga vs. NLRC)

* Tailors, seamstresses and other workers ohaberdashery who were paid on a piece-rate basis. were directed by the proprietor of the establishmespecified by the customers. They were required to f

jobs orders in one day before due date. Yes. They diexercise independence in their own methods, but oncontrary were subject to the control of the establishmfrom the beginning of their task to their completion.


15/104

LABOR LAW


Notes and Reviewer


also had to rely on the tools and equipment supplied bythe haberdashery. (Makati Haberdashery vs. NLRC)

* The power of control refers merely to the existence of thepower and not the actual exercise thereof.

* Caddles who are not under the control and supervision ofthe golf club as to working hours, manner of carrying outtheir services, etc. No. The club did not have the measure

of control over the incidents of the caddys work andcompensation that the ER would possess. (Manila vs.IAC)

* College teachers. Yes. The Court takes judicial noticethat a university controls the work of the members of itsfaculty; that it prescribes the courses or subjects that theyteach and the time and place for teaching. (Feati vs.Bautista)

* Jeepney drivers working under the boundary system. Yes.The driver does not have any interest in the businessbecause he did not invest anything in the acquisition of

jeeps and did not participate in the management thereof.(Citizens League of Free Workers vs. Abbas)

C. CONTROL TEST

*** There is an ER-EE relationship where the ER controls or hasreserved the right to control the EE not only as the result of thework but also as to the means by which said work is to beaccomplished (Paradise vs. Ng). The test merely calls for theexistence of the right to control the manner of doing the worknot the actual exercise of the right. (Ruga vs. NLRC) The lineshould be drawn between rules that merely serve as guidelinestowards the achievement of the mutually desired resultswithout dictating the means or methods employed in attainingit, and those that control or fix the methodology and bind orrestrict the party hired to the use of such means. The first ,which aim only to promote the result, create no ER-EErelationship unlike the second, which addresses both the result

and the means to achieve it. (Insular Life vs. NLRC) Thecontrol test calls merely for the existence of the right to controland manner of doing work, not the actual exercise of the right.(Dy Keh Beng)

D. ECONOMIC TEST

1. The absence of ER-EE relationship may be determthrough economic tests like the inclusion of the EE ipayrolls, having irregular compensation and havipersonal stake in the business. (Sevilla vs. NLRC)

E. AGREEMENT

* The existence of an ER-EE relationship is a question oand being such, it cannot be made the subject oagreement. (Tabas vs. CMC)

5.2 Independent Contractor and Labor Contractor Only

1. Art. 106 : Contractor or subcontractor

a. Whenever an ER enters into a contract with anperson for the performance of the formers workEEs of the contractor and of the latters subcontraif any shall be paid in accordance with the provisiothis Code.

In the event that the contractor or the subcontrfails to pay the wages of his EE in accordance withCode, the ER shall be jointly and severally liablehis contractor or subcontractor to such EEs toextent of the work performed under the contract, isame manner and extent that he is liable to directly employed by him.

b. There labor-only [considered as agent] contrawhere:

* the person supplying workers to an ER does not h

substantial capital

[substantial] investment in the form of equipment, machineries, work premises, aothers


16/104

LABOR LAW


Notes and Reviewer


With respect to the first requirement, the law does notrequire both substantial capital and investment in theform of tools, equipment, machineries, etc. This is clearfrom the use of the conjunction or. (Neri vs. NLRC)

2. and the workers recruited and placed by such persons areperforming activities which are directly related to theprincipal business of such ER.

With respect to the second requirement, the serviceprovided by janitors, firemen, mechanics, hired helpers andsimilar workers are considered directly related to theoperations of a company since this is necessary to theproper maintenance of the premises and machineries aswell as the protection of the company premises againstfires. (Guarin vs. NLRC)

In such cases, the person intermediary shall beconsidered merely as an agent of the ER who shall beresponsible to the workers in the same manner and extentas if the latter were directly employed by him.

*** Factors to Determine existence of IndependentContractor Relationship:

1. whether the contractor is carrying on an independentbusiness;

2. whether the work is part of the ERs general business;3. the nature and extent of the work;4. the skill required;5. the terms and duration of the relationship;6. the right to assign the performance of the work to

another;7. the control and supervision of the work and the ERs

powers with respect to the hiring, firing and paymentof salaries;

8. the duty to supply premises, tools and appliances.(Mafinco vs. Ople)

** Examples of Independent Contractor:

* Commission agent : IPC Company entered into agreementwith registered representatives who worked on a commissionbasis. While the agents were subject to a set of rules and

regulations governing the performance bond; the terminatiocertain causes, however, the agents were not required to repowork; to devote their time exclusively for the company; to accfor their time nor submit a record of their activities; and that were paid on a commission based on a certain percentage of sThe fact that for a certain specified causes (failure to meet anquota) the relationship may be terminated does not mean control exists, for the causes of termination have no relation tmeans and methods of work. (IPC vs. SSS)

* Dealership : A contract whereby one engages to purcand sell soft drinks on trucks supplied by the manufactureproviding that the other party (peddler) shall have the rigemploy his own workers, shall post a bond to protectmanufacturer against losses shall be responsible for damcaused to third person, shall obtain the necessary licensespermits and bear the expenses incurred in the sale of thedrinks. (Mafinco vs. NLRC)

Another dealership agreement wherein the dealer: handleproducts in accordance with existing laws and regulations; shis orders to the factory plant; is supplied by the factory wdelivery truck and all expenses for repairs are borne byfactory; receives no commission but given a discount for all sis responsible alone for any violation of the law, sells the produthe price agreed upon between the parties; and posts a subond of not less than P10,000.00. (La Suerte vs. DirectoLabor Relations)

* Security Agency : Shipping company entered intagreement with a security agency wherein the security agencyresponsible for the hiring and assignment of the guards, the guwere not known to the shipping company for it dealt directly the agency, and a payment of a lump sum to the agency whturn paid the compensation of the individual watchmen. Undecircumstances, the guards cannot be considered EEs ofshipping company. It is the security agency that recruits, hiresassigns the work of the watchmen. It is the wages to whichwatchman is entitled. The powers to dismiss lies with the ageLastly, since the company has to deal with the agency, and

with the individual watchmen, on matters, pertaining tocontracted task, it stands to reason that the company doesexercise any power or control over the watchmens conduct.vs. Clave)


17/104

LABOR LAW


Notes and Reviewer


* Stevedoring Services : SHIPSIDE entered into a Contractfor Services with La Union providing among others that the latterwould furnish all labor needed for stevedoring work in pierscontrolled by the former. The net balance of the stevedoringcharges will be divided equally among the parties. The records donot show any participation on the part of SHIPSIDE with respect tothe selection and engagement of the individual stevedores. Theterms and conditions of their services are matters determined not

by SHIPSIDE but by La Union. It is also sufficiently established thatLa Union exercised supervision and control over its labor force.While SHIPSIDE occasionally issued instructions to the stevedores,such instructions, in legal contemplation are mere requests sincethe privity of contract lies between the workers and La Union.(SHIPSIDE vs. NLRC)

* Collection Agency : Singer entered into a collectionagency agreement with collectors providing among others thatthe collector is to be considered at all times to be an independentcontactor; he was required to comply with certain rules andregulations (i.e. use of authorized receipts, monthly collectionquota, cash bond, and submission of report of all collections atleast once a week); and his services can be terminated in case offailure to satisfy these regulations. However, the agent was notrequired to observe office hours or to report to Singer except forremitting his collections. He did not have to devote his timeexclusively for Singer and the manner and method of collectionwere left solely to the discretion of the agent, and he shoulderedhis transaction services. (

* Messengerial/Janitorial Services : Janitors were hired byCSI and assigned to La Union Carbide. They drew their salariesfrom CSI. CSI exercised control over them through a SCI EE whogave orders and instructions. Moreover, CSI had the power toassign its janitors to various clients and pull them out. CSI was aregistered service contractor and did business with a number ofknown companies in the country. It maintains its own office andhad its own office equipment. It furnishes its janitors the cleaningequipment. (Rhone-Poulene vs. NLRC)

BCC, capitalized at P1 million fully subscribed and paid forprovided janitorial and other services to various firms. It hired Aand B and assigned them to work for FEBTC. The two reported forwork wearing the prescribed uniform of the BCC; their leave of

absences were filed directly with BCC; and their salaries donly from BCC. FEBTC however issued a job description wdetailed the functions of two. Applying the control test, BCC iER of the two. Furthermore, it had substantial capital.guidelines in the job description were laid down merely to enthe desired result was achieved. It did not, however, tell howwork should be performed. (Neri vs. NLRC)

* Repair and Maintenance Service : F doing business

hired by Shell to conduct a hydro-pressure test. He was palump sum for the work he and his men accomplished. He uthis own tools and equipment. He accepted business from companies. He was not controlled by Shell with regard tomanner in which he conducted the test. (Pilipinas Shell vs. C

** Instances of Labor-Only Contracting

* Agency hiring : PBC and CESI entered into an agreeunder which the latter undertook to supply the former witmessengers. The agreement provided that the messengers wremain EEs of CESI; PBC remitted to CESI amount equivalethe wages of the messengers; CESI in turn paid them and names are not included in the PBCs payroll; the bank, in casdismissal would request CESI, and CESI would in fact withsuch messenger, and the messengers performed their funcwithin the banks premises. CESI cannot be considered acontractor because its undertaking is not the performance specific job; it merely undertook to provide the bank with a cenumber of persons able to carry out the work of messengers.vs. NLRC)

Under the Work Contract between A and a motorshoundertook to supply labor and supervision in the performanautomotive body painting work. A and his men were paid sum, the company supplied the tools, equipment, machineriesmaterials and moreover, the jobs were done in the premises omotor shop. Aside from the fact that the company exercontrol and direction over the work done by A and his men, theof work-automobile painting was directly related to, if nointegral part of the regular business of the motor s

(Broadway Motors vs. NLRC)

LS provided helpers, janitors, mechanics to NP, a corporengaged in garment manufacturing. The agreement betwee


18/104

LABOR LAW


Notes and Reviewer


two provided that LS shall provide NP with workers, NP shall pay LSa fee based on rates fixed by the agreement, there is no ER-EErelationship between the two and LS shall have exclusive directionin the selection, engagement and discharge of its personnel andthe latter shall be within is full control. LS is a labor-onlycontractor since it is merely an agent to procure workers for thereal ER. (Guarin)

* Security Guard Hiring : Hyatt and VSS entered into a

contract of services wherein VSS agreed to protect the propertiesand premises of Hyatt by providing security guards. The securityguards filled up Hyatt employment application forms andsubmitted the forms to the Security Department of the hotel. Theirwages were paid directly by Hyatt and their assignments,promotions, supervisions and dismissal were approved by the ChiefSecurity Officer of Hyatt. (Vallum Security vs. NLRC)

Section 6. Employment Policies, Recruitment and Placement ofWorkers, and Agencies

6. 1 Employment Policies

1. Art. 12 : Statement of Objectives It is the policy of theState:

a. To promote and maintain a state of Full employmentthrough improved manpower training, allocation andutilization;

b. To protect every citizen desiring to work locally or overseasby securing for him the best possible terms and conditionsof employment;

c. To facilitate a free choice of Available employment bypersons seeking work in conformity with national interest;

d. To facilitate and regulate the Movement of workers inconformity with national interest;

e. To regulate the employment of Aliens, including the

establishment of a registration and/or work permit system;f. To strengthen the network of public employment officesand rationalize the participation of the private sector in the

Recruitment and placement of workers, locally overseas, to serve national development objectives;

g. To issue careful selection of Filipino workers for oveemployment in order to protect the good name oPhilippines abroad. (AFP MARC)

6.2 Employment Agencies

Private Sector-Agencies and Entities

A. PARTIES

A.1. Worker

* Art. 13 (a)Worker any member of the labor fwhether employed or unemployed

A.2 Agency

* Art. 13 (c) : Private fee-charging employmagency any person or entity engaged in the recruitor placement of workers for a fee which is charged diror indirectly, from the workers or ERs or both.

A.3 Entity

* Art. 13 (e) : Private recruitment entity person or association engaged in the recruitmentplacement of workers, locally or overseas, wicharging, directly or indirectly, any fee from the workethe ERs or both.

B. ALLOWED ENTITIES

B.1Allowed Private Agencies and Entities

* Art. 16 : Except as provided in Chapter II of this Titlperson or entity, other than the public employment ofshall engage in the recruitment and placement of workers.

Sec. 1, Rule III, Book I, IRRs No person or entity engage in the recruitment and placement of workers eithelocal or overseas employment except the following: [alloagencies]


19/104

LABOR LAW


Notes and Reviewer


1. public employment agencies2. POEA3. private recruitment entities4. private employment agencies5. shipping or manning agents or representatives; and6. such other persons or entities as may be authorized by the

Secretary.

*Art. 25 : . . . the private employment sector shall participate

in the recruitment and placement of workers, locally andoverseas, under such guidelines, rules and regulations as maybe issued by the Secretary of Labor.

B.2 Prohibited Business Agencies and Entities

1. Art. 18 : Ban on Direct Hiring No ER may hire a Filipinoworker for overseas employment except through theBoards and entities authorized by the Secretary of Labor.

a. Direct hiring by members of the diplomatic corps;b. International organizations and such other ERs as may

be;c. allowed by the Secretary of Labor is exempted from this

provision.

2. Art. 26 : Travel agencies and sales agencies of airlinecompanies are prohibited from engaging in the business ofrecruitment and placement of workers for overseasemployment, whether for profit or not.

C. GOVERNMENT TECHNIQUES OF REGULATION PRIVATERECRUITMENT AND PLACEMENT BUSINESS

C.1 Licensing, Citizenship, Capitalization, Duration,Transferability and Fees

1. Art. 27 : Citizenship Requirement:

a. Only Filipino citizens orb. Only corporations, partnerships or entities at least 75%

of the authorized and voting capital stock of which isowned and controlled by Filipino citizens shall bepermitted to participate in the recruitment andplacement of workers, locally or overseas.

2. Art. 28 : Capitalization Substantial capitalizatiodetermined by the Secretary of Labor. (P1 M)

Sec. 1, Rule V, Book I, IRRs : Qualification of Applicfor Private employment agencies All applicantlicenses to operate private employment agencies eithelocal or overseas recruitment and placement shall posthe following qualifications. . .

3. Art. 29 : Non-tranferability of License or Authority

No license or authority shall be used direct

indirectly by any other person other than the owhose favor it was issued; or

at any place other than that stated in the licen

authority

nor such license or authority be transferred, conv

or assigned to any other person or entity.

Any transfer of business address, appointmen

designation of any agent or representative inclthe establishment of additional offices everywshall be subject to the prior approval of the DOLE.

4. Art. 15 (a) 2 : (a) The Bureau of Employment Sershall be primarily responsible for developing monitoring a comprehensive employment program. Ithave the power and duty:

1) To establish and maintain a registration alicensing system to regulate private sector participatithe recruitment and placement of workers, localoverseas, and to secure the best possible termsconditions of employment for Filipino contract workerscompliance therewith under such rules and regulatiomay be issued by the Minister of Labor.

5. Distinguish authority from license? Authority medocument issued by the Secretary of Labor Employment authorizing a person or association to enin recruitment and placement activities as a prrecruitment entity; while a license is the docu


20/104

LABOR LAW


Notes and Reviewer


issued to a person or entity to operate a privateemployment agency. (Art. 13)

6. What is the duration of a license recruit? A license is validfor a period of 2 years from the date of issuance unlesssooner cancelled, revoked or suspended for violation of theLabor Code or its IRRs.

non-tranferrable

C.2 Bonds

1. Art. 31 : All applicants for license or authority shall postsuch cash and surety bonds as determined by theSecretary of Labor to guarantee compliance withprescribed recruitment procedures, rules and regulations,and terms and conditions of employment as appropriate.

2. The purpose of bonds is to insure that if the rights of theseoverseas workers are violated by their ERs recourse wouldstill be available to them against the local companies thatrecruited them for the foreign principal. (Stronghold vs. CA)

C.3 Workers Fees

* Art. 32 : Any person applying with a private fee-chargingemployment agency for employment assistance shall not becharged any fee until

1. he has obtained employment through its efforts; or2. he has actually commenced employment. Such fee shall be

always covered with the appropriate receipt clearlyshowing the amount paid. The Secretary of Labor shallpromulgate the schedule of allowable fees.

C.4 Reports Submission

* Art. 33 : Whenever the public interest requires, theSecretary of Labor may direct all persons or entities within thecoverage of this Title to submit a report on the status ofemployment, including job vacancies, details of job

requisitions, separation from job, wages, other terms andconditions, and other employment data.

Percentage of salary remittance

1. seaman 80%2. construction worker 70%3. professional workers with free board and lodging 70%4. professional without board and lodging 50%5. domestic helpers 50%6. other workers 50%

C.5 Prohibited Practices [IF FAITS CHOW]

1. Art. 34 : Prohibited Practices It shall be unlawful foindividual, entity license or holder of authority:

1. To charge or accept; directly or indirectly, any amgreater than that specified in the schedule of allowfees, or make a worker pay any amount greaterthat actually received by him as a loan or advance

2. To furnish or publish any false notice or informatidocument in relation to recruitment or employm[includes the act of furnishing fake employdocuments to a worker. (Azucena)

3. To give any false notice, testimony, informatiodocument or commit any Act of misrepresentatiothe purpose of securing a license of authority uthis Code;

4. To induce or attempt to induce a worker alemployed to quit his employment in order to offeto another unless the transfer is so designed to libthe worker from oppressive terms and conditioemployment;

5. To influence or attempt to influence any persoentity not to employ any worker who has not apfor employment through his agency;

6. To engage in the recruitment or placement of woin jobs Harmful to public health or morality or todignity of the Republic of the Philippines;

7. To obstruct or attempt to obstruct inspection bsecretary of Labor or by his duly authorepresentatives;

8. To Fail to file reports on the status of employmplacement vacancies, remittance of foreign exchearnings, separation from jobs, departures and


21/104

LABOR LAW


Notes and Reviewer


other matters of information as may be required by theSecretary of Labor;

9. To substitute or alter employment contracts approvedand verified by the DOLE from the time of actualsigning thereof by the parties up to and including theperiod of expiration of the same without the approvalof the Secretary of Labor Unless it is to improve theterms and conditions of employment. (Vir-Jen vs.NLRC);

10. To become an officer or member of any corporationengaged in Travel agency or to be engaged directly orindirectly in the management of a travel agency;

11. To Withhold or deny travel documents from applicantworkers before departure for monetary or financialconsideration other than those authorized under thisCode and its implementing rules and regulations.

2. A, Filipina, was recruited by a local private employmentagency for a tutoring job abroad. Upon arrival in the placeof employment, she was made to work as a housemaid.What advice will you give her? I will advice the Filipina tocommence a criminal action against the employmentagency for violation ofArt. 34 of the Labor Code. She wasrecruited under false pretense. (Alcantara)

3. STC, a travel agency, advertised for young women to workas domestic helpers in Hongkong. Five women who left forHongkong were later brought to prostitution houses. Havethe officers of STC committed any unlawful acts? Yes.Violation of Art. 26 and Art. 34 (d) and (f) of the LaborCode. (Alcantara)

C.6 Illegal Recruitment

1. Art. 13 (b) : Recruitment and Placement - Act of[CEC-TUHPI]

a. Canvassingb. Enl is tingc. Contracting

d. Transportinge. Ut il iz ingf. Hiring org. Procuring workers and

h. Includes referrals, contracts services, promisinadvertising for employment, locally or abroad, whfor profit or not.

Provided

That any person or entity which, in any manner, oor promises for a fee employment to 2 or more peshall be deemed engaged in recruitment or placem

[The number of persons dealt with is not, an esseingredient of the act of recruitment or placementprovision merely lays down a rule of evidencewhere a fee is collected in consideration of a proor offer of employment to 2 or more prospeworkers, the individual or entity dealing with thembe deemed to be engaged in the act of recruitmeplacement. (Pp vs. Panis)

** Illegal termination

- full reimbursement fees + 12%- salaries for unexpired portion or 3 mos. For e

year of unexpired term whichever is lower

** Liability of private employment agenemployment contract

- joint and solidary with employer- all claims and liabilities that may aris

connection with the implementation ofcontracts

2. Any recruitment activities, including the prohpractices, enumerated under Art. 34 of this Code, tundertaken by non-licensees or non-holders of authshall be deemed illegal and punishable under Art. 39 oCode.


22/104

LABOR LAW


Notes and Reviewer


* Illegal recruitment when committed by a:

syndicate

or in large scale

shall be considered an offense involving economicsabotage and shall be penalized in accordance with Art. 39hereof.

- non-bailable- life imprisonment

** Illegal recruitment by a syndicate Carried out by agroup of 3 or more persons conspiring and/orconfederating with one another in carrying out anyunlawful or illegal transaction, enterprise or schemedefined under the first paragraph hereof.

** Illegal recruitment in large scale Committedagainst 3 or more persons individually or as a group.

[When the Labor Code speaks of illegal recruitment,committed against 3 or more persons, it must beunderstood as referring to the number of complainants

therein, otherwise, prosecutions for single crimes of illegalrecruitment can be cumulated to make out a case of largescale illegal recruitment. In other words, a conviction forlarge-scale illegal recruitment must be based on a findingin each case if illegal recruitment of 3 or more personswhether individually or as a group. (Pp vs. Reyes)

3. Sec. 8, Migrant Workers Act : A criminal action arisingfrom illegal recruitment as defined herein shall be filedwith the RTC of the province or city where the offense wascommitted or where the offended party actually resides atthe time of the commission of the offense: provided, Thatthe court where the criminal action is first filed shallacquire jurisdiction to the exclusion of other courts.

4. The crime of illegal recruitment has 2 elements:

a. That the offender is a non-license or non-holdauthority to lawfully engage in the recruitmentplacement of workers; and

b. That the offender undertakes any of the recruitactivities defined underArt. 13 (b) of the Labor Coany of the prohibited practices enumerated under34 of the same Code.

5. G convinced F and S, that they could be employe

France for a fee. G was also able to persuade A thacould give A a working visa. Nothing happened to F, SA. G did not have any license to recruit or authorirecruit? A may be charged and convicted of a large-illegal recruitment since he did not have the licenauthority to recruit, and yet recruit at least 3 personsvs. Turda) Furthermore, he can also be convictedcharged of estafa since the latter is a malum in sethe former is a malum prohibium (Id.)

6. NATO, a national union of teachers was able to findabroad for its member by directly contacting teachers organizations in foreign countries, wicharging additional fees. Is this legal? No. Only persoentities with appropriate license or authority can engarecruitment and placement of workers. Contact ser

are activities that fall within the scope of recruitmentplacement of workers. (Alcantara)

7. A paper manufacturing company in Cainta would liknow if it needs to obtain a license authority before irecruit workers for its plant. No license or authornecessary. The company is not engaged in the businerecruitment and placement of workers, it is not recruworkers to be employed by others. It does not represeprincipal. It is recruiting its own workers. (Alcantara)

C.7 Rule Making

* The Secretary of Labor and Employment has the poweauthority not only to restrict and regulate the recruitment

placement activities of all agencies but also promulgate and regulations to carry out the objectives and implemenprovisions governing said activities. (Eastern AssuranceSecretary of Labor)


23/104

LABOR LAW


Notes and Reviewer


C.8 Enforcement

1. Art. 36 : The Secretary of Labor shall have the power torestrict and regulate the recruitment and placementactivities of all agencies within the coverage of this Titleand is hereby authorized to issue orders and promulgaterules and regulations to carry out the objectives andimplement the provisions of this Title.

Sec. 2, Rule VI, Book I, IRRs : Pending investigation ofthe complaint or report, the Secretary may suspend thelicense of the private employment agency concerned. . .

2. Art. 37 : The Secretary or his duly authorizedrepresentatives may, at any time, inspect the premises,books of account and records of any person or entitycovered by this Title, require it to submit records regularlyon prescribed forms, and act on violations of any provisionsof any provisions of this Title.

Public Sector Agencies

A. EMPLOYMENT OFFICES AND THE POEA

1. Art. 14 (a) : The Secretary of Labor shall have the powerand authority: (a) To organize and establish newemployment agencies in addition to the existingemployment offices under the DOLE as the need arises.

2. Sec. 3, EO 247 : POEA functions

a. Regulate pr ivate sector participat ion in therecruitment and overseas placement of workers bysetting up a licensing and registration system;

b. Formulate and implement in coordination withappropriate entities concerned, a system forpromoting and monitoring the overseas employmentof Filipino workers taking into consideration theirwelfare and the domestic manpower requirements;

c. Protect the rights of Filipino workers to fair andequitable recruitment and employment practices andensure their welfare;

d. Exercise original and exclusive jurisdiction to and decide all pre-employment cases whichadministrative in character involving or arising oviolation of recruitment laws, rules and regulationviolation of the conditions for issuance of licenauthority to recruit workers. The POEA ha

jurisdiction to hear and decide a claim for enforceof a foreign judgment. Such a claim must be brobefore the regular courts. (Pacific Asia vs. NLRC)

B. Definition of Terms

Sec. 1 (j), (w), (z), (ff), and (qq), Rule II, Book I, Rand regulations on Overseas Employment

1. Contract Worker - Any person working or whoworked overseas under a valid employment contract.

2. Manning agency Any person or entity recrseamen for vessels plying international waters andrelated maritime activities.

3. Name Hire Worker who is able to secure employoverseas on his own without the assistance or participof an agency.

4. Overseas employment Employment of a w

outside the Philippines, including employment on hvessels plying international waters covered by a employment contract.

5. Placement fee Amount charged by a pemployment agency from a worker for its servicesecuring employment.

6. Service fee Amount charged by a license froforeign ER as payment for actual services renderrelation to the recruitment and employment of workesaid principal.

6. 3 Sanctions

1. Art. 35 : Suspension and/or Cancellation of LicensAuthority The Secretary of Labor shall have the pow

suspend or cancel any license or authority to recruit EEoverseas employment for violations of rules and regulatiothe DOLE, the POEA, or for violation of the provisions ofand other applicable laws . .

O


24/104

LABOR LAW


Notes and Reviewer


2. Art. 39 : Penalties Violations of any provisions of this Tile orIRRs by license or holder of authority :

a. imprisonment of not less than 2 years nor more than 5years

b. or a fine of not less than P10,000.00 nor more thanP50,000.00

c. or both such imprisonment and fine, at the discretion of

the court.

3. Violation of any of the provisions thereof or its implementingrules and regulations by a non-license or non-holder ofauthority

a. imprisonment of not less than 4 years nor more than 8years

b. or a fine of not less than P20,000.00 nor more thanP100,000.00

c. or both such imprisonment and fine, at the discretion ofthe court.

4. If the offender is a corporation, partnership, association orentity, the penalty shall be imposed upon the officer orofficers of the corporation, partnership, association orentity responsible for violation; and if such officer is analien, he shall in addition to the penalties hereinprescribed, be deported without further proceedings:

* Illegal recruitment:

a. imprisonment of not less than 6 years and 1 day butnot more than 12 years and

b. a fine of not less than P200,000.00 nor more thanP500,000.00.

* Illegal recruitment constituting EconomicSabotage:

a. life imprisonment; and

b. a fine of not less than P500,000.00 nor more thanP1,000,000.00.

* The maximum penalty shall be imposed if:

a . the person illegally recruited is less than 18 yeaage; or

b. committed by a non-license or non-holder of autho

* The Secretary of Labor or his duly authorepresentative may order the closure of illegal recruitestablishments.

5. Art. 38 (c) of the Labor Code granting the Secreta

Labor the power to issue search or arrest warrandeclared unconstitutional and null and void. (SalazaAchacoso)

- money claims arising from ER-EE relatioprescribes in 3 years

- strict rules of evidence are not applicable in claimcompensation and disability benefits

6. In case of breach of the employment contract by a forbased ER, may the private employment agencrecruitment entity be held liable? What is the nature oliability of the recruitment and placement agency anprincipal? Yes. The agency or entity undertakes underto assume full and complete responsibility for all cand liabilities which may arise in connection with the u

the license or authority. The agency is jointly seveliable with the principal or foreign-based ER for any oviolations of recruitment agreement contractemployment. (Ambraque vs. NLRC; Pp vs. Catan)

Section 7. Alien Employment

7. 1 Technique of Regulation-Employment Permit

1. Art. 40 : Employment Permit of Non-resident Aliens Anyseeking admission to the Philippines for employment purpand any domestic or foreign ER who desires to engage an for employment in the Philippines shall obtain an employpermit from the DOLE . . .

For an enterprise registered in preferred areas of investmsaid employment permit must be issued upon recommend

LABOR LAW LABOR LAW


25/104

LABOR LAW


Notes and Reviewer


of the government agency charged with the supervision of theregistered enterprise.

Sec. 7, Rule XIV, Book I, IRRs : The employment permitshall be valid for a minimum period of 1 year.

2. Art. 41 : Prohibition Against Transfer of Employment (a)After the issuance of an employment permit, the alien shall nottransfer to another job or change his ER without prior approval

of the Secretary of Labor.

Art. 288 : Any alien found guilty shall be summarily deportedupon completion of service of sentence.

3. May an ER in the Philippines employ a worker who is not aFilipino citizen? Yes, except to nationalized activities such as:

a. public utility to develop, exploit and utilize naturalresources 60% Filipino;

b. Mass media 100% owned by Filipino citizensc. Advertising 70% Filipino ownedd. Retail Business 100% Filipino ownede. Financing business 60% Filipino owned

4. Are there exceptions to the prohibition against employment of

aliens in entities engaged in nationalized activities? Yes, when(a) the Secretary of Justice specifically authorizes theemployment of technical personnel; or (b) where aliens areelected members of Board of Directors in proportion to theirallowable participation in the capital; or (c) when allowed undercertain special laws. (Alcantara)

Coverage

* A resident alien need not obtain an employment permit in orderto be employed in the Philippines. (Almodiel vs. NLRC)

Employment Permit Conditions for Grant

1. Art. 40 : The employment permit may be issued to a non-

resident alien or to the applicant ER after a determination of:[W A C]

a. competent

b. able andc. willing

at the time of the application to perform the services for wthe alien is desired. [The DOLE is the agency vested

jurisdiction to determine the question of availability of theworkers. (General Milling vs. Torres)

2. Sec. 5, Rule XIV, Book I, IRRs : Requirements

Employment Permit Applicants The applicant foemployment permit shall be accompanied by the following

a. Curriculum vitae signed by the applicant indicatingeducational background, his work experience and data showing that he possesses technical skills in his tor profession.

b. Contract of employment between the ER and the princwhich shall embody the following, among others:

That the non-resident alien shall comply witapplicable laws and rules and regulations;

That the non-resident alien worker and ER shallthemselves to train at least 2 Filipino understuand

A designation by the ER of at least 2 understwhich must be the most ranking regular EEs isection or department for which the expatriatebeing hired to ensure actual transfer of technology

Section 8. Development of Human Resources

8.1 Objectives - Definitions

1. Art. 43 : It is the objectives of this [F E D]

a. Title to Develop human resourcesb. Establish training institutions, andc. Formulate such plans and programs as will ensure eff

allocation, development and utilization of the namanpower and thereby promote employment

accelerate economic and social growth.

LABOR LAW LABOR LAW


26/104

LABOR LAW


Notes and Reviewer


2. What is human resources development? Process by which theactual and potential labor force is made systematically toacquire greater knowledge, skills and capabilities for thenations sustained economic and social growth. (Sec. 1, Rule I,Book II, IRRs)

3. Define manpower? Is the portion of the population which hasactual or potential capability to contribute to the production ofgoods and services. (Sec. 1 (c), Rule I, Book II, IRRs)

4. Is human resources development intended solely to trainworkers? No. Manpower development also means training forself-employment. This is known as entrepreneurship (Art. 44(b).

5. What is dual system/training? It refers to a delivery system ofquality technical and vocational education which requirestraining to be carried out alternatively in 2 venues:

a. in school andb. in the production plant.

In school, training provides the trainee the theoreticalfoundation, basic training, develops his skill and proficiency inactual working conditions as it continues personal disciplineand work value. (Sec. 4 (p), RA 7796)

8.2 Program Incentive

* Art. 52 : Deduction from taxable income of of the value oflabor training but not to exceed 10% direct labor wage:Provided, That in the case of apprenticeship programs, theprogram is recognized by DOLE.

8.3 Training and Employment of Special Workers Apprentices,Learners and Handicapped Workers

Policy Objectives

* What is the policy of the State on apprenticeship?

1. To help meet the demand of the economy for trainedmanpower;

2. To establish a national apprenticeship program thrparticipation of ERs workers, and government and government agencies; and

3. To establish apprenticeship standards for the protectioapprentices. (Art. 57)

Definition

1. Art. 58 : Apprenticeship Practical training on th

supplemented by related theoretical instruction.2. Art. 73 : Learners Persons hired as trainees in skilled and other industrial occupations which are apprenticeable and which may be learned through pratraining on the job in a relatively short period of time wshall not exceed 3 months.

3. Art. 78 : Handicapped workers Those whose eacapacity is impaired by age or physical or mental deficieninjury

Who Can Employ and When

A. APPRENTICES must be approved by TESDA

1. Art. 60 : Only ERs in highly technical industries andin apprenticeable occupations may employ apprentice

Sec. 1, Rule IV, Book II, IRRs : Highly TechIndustries Trade, business, enterprise, industry or activity which is engaged in the application of advatechnology.

Art. 58 : Apprenticeship Occupation Requires than 3 months of practical training supplementerelated theoretical instruction.

- 1 month probation- prior approval by TESDA of the prop

apprenticeship program is a condition sine quabefore an apprenticeship can be validly entered int

- employer is not obliged to employ the apprentice aftecompletion of his training

2. Art. 70 : Apprenticeship programs shall be primvoluntary except:

LABOR LAW LABOR LAW


27/104

LABOR LAW


Notes and Reviewer


a. When national security or particular requirements ofeconomic development so demand, the President mayrequire compulsory training where the shortage oftrained manpower is deemed critical by the Secretaryof Labor.

b. Where services of foreign technicians are utilized byprivate companies in apprenticeable trades.

B. LEARNERS

- Learnership programs mus

Documents

Labor Law Part I